I

106TH CONGRESS

2D SESSION H. R. 5320

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

improve the Medicare+Choice Program, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 27, 2000

Mr. KOLBE 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 part C of title XVIII of the Social Security Act

to revise and improve the Medicare+Choice Program,

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,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Medicare+Choice Res5 cue Act of 2000’’.
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1 SEC. 2. INCREASE IN NATIONAL PER CAPITA

2 MEDICARE+CHOICE GROWTH PERCENTAGE

3 IN 2001 AND 2002.

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

5 U.S.C. 1395w–23(c)(6)(B)) is amended—

6 (1) in clause (iv), by striking ‘‘for 2001, 0.5

7 percentage points’’ and inserting ‘‘for 2001, 0 per8 centage points’’; and

9 (2) in clause (v), by striking ‘‘for 2002, 0.3 per10 centage points’’ and inserting ‘‘for 2002, 0 percent11 age points’’.

12 SEC. 3. ELIMINATION OF REDUCTION IN

13 MEDICARE+CHOICE PAYMENT RATES BY

14 BUDGET NEUTRALITY ADJUSTMENTS.

15 (a) IN GENERAL.—Section 1853(c)(1)(A) of the So16 cial Security Act (42 U.S.C. 1395w–23(c)(1)(A)) is

17 amended by adding at the end the following: ‘‘With respect

18 to years beginning on or after January 1, 2001, in no case

19 shall the budget neutrality adjustment provided for in the

20 previous sentence result in a reduction of the payment

21 amount that would otherwise be made under this subpara22 graph but for such adjustment.’’.

23 SEC. 4. PAYMENT FLOOR FOR MEDICARE+CHOICE PLANS.

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

25 Security Act (42 U.S.C. 1395w–23(c)(1)) is amended—
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1 (1) in the matter before subparagraph (A), by

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

3 (2) by adding at the end the following new sub4 paragraph:

5 ‘‘(D) TRUE FLOOR BASED ON 90 PERCENT

6 OF THE FEE-FOR-SERVICE PER CAPITA EX7 PENDITURES FOR MEDICARE+CHOICE PLANS.—

8 In the case of a plan, 90 percent of an amount

9 equal to the annual per capita rate of payment

10 described in section 1876(a)(1)(C) for the area

11 involved.’’.

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

13 subsection (a) apply to payments for months beginning on

14 or after January 2001.

15 SEC. 5. CORRECTING FOR MISESTIMATES IN THE GROWTH

16 RATE; LIMITING RETROACTIVE ADJUST17 MENTS.

18 (a) IN GENERAL.—Notwithstanding any other provi19 sion of law, for purposes of payments under section

20 1853(c) of the Social Security Act (42 U.S.C. 1395w–

21 23(c)) to Medicare+Choice organizations offering

22 Medicare+Choice plans for 2001, the Secretary of Health

23 and Human Services shall provide for an increase by 3.6

24 percent the amount of payment otherwise applicable to

25 such plans under that section in 2001.
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1 (b) HOLD HARMLESS FOR ERRORS IN ESTIMATES.—

2 Section 1853(c)(6) of such Act (42 U.S.C. 1395w–

3 23(c)(6)) is amended—

4 (1) in subparagraph (C), by striking ‘‘Begin5 ning with rates’’ and inserting ‘‘Subject to subpara6 graph (D), beginning with rates’’; and

7 (2) by adding at the end the following new sub8 paragraph:

9 ‘‘(D) HOLD HARMLESS FOR OVER PROJEC10 TIONS.—Beginning with rates calculated for

11 2002, in making adjustments under subpara12 graph (C), in no case may the Secretary provide

13 for an adjustment in a year for that results in

14 a reduction of the national per capita

15 Medicare+Choice growth percentage that is

16 greater than 0.5 percent.’’.

17 SEC. 6. ADDITIONAL FLOOR FOR ANNUAL INCREASE IN

18 MEDICARE+CHOICE CAPITATION RATES.

19 Section 1853(c)(3)(C) of the Social Security Act (42

20 U.S.C. 1395w–23(c)(3)(C)) is amended—

21 (1) in clause (ii), by inserting ‘‘(before 2002)’’

22 after ‘‘For a subsequent year’’; and

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

24 clause:
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1 ‘‘(iii) For 2002 and each subsequent

2 year, the greater of (I) 102 percent of the

3 annual Medicare+Choice capitation rate

4 under this paragraph for the area for the

5 previous year, or (II) such rate for the pre6 vious year increased by the national per

7 capita Medicare+Choice growth percent8 age, described in paragraph (6)(A) for the

9 succeeding year.’’.

10 SEC. 7. APPLICATION OF BUDGET NEUTRALITY PRINCIPLE

11 TO THE NEW MEDICARE+CHOICE RISK AD12 JUSTMENT METHODOLOGY.

13 (a) IN GENERAL.—Section 1853(a)(3) of the Social

14 Security Act (42 U.S.C. 1395w–23(a)(3)) is amended by

15 adding at the end the following new subparagraph:

16 ‘‘(E) IMPLEMENTATION IN A BUDGET NEU17 TRAL MANNER.—The methodology under this

18 paragraph shall be designed and implemented

19 in a manner so that it does not result in any

20 material change in the aggregate level of ex21 penditures under this title compared to the level

22 that would have occurred if such methodology

23 had not been implemented (and if the previous

24 risk adjustment methodology used in 1998 had

25 continued to be implemented).’’.
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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 and applies to payments for months beginning

4 on or after January 2001.

5 SEC. 8. PROVIDING FOR CONTINUOUS OPEN ENROLLMENT

6 AND DISENROLLMENT.

7 (a) IN GENERAL.—Section 1851(e)(2) of the Social

8 Security Act (42 U.S.C. 1395w–21(e)(2)) is amended to

9 read as follows:

10 ‘‘(2) CONTINUOUS OPEN ENROLLMENT AND

11 DISENROLLMENT.—Subject to paragraph (5), a

12 Medicare+Choice eligible individual may change the

13 election under subsection (a)(1) at any time.’’.

14 (b) CONFORMING AMENDMENTS.—

15 (1) MEDICARE+CHOICE.—Section 1851(e) of

16 such Act (42 U.S.C. 1395w–21(e)) is amended—

17 (A) in paragraph (4)—

18 (i) by striking ‘‘Effective as of Janu19 ary 1, 2002, an’’ and inserting ‘‘An’’;

20 (ii) by striking ‘‘other than during an

21 annual, coordinated election period’’;

22 (iii) by inserting ‘‘in a special election

23 period for such purpose’’ after ‘‘make a

24 new election under this section’’; and
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1 (iv) by striking the second sentence;

2 and

3 (B) in paragraphs (5)(B) and (6)(A), by

4 striking ‘‘the first sentence of’’.

5 (2) MEDIGAP.—Section 1882(s)(3)(B) of such

6 Act (42 U.S.C. 1395ss(s)(3)(B)) is amended—

7 (A) in clause (ii), by striking ‘‘permitting

8 discontinuance of the individual’s election of the

9 plan under the first sentence of section

10 1851(e)(4)’’ and inserting ‘‘providing the indi11 vidual a special election period under section

12 1851(e)(4)’’; and

13 (B) in clause (iii), by striking ‘‘permit dis14 continuance of an individual’s election of cov15 erage under the first sentence of section

16 1851(e)(4)’’ and inserting ‘‘provide the indi17 vidual a special election period under section

18 1851(e)(4)’’.

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

20 this section apply with respect to plan years beginning on

21 or after January 1, 2002.

22 SEC. 9. ALLOWING VARIATION IN PREMIUMS AND BENE23 FITS WITHIN COUNTIES.

24 (a) IN GENERAL.—Subsections (c) and (f)(1)(D) of

25 section 1854 of the Social Security Act (42 U.S.C.
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1 1395w–24) are each amended by inserting before the pe2 riod at the end the following: ‘‘, expect that the Secretary

3 shall provide for exceptions based on provider catchment

4 area that may be a geographic area that is smaller than

5 a county or a catchment area that crosses the boundaries

6 of two or more counties’’.

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

8 subsection (a) apply with respect to years beginning on

9 or after January 1, 2001.

10 SEC. 10. MODIFYING PHASE-IN OF MEDICARE+CHOICE

11 RISK-ADJUSTMENT METHODOLOGY FOR IN12 STITUTIONALIZED MEDICARE BENE13 FICIARIES.

14 The Secretary of Health and Human Services shall

15 provide that the risk-adjustment methodology applied

16 under section 1853(a) of the Social Security Act (42

17 U.S.C. 1395w–23(a)), insofar as it makes adjustments to

18 capitation rates for health status, shall only apply to 10

percent of 1 19 ⁄12 of the annual Medicare+Choice capitation

20 rate in the case of an eligible individual who is institu21 tionalized (as defined for purposes of section

22 1851(e)(2)(D) of such Act (42 U.S.C. 1395w–

23 21(e)(2)(D))) until the first year in which the Secretary

24 implements a modification of such methodology based on

25 health status so that such methodology includes medical
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1 diagnostic factors from all provider settings (including

2 hospital and nursing facility settings).

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