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[110th Congress Public Law 275]
[From the U.S. Government Printing Office]

[DOCID: f:publ275.110]

[[Page 2493]]

      MEDICARE IMPROVEMENTS FOR PATIENTS AND PROVIDERS ACT OF 2008

[[Page 122 STAT. 2494]]

Public Law 110-275
110th Congress

                                 An Act

 
   To amend titles XVIII and XIX of the Social Security Act to extend 
 expiring provisions under the Medicare Program, to improve beneficiary 
 access to preventive and mental health services, to enhance low-income 
    benefit programs, and to maintain access to care in rural areas, 
  including pharmacy access, and for other purposes. <<NOTE: July 15, 
                         2008 -  [H.R. 6331]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, <<NOTE: Medicare 
Improvements for Patients and Providers Act of 2008. Inter-governmental 
relations.>> 
SECTION 1. <<NOTE: 42 USC 1305 note.>> SHORT TITLE; TABLE OF 
                              CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Medicare 
Improvements for Patients and Providers Act of 2008''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.

                            TITLE I--MEDICARE

                  Subtitle A--Beneficiary Improvements

            Part I--Prevention, Mental Health, and Marketing

Sec. 101. Improvements to coverage of preventive services.
Sec. 102. Elimination of discriminatory copayment rates for Medicare 
           outpatient psychiatric services.
Sec. 103. Prohibitions and limitations on certain sales and marketing 
           activities under Medicare Advantage plans and prescription 
           drug plans.
Sec. 104. Improvements to the Medigap program.

                      Part II--Low-Income Programs

Sec. 111. Extension of qualifying individual (QI) program.
Sec. 112. Application of full LIS subsidy assets test under Medicare 
           Savings Program.
Sec. 113. Eliminating barriers to enrollment.
Sec. 114. Elimination of Medicare part D late enrollment penalties paid 
           by subsidy eligible individuals.
Sec. 115. Eliminating application of estate recovery.
Sec. 116. Exemptions from income and resources for determination of 
           eligibility for low-income subsidy.
Sec. 117. Judicial review of decisions of the Commissioner of Social 
           Security under the Medicare part D low-income subsidy 
           program.
Sec. 118. Translation of model form.
Sec. 119. Medicare enrollment assistance.

                Subtitle B--Provisions Relating to Part A

Sec. 121. Expansion and extension of the Medicare Rural Hospital 
           Flexibility Program.
Sec. 122. Rebasing for sole community hospitals.
Sec. 123. Demonstration project on community health integration models 
           in certain rural counties.
Sec. 124. Extension of the reclassification of certain hospitals.
Sec. 125. Revocation of unique deeming authority of the Joint 
           Commission.

[[Page 122 STAT. 2495]]

                Subtitle C--Provisions Relating to Part B

                      Part I--Physicians' Services

Sec. 131. Physician payment, efficiency, and quality improvements.
Sec. 132. Incentives for electronic prescribing.
Sec. 133. Expanding access to primary care services.
Sec. 134. Extension of floor on Medicare work geographic adjustment 
           under the Medicare physician fee schedule.
Sec. 135. Imaging provisions.
Sec. 136. Extension of treatment of certain physician pathology services 
           under Medicare.
Sec. 137. Accommodation of physicians ordered to active duty in the 
           Armed Services.
Sec. 138. Adjustment for Medicare mental health services.
Sec. 139. Improvements for Medicare anesthesia teaching programs.

            Part II--Other Payment and Coverage Improvements

Sec. 141. Extension of exceptions process for Medicare therapy caps.
Sec. 142. Extension of payment rule for brachytherapy and therapeutic 
           radiopharmaceuticals.
Sec. 143. Speech-language pathology services.
Sec. 144. Payment and coverage improvements for patients with chronic 
           obstructive pulmonary disease and other conditions.
Sec. 145. Clinical laboratory tests.
Sec. 146. Improved access to ambulance services.
Sec. 147. Extension and expansion of the Medicare hold harmless 
           provision under the prospective payment system for hospital 
           outpatient department (HOPD) services for certain hospitals.
Sec. 148. Clarification of payment for clinical laboratory tests 
           furnished by critical access hospitals.
Sec. 149. Adding certain entities as originating sites for payment of 
           telehealth services.
Sec. 150. MedPAC study and report on improving chronic care 
           demonstration programs.
Sec. 151. Increase of FQHC payment limits.
Sec. 152. Kidney disease education and awareness provisions.
Sec. 153. Renal dialysis provisions.
Sec. 154. Delay in and reform of Medicare DMEPOS competitive acquisition 
           program.

                Subtitle D--Provisions Relating to Part C

Sec. 161. Phase-out of indirect medical education (IME).
Sec. 162. Revisions to requirements for Medicare Advantage private fee-
           for-service plans.
Sec. 163. Revisions to quality improvement programs.
Sec. 164. Revisions relating to specialized Medicare Advantage plans for 
           special needs individuals.
Sec. 165. Limitation on out-of-pocket costs for dual eligibles and 
           qualified medicare beneficiaries enrolled in a specialized 
           Medicare Advantage plan for special needs individuals.
Sec. 166. Adjustment to the Medicare Advantage stabilization fund.
Sec. 167. Access to Medicare reasonable cost contract plans.
Sec. 168. MedPAC study and report on quality measures.
Sec. 169. MedPAC study and report on Medicare Advantage payments.

                Subtitle E--Provisions Relating to Part D

                    Part I--Improving Pharmacy Access

Sec. 171. Prompt payment by prescription drug plans and MA-PD plans 
           under part D.
Sec. 172. Submission of claims by pharmacies located in or contracting 
           with long-term care facilities.
Sec. 173. Regular update of prescription drug pricing standard.

                        Part II--Other Provisions

Sec. 175. Inclusion of barbiturates and benzodiazepines as covered part 
           D drugs.
Sec. 176. Formulary requirements with respect to certain categories or 
           classes of drugs.

                      Subtitle F--Other Provisions

Sec. 181. Use of part D data.

[[Page 122 STAT. 2496]]

Sec. 182. Revision of definition of medically accepted indication for 
           drugs.
Sec. 183. Contract with a consensus-based entity regarding performance 
           measurement.
Sec. 184. Cost-sharing for clinical trials.
Sec. 185. Addressing health care disparities.
Sec. 186. Demonstration to improve care to previously uninsured.
Sec. 187. Office of the Inspector General report on compliance with and 
           enforcement of national standards on culturally and 
           linguistically appropriate services (CLAS) in Medicare.
Sec. 188. Medicare Improvement Funding.
Sec. 189. Inclusion of Medicare providers and suppliers in Federal 
           Payment Levy and Administrative Offset Program.

                           TITLE II--MEDICAID

Sec. 201. Extension of transitional medical assistance (TMA) and 
           abstinence education program.
Sec. 202. Medicaid DSH extension.
Sec. 203. Pharmacy reimbursement under Medicaid.
Sec. 204. Review of administrative claim determinations.
Sec. 205. County medicaid health insuring organizations.

                        TITLE III--MISCELLANEOUS

Sec. 301. Extension of TANF supplemental grants.
Sec. 302. 70 percent federal matching for foster care and adoption 
           assistance for the District of Columbia.
Sec. 303. Extension of Special Diabetes Grant Programs.
Sec. 304. IOM reports on best practices for conducting systematic 
           reviews of clinical effectiveness research and for developing 
           clinical protocols.

                            TITLE I--MEDICARE

                  Subtitle A--Beneficiary Improvements

            PART I--PREVENTION, MENTAL HEALTH, AND MARKETING

SEC. 101. IMPROVEMENTS TO COVERAGE OF PREVENTIVE SERVICES.

    (a) Coverage of Additional Preventive Services.--
            (1) Coverage.--Section 1861 of the Social Security Act (42 
        U.S.C. 1395x), as amended by section 114 of the Medicare, 
        Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-173), 
        is amended--
                    (A) in subsection (s)(2)--
                          (i) in subparagraph (Z), by striking ``and'' 
                      after the semicolon at the end;
                          (ii) in subparagraph (AA), by adding ``and'' 
                      after the semicolon at the end; and
                          (iii) by adding at the end the following new 
                      subparagraph:
            ``(BB) additional preventive services (described in 
        subsection (ddd)(1));''; and
                    (B) by adding at the end the following new 
                subsection:

                    ``Additional Preventive Services

    ``(ddd)(1) The term `additional preventive services' means services 
not otherwise described in this title that identify medical conditions 
or risk factors and that the Secretary determines are--
            ``(A) reasonable and necessary for the prevention or early 
        detection of an illness or disability;
            ``(B) recommended with a grade of A or B by the United 
        States Preventive Services Task Force; and

[[Page 122 STAT. 2497]]

            ``(C) appropriate for individuals entitled to benefits under 
        part A or enrolled under part B.

    ``(2) In making determinations under paragraph (1) regarding the 
coverage of a new service, the Secretary shall use the process for 
making national coverage determinations (as defined in section 
1869(f)(1)(B)) under this title. As part of the use of such process, the 
Secretary may conduct an assessment of the relation between predicted 
outcomes and the expenditures for such service and may take into account 
the results of such assessment in making such determination.''.
            (2) Payment and coinsurance for additional preventive 
        services.--Section 1833(a)(1) of the Social Security Act (42 
        U.S.C. 1395l(a)(1)) is amended--
                    (A) by striking ``and'' before ``(V)''; and
                    (B) by inserting before the semicolon at the end the 
                following: ``, and (W) with respect to additional 
                preventive services (as defined in section 
                1861(ddd)(1)), the amount paid shall be (i) in the case 
                of such services which are clinical diagnostic 
                laboratory tests, the amount determined under 
                subparagraph (D), and (ii) in the case of all other such 
                services, 80 percent of the lesser of the actual charge 
                for the service or the amount determined under a fee 
                schedule established by the Secretary for purposes of 
                this subparagraph''.
            (3) Conforming amendment regarding coverage.--Section 
        1862(a)(1)(A) of the Social Security Act (42 U.S.C. 
        1395y(a)(1)(A)) is amended by inserting ``or additional 
        preventive services (as described in section 1861(ddd)(1))'' 
        after ``succeeding subparagraph''.
            (4)  <<NOTE: 42 USC 1395l note.>> Rule of construction.--
        Nothing in the provisions of, or amendments made by, this 
        subsection shall be construed to provide coverage under title 
        XVIII of the Social Security Act of items and services for the 
        treatment of a medical condition that is not otherwise covered 
        under such title.

    (b) Revisions to Initial Preventive Physical Examination.--
            (1) In general.--Section 1861(ww) of the Social Security Act 
        (42 U.S.C. 1395x(ww)) is amended--
                    (A) in paragraph (1)--
                          (i) by inserting ``body mass index,'' after 
                      ``weight'';
                          (ii) by striking ``, and an 
                      electrocardiogram''; and
                          (iii) by inserting ``and end-of-life planning 
                      (as defined in paragraph (3)) upon the agreement 
                      with the individual'' after ``paragraph (2)'';
                    (B) in paragraph (2), by adding at the end the 
                following new subparagraphs:
            ``(M) An electrocardiogram.
            ``(N) Additional preventive services (as defined in 
        subsection (ddd)(1)).''; and
                    (C) by adding at the end the following new 
                paragraph:

    ``(3) For purposes of paragraph (1), the term `end-of-life planning' 
means verbal or written information regarding--
            ``(A) an individual's ability to prepare an advance 
        directive in the case that an injury or illness causes the 
        individual to be unable to make health care decisions; and
            ``(B) whether or not the physician is willing to follow the 
        individual's wishes as expressed in an advance directive.''.

[[Page 122 STAT. 2498]]

            (2) Waiver of application of deductible.--The first sentence 
        of section 1833(b) of the Social Security Act (42 U.S.C. 
        1395l(b)) is amended--
                    (A) by striking ``and'' before ``(8)''; and
                    (B) by inserting ``, and (9) such deductible shall 
                not apply with respect to an initial preventive physical 
                examination (as defined in section 1861(ww))'' before 
                the period at the end.
            (3) Extension of eligibility period from six months to one 
        year.--Section 1862(a)(1)(K) of the Social Security Act (42 
        U.S.C. 1395y(a)(1)(K)) is amended by striking ``6 months'' and 
        inserting ``1 year''.
            (4) Technical correction.--Section 1862(a)(1)(K) of the 
        Social Security Act (42 U.S.C. 1395y(a)(1)(K)) is amended by 
        striking ``not later'' and inserting ``more''.

    (c) <<NOTE: 42 USC 1395l note.>>  Effective Date.--The amendments 
made by this section shall apply to services furnished on or after 
January 1, 2009.
SEC. 102. ELIMINATION OF DISCRIMINATORY COPAYMENT RATES FOR 
                        MEDICARE OUTPATIENT PSYCHIATRIC SERVICES.

    Section 1833(c) of the Social Security Act (42 U.S.C. 1395l(c)) is 
amended to read as follows:
    ``(c)(1) Notwithstanding any other provision of this part, with 
respect to expenses incurred in a calendar year in connection with the 
treatment of mental, psychoneurotic, and personality disorders of an 
individual who is not an inpatient of a hospital at the time such 
expenses are incurred, there shall be considered as incurred expenses 
for purposes of subsections (a) and (b)--
            ``(A) for expenses incurred in years prior to 2010, only 
        62\1/2\ percent of such expenses;
            ``(B) for expenses incurred in 2010 or 2011, only 68\3/4\ 
        percent of such expenses;
            ``(C) for expenses incurred in 2012, only 75 percent of such 
        expenses;
            ``(D) for expenses incurred in 2013, only 81\1/4\ percent of 
        such expenses; and
            ``(E) for expenses incurred in 2014 or any subsequent 
        calendar year, 100 percent of such expenses.

    ``(2) For purposes of subparagraphs (A) through (D) of paragraph 
(1), the term `treatment' does not include brief office visits (as 
defined by the Secretary) for the sole purpose of monitoring or changing 
drug prescriptions used in the treatment of such disorders or partial 
hospitalization services that are not directly provided by a 
physician.''.
SEC. 103. PROHIBITIONS AND LIMITATIONS ON CERTAIN SALES AND 
                        MARKETING ACTIVITIES UNDER MEDICARE 
                        ADVANTAGE PLANS AND PRESCRIPTION DRUG 
                        PLANS.

    (a) Prohibitions.--
            (1) Medicare advantage program.--
                    (A) In general.--Section 1851 of the Social Security 
                Act (42 U.S.C. 1395w-21) is amended--
                          (i) in subsection (h)(4)--
                                    (I) in subparagraph (A)--
                                            (aa) by striking ``cash or 
                                        other monetary rebates'' and 
                                        inserting ``, subject to 
                                        subsection (j)(2)(C), cash, 
                                        gifts, prizes, or other monetary 
                                        rebates''; and

[[Page 122 STAT. 2499]]

                                            (bb) by striking ``, and'' 
                                        at the end and inserting a 
                                        semicolon;
                                    (II) in subparagraph (B), by 
                                striking the period at the end and 
                                inserting a semicolon; and
                                    (III) by adding at the end the 
                                following new subparagraph:
                    ``(C) shall not permit a Medicare Advantage 
                organization (or the agents, brokers, and other third 
                parties representing such organization) to conduct the 
                prohibited activities described in subsection (j)(1); 
                and''; and
                          (ii) by adding at the end the following new 
                      subsection:

    ``(j) Prohibited Activities Described and Limitations on the Conduct 
of Certain Other Activities.--
            ``(1) Prohibited activities described.--The following 
        prohibited activities are described in this paragraph:
                    ``(A) Unsolicited means of direct contact.--Any 
                unsolicited means of direct contact of prospective 
                enrollees, including soliciting door-to-door or any 
                outbound telemarketing without the prospective enrollee 
                initiating contact.
                    ``(B) Cross-selling.--The sale of other non-health 
                related products (such as annuities and life insurance) 
                during any sales or marketing activity or presentation 
                conducted with respect to a Medicare Advantage plan.
                    ``(C) Meals.--The provision of meals of any sort, 
                regardless of value, to prospective enrollees at 
                promotional and sales activities.
                    ``(D) Sales and marketing in health care settings 
                and at educational events.--Sales and marketing 
                activities for the enrollment of individuals in Medicare 
                Advantage plans that are conducted--
                          ``(i) in health care settings in areas where 
                      health care is delivered to individuals (such as 
                      physician offices and pharmacies), except in the 
                      case where such activities are conducted in common 
                      areas in health care settings; and
                          ``(ii) at educational events.''.
            (2) Medicare prescription drug program.--Section 1860D-4 of 
        the Social Security Act (42 U.S.C. 1395w-104) is amended by 
        adding at the end the following new subsection:

    ``(l) Requirements With Respect to Sales and Marketing Activities.-- 
<<NOTE: Applicability.>> The following provisions shall apply to a PDP 
sponsor (and the agents, brokers, and other third parties representing 
such sponsor) in the same manner as such provisions apply to a Medicare 
Advantage organization (and the agents, brokers, and other third parties 
representing such organization):
            ``(1) The prohibition under section 1851(h)(4)(C) on 
        conducting activities described in section 1851(j)(1).''.
            (3) <<NOTE: 42 USC 1395w-21 note.>>  Effective date.--The 
        amendments made by this subsection shall apply to plan years 
        beginning on or after January 1, 2009.

    (b) Limitations.--
            (1) Medicare advantage program.--Section 1851 of the Social 
        Security Act (42 U.S.C. 1395w-21), as amended by subsection 
        (a)(1), is amended--

[[Page 122 STAT. 2500]]

                    (A) in subsection (h)(4), by adding at the end the 
                following new subparagraph:
                    ``(D) shall only permit a Medicare Advantage 
                organization (and the agents, brokers, and other third 
                parties representing such organization) to conduct the 
                activities described in subsection (j)(2) in accordance 
                with the limitations established under such 
                subsection.''; and
                    (B) in subsection (j), by adding at the end the 
                following new paragraph:
            ``(2) Limitations.--The Secretary shall establish 
        limitations with respect to at least the following:
                    ``(A) Scope of marketing appointments.--The scope of 
                any appointment with respect to the marketing of a 
                Medicare Advantage plan. Such limitation shall require 
                advance agreement with a prospective enrollee on the 
                scope of the marketing appointment and documentation of 
                such agreement by the Medicare Advantage organization. 
                In the case where the marketing appointment is in 
                person, such documentation shall be in writing.
                    ``(B) Co-branding.--The use of the name or logo of a 
                co-branded network provider on Medicare Advantage plan 
                membership and marketing materials.
                    ``(C) Limitation of gifts to nominal dollar value.--
                The offering of gifts and other promotional items other 
                than those that are of nominal value (as determined by 
                the Secretary) to prospective enrollees at promotional 
                activities.
                    ``(D) Compensation.--The use of compensation other 
                than as provided under guidelines established by the 
                Secretary. Such guidelines shall ensure that the use of 
                compensation creates incentives for agents and brokers 
                to enroll individuals in the Medicare Advantage plan 
                that is intended to best meet their health care needs.
                    ``(E) Required training, annual retraining, and 
                testing of agents, brokers, and other third parties.--
                The use by a Medicare Advantage organization of any 
                individual as an agent, broker, or other third party 
                representing the organization that has not completed an 
                initial training and testing program and does not 
                complete an annual retraining and testing program.''.
            (2) Medicare prescription drug program.--Section 1860D-4(l) 
        of the Social Security Act, as added by subsection (a)(2), is 
        amended by adding at the end the following new paragraph:
            ``(2) The requirement under section 1851(h)(4)(D) to conduct 
        activities described in section 1851(j)(2) in accordance with 
        the limitations established under such subsection.''.
            (3) Effective date.-- <<NOTE: Deadline. 42 USC 1395w-21 
        note.>> The amendments made by this subsection shall take effect 
        on a date specified by the Secretary (but in no case later than 
        November 15, 2008).

    (c) Required Inclusion of Plan Type in Plan Name.--
            (1) Medicare advantage program.--Section 1851(h) of the 
        Social Security Act (42 U.S.C. 1395w-21(h)) is amended by adding 
        at the end following new paragraph:
            ``(6) Required inclusion of plan type in plan 
        name. <<NOTE:  Effective date.>> --For plan years beginning on 
        or after January 1, 2010, a Medicare Advantage organization must 
        ensure that the name of

[[Page 122 STAT. 2501]]

        each Medicare Advantage plan offered by the Medicare Advantage 
        organization includes the plan type of the plan (using standard 
        terminology developed by the Secretary).''.
            (2) Prescription drug plans.--Section 1860D-4(l) of the 
        Social Security Act, as added by subsection (a)(2) and amended 
        by subsection (b)(2), is amended by adding at the end the 
        following new paragraph:
            ``(3) The inclusion of the plan type in the plan name under 
        section 1851(h)(6).''.

    (d) Strengthening the Ability of States to Act in Collaboration With 
the Secretary to Address Fraudulent or Inappropriate Marketing 
Practices.--
            (1) Medicare advantage program.--Section 1851(h) of the 
        Social Security Act (42 U.S.C. 1395w-21(h), as amended by 
        subsection (c)(1), is amended by adding at the end the following 
        new paragraph:
            ``(7) Strengthening the ability of states to act in 
        collaboration with the secretary to address fraudulent or 
        inappropriate marketing practices.--
                    ``(A) Appointment of agents and brokers.--Each 
                Medicare Advantage organization shall--
                          ``(i) only use agents and brokers who have 
                      been licensed under State law to sell Medicare 
                      Advantage plans offered by the Medicare Advantage 
                      organization;
                          ``(ii) in the case where a State has a State 
                      appointment law, abide by such law; and
                          ``(iii) <<NOTE: Reports.>> report to the 
                      applicable State the termination of any such agent 
                      or broker, including the reasons for such 
                      termination (as required under applicable State 
                      law).
                    ``(B) Compliance with state information requests.--
                Each Medicare Advantage organization shall comply in a 
                timely manner with any request by a State for 
                information regarding the performance of a licensed 
                agent, broker, or other third party representing the 
                Medicare Advantage organization as part of an 
                investigation by the State into the conduct of the 
                agent, broker, or other third party.''.
            (2) Prescription drug plans.--Section 1860D-4(l) of the 
        Social Security Act, as amended by subsection (c)(2), is amended 
        by adding at the end the following new paragraph:
            ``(4) The requirements regarding the appointment of agents 
        and brokers and compliance with State information requests under 
        subparagraphs (A) and (B), respectively, of section 
        1851(h)(7).''.
            (3) <<NOTE: 42 USC 1395w-21 note.>>  Effective date.--The 
        amendments made by this subsection shall apply to plan years 
        beginning on or after January 1, 2009.
SEC. 104. <<NOTE: 42 USC 1395ss note.>> IMPROVEMENTS TO THE 
                        MEDIGAP PROGRAM.

    (a) Implementation of NAIC Recommendations.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall provide 
        for implementation of the changes in the NAIC model law and 
        regulations approved by the National Association of Insurance 
        Commissioners in its Model #651 (``Model Regulation

[[Page 122 STAT. 2502]]

        to Implement the NAIC Medicare Supplement Insurance Minimum 
        Standards Model Act'') on March 11, 2007, as modified to reflect 
        the changes made under this Act and the Genetic Information 
        Nondiscrimination Act of 2008 (Public Law 110-233).
            (2) Implementation dates.--
                    (A) In general.--The modifications to Model #651 
                required under paragraph (1) shall be completed by the 
                National Association of Insurance Commissioners not 
                later than October 31, 2008. Except as provided in 
                subparagraph (B), each State shall have 1 year from the 
                date the National Association of Insurance Commissioners 
                adopts the revised NAIC model law and regulations (as 
                changed by Model #651, as so modified) to conform the 
                regulatory program established by the State to such 
                revised NAIC model law and regulations.
                    (B) Extension of effective date for state law 
                amendment.--In the case of a State which the Secretary 
                determines requires State legislation in order to 
                conform the regulatory program established by the State 
                to such revised NAIC model law and regulations, the 
                State shall not be regarded as failing to comply with 
                the requirements of this section solely on the basis of 
                its failure to meet such requirements before the first 
                day of the first calendar quarter beginning after the 
                close of the first regular session of the State 
                legislature that begins after the date of the enactment 
                of this Act. For purposes of the previous sentence, in 
                the case of a State that has a 2-year legislative 
                session, each year of the session is considered to be a 
                separate regular session of the State legislature.
                    (C) Transition dates.--No carrier may issue a new or 
                revised medicare supplemental policy or certificate 
                under section 1882 of the Social Security Act (42 U.S.C. 
                1395ss) that meets the requirements of such revised NAIC 
                model law and regulations for coverage effective prior 
                to June 1, 2010. A carrier may continue to offer or 
                issue a medicare supplemental policy under such section 
                that meets the requirements of the NAIC model law and 
                regulations and State law (as in effect prior to the 
                adoption of such revised NAIC model law and regulations) 
                prior to June 1, 2010. Nothing shall preclude carriers 
                from marketing new or revised medicare supplemental 
                policies or certificates that meet the requirements of 
                such revised NAIC model law and regulations on or after 
                the date on which the State conforms the regulatory 
                program established by the State to such revised NAIC 
                model law and regulations.

    (b) Required Offering of a Range of Policies.--Section 1882(o) of 
the Social Security Act (42 U.S.C. 1395s(o)), <<NOTE: 42 USC 
1395ss.>> as amended by section 104(b)(3) of the Genetic Information 
Nondiscrimination Act of 2008 (Public Law 110-233), is amended by adding 
at the end the following new paragraph:
            ``(5) In addition to the requirement under paragraph (2), 
        the issuer of the policy must make available to the individual 
        at least Medicare supplemental policies with benefit packages 
        classified as `C' or `F'.''.

    (c) <<NOTE: 42 USC 1395ss-1.>> Clarification.--Any health insurance 
policy that provides reimbursement for expenses incurred for items and 
services for

[[Page 122 STAT. 2503]]

 which payment may be made under title XVIII of the Social Security Act 
but which are not reimbursable by reason of the applicability of 
deductibles, coinsurance, copayments or other limitations imposed by a 
Medicare Advantage plan (including a Medicare Advantage private fee-for-
service plan) under part C of such title shall comply with the 
requirements of section 1882(o) of the such Act (42 U.S.C. 1395ss(o)).

                      PART II--LOW-INCOME PROGRAMS

SEC. 111. EXTENSION OF QUALIFYING INDIVIDUAL (QI) PROGRAM.

    (a) Extension.--Section 1902(a)(10)(E)(iv) of the Social Security 
Act (42 U.S.C. 1396a(a)(10)(E)(iv)) is amended by striking ``June 2008'' 
and inserting ``December 2009''.
    (b) Extending Total Amount Available for Allocation.--Section 
1933(g) of such Act (42 U.S.C. 1396u-3(g)) is amended--
            (1) in paragraph (2)--
                    (A) by striking ``and'' at the end of subparagraph 
                (H);
                    (B) in subparagraph (I)--
                          (i) by striking ``June 30'' and inserting 
                      ``September 30'';
                          (ii) by striking ``$200,000,000'' and 
                      inserting ``$300,000,000''; and
                          (iii) by striking the period at the end and 
                      inserting a semicolon; and
                    (C) by adding at the end the following new 
                subparagraphs:
                    ``(J) for the period that begins on October 1, 2008, 
                and ends on December 31, 2008, the total allocation 
                amount is $100,000,000;
                    ``(K) for the period that begins on January 1, 2009, 
                and ends on September 30, 2009, the total allocation 
                amount is $350,000,000; and
                    ``(L) for the period that begins on October 1, 2009, 
                and ends on December 31, 2009, the total allocation 
                amount is $150,000,000.''; and
            (2) in paragraph (3), in the matter preceding subparagraph 
        (A), by striking ``or (H)'' and inserting ``(H), (J), or (L)''.
SEC. 112. APPLICATION OF FULL LIS SUBSIDY ASSETS TEST UNDER 
                        MEDICARE SAVINGS PROGRAM.

    Section 1905(p)(1)(C) of such Act (42 U.S.C. 1396d(p)(1)(C)) is 
amended by inserting before the period at the end the following: ``or, 
effective beginning with January 1, 2010, whose resources (as so 
determined) do not exceed the maximum resource level applied for the 
year under subparagraph (D) of section 1860D-14(a)(3) (determined 
without regard to the life insurance policy exclusion provided under 
subparagraph (G) of such section) applicable to an individual or to the 
individual and the individual's spouse (as the case may be)''.
SEC. 113. ELIMINATING BARRIERS TO ENROLLMENT.

    (a) SSA Assistance With Medicare Savings Program and Low-Income 
Subsidy Program Applications.--Section 1144 of such Act (42 U.S.C. 
1320b-14) is amended by adding at the end the following new subsection:
    ``(c) Assistance With Medicare Savings Program and Low-Income 
Subsidy Program Applications.--

[[Page 122 STAT. 2504]]

            ``(1) Distribution of applications and information to 
        individuals who are potentially eligible for low-income subsidy 
        program.--For each individual who submits an application for 
        low-income subsidies under section 1860D-14, requests an 
        application for such subsidies, or is otherwise identified as an 
        individual who is potentially eligible for such subsidies, the 
        Commissioner shall do the following:
                    ``(A) Provide information describing the low-income 
                subsidy program under section 1860D-14 and the Medicare 
                Savings Program (as defined in paragraph (7)).
                    ``(B) Provide an application for enrollment under 
                such low-income subsidy program (if not already received 
                by the Commissioner).
                    ``(C) In accordance with paragraph (3), transmit 
                data from such an application for purposes of initiating 
                an application for benefits under the Medicare Savings 
                Program.
                    ``(D) Provide information on how the individual may 
                obtain assistance in completing such application and an 
                application under the Medicare Savings Program, 
                including information on how the individual may contact 
                the State health insurance assistance program (SHIP).
                    ``(E) Make the application described in subparagraph 
                (B) and the information described in subparagraphs (A) 
                and (D) available at local offices of the Social 
                Security Administration.
            ``(2) Training personnel in explaining benefit programs and 
        assisting in completing lis application.--The Commissioner shall 
        provide training to those employees of the Social Security 
        Administration who are involved in receiving applications for 
        benefits described in paragraph (1)(B) in order that they may 
        promote beneficiary understanding of the low-income subsidy 
        program and the Medicare Savings Program in order to increase 
        participation in these programs. Such employees shall provide 
        assistance in completing an application described in paragraph 
        (1)(B) upon request.
            ``(3) Transmittal of data to states.-- <<NOTE: Effective 
        date.>> Beginning on January 1, 2010, with the consent of an 
        individual completing an application for benefits described in 
        paragraph (1)(B), the Commissioner shall electronically transmit 
        to the appropriate State Medicaid agency data from such 
        application, as determined by the Commissioner, which 
        transmittal shall initiate an application of the individual for 
        benefits under the Medicare Savings Program with the State 
        Medicaid agency. In order to ensure that such data transmittal 
        provides effective assistance for purposes of State adjudication 
        of applications for benefits under the Medicare Savings Program, 
        the Commissioner shall consult with the Secretary, after the 
        Secretary has consulted with the States, regarding the content, 
        form, frequency, and manner in which data (on a uniform basis 
        for all States) shall be transmitted under this subparagraph.
            ``(4) Coordination with outreach.--The Commissioner shall 
        coordinate outreach activities under this subsection in 
        connection with the low-income subsidy program and the Medicare 
        Savings Program.
            ``(5) <<NOTE: Appropriation authorization.>> Reimbursement 
        of social security administration administrative costs.--

[[Page 122 STAT. 2505]]

                    ``(A) Initial medicare savings program costs; 
                additional low-income subsidy costs.--
                          ``(i) Initial medicare savings program 
                      costs.--There are hereby appropriated to the 
                      Commissioner to carry out this subsection, out of 
                      any funds in the Treasury not otherwise 
                      appropriated, $24,100,000. The amount appropriated 
                      under ths clause shall be available on October 1, 
                      2008, and shall remain available until expended.
                          ``(ii) Additional amount for low-income 
                      subsidy activities.--There are hereby appropriated 
                      to the Commissioner, out of any funds in the 
                      Treasury not otherwise appropriated, $24,800,000 
                      for fiscal year 2009 to carry out low-income 
                      subsidy activities under section 1860D-14 and the 
                      Medicare Savings Program (in accordance with this 
                      subsection), to remain available until expended. 
                      Such funds shall be in addition to the Social 
                      Security Administration's Limitation on 
                      Administrative Expenditure appropriations for such 
                      fiscal year.
                    ``(B) Subsequent funding under agreements.--
                          ``(i) In general.-- <<NOTE: Effective 
                      date.>> Effective for fiscal years beginning on or 
                      after October 1, 2010, the Commissioner and the 
                      Secretary shall enter into an agreement which 
                      shall provide funding (subject to the amount 
                      appropriated under clause (ii)) to cover the 
                      administrative costs of the Commissioner's 
                      activities under this subsection. Such agreement 
                      shall--
                                    ``(I) provide funds to the 
                                Commissioner for the full cost of the 
                                Social Security Administration's work 
                                related to the Medicare Savings Program 
                                required under this section;
                                    ``(II) provide such funding 
                                quarterly in advance of the applicable 
                                quarter based on estimating methodology 
                                agreed to by the Commissioner and the 
                                Secretary; and
                                    ``(III) require an annual accounting 
                                and reconciliation of the actual costs 
                                incurred and funds provided under this 
                                subsection.
                          ``(ii) Appropriation.--There are hereby 
                      appropriated to the Secretary solely for the 
                      purpose of providing payments to the Commissioner 
                      pursuant to an agreement specified in clause (i) 
                      that is in effect, out of any funds in the 
                      Treasury not otherwise appropriated, not more than 
                      $3,000,000 for fiscal year 2011 and each fiscal 
                      year thereafter.
                    ``(C) Limitation.--In no case shall funds from the 
                Social Security Administration's Limitation on 
                Administrative Expenses be used to carry out activities 
                related to the Medicare Savings 
                Program. <<NOTE: Effective date.>> For fiscal years 
                beginning on or after October 1, 2010, no such 
                activities shall be undertaken by the Social Security 
                Administration unless the agreement specified in 
                subparagraph (B) is in effect and full funding has been 
                provided to the Commissioner as specified in such 
                subparagraph.
            ``(6) GAO analysis and report.--

[[Page 122 STAT. 2506]]

                    ``(A) Analysis.--The Comptroller General of the 
                United States shall prepare an analysis of the impact of 
                this subsection--
                          ``(i) in increasing participation in the 
                      Medicare Savings Program, and
                          ``(ii) on States and the Social Security 
                      Administration.
                    ``(B) Report.--Not later than January 1, 2012, the 
                Comptroller General shall submit to Congress, the 
                Commissioner, and the Secretary a report on the analysis 
                conducted under subparagraph (A).
            ``(7) Medicare savings program defined.--For purposes of 
        this subsection, the term `Medicare Savings Program' means the 
        program of medical assistance for payment of the cost of 
        medicare cost-sharing under the Medicaid program pursuant to 
        sections 1902(a)(10)(E) and 1933.''.

    (b) Medicaid Agency Consideration of Data Transmittal.--
            (1) In general.--Section 1935(a) of such Act (42 U.S.C. 
        1396u-5(a)) is amended by adding at the end the following new 
        paragraph:
            ``(4) Consideration of data transmitted by the social 
        security administration for purposes of medicare savings 
        program.--The State shall accept data transmitted under section 
        1144(c)(3) and act on such data in the same manner and in 
        accordance with the same deadlines as if the data constituted an 
        initiation of an application for benefits under the Medicare 
        Savings Program (as defined for purposes of such section) that 
        had been submitted directly by the applicant. The date of the 
        individual's application for the low income subsidy program from 
        which the data have been derived shall constitute the date of 
        filing of such application for benefits under the Medicare 
        Savings Program.''.
            (2) Conforming amendments.--Section 1935(a) of such Act (42 
        U.S.C. 1396u-5(a)) is amended in the subsection heading by 
        striking ``and'' and by inserting ``, and Medicare Cost-
        Sharing'' after ``Assistance''.

    (c) <<NOTE: 42 USC 1320b-14 note.>>  Effective Date.--Except as 
otherwise provided, the amendments made by this section shall take 
effect on January 1, 2010.
SEC. 114. ELIMINATION OF MEDICARE PART D LATE ENROLLMENT PENALTIES 
                        PAID BY SUBSIDY ELIGIBLE INDIVIDUALS.

    (a) Waiver of Late Enrollment Penalty.--
            (1) In general.--Section 1860D-13(b) of the Social Security 
        Act (42 U.S.C. 1395w-113(b)) is amended by adding at the end the 
        following new paragraph:
            ``(8) Waiver of penalty for subsidy-eligible individuals.--
        In no case shall a part D eligible individual who is determined 
        to be a subsidy eligible individual (as defined in section 
        1860D-14(a)(3)) be subject to an increase in the monthly 
        beneficiary premium established under subsection (a).''.
            (2) Conforming amendment.--Section 1860D-14(a)(1)(A) of the 
        Social Security Act (42 U.S.C. 1395w-114(a)(1)(A)) is amended by 
        striking ``equal to'' and all that follows through the period 
        and inserting ``equal to 100 percent of the amount described in 
        subsection (b)(1), but not to exceed the premium amount 
        specified in subsection (b)(2)(B).''.

[[Page 122 STAT. 2507]]

    (b) <<NOTE: 42 USC 1395w-113 note.>>  Effective Date.--The 
amendments made by this section shall apply to subsidies for months 
beginning with January 2009.
SEC. 115. ELIMINATING APPLICATION OF ESTATE RECOVERY.

    (a) In General.--Section 1917(b)(1)(B)(ii) of the Social Security 
Act (42 U.S.C. 1396p(b)(1)(B)(ii)) is amended by inserting ``(but not 
including medical assistance for medicare cost-sharing or for benefits 
described in section 1902(a)(10)(E))'' before the period at the end.
    (b) <<NOTE: 42 USC 1396p note.>>  Effective Date.--The amendment 
made by subsection (a) shall take effect as of January 1, 2010.
SEC. 116. EXEMPTIONS FROM INCOME AND RESOURCES FOR DETERMINATION 
                        OF ELIGIBILITY FOR LOW-INCOME SUBSIDY.

    (a) In General.--Section 1860D-14(a)(3) of the Social Security Act 
(42 U.S.C. 1395w-114(a)(3)) is amended--
            (1) in subparagraph (C)(i), by inserting ``and except that 
        support and maintenance furnished in kind shall not be counted 
        as income'' after ``section 1902(r)(2)'';
            (2) in subparagraph (D), in the matter before clause (i), by 
        inserting ``subject to the life insurance policy exclusion 
        provided under subparagraph (G)'' before ``)'';
            (3) in subparagraph (E)(i), in the matter before subclause 
        (I), by inserting ``subject to the life insurance policy 
        exclusion provided under subparagraph (G)'' before ``)''; and
            (4) by adding at the end the following new subparagraph:
                    ``(G) Life insurance policy exclusion.--In 
                determining the resources of an individual (and the 
                eligible spouse of the individual, if any) under section 
                1613 for purposes of subparagraphs (D) and (E) no part 
                of the value of any life insurance policy shall be taken 
                into account.''.

    (b) <<NOTE: 42 USC 1395w-114 note.>>  Effective Date.--The 
amendments made by this section shall take effect with respect to 
applications filed on or after January 1, 2010.
SEC. 117. JUDICIAL REVIEW OF DECISIONS OF THE COMMISSIONER OF 
                        SOCIAL SECURITY UNDER THE MEDICARE PART D 
                        LOW-INCOME SUBSIDY PROGRAM.

    (a) In General.--Section 1860D-14(a)(3)(B)(iv) of the Social 
Security Act (42 U.S.C. 1395w-114(a)(3)(B)(iv)) is amended--
            (1) in subclause (I), by striking ``and'' at the end;
            (2) in subclause (II), by striking the period at the end and 
        inserting ``; and''; and
            (3) by adding at the end the following new subclause:
                                    ``(III) judicial review of the final 
                                decision of the Commissioner made after 
                                a hearing shall be available to the same 
                                extent, and with the same limitations, 
                                as provided in subsections (g) and (h) 
                                of section 205.''.

    (b) <<NOTE: 42 USC 1395w-114 note.>>  Effective Date.--The 
amendments made by subsection (a) shall take effect as if included in 
the enactment of section 101 of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003.
SEC. 118. TRANSLATION OF MODEL FORM.

    (a) In General.--Section 1905(p)(5)(A) of the Social Security Act 
(42 U.S.C. 1396d(p)(5)(A)) is amended by adding at the end

[[Page 122 STAT. 2508]]

the following: ``The Secretary shall provide for the translation of such 
application form into at least the 10 languages (other than English) 
that are most often used by individuals applying for hospital insurance 
benefits under section 226 or 226A and shall make the translated forms 
available to the States and to the Commissioner of Social Security.''.
    (b) <<NOTE: 42 USC 1396d note.>>  Effective Date.--The amendment 
made by subsection (a) shall take effect on January 1, 2010.
SEC. 119. <<NOTE: 42 USC 1395b-3 note.>> MEDICARE ENROLLMENT 
                        ASSISTANCE.

    (a) Additional Funding for State Health Insurance Assistance 
Programs.--
            (1) Grants.--
                    (A) In general.--The Secretary of Health and Human 
                Services (in this section referred to as the 
                ``Secretary'') shall use amounts made available under 
                subparagraph (B) to make grants to States for State 
                health insurance assistance programs receiving 
                assistance under section 4360 of the Omnibus Budget 
                Reconciliation Act of 1990.
                    (B) Funding.--For purposes of making grants under 
                this subsection, the Secretary shall provide for the 
                transfer, from the Federal Hospital Insurance Trust Fund 
                under section 1817 of the Social Security Act (42 U.S.C. 
                1395i) and the Federal Supplementary Medical Insurance 
                Trust Fund under section 1841 of such Act (42 U.S.C. 
                1395t), in the same proportion as the Secretary 
                determines under section 1853(f) of such Act (42 U.S.C. 
                1395w-23(f)), of $7,500,000 to the Centers for Medicare 
                & Medicaid Services Program Management Account for 
                fiscal year 2009, to remain available until expended.
            (2) Amount of grants.--The amount of a grant to a State 
        under this subsection from the total amount made available under 
        paragraph (1) shall be equal to the sum of the amount allocated 
        to the State under paragraph (3)(A) and the amount allocated to 
        the State under subparagraph (3)(B).
            (3) Allocation to states.--
                    (A) Allocation based on percentage of low-income 
                beneficiaries.--The amount allocated to a State under 
                this subparagraph from \2/3\ of the total amount made 
                available under paragraph (1) shall be based on the 
                number of individuals who meet the requirement under 
                subsection (a)(3)(A)(ii) of section 1860D-14 of the 
                Social Security Act (42 U.S.C. 1395w-114) but who have 
                not enrolled to receive a subsidy under such section 
                1860D-14 relative to the total number of individuals who 
                meet the requirement under such subsection (a)(3)(A)(ii) 
                in each State, as estimated by the Secretary.
                    (B) Allocation based on percentage of rural 
                beneficiaries.--The amount allocated to a State under 
                this subparagraph from \1/3\ of the total amount made 
                available under paragraph (1) shall be based on the 
                number of part D eligible individuals (as defined in 
                section 1860D-1(a)(3)(A) of such Act (42 U.S.C. 1395w-
                101(a)(3)(A))) residing in a rural area relative to the 
                total number of such individuals in each State, as 
                estimated by the Secretary.

[[Page 122 STAT. 2509]]

            (4) Portion of grant based on percentage of low-income 
        beneficiaries to be used to provide outreach to individuals who 
        may be subsidy eligible individuals or eligible for the medicare 
        savings program.--Each grant awarded under this subsection with 
        respect to amounts allocated under paragraph (3)(A) shall be 
        used to provide outreach to individuals who may be subsidy 
        eligible individuals (as defined in section 1860D-14(a)(3)(A) of 
        the Social Security Act (42 U.S.C. 1395w-114(a)(3)(A)) or 
        eligible for the Medicare Savings Program (as defined in 
        subsection (f)).

    (b) Additional Funding for Area Agencies on Aging.--
            (1) Grants.--
                    (A) In general.--The Secretary, acting through the 
                Assistant Secretary for Aging, shall make grants to 
                States for area agencies on aging (as defined in section 
                102 of the Older Americans Act of 1965 (42 U.S.C. 3002)) 
                and Native American programs carried out under the Older 
                Americans Act of 1965 (42 U.S.C. 3001 et seq.).
                    (B) Funding.--For purposes of making grants under 
                this subsection, the Secretary shall provide for the 
                transfer, from the Federal Hospital Insurance Trust Fund 
                under section 1817 of the Social Security Act (42 U.S.C. 
                1395i) and the Federal Supplementary Medical Insurance 
                Trust Fund under section 1841 of such Act (42 U.S.C. 
                1395t), in the same proportion as the Secretary 
                determines under section 1853(f) of such Act (42 U.S.C. 
                1395w-23(f)), of $7,500,000 to the Administration on 
                Aging for fiscal year 2009, to remain available until 
                expended.
            (2) Amount of grant and allocation to states based on 
        percentage of low-income and rural beneficiaries.--The amount of 
        a grant to a State under this subsection from the total amount 
        made available under paragraph (1) shall be determined in the 
        same manner as the amount of a grant to a State under subsection 
        (a), from the total amount made available under paragraph (1) of 
        such subsection, is determined under paragraph (2) and 
        subparagraphs (A) and (B) of paragraph (3) of such subsection.
            (3) Required use of funds.--
                    (A) All funds.--Subject to subparagraph (B), each 
                grant awarded under this subsection shall be used to 
                provide outreach to eligible Medicare beneficiaries 
                regarding the benefits available under title XVIII of 
                the Social Security Act.
                    (B) Outreach to individuals who may be subsidy 
                eligible individuals or eligible for the medicare 
                savings program.--Subsection (a)(4) shall apply to each 
                grant awarded under this subsection in the same manner 
                as it applies to a grant under subsection (a).

    (c) Additional Funding for Aging and Disability Resource Centers.--
            (1) Grants.--
                    (A) In general.--The Secretary shall make grants to 
                Aging and Disability Resource Centers under the Aging 
                and Disability Resource Center grant program that are 
                established centers under such program on the date of 
                the enactment of this Act.

[[Page 122 STAT. 2510]]

                    (B) Funding.--For purposes of making grants under 
                this subsection, the Secretary shall provide for the 
                transfer, from the Federal Hospital Insurance Trust Fund 
                under section 1817 of the Social Security Act (42 U.S.C. 
                1395i) and the Federal Supplementary Medical Insurance 
                Trust Fund under section 1841 of such Act (42 U.S.C. 
                1395t), in the same proportion as the Secretary 
                determines under section 1853(f) of such Act (42 U.S.C. 
                1395w-23(f)), of $5,000,000 to the Administration on 
                Aging for fiscal year 2009, to remain available until 
                expended.
            (2) Required use of funds.--Each grant awarded under this 
        subsection shall be used to provide outreach to individuals 
        regarding the benefits available under the Medicare prescription 
        drug benefit under part D of title XVIII of the Social Security 
        Act and under the Medicare Savings Program.

    (d) Coordination of Efforts To Inform Older Americans About Benefits 
Available Under Federal and State Programs.--
            (1) In general.-- <<NOTE: Grants.>> The Secretary, acting 
        through the Assistant Secretary for Aging, in cooperation with 
        related Federal agency partners, shall make a grant to, or enter 
        into a contract with, a qualified, experienced entity under 
        which the entity shall--
                    (A) <<NOTE: Internet.>> maintain and update web-
                based decision support tools, and integrated, person-
                centered systems, designed to inform older individuals 
                (as defined in section 102 of the Older Americans Act of 
                1965 (42 U.S.C. 3002)) about the full range of benefits 
                for which the individuals may be eligible under Federal 
                and State programs;
                    (B) utilize cost-effective strategies to find older 
                individuals with the greatest economic need (as defined 
                in such section 102) and inform the individuals of the 
                programs;
                    (C) develop and maintain an information 
                clearinghouse on best practices and the most cost-
                effective methods for finding older individuals with 
                greatest economic need and informing the individuals of 
                the programs; and
                    (D) provide, in collaboration with related Federal 
                agency partners administering the Federal programs, 
                training and technical assistance on the most effective 
                outreach, screening, and follow-up strategies for the 
                Federal and State programs.
            (2) Funding.--For purposes of making a grant or entering 
        into a contract under paragraph (1), the Secretary shall provide 
        for the transfer, from the Federal Hospital Insurance Trust Fund 
        under section 1817 of the Social Security Act (42 U.S.C. 1395i) 
        and the Federal Supplementary Medical Insurance Trust Fund under 
        section 1841 of such Act (42 U.S.C. 1395t), in the same 
        proportion as the Secretary determines under section 1853(f) of 
        such Act (42 U.S.C. 1395w-23(f)), of $5,000,000 to the 
        Administration on Aging for fiscal year 2009, to remain 
        available until expended.

    (e) Reprogramming Funds From Medicare, Medicaid, and SCHIP Extension 
Act of 2007.--The Secretary shall only use the $5,000,000 in funds 
allocated to make grants to States for Area Agencies on Aging and Aging 
Disability and Resource Centers for the period of fiscal years 2008 
through 2009 under section 118 of the Medicare, Medicaid, and SCHIP 
Extension Act of 2007

[[Page 122 STAT. 2511]]

(Public Law 110-173) for the sole purpose of providing outreach to 
individuals regarding the benefits available under the Medicare 
prescription drug benefit under part D of title XVIII of the Social 
Security Act. <<NOTE: Publication.>> The Secretary shall republish the 
request for proposals issued on April 17, 2008, in order to comply with 
the preceding sentence.

    (f) Medicare Savings Program Defined.--For purposes of this section, 
the term ``Medicare Savings Program'' means the program of medical 
assistance for payment of the cost of medicare cost-sharing under the 
Medicaid program pursuant to sections 1902(a)(10)(E) and 1933 of the 
Social Security Act (42 U.S.C. 1396a(a)(10)(E), 1396u-3).

                Subtitle B--Provisions Relating to Part A

SEC. 121. EXPANSION AND EXTENSION OF THE MEDICARE RURAL HOSPITAL 
                        FLEXIBILITY PROGRAM.

    (a) In General.--Section 1820(g) of the Social Security Act (42 
U.S.C. 1395i-4(g)) is amended by adding at the end the following new 
paragraph:
            ``(6) Providing mental health services and other health 
        services to veterans and other residents of rural areas.--
                    ``(A) Grants to states.--The Secretary may award 
                grants to States that have submitted applications in 
                accordance with subparagraph (B) for increasing the 
                delivery of mental health services or other health care 
                services deemed necessary to meet the needs of veterans 
                of Operation Iraqi Freedom and Operation Enduring 
                Freedom living in rural areas (as defined for purposes 
                of section 1886(d) and including areas that are rural 
                census tracks, as defined by the Administrator of the 
                Health Resources and Services Administration), including 
                for the provision of crisis intervention services and 
                the detection of post-traumatic stress disorder, 
                traumatic brain injury, and other signature injuries of 
                veterans of Operation Iraqi Freedom and Operation 
                Enduring Freedom, and for referral of such veterans to 
                medical facilities operated by the Department of 
                Veterans Affairs, and for the delivery of such services 
                to other residents of such rural areas.
                    ``(B) Application.--
                          ``(i) In general.--An application is in 
                      accordance with this subparagraph if the State 
                      submits to the Secretary at such time and in such 
                      form as the Secretary may require an application 
                      containing the assurances described in 
                      subparagraphs (A)(ii) and (A)(iii) of subsection 
                      (b)(1).
                          ``(ii) Consideration of regional approaches, 
                      networks, or technology.--The Secretary may, as 
                      appropriate in awarding grants to States under 
                      subparagraph (A), consider whether the application 
                      submitted by a State under this subparagraph 
                      includes 1 or more proposals that utilize regional 
                      approaches, networks, health information 
                      technology, telehealth, or telemedicine to deliver 
                      services described in subparagraph (A) to 
                      individuals described in that

[[Page 122 STAT. 2512]]

                      subparagraph. For purposes of this clause, a 
                      network may, as the Secretary determines 
                      appropriate, include Federally qualified health 
                      centers (as defined in section 1861(aa)(4)), rural 
                      health clinics (as defined in section 
                      1861(aa)(2)), home health agencies (as defined in 
                      section 1861(o)), community mental health centers 
                      (as defined in section 1861(ff)(3)(B)) and other 
                      providers of mental health services, pharmacists, 
                      local government, and other providers deemed 
                      necessary to meet the needs of veterans.
                          ``(iii) Coordination at local level.--The 
                      Secretary shall require, as appropriate, a State 
                      to demonstrate consultation with the hospital 
                      association of such State, rural hospitals located 
                      in such State, providers of mental health 
                      services, or other appropriate stakeholders for 
                      the provision of services under a grant awarded 
                      under this paragraph.
                          ``(iv) Special consideration of certain 
                      applications.--In awarding grants to States under 
                      subparagraph (A), the Secretary shall give special 
                      consideration to applications submitted by States 
                      in which veterans make up a high percentage (as 
                      determined by the Secretary) of the total 
                      population of the State. Such consideration shall 
                      be given without regard to the number of veterans 
                      of Operation Iraqi Freedom and Operation Enduring 
                      Freedom living in the areas in which mental health 
                      services and other health care services would be 
                      delivered under the application.
                    ``(C) Coordination with va.--The Secretary shall, as 
                appropriate, consult with the Director of the Office of 
                Rural Health of the Department of Veterans Affairs in 
                awarding and administering grants to States under 
                subparagraph (A).
                    ``(D) Use of funds.--A State awarded a grant under 
                this paragraph may, as appropriate, use the funds to 
                reimburse providers of services described in 
                subparagraph (A) to individuals described in that 
                subparagraph.
                    ``(E) Limitation on use of grant funds for 
                administrative expenses.--A State awarded a grant under 
                this paragraph may not expend more than 15 percent of 
                the amount of the grant for administrative expenses.
                    ``(F) Independent evaluation and final report.--The 
                Secretary shall provide for an independent evaluation of 
                the grants awarded under subparagraph (A). Not later 
                than 1 year after the date on which the last grant is 
                awarded to a State under such subparagraph, the 
                Secretary shall submit a report to Congress on such 
                evaluation. Such report shall include an assessment of 
                the impact of such grants on increasing the delivery of 
                mental health services and other health services to 
                veterans of the United States Armed Forces living in 
                rural areas (as so defined and including such areas that 
                are rural census tracks), with particular emphasis on 
                the impact of such grants on the delivery of such 
                services to veterans of Operation Enduring Freedom and 
                Operation Iraqi Freedom, and to other individuals living 
                in such rural areas.''.

[[Page 122 STAT. 2513]]

    (b) Use of Funds for Federal Administrative Expenses.--Section 
1820(g)(5) of the Social Security Act (42 U.S.C. 1395i-4(g)(5)) is 
amended--
            (1) by striking ``beginning with fiscal year 2005'' and 
        inserting ``for each of fiscal years 2005 through 2008''; and
            (2) by inserting ``and, of the total amount appropriated for 
        grants under paragraphs (1), (2), and (6) for a fiscal year 
        (beginning with fiscal year 2009)'' after ``2005)''.

    (c) Extension of Authorization for FLEX Grants.--Section 1820(j) of 
the Social Security Act (42 U.S.C. 1395i-4(j)) is amended--
            (1) by striking ``and for'' and inserting ``for''; and
            (2) by inserting ``, for making grants to all States under 
        paragraphs (1) and (2) of subsection (g), $55,000,000 in each of 
        fiscal years 2009 and 2010, and for making grants to all States 
        under paragraph (6) of subsection (g), $50,000,000 in each of 
        fiscal years 2009 and 2010, to remain available until expended'' 
        before the period at the end.

    (d) Medicare Rural Hospital Flexibility Program.--Section 1820(g)(1) 
of the Social Security Act (42 U.S.C. 1395i-4(g)(1)) is amended--
            (1) in subparagraph (B), by striking ``and'' at the end;
            (2) in subparagraph (C), by striking the period at the end 
        and inserting ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(D) providing support for critical access 
                hospitals for quality improvement, quality reporting, 
                performance improvements, and benchmarking.''.

    (e) Assistance to Small Critical Access Hospitals Transitioning to 
Skilled Nursing Facilities and Assisted Living Facilities.--Section 
1820(g) of the Social Security Act (42 U.S.C. 1395i-4(g)), as amended by 
subsection (a), is amended by adding at the end the following new 
paragraph:
            ``(7) Critical access hospitals transitioning to skilled 
        nursing facilities and assisted living facilities.--
                    ``(A) Grants.--The Secretary may award grants to 
                eligible critical access hospitals that have submitted 
                applications in accordance with subparagraph (B) for 
                assisting such hospitals in the transition to skilled 
                nursing facilities and assisted living facilities.
                    ``(B) Application.--An applicable critical access 
                hospital seeking a grant under this paragraph shall 
                submit an application to the Secretary on or before such 
                date and in such form and manner as the Secretary 
                specifies.
                    ``(C) Additional requirements.--The Secretary may 
                not award a grant under this paragraph to an eligible 
                critical access hospital unless--
                          ``(i) local organizations or the State in 
                      which the hospital is located provides matching 
                      funds; and
                          ``(ii) the hospital provides assurances that 
                      it will surrender critical access hospital status 
                      under this title within 180 days of receiving the 
                      grant.
                    ``(D) Amount of grant.--A grant to an eligible 
                critical access hospital under this paragraph may not 
                exceed $1,000,000.
                    ``(E) <<NOTE: Appropriation authorization.>>  
                Funding.--There are appropriated from the Federal 
                Hospital Insurance Trust Fund under section 1817

[[Page 122 STAT. 2514]]

                for making grants under this paragraph, $5,000,000 for 
                fiscal year 2008.
                    ``(F) Eligible critical access hospital defined.--
                For purposes of this paragraph, the term `eligible 
                critical access hospital' means a critical access 
                hospital that has an average daily acute census of less 
                than 0.5 and an average daily swing bed census of 
                greater than 10.0.''.
SEC. 122. REBASING FOR SOLE COMMUNITY HOSPITALS.

    (a) Rebasing Permitted.--Section 1886(b)(3) of the Social Security 
Act (42 U.S.C. 1395ww(b)(3)) is amended by adding at the end the 
following new subparagraph:
    ``(L)(i) For cost reporting periods beginning on or after January 1, 
2009, in the case of a sole community hospital there shall be 
substituted for the amount otherwise determined under subsection 
(d)(5)(D)(i) of this section, if such substitution results in a greater 
amount of payment under this section for the hospital, the subparagraph 
(L) rebased target amount.
    ``(ii) <<NOTE: Applicability.>> For purposes of this subparagraph, 
the term `subparagraph (L) rebased target amount' has the meaning given 
the term `target amount' in subparagraph (C), except that--
            ``(I) there shall be substituted for the base cost reporting 
        period the 12-month cost reporting period beginning during 
        fiscal year 2006;
            ``(II) any reference in subparagraph (C)(i) to the `first 
        cost reporting period' described in such subparagraph is deemed 
        a reference to the first cost reporting period beginning on or 
        after January 1, 2009; and
            ``(III) the applicable percentage increase shall only be 
        applied under subparagraph (C)(iv) for discharges occurring on 
        or after January 1, 2009.''.

    (b) Conforming Amendments.--Section 1886(b)(3) of the Social 
Security Act (42 U.S.C. 1395ww(b)(3)) is amended--
            (1) in subparagraph (C), in the matter preceding clause (i), 
        by striking ``subparagraph (I)'' and inserting ``subparagraphs 
        (I) and (L)''; and
            (2) in subparagraph (I)(i), in the matter preceding 
        subclause (I), by striking ``For'' and inserting ``Subject to 
        subparagraph (L), for''.
SEC. 123. <<NOTE: 42 USC 1395i-4 note.>> DEMONSTRATION PROJECT ON 
                        COMMUNITY HEALTH INTEGRATION MODELS IN 
                        CERTAIN RURAL COUNTIES.

    (a) In General.--The Secretary shall establish a demonstration 
project to allow eligible entities to develop and test new models for 
the delivery of health care services in eligible counties for the 
purpose of improving access to, and better integrating the delivery of, 
acute care, extended care, and other essential health care services to 
Medicare beneficiaries.
    (b) Purpose.--The purpose of the demonstration project under this 
section is to--
            (1) explore ways to increase access to, and improve the 
        adequacy of, payments for acute care, extended care, and other 
        essential health care services provided under the Medicare and 
        Medicaid programs in eligible counties; and
            (2) evaluate regulatory challenges facing such providers and 
        the communities they serve.

    (c) Requirements.--The following requirements shall apply under the 
demonstration project:

[[Page 122 STAT. 2515]]

            (1) Health care providers in eligible counties selected to 
        participate in the demonstration project under subsection (d)(3) 
        shall (when determined appropriate by the Secretary), instead of 
        the payment rates otherwise applicable under the Medicare 
        program, be reimbursed at a rate that covers at least the 
        reasonable costs of the provider in furnishing acute care, 
        extended care, and other essential health care services to 
        Medicare beneficiaries.
            (2) Methods to coordinate the survey and certification 
        process under the Medicare program and the Medicaid program 
        across all health service categories included in the 
        demonstration project shall be tested with the goal of assuring 
        quality and safety while reducing administrative burdens, as 
        appropriate, related to completing such survey and certification 
        process.
            (3) Health care providers in eligible counties selected to 
        participate in the demonstration project under subsection (d)(3) 
        and the Secretary shall work with the State to explore ways to 
        revise reimbursement policies under the Medicaid program to 
        improve access to the range of health care services available in 
        such eligible counties.
            (4) The Secretary shall identify regulatory requirements 
        that may be revised appropriately to improve access to care in 
        eligible counties.
            (5) Other essential health care services necessary to ensure 
        access to the range of health care services in eligible counties 
        selected to participate in the demonstration project under 
        subsection (d)(3) shall be identified. Ways to ensure adequate 
        funding for such services shall also be explored.

    (d) Application Process.--
            (1) Eligibility.--
                    (A) In general.--Eligibility to participate in the 
                demonstration project under this section shall be 
                limited to eligible entities.
                    (B) Eligible entity defined.--In this section, the 
                term ``eligible entity'' means an entity that--
                          (i) is a Rural Hospital Flexibility Program 
                      grantee under section 1820(g) of the Social 
                      Security Act (42 U.S.C. 1395i-4(g)); and
                          (ii) is located in a State in which at least 
                      65 percent of the counties in the State are 
                      counties that have 6 or less residents per square 
                      mile.
            (2) Application.--
                    (A) In general.--An eligible entity seeking to 
                participate in the demonstration project under this 
                section shall submit an application to the Secretary at 
                such time, in such manner, and containing such 
                information as the Secretary may require.
                    (B) Limitation.--The Secretary shall select eligible 
                entities located in not more than 4 States to 
                participate in the demonstration project under this 
                section.
            (3) Selection of eligible counties.--An eligible entity 
        selected by the Secretary to participate in the demonstration 
        project under this section shall select not more than 6 eligible 
        counties in the State in which the entity is located in which to 
        conduct the demonstration project.

[[Page 122 STAT. 2516]]

            (4) Eligible county defined.--In this section, the term 
        ``eligible county'' means a county that meets the following 
        requirements:
                    (A) The county has 6 or less residents per square 
                mile.
                    (B) As of the date of the enactment of this Act, a 
                facility designated as a critical access hospital which 
                meets the following requirements was located in the 
                county:
                          (i) As of the date of the enactment of this 
                      Act, the critical access hospital furnished 1 or 
                      more of the following:
                                    (I) Home health services.
                                    (II) Hospice care.
                                    (III) Rural health clinic services.
                          (ii) As of the date of the enactment of this 
                      Act, the critical access hospital has an average 
                      daily inpatient census of 5 or less.
                    (C) As of the date of the enactment of this Act, 
                skilled nursing facility services were available in the 
                county in--
                          (i) a critical access hospital using swing 
                      beds; or
                          (ii) a local nursing home.

    (e) Administration.--
            (1) In general.--The demonstration project under this 
        section shall be administered jointly by the Administrator of 
        the Office of Rural Health Policy of the Health Resources and 
        Services Administration and the Administrator of the Centers for 
        Medicare & Medicaid Services, in accordance with paragraphs (2) 
        and (3).
            (2) HRSA duties.--In administering the demonstration project 
        under this section, the Administrator of the Office of Rural 
        Health Policy of the Health Resources and Services 
        Administration shall--
                    (A) <<NOTE: Grants.>> award grants to the eligible 
                entities selected to participate in the demonstration 
                project; and
                    (B) work with such entities to provide technical 
                assistance related to the requirements under the 
                project.
            (3) CMS duties.--In administering the demonstration project 
        under this section, the Administrator of the Centers for 
        Medicare & Medicaid Services shall determine which provisions of 
        titles XVIII and XIX of the Social Security Act (42 U.S.C. 1395 
        et seq.; 1396 et seq.) the Secretary should waive under the 
        waiver authority under subsection (i) that are relevant to the 
        development of alternative reimbursement methodologies, which 
        may include, as appropriate, covering at least the reasonable 
        costs of the provider in furnishing acute care, extended care, 
        and other essential health care services to Medicare 
        beneficiaries and coordinating the survey and certification 
        process under the Medicare and Medicaid programs, as 
        appropriate, across all service categories included in the 
        demonstration project.

    (f) Duration.--
            (1) In general.--The demonstration project under this 
        section shall be conducted for a 3-year period beginning on 
        October 1, 2009.
            (2) Beginning date of demonstration project.--The 
        demonstration project under this section shall be considered to 
        have begun in a State on the date on which the eligible

[[Page 122 STAT. 2517]]

        counties selected to participate in the demonstration project 
        under subsection (d)(3) begin operations in accordance with the 
        requirements under the demonstration project.

    (g) Funding.--
            (1) CMS.--
                    (A) In general.--The Secretary shall provide for the 
                transfer, in appropriate part from the Federal Hospital 
                Insurance Trust Fund established under section 1817 of 
                the Social Security Act (42 U.S.C. 1395i) and the 
                Federal Supplementary Medical Insurance Trust Fund 
                established under section 1841 of such Act (42 U.S.C. 
                1395t), of such sums as are necessary for the costs to 
                the Centers for Medicare & Medicaid Services of carrying 
                out its duties under the demonstration project under 
                this section.
                    (B) Budget neutrality.--In conducting the 
                demonstration project under this section, the Secretary 
                shall ensure that the aggregate payments made by the 
                Secretary do not exceed the amount which the Secretary 
                estimates would have been paid if the demonstration 
                project under this section was not implemented.
            (2) <<NOTE: Appropriation authorization.>>  HRSA.--There are 
        authorized to be appropriated to the Office of Rural Health 
        Policy of the Health Resources and Services Administration 
        $800,000 for each of fiscal years 2010, 2011, and 2012 for the 
        purpose of carrying out the duties of such Office under the 
        demonstration project under this section, to remain available 
        for the duration of the demonstration project.

    (h) Report.--
            (1) Interim report.--Not later than the date that is 2 years 
        after the date on which the demonstration project under this 
        section is implemented, the Administrator of the Office of Rural 
        Health Policy of the Health Resources and Services 
        Administration, in coordination with the Administrator of the 
        Centers for Medicare & Medicaid Services, shall submit a report 
        to Congress on the status of the demonstration project that 
        includes initial recommendations on ways to improve access to, 
        and the availability of, health care services in eligible 
        counties based on the findings of the demonstration project.
            (2) Final report.--Not later than 1 year after the 
        completion of the demonstration project, the Administrator of 
        the Office of Rural Health Policy of the Health Resources and 
        Services Administration, in coordination with the Administrator 
        of the Centers for Medicare & Medicaid Services, shall submit a 
        report to Congress on such project, together with 
        recommendations for such legislation and administrative action 
        as the Secretary determines appropriate.

    (i) Waiver Authority.--The Secretary may waive such requirements of 
titles XVIII and XIX of the Social Security Act (42 U.S.C. 1395 et seq.; 
1396 et seq.) as may be necessary and appropriate for the purpose of 
carrying out the demonstration project under this section.
    (j) Definitions.--In this section:
            (1) Extended care services.--The term ``extended care 
        services'' means the following:
                    (A) Home health services.
                    (B) Covered skilled nursing facility services.
                    (C) Hospice care.

[[Page 122 STAT. 2518]]

            (2) Covered skilled nursing facility services.--The term 
        ``covered skilled nursing facility services'' has the meaning 
        given such term in section 1888(e)(2)(A) of the Social Security 
        Act (42 U.S.C. 1395yy(e)(2)(A)).
            (3) Critical access hospital.--The term ``critical access 
        hospital'' means a facility designated as a critical access 
        hospital under section 1820(c) of such Act (42 U.S.C. 1395i-
        4(c)).
            (4) Home health services.--The term ``home health services'' 
        has the meaning given such term in section 1861(m) of such Act 
        (42 U.S.C. 1395x(m)).
            (5) Hospice care.--The term ``hospice care'' has the meaning 
        given such term in section 1861(dd) of such Act (42 U.S.C. 
        1395x(dd)).
            (6) Medicaid program.--The term ``Medicaid program'' means 
        the program under title XIX of such Act (42 U.S.C. 1396 et 
        seq.).
            (7) Medicare program.--The term ``Medicare program'' means 
        the program under title XVIII of such Act (42 U.S.C. 1395 et 
        seq.).
            (8) Other essential health care services.--The term ``other 
        essential health care services'' means the following:
                    (A) Ambulance services (as described in section 
                1861(s)(7) of the Social Security Act (42 U.S.C. 
                1395x(s)(7))).
                    (B) Rural health clinic services.
                    (C) Public health services (as defined by the 
                Secretary).
                    (D) Other health care services determined 
                appropriate by the Secretary.
            (9) Rural health clinic services.--The term ``rural health 
        clinic services'' has the meaning given such term in section 
        1861(aa)(1) of such Act (42 U.S.C. 1395x(aa)(1)).
            (10) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
SEC. 124. EXTENSION OF THE RECLASSIFICATION OF CERTAIN HOSPITALS.

    (a) <<NOTE: 42 USC 1395ww note.>>  In General.--Subsection (a) of 
section 106 of division B of the Tax Relief and Health Care Act of 2006 
(42 U.S.C. 1395 note), as amended by section 117 of the Medicare, 
Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-173), is 
amended by striking ``September 30, 2008'' and inserting ``September 30, 
2009''.

    (b) Special Exception Reclassifications.--Section 117(a)(2) of the 
Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-
173)) <<NOTE: 42 USC 1395ww note.>> is amended by striking ``September 
30, 2008'' and inserting ``the last date of the extension of 
reclassifications under section 106(a) of the Medicare Improvement and 
Extension Act of 2006 (division B of Public Law 109-432)''.

    (c) Disregarding Section 508 Hospital Reclassifications for Purposes 
of Group Reclassifications.--Section 508(g) of the Medicare Prescription 
Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173, 42 
U.S.C. 1395ww note), as added by section 117(b) of the Medicare, 
Medicaid, and SCHIP Extension Act of 2008 (Public Law 110-173)), is 
amended by striking ``during fiscal year 2008'' and inserting 
``beginning on October 1, 2007, and ending on the last date of the 
extension

[[Page 122 STAT. 2519]]

of reclassifications under section 106(a) of the Medicare Improvement 
and Extension Act of 2006 (division B of Public Law 109-432)''.
SEC. 125. REVOCATION OF UNIQUE DEEMING AUTHORITY OF THE JOINT 
                        COMMISSION.

    (a) Revocation.--Section 1865 of the Social Security Act (42 U.S.C. 
1395bb) is amended--
            (1) by striking subsection (a); and
            (2) by redesignating subsections (b), (c), (d), and (e) as 
        subsections (a), (b), (c), and (d), respectively.

    (b) Conforming Amendments.--(1) Section 1865 of the Social Security 
Act (42 U.S.C. 1395bb) is amended--
            (A) in subsection (a)(1), as redesignated by subsection 
        (a)(2), by striking ``In addition, if'' and inserting ``If'';
            (B) in subsection (b), as so redesignated--
                    (i) by striking ``released to him by the Joint 
                Commission on Accreditation of Hospitals,'' and 
                inserting ``released to the Secretary by''; and
                    (ii) by striking the comma after ``Association'';
            (C) in subsection (c), as so redesignated, by striking 
        ``pursuant to subsection (a) or (b)(1)'' and inserting 
        ``pursuant to subsection (a)(1)''; and
            (D) in subsection (d), as so redesignated, by striking 
        ``pursuant to subsection (a) or (b)(1)'' and inserting 
        ``pursuant to subsection (a)(1)''.

    (2) Section 1861(e) of the Social Security Act (42 U.S.C. 1395x(e)) 
is amended in the fourth sentence by striking ``and (ii) is accredited 
by the Joint Commission on Accreditation of Hospitals, or is accredited 
by or approved by a program of the country in which such institution is 
located if the Secretary finds the accreditation or comparable approval 
standards of such program to be essentially equivalent to those of the 
Joint Commission on Accreditation of Hospitals'' and inserting ``and 
(ii) is accredited by a national accreditation body recognized by the 
Secretary under section 1865(a), or is accredited by or approved by a 
program of the country in which such institution is located if the 
Secretary finds the accreditation or comparable approval standards of 
such program to be essentially equivalent to those of such a national 
accreditation body.''.
    (3) Section 1864(c) of the Social Security Act (42 U.S.C. 1395aa(c)) 
is amended by striking ``pursuant to subsection (a) or (b)(1) of section 
1865'' and inserting ``pursuant to section 1865(a)(1)''.
    (4) Section 1875(b) of the Social Security Act (42 U.S.C. 1395ll(b)) 
is amended by striking ``the Joint Commission on Accreditation of 
Hospitals,'' and inserting ``national accreditation bodies under section 
1865(a)''.
    (5) Section 1834(a)(20)(B) of the Social Security Act (42 U.S.C. 
1395m(a)(20)(B)) is amended by striking ``section 1865(b)'' and 
inserting ``section 1865(a)''.
    (6) Section 1852(e)(4)(C) of the Social Security Act (42 U.S.C. 
1395w-22(e)(4)(C)) is amended by striking ``section 1865(b)(2)'' and 
inserting ``section 1865(a)(2)''.
    (c) <<NOTE: 42 USC 1395bb note.>>  Authority To Recognize the Joint 
Commission as a National Accreditation Body.--The Secretary of Health 
and Human Services may recognize the Joint Commission as a national 
accreditation body under section 1865 of the Social Security Act

[[Page 122 STAT. 2520]]

(42 U.S.C. 1395bb), as amended by this section, upon such terms and 
conditions, and upon submission of such information, as the Secretary 
may require.

    (d) <<NOTE: Applicability. 42 USC 1395bb note.>>  Effective Date; 
Transition Rule.--(1) Subject to paragraph (2), the amendments made by 
this section shall apply with respect to accreditations of hospitals 
granted on or after the date that is 24 months after the date of the 
enactment of this Act.

    (2) For purposes of title XVIII of the Social Security Act (42 
U.S.C. 1395 et seq.), the amendments made by this section shall not 
effect the accreditation of a hospital by the Joint Commission, or under 
accreditation or comparable approval standards found to be essentially 
equivalent to accreditation or approval standards of the Joint 
Commission, for the period of time applicable under such accreditation.

                Subtitle C--Provisions Relating to Part B

                      PART I--PHYSICIANS' SERVICES

SEC. 131. PHYSICIAN PAYMENT, EFFICIENCY, AND QUALITY IMPROVEMENTS.

    (a) In General.--
            (1) Increase in update for the second half of 2008 and for 
        2009.--
                    (A) For the second half of 2008.--Section 1848(d)(8) 
                of the Social Security Act (42 U.S.C. 1395w-4(d)(8)), as 
                added by section 101 of the Medicare, Medicaid, and 
                SCHIP Extension Act of 2007 (Public Law 110-173), is 
                amended--
                          (i) in the heading, by striking ``a portion 
                      of'';
                          (ii) in subparagraph (A), by striking ``for 
                      the period beginning on January 1, 2008, and 
                      ending on June 30, 2008,''; and
                          (iii) in subparagraph (B)--
                                    (I) in the heading, by striking 
                                ``the remaining portion of 2008 and''; 
                                and
                                    (II) by striking ``for the period 
                                beginning on July 1, 2008, and ending on 
                                December 31, 2008, and''.
                    (B) For 2009.--Section 1848(d) of the Social 
                Security Act (42 U.S.C. 1395w-4(d)), as amended by 
                section 101 of the Medicare, Medicaid, and SCHIP 
                Extension Act of 2007 (Public Law 110-173), is amended 
                by adding at the end the following new paragraph:
            ``(9) Update for 2009.--
                    ``(A) In general.--Subject to paragraphs (7)(B) and 
                (8)(B), in lieu of the update to the single conversion 
                factor established in paragraph (1)(C) that would 
                otherwise apply for 2009, the update to the single 
                conversion factor shall be 1.1 percent.
                    ``(B) No effect on computation of conversion factor 
                for 2010 and subsequent years.--The conversion factor 
                under this subsection shall be computed under paragraph 
                (1)(A) for 2010 and subsequent years as if subparagraph 
                (A) had never applied.''.
            (3) Revision of the physician assistance and quality 
        initiative fund.--

[[Page 122 STAT. 2521]]

                    (A) In general.--Subject to subparagraph (B), 
                section 1848(l)(2) of the Social Security Act (42 U.S.C. 
                1395w-4(l)(2)), as amended by section 101(a)(2) of the 
                Medicare, Medicaid, and SCHIP Extension Act of 2007 
                (Public Law 110-173), is amended--
                          (i) in subparagraph (A)--
                                    (I) by striking clause (i)(III); and
                                    (II) by striking clause (ii)(III); 
                                and
                          (ii) in subparagraph (B)--
                                    (I) in clause (i), by adding ``and'' 
                                at the end;
                                    (II) in clause (ii), by striking ``; 
                                and'' and inserting a period; and
                                    (III) by striking clause (iii).
                    (B) <<NOTE: Applicability.>>  Contingency.--If there 
                is enacted, before, on, or after the date of the 
                enactment of this Act, a Supplemental Appropriations 
                Act, 2008 that includes a provision amending section 
                1848(l) of the Social Security Act, the alternative 
                amendment described in subparagraph (C)--
                          (i) shall apply instead of the amendments made 
                      by subparagraph (A); and
                          (ii) shall be executed after such provision in 
                      such Supplemental Appropriations Act.
                    (C) Alternative amendment described.--The 
                alternative amendment described in this subparagraph is 
                as follows: Section 1848(l)(2) of the Social Security 
                Act (42 U.S.C. 1395w-4(l)(2)), as amended by section 
                101(a)(2) of the Medicare, Medicaid, and SCHIP Extension 
                Act of 2007 (Public Law 110-173) and by the Supplemental 
                Appropriations Act, 2008, is amended--
                          (i) in subparagraph (A)--
                                    (I) by striking subclauses (III) and 
                                (IV) of clause (i); and
                                    (II) by striking subclauses (III) 
                                and (IV) of clause (ii); and
                          (ii) in subparagraph (B)--
                                    (I) in clause (i), by adding ``and'' 
                                at the end;
                                    (II) in clause (ii), by striking the 
                                semicolon at the end and inserting a 
                                period; and
                                    (III) by striking clauses (iii) and 
                                (iv).

    (b) Extension and Improvement of the Quality Reporting System.--
            (1) System.--Section 1848(k)(2) of the Social Security Act 
        (42 U.S.C. 1395w-4(k)(2)), as amended by section 101(b)(1) of 
        the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public 
        Law 110-173), is amended by adding at the end the following new 
        subparagraphs:
                    ``(C) For 2010 and subsequent years.--
                          ``(i) In general.--Subject to clause (ii), for 
                      purposes of reporting data on quality measures for 
                      covered professional services furnished during 
                      2010 and each subsequent year, subject to 
                      subsection (m)(3)(C), the quality measures 
                      (including electronic prescribing quality 
                      measures) specified under this paragraph shall be 
                      such measures selected by the Secretary from 
                      measures that have been endorsed by the entity 
                      with a contract with the Secretary under section 
                      1890(a).

[[Page 122 STAT. 2522]]

                          ``(ii) Exception.--In the case of a specified 
                      area or medical topic determined appropriate by 
                      the Secretary for which a feasible and practical 
                      measure has not been endorsed by the entity with a 
                      contract under section 1890(a), the Secretary may 
                      specify a measure that is not so endorsed as long 
                      as due consideration is given to measures that 
                      have been endorsed or adopted by a consensus 
                      organization identified by the Secretary, such as 
                      the AQA alliance.
                    ``(D) Opportunity to provide input on measures for 
                2009 and subsequent years.--For each quality measure 
                (including an electronic prescribing quality measure) 
                adopted by the Secretary under subparagraph (B) (with 
                respect to 2009) or subparagraph (C), the Secretary 
                shall ensure that eligible professionals have the 
                opportunity to provide input during the development, 
                endorsement, or selection of measures applicable to 
                services they furnish.''.
            (2) Redesignation of reporting system.--Subsection (c) of 
        section 101 of division B of the Tax Relief and Health Care Act 
        of 2006 (42 U.S.C. 1395w-4 note), as amended by section 
        101(b)(2) of the Medicare, Medicaid, and SCHIP Extension Act of 
        2007 (Public Law 110-173), is redesignated as subsection (m) of 
        section 1848 of the Social Security Act.
            (3) Incentive payments under reporting system.--Section 
        1848(m) of the Social Security Act, as redesignated by paragraph 
        (2), <<NOTE: 42 USC 1395w-4.>> is amended--
                    (A) by amending the heading to read as follows: 
                ``Incentive Payments for Quality Reporting'';
                    (B) by striking paragraph (1) and inserting the 
                following:
            ``(1) Incentive payments.--
                    ``(A) <<NOTE: Deadline.>>  In general.--For 2007 
                through 2010, with respect to covered professional 
                services furnished during a reporting period by an 
                eligible professional, if--
                          ``(i) there are any quality measures that have 
                      been established under the physician reporting 
                      system that are applicable to any such services 
                      furnished by such professional for such reporting 
                      period; and
                          ``(ii) the eligible professional 
                      satisfactorily submits (as determined under this 
                      subsection) to the Secretary data on such quality 
                      measures in accordance with such reporting system 
                      for such reporting period,
                in addition to the amount otherwise paid under this 
                part, there also shall be paid to the eligible 
                professional (or to an employer or facility in the cases 
                described in clause (A) of section 1842(b)(6)) or, in 
                the case of a group practice under paragraph (3)(C), to 
                the group practice, from the Federal Supplementary 
                Medical Insurance Trust Fund established under section 
                1841 an amount equal to the applicable quality percent 
                of the Secretary's estimate (based on claims submitted 
                not later than 2 months after the end of the reporting 
                period) of the allowed charges under this part for all 
                such covered professional services furnished by the 
                eligible professional (or, in the case of a group 
                practice under paragraph (3)(C), by the group practice) 
                during the reporting period.

[[Page 122 STAT. 2523]]

                    ``(B) Applicable quality percent.--For purposes of 
                subparagraph (A), the term `applicable quality percent' 
                means--
                          ``(i) for 2007 and 2008, 1.5 percent; and
                          ``(ii) for 2009 and 2010, 2.0 percent.'';
                    (C) by striking paragraph (3) and redesignating 
                paragraph (2) as paragraph (3);
                    (D) in paragraph (3), as so redesignated--
                          (i) in the matter preceding subparagraph (A), 
                      by striking ``For purposes'' and inserting the 
                      following:
                    ``(A) In general.--For purposes'';
                          (ii) by redesignating subparagraphs (A) and 
                      (B) as clauses (i) and (ii), respectively, and 
                      moving the indentation of such clauses 2 ems to 
                      the right;
                          (iii) in subparagraph (A), as added by clause 
                      (i), by adding at the end the following flush 
                      sentence:
                ``For years after 2008, quality measures for purposes of 
                this subparagraph shall not include electronic 
                prescribing quality measures.''; and
                          (iv) by adding at the end the following new 
                      subparagraphs:
                    ``(C) Satisfactory reporting measures for group 
                practices.--
                          ``(i) In general.-- <<NOTE: Deadline.>> By 
                      January 1, 2010, the Secretary shall establish and 
                      have in place a process under which eligible 
                      professionals in a group practice (as defined by 
                      the Secretary) shall be treated as satisfactorily 
                      submitting data on quality measures under 
                      subparagraph (A) and as meeting the requirement 
                      described in subparagraph (B)(ii) for covered 
                      professional services for a reporting period (or, 
                      for purposes of subsection (a)(5), for a reporting 
                      period for a year) if, in lieu of reporting 
                      measures under subsection (k)(2)(C), the group 
                      practice reports measures determined appropriate 
                      by the Secretary, such as measures that target 
                      high-cost chronic conditions and preventive care, 
                      in a form and manner, and at a time, specified by 
                      the Secretary.
                          ``(ii) Statistical sampling model.--The 
                      process under clause (i) shall provide for the use 
                      of a statistical sampling model to submit data on 
                      measures, such as the model used under the 
                      Physician Group Practice demonstration project 
                      under section 1866A.
                          ``(iii) No double payments.--Payments to a 
                      group practice under this subsection by reason of 
                      the process under clause (i) shall be in lieu of 
                      the payments that would otherwise be made under 
                      this subsection to eligible professionals in the 
                      group practice for satisfactorily submitting data 
                      on quality measures.
                    ``(D) Authority to revise satisfactorily reporting 
                data.--For years after 2009, the Secretary, in 
                consultation with stakeholders and experts, may revise 
                the criteria under this subsection for satisfactorily 
                submitting data on quality measures under subparagraph 
                (A) and the criteria for submitting data on electronic 
                prescribing quality measures under subparagraph 
                (B)(ii).'';
                    (E) in paragraph (5)--

[[Page 122 STAT. 2524]]

                          (i) in subparagraph (C), by inserting ``for 
                      2007, 2008, and 2009,'' after ``provision of 
                      law,'';
                          (ii) in subparagraph (D)--
                                    (I) in clause (i)--
                                            (aa) by inserting ``for 2007 
                                        and 2008'' after ``under this 
                                        subsection''; and
                                            (bb) by striking ``paragraph 
                                        (2)'' and inserting ``this 
                                        subsection'';
                                    (II) in clause (ii), by striking 
                                ``shall'' and inserting ``may establish 
                                procedures to''; and
                                    (III) in clause (iii)--
                                            (aa) by inserting ``(or, in 
                                        the case of a group practice 
                                        under paragraph (3)(C), the 
                                        group practice)'' after ``an 
                                        eligible professional'';
                                            (bb) by striking ``bonus 
                                        incentive payment'' and 
                                        inserting ``incentive payment 
                                        under this subsection''; and
                                            (cc) by adding at the end 
                                        the following new sentence: ``If 
                                        such payments for such period 
                                        have already been made, the 
                                        Secretary shall recoup such 
                                        payments from the eligible 
                                        professional (or the group 
                                        practice).'';
                          (iii) in subparagraph (E)--
                                    (I) by striking ``(i) in general.--
                                '';
                                    (II) by striking clause (ii);
                                    (III) by redesignating subclauses 
                                (I) through (IV) as clauses (i) through 
                                (iv), respectively, and moving the 
                                indentation of such clauses 2 ems to the 
                                left;
                                    (IV) in clause (ii), as so 
                                redesignated, by striking ``paragraph 
                                (2)'' and inserting ``this subsection''; 
                                and
                                    (V) in clause (iv), as so 
                                redesignated--
                                            (aa) by striking ``the 
                                        bonus'' and inserting ``any''; 
                                        and
                                            (bb) by inserting ``and the 
                                        payment adjustment under 
                                        subsection (a)(5)(A)'' before 
                                        the period at the end;
                          (iv) in subparagraph (F)--
                                    (I) by striking ``2009, paragraph 
                                (3) shall not apply, and'' and inserting 
                                ``subsequent years,''; and
                                    (II) by striking ``paragraph (2)'' 
                                and inserting ``this subsection''; and
                          (v) by adding at the end the following new 
                      subparagraph:
                    ``(G) Posting on website.--The Secretary shall post 
                on the Internet website of the Centers for Medicare & 
                Medicaid Services, in an easily understandable format, a 
                list of the names of the following:
                          ``(i) The eligible professionals (or, in the 
                      case of reporting under paragraph (3)(C), the 
                      group practices) who satisfactorily submitted data 
                      on quality measures under this subsection.
                          ``(ii) The eligible professionals (or, in the 
                      case of reporting under paragraph (3)(C), the 
                      group practices) who are successful electronic 
                      prescribers.''; and

[[Page 122 STAT. 2525]]

                    (F) in paragraph (6), by striking subparagraph (C) 
                and inserting the following:
                    ``(C) Reporting period.--
                          ``(i) In general.--Subject to clauses (ii) and 
                      (iii), the term `reporting period' means--
                                    ``(I) for 2007, the period beginning 
                                on July 1, 2007, and ending on December 
                                31, 2007; and
                                    ``(II) for 2008, 2009, 2010, and 
                                2011, the entire year.
                          ``(ii) Authority to revise reporting period.--
                      For years after 2009, the Secretary may revise the 
                      reporting period under clause (i) if the Secretary 
                      determines such revision is appropriate, produces 
                      valid results on measures reported, and is 
                      consistent with the goals of maximizing scientific 
                      validity and reducing administrative burden. If 
                      the Secretary revises such period pursuant to the 
                      preceding sentence, the term `reporting period' 
                      shall mean such revised period.
                          ``(iii) Reference.--Any reference in this 
                      subsection to a reporting period with respect to 
                      the application of subsection (a)(5) shall be 
                      deemed a reference to the reporting period under 
                      subparagraph (D)(iii) of such subsection.''.
            (4) Inclusion of qualified audiologists as eligible 
        professionals.--
                    (A) In general.--Section 1848(k)(3)(B) of the Social 
                Security Act (42 U.S.C. 1395w-4(k)(3)(B)), is amended by 
                adding at the end the following new clause:
                          ``(iv) Beginning with 2009, a qualified 
                      audiologist (as defined in section 
                      1861(ll)(3)(B)).''.
                    (B) <<NOTE: 42 USC 1395w-4 note.>>  No change in 
                billing.--Nothing in the amendment made by subparagraph 
                (A) shall be construed to change the way in which 
                billing for audiology services (as defined in section 
                1861(ll)(2) of the Social Security Act (42 U.S.C. 
                1395x(ll)(2))) occurs under title XVIII of such Act as 
                of July 1, 2008.
            (5) Conforming amendments.--Section 1848(m) of the Social 
        Security Act, as added and amended by paragraphs (2) and (3), is 
        amended--
                    (A) in paragraph (5)--
                          (i) in subparagraph (A)--
                                    (I) by striking ``section 1848(k) of 
                                the Social Security Act, as added by 
                                subsection (b),'' and inserting 
                                ``subsection (k)''; and
                                    (II) by striking ``such section'' 
                                and inserting ``such subsection'';
                          (ii) in subparagraph (B), by striking ``of the 
                      Social Security Act (42 U.S.C. 1395l)'';
                          (iii) in subparagraph (E), in the matter 
                      preceding clause (i), by striking ``1869 or 1878 
                      of the Social Security Act or otherwise'' and 
                      inserting ``1869, section 1878, or otherwise''; 
                      and
                          (iv) in subparagraph (F)--
                                    (I) by striking ``paragraph (2)(B) 
                                of section 1848(k) of the Social 
                                Security Act (42 U.S.C. 1395w-4(k))'' 
                                and inserting ``subsection (k)(2)(B)''; 
                                and

[[Page 122 STAT. 2526]]

                                    (II) by striking ``paragraph (4) of 
                                such section'' and inserting 
                                ``subsection (k)(4)'';
                    (B) in paragraph (6)--
                          (i) in subparagraph (A), by striking ``section 
                      1848(k)(3) of the Social Security Act, as added by 
                      subsection (b)'' and inserting ``subsection 
                      (k)(3)''; and
                          (ii) in subparagraph (B), by striking 
                      ``section 1848(k) of the Social Security Act, as 
                      added by subsection (b)'' and inserting 
                      ``subsection (k)''; and
                    (C) by striking paragraph (6)(D).
            (6) <<NOTE: 42 USC 1395w-4 note.>>  No affect on incentive 
        payments for 2007 or 2008.--Nothing in the amendments made by 
        this subsection or section 132 shall affect the operation of the 
        provisions of section 1848(m) of the Social Security Act, as 
        redesignated and amended by such subsection and section, with 
        respect to 2007 or 2008.

    (c) Physician Feedback Program To Improve Efficiency and Control 
Costs.--
            (1) In general.--Section 1848 of the Social Security Act (42 
        U.S.C. 1395w-4), as amended by subsection (b), is amended by 
        adding at the end the following new subsection:

    ``(n) Physician Feedback Program.--
            ``(1) Establishment.--
                    ``(A) In general.--The Secretary shall establish a 
                Physician Feedback Program (in this subsection referred 
                to as the `Program') under which the Secretary shall use 
                claims data under this title (and may use other data) to 
                provide confidential reports to physicians (and, as 
                determined appropriate by the Secretary, to groups of 
                physicians) that measure the resources involved in 
                furnishing care to individuals under this title. If 
                determined appropriate by the Secretary, the Secretary 
                may include information on the quality of care furnished 
                to individuals under this title by the physician (or 
                group of physicians) in such reports.
                    ``(B) Resource use.--The resources described in 
                subparagraph (A) may be measured--
                          ``(i) on an episode basis;
                          ``(ii) on a per capita basis; or
                          ``(iii) on both an episode and a per capita 
                      basis.
            ``(2) Implementation.-- <<NOTE: Deadline.>> The Secretary 
        shall implement the Program by not later than January 1, 2009.
            ``(3) Data for reports.--To the extent practicable, reports 
        under the Program shall be based on the most recent data 
        available.
            ``(4) Authority to focus application.--The Secretary may 
        focus the application of the Program as appropriate, such as 
        focusing the Program on--
                    ``(A) physician specialties that account for a 
                certain percentage of all spending for physicians' 
                services under this title;
                    ``(B) physicians who treat conditions that have a 
                high cost or a high volume, or both, under this title;
                    ``(C) physicians who use a high amount of resources 
                compared to other physicians;
                    ``(D) physicians practicing in certain geographic 
                areas; or

[[Page 122 STAT. 2527]]

                    ``(E) physicians who treat a minimum number of 
                individuals under this title.
            ``(5) Authority to exclude certain information if 
        insufficient information.--The Secretary may exclude certain 
        information regarding a service from a report under the Program 
        with respect to a physician (or group of physicians) if the 
        Secretary determines that there is insufficient information 
        relating to that service to provide a valid report on that 
        service.
            ``(6) Adjustment of data.--To the extent practicable, the 
        Secretary shall make appropriate adjustments to the data used in 
        preparing reports under the Program, such as adjustments to take 
        into account variations in health status and other patient 
        characteristics.
            ``(7) Education and outreach.--The Secretary shall provide 
        for education and outreach activities to physicians on the 
        operation of, and methodologies employed under, the Program.
            ``(8) Disclosure exemption.--Reports under the Program shall 
        be exempt from disclosure under section 552 of title 5, United 
        States Code.''.
            (2) GAO study and report on the physician feedback 
        program.--
                    (A) Study.--The Comptroller General of the United 
                States shall conduct a study of the Physician Feedback 
                Program conducted under section 1848(n) of the Social 
                Security Act, as added by paragraph (1), including the 
                implementation of the Program.
                    (B) Report.--Not later than March 1, 2011, the 
                Comptroller General of the United States shall submit a 
                report to Congress containing the results of the study 
                conducted under subparagraph (A), together with 
                recommendations for such legislation and administrative 
                action as the Comptroller General determines 
                appropriate.

    (d) Plan for Transition to Value-Based Purchasing Program for 
Physicians and Other Practitioners.--
            (1) In general.--The Secretary of Health and Human Services 
        shall develop a plan to transition to a value-based purchasing 
        program for payment under the Medicare program for covered 
        professional services (as defined in section 1848(k)(3)(A) of 
        the Social Security Act (42 U.S.C. 1395w-4(k)(3)(A))).
            (2) Report.--Not later than May 1, 2010, the Secretary of 
        Health and Human Services shall submit a report to Congress 
        containing the plan developed under paragraph (1), together with 
        recommendations for such legislation and administrative action 
        as the Secretary determines appropriate.
SEC. 132. INCENTIVES FOR ELECTRONIC PRESCRIBING.

    (a) Incentive Payments.--Section 1848(m) of the Social Security Act, 
as added and amended by section 131(b), <<NOTE: 42 USC 1395w-4.>> is 
amended--
            (1) by inserting after paragraph (1), the following new 
        paragraph:
            ``(2) Incentive payments for electronic prescribing.--
                    ``(A) <<NOTE: Deadline.>>  In general.--For 2009 
                through 2013, with respect to covered professional 
                services furnished during a reporting period by an 
                eligible professional, if the eligible

[[Page 122 STAT. 2528]]

                professional is a successful electronic prescriber for 
                such reporting period, in addition to the amount 
                otherwise paid under this part, there also shall be paid 
                to the eligible professional (or to an employer or 
                facility in the cases described in clause (A) of section 
                1842(b)(6)) or, in the case of a group practice under 
                paragraph (3)(C), to the group practice, from the 
                Federal Supplementary Medical Insurance Trust Fund 
                established under section 1841 an amount equal to the 
                applicable electronic prescribing percent of the 
                Secretary's estimate (based on claims submitted not 
                later than 2 months after the end of the reporting 
                period) of the allowed charges under this part for all 
                such covered professional services furnished by the 
                eligible professional (or, in the case of a group 
                practice under paragraph (3)(C), by the group practice) 
                during the reporting period.
                    ``(B) Limitation with respect to electronic 
                prescribing quality measures.--The provisions of this 
                paragraph and subsection (a)(5) shall not apply to an 
                eligible professional (or, in the case of a group 
                practice under paragraph (3)(C), to the group practice) 
                if, for the reporting period (or, for purposes of 
                subsection (a)(5), for the reporting period for a 
                year)--
                          ``(i) the allowed charges under this part for 
                      all covered professional services furnished by the 
                      eligible professional (or group, as applicable) 
                      for the codes to which the electronic prescribing 
                      quality measure applies (as identified by the 
                      Secretary and published on the Internet website of 
                      the Centers for Medicare & Medicaid Services as of 
                      January 1, 2008, and as subsequently modified by 
                      the Secretary) are less than 10 percent of the 
                      total of the allowed charges under this part for 
                      all such covered professional services furnished 
                      by the eligible professional (or the group, as 
                      applicable); or
                          ``(ii) if determined appropriate by the 
                      Secretary, the eligible professional does not 
                      submit (including both electronically and 
                      nonelectronically) a sufficient number (as 
                      determined by the Secretary) of prescriptions 
                      under part D.
                If the Secretary makes the determination to apply clause 
                (ii) for a period, then clause (i) shall not apply for 
                such period.
                    ``(C) Applicable electronic prescribing percent.--
                For purposes of subparagraph (A), the term `applicable 
                electronic prescribing percent' means--
                          ``(i) for 2009 and 2010, 2.0 percent;
                          ``(ii) for 2011 and 2012, 1.0 percent; and
                          ``(iii) for 2013, 0.5 percent.'';
            (2) in paragraph (3), as redesignated by section 131(b)--
                    (A) in the heading, by inserting ``and successful 
                electronic prescriber'' after ``reporting''; and
                    (B) by inserting after subparagraph (A) the 
                following new subparagraph:
                    ``(B) Successful electronic prescriber.--
                          ``(i) In general.--For purposes of paragraph 
                      (2) and subsection (a)(5), an eligible 
                      professional shall be

[[Page 122 STAT. 2529]]

                      treated as a successful electronic prescriber for 
                      a reporting period (or, for purposes of subsection 
                      (a)(5), for the reporting period for a year) if 
                      the eligible professional meets the requirement 
                      described in clause (ii), or, if the Secretary 
                      determines appropriate, the requirement described 
                      in clause (iii). If the Secretary makes the 
                      determination under the preceding sentence to 
                      apply the requirement described in clause (iii) 
                      for a period, then the requirement described in 
                      clause (ii) shall not apply for such period.
                          ``(ii) Requirement for submitting data on 
                      electronic prescribing quality measures.--The 
                      requirement described in this clause is that, with 
                      respect to covered professional services furnished 
                      by an eligible professional during a reporting 
                      period (or, for purposes of subsection (a)(5), for 
                      the reporting period for a year), if there are any 
                      electronic prescribing quality measures that have 
                      been established under the physician reporting 
                      system and are applicable to any such services 
                      furnished by such professional for the period, 
                      such professional reported each such measure under 
                      such system in at least 50 percent of the cases in 
                      which such measure is reportable by such 
                      professional under such system.
                          ``(iii) Requirement for electronically 
                      prescribing under part d.--The requirement 
                      described in this clause is that the eligible 
                      professional electronically submitted a sufficient 
                      number (as determined by the Secretary) of 
                      prescriptions under part D during the reporting 
                      period (or, for purposes of subsection (a)(5), for 
                      the reporting period for a year).
                          ``(iv) Use of part d data.--Notwithstanding 
                      sections 1860D-15(d)(2)(B) and 1860D-15(f)(2), the 
                      Secretary may use data regarding drug claims 
                      submitted for purposes of section 1860D-15 that 
                      are necessary for purposes of clause (iii), 
                      paragraph (2)(B)(ii), and paragraph (5)(G).
                          ``(v) Standards for electronic prescribing.--
                      To the extent practicable, in determining whether 
                      eligible professionals meet the requirements under 
                      clauses (ii) and (iii) for purposes of clause (i), 
                      the Secretary shall ensure that eligible 
                      professionals utilize electronic prescribing 
                      systems in compliance with standards established 
                      for such systems pursuant to the Part D Electronic 
                      Prescribing Program under section 1860D-4(e).''; 
                      and
            (3) in paragraph (5)(E), by striking clause (iii) and 
        inserting the following new clause:
                          ``(iii) the determination of a successful 
                      electronic prescriber under paragraph (3), the 
                      limitation under paragraph (2)(B), and the 
                      exception under subsection (a)(5)(B); and''.

    (b) Incentive Payment Adjustment.--Section 1848(a) of the Social 
Security Act (42 U.S.C. 1395w-4(a)) is amended by adding at the end the 
following new paragraph:
            ``(5) Incentives for electronic prescribing.--
                    ``(A) Adjustment.--

[[Page 122 STAT. 2530]]

                          ``(i) In general.--Subject to subparagraph (B) 
                      and subsection (m)(2)(B), with respect to covered 
                      professional services furnished by an eligible 
                      professional during 2012 or any subsequent year, 
                      if the eligible professional is not a successful 
                      electronic prescriber for the reporting period for 
                      the year (as determined under subsection 
                      (m)(3)(B)), the fee schedule amount for such 
                      services furnished by such professional during the 
                      year (including the fee schedule amount for 
                      purposes of determining a payment based on such 
                      amount) shall be equal to the applicable percent 
                      of the fee schedule amount that would otherwise 
                      apply to such services under this subsection 
                      (determined after application of paragraph (3) but 
                      without regard to this paragraph).
                          ``(ii) Applicable percent.--For purposes of 
                      clause (i), the term `applicable percent' means--
                                    ``(I) for 2012, 99 percent;
                                    ``(II) for 2013, 98.5 percent; and
                                    ``(III) for 2014 and each subsequent 
                                year, 98 percent.
                    ``(B) Significant hardship exception.--The Secretary 
                may, on a case-by-case basis, exempt an eligible 
                professional from the application of the payment 
                adjustment under subparagraph (A) if the Secretary 
                determines, subject to annual renewal, that compliance 
                with the requirement for being a successful electronic 
                prescriber would result in a significant hardship, such 
                as in the case of an eligible professional who practices 
                in a rural area without sufficient Internet access.
                    ``(C) Application.--
                          ``(i) Physician reporting system rules.--
                      Paragraphs (5), (6), and (8) of subsection (k) 
                      shall apply for purposes of this paragraph in the 
                      same manner as they apply for purposes of such 
                      subsection.
                          ``(ii) Incentive payment validation rules.--
                      Clauses (ii) and (iii) of subsection (m)(5)(D) 
                      shall apply for purposes of this paragraph in a 
                      similar manner as they apply for purposes of such 
                      subsection.
                    ``(D) Definitions.--For purposes of this paragraph:
                          ``(i) Eligible professional; covered 
                      professional services.--The terms `eligible 
                      professional' and `covered professional services' 
                      have the meanings given such terms in subsection 
                      (k)(3).
                          ``(ii) Physician reporting system.--The term 
                      `physician reporting system' means the system 
                      established under subsection (k).
                          ``(iii) Reporting period.--The term `reporting 
                      period' means, with respect to a year, a period 
                      specified by the Secretary.''.

    (c) GAO Report on Electronic Prescribing.--Not later than September 
1, 2012, the Comptroller General of the United States shall submit to 
Congress a report on the implementation of the incentives for electronic 
prescribing established under the provisions of, and amendments made by, 
this section. Such report shall include information regarding the 
following:

[[Page 122 STAT. 2531]]

            (1) The percentage of eligible professionals (as defined in 
        section 1848(k)(3) of the Social Security Act (42 U.S.C. 1395w-
        4(k)(3)) that are using electronic prescribing systems, 
        including a determination of whether less than 50 percent of 
        eligible professionals are using electronic prescribing systems.
            (2) If less than 50 percent of eligible professionals are 
        using electronic prescribing systems, recommendations for 
        increasing the use of electronic prescribing systems by eligible 
        professionals, such as changes to the incentive payment 
        adjustments established under section 1848(a)(5) of such Act, as 
        added by subsection (b).
            (3) The estimated savings to the Medicare program under 
        title XVIII of such Act resulting from the use of electronic 
        prescribing systems.
            (4) Reductions in avoidable medical errors resulting from 
        the use of electronic prescribing systems.
            (5) The extent to which the privacy and security of the 
        personal health information of Medicare beneficiaries is 
        protected when such beneficiaries' prescription drug data and 
        usage information is used for purposes other than their direct 
        clinical care, including--
                    (A) whether information identifying the beneficiary 
                is, and remains, removed from data regarding the 
                beneficiary's prescription drug utilization; and
                    (B) the extent to which current law requires 
                sufficient and appropriate oversight and audit 
                capabilities to monitor the practice of prescription 
                drug data mining.
            (6) Such other recommendations and administrative action as 
        the Comptroller General determines to be appropriate.
SEC. 133. EXPANDING ACCESS TO PRIMARY CARE SERVICES.

    (a) Revisions to the Medicare Medical Home Demonstration Project.--
            (1) Authority to expand.--Section 204(b) of division B of 
        the Tax Relief and Health Care Act of 2006 (42 U.S.C. 1395b-1 
        note) is amended--
                    (A) in paragraph (1), by striking ``The project'' 
                and inserting ``Subject to paragraph (3), the project''; 
                and
                    (B) by adding at the end the following new 
                paragraph:
            ``(3) Expansion.--The Secretary may expand the duration and 
        the scope of the project under paragraph (1), to an extent 
        determined appropriate by the Secretary, if the Secretary 
        determines that such expansion will result in any of the 
        following conditions being met:
                    ``(A) The expansion of the project is expected to 
                improve the quality of patient care without increasing 
                spending under the Medicare program (not taking into 
                account amounts available under subsection (g)).
                    ``(B) The expansion of the project is expected to 
                reduce spending under the Medicare program (not taking 
                into account amounts available under subsection (g)) 
                without reducing the quality of patient care.''.
            (2) Funding and application.--Section 204 of division B of 
        the Tax Relief and Health Care Act of 2006 (42 U.S.C. 1395b-1 
        note) is amended by adding at the end the following new 
        subsections:

[[Page 122 STAT. 2532]]

    ``(g) Funding From SMI Trust Fund.--There shall be available, from 
the Federal Supplementary Medical Insurance Trust Fund (under section 
1841 of the Social Security Act (42 U.S.C. 1395t)), the amount of 
$100,000,000 to carry out the project.
    ``(h) Application.--Chapter 35 of title 44, United States Code, 
shall not apply to the conduct of the project.''.
    (b) Application of Budget-Neutrality Adjustor to Conversion 
Factor.--Section 1848(c)(2)(B) of the Social Security Act (42 U.S.C. 
1395w-4(c)(2)(B)) is amended by adding at the end the following new 
clause:
                          ``(vi) Alternative application of budget-
                      neutrality adjustment.--Notwithstanding subsection 
                      (d)(9)(A), effective for fee schedules established 
                      beginning with 2009, with respect to the 5-year 
                      review of work relative value units used in fee 
                      schedules for 2007 and 2008, in lieu of continuing 
                      to apply budget-neutrality adjustments required 
                      under clause (ii) for 2007 and 2008 to work 
                      relative value units, the Secretary shall apply 
                      such budget-neutrality adjustments to the 
                      conversion factor otherwise determined for years 
                      beginning with 2009.''.
SEC. 134. EXTENSION OF FLOOR ON MEDICARE WORK GEOGRAPHIC 
                        ADJUSTMENT UNDER THE MEDICARE PHYSICIAN 
                        FEE SCHEDULE.

    (a) In General.--Section 1848(e)(1)(E) of the Social Security Act 
(42 U.S.C. 1395w-4(e)(1)(E)), as amended by section 103 of the Medicare, 
Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-173), is 
amended by striking ``before July 1, 2008'' and inserting ``before 
January 1, 2010''.
    (b) Treatment of Physicians' Services Furnished in Certain Areas.--
Section 1848(e)(1)(G) of the Social Security Act (42 U.S.C. 1395w-
4(e)(1)(G)) is amended by adding at the end the following new sentence: 
``For purposes of payment for services furnished in the State described 
in the preceding sentence on or after January 1, 2009, after calculating 
the work geographic index in subparagraph (A)(iii), the Secretary shall 
increase the work geographic index to 1.5 if such index would otherwise 
be less than 1.5''.
    (c) Technical Correction.--Section 602(1) of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 (Public 
Law 108-173; 117 Stat. 2301) <<NOTE: 42 USC 1395w-4.>> is amended to 
read as follows:
            ``(1) in subparagraph (A), by striking `subparagraphs (B), 
        (C), and (E)' and inserting `subparagraphs (B), (C), (E), and 
        (G)'; and''.
SEC. 135. IMAGING PROVISIONS.

    (a) Accreditation Requirement.--
            (1) Accreditation requirement.--Section 1834 of the Social 
        Security Act (42 U.S.C. 1395m) is amended by inserting after 
        subsection (d) the following new subsection:

    ``(e) Accreditation Requirement for Advanced Diagnostic Imaging 
Services.--
            ``(1) In general.--
                    ``(A) In general.-- <<NOTE: Effective 
                date.>> Beginning with January 1, 2012, with respect to 
                the technical component of advanced diagnostic imaging 
                services for which payment is made under the fee 
                schedule established under section 1848(b) and

[[Page 122 STAT. 2533]]

                that are furnished by a supplier, payment may only be 
                made if such supplier is accredited by an accreditation 
                organization designated by the Secretary under paragraph 
                (2)(B)(i).
                    ``(B) Advanced diagnostic imaging services 
                defined.--In this subsection, the term `advanced 
                diagnostic imaging services' includes--
                          ``(i) diagnostic magnetic resonance imaging, 
                      computed tomography, and nuclear medicine 
                      (including positron emission tomography); and
                          ``(ii) such other diagnostic imaging services, 
                      including services described in section 
                      1848(b)(4)(B) (excluding X-ray, ultrasound, and 
                      fluoroscopy), as specified by the Secretary in 
                      consultation with physician specialty 
                      organizations and other stakeholders.
                    ``(C) Supplier defined.--In this subsection, the 
                term `supplier' has the meaning given such term in 
                section 1861(d).
            ``(2) Accreditation organizations.--
                    ``(A) Factors for designation of accreditation 
                organizations.--The Secretary shall consider the 
                following factors in designating accreditation 
                organizations under subparagraph (B)(i) and in reviewing 
                and modifying the list of accreditation organizations 
                designated pursuant to subparagraph (C):
                          ``(i) The ability of the organization to 
                      conduct timely reviews of accreditation 
                      applications.
                          ``(ii) Whether the organization has 
                      established a process for the timely integration 
                      of new advanced diagnostic imaging services into 
                      the organization's accreditation program.
                          ``(iii) Whether the organization uses random 
                      site visits, site audits, or other strategies for 
                      ensuring accredited suppliers maintain adherence 
                      to the criteria described in paragraph (3).
                          ``(iv) The ability of the organization to take 
                      into account the capacities of suppliers located 
                      in a rural area (as defined in section 
                      1886(d)(2)(D)).
                          ``(v) Whether the organization has established 
                      reasonable fees to be charged to suppliers 
                      applying for accreditation.
                          ``(vi) Such other factors as the Secretary 
                      determines appropriate.
                    ``(B) Designation.-- <<NOTE: Deadline.>> Not later 
                than January 1, 2010, the Secretary shall designate 
                organizations to accredit suppliers furnishing the 
                technical component of advanced diagnostic imaging 
                services. The list of accreditation organizations so 
                designated may be modified pursuant to subparagraph (C).
                    ``(C) Review and modification of list of 
                accreditation organizations.--
                          ``(i) In general.--The Secretary shall review 
                      the list of accreditation organizations designated 
                      under subparagraph (B) taking into account the 
                      factors under subparagraph (A). Taking into 
                      account the results of such review, the Secretary 
                      may, by regulation, modify

[[Page 122 STAT. 2534]]

                      the list of accreditation organizations designated 
                      under subparagraph (B).
                          ``(ii) Special rule for accreditations done 
                      prior to removal from list of designated 
                      accreditation organizations.--In the case where 
                      the Secretary removes an organization from the 
                      list of accreditation organizations designated 
                      under subparagraph (B), any supplier that is 
                      accredited by the organization during the period 
                      beginning on the date on which the organization is 
                      designated as an accreditation organization under 
                      subparagraph (B) and ending on the date on which 
                      the organization is removed from such list shall 
                      be considered to have been accredited by an 
                      organization designated by the Secretary under 
                      subparagraph (B) for the remaining period such 
                      accreditation is in effect.
            ``(3) Criteria for accreditation.-- 
        <<NOTE: Procedures.>> The Secretary shall establish procedures 
        to ensure that the criteria used by an accreditation 
        organization designated under paragraph (2)(B) to evaluate a 
        supplier that furnishes the technical component of advanced 
        diagnostic imaging services for the purpose of accreditation of 
        such supplier is specific to each imaging modality. Such 
        criteria shall include--
                    ``(A) standards for qualifications of medical 
                personnel who are not physicians and who furnish the 
                technical component of advanced diagnostic imaging 
                services;
                    ``(B) standards for qualifications and 
                responsibilities of medical directors and supervising 
                physicians, including standards that recognize the 
                considerations described in paragraph (4);
                    ``(C) procedures to ensure that equipment used in 
                furnishing the technical component of advanced 
                diagnostic imaging services meets performance 
                specifications;
                    ``(D) standards that require the supplier have 
                procedures in place to ensure the safety of persons who 
                furnish the technical component of advanced diagnostic 
                imaging services and individuals to whom such services 
                are furnished;
                    ``(E) standards that require the establishment and 
                maintenance of a quality assurance and quality control 
                program by the supplier that is adequate and appropriate 
                to ensure the reliability, clarity, and accuracy of the 
                technical quality of diagnostic images produced by such 
                supplier; and
                    ``(F) any other standards or procedures the 
                Secretary determines appropriate.
            ``(4) Recognition in standards for the evaluation of medical 
        directors and supervising physicians.--The standards described 
        in paragraph (3)(B) shall recognize whether a medical director 
        or supervising physician--
                    ``(A) in a particular specialty receives training in 
                advanced diagnostic imaging services in a residency 
                program;
                    ``(B) has attained, through experience, the 
                necessary expertise to be a medical director or a 
                supervising physician;

[[Page 122 STAT. 2535]]

                    ``(C) has completed any continuing medical education 
                courses relating to such services; or
                    ``(D) has met such other standards as the Secretary 
                determines appropriate.
            ``(5) Rule for accreditations made prior to designation.--In 
        the case of a supplier that is accredited before January 1, 
        2010, by an accreditation organization designated by the 
        Secretary under paragraph (2)(B) as of January 1, 2010, such 
        supplier shall be considered to have been accredited by an 
        organization designated by the Secretary under such paragraph as 
        of January 1, 2012, for the remaining period such accreditation 
        is in effect.''.
            (2) Conforming amendments.--
                    (A) In general.--Section 1862(a) of the Social 
                Security Act (42 U.S.C. 1395y(a)) is amended--
                          (i) in paragraph (21), by striking ``or'' at 
                      the end;
                          (ii) in paragraph (22), by striking the period 
                      at the end and inserting ``; or''; and
                          (iii) by inserting after paragraph (22) the 
                      following new paragraph:
            ``(23) which are the technical component of advanced 
        diagnostic imaging services described in section 1834(e)(1)(B) 
        for which payment is made under the fee schedule established 
        under section 1848(b) and that are furnished by a supplier (as 
        defined in section 1861(d)), if such supplier is not accredited 
        by an accreditation organization designated by the Secretary 
        under section 1834(e)(2)(B).''.
                    (B) <<NOTE: 42 USC 1395y note.>>  Effective date.--
                The amendments made by this paragraph shall apply to 
                advanced diagnostic imaging services furnished on or 
                after January 1, 2012.

    (b) <<NOTE: 42 USC 1395m note.>>  Demonstration Project To Assess 
the Appropriate Use of Imaging Services.--
            (1) Conduct of demonstration project.--
                    (A) In general.--The Secretary of Health and Human 
                Services (in this section referred to as the 
                ``Secretary'') shall conduct a demonstration project 
                using the models described in paragraph (2)(E) to 
                collect data regarding physician compliance with 
                appropriateness criteria selected under paragraph (2)(D) 
                in order to determine the appropriateness of advanced 
                diagnostic imaging services furnished to Medicare 
                beneficiaries.
                    (B) Advanced diagnostic imaging services.--In this 
                subsection, the term ``advanced diagnostic imaging 
                services'' has the meaning given such term in section 
                1834(e)(1)(B) of the Social Security Act, as added by 
                subsection (a).
                    (C) Authority to focus demonstration project.--The 
                Secretary may focus the demonstration project with 
                respect to certain advanced diagnostic imaging services, 
                such as services that account for a large amount of 
                expenditures under the Medicare program, services that 
                have recently experienced a high rate of growth, or 
                services for which appropriateness criteria exists.
            (2) Implementation and design of demonstration project.--
                    (A) Implementation and duration.--

[[Page 122 STAT. 2536]]

                          (i) Implementation.--The Secretary shall 
                      implement the demonstration project under this 
                      subsection not later than January 1, 2010.
                          (ii) Duration.--The Secretary shall conduct 
                      the demonstration project under this subsection 
                      for a 2-year period.
                    (B) Application and selection of participating 
                physicians.--
                          (i) Application.--Each physician that desires 
                      to participate in the demonstration project under 
                      this subsection shall submit an application to the 
                      Secretary at such time, in such manner, and 
                      containing such information as the Secretary may 
                      require.
                          (ii) Selection.--The Secretary shall select 
                      physicians to participate in the demonstration 
                      project under this subsection from among 
                      physicians submitting applications under clause 
                      (i). The Secretary shall ensure that the 
                      physicians selected--
                                    (I) represent a wide range of 
                                geographic areas, demographic 
                                characteristics (such as urban, rural, 
                                and suburban), and practice settings 
                                (such as private and academic 
                                practices); and
                                    (II) have the capability to submit 
                                data to the Secretary (or an entity 
                                under a subcontract with the Secretary) 
                                in an electronic format in accordance 
                                with standards established by the 
                                Secretary.
                    (C) Administrative costs and incentives.--The 
                Secretary shall--
                          (i) reimburse physicians for reasonable 
                      administrative costs incurred in participating in 
                      the demonstration project under this subsection; 
                      and
                          (ii) provide reasonable incentives to 
                      physicians to encourage participation in the 
                      demonstration project under this subsection.
                    (D) Use of appropriateness criteria.--
                          (i) In general.--The Secretary, in 
                      consultation with medical specialty societies and 
                      other stakeholders, shall select criteria with 
                      respect to the clinical appropriateness of 
                      advanced diagnostic imaging services for use in 
                      the demonstration project under this subsection.
                          (ii) Criteria selected.--Any criteria selected 
                      under clause (i) shall--
                                    (I) be developed or endorsed by a 
                                medical specialty society; and
                                    (II) be developed in adherence to 
                                appropriateness principles developed by 
                                a consensus organization, such as the 
                                AQA alliance.
                    (E) Models for collecting data regarding physician 
                compliance with selected criteria.--Subject to 
                subparagraph (H), in carrying out the demonstration 
                project under this subsection, the Secretary shall use 
                each of the following models for collecting data 
                regarding physician compliance with appropriateness 
                criteria selected under subparagraph (D):
                          (i) A model described in subparagraph (F).
                          (ii) A model described in subparagraph (G).

[[Page 122 STAT. 2537]]

                          (iii) Any other model that the Secretary 
                      determines to be useful in evaluating the use of 
                      appropriateness criteria for advanced diagnostic 
                      imaging services.
                    (F) Point of service model described.--A model 
                described in this subparagraph is a model that--
                          (i) uses an electronic or paper intake form 
                      that--
                                    
                                (I) <<NOTE: Certification.>> contains a 
                                certification by the physician 
                                furnishing the imaging service that the 
                                data on the intake form was confirmed 
                                with the Medicare beneficiary before the 
                                service was furnished;
                                    (II) contains standardized data 
                                elements for diagnosis, service ordered, 
                                service furnished, and such other 
                                information determined by the Secretary, 
                                in consultation with medical specialty 
                                societies and other stakeholders, to be 
                                germane to evaluating the effectiveness 
                                of the use of appropriateness criteria 
                                selected under subparagraph (D); and
                                    (III) is accessible to physicians 
                                participating in the demonstration 
                                project under this subsection in a 
                                format that allows for the electronic 
                                submission of such form; and
                          (ii) provides for feedback reports in 
                      accordance with paragraph (3)(B).
                    (G) Point of order model described.--A model 
                described in this subparagraph is a model that--
                          (i) uses a computerized order-entry system 
                      that requires the transmittal of relevant 
                      supporting information at the time of referral for 
                      advanced diagnostic imaging services and provides 
                      automated decision-support feedback to the 
                      referring physician regarding the appropriateness 
                      of furnishing such imaging services; and
                          (ii) provides for feedback reports in 
                      accordance with paragraph (3)(B).
                    (H) Limitation.--In no case may the Secretary use 
                prior authorization--
                          (i) as a model for collecting data regarding 
                      physician compliance with appropriateness criteria 
                      selected under subparagraph (D) under the 
                      demonstration project under this subsection; or
                          (ii) under any model used for collecting such 
                      data under the demonstration project.
                    (I) Required contracts and performance standards for 
                certain entities.--
                          (i) In general.--The Secretary shall enter 
                      into contracts with entities to carry out the 
                      model described in subparagraph (G).
                          (ii) Performance standards.--The Secretary 
                      shall establish and enforce performance standards 
                      for such entities under the contracts entered into 
                      under clause (i), including performance standards 
                      with respect to--
                                    (I) the satisfaction of Medicare 
                                beneficiaries who are furnished advanced 
                                diagnostic imaging services by a 
                                physician participating in the 
                                demonstration project;

[[Page 122 STAT. 2538]]

                                    (II) the satisfaction of physicians 
                                participating in the demonstration 
                                project;
                                    (III) if applicable, timelines for 
                                the provision of feedback reports under 
                                paragraph (3)(B); and
                                    (IV) any other areas determined 
                                appropriate by the Secretary.
            (3) Comparison of utilization of advanced diagnostic imaging 
        services and feedback reports.--
                    (A) Comparison of utilization of advanced diagnostic 
                imaging services.--The Secretary shall consult with 
                medical specialty societies and other stakeholders to 
                develop mechanisms for comparing the utilization of 
                advanced diagnostic imaging services by physicians 
                participating in the demonstration project under this 
                subsection against--
                          (i) the appropriateness criteria selected 
                      under paragraph (2)(D); and
                          (ii) to the extent feasible, the utilization 
                      of such services by physicians not participating 
                      in the demonstration project.
                    (B) Feedback reports.--The Secretary shall, in 
                consultation with medical specialty societies and other 
                stakeholders, develop mechanisms to provide feedback 
                reports to physicians participating in the demonstration 
                project under this subsection. Such feedback reports 
                shall include--
                          (i) a profile of the rate of compliance by the 
                      physician with appropriateness criteria selected 
                      under paragraph (2)(D), including a comparison 
                      of--
                                    (I) the rate of compliance by the 
                                physician with such criteria; and
                                    (II) the rate of compliance by the 
                                physician's peers (as defined by the 
                                Secretary) with such criteria; and
                          (ii) to the extent feasible, a comparison of--
                                    (I) the rate of utilization of 
                                advanced diagnostic imaging services by 
                                the physician; and
                                    (II) the rate of utilization of such 
                                services by the physician's peers (as 
                                defined by the Secretary) who are not 
                                participating in the demonstration 
                                project.
            (4) Conduct of demonstration project and waiver.--
                    (A) Conduct of demonstration project.--Chapter 35 of 
                title 44, United States Code, shall not apply to the 
                conduct of the demonstration project under this 
                subsection.
                    (B) Waiver.--The Secretary may waive such provisions 
                of titles XI and XVIII of the Social Security Act (42 
                U.S.C. 1301 et seq.; 1395 et seq.) as may be necessary 
                to carry out the demonstration project under this 
                subsection.
            (5) Evaluation and report.--
                    (A) Evaluation.--The Secretary shall evaluate the 
                demonstration project under this subsection to--
                          (i) assess the timeliness and efficacy of the 
                      demonstration project;
                          (ii) assess the performance of entities under 
                      a contract entered into under paragraph (2)(I)(i);
                          (iii) analyze data--

[[Page 122 STAT. 2539]]

                                    (I) on the rates of appropriate, 
                                uncertain, and inappropriate advanced 
                                diagnostic imaging services furnished by 
                                physicians participating in the 
                                demonstration project;
                                    (II) on patterns and trends in the 
                                appropriateness and inappropriateness of 
                                such services furnished by such 
                                physicians;
                                    (III) on patterns and trends in 
                                national and regional variations of care 
                                with respect to the furnishing of such 
                                services; and
                                    (IV) on the correlation between the 
                                appropriateness of the services 
                                furnished and image results; and
                          (iv) address--
                                    (I) the thresholds used under the 
                                demonstration project to identify 
                                acceptable and outlier levels of 
                                performance with respect to the 
                                appropriateness of advanced diagnostic 
                                imaging services furnished;
                                    (II) whether prospective use of 
                                appropriateness criteria could have an 
                                effect on the volume of such services 
                                furnished;
                                    (III) whether expansion of the use 
                                of appropriateness criteria with respect 
                                to such services to a broader population 
                                of Medicare beneficiaries would be 
                                advisable;
                                    (IV) whether, under such an 
                                expansion, physicians who demonstrate 
                                consistent compliance with such 
                                appropriateness criteria should be 
                                exempted from certain requirements;
                                    (V) the use of incident-specific 
                                versus practice-specific outlier 
                                information in formulating future 
                                recommendations with respect to the use 
                                of appropriateness criteria for such 
                                services under the Medicare program; and
                                    (VI) the potential for using methods 
                                (including financial incentives), in 
                                addition to those used under the models 
                                under the demonstration project, to 
                                ensure compliance with such criteria.
                    (B) Report.--Not later than 1 year after the 
                completion of the demonstration project under this 
                subsection, the Secretary shall submit to Congress a 
                report containing the results of the evaluation of the 
                demonstration project conducted under subparagraph (A), 
                together with recommendations for such legislation and 
                administrative action as the Secretary determines 
                appropriate.
            (6) Funding.--The Secretary shall provide for the transfer 
        from the Federal Supplementary Medical Insurance Trust Fund 
        established under section 1841 of the Social Security Act (42 
        U.S.C. 1395t) of $10,000,000, for carrying out the demonstration 
        project under this subsection (including costs associated with 
        administering the demonstration project, reimbursing physicians 
        for administrative costs and providing incentives to encourage 
        participation under paragraph (2)(C), entering into contracts 
        under paragraph (2)(I), and evaluating the demonstration project 
        under paragraph (5)).

    (c) GAO Study and Reports on Accreditation Requirement for Advanced 
Diagnostic Imaging Services.--

[[Page 122 STAT. 2540]]

            (1) Study.--
                    (A) In general.--The Comptroller General of the 
                United States (in this subsection referred to as the 
                ``Comptroller General'') shall conduct a study, by 
                imaging modality, on--
                          (i) the effect of the accreditation 
                      requirement under section 1834(e) of the Social 
                      Security Act, as added by subsection (a); and
                          (ii) any other relevant questions involving 
                      access to, and the value of, advanced diagnostic 
                      imaging services for Medicare beneficiaries.
                    (B) Issues.--The study conducted under subparagraph 
                (A) shall examine the following:
                          (i) The impact of such accreditation 
                      requirement on the number, type, and quality of 
                      imaging services furnished to Medicare 
                      beneficiaries.
                          (ii) The cost of such accreditation 
                      requirement, including costs to facilities of 
                      compliance with such requirement and costs to the 
                      Secretary of administering such requirement.
                          (iii) Access to imaging services by Medicare 
                      beneficiaries, especially in rural areas, before 
                      and after implementation of such accreditation 
                      requirement.
                          (iv) Such other issues as the Secretary 
                      determines appropriate.
            (2) Reports.--
                    (A) Preliminary report.--Not later than March 1, 
                2013, the Comptroller General shall submit a preliminary 
                report to Congress on the study conducted under 
                paragraph (1).
                    (B) Final report.--Not later than March 1, 2014, the 
                Comptroller General shall submit a final report to 
                Congress on the study conducted under paragraph (1), 
                together with recommendations for such legislation and 
                administrative action as the Comptroller General 
                determines appropriate.
SEC. 136. EXTENSION OF TREATMENT OF CERTAIN PHYSICIAN PATHOLOGY 
                        SERVICES UNDER MEDICARE.

    Section 542(c) of the Medicare, Medicaid, and SCHIP Benefits 
Improvement and Protection Act of 2000 (as enacted into law by section 
1(a)(6) of Public Law 106-554), as amended by section 732 of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(42 U.S.C. 1395w-4 note), section 104 of division B of the Tax Relief 
and Health Care Act of 2006 (42 U.S.C. 1395w-4 note), and section 104 of 
the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-
173), <<NOTE: 42 USC 1395w-4 note.>> is amended by striking ``2007, and 
the first 6 months of 2008'' and inserting ``2007, 2008, and 2009''.
SEC. 137. ACCOMMODATION OF PHYSICIANS ORDERED TO ACTIVE DUTY IN 
                        THE ARMED SERVICES.

    Section 1842(b)(6)(D)(iii) of the Social Security Act (42 U.S.C. 
1395u(b)(6)(D)(iii)), as amended by section 116 of the Medicare, 
Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-173), is 
amended by striking ``(before July 1, 2008)''.

[[Page 122 STAT. 2541]]

SEC. 138. <<NOTE: 42 USC 1395w-4.>>  ADJUSTMENT FOR MEDICARE 
                        MENTAL HEALTH SERVICES.

    (a) Payment Adjustment.--
            (1) In general.--For purposes of payment for services 
        furnished under the physician fee schedule under section 1848 of 
        the Social Security Act (42 U.S.C. 1395w-4) during the period 
        beginning on July 1, 2008, and ending on December 31, 2009, the 
        Secretary of Health and Human Services shall increase the fee 
        schedule otherwise applicable for specified services by 5 
        percent.
            (2) Nonapplication of budget-neutrality.--The budget-
        neutrality provision of section 1848(c)(2)(B)(ii) of the Social 
        Security Act (42 U.S.C. 1395w-4(c)(2)(B)(ii)) shall not apply to 
        the adjustments described in paragraph (1).

    (b) Definition of Specified Services.--In this section, the term 
``specified services'' means procedure codes for services in the 
categories of the Health Care Common Procedure Coding System, 
established by the Secretary of Health and Human Services under section 
1848(c)(5) of the Social Security Act (42 U.S.C. 1395w-4(c)(5)), as of 
July 1, 2007, and as subsequently modified by the Secretary, consisting 
of psychiatric therapeutic procedures furnished in office or other 
outpatient facility settings or in inpatient hospital, partial hospital, 
or residential care facility settings, but only with respect to such 
services in such categories that are in the subcategories of services 
which are--
            (1) insight oriented, behavior modifying, or supportive 
        psychotherapy; or
            (2) interactive psychotherapy.

    (c) Implementation.--Notwithstanding any other provision of law, the 
Secretary may implement this section by program instruction or 
otherwise.
SEC. 139. IMPROVEMENTS FOR MEDICARE ANESTHESIA TEACHING PROGRAMS.

    (a) Special Payment Rule for Teaching Anesthesiologists.--Section 
1848(a) of the Social Security Act (42 U.S.C. 1395w-4(a)), as amended by 
section 132(b), is amended--
            (1) in paragraph (4)(A), by inserting ``except as provided 
        in paragraph (5),'' after ``anesthesia cases,''; and
            (2) by adding at the end the following new paragraph:
            ``(6) Special rule for teaching anesthesiologists.--With 
        respect <<NOTE: Effective date.>>  to physicians' services 
        furnished on or after January 1, 2010, in the case of teaching 
        anesthesiologists involved in the training of physician 
        residents in a single anesthesia case or two concurrent 
        anesthesia cases, the fee schedule amount to be applied shall be 
        100 percent of the fee schedule amount otherwise applicable 
        under this section if the anesthesia services were personally 
        performed by the teaching anesthesiologist alone and paragraph 
        (4) shall not apply if--
                    ``(A) the teaching anesthesiologist is present 
                during all critical or key portions of the anesthesia 
                service or procedure involved; and
                    ``(B) the teaching anesthesiologist (or another 
                anesthesiologist with whom the teaching anesthesiologist 
                has entered into an arrangement) is immediately 
                available to furnish anesthesia services during the 
                entire procedure.''.

    (b) Treatment of Certified Registered Nurse Anesthetists.--With 
respect <<NOTE: Effective date. 42 USC 1395l.>>  to items and services 
furnished on or after

[[Page 122 STAT. 2542]]

January 1, 2010, the Secretary of Health and Human Services shall make 
appropriate adjustments to payments under the Medicare program under 
title XVIII of the Social Security Act for teaching certified registered 
nurse anesthetists to implement a policy with respect to teaching 
certified registered nurse anesthetists that--
            (1) is consistent with the adjustments made by the special 
        rule for teaching anesthesiologists under section 1848(a)(6) of 
        the Social Security Act, as added by subsection (a); and
            (2) maintains the existing payment differences between 
        teaching anesthesiologists and teaching certified registered 
        nurse anesthetists.

            PART II--OTHER PAYMENT AND COVERAGE IMPROVEMENTS

SEC. 141. EXTENSION OF EXCEPTIONS PROCESS FOR MEDICARE THERAPY 
                        CAPS.

    Section 1833(g)(5) of the Social Security Act (42 U.S.C. 
1395l(g)(5)), as amended by section 105 of the Medicare, Medicaid, and 
SCHIP Extension Act of 2007 (Public Law 110-173), is amended by striking 
``June 30, 2008'' and inserting ``December 31, 2009''.
SEC. 142. EXTENSION OF PAYMENT RULE FOR BRACHYTHERAPY AND 
                        THERAPEUTIC RADIOPHARMACEUTICALS.

    Section 1833(t)(16)(C) of the Social Security Act (42 U.S.C. 
1395l(t)(16)(C)), as amended by section 106 of the Medicare, Medicaid, 
and SCHIP Extension Act of 2007 (Public Law 110-173), is amended by 
striking ``July 1, 2008'' each place it appears and inserting ``January 
1, 2010''.
SEC. 143. SPEECH-LANGUAGE PATHOLOGY SERVICES.

    (a) In General.--Section 1861(ll) of the Social Security Act (42 
U.S.C. 1395x(ll)) is amended--
            (1) by redesignating paragraphs (2) and (3) as paragraphs 
        (3) and (4), respectively; and
            (2) by inserting after paragraph (1) the following new 
        paragraph:

    ``(2) The term `outpatient speech-language pathology services' has 
the meaning given the term `outpatient physical therapy services' in 
subsection (p), except that in applying such subsection--
            ``(A) `speech-language pathology' shall be substituted for 
        `physical therapy' each place it appears; and
            ``(B) `speech-language pathologist' shall be substituted for 
        `physical therapist' each place it appears.''.

    (b) Conforming Amendments.--
            (1) Section 1832(a)(2)(C) of the Social Security Act (42 
        U.S.C. 1395k(a)(2)(C)) is amended--
                    (A) by striking ``and outpatient'' and inserting ``, 
                outpatient''; and
                    (B) by inserting before the semicolon at the end the 
                following: ``, and outpatient speech-language pathology 
                services (other than services to which the second 
                sentence of section 1861(p) applies through the 
                application of section 1861(ll)(2))''.
            (2) Subparagraphs (A) and (B) of section 1833(a)(8) of the 
        Social Security Act (42 U.S.C. 1395l(a)(8)) are each amended

[[Page 122 STAT. 2543]]

        by striking ``(which includes outpatient speech-language 
        pathology services)'' and inserting ``, outpatient speech-
        language pathology services,''.
            (3) Section 1833(g)(1) of the Social Security Act (42 U.S.C. 
        1395l(g)(1)) is amended--
                    (A) by inserting ``and speech-language pathology 
                services of the type described in such section through 
                the application of section 1861(ll)(2)'' after 
                ``1861(p)''; and
                    (B) by inserting ``and speech-language pathology 
                services'' after ``and physical therapy services''.
            (4) The second sentence of section 1835(a) of the Social 
        Security Act (42 U.S.C. 1395n(a)) is amended--
                    (A) by striking ``section 1861(g)'' and inserting 
                ``subsection (g) or (ll)(2) of section 1861'' each place 
                it appears; and
                    (B) by inserting ``or outpatient speech-language 
                pathology services, respectively'' after ``occupational 
                therapy services''.
            (5) Section 1861(p) of the Social Security Act (42 U.S.C. 
        1395x(p)) is amended by striking the fourth sentence.
            (6) Section 1861(s)(2)(D) of the Social Security Act (42 
        U.S.C. 1395x(s)(2)(D)) is amended by inserting ``, outpatient 
        speech-language pathology services,'' after ``physical therapy 
        services''.
            (7) Section 1862(a)(20) of the Social Security Act (42 
        U.S.C. 1395y(a)(20)) is amended--
                    (A) by striking ``outpatient occupational therapy 
                services or outpatient physical therapy services'' and 
                inserting ``outpatient physical therapy services, 
                outpatient speech-language pathology services, or 
                outpatient occupational therapy services''; and
                    (B) by striking ``section 1861(g)'' and inserting 
                ``subsection (g) or (ll)(2) of section 1861''.
            (8) Section 1866(e)(1) of the Social Security Act (42 U.S.C. 
        1395cc(e)(1)) is amended--
                    (A) by striking ``section 1861(g)'' and inserting 
                ``subsection (g) or (ll)(2) of section 1861'' the first 
                two places it appears;
                    (B) by striking ``defined) or'' and inserting 
                ``defined),''; and
                    (C) by inserting before the semicolon at the end the 
                following: ``, or (through the operation of section 
                1861(ll)(2)) with respect to the furnishing of 
                outpatient speech-language pathology''.
            (9) Section 1877(h)(6) of the Social Security Act (42 U.S.C. 
        1395nn(h)(6)) is amended by adding at the end the following new 
        subparagraph:
                    ``(L) Outpatient speech-language pathology 
                services.''.

    (c) <<NOTE: 42 USC 1395k note.>>  Effective Date.--The amendments 
made by this section shall apply to services furnished on or after July 
1, 2009.

    (d) <<NOTE: 42 USC 1395k note.>>  Construction.--Nothing in this 
section shall be construed to affect existing regulations and policies 
of the Centers for Medicare & Medicaid Services that require physician 
oversight of care as a condition of payment for speech-language 
pathology services under part B of the Medicare program.

[[Page 122 STAT. 2544]]

SEC. 144. PAYMENT AND COVERAGE IMPROVEMENTS FOR PATIENTS WITH 
                        CHRONIC OBSTRUCTIVE PULMONARY DISEASE AND 
                        OTHER CONDITIONS.

    (a) Coverage of Pulmonary and Cardiac Rehabilitation.--
            (1) In general.--Section 1861 of the Social Security Act (42 
        U.S.C. 1395x), as amended by section 101(a), is amended--
                    (A) in subsection (s)(2)--
                          (i) in subparagraph (AA), by striking ``and'' 
                      at the end;
                          (ii) by adding at the end the following new 
                      subparagraphs:
                    ``(CC) items and services furnished under a cardiac 
                rehabilitation program (as defined in subsection 
                (eee)(1)) or under a pulmonary rehabilitation program 
                (as defined in subsection (fff)(1)); and
                    ``(DD) items and services furnished under an 
                intensive cardiac rehabilitation program (as defined in 
                subsection (eee)(4));''; and
                    (B) by adding at the end the following new 
                subsections:

   ``Cardiac Rehabilitation Program; Intensive Cardiac Rehabilitation 
                                 Program

    ``(eee)(1) The term `cardiac rehabilitation program' means a 
physician-supervised program (as described in paragraph (2)) that 
furnishes the items and services described in paragraph (3).
    ``(2) A program described in this paragraph is a program under 
which--
            ``(A) items and services under the program are delivered--
                    ``(i) in a physician's office;
                    ``(ii) in a hospital on an outpatient basis; or
                    ``(iii) in other settings determined appropriate by 
                the Secretary.
            ``(B) a physician is immediately available and accessible 
        for medical consultation and medical emergencies at all times 
        items and services are being furnished under the program, except 
        that, in the case of items and services furnished under such a 
        program in a hospital, such availability shall be presumed; and
            ``(C) individualized treatment is furnished under a written 
        plan established, reviewed, and signed by a physician every 30 
        days that describes--
                    ``(i) the individual's diagnosis;
                    ``(ii) the type, amount, frequency, and duration of 
                the items and services furnished under the plan; and
                    ``(iii) the goals set for the individual under the 
                plan.

    ``(3) The items and services described in this paragraph are--
            ``(A) physician-prescribed exercise;
            ``(B) cardiac risk factor modification, including education, 
        counseling, and behavioral intervention (to the extent such 
        education, counseling, and behavioral intervention is closely 
        related to the individual's care and treatment and is tailored 
        to the individual's needs);
            ``(C) psychosocial assessment;
            ``(D) outcomes assessment; and
            ``(E) such other items and services as the Secretary may 
        determine, but only if such items and services are--

[[Page 122 STAT. 2545]]

                    ``(i) reasonable and necessary for the diagnosis or 
                active treatment of the individual's condition;
                    ``(ii) reasonably expected to improve or maintain 
                the individual's condition and functional level; and
                    ``(iii) furnished under such guidelines relating to 
                the frequency and duration of such items and services as 
                the Secretary shall establish, taking into account 
                accepted norms of medical practice and the reasonable 
                expectation of improvement of the individual.

    ``(4)(A) The term `intensive cardiac rehabilitation program' means a 
physician-supervised program (as described in paragraph (2)) that 
furnishes the items and services described in paragraph (3) and has 
shown, in peer-reviewed published research, that it accomplished--
            ``(i) one or more of the following:
                    ``(I) positively affected the progression of 
                coronary heart disease; or
                    ``(II) reduced the need for coronary bypass surgery; 
                or
                    ``(III) reduced the need for percutaneous coronary 
                interventions; and
            ``(ii) a statistically significant reduction in 5 or more of 
        the following measures from their level before receipt of 
        cardiac rehabilitation services to their level after receipt of 
        such services:
                    ``(I) low density lipoprotein;
                    ``(II) triglycerides;
                    ``(III) body mass index;
                    ``(IV) systolic blood pressure;
                    ``(V) diastolic blood pressure; or
                    ``(VI) the need for cholesterol, blood pressure, and 
                diabetes medications.

    ``(B) To be eligible for an intensive cardiac rehabilitation 
program, an individual must have--
            ``(i) had an acute myocardial infarction within the 
        preceding 12 months;
            ``(ii) had coronary bypass surgery;
            ``(iii) stable angina pectoris;
            ``(iv) had heart valve repair or replacement;
            ``(v) had percutaneous transluminal coronary angioplasty 
        (PTCA) or coronary stenting; or
            ``(vi) had a heart or heart-lung transplant.

    ``(C) An intensive cardiac rehabilitation program may be provided in 
a series of 72 one-hour sessions (as defined in section 1848(b)(5)), up 
to 6 sessions per day, over a period of up to 18 weeks.
    ``(5) <<NOTE: Standards.>> The Secretary shall establish standards 
to ensure that a physician with expertise in the management of 
individuals with cardiac pathophysiology who is licensed to practice 
medicine in the State in which a cardiac rehabilitation program (or the 
intensive cardiac rehabilitation program, as the case may be) is 
offered--
            ``(A) is responsible for such program; and
            ``(B) in consultation with appropriate staff, is involved 
        substantially in directing the progress of individual in the 
        program.

[[Page 122 STAT. 2546]]

                   ``Pulmonary Rehabilitation Program

    ``(fff)(1) The term `pulmonary rehabilitation program' means a 
physician-supervised program (as described in subsection (eee)(2) with 
respect to a program under this subsection) that furnishes the items and 
services described in paragraph (2).
    ``(2) The items and services described in this paragraph are--
            ``(A) physician-prescribed exercise;
            ``(B) education or training (to the extent the education or 
        training is closely and clearly related to the individual's care 
        and treatment and is tailored to such individual's needs);
            ``(C) psychosocial assessment;
            ``(D) outcomes assessment; and
            ``(E) such other items and services as the Secretary may 
        determine, but only if such items and services are--
                    ``(i) reasonable and necessary for the diagnosis or 
                active treatment of the individual's condition;
                    ``(ii) reasonably expected to improve or maintain 
                the individual's condition and functional level; and
                    ``(iii) furnished under such guidelines relating to 
                the frequency and duration of such items and services as 
                the Secretary shall establish, taking into account 
                accepted norms of medical practice and the reasonable 
                expectation of improvement of the individual.

    ``(3) <<NOTE: Standards.>> The Secretary shall establish standards 
to ensure that a physician with expertise in the management of 
individuals with respiratory pathophysiology who is licensed to practice 
medicine in the State in which a pulmonary rehabilitation program is 
offered--
            ``(A) is responsible for such program; and
            ``(B) in consultation with appropriate staff, is involved 
        substantially in directing the progress of individual in the 
        program.''.
            (2) Payment for intensive cardiac rehabilitation programs.--
                    (A) Inclusion in physician fee schedule.--Section 
                1848(j)(3) of the Social Security Act (42 U.S.C. 1395w-
                4(j)(3)) is amended by inserting ``(2)(DD),'' after 
                ``(2)(AA),''.
                    (B) Conforming amendment.--Section 1848(b) of the 
                Social Security Act (42 U.S.C. 1395w-4(b)) is amended by 
                adding at the end the following new paragraph:
            ``(5) Treatment of intensive cardiac rehabilitation 
        program.--
                    ``(A) In general.--In the case of an intensive 
                cardiac rehabilitation program described in section 
                1861(eee)(4), the Secretary shall substitute the 
                Medicare OPD fee schedule amount established under the 
                prospective payment system for hospital outpatient 
                department service under paragraph (3)(D) of section 
                1833(t) for cardiac rehabilitation (under HCPCS codes 
                93797 and 93798 for calendar year 2007, or any 
                succeeding HCPCS codes for cardiac rehabilitation).
                    ``(B) Definition of session.--Each of the services 
                described in subparagraphs (A) through (E) of section 
                1861(eee)(3), when furnished for one hour, is a separate 
                session of intensive cardiac rehabilitation.

[[Page 122 STAT. 2547]]

                    ``(C) Multiple sessions per day.--Payment may be 
                made for up to 6 sessions per day of the series of 72 
                one-hour sessions of intensive cardiac rehabilitation 
                services described in section 1861(eee)(4)(B).''.
            (3) <<NOTE: 42 USC 1395w-4 note.>>  Effective date.--The 
        amendments made by this subsection shall apply to items and 
        services furnished on or after January 1, 2010.

    (b) Repeal of Transfer of Ownership of Oxygen Equipment.--
            (1) In general.--Section 1834(a)(5)(F) of the Social 
        Security Act (42 U.S.C. 1395m(a)(5)(F)) is amended--
                    (A) in the heading, by striking ``OWNERSHIP of 
                equipment'' and inserting ``RENTAL cap''; and
                    (B) by striking clause (ii) and inserting the 
                following:
                          ``(ii) Payments and rules after rental cap.--
                      After the 36th continuous month during which 
                      payment is made for the equipment under this 
                      paragraph--
                                    ``(I) the supplier furnishing such 
                                equipment under this subsection shall 
                                continue to furnish the equipment during 
                                any period of medical need for the 
                                remainder of the reasonable useful 
                                lifetime of the equipment, as determined 
                                by the Secretary;
                                    ``(II) payments for oxygen shall 
                                continue to be made in the amount 
                                recognized for oxygen under paragraph 
                                (9) for the period of medical need; and
                                    ``(III) maintenance and servicing 
                                payments shall, if the Secretary 
                                determines such payments are reasonable 
                                and necessary, be made (for parts and 
                                labor not covered by the supplier's or 
                                manufacturer's warranty, as determined 
                                by the Secretary to be appropriate for 
                                the equipment), and such payments shall 
                                be in an amount determined to be 
                                appropriate by the Secretary.''.
            (2) <<NOTE: 42 USC 1395m note.>>  Effective date.--The 
        amendments made by paragraph (1) shall take effect on January 1, 
        2009.
SEC. 145. CLINICAL LABORATORY TESTS.

    (a) Repeal of Medicare Competitive Bidding Demonstration Project for 
Clinical Laboratory Services.--
            (1) In general.--Section 1847 of the Social Security Act (42 
        U.S.C. 1395w-3) is amended by striking subsection (e).
            (2) Conforming amendments.--Section 1833(a)(1)(D) of the 
        Social Security Act (42 U.S.C. 1395l(a)(1)(D)) is amended--
                    (A) by inserting ``or'' before ``(ii)''; and
                    (B) by striking ``or (iii) on the basis'' and all 
                that follows before the comma at the end.
            (3) <<NOTE: 42 USC 1395l.>>  Effective date.--The amendments 
        made by this subsection shall take effect on the date of the 
        enactment of this Act.

    (b) Clinical Laboratory Test Fee Schedule Update Adjustment.--
Section 1833(h)(2)(A)(i) of the Social Security Act (42 U.S.C. 
1395l(h)(2)(A)(ii)) is amended by inserting ``minus, for each of the 
years 2009 through 2013, 0.5 percentage points'' after ``city 
average)''.

[[Page 122 STAT. 2548]]

SEC. 146. IMPROVED ACCESS TO AMBULANCE SERVICES.

    (a) Extension of Increased Medicare Payments for Ground Ambulance 
Services.--Section 1834(l)(13) of the Social Security Act (42 U.S.C. 
1395m(l)(13)) is amended--
            (1) in subparagraph (A)--
                    (A) in the matter preceding clause (i), by inserting 
                ``and for such services furnished on or after July 1, 
                2008, and before January 1, 2010'' after ``2007,'';
                    (B) in clause (i), by inserting ``(or 3 percent if 
                such service is furnished on or after July 1, 2008, and 
                before January 1, 2010)'' after ``2 percent''; and
                    (C) in clause (ii), by inserting ``(or 2 percent if 
                such service is furnished on or after July 1, 2008, and 
                before January 1, 2010)'' after ``1 percent''; and
            (2) in subparagraph (B)--
                    (A) in the heading, by striking ``2006'' and 
                inserting ``applicable period''; and
                    (B) by inserting ``applicable'' before ``period''.

    (b) Air Ambulance Payment Improvements.--
            (1) <<NOTE: 42 USC 1395m note.>>  Treatment of certain areas 
        for payment for air ambulance services under the ambulance fee 
        schedule.--Notwithstanding <<NOTE: Time period.>> any other 
        provision of law, for purposes of making payments under section 
        1834(l) of the Social Security Act (42 U.S.C. 1395m(l)) for air 
        ambulance services furnished during the period beginning on July 
        1, 2008, and ending on December 31, 2009, any area that was 
        designated as a rural area for purposes of making payments under 
        such section for air ambulance services furnished on December 
        31, 2006, shall be treated as a rural area for purposes of 
        making payments under such section for air ambulance services 
        furnished during such period.
            (2) Clarification regarding satisfaction of requirement of 
        medically necessary.--
                    (A) In general.--Section 1834(l)(14)(B)(i) of the 
                Social Security Act (42 U.S.C. 1395m(l)(14)(B)(i)) is 
                amended by striking ``reasonably determines or 
                certifies'' and inserting ``certifies or reasonably 
                determines''.
                    (B) <<NOTE: 42 USC 1395m note.>>  Effective date.--
                The amendment made by subparagraph (A) shall apply to 
                services furnished on or after the date of the enactment 
                of this Act.
SEC. 147. EXTENSION AND EXPANSION OF THE MEDICARE HOLD HARMLESS 
                        PROVISION UNDER THE PROSPECTIVE PAYMENT 
                        SYSTEM FOR HOSPITAL OUTPATIENT DEPARTMENT 
                        (HOPD) SERVICES FOR CERTAIN HOSPITALS.

    Section 1833(t)(7)(D)(i) of the Social Security Act (42 U.S.C. 
1395l(t)(7)(D)(i)) is amended--
            (1) in subclause (II)--
                    (A) in the first sentence, by striking ``2009'' and 
                inserting ``2010''; and
                    (B) by striking the second sentence and inserting 
                the following new sentence: ``For purposes of the 
                preceding sentence, the applicable percentage shall be 
                95 percent with respect to covered OPD services 
                furnished in 2006, 90 percent with respect to such 
                services furnished in 2007, and 85 percent with respect 
                to such services furnished in 2008 or 2009.''; and

[[Page 122 STAT. 2549]]

            (2) by adding at the end the following new subclause:
                          ``(III) In the case of a sole community 
                      hospital (as defined in section 
                      1886(d)(5)(D)(iii)) that has not more than 100 
                      beds, for covered OPD services furnished on or 
                      after January 1, 2009, and before January 1, 2010, 
                      for which the PPS amount is less than the pre-BBA 
                      amount, the amount of payment under this 
                      subsection shall be increased by 85 percent of the 
                      amount of such difference.''.
SEC. 148. CLARIFICATION OF PAYMENT FOR CLINICAL LABORATORY TESTS 
                        FURNISHED BY CRITICAL ACCESS HOSPITALS.

    (a) In General.--Section 1834(g)(4) of the Social Security Act (42 
U.S.C. 1395m(g)(4)) is amended--
            (1) in the heading, by striking ``no beneficiary cost-
        sharing for'' and inserting ``treatment of''; and
            (2) by adding at the end the following new sentence: ``For 
        purposes of the preceding sentence and section 1861(mm)(3), 
        clinical diagnostic laboratory services furnished by a critical 
        access hospital shall be treated as being furnished as part of 
        outpatient critical access services without regard to whether 
        the individual with respect to whom such services are furnished 
        is physically present in the critical access hospital, or in a 
        skilled nursing facility or a clinic (including a rural health 
        clinic) that is operated by a critical access hospital, at the 
        time the specimen is collected.''.

    (b) <<NOTE: 42 USC 1395m note.>>  Effective Date.--The amendments 
made by subsection (a) shall apply to services furnished on or after 
July 1, 2009.
SEC. 149. ADDING CERTAIN ENTITIES AS ORIGINATING SITES FOR PAYMENT 
                        OF TELEHEALTH SERVICES.

    (a) In General.--Section 1834(m)(4)(C)(ii) of the Social Security 
Act (42 U.S.C. 1395m(m)(4)(C)(ii)) is amended by adding at the end the 
following new subclauses:
                                    ``(VI) A hospital-based or critical 
                                access hospital-based renal dialysis 
                                center (including satellites).
                                    ``(VII) A skilled nursing facility 
                                (as defined in section 1819(a)).
                                    ``(VIII) A community mental health 
                                center (as defined in section 
                                1861(ff)(3)(B)).''.

    (b) Conforming Amendment.--Section 1888(e)(2)(A)(ii) of the Social 
Security Act (42 U.S.C. 1395yy(e)(2)(A)(ii)) is amended by inserting 
``telehealth services furnished under section 1834(m)(4)(C)(ii)(VII),'' 
after ``section 1861(s)(2),''.
    (c) <<NOTE: 42 USC 1395m note.>>  Effective Date.--The amendments 
made by this section shall apply to services furnished on or after 
January 1, 2009.
SEC. 150. MEDPAC STUDY AND REPORT ON IMPROVING CHRONIC CARE 
                        DEMONSTRATION PROGRAMS.

    (a) Study.--The Medicare Payment Advisory Commission (in this 
section referred to as the ``Commission'') shall conduct a study on the 
feasability and advisability of establishing a Medicare Chronic Care 
Practice Research Network that would serve as a standing network of 
providers testing new models of care coordination and other care 
approaches for chronically ill beneficiaries, including the initiation, 
operation, evaluation, and, if appropriate,

[[Page 122 STAT. 2550]]

expansion of such models to the broader Medicare patient population. In 
conducting such study, the Commission shall take into account the 
structure, implementation, and results of prior and existing care 
coordination and disease management demonstrations and pilots, including 
the Medicare Coordinated Care Demonstration Project under section 4016 
of the Balanced Budget Act of 1997 (42 U.S.C. 1395b-1 note) and the 
chronic care improvement programs under section 1807 of the Social 
Security Act (42 U.S.C. 1395b-8), commonly known to as ``Medicare Health 
Support''.
    (b) Report.--Not later than June 15, 2009, the Commission shall 
submit to Congress a report containing the results of the study 
conducted under subsection (a).
SEC. 151. INCREASE OF FQHC PAYMENT LIMITS.

    (a) In General.--Section 1833 of the Social Security Act (42 U.S.C. 
1395l) is amended by adding at the end the following new subsection:
    ``(v) Increase of FQHC Payment Limits.--In the case of services 
furnished by Federally qualified health centers (as defined in section 
1861(aa)(4)), the Secretary shall establish payment limits with respect 
to such services under this part for services furnished--
            ``(1) in 2010, at the limits otherwise established under 
        this part for such year increased by $5; and
            ``(2) in a subsequent year, at the limits established 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.''.

    (b) Study and Report on the Effects and Adequacy of the Medicare 
Federally Qualified Health Center Payment Structure.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct a study to determine whether the structure for 
        payments for services furnished by Federally qualified health 
        centers (as defined in section 1861(aa)(4) of the Social 
        Security Act (42 U.S.C. 1395x(aa)(4)) under part B of title 
        XVIII of the Social Security Act (42 U.S.C. 1395j et seq.) 
        adequately reimburses Federally qualified health centers for the 
        care furnished to Medicare beneficiaries. In conducting such 
        study, the Comptroller General shall--
                    (A) use the most current cost report data available;
                    (B) examine the effects of the payment limits 
                established with respect to such services under such 
                part B on the ability of Federally qualified health 
                centers to furnish care to Medicare beneficiaries; and
                    (C) examine the cost of furnishing services covered 
                under the Medicare program as of the date of the 
                enactment of this Act that were not covered under such 
                program as of the date on which the Secretary determined 
                the payment rate for Federally qualified health centers 
                in 1991.
            (2) Report.--Not later than 15 months after the date of the 
        enactment of this Act, the Comptroller General of the United 
        States shall submit to Congress a report on the study conducted 
        under paragraph (1), together with recommendations for such 
        legislation and administrative action the Comptroller General 
        determines appropriate, taking into consideration the structure 
        and adequacy of the prospective payment methodology used to make 
        payments to Federally qualified health centers

[[Page 122 STAT. 2551]]

        under the Medicaid program under title XIX of the Social 
        Security Act (42 U.S.C. 1396 et seq.).
SEC. 152. KIDNEY DISEASE EDUCATION AND AWARENESS PROVISIONS.

    (a) Chronic Kidney Disease Initiatives.--Part P of title III of the 
Public Health Service Act (42 U.S.C. 280g et seq.) is amended by adding 
at the end the following new section:
``SEC. 399R. <<NOTE: 42 USC 280g-6.>> CHRONIC KIDNEY DISEASE 
                          INITIATIVES.

    ``(a) In General.--The Secretary shall establish pilot projects to--
            ``(1) increase public and medical community awareness 
        (particularly of those who treat patients with diabetes and 
        hypertension) regarding chronic kidney disease, focusing on 
        prevention;
            ``(2) increase screening for chronic kidney disease, 
        focusing on Medicare beneficiaries at risk of chronic kidney 
        disease; and
            ``(3) enhance surveillance systems to better assess the 
        prevalence and incidence of chronic kidney disease.

    ``(b) Scope and Duration.--
            ``(1) Scope.--The Secretary shall select at least 3 States 
        in which to conduct pilot projects under this section.
            ``(2) Duration.--The pilot projects under this section shall 
        be conducted for a period that is not longer than 5 years and 
        shall begin on January 1, 2009.

    ``(c) Evaluation and Report.--The Comptroller General of the United 
States shall conduct an evaluation of the pilot projects conducted under 
this section. Not later than 12 months after the date on which the pilot 
projects are completed, the Comptroller General shall submit to Congress 
a report on the evaluation.
    ``(d) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary for the purpose of carrying 
out this section.''.
    (b) Medicare Coverage of Kidney Disease Patient Education 
Services.--
            (1) Coverage of kidney disease education services.--
                    (A) Coverage.--Section 1861(s)(2) of the Social 
                Security Act (42 U.S.C. 1395x(s)(2)), as amended by 
                section 144(a), is amended--
                          (i) in subparagraph (CC), by striking ``and'' 
                      after the semicolon at the end;
                          (ii) in subparagraph (DD), by adding ``and'' 
                      after the semicolon at the end; and
                          (iii) by adding at the end the following new 
                      subparagraph:
            ``(EE) kidney disease education services (as defined in 
        subsection (ggg));''.
                    (B) Services described.--Section 1861 of the Social 
                Security Act (42 U.S.C. 1395x), as amended by section 
                144(a), is amended by adding at the end the following 
                new subsection:

                   ``Kidney Disease Education Services

    ``(ggg)(1) The term `kidney disease education services' means 
educational services that are--

[[Page 122 STAT. 2552]]

            ``(A) furnished to an individual with stage IV chronic 
        kidney disease who, according to accepted clinical guidelines 
        identified by the Secretary, will require dialysis or a kidney 
        transplant;
            ``(B) furnished, upon the referral of the physician managing 
        the individual's kidney condition, by a qualified person (as 
        defined in paragraph (2)); and
            ``(C) designed--
                    ``(i) to provide comprehensive information 
                (consistent with the standards set under paragraph (3)) 
                regarding--
                          ``(I) the management of comorbidities, 
                      including for purposes of delaying the need for 
                      dialysis;
                          ``(II) the prevention of uremic complications; 
                      and
                          ``(III) each option for renal replacement 
                      therapy (including hemodialysis and peritoneal 
                      dialysis at home and in-center as well as vascular 
                      access options and transplantation);
                    ``(ii) to ensure that the individual has the 
                opportunity to actively participate in the choice of 
                therapy; and
                    ``(iii) to be tailored to meet the needs of the 
                individual involved.

    ``(2)(A) The term `qualified person' means--
            ``(i) a physician (as defined in section 1861(r)(1)) or a 
        physician assistant, nurse practitioner, or clinical nurse 
        specialist (as defined in section 1861(aa)(5)), who furnishes 
        services for which payment may be made under the fee schedule 
        established under section 1848; and
            ``(ii) a provider of services located in a rural area (as 
        defined in section 1886(d)(2)(D)).

    ``(B) Such term does not include a provider of services (other than 
a provider of services described in subparagraph (A)(ii)) or a renal 
dialysis facility.
    ``(3) <<NOTE: Standards.>> The Secretary shall set standards for the 
content of such information to be provided under paragraph (1)(C)(i) 
after consulting with physicians, other health professionals, health 
educators, professional organizations, accrediting organizations, kidney 
patient organizations, dialysis facilities, transplant centers, network 
organizations described in section 1881(c)(2), and other knowledgeable 
persons. To the extent possible the Secretary shall consult with persons 
or entities described in the previous sentence, other than a dialysis 
facility, that has not received industry funding from a drug or 
biological manufacturer or dialysis facility.

    ``(4) No individual shall be furnished more than 6 sessions of 
kidney disease education services under this title.''.
                    (C) Payment under the physician fee schedule.--
                Section 1848(j)(3) of the Social Security Act (42 U.S.C. 
                1395w-4(j)(3)), as amended by section 144(b), is amended 
                by inserting ``(2)(EE),'' after ``(2)(DD),''.
                    (D) Limitation on number of sessions.--Section 
                1862(a)(1) of the Social Security Act (42 U.S.C. 
                1395y(a)(1)) is amended--
                          (i) in subparagraph (M), by striking ``and'' 
                      at the end;
                          (ii) in subparagraph (N), by striking the 
                      semicolon at the end and inserting ``, and''; and
                          (iii) by adding at the end the following new 
                      subparagraph:

[[Page 122 STAT. 2553]]

            ``(O) in the case of kidney disease education services (as 
        defined in paragraph (1) of section 1861(ggg)), which are 
        furnished in excess of the number of sessions covered under 
        paragraph (4) of such section;''.
            (2) <<NOTE: 42 USC 1395w-4 note.>>  Effective date.--The 
        amendments made by this subsection shall apply to services 
        furnished on or after January 1, 2010.
SEC. 153. RENAL DIALYSIS PROVISIONS.

    (a) Composite Rate.--
            (1) Update.--Section 1881(b)(12)(G) of the Social Security 
        Act (42 U.S.C. 1395rr(b)(12)(G)) is amended--
                    (A) in clause (i), by striking ``and'' at the end;
                    (B) in clause (ii)--
                          (i) by inserting ``and before January 1, 
                      2009,'' after ``April 1, 2007,''; and
                          (ii) by striking the period at the end and 
                      inserting a semicolon; and
                    (C) by adding at the end the following new clauses:
             <<NOTE: Time period.>> ``(iii) furnished on or after 
        January 1, 2009, and before January 1, 2010, by 1.0 percent 
        above the amount of such composite rate component for such 
        services furnished on December 31, 2008; and
            ``(iv) <<NOTE: Effective date.>> furnished on or after 
        January 1, 2010, by 1.0 percent above the amount of such 
        composite rate component for such services furnished on December 
        31, 2009.''.
            (2) Site neutral composite rate.--Section 1881(b)(12)(A) of 
        the Social Security Act (42 U.S.C. 1395rr(b)(12)(A)) is amended 
        by adding at the end the following new sentence: 
        ``Under <<NOTE: Effective date.>> such system, the payment rate 
        for dialysis services furnished on or after January 1, 2009, by 
        providers of services shall be the same as the payment rate 
        (computed without regard to this sentence) for such services 
        furnished by renal dialysis facilities, and in applying the 
        geographic index under subparagraph (D) to providers of 
        services, the labor share shall be based on the labor share 
        otherwise applied for renal dialysis facilities.''.

    (b) Development of ESRD Bundled Payment System.--
            (1) In general.--Section 1881(b) of the Social Security Act 
        (42 U.S.C. 1395rr(b)) is amended by adding at the end the 
        following new paragraph:

    ``(14)(A)(i) <<NOTE: Effective date.>> Subject to subparagraph (E), 
for services furnished on or after January 1, 2011, the Secretary shall 
implement a payment system under which a single payment is made under 
this title to a provider of services or a renal dialysis facility for 
renal dialysis services (as defined in subparagraph (B)) in lieu of any 
other payment (including a payment adjustment under paragraph 
(12)(B)(ii)) and for such services and items furnished pursuant to 
paragraph (4).

    ``(ii) In implementing the system under this paragraph the Secretary 
shall ensure that the estimated total amount of payments under this 
title for 2011 for renal dialysis services shall equal 98 percent of the 
estimated total amount of payments for renal dialysis services, 
including payments under paragraph (12)(B)(ii), that would have been 
made under this title with respect to services furnished in 2011 if such 
system had not been implemented. In making the estimation under 
subclause (I), the Secretary shall

[[Page 122 STAT. 2554]]

use per patient utilization data from 2007, 2008, or 2009, whichever has 
the lowest per patient utilization.
    ``(B) For purposes of this paragraph, the term `renal dialysis 
services' includes--
            ``(i) items and services included in the composite rate for 
        renal dialysis services as of December 31, 2010;
            ``(ii) erythropoiesis stimulating agents and any oral form 
        of such agents that are furnished to individuals for the 
        treatment of end stage renal disease;
            ``(iii) other drugs and biologicals that are furnished to 
        individuals for the treatment of end stage renal disease and for 
        which payment was (before the application of this paragraph) 
        made separately under this title, and any oral equivalent form 
        of such drug or biological; and
            ``(iv) diagnostic laboratory tests and other items and 
        services not described in clause (i) that are furnished to 
        individuals for the treatment of end stage renal disease.

Such term does not include vaccines.
    ``(C) The system under this paragraph may provide for payment on the 
basis of services furnished during a week or month or such other 
appropriate unit of payment as the Secretary specifies.
    ``(D) Such system--
            ``(i) shall include a payment adjustment based on case mix 
        that may take into account patient weight, body mass index, 
        comorbidities, length of time on dialysis, age, race, ethnicity, 
        and other appropriate factors;
            ``(ii) shall include a payment adjustment for high cost 
        outliers due to unusual variations in the type or amount of 
        medically necessary care, including variations in the amount of 
        erythropoiesis stimulating agents necessary for anemia 
        management;
            ``(iii) <<NOTE: Time period.>> shall include a payment 
        adjustment that reflects the extent to which costs incurred by 
        low-volume facilities (as defined by the Secretary) in 
        furnishing renal dialysis services exceed the costs incurred by 
        other facilities in furnishing such services, and for payment 
        for renal dialysis services furnished on or after January 1, 
        2011, and before January 1, 2014, such payment adjustment shall 
        not be less than 10 percent; and
            ``(iv) may include such other payment adjustments as the 
        Secretary determines appropriate, such as a payment adjustment--
                    ``(I) for pediatric providers of services and renal 
                dialysis facilities;
                    ``(II) by a geographic index, such as the index 
                referred to in paragraph (12)(D), as the Secretary 
                determines to be appropriate; and
                    ``(III) for providers of services or renal dialysis 
                facilities located in rural areas.

The Secretary shall take into consideration the unique treatment needs 
of children and young adults in establishing such system.
    ``(E)(i) <<NOTE: Effective date.>> The Secretary shall provide for a 
four-year phase-in (in equal increments) of the payment amount under the 
payment system under this paragraph, with such payment amount being 
fully implemented for renal dialysis services furnished on or after 
January 1, 2014.

[[Page 122 STAT. 2555]]

    ``(ii) A provider of services or renal dialysis facility may make a 
one-time election to be excluded from the phase-in under clause (i) and 
be paid entirely based on the payment amount under the payment system 
under this paragraph. <<NOTE: Deadline.>> Such an election shall be made 
prior to January 1, 2011, in a form and manner specified by the 
Secretary, and is final and may not be rescinded.

    ``(iii) The Secretary shall make an adjustment to the payments under 
this paragraph for years during which the phase-in under clause (i) is 
applicable so that the estimated total amount of payments under this 
paragraph, including payments under this subparagraph, shall equal the 
estimated total amount of payments that would otherwise occur under this 
paragraph without such phase-in.
    ``(F)(i) <<NOTE: Effective date.>> Subject to clause (ii), beginning 
in 2012, the Secretary shall annually increase payment amounts 
established under this paragraph by an ESRD market basket percentage 
increase factor for a bundled payment system for renal dialysis services 
that reflects changes over time in the prices of an appropriate mix of 
goods and services included in renal dialysis services minus 1.0 
percentage point.

    ``(ii) For years during which a phase-in of the payment system 
pursuant to subparagraph (E) is applicable, the following rules shall 
apply to the portion of the payment under the system that is based on 
the payment of the composite rate that would otherwise apply if the 
system under this paragraph had not been enacted:
            ``(I) The update under clause (i) shall not apply.
            ``(II) The Secretary shall annually increase such composite 
        rate by the ESRD market basket percentage increase factor 
        described in clause (i) minus 1.0 percentage point.

    ``(G) There shall be no administrative or judicial review under 
section 1869, section 1878, or otherwise of the determination of payment 
amounts under subparagraph (A), the establishment of an appropriate unit 
of payment under subparagraph (C), the identification of renal dialysis 
services included in the bundled payment, the adjustments under 
subparagraph (D), the application of the phase-in under subparagraph 
(E), and the establishment of the market basket percentage increase 
factors under subparagraph (F).
    ``(H) Erythropoiesis stimulating agents and other drugs and 
biologicals shall be treated as prescribed and dispensed or administered 
and available only under part B if they are--
            ``(i) furnished to an individual for the treatment of end 
        stage renal disease; and
            ``(ii) included in subparagraph (B) for purposes of payment 
        under this paragraph.''.
            (2) Prohibition of unbundling.--Section 1862(a) of the 
        Social Security Act (42 U.S.C. 1395y(a)), as amended by section 
        135(a)(2), is amended--
                    (A) in paragraph (22), by striking ``or'' at the 
                end;
                    (B) in paragraph (23), by striking the period at the 
                end and inserting ``; or''; and
                    (C) by inserting after paragraph (23) the following 
                new paragraph:
            ``(24) where such expenses are for renal dialysis services 
        (as defined in subparagraph (B) of section 1881(b)(14)) for 
        which payment is made under such section unless such payment is 
        made under such section to a provider of services or a renal 
        dialysis facility for such services.''.

[[Page 122 STAT. 2556]]

            (3) Conforming amendments.--(A) Section 1881(b) of the 
        Social Security Act (42 U.S.C. 1395rr(b)) is amended--
                    (i) in paragraph (12)(A), by striking ``In lieu of 
                payment'' and inserting ``Subject to paragraph (14), in 
                lieu of payment'';
                    (ii) in the second sentence of paragraph (12)(F)--
                          (I) by inserting ``or paragraph (14)'' after 
                      ``this paragraph''; and
                          (II) by inserting ``or under the system under 
                      paragraph (14)'' after ``subparagraph (B)''; and
                    (iii) in paragraph (13)--
                          (I) in subparagraph (A), in the matter 
                      preceding clause (i), by striking ``The payment 
                      amounts'' and inserting ``Subject to paragraph 
                      (14), the payment amounts''; and
                          (II) in subparagraph (B)--
                                    (aa) in clause (i), by striking 
                                ``(i)'' after ``(B)'' and by inserting 
                                ``, subject to paragraph (14)'' before 
                                the period at the end; and
                                    (bb) by striking clause (ii).
            (B) Section 1861(s)(2)(F) of the Social Security Act (42 
        U.S.C. 1395x(s)(2)(F)) is amended by inserting ``, and, for 
        items and services furnished on or after January 1, 2011, renal 
        dialysis services (as defined in section 1881(b)(14)(B))'' 
        before the semicolon at the end.
            (C) Section 623(e) of the Medicare Prescription Drug, 
        Improvement, and Modernization Act of 2003 (42 U.S.C. 1395rr 
        note) is repealed.
            (4) <<NOTE: 42 USC 1395rr note.>>  Rule of construction.--
        Nothing in this subsection or the amendments made by this 
        subsection shall be construed as authorizing or requiring the 
        Secretary of Health and Human Services to make payments under 
        the payment system implemented under paragraph (14)(A)(i) of 
        section 1881(b) of the Social Security Act (42 U.S.C. 
        1395rr(b)), as added by paragraph (1), for any unrecovered 
        amount for any bad debt attributable to deductible and 
        coinsurance on items and services not included in the basic 
        case-mix adjusted composite rate under paragraph (12) of such 
        section as in effect before the date of the enactment of this 
        Act.

    (c) Quality Incentives in the End-Stage Renal Disease Program.--
Section 1881 of the Social Security Act (42 U.S.C. 1395rr) is amended by 
adding at the end the following new subsection:
    ``(h) Quality Incentives in the End-Stage Renal Disease Program.--
            ``(1) Quality incentives.--
                    ``(A) In general.-- <<NOTE: Effective date.>> With 
                respect to renal dialysis services (as defined in 
                subsection (b)(14)(B)) furnished on or after January 1, 
                2012, in the case of a provider of services or a renal 
                dialysis facility that does not meet the requirement 
                described in subparagraph (B) with respect to the year, 
                payments otherwise made to such provider or facility 
                under the system under subsection (b)(14) for such 
                services shall be reduced by up to 2.0 percent, as 
                determined appropriate by the Secretary.
                    ``(B) Requirement.--The requirement described in 
                this subparagraph is that the provider or facility meets 
                (or

[[Page 122 STAT. 2557]]

                exceeds) the total performance score under paragraph (3) 
                with respect to performance standards established by the 
                Secretary with respect to measures specified in 
                paragraph (2).
                    ``(C) No effect in subsequent years.--The reduction 
                under subparagraph (A) shall apply only with respect to 
                the year involved, and the Secretary shall not take into 
                account such reduction in computing the single payment 
                amount under the system under paragraph (14) in a 
                subsequent year.
            ``(2) Measures.--
                    ``(A) In general.--The measures specified under this 
                paragraph with respect to the year involved shall 
                include--
                          ``(i) measures on anemia management that 
                      reflect the labeling approved by the Food and Drug 
                      Administration for such management and measures on 
                      dialysis adequacy;
                          ``(ii) to the extent feasible, such measure 
                      (or measures) of patient satisfaction as the 
                      Secretary shall specify; and
                          ``(iii) such other measures as the Secretary 
                      specifies, including, to the extent feasible, 
                      measures on--
                                    ``(I) iron management;
                                    ``(II) bone mineral metabolism; and
                                    ``(III) vascular access, including 
                                for maximizing the placement of arterial 
                                venous fistula.
                    ``(B) Use of endorsed measures.--
                          ``(i) In general.--Subject to clause (ii), any 
                      measure specified by the Secretary under 
                      subparagraph (A)(iii) must have been endorsed by 
                      the entity with a contract under section 1890(a).
                          ``(ii) Exception.--In the case of a specified 
                      area or medical topic determined appropriate by 
                      the Secretary for which a feasible and practical 
                      measure has not been endorsed by the entity with a 
                      contract under section 1890(a), the Secretary may 
                      specify a measure that is not so endorsed as long 
                      as due consideration is given to measures that 
                      have been endorsed or adopted by a consensus 
                      organization identified by the Secretary.
                    ``(C) Updating measures.--The Secretary shall 
                establish a process for updating the measures specified 
                under subparagraph (A) in consultation with interested 
                parties.
                    ``(D) Consideration.--In specifying measures under 
                subparagraph (A), the Secretary shall consider the 
                availability of measures that address the unique 
                treatment needs of children and young adults with kidney 
                failure.
            ``(3) Performance scores.--
                    ``(A) Total performance score.--
                          ``(i) In general.--Subject to clause (ii), the 
                      Secretary shall develop a methodology for 
                      assessing the total performance of each provider 
                      of services and renal dialysis facility based on 
                      performance standards with respect to the measures 
                      selected under paragraph (2) for a performance 
                      period established under paragraph (4)(D) (in this 
                      subsection referred to as the `total performance 
                      score').

[[Page 122 STAT. 2558]]

                          ``(ii) Application.--For providers of services 
                      and renal dialysis facilities that do not meet (or 
                      exceed) the total performance score established by 
                      the Secretary, the Secretary shall ensure that the 
                      application of the methodology developed under 
                      clause (i) results in an appropriate distribution 
                      of reductions in payment under paragraph (1) among 
                      providers and facilities achieving different 
                      levels of total performance scores, with providers 
                      and facilities achieving the lowest total 
                      performance scores receiving the largest reduction 
                      in payment under paragraph (1)(A).
                          ``(iii) Weighting of measures.--In calculating 
                      the total performance score, the Secretary shall 
                      weight the scores with respect to individual 
                      measures calculated under subparagraph (B) to 
                      reflect priorities for quality improvement, such 
                      as weighting scores to ensure that providers of 
                      services and renal dialysis facilities have strong 
                      incentives to meet or exceed anemia management and 
                      dialysis adequacy performance standards, as 
                      determined appropriate by the Secretary.
                    ``(B) Performance score with respect to individual 
                measures.--The Secretary shall also calculate separate 
                performance scores for each measure, including for 
                dialysis adequacy and anemia management.
            ``(4) Performance standards.--
                    ``(A) Establishment.--Subject to subparagraph (E), 
                the Secretary shall establish performance standards with 
                respect to measures selected under paragraph (2) for a 
                performance period with respect to a year (as 
                established under subparagraph (D)).
                    ``(B) Achievement and improvement.--The performance 
                standards established under subparagraph (A) shall 
                include levels of achievement and improvement, as 
                determined appropriate by the Secretary.
                    ``(C) Timing.--The Secretary shall establish the 
                performance standards under subparagraph (A) prior to 
                the beginning of the performance period for the year 
                involved.
                    ``(D) Performance period.--The Secretary shall 
                establish the performance period with respect to a year. 
                Such performance period shall occur prior to the 
                beginning of such year.
                    ``(E) Special rule.--The Secretary shall initially 
                use as the performance standard for the measures 
                specified under paragraph (2)(A)(i) for a provider of 
                services or a renal dialysis facility the lesser of--
                          ``(i) the performance of such provider or 
                      facility for such measures in the year selected by 
                      the Secretary under the second sentence of 
                      subsection (b)(14)(A)(ii); or
                          ``(ii) a performance standard based on the 
                      national performance rates for such measures in a 
                      period determined by the Secretary.
            ``(5) Limitation on review.--There shall be no 
        administrative or judicial review under section 1869, section 
        1878, or otherwise of the following:

[[Page 122 STAT. 2559]]

                    ``(A) The determination of the amount of the payment 
                reduction under paragraph (1).
                    ``(B) The establishment of the performance standards 
                and the performance period under paragraph (4).
                    ``(C) The specification of measures under paragraph 
                (2).
                    ``(D) The methodology developed under paragraph (3) 
                that is used to calculate total performance scores and 
                performance scores for individual measures.
            ``(6) Public reporting.--
                    ``(A) In general.-- <<NOTE: Procedures.>> The 
                Secretary shall establish procedures for making 
                information regarding performance under this subsection 
                available to the public, including--
                          ``(i) the total performance score achieved by 
                      the provider of services or renal dialysis 
                      facility under paragraph (3) and appropriate 
                      comparisons of providers of services and renal 
                      dialysis facilities to the national average with 
                      respect to such scores; and
                          ``(ii) the performance score achieved by the 
                      provider or facility with respect to individual 
                      measures.
                    ``(B) Opportunity to review.--The procedures 
                established under subparagraph (A) shall ensure that a 
                provider of services and a renal dialysis facility has 
                the opportunity to review the information that is to be 
                made public with respect to the provider or facility 
                prior to such data being made public.
                    ``(C) Certificates.--
                          ``(i) In general.--The Secretary shall provide 
                      certificates to providers of services and renal 
                      dialysis facilities who furnish renal dialysis 
                      services under this section to display in patient 
                      areas. The certificate shall indicate the total 
                      performance score achieved by the provider or 
                      facility under paragraph (3).
                          ``(ii) Display.--Each facility or provider 
                      receiving a certificate under clause (i) shall 
                      prominently display the certificate at the 
                      provider or facility.
                    ``(D) Web-based list.--The Secretary shall establish 
                a list of providers of services and renal dialysis 
                facilities who furnish renal dialysis services under 
                this section that indicates the total performance score 
                and the performance score for individual measures 
                achieved by the provider and facility under paragraph 
                (3). Such information shall be posted on the Internet 
                website of the Centers for Medicare & Medicaid Services 
                in an easily understandable format.''.

    (d) GAO Report on ESRD Bundling System and Quality Initiative.--Not 
later than March 1, 2013, the Comptroller General of the United States 
shall submit to Congress a report on the implementation of the payment 
system under subsection (b)(14) of section 1881 of the Social Security 
Act (as added by subsection (b)) for renal dialysis services and related 
services (defined in subparagraph (B) of such subsection (b)(14)) and 
the quality initiative under subsection (h) of such section 1881 (as 
added by subsection (b)). Such report shall include the following 
information:
            (1) The changes in utilization rates for erythropoiesis 
        stimulating agents.

[[Page 122 STAT. 2560]]

            (2) The mode of administering such agents, including 
        information on the proportion of individuals receiving such 
        agents intravenously as compared to subcutaneously.
            (3) An analysis of the payment adjustment under subparagraph 
        (D)(iii) of such subsection (b)(14), including an examination of 
        the extent to which costs incurred by rural, low-volume 
        providers and facilities (as defined by the Secretary) in 
        furnishing renal dialysis services exceed the costs incurred by 
        other providers and facilities in furnishing such services, and 
        a recommendation regarding the appropriateness of such 
        adjustment.
            (4) The changes, if any, in utilization rates of drugs and 
        biologicals that the Secretary identifies under subparagraph 
        (B)(iii) of such subsection (b)(14), and any oral equivalent or 
        oral substitutable forms of such drugs and biologicals or of 
        drugs and biologicals described in clause (ii), that have 
        occurred after implementation of the payment system under such 
        subsection (b)(14).
            (5) Any other information or recommendations for legislative 
        and administrative actions determined appropriate by the 
        Comptroller General.
SEC. 154. DELAY IN AND REFORM OF MEDICARE DMEPOS COMPETITIVE 
                        ACQUISITION PROGRAM.

    (a) Temporary Delay and Reform.--
            (1) In general.--Section 1847(a)(1) of the Social Security 
        Act (42 U.S.C. 1395w-3(a)(1)) is amended--
                    (A) in paragraph (1)--
                          (i) in subparagraph (B)(i), in the matter 
                      before subclause (I), by inserting ``consistent 
                      with subparagraph (D)'' after ``in a manner'';
                          (ii) in subparagraph (B)(i)(II), by striking 
                      ``80'' and ``in 2009'' and inserting ``an 
                      additional 70'' and ``in 2011'', respectively;
                          (iii) in subparagraph (B)(i)(III), by striking 
                      ``after 2009'' and inserting ``after 2011 (or, in 
                      the case of national mail order for items and 
                      services, after 2010)''; and
                          (iv) by adding at the end the following new 
                      subparagraphs:
                    ``(D) Changes in competitive acquisition programs.--
                          ``(i) Round 1 of competitive acquisition 
                      program.--Notwithstanding subparagraph (B)(i)(I) 
                      and in implementing the first round of the 
                      competitive acquisition programs under this 
                      section--
                                    ``(I) <<NOTE: Contracts.>> the 
                                contracts awarded under this section 
                                before the date of the enactment of this 
                                subparagraph are terminated, no payment 
                                shall be made under this title on or 
                                after the date of the enactment of this 
                                subparagraph based on such a contract, 
                                and, to the extent that any damages may 
                                be applicable as a result of the 
                                termination of such contracts, such 
                                damages shall be payable from the 
                                Federal Supplementary Medical Insurance 
                                Trust Fund under section 1841;

[[Page 122 STAT. 2561]]

                                    ``(II) the Secretary shall conduct 
                                the competition for such round in a 
                                manner so that it occurs in 2009 with 
                                respect to the same items and services 
                                and the same areas, except as provided 
                                in subclauses (III) and (IV);
                                    ``(III) <<NOTE: Puerto Rico.>> the 
                                Secretary shall exclude Puerto Rico so 
                                that such round of competition covers 9, 
                                instead of 10, of the largest 
                                metropolitan statistical areas; and
                                    ``(IV) there shall be excluded 
                                negative pressure wound therapy items 
                                and services.
                      Nothing in subclause (I) shall be construed to 
                      provide an independent cause of action or right to 
                      administrative or judicial review with regard to 
                      the termination provided under such subclause.
                          ``(ii) Round 2 of competitive acquisition 
                      program.--In implementing the second round of the 
                      competitive acquisition programs under this 
                      section described in subparagraph (B)(i)(II)--
                                    ``(I) the metropolitan statistical 
                                areas to be included shall be those 
                                metropolitan statistical areas selected 
                                by the Secretary for such round as of 
                                June 1, 2008; and
                                    ``(II) the Secretary may subdivide 
                                metropolitan statistical areas with 
                                populations (based upon the most recent 
                                data from the Census Bureau) of at least 
                                8,000,000 into separate areas for 
                                competitive acquisition purposes.
                          ``(iii) Exclusion of certain areas in 
                      subsequent rounds of competitive acquisition 
                      programs.--In implementing subsequent rounds of 
                      the competitive acquisition programs under this 
                      section, including under subparagraph (B)(i)(III), 
                      for competitions occurring before 2015, the 
                      Secretary shall exempt from the competitive 
                      acquisition program (other than national mail 
                      order) the following:
                                    ``(I) Rural areas.
                                    ``(II) Metropolitan statistical 
                                areas not selected under round 1 or 
                                round 2 with a population of less than 
                                250,000.
                                    ``(III) Areas with a low population 
                                density within a metropolitan 
                                statistical area that is otherwise 
                                selected, as determined for purposes of 
                                paragraph (3)(A).
                    ``(E) Verification by oig.--The Inspector General of 
                the Department of Health and Human Services shall, 
                through post-award audit, survey, or otherwise, assess 
                the process used by the Centers for Medicare & Medicaid 
                Services to conduct competitive bidding and subsequent 
                pricing determinations under this section that are the 
                basis for pivotal bid amounts and single payment amounts 
                for items and services in competitive bidding areas 
                under rounds 1 and 2 of the competitive acquisition 
                programs under this section and may continue to verify 
                such calculations for subsequent rounds of such 
                programs.
                    ``(F) Supplier feedback on missing financial 
                documentation.--

[[Page 122 STAT. 2562]]

                          ``(i) In general.--In the case of a bid where 
                      one or more covered documents in connection with 
                      such bid have been submitted not later than the 
                      covered document review date specified in clause 
                      (ii), the Secretary--
                                    ``(I) <<NOTE: Deadlines.>> shall 
                                provide, by not later than 45 days (in 
                                the case of the first round of the 
                                competitive acquisition programs as 
                                described in subparagraph (B)(i)(I)) or 
                                90 days (in the case of a subsequent 
                                round of such programs) after the 
                                covered document review date, for notice 
                                to the bidder of all such documents that 
                                are missing as of the covered document 
                                review date; and
                                    ``(II) may not reject the bid on the 
                                basis that any covered document is 
                                missing or has not been submitted on a 
                                timely basis, if all such missing 
                                documents identified in the notice 
                                provided to the bidder under subclause 
                                (I) are submitted to the Secretary not 
                                later than 10 business days after the 
                                date of such notice.
                          ``(ii) Covered document review date.--The 
                      covered document review date specified in this 
                      clause with respect to a competitive acquisition 
                      program is the later of--
                                    ``(I) the date that is 30 days 
                                before the final date specified by the 
                                Secretary for submission of bids under 
                                such program; or
                                    ``(II) the date that is 30 days 
                                after the first date specified by the 
                                Secretary for submission of bids under 
                                such program.
                          ``(iii) Limitations of process.--The process 
                      provided under this subparagraph--
                                    ``(I) applies only to the timely 
                                submission of covered documents;
                                    ``(II) does not apply to any 
                                determination as to the accuracy or 
                                completeness of covered documents 
                                submitted or whether such documents meet 
                                applicable requirements;
                                    ``(III) shall not prevent the 
                                Secretary from rejecting a bid based on 
                                any basis not described in clause 
                                (i)(II); and
                                    ``(IV) shall not be construed as 
                                permitting a bidder to change bidding 
                                amounts or to make other changes in a 
                                bid submission.
                          ``(iv) Covered document defined.--In this 
                      subparagraph, the term `covered document' means a 
                      financial, tax, or other document required to be 
                      submitted by a bidder as part of an original bid 
                      submission under a competitive acquisition program 
                      in order to meet required financial standards. 
                      Such term does not include other documents, such 
                      as the bid itself or accreditation 
                      documentation.''; and
                    (B) in paragraph (2)(A), by inserting before the 
                period at the end the following: ``and excluding certain 
                complex rehabilitative power wheelchairs recognized by 
                the Secretary as classified within group 3 or higher 
                (and related

[[Page 122 STAT. 2563]]

                accessories when furnished in connection with such 
                wheelchairs)''.
            (2) Budget neutral offset.--
                    (A) In general.--Section 1834(a)(14) of such Act (42 
                U.S.C. 1395m(a)(14)) is amended--
                          (i) by striking ``and'' at the end of 
                      subparagraphs (H) and (I);
                          (ii) by redesignating subparagraph (J) as 
                      subparagraph (M); and
                          (iii) by inserting after subparagraph (I) the 
                      following new subparagraphs:
                    ``(J) for 2009--
                          ``(i) in the case of items and services 
                      furnished in any geographic area, if such items or 
                      services were selected for competitive acquisition 
                      in any area under the competitive acquisition 
                      program under section 1847(a)(1)(B)(i)(I) before 
                      July 1, 2008, including related accessories but 
                      only if furnished with such items and services 
                      selected for such competition and diabetic 
                      supplies but only if furnished through mail order, 
                      - 9.5 percent; or
                          ``(ii) in the case of other items and 
                      services, the percentage increase in the consumer 
                      price index for all urban consumers (U.S. urban 
                      average) for the 12-month period ending with June 
                      2008;
                    ``(K) for 2010, 2011, 2012, and 2013, the percentage 
                increase in the consumer price index for all urban 
                consumers (U.S. urban average) for the 12-month period 
                ending with June of the previous year;
                    ``(L) for 2014--
                          ``(i) in the case of items and services 
                      described in subparagraph (J)(i) for which a 
                      payment adjustment has not been made under 
                      subsection (a)(1)(F)(ii) in any previous year, the 
                      percentage increase in the consumer price index 
                      for all urban consumers (U.S. urban average) for 
                      the 12-month period ending with June 2013, plus 
                      2.0 percentage points; or
                          ``(ii) in the case of other items and 
                      services, the percentage increase in the consumer 
                      price index for all urban consumers (U.S. urban 
                      average) for the 12-month period ending with June 
                      2013; and''.
                    (B) <<NOTE: Applicability.>>  Conforming treatment 
                for certain items and services.--The second sentence of 
                section 1842(s)(1) of such Act (42 U.S.C. 1395u(s)(1)) 
                is amended by striking ``except that'' and all that 
                follows and inserting the following: ``except that for 
                items and services described in paragraph (2)(D)--
            ``(A) for 2009 section 1834(a)(14)(J)(i) shall apply under 
        this paragraph instead of the percentage increase otherwise 
        applicable; and
            ``(B) for 2014, if subparagraph (A) is applied to the items 
        and services and there has not been a payment adjustment under 
        paragraph (3)(B) for the items and services for any previous 
        year, the percentage increase computed under section 
        1834(a)(14)(L)(i) shall apply instead of the percentage increase 
        otherwise applicable.''.

[[Page 122 STAT. 2564]]

            (3) Conforming delay.--Subsections (a)(1)(F) and (h)(1)(H) 
        of section 1834 of the Social Security Act (42 U.S.C. 1395m) are 
        each amended by striking ``January 1, 2009'' and inserting 
        ``January 1, 2011''.
            (4) Considerations in application.--Section 1834 of such Act 
        (42 U.S.C. 1395m) is amended--
                    (A) in subsection (a)(1)--
                          (i) in subparagraph (F), by inserting 
                      ``subject to subparagraph (G),'' before ``that are 
                      included''; and
                          (ii) by adding at the end the following new 
                      subparagraph:
                    ``(G) Use of information on competitive bid rates.--
                The Secretary <<NOTE: Regulations.>> shall specify by 
                regulation the methodology to be used in applying the 
                provisions of subparagraph (F)(ii) and subsection 
                (h)(1)(H)(ii). In promulgating such regulation, the 
                Secretary shall consider the costs of items and services 
                in areas in which such provisions would be applied 
                compared to the payment rates for such items and 
                services in competitive acquisition areas.''; and
                    (B) in subsection (h)(1)(H), by inserting ``subject 
                to subsection (a)(1)(G),'' before ``that are included''.

    (b) Quality Standards.--
            (1) Application of accreditation requirement.--
                    (A) In general.--Section 1834(a)(20) of the Social 
                Security Act (42 U.S.C. 1395m(a)(20)) is amended--
                          (i) in subparagraph (E), by inserting 
                      ``including subparagraph (F),'' after ``under this 
                      paragraph,''; and
                          (ii) by adding at the end the following new 
                      subparagraph:
                    ``(F) Application of accreditation requirement.--In 
                implementing quality standards under this paragraph--
                          ``(i) <<NOTE: Effective date.>> subject to 
                      clause (ii), the Secretary shall require suppliers 
                      furnishing items and services described in 
                      subparagraph (D) on or after October 1, 2009, 
                      directly or as a subcontractor for another entity, 
                      to have submitted to the Secretary evidence of 
                      accreditation by an accreditation organization 
                      designated under subparagraph (B) as meeting 
                      applicable quality standards; and
                          ``(ii) in applying such standards and the 
                      accreditation requirement of clause (i) with 
                      respect to eligible professionals (as defined in 
                      section 1848(k)(3)(B)), and including such other 
                      persons, such as orthotists and prosthetists, as 
                      specified by the Secretary, furnishing such items 
                      and services--
                                    ``(I) such standards and 
                                accreditation requirement shall not 
                                apply to such professionals and persons 
                                unless the Secretary determines that the 
                                standards being applied are designed 
                                specifically to be applied to such 
                                professionals and persons; and
                                    ``(II) the Secretary may exempt such 
                                professionals and persons from such 
                                standards and requirement if the 
                                Secretary determines that licensing, 
                                accreditation, or other mandatory 
                                quality

[[Page 122 STAT. 2565]]

                                requirements apply to such professionals 
                                and persons with respect to the 
                                furnishing of such items and 
                                services.''.
                    (B) <<NOTE: 42 USC 1395m note.>>  Construction.--
                Section 1834(a)(20)(F)(ii) of the Social Security Act, 
                as added by subparagraph (A), shall not be construed as 
                preventing the Secretary of Health and Human Services 
                from implementing the first round of competition under 
                section 1847 of such Act on a timely basis.
            (2) Disclosure of subcontractors under competitive 
        acquisition program.--Section 1847(b)(3) of such Act (42 U.S.C. 
        1395w-3(b)(3)) is amended by adding at the end the following new 
        subparagraph:
                    ``(C) Disclosure of subcontractors.--
                          ``(i) Initial 
                      disclosure. <<NOTE: Deadline.>> --Not later than 
                      10 days after the date a supplier enters into a 
                      contract with the Secretary under this section, 
                      such supplier shall disclose to the Secretary, in 
                      a form and manner specified by the Secretary, the 
                      information on--
                                    ``(I) each subcontracting 
                                relationship that such supplier has in 
                                furnishing items and services under the 
                                contract; and
                                    ``(II) whether each such 
                                subcontractor meets the requirement of 
                                section 1834(a)(20)(F)(i), if applicable 
                                to such subcontractor.
                          ``(ii) Subsequent disclosure.--Not later than 
                      10 days after such a supplier subsequently enters 
                      into a subcontracting relationship described in 
                      clause (i)(II), such supplier shall disclose to 
                      the Secretary, in such form and manner, the 
                      information described in subclauses (I) and (II) 
                      of clause (i).''.
            (3) Competitive acquisition ombudsman.--Such section is 
        further amended by adding at the end the following new 
        subsection:

    ``(f) <<NOTE: Establishment.>>  Competitive Acquisition Ombudsman.--
The Secretary shall provide for a competitive acquisition ombudsman 
within the Centers for Medicare & Medicaid Services in order to respond 
to complaints and inquiries made by suppliers and individuals relating 
to the application of the competitive acquisition program under this 
section. The ombudsman may be within the office of the Medicare 
Beneficiary Ombudsman appointed under section 
1808(c). <<NOTE: Reports.>> The ombudsman shall submit to Congress an 
annual report on the activities under this subsection, which report 
shall be coordinated with the report provided under section 
1808(c)(2)(C).''.

    (c) Change in Reports and Deadlines.--
            (1) GAO report.--Section 302(b)(3) of the Medicare 
        Prescription Drug, Improvement, and Modernization Act of 2003 
        (Public Law 108-173) <<NOTE: 42 USC 1395w-3 note.>> is amended--
                    (A) in subparagraph (A)--
                          (i) by inserting ``and as amended by section 2 
                      of the Medicare DMEPOS Competitive Acquisition 
                      Reform Act of 2008'' after ``as amended by 
                      paragraph (1)''; and
                          (ii) by inserting before the period at the end 
                      the following: ``and the topics specified in 
                      subparagraph (C)'';

[[Page 122 STAT. 2566]]

                    (B) in subparagraph (B), by striking ``Not later 
                than January 1, 2009,'' and inserting ``Not later than 1 
                year after the first date that payments are made under 
                section 1847 of the Social Security Act,''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(C) Topics.--The topics specified in this 
                subparagraph, for the study under subparagraph (A) 
                concerning the competitive acquisition program, are the 
                following:
                          ``(i) Beneficiary access to items and services 
                      under the program, including the impact on such 
                      access of awarding contracts to bidders that--
                                    ``(I) did not have a physical 
                                presence in an area where they received 
                                a contract; or
                                    ``(II) had no previous experience 
                                providing the product category they were 
                                contracted to provide.
                          ``(ii) Beneficiary satisfaction with the 
                      program and cost savings to beneficiaries under 
                      the program.
                          ``(iii) Costs to suppliers of participating in 
                      the program and recommendations about ways to 
                      reduce those costs without compromising quality 
                      standards or savings to the Medicare program.
                          ``(iv) Impact of the program on small business 
                      suppliers.
                          ``(v) Analysis of the impact on utilization of 
                      different items and services paid within the same 
                      Healthcare Common Procedure Coding System (HCPCS) 
                      code.
                          ``(vi) Costs to the Centers for Medicare & 
                      Medicaid Services, including payments made to 
                      contractors, for administering the program 
                      compared with administration of a fee schedule, in 
                      comparison with the relative savings of the 
                      program.
                          ``(vii) Impact on access, Medicare spending, 
                      and beneficiary spending of any difference in 
                      treatment for diabetic testing supplies depending 
                      on how such supplies are furnished.
                          ``(viii) Such other topics as the Comptroller 
                      General determines to be appropriate.''.
            (2) Delay in other deadlines.--
                    (A) Program advisory and oversight committee.--
                Section 1847(c)(5) of the Social Security Act (42 U.S.C. 
                1395w-3(c)(5)) is amended by striking ``December 31, 
                2009'' and inserting ``December 31, 2011''.
                    (B) Secretarial report.--Section 1847(d) of such Act 
                (42 U.S.C. 1395w-3(d)) is amended by striking ``July 1, 
                2009'' and inserting ``July 1, 2011''.
                    (C) IG report.--Section 302(e) of the Medicare 
                Prescription Drug, Improvement, and Modernization Act of 
                2003 (Public Law 108-173) <<NOTE: 42 USC 1395w-3 
                note.>> is amended by striking ``July 1, 2009'' and 
                inserting ``July 1, 2011''.
            (3) <<NOTE: 42 USC 1395m note.>>  Evaluation of certain 
        code.--The Secretary of Health and Human Services shall evaluate 
        the existing Health Care Common Procedure Coding System (HCPCS) 
        codes for negative pressure wound therapy to ensure accurate 
        reporting and billing for items and services under such codes. 
        In carrying out such evaluation, the Secretary shall use an 
        existing process,

[[Page 122 STAT. 2567]]

        administered by the Durable Medical Equipment Medicare 
        Administrative Contractors, for the consideration of coding 
        changes and consider all relevant studies and information 
        furnished pursuant to such process.

    (d) Other Provisions.--
            (1) Exemption from competitive acquisition for certain off-
        the-shelf orthotics.--Section 1847(a) of the Social Security Act 
        (42 U.S.C. 1395w-3(a)) is amended by adding at the end the 
        following new paragraph:
            ``(7) Exemption from competitive acquisition.--The programs 
        under this section shall not apply to the following:
                    ``(A) Certain off-the-shelf orthotics.--Items and 
                services described in paragraph (2)(C) if furnished--
                          ``(i) by a physician or other practitioner (as 
                      defined by the Secretary) to the physician's or 
                      practitioner's own patients as part of the 
                      physician's or practitioner's professional 
                      service; or
                          ``(ii) by a hospital to the hospital's own 
                      patients during an admission or on the date of 
                      discharge.
                    ``(B) Certain durable medical equipment.--Those 
                items and services described in paragraph (2)(A)--
                          ``(i) that are furnished by a hospital to the 
                      hospital's own patients during an admission or on 
                      the date of discharge; and
                          ``(ii) to which such programs would not apply, 
                      as specified by the Secretary, if furnished by a 
                      physician to the physician's own patients as part 
                      of the physician's professional service.''.
            (2) Correction in face-to-face examination requirement.--
        Section 1834(a)(1)(E)(ii) of such Act (42 U.S.C. 
        1395m(a)(1)(E)(ii)) is amended by striking ``1861(r)(1)'' and 
        inserting ``1861(r)''.
            (3) Special rule in case of national mail-order competition 
        for diabetic testing strips.--Section 1847(b) of such Act (42 
        U.S.C. 1395w-3(b)) is amended--
                    (A) by redesignating paragraph (10) as paragraph 
                (11); and
                    (B) by inserting after paragraph (9) the following 
                new paragraph:
            ``(10) Special rule in case of competition for diabetic 
        testing strips.--
                    ``(A) In general.--With respect to the competitive 
                acquisition program for diabetic testing strips 
                conducted after the first round of the competitive 
                acquisition programs, if an entity does not demonstrate 
                to the Secretary that its bid covers types of diabetic 
                testing strip products that, in the aggregate and taking 
                into account volume for the different products, cover 50 
                percent (or such higher percentage as the Secretary may 
                specify) of all such types of products, the Secretary 
                shall reject such bid. The volume for such types of 
                products may be determined in accordance with such data 
                (which may be market based data) as the Secretary 
                recognizes.
                    ``(B) Study of types of testing strip products.--
                Before 2011, <<NOTE: Deadline.>> the Inspector General 
                of the Department of Health and Human Services shall 
                conduct a study to determine the types of diabetic 
                testing strip products by volume

[[Page 122 STAT. 2568]]

                that could be used to make determinations pursuant to 
                subparagraph (A) for the first competition under the 
                competitive acquisition program described in such 
                subparagraph and submit to the Secretary a report on the 
                results of the study. <<NOTE: Reports.>> The Inspector 
                General shall also conduct such a study and submit such 
                a report before the Secretary conducts a subsequent 
                competitive acquistion program described in subparagraph 
                (A).''.
            (4) Other conforming amendments.--Section 1847(b)(11) of 
        such Act, as redesignated by paragraph (3), is amended--
                    (A) in subparagraph (C), by inserting ``and the 
                identification of areas under subsection 
                (a)(1)(D)(iii)'' after ``(a)(1)(A)'';
                    (B) in subparagraph (D), by inserting ``and 
                implementation of subsection (a)(1)(D)'' after 
                ``(a)(1)(B)'';
                    (C) in subparagraph (E), by striking ``or'' at the 
                end;
                    (D) in subparagraph (F), by striking the period at 
                the end and inserting ``; or''; and
                    (E) by adding at the end the following new 
                subparagraph:
                    ``(G) the implementation of the special rule 
                described in paragraph (10).''.
            (5) Funding for implementation.--In addition to funds 
        otherwise available, for purposes of implementing the provisions 
        of, and amendments made by, this section, other than the 
        amendment made by subsection (c)(1) and other than section 
        1847(a)(1)(E) of the Social Security Act, the Secretary of 
        Health and Human Services shall provide for the transfer from 
        the Federal Supplementary Medical Insurance Trust Fund 
        established under section 1841 of the Social Security Act (42 
        U.S.C. 1395t) to the Centers for Medicare & Medicaid Services 
        Program Management Account of $20,000,000 for fiscal year 2008, 
        and $25,000,000 for each of fiscal years 2009 through 2012. 
        Amounts transferred under this paragraph for a fiscal year shall 
        be available until expended.

    (e) <<NOTE: 42 USC 1395m note.>>  Effective Date.--The amendments 
made by this section shall take effect as of June 30, 2008.

                Subtitle D--Provisions Relating to Part C

SEC. 161. PHASE-OUT OF INDIRECT MEDICAL EDUCATION (IME).

    (a) In General.--Section 1853(k) of the Social Security Act (42 
U.S.C. 1395w-23(k)) is amended--
            (1) in paragraph (1), in the matter preceding subparagraph 
        (A), by striking ``paragraph (2)'' and inserting ``paragraphs 
        (2) and (4)''; and
            (2) by adding at the end the following new paragraph:
            ``(4) Phase-out of the indirect costs of medical education 
        from capitation rates.--
                    ``(A) In general.--After determining the applicable 
                amount for an area for a year under paragraph (1) 
                (beginning with 2010), the Secretary shall adjust such 
                applicable amount to exclude from such applicable amount 
                the phase-in percentage (as defined in subparagraph 
                (B)(i)) for the year of the Secretary's estimate of the 
                standardized costs for payments under section 
                1886(d)(5)(B) in the area for

[[Page 122 STAT. 2569]]

                the year. Any adjustment under the preceding sentence 
                shall be made prior to the application of paragraph (2).
                    ``(B) Percentages defined.--For purposes of this 
                paragraph:
                          ``(i) Phase-in percentage.--The term `phase-in 
                      percentage' means, for an area for a year, the 
                      ratio (expressed as a percentage, but in no case 
                      greater than 100 percent) of--
                                    ``(I) the maximum cumulative 
                                adjustment percentage for the year (as 
                                defined in clause (ii)); to
                                    ``(II) the standardized IME cost 
                                percentage (as defined in clause (iii)) 
                                for the area and year.
                          ``(ii) Maximum cumulative adjustment 
                      percentage.--The term `maximum cumulative 
                      adjustment percentage' means, for--
                                    ``(I) 2010, 0.60 percent; and
                                    ``(II) a subsequent year, the 
                                maximum cumulative adjustment percentage 
                                for the previous year increased by 0.60 
                                percentage points.
                          ``(iii) Standardized ime cost percentage.--The 
                      term `standardized IME cost percentage' means, for 
                      an area for a year, the per capita costs for 
                      payments under section 1886(d)(5)(B) (expressed as 
                      a percentage of the fee-for-service amount 
                      specified in subparagraph (C)) for the area and 
                      the year.
                    ``(C) Fee-for-service amount.--The fee-for-service 
                amount specified in this subparagraph for an area for a 
                year is the amount specified under subsection (c)(1)(D) 
                for the area and the year.''.

    (b) Excluding Adjustment From the Update.--Section 1853(k)(1)(B)(i) 
of the Social Security Act (42 U.S.C. 1395w-23(k)(1)(B)(i)) is amended 
by striking ``paragraph (2)'' and inserting ``paragraphs (2) and (4)''.
    (c) Hold Harmless for PACE Program Payments.--Section 1894(d) of the 
Social Security Act (42 U.S.C. 1395eee(d)) is amended by adding at the 
end the following new paragraph:
            ``(3) Capitation rates determined without regard to the 
        phase-out of the indirect costs of medical education from the 
        annual medicare advantage capitation rate.--Capitation amounts 
        under this subsection shall be determined without regard to the 
        application of section 1853(k)(4).''.
SEC. 162. REVISIONS TO REQUIREMENTS FOR MEDICARE ADVANTAGE PRIVATE 
                        FEE-FOR-SERVICE PLANS.

    (a) Requirements To Assure Access to Network Coverage.--
            (1) Individual market.--Section 1852(d) of the Social 
        Security Act (42 U.S.C. 1395w-22(d)) is amended--
                    (A) in paragraph (4), in the second sentence, by 
                striking ``The Secretary'' and inserting ``Subject to 
                paragraph (5), the Secretary''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(5) Requirement of certain nonemployer medicare advantage 
        private fee-for-service plans to use contracts with providers.--

[[Page 122 STAT. 2570]]

                    ``(A) In general.--For plan year 2011 and subsequent 
                plan years, in the case of a Medicare Advantage private 
                fee-for-service plan not described in paragraph (1) or 
                (2) of section 1857(i) operating in a network area (as 
                defined in subparagraph (B)), the plan shall meet the 
                access standards under paragraph (4) in that area only 
                through entering into written contracts as provided for 
                under subparagraph (B) of such paragraph and not, in 
                whole or in part, through the establishment of payment 
                rates meeting the requirements under subparagraph (A) of 
                such paragraph.
                    ``(B) Network area defined.--For purposes of 
                subparagraph (A), the term `network area' means, for a 
                plan year, an area which the Secretary identifies (in 
                the Secretary's announcement of the proposed payment 
                rates for the previous plan year under section 
                1853(b)(1)(B)) as having at least 2 network-based plans 
                (as defined in subparagraph (C)) with enrollment under 
                this part as of the first day of the year in which such 
                announcement is made.
                    ``(C) Network-based plan defined.--
                          ``(i) In general.--For purposes of 
                      subparagraph (B), the term `network-based plan' 
                      means--
                                    ``(I) except as provided in clause 
                                (ii), a Medicare Advantage plan that is 
                                a coordinated care plan described in 
                                section 1851(a)(2)(A)(i);
                                    ``(II) a network-based MSA plan; and
                                    ``(III) a reasonable cost 
                                reimbursement plan under section 1876.
                          ``(ii) Exclusion of non-network regional 
                      ppos.--The term `network-based plan' shall not 
                      include an MA regional plan that, with respect to 
                      the area, meets access adequacy standards under 
                      this part substantially through the authority of 
                      section 422.112(a)(1)(ii) of title 42, Code of 
                      Federal Regulations, rather than through written 
                      contracts.''.
            (2) Employer plans.--Section 1852(d) of the Social Security 
        Act (42 U.S.C. 1395w-22(d)), as amended by paragraph (1), is 
        amended--
                    (A) in paragraph (4), in the second sentence, by 
                striking ``paragraph (5)'' and inserting ``paragraphs 
                (5) and (6)''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(6) Requirement of all employer medicare advantage private 
        fee-for-service plans to use contracts with providers.--For plan 
        year 2011 and subsequent plan years, in the case of a Medicare 
        Advantage private fee-for-service plan that is described in 
        paragraph (1) or (2) of section 1857(i), the plan shall meet the 
        access standards under paragraph (4) only through entering into 
        written contracts as provided for under subparagraph (B) of such 
        paragraph and not, in whole or in part, through the 
        establishment of payment rates meeting the requirements under 
        subparagraph (A) of such paragraph.''.
            (3) Access requirements.--
                    (A) In general.--Section 1852(d)(4)(B) of the Social 
                Security Act (42 U.S.C. 1395w-22(d)(4)(B)) is amended by

[[Page 122 STAT. 2571]]

                striking ``a sufficient number'' through ``terms of the 
                plan'' and inserting ``a sufficient number and range of 
                providers within such category to meet the access 
                standards in subparagraphs (A) through (E) of paragraph 
                (1)''.
                    (B) <<NOTE: 42 USC 1395w-22 note.>>  Effective 
                date.--The amendment made by subparagraph (A) shall 
                apply to plan year 2010 and subsequent plan years.

    (b) Clarification Regarding Utilization.--Section 1859(b)(2) of the 
Social Security Act (42 U.S.C. 1395w-28(b)(2)) is amended by adding at 
the end the following flush sentence:
        ``Nothing in subparagraph (B) shall be construed to preclude a 
        plan from varying rates for such a provider based on the 
        specialty of the provider, the location of the provider, or 
        other factors related to such provider that are not related to 
        utilization, or to preclude a plan from increasing rates for 
        such a provider based on increased utilization of specified 
        preventive or screening services.''.
SEC. 163. REVISIONS TO QUALITY IMPROVEMENT PROGRAMS.

    (a) Requirement for MA Private Fee-for-Service and MSA Plans To Have 
a Quality Improvement Program.--Section 1852(e)(1) of the Social 
Security Act (42 U.S.C. 1395w-22(e)(1)) is amended by striking ``(other 
than an MA private fee-for-service plan or an MSA plan)''.
    (b) Data Collection Requirements for MA Regional Plans, MA Private 
Fee-for-Service Plans, and MSA Plans.--Section 1852(e)(3)(A) of the 
Social Security Act (42 U.S.C. 1395w-22(e)(3)(A)) is amended--
            (1) in clause (i), by adding at the end the following new 
        sentence: ``With respect to MA private fee-for-service plans and 
        MSA plans, the requirements under the preceding sentence may not 
        exceed the requirements under this subparagraph with respect to 
        MA local plans that are preferred provider organization plans, 
        except that, for plan year 2010, the limitation under clause 
        (iii) shall not apply and such requirements shall apply only 
        with respect to administrative claims data.''
            (2) by striking clause (ii); and
            (3) in clause (iii)--
                    (A) in the heading--
                          (i) by inserting ``local'' after ``to''; and
                          (ii) by inserting ``and ma regional plans'' 
                      after ``organizations''; and
                    (B) by inserting ``and to MA regional plans'' after 
                ``organization plans''.

    (c) <<NOTE: 42 USC 1395w-22 note.>>  Effective Date.--The amendments 
made by this section shall apply to plan years beginning on or after 
January 1, 2010.
SEC. 164. REVISIONS RELATING TO SPECIALIZED MEDICARE ADVANTAGE 
                        PLANS FOR SPECIAL NEEDS INDIVIDUALS.

    (a) Extension of Authority To Restrict Enrollment.--Section 1859(f) 
of the Social Security Act (42 U.S.C. 1395w-28(f)), as amended by 
section 108(a) of the Medicare, Medicaid, and SCHIP Extension Act of 
2007 (Public Law 110-173) is amended by striking ``2010'' and inserting 
``2011''.
    (b) <<NOTE: 42 USC 1395w-21 note.>>  Moratorium on Authority To 
Designate Other Plans as Specialized MA Plans.-- <<NOTE: Time 
period.>> During the period beginning on January 1, 2010, and ending on 
December 31, 2010, the Secretary of Health and Human Services may not 
exercise the authority

[[Page 122 STAT. 2572]]

provided under section 231(d) of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003 (42 U.S.C. 1395w-21 note) to 
designate other plans as specialized MA plans for special needs 
individuals.

    (c) Requirements for Enrollment.--
            (1) In general.--Section 1859 of the Social Security Act (42 
        U.S.C. 1395w-28) is amended--
                    (A) in subsection (b)(6)(A), by inserting ``and 
                that, as of January 1, 2010, meets the applicable 
                requirements of paragraph (2), (3), or (4) of subsection 
                (f), as the case may be'' before the period at the end; 
                and
                    (B) in subsection (f)--
                          (i) by amending the heading to read as 
                      follows: ``Requirements Regarding Enrollment in 
                      Specialized MA Plans for Special Needs 
                      Individuals'';
                          (ii) by designating the sentence beginning 
                      ``In the case of'' as paragraph (1) with the 
                      heading ``Requirements for enrollment.--'' and 
                      with appropriate indentation; and
                          (iii) by adding at the end the following new 
                      paragraphs:
            ``(2) Additional requirements for institutional snps.--In 
        the case of a specialized MA plan for special needs individuals 
        described in subsection (b)(6)(B)(i), the applicable 
        requirements described in this paragraph are as follows:
                    ``(A) <<NOTE: Effective date.>> Each individual that 
                enrolls in the plan on or after January 1, 2010, is a 
                special needs individuals described in subsection 
                (b)(6)(B)(i). In the case of an individual who is living 
                in the community but requires an institutional level of 
                care, such individual shall not be considered a special 
                needs individual described in subsection (b)(6)(B)(i) 
                unless the determination that the individual requires an 
                institutional level of care was made--
                          ``(i) using a State assessment tool of the 
                      State in which the individual resides; and
                          ``(ii) by an entity other than the 
                      organization offering the plan.
                    ``(B) The plan meets the requirements described in 
                paragraph (5).
            ``(3) Additional requirements for dual snps.--In the case of 
        a specialized MA plan for special needs individuals described in 
        subsection (b)(6)(B)(ii), the applicable requirements described 
        in this paragraph are as follows:
                    ``(A) <<NOTE: Effective date.>> Each individual that 
                enrolls in the plan on or after January 1, 2010, is a 
                special needs individuals described in subsection 
                (b)(6)(B)(ii).
                    ``(B) The plan meets the requirements described in 
                paragraph (5).
                    ``(C) The plan provides each prospective enrollee, 
                prior to enrollment, with a comprehensive written 
                statement (using standardized content and format 
                established by the Secretary) that describes--
                          ``(i) the benefits and cost-sharing 
                      protections that the individual is entitled to 
                      under the State Medicaid program under title XIX; 
                      and
                          ``(ii) which of such benefits and cost-sharing 
                      protections are covered under the plan.

[[Page 122 STAT. 2573]]

                Such statement shall be included with any description of 
                benefits offered by the plan.
                    ``(D) The plan has a contract with the State 
                Medicaid agency to provide benefits, or arrange for 
                benefits to be provided, for which such individual is 
                entitled to receive as medical assistance under title 
                XIX. Such benefits may include long-term care services 
                consistent with State policy.
            ``(4) Additional requirements for severe or disabling 
        chronic condition snps.--In the case of a specialized MA plan 
        for special needs individuals described in subsection 
        (b)(6)(B)(iii), the applicable requirements described in this 
        paragraph are as follows:
                    ``(A) <<NOTE: Effective date.>> Each individual that 
                enrolls in the plan on or after January 1, 2010, is a 
                special needs individual described in subsection 
                (b)(6)(B)(iii).
                    ``(B) The plan meets the requirements described in 
                paragraph (5).''.
            (2) <<NOTE: 42 USC 1395w-28 note.>>  Authority to operate 
        but no service area expansion for dual snps that do not meet 
        certain requirements.-- <<NOTE: Time period.>> Notwithstanding 
        subsection (f) of section 1859 of the Social Security Act (42 
        U.S.C. 1395w-28), during the period beginning on January 1, 
        2010, and ending on December 31, 2010, in the case of a 
        specialized Medicare Advantage plan for special needs 
        individuals described in subsection (b)(6)(B)(ii) of such 
        section, as amended by this section, that does not meet the 
        requirement described in subsection (f)(3)(D) of such section, 
        the Secretary of Health and Human Services--
                    (A) shall permit such plan to be offered under part 
                C of title XVIII of such Act; and
                    (B) shall not permit an expansion of the service 
                area of the plan under such part C.
            (3) Resources for state medicaid agencies.--The Secretary of 
        Health and Human Services shall provide for the designation of 
        appropriate staff and resources that can address State inquiries 
        with respect to the coordination of State and Federal policies 
        for specialized MA plans for special needs individuals described 
        in section 1859(b)(6)(B)(ii) of the Social Security Act (42 
        U.S.C. 1395w-28(b)(6)(B)(ii)), as amended by this section.
            (4) No requirement for contract.--Nothing in the provisions 
        of, or amendments made by, this subsection shall require a State 
        to enter into a contract with a Medicare Advantage organization 
        with respect to a specialized MA plan for special needs 
        individuals described in section 1859(b)(6)(B)(ii) of the Social 
        Security Act (42 U.S.C. 1395w-28(b)(6)(B)(ii)), as amended by 
        this section.

    (d) Care Management Requirements for All SNPs.--
            (1) Requirements.--Section 1859(f) of the Social Security 
        Act (42 U.S.C. 1395w-28(f)), as amended by subsection (c)(1), is 
        amended by adding at the end the following new paragraph:
            ``(5) Care management requirements for all snps.--The 
        requirements described in this paragraph are that the 
        organization offering a specialized MA plan for special needs 
        individuals described in subsection (b)(6)(B)(i)--
                    ``(A) have in place an evidenced-based model of care 
                with appropriate networks of providers and specialists; 
                and

[[Page 122 STAT. 2574]]

                    ``(B) with respect to each individual enrolled in 
                the plan--
                          ``(i) conduct an initial assessment and an 
                      annual reassessment of the individual's physical, 
                      psychosocial, and functional needs;
                          ``(ii) develop a plan, in consultation with 
                      the individual as feasible, that identifies goals 
                      and objectives, including measurable outcomes as 
                      well as specific services and benefits to be 
                      provided; and
                          ``(iii) use an interdisciplinary team in the 
                      management of care.''.
            (2) Review to ensure compliance with care management 
        requirements.--Section 1857(d) of the Social Security Act (42 
        U.S.C. 1395w-27(d)) is amended by adding at the end the 
        following new paragraph:
            ``(6) Review to ensure compliance with care management 
        requirements for specialized medicare advantage plans for 
        special needs individuals.--In conjunction with the periodic 
        audit of a specialized Medicare Advantage plan for special needs 
        individuals under paragraph (1), the Secretary shall conduct a 
        review to ensure that such organization offering the plan meets 
        the requirements described in section 1859(f)(5).''.

    (e) Clarification of the Definition of a Severe or Disabling Chronic 
Conditions Specialized Needs Individual.--
            (1) In general.--Section 1859(b)(6)(B)(iii) of the Social 
        Security Act (42 U.S.C. 1395w-28(b)(6)(B)(iii)) is amended by 
        inserting ``who have one or more comorbid and medically complex 
        chronic conditions that are substantially disabling or life 
        threatening, have a high risk of hospitalization or other 
        significant adverse health outcomes, and require specialized 
        delivery systems across domains of care'' before the period at 
        the end.
            (2) <<NOTE: Establishment.>>  Panel.--The Secretary of 
        Health and Human Services shall convene a panel of clinical 
        advisors to determine the conditions that meet the definition of 
        severe and disabling chronic conditions under section 
        1859(b)(6)(B)(iii) of the Social Security Act (42 U.S.C. 1395w-
        28(b)(6)(B)(iii)), as amended by paragraph (1). The panel shall 
        include the Director of the Agency for Healthcare Research and 
        Quality (or the Director's designee).

    (f) Special Requirements Regarding Quality Reporting for Specialized 
MA Plans for Special Needs Individuals.--
            (1) In general.--Section 1852(e)(3)(A) of the Social 
        Security Act (42 U.S.C. 1395w-22(e)(3)(A)), as amended by 
        section 163, is amended by inserting after clause (i) the 
        following new clause:
                          ``(ii) Special requirements for specialized ma 
                      plans for special needs individuals.--In addition 
                      to the data required to be collected, analyzed, 
                      and reported under clause (i) and notwithstanding 
                      the limitations under subparagraph (B), as part of 
                      the quality improvement program under paragraph 
                      (1), each MA organization offering a specialized 
                      Medicare Advantage plan for special needs 
                      individuals shall provide for the collection, 
                      analysis, and reporting of data that permits the 
                      measurement of health outcomes and

[[Page 122 STAT. 2575]]

                      other indices of quality with respect to the 
                      requirements described in paragraphs (2) through 
                      (5) of subsection (f). Such data may be based on 
                      claims data and shall be at the plan level.''.
            (2) <<NOTE: 42 USC 1395w-22 note.>>  Effective date.--The 
        amendment made by paragraph (1) shall take effect on a date 
        specified by the Secretary of Health and Human Services (but in 
        no case later than January 1, 2010), and shall apply to all 
        specialized Medicare Advantage plans for special needs 
        individuals regardless of when the plan first entered the 
        Medicare Advantage program under part C of title XVIII of the 
        Social Security Act.

    (g) <<NOTE: 42 USC 1395w-27 note.>>  Effective Date and 
Application.--The amendments made by subsections (c)(1), (d), and (e)(1) 
shall apply to plan years beginning on or after January 1, 2010, and 
shall apply to all specialized Medicare Advantage plans for special 
needs individuals regardless of when the plan first entered the Medicare 
Advantage program under part C of title XVIII of the Social Security 
Act.

    (h) <<NOTE: 42 USC 1395w-28 note.>>  No Affect on Medicaid Benefits 
for Duals.--Nothing in the provisions of, or amendments made by, this 
section shall affect the benefits available under the Medicaid program 
under title XIX of the Social Security Act for special needs individuals 
described in section 1859(b)(6)(B)(ii) of such Act (42 U.S.C. 1395w-
28(b)(6)(B)(ii)).
SEC. 165. LIMITATION ON OUT-OF-POCKET COSTS FOR DUAL ELIGIBLES AND 
                        QUALIFIED MEDICARE BENEFICIARIES ENROLLED 
                        IN A SPECIALIZED MEDICARE ADVANTAGE PLAN 
                        FOR SPECIAL NEEDS INDIVIDUALS.

    (a) In General.--Section 1852(a) of the Social Security Act (42 
U.S.C. 1395w-22(a)) is amended by adding at the end the following new 
paragraph:
            ``(7) Limitation on cost-sharing for dual eligibles and 
        qualified medicare beneficiaries.--In the case of an individual 
        who is a full-benefit dual eligible individual (as defined in 
        section 1935(c)(6)) or a qualified medicare beneficiary (as 
        defined in section 1905(p)(1)) and who is enrolled in a 
        specialized Medicare Advantage plan for special needs 
        individuals described in section 1859(b)(6)(B)(ii), the plan may 
        not impose cost-sharing that exceeds the amount of cost-sharing 
        that would be permitted with respect to the individual under 
        title XIX if the individual were not enrolled in such plan.''.

    (b) <<NOTE: 42 USC 1395w-22 note.>>  Effective Date.--The amendment 
made by subsection (a) shall apply to plan years beginning on or after 
January 1, 2010.
SEC. 166. ADJUSTMENT TO THE MEDICARE ADVANTAGE STABILIZATION FUND.

    Section 1858(e)(2)(A)(i) of the Social Security Act (42 U.S.C. 
1395w-27a(e)(2)(A)(i)), as amended by section 110 of the Medicare, 
Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-173), is 
amended--
            (1) by striking ``2013'' and inserting ``2014''; and
            (2) by striking ``$1,790,000,000'' and inserting ``$1''.
SEC. 167. ACCESS TO MEDICARE REASONABLE COST CONTRACT PLANS.

    (a) Extension of Reasonable Cost Contracts.--Section 
1876(h)(5)(C)(ii) of the Social Security Act (42 U.S.C. 
1395mm(h)(5)(C)(ii)), as amended by section 109 of the Medicare, 
Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-

[[Page 122 STAT. 2576]]

173), is amended by striking ``January 1, 2009'' and inserting ``January 
1, 2010'' in the matter preceding subclause (I).
    (b) Requirement for at Least Two Medicare Advantage Organizations To 
Be Offering a Plan in an Area for the Prohibition To Be Applicable.--
Subclauses (I) and (II) of section 1876(h)(5)(C)(ii) of the Social 
Security Act (42 U.S.C. 1395mm(h)(5)(C)(ii)) are each amended by 
inserting ``, provided that all such plans are not offered by the same 
Medicare Advantage organization'' after ``clause (iii)''.
    (c) Revision of Requirements for a Plan That Are Used To Determine 
if Prohibition Is Applicable.--
            (1) In general.--Section 1876(h)(5)(C)(iii)(I) of the Social 
        Security Act (42 U.S.C. 1395mm(h)(5)(C)(iii)(I)) is amended by 
        inserting ``that are not in another Metropolitan Statistical 
        Area with a population of more than 250,000'' after ``such 
        Metropolitan Statistical Area''.
            (2) Clarification.--Section 1876(h)(5)(C)(iii)(I) of the 
        Social Security Act (42 U.S.C. 1395mm(h)(5)(C)(iii)(I)) is 
        amended by adding at the end the following new sentence: ``If 
        the service area includes a portion in more than 1 Metropolitan 
        Statistical Area with a population of more than 250,000, the 
        minimum enrollment determination under the preceding sentence 
        shall be made with respect to each such Metropolitan Statistical 
        Area (and such applicable contiguous counties to such 
        Metropolitan Statistical Area).''.

    (d) GAO Study and Report.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct a study of the reasons (if any) why reasonable 
        cost contracts under section 1876(h) of the Social Security Act 
        (42 U.S.C. 1395mm(h)) are unable to become Medicare Advantage 
        plans under part C of title XVIII of such Act.
            (2) Report.--Not later than December 31, 2009, the 
        Comptroller General of the United States shall submit to 
        Congress a report containing the results of the study conducted 
        under paragraph (1), together with recommendations for such 
        legislation and administrative action as the Comptroller General 
        determines appropriate.
SEC. 168. MEDPAC STUDY AND REPORT ON QUALITY MEASURES.

    (a) Study.--The Medicare Payment Advisory Commission shall conduct a 
study on how comparable measures of performance and patient experience 
can be collected and reported by 2011 for the Medicare Advantage program 
under part C of title XVIII of the Social Security Act and the original 
Medicare fee-for-service program under parts A and B of such title. Such 
study shall address technical issues, such as data requirements, in 
addition to issues relating to appropriate quality benchmarks that--
            (1) compare the quality of care Medicare beneficiaries 
        receive across Medicare Advantage plans; and
            (2) compare the quality of care Medicare beneficiaries 
        receive under Medicare Advantage plans and under the original 
        Medicare fee-for-service program.

    (b) Report.--Not later than March 31, 2010, the Medicare Payment 
Advisory Commission shall submit to Congress a report containing the 
results of the study conducted under subsection (a), together with 
recommendations for such legislation and

[[Page 122 STAT. 2577]]

administrative action as the Medicare Payment Advisory Commission 
determines appropriate.
SEC. 169. MEDPAC STUDY AND REPORT ON MEDICARE ADVANTAGE PAYMENTS.

    (a) Study.--The Medicare Payment Advisory Commission (in this 
section referred to as the ``Commission'') shall conduct a study of the 
following:
            (1) The correlation between--
                    (A) the costs that Medicare Advantage organizations 
                with respect to Medicare Advantage plans incur in 
                providing coverage under the plan for items and services 
                covered under the original Medicare fee-for-service 
                program under parts A and B of title XVIII of the Social 
                Security Act, as reflected in plan bids; and
                    (B) county-level spending under such original 
                Medicare fee-for-service program on a per capita basis, 
                as calculated by the Chief Actuary of the Centers for 
                Medicare & Medicaid Services.
        The study with respect to the issue described in the preceding 
        sentence shall include differences in correlation statistics by 
        plan type and geographic area.
            (2) Based on these results of the study with respect to the 
        issue described in paragraph (1), and other data the Commission 
        determines appropriate--
                    (A) alternate approaches to payment with respect to 
                a Medicare beneficiary enrolled in a Medicare Advantage 
                plan other than through county-level payment area 
                equivalents.
                    (B) the accuracy and completeness of county-level 
                estimates of per capita spending under such original 
                Medicare fee-for-service program (including counties in 
                Puerto Rico), as used to determine the annual Medicare 
                Advantage capitation rate under section 1853 of the 
                Social Security Act (42 U.S.C. 1395w-23), and whether 
                such estimates include--
                          (i) expenditures with respect to Medicare 
                      beneficiaries at facilities of the Department of 
                      Veterans Affairs; and
                          (ii) all appropriate administrative expenses, 
                      including claims processing.
            (3) Ways to improve the accuracy and completeness of county-
        level estimates of per capita spending described in paragraph 
        (2)(B).

    (b) Report.--Not later than March 31, 2010, the Commission shall 
submit to Congress a report containing the results of the study 
conducted under subsection (a), together with recommendations for such 
legislation and administrative action as the Commission determines 
appropriate.

[[Page 122 STAT. 2578]]

                Subtitle E--Provisions Relating to Part D

                    PART I--IMPROVING PHARMACY ACCESS

SEC. 171. PROMPT PAYMENT BY PRESCRIPTION DRUG PLANS AND MA-PD 
                        PLANS UNDER PART D.

    (a) Prompt Payment by Prescription Drug Plans.--Section 1860D-12(b) 
of the Social Security Act (42 U.S.C. 1395w-112(b)) is amended by adding 
at the end the following new paragraph:
            ``(4) Prompt payment of clean claims.--
                    ``(A) Prompt payment.--
                          ``(i) In general.--Each contract entered into 
                      with a PDP sponsor under this part with respect to 
                      a prescription drug plan offered by such sponsor 
                      shall provide that payment shall be issued, 
                      mailed, or otherwise transmitted with respect to 
                      all clean claims submitted by pharmacies (other 
                      than pharmacies that dispense drugs by mail order 
                      only or are located in, or contract with, a long-
                      term care facility) under this part within the 
                      applicable number of calendar days after the date 
                      on which the claim is received.
                          ``(ii) Clean claim defined.--In this 
                      paragraph, the term `clean claim' means a claim 
                      that has no defect or impropriety (including any 
                      lack of any required substantiating documentation) 
                      or particular circumstance requiring special 
                      treatment that prevents timely payment from being 
                      made on the claim under this part.
                          ``(iii) Date of receipt of claim.--In this 
                      paragraph, a claim is considered to have been 
                      received--
                                    ``(I) with respect to claims 
                                submitted electronically, on the date on 
                                which the claim is transferred; and
                                    ``(II) with respect to claims 
                                submitted otherwise, on the 5th day 
                                after the postmark date of the claim or 
                                the date specified in the time stamp of 
                                the transmission.
                    ``(B) Applicable number of calendar days defined.--
                In this paragraph, the term `applicable number of 
                calendar days' means--
                          ``(i) with respect to claims submitted 
                      electronically, 14 days; and
                          ``(ii) with respect to claims submitted 
                      otherwise, 30 days.
                    ``(C) Interest payment.--
                          ``(i) In general.--Subject to clause (ii), if 
                      payment is not issued, mailed, or otherwise 
                      transmitted within the applicable number of 
                      calendar days (as defined in subparagraph (B)) 
                      after a clean claim is received, the PDP sponsor 
                      shall pay interest to the pharmacy that submitted 
                      the claim at a rate equal to the weighted average 
                      of interest on 3-month marketable Treasury 
                      securities determined for such period, increased 
                      by 0.1 percentage point for the period beginning 
                      on the day after the required payment date and 
                      ending on the date on which payment is made (as

[[Page 122 STAT. 2579]]

                      determined under subparagraph (D)(iv)). Interest 
                      amounts paid under this subparagraph shall not be 
                      counted against the administrative costs of a 
                      prescription drug plan or treated as allowable 
                      risk corridor costs under section 1860D-15(e).
                          ``(ii) Authority not to charge interest.--The 
                      Secretary may provide that a PDP sponsor is not 
                      charged interest under clause (i) in the case 
                      where there are exigent circumstances, including 
                      natural disasters and other unique and unexpected 
                      events, that prevent the timely processing of 
                      claims.
                    ``(D) Procedures involving claims.--
                          ``(i) Claim deemed to be 
                      clean. <<NOTE: Notice. Deadlines.>> --A claim is 
                      deemed to be a clean claim if the PDP sponsor 
                      involved does not provide notice to the claimant 
                      of any deficiency in the claim--
                                    ``(I) with respect to claims 
                                submitted electronically, within 10 days 
                                after the date on which the claim is 
                                received; and
                                    ``(II) with respect to claims 
                                submitted otherwise, within 15 days 
                                after the date on which the claim is 
                                received.
                          ``(ii) <<NOTE: Deadlines.>>  Claim determined 
                      to not be a clean claim.--
                                    ``(I) In general.-- 
                                <<NOTE: Notice.>> If a PDP sponsor 
                                determines that a submitted claim is not 
                                a clean claim, the PDP sponsor shall, 
                                not later than the end of the period 
                                described in clause (i), notify the 
                                claimant of such determination. Such 
                                notification shall specify all defects 
                                or improprieties in the claim and shall 
                                list all additional information or 
                                documents necessary for the proper 
                                processing and payment of the claim.
                                    ``(II) Determination after 
                                submission of additional information.--A 
                                claim is deemed to be a clean claim 
                                under this paragraph if the PDP sponsor 
                                involved does not provide notice to the 
                                claimant of any defect or impropriety in 
                                the claim within 10 days of the date on 
                                which additional information is received 
                                under subclause (I).
                          ``(iii) Obligation to pay.--A claim submitted 
                      to a PDP sponsor that is not paid or contested by 
                      the sponsor within the applicable number of days 
                      (as defined in subparagraph (B)) after the date on 
                      which the claim is received shall be deemed to be 
                      a clean claim and shall be paid by the PDP sponsor 
                      in accordance with subparagraph (A).
                          ``(iv) Date of payment of claim.--Payment of a 
                      clean claim under such subparagraph is considered 
                      to have been made on the date on which--
                                    ``(I) with respect to claims paid 
                                electronically, the payment is 
                                transferred; and
                                    ``(II) with respect to claims paid 
                                otherwise, the payment is submitted to 
                                the United States Postal Service or 
                                common carrier for delivery.

[[Page 122 STAT. 2580]]

                    ``(E) Electronic transfer of funds.--A PDP sponsor 
                shall pay all clean claims submitted electronically by 
                electronic transfer of funds if the pharmacy so requests 
                or has so requested previously. In the case where such 
                payment is made electronically, remittance may be made 
                by the PDP sponsor electronically as well.
                    ``(F) Protecting the rights of claimants.--
                          ``(i) In general.--Nothing in this paragraph 
                      shall be construed to prohibit or limit a claim or 
                      action not covered by the subject matter of this 
                      section that any individual or organization has 
                      against a provider or a PDP sponsor.
                          ``(ii) Anti-retaliation.--Consistent with 
                      applicable Federal or State law, a PDP sponsor 
                      shall not retaliate against an individual or 
                      provider for exercising a right of action under 
                      this subparagraph.
                    ``(G) Rule of construction.--A determination under 
                this paragraph that a claim submitted by a pharmacy is a 
                clean claim shall not be construed as a positive 
                determination regarding eligibility for payment under 
                this title, nor is it an indication of government 
                approval of, or acquiescence regarding, the claim 
                submitted. The determination shall not relieve any party 
                of civil or criminal liability with respect to the 
                claim, nor does it offer a defense to any 
                administrative, civil, or criminal action with respect 
                to the claim.''.

    (b) Prompt Payment by MA-PD Plans.--Section 1857(f) of the Social 
Security Act (42 U.S.C. 1395w-27) is amended by adding at the end the 
following new paragraph:
            ``(3) <<NOTE: Applicability.>>  Incorporation of certain 
        prescription drug plan contract requirements.--The following 
        provisions shall apply to contracts with a Medicare Advantage 
        organization offering an MA-PD plan in the same manner as they 
        apply to contracts with a PDP sponsor offering a prescription 
        drug plan under part D:
                    ``(A) Prompt payment.--Section 1860D-12(b)(4).''.

    (c) <<NOTE: 42 USC 1395w-27 note.>>  Effective Date.--The amendments 
made by this section shall apply to plan years beginning on or after 
January 1, 2010.
SEC. 172. SUBMISSION OF CLAIMS BY PHARMACIES LOCATED IN OR 
                        CONTRACTING WITH LONG-TERM CARE 
                        FACILITIES.

    (a) Submission of Claims by Pharmacies Located in or Contracting 
With Long-Term Care Facilities.--
            (1) Submission of claims to prescription drug plans.--
        Section 1860D-12(b) of the Social Security Act (42 U.S.C. 1395w-
        112(b)), as amended by section 171(a), is amended by adding at 
        the end the following new paragraph:
            ``(5) Submission of claims by pharmacies located in or 
        contracting with long-term care facilities.-- 
        <<NOTE: Deadline.>> Each contract entered into with a PDP 
        sponsor under this part with respect to a prescription drug plan 
        offered by such sponsor shall provide that a pharmacy located 
        in, or having a contract with, a long-term care facility shall 
        have not less than 30 days (but not more than 90 days) to submit 
        claims to the sponsor for reimbursement under the plan.''.
            (2) Submission of claims to ma-pd plans.--Section 1857(f)(3) 
        of the Social Security Act, as added by section 171(b),

[[Page 122 STAT. 2581]]

        is amended by adding at the end the following new subparagraph:
                    ``(B) Submission of claims by pharmacies located in 
                or contracting with long-term care facilities.--Section 
                1860D-12(b)(5).''.

    (b) <<NOTE: 42 USC 1395w-27 note.>>  Effective Date.--The amendments 
made by this section shall apply to plan years beginning on or after 
January 1, 2010.
SEC. 173. REGULAR UPDATE OF PRESCRIPTION DRUG PRICING STANDARD.

    (a) Requirement for Prescription Drug Plans.--Section 1860D-12(b) of 
the Social Security Act (42 U.S.C. 1395w-112(b)), as amended by section 
172(a)(1), is amended by adding at the end the following new paragraph:
            ``(6) Regular update of prescription drug pricing 
        standard.--If the PDP sponsor of a prescription drug plan uses a 
        standard for reimbursement of pharmacies based on the cost of a 
        drug, each contract entered into with such sponsor under this 
        part with respect to the plan shall provide that the sponsor 
        shall update such standard not less frequently than once every 7 
        days, beginning with an initial update on January 1 of each 
        year, to accurately reflect the market price of acquiring the 
        drug.''.

    (b) Requirement for MA-PD Plans.--Section 1857(f)(3) of the Social 
Security Act, as amended by section 172(a)(2), is amended by adding at 
the end the following new subparagraph:
                    ``(C) Regular update of prescription drug pricing 
                standard.--Section 1860D-12(b)(6).''.

    (c) <<NOTE: 42 USC 1395w-27 note.>>  Effective Date.--The amendments 
made by this section shall apply to plan years beginning on or after 
January 1, 2009.

                        PART II--OTHER PROVISIONS

SEC. 175. INCLUSION OF BARBITURATES AND BENZODIAZEPINES AS COVERED 
                        PART D DRUGS.

    (a) In General.--Section 1860D-2(e)(2)(A) of the Social Security Act 
(42 U.S.C. 1395w-102(e)(2)(A)) is amended by inserting after 
``agents),'' the following ``other than subparagraph (I) of such section 
(relating to barbiturates) if the barbiturate is used in the treatment 
of epilepsy, cancer, or a chronic mental health disorder, and other than 
subparagraph (J) of such section (relating to benzodiazepines),''.
    (b) <<NOTE: 42 USC 1395w-102 note.>>  Effective Date.--The 
amendments made by subsection (a) shall apply to prescriptions dispensed 
on or after January 1, 2013.
SEC. 176. FORMULARY REQUIREMENTS WITH RESPECT TO CERTAIN 
                        CATEGORIES OR CLASSES OF DRUGS.

    Section 1860D-4(b)(3) of the Social Security Act (42 U.S.C. 1395w-
104(b)(3)) is amended--
            (1) in subparagraph (C)(i), by striking ``The formulary'' 
        and inserting ``Subject to subparagraph (G), the formulary''; 
        and
            (2) by inserting after subparagraph (F) the following new 
        subparagraph:
                    ``(G) Required inclusion of drugs in certain 
                categories and classes.--

[[Page 122 STAT. 2582]]

                          ``(i) <<NOTE: Effective date.>>  
                      Identification of drugs in certain categories and 
                      classes.--Beginning with plan year 2010, the 
                      Secretary shall identify, as appropriate, 
                      categories and classes of drugs for which both of 
                      the following criteria are met:
                                    ``(I) Restricted access to drugs in 
                                the category or class would have major 
                                or life threatening clinical 
                                consequences for individuals who have a 
                                disease or disorder treated by the drugs 
                                in such category or class.
                                    ``(II) There is significant clinical 
                                need for such individuals to have access 
                                to multiple drugs within a category or 
                                class due to unique chemical actions and 
                                pharmacological effects of the drugs 
                                within the category or class, such as 
                                drugs used in the treatment of cancer.
                          ``(ii) Formulary requirements.--Subject to 
                      clause (iii), PDP sponsors offering prescription 
                      drug plans shall be required to include all 
                      covered part D drugs in the categories and classes 
                      identified by the Secretary under clause (i).
                          ``(iii) Exceptions.--The Secretary may 
                      establish exceptions that permits a PDP sponsor of 
                      a prescription drug plan to exclude from its 
                      formulary a particular covered part D drug in a 
                      category or class that is otherwise required to be 
                      included in the formulary under clause (ii) (or to 
                      otherwise limit access to such a drug, including 
                      through prior authorization or utilization 
                      management). Any exceptions established under the 
                      preceding sentence shall be provided under a 
                      process that--
                                    ``(I) ensures that any exception to 
                                such requirement is based upon 
                                scientific evidence and medical 
                                standards of practice (and, in the case 
                                of antiretroviral medications, is 
                                consistent with the Department of Health 
                                and Human Services Guidelines for the 
                                Use of Antiretroviral Agents in HIV-1-
                                Infected Adults and Adolescents); and
                                    ``(II) includes a public notice and 
                                comment period.''.

                      Subtitle F--Other Provisions

SEC. 181. USE OF PART D DATA.

    Section 1860D-12(b)(3)(D) of the Social Security Act (42 U.S.C. 
1395w-112(b)(3)(D)) is amended by adding at the end the following 
sentence: ``Notwithstanding any other provision of law, information 
provided to the Secretary under the application of section 1857(e)(1) to 
contracts under this section under the preceding sentence--
                          ``(i) may be used for the purposes of carrying 
                      out this part, improving public health through 
                      research on the utilization, safety, 
                      effectiveness, quality, and efficiency of health 
                      care services (as the Secretary determines 
                      appropriate); and
                          ``(ii) shall be made available to 
                      Congressional support agencies (in accordance with 
                      their obligations to

[[Page 122 STAT. 2583]]

                      support Congress as set out in their authorizing 
                      statutes) for the purposes of conducting 
                      Congressional oversight, monitoring, making 
                      recommendations, and analysis of the program under 
                      this title.''.
SEC. 182. REVISION OF DEFINITION OF MEDICALLY ACCEPTED INDICATION 
                        FOR DRUGS.

    (a) Revision of Definition for Part D Drugs.--
            (1) In general.--Section 1860D-2(e)(1) of the Social 
        Security Act (42 U.S.C. 1395w-102(e)(1)) is amended, in the 
        matter following subparagraph (B)--
                    (A) by striking ``(as defined in section 
                1927(k)(6))'' and inserting ``(as defined in paragraph 
                (4))''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(4) Medically accepted indication defined.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the term `medically accepted indication' has the meaning 
                given that term--
                          ``(i) in the case of a covered part D drug 
                      used in an anticancer chemotherapeutic regimen, in 
                      section 1861(t)(2)(B), except that in applying 
                      such section--
                                    ``(I) `prescription drug plan or MA-
                                PD plan' shall be substituted for 
                                `carrier' each place it appears; and
                                    ``(II) subject to subparagraph (B), 
                                the compendia described in section 
                                1927(g)(1)(B)(i)(III) shall be included 
                                in the list of compendia described in 
                                clause (ii)(I) section 1861(t)(2)(B); 
                                and
                          ``(ii) in the case of any other covered part D 
                      drug, in section 1927(k)(6).
                    ``(B) Conflict of interest.-- <<NOTE: Effective 
                date.>> On and after January 1, 2010, subparagraph 
                (A)(i)(II) shall not apply unless the compendia 
                described in section 1927(g)(1)(B)(i)(III) meets the 
                requirement in the third sentence of section 
                1861(t)(2)(B).
                    ``(C) Update.--For purposes of applying subparagraph 
                (A)(ii), the Secretary shall revise the list of 
                compendia described in section 1927(g)(1)(B)(i) as is 
                appropriate for identifying medically accepted 
                indications for drugs. Any such revision shall be done 
                in a manner consistent with the process for revising 
                compendia under section 1861(t)(2)(B).''.
            (2) <<NOTE: 42 USC 1395w-102 note.>>  Effective date.--The 
        amendments made by this subsection shall apply to plan years 
        beginning on or after January 1, 2009.

    (b) Conflicts of Interest.--Section 1861(t)(2)(B) of the Social 
Security Act (42 U.S.C. 1395x(t)(2)(B)) is amended by adding at the end 
the following new sentence: <<NOTE: Effective date.>> ``On and after 
January 1, 2010, no compendia may be included on the list of compendia 
under this subparagraph unless the compendia has a publicly transparent 
process for evaluating therapies and for identifying potential conflicts 
of interests.''.
SEC. 183. CONTRACT WITH A CONSENSUS-BASED ENTITY REGARDING 
                        PERFORMANCE MEASUREMENT.

    (a) Contract.--

[[Page 122 STAT. 2584]]

            (1) In general.--Part E of title XVIII of the Social 
        Security Act (42 U.S.C. 1395x et seq.) is amended by inserting 
        after section 1889 the following new section:

     ``contract with a consensus-based entity regarding performance 
                               measurement

    ``Sec. 1890.  <<NOTE: 42 USC 1395aaa.>> (a) Contract.--
            ``(1) In general.--For purposes of activities conducted 
        under this Act, the Secretary shall identify and have in effect 
        a contract with a consensus-based entity, such as the National 
        Quality Forum, that meets the requirements described in 
        subsection (c). Such contract shall provide that the entity will 
        perform the duties described in subsection (b).
            ``(2) Timing for first contract.--As soon as practicable 
        after the date of the enactment of this subsection, the 
        Secretary shall enter into the first contract under paragraph 
        (1).
            ``(3) Period of contract.--A contract under paragraph (1) 
        shall be for a period of 4 years (except as may be renewed after 
        a subsequent bidding process).
            ``(4) Competitive procedures.--Competitive procedures (as 
        defined in section 4(5) of the Office of Federal Procurement 
        Policy Act (41 U.S.C. 403(5))) shall be used to enter into a 
        contract under paragraph (1).

    ``(b) Duties.--The duties described in this subsection are the 
following:
            ``(1) Priority setting process.--The entity shall synthesize 
        evidence and convene key stakeholders to make recommendations, 
        with respect to activities conducted under this Act, on an 
        integrated national strategy and priorities for health care 
        performance measurement in all applicable settings. In making 
        such recommendations, the entity shall--
                    ``(A) ensure that priority is given to measures--
                          ``(i) that address the health care provided to 
                      patients with prevalent, high-cost chronic 
                      diseases;
                          ``(ii) with the greatest potential for 
                      improving the quality, efficiency, and patient-
                      centeredness of health care; and
                          ``(iii) that may be implemented rapidly due to 
                      existing evidence, standards of care, or other 
                      reasons; and
                    ``(B) take into account measures that--
                          ``(i) may assist consumers and patients in 
                      making informed health care decisions;
                          ``(ii) address health disparities across 
                      groups and areas; and
                          ``(iii) address the continuum of care a 
                      patient receives, including services furnished by 
                      multiple health care providers or practitioners 
                      and across multiple settings.
            ``(2) Endorsement of measures.--The entity shall provide for 
        the endorsement of standardized health care performance 
        measures. The endorsement process under the preceding sentence 
        shall consider whether a measure--
                    ``(A) is evidence-based, reliable, valid, 
                verifiable, relevant to enhanced health outcomes, 
                actionable at the caregiver level, feasible to collect 
                and report, and responsive to variations in patient 
                characteristics, such as health

[[Page 122 STAT. 2585]]

                status, language capabilities, race or ethnicity, and 
                income level; and
                    ``(B) is consistent across types of health care 
                providers, including hospitals and physicians.
            ``(3) Maintenance of measures.--The entity shall establish 
        and implement a process to ensure that measures endorsed under 
        paragraph (2) are updated (or retired if obsolete) as new 
        evidence is developed.
            ``(4) Promotion of the development of electronic health 
        records.--The entity shall promote the development and use of 
        electronic health records that contain the functionality for 
        automated collection, aggregation, and transmission of 
        performance measurement information.
            ``(5) Annual report to congress and the secretary; 
        secretarial publication and comment.--
                    ``(A) Annual report.--By not later than March 1 of 
                each year (beginning with 2009), the entity shall submit 
                to Congress and the Secretary a report containing a 
                description of--
                          ``(i) the implementation of quality 
                      measurement initiatives under this Act and the 
                      coordination of such initiatives with quality 
                      initiatives implemented by other payers;
                          ``(ii) the recommendations made under 
                      paragraph (1); and
                          ``(iii) the performance by the entity of the 
                      duties required under the contract entered into 
                      with the Secretary under subsection (a).
                    ``(B) Secretarial review and publication of annual 
                report.--Not later than 6 months after receiving a 
                report under subparagraph (A) for a year, the Secretary 
                shall--
                          ``(i) review such report; and
                          ``(ii) publish such report in the Federal 
                      Register, together with any comments of the 
                      Secretary on such report.

    ``(c) Requirements Described.--The requirements described in this 
subsection are the following:
            ``(1) Private nonprofit.--The entity is a private nonprofit 
        entity governed by a board.
            ``(2) Board membership.--The members of the board of the 
        entity include--
                    ``(A) representatives of health plans and health 
                care providers and practitioners or representatives of 
                groups representing such health plans and health care 
                providers and practitioners;
                    ``(B) health care consumers or representatives of 
                groups representing health care consumers; and
                    ``(C) representatives of purchasers and employers or 
                representatives of groups representing purchasers or 
                employers.
            ``(3) Entity membership.--The membership of the entity 
        includes persons who have experience with--
                    ``(A) urban health care issues;
                    ``(B) safety net health care issues;
                    ``(C) rural and frontier health care issues; and
                    ``(D) health care quality and safety issues.

[[Page 122 STAT. 2586]]

            ``(4) Open and transparent.--With respect to matters related 
        to the contract with the Secretary under subsection (a), the 
        entity conducts its business in an open and transparent manner 
        and provides the opportunity for public comment on its 
        activities.
            ``(5) Voluntary consensus standards setting organization.--
        The entity operates as a voluntary consensus standards setting 
        organization as defined for purposes of section 12(d) of the 
        National Technology Transfer and Advancement Act of 1995 (Public 
        Law 104-113) and Office of Management and Budget Revised 
        Circular A-119 (published in the Federal Register on February 
        10, 1998).
            ``(6) Experience.--The entity has at least 4 years of 
        experience in establishing national consensus standards.
            ``(7) Membership fees.--If the entity requires a membership 
        fee for participation in the functions of the entity, such fees 
        shall be reasonable and adjusted based on the capacity of the 
        potential member to pay the fee. In no case shall membership 
        fees pose a barrier to the participation of individuals or 
        groups with low or nominal resources to participate in the 
        functions of the entity.

    ``(d) Funding.--For purposes of carrying out this section, the 
Secretary shall provide for the transfer, from the Federal Hospital 
Insurance Trust Fund under section 1817 and the Federal Supplementary 
Medical Insurance Trust Fund under section 1841 (in such proportion as 
the Secretary determines appropriate), of $10,000,000 to the Centers for 
Medicare & Medicaid Services Program Management Account for each of 
fiscal years 2009 through 2012.''.
            (2) Sense of the senate.--It is the Sense of the Senate that 
        the selection by the Secretary of Health and Human Services of 
        an entity to contract with under section 1890(a) of the Social 
        Security Act, as added by paragraph (1), should not be construed 
        as diminishing the significant contributions of the Boards of 
        Medicine, the quality alliances, and other clinical and 
        technical experts to efforts to measure and improve the quality 
        of health care services.

    (b) GAO Study and Reports on the Performance and Costs of the 
Consensus-Based Entity Under the Contract.--
            (1) In general.--The Comptroller General of the United 
        States shall conduct a study on--
                    (A) the performance of the entity with a contract 
                with the Secretary of Health and Human Services under 
                section 1890(a) of the Social Security Act, as added by 
                subsection (a), of its duties under such contract; and
                    (B) the costs incurred by such entity in performing 
                such duties.
            (2) Reports.--Not later than 18 months and 36 months after 
        the effective date of the first contract entered into under such 
        section 1890(a), the Comptroller General of the United States 
        shall submit to Congress a report containing the results of the 
        study conducted under paragraph (1), together with 
        recommendations for such legislation and administrative action 
        as the Comptroller General determines appropriate.

[[Page 122 STAT. 2587]]

SEC. 184. COST-SHARING FOR CLINICAL TRIALS.

    Section 1833 of the Social Security Act (42 U.S.C. 1395l), as 
amended by section 151(a), is amended by adding at the end the following 
new subsection:
    ``(w) Methods of Payment.--The Secretary may develop alternative 
methods of payment for items and services provided under clinical trials 
and comparative effectiveness studies sponsored or supported by an 
agency of the Department of Health and Human Services, as determined by 
the Secretary, to those that would otherwise apply under this section, 
to the extent such alternative methods are necessary to preserve the 
scientific validity of such trials or studies, such as in the case where 
masking the identity of interventions from patients and investigators is 
necessary to comply with the particular trial or study design.''.
SEC. 185. ADDRESSING HEALTH CARE DISPARITIES.

    Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) is 
amended by inserting after section 1808 the following new section:

                  ``addressing health care disparities

    ``Sec. 1809. <<NOTE: 42 USC 1395b-10.>>   (a) Evaluating Data 
Collection Approaches.--The Secretary shall evaluate approaches for the 
collection of data under this title, to be performed in conjunction with 
existing quality reporting requirements and programs under this title, 
that allow for the ongoing, accurate, and timely collection and 
evaluation of data on disparities in health care services and 
performance on the basis of race, ethnicity, and gender. In conducting 
such evaluation, the Secretary shall consider the following objectives:
            ``(1) Protecting patient privacy.
            ``(2) Minimizing the administrative burdens of data 
        collection and reporting on providers and health plans 
        participating under this title.
            ``(3) Improving Medicare program data on race, ethnicity, 
        and gender.

    ``(b) Reports to Congress.--
            ``(1) Report on evaluation.--Not later than 18 months after 
        the date of the enactment of this section, the Secretary shall 
        submit to Congress a report on the evaluation conducted under 
        subsection (a). Such report shall, taking into consideration the 
        results of such evaluation--
                    ``(A) identify approaches (including defining 
                methodologies) for identifying and collecting and 
                evaluating data on health care disparities on the basis 
                of race, ethnicity, and gender for the original Medicare 
                fee-for-service program under parts A and B, the 
                Medicare Advantage program under part C, and the 
                Medicare prescription drug program under part D; and
                    ``(B) include recommendations on the most effective 
                strategies and approaches to reporting HEDIS quality 
                measures as required under section 1852(e)(3) and other 
                nationally recognized quality performance measures, as 
                appropriate, on the basis of race, ethnicity, and 
                gender.
            ``(2) Reports on data analyses.--Not later than 4 years 
        after the date of the enactment of this section, and 4 years 
        thereafter, the Secretary shall submit to Congress a report that 
        includes recommendations for improving the identification of 
        health care disparities for Medicare beneficiaries based on 
        analyses of the data collected under subsection (c).

    ``(c) Implementing Effective Approaches.-- <<NOTE: Deadline.>> Not 
later than 24 months after the date of the enactment of this section, 
the Secretary shall implement the approaches identified in the report 
submitted under subsection (b)(1) for the ongoing, accurate, and timely 
collection and evaluation of data on health care disparities on the 
basis of race, ethnicity, and gender.''.
SEC. 186. <<NOTE: 42 USC 1395b-4 note.>> DEMONSTRATION TO IMPROVE 
                        CARE TO PREVIOUSLY UNINSURED.

    (a) Establishment.-- <<NOTE: Deadline.>> Within one year after the 
date of the enactment of this Act, the Secretary (in this section 
referred to as the ``Secretary'') shall establish a demonstration 
project to determine the greatest needs and most effective methods of 
outreach to medicare beneficiaries who were previously uninsured.

    (b) Scope.--The demonstration shall be in no fewer than 10 sites, 
and shall include state health insurance assistance programs, community 
health centers, community-based organizations, community health workers, 
and other service providers under parts A, B, and C of title XVIII of 
the Social Security Act. Grantees that are plans operating under part C 
shall document that enrollees who were previously uninsured receive the 
``Welcome to Medicare'' physical exam.
    (c) Duration.--The Secretary shall conduct the demonstration project 
for a period of 2 years.
    (d) Report and Evaluation.--The Secretary shall conduct an 
evaluation of the demonstration and not later than 1 year after the 
completion of the project shall submit to Congress a report including 
the following:
            (1) An analysis of the effectiveness of outreach activities 
        targeting beneficiaries who were previously uninsured, such as 
        revising outreach and enrollment materials (including the 
        potential for use of video information), providing one-on-one 
        counseling, working with community health workers, and amending 
        the Medicare and You handbook.
            (2) The effect of such outreach on beneficiary access to 
        care, utilization of services, efficiency and cost-effectiveness 
        of health care delivery, patient satisfaction, and select health 
        outcomes.
SEC. 187. <<NOTE: 42 USC 1395cc note.>> OFFICE OF THE INSPECTOR 
                        GENERAL REPORT ON COMPLIANCE WITH AND 
                        ENFORCEMENT OF NATIONAL STANDARDS ON 
                        CULTURALLY AND LINGUISTICALLY APPROPRIATE 
                        SERVICES (CLAS) IN MEDICARE.

    (a) Report.--Not later than two years after the date of the 
enactment of this Act, the Inspector General of the Department of Health 
and Human Services shall prepare and publish a report on--
            (1) the extent to which Medicare providers and plans are 
        complying with the Office for Civil Rights' Guidance to Federal 
        Financial Assistance Recipients Regarding Title VI Prohibition 
        Against National Origin Discrimination Affecting Limited English 
        Proficient Persons and the Office of Minority Health's 
        Culturally and Linguistically Appropriate Services Standards in 
        health care; and
            (2) a description of the costs associated with or savings 
        related to the provision of language services.

Such report shall include recommendations on improving compliance with 
CLAS Standards and recommendations on improving enforcement of CLAS 
Standards.
    (b) Implementation.--Not <<NOTE: Deadline.>> later than one year 
after the date of publication of the report under subsection (a), the 
Department of Health and Human Services shall implement changes 
responsive to any deficiencies identified in the report.
SEC. 188. MEDICARE IMPROVEMENT FUNDING.

    (a) Medicare Improvement Fund.--
            (1) In general.--Subject to paragraph (2), title XVIII of 
        the Social Security Act (42 U.S.C. 1395 et seq.) is amended by 
        adding at the end the following new section:

                       ``medicare improvement fund

    ``Sec. 1898.  (a) Establishment.--
            ``The Secretary shall establish under this title a Medicare 
        Improvement Fund (in this section referred to as the `Fund') 
        which shall be available to the Secretary to make improvements 
        under the original fee-for-service program under parts A and B 
        for individuals entitled to, or enrolled for, benefits under 
        part A or enrolled under part B.

    ``(b) Funding.--
            ``(1) In general.--There shall be available to the Fund, for 
        expenditures from the Fund for services furnished during fiscal 
        years 2014 through 2017, $19,900,000,000.
            ``(2) Payment from trust funds.--The amount specified under 
        paragraph (1) shall be available to the Fund, as expenditures 
        are made from the Fund, from the Federal Hospital Insurance 
        Trust Fund and the Federal Supplementary Medical Insurance Trust 
        Fund in such proportion as the Secretary determines appropriate.
            ``(3) Funding limitation.--Amounts in the Fund shall be 
        available in advance of appropriations but only if the total 
        amount obligated from the Fund does not exceed the amount 
        available to the Fund under paragraph 
        (1). <<NOTE: Certification.>> The Secretary may obligate funds 
        from the Fund only if the Secretary determines (and the Chief 
        Actuary of the Centers for Medicare & Medicaid Services and the 
        appropriate budget officer certify) that there are available in 
        the Fund sufficient amounts to cover all such obligations 
        incurred consistent with the previous sentence.''.
            (2) Contingency.--
                    (A) In general.--If there is enacted, before, on, or 
                after the date of the enactment of this Act, a 
                Supplemental Appropriations Act, 2008 that includes a 
                provision providing for a Medicare Improvement Fund 
                under a section 1898 of the Social Security Act, the 
                alternative amendment described in subparagraph (B)--
                          (i) <<NOTE: Applicability.>> shall apply 
                      instead of the amendment made by paragraph (1); 
                      and
                          (ii) shall be executed after such provision in 
                      such Supplemental Appropriations Act.
                    (B) Alternative amendment described.--The 
                alternative amendment described in this subparagraph is 
                as follows: Section 1898(b)(1) of the Social Security 
                Act, as added by the Supplemental Appropriations Act, 
                2008, <<NOTE: 42 USC 1395iii.>> is amended by inserting 
                before the period at the end the following: `` and, in 
                addition for services furnished during fiscal years 2014 
                through 2017, $19,900,000,000''.

    (b) Implementation.--For purposes of carrying out the provisions of, 
and amendments made by, this title, in addition to any other amounts 
provided in such provisions and amendments, the Secretary of Health and 
Human Services shall provide for the transfer, from the Federal Hospital 
Insurance Trust Fund under section 1817 of the Social Security Act (42 
U.S.C. 1395i) and the Federal Supplementary Medical Insurance Trust Fund 
under section 1841 of such Act (42 U.S.C. 1395t), in the same proportion 
as the Secretary determines under section 1853(f) of such Act (42 U.S.C. 
1395w-23(f)), of $140,000,000 to the Centers for Medicare & Medicaid 
Services Program Management Account for the period of fiscal years 2009 
through 2013.
SEC. 189. INCLUSION OF MEDICARE PROVIDERS AND SUPPLIERS IN FEDERAL 
                        PAYMENT LEVY AND ADMINISTRATIVE OFFSET 
                        PROGRAM.

    (a) In General.--Section 1874 of the Social Security Act (42 U.S.C. 
1395kk) is amended by adding at the end the following new subsection:
    ``(d) Inclusion of Medicare Provider and Supplier Payments in 
Federal Payment Levy Program.--
            ``(1) In general.--The Centers for Medicare & Medicaid 
        Services shall take all necessary steps to participate in the 
        Federal Payment Levy Program under section 6331(h) of the 
        Internal Revenue Code of 1986 as soon as possible and shall 
        ensure that--
                    ``(A) at least 50 percent of all payments under 
                parts A and B are processed through such program 
                beginning within 1 year after the date of the enactment 
                of this section;
                    ``(B) at least 75 percent of all payments under 
                parts A and B are processed through such program 
                beginning within 2 years after such date; and
                    ``(C) <<NOTE: Deadline.>> all payments under parts A 
                and B are processed through such program beginning not 
                later than September 30, 2011.
            ``(2) Assistance.--The Financial Management Service and the 
        Internal Revenue Service shall provide assistance to the Centers 
        for Medicare & Medicaid Services to ensure that all payments 
        described in paragraph (1) are included in the Federal Payment 
        Levy Program by the deadlines specified in that subsection.''.

    (b) Application of Administrative Offset Provisions to Medicare 
Provider or Supplier Payments.--Section 3716 of title 31, United States 
Code, is amended--
            (1) by inserting ``the Department of Health and Human 
        Services,'' after ``United States Postal Service,'' in 
        subsection (c)(1)(A); and
            (2) by adding at the end of subsection (c)(3) the following 
        new subparagraph:
                    ``(D) <<NOTE: Applicability. Effective date.>> This 
                section shall apply to payments made after the date 
                which is 90 days after the enactment of this 
                subparagraph (or such earlier date as designated by the 
                Secretary of Health and Human Services) with respect to 
                claims or debts, and to amounts payable, under title 
                XVIII of the Social Security Act.''.

    (c) <<NOTE: 31 USC 3176 note.>>  Effective Date.--The amendments 
made by this section shall take effect on the date of the enactment of 
this Act.

                           TITLE II--MEDICAID

SEC. 201. EXTENSION OF TRANSITIONAL MEDICAL ASSISTANCE (TMA) AND 
                        ABSTINENCE EDUCATION PROGRAM.

    Section 401 of division B of the Tax Relief and Health Care Act of 
2006 (Public Law 109-432, 120 Stat. 2994), as amended by section 1 of 
Public Law 110-48 (121 Stat. 244), section 2 of the TMA, Abstinence, 
Education, and QI Programs Extension Act of 2007 (Public Law 110-90, 121 
Stat. 984), and section 202 of the Medicare, Medicaid, and SCHIP 
Extension Act of 2007 (Public Law 110-173) is amended--
            (1) by striking ``June 30, 2008'' and inserting ``June 30, 
        2009'';
            (2) by striking ``the third quarter of fiscal year 2008'' 
        and inserting ``the third quarter of fiscal year 2009''; and
            (3) by striking ``the third quarter of fiscal year 2007'' 
        and inserting ``the third quarter of fiscal year 2008''.
SEC. 202. MEDICAID DSH EXTENSION.

    Section 1923(f)(6) of the Social Security Act (42 U.S.C. 1396r-
4(f)(6)) is amended--
            (1) in the heading, by striking ``fiscal year 2007 and 
        portions of fiscal year 2008'' and inserting ``fiscal years 2007 
        through 2009 and the first calendar quarter of fiscal year 
        2010''; and
            (2) in subparagraph (A)--
                    (A) in clause (i)--
                          (i) in the second sentence--
                                    (I) by striking ``fiscal year 2008 
                                for the period ending on June 30, 2008'' 
                                and inserting ``fiscal years 2008 and 
                                2009''; and
                                    (II) by striking ``\3/4\ of''; and
                          (ii) by adding at the end the following new 
                      sentences: ``Only with respect to fiscal year 2010 
                      for the period ending on December 31, 2009, the 
                      DSH allotment for Tennessee for such portion of 
                      the fiscal year, notwithstanding such table or 
                      terms, shall be \1/4\ of the amount specified in 
                      the first sentence for fiscal year 2007.'';
                    (B) in clause (ii), by striking ``or for a period in 
                fiscal year 2008'' and inserting ``, 2008, 2009, or for 
                a period in fiscal year 2010'';
                    (C) in clause (iv)--
                          (i) in the heading, by striking ``fiscal year 
                      2007 and fiscal year 2008'' and inserting ``fiscal 
                      years 2007 through 2009 and the first calendar 
                      quarter of fiscal year 2010'';
                          (ii) in subclause (I), by striking ``or for a 
                      period in fiscal year 2008'' and inserting ``, 
                      2008, 2009, or for a period in fiscal year 2010''; 
                      and
                          (iii) in subclause (II), by striking ``or for 
                      a period in fiscal year 2008'' and inserting ``, 
                      2008, 2009, or for a period in fiscal year 2010''; 
                      and
            (3) in subparagraph (B)(i)--
                    (A) in the first sentence, by striking ``fiscal year 
                2007'' and inserting ``each of fiscal years 2007 through 
                2009''; and
                    (B) by striking the second sentence and inserting 
                the following: ``Only with respect to fiscal year 2010 
                for the period ending on December 31, 2009, the DSH 
                allotment for Hawaii for such portion of the fiscal 
                year, notwithstanding the table set forth in paragraph 
                (2), shall be $2,500,000.''.
SEC. 203. <<NOTE: 42 USC 1396r-8 note.>> PHARMACY REIMBURSEMENT 
                        UNDER MEDICAID.

    (a) Delay in Application of New Payment Limit for Multiple Source 
Drugs Under Medicaid.--Notwithstanding paragraphs (4) and (5) of 
subsection (e) of section 1927 of the Social Security Act (42 U.S.C. 
1396r-8) or part 447 of title 42, Code of Federal Regulations, as 
published on July 17, 2007 (72 Federal Register 39142)--
            (1) the specific upper limit under section 447.332 of title 
        42, Code of Federal Regulations (as in effect on December 31, 
        2006) applicable to payments made by a State for multiple source 
        drugs under a State Medicaid plan shall continue to apply 
        through September 30, 2009, for purposes of the availability of 
        Federal financial participation for such payments; and
            (2) the Secretary of Health and Human Services shall not, 
        prior to October 1, 2009, finalize, implement, enforce, or 
        otherwise take any action (through promulgation of regulation, 
        issuance of regulatory guidance, use of Federal payment audit 
        procedures, or other administrative action, policy, or practice, 
        including a Medical Assistance Manual transmittal or letter to 
        State Medicaid directors) to impose the specific upper limit 
        established under section 447.514(b) of title 42, Code of 
        Federal Regulations as published on July 17, 2007 (72 Federal 
        Register 39142).

    (b) Temporary Suspension of Updated Publicly Available AMP Data.--
Notwithstanding clause (v) of section 1927(b)(3)(D) of the Social 
Security Act (42 U.S.C. 1396r-8(b)(3)(D)), the Secretary of Health and 
Human Services shall not, prior to October 1, 2009, make publicly 
available any AMP disclosed to the Secretary.
    (c) Definitions.--In this subsection:
            (1) The term ``multiple source drug'' has the meaning given 
        that term in section 1927(k)(7)(A)(i) of the Social Security Act 
        (42 U.S.C. 1396r-8(k)(7)(A)(i)).
            (2) The term ``AMP'' has the meaning given ``average 
        manufacturer price'' in section 1927(k)(1) of the Social 
        Security Act (42 U.S.C. 1396r-8(k)(1)) and ``AMP'' in section 
        447.504(a) of title 42, Code of Federal Regulations as published 
        on July 17, 2007 (72 Federal Register 39142).
SEC. 204. REVIEW OF ADMINISTRATIVE CLAIM DETERMINATIONS.

    (a) In General.--Section 1116 of the Social Security Act (42 U.S.C. 
1316) is amended by adding at the end the following new subsection:
    ``(e)(1) <<NOTE: Time periods.>> Whenever the Secretary determines 
that any item or class of items on account of which Federal financial 
participation is claimed under title XIX shall be disallowed for such 
participation, the State shall be entitled to and upon request shall 
receive a reconsideration of the disallowance, provided that such 
request is made during the 60-day period that begins on the date the 
State receives notice of the disallowance.

    ``(2)(A) A State may appeal a disallowance of a claim for federal 
financial participation under title XIX by the Secretary, or an 
unfavorable reconsideration of a disallowance, during the 60-day period 
that begins on the date the State receives notice of the disallowance or 
of the unfavorable reconsideration, in whole or in part, to the 
Departmental Appeals Board, established in the Department of Health and 
Human Services (in this paragraph referred to as the `Board'), by filing 
a notice of appeal with the Board.
    ``(B) The Board shall consider a State's appeal of a disallowance of 
such a claim (or of an unfavorable reconsideration of a disallowance) on 
the basis of such documentation as the State may submit and as the Board 
may require to support the final decision of the Board. In deciding 
whether to uphold a disallowance of such a claim or any portion thereof, 
the Board shall be bound by all applicable laws and regulations and 
shall conduct a thorough review of the issues, taking into account all 
relevant evidence. The Board's decision of an appeal under subparagraph 
(A) shall be the final decision of the Secretary and shall be subject to 
reconsideration by the Board only upon motion of either party filed 
during the 60-day period that begins on the date of the Board's decision 
or to judicial review in accordance with subparagraph (C).
    ``(C) A State may obtain judicial review of a decision of the Board 
by filing an action in any United States District Court located within 
the appealing State (or, if several States jointly appeal the 
disallowance of claims for Federal financial participation under section 
1903, in any United States District Court that is located within any 
State that is a party to the appeal) or the United States District Court 
for the District of Columbia. Such an action may only be filed--
            ``(i) if no motion for reconsideration was filed within the 
        60-day period specified in subparagraph (B), during such 60-day 
        period; or
            ``(ii) if such a motion was filed within such period, during 
        the 60-day period that begins on the date of the Board's 
        decision on such motion.''.

    (b) Conforming Amendment.--Section 1116(d) of such Act (42 U.S.C. 
1316(d)) is amended by striking ``or XIX,''.
    (c) <<NOTE: 42 USC 1316 note.>>  Effective Date.--The amendments 
made by this section take effect on the date of the enactment of this 
Act and apply to any disallowance of a claim for Federal financial 
participation under title XIX of the Social Security Act (42 U.S.C. 1396 
et seq.) made on or after such date or during the 60-day period prior to 
such date.
SEC. 205. COUNTY MEDICAID HEALTH INSURING ORGANIZATIONS.

    (a) In General.--Section 9517(c)(3) of the Consolidated Omnibus 
Budget Reconciliation Act of 1985 (42 U.S.C. 1396b note), as added by 
section 4734 of the Omnibus Budget Reconciliation Act of 1990 and as 
amended by section 704 of the Medicare, Medicaid, and SCHIP Benefits 
Improvement and Protection Act of 2000, is amended--
            (1) in subparagraph (A), by inserting ``, in the case of any 
        health insuring organization described in such subparagraph that 
        is operated by a public entity established by Ventura County, 
        and in the case of any health insuring organization described in 
        such subparagraph that is operated by a public entity 
        established by Merced County'' after ``described in subparagraph 
        (B)''; and
            (2) in subparagraph (C), by striking ``14 percent'' and 
        inserting ``16 percent''.

    (b) <<NOTE: 42 USC 1396b note.>>  Effective Date.--The amendments 
made by subsection (a) shall take effect on the date of the enactment of 
this Act.

                        TITLE III--MISCELLANEOUS

SEC. 301. EXTENSION OF TANF SUPPLEMENTAL GRANTS.

    (a) Extension Through Fiscal Year 2009.--Section 7101(a) of the 
Deficit Reduction Act of 2005 (Public Law 109-171; 120 Stat. 135) is 
amended by striking ``fiscal year 2008'' and inserting ``fiscal year 
2009''.
    (b) Conforming Amendment.--Section 403(a)(3)(H)(ii) of the Social 
Security Act (42 U.S.C. 603(a)(3)(H)(ii)) is amended to read as follows:
                          ``(ii) subparagraph (G) shall be applied as if 
                      `fiscal year 2009' were substituted for `fiscal 
                      year 2001'; and''.
SEC. 302. 70 PERCENT FEDERAL MATCHING FOR FOSTER CARE AND ADOPTION 
                        ASSISTANCE FOR THE DISTRICT OF COLUMBIA.

    (a) In General.--Section 474(a) of the Social Security Act (42 
U.S.C. 674(a)) is amended in each of paragraphs (1) and (2) by striking 
``(as defined in section 1905(b) of this Act)'' and inserting ``(which 
shall be as defined in section 1905(b), in the case of a State other 
than the District of Columbia, or 70 percent, in the case of the 
District of Columbia)''.
    (b) <<NOTE: 42 USC 674 note.>>  Effective Date.--The amendment made 
by subsection (a) shall take effect on October 1, 2008, and shall apply 
to calendar quarters beginning on or after that date.
SEC. 303. EXTENSION OF SPECIAL DIABETES GRANT PROGRAMS.

    (a) Special Diabetes Programs for Type I Diabetes.--Section 
330B(b)(2)(C) of the Public Health Service Act (42 U.S.C. 254c-2(b)(2)) 
is amended by striking ``2009'' and inserting ``2011''.
    (b) Special Diabetes Programs for Indians.--Section 330C(c)(2)(C) of 
the Public Health Service Act (42 U.S.C. 254c-3(c)(2)(C)) is amended by 
striking ``2009'' and inserting ``2011''.
    (c) Report on Grant Programs.--Section 4923(b) of the Balanced 
Budget Act of 1997 (42 U.S.C. 1254c-2 note), <<NOTE: 42 USC 254c-2 
note.>> as amended by section 931(c) of the Medicare, Medicaid, and 
SCHIP Benefits Improvement and Protection Act of 2000, as enacted into 
law by section 1(a)(6) of Public Law 106-554, and section 1(c) of Public 
Law 107-360, is amended--
            (1) in paragraph (1), by striking ``and'' at the end;
            (2) in paragraph (2)--
                    (A) by striking ``a final report'' and inserting ``a 
                second interim report''; and
                    (B) by striking the period at the end and inserting 
                ``; and''; and
            (3) by adding at the end the following new paragraph:
            ``(3) <<NOTE: Deadline.>> a report on such evaluation not 
        later than January 1, 2011.''.
SEC. 304. IOM REPORTS ON BEST PRACTICES FOR CONDUCTING SYSTEMATIC 
                        REVIEWS OF CLINICAL EFFECTIVENESS RESEARCH 
                        AND FOR DEVELOPING CLINICAL PROTOCOLS.

    (a) Systematic Reviews of Clinical Effectiveness Research.--
            (1) Study.-- <<NOTE: Contracts.>> Not later than 60 days 
        after the date of the enactment of this Act, the Secretary of 
        Health and Human Services shall enter into a contract with the 
        Institute of Medicine of the National Academies (in this section 
        referred to as the ``Institute'') under which the Institute 
        shall conduct a study to identify the methodological standards 
        for conducting systematic reviews of clinical effectiveness 
        research on health and health care in order to ensure that 
        organizations conducting such reviews have information on 
        methods that are objective, scientifically valid, and 
        consistent.
            (2) Report.--Not later than 18 months after the effective 
        date of the contract under paragraph (1), the Institute, as part 
        of such contract, shall submit to the Secretary of Health and 
        Human Services and the appropriate committees of jurisdiction of 
        Congress a report containing the results of the study conducted 
        under paragraph (1), together with recommendations for such 
        legislation and administrative action as the Institute 
        determines appropriate.
            (3) Participation.--The contract under paragraph (1) shall 
        require that stakeholders with expertise in conducting clinical 
        effectiveness research participate on the panel responsible for 
        conducting the study under paragraph (1) and preparing the 
        report under paragraph (2).

    (b) Clinical Protocols.--
            (1) Study.--Not <<NOTE: Contracts.>> later than 60 days 
        after the date of the enactment of this Act, the Secretary of 
        Health and Human Services shall enter into a contract with the 
        Institute of Medicine of the National Academies (in this section 
        referred to as the ``Institute'') under which the Institute 
        shall conduct a study on the best methods used in developing 
        clinical practice guidelines in order to ensure that 
        organizations developing such guidelines have information on 
        approaches that are objective, scientifically valid, and 
        consistent.
            (2) Report.--Not later than 18 months after the effective 
        date of the contract under paragraph (1), the Institute, as part 
        of such contract, shall submit to the Secretary of Health and 
        Human Services and the appropriate committees of jurisdiction of 
        Congress a report containing the results of the study conducted 
        under paragraph (1), together with recommendations for such 
        legislation and administrative action as the Institute 
        determines appropriate.
            (3) Participation.--The contract under paragraph (1) shall 
        require that stakeholders with expertise in making clinical 
        recommendations participate on the panel responsible for 
        conducting the study under paragraph (1) and preparing the 
        report under paragraph (2).

    (c) Funding.--Out of any funds in the Treasury not otherwise 
appropriated, there are appropriated for the period of fiscal years 2009 
and 2010, $3,000,000 to carry out this section.

Nancy Pelosi

Speaker of the House of Representatives.

Robert C. Byrd

President of the Senate pro tempore.

                  IN THE HOUSE OF REPRESENTATIVES, U.S.

July 15, 2008.

  The House of Representatives having proceeded to reconsider the bill 
(H.R. 6331) entitled `An Act to amend titles XVIII and XIX of the Social 
Security Act to extend expiring provisions under the Medicare Program, 
to improve beneficiary access to preventive and mental health services, 
to enhance low-income benefit programs, and to maintain access to care 
in rural areas, including pharmacy access, and for other purposes'', 
returned by the President of the United States with his objections, to 
the House of Representatives, in which it originated, it was
  Resolved, That the said bill pass, two-thirds of the House of 
Representatives agreeing to pass the same.

Lorraine C. Miller

Clerk.

                                   By

Robert F. Reeves

Deputy Clerk.

   I certify that this Act originated in the House of Representatives.

  

Lorraine C. Miller

Clerk.

                   IN THE SENATE OF THE UNITED STATES,

July 15, 2008.

  The Senate having proceeded to reconsider the bill (H.R. 6331) 
entitled ``An Act to amend titles XVIII and XIX of the Social Security 
Act to extend expiring provisions under the Medicare Program, to improve 
beneficiary access to preventive and mental health services, to enhance 
low-income benefit programs, and to maintain access to care in rural 
areas, including pharmacy access, and for other purposes'', returned by 
the President of the United States with his objections, to the House of 
Representatives, in which it originated, and passed by the House of 
Representatives on reconsideration of the same, it was
  Resolved, That the said bill pass, two-thirds of the Senators present 
having voted in the affirmative.

Nancy Erickson

Secretary.

      

LEGISLATIVE HISTORY--H.R. 6331:
---------------------------------------------------------------------------

CONGRESSIONAL RECORD, Vol. 154 (2008):
            June 24, considered and passed House.
            July 9, considered and passed Senate.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 44 (2008):
            July 15, Presidential veto message.
CONGRESSIONAL RECORD, Vol. 154 (2008):
            July 15, House and Senate overrode veto.

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