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[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4981 Introduced in House (IH)]

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.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Chronic Illness 
Care Improvement Act of 2000''.
    (b) Table of Contents.--The table of contents of 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.
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.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) Chronic disease is America's number one health care 
        problem, yet chronic care is provided by a fragmented health 
        care system that was designed to meet the needs of acute 
        episodes of illness.
            (2) Chronic disease is America's highest cost and fastest 
        growing health care problem, accounting for 90 percent of all 
        morbidity and 80 percent of all deaths. While chronic 
        conditions affect persons of all ages, the elderly are at the 
        greatest risk. About 88 percent of the elderly have 1 chronic 
        condition and almost 70 percent have more than 1 condition. The 
        number of persons over 65 years of age will increase from 13 
        percent of the population to almost 21 percent in 2040.
            (3) Direct and indirect costs for chronic conditions 
        reached $659,000,000,000 in 1990 and are projected to nearly 
        double by the year 2050. Per capita medical expenditures for 
        persons with chronic conditions are, on average, almost 4 times 
        the costs for persons with acute conditions. Nearly 70 percent 
        of the Nation's personal health care expenditures are for 
        people with chronic conditions.
            (4) The needs of the chronically ill span time, place, and 
        health profession, yet providers and information systems 
        function to deliver separate and unrelated services, even 
        though they are providing care to the same person. The current 
        structure of administration, financing, and oversight of 
        Government-sponsored programs locks into place a fragmented, 
        institutionally based, reactive approach to care that is at 
        odds with the coordinated and seamless continuum of care 
        chronic illness requires.
            (5) This systems problem requires a systems solution based 
        on the following components:
                    (A) Extended care pathways that follow patients 
                across settings and include preventive, primary, acute, 
                transitional, and residential and community-based long-
                term care services.
                    (B) Targeted approaches to care delivery for high-
                risk populations including screening programs, early 
                intervention, and clinical guidelines for preventing, 
                delaying, or minimizing disability.
                    (C) Health promotion strategies, including patient 
                education, that encourage self-management and patient 
                empowerment.
                    (D) Chronic disease management and case management 
                with the authority to manage care, utilization, and 
                costs across the spectrum of services.
                    (E) Integrated information systems that track 
                health status, utilization, cost, and quality data 
                across providers/settings and throughout the course of 
                chronic conditions.
                    (F) Financing strategies that align financial 
                incentives among providers to achieve mutual and 
                consistent care, quality, and cost objectives.
                    (G) Education for health professionals to meet the 
                long-term comprehensive needs of chronic conditions.
                    (H) Support for family caregivers through the 
                development of integrated models of family centered 
                care that encompass health and supportive services for 
                patients and family caregivers.
            (6) This transformation of health care delivery for chronic 
        conditions will result in a dramatic improvement in the quality 
        of care characterized by--
                    (A) a reduction in the prevalence of chronic 
                conditions;
                    (B) a reduction in the progression of disability;
                    (C) improved functional status at all stages of 
                chronic disease;
                    (D) improved patient satisfaction; and
                    (E) improved quality of life.
            (7) The cost of this new approach to chronic care will be 
        borne by a combination of short-term and long-term savings as 
        follows:
                    (A) Short-term savings result from a reduction of 
                duplicative services (including multiple admissions and 
                discharges with mandated comprehensive intake 
                assessments and discharge plans) from today's ``silos'' 
                of health care settings, as well as unnecessary 
                diagnostic investigations and consultations that result 
                from inaccessible data.
                    (B) Long-term savings result from the reduction in 
                preventable complications and the prolongation of 
                functional independence. Societal costs related to lost 
                productivity and workdays for both patients and 
                caregivers will also decline.

     TITLE I--NATIONAL COMMISSION ON IMPROVING CHRONIC ILLNESS CARE

SEC. 101. NATIONAL COMMISSION ON IMPROVING CHRONIC ILLNESS CARE.

    (a) Establishment.--There is established a commission to be known 
as the National Commission on Improving Chronic Illness Care (in this 
section referred to as the ``Commission'').
    (b) Duties of the Commission.--The Commission shall carry out the 
following duties:
            (1) Develop a national policy to coordinate the multiple 
        Federal resources devoted to health care for persons with 
        serious and disabling chronic illnesses in order to facilitate 
        a comprehensive continuum of care. With respect to chronically 
        ill persons who are eligible for health care benefits under any 
        or any combination of the medicare or medicaid programs 
        (administered by the Department of Health and Human Services), 
        or under chapter 17 of title 38, United States Code 
        (administered by the Department of Veterans Affairs), the 
        Commission shall give special emphasis to coordination of 
        health care and related services furnished by those departments 
        and other departments serving medicare beneficiaries, including 
        the Departments of Agriculture, Interior, and Housing and Urban 
        Development. The Commission shall examine how these programs 
        can be made to coordinate better with each other and with State 
        and local programs to provide a continuum of care to those with 
        serious and disabling chronic illnesses.
            (2) Review and analyze whether coordination of the multiple 
        Federal resources is best accomplished by a completely new 
        governmental structure, or a new structure within an existing 
        department, or a new mechanism for coordination of the various 
        Government programs.
            (3) Make suggestions regarding amendments to the provisions 
        of titles II, III, and IV of this Act.
            (4) Identify statutory and regulatory barriers to effective 
        care for serious and disabling chronic illness and develop 
        recommendations for legislative and regulatory changes that 
        would facilitate the goals in the provisions described in 
        paragraph (4), including barriers to the coordination of care 
        across provider settings and the coordination of benefit 
        coverage under Federal and State programs, with special 
        attention given to the medicare and medicaid programs.
            (5) Develop a plan to integrate medicare and medicaid 
        Federal budget functions for purposes of projecting future 
        costs of serious and disabling chronic conditions and cost 
        savings from improved care of the chronically ill. These costs 
        and cost savings must be measured longitudinally and across 
        professional disciplines and provider settings.
            (6) Develop guidelines for payment methods that establish 
        compatible financial incentives among health care providers and 
        professionals serving the same chronically ill persons in order 
        to facilitate increased quality of care, greater cost 
        effectiveness, and simplicity of billing for providers and 
        beneficiaries.
            (7) Commission an expert panel, including experts in 
        disease management, care of serious and disabling chronic 
        illness, and outcomes research, to make recommendations for the 
        design of the prototypes, supervise data gathering, generate 
        feedback, and define endpoints in order to analyze the 
        experience of the prototypes, (the National Diabetes Pilot 
        Initiative to Improve Chronic Illness Care and the National 
        Alzheimer's Disease Pilot Initiative To Improve Chronic Illness 
        Care established under title III) in order to enhance the 
        design of the later expanded program (The National Initiative 
        to Improve Chronic Illness Care). The expert panel will meet 
        concurrently during the tenure of the Commission and will 
        reconvene in the third year of the National Diabetes and 
        Alzheimer's Disease Pilot Initiatives to review the operation 
        and outcomes of those initiatives and submit a report of their 
        recommendations not later than 12 months after they reconvene. 
        Such expert panel may hold hearings and otherwise seek advice 
        from the public and outside experts, develop papers, and seek a 
        consensus on its recommendations.
            (8) Commission an expert panel to develop a plan to 
        introduce a single, integrated medical record for patients with 
        chronic conditions in order to eliminate duplication of 
        assessment, care planning, and documentation functions and to 
        allow physician orders, chart information, diagnoses, and 
        assessments to flow continuously across levels of care. Such 
        expert panel may hold hearings and otherwise seek advice from 
        the public and outside experts, develop papers, and seek a 
        consensus on its recommendations.
            (9) Commission an expert panel to recommend new outcome 
        measures of cost-effectiveness based on improvements in or 
        maintenance of functional status, delayed dependency, reducing 
        the rate of disability progression, quality of life, and such 
        other related matters as the panel determines appropriate. Such 
        expert panel may hold hearings and otherwise seek advice from 
        the public and outside experts, develop papers, and seek a 
        consensus on its recommendations.
            (10) Contract for reports detailing the need for changes in 
        current laws and regulations in order to achieve the 
        aforementioned provisions.
            (11) Recommend national goals for reduction in serious and 
        disabling chronic illness and cost savings over the next 
        generation.
            (12) Analyze the impact of emerging trends in the 
        management of serious and disabling chronic illness, 
        disability, and long-term care, including such issues as 
        genetic testing, Internet technology, patient empowerment, and 
        increasing utilization of home health care and their 
        implications for future health care delivery to the chronically 
        ill.
            (13) Review and analyze such other matters as the 
        Commission determines to be appropriate.
    (c) Membership.--
            (1) Number and appointment.--
                    (A) In general.--Subject to subparagraph (B), the 
                Commission shall be composed of 17 members of whom--
                            (i) 4 shall be appointed by the President;
                            (ii) 6 shall be appointed by the Speaker of 
                        the House of Representatives, in consultation 
                        with the minority leader of the House of 
                        Representatives, of whom not more that 4 shall 
                        be of the same political party;
                            (iii) 6 shall be appointed by the majority 
                        leader of the Senate, in consultation with the 
                        minority leader of the Senate, of whom not more 
                        than 4 shall be of the same political party; 
                        and
                            (iv) 1, who shall serve as Chairman of the 
                        Commission, appointed jointly by the Speaker of 
                        the House of Representatives, in consultation 
                        with the minority leader of the House of 
                        Representatives.
                    (B) Limitation on number of members of congress.--
                Of the members appointed under subparagraph (A), no 
                more than 2 members of the House of Representatives and 
                2 members of the Senate may serve as a member of the 
                Commission.
                    (C) Qualifications.--Members of the Commission 
                shall include representatives from--
                            (i) Federal and State agencies serving the 
                        elderly, disabled, and chronically ill;
                            (ii) public health;
                            (iii) consumer representatives for various 
                        chronic diseases;
                            (iv) primary care providers;
                            (v) acute care providers;
                            (vi) institutional and community-based 
                        long-term care providers;
                            (vii) managed care health plans; and
                            (viii) researchers in health care financing 
                        and chronic disease management.
            (2) Deadline for appointment.--Members of the Commission 
        shall be appointed by not later than 90 days after the 
        enactment of this Act.
            (3) Terms of appointment.--The term of any appointment 
        under paragraph (1) to the Commission shall be for the life of 
        the Commission.
            (4) Meetings.--The Commission shall meet at the call of its 
        Chairman or a majority of its members.
            (5) Quorum.--A quorum shall consist of 8 members of the 
        Commission, except that 4 members may conduct a hearing under 
        subsection (e).
            (6) Vacancies.--A vacancy on the Commission shall be filled 
        in the same manner in which the original appointment was made, 
        not later than 30 days after the Commission is given notice of 
        the vacancy and shall not affect the power of the remaining 
        members to execute the duties of the Commission.
            (7) Compensation.--Members of the Commission shall receive 
        no additional pay, allowances, or benefits by reason of their 
        service on the Commission.
            (8) Expenses.--Each member of the Commission shall receive 
        travel expenses and per diem in lieu of subsistence in 
        accordance with sections 5702 and 5703 of title 5, United 
        States Code.
    (d) Staff and Support Services.--
            (1) Executive director.--
                    (A) Appointment.--The Chairman shall appoint an 
                executive director of the Commission.
                    (B) Compensation.--The executive director shall be 
                paid the rate of basic pay for level V of the Executive 
                Schedule.
            (2) Staff.--With the approval of the Commission, the 
        executive director may appoint such personnel as the executive 
        director considers appropriate.
            (3) Applicability of civil service laws.--The staff of the 
        Commission shall be appointed without regard to the provisions 
        of title 5, United States Code, governing appointments in the 
        competitive service, and shall be paid without regard to the 
        provisions of title 5, United States Code, governing 
        appointments in the competitive service, and shall be paid 
        without regard to the provisions of chapter 51 and subchapter 
        III of chapter 53 of such title (relating to classification and 
        General Schedule pay rates).
            (4) Experts and consultants.--With the approval of the 
        Commission, the executive director may procure temporary and 
        intermittent services under section 3109(b) of title 5, United 
        States Code.
            (5) Physical facilities.--The Administrator of the General 
        Services Administration shall locate suitable office space for 
        the operation of the Commission. The facilities shall serve as 
        the headquarters of the Commission and shall include all 
        necessary equipment and incidentals required for the proper 
        functioning of the Commission.
    (e) Powers of Commission.--
            (1) Hearings and other activities.--For the purpose of 
        carrying out its duties, the Commission may hold such hearings 
        and undertake such other activities as the Commission 
        determines to be necessary to carry out its duties.
            (2) Studies by gao.--Upon the request of the Commission, 
        the Comptroller General shall conduct such studies or 
        investigations as the Commission determines to be necessary to 
        carry out its duties.
            (3) Cost estimates by congressional budget office and 
        office of the chief actuary of hcfa.--
                    (A) The Director of the Congressional Budget Office 
                or the Chief Actuary of the Health Care Financing 
                Administration, or both, shall provide to the 
                Commission, upon the request of the Commission, such 
                cost estimates as the Commission determines to be 
                necessary to carry out its duties.
                    (B) The Commission shall reimburse the Director of 
                the Congressional Budget Office for expenses relating 
                to the employment in the office of the Director of such 
                additional staff as may be necessary for the Director 
                to comply with requests by the Commission under 
                subparagraph (A).
            (4) Detail of federal employees.--Upon the request of the 
        Commission, the head of a Federal agency shall provide such 
        technical assistance to the Commission as the Commission 
        determines to be necessary to carry out its duties. Any such 
        detail shall not interrupt or otherwise affect the civil 
        service status or privileges of the Federal employee.
            (5) Technical assistance.--Upon the request of the 
        Commission, the head of a Federal agency shall provide such 
        technical assistance to the Commission as the Commission 
        determines to be necessary to carry out its duties.
            (6) Use of mails.--The Commission may use the United States 
        mails in the same manner and under the same conditions as 
        Federal agencies and shall, for purposes of the frank, be 
        considered a commission of Congress as described in section 
        3215 of title 39, United States Code.
            (7) Obtaining information.--The Commission may secure 
        directly from any Federal agency information necessary to 
        enable it to carry out its duties, if the information may be 
        disclosed under section 552 of title 5, United States Code. 
        Upon request of the Chairman of the Commission, the head of 
        such agency shall furnish such information to the Commission.
            (8) Administrative support services.--Upon the request of 
        the Commission, the Administrator of General Services shall 
        provide to the Commission on a reimbursable basis such 
        administrative support services as the Commission may request.
            (9) Printing.--For purposes of costs relating to printing 
        and binding, including the cost of personnel detailed from the 
        Government Printing Office, the Commission shall be deemed to 
        be a committee of the Congress.
    (f) Report.--Not later than 18 months following the first meeting 
of the Commission, the Commission shall submit a report to the 
President and Congress which shall contain a detailed statement of only 
those recommendations, findings, and conclusions of the Commission that 
receive the approval of at least 11 members of the Commission.
    (g) Termination.--The Commission shall terminate 30 days after the 
date of submission of the report required in subsection (f).
    (h) Authorization of Appropriations.--There are authorized to be 
appropriated $1,500,000 to carry out this section. 60 percent of such 
appropriation shall be payable from the Federal hospital insurance 
trust fund, and 40 percent of such appropriation shall be payable from 
the Federal Supplementary Medical Insurance Trust Fund under title 
XVIII of the Social Security Act (42 U.S.C. 1395I, 1395t).

SEC. 102. DEFINITION OF SERIOUS AND DISABLING CHRONIC ILLNESS.

    In this Act, the term ``serious and disabling chronic illness' 
means one or more biological or physical conditions which are likely to 
last for an unspecified period of time, or for the duration of a 
person's life, for which there is no known cure, and which may affect 
an individual's ability to carry out basic activities of daily living, 
instrumental activities of daily living, or both. Such conditions 
include the following:
            (1) Alzheimer's Disease and related disorders.
            (2) Arthritis.
            (3) Cancer.
            (4) Cerebrovascular disease.
            (5) Diabetes.
            (6) Emphysema and bronchitis (including chronic obstructive 
        pulmonary disease.
            (7) Hypertension.
            (8) Ischemic heart disease.
            (9) Multiple sclerosis.
            (10) Parkinson's disease.
            (11) Peripheral vascular disease.
            (12) Renal disease.

   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.

    (a) Preventive Services Benefit.--
            (1) In general.--Section 1861(s) of the Social Security Act 
        (42 U.S.C. 1395x(s)) is amended--
                    (A) by redesignating paragraphs (16) and (17) as 
                paragraphs (17) and (18), respectively;
                    (B) by striking ``and'' at the end of paragraph 
                (14);
                    (C) by striking the period at the end of paragraph 
                (15) and inserting ``and''; and
                    (D) by inserting after paragraph (15) the following 
                new paragraph:
            ``(16) qualified preventive services, as defined in 
        subsection (uu);''.
            (2) Conforming amendments.--Sections 1864(a), 
        1902(a)(9)(C), and 1915(a)(1)(B)(ii)(I) of such Act (42 U.S.C. 
        1395aa(a), 1396a(a)(9)(C), and 1396n(a)(1)(B)(ii)(I)) are each 
        amended by striking ``paragraphs (16) and (17)'' each place it 
        appears and inserting ``paragraphs (17) and (18)''.
    (b) Definition of Preventive Services.--Section 1861 of such Act 
(42 U.S.C. 1395x) is amended by adding at the end the following new 
subsection:

                    ``Qualified Preventive Services

    ``(uu)(1) Subject to paragraph (2), the term `qualified preventive 
services' means items and services determined by the Secretary, on the 
basis of evidence, to be reasonable and necessary for the prevention, 
reduction, delay, or early detection of a chronic illness, that are 
furnished by qualified health care professionals (as determined by the 
Secretary) in such amounts and with such frequency as the Secretary 
determines appropriate consistent with the provisions of paragraph (2), 
and includes the following services so furnished:
            ``(A) Smoking cessation services.
            ``(B) Screening for hypertension.
            ``(C) Screening for cholesterol.
            ``(D) Screening for end stage renal disease and kidney 
        function.
            ``(E) Fall prevention services.
            ``(F) Counseling for hormone replacement therapy.
            ``(G) Screening for reduced visual and audio acuity and low 
        vision rehabilitation services.
            ``(H) Screening for glaucoma.
            ``(I) Medical nutrition therapy services, including obesity 
        and weight reduction and weight reduction maintenance services.
    (c) Exclusion From Coverage Conforming Amendment.--Section 
1862(a)(1)(B) of such Act (42 U.S.C. 1395y(a)(1)(B)) is amended by 
striking ``section 1861(s)(10)'' and inserting ``section 1834(e)(6)''.
    (d) Payment for Preventive Services.--
            (1) In general.--Section 1834 of the Social Security Act 
        (42 U.S.C. 1395m) is amended by inserting after subsection (d) 
        the following new subsection:
    ``(e) Alternative Payment for Preventive Services.--
            ``(1) General payment rule.--
                    ``(A) Qualified preventive services.--The Secretary 
                shall establish by regulation a payment amount for 
                qualified preventive services, as defined in section 
                1861(uu).
                    ``(B) Other preventive services.--The Secretary may 
                establish by regulation a payment amount for each type 
                of preventive service described in subparagraphs (A) 
                through (H) of paragraph (6).
            ``(2) Minimum payment amount.--In the case of a preventive 
        service described in paragraph (6) that may be performed as a 
        diagnostic or therapeutic service under this title, the payment 
        amount under this subsection for a service performed as a 
        preventive service may not be less than the payment amount 
        established under this title for such service performed as a 
        diagnostic or therapeutic service.
            ``(3) Manner of payment.--In the case of a preventive 
        service described in paragraph (6) that may be performed as a 
        diagnostic or therapeutic service under this title, the 
        Secretary shall apply the same method of payment under this 
        subsection for a service performed as a preventive service as 
        the Secretary applies under this title for such service 
        performed as a diagnostic or therapeutic service.
            ``(4) Authority to waive coinsurance.--Notwithstanding any 
        other provision of this title, in the case of a preventive 
        service described in paragraph (6), the Secretary may waive the 
        imposition of any applicable coinsurance amount with respect to 
        such service.
            ``(5) Prohibition on balance billing.--The provisions of 
        subparagraphs (A) and (B) of section 1842(b)(18) shall apply to 
        the furnishing of preventive services described in paragraph 
        (6) for which payment is made under this subsection in the same 
        manner as such subparagraphs apply to services furnished by a 
        practitioner described in subparagraph (C) of such section.
            ``(6) Preventive services described.--For purposes of this 
        subsection, the preventive services described in this paragraph 
        are any of the following services:
                    ``(A) Antigens (under section 1861(s)(2)(G)).
                    ``(B) Prostate cancer screening tests (as defined 
                in section 1861(oo)).
                    ``(C) Colorectal cancer screening tests (as defined 
                in section 1861(pp)).
                    ``(D) Blood-testing strips, lancets, and blood 
                glucose monitors for individuals with diabetes 
                described in section 1861(n).
                    ``(E) Diabetes outpatient self-management training 
                services (as defined in section 1861(qq)).
                    ``(F)(i) Pneumococcal vaccine and its 
                administration and influenza vaccine and its 
                administration (under section 1861(s)(10)(A)).
                    ``(ii) Hepatitis B vaccine and its administration 
                (under section 1861(s)(10)(B)).
                    ``(G) Screening mammography (as defined in section 
                1861(jj)).
                    ``(H) Screening pap smear and screening pelvic exam 
                (as defined in paragraphs (1) and (2), respectively, of 
                section 1861(nn)).
                    ``(I) Bone mass measurement (as defined in section 
                1861(rr)).
                    ``(J) Qualified preventive services (as defined in 
                section 1861(uu)).''.
            (2) Waiver of deductible.--The first sentence of section 
        1833(b) of such Act (42 U.S.C. 1395l(b)) is amended by striking 
        ``, (5) such deductible'' and all that follows through the 
        period and inserting: ``, and (5) such deductible shall not 
        apply with respect to preventive services (as described in 
        section 1834(e)(6)).''.
            (3) Conforming amendments.--(A) Section 1833(a)(1)(B) of 
        such Act (42 U.S.C. 1395l(a)(1)(B)) is amended by inserting 
        ``subject to section 1834(e),'' before ``the amounts paid shall 
        be 100 percent of the reasonable charges for such items and 
        services,''.
            (B) Section 1833(a)(2)(G) of such Act (42 U.S.C. 
        1395l(a)(2)(G)) is amended by inserting ``subject to section 
        1834(e),'' before ``with respect to items and services''.
            (C) Section 1834(c)(1)(C) of such Act (42 U.S.C. 1395m(c)) 
        is amended by striking ``the amount of the payment'' and 
        inserting ``except as provided by the Secretary under 
        subsection (e), the amount of the payment''
            (D) Section 1834(d) of such Act (42 U.S.C. 1395m(d)) is 
        amended--
                    (i) in paragraph (1)(A), by striking ``The payment 
                amount'' and inserting ``Except as provided by the 
                Secretary under subsection (e), the payment amount''; 
                and
                    (ii) in paragraphs (2)(A) and (3)(A), by striking 
                ``payment under section 1848'' each place it appears 
                and inserting ``except as provided by the Secretary 
                under subsection (e), payment under section 1848''.
            (E) Section 1848(g)(2)(C) of such Act (42 U.S.C. 1395w-
        4(g)(2)(C)) is amended--
                    (i) by striking ``For'' and inserting ``(i) Subject 
                to clause (ii), for''; and
                    (ii) by adding at the end the following new clause:
                    ``(ii) For physicians' services consisting of 
                preventive services (as described in section 
                1834(e)(6)) furnished on or after February 1, 2000, the 
                `limiting charge' shall be 100 percent of the 
                recognized payment amount under this part for 
                nonparticipating physicians or for nonparticipating 
                suppliers or other persons.''.
            (F) Section 1848(g)(2)(D) of such Act (42 U.S.C. 1395w-
        4(g)(2)(D)) is amended by striking ``the fee schedule amount 
        determined under subsection (a)'' and all that follows and 
        inserting ``the fee schedule amount determined under subsection 
        (a), in the case of preventive services (as described in 
        section 1834(e)(6)) the amount determined by the Secretary 
        under section 1834(e), or, if payment under this part is made 
        on a basis other than the fee schedule under this section or 
        other than the amount established under section 1834(e) with 
        respect to such preventive services, 95 percent of the other 
        payment basis.''.
    (e) Adding ``Lancet'' to Definition of DME.--Section 1861(n) of 
such Act (42 U.S.C. 1395x(n)) is amended by striking ``blood-testing 
strips and blood glucose monitors'' and inserting ``blood-testing 
strips, lancets, and blood glucose monitors''.
    (f) Effective Date.--The amendments made by this Act apply to items 
and services furnished on or after January 1, 2002.

SEC. 202. INFORMATION CAMPAIGN ON PREVENTION.

    The Secretary of Health and Human Services shall carry out, during 
2002 and 2003, a nationwide education campaign to promote awareness 
among all Americans about the nature of chronic diseases and 
disabilities and strategies for preventing, delaying, or minimizing 
disability progression at various stages of chronic conditions, 
including health promotion and self-care activities. This campaign 
shall include the following activities:
            (1) An information campaign, in collaboration with the 
        Social Security Administration, State health insurance 
        assistance programs, area agencies on aging, and the private 
        sector, designed to educate all Americans (especially 
        individuals with disabilities) about the importance of 
        preventive health care.
            (2) Activities designed to encourage medicare beneficiaries 
        to use medicare preventive benefits, including distribution of 
        comprehensive information on medicare preventive benefits to 
        all medicare beneficiaries.
            (3) Development and testing of a health status assessment 
        tool with follow-up interventions, to assist medicare 
        beneficiaries and their providers in identifying and mitigating 
        health risks.
            (4) A nationwide education and awareness campaign designed 
        to educate older Americans on adjustments to behavior and the 
        home environment that can prevent falls and other injuries.

SEC. 203. STUDY OF WAYS TO ENCOURAGE LIFETIME PREVENTIVE CARE DESIGNED 
              TO MINIMIZE CHRONIC ILLNESS COSTS IN THE PUBLIC AND 
              PRIVATE SECTORS.

    (a) Study.--The Secretary of Health and Human Services shall 
conduct a study to estimate what preventive care services (such as 
smoking cessation and hypertension reduction.) if furnished to 
individuals before eligibility for medicare (either due to 
qualification by age or by social security disability) could reasonably 
be expected to save the medicare program and other Government programs 
(including the tax revenues to the Treasury from continued employment 
by individuals free of morbidity) more in future discounted costs under 
those programs than the cost of furnishing such preventive services.
    (b) Report.--Not later than January 1, 2003, the Secretary shall 
submit to Congress a report on the study conducted under subsection (a) 
that includes such recommendations as the Secretary determines 
appropriate for legislative or administrative changes in tax-qualified 
private health insurance plans and in Government health insurance plans 
(including medicaid) to encourage the provision of such preventive care 
services by such plans and the use of such services by individuals. The 
Secretary shall also recommend methodologies to extend preventive care 
services to the uninsured and to those ineligible for employer-assisted 
health insurance plans.

SEC. 204. CONGRESSIONAL CONSIDERATION OF COST EFFECTIVENESS OF CHRONIC 
              ILLNESS PREVENTION MEASURES OVER TIME.

    Not later than January 1, 2002, the Director of the Congressional 
Budget Office shall submit to Congress a report that describes 
methodologies to measure aggregate savings, to both society and the 
individual, in payments that would otherwise be made under the 
medicare, medicaid, and other Federal health care programs that are 
attributable to preventive services of the type described in section 
1834(e) of the Social Security Act (as added by section 201(d)) if such 
services were furnished over the course of an individual's life prior 
to entitlement to benefits under those programs.

    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.

    (a) In General.--There is established within the Department of 
Health and Human Services an office to be known as the Office of 
Integration and Coordination of Care for Chronic Illness.
    (b) Mission Statement.--The Office of Integration and Coordination 
of Care for Chronic Illness shall ensure the satisfactory 
implementation of the provisions of this Act.

SEC. 212. ESTABLISHMENT OF A NATIONAL DATABASE FOR CHRONIC ILLNESS.

    (a) Establishment of Database.--The Secretary of Health and Human 
Services shall develop a database to be known as the ``National 
Database for Serious and Disabling Chronic Illness''. The purpose of 
the database is--
            (1) to generate accurate information about the prevalence, 
        demographics, health status, functional status, financial 
        status, support systems, and quality of life of persons 
        suffering from serious and disabling chronic illnesses;
            (2) to compile aggregate data on the utilization, cost, and 
        outcomes of chronic illness; and
            (3) to enable the Secretary to set goals and measure 
        progress in reducing the cost to society of improving care of 
        the chronically ill.
    (b) Effective Date.--The Secretary shall establish the database 
referred to in subsection (a) by not later than the date that is 18 
months after the date of the enactment of this Act.

SEC. 213. ESTABLISHMENT OF NATIONAL GOALS TO REDUCE THE PREVALENCE OF 
              HIGH-COST CHRONIC ILLNESS.

    The Secretary of Health and Human Services shall establish targets 
for reducing the prevalence of the highest-cost and fastest-growing 
chronic illnesses.
            (1) In 2005, the Secretary shall establish and issue 
        national goals for reducing the prevalence of high-cost chronic 
        care conditions. Every 5 years thereafter, the Secretary shall 
        issue new national goals to reflect past progress.
            (2) Each year starting in 2010, the Secretary shall issue a 
        report on the progress in meeting the goals issued under 
        paragraph (1), the reasons for success or failure in meeting 
        those goals, and the estimated savings achieved by reduced 
        prevalence of those conditions, including the relationship 
        between medicare spending and medicaid savings and the cost-
        effectiveness of preventive benefits within and across the 
        medicare and medicaid programs.
            (3) In establishing the national goal under paragraph (1) 
        for 2005, the Secretary shall give priority to achieving the 
        maximum feasible reduction in the chronic conditions that 
        represent the largest proportion of national health care 
        expenditures and shall consider the goals recommended by the 
        Commission established in section 101(b)(10).

SEC. 214. ESTABLISHMENT OF QUALITY IMPROVEMENT, MEDICAL ERROR REDUCTION 
              AND OUTCOMES GOALS.

    (a) In General.--The Secretary of Health and Human Services shall 
carry out the following requirements as soon as practicable:
            (1) Identify risk factors associated with progression of 
        serious and disabling chronic illnesses, and identify 
        interventions for primary, secondary, and tertiary prevention.
            (2) Prior to January 1, 2005, conduct no less than 5 
        patient-oriented research trials (PORTs) that the Secretary 
        determines will have the greatest and most immediate impact on 
        the largest number of people with chronic illness.
            (3) Develop disease prevention guidelines for the highest-
        cost chronic diseases and disabilities, measured by severity 
        and prevalence.
            (4) Develop disability-based outcome measures that evaluate 
        effectiveness in preventing, delaying, or minimizing the 
        progression of chronic diseases and disabilities and associated 
        comorbidities and loss of independence on a longitudinal basis.
    (b) Medicare+Choice Organizations.--For years beginning on or after 
January 1, 2005, each Medicare+Choice organization shall conduct on an 
annual basis--
            (1) at least 1 new continuous quality improvement 
        initiative involving chronic care focusing on delaying the 
        progression of disability and preventing the emergence of 
        disease-related complications; or
            (2) at least 1 new initiative to reduce preventable medical 
        errors involving chronic care.

SEC. 215. DEVELOPMENT AND IMPLEMENTATION OF COMMON PATIENT ASSESSMENT 
              INSTRUMENTS ACROSS SETTINGS.

    (a) Establishment of Standard Patient Assessment Instruments.--The 
Secretary of Health and Human Services, through negotiated rulemaking 
in accordance with subchapter III of chapter 5 of title 5, United 
States Code, and in accordance with the requirements of this section, 
shall establish and implement standard patient assessment instruments 
under the medicare program under title XVIII of the Social Security Act 
that provide comparability of information and to the maximum extent 
feasible, reduce the need for repeated evaluations and data entry at 
each new site of service.
    (b) Consultation.--In establishing the standard patient assessment 
instruments under subsection (a), the Secretary shall consult with 
representatives of providers of services, suppliers, and with 
appropriate organizations and entities representing private sector 
entities to promote the development and use of common sets of quality 
measures that represent the full spectrum of care obtained by 
individuals entitled to benefits under the medicare program under such 
title.
    (c) Sole Assessment Instruments.--No later than January 1, 2005, 
standard patient assessment instruments established under this section 
shall be the sole patient assessment instrument utilized by the 
Secretary of Health and Human Services with respect to items and 
services furnished under the medicare and medicaid programs, and shall 
supersede any patient assessment instrument or method utilized by the 
Secretary with respect to such items and services.

SEC. 216. DEVELOPMENT OF NATIONAL RESOURCE CENTERS ON THE INTERNET FOR 
              SERIOUS AND DISABLING CHRONIC ILLNESS.

    (a) In General.--The Agency of Healthcare Research and Quality 
shall develop and make available in electronic format an authoritative, 
reliable national resource center for serious and disabling chronic 
illnesses, to be used by patients and their families that include 
information necessary for patient education and facilitate self-
management. The resource center shall include information for patients 
and health care providers on current clinical guidelines that is, as of 
the date of the enactment of this Act, available in the National 
Guidelines Clearinghouse maintained by the Agency.
    (b) No Fee for Use of Information.--The Agency of Healthcare 
Research and Quality may not charge a fee for the use of the national 
resource center developed under subsection (a).

 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.

    (a) Establishment of Performance Pool Account.--There is created 
within the Federal Supplemental Medical Insurance Trust Fund 
established by section 1841 an account to be known as the ``Performance 
Bonus Pool Account'' (in this section referred to as the ``Account'').
    (b) Amounts in Account.--
            (1) In general.--The Account shall consist of the amounts 
        deposited by the Secretary of Health and Human Services that 
        are attributable to reductions in payments to Medicare+Choice 
        organizations by reason of paragraph (2).
            (2) Reductions in payments to medicare+choice 
        organizations.--For months on occurring on or after January 1, 
        2005, the Secretary shall reduce by 1 percent the annual 
        Medicare+Choice capitation rate under section 1853(c) of the 
        Social Security Act (42 U.S.C. 1395w-23(c)) for Medicare+Choice 
        organizations offering Medicare+Choice plans.
            (3) Separation of funds.--Funds provided under this part to 
        the Account shall be kept separate from all other funds within 
        the Federal Supplemental Medical Insurance Trust Fund.
    (c) Payments From Account.--
            (1) Bonus payments to organizations that meet or exceed 
        chronic illness target goals.--At the end of each year, 
        beginning with 2005, the Secretary shall make payments from the 
        Account (in the aggregate of the total amount deposited in the 
        Account during the year) to those Medicare+Choice organizations 
        offering items and services under the Medicare+Choice plan in a 
        manner that meets or exceeds the chronic illness target goals 
        established in section 212 of the Chronic Illness Care 
        Improvement Act of 2000.
            (2) Amount of bonus payment.--The amount of a bonus payment 
        under paragraph (1) to a Medicare+Choice organization shall be 
        weighted for excellence in reduction in high-cost chronic 
        conditions under the Medicare+Choice plan, for further delaying 
        disability progression and improving health outcomes, and by 
such other factors as the Secretary determines appropriate under such 
target goals.
    (d) Report on Bonus Payments to Providers in Fee-for-Service.--Not 
later than January 1, 2002, the Secretary shall submit to Congress a 
report containing recommendations for legislative and administrative 
changes under the medicare program to provide additional payments for 
excellence in reduction in high-cost chronic conditions to providers 
furnishing services to medicare beneficiaries who are not enrolled 
under a Medicare+Choice plan offered by a Medicare+Choice organization 
under part C of the medicare program.

SEC. 222. INCREASED ATTENTION TO PAYMENT POLICIES FOR THE CHRONICALLY 
              ILL UNDER MEDICARE+CHOICE.

    (a) In General.--Section 511(b)(2) of the Medicare, Medicaid, and 
SCHIP Balanced Budget Refinement Act of 1999 (42 U.S.C. 1395W-23 note) 
is amended by adding at the end the following new subsection:
    ``(G) Suggestions for more accurately measuring the costs of 
preventing, delaying, and managing chronic illness and disability.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect as if included in the enactment of the Medicare, Medicaid, 
and SCHIP Balanced Budget Refinement Act of 1999 (Public Law 106-113).

SEC. 223. ASSURING ADEQUATE MANPOWER AND EXPERTISE FOR THE TREATMENT OF 
              CHRONIC ILLNESS.

    (a) Study.--
            (1) In general.--The Secretary of Health and Human Services 
        shall conduct a study to evaluate the need for additional 
        physician and nonphysician health care staff and expertise in 
        the management of chronic illness of medicare beneficiaries. To 
        the extent that the Secretary determines that any physician and 
        nonphysician health care staff and expertise shortages exist, 
        or may be likely to exist, the Secretary shall evaluate methods 
        to prevent shortages in physician and nonphysician health care 
        staff and expertise.
            (2) Emphasis on certain matters.--Special emphasis shall be 
        given to studying strategies for ensuring an adequate supply of 
        allied health professionals (such as nurses) and 
        paraprofessionals (such as nurse aides). Strategies to be 
        studied may include--
                    (A) defining ``health worker shortage areas'' to 
                target Federal funds toward recruitment and retention 
                initiatives for professional and paraprofessional 
                workers in health care;
                    (B) loan forgiveness for registered nurses and 
                licensed practical nurses under the Public Health 
                Service Act;
                    (C) stipends for paraprofessionals to cover 
                training requirements for certified nursing assistants;
                    (D) day care, transportation, housing, and health 
                insurance subsidies;
                    (E) tax credits for persons that remain employed by 
                providers in health professional shortage areas for a 
                specified period of time;
                    (F) tax incentives to support employees who care 
                for elders in their own homes; and
                    (G) salary subsidies for providers located in areas 
                with low unemployment levels, as defined by the 
                Secretary of Health and Human Services in consultation 
                with the Secretary of Labor.
    (b) Report.--Not later than January 1, 2003, the Secretary shall 
submit to Congress a report on the study conducted under subsection 
(a), and shall include any recommendations for legislation or 
administrative action to prevent shortages in physician and 
nonphysician health care staff and expertise.
    (c) Authority To Adjust GME Payments.--
            (1) In general.--If the Secretary determines that a 
        shortage of physicians exists, or is likely to exist, in a 
        specialty or subspecialty of medicine that has as a component 
        the diagnosis and management of chronic illness, then 
        notwithstanding any provision of section 1886(h) of the Social 
        Security Act (42 U.S.C. 1395ww(h)) to the contrary--
                    (A) the Secretary may adjust, on a revenue neutral 
                basis, the graduate medical education payment weight 
                for approved medical residency training programs in 
                that specialty or subspecialty in order to encourage 
                the movement of additional medical residents into that 
                specialty or subspecialty, and
                    (B) the Secretary may increase the number of 
                residents in that specialty or subspecialty.
            (2) Effective date.--The provisions of paragraph (1) shall 
        apply with respect to cost reporting periods beginning on or 
        after October 1, 2002.

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.

    Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) is 
amended by inserting after section 1888 the following new section:

``disease management services for serious and disabling chronic illness

    ``Sec. 1889. (a) Implementation of Disease Management Services 
Program.--
            ``(1) In general.--The Secretary shall establish and 
        implement a comprehensive program in accordance with the 
        provisions of this section to provide for the coverage under 
        this title of disease management services for serious and 
        disabling chronic illnesses furnished to eligible individuals 
        described in subsection (b), under such appropriate 
        circumstances as the Secretary prescribes, by 
entities designated by the Secretary with respect to diagnoses that the 
Secretary determines may be helped by such management. The program 
shall be known as the National Initiative to Improve Chronic Illness 
Care.
            ``(2) Initial Pilot Projects.--
                    ``(A) Diabetes mellitus; alzheimer's.--Not later 
                than 6 months after the date of the termination of the 
                National Commission on Improving Chronic Illness Care 
                (established under section 101), the Secretary shall 
                establish and implement a pilot project to provide for 
                the coverage described in paragraph (1) with respect to 
                diabetes mellitus and another pilot project to provide 
                for such coverage for Alzheimer's disease.
                    ``(B) Designation of pilot projects.--The pilot 
                project established under subparagraph (A) providing 
                for coverage for diabetes mellitus shall be known as 
                the `National Diabetes Pilot Initiative to Improve 
                Chronic Illness Care'. The pilot project established 
                under subparagraph (A) providing for coverage for 
                Alzheimer's disease shall be known as the `National 
                Alzheimer's Disease Pilot Initiative to Improve Chronic 
                Illness Care'.
                    ``(C) Initial report to congress on costs and cost 
                savings.--Not later than 2 years after the beginning of 
                the pilot projects under this paragraph, the Secretary 
                shall submit to Congress a report on the impact of the 
                pilot projects on costs and savings under this title, 
                and in considering savings, shall include impacts on 
                quality of life for patients and their families and 
                costs avoided across settings and over time.
            ``(3) National initiative to improve chronic illness 
        care.--
                    ``(A) In general.--Not later than January 1, 2007, 
                the Secretary shall expand the program, based upon the 
                prototype established for the pilot projects under 
                paragraph (2) and the recommendations of the expert 
                panel described in subparagraph (B), to provide for the 
                coverage described in paragraph (1) for all serious and 
                disabling chronic illnesses, and those illnesses that 
                may potentially be serious and disabling chronic 
                illnesses, as determined by the Secretary.
                    ``(B) Expert panel described.--The expert panel 
                referred to in subparagraph (A) is the expert panel 
                commissioned under section 101(b)(6) of the Chronic 
                Illness Care Improvement Act of 2000 to analyze the 
                experience and outcomes of the initial pilot projects 
                established in paragraph (2) and to provide 
                recommendations to the Secretary for use in the final 
                development of the National Initiative to Improve 
                Chronic Illness Care.
    ``(b) Administration by Contract.--Except as otherwise specifically 
provided for in this section, the Secretary may administer the program 
under this section as follows:
            ``(1) In general.--The Secretary may administer the program 
        through a contract with a program administrator in accordance 
        with the provisions of this subsection.
            ``(2) Scope of program administrator contracts.--A contract 
        under this subsection may, at the Secretary's discretion, 
        relate to administration of any or all of the programs or 
        projects specified in subsection (a). The Secretary may enter 
        into such contracts for a limited geographic area, or on a 
        regional or national basis.
            ``(3) Eligible contractors.--The Secretary may contract for 
        the administration of the program with--
                    ``(A) an entity that, under a contract under 
                section 1816 or 1842, determines the amount of and 
                makes payments for health care items and services 
                furnished under this title; or
                    ``(B) any other entity with substantial experience 
                in managing the type of program concerned.
            ``(4) Contract award, duration, and renewal.--
                    ``(A) In general.--A contract under this subsection 
                shall be for an initial term of up to three years, 
                renewable for additional terms of up to three years.
                    ``(B) Noncompetitive award and renewal for entities 
                administering part a or part b payments.--The Secretary 
                may enter or renew a contract under this subsection 
                with an entity described in paragraph (3)(A) without 
                regard to the requirements of section 5 of title 41, 
                United States Code.
            ``(5) Applicability of federal acquisition regulation.--The 
        Federal Acquisition Regulation shall apply to program 
        administration contracts under this subsection.
            ``(6) Performance standards.--The Secretary shall establish 
        performance standards for the program administrator including, 
        as applicable, standards for the quality and cost-effectiveness 
        of the program administered, and such other factors as the 
        Secretary finds appropriate. The eligibility of entities for 
        the initial award, continuation, and renewal of program 
        administration contracts shall be conditioned, at a minimum, on 
        performance that meets or exceeds such standards.
            ``(7) Functions of program administrator.--A program 
        administrator shall perform any or all of the following 
        functions, as specified by the Secretary:
                    ``(A) Agreements with individuals or entities 
                furnishing health care items and services.--Determine 
                the qualifications of individuals or entities seeking 
                to enter or renew agreements to provide services under 
                a program specified in subsection (a), and as 
                appropriate enter or renew (or refuse to enter or 
                renew) such agreements on behalf of the Secretary.
                    ``(B) Establishment of payment rates.--Negotiate or 
                otherwise establish, subject to the Secretary's 
                approval, payment rates for covered health care items 
                and services.
                    ``(C) Payment of claims or fees.--Administer 
                payments for health care items or services furnished 
                under any such program.
                    ``(D) Payment of bonuses.--Using such guidelines as 
                the Secretary shall establish, and subject to the 
                approval of the Secretary, make bonus payments as 
                described in subsection (c)(2)(A)(ii) to individuals 
                and entities furnishing items or services for which 
                payment may be made under any such program.
                    ``(E) List of program participants.--Maintain and 
                regularly update a list of individuals or entities with 
                agreements to provide health care items and services 
                under any such program, and ensure that such list, in 
                electronic and hard copy formats, is readily available, 
                as applicable, to--
                            ``(i) individuals residing in the service 
                        area who are entitled to benefits under part A 
                        or enrolled in the program under part B;
                            ``(ii) the entities responsible under 
                        sections 1816 and 1842 for administering 
                        payments for health care items and services 
                        furnished; and
                            ``(iii) individuals and entities providing 
                        health care items and services in the service 
                        area.
                    ``(F) Beneficiary enrollment.--Determine 
                eligibility of individuals to enroll under a program 
                specified in subsection (a) and provide enrollment-
                related services (but only if the Secretary finds that 
                the program administrator has no conflict of interest 
                caused by a financial relationship with any individual 
                or entity furnishing items or services for which 
                payment may be made under any such program, or any 
                other conflict of interest with respect to such 
                function).
                    ``(G) Oversight.--Monitor the compliance of 
                individuals and entities with agreements under any such 
                program with the conditions of participation.
                    ``(H) Administrative review.--Conduct reviews of 
                adverse determinations specified in subparagraph (A).
                    ``(I) Review of marketing materials.--Conduct a 
                review of marketing materials proposed by an individual 
                or entity furnishing services under any such program.
                    ``(J) Additional functions.--Perform such other 
                functions as the Secretary may specify.
            ``(8) Limitation of liability.--The provisions of section 
        1157(b) shall apply with respect to activities of contractors 
        and their officers, employees, and agents under a contract 
        under this subsection.
            ``(9) Information sharing.--Notwithstanding section 1106 
        and section 552a of title 5, United States Code, the Secretary 
        may disclose to an entity with a program administration 
        contract under this subsection such information (including 
        medical information) on individuals receiving health care items 
        and services under the program as the entity may require to 
        carry out its responsibilities under the contract.
    ``(c) Rules Applicable to Program Administration Contracts.--
            ``(1) Records, reports, and audits.--The Secretary is 
        authorized to require individuals and entities with agreements 
        to provide health care items or services under programs 
        specified under subsection (a), and entities with program 
        administration contracts under subsection (b), to maintain 
        adequate records, to afford the Secretary access to such 
        records (including for audit purposes), and to furnish such 
        reports and other materials (including audited financial 
        statements and performance data) as the Secretary may require 
        for purposes of implementation, oversight, and evaluation of 
        such program and of individuals' and entities' effectiveness in 
        performance of such agreements or contracts.
            ``(2) Bonuses.--Notwithstanding any other provision of law, 
        but subject to subparagraph (B)(ii), the Secretary may make 
        bonus payments under a program specified in subsection (a) from 
        the Federal Hospital Insurance and Federal Supplementary 
        Medical Insurance Trust Funds in amounts that do not exceed 50 
        percent of the savings to such Trust Funds attributable to such 
        programs in amounts authorized under such program, in 
        accordance with the following:
                    ``(A) Payments to program administrators.--The 
                Secretary may make bonus payments under each program 
                specified in subsection (a) to program administrators.
                    ``(B) Payments to individuals and entities 
                furnishing services.--
                            ``(i) In general.--Subject to clause (ii), 
                        the Secretary may make bonus payments to 
                        individuals or entities furnishing items or 
                        services for which payment may be made under 
                        the programs under subsection (a), or may 
                        authorize a program administrator to make such 
                        bonus payments in accordance with such 
                        guidelines as the Secretary shall establish and 
                        subject to the Secretary's approval.
                            ``(ii) Limitations.--The Secretary may 
                        limit bonus payments under clause (i) to 
                        particular service areas, types of individuals 
                        or entities furnishing items or services under 
                        a program, or kinds of items or services, and 
                        may condition such payments on the achievement 
                        of such standards related to efficiency, 
                        improvement in processes or outcomes of care, 
                        or such other factors as the Secretary 
                        determines to be appropriate.
                            ``(iii) Rural areas.--In a health 
                        professional shortage area located in a rural 
                        or frontier county in which the provision of 
                        comprehensive disease management for serious 
                        and disabling chronic illness is difficult due 
                        to a shortage in health professional providing 
                        items and services under this title, the 
                        Secretary may provide for bonus payments under 
                        this section for rural disease management 
                        services furnished by such physician or other 
                        health care provider to medicare beneficiaries.
            ``(3) Antidiscrimination limitation.--
                    ``(A) In general.--The Secretary shall not enter 
                into an agreement with an individual or entity to 
                provide health care items or services under a program 
                specified under subsection (a), or with an entity to 
                administer such a program, unless such individual or 
                entity guarantees that it will not deny, limit, or 
                condition the coverage or provision of benefits under 
                such program, for individuals eligible to be enrolled 
                under such program, based on any health status-related 
                factor described in section 2702(a)(1) of the Public 
                Health Service Act.
                    ``(B) Construction.--Subparagraph (A) shall not be 
                construed to prohibit such individual or entity from 
                taking any action explicitly authorized by the 
                provisions of this section.
    ``(d) Individuals Eligible for Disease Management Services for 
Chronic Illness.--No individual shall be eligible for enrollment in a 
disease management program under this section unless the Secretary 
finds the following with respect to the individual:
            ``(1) National diabetes pilot initiative to improve chronic 
        illness care.--With respect to individuals participating in the 
        National Diabetes Pilot Initiative To Improve Chronic Illness 
        Care, the individual has been diagnosed with diabetes mellitus.
            ``(2) National alzheimer's disease pilot initiative to 
        improve chronic illness care.--With respect to individuals 
        participating in the National Alzheimer's Disease Pilot 
        Initiative To Improve Chronic Illness Care, the individual has 
        been diagnosed with Alzheimer's disease.
            ``(3) National initiative to improve chronic illness 
        care.--With respect to individuals participating in the 
        National Initiative To Improve Chronic Illness Care, as 
        follows:
                    ``(A) Diagnosis.--The individual has been diagnosed 
                with congestive heart failure, chronic obstructive 
                pulmonary disease, diabetes, Alzheimer's disease and 
                other progressive dementias, Parkinson's disease, 
                multiple sclerosis, depression, or any other diagnosis, 
                if the Secretary has determined with respect to such 
                diagnoses that there is evidence that the provision of 
                disease management services, over clinically relevant 
                time periods, to cohorts of individuals with such 
                diagnoses can reasonably be expected to improve 
                processes or outcomes of health care (or in the case of 
                individuals with advanced illness, improved quality of 
                life) for the medicare population and to have some 
                (partial or total) offsetting savings in this title or 
                other Federal programs.
                    ``(B) Additional factors.--The Secretary may 
                establish such additional clinical criteria for 
                eligibility for enrollment under such a disease 
                management program as the Secretary determines 
                appropriate, including certain clinical characteristics 
                or conditions of the individual, certain patterns of 
                utilization of the individual, or other factors 
                indicating the need for and potential effectiveness of 
                disease management for the individual.
    ``(e) Procedures To Facilitate Enrollment.--The Secretary shall 
develop and implement procedures designed to facilitate enrollment of 
eligible individuals in the programs under this section.
    ``(f) Integration and Coordination of Care for Chronic Illness.--
The Secretary shall develop an integrated and coordinated health care 
delivery system for serious and disabling chronic illness based on the 
following components:
            ``(1) A chronic care network of providers characterized by 
        coordination of medicare, medicaid and other programs or 
        agencies that provide directly or otherwise for the care of 
        patients with serious and disabling chronic illness.
            ``(2) A payment model that aligns the financial incentives 
        of the health care providers of the chronically ill in order to 
        reduce disincentives to providing high quality care with 
        improved cost effectiveness and simplicity in billing for 
        providers and beneficiaries. Under the payment model, the 
        Secretary may waive any other provision of this title that 
        restricts access to the most appropriate care in the lowest 
        cost setting, such as the 3-day hospitalization rule before a 
        beneficiary is eligible for skilled nursing facility care, the 
        homebound definition as a barrier to care at an adult day care 
        facility, and such other provisions as the Secretary determines 
        appropriate.
            ``(3) An administrative model that functions to efficiently 
        match health care services to the range of health care needs 
        and reduces unnecessary, duplicative services and paperwork.
            ``(4) Integrated information systems, including integrated 
        administrative and financial data systems as well as a common 
        medical record for participating chronic care enrollees that is 
        used by chronic care network providers and continuously 
        supplemented and updated over time.
            ``(5) Ongoing evaluation of cost effectiveness of services 
        based on longitudinal and aggregate system costs.
    ``(g) Disease Management for Chronic Illness Services.--
            ``(1) In general.-- Subject to the cost-effectiveness 
        standards established under subsection (b)(6), disease 
        management services provided to an individual under this 
        section shall include the following:
                    ``(A) Initial and periodic health screening and 
                assessment.
                    ``(B) Management that provides a comprehensive 
                range of services to the chronically ill, based on best 
                practices and established clinical guidelines 
                (including coordination with other providers), and 
                referral for medical and other health services related 
                to the managed diagnosis.
                    ``(C) Case management to facilitate continuity of 
                care and patient adherence to the plan of care with 
                provisions for reimbursement for case management.
                    ``(D) Monitoring and control of medications.
                    ``(E) Interdisciplinary, collaborative care by a 
                health care team based on efficient communication 
                between the various health care providers.
                    ``(F) Preventive care designed to foster early 
                recognition of symptoms, reduce the prevalence of 
                comorbidities, and reduce or delay the onset and 
                progression of disability and dependence.
                    ``(G) Quality improvement and enhancement of 
                patient safety with reduction of preventable medical 
                errors.
                    ``(H) Health care delivery that fosters self-
                management, patient goalsetting, patient empowerment, 
                self-reliance, dignity, and independence.
                    ``(I) Education and counseling for patient and 
                family directed at issues of coping and adjustment, 
                practical concerns, spiritual needs, and others that 
                serve the distinct needs of the patient and family at 
                each stage of illness, including the time of diagnosis, 
                early illness, middle stages of illness, and advanced 
                illness.
                    ``(J) Nursing or other health professional home 
                visits, as appropriate.
                    ``(K) Providing access for electronic consultations 
                with physicians or other appropriate medical 
                professionals, including 24-hour availability for 
                emergency consultations; in developing such electronic 
                consultations, the Secretary shall draw on the results, 
                to the extent available, of section 4207 of the 
                Balanced Budget Act.
                    ``(L) Managing and facilitating the transition to 
                other care arrangements in preparation for termination 
                of the disease management enrollment.
                    ``(M) Such other services for which payment would 
                not otherwise be made under this title, as the 
                Secretary shall determine to be appropriate.
            ``(2) Variations in service packages.--The type and 
        combinations of disease management services furnished under 
        agreements under this section may vary (as permitted or 
        required by the Secretary) according to the types of diagnoses, 
        conditions, patient profiles being managed, expertise of the 
        disease management organization, geographic isolation, and 
        other factors the Secretary finds appropriate.
    ``(h) Enrollment of Individuals in Disease Management Programs.--
            ``(1) Effective date and duration.--Enrollment of an 
        individual in the program under this section shall remain in 
        effect for a period to be determined by the Secretary and shall 
        be automatically renewed for additional periods, unless 
        terminated in accordance with such procedures as the Secretary 
        shall establish by regulation.
            ``(2) Limitation of reenrollment.--The Secretary may 
        establish limits on an individual's eligibility to reenroll in 
        the program under this section if the individual has 
        disenrolled more than once during a specified time period.
    ``(i) Disease Management Requirement.--Notwithstanding any other 
provision of this title, the Secretary may provide that an individual 
enrolled in the program under this section may be entitled to payment 
under this title for any specified health care items or services only 
if the items or services have been furnished by the disease management 
organization, or coordinated through the disease management services 
program. Under such provision, the Secretary shall prescribe exceptions 
for emergency medical services as described in section 1852(d)(3), and 
other exceptions determined by the Secretary for the delivery of timely 
and needed care.
    ``(j) Agreement With Disease Management Providers.--
            ``(1) Entities eligible.--Entities qualified to enter into 
        agreements with the Secretary for the provision of disease 
        management services under this section include entities that 
        have demonstrated the ability to meet the performance standards 
        and other criteria established by the Secretary with respect 
        to--
                    ``(A) the management of each diagnosis and 
                condition with respect to which the entity, if 
                designated, would furnish disease management services 
                under this section; and
                    ``(B) the implementation of each disease management 
                approach that the entity, if designated, would 
                implement under this section.
            ``(2) Conditions of participation.--In order to be eligible 
        to provide disease management services under this section, an 
        entity shall--
                    ``(A) have in effect an agreement with the 
                Secretary setting forth such obligations of the entity 
                as a disease management organization under this section 
                as the Secretary shall prescribe;
                    ``(B) meet the standards established by the 
                Secretary under subsection (k); and
                    ``(C) meet such other conditions as the Secretary 
                may establish.
            ``(3) Secretary's option for noncompetitive designation.--
        The Secretary may designate an entity to provide disease 
        management services under this section without regard to the 
requirements of section 5 of title 41, United States Code.
    ``(k) Quality Standards.--The Secretary shall establish standards 
for, and procedures for assessing, the quality of care provided by 
disease management organizations under this section, which shall 
include--
            ``(1) performance standards with respect to the processes 
        or outcomes of health care or the health status of enrolled 
        individuals, including procedures for establishing a baseline 
        and measuring changes in health care processes or health 
        outcomes with respect to managed diseases or health conditions;
            ``(2) a requirement that the organization meet such 
        licensure and other accreditation standards as the Secretary 
        may find appropriate; and
            ``(3) such other quality standards, including patient 
        satisfaction, as the Secretary may find appropriate.
    ``(l) Payment.--The Secretary may negotiate or otherwise establish 
payment terms and rates for the provision of services under the program 
under this section, and shall, to the extent practicable, base such 
payment terms and rates methodology on payment methodologies 
established under this title.
    ``(m) Definition of Serious and Disabling Chronic Illness.--In this 
section, the term ``serious and disabling chronic condition' means one 
or more biological or physical conditions which are likely to last for 
an unspecified period of time, or for the duration of a person's life, 
for which there is no known cure, and which may affect an individual's 
ability to carry out basic activities of daily living, instrumental 
activities of daily living, or both. Such conditions include the 
following:
            ``(1) Alzheimer's Disease and related disorders.
            ``(2) Arthritis.
            ``(3) Cancer.
            ``(4) Cerebrovascular disease.
            ``(5) Diabetes.
            ``(6) Emphysema and bronchitis (including chronic 
        obstructive pulmonary disease.
            ``(7) Hypertension.
            ``(8) Ischemic heart disease.
            ``(9) Multiple sclerosis.
            ``(10) Parkinson's disease.
            ``(11) Peripheral vascular disease.
            ``(12) Renal disease.''.
    (b) Coverage of Disease Management Services as a Part B Medical 
Service.--
            (1) In general.--Section 1861(s) of the Social Security Act 
        (42 U.S.C. 1395x(s)), as amended by section 201, is further 
        amended--
                    (A) by redesignating paragraphs (17) and (18) as 
                paragraphs (18) and (19), respectively;
                    (B) by striking ``and'' at the end of paragraph 
                (15);
                    (C) by striking the period at the end of paragraph 
                (16) and inserting ``and''; and
                    (D) by inserting after paragraph (16) the following 
                new paragraph:
            ``(17) disease management services furnished in accordance 
        with section 1889.''.
            (2) Part b coinsurance and deductible not applicable to 
        disease management services.--
                    (A) Coinsurance.--Section 1833(a)(1) of the Social 
                Security Act (42 U.S.C. 1395l(a)(1)) is amended--
                            (i) by striking ``and'' before ``(S)''; and
                            (ii) by inserting before the semicolon at 
                        the end the following: ``, and (T) with respect 
                        to disease management services described in 
                        section 1861(s)(16), the amounts paid shall be 
                        100 percent of the payment amounts established 
                        under section 1889''.
                    (B) Deductible.--The first sentence of section 
                1833(b) of the Social Security Act (42 U.S.C. 1395l(b)) 
                is amended--
                            (i) by striking ``and'' before ``(6)''; and
                            (ii) by inserting before the period the 
                        following: ``, and (7) such deductible shall 
                        not apply with respect to disease management 
                        services (as described in section 
                        1861(s)(16))''.
            (3) Conforming amendments.--Sections 1864(a), 
        1902(a)(9)(C), and 1915(a)(1)(B)(ii)(I) of the Social Security 
        Act (42 U.S.C. 1395aa(a), 1396a(a)(9)(C), and 
        1396n(a)(1)(B)(ii)(I)), as amended by section 201(a)(2), are 
        each further amended by striking ``paragraphs (17) and (18)'' 
        each place it appears and inserting ``paragraphs (18) and 
        (19)''.
    (c) Enrollment.--
            (1) In general.--To carry out the provisions of section 
        1889 of the Social Security Act, as added by subsection (a), 
        the Secretary of Health and Human Services shall carry out a 
        national public relations and enrollment effort aimed at both 
        providers and consumers of health care to ensure widespread 
        awareness of the importance of serious and disabling chronic 
        illness management and the services available under section 
        1889 to initiate--
                    (A) in 2002, the National Diabetes Pilot Initiative 
                to Improve Chronic Illness Care and the National 
                Alzheimer's Disease Pilot Initiative to Improve Chronic 
                Illness Care, established in subsection (a)(2) of such 
                section; and
                    (B) in 2006, the National Initiative to Improve 
                Chronic Illness Care, established in subsection (a)(3) 
                of such section.
            (2) Authorization of appropriations.--There are authorized 
        to be appropriated to the Secretary of Health and Human 
        Services in appropriate part from the Federal Hospital 
        Insurance and Federal Supplementary Medical Insurance Trust 
        Funds such sums as are necessary to carry out the enrollment 
        effort under paragraph (1).

     TITLE IV--INTEGRATING MEDICARE AND MEDICAID FOR DUAL ELIGIBLES

SEC. 401. PROVISION OF WAIVER AUTHORITY TO SERVE DUAL ELIGIBLES MORE 
              EFFICIENTLY.

    (a) Medicare Fee-for-Service.--
            (1) In general.--Title XVIII of the Social Security Act is 
        amended by adding at the end the following new section:

    ``clarification of waiver authority to coordinate and integrate 
       services and administration under this title and title xix

    ``Sec. 1897. (a) In General.--A State, health plan, or provider may 
submit to the Secretary a request to waive requirements of this title 
to permit States to enhance the coordination and integration of items 
and services and administration provided under this title with items 
and services provided under title XIX.
    ``(b) Deadline for Action on Waiver.--The Secretary shall approve, 
deny, or request additional information for a request for waiver 
submitted under subsection (a) by not later than 90 days after the 
receipt of such submission.
    ``(c) Coordination and Integration of Items and Services 
Described.--The coordination and integration of items and services 
referred to in subsection (a) may include the following:
            ``(1) A process for unified enrollment under both titles.
            ``(2) A unified quality improvement program.
            ``(3) A unified grievance and appeals process.
            ``(4) Unified provider and payer reporting requirements.
            ``(5) Alternative payment methodologies under this title, 
        including modified risk adjusters and risk sharing approaches.
    ``(d) Limitation.--
            ``(1) In general.--The Secretary shall not grant a waiver 
        under this section unless the Secretary determines that 
        services furnished under the waiver--
                    ``(A) are offered to an individual for which 
                coverage for items and services is provided for under 
                this title and title XIX; and
                    ``(B) are cost effective.
            ``(2) Cost effective defined.--For purposes of paragraph 
        (1), the term `cost effective' means that services offered 
        under a waiver granted by the Secretary under this section do 
        not result, in the aggregate, in greater combined payments 
        under this title and title XIX for such services than the 
        combined payments that would have been made under such titles 
        on a fee-for-service basis to an actuarially equivalent 
        population group.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect January 1, 2001.
    (b) Medicaid.--
            (1) In general.--Section 1915(a) of the Social Security Act 
        (42 U.S.C. 1396n(a)) is amended--
                    (A) by striking ``or'' at the end of paragraph (1);
                    (B) by striking the period at the end of paragraph 
                (2) and adding ``or''; and
                    (C) by adding at the end the following new 
                paragraph:
            ``(3) consistent with the provisions of subsection (i) has 
        entered into a contract with an organization to provide care 
        and services, which may include care and services in addition 
        to those offered under the State plan, to individuals--
                    ``(A) who are eligible for medical assistance,
                    ``(B) who elect to obtain such care and services 
                from such organization, and
                    ``(C) who are at least 65 years of age or have a 
                disability or a serious and disabling chronic illness, 
                including individuals who are also eligible for health 
                insurance benefits under title XVIII.''.
            (2) Requirements.--Section 1915 of the Social Security Act 
        (42 U.S.C. 1396n) is amended by adding at the end the following 
        new subsection:
    ``(i) For purposes of contracts entered into under subsection 
(a)(3), the following provisions apply:
            ``(1) For purposes of payments to States for medical 
        assistance under this title, individuals who are eligible to 
        receive care and services under subsection (a)(3) and who meet 
        the income and resource eligibility requirements of individuals 
        who are eligible for medical assistance under section 
        1902(a)(10)(II)(ii)(VI) shall be treated as individuals 
        described in such section during enrollment with an 
        organization under such subsection.
            ``(2) Section 1924 applies to individuals receiving care 
        and services under subsection (a)(3), and in applying such 
        section under subsection (a)(3), the term `institutionalized 
        spouse' means an individual--
                    ``(A) who is in a medical institution or nursing 
                facility or who (at the option of the State) is 
                described in section 1902(a)(10)(II)(ii)(VI), and
                    ``(B) whose spouse is not in a medical institution 
                or nursing facility.
            ``(3) A State may seek a waiver under title XVIII, to 
        integrate care and services furnished under this title with 
        items and services furnished under title XVIII.
            ``(4) Care and services provided under subsection (a)(3) 
        shall be cost effective, determined as follows:
                    ``(A) In the case of a program implemented under 
                subsection (a)(3) with no corresponding waiver under 
                title XVIII, the aggregate medical assistance payments 
                to the organization for a defined scope of care and 
                services furnished to beneficiaries may not exceed the 
                medical assistance costs of providing those same 
                services on a fee-for-service basis to an actuarially 
                equivalent population.
                    ``(B) In the case of a program implemented under 
                subsection (a)(3) with a waiver under title XVIII, 
                services offered do not result, in the aggregate, in 
                greater combined payments under this title and title 
                XVIII for such services than the combined payments that 
                would have been made under such titles on a fee-for-
                service basis to an actuarially equivalent population 
                group.''.
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