I

106TH CONGRESS

2D SESSION H. R. 5601

To amend titles XVIII, XIX, and XXI of the Social Security Act to provide

benefits improvements and beneficiary protections in the Medicare and

Medicaid programs and the State child health insurance program

(SCHIP), as revised by the Balanced Budget Act of 1997 and the

Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of

1999, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

OCTOBER 30, 2000

Mr. RANGEL (for himself and Mr. DINGELL) 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 jurisdiction of the committee concerned

A BILL

To amend titles XVIII, XIX, and XXI of the Social Security

Act to provide benefits improvements and beneficiary

protections in the Medicare and Medicaid programs and

the State child health insurance program (SCHIP), as

revised by the Balanced Budget Act of 1997 and the

Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999, 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; AMENDMENTS TO SOCIAL SECU2 RITY ACT; REFERENCES TO OTHER ACTS;

3 TABLE OF CONTENTS.

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

5 ‘‘Medicare, Medicaid, and SCHIP Benefits Improvement

6 and Protection Act of 2000’’.

7 (b) AMENDMENTS TO SOCIAL SECURITY ACT.—Ex8 cept as otherwise specifically provided, whenever in this

9 Act an amendment is expressed in terms of an amendment

10 to or repeal of a section or other provision, the reference

11 shall be considered to be made to that section or other

12 provision of the Social Security Act.

13 (c) REFERENCES TO OTHER ACTS.—In this Act:

14 (1) BALANCED BUDGET ACT OF 1997.—The

15 term ‘‘BBA’’ means the Balanced Budget Act of

16 1997 (Public Law 105–33; 111 Stat. 251).

17 (2) MEDICARE, MEDICAID, AND SCHIP BAL18 ANCED BUDGET REFINEMENT ACT OF 1999.—The

19 term ‘‘BBRA’’ means the Medicare, Medicaid, and

20 SCHIP Balanced Budget Refinement Act of 1999

21 (Appendix F, 113 Stat. 1501A–321), as enacted into

22 law by section 1000(a)(6) of Public Law 106–113.

23 (d) TABLE OF CONTENTS.—The table of contents of

24 this Act is as follows:

Sec. 1. Short title; amendments to Social Security Act; references to other Acts;

table of contents.
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TITLE I—MEDICARE BENEFICIARY IMPROVEMENTS

Subtitle A—Improved Preventive Benefits

Sec. 101. Coverage of biennial screening pap smear and pelvic exams.

Sec. 102. Coverage of screening for glaucoma.

Sec. 103. Coverage of screening colonoscopy for average risk individuals.

Sec. 104. Modernization of screening mammography benefit.

Sec. 105. Coverage of medical nutrition therapy services for beneficiaries with

diabetes or a renal disease.

Sec. 106. Extension of part A coverage for workers with disabilities.

Subtitle B—Other Beneficiary Improvements

Sec. 111. Acceleration of reduction of beneficiary copayment for hospital outpatient department services.

Sec. 112. Preservation of coverage of drugs and biologicals under part B of the

medicare program.

Sec. 113. Elimination of time limitation on medicare benefits for immunosuppressive drugs.

Sec. 114. Imposition of billing limits on drugs.

Sec. 115. Improving availability of QMB/SLMB application forms.

Subtitle C—Demonstration Projects and Studies

Sec. 121. Demonstration project for disease management for severely chronically ill medicare beneficiaries.

Sec. 122. Cancer prevention and treatment demonstration for ethnic and racial

minorities.

Sec. 123. Study on medicare coverage of routine thyroid screening.

Sec. 124. MedPAC study on consumer coalitions.

Sec. 125. Study on limitation on State payment for medicare cost-sharing affecting access to services for qualified medicare beneficiaries.

Sec. 126. Waiver of 24-month waiting period for medicare coverage of individuals disabled with amyotrophic lateral sclerosis (ALS).

Sec. 127. Studies on preventive interventions in primary care for older Americans.

Sec. 128. MedPAC study and report on medicare coverage of cardiac and pulmonary rehabilitation therapy services.

TITLE II—RURAL HEALTH CARE IMPROVEMENTS

Subtitle A—Critical Access Hospital Provisions

Sec. 201. Clarification of no beneficiary cost-sharing for clinical diagnostic laboratory tests furnished by critical access hospitals.

Sec. 202. Assistance with fee schedule payment for professional services under

all-inclusive rate.

Sec. 203. Exemption of critical access hospital swing beds from SNF PPS.

Sec. 204. Payment in critical access hospitals for emergency room on-call physicians.

Sec. 205. Treatment of ambulance services furnished by certain critical access

hospitals.

Sec. 206. GAO study on certain eligibility requirements for critical access hospitals.

Subtitle B—Other Rural Hospitals Provisions
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Sec. 211. Equitable treatment for rural disproportionate share hospitals.

Sec. 212. Option to base eligibility for medicare dependent, small rural hospital

program on discharges during 2 of the 3 most recently audited

cost reporting periods.

Sec. 213. Extension of option to use rebased target amounts to all sole community hospitals.

Sec. 214. MedPAC analysis of impact of volume on per unit cost of rural hospitals with psychiatric units.

Subtitle C—Other Rural Provisions

Sec. 221. Assistance for providers of ambulance services in rural areas.

Sec. 222. Payment for certain physician assistant services.

Sec. 223. Revision of medicare reimbursement for telehealth services.

Sec. 224. Expanding access to rural health clinics.

Sec. 225. MedPAC study on low-volume, isolated rural health care providers.

TITLE III—PROVISIONS RELATING TO PART A

Subtitle A—Inpatient Hospital Services

Sec. 301. Eliminating reduction in pps hospital payment update.

Sec. 302. Additional modification in transition for indirect medical education

(IME) percentage adjustment.

Sec. 303. Decrease in reductions for disproportionate share hospital (DSH)

payments.

Sec. 304. Wage index improvements.

Sec. 305. Payment for inpatient services of rehabilitation hospitals.

Sec. 306. Payment for inpatient services of psychiatric hospitals.

Sec. 307. Payment for inpatient services of long-term care hospitals.

Sec. 308. Increase in base payment to Puerto Rico acute care hospitals.

Subtitle B—Adjustments to PPS Payments for Skilled Nursing Facilities

Sec. 311. Elimination of reduction in skilled nursing facility (SNF) market basket update in 2001.

Sec. 312. Increase in nursing component of PPS Federal rate.

Sec. 313. Application of SNF consolidated billing requirement limited to part

A covered stays.

Sec. 314. Adjustment of rehabilitation RUGs to correct anomaly in payment

rates.

Sec. 315. Establishment of process for geographic reclassification.

Subtitle C—Hospice Care

Sec. 321. Full market basket increase for 2001 and 2002.

Sec. 322. Clarification of physician certification.

Sec. 323. MedPAC report on access to, and use of, hospice benefit.

Subtitle D—Other Provisions

Sec. 331. Relief from medicare part A late enrollment penalty for group buyin for State and local retirees.

Sec. 332. Hospital geographic reclassification for labor costs for other PPS systems.

TITLE IV—PROVISIONS RELATING TO PART B
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Subtitle A—Hospital Outpatient Services

Sec. 401. Revision of hospital outpatient PPS payment update.

Sec. 402. Clarifying process and standards for determining eligibility of devices

for pass-through payments under hospital outpatient PPS.

Sec. 403. Application of OPD PPS transitional corridor payments to certain

hospitals that did not submit a 1996 cost report.

Sec. 404. Application of rules for determining provider-based status for certain

entities.

Sec. 405. Treatment of children’s hospitals under prospective payment system.

Sec. 406. Inclusion of temperature monitored cryoablation in transitional passthrough for certain medical devices, drugs, and biologicals

under OPD PPS.

Subtitle B—Provisions Relating to Physicians’ Services

Sec. 411. GAO studies relating to physicians’ services.

Sec. 412. Physician group practice demonstration.

Sec. 413. Study on enrollment procedures for groups that retain independent

contractor physicians.

Subtitle C—Other Services

Sec. 421. 1-year extension of moratorium on therapy caps; report on standards

for supervision of physical therapy assistants.

Sec. 422. Update in renal dialysis composite rate.

Sec. 423. Payment for ambulance services.

Sec. 424. Ambulatory surgical centers.

Sec. 425. Full update for durable medical equipment.

Sec. 426. Full update for orthotics and prosthetics.

Sec. 427. Establishment of special payment provisions and requirements for

prosthetics and certain custom fabricated orthotic items.

Sec. 428. Replacement of prosthetic devices and parts.

Sec. 429. Revised part B payment for drugs and biologicals and related services.

Sec. 430. Contrast enhanced diagnostic procedures under hospital prospective

payment system.

Sec. 431. Qualifications for community mental health centers.

Sec. 432. Modification of medicare billing requirements for certain Indian providers.

Sec. 433. GAO study on coverage of surgical first assisting services of certified

registered nurse first assistants.

Sec. 434. MedPAC study and report on medicare reimbursement for services

provided by certain providers.

Sec. 435. MedPAC study and report on medicare coverage of services provided

by certain nonphysician providers.

Sec. 436. GAO study and report on the costs of emergency and medical transportation services.

Sec. 437. GAO studies and reports on medicare payments.

Sec. 438. MedPAC study on access to outpatient pain management services.

TITLE V—PROVISIONS RELATING TO PARTS A AND B

Subtitle A—Home Health Services

Sec. 501. 2-year additional delay in application of 15 percent reduction on payment limits for home health services.
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Sec. 502. Restoration of full home health market basket update for home

health services for fiscal year 2001.

Sec. 503. Temporary two-month extension of periodic interim payments.

Sec. 504. Use of telehealth in delivery of home health services.

Sec. 505. Study on costs to home health agencies of purchasing nonroutine

medical supplies.

Sec. 506. Treatment of branch offices; GAO study on supervision of home

health care provided in isolated rural areas.

Sec. 507. Clarification of the homebound definition under the medicare home

health benefit.

Subtitle B—Direct Graduate Medical Education

Sec. 511. Increase in floor for direct graduate medical education payments.

Sec. 512. Change in distribution formula for Medicare+Choice-related nursing

and allied health education costs.

Subtitle C—Changes in Medicare Coverage and Appeals Process

Sec. 521. Revisions to medicare appeals process.

Sec. 522. Revisions to medicare coverage process.

Subtitle D—Improving Access to New Technologies

Sec. 531. Reimbursement improvements for new clinical laboratory tests and

durable medical equipment.

Sec. 532. Retention of HCPCS level III codes.

Sec. 533. Recognition of new medical technologies under inpatient hospital

PPS.

Subtitle E—Other Provisions

Sec. 541. Increase in reimbursement for bad debt.

Sec. 542. Treatment of certain physician pathology services under medicare.

Sec. 543. Extension of advisory opinion authority.

Sec. 544. Change in annual MedPAC reporting.

Sec. 545. Development of patient assessment instruments.

Sec. 546. GAO report on impact of the Emergency Medical Treatment and Active Labor Act (EMTALA) on hospital emergency departments.

Sec. 547. Application of Bloodborne Pathogen standard to certain hospitals.

TITLE VI—PROVISIONS RELATING TO PART C

(MEDICARE+CHOICE PROGRAM) AND OTHER MEDICARE MANAGED CARE PROVISIONS

Subtitle A—Medicare+Choice Payment Reforms

Sec. 601. Increase in minimum payment amount.

Sec. 602. Increase in minimum percentage increase.

Sec. 603. 10-year phase-in of risk adjustment.

Sec. 604. Transition to revised Medicare+Choice payment rates.

Sec. 605. Revision of payment rates for ESRD patients enrolled in

Medicare+Choice plans.

Sec. 606. Permitting premium reductions as additional benefits under

Medicare+Choice plans.

Sec. 607. Full implementation of risk adjustment for congestive heart failure

enrollees for 2001.

Sec. 608. Expansion of application of Medicare+Choice new entry bonus.
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Sec. 609. Report on inclusion of certain costs of the Department of Veterans

Affairs and military facility services in calculating

Medicare+Choice payment rates.

Subtitle B—Other Medicare+Choice Reforms

Sec. 611. Payment of additional amounts for new benefits covered during a

contract term.

Sec. 612. Restriction on implementation of significant new regulatory requirements mid-year.

Sec. 613. Timely approval of marketing material that follows model marketing

language.

Sec. 614. Avoiding duplicative regulation.

Sec. 615. Election of uniform local coverage policy for Medicare+Choice plan

covering multiple localities.

Sec. 616. Eliminating health disparities in Medicare+Choice program.

Sec. 617. Medicare+Choice program compatibility with employer or union

group health plans.

Sec. 618. Special medigap enrollment antidiscrimination provision for certain

beneficiaries.

Sec. 619. Restoring effective date of elections and changes of elections of

Medicare+Choice plans.

Sec. 620. Permitting ESRD beneficiaries to enroll in another Medicare+Choice

plan if the plan in which they are enrolled is terminated.

Sec. 621. Providing choice for skilled nursing facility services under the

Medicare+Choice program.

Sec. 622. Providing for accountability of Medicare+Choice plans.

Sec. 623. Civil monetary penalties for contract default by a Medicare+Choice

organization.

Subtitle C—Other Managed Care Reforms

Sec. 631. 1-year extension of social health maintenance organization (SHMO)

demonstration project.

Sec. 632. Revised terms and conditions for extension of medicare community

nursing organization (CNO) demonstration project.

Sec. 633. Extension of medicare municipal health services demonstration

projects.

Sec. 634. Service area expansion for medicare cost contracts during transition

period.

TITLE VII—MEDICAID

Sec. 701. DSH payments.

Sec. 702. New prospective payment system for Federally-qualified health centers and rural health clinics.

Sec. 703. Streamlined approval of continued State-wide section 1115 medicaid

waivers.

Sec. 704. Medicaid county-organized health systems.

Sec. 705. Deadline for issuance of final regulation relating to medicaid upper

payment limits.

Sec. 706. Alaska FMAP.

Sec. 707. Optional coverage of legal immigrants under the medicaid program.

Sec. 708. Additional entities qualified to determine medicaid presumptive eligibility for low-income children.

Sec. 709. Improving welfare-to-work transition.
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TITLE VIII—STATE CHILDREN’S HEALTH INSURANCE PROGRAM

Sec. 801. Special rule for redistribution and availability of unused fiscal year

1998 and 1999 SCHIP allotments.

Sec. 802. Authority to pay medicaid expansion SCHIP costs from title XXI appropriation.

TITLE IX—OTHER PROVISIONS

Subtitle A—PACE Program

Sec. 901. Extension of transition for current waivers.

Sec. 902. Continuing of certain operating arrangements permitted.

Sec. 903. Flexibility in exercising waiver authority.

Subtitle B—Outreach to Eligible Low-Income Medicare Beneficiaries

Sec. 911. Outreach on availability of medicare cost-sharing assistance to eligible

low-income medicare beneficiaries.

Subtitle C—Maternal and Child Health Block Grant

Sec. 921. Increase in authorization of appropriations for the maternal and child

health services block grant.

Subtitle D—Diabetes

Sec. 931. Increase in appropriations for special diabetes programs for type I diabetes and Indians.

Sec. 932. Appropriations for Ricky Ray Hemophilia Relief Fund.

1 TITLE I—MEDICARE

2 BENEFICIARY IMPROVEMENTS

3 Subtitle A—Improved Preventive

4 Benefits

5 SEC. 101. COVERAGE OF BIENNIAL SCREENING PAP SMEAR

6 AND PELVIC EXAMS.

7 (a) IN GENERAL.—

8 (1) BIENNIAL SCREENING PAP SMEAR.—Section

9 1861(nn)(1) (42 U.S.C. 1395x(nn)(1)) is amended

10 by striking ‘‘3 years’’ and inserting ‘‘2 years’’.

11 (2) BIENNIAL SCREENING PELVIC EXAM.—Sec12 tion 1861(nn)(2) (42 U.S.C. 1395x(nn)(2)) is
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1 amended by striking ‘‘3 years’’ and inserting ‘‘2

2 years’’.

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

4 subsection (a) apply to items and services furnished on

5 or after July 1, 2001.

6 SEC. 102. COVERAGE OF SCREENING FOR GLAUCOMA.

7 (a) COVERAGE.—Section 1861(s)(2) (42 U.S.C.

8 1395x(s)(2)) is amended—

9 (1) by striking ‘‘and’’ at the end of subpara10 graph (S);

11 (2) by inserting ‘‘and’’ at the end of subpara12 graph (T); and

13 (3) by adding at the end the following:

14 ‘‘(U) screening for glaucoma (as defined in sub15 section (uu)) for individuals determined to be at

16 high risk for glaucoma, individuals with a family his17 tory of glaucoma and individuals with diabetes;’’.

18 (b) SERVICES DESCRIBED.—Section 1861 (42 U.S.C.

19 1395x) is amended by adding at the end the following new

20 subsection:

21 ‘‘Screening for Glaucoma

22 ‘‘(uu) The term ‘screening for glaucoma’ means a di23 lated eye examination with an intraocular pressure meas24 urement, and a direct ophthalmoscopy or a slit-lamp bio25 microscopic examination for the early detection of glau-
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1 coma which is furnished by or under the direct supervision

2 of an optometrist or ophthalmologist who is legally author3 ized to furnish such services under State law (or the State

4 regulatory mechanism provided by State law) of the State

5 in which the services are furnished, as would otherwise

6 be covered if furnished by a physician or as an incident

7 to a physician’s professional service, if the individual in8 volved has not had such an examination in the preceding

9 year.’’.

10 (c) CONFORMING AMENDMENT.—Section

11 1862(a)(1)(F) (42 U.S.C. 1395y(a)(1)(F)) is amended—

12 (1) by striking ‘‘and,’’; and

13 (2) by adding at the end the following: ‘‘and, in

14 the case of screening for glaucoma, which is per15 formed more frequently than is provided under sec16 tion 1861(uu),’’.

17 (d) EFFECTIVE DATE.—The amendments made by

18 this section shall apply to services furnished on or after

19 January 1, 2002.

20 SEC. 103. COVERAGE OF SCREENING COLONOSCOPY FOR

21 AVERAGE RISK INDIVIDUALS.

22 (a) IN GENERAL.—Section 1861(pp) (42 U.S.C.

23 1395x(pp)) is amended—

24 (1) in paragraph (1)(C), by striking ‘‘In the

25 case of an individual at high risk for colorectal can-
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1 cer, screening colonoscopy’’ and inserting ‘‘Screening

2 colonoscopy’’; and

3 (2) in paragraph (2), by striking ‘‘In paragraph

4 (1)(C), an’’ and inserting ‘‘An’’.

5 (b) FREQUENCY LIMITS FOR SCREENING

6 COLONOSCOPY.—Section 1834(d) (42 U.S.C. 1395m(d))

7 is amended—

8 (1) in paragraph (2)(E)(ii), by inserting before

9 the period at the end the following: ‘‘or, in the case

10 of an individual who is not at high risk for colorectal

11 cancer, if the procedure is performed within the 119

12 months after a previous screening colonoscopy’’;

13 (2) in paragraph (3)—

14 (A) in the heading by striking ‘‘FOR INDI15 VIDUALS AT HIGH RISK FOR COLORECTAL CAN16 CER’’;

17 (B) in subparagraph (A), by striking ‘‘for

18 individuals at high risk for colorectal cancer (as

19 defined in section 1861(pp)(2))’’;

20 (C) in subparagraph (E), by inserting be21 fore the period at the end the following: ‘‘or for

22 other individuals if the procedure is performed

23 within the 119 months after a previous screen24 ing colonoscopy or within 47 months after a

25 previous screening flexible sigmoidoscopy’’.
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section apply to colorectal cancer screening services

3 provided on or after July 1, 2001.

4 SEC. 104. MODERNIZATION OF SCREENING MAMMOGRAPHY

5 BENEFIT.

6 (a) INCLUSION IN PHYSICIAN FEE SCHEDULE.—Sec7 tion 1848(j)(3) (42 U.S.C. 1395w–4(j)(3)) is amended by

8 inserting ‘‘(13),’’ after ‘‘(4),’’.

9 (b) CONFORMING AMENDMENT.—Section 1834(c)

10 (42 U.S.C. 1395m(c)) is amended to read as follows:

11 ‘‘(c) PAYMENT AND STANDARDS FOR SCREENING

12 MAMMOGRAPHY.—

13 ‘‘(1) IN GENERAL.—With respect to expenses

14 incurred for screening mammography (as defined in

15 section 1861(jj)), payment may be made only—

16 ‘‘(A) for screening mammography con17 ducted consistent with the frequency permitted

18 under paragraph (2); and

19 ‘‘(B) if the screening mammography is

20 conducted by a facility that has a certificate (or

21 provisional certificate) issued under section 354

22 of the Public Health Service Act.

23 ‘‘(2) FREQUENCY COVERED.—

24 ‘‘(A) IN GENERAL.—Subject to revision by

25 the Secretary under subparagraph (B)—
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1 ‘‘(i) no payment may be made under

2 this part for screening mammography per3 formed on a woman under 35 years of age;

4 ‘‘(ii) payment may be made under this

5 part for only one screening mammography

6 performed on a woman over 34 years of

7 age, but under 40 years of age; and

8 ‘‘(iii) in the case of a woman over 39

9 years of age, payment may not be made

10 under this part for screening mammog11 raphy performed within 11 months fol12 lowing the month in which a previous

13 screening mammography was performed.

14 ‘‘(B) REVISION OF FREQUENCY.—

15 ‘‘(i) REVIEW.—The Secretary, in con16 sultation with the Director of the National

17 Cancer Institute, shall review periodically

18 the appropriate frequency for performing

19 screening mammography, based on age

20 and such other factors as the Secretary be21 lieves to be pertinent.

22 ‘‘(ii) REVISION OF FREQUENCY.—The

23 Secretary, taking into consideration the re24 view made under clause (i), may revise

25 from time to time the frequency with
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1 which screening mammography may be

2 paid for under this subsection.’’.

3 (c) EFFECTIVE DATE.—The amendments made by

4 subsections (a) and (b) apply with respect to screening

5 mammographies furnished on or after January 1, 2002.

6 (d) PAYMENT FOR NEW TECHNOLOGIES.—

7 (1) TESTS FURNISHED IN 2001.—

8 (A) SCREENING.—For a screening mam9 mography (as defined in section 1861(jj) of the

10 Social Security Act (42 U.S.C. 1395(jj))) fur11 nished during the period beginning on April 1,

12 2001, and ending on December 31, 2001, that

13 uses a new technology, payment for such

14 screening mammography shall be made as fol15 lows:

16 (i) In the case of a technology which

17 directly takes a digital image (without in18 volving film) and subsequently analyzes

19 such resulting image with software to iden20 tify possible problem areas, in an amount

21 equal to 150 percent of the amount of pay22 ment under section 1848 of such Act (42

23 U.S.C. 1395w–4) for a bilateral diagnostic

24 mammography (under HCPCS code

25 76091) for such year.
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1 (ii) In the case of a technology which

2 allows conversion of a standard film mam3 mogram into a digital image and subse4 quently analyzes such resulting image with

5 software to identify possible problem areas,

6 in an amount equal to the limit that would

7 otherwise be applied under section

8 1834(c)(3) of such Act (42 U.S.C.

9 1395m(c)(3)) for 2001, increased by $15.

10 (B) BILATERAL DIAGNOSTIC MAMMOG11 RAPHY.—For a bilateral diagnostic mammog12 raphy (under HCPCS code 76091) furnished

13 during the period beginning on April 1, 2001,

14 and ending on December 31, 2001, that uses a

15 new technology described in subparagraph

16 (A)(i), payment for such mammography shall

17 be the amount of payment provided for under

18 such subparagraph.

19 The Secretary of Health and Human Services may

20 implement the provisions of this paragraph by pro21 gram memorandum or otherwise.

22 (2) CONSIDERATION OF NEW HCPCS CODE FOR

23 NEW TECHNOLOGIES AFTER 2001.—The Secretary

24 shall determine, for such screening mammographies

25 performed after 2001, whether the assignment of a
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1 new HCPCS code is appropriate for screening mam2 mography that uses a new technology. If the Sec3 retary determines that a new code is appropriate for

4 such screening mammography, the Secretary shall

5 provide for such new code for such tests furnished

6 after 2001.

7 (3) NEW TECHNOLOGY DESCRIBED.—For pur8 poses of this subsection, a new technology with re9 spect to a screening mammography is an advance in

10 technology with respect to the test or equipment

11 that results in the following:

12 (A) A significant increase or decrease in

13 the resources used in the test or in the manu14 facture of the equipment.

15 (B) A significant improvement in the per16 formance of the test or equipment.

17 (C) A significant advance in medical tech18 nology that is expected to significantly improve

19 the treatment of medicare beneficiaries.

20 (4) HCPCS CODE DEFINED.—The term

21 ‘‘HCPCS code’’ means an alphanumeric code under

22 the Health Care Financing Administration Common

23 Procedure Coding System (HCPCS).
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1 SEC. 105. COVERAGE OF MEDICAL NUTRITION THERAPY

2 SERVICES FOR BENEFICIARIES WITH DIABE3 TES OR A RENAL DISEASE.

4 (a) COVERAGE.—Section 1861(s)(2) (42 U.S.C.

5 1395x(s)(2)), as amended by section 102(a), is amended—

6 (1) in subparagraph (T), by striking ‘‘and’’ at

7 the end;

8 (2) in subparagraph (U), by inserting ‘‘and’’ at

9 the end; and

10 (3) by adding at the end the following new sub11 paragraph:

12 ‘‘(V) medical nutrition therapy services (as de13 fined in subsection (vv)(1)) in the case of a bene14 ficiary with diabetes or a renal disease who—

15 ‘‘(i) has not received diabetes outpatient

16 self-management training services within a time

17 period determined by the Secretary; and

18 ‘‘(ii) meets such other criteria determined

19 by the Secretary after consideration of protocols

20 established by dietitian or nutrition professional

21 organizations;’’.

22 (b) SERVICES DESCRIBED.—Section 1861 (42 U.S.C.

23 1395x), as amended by section 102(b), is amended by add24 ing at the end the following:
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1 ‘‘Medical Nutrition Therapy Services; Registered

2 Dietitian or Nutrition Professional

3 ‘‘(vv)(1) The term ‘medical nutrition therapy serv4 ices’ means nutritional diagnostic, therapy, and counseling

5 services for the purpose of disease management which are

6 furnished by a registered dietitian or nutrition profes7 sional (as defined in paragraph (2)) pursuant to a referral

8 by a physician (as defined in subsection (r)(1)).

9 ‘‘(2) Subject to paragraph (3), the term ‘registered

10 dietitian or nutrition professional’ means an individual

11 who—

12 ‘‘(A) holds a baccalaureate or higher degree

13 granted by a regionally accredited college or univer14 sity in the United States (or an equivalent foreign

15 degree) with completion of the academic require16 ments of a program in nutrition or dietetics, as ac17 credited by an appropriate national accreditation or18 ganization recognized by the Secretary for this pur19 pose;

20 ‘‘(B) has completed at least 900 hours of super21 vised dietetics practice under the supervision of a

22 registered dietitian or nutrition professional; and

23 ‘‘(C)(i) is licensed or certified as a dietitian or

24 nutrition professional by the State in which the serv25 ices are performed; or
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1 ‘‘(ii) in the case of an individual in a State that

2 does not provide for such licensure or certification,

3 meets such other criteria as the Secretary estab4 lishes.

5 ‘‘(3) Subparagraphs (A) and (B) of paragraph (2)

6 shall not apply in the case of an individual who, as of the

7 date of the enactment of this subsection, is licensed or cer8 tified as a dietitian or nutrition professional by the State

9 in which medical nutrition therapy services are per10 formed.’’.

11 (c) PAYMENT.—Section 1833(a)(1) (42 U.S.C.

12 1395l(a)(1)) is amended—

13 (1) by striking ‘‘and’’ before ‘‘(S)’’; and

14 (2) by inserting before the semicolon at the end

15 the following: ‘‘, and (T) with respect to medical nu16 trition therapy services (as defined in section

17 1861(vv)), the amount paid shall be 80 percent of

18 the lesser of the actual charge for the services or 85

19 percent of the amount determined under the fee

20 schedule established under section 1848(b) for the

21 same services if furnished by a physician’’.

22 (d) APPLICATION OF LIMITS ON BILLING.—Section

23 1842(b)(18)(C) (42 U.S.C. 1395u(b)(18)(C)) is amended

24 by adding at the end the following new clause:
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1 ‘‘(vi) A registered dietitian or nutrition profes2 sional.’’.

3 (e) EFFECTIVE DATE.—The amendments made by

4 this section apply to services furnished on or after Janu5 ary 1, 2002.

6 (f) STUDY.—Not later than July 1, 2003, the Sec7 retary of Health and Human Services shall submit to Con8 gress a report that contains recommendations with respect

9 to the expansion to other medicare beneficiary populations

10 of the medical nutrition therapy services benefit (furnished

11 under the amendments made by this section).

12 SEC. 106. EXTENSION OF PART A COVERAGE FOR WORKERS

13 WITH DISABILITIES.

14 (a) CONTINUATION OF COVERAGE.—

15 (1) IN GENERAL.—Section 226 (42 U.S.C. 426)

16 is amended—

17 (A) in the third sentence of subsection (b),

18 by inserting ‘‘, except as provided in subsection

19 (j)’’ after ‘‘but not in excess of 24 such

20 months’’; and

21 (B) by adding at the end the following:

22 ‘‘(j) The 24-month limitation on deemed entitlement

23 under the third sentence of subsection (b) shall not

24 apply—
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1 ‘‘(1) for months occurring during the 10-year

2 period beginning with the first month that begins

3 after the date of enactment of this subsection; and

4 ‘‘(2) for subsequent months, in the case of an

5 individual who was entitled to benefits under sub6 section (b) as of the last month of such 10-year pe7 riod and would continue (but for such 24-month lim8 itation) to be so entitled.’’.

9 (2) CONFORMING AMENDMENT.—Section

10 1818A(a)(2)(C) (42 U.S.C. 1395i–2a(a)(2)(C)) is

11 amended—

12 (A) by striking ‘‘solely’’; and

13 (B) by inserting ‘‘or the expiration of the

14 last month of the 10-year period described in

15 section 226(j)’’ before the semicolon.

16 (b) GAO REPORT.—Not later than 8 years after the

17 date of the enactment of this section, the Comptroller

18 General of the United States shall submit a report to the

19 Congress that—

20 (1) examines the effectiveness and cost of sub21 section (j) of section 226 (42 U.S.C. 426); and

22 (2) recommends whether such subsection (j)

23 should continue to be applied beyond the 10-year pe24 riod described in the subsection.
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1 (c) EFFECTIVE DATE.—The amendments made by

2 subsection (a) apply to months beginning with the first

3 month that begins after the date of enactment of this sec4 tion.

5 (d) TREATMENT OF CERTAIN INDIVIDUALS.—An in6 dividual enrolled under section 1818A (42 U.S.C.

7 1395i2a) shall be treated with respect to premium pay8 ment obligations under such section as though the indi9 vidual had continued to be entitled to benefits under sec10 tion 226(b) for—

11 (1) months described in section 226(j)(1) (42

12 U.S.C. 426(j)(1)) (as added by subsection (a)); and

13 (2) subsequent months, in the case of an indi14 vidual who was so enrolled as of the last month de15 scribed in section 226(j)(2) (42 U.S.C. 426(j)(2))

16 (as so added).

17 (e) REPEAL OF PARTIAL EXTENSION PROVISION AND

18 STUDY REQUIREMENT.—Section 202 of Public Law 106–

19 170 is repealed.

20 SEC. 107. MEDICAID RECOGNITION FOR SERVICES OF PHY21 SICIAN ASSISTANTS.

22 (a) IN GENERAL.—Section 1905(a) (42 U.S.C.

23 1396d(a)) is amended—
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1 (1) by redesignating paragraphs (22) through

2 (27) as paragraphs (23) through (28), respectively;

3 and

4 (2) by inserting after paragraph (21) the fol5 lowing new paragraph:

6 ‘‘(22) services furnished by a physician assist7 ant (as defined in section 1861(aa)(5)) which the as8 sistant is legally authorized to perform under State

9 law and with the supervision of a physician;’’.

10 (b) CONFORMING AMENDMENTS.—(1) Section

11 1902(a)(10)(C)(iv) (42 U.S.C. 1396a(a)(10)(C)(iv)) is

12 amended by striking ‘‘(24)’’ and inserting ‘‘(25)’’.

13 (2) Section 1929(e)(2)(A) (42 U.S.C.

14 1396t(e)(2)(A)) is amended by striking ‘‘1905(a)(23)’’

15 and inserting ‘‘1905(a)(24)’’.

16 (3) Section 1917(c)(1)(C)(ii) (42 U.S.C.

17 1396(p)(c)(1)(C)(ii)) is amended by striking ‘‘(22), or

18 (24)’’ and inserting ‘‘(23), or (25)’’.

19 Subtitle B—Other Beneficiary

20 Improvements

21 SEC. 111. ACCELERATION OF REDUCTION OF BENEFICIARY

22 COPAYMENT FOR HOSPITAL OUTPATIENT DE23 PARTMENT SERVICES.

24 (a) REDUCING THE UPPER LIMIT ON BENEFICIARY

25 COPAYMENT.—
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1 (1) IN GENERAL.—Section 1833(t)(8)(C) (42

2 U.S.C. 1395l(t)(8)(C)) is amended to read as fol3 lows:

4 ‘‘(C) LIMITATION ON COPAYMENT

5 AMOUNT.—

6 ‘‘(i) TO INPATIENT HOSPITAL DE7 DUCTIBLE AMOUNT.—In no case shall the

8 copayment amount for a procedure per9 formed in a year exceed the amount of the

10 inpatient hospital deductible established

11 under section 1813(b) for that year.

12 ‘‘(ii) TO SPECIFIED PERCENTAGE.—

13 The Secretary shall reduce the national

14 unadjusted copayment amount for a cov15 ered OPD service (or group of such serv16 ices) furnished in a year in a manner so

17 that the effective copayment rate (deter18 mined on a national unadjusted basis) for

19 that service in the year does not exceed the

20 following percentage:

21 ‘‘(I) For procedures performed in

22 2001, 60 percent.

23 ‘‘(II) For procedures performed

24 in 2002 or 2003, 55 percent.
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1 ‘‘(III) For procedures performed

2 in 2004, 50 percent.

3 ‘‘(IV) For procedures performed

4 in 2005, 45 percent.

5 ‘‘(V) For procedures performed

6 in 2006 and thereafter, 40 percent.’’.

7 (2) EFFECTIVE DATE.—The amendment made

8 by paragraph (1) applies with respect to services

9 furnished on or after January 1, 2001.

10 (b) CONSTRUCTION REGARDING LIMITING IN11 CREASES IN COST-SHARING.—Nothing in this Act or the

12 Social Security Act shall be construed as preventing a hos13 pital from waiving the amount of any coinsurance for out14 patient hospital services under the medicare program

15 under title XVIII of the Social Security Act that may have

16 been increased as a result of the implementation of the

17 prospective payment system under section 1833(t) of the

18 Social Security Act (42 U.S.C. 1395l(t)).

19 (c) GAO STUDY OF REDUCTION IN MEDIGAP PRE20 MIUM LEVELS RESULTING FROM REDUCTIONS IN COIN21 SURANCE.—The Comptroller General of the United States

22 shall work, in concert with the National Association of In23 surance Commissioners, to evaluate the extent to which

24 the premium levels for medicare supplemental policies re25 flect the reductions in coinsurance resulting from the
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1 amendment made by subsection (a). Not later than April

2 1, 2004, the Comptroller General shall submit to Congress

3 a report on such evaluation and the extent to which the

4 reductions in beneficiary coinsurance effected by such

5 amendment have resulted in actual savings to medicare

6 beneficiaries.

7 SEC. 112. PRESERVATION OF COVERAGE OF DRUGS AND

8 BIOLOGICALS UNDER PART B OF THE MEDI9 CARE PROGRAM.

10 (a) IN GENERAL.—Section 1861(s)(2) (42 U.S.C.

11 1395x(s)(2)) is amended, in each of subparagraphs (A)

12 and (B), by striking ‘‘(including drugs and biologicals

13 which cannot, as determined in accordance with regula14 tions, be self-administered)’’ and inserting ‘‘(including

15 drugs and biologicals which are not usually self-adminis16 tered by the patient)’’.

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

18 subsection (a) applies to drugs and biologicals adminis19 tered on or after the date of the enactment of this Act.

20 SEC. 113. ELIMINATION OF TIME LIMITATION ON MEDI21 CARE BENEFITS FOR IMMUNOSUPPRESSIVE

22 DRUGS.

23 (a) IN GENERAL.—Section 1861(s)(2)(J) (42 U.S.C.

24 1395x(s)(2)(J)) is amended by striking ‘‘, but only’’ and

25 all that follows up to the semicolon at the end.
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1 (b) CONFORMING AMENDMENTS.—

2 (1) EXTENDED COVERAGE.—Section 1832 (42

3 U.S.C. 1395k) is amended—

4 (A) by striking subsection (b); and

5 (B) by redesignating subsection (c) as sub6 section (b).

7 (2) PASS-THROUGH; REPORT.—Section 227 of

8 BBRA is amended by striking subsection (d).

9 (c) EFFECTIVE DATE.—The amendment made by

10 subsection (a) shall apply to drugs furnished on or after

11 the date of the enactment of this Act.

12 SEC. 114. IMPOSITION OF BILLING LIMITS ON DRUGS.

13 (a) IN GENERAL.—Section 1842(o) (42 U.S.C.

14 1395u(o)) is amended by adding at the end the following

15 new paragraph:

16 ‘‘(3)(A) Payment for a charge for any drug or biologi17 cal for which payment may be made under this part may

18 be made under this part only on an assignment-related

19 basis.

20 ‘‘(B) The provisions of subsection (b)(18)(B) shall

21 apply to charges for such drugs or biologicals in the same

22 manner as they apply to services furnished by a practi23 tioner described in subsection (b)(18)(C).’’.
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1 (b) EFFECTIVE DATE.—The amendment made by

2 subsection (a) shall apply to items furnished on or after

3 January 1, 2001.

4 SEC. 115. IMPROVING AVAILABILITY OF QMB/SLMB APPLI5 CATION FORMS.

6 (a) THROUGH LOCAL SOCIAL SECURITY OFFICES.—

7 (1) IN GENERAL.—Section 1804 (42 U.S.C.

8 1395b–2) is amended by adding at the end the fol9 lowing new subsection:

10 ‘‘(d) AVAILABILITY OF APPLICATION FORMS FOR

11 MEDICAL ASSISTANCE FOR MEDICARE COST-SHARING.—

12 The Secretary shall make available to the Commissioner

13 of Social Security appropriate forms for applying for med14 ical assistance for medicare cost-sharing under a State

15 plan under title XIX. Such Commissioner, through local

16 offices of the Social Security Administration shall—

17 ‘‘(1) notify applicants and beneficiaries who

18 present at a local office orally of the availability of

19 such forms and make such forms available to such

20 individuals upon request; and

21 ‘‘(2) provide assistance to such individuals in

22 completing such forms and, upon request, in submit23 ting such forms to the appropriate State agency.’’.

24 (2) CONFORMING AMENDMENT.—Section

25 1902(a)(8) (42 U.S.C. 1396a(a)(8)) is amended by
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1 inserting before the semicolon at the end the fol2 lowing: ‘‘and provide application forms for medical

3 assistance for medicare cost-sharing under the plan

4 to the Secretary in order to make them available

5 through Federal offices under section 1804(d) within

6 the State’’.

7 (b) STREAMLINING APPLICATION PROCESS.—

8 (1) REQUIREMENT.—Section 1902(a)(8) (42

9 U.S.C. 1396a(a)(8)) is amended by striking ‘‘, and

10 that’’ and inserting ‘‘permit individuals to apply for

11 and obtain medical assistance for medicare cost12 sharing using the simplified uniform application

13 form developed under section 1905(p)(5), make

14 available such forms to such individuals, permit such

15 individuals to apply for such assistance by mail

16 (and, at the State option, by telephone or other elec17 tronic means) and not require them to apply in per18 son, and provide that’’.

19 (2) SIMPLIFIED APPLICATION FORM.—Section

20 1905(p) (42 U.S.C. 1396d(p)) is amended by adding

21 at the end the following new paragraph:

22 ‘‘(5)(A) The Secretary shall develop a simplified ap23 plication form for use by individuals (including both quali24 fied medicare beneficiaries and specified low-income medi25 care beneficiaries) in applying for medical assistance for
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1 medicare cost-sharing under this title. Such form shall be

2 easily readable by applicants and uniform nationally.

3 ‘‘(B) In developing such form, the Secretary shall

4 consult with beneficiary groups and the States.

5 ‘‘(C) The Secretary shall make such application

6 forms available—

7 ‘‘(i) to the Commissioner of Social Security for

8 distribution through local social security offices;

9 ‘‘(ii) at such other sites at the Secretary deter10 mines appropriate; and

11 ‘‘(iii) to persons upon request.’’.

12 (c) EFFECTIVE DATES.—

13 (1) The amendments made by subsection (a)

14 take effect on January 1, 2004.

15 (2) EFFECTIVE DATE.—The amendments made

16 by subsection (b) take effect 1 year after the date

17 of the enactment of this Act, regardless of whether

18 regulations have been promulgated to carry out such

19 amendments by such date. Secretary of Health and

20 Human Services shall develop the uniform applica21 tion form under the amendment made by subsection

22 (b)(2) by not later than 9 months after the date of

23 the enactment of this Act.
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1 Subtitle C—Demonstration

2 Projects and Studies

3 SEC. 121. DEMONSTRATION PROJECT FOR DISEASE MAN4 AGEMENT FOR SEVERELY CHRONICALLY ILL

5 MEDICARE BENEFICIARIES.

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

7 Human Services shall conduct a demonstration project

8 under this section (in this section referred to as the

9 ‘‘project’’) to demonstrate the impact on costs and health

10 outcomes of applying disease management to medicare

11 beneficiaries with diagnosed, advanced-stage congestive

12 heart failure, diabetes, or coronary heart disease. In no

13 case may the number of participants in the project exceed

14 30,000 at any time.

15 (b) VOLUNTARY PARTICIPATION.—

16 (1) ELIGIBILITY.—Medicare beneficiaries are

17 eligible to participate in the project only if—

18 (A) they meet specific medical criteria

19 demonstrating the appropriate diagnosis and

20 the advanced nature of their disease;

21 (B) their physicians approve of participa22 tion in the project; and

23 (C) they are not enrolled in a

24 Medicare+Choice plan.
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1 (2) BENEFITS.—A beneficiary who is enrolled

2 in the project shall be eligible—

3 (A) for disease management services re4 lated to their chronic health condition; and

5 (B) for payment for all costs for prescrip6 tion drugs without regard to whether or not

7 they relate to the chronic health condition, ex8 cept that the project may provide for modest

9 cost-sharing with respect to prescription drug

10 coverage.

11 (c) CONTRACTS WITH DISEASE MANAGEMENT ORGA12 NIZATIONS.—

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

14 Human Services shall carry out the project through

15 contracts with up to three disease management orga16 nizations. The Secretary shall not enter into such a

17 contract with an organization unless the organiza18 tion demonstrates that it can produce improved

19 health outcomes and reduce aggregate medicare ex20 penditures consistent with paragraph (2).

21 (2) CONTRACT PROVISIONS.—Under such

22 contracts—

23 (A) such an organization shall be required

24 to provide for prescription drug coverage de25 scribed in subsection (b)(2)(B);
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1 (B) such an organization shall be paid a

2 fee negotiated and established by the Secretary

3 in a manner so that (taking into account sav4 ings in expenditures under parts A and B of

5 the medicare program under title XVIII of the

6 Social Security Act) there will be a net reduc7 tion in expenditures under the medicare pro8 gram as a result of the project; and

9 (C) such an organization shall guarantee,

10 through an appropriate arrangement with a re11 insurance company or otherwise, the net reduc12 tion in expenditures described in subparagraph

13 (B).

14 (3) PAYMENTS.—Payments to such organiza15 tions shall be made in appropriate proportion from

16 the Trust Funds established under title XVIII of the

17 Social Security Act.

18 (d) APPLICATION OF MEDIGAP PROTECTIONS TO

19 DEMONSTRATION PROJECT ENROLLEES.—(1) Subject to

20 paragraph (2), the provisions of section 1882(s)(3) (other

21 than clauses (i) through (iv) of subparagraph (B)) and

22 1882(s)(4) of the Social Security Act shall apply to enroll23 ment (and termination of enrollment) in the demonstra24 tion project under this section, in the same manner as they

25 apply to enrollment (and termination of enrollment) with
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1 a Medicare+Choice organization in a Medicare+Choice

2 plan.

3 (2) In applying paragraph (1)—

4 (A) any reference in clause (v) or (vi) of section

5 1882(s)(3)(B) of such Act to 12 months is deemed

6 a reference to the period of the demonstration

7 project; and

8 (B) the notification required under section

9 1882(s)(3)(D) of such Act shall be provided in a

10 manner specified by the Secretary of Health and

11 Human Services.

12 (e) DURATION.—The project shall last for not longer

13 than 3 years.

14 (f) WAIVER.—The Secretary of Health and Human

15 Services shall waive such provisions of title XVIII of the

16 Social Security Act as may be necessary to provide for

17 payment for services under the project in accordance with

18 subsection (c)(3).

19 (g) REPORT.—The Secretary of Health and Human

20 Services shall submit to Congress an interim report on the

21 project not later than 2 years after the date it is first im22 plemented and a final report on the project not later than

23 6 months after the date of its completion. Such reports

24 shall include information on the impact of the project on
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1 costs and health outcomes and recommendations on the

2 cost-effectiveness of extending or expanding the project.

3 SEC. 122. CANCER PREVENTION AND TREATMENT DEM4 ONSTRATION FOR ETHNIC AND RACIAL MI5 NORITIES.

6 (a) DEMONSTRATION.—

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

8 Human Services (in this section referred to as the

9 ‘‘Secretary’’) shall conduct demonstration projects

10 (in this section referred to as ‘‘demonstration

11 projects’’) for the purpose of developing models and

12 evaluating methods that—

13 (A) improve the quality of items and serv14 ices provided to target individuals in order to

15 facilitate reduced disparities in early detection

16 and treatment of cancer;

17 (B) improve clinical outcomes, satisfaction,

18 quality of life, and appropriate use of medicare19 covered services and referral patterns among

20 those target individuals with cancer;

21 (C) eliminate disparities in the rate of pre22 ventive cancer screening measures, such as pap

23 smears and prostate cancer screenings, among

24 target individuals; and
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1 (D) promote collaboration with community2 based organizations to ensure cultural com3 petency of health care professionals and lin4 guistic access for persons with limited English

5 proficiency.

6 (2) TARGET INDIVIDUAL DEFINED.—In this

7 section, the term ‘‘target individual’’ means an indi8 vidual of a racial and ethnic minority group, as de9 fined by section 1707 of the Public Health Service

10 Act, who is entitled to benefits under part A, and

11 enrolled under part B, of title XVIII of the Social

12 Security Act.

13 (b) PROGRAM DESIGN.—

14 (1) INITIAL DESIGN.—Not later than 1 year

15 after the date of the enactment of this Act, the Sec16 retary shall evaluate best practices in the private

17 sector, community programs, and academic research

18 of methods that reduce disparities among individuals

19 of racial and ethnic minority groups in the preven20 tion and treatment of cancer and shall design the

21 demonstration projects based on such evaluation.

22 (2) NUMBER AND PROJECT AREAS.—Not later

23 than 2 years after the date of the enactment of this

24 Act, the Secretary shall implement at least 9 dem25 onstration projects, including the following:
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1 (A) 2 projects for each of the 4 major ra2 cial and ethnic minority groups (American Indi3 ans (including Alaska Natives, Eskimos, and

4 Aleuts); Asian Americans and Pacific Islanders;

5 Blacks; and Hispanics. The 2 projects must

6 target different ethnic subpopulations.

7 (B) 1 project within the Pacific Islands.

8 (C) At least 1 project each in a rural area

9 and inner-city area.

10 (3) EXPANSION OF PROJECTS; IMPLEMENTA11 TION OF DEMONSTRATION PROJECT RESULTS.—If

12 the initial report under subsection (c) contains an

13 evaluation that demonstration projects—

14 (A) reduce expenditures under the medi15 care program under title XVIII of the Social

16 Security Act; or

17 (B) do not increase expenditures under the

18 medicare program and reduce racial and ethnic

19 health disparities in the quality of health care

20 services provided to target individuals and in21 crease satisfaction of beneficiaries and health

22 care providers;

23 the Secretary shall continue the existing demonstra24 tion projects and may expand the number of dem25 onstration projects.
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1 (c) REPORT TO CONGRESS.—

2 (1) IN GENERAL.—Not later than 2 years after

3 the date the Secretary implements the initial dem4 onstration projects, and biannually thereafter, the

5 Secretary shall submit to Congress a report regard6 ing the demonstration projects.

7 (2) CONTENTS OF REPORT.—Each report under

8 paragraph (1) shall include the following:

9 (A) A description of the demonstration

10 projects.

11 (B) An evaluation of—

12 (i) the cost-effectiveness of the dem13 onstration projects;

14 (ii) the quality of the health care serv15 ices provided to target individuals under

16 the demonstration projects; and

17 (iii) beneficiary and health care pro18 vider satisfaction under the demonstration

19 projects.

20 (C) Any other information regarding the

21 demonstration projects that the Secretary de22 termines to be appropriate.

23 (d) WAIVER AUTHORITY.—The Secretary shall waive

24 compliance with the requirements of title XVIII of the So25 cial Security Act to such extent and for such period as
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1 the Secretary determines is necessary to conduct dem2 onstration projects.

3 (e) FUNDING.—

4 (1) DEMONSTRATION PROJECTS.—

5 (A) STATE PROJECTS.—Except as provided

6 in subparagraph (B), the Secretary shall pro7 vide for the transfer from the Federal Hospital

8 Insurance Trust Fund and the Federal Supple9 mentary Insurance Trust Fund under title

10 XVIII of the Social Security Act, in such pro11 portions as the Secretary determines to be ap12 propriate, of such funds as are necessary for

13 the costs of carrying out the demonstration

14 projects.

15 (B) TERRITORY PROJECTS.—In the case of

16 a demonstration project described in subsection

17 (b)(2)(B), amounts shall be available only as

18 provided in any Federal law making appropria19 tions for the territories.

20 (2) LIMITATION.—In conducting demonstration

21 projects, the Secretary shall ensure that the aggre22 gate payments made by the Secretary do not exceed

23 the sum of the amount which the Secretary would

24 have paid under the program for the prevention and
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1 treatment of cancer if the demonstration projects

2 were not implemented, plus $25,000,000.

3 SEC. 123. STUDY ON MEDICARE COVERAGE OF ROUTINE

4 THYROID SCREENING.

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

6 Services shall request the National Academy of Sciences,

7 and as appropriate in conjunction with the United States

8 Preventive Services Task Force, to conduct a study on the

9 addition of coverage of routine thyroid screening using a

10 thyroid stimulating hormone test as a preventive benefit

11 provided to medicare beneficiaries under title XVIII of the

12 Social Security Act for some or all medicare beneficiaries.

13 In conducting the study, the Academy shall consider the

14 short-term and long-term benefits, and costs to the medi15 care program, of such addition.

16 (b) REPORT.—Not later than 2 years after the date

17 of the enactment of this Act, the Secretary of Health and

18 Human Services shall submit a report on the findings of

19 the study conducted under subsection (a) to the Com20 mittee on Ways and Means and the Committee on Com21 merce of the House of Representatives and the Committee

22 on Finance of the Senate.

23 SEC. 124. MEDPAC STUDY ON CONSUMER COALITIONS.

24 (a) STUDY.—The Medicare Payment Advisory Com25 mission shall conduct a study that examines the use of
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1 consumer coalitions in the marketing of Medicare+Choice

2 plans under the medicare program under title XVIII of

3 the Social Security Act. The study shall examine—

4 (1) the potential for increased efficiency in the

5 medicare program through greater beneficiary

6 knowledge of their health care options, decreased

7 marketing costs of Medicare+Choice organizations,

8 and creation of a group market;

9 (2) the implications of Medicare+Choice plans

10 and medicare supplemental policies (under section

11 1882 of the Social Security Act (42 U.S.C. 1395ss))

12 offering medicare beneficiaries in the same geo13 graphic location different benefits and premiums

14 based on their affiliation with a consumer coalition;

15 (3) how coalitions should be governed, how they

16 should be accountable to the Secretary of Health

17 and Human Services, and how potential conflicts of

18 interest in the activities of consumer coalitions

19 should be avoided; and

20 (4) how such coalitions should be funded.

21 (b) REPORT.—Not later than 1 year after the date

22 of the enactment of this Act, the Commission shall submit

23 to Congress a report on the study conducted under sub24 section (a). The report shall include a recommendation on

25 whether and how a demonstration project might be con-
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1 ducted for the operation of consumer coalitions under the

2 medicare program.

3 (c) CONSUMER COALITION DEFINED.—For purposes

4 of this section, the term ‘‘consumer coalition’’ means a

5 nonprofit, community-based group of organizations that—

6 (1) provides information to medicare bene7 ficiaries about their health care options under the

8 medicare program; and

9 (2) negotiates benefits and premiums for medi10 care beneficiaries who are members or otherwise af11 filiated with the group of organizations with

12 Medicare+Choice organizations offering

13 Medicare+Choice plans, issuers of medicare supple14 mental policies, issuers of long-term care coverage,

15 and pharmacy benefit managers.

16 SEC. 125. STUDY ON LIMITATION ON STATE PAYMENT FOR

17 MEDICARE COST-SHARING AFFECTING AC18 CESS TO SERVICES FOR QUALIFIED MEDI19 CARE BENEFICIARIES.

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

21 Human Services shall conduct a study to determine if ac22 cess to certain services (including mental health services)

23 for qualified medicare beneficiaries has been affected by

24 limitations on a State’s payment for medicare cost-sharing

25 for such beneficiaries under section 1902(n) of the Social
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1 Security Act (42 U.S.C. 1396a(n)). As part of such study,

2 the Secretary shall analyze the effect of such payment lim3 itation on providers who serve a disproportionate share of

4 such beneficiaries.

5 (b) REPORT.—Not later than 1 year after the date

6 of the enactment of this Act, the Secretary shall submit

7 to Congress a report on the study under subsection (a).

8 The report shall include recommendations regarding any

9 changes that should be made to the State payment limits

10 under section 1902(n) for qualified medicare beneficiaries

11 to ensure appropriate access to services.

12 SEC. 126. WAIVER OF 24-MONTH WAITING PERIOD FOR

13 MEDICARE COVERAGE OF INDIVIDUALS DIS14 ABLED WITH AMYOTROPHIC LATERAL SCLE15 ROSIS (ALS).

16 (a) IN GENERAL.—Section 226 (42 U.S.C. 426) is

17 amended—

18 (1) by redesignating subsection (h) as sub19 section (j) and by moving such subsection to the end

20 of the section, and

21 (2) by inserting after subsection (g) the fol22 lowing new subsection:

23 ‘‘(h) For purposes of applying this section in the case

24 of an individual medically determined to have amyotrophic

25 lateral sclerosis (ALS), the following special rules apply:
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1 ‘‘(1) Subsection (b) shall be applied as if there

2 were no requirement for any entitlement to benefits,

3 or status, for a period longer than 1 month.

4 ‘‘(2) The entitlement under such subsection

5 shall begin with the first month (rather than twenty6 fifth month) of entitlement or status.

7 ‘‘(3) Subsection (f) shall not be applied.’’.

8 (b) CONFORMING AMENDMENT.—Section 1837 (42

9 U.S.C. 1395p) is amended by adding at the end the fol10 lowing new subsection:

11 ‘‘(j) In applying this section in the case of an indi12 vidual who is entitled to benefits under part A pursuant

13 to the operation of section 226(h), the following special

14 rules apply:

15 ‘‘(1) The initial enrollment period under sub16 section (d) shall begin on the first day of the first

17 month in which the individual satisfies the require18 ment of section 1836(1).

19 ‘‘(2) In applying subsection (g)(1), the initial

20 enrollment period shall begin on the first day of the

21 first month of entitlement to disability insurance

22 benefits referred to in such subsection.’’.

23 (c) EFFECTIVE DATE.—The amendments made by

24 this section apply to benefits for months beginning after

25 the date of the enactment of this Act.
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1 SEC. 127. STUDIES ON PREVENTIVE INTERVENTIONS IN

2 PRIMARY CARE FOR OLDER AMERICANS.

3 (a) STUDIES.—The Secretary of Health and Human

4 Services, acting through the United States Preventive

5 Services Task Force, shall conduct a series of studies de6 signed to identify preventive interventions that can be de7 livered in the primary care setting and that are most valu8 able to older Americans.

9 (b) MISSION STATEMENT.—The mission statement of

10 the United States Preventive Services Task Force is

11 amended to include the evaluation of services that are of

12 particular relevance to older Americans.

13 (c) REPORT.—Not later than 1 year after the date

14 of the enactment of this Act, and annually thereafter, the

15 Secretary of Health and Human Services shall submit to

16 Congress a report on the conclusions of the studies con17 ducted under subsection (a), together with recommenda18 tions for such legislation and administrative actions as the

19 Secretary considers appropriate.

20 SEC. 128. MEDPAC STUDY AND REPORT ON MEDICARE COV21 ERAGE OF CARDIAC AND PULMONARY REHA22 BILITATION THERAPY SERVICES.

23 (a) STUDY.—

24 (1) IN GENERAL.—The Medicare Payment Ad25 visory Commission shall conduct a study on coverage

26 of cardiac and pulmonary rehabilitation therapy
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1 services under the medicare program under title

2 XVIII of the Social Security Act.

3 (2) FOCUS.—In conducting the study under

4 paragraph (1), the Commission shall focus on the

5 appropriate—

6 (A) qualifying diagnoses required for cov7 erage of cardiac and pulmonary rehabilitation

8 therapy services;

9 (B) level of physician direct involvement

10 and supervision in furnishing such services; and

11 (C) level of reimbursement for such serv12 ices.

13 (b) REPORT.—Not later than 18 months after the

14 date of the enactment of this Act, the Commission shall

15 submit to Congress a report on the study conducted under

16 subsection (a) together with such recommendations for

17 legislation and administrative action as the Commission

18 determines appropriate.
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1 TITLE II—RURAL HEALTH CARE

2 IMPROVEMENTS

3 Subtitle A—Critical Access

4 Hospital Provisions

5 SEC. 201. CLARIFICATION OF NO BENEFICIARY COST-SHAR6 ING FOR CLINICAL DIAGNOSTIC LABORA7 TORY TESTS FURNISHED BY CRITICAL AC8 CESS HOSPITALS.

9 (a) PAYMENT CLARIFICATION.—Section 1834(g) (42

10 U.S.C. 1395m(g)) is amended by adding at the end the

11 following new paragraph:

12 ‘‘(4) NO BENEFICIARY COST-SHARING FOR

13 CLINICAL DIAGNOSTIC LABORATORY SERVICES.—No

14 coinsurance, deductible, copayment, or other cost15 sharing otherwise applicable under this part shall

16 apply with respect to clinical diagnostic laboratory

17 services furnished as an outpatient critical access

18 hospital service. Nothing in this title shall be con19 strued as providing for payment for clinical diag20 nostic laboratory services furnished as part of out21 patient critical access hospital services, other than

22 on the basis described in this subsection.’’.

23 (b) TECHNICAL AND CONFORMING AMENDMENTS.—

24 (1) Paragraphs (1)(D)(i) and (2)(D)(i) of sec25 tion 1833(a) (42 U.S.C. 1395l(a)) are each amended
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1 by striking ‘‘or which are furnished on an outpatient

2 basis by a critical access hospital’’.

3 (2) Section 403(d)(2) of BBRA (113 Stat.

4 1501A–371) is amended by striking ‘‘The amend5 ment made by subsection (a) shall apply’’ and in6 serting ‘‘Paragraphs (1) through (3) of section

7 1834(g) of the Social Security Act (as amended by

8 paragraph (1)) apply’’.

9 (c) EFFECTIVE DATES.—The amendment made—

10 (1) by subsection (a) applies to services fur11 nished on or after the date of the enactment of

12 BBRA;

13 (2) by subsection (b)(1) applies as if included

14 in the enactment of section 403(e)(1) of BBRA (113

15 Stat. 1501A–371); and

16 (3) by subsection (b)(2) applies as if included

17 in the enactment of section 403(d)(2) of BBRA

18 (113 Stat. 1501A–371).

19 SEC. 202. ASSISTANCE WITH FEE SCHEDULE PAYMENT FOR

20 PROFESSIONAL SERVICES UNDER ALL-INCLU21 SIVE RATE.

22 (a) IN GENERAL.—Section 1834(g)(2)(B) (42 U.S.C.

23 1395m(g)(2)(B)) is amended by inserting ‘‘115 percent

24 of’’ before ‘‘such amounts’’.
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1 (b) EFFECTIVE DATE.—The amendment made by

2 subsection (a) applies with respect to items and services

3 furnished on or after April 1, 2001.

4 SEC. 203. EXEMPTION OF CRITICAL ACCESS HOSPITAL

5 SWING BEDS FROM SNF PPS.

6 (a) IN GENERAL.—Section 1888(e)(7) (42 U.S.C.

7 1395yy(e)(7)) is amended—

8 (1) in the heading, by striking ‘‘TRANSITION

9 FOR’’ and inserting ‘‘TREATMENT OF’’;

10 (2) in subparagraph (A), by striking ‘‘IN GEN11 ERAL.—The’’ and inserting ‘‘TRANSITION.—Subject

12 to subparagraph (C), the’’;

13 (3) in subparagraph (A), by inserting ‘‘(other

14 than critical access hospitals)’’ after ‘‘facilities de15 scribed in subparagraph (B)’’;

16 (4) in subparagraph (B), by striking ‘‘, for

17 which payment’’ and all that follows before the pe18 riod; and

19 (5) by adding at the end the following new sub20 paragraph:

21 ‘‘(C) EXEMPTION FROM PPS OF SWING22 BED SERVICES FURNISHED IN CRITICAL ACCESS

23 HOSPITALS.—The prospective payment system

24 established under this subsection shall not

25 apply to services furnished by a critical access
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1 hospital pursuant to an agreement under sec2 tion 1883.’’.

3 (b) PAYMENT ON A REASONABLE COST BASIS FOR

4 SWING BED SERVICES FURNISHED BY CRITICAL ACCESS

5 HOSPITALS.—Section 1883(a) (42 U.S.C. 1395tt(a)) is

6 amended—

7 (1) in paragraph (2)(A), by inserting ‘‘(other

8 than a critical access hospital)’’ after ‘‘any hospital’’;

9 and

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

11 paragraph:

12 ‘‘(3) Notwithstanding any other provision of this title,

13 a critical access hospital shall be paid for covered skilled

14 nursing facility services furnished under an agreement en15 tered into under this section on the basis of the reasonable

16 costs of such services (as determined under section

17 1861(v)).’’.

18 (c) EFFECTIVE DATE.—The amendments made by

19 this section shall apply to cost reporting periods beginning

20 on or after the date of the enactment of this Act.

21 SEC. 204. PAYMENT IN CRITICAL ACCESS HOSPITALS FOR

22 EMERGENCY ROOM ON-CALL PHYSICIANS.

23 (a) IN GENERAL.—Section 1834(g) (42 U.S.C.

24 1395m(g)), as amended by section 201(a), is further
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1 amended by adding at the end the following new para2 graph:

3 ‘‘(5) COVERAGE OF COSTS FOR EMERGENCY

4 ROOM ON-CALL PHYSICIANS.—In determining the

5 reasonable costs of outpatient critical access hospital

6 services under paragraphs (1) and (2)(A), the Sec7 retary shall recognize as allowable costs, amounts

8 (as defined by the Secretary) for reasonable com9 pensation and related costs for emergency room phy10 sicians who are on-call (as defined by the Secretary)

11 but who are not present on the premises of the crit12 ical access hospital involved, and are not otherwise

13 furnishing physicians’ services and are not on-call at

14 any other provider or facility.’’.

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

16 subsection (a) applies to cost reporting periods beginning

17 on or after October 1, 2001.

18 SEC. 205. TREATMENT OF AMBULANCE SERVICES FUR19 NISHED BY CERTAIN CRITICAL ACCESS HOS20 PITALS.

21 (a) IN GENERAL.—Section 1834(l) (42 U.S.C.

22 1395m(l)) is amended by adding at the end the following

23 new paragraph:

24 ‘‘(8) SERVICES FURNISHED BY CRITICAL AC25 CESS HOSPITALS.—Notwithstanding any other provi-
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1 sion of this subsection, the Secretary shall pay the

2 reasonable costs incurred in furnishing ambulance

3 services if such services are furnished—

4 ‘‘(A) by a critical access hospital (as de5 fined in section 1861(mm)(1)), or

6 ‘‘(B) by an entity that is owned and oper7 ated by a critical access hospital,

8 but only if the critical access hospital or entity is the

9 only provider or supplier of ambulance services that

10 is located within a 35-mile drive of such critical ac11 cess hospital.’’.

12 (b) CONFORMING AMENDMENT.—Section

13 1833(a)(1)(R) (42 U.S.C. 1395l(a)(1)(R)) is amended—

14 (1) by striking ‘‘ambulance service,’’ and insert15 ing ‘‘ambulance services, (i)’’; and

16 (2) by inserting before the comma at the end

17 the following: ‘‘and (ii) with respect to ambulance

18 services described in section 1834(l)(8), the amounts

19 paid shall be the amounts determined under section

20 1834(g) for outpatient critical access hospital serv21 ices’’.

22 (c) EFFECTIVE DATE.—The amendments made by

23 this section apply to services furnished on or after the date

24 of the enactment of this Act.
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1 SEC. 206. GAO STUDY ON CERTAIN ELIGIBILITY REQUIRE2 MENTS FOR CRITICAL ACCESS HOSPITALS.

3 (a) STUDY.—The Comptroller General of the United

4 States shall conduct a study on the eligibility requirements

5 for critical access hospitals under section 1820(c) of the

6 Social Security Act (42 U.S.C. 1395i–4(c)) with respect

7 to limitations on average length of stay and number of

8 beds in such a hospital, including an analysis of—

9 (1) the feasibility of having a distinct part unit

10 as part of a critical access hospital for purposes of

11 the medicare program under title XVIII of such Act,

12 and

13 (2) the effect of seasonal variations in patient

14 admissions on critical access hospital eligibility re15 quirements with respect to limitations on average

16 annual length of stay and number of beds.

17 (b) REPORT.—Not later than 1 year after the date

18 of the enactment of this Act, the Comptroller General shall

19 submit to Congress a report on the study conducted under

20 subsection (a) together with recommendations

21 regarding—

22 (1) whether distinct part units should be per23 mitted as part of a critical access hospital under the

24 medicare program;
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1 (2) if so permitted, the payment methodologies

2 that should apply with respect to services provided

3 by such units;

4 (3) whether, and to what extent, such units

5 should be included in or excluded from the bed limits

6 applicable to critical access hospitals under the

7 medicare program; and

8 (4) any adjustments to such eligibility require9 ments to account for seasonal variations in patient

10 admissions.

11 Subtitle B—Other Rural Hospitals

12 Provisions

13 SEC. 211. EQUITABLE TREATMENT FOR RURAL DISPROPOR14 TIONATE SHARE HOSPITALS.

15 (a) APPLICATION OF UNIFORM THRESHOLD.—Sec16 tion 1886(d)(5)(F)(v) (42 U.S.C. 1395ww(d)(5)(F)(v)) is

17 amended—

18 (1) in subclause (II), by inserting ‘‘(or 15 per19 cent, for discharges occurring on or after October 1,

20 2001)’’ after ‘‘30 percent’’;

21 (2) in subclause (III), by inserting ‘‘(or 15 per22 cent, for discharges occurring on or after October 1,

23 2001)’’ after ‘‘40 percent’’; and
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1 (3) in subclause (IV), by inserting ‘‘(or 15 per2 cent, for discharges occurring on or after October 1,

3 2001)’’ after ‘‘45 percent’’.

4 (b) ADJUSTMENT OF PAYMENT FORMULAS.—

5 (1) SOLE COMMUNITY HOSPITALS.—Section

6 1886(d)(5)(F) (42 U.S.C. 1395ww(d)(5)(F)) is

7 amended—

8 (A) in clause (iv)(VI), by inserting after

9 ‘‘10 percent’’ the following: ‘‘or, for discharges

10 occurring on or after October 1, 2001, is equal

11 to the percent determined in accordance with

12 clause (x)’’; and

13 (B) by adding at the end the following new

14 clause:

15 ‘‘(x) For purposes of clause (iv)(VI),

16 in the case of a hospital for a cost report17 ing period with a disproportionate patient

18 percentage (as defined in clause (vi))

19 that—

20 ‘‘(I) is less than 19.3, the dis21 proportionate share adjustment per22 centage is determined in accordance

23 with the following formula: (P–

24 15)(.65)–2.5;
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1 ‘‘(II) is equal to or exceeds 19.3,

2 but is less than 30.0, such adjustment

3 percentage is equal to 5.25 percent; or

4 ‘‘(III) is equal to or exceeds 30,

5 such adjustment percentage is equal

6 to 10 percent, where P is the hos7 pital’s disproportionate patient per8 centage (as defined in clause (vi)).’’.

9 (2) RURAL REFERRAL CENTERS.—Such section

10 is further amended—

11 (A) in clause (iv)(V), by inserting after

12 clause (viii) the following: or, for discharges oc13 curring on or after October 1, 2001, is equal to

14 the percent determined in accordance with

15 clause (xi); and

16 (B) by adding at the end the following new

17 clause:

18 ‘‘(xi) For purposes of clause (iv)(V),

19 in the case of a hospital for a cost report20 ing period with a disproportionate patient

21 percentage (as defined in clause (vi))

22 that—

23 ‘‘(I) is less than 19.3, the dis24 proportionate share adjustment per25 centage is determined in accordance
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1 with the following formula: (P–

2 15)(.65)–2.5;

3 ‘‘(II) is equal to or exceeds 19.3,

4 but is less than 30.0, such adjustment

5 percentage is equal to 5.25 percent; or

6 ‘‘(III) is equal to or exceeds 30,

7 such adjustment percentage is deter8 mined in accordance with the fol9 lowing formula: (P–30)(.6)–5.25,

10 where P is the hospital’s dispropor11 tionate patient percentage (as defined

12 in clause (vi)).’’.

13 (3) SMALL RURAL HOSPITALS GENERALLY.—

14 Such section is further amended—

15 (A) in clause (iv)(III), by inserting after

16 ‘‘4 percent’’ the following: ‘‘or, for discharges

17 occurring on or after October 1, 2001, is equal

18 to the percent determined in accordance with

19 clause (xii)’’; and

20 (B) by adding at the end the following new

21 clause:

22 ‘‘(xii) For purposes of clause (iv)(III),

23 in the case of a hospital for a cost report24 ing period with a disproportionate patient
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1 percentage (as defined in clause (vi))

2 that—

3 ‘‘(I) is less than 19.3, the dis4 proportionate share adjustment per5 centage is determined in accordance

6 with the following formula: (P–

7 15)(.65)–2.5;

8 ‘‘(II) is equal to or exceeds 19.3,

9 such adjustment percentage is equal

10 to 5.25 percent, where P is the hos11 pital’s disproportionate patient per12 centage (as defined in clause (vi)).’’.

13 (4) HOSPITALS THAT ARE BOTH SOLE COMMU14 NITY HOSPITALS AND RURAL REFERRAL CENTERS.—

15 Such section is further amended, in clause (iv)(IV),

16 by inserting after clause (viii) the following: ‘‘or, for

17 discharges occurring on or after October 1, 2001,

18 the greater of the percentages determined under

19 clause (x) or (xi)’’.

20 (5) URBAN HOSPITALS WITH LESS THAN 100

21 BEDS.—Such section is further amended—

22 (A) in clause (iv)(II), by inserting after 5

23 percent the following: ‘‘or, for discharges occur24 ring on or after October 1, 2001, is equal to the
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1 percent determined in accordance with clause

2 (xiii); and

3 (B) by adding at the end the following new

4 clause:

5 ‘‘(xiii) For purposes of clause (iv)(II),

6 in the case of a hospital for a cost report7 ing period with a disproportionate patient

8 percentage (as defined in clause (vi))

9 that—

10 ‘‘(I) is less than 19.3, the dis11 proportionate share adjustment per12 centage is determined in accordance

13 with the following formula: (P–

14 15)(.65)–2.5;

15 ‘‘(II) is equal to or exceeds 19.3,

16 such adjustment percentage is equal

17 to 5.25 percent; where P is the hos18 pital’s disproportionate patient per19 centage (as defined in clause (vi)).’’.
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1 SEC. 212. OPTION TO BASE ELIGIBILITY FOR MEDICARE DE2 PENDENT, SMALL RURAL HOSPITAL PRO3 GRAM ON DISCHARGES DURING 2 OF THE 3

4 MOST RECENTLY AUDITED COST REPORTING

5 PERIODS.

6 (a) IN GENERAL.—Section 1886(d)(5)(G)(iv)(IV)

7 (42 U.S.C. 1395ww(d)(5)(G)(iv)(IV)) is amended by in8 serting ‘‘, or 2 of the 3 most recently audited cost report9 ing periods for which the Secretary has a settled cost re10 port,’’ after ‘‘1987’’.

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

12 this section shall apply with respect to cost reporting peri13 ods beginning on or after April 1, 2001.

14 SEC. 213. EXTENSION OF OPTION TO USE REBASED TARGET

15 AMOUNTS TO ALL SOLE COMMUNITY HOS16 PITALS.

17 (a) IN GENERAL.—Section 1886(b)(3)(I)(i) (42

18 U.S.C. 1395ww(b)(3)(I)(i)) is amended—

19 (1) in the matter preceding subclause (I), by

20 striking ‘‘that for its cost reporting period beginning

21 during 1999’’ and all that follows through ‘‘for such

22 target amount’’ and inserting ‘‘there shall be sub23 stituted for the amount otherwise determined under

24 subsection (d)(5)(D)(i), if such substitution results

25 in a greater amount of payment under this section

26 for the hospital’’;
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1 (2) in subclause (I), by striking ‘‘target amount

2 otherwise applicable’’ and all that follows through

3 ‘‘target amount’)’’ and inserting ‘‘the amount other4 wise applicable to the hospital under subsection

5 (d)(5)(D)(i) (referred to in this clause as the ‘sub6 section (d)(5)(D)(i) amount’)’’; and

7 (3) in each of subclauses (II) and (III), by

8 striking ‘‘subparagraph (C) target amount’’ and in9 serting ‘‘subsection (d)(5)(D)(i) amount’’.

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

11 this section shall take effect as if included in the enact12 ment of section 405 of BBRA (113 Stat. 1501A–372).

13 SEC. 214. MEDPAC ANALYSIS OF IMPACT OF VOLUME ON

14 PER UNIT COST OF RURAL HOSPITALS WITH

15 PSYCHIATRIC UNITS.

16 The Medicare Payment Advisory Commission, in its

17 study conducted pursuant to subsection (a) of section 411

18 of BBRA (113 Stat. 1501A–377), shall include—

19 (1) in such study an analysis of the impact of

20 volume on the per unit cost of rural hospitals with

21 psychiatric units; and

22 (2) in its report under subsection (b) of such

23 section a recommendation on whether special treat24 ment for such hospitals may be warranted.
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1 Subtitle C—Other Rural Provisions

2 SEC. 221. ASSISTANCE FOR PROVIDERS OF AMBULANCE

3 SERVICES IN RURAL AREAS.

4 (a) TRANSITIONAL ASSISTANCE IN CERTAIN MILE5 AGE RATES.—Section 1834(l) (42 U.S.C. 1395m(l)) is

6 amended by adding at the end the following new para7 graph:

8 ‘‘(8) TRANSITIONAL ASSISTANCE FOR RURAL

9 PROVIDERS.—In the case of ground ambulance serv10 ices furnished on or after the date on which the Sec11 retary implements the fee schedule under this sub12 section and before January 1, 2004, for which the

13 transportation originates in a rural area (as defined

14 in section 1886(d)(2)(D)) or in a rural census tract

15 of a metropolitan statistical area (as determined

16 under the most recent modification of the Goldsmith

17 Modification, originally published in the Federal

18 Register on February 27, 1992 (57 Fed. Reg.

19 6725)), the fee schedule established under this sub20 section shall provide that, with respect to the pay21 ment rate for mileage for a trip above 17 miles, and

22 up to 50 miles, the rate otherwise established shall

be increased by not less than 1 23 ⁄2 of the additional

24 payment per mile established for the first 17 miles

25 of such a trip originating in a rural area.’’.
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1 (b) GAO STUDIES ON THE COSTS OF AMBULANCE

2 SERVICES FURNISHED IN RURAL AREAS.—

3 (1) STUDY.—The Comptroller General of the

4 United States shall conduct a study on each of the

5 matters described in paragraph (2).

6 (2) MATTERS DESCRIBED.—The matters re7 ferred to in paragraph (1) are the following:

8 (A) The cost of efficiently providing ambu9 lance services for trips originating in rural

10 areas, with special emphasis on collection of

11 cost data from rural providers.

12 (B) The means by which rural areas with

13 low population densities can be identified for

14 the purpose of designating areas in which the

15 cost of providing ambulance services would be

16 expected to be higher than similar services pro17 vided in more heavily populated areas because

18 of low usage. Such study shall also include an

19 analysis of the additional costs of providing am20 bulance services in areas designated under the

21 previous sentence.

22 (3) REPORT.—Not later than June 30, 2002,

23 the Comptroller General shall submit to Congress a

24 report on the results of the studies conducted under

25 paragraph (1) and shall include recommendations on
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1 steps that should be taken to assure access to ambu2 lance services in rural areas.

3 (c) ADJUSTMENT IN RURAL RATES.—In providing

4 for adjustments under subparagraph (D) of section

5 1834(l)(2) of the Social Security Act (42 U.S.C.

6 1395m(l)(2)) for years beginning with 2004, the Secretary

7 of Health and Human Services shall take into consider8 ation the recommendations contained in the report under

9 subsection (b)(2) and shall adjust the fee schedule pay10 ment rates under such section for ambulance services pro11 vided in low density rural areas based on the increased

12 cost (if any) of providing such services in such areas.

13 (d) EFFECTIVE DATE.—The amendment made by

14 subsection (a) applies to services furnished on or after the

15 date the Secretary implements the fee schedule under sec16 tion 1834(l) of the Social Security Act (42 U.S.C.

17 1395m(l)). In applying such amendment to services fur18 nished on or after such date and before January 1, 2002,

19 the amount of the rate increase provided under such

20 amendment shall be equal to $1.25 per mile.

21 SEC. 222. PAYMENT FOR CERTAIN PHYSICIAN ASSISTANT

22 SERVICES.

23 (a) PAYMENT FOR CERTAIN PHYSICIAN ASSISTANT

24 SERVICES.—Section 1842(b)(6)(C) (42 U.S.C.

25 1395u(b)(6)(C)) is amended—
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1 (1) by striking ‘‘for such services provided be2 fore January 1, 2003,’’; and

3 (2) by striking the semicolon at the end and in4 serting a comma.

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

6 subsection (a) shall take effect on the date of the enact7 ment of this Act.

8 SEC. 223. REVISION OF MEDICARE REIMBURSEMENT FOR

9 TELEHEALTH SERVICES.

10 (a) TIME LIMIT FOR BBA PROVISION.—Section

11 4206(a) of BBA (42 U.S.C. 1395l note) is amended by

12 striking ‘‘Not later than January 1, 1999’’ and inserting

13 ‘‘For services furnished on and after January 1, 1999, and

14 before July 1, 2001’’.

15 (b) EXPANSION OF MEDICARE PAYMENT FOR TELE16 HEALTH SERVICES.—Section 1834 (42 U.S.C. 1395m) is

17 amended by adding at the end the following new sub18 section:

19 ‘‘(m) PAYMENT FOR TELEHEALTH SERVICES.—

20 ‘‘(1) IN GENERAL.—The Secretary shall pay for

21 telehealth services that are furnished via a tele22 communications system by a physician (as defined in

23 section 1861(r)) or a practitioner (described in sec24 tion 1842(b)(18)(C)) to an eligible telehealth indi25 vidual enrolled under this part notwithstanding that
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1 the individual physician or practitioner providing the

2 telehealth service is not at the same location as the

3 beneficiary. For purposes of the preceding sentence,

4 in the case of any Federal telemedicine demonstra5 tion program conducted in Alaska or Hawaii, the

6 term ‘telecommunications system’ includes store7 and-forward technologies that provide for the asyn8 chronous transmission of health care information in

9 single or multimedia formats.

10 ‘‘(2) PAYMENT AMOUNT.—

11 ‘‘(A) DISTANT SITE.—The Secretary shall

12 pay to a physician or practitioner located at a

13 distant site that furnishes a telehealth service

14 to an eligible telehealth individual an amount

15 equal to the amount that such physician or

16 practitioner would have been paid under this

17 title had such service been furnished without

18 the use of a telecommunications system.

19 ‘‘(B) FACILITY FEE FOR ORIGINATING

20 SITE.—With respect to a telehealth service, sub21 ject to section 1833(a)(1)(U), there shall be

22 paid to the originating site a facility fee equal

23 to—
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1 ‘‘(i) for the period beginning on July

2 1, 2001, and ending on December 31,

3 2001, and for 2002, $20; and

4 ‘‘(ii) for a subsequent year, the facil5 ity fee specified in clause (i) or this clause

6 for the preceding year increased by the

7 percentage increase in the MEI (as defined

8 in section 1842(i)(3)) for such subsequent

9 year.

10 ‘‘(C) TELEPRESENTER NOT REQUIRED.—

11 Nothing in this subsection shall be construed as

12 requiring an eligible telehealth individual to be

13 presented by a physician or practitioner at the

14 originating site for the furnishing of a service

15 via a telecommunications system, unless it is

16 medically necessary (as determined by the phy17 sician or practitioner at the distant site).

18 ‘‘(3) LIMITATION ON BENEFICIARY CHARGES.—

19 ‘‘(A) PHYSICIAN AND PRACTITIONER.—

20 The provisions of section 1848(g) and subpara21 graphs (A) and (B) of section 1842(b)(18) shall

22 apply to a physician or practitioner receiving

23 payment under this subsection in the same

24 manner as they apply to physicians or practi25 tioners under such sections.
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1 ‘‘(B) ORIGINATING SITE.—The provisions

2 of section 1842(b)(18) shall apply to originating

3 sites receiving a facility fee in the same manner

4 as they apply to practitioners under such sec5 tion.

6 ‘‘(4) DEFINITIONS.—For purposes of this sub7 section:

8 ‘‘(A) DISTANT SITE.—The term ‘distant

9 site’ means the site at which the physician or

10 practitioner is located at the time the service is

11 provided via a telecommunications system.

12 ‘‘(B) ELIGIBLE TELEHEALTH INDI13 VIDUAL.—The term ‘eligible telehealth indi14 vidual’ means an individual enrolled under this

15 part who receives a telehealth service furnished

16 at an originating site.

17 ‘‘(C) ORIGINATING SITE.—

18 ‘‘(i) IN GENERAL.—The term ‘origi19 nating site’ means only those sites de20 scribed in clause (ii) at which the eligible

21 telehealth individual is located at the time

22 the service is furnished via a telecommuni23 cations system and only if such site is

24 located—
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1 ‘‘(I) in an area that is designated

2 as a rural health professional shortage

3 area under section 332(a)(1)(A) of

4 the Public Health Service Act (42

5 U.S.C. 254e(a)(1)(A));

6 ‘‘(II) in a county that is not in7 cluded in a Metropolitan Statistical

8 Area; or

9 ‘‘(III) from an entity that partici10 pates in a Federal telemedicine dem11 onstration project that has been ap12 proved by (or receives funding from)

13 the Secretary of Health and Human

14 Services as of December 31, 2000.

15 ‘‘(ii) SITES DESCRIBED.—The sites

16 referred to in clause (i) are the following

17 sites:

18 ‘‘(I) The office of a physician or

19 practitioner.

20 ‘‘(II) A critical access hospital

21 (as defined in section 1861(mm)(1)).

22 ‘‘(III) A rural health clinic (as

23 defined in section 1861(aa)(s)).
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1 ‘‘(IV) A Federally qualified

2 health center (as defined in section

3 1861(aa)(4)).

4 ‘‘(V) A hospital (as defined in

5 section 1861(e)).

6 ‘‘(D) PHYSICIAN.—The term ‘physi7 cian’ has the meaning given that term in

8 section 1861(r).

9 ‘‘(E) PRACTITIONER.—The term

10 ‘practitioner’ has the meaning given that

11 term in section 1842(b)(18)(C).

12 ‘‘(F) TELEHEALTH SERVICE.—

13 ‘‘(i) IN GENERAL.—The term ‘tele14 health service’ means professional con15 sultations, office visits, and office psychi16 atry services (identified as of July 1, 2000,

17 by HCPCS codes 99241–99275, 99201–

18 99215, 90804–90809, and 90862 (and as

19 subsequently modified by the Secretary)),

20 and any additional service specified by the

21 Secretary.

22 ‘‘(ii) YEARLY UPDATE.—The Sec23 retary shall establish a process that pro24 vides, on an annual basis, for the addition

25 or deletion of services (and HCPCS codes),
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1 as appropriate, to those specified in clause

2 (i) for authorized payment under para3 graph (1).’’.

4 (c) CONFORMING AMENDMENT.—Section 1833(a)(1)

5 (42 U.S.C. 1395l(1)), as amended by section 105(c), is

6 further amended—

7 (1) by striking ‘‘and (T)’’ and inserting ‘‘(T)’’;

8 and

9 (2) by inserting before the semicolon at the end

10 the following: ‘‘, and (U) with respect to facility fees

11 described in section 1834(m)(2)(B), the amounts

12 paid shall be 80 percent of the lesser of the actual

13 charge or the amounts specified in such section’’.

14 (d) STUDY AND REPORT ON ADDITIONAL COV15 ERAGE.—

16 (1) STUDY.—The Secretary of Health and

17 Human Services shall conduct a study to identify—

18 (A) settings and sites for the provision of

19 telehealth services that are in addition to those

20 permitted under section 1834(m) of the Social

21 Security Act, as added by subsection (b);

22 (B) practitioners that may be reimbursed

23 under such section for furnishing telehealth

24 services that are in addition to the practitioners
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1 that may be reimbursed for such services under

2 such section; and

3 (C) geographic areas in which telehealth

4 services may be reimbursed that are in addition

5 to the geographic areas where such services

6 may be reimbursed under such section.

7 (2) REPORT.—Not later than 2 years after the

8 date of the enactment of this Act, the Secretary

9 shall submit to Congress a report on the study con10 ducted under paragraph (1) together with such rec11 ommendations for legislation that the Secretary de12 termines are appropriate.

13 (e) EFFECTIVE DATE.—The amendments made by

14 subsections (b) and (c) shall be effective for services fur15 nished on or after July 1, 2001.

16 SEC. 224. EXPANDING ACCESS TO RURAL HEALTH CLINICS.

17 (a) IN GENERAL.—The matter in section 1833(f) (42

18 U.S.C. 1395l(f)) preceding paragraph (1) is amended by

19 striking ‘‘rural hospitals’’ and inserting ‘‘hospitals’’.

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

21 subsection (a) shall apply to services furnished on or after

22 July 1, 2001.
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1 SEC. 225. MEDPAC STUDY ON LOW-VOLUME, ISOLATED

2 RURAL HEALTH CARE PROVIDERS.

3 (a) STUDY.—The Medicare Payment Advisory Com4 mission shall conduct a study on the effect of low patient

5 and procedure volume on the financial status of low-vol6 ume, isolated rural health care providers participating in

7 the medicare program under title XVIII of the Social Se8 curity Act.

9 (b) REPORT.—Not later than 18 months after the

10 date of the enactment of this Act, the Commission shall

11 submit to Congress a report on the study conducted under

12 subsection (a) indicating—

13 (1) whether low-volume, isolated rural health

14 care providers are having, or may have, significantly

15 decreased medicare margins or other financial dif16 ficulties resulting from any of the payment meth17 odologies described in subsection (c);

18 (2) whether the status as a low-volume, isolated

19 rural health care provider should be designated

20 under the medicare program and any criteria that

21 should be used to qualify for such a status; and

22 (3) any changes in the payment methodologies

23 described in subsection (c) that are necessary to pro24 vide appropriate reimbursement under the medicare

25 program to low-volume, isolated rural health care

26 providers (as designated pursuant to paragraph (2)).
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1 (c) PAYMENT METHODOLOGIES DESCRIBED.—The

2 payment methodologies described in this subsection are

3 the following:

4 (1) The prospective payment system for hos5 pital outpatient department services under section

6 1833(t) of the Social Security Act (42 U.S.C.

7 1395l(t)).

8 (2) The fee schedule for ambulance services

9 under section 1834(l) of such Act (42 U.S.C.

10 1395m(l)).

11 (3) The prospective payment system for inpa12 tient hospital services under section 1886 of such

13 Act (42 U.S.C. 1395ww).

14 (4) The prospective payment system for routine

15 service costs of skilled nursing facilities under sec16 tion 1888(e) of such Act (42 U.S.C. 1395yy(e)).

17 (5) The prospective payment system for home

18 health services under section 1895 of such Act (42

19 U.S.C. 1395fff).
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1 TITLE III—PROVISIONS

2 RELATING TO PART A

3 Subtitle A—Inpatient Hospital

4 Services

5 SEC. 301. ELIMINATING REDUCTION IN PPS HOSPITAL PAY6 MENT UPDATE.

7 (a) IN GENERAL.—Section 1886(b)(3)(B)(i) (42

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

9 (1) in subclause (XVI), by striking ‘‘minus 1.1

10 percentage points for hospitals (other than sole com11 munity hospitals) in all areas, and the market bas12 ket percentage increase for sole community hos13 pitals,’’ and inserting ‘‘for hospitals in all areas,’’;

14 (2) in subclause (XVII)—

15 (A) by striking ‘‘minus 1.1 percentage

16 points’’; and

17 (B) by striking ‘‘and’’ at the end;

18 (3) by redesignating subclause (XVIII) as sub19 clause (XIX);

20 (4) in subclause (XIX), as so redesignated, by

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

22 2004’’; and

23 (5) by inserting after subclause (XVII) the fol24 lowing new subclause:
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1 ‘‘(XVIII) for fiscal year 2003, the market bas2 ket percentage increase minus 0.55 percentage

3 points for hospitals in all areas, and’’.

4 (b) SPECIAL RULE FOR PAYMENT FOR FISCAL YEAR

5 2001.—Notwithstanding the amendment made by sub6 section (a), for purposes of making payments for fiscal

7 year 2001 for inpatient hospital services furnished by sub8 section (d) hospitals (as defined in section 1886(d)(1)(B)

9 of the Social Security Act (42 U.S.C. 1395ww(d)(1)(B)),

10 the ‘‘applicable percentage increase’’ referred to in section

11 1886(b)(3)(B)(i) of such Act (42 U.S.C.

12 1395ww(b)(3)(B)(i))—

13 (1) for discharges occurring on or after October

14 1, 2000, and before April 1, 2001, shall be deter15 mined in accordance with subclause (XVI) of such

16 section as in effect on the day before the date of the

17 enactment of this Act; and

18 (2) for discharges occurring on or after April 1,

19 2001, and before October 1, 2001, shall be equal

20 to—

21 (A) the market basket percentage increase

22 plus 1.1 percentage points for hospitals (other

23 than sole community hospitals) in all areas; and

24 (B) the market basket percentage increase

25 for sole community hospitals.
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1 (c) CONSIDERATION OF PRICE OF BLOOD AND

2 BLOOD PRODUCTS IN MARKET BASKET INDEX.—The

3 Secretary of Health and Human Services shall, when next

4 (after the date of the enactment of this Act) rebasing and

5 revising the hospital market basket index (as defined in

6 section 1886(b)(3)(B)(iii) of the Social Security Act (42

7 U.S.C. 1395ww(b)(3)(B)(iii))), consider the prices of

8 blood and blood products purchased by hospitals and de9 termine whether those prices are adequately reflected in

10 such index.

11 (d) MEDPAC STUDY AND REPORT REGARDING CER12 TAIN HOSPITAL COSTS.—

13 (1) STUDY.—The Medicare Payment Advisory

14 Commission shall conduct a study on—

15 (A) any increased costs incurred by sub16 section (d) hospitals (as defined in paragraph

17 (1)(B) of section 1886(d) of the Social Security

18 Act (42 U.S.C. 1395ww(d))) in providing inpa19 tient hospital services to medicare beneficiaries

20 under title XVIII of such Act during the period

21 beginning on October 1, 1983, and ending on

22 September 30, 1999, that were attributable

23 to—

24 (i) complying with new blood safety

25 measure requirements; and
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1 (ii) providing such services using new

2 technologies;

3 (B) the extent to which the prospective

4 payment system for such services under such

5 section provides adequate and timely recogni6 tion of such increased costs;

7 (C) the prospects for (and to the extent

8 practicable, the magnitude of) cost increases

9 that hospitals will incur in providing such serv10 ices that are attributable to complying with new

11 blood safety measure requirements and pro12 viding such services using new technologies dur13 ing the 10 years after the date of the enact14 ment of this Act; and

15 (D) the feasibility and advisability of es16 tablishing mechanisms under such payment sys17 tem to provide for more timely and accurate

18 recognition of such cost increases in the future.

19 (2) CONSULTATION.—In conducting the study

20 under this subsection, the Commission shall consult

21 with representatives of the blood community,

22 including—

23 (A) hospitals;

24 (B) organizations involved in the collection,

25 processing, and delivery of blood; and
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1 (C) organizations involved in the develop2 ment of new blood safety technologies.

3 (3) REPORT.—Not later than 1 year after the

4 date of the enactment of this Act, the Commission

5 shall submit to Congress a report on the study con6 ducted under paragraph (1) together with such rec7 ommendations for legislation and administrative ac8 tion as the Commission determines appropriate.

9 (e) ADJUSTMENT FOR INPATIENT CASE MIX

10 CHANGES.—

11 (1) IN GENERAL.—Section 1886(d)(3)(A) (42

12 U.S.C. 1395ww(d)(3)(A)) is amended by adding at

13 the end the following new clause:

14 ‘‘(vi) Insofar as the Secretary determines that

15 the adjustments under paragraph (4)(C)(i) for a

16 previous fiscal year (or estimates that such adjust17 ments for a future fiscal year) did (or are likely to)

18 result in a change in aggregate payments under this

19 subsection during the fiscal year that are a result of

20 changes in the coding or classification of discharges

21 that do not reflect real changes in case mix, the Sec22 retary may adjust the average standardized amounts

23 computed under this paragraph for subsequent fiscal

24 years so as to eliminate the effect of such coding or

25 classification changes.’’.
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1 (2) EFFECTIVE DATE.—The amendment made

2 by paragraph (1) applies to discharges occurring on

3 or after October 1, 2001.

4 SEC. 302. ADDITIONAL MODIFICATION IN TRANSITION FOR

5 INDIRECT MEDICAL EDUCATION (IME) PER6 CENTAGE ADJUSTMENT.

7 (a) IN GENERAL.—Section 1886(d)(5)(B)(ii) (42

8 U.S.C. 1395ww(d)(5)(B)(ii)) is amended—

9 (1) in subclause (V) by striking ‘‘and’’ at the

10 end;

11 (2) by redesignating subclause (VI) as sub12 clause (VII);

13 (3) in subclause (VII) as so redesignated, by

14 striking ‘‘2001’’ and inserting ‘‘2002’’; and

15 (4) by inserting after subclause (V) the fol16 lowing new subclause:

17 ‘‘(VI) during fiscal year 2002, ‘c’ is equal

18 to 1.6; and’’.

19 (b) SPECIAL RULE FOR PAYMENT FOR FISCAL YEAR

20 2001.—Notwithstanding paragraph (5)(B)(ii)(V) of sec21 tion 1886(d) of the Social Security Act (42 U.S.C.

22 1395ww(d)(5)(B)(ii)(V)), for purposes of making pay23 ments for subsection (d) hospitals (as defined in para24 graph (1)(B) of such section) with indirect costs of med25 ical education, the indirect teaching adjustment factor re-
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1 ferred to in paragraph (5)(B)(ii) of such section shall be

2 determined, for discharges occurring on or after April 1,

3 2001, and before October 1, 2001, as if ‘‘c’’ in paragraph

4 (5)(B)(ii)(V) of such section equalled 1.66 rather than

5 1.54.

6 (c) CONFORMING AMENDMENT RELATING TO DE7 TERMINATION OF STANDARDIZED AMOUNT.—Section

8 1886(d)(2)(C)(i) (42 U.S.C. 1395ww(d)(2)(C)(i)) is

9 amended by inserting ‘‘or of section 302 of the Medicare,

10 Medicaid, and SCHIP Benefits Improvement and Protec11 tion Act of 2000’’ after ‘‘Balanced Budget Refinement Act

12 of 1999’’.

13 (d) CLERICAL AMENDMENTS.—Section

14 1886(d)(5)(B) (42 U.S.C. 1395ww(d)(5)(B)), as amended

15 by subsection (a), is further amended by moving the in16 dentation of each of the following 2 ems to the left:

17 (1) Clauses (ii), (v), and (vi).

18 (2) Subclauses (I) (II), (III), (IV), (V), and

19 (VII) of clause (ii).

20 (3) Subclauses (I) and (II) of clause (vi) and

21 the flush sentence at the end of such clause.

22 SEC. 303. DECREASE IN REDUCTIONS FOR DISPROPOR23 TIONATE SHARE HOSPITAL (DSH) PAYMENTS.

24 (a) IN GENERAL.—Section 1886(d)(5)(F)(ix) (42

25 U.S.C. 1395ww(d)(5)(F)(ix)) is amended—
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1 (1) in subclause (III), by striking ‘‘each of’’ and

2 by inserting ‘‘and 2 percent, respectively’’ after ‘‘3

3 percent’’; and

4 (2) in subclause (IV), by striking ‘‘4 percent’’

5 and inserting ‘‘3 percent’’.

6 (b) SPECIAL RULE FOR PAYMENT FOR FISCAL YEAR

7 2001.—Notwithstanding the amendment made by sub8 section (a)(1), for purposes of making disproportionate

9 share payments for subsection (d) hospitals (as defined

10 in section 1886(d)(1)(B) of the Social Security Act (42

11 U.S.C. 1395ww(d)(1)(B)) for fiscal year 2001, the addi12 tional payment amount otherwise determined under clause

13 (ii) of section 1886(d)(5)(F) of the Social Security Act

14 (42 U.S.C. 1395ww(d)(5)(F))—

15 (1) for discharges occurring on or after October

16 1, 2000, and before April 1, 2001, shall be adjusted

17 as provided by clause (ix)(III) of such section as in

18 effect on the day before the date of the enactment

19 of this Act; and

20 (2) for discharges occurring on or after April 1,

21 2001, and before October 1, 2001, shall, instead of

22 being reduced by 3 percent as provided by clause

23 (ix)(III) of such section as in effect after the date

24 of the enactment of this Act, be reduced by 1 per25 cent.
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1 (c) CONFORMING AMENDMENTS RELATING TO DE2 TERMINATION OF STANDARDIZED AMOUNT.—Section

3 1886(d)(2)(C)(iv) (42 U.S.C. 1395ww(d)(2)(C)(iv)), is

4 amended—

5 (1) by striking ‘‘1989 or’’ and inserting

6 ‘‘1989,’’; and

7 (2) by inserting ‘‘, or the enactment of section

8 303 of the Medicare, Medicaid, and SCHIP Benefits

9 Improvement and Protection Act of 2000’’ after

10 ‘‘Omnibus Budget Reconciliation Act of 1990’’.

11 (d) TECHNICAL AMENDMENT.—

12 (1) IN GENERAL.—Section 1886(d)(5)(F)(i) (42

13 U.S.C. 1395ww(d)(5)(F)(i)) is amended by striking

14 ‘‘and before October 1, 1997,’’.

15 (2) EFFECTIVE DATE.—The amendment made

16 by paragraph (1) is effective as if included in the en17 actment of BBA.

18 (e) REFERENCE TO CHANGES IN DSH FOR RURAL

19 HOSPITALS.—For additional changes in the DSH pro20 gram for rural hospitals, see section 211.

21 SEC. 304. WAGE INDEX IMPROVEMENTS.

22 (a) DURATION OF WAGE INDEX RECLASSIFICATION;

23 USE OF 3-YEAR WAGE DATA.—Section 1886(d)(10)(D)

24 (42 U.S.C. 1395ww(d)(10)(D)) is amended by adding at

25 the end the following new clauses:
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1 ‘‘(v) Any decision of the Board to reclassify a sub2 section (d) hospital for purposes of the adjustment factor

3 described in subparagraph (C)(i)(II) for fiscal year 2001

4 or any fiscal year thereafter shall be effective for a period

5 of 3 fiscal years, except that the Secretary shall establish

6 procedures under which a subsection (d) hospital may

7 elect to terminate such reclassification before the end of

8 such period.

9 ‘‘(vi) Such guidelines shall provide that, in making

10 decisions on applications for reclassification for the pur11 poses described in clause (v) for fiscal year 2003 and any

12 succeeding fiscal year, the Board shall base any compari13 son of the average hourly wage for the hospital with the

14 average hourly wage for hospitals in an area on—

15 ‘‘(I) an average of the average hourly wage

16 amount for the hospital from the most recently pub17 lished hospital wage survey data of the Secretary (as

18 of the date on which the hospital applies for reclassi19 fication) and such amount from each of the two im20 mediately preceding surveys; and

21 ‘‘(II) an average of the average hourly wage

22 amount for hospitals in such area from the most re23 cently published hospital wage survey data of the

24 Secretary (as of the date on which the hospital ap-
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1 plies for reclassification) and such amount from each

2 of the two immediately preceding surveys.’’.

3 (b) PROCESS TO PERMIT STATEWIDE WAGE INDEX

4 CALCULATION AND APPLICATION.—

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

6 Human Services shall establish a process (based on

7 the voluntary process utilized by the Secretary of

8 Health and Human Services under section 1848 of

9 the Social Security Act (42 U.S.C. 1395w–4) for

10 purposes of computing and applying a statewide geo11 graphic wage index) under which an appropriate

12 statewide entity may apply to have all the geo13 graphic areas in a State treated as a single geo14 graphic area for purposes of computing and applying

15 the area wage index under section 1886(d)(3)(E) of

16 such Act (42 U.S.C. 1395ww(d)(3)(E)). Such proc17 ess shall be established by October 1, 2001, for re18 classifications beginning in fiscal year 2003.

19 (2) PROHIBITION ON INDIVIDUAL HOSPITAL RE20 CLASSIFICATION.—Notwithstanding any other provi21 sion of law, if the Secretary applies a statewide geo22 graphic wage index under paragraph (1) with re23 spect to a State, any application submitted by a hos24 pital in that State under section 1886(d)(10) of the
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1 Social Security Act (42 U.S.C. 1395ww(d)(10)) for

2 geographic reclassification shall not be considered.

3 (c) COLLECTION OF INFORMATION ON OCCUPA4 TIONAL MIX.—

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

6 Human Services shall provide for the collection of

7 data every 3 years on occupational mix for employ8 ees of each subsection (d) hospital (as defined in

9 section 1886(d)(1)(D) of the Social Security Act (42

10 U.S.C. 1395ww(d)(1)(D))) in the provision of inpa11 tient hospital services, in order to construct an occu12 pational mix adjustment in the hospital area wage

13 index applied under section 1886(d)(3)(E) of such

14 Act (42 U.S.C. 1395ww(d)(3)(E)).

15 (2) APPLICATION.—The third sentence of sec16 tion 1886(d)(3)(E) (42 U.S.C. 1395ww(d)(3)(E)) is

17 amended by striking ‘‘To the extent determined fea18 sible by the Secretary, such survey shall measure’’

19 and inserting ‘‘Not less often than once every 3

20 years the Secretary (through such survey or other21 wise) shall measure’’.

22 (3) EFFECTIVE DATE.—By not later than Sep23 tember 30, 2003, for application beginning October

24 1, 2004, the Secretary shall first complete—
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1 (A) the collection of data under paragraph

2 (1); and

3 (B) the measurement under the third sen4 tence of section 1886(d)(3)(E), as amended by

5 paragraph (2).

6 SEC. 305. PAYMENT FOR INPATIENT SERVICES OF REHA7 BILITATION HOSPITALS.

8 (a) ASSISTANCE WITH ADMINISTRATIVE COSTS AS9 SOCIATED WITH COMPLETION OF PATIENT ASSESS10 MENT.—Section 1886(j)(3)(B) (42 U.S.C.

11 1395ww(j)(3)(B)) is amended by striking ‘‘98 percent’’

12 and inserting ‘‘98 percent for fiscal year 2001 and 100

13 percent for fiscal year 2002’’.

14 (b) ELECTION TO APPLY FULL PROSPECTIVE PAY15 MENT RATE WITHOUT PHASE-IN.—

16 (1) IN GENERAL.—Paragraph (1) of section

17 1886(j) (42 U.S.C. 1395ww(j)) is amended—

18 (A) in subparagraph (A), by inserting

19 ‘‘other than a facility making an election under

20 subparagraph (F)’’ before ‘‘in a cost reporting

21 period’’;

22 (B) in subparagraph (B), by inserting ‘‘or,

23 in the case of a facility making an election

24 under subparagraph (F), for any cost reporting
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1 period described in such subparagraph,’’ after

2 ‘‘2002,’’; and

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

4 subparagraph:

5 ‘‘(F) ELECTION TO APPLY FULL PROSPEC6 TIVE PAYMENT SYSTEM.—A rehabilitation facil7 ity may elect, not later than 30 days before its

8 first cost reporting period for which the pay9 ment methodology under this subsection applies

10 to the facility, to have payment made to the fa11 cility under this subsection under the provisions

12 of subparagraph (B) (rather than subparagraph

13 (A)) for each cost reporting period to which

14 such payment methodology applies.’’.

15 (2) CLARIFICATION.—Paragraph (3)(B) of such

16 section is amended by inserting ‘‘but not taking into

17 account any payment adjustment resulting from an

18 election permitted under paragraph (1)(F)’’ after

19 ‘‘paragraphs (4) and (6)’’.

20 (c) EFFECTIVE DATE.—The amendments made by

21 this section take effect as if included in the enactment of

22 BBA.
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1 SEC. 306. PAYMENT FOR INPATIENT SERVICES OF PSY2 CHIATRIC HOSPITALS.

3 With respect to hospitals described in clause (i) of

4 section 1886(d)(1)(B) of the Social Security Act (42

5 U.S.C. 1395ww(d)(1)(B)) and psychiatric units described

6 in the matter following clause (v) of such section, in mak7 ing incentive payments to such hospitals under section

8 1886(b)(1)(A) of such Act (42 U.S.C. 1395ww(b)(1)(A))

9 for cost reporting periods beginning on or after October

10 1, 2000, and before October 1, 2001, the Secretary of

11 Health and Human Services, in clause (ii) of such section,

12 shall substitute ‘‘3 percent’’ for ‘‘2 percent’’.

13 SEC. 307. PAYMENT FOR INPATIENT SERVICES OF LONG14 TERM CARE HOSPITALS.

15 (a) INCREASED TARGET AMOUNTS AND CAPS FOR

16 LONG-TERM CARE HOSPITALS BEFORE IMPLEMENTA17 TION OF THE PROSPECTIVE PAYMENT SYSTEM.—

18 (1) IN GENERAL.—Section 1886(b)(3) (42

19 U.S.C. 1395ww(b)(3)) is amended—

20 (A) in subparagraph (H)(ii)(III), by insert21 ing ‘‘subject to subparagraph (J),’’ after

22 ‘‘2002,’’; and

23 (B) by adding at the end the following new

24 subparagraph:
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1 ‘‘(J) For cost reporting periods beginning during fis2 cal year 2001, for a hospital described in subsection

3 (d)(1)(B)(iv)—

4 ‘‘(i) the limiting or cap amount otherwise deter5 mined under subparagraph (H) shall be increased by

6 2 percent; and

7 ‘‘(ii) the target amount otherwise determined

8 under subparagraph (A) shall be increased by 25

9 percent (subject to the limiting or cap amount deter10 mined under subparagraph (H), as increased by

11 clause (i)).’’.

12 (2) APPLICATION.—The amendments made by

13 subsection (a) and by section 122 of BBRA (113

14 Stat. 1501A–331) shall not be taken into account in

15 the development and implementation of the prospec16 tive payment system under section 123 of BBRA

17 (113 Stat. 1501A–331).

18 (b) IMPLEMENTATION OF PROSPECTIVE PAYMENT

19 SYSTEM FOR LONG-TERM CARE HOSPITALS.—

20 (1) MODIFICATION OF REQUIREMENT.—In de21 veloping the prospective payment system for pay22 ment for inpatient hospital services provided in long23 term care hospitals described in section

24 1886(d)(1)(B)(iv) of the Social Security Act (42

25 U.S.C. 1395ww(d)(1)(B)(iv)) under the medicare
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1 program under title XVIII of such Act required

2 under section 123 of BBRA, the Secretary of Health

3 and Human Services shall examine the feasibility

4 and the impact of basing payment under such a sys5 tem on the use of existing (or refined) hospital diag6 nosis-related groups (DRGs) that have been modi7 fied to account for different resource use of long8 term care hospital patients as well as the use of the

9 most recently available hospital discharge data. The

10 Secretary shall examine and may provide for appro11 priate adjustments to the long-term hospital pay12 ment system, including adjustments to DRG

13 weights, area wage adjustments, geographic reclassi14 fication, outliers, updates, and a disproportionate

15 share adjustment consistent with section

16 1886(d)(5)(F) of the Social Security Act (42 U.S.C.

17 1395ww(d)(5)(F)).

18 (2) DEFAULT IMPLEMENTATION OF SYSTEM

19 BASED ON EXISTING DRG METHODOLOGY.—If the

20 Secretary is unable to implement the prospective

21 payment system under section 123 of the BBRA by

22 October 1, 2002, the Secretary shall implement a

23 prospective payment system for such hospitals that

24 bases payment under such a system using existing

25 hospital diagnosis-related groups (DRGs), modified
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1 where feasible to account for resource use of long2 term care hospital patients using the most recently

3 available hospital discharge data for such services

4 furnished on or after that date.

5 SEC. 308. INCREASE IN BASE PAYMENT TO PUERTO RICO

6 ACUTE CARE HOSPITALS.

7 (a) IN GENERAL.—Section 1886(d)(9)(A) (42 U.S.C.

8 1395ww(d)(9)(A)) is amended—

9 (1) in clause (i), by striking ‘‘on or after Octo10 ber 1, 1997, 50 percent (’’ and inserting ‘‘on or

11 after October 1, 2000, 25 percent (and for dis12 charges between October 1, 1997, and September

13 30, 2000, 50 percent’’; and

14 (2) in clause (ii), in the matter preceding sub15 clause (I), by striking ‘‘on or after October 1, 1997,

16 50 percent (’’ and inserting ‘‘on or after October 1,

17 2000, 75 percent (and for discharges between Octo18 ber 1, 1997, and September 30, 2000, 50 percent’’.

19 (b) SPECIAL RULE FOR PAYMENT FOR FISCAL YEAR

20 2001.—

21 (1) IN GENERAL.—Notwithstanding the amend22 ment made by subsection (a), for purposes of mak23 ing payments for the operating costs of inpatient

24 hospital services of a Puerto Rico hospital for fiscal

25 year 2001, the amount referred to in the matter pre-
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1 ceding clause (i) of section 1886(d)(9)(A) of the So2 cial Security Act (42 U.S.C. 1395ww(d)(9)(A))—

3 (A) for discharges occurring on or after

4 October 1, 2000, and before April 1, 2001,

5 shall be determined in accordance with such

6 section as in effect on the day before the date

7 of enactment of this Act; and

8 (B) for discharges occurring on or after

9 April 1, 2001, and before October 1, 2001,

10 shall be determined—

11 (i) using 0 percent of the Puerto Rico

12 adjusted DRG prospective payment rate

13 referred to in clause (i) of such section;

14 and

15 (ii) using 100 percent of the dis16 charge-weighted average referred to in

17 clause (ii) of such section.

18 (2) PUERTO RICO HOSPITAL.—For purposes of

19 this subsection, the term ‘‘Puerto Rico hospital’’

20 means a subsection (d) Puerto Rico hospital as de21 fined in the last sentence of section 1886(d)(9)(A)

22 of the Social Security Act (42 U.S.C.

23 1395ww(d)(9)(A)).
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1 Subtitle B—Adjustments to PPS

2 Payments for Skilled Nursing

3 Facilities

4 SEC. 311. ELIMINATION OF REDUCTION IN SKILLED NURS5 ING FACILITY (SNF) MARKET BASKET UP6 DATE IN 2001.

7 (a) IN GENERAL.—Section 1888(e)(4)(E)(ii) (42

8 U.S.C. 1395yy(e)(4)(E)(ii)) is amended—

9 (1) by redesignating subclauses (II) and (III)

10 as subclauses (III) and (IV), respectively;

11 (2) in subclause (III), as so redesignated—

12 (A) by striking ‘‘each of fiscal years 2001

13 and 2002’’ and inserting ‘‘each of fiscal years

14 2002 and 2003’’; and

15 (B) by striking ‘‘minus 1 percentage

16 point’’ and inserting ‘‘minus 0.5 percentage

17 points’’; and

18 (3) by inserting after subclause (I) the fol19 lowing new subclause:

20 ‘‘(II) for fiscal year 2001, the

21 rate computed for the previous fiscal

22 year increased by the skilled nursing

23 facility market basket percentage

24 change for the fiscal year;’’.
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1 (b) SPECIAL RULE FOR PAYMENT FOR FISCAL YEAR

2 2001.—Notwithstanding the amendments made by sub3 section (a), for purposes of making payments for covered

4 skilled nursing facility services under section 1888(e) of

5 the Social Security Act (42 U.S.C. 1395yy(e)) for fiscal

6 year 2001, the Federal per diem rate referred to in para7 graph (4)(E)(ii) of such section—

8 (1) for the period beginning on October 1,

9 2000, and ending on March 31, 2001, shall be the

10 rate determined in accordance with the law as in ef11 fect on the day before the date of the enactment of

12 this Act; and

13 (2) for the period beginning on April 1, 2001,

14 and ending on September 30, 2001, shall be the rate

15 that would have been determined under such section

16 if ‘‘plus 1 percentage point’’ had been substituted

17 for ‘‘minus 1 percentage point’’ under subclause (II)

18 of such paragraph (as in effect on the day before the

19 date of the enactment of this Act).

20 (c) RELATION TO TEMPORARY INCREASE IN

21 BBRA.—The increases provided under section 101 of

22 BBRA (113 Stat. 1501A–325) shall be in addition to any

23 increase resulting from the amendments made by sub24 section (a).
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1 (d) GAO REPORT ON ADEQUACY OF SNF PAYMENT

2 RATES.—Not later than July 1, 2002, the Comptroller

3 General of the United States shall submit to Congress a

4 report on the adequacy of medicare payment rates to

5 skilled nursing facilities and the extent to which medicare

6 contributes to the financial viability of such facilities. Such

7 report shall take into account the role of private payors,

8 medicaid, and case mix on the financial performance of

9 these facilities, and shall include an analysis (by specific

10 RUG classification) of the number and characteristics of

11 such facilities.

12 (e) HCFA STUDY OF CLASSIFICATION SYSTEMS FOR

13 SNF RESIDENTS.—

14 (1) STUDY.—The Secretary of Health and

15 Human Services shall conduct a study of the dif16 ferent systems for categorizing patients in medicare

17 skilled nursing facilities in a manner that accounts

18 for the relative resource utilization of different pa19 tient types.

20 (2) REPORT.—Not later than January 1, 2005,

21 the Secretary shall submit to Congress a report on

22 the study conducted under subsection (a). Such re23 port shall include such recommendations regarding

24 changes in law as may be appropriate.
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1 SEC. 312. INCREASE IN NURSING COMPONENT OF PPS FED2 ERAL RATE.

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

4 Human Services shall increase by 16.66 percent the nurs5 ing component of the case-mix adjusted Federal prospec6 tive payment rate specified in Tables 3 and 4 of the final

7 rule published in the Federal Register by the Health Care

8 Financing Administration on July 31, 2000 (65 Fed. Reg.

9 46770), effective for services furnished on or after April

10 1, 2001, and before October 1, 2002.

11 (b) GAO AUDIT OF NURSING STAFF RATIOS.—

12 (1) AUDIT.—The Comptroller General of the

13 United States shall conduct an audit of nursing

14 staffing ratios in a representative sample of medi15 care skilled nursing facilities. Such sample shall

16 cover selected States and shall include broad rep17 resentation with respect to size, ownership, location,

18 and medicare volume. Such audit shall include an

19 examination of payroll records and medicaid cost re20 ports of individual facilities.

21 (2) REPORT.—Not later than August 1, 2002,

22 the Comptroller General shall submit to Congress a

23 report on the audits conducted under paragraph (1).

24 Such report shall include an assessment of the im25 pact of the increased payments under this subtitle

26 on increased nursing staff ratios and shall make rec-
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1 ommendations as to whether increased payments

2 under subsection (a) should be continued.

3 SEC. 313. APPLICATION OF SNF CONSOLIDATED BILLING

4 REQUIREMENT LIMITED TO PART A COV5 ERED STAYS.

6 (a) IN GENERAL.—Section 1862(a)(18) (42 U.S.C.

7 1395y(a)(18)) is amended by striking ‘‘or of a part of a

8 facility that includes a skilled nursing facility (as deter9 mined under regulations),’’ and inserting ‘‘during a period

10 in which the resident is provided covered post-hospital ex11 tended care services (or, for services described in section

12 1861(s)(2)(D), which are furnished to such an individual

13 without regard to such period),’’.

14 (b) CONFORMING AMENDMENTS.—(1) Section

15 1842(b)(6)(E) (42 U.S.C. 1395u(b)(6)(E)) is amended—

16 (A) by inserting ‘‘by, or under arrangements

17 made by, a skilled nursing facility’’ after ‘‘fur18 nished’’;

19 (B) by striking ‘‘or of a part of a facility that

20 includes a skilled nursing facility (as determined

21 under regulations)’’; and

22 (C) by striking ‘‘(without regard to whether or

23 not the item or service was furnished by the facility,

24 by others under arrangement with them made by the
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1 facility, under any other contracting or consulting

2 arrangement, or otherwise)’’.

3 (2) Section 1842(t) (42 U.S.C. 1395u(t)) is amended

4 by striking ‘‘by a physician’’ and ‘‘or of a part of a facility

5 that includes a skilled nursing facility (as determined

6 under regulations),’’.

7 (3) Section 1866(a)(1)(H)(ii)(I) (42 U.S.C.

8 1395cc(a)(1)(H)(ii)(I)) is amended by inserting after

9 ‘‘who is a resident of the skilled nursing facility’’ the fol10 lowing: ‘‘during a period in which the resident is provided

11 covered post-hospital extended care services (or, for serv12 ices described in section 1861(s)(2)(D), that are furnished

13 to such an individual without regard to such period)’’.

14 (c) EFFECTIVE DATE.—The amendments made by

15 subsections (a) and (b) apply to services furnished on or

16 after January 1, 2001.

17 (d) OVERSIGHT.—The Secretary of Health and

18 Human Services, through the Office of the Inspector Gen19 eral in the Department of Health and Human Services

20 or otherwise, shall monitor payments made under part B

21 of the title XVIII of the Social Security Act for items and

22 services furnished to residents of skilled nursing facilities

23 during a time in which the residents are not being pro24 vided medicare covered post-hospital extended care serv-
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1 ices to ensure that there is not duplicate billing for serv2 ices or excessive services provided.

3 SEC. 314. ADJUSTMENT OF REHABILITATION RUGS TO COR4 RECT ANOMALY IN PAYMENT RATES.

5 (a) ADJUSTMENT FOR REHABILITATION RUGS.—

6 (1) IN GENERAL.—For purposes of computing

7 payments for covered skilled nursing facility services

8 under paragraph (1) of section 1888(e) of the Social

9 Security Act (42 U.S.C. 1395yy(e)) for such services

10 furnished on or after April 1, 2001, and before the

11 date described in section 101(c)(2) of BBRA (113

12 Stat. 1501A–324), the Secretary of Health and

13 Human Services shall increase by 6.7 percent the

14 adjusted Federal per diem rate otherwise determined

15 under paragraph (4) of such section (but for this

16 section) for covered skilled nursing facility services

17 for RUG–III rehabilitation groups described in para18 graph (2) furnished to an individual during the pe19 riod in which such individual is classified in such a

20 RUG–III category.

21 (2) REHABILITATION GROUPS DESCRIBED.—

22 The RUG–III rehabilitation groups for which the

23 adjustment described in paragraph (1) applies are

24 RUC, RUB, RUA, RVC, RVB, RVA, RHC, RHB,

25 RHA, RMC, RMB, RMA, RLB, and RLA, as speci-
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•HR 5601 IH

1 fied in Tables 3 and 4 of the final rule published in

2 the Federal Register by the Health Care Financing

3 Administration on July 31, 2000 (65 Fed. Reg.

4 46770).

5 (b) CORRECTION WITH RESPECT TO REHABILITA6 TION RUGS.—

7 (1) IN GENERAL.—Section 101(b) of BBRA

8 (113 Stat. 1501A–324) is amended by striking

9 ‘‘CA1, RHC, RMC, and RMB’’ and inserting ‘‘and

10 CA1’’.

11 (2) EFFECTIVE DATE.—The amendment made

12 by paragraph (1) applies to services furnished on or

13 after April 1, 2001.

14 (c) REVIEW BY OFFICE OF INSPECTOR GENERAL.—

15 The Inspector General of the Department of Health and

16 Human Services shall review the medicare payment struc17 ture for services classified within rehabilitation resource

18 utilization groups (RUGs) (as in effect after the date of

19 the enactment of the BBRA) to assess whether payment

20 incentives exist for the delivery of inadequate care. Not

21 later than October 1, 2001, the Inspector General shall

22 submit to Congress a report on such review.
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1 SEC. 315. ESTABLISHMENT OF PROCESS FOR GEOGRAPHIC

2 RECLASSIFICATION.

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

4 Human Services may establish a procedure for the geo5 graphic reclassification of a skilled nursing facility for pur6 poses of payment for covered skilled nursing facility serv7 ices under the prospective payment system established

8 under section 1888(e) of the Social Security Act (42

9 U.S.C. 1395yy(e)). Such procedure may be based upon the

10 method for geographic reclassifications for inpatient hos11 pitals established under section 1886(d)(10) of the Social

12 Security Act (42 U.S.C. 1395ww(d)(10)).

13 (b) REQUIREMENT FOR SKILLED NURSING FACILITY

14 WAGE DATA.—In no case may the Secretary implement

15 the procedure under subsection (a) before such time as

16 the Secretary has collected data necessary to establish an

17 area wage index for skilled nursing facilities based on

18 wage data from such facilities.

19 Subtitle C—Hospice Care

20 SEC. 321. FULL MARKET BASKET INCREASE FOR 2001 AND

21 2002.

22 (a) IN GENERAL.—Section 1814(i)(1)(C)(ii) (42

23 U.S.C. 1395f(i)(1)(C)(ii)) is amended—

24 (1) by redesignating subclause (VII) as sub25 clause (VIII);

26 (2) in subclause (VI)—
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1 (A) by striking ‘‘through 2002’’ and insert2 ing ‘‘through 2000’’; and

3 (B) by striking ‘‘and’’ at the end; and

4 (3) by inserting after subclause (VI) the fol5 lowing new subclause:

6 ‘‘(VII) for each of fiscal years 2001 and 2002,

7 the market basket percentage increase for the fiscal

8 year; and’’.

9 (b) TRANSITION DURING FISCAL YEAR 2001.—Not10 withstanding the amendments made by subsection (a), for

11 purposes of making payments for hospice care under sec12 tion 1814(i) of the Social Security Act (42 U.S.C.

13 1395f(i)) for fiscal year 2001, the payment rates referred

14 to in paragraph (1)(C) of such section—

15 (1) for the period beginning on October 1,

16 2000, and ending on March 31, 2001, shall be the

17 rate determined in accordance with the law as in ef18 fect on the day before the date of the enactment of

19 this Act; and

20 (2) for the period beginning on April 1, 2001,

21 and ending on September 30, 2001, shall be the rate

22 that would have been determined under paragraph

23 (1) if ‘‘plus 1.0 percentage points’’ were substituted

24 for ‘‘minus 1.0 percentage points’’ under paragraph

25 (1)(C)(ii)(VI) of such section for fiscal year 2001.
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1 (c) CONFORMING AMENDMENTS TO BBRA.—

2 (1) IN GENERAL.—Section 131 of BBRA (113

3 Stat. 1501A–333) is repealed.

4 (2) EFFECTIVE DATE.—The amendment made

5 by paragraph (1) shall take effect as if included in

6 the enactment of BBRA.

7 (d) TECHNICAL AMENDMENT.—Section

8 1814(a)(7)(A)(ii) (42 U.S.C. 1395f(a)(7)(A)(ii)) is

9 amended by striking the period at the end and inserting

10 a semicolon.

11 SEC. 322. CLARIFICATION OF PHYSICIAN CERTIFICATION.

12 (a) CERTIFICATION BASED ON NORMAL COURSE OF

13 ILLNESS.—

14 (1) IN GENERAL.—Section 1814(a) (42 U.S.C.

15 1395f(a)) is amended by adding at the end the fol16 lowing new sentence: ‘‘The certification regarding

17 terminal illness of an individual under paragraph (7)

18 shall be based on the physician’s or medical direc19 tor’s clinical judgment regarding the normal course

20 of the individual’s illness.’’.

21 (2) EFFECTIVE DATE.—The amendment made

22 by paragraph (1) applies to certifications made on or

23 after the date of the enactment of this Act.

24 (b) STUDY AND REPORT ON PHYSICIAN CERTIFI25 CATION REQUIREMENT FOR HOSPICE BENEFITS.—
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1 (1) STUDY.—The Secretary of Health and

2 Human Services shall conduct a study to examine

3 the appropriateness of the certification regarding

4 terminal illness of an individual under section

5 1814(a)(7) of the Social Security Act (42 U.S.C.

6 1395f(a)(7)) that is required in order for such indi7 vidual to receive hospice benefits under the medicare

8 program under title XVIII of such Act. In con9 ducting such study, the Secretary shall take into ac10 count the effect of the amendment made by sub11 section (a).

12 (2) REPORT.—Not later than 2 years after the

13 date of the enactment of this Act, the Secretary of

14 Health and Human Services shall submit to Con15 gress a report on the study conducted under para16 graph (1), together with any recommendations for

17 legislation that the Secretary deems appropriate.

18 SEC. 323. MEDPAC REPORT ON ACCESS TO, AND USE OF,

19 HOSPICE BENEFIT.

20 (a) IN GENERAL.—The Medicare Payment Advisory

21 Commission shall conduct a study to examine the factors

22 affecting the use of hospice benefits under the medicare

23 program under title XVIII of the Social Security Act, in24 cluding a delay in the time (relative to death) of entry

25 into a hospice program, and differences in such use be-
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1 tween urban and rural hospice programs and based upon

2 the presenting condition of the patient.

3 (b) REPORT.—Not later than 18 months after the

4 date of the enactment of this Act, the Commission shall

5 submit to Congress a report on the study conducted under

6 subsection (a), together with any recommendations for leg7 islation that the Commission deems appropriate.

8 Subtitle D—Other Provisions

9 SEC. 331. RELIEF FROM MEDICARE PART A LATE ENROLL10 MENT PENALTY FOR GROUP BUY-IN FOR

11 STATE AND LOCAL RETIREES.

12 (a) IN GENERAL.—Section 1818 (42 U.S.C. 1395i–

13 2) is amended—

14 (1) in subsection (c)(6), by inserting before the

15 semicolon at the end the following: ‘‘and shall be

16 subject to reduction in accordance with subsection

17 (d)(6)’’; and

18 (2) by adding at the end of subsection (d) the

19 following new paragraph:

20 ‘‘(6)(A) In the case where a State, a political subdivi21 sion of a State, or an agency or instrumentality of a State

22 or political subdivision thereof determines to pay, for the

23 life of each individual, the monthly premiums due under

24 paragraph (1) on behalf of each of the individuals in a

25 qualified State or local government retiree group who
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1 meets the conditions of subsection (a), the amount of any

2 increase otherwise applicable under section 1839(b) (as

3 applied and modified by subsection (c)(6) of this section)

4 with respect to the monthly premium for benefits under

5 this part for an individual who is a member of such group

6 shall be reduced by the total amount of taxes paid under

7 section 3101(b) of the Internal Revenue Code of 1986 by

8 such individual and under section 3111(b) by the employ9 ers of such individual on behalf of such individual with

10 respect to employment (as defined in section 3121(b) of

11 such Code).

12 ‘‘(B) For purposes of this paragraph, the term ‘quali13 fied State or local government retiree group’ means all of

14 the individuals who retire prior to a specified date that

15 is before January 1, 2002, from employment in 1 or more

16 occupations or other broad classes of employees of—

17 ‘‘(i) the State;

18 ‘‘(ii) a political subdivision of the State; or

19 ‘‘(iii) an agency or instrumentality of the State

20 or political subdivision of the State.’’.

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

22 subsection (a) apply to premiums for months beginning

23 with July 1, 2001.
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1 SEC. 332. HOSPITAL GEOGRAPHIC RECLASSIFICATION FOR

2 LABOR COSTS FOR OTHER PPS SYSTEMS.

3 (a) HOSPITAL GEOGRAPHIC RECLASSIFICATION FOR

4 LABOR COSTS APPLICABLE TO OTHER PPS SYSTEMS.—

5 (1) IN GENERAL.—Notwithstanding the geo6 graphic adjustment factor otherwise established

7 under title XVIII of the Social Security Act for

8 items and services paid under a prospective payment

9 system described in paragraph (2), in the case of a

10 hospital with an application that has been approved

11 by the Medicare Geographic Classification Review

12 Board under section 1886(d)(10)(C) of such Act (42

13 U.S.C. 1395ww(d)(10)(C)) to change the hospital’s

14 geographic classification for a fiscal year for pur15 poses of the factor used to adjust the prospective

16 payment rate for area differences in hospital wage

17 levels that applies to such hospital under section

18 1886(d)(3)(E) of such Act, the Secretary shall sub19 stitute such change in the hospital’s geographic ad20 justment that would otherwise be applied to an enti21 ty or department of the hospital that is provider

22 based to account for variations in costs which are at23 tributable to wages and wage-related costs for items

24 and services paid under the prospective payment sys25 tems described in paragraph (2).
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1 (2) PROSPECTIVE PAYMENT SYSTEMS COV2 ERED.—For purposes of this section, items and serv3 ices furnished under the following prospective pay4 ment systems are covered:

5 (A) SNF PROSPECTIVE PAYMENT SYS6 TEM.—The prospective payment system for cov7 ered skilled nursing facility services under sec8 tion 1888(e) of the Social Security Act (42

9 U.S.C. 1395yy(e)).

10 (B) HOME HEALTH SERVICES PROSPEC11 TIVE PAYMENT SYSTEM.—The prospective pay12 ment system for home health services under

13 section 1895(b) of such Act (42 U.S.C.

14 1395fff(b)).

15 (C) INPATIENT REHABILITATION HOSPITAL

16 SERVICES.—The prospective payment system

17 for inpatient rehabilitation services under sec18 tion 1888(j) of such Act (42 U.S.C.

19 1395ww(j)).

20 (D) INPATIENT LONG-TERM CARE HOS21 PITAL SERVICES.—The prospective payment

22 system for inpatient hospital services of long23 term care hospitals under section 123 of the

24 BBRA.
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1 (E) INPATIENT PSYCHIATRIC HOSPITAL

2 SERVICES.—The prospective payment system

3 for inpatient hospital services of psychiatric

4 hospitals and units under section 124 of the

5 BBRA.

6 (b) EFFECTIVE DATE.—Subsection (a) applies to fis7 cal years beginning with fiscal year 2002.

8 TITLE IV—PROVISIONS

9 RELATING TO PART B

10 Subtitle A—Hospital Outpatient

11 Services

12 SEC. 401. REVISION OF HOSPITAL OUTPATIENT PPS PAY13 MENT UPDATE.

14 (a) IN GENERAL.—Section 1833(t)(3)(C)(iii) (42

15 U.S.C. 1395l(t)(3)(C)(iii)) is amended by striking ‘‘in

16 each of 2000, 2001, and 2002’’ and inserting ‘‘in each

17 of 2000 and 2002’’.

18 (b) ADJUSTMENT FOR CASE MIX CHANGES.—

19 (1) IN GENERAL.—Section 1833(t)(3)(C) (42

20 U.S.C. 1395l(t)(3)(C)) is amended—

21 (A) by redesignating clause (iii) as clause

22 (iv); and

23 (B) by inserting after clause (ii) the fol24 lowing new clause:
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1 ‘‘(iii) ADJUSTMENT FOR SERVICE MIX

2 CHANGES.—Insofar as the Secretary deter3 mines that the adjustments for service mix

4 under paragraph (2) for a previous year

5 (or estimates that such adjustments for a

6 future year) did (or are likely to) result in

7 a change in aggregate payments under this

8 subsection during the year that are a re9 sult of changes in the coding or classifica10 tion of covered OPD services that do not

11 reflect real changes in service mix, the Sec12 retary may adjust the conversion factor

13 computed under this subparagraph for

14 subsequent years so as to eliminate the ef15 fect of such coding or classification

16 changes.’’.

17 (2) EFFECTIVE DATE.—The amendments made

18 by paragraph (1) shall take effect as if included in

19 the enactment of BBA.

20 SEC. 402. CLARIFYING PROCESS AND STANDARDS FOR DE21 TERMINING ELIGIBILITY OF DEVICES FOR

22 PASS-THROUGH PAYMENTS UNDER HOSPITAL

23 OUTPATIENT PPS.

24 (a) IN GENERAL.—Section 1833(t)(6) (42 U.S.C.

25 1395l(t)(6)) is amended—
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1 (1) by redesignating subparagraphs (C) and

2 (D) as subparagraphs (D) and (E), respectively; and

3 (2) by striking subparagraph (B) and inserting

4 the following new subparagraphs:

5 ‘‘(B) USE OF CATEGORIES IN DETER6 MINING ELIGIBILITY OF A DEVICE FOR PASS7 THROUGH PAYMENTS.—The following provi8 sions apply for purposes of determining whether

9 a medical device qualifies for additional pay10 ments under clause (ii) or (iv) of subparagraph

11 (A):

12 ‘‘(i) ESTABLISHMENT OF INITIAL CAT13 EGORIES.—The Secretary shall initially es14 tablish under this clause categories of med15 ical devices based on type of device by

16 April 1, 2001. Such categories shall be es17 tablished in a manner such that each med18 ical device that meets the requirements of

19 clause (ii) or (iv) of subparagraph (A) as

20 of January 1, 2001, is included in such a

21 category and no such device is included in

22 more than one category. For purposes of

23 the preceding sentence, whether a medical

24 device meets such requirements as of such

25 date shall be determined on the basis of
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1 the program memoranda issued before

2 such date or if the Secretary determines

3 the medical device would have been in4 cluded in the program memoranda but for

5 the requirement of subparagraph

6 (A)(iv)(I). The categories may be estab7 lished under this clause by program memo8 randum or otherwise, after consultation

9 with groups representing hospitals, manu10 facturers of medical devices, and other af11 fected parties.

12 ‘‘(ii) ESTABLISHING CRITERIA FOR

13 ADDITIONAL CATEGORIES.—

14 ‘‘(I) IN GENERAL.—The Sec15 retary shall establish criteria that will

16 be used for creation of additional cat17 egories (other than those established

18 under clause (i)) through rulemaking

19 (which may include use of an interim

20 final rule with comment period).

21 ‘‘(II) STANDARD.—Such cat22 egories shall be established under this

23 clause in a manner such that no med24 ical device is described by more than

25 one category. Such criteria shall in-
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1 clude a test of whether the average

2 cost of devices that would be included

3 in a category and are in use at the

4 time the category is established is not

5 insignificant, as described in subpara6 graph (A)(iv)(II).

7 ‘‘(III) DEADLINE.—Criteria shall

8 first be established under this clause

9 by July 1, 2001. The Secretary may

10 establish in compelling circumstances

11 categories under this clause before the

12 date such criteria are established.

13 ‘‘(IV) ADDING CATEGORIES.—

14 The Secretary shall promptly establish

15 a new category of medical devices

16 under this clause for any medical de17 vice that meets the requirements of

18 subparagraph (A)(iv) and for which

19 none of the categories in effect (or

20 that were previously in effect) is ap21 propriate.

22 ‘‘(iii) PERIOD FOR WHICH CATEGORY

23 IS IN EFFECT.—A category of medical de24 vices established under clause (i) or clause

25 (ii) shall be in effect for a period of at
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1 least 2 years, but not more than 3 years,

2 that begins—

3 ‘‘(I) in the case of a category es4 tablished under clause (i), on the first

5 date on which payment was made

6 under this paragraph for any device

7 described by such category (including

8 payments made during the period be9 fore April 1, 2001); and

10 ‘‘(II) in the case of any other

11 category, on the first date on which

12 payment is made under this para13 graph for any medical device that is

14 described by such category.

15 ‘‘(iv) REQUIREMENTS TREATED AS

16 MET.—A medical device shall be treated as

17 meeting the requirements of subparagraph

18 (A)(iv) if—

19 ‘‘(I) the device is described by a

20 category established and in effect

21 under clause (i); or

22 ‘‘(II) the device is described by a

23 category established and in effect

24 under clause (ii) and an application

25 under section 515 of the Federal
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1 Food, Drug, and Cosmetic Act has

2 been approved with respect to the de3 vice, or the device has been cleared for

4 market under section 510(k) of such

5 Act, or the device is exempt from the

6 requirements of section 510(k) of

7 such Act pursuant to subsection (l) or

8 (m) of section 510 of such Act or sec9 tion 520(g) of such Act.

10 Nothing in this clause shall be construed

11 as requiring an application or prior ap12 proval (other than that described in sub13 clause (II)) in order for a covered device to

14 qualify for payment under this paragraph.

15 ‘‘(C) LIMITED PERIOD OF PAYMENT.—

16 ‘‘(i) DRUGS AND BIOLOGICALS.—The

17 payment under this paragraph with respect

18 to a drug or biological shall only apply dur19 ing a period of at least 2 years, but not

20 more than 3 years, that begins—

21 ‘‘(I) on the first date this sub22 section is implemented in the case of

23 a drug or biological described in

24 clause (i), (ii), or (iii) of subparagraph

25 (A) and in the case of a drug or bio-
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1 logical described in subparagraph

2 (A)(iv) and for which payment under

3 this part is made as an outpatient

4 hospital service before such first date;

5 or

6 ‘‘(II) in the case of a drug or bio7 logical described in subparagraph

8 (A)(iv) not described in subclause (I),

9 on the first date on which payment is

10 made under this part for the drug or

11 biological as an outpatient hospital

12 service.

13 ‘‘(ii) MEDICAL DEVICES.—Payment

14 shall be made under this paragraph with

15 respect to a medical device only if such

16 device—

17 ‘‘(I) is described by a category of

18 medical devices established and in ef19 fect under subparagraph (B); and

20 ‘‘(II) is provided as part of a

21 service (or group of services) paid for

22 under this subsection and provided

23 during the period for which such cat24 egory is in effect under such subpara25 graph.’’.
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1 (b) CONFORMING AMENDMENTS.—Section 1833(t)

2 (42 U.S.C. 1395l(t)) is further amended—

3 (1) in paragraph (6)(A)(iv)(II), by striking ‘‘the

4 cost of the device, drug, or biological’’ and inserting

5 ‘‘the cost of the drug or biological or the average

6 cost of the category of devices’’;

7 (2) in paragraph (6)(D) (as redesignated by

8 subsection (a)(1)), by striking ‘‘subparagraph

9 (D)(iii)’’ in the matter preceding clause (i) and in10 serting ‘‘subparagraph (E)(iii)’’; and

11 (3) in paragraph (12)(E), by striking ‘‘addi12 tional payments (consistent with paragraph (6)(B))’’

13 and inserting ‘‘additional payments, the determina14 tion and deletion of initial and new categories (con15 sistent with subparagraphs (B) and (C) of para16 graph (6))’’.

17 (c) EFFECTIVE DATE.—The amendments made by

18 this section take effect on the date of the enactment of

19 this Act.

20 (d) TRANSITION.—

21 (1) IN GENERAL.—In the case of a medical de22 vice provided as part of a service (or group of serv23 ices) furnished during the period before initial cat24 egories are implemented under subparagraph (B)(i)

25 of section 1833(t)(6) of the Social Security Act (as
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1 amended by subsection (a)), payment shall be made

2 for such device under such section in accordance

3 with the provisions in effect before the date of the

4 enactment of this Act, except that, beginning on the

5 date that is 30 days after the date of the enactment

6 of this Act, payment shall also be made for such a

7 device that is not included in a program memo8 randum described in such subparagraph if the Sec9 retary of Health and Human Services determines

10 that the device is likely to be described by such an

11 initial category or would have been included in such

12 program memoranda but for the requirement of sub13 paragraph (A)(iv)(I) of that section.

14 (2) APPLICATION OF CURRENT PROCESS.—Not15 withstanding any other provision of law, the Sec16 retary shall continue to accept applications with re17 spect to medical devices under the process estab18 lished pursuant to paragraph (6) of section 1833(t)

19 of the Social Security Act (as in effect on the day

20 before the date of the enactment of this Act)

21 through December 1, 2000, and any device—

22 (A) with respect to which an application

23 was submitted (pursuant to such process) on or

24 before such date; and
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1 (B) that meets the requirements of clause

2 (ii) or (iv) of subparagraph (A) of such para3 graph (as determined pursuant to such proc4 ess),

5 shall be treated as a device with respect to which an

6 initial category is required to be established under

7 subparagraph (B)(i) of such paragraph (as amended

8 by subsection (a)(2)).

9 SEC. 403. APPLICATION OF OPD PPS TRANSITIONAL COR10 RIDOR PAYMENTS TO CERTAIN HOSPITALS

11 THAT DID NOT SUBMIT A 1996 COST REPORT.

12 (a) IN GENERAL.—Section 1833(t)(7)(F)(ii)(I) (42

13 U.S.C. 1395l(t)(7)(F)(ii)(I)) is amended by inserting ‘‘(or

14 in the case of a hospital that did not submit a cost report

15 for such period, during the first subsequent cost reporting

16 period ending before 2001 for which the hospital sub17 mitted a cost report)’’ after ‘‘1996’’.

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

19 subsection (a) shall take effect as if included in the enact20 ment of BBRA.

21 SEC. 404. APPLICATION OF RULES FOR DETERMINING PRO22 VIDER-BASED STATUS FOR CERTAIN ENTI23 TIES.

24 (a) GRANDFATHER.—Notwithstanding any other pro25 vision of law, for purposes of making determinations of
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1 provider-based status under title XVIII of the Social Secu2 rity Act on or after October 1, 2000, any facility or organi3 zation that is treated as provider-based in relation to a

4 hospital or critical access hospital under such title as of

5 October 1, 2000—

6 (1) shall continue to be treated as provider7 based in relation to such hospital or critical access

8 hospital under such title during the 2-year period

9 beginning on October 1, 2000; and

10 (2) the requirements, limitations, and exclu11 sions specified in paragraphs (d), (e), (f), and (h) of

12 section 413.65 of title 42, Code of Federal Regula13 tions shall not apply to such facility or organization

14 in relation to such hospital or critical access hospital

15 until after the end of such 2-year period.

16 (b) TEMPORARY CRITERIA.—For purposes of title

17 XVIII of the Social Security Act—

18 (1) a facility or organization for which a deter19 mination of provider-based status in relation to a

20 hospital or critical access hospital is requested on or

21 after October 1, 2000, and before October 1, 2002,

22 may not be treated as not having provider-based sta23 tus in relation to such a hospital for any period be24 fore a determination is made with respect to such

25 status pursuant to such request; and
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1 (2) in making a determination with respect to

2 such status for any facility or organization in rela3 tionship to such a hospital on or after October 1,

4 2000, the following rules apply:

5 (A) The facility or organization shall be

6 treated as satisfying any requirements and

7 standards for geographic location in relation to

8 such a hospital if the facility or organization—

9 (i) satisfies the requirements of sec10 tion 413.65(d)(7) of title 42, Code of Fed11 eral Regulations; or

12 (ii) is located not more than 35 miles

13 from the main campus of the hospital or

14 critical access hospital.

15 (B) The facility or organization shall be

16 treated as satisfying any of the requirements

17 and standards for geographic location in rela18 tion to such a hospital if the facility or organi19 zation is owned and operated by a hospital or

20 critical access hospital that—

21 (i) is owned or operated by a unit of

22 State or local government, is a public or

23 private nonprofit corporation that is for24 mally granted governmental powers by a

25 unit of State or local government, or is a
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1 private hospital that has a contract with a

2 State or local government that includes the

3 operation of clinics located off the main

4 campus of the hospital to assure access in

5 a well-defined service area to health care

6 services for low-income individuals who are

7 not entitled to benefits under title XVIII

8 (or medical assistance under a State plan

9 under title XIX) of such Act; and

10 (ii) has a disproportionate share ad11 justment percentage (as determined under

12 section 1886(d)(5)(F) of such Act (42

13 U.S.C. 1395ww(d)(5)(F))) greater than

14 11.75 percent or is described in clause

15 (i)(II) of such section.

16 (c) DEFINITIONS.—For purposes of this section, the

17 terms ‘‘hospital’’ and ‘‘critical access hospital’’ have the

18 meanings given such terms in subsections (e) and

19 (mm)(1), respectively, of section 1861 of the Social Secu20 rity Act (42 U.S.C. 1395x).

21 SEC. 405. TREATMENT OF CHILDREN’S HOSPITALS UNDER

22 PROSPECTIVE PAYMENT SYSTEM.

23 (a) IN GENERAL.—Section 1833(t) (42 U.S.C.

24 1395l(t)) is amended—
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1 (1) in the heading of paragraph (7)(D)(ii), by

2 inserting ‘‘AND CHILDREN’S HOSPITALS’’ after ‘‘CAN3 CER HOSPITALS’’; and

4 (2) in paragraphs (7)(D)(ii) and (11), by strik5 ing ‘‘section 1886(d)(1)(B)(v)’’ and inserting

6 ‘‘clause (iii) or (v) of section 1886(d)(1)(B)’’.

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

8 subsection (a) apply as if included in the enactment of

9 section 202 of BBRA (113 Stat. 1501A–342).

10 SEC. 406. INCLUSION OF TEMPERATURE MONITORED

11 CRYOABLATION IN TRANSITIONAL PASS12 THROUGH FOR CERTAIN MEDICAL DEVICES,

13 DRUGS, AND BIOLOGICALS UNDER OPD PPS.

14 (a) IN GENERAL.—Section 1833(t)(6)(A)(ii) (42

15 U.S.C. 1395l(t)(6)(A)(ii)) is amended by inserting ‘‘or

16 temperature monitored cryoablation’’ after ‘‘device of

17 brachytherapy’’.

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

19 subsection (a) applies to devices furnished on or after

20 April 1, 2001.
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1 Subtitle B—Provisions Relating to

2 Physicians’ Services

3 SEC. 411. GAO STUDIES RELATING TO PHYSICIANS’ SERV4 ICES.

5 (a) STUDY OF SPECIALIST PHYSICIANS’ SERVICES

6 FURNISHED IN PHYSICIANS’ OFFICES AND HOSPITAL

7 OUTPATIENT DEPARTMENT SERVICES.—

8 (1) STUDY.—The Comptroller General of the

9 United States shall conduct a study to examine the

10 appropriateness of furnishing in physicians’ offices

11 specialist physicians’ services (such as gastro12 intestinal endoscopic physicians’ services) which are

13 ordinarily furnished in hospital outpatient depart14 ments. In conducting this study, the Comptroller

15 General shall—

16 (A) review available scientific and clinical

17 evidence about the safety of performing proce18 dures in physicians’ offices and hospital out19 patient departments;

20 (B) assess whether resource-based practice

21 expense relative values established by the Sec22 retary of Health and Human Services under the

23 medicare physician fee schedule under section

24 1848 of the Social Security Act (42 U.S.C.

25 1395w–4) for such specialist physicians’ serv-
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1 ices furnished in physicians’ offices and hospital

2 outpatient departments create an incentive to

3 furnish such services in physicians’ offices in4 stead of hospital outpatient departments; and

5 (C) assess the implications for access to

6 care for medicare beneficiaries if the medicare

7 program were not to cover such services in phy8 sicians’ offices.

9 (2) REPORT.—Not later than July 1, 2001, the

10 Comptroller General shall submit to Congress a re11 port on such study and include such recommenda12 tions as the Comptroller General determines to be

13 appropriate.

14 (b) STUDY OF THE RESOURCE-BASED PRACTICE EX15 PENSE SYSTEM.—

16 (1) STUDY.—The Comptroller General of the

17 United States shall conduct a study on the refine18 ments to the practice expense relative value units

19 during the transition to a resource-based practice ex20 pense system for physician payments under the

21 medicare program under title XVIII of the Social

22 Security Act. Such study shall examine how the Sec23 retary of Health and Human Services has accepted

24 and used the practice expense data submitted under

25 section 212 of BBRA (113 Stat. 1501A–350).
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1 (2) REPORT.—Not later than July 1, 2001, the

2 Comptroller General shall submit to Congress a re3 port on the study conducted under paragraph (1) to4 gether with recommendations regarding—

5 (A) improvements in the process for ac6 ceptance and use of practice expense data

7 under section 212 of BBRA;

8 (B) any change or adjustment that is ap9 propriate to ensure full access to a spectrum of

10 care for beneficiaries under the medicare pro11 gram; and

12 (C) the appropriateness of payments to

13 physicians.

14 SEC. 412. PHYSICIAN GROUP PRACTICE DEMONSTRATION.

15 (a) IN GENERAL.—Title XVIII is amended by insert16 ing after section 1866 the following new sections:

17 ‘‘DEMONSTRATION OF APPLICATION OF PHYSICIAN

18 VOLUME INCREASES TO GROUP PRACTICES

19 ‘‘SEC. 1866A. (a) DEMONSTRATION PROGRAM AU20 THORIZED.—

21 ‘‘(1) IN GENERAL.—The Secretary shall con22 duct demonstration projects to test and, if proven ef23 fective, expand the use of incentives to health care

24 groups participating in the program under this title

25 that—
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1 ‘‘(A) encourage coordination of the care

2 furnished to individuals under the programs

3 under parts A and B by institutional and other

4 providers, practitioners, and suppliers of health

5 care items and services;

6 ‘‘(B) encourage investment in administra7 tive structures and processes to ensure efficient

8 service delivery; and

9 ‘‘(C) reward physicians for improving

10 health outcomes.

11 Such projects shall focus on the efficiencies of fur12 nishing health care in a group-practice setting as

13 compared to the efficiencies of furnishing health care

14 in other health care delivery systems.

15 ‘‘(2) ADMINISTRATION BY CONTRACT.—Except

16 as otherwise specifically provided, the Secretary may

17 administer the program under this section in accord18 ance with section 1866B.

19 ‘‘(3) DEFINITIONS.—For purposes of this sec20 tion, terms have the following meanings:

21 ‘‘(A) PHYSICIAN.—Except as the Secretary

22 may otherwise provide, the term ‘physician’

23 means any individual who furnishes services

24 which may be paid for as physicians’ services

25 under this title.
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1 ‘‘(B) HEALTH CARE GROUP.—The term

2 ‘health care group’ means a group of physicians

3 (as defined in subparagraph (A)) organized at

4 least in part for the purpose of providing physi5 cians’ services under this title. As the Secretary

6 finds appropriate, a health care group may in7 clude a hospital and any other individual or en8 tity furnishing items or services for which pay9 ment may be made under this title that is affili10 ated with the health care group under an ar11 rangement structured so that such individual or

12 entity participates in a demonstration under

13 this section and will share in any bonus earned

14 under subsection (d).

15 ‘‘(b) ELIGIBILITY CRITERIA.—

16 ‘‘(1) IN GENERAL.—The Secretary is authorized

17 to establish criteria for health care groups eligible to

18 participate in a demonstration under this section, in19 cluding criteria relating to numbers of health care

20 professionals in, and of patients served by, the

21 group, scope of services provided, and quality of

22 care.

23 ‘‘(2) PAYMENT METHOD.—A health care group

24 participating in the demonstration under this section

25 shall agree with respect to services furnished to
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•HR 5601 IH

1 beneficiaries within the scope of the demonstration

2 (as determined under subsection (c))—

3 ‘‘(A) to be paid on a fee-for-service basis;

4 and

5 ‘‘(B) that payment with respect to all such

6 services furnished by members of the health

7 care group to such beneficiaries shall (where de8 termined appropriate by the Secretary) be made

9 to a single entity.

10 ‘‘(3) DATA REPORTING.—A health care group

11 participating in a demonstration under this section

12 shall report to the Secretary such data, at such

13 times and in such format as the Secretary requires,

14 for purposes of monitoring and evaluation of the

15 demonstration under this section.

16 ‘‘(c) PATIENTS WITHIN SCOPE OF DEMONSTRA17 TION.—

18 ‘‘(1) IN GENERAL.—The Secretary shall specify,

19 in accordance with this subsection, the criteria for

20 identifying those patients of a health care group who

21 shall be considered within the scope of the dem22 onstration under this section for purposes of applica23 tion of subsection (d) and for assessment of the ef24 fectiveness of the group in achieving the objectives

25 of this section.
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1 ‘‘(2) OTHER CRITERIA.—The Secretary may es2 tablish additional criteria for inclusion of bene3 ficiaries within a demonstration under this section,

4 which may include frequency of contact with physi5 cians in the group or other factors or criteria that

6 the Secretary finds to be appropriate.

7 ‘‘(3) NOTICE REQUIREMENTS.—In the case of

8 each beneficiary determined to be within the scope

9 of a demonstration under this section with respect to

10 a specific health care group, the Secretary shall en11 sure that such beneficiary is notified of the incen12 tives, and of any waivers of coverage or payment

13 rules, applicable to such group under such dem14 onstration.

15 ‘‘(d) INCENTIVES.—

16 ‘‘(1) PERFORMANCE TARGET.—The Secretary

17 shall establish for each health care group partici18 pating in a demonstration under this section—

19 ‘‘(A) a base expenditure amount, equal to

20 the average total payments under parts A and

21 B for patients served by the health care group

22 on a fee-for-service basis in a base period deter23 mined by the Secretary; and

24 ‘‘(B) an annual per capita expenditure tar25 get for patients determined to be within the
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1 scope of the demonstration, reflecting the base

2 expenditure amount adjusted for risk and ex3 pected growth rates.

4 ‘‘(2) INCENTIVE BONUS.—The Secretary shall

5 pay to each participating health care group (subject

6 to paragraph (4)) a bonus for each year under the

7 demonstration equal to a portion of the medicare

8 savings realized for such year relative to the per9 formance target.

10 ‘‘(3) ADDITIONAL BONUS FOR PROCESS AND

11 OUTCOME IMPROVEMENTS.—At such time as the

12 Secretary has established appropriate criteria based

13 on evidence the Secretary determines to be suffi14 cient, the Secretary shall also pay to a participating

15 health care group (subject to paragraph (4)) an ad16 ditional bonus for a year, equal to such portion as

17 the Secretary may designate of the saving to the

18 program under this title resulting from process im19 provements made by and patient outcome improve20 ments attributable to activities of the group.

21 ‘‘(4) LIMITATION.—The Secretary shall limit

22 bonus payments under this section as necessary to

23 ensure that the aggregate expenditures under this

24 title (inclusive of bonus payments) with respect to

25 patients within the scope of the demonstration do
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1 not exceed the amount which the Secretary esti2 mates would be expended if the demonstration

3 projects under this section were not implemented.

4 ‘‘PROVISIONS FOR ADMINISTRATION OF DEMONSTRATION

5 PROGRAM

6 ‘‘SEC. 1866B. (a) GENERAL ADMINISTRATIVE AU7 THORITY.—

8 ‘‘(1) BENEFICIARY ELIGIBILITY.—Except as

9 otherwise provided by the Secretary, an individual

10 shall only be eligible to receive benefits under the

11 program under section 1866A (in this section re12 ferred to as the ‘demonstration program’) if such

13 individual—

14 ‘‘(A) is enrolled in under the program

15 under part B and entitled to benefits under

16 part A; and

17 ‘‘(B) is not enrolled in a Medicare+Choice

18 plan under part C, an eligible organization

19 under a contract under section 1876 (or a simi20 lar organization operating under a demonstra21 tion project authority), an organization with an

22 agreement under section 1833(a)(1)(A), or a

23 PACE program under section 1894.

24 ‘‘(2) SECRETARY’S DISCRETION AS TO SCOPE

25 OF PROGRAM.—The Secretary may limit the imple26 mentation of the demonstration program to—
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1 ‘‘(A) a geographic area (or areas) that the

2 Secretary designates for purposes of the pro3 gram, based upon such criteria as the Secretary

4 finds appropriate;

5 ‘‘(B) a subgroup (or subgroups) of bene6 ficiaries or individuals and entities furnishing

7 items or services (otherwise eligible to partici8 pate in the program), selected on the basis of

9 the number of such participants that the Sec10 retary finds consistent with the effective and ef11 ficient implementation of the program;

12 ‘‘(C) an element (or elements) of the pro13 gram that the Secretary determines to be suit14 able for implementation; or

15 ‘‘(D) any combination of any of the limits

16 described in subparagraphs (A) through (C).

17 ‘‘(3) VOLUNTARY RECEIPT OF ITEMS AND

18 SERVICES.—Items and services shall be furnished to

19 an individual under the demonstration program only

20 at the individual’s election.

21 ‘‘(4) AGREEMENTS.—The Secretary is author22 ized to enter into agreements with individuals and

23 entities to furnish health care items and services to

24 beneficiaries under the demonstration program.
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1 ‘‘(5) PROGRAM STANDARDS AND CRITERIA.—

2 The Secretary shall establish performance standards

3 for the demonstration program including, as applica4 ble, standards for quality of health care items and

5 services, cost-effectiveness, beneficiary satisfaction,

6 and such other factors as the Secretary finds appro7 priate. The eligibility of individuals or entities for

8 the initial award, continuation, and renewal of

9 agreements to provide health care items and services

10 under the program shall be conditioned, at a min11 imum, on performance that meets or exceeds such

12 standards.

13 ‘‘(6) ADMINISTRATIVE REVIEW OF DECISIONS

14 AFFECTING INDIVIDUALS AND ENTITIES FUR15 NISHING SERVICES.—An individual or entity fur16 nishing services under the demonstration program

17 shall be entitled to a review by the program adminis18 trator (or, if the Secretary has not contracted with

19 a program administrator, by the Secretary) of a de20 cision not to enter into, or to terminate, or not to

21 renew, an agreement with the entity to provide

22 health care items or services under the program.

23 ‘‘(7) SECRETARY’S REVIEW OF MARKETING MA24 TERIALS.—An agreement with an individual or enti25 ty furnishing services under the demonstration pro-
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1 gram shall require the individual or entity to guar2 antee that it will not distribute materials that mar3 ket items or services under the program without the

4 Secretary’s prior review and approval.

5 ‘‘(8) PAYMENT IN FULL.—

6 ‘‘(A) IN GENERAL.—Except as provided in

7 subparagraph (B), an individual or entity re8 ceiving payment from the Secretary under a

9 contract or agreement under the demonstration

10 program shall agree to accept such payment as

11 payment in full, and such payment shall be in

12 lieu of any payments to which the individual or

13 entity would otherwise be entitled under this

14 title.

15 ‘‘(B) COLLECTION OF DEDUCTIBLES AND

16 COINSURANCE.—Such individual or entity may

17 collect any applicable deductible or coinsurance

18 amount from a beneficiary.

19 ‘‘(b) CONTRACTS FOR PROGRAM ADMINISTRATION.—

20 ‘‘(1) IN GENERAL.—The Secretary may admin21 ister the demonstration program through a contract

22 with a program administrator in accordance with the

23 provisions of this subsection.

24 ‘‘(2) SCOPE OF PROGRAM ADMINISTRATOR CON25 TRACTS.—The Secretary may enter into such con-
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•HR 5601 IH

1 tracts for a limited geographic area, or on a regional

2 or national basis.

3 ‘‘(3) ELIGIBLE CONTRACTORS.—The Secretary

4 may contract for the administration of the program

5 with—

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

7 under section 1816 or 1842, determines the

8 amount of and makes payments for health care

9 items and services furnished under this title; or

10 ‘‘(B) any other entity with substantial ex11 perience in managing the type of program con12 cerned.

13 ‘‘(4) CONTRACT AWARD, DURATION, AND RE14 NEWAL.—

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

16 subsection shall be for an initial term of up to

17 three years, renewable for additional terms of

18 up to three years.

19 ‘‘(B) NONCOMPETITIVE AWARD AND RE20 NEWAL FOR ENTITIES ADMINISTERING PART A

21 OR PART B PAYMENTS.—The Secretary may

22 enter or renew a contract under this subsection

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

24 without regard to the requirements of section 5

25 of title 41, United States Code.
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1 ‘‘(5) APPLICABILITY OF FEDERAL ACQUISITION

2 REGULATION.—The Federal Acquisition Regulation

3 shall apply to program administration contracts

4 under this subsection.

5 ‘‘(6) PERFORMANCE STANDARDS.—The Sec6 retary shall establish performance standards for the

7 program administrator including, as applicable,

8 standards for the quality and cost-effectiveness of

9 the program administered, and such other factors as

10 the Secretary finds appropriate. The eligibility of en11 tities for the initial award, continuation, and renewal

12 of program administration contracts shall be condi13 tioned, at a minimum, on performance that meets or

14 exceeds such standards.

15 ‘‘(7) FUNCTIONS OF PROGRAM ADMINIS16 TRATOR.—A program administrator shall perform

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

18 the Secretary:

19 ‘‘(A) AGREEMENTS WITH ENTITIES FUR20 NISHING HEALTH CARE ITEMS AND SERV21 ICES.—Determine the qualifications of entities

22 seeking to enter or renew agreements to provide

23 services under the demonstration program, and

24 as appropriate enter or renew (or refuse to
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1 enter or renew) such agreements on behalf of

2 the Secretary.

3 ‘‘(B) ESTABLISHMENT OF PAYMENT

4 RATES.—Negotiate or otherwise establish, sub5 ject to the Secretary’s approval, payment rates

6 for covered health care items and services.

7 ‘‘(C) PAYMENT OF CLAIMS OR FEES.—Ad8 minister payments for health care items or serv9 ices furnished under the program.

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

11 guidelines as the Secretary shall establish, and

12 subject to the approval of the Secretary, make

13 bonus payments as described in subsection

14 (c)(2)(A)(ii) to entities furnishing items or serv15 ices for which payment may be made under the

16 program.

17 ‘‘(E) OVERSIGHT.—Monitor the compli18 ance of individuals and entities with agreements

19 under the program with the conditions of par20 ticipation.

21 ‘‘(F) ADMINISTRATIVE REVIEW.—Conduct

22 reviews of adverse determinations specified in

23 subsection (a)(6).

24 ‘‘(G) REVIEW OF MARKETING MATE25 RIALS.—Conduct a review of marketing mate-
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•HR 5601 IH

1 rials proposed by an entity furnishing services

2 under the program.

3 ‘‘(H) ADDITIONAL FUNCTIONS.—Perform

4 such other functions as the Secretary may

5 specify.

6 ‘‘(8) LIMITATION OF LIABILITY.—The provi7 sions of section 1157(b) shall apply with respect to

8 activities of contractors and their officers, employ9 ees, and agents under a contract under this sub10 section.

11 ‘‘(9) INFORMATION SHARING.—Notwithstanding

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

13 States Code, the Secretary is authorized to disclose

14 to an entity with a program administration contract

15 under this subsection such information (including

16 medical information) on individuals receiving health

17 care items and services under the program as the

18 entity may require to carry out its responsibilities

19 under the contract.

20 ‘‘(c) RULES APPLICABLE TO BOTH PROGRAM

21 AGREEMENTS AND PROGRAM ADMINISTRATION CON22 TRACTS.—

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

24 Secretary is authorized to require entities with

25 agreements to provide health care items or services
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1 under the demonstration program, and entities with

2 program administration contracts under subsection

3 (b), to maintain adequate records, to afford the Sec4 retary access to such records (including for audit

5 purposes), and to furnish such reports and other

6 materials (including audited financial statements

7 and performance data) as the Secretary may require

8 for purposes of implementation, oversight, and eval9 uation of the program and of individuals’ and enti10 ties’ effectiveness in performance of such agreements

11 or contracts.

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

13 provision of law, but subject to subparagraph

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

15 under the demonstration program from the Federal

16 Health Insurance Trust Fund and the Federal Sup17 plementary Medical Insurance Trust Fund in

18 amounts that do not exceed the amounts authorized

19 under the program in accordance with the following:

20 ‘‘(A) PAYMENTS TO PROGRAM ADMINIS21 TRATORS.—The Secretary may make bonus

22 payments under the program to program ad23 ministrators.

24 ‘‘(B) PAYMENTS TO ENTITIES FURNISHING

25 SERVICES.—
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•HR 5601 IH

1 ‘‘(i) IN GENERAL.—Subject to clause

2 (ii), the Secretary may make bonus pay3 ments to individuals or entities furnishing

4 items or services for which payment may

5 be made under the demonstration pro6 gram, or may authorize the program ad7 ministrator to make such bonus payments

8 in accordance with such guidelines as the

9 Secretary shall establish and subject to the

10 Secretary’s approval.

11 ‘‘(ii) LIMITATIONS.—The Secretary

12 may condition such payments on the

13 achievement of such standards related to

14 efficiency, improvement in processes or

15 outcomes of care, or such other factors as

16 the Secretary determines to be appropriate.

17 ‘‘(3) ANTIDISCRIMINATION LIMITATION.—The

18 Secretary shall not enter into an agreement with an

19 entity to provide health care items or services under

20 the demonstration program, or with an entity to ad21 minister the program, unless such entity guarantees

22 that it will not deny, limit, or condition the coverage

23 or provision of benefits under the program, for indi24 viduals eligible to be enrolled under such program,

25 based on any health status-related factor described
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1 in section 2702(a)(1) of the Public Health Service

2 Act.

3 ‘‘(d) LIMITATIONS ON JUDICIAL REVIEW.—The fol4 lowing actions and determinations with respect to the

5 demonstration program shall not be subject to review by

6 a judicial or administrative tribunal:

7 ‘‘(1) Limiting the implementation of the pro8 gram under subsection (a)(2).

9 ‘‘(2) Establishment of program participation

10 standards under subsection (a)(5) or the denial or

11 termination of, or refusal to renew, an agreement

12 with an entity to provide health care items and serv13 ices under the program.

14 ‘‘(3) Establishment of program administration

15 contract performance standards under subsection

16 (b)(6), the refusal to renew a program administra17 tion contract, or the noncompetitive award or re18 newal of a program administration contract under

19 subsection (b)(4)(B).

20 ‘‘(5) Establishment of payment rates, through

21 negotiation or otherwise, under a program agree22 ment or a program administration contract.

23 ‘‘(6) A determination with respect to the pro24 gram (where specifically authorized by the program

25 authority or by subsection (c)(2))—
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1 ‘‘(A) as to whether cost savings have been

2 achieved, and the amount of savings; or

3 ‘‘(B) as to whether, to whom, and in what

4 amounts bonuses will be paid.

5 ‘‘(e) APPLICATION LIMITED TO PARTS A AND B.—

6 None of the provisions of this section or of the demonstra7 tion program shall apply to the programs under part C.

8 ‘‘(f) REPORTS TO CONGRESS.—Not later than two

9 years after the date of the enactment of this section, and

10 biennially thereafter for six years, the Secretary shall re11 port to Congress on the use of authorities under the dem12 onstration program. Each report shall address the impact

13 of the use of those authorities on expenditures, access, and

14 quality under the programs under this title.’’.

15 (b) GAO REPORT.—Not later than 2 years after the

16 date on which the demonstration project under section

17 1866A of the Social Security Act, as added by subsection

18 (a), is implemented, the Comptroller General of the United

19 States shall submit to Congress a report on such dem20 onstration project. The report shall include such rec21 ommendations with respect to changes to the demonstra22 tion project that the Comptroller General determines ap23 propriate.
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1 SEC. 413. STUDY ON ENROLLMENT PROCEDURES FOR

2 GROUPS THAT RETAIN INDEPENDENT CON3 TRACTOR PHYSICIANS.

4 (a) IN GENERAL.—The Comptroller General of the

5 United States shall conduct a study of the current medi6 care enrollment process for groups that retain independent

7 contractor physicians with particular emphasis on hos8 pital-based physicians, such as emergency department

9 staffing groups. In conducting the evaluation, the Comp10 troller General shall consult with groups that retain inde11 pendent contractor physicians and shall—

12 (1) review the issuance of individual medicare

13 provider numbers and the possible medicare program

14 integrity vulnerabilities of the current process;

15 (2) review direct and indirect costs associated

16 with the current process incurred by the medicare

17 program and groups that retain independent con18 tractor physicians;

19 (3) assess the effect on program integrity by

20 the enrollment of groups that retain independent

21 contractor hospital-based physicians; and

22 (4) develop suggested procedures for the enroll23 ment of these groups.

24 (b) REPORT.—Not later than 1 year after the date

25 of the enactment of this Act, the Comptroller General shall
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1 submit to Congress a report on the study conducted under

2 subsection (a).

3 Subtitle C—Other Services

4 SEC. 421. 1-YEAR EXTENSION OF MORATORIUM ON THER5 APY CAPS; REPORT ON STANDARDS FOR SU6 PERVISION OF PHYSICAL THERAPY ASSIST7 ANTS.

8 (a) IN GENERAL.—Section 1833(g)(4) (42 U.S.C.

9 1395l(g)(4)) is amended by striking ‘‘2000 and 2001.’’

10 and inserting ‘‘2000, 2001, and 2002.’’.

11 (b) CONFORMING AMENDMENT TO CONTINUE FO12 CUSED MEDICAL REVIEWS OF CLAIMS DURING MORATO13 RIUM PERIOD.—Section 221(a)(2) of BBRA (113 Stat.

14 1501A–351) is amended by striking ‘‘(under the amend15 ment made by paragraph (1)(B))’’.

16 (c) STUDY ON STANDARDS FOR SUPERVISION OF

17 PHYSICAL THERAPIST ASSISTANTS.—

18 (1) STUDY.—The Secretary of Health and

19 Human Services shall conduct a study of the

20 implications—

21 (A) of eliminating the ‘‘in the room’’ su22 pervision requirement for medicare payment for

23 services of physical therapy assistants who are

24 supervised by physical therapists; and
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1 (B) of such requirement on the cap im2 posed under section 1833(g) of the Social Secu3 rity Act (42 U.S.C. 1395l(g)) on physical ther4 apy services.

5 (2) REPORT.—Not later than 18 months after

6 the date of the enactment of this Act, the Secretary

7 shall submit to Congress a report on the study con8 ducted under paragraph (1).

9 SEC. 422. UPDATE IN RENAL DIALYSIS COMPOSITE RATE.

10 (a) UPDATE.—

11 (1) IN GENERAL.—The last sentence of section

12 1881(b)(7) (42 U.S.C. 1395rr(b)(7)) is amended by

13 striking ‘‘for such services furnished on or after

14 January 1, 2001, by 1.2 percent’’ and inserting ‘‘for

15 such services furnished on or after January 1, 2001,

16 by 2.4 percent’’.

17 (2) PROHIBITION ON EXEMPTIONS.—

18 (A) IN GENERAL.—Subject to subpara19 graph (B), the Secretary of Health and Human

20 Services may not provide for an exception under

21 section 1881(b)(7) of the Social Security Act

22 (42 U.S.C. 1395rr(b)(7)) on or after December

23 31, 2000.

24 (B) SPECIAL RULES FOR 2000.—
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1 (i) IN GENERAL.—Any exemption rate

2 under such section 1881(b)(7) in effect on

3 December 31, 2000, shall continue in ef4 fect so long as such rate is greater than

5 the composite rate as updated by the

6 amendment made by paragraph (1).

7 (ii) RESUBMISSION OF CERTAIN AP8 PLICATIONS.—In the case of an application

9 for an exemption rate under such section

10 that was filed by a facility during 2000

11 that was not approved by the Secretary of

12 Health and Human Services, the facility

13 may submit an application for an exemp14 tion rate for that year by not later than

15 July 1, 2001.

16 (b) DEVELOPMENT OF ESRD MARKET BASKET.—

17 (1) DEVELOPMENT.—The Secretary of Health

18 and Human Services shall collect data and develop

19 an ESRD market basket whereby the Secretary can

20 estimate, before the beginning of a year, the percent21 age by which the costs for the year of the mix of

22 labor and nonlabor goods and services included in

23 the ESRD composite rate under section 1881(b)(7)

24 of the Social Security Act (42 U.S.C. 1395rr(b)(7))

25 will exceed the costs of such mix of goods and serv-
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1 ices for the preceding year. In developing such index,

2 the Secretary may take into account measures of

3 changes in—

4 (A) technology used in furnishing dialysis

5 services;

6 (B) the manner or method of furnishing

7 dialysis services; and

8 (C) the amounts by which the payments

9 under such section for all services billed by a

10 facility for a year exceed the aggregate allow11 able audited costs of such services for such fa12 cility for such year.

13 (2) REPORT.—The Secretary of Health and

14 Human Services shall submit to Congress a report

15 on the index developed under paragraph (1) no later

16 than July 1, 2002, and shall include in the report

17 recommendations on the appropriateness of an an18 nual or periodic update mechanism for renal dialysis

19 services under the medicare program under title

20 XVIII of the Social Security Act based on such

21 index.

22 (c) INCLUSION OF ADDITIONAL SERVICES IN COM23 POSITE RATE.—

24 (1) DEVELOPMENT.—The Secretary of Health

25 and Human Services shall develop a system which
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1 includes, to the maximum extent feasible, in the

2 composite rate used for payment under section

3 1881(b)(7) of the Social Security Act (42 U.S.C.

4 1395rr(b)(7)), payment for clinical diagnostic lab5 oratory tests and drugs (including drugs paid under

6 section 1881(b)(11)(B) of such Act (42 U.S.C.

7 1395rr(b)(11)(B)) that are routinely used in fur8 nishing dialysis services to medicare beneficiaries but

9 which are currently separately billable by renal dialy10 sis facilities.

11 (2) REPORT.—The Secretary shall include, as

12 part of the report submitted under subsection (b)(2),

13 a report on the system developed under paragraph

14 (1) and recommendations on the appropriateness of

15 incorporating the system into medicare payment for

16 renal dialysis services.

17 (d) GAO STUDY ON ACCESS TO SERVICES.—

18 (1) STUDY.—The Comptroller General of the

19 United States shall study access of medicare bene20 ficiaries to renal dialysis services. Such study shall

21 include whether there is a sufficient supply of facili22 ties to furnish needed renal dialysis services, whether

23 medicare payment levels are appropriate, taking into

24 account audited costs of facilities for all services fur25 nished, to ensure continued access to such services,
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1 and improvements in access (and quality of care)

2 that may result in the increased use of long nightly

3 and short daily hemodialysis modalities.

4 (2) REPORT.—Not later than January 1, 2003,

5 the Comptroller General shall submit to Congress a

6 report on the study conducted under paragraph (1).

7 SEC. 423. PAYMENT FOR AMBULANCE SERVICES.

8 (a) RESTORATION OF FULL CPI INCREASE FOR

9 2001.—Section 1834(l)(3) (42 U.S.C. 1395m(l)(3)) is

10 amended by striking ‘‘reduced in the case of 2001 and

11 2002’’ each place it appears and inserting ‘‘reduced in the

12 case of 2002’’.

13 (b) MILEAGE PAYMENTS.—Section 1834(l)(2)(E)

14 (42 U.S.C. 1395m(l)(2)(E)) is amended by inserting be15 fore the period at the end the following: ‘‘, except that,

16 beginning on the date on which the Secretary implements

17 such fee schedule, such phase-in shall provide for full pay18 ment of any national mileage rate for ambulance services

19 provided by suppliers that are paid by carriers in any of

20 the 50 States where payment by a carrier for such services

21 for all such suppliers in such State did not, prior to the

22 implementation of the fee schedule, include a separate

23 amount for all mileage within the county from which the

24 beneficiary is transported’’.
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1 (c) EFFECTIVE DATE.—The amendment made by

2 subsection (a) applies to services furnished on or after the

3 date on which the Secretary of Health and Human Serv4 ices implements the fee schedule under section 1834(l) of

5 the Social Security Act (42 U.S.C. 1395m(l)).

6 SEC. 424. AMBULATORY SURGICAL CENTERS.

7 (a) DELAY IN IMPLEMENTATION OF PROSPECTIVE

8 PAYMENT SYSTEM.—The Secretary of Health and Human

9 Services may not implement a revised prospective payment

10 system for services of ambulatory surgical facilities under

11 section 1833(i) of the Social Security Act (42 U.S.C.

12 1395l(i)) before January 1, 2002.

13 (b) EXTENDING PHASE-IN TO 4 YEARS.—Section

14 226 of the BBRA (113 Stat. 1501A–354) is amended by

15 striking paragraphs (1) and (2) and inserting the fol16 lowing:

17 ‘‘(1) in the first year of its implementation,

18 only a proportion (specified by the Secretary and not

to exceed 1 19 ⁄4) of the payment for such services shall

20 be made in accordance with such system and the re21 mainder shall be made in accordance with current

22 regulations; and

23 ‘‘(2) in each of the following 2 years a propor24 tion (specified by the Secretary and not to exceed

1⁄2, and 3 25 ⁄4, respectively) of the payment for such
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1 services shall be made under such system and the

2 remainder shall be made in accordance with current

3 regulations.’’.

4 (c) DEADLINE FOR USE OF 1999 OR LATER COST

5 SURVEYS.—Section 226 of BBRA (113 Stat. 1501A–354)

6 is amended by adding at the end the following:

7 ‘‘By not later than January 1, 2003, the Secretary shall

8 incorporate data from a 1999 medicare cost survey or a

9 subsequent cost survey for purposes of implementing or

10 revising such system.’’.

11 SEC. 425. FULL UPDATE FOR DURABLE MEDICAL EQUIP12 MENT.

13 (a) IN GENERAL.—Section 1834(a)(14) (42 U.S.C.

14 1395m(a)(14)) is amended—

15 (1) by redesignating subparagraph (D) as sub16 paragraph (F);

17 (2) in subparagraph (C)—

18 (A) by striking ‘‘through 2002’’ and insert19 ing ‘‘through 2000’’; and

20 (B) by striking ‘‘and’’ at the end; and

21 (3) by inserting after subparagraph (C) the fol22 lowing new subparagraphs:

23 ‘‘(D) for 2001, the percentage increase in

24 the Consumer Price Index for all urban con-
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1 sumers (U.S. city average) for the 12-month

2 period ending with June 2000;

3 ‘‘(E) for 2002, 0 percentage points; and’’.

4 (b) CONFORMING AMENDMENTS TO BBRA.—Sub5 section (a) of section 228 of BBRA (113 Stat. 1501A–

6 356) is amended—

7 (1) in the matter preceding paragraph (1), by

8 striking ‘‘for such items’’;

9 (2) in paragraph (1), by inserting ‘‘oxygen and

10 oxygen equipment for’’ after ‘‘(1)’’; and

11 (3) in paragraph (2), by inserting ‘‘all such cov12 ered items for’’ after ‘‘(2)’’.

13 (c) EFFECTIVE DATE.—The amendments made by

14 subsection (b) shall take effect as if included in the enact15 ment of BBRA.

16 SEC. 426. FULL UPDATE FOR ORTHOTICS AND PROS17 THETICS.

18 Section 1834(h)(4)(A) (42 U.S.C. 1395m(h)(4)(A))

19 is amended—

20 (1) by redesignating clause (vi) as clause (viii);

21 (2) in clause (v)—

22 (A) by striking ‘‘through 2002’’ and insert23 ing ‘‘through 2000’’; and

24 (B) by striking ‘‘and’’ at the end; and
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1 (3) by inserting after clause (v) the following

2 new clause:

3 ‘‘(vi) for 2001, the percentage in4 crease in the consumer price index for all

5 urban consumers (U.S. city average) for

6 the 12-month period ending with June

7 2000;

8 ‘‘(vii) for 2002, 1 percent; and’’.

9 SEC. 427. ESTABLISHMENT OF SPECIAL PAYMENT PROVI10 SIONS AND REQUIREMENTS FOR PROS11 THETICS AND CERTAIN CUSTOM FABRICATED

12 ORTHOTIC ITEMS.

13 (a) IN GENERAL.—Section 1834(h)(1) (42 U.S.C.

14 1395m(h)(1)) is amended by adding at the end the fol15 lowing:

16 ‘‘(F) SPECIAL PAYMENT RULES FOR CER17 TAIN PROSTHETICS AND CUSTOM FABRICATED

18 ORTHOTICS.—

19 ‘‘(i) IN GENERAL.—No payment shall

20 be made under this subsection for an item

21 of custom fabricated orthotics described in

22 clause (ii) or for an item of prosthetics un23 less such item is—

24 ‘‘(I) furnished by a qualified

25 practitioner; and
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1 ‘‘(II) fabricated by a qualified

2 practitioner or a qualified supplier at

3 a facility that meets such criteria as

4 the Secretary determines appropriate.

5 ‘‘(ii) DESCRIPTION OF CUSTOM FAB6 RICATED ITEM.—

7 ‘‘(I) IN GENERAL.—An item de8 scribed in this clause is an item of

9 custom fabricated orthotics that re10 quires education, training, and experi11 ence to custom fabricate and that is

12 included in a list established by the

13 Secretary in subclause (II). Such an

14 item does not include shoes and shoe

15 inserts.

16 ‘‘(II) LIST OF ITEMS.—The Sec17 retary, in consultation with appro18 priate experts in orthotics (including

19 national organizations representing

20 manufacturers of orthotics), shall es21 tablish and update as appropriate a

22 list of items to which this subpara23 graph applies. No item may be in24 cluded in such list unless the item is
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1 individually fabricated for the patient

2 over a positive model of the patient.

3 ‘‘(iii) QUALIFIED PRACTITIONER DE4 FINED.—In this subparagraph, the term

5 ‘qualified practitioner’ means a physician

6 or other individual who—

7 ‘‘(I) is a qualified physical thera8 pist or a qualified occupational thera9 pist;

10 ‘‘(II) in the case of a State that

11 provides for the licensing of orthotics

12 and prosthetics, is licensed in

13 orthotics or prosthetics by the State

14 in which the item is supplied; or

15 ‘‘(III) in the case of a State that

16 does not provide for the licensing of

17 orthotics and prosthetics, is specifi18 cally trained and educated to provide

19 or manage the provision of prosthetics

20 and custom-designed or fabricated

21 orthotics, and is certified by the

22 American Board for Certification in

23 Orthotics and Prosthetics, Inc. or by

24 the Board for Orthotist/Prosthetist

25 Certification, or is credentialed and
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1 approved by a program that the Sec2 retary determines, in consultation

3 with appropriate experts in orthotics

4 and prosthetics, has training and edu5 cation standards that are necessary to

6 provide such prosthetics and orthotics.

7 ‘‘(iv) QUALIFIED SUPPLIER DE8 FINED.—In this subparagraph, the term

9 ‘qualified supplier’ means any entity that

10 is accredited by the American Board for

11 Certification in Orthotics and Prosthetics,

12 Inc. or by the Board for Orthotist/Pros13 thetist Certification, or accredited and ap14 proved by a program that the Secretary

15 determines has accreditation and approval

16 standards that are essentially equivalent to

17 those of such Board.’’.

18 (b) EFFECTIVE DATE.—Not later than 1 year after

19 the date of the enactment of this Act, the Secretary of

20 Health and Human Services shall promulgate revised reg21 ulations to carry out the amendment made by subsection

22 (a) using a negotiated rulemaking process under sub23 chapter III of chapter 5 of title 5, United States Code.

24 (c) GAO STUDY AND REPORT.—
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1 (1) STUDY.—The Comptroller General of the

2 United States shall conduct a study on HCFA Rul3 ing 96–1, issued on September 1, 1996, with respect

4 to distinguishing orthotics from durable medical

5 equipment under the medicare program under title

6 XVIII of the Social Security Act. The study shall as7 sess the following matters:

8 (A) The compliance of the Secretary of

9 Health and Human Services with the Adminis10 trative Procedures Act (under chapter 5 of title

11 5, United States Code) in making such ruling.

12 (B) The potential impact of such ruling on

13 the health care furnished to medicare bene14 ficiaries under the medicare program, especially

15 those beneficiaries with degenerative musculo16 skeletal conditions.

17 (C) The potential for fraud and abuse

18 under the medicare program if payment were

19 provided for orthotics used as a component of

20 durable medical equipment only when made

21 under the special payment provision for certain

22 prosthetics and custom fabricated orthotics

23 under section 1834(h)(1)(F) of the Social Secu24 rity Act, as added by subsection (a) and fur-
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1 nished by qualified practitioners under that sec2 tion.

3 (D) The impact on payments under titles

4 XVIII and XIX of the Social Security Act if

5 such ruling were overturned.

6 (2) REPORT.—Not later than 6 months after

7 the date of the enactment of this Act, the Comp8 troller General shall submit to Congress a report on

9 the study conducted under paragraph (1).

10 SEC. 428. REPLACEMENT OF PROSTHETIC DEVICES AND

11 PARTS.

12 (a) IN GENERAL.—Section 1834(h)(1) (42 U.S.C.

13 1395m(h)(1)), as amended by section 427(a), is further

14 amended by adding at the end the following new subpara15 graph:

16 ‘‘(G) REPLACEMENT OF PROSTHETIC DE17 VICES AND PARTS.—

18 ‘‘(i) IN GENERAL.—Payment shall be

19 made for the replacement of prosthetic de20 vices which are artificial limbs, or for the

21 replacement of any part of such devices,

22 without regard to continuous use or useful

23 lifetime restrictions if an ordering physi24 cian determines that the provision of a re25 placement device, or a replacement part of
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1 such a device, is necessary because of any

2 of the following:

3 ‘‘(I) A change in the physio4 logical condition of the patient.

5 ‘‘(II) An irreparable change in

6 the condition of the device, or in a

7 part of the device.

8 ‘‘(III) The condition of the de9 vice, or the part of the device, re10 quires repairs and the cost of such re11 pairs would be more than 60 percent

12 of the cost of a replacement device, or,

13 as the case may be, of the part being

14 replaced.

15 ‘‘(ii) CONFIRMATION MAY BE RE16 QUIRED IF REPLACEMENT DEVICE OR

17 PART IS LESS THAN 3 YEARS OLD.—If a

18 physician determines that a replacement

19 device, or a replacement part, is necessary

20 pursuant to clause (i)—

21 ‘‘(I) such determination shall be

22 controlling; and

23 ‘‘(II) such replacement device or

24 part shall be deemed to be reasonable

25 and necessary for purposes of section
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1 1862(a)(1)(A); except that if the de2 vice, or part, being replaced is less

3 than 3 years old (calculated from the

4 date on which the beneficiary began to

5 use the device or part), the Secretary

6 may also require confirmation of ne7 cessity of the replacement device, or,

8 as the case may be, the replacement

9 part.’’.

10 (b) PREEMPTION OF RULE.—The provisions of sec11 tion 1834(h)(1)(G) as added by subsection (a) shall super12 sede any rule that as of the date of the enactment of this

13 Act may have applied a 5-year replacement rule with re14 gard to prosthetic devices.

15 (c) EFFECTIVE DATE.—The amendment made by

16 subsection (a) shall apply to items replaced on or after

17 April 1, 2001.

18 SEC. 429. REVISED PART B PAYMENT FOR DRUGS AND

19 BIOLOGICALS AND RELATED SERVICES.

20 (a) RECOMMENDATIONS FOR REVISED PAYMENT

21 METHODOLOGY FOR DRUGS AND BIOLOGICALS.—

22 (1) STUDY.—

23 (A) IN GENERAL.—The Comptroller Gen24 eral of the United States shall conduct a study

25 on the reimbursement for drugs and biologicals
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1 under the current medicare payment method2 ology (provided under section 1842(o) of the

3 Social Security Act (42 U.S.C. 1395u(o)) and

4 for related services under part B of title XVIII

5 of such Act. In the study, the Comptroller Gen6 eral shall—

7 (i) identify the average prices at

8 which such drugs and biologicals are ac9 quired by physicians and other suppliers;

10 (ii) quantify the difference between

11 such average prices and the reimbursement

12 amount under such section; and

13 (iii) determine the extent to which (if

14 any) payment under such part is adequate

15 to compensate physicians, providers of

16 services, or other suppliers of such drugs

17 and biologicals for costs incurred in the ad18 ministration, handling, or storage of such

19 drugs or biologicals.

20 (B) CONSULTATION.—In conducting the

21 study under subparagraph (A), the Comptroller

22 General shall consult with physicians, providers

23 of services, and suppliers of drugs and

24 biologicals under the medicare program under

25 title XVIII of such Act, as well as other organi-
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1 zations involved in the distribution of such

2 drugs and biologicals to such physicians, pro3 viders of services, and suppliers.

4 (2) REPORT.—Not later than 9 months after

5 the date of the enactment of this Act, the Comp6 troller General shall submit to Congress and to the

7 Secretary of Health and Human Services a report

8 on the study conducted under this subsection, and

9 shall include in such report recommendations for re10 vised payment methodologies described in paragraph

11 (3).

12 (3) RECOMMENDATIONS FOR REVISED PAY13 MENT METHODOLOGIES.—

14 (A) IN GENERAL.—The Comptroller Gen15 eral shall provide specific recommendations for

16 revised payment methodologies for reimburse17 ment for drugs and biologicals and for related

18 services under the medicare program. The

19 Comptroller General may include in the

20 recommendations—

21 (i) proposals to make adjustments

22 under subsection (c) of section 1848 of the

23 Social Security Act (42 U.S.C. 1395w–4)

24 for the practice expense component of the

25 physician fee schedule under such section
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1 for the costs incurred in the administra2 tion, handling, or storage of certain cat3 egories of such drugs and biologicals, if ap4 propriate; and

5 (ii) proposals for new payments to

6 providers of services or suppliers for such

7 costs, if appropriate.

8 (B) ENSURING PATIENT ACCESS TO

9 CARE.—In making recommendations under this

10 paragraph, the Comptroller General shall en11 sure that any proposed revised payment meth12 odology is designed to ensure that medicare

13 beneficiaries continue to have appropriate ac14 cess to health care services under the medicare

15 program.

16 (C) MATTERS CONSIDERED.—In making

17 recommendations under this paragraph, the

18 Comptroller General shall consider—

19 (i) the method and amount of reim20 bursement for similar drugs and biologicals

21 made by large group health plans;

22 (ii) as a result of any revised payment

23 methodology, the potential for patients to

24 receive inpatient or outpatient hospital
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1 services in lieu of services in a physician’s

2 office; and

3 (iii) the effect of any revised payment

4 methodology on the delivery of drug thera5 pies by hospital outpatient departments.

6 (D) COORDINATION WITH BBRA STUDY.—

7 In making recommendations under this para8 graph, the Comptroller General shall conclude

9 and take into account the results of the study

10 provided for under section 213(a) of BBRA

11 (113 Stat. 1501A–350).

12 (b) IMPLEMENTATION OF NEW PAYMENT METHOD13 OLOGY.—

14 (1) IN GENERAL.—Notwithstanding any other

15 provision of law, based on the recommendations con16 tained in the report under subsection (a), the Sec17 retary of Health and Human Services, subject to

18 paragraph (2), shall revise the payment methodology

19 under section 1842(o) of the Social Security Act (42

20 U.S.C. 1395u(o)) for drugs and biologicals furnished

21 under part B of the medicare program. To the ex22 tent the Secretary determines appropriate, the Sec23 retary may provide for the adjustments to payments

24 amounts referred to in subsection (a)(3)(A)(i) or ad-
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1 ditional payments referred to in subsection

2 (a)(2)(A)(ii).

3 (2) LIMITATION.—In revising the payment

4 methodology under paragraph (1), in no case may

5 the estimated aggregate payments for drugs and

6 biologicals under the revised system (including addi7 tional payments referred to in subsection

8 (a)(3)(A)(ii)) exceed the aggregate amount of pay9 ment for such drugs and biologicals, as projected by

10 the Secretary, that would have been made under the

11 payment methodology in effect under such section

12 1842(o).

13 (c) TEMPORARY INJUNCTION AGAINST REDUCTIONS

14 IN PAYMENT RATES.—Notwithstanding any other provi15 sion of law, the Administrator of the Health Care Financ16 ing Administration may not directly or indirectly increase

17 or decrease the rates of reimbursement (in effect on Octo18 ber 1, 2000) for drugs and biologicals under the current

19 medicare payment methodology (provided under section

20 1842(o) of such Act (42 U.S.C. 1395u(o)) until such time

21 as the Secretary has reviewed the report submitted under

22 subsection (a)(2).
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1 SEC. 430. CONTRAST ENHANCED DIAGNOSTIC PROCE2 DURES UNDER HOSPITAL PROSPECTIVE PAY3 MENT SYSTEM.

4 (a) SEPARATE CLASSIFICATION.—Section 1833(t)(2)

5 (42 U.S.C. 1395l(t)(2)) is amended—

6 (1) by striking ‘‘and’’ at the end of subpara7 graph (E);

8 (2) by striking the period at the end of sub9 paragraph (F) and inserting ‘‘; and’’; and

10 (3) by inserting after subparagraph (F) the fol11 lowing new subparagraph:

12 ‘‘(G) the Secretary shall create additional

13 groups of covered OPD services that classify

14 separately those procedures that utilize contrast

15 media from those that do not.’’.

16 (b) CONFORMING AMENDMENT.—Section 1861(t)(1)

17 (42 U.S.C. 1395x(t)(1)) is amended by inserting ‘‘(includ18 ing contrast agents)’’ after ‘‘only such drugs’’.

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

20 this section apply to items and services furnished on or

21 after January 1, 2001.

22 SEC. 431. QUALIFICATIONS FOR COMMUNITY MENTAL

23 HEALTH CENTERS.

24 (a) MEDICARE PROGRAM.—Section 1861(ff)(3)(B)

25 (42 U.S.C. 1395x(ff)(3)(B)) is amended by striking ‘‘enti-
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1 ty’’ and all that follows and inserting the following: ‘‘entity

2 that—

3 ‘‘(i)(I) provides the mental health services de4 scribed in section 1913(c)(1) of the Public Health

5 Service Act; or

6 ‘‘(II) in the case of an entity operating in a

7 State that by law precludes the entity from pro8 viding itself the service described in subparagraph

9 (E) of such section, provides for such service by con10 tract with an approved organization or entity (as de11 termined by the Secretary);

12 ‘‘(ii) meets applicable licensing or certification

13 requirements for community mental health centers

14 in the State in which it is located; and

15 ‘‘(iii) meets such additional conditions as the

16 Secretary shall specify to ensure (I) the health and

17 safety of individuals being furnished such services,

18 (II) the effective and efficient furnishing of such

19 services, and (III) the compliance of such entity with

20 the criteria described in section 1931(c)(1) of the

21 Public Health Service Act.’’.

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

23 subsection (a) applies with respect to community mental

24 health centers with respect to services furnished on or
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1 after the first day of the third month beginning after the

2 date of the enactment of this Act.

3 SEC. 432. MODIFICATION OF MEDICARE BILLING REQUIRE4 MENTS FOR CERTAIN INDIAN PROVIDERS.

5 (a) IN GENERAL.—Section 1880(a) (42 U.S.C.

6 1395qq(a)) is amended by adding at the end the following

7 new sentence: ‘‘A hospital or a free-standing ambulatory

8 care clinic (as defined by the Secretary), whether operated

9 by the Indian Health Service or by an Indian tribe or trib10 al organization (as those terms are defined in section 4

11 of the Indian Health Care Improvement Act), shall be eli12 gible for payments for services for which payment is made

13 pursuant to section 1848, notwithstanding sections

14 1814(c) and 1835(d), if and for so long as it meets all

15 of the requirements which are applicable generally to such

16 payments, services, hospitals, and clinics.’’.

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

18 this section shall apply to services furnished on or after

19 January 1, 2001.

20 SEC. 433. GAO STUDY ON COVERAGE OF SURGICAL FIRST

21 ASSISTING SERVICES OF CERTIFIED REG22 ISTERED NURSE FIRST ASSISTANTS.

23 (a) STUDY.—The Comptroller General of the United

24 States shall conduct a study on the effect on the medicare

25 program under title XVIII of the Social Security Act and
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1 on medicare beneficiaries of coverage under the program

2 of surgical first assisting services of certified registered

3 nurse first assistants. The Comptroller General shall con4 sider the following when conducting the study:

5 (1) Any impact on the quality of care furnished

6 to medicare beneficiaries by reason of such coverage.

7 (2) Appropriate education and training require8 ments for certified registered nurse first assistants

9 who furnish such first assisting services.

10 (3) Appropriate rates of payment under the

11 program to such certified registered nurse first as12 sistants for furnishing such services, taking into ac13 count the costs of compensation, overhead, and su14 pervision attributable to certified registered nurse

15 first assistants.

16 (b) REPORT.—Not later than 1 year after the date

17 of the enactment of this Act, the Comptroller General shall

18 submit to Congress a report on the study conducted under

19 subsection (a).

20 SEC. 434. MEDPAC STUDY AND REPORT ON MEDICARE RE21 IMBURSEMENT FOR SERVICES PROVIDED BY

22 CERTAIN PROVIDERS.

23 (a) STUDY.—The Medicare Payment Advisory Com24 mission shall conduct a study on the appropriateness of

25 the current payment rates under the medicare program
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1 under title XVIII of the Social Security Act for services

2 provided by a—

3 (1) certified nurse-midwife (as defined in sub4 section (gg)(2) of section 1861 of such Act (42

5 U.S.C. 1395x);

6 (2) physician assistant (as defined in subsection

7 (aa)(5)(A) of such section);

8 (3) nurse practitioner (as defined in such sub9 section); and

10 (4) clinical nurse specialist (as defined in sub11 section (aa)(5)(B) of such section).

12 (b) REPORT.—Not later than 18 months after the

13 date of the enactment of this Act, the Commission shall

14 submit to Congress a report on the study conducted under

15 subsection (a), together with any recommendations for leg16 islation that the Commission determines to be appropriate

17 as a result of such study.

18 SEC. 435. MEDPAC STUDY AND REPORT ON MEDICARE COV19 ERAGE OF SERVICES PROVIDED BY CERTAIN

20 NONPHYSICIAN PROVIDERS.

21 (a) STUDY.—

22 (1) IN GENERAL.—The Medicare Payment Ad23 visory Commission shall conduct a study to deter24 mine the appropriateness of providing coverage
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1 under the medicare program under title XVIII of the

2 Social Security Act for services provided by a—

3 (A) surgical technologist;

4 (B) marriage counselor;

5 (C) marriage and family therapist;

6 (D) pastoral care counselor; and

7 (E) licensed professional counselor of men8 tal health.

9 (2) COSTS TO PROGRAM.—The study shall con10 sider the short-term and long-term benefits, and

11 costs to the medicare program, of providing the cov12 erage described in paragraph (1).

13 (b) REPORT.—Not later than 18 months after the

14 date of the enactment of this Act, the Commission shall

15 submit to Congress a report on the study conducted under

16 subsection (a), together with any recommendations for leg17 islation that the Commission determines to be appropriate

18 as a result of such study.

19 SEC. 436. GAO STUDY AND REPORT ON THE COSTS OF

20 EMERGENCY AND MEDICAL TRANSPOR21 TATION SERVICES.

22 (a) STUDY.—The Comptroller General of the United

23 States shall conduct a study on the costs of providing

24 emergency and medical transportation services across the
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1 range of acuity levels of conditions for which such trans2 portation services are provided.

3 (b) REPORT.—Not later than 18 months after the

4 date of the enactment of this Act, the Comptroller General

5 shall submit to Congress a report on the study conducted

6 under subsection (a), together with recommendations for

7 any changes in methodology or payment level necessary

8 to fairly compensate suppliers of emergency and medical

9 transportation services and to ensure the access of bene10 ficiaries under the medicare program under title XVIII of

11 the Social Security Act.

12 SEC. 437. GAO STUDIES AND REPORTS ON MEDICARE PAY13 MENTS.

14 (a) GAO STUDY ON HCFA POST-PAYMENT AUDIT

15 PROCESS.—

16 (1) STUDY.—The Comptroller General of the

17 United States shall conduct a study on the post-pay18 ment audit process under the medicare program

19 under title XVIII of the Social Security Act as such

20 process applies to physicians, including the proper

21 level of resources that the Health Care Financing

22 Administration should devote to educating physi23 cians regarding—

24 (A) coding and billing;

25 (B) documentation requirements; and
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1 (C) the calculation of overpayments.

2 (2) REPORT.—Not later than 18 months after

3 the date of the enactment of this Act, the Comp4 troller General shall submit to Congress a report on

5 the study conducted under paragraph (1) together

6 with specific recommendations for changes or im7 provements in the post-payment audit process de8 scribed in such paragraph.

9 (b) GAO STUDY ON ADMINISTRATION AND OVER10 SIGHT.—

11 (1) STUDY.—The Comptroller General of the

12 United States shall conduct a study on the aggre13 gate effects of regulatory, audit, oversight, and pa14 perwork burdens on physicians and other health care

15 providers participating in the medicare program

16 under title XVIII of the Social Security Act.

17 (2) REPORT.—Not later than 18 months after

18 the date of the enactment of this Act, the Comp19 troller General shall submit to Congress a report on

20 the study conducted under paragraph (1) together

21 with recommendations regarding any area in

22 which—

23 (A) a reduction in paperwork, an ease of

24 administration, or an appropriate change in

25 oversight and review may be accomplished; or
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1 (B) additional payments or education are

2 needed to assist physicians and other health

3 care providers in understanding and complying

4 with any legal or regulatory requirements.

5 SEC. 438. MEDPAC STUDY ON ACCESS TO OUTPATIENT PAIN

6 MANAGEMENT SERVICES.

7 (a) STUDY.—The Medicare Payment Advisory Com8 mission shall conduct a study on the barriers to coverage

9 and payment for outpatient interventional pain medicine

10 procedures under the medicare program under title XVIII

11 of the Social Security Act. Such study shall examine—

12 (1) the specific barriers imposed under the

13 medicare program on the provision of pain manage14 ment procedures in hospital outpatient departments,

15 ambulatory surgery centers, and physicians’ offices;

16 and

17 (2) the consistency of medicare payment poli18 cies for pain management procedures in those dif19 ferent settings.

20 (b) REPORT.—Not later than 1 year after the date

21 of the enactment of this Act, the Commission shall submit

22 to Congress a report on the study.
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1 TITLE V—PROVISIONS

2 RELATING TO PARTS A AND B

3 Subtitle A—Home Health Services

4 SEC. 501. 2-YEAR ADDITIONAL DELAY IN APPLICATION OF

5 15 PERCENT REDUCTION ON PAYMENT LIM6 ITS FOR HOME HEALTH SERVICES.

7 (a) IN GENERAL.—Section 1895(b)(3)(A)(i) (42

8 U.S.C. 1395fff(b)(3)(A)(i)) is amended—

9 (1) by redesignating subclause (II) as subclause

10 (III);

11 (2) in subclause (III), as redesignated, by strik12 ing ‘‘described in subclause (I)’’ and inserting ‘‘de13 scribed in subclause (II)’’; and

14 (3) by inserting after subclause (I) the fol15 lowing new subclause:

16 ‘‘(II) For each of the two 12-

17 month periods beginning after the pe18 riod described in subclause (I), such

19 amount (or amounts) shall be equal to

20 the amount (or amounts) determined

21 under subclause (I), updated under

22 subparagraph (B).’’.

23 (b) CHANGE IN REPORT.—Section 302(c) of BBRA

24 (113 Stat. 1501A–360) is amended—
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1 (1) by striking ‘‘Not later than’’ and all that

2 follows through ‘‘(42 U.S.C. 1395fff)’’ and inserting

3 ‘‘Not later than April 1, 2002’’; and

4 (2) by striking ‘‘Secretary’’ and inserting

5 ‘‘Comptroller General of the United States’’.

6 (c) CASE MIX ADJUSTMENT CORRECTIONS.—

7 (1) IN GENERAL.—Section 1895(b)(3)(B) (42

8 U.S.C. 1395fff(b)(3)(B)) is amended by adding at

9 the end the following new clause:

10 ‘‘(iv) ADJUSTMENT FOR CASE MIX

11 CHANGES.—Insofar as the Secretary deter12 mines that the adjustments under para13 graph (4)(A)(i) for a previous fiscal year

14 (or estimates that such adjustments for a

15 future fiscal year) did (or are likely to) re16 sult in a change in aggregate payments

17 under this subsection during the fiscal year

18 that are a result of changes in the coding

19 or classification of different units of serv20 ices that do not reflect real changes in case

21 mix, the Secretary may adjust the stand22 ard prospective payment amount (or

23 amounts) under paragraph (3) for subse24 quent fiscal years so as to eliminate the ef-
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1 fect of such coding or classification

2 changes.’’.

3 (2) EFFECTIVE DATE.—The amendment made

4 by paragraph (1) applies to episodes concluding on

5 or after October 1, 2001.

6 SEC. 502. RESTORATION OF FULL HOME HEALTH MARKET

7 BASKET UPDATE FOR HOME HEALTH SERV8 ICES FOR FISCAL YEAR 2001.

9 (a) IN GENERAL.—Section 1861(v)(1)(L)(x) (42

10 U.S.C. 1395x(v)(1)(L)(x)) is amended—

11 (1) by striking ‘‘2001,’’; and

12 (2) by adding at the end the following: ‘‘With

13 respect to cost reporting periods beginning during

14 fiscal year 2001, the update to any limit under this

15 subparagraph shall be the home health market bas16 ket index.’’.

17 (b) SPECIAL RULE FOR PAYMENT FOR FISCAL YEAR

18 2001 BASED ON ADJUSTED PROSPECTIVE PAYMENT

19 AMOUNTS.—

20 (1) IN GENERAL.—Notwithstanding the amend21 ments made by subsection (a), for purposes of mak22 ing payments under section 1895(b) of the Social

23 Security Act (42 U.S.C. 1395fff(b)) for home health

24 services for fiscal year 2001, the Secretary of Health

25 and Human Services shall—
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1 (A) with respect to episodes and visits end2 ing on or after October 1, 2000, and before

3 April 1, 2001, use the final standardized and

4 budget neutral prospective payment amounts

5 for 60 day episodes and standardized average

6 per visit amounts for fiscal year 2001 as pub7 lished by the Secretary in the Federal Register

8 of July 3, 2000 (65 Federal Register 41128–

9 41214); and

10 (B) with respect to episodes and visits end11 ing on or after April 1, 2001, and before Octo12 ber 1, 2001, use such amounts increased by 2.2

13 percent.

14 (2) NO EFFECT ON OTHER PAYMENTS OR DE15 TERMINATIONS.—The Secretary shall not take the

16 provisions of paragraph (1) into account for pur17 poses of payments, determinations, or budget neu18 trality adjustments under section 1895 of the Social

19 Security Act.

20 SEC. 503. TEMPORARY TWO-MONTH EXTENSION OF PERI21 ODIC INTERIM PAYMENTS.

22 (a) TEMPORARY EXTENSION.—Notwithstanding sub23 section (d) of section 4603 of BBA (42 U.S.C. 1395fff

24 note), as amended by section 5101(c)(2) of the Tax and

25 Trade Relief Extension Act of 1998 (contained in division
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1 J of Public Law 105–277), the amendments made by sub2 section (b) of such section 4603 shall not take effect until

3 December 1, 2000, in the case of a home health agency

4 that was receiving periodic interim payments under sec5 tion 1815(e)(2) as of September 30, 2000.

6 (b) PAYMENT RULE.—The amount of such periodic

7 interim payment made to a home health agency by reason

8 of subsection (a) during each of November and December,

9 2000, shall be equal to the amount of such payment made

10 to the agency in their last full monthly periodic interim

11 payment. Such amount of payment shall be included in

12 the tentative settlement of the last cost report for the

13 home health agency under the payment system in effect

14 prior to the implementation of the prospective payment

15 system under section 1895(b) of the Social Security Act

16 (42 U.S.C. 1395fff(b)).

17 SEC. 504. USE OF TELEHEALTH IN DELIVERY OF HOME

18 HEALTH SERVICES.

19 Section 1895 (42 U.S.C. 1395fff) is amended by add20 ing at the end the following new subsection:

21 ‘‘(e) CONSTRUCTION RELATED TO HOME HEALTH

22 SERVICES.—

23 ‘‘(1) TELECOMMUNICATIONS.—Nothing in this

24 section shall be construed as preventing a home

25 health agency furnishing a home health unit of serv-
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1 ice for which payment is made under the prospective

2 payment system established by this section for such

3 units of service from furnishing services via a tele4 communication system if such services—

5 ‘‘(A) do not substitute for in-person home

6 health services ordered as part of a plan of care

7 certified by a physician pursuant to section

8 1814(a)(2)(C) or section 1835(a)(2)(A); and

9 ‘‘(B) are not considered a home health

10 visit for purposes of eligibility or payment

11 under this title.

12 ‘‘(2) PHYSICIAN CERTIFICATION.—Nothing in

13 this section shall be construed as waiving the re14 quirement for a physician certification under section

15 1814(a)(2)(C) or section 1835(a)(2)(A) of such Act

16 (42 U.S.C. 1395f(a)(2)(C), 1395n(a)(2)(A)) for the

17 payment for home health services, whether or not

18 furnished via a telecommunications system.’’.

19 SEC. 505. STUDY ON COSTS TO HOME HEALTH AGENCIES

20 OF PURCHASING NONROUTINE MEDICAL

21 SUPPLIES.

22 (a) STUDY.—The Comptroller General of the United

23 States shall conduct a study on variations in prices paid

24 by home health agencies furnishing home health services

25 under the medicare program under title XVIII of the So-
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1 cial Security Act in purchasing nonroutine medical sup2 plies, including ostomy supplies, and volumes if such sup3 plies used, shall determine the effect (if any) of variations

4 on prices and volumes in the provision of such services.

5 (b) REPORT.—Not later than October 1, 2001, the

6 Comptroller General shall submit to Congress a report on

7 the study conducted under subsection (a), and shall in8 clude in the report recommendations respecting whether

9 payment for nonroutine medical supplies furnished in con10 nection with home health services should be made sepa11 rately from the prospective payment system for such serv12 ices.

13 SEC. 506. TREATMENT OF BRANCH OFFICES; GAO STUDY

14 ON SUPERVISION OF HOME HEALTH CARE

15 PROVIDED IN ISOLATED RURAL AREAS.

16 (a) TREATMENT OF BRANCH OFFICES.—

17 (1) IN GENERAL.—Notwithstanding any other

18 provision of law, in determining for purposes of title

19 XVIII of the Social Security Act whether an office

20 of a home health agency constitutes a branch office

21 or a separate home health agency, neither the time

22 nor distance between a parent office of the home

23 health agency and a branch office shall be the sole

24 determinant of a home health agency’s branch office

25 status.
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1 (2) CONSIDERATION OF FORMS OF TECH2 NOLOGY IN DEFINITION OF SUPERVISION.—The Sec3 retary of Health and Human Services may include

4 forms of technology in determining what constitutes

5 ‘‘supervision’’ for purposes of determining a home

6 health agency’s branch office status under para7 graph (1).

8 (b) GAO STUDY.—

9 (1) STUDY.—The Comptroller General of the

10 United States shall conduct a study of the provision

11 of adequate supervision to maintain quality of home

12 health services delivered under the medicare pro13 gram under title XVIII of the Social Security Act in

14 isolated rural areas. The study shall evaluate the

15 methods that home health agency branches and

16 subunits use to maintain adequate supervision in the

17 delivery of services to clients residing in those areas,

18 how these methods of supervision compare to re19 quirements that subunits independently meet medi20 care conditions of participation, and the resources

21 utilized by subunits to meet such conditions.

22 (2) REPORT.—Not later than January 1, 2002,

23 the Comptroller General shall submit to Congress a

24 report on the study conducted under paragraph (1).

25 The report shall include recommendations on wheth-
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1 er exceptions are needed for subunits and branches

2 of home health agencies under the medicare program

3 to maintain access to the home health benefit or

4 whether alternative policies should be developed to

5 assure adequate supervision and access and rec6 ommendations on whether a national standard for

7 supervision is appropriate.

8 SEC. 507. CLARIFICATION OF THE HOMEBOUND DEFINI9 TION UNDER THE MEDICARE HOME HEALTH

10 BENEFIT.

11 (a) CLARIFICATION.—

12 (1) IN GENERAL.—Sections 1814(a) and

13 1835(a) (42 U.S.C. 1395f(a) and 1395n(a)) are

14 each amended—

15 (A) in the last sentence, by striking ‘‘, and

16 that absences of the individual from home are

17 infrequent or of relatively short duration, or are

18 attributable to the need to receive medical

19 treatment’’; and

20 (B) by adding at the end the following new

21 sentences: ‘‘Any absence of an individual from

22 the home attributable to the need to receive

23 health care treatment, including regular ab24 sences for the purpose of participating in thera25 peutic, psychosocial, or medical treatment in an
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1 adult day-care program that is licensed or cer2 tified by a State, or accredited, to furnish adult

3 day-care services in the State shall not dis4 qualify an individual from being considered to

5 be ‘confined to his home’. Any other absence of

6 an individual from the home shall not so dis7 qualify an individual if the absence is of infre8 quent or of relatively short duration. For pur9 poses of the preceding sentence, any absence for

10 the purpose of attending a religious service

11 shall be deemed to be an absence of infrequent

12 or short duration.’’.

13 (2) EFFECTIVE DATE.—The amendments made

14 by paragraph (1) shall apply to items and services

15 provided on or after the date of enactment of this

16 Act.

17 (b) STUDY.—

18 (1) IN GENERAL.—The Comptroller General of

19 the United States shall conduct an evaluation of the

20 effect of the amendment on the cost of and access

21 to home health services under the medicare program

22 under title XVIII of the Social Security Act.

23 (2) REPORT.—Not later than 1 year after the

24 date of the enactment of this Act, the Comptroller
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1 General shall submit to Congress a report on the

2 study conducted under paragraph (1).

3 SEC. 508. BONUS PAYMENTS FOR RURAL HOME HEALTH

4 AGENCIES IN 2001 AND 2002.

5 (a) INCREASE IN PAYMENT RATES FOR RURAL

6 AGENCIES IN 2001 AND 2002.—Section 1895(b) (42

7 U.S.C. 1395fff(b)) is amended by adding at the end the

8 following new paragraph:

9 ‘‘(7) ADDITIONAL PAYMENT AMOUNT FOR

10 SERVICES FURNISHED IN RURAL AREAS IN 2001 AND

11 2002.—In the case of home health services furnished

12 in a rural area (as defined in section 1886(d)(2)(D))

13 during April 1, 2001 through December 31, 2001,

14 or 2002, the Secretary shall provide for an addition

15 or adjustment to the payment amount otherwise

16 made under this section for services furnished in a

17 rural area in an amount equal to 10 percent of the

18 amount otherwise determined under this sub19 section.’’.

20 (b) WAIVING BUDGET NEUTRALITY.—Section

21 1895(b)(3) (42 U.S.C. 1395fff(b)(3)) is amended by add22 ing at the end the following new subparagraph:

23 ‘‘(D) NO ADJUSTMENT FOR ADDITIONAL

24 PAYMENTS FOR RURAL SERVICES.—The Sec25 retary shall not reduce the standard prospective
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1 payment amount (or amounts) under this para2 graph applicable to home health services fur3 nished during a period to offset the increase in

4 payments resulting from the application of

5 paragraph (7) (relating to services furnished in

6 rural areas).’’.

7 Subtitle B—Direct Graduate

8 Medical Education

9 SEC. 511. INCREASE IN FLOOR FOR DIRECT GRADUATE

10 MEDICAL EDUCATION PAYMENTS.

11 Section 1886(h)(2)(D)(iii) (42 U.S.C.

12 1395ww(h)(2)(D)(iii)) is amended—

13 (1) in the heading, by striking ‘‘IN FISCAL YEAR

14 2001 AT 70 PERCENT OF’’ and inserting ‘‘FOR’’; and

15 (2) by inserting after ‘‘70 percent’’ the fol16 lowing: ‘‘, and for the cost reporting period begin17 ning during fiscal year 2002 shall not be less than

18 85 percent,’’.

19 SEC. 512. CHANGE IN DISTRIBUTION FORMULA FOR

20 MEDICARE+CHOICE-RELATED NURSING AND

21 ALLIED HEALTH EDUCATION COSTS.

22 (a) IN GENERAL.—Section 1886(l)(2)(C) (42 U.S.C.

23 1395ww(l)(2)(C)) is amended by striking all that follows

24 ‘‘multiplied by’’ and inserting the following: ‘‘the ratio

25 of—
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1 ‘‘(i) the product of (I) the Secretary’s

2 estimate of the ratio of the amount of pay3 ments made under section 1861(v) to the

4 hospital for nursing and allied health edu5 cation activities for the hospital’s cost re6 porting period ending in the second pre7 ceding fiscal year, to the hospital’s total in8 patient days for such period, and (II) the

9 total number of inpatient days (as estab10 lished by the Secretary) for such period

11 which are attributable to services furnished

12 to individuals who are enrolled under a

13 risk sharing contract with an eligible orga14 nization under section 1876 and who are

15 entitled to benefits under part A or who

16 are enrolled with a Medicare+Choice orga17 nization under part C; to

18 ‘‘(ii) the sum of the products deter19 mined under clause (i) for such cost re20 porting periods.’’.

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

22 subsection (a) applies to portions of cost reporting periods

23 occurring on or after January 1, 2001.
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1 Subtitle C—Changes in Medicare

2 Coverage and Appeals Process

3 SEC. 521. REVISIONS TO MEDICARE APPEALS PROCESS.

4 (a) CONDUCT OF RECONSIDERATIONS OF DETER5 MINATIONS BY INDEPENDENT CONTRACTORS.—Section

6 1869 (42 U.S.C. 1395ff) is amended to read as follows:

7 ‘‘DETERMINATIONS; APPEALS

8 ‘‘SEC. 1869. (a) INITIAL DETERMINATIONS.—

9 ‘‘(1) PROMULGATIONS OF REGULATIONS.—The

10 Secretary shall promulgate regulations and make ini11 tial determinations with respect to benefits under

12 part A or part B in accordance with those regula13 tions for the following:

14 ‘‘(A) The initial determination of whether

15 an individual is entitled to benefits under such

16 parts.

17 ‘‘(B) The initial determination of the

18 amount of benefits available to the individual

19 under such parts.

20 ‘‘(C) Any other initial determination with

21 respect to a claim for benefits under such parts,

22 including an initial determination by the Sec23 retary that payment may not be made, or may

24 no longer be made, for an item or service under

25 such parts, an initial determination made by a
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1 utilization and quality control peer review orga2 nization under section 1154(a)(2), and an ini3 tial determination made by an entity pursuant

4 to a contract (other than a contract under sec5 tion 1852) with the Secretary to administer

6 provisions of this title or title XI.

7 ‘‘(2) DEADLINES FOR MAKING INITIAL DETER8 MINATIONS.—

9 ‘‘(A) IN GENERAL.—Subject to subpara10 graph (B), in promulgating regulations under

11 paragraph (1), initial determinations shall be

12 concluded by not later than the 45-day period

13 beginning on the date the fiscal intermediary or

14 the carrier, as the case may be, receives a claim

15 for benefits from an individual as described in

16 paragraph (1). Notice of such determination

17 shall be mailed to the individual filing the claim

18 before the conclusion of such 45-day period.

19 ‘‘(B) CLEAN CLAIMS.—Subparagraph (A)

20 shall not apply with respect to any claim that

21 does not meet the requirements of section

22 1816(c)(2) or section 1842(c)(2).

23 ‘‘(3) REDETERMINATIONS.—

24 ‘‘(A) IN GENERAL.—In promulgating regu25 lations under paragraph (1) with respect to ini-
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1 tial determinations, such regulations shall pro2 vide for a fiscal intermediary or a carrier to

3 make a redetermination with respect to a claim

4 for benefits that is denied in whole or in part.

5 ‘‘(B) LIMITATIONS.—

6 ‘‘(i) APPEALS RIGHTS.—No initial de7 termination may be reconsidered or ap8 pealed under subsection (b) unless the fis9 cal intermediary or carrier has made a re10 determination of that initial determination

11 under this paragraph.

12 ‘‘(ii) DECISION MAKER.—No redeter13 mination may be made by any individual

14 involved in the initial determination.

15 ‘‘(C) DEADLINES.—

16 ‘‘(i) FILING FOR REDETERMINA17 TION.—A redetermination under subpara18 graph (A) shall be available only if notice

19 is filed with the Secretary to request the

20 redetermination by not later than the end

21 of the 120-day period beginning on the

22 date the individual receives notice of the

23 initial determination under paragraph (2).

24 ‘‘(ii) CONCLUDING REDETERMINA25 TIONS.—Except as provided in subsections
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1 (d) through (f), redeterminations shall be

2 made in accordance with the medical needs

3 of the individual, but no later than 30 days

4 after the fiscal intermediary or the carrier,

5 as the case may be, receives a request for

6 a redetermination. Notice of such deter7 mination shall be mailed to the individual

8 filing the claim before the conclusion of

9 such 30-day period.

10 ‘‘(D) CONSTRUCTION.—For purposes of

11 the succeeding provisions of this section a rede12 termination under this paragraph shall be con13 sidered to be part of the initial determination.

14 ‘‘(b) APPEAL RIGHTS.—

15 ‘‘(1) IN GENERAL.—

16 ‘‘(A) RECONSIDERATION OF INITIAL DE17 TERMINATION.—(i) Subject to subparagraph

18 (D), any individual dissatisfied with any initial

19 determination under subsection (a)(1) shall be

20 entitled to reconsideration of the determination,

21 and, subject to subparagraphs (D) and (E), a

22 hearing thereon by the Secretary to the same

23 extent as is provided in section 205(b) and to

24 judicial review of the Secretary’s final decision

25 after such hearing as is provided in section
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1 205(g). For purposes of the preceding sentence,

2 any reference to the Commissioner of Social Se3 curity or the Social Security Administration in

4 subsection (g) or (l) of section 205 shall be con5 sidered a reference to the Secretary or the De6 partment of Health and Human Services, re7 spectively.

8 ‘‘(ii) In making determinations under

9 this subsection, local and national coverage

10 determinations that involve the consider11 ation of medical facts of application of

12 medical judgment shall not be binding on

13 qualified independent contractors, adminis14 trative law judges or the Departmental Ap15 peals Board when determining whether a

16 particular item or service is covered with

17 respect to an individual making a claim for

18 benefit or the amount, duration or scope of

19 an item or service to which an individual

20 making a claim for benefits is eligible.

21 ‘‘(B) REPRESENTATION BY PROVIDER OR

22 SUPPLIER.—

23 ‘‘(i) IN GENERAL.—Sections 206(a),

24 1102 and 1871 shall not be construed as

25 authorizing the Secretary to prohibit an in-
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1 dividual from being represented under this

2 section by a person that furnishes or sup3 plies the individual, directly or indirectly,

4 with services or items, solely on the basis

5 that the person furnishes or supplies the

6 individual with such a service or item.

7 ‘‘(ii) MANDATORY WAIVER OF RIGHT

8 TO PAYMENT FROM BENEFICIARY.—Any

9 person that furnishes services or items to

10 an individual may not represent an indi11 vidual under this section with respect to

12 the issue described in section 1879(a)(2)

13 unless the person has waived any rights for

14 payment from the beneficiary with respect

15 to the services or items involved in the ap16 peal.

17 ‘‘(iii) PROHIBITION ON PAYMENT FOR

18 REPRESENTATION.—If a person furnishes

19 services or items to an individual and rep20 resents the individual under this section,

21 the person may not impose any financial li22 ability on such individual in connection

23 with such representation.

24 ‘‘(iv) REQUIREMENTS FOR REP25 RESENTATIVES OF A BENEFICIARY.—The
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1 provisions of section 205(j) and section

2 206 (other than subsection (a)(4) of such

3 section) regarding representation of claim4 ants shall apply to representation of an in5 dividual with respect to appeals under this

6 section in the same manner as they apply

7 to representation of an individual under

8 those sections.

9 ‘‘(C) SUCCESSION OF RIGHTS IN CASES OF

10 ASSIGNMENT.—The right of an individual to an

11 appeal under this section with respect to an

12 item or service may be assigned to the provider

13 of services or supplier of the item or service

14 upon the written consent of such individual

15 using a standard form established by the Sec16 retary for such an assignment.

17 ‘‘(D) TIME LIMITS FOR FILING APPEALS.—

18 ‘‘(i) RECONSIDERATIONS.—Reconsid19 eration under subparagraph (A) shall be

20 available only if the individual described in

21 subparagraph (A) files notice with the Sec22 retary to request reconsideration by not

23 later than the end of the 180-day period

24 beginning on the date the individual re25 ceives notice of the redetermination under
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1 subsection (a)(3), or within such additional

2 time as the Secretary may allow.

3 ‘‘(ii) HEARINGS CONDUCTED BY THE

4 SECRETARY.—The Secretary shall establish

5 in regulations time limits for the filing of

6 a request for a hearing by the Secretary in

7 accordance with provisions in sections 205

8 and 206.

9 ‘‘(E) AMOUNTS IN CONTROVERSY.—

10 ‘‘(i) IN GENERAL.—A hearing (by the

11 Secretary) shall not be available to an indi12 vidual under this section if the amount in

13 controversy is less than $100, and judicial

14 review shall not be available to the indi15 vidual if the amount in controversy is less

16 than $1,000.

17 ‘‘(ii) AGGREGATION OF CLAIMS.—In

18 determining the amount in controversy, the

19 Secretary, under regulations, shall allow

20 two or more appeals to be aggregated if

21 the appeals involve—

22 ‘‘(I) the delivery of similar or re23 lated services to the same individual

24 by one or more providers of services

25 or suppliers, or
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1 ‘‘(II) common issues of law and

2 fact arising from services furnished to

3 two or more individuals by one or

4 more providers of services or sup5 pliers.

6 ‘‘(F) EXPEDITED PROCEEDINGS.—

7 ‘‘(i) EXPEDITED DETERMINATION.—

8 In the case of an individual who has re9 ceived notice by a provider of services that

10 the provider of services plans—

11 ‘‘(I) to terminate services pro12 vided to an individual and a physician

13 certifies that failure to continue the

14 provision of such services is likely to

15 place the individual’s health at signifi16 cant risk, or

17 ‘‘(II) to discharge the individual

18 from the provider of services, the indi19 vidual may request, in writing or oral20 ly, an expedited determination or an

21 expedited reconsideration of an initial

22 determination made under subsection

23 (a)(1), as the case may be, and the

24 Secretary shall provide such expedited
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1 determination or expedited reconsider2 ation.

3 ‘‘(ii) EXPEDITED HEARING.—In a

4 hearing by the Secretary under this sec5 tion, in which the moving party alleges

6 that no material issues of fact are in dis7 pute, the Secretary shall make an expe8 dited determination as to whether any such

9 facts are in dispute and, if not, shall

10 render a decision expeditiously.

11 ‘‘(G) REOPENING AND REVISION OF DE12 TERMINATIONS.—The Secretary may reopen or

13 revise any initial determination or reconsidered

14 determination described in this subsection

15 under guidelines established by the Secretary in

16 regulations.

17 ‘‘(c) CONDUCT OF RECONSIDERATIONS BY INDE18 PENDENT CONTRACTORS.—

19 ‘‘(1) IN GENERAL.—The Secretary shall enter

20 into contracts with qualified independent contractors

21 to conduct reconsiderations of initial determinations

22 made under subparagraphs (B) and (C) of sub23 section (a)(1), if such determinations involve either

24 whether a particular item or service is covered with

25 respect to an individual making a claim for benefit
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1 or the amount, duration or scope of an item or serv2 ice to which an individual making a claim for bene3 fits is eligible. Contracts shall be for an initial term

4 of three years and shall be renewable on a triennial

5 basis thereafter. This subsection shall not apply to

6 claims for persons that involve only the amount of

7 payment or the type of payment available with re8 spect to an item or service.

9 ‘‘(2) QUALIFIED INDEPENDENT CON10 TRACTOR.—For purposes of this subsection, the

11 term ‘qualified independent contractor’ means an en12 tity or organization that is independent of any orga13 nization under contract with the Secretary that

14 makes initial determinations under subsection

15 (a)(1), and that meets the requirements established

16 by the Secretary consistent with paragraph (3).

17 ‘‘(3) REQUIREMENTS.—Any qualified inde18 pendent contractor entering into a contract with the

19 Secretary under this subsection shall meet the all of

20 the following requirements:

21 ‘‘(A) IN GENERAL.—The qualified inde22 pendent contractor shall perform such duties

23 and functions and assume such responsibilities

24 as may be required by the Secretary to carry

25 out the provisions of this subsection, and shall
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1 have sufficient training and expertise in medical

2 science and legal matters to make reconsider3 ations under this subsection.

4 ‘‘(B) RECONSIDERATIONS.—

5 ‘‘(i) IN GENERAL.—Subject to sub6 section (b)(1)(A)(ii), the qualified inde7 pendent contractor shall review initial de8 terminations. In the case an initial deter9 mination made with respect to whether an

10 item or service is reasonable and necessary

11 for the diagnosis or treatment of illness or

12 injury (under section 1862(a)(1)(A)), such

13 review shall include consideration of the

14 facts and circumstances of the initial de15 termination by a panel of physicians or

16 other appropriate health care professionals

17 and any decisions with respect to the re18 consideration shall be based on applicable

19 information, including clinical experience

20 and medical, technical, and scientific evi21 dence.

22 ‘‘(C) DEADLINES FOR DECISIONS.—

23 ‘‘(i) RECONSIDERATIONS.—Except as

24 provided in clauses (iii) and (iv), and in ac25 cordance with subsections (d), (e), and (f),
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1 the qualified independent contractor shall

2 conduct and conclude a reconsideration

3 under subparagraph (B), and mail the no4 tice of the decision with respect to the re5 consideration in accordance with the med6 ical needs of the individual but not later

7 than the end of the 30-day period begin8 ning on the date a request for reconsider9 ation has been timely filed.

10 ‘‘(ii) CONSEQUENCES OF FAILURE TO

11 MEET DEADLINE.—In the case of a failure

12 by the qualified independent contractor to

13 mail the notice of the decision by the end

14 of the period described in clause (i), or by

15 the end of the applicable period described

16 in subsections (d) through (f), or to pro17 vide notice by the end of the period de18 scribed in clause (iii), as the case may be,

19 the party requesting the reconsideration or

20 appeal may request a hearing before the

21 Secretary, notwithstanding any require22 ments for a reconsidered determination for

23 purposes of the party’s right to such hear24 ing.
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1 ‘‘(iii) EXPEDITED RECONSIDER2 ATIONS.—The qualified independent con3 tractor shall perform an expedited recon4 sideration under subsection (b)(1)(F) as

5 follows:

6 ‘‘(I) DEADLINE FOR DECISION.—

7 Notwithstanding section 216(j) and

8 subject to clause (iv), not later than

9 the end of the 72-hour period begin10 ning on the date the qualified inde11 pendent contractor has received a re12 quest for such reconsideration and has

13 received such medical or other records

14 needed for such reconsideration, the

15 qualified independent contractor shall

16 provide notice (by telephone and in

17 writing) to the individual and the pro18 vider of services and attending physi19 cian of the individual of the results of

20 the reconsideration. Such reconsider21 ation shall be conducted regardless of

22 whether the provider of services or

23 supplier will charge the individual for

24 continued services or whether the indi-
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1 vidual will be liable for payment for

2 such continued services.

3 ‘‘(II) CONSULTATION WITH BEN4 EFICIARY.—In such reconsideration,

5 the qualified independent contractor

6 shall solicit the views of the individual

7 involved.

8 ‘‘(III) SPECIAL RULE FOR HOS9 PITAL DISCHARGES.—A reconsider10 ation of a discharge from a hospital

11 shall be conducted under this clause

12 in accordance with the provisions of

13 paragraphs (2), (3), and

14 ‘‘(4) of section 1154(e) as in effect on the date

15 that precedes the date of the enactment of this sub16 paragraph.

17 ‘‘(iv) EXTENSION.—An individual re18 questing a reconsideration under this sub19 paragraph may be granted such additional

20 time as the individual specifies (not to ex21 ceed 14 days) for the qualified independent

22 contractor to conclude the reconsideration.

23 The individual may request such additional

24 time orally or in writing.
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1 ‘‘(D) LIMITATION ON INDIVIDUAL REVIEW2 ING DETERMINATIONS.—

3 ‘‘(i) PHYSICIANS AND HEALTH CARE

4 PROFESSIONAL.—No physician or health

5 care professional under the employ of a

6 qualified independent contractor may

7 review—

8 ‘‘(I) determinations regarding

9 health care services furnished to a pa10 tient if the physician or health care

11 professional was directly responsible

12 for furnishing such services; or

13 ‘‘(II) determinations regarding

14 health care services provided in or by

15 an institution, organization, or agen16 cy, if the physician or any member of

17 the family of the physician or health

18 care professional has, directly or indi19 rectly, a significant financial interest

20 in such institution, organization, or

21 agency.

22 ‘‘(ii) FAMILY DESCRIBED.—For pur23 poses of this paragraph, the family of a

24 physician or health care professional in25 cludes the spouse (other than a spouse who
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1 is legally separated from the physician or

2 health care professional under a decree of

3 divorce or separate maintenance), children

4 including stepchildren and legally adopted

5 children), grandchildren, parents, and

6 grandparents of the physician or health

7 care professional.

8 ‘‘(E) EXPLANATION OF DECISION.—Any

9 decision with respect to a reconsideration of a

10 qualified independent contractor shall be in

11 writing, and shall include a detailed explanation

12 of the decision as well as a discussion of the

13 pertinent facts and applicable regulations ap14 plied in making such decision, and in the case

15 of a determination of whether an item or serv16 ice is reasonable and necessary for the diag17 nosis or treatment of illness or injury (under

18 section 1862(a)(1)(A)) an explanation of the

19 medical and scientific rationale for the decision.

20 ‘‘(F) NOTICE REQUIREMENTS.—Whenever

21 a qualified independent contractor makes a de22 cision with respect to a reconsideration under

23 this subsection, the qualified independent con24 tractor shall promptly notify the entity respon-
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1 sible for the payment of claims under part A or

2 part B of such decision.

3 ‘‘(G) DISSEMINATION OF DECISIONS ON

4 RECONSIDERATIONS.—Each qualified inde5 pendent contractor shall make available all deci6 sions with respect to reconsiderations of such

7 qualified independent contractors to fiscal inter8 mediaries (under section 1816), carriers (under

9 section 1842), peer review organizations (under

10 part B of title XI), Medicare+Choice organiza11 tions offering Medicare+Choice plans under

12 part C, other entities under contract with the

13 Secretary to make initial determinations under

14 part A or part B or title XI, and to the public.

15 The Secretary shall establish a methodology

16 under which qualified independent contractors

17 shall carry out this subparagraph.

18 ‘‘(H) ENSURING CONSISTENCY IN DECI19 SIONS.—Each qualified independent contractor

20 shall monitor its decisions with respect to re21 considerations to ensure the consistency of such

22 decisions with respect to requests for reconsid23 eration of similar or related matters.

24 ‘‘(I) DATA COLLECTION.—
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1 ‘‘(i) IN GENERAL.—Consistent with

2 the requirements of clause (ii), a qualified

3 independent contractor shall collect such

4 information relevant to its functions, and

5 keep and maintain such records in such

6 form and manner as the Secretary may re7 quire to carry out the purposes of this sec8 tion and shall permit access to and use of

9 any such information and records as the

10 Secretary may require for such purposes.

11 ‘‘(ii) TYPE OF DATA COLLECTED.—

12 Each qualified independent contractor

13 shall keep accurate records of each deci14 sion made, consistent with standards es15 tablished by the Secretary for such pur16 pose. Such records shall be maintained in

17 an electronic database in a manner that

18 provides for identification of the following:

19 ‘‘(I) Specific claims that give rise

20 to appeals.

21 ‘‘(II) Situations suggesting the

22 need for increased education for pro23 viders of services, physicians, or sup24 pliers.
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1 ‘‘(III) Situations suggesting the

2 need for changes in national or local

3 coverage policy.

4 ‘‘(IV) Situations suggesting the

5 need for changes in local medical re6 view policies.

7 ‘‘(iii) ANNUAL REPORTING.—Each

8 qualified independent contractor shall sub9 mit annually to the Secretary (or otherwise

10 as the Secretary may request) records

11 maintained under this paragraph for the

12 previous year.

13 ‘‘(J) HEARINGS BY THE SECRETARY.—The

14 qualified independent contractor shall (i) pre15 pare such information as is required for an ap16 peal of a decision of the contractor with respect

17 to a reconsideration to the Secretary for a hear18 ing, including as necessary, explanations of

19 issues involved in the decision and relevant poli20 cies, and

21 ‘‘(ii) participate in such hearings as

22 required by the Secretary.

23 ‘‘(4) NUMBER OF QUALIFIED INDEPENDENT

24 CONTRACTORS.—The Secretary shall enter into con-
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1 tracts with not fewer than 12 qualified independent

2 contractors under this subsection.

3 ‘‘(5) LIMITATION ON QUALIFIED INDEPENDENT

4 CONTRACTOR LIABILITY.—No qualified independent

5 contractor having a contract with the Secretary

6 under this subsection and no person who is em7 ployed by, or who has a fiduciary relationship with,

8 any such qualified independent contractor or who

9 furnishes professional services to such qualified inde10 pendent contractor, shall be held by reason of the

11 performance of any duty, function, or activity re12 quired or authorized pursuant to this subsection or

13 to a valid contract entered into under this sub14 section, to have violated any criminal law, or to be

15 civilly liable under any law of the United States or

16 of any State (or political subdivision thereof) pro17 vided due care was exercised in the performance of

18 such duty, function, or activity.

19 ‘‘(d) MEDICAL EXIGENT PROCESS FOR CONTRAC20 TORS.—

21 ‘‘(1) IN GENERAL.—An individual may request,

22 either orally or in writing, a medically exigent review

23 under subsection (b). Such request shall be made to

24 the contractor who made the initial determination.
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1 ‘‘(2) CONDITIONS FOR GRANTING A MEDICAL

2 EXIGENT REVIEW.—

3 ‘‘(A) the contractor determines that the

4 application of the standard time frame for con5 ducting a redetermination under subsection

6 (a)(3) could seriously jeopardize the life or

7 health of the individual or such individual’s

8 ability to attain, maintain, or regain maximum

9 function, or

10 ‘‘(B) the individual submits a certification

11 from a physician that the jeopardy could occur.

12 ‘‘(3) DEADLINE FOR MEDICAL EXIGENT RE13 VIEWS.—If an individual is granted a medical exi14 gent review under this subsection, the review shall

15 be conducted and notice of the review shall be made,

16 in accordance with the individual’s medical needs,

17 but no later than 72 hours after the request was

18 made.

19 ‘‘(4) FAILURE TO MEET TIME FRAMES.—In the

20 event the contractor who made the initial determina21 tion to meet the time frame in paragraph (3), the

22 individual may proceed to the next level of review.

23 ‘‘(e) MEDICAL EXIGENT PROCESS FOR QUALIFIED

24 INDEPENDENT CONTRACTORS.—
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1 ‘‘(1) IN GENERAL.—An individual may request,

2 either orally or in writing, a medically exigent recon3 sideration of a determination made under subsection

4 (d). Such request shall be made to the qualified

5 independent contractor.

6 ‘‘(2) CONDITIONS FOR GRANTING A MEDICAL

7 EXIGENT REVIEW.—

8 ‘‘(A) the qualified independent contractor

9 determines that the application of the standard

10 time frame for conducting a review could seri11 ously jeopardize the life or health of the indi12 vidual or such individual’s ability to attain,

13 maintain, or regain maximum function, or

14 ‘‘(B) the individual submits a certification

15 from a physician that the jeopardy could occur.

16 ‘‘(3) DEADLINE FOR MEDICAL EXIGENT RE17 VIEWS.—If an individual is granted a medical exi18 gent reconsideration under this paragraph, the re19 view shall be conducted and notice of the review

20 shall be made, in accordance with the individuals

21 medical needs, but no later than 72 hours after the

22 request was made.

23 ‘‘(4) FAILURE TO MEET TIME FRAMES.—In the

24 event the qualified independent contractor or the

25 Secretary fails to meet the time frame in paragraph
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1 (3), the individual may proceed to the next level of

2 review.

3 ‘‘(f) TIME FRAME FOR REVIEW BY SECRETARY.—

4 The Secretary shall conduct all reviews in a time frame

5 that is in accordance with the medical exigencies of the

6 case.

7 ‘‘(g) ADMINISTRATIVE PROVISIONS.—

8 ‘‘(1) LIMITATION ON REVIEW OF CERTAIN REG9 ULATIONS.—A regulation or instruction that relates

10 to a method for determining the amount of payment

11 under part B and that was initially issued before

12 January 1, 1981, shall not be subject to judicial re13 view.

14 ‘‘(2) OUTREACH.—The Secretary shall perform

15 such outreach activities as are necessary to inform

16 individuals entitled to benefits under this title and

17 providers of services and suppliers with respect to

18 their rights of, and the process for, appeals made

19 under this section. The Secretary shall use the toll20 free telephone number maintained by the Secretary

21 under section 1804(b) to provide information re22 garding appeal rights and respond to inquiries re23 garding the status of appeals.

24 ‘‘(3) CONTINUING EDUCATION REQUIREMENT

25 FOR QUALIFIED INDEPENDENT CONTRACTORS AND
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1 ADMINISTRATIVE LAW JUDGES.—The Secretary shall

2 provide to each qualified independent contractor,

3 and, in consultation with the Commissioner of Social

4 Security, to administrative law judges that decide

5 appeals of reconsiderations of initial determinations

6 or other decisions or determinations under this sec7 tion, such continuing education with respect to cov8 erage of items and services under this title or poli9 cies of the Secretary with respect to part B of title

10 XI as is necessary for such qualified independent

11 contractors and administrative law judges to make

12 informed decisions with respect to appeals.

13 ‘‘(4) REPORTS.—

14 ‘‘(A) ANNUAL REPORT TO CONGRESS.—

15 The Secretary shall submit to Congress an an16 nual report describing the number of appeals

17 for the previous year, identifying issues that re18 quire administrative or legislative actions, and

19 including any recommendations of the Secretary

20 with respect to such actions. The Secretary

21 shall include in such report an analysis of de22 terminations by qualified independent contrac23 tors with respect to inconsistent decisions and

24 an analysis of the causes of any such inconsist25 encies.
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1 ‘‘(B) SURVEY.—Not less frequently than

2 every 5 years, the Secretary shall conduct a

3 survey of a valid sample of individuals entitled

4 to benefits under this title who have filed ap5 peals of determinations under this section, pro6 viders of services, and suppliers to determine

7 the satisfaction of such individuals or entities

8 with the process for appeals of determinations

9 provided for under this section and education

10 and training provided by the Secretary with re11 spect to that process. The Secretary shall sub12 mit to Congress a report describing the results

13 of the survey, and shall include any rec14 ommendations for administrative or legislative

15 actions that the Secretary determines appro16 priate.

17 ‘‘(b) APPLICABILITY OF REQUIREMENTS AND LIMI18 TATIONS ON LIABILITY OF QUALIFIED INDEPENDENT

19 CONTRACTORS TO MEDICARE+CHOICE INDEPENDENT

20 APPEALS CONTRACTORS.—Section 1852(g)(4) (42 U.S.C.

21 1395w 22(g)(4)) is amended by adding at the end the fol22 lowing: The provisions of section 1869(c)(5) shall apply

23 to independent outside entities under contract with the

24 Secretary under this paragraph.
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1 ‘‘(c) CONFORMING AMENDMENT.—Section 1154(e)

2 (42 U.S.C. 1320c–3(e)) is amended by striking para3 graphs (2), (3), and (4).

4 ‘‘(d) EFFECTIVE DATE.—The amendments made by

5 this section apply with respect to initial determinations

6 made on or after October 1, 2002.’’.

7 SEC. 522. REVISIONS TO MEDICARE COVERAGE PROCESS.

8 (a) REVIEW OF DETERMINATIONS.—Section 1869

9 (42 U.S.C. 1395ff), as amended by section 521, is further

10 amended by adding at the end the following new sub11 section:

12 ‘‘(h) REVIEW OF COVERAGE DETERMINATIONS.—

13 ‘‘(1) NATIONAL COVERAGE DETERMINATIONS.—

14 ‘‘(A) IN GENERAL.—Review of any na15 tional coverage determination shall be subject to

16 the following limitations:

17 ‘‘(i) Such a determination shall not be

18 reviewed by any administrative law judge.

19 ‘‘(ii) Such a determination shall not

20 be held unlawful or set aside on the ground

21 that a requirement of section 553 of title

22 5, United States Code, or section 1871(b)

23 of this title, relating to publication in the

24 Federal Register or opportunity for public

25 comment, was not satisfied.
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1 ‘‘(iii) Upon the filing of a complaint

2 by an aggrieved party, the Secretary shall

3 provide for the review of a national cov4 erage determination by the advisory panel

5 established pursuant to paragraph (3)

6 (hereinafter referred to as the ‘‘Panel’’). In

7 conducting such a review, the Panel shall

8 review the record to evaluate whether the

9 determination is in accord with sound med10 ical practice, taking into account medical,

11 technological, or clinical advancements,

12 and any other medical, scientific, or other

13 relevant information that the Panel deems

14 reliable and may consider information that

15 was not available or was not considered at

16 the time of the determination. The Panel

17 shall make a recommendation to the Sec18 retary as to whether the determination

19 should be upheld, modified, or set aside,

20 and the Secretary shall have 30 days from

21 the receipt of such recommendation to

22 issue a decision.

23 ‘‘(iv) A decision of the Secretary

24 under (h)(1)(A)(iii) constitutes a final
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1 agency action and is subject to judicial re2 view.

3 ‘‘(B) DEFINITION OF NATIONAL COVERAGE

4 DETERMINATION.—For purposes of this section,

5 the term ‘national coverage determination’

6 means a determination by the Secretary with

7 respect to whether or not a particular item or

8 service is covered nationally under this title, but

9 does not include a determination of what code,

10 if any, is assigned to a particular item or serv11 ice covered under this title or a determination

12 with respect to the amount of payment made

13 for a particular item or service so covered.

14 ‘‘(2) LOCAL COVERAGE DETERMINATION.—

15 ‘‘(A) Upon the filing of a complaint by an

16 aggrieved party (except in the cases of issues

17 regarding the coding or supporting documenta18 tion), the Secretary shall provide for the review

19 of a local coverage determination by the Panel

20 as provided in (h)(3) except that for purposes

21 of a review under this subclause, the Panel

22 shall also consider any special circumstances

23 that may be relevant to the practice of medicine

24 in the locality. The Panel shall make a rec25 ommendation to the Secretary as to whether
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1 the determination should be upheld, modified,

2 or set aside, and the Secretary shall have 30

3 days from the receipt of such recommendation

4 to issue a decision to uphold the determination

5 or to remand it to the fiscal intermediary or

6 carrier for revision. A fiscal intermediary or

7 carrier shall have 30 days from the receipt of

8 any remand instructions from the Secretary in

9 which to complete such revision. The decision of

10 the Secretary shall have effect only with respect

11 to the local coverage determination. Such a de12 cision constitutes a final agency action and is

13 subject to judicial review.

14 ‘‘(B) DEFINITION OF LOCAL COVERAGE

15 DETERMINATION.—For purposes of this section,

16 the term ‘local coverage determination’ means a

17 determination by a fiscal intermediary or a car18 rier under part A or part B, as applicable, re19 specting whether or not a particular item or

20 service is covered on an intermediary- or car21 rier-wide basis under such parts, in accordance

22 with section 1862(a)(1)(A).

23 ‘‘(3) ESTABLISHMENT OF MEDICAL ADVISORY

24 PANEL.—For the purposes of providing expert clin25 ical and scientific advice and recommendations to
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1 the Secretary regarding reconsiderations of national

2 or local coverage determinations under paragraphs

3 (1) and (2), the Secretary shall establish panels of

4 experts or use panels of experts (or members of such

5 panels) established before the date of enactment [in6 sert name of Act] or both. The Secretary shall ap7 point as members of any such panel persons the Sec8 retary determines to have an appropriate level of ex9 pertise in the subject matter, but shall not appoint

10 any individual who is in the regular full-time employ

11 of the Health Care Financing Administration or nay

12 individual who participated in the initial coverage

13 determination that is the subject of a reconsider14 ation request.

15 ‘‘(4) PENDING NATIONAL COVERAGE DETER16 MINATIONS.—

17 ‘‘(A) IN GENERAL.—In the event the Sec18 retary has not issued a national coverage or

19 noncoverage determination with respect to a

20 particular type or class of items or services, an

21 aggrieved person (as described in paragraph

22 (5)) may submit to the Secretary a request to

23 make such a determination with respect to such

24 items or services. By not later than the end of

25 the 90-day period beginning on the date the
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1 Secretary receives such a request (notwith2 standing the receipt by the Secretary of new

3 evidence (if any) during such 90-day period),

4 the Secretary shall take one of the following ac5 tions:

6 ‘‘(i) Issue a national coverage deter7 mination, with or without limitations.

8 ‘‘(ii) Issue a national noncoverage de9 termination.

10 ‘‘(iii) Issue a determination that no

11 national coverage or noncoverage deter12 mination is appropriate as of the end of

13 such 90-day period with respect to national

14 coverage of such items or services.

15 ‘‘(iv) Issue a notice that states that

16 the Secretary has not completed a review

17 of the request for a national coverage de18 termination and that includes an identi19 fication of the remaining steps in the Sec20 retary’s review process and a deadline by

21 which the Secretary will complete the re22 view and take an action described in sub23 clause (I), (II), or (III).

24 ‘‘(B) In the case of an action described in

25 clause (i)(IV), if the Secretary fails to take an
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1 action referred to in such clause by the deadline

2 specified by the Secretary under such clause,

3 then the Secretary is deemed to have taken an

4 action described in clause (i)(III) as of the

5 deadline.

6 ‘‘(C) When issuing a determination under

7 clause (i), the Secretary shall include an expla8 nation of the basis for the determination. An

9 action taken under clause (i) (other than sub10 clause (IV)) is deemed to be a national coverage

11 determination for purposes of review under sub12 paragraph (A).

13 ‘‘(5) STANDING.—An action under this sub14 section seeking review of a national coverage deter15 mination or local coverage determination may be ini16 tiated only by individuals entitled to benefits under

17 part A, or enrolled under part B, or both, who are

18 in need of the items or services that are the subject

19 of the coverage determination.

20 ‘‘(6) PUBLICATION ON THE INTERNET OF DECI21 SIONS OF HEARINGS OF THE SECRETARY.—Each de22 cision of a hearing by the Secretary with respect to

23 a national coverage determination shall be made

24 public, and the Secretary shall publish each decision

25 on the Medicare Internet site of the Department of
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1 Health and Human Services. The Secretary shall re2 move from such decision any information that would

3 identify any individual, provider of services, or sup4 plier.

5 ‘‘(7) ANNUAL REPORT ON NATIONAL COVERAGE

6 DETERMINATIONS.—

7 ‘‘(A) IN GENERAL.—Not later than De8 cember 1 of each year, beginning in 2001, the

9 Secretary shall submit to Congress a report

10 that sets forth a detailed compilation of the ac11 tual time periods that were necessary to com12 plete and fully implement national coverage de13 terminations that were made in the previous fis14 cal year for items, services, or medical devices

15 not previously covered as a benefit under this

16 title, including, with respect to each new item,

17 service, or medical device, a statement of the

18 time taken by the Secretary to make and imple19 ment the necessary coverage, coding, and pay20 ment determinations, including the time taken

21 to complete each significant step in the process

22 of making and implementing such determina23 tions.

24 ‘‘(B) PUBLICATION OF REPORTS ON THE

25 INTERNET.—The Secretary shall publish each
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1 report submitted under clause (i) on the medi2 care Internet site of the Department of Health

3 and Human Services.

4 ‘‘(8) CONSTRUCTION.—Nothing in this sub5 section shall be construed as permitting administra6 tive or judicial review pursuant to this section inso7 far as such review is explicitly prohibited or re8 stricted under another provision of law.’’.

9 (b) ESTABLISHMENT OF A PROCESS FOR COVERAGE

10 DETERMINATIONS.—Section 1862(a) (42 U.S.C.

11 1395y(a)) is amended by adding at the end the following

12 new sentence: ‘‘In making a national coverage determina13 tion (as defined in paragraph (1)(B) of section 1869(f))

14 the Secretary shall ensure that the public is afforded no15 tice and opportunity to comment prior to implementation

16 by the Secretary of the determination; meetings of advi17 sory committees established under section 1114(f) with re18 spect to the determination are made on the record; in

19 making the determination, the Secretary has considered

20 applicable information (including clinical experience and

21 medical, technical, and scientific evidence) with respect to

22 the subject matter of the determination; and in the deter23 mination, provide a clear statement of the basis for the

24 determination (including responses to comments received

25 from the public), the assumptions underlying that basis,
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1 and make available to the public the data (other than pro2 prietary data) considered in making the determination.

3 (c) IMPROVEMENTS TO THE MEDICARE ADVISORY

4 COMMITTEE PROCESS.—Section 1114 (42 U.S.C. 1314)

5 is amended by adding at the end the following new sub6 section:

7 ‘‘(i)(1) Any advisory committee appointed under sub8 section (f) to advise the Secretary on matters relating to

9 the interpretation, application, or implementation of sec10 tion 1862(a)(1) shall assure the full participation of a

11 nonvoting member in the deliberations of the advisory

12 committee, and shall provide such nonvoting member ac13 cess to all information and data made available to voting

14 members of the advisory committee, other than informa15 tion that—

16 ‘‘(A) is exempt from disclosure pursuant to sub17 section q(a) of section 552 of title 5, United States

18 Code, by reason of subsection (b)(4) of such section

19 (relating to trade secrets); or

20 ‘‘(B) the Secretary determines would present a

21 conflict of interest relating to such nonvoting mem22 ber.

23 ‘‘(2) If an advisory committee described in paragraph

24 (1) organizes into panels of experts according to types of

25 items or services considered by the advisory committee,
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1 any such panel of experts may report any recommendation

2 with respect to such items or services directly to the Sec3 retary without the prior approval of the advisory com4 mittee or an executive committee thereof.’’.

5 (d) EFFECTIVE DATE.—The amendments made by

6 this section apply with respect to—

7 (1) a review of any national or local coverage

8 determination filed,

9 (2) a request to make such a determination

10 made,

11 (3) a national coverage determination made, on

12 or after October 1, 2001.

13 Subtitle D—Improving Access to

14 New Technologies

15 SEC. 531. REIMBURSEMENT IMPROVEMENTS FOR NEW

16 CLINICAL LABORATORY TESTS AND DURA17 BLE MEDICAL EQUIPMENT.

18 (a) PAYMENT RULE FOR NEW LABORATORY

19 TESTS.—Section 1833(h)(4)(B)(viii) (42 U.S.C.

20 1395l(h)(4)(B)(viii)) is amended by inserting before the

21 period at the end the following: ‘‘(or 100 percent of such

22 median in the case of a clinical diagnostic laboratory test

23 performed on or after January 1, 2001, that the Secretary

24 determines is a new test for which no limitation amount
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1 has previously been established under this subpara2 graph)’’.

3 (b) ESTABLISHMENT OF CODING AND PAYMENT

4 PROCEDURES FOR NEW CLINICAL DIAGNOSTIC LABORA5 TORY TESTS AND OTHER ITEMS ON A FEE SCHEDULE.—

6 Not later than 1 year after the date of the enactment of

7 this Act, the Secretary of Health and Human Services

8 shall establish procedures for coding and payment deter9 minations for the categories of new clinical diagnostic lab10 oratory tests and new durable medical equipment under

11 part B of the title XVIII of the Social Security Act that

12 permit public consultation in a manner consistent with the

13 procedures established for implementing coding modifica14 tions for ICD–9–CM.

15 (c) REPORT ON PROCEDURES USED FOR ADVANCED,

16 IMPROVED TECHNOLOGIES.—Not later than 1 year after

17 the date of the enactment of this Act, the Secretary of

18 Health and Human Services shall submit to Congress a

19 report that identifies the specific procedures used by the

20 Secretary under part B of title XVIII of the Social Secu21 rity Act to adjust payments for clinical diagnostic labora22 tory tests and durable medical equipment which are classi23 fied to existing codes where, because of an advance in

24 technology with respect to the test or equipment, there has

25 been a significant increase or decrease in the resources
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1 used in the test or in the manufacture of the equipment,

2 and there has been a significant improvement in the per3 formance of the test or equipment. The report shall in4 clude such recommendations for changes in law as may

5 be necessary to assure fair and appropriate payment levels

6 under such part for such improved tests and equipment

7 as reflects increased costs necessary to produce improved

8 results.

9 SEC. 532. RETENTION OF HCPCS LEVEL III CODES.

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

11 Human Services shall maintain and continue the use of

12 level III codes of the HCPCS coding system (as such sys13 tem was in effect on August 16, 2000) through December

14 31, 2003, and shall make such codes available to the pub15 lic.

16 (b) DEFINITION.—For purposes of this section, the

17 term ‘‘HCPCS Level III codes’’ means the alphanumeric

18 codes for local use under the Health Care Financing Ad19 ministration Common Procedure Coding System

20 (HCPCS).

21 SEC. 533. RECOGNITION OF NEW MEDICAL TECHNOLOGIES

22 UNDER INPATIENT HOSPITAL PPS.

23 (a) EXPEDITING RECOGNITION OF NEW TECH24 NOLOGIES INTO INPATIENT PPS CODING SYSTEM.—
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1 (1) REPORT.—Not later than April 1, 2001, the

2 Secretary of Health and Human Services shall sub3 mit to Congress a report on methods of expeditiously

4 incorporating new medical services and technologies

5 into the clinical coding system used with respect to

6 payment for inpatient hospital services furnished

7 under the medicare program under title XVIII of the

8 Social Security Act, together with a detailed descrip9 tion of the Secretary’s preferred methods to achieve

10 this purpose.

11 (2) IMPLEMENTATION.—Not later than October

12 1, 2001, the Secretary shall implement the preferred

13 methods described in the report transmitted pursu14 ant to paragraph (1).

15 (b) ENSURING APPROPRIATE PAYMENTS FOR HOS16 PITALS INCORPORATING NEW MEDICAL SERVICES AND

17 TECHNOLOGIES.—

18 (1) ESTABLISHMENT OF MECHANISM.—Section

19 1886(d)(5) (42 U.S.C. 1395ww(d)(5)) is amended

20 by adding at the end the following new subpara21 graphs:

22 ‘‘(K)(i) Effective for discharges beginning on or after

23 October 1, 2001, the Secretary shall establish a mecha24 nism to recognize the costs of new medical services and

25 technologies under the payment system established under
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1 this subsection. Such mechanism shall be established after

2 notice and opportunity for public comment (in the publica3 tions required by subsection (e)(5) for a fiscal year or oth4 erwise).

5 ‘‘(ii) The mechanism established pursuant to clause

6 (i) shall—

7 ‘‘(I) apply to a new medical service or tech8 nology if, based on the estimated costs incurred with

9 respect to discharges involving such service or tech10 nology, the DRG prospective payment rate otherwise

11 applicable to such discharges under this subsection

12 is inadequate;

13 ‘‘(II) provide for the collection of data with re14 spect to the costs of a new medical service or tech15 nology described in subclause (I) for a period of not

16 less than two years and not more than three years

17 beginning on the date on which an inpatient hospital

18 code is issued with respect to the service or tech19 nology;

20 ‘‘(III) subject to paragraph (4)(C)(iii), provide

21 for additional payment to be made under this sub22 section with respect to discharges involving a new

23 medical service or technology described in subclause

24 (I) that occur during the period described in sub25 clause (II) in an amount that adequately reflects the
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1 estimated average cost of such service or technology;

2 and

3 ‘‘(IV) provide that discharges involving such a

4 service or technology that occur after the close of the

5 period described in subclause (II) will be classified

6 within a new or existing diagnosis-related group with

7 a weighting factor under paragraph (4)(B) that is

8 derived from cost data collected with respect to dis9 charges occurring during such period.

10 ‘‘(iii) For purposes of clause (ii)(II), the term ‘inpa11 tient hospital code’ means any code that is used with re12 spect to inpatient hospital services for which payment may

13 be made under this subsection and includes an alpha14 numeric code issued under the International Classification

15 of Diseases, 9th Revision, Clinical Modification (‘ICD–9–

16 CM’) and its subsequent revisions.

17 ‘‘(iv) For purposes of clause (ii)(III), the term ‘addi18 tional payment’ means, with respect to a discharge for a

19 new medical service or technology described in clause

20 (ii)(I), an amount that exceeds the prospective payment

21 rate otherwise applicable under this subsection to dis22 charges involving such service or technology that would

23 be made but for this subparagraph.

24 ‘‘(v) The requirement under clause (ii)(III) for an ad25 ditional payment may be satisfied by means of a new-tech-
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1 nology group (described in subparagraph (L)), an add-on

2 payment, a payment adjustment, or any other similar

3 mechanism for increasing the amount otherwise payable

4 with respect to a discharge under this subsection. The Sec5 retary may not establish a separate fee schedule for such

6 additional payment for such services and technologies, by

7 utilizing a methodology established under subsection (a)

8 or (h) of section 1834 to determine the amount of such

9 additional payment, or by other similar mechanisms or

10 methodologies.

11 ‘‘(vi) For purposes of this subparagraph and sub12 paragraph (L), a medical service or technology will be con13 sidered a ‘new medical service or technology’ if the service

14 or technology meets criteria established by the Secretary

15 after notice and an opportunity for public comment.

16 ‘‘(L)(i) In establishing the mechanism under sub17 paragraph (K), the Secretary may establish new-tech18 nology groups into which a new medical service or tech19 nology will be classified if, based on the estimated average

20 costs incurred with respect to discharges involving such

21 service or technology, the DRG prospective payment rate

22 otherwise applicable to such discharges under this sub23 section is inadequate.

24 ‘‘(ii) Such groups—
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1 ‘‘(I) shall not be based on the costs associated

2 with a specific new medical service or technology;

3 but

4 ‘‘(II) shall, in combination with the applicable

5 standardized amounts and the weighting factors as6 signed to such groups under paragraph (4)(B), re7 flect such cost cohorts as the Secretary determines

8 are appropriate for all new medical services and

9 technologies that are likely to be provided as inpa10 tient hospital services in a fiscal year.

11 ‘‘(iii) The methodology for classifying specific hos12 pital discharges within a diagnosis-related group under

13 paragraph (4)(A) or a new-technology group shall provide

14 that a specific hospital discharge may not be classified

15 within both a diagnosis-related group and a new-tech16 nology group.’’.

17 (2) PRIOR CONSULTATION.—The Secretary of

18 Health and Human Services shall consult with

19 groups representing hospitals, physicians, and manu20 facturers of new medical technologies before pub21 lishing the notice of proposed rulemaking required

22 by section 1886(d)(5)(K)(i) of the Social Security

23 Act (as added by paragraph (1)).

24 (3) CONFORMING AMENDMENT.—Section

25 1886(d)(4)(C)(i) (42 U.S.C. 1395ww(d)(4)(C)(i)) is
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1 amended by striking ‘‘technology,’’ and inserting

2 ‘‘technology (including a new medical service or

3 technology under paragraph (5)(K)),’’.

4 Subtitle E—Other Provisions

5 SEC. 541. INCREASE IN REIMBURSEMENT FOR BAD DEBT.

6 Section 1861(v)(1)(T) (42 U.S.C. 1395x(v)(1)(T)) is

7 amended—

8 (1) in clause (ii), by striking ‘‘and’’ at the end;

9 (2) in clause (iii)—

10 (A) by striking ‘‘during a subsequent fiscal

11 year’’ and inserting ‘‘during fiscal year 2000’’;

12 and

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

14 inserting ‘‘, and’’; and

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

16 clause:

17 ‘‘(iv) for cost reporting periods beginning dur18 ing a subsequent fiscal year, by 30 percent of such

19 amount otherwise allowable.’’.

20 SEC. 542. TREATMENT OF CERTAIN PHYSICIAN PATHOLOGY

21 SERVICES UNDER MEDICARE.

22 (a) IN GENERAL.—When an independent laboratory

23 furnishes the technical component of a physician pathol24 ogy service to a fee-for-service medicare beneficiary who

25 is an inpatient or outpatient of a covered hospital, the Sec-
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1 retary of Health and Human Services shall treat such

2 component as a service for which payment shall be made

3 to the laboratory under section 1848 of the Social Security

4 Act (42 U.S.C. 1395w–4) and not as an inpatient hospital

5 service for which payment is made to the hospital under

6 section 1886(d) of such Act (42 U.S.C. 1395ww(d)) or

7 as an outpatient hospital service for which payment is

8 made to the hospital under section 1833(t) of such Act

9 (42 U.S.C. 1395l(t)).

10 (b) DEFINITIONS.—For purposes of this section:

11 (1) COVERED HOSPITAL.—The term ‘‘covered

12 hospital’’ means, with respect to an inpatient or an

13 outpatient, a hospital that had an arrangement with

14 an independent laboratory that was in effect as of

15 July 22, 1999, under which a laboratory furnished

16 the technical component of physician pathology serv17 ices to fee-for-service medicare beneficiaries who

18 were hospital inpatients or outpatients, respectively,

19 and submitted claims for payment for such compo20 nent to a medicare carrier (that has a contract with

21 the Secretary under section 1842 of the Social Secu22 rity Act, 42 U.S.C. 1395u) and not to such hospital.

23 (2) FEE-FOR-SERVICE MEDICARE BENE24 FICIARY.—The term ‘‘fee-for-service medicare bene25 ficiary’’ means an individual who—
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1 (A) is entitled to benefits under part A, or

2 enrolled under part B, or both, of such title;

3 and

4 (B) is not enrolled in any of the following:

5 (i) A Medicare+Choice plan under

6 part C of such title.

7 (ii) A plan offered by an eligible orga8 nization under section 1876 of such Act

9 (42 U.S.C. 1395mm).

10 (iii) A program of all-inclusive care

11 for the elderly (PACE) under section 1894

12 of such Act (42 U.S.C. 1395eee).

13 (iv) A social health maintenance orga14 nization (SHMO) demonstration project

15 established under section 4018(b) of the

16 Omnibus Budget Reconciliation Act of

17 1987 (Public Law 100–203).

18 (c) EFFECTIVE DATE.—This section applies to serv19 ices furnished during the 2-year period beginning on Jan20 uary 1, 2001.

21 (d) GAO REPORT.—

22 (1) STUDY.—The Comptroller General of the

23 United States shall conduct a study of the effects of

24 the previous provisions of this section on hospitals

25 and laboratories and access of fee-for-service medi-
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1 care beneficiaries to the technical component of phy2 sician pathology services.

3 (2) REPORT.—Not later than April 1, 2002, the

4 Comptroller General shall submit to Congress a re5 port on such study. The report shall include rec6 ommendations about whether such provisions should

7 be extended after the end of the period specified in

8 subsection (c) for either or both inpatient and out9 patient hospital services, and whether the provisions

10 should be extended to other hospitals.

11 SEC. 543. EXTENSION OF ADVISORY OPINION AUTHORITY.

12 Section 1128D(b)(6) (42 U.S.C. 1320a–7d(b)(6)) is

13 amended by striking ‘‘and before the date which is 4 years

14 after such date of enactment’’.

15 SEC. 544. CHANGE IN ANNUAL MEDPAC REPORTING.

16 (a) REVISION OF DEADLINES FOR SUBMISSION OF

17 REPORTS.—

18 (1) IN GENERAL.—Section 1805(b)(1)(D) (42

19 U.S.C. 1395b–6(b)(1)(D)) is amended by striking

20 ‘‘June 1 of each year (beginning with 1998),’’ and

21 inserting ‘‘June 15 of each year,’’.

22 (2) EFFECTIVE DATE.—The amendment made

23 by paragraph (1) applies beginning with 2001.

24 (b) REQUIREMENT FOR ON THE RECORD VOTES ON

25 RECOMMENDATIONS.—Section 1805(b) (42 U.S.C.
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1 1395b–6(b)) is amended by adding at the end the fol2 lowing new paragraph:

3 ‘‘(7) VOTING AND REPORTING REQUIRE4 MENTS.—With respect to each recommendation con5 tained in a report submitted under paragraph (1),

6 each member of the Commission shall vote on the

7 recommendation, and the Commission shall include,

8 by member, the results of that vote in the report

9 containing the recommendation.’’.

10 SEC. 545. DEVELOPMENT OF PATIENT ASSESSMENT IN11 STRUMENTS.

12 (a) DEVELOPMENT.—

13 (1) IN GENERAL.—Not later than January 1,

14 2005, the Secretary of Health and Human Services

15 shall submit to the Committee on Ways and Means

16 and the Committee on Commerce of the House of

17 Representatives and the Committee on Finance of

18 the Senate a report on the development of standard

19 instruments for the assessment of the health and

20 functional status of patients, for whom items and

21 services described in subsection (b) are furnished,

22 and include in the report a recommendation on the

23 use of such standard instruments for payment pur24 poses.
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1 (2) DESIGN FOR COMPARISON OF COMMON ELE2 MENTS.—The Secretary shall design such standard

3 instruments in a manner such that—

4 (A) elements that are common to the items

5 and services described in subsection (b) may be

6 readily comparable and are statistically compat7 ible;

8 (B) only elements necessary to meet pro9 gram objectives are collected; and

10 (C) the standard instruments supersede

11 any other assessment instrument used before

12 that date.

13 (3) CONSULTATION.—In developing an assess14 ment instrument under paragraph (1), the Secretary

15 shall consult with the Medicare Payment Advisory

16 Commission, the Agency for Healthcare Research

17 and Quality, and qualified organizations rep18 resenting providers of services and suppliers under

19 title XVIII.

20 (b) DESCRIPTION OF SERVICES.—For purposes of

21 subsection (a), items and services described in this sub22 section are those items and services furnished to individ23 uals entitled to benefits under part A, or enrolled under

24 part B, or both of title XVIII of the Social Security Act
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1 for which payment is made under such title, and include

2 the following:

3 (1) Inpatient and outpatient hospital services.

4 (2) Inpatient and outpatient rehabilitation serv5 ices.

6 (3) Covered skilled nursing facility services.

7 (4) Home health services.

8 (5) Physical or occupational therapy or speech9 language pathology services.

10 (6) Items and services furnished to such indi11 viduals determined to have end stage renal disease.

12 (7) Partial hospitalization services and other

13 mental health services.

14 (8) Any other service for which payment is

15 made under such title as the Secretary determines to

16 be appropriate.

17 SEC. 546. GAO REPORT ON IMPACT OF THE EMERGENCY

18 MEDICAL TREATMENT AND ACTIVE LABOR

19 ACT (EMTALA) ON HOSPITAL EMERGENCY DE20 PARTMENTS.

21 (a) REPORT.—The Comptroller General of the

22 United States shall submit a report to the Committee on

23 Commerce and the Committee on Ways and Means of the

24 House of Representatives and the Committee on Finance

25 of the Senate by May 1, 2001, on the effect of the Emer-
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1 gency Medical Treatment and Active Labor Act on hos2 pitals, emergency physicians, and physicians covering

3 emergency department call throughout the United States.

4 (b) REPORT REQUIREMENTS.—The report should

5 evaluate—

6 (1) the extent to which hospitals, emergency

7 physicians, and physicians covering emergency de8 partment call provide uncompensated services in re9 lation to the requirements of EMTALA;

10 (2) the extent to which the regulatory require11 ments and enforcement of EMTALA have expanded

12 beyond the legislation’s original intent;

13 (3) estimates for the total dollar amount of

14 EMTALA-related care uncompensated costs to

15 emergency physicians, physicians covering emer16 gency department call, hospital emergency depart17 ments, and other hospital services;

18 (4) the extent to which different portions of the

19 United States may be experiencing different levels of

20 uncompensated EMTALA-related care;

21 (5) the extent to which EMTALA would be

22 classified as an unfunded mandate if it were enacted

23 today;
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1 (6) the extent to which States have programs to

2 provide financial support for such uncompensated

3 care;

4 (7) possible sources of funds, including medi5 care hospital bad debt accounts, that are available to

6 hospitals to assist with the cost of such uncompen7 sated care; and

8 (8) the financial strain that illegal immigration

9 populations, the uninsured, and the underinsured

10 place on hospital emergency departments, other hos11 pital services, emergency physicians, and physicians

12 covering emergency department call.

13 (c) DEFINITION.—In this section, the terms ‘‘Emer14 gency Medical Treatment and Active Labor Act’’ and

15 ‘‘EMTALA’’ mean section 1867 of the Social Security Act

16 (42 U.S.C. 1395dd).

17 SEC. 547. APPLICATION OF BLOODBORNE PATHOGEN

18 STANDARD TO CERTAIN HOSPITALS.

19 (a) IN GENERAL.—Section 1866 (42 U.S.C. 1395cc)

20 is amended—

21 (1) in subsection (a)(1)—

22 (A) in subparagraph (R), by striking

23 ‘‘and’’ at the end;

24 (B) in subparagraph (S), by striking the

25 period at the end and inserting ‘‘, and’’; and
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1 (C) by inserting after subparagraph (S)

2 the following new subparagraph:

3 ‘‘(T) in the case of hospitals that are not other4 wise subject to regulation by the Occupational Safe5 ty and Health Administration, to comply with the

6 Bloodborne Pathogens standard under section

7 1910.1030 of title 29 of the Code of Federal Regula8 tions (or as subsequently redesignated).’’; and

9 (2) by adding at the end of subsection (b) the

10 following new paragraph:

11 ‘‘(4) With respect to a failure to comply with the re12 quirement of subsection (a)(1)(T), the Secretary shall not

13 terminate an agreement under this section but shall im14 pose a monetary fine in an amount similar to the amount

15 of civil penalties that may be imposed under section 17

16 of the Occupational Safety and Health Act of 1970 for

17 a violation of the standard referred to in such subsection

18 by a hospital subject to regulation by the Occupational

19 Safety and Health Administration. Such penalty shall be

20 imposed and collected in the same manner as civil money

21 penalties under subsection (a) of section 1128A are im22 posed and collected under that section.’’.

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

24 this section apply to hospitals as of January 1, 2002.
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1 TITLE VI—PROVISIONS RELAT2 ING TO PART C

3 (MEDICARE+CHOICE PRO4 GRAM) AND OTHER MEDI5 CARE MANAGED CARE PROVI6 SIONS

7 Subtitle A—Medicare+Choice

8 Payment Reforms

9 SEC. 601. INCREASED PAYMENT FOR ACCOUNTABLE

10 MEDICARE+CHOICE PLANS.

11 Section 1853 (42 U.S.C. 1395w–23) is amended—

12 (1) in subsection (a)(1)(A), by striking ‘‘and

13 (i)’’ and inserting ‘‘(i), and (j)’’; and

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

16 ‘‘(j) INCREASED PAYMENT FOR ACCOUNTABLE

17 MEDICARE+CHOICE COORDINATED CARE PLANS.—

18 ‘‘(1) IN GENERAL.—In the case of a

19 Medicare+Choice coordinated care plan that enters

20 into a 3-year contract for the period of 2001

21 through 2003, the amount of the monthly payment

22 otherwise made under this section (taking into ac23 count, if applicable, subsection (i)), shall be in24 creased for each year of the contract period by the

25 amount necessary to ensure that the total monthly
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1 payment is equal to the greater of the adjusted min2 imum amount specified in paragraph (2) or an

3 amount equal to the otherwise applicable rate increased by 1 4 ⁄3 of 1 percent.

5 ‘‘(2) ADJUSTED MINIMUM AMOUNT.—For pur6 poses of this subsection, the adjusted minimum

7 amount shall equal—

8 ‘‘(A) in 2001—

9 ‘‘(i) for any payment area in a Metro10 politan Statistical Area or a Primary Met11 ropolitan Statistical Area, $525 per month;

12 and

13 ‘‘(ii) for any other payment area,

14 $475;

15 however, in the case of a payment area outside

16 the 50 States and the District of Columbia,

17 such amount shall not exceed 110 percent of

18 the minimum amount for such area for 2000.

19 ‘‘(B) in 2002 and 2003, the adjusted min20 imum amount for months during the previous

21 year increased by the national per capita

22 Medicare+Choice growth percentage, described

23 in subsection (c)(6)(A) for that succeeding year.

24 ‘‘(3) PENALTY FOR CONTRACT TERMINATION.—

25 In the case of a Medicare+Choice coordinated care
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1 plan described in paragraph (1) whose contract is

2 terminated prior to the end of the 3-year contract

3 period, the Medicare+Choice organizations that of4 fered such plan shall return to the Secretary an

5 amount equal to twice the total of the increased pay6 ments provided under this section. Such moneys

7 shall be deposited in the Federal Hospital Insurance

8 Trust Funds and the Federal Supplementary Med9 ical Insurance Trust Funds in such proportion as

10 the Secretary deems to be fair and equitable.’’.

11 SEC. 602. INCREASE IN MINIMUM PERCENTAGE INCREASE.

12 Section 1853(c)(1)(C)(ii) (42 U.S.C. 1395w–

13 23(c)(1)(C)(ii)) is amended by inserting ‘‘(or 103 percent

14 in the case of 2001)’’ after ‘‘102 percent’’.

15 SEC. 603. 10-YEAR PHASE-IN OF RISK ADJUSTMENT.

16 Section 1853(a)(3)(C)(ii) (42 U.S.C. 1395w–

17 23(a)(3)(C)(ii)) is amended—

18 (1) in subclause (I), by striking ‘‘and 2001’’

19 and inserting ‘‘and each succeeding year through the

20 first year in which risk adjustment is based on data

21 from inpatient hospital and ambulatory settings’’;

22 and

23 (2) by amending subclause (II) to read as fol24 lows:
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1 ‘‘(II) beginning after such first

2 year, insofar as such risk adjustment

3 is based on data from inpatient hos4 pital and ambulatory settings, the

5 methodology shall be phased in equal

6 increments over a 10-year period that

7 begins with such first year.’’.

8 SEC. 604. TRANSITION TO REVISED MEDICARE+CHOICE

9 PAYMENT RATES.

10 (a) ANNOUNCEMENT OF REVISED

11 MEDICARE+CHOICE PAYMENT RATES.—Within 2 weeks

12 after the date of the enactment of this Act, the Secretary

13 of Health and Human Services shall determine, and shall

14 announce (in a manner intended to provide notice to inter15 ested parties) Medicare+Choice capitation rates under

16 section 1853 of the Social Security Act (42 U.S.C.

17 1395w–23) for 2001, revised in accordance with the provi18 sions of this Act.

19 (b) REENTRY INTO PROGRAM PERMITTED FOR

20 MEDICARE+CHOICE PROGRAMS IN 2000.—A

21 Medicare+Choice organization that provided notice to the

22 Secretary of Health and Human Services before the date

23 of the enactment of this Act that it was terminating its

24 contract under part C of title XVIII of the Social Security

25 Act or was reducing the service area of a
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1 Medicare+Choice plan offered under such part shall be

2 permitted to continue participation under such part, or to

3 maintain the service area of such plan, for 2001 if it pro4 vides the Secretary with the information described in sec5 tion 1854(a)(1) of the Social Security Act (42 U.S.C.

6 1395w–24(a)(1)) within 2 weeks after the date revised

7 rates are announced by the Secretary under subsection

8 (a).

9 (c) REVISED SUBMISSION OF PROPOSED PREMIUMS

10 AND RELATED INFORMATION.—If—

11 (1) a Medicare+Choice organization provided

12 notice to the Secretary of Health and Human Serv13 ices as of July 3, 2000, that it was renewing its con14 tract under part C of title XVIII of the Social Secu15 rity Act for all or part of the service area or areas

16 served under its current contract, and

17 (2) any part of the service area or areas ad18 dressed in such notice includes a payment area for

19 which the Medicare+Choice capitation rate under

20 section 1853(c) of such Act (42 U.S.C. 1395w–

21 23(c)) for 2001, as determined under subsection (a),

22 is higher than the rate previously determined for

23 such year,

24 such organization shall revise its submission of the infor25 mation described in section 1854(a)(1) of the Social Secu-
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1 rity Act (42 U.S.C. 1395w–24(a)(1)), and shall submit

2 such revised information to the Secretary, within 2 weeks

3 after the date revised rates are announced by the Sec4 retary under subsection (a).

5 (d) DISREGARD OF NEW RATE ANNOUNCEMENT IN

6 APPLYING PASS-THROUGH FOR NEW NATIONAL COV7 ERAGE DETERMINATIONS.—For purposes of applying sec8 tion 1852(a)(5) of the Social Security Act (42 U.S.C.

9 1395w–22(a)(5)), the announcement of revised rates

10 under subsection (a) shall not be treated as an announce11 ment under section 1853(b) of such Act (42 U.S.C.

12 1395w–23(b)).

13 SEC. 605. REVISION OF PAYMENT RATES FOR ESRD PA14 TIENTS ENROLLED IN MEDICARE+CHOICE

15 PLANS.

16 (a) IN GENERAL.—Section 1853(a)(1)(B) (42 U.S.C.

17 1395w–23(a)(1)(B)) is amended by adding at the end the

18 following: ‘‘In establishing such rates, the Secretary shall

19 provide for appropriate adjustments to increase each rate

20 to reflect the demonstration rate (including the risk ad21 justment methodology associated with such rate) of the

22 social health maintenance organization end-stage renal

23 disease capitation demonstrations (established by section

24 2355 of the Deficit Reduction Act of 1984, as amended

25 by section 13567(b) of the Omnibus Budget Reconciliation
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1 Act of 1993), and shall compute such rates by taking into

2 account such factors as renal treatment modality, age, and

3 the underlying cause of the end-stage renal disease.’’.

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

5 subsection (a) shall apply to payments for months begin6 ning with January 2002.

7 (c) PUBLICATION.—Not later than 6 months after

8 the date of the enactment of this Act, the Secretary of

9 Health and Human Services shall publish for public com10 ment a description of the appropriate adjustments de11 scribed in the last sentence of section 1853(a)(1)(B) of

12 the Social Security Act (42 U.S.C. 1395w–23(a)(1)(B)),

13 as added by subsection (a). The Secretary shall publish

14 such adjustments in final form by not later than July 1,

15 2001, so that the amendment made by subsection (a) is

16 implemented on a timely basis consistent with subsection

17 (b).

18 SEC. 606. PERMITTING PREMIUM REDUCTIONS AS ADDI19 TIONAL BENEFITS UNDER

20 MEDICARE+CHOICE PLANS.

21 (a) IN GENERAL.—

22 (1) AUTHORIZATION OF PART B PREMIUM RE23 DUCTIONS.—Section 1854(f)(1) (42 U.S.C. 1395w–

24 24(f)(1)) is amended—
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1 (A) by redesignating subparagraph (E) as

2 subparagraph (F); and

3 (B) by inserting after subparagraph (D)

4 the following new subparagraph:

5 ‘‘(E) PREMIUM REDUCTIONS.—

6 ‘‘(i) IN GENERAL.—Subject to clause

7 (ii), as part of providing any additional

8 benefits required under subparagraph (A),

9 a Medicare+Choice organization may elect

10 a reduction in its payments under section

11 1853(a)(1)(A) with respect to a

12 Medicare+Choice plan and the Secretary

13 shall apply such reduction to reduce the

14 premium under section 1839 of each en15 rollee in such plan as provided in section

16 1840(i).

17 ‘‘(ii) AMOUNT OF REDUCTION.—The

18 amount of the reduction under clause (i)

19 with respect to any enrollee in a

20 Medicare+Choice plan—

21 ‘‘(I) may not exceed 125 percent

22 of the premium described under sec23 tion 1839(a)(3); and

24 ‘‘(II) shall apply uniformly to

25 each enrollee of the Medicare+Choice
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1 plan to which such reduction ap2 plies.’’.

3 (2) CONFORMING AMENDMENTS.—

4 (A) ADJUSTMENT OF PAYMENTS TO

5 MEDICARE+CHOICE ORGANIZATIONS.—Section

6 1853(a)(1)(A) (42 U.S.C. 1395w–23(a)(1)(A))

7 is amended by inserting ‘‘reduced by the

8 amount of any reduction elected under section

9 1854(f)(1)(E) and’’ after ‘‘for that area,’’.

10 (B) ADJUSTMENT AND PAYMENT OF PART

11 B PREMIUMS.—

12 (i) ADJUSTMENT OF PREMIUMS.—

13 Section 1839(a)(2) (42 U.S.C.

14 1395r(a)(2)) is amended by striking

15 ‘‘shall’’ and all that follows and inserting

16 the following: ‘‘shall be the amount deter17 mined under paragraph (3), adjusted as

18 required in accordance with subsections

19 (b), (c), and (f), and to reflect 80 percent

20 of any reduction elected under section

21 1854(f)(1)(E).’’.

22 (ii) PAYMENT OF PREMIUMS.—Section

23 1840 (42 U.S.C. 1395s) is amended by

24 adding at the end the following new sub25 section:
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1 ‘‘(i) In the case of an individual enrolled in a

2 Medicare+Choice plan, the Secretary shall provide for

3 necessary adjustments of the monthly beneficiary pre4 mium to reflect 80 percent of any reduction elected under

5 section 1854(f)(1)(E). This premium adjustment may be

6 provided directly or as an adjustment to any social secu7 rity, railroad retirement, and civil service retirement bene8 fits, to the extent which the Secretary determines that

9 such an adjustment is appropriate with the concurrence

10 of the agencies responsible for the administration of such

11 benefits.’’.

12 (C) INFORMATION COMPARING PLAN PRE13 MIUMS UNDER PART C.—Section 1851(d)(4)(B)

14 (42 U.S.C. 1395w–21(d)(4)(B)) is amended—

15 (i) by striking ‘‘PREMIUMS.—The’’

16 and inserting ‘‘PREMIUMS.—

17 ‘‘(i) IN GENERAL.—The’’; and

18 (ii) by adding at the end the following

19 new clause:

20 ‘‘(ii) REDUCTIONS.—The reduction in

21 part B premiums, if any.’’.

22 (D) TREATMENT OF REDUCTION FOR PUR23 POSES OF DETERMINING GOVERNMENT CON24 TRIBUTION UNDER PART B.—Section 1844 (42
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1 U.S.C. 1395w) is amended by adding at the

2 end the following new subsection:

3 ‘‘(c) The Secretary shall determine the Government

4 contribution under subparagraphs (A) and (B) of sub5 section (a)(1) without regard to any premium reduction

6 resulting from an election under section 1854(f)(1)(E).’’.

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

8 subsection (a) shall apply to years beginning with 2002.

9 SEC. 607. FULL IMPLEMENTATION OF RISK ADJUSTMENT

10 FOR CONGESTIVE HEART FAILURE ENROLL11 EES FOR 2001.

12 (a) IN GENERAL.—Section 1853(a)(3)(C) (42 U.S.C.

13 1395w–23(a)(3)(C)) is amended—

14 (1) in clause (ii), by striking ‘‘Such risk adjust15 ment’’ and inserting ‘‘Except as provided in clause

16 (iii), such risk adjustment’’; and

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

18 clause:

19 ‘‘(iii) FULL IMPLEMENTATION OF

20 RISK ADJUSTMENT FOR CONGESTIVE

21 HEART FAILURE ENROLLEES FOR 2001.—

22 ‘‘(I) EXEMPTION FROM PHASE23 IN.—Subject to subclause (II), the

24 Secretary shall fully implement the

25 risk adjustment methodology de-
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1 scribed in clause (i) with respect to

2 each individual who has had a quali3 fying congestive heart failure inpa4 tient diagnosis (as determined by the

5 Secretary under such risk adjustment

6 methodology) during the period begin7 ning on July 1, 1999, and ending on

8 June 30, 2000, and who is enrolled in

9 a coordinated care plan that is the

10 only coordinated care plan offered on

11 January 1, 2001, in the service area

12 of the individual.

13 ‘‘(II) PERIOD OF APPLICATION.—

14 Subclause (I) shall only apply during

15 the 1-year period beginning on Janu16 ary 1, 2001.’’.

17 (b) EXCLUSION FROM DETERMINATION OF THE

18 BUDGET NEUTRALITY FACTOR.—Section 1853(c)(5) (42

19 U.S.C. 1395w–23(c)(5)) is amended by striking ‘‘sub20 section (i)’’ and inserting ‘‘subsections (a)(3)(C)(iii) and

21 (i)’’.

22 SEC. 608. EXPANSION OF APPLICATION OF

23 MEDICARE+CHOICE NEW ENTRY BONUS.

24 (a) IN GENERAL.—Section 1853(i)(1) (42 U.S.C.

25 1395w–23(i)(1)) is amended in the matter preceding sub-
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1 paragraph (A) by inserting ‘‘, or filed notice with the Sec2 retary as of October 3, 2000, that they will not be offering

3 such a plan as of January 1, 2001’’ after ‘‘January 1,

4 2000’’.

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

6 subsection (a) shall apply as if included in the enactment

7 of BBRA.

8 SEC. 609. REPORT ON INCLUSION OF CERTAIN COSTS OF

9 THE DEPARTMENT OF VETERANS AFFAIRS

10 AND MILITARY FACILITY SERVICES IN CAL11 CULATING MEDICARE+CHOICE PAYMENT

12 RATES.

13 The Secretary of Health and Human Services shall

14 report to Congress by not later than January 1, 2003,

15 on a method to phase-in the costs of military facility serv16 ices furnished by the Department of Veterans Affairs, and

17 the costs of military facility services furnished by the De18 partment of Defense, to medicare-eligible beneficiaries in

19 the calculation of an area’s Medicare+Choice capitation

20 payment. Such report shall include on a county-by-county

21 basis—

22 (1) the actual or estimated cost of such services

23 to medicare-eligible beneficiaries;
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1 (2) the change in Medicare+Choice capitation

2 payment rates if such costs are included in the cal3 culation of payment rates;

4 (3) one or more proposals for the implementa5 tion of payment adjustments to Medicare+Choice

6 plans in counties where the payment rate has been

7 affected due to the failure to calculate the cost of

8 such services to medicare-eligible beneficiaries; and

9 (4) a system to ensure that when a

10 Medicare+Choice enrollee receives covered services

11 through a facility of the Department of Veterans Af12 fairs or the Department of Defense there is an ap13 propriate payment recovery to the medicare program

14 under title XVIII of the Social Security Act.

15 Subtitle B—Other Medicare+Choice

16 Reforms

17 SEC. 611. PAYMENT OF ADDITIONAL AMOUNTS FOR NEW

18 BENEFITS COVERED DURING A CONTRACT

19 TERM.

20 (a) IN GENERAL.—Section 1853(c)(7) (42 U.S.C.

21 1395w–23(c)(7)) is amended to read as follows:

22 ‘‘(7) ADJUSTMENT FOR NATIONAL COVERAGE

23 DETERMINATIONS AND LEGISLATIVE CHANGES IN

24 BENEFITS.—If the Secretary makes a determination

25 with respect to coverage under this title or there is
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1 a change in benefits required to be provided under

2 this part that the Secretary projects will result in a

3 significant increase in the costs to Medicare+Choice

4 of providing benefits under contracts under this part

5 (for periods after any period described in section

6 1852(a)(5)), the Secretary shall adjust appropriately

7 the payments to such organizations under this part.

8 Such projection and adjustment shall be based on an

9 analysis by the Chief Actuary of the Health Care Fi10 nancing Administration of the actuarial costs associ11 ated with the new benefits.’’.

12 (b) CONFORMING AMENDMENT.—Section 1852(a)(5)

13 (42 U.S.C. 1395w–22(a)(5)) is amended—

14 (1) in the heading, by inserting ‘‘AND LEGISLA15 TIVE CHANGES IN BENEFITS’’ after ‘‘NATIONAL COV16 ERAGE DETERMINATIONS’’;

17 (2) by inserting ‘‘or legislative change in bene18 fits required to be provided under this part’’ after

19 ‘‘national coverage determination’’;

20 (3) in subparagraph (A), by inserting ‘‘or legis21 lative change in benefits’’ after ‘‘such determina22 tion’’;

23 (4) in subparagraph (B), by inserting ‘‘or legis24 lative change’’ after ‘‘if such coverage determina25 tion’’; and
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1 (5) by adding at the end the following:

2 ‘‘The projection under the previous sentence shall be

3 based on an analysis by the Chief Actuary of the

4 Health Care Financing Administration of the actu5 arial costs associated with the coverage determina6 tion or legislative change in benefits.’’.

7 (c) EFFECTIVE DATE.—The amendments made by

8 this section are effective on the date of the enactment of

9 this Act and apply to national coverage determinations

10 and legislative changes in benefits occurring on or after

11 such date.

12 SEC. 612. RESTRICTION ON IMPLEMENTATION OF SIGNIFI13 CANT NEW REGULATORY REQUIREMENTS

14 MIDYEAR.

15 (a) IN GENERAL.—Section 1856(b) (42 U.S.C.

16 1395w–26(b)) is amended by adding at the end the fol17 lowing new paragraph:

18 ‘‘(4) PROHIBITION OF MIDYEAR IMPLEMENTA19 TION OF SIGNIFICANT NEW REGULATORY REQUIRE20 MENTS.—The Secretary may not implement, other

21 than at the beginning of a calendar year, regulations

22 under this section that impose new, significant regu23 latory requirements on a Medicare+Choice organiza24 tion or plan.’’.
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1 (b) EFFECTIVE DATE.—The amendment made by

2 subsection (a) takes effect on the date of the enactment

3 of this Act.

4 SEC. 613. TIMELY APPROVAL OF MARKETING MATERIAL

5 THAT FOLLOWS MODEL MARKETING LAN6 GUAGE.

7 (a) IN GENERAL.—Section 1851(h) (42 U.S.C.

8 1395w–21(h)) is amended—

9 (1) in paragraph (1)(A), by inserting ‘‘(or 10

10 days in the case described in paragraph (5))’’ after

11 ‘‘45 days’’; and

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

13 paragraph:

14 ‘‘(5) SPECIAL TREATMENT OF MARKETING MA15 TERIAL FOLLOWING MODEL MARKETING LAN16 GUAGE.—In the case of marketing material of an or17 ganization that uses, without modification, proposed

18 model language specified by the Secretary, the pe19 riod specified in paragraph (1)(A) shall be reduced

20 from 45 days to 10 days.’’.

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

22 subsection (a) apply to marketing material submitted on

23 or after January 1, 2001.
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1 SEC. 614. AVOIDING DUPLICATIVE REGULATION.

2 (a) IN GENERAL.—Section 1856(b)(3)(B) (42 U.S.C.

3 1395w–26(b)(3)(B)) is amended—

4 (1) in clause (i), by inserting ‘‘(including cost5 sharing requirements)’’ after ‘‘Benefit require6 ments’’; and

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

8 clause:

9 ‘‘(iv) Requirements relating to mar10 keting materials and summaries and sched11 ules of benefits regarding a

12 Medicare+Choice plan.’’.

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

14 subsection (a) take effect on the date of the enactment

15 of this Act.

16 SEC. 615. ELECTION OF UNIFORM LOCAL COVERAGE POL17 ICY FOR MEDICARE+CHOICE PLAN COVERING

18 MULTIPLE LOCALITIES.

19 Section 1852(a)(2) (42 U.S.C. 1395w–22(a)(2)) is

20 amended by adding at the end the following new subpara21 graph:

22 ‘‘(C) ELECTION OF UNIFORM COVERAGE

23 POLICY.—In the case of a Medicare+Choice or24 ganization that offers a Medicare+Choice plan

25 in an area in which more than one local cov26 erage policy is applied with respect to different
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1 parts of the area, the organization may elect to

2 have the local coverage policy for the part of

3 the area that is most beneficial to

4 Medicare+Choice enrollees (as identified by the

5 Secretary) apply with respect to all

6 Medicare+Choice enrollees enrolled in the

7 plan.’’.

8 SEC. 616. ELIMINATING HEALTH DISPARITIES IN

9 MEDICARE+CHOICE PROGRAM.

10 (a) QUALITY ASSURANCE PROGRAM FOCUS ON RA11 CIAL AND ETHNIC MINORITIES.—Subparagraphs (A) and

12 (B) of section 1852(e)(2) (42 U.S.C. 1395w–22(e)(2)) are

13 each amended by adding at the end the following:

14 ‘‘Such program shall include a separate focus

15 (with respect to all the elements described in

16 this subparagraph) on racial and ethnic minori17 ties.’’.

18 (b) REPORT.—Section 1852(e) (42 U.S.C. 1395w–

19 22(e)) is amended by adding at the end the following new

20 paragraph:

21 ‘‘(5) REPORT TO CONGRESS.—

22 ‘‘(A) IN GENERAL.—Not later than 2 years

23 after the date of the enactment of this para24 graph, and biennially thereafter, the Secretary

25 shall submit to Congress a report regarding
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1 how quality assurance programs conducted

2 under this subsection focus on racial and ethnic

3 minorities.

4 ‘‘(B) CONTENTS OF REPORT.—Each such

5 report shall include the following:

6 ‘‘(i) A description of the means by

7 which such programs focus on such racial

8 and ethnic minorities.

9 ‘‘(ii) An evaluation of the impact of

10 such programs on eliminating health dis11 parities and on improving health outcomes,

12 continuity and coordination of care, man13 agement of chronic conditions, and con14 sumer satisfaction.

15 ‘‘(iii) Recommendations on ways to re16 duce clinical outcome disparities among ra17 cial and ethnic minorities.’’.

18 SEC. 617. MEDICARE+CHOICE PROGRAM COMPATIBILITY

19 WITH EMPLOYER OR UNION GROUP HEALTH

20 PLANS.

21 (a) IN GENERAL.—Section 1857 (42 U.S.C. 1395w–

22 27) is amended by adding at the end the following new

23 subsection:

24 ‘‘(i) MEDICARE+CHOICE PROGRAM COMPATIBILITY

25 WITH EMPLOYER OR UNION GROUP HEALTH PLANS.—
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1 To facilitate the offering of Medicare+Choice plans under

2 contracts between Medicare+Choice organizations and

3 employers, labor organizations, or the trustees of a fund

4 established by 1 or more employers or labor organizations

5 (or combination thereof) to furnish benefits to the entity’s

6 employees, former employees (or combination thereof) or

7 members or former members (or combination thereof) of

8 the labor organizations, the Secretary may waive or mod9 ify requirements that hinder the design of, the offering

10 of, or the enrollment in such Medicare+Choice plans.’’.

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

12 subsection (a) applies with respect to years beginning with

13 2001.

14 SEC. 618. SPECIAL MEDIGAP ENROLLMENT ANTIDISCRIMI15 NATION PROVISION FOR CERTAIN BENE16 FICIARIES.

17 (a) DISENROLLMENT WINDOW IN ACCORDANCE

18 WITH BENEFICIARY’S CIRCUMSTANCE.—Section

19 1882(s)(3) (42 U.S.C. 1395ss(s)(3)) is amended—

20 (1) in subparagraph (A), in the matter fol21 lowing clause (iii), by striking ‘‘, subject to subpara22 graph (E), seeks to enroll under the policy not later

23 than 63 days after the date of the termination of en24 rollment described in such subparagraph’’ and in-
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1 serting ‘‘seeks to enroll under the policy during the

2 period specified in subparagraph (E)’’; and

3 (2) by striking subparagraph (E) and inserting

4 the following new subparagraph:

5 ‘‘(E) For purposes of subparagraph (A), the time pe6 riod specified in this subparagraph is—

7 ‘‘(i) in the case of an individual described in

8 subparagraph (B)(i), the period beginning on the

9 date the individual receives a notice of termination

10 or cessation of all supplemental health benefits (or,

11 if no such notice is received, notice that a claim has

12 been denied because of such a termination or ces13 sation) and ending on the date that is 63 days after

14 the applicable notice;

15 ‘‘(ii) in the case of an individual described in

16 clause (ii), (iii), (v), or (vi) of subparagraph (B)

17 whose enrollment is terminated involuntarily, the pe18 riod beginning on the date that the individual re19 ceives a notice of termination and ending on the

20 date that is 63 days after the date the applicable

21 coverage is terminated;

22 ‘‘(iii) in the case of an individual described in

23 subparagraph (B)(iv)(I), the period beginning on the

24 earlier of (I) the date that the individual receives a

25 notice of termination, a notice of the issuer’s bank-
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1 ruptcy or insolvency, or other such similar notice, if

2 any, and (II) the date that the applicable coverage

3 is terminated, and ending on the date that is 63

4 days after the date the coverage is terminated;

5 ‘‘(iv) in the case of an individual described in

6 clause (ii), (iii), (iv)(II), (iv)(III), (v), or (vi) of sub7 paragraph (B) who disenrolls voluntarily, the period

8 beginning on the date that is 60 days before the ef9 fective date of the disenrollment and ending on the

10 date that is 63 days after such effective date; and

11 ‘‘(v) in the case of an individual described in

12 subparagraph (B) but not described in the preceding

13 provisions of this subparagraph, the period begin14 ning on the effective date of the disenrollment and

15 ending on the date that is 63 days after such effec16 tive date.’’.

17 (b) EXTENDED MEDIGAP ACCESS FOR INTERRUPTED

18 TRIAL PERIODS.—Section 1882(s)(3) (42 U.S.C.

19 1395ss(s)(3)), as amended by subsection (a), is further

20 amended by adding at the end the following new subpara21 graph:

22 ‘‘(F)(i) Subject to clause (ii), for purposes of this

23 paragraph—

24 ‘‘(I) in the case of an individual described in

25 subparagraph (B)(v) (or deemed to be so described,
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1 pursuant to this subparagraph) whose enrollment

2 with an organization or provider described in sub3 clause (II) of such subparagraph is involuntarily ter4 minated within the first 12 months of such enroll5 ment, and who, without an intervening enrollment,

6 enrolls with another such organization or provider,

7 such subsequent enrollment shall be deemed to be an

8 initial enrollment described in such subparagraph;

9 and

10 ‘‘(II) in the case of an individual described in

11 clause (vi) of subparagraph (B) (or deemed to be so

12 described, pursuant to this subparagraph) whose en13 rollment with a plan or in a program described in

14 such clause is involuntarily terminated within the

15 first 12 months of such enrollment, and who, with16 out an intervening enrollment, enrolls in another

17 such plan or program, such subsequent enrollment

18 shall be deemed to be an initial enrollment described

19 in such clause.

20 ‘‘(ii) For purposes of clauses (v) and (vi) of subpara21 graph (B), no enrollment of an individual with an organi22 zation or provider described in clause (v)(II), or with a

23 plan or in a program described in clause (vi), may be

24 deemed to be an initial enrollment under this clause after

25 the 2-year period beginning on the date on which the indi-
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1 vidual first enrolled with such an organization, provider,

2 plan, or program.’’.

3 SEC. 619. RESTORING EFFECTIVE DATE OF ELECTIONS AND

4 CHANGES OF ELECTIONS OF

5 MEDICARE+CHOICE PLANS.

6 (a) OPEN ENROLLMENT.—Section 1851(f)(2) (42

7 U.S.C. 1395w–21(f)(2)) is amended by striking ‘‘, except

8 that if such election or change is made after the 10th day

9 of any calendar month, then the election or change shall

10 not take effect until the first day of the second calendar

11 month following the date on which the election or change

12 is made’’.

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

14 this section shall apply to elections and changes of cov15 erage made on or after January 1, 2001.

16 SEC. 620. PERMITTING ESRD BENEFICIARIES TO ENROLL

17 IN ANOTHER MEDICARE+CHOICE PLAN IF

18 THE PLAN IN WHICH THEY ARE ENROLLED IS

19 TERMINATED.

20 (a) IN GENERAL.—Section 1851(a)(3)(B) (42 U.S.C.

21 1395w–21(a)(3)(B)) is amended by striking ‘‘except that’’

22 and all that follows and inserting the following: ‘‘except

23 that—

24 ‘‘(i) an individual who develops end25 stage renal disease while enrolled in a
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1 Medicare+Choice plan may continue to be

2 enrolled in that plan; and

3 ‘‘(ii) in the case of such an individual

4 who is enrolled in a Medicare+Choice plan

5 under clause (i) (or subsequently under

6 this clause), if the enrollment is discon7 tinued under circumstances described in

8 section 1851(e)(4)(A), then the individual

9 will be treated as a ‘Medicare+Choice eli10 gible individual’ for purposes of electing to

11 continue enrollment in another

12 Medicare+Choice plan.’’.

13 (b) EFFECTIVE DATE.—

14 (1) IN GENERAL.—The amendment made by

15 subsection (a) shall apply to terminations and

16 discontinuations occurring on or after the date of

17 the enactment of this Act.

18 (2) APPLICATION TO PRIOR PLAN TERMI19 NATIONS.—Clause (ii) of section 1851(a)(3)(B) of

20 the Social Security Act (as inserted by subsection

21 (a)) also shall apply to individuals whose enrollment

22 in a Medicare+Choice plan was terminated or dis23 continued after December 31, 1998, and before the

24 date of the enactment of this Act. In applying this

25 paragraph, such an individual shall be treated, for
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1 purposes of part C of title XVIII of the Social Secu2 rity Act, as having discontinued enrollment in such

3 a plan as of the date of the enactment of this Act.

4 SEC. 621. PROVIDING CHOICE FOR SKILLED NURSING FA5 CILITY SERVICES UNDER THE

6 MEDICARE+CHOICE PROGRAM.

7 (a) IN GENERAL.—Section 1852 (42 U.S.C. 1395w–

8 22) is amended by adding at the end the following new

9 subsection:

10 ‘‘(l) RETURN TO HOME SKILLED NURSING FACILI11 TIES FOR COVERED POST-HOSPITAL EXTENDED CARE

12 SERVICES.—

13 ‘‘(1) ENSURING RETURN TO HOME SNF.—

14 ‘‘(A) IN GENERAL.—In providing coverage

15 of post-hospital extended care services, a

16 Medicare+Choice plan shall provide for such

17 coverage through a home skilled nursing facility

18 if the following conditions are met:

19 ‘‘(i) ENROLLEE ELECTION.—The en20 rollee elects to receive such coverage

21 through such facility.

22 ‘‘(ii) SNF AGREEMENT.—The facility

23 has a contract with the Medicare+Choice

24 organization for the provision of such serv25 ices, or the facility agrees to accept sub-
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1 stantially similar payment under the same

2 terms and conditions that apply to simi3 larly situated skilled nursing facilities that

4 are under contract with the

5 Medicare+Choice organization for the pro6 vision of such services and through which

7 the enrollee would otherwise receive such

8 services.

9 ‘‘(B) MANNER OF PAYMENT TO HOME

10 SNF.—The organization shall provide payment

11 to the home skilled nursing facility consistent

12 with the contract or the agreement described in

13 subparagraph (A)(ii), as the case may be.

14 ‘‘(2) NO LESS FAVORABLE COVERAGE.—The

15 coverage provided under paragraph (1) (including

16 scope of services, cost-sharing, and other criteria of

17 coverage) shall be no less favorable to the enrollee

18 than the coverage that would be provided to the en19 rollee with respect to a skilled nursing facility the

20 post-hospital extended care services of which are

21 otherwise covered under the Medicare+Choice plan.

22 ‘‘(3) RULE OF CONSTRUCTION.—Nothing in

23 this subsection shall be construed to do the fol24 lowing:
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1 ‘‘(A) To require coverage through a skilled

2 nursing facility that is not otherwise qualified

3 to provide benefits under part A for medicare

4 beneficiaries not enrolled in a Medicare+Choice

5 plan.

6 ‘‘(B) To prevent a skilled nursing facility

7 from refusing to accept, or imposing conditions

8 upon the acceptance of, an enrollee for the re9 ceipt of post-hospital extended care services.

10 ‘‘(4) DEFINITIONS.—In this subsection:

11 ‘‘(A) HOME SKILLED NURSING FACIL12 ITY.—The term ‘home skilled nursing facility’

13 means, with respect to an enrollee who is enti14 tled to receive post-hospital extended care serv15 ices under a Medicare+Choice plan, any of the

16 following skilled nursing facilities:

17 ‘‘(i) SNF RESIDENCE AT TIME OF AD18 MISSION.—The skilled nursing facility in

19 which the enrollee resided at the time of

20 admission to the hospital preceding the re21 ceipt of such post-hospital extended care

22 services.

23 ‘‘(ii) SNF IN CONTINUING CARE RE24 TIREMENT COMMUNITY.—A skilled nursing

25 facility that is providing such services
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1 through a continuing care retirement com2 munity (as defined in subparagraph (B))

3 which provided residence to the enrollee at

4 the time of such admission.

5 ‘‘(iii) SNF RESIDENCE OF SPOUSE AT

6 TIME OF DISCHARGE.—The skilled nursing

7 facility in which the spouse of the enrollee

8 is residing at the time of discharge from

9 such hospital.

10 ‘‘(B) CONTINUING CARE RETIREMENT

11 COMMUNITY.—The term ‘continuing care retire12 ment community’ means, with respect to an en13 rollee in a Medicare+Choice plan, an arrange14 ment under which housing and health-related

15 services are provided (or arranged) through an

16 organization for the enrollee under an agree17 ment that is effective for the life of the enrollee

18 or for a specified period.’’.

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

20 subsection (a) applies with respect to contracts entered

21 into or renewed on or after the date of the enactment of

22 this Act.

23 (c) MEDPAC STUDY.—

24 (1) STUDY.—The Medicare Payment Advisory

25 Commission shall conduct a study analyzing the ef-
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1 fects of the amendment made by subsection (a) on

2 Medicare+Choice organizations. In conducting such

3 study, the Commission shall examine the effects (if

4 any) such amendment has had on—

5 (A) the scope of additional benefits pro6 vided under the Medicare+Choice program;

7 (B) the administrative and other costs in8 curred by Medicare+Choice organizations;

9 (C) the contractual relationships between

10 such organizations and skilled nursing facilities.

11 (2) REPORT.—Not later than 2 years after the

12 date of the enactment of this Act, the Commission

13 shall submit to Congress a report on the study con14 ducted under paragraph (1).

15 SEC. 622. PROVIDING FOR ACCOUNTABILITY OF

16 MEDICARE+CHOICE PLANS.

17 (a) MANDATORY REVIEW OF ACR SUBMISSIONS BY

18 THE CHIEF ACTUARY OF THE HEALTH CARE FINANCING

19 ADMINISTRATION.—Section 1854(a)(5)(A) (42 U.S.C.

20 1395w–24(a)(5)(A)) is amended—

21 (1) by striking ‘‘value’’ and inserting ‘‘values’’;

22 and

23 (2) by adding at the end the following: ‘‘The

24 Chief Actuary of the Health Care Financing Admin25 istration shall review the actuarial assumptions and
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1 data used by the Medicare+Choice organization with

2 respect to such rates, amounts, and values so sub3 mitted to determine the appropriateness of such as4 sumptions and data.’’.

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

6 subsection (a) applies to submissions made on or after

7 January 1, 2001.

8 SEC. 623. CIVIL MONETARY PENALTIES FOR CONTRACT DE9 FAULT BY A MEDICARE+CHOICE ORGANIZA10 TION.

11 (a) IN GENERAL.—Section 1857(g)(3) is amended by

12 adding at the end the following new subparagraph:

13 ‘‘(D) Civil monetary penalties of up to

14 $25,000 per enrollee or $100,000 per organiza15 tion, whichever is greater, where the finding

16 under subsection (c)(2)(A) is based on the orga17 nization’s defaulting on its contract.’’.

18 Subtitle C—Other Managed Care

19 Reforms

20 SEC. 631. 1-YEAR EXTENSION OF SOCIAL HEALTH MAINTE21 NANCE ORGANIZATION (SHMO) DEMONSTRA22 TION PROJECT.

23 Section 4018(b)(1) of the Omnibus Budget Reconcili24 ation Act of 1987, as amended by section 531(a)(1) of
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1 BBRA (113 Stat. 1501A–388), is amended by striking

2 ‘‘18 months’’ and inserting ‘‘30 months’’.

3 SEC. 632. REVISED TERMS AND CONDITIONS FOR EXTEN4 SION OF MEDICARE COMMUNITY NURSING

5 ORGANIZATION (CNO) DEMONSTRATION

6 PROJECT.

7 (a) IN GENERAL.—Section 532 of BBRA (113 Stat.

8 1501A–388) is amended—

9 (1) in subsection (a), by striking the second

10 sentence; and

11 (2) by striking subsection (b) and inserting the

12 following new subsection:

13 ‘‘(b) TERMS AND CONDITIONS.—

14 ‘‘(1) JANUARY THROUGH SEPTEMBER 2000.—

15 For the 9-month period beginning with January

16 2000, any such demonstration project shall be con17 ducted under the same terms and conditions as ap18 plied to such demonstration during 1999.

19 ‘‘(2) OCTOBER 2000 THROUGH DECEMBER

20 2001.—For the 15-month period beginning with Oc21 tober 2000, any such demonstration project shall be

22 conducted under the same terms and conditions as

23 applied to such demonstration during 1999, except

24 that the following modifications shall apply:
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1 ‘‘(A) BASIC CAPITATION RATE.—The basic

2 capitation rate paid for services covered under

3 the project (other than case management serv4 ices) per enrollee per month and furnished

5 during—

6 ‘‘(i) the period beginning with October

7 1, 2000, and ending with December 31,

8 2000, shall be determined by actuarially

9 adjusting the actual capitation rate paid

10 for such services in 1999 for inflation, uti11 lization, and other changes to the CNO

12 service package, and by reducing such ad13 justed capitation rate by 10 percent in the

14 case of the demonstration sites located in

15 Arizona, Minnesota, and Illinois, and 15

16 percent for the demonstration site located

17 in New York; and

18 ‘‘(ii) 2001 shall be determined by ac19 tuarially adjusting the capitation rate de20 termined under clause (i) for inflation, uti21 lization, and other changes to the CNO

22 service package.

23 ‘‘(B) TARGETED CASE MANAGEMENT

24 FEE.—Effective October 1, 2000—
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1 ‘‘(i) the case management fee per en2 rollee per month for—

3 ‘‘(I) the period described in sub4 paragraph (A)(i) shall be determined

5 by actuarially adjusting the case man6 agement fee for 1999 for inflation;

7 and

8 ‘‘(II) 2001 shall be determined

9 by actuarially adjusting the amount

10 determined under subclause (I) for in11 flation; and

12 ‘‘(ii) such case management fee shall

13 be paid only for enrollees who are classified

14 as moderately frail or frail pursuant to cri15 teria established by the Secretary.

16 ‘‘(C) GREATER UNIFORMITY IN CLINICAL

17 FEATURES AMONG SITES.—Each project shall

18 implement for each site—

19 ‘‘(i) protocols for periodic telephonic

20 contact with enrollees based on—

21 ‘‘(I) the results of such standard22 ized written health assessment; and

23 ‘‘(II) the application of appro24 priate care planning approaches;
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1 ‘‘(ii) disease management programs

2 for targeted diseases (such as congestive

3 heart failure, arthritis, diabetes, and hy4 pertension) that are highly prevalent in the

5 enrolled populations;

6 ‘‘(iii) systems and protocols to track

7 enrollees through hospitalizations, includ8 ing pre-admission planning, concurrent

9 management during inpatient hospital

10 stays, and post-discharge assessment, plan11 ning, and follow-up; and

12 ‘‘(iv) standardized patient educational

13 materials for specified diseases and health

14 conditions.

15 ‘‘(D) QUALITY IMPROVEMENT.—Each

16 project shall implement at each site once during

17 the 15-month period—

18 ‘‘(i) enrollee satisfaction surveys; and

19 ‘‘(ii) reporting on specified quality in20 dicators for the enrolled population.

21 ‘‘(c) EVALUATION.—

22 ‘‘(1) PRELIMINARY REPORT.—Not later than

23 July 1, 2001, the Secretary of Health and Human

24 Services shall submit to the Committees on Ways

25 and Means and Commerce of the House of Rep-
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1 resentatives and the Committee on Finance of the

2 Senate a preliminary report that—

3 ‘‘(A) evaluates such demonstration projects

4 for the period beginning July 1, 1997, and end5 ing December 31, 1999, on a site-specific basis

6 with respect to the impact on per beneficiary

7 spending, specific health utilization measures,

8 and enrollee satisfaction; and

9 ‘‘(B) includes a similar evaluation of such

10 projects for the portion of the extension period

11 that occurs after September 30, 2000.

12 ‘‘(2) FINAL REPORT.—The Secretary shall sub13 mit a final report to such Committees on such dem14 onstration projects not later than July 1, 2002.

15 Such report shall include the same elements as the

16 preliminary report required by paragraph (1), but

17 for the period after December 31, 1999.

18 ‘‘(3) METHODOLOGY FOR SPENDING COMPARI19 SONS.—Any evaluation of the impact of the dem20 onstration projects on per beneficiary spending in21 cluded in such reports shall include a comparison

22 of—

23 ‘‘(A) data for all individuals who—
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1 ‘‘(i) were enrolled in such demonstra2 tion projects as of the first day of the pe3 riod under evaluation; and

4 ‘‘(ii) were enrolled for a minimum of

5 6 months thereafter; with

6 ‘‘(B) data for a matched sample of individ7 uals who are enrolled under part B of title

8 XVIII of the Social Security Act and are not

9 enrolled in such a project, or in a

10 Medicare+Choice plan under part C of such

11 title, a plan offered by an eligible organization

12 under section 1876 of such Act, or a health

13 care prepayment plan under section

14 1833(a)(1)(A) of such Act.’’.

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

16 subsection (a) shall be effective as if included in the enact17 ment of section 532 of BBRA (113 Stat. 1501A–388).

18 SEC. 633. EXTENSION OF MEDICARE MUNICIPAL HEALTH

19 SERVICES DEMONSTRATION PROJECTS.

20 Section 9215(a) of the Consolidated Omnibus Budget

21 Reconciliation Act of 1985 (42 U.S.C. 1395b–1 note), as

22 amended by section 6135 of the Omnibus Budget Rec23 onciliation Act of 1989, section 13557 of the Omnibus

24 Budget Reconciliation Act of 1993, section 4017 of BBA,

25 and section 534 of BBRA (113 Stat. 1501A–390), is
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1 amended by striking ‘‘December 31, 2002’’ and inserting

2 ‘‘December 31, 2004’’.

3 SEC. 634. SERVICE AREA EXPANSION FOR MEDICARE COST

4 CONTRACTS DURING TRANSITION PERIOD.

5 Section 1876(h)(5) (42 U.S.C. 1395mm(h)(5)) is

6 amended—

7 (1) by redesignating subparagraph (B) as sub8 paragraph (C); and

9 (2) by inserting after subparagraph (A), the fol10 lowing new subparagraph:

11 ‘‘(B) Subject to subparagraph (C), the Secretary

12 shall approve an application for a modification to a rea13 sonable cost contract under this section in order to expand

14 the service area of such contract if—

15 ‘‘(i) such application is submitted to the Sec16 retary on or before September 1, 2003; and

17 ‘‘(ii) the Secretary determines that the organi18 zation with the contract continues to meet the re19 quirements applicable to such organizations and con20 tracts under this section.’’.

21 TITLE VII—MEDICAID

22 SEC. 701. DSH PAYMENTS.

23 (a) CONTINUATION OF MEDICAID DSH ALLOTMENTS

24 AT FISCAL YEAR 2000 LEVELS FOR FISCAL YEARS 2001

25 AND 2002.—Section 1923(f) (42 U.S.C. 1396r–4(f)), as
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1 amended by section 601 of the Medicare, Medicaid, and

2 SCHIP Balanced Budget Refinement Act of 1999 (as en3 acted into law by section 1000(a)(6) of Public Law 106–

4 113), is amended—

5 (1) in paragraph (2)—

6 (A) by striking ‘‘2002’’ in the heading and

7 inserting ‘‘2000’’;

8 (B) in the matter preceding the table, by

9 striking ‘‘2002’’ and inserting ‘‘2000’’; and

10 (C) in the table in such paragraph, by

11 striking the columns labeled ‘‘FY 01’’ and ‘‘FY

12 02’’ relating to fiscal years 2001 and 2002; and

13 (2) in paragraph (3)—

14 (A) by striking ‘‘2003’’ in the heading and

15 inserting ‘‘2001’’; and

16 (B) by striking ‘‘2003’’ and inserting

17 ‘‘2001’’.

18 (b) SPECIAL RULE FOR MEDICAID DSH ALLOTMENT

19 FOR EXTREMELY LOW DSH STATES.—Section

20 1923(f)(3) (42 U.S.C. 1396r–4(f)(3)) is amended—

21 (1) in subparagraph (A), by striking ‘‘subpara22 graph (B)’’ and inserting ‘‘subparagraphs (B) and

23 (C)’’; and

24 (2) by adding at the end the following new sub25 paragraph:
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1 ‘‘(C) SPECIAL RULE FOR EXTREMELY LOW

2 DSH STATES.—In the case of a State in which

3 the total expenditures under the State plan (in4 cluding Federal and State shares) for dis5 proportionate share hospital adjustments under

6 this section for fiscal year 1999, as reported to

7 the Administrator of the Health Care Financing

8 Administration as of August 31, 2000, is great9 er than 0 but less than 1 percent of the State’s

10 total amount of expenditures under the State

11 plan for medical assistance during the fiscal

12 year, the DSH allotment for fiscal year 2001

13 shall be increased to 1 percent of the State’s

14 total amount of expenditures under such plan

15 for such assistance during such fiscal year. In

16 subsequent fiscal years, such increased allot17 ment is subject to an increase for inflation as

18 provided in subparagraph (A).’’.

19 (c) DISTRICT OF COLUMBIA.—Effective beginning

20 with fiscal year 2001, the item in the table in section

21 1923(f) (42 U.S.C. 1396r–4(f)) relating to District of Co22 lumbia for FY 2000, is amended by striking ‘‘32’’ and

23 inserting ‘‘49’’.

24 (d) CONTINGENT ALLOTMENT FOR TENNESSEE.—

25 Section 1923(f) (42 U.S.C. 1396r–4(f)) is amended—
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1 (1) in paragraph (3)(A), by striking ‘‘or this

2 paragraph’’ and inserting ‘‘, this paragraph, or para3 graph (4)’’; and

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

5 paragraph:

6 ‘‘(4) CONTINGENT ALLOTMENT ADJUSTMENT

7 FOR TENNESSEE.—If the State-wide waiver ap8 proved under section 1115 for the State of Ten9 nessee with respect to requirements under this title

10 as in effect on the date of the enactment of this sub11 section is revoked or terminated, the DSH allotment

12 for Tennessee for fiscal year 2001 is deemed to be

13 equal to $286,442,437.’’.

14 (e) ASSURING IDENTIFICATION OF MEDICAID MAN15 AGED CARE PATIENTS.—

16 (1) IN GENERAL.—Section 1932 (42 U.S.C.

17 1396u–2) is amended by adding at the end the fol18 lowing new subsection:

19 ‘‘(g) IDENTIFICATION OF PATIENTS FOR PURPOSES

20 OF MAKING DSH PAYMENTS.—Each contract with a

21 managed care entity under section 1903(m) or under sec22 tion 1905(t)(3) shall require the entity either—

23 ‘‘(1) to report to the State information nec24 essary to determine the hospital services provided

25 under the contract (and the identity of hospitals pro-
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1 viding such services) for purposes of applying sec2 tions 1886(d)(5)(F) and 1923; or

3 ‘‘(2) to include a sponsorship code in the identi4 fication card issued to individuals covered under this

5 title in order that a hospital may identify a patient

6 as being entitled to benefits under this title.’’.

7 (2) CLARIFICATION OF COUNTING MANAGED

8 CARE MEDICAID PATIENTS.—Section 1923 (42

9 U.S.C. 1396r–4) is amended—

10 (A) in subsection (a)(2)(D), by inserting

11 after ‘‘the proportion of low-income and med12 icaid patients’’ the following: ‘‘(including such

13 patients who receive benefits through a man14 aged care entity)’’;

15 (B) in subsection (b)(2), by inserting after

16 ‘‘a State plan approved under this title in a pe17 riod’’ the following: ‘‘(regardless of whether

18 such patients receive medical assistance on a

19 fee-for-service basis or through a managed care

20 entity)’’; and

21 (C) in subsection (b)(3)(A)(i), by inserting

22 after ‘‘under a State plan under this title’’ the

23 following: ‘‘(regardless of whether the services

24 were furnished on a fee-for-service basis or

25 through a managed care entity)’’.
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1 (3) EFFECTIVE DATES.—

2 (A) The amendment made by paragraph

3 (1) applies to contracts as of January 1, 2001.

4 (B) The amendments made by paragraph

5 (2) apply to payments made on or after Janu6 ary 1, 2001.

7 (f) APPLICATION OF MEDICAID DSH TRANSITION

8 RULE TO PUBLIC HOSPITALS IN ALL STATES.—

9 (1) IN GENERAL.—During the period described

10 in paragraph (3), with respect to a State, section

11 4721(e) of the Balanced Budget Act of 1997 (Public

12 Law 105–33; 111 Stat. 514), as amended by section

13 607 of BBRA (113 Stat. 1501A–321) shall be ap14 plied as though—

15 (A) ‘‘September 30, 2002’’ were sub16 stituted for ‘‘July 1, 1997’’ each place it ap17 pears;

18 (B) ‘‘hospitals owned or operated by a

19 State (as defined for purposes of title XIX of

20 such Act), or by an instrumentality or a unit of

21 government within a State (as so defined)’’

22 were substituted for ‘‘the State of California’’;

23 (C) paragraph (3) were redesignated as

24 paragraph (4);
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1 (D) ‘‘and’’ were omitted from the end of

2 paragraph (2); and

3 (E) the following new paragraph were in4 serted after paragraph (2):

5 ‘‘(3) ‘(as defined in subparagraph (B) but with6 out regard to clause (ii) of that subparagraph and

7 subject to subsection (d))’ were substituted for ‘(as

8 defined in subparagraph (B))’ in subparagraph (A)

9 of such section; and’’.

10 (2) SPECIAL RULE.—With respect to California,

11 section 4721(e) of the Balanced Budget Act of 1997

12 (Public Law 105–33; 111 Stat. 514) shall be applied

13 without regard to paragraph (1).

14 (3) PERIOD DESCRIBED.—The period described

15 in this paragraph is the period that begins, with re16 spect to a State, on the first day of the first State

17 fiscal year that begins after September 30, 2002,

18 and ends on the last day of the succeeding State fis19 cal year.

20 (4) APPLICATION TO WAIVERS.—With respect

21 to a State operating under a waiver of the require22 ments of title XIX of the Social Security Act (42

23 U.S.C. 1396 et seq.) under section 1115 of such Act

24 (42 U.S.C. 1315), the amount by which any pay25 ment adjustment made by the State under title XIX
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1 of such Act (42 U.S.C. 1396 et seq.), after the ap2 plication of section 4721(e) of the Balanced Budget

3 Act of 1997 under paragraph (1) to such State, ex4 ceeds the costs of furnishing hospital services pro5 vided by hospitals described in such section shall be

6 fully reflected as an increase in the baseline expendi7 ture limit for such waiver.

8 (g) ASSISTANCE FOR CERTAIN PUBLIC HOS9 PITALS.—

10 (1) IN GENERAL.—Beginning with fiscal year

11 2002, notwithstanding section 1923(f) of the Social

12 Security Act (42 U.S.C. 1396r–4(f)) and subject to

13 paragraph (3), with respect to a State, payment ad14 justments made under title XIX of the Social Secu15 rity Act (42 U.S.C. 1396 et seq.) to a hospital de16 scribed in paragraph (2) shall be made without re17 gard to the DSH allotment limitation for the State

18 determined under section 1923(f) of that Act (42

19 U.S.C. 1396r–4(f)).

20 (2) HOSPITAL DESCRIBED.—A hospital is de21 scribed in this paragraph if the hospital—

22 (A) is owned or operated by a State (as de23 fined for purposes of title XIX of the Social Se24 curity Act), or by an instrumentality or a unit

25 of government within a State (as so defined);
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1 (B) as of October 1, 2000—

2 (i) is in existence and operating as a

3 hospital described in subparagraph (A);

4 and

5 (ii) is not receiving disproportionate

6 share hospital payments from the State in

7 which it is located under title XIX of such

8 Act; and

9 (C) has a low-income utilization rate (as

10 defined in section 1923(b)(3) of the Social Se11 curity Act (42 U.S.C. 1396r–4(b)(3))) in excess

12 of 65 percent.

13 (3) LIMITATION ON EXPENDITURES.—

14 (A) IN GENERAL.—With respect to any fis15 cal year, the aggregate amount of Federal fi16 nancial participation that may be provided for

17 payment adjustments described in paragraph

18 (1) for that fiscal year for all States may not

19 exceed the amount described in subparagraph

20 (B) for the fiscal year.

21 (B) AMOUNT DESCRIBED.—The amount

22 described in this subparagraph for a fiscal year

23 is as follows:

24 (i) For fiscal year 2002, $15,000,000.
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1 (ii) For fiscal year 2003,

2 $176,000,000.

3 (iii) For fiscal year 2004,

4 $269,000,000.

5 (iv) For fiscal year 2005,

6 $330,000,000.

7 (v) For fiscal year 2006 and each fis8 cal year thereafter, $375,000,000.

9 (h) DSH PAYMENT ACCOUNTABILITY STANDARDS.—

10 Not later than September 30, 2002, the Secretary of

11 Health and Human Services shall implement account12 ability standards to ensure that Federal funds provided

13 with respect to disproportionate share hospital adjust14 ments made under section 1923 of the Social Security Act

15 (42 U.S.C. 1396r–4) are used to reimburse States and

16 hospitals eligible for such payment adjustments for pro17 viding uncompensated health care to low-income patients

18 and are otherwise made in accordance with the require19 ments of section 1923 of that Act.

20 SEC. 702. NEW PROSPECTIVE PAYMENT SYSTEM FOR FED21 ERALLY-QUALIFIED HEALTH CENTERS AND

22 RURAL HEALTH CLINICS.

23 (a) IN GENERAL.—Section 1902(a) (42 U.S.C.

24 1396a(a)) is amended—

25 (1) in paragraph (13)—
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1 (A) in subparagraph (A), by adding ‘‘and’’

2 at the end;

3 (B) in subparagraph (B), by striking

4 ‘‘and’’ at the end; and

5 (C) by striking subparagraph (C); and

6 (2) by inserting after paragraph (14) the fol7 lowing new paragraph:

8 ‘‘(15) provide for payment for services de9 scribed in clause (B) or (C) of section 1905(a)(2)

10 under the plan in accordance with subsection (aa);’’.

11 (b) NEW PROSPECTIVE PAYMENT SYSTEM.—Section

12 1902 (42 U.S.C. 1396a) is amended by adding at the end

13 the following:

14 ‘‘(aa) PAYMENT FOR SERVICES PROVIDED BY FED15 ERALLY-QUALIFIED HEALTH CENTERS AND RURAL

16 HEALTH CLINICS.—

17 ‘‘(1) IN GENERAL.—Beginning with fiscal year

18 2001 and each succeeding fiscal year, the State plan

19 shall provide for payment for services described in

20 section 1905(a)(2)(C) furnished by a Federally21 qualified health center and services described in sec22 tion 1905(a)(2)(B) furnished by a rural health clinic

23 in accordance with the provisions of this subsection.

24 ‘‘(2) FISCAL YEAR 2001.—Subject to paragraph

25 (4), for services furnished during fiscal year 2001,
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1 the State plan shall provide for payment for such

2 services in an amount (calculated on a per visit

3 basis) that is equal to 100 percent of the average of

4 the costs of the center or clinic of furnishing such

5 services during fiscal years 1999 and 2000 which

6 are reasonable and related to the cost of furnishing

7 such services, or based on such other tests of reason8 ableness as the Secretary prescribes in regulations

9 under section 1833(a)(3), or, in the case of services

10 to which such regulations do not apply, the same

11 methodology used under section 1833(a)(3), ad12 justed to take into account any increase or decrease

13 in the scope of such services furnished by the center

14 or clinic during fiscal year 2001.

15 ‘‘(3) FISCAL YEAR 2002 AND SUCCEEDING FIS16 CAL YEARS.—Subject to paragraph (4), for services

17 furnished during fiscal year 2002 or a succeeding

18 fiscal year, the State plan shall provide for payment

19 for such services in an amount (calculated on a per

20 visit basis) that is equal to the amount calculated for

21 such services under this subsection for the preceding

22 fiscal year—

23 ‘‘(A) increased by the percentage increase

24 in the MEI (as defined in section 1842(i)(3))
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1 applicable to primary care services (as defined

2 in section 1842(i)(4)) for that fiscal year; and

3 ‘‘(B) adjusted to take into account any in4 crease or decrease in the scope of such services

5 furnished by the center or clinic during that fis6 cal year.

7 ‘‘(4) ESTABLISHMENT OF INITIAL YEAR PAY8 MENT AMOUNT FOR NEW CENTERS OR CLINICS.—In

9 any case in which an entity first qualifies as a Fed10 erally-qualified health center or rural health clinic

11 after fiscal year 2000, the State plan shall provide

12 for payment for services described in section

13 1905(a)(2)(C) furnished by the center or services

14 described in section 1905(a)(2)(B) furnished by the

15 clinic in the first fiscal year in which the center or

16 clinic so qualifies in an amount (calculated on a per

17 visit basis) that is equal to 100 percent of the costs

18 of furnishing such services during such fiscal year

19 based on the rates established under this subsection

20 for the fiscal year for other such centers or clinics

21 located in the same or adjacent area with a similar

22 case load or, in the absence of such a center or clin23 ic, in accordance with the regulations and method24 ology referred to in paragraph (2) or based on such

25 other tests of reasonableness as the Secretary may
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1 specify. For each fiscal year following the fiscal year

2 in which the entity first qualifies as a Federally3 qualified health center or rural health clinic, the

4 State plan shall provide for the payment amount to

5 be calculated in accordance with paragraph (3).

6 ‘‘(5) ADMINISTRATION IN THE CASE OF MAN7 AGED CARE.—

8 ‘‘(A) IN GENERAL.—In the case of services

9 furnished by a Federally-qualified health center

10 or rural health clinic pursuant to a contract be11 tween the center or clinic and a managed care

12 entity (as defined in section 1932(a)(1)(B)), the

13 State plan shall provide for payment to the cen14 ter or clinic by the State of a supplemental pay15 ment equal to the amount (if any) by which the

16 amount determined under paragraphs (2), (3),

17 and (4) of this subsection exceeds the amount

18 of the payments provided under the contract.

19 ‘‘(B) PAYMENT SCHEDULE.—The supple20 mental payment required under subparagraph

21 (A) shall be made pursuant to a payment

22 schedule agreed to by the State and the Feder23 ally-qualified health center or rural health clin24 ic, but in no case less frequently than every 4

25 months.
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1 ‘‘(6) ALTERNATIVE PAYMENT METHODOLO2 GIES.—Notwithstanding any other provision of this

3 section, the State plan may provide for payment in

4 any fiscal year to a Federally-qualified health center

5 for services described in section 1905(a)(2)(C) or to

6 a rural health clinic for services described in section

7 1905(a)(2)(B) in an amount which is determined

8 under an alternative payment methodology that—

9 ‘‘(A) is agreed to by the State and the cen10 ter or clinic; and

11 ‘‘(B) results in payment to the center or

12 clinic of an amount which is at least equal to

13 the amount otherwise required to be paid to the

14 center or clinic under this section.’’.

15 (c) CONFORMING AMENDMENTS.—

16 (1) Section 4712 of the BBA (Public Law 105–

17 33; 111 Stat. 508) is amended by striking sub18 section (c).

19 (2) Section 1915(b) (42 U.S.C. 1396n(b)) is

20 amended by striking ‘‘1902(a)(13)(C)’’ and inserting

21 ‘‘1902(a)(15), 1902(aa),’’.

22 (d) GAO STUDY OF FUTURE REBASING.—The

23 Comptroller General of the United States shall provide for

24 a study on the need for, and how to, rebase or refine costs

25 for making payment under the medicaid program for serv-
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1 ices provided by Federally-qualified health centers and

2 rural health clinics (as provided under the amendments

3 made by this section). The Comptroller General shall pro4 vide for submittal of a report on such study to Congress

5 by not later than 4 years after the date of the enactment

6 of this Act.

7 (e) EFFECTIVE DATE.—The amendments made by

8 this section take effect on October 1, 2000, and apply to

9 services furnished on or after such date.

10 SEC. 703. STREAMLINED APPROVAL OF CONTINUED STATE11 WIDE SECTION 1115 MEDICAID WAIVERS.

12 (a) IN GENERAL.—Section 1115 (42 U.S.C. 1315)

13 is amended by adding at the end the following new sub14 section:

15 ‘‘(f) An application by the chief executive officer of

16 a State for an extension of a waiver project the State is

17 operating under an extension under subsection (e) (in this

18 subsection referred to as the ‘waiver project’) shall be sub19 mitted and approved or disapproved in accordance with

20 the following:

21 ‘‘(1) The application for an extension of the

22 waiver project shall be submitted to the Secretary at

23 least 120 days prior to the expiration of the current

24 period of the waiver project.
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1 ‘‘(2) Not later than 45 days after the date such

2 application is received by the Secretary, the Sec3 retary shall notify the State if the Secretary intends

4 to review the terms and conditions of the waiver

5 project. A failure to provide such notification shall

6 be deemed to be an approval of the application.

7 ‘‘(3) Not later than 45 days after the date a no8 tification is made in accordance with paragraph (2),

9 the Secretary shall inform the State of proposed

10 changes in the terms and conditions of the waiver

11 project. A failure to provide such information shall

12 be deemed to be an approval of the application.

13 ‘‘(4) During the 30-day period that begins on

14 the date information described in paragraph (3) is

15 provided to a State, the Secretary shall negotiate re16 vised terms and conditions of the waiver project with

17 the State.

18 ‘‘(5)(A) Not later than 120 days after the date

19 an application for an extension of the waiver project

20 is submitted to the Secretary (or such later date

21 agreed to by the chief executive officer of the State),

22 the Secretary shall—

23 ‘‘(i) approve the application subject to such

24 modifications in the terms and conditions—
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1 ‘‘(I) as have been agreed to by the

2 Secretary and the State; or

3 ‘‘(II) in the absence of such agree4 ment, as are determined by the Secretary

5 to be reasonable, consistent with the over6 all objectives of the waiver project, and not

7 in violation of applicable law; or

8 ‘‘(ii) disapprove the application.

9 ‘‘(B) A failure by the Secretary to approve or

10 disapprove an application submitted under this sub11 section in accordance with the requirements of sub12 paragraph (A) shall be deemed to be an approval of

13 the application subject to such modifications in the

14 terms and conditions as have been agreed to (if any)

15 by the Secretary and the State.

16 ‘‘(6) An approval of an application for an exten17 sion of a waiver project under this subsection shall

18 be for a period not to exceed 3 years.

19 ‘‘(7) An extension of a waiver project under this

20 subsection shall be subject to the final reporting and

21 evaluation requirements of paragraphs (4) and (5)

22 of subsection (e) (taking into account the extension

23 under this subsection with respect to any timing re24 quirements imposed under those paragraphs).’’.
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1 (b) EFFECTIVE DATE.—The amendment made by

2 subsection (a) applies to requests for extensions of dem3 onstration projects pending or submitted on or after the

4 date of the enactment of this Act.

5 SEC. 704. MEDICAID COUNTY-ORGANIZED HEALTH SYS6 TEMS.

7 (a) IN GENERAL.—Section 9517(c)(3)(C) of the

8 Comprehensive Omnibus Budget Reconciliation Act of

9 1985 is amended by striking ‘‘10 percent’’ and inserting

10 ‘‘14 percent’’.

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

12 subsection (a) takes effect on the date of the enactment

13 of this Act.

14 SEC. 705. DEADLINE FOR ISSUANCE OF FINAL REGULATION

15 RELATING TO MEDICAID UPPER PAYMENT

16 LIMITS.

17 (a) IN GENERAL.—Not later than December 31,

18 2000, the Secretary of Health and Human Services (in

19 this section referred to as the ‘‘Secretary’’), notwith20 standing any requirement of the Administrative Proce21 dures Act under chapter 5 of title 5, United States Code,

22 or any other provision of law, shall issue under sections

23 447.272, 447.304, and 447.321 of title 42, Code of Fed24 eral Regulations (and any other section of part 447 of title

25 42, Code of Federal Regulations that the Secretary deter-
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1 mines is appropriate), a final regulation based on the pro2 posed rule announced on October 5, 2000, that—

3 (1) modifies the upper payment limit test ap4 plied to State medicaid spending for inpatient hos5 pital services, outpatient hospital services, nursing

6 facility services, intermediate care facility services

7 for the mentally retarded, and clinic services by ap8 plying an aggregate upper payment limit to pay9 ments made to government facilities that are not

10 State-owned or operated facilities; and

11 (2) provides for a transition period in accord12 ance with subsection (b).

13 (b) TRANSITION PERIOD.—

14 (1) IN GENERAL.—The final regulation required

15 under subsection (a) shall provide that, with respect

16 to a State described in paragraph (3), the State

17 shall be considered to be in compliance with the final

18 regulation required under subsection (a) so long as,

19 for each State fiscal year during the period de20 scribed in paragraph (4), the State reduces pay21 ments under a State medicaid plan payment provi22 sion or methodology described in paragraph (3), or

23 reduces the actual dollar payment levels described in

24 paragraph (3)(B), so that the amount of the pay25 ments that would otherwise have been made under
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1 such provision, methodology, or payment levels by

2 the State for any State fiscal year during such pe3 riod is reduced by 15 percent in the first such State

4 fiscal year, and by an additional 15 percent in each

5 of next 5 State fiscal years.

6 (2) REQUIREMENT.—Notwithstanding para7 graph (1), the final regulation required under sub8 section (a) shall provide that, for any period (or por9 tion of a period) that occurs on or after October 1,

10 2008, medicaid payments made by a State described

11 in paragraph (3) shall comply with such final regula12 tion.

13 (3) STATE DESCRIBED.—A State described in

14 this paragraph is a State with a State medicaid plan

15 payment provision or methodology which—

16 (A) was approved, deemed to have been ap17 proved, or was in effect on or before October 1,

18 1992 (including any subsequent amendments or

19 successor provisions or methodologies and

20 whether or not a State plan amendment was

21 made to carry out such provision or method22 ology after such date) or under which claims for

23 Federal financial participation were filed and

24 paid on or before such date; and
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1 (B) provides for payments that are in ex2 cess of the upper payment limit test established

3 under the final regulation required under sub4 section (a) (or which would be noncompliant

5 with such final regulation if the actual dollar

6 payment levels made under the payment provi7 sion or methodology in the State fiscal year

8 which begins during 1999 were continued).

9 (4) PERIOD DESCRIBED.—The period described

10 in this paragraph is the period that begins on the

11 first State fiscal year that begins after September

12 30, 2002, and ends on September 30, 2008.

13 SEC. 706. ALASKA FMAP.

14 Notwithstanding the first sentence of section 1905(b)

15 of the Social Security Act (42 U.S.C. 1396d(b)), only with

16 respect to each of fiscal years 2001 through 2005, for pur17 poses of titles XIX and XXI of the Social Security Act,

18 the State percentage used to determine the Federal med19 ical assistance percentage for Alaska shall be that percent20 age which bears the same ratio to 45 percent as the square

21 of the adjusted per capita income of Alaska (determined

22 by dividing the State’s 3-year average per capita income

23 by 1.05) bears to the square of the per capita income of

24 the 50 States.
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1 SEC. 707. OPTIONAL COVERAGE OF LEGAL IMMIGRANTS

2 UNDER THE MEDICAID PROGRAM.

3 (a) IN GENERAL.—Section 1903(v) (42 U.S.C.

4 1396b(v)) is amended—

5 (1) in paragraph (1), by striking ‘‘paragraph

6 (2)’’ and inserting ‘‘paragraphs (2) and (4)’’; and

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

8 paragraph:

9 ‘‘(4)(A) A State may elect (in a plan amendment

10 under this title) to provide medical assistance under this

11 title, notwithstanding sections 401(a), 402(b), 403, and

12 421 of the Personal Responsibility and Work Opportunity

13 Reconciliation Act of 1996, for aliens who are lawfully re14 siding in the United States (including battered aliens de15 scribed in section 431(c) of such Act) and who are other16 wise eligible for such assistance, within either or both of

17 the following eligibility categories, but only if they have

18 lawfully resided in the United States for 2 years:

19 ‘‘(i) PREGNANT WOMEN.—Women during preg20 nancy (and during the 60-day period beginning on

21 the last day of the pregnancy).

22 ‘‘(ii) CHILDREN.—Children (as defined under

23 such plan), including optional targeted low-income

24 children described in section 1905(u)(2)(B).

25 ‘‘(B) In the case of a State that has elected to provide

26 medical assistance to a category of aliens under subpara-
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1 graph (A), no debt shall accrue under an affidavit of sup2 port against any sponsor of such an alien who has lawfully

3 resided in the United States for 2 years on the basis of

4 provision of assistance to such category.’’.

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

6 subsection (a) take effect on October 1, 2000, and apply

7 to medical assistance and child health assistance furnished

8 on or after such date.

9 SEC. 708. ADDITIONAL ENTITIES QUALIFIED TO DETER10 MINE MEDICAID PRESUMPTIVE ELIGIBILITY

11 FOR LOW-INCOME CHILDREN.

12 (a) IN GENERAL.—Section 1920A(b)(3)(A)(i) (42

13 U.S.C. 1396r–1a(b)(3)(A)(i)) is amended—

14 (1) by striking ‘‘or (II)’’ and inserting ‘‘, (II)’’;

15 and

16 (2) by inserting ‘‘eligibility of a child for med17 ical assistance under the State plan under this title,

18 or eligibility of a child for child health assistance

19 under the program funded under title XXI, (III) is

20 an elementary school or secondary school, as such

21 terms are defined in section 14101 of the Elemen22 tary and Secondary Education Act of 1965 (20

23 U.S.C. 8801), an elementary or secondary school op24 erated or supported by the Bureau of Indian Affairs,

25 a State or tribal child support enforcement agency,
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1 a child care resource and referral agency, an organi2 zation that is providing emergency food and shelter

3 under a grant under the Stewart B. McKinney

4 Homeless Assistance Act, or a State or tribal office

5 or entity involved in enrollment in the program

6 under this title, under part A of title IV, under title

7 XXI, or that determines eligibility for any assistance

8 or benefits provided under any program of public or

9 assisted housing that receives Federal funds, includ10 ing the program under section 8 or any other section

11 of the United States Housing Act of 1937 (42

12 U.S.C. 1437 et seq.) or under the Native American

13 Housing Assistance and Self-Determination Act of

14 1996 (25 U.S.C. 4101 et seq.), or (IV) any other en15 tity the State so deems, as approved by the Sec16 retary’’ before the semicolon.

17 (b) TECHNICAL AMENDMENTS.—Section 1920A (42

18 U.S.C. 1396r–1a) is amended—

19 (1) in subsection (b)(3)(A)(i), by striking ‘‘42

20 U.S.C. 9821’’ and inserting ‘‘42 U.S.C. 9831’’;

21 (2) in subsection (b)(3)(A)(ii), by striking

22 ‘‘paragraph (1)(A)’’ and inserting ‘‘paragraph (2)’’;

23 and
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1 (3) in subsection (c)(2), in the matter preceding

2 subparagraph (A), by striking ‘‘subsection

3 (b)(1)(A)’’ and inserting ‘‘subsection (b)(2)’’.

4 (c) APPLICATION TO PRESUMPTIVE ELIGIBILITY FOR

5 PREGNANT WOMEN UNDER MEDICAID.—Section 1920(b)

6 (42 U.S.C. 1396r–1(b)) is amended by adding at the end

7 after and below paragraph (2) the following flush sen8 tence:

9 ‘‘The term ‘qualified provider’ includes a qualified entity

10 as defined in section 1920A(b)(3).’’.

11 (d) APPLICATION UNDER TITLE XXI.—Section

12 2107(e)(1) (42 U.S.C. 1397gg(e)(1)) is amended by add13 ing at the end the following new subparagraph:

14 ‘‘(D) Section 1920A (relating to presump15 tive eligibility).’’.

16 SEC. 709. IMPROVING WELFARE-TO-WORK TRANSITION.

17 (a) 1 YEAR EXTENSION.—Section 1925(f) (42

18 U.S.C. 1396r–6(f)) is amended by striking ‘‘2001’’ and

19 inserting ‘‘2002’’.

20 (b) SIMPLIFICATION OPTIONS.—

21 (1) STATE OPTION TO WAIVE REPORTING RE22 QUIREMENTS.—Section 1925(b)(2) of such Act (42

23 U.S.C. 1396r–6(b)(2)) is amended by adding at the

24 end the following new subparagraph:
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1 ‘‘(C) STATE OPTION TO WAIVE REPORTING

2 REQUIREMENTS.—A State may elect to waive

3 the reporting requirements under subparagraph

4 (B) and, in the case of such a waiver for pur5 poses of notices required under subparagraph

6 (A), to exclude from such notices any reference

7 to any requirement under subparagraph (B).’’.

8 (2) EXEMPTION FOR STATES COVERING NEEDY

9 FAMILIES UP TO 185 PERCENT OF POVERTY.—Sec10 tion 1925 (42 U.S.C. 1396r–6) is amended—

11 (A) in each of subsections (a)(1) and

12 (b)(1), by inserting ‘‘but subject to subsection

13 (g),’’ after ‘‘Notwithstanding any other provi14 sion of this title,’’; and

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

16 subsection:

17 ‘‘(g) EXEMPTION FOR STATE COVERING NEEDY

18 FAMILIES UP TO 185 PERCENT OF POVERTY.—

19 ‘‘(1) IN GENERAL.—At State option, the provi20 sions of this section shall not apply to a State that

21 uses the authority under section 1931(b)(2)(C) to

22 make medical assistance available under the State

23 plan under this title, at a minimum, to all individ24 uals described in section 1931(b)(1) in families with

25 gross incomes (determined without regard to work-
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1 related child care expenses of such individuals) at or

2 below 185 percent of the income official poverty line

3 (as defined by the Office of Management and Budg4 et, and revised annually in accordance with section

5 673(2) of the Omnibus Budget Reconciliation Act of

6 1981) applicable to a family of the size involved.

7 ‘‘(2) APPLICATION TO OTHER PROVISIONS OF

8 THIS TITLE.—The State plan of a State described in

9 paragraph (1) shall be deemed to meet the require10 ments of sections 1902(a)(10)(A)(i)(I) and

11 1902(e)(1).’’.

12 (3) EFFECTIVE DATE.—The amendments made

13 by this subsection take effect on October 1, 2000.

14 TITLE VIII—STATE CHILDREN’S

15 HEALTH INSURANCE PROGRAM

16 SEC. 801. SPECIAL RULE FOR REDISTRIBUTION AND AVAIL17 ABILITY OF UNUSED FISCAL YEAR 1998 AND

18 1999 SCHIP ALLOTMENTS.

19 (a) CHANGE IN RULES FOR REDISTRIBUTION AND

20 RETENTION OF UNUSED SCHIP ALLOTMENTS FOR FIS21 CAL YEARS 1998 AND 1999.—Section 2104 (42 U.S.C.

22 1397dd) is amended by adding at the end the following

23 new subsection:
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1 ‘‘(g) RULE FOR REDISTRIBUTION AND EXTENDED

2 AVAILABILITY OF FISCAL YEARS 1998 AND 1999 ALLOT3 MENTS.—

4 ‘‘(1) AMOUNT REDISTRIBUTED.—

5 ‘‘(A) IN GENERAL.—In the case of a State

6 that expends all of its allotment under sub7 section (b) or (c) for fiscal year 1998 by the

8 end of fiscal year 2000, or for fiscal year 1999

9 by the end of fiscal year 2001, the Secretary

10 shall redistribute to the State under subsection

11 (f) (from the fiscal year 1998 or 1999 allot12 ments of other States, respectively, as deter13 mined by the application of paragraphs (2) and

14 (3) with respect to the respective fiscal year))

15 the following amount:

16 ‘‘(i) STATE.—In the case of 1 of the

17 50 States or the District of Columbia, with

18 respect to—

19 ‘‘(I) the fiscal year 1998 allot20 ment, the amount by which the

21 State’s expenditures under this title in

22 fiscal years 1998, 1999, and 2000 ex23 ceed the State’s allotment for fiscal

24 year 1998 under subsection (b); or
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1 ‘‘(II) the fiscal year 1999 allot2 ment, the amount by which the

3 State’s expenditures under this title in

4 fiscal years 1999, 2000, and 2001 ex5 ceed the State’s allotment for fiscal

6 year 1999 under subsection (b).

7 ‘‘(ii) TERRITORY.—In the case of a

8 commonwealth or territory described in

9 subsection (c)(3), an amount that bears

10 the same ratio to 1.05 percent of the total

11 amount described in paragraph (2)(B)(i)(I)

12 as the ratio of the commonwealth’s or ter13 ritory’s fiscal year 1998 or 1999 allotment

14 under subsection (c) (as the case may be)

15 bears to the total of all such allotments for

16 such fiscal year under such subsection.

17 ‘‘(B) EXPENDITURE RULES.—An amount

18 redistributed to a State under this paragraph

19 with respect to fiscal year 1998 or 1999—

20 ‘‘(i) shall not be included in the deter21 mination of the State’s allotment for any

22 fiscal year under this section;

23 ‘‘(ii) notwithstanding subsection (e),

24 shall remain available for expenditure by
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1 the State through the end of fiscal year

2 2002; and

3 ‘‘(iii) shall be counted as being ex4 pended with respect to a fiscal year allot5 ment in accordance with applicable regula6 tions of the Secretary.

7 ‘‘(2) EXTENSION OF AVAILABILITY OF PORTION

8 OF UNEXPENDED FISCAL YEARS 1998 AND 1999 AL9 LOTMENTS.—

10 ‘‘(A) IN GENERAL.—Notwithstanding sub11 section (e):

12 ‘‘(i) FISCAL YEAR 1998 ALLOTMENT.—

13 Of the amounts allotted to a State pursu14 ant to this section for fiscal year 1998 that

15 were not expended by the State by the end

16 of fiscal year 2000, the amount specified in

17 subparagraph (B) for fiscal year 1998 for

18 such State shall remain available for ex19 penditure by the State through the end of

20 fiscal year 2002.

21 ‘‘(ii) FISCAL YEAR 1999 ALLOT22 MENT.—Of the amounts allotted to a State

23 pursuant to this subsection for fiscal year

24 1999 that were not expended by the State

25 by the end of fiscal year 2001, the amount
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1 specified in subparagraph (B) for fiscal

2 year 1999 for such State shall remain

3 available for expenditure by the State

4 through the end of fiscal year 2002.

5 ‘‘(B) AMOUNT REMAINING AVAILABLE FOR

6 EXPENDITURE.—The amount specified in this

7 subparagraph for a State for a fiscal year is

8 equal to—

9 ‘‘(i) the amount by which (I) the total

10 amount available for redistribution under

11 subsection (f) from the allotments for that

12 fiscal year, exceeds (II) the total amounts

13 redistributed under paragraph (1) for that

14 fiscal year; multiplied by

15 ‘‘(ii) the ratio of the amount of such

16 State’s unexpended allotment for that fis17 cal year to the total amount described in

18 clause (i)(I) for that fiscal year.

19 ‘‘(C) USE OF UP TO 10 PERCENT OF

20 RETAINED 1998 ALLOTMENTS FOR OUTREACH

21 ACTIVITIES.—Notwithstanding section

22 2105(c)(2)(A), with respect to any State de23 scribed in subparagraph (A)(i), the State may

24 use up to 10 percent of the amount specified in

25 subparagraph (B) for fiscal year 1998 for ex-
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1 penditures for outreach activities approved by

2 the Secretary.

3 ‘‘(3) DETERMINATION OF AMOUNTS.—For pur4 poses of calculating the amounts described in para5 graphs (1) and (2) relating to the allotment for fis6 cal year 1998 or fiscal year 1999, the Secretary

7 shall use the amounts reported by the States not

8 later than November 30, 2000, or November 30,

9 2001, respectively, on HCFA Form 64 or HCFA

10 Form 21, as approved by the Secretary.’’.

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

12 this section shall take effect as if included in the enact13 ment of section 4901 of BBA (111 Stat. 552).

14 SEC. 802. AUTHORITY TO PAY MEDICAID EXPANSION SCHIP

15 COSTS FROM TITLE XXI APPROPRIATION.

16 (a) AUTHORITY TO PAY MEDICAID EXPANSION

17 SCHIP COSTS FROM TITLE XXI APPROPRIATION.—Sec18 tion 2105(a) (42 U.S.C. 1397ee(a)) is amended—

19 (1) by redesignating subparagraphs (A) through

20 (D) of paragraph (2) as clauses (i) through (iv), re21 spectively, and indenting appropriately;

22 (2) by redesignating paragraph (1) as subpara23 graph (C), and indenting appropriately;

24 (3) by redesignating paragraph (2) as subpara25 graph (D), and indenting appropriately;
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1 (4) by striking ‘‘(a) IN GENERAL.—’’ and the

2 remainder of the text that precedes subparagraph

3 (C), as so redesignated, and inserting the following:

4 ‘‘(a) PAYMENTS.—

5 ‘‘(1) IN GENERAL.—Subject to the succeeding

6 provisions of this section, the Secretary shall pay to

7 each State with a plan approved under this title,

8 from its allotment under section 2104, an amount

9 for each quarter equal to the enhanced FMAP (or,

10 in the case of expenditures described in subpara11 graph (B), the Federal medical assistance percent12 age (as defined in the first sentence of section

13 1905(b))) of expenditures in the quarter—

14 ‘‘(A) for child health assistance under the

15 plan for targeted low-income children in the

16 form of providing medical assistance for which

17 payment is made on the basis of an enhanced

18 FMAP under the fourth sentence of section

19 1905(b);

20 ‘‘(B) for the provision of medical assist21 ance on behalf of a child during a presumptive

22 eligibility period under section 1920A;’’; and

23 (5) by adding after subparagraph (D), as so re24 designated, the following new paragraph:
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1 ‘‘(2) ORDER OF PAYMENTS.—Payments under

2 paragraph (1) from a State’s allotment shall be

3 made in the following order:

4 ‘‘(A) First, for expenditures for items de5 scribed in paragraph (1)(A).

6 ‘‘(B) Second, for expenditures for items

7 described in paragraph (1)(B).

8 ‘‘(C) Third, for expenditures for items de9 scribed in paragraph (1)(C).

10 ‘‘(D) Fourth, for expenditures for items

11 described in paragraph (1)(D).’’.

12 (b) ELIMINATION OF REQUIREMENT TO REDUCE

13 TITLE XXI ALLOTMENT BY MEDICAID EXPANSION

14 SCHIP COSTS.—Section 2104 (42 U.S.C. 1397dd) is

15 amended by striking subsection (d).

16 (c) AUTHORITY TO TRANSFER TITLE XXI APPRO17 PRIATIONS TO TITLE XIX APPROPRIATION ACCOUNT AS

18 REIMBURSEMENT FOR MEDICAID EXPENDITURES FOR

19 MEDICAID EXPANSION SCHIP SERVICES.—Notwith20 standing any other provision of law, all amounts appro21 priated under title XXI and allotted to a State pursuant

22 to subsection (b) or (c) of section 2104 of the Social Secu23 rity Act (42 U.S.C. 1397dd) for fiscal years 1998 through

24 2000 (including any amounts that, but for this provision,

25 would be considered to have expired) and not expended
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1 in providing child health assistance or related services for

2 which payment may be made pursuant to subparagraph

3 (C) or (D) of section 2105(a)(1) of such Act (42 U.S.C.

4 1397ee(a)(1)) (as amended by subsection (a)), shall be

5 available to reimburse the Grants to States for Medicaid

6 account in an amount equal to the total payments made

7 to such State under section 1903(a) of such Act (42

8 U.S.C. 1396b(a)) for expenditures in such years for med9 ical assistance described in subparagraphs (A) and (B) of

10 section 2105(a)(1) of such Act (42 U.S.C. 1397ee(a)(1)

11 (as so amended).

12 (d) CONFORMING AMENDMENTS.—

13 (1) Section 1905(b) (42 U.S.C. 1396d(b)) is

14 amended in the fourth sentence by striking ‘‘the

15 State’s allotment under section 2104 (not taking

16 into account reductions under section 2104(d)(2))

17 for the fiscal year reduced by the amount of any

18 payments made under section 2105 to the State

19 from such allotment for such fiscal year’’ and insert20 ing ‘‘the State’s available allotment under section

21 2104’’.

22 (2) Section 1905(u)(1)(B) (42 U.S.C.

23 1396d(u)(1)(B)) is amended by striking ‘‘and sec24 tion 2104(d)’’.
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1 (3) Section 2104 (42 U.S.C. 1397dd), as

2 amended by subsection (b), is further amended—

3 (A) in subsection (b)(1), by striking ‘‘and

4 subsection (d)’’; and

5 (B) in subsection (c)(1), by striking ‘‘sub6 ject to subsection (d),’’.

7 (4) Section 2105(c) (42 U.S.C. 1397ee(c)) is

8 amended—

9 (A) in paragraph (2)(A), by striking all

10 that follows ‘‘Except as provided in this para11 graph,’’ and inserting ‘‘the amount of payment

12 that may be made under subsection (a) for a

13 fiscal year for expenditures for items described

14 in paragraph (1)(D) of such subsection shall

15 not exceed 10 percent of the total amount of ex16 penditures for which payment is made under

17 subparagraphs (A), (C), and (D) of paragraph

18 (1) of such subsection.’’;

19 (B) in paragraph (2)(B), by striking ‘‘de20 scribed in subsection (a)(2)’’ and inserting ‘‘de21 scribed in subsection (a)(1)(D)’’; and

22 (C) in paragraph (6)(B), by striking ‘‘Ex23 cept as otherwise provided by law,’’ and insert24 ing ‘‘Except as provided in subparagraph (A) or
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1 (B) of subsection (a)(1) or any other provision

2 of law,’’.

3 (5) Section 2110(a) (42 U.S.C. 1397jj(a)) is

4 amended by striking ‘‘section 2105(a)(2)(A)’’ and

5 inserting ‘‘section 2105(a)(1)(D)(i)’’.

6 (e) TECHNICAL AMENDMENT.—Section

7 2105(d)(2)(B)(ii) (42 U.S.C. 1397ee(d)(2)(B)(ii)) is

8 amended by striking ‘‘enhanced FMAP under section

9 1905(u)’’ and inserting ‘‘enhanced FMAP under the

10 fourth sentence of section 1905(b)’’.

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

12 this section shall be effective as if included in the enact13 ment of section 4901 of the BBA (111 Stat. 552).

14 SEC. 803. OPTIONAL COVERAGE OF CERTAIN LEGAL IMMI15 GRANTS UNDER SCHIP.

16 (a) IN GENERAL.—Section 2107(e)(1) (42 U.S.C.

17 1397gg(e)(1)) as amended in section 707(d), is further

18 amended by adding at the end the following new subpara19 graph:

20 ‘‘(E) Section 1903(v)(4) (relating to op21 tional coverage of categories of lawfully residing

22 alien children) but only if the State has elected

23 to apply such section to the category of children

24 under title XIX.’’.
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1 (b) EFFECTIVE DATE.—The amendment made by

2 subsection (a) takes effect October 1, 2000, and applies

3 to medical assistance and child health assistance furnished

4 on or after such date.

5 TITLE IX—OTHER PROVISIONS

6 Subtitle A—PACE Program

7 SEC. 901. EXTENSION OF TRANSITION FOR CURRENT WAIV8 ERS.

9 Section 4803(d)(2) of BBA is amended—

10 (1) in subparagraph (A), by striking ‘‘24

11 months’’ and inserting ‘‘36 months’’;

12 (2) in subparagraph (A), by striking ‘‘the initial

13 effective date of regulations described in subsection

14 (a)’’ and inserting ‘‘July 1, 2000’’; and

15 (3) in subparagraph (B), by striking ‘‘3 years’’

16 and inserting ‘‘4 years’’.

17 SEC. 902. CONTINUING OF CERTAIN OPERATING ARRANGE18 MENTS PERMITTED.

19 (a) IN GENERAL.—Section 1894(f)(2) (42 U.S.C.

20 1395eee(f)(2)) is amended by adding at the end the fol21 lowing new subparagraph:

22 ‘‘(C) CONTINUATION OF MODIFICATIONS

23 OR WAIVERS OF OPERATIONAL REQUIREMENTS

24 UNDER DEMONSTRATION STATUS.—If a PACE

25 program operating under demonstration author-
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1 ity has contractual or other operating arrange2 ments which are not otherwise recognized in

3 regulation and which were in effect on July 1,

4 2000, the Secretary (in close consultation with,

5 and with the concurrence of, the State admin6 istering agency) shall permit any such program

7 to continue such arrangements so long as such

8 arrangements are found by the Secretary and

9 the State to be reasonably consistent with the

10 objectives of the PACE program.’’.

11 (b) CONFORMING AMENDMENT.—Section 1934(f)(2)

12 (42 U.S.C. 1396u–4(f)(2)) is amended by adding at the

13 end the following new subparagraph:

14 ‘‘(C) CONTINUATION OF MODIFICATIONS

15 OR WAIVERS OF OPERATIONAL REQUIREMENTS

16 UNDER DEMONSTRATION STATUS.—If a PACE

17 program operating under demonstration author18 ity has contractual or other operating arrange19 ments which are not otherwise recognized in

20 regulation and which were in effect on July 1

21 2000, the Secretary (in close consultation with,

22 and with the concurrence of, the State admin23 istering agency) shall permit any such program

24 to continue such arrangements so long as such

25 arrangements are found by the Secretary and
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1 the State to be reasonably consistent with the

2 objectives of the PACE program.’’.

3 (c) EFFECTIVE DATE.—The amendments made by

4 this section shall be effective as included in the enactment

5 of BBA.

6 SEC. 903. FLEXIBILITY IN EXERCISING WAIVER AUTHORITY.

7 In applying sections 1894(f)(2)(B) and

8 1934(f)(2)(B) of the Social Security Act (42 U.S.C.

9 1395eee(f)(2)(B), 1396u–4(f)(2)(B)), the Secretary of

10 Health and Human Services—

11 (1) shall approve or deny a request for a modi12 fication or a waiver of provisions of the PACE pro13 tocol not later than 90 days after the date the Sec14 retary receives the request; and

15 (2) may exercise authority to modify or waive

16 such provisions in a manner that responds promptly

17 to the needs of PACE programs relating to areas of

18 employment and the use of community-based pri19 mary care physicians.
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1 Subtitle B—Outreach to Eligible

2 Low-Income Medicare Bene3 ficiaries

4 SEC. 911. OUTREACH ON AVAILABILITY OF MEDICARE

5 COST-SHARING ASSISTANCE TO ELIGIBLE

6 LOW-INCOME MEDICARE BENEFICIARIES.

7 (a) OUTREACH.—

8 (1) IN GENERAL.—Title XI (42 U.S.C. 1301 et

9 seq.) is amended by inserting after section 1143 the

10 following new section:

11 ‘‘OUTREACH EFFORTS TO INCREASE AWARENESS OF THE

12 AVAILABILITY OF MEDICARE COST-SHARING

13 ‘‘SEC. 1144. (a) OUTREACH.—

14 ‘‘(1) IN GENERAL.—The Commissioner of So15 cial Security (in this section referred to as the ‘Com16 missioner’) shall conduct outreach efforts to—

17 ‘‘(A) identify individuals entitled to bene18 fits under the medicare program under title

19 XVIII who may be eligible for medical assist20 ance for payment of the cost of medicare cost21 sharing under the medicaid program pursuant

22 to sections 1902(a)(10)(E) and 1933; and

23 ‘‘(B) notify such individuals of the avail24 ability of such medical assistance under such

25 sections.
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1 ‘‘(2) CONTENT OF NOTICE.—Any notice fur2 nished under paragraph (1) shall state that eligi3 bility for medicare cost-sharing assistance under

4 such sections is conditioned upon—

5 ‘‘(A) the individual providing to the State

6 information about income and resources (in the

7 case of an individual residing in a State that

8 imposes an assets test for such eligibility); and

9 ‘‘(B) meeting the applicable eligibility cri10 teria.

11 ‘‘(b) COORDINATION WITH STATES.—

12 ‘‘(1) IN GENERAL.—In conducting the outreach

13 efforts under this section, the Commissioner shall—

14 ‘‘(A) furnish the agency of each State re15 sponsible for the administration of the medicaid

16 program and any other appropriate State agen17 cy with information consisting of the name and

18 address of individuals residing in the State that

19 the Commissioner determines may be eligible

20 for medical assistance for payment of the cost

21 of medicare cost-sharing under the medicaid

22 program pursuant to sections 1902(a)(10)(E)

23 and 1933; and

24 ‘‘(B) update any such information not less

25 frequently than once per year.
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1 ‘‘(2) INFORMATION IN PERIODIC UPDATES.—

2 The periodic updates described in paragraph (1)(B)

3 shall include information on individuals who are or

4 may be eligible for the medical assistance described

5 in paragraph (1)(A) because such individuals have

6 experienced reductions in benefits under title II.’’.

7 (2) AMENDMENT TO TITLE XIX.—Section

8 1905(p) (42 U.S.C. 1396d(p)) is amended by adding

9 at the end the following new paragraph:

10 ‘‘(5) For provisions relating to outreach efforts to in11 crease awareness of the availability of medicare cost-shar12 ing, see section 1144.’’.

13 (b) GAO REPORT.—The Comptroller General of the

14 United States shall conduct a study of the impact of sec15 tion 1144 of the Social Security Act (as added by sub16 section (a)(1)) on the enrollment of individuals for medi17 care cost-sharing under the medicaid program. Not later

18 than 18 months after the date that the Commissioner of

19 Social Security first conducts outreach under section 1144

20 of such Act, the Comptroller General shall submit to Con21 gress a report on such study. The report shall include such

22 recommendations for legislative changes as the Comp23 troller General deems appropriate.
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1 (c) EFFECTIVE DATE.—The amendments made by

2 subsections (a) shall take effect one year after the date

3 of the enactment of this Act.

4 Subtitle C—Maternal and Child

5 Health Block Grant

6 SEC. 921. INCREASE IN AUTHORIZATION OF APPROPRIA7 TIONS FOR THE MATERNAL AND CHILD

8 HEALTH SERVICES BLOCK GRANT.

9 (a) IN GENERAL.—Section 501(a) (42 U.S.C.

10 701(a)) is amended in the matter preceding paragraph (1)

11 by striking ‘‘$705,000,000 for fiscal year 1994’’ and in12 serting ‘‘$850,000,000 for fiscal year 2001’’.

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

14 subsection (a) takes effect on October 1, 2000.

15 Subtitle D—Diabetes

16 SEC. 931. INCREASE IN APPROPRIATIONS FOR SPECIAL DI17 ABETES PROGRAMS FOR TYPE I DIABETES

18 AND INDIANS.

19 (a) SPECIAL DIABETES PROGRAMS FOR TYPE I DIA20 BETES.—Section 330B(b) of the Public Health Service

21 Act (42 U.S.C. 254c–2(b)) is amended—

22 (1) by striking ‘‘Notwithstanding’’ and insert23 ing the following:

24 ‘‘(1) TRANSFERRED FUNDS.—Notwith25 standing’’; and
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1 (2) by adding at the end the following:

2 ‘‘(2) APPROPRIATIONS.—For the purpose of

3 making grants under this section, there is appro4 priated, out of any funds in the Treasury not other5 wise appropriated—

6 ‘‘(A) $70,000,000 for each of fiscal years

7 2001 and 2002 (which shall be combined with

8 amounts transferred under paragraph (1) for

9 each such fiscal years); and

10 ‘‘(B) $100,000,000 for fiscal year 2003.’’.

11 (b) SPECIAL DIABETES PROGRAMS FOR INDIANS.—

12 Section 330C(c) of such Act (42 U.S.C. 254c–3(c)) is

13 amended—

14 (1) by striking ‘‘Notwithstanding’’ and insert15 ing the following:

16 ‘‘(1) TRANSFERRED FUNDS.—Notwith17 standing’’; and

18 (2) by adding at the end the following:

19 ‘‘(2) APPROPRIATIONS.—For the purpose of

20 making grants under this section, there is appro21 priated, out of any money in the Treasury not other22 wise appropriated—

23 ‘‘(A) $70,000,000 for each of fiscal years

24 2001 and 2002 (which shall be combined with
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1 amounts transferred under paragraph (1) for

2 each such fiscal years); and

3 ‘‘(B) $100,000,000 for fiscal year 2003.’’.

4 (c) EXTENSION OF FINAL REPORT ON GRANT PRO5 GRAMS.—Section 4923(b)(2) of BBA is amended by strik6 ing ‘‘2002’’ and inserting ‘‘2003’’.

7 SEC. 932. APPROPRIATIONS FOR RICKY RAY HEMOPHILIA

8 RELIEF FUND.

9 Section 101(e) of the Ricky Ray Hemophilia Relief

10 Fund Act of 1998 (42 U.S.C. 300c–22 note) is amended

11 by adding at the end the following: ‘‘There is appropriated

12 to the Fund $475,000,000 for fiscal year 2001, to remain

13 available until expended.’’.

14 Subtitle E—Nurse Staffing and

15 Quality Improvement Act of 2000

16 SEC. 941. SHORT TITLE.

17 This subtitle may be cited as the ‘‘Nursing Home

18 Staffing and Quality Improvement Act of 2000’’.

19 SEC. 942. GRANTS TO STATES FOR IMPROVEMENTS IN

20 NURSING HOME STAFFING AND QUALITY.

21 (a) SECRETARY’S AUTHORITY TO AWARD GRANTS.—

22 The Secretary shall establish a program of competitive

23 grants to States, in accordance with the provisions of this

24 section, for the purpose of improving the quality of care

25 furnished in nursing homes operating in the State.
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1 (b) APPLICATIONS AND ELIGIBILITY FOR GRANTS.—

2 (1) INITIAL APPLICATION.—A State seeking a

3 grant to conduct a project under this section shall

4 submit an application containing such information

5 and assurances as the Secretary may require,

6 including—

7 (A) a commitment to submit annual re8 ports describing the State’s progress in increas9 ing staffing levels and making other quality im10 provements in nursing homes in the State; and

11 (B) a description of a plan for evaluation

12 of the activities carried out under the grant, in13 cluding a plan for measurement of progress to14 ward the goals and objectives of the program,

15 consistent with the principles of the Govern16 ment Performance and Results Act.

17 (2) CONSULTATION WITH PUBLIC.—Before sub18 mitting an application for a grant under this section,

19 States shall solicit and consider the views of mem20 bers of the public, nursing home residents or their

21 representatives, and other persons concerned with

22 the administration of nursing homes within the

23 State with respect to the design of the proposed

24 State program.

25 (3) ELIGIBILITY.—
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1 (A) INITIAL ELIGIBILITY.—A State shall

2 not be eligible for a grant award under this sec3 tion unless it makes assurances satisfactory to

4 the Secretary that the skilled nursing facilities

5 (as defined in section 1819(a)) and nursing fa6 cilities (as defined in section 1919(a)) within

7 the State will reach or exceed the minimum

8 staff level described in subsection (d)(2) within

9 two years after enactment of this Act and will

10 maintain such level throughout the remainder

11 of the grant program.

12 (B) CONTINUING ELIGIBILITY.—A State

13 shall not be eligible for the continuation of

14 grant funding under a multi-year grant under

15 this section unless the State demonstrates to

16 the Secretary’s satisfaction that it continues to

17 meet the requirement described in subpara18 graph (A) and has made sufficient progress in

19 meeting the goals described in its grant applica20 tion.

21 (c) USE OF GRANT FUNDS.—Funds received by a

22 State under this section may be provided to entities in23 cluding nursing homes, labor management partnerships,

24 and educational institutions, and may be used for any or

25 all of the following purposes:
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1 (1) To enable a nursing home to recruit addi2 tional nursing staff or to retain existing nursing

3 staff (including through the use of reasonable finan4 cial incentives or reasonable benefit enhancements).

5 (2) To increase education and training of nurs6 ing staff (including designing or implementing pro7 grams to promote the career advancement of cer8 tified nurse aides).

9 (3) To provide bonuses to nursing homes meet10 ing State quality standards or avoiding serious qual11 ity violations for a period of one or more years.

12 (4) Such other nursing home staffing and qual13 ity improvement initiatives as the Secretary may ap14 prove.

15 (d) DISTRIBUTION OF FUNDS.—

16 (1) IN GENERAL.—Subject to subsection (b), in

17 awarding grants under this section, the Secretary

18 shall award no more than 25 percent of the funds

19 to States in which, as of the date of the enactment

20 of this section, skilled nursing facilities (as defined

21 in section 1819(a)) and nursing facilities (as defined

22 in section 1919(a)) have reached or exceeded the

23 minimum staff level specified in paragraph (2) (as

24 determined by the Secretary).

25 (2) MINIMUM NURSING HOME STAFF LEVEL.—
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1 (A) IN GENERAL.—Subject to subpara2 graph (B), for purposes of subsection (b) and

3 paragraph (1), the level specified in this para4 graph for a skilled nursing facility or nursing

5 facility is a staff level sufficient to ensure that

6 each resident receives from a certified nurse

7 aide at least 2 hours per day of direct care (in8 cluding repositioning the resident and changing

9 wet clothes, assisting with feeding, exercise, and

10 toileting, and working to enhance a resident’s

11 independence with respect to activities of daily

12 living).

13 (B) SECRETARY’S AUTHORITY TO IN14 CREASE MINIMUM STAFF LEVEL.—The Sec15 retary may establish a minimum staff level that

16 is higher than that specified in subparagraph

17 (A). Any such revised staff level shall be effec18 tive no earlier than six months after the date on

19 which Secretary provides notice to States of the

20 new requirement.

21 (3) MULTI-YEAR GRANT FUNDS.—The Sec22 retary shall award any multi-year grant under this

23 section from amounts appropriated (or available pur24 suant to subsection (e)(2)) for the first fiscal year

25 of the grant.
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1 (e) APPROPRIATIONS AND AVAILABILITY OF CIVIL

2 MONEY PENALTY (CPM) COLLECTIONS.—

3 (1) APPROPRIATIONS.—There are appropriated

4 for all costs to the Secretary for carrying out the

5 program under this section $200,000,000 for each of

6 fiscal years 2001 through 2005, such funds to re7 main available to the Secretary through the end of

8 the first succeeding fiscal year.

9 (2) AVAILABILITY OF CMP COLLECTIONS.—In

10 addition to the amounts appropriated pursuant to

11 paragraph (1), there shall be available to the Sec12 retary for such costs for such fiscal years any

13 amounts deposited in the Nursing Facility Civil

14 Money Penalties Collection Account established

15 under section 4.

16 SEC. 943. ENHANCED NURSING FACILITY REPORTING RE17 QUIREMENTS.

18 (a) MEDICARE.—

19 (1) SUBMISSION OF NURSING STAFF LEVEL

20 DATA TO THE SECRETARY.—Section 1819(b) (42

21 U.S.C. 1395i–3(b)) is amended by adding at the end

22 the following new paragraph:

23 ‘‘(8) DATA ON STAFFING LEVELS.—

24 ‘‘(A) SUBMISSION TO SECRETARY.—A

25 skilled nursing facility shall submit to the Sec-
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1 retary, in such form and manner and at such

2 intervals as the Secretary may require, data

3 with respect to nursing staff of the facility.

4 Such data shall include the total number of

5 nursing staff hours furnished during the period

6 specified by the Secretary (including totals for

7 each shift worked during such period) by the

8 facility to residents for which payment is made

9 under section 1888(e), broken down by total

10 certified nurse aide hours, total licensed prac11 tical or vocational nurse hours, and total reg12 istered nurse hours, and shall also include the

13 average wage rate for each class of nursing

14 staff employed by the facility.

15 ‘‘(B) PUBLICATION.—The Secretary shall

16 provide for the publication on the Internet Site

17 of the Department of Health and Human Serv18 ices known as Nursing Home Compare the fa19 cility-specific nursing staff information collected

20 pursuant to subparagraph (A). The Secretary

21 shall update such information periodically.’’.

22 (2) POSTING OF INFORMATION ON NURSING FA23 CILITY STAFFING.—Section 1819(b) (42 U.S.C.

24 1395i–3(b)), as amended by paragraph (1), is fur-
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1 ther amended by adding at the end the following

2 new paragraph:

3 ‘‘(9) INFORMATION ON NURSE STAFFING.—

4 ‘‘(A) IN GENERAL.—A skilled nursing fa5 cility shall post daily for each nursing unit of

6 the facility and for each shift the current num7 ber of licensed and unlicensed nursing staff di8 rectly responsible for resident care. The infor9 mation shall be displayed in a uniform manner

10 (as specified by the Secretary) and in a clearly

11 visible place.

12 ‘‘(B) PUBLICATION OF DATA.—A skilled

13 nursing facility shall, upon request, make avail14 able to the public the nursing staff data de15 scribed in subparagraph (A).’’.

16 (3) INFORMATION CONCERNING PATIENT CLAS17 SIFICATION.—Section 1819(b)(4)(C) (42 U.S.C.

18 1395i–3(b)(4)(C)) is amended by adding at the end

19 the following new clause:

20 ‘‘(iii) INFORMATION CONCERNING

21 RESIDENTS.—The skilled nursing facility

22 shall provide the Secretary, in such form

23 and manner and at such intervals as the

24 Secretary may require, a classification of

25 all residents of the skilled nursing facility
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1 that accords with the patient classification

2 system described in section

3 1888(e)(3)(B)(ii), or such successor system

4 as the Secretary may identify.’’.

5 (b) MEDICAID.—

6 (1) IN GENERAL.—Section 1919(b) (42 U.S.C.

7 1396r) is amended by adding at the end the fol8 lowing new paragraph:

9 ‘‘(8) DATA ON STAFFING LEVELS.—

10 ‘‘(A) SUBMISSION TO SECRETARY.—A

11 nursing facility shall submit to the Secretary, in

12 such form and manner and at such intervals as

13 the Secretary may require, data with respect to

14 nursing staff of the facility. Such data shall in15 clude the total number of nursing staff hours

16 furnished during the period specified by the

17 Secretary (including totals for each shift

18 worked during such period) by the facility to

19 residents for which payment is made under this

20 title, broken down by total certified nurse aide

21 hours, total licensed practical or vocational

22 nurse hours, and total registered nurse hours,

23 and shall also include the average wage rate for

24 each class of nursing staff employed by the fa25 cility.
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1 ‘‘(B) PUBLICATION.—The Secretary shall

2 provide for the publication on the Internet Site

3 of the Department of Health and Human Serv4 ices known as Nursing Home Compare the fa5 cility-specific nursing staff information collected

6 pursuant to subparagraph (A). The Secretary

7 shall update such information periodically.’’.

8 (2) POSTING OF INFORMATION ON NURSING FA9 CILITY STAFFING.—Section 1919(b) (42 U.S.C.

10 1395r(b)), as amended by paragraph (1), is further

11 amended by adding at the end the following new

12 paragraph:

13 ‘‘(9) INFORMATION ON NURSE STAFFING.—

14 ‘‘(A) IN GENERAL.—A nursing facility

15 shall post daily for each nursing unit of the fa16 cility and for each shift the current number of

17 licensed and unlicensed nursing staff directly

18 responsible for resident care. The information

19 shall be displayed in a uniform manner (as

20 specified by the Secretary) and in a clearly visi21 ble place.

22 ‘‘(B) PUBLICATION OF DATA.—A nursing

23 facility shall, upon request, make available to

24 the public the nursing staff data described in

25 subparagraph (A).’’.
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1 (3) INFORMATION CONCERNING PATIENT CLAS2 SIFICATION.—Section 1919(b)(4)(C) (42 U.S.C.

3 1396r(b)(4)(C)) is amended by adding at the end

4 the following new clause:

5 ‘‘(iv) INFORMATION CONCERNING

6 RESIDENTS.—The nursing facility shall

7 provide the Secretary, in such form and

8 manner and at such intervals as the Sec9 retary may require, a classification of all

10 residents of the nursing facility that ac11 cords with the patient classification system

12 described in section 1888(e)(3)(B)(ii), or

13 such successor system as the Secretary

14 may identify.’’.

15 SEC. 944. NURSING FACILITY CIVIL MONEY PENALTY COL16 LECTIONS.

17 (a) ESTABLISHMENT OF NURSING FACILITY CIVIL

18 MONEY PENALTY COLLECTIONS ACCOUNT.—Section

19 1128A (42 U.S.C. 1320a–7a) is amended by adding at

20 the end the following new subsection:

21 ‘‘(o) ESTABLISHMENT OF NURSING FACILITY CIVIL

22 MONEY PENALTY COLLECTIONS ACCOUNT.—There is

23 hereby established an account to be known as the ‘‘Nurs24 ing Facility Civil Money Penalties Collection Account’’

25 (hereafter in this subsection referred to as the ‘‘Ac-
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1 count’’). Notwithstanding any other provision of law, there

2 shall be deposited into the Account the Secretary’s share

3 of any civil monetary penalties collected under sections

4 1819 and 1919, all such amounts to be available without

5 fiscal year limitation for repaying the Secretary’s share

6 of amounts owed to nursing facilities or skilled nursing

7 facilities pursuant to the final sentence of sections

8 1819(h)(2)(B)(ii) and 1919(h)(2)(B)(ii), and for award9 ing grants under section 2 of the Nursing Home Staffing

10 and Quality Improvement Act of 2000.’’.

11 (b) AUTHORITY TO COLLECT CMPS IMME12 DIATELY.—

13 (1) MEDICARE.—Section 1819(h)(2)(B)(ii) (42

14 U.S.C. 1395i–3(h)(2)(B)(ii)) is amended by insert15 ing before the final period ‘‘, except that, notwith16 standing section 1128A(c)(2) or any other provision

17 of law, the Secretary, upon determining that a civil

18 money penalty should be imposed against a skilled

19 nursing facility pursuant to this paragraph, shall

20 take immediate action to collect such penalty (except

21 where the Secretary finds that such action could

22 jeopardize the health or welfare of residents of the

23 skilled nursing facility). In collecting such penalty,

24 the Secretary may deduct the amount of the penalty

25 from amounts otherwise payable to the facility under
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1 this title or take such other actions as the Secretary

2 considers appropriate. If the Secretary’s imposition

3 of a penalty under this paragraph is set aside, in

4 whole or in part, as a result of a hearing under sec5 tion 1128A(c)(2) (or an appeal therefrom) or by a

6 court of competent jurisdiction, and the Secretary

7 elects not to pursue an appeal of such judgment; or

8 has exhausted all appeals, the Secretary shall repay

9 any amount owed to the skilled nursing facility with

10 accrued interest.’’

11 (2) MEDICAID.—Section 1919(h)(3)(B)(ii) (42

12 U.S.C. 1396r(h)(3)(B)(ii)) is amended by inserting

13 before the final period ‘‘, except that, notwith14 standing section 1128A(c)(2) or any other provision

15 of law, the Secretary, upon determining that a civil

16 money penalty should be imposed against a nursing

17 facility pursuant to this paragraph, shall take imme18 diate action to collect the penalty (except where the

19 Secretary finds that such action could jeopardize the

20 health or welfare of residents of the nursing facility).

21 In collecting such penalty, the Secretary may direct

22 the State to deduct the amount of the penalty from

23 amounts otherwise payable to the nursing facility

24 under this title or take such other actions as the

25 Secretary, in consultation with the State, considers
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1 appropriate. If the Secretary’s imposition of a pen2 alty under this paragraph is set aside, in whole or

3 in part, as a result of a hearing under section

4 1128A(c)(2) (or an appeal therefrom) or by a court

5 of competent jurisdiction, and the Secretary elects

6 not to pursue an appeal of such judgment, or has

7 exhausted all appeals, the Secretary shall repay, or

8 shall direct the State to repay, any amount owed to

9 the nursing facility with accrued interest.’’

10 Subtitle F—Family Opportunities

11 Act

12 SEC. 951. SHORT TITLE.

13 This subtitle may be cited as the ‘‘Family Oppor14 tunity Act of 2000’’.

15 SEC. 952. OPPORTUNITY FOR FAMILIES OF DISABLED CHIL16 DREN TO PURCHASE MEDICAID COVERAGE

17 FOR SUCH CHILDREN.

18 (a) STATE OPTION TO ALLOW FAMILIES OF DIS19 ABLED CHILDREN TO PURCHASE MEDICAID COVERAGE

20 FOR SUCH CHILDREN.—

21 (1) IN GENERAL.—Section 1902 (42 U.S.C.

22 1396a), as amended by the Foster Care Independ23 ence Act of 1999 (Public Law 106–169; 113 Stat.

24 1822) and the Ticket to Work and Work Incentives
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1 Improvement Act of 1999 (Public Law 106–170;

2 113 Stat. 1860), is amended—

3 (A) in subsection (a)(10)(A)(ii)—

4 (i) by striking ‘‘or’’ at the end of sub5 clause (XVI);

6 (ii) by adding ‘‘or’’ at the end of sub7 clause (XVII); and

8 (iii) by adding at the end the fol9 lowing new subclause:

10 ‘‘(XVIII) who are disabled chil11 dren described in subsection (aa);’’;

12 and

13 (B) by adding at the end the following new

14 subsection:

15 ‘‘(aa) Individuals described in this subsection are

16 individuals—

17 ‘‘(1) who have not attained 18 years of age;

18 ‘‘(2) who would be considered disabled under

19 section 1614(a)(3)(C) (determined without regard to

20 the reference to age in that section) but for having

21 earnings or deemed income or resources (as deter22 mined under title XVI for children) that exceed the

23 requirements for receipt of supplemental security in24 come benefits; and
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1 ‘‘(3) whose family income does not exceed such

2 income level as the State establishes and does not

3 exceed—

4 ‘‘(A) 300 percent of the income official

5 poverty line (as defined by the Office of Man6 agement and Budget, and revised annually in

7 accordance with section 673(2) of the Omnibus

8 Budget Reconciliation Act of 1981) applicable

9 to a family of the size involved; or

10 ‘‘(B) such higher percent of such poverty

11 line as a State may establish, except that no

12 Federal financial participation shall be provided

13 under section 1903(a) for any medical assist14 ance provided to an individual who would not be

15 described in this subsection but for this

16 clause.’’.

17 (2) INTERACTION WITH EMPLOYER-SPONSORED

18 FAMILY COVERAGE.—Section 1902(aa) (42 U.S.C.

19 1396a(aa)), as added by paragraph (1), is amended

20 by adding at the end the following new paragraph:

21 ‘‘(3)(A) If an employer of a parent of an individual

22 described in paragraph (1) offers family coverage under

23 a group health plan (as defined in section 2791(a) of the

24 Public Health Service Act), the State may—
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1 ‘‘(i) require such parent to apply for, enroll in,

2 and pay premiums for, such coverage as a condition

3 of such parent’s child being or remaining eligible for

4 medical assistance under subsection

5 (a)(10)(A)(ii)(XVIII) if the parent is determined eli6 gible for such coverage and the employer contributes

7 at least 50 percent of the total cost of annual pre8 miums for such coverage; and

9 ‘‘(ii) if such coverage is obtained—

10 ‘‘(I) subject to paragraph (2) of section

11 1916(h), reduce the premium imposed by the

12 State under that section (if any) in an amount

13 that reasonably reflects the premium contribu14 tion made by the parent for private coverage on

15 behalf of a child with a disability; and

16 ‘‘(II) treat such coverage as a third party

17 liability under subsection (a)(25).

18 ‘‘(B) In the case of a parent to which subparagraph

19 (A) applies—

20 ‘‘(i) if the family income of such parent does

21 not exceed 300 percent of the income official poverty

22 line (referred to in paragraph (1)(C)(i)), a State

23 may provide for payment of any portion of the an24 nual premium for such family coverage that the par25 ent is required to pay; and
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1 ‘‘(ii) any payments made by the State under

2 clause (i) shall be considered, for purposes of section

3 1903(a), to be payments for medical assistance.’’.

4 (b) STATE OPTION TO IMPOSE INCOME-RELATED

5 PREMIUMS.—Section 1916 (42 U.S.C. 1396o), as amend6 ed by the Ticket to Work and Work Incentives Improve7 ment Act of 1999 (Public Law 106–170; 113 Stat. 1860),

8 is amended—

9 (1) in subsection (a), by striking ‘‘subsection

10 (g)’’ and inserting ‘‘subsections (g) and (h)’’; and

11 (2) by adding at the end the following new sub12 section:

13 ‘‘(h)(1) With respect to disabled children provided

14 medical assistance under section

15 1902(a)(10)(A)(ii)(XVIII), subject to paragraph (2), a

16 State may (in a uniform manner for such children) require

17 the families of such children to pay monthly premiums set

18 on a sliding scale based on family income.

19 ‘‘(2) A premium requirement imposed under para20 graph (1) may only apply to the extent that—

21 ‘‘(A) the aggregate amount of such premium

22 and any premium that the parent is required to pay

23 for family coverage under section 1902(aa)(3)(A)(i)

24 does not exceed 5 percent of the family’s income;

25 and
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1 ‘‘(B) the requirement is imposed consistent with

2 section 1902(aa)(3)(A)(ii)(I).

3 ‘‘(3) A State shall not require prepayment of a pre4 mium imposed pursuant to paragraph (1) and shall not

5 terminate eligibility of a child under section

6 1902(a)(10)(A)(ii)(XVIII) for medical assistance under

7 this title on the basis of failure to pay any such premium

8 until such failure continues for a period of not less than

9 60 days from the date on which the premium became past

10 due. The State may waive payment of any such premium

11 in any case where the State determines that requiring

12 such payment would create an undue hardship.’’.

13 (c) CONFORMING AMENDMENT.—Section 1903(f)(4)

14 (42 U.S.C. 1396b(f)(4)) is amended in the matter pre15 ceding subparagraph (A) by inserting

16 ‘‘1902(a)(10)(A)(ii)(XVIII),’’ after

17 ‘‘1902(a)(10)(A)(ii)(XVI),’’.

18 (d) EFFECTIVE DATE.—The amendments made by

19 this section shall apply to medical assistance for items and

20 services furnished on or after October 1, 2000.
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1 SEC. 953. TREATMENT OF INPATIENT PSYCHIATRIC HOS2 PITAL SERVICES FOR INDIVIDUALS UNDER

3 AGE 21 IN HOME OR COMMUNITY-BASED

4 SERVICES WAIVERS.

5 (a) IN GENERAL.—Section 1915(c) (42 U.S.C.

6 1396n(c)) is amended—

7 (1) in paragraph (1)—

8 (A) in the first sentence, by inserting ‘‘, or

9 inpatient psychiatric hospital services for indi10 viduals under age 21,’’ after ‘‘intermediate care

11 facility for the mentally retarded’’; and

12 (B) in the second sentence, by inserting ‘‘,

13 or inpatient psychiatric hospital services for in14 dividuals under age 21’’ before the period;

15 (2) in paragraph (2)(B), by striking ‘‘or serv16 ices in an intermediate care facility for the mentally

17 retarded’’ each place it appears and inserting ‘‘,

18 services in an intermediate care facility for the men19 tally retarded, or inpatient psychiatric hospital serv20 ices for individuals under age 21’’;

21 (3) by striking paragraph (2)(C) and inserting

22 the following:

23 ‘‘(C) such individuals who are determined to be

24 likely to require the level of care provided in a hos25 pital, nursing facility, or intermediate care facility

26 for the mentally retarded, or inpatient psychiatric
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1 hospital services for individuals under age 21, are

2 informed of the feasible alternatives, if available

3 under the waiver, at the choice of such individuals,

4 to the provision of inpatient hospital services, nurs5 ing facility services, services in an intermediate care

6 facility for the mentally retarded, or inpatient psy7 chiatric hospital services for individuals under age

8 21;’’; and

9 (4) in paragraph (7)(A)—

10 (A) by inserting ‘‘, or inpatient psychiatric

11 hospital services for individuals under age 21,’’

12 after ‘‘intermediate care facility for the men13 tally retarded’’; and

14 (B) by inserting ‘‘, or who would require

15 inpatient psychiatric hospital services for indi16 viduals under age 21’’ before the period.

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

18 subsection (a) apply with respect to medical assistance

19 provided on or after October 1, 2000.

20 SEC. 954. DEMONSTRATION OF COVERAGE UNDER THE

21 MEDICAID PROGRAM OF CHILDREN WITH PO22 TENTIALLY SEVERE DISABILITIES.

23 (a) STATE APPLICATION.—A State may apply to the

24 Secretary of Health and Human Services (in this section

25 referred to as the ‘‘Secretary’’) for approval of a dem-
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1 onstration project (in this section referred to as a ‘‘dem2 onstration project’’) under which up to a specified max3 imum number of children with a potentially severe dis4 ability (as defined in subsection (b)) are provided medical

5 assistance under the State medicaid plan under title XIX

6 of the Social Security Act (42 U.S.C. 1396 et seq.).

7 (b) CHILD WITH A POTENTIALLY SEVERE DIS8 ABILITY DEFINED.—

9 (1) IN GENERAL.—In this section, the term

10 ‘‘child with a potentially severe disability’’ means,

11 with respect to a demonstration project, an indi12 vidual who—

13 (A) has not attained 21 years of age;

14 (B) has a physical or mental condition,

15 disease, disorder (including a congenital birth

16 defect or a metabolic condition), injury, or de17 velopmental disability that was incurred before

18 the individual attained such age; and

19 (C) is reasonably expected, but for the re20 ceipt of medical assistance under the State

21 medicaid plan, to reach the level of disability

22 defined under section 1614(a)(3) of the Social

23 Security Act (42 U.S.C. 1382c(a)(3)), (deter24 mined without regard to the reference to age in

25 subparagraph (C) of that section).
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1 (2) EXCEPTION.—Such term does not include

2 an individual who would be considered disabled

3 under section 1614(a)(3)(C) of the Social Security

4 Act (42 U.S.C. 1382c(a)(3)(C)) (determined without

5 regard to the reference to age in that section).

6 (c) APPROVAL OF DEMONSTRATION PROJECTS.—

7 (1) IN GENERAL.—Subject to paragraph (3),

8 the Secretary shall approve applications under sub9 section (a) that meet the requirements of paragraph

10 (2) and such additional terms and conditions as the

11 Secretary may require. The Secretary may waive the

12 requirement of section 1902(a)(1) of the Social Se13 curity Act (42 U.S.C. 1396a(a)(1)) to allow for sub14 State demonstrations.

15 (2) TERMS AND CONDITIONS OF DEMONSTRA16 TION PROJECTS.—The Secretary may not approve a

17 demonstration project under this section unless the

18 State provides assurances satisfactory to the Sec19 retary that the following conditions are or will be

20 met:

21 (A) INDEPENDENT EVALUATION.—The

22 State provides for an independent evaluation of

23 the project to be conducted during fiscal year

24 2005.
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1 (B) CONSULTATION FOR DEVELOPMENT

2 OF CRITERIA.—The State consults with appro3 priate pediatric health professionals in estab4 lishing the criteria for determining whether a

5 child has a potentially severe disability.

6 (C) ANNUAL REPORT.—The State submits

7 an annual report to the Secretary (in a uniform

8 form and manner established by the Secretary)

9 on the use of funds provided under the grant

10 that includes the following:

11 (i) Enrollment and financial statistics

12 on—

13 (I) the total number of children

14 with a potentially severe disability en15 rolled in the demonstration project,

16 disaggregated by disability;

17 (II) the services provided by cat18 egory or code and the cost of each

19 service so categorized or coded; and

20 (III) the number of children en21 rolled in the demonstration project

22 who also receive services through pri23 vate insurance.

24 (ii) With respect to the report sub25 mitted for fiscal year 2005, the results of
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1 the independent evaluation conducted

2 under subparagraph (A).

3 (iii) Such additional information as

4 the Secretary may require.

5 (3) LIMITATIONS ON FEDERAL FUNDING.—

6 (A) APPROPRIATION.—

7 (i) IN GENERAL.—Out of any funds in

8 the Treasury not otherwise appropriated,

9 there is appropriated to carry out this sec10 tion $16,667,000 for each of fiscal years

11 2001 through 2006.

12 (ii) BUDGET AUTHORITY.—Clause (i)

13 constitutes budget authority in advance of

14 appropriations Acts and represents the ob15 ligation of the Federal Government to pro16 vide for the payment of the amounts ap17 propriated under clause (i).

18 (B) LIMITATION ON PAYMENTS.—In no

19 case may—

20 (i) the aggregate amount of payments

21 made by the Secretary to States under this

22 section exceed $100,000,000;

23 (ii) the aggregate amount of payments

24 made by the Secretary to States for ad25 ministrative expenses relating to the eval-
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1 uations and annual reports required under

2 subparagraphs (A) and (C) of paragraph

3 (2) exceed $2,000,000 of such

4 $100,000,000; or

5 (iii) payments be provided by the Sec6 retary for a fiscal year after fiscal year

7 2009.

8 (C) FUNDS ALLOCATED TO STATES.—

9 (i) IN GENERAL.—The Secretary shall

10 allocate funds to States based on their ap11 plications and the availability of funds. In

12 making such allocations, the Secretary

13 shall ensure an equitable distribution of

14 funds among States with large populations

15 and States with small populations.

16 (ii) AVAILABILITY.—Funds allocated

17 to a State under a grant made under this

18 section for a fiscal year shall remain avail19 able until expended.

20 (D) FUNDS NOT ALLOCATED TO STATES.—

21 Funds not allocated to States in the fiscal year

22 for which they are appropriated shall remain

23 available in succeeding fiscal years for alloca24 tion by the Secretary using the allocation for25 mula established under this section.
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1 (E) PAYMENTS TO STATES.—The Sec2 retary shall pay to each State with a dem3 onstration project approved under this section,

4 from its allocation under subparagraph (C), an

5 amount for each quarter equal to the Federal

6 medical assistance percentage (as defined in

7 section 1905(b) of the Social Security Act (42

8 U.S.C. 1395d(b))) of expenditures in the quar9 ter for medical assistance provided to children

10 with a potentially severe disability.

11 (d) RECOMMENDATION.—Not later than October 1,

12 2004, the Secretary shall submit a recommendation to the

13 Committee on Commerce of the House of Representatives

14 and the Committee on Finance of the Senate regarding

15 whether the demonstration project established under this

16 section should be continued after fiscal year 2006.

17 (e) STATE DEFINED.—In this section, the term

18 ‘‘State’’ has the meaning given such term for purposes of

19 title XIX of the Social Security Act (42 U.S.C. 1396 et

20 seq.).

21 SEC. 955. DEVELOPMENT AND SUPPORT OF FAMILY-TO22 FAMILY HEALTH INFORMATION CENTERS.

23 Section 501 (42 U.S.C. 701) is amended by adding

24 at the end the following new subsection:
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1 ‘‘(c)(1)(A) In addition to amounts appropriated

2 under subsection (a) and retained under section 502(a)(1)

3 for the purpose of carrying out activities described in sub4 section (a)(2), there is appropriated to the Secretary, out

5 of any money in the Treasury not otherwise appropriated,

6 for the purpose of enabling the Secretary (through grants,

7 contracts, or otherwise) to provide for special projects of

8 regional and national significance for the development and

9 support of family-to-family health information centers de10 scribed in paragraph (2), $10,000,000 for each of fiscal

11 years 2001 through 2006.

12 ‘‘(B) Funds appropriated under subparagraph (A)

13 shall remain available until expended.

14 ‘‘(2) The family-to-family health information centers

15 described in this paragraph are centers that—

16 ‘‘(A) assist families of children with disabilities

17 or special health care needs to make informed

18 choices about health care in order to promote good

19 treatment decisions, cost-effectiveness, and improved

20 health outcomes for such children;

21 ‘‘(B) provide information regarding the health

22 care needs of, and resources available for, children

23 with disabilities or special health care needs;

24 ‘‘(C) identify successful health delivery models

25 for such children;
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1 ‘‘(D) develop with representatives of health care

2 providers, managed care organizations, health care

3 purchasers, and appropriate State agencies a model

4 for collaboration between families of such children

5 and health professionals;

6 ‘‘(E) provide training and guidance regarding

7 caring for such children;

8 ‘‘(F) conduct outreach activities to the families

9 of such children, health professionals, schools, and

10 other appropriate entities and individuals; and

11 ‘‘(G) are staffed by families of children with

12 disabilities or special health care needs who have ex13 pertise in Federal and State public and private

14 health care systems and health professionals.

15 ‘‘(3) The provisions of this title that are applicable

16 to the funds made available to the Secretary under section

17 502(a)(1) apply in the same manner to funds made avail18 able to the Secretary under paragraph (1).’’.

19 SEC. 956. RESTORATION OF MEDICAID ELIGIBILITY FOR

20 CERTAIN SSI BENEFICIARIES.

21 (a) IN GENERAL.—Section 1902(a)(10)(A)(i)(II) (42

22 U.S.C. 1396a(a)(10)(A)(i)(II)) is amended—

23 (1) by inserting ‘‘(aa)’’ after ‘‘(II)’’;

24 (2) by striking ‘‘or who are’’ and inserting

25 ‘‘(bb) who are’’; and
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1 (3) by inserting before the comma at the end

2 the following: ‘‘, or (cc) who are under 21 years of

3 age and with respect to whom supplemental security

4 income benefits would be paid under title XVI but

5 for section 1611(c)(7)’’.

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

7 subsection (a) apply to medical assistance for items and

8 services furnished on or after January 1, 2002, except

9 that a State may elect to apply such amendments to items

10 and services furnished on or after any date after the date

11 of the enactment of this Act and before October 1, 2000.

Æ