I

106TH CONGRESS

2D SESSION H. R. 5296

To amend title XVIII of the Social Security Act to revise and improve

the Medicare Program.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 26, 2000

Mr. ENGLISH introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committees on Commerce, the Budget, and Rules, 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 revise

and improve the Medicare Program.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Medicare Quality As5 surance Act of 2000’’.
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1 TITLE I—MEDICARE FEE FOR

2 SERVICE PAYMENT IMPROVE3 MENTS

4 SEC. 101. REVISION OF PPS HOSPITAL PAYMENT UPDATE.

5 Section 1886(b)(3)(B)(i) of the Social Security Act

6 (42 U.S.C. 1395ww(b)(3)(B)(i)) is amended—

7 (1) in subclause (XV), by adding ‘‘and’’ at the

8 end;

9 (2) by striking subclauses (XVI) and (XVII);

10 (3) by redesignating subclause (XVIII) as sub11 clause (XVI); and

12 (4) in subclause (XVI), as so redesignated, by

13 striking ‘‘fiscal year 2003’’ and inserting ‘‘fiscal year

14 2001’’.

15 SEC. 102. REVISION OF REDUCTION OF INDIRECT GRAD16 UATE MEDICAL EDUCATION PAYMENTS.

17 (a) IN GENERAL.—Section 1886(d)(5)(B)(ii) of the

18 Social Security Act (42 U.S.C. 1395ww(d)(5)(B)(ii)) is

19 amended—

20 (1) in subclause (IV), by striking ‘‘fiscal year

21 2000’’ and inserting ‘‘each of fiscal years 2000 and

22 2001’’; and

23 (2) in each of subclauses (V) and (VI), by strik24 ing ‘‘2001’’ and inserting ‘‘2002’’.
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1 (b) TECHNICAL AMENDMENTS.—Section

2 1886(d)(5)(B) of such Act (42 U.S.C. 1395ww(d)(5)(B)),

3 as amended by paragraph (1), is amended—

4 (1) by realigning the left margins of clauses (ii)

5 and (v) so as to align with the left margin of clause

6 (i); and

7 (2) by realigning the left margins of subclauses

8 (I) through (V) of clause (ii) appropriately.

9 SEC. 103. INCREASE IN MARKET BASKET PERCENTAGE IN10 CREASE FOR FISCAL YEAR 2001.

11 (a) IN GENERAL.—Section 1888(e)(4)(E)(ii) of the

12 Social Security Act (42 U.S.C. 1395yy(e)(4)(E)(ii)) is

13 amended—

14 (1) by redesignating subclause (III) as sub15 clause (IV);

16 (2) by striking subclause (II); and

17 (3) by inserting after subclause (I) the fol18 lowing new subclauses:

19 ‘‘(II) for fiscal year 2001, the

20 rate computed for fiscal year 2000 in21 creased by the skilled nursing facility

22 market basket percentage change for

23 fiscal year 2000 plus 4 percentage

24 points;
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1 ‘‘(III) for fiscal year 2002, the

2 rate computed for fiscal year 2001 in3 creased by the skilled nursing facility

4 market basket percentage change for

5 fiscal year 2001 minus 1 percentage

6 point; and’’.

7 (b) REVISED DEFINITION OF SKILLED NURSING FA8 CILITY MARKET BASKET INDEX; ANNUAL WAGE SURVEY

9 FOR PERIODS AFTER 1998.—

10 (1) REQUIRING USE OF ACTUAL COSTS IN11 CURRED BY FACILITIES.—Section 1888(e)(5)(A) of

12 such Act (42 U.S.C. 1395yy(e)(5)(A)) is amended

13 by adding at the end the following: ‘‘Such index

14 shall be based, in appropriate part, on actual in15 creases in the cost of wages incurred by skilled nurs16 ing facilities in furnishing covered skilled nursing fa17 cility services.

18 (2) REQUIRING ANNUAL SURVEYS OF COSTS.—

19 For purposes of determining (under the second sen20 tence of section 1888(e)(5)(A)) the actual increases

21 in the cost of wages incurred by skilled nursing fa22 cilities in furnishing covered skilled nursing facility

23 services the Secretary of Health and Human Serv24 ices shall conduct annual surveys of such costs for
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1 purposes of revising and updating the skilled nurs2 ing facility market basket index under such section.

3 SEC. 104. ELIMINATION OF 15 PERCENT REDUCTION IN

4 PAYMENT RATES UNDER THE MEDICARE

5 PROSPECTIVE PAYMENT SYSTEM FOR HOME

6 HEALTH SERVICES.

7 (a) IN GENERAL.—Section 1895(b)(3)(A) of the So8 cial Security Act (42 U.S.C. 1395fff(b)(3)(A)), as amend9 ed by sections 302(b) and 303(f) of the Medicare, Med10 icaid, and SCHIP Balanced Budget Refinement Act of

11 1999 (113 Stat. 1501A–359, 361), as enacted into law

12 by section 1000(a)(6) of Public Law 106–113, is amended

13 to read as follows:

14 ‘‘(A) INITIAL BASIS.—Under such system

15 the Secretary shall provide for computation of

16 a standard prospective payment amount (or

17 amounts). Such amount (or amounts) shall ini18 tially be based on the most current audited cost

19 report data available to the Secretary and shall

20 be computed in a manner so that the total

21 amounts payable under the system for the 12-

22 month period beginning on the date the Sec23 retary implements the system shall be equal to

24 the total amount that would have been made if

25 the system had not been in effect and if section
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1 1861(v)(1)(L)(ix) had not been enacted. Each

2 such amount shall be standardized in a manner

3 that eliminates the effect of variations in rel4 ative case mix and area wage adjustments

5 among different home health agencies in a

6 budget neutral manner consistent with the case

7 mix and wage level adjustments provided under

8 paragraph (4)(A). Under the system, the Sec9 retary may recognize regional differences or dif10 ferences based upon whether or not the services

11 or agency are in an urbanized area.’’.

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

13 subsection (a) shall take effect as if included in the enact14 ment of the Medicare, Medicaid, and SCHIP Balanced

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

16 SEC. 105. TWO-YEAR EXTENSION OF MORATORIUM IN CAPS

17 FOR THERAPY SERVICES.

18 (a) EXTENSION OF MORATORIUM.—Section

19 1833(g)(4) of the Social Security Act (42 U.S.C.

20 1395l(g)(4)), as added by section 221(a) of Medicare,

21 Medicaid, and SCHIP Balanced Budget Refinement Act

22 of 1999 (113 Stat. 1501A–351), is amended by striking

23 ‘‘and 2001’’ and inserting ‘‘through 2003’’.

24 (b) EXTENSION OF REPORT.—Section 4541(d)(2) of

25 Balanced Budget Act of 1997, as amended by section
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1 221(c) of Medicare, Medicaid, and SCHIP Balanced

2 Budget Refinement Act of 1999 (113 Stat. 1501A–351),

3 is amended by striking ‘‘January 1, 2001’’ and inserting

4 ‘‘January 1, 2002’’.

5 TITLE II—MEDICARE+CHOICE

6 PROGRAM IMPROVEMENTS

7 SEC. 201. ELIMINATION OF BUDGET NEUTRALITY ADJUST8 MENT FOR 2001 AND 2002.

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

10 1395w–23(c)) is amended—

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

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

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

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

15 2001 or 2002)’’ after ‘‘for each year’’.

16 SEC. 202. INCREASING MINIMUM PAYMENT AMOUNT.

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

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

19 amended—

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

21 inserting ‘‘(ii)(I) Subject to subclause (II), for a suc22 ceeding year’’; and

23 (2) by adding at the end the following new sub24 clause:
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1 ‘‘(II) For 2001 for any of the 50

2 States and the District of Columbia,

3 $450.’’.

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

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

6 SEC. 203. ALLOWING MOVEMENT TO 50:50 PERCENT BLEND

7 IN 2002.

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

9 U.S.C. 1395w–23(c)(2)) is amended—

10 (1) by striking the period at the end of sub11 paragraph (F) and inserting a semicolon; and

12 (2) by adding after and below subparagraph

13 (F) the following:

14 ‘‘except that a Medicare+Choice organization may

15 elect to apply subparagraph (F) (rather than sub16 paragraph (E)) for 2001 and for 2002.’’.

17 SEC. 204. INCREASED UPDATE FOR PAYMENT AREAS WITH

18 ONLY ONE OR NO MEDICARE+CHOICE CON19 TRACTS.

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

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

22 amended—

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

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

25 a subsequent year’’; and
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1 (2) by adding at the end the following new sub2 clause:

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

4 and 2005, in the case of a

5 Medicare+Choice payment area in which

6 there is no more than one contract entered

7 into under this part as of July 1 before the

8 beginning of the year, 102.5 percent of the

9 annual Medicare+Choice capitation rate

10 under this paragraph for the area for the

11 previous year.’’.

12 (b) CONSTRUCTION.—The amendments made by sub13 section (a) do not affect the payment of a first time bonus

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

15 U.S.C. 1395w–23(i)).

16 SEC. 205. PERMITTING HIGHER NEGOTIATED RATES IN

17 CERTAIN MEDICARE+CHOICE PAYMENT

18 AREAS BELOW NATIONAL AVERAGE.

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

20 U.S.C. 1395w–23(c)(1)) is amended—

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

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

23 (2) by adding at the end the following new sub24 paragraph:
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1 ‘‘(D) PERMITTING HIGHER RATES

2 THROUGH NEGOTIATION.—

3 ‘‘(i) IN GENERAL.—For each year be4 ginning with 2004, in the case of a

5 Medicare+Choice payment area for which

6 the Medicare+Choice capitation rate under

7 this paragraph would otherwise be less

8 than the United States per capita cost

9 (USPCC), as calculated by the Secretary,

10 a Medicare+Choice organization may ne11 gotiate with the Secretary an annual per

12 capita rate that—

13 ‘‘(I) reflects an annual rate of in14 crease up to the rate of increase speci15 fied in clause (ii);

16 ‘‘(II) takes into account audited

17 current data supplied by the organiza18 tion on its adjusted community rate

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

20 ‘‘(III) does not exceed the United

21 States per capita cost, as projected by

22 the Secretary for the year involved.

23 ‘‘(ii) MAXIMUM RATE DESCRIBED.—

24 The rate of increase specified in this clause

25 for a year is the rate of inflation in private
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1 health insurance for the year involved, as

2 projected by the Secretary, and includes

3 such adjustments as may be necessary—

4 ‘‘(I) to reflect the demographic

5 characteristics in the population under

6 this title; and

7 ‘‘(II) to eliminate the costs of

8 prescription drugs.

9 ‘‘(iii) ADJUSTMENTS FOR OVER OR

10 UNDER PROJECTIONS.—If subparagraph is

11 applied to an organization and payment

12 area for a year, in applying this subpara13 graph for a subsequent year the provisions

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

15 same manner as such provisions apply

16 under this paragraph.’’.

17 TITLE III—SOCIAL SECURITY

18 AND MEDICARE LOCK-BOX

19 SEC. 301. SHORT TITLE.

20 This title may be cited as the ‘‘Social Security and

21 Medicare Lock-box Act of 2000’’.

22 SEC. 302. PROTECTION OF SOCIAL SECURITY SURPLUSES.

23 (a) POINTS OF ORDER TO PROTECT SOCIAL SECU24 RITY SURPLUSES.—Section 312 of the Congressional
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1 Budget Act of 1974 is amended by adding at the end the

2 following new subsection:

3 ‘‘(g) POINTS OF ORDER TO PROTECT SOCIAL SECU4 RITY SURPLUSES.—

5 ‘‘(1) CONCURRENT RESOLUTIONS ON THE

6 BUDGET.—It shall not be in order in the House of

7 Representatives or the Senate to consider any con8 current resolution on the budget, or conference re9 port thereon or amendment thereto, that would set

10 forth an on-budget deficit for any fiscal year.

11 ‘‘(2) SUBSEQUENT LEGISLATION.—Except as

12 provided by paragraph (3), it shall not be in order

13 in the House of Representatives or the Senate to

14 consider any bill, joint resolution, amendment, mo15 tion, or conference report if—

16 ‘‘(A) the enactment of that bill or resolu17 tion as reported;

18 ‘‘(B) the adoption and enactment of that

19 amendment; or

20 ‘‘(C) the enactment of that bill or resolu21 tion in the form recommended in that con22 ference report,

23 would cause or increase an on-budget deficit for any

24 fiscal year.
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1 ‘‘(3) EXCEPTION.—Paragraph (2) shall not

2 apply to social security reform legislation as defined

3 in section 304(1) or Medicare reform legislation as

4 defined by section 304(2).

5 ‘‘(4) DEFINITION.—For purposes of this sec6 tion, the term ‘on-budget deficit’, when applied to a

7 fiscal year, means the deficit in the budget as set

8 forth in the most recently agreed to concurrent reso9 lution on the budget pursuant to section 301(a)(3)

10 for that fiscal year.’’.

11 (b) CONTENT OF CONCURRENT RESOLUTION ON THE

12 BUDGET.—Section 301(a) of the Congressional Budget

13 Act of 1974 is amended by redesignating paragraphs (6)

14 and (7) as paragraphs (7) and (8), respectively, and by

15 inserting after paragraph (5) the following new paragraph:

16 ‘‘(6) the receipts, outlays, and surplus or deficit

17 in the Federal Old-Age and Survivors Insurance

18 Trust Fund and the Federal Disability Insurance

19 Trust Fund, combined, established by title II of the

20 Social Security Act;’’.

21 (c) SUPER MAJORITY REQUIREMENT.—(1) Section

22 904(c)(1) of the Congressional Budget Act of 1974 is

23 amended by inserting ‘‘312(g),’’ after ‘‘310(d)(2),’’.
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1 (2) Section 904(d)(2) of the Congressional Budget

2 Act of 1974 is amended by inserting ‘‘312(g),’’ after

3 ‘‘310(d)(2),’’.

4 SEC. 303. PROTECTION OF MEDICARE SURPLUSES.

5 (a) POINTS OF ORDER TO PROTECT MEDICARE SUR6 PLUSES.—Section 312 of the Congressional Budget Act

7 of 1974, as amended by section 301, is further amended

8 by adding at the end the following new subsection:

9 ‘‘(h) POINTS OF ORDER TO PROTECT MEDICARE

10 SURPLUSES.—

11 ‘‘(1) CONCURRENT RESOLUTIONS ON THE

12 BUDGET.—It shall not be in order in the House of

13 Representatives or the Senate to consider any con14 current resolution on the budget, or conference re15 port thereon or amendment thereto, that would set

16 forth an on-budget surplus for any fiscal year that

17 is less than the projected surplus of the Federal

18 Hospital Insurance Trust Fund for that fiscal year

19 (as assumed in that resolution).

20 ‘‘(2) SUBSEQUENT LEGISLATION.—Except as

21 provided by paragraph (3), it shall not be in order

22 in the House of Representatives or the Senate to

23 consider any bill, joint resolution, amendment, mo24 tion, or conference report if—
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1 ‘‘(A) the enactment of that bill or resolu2 tion as reported;

3 ‘‘(B) the adoption and enactment of that

4 amendment; or

5 ‘‘(C) the enactment of that bill or resolu6 tion in the form recommended in that con7 ference report,

8 would cause the on-budget surplus for any fiscal

9 year to be less than the projected surplus of the

10 Federal Hospital Insurance Trust Fund (as assumed

11 in the most recently agreed to concurrent resolution

12 on the budget) for that fiscal year or increase the

13 amount by which the on-budget surplus for any fis14 cal year would be less than such trust fund surplus

15 for that fiscal year.

16 ‘‘(3) EXCEPTION.—Paragraph (2) shall not

17 apply to Medicare reform legislation as defined in

18 section 304(2) of the Social Security and Medicare

19 Lock-box Act of 2000.

20 ‘‘(4) DEFINITION.—For purposes of this sec21 tion, the term ‘on-budget surplus’, when applied to

22 a fiscal year, means the surplus in the budget as set

23 forth in the most recently agreed to concurrent reso24 lution on the budget pursuant to section 301(a)(3)

25 for that fiscal year.’’.
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1 (b) SUPER MAJORITY REQUIREMENT.—

2 (1) POINT OF ORDER.—Section 904(c)(1) of the

3 Congressional Budget Act of 1974 (as amended by

4 section 3) is further amended by inserting ‘‘312(h),’’

5 after ‘‘312(g),’’.

6 (2) WAIVER.—Section 904(d)(2) of the Con7 gressional Budget Act of 1974 (as amended by sec8 tion 3) is further amended by inserting ‘‘312(h),’’

9 after ‘‘312(g),’’.

10 SEC. 304. DEFINITIONS.

11 As used in this Act:

12 (1) SOCIAL SECURITY REFORM LEGISLATION.—

13 The term ‘‘social security reform legislation’’ means

14 a bill or a joint resolution to save social security and

15 includes a provision stating the following: ‘‘For pur16 poses of the Social Security and Medicare Lock-box

17 Act of 2000, this Act constitutes social security re18 form legislation to save social security.’’.

19 (2) MEDICARE REFORM LEGISLATION.—The

20 term ‘‘Medicare reform legislation’’ means a bill or

21 a joint resolution to save Medicare and includes a

22 provision stating the following: ‘‘For purposes of the

23 Social Security and Medicare Lock-box Act of 2000,

24 this Act constitutes Medicare reform legislation to

25 save Medicare.’’.
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1 SEC. 305. EFFECTIVE DATE.

2 (a) IN GENERAL.—This Act shall take effect upon

3 the date of its enactment and the amendments made by

4 this Act shall apply to fiscal year 2001 and subsequent

5 fiscal years.

6 (b) EXPIRATION.—(1) Sections 301(a)(6) and 312(g)

7 of the Congressional Budget Act of 1974 shall expire upon

8 the enactment of social security reform legislation.

9 (2) Section 312(h) of the Congressional Budget Act

10 of 1974 shall expire upon the enactment of Medicare re11 form legislation.

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