I

106TH CONGRESS

2D SESSION H. R. 5612

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

NOVEMBER 1, 2000

Mr. RANGEL (for himself, Mr. DINGELL, Mr. SPRATT, Mr. STENHOLM, Mr.

BROWN of Ohio, Mr. BERRY, Mr. ALLEN, Mr. ANDREWS, Mr. BACA, Ms.

BALDWIN, Mr. BOUCHER, Mr. CARDIN, Mr. COSTELLO, Mr. COYNE, Mr.

DEFAZIO, Mr. DIXON, Ms. ESHOO, Mr. GREEN of Texas, Mr. HALL of

Ohio, Mr. HILLIARD, Mr. JACKSON of Illinois, Mr. KLECZKA, Mr. LEVIN,

Mrs. LOWEY, Mr. MATSUI, Mr. MCGOVERN, Mr. MCNULTY, Ms.

MILLENDER-MCDONALD, Mr. OBERSTAR, Mr. RAHALL, Mr. SAWYER,

Mr. SKELTON, and Mr. STUPAK) 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.
2

•HR 5612 IH

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; AMENDMENTS TO SOCIAL SECU4 RITY ACT; REFERENCES TO OTHER ACTS;

5 TABLE OF CONTENTS.

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

7 ‘‘Medicare, Medicaid, and SCHIP Benefits Improvement

8 and Beneficiary Protection Act of 2000’’.

9 (b) AMENDMENTS TO SOCIAL SECURITY ACT.—Ex10 cept as otherwise specifically provided, whenever in this

11 Act an amendment is expressed in terms of an amendment

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

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

14 provision of the Social Security Act.

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

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

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

18 1997 (Public Law 105–33; 111 Stat. 251).

19 (2) MEDICARE, MEDICAID, AND SCHIP BAL20 ANCED BUDGET REFINEMENT ACT OF 1999.—The

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

22 SCHIP Balanced Budget Refinement Act of 1999

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

24 law by section 1000(a)(6) of Public Law 106–113.
3

•HR 5612 IH

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

2 this Act is as follows:

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

table of contents.

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.

Sec. 116. Waiver of 24-month waiting period for medicare coverage of individuals disabled with amyotrophic lateral sclerosis (ALS).

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

Sec. 127. 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.
4

•HR 5612 IH

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

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.
5

•HR 5612 IH

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.

Sec. 333. Nurse staffing and quality improvement; grants to States.

TITLE IV—PROVISIONS RELATING TO PART B

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.

Sec. 407. Contrast enhanced diagnostic procedures under hospital prospective

payment system.

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. Qualifications for community mental health centers.

Sec. 431. Modification of medicare billing requirements for certain Indian providers.

Sec. 432. GAO study on coverage of surgical first assisting services of certified

registered nurse first assistants.

Sec. 433. MedPAC study and report on medicare reimbursement for services

provided by certain providers.

Sec. 434. MedPAC study and report on medicare coverage of services provided

by certain nonphysician providers.
6

•HR 5612 IH

Sec. 435. GAO study and report on the costs of emergency and medical transportation services.

Sec. 436. GAO studies and reports on medicare payments.

Sec. 437. 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.

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.

Sec. 508. Temporary increase for home health services furnished in a rural

area.

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
7

•HR 5612 IH

Subtitle A—Medicare+Choice Payment Reforms

Sec. 601. Increased payment for accountable Medicare+Choice plans.

Sec. 602. 10-year phase-in of risk adjustment.

Sec. 603. Transition to revised Medicare+Choice payment rates.

Sec. 604. Revision of payment rates for ESRD patients enrolled in

Medicare+Choice plans.

Sec. 605. Permitting premium reductions as additional benefits under

Medicare+Choice plans.

Sec. 606. Full implementation of risk adjustment for congestive heart failure

enrollees for 2001.

Sec. 607. Expansion of application of Medicare+Choice new entry bonus.

Sec. 608. 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.
8

•HR 5612 IH

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.

Sec. 710. Medicaid recognition for services of physician assistants.

Sec. 711. Medicaid family opportunity provisions related to disabled children.

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.

Sec. 803. Optional coverage of certain legal immigrants under SCHIP.

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.
9

•HR 5612 IH

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

13 amended by striking ‘‘3 years’’ and inserting ‘‘2

14 years’’.

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

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

17 or after July 1, 2001.

18 SEC. 102. COVERAGE OF SCREENING FOR GLAUCOMA.

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

20 1395x(s)(2)) is amended—

21 (1) by striking ‘‘and’’ at the end of subpara22 graph (S);

23 (2) by inserting ‘‘and’’ at the end of subpara24 graph (T); and

25 (3) by adding at the end the following:
10

•HR 5612 IH

1 ‘‘(U) screening for glaucoma (as defined in sub2 section (uu)) for individuals determined to be at

3 high risk for glaucoma, individuals with a family his4 tory of glaucoma and individuals with diabetes;’’.

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

6 1395x) is amended by adding at the end the following new

7 subsection:

8 ‘‘Screening for Glaucoma

9 ‘‘(uu) The term ‘screening for glaucoma’ means a di10 lated eye examination with an intraocular pressure meas11 urement, and a direct ophthalmoscopy or a slit-lamp bio12 microscopic examination for the early detection of glau13 coma which is furnished by or under the direct supervision

14 of an optometrist or ophthalmologist who is legally author15 ized to furnish such services under State law (or the State

16 regulatory mechanism provided by State law) of the State

17 in which the services are furnished, as would otherwise

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

19 to a physician’s professional service, if the individual in20 volved has not had such an examination in the preceding

21 year.’’.

22 (c) CONFORMING AMENDMENT.—Section

23 1862(a)(1)(F) (42 U.S.C. 1395y(a)(1)(F)) is amended—

24 (1) by striking ‘‘and,’’; and
11

•HR 5612 IH

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

2 the case of screening for glaucoma, which is per3 formed more frequently than is provided under sec4 tion 1861(uu),’’.

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

6 this section shall apply to services furnished on or after

7 January 1, 2002.

8 SEC. 103. COVERAGE OF SCREENING COLONOSCOPY FOR

9 AVERAGE RISK INDIVIDUALS.

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

11 1395x(pp)) is amended—

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

13 case of an individual at high risk for colorectal can14 cer, screening colonoscopy’’ and inserting ‘‘Screening

15 colonoscopy’’; and

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

17 (1)(C), an’’ and inserting ‘‘An’’.

18 (b) FREQUENCY LIMITS FOR SCREENING

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

20 is amended—

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

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

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

24 cancer, if the procedure is performed within the 119

25 months after a previous screening colonoscopy’’;
12

•HR 5612 IH

1 (2) in paragraph (3)—

2 (A) in the heading by striking ‘‘FOR INDI3 VIDUALS AT HIGH RISK FOR COLORECTAL CAN4 CER’’;

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

6 individuals at high risk for colorectal cancer (as

7 defined in section 1861(pp)(2))’’;

8 (C) in subparagraph (E), by inserting be9 fore the period at the end the following: ‘‘or for

10 other individuals if the procedure is performed

11 within the 119 months after a previous screen12 ing colonoscopy or within 47 months after a

13 previous screening flexible sigmoidoscopy’’.

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

15 this section apply to colorectal cancer screening services

16 provided on or after July 1, 2001.

17 SEC. 104. MODERNIZATION OF SCREENING MAMMOGRAPHY

18 BENEFIT.

19 (a) INCLUSION IN PHYSICIAN FEE SCHEDULE.—Sec20 tion 1848(j)(3) (42 U.S.C. 1395w–4(j)(3)) is amended by

21 inserting ‘‘(13),’’ after ‘‘(4),’’.

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

23 (42 U.S.C. 1395m(c)) is amended to read as follows:

24 ‘‘(c) PAYMENT AND STANDARDS FOR SCREENING

25 MAMMOGRAPHY.—
13

•HR 5612 IH

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

2 incurred for screening mammography (as defined in

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

4 ‘‘(A) for screening mammography con5 ducted consistent with the frequency permitted

6 under paragraph (2); and

7 ‘‘(B) if the screening mammography is

8 conducted by a facility that has a certificate (or

9 provisional certificate) issued under section 354

10 of the Public Health Service Act.

11 ‘‘(2) FREQUENCY COVERED.—

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

13 the Secretary under subparagraph (B)—

14 ‘‘(i) no payment may be made under

15 this part for screening mammography per16 formed on a woman under 35 years of age;

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

18 part for only one screening mammography

19 performed on a woman over 34 years of

20 age, but under 40 years of age; and

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

22 years of age, payment may not be made

23 under this part for screening mammog24 raphy performed within 11 months fol-
14

•HR 5612 IH

1 lowing the month in which a previous

2 screening mammography was performed.

3 ‘‘(B) REVISION OF FREQUENCY.—

4 ‘‘(i) REVIEW.—The Secretary, in con5 sultation with the Director of the National

6 Cancer Institute, shall review periodically

7 the appropriate frequency for performing

8 screening mammography, based on age

9 and such other factors as the Secretary be10 lieves to be pertinent.

11 ‘‘(ii) REVISION OF FREQUENCY.—The

12 Secretary, taking into consideration the re13 view made under clause (i), may revise

14 from time to time the frequency with

15 which screening mammography may be

16 paid for under this subsection.’’.

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

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

19 mammographies furnished on or after January 1, 2002.

20 (d) PAYMENT FOR NEW TECHNOLOGIES.—

21 (1) TESTS FURNISHED IN 2001.—

22 (A) SCREENING.—For a screening mam23 mography (as defined in section 1861(jj) of the

24 Social Security Act (42 U.S.C. 1395(jj))) fur25 nished during the period beginning on April 1,
15

•HR 5612 IH

1 2001, and ending on December 31, 2001, that

2 uses a new technology, payment for such

3 screening mammography shall be made as fol4 lows:

5 (i) In the case of a technology which

6 directly takes a digital image (without in7 volving film) and subsequently analyzes

8 such resulting image with software to iden9 tify possible problem areas, in an amount

10 equal to 150 percent of the amount of pay11 ment under section 1848 of such Act (42

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

13 mammography (under HCPCS code

14 76091) for such year.

15 (ii) In the case of a technology which

16 allows conversion of a standard film mam17 mogram into a digital image and subse18 quently analyzes such resulting image with

19 software to identify possible problem areas,

20 in an amount equal to the limit that would

21 otherwise be applied under section

22 1834(c)(3) of such Act (42 U.S.C.

23 1395m(c)(3)) for 2001, increased by $15.

24 (B) BILATERAL DIAGNOSTIC MAMMOG25 RAPHY.—For a bilateral diagnostic mammog-
16

•HR 5612 IH

1 raphy (under HCPCS code 76091) furnished

2 during the period beginning on April 1, 2001,

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

4 new technology described in subparagraph

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

6 be the amount of payment provided for under

7 such subparagraph.

8 The Secretary of Health and Human Services may

9 implement the provisions of this paragraph by pro10 gram memorandum or otherwise.

11 (2) CONSIDERATION OF NEW HCPCS CODE FOR

12 NEW TECHNOLOGIES AFTER 2001.—The Secretary

13 shall determine, for such screening mammographies

14 performed after 2001, whether the assignment of a

15 new HCPCS code is appropriate for screening mam16 mography that uses a new technology. If the Sec17 retary determines that a new code is appropriate for

18 such screening mammography, the Secretary shall

19 provide for such new code for such tests furnished

20 after 2001.

21 (3) NEW TECHNOLOGY DESCRIBED.—For pur22 poses of this subsection, a new technology with re23 spect to a screening mammography is an advance in

24 technology with respect to the test or equipment

25 that results in the following:
17

•HR 5612 IH

1 (A) A significant increase or decrease in

2 the resources used in the test or in the manu3 facture of the equipment.

4 (B) A significant improvement in the per5 formance of the test or equipment.

6 (C) A significant advance in medical tech7 nology that is expected to significantly improve

8 the treatment of medicare beneficiaries.

9 (4) HCPCS CODE DEFINED.—The term

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

11 the Health Care Financing Administration Common

12 Procedure Coding System (HCPCS).

13 SEC. 105. COVERAGE OF MEDICAL NUTRITION THERAPY

14 SERVICES FOR BENEFICIARIES WITH DIABE15 TES OR A RENAL DISEASE.

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

17 1395x(s)(2)), as amended by section 102(a), is amended—

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

19 the end;

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

21 the end; and

22 (3) by adding at the end the following new sub23 paragraph:
18

•HR 5612 IH

1 ‘‘(V) medical nutrition therapy services (as de2 fined in subsection (vv)(1)) in the case of a bene3 ficiary with diabetes or a renal disease who—

4 ‘‘(i) has not received diabetes outpatient

5 self-management training services within a time

6 period determined by the Secretary; and

7 ‘‘(ii) meets such other criteria determined

8 by the Secretary after consideration of protocols

9 established by dietitian or nutrition professional

10 organizations;’’.

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

12 1395x), as amended by section 102(b), is amended by add13 ing at the end the following:

14 ‘‘Medical Nutrition Therapy Services; Registered

15 Dietitian or Nutrition Professional

16 ‘‘(vv)(1) The term ‘medical nutrition therapy serv17 ices’ means nutritional diagnostic, therapy, and counseling

18 services for the purpose of disease management which are

19 furnished by a registered dietitian or nutrition profes20 sional (as defined in paragraph (2)) pursuant to a referral

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

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

23 dietitian or nutrition professional’ means an individual

24 who—
19

•HR 5612 IH

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

2 granted by a regionally accredited college or univer3 sity in the United States (or an equivalent foreign

4 degree) with completion of the academic require5 ments of a program in nutrition or dietetics, as ac6 credited by an appropriate national accreditation or7 ganization recognized by the Secretary for this pur8 pose;

9 ‘‘(B) has completed at least 900 hours of super10 vised dietetics practice under the supervision of a

11 registered dietitian or nutrition professional; and

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

13 nutrition professional by the State in which the serv14 ices are performed; or

15 ‘‘(ii) in the case of an individual in a State that

16 does not provide for such licensure or certification,

17 meets such other criteria as the Secretary estab18 lishes.

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

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

21 date of the enactment of this subsection, is licensed or cer22 tified as a dietitian or nutrition professional by the State

23 in which medical nutrition therapy services are per24 formed.’’.
20

•HR 5612 IH

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

2 1395l(a)(1)) is amended—

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

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

5 the following: ‘‘, and (T) with respect to medical nu6 trition therapy services (as defined in section

7 1861(vv)), the amount paid shall be 80 percent of

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

9 percent of the amount determined under the fee

10 schedule established under section 1848(b) for the

11 same services if furnished by a physician’’.

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

13 1842(b)(18)(C) (42 U.S.C. 1395u(b)(18)(C)) is amended

14 by adding at the end the following new clause:

15 ‘‘(vi) A registered dietitian or nutrition profes16 sional.’’.

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

18 this section apply to services furnished on or after Janu19 ary 1, 2002.

20 (f) STUDY.—Not later than July 1, 2003, the Sec21 retary of Health and Human Services shall submit to Con22 gress a report that contains recommendations with respect

23 to the expansion to other medicare beneficiary populations

24 of the medical nutrition therapy services benefit (furnished

25 under the amendments made by this section).
21

•HR 5612 IH

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

2 WITH DISABILITIES.

3 (a) CONTINUATION OF COVERAGE.—

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

5 is amended—

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

7 by inserting ‘‘, except as provided in subsection

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

9 months’’; and

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

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

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

13 apply—

14 ‘‘(1) for months occurring during the 10-year

15 period beginning with the first month that begins

16 after the date of enactment of this subsection; and

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

18 individual who was entitled to benefits under sub19 section (b) as of the last month of such 10-year pe20 riod and would continue (but for such 24-month lim21 itation) to be so entitled.’’.

22 (2) CONFORMING AMENDMENT.—Section

23 1818A(a)(2)(C) (42 U.S.C. 1395i–2a(a)(2)(C)) is

24 amended—

25 (A) by striking ‘‘solely’’; and
22

•HR 5612 IH

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

2 last month of the 10-year period described in

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

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

5 date of the enactment of this section, the Comptroller

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

7 Congress that—

8 (1) examines the effectiveness and cost of sub9 section (j) of section 226 (42 U.S.C. 426); and

10 (2) recommends whether such subsection (j)

11 should continue to be applied beyond the 10-year pe12 riod described in the subsection.

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

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

15 month that begins after the date of enactment of this sec16 tion.

17 (d) TREATMENT OF CERTAIN INDIVIDUALS.—An in18 dividual enrolled under section 1818A (42 U.S.C.

19 1395i2a) shall be treated with respect to premium pay20 ment obligations under such section as though the indi21 vidual had continued to be entitled to benefits under sec22 tion 226(b) for—

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

24 U.S.C. 426(j)(1)) (as added by subsection (a)); and
23

•HR 5612 IH

1 (2) subsequent months, in the case of an indi2 vidual who was so enrolled as of the last month de3 scribed in section 226(j)(2) (42 U.S.C. 426(j)(2))

4 (as so added).

5 (e) REPEAL OF PARTIAL EXTENSION PROVISION AND

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

7 170 is repealed.

8 Subtitle B—Other Beneficiary

9 Improvements

10 SEC. 111. ACCELERATION OF REDUCTION OF BENEFICIARY

11 COPAYMENT FOR HOSPITAL OUTPATIENT DE12 PARTMENT SERVICES.

13 (a) REDUCING THE UPPER LIMIT ON BENEFICIARY

14 COPAYMENT.—

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

16 U.S.C. 1395l(t)(8)(C)) is amended to read as fol17 lows:

18 ‘‘(C) LIMITATION ON COPAYMENT

19 AMOUNT.—

20 ‘‘(i) TO INPATIENT HOSPITAL DE21 DUCTIBLE AMOUNT.—In no case shall the

22 copayment amount for a procedure per23 formed in a year exceed the amount of the

24 inpatient hospital deductible established

25 under section 1813(b) for that year.
24

•HR 5612 IH

1 ‘‘(ii) TO SPECIFIED PERCENTAGE.—

2 The Secretary shall reduce the national

3 unadjusted copayment amount for a cov4 ered OPD service (or group of such serv5 ices) furnished in a year in a manner so

6 that the effective copayment rate (deter7 mined on a national unadjusted basis) for

8 that service in the year does not exceed the

9 following percentage:

10 ‘‘(I) For procedures performed in

11 2001, 60 percent.

12 ‘‘(II) For procedures performed

13 in 2002 or 2003, 55 percent.

14 ‘‘(III) For procedures performed

15 in 2004, 50 percent.

16 ‘‘(IV) For procedures performed

17 in 2005, 45 percent.

18 ‘‘(V) For procedures performed

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

20 (2) EFFECTIVE DATE.—The amendment made

21 by paragraph (1) applies with respect to services

22 furnished on or after January 1, 2001.

23 (b) CONSTRUCTION REGARDING LIMITING IN24 CREASES IN COST-SHARING.—Nothing in this Act or the

25 Social Security Act shall be construed as preventing a hos-
25

•HR 5612 IH

1 pital from waiving the amount of any coinsurance for out2 patient hospital services under the medicare program

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

4 been increased as a result of the implementation of the

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

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

7 (c) GAO STUDY OF REDUCTION IN MEDIGAP PRE8 MIUM LEVELS RESULTING FROM REDUCTIONS IN COIN9 SURANCE.—The Comptroller General of the United States

10 shall work, in concert with the National Association of In11 surance Commissioners, to evaluate the extent to which

12 the premium levels for medicare supplemental policies re13 flect the reductions in coinsurance resulting from the

14 amendment made by subsection (a). Not later than April

15 1, 2004, the Comptroller General shall submit to Congress

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

17 reductions in beneficiary coinsurance effected by such

18 amendment have resulted in actual savings to medicare

19 beneficiaries.

20 SEC. 112. PRESERVATION OF COVERAGE OF DRUGS AND

21 BIOLOGICALS UNDER PART B OF THE MEDI22 CARE PROGRAM.

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

24 1395x(s)(2)) is amended, in each of subparagraphs (A)

25 and (B), by striking ‘‘(including drugs and biologicals
26

•HR 5612 IH

1 which cannot, as determined in accordance with regula2 tions, be self-administered)’’ and inserting ‘‘(including

3 drugs and biologicals which are not usually self-adminis4 tered by the patient)’’.

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

6 subsection (a) applies to drugs and biologicals adminis7 tered on or after the date of the enactment of this Act.

8 SEC. 113. ELIMINATION OF TIME LIMITATION ON MEDI9 CARE BENEFITS FOR IMMUNOSUPPRESSIVE

10 DRUGS.

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

12 1395x(s)(2)(J)) is amended by striking ‘‘, but only’’ and

13 all that follows up to the semicolon at the end.

14 (b) CONFORMING AMENDMENTS.—

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

16 U.S.C. 1395k) is amended—

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

18 (B) by redesignating subsection (c) as sub19 section (b).

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

21 BBRA is amended by striking subsection (d).

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

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

24 the date of the enactment of this Act.
27

•HR 5612 IH

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

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

3 1395u(o)) is amended by adding at the end the following

4 new paragraph:

5 ‘‘(3)(A) Payment for a charge for any drug or biologi6 cal for which payment may be made under this part may

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

8 basis.

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

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

11 manner as they apply to services furnished by a practi12 tioner described in subsection (b)(18)(C).’’.

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

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

15 January 1, 2001.

16 SEC. 115. IMPROVING AVAILABILITY OF QMB/SLMB APPLI17 CATION FORMS.

18 (a) THROUGH LOCAL SOCIAL SECURITY OFFICES.—

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

20 1395b–2) is amended by adding at the end the fol21 lowing new subsection:

22 ‘‘(d) AVAILABILITY OF APPLICATION FORMS FOR

23 MEDICAL ASSISTANCE FOR MEDICARE COST-SHARING.—

24 The Secretary shall make available to the Commissioner

25 of Social Security appropriate forms for applying for med26 ical assistance for medicare cost-sharing under a State
28

•HR 5612 IH

1 plan under title XIX. Such Commissioner, through local

2 offices of the Social Security Administration shall—

3 ‘‘(1) notify applicants and beneficiaries who

4 present at a local office orally of the availability of

5 such forms and make such forms available to such

6 individuals upon request; and

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

8 completing such forms and, upon request, in submit9 ting such forms to the appropriate State agency.’’.

10 (2) CONFORMING AMENDMENT.—Section

11 1902(a)(8) (42 U.S.C. 1396a(a)(8)) is amended by

12 inserting before the semicolon at the end the fol13 lowing: ‘‘and provide application forms for medical

14 assistance for medicare cost-sharing under the plan

15 to the Secretary in order to make them available

16 through Federal offices under section 1804(d) within

17 the State’’.

18 (b) STREAMLINING APPLICATION PROCESS.—

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

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

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

22 and obtain medical assistance for medicare cost23 sharing using the simplified uniform application

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

25 available such forms to such individuals, permit such
29

•HR 5612 IH

1 individuals to apply for such assistance by mail

2 (and, at the State option, by telephone or other elec3 tronic means) and not require them to apply in per4 son, and provide that’’.

5 (2) SIMPLIFIED APPLICATION FORM.—Section

6 1905(p) (42 U.S.C. 1396d(p)) is amended by adding

7 at the end the following new paragraph:

8 ‘‘(5)(A) The Secretary shall develop a simplified ap9 plication form for use by individuals (including both quali10 fied medicare beneficiaries and specified low-income medi11 care beneficiaries) in applying for medical assistance for

12 medicare cost-sharing under this title. Such form shall be

13 easily readable by applicants and uniform nationally.

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

15 consult with beneficiary groups and the States.

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

17 forms available—

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

19 distribution through local social security offices;

20 ‘‘(ii) at such other sites at the Secretary deter21 mines appropriate; and

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

23 (c) EFFECTIVE DATES.—

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

25 take effect on January 1, 2004.
30

•HR 5612 IH

1 (2) EFFECTIVE DATE.—The amendments made

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

3 of the enactment of this Act, regardless of whether

4 regulations have been promulgated to carry out such

5 amendments by such date. Secretary of Health and

6 Human Services shall develop the uniform applica7 tion form under the amendment made by subsection

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

9 the enactment of this Act.

10 SEC. 116. WAIVER OF 24-MONTH WAITING PERIOD FOR

11 MEDICARE COVERAGE OF INDIVIDUALS DIS12 ABLED WITH AMYOTROPHIC LATERAL SCLE13 ROSIS (ALS).

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

15 amended—

16 (1) by redesignating subsection (h) as sub17 section (j) and by moving such subsection to the end

18 of the section, and

19 (2) by inserting after subsection (g) the fol20 lowing new subsection:

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

22 of an individual medically determined to have amyotrophic

23 lateral sclerosis (ALS), the following special rules apply:
31

•HR 5612 IH

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.
32

•HR 5612 IH

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.
33

•HR 5612 IH

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);
34

•HR 5612 IH

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
35

•HR 5612 IH

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
36

•HR 5612 IH

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
37

•HR 5612 IH

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:
38

•HR 5612 IH

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.
39

•HR 5612 IH

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
40

•HR 5612 IH

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
41

•HR 5612 IH

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
42

•HR 5612 IH

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-
43

•HR 5612 IH

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
44

•HR 5612 IH

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. STUDIES ON PREVENTIVE INTERVENTIONS IN

13 PRIMARY CARE FOR OLDER AMERICANS.

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

15 Services, acting through the United States Preventive

16 Services Task Force, shall conduct a series of studies de17 signed to identify preventive interventions that can be de18 livered in the primary care setting and that are most valu19 able to older Americans.

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

21 the United States Preventive Services Task Force is

22 amended to include the evaluation of services that are of

23 particular relevance to older Americans.

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

25 of the enactment of this Act, and annually thereafter, the
45

•HR 5612 IH

1 Secretary of Health and Human Services shall submit to

2 Congress a report on the conclusions of the studies con3 ducted under subsection (a), together with recommenda4 tions for such legislation and administrative actions as the

5 Secretary considers appropriate.

6 SEC. 127. MEDPAC STUDY AND REPORT ON MEDICARE COV7 ERAGE OF CARDIAC AND PULMONARY REHA8 BILITATION THERAPY SERVICES.

9 (a) STUDY.—

10 (1) IN GENERAL.—The Medicare Payment Ad11 visory Commission shall conduct a study on coverage

12 of cardiac and pulmonary rehabilitation therapy

13 services under the medicare program under title

14 XVIII of the Social Security Act.

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

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

17 appropriate—

18 (A) qualifying diagnoses required for cov19 erage of cardiac and pulmonary rehabilitation

20 therapy services;

21 (B) level of physician direct involvement

22 and supervision in furnishing such services; and

23 (C) level of reimbursement for such serv24 ices.
46

•HR 5612 IH

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

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

3 submit to Congress a report on the study conducted under

4 subsection (a) together with such recommendations for

5 legislation and administrative action as the Commission

6 determines appropriate.

7 TITLE II—RURAL HEALTH CARE

8 IMPROVEMENTS

9 Subtitle A—Critical Access

10 Hospital Provisions

11 SEC. 201. CLARIFICATION OF NO BENEFICIARY COST-SHAR12 ING FOR CLINICAL DIAGNOSTIC LABORA13 TORY TESTS FURNISHED BY CRITICAL AC14 CESS HOSPITALS.

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

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

17 following new paragraph:

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

19 CLINICAL DIAGNOSTIC LABORATORY SERVICES.—No

20 coinsurance, deductible, copayment, or other cost21 sharing otherwise applicable under this part shall

22 apply with respect to clinical diagnostic laboratory

23 services furnished as an outpatient critical access

24 hospital service. Nothing in this title shall be con25 strued as providing for payment for clinical diag-
47

•HR 5612 IH

1 nostic laboratory services furnished as part of out2 patient critical access hospital services, other than

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

4 (b) TECHNICAL AND CONFORMING AMENDMENTS.—

5 (1) Paragraphs (1)(D)(i) and (2)(D)(i) of sec6 tion 1833(a) (42 U.S.C. 1395l(a)) are each amended

7 by striking ‘‘or which are furnished on an outpatient

8 basis by a critical access hospital’’.

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

10 1501A–371) is amended by striking ‘‘The amend11 ment made by subsection (a) shall apply’’ and in12 serting ‘‘Paragraphs (1) through (3) of section

13 1834(g) of the Social Security Act (as amended by

14 paragraph (1)) apply’’.

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

16 (1) by subsection (a) applies to services fur17 nished on or after the date of the enactment of

18 BBRA;

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

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

21 Stat. 1501A–371); and

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

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

24 (113 Stat. 1501A–371).
48

•HR 5612 IH

1 SEC. 202. ASSISTANCE WITH FEE SCHEDULE PAYMENT FOR

2 PROFESSIONAL SERVICES UNDER ALL-INCLU3 SIVE RATE.

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

5 1395m(g)(2)(B)) is amended by inserting ‘‘115 percent

6 of’’ before ‘‘such amounts’’.

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

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

9 furnished on or after April 1, 2001.

10 SEC. 203. EXEMPTION OF CRITICAL ACCESS HOSPITAL

11 SWING BEDS FROM SNF PPS.

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

13 1395yy(e)(7)) is amended—

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

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

16 (2) in subparagraph (A), by striking ‘‘IN GEN17 ERAL.—The’’ and inserting ‘‘TRANSITION.—Subject

18 to subparagraph (C), the’’;

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

20 than critical access hospitals)’’ after ‘‘facilities de21 scribed in subparagraph (B)’’;

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

23 which payment’’ and all that follows before the pe24 riod; and

25 (5) by adding at the end the following new sub26 paragraph:
49

•HR 5612 IH

1 ‘‘(C) EXEMPTION FROM PPS OF SWING2 BED SERVICES FURNISHED IN CRITICAL ACCESS

3 HOSPITALS.—The prospective payment system

4 established under this subsection shall not

5 apply to services furnished by a critical access

6 hospital pursuant to an agreement under sec7 tion 1883.’’.

8 (b) PAYMENT ON A REASONABLE COST BASIS FOR

9 SWING BED SERVICES FURNISHED BY CRITICAL ACCESS

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

11 amended—

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

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

14 and

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

16 paragraph:

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

18 a critical access hospital shall be paid for covered skilled

19 nursing facility services furnished under an agreement en20 tered into under this section on the basis of the reasonable

21 costs of such services (as determined under section

22 1861(v)).’’.

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

24 this section shall apply to cost reporting periods beginning

25 on or after the date of the enactment of this Act.
50

•HR 5612 IH

1 SEC. 204. PAYMENT IN CRITICAL ACCESS HOSPITALS FOR

2 EMERGENCY ROOM ON-CALL PHYSICIANS.

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

4 1395m(g)), as amended by section 201(a), is further

5 amended by adding at the end the following new para6 graph:

7 ‘‘(5) COVERAGE OF COSTS FOR EMERGENCY

8 ROOM ON-CALL PHYSICIANS.—In determining the

9 reasonable costs of outpatient critical access hospital

10 services under paragraphs (1) and (2)(A), the Sec11 retary shall recognize as allowable costs, amounts

12 (as defined by the Secretary) for reasonable com13 pensation and related costs for emergency room phy14 sicians who are on-call (as defined by the Secretary)

15 but who are not present on the premises of the crit16 ical access hospital involved, and are not otherwise

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

18 any other provider or facility.’’.

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

20 subsection (a) applies to cost reporting periods beginning

21 on or after October 1, 2001.
51

•HR 5612 IH

1 SEC. 205. TREATMENT OF AMBULANCE SERVICES FUR2 NISHED BY CERTAIN CRITICAL ACCESS HOS3 PITALS.

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

5 1395m(l)) is amended by adding at the end the following

6 new paragraph:

7 ‘‘(8) SERVICES FURNISHED BY CRITICAL AC8 CESS HOSPITALS.—Notwithstanding any other provi9 sion of this subsection, the Secretary shall pay the

10 reasonable costs incurred in furnishing ambulance

11 services if such services are furnished—

12 ‘‘(A) by a critical access hospital (as de13 fined in section 1861(mm)(1)), or

14 ‘‘(B) by an entity that is owned and oper15 ated by a critical access hospital,

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

17 only provider or supplier of ambulance services that

18 is located within a 35-mile drive of such critical ac19 cess hospital.’’.

20 (b) CONFORMING AMENDMENT.—Section

21 1833(a)(1)(R) (42 U.S.C. 1395l(a)(1)(R)) is amended—

22 (1) by striking ‘‘ambulance service,’’ and insert23 ing ‘‘ambulance services, (i)’’; and

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

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

26 services described in section 1834(l)(8), the amounts
52

•HR 5612 IH

1 paid shall be the amounts determined under section

2 1834(g) for outpatient critical access hospital serv3 ices’’.

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

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

6 of the enactment of this Act.

7 SEC. 206. GAO STUDY ON CERTAIN ELIGIBILITY REQUIRE8 MENTS FOR CRITICAL ACCESS HOSPITALS.

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

10 States shall conduct a study on the eligibility requirements

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

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

13 to limitations on average length of stay and number of

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

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

16 as part of a critical access hospital for purposes of

17 the medicare program under title XVIII of such Act,

18 and

19 (2) the effect of seasonal variations in patient

20 admissions on critical access hospital eligibility re21 quirements with respect to limitations on average

22 annual length of stay and number of beds.

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

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

25 submit to Congress a report on the study conducted under
53

•HR 5612 IH

1 subsection (a) together with recommendations

2 regarding—

3 (1) whether distinct part units should be per4 mitted as part of a critical access hospital under the

5 medicare program;

6 (2) if so permitted, the payment methodologies

7 that should apply with respect to services provided

8 by such units;

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

10 should be included in or excluded from the bed limits

11 applicable to critical access hospitals under the

12 medicare program; and

13 (4) any adjustments to such eligibility require14 ments to account for seasonal variations in patient

15 admissions.

16 Subtitle B—Other Rural Hospitals

17 Provisions

18 SEC. 211. EQUITABLE TREATMENT FOR RURAL DISPROPOR19 TIONATE SHARE HOSPITALS.

20 (a) APPLICATION OF UNIFORM THRESHOLD.—Sec21 tion 1886(d)(5)(F)(v) (42 U.S.C. 1395ww(d)(5)(F)(v)) is

22 amended—

23 (1) in subclause (II), by inserting ‘‘(or 15 per24 cent, for discharges occurring on or after April 1,

25 2001)’’ after ‘‘30 percent’’;
54

•HR 5612 IH

1 (2) in subclause (III), by inserting ‘‘(or 15 per2 cent, for discharges occurring on or after April 1,

3 2001)’’ after ‘‘40 percent’’; and

4 (3) in subclause (IV), by inserting ‘‘(or 15 per5 cent, for discharges occurring on or after April 1,

6 2001)’’ after ‘‘45 percent’’.

7 (b) ADJUSTMENT OF PAYMENT FORMULAS.—

8 (1) SOLE COMMUNITY HOSPITALS.—Section

9 1886(d)(5)(F) (42 U.S.C. 1395ww(d)(5)(F)) is

10 amended—

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

12 ‘‘10 percent’’ the following: ‘‘or, for discharges

13 occurring on or after April 1, 2001, is equal to

14 the percent determined in accordance with

15 clause (x)’’; and

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

17 clause:

18 ‘‘(x) For purposes of clause (iv)(VI)

19 (relating to sole community hospitals), in

20 the case of a hospital for a cost reporting

21 period with a disproportionate patient per22 centage (as defined in clause (vi)) that—

23 ‘‘(I) is less than 19.3, the dis24 proportionate share adjustment per25 centage is determined in accordance
55

•HR 5612 IH

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 equal

8 to 10 percent, where P is the hos9 pital’s disproportionate patient per10 centage (as defined in clause (vi)).’’.

11 (2) RURAL REFERRAL CENTERS.—Such section

12 is further amended—

13 (A) in clause (iv)(V) (relating to rural re14 ferral centers), by inserting after ‘‘clause (viii)’’

15 the following: ‘‘or, for discharges occurring on

16 or after April 1, 2001, is equal to the percent

17 determined in accordance with clause (xi)’’; and

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

19 clause:

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

21 in the case of a hospital for a cost report22 ing period with a disproportionate patient

23 percentage (as defined in clause (vi))

24 that—
56

•HR 5612 IH

1 ‘‘(I) is less than 19.3, the dis2 proportionate share adjustment per3 centage is determined in accordance

4 with the following formula: (P–

5 15)(.65) + 2.5;

6 ‘‘(II) is equal to or exceeds 19.3,

7 but is less than 30.0, such adjustment

8 percentage is equal to 5.25 percent; or

9 ‘‘(III) is equal to or exceeds 30,

10 such adjustment percentage is deter11 mined in accordance with the fol12 lowing formula: (P–30)(.6) + 5.25,

13 where P is the hospital’s dispropor14 tionate patient percentage (as defined

15 in clause (vi)).’’.

16 (3) SMALL RURAL HOSPITALS GENERALLY.—

17 Such section is further amended—

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

19 ‘‘4 percent’’ the following: ‘‘or, for discharges

20 occurring on or after April 1, 2001, is equal to

21 the percent determined in accordance with

22 clause (xii)’’; and

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

24 clause:
57

•HR 5612 IH

1 ‘‘(xii) For purposes of clause (iv)(III)

2 (relating to small rural hospitals gen3 erally), in the case of a hospital for a cost

4 reporting period with a disproportionate

5 patient percentage (as defined in clause

6 (vi)) that—

7 ‘‘(I) is less than 19.3, the dis8 proportionate share adjustment per9 centage is determined in accordance

10 with the following formula: (P–

11 15)(.65) + 2.5;

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

13 such adjustment percentage is equal

14 to 5.25 percent, where P is the hos15 pital’s disproportionate patient per16 centage (as defined in clause (vi)).’’.

17 (4) HOSPITALS THAT ARE BOTH SOLE COMMU18 NITY HOSPITALS AND RURAL REFERRAL CENTERS.—

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

20 by inserting after ‘‘clause (viii)’’ the following: ‘‘or,

21 for discharges occurring on or after April 1, 2001,

22 the greater of the percentages determined under

23 clause (x) or (xi)’’.

24 (5) URBAN HOSPITALS WITH LESS THAN 100

25 BEDS.—Such section is further amended—
58

•HR 5612 IH

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

2 percent’’ the following: ‘‘or, for discharges oc3 curring on or after April 1, 2001, is equal to

4 the percent determined in accordance with

5 clause (xiii); and

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

7 clause:

8 ‘‘(xiii) For purposes of clause (iv)(II)

9 (relating to urban hospitals with less than

10 100 beds), in the case of a hospital for a

11 cost reporting period with a dispropor12 tionate patient percentage (as defined in

13 clause (vi)) that—

14 ‘‘(I) is less than 19.3, the dis15 proportionate share adjustment per16 centage is determined in accordance

17 with the following formula: (P–

18 15)(.65) + 2.5;

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

20 such adjustment percentage is equal

21 to 5.25 percent; where P is the hos22 pital’s disproportionate patient per23 centage (as defined in clause (vi)).’’.
59

•HR 5612 IH

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’’;
60

•HR 5612 IH

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.
61

•HR 5612 IH

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.’’.
62

•HR 5612 IH

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
63

•HR 5612 IH

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—
64

•HR 5612 IH

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
65

•HR 5612 IH

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—
66

•HR 5612 IH

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.
67

•HR 5612 IH

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—
68

•HR 5612 IH

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)).
69

•HR 5612 IH

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),
70

•HR 5612 IH

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
71

•HR 5612 IH

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.
72

•HR 5612 IH

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)).
73

•HR 5612 IH

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).
74

•HR 5612 IH

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:
75

•HR 5612 IH

1 ‘‘(XVIII) for fiscal year 2003, the market bas2 ket percentage increase minus 0.5 percentage points

3 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.
76

•HR 5612 IH

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
77

•HR 5612 IH

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
78

•HR 5612 IH

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.’’.
79

•HR 5612 IH

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-
80

•HR 5612 IH

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 Bene11 ficiary Protection Act of 2000’’ after ‘‘Balanced Budget

12 Refinement Act 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—
81

•HR 5612 IH

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.
82

•HR 5612 IH

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 Beneficiary Protection Act of

10 2000’’ after ‘‘Omnibus Budget Reconciliation Act of

11 1990’’.

12 (d) TECHNICAL AMENDMENT.—

13 (1) IN GENERAL.—Section 1886(d)(5)(F)(i) (42

14 U.S.C. 1395ww(d)(5)(F)(i)) is amended by striking

15 ‘‘and before October 1, 1997,’’.

16 (2) EFFECTIVE DATE.—The amendment made

17 by paragraph (1) is effective as if included in the en18 actment of BBA.

19 (e) REFERENCE TO CHANGES IN DSH FOR RURAL

20 HOSPITALS.—For additional changes in the DSH pro21 gram for rural hospitals, see section 211.

22 SEC. 304. WAGE INDEX IMPROVEMENTS.

23 (a) DURATION OF WAGE INDEX RECLASSIFICATION;

24 USE OF 3-YEAR WAGE DATA.—Section 1886(d)(10)(D)
83

•HR 5612 IH

1 (42 U.S.C. 1395ww(d)(10)(D)) is amended by adding at

2 the end the following new clauses:

3 ‘‘(v) Any decision of the Board to reclassify a sub4 section (d) hospital for purposes of the adjustment factor

5 described in subparagraph (C)(i)(II) for fiscal year 2001

6 or any fiscal year thereafter shall be effective for a period

7 of 3 fiscal years, except that the Secretary shall establish

8 procedures under which a subsection (d) hospital may

9 elect to terminate such reclassification before the end of

10 such period.

11 ‘‘(vi) Such guidelines shall provide that, in making

12 decisions on applications for reclassification for the pur13 poses described in clause (v) for fiscal year 2003 and any

14 succeeding fiscal year, the Board shall base any compari15 son of the average hourly wage for the hospital with the

16 average hourly wage for hospitals in an area on—

17 ‘‘(I) an average of the average hourly wage

18 amount for the hospital from the most recently pub19 lished hospital wage survey data of the Secretary (as

20 of the date on which the hospital applies for reclassi21 fication) and such amount from each of the two im22 mediately preceding surveys; and

23 ‘‘(II) an average of the average hourly wage

24 amount for hospitals in such area from the most re25 cently published hospital wage survey data of the
84

•HR 5612 IH

1 Secretary (as of the date on which the hospital ap2 plies for reclassification) and such amount from each

3 of the two immediately preceding surveys.’’.

4 (b) PROCESS TO PERMIT STATEWIDE WAGE INDEX

5 CALCULATION AND APPLICATION.—

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

7 Human Services shall establish a process (based on

8 the voluntary process utilized by the Secretary of

9 Health and Human Services under section 1848 of

10 the Social Security Act (42 U.S.C. 1395w–4) for

11 purposes of computing and applying a statewide geo12 graphic wage index) under which an appropriate

13 statewide entity may apply to have all the geo14 graphic areas in a State treated as a single geo15 graphic area for purposes of computing and applying

16 the area wage index under section 1886(d)(3)(E) of

17 such Act (42 U.S.C. 1395ww(d)(3)(E)). Such proc18 ess shall be established by October 1, 2001, for re19 classifications beginning in fiscal year 2003.

20 (2) PROHIBITION ON INDIVIDUAL HOSPITAL RE21 CLASSIFICATION.—Notwithstanding any other provi22 sion of law, if the Secretary applies a statewide geo23 graphic wage index under paragraph (1) with re24 spect to a State, any application submitted by a hos25 pital in that State under section 1886(d)(10) of the
85

•HR 5612 IH

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—
86

•HR 5612 IH

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
87

•HR 5612 IH

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.
88

•HR 5612 IH

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:
89

•HR 5612 IH

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
90

•HR 5612 IH

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
91

•HR 5612 IH

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-
92

•HR 5612 IH

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)).
93

•HR 5612 IH

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;’’.
94

•HR 5612 IH

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).
95

•HR 5612 IH

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.
96

•HR 5612 IH

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-
97

•HR 5612 IH

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
98

•HR 5612 IH

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-
99

•HR 5612 IH

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-
100

•HR 5612 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.
101

•HR 5612 IH

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)—
102

•HR 5612 IH

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.
103

•HR 5612 IH

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.—
104

•HR 5612 IH

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-
105

•HR 5612 IH

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
106

•HR 5612 IH

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.
107

•HR 5612 IH

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 of Health

19 and Human Services shall substitute such change in

20 the hospital’s geographic adjustment that would oth21 erwise be applied to an entity or department of the

22 hospital that is provider based to account for vari23 ations in costs which are attributable to wages and

24 wage-related costs for items and services paid under

25 the prospective payment systems described in para26 graph (2).
108

•HR 5612 IH

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.
109

•HR 5612 IH

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 (3) RECLASSIFICATION OF FREESTANDING

7 SKILLED NURSING FACILITIES AND HOME HEALTH

8 AGENCIES.—The Secretary shall establish a process

9 by which a skilled nursing facility or home health

10 agency that is not a unit of, or owned or operated

11 by, a hospital may apply to change the facility’s or

12 agency’s geographic classification for a fiscal year

13 for purposes of the factor used to adjust the pro14 spective payment rate for area differences in wage

15 levels of the skilled nursing facility or home health

16 agency, as the case may be, to account for variations

17 in costs which are attributable to wages and wage18 related costs for items and services paid under the

19 prospective payment systems described in subpara20 graphs (A) and (B) of paragraph (2).

21 (b) EFFECTIVE DATE.—Subsection (a) applies to fis22 cal years beginning with fiscal year 2002.
110

•HR 5612 IH

1 SEC. 333. NURSE STAFFING AND QUALITY IMPROVEMENT;

2 GRANTS TO STATES.

3 (a) GRANTS TO STATES FOR IMPROVEMENTS IN

4 NURSING HOME STAFFING AND QUALITY.—

5 (1) SECRETARY’S AUTHORITY TO AWARD

6 GRANTS.—The Secretary shall establish a program

7 of competitive grants to States, in accordance with

8 the provisions of this subsection, for the purpose of

9 improving the quality of care furnished in nursing

10 homes operating in the State.

11 (2) APPLICATIONS AND ELIGIBILITY FOR

12 GRANTS.—

13 (A) INITIAL APPLICATION.—A State seek14 ing a grant to conduct a project under this sub15 section shall submit an application containing

16 such information and assurances as the Sec17 retary may require, including—

18 (i) a commitment to submit annual

19 reports describing the State’s progress in

20 increasing staffing levels and making other

21 quality improvements in nursing homes in

22 the State; and

23 (ii) a description of a plan for evalua24 tion of the activities carried out under the

25 grant, including a plan for measurement of

26 progress toward the goals and objectives of
111

•HR 5612 IH

1 the program, consistent with the principles

2 of the Government Performance and Re3 sults Act.

4 (B) CONSULTATION WITH PUBLIC.—Be5 fore submitting an application for a grant

6 under this subsection, States shall solicit and

7 consider the views of members of the public,

8 nursing home residents or their representatives,

9 and other persons concerned with the adminis10 tration of nursing homes within the State with

11 respect to the design of the proposed State pro12 gram.

13 (C) ELIGIBILITY.—

14 (i) INITIAL ELIGIBILITY.—A State

15 shall not be eligible for a grant award

16 under this subsection unless it makes as17 surances satisfactory to the Secretary that

18 the skilled nursing facilities (as defined in

19 section 1819(a)) and nursing facilities (as

20 defined in section 1919(a)) within the

21 State will reach or exceed the minimum

22 staff level described in paragraph (4)(B)

23 not later than two years after enactment of

24 this Act and will maintain such level
112

•HR 5612 IH

1 throughout the remainder of the grant pro2 gram.

3 (ii) CONTINUING ELIGIBILITY.—A

4 State shall not be eligible for the continu5 ation of grant funding under a multi-year

6 grant under this subsection unless the

7 State demonstrates to the Secretary’s sat8 isfaction that it continues to meet the re9 quirement described in clause (i) and has

10 made sufficient progress in meeting the

11 goals described in its grant application.

12 (3) USE OF GRANT FUNDS.—

13 (A) IN GENERAL.—Subject to the suc14 ceeding provisions of this paragraph, funds re15 ceived by a State under this subsection may be

16 provided to entities including nursing homes,

17 labor management partnerships, and edu18 cational institutions, and may be used for any

19 or all of the following purposes:

20 (i) To enable a nursing home to re21 cruit additional nursing staff or to retain

22 existing nursing staff (including through

23 the use of reasonable financial incentives

24 or reasonable benefit enhancements).
113

•HR 5612 IH

1 (ii) To increase education and train2 ing of nursing staff (including designing or

3 implementing programs to promote the ca4 reer advancement of certified nurse aides).

5 (iii) To provide bonuses to nursing

6 homes meeting State quality standards or

7 avoiding serious quality violations for a pe8 riod of one or more years.

9 (iv) Such other nursing home staffing

10 and quality improvement initiatives as the

11 Secretary may approve.

12 (B) APPLICABILITY OF NURSING HOME RE13 FORM PROVISIONS.—Funds made available

14 under a grant awarded to a State under this

15 subsection may only be used to provide financial

16 support or technical assistance for any purpose

17 described in subparagraph (A) to the extent

18 that the activities conducted under the project

19 are consistent with the requirements of sections

20 1818 and 1919 of the Social Security Act (42

21 U.S.C. 1395i–3, 1396r).

22 (C) PROHIBITION.—No funds made avail23 able under a grant awarded to a State under

24 this subsection may be used to provide financial

25 support or technical assistance for any purpose
114

•HR 5612 IH

1 described in subparagraph (A) that is con2 ducted at, or for the benefit of, a nursing facil3 ity that is owned or operated by a State, coun4 ty, or local government.

5 (D) NO SUPPLANTATION OF FUNDS.—

6 Funds made available under a grant awarded to

7 a State under this subsection may only be used

8 to supplement, not supplant, other funds that

9 the State expends to carry out activities de10 scribed in subparagraph (A).

11 (4) DISTRIBUTION OF FUNDS.—

12 (A) IN GENERAL.—Subject to paragraph

13 (2), in awarding grants under this subsection,

14 the Secretary shall award no more than 25 per15 cent of the funds to States in which, as of the

16 date of the enactment of this subsection, skilled

17 nursing facilities (as defined in section 1819(a))

18 and nursing facilities (as defined in section

19 1919(a)) have reached or exceeded the min20 imum staff level specified in subparagraph (B)

21 (as determined by the Secretary).

22 (B) MINIMUM NURSING HOME STAFF

23 LEVEL.—

24 (i) IN GENERAL.—Subject to clause

25 (ii), for purposes of paragraph (2) and
115

•HR 5612 IH

1 subparagraph (A), the level specified in

2 this subparagraph for a skilled nursing fa3 cility or nursing facility is a staff level suf4 ficient to ensure that each resident receives

5 from a certified nurse aide at least 2 hours

6 per day of direct care (including repo7 sitioning the resident and changing wet

8 clothes, assisting with feeding, exercise,

9 and toileting, and working to enhance a

10 resident’s independence with respect to ac11 tivities of daily living).

12 (ii) SECRETARY’S AUTHORITY TO IN13 CREASE MINIMUM STAFF LEVEL.—The

14 Secretary may establish a minimum staff

15 level that is higher than that specified in

16 clause (i). Any such revised staff level shall

17 be effective no earlier than six months

18 after the date on which Secretary provides

19 notice to States of the new requirement.

20 (C) MULTI-YEAR GRANT FUNDS.—The

21 Secretary shall award any multi-year grant

22 under this subsection from amounts appro23 priated (or available pursuant to paragraph

24 (5)(B)) for the first fiscal year of the grant.
116

•HR 5612 IH

1 (5) APPROPRIATIONS AND AVAILABILITY OF

2 CIVIL MONEY PENALTY (CMP) COLLECTIONS.—

3 (A) APPROPRIATIONS.—There are appro4 priated for all costs to the Secretary for car5 rying out the program under this subsection

6 $200,000,000 for each of fiscal years 2001

7 through 2005, such funds to remain available

8 to the Secretary through the end of the first

9 succeeding fiscal year.

10 (B) AVAILABILITY OF CMP COLLEC11 TIONS.—In addition to the amounts appro12 priated pursuant to subparagraph (A), there

13 shall be available to the Secretary for such costs

14 for such fiscal years any amounts deposited in

15 the Nursing Facility Civil Money Penalties Col16 lection Account established under subsection

17 (c).

18 (b) ENHANCED NURSING FACILITY REPORTING RE19 QUIREMENTS.—

20 (1) MEDICARE.—

21 (A) SUBMISSION OF NURSING STAFF

22 LEVEL DATA TO THE SECRETARY.—Section

23 1819(b) (42 U.S.C. 1395i–3(b)) is amended by

24 adding at the end the following new paragraph:

25 ‘‘(8) DATA ON STAFFING LEVELS.—
117

•HR 5612 IH

1 ‘‘(A) SUBMISSION TO SECRETARY.—A

2 skilled nursing facility shall submit to the Sec3 retary, in such form and manner and at such

4 intervals as the Secretary may require, data

5 with respect to nursing staff of the facility.

6 Such data shall include the total number of

7 nursing staff hours furnished during the period

8 specified by the Secretary (including totals for

9 each shift worked during such period) by the

10 facility to residents for which payment is made

11 under section 1888(e), broken down by total

12 certified nurse aide hours, total licensed prac13 tical or vocational nurse hours, and total reg14 istered nurse hours, and shall also include the

15 average wage rate for each class of nursing

16 staff employed by the facility.

17 ‘‘(B) PUBLICATION.—The Secretary shall

18 provide for the publication on the Internet site

19 of the Department of Health and Human Serv20 ices known as ‘Nursing Home Compare’ the fa21 cility-specific nursing staff information collected

22 pursuant to subparagraph (A). The Secretary

23 shall update such information periodically.’’.

24 (B) POSTING OF INFORMATION ON NURS25 ING FACILITY STAFFING.—Section 1819(b) (42
118

•HR 5612 IH

1 U.S.C. 1395i–3(b)), as amended by subpara2 graph (A), is further amended by adding at the

3 end the following new paragraph:

4 ‘‘(9) INFORMATION ON NURSE STAFFING.—

5 ‘‘(A) IN GENERAL.—A skilled nursing fa6 cility shall post daily for each nursing unit of

7 the facility and for each shift the current num8 ber of licensed and unlicensed nursing staff di9 rectly responsible for resident care. The infor10 mation shall be displayed in a uniform manner

11 (as specified by the Secretary) and in a clearly

12 visible place.

13 ‘‘(B) PUBLICATION OF DATA.—A skilled

14 nursing facility shall, upon request, make avail15 able to the public the nursing staff data de16 scribed in subparagraph (A).’’.

17 (C) INFORMATION CONCERNING PATIENT

18 CLASSIFICATION.—Section 1819(b)(4)(C) (42

19 U.S.C. 1395i–3(b)(4)(C)) is amended by adding

20 at the end the following new clause:

21 ‘‘(iii) INFORMATION CONCERNING

22 RESIDENTS.—The skilled nursing facility

23 shall provide the Secretary, in such form

24 and manner and at such intervals as the

25 Secretary may require, a classification of
119

•HR 5612 IH

1 all residents of the skilled nursing facility

2 that accords with the patient classification

3 system described in section

4 1888(e)(3)(B)(ii), or such successor system

5 as the Secretary may identify.’’.

6 (2) MEDICAID.—

7 (A) IN GENERAL.—Section 1919(b) (42

8 U.S.C. 1396r) is amended by adding at the end

9 the following new paragraph:

10 ‘‘(8) DATA ON STAFFING LEVELS.—

11 ‘‘(A) SUBMISSION TO SECRETARY.—A

12 nursing facility shall submit to the Secretary, in

13 such form and manner and at such intervals as

14 the Secretary may require, data with respect to

15 nursing staff of the facility. Such data shall in16 clude the total number of nursing staff hours

17 furnished during the period specified by the

18 Secretary (including totals for each shift

19 worked during such period) by the facility to

20 residents for which payment is made under this

21 title, broken down by total certified nurse aide

22 hours, total licensed practical or vocational

23 nurse hours, and total registered nurse hours,

24 and shall also include the average wage rate for
120

•HR 5612 IH

1 each class of nursing staff employed by the fa2 cility.

3 ‘‘(B) PUBLICATION.—The Secretary shall

4 provide for the publication on the Internet site

5 of the Department of Health and Human Serv6 ices known as ‘Nursing Home Compare’ the fa7 cility-specific nursing staff information collected

8 pursuant to subparagraph (A). The Secretary

9 shall update such information periodically.’’.

10 (B) POSTING OF INFORMATION ON NURS11 ING FACILITY STAFFING.—Section 1919(b) (42

12 U.S.C. 1395r(b)), as amended by subparagraph

13 (A), is further amended by adding at the end

14 the following new paragraph:

15 ‘‘(9) INFORMATION ON NURSE STAFFING.—

16 ‘‘(A) IN GENERAL.—A nursing facility

17 shall post daily for each nursing unit of the fa18 cility and for each shift the current number of

19 licensed and unlicensed nursing staff directly

20 responsible for resident care. The information

21 shall be displayed in a uniform manner (as

22 specified by the Secretary) and in a clearly visi23 ble place.

24 ‘‘(B) PUBLICATION OF DATA.—A nursing

25 facility shall, upon request, make available to
121

•HR 5612 IH

1 the public the nursing staff data described in

2 subparagraph (A).’’.

3 (C) INFORMATION CONCERNING PATIENT

4 CLASSIFICATION.—Section 1919(b)(4)(C) (42

5 U.S.C. 1396r(b)(4)(C)) is amended by adding

6 at the end the following new clause:

7 ‘‘(iv) INFORMATION CONCERNING

8 RESIDENTS.—The nursing facility shall

9 provide the Secretary, in such form and

10 manner and at such intervals as the Sec11 retary may require, a classification of all

12 residents of the nursing facility that ac13 cords with the patient classification system

14 described in section 1888(e)(3)(B)(ii), or

15 such successor system as the Secretary

16 may identify.’’.

17 (c) NURSING FACILITY CIVIL MONEY PENALTY COL18 LECTIONS.—

19 (1) ESTABLISHMENT OF NURSING FACILITY

20 CIVIL MONEY PENALTY COLLECTIONS ACCOUNT.—

21 Section 1128A (42 U.S.C. 1320a–7a) is amended by

22 adding at the end the following new subsection:

23 ‘‘(o) ESTABLISHMENT OF NURSING FACILITY CIVIL

24 MONEY PENALTY COLLECTIONS ACCOUNT.—There is

25 hereby established an account to be known as the ‘Nursing
122

•HR 5612 IH

1 Facility Civil Money Penalties Collection Account’ (here2 after in this subsection referred to as the ‘Account’). Not3 withstanding any other provision of law, there shall be de4 posited into the Account the Secretary’s share of any civil

5 monetary penalties collected under sections 1819 and

6 1919, all such amounts to be available without fiscal year

7 limitation for repaying the Secretary’s share of amounts

8 owed to nursing facilities or skilled nursing facilities pur9 suant to the final sentence of sections 1819(h)(2)(B)(ii)

10 and 1919(h)(2)(B)(ii), and for awarding grants under sec11 tion 333(a) of the Medicare, Medicaid, and SCHIP Bene12 fits Improvement and Beneficiary Protection Act of

13 2000.’’.

14 (2) AUTHORITY TO COLLECT CMP IMME15 DIATELY.—

16 (A) MEDICARE.—Section 1819(h)(2)(B)(ii)

17 (42 U.S.C. 1395i–3(h)(2)(B)(ii)) is amended by

18 inserting before the final period ‘‘, except that,

19 notwithstanding section 1128A(c)(2) or any

20 other provision of law, the Secretary, upon de21 termining that a civil money penalty should be

22 imposed against a skilled nursing facility pursu23 ant to this paragraph, shall take immediate ac24 tion to collect such penalty (except where the

25 Secretary finds that such action could jeop-
123

•HR 5612 IH

1 ardize the health or welfare of residents of the

2 skilled nursing facility). In collecting such pen3 alty, the Secretary may deduct the amount of

4 the penalty from amounts otherwise payable to

5 the facility under this title or take such other

6 actions as the Secretary considers appropriate.

7 If the Secretary’s imposition of a penalty under

8 this paragraph is set aside, in whole or in part,

9 as a result of a hearing under section

10 1128A(c)(2) (or an appeal therefrom) or by a

11 court of competent jurisdiction, and the Sec12 retary elects not to pursue an appeal of such

13 judgment; or has exhausted all appeals, the

14 Secretary shall repay any amount owed to the

15 skilled nursing facility with accrued interest’’.

16 (B) MEDICAID.—Section 1919(h)(3)(B)(ii)

17 (42 U.S.C. 1396r(h)(3)(B)(ii)) is amended by

18 inserting before the final period ‘‘, except that,

19 notwithstanding section 1128A(c)(2) or any

20 other provision of law, the Secretary, upon de21 termining that a civil money penalty should be

22 imposed against a nursing facility pursuant to

23 this paragraph, shall take immediate action to

24 collect the penalty (except where the Secretary

25 finds that such action could jeopardize the
124

•HR 5612 IH

1 health or welfare of residents of the nursing fa2 cility). In collecting such penalty, the Secretary

3 may direct the State to deduct the amount of

4 the penalty from amounts otherwise payable to

5 the nursing facility under this title or take such

6 other actions as the Secretary, in consultation

7 with the State, considers appropriate. If the

8 Secretary’s imposition of a penalty under this

9 paragraph is set aside, in whole or in part, as

10 a result of a hearing under section 1128A(c)(2)

11 (or an appeal therefrom) or by a court of com12 petent jurisdiction, and the Secretary elects not

13 to pursue an appeal of such judgment, or has

14 exhausted all appeals, the Secretary shall repay,

15 or shall direct the State to repay, any amount

16 owed to the nursing facility with accrued inter17 est’’.

18 TITLE IV—PROVISIONS

19 RELATING TO PART B

20 Subtitle A—Hospital Outpatient

21 Services

22 SEC. 401. REVISION OF HOSPITAL OUTPATIENT PPS PAY23 MENT UPDATE.

24 (a) IN GENERAL.—Section 1833(t)(3)(C)(iii) (42

25 U.S.C. 1395l(t)(3)(C)(iii)) is amended by striking ‘‘in
125

•HR 5612 IH

1 each of 2000, 2001, and 2002’’ and inserting ‘‘in each

2 of 2000 and 2002’’.

3 (b) ADJUSTMENT FOR CASE MIX CHANGES.—

4 (1) IN GENERAL.—Section 1833(t)(3)(C) (42

5 U.S.C. 1395l(t)(3)(C)) is amended—

6 (A) by redesignating clause (iii) as clause

7 (iv); and

8 (B) by inserting after clause (ii) the fol9 lowing new clause:

10 ‘‘(iii) ADJUSTMENT FOR SERVICE MIX

11 CHANGES.—Insofar as the Secretary deter12 mines that the adjustments for service mix

13 under paragraph (2) for a previous year

14 (or estimates that such adjustments for a

15 future year) did (or are likely to) result in

16 a change in aggregate payments under this

17 subsection during the year that are a re18 sult of changes in the coding or classifica19 tion of covered OPD services that do not

20 reflect real changes in service mix, the Sec21 retary may adjust the conversion factor

22 computed under this subparagraph for

23 subsequent years so as to eliminate the ef24 fect of such coding or classification

25 changes.’’.
126

•HR 5612 IH

1 (2) EFFECTIVE DATE.—The amendments made

2 by paragraph (1) shall take effect as if included in

3 the enactment of BBA.

4 SEC. 402. CLARIFYING PROCESS AND STANDARDS FOR DE5 TERMINING ELIGIBILITY OF DEVICES FOR

6 PASS-THROUGH PAYMENTS UNDER HOSPITAL

7 OUTPATIENT PPS.

8 (a) IN GENERAL.—Section 1833(t)(6) (42 U.S.C.

9 1395l(t)(6)) is amended—

10 (1) by redesignating subparagraphs (C) and

11 (D) as subparagraphs (D) and (E), respectively; and

12 (2) by striking subparagraph (B) and inserting

13 the following new subparagraphs:

14 ‘‘(B) USE OF CATEGORIES IN DETER15 MINING ELIGIBILITY OF A DEVICE FOR PASS16 THROUGH PAYMENTS.—The following provi17 sions apply for purposes of determining whether

18 a medical device qualifies for additional pay19 ments under clause (ii) or (iv) of subparagraph

20 (A):

21 ‘‘(i) ESTABLISHMENT OF INITIAL CAT22 EGORIES.—The Secretary shall initially es23 tablish under this clause categories of med24 ical devices based on type of device by

25 April 1, 2001. Such categories shall be es-
127

•HR 5612 IH

1 tablished in a manner such that each med2 ical device that meets the requirements of

3 clause (ii) or (iv) of subparagraph (A) as

4 of January 1, 2001, is included in such a

5 category and no such device is included in

6 more than one category. For purposes of

7 the preceding sentence, whether a medical

8 device meets such requirements as of such

9 date shall be determined on the basis of

10 the program memoranda issued before

11 such date or if the Secretary determines

12 the medical device would have been in13 cluded in the program memoranda but for

14 the requirement of subparagraph

15 (A)(iv)(I). The categories may be estab16 lished under this clause by program memo17 randum or otherwise, after consultation

18 with groups representing hospitals, manu19 facturers of medical devices, and other af20 fected parties.

21 ‘‘(ii) ESTABLISHING CRITERIA FOR

22 ADDITIONAL CATEGORIES.—

23 ‘‘(I) IN GENERAL.—The Sec24 retary shall establish criteria that will

25 be used for creation of additional cat-
128

•HR 5612 IH

1 egories (other than those established

2 under clause (i)) through rulemaking

3 (which may include use of an interim

4 final rule with comment period).

5 ‘‘(II) STANDARD.—Such cat6 egories shall be established under this

7 clause in a manner such that no med8 ical device is described by more than

9 one category. Such criteria shall in10 clude a test of whether the average

11 cost of devices that would be included

12 in a category and are in use at the

13 time the category is established is not

14 insignificant, as described in subpara15 graph (A)(iv)(II).

16 ‘‘(III) DEADLINE.—Criteria shall

17 first be established under this clause

18 by July 1, 2001. The Secretary may

19 establish in compelling circumstances

20 categories under this clause before the

21 date such criteria are established.

22 ‘‘(IV) ADDING CATEGORIES.—

23 The Secretary shall promptly establish

24 a new category of medical devices

25 under this clause for any medical de-
129

•HR 5612 IH

1 vice that meets the requirements of

2 subparagraph (A)(iv) and for which

3 none of the categories in effect (or

4 that were previously in effect) is ap5 propriate.

6 ‘‘(iii) PERIOD FOR WHICH CATEGORY

7 IS IN EFFECT.—A category of medical de8 vices established under clause (i) or clause

9 (ii) shall be in effect for a period of at

10 least 2 years, but not more than 3 years,

11 that begins—

12 ‘‘(I) in the case of a category es13 tablished under clause (i), on the first

14 date on which payment was made

15 under this paragraph for any device

16 described by such category (including

17 payments made during the period be18 fore April 1, 2001); and

19 ‘‘(II) in the case of any other

20 category, on the first date on which

21 payment is made under this para22 graph for any medical device that is

23 described by such category.

24 ‘‘(iv) REQUIREMENTS TREATED AS

25 MET.—A medical device shall be treated as
130

•HR 5612 IH

1 meeting the requirements of subparagraph

2 (A)(iv) if—

3 ‘‘(I) the device is described by a

4 category established and in effect

5 under clause (i); or

6 ‘‘(II) the device is described by a

7 category established and in effect

8 under clause (ii) and an application

9 under section 515 of the Federal

10 Food, Drug, and Cosmetic Act has

11 been approved with respect to the de12 vice, or the device has been cleared for

13 market under section 510(k) of such

14 Act, or the device is exempt from the

15 requirements of section 510(k) of

16 such Act pursuant to subsection (l) or

17 (m) of section 510 of such Act or sec18 tion 520(g) of such Act.

19 Nothing in this clause shall be construed

20 as requiring an application or prior ap21 proval (other than that described in sub22 clause (II)) in order for a covered device to

23 qualify for payment under this paragraph.

24 ‘‘(C) LIMITED PERIOD OF PAYMENT.—
131

•HR 5612 IH

1 ‘‘(i) DRUGS AND BIOLOGICALS.—The

2 payment under this paragraph with respect

3 to a drug or biological shall only apply dur4 ing a period of at least 2 years, but not

5 more than 3 years, that begins—

6 ‘‘(I) on the first date this sub7 section is implemented in the case of

8 a drug or biological described in

9 clause (i), (ii), or (iii) of subparagraph

10 (A) and in the case of a drug or bio11 logical described in subparagraph

12 (A)(iv) and for which payment under

13 this part is made as an outpatient

14 hospital service before such first date;

15 or

16 ‘‘(II) in the case of a drug or bio17 logical described in subparagraph

18 (A)(iv) not described in subclause (I),

19 on the first date on which payment is

20 made under this part for the drug or

21 biological as an outpatient hospital

22 service.

23 ‘‘(ii) MEDICAL DEVICES.—Payment

24 shall be made under this paragraph with
132

•HR 5612 IH

1 respect to a medical device only if such

2 device—

3 ‘‘(I) is described by a category of

4 medical devices established and in ef5 fect under subparagraph (B); and

6 ‘‘(II) is provided as part of a

7 service (or group of services) paid for

8 under this subsection and provided

9 during the period for which such cat10 egory is in effect under such subpara11 graph.’’.

12 (b) CONFORMING AMENDMENTS.—Section 1833(t)

13 (42 U.S.C. 1395l(t)) is further amended—

14 (1) in paragraph (6)(A)(iv)(II), by striking ‘‘the

15 cost of the device, drug, or biological’’ and inserting

16 ‘‘the cost of the drug or biological or the average

17 cost of the category of devices’’;

18 (2) in paragraph (6)(D) (as redesignated by

19 subsection (a)(1)), by striking ‘‘subparagraph

20 (D)(iii)’’ in the matter preceding clause (i) and in21 serting ‘‘subparagraph (E)(iii)’’; and

22 (3) in paragraph (12)(E), by striking ‘‘addi23 tional payments (consistent with paragraph (6)(B))’’

24 and inserting ‘‘additional payments, the determina25 tion and deletion of initial and new categories (con-
133

•HR 5612 IH

1 sistent with subparagraphs (B) and (C) of para2 graph (6))’’.

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

4 this section take effect on the date of the enactment of

5 this Act.

6 (d) TRANSITION.—

7 (1) IN GENERAL.—In the case of a medical de8 vice provided as part of a service (or group of serv9 ices) furnished during the period before initial cat10 egories are implemented under subparagraph (B)(i)

11 of section 1833(t)(6) of the Social Security Act (as

12 amended by subsection (a)), payment shall be made

13 for such device under such section in accordance

14 with the provisions in effect before the date of the

15 enactment of this Act, except that, beginning on the

16 date that is 30 days after the date of the enactment

17 of this Act, payment shall also be made for such a

18 device that is not included in a program memo19 randum described in such subparagraph if the Sec20 retary of Health and Human Services determines

21 that the device is likely to be described by such an

22 initial category or would have been included in such

23 program memoranda but for the requirement of sub24 paragraph (A)(iv)(I) of that section.
134

•HR 5612 IH

1 (2) APPLICATION OF CURRENT PROCESS.—Not2 withstanding any other provision of law, the Sec3 retary shall continue to accept applications with re4 spect to medical devices under the process estab5 lished pursuant to paragraph (6) of section 1833(t)

6 of the Social Security Act (as in effect on the day

7 before the date of the enactment of this Act)

8 through December 1, 2000, and any device—

9 (A) with respect to which an application

10 was submitted (pursuant to such process) on or

11 before such date; and

12 (B) that meets the requirements of clause

13 (ii) or (iv) of subparagraph (A) of such para14 graph (as determined pursuant to such proc15 ess),

16 shall be treated as a device with respect to which an

17 initial category is required to be established under

18 subparagraph (B)(i) of such paragraph (as amended

19 by subsection (a)(2)).

20 SEC. 403. APPLICATION OF OPD PPS TRANSITIONAL COR21 RIDOR PAYMENTS TO CERTAIN HOSPITALS

22 THAT DID NOT SUBMIT A 1996 COST REPORT.

23 (a) IN GENERAL.—Section 1833(t)(7)(F)(ii)(I) (42

24 U.S.C. 1395l(t)(7)(F)(ii)(I)) is amended by inserting ‘‘(or

25 in the case of a hospital that did not submit a cost report
135

•HR 5612 IH

1 for such period, during the first subsequent cost reporting

2 period ending before 2001 for which the hospital sub3 mitted a cost report)’’ after ‘‘1996’’.

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

5 subsection (a) shall take effect as if included in the enact6 ment of BBRA.

7 SEC. 404. APPLICATION OF RULES FOR DETERMINING PRO8 VIDER-BASED STATUS FOR CERTAIN ENTI9 TIES.

10 (a) GRANDFATHER.—Notwithstanding any other pro11 vision of law, for purposes of making determinations of

12 provider-based status under title XVIII of the Social Secu13 rity Act on or after October 1, 2000, any facility or organi14 zation that is treated as provider-based in relation to a

15 hospital or critical access hospital under such title as of

16 October 1, 2000—

17 (1) shall continue to be treated as provider18 based in relation to such hospital or critical access

19 hospital under such title during the 2-year period

20 beginning on October 1, 2000; and

21 (2) the requirements, limitations, and exclu22 sions specified in paragraphs (d), (e), (f), and (h) of

23 section 413.65 of title 42, Code of Federal Regula24 tions shall not apply to such facility or organization
136

•HR 5612 IH

1 in relation to such hospital or critical access hospital

2 until after the end of such 2-year period.

3 (b) TEMPORARY CRITERIA.—For purposes of title

4 XVIII of the Social Security Act—

5 (1) a facility or organization for which a deter6 mination of provider-based status in relation to a

7 hospital or critical access hospital is requested on or

8 after October 1, 2000, and before October 1, 2002,

9 may not be treated as not having provider-based sta10 tus in relation to such a hospital for any period be11 fore a determination is made with respect to such

12 status pursuant to such request; and

13 (2) in making a determination with respect to

14 such status for any facility or organization in rela15 tionship to such a hospital on or after October 1,

16 2000, the following rules apply:

17 (A) The facility or organization shall be

18 treated as satisfying any requirements and

19 standards for geographic location in relation to

20 such a hospital if the facility or organization—

21 (i) satisfies the requirements of sec22 tion 413.65(d)(7) of title 42, Code of Fed23 eral Regulations; or
137

•HR 5612 IH

1 (ii) is located not more than 35 miles

2 from the main campus of the hospital or

3 critical access hospital.

4 (B) The facility or organization shall be

5 treated as satisfying any of the requirements

6 and standards for geographic location in rela7 tion to such a hospital if the facility or organi8 zation is owned and operated by a hospital or

9 critical access hospital that—

10 (i) is owned or operated by a unit of

11 State or local government, is a public or

12 private nonprofit corporation that is for13 mally granted governmental powers by a

14 unit of State or local government, or is a

15 private hospital that has a contract with a

16 State or local government that includes the

17 operation of clinics located off the main

18 campus of the hospital to assure access in

19 a well-defined service area to health care

20 services for low-income individuals who are

21 not entitled to benefits under title XVIII

22 (or medical assistance under a State plan

23 under title XIX) of such Act; and

24 (ii) has a disproportionate share ad25 justment percentage (as determined under
138

•HR 5612 IH

1 section 1886(d)(5)(F) of such Act (42

2 U.S.C. 1395ww(d)(5)(F))) greater than

3 11.75 percent or is described in clause

4 (i)(II) of such section.

5 (c) DEFINITIONS.—For purposes of this section, the

6 terms ‘‘hospital’’ and ‘‘critical access hospital’’ have the

7 meanings given such terms in subsections (e) and

8 (mm)(1), respectively, of section 1861 of the Social Secu9 rity Act (42 U.S.C. 1395x).

10 SEC. 405. TREATMENT OF CHILDREN’S HOSPITALS UNDER

11 PROSPECTIVE PAYMENT SYSTEM.

12 (a) IN GENERAL.—Section 1833(t) (42 U.S.C.

13 1395l(t)) is amended—

14 (1) in the heading of paragraph (7)(D)(ii), by

15 inserting ‘‘AND CHILDREN’S HOSPITALS’’ after ‘‘CAN16 CER HOSPITALS’’; and

17 (2) in paragraphs (7)(D)(ii) and (11), by strik18 ing ‘‘section 1886(d)(1)(B)(v)’’ and inserting

19 ‘‘clause (iii) or (v) of section 1886(d)(1)(B)’’.

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

21 subsection (a) apply as if included in the enactment of

22 section 202 of BBRA (113 Stat. 1501A–342).
139

•HR 5612 IH

1 SEC. 406. INCLUSION OF TEMPERATURE MONITORED

2 CRYOABLATION IN TRANSITIONAL PASS3 THROUGH FOR CERTAIN MEDICAL DEVICES,

4 DRUGS, AND BIOLOGICALS UNDER OPD PPS.

5 (a) IN GENERAL.—Section 1833(t)(6)(A)(ii) (42

6 U.S.C. 1395l(t)(6)(A)(ii)) is amended by inserting ‘‘or

7 temperature monitored cryoablation’’ after ‘‘device of

8 brachytherapy’’.

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

10 subsection (a) applies to devices furnished on or after

11 April 1, 2001.

12 SEC. 407. CONTRAST ENHANCED DIAGNOSTIC PROCE13 DURES UNDER HOSPITAL PROSPECTIVE PAY14 MENT SYSTEM.

15 (a) SEPARATE CLASSIFICATION.—Section 1833(t)(2)

16 (42 U.S.C. 1395l(t)(2)) is amended—

17 (1) by striking ‘‘and’’ at the end of subpara18 graph (E);

19 (2) by striking the period at the end of sub20 paragraph (F) and inserting ‘‘; and’’; and

21 (3) by inserting after subparagraph (F) the fol22 lowing new subparagraph:

23 ‘‘(G) the Secretary shall create additional

24 groups of covered OPD services that classify

25 separately those procedures that utilize contrast

26 media from those that do not.’’.
140

•HR 5612 IH

1 (b) CONFORMING AMENDMENT.—Section 1861(t)(1)

2 (42 U.S.C. 1395x(t)(1)) is amended by inserting ‘‘(includ3 ing contrast agents)’’ after ‘‘only such drugs’’.

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

5 this section apply to items and services furnished on or

6 after January 1, 2001.

7 Subtitle B—Provisions Relating to

8 Physicians’ Services

9 SEC. 411. GAO STUDIES RELATING TO PHYSICIANS’ SERV10 ICES.

11 (a) STUDY OF SPECIALIST PHYSICIANS’ SERVICES

12 FURNISHED IN PHYSICIANS’ OFFICES AND HOSPITAL

13 OUTPATIENT DEPARTMENT SERVICES.—

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

15 United States shall conduct a study to examine the

16 appropriateness of furnishing in physicians’ offices

17 specialist physicians’ services (such as gastro18 intestinal endoscopic physicians’ services) which are

19 ordinarily furnished in hospital outpatient depart20 ments. In conducting this study, the Comptroller

21 General shall—

22 (A) review available scientific and clinical

23 evidence about the safety of performing proce24 dures in physicians’ offices and hospital out25 patient departments;
141

•HR 5612 IH

1 (B) assess whether resource-based practice

2 expense relative values established by the Sec3 retary of Health and Human Services under the

4 medicare physician fee schedule under section

5 1848 of the Social Security Act (42 U.S.C.

6 1395w–4) for such specialist physicians’ serv7 ices furnished in physicians’ offices and hospital

8 outpatient departments create an incentive to

9 furnish such services in physicians’ offices in10 stead of hospital outpatient departments; and

11 (C) assess the implications for access to

12 care for medicare beneficiaries if the medicare

13 program were not to cover such services in phy14 sicians’ offices.

15 (2) REPORT.—Not later than July 1, 2001, the

16 Comptroller General shall submit to Congress a re17 port on such study and include such recommenda18 tions as the Comptroller General determines to be

19 appropriate.

20 (b) STUDY OF THE RESOURCE-BASED PRACTICE EX21 PENSE SYSTEM.—

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

23 United States shall conduct a study on the refine24 ments to the practice expense relative value units

25 during the transition to a resource-based practice ex-
142

•HR 5612 IH

1 pense system for physician payments under the

2 medicare program under title XVIII of the Social

3 Security Act. Such study shall examine how the Sec4 retary of Health and Human Services has accepted

5 and used the practice expense data submitted under

6 section 212 of BBRA (113 Stat. 1501A–350).

7 (2) REPORT.—Not later than July 1, 2001, the

8 Comptroller General shall submit to Congress a re9 port on the study conducted under paragraph (1) to10 gether with recommendations regarding—

11 (A) improvements in the process for ac12 ceptance and use of practice expense data

13 under section 212 of BBRA;

14 (B) any change or adjustment that is ap15 propriate to ensure full access to a spectrum of

16 care for beneficiaries under the medicare pro17 gram; and

18 (C) the appropriateness of payments to

19 physicians.

20 SEC. 412. PHYSICIAN GROUP PRACTICE DEMONSTRATION.

21 (a) IN GENERAL.—Title XVIII is amended by insert22 ing after section 1866 the following new sections:

23 ‘‘DEMONSTRATION OF APPLICATION OF PHYSICIAN

24 VOLUME INCREASES TO GROUP PRACTICES

25 ‘‘SEC. 1866A. (a) DEMONSTRATION PROGRAM AU26 THORIZED.—
143

•HR 5612 IH

1 ‘‘(1) IN GENERAL.—The Secretary shall con2 duct demonstration projects to test and, if proven ef3 fective, expand the use of incentives to health care

4 groups participating in the program under this title

5 that—

6 ‘‘(A) encourage coordination of the care

7 furnished to individuals under the programs

8 under parts A and B by institutional and other

9 providers, practitioners, and suppliers of health

10 care items and services;

11 ‘‘(B) encourage investment in administra12 tive structures and processes to ensure efficient

13 service delivery; and

14 ‘‘(C) reward physicians for improving

15 health outcomes.

16 Such projects shall focus on the efficiencies of fur17 nishing health care in a group-practice setting as

18 compared to the efficiencies of furnishing health care

19 in other health care delivery systems.

20 ‘‘(2) ADMINISTRATION BY CONTRACT.—Except

21 as otherwise specifically provided, the Secretary may

22 administer the program under this section in accord23 ance with section 1866B.

24 ‘‘(3) DEFINITIONS.—For purposes of this sec25 tion, terms have the following meanings:
144

•HR 5612 IH

1 ‘‘(A) PHYSICIAN.—Except as the Secretary

2 may otherwise provide, the term ‘physician’

3 means any individual who furnishes services

4 which may be paid for as physicians’ services

5 under this title.

6 ‘‘(B) HEALTH CARE GROUP.—The term

7 ‘health care group’ means a group of physicians

8 (as defined in subparagraph (A)) organized at

9 least in part for the purpose of providing physi10 cians’ services under this title. As the Secretary

11 finds appropriate, a health care group may in12 clude a hospital and any other individual or en13 tity furnishing items or services for which pay14 ment may be made under this title that is affili15 ated with the health care group under an ar16 rangement structured so that such individual or

17 entity participates in a demonstration under

18 this section and will share in any bonus earned

19 under subsection (d).

20 ‘‘(b) ELIGIBILITY CRITERIA.—

21 ‘‘(1) IN GENERAL.—The Secretary is authorized

22 to establish criteria for health care groups eligible to

23 participate in a demonstration under this section, in24 cluding criteria relating to numbers of health care

25 professionals in, and of patients served by, the
145

•HR 5612 IH

1 group, scope of services provided, and quality of

2 care.

3 ‘‘(2) PAYMENT METHOD.—A health care group

4 participating in the demonstration under this section

5 shall agree with respect to services furnished to

6 beneficiaries within the scope of the demonstration

7 (as determined under subsection (c))—

8 ‘‘(A) to be paid on a fee-for-service basis;

9 and

10 ‘‘(B) that payment with respect to all such

11 services furnished by members of the health

12 care group to such beneficiaries shall (where de13 termined appropriate by the Secretary) be made

14 to a single entity.

15 ‘‘(3) DATA REPORTING.—A health care group

16 participating in a demonstration under this section

17 shall report to the Secretary such data, at such

18 times and in such format as the Secretary requires,

19 for purposes of monitoring and evaluation of the

20 demonstration under this section.

21 ‘‘(c) PATIENTS WITHIN SCOPE OF DEMONSTRA22 TION.—

23 ‘‘(1) IN GENERAL.—The Secretary shall specify,

24 in accordance with this subsection, the criteria for

25 identifying those patients of a health care group who
146

•HR 5612 IH

1 shall be considered within the scope of the dem2 onstration under this section for purposes of applica3 tion of subsection (d) and for assessment of the ef4 fectiveness of the group in achieving the objectives

5 of this section.

6 ‘‘(2) OTHER CRITERIA.—The Secretary may es7 tablish additional criteria for inclusion of bene8 ficiaries within a demonstration under this section,

9 which may include frequency of contact with physi10 cians in the group or other factors or criteria that

11 the Secretary finds to be appropriate.

12 ‘‘(3) NOTICE REQUIREMENTS.—In the case of

13 each beneficiary determined to be within the scope

14 of a demonstration under this section with respect to

15 a specific health care group, the Secretary shall en16 sure that such beneficiary is notified of the incen17 tives, and of any waivers of coverage or payment

18 rules, applicable to such group under such dem19 onstration.

20 ‘‘(d) INCENTIVES.—

21 ‘‘(1) PERFORMANCE TARGET.—The Secretary

22 shall establish for each health care group partici23 pating in a demonstration under this section—

24 ‘‘(A) a base expenditure amount, equal to

25 the average total payments under parts A and
147

•HR 5612 IH

1 B for patients served by the health care group

2 on a fee-for-service basis in a base period deter3 mined by the Secretary; and

4 ‘‘(B) an annual per capita expenditure tar5 get for patients determined to be within the

6 scope of the demonstration, reflecting the base

7 expenditure amount adjusted for risk and ex8 pected growth rates.

9 ‘‘(2) INCENTIVE BONUS.—The Secretary shall

10 pay to each participating health care group (subject

11 to paragraph (4)) a bonus for each year under the

12 demonstration equal to a portion of the medicare

13 savings realized for such year relative to the per14 formance target.

15 ‘‘(3) ADDITIONAL BONUS FOR PROCESS AND

16 OUTCOME IMPROVEMENTS.—At such time as the

17 Secretary has established appropriate criteria based

18 on evidence the Secretary determines to be suffi19 cient, the Secretary shall also pay to a participating

20 health care group (subject to paragraph (4)) an ad21 ditional bonus for a year, equal to such portion as

22 the Secretary may designate of the saving to the

23 program under this title resulting from process im24 provements made by and patient outcome improve25 ments attributable to activities of the group.
148

•HR 5612 IH

1 ‘‘(4) LIMITATION.—The Secretary shall limit

2 bonus payments under this section as necessary to

3 ensure that the aggregate expenditures under this

4 title (inclusive of bonus payments) with respect to

5 patients within the scope of the demonstration do

6 not exceed the amount which the Secretary esti7 mates would be expended if the demonstration

8 projects under this section were not implemented.

9 ‘‘PROVISIONS FOR ADMINISTRATION OF DEMONSTRATION

10 PROGRAM

11 ‘‘SEC. 1866B. (a) GENERAL ADMINISTRATIVE AU12 THORITY.—

13 ‘‘(1) BENEFICIARY ELIGIBILITY.—Except as

14 otherwise provided by the Secretary, an individual

15 shall only be eligible to receive benefits under the

16 program under section 1866A (in this section re17 ferred to as the ‘demonstration program’) if such

18 individual—

19 ‘‘(A) is enrolled in under the program

20 under part B and entitled to benefits under

21 part A; and

22 ‘‘(B) is not enrolled in a Medicare+Choice

23 plan under part C, an eligible organization

24 under a contract under section 1876 (or a simi25 lar organization operating under a demonstra26 tion project authority), an organization with an
149

•HR 5612 IH

1 agreement under section 1833(a)(1)(A), or a

2 PACE program under section 1894.

3 ‘‘(2) SECRETARY’S DISCRETION AS TO SCOPE

4 OF PROGRAM.—The Secretary may limit the imple5 mentation of the demonstration program to—

6 ‘‘(A) a geographic area (or areas) that the

7 Secretary designates for purposes of the pro8 gram, based upon such criteria as the Secretary

9 finds appropriate;

10 ‘‘(B) a subgroup (or subgroups) of bene11 ficiaries or individuals and entities furnishing

12 items or services (otherwise eligible to partici13 pate in the program), selected on the basis of

14 the number of such participants that the Sec15 retary finds consistent with the effective and ef16 ficient implementation of the program;

17 ‘‘(C) an element (or elements) of the pro18 gram that the Secretary determines to be suit19 able for implementation; or

20 ‘‘(D) any combination of any of the limits

21 described in subparagraphs (A) through (C).

22 ‘‘(3) VOLUNTARY RECEIPT OF ITEMS AND

23 SERVICES.—Items and services shall be furnished to

24 an individual under the demonstration program only

25 at the individual’s election.
150

•HR 5612 IH

1 ‘‘(4) AGREEMENTS.—The Secretary is author2 ized to enter into agreements with individuals and

3 entities to furnish health care items and services to

4 beneficiaries under the demonstration program.

5 ‘‘(5) PROGRAM STANDARDS AND CRITERIA.—

6 The Secretary shall establish performance standards

7 for the demonstration program including, as applica8 ble, standards for quality of health care items and

9 services, cost-effectiveness, beneficiary satisfaction,

10 and such other factors as the Secretary finds appro11 priate. The eligibility of individuals or entities for

12 the initial award, continuation, and renewal of

13 agreements to provide health care items and services

14 under the program shall be conditioned, at a min15 imum, on performance that meets or exceeds such

16 standards.

17 ‘‘(6) ADMINISTRATIVE REVIEW OF DECISIONS

18 AFFECTING INDIVIDUALS AND ENTITIES FUR19 NISHING SERVICES.—An individual or entity fur20 nishing services under the demonstration program

21 shall be entitled to a review by the program adminis22 trator (or, if the Secretary has not contracted with

23 a program administrator, by the Secretary) of a de24 cision not to enter into, or to terminate, or not to
151

•HR 5612 IH

1 renew, an agreement with the entity to provide

2 health care items or services under the program.

3 ‘‘(7) SECRETARY’S REVIEW OF MARKETING MA4 TERIALS.—An agreement with an individual or enti5 ty furnishing services under the demonstration pro6 gram shall require the individual or entity to guar7 antee that it will not distribute materials that mar8 ket items or services under the program without the

9 Secretary’s prior review and approval.

10 ‘‘(8) PAYMENT IN FULL.—

11 ‘‘(A) IN GENERAL.—Except as provided in

12 subparagraph (B), an individual or entity re13 ceiving payment from the Secretary under a

14 contract or agreement under the demonstration

15 program shall agree to accept such payment as

16 payment in full, and such payment shall be in

17 lieu of any payments to which the individual or

18 entity would otherwise be entitled under this

19 title.

20 ‘‘(B) COLLECTION OF DEDUCTIBLES AND

21 COINSURANCE.—Such individual or entity may

22 collect any applicable deductible or coinsurance

23 amount from a beneficiary.

24 ‘‘(b) CONTRACTS FOR PROGRAM ADMINISTRATION.—
152

•HR 5612 IH

1 ‘‘(1) IN GENERAL.—The Secretary may admin2 ister the demonstration program through a contract

3 with a program administrator in accordance with the

4 provisions of this subsection.

5 ‘‘(2) SCOPE OF PROGRAM ADMINISTRATOR CON6 TRACTS.—The Secretary may enter into such con7 tracts for a limited geographic area, or on a regional

8 or national basis.

9 ‘‘(3) ELIGIBLE CONTRACTORS.—The Secretary

10 may contract for the administration of the program

11 with—

12 ‘‘(A) an entity that, under a contract

13 under section 1816 or 1842, determines the

14 amount of and makes payments for health care

15 items and services furnished under this title; or

16 ‘‘(B) any other entity with substantial ex17 perience in managing the type of program con18 cerned.

19 ‘‘(4) CONTRACT AWARD, DURATION, AND RE20 NEWAL.—

21 ‘‘(A) IN GENERAL.—A contract under this

22 subsection shall be for an initial term of up to

23 three years, renewable for additional terms of

24 up to three years.
153

•HR 5612 IH

1 ‘‘(B) NONCOMPETITIVE AWARD AND RE2 NEWAL FOR ENTITIES ADMINISTERING PART A

3 OR PART B PAYMENTS.—The Secretary may

4 enter or renew a contract under this subsection

5 with an entity described in paragraph (3)(A)

6 without regard to the requirements of section 5

7 of title 41, United States Code.

8 ‘‘(5) APPLICABILITY OF FEDERAL ACQUISITION

9 REGULATION.—The Federal Acquisition Regulation

10 shall apply to program administration contracts

11 under this subsection.

12 ‘‘(6) PERFORMANCE STANDARDS.—The Sec13 retary shall establish performance standards for the

14 program administrator including, as applicable,

15 standards for the quality and cost-effectiveness of

16 the program administered, and such other factors as

17 the Secretary finds appropriate. The eligibility of en18 tities for the initial award, continuation, and renewal

19 of program administration contracts shall be condi20 tioned, at a minimum, on performance that meets or

21 exceeds such standards.

22 ‘‘(7) FUNCTIONS OF PROGRAM ADMINIS23 TRATOR.—A program administrator shall perform

24 any or all of the following functions, as specified by

25 the Secretary:
154

•HR 5612 IH

1 ‘‘(A) AGREEMENTS WITH ENTITIES FUR2 NISHING HEALTH CARE ITEMS AND SERV3 ICES.—Determine the qualifications of entities

4 seeking to enter or renew agreements to provide

5 services under the demonstration program, and

6 as appropriate enter or renew (or refuse to

7 enter or renew) such agreements on behalf of

8 the Secretary.

9 ‘‘(B) ESTABLISHMENT OF PAYMENT

10 RATES.—Negotiate or otherwise establish, sub11 ject to the Secretary’s approval, payment rates

12 for covered health care items and services.

13 ‘‘(C) PAYMENT OF CLAIMS OR FEES.—Ad14 minister payments for health care items or serv15 ices furnished under the program.

16 ‘‘(D) PAYMENT OF BONUSES.—Using such

17 guidelines as the Secretary shall establish, and

18 subject to the approval of the Secretary, make

19 bonus payments as described in subsection

20 (c)(2)(A)(ii) to entities furnishing items or serv21 ices for which payment may be made under the

22 program.

23 ‘‘(E) OVERSIGHT.—Monitor the compli24 ance of individuals and entities with agreements
155

•HR 5612 IH

1 under the program with the conditions of par2 ticipation.

3 ‘‘(F) ADMINISTRATIVE REVIEW.—Conduct

4 reviews of adverse determinations specified in

5 subsection (a)(6).

6 ‘‘(G) REVIEW OF MARKETING MATE7 RIALS.—Conduct a review of marketing mate8 rials proposed by an entity furnishing services

9 under the program.

10 ‘‘(H) ADDITIONAL FUNCTIONS.—Perform

11 such other functions as the Secretary may

12 specify.

13 ‘‘(8) LIMITATION OF LIABILITY.—The provi14 sions of section 1157(b) shall apply with respect to

15 activities of contractors and their officers, employ16 ees, and agents under a contract under this sub17 section.

18 ‘‘(9) INFORMATION SHARING.—Notwithstanding

19 section 1106 and section 552a of title 5, United

20 States Code, the Secretary is authorized to disclose

21 to an entity with a program administration contract

22 under this subsection such information (including

23 medical information) on individuals receiving health

24 care items and services under the program as the
156

•HR 5612 IH

1 entity may require to carry out its responsibilities

2 under the contract.

3 ‘‘(c) RULES APPLICABLE TO BOTH PROGRAM

4 AGREEMENTS AND PROGRAM ADMINISTRATION CON5 TRACTS.—

6 ‘‘(1) RECORDS, REPORTS, AND AUDITS.—The

7 Secretary is authorized to require entities with

8 agreements to provide health care items or services

9 under the demonstration program, and entities with

10 program administration contracts under subsection

11 (b), to maintain adequate records, to afford the Sec12 retary access to such records (including for audit

13 purposes), and to furnish such reports and other

14 materials (including audited financial statements

15 and performance data) as the Secretary may require

16 for purposes of implementation, oversight, and eval17 uation of the program and of individuals’ and enti18 ties’ effectiveness in performance of such agreements

19 or contracts.

20 ‘‘(2) BONUSES.—Notwithstanding any other

21 provision of law, but subject to subparagraph

22 (B)(ii), the Secretary may make bonus payments

23 under the demonstration program from the Federal

24 Health Insurance Trust Fund and the Federal Sup25 plementary Medical Insurance Trust Fund in
157

•HR 5612 IH

1 amounts that do not exceed the amounts authorized

2 under the program in accordance with the following:

3 ‘‘(A) PAYMENTS TO PROGRAM ADMINIS4 TRATORS.—The Secretary may make bonus

5 payments under the program to program ad6 ministrators.

7 ‘‘(B) PAYMENTS TO ENTITIES FURNISHING

8 SERVICES.—

9 ‘‘(i) IN GENERAL.—Subject to clause

10 (ii), the Secretary may make bonus pay11 ments to individuals or entities furnishing

12 items or services for which payment may

13 be made under the demonstration pro14 gram, or may authorize the program ad15 ministrator to make such bonus payments

16 in accordance with such guidelines as the

17 Secretary shall establish and subject to the

18 Secretary’s approval.

19 ‘‘(ii) LIMITATIONS.—The Secretary

20 may condition such payments on the

21 achievement of such standards related to

22 efficiency, improvement in processes or

23 outcomes of care, or such other factors as

24 the Secretary determines to be appropriate.
158

•HR 5612 IH

1 ‘‘(3) ANTIDISCRIMINATION LIMITATION.—The

2 Secretary shall not enter into an agreement with an

3 entity to provide health care items or services under

4 the demonstration program, or with an entity to ad5 minister the program, unless such entity guarantees

6 that it will not deny, limit, or condition the coverage

7 or provision of benefits under the program, for indi8 viduals eligible to be enrolled under such program,

9 based on any health status-related factor described

10 in section 2702(a)(1) of the Public Health Service

11 Act.

12 ‘‘(d) LIMITATIONS ON JUDICIAL REVIEW.—The fol13 lowing actions and determinations with respect to the

14 demonstration program shall not be subject to review by

15 a judicial or administrative tribunal:

16 ‘‘(1) Limiting the implementation of the pro17 gram under subsection (a)(2).

18 ‘‘(2) Establishment of program participation

19 standards under subsection (a)(5) or the denial or

20 termination of, or refusal to renew, an agreement

21 with an entity to provide health care items and serv22 ices under the program.

23 ‘‘(3) Establishment of program administration

24 contract performance standards under subsection

25 (b)(6), the refusal to renew a program administra-
159

•HR 5612 IH

1 tion contract, or the noncompetitive award or re2 newal of a program administration contract under

3 subsection (b)(4)(B).

4 ‘‘(5) Establishment of payment rates, through

5 negotiation or otherwise, under a program agree6 ment or a program administration contract.

7 ‘‘(6) A determination with respect to the pro8 gram (where specifically authorized by the program

9 authority or by subsection (c)(2))—

10 ‘‘(A) as to whether cost savings have been

11 achieved, and the amount of savings; or

12 ‘‘(B) as to whether, to whom, and in what

13 amounts bonuses will be paid.

14 ‘‘(e) APPLICATION LIMITED TO PARTS A AND B.—

15 None of the provisions of this section or of the demonstra16 tion program shall apply to the programs under part C.

17 ‘‘(f) REPORTS TO CONGRESS.—Not later than two

18 years after the date of the enactment of this section, and

19 biennially thereafter for six years, the Secretary shall re20 port to Congress on the use of authorities under the dem21 onstration program. Each report shall address the impact

22 of the use of those authorities on expenditures, access, and

23 quality under the programs under this title.’’.

24 (b) GAO REPORT.—Not later than 2 years after the

25 date on which the demonstration project under section
160

•HR 5612 IH

1 1866A of the Social Security Act, as added by subsection

2 (a), is implemented, the Comptroller General of the United

3 States shall submit to Congress a report on such dem4 onstration project. The report shall include such rec5 ommendations with respect to changes to the demonstra6 tion project that the Comptroller General determines ap7 propriate.

8 SEC. 413. STUDY ON ENROLLMENT PROCEDURES FOR

9 GROUPS THAT RETAIN INDEPENDENT CON10 TRACTOR PHYSICIANS.

11 (a) IN GENERAL.—The Comptroller General of the

12 United States shall conduct a study of the current medi13 care enrollment process for groups that retain independent

14 contractor physicians with particular emphasis on hos15 pital-based physicians, such as emergency department

16 staffing groups. In conducting the evaluation, the Comp17 troller General shall consult with groups that retain inde18 pendent contractor physicians and shall—

19 (1) review the issuance of individual medicare

20 provider numbers and the possible medicare program

21 integrity vulnerabilities of the current process;

22 (2) review direct and indirect costs associated

23 with the current process incurred by the medicare

24 program and groups that retain independent con25 tractor physicians;
161

•HR 5612 IH

1 (3) assess the effect on program integrity by

2 the enrollment of groups that retain independent

3 contractor hospital-based physicians; and

4 (4) develop suggested procedures for the enroll5 ment of these groups.

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

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

8 submit to Congress a report on the study conducted under

9 subsection (a).

10 Subtitle C—Other Services

11 SEC. 421. 1-YEAR EXTENSION OF MORATORIUM ON THER12 APY CAPS; REPORT ON STANDARDS FOR SU13 PERVISION OF PHYSICAL THERAPY ASSIST14 ANTS.

15 (a) IN GENERAL.—Section 1833(g)(4) (42 U.S.C.

16 1395l(g)(4)) is amended by striking ‘‘2000 and 2001.’’

17 and inserting ‘‘2000, 2001, and 2002.’’.

18 (b) CONFORMING AMENDMENT TO CONTINUE FO19 CUSED MEDICAL REVIEWS OF CLAIMS DURING MORATO20 RIUM PERIOD.—Section 221(a)(2) of BBRA (113 Stat.

21 1501A–351) is amended by striking ‘‘(under the amend22 ment made by paragraph (1)(B))’’.

23 (c) STUDY ON STANDARDS FOR SUPERVISION OF

24 PHYSICAL THERAPIST ASSISTANTS.—
162

•HR 5612 IH

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

2 Human Services shall conduct a study of the

3 implications—

4 (A) of eliminating the ‘‘in the room’’ su5 pervision requirement for medicare payment for

6 services of physical therapy assistants who are

7 supervised by physical therapists; and

8 (B) of such requirement on the cap im9 posed under section 1833(g) of the Social Secu10 rity Act (42 U.S.C. 1395l(g)) on physical ther11 apy services.

12 (2) REPORT.—Not later than 18 months after

13 the date of the enactment of this Act, the Secretary

14 shall submit to Congress a report on the study con15 ducted under paragraph (1).

16 SEC. 422. UPDATE IN RENAL DIALYSIS COMPOSITE RATE.

17 (a) UPDATE.—

18 (1) IN GENERAL.—The last sentence of section

19 1881(b)(7) (42 U.S.C. 1395rr(b)(7)) is amended by

20 striking ‘‘for such services furnished on or after

21 January 1, 2001, by 1.2 percent’’ and inserting ‘‘for

22 such services furnished on or after January 1, 2001,

23 by 2.4 percent’’.

24 (2) PROHIBITION ON EXEMPTIONS.—
163

•HR 5612 IH

1 (A) IN GENERAL.—Subject to subpara2 graph (B), the Secretary of Health and Human

3 Services may not provide for an exception under

4 section 1881(b)(7) of the Social Security Act

5 (42 U.S.C. 1395rr(b)(7)) on or after December

6 31, 2000.

7 (B) SPECIAL RULES FOR 2000.—

8 (i) IN GENERAL.—Any exemption rate

9 under such section 1881(b)(7) in effect on

10 December 31, 2000, shall continue in ef11 fect so long as such rate is greater than

12 the composite rate as updated by the

13 amendment made by paragraph (1).

14 (ii) RESUBMISSION OF CERTAIN AP15 PLICATIONS.—In the case of an application

16 for an exemption rate under such section

17 that was filed by a facility during 2000

18 that was not approved by the Secretary of

19 Health and Human Services, the facility

20 may submit an application for an exemp21 tion rate for that year by not later than

22 July 1, 2001.

23 (b) DEVELOPMENT OF ESRD MARKET BASKET.—

24 (1) DEVELOPMENT.—The Secretary of Health

25 and Human Services shall collect data and develop
164

•HR 5612 IH

1 an ESRD market basket whereby the Secretary can

2 estimate, before the beginning of a year, the percent3 age by which the costs for the year of the mix of

4 labor and nonlabor goods and services included in

5 the ESRD composite rate under section 1881(b)(7)

6 of the Social Security Act (42 U.S.C. 1395rr(b)(7))

7 will exceed the costs of such mix of goods and serv8 ices for the preceding year. In developing such index,

9 the Secretary may take into account measures of

10 changes in—

11 (A) technology used in furnishing dialysis

12 services;

13 (B) the manner or method of furnishing

14 dialysis services; and

15 (C) the amounts by which the payments

16 under such section for all services billed by a

17 facility for a year exceed the aggregate allow18 able audited costs of such services for such fa19 cility for such year.

20 (2) REPORT.—The Secretary of Health and

21 Human Services shall submit to Congress a report

22 on the index developed under paragraph (1) no later

23 than July 1, 2002, and shall include in the report

24 recommendations on the appropriateness of an an25 nual or periodic update mechanism for renal dialysis
165

•HR 5612 IH

1 services under the medicare program under title

2 XVIII of the Social Security Act based on such

3 index.

4 (c) INCLUSION OF ADDITIONAL SERVICES IN COM5 POSITE RATE.—

6 (1) DEVELOPMENT.—The Secretary of Health

7 and Human Services shall develop a system which

8 includes, to the maximum extent feasible, in the

9 composite rate used for payment under section

10 1881(b)(7) of the Social Security Act (42 U.S.C.

11 1395rr(b)(7)), payment for clinical diagnostic lab12 oratory tests and drugs (including drugs paid under

13 section 1881(b)(11)(B) of such Act (42 U.S.C.

14 1395rr(b)(11)(B)) that are routinely used in fur15 nishing dialysis services to medicare beneficiaries but

16 which are currently separately billable by renal dialy17 sis facilities.

18 (2) REPORT.—The Secretary shall include, as

19 part of the report submitted under subsection (b)(2),

20 a report on the system developed under paragraph

21 (1) and recommendations on the appropriateness of

22 incorporating the system into medicare payment for

23 renal dialysis services.

24 (d) GAO STUDY ON ACCESS TO SERVICES.—
166

•HR 5612 IH

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

2 United States shall study access of medicare bene3 ficiaries to renal dialysis services. Such study shall

4 include whether there is a sufficient supply of facili5 ties to furnish needed renal dialysis services, whether

6 medicare payment levels are appropriate, taking into

7 account audited costs of facilities for all services fur8 nished, to ensure continued access to such services,

9 and improvements in access (and quality of care)

10 that may result in the increased use of long nightly

11 and short daily hemodialysis modalities.

12 (2) REPORT.—Not later than January 1, 2003,

13 the Comptroller General shall submit to Congress a

14 report on the study conducted under paragraph (1).

15 SEC. 423. PAYMENT FOR AMBULANCE SERVICES.

16 (a) RESTORATION OF FULL CPI INCREASE FOR

17 2001.—Section 1834(l)(3) (42 U.S.C. 1395m(l)(3)) is

18 amended by striking ‘‘reduced in the case of 2001 and

19 2002’’ each place it appears and inserting ‘‘reduced in the

20 case of 2002’’.

21 (b) MILEAGE PAYMENTS.—Section 1834(l)(2)(E)

22 (42 U.S.C. 1395m(l)(2)(E)) is amended by inserting be23 fore the period at the end the following: ‘‘, except that,

24 beginning on the date on which the Secretary implements

25 such fee schedule, such phase-in shall provide for full pay-
167

•HR 5612 IH

1 ment of any national mileage rate for ambulance services

2 provided by suppliers that are paid by carriers in any of

3 the 50 States where payment by a carrier for such services

4 for all such suppliers in such State did not, prior to the

5 implementation of the fee schedule, include a separate

6 amount for all mileage within the county from which the

7 beneficiary is transported’’.

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

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

10 date on which the Secretary of Health and Human Serv11 ices implements the fee schedule under section 1834(l) of

12 the Social Security Act (42 U.S.C. 1395m(l)).

13 SEC. 424. AMBULATORY SURGICAL CENTERS.

14 (a) DELAY IN IMPLEMENTATION OF PROSPECTIVE

15 PAYMENT SYSTEM.—The Secretary of Health and Human

16 Services may not implement a revised prospective payment

17 system for services of ambulatory surgical facilities under

18 section 1833(i) of the Social Security Act (42 U.S.C.

19 1395l(i)) before January 1, 2002.

20 (b) EXTENDING PHASE-IN TO 4 YEARS.—Section

21 226 of the BBRA (113 Stat. 1501A–354) is amended by

22 striking paragraphs (1) and (2) and inserting the fol23 lowing:

24 ‘‘(1) in the first year of its implementation,

25 only a proportion (specified by the Secretary and not
168

•HR 5612 IH

to exceed 1 1 ⁄4) of the payment for such services shall

2 be made in accordance with such system and the re3 mainder shall be made in accordance with current

4 regulations; and

5 ‘‘(2) in each of the following 2 years a propor6 tion (specified by the Secretary and not to exceed

1⁄2, and 3 7 ⁄4, respectively) of the payment for such

8 services shall be made under such system and the

9 remainder shall be made in accordance with current

10 regulations.’’.

11 (c) DEADLINE FOR USE OF 1999 OR LATER COST

12 SURVEYS.—Section 226 of BBRA (113 Stat. 1501A–354)

13 is amended by adding at the end the following:

14 ‘‘By not later than January 1, 2003, the Secretary shall

15 incorporate data from a 1999 medicare cost survey or a

16 subsequent cost survey for purposes of implementing or

17 revising such system.’’.

18 SEC. 425. FULL UPDATE FOR DURABLE MEDICAL EQUIP19 MENT.

20 (a) IN GENERAL.—Section 1834(a)(14) (42 U.S.C.

21 1395m(a)(14)) is amended—

22 (1) by redesignating subparagraph (D) as sub23 paragraph (F);

24 (2) in subparagraph (C)—
169

•HR 5612 IH

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 subparagraph (C) the fol5 lowing new subparagraphs:

6 ‘‘(D) for 2001, the percentage increase in

7 the Consumer Price Index for all urban con8 sumers (U.S. city average) for the 12-month

9 period ending with June 2000;

10 ‘‘(E) for 2002, 0 percentage points; and’’.

11 (b) CONFORMING AMENDMENTS TO BBRA.—Sub12 section (a) of section 228 of BBRA (113 Stat. 1501A–

13 356) is amended—

14 (1) in the matter preceding paragraph (1), by

15 striking ‘‘for such items’’;

16 (2) in paragraph (1), by inserting ‘‘oxygen and

17 oxygen equipment for’’ after ‘‘(1)’’; and

18 (3) in paragraph (2), by inserting ‘‘all such cov19 ered items for’’ after ‘‘(2)’’.

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

21 subsection (b) shall take effect as if included in the enact22 ment of BBRA.
170

•HR 5612 IH

1 SEC. 426. FULL UPDATE FOR ORTHOTICS AND PROS2 THETICS.

3 Section 1834(h)(4)(A) (42 U.S.C. 1395m(h)(4)(A))

4 is amended—

5 (1) by redesignating clause (vi) as clause (viii);

6 (2) in clause (v)—

7 (A) by striking ‘‘through 2002’’ and insert8 ing ‘‘through 2000’’; and

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

10 (3) by inserting after clause (v) the following

11 new clause:

12 ‘‘(vi) for 2001, the percentage in13 crease in the consumer price index for all

14 urban consumers (U.S. city average) for

15 the 12-month period ending with June

16 2000;

17 ‘‘(vii) for 2002, 1 percent; and’’.

18 SEC. 427. ESTABLISHMENT OF SPECIAL PAYMENT PROVI19 SIONS AND REQUIREMENTS FOR PROS20 THETICS AND CERTAIN CUSTOM FABRICATED

21 ORTHOTIC ITEMS.

22 (a) IN GENERAL.—Section 1834(h)(1) (42 U.S.C.

23 1395m(h)(1)) is amended by adding at the end the fol24 lowing:
171

•HR 5612 IH

1 ‘‘(F) SPECIAL PAYMENT RULES FOR CER2 TAIN PROSTHETICS AND CUSTOM FABRICATED

3 ORTHOTICS.—

4 ‘‘(i) IN GENERAL.—No payment shall

5 be made under this subsection for an item

6 of custom fabricated orthotics described in

7 clause (ii) or for an item of prosthetics un8 less such item is—

9 ‘‘(I) furnished by a qualified

10 practitioner; and

11 ‘‘(II) fabricated by a qualified

12 practitioner or a qualified supplier at

13 a facility that meets such criteria as

14 the Secretary determines appropriate.

15 ‘‘(ii) DESCRIPTION OF CUSTOM FAB16 RICATED ITEM.—

17 ‘‘(I) IN GENERAL.—An item de18 scribed in this clause is an item of

19 custom fabricated orthotics that re20 quires education, training, and experi21 ence to custom fabricate and that is

22 included in a list established by the

23 Secretary in subclause (II). Such an

24 item does not include shoes and shoe

25 inserts.
172

•HR 5612 IH

1 ‘‘(II) LIST OF ITEMS.—The Sec2 retary, in consultation with appro3 priate experts in orthotics (including

4 national organizations representing

5 manufacturers of orthotics), shall es6 tablish and update as appropriate a

7 list of items to which this subpara8 graph applies. No item may be in9 cluded in such list unless the item is

10 individually fabricated for the patient

11 over a positive model of the patient.

12 ‘‘(iii) QUALIFIED PRACTITIONER DE13 FINED.—In this subparagraph, the term

14 ‘qualified practitioner’ means a physician

15 or other individual who—

16 ‘‘(I) is a qualified physical thera17 pist or a qualified occupational thera18 pist;

19 ‘‘(II) in the case of a State that

20 provides for the licensing of orthotics

21 and prosthetics, is licensed in

22 orthotics or prosthetics by the State

23 in which the item is supplied; or

24 ‘‘(III) in the case of a State that

25 does not provide for the licensing of
173

•HR 5612 IH

1 orthotics and prosthetics, is specifi2 cally trained and educated to provide

3 or manage the provision of prosthetics

4 and custom-designed or fabricated

5 orthotics, and is certified by the

6 American Board for Certification in

7 Orthotics and Prosthetics, Inc. or by

8 the Board for Orthotist/Prosthetist

9 Certification, or is credentialed and

10 approved by a program that the Sec11 retary determines, in consultation

12 with appropriate experts in orthotics

13 and prosthetics, has training and edu14 cation standards that are necessary to

15 provide such prosthetics and orthotics.

16 ‘‘(iv) QUALIFIED SUPPLIER DE17 FINED.—In this subparagraph, the term

18 ‘qualified supplier’ means any entity that

19 is accredited by the American Board for

20 Certification in Orthotics and Prosthetics,

21 Inc. or by the Board for Orthotist/Pros22 thetist Certification, or accredited and ap23 proved by a program that the Secretary

24 determines has accreditation and approval
174

•HR 5612 IH

1 standards that are essentially equivalent to

2 those of such Board.’’.

3 (b) EFFECTIVE DATE.—Not later than 1 year after

4 the date of the enactment of this Act, the Secretary of

5 Health and Human Services shall promulgate revised reg6 ulations to carry out the amendment made by subsection

7 (a) using a negotiated rulemaking process under sub8 chapter III of chapter 5 of title 5, United States Code.

9 (c) GAO STUDY AND REPORT.—

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

11 United States shall conduct a study on HCFA Rul12 ing 96–1, issued on September 1, 1996, with respect

13 to distinguishing orthotics from durable medical

14 equipment under the medicare program under title

15 XVIII of the Social Security Act. The study shall as16 sess the following matters:

17 (A) The compliance of the Secretary of

18 Health and Human Services with the Adminis19 trative Procedures Act (under chapter 5 of title

20 5, United States Code) in making such ruling.

21 (B) The potential impact of such ruling on

22 the health care furnished to medicare bene23 ficiaries under the medicare program, especially

24 those beneficiaries with degenerative musculo25 skeletal conditions.
175

•HR 5612 IH

1 (C) The potential for fraud and abuse

2 under the medicare program if payment were

3 provided for orthotics used as a component of

4 durable medical equipment only when made

5 under the special payment provision for certain

6 prosthetics and custom fabricated orthotics

7 under section 1834(h)(1)(F) of the Social Secu8 rity Act, as added by subsection (a) and fur9 nished by qualified practitioners under that sec10 tion.

11 (D) The impact on payments under titles

12 XVIII and XIX of the Social Security Act if

13 such ruling were overturned.

14 (2) REPORT.—Not later than 6 months after

15 the date of the enactment of this Act, the Comp16 troller General shall submit to Congress a report on

17 the study conducted under paragraph (1).

18 SEC. 428. REPLACEMENT OF PROSTHETIC DEVICES AND

19 PARTS.

20 (a) IN GENERAL.—Section 1834(h)(1) (42 U.S.C.

21 1395m(h)(1)), as amended by section 427(a), is further

22 amended by adding at the end the following new subpara23 graph:

24 ‘‘(G) REPLACEMENT OF PROSTHETIC DE25 VICES AND PARTS.—
176

•HR 5612 IH

1 ‘‘(i) IN GENERAL.—Payment shall be

2 made for the replacement of prosthetic de3 vices which are artificial limbs, or for the

4 replacement of any part of such devices,

5 without regard to continuous use or useful

6 lifetime restrictions if an ordering physi7 cian determines that the provision of a re8 placement device, or a replacement part of

9 such a device, is necessary because of any

10 of the following:

11 ‘‘(I) A change in the physio12 logical condition of the patient.

13 ‘‘(II) An irreparable change in

14 the condition of the device, or in a

15 part of the device.

16 ‘‘(III) The condition of the de17 vice, or the part of the device, re18 quires repairs and the cost of such re19 pairs would be more than 60 percent

20 of the cost of a replacement device, or,

21 as the case may be, of the part being

22 replaced.

23 ‘‘(ii) CONFIRMATION MAY BE RE24 QUIRED IF REPLACEMENT DEVICE OR

25 PART IS LESS THAN 3 YEARS OLD.—If a
177

•HR 5612 IH

1 physician determines that a replacement

2 device, or a replacement part, is necessary

3 pursuant to clause (i)—

4 ‘‘(I) such determination shall be

5 controlling; and

6 ‘‘(II) such replacement device or

7 part shall be deemed to be reasonable

8 and necessary for purposes of section

9 1862(a)(1)(A);

10 except that if the device, or part, being re11 placed is less than 3 years old (calculated

12 from the date on which the beneficiary

13 began to use the device or part), the Sec14 retary may also require confirmation of ne15 cessity of the replacement device, or, as the

16 case may be, the replacement part.’’.

17 (b) PREEMPTION OF RULE.—The provisions of sec18 tion 1834(h)(1)(G) as added by subsection (a) shall super19 sede any rule that as of the date of the enactment of this

20 Act may have applied a 5-year replacement rule with re21 gard to prosthetic devices.

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

23 subsection (a) shall apply to items replaced on or after

24 April 1, 2001.
178

•HR 5612 IH

1 SEC. 429. REVISED PART B PAYMENT FOR DRUGS AND

2 BIOLOGICALS AND RELATED SERVICES.

3 (a) RECOMMENDATIONS FOR REVISED PAYMENT

4 METHODOLOGY FOR DRUGS AND BIOLOGICALS.—

5 (1) STUDY.—

6 (A) IN GENERAL.—The Comptroller Gen7 eral of the United States shall conduct a study

8 on the reimbursement for drugs and biologicals

9 under the current medicare payment method10 ology (provided under section 1842(o) of the

11 Social Security Act (42 U.S.C. 1395u(o)) and

12 for related services under part B of title XVIII

13 of such Act. In the study, the Comptroller Gen14 eral shall—

15 (i) identify the average prices at

16 which such drugs and biologicals are ac17 quired by physicians and other suppliers;

18 (ii) quantify the difference between

19 such average prices and the reimbursement

20 amount under such section; and

21 (iii) determine the extent to which (if

22 any) payment under such part is adequate

23 to compensate physicians, providers of

24 services, or other suppliers of such drugs

25 and biologicals for costs incurred in the ad-
179

•HR 5612 IH

1 ministration, handling, or storage of such

2 drugs or biologicals.

3 (B) CONSULTATION.—In conducting the

4 study under subparagraph (A), the Comptroller

5 General shall consult with physicians, providers

6 of services, and suppliers of drugs and

7 biologicals under the medicare program under

8 title XVIII of such Act, as well as other organi9 zations involved in the distribution of such

10 drugs and biologicals to such physicians, pro11 viders of services, and suppliers.

12 (2) REPORT.—Not later than 9 months after

13 the date of the enactment of this Act, the Comp14 troller General shall submit to Congress and to the

15 Secretary of Health and Human Services a report

16 on the study conducted under this subsection, and

17 shall include in such report recommendations for re18 vised payment methodologies described in paragraph

19 (3).

20 (3) RECOMMENDATIONS FOR REVISED PAY21 MENT METHODOLOGIES.—

22 (A) IN GENERAL.—The Comptroller Gen23 eral shall provide specific recommendations for

24 revised payment methodologies for reimburse25 ment for drugs and biologicals and for related
180

•HR 5612 IH

1 services under the medicare program. The

2 Comptroller General may include in the

3 recommendations—

4 (i) proposals to make adjustments

5 under subsection (c) of section 1848 of the

6 Social Security Act (42 U.S.C. 1395w–4)

7 for the practice expense component of the

8 physician fee schedule under such section

9 for the costs incurred in the administra10 tion, handling, or storage of certain cat11 egories of such drugs and biologicals, if ap12 propriate; and

13 (ii) proposals for new payments to

14 providers of services or suppliers for such

15 costs, if appropriate.

16 (B) ENSURING PATIENT ACCESS TO

17 CARE.—In making recommendations under this

18 paragraph, the Comptroller General shall en19 sure that any proposed revised payment meth20 odology is designed to ensure that medicare

21 beneficiaries continue to have appropriate ac22 cess to health care services under the medicare

23 program.
181

•HR 5612 IH

1 (C) MATTERS CONSIDERED.—In making

2 recommendations under this paragraph, the

3 Comptroller General shall consider—

4 (i) the method and amount of reim5 bursement for similar drugs and biologicals

6 made by large group health plans;

7 (ii) as a result of any revised payment

8 methodology, the potential for patients to

9 receive inpatient or outpatient hospital

10 services in lieu of services in a physician’s

11 office; and

12 (iii) the effect of any revised payment

13 methodology on the delivery of drug thera14 pies by hospital outpatient departments.

15 (D) COORDINATION WITH BBRA STUDY.—

16 In making recommendations under this para17 graph, the Comptroller General shall conclude

18 and take into account the results of the study

19 provided for under section 213(a) of BBRA

20 (113 Stat. 1501A–350).

21 (b) IMPLEMENTATION OF NEW PAYMENT METHOD22 OLOGY.—

23 (1) IN GENERAL.—Notwithstanding any other

24 provision of law, based on the recommendations con25 tained in the report under subsection (a), the Sec-
182

•HR 5612 IH

1 retary of Health and Human Services, subject to

2 paragraph (2), shall revise the payment methodology

3 under section 1842(o) of the Social Security Act (42

4 U.S.C. 1395u(o)) for drugs and biologicals furnished

5 under part B of the medicare program. To the ex6 tent the Secretary determines appropriate, the Sec7 retary may provide for the adjustments to payments

8 amounts referred to in subsection (a)(3)(A)(i) or ad9 ditional payments referred to in subsection

10 (a)(2)(A)(ii).

11 (2) LIMITATION.—In revising the payment

12 methodology under paragraph (1), in no case may

13 the estimated aggregate payments for drugs and

14 biologicals under the revised system (including addi15 tional payments referred to in subsection

16 (a)(3)(A)(ii)) exceed the aggregate amount of pay17 ment for such drugs and biologicals, as projected by

18 the Secretary, that would have been made under the

19 payment methodology in effect under such section

20 1842(o).

21 (c) TEMPORARY INJUNCTION AGAINST REDUCTIONS

22 IN PAYMENT RATES.—Notwithstanding any other provi23 sion of law, the Administrator of the Health Care Financ24 ing Administration may not directly or indirectly increase

25 or decrease the rates of reimbursement (in effect on Octo-
183

•HR 5612 IH

1 ber 1, 2000) for drugs and biologicals under the current

2 medicare payment methodology (provided under section

3 1842(o) of such Act (42 U.S.C. 1395u(o)) until such time

4 as the Secretary has reviewed the report submitted under

5 subsection (a)(2).

6 SEC. 430. QUALIFICATIONS FOR COMMUNITY MENTAL

7 HEALTH CENTERS.

8 (a) MEDICARE PROGRAM.—Section 1861(ff)(3)(B)

9 (42 U.S.C. 1395x(ff)(3)(B)) is amended by striking ‘‘enti10 ty’’ and all that follows and inserting the following: ‘‘entity

11 that—

12 ‘‘(i)(I) provides the mental health services de13 scribed in section 1913(c)(1) of the Public Health

14 Service Act; or

15 ‘‘(II) in the case of an entity operating in a

16 State that by law precludes the entity from pro17 viding itself the service described in subparagraph

18 (E) of such section, provides for such service by con19 tract with an approved organization or entity (as de20 termined by the Secretary);

21 ‘‘(ii) meets applicable licensing or certification

22 requirements for community mental health centers

23 in the State in which it is located; and

24 ‘‘(iii) meets such additional conditions as the

25 Secretary shall specify to ensure (I) the health and
184

•HR 5612 IH

1 safety of individuals being furnished such services,

2 (II) the effective and efficient furnishing of such

3 services, and (III) the compliance of such entity with

4 the criteria described in section 1931(c)(1) of the

5 Public Health Service Act.’’.

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

7 subsection (a) applies with respect to community mental

8 health centers with respect to services furnished on or

9 after the first day of the third month beginning after the

10 date of the enactment of this Act.

11 SEC. 431. MODIFICATION OF MEDICARE BILLING REQUIRE12 MENTS FOR CERTAIN INDIAN PROVIDERS.

13 (a) IN GENERAL.—Section 1880(a) (42 U.S.C.

14 1395qq(a)) is amended by adding at the end the following

15 new sentence: ‘‘A hospital or a free-standing ambulatory

16 care clinic (as defined by the Secretary), whether operated

17 by the Indian Health Service or by an Indian tribe or trib18 al organization (as those terms are defined in section 4

19 of the Indian Health Care Improvement Act), shall be eli20 gible for payments for services for which payment is made

21 pursuant to section 1848, notwithstanding sections

22 1814(c) and 1835(d), if and for so long as it meets all

23 of the requirements which are applicable generally to such

24 payments, services, hospitals, and clinics.’’.
185

•HR 5612 IH

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

2 this section shall apply to services furnished on or after

3 January 1, 2001.

4 SEC. 432. GAO STUDY ON COVERAGE OF SURGICAL FIRST

5 ASSISTING SERVICES OF CERTIFIED REG6 ISTERED NURSE FIRST ASSISTANTS.

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

8 States shall conduct a study on the effect on the medicare

9 program under title XVIII of the Social Security Act and

10 on medicare beneficiaries of coverage under the program

11 of surgical first assisting services of certified registered

12 nurse first assistants. The Comptroller General shall con13 sider the following when conducting the study:

14 (1) Any impact on the quality of care furnished

15 to medicare beneficiaries by reason of such coverage.

16 (2) Appropriate education and training require17 ments for certified registered nurse first assistants

18 who furnish such first assisting services.

19 (3) Appropriate rates of payment under the

20 program to such certified registered nurse first as21 sistants for furnishing such services, taking into ac22 count the costs of compensation, overhead, and su23 pervision attributable to certified registered nurse

24 first assistants.
186

•HR 5612 IH

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

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

3 submit to Congress a report on the study conducted under

4 subsection (a).

5 SEC. 433. MEDPAC STUDY AND REPORT ON MEDICARE RE6 IMBURSEMENT FOR SERVICES PROVIDED BY

7 CERTAIN PROVIDERS.

8 (a) STUDY.—The Medicare Payment Advisory Com9 mission shall conduct a study on the appropriateness of

10 the current payment rates under the medicare program

11 under title XVIII of the Social Security Act for services

12 provided by a—

13 (1) certified nurse-midwife (as defined in sub14 section (gg)(2) of section 1861 of such Act (42

15 U.S.C. 1395x);

16 (2) physician assistant (as defined in subsection

17 (aa)(5)(A) of such section);

18 (3) nurse practitioner (as defined in such sub19 section); and

20 (4) clinical nurse specialist (as defined in sub21 section (aa)(5)(B) of such section).

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

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

24 submit to Congress a report on the study conducted under

25 subsection (a), together with any recommendations for leg-
187

•HR 5612 IH

1 islation that the Commission determines to be appropriate

2 as a result of such study.

3 SEC. 434. MEDPAC STUDY AND REPORT ON MEDICARE COV4 ERAGE OF SERVICES PROVIDED BY CERTAIN

5 NONPHYSICIAN PROVIDERS.

6 (a) STUDY.—

7 (1) IN GENERAL.—The Medicare Payment Ad8 visory Commission shall conduct a study to deter9 mine the appropriateness of providing coverage

10 under the medicare program under title XVIII of the

11 Social Security Act for services provided by a—

12 (A) surgical technologist;

13 (B) marriage counselor;

14 (C) marriage and family therapist;

15 (D) pastoral care counselor; and

16 (E) licensed professional counselor of men17 tal health.

18 (2) COSTS TO PROGRAM.—The study shall con19 sider the short-term and long-term benefits, and

20 costs to the medicare program, of providing the cov21 erage described in paragraph (1).

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

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

24 submit to Congress a report on the study conducted under

25 subsection (a), together with any recommendations for leg-
188

•HR 5612 IH

1 islation that the Commission determines to be appropriate

2 as a result of such study.

3 SEC. 435. GAO STUDY AND REPORT ON THE COSTS OF

4 EMERGENCY AND MEDICAL TRANSPOR5 TATION SERVICES.

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

7 States shall conduct a study on the costs of providing

8 emergency and medical transportation services across the

9 range of acuity levels of conditions for which such trans10 portation services are provided.

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

12 date of the enactment of this Act, the Comptroller General

13 shall submit to Congress a report on the study conducted

14 under subsection (a), together with recommendations for

15 any changes in methodology or payment level necessary

16 to fairly compensate suppliers of emergency and medical

17 transportation services and to ensure the access of bene18 ficiaries under the medicare program under title XVIII of

19 the Social Security Act.

20 SEC. 436. GAO STUDIES AND REPORTS ON MEDICARE PAY21 MENTS.

22 (a) GAO STUDY ON HCFA POST-PAYMENT AUDIT

23 PROCESS.—

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

25 United States shall conduct a study on the post-pay-
189

•HR 5612 IH

1 ment audit process under the medicare program

2 under title XVIII of the Social Security Act as such

3 process applies to physicians, including the proper

4 level of resources that the Health Care Financing

5 Administration should devote to educating physi6 cians regarding—

7 (A) coding and billing;

8 (B) documentation requirements; and

9 (C) the calculation of overpayments.

10 (2) REPORT.—Not later than 18 months after

11 the date of the enactment of this Act, the Comp12 troller General shall submit to Congress a report on

13 the study conducted under paragraph (1) together

14 with specific recommendations for changes or im15 provements in the post-payment audit process de16 scribed in such paragraph.

17 (b) GAO STUDY ON ADMINISTRATION AND OVER18 SIGHT.—

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

20 United States shall conduct a study on the aggre21 gate effects of regulatory, audit, oversight, and pa22 perwork burdens on physicians and other health care

23 providers participating in the medicare program

24 under title XVIII of the Social Security Act.
190

•HR 5612 IH

1 (2) REPORT.—Not later than 18 months after

2 the date of the enactment of this Act, the Comp3 troller General shall submit to Congress a report on

4 the study conducted under paragraph (1) together

5 with recommendations regarding any area in

6 which—

7 (A) a reduction in paperwork, an ease of

8 administration, or an appropriate change in

9 oversight and review may be accomplished; or

10 (B) additional payments or education are

11 needed to assist physicians and other health

12 care providers in understanding and complying

13 with any legal or regulatory requirements.

14 SEC. 437. MEDPAC STUDY ON ACCESS TO OUTPATIENT PAIN

15 MANAGEMENT SERVICES.

16 (a) STUDY.—The Medicare Payment Advisory Com17 mission shall conduct a study on the barriers to coverage

18 and payment for outpatient interventional pain medicine

19 procedures under the medicare program under title XVIII

20 of the Social Security Act. Such study shall examine—

21 (1) the specific barriers imposed under the

22 medicare program on the provision of pain manage23 ment procedures in hospital outpatient departments,

24 ambulatory surgery centers, and physicians’ offices;

25 and
191

•HR 5612 IH

1 (2) the consistency of medicare payment poli2 cies for pain management procedures in those dif3 ferent settings.

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

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

6 to Congress a report on the study.

7 TITLE V—PROVISIONS

8 RELATING TO PARTS A AND B

9 Subtitle A—Home Health Services

10 SEC. 501. 2-YEAR ADDITIONAL DELAY IN APPLICATION OF

11 15 PERCENT REDUCTION ON PAYMENT LIM12 ITS FOR HOME HEALTH SERVICES.

13 (a) IN GENERAL.—Section 1895(b)(3)(A)(i) (42

14 U.S.C. 1395fff(b)(3)(A)(i)) is amended—

15 (1) by redesignating subclause (II) as subclause

16 (III);

17 (2) in subclause (III), as redesignated, by strik18 ing ‘‘described in subclause (I)’’ and inserting ‘‘de19 scribed in subclause (II)’’; and

20 (3) by inserting after subclause (I) the fol21 lowing new subclause:

22 ‘‘(II) For each of the two 12-

23 month periods beginning after the pe24 riod described in subclause (I), such

25 amount (or amounts) shall be equal to
192

•HR 5612 IH

1 the amount (or amounts) determined

2 under subclause (I), updated under

3 subparagraph (B).’’.

4 (b) CHANGE IN REPORT.—Section 302(c) of BBRA

5 (113 Stat. 1501A–360) is amended—

6 (1) by striking ‘‘Not later than’’ and all that

7 follows through ‘‘(42 U.S.C. 1395fff)’’ and inserting

8 ‘‘Not later than April 1, 2003’’; and

9 (2) by striking ‘‘Secretary’’ and inserting

10 ‘‘Comptroller General of the United States’’.

11 (c) CASE MIX ADJUSTMENT CORRECTIONS.—

12 (1) IN GENERAL.—Section 1895(b)(3)(B) (42

13 U.S.C. 1395fff(b)(3)(B)) is amended by adding at

14 the end the following new clause:

15 ‘‘(iv) ADJUSTMENT FOR CASE MIX

16 CHANGES.—Insofar as the Secretary deter17 mines that the adjustments under para18 graph (4)(A)(i) for a previous fiscal year

19 (or estimates that such adjustments for a

20 future fiscal year) did (or are likely to) re21 sult in a change in aggregate payments

22 under this subsection during the fiscal year

23 that are a result of changes in the coding

24 or classification of different units of serv25 ices that do not reflect real changes in case
193

•HR 5612 IH

1 mix, the Secretary may adjust the stand2 ard prospective payment amount (or

3 amounts) under paragraph (3) for subse4 quent fiscal years so as to eliminate the ef5 fect of such coding or classification

6 changes.’’.

7 (2) EFFECTIVE DATE.—The amendment made

8 by paragraph (1) applies to episodes concluding on

9 or after October 1, 2001.

10 SEC. 502. RESTORATION OF FULL HOME HEALTH MARKET

11 BASKET UPDATE FOR HOME HEALTH SERV12 ICES FOR FISCAL YEAR 2001.

13 (a) IN GENERAL.—Section 1861(v)(1)(L)(x) (42

14 U.S.C. 1395x(v)(1)(L)(x)) is amended—

15 (1) by striking ‘‘2001,’’; and

16 (2) by adding at the end the following: ‘‘With

17 respect to cost reporting periods beginning during

18 fiscal year 2001, the update to any limit under this

19 subparagraph shall be the home health market bas20 ket index.’’.

21 (b) SPECIAL RULE FOR PAYMENT FOR FISCAL YEAR

22 2001 BASED ON ADJUSTED PROSPECTIVE PAYMENT

23 AMOUNTS.—

24 (1) IN GENERAL.—Notwithstanding the amend25 ments made by subsection (a), for purposes of mak-
194

•HR 5612 IH

1 ing payments under section 1895(b) of the Social

2 Security Act (42 U.S.C. 1395fff(b)) for home health

3 services for fiscal year 2001, the Secretary of Health

4 and Human Services shall—

5 (A) with respect to episodes and visits end6 ing on or after October 1, 2000, and before

7 April 1, 2001, use the final standardized and

8 budget neutral prospective payment amounts

9 for 60 day episodes and standardized average

10 per visit amounts for fiscal year 2001 as pub11 lished by the Secretary in the Federal Register

12 of July 3, 2000 (65 Federal Register 41128–

13 41214); and

14 (B) with respect to episodes and visits end15 ing on or after April 1, 2001, and before Octo16 ber 1, 2001, use such amounts increased by 2.2

17 percent.

18 (2) NO EFFECT ON OTHER PAYMENTS OR DE19 TERMINATIONS.—The Secretary shall not take the

20 provisions of paragraph (1) into account for pur21 poses of payments, determinations, or budget neu22 trality adjustments under section 1895 of the Social

23 Security Act.
195

•HR 5612 IH

1 SEC. 503. TEMPORARY TWO-MONTH EXTENSION OF PERI2 ODIC INTERIM PAYMENTS.

3 (a) TEMPORARY EXTENSION.—Notwithstanding sub4 section (d) of section 4603 of BBA (42 U.S.C. 1395fff

5 note), as amended by section 5101(c)(2) of the Tax and

6 Trade Relief Extension Act of 1998 (contained in division

7 J of Public Law 105–277), the amendments made by sub8 section (b) of such section 4603 shall not take effect until

9 December 1, 2000, in the case of a home health agency

10 that was receiving periodic interim payments under sec11 tion 1815(e)(2) as of September 30, 2000.

12 (b) PAYMENT RULE.—The amount of such periodic

13 interim payment made to a home health agency by reason

14 of subsection (a) during each of November and December,

15 2000, shall be equal to the amount of such payment made

16 to the agency in their last full monthly periodic interim

17 payment. Such amount of payment shall be included in

18 the tentative settlement of the last cost report for the

19 home health agency under the payment system in effect

20 prior to the implementation of the prospective payment

21 system under section 1895(b) of the Social Security Act

22 (42 U.S.C. 1395fff(b)).

23 SEC. 504. USE OF TELEHEALTH IN DELIVERY OF HOME

24 HEALTH SERVICES.

25 Section 1895 (42 U.S.C. 1395fff) is amended by add26 ing at the end the following new subsection:
196

•HR 5612 IH

1 ‘‘(e) CONSTRUCTION RELATED TO HOME HEALTH

2 SERVICES.—

3 ‘‘(1) TELECOMMUNICATIONS.—Nothing in this

4 section shall be construed as preventing a home

5 health agency furnishing a home health unit of serv6 ice for which payment is made under the prospective

7 payment system established by this section for such

8 units of service from furnishing services via a tele9 communication system if such services—

10 ‘‘(A) do not substitute for in-person home

11 health services ordered as part of a plan of care

12 certified by a physician pursuant to section

13 1814(a)(2)(C) or section 1835(a)(2)(A); and

14 ‘‘(B) are not considered a home health

15 visit for purposes of eligibility or payment

16 under this title.

17 ‘‘(2) PHYSICIAN CERTIFICATION.—Nothing in

18 this section shall be construed as waiving the re19 quirement for a physician certification under section

20 1814(a)(2)(C) or section 1835(a)(2)(A) of such Act

21 (42 U.S.C. 1395f(a)(2)(C), 1395n(a)(2)(A)) for the

22 payment for home health services, whether or not

23 furnished via a telecommunications system.’’.
197

•HR 5612 IH

1 SEC. 505. STUDY ON COSTS TO HOME HEALTH AGENCIES

2 OF PURCHASING NONROUTINE MEDICAL

3 SUPPLIES.

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

5 States shall conduct a study on variations in prices paid

6 by home health agencies furnishing home health services

7 under the medicare program under title XVIII of the So8 cial Security Act in purchasing nonroutine medical sup9 plies, including ostomy supplies, and volumes if such sup10 plies used, shall determine the effect (if any) of variations

11 on prices and volumes in the provision of such services.

12 (b) REPORT.—Not later than October 1, 2001, the

13 Comptroller General shall submit to Congress a report on

14 the study conducted under subsection (a), and shall in15 clude in the report recommendations respecting whether

16 payment for nonroutine medical supplies furnished in con17 nection with home health services should be made sepa18 rately from the prospective payment system for such serv19 ices.

20 SEC. 506. TREATMENT OF BRANCH OFFICES; GAO STUDY

21 ON SUPERVISION OF HOME HEALTH CARE

22 PROVIDED IN ISOLATED RURAL AREAS.

23 (a) TREATMENT OF BRANCH OFFICES.—

24 (1) IN GENERAL.—Notwithstanding any other

25 provision of law, in determining for purposes of title

26 XVIII of the Social Security Act whether an office
198

•HR 5612 IH

1 of a home health agency constitutes a branch office

2 or a separate home health agency, neither the time

3 nor distance between a parent office of the home

4 health agency and a branch office shall be the sole

5 determinant of a home health agency’s branch office

6 status.

7 (2) CONSIDERATION OF FORMS OF TECH8 NOLOGY IN DEFINITION OF SUPERVISION.—The Sec9 retary of Health and Human Services may include

10 forms of technology in determining what constitutes

11 ‘‘supervision’’ for purposes of determining a home

12 health agency’s branch office status under para13 graph (1).

14 (b) GAO STUDY.—

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

16 United States shall conduct a study of the provision

17 of adequate supervision to maintain quality of home

18 health services delivered under the medicare pro19 gram under title XVIII of the Social Security Act in

20 isolated rural areas. The study shall evaluate the

21 methods that home health agency branches and

22 subunits use to maintain adequate supervision in the

23 delivery of services to clients residing in those areas,

24 how these methods of supervision compare to re25 quirements that subunits independently meet medi-
199

•HR 5612 IH

1 care conditions of participation, and the resources

2 utilized by subunits to meet such conditions.

3 (2) REPORT.—Not later than January 1, 2002,

4 the Comptroller General shall submit to Congress a

5 report on the study conducted under paragraph (1).

6 The report shall include recommendations on wheth7 er exceptions are needed for subunits and branches

8 of home health agencies under the medicare program

9 to maintain access to the home health benefit or

10 whether alternative policies should be developed to

11 assure adequate supervision and access and rec12 ommendations on whether a national standard for

13 supervision is appropriate.

14 SEC. 507. CLARIFICATION OF THE HOMEBOUND DEFINI15 TION UNDER THE MEDICARE HOME HEALTH

16 BENEFIT.

17 (a) CLARIFICATION.—

18 (1) IN GENERAL.—Sections 1814(a) and

19 1835(a) (42 U.S.C. 1395f(a) and 1395n(a)) are

20 each amended—

21 (A) in the last sentence, by striking ‘‘, and

22 that absences of the individual from home are

23 infrequent or of relatively short duration, or are

24 attributable to the need to receive medical

25 treatment’’; and
200

•HR 5612 IH

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

2 sentences: ‘‘Any absence of an individual from

3 the home attributable to the need to receive

4 health care treatment, including regular ab5 sences for the purpose of participating in thera6 peutic, psychosocial, or medical treatment in an

7 adult day-care program that is licensed or cer8 tified by a State, or accredited, to furnish adult

9 day-care services in the State shall not dis10 qualify an individual from being considered to

11 be ‘confined to his home’. Any other absence of

12 an individual from the home shall not so dis13 qualify an individual if the absence is of infre14 quent or of relatively short duration. For pur15 poses of the preceding sentence, any absence for

16 the purpose of attending a religious service

17 shall be deemed to be an absence of infrequent

18 or short duration.’’.

19 (2) EFFECTIVE DATE.—The amendments made

20 by paragraph (1) shall apply to items and services

21 provided on or after the date of enactment of this

22 Act.

23 (b) STUDY.—

24 (1) IN GENERAL.—The Comptroller General of

25 the United States shall conduct an evaluation of the
201

•HR 5612 IH

1 effect of the amendment on the cost of and access

2 to home health services under the medicare program

3 under title XVIII of the Social Security Act.

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

5 date of the enactment of this Act, the Comptroller

6 General shall submit to Congress a report on the

7 study conducted under paragraph (1).

8 SEC. 508. TEMPORARY INCREASE FOR HOME HEALTH

9 SERVICES FURNISHED IN A RURAL AREA.

10 (a) INCREASE FOR 2001 AND 2002.—In the case of

11 a unit of home health service furnished in a rural area

12 (as defined in section 1886(d)(2)(D) of the Social Security

13 Act (42 U.S.C. 1395ww(d)(2)(D))) during 2001 or 2002,

14 the Secretary of Health and Human Services (in this sec15 tion referred to as the ‘‘Secretary’’) shall increase the pay16 ment amount otherwise made under section 1895 of such

17 Act (42 U.S.C. 1395fff) for such unit of service by 10

18 percent.

19 (b) ADDITIONAL PAYMENT NOT BUILT INTO THE

20 BASE.—The Secretary shall not include any additional

21 payment made under subsection (a) in updating the stand22 ard prospective payment amount (or amounts) applicable

23 to units of home health services furnished during a period,

24 as increased by the home health applicable increase per25 centage for the fiscal year involved under section
202

•HR 5612 IH

1 1895(b)(3)(B) of the Social Security Act (42 U.S.C.

2 1395fff(b)(3)(B)).

3 (c) WAIVING BUDGET NEUTRALITY.—The Secretary

4 shall not reduce the standard prospective payment amount

5 (or amounts) under section 1895 of the Social Security

6 Act (42 U.S.C. 1395fff) applicable to units of home health

7 services furnished during a period to offset the increase

8 in payments resulting from the application of subsection

9 (a).

10 Subtitle B—Direct Graduate

11 Medical Education

12 SEC. 511. INCREASE IN FLOOR FOR DIRECT GRADUATE

13 MEDICAL EDUCATION PAYMENTS.

14 Section 1886(h)(2)(D)(iii) (42 U.S.C.

15 1395ww(h)(2)(D)(iii)) is amended—

16 (1) in the heading, by striking ‘‘IN FISCAL YEAR

17 2001 AT 70 PERCENT OF’’ and inserting ‘‘FOR’’; and

18 (2) by inserting after ‘‘70 percent’’ the fol19 lowing: ‘‘, and for the cost reporting period begin20 ning during fiscal year 2002 shall not be less than

21 85 percent,’’.
203

•HR 5612 IH

1 SEC. 512. CHANGE IN DISTRIBUTION FORMULA FOR

2 MEDICARE+CHOICE-RELATED NURSING AND

3 ALLIED HEALTH EDUCATION COSTS.

4 (a) IN GENERAL.—Section 1886(l)(2)(C) (42 U.S.C.

5 1395ww(l)(2)(C)) is amended by striking all that follows

6 ‘‘multiplied by’’ and inserting the following: ‘‘the ratio

7 of—

8 ‘‘(i) the product of (I) the Secretary’s

9 estimate of the ratio of the amount of pay10 ments made under section 1861(v) to the

11 hospital for nursing and allied health edu12 cation activities for the hospital’s cost re13 porting period ending in the second pre14 ceding fiscal year, to the hospital’s total in15 patient days for such period, and (II) the

16 total number of inpatient days (as estab17 lished by the Secretary) for such period

18 which are attributable to services furnished

19 to individuals who are enrolled under a

20 risk sharing contract with an eligible orga21 nization under section 1876 and who are

22 entitled to benefits under part A or who

23 are enrolled with a Medicare+Choice orga24 nization under part C; to
204

•HR 5612 IH

1 ‘‘(ii) the sum of the products deter2 mined under clause (i) for such cost re3 porting periods.’’.

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

5 subsection (a) applies to portions of cost reporting periods

6 occurring on or after January 1, 2001.

7 Subtitle C—Changes in Medicare

8 Coverage and Appeals Process

9 SEC. 521. REVISIONS TO MEDICARE APPEALS PROCESS.

10 (a) CONDUCT OF RECONSIDERATIONS OF DETER11 MINATIONS BY INDEPENDENT CONTRACTORS.—Section

12 1869 (42 U.S.C. 1395ff) is amended to read as follows:

13 ‘‘DETERMINATIONS; APPEALS

14 ‘‘SEC. 1869. (a) INITIAL DETERMINATIONS.—

15 ‘‘(1) PROMULGATIONS OF REGULATIONS.—The

16 Secretary shall promulgate regulations and make ini17 tial determinations with respect to benefits under

18 part A or part B in accordance with those regula19 tions for the following:

20 ‘‘(A) The initial determination of whether

21 an individual is entitled to benefits under such

22 parts.

23 ‘‘(B) The initial determination of the

24 amount of benefits available to the individual

25 under such parts.
205

•HR 5612 IH

1 ‘‘(C) Any other initial determination with

2 respect to a claim for benefits under such parts,

3 including an initial determination by the Sec4 retary that payment may not be made, or may

5 no longer be made, for an item or service under

6 such parts, an initial determination made by a

7 utilization and quality control peer review orga8 nization under section 1154(a)(2), and an ini9 tial determination made by an entity pursuant

10 to a contract (other than a contract under sec11 tion 1852) with the Secretary to administer

12 provisions of this title or title XI.

13 ‘‘(2) DEADLINES FOR MAKING INITIAL DETER14 MINATIONS.—

15 ‘‘(A) IN GENERAL.—Subject to subpara16 graph (B), in promulgating regulations under

17 paragraph (1), initial determinations shall be

18 concluded by not later than the 45-day period

19 beginning on the date the fiscal intermediary or

20 the carrier, as the case may be, receives a claim

21 for benefits from an individual as described in

22 paragraph (1). Notice of such determination

23 shall be mailed to the individual filing the claim

24 before the conclusion of such 45-day period.
206

•HR 5612 IH

1 ‘‘(B) CLEAN CLAIMS.—Subparagraph (A)

2 shall not apply with respect to any claim that

3 does not meet the requirements of section

4 1816(c)(2) or section 1842(c)(2).

5 ‘‘(3) INTERNAL REDETERMINATIONS.—

6 ‘‘(A) IN GENERAL.—In promulgating regu7 lations under paragraph (1) with respect to ini8 tial determinations, such regulations shall pro9 vide for a fiscal intermediary or a carrier to

10 make a redetermination with respect to a claim

11 for benefits that is denied in whole or in part.

12 ‘‘(B) LIMITATIONS.—

13 ‘‘(i) APPEALS RIGHTS.—No initial de14 termination may be reconsidered or ap15 pealed under subsection (b) unless the fis16 cal intermediary or carrier has made a re17 determination of that initial determination

18 under this paragraph.

19 ‘‘(ii) DECISION MAKER.—No redeter20 mination may be made by any individual

21 involved in the initial determination.

22 ‘‘(C) DEADLINES.—

23 ‘‘(i) FILING FOR REDETERMINA24 TION.—A redetermination under subpara25 graph (A) shall be available only if notice
207

•HR 5612 IH

1 is filed with the Secretary to request the

2 redetermination by not later than the end

3 of the 180-day period beginning on the

4 date the individual receives notice of the

5 initial determination under paragraph (2).

6 ‘‘(ii) CONCLUDING REDETERMINA7 TIONS.—Except as provided in subsection

8 (d), redeterminations shall be made and

9 notice of the redetermination shall be pro10 vided in accordance with the medical needs

11 of the individual, but no later than 30 days

12 after the fiscal intermediary or the carrier,

13 as the case may be, receives a request for

14 a redetermination.

15 ‘‘(D) CONSTRUCTION.—For purposes of

16 the succeeding provisions of this section a rede17 termination under this paragraph shall be con18 sidered to be part of the initial determination.

19 ‘‘(b) APPEAL RIGHTS.—

20 ‘‘(1) IN GENERAL.—

21 ‘‘(A) RECONSIDERATION OF INITIAL DE22 TERMINATION.—(i) Subject to subparagraph

23 (D), any individual dissatisfied with any initial

24 determination under subsection (a)(1) shall be

25 entitled to reconsideration of the determination,
208

•HR 5612 IH

1 and, subject to subparagraphs (D) and (E), a

2 hearing thereon by the Secretary to the same

3 extent as is provided in section 205(b) and to

4 judicial review of the Secretary’s final decision

5 after such hearing as is provided in section

6 205(g). For purposes of the preceding sentence,

7 any reference to the Commissioner of Social Se8 curity or the Social Security Administration in

9 subsection (g) or (l) of section 205 shall be con10 sidered a reference to the Secretary or the De11 partment of Health and Human Services, re12 spectively.

13 ‘‘(ii) In making determinations under this

14 subsection, local and national coverage deter15 minations that involve the consideration of med16 ical facts of application of medical judgment

17 shall not be binding on qualified independent

18 contractors, administrative law judges or the

19 Departmental Appeals Board when determining

20 whether a particular item or service is covered

21 with respect to an individual making a claim for

22 benefit or the amount, duration or scope of an

23 item or service to which an individual making

24 a claim for benefits is eligible.
209

•HR 5612 IH

1 ‘‘(B) REPRESENTATION BY PROVIDER OR

2 SUPPLIER.—

3 ‘‘(i) IN GENERAL.—Sections 206(a),

4 1102, and 1871 shall not be construed as

5 authorizing the Secretary to prohibit an in6 dividual from being represented under this

7 section by a person that furnishes or sup8 plies the individual, directly or indirectly,

9 with services or items, solely on the basis

10 that the person furnishes or supplies the

11 individual with such a service or item.

12 ‘‘(ii) MANDATORY WAIVER OF RIGHT

13 TO PAYMENT FROM BENEFICIARY.—Any

14 person that furnishes services or items to

15 an individual may not represent an indi16 vidual under this section with respect to

17 the issue described in section 1879(a)(2)

18 unless the person has waived any rights for

19 payment from the beneficiary with respect

20 to the services or items involved in the ap21 peal.

22 ‘‘(iii) PROHIBITION ON PAYMENT FOR

23 REPRESENTATION.—If a person furnishes

24 services or items to an individual and rep25 resents the individual under this section,
210

•HR 5612 IH

1 the person may not impose any financial li2 ability on such individual in connection

3 with such representation.

4 ‘‘(iv) REQUIREMENTS FOR REP5 RESENTATIVES OF A BENEFICIARY.—The

6 provisions of section 205(j) and section

7 206 (other than subsection (a)(4) of such

8 section) regarding representation of claim9 ants shall apply to representation of an in10 dividual with respect to appeals under this

11 section in the same manner as they apply

12 to representation of an individual under

13 those sections.

14 ‘‘(C) SUCCESSION OF RIGHTS IN CASES OF

15 ASSIGNMENT.—The right of an individual to an

16 appeal under this section with respect to an

17 item or service may be assigned to the provider

18 of services or supplier of the item or service

19 upon the written consent of such individual

20 using a standard form established by the Sec21 retary for such an assignment.

22 ‘‘(D) TIME LIMITS FOR FILING APPEALS.—

23 ‘‘(i) RECONSIDERATIONS.—Reconsid24 eration under subparagraph (A) shall be

25 available only if the individual described in
211

•HR 5612 IH

1 subparagraph (A) files notice with the Sec2 retary to request reconsideration by not

3 later than the end of the 180-day period

4 beginning on the date the individual re5 ceives notice of the redetermination under

6 subsection (a)(3), or within such additional

7 time as the Secretary may allow.

8 ‘‘(ii) HEARINGS CONDUCTED BY THE

9 SECRETARY.—The Secretary shall establish

10 in regulations time limits for the filing of

11 a request for a hearing by the Secretary in

12 accordance with provisions in sections 205

13 and 206.

14 ‘‘(E) AMOUNTS IN CONTROVERSY.—

15 ‘‘(i) IN GENERAL.—A hearing (by the

16 Secretary) shall not be available to an indi17 vidual under this section if the amount in

18 controversy is less than $100, and judicial

19 review shall not be available to the indi20 vidual if the amount in controversy is less

21 than $1,000.

22 ‘‘(ii) AGGREGATION OF CLAIMS.—In

23 determining the amount in controversy, the

24 Secretary, under regulations, shall allow
212

•HR 5612 IH

1 two or more appeals to be aggregated if

2 the appeals involve—

3 ‘‘(I) the delivery of similar or re4 lated services to the same individual

5 by one or more providers of services

6 or suppliers, or

7 ‘‘(II) common issues of law and

8 fact arising from services furnished to

9 two or more individuals by one or

10 more providers of services or sup11 pliers.

12 ‘‘(F) EXPEDITED PROCEEDINGS.—

13 ‘‘(i) EXPEDITED DETERMINATION.—

14 In the case of an individual who has re15 ceived notice by a provider of services that

16 the provider of services plans—

17 ‘‘(I) to terminate services pro18 vided to an individual and a physician

19 certifies that failure to continue the

20 provision of such services is likely to

21 place the individual’s health at signifi22 cant risk, or

23 ‘‘(II) to discharge the individual

24 from the provider of services, the indi25 vidual may request, in writing or oral-
213

•HR 5612 IH

1 ly, an expedited determination or an

2 expedited reconsideration of an initial

3 determination made under subsection

4 (a)(1), as the case may be, and the

5 Secretary shall provide such expedited

6 determination or expedited reconsider7 ation.

8 A reconsideration of a discharge from a

9 hospital shall be conducted under this

10 clause in accordance with the provisions of

11 paragraphs (2), (3), and (4) of section

12 1154(e) as in effect on the date that pre13 cedes the date of the enactment of this

14 subparagraph.

15 ‘‘(ii) EXPEDITED HEARING.—In a

16 hearing by the Secretary under this sec17 tion, in which the moving party alleges

18 that no material issues of fact are in dis19 pute, the Secretary shall make an expe20 dited determination as to whether any such

21 facts are in dispute and, if not, shall

22 render a decision expeditiously.

23 ‘‘(G) REOPENING AND REVISION OF DE24 TERMINATIONS.—The Secretary may reopen or

25 revise any initial determination or reconsidered
214

•HR 5612 IH

1 determination described in this subsection

2 under guidelines established by the Secretary in

3 regulations.

4 ‘‘(c) CONDUCT OF RECONSIDERATIONS BY INDE5 PENDENT CONTRACTORS.—

6 ‘‘(1) IN GENERAL.—The Secretary shall enter

7 into contracts with qualified independent contractors

8 to conduct reconsiderations of initial determinations

9 made under subparagraphs (B) and (C) of sub10 section (a)(1), if such determinations involve either

11 whether a particular item or service is covered with

12 respect to an individual making a claim for benefits

13 or the amount, duration, or scope of an item or serv14 ice to which an individual making a claim for bene15 fits is eligible. Contracts shall be for an initial term

16 of three years and shall be renewable on a triennial

17 basis thereafter. This subsection shall not apply to

18 claims for persons described in subparagraphs (B)

19 and (C) of subsection (b)(1) that involve only the

20 amount of payment or the type of payment available

21 with respect to an item or service.

22 ‘‘(2) QUALIFIED INDEPENDENT CONTRACTOR

23 DEFINED.—For purposes of this subsection, the

24 term ‘qualified independent contractor’ means an en25 tity or organization that is independent of any orga-
215

•HR 5612 IH

1 nization under contract with the Secretary that

2 makes initial determinations under subsection

3 (a)(1), and that meets the requirements established

4 by the Secretary consistent with paragraph (3).

5 ‘‘(3) REQUIREMENTS.—Any qualified inde6 pendent contractor entering into a contract with the

7 Secretary under this subsection shall meet all of the

8 following requirements:

9 ‘‘(A) IN GENERAL.—The qualified inde10 pendent contractor shall perform such duties

11 and functions and assume such responsibilities

12 as may be required by the Secretary to carry

13 out the provisions of this subsection, and shall

14 have sufficient training and expertise in medical

15 science and legal matters to make reconsider16 ations under this subsection.

17 ‘‘(B) RECONSIDERATIONS.—Subject to

18 subsection (b)(1)(A)(ii), the qualified inde19 pendent contractor shall review initial deter20 minations. In the case of an initial determina21 tion made with respect to whether an item or

22 service is reasonable and necessary for the diag23 nosis or treatment of illness or injury (under

24 section 1862(a)(1)(A)), such review shall in25 clude consideration of the facts and cir-
216

•HR 5612 IH

1 cumstances of the initial determination by a

2 physician or other appropriate health care pro3 fessional based on the medical condition of the

4 individual (including the medical records of the

5 individual) and any decisions with respect to

6 the reconsideration shall be based on applicable

7 information, including clinical experience and

8 valid, relevant medical, technical, and scientific

9 evidence.

10 ‘‘(C) DEADLINES FOR DECISIONS.—

11 ‘‘(i) RECONSIDERATIONS.—Except as

12 provided in clauses (iii) and (iv), and in ac13 cordance with subsection (e), the qualified

14 independent contractor shall conduct and

15 conclude a reconsideration under subpara16 graph (B), and mail the notice of the deci17 sion with respect to the reconsideration in

18 accordance with the medical needs of the

19 individual but not later than the end of the

20 30-day period beginning on the date a re21 quest for reconsideration has been timely

22 filed.

23 ‘‘(ii) CONSEQUENCES OF FAILURE TO

24 MEET DEADLINE.—In the case of a failure

25 by the qualified independent contractor to
217

•HR 5612 IH

1 mail the notice of the decision by the end

2 of the period described in clause (i), or by

3 the end of the applicable period described

4 in subsection (e), or to provide notice by

5 the end of the period described in clause

6 (iii), as the case may be, the party request7 ing the reconsideration or appeal may re8 quest a hearing before the Secretary, not9 withstanding any requirements for a recon10 sidered determination for purposes of the

11 party’s right to such hearing.

12 ‘‘(iii) EXPEDITED RECONSIDER13 ATIONS.—The qualified independent con14 tractor shall perform an expedited recon15 sideration under subsection (b)(1)(F) as

16 follows:

17 ‘‘(I) DEADLINE FOR DECISION.—

18 Notwithstanding section 216(j) and

19 subject to clause (iv), in accordance

20 with the medical needs of the indi21 vidual and not later than the end of

22 the 72-hour period beginning on the

23 date the qualified independent con24 tractor has received a request for such

25 reconsideration and has received such
218

•HR 5612 IH

1 medical or other records needed for

2 such reconsideration, the qualified

3 independent contractor shall provide

4 notice (by telephone and in writing) to

5 the individual and the provider of

6 services and attending physician of

7 the individual of the results of the re8 consideration. Such reconsideration

9 shall be conducted regardless of

10 whether the provider of services or

11 supplier will charge the individual for

12 continued services or whether the indi13 vidual will be liable for payment for

14 such continued services.

15 ‘‘(II) CONSULTATION WITH BEN16 EFICIARY.—In such reconsideration,

17 the qualified independent contractor

18 may solicit the views of the individual

19 involved.

20 ‘‘(III) SPECIAL RULE FOR HOS21 PITAL DISCHARGES.—A reconsider22 ation of a discharge from a hospital

23 shall be conducted under this clause

24 in accordance with the provisions of

25 paragraphs (2), (3), and (4) of section
219

•HR 5612 IH

1 1154(e) as in effect on the date that

2 precedes the date of the enactment of

3 this subparagraph.

4 ‘‘(iv) EXTENSION.—In any case in

5 which an individual requests an extension,

6 or the qualified independent contractor de7 termines that an extension is in the best

8 interests of the individual, an extension of

9 not greater than 14 days may be granted.

10 ‘‘(D) LIMITATION ON INDIVIDUAL REVIEW11 ING DETERMINATIONS.—

12 ‘‘(i) PHYSICIANS AND HEALTH CARE

13 PROFESSIONAL.—No physician or health

14 care professional under the employ of a

15 qualified independent contractor may

16 review—

17 ‘‘(I) determinations regarding

18 health care services furnished to a pa19 tient if the physician or health care

20 professional was directly responsible

21 for furnishing such services; or

22 ‘‘(II) determinations regarding

23 health care services provided in or by

24 an institution, organization, or agen25 cy, if the physician or any member of
220

•HR 5612 IH

1 the family of the physician or health

2 care professional has, directly or indi3 rectly, a significant financial interest

4 in such institution, organization, or

5 agency.

6 ‘‘(ii) FAMILY DESCRIBED.—For pur7 poses of this paragraph, the family of a

8 physician or health care professional in9 cludes the spouse (other than a spouse who

10 is legally separated from the physician or

11 health care professional under a decree of

12 divorce or separate maintenance), children

13 including stepchildren and legally adopted

14 children), grandchildren, parents, and

15 grandparents of the physician or health

16 care professional.

17 ‘‘(E) EXPLANATION OF DECISION.—Any

18 decision with respect to a reconsideration of a

19 qualified independent contractor shall be in

20 writing, and shall include a detailed explanation

21 of the decision as well as a discussion of the

22 pertinent facts and applicable regulations ap23 plied in making such decision, and in the case

24 of a determination of whether an item or serv25 ice is reasonable and necessary for the diag-
221

•HR 5612 IH

1 nosis or treatment of illness or injury (under

2 section 1862(a)(1)(A)) an explanation of the

3 medical and scientific rationale for the decision.

4 ‘‘(F) NOTICE REQUIREMENTS.—Whenever

5 a qualified independent contractor makes a de6 cision with respect to a reconsideration under

7 this subsection, the qualified independent con8 tractor shall promptly notify the entity respon9 sible for the payment of claims under part A or

10 part B of such decision.

11 ‘‘(G) DISSEMINATION OF DECISIONS ON

12 RECONSIDERATIONS.—Each qualified inde13 pendent contractor shall make available all deci14 sions with respect to reconsiderations of such

15 qualified independent contractors to fiscal inter16 mediaries (under section 1816), carriers (under

17 section 1842), peer review organizations (under

18 part B of title XI), Medicare+Choice organiza19 tions offering Medicare+Choice plans under

20 part C, other entities under contract with the

21 Secretary to make initial determinations under

22 part A or part B or title XI, and to the public.

23 The Secretary shall establish a methodology

24 under which qualified independent contractors

25 shall carry out this subparagraph.
222

•HR 5612 IH

1 ‘‘(H) ENSURING CONSISTENCY IN DECI2 SIONS.—Each qualified independent contractor

3 shall monitor its decisions with respect to re4 considerations to ensure the consistency of such

5 decisions with respect to requests for reconsid6 eration of similar or related matters.

7 ‘‘(I) DATA COLLECTION.—

8 ‘‘(i) IN GENERAL.—Consistent with

9 the requirements of clause (ii), a qualified

10 independent contractor shall collect such

11 information relevant to its functions, and

12 keep and maintain such records in such

13 form and manner as the Secretary may re14 quire to carry out the purposes of this sec15 tion and shall permit access to and use of

16 any such information and records as the

17 Secretary may require for such purposes.

18 ‘‘(ii) TYPE OF DATA COLLECTED.—

19 Each qualified independent contractor

20 shall keep accurate records of each deci21 sion made, consistent with standards es22 tablished by the Secretary for such pur23 pose. Such records shall be maintained in

24 an electronic database in a manner that

25 provides for identification of the following:
223

•HR 5612 IH

1 ‘‘(I) Specific claims that give rise

2 to appeals.

3 ‘‘(II) Situations suggesting the

4 need for increased education for pro5 viders of services, physicians, or sup6 pliers.

7 ‘‘(III) Situations suggesting the

8 need for changes in national or local

9 coverage policy.

10 ‘‘(IV) Situations suggesting the

11 need for changes in local medical re12 view policies.

13 ‘‘(iii) ANNUAL REPORTING.—Each

14 qualified independent contractor shall sub15 mit annually to the Secretary (or otherwise

16 as the Secretary may request) records

17 maintained under this paragraph for the

18 previous year.

19 ‘‘(J) HEARINGS BY THE SECRETARY.—The

20 qualified independent contractor shall—

21 ‘‘(i) prepare such information as is re22 quired for an appeal of a decision of the

23 contractor with respect to a reconsider24 ation to the Secretary for a hearing, in25 cluding as necessary, explanations of issues
224

•HR 5612 IH

1 involved in the decision and relevant poli2 cies, and

3 ‘‘(ii) participate in such hearings as

4 required by the Secretary.

5 ‘‘(4) NUMBER OF QUALIFIED INDEPENDENT

6 CONTRACTORS.—The Secretary shall enter into con7 tracts with such number of qualified independent

8 contractors under this subsection as the Secretary

9 determines appropriate to carry out the provisions of

10 this subsection.

11 ‘‘(5) LIMITATION ON QUALIFIED INDEPENDENT

12 CONTRACTOR LIABILITY.—No qualified independent

13 contractor having a contract with the Secretary

14 under this subsection and no person who is em15 ployed by, or who has a fiduciary relationship with,

16 any such qualified independent contractor or who

17 furnishes professional services to such qualified inde18 pendent contractor, shall be held by reason of the

19 performance of any duty, function, or activity re20 quired or authorized pursuant to this subsection or

21 to a valid contract entered into under this sub22 section, to have violated any criminal law, or to be

23 civilly liable under any law of the United States or

24 of any State (or political subdivision thereof) pro-
225

•HR 5612 IH

1 vided due care was exercised in the performance of

2 such duty, function, or activity.

3 ‘‘(d) MEDICAL EXIGENT PROCESS FOR CONTRAC4 TORS.—

5 ‘‘(1) IN GENERAL.—An individual may request,

6 either orally or in writing, a medical exigent review

7 under subsection (b). Such request shall be made to

8 the contractor who made the initial determination.

9 ‘‘(2) CONDITIONS FOR GRANTING A MEDICAL

10 EXIGENT REVIEW.—A medical exigent review shall

11 be granted where—

12 ‘‘(A) the contractor determines that the

13 application of the standard time frame for con14 ducting a redetermination under subsection

15 (a)(3) could seriously jeopardize the life or

16 health of the individual or such individual’s

17 ability to attain, maintain, or regain maximum

18 function, or

19 ‘‘(B) the individual submits a certification

20 from a physician that the jeopardy could occur.

21 ‘‘(3) DEADLINE FOR MEDICAL EXIGENT RE22 VIEWS.—If an individual is granted a medical exi23 gent review under this subsection, the review shall

24 be conducted and notice of the review shall be made,

25 in accordance with the individual’s medical needs,
226

•HR 5612 IH

1 but no later than 72 hours after the request was

2 made.

3 ‘‘(4) FAILURE TO MEET TIME FRAMES.—In the

4 event the contractor who made the initial determina5 tion to meet the time frame in paragraph (3), the

6 individual may proceed to the next level of review.

7 ‘‘(e) MEDICAL EXIGENT PROCESS FOR QUALIFIED

8 INDEPENDENT CONTRACTORS.—

9 ‘‘(1) IN GENERAL.—An individual may request,

10 either orally or in writing, a medical exigent recon11 sideration of an initial determination under sub12 section (a) or a determination made under sub13 section (d). Such request shall be made to the quali14 fied independent contractor.

15 ‘‘(2) CONDITIONS FOR GRANTING A MEDICAL

16 EXIGENT REVIEW.—A medical exigent review shall

17 be granted where—

18 ‘‘(A) the qualified independent contractor

19 determines that the application of the standard

20 time frame for conducting a review could seri21 ously jeopardize the life or health of the indi22 vidual or such individual’s ability to attain,

23 maintain, or regain maximum function,
227

•HR 5612 IH

1 ‘‘(B) the individual submits a certification

2 from a physician that the jeopardy could occur,

3 or

4 ‘‘(C) was expedited at the previous con5 tractor level.

6 ‘‘(3) DEADLINE FOR MEDICAL EXIGENT RE7 VIEWS.—If an individual is granted a medical exi8 gent reconsideration under this paragraph, the re9 view shall be conducted and notice of the review

10 shall be made, in accordance with the individual’s

11 medical needs, but no later than 72 hours after the

12 request was made.

13 ‘‘(4) FAILURE TO MEET TIME FRAMES.—In the

14 event the qualified independent contractor or the

15 Secretary fails to meet the time frame in paragraph

16 (3), the individual may proceed to the next level of

17 review.

18 ‘‘(f) TIME FRAME FOR REVIEW BY SECRETARY.—

19 The Secretary shall conduct all reviews in a time frame

20 that is in accordance with the medical exigencies of the

21 case.

22 ‘‘(g) ADMINISTRATIVE PROVISIONS.—

23 ‘‘(1) LIMITATION ON REVIEW OF CERTAIN REG24 ULATIONS.—A regulation or instruction that relates

25 to a method for determining the amount of payment
228

•HR 5612 IH

1 under part B and that was initially issued before

2 January 1, 1981, shall not be subject to judicial re3 view.

4 ‘‘(2) OUTREACH.—The Secretary shall perform

5 such outreach activities as are necessary to inform

6 individuals entitled to benefits under this title and

7 providers of services and suppliers with respect to

8 their rights of, and the process for, appeals made

9 under this section. The Secretary shall use the toll10 free telephone number maintained by the Secretary

11 under section 1804(b) to provide information re12 garding appeal rights and respond to inquiries re13 garding the status of appeals.

14 ‘‘(3) CONTINUING EDUCATION REQUIREMENT

15 FOR QUALIFIED INDEPENDENT CONTRACTORS AND

16 ADMINISTRATIVE LAW JUDGES.—The Secretary shall

17 provide to each qualified independent contractor,

18 and, in consultation with the Commissioner of Social

19 Security, to administrative law judges that decide

20 appeals of reconsiderations of initial determinations

21 or other decisions or determinations under this sec22 tion, such continuing education with respect to cov23 erage of items and services under this title or poli24 cies of the Secretary with respect to part B of title

25 XI as is necessary for such qualified independent
229

•HR 5612 IH

1 contractors and administrative law judges to make

2 informed decisions with respect to appeals.

3 ‘‘(4) REPORTS.—

4 ‘‘(A) ANNUAL REPORT TO CONGRESS.—

5 The Secretary shall submit to Congress an an6 nual report describing the number of appeals

7 for the previous year, identifying issues that re8 quire administrative or legislative actions, and

9 including any recommendations of the Secretary

10 with respect to such actions. The Secretary

11 shall include in such report an analysis of de12 terminations by qualified independent contrac13 tors with respect to inconsistent decisions and

14 an analysis of the causes of any such inconsist15 encies.

16 ‘‘(B) SURVEY.—Not less frequently than

17 every 5 years, the Secretary shall conduct a

18 survey of a valid sample of individuals entitled

19 to benefits under this title who have filed ap20 peals of determinations under this section, pro21 viders of services, and suppliers to determine

22 the satisfaction of such individuals or entities

23 with the process for appeals of determinations

24 provided for under this section and education

25 and training provided by the Secretary with re-
230

•HR 5612 IH

1 spect to that process. The Secretary shall sub2 mit to Congress a report describing the results

3 of the survey, and shall include any rec4 ommendations for administrative or legislative

5 actions that the Secretary determines appro6 priate.’’.

7 (b) APPLICABILITY OF REQUIREMENTS AND LIMITA8 TIONS ON LIABILITY OF QUALIFIED INDEPENDENT CON9 TRACTORS TO MEDICARE+CHOICE INDEPENDENT AP10 PEALS CONTRACTORS.—Section 1852(g)(4) (42 U.S.C.

11 1395w22(g)(4)) is amended by adding at the end the fol12 lowing: ‘‘The provisions of section 1869(c)(5) shall apply

13 to independent outside entities under contract with the

14 Secretary under this paragraph.’’.

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

16 this section apply with respect to initial determinations

17 made on or after October 1, 2002.

18 SEC. 522. REVISIONS TO MEDICARE COVERAGE PROCESS.

19 (a) REVIEW OF DETERMINATIONS.—Section 1869

20 (42 U.S.C. 1395ff), as amended by section 521, is further

21 amended by adding at the end the following new sub22 section:

23 ‘‘(h) REVIEW OF COVERAGE DETERMINATIONS.—

24 ‘‘(1) NATIONAL COVERAGE DETERMINATIONS.—
231

•HR 5612 IH

1 ‘‘(A) IN GENERAL.—Review of any na2 tional coverage determination shall be subject to

3 the following limitations:

4 ‘‘(i) Such a determination shall not be

5 reviewed by any administrative law judge.

6 ‘‘(ii) Such a determination shall not

7 be held unlawful or set aside on the ground

8 that a requirement of section 553 of title

9 5, United States Code, or section 1871(b)

10 of this title, relating to publication in the

11 Federal Register or opportunity for public

12 comment, was not satisfied.

13 ‘‘(iii) Upon the filing of a complaint

14 by an aggrieved party, the Secretary shall

15 provide for the review of a national cov16 erage determination by the advisory panel

17 established pursuant to paragraph (3)

18 (hereinafter referred to as the ‘Panel’). In

19 conducting such a review, the Panel shall

20 review the record to evaluate whether the

21 determination is in accord with sound med22 ical practice, taking into account medical,

23 technological, or clinical advancements,

24 and any other medical, scientific, or other

25 relevant information that the Panel deems
232

•HR 5612 IH

1 reliable and may consider information that

2 was not available or was not considered at

3 the time of the determination. The Panel

4 shall make a recommendation to the Sec5 retary as to whether the determination

6 should be upheld, modified, or set aside,

7 and the Secretary shall have 30 days from

8 the receipt of such recommendation to

9 issue a decision.

10 ‘‘(iv) A decision of the Secretary

11 under clause (iii) constitutes a final agency

12 action and is subject to judicial review.

13 ‘‘(B) DEFINITION OF NATIONAL COVERAGE

14 DETERMINATION.—For purposes of this section,

15 the term ‘national coverage determination’

16 means a determination by the Secretary with

17 respect to whether or not a particular item or

18 service is covered nationally under this title, but

19 does not include a determination of what code,

20 if any, is assigned to a particular item or serv21 ice covered under this title or a determination

22 with respect to the amount of payment made

23 for a particular item or service so covered.

24 ‘‘(2) LOCAL COVERAGE DETERMINATION.—
233

•HR 5612 IH

1 ‘‘(A) IN GENERAL.—Upon the filing of a

2 complaint by an aggrieved party (except in the

3 cases of issues regarding the coding or sup4 porting documentation), the Secretary shall

5 provide for the review of a local coverage deter6 mination by the Panel as provided in paragraph

7 (3) except that for purposes of a review under

8 this subsection, the Panel shall also consider

9 any special circumstances that may be relevant

10 to the practice of medicine in the locality. The

11 Panel shall make a recommendation to the Sec12 retary as to whether the determination should

13 be upheld, modified, or set aside, and the Sec14 retary shall have 30 days from the receipt of

15 such recommendation to issue a decision to up16 hold the determination or to remand it to the

17 fiscal intermediary or carrier for revision. A fis18 cal intermediary or carrier shall have 30 days

19 from the receipt of any remand instructions

20 from the Secretary in which to complete such

21 revision. The decision of the Secretary shall

22 have effect only with respect to the local cov23 erage determination. Such a decision constitutes

24 a final agency action and is subject to judicial

25 review.
234

•HR 5612 IH

1 ‘‘(B) DEFINITION OF LOCAL COVERAGE

2 DETERMINATION.—For purposes of this section,

3 the term ‘local coverage determination’ means a

4 determination by a fiscal intermediary or a car5 rier under part A or part B, as applicable, re6 specting whether or not a particular item or

7 service is covered on an intermediary- or car8 rier-wide basis under such parts, in accordance

9 with section 1862(a)(1)(A).

10 ‘‘(3) ESTABLISHMENT OF MEDICAL ADVISORY

11 PANEL.—For the purposes of providing expert clin12 ical and scientific advice and recommendations to

13 the Secretary regarding reconsiderations of national

14 or local coverage determinations under paragraphs

15 (1) and (2), the Secretary shall establish panels of

16 experts or use panels of experts (or members of such

17 panels) established before the date of enactment of

18 this subsection or both. The Secretary shall appoint

19 as members of any such panel persons the Secretary

20 determines to have an appropriate level of expertise

21 in the subject matter, but shall not appoint any indi22 vidual who is in the regular full-time employ of the

23 Health Care Financing Administration or any indi24 vidual who participated in the initial coverage deter-
235

•HR 5612 IH

1 mination that is the subject of a reconsideration re2 quest.

3 ‘‘(4) PENDING NATIONAL COVERAGE DETER4 MINATIONS.—

5 ‘‘(A) IN GENERAL.—In the event the Sec6 retary has not issued a national coverage or

7 noncoverage determination with respect to a

8 particular type or class of items or services, an

9 aggrieved person (as described in paragraph

10 (5)) may submit to the Secretary a request to

11 make such a determination with respect to such

12 items or services. By not later than the end of

13 the 90-day period beginning on the date the

14 Secretary receives such a request (notwith15 standing the receipt by the Secretary of new

16 evidence, if any, during such 90-day period),

17 the Secretary shall take one of the following ac18 tions:

19 ‘‘(i) Issue a national coverage deter20 mination, with or without limitations.

21 ‘‘(ii) Issue a national noncoverage de22 termination.

23 ‘‘(iii) Issue a determination that no

24 national coverage or noncoverage deter25 mination is appropriate as of the end of
236

•HR 5612 IH

1 such 90-day period with respect to national

2 coverage of such items or services.

3 ‘‘(iv) Issue a notice that states that

4 the Secretary has not completed a review

5 of the request for a national coverage de6 termination and that includes an identi7 fication of the remaining steps in the Sec8 retary’s review process and a deadline by

9 which the Secretary will complete the re10 view and take an action described in clause

11 (i), (ii), or (iii).

12 ‘‘(B) DEEMED ACTION BY THE SEC13 RETARY.—In the case of an action described in

14 subparagraph (A)(iv), if the Secretary fails to

15 take an action referred to in such subparagraph

16 by the deadline specified by the Secretary under

17 such subparagraph, then the Secretary is

18 deemed to have taken an action described in

19 subparagraph (A)(iii) as of the deadline.

20 ‘‘(C) EXPLANATION OF DETERMINA21 TION.—When issuing a determination under

22 subparagraph (A), the Secretary shall include

23 an explanation of the basis for the determina24 tion. An action taken under subparagraph (A)

25 (other than clause (iv)) is deemed to be a na-
237

•HR 5612 IH

1 tional coverage determination for purposes of

2 review under paragraph (1).

3 ‘‘(5) STANDING.—An action under this sub4 section seeking review of a national coverage deter5 mination or local coverage determination may be ini6 tiated only by individuals entitled to benefits under

7 part A, or enrolled under part B, or both, who are

8 in need of the items or services that are the subject

9 of the coverage determination.

10 ‘‘(6) PUBLICATION ON THE INTERNET OF DECI11 SIONS OF HEARINGS OF THE SECRETARY.—Each de12 cision of a hearing by the Secretary with respect to

13 a national coverage determination shall be made

14 public, and the Secretary shall publish each decision

15 on the medicare Internet site of the Department of

16 Health and Human Services. The Secretary shall re17 move from such decision any information that would

18 identify any individual, provider of services, or sup19 plier.

20 ‘‘(7) ANNUAL REPORT ON NATIONAL COVERAGE

21 DETERMINATIONS.—

22 ‘‘(A) IN GENERAL.—Not later than De23 cember 1 of each year, beginning in 2001, the

24 Secretary shall submit to Congress a report

25 that sets forth a detailed compilation of the ac-
238

•HR 5612 IH

1 tual time periods that were necessary to com2 plete and fully implement national coverage de3 terminations that were made in the previous fis4 cal year for items, services, or medical devices

5 not previously covered as a benefit under this

6 title, including, with respect to each new item,

7 service, or medical device, a statement of the

8 time taken by the Secretary to make and imple9 ment the necessary coverage, coding, and pay10 ment determinations, and including the time

11 taken to complete each significant step in the

12 process of making and implementing such de13 terminations.

14 ‘‘(B) PUBLICATION OF REPORTS ON THE

15 INTERNET.—The Secretary shall publish each

16 report submitted under subparagraph (A) on

17 the medicare Internet site of the Department of

18 Health and Human Services.

19 ‘‘(8) CONSTRUCTION.—Nothing in this sub20 section shall be construed as permitting administra21 tive or judicial review pursuant to this section inso22 far as such review is explicitly prohibited or re23 stricted under another provision of law.’’.

24 (b) ESTABLISHMENT OF A PROCESS FOR COVERAGE

25 DETERMINATIONS.—Section 1862(a) (42 U.S.C.
239

•HR 5612 IH

1 1395y(a)) is amended by adding at the end the following

2 new sentence: ‘‘In making a national coverage determina3 tion (as defined in paragraph (1)(B) of section 1869(h))

4 the Secretary shall ensure that the public is afforded no5 tice and opportunity to comment prior to implementation

6 by the Secretary of the determination; meetings of advi7 sory committees established under section 1114(f) with re8 spect to the determination are made on the record; in

9 making the determination, the Secretary has considered

10 applicable information (including clinical experience and

11 valid, relevant medical, technical, and scientific evidence)

12 with respect to the subject matter of the determination;

13 and in the determination, provide a clear statement of the

14 basis for the determination (including responses to com15 ments received from the public), the assumptions under16 lying that basis, and make available to the public the data

17 (other than proprietary data) considered in making the de18 termination.’’.

19 (c) IMPROVEMENTS TO THE MEDICARE ADVISORY

20 COMMITTEE PROCESS.—Section 1114 (42 U.S.C. 1314)

21 is amended by adding at the end the following new sub22 section:

23 ‘‘(i)(1) Any advisory committee appointed under sub24 section (f) to advise the Secretary on matters relating to

25 the interpretation, application, or implementation of sec-
240

•HR 5612 IH

1 tion 1862(a)(1) shall assure the full participation of a

2 nonvoting member in the deliberations of the advisory

3 committee, and shall provide such nonvoting member ac4 cess to all information and data made available to voting

5 members of the advisory committee, other than informa6 tion that—

7 ‘‘(A) is exempt from disclosure pursuant to sub8 section (a) of section 552 of title 5, United States

9 Code, by reason of subsection (b)(4) of such section

10 (relating to trade secrets); or

11 ‘‘(B) the Secretary determines would present a

12 conflict of interest relating to such nonvoting mem13 ber.

14 ‘‘(2) If an advisory committee described in paragraph

15 (1) organizes into panels of experts according to types of

16 items or services considered by the advisory committee,

17 any such panel of experts may report any recommendation

18 with respect to such items or services directly to the Sec19 retary without the prior approval of the advisory com20 mittee or an executive committee thereof.’’.

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

22 this section apply with respect to—

23 (1) a review of any national or local coverage

24 determination filed,
241

•HR 5612 IH

1 (2) a request to make such a determination

2 made, and

3 (3) a national coverage determination made, on

4 or after October 1, 2001.

5 Subtitle D—Improving Access to

6 New Technologies

7 SEC. 531. REIMBURSEMENT IMPROVEMENTS FOR NEW

8 CLINICAL LABORATORY TESTS AND DURA9 BLE MEDICAL EQUIPMENT.

10 (a) PAYMENT RULE FOR NEW LABORATORY

11 TESTS.—Section 1833(h)(4)(B)(viii) (42 U.S.C.

12 1395l(h)(4)(B)(viii)) is amended by inserting before the

13 period at the end the following: ‘‘(or 100 percent of such

14 median in the case of a clinical diagnostic laboratory test

15 performed on or after January 1, 2001, that the Secretary

16 determines is a new test for which no limitation amount

17 has previously been established under this subpara18 graph)’’.

19 (b) ESTABLISHMENT OF CODING AND PAYMENT

20 PROCEDURES FOR NEW CLINICAL DIAGNOSTIC LABORA21 TORY TESTS AND OTHER ITEMS ON A FEE SCHEDULE.—

22 Not later than 1 year after the date of the enactment of

23 this Act, the Secretary of Health and Human Services

24 shall establish procedures for coding and payment deter25 minations for the categories of new clinical diagnostic lab-
242

•HR 5612 IH

1 oratory tests and new durable medical equipment under

2 part B of the title XVIII of the Social Security Act that

3 permit public consultation in a manner consistent with the

4 procedures established for implementing coding modifica5 tions for ICD–9–CM.

6 (c) REPORT ON PROCEDURES USED FOR ADVANCED,

7 IMPROVED TECHNOLOGIES.—Not later than 1 year after

8 the date of the enactment of this Act, the Secretary of

9 Health and Human Services shall submit to Congress a

10 report that identifies the specific procedures used by the

11 Secretary under part B of title XVIII of the Social Secu12 rity Act to adjust payments for clinical diagnostic labora13 tory tests and durable medical equipment which are classi14 fied to existing codes where, because of an advance in

15 technology with respect to the test or equipment, there has

16 been a significant increase or decrease in the resources

17 used in the test or in the manufacture of the equipment,

18 and there has been a significant improvement in the per19 formance of the test or equipment. The report shall in20 clude such recommendations for changes in law as may

21 be necessary to assure fair and appropriate payment levels

22 under such part for such improved tests and equipment

23 as reflects increased costs necessary to produce improved

24 results.
243

•HR 5612 IH

1 SEC. 532. RETENTION OF HCPCS LEVEL III CODES.

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

3 Human Services shall maintain and continue the use of

4 level III codes of the HCPCS coding system (as such sys5 tem was in effect on August 16, 2000) through December

6 31, 2003, and shall make such codes available to the pub7 lic.

8 (b) DEFINITION.—For purposes of this section, the

9 term ‘‘HCPCS Level III codes’’ means the alphanumeric

10 codes for local use under the Health Care Financing Ad11 ministration Common Procedure Coding System

12 (HCPCS).

13 SEC. 533. RECOGNITION OF NEW MEDICAL TECHNOLOGIES

14 UNDER INPATIENT HOSPITAL PPS.

15 (a) EXPEDITING RECOGNITION OF NEW TECH16 NOLOGIES INTO INPATIENT PPS CODING SYSTEM.—

17 (1) REPORT.—Not later than April 1, 2001, the

18 Secretary of Health and Human Services shall sub19 mit to Congress a report on methods of expeditiously

20 incorporating new medical services and technologies

21 into the clinical coding system used with respect to

22 payment for inpatient hospital services furnished

23 under the medicare program under title XVIII of the

24 Social Security Act, together with a detailed descrip25 tion of the Secretary’s preferred methods to achieve

26 this purpose.
244

•HR 5612 IH

1 (2) IMPLEMENTATION.—Not later than October

2 1, 2001, the Secretary shall implement the preferred

3 methods described in the report transmitted pursu4 ant to paragraph (1).

5 (b) ENSURING APPROPRIATE PAYMENTS FOR HOS6 PITALS INCORPORATING NEW MEDICAL SERVICES AND

7 TECHNOLOGIES.—

8 (1) ESTABLISHMENT OF MECHANISM.—Section

9 1886(d)(5) (42 U.S.C. 1395ww(d)(5)) is amended

10 by adding at the end the following new subpara11 graphs:

12 ‘‘(K)(i) Effective for discharges beginning on or after

13 October 1, 2001, the Secretary shall establish a mecha14 nism to recognize the costs of new medical services and

15 technologies under the payment system established under

16 this subsection. Such mechanism shall be established after

17 notice and opportunity for public comment (in the publica18 tions required by subsection (e)(5) for a fiscal year or oth19 erwise).

20 ‘‘(ii) The mechanism established pursuant to clause

21 (i) shall—

22 ‘‘(I) apply to a new medical service or tech23 nology if, based on the estimated costs incurred with

24 respect to discharges involving such service or tech25 nology, the DRG prospective payment rate otherwise
245

•HR 5612 IH

1 applicable to such discharges under this subsection

2 is inadequate;

3 ‘‘(II) provide for the collection of data with re4 spect to the costs of a new medical service or tech5 nology described in subclause (I) for a period of not

6 less than two years and not more than three years

7 beginning on the date on which an inpatient hospital

8 code is issued with respect to the service or tech9 nology;

10 ‘‘(III) subject to paragraph (4)(C)(iii), provide

11 for additional payment to be made under this sub12 section with respect to discharges involving a new

13 medical service or technology described in subclause

14 (I) that occur during the period described in sub15 clause (II) in an amount that adequately reflects the

16 estimated average cost of such service or technology;

17 and

18 ‘‘(IV) provide that discharges involving such a

19 service or technology that occur after the close of the

20 period described in subclause (II) will be classified

21 within a new or existing diagnosis-related group with

22 a weighting factor under paragraph (4)(B) that is

23 derived from cost data collected with respect to dis24 charges occurring during such period.
246

•HR 5612 IH

1 ‘‘(iii) For purposes of clause (ii)(II), the term ‘inpa2 tient hospital code’ means any code that is used with re3 spect to inpatient hospital services for which payment may

4 be made under this subsection and includes an alpha5 numeric code issued under the International Classification

6 of Diseases, 9th Revision, Clinical Modification (‘ICD–9–

7 CM’) and its subsequent revisions.

8 ‘‘(iv) For purposes of clause (ii)(III), the term ‘addi9 tional payment’ means, with respect to a discharge for a

10 new medical service or technology described in clause

11 (ii)(I), an amount that exceeds the prospective payment

12 rate otherwise applicable under this subsection to dis13 charges involving such service or technology that would

14 be made but for this subparagraph.

15 ‘‘(v) The requirement under clause (ii)(III) for an ad16 ditional payment may be satisfied by means of a new-tech17 nology group (described in subparagraph (L)), an add-on

18 payment, a payment adjustment, or any other similar

19 mechanism for increasing the amount otherwise payable

20 with respect to a discharge under this subsection. The Sec21 retary may not establish a separate fee schedule for such

22 additional payment for such services and technologies, by

23 utilizing a methodology established under subsection (a)

24 or (h) of section 1834 to determine the amount of such
247

•HR 5612 IH

1 additional payment, or by other similar mechanisms or

2 methodologies.

3 ‘‘(vi) For purposes of this subparagraph and sub4 paragraph (L), a medical service or technology will be con5 sidered a ‘new medical service or technology’ if the service

6 or technology meets criteria established by the Secretary

7 after notice and an opportunity for public comment.

8 ‘‘(L)(i) In establishing the mechanism under sub9 paragraph (K), the Secretary may establish new-tech10 nology groups into which a new medical service or tech11 nology will be classified if, based on the estimated average

12 costs incurred with respect to discharges involving such

13 service or technology, the DRG prospective payment rate

14 otherwise applicable to such discharges under this sub15 section is inadequate.

16 ‘‘(ii) Such groups—

17 ‘‘(I) shall not be based on the costs associated

18 with a specific new medical service or technology;

19 but

20 ‘‘(II) shall, in combination with the applicable

21 standardized amounts and the weighting factors as22 signed to such groups under paragraph (4)(B), re23 flect such cost cohorts as the Secretary determines

24 are appropriate for all new medical services and
248

•HR 5612 IH

1 technologies that are likely to be provided as inpa2 tient hospital services in a fiscal year.

3 ‘‘(iii) The methodology for classifying specific hos4 pital discharges within a diagnosis-related group under

5 paragraph (4)(A) or a new-technology group shall provide

6 that a specific hospital discharge may not be classified

7 within both a diagnosis-related group and a new-tech8 nology group.’’.

9 (2) PRIOR CONSULTATION.—The Secretary of

10 Health and Human Services shall consult with

11 groups representing hospitals, physicians, and manu12 facturers of new medical technologies before pub13 lishing the notice of proposed rulemaking required

14 by section 1886(d)(5)(K)(i) of the Social Security

15 Act (as added by paragraph (1)).

16 (3) CONFORMING AMENDMENT.—Section

17 1886(d)(4)(C)(i) (42 U.S.C. 1395ww(d)(4)(C)(i)) is

18 amended by striking ‘‘technology,’’ and inserting

19 ‘‘technology (including a new medical service or

20 technology under paragraph (5)(K)),’’.

21 Subtitle E—Other Provisions

22 SEC. 541. INCREASE IN REIMBURSEMENT FOR BAD DEBT.

23 Section 1861(v)(1)(T) (42 U.S.C. 1395x(v)(1)(T)) is

24 amended—

25 (1) in clause (ii), by striking ‘‘and’’ at the end;
249

•HR 5612 IH

1 (2) in clause (iii)—

2 (A) by striking ‘‘during a subsequent fiscal

3 year’’ and inserting ‘‘during fiscal year 2000’’;

4 and

5 (B) by striking the period at the end and

6 inserting ‘‘, and’’; and

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

8 clause:

9 ‘‘(iv) for cost reporting periods beginning dur10 ing a subsequent fiscal year, by 30 percent of such

11 amount otherwise allowable.’’.

12 SEC. 542. TREATMENT OF CERTAIN PHYSICIAN PATHOLOGY

13 SERVICES UNDER MEDICARE.

14 (a) IN GENERAL.—When an independent laboratory

15 furnishes the technical component of a physician pathol16 ogy service to a fee-for-service medicare beneficiary who

17 is an inpatient or outpatient of a covered hospital, the Sec18 retary of Health and Human Services shall treat such

19 component as a service for which payment shall be made

20 to the laboratory under section 1848 of the Social Security

21 Act (42 U.S.C. 1395w–4) and not as an inpatient hospital

22 service for which payment is made to the hospital under

23 section 1886(d) of such Act (42 U.S.C. 1395ww(d)) or

24 as an outpatient hospital service for which payment is
250

•HR 5612 IH

1 made to the hospital under section 1833(t) of such Act

2 (42 U.S.C. 1395l(t)).

3 (b) DEFINITIONS.—For purposes of this section:

4 (1) COVERED HOSPITAL.—The term ‘‘covered

5 hospital’’ means, with respect to an inpatient or an

6 outpatient, a hospital that had an arrangement with

7 an independent laboratory that was in effect as of

8 July 22, 1999, under which a laboratory furnished

9 the technical component of physician pathology serv10 ices to fee-for-service medicare beneficiaries who

11 were hospital inpatients or outpatients, respectively,

12 and submitted claims for payment for such compo13 nent to a medicare carrier (that has a contract with

14 the Secretary under section 1842 of the Social Secu15 rity Act, 42 U.S.C. 1395u) and not to such hospital.

16 (2) FEE-FOR-SERVICE MEDICARE BENE17 FICIARY.—The term ‘‘fee-for-service medicare bene18 ficiary’’ means an individual who—

19 (A) is entitled to benefits under part A, or

20 enrolled under part B, or both, of such title;

21 and

22 (B) is not enrolled in any of the following:

23 (i) A Medicare+Choice plan under

24 part C of such title.
251

•HR 5612 IH

1 (ii) A plan offered by an eligible orga2 nization under section 1876 of such Act

3 (42 U.S.C. 1395mm).

4 (iii) A program of all-inclusive care

5 for the elderly (PACE) under section 1894

6 of such Act (42 U.S.C. 1395eee).

7 (iv) A social health maintenance orga8 nization (SHMO) demonstration project

9 established under section 4018(b) of the

10 Omnibus Budget Reconciliation Act of

11 1987 (Public Law 100–203).

12 (c) EFFECTIVE DATE.—This section applies to serv13 ices furnished during the 2-year period beginning on Jan14 uary 1, 2001.

15 (d) GAO REPORT.—

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

17 United States shall conduct a study of the effects of

18 the previous provisions of this section on hospitals

19 and laboratories and access of fee-for-service medi20 care beneficiaries to the technical component of phy21 sician pathology services.

22 (2) REPORT.—Not later than April 1, 2002, the

23 Comptroller General shall submit to Congress a re24 port on such study. The report shall include rec25 ommendations about whether such provisions should
252

•HR 5612 IH

1 be extended after the end of the period specified in

2 subsection (c) for either or both inpatient and out3 patient hospital services, and whether the provisions

4 should be extended to other hospitals.

5 SEC. 543. EXTENSION OF ADVISORY OPINION AUTHORITY.

6 Section 1128D(b)(6) (42 U.S.C. 1320a–7d(b)(6)) is

7 amended by striking ‘‘and before the date which is 4 years

8 after such date of enactment’’.

9 SEC. 544. CHANGE IN ANNUAL MEDPAC REPORTING.

10 (a) REVISION OF DEADLINES FOR SUBMISSION OF

11 REPORTS.—

12 (1) IN GENERAL.—Section 1805(b)(1)(D) (42

13 U.S.C. 1395b–6(b)(1)(D)) is amended by striking

14 ‘‘June 1 of each year (beginning with 1998),’’ and

15 inserting ‘‘June 15 of each year,’’.

16 (2) EFFECTIVE DATE.—The amendment made

17 by paragraph (1) applies beginning with 2001.

18 (b) REQUIREMENT FOR ON THE RECORD VOTES ON

19 RECOMMENDATIONS.—Section 1805(b) (42 U.S.C.

20 1395b–6(b)) is amended by adding at the end the fol21 lowing new paragraph:

22 ‘‘(7) VOTING AND REPORTING REQUIRE23 MENTS.—With respect to each recommendation con24 tained in a report submitted under paragraph (1),

25 each member of the Commission shall vote on the
253

•HR 5612 IH

1 recommendation, and the Commission shall include,

2 by member, the results of that vote in the report

3 containing the recommendation.’’.

4 SEC. 545. DEVELOPMENT OF PATIENT ASSESSMENT IN5 STRUMENTS.

6 (a) DEVELOPMENT.—

7 (1) IN GENERAL.—Not later than January 1,

8 2005, the Secretary of Health and Human Services

9 shall submit to the Committee on Ways and Means

10 and the Committee on Commerce of the House of

11 Representatives and the Committee on Finance of

12 the Senate a report on the development of standard

13 instruments for the assessment of the health and

14 functional status of patients, for whom items and

15 services described in subsection (b) are furnished,

16 and include in the report a recommendation on the

17 use of such standard instruments for payment pur18 poses.

19 (2) DESIGN FOR COMPARISON OF COMMON ELE20 MENTS.—The Secretary shall design such standard

21 instruments in a manner such that—

22 (A) elements that are common to the items

23 and services described in subsection (b) may be

24 readily comparable and are statistically compat25 ible;
254

•HR 5612 IH

1 (B) only elements necessary to meet pro2 gram objectives are collected; and

3 (C) the standard instruments supersede

4 any other assessment instrument used before

5 that date.

6 (3) CONSULTATION.—In developing an assess7 ment instrument under paragraph (1), the Secretary

8 shall consult with the Medicare Payment Advisory

9 Commission, the Agency for Healthcare Research

10 and Quality, and qualified organizations rep11 resenting providers of services and suppliers under

12 title XVIII.

13 (b) DESCRIPTION OF SERVICES.—For purposes of

14 subsection (a), items and services described in this sub15 section are those items and services furnished to individ16 uals entitled to benefits under part A, or enrolled under

17 part B, or both of title XVIII of the Social Security Act

18 for which payment is made under such title, and include

19 the following:

20 (1) Inpatient and outpatient hospital services.

21 (2) Inpatient and outpatient rehabilitation serv22 ices.

23 (3) Covered skilled nursing facility services.

24 (4) Home health services.
255

•HR 5612 IH

1 (5) Physical or occupational therapy or speech2 language pathology services.

3 (6) Items and services furnished to such indi4 viduals determined to have end stage renal disease.

5 (7) Partial hospitalization services and other

6 mental health services.

7 (8) Any other service for which payment is

8 made under such title as the Secretary determines to

9 be appropriate.

10 SEC. 546. GAO REPORT ON IMPACT OF THE EMERGENCY

11 MEDICAL TREATMENT AND ACTIVE LABOR

12 ACT (EMTALA) ON HOSPITAL EMERGENCY DE13 PARTMENTS.

14 (a) REPORT.—The Comptroller General of the

15 United States shall submit a report to the Committee on

16 Commerce and the Committee on Ways and Means of the

17 House of Representatives and the Committee on Finance

18 of the Senate by May 1, 2001, on the effect of the Emer19 gency Medical Treatment and Active Labor Act on hos20 pitals, emergency physicians, and physicians covering

21 emergency department call throughout the United States.

22 (b) REPORT REQUIREMENTS.—The report should

23 evaluate—

24 (1) the extent to which hospitals, emergency

25 physicians, and physicians covering emergency de-
256

•HR 5612 IH

1 partment call provide uncompensated services in re2 lation to the requirements of EMTALA;

3 (2) the extent to which the regulatory require4 ments and enforcement of EMTALA have expanded

5 beyond the legislation’s original intent;

6 (3) estimates for the total dollar amount of

7 EMTALA-related care uncompensated costs to

8 emergency physicians, physicians covering emer9 gency department call, hospital emergency depart10 ments, and other hospital services;

11 (4) the extent to which different portions of the

12 United States may be experiencing different levels of

13 uncompensated EMTALA-related care;

14 (5) the extent to which EMTALA would be

15 classified as an unfunded mandate if it were enacted

16 today;

17 (6) the extent to which States have programs to

18 provide financial support for such uncompensated

19 care;

20 (7) possible sources of funds, including medi21 care hospital bad debt accounts, that are available to

22 hospitals to assist with the cost of such uncompen23 sated care; and

24 (8) the financial strain that illegal immigration

25 populations, the uninsured, and the underinsured
257

•HR 5612 IH

1 place on hospital emergency departments, other hos2 pital services, emergency physicians, and physicians

3 covering emergency department call.

4 (c) DEFINITION.—In this section, the terms ‘‘Emer5 gency Medical Treatment and Active Labor Act’’ and

6 ‘‘EMTALA’’ mean section 1867 of the Social Security Act

7 (42 U.S.C. 1395dd).

8 SEC. 547. APPLICATION OF BLOODBORNE PATHOGEN

9 STANDARD TO CERTAIN HOSPITALS.

10 (a) IN GENERAL.—Section 1866 (42 U.S.C. 1395cc)

11 is amended—

12 (1) in subsection (a)(1)—

13 (A) in subparagraph (R), by striking

14 ‘‘and’’ at the end;

15 (B) in subparagraph (S), by striking the

16 period at the end and inserting ‘‘, and’’; and

17 (C) by inserting after subparagraph (S)

18 the following new subparagraph:

19 ‘‘(T) in the case of hospitals that are not other20 wise subject to regulation by the Occupational Safe21 ty and Health Administration, to comply with the

22 Bloodborne Pathogens standard under section

23 1910.1030 of title 29 of the Code of Federal Regula24 tions (or as subsequently redesignated).’’; and
258

•HR 5612 IH

1 (2) by adding at the end of subsection (b) the

2 following new paragraph:

3 ‘‘(4) With respect to a failure to comply with the re4 quirement of subsection (a)(1)(T), the Secretary shall not

5 terminate an agreement under this section but shall im6 pose a monetary fine in an amount similar to the amount

7 of civil penalties that may be imposed under section 17

8 of the Occupational Safety and Health Act of 1970 for

9 a violation of the standard referred to in such subsection

10 by a hospital subject to regulation by the Occupational

11 Safety and Health Administration. Such penalty shall be

12 imposed and collected in the same manner as civil money

13 penalties under subsection (a) of section 1128A are im14 posed and collected under that section.’’.

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

16 this section apply to hospitals as of January 1, 2002.
259

•HR 5612 IH

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
260

•HR 5612 IH

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
261

•HR 5612 IH

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. 10-YEAR PHASE-IN OF RISK ADJUSTMENT.

12 Section 1853(a)(3)(C)(ii) (42 U.S.C. 1395w–

13 23(a)(3)(C)(ii)) is amended—

14 (1) in subclause (I), by striking ‘‘and 2001’’

15 and inserting ‘‘and each succeeding year through the

16 first year in which risk adjustment is based on data

17 from inpatient hospital and ambulatory settings’’;

18 and

19 (2) by amending subclause (II) to read as fol20 lows:

21 ‘‘(II) beginning after such first

22 year, insofar as such risk adjustment

23 is based on data from inpatient hos24 pital and ambulatory settings, the

25 methodology shall be phased in equal
262

•HR 5612 IH

1 increments over a 10-year period that

2 begins with such first year.’’.

3 SEC. 603. TRANSITION TO REVISED MEDICARE+CHOICE

4 PAYMENT RATES.

5 (a) ANNOUNCEMENT OF REVISED

6 MEDICARE+CHOICE PAYMENT RATES.—Within 2 weeks

7 after the date of the enactment of this Act, the Secretary

8 of Health and Human Services shall determine, and shall

9 announce (in a manner intended to provide notice to inter10 ested parties) Medicare+Choice capitation rates under

11 section 1853 of the Social Security Act (42 U.S.C.

12 1395w–23) for 2001, revised in accordance with the provi13 sions of this Act.

14 (b) REENTRY INTO PROGRAM PERMITTED FOR

15 MEDICARE+CHOICE PROGRAMS IN 2000.—A

16 Medicare+Choice organization that provided notice to the

17 Secretary of Health and Human Services before the date

18 of the enactment of this Act that it was terminating its

19 contract under part C of title XVIII of the Social Security

20 Act or was reducing the service area of a

21 Medicare+Choice plan offered under such part shall be

22 permitted to continue participation under such part, or to

23 maintain the service area of such plan, for 2001 if it pro24 vides the Secretary with the information described in sec25 tion 1854(a)(1) of the Social Security Act (42 U.S.C.
263

•HR 5612 IH

1 1395w–24(a)(1)) within 2 weeks after the date revised

2 rates are announced by the Secretary under subsection

3 (a).

4 (c) REVISED SUBMISSION OF PROPOSED PREMIUMS

5 AND RELATED INFORMATION.—If—

6 (1) a Medicare+Choice organization provided

7 notice to the Secretary of Health and Human Serv8 ices as of July 3, 2000, that it was renewing its con9 tract under part C of title XVIII of the Social Secu10 rity Act for all or part of the service area or areas

11 served under its current contract, and

12 (2) any part of the service area or areas ad13 dressed in such notice includes a payment area for

14 which the Medicare+Choice capitation rate under

15 section 1853(c) of such Act (42 U.S.C. 1395w–

16 23(c)) for 2001, as determined under subsection (a),

17 is higher than the rate previously determined for

18 such year,

19 such organization shall revise its submission of the infor20 mation described in section 1854(a)(1) of the Social Secu21 rity Act (42 U.S.C. 1395w–24(a)(1)), and shall submit

22 such revised information to the Secretary, within 2 weeks

23 after the date revised rates are announced by the Sec24 retary under subsection (a).
264

•HR 5612 IH

1 (d) DISREGARD OF NEW RATE ANNOUNCEMENT IN

2 APPLYING PASS-THROUGH FOR NEW NATIONAL COV3 ERAGE DETERMINATIONS.—For purposes of applying sec4 tion 1852(a)(5) of the Social Security Act (42 U.S.C.

5 1395w–22(a)(5)), the announcement of revised rates

6 under subsection (a) shall not be treated as an announce7 ment under section 1853(b) of such Act (42 U.S.C.

8 1395w–23(b)).

9 SEC. 604. REVISION OF PAYMENT RATES FOR ESRD PA10 TIENTS ENROLLED IN MEDICARE+CHOICE

11 PLANS.

12 (a) IN GENERAL.—Section 1853(a)(1)(B) (42 U.S.C.

13 1395w–23(a)(1)(B)) is amended by adding at the end the

14 following: ‘‘In establishing such rates, the Secretary shall

15 provide for appropriate adjustments to increase each rate

16 to reflect the demonstration rate (including the risk ad17 justment methodology associated with such rate) of the

18 social health maintenance organization end-stage renal

19 disease capitation demonstrations (established by section

20 2355 of the Deficit Reduction Act of 1984, as amended

21 by section 13567(b) of the Omnibus Budget Reconciliation

22 Act of 1993), and shall compute such rates by taking into

23 account such factors as renal treatment modality, age, and

24 the underlying cause of the end-stage renal disease.’’.
265

•HR 5612 IH

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

2 subsection (a) shall apply to payments for months begin3 ning with January 2002.

4 (c) PUBLICATION.—Not later than 6 months after

5 the date of the enactment of this Act, the Secretary of

6 Health and Human Services shall publish for public com7 ment a description of the appropriate adjustments de8 scribed in the last sentence of section 1853(a)(1)(B) of

9 the Social Security Act (42 U.S.C. 1395w–23(a)(1)(B)),

10 as added by subsection (a). The Secretary shall publish

11 such adjustments in final form by not later than July 1,

12 2001, so that the amendment made by subsection (a) is

13 implemented on a timely basis consistent with subsection

14 (b).

15 SEC. 605. PERMITTING PREMIUM REDUCTIONS AS ADDI16 TIONAL BENEFITS UNDER

17 MEDICARE+CHOICE PLANS.

18 (a) IN GENERAL.—

19 (1) AUTHORIZATION OF PART B PREMIUM RE20 DUCTIONS.—Section 1854(f)(1) (42 U.S.C. 1395w–

21 24(f)(1)) is amended—

22 (A) by redesignating subparagraph (E) as

23 subparagraph (F); and

24 (B) by inserting after subparagraph (D)

25 the following new subparagraph:
266

•HR 5612 IH

1 ‘‘(E) PREMIUM REDUCTIONS.—

2 ‘‘(i) IN GENERAL.—Subject to clause

3 (ii), as part of providing any additional

4 benefits required under subparagraph (A),

5 a Medicare+Choice organization may elect

6 a reduction in its payments under section

7 1853(a)(1)(A) with respect to a

8 Medicare+Choice plan and the Secretary

9 shall apply such reduction to reduce the

10 premium under section 1839 of each en11 rollee in such plan as provided in section

12 1840(i).

13 ‘‘(ii) AMOUNT OF REDUCTION.—The

14 amount of the reduction under clause (i)

15 with respect to any enrollee in a

16 Medicare+Choice plan—

17 ‘‘(I) may not exceed 125 percent

18 of the premium described under sec19 tion 1839(a)(3); and

20 ‘‘(II) shall apply uniformly to

21 each enrollee of the Medicare+Choice

22 plan to which such reduction ap23 plies.’’.

24 (2) CONFORMING AMENDMENTS.—
267

•HR 5612 IH

1 (A) ADJUSTMENT OF PAYMENTS TO

2 MEDICARE+CHOICE ORGANIZATIONS.—Section

3 1853(a)(1)(A) (42 U.S.C. 1395w–23(a)(1)(A))

4 is amended by inserting ‘‘reduced by the

5 amount of any reduction elected under section

6 1854(f)(1)(E) and’’ after ‘‘for that area,’’.

7 (B) ADJUSTMENT AND PAYMENT OF PART

8 B PREMIUMS.—

9 (i) ADJUSTMENT OF PREMIUMS.—

10 Section 1839(a)(2) (42 U.S.C.

11 1395r(a)(2)) is amended by striking

12 ‘‘shall’’ and all that follows and inserting

13 the following: ‘‘shall be the amount deter14 mined under paragraph (3), adjusted as

15 required in accordance with subsections

16 (b), (c), and (f), and to reflect 80 percent

17 of any reduction elected under section

18 1854(f)(1)(E).’’.

19 (ii) PAYMENT OF PREMIUMS.—Section

20 1840 (42 U.S.C. 1395s) is amended by

21 adding at the end the following new sub22 section:

23 ‘‘(i) In the case of an individual enrolled in a

24 Medicare+Choice plan, the Secretary shall provide for

25 necessary adjustments of the monthly beneficiary pre-
268

•HR 5612 IH

1 mium to reflect 80 percent of any reduction elected under

2 section 1854(f)(1)(E). This premium adjustment may be

3 provided directly or as an adjustment to any social secu4 rity, railroad retirement, and civil service retirement bene5 fits, to the extent which the Secretary determines that

6 such an adjustment is appropriate with the concurrence

7 of the agencies responsible for the administration of such

8 benefits.’’.

9 (C) INFORMATION COMPARING PLAN PRE10 MIUMS UNDER PART C.—Section 1851(d)(4)(B)

11 (42 U.S.C. 1395w–21(d)(4)(B)) is amended—

12 (i) by striking ‘‘PREMIUMS.—The’’

13 and inserting ‘‘PREMIUMS.—

14 ‘‘(i) IN GENERAL.—The’’; and

15 (ii) by adding at the end the following

16 new clause:

17 ‘‘(ii) REDUCTIONS.—The reduction in

18 part B premiums, if any.’’.

19 (D) TREATMENT OF REDUCTION FOR PUR20 POSES OF DETERMINING GOVERNMENT CON21 TRIBUTION UNDER PART B.—Section 1844 (42

22 U.S.C. 1395w) is amended by adding at the

23 end the following new subsection:

24 ‘‘(c) The Secretary shall determine the Government

25 contribution under subparagraphs (A) and (B) of sub-
269

•HR 5612 IH

1 section (a)(1) without regard to any premium reduction

2 resulting from an election under section 1854(f)(1)(E).’’.

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

4 subsection (a) shall apply to years beginning with 2002.

5 SEC. 606. FULL IMPLEMENTATION OF RISK ADJUSTMENT

6 FOR CONGESTIVE HEART FAILURE ENROLL7 EES FOR 2001.

8 (a) IN GENERAL.—Section 1853(a)(3)(C) (42 U.S.C.

9 1395w–23(a)(3)(C)) is amended—

10 (1) in clause (ii), by striking ‘‘Such risk adjust11 ment’’ and inserting ‘‘Except as provided in clause

12 (iii), such risk adjustment’’; and

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

14 clause:

15 ‘‘(iii) FULL IMPLEMENTATION OF

16 RISK ADJUSTMENT FOR CONGESTIVE

17 HEART FAILURE ENROLLEES FOR 2001.—

18 ‘‘(I) EXEMPTION FROM PHASE19 IN.—Subject to subclause (II), the

20 Secretary shall fully implement the

21 risk adjustment methodology de22 scribed in clause (i) with respect to

23 each individual who has had a quali24 fying congestive heart failure inpa25 tient diagnosis (as determined by the
270

•HR 5612 IH

1 Secretary under such risk adjustment

2 methodology) during the period begin3 ning on July 1, 1999, and ending on

4 June 30, 2000, and who is enrolled in

5 a coordinated care plan that is the

6 only coordinated care plan offered on

7 January 1, 2001, in the service area

8 of the individual.

9 ‘‘(II) PERIOD OF APPLICATION.—

10 Subclause (I) shall only apply during

11 the 1-year period beginning on Janu12 ary 1, 2001.’’.

13 (b) EXCLUSION FROM DETERMINATION OF THE

14 BUDGET NEUTRALITY FACTOR.—Section 1853(c)(5) (42

15 U.S.C. 1395w–23(c)(5)) is amended by striking ‘‘sub16 section (i)’’ and inserting ‘‘subsections (a)(3)(C)(iii) and

17 (i)’’.

18 SEC. 607. EXPANSION OF APPLICATION OF

19 MEDICARE+CHOICE NEW ENTRY BONUS.

20 (a) IN GENERAL.—Section 1853(i)(1) (42 U.S.C.

21 1395w–23(i)(1)) is amended in the matter preceding sub22 paragraph (A) by inserting ‘‘, or filed notice with the Sec23 retary as of October 3, 2000, that they will not be offering

24 such a plan as of January 1, 2001’’ after ‘‘January 1,

25 2000’’.
271

•HR 5612 IH

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

2 subsection (a) shall apply as if included in the enactment

3 of BBRA.

4 SEC. 608. REPORT ON INCLUSION OF CERTAIN COSTS OF

5 THE DEPARTMENT OF VETERANS AFFAIRS

6 AND MILITARY FACILITY SERVICES IN CAL7 CULATING MEDICARE+CHOICE PAYMENT

8 RATES.

9 The Secretary of Health and Human Services shall

10 report to Congress by not later than January 1, 2003,

11 on a method to phase-in the costs of military facility serv12 ices furnished by the Department of Veterans Affairs, and

13 the costs of military facility services furnished by the De14 partment of Defense, to medicare-eligible beneficiaries in

15 the calculation of an area’s Medicare+Choice capitation

16 payment. Such report shall include on a county-by-county

17 basis—

18 (1) the actual or estimated cost of such services

19 to medicare-eligible beneficiaries;

20 (2) the change in Medicare+Choice capitation

21 payment rates if such costs are included in the cal22 culation of payment rates;

23 (3) one or more proposals for the implementa24 tion of payment adjustments to Medicare+Choice

25 plans in counties where the payment rate has been
272

•HR 5612 IH

1 affected due to the failure to calculate the cost of

2 such services to medicare-eligible beneficiaries; and

3 (4) a system to ensure that when a

4 Medicare+Choice enrollee receives covered services

5 through a facility of the Department of Veterans Af6 fairs or the Department of Defense there is an ap7 propriate payment recovery to the medicare program

8 under title XVIII of the Social Security Act.

9 Subtitle B—Other Medicare+Choice

10 Reforms

11 SEC. 611. PAYMENT OF ADDITIONAL AMOUNTS FOR NEW

12 BENEFITS COVERED DURING A CONTRACT

13 TERM.

14 (a) IN GENERAL.—Section 1853(c)(7) (42 U.S.C.

15 1395w–23(c)(7)) is amended to read as follows:

16 ‘‘(7) ADJUSTMENT FOR NATIONAL COVERAGE

17 DETERMINATIONS AND LEGISLATIVE CHANGES IN

18 BENEFITS.—If the Secretary makes a determination

19 with respect to coverage under this title or there is

20 a change in benefits required to be provided under

21 this part that the Secretary projects will result in a

22 significant increase in the costs to Medicare+Choice

23 of providing benefits under contracts under this part

24 (for periods after any period described in section

25 1852(a)(5)), the Secretary shall adjust appropriately
273

•HR 5612 IH

1 the payments to such organizations under this part.

2 Such projection and adjustment shall be based on an

3 analysis by the Chief Actuary of the Health Care Fi4 nancing Administration of the actuarial costs associ5 ated with the new benefits.’’.

6 (b) CONFORMING AMENDMENT.—Section 1852(a)(5)

7 (42 U.S.C. 1395w–22(a)(5)) is amended—

8 (1) in the heading, by inserting ‘‘AND LEGISLA9 TIVE CHANGES IN BENEFITS’’ after ‘‘NATIONAL COV10 ERAGE DETERMINATIONS’’;

11 (2) by inserting ‘‘or legislative change in bene12 fits required to be provided under this part’’ after

13 ‘‘national coverage determination’’;

14 (3) in subparagraph (A), by inserting ‘‘or legis15 lative change in benefits’’ after ‘‘such determina16 tion’’;

17 (4) in subparagraph (B), by inserting ‘‘or legis18 lative change’’ after ‘‘if such coverage determina19 tion’’; and

20 (5) by adding at the end the following:

21 ‘‘The projection under the previous sentence shall be

22 based on an analysis by the Chief Actuary of the

23 Health Care Financing Administration of the actu24 arial costs associated with the coverage determina25 tion or legislative change in benefits.’’.
274

•HR 5612 IH

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

2 this section are effective on the date of the enactment of

3 this Act and apply to national coverage determinations

4 and legislative changes in benefits occurring on or after

5 such date.

6 SEC. 612. RESTRICTION ON IMPLEMENTATION OF SIGNIFI7 CANT NEW REGULATORY REQUIREMENTS

8 MIDYEAR.

9 (a) IN GENERAL.—Section 1856(b) (42 U.S.C.

10 1395w–26(b)) is amended by adding at the end the fol11 lowing new paragraph:

12 ‘‘(4) PROHIBITION OF MIDYEAR IMPLEMENTA13 TION OF SIGNIFICANT NEW REGULATORY REQUIRE14 MENTS.—The Secretary may not implement, other

15 than at the beginning of a calendar year, regulations

16 under this section that impose new, significant regu17 latory requirements on a Medicare+Choice organiza18 tion or plan.’’.

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

20 subsection (a) takes effect on the date of the enactment

21 of this Act.
275

•HR 5612 IH

1 SEC. 613. TIMELY APPROVAL OF MARKETING MATERIAL

2 THAT FOLLOWS MODEL MARKETING LAN3 GUAGE.

4 (a) IN GENERAL.—Section 1851(h) (42 U.S.C.

5 1395w–21(h)) is amended—

6 (1) in paragraph (1)(A), by inserting ‘‘(or 10

7 days in the case described in paragraph (5))’’ after

8 ‘‘45 days’’; and

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

10 paragraph:

11 ‘‘(5) SPECIAL TREATMENT OF MARKETING MA12 TERIAL FOLLOWING MODEL MARKETING LAN13 GUAGE.—In the case of marketing material of an or14 ganization that uses, without modification, proposed

15 model language specified by the Secretary, the pe16 riod specified in paragraph (1)(A) shall be reduced

17 from 45 days to 10 days.’’.

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

19 subsection (a) apply to marketing material submitted on

20 or after January 1, 2001.

21 SEC. 614. AVOIDING DUPLICATIVE REGULATION.

22 (a) IN GENERAL.—Section 1856(b)(3)(B) (42 U.S.C.

23 1395w–26(b)(3)(B)) is amended—

24 (1) in clause (i), by inserting ‘‘(including cost25 sharing requirements)’’ after ‘‘Benefit require26 ments’’; and
276

•HR 5612 IH

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

2 clause:

3 ‘‘(iv) Requirements relating to mar4 keting materials and summaries and sched5 ules of benefits regarding a

6 Medicare+Choice plan.’’.

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

8 subsection (a) take effect on the date of the enactment

9 of this Act.

10 SEC. 615. ELECTION OF UNIFORM LOCAL COVERAGE POL11 ICY FOR MEDICARE+CHOICE PLAN COVERING

12 MULTIPLE LOCALITIES.

13 Section 1852(a)(2) (42 U.S.C. 1395w–22(a)(2)) is

14 amended by adding at the end the following new subpara15 graph:

16 ‘‘(C) ELECTION OF UNIFORM COVERAGE

17 POLICY.—In the case of a Medicare+Choice or18 ganization that offers a Medicare+Choice plan

19 in an area in which more than one local cov20 erage policy is applied with respect to different

21 parts of the area, the organization may elect to

22 have the local coverage policy for the part of

23 the area that is most beneficial to

24 Medicare+Choice enrollees (as identified by the

25 Secretary) apply with respect to all
277

•HR 5612 IH

1 Medicare+Choice enrollees enrolled in the

2 plan.’’.

3 SEC. 616. ELIMINATING HEALTH DISPARITIES IN

4 MEDICARE+CHOICE PROGRAM.

5 (a) QUALITY ASSURANCE PROGRAM FOCUS ON RA6 CIAL AND ETHNIC MINORITIES.—Subparagraphs (A) and

7 (B) of section 1852(e)(2) (42 U.S.C. 1395w–22(e)(2)) are

8 each amended by adding at the end the following:

9 ‘‘Such program shall include a separate focus

10 (with respect to all the elements described in

11 this subparagraph) on racial and ethnic minori12 ties.’’.

13 (b) REPORT.—Section 1852(e) (42 U.S.C. 1395w–

14 22(e)) is amended by adding at the end the following new

15 paragraph:

16 ‘‘(5) REPORT TO CONGRESS.—

17 ‘‘(A) IN GENERAL.—Not later than 2 years

18 after the date of the enactment of this para19 graph, and biennially thereafter, the Secretary

20 shall submit to Congress a report regarding

21 how quality assurance programs conducted

22 under this subsection focus on racial and ethnic

23 minorities.

24 ‘‘(B) CONTENTS OF REPORT.—Each such

25 report shall include the following:
278

•HR 5612 IH

1 ‘‘(i) A description of the means by

2 which such programs focus on such racial

3 and ethnic minorities.

4 ‘‘(ii) An evaluation of the impact of

5 such programs on eliminating health dis6 parities and on improving health outcomes,

7 continuity and coordination of care, man8 agement of chronic conditions, and con9 sumer satisfaction.

10 ‘‘(iii) Recommendations on ways to re11 duce clinical outcome disparities among ra12 cial and ethnic minorities.’’.

13 SEC. 617. MEDICARE+CHOICE PROGRAM COMPATIBILITY

14 WITH EMPLOYER OR UNION GROUP HEALTH

15 PLANS.

16 (a) IN GENERAL.—Section 1857 (42 U.S.C. 1395w–

17 27) is amended by adding at the end the following new

18 subsection:

19 ‘‘(i) MEDICARE+CHOICE PROGRAM COMPATIBILITY

20 WITH EMPLOYER OR UNION GROUP HEALTH PLANS.—

21 To facilitate the offering of Medicare+Choice plans under

22 contracts between Medicare+Choice organizations and

23 employers, labor organizations, or the trustees of a fund

24 established by 1 or more employers or labor organizations

25 (or combination thereof) to furnish benefits to the entity’s
279

•HR 5612 IH

1 employees, former employees (or combination thereof) or

2 members or former members (or combination thereof) of

3 the labor organizations, the Secretary may waive or mod4 ify requirements that hinder the design of, the offering

5 of, or the enrollment in such Medicare+Choice plans.’’.

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

7 subsection (a) applies with respect to years beginning with

8 2001.

9 SEC. 618. SPECIAL MEDIGAP ENROLLMENT ANTIDISCRIMI10 NATION PROVISION FOR CERTAIN BENE11 FICIARIES.

12 (a) DISENROLLMENT WINDOW IN ACCORDANCE

13 WITH BENEFICIARY’S CIRCUMSTANCE.—Section

14 1882(s)(3) (42 U.S.C. 1395ss(s)(3)) is amended—

15 (1) in subparagraph (A), in the matter fol16 lowing clause (iii), by striking ‘‘, subject to subpara17 graph (E), seeks to enroll under the policy not later

18 than 63 days after the date of the termination of en19 rollment described in such subparagraph’’ and in20 serting ‘‘seeks to enroll under the policy during the

21 period specified in subparagraph (E)’’; and

22 (2) by striking subparagraph (E) and inserting

23 the following new subparagraph:

24 ‘‘(E) For purposes of subparagraph (A), the time pe25 riod specified in this subparagraph is—
280

•HR 5612 IH

1 ‘‘(i) in the case of an individual described in

2 subparagraph (B)(i), the period beginning on the

3 date the individual receives a notice of termination

4 or cessation of all supplemental health benefits (or,

5 if no such notice is received, notice that a claim has

6 been denied because of such a termination or ces7 sation) and ending on the date that is 63 days after

8 the applicable notice;

9 ‘‘(ii) in the case of an individual described in

10 clause (ii), (iii), (v), or (vi) of subparagraph (B)

11 whose enrollment is terminated involuntarily, the pe12 riod beginning on the date that the individual re13 ceives a notice of termination and ending on the

14 date that is 63 days after the date the applicable

15 coverage is terminated;

16 ‘‘(iii) in the case of an individual described in

17 subparagraph (B)(iv)(I), the period beginning on the

18 earlier of (I) the date that the individual receives a

19 notice of termination, a notice of the issuer’s bank20 ruptcy or insolvency, or other such similar notice, if

21 any, and (II) the date that the applicable coverage

22 is terminated, and ending on the date that is 63

23 days after the date the coverage is terminated;

24 ‘‘(iv) in the case of an individual described in

25 clause (ii), (iii), (iv)(II), (iv)(III), (v), or (vi) of sub-
281

•HR 5612 IH

1 paragraph (B) who disenrolls voluntarily, the period

2 beginning on the date that is 60 days before the ef3 fective date of the disenrollment and ending on the

4 date that is 63 days after such effective date; and

5 ‘‘(v) in the case of an individual described in

6 subparagraph (B) but not described in the preceding

7 provisions of this subparagraph, the period begin8 ning on the effective date of the disenrollment and

9 ending on the date that is 63 days after such effec10 tive date.’’.

11 (b) EXTENDED MEDIGAP ACCESS FOR INTERRUPTED

12 TRIAL PERIODS.—Section 1882(s)(3) (42 U.S.C.

13 1395ss(s)(3)), as amended by subsection (a), is further

14 amended by adding at the end the following new subpara15 graph:

16 ‘‘(F)(i) Subject to clause (ii), for purposes of this

17 paragraph—

18 ‘‘(I) in the case of an individual described in

19 subparagraph (B)(v) (or deemed to be so described,

20 pursuant to this subparagraph) whose enrollment

21 with an organization or provider described in sub22 clause (II) of such subparagraph is involuntarily ter23 minated within the first 12 months of such enroll24 ment, and who, without an intervening enrollment,

25 enrolls with another such organization or provider,
282

•HR 5612 IH

1 such subsequent enrollment shall be deemed to be an

2 initial enrollment described in such subparagraph;

3 and

4 ‘‘(II) in the case of an individual described in

5 clause (vi) of subparagraph (B) (or deemed to be so

6 described, pursuant to this subparagraph) whose en7 rollment with a plan or in a program described in

8 such clause is involuntarily terminated within the

9 first 12 months of such enrollment, and who, with10 out an intervening enrollment, enrolls in another

11 such plan or program, such subsequent enrollment

12 shall be deemed to be an initial enrollment described

13 in such clause.

14 ‘‘(ii) For purposes of clauses (v) and (vi) of subpara15 graph (B), no enrollment of an individual with an organi16 zation or provider described in clause (v)(II), or with a

17 plan or in a program described in clause (vi), may be

18 deemed to be an initial enrollment under this clause after

19 the 2-year period beginning on the date on which the indi20 vidual first enrolled with such an organization, provider,

21 plan, or program.’’.
283

•HR 5612 IH

1 SEC. 619. RESTORING EFFECTIVE DATE OF ELECTIONS AND

2 CHANGES OF ELECTIONS OF

3 MEDICARE+CHOICE PLANS.

4 (a) OPEN ENROLLMENT.—Section 1851(f)(2) (42

5 U.S.C. 1395w–21(f)(2)) is amended by striking ‘‘, except

6 that if such election or change is made after the 10th day

7 of any calendar month, then the election or change shall

8 not take effect until the first day of the second calendar

9 month following the date on which the election or change

10 is made’’.

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

12 this section shall apply to elections and changes of cov13 erage made on or after January 1, 2001.

14 SEC. 620. PERMITTING ESRD BENEFICIARIES TO ENROLL

15 IN ANOTHER MEDICARE+CHOICE PLAN IF

16 THE PLAN IN WHICH THEY ARE ENROLLED IS

17 TERMINATED.

18 (a) IN GENERAL.—Section 1851(a)(3)(B) (42 U.S.C.

19 1395w–21(a)(3)(B)) is amended by striking ‘‘except that’’

20 and all that follows and inserting the following: ‘‘except

21 that—

22 ‘‘(i) an individual who develops end23 stage renal disease while enrolled in a

24 Medicare+Choice plan may continue to be

25 enrolled in that plan; and
284

•HR 5612 IH

1 ‘‘(ii) in the case of such an individual

2 who is enrolled in a Medicare+Choice plan

3 under clause (i) (or subsequently under

4 this clause), if the enrollment is discon5 tinued under circumstances described in

6 section 1851(e)(4)(A), then the individual

7 will be treated as a ‘Medicare+Choice eli8 gible individual’ for purposes of electing to

9 continue enrollment in another

10 Medicare+Choice plan.’’.

11 (b) EFFECTIVE DATE.—

12 (1) IN GENERAL.—The amendment made by

13 subsection (a) shall apply to terminations and

14 discontinuations occurring on or after the date of

15 the enactment of this Act.

16 (2) APPLICATION TO PRIOR PLAN TERMI17 NATIONS.—Clause (ii) of section 1851(a)(3)(B) of

18 the Social Security Act (as inserted by subsection

19 (a)) also shall apply to individuals whose enrollment

20 in a Medicare+Choice plan was terminated or dis21 continued after December 31, 1998, and before the

22 date of the enactment of this Act. In applying this

23 paragraph, such an individual shall be treated, for

24 purposes of part C of title XVIII of the Social Secu-
285

•HR 5612 IH

1 rity Act, as having discontinued enrollment in such

2 a plan as of the date of the enactment of this Act.

3 SEC. 621. PROVIDING CHOICE FOR SKILLED NURSING FA4 CILITY SERVICES UNDER THE

5 MEDICARE+CHOICE PROGRAM.

6 (a) IN GENERAL.—Section 1852 (42 U.S.C. 1395w–

7 22) is amended by adding at the end the following new

8 subsection:

9 ‘‘(l) RETURN TO HOME SKILLED NURSING FACILI10 TIES FOR COVERED POST-HOSPITAL EXTENDED CARE

11 SERVICES.—

12 ‘‘(1) ENSURING RETURN TO HOME SNF.—

13 ‘‘(A) IN GENERAL.—In providing coverage

14 of post-hospital extended care services, a

15 Medicare+Choice plan shall provide for such

16 coverage through a home skilled nursing facility

17 if the following conditions are met:

18 ‘‘(i) ENROLLEE ELECTION.—The en19 rollee elects to receive such coverage

20 through such facility.

21 ‘‘(ii) SNF AGREEMENT.—The facility

22 has a contract with the Medicare+Choice

23 organization for the provision of such serv24 ices, or the facility agrees to accept sub25 stantially similar payment under the same
286

•HR 5612 IH

1 terms and conditions that apply to simi2 larly situated skilled nursing facilities that

3 are under contract with the

4 Medicare+Choice organization for the pro5 vision of such services and through which

6 the enrollee would otherwise receive such

7 services.

8 ‘‘(B) MANNER OF PAYMENT TO HOME

9 SNF.—The organization shall provide payment

10 to the home skilled nursing facility consistent

11 with the contract or the agreement described in

12 subparagraph (A)(ii), as the case may be.

13 ‘‘(2) NO LESS FAVORABLE COVERAGE.—The

14 coverage provided under paragraph (1) (including

15 scope of services, cost-sharing, and other criteria of

16 coverage) shall be no less favorable to the enrollee

17 than the coverage that would be provided to the en18 rollee with respect to a skilled nursing facility the

19 post-hospital extended care services of which are

20 otherwise covered under the Medicare+Choice plan.

21 ‘‘(3) RULE OF CONSTRUCTION.—Nothing in

22 this subsection shall be construed to do the fol23 lowing:

24 ‘‘(A) To require coverage through a skilled

25 nursing facility that is not otherwise qualified
287

•HR 5612 IH

1 to provide benefits under part A for medicare

2 beneficiaries not enrolled in a Medicare+Choice

3 plan.

4 ‘‘(B) To prevent a skilled nursing facility

5 from refusing to accept, or imposing conditions

6 upon the acceptance of, an enrollee for the re7 ceipt of post-hospital extended care services.

8 ‘‘(4) DEFINITIONS.—In this subsection:

9 ‘‘(A) HOME SKILLED NURSING FACIL10 ITY.—The term ‘home skilled nursing facility’

11 means, with respect to an enrollee who is enti12 tled to receive post-hospital extended care serv13 ices under a Medicare+Choice plan, any of the

14 following skilled nursing facilities:

15 ‘‘(i) SNF RESIDENCE AT TIME OF AD16 MISSION.—The skilled nursing facility in

17 which the enrollee resided at the time of

18 admission to the hospital preceding the re19 ceipt of such post-hospital extended care

20 services.

21 ‘‘(ii) SNF IN CONTINUING CARE RE22 TIREMENT COMMUNITY.—A skilled nursing

23 facility that is providing such services

24 through a continuing care retirement com25 munity (as defined in subparagraph (B))
288

•HR 5612 IH

1 which provided residence to the enrollee at

2 the time of such admission.

3 ‘‘(iii) SNF RESIDENCE OF SPOUSE AT

4 TIME OF DISCHARGE.—The skilled nursing

5 facility in which the spouse of the enrollee

6 is residing at the time of discharge from

7 such hospital.

8 ‘‘(B) CONTINUING CARE RETIREMENT

9 COMMUNITY.—The term ‘continuing care retire10 ment community’ means, with respect to an en11 rollee in a Medicare+Choice plan, an arrange12 ment under which housing and health-related

13 services are provided (or arranged) through an

14 organization for the enrollee under an agree15 ment that is effective for the life of the enrollee

16 or for a specified period.’’.

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

18 subsection (a) applies with respect to contracts entered

19 into or renewed on or after the date of the enactment of

20 this Act.

21 (c) MEDPAC STUDY.—

22 (1) STUDY.—The Medicare Payment Advisory

23 Commission shall conduct a study analyzing the ef24 fects of the amendment made by subsection (a) on

25 Medicare+Choice organizations. In conducting such
289

•HR 5612 IH

1 study, the Commission shall examine the effects (if

2 any) such amendment has had on—

3 (A) the scope of additional benefits pro4 vided under the Medicare+Choice program;

5 (B) the administrative and other costs in6 curred by Medicare+Choice organizations;

7 (C) the contractual relationships between

8 such organizations and skilled nursing facilities.

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

10 date of the enactment of this Act, the Commission

11 shall submit to Congress a report on the study con12 ducted under paragraph (1).

13 SEC. 622. PROVIDING FOR ACCOUNTABILITY OF

14 MEDICARE+CHOICE PLANS.

15 (a) MANDATORY REVIEW OF ACR SUBMISSIONS BY

16 THE CHIEF ACTUARY OF THE HEALTH CARE FINANCING

17 ADMINISTRATION.—Section 1854(a)(5)(A) (42 U.S.C.

18 1395w–24(a)(5)(A)) is amended—

19 (1) by striking ‘‘value’’ and inserting ‘‘values’’;

20 and

21 (2) by adding at the end the following: ‘‘The

22 Chief Actuary of the Health Care Financing Admin23 istration shall review the actuarial assumptions and

24 data used by the Medicare+Choice organization with

25 respect to such rates, amounts, and values so sub-
290

•HR 5612 IH

1 mitted to determine the appropriateness of such as2 sumptions and data.’’.

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

4 subsection (a) applies to submissions made on or after

5 January 1, 2001.

6 SEC. 623. CIVIL MONETARY PENALTIES FOR CONTRACT DE7 FAULT BY A MEDICARE+CHOICE ORGANIZA8 TION.

9 (a) IN GENERAL.—Section 1857(g)(3) is amended by

10 adding at the end the following new subparagraph:

11 ‘‘(D) Civil monetary penalties of up to

12 $25,000 per enrollee or $100,000 per organiza13 tion, whichever is greater, where the finding

14 under subsection (c)(2)(A) is based on the orga15 nization’s defaulting on its contract.’’.

16 Subtitle C—Other Managed Care

17 Reforms

18 SEC. 631. 1-YEAR EXTENSION OF SOCIAL HEALTH MAINTE19 NANCE ORGANIZATION (SHMO) DEMONSTRA20 TION PROJECT.

21 Section 4018(b)(1) of the Omnibus Budget Reconcili22 ation Act of 1987, as amended by section 531(a)(1) of

23 BBRA (113 Stat. 1501A–388), is amended by striking

24 ‘‘18 months’’ and inserting ‘‘30 months’’.
291

•HR 5612 IH

1 SEC. 632. REVISED TERMS AND CONDITIONS FOR EXTEN2 SION OF MEDICARE COMMUNITY NURSING

3 ORGANIZATION (CNO) DEMONSTRATION

4 PROJECT.

5 (a) IN GENERAL.—Section 532 of BBRA (113 Stat.

6 1501A–388) is amended—

7 (1) in subsection (a), by striking the second

8 sentence; and

9 (2) by striking subsection (b) and inserting the

10 following new subsection:

11 ‘‘(b) TERMS AND CONDITIONS.—

12 ‘‘(1) JANUARY THROUGH SEPTEMBER 2000.—

13 For the 9-month period beginning with January

14 2000, any such demonstration project shall be con15 ducted under the same terms and conditions as ap16 plied to such demonstration during 1999.

17 ‘‘(2) OCTOBER 2000 THROUGH DECEMBER

18 2001.—For the 15-month period beginning with Oc19 tober 2000, any such demonstration project shall be

20 conducted under the same terms and conditions as

21 applied to such demonstration during 1999, except

22 that the following modifications shall apply:

23 ‘‘(A) BASIC CAPITATION RATE.—The basic

24 capitation rate paid for services covered under

25 the project (other than case management serv-
292

•HR 5612 IH

1 ices) per enrollee per month and furnished

2 during—

3 ‘‘(i) the period beginning with October

4 1, 2000, and ending with December 31,

5 2000, shall be determined by actuarially

6 adjusting the actual capitation rate paid

7 for such services in 1999 for inflation, uti8 lization, and other changes to the CNO

9 service package, and by reducing such ad10 justed capitation rate by 10 percent in the

11 case of the demonstration sites located in

12 Arizona, Minnesota, and Illinois, and 15

13 percent for the demonstration site located

14 in New York; and

15 ‘‘(ii) 2001 shall be determined by ac16 tuarially adjusting the capitation rate de17 termined under clause (i) for inflation, uti18 lization, and other changes to the CNO

19 service package.

20 ‘‘(B) TARGETED CASE MANAGEMENT

21 FEE.—Effective October 1, 2000—

22 ‘‘(i) the case management fee per en23 rollee per month for—

24 ‘‘(I) the period described in sub25 paragraph (A)(i) shall be determined
293

•HR 5612 IH

1 by actuarially adjusting the case man2 agement fee for 1999 for inflation;

3 and

4 ‘‘(II) 2001 shall be determined

5 by actuarially adjusting the amount

6 determined under subclause (I) for in7 flation; and

8 ‘‘(ii) such case management fee shall

9 be paid only for enrollees who are classified

10 as moderately frail or frail pursuant to cri11 teria established by the Secretary.

12 ‘‘(C) GREATER UNIFORMITY IN CLINICAL

13 FEATURES AMONG SITES.—Each project shall

14 implement for each site—

15 ‘‘(i) protocols for periodic telephonic

16 contact with enrollees based on—

17 ‘‘(I) the results of such standard18 ized written health assessment; and

19 ‘‘(II) the application of appro20 priate care planning approaches;

21 ‘‘(ii) disease management programs

22 for targeted diseases (such as congestive

23 heart failure, arthritis, diabetes, and hy24 pertension) that are highly prevalent in the

25 enrolled populations;
294

•HR 5612 IH

1 ‘‘(iii) systems and protocols to track

2 enrollees through hospitalizations, includ3 ing pre-admission planning, concurrent

4 management during inpatient hospital

5 stays, and post-discharge assessment, plan6 ning, and follow-up; and

7 ‘‘(iv) standardized patient educational

8 materials for specified diseases and health

9 conditions.

10 ‘‘(D) QUALITY IMPROVEMENT.—Each

11 project shall implement at each site once during

12 the 15-month period—

13 ‘‘(i) enrollee satisfaction surveys; and

14 ‘‘(ii) reporting on specified quality in15 dicators for the enrolled population.

16 ‘‘(c) EVALUATION.—

17 ‘‘(1) PRELIMINARY REPORT.—Not later than

18 July 1, 2001, the Secretary of Health and Human

19 Services shall submit to the Committees on Ways

20 and Means and Commerce of the House of Rep21 resentatives and the Committee on Finance of the

22 Senate a preliminary report that—

23 ‘‘(A) evaluates such demonstration projects

24 for the period beginning July 1, 1997, and end25 ing December 31, 1999, on a site-specific basis
295

•HR 5612 IH

1 with respect to the impact on per beneficiary

2 spending, specific health utilization measures,

3 and enrollee satisfaction; and

4 ‘‘(B) includes a similar evaluation of such

5 projects for the portion of the extension period

6 that occurs after September 30, 2000.

7 ‘‘(2) FINAL REPORT.—The Secretary shall sub8 mit a final report to such Committees on such dem9 onstration projects not later than July 1, 2002.

10 Such report shall include the same elements as the

11 preliminary report required by paragraph (1), but

12 for the period after December 31, 1999.

13 ‘‘(3) METHODOLOGY FOR SPENDING COMPARI14 SONS.—Any evaluation of the impact of the dem15 onstration projects on per beneficiary spending in16 cluded in such reports shall include a comparison

17 of—

18 ‘‘(A) data for all individuals who—

19 ‘‘(i) were enrolled in such demonstra20 tion projects as of the first day of the pe21 riod under evaluation; and

22 ‘‘(ii) were enrolled for a minimum of

23 6 months thereafter; with

24 ‘‘(B) data for a matched sample of individ25 uals who are enrolled under part B of title
296

•HR 5612 IH

1 XVIII of the Social Security Act and are not

2 enrolled in such a project, or in a

3 Medicare+Choice plan under part C of such

4 title, a plan offered by an eligible organization

5 under section 1876 of such Act, or a health

6 care prepayment plan under section

7 1833(a)(1)(A) of such Act.’’.

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

9 subsection (a) shall be effective as if included in the enact10 ment of section 532 of BBRA (113 Stat. 1501A–388).

11 SEC. 633. EXTENSION OF MEDICARE MUNICIPAL HEALTH

12 SERVICES DEMONSTRATION PROJECTS.

13 Section 9215(a) of the Consolidated Omnibus Budget

14 Reconciliation Act of 1985 (42 U.S.C. 1395b–1 note), as

15 amended by section 6135 of the Omnibus Budget Rec16 onciliation Act of 1989, section 13557 of the Omnibus

17 Budget Reconciliation Act of 1993, section 4017 of BBA,

18 and section 534 of BBRA (113 Stat. 1501A–390), is

19 amended by striking ‘‘December 31, 2002’’ and inserting

20 ‘‘December 31, 2004’’.

21 SEC. 634. SERVICE AREA EXPANSION FOR MEDICARE COST

22 CONTRACTS DURING TRANSITION PERIOD.

23 Section 1876(h)(5) (42 U.S.C. 1395mm(h)(5)) is

24 amended—
297

•HR 5612 IH

1 (1) by redesignating subparagraph (B) as sub2 paragraph (C); and

3 (2) by inserting after subparagraph (A), the fol4 lowing new subparagraph:

5 ‘‘(B) Subject to subparagraph (C), the Secretary

6 shall approve an application for a modification to a rea7 sonable cost contract under this section in order to expand

8 the service area of such contract if—

9 ‘‘(i) such application is submitted to the Sec10 retary on or before September 1, 2003; and

11 ‘‘(ii) the Secretary determines that the organi12 zation with the contract continues to meet the re13 quirements applicable to such organizations and con14 tracts under this section.’’.

15 TITLE VII—MEDICAID

16 SEC. 701. DSH PAYMENTS.

17 (a) CONTINUATION OF MEDICAID DSH ALLOTMENTS

18 AT FISCAL YEAR 2000 LEVELS FOR FISCAL YEARS 2001

19 AND 2002.—Section 1923(f) (42 U.S.C. 1396r–4(f)), as

20 amended by section 601 of the Medicare, Medicaid, and

21 SCHIP Balanced Budget Refinement Act of 1999 (as en22 acted into law by section 1000(a)(6) of Public Law 106–

23 113), is amended—

24 (1) in paragraph (2)—
298

•HR 5612 IH

1 (A) by striking ‘‘2002’’ in the heading and

2 inserting ‘‘2000’’;

3 (B) in the matter preceding the table, by

4 striking ‘‘2002’’ and inserting ‘‘2000’’; and

5 (C) in the table in such paragraph, by

6 striking the columns labeled ‘‘FY 01’’ and ‘‘FY

7 02’’ relating to fiscal years 2001 and 2002; and

8 (2) in paragraph (3)—

9 (A) by striking ‘‘2003’’ in the heading and

10 inserting ‘‘2001’’; and

11 (B) by striking ‘‘2003’’ and inserting

12 ‘‘2001’’.

13 (b) SPECIAL RULE FOR MEDICAID DSH ALLOTMENT

14 FOR EXTREMELY LOW DSH STATES.—Section

15 1923(f)(3) (42 U.S.C. 1396r–4(f)(3)) is amended—

16 (1) in subparagraph (A), by striking ‘‘subpara17 graph (B)’’ and inserting ‘‘subparagraphs (B) and

18 (C)’’; and

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

21 ‘‘(C) SPECIAL RULE FOR EXTREMELY LOW

22 DSH STATES.—In the case of a State in which

23 the total expenditures under the State plan (in24 cluding Federal and State shares) for dis25 proportionate share hospital adjustments under
299

•HR 5612 IH

1 this section for fiscal year 1999, as reported to

2 the Administrator of the Health Care Financing

3 Administration as of August 31, 2000, is great4 er than 0 but less than 1 percent of the State’s

5 total amount of expenditures under the State

6 plan for medical assistance during the fiscal

7 year, the DSH allotment for fiscal year 2001

8 shall be increased to 1 percent of the State’s

9 total amount of expenditures under such plan

10 for such assistance during such fiscal year. In

11 subsequent fiscal years, such increased allot12 ment is subject to an increase for inflation as

13 provided in subparagraph (A).’’.

14 (c) DISTRICT OF COLUMBIA.—Effective beginning

15 with fiscal year 2001, the item in the table in section

16 1923(f) (42 U.S.C. 1396r–4(f)) relating to District of Co17 lumbia for FY 2000, is amended by striking ‘‘32’’ and

18 inserting ‘‘49’’.

19 (d) ASSURING IDENTIFICATION OF MEDICAID MAN20 AGED CARE PATIENTS.—

21 (1) IN GENERAL.—Section 1932 (42 U.S.C.

22 1396u–2) is amended by adding at the end the fol23 lowing new subsection:

24 ‘‘(g) IDENTIFICATION OF PATIENTS FOR PURPOSES

25 OF MAKING DSH PAYMENTS.—Each contract with a
300

•HR 5612 IH

1 managed care entity under section 1903(m) or under sec2 tion 1905(t)(3) shall require the entity either—

3 ‘‘(1) to report to the State information nec4 essary to determine the hospital services provided

5 under the contract (and the identity of hospitals pro6 viding such services) for purposes of applying sec7 tions 1886(d)(5)(F) and 1923; or

8 ‘‘(2) to include a sponsorship code in the identi9 fication card issued to individuals covered under this

10 title in order that a hospital may identify a patient

11 as being entitled to benefits under this title.’’.

12 (2) CLARIFICATION OF COUNTING MANAGED

13 CARE MEDICAID PATIENTS.—Section 1923 (42

14 U.S.C. 1396r–4) is amended—

15 (A) in subsection (a)(2)(D), by inserting

16 after ‘‘the proportion of low-income and med17 icaid patients’’ the following: ‘‘(including such

18 patients who receive benefits through a man19 aged care entity)’’;

20 (B) in subsection (b)(2), by inserting after

21 ‘‘a State plan approved under this title in a pe22 riod’’ the following: ‘‘(regardless of whether

23 such patients receive medical assistance on a

24 fee-for-service basis or through a managed care

25 entity)’’; and
301

•HR 5612 IH

1 (C) in subsection (b)(3)(A)(i), by inserting

2 after ‘‘under a State plan under this title’’ the

3 following: ‘‘(regardless of whether the services

4 were furnished on a fee-for-service basis or

5 through a managed care entity)’’.

6 (3) EFFECTIVE DATES.—

7 (A) The amendment made by paragraph

8 (1) applies to contracts as of January 1, 2001.

9 (B) The amendments made by paragraph

10 (2) apply to payments made on or after Janu11 ary 1, 2001.

12 (e) APPLICATION OF MEDICAID DSH TRANSITION

13 RULE TO PUBLIC HOSPITALS IN ALL STATES.—

14 (1) IN GENERAL.—During the period described

15 in paragraph (3), with respect to a State, section

16 4721(e) of the Balanced Budget Act of 1997 (Public

17 Law 105–33; 111 Stat. 514), as amended by section

18 607 of BBRA (113 Stat. 1501A–321) shall be ap19 plied as though—

20 (A) ‘‘September 30, 2002’’ were sub21 stituted for ‘‘July 1, 1997’’ each place it ap22 pears;

23 (B) ‘‘hospitals owned or operated by an in24 strumentality or a unit of government within a
302

•HR 5612 IH

1 State (as defined for purposes of title XIX)’’

2 were substituted for ‘‘the State of California’’;

3 (C) paragraph (3) were redesignated as

4 paragraph (4);

5 (D) ‘‘and’’ were omitted from the end of

6 paragraph (2); and

7 (E) the following new paragraph were in8 serted after paragraph (2):

9 ‘‘(3) ‘(as defined in subparagraph (B) but with10 out regard to clause (ii) of that subparagraph and

11 subject to subsection (d))’ were substituted for ‘(as

12 defined in subparagraph (B))’ in subparagraph (A)

13 of such section; and’’.

14 (2) SPECIAL RULE.—With respect to California,

15 section 4721(e) of the Balanced Budget Act of 1997

16 (Public Law 105–33; 111 Stat. 514), as amended by

17 section 607 of BBRA (113 Stat. 1501A–321), shall

18 be applied without regard to paragraph (1).

19 (3) PERIOD DESCRIBED.—The period described

20 in this paragraph is the period that begins, with re21 spect to a State, on the first day of the first State

22 fiscal year that begins after September 30, 2002,

23 and ends on the last day of the succeeding State fis24 cal year.
303

•HR 5612 IH

1 (4) APPLICATION TO WAIVERS.—With respect

2 to a State operating under a waiver of the require3 ments of title XIX of the Social Security Act (42

4 U.S.C. 1396 et seq.) under section 1115 of such Act

5 (42 U.S.C. 1315), the amount by which any pay6 ment adjustment made by the State under title XIX

7 of such Act (42 U.S.C. 1396 et seq.), after the ap8 plication of section 4721(e) of the Balanced Budget

9 Act of 1997 under paragraph (1) to such State, ex10 ceeds the costs of furnishing hospital services pro11 vided by hospitals described in such section shall be

12 fully reflected as an increase in the baseline expendi13 ture limit for such waiver, but subject to the DSH

14 allotment for the State under section 1923(f) of

15 such title (42 U.S.C. 1396r–4(f)).

16 (f) ASSISTANCE FOR CERTAIN PUBLIC HOSPITALS.—

17 (1) IN GENERAL.—Subject to subsection (h),

18 beginning with fiscal year 2002, notwithstanding

19 section 1923(f) of the Social Security Act (42

20 U.S.C. 1396r–4(f)) and subject to paragraph (3),

21 with respect to a State, payment adjustments made

22 under title XIX of the Social Security Act (42

23 U.S.C. 1396 et seq.) to a hospital described in para24 graph (2) shall be made without regard to the DSH
304

•HR 5612 IH

1 allotment limitation for the State determined under

2 section 1923(f) of that Act (42 U.S.C. 1396r–4(f)).

3 (2) HOSPITAL DESCRIBED.—A hospital is de4 scribed in this paragraph if the hospital—

5 (A) is owned or operated by a State (as de6 fined for purposes of title XIX of the Social Se7 curity Act), or by an instrumentality or a unit

8 of government within a State (as so defined);

9 (B) as of October 1, 2000—

10 (i) is in existence and operating as a

11 hospital described in subparagraph (A);

12 and

13 (ii) is not receiving disproportionate

14 share hospital payments from the State in

15 which it is located under title XIX of such

16 Act; and

17 (C) has a low-income utilization rate (as

18 defined in section 1923(b)(3) of the Social Se19 curity Act (42 U.S.C. 1396r–4(b)(3))) in excess

20 of 65 percent.

21 (3) LIMITATION ON EXPENDITURES.—

22 (A) IN GENERAL.—With respect to any fis23 cal year, the aggregate amount of Federal fi24 nancial participation that may be provided for

25 payment adjustments described in paragraph
305

•HR 5612 IH

1 (1) for that fiscal year for all States may not

2 exceed the amount described in subparagraph

3 (B) for the fiscal year.

4 (B) AMOUNT DESCRIBED.—The amount

5 described in this subparagraph for a fiscal year

6 is as follows:

7 (i) For fiscal year 2002, $15,000,000.

8 (ii) For fiscal year 2003,

9 $176,000,000.

10 (iii) For fiscal year 2004,

11 $269,000,000.

12 (iv) For fiscal year 2005,

13 $330,000,000.

14 (v) For fiscal year 2006 and each fis15 cal year thereafter, $375,000,000.

16 (g) DSH PAYMENT ACCOUNTABILITY STANDARDS.—

17 Subject to subsection (h), not later than September 30,

18 2002, the Secretary of Health and Human Services shall

19 implement accountability standards to ensure that Federal

20 funds provided with respect to disproportionate share hos21 pital adjustments made under section 1923 of the Social

22 Security Act (42 U.S.C. 1396r–4) are used to reimburse

23 States and hospitals eligible for such payment adjustments

24 for providing uncompensated health care to low-income
306

•HR 5612 IH

1 patients and are otherwise made in accordance with the

2 requirements of section 1923 of that Act.

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

4 subsection (f) and (g) take effect on the date the final

5 regulation required under section 705(a) (relating to the

6 application of an aggregate upper payment limit test for

7 State medicaid spending for inpatient hospital services,

8 outpatient hospital services, nursing facility services, in9 termediate care facility services for the mentally retarded,

10 and clinic services provided by government facilities that

11 are not State-owned or operated facilities) is published in

12 the Federal Register.

13 SEC. 702. NEW PROSPECTIVE PAYMENT SYSTEM FOR FED14 ERALLY-QUALIFIED HEALTH CENTERS AND

15 RURAL HEALTH CLINICS.

16 (a) IN GENERAL.—Section 1902(a) (42 U.S.C.

17 1396a(a)) is amended—

18 (1) in paragraph (13)—

19 (A) in subparagraph (A), by adding ‘‘and’’

20 at the end;

21 (B) in subparagraph (B), by striking

22 ‘‘and’’ at the end; and

23 (C) by striking subparagraph (C); and

24 (2) by inserting after paragraph (14) the fol25 lowing new paragraph:
307

•HR 5612 IH

1 ‘‘(15) provide for payment for services de2 scribed in clause (B) or (C) of section 1905(a)(2)

3 under the plan in accordance with subsection (aa);’’.

4 (b) NEW PROSPECTIVE PAYMENT SYSTEM.—Section

5 1902 (42 U.S.C. 1396a) is amended by adding at the end

6 the following:

7 ‘‘(aa) PAYMENT FOR SERVICES PROVIDED BY FED8 ERALLY-QUALIFIED HEALTH CENTERS AND RURAL

9 HEALTH CLINICS.—

10 ‘‘(1) IN GENERAL.—Beginning with fiscal year

11 2001 and each succeeding fiscal year, the State plan

12 shall provide for payment for services described in

13 section 1905(a)(2)(C) furnished by a Federally14 qualified health center and services described in sec15 tion 1905(a)(2)(B) furnished by a rural health clinic

16 in accordance with the provisions of this subsection.

17 ‘‘(2) FISCAL YEAR 2001.—Subject to paragraph

18 (4), for services furnished during fiscal year 2001,

19 the State plan shall provide for payment for such

20 services in an amount (calculated on a per visit

21 basis) that is equal to 100 percent of the average of

22 the costs of the center or clinic of furnishing such

23 services during fiscal years 1999 and 2000 which

24 are reasonable and related to the cost of furnishing

25 such services, or based on such other tests of reason-
308

•HR 5612 IH

1 ableness as the Secretary prescribes in regulations

2 under section 1833(a)(3), or, in the case of services

3 to which such regulations do not apply, the same

4 methodology used under section 1833(a)(3), ad5 justed to take into account any increase or decrease

6 in the scope of such services furnished by the center

7 or clinic during fiscal year 2001.

8 ‘‘(3) FISCAL YEAR 2002 AND SUCCEEDING FIS9 CAL YEARS.—Subject to paragraph (4), for services

10 furnished during fiscal year 2002 or a succeeding

11 fiscal year, the State plan shall provide for payment

12 for such services in an amount (calculated on a per

13 visit basis) that is equal to the amount calculated for

14 such services under this subsection for the preceding

15 fiscal year—

16 ‘‘(A) increased by the percentage increase

17 in the MEI (as defined in section 1842(i)(3))

18 applicable to primary care services (as defined

19 in section 1842(i)(4)) for that fiscal year; and

20 ‘‘(B) adjusted to take into account any in21 crease or decrease in the scope of such services

22 furnished by the center or clinic during that fis23 cal year.

24 ‘‘(4) ESTABLISHMENT OF INITIAL YEAR PAY25 MENT AMOUNT FOR NEW CENTERS OR CLINICS.—In
309

•HR 5612 IH

1 any case in which an entity first qualifies as a Fed2 erally-qualified health center or rural health clinic

3 after fiscal year 2000, the State plan shall provide

4 for payment for services described in section

5 1905(a)(2)(C) furnished by the center or services

6 described in section 1905(a)(2)(B) furnished by the

7 clinic in the first fiscal year in which the center or

8 clinic so qualifies in an amount (calculated on a per

9 visit basis) that is equal to 100 percent of the costs

10 of furnishing such services during such fiscal year

11 based on the rates established under this subsection

12 for the fiscal year for other such centers or clinics

13 located in the same or adjacent area with a similar

14 case load, service package, and case mix or, in the

15 absence of such a center or clinic, in accordance with

16 the regulations and methodology referred to in para17 graph (2) or based on such other tests of reasonable18 ness as the Secretary may specify. For each fiscal

19 year following the fiscal year in which the entity

20 first qualifies as a Federally-qualified health center

21 or rural health clinic, the State plan shall provide

22 for the payment amount to be calculated in accord23 ance with paragraph (3).

24 ‘‘(5) ADMINISTRATION IN THE CASE OF MAN25 AGED CARE.—
310

•HR 5612 IH

1 ‘‘(A) IN GENERAL.—In the case of services

2 furnished by a Federally-qualified health center

3 or rural health clinic pursuant to a contract be4 tween the center or clinic and a managed care

5 entity (as defined in section 1932(a)(1)(B)), the

6 State plan shall provide for payment to the cen7 ter or clinic by the State of a supplemental pay8 ment equal to the amount (if any) by which the

9 amount determined under paragraphs (2), (3),

10 and (4) of this subsection exceeds the amount

11 of the payments provided under the contract.

12 ‘‘(B) PAYMENT SCHEDULE.—The supple13 mental payment required under subparagraph

14 (A) shall be made pursuant to a payment

15 schedule agreed to by the State and the Feder16 ally-qualified health center or rural health clin17 ic, but in no case less frequently than every 4

18 months.

19 ‘‘(6) ALTERNATIVE PAYMENT METHODOLO20 GIES.—Notwithstanding any other provision of this

21 section, the State plan may provide for payment in

22 any fiscal year to a Federally-qualified health center

23 for services described in section 1905(a)(2)(C) or to

24 a rural health clinic for services described in section
311

•HR 5612 IH

1 1905(a)(2)(B) in an amount which is determined

2 under an alternative payment methodology that—

3 ‘‘(A) is agreed to by the State and the cen4 ter or clinic; and

5 ‘‘(B) results in payment to the center or

6 clinic of an amount which is at least equal to

7 the amount otherwise required to be paid to the

8 center or clinic under this section.’’.

9 (c) CONFORMING AMENDMENTS.—

10 (1) Section 4712 of the BBA (Public Law 105–

11 33; 111 Stat. 508) is amended by striking sub12 section (c).

13 (2) Section 1915(b) (42 U.S.C. 1396n(b)) is

14 amended by striking ‘‘1902(a)(13)(C)’’ and inserting

15 ‘‘1902(a)(15), 1902(aa),’’.

16 (d) GAO STUDY OF FUTURE REBASING.—The

17 Comptroller General of the United States shall provide for

18 a study on the need for, and how to, rebase or refine costs

19 for making payment under the medicaid program for serv20 ices provided by Federally-qualified health centers and

21 rural health clinics (as provided under the amendments

22 made by this section). The Comptroller General shall pro23 vide for submittal of a report on such study to Congress

24 by not later than 4 years after the date of the enactment

25 of this Act.
312

•HR 5612 IH

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

2 this section take effect on October 1, 2000, and apply to

3 services furnished on or after such date.

4 SEC. 703. STREAMLINED APPROVAL OF CONTINUED STATE5 WIDE SECTION 1115 MEDICAID WAIVERS.

6 (a) IN GENERAL.—Section 1115 (42 U.S.C. 1315)

7 is amended by adding at the end the following new sub8 section:

9 ‘‘(f) An application by the chief executive officer of

10 a State for an extension of a waiver project the State is

11 operating under an extension under subsection (e) (in this

12 subsection referred to as the ‘waiver project’) shall be sub13 mitted and approved or disapproved in accordance with

14 the following:

15 ‘‘(1) The application for an extension of the

16 waiver project shall be submitted to the Secretary at

17 least 120 days prior to the expiration of the current

18 period of the waiver project.

19 ‘‘(2) Not later than 45 days after the date such

20 application is received by the Secretary, the Sec21 retary shall notify the State if the Secretary intends

22 to review the terms and conditions of the waiver

23 project. A failure to provide such notification shall

24 be deemed to be an approval of the application.
313

•HR 5612 IH

1 ‘‘(3) Not later than 45 days after the date a no2 tification is made in accordance with paragraph (2),

3 the Secretary shall inform the State of proposed

4 changes in the terms and conditions of the waiver

5 project. A failure to provide such information shall

6 be deemed to be an approval of the application.

7 ‘‘(4) During the 30-day period that begins on

8 the date information described in paragraph (3) is

9 provided to a State, the Secretary shall negotiate re10 vised terms and conditions of the waiver project with

11 the State.

12 ‘‘(5)(A) Not later than 120 days after the date

13 an application for an extension of the waiver project

14 is submitted to the Secretary (or such later date

15 agreed to by the chief executive officer of the State),

16 the Secretary shall—

17 ‘‘(i) approve the application subject to such

18 modifications in the terms and conditions—

19 ‘‘(I) as have been agreed to by the

20 Secretary and the State; or

21 ‘‘(II) in the absence of such agree22 ment, as are determined by the Secretary

23 to be reasonable, consistent with the over24 all objectives of the waiver project, and not

25 in violation of applicable law; or
314

•HR 5612 IH

1 ‘‘(ii) disapprove the application.

2 ‘‘(B) A failure by the Secretary to approve or

3 disapprove an application submitted under this sub4 section in accordance with the requirements of sub5 paragraph (A) shall be deemed to be an approval of

6 the application subject to such modifications in the

7 terms and conditions as have been agreed to (if any)

8 by the Secretary and the State.

9 ‘‘(6) An approval of an application for an exten10 sion of a waiver project under this subsection shall

11 be for a period not to exceed 3 years.

12 ‘‘(7) An extension of a waiver project under this

13 subsection shall be subject to the final reporting and

14 evaluation requirements of paragraphs (4) and (5)

15 of subsection (e) (taking into account the extension

16 under this subsection with respect to any timing re17 quirements imposed under those paragraphs).’’.

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

19 subsection (a) applies to requests for extensions of dem20 onstration projects pending or submitted on or after the

21 date of the enactment of this Act.

22 SEC. 704. MEDICAID COUNTY-ORGANIZED HEALTH SYS23 TEMS.

24 (a) IN GENERAL.—Section 9517(c)(3)(C) of the

25 Comprehensive Omnibus Budget Reconciliation Act of
315

•HR 5612 IH

1 1985 is amended by striking ‘‘10 percent’’ and inserting

2 ‘‘14 percent’’.

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

4 subsection (a) takes effect on the date of the enactment

5 of this Act.

6 SEC. 705. DEADLINE FOR ISSUANCE OF FINAL REGULATION

7 RELATING TO MEDICAID UPPER PAYMENT

8 LIMITS.

9 (a) IN GENERAL.—Not later than December 31,

10 2000, the Secretary of Health and Human Services (in

11 this section referred to as the ‘‘Secretary’’), notwith12 standing any requirement of the Administrative Proce13 dures Act under chapter 5 of title 5, United States Code,

14 or any other provision of law, shall issue under sections

15 447.272, 447.304, and 447.321 of title 42, Code of Fed16 eral Regulations (and any other section of part 447 of title

17 42, Code of Federal Regulations that the Secretary deter18 mines is appropriate), a final regulation based on the pro19 posed rule announced on October 5, 2000, that—

20 (1) modifies the upper payment limit test ap21 plied to State medicaid spending for inpatient hos22 pital services, outpatient hospital services, nursing

23 facility services, intermediate care facility services

24 for the mentally retarded, and clinic services by ap25 plying an aggregate upper payment limit to pay-
316

•HR 5612 IH

1 ments made to government facilities that are not

2 State-owned or operated facilities; and

3 (2) provides for a transition period in accord4 ance with subsection (b).

5 (b) TRANSITION PERIOD.—

6 (1) IN GENERAL.—The final regulation required

7 under subsection (a) shall provide that, with respect

8 to a State described in paragraph (3), the State

9 shall be considered to be in compliance with the final

10 regulation required under subsection (a) so long as,

11 for each State fiscal year during the period de12 scribed in paragraph (4), the State reduces pay13 ments under a State medicaid payment methodology

14 or a State plan provision described in paragraph (3),

15 or reduces the actual dollar payment levels described

16 in paragraph (3)(B), so that the amount of the pay17 ments that would otherwise have been made under

18 such provision, methodology, or payment levels by

19 the State for any State fiscal year during such pe20 riod is reduced by 15 percent in the first such State

21 fiscal year, and by an additional 15 percent in each

22 of next 5 State fiscal years.

23 (2) REQUIREMENT.—Notwithstanding para24 graph (1), the final regulation required under sub25 section (a) shall provide that, for any period (or por-
317

•HR 5612 IH

1 tion of a period) that occurs on or after October 1,

2 2008, medicaid payments made by a State described

3 in paragraph (3) shall comply with such final regula4 tion.

5 (3) STATE DESCRIBED.—A State described in

6 this paragraph is a State with a State medicaid pay7 ment methodology or State plan provision which—

8 (A) was approved, deemed to have been ap9 proved, or was in effect on or before October 1,

10 1992 (including any subsequent amendments or

11 successor provisions or methodologies and

12 whether or not a State plan amendment was

13 made to carry out such provision or method14 ology after such date) or under which claims for

15 Federal financial participation were filed and

16 paid on or before such date; and

17 (B) provides for payments that are in ex18 cess of the upper payment limit test established

19 under the final regulation required under sub20 section (a) (or which would be noncompliant

21 with such final regulation if the actual dollar

22 payment levels made under the payment provi23 sion or methodology in the State fiscal year

24 which begins during 1999 were continued).
318

•HR 5612 IH

1 (4) PERIOD DESCRIBED.—The period described

2 in this paragraph is the period that begins on the

3 first State fiscal year that begins after September

4 30, 2002, and ends on September 30, 2008.

5 SEC. 706. ALASKA FMAP.

6 Notwithstanding the first sentence of section 1905(b)

7 of the Social Security Act (42 U.S.C. 1396d(b)), only with

8 respect to each of fiscal years 2001 through 2005, for pur9 poses of titles XIX and XXI of the Social Security Act,

10 the State percentage used to determine the Federal med11 ical assistance percentage for Alaska shall be that percent12 age which bears the same ratio to 45 percent as the square

13 of the adjusted per capita income of Alaska (determined

14 by dividing the State’s 3-year average per capita income

15 by 1.05) bears to the square of the per capita income of

16 the 50 States.

17 SEC. 707. OPTIONAL COVERAGE OF LEGAL IMMIGRANTS

18 UNDER THE MEDICAID PROGRAM.

19 (a) IN GENERAL.—Section 1903(v) (42 U.S.C.

20 1396b(v)) is amended—

21 (1) in paragraph (1), by striking ‘‘paragraph

22 (2)’’ and inserting ‘‘paragraphs (2) and (4)’’; and

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

24 paragraph:
319

•HR 5612 IH

1 ‘‘(4)(A) A State may elect (in a plan amendment

2 under this title) to provide medical assistance under this

3 title, notwithstanding sections 401(a), 402(b), 403, and

4 421 of the Personal Responsibility and Work Opportunity

5 Reconciliation Act of 1996, for aliens who are lawfully re6 siding in the United States (including battered aliens de7 scribed in section 431(c) of such Act) and who are other8 wise eligible for such assistance, within either or both of

9 the following eligibility categories:

10 ‘‘(i) PREGNANT WOMEN.—Women during preg11 nancy (and during the 60-day period beginning on

12 the last day of the pregnancy).

13 ‘‘(ii) CHILDREN.—Children (as defined under

14 such plan), including optional targeted low-income

15 children described in section 1905(u)(2)(B).

16 ‘‘(B) In the case of a State that has elected to provide

17 medical assistance to a category of aliens under subpara18 graph (A), no debt shall accrue under an affidavit of sup19 port against any sponsor of such an alien who has lawfully

20 resided in the United States on the basis of provision of

21 assistance to such category.’’.

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

23 subsection (a) take effect on October 1, 2000, and apply

24 to medical assistance and child health assistance furnished

25 on or after such date.
320

•HR 5612 IH

1 SEC. 708. ADDITIONAL ENTITIES QUALIFIED TO DETER2 MINE MEDICAID PRESUMPTIVE ELIGIBILITY

3 FOR LOW-INCOME CHILDREN.

4 (a) IN GENERAL.—Section 1920A(b)(3)(A)(i) (42

5 U.S.C. 1396r–1a(b)(3)(A)(i)) is amended—

6 (1) by striking ‘‘or (II)’’ and inserting ‘‘, (II)’’;

7 and

8 (2) by inserting ‘‘eligibility of a child for med9 ical assistance under the State plan under this title,

10 or eligibility of a child for child health assistance

11 under the program funded under title XXI, (III) is

12 an elementary school or secondary school, as such

13 terms are defined in section 14101 of the Elemen14 tary and Secondary Education Act of 1965 (20

15 U.S.C. 8801), an elementary or secondary school op16 erated or supported by the Bureau of Indian Affairs,

17 a State or tribal child support enforcement agency,

18 a child care resource and referral agency, an organi19 zation that is providing emergency food and shelter

20 under a grant under the Stewart B. McKinney

21 Homeless Assistance Act, or a State or tribal office

22 or entity involved in enrollment in the program

23 under this title, under part A of title IV, under title

24 XXI, or that determines eligibility for any assistance

25 or benefits provided under any program of public or

26 assisted housing that receives Federal funds, includ-
321

•HR 5612 IH

1 ing the program under section 8 or any other section

2 of the United States Housing Act of 1937 (42

3 U.S.C. 1437 et seq.) or under the Native American

4 Housing Assistance and Self-Determination Act of

5 1996 (25 U.S.C. 4101 et seq.), or (IV) any other en6 tity the State so deems, as approved by the Sec7 retary’’ before the semicolon.

8 (b) TECHNICAL AMENDMENTS.—Section 1920A (42

9 U.S.C. 1396r–1a) is amended—

10 (1) in subsection (b)(3)(A)(i), by striking ‘‘42

11 U.S.C. 9821’’ and inserting ‘‘42 U.S.C. 9831’’;

12 (2) in subsection (b)(3)(A)(ii), by striking

13 ‘‘paragraph (1)(A)’’ and inserting ‘‘paragraph (2)’’;

14 and

15 (3) in subsection (c)(2), in the matter preceding

16 subparagraph (A), by striking ‘‘subsection

17 (b)(1)(A)’’ and inserting ‘‘subsection (b)(2)’’.

18 (c) APPLICATION TO PRESUMPTIVE ELIGIBILITY FOR

19 PREGNANT WOMEN UNDER MEDICAID.—Section 1920(b)

20 (42 U.S.C. 1396r–1(b)) is amended by adding at the end

21 after and below paragraph (2) the following flush sen22 tence:

23 ‘‘The term ‘qualified provider’ includes a qualified entity

24 as defined in section 1920A(b)(3).’’.
322

•HR 5612 IH

1 (d) APPLICATION UNDER TITLE XXI.—Section

2 2107(e)(1) (42 U.S.C. 1397gg(e)(1)) is amended by add3 ing at the end the following new subparagraph:

4 ‘‘(D) Section 1920A (relating to presump5 tive eligibility).’’.

6 SEC. 709. IMPROVING WELFARE-TO-WORK TRANSITION.

7 (a) 1 YEAR EXTENSION.—Section 1925(f) (42

8 U.S.C. 1396r–6(f)) is amended by striking ‘‘2001’’ and

9 inserting ‘‘2002’’.

10 (b) SIMPLIFICATION OPTIONS.—

11 (1) STATE OPTION TO WAIVE REPORTING RE12 QUIREMENTS.—Section 1925(b)(2) of such Act (42

13 U.S.C. 1396r–6(b)(2)) is amended by adding at the

14 end the following new subparagraph:

15 ‘‘(C) STATE OPTION TO WAIVE REPORTING

16 REQUIREMENTS.—A State may elect to waive

17 the reporting requirements under subparagraph

18 (B) and, in the case of such a waiver for pur19 poses of notices required under subparagraph

20 (A), to exclude from such notices any reference

21 to any requirement under subparagraph (B).’’.

22 (2) EXEMPTION FOR STATES COVERING NEEDY

23 FAMILIES UP TO 185 PERCENT OF POVERTY.—Sec24 tion 1925 (42 U.S.C. 1396r–6) is amended—
323

•HR 5612 IH

1 (A) in each of subsections (a)(1) and

2 (b)(1), by inserting ‘‘but subject to subsection

3 (g),’’ after ‘‘Notwithstanding any other provi4 sion of this title,’’; and

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

6 subsection:

7 ‘‘(g) EXEMPTION FOR STATE COVERING NEEDY

8 FAMILIES UP TO 185 PERCENT OF POVERTY.—

9 ‘‘(1) IN GENERAL.—At State option, the provi10 sions of this section shall not apply to a State that

11 uses the authority under section 1931(b)(2)(C) to

12 make medical assistance available under the State

13 plan under this title, at a minimum, to all individ14 uals described in section 1931(b)(1) in families with

15 gross incomes (determined without regard to work16 related child care expenses of such individuals) at or

17 below 185 percent of the income official poverty line

18 (as defined by the Office of Management and Budg19 et, and revised annually in accordance with section

20 673(2) of the Omnibus Budget Reconciliation Act of

21 1981) applicable to a family of the size involved.

22 ‘‘(2) APPLICATION TO OTHER PROVISIONS OF

23 THIS TITLE.—The State plan of a State described in

24 paragraph (1) shall be deemed to meet the require-
324

•HR 5612 IH

1 ments of sections 1902(a)(10)(A)(i)(I) and

2 1902(e)(1).’’.

3 (3) EFFECTIVE DATE.—The amendments made

4 by this subsection take effect on October 1, 2000.

5 SEC. 710. MEDICAID RECOGNITION FOR SERVICES OF PHY6 SICIAN ASSISTANTS.

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

8 1396d(a)) is amended—

9 (1) by redesignating paragraphs (22) through

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

11 and

12 (2) by inserting after paragraph (21) the fol13 lowing new paragraph:

14 ‘‘(22) services furnished by a physician assist15 ant (as defined in section 1861(aa)(5)) which the as16 sistant is legally authorized to perform under State

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

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

19 1902(a)(10)(C)(iv) (42 U.S.C. 1396a(a)(10)(C)(iv)) is

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

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

22 1396t(e)(2)(A)) is amended by striking ‘‘1905(a)(23)’’

23 and inserting ‘‘1905(a)(24)’’.
325

•HR 5612 IH

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

2 1396(p)(c)(1)(C)(ii)) is amended by striking ‘‘(22), or

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

4 SECTION 711. MEDICAID FAMILY OPPORTUNITY PROVI5 SIONS RELATED TO DISABLED CHILDREN.

6 (a) OPPORTUNITY FOR FAMILIES OF DISABLED

7 CHILDREN TO PURCHASE MEDICAID COVERAGE FOR

8 SUCH CHILDREN.—

9 (1) STATE OPTION TO ALLOW FAMILIES OF DIS10 ABLED CHILDREN TO PURCHASE MEDICAID COV11 ERAGE FOR SUCH CHILDREN.—

12 (A) IN GENERAL.—Section 1902 (42

13 U.S.C. 1396a), as amended by the Foster Care

14 Independence Act of 1999 (Public Law 106–

15 169; 113 Stat. 1822) and the Ticket to Work

16 and Work Incentives Improvement Act of 1999

17 (Public Law 106–170; 113 Stat. 1860), is

18 amended—

19 (i) in subsection (a)(10)(A)(ii)—

20 (I) by striking ‘‘or’’ at the end of

21 subclause (XVI);

22 (II) by adding ‘‘or’’ at the end of

23 subclause (XVII); and

24 (III) by adding at the end the

25 following new subclause:
326

•HR 5612 IH

1 ‘‘(XVIII) who are disabled chil2 dren described in subsection (aa);’’;

3 and

4 (ii) by adding at the end the following

5 new subsection:

6 ‘‘(aa) Individuals described in this subsection are

7 individuals—

8 ‘‘(1) who have not attained 18 years of age;

9 ‘‘(2) who would be considered disabled under

10 section 1614(a)(3)(C) (determined without regard to

11 the reference to age in that section) but for having

12 earnings or deemed income or resources (as deter13 mined under title XVI for children) that exceed the

14 requirements for receipt of supplemental security in15 come benefits; and

16 ‘‘(3) whose family income does not exceed such

17 income level as the State establishes and does not

18 exceed—

19 ‘‘(A) 300 percent of the income official

20 poverty line (as defined by the Office of Man21 agement and Budget, and revised annually in

22 accordance with section 673(2) of the Omnibus

23 Budget Reconciliation Act of 1981) applicable

24 to a family of the size involved; or
327

•HR 5612 IH

1 ‘‘(B) such higher percent of such poverty

2 line as a State may establish, except that no

3 Federal financial participation shall be provided

4 under section 1903(a) for any medical assist5 ance provided to an individual who would not be

6 described in this subsection but for this

7 clause.’’.

8 (B) INTERACTION WITH EMPLOYER-SPON9 SORED FAMILY COVERAGE.—Section 1902(aa)

10 (42 U.S.C. 1396a(aa)), as added by subpara11 graph (A), is amended by adding at the end the

12 following new paragraph:

13 ‘‘(3)(A) If an employer of a parent of an individual

14 described in paragraph (1) offers family coverage under

15 a group health plan (as defined in section 2791(a) of the

16 Public Health Service Act), the State may—

17 ‘‘(i) notwithstanding section 1906(a)(3), require

18 such parent to apply for, enroll in, and pay pre19 miums for, such coverage as a condition of such par20 ent’s child being or remaining eligible for medical as21 sistance under subsection (a)(10)(A)(ii)(XVIII) if

22 the parent is determined eligible for such coverage

23 and the employer contributes at least 50 percent of

24 the total cost of annual premiums for such coverage;

25 and
328

•HR 5612 IH

1 ‘‘(ii) if such coverage is obtained—

2 ‘‘(I) subject to paragraph (2) of section

3 1916(h), reduce the premium imposed by the

4 State under that section (if any) in an amount

5 that reasonably reflects the premium contribu6 tion made by the parent for private coverage on

7 behalf of a child with a disability; and

8 ‘‘(II) treat such coverage as a third party

9 liability under subsection (a)(25).

10 ‘‘(B) In the case of a parent to which subparagraph

11 (A) applies—

12 ‘‘(i) if the family income of such parent does

13 not exceed 300 percent of the income official poverty

14 line (referred to in paragraph (1)(C)(i)), a State

15 may provide for payment of any portion of the an16 nual premium for such family coverage that the par17 ent is required to pay; and

18 ‘‘(ii) any payments made by the State under

19 clause (i) shall be considered, for purposes of section

20 1903(a), to be payments for medical assistance.’’.

21 (2) STATE OPTION TO IMPOSE INCOME-RE22 LATED PREMIUMS.—Section 1916 (42 U.S.C.

23 1396o), as amended by the Ticket to Work and

24 Work Incentives Improvement Act of 1999 (Public

25 Law 106–170; 113 Stat. 1860), is amended—
329

•HR 5612 IH

1 (A) in subsection (a), by striking ‘‘sub2 section (g)’’ and inserting ‘‘subsections (g) and

3 (h)’’; and

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

5 subsection:

6 ‘‘(h)(1) With respect to disabled children provided

7 medical assistance under section

8 1902(a)(10)(A)(ii)(XVIII), subject to paragraph (2), a

9 State may (in a uniform manner for such children) require

10 the families of such children to pay monthly premiums set

11 on a sliding scale based on family income.

12 ‘‘(2) A premium requirement imposed under para13 graph (1) may only apply to the extent that—

14 ‘‘(A) the aggregate amount of such premium

15 and any premium that the parent is required to pay

16 for family coverage under section 1902(aa)(3)(A)(i)

17 does not exceed 5 percent of the family’s income;

18 and

19 ‘‘(B) the requirement is imposed consistent with

20 section 1902(aa)(3)(A)(ii)(I).

21 ‘‘(3) A State shall not require prepayment of a pre22 mium imposed pursuant to paragraph (1) and shall not

23 terminate eligibility of a child under section

24 1902(a)(10)(A)(ii)(XVIII) for medical assistance under

25 this title on the basis of failure to pay any such premium
330

•HR 5612 IH

1 until such failure continues for a period of not less than

2 60 days from the date on which the premium became past

3 due. The State may waive payment of any such premium

4 in any case where the State determines that requiring

5 such payment would create an undue hardship.’’.

6 (3) CONFORMING AMENDMENT.—Section

7 1903(f)(4) (42 U.S.C. 1396b(f)(4)) is amended in

8 the matter preceding subparagraph (A) by inserting

9 ‘‘1902(a)(10)(A)(ii)(XIII),

10 1902(a)(10)(A)(ii)(XVIII),’’ after

11 ‘‘1902(a)(10)(A)(ii)(XVI),’’.

12 (4) EFFECTIVE DATE.—The amendments made

13 by this subsection shall apply to medical assistance

14 for items and services furnished on or after January

15 1, 2002.

16 (b) TREATMENT OF INPATIENT PSYCHIATRIC HOS17 PITAL SERVICES FOR INDIVIDUALS UNDER AGE 21 IN

18 HOME OR COMMUNITY-BASED SERVICES WAIVERS.—

19 (1) IN GENERAL.—Section 1915(c) (42 U.S.C.

20 1396n(c)) is amended—

21 (A) in paragraph (1)—

22 (i) in the first sentence, by inserting

23 ‘‘, or inpatient psychiatric hospital services

24 for individuals under age 21,’’ after ‘‘inter-
331

•HR 5612 IH

1 mediate care facility for the mentally re2 tarded’’; and

3 (ii) in the second sentence, by insert4 ing ‘‘, or inpatient psychiatric hospital

5 services for individuals under age 21’’ be6 fore the period;

7 (B) in paragraph (2)(B), by striking ‘‘or

8 services in an intermediate care facility for the

9 mentally retarded’’ each place it appears and

10 inserting ‘‘, services in an intermediate care fa11 cility for the mentally retarded, or inpatient

12 psychiatric hospital services for individuals

13 under age 21’’;

14 (C) by striking paragraph (2)(C) and in15 serting the following:

16 ‘‘(C) such individuals who are determined to be

17 likely to require the level of care provided in a hos18 pital, nursing facility, or intermediate care facility

19 for the mentally retarded, or inpatient psychiatric

20 hospital services for individuals under age 21, are

21 informed of the feasible alternatives, if available

22 under the waiver, at the choice of such individuals,

23 to the provision of inpatient hospital services, nurs24 ing facility services, services in an intermediate care

25 facility for the mentally retarded, or inpatient psy-
332

•HR 5612 IH

1 chiatric hospital services for individuals under age

2 21;’’; and

3 (D) in paragraph (7)(A)—

4 (i) by inserting ‘‘, or inpatient psy5 chiatric hospital services for individuals

6 under age 21,’’ after ‘‘intermediate care fa7 cility for the mentally retarded’’; and

8 (ii) by inserting ‘‘, or who would re9 quire inpatient psychiatric hospital services

10 for individuals under age 21’’ before the

11 period.

12 (2) EFFECTIVE DATE.—The amendments made

13 by paragraph (1) apply with respect to medical as14 sistance provided on or after October 1, 2000.

15 (c) DEMONSTRATION OF COVERAGE UNDER THE

16 MEDICAID PROGRAM OF CHILDREN WITH POTENTIALLY

17 SEVERE DISABILITIES.—

18 (1) STATE APPLICATION.—A State may apply

19 to the Secretary of Health and Human Services (in

20 this subsection referred to as the ‘‘Secretary’’) for

21 approval of a demonstration project (in this sub22 section referred to as a ‘‘demonstration project’’)

23 under which up to a specified maximum number of

24 children with a potentially severe disability (as de25 fined in paragraph (2)) are provided medical assist-
333

•HR 5612 IH

1 ance under the State medicaid plan under title XIX

2 of the Social Security Act (42 U.S.C. 1396 et seq.).

3 (2) CHILD WITH A POTENTIALLY SEVERE DIS4 ABILITY DEFINED.—

5 (A) IN GENERAL.—In this subsection, the

6 term ‘‘child with a potentially severe disability’’

7 means, with respect to a demonstration project,

8 an individual who—

9 (i) has not attained 21 years of age;

10 (ii) has a physical or mental condi11 tion, disease, disorder (including a con12 genital birth defect or a metabolic condi13 tion), injury, or developmental disability

14 that was incurred before the individual at15 tained such age; and

16 (iii) is reasonably expected, but for

17 the receipt of medical assistance under the

18 State medicaid plan, to reach the level of

19 disability defined under section 1614(a)(3)

20 of the Social Security Act (42 U.S.C.

21 1382c(a)(3)), (determined without regard

22 to the reference to age in subparagraph

23 (C) of that section).

24 (B) EXCEPTION.—Such term does not in25 clude an individual who would be considered
334

•HR 5612 IH

1 disabled under section 1614(a)(3)(C) of the So2 cial Security Act (42 U.S.C. 1382c(a)(3)(C))

3 (determined without regard to the reference to

4 age in that section).

5 (3) APPROVAL OF DEMONSTRATION

6 PROJECTS.—

7 (A) IN GENERAL.—Subject to subpara8 graph (C), the Secretary shall approve applica9 tions under paragraph (1) that meet the re10 quirements of subparagraph (B) and such addi11 tional terms and conditions as the Secretary

12 may require. The Secretary may waive the re13 quirement of section 1902(a)(1) of the Social

14 Security Act (42 U.S.C. 1396a(a)(1)) to allow

15 for sub-State demonstrations.

16 (B) TERMS AND CONDITIONS OF DEM17 ONSTRATION PROJECTS.—The Secretary may

18 not approve a demonstration project under this

19 subsection unless the State provides assurances

20 satisfactory to the Secretary that the following

21 conditions are or will be met:

22 (i) INDEPENDENT EVALUATION.—The

23 State provides for an independent evalua24 tion of the project to be conducted during

25 fiscal year 2005.
335

•HR 5612 IH

1 (ii) CONSULTATION FOR DEVELOP2 MENT OF CRITERIA.—The State consults

3 with appropriate pediatric health profes4 sionals in establishing the criteria for de5 termining whether a child has a potentially

6 severe disability.

7 (iii) ANNUAL REPORT.—The State

8 submits an annual report to the Secretary

9 (in a uniform form and manner established

10 by the Secretary) on the use of funds pro11 vided under the grant that includes the fol12 lowing:

13 (II) Enrollment and financial

14 statistics on the total number of chil15 dren with a potentially severe dis16 ability enrolled in the demonstration

17 project, disaggregated by disability;

18 the services provided by category or

19 code and the cost of each service so

20 categorized or coded; and the number

21 of children enrolled in the demonstra22 tion project who also receive services

23 through private insurance.

24 (II) With respect to the report

25 submitted for fiscal year 2005, the re-
336

•HR 5612 IH

1 sults of the independent evaluation

2 conducted under clause (i).

3 (III) Such additional information

4 as the Secretary may require.

5 (C) LIMITATIONS ON FEDERAL FUND6 ING.—

7 (i) APPROPRIATION.—

8 (I) IN GENERAL.—Out of any

9 funds in the Treasury not otherwise

10 appropriated, there is appropriated to

11 carry out this subsection $16,667,000

12 for each of fiscal years 2001 through

13 2006.

14 (II) BUDGET AUTHORITY.—Sub15 clause (I) constitutes budget authority

16 in advance of appropriations Acts and

17 represents the obligation of the Fed18 eral Government to provide for the

19 payment of the amounts appropriated

20 under subclause (I).

21 (ii) LIMITATION ON PAYMENTS.—In

22 no case may—

23 (I) the aggregate amount of pay24 ments made by the Secretary to
337

•HR 5612 IH

1 States under this subsection exceed

2 $100,000,000;

3 (II) the aggregate amount of

4 payments made by the Secretary to

5 States for administrative expenses re6 lating to the evaluations and annual

7 reports required under clauses (i) and

8 (iii) of subparagraph (B) exceed

9 $2,000,000 of such $100,000,000; or

10 (III) payments be provided by

11 the Secretary for a fiscal year after

12 fiscal year 2009.

13 (iii) FUNDS ALLOCATED TO

14 STATES.—

15 (I) IN GENERAL.—The Secretary

16 shall allocate funds to States based on

17 their applications and the availability

18 of funds. In making such allocations,

19 the Secretary shall ensure an equi20 table distribution of funds among

21 States with large populations and

22 States with small populations.

23 (II) AVAILABILITY.—Funds allo24 cated to a State under a grant made
338

•HR 5612 IH

1 under this subsection for a fiscal year

2 shall remain available until expended.

3 (iv) FUNDS NOT ALLOCATED TO

4 STATES.—Funds not allocated to States in

5 the fiscal year for which they are appro6 priated shall remain available in suc7 ceeding fiscal years for allocation by the

8 Secretary using the allocation formula es9 tablished under this subsection.

10 (v) PAYMENTS TO STATES.—The Sec11 retary shall pay to each State with a dem12 onstration project approved under this sub13 section, from its allocation under clause

14 (iii), an amount for each quarter equal to

15 the Federal medical assistance percentage

16 (as defined in section 1905(b) of the Social

17 Security Act (42 U.S.C. 1395d(b))) of ex18 penditures in the quarter for medical as19 sistance provided to children with a poten20 tially severe disability.

21 (4) RECOMMENDATION.—Not later than Octo22 ber 1, 2004, the Secretary shall submit a rec23 ommendation to the Committee on Commerce of the

24 House of Representatives and the Committee on Fi25 nance of the Senate regarding whether the dem-
339

•HR 5612 IH

1 onstration project established under this subsection

2 should be continued after fiscal year 2006.

3 (5) STATE DEFINED.—In this subsection, the

4 term ‘‘State’’ has the meaning given such term for

5 purposes of title XIX of the Social Security Act (42

6 U.S.C. 1396 et seq.).

7 (d) DEVELOPMENT AND SUPPORT OF FAMILY-TO8 FAMILY HEALTH INFORMATION CENTERS.—Section 501

9 (42 U.S.C. 701) is amended by adding at the end the fol10 lowing new subsection:

11 ‘‘(c)(1)(A) In addition to amounts appropriated

12 under subsection (a) and retained under section 502(a)(1)

13 for the purpose of carrying out activities described in sub14 section (a)(2), there is appropriated to the Secretary, out

15 of any money in the Treasury not otherwise appropriated,

16 for the purpose of enabling the Secretary (through grants,

17 contracts, or otherwise) to provide for special projects of

18 regional and national significance for the development and

19 support of family-to-family health information centers de20 scribed in paragraph (2), $10,000,000 for each of fiscal

21 years 2001 through 2006.

22 ‘‘(B) Funds appropriated under subparagraph (A)

23 shall remain available until expended.

24 ‘‘(2) The family-to-family health information centers

25 described in this paragraph are centers that—
340

•HR 5612 IH

1 ‘‘(A) assist families of children with disabilities

2 or special health care needs to make informed

3 choices about health care in order to promote good

4 treatment decisions, cost-effectiveness, and improved

5 health outcomes for such children;

6 ‘‘(B) provide information regarding the health

7 care needs of, and resources available for, children

8 with disabilities or special health care needs;

9 ‘‘(C) identify successful health delivery models

10 for such children;

11 ‘‘(D) develop with representatives of health care

12 providers, managed care organizations, health care

13 purchasers, and appropriate State agencies a model

14 for collaboration between families of such children

15 and health professionals;

16 ‘‘(E) provide training and guidance regarding

17 caring for such children;

18 ‘‘(F) conduct outreach activities to the families

19 of such children, health professionals, schools, and

20 other appropriate entities and individuals; and

21 ‘‘(G) are staffed by families of children with

22 disabilities or special health care needs who have ex23 pertise in Federal and State public and private

24 health care systems and health professionals.
341

•HR 5612 IH

1 ‘‘(3) The provisions of this title that are applicable

2 to the funds made available to the Secretary under section

3 502(a)(1) apply in the same manner to funds made avail4 able to the Secretary under paragraph (1).’’.

5 (e) RESTORATION OF MEDICAID ELIGIBILITY FOR

6 CERTAIN SSI BENEFICIARIES.—

7 (1) IN GENERAL.—Section

8 1902(a)(10)(A)(i)(II) (42 U.S.C.

9 1396a(a)(10)(A)(i)(II)) is amended—

10 (A) by inserting ‘‘(aa)’’ after ‘‘(II)’’;

11 (B) by striking ‘‘or who are’’ and inserting

12 ‘‘(bb) who are’’; and

13 (C) by inserting before the comma at the

14 end the following: ‘‘, or (cc) who are under 21

15 years of age and with respect to whom supple16 mental security income benefits would be paid

17 under title XVI but for section 1611(c)(7)’’.

18 (2) EFFECTIVE DATE.—The amendments made

19 by paragraph (1) apply to medical assistance for

20 items and services furnished on or after October 1,

21 2000, except that a State may elect to apply such

22 amendments to items and services furnished on or

23 after any date after the date of the enactment of

24 this section and before October 1, 2000.
342

•HR 5612 IH

1 TITLE VIII—STATE CHILDREN’S

2 HEALTH INSURANCE PROGRAM

3 SEC. 801. SPECIAL RULE FOR REDISTRIBUTION AND AVAIL4 ABILITY OF UNUSED FISCAL YEAR 1998 AND

5 1999 SCHIP ALLOTMENTS.

6 (a) CHANGE IN RULES FOR REDISTRIBUTION AND

7 RETENTION OF UNUSED SCHIP ALLOTMENTS FOR FIS8 CAL YEARS 1998 AND 1999.—Section 2104 (42 U.S.C.

9 1397dd) is amended by adding at the end the following

10 new subsection:

11 ‘‘(g) RULE FOR REDISTRIBUTION AND EXTENDED

12 AVAILABILITY OF FISCAL YEARS 1998 AND 1999 ALLOT13 MENTS.—

14 ‘‘(1) AMOUNT REDISTRIBUTED.—

15 ‘‘(A) IN GENERAL.—In the case of a State

16 that expends all of its allotment under sub17 section (b) or (c) for fiscal year 1998 by the

18 end of fiscal year 2000, or for fiscal year 1999

19 by the end of fiscal year 2001, the Secretary

20 shall redistribute to the State under subsection

21 (f) (from the fiscal year 1998 or 1999 allot22 ments of other States, respectively, as deter23 mined by the application of paragraphs (2) and

24 (3) with respect to the respective fiscal year))

25 the following amount:
343

•HR 5612 IH

1 ‘‘(i) STATE.—In the case of 1 of the

2 50 States or the District of Columbia, with

3 respect to—

4 ‘‘(I) the fiscal year 1998 allot5 ment, the amount by which the

6 State’s expenditures under this title in

7 fiscal years 1998, 1999, and 2000 ex8 ceed the State’s allotment for fiscal

9 year 1998 under subsection (b); or

10 ‘‘(II) the fiscal year 1999 allot11 ment, the amount by which the

12 State’s expenditures under this title in

13 fiscal years 1999, 2000, and 2001 ex14 ceed the State’s allotment for fiscal

15 year 1999 under subsection (b).

16 ‘‘(ii) TERRITORY.—In the case of a

17 commonwealth or territory described in

18 subsection (c)(3), an amount that bears

19 the same ratio to 1.05 percent of the total

20 amount described in paragraph (2)(B)(i)(I)

21 as the ratio of the commonwealth’s or ter22 ritory’s fiscal year 1998 or 1999 allotment

23 under subsection (c) (as the case may be)

24 bears to the total of all such allotments for

25 such fiscal year under such subsection.
344

•HR 5612 IH

1 ‘‘(B) EXPENDITURE RULES.—An amount

2 redistributed to a State under this paragraph

3 with respect to fiscal year 1998 or 1999—

4 ‘‘(i) shall not be included in the deter5 mination of the State’s allotment for any

6 fiscal year under this section;

7 ‘‘(ii) notwithstanding subsection (e),

8 shall remain available for expenditure by

9 the State through the end of fiscal year

10 2002; and

11 ‘‘(iii) shall be counted as being ex12 pended with respect to a fiscal year allot13 ment in accordance with applicable regula14 tions of the Secretary.

15 ‘‘(2) EXTENSION OF AVAILABILITY OF PORTION

16 OF UNEXPENDED FISCAL YEARS 1998 AND 1999 AL17 LOTMENTS.—

18 ‘‘(A) IN GENERAL.—Notwithstanding sub19 section (e):

20 ‘‘(i) FISCAL YEAR 1998 ALLOTMENT.—

21 Of the amounts allotted to a State pursu22 ant to this section for fiscal year 1998 that

23 were not expended by the State by the end

24 of fiscal year 2000, the amount specified in

25 subparagraph (B) for fiscal year 1998 for
345

•HR 5612 IH

1 such State shall remain available for ex2 penditure by the State through the end of

3 fiscal year 2002.

4 ‘‘(ii) FISCAL YEAR 1999 ALLOT5 MENT.—Of the amounts allotted to a State

6 pursuant to this subsection for fiscal year

7 1999 that were not expended by the State

8 by the end of fiscal year 2001, the amount

9 specified in subparagraph (B) for fiscal

10 year 1999 for such State shall remain

11 available for expenditure by the State

12 through the end of fiscal year 2002.

13 ‘‘(B) AMOUNT REMAINING AVAILABLE FOR

14 EXPENDITURE.—The amount specified in this

15 subparagraph for a State for a fiscal year is

16 equal to—

17 ‘‘(i) the amount by which (I) the total

18 amount available for redistribution under

19 subsection (f) from the allotments for that

20 fiscal year, exceeds (II) the total amounts

21 redistributed under paragraph (1) for that

22 fiscal year; multiplied by

23 ‘‘(ii) the ratio of the amount of such

24 State’s unexpended allotment for that fis-
346

•HR 5612 IH

1 cal year to the total amount described in

2 clause (i)(I) for that fiscal year.

3 ‘‘(C) USE OF UP TO 10 PERCENT OF RE4 TAINED 1998 ALLOTMENTS FOR OUTREACH AC5 TIVITIES.—Notwithstanding section

6 2105(c)(2)(A), with respect to any State de7 scribed in subparagraph (A)(i), the State may

8 use up to 10 percent of the amount specified in

9 subparagraph (B) for fiscal year 1998 for ex10 penditures for outreach activities approved by

11 the Secretary.

12 ‘‘(3) DETERMINATION OF AMOUNTS.—For pur13 poses of calculating the amounts described in para14 graphs (1) and (2) relating to the allotment for fis15 cal year 1998 or fiscal year 1999, the Secretary

16 shall use the amounts reported by the States not

17 later than November 30, 2000, or November 30,

18 2001, respectively, on HCFA Form 64 or HCFA

19 Form 21, as approved by the Secretary.’’.

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

21 this section shall take effect as if included in the enact22 ment of section 4901 of BBA (111 Stat. 552).
347

•HR 5612 IH

1 SEC. 802. AUTHORITY TO PAY MEDICAID EXPANSION SCHIP

2 COSTS FROM TITLE XXI APPROPRIATION.

3 (a) AUTHORITY TO PAY MEDICAID EXPANSION

4 SCHIP COSTS FROM TITLE XXI APPROPRIATION.—Sec5 tion 2105(a) (42 U.S.C. 1397ee(a)) is amended—

6 (1) by redesignating subparagraphs (A) through

7 (D) of paragraph (2) as clauses (i) through (iv), re8 spectively, and indenting appropriately;

9 (2) by redesignating paragraph (1) as subpara10 graph (C), and indenting appropriately;

11 (3) by redesignating paragraph (2) as subpara12 graph (D), and indenting appropriately;

13 (4) by striking ‘‘(a) IN GENERAL.—’’ and the

14 remainder of the text that precedes subparagraph

15 (C), as so redesignated, and inserting the following:

16 ‘‘(a) PAYMENTS.—

17 ‘‘(1) IN GENERAL.—Subject to the succeeding

18 provisions of this section, the Secretary shall pay to

19 each State with a plan approved under this title,

20 from its allotment under section 2104, an amount

21 for each quarter equal to the enhanced FMAP (or,

22 in the case of expenditures described in subpara23 graph (B), the Federal medical assistance percent24 age (as defined in the first sentence of section

25 1905(b))) of expenditures in the quarter—
348

•HR 5612 IH

1 ‘‘(A) for child health assistance under the

2 plan for targeted low-income children in the

3 form of providing medical assistance for which

4 payment is made on the basis of an enhanced

5 FMAP under the fourth sentence of section

6 1905(b);

7 ‘‘(B) for the provision of medical assist8 ance on behalf of a child during a presumptive

9 eligibility period under section 1920A;’’; and

10 (5) by adding after subparagraph (D), as so re11 designated, the following new paragraph:

12 ‘‘(2) ORDER OF PAYMENTS.—Payments under

13 paragraph (1) from a State’s allotment shall be

14 made in the following order:

15 ‘‘(A) First, for expenditures for items de16 scribed in paragraph (1)(A).

17 ‘‘(B) Second, for expenditures for items

18 described in paragraph (1)(B).

19 ‘‘(C) Third, for expenditures for items de20 scribed in paragraph (1)(C).

21 ‘‘(D) Fourth, for expenditures for items

22 described in paragraph (1)(D).’’.

23 (b) ELIMINATION OF REQUIREMENT TO REDUCE

24 TITLE XXI ALLOTMENT BY MEDICAID EXPANSION
349

•HR 5612 IH

1 SCHIP COSTS.—Section 2104 (42 U.S.C. 1397dd) is

2 amended by striking subsection (d).

3 (c) AUTHORITY TO TRANSFER TITLE XXI APPRO4 PRIATIONS TO TITLE XIX APPROPRIATION ACCOUNT AS

5 REIMBURSEMENT FOR MEDICAID EXPENDITURES FOR

6 MEDICAID EXPANSION SCHIP SERVICES.—Notwith7 standing any other provision of law, all amounts appro8 priated under title XXI and allotted to a State pursuant

9 to subsection (b) or (c) of section 2104 of the Social Secu10 rity Act (42 U.S.C. 1397dd) for fiscal years 1998 through

11 2000 (including any amounts that, but for this provision,

12 would be considered to have expired) and not expended

13 in providing child health assistance or related services for

14 which payment may be made pursuant to subparagraph

15 (C) or (D) of section 2105(a)(1) of such Act (42 U.S.C.

16 1397ee(a)(1)) (as amended by subsection (a)), shall be

17 available to reimburse the Grants to States for Medicaid

18 account in an amount equal to the total payments made

19 to such State under section 1903(a) of such Act (42

20 U.S.C. 1396b(a)) for expenditures in such years for med21 ical assistance described in subparagraphs (A) and (B) of

22 section 2105(a)(1) of such Act (42 U.S.C. 1397ee(a)(1)

23 (as so amended).

24 (d) CONFORMING AMENDMENTS.—
350

•HR 5612 IH

1 (1) Section 1905(b) (42 U.S.C. 1396d(b)) is

2 amended in the fourth sentence by striking ‘‘the

3 State’s allotment under section 2104 (not taking

4 into account reductions under section 2104(d)(2))

5 for the fiscal year reduced by the amount of any

6 payments made under section 2105 to the State

7 from such allotment for such fiscal year’’ and insert8 ing ‘‘the State’s available allotment under section

9 2104’’.

10 (2) Section 1905(u)(1)(B) (42 U.S.C.

11 1396d(u)(1)(B)) is amended by striking ‘‘and sec12 tion 2104(d)’’.

13 (3) Section 2104 (42 U.S.C. 1397dd), as

14 amended by subsection (b), is further amended—

15 (A) in subsection (b)(1), by striking ‘‘and

16 subsection (d)’’; and

17 (B) in subsection (c)(1), by striking ‘‘sub18 ject to subsection (d),’’.

19 (4) Section 2105(c) (42 U.S.C. 1397ee(c)) is

20 amended—

21 (A) in paragraph (2)(A), by striking all

22 that follows ‘‘Except as provided in this para23 graph,’’ and inserting ‘‘the amount of payment

24 that may be made under subsection (a) for a

25 fiscal year for expenditures for items described
351

•HR 5612 IH

1 in paragraph (1)(D) of such subsection shall

2 not exceed 10 percent of the total amount of ex3 penditures for which payment is made under

4 subparagraphs (A), (C), and (D) of paragraph

5 (1) of such subsection.’’;

6 (B) in paragraph (2)(B), by striking ‘‘de7 scribed in subsection (a)(2)’’ and inserting ‘‘de8 scribed in subsection (a)(1)(D)’’; and

9 (C) in paragraph (6)(B), by striking ‘‘Ex10 cept as otherwise provided by law,’’ and insert11 ing ‘‘Except as provided in subparagraph (A) or

12 (B) of subsection (a)(1) or any other provision

13 of law,’’.

14 (5) Section 2110(a) (42 U.S.C. 1397jj(a)) is

15 amended by striking ‘‘section 2105(a)(2)(A)’’ and

16 inserting ‘‘section 2105(a)(1)(D)(i)’’.

17 (e) TECHNICAL AMENDMENT.—Section

18 2105(d)(2)(B)(ii) (42 U.S.C. 1397ee(d)(2)(B)(ii)) is

19 amended by striking ‘‘enhanced FMAP under section

20 1905(u)’’ and inserting ‘‘enhanced FMAP under the

21 fourth sentence of section 1905(b)’’.

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

23 this section shall be effective as if included in the enact24 ment of section 4901 of the BBA (111 Stat. 552).
352

•HR 5612 IH

1 SEC. 803. OPTIONAL COVERAGE OF CERTAIN LEGAL IMMI2 GRANTS UNDER SCHIP.

3 (a) IN GENERAL.—Section 2107(e)(1) (42 U.S.C.

4 1397gg(e)(1)) as amended in section 707(d), is further

5 amended by adding at the end the following new subpara6 graph:

7 ‘‘(E) Section 1903(v)(4) (relating to op8 tional coverage of categories of lawfully residing

9 alien children) but only if the State has elected

10 to apply such section to the category of children

11 under title XIX.’’.

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

13 subsection (a) takes effect October 1, 2000, and applies

14 to medical assistance and child health assistance furnished

15 on or after such date.

16 TITLE IX—OTHER PROVISIONS

17 Subtitle A—PACE Program

18 SEC. 901. EXTENSION OF TRANSITION FOR CURRENT WAIV19 ERS.

20 Section 4803(d)(2) of BBA is amended—

21 (1) in subparagraph (A), by striking ‘‘24

22 months’’ and inserting ‘‘36 months’’;

23 (2) in subparagraph (A), by striking ‘‘the initial

24 effective date of regulations described in subsection

25 (a)’’ and inserting ‘‘July 1, 2000’’; and
353

•HR 5612 IH

1 (3) in subparagraph (B), by striking ‘‘3 years’’

2 and inserting ‘‘4 years’’.

3 SEC. 902. CONTINUING OF CERTAIN OPERATING ARRANGE4 MENTS PERMITTED.

5 (a) IN GENERAL.—Section 1894(f)(2) (42 U.S.C.

6 1395eee(f)(2)) is amended by adding at the end the fol7 lowing new subparagraph:

8 ‘‘(C) CONTINUATION OF MODIFICATIONS

9 OR WAIVERS OF OPERATIONAL REQUIREMENTS

10 UNDER DEMONSTRATION STATUS.—If a PACE

11 program operating under demonstration author12 ity has contractual or other operating arrange13 ments which are not otherwise recognized in

14 regulation and which were in effect on July 1,

15 2000, the Secretary (in close consultation with,

16 and with the concurrence of, the State admin17 istering agency) shall permit any such program

18 to continue such arrangements so long as such

19 arrangements are found by the Secretary and

20 the State to be reasonably consistent with the

21 objectives of the PACE program.’’.

22 (b) CONFORMING AMENDMENT.—Section 1934(f)(2)

23 (42 U.S.C. 1396u–4(f)(2)) is amended by adding at the

24 end the following new subparagraph:
354

•HR 5612 IH

1 ‘‘(C) CONTINUATION OF MODIFICATIONS

2 OR WAIVERS OF OPERATIONAL REQUIREMENTS

3 UNDER DEMONSTRATION STATUS.—If a PACE

4 program operating under demonstration author5 ity has contractual or other operating arrange6 ments which are not otherwise recognized in

7 regulation and which were in effect on July 1

8 2000, the Secretary (in close consultation with,

9 and with the concurrence of, the State admin10 istering agency) shall permit any such program

11 to continue such arrangements so long as such

12 arrangements are found by the Secretary and

13 the State to be reasonably consistent with the

14 objectives of the PACE program.’’.

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

16 this section shall be effective as included in the enactment

17 of BBA.

18 SEC. 903. FLEXIBILITY IN EXERCISING WAIVER AUTHORITY.

19 In applying sections 1894(f)(2)(B) and

20 1934(f)(2)(B) of the Social Security Act (42 U.S.C.

21 1395eee(f)(2)(B), 1396u–4(f)(2)(B)), the Secretary of

22 Health and Human Services—

23 (1) shall approve or deny a request for a modi24 fication or a waiver of provisions of the PACE pro-
355

•HR 5612 IH

1 tocol not later than 90 days after the date the Sec2 retary receives the request; and

3 (2) may exercise authority to modify or waive

4 such provisions in a manner that responds promptly

5 to the needs of PACE programs relating to areas of

6 employment and the use of community-based pri7 mary care physicians.

8 Subtitle B—Outreach to Eligible

9 Low-Income Medicare Bene10 ficiaries

11 SEC. 911. OUTREACH ON AVAILABILITY OF MEDICARE

12 COST-SHARING ASSISTANCE TO ELIGIBLE

13 LOW-INCOME MEDICARE BENEFICIARIES.

14 (a) OUTREACH.—

15 (1) IN GENERAL.—Title XI (42 U.S.C. 1301 et

16 seq.) is amended by inserting after section 1143 the

17 following new section:

18 ‘‘OUTREACH EFFORTS TO INCREASE AWARENESS OF THE

19 AVAILABILITY OF MEDICARE COST-SHARING

20 ‘‘SEC. 1144. (a) OUTREACH.—

21 ‘‘(1) IN GENERAL.—The Commissioner of So22 cial Security (in this section referred to as the ‘Com23 missioner’) shall conduct outreach efforts to—

24 ‘‘(A) identify individuals entitled to bene25 fits under the medicare program under title

26 XVIII who may be eligible for medical assist-
356

•HR 5612 IH

1 ance for payment of the cost of medicare cost2 sharing under the medicaid program pursuant

3 to sections 1902(a)(10)(E) and 1933; and

4 ‘‘(B) notify such individuals of the avail5 ability of such medical assistance under such

6 sections.

7 ‘‘(2) CONTENT OF NOTICE.—Any notice fur8 nished under paragraph (1) shall state that eligi9 bility for medicare cost-sharing assistance under

10 such sections is conditioned upon—

11 ‘‘(A) the individual providing to the State

12 information about income and resources (in the

13 case of an individual residing in a State that

14 imposes an assets test for such eligibility); and

15 ‘‘(B) meeting the applicable eligibility cri16 teria.

17 ‘‘(b) COORDINATION WITH STATES.—

18 ‘‘(1) IN GENERAL.—In conducting the outreach

19 efforts under this section, the Commissioner shall—

20 ‘‘(A) furnish the agency of each State re21 sponsible for the administration of the medicaid

22 program and any other appropriate State agen23 cy with information consisting of the name and

24 address of individuals residing in the State that

25 the Commissioner determines may be eligible
357

•HR 5612 IH

1 for medical assistance for payment of the cost

2 of medicare cost-sharing under the medicaid

3 program pursuant to sections 1902(a)(10)(E)

4 and 1933; and

5 ‘‘(B) update any such information not less

6 frequently than once per year.

7 ‘‘(2) INFORMATION IN PERIODIC UPDATES.—

8 The periodic updates described in paragraph (1)(B)

9 shall include information on individuals who are or

10 may be eligible for the medical assistance described

11 in paragraph (1)(A) because such individuals have

12 experienced reductions in benefits under title II.’’.

13 (2) AMENDMENT TO TITLE XIX.—Section

14 1905(p) (42 U.S.C. 1396d(p)) is amended by adding

15 at the end the following new paragraph:

16 ‘‘(5) For provisions relating to outreach efforts to in17 crease awareness of the availability of medicare cost-shar18 ing, see section 1144.’’.

19 (b) GAO REPORT.—The Comptroller General of the

20 United States shall conduct a study of the impact of sec21 tion 1144 of the Social Security Act (as added by sub22 section (a)(1)) on the enrollment of individuals for medi23 care cost-sharing under the medicaid program. Not later

24 than 18 months after the date that the Commissioner of

25 Social Security first conducts outreach under section 1144
358

•HR 5612 IH

1 of such Act, the Comptroller General shall submit to Con2 gress a report on such study. The report shall include such

3 recommendations for legislative changes as the Comp4 troller General deems appropriate.

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

6 subsections (a) shall take effect one year after the date

7 of the enactment of this Act.

8 Subtitle C—Maternal and Child

9 Health Block Grant

10 SEC. 921. INCREASE IN AUTHORIZATION OF APPROPRIA11 TIONS FOR THE MATERNAL AND CHILD

12 HEALTH SERVICES BLOCK GRANT.

13 (a) IN GENERAL.—Section 501(a) (42 U.S.C.

14 701(a)) is amended in the matter preceding paragraph (1)

15 by striking ‘‘$705,000,000 for fiscal year 1994’’ and in16 serting ‘‘$850,000,000 for fiscal year 2001’’.

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

18 subsection (a) takes effect on October 1, 2000.

19 Subtitle D—Diabetes

20 SEC. 931. INCREASE IN APPROPRIATIONS FOR SPECIAL DI21 ABETES PROGRAMS FOR TYPE I DIABETES

22 AND INDIANS.

23 (a) SPECIAL DIABETES PROGRAMS FOR TYPE I DIA24 BETES.—Section 330B(b) of the Public Health Service

25 Act (42 U.S.C. 254c–2(b)) is amended—
359

•HR 5612 IH

1 (1) by striking ‘‘Notwithstanding’’ and insert2 ing the following:

3 ‘‘(1) TRANSFERRED FUNDS.—Notwith4 standing’’; and

5 (2) by adding at the end the following:

6 ‘‘(2) APPROPRIATIONS.—For the purpose of

7 making grants under this section, there is appro8 priated, out of any funds in the Treasury not other9 wise appropriated—

10 ‘‘(A) $70,000,000 for each of fiscal years

11 2001 and 2002 (which shall be combined with

12 amounts transferred under paragraph (1) for

13 each such fiscal years); and

14 ‘‘(B) $100,000,000 for fiscal year 2003.’’.

15 (b) SPECIAL DIABETES PROGRAMS FOR INDIANS.—

16 Section 330C(c) of such Act (42 U.S.C. 254c–3(c)) is

17 amended—

18 (1) by striking ‘‘Notwithstanding’’ and insert19 ing the following:

20 ‘‘(1) TRANSFERRED FUNDS.—Notwith21 standing’’; and

22 (2) by adding at the end the following:

23 ‘‘(2) APPROPRIATIONS.—For the purpose of

24 making grants under this section, there is appro-
360

•HR 5612 IH

1 priated, out of any money in the Treasury not other2 wise appropriated—

3 ‘‘(A) $70,000,000 for each of fiscal years

4 2001 and 2002 (which shall be combined with

5 amounts transferred under paragraph (1) for

6 each such fiscal years); and

7 ‘‘(B) $100,000,000 for fiscal year 2003.’’.

8 (c) EXTENSION OF FINAL REPORT ON GRANT PRO9 GRAMS.—Section 4923(b)(2) of BBA is amended by strik10 ing ‘‘2002’’ and inserting ‘‘2003’’.

11 SEC. 932. APPROPRIATIONS FOR RICKY RAY HEMOPHILIA

12 RELIEF FUND.

13 Section 101(e) of the Ricky Ray Hemophilia Relief

14 Fund Act of 1998 (42 U.S.C. 300c–22 note) is amended

15 by adding at the end the following: ‘‘There is appropriated

16 to the Fund $475,000,000 for fiscal year 2001, to remain

17 available until expended.’’.

Æ