I

106TH CONGRESS

2D SESSION H. R. 4951

To amend part C of title XVIII to stabilize the Medicare+Choice Program

by improving the methodology for the calculation of Medicare+Choice

payment rates, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JULY 25, 2000

Mr. GREENWOOD (for himself, Mr. DOOLEY of California, Mr. SHERWOOD,

Mr. BAKER, Mr. PETERSON of Minnesota, Mr. ENGLISH, Mr. TOOMEY,

Mr. HOBSON, Mr. TAUZIN, Mr. FOLEY, Mr. HOLDEN, Mr. PETERSON of

Pennsylvania, Mr. BRYANT, Mr. BILBRAY, Mr. RAMSTAD, Mr. SHAYS,

Mr. CAMPBELL, and Mr. VITTER) introduced the following bill; which was

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

Committee on Commerce, for a period to be subsequently determined by

the Speaker, in each case for consideration of such provisions as fall within the jursidiction of the committee concerned

A BILL

To amend part C of title XVIII to stabilize the

Medicare+Choice Program by improving the methodology for the calculation of Medicare+Choice payment

rates, and for other purposes.

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

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

3 ‘‘Medicare Beneficiaries’ Choice Stabilization Act of

4 2000’’.

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

6 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Establishment of payment floor for Medicare+Choice payment rates

after applying risk-adjustment methodology.

Sec. 3. Change in application of budget neutrality adjustment for 2001 and

2002.

Sec. 4. Increase in national per capita Medicare+Choice growth percentage in

2001 and 2002.

Sec. 5. Increasing minimum payment amount.

Sec. 6. Allowing movement to 50:50 percent blend in 2002.

Sec. 7. Increased update for payment areas with only one or no

Medicare+Choice contracts.

Sec. 8. Permitting higher negotiated rates in certain Medicare+Choice payment

areas below national average.

Sec. 9. 10-year phase in of risk adjustment based on data from all settings.

Sec. 10. Delay from July to November, 2000 in deadline for offering and withdrawing Medicare+Choice plans for 2001.

Sec. 11. Miscellaneous regulatory changes.

7 SEC. 2. ESTABLISHMENT OF PAYMENT FLOOR FOR

8 MEDICARE+CHOICE PAYMENT RATES AFTER

9 APPLYING RISK-ADJUSTMENT METHOD10 OLOGY.

11 (a) IN GENERAL.—Section 1853(c)(1) of the Social

12 Security Act (42 U.S.C. 1395w–23(c)(1)) is amended—

13 (1) in the matter preceding subparagraph (A),

14 by striking ‘or (C)’ and inserting ‘(C), or (D)’; and

15 (2) by adding at the end the following new sub16 paragraph:
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1 ‘‘(D) DEMOGRAPHICALLY ADJUSTED FEE2 FOR-SERVICE PER CAPITA EXPENDITURES.—

3 ‘‘(i) IN GENERAL.—For 2001 and

4 each subsequent year, 90 percent of the

5 adjusted average per capita cost for the

6 year for the Medicare+Choice payment

7 area determined by the Secretary based

8 upon the rule specified under paragraph

9 (4) of section 1876(a) and calculated with10 out regard to the adjustment under para11 graph (1)(C) of such section.

12 ‘‘(ii) SPECIAL RULE FOR RISK AD13 JUSTMENT.—For purposes of applying risk

14 adjustment to the payment amount deter15 mined under this subparagraph for a de16 mographic class, the risk adjustment for

17 such demographic class shall be deter18 mined under the methodology applied by

19 the Secretary under section 1876(a)(4)

20 without regard to subsection (a)(3) of this

21 section.’’.

22 (b) CONTINUATION OF COMPUTATION OF AAPCC

23 DATA.—Section 1853(b) of such Act (42 U.S.C. 1395w–

24 23(b)) is amended by adding at the end the following new

25 paragraph:
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1 ‘‘(4) CONTINUED COMPUTATION AND PUBLICA2 TION OF COUNTY-SPECIFIC PER CAPITA FEE-FOR3 SERVICE EXPENDITURE INFORMATION.—Using the

4 most recent data available, the Secretary shall pro5 vide for the computation and publication, on an an6 nual basis at the time of publication of the annual

7 Medicare+Choice capitation rates, of information on

8 the level of the average annual per capita costs (de9 scribed in section 1876(a)(4)) for each

10 Medicare+Choice payment area.’’.

11 SEC. 3. ELIMINATION OF BUDGET NEUTRALITY ADJUST12 MENT FOR 2001 AND 2002.

13 Section 1853(c) of the Social Security Act (42 U.S.C.

14 1395w–23(c)) is amended—

15 (1) in paragraph (1)(A) in the matter following

16 clause (ii), by inserting ‘‘for a year (other than 2001

17 or 2002)’’ after ‘‘multiplied’’; and

18 (2) in paragraph (5), by inserting ‘‘(other than

19 2001 or 2002)’’ after ‘‘for each year’’.

20 SEC. 4. INCREASE IN NATIONAL PER CAPITA

21 MEDICARE+CHOICE GROWTH PERCENTAGE

22 IN 2001 AND 2002.

23 Section 1853(c)(6)(B) of the Social Security Act (42

24 U.S.C. 1395w–23(c)(6)(B)) is amended—
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1 (1) in clause (iv), by striking ‘‘for 2001, 0.5

2 percentage points’’ and inserting ‘‘for 2001, 0 per3 centage points’’; and

4 (2) in clause (v), by striking ‘‘for 2002, 0.3 per5 centage points’’ and inserting ‘‘for 2002, 0 percent6 age points’’.

7 SEC. 5. INCREASING MINIMUM PAYMENT AMOUNT.

8 (a) IN GENERAL.—Section 1853(c)(1)(B)(ii) of the

9 Social Security Act (42 U.S.C. 1395w–23(c)(1)(B)(ii)) is

10 amended—

11 (1) by striking ‘‘(ii) For a succeeding year’’ and

12 inserting ‘‘(ii)(I) Subject to subclause (II), for a suc13 ceeding year’’; and

14 (2) by adding at the end the following new sub15 clause:

16 ‘‘(II) For 2001 for any of the 50

17 States and the District of Columbia,

18 $450.’’.

19 (b) EFFECTIVE DATE.—The amendments made by

20 subsection (a) apply to years beginning with 2001.

21 SEC. 6. ALLOWING MOVEMENT TO 50:50 PERCENT BLEND IN

22 2002.

23 Section 1853(c)(2) of the Social Security Act (42

24 U.S.C. 1395w–23(c)(2)) is amended—
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1 (1) by striking the period at the end of sub2 paragraph (F) and inserting a semicolon; and

3 (2) by adding after and below subparagraph

4 (F) the following:

5 ‘‘except that a Medicare+Choice organization may

6 elect to apply subparagraph (F) (rather than sub7 paragraph (E)) for 2001 and for 2002.’’.

8 SEC. 7. INCREASED UPDATE FOR PAYMENT AREAS WITH

9 ONLY ONE OR NO MEDICARE+CHOICE CON10 TRACTS.

11 (a) IN GENERAL.—Section 1853(c)(1)(C)(ii) of the

12 Social Security Act (42 U.S.C. 1395w–23(c)(1)(C)(ii)) is

13 amended—

14 (1) by striking ‘‘(ii) For a subsequent year’’

15 and inserting ‘‘(ii)(I) Subject to subclause (II), for

16 a subsequent year’’; and

17 (2) by adding at the end the following new sub18 clause:

19 ‘‘(II) During 2001, 2002, 2003, 2004,

20 and 2005, in the case of a

21 Medicare+Choice payment area in which

22 there is no more than one contract entered

23 into under this part as of July 1 before the

24 beginning of the year, 102.5 percent of the

25 annual Medicare+Choice capitation rate
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1 under this paragraph for the area for the

2 previous year.’’.

3 (b) CONSTRUCTION.—The amendments made by sub4 section (a) do not affect the payment of a first time bonus

5 under section 1853(i) of the Social Security Act (42

6 U.S.C. 1395w–23(i)).

7 SEC. 8. PERMITTING HIGHER NEGOTIATED RATES IN CER8 TAIN MEDICARE+CHOICE PAYMENT AREAS

9 BELOW NATIONAL AVERAGE.

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

11 U.S.C. 1395w–23(c)(1)) is amended—

12 (1) in the matter before subparagraph (A), by

13 striking ‘‘or (C)’’ and inserting ‘‘(C), or (D)’’; and

14 (2) by adding at the end the following new sub15 paragraph:

16 ‘‘(D) PERMITTING HIGHER RATES

17 THROUGH NEGOTIATION.—

18 ‘‘(i) IN GENERAL.—For each year be19 ginning with 2004, in the case of a

20 Medicare+Choice payment area for which

21 the Medicare+Choice capitation rate under

22 this paragraph would otherwise be less

23 than the United States per capita cost

24 (USPCC), as calculated by the Secretary,

25 a Medicare+Choice organization may ne-
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1 gotiate with the Secretary an annual per

2 capita rate that—

3 ‘‘(I) reflects an annual rate of in4 crease up to the rate of increase speci5 fied in clause (ii);

6 ‘‘(II) takes into account audited

7 current data supplied by the organiza8 tion on its adjusted community rate

9 (as defined in section 1854(f)(3)); and

10 ‘‘(III) does not exceed the United

11 States per capita cost, as projected by

12 the Secretary for the year involved.

13 ‘‘(ii) MAXIMUM RATE DESCRIBED.—

14 The rate of increase specified in this clause

15 for a year is the rate of inflation in private

16 health insurance for the year involved, as

17 projected by the Secretary, and includes

18 such adjustments as may be necessary—

19 ‘‘(I) to reflect the demographic

20 characteristics in the population under

21 this title; and

22 ‘‘(II) to eliminate the costs of

23 prescription drugs.

24 ‘‘(iii) ADJUSTMENTS FOR OVER OR

25 UNDER PROJECTIONS.—If subparagraph is
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1 applied to an organization and payment

2 area for a year, in applying this subpara3 graph for a subsequent year the provisions

4 of paragraph (6)(C) shall apply in the

5 same manner as such provisions apply

6 under this paragraph.’’.

7 SEC. 9. 10-YEAR PHASE IN OF RISK ADJUSTMENT BASED ON

8 DATA FROM ALL SETTINGS.

9 Section 1853(a)(3)(C)(ii) of the Social Security Act

10 (42 U.S.C. 1395w–23(c)(1)(C)(ii)) is amended—

11 (1) by striking the period at the end of sub12 clause (II) and inserting a semicolon; and

13 (2) by adding after and below subclause (II) the

14 following:

15 ‘‘and, beginning in 2004, insofar as such

16 risk adjustment is based on data from all

17 (or substantially all) settings, the method18 ology shall be phased in equal increments

19 over a 10 year period, beginning with 2004

20 or (if later) the first year in which such

21 data is used.’’.
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1 SEC. 10. DELAY FROM JULY TO NOVEMBER, 2000 IN DEAD2 LINE FOR OFFERING AND WITHDRAWING

3 MEDICARE+CHOICE PLANS FOR 2001.

4 Notwithstanding any other provision of law, the dead5 line for a Medicare+Choice organization to withdraw the

6 offering of a Medicare+Choice plan under part C of title

7 XVIII of the Social Security Act (or otherwise to submit

8 information required for the offering of such a plan) for

9 2001 is delayed from July 1, 2000, to November 1, 2000,

10 and any such organization that provided notice of with11 drawal of such a plan during 2000 before the date of the

12 enactment of this Act may rescind such withdrawal at any

13 time before November 1, 2000.

14 SEC. 11. MISCELLANEOUS REGULATORY CHANGES.

15 (a) PROHIBITION ON REQUIREMENT TO SUBMIT EN16 COUNTER DATA.—Section 1853(a)(3)(B) of the Social Se17 curity Act (42 U.S.C. 1395w–23(a)(3)(B)) is amended—

18 (1) by designating the matter following ‘‘DATA

19 COLLECTION’’ as a clause (i) with appropriate inden20 tation and the heading ‘‘IN GENERAL’’; and

21 (2) by adding at the end the following new

22 clauses:

23 ‘‘(ii) ISSUANCE OF DATA SUBMISSION

24 REQUIREMENTS.—The Secretary may not

25 require under clause (i) the submission of

26 encounter data to support a risk adjust-
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1 ment methodology based on all (or sub2 stantially all) settings until a reasonable

3 time after the Secretary issues the com4 plete requirements for data submission.

5 Such requirements shall be limited to the

6 minimum data elements necessary to sup7 port the risk adjustment methodology.

8 Such system shall be designed to accept

9 the required minimum data elements in a

10 form and manner compatible with

11 Medicare+Choice organizations’ oper12 ations.

13 ‘‘(iii) EVALUATION.—In issuing such

14 data submission requirements, the Sec15 retary must include an evaluation by an

16 outside, independent actuary of whether

17 the proposed data elements are the min18 imum necessary to support the risk adjust19 ment methodology.’’.

20 (b) POST-STABILIZATION GUIDELINES.—Section

21 1852(d)(2) of such Act (42 U.S.C. 1395w–22(d)(2)) is

22 amended by adding at the end the following: ‘‘In pre23 scribing such guidelines—

24 ‘‘(A) post-stabilization care shall be limited

25 to care related to treatment of the condition
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1 that precipitated the provision of emergency

2 services; and

3 ‘‘(B) the provider of emergency services is

4 not authorized to provide post-stabilization care

5 unless—

6 ‘‘(i) the Medicare+Choice organiza7 tion has been notified as soon as prac8 ticable, but not later than 2 hours after

9 stabilization, in advance of the request to

10 provide such care;

11 ‘‘(ii) the organization has either ap12 proved the request or not responded to

13 such request within a reasonable period (of

14 at least 3 hours) after it has been notified;

15 and

16 ‘‘(iii) the emergency services provider

17 maintains a written documentation con18 cerning the notice and the organization’s

19 response to such notice.’’.

20 (c) ENROLLMENT PROCESS.—

21 (1) ALLOWING ON-LINE ENROLLMENT.—Sec22 tion 1851(c)(2) of such Act (42 U.S.C. 1395w–

23 21(c)(2)) is amended by adding at the end the fol24 lowing:
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1 ‘‘(C) ON-LINE APPLICATIONS.—Such proc2 ess shall permit the filing of appropriate elec3 tion forms under subparagraphs (A) and (B) to

4 be done through electronic means (including use

5 of the Internet).’’.

6 (2) MORATORIUM ON CHANGES IN

7 MEDICARE+CHOICE ENROLLMENT RULES.—The

8 Secretary of Health and Human Services shall not

9 make any changes in the enrollment and

10 disenrollment instructions and related materials (in11 cluding operational policy letters and evidence of

12 coverage) under the Medicare+Choice program

13 under part C of title XVIII of the Social Security

14 Act between the date of the enactment of this Act

15 and January 1, 2002, except as may be specifically

16 and only required to comply with a change in stat17 ute.

Æ