I

106TH CONGRESS

2D SESSION H. R. 4981

To amend title XVIII of the Social Security Act to establish a national

policy on chronic illness care, to improve administrative, delivery, and

financing capabilities, to establish prototype models for serving persons

with serious and disabling chronic conditions, to provide for coverage

under the Medicare Program of disease management services for serious

and disabling chronic illnesses, and to refine Medicare and Medicaid

waiver authority.

IN THE HOUSE OF REPRESENTATIVES

JULY 26, 2000

Mr. STARK introduced the following bill; which was referred to the Committee

on Commerce, and in addition to the Committee on Ways and Means,

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

for consideration of such provisions as fall within the jurisdiction of the

committee concerned

A BILL

To amend title XVIII of the Social Security Act to establish

a national policy on chronic illness care, to improve administrative, delivery, and financing capabilities, to establish prototype models for serving persons with serious

and disabling chronic conditions, to provide for coverage

under the Medicare Program of disease management

services for serious and disabling chronic illnesses, and

to refine Medicare and Medicaid waiver authority.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

2 (a) SHORT TITLE.—This Act may be cited as the

3 ‘‘Chronic Illness Care Improvement Act of 2000’’.

4 (b) TABLE OF CONTENTS.—The table of contents of

5 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Findings.

TITLE I—NATIONAL COMMISSION ON IMPROVING CHRONIC

ILLNESS CARE

Sec. 101. National Commission on Improving Chronic Illness Care.

Sec. 102. Definition of serious and disabling chronic illness.

TITLE II—PREPARING THE GROUNDWORK FOR THE NATIONAL

INITIATIVE TO IMPROVE CHRONIC ILLNESS CARE

Subtitle A—Expansion of Preventive Benefits

Sec. 201. Authority to provide preventive services under part B of the medicare

program to prevent, reduce, delay, or detect serious and disabling chronic illness.

Sec. 202. Information campaign on prevention.

Sec. 203. Study of ways to encourage lifetime preventive care designed to minimize chronic illness costs in the public and private sectors.

Sec. 204. Congressional consideration of cost effectiveness of chronic illness

prevention measures over time.

Subtitle B—Development of National Goals and Measures for the Effective

Management of Chronic Illness

Sec. 211. Establishment of a new office in the Department of Health and

Human Services to ensure coordination of care for chronic illness.

Sec. 212. Establishment of a national database for chronic illness.

Sec. 213. Establishment of national goals to reduce the prevalence of high-cost

chronic illness.

Sec. 214. Establishment of quality improvement, medical error reduction and

outcomes goals.

Sec. 215. Development and implementation of common patient assessment instruments across settings.

Sec. 216. Development of national resource centers on the internet for serious

and disabling chronic illness.

Subtitle C—Payment Incentives for Furnishing Quality Services to the

Chronically Ill

Sec. 221. Bonus payments to Medicare+Choice organizations implementing

comprehensive programs of disease and disability prevention

that achieve prevention goals established by the Secretary.

Sec. 222. Increased attention to payment policies for the chronically ill under

Medicare+Choice.
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Sec. 223. Assuring adequate manpower and expertise for the treatment of

chronic illness.

TITLE III—DEVELOPMENT OF PROTOTYPES OF INTEGRATION

AND COORDINATION OF CARE FOR 2 CHRONIC ILLNESS SUBPOPULATIONS TO BE EXPANDED IN 2007 TO ALL SERIOUS AND

DISABLING CHRONIC ILLNESSES

Sec. 301. Disease management services for serious and disabling chronic illness.

‘‘Sec. 1889. Disease management services for serious and disabling chronic illness.

TITLE IV—INTEGRATING MEDICARE AND MEDICAID FOR DUAL

ELIGIBLES

Sec. 401. Provision of waiver authority to serve dual eligibles more efficiently.

‘‘Sec. 1897. Demonstrations to coordinate and integrate services and administration under this title and title XIX.

1 SEC. 2. FINDINGS.

2 Congress makes the following findings:

3 (1) Chronic disease is America’s number one

4 health care problem, yet chronic care is provided by

5 a fragmented health care system that was designed

6 to meet the needs of acute episodes of illness.

7 (2) Chronic disease is America’s highest cost

8 and fastest growing health care problem, accounting

9 for 90 percent of all morbidity and 80 percent of all

10 deaths. While chronic conditions affect persons of all

11 ages, the elderly are at the greatest risk. About 88

12 percent of the elderly have 1 chronic condition and

13 almost 70 percent have more than 1 condition. The

14 number of persons over 65 years of age will increase

15 from 13 percent of the population to almost 21 per16 cent in 2040.
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1 (3) Direct and indirect costs for chronic condi2 tions reached $659,000,000,000 in 1990 and are

3 projected to nearly double by the year 2050. Per

4 capita medical expenditures for persons with chronic

5 conditions are, on average, almost 4 times the costs

6 for persons with acute conditions. Nearly 70 percent

7 of the Nation’s personal health care expenditures are

8 for people with chronic conditions.

9 (4) The needs of the chronically ill span time,

10 place, and health profession, yet providers and infor11 mation systems function to deliver separate and un12 related services, even though they are providing care

13 to the same person. The current structure of admin14 istration, financing, and oversight of Government15 sponsored programs locks into place a fragmented,

16 institutionally based, reactive approach to care that

17 is at odds with the coordinated and seamless con18 tinuum of care chronic illness requires.

19 (5) This systems problem requires a systems so20 lution based on the following components:

21 (A) Extended care pathways that follow

22 patients across settings and include preventive,

23 primary, acute, transitional, and residential and

24 community-based long-term care services.
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1 (B) Targeted approaches to care delivery

2 for high-risk populations including screening

3 programs, early intervention, and clinical guide4 lines for preventing, delaying, or minimizing

5 disability.

6 (C) Health promotion strategies, including

7 patient education, that encourage self-manage8 ment and patient empowerment.

9 (D) Chronic disease management and case

10 management with the authority to manage care,

11 utilization, and costs across the spectrum of

12 services.

13 (E) Integrated information systems that

14 track health status, utilization, cost, and quality

15 data across providers/settings and throughout

16 the course of chronic conditions.

17 (F) Financing strategies that align finan18 cial incentives among providers to achieve mu19 tual and consistent care, quality, and cost ob20 jectives.

21 (G) Education for health professionals to

22 meet the long-term comprehensive needs of

23 chronic conditions.

24 (H) Support for family caregivers through

25 the development of integrated models of family
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1 centered care that encompass health and sup2 portive services for patients and family care3 givers.

4 (6) This transformation of health care delivery

5 for chronic conditions will result in a dramatic im6 provement in the quality of care characterized by—

7 (A) a reduction in the prevalence of chron8 ic conditions;

9 (B) a reduction in the progression of dis10 ability;

11 (C) improved functional status at all

12 stages of chronic disease;

13 (D) improved patient satisfaction; and

14 (E) improved quality of life.

15 (7) The cost of this new approach to chronic

16 care will be borne by a combination of short-term

17 and long-term savings as follows:

18 (A) Short-term savings result from a re19 duction of duplicative services (including mul20 tiple admissions and discharges with mandated

21 comprehensive intake assessments and dis22 charge plans) from today’s ‘‘silos’’ of health

23 care settings, as well as unnecessary diagnostic

24 investigations and consultations that result

25 from inaccessible data.
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1 (B) Long-term savings result from the re2 duction in preventable complications and the

3 prolongation of functional independence. Soci4 etal costs related to lost productivity and work5 days for both patients and caregivers will also

6 decline.

7 TITLE I—NATIONAL COMMIS8 SION ON IMPROVING CHRON9 IC ILLNESS CARE

10 SEC. 101. NATIONAL COMMISSION ON IMPROVING CHRONIC

11 ILLNESS CARE.

12 (a) ESTABLISHMENT.—There is established a com13 mission to be known as the National Commission on Im14 proving Chronic Illness Care (in this section referred to

15 as the ‘‘Commission’’).

16 (b) DUTIES OF THE COMMISSION.—The Commission

17 shall carry out the following duties:

18 (1) Develop a national policy to coordinate the

19 multiple Federal resources devoted to health care for

20 persons with serious and disabling chronic illnesses

21 in order to facilitate a comprehensive continuum of

22 care. With respect to chronically ill persons who are

23 eligible for health care benefits under any or any

24 combination of the medicare or medicaid programs

25 (administered by the Department of Health and
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1 Human Services), or under chapter 17 of title 38,

2 United States Code (administered by the Depart3 ment of Veterans Affairs), the Commission shall give

4 special emphasis to coordination of health care and

5 related services furnished by those departments and

6 other departments serving medicare beneficiaries, in7 cluding the Departments of Agriculture, Interior,

8 and Housing and Urban Development. The Commis9 sion shall examine how these programs can be made

10 to coordinate better with each other and with State

11 and local programs to provide a continuum of care

12 to those with serious and disabling chronic illnesses.

13 (2) Review and analyze whether coordination of

14 the multiple Federal resources is best accomplished

15 by a completely new governmental structure, or a

16 new structure within an existing department, or a

17 new mechanism for coordination of the various Gov18 ernment programs.

19 (3) Make suggestions regarding amendments to

20 the provisions of titles II, III, and IV of this Act.

21 (4) Identify statutory and regulatory barriers to

22 effective care for serious and disabling chronic ill23 ness and develop recommendations for legislative

24 and regulatory changes that would facilitate the

25 goals in the provisions described in paragraph (4),
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1 including barriers to the coordination of care across

2 provider settings and the coordination of benefit cov3 erage under Federal and State programs, with spe4 cial attention given to the medicare and medicaid

5 programs.

6 (5) Develop a plan to integrate medicare and

7 medicaid Federal budget functions for purposes of

8 projecting future costs of serious and disabling

9 chronic conditions and cost savings from improved

10 care of the chronically ill. These costs and cost sav11 ings must be measured longitudinally and across

12 professional disciplines and provider settings.

13 (6) Develop guidelines for payment methods

14 that establish compatible financial incentives among

15 health care providers and professionals serving the

16 same chronically ill persons in order to facilitate in17 creased quality of care, greater cost effectiveness,

18 and simplicity of billing for providers and bene19 ficiaries.

20 (7) Commission an expert panel, including ex21 perts in disease management, care of serious and

22 disabling chronic illness, and outcomes research, to

23 make recommendations for the design of the proto24 types, supervise data gathering, generate feedback,

25 and define endpoints in order to analyze the experi-
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1 ence of the prototypes, (the National Diabetes Pilot

2 Initiative to Improve Chronic Illness Care and the

3 National Alzheimer’s Disease Pilot Initiative To Im4 prove Chronic Illness Care established under title

5 III) in order to enhance the design of the later ex6 panded program (The National Initiative to Improve

7 Chronic Illness Care). The expert panel will meet

8 concurrently during the tenure of the Commission

9 and will reconvene in the third year of the National

10 Diabetes and Alzheimer’s Disease Pilot Initiatives to

11 review the operation and outcomes of those initia12 tives and submit a report of their recommendations

13 not later than 12 months after they reconvene. Such

14 expert panel may hold hearings and otherwise seek

15 advice from the public and outside experts, develop

16 papers, and seek a consensus on its recommenda17 tions.

18 (8) Commission an expert panel to develop a

19 plan to introduce a single, integrated medical record

20 for patients with chronic conditions in order to elimi21 nate duplication of assessment, care planning, and

22 documentation functions and to allow physician or23 ders, chart information, diagnoses, and assessments

24 to flow continuously across levels of care. Such ex25 pert panel may hold hearings and otherwise seek ad-
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1 vice from the public and outside experts, develop pa2 pers, and seek a consensus on its recommendations.

3 (9) Commission an expert panel to recommend

4 new outcome measures of cost-effectiveness based on

5 improvements in or maintenance of functional sta6 tus, delayed dependency, reducing the rate of dis7 ability progression, quality of life, and such other re8 lated matters as the panel determines appropriate.

9 Such expert panel may hold hearings and otherwise

10 seek advice from the public and outside experts, de11 velop papers, and seek a consensus on its rec12 ommendations.

13 (10) Contract for reports detailing the need for

14 changes in current laws and regulations in order to

15 achieve the aforementioned provisions.

16 (11) Recommend national goals for reduction in

17 serious and disabling chronic illness and cost savings

18 over the next generation.

19 (12) Analyze the impact of emerging trends in

20 the management of serious and disabling chronic ill21 ness, disability, and long-term care, including such

22 issues as genetic testing, Internet technology, patient

23 empowerment, and increasing utilization of home

24 health care and their implications for future health

25 care delivery to the chronically ill.
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1 (13) Review and analyze such other matters as

2 the Commission determines to be appropriate.

3 (c) MEMBERSHIP.—

4 (1) NUMBER AND APPOINTMENT.—

5 (A) IN GENERAL.—Subject to subpara6 graph (B), the Commission shall be composed

7 of 17 members of whom—

8 (i) 4 shall be appointed by the Presi9 dent;

10 (ii) 6 shall be appointed by the Speak11 er of the House of Representatives, in con12 sultation with the minority leader of the

13 House of Representatives, of whom not

14 more that 4 shall be of the same political

15 party;

16 (iii) 6 shall be appointed by the ma17 jority leader of the Senate, in consultation

18 with the minority leader of the Senate, of

19 whom not more than 4 shall be of the

20 same political party; and

21 (iv) 1, who shall serve as Chairman of

22 the Commission, appointed jointly by the

23 Speaker of the House of Representatives,

24 in consultation with the minority leader of

25 the House of Representatives.
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1 (B) LIMITATION ON NUMBER OF MEMBERS

2 OF CONGRESS.—Of the members appointed

3 under subparagraph (A), no more than 2 mem4 bers of the House of Representatives and 2

5 members of the Senate may serve as a member

6 of the Commission.

7 (C) QUALIFICATIONS.—Members of the

8 Commission shall include representatives

9 from—

10 (i) Federal and State agencies serving

11 the elderly, disabled, and chronically ill;

12 (ii) public health;

13 (iii) consumer representatives for var14 ious chronic diseases;

15 (iv) primary care providers;

16 (v) acute care providers;

17 (vi) institutional and community18 based long-term care providers;

19 (vii) managed care health plans; and

20 (viii) researchers in health care fi21 nancing and chronic disease management.

22 (2) DEADLINE FOR APPOINTMENT.—Members

23 of the Commission shall be appointed by not later

24 than 90 days after the enactment of this Act.
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1 (3) TERMS OF APPOINTMENT.—The term of

2 any appointment under paragraph (1) to the Com3 mission shall be for the life of the Commission.

4 (4) MEETINGS.—The Commission shall meet at

5 the call of its Chairman or a majority of its mem6 bers.

7 (5) QUORUM.—A quorum shall consist of 8

8 members of the Commission, except that 4 members

9 may conduct a hearing under subsection (e).

10 (6) VACANCIES.—A vacancy on the Commission

11 shall be filled in the same manner in which the origi12 nal appointment was made, not later than 30 days

13 after the Commission is given notice of the vacancy

14 and shall not affect the power of the remaining

15 members to execute the duties of the Commission.

16 (7) COMPENSATION.—Members of the Commis17 sion shall receive no additional pay, allowances, or

18 benefits by reason of their service on the Commis19 sion.

20 (8) EXPENSES.—Each member of the Commis21 sion shall receive travel expenses and per diem in

22 lieu of subsistence in accordance with sections 5702

23 and 5703 of title 5, United States Code.

24 (d) STAFF AND SUPPORT SERVICES.—

25 (1) EXECUTIVE DIRECTOR.—
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1 (A) APPOINTMENT.—The Chairman shall

2 appoint an executive director of the Commis3 sion.

4 (B) COMPENSATION.—The executive direc5 tor shall be paid the rate of basic pay for level

6 V of the Executive Schedule.

7 (2) STAFF.—With the approval of the Commis8 sion, the executive director may appoint such per9 sonnel as the executive director considers appro10 priate.

11 (3) APPLICABILITY OF CIVIL SERVICE LAWS.—

12 The staff of the Commission shall be appointed with13 out regard to the provisions of title 5, United States

14 Code, governing appointments in the competitive

15 service, and shall be paid without regard to the pro16 visions of title 5, United States Code, governing ap17 pointments in the competitive service, and shall be

18 paid without regard to the provisions of chapter 51

19 and subchapter III of chapter 53 of such title (relat20 ing to classification and General Schedule pay

21 rates).

22 (4) EXPERTS AND CONSULTANTS.—With the

23 approval of the Commission, the executive director

24 may procure temporary and intermittent services

25 under section 3109(b) of title 5, United States Code.
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1 (5) PHYSICAL FACILITIES.—The Administrator

2 of the General Services Administration shall locate

3 suitable office space for the operation of the Com4 mission. The facilities shall serve as the head5 quarters of the Commission and shall include all

6 necessary equipment and incidentals required for the

7 proper functioning of the Commission.

8 (e) POWERS OF COMMISSION.—

9 (1) HEARINGS AND OTHER ACTIVITIES.—For

10 the purpose of carrying out its duties, the Commis11 sion may hold such hearings and undertake such

12 other activities as the Commission determines to be

13 necessary to carry out its duties.

14 (2) STUDIES BY GAO.—Upon the request of the

15 Commission, the Comptroller General shall conduct

16 such studies or investigations as the Commission de17 termines to be necessary to carry out its duties.

18 (3) COST ESTIMATES BY CONGRESSIONAL

19 BUDGET OFFICE AND OFFICE OF THE CHIEF ACTU20 ARY OF HCFA.—

21 (A) The Director of the Congressional

22 Budget Office or the Chief Actuary of the

23 Health Care Financing Administration, or both,

24 shall provide to the Commission, upon the re25 quest of the Commission, such cost estimates as
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1 the Commission determines to be necessary to

2 carry out its duties.

3 (B) The Commission shall reimburse the

4 Director of the Congressional Budget Office for

5 expenses relating to the employment in the of6 fice of the Director of such additional staff as

7 may be necessary for the Director to comply

8 with requests by the Commission under sub9 paragraph (A).

10 (4) DETAIL OF FEDERAL EMPLOYEES.—Upon

11 the request of the Commission, the head of a Fed12 eral agency shall provide such technical assistance to

13 the Commission as the Commission determines to be

14 necessary to carry out its duties. Any such detail

15 shall not interrupt or otherwise affect the civil serv16 ice status or privileges of the Federal employee.

17 (5) TECHNICAL ASSISTANCE.—Upon the re18 quest of the Commission, the head of a Federal

19 agency shall provide such technical assistance to the

20 Commission as the Commission determines to be

21 necessary to carry out its duties.

22 (6) USE OF MAILS.—The Commission may use

23 the United States mails in the same manner and

24 under the same conditions as Federal agencies and

25 shall, for purposes of the frank, be considered a
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1 commission of Congress as described in section 3215

2 of title 39, United States Code.

3 (7) OBTAINING INFORMATION.—The Commis4 sion may secure directly from any Federal agency

5 information necessary to enable it to carry out its

6 duties, if the information may be disclosed under

7 section 552 of title 5, United States Code. Upon re8 quest of the Chairman of the Commission, the head

9 of such agency shall furnish such information to the

10 Commission.

11 (8) ADMINISTRATIVE SUPPORT SERVICES.—

12 Upon the request of the Commission, the Adminis13 trator of General Services shall provide to the Com14 mission on a reimbursable basis such administrative

15 support services as the Commission may request.

16 (9) PRINTING.—For purposes of costs relating

17 to printing and binding, including the cost of per18 sonnel detailed from the Government Printing Of19 fice, the Commission shall be deemed to be a com20 mittee of the Congress.

21 (f) REPORT.—Not later than 18 months following the

22 first meeting of the Commission, the Commission shall

23 submit a report to the President and Congress which shall

24 contain a detailed statement of only those recommenda25 tions, findings, and conclusions of the Commission that
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1 receive the approval of at least 11 members of the Com2 mission.

3 (g) TERMINATION.—The Commission shall terminate

4 30 days after the date of submission of the report required

5 in subsection (f).

6 (h) AUTHORIZATION OF APPROPRIATIONS.—There

7 are authorized to be appropriated $1,500,000 to carry out

8 this section. 60 percent of such appropriation shall be pay9 able from the Federal hospital insurance trust fund, and

10 40 percent of such appropriation shall be payable from

11 the Federal Supplementary Medical Insurance Trust

12 Fund under title XVIII of the Social Security Act (42

13 U.S.C. 1395I, 1395t).

14 SEC. 102. DEFINITION OF SERIOUS AND DISABLING CHRON15 IC ILLNESS.

16 In this Act, the term ‘‘serious and disabling chronic

17 illness’ means one or more biological or physical conditions

18 which are likely to last for an unspecified period of time,

19 or for the duration of a person’s life, for which there is

20 no known cure, and which may affect an individual’s abil21 ity to carry out basic activities of daily living, instrumental

22 activities of daily living, or both. Such conditions include

23 the following:

24 (1) Alzheimer’s Disease and related disorders.

25 (2) Arthritis.
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1 (3) Cancer.

2 (4) Cerebrovascular disease.

3 (5) Diabetes.

4 (6) Emphysema and bronchitis (including

5 chronic obstructive pulmonary disease.

6 (7) Hypertension.

7 (8) Ischemic heart disease.

8 (9) Multiple sclerosis.

9 (10) Parkinson’s disease.

10 (11) Peripheral vascular disease.

11 (12) Renal disease.

12 TITLE II—PREPARING THE

13 GROUNDWORK FOR THE NA14 TIONAL INITIATIVE TO IM15 PROVE CHRONIC ILLNESS

16 CARE

17 Subtitle A—Expansion of

18 Preventive Benefits

19 SEC. 201. AUTHORITY TO PROVIDE PREVENTIVE SERVICES

20 UNDER PART B OF THE MEDICARE PROGRAM

21 TO PREVENT, REDUCE, DELAY, OR DETECT

22 SERIOUS AND DISABLING CHRONIC ILLNESS.

23 (a) PREVENTIVE SERVICES BENEFIT.—

24 (1) IN GENERAL.—Section 1861(s) of the So25 cial Security Act (42 U.S.C. 1395x(s)) is amended—
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1 (A) by redesignating paragraphs (16) and

2 (17) as paragraphs (17) and (18), respectively;

3 (B) by striking ‘‘and’’ at the end of para4 graph (14);

5 (C) by striking the period at the end of

6 paragraph (15) and inserting ‘‘and’’; and

7 (D) by inserting after paragraph (15) the

8 following new paragraph:

9 ‘‘(16) qualified preventive services, as defined in

10 subsection (uu);’’.

11 (2) CONFORMING AMENDMENTS.—Sections

12 1864(a), 1902(a)(9)(C), and 1915(a)(1)(B)(ii)(I) of

13 such Act (42 U.S.C. 1395aa(a), 1396a(a)(9)(C), and

14 1396n(a)(1)(B)(ii)(I)) are each amended by striking

15 ‘‘paragraphs (16) and (17)’’ each place it appears

16 and inserting ‘‘paragraphs (17) and (18)’’.

17 (b) DEFINITION OF PREVENTIVE SERVICES.—Sec18 tion 1861 of such Act (42 U.S.C. 1395x) is amended by

19 adding at the end the following new subsection:

20 ‘‘Qualified Preventive Services

21 ‘‘(uu)(1) Subject to paragraph (2), the term ‘quali22 fied preventive services’ means items and services deter23 mined by the Secretary, on the basis of evidence, to be

24 reasonable and necessary for the prevention, reduction,

25 delay, or early detection of a chronic illness, that are fur-
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1 nished by qualified health care professionals (as deter2 mined by the Secretary) in such amounts and with such

3 frequency as the Secretary determines appropriate con4 sistent with the provisions of paragraph (2), and includes

5 the following services so furnished:

6 ‘‘(A) Smoking cessation services.

7 ‘‘(B) Screening for hypertension.

8 ‘‘(C) Screening for cholesterol.

9 ‘‘(D) Screening for end stage renal disease and

10 kidney function.

11 ‘‘(E) Fall prevention services.

12 ‘‘(F) Counseling for hormone replacement ther13 apy.

14 ‘‘(G) Screening for reduced visual and audio

15 acuity and low vision rehabilitation services.

16 ‘‘(H) Screening for glaucoma.

17 ‘‘(I) Medical nutrition therapy services, includ18 ing obesity and weight reduction and weight reduc19 tion maintenance services.

20 (c) EXCLUSION FROM COVERAGE CONFORMING

21 AMENDMENT.—Section 1862(a)(1)(B) of such Act (42

22 U.S.C. 1395y(a)(1)(B)) is amended by striking ‘‘section

23 1861(s)(10)’’ and inserting ‘‘section 1834(e)(6)’’.

24 (d) PAYMENT FOR PREVENTIVE SERVICES.—
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1 (1) IN GENERAL.—Section 1834 of the Social

2 Security Act (42 U.S.C. 1395m) is amended by in3 serting after subsection (d) the following new sub4 section:

5 ‘‘(e) ALTERNATIVE PAYMENT FOR PREVENTIVE

6 SERVICES.—

7 ‘‘(1) GENERAL PAYMENT RULE.—

8 ‘‘(A) QUALIFIED PREVENTIVE SERVICES.—

9 The Secretary shall establish by regulation a

10 payment amount for qualified preventive serv11 ices, as defined in section 1861(uu).

12 ‘‘(B) OTHER PREVENTIVE SERVICES.—The

13 Secretary may establish by regulation a pay14 ment amount for each type of preventive service

15 described in subparagraphs (A) through (H) of

16 paragraph (6).

17 ‘‘(2) MINIMUM PAYMENT AMOUNT.—In the case

18 of a preventive service described in paragraph (6)

19 that may be performed as a diagnostic or thera20 peutic service under this title, the payment amount

21 under this subsection for a service performed as a

22 preventive service may not be less than the payment

23 amount established under this title for such service

24 performed as a diagnostic or therapeutic service.
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1 ‘‘(3) MANNER OF PAYMENT.—In the case of a

2 preventive service described in paragraph (6) that

3 may be performed as a diagnostic or therapeutic

4 service under this title, the Secretary shall apply the

5 same method of payment under this subsection for

6 a service performed as a preventive service as the

7 Secretary applies under this title for such service

8 performed as a diagnostic or therapeutic service.

9 ‘‘(4) AUTHORITY TO WAIVE COINSURANCE.—

10 Notwithstanding any other provision of this title, in

11 the case of a preventive service described in para12 graph (6), the Secretary may waive the imposition of

13 any applicable coinsurance amount with respect to

14 such service.

15 ‘‘(5) PROHIBITION ON BALANCE BILLING.—The

16 provisions of subparagraphs (A) and (B) of section

17 1842(b)(18) shall apply to the furnishing of preven18 tive services described in paragraph (6) for which

19 payment is made under this subsection in the same

20 manner as such subparagraphs apply to services fur21 nished by a practitioner described in subparagraph

22 (C) of such section.

23 ‘‘(6) PREVENTIVE SERVICES DESCRIBED.—For

24 purposes of this subsection, the preventive services
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1 described in this paragraph are any of the following

2 services:

3 ‘‘(A) Antigens (under section

4 1861(s)(2)(G)).

5 ‘‘(B) Prostate cancer screening tests (as

6 defined in section 1861(oo)).

7 ‘‘(C) Colorectal cancer screening tests (as

8 defined in section 1861(pp)).

9 ‘‘(D) Blood-testing strips, lancets, and

10 blood glucose monitors for individuals with dia11 betes described in section 1861(n).

12 ‘‘(E) Diabetes outpatient self-management

13 training services (as defined in section

14 1861(qq)).

15 ‘‘(F)(i) Pneumococcal vaccine and its ad16 ministration and influenza vaccine and its ad17 ministration (under section 1861(s)(10)(A)).

18 ‘‘(ii) Hepatitis B vaccine and its adminis19 tration (under section 1861(s)(10)(B)).

20 ‘‘(G) Screening mammography (as defined

21 in section 1861(jj)).

22 ‘‘(H) Screening pap smear and screening

23 pelvic exam (as defined in paragraphs (1) and

24 (2), respectively, of section 1861(nn)).
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1 ‘‘(I) Bone mass measurement (as defined

2 in section 1861(rr)).

3 ‘‘(J) Qualified preventive services (as de4 fined in section 1861(uu)).’’.

5 (2) WAIVER OF DEDUCTIBLE.—The first sen6 tence of section 1833(b) of such Act (42 U.S.C.

7 1395l(b)) is amended by striking ‘‘, (5) such deduct8 ible’’ and all that follows through the period and in9 serting: ‘‘, and (5) such deductible shall not apply

10 with respect to preventive services (as described in

11 section 1834(e)(6)).’’.

12 (3) CONFORMING AMENDMENTS.—(A) Section

13 1833(a)(1)(B) of such Act (42 U.S.C.

14 1395l(a)(1)(B)) is amended by inserting ‘‘subject to

15 section 1834(e),’’ before ‘‘the amounts paid shall be

16 100 percent of the reasonable charges for such items

17 and services,’’.

18 (B) Section 1833(a)(2)(G) of such Act (42

19 U.S.C. 1395l(a)(2)(G)) is amended by inserting

20 ‘‘subject to section 1834(e),’’ before ‘‘with respect to

21 items and services’’.

22 (C) Section 1834(c)(1)(C) of such Act (42

23 U.S.C. 1395m(c)) is amended by striking ‘‘the

24 amount of the payment’’ and inserting ‘‘except as
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1 provided by the Secretary under subsection (e), the

2 amount of the payment’’

3 (D) Section 1834(d) of such Act (42 U.S.C.

4 1395m(d)) is amended—

5 (i) in paragraph (1)(A), by striking ‘‘The

6 payment amount’’ and inserting ‘‘Except as

7 provided by the Secretary under subsection (e),

8 the payment amount’’; and

9 (ii) in paragraphs (2)(A) and (3)(A), by

10 striking ‘‘payment under section 1848’’ each

11 place it appears and inserting ‘‘except as pro12 vided by the Secretary under subsection (e),

13 payment under section 1848’’.

14 (E) Section 1848(g)(2)(C) of such Act (42

15 U.S.C. 1395w–4(g)(2)(C)) is amended—

16 (i) by striking ‘‘For’’ and inserting ‘‘(i)

17 Subject to clause (ii), for’’; and

18 (ii) by adding at the end the following new

19 clause:

20 ‘‘(ii) For physicians’ services consisting of

21 preventive services (as described in section

22 1834(e)(6)) furnished on or after February 1,

23 2000, the ‘limiting charge’ shall be 100 percent

24 of the recognized payment amount under this
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1 part for nonparticipating physicians or for non2 participating suppliers or other persons.’’.

3 (F) Section 1848(g)(2)(D) of such Act (42

4 U.S.C. 1395w–4(g)(2)(D)) is amended by striking

5 ‘‘the fee schedule amount determined under sub6 section (a)’’ and all that follows and inserting ‘‘the

7 fee schedule amount determined under subsection

8 (a), in the case of preventive services (as described

9 in section 1834(e)(6)) the amount determined by the

10 Secretary under section 1834(e), or, if payment

11 under this part is made on a basis other than the

12 fee schedule under this section or other than the

13 amount established under section 1834(e) with re14 spect to such preventive services, 95 percent of the

15 other payment basis.’’.

16 (e) ADDING ‘‘LANCET’’ TO DEFINITION OF DME.—

17 Section 1861(n) of such Act (42 U.S.C. 1395x(n)) is

18 amended by striking ‘‘blood-testing strips and blood glu19 cose monitors’’ and inserting ‘‘blood-testing strips, lancets,

20 and blood glucose monitors’’.

21 (f) EFFECTIVE DATE.—The amendments made by

22 this Act apply to items and services furnished on or after

23 January 1, 2002.
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1 SEC. 202. INFORMATION CAMPAIGN ON PREVENTION.

2 The Secretary of Health and Human Services shall

3 carry out, during 2002 and 2003, a nationwide education

4 campaign to promote awareness among all Americans

5 about the nature of chronic diseases and disabilities and

6 strategies for preventing, delaying, or minimizing dis7 ability progression at various stages of chronic conditions,

8 including health promotion and self-care activities. This

9 campaign shall include the following activities:

10 (1) An information campaign, in collaboration

11 with the Social Security Administration, State health

12 insurance assistance programs, area agencies on

13 aging, and the private sector, designed to educate all

14 Americans (especially individuals with disabilities)

15 about the importance of preventive health care.

16 (2) Activities designed to encourage medicare

17 beneficiaries to use medicare preventive benefits, in18 cluding distribution of comprehensive information on

19 medicare preventive benefits to all medicare bene20 ficiaries.

21 (3) Development and testing of a health status

22 assessment tool with follow-up interventions, to as23 sist medicare beneficiaries and their providers in

24 identifying and mitigating health risks.

25 (4) A nationwide education and awareness cam26 paign designed to educate older Americans on ad-
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•HR 4981 IH

1 justments to behavior and the home environment

2 that can prevent falls and other injuries.

3 SEC. 203. STUDY OF WAYS TO ENCOURAGE LIFETIME PRE4 VENTIVE CARE DESIGNED TO MINIMIZE

5 CHRONIC ILLNESS COSTS IN THE PUBLIC

6 AND PRIVATE SECTORS.

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

8 Services shall conduct a study to estimate what preventive

9 care services (such as smoking cessation and hypertension

10 reduction.) if furnished to individuals before eligibility for

11 medicare (either due to qualification by age or by social

12 security disability) could reasonably be expected to save

13 the medicare program and other Government programs

14 (including the tax revenues to the Treasury from contin15 ued employment by individuals free of morbidity) more in

16 future discounted costs under those programs than the

17 cost of furnishing such preventive services.

18 (b) REPORT.—Not later than January 1, 2003, the

19 Secretary shall submit to Congress a report on the study

20 conducted under subsection (a) that includes such rec21 ommendations as the Secretary determines appropriate for

22 legislative or administrative changes in tax-qualified pri23 vate health insurance plans and in Government health in24 surance plans (including medicaid) to encourage the provi25 sion of such preventive care services by such plans and
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1 the use of such services by individuals. The Secretary shall

2 also recommend methodologies to extend preventive care

3 services to the uninsured and to those ineligible for em4 ployer-assisted health insurance plans.

5 SEC. 204. CONGRESSIONAL CONSIDERATION OF COST EF6 FECTIVENESS OF CHRONIC ILLNESS PREVEN7 TION MEASURES OVER TIME.

8 Not later than January 1, 2002, the Director of the

9 Congressional Budget Office shall submit to Congress a

10 report that describes methodologies to measure aggregate

11 savings, to both society and the individual, in payments

12 that would otherwise be made under the medicare, med13 icaid, and other Federal health care programs that are at14 tributable to preventive services of the type described in

15 section 1834(e) of the Social Security Act (as added by

16 section 201(d)) if such services were furnished over the

17 course of an individual’s life prior to entitlement to bene18 fits under those programs.
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1 Subtitle B—Development of Na2 tional Goals and Measures for

3 the Effective Management of

4 Chronic Illness

5 SEC. 211. ESTABLISHMENT OF A NEW OFFICE IN THE DE6 PARTMENT OF HEALTH AND HUMAN SERV7 ICES TO ENSURE COORDINATION OF CARE

8 FOR CHRONIC ILLNESS.

9 (a) IN GENERAL.—There is established within the

10 Department of Health and Human Services an office to

11 be known as the Office of Integration and Coordination

12 of Care for Chronic Illness.

13 (b) MISSION STATEMENT.—The Office of Integration

14 and Coordination of Care for Chronic Illness shall ensure

15 the satisfactory implementation of the provisions of this

16 Act.

17 SEC. 212. ESTABLISHMENT OF A NATIONAL DATABASE FOR

18 CHRONIC ILLNESS.

19 (a) ESTABLISHMENT OF DATABASE.—The Secretary

20 of Health and Human Services shall develop a database

21 to be known as the ‘‘National Database for Serious and

22 Disabling Chronic Illness’’. The purpose of the database

23 is—

24 (1) to generate accurate information about the

25 prevalence, demographics, health status, functional
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1 status, financial status, support systems, and quality

2 of life of persons suffering from serious and dis3 abling chronic illnesses;

4 (2) to compile aggregate data on the utilization,

5 cost, and outcomes of chronic illness; and

6 (3) to enable the Secretary to set goals and

7 measure progress in reducing the cost to society of

8 improving care of the chronically ill.

9 (b) EFFECTIVE DATE.—The Secretary shall establish

10 the database referred to in subsection (a) by not later than

11 the date that is 18 months after the date of the enactment

12 of this Act.

13 SEC. 213. ESTABLISHMENT OF NATIONAL GOALS TO RE14 DUCE THE PREVALENCE OF HIGH-COST

15 CHRONIC ILLNESS.

16 The Secretary of Health and Human Services shall

17 establish targets for reducing the prevalence of the high18 est-cost and fastest-growing chronic illnesses.

19 (1) In 2005, the Secretary shall establish and

20 issue national goals for reducing the prevalence of

21 high-cost chronic care conditions. Every 5 years

22 thereafter, the Secretary shall issue new national

23 goals to reflect past progress.

24 (2) Each year starting in 2010, the Secretary

25 shall issue a report on the progress in meeting the
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1 goals issued under paragraph (1), the reasons for

2 success or failure in meeting those goals, and the es3 timated savings achieved by reduced prevalence of

4 those conditions, including the relationship between

5 medicare spending and medicaid savings and the

6 cost-effectiveness of preventive benefits within and

7 across the medicare and medicaid programs.

8 (3) In establishing the national goal under

9 paragraph (1) for 2005, the Secretary shall give pri10 ority to achieving the maximum feasible reduction in

11 the chronic conditions that represent the largest pro12 portion of national health care expenditures and

13 shall consider the goals recommended by the Com14 mission established in section 101(b)(10).

15 SEC. 214. ESTABLISHMENT OF QUALITY IMPROVEMENT,

16 MEDICAL ERROR REDUCTION AND OUT17 COMES GOALS.

18 (a) IN GENERAL.—The Secretary of Health and

19 Human Services shall carry out the following requirements

20 as soon as practicable:

21 (1) Identify risk factors associated with pro22 gression of serious and disabling chronic illnesses,

23 and identify interventions for primary, secondary,

24 and tertiary prevention.
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1 (2) Prior to January 1, 2005, conduct no less

2 than 5 patient-oriented research trials (PORTs) that

3 the Secretary determines will have the greatest and

4 most immediate impact on the largest number of

5 people with chronic illness.

6 (3) Develop disease prevention guidelines for

7 the highest-cost chronic diseases and disabilities,

8 measured by severity and prevalence.

9 (4) Develop disability-based outcome measures

10 that evaluate effectiveness in preventing, delaying, or

11 minimizing the progression of chronic diseases and

12 disabilities and associated comorbidities and loss of

13 independence on a longitudinal basis.

14 (b) MEDICARE+CHOICE ORGANIZATIONS.—For

15 years beginning on or after January 1, 2005, each

16 Medicare+Choice organization shall conduct on an annual

17 basis—

18 (1) at least 1 new continuous quality improve19 ment initiative involving chronic care focusing on de20 laying the progression of disability and preventing

21 the emergence of disease-related complications; or

22 (2) at least 1 new initiative to reduce prevent23 able medical errors involving chronic care.
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1 SEC. 215. DEVELOPMENT AND IMPLEMENTATION OF COM2 MON PATIENT ASSESSMENT INSTRUMENTS

3 ACROSS SETTINGS.

4 (a) ESTABLISHMENT OF STANDARD PATIENT AS5 SESSMENT INSTRUMENTS.—The Secretary of Health and

6 Human Services, through negotiated rulemaking in ac7 cordance with subchapter III of chapter 5 of title 5,

8 United States Code, and in accordance with the require9 ments of this section, shall establish and implement stand10 ard patient assessment instruments under the medicare

11 program under title XVIII of the Social Security Act that

12 provide comparability of information and to the maximum

13 extent feasible, reduce the need for repeated evaluations

14 and data entry at each new site of service.

15 (b) CONSULTATION.—In establishing the standard

16 patient assessment instruments under subsection (a), the

17 Secretary shall consult with representatives of providers

18 of services, suppliers, and with appropriate organizations

19 and entities representing private sector entities to promote

20 the development and use of common sets of quality meas21 ures that represent the full spectrum of care obtained by

22 individuals entitled to benefits under the medicare pro23 gram under such title.

24 (c) SOLE ASSESSMENT INSTRUMENTS.—No later

25 than January 1, 2005, standard patient assessment in26 struments established under this section shall be the sole
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•HR 4981 IH

1 patient assessment instrument utilized by the Secretary

2 of Health and Human Services with respect to items and

3 services furnished under the medicare and medicaid pro4 grams, and shall supersede any patient assessment instru5 ment or method utilized by the Secretary with respect to

6 such items and services.

7 SEC. 216. DEVELOPMENT OF NATIONAL RESOURCE CEN8 TERS ON THE INTERNET FOR SERIOUS AND

9 DISABLING CHRONIC ILLNESS.

10 (a) IN GENERAL.—The Agency of Healthcare Re11 search and Quality shall develop and make available in

12 electronic format an authoritative, reliable national re13 source center for serious and disabling chronic illnesses,

14 to be used by patients and their families that include infor15 mation necessary for patient education and facilitate self16 management. The resource center shall include informa17 tion for patients and health care providers on current clin18 ical guidelines that is, as of the date of the enactment of

19 this Act, available in the National Guidelines Clearing20 house maintained by the Agency.

21 (b) NO FEE FOR USE OF INFORMATION.—The Agen22 cy of Healthcare Research and Quality may not charge

23 a fee for the use of the national resource center developed

24 under subsection (a).
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1 Subtitle C—Payment Incentives for

2 Furnishing Quality Services to

3 the Chronically Ill

4 SEC. 221. BONUS PAYMENTS TO MEDICARE+CHOICE ORGA5 NIZATIONS IMPLEMENTING COMPREHENSIVE

6 PROGRAMS OF DISEASE AND DISABILITY

7 PREVENTION THAT ACHIEVE PREVENTION

8 GOALS ESTABLISHED BY THE SECRETARY.

9 (a) ESTABLISHMENT OF PERFORMANCE POOL AC10 COUNT.—There is created within the Federal Supple11 mental Medical Insurance Trust Fund established by sec12 tion 1841 an account to be known as the ‘‘Performance

13 Bonus Pool Account’’ (in this section referred to as the

14 ‘‘Account’’).

15 (b) AMOUNTS IN ACCOUNT.—

16 (1) IN GENERAL.—The Account shall consist of

17 the amounts deposited by the Secretary of Health

18 and Human Services that are attributable to reduc19 tions in payments to Medicare+Choice organizations

20 by reason of paragraph (2).

21 (2) REDUCTIONS IN PAYMENTS TO

22 MEDICARE+CHOICE ORGANIZATIONS.—For months

23 on occurring on or after January 1, 2005, the Sec24 retary shall reduce by 1 percent the annual

25 Medicare+Choice capitation rate under section
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1 1853(c) of the Social Security Act (42 U.S.C.

2 1395w–23(c)) for Medicare+Choice organizations

3 offering Medicare+Choice plans.

4 (3) SEPARATION OF FUNDS.—Funds provided

5 under this part to the Account shall be kept sepa6 rate from all other funds within the Federal Supple7 mental Medical Insurance Trust Fund.

8 (c) PAYMENTS FROM ACCOUNT.—

9 (1) BONUS PAYMENTS TO ORGANIZATIONS

10 THAT MEET OR EXCEED CHRONIC ILLNESS TARGET

11 GOALS.—At the end of each year, beginning with

12 2005, the Secretary shall make payments from the

13 Account (in the aggregate of the total amount de14 posited in the Account during the year) to those

15 Medicare+Choice organizations offering items and

16 services under the Medicare+Choice plan in a man17 ner that meets or exceeds the chronic illness target

18 goals established in section 212 of the Chronic Ill19 ness Care Improvement Act of 2000.

20 (2) AMOUNT OF BONUS PAYMENT.—The

21 amount of a bonus payment under paragraph (1) to

22 a Medicare+Choice organization shall be weighted

23 for excellence in reduction in high-cost chronic con24 ditions under the Medicare+Choice plan, for further

25 delaying disability progression and improving health
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1 outcomes, and by such other factors as the Secretary

2 determines appropriate under such target goals.

3 (d) REPORT ON BONUS PAYMENTS TO PROVIDERS IN

4 FEE-FOR-SERVICE.—Not later than January 1, 2002, the

5 Secretary shall submit to Congress a report containing

6 recommendations for legislative and administrative

7 changes under the medicare program to provide additional

8 payments for excellence in reduction in high-cost chronic

9 conditions to providers furnishing services to medicare

10 beneficiaries who are not enrolled under a

11 Medicare+Choice plan offered by a Medicare+Choice or12 ganization under part C of the medicare program.

13 SEC. 222. INCREASED ATTENTION TO PAYMENT POLICIES

14 FOR THE CHRONICALLY ILL UNDER

15 MEDICARE+CHOICE.

16 (a) IN GENERAL.—Section 511(b)(2) of the Medi17 care, Medicaid, and SCHIP Balanced Budget Refinement

18 Act of 1999 (42 U.S.C. 1395W–23 note) is amended by

19 adding at the end the following new subsection:

20 ‘‘(G) Suggestions for more accurately measuring the

21 costs of preventing, delaying, and managing chronic illness

22 and disability.’’.

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

24 subsection (a) shall take effect as if included in the enact-
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1 ment of the Medicare, Medicaid, and SCHIP Balanced

2 Budget Refinement Act of 1999 (Public Law 106–113).

3 SEC. 223. ASSURING ADEQUATE MANPOWER AND EXPER4 TISE FOR THE TREATMENT OF CHRONIC ILL5 NESS.

6 (a) STUDY.—

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

8 Human Services shall conduct a study to evaluate

9 the need for additional physician and nonphysician

10 health care staff and expertise in the management of

11 chronic illness of medicare beneficiaries. To the ex12 tent that the Secretary determines that any physi13 cian and nonphysician health care staff and exper14 tise shortages exist, or may be likely to exist, the

15 Secretary shall evaluate methods to prevent short16 ages in physician and nonphysician health care staff

17 and expertise.

18 (2) EMPHASIS ON CERTAIN MATTERS.—Special

19 emphasis shall be given to studying strategies for

20 ensuring an adequate supply of allied health profes21 sionals (such as nurses) and paraprofessionals (such

22 as nurse aides). Strategies to be studied may

23 include—

24 (A) defining ‘‘health worker shortage

25 areas’’ to target Federal funds toward recruit-
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1 ment and retention initiatives for professional

2 and paraprofessional workers in health care;

3 (B) loan forgiveness for registered nurses

4 and licensed practical nurses under the Public

5 Health Service Act;

6 (C) stipends for paraprofessionals to cover

7 training requirements for certified nursing as8 sistants;

9 (D) day care, transportation, housing, and

10 health insurance subsidies;

11 (E) tax credits for persons that remain

12 employed by providers in health professional

13 shortage areas for a specified period of time;

14 (F) tax incentives to support employees

15 who care for elders in their own homes; and

16 (G) salary subsidies for providers located

17 in areas with low unemployment levels, as de18 fined by the Secretary of Health and Human

19 Services in consultation with the Secretary of

20 Labor.

21 (b) REPORT.—Not later than January 1, 2003, the

22 Secretary shall submit to Congress a report on the study

23 conducted under subsection (a), and shall include any rec24 ommendations for legislation or administrative action to
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1 prevent shortages in physician and nonphysician health

2 care staff and expertise.

3 (c) AUTHORITY TO ADJUST GME PAYMENTS.—

4 (1) IN GENERAL.—If the Secretary determines

5 that a shortage of physicians exists, or is likely to

6 exist, in a specialty or subspecialty of medicine that

7 has as a component the diagnosis and management

8 of chronic illness, then notwithstanding any provi9 sion of section 1886(h) of the Social Security Act

10 (42 U.S.C. 1395ww(h)) to the contrary—

11 (A) the Secretary may adjust, on a revenue

12 neutral basis, the graduate medical education

13 payment weight for approved medical residency

14 training programs in that specialty or sub15 specialty in order to encourage the movement of

16 additional medical residents into that specialty

17 or subspecialty, and

18 (B) the Secretary may increase the number

19 of residents in that specialty or subspecialty.

20 (2) EFFECTIVE DATE.—The provisions of para21 graph (1) shall apply with respect to cost reporting

22 periods beginning on or after October 1, 2002.
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1 TITLE III—DEVELOPMENT OF

2 PROTOTYPES OF INTEGRA3 TION AND COORDINATION OF

4 CARE FOR 2 CHRONIC ILL5 NESS SUBPOPULATIONS TO

6 BE EXPANDED IN 2007 TO ALL

7 SERIOUS AND DISABLING

8 CHRONIC ILLNESSES

9 SEC. 301. DISEASE MANAGEMENT SERVICES FOR SERIOUS

10 AND DISABLING CHRONIC ILLNESS.

11 Title XVIII of the Social Security Act (42 U.S.C.

12 1395 et seq.) is amended by inserting after section 1888

13 the following new section:

14 ‘‘DISEASE MANAGEMENT SERVICES FOR SERIOUS AND

15 DISABLING CHRONIC ILLNESS

16 ‘‘SEC. 1889. (a) IMPLEMENTATION OF DISEASE

17 MANAGEMENT SERVICES PROGRAM.—

18 ‘‘(1) IN GENERAL.—The Secretary shall estab19 lish and implement a comprehensive program in ac20 cordance with the provisions of this section to pro21 vide for the coverage under this title of disease man22 agement services for serious and disabling chronic

23 illnesses furnished to eligible individuals described in

24 subsection (b), under such appropriate cir25 cumstances as the Secretary prescribes, by entities
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1 designated by the Secretary with respect to diag2 noses that the Secretary determines may be helped

3 by such management. The program shall be known

4 as the National Initiative to Improve Chronic Illness

5 Care.

6 ‘‘(2) INITIAL PILOT PROJECTS.—

7 ‘‘(A) DIABETES MELLITUS; ALZ8 HEIMER’S.—Not later than 6 months after the

9 date of the termination of the National Com10 mission on Improving Chronic Illness Care (es11 tablished under section 101), the Secretary

12 shall establish and implement a pilot project to

13 provide for the coverage described in paragraph

14 (1) with respect to diabetes mellitus and an15 other pilot project to provide for such coverage

16 for Alzheimer’s disease.

17 ‘‘(B) DESIGNATION OF PILOT PROJECTS.—

18 The pilot project established under subpara19 graph (A) providing for coverage for diabetes

20 mellitus shall be known as the ‘National Diabe21 tes Pilot Initiative to Improve Chronic Illness

22 Care’. The pilot project established under sub23 paragraph (A) providing for coverage for Alz24 heimer’s disease shall be known as the ‘Na-
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1 tional Alzheimer’s Disease Pilot Initiative to

2 Improve Chronic Illness Care’.

3 ‘‘(C) INITIAL REPORT TO CONGRESS ON

4 COSTS AND COST SAVINGS.—Not later than 2

5 years after the beginning of the pilot projects

6 under this paragraph, the Secretary shall sub7 mit to Congress a report on the impact of the

8 pilot projects on costs and savings under this

9 title, and in considering savings, shall include

10 impacts on quality of life for patients and their

11 families and costs avoided across settings and

12 over time.

13 ‘‘(3) NATIONAL INITIATIVE TO IMPROVE

14 CHRONIC ILLNESS CARE.—

15 ‘‘(A) IN GENERAL.—Not later than Janu16 ary 1, 2007, the Secretary shall expand the pro17 gram, based upon the prototype established for

18 the pilot projects under paragraph (2) and the

19 recommendations of the expert panel described

20 in subparagraph (B), to provide for the cov21 erage described in paragraph (1) for all serious

22 and disabling chronic illnesses, and those ill23 nesses that may potentially be serious and dis24 abling chronic illnesses, as determined by the

25 Secretary.
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1 ‘‘(B) EXPERT PANEL DESCRIBED.—The

2 expert panel referred to in subparagraph (A) is

3 the expert panel commissioned under section

4 101(b)(6) of the Chronic Illness Care Improve5 ment Act of 2000 to analyze the experience and

6 outcomes of the initial pilot projects established

7 in paragraph (2) and to provide recommenda8 tions to the Secretary for use in the final devel9 opment of the National Initiative to Improve

10 Chronic Illness Care.

11 ‘‘(b) ADMINISTRATION BY CONTRACT.—Except as

12 otherwise specifically provided for in this section, the Sec13 retary may administer the program under this section as

14 follows:

15 ‘‘(1) IN GENERAL.—The Secretary may admin16 ister the program through a contract with a pro17 gram administrator in accordance with the provi18 sions of this subsection.

19 ‘‘(2) SCOPE OF PROGRAM ADMINISTRATOR CON20 TRACTS.—A contract under this subsection may, at

21 the Secretary’s discretion, relate to administration of

22 any or all of the programs or projects specified in

23 subsection (a). The Secretary may enter into such

24 contracts for a limited geographic area, or on a re25 gional or national basis.
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1 ‘‘(3) ELIGIBLE CONTRACTORS.—The Secretary

2 may contract for the administration of the program

3 with—

4 ‘‘(A) an entity that, under a contract

5 under section 1816 or 1842, determines the

6 amount of and makes payments for health care

7 items and services furnished under this title; or

8 ‘‘(B) any other entity with substantial ex9 perience in managing the type of program con10 cerned.

11 ‘‘(4) CONTRACT AWARD, DURATION, AND RE12 NEWAL.—

13 ‘‘(A) IN GENERAL.—A contract under this

14 subsection shall be for an initial term of up to

15 three years, renewable for additional terms of

16 up to three years.

17 ‘‘(B) NONCOMPETITIVE AWARD AND RE18 NEWAL FOR ENTITIES ADMINISTERING PART A

19 OR PART B PAYMENTS.—The Secretary may

20 enter or renew a contract under this subsection

21 with an entity described in paragraph (3)(A)

22 without regard to the requirements of section 5

23 of title 41, United States Code.

24 ‘‘(5) APPLICABILITY OF FEDERAL ACQUISITION

25 REGULATION.—The Federal Acquisition Regulation
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1 shall apply to program administration contracts

2 under this subsection.

3 ‘‘(6) PERFORMANCE STANDARDS.—The Sec4 retary shall establish performance standards for the

5 program administrator including, as applicable,

6 standards for the quality and cost-effectiveness of

7 the program administered, and such other factors as

8 the Secretary finds appropriate. The eligibility of en9 tities for the initial award, continuation, and renewal

10 of program administration contracts shall be condi11 tioned, at a minimum, on performance that meets or

12 exceeds such standards.

13 ‘‘(7) FUNCTIONS OF PROGRAM ADMINIS14 TRATOR.—A program administrator shall perform

15 any or all of the following functions, as specified by

16 the Secretary:

17 ‘‘(A) AGREEMENTS WITH INDIVIDUALS OR

18 ENTITIES FURNISHING HEALTH CARE ITEMS

19 AND SERVICES.—Determine the qualifications

20 of individuals or entities seeking to enter or

21 renew agreements to provide services under a

22 program specified in subsection (a), and as ap23 propriate enter or renew (or refuse to enter or

24 renew) such agreements on behalf of the Sec25 retary.
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1 ‘‘(B) ESTABLISHMENT OF PAYMENT

2 RATES.—Negotiate or otherwise establish, sub3 ject to the Secretary’s approval, payment rates

4 for covered health care items and services.

5 ‘‘(C) PAYMENT OF CLAIMS OR FEES.—Ad6 minister payments for health care items or serv7 ices furnished under any such program.

8 ‘‘(D) PAYMENT OF BONUSES.—Using such

9 guidelines as the Secretary shall establish, and

10 subject to the approval of the Secretary, make

11 bonus payments as described in subsection

12 (c)(2)(A)(ii) to individuals and entities fur13 nishing items or services for which payment

14 may be made under any such program.

15 ‘‘(E) LIST OF PROGRAM PARTICIPANTS.—

16 Maintain and regularly update a list of individ17 uals or entities with agreements to provide

18 health care items and services under any such

19 program, and ensure that such list, in electronic

20 and hard copy formats, is readily available, as

21 applicable, to—

22 ‘‘(i) individuals residing in the service

23 area who are entitled to benefits under

24 part A or enrolled in the program under

25 part B;
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1 ‘‘(ii) the entities responsible under

2 sections 1816 and 1842 for administering

3 payments for health care items and serv4 ices furnished; and

5 ‘‘(iii) individuals and entities pro6 viding health care items and services in the

7 service area.

8 ‘‘(F) BENEFICIARY ENROLLMENT.—Deter9 mine eligibility of individuals to enroll under a

10 program specified in subsection (a) and provide

11 enrollment-related services (but only if the Sec12 retary finds that the program administrator has

13 no conflict of interest caused by a financial re14 lationship with any individual or entity fur15 nishing items or services for which payment

16 may be made under any such program, or any

17 other conflict of interest with respect to such

18 function).

19 ‘‘(G) OVERSIGHT.—Monitor the compli20 ance of individuals and entities with agreements

21 under any such program with the conditions of

22 participation.

23 ‘‘(H) ADMINISTRATIVE REVIEW.—Conduct

24 reviews of adverse determinations specified in

25 subparagraph (A).
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1 ‘‘(I) REVIEW OF MARKETING MATE2 RIALS.—Conduct a review of marketing mate3 rials proposed by an individual or entity fur4 nishing services under any such program.

5 ‘‘(J) ADDITIONAL FUNCTIONS.—Perform

6 such other functions as the Secretary may

7 specify.

8 ‘‘(8) LIMITATION OF LIABILITY.—The provi9 sions of section 1157(b) shall apply with respect to

10 activities of contractors and their officers, employ11 ees, and agents under a contract under this sub12 section.

13 ‘‘(9) INFORMATION SHARING.—Notwithstanding

14 section 1106 and section 552a of title 5, United

15 States Code, the Secretary may disclose to an entity

16 with a program administration contract under this

17 subsection such information (including medical in18 formation) on individuals receiving health care items

19 and services under the program as the entity may

20 require to carry out its responsibilities under the

21 contract.

22 ‘‘(c) RULES APPLICABLE TO PROGRAM ADMINISTRA23 TION CONTRACTS.—

24 ‘‘(1) RECORDS, REPORTS, AND AUDITS.—The

25 Secretary is authorized to require individuals and
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1 entities with agreements to provide health care items

2 or services under programs specified under sub3 section (a), and entities with program administration

4 contracts under subsection (b), to maintain adequate

5 records, to afford the Secretary access to such

6 records (including for audit purposes), and to fur7 nish such reports and other materials (including au8 dited financial statements and performance data) as

9 the Secretary may require for purposes of implemen10 tation, oversight, and evaluation of such program

11 and of individuals’ and entities’ effectiveness in per12 formance of such agreements or contracts.

13 ‘‘(2) BONUSES.—Notwithstanding any other

14 provision of law, but subject to subparagraph

15 (B)(ii), the Secretary may make bonus payments

16 under a program specified in subsection (a) from the

17 Federal Hospital Insurance and Federal Supple18 mentary Medical Insurance Trust Funds in amounts

19 that do not exceed 50 percent of the savings to such

20 Trust Funds attributable to such programs in

21 amounts authorized under such program, in accord22 ance with the following:

23 ‘‘(A) PAYMENTS TO PROGRAM ADMINIS24 TRATORS.—The Secretary may make bonus
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•HR 4981 IH

1 payments under each program specified in sub2 section (a) to program administrators.

3 ‘‘(B) PAYMENTS TO INDIVIDUALS AND EN4 TITIES FURNISHING SERVICES.—

5 ‘‘(i) IN GENERAL.—Subject to clause

6 (ii), the Secretary may make bonus pay7 ments to individuals or entities furnishing

8 items or services for which payment may

9 be made under the programs under sub10 section (a), or may authorize a program

11 administrator to make such bonus pay12 ments in accordance with such guidelines

13 as the Secretary shall establish and subject

14 to the Secretary’s approval.

15 ‘‘(ii) LIMITATIONS.—The Secretary

16 may limit bonus payments under clause (i)

17 to particular service areas, types of individ18 uals or entities furnishing items or services

19 under a program, or kinds of items or

20 services, and may condition such payments

21 on the achievement of such standards re22 lated to efficiency, improvement in proc23 esses or outcomes of care, or such other

24 factors as the Secretary determines to be

25 appropriate.
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1 ‘‘(iii) RURAL AREAS.—In a health

2 professional shortage area located in a

3 rural or frontier county in which the provi4 sion of comprehensive disease management

5 for serious and disabling chronic illness is

6 difficult due to a shortage in health profes7 sional providing items and services under

8 this title, the Secretary may provide for

9 bonus payments under this section for

10 rural disease management services fur11 nished by such physician or other health

12 care provider to medicare beneficiaries.

13 ‘‘(3) ANTIDISCRIMINATION LIMITATION.—

14 ‘‘(A) IN GENERAL.—The Secretary shall

15 not enter into an agreement with an individual

16 or entity to provide health care items or serv17 ices under a program specified under subsection

18 (a), or with an entity to administer such a pro19 gram, unless such individual or entity guaran20 tees that it will not deny, limit, or condition the

21 coverage or provision of benefits under such

22 program, for individuals eligible to be enrolled

23 under such program, based on any health sta24 tus-related factor described in section

25 2702(a)(1) of the Public Health Service Act.
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•HR 4981 IH

1 ‘‘(B) CONSTRUCTION.—Subparagraph (A)

2 shall not be construed to prohibit such indi3 vidual or entity from taking any action explic4 itly authorized by the provisions of this section.

5 ‘‘(d) INDIVIDUALS ELIGIBLE FOR DISEASE MANAGE6 MENT SERVICES FOR CHRONIC ILLNESS.—No individual

7 shall be eligible for enrollment in a disease management

8 program under this section unless the Secretary finds the

9 following with respect to the individual:

10 ‘‘(1) NATIONAL DIABETES PILOT INITIATIVE TO

11 IMPROVE CHRONIC ILLNESS CARE.—With respect to

12 individuals participating in the National Diabetes

13 Pilot Initiative To Improve Chronic Illness Care, the

14 individual has been diagnosed with diabetes mellitus.

15 ‘‘(2) NATIONAL ALZHEIMER’S DISEASE PILOT

16 INITIATIVE TO IMPROVE CHRONIC ILLNESS CARE.—

17 With respect to individuals participating in the Na18 tional Alzheimer’s Disease Pilot Initiative To Im19 prove Chronic Illness Care, the individual has been

20 diagnosed with Alzheimer’s disease.

21 ‘‘(3) NATIONAL INITIATIVE TO IMPROVE

22 CHRONIC ILLNESS CARE.—With respect to individ23 uals participating in the National Initiative To Im24 prove Chronic Illness Care, as follows:
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1 ‘‘(A) DIAGNOSIS.—The individual has been

2 diagnosed with congestive heart failure, chronic

3 obstructive pulmonary disease, diabetes, Alz4 heimer’s disease and other progressive demen5 tias, Parkinson’s disease, multiple sclerosis, de6 pression, or any other diagnosis, if the Sec7 retary has determined with respect to such di8 agnoses that there is evidence that the provision

9 of disease management services, over clinically

10 relevant time periods, to cohorts of individuals

11 with such diagnoses can reasonably be expected

12 to improve processes or outcomes of health care

13 (or in the case of individuals with advanced ill14 ness, improved quality of life) for the medicare

15 population and to have some (partial or total)

16 offsetting savings in this title or other Federal

17 programs.

18 ‘‘(B) ADDITIONAL FACTORS.—The Sec19 retary may establish such additional clinical cri20 teria for eligibility for enrollment under such a

21 disease management program as the Secretary

22 determines appropriate, including certain clin23 ical characteristics or conditions of the indi24 vidual, certain patterns of utilization of the in25 dividual, or other factors indicating the need for
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1 and potential effectiveness of disease manage2 ment for the individual.

3 ‘‘(e) PROCEDURES TO FACILITATE ENROLLMENT.—

4 The Secretary shall develop and implement procedures de5 signed to facilitate enrollment of eligible individuals in the

6 programs under this section.

7 ‘‘(f) INTEGRATION AND COORDINATION OF CARE FOR

8 CHRONIC ILLNESS.—The Secretary shall develop an inte9 grated and coordinated health care delivery system for se10 rious and disabling chronic illness based on the following

11 components:

12 ‘‘(1) A chronic care network of providers char13 acterized by coordination of medicare, medicaid and

14 other programs or agencies that provide directly or

15 otherwise for the care of patients with serious and

16 disabling chronic illness.

17 ‘‘(2) A payment model that aligns the financial

18 incentives of the health care providers of the chron19 ically ill in order to reduce disincentives to providing

20 high quality care with improved cost effectiveness

21 and simplicity in billing for providers and bene22 ficiaries. Under the payment model, the Secretary

23 may waive any other provision of this title that re24 stricts access to the most appropriate care in the

25 lowest cost setting, such as the 3-day hospitalization
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•HR 4981 IH

1 rule before a beneficiary is eligible for skilled nurs2 ing facility care, the homebound definition as a bar3 rier to care at an adult day care facility, and such

4 other provisions as the Secretary determines appro5 priate.

6 ‘‘(3) An administrative model that functions to

7 efficiently match health care services to the range of

8 health care needs and reduces unnecessary, duplica9 tive services and paperwork.

10 ‘‘(4) Integrated information systems, including

11 integrated administrative and financial data systems

12 as well as a common medical record for participating

13 chronic care enrollees that is used by chronic care

14 network providers and continuously supplemented

15 and updated over time.

16 ‘‘(5) Ongoing evaluation of cost effectiveness of

17 services based on longitudinal and aggregate system

18 costs.

19 ‘‘(g) DISEASE MANAGEMENT FOR CHRONIC ILLNESS

20 SERVICES.—

21 ‘‘(1) IN GENERAL.— Subject to the cost-effec22 tiveness standards established under subsection

23 (b)(6), disease management services provided to an

24 individual under this section shall include the fol25 lowing:
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•HR 4981 IH

1 ‘‘(A) Initial and periodic health screening

2 and assessment.

3 ‘‘(B) Management that provides a com4 prehensive range of services to the chronically

5 ill, based on best practices and established clin6 ical guidelines (including coordination with

7 other providers), and referral for medical and

8 other health services related to the managed di9 agnosis.

10 ‘‘(C) Case management to facilitate con11 tinuity of care and patient adherence to the

12 plan of care with provisions for reimbursement

13 for case management.

14 ‘‘(D) Monitoring and control of medica15 tions.

16 ‘‘(E) Interdisciplinary, collaborative care

17 by a health care team based on efficient com18 munication between the various health care pro19 viders.

20 ‘‘(F) Preventive care designed to foster

21 early recognition of symptoms, reduce the prev22 alence of comorbidities, and reduce or delay the

23 onset and progression of disability and depend24 ence.
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•HR 4981 IH

1 ‘‘(G) Quality improvement and enhance2 ment of patient safety with reduction of pre3 ventable medical errors.

4 ‘‘(H) Health care delivery that fosters self5 management, patient goalsetting, patient em6 powerment, self-reliance, dignity, and independ7 ence.

8 ‘‘(I) Education and counseling for patient

9 and family directed at issues of coping and ad10 justment, practical concerns, spiritual needs,

11 and others that serve the distinct needs of the

12 patient and family at each stage of illness, in13 cluding the time of diagnosis, early illness, mid14 dle stages of illness, and advanced illness.

15 ‘‘(J) Nursing or other health professional

16 home visits, as appropriate.

17 ‘‘(K) Providing access for electronic con18 sultations with physicians or other appropriate

19 medical professionals, including 24-hour avail20 ability for emergency consultations; in devel21 oping such electronic consultations, the Sec22 retary shall draw on the results, to the extent

23 available, of section 4207 of the Balanced

24 Budget Act.
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•HR 4981 IH

1 ‘‘(L) Managing and facilitating the transi2 tion to other care arrangements in preparation

3 for termination of the disease management en4 rollment.

5 ‘‘(M) Such other services for which pay6 ment would not otherwise be made under this

7 title, as the Secretary shall determine to be ap8 propriate.

9 ‘‘(2) VARIATIONS IN SERVICE PACKAGES.—The

10 type and combinations of disease management serv11 ices furnished under agreements under this section

12 may vary (as permitted or required by the Sec13 retary) according to the types of diagnoses, condi14 tions, patient profiles being managed, expertise of

15 the disease management organization, geographic

16 isolation, and other factors the Secretary finds ap17 propriate.

18 ‘‘(h) ENROLLMENT OF INDIVIDUALS IN DISEASE

19 MANAGEMENT PROGRAMS.—

20 ‘‘(1) EFFECTIVE DATE AND DURATION.—En21 rollment of an individual in the program under this

22 section shall remain in effect for a period to be de23 termined by the Secretary and shall be automatically

24 renewed for additional periods, unless terminated in
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•HR 4981 IH

1 accordance with such procedures as the Secretary

2 shall establish by regulation.

3 ‘‘(2) LIMITATION OF REENROLLMENT.—The

4 Secretary may establish limits on an individual’s eli5 gibility to reenroll in the program under this section

6 if the individual has disenrolled more than once dur7 ing a specified time period.

8 ‘‘(i) DISEASE MANAGEMENT REQUIREMENT.—Not9 withstanding any other provision of this title, the Sec10 retary may provide that an individual enrolled in the pro11 gram under this section may be entitled to payment under

12 this title for any specified health care items or services

13 only if the items or services have been furnished by the

14 disease management organization, or coordinated through

15 the disease management services program. Under such

16 provision, the Secretary shall prescribe exceptions for

17 emergency medical services as described in section

18 1852(d)(3), and other exceptions determined by the Sec19 retary for the delivery of timely and needed care.

20 ‘‘(j) AGREEMENT WITH DISEASE MANAGEMENT

21 PROVIDERS.—

22 ‘‘(1) ENTITIES ELIGIBLE.—Entities qualified to

23 enter into agreements with the Secretary for the

24 provision of disease management services under this

25 section include entities that have demonstrated the
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1 ability to meet the performance standards and other

2 criteria established by the Secretary with respect

3 to—

4 ‘‘(A) the management of each diagnosis

5 and condition with respect to which the entity,

6 if designated, would furnish disease manage7 ment services under this section; and

8 ‘‘(B) the implementation of each disease

9 management approach that the entity, if des10 ignated, would implement under this section.

11 ‘‘(2) CONDITIONS OF PARTICIPATION.—In order

12 to be eligible to provide disease management services

13 under this section, an entity shall—

14 ‘‘(A) have in effect an agreement with the

15 Secretary setting forth such obligations of the

16 entity as a disease management organization

17 under this section as the Secretary shall pre18 scribe;

19 ‘‘(B) meet the standards established by the

20 Secretary under subsection (k); and

21 ‘‘(C) meet such other conditions as the

22 Secretary may establish.

23 ‘‘(3) SECRETARY’S OPTION FOR NONCOMPETI24 TIVE DESIGNATION.—The Secretary may designate

25 an entity to provide disease management services
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•HR 4981 IH

1 under this section without regard to the require2 ments of section 5 of title 41, United States Code.

3 ‘‘(k) QUALITY STANDARDS.—The Secretary shall es4 tablish standards for, and procedures for assessing, the

5 quality of care provided by disease management organiza6 tions under this section, which shall include—

7 ‘‘(1) performance standards with respect to the

8 processes or outcomes of health care or the health

9 status of enrolled individuals, including procedures

10 for establishing a baseline and measuring changes in

11 health care processes or health outcomes with re12 spect to managed diseases or health conditions;

13 ‘‘(2) a requirement that the organization meet

14 such licensure and other accreditation standards as

15 the Secretary may find appropriate; and

16 ‘‘(3) such other quality standards, including pa17 tient satisfaction, as the Secretary may find appro18 priate.

19 ‘‘(l) PAYMENT.—The Secretary may negotiate or oth20 erwise establish payment terms and rates for the provision

21 of services under the program under this section, and

22 shall, to the extent practicable, base such payment terms

23 and rates methodology on payment methodologies estab24 lished under this title.
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•HR 4981 IH

1 ‘‘(m) DEFINITION OF SERIOUS AND DISABLING

2 CHRONIC ILLNESS.—In this section, the term ‘‘serious

3 and disabling chronic condition’ means one or more bio4 logical or physical conditions which are likely to last for

5 an unspecified period of time, or for the duration of a per6 son’s life, for which there is no known cure, and which

7 may affect an individual’s ability to carry out basic activi8 ties of daily living, instrumental activities of daily living,

9 or both. Such conditions include the following:

10 ‘‘(1) Alzheimer’s Disease and related disorders.

11 ‘‘(2) Arthritis.

12 ‘‘(3) Cancer.

13 ‘‘(4) Cerebrovascular disease.

14 ‘‘(5) Diabetes.

15 ‘‘(6) Emphysema and bronchitis (including

16 chronic obstructive pulmonary disease.

17 ‘‘(7) Hypertension.

18 ‘‘(8) Ischemic heart disease.

19 ‘‘(9) Multiple sclerosis.

20 ‘‘(10) Parkinson’s disease.

21 ‘‘(11) Peripheral vascular disease.

22 ‘‘(12) Renal disease.’’.

23 (b) COVERAGE OF DISEASE MANAGEMENT SERVICES

24 AS A PART B MEDICAL SERVICE.—
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1 (1) IN GENERAL.—Section 1861(s) of the So2 cial Security Act (42 U.S.C. 1395x(s)), as amended

3 by section 201, is further amended—

4 (A) by redesignating paragraphs (17) and

5 (18) as paragraphs (18) and (19), respectively;

6 (B) by striking ‘‘and’’ at the end of para7 graph (15);

8 (C) by striking the period at the end of

9 paragraph (16) and inserting ‘‘and’’; and

10 (D) by inserting after paragraph (16) the

11 following new paragraph:

12 ‘‘(17) disease management services furnished in

13 accordance with section 1889.’’.

14 (2) PART B COINSURANCE AND DEDUCTIBLE

15 NOT APPLICABLE TO DISEASE MANAGEMENT SERV16 ICES.—

17 (A) COINSURANCE.—Section 1833(a)(1) of

18 the Social Security Act (42 U.S.C. 1395l(a)(1))

19 is amended—

20 (i) by striking ‘‘and’’ before ‘‘(S)’’;

21 and

22 (ii) by inserting before the semicolon

23 at the end the following: ‘‘, and (T) with

24 respect to disease management services de25 scribed in section 1861(s)(16), the
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1 amounts paid shall be 100 percent of the

2 payment amounts established under section

3 1889’’.

4 (B) DEDUCTIBLE.—The first sentence of

5 section 1833(b) of the Social Security Act (42

6 U.S.C. 1395l(b)) is amended—

7 (i) by striking ‘‘and’’ before ‘‘(6)’’;

8 and

9 (ii) by inserting before the period the

10 following: ‘‘, and (7) such deductible shall

11 not apply with respect to disease manage12 ment services (as described in section

13 1861(s)(16))’’.

14 (3) CONFORMING AMENDMENTS.—Sections

15 1864(a), 1902(a)(9)(C), and 1915(a)(1)(B)(ii)(I) of

16 the Social Security Act (42 U.S.C. 1395aa(a),

17 1396a(a)(9)(C), and 1396n(a)(1)(B)(ii)(I)), as

18 amended by section 201(a)(2), are each further

19 amended by striking ‘‘paragraphs (17) and (18)’’

20 each place it appears and inserting ‘‘paragraphs

21 (18) and (19)’’.

22 (c) ENROLLMENT.—

23 (1) IN GENERAL.—To carry out the provisions

24 of section 1889 of the Social Security Act, as added

25 by subsection (a), the Secretary of Health and
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1 Human Services shall carry out a national public re2 lations and enrollment effort aimed at both providers

3 and consumers of health care to ensure widespread

4 awareness of the importance of serious and disabling

5 chronic illness management and the services avail6 able under section 1889 to initiate—

7 (A) in 2002, the National Diabetes Pilot

8 Initiative to Improve Chronic Illness Care and

9 the National Alzheimer’s Disease Pilot Initia10 tive to Improve Chronic Illness Care, estab11 lished in subsection (a)(2) of such section; and

12 (B) in 2006, the National Initiative to Im13 prove Chronic Illness Care, established in sub14 section (a)(3) of such section.

15 (2) AUTHORIZATION OF APPROPRIATIONS.—

16 There are authorized to be appropriated to the Sec17 retary of Health and Human Services in appropriate

18 part from the Federal Hospital Insurance and Fed19 eral Supplementary Medical Insurance Trust Funds

20 such sums as are necessary to carry out the enroll21 ment effort under paragraph (1).
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1 TITLE IV—INTEGRATING MEDI2 CARE AND MEDICAID FOR

3 DUAL ELIGIBLES

4 SEC. 401. PROVISION OF WAIVER AUTHORITY TO SERVE

5 DUAL ELIGIBLES MORE EFFICIENTLY.

6 (a) MEDICARE FEE-FOR-SERVICE.—

7 (1) IN GENERAL.—Title XVIII of the Social Se8 curity Act is amended by adding at the end the fol9 lowing new section:

10 ‘‘CLARIFICATION OF WAIVER AUTHORITY TO COORDINATE

11 AND INTEGRATE SERVICES AND ADMINISTRATION

12 UNDER THIS TITLE AND TITLE XIX

13 ‘‘SEC. 1897. (a) IN GENERAL.—A State, health plan,

14 or provider may submit to the Secretary a request to waive

15 requirements of this title to permit States to enhance the

16 coordination and integration of items and services and ad17 ministration provided under this title with items and serv18 ices provided under title XIX.

19 ‘‘(b) DEADLINE FOR ACTION ON WAIVER.—The Sec20 retary shall approve, deny, or request additional informa21 tion for a request for waiver submitted under subsection

22 (a) by not later than 90 days after the receipt of such

23 submission.

24 ‘‘(c) COORDINATION AND INTEGRATION OF ITEMS

25 AND SERVICES DESCRIBED.—The coordination and inte-
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1 gration of items and services referred to in subsection (a)

2 may include the following:

3 ‘‘(1) A process for unified enrollment under

4 both titles.

5 ‘‘(2) A unified quality improvement program.

6 ‘‘(3) A unified grievance and appeals process.

7 ‘‘(4) Unified provider and payer reporting re8 quirements.

9 ‘‘(5) Alternative payment methodologies under

10 this title, including modified risk adjusters and risk

11 sharing approaches.

12 ‘‘(d) LIMITATION.—

13 ‘‘(1) IN GENERAL.—The Secretary shall not

14 grant a waiver under this section unless the Sec15 retary determines that services furnished under the

16 waiver—

17 ‘‘(A) are offered to an individual for which

18 coverage for items and services is provided for

19 under this title and title XIX; and

20 ‘‘(B) are cost effective.

21 ‘‘(2) COST EFFECTIVE DEFINED.—For pur22 poses of paragraph (1), the term ‘cost effective’

23 means that services offered under a waiver granted

24 by the Secretary under this section do not result, in

25 the aggregate, in greater combined payments under
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1 this title and title XIX for such services than the

2 combined payments that would have been made

3 under such titles on a fee-for-service basis to an ac4 tuarially equivalent population group.’’.

5 (2) EFFECTIVE DATE.—The amendment made

6 by paragraph (1) shall take effect January 1, 2001.

7 (b) MEDICAID.—

8 (1) IN GENERAL.—Section 1915(a) of the So9 cial Security Act (42 U.S.C. 1396n(a)) is

10 amended—

11 (A) by striking ‘‘or’’ at the end of para12 graph (1);

13 (B) by striking the period at the end of

14 paragraph (2) and adding ‘‘or’’; and

15 (C) by adding at the end the following new

16 paragraph:

17 ‘‘(3) consistent with the provisions of subsection

18 (i) has entered into a contract with an organization

19 to provide care and services, which may include care

20 and services in addition to those offered under the

21 State plan, to individuals—

22 ‘‘(A) who are eligible for medical assist23 ance,

24 ‘‘(B) who elect to obtain such care and

25 services from such organization, and
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1 ‘‘(C) who are at least 65 years of age or

2 have a disability or a serious and disabling

3 chronic illness, including individuals who are

4 also eligible for health insurance benefits under

5 title XVIII.’’.

6 (2) REQUIREMENTS.—Section 1915 of the So7 cial Security Act (42 U.S.C. 1396n) is amended by

8 adding at the end the following new subsection:

9 ‘‘(i) For purposes of contracts entered into under

10 subsection (a)(3), the following provisions apply:

11 ‘‘(1) For purposes of payments to States for

12 medical assistance under this title, individuals who

13 are eligible to receive care and services under sub14 section (a)(3) and who meet the income and re15 source eligibility requirements of individuals who are

16 eligible for medical assistance under section

17 1902(a)(10)(II)(ii)(VI) shall be treated as individ18 uals described in such section during enrollment

19 with an organization under such subsection.

20 ‘‘(2) Section 1924 applies to individuals receiv21 ing care and services under subsection (a)(3), and in

22 applying such section under subsection (a)(3), the

23 term ‘institutionalized spouse’ means an individual—

24 ‘‘(A) who is in a medical institution or

25 nursing facility or who (at the option of the
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1 State) is described in section

2 1902(a)(10)(II)(ii)(VI), and

3 ‘‘(B) whose spouse is not in a medical in4 stitution or nursing facility.

5 ‘‘(3) A State may seek a waiver under title

6 XVIII, to integrate care and services furnished

7 under this title with items and services furnished

8 under title XVIII.

9 ‘‘(4) Care and services provided under sub10 section (a)(3) shall be cost effective, determined as

11 follows:

12 ‘‘(A) In the case of a program imple13 mented under subsection (a)(3) with no cor14 responding waiver under title XVIII, the aggre15 gate medical assistance payments to the organi16 zation for a defined scope of care and services

17 furnished to beneficiaries may not exceed the

18 medical assistance costs of providing those

19 same services on a fee-for-service basis to an

20 actuarially equivalent population.

21 ‘‘(B) In the case of a program imple22 mented under subsection (a)(3) with a waiver

23 under title XVIII, services offered do not result,

24 in the aggregate, in greater combined payments

25 under this title and title XVIII for such services
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1 than the combined payments that would have

2 been made under such titles on a fee-for-service

3 basis to an actuarially equivalent population

4 group.’’.

Æ