I

106TH CONGRESS

2D SESSION H. R. 5661

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

DECEMBER 14, 2000

Mr. THOMAS (for himself, Mr. BLILEY, and Mr. BILIRAKIS) introduced the

following bill; which was referred to the Committee on Ways and Means,

and in addition to the Committee on Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such

provisions as fall within the jurisdiction of the committee concerned

A BILL

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

Act to provide benefits improvements and beneficiary

protections in the Medicare and Medicaid Programs and

the State child health insurance program (SCHIP), as

revised by the Balanced Budget Act of 1997 and the

Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE; AMENDMENTS TO SOCIAL SECU2 RITY ACT; REFERENCES TO OTHER ACTS;

3 TABLE OF CONTENTS.

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

5 ‘‘Medicare, Medicaid, and SCHIP Benefits Improvement

6 and Protection Act of 2000’’.

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

9 Act an amendment is expressed in terms of an amendment

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

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

12 provision of the Social Security Act.

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

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

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

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

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

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

20 SCHIP Balanced Budget Refinement Act of 1999

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

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

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

24 this Act is as follows:

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

table of contents.
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TITLE I—MEDICARE BENEFICIARY IMPROVEMENTS

Subtitle A—Improved Preventive Benefits

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

Sec. 102. Coverage of screening for glaucoma.

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

Sec. 104. Modernization of screening mammography benefit.

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

diabetes or a renal disease.

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. 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.

Sec. 128. Lifestyle modification program demonstration.

TITLE II—RURAL HEALTH CARE IMPROVEMENTS

Subtitle A—Critical Access Hospital Provisions

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

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

all-inclusive rate.

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

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

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

hospitals.

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

Subtitle B—Other Rural Hospitals Provisions

Sec. 211. Treatment of rural disproportionate share hospitals.
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Sec. 212. Option to base eligibility for medicare dependent, small rural hospital

program on discharges during two of the three 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. Revision of acute care hospital payment update for 2001.

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.

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. Five percent increase in payment base.

Sec. 322. Clarification of physician certification.

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

Subtitle D—Other Provisions

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

TITLE IV—PROVISIONS RELATING TO PART B

Subtitle A—Hospital Outpatient Services

Sec. 401. Revision of hospital outpatient PPS payment update.
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Sec. 402. Clarifying process and standards for determining eligibility of devices

for pass-through payments under hospital outpatient PPS.

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

hospitals that did not submit a 1996 cost report.

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

entities.

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

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

under OPD PPS.

Subtitle B—Provisions Relating to Physicians’ Services

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

Sec. 412. Physician group practice demonstration.

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

contractor physicians.

Subtitle C—Other Services

Sec. 421. One-year extension of moratorium on therapy caps; report on standards for supervision of physical therapy assistants.

Sec. 422. Update in renal dialysis composite rate.

Sec. 423. Payment for ambulance services.

Sec. 424. Ambulatory surgical centers.

Sec. 425. Full update for durable medical equipment.

Sec. 426. Full update for orthotics and prosthetics.

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

prosthetics and certain custom-fabricated orthotic items.

Sec. 428. Replacement of prosthetic devices and parts.

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

Sec. 430. Contrast enhanced diagnostic procedures under hospital prospective

payment system.

Sec. 431. Qualifications for community mental health centers.

Sec. 432. Payment of physician and nonphysician services in certain Indian

providers.

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

registered nurse first assistants.

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

provided by certain providers.

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

by certain nonphysician providers.

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

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

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

TITLE V—PROVISIONS RELATING TO PARTS A AND B

Subtitle A—Home Health Services

Sec. 501. One-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 periodic interim payment.
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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. Clarification of application of temporary payment increases for 2001.

TITLE VI—PROVISIONS RELATING TO PART C

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

Subtitle A—Medicare+Choice Payment Reforms

Sec. 601. Increase in minimum payment amount.

Sec. 602. Increase in minimum percentage increase.

Sec. 603. Phase-in of risk adjustment.

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

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

Medicare+Choice plans.

Sec. 606. Permitting premium reductions as additional benefits under

Medicare+Choice plans.

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

enrollees for 2001.

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

Affairs and military facility services in calculating

Medicare+Choice payment rates.

Subtitle B—Other Medicare+Choice Reforms

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

contract term.

Sec. 612. Restriction on implementation of significant new regulatory requirements midyear.

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. Increased civil money penalty for Medicare+Choice organizations that

terminate contracts mid-year.

Subtitle C—Other Managed Care Reforms

Sec. 631. One-year extension of social health maintenance organization

(SHMO) demonstration project.

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

nursing organization (CNO) demonstration project.

Sec. 633. Extension of medicare municipal health services demonstration

projects.

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

period.

TITLE VII—MEDICAID

Sec. 701. DSH payments.

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

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

waivers.

Sec. 704. Medicaid county-organized health systems.

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

payment limits.

Sec. 706. Alaska FMAP.

Sec. 707. One-year extension of welfare-to-work transition.

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

Sec. 709. Development of uniform QMB/SLMB application form.
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Sec. 710. Technical corrections.

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. Application of medicaid child presumptive eligibility provisions.

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.

Subtitle E—Information on Nursing Facility Staffing

Sec. 941. Posting of information on nursing facility staffing.

Subtitle F—Adjustment of Multiemployer Plan Benefits Guaranteed

Sec. 951. Multiemployer plan benefits guaranteed.

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.—
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1 (1) BIENNIAL SCREENING PAP SMEAR.—Section

2 1861(nn)(1) (42 U.S.C. 1395x(nn)(1)) is amended

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

4 (2) BIENNIAL SCREENING PELVIC EXAM.—Sec5 tion 1861(nn)(2) (42 U.S.C. 1395x(nn)(2)) is

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

7 years’’.

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

9 subsection (a) shall apply to items and services furnished

10 on or after July 1, 2001.

11 SEC. 102. COVERAGE OF SCREENING FOR GLAUCOMA.

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

13 1395x(s)(2)) is amended—

14 (1) by striking ‘‘and’’ at the end of subpara15 graph (S);

16 (2) by inserting ‘‘and’’ at the end of subpara17 graph (T); and

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

19 ‘‘(U) screening for glaucoma (as defined in sub20 section (uu)) for individuals determined to be at

21 high risk for glaucoma, individuals with a family his22 tory of glaucoma and individuals with diabetes;’’.

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

24 1395x) is amended by adding at the end the following new

25 subsection:
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1 ‘‘Screening for Glaucoma

2 ‘‘(uu) The term ‘screening for glaucoma’ means a di3 lated eye examination with an intraocular pressure meas4 urement, and a direct ophthalmoscopy or a slit-lamp bio5 microscopic examination for the early detection of glau6 coma which is furnished by or under the direct supervision

7 of an optometrist or ophthalmologist who is legally author8 ized to furnish such services under State law (or the State

9 regulatory mechanism provided by State law) of the State

10 in which the services are furnished, as would otherwise

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

12 to a physician’s professional service, if the individual in13 volved has not had such an examination in the preceding

14 year.’’.

15 (c) CONFORMING AMENDMENT.—Section

16 1862(a)(1)(F) (42 U.S.C. 1395y(a)(1)(F)) is amended—

17 (1) by striking ‘‘and,’’; and

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

19 the case of screening for glaucoma, which is per20 formed more frequently than is provided under sec21 tion 1861(uu),’’.

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

23 this section shall apply to services furnished on or after

24 January 1, 2002.
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1 SEC. 103. COVERAGE OF SCREENING COLONOSCOPY FOR

2 AVERAGE RISK INDIVIDUALS.

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

4 1395x(pp)) is amended—

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

6 case of an individual at high risk for colorectal can7 cer, screening colonoscopy’’ and inserting ‘‘Screening

8 colonoscopy’’; and

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

10 (1)(C), an’’ and inserting ‘‘An’’.

11 (b) FREQUENCY LIMITS FOR SCREENING

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

13 is amended—

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

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

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

17 cancer, if the procedure is performed within the 119

18 months after a previous screening colonoscopy’’; and

19 (2) in paragraph (3)—

20 (A) in the heading by striking ‘‘FOR INDI21 VIDUALS AT HIGH RISK FOR COLORECTAL CAN22 CER’’;

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

24 individuals at high risk for colorectal cancer (as

25 defined in section 1861(pp)(2))’’; and
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1 (C) in subparagraph (E), by inserting be2 fore the period at the end the following: ‘‘or for

3 other individuals if the procedure is performed

4 within the 119 months after a previous screen5 ing colonoscopy or within 47 months after a

6 previous screening flexible sigmoidoscopy’’.

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

8 this section shall apply to colorectal cancer screening serv9 ices provided on or after July 1, 2001.

10 SEC. 104. MODERNIZATION OF SCREENING MAMMOGRAPHY

11 BENEFIT.

12 (a) INCLUSION IN PHYSICIAN FEE SCHEDULE.—Sec13 tion 1848( j)(3) (42 U.S.C. 1395w–4( j)(3)) is amended by

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

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

16 (42 U.S.C. 1395m(c)) is amended to read as follows:

17 ‘‘(c) PAYMENT AND STANDARDS FOR SCREENING

18 MAMMOGRAPHY.—

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

20 incurred for screening mammography (as defined in

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

22 ‘‘(A) for screening mammography con23 ducted consistent with the frequency permitted

24 under paragraph (2); and
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1 ‘‘(B) if the screening mammography is

2 conducted by a facility that has a certificate (or

3 provisional certificate) issued under section 354

4 of the Public Health Service Act.

5 ‘‘(2) FREQUENCY COVERED.—

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

7 the Secretary under subparagraph (B)—

8 ‘‘(i) no payment may be made under

9 this part for screening mammography per10 formed on a woman under 35 years of age;

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

12 part for only one screening mammography

13 performed on a woman over 34 years of

14 age, but under 40 years of age; and

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

16 years of age, payment may not be made

17 under this part for screening mammog18 raphy performed within 11 months fol19 lowing the month in which a previous

20 screening mammography was performed.

21 ‘‘(B) REVISION OF FREQUENCY.—

22 ‘‘(i) REVIEW.—The Secretary, in con23 sultation with the Director of the National

24 Cancer Institute, shall review periodically

25 the appropriate frequency for performing
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1 screening mammography, based on age

2 and such other factors as the Secretary be3 lieves to be pertinent.

4 ‘‘(ii) REVISION OF FREQUENCY.—The

5 Secretary, taking into consideration the re6 view made under clause (i), may revise

7 from time to time the frequency with

8 which screening mammography may be

9 paid for under this subsection.’’.

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

11 subsections (a) and (b) shall apply with respect to screen12 ing mammographies furnished on or after January 1,

13 2002.

14 (d) PAYMENT FOR NEW TECHNOLOGIES.—

15 (1) TESTS FURNISHED IN 2001.—

16 (A) SCREENING.—For a screening mam17 mography (as defined in section 1861(jj) of the

18 Social Security Act (42 U.S.C. 1395x(jj))) fur19 nished during the period beginning on April 1,

20 2001, and ending on December 31, 2001, that

21 uses a new technology, payment for such

22 screening mammography shall be made as fol23 lows:

24 (i) In the case of a technology which

25 directly takes a digital image (without in-
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1 volving film), in an amount equal to 150

2 percent of the amount of payment under

3 section 1848 of such Act (42 U.S.C.

4 1395w–4) for a bilateral diagnostic mam5 mography (under HCPCS code 76091) for

6 such year.

7 (ii) In the case of a technology which

8 allows conversion of a standard film mam9 mogram into a digital image and subse10 quently analyzes such resulting image with

11 software to identify possible problem areas,

12 in an amount equal to the limit that would

13 otherwise be applied under section

14 1834(c)(3) of such Act (42 U.S.C.

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

16 (B) BILATERAL DIAGNOSTIC MAMMOG17 RAPHY.—For a bilateral diagnostic mammog18 raphy furnished during the period beginning on

19 April 1, 2001, and ending on December 31,

20 2001, that uses a new technology described in

21 subparagraph (A), payment for such mammog22 raphy shall be the amount of payment provided

23 for under such subparagraph.

24 (C) ALLOCATION OF AMOUNTS.—The Sec25 retary shall provide for an appropriate alloca-
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1 tion of the amounts under subparagraphs (A)

2 and (B) between the professional and technical

3 components.

4 (D) IMPLEMENTATION OF PROVISION.—

5 The Secretary of Health and Human Services

6 may implement the provisions of this paragraph

7 by program memorandum or otherwise.

8 (2) CONSIDERATION OF NEW HCPCS CODE FOR

9 NEW TECHNOLOGIES AFTER 2001.—The Secretary

10 shall determine, for such mammographies performed

11 after 2001, whether the assignment of a new

12 HCPCS code is appropriate for mammography that

13 uses a new technology. If the Secretary determines

14 that a new code is appropriate for such mammog15 raphy, the Secretary shall provide for such new code

16 for such tests furnished after 2001.

17 (3) NEW TECHNOLOGY DESCRIBED.—For pur18 poses of this subsection, a new technology with re19 spect to a mammography is an advance in tech20 nology with respect to the test or equipment that re21 sults in the following:

22 (A) A significant increase or decrease in

23 the resources used in the test or in the manu24 facture of the equipment.
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1 (B) A significant improvement in the per2 formance of the test or equipment.

3 (C) A significant advance in medical tech4 nology that is expected to significantly improve

5 the treatment of medicare beneficiaries.

6 (4) HCPCS CODE DEFINED.—The term

7 ‘‘HCPCS code’’ means a code under the Health

8 Care Financing Administration Common Procedure

9 Coding System (HCPCS).

10 SEC. 105. COVERAGE OF MEDICAL NUTRITION THERAPY

11 SERVICES FOR BENEFICIARIES WITH DIABE12 TES OR A RENAL DISEASE.

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

14 1395x(s)(2)), as amended by section 102(a), is amended—

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

16 the end;

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

18 the end; and

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

21 ‘‘(V) medical nutrition therapy services (as de22 fined in subsection (vv)(1)) in the case of a bene23 ficiary with diabetes or a renal disease who—
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1 ‘‘(i) has not received diabetes outpatient

2 self-management training services within a time

3 period determined by the Secretary;

4 ‘‘(ii) is not receiving maintenance dialysis

5 for which payment is made under section 1881;

6 and

7 ‘‘(iii) 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—
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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.’’.
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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 shall apply to services furnished on or after

19 January 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).
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1 Subtitle B—Other Beneficiary

2 Improvements

3 SEC. 111. ACCELERATION OF REDUCTION OF BENEFICIARY

4 COPAYMENT FOR HOSPITAL OUTPATIENT DE5 PARTMENT SERVICES.

6 (a) REDUCING THE UPPER LIMIT ON BENEFICIARY

7 COPAYMENT.—

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

9 U.S.C. 1395l(t)(8)(C)) is amended to read as fol10 lows:

11 ‘‘(C) LIMITATION ON COPAYMENT

12 AMOUNT.—

13 ‘‘(i) TO INPATIENT HOSPITAL DE14 DUCTIBLE AMOUNT.—In no case shall the

15 copayment amount for a procedure per16 formed in a year exceed the amount of the

17 inpatient hospital deductible established

18 under section 1813(b) for that year.

19 ‘‘(ii) TO SPECIFIED PERCENTAGE.—

20 The Secretary shall reduce the national

21 unadjusted copayment amount for a cov22 ered OPD service (or group of such serv23 ices) furnished in a year in a manner so

24 that the effective copayment rate (deter25 mined on a national unadjusted basis) for
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1 that service in the year does not exceed the

2 following percentage:

3 ‘‘(I) For procedures performed in

4 2001, on or after April 1, 2001, 57

5 percent.

6 ‘‘(II) For procedures performed

7 in 2002 or 2003, 55 percent.

8 ‘‘(III) For procedures performed

9 in 2004, 50 percent.

10 ‘‘(IV) For procedures performed

11 in 2005, 45 percent.

12 ‘‘(V) For procedures performed

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

14 (2) EFFECTIVE DATE.—The amendment made

15 by paragraph (1) shall apply with respect to services

16 furnished on or after April 1, 2001.

17 (b) CONSTRUCTION REGARDING LIMITING IN18 CREASES IN COST-SHARING.—Nothing in this Act or the

19 Social Security Act shall be construed as preventing a hos20 pital from waiving the amount of any coinsurance for out21 patient hospital services under the medicare program

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

23 been increased as a result of the implementation of the

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

25 Social Security Act (42 U.S.C. 1395l(t)).
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1 (c) GAO STUDY OF REDUCTION IN MEDIGAP PRE2 MIUM LEVELS RESULTING FROM REDUCTIONS IN COIN3 SURANCE.—The Comptroller General of the United States

4 shall work, in concert with the National Association of In5 surance Commissioners, to evaluate the extent to which

6 the premium levels for medicare supplemental policies re7 flect the reductions in coinsurance resulting from the

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

9 1, 2004, the Comptroller General shall submit to Congress

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

11 reductions in beneficiary coinsurance effected by such

12 amendment have resulted in actual savings to medicare

13 beneficiaries.

14 SEC. 112. PRESERVATION OF COVERAGE OF DRUGS AND

15 BIOLOGICALS UNDER PART B OF THE MEDI16 CARE PROGRAM.

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

18 1395x(s)(2)) is amended, in each of subparagraphs (A)

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

20 which cannot, as determined in accordance with regula21 tions, be self-administered)’’ and inserting ‘‘(including

22 drugs and biologicals which are not usually self-adminis23 tered by the patient)’’.
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1 (b) EFFECTIVE DATE.—The amendment made by

2 subsection (a) shall apply to drugs and biologicals admin3 istered on or after the date of the enactment of this Act.

4 SEC. 113. ELIMINATION OF TIME LIMITATION ON MEDI5 CARE BENEFITS FOR IMMUNOSUPPRESSIVE

6 DRUGS.

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

8 1395x(s)(2)(J)) is amended by striking ‘‘, but only’’ and

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

10 (b) CONFORMING AMENDMENTS.—

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

12 U.S.C. 1395k) is amended—

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

14 (B) by redesignating subsection (c) as sub15 section (b).

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

17 BBRA is amended by striking subsection (d).

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

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

20 the date of the enactment of this Act.

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

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

23 1395u(o)) is amended by adding at the end the following

24 new paragraph:
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1 ‘‘(3)(A) Payment for a charge for any drug or biologi2 cal for which payment may be made under this part may

3 be made only on an assignment-related basis.

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

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

6 manner as they apply to services furnished by a practi7 tioner described in subsection (b)(18)(C).’’.

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

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

10 January 1, 2001.

11 SEC. 115. WAIVER OF 24-MONTH WAITING PERIOD FOR

12 MEDICARE COVERAGE OF INDIVIDUALS DIS13 ABLED WITH AMYOTROPHIC LATERAL SCLE14 ROSIS (ALS).

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

16 amended—

17 (1) by redesignating subsection (h) as sub18 section ( j) and by moving such subsection to the end

19 of the section; and

20 (2) by inserting after subsection (g) the fol21 lowing new subsection:

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

23 of an individual medically determined to have amyotrophic

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

2 were no requirement for any entitlement to benefits,

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

4 ‘‘(2) The entitlement under such subsection

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

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

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

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

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

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

14 rules apply:

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

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

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

20 enrollment period shall begin on the first day of the

21 first month of entitlement to disability insurance

22 benefits referred to in such subsection.’’.

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

24 this section shall apply to benefits for months beginning

25 July 1, 2001.
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1 Subtitle C—Demonstration

2 Projects and Studies

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

5 MEDICARE BENEFICIARIES.

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

7 Human Services shall conduct a demonstration project

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

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

10 outcomes of applying disease management to medicare

11 beneficiaries with diagnosed, advanced-stage congestive

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

13 case may the number of participants in the project exceed

14 30,000 at any time.

15 (b) VOLUNTARY PARTICIPATION.—

16 (1) ELIGIBILITY.—Medicare beneficiaries are

17 eligible to participate in the project only if—

18 (A) they meet specific medical criteria

19 demonstrating the appropriate diagnosis and

20 the advanced nature of their disease;

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

23 (C) they are not enrolled in a

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

2 in the project shall be eligible—

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

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

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

9 cost-sharing with respect to prescription drug

10 coverage.

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

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

14 Human Services shall carry out the project through

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

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

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

21 (2) CONTRACT PROVISIONS.—Under such

22 contracts—

23 (A) such an organization shall be required

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

2 fee negotiated and established by the Secretary

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

5 the medicare program under title XVIII of the

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

9 (C) such an organization shall guarantee,

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

13 (B).

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

16 the Trust Funds established under title XVIII of the

17 Social Security Act.

18 (d) APPLICATION OF MEDIGAP PROTECTIONS TO

19 DEMONSTRATION PROJECT ENROLLEES.—(1) Subject to

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

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

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

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

2 plan.

3 (2) In applying paragraph (1)—

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

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

6 a reference to the period of the demonstration

7 project; and

8 (B) the notification required under section

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

10 manner specified by the Secretary of Health and

11 Human Services.

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

13 than 3 years.

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

15 Services shall waive such provisions of title XVIII of the

16 Social Security Act as may be necessary to provide for

17 payment for services under the project in accordance with

18 subsection (c)(3).

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

20 Services shall submit to Congress an interim report on the

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

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

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

2 cost-effectiveness of extending or expanding the project.

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

6 (a) DEMONSTRATION.—

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

8 Human Services (in this section referred to as the

9 ‘‘Secretary’’) shall conduct demonstration projects

10 (in this section referred to as ‘‘demonstration

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

12 evaluating methods that—

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

15 facilitate reduced disparities in early detection

16 and treatment of cancer;

17 (B) improve clinical outcomes, satisfaction,

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

20 those target individuals with cancer;

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

23 smears and prostate cancer screenings, among

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

5 proficiency.

6 (2) TARGET INDIVIDUAL DEFINED.—In this

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

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

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

12 Security Act.

13 (b) PROGRAM DESIGN.—

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

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

17 sector, community programs, and academic research

18 of methods that reduce disparities among individuals

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

21 demonstration projects based on such evaluation.

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

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

24 Act, the Secretary shall implement at least nine

25 demonstration projects, including the following:
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1 (A) Two projects for each of the four fol2 lowing major racial and ethnic minority groups:

3 (i) American Indians, including Alas4 ka Natives, Eskimos, and Aleuts.

5 (ii) Asian Americans and Pacific Is6 landers.

7 (iii) Blacks.

8 (iv) Hispanics.

9 The two projects must target different ethnic

10 subpopulations.

11 (B) One project within the Pacific Islands.

12 (C) At least one project each in a rural

13 area and inner-city area.

14 (3) EXPANSION OF PROJECTS; IMPLEMENTA15 TION OF DEMONSTRATION PROJECT RESULTS.—If

16 the initial report under subsection (c) contains an

17 evaluation that demonstration projects—

18 (A) reduce expenditures under the medi19 care program under title XVIII of the Social

20 Security Act; or

21 (B) do not increase expenditures under the

22 medicare program and reduce racial and ethnic

23 health disparities in the quality of health care

24 services provided to target individuals and in-
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1 crease satisfaction of beneficiaries and health

2 care providers;

3 the Secretary shall continue the existing demonstra4 tion projects and may expand the number of dem5 onstration projects.

6 (c) REPORT TO CONGRESS.—

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

8 the date the Secretary implements the initial dem9 onstration projects, and biannually thereafter, the

10 Secretary shall submit to Congress a report regard11 ing the demonstration projects.

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

13 paragraph (1) shall include the following:

14 (A) A description of the demonstration

15 projects.

16 (B) An evaluation of—

17 (i) the cost-effectiveness of the dem18 onstration projects;

19 (ii) the quality of the health care serv20 ices provided to target individuals under

21 the demonstration projects; and

22 (iii) beneficiary and health care pro23 vider satisfaction under the demonstration

24 projects.
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1 (C) Any other information regarding the

2 demonstration projects that the Secretary de3 termines to be appropriate.

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

5 compliance with the requirements of title XVIII of the So6 cial Security Act to such extent and for such period as

7 the Secretary determines is necessary to conduct dem8 onstration projects.

9 (e) FUNDING.—

10 (1) DEMONSTRATION PROJECTS.—

11 (A) STATE PROJECTS.—Except as provided

12 in subparagraph (B), the Secretary shall pro13 vide for the transfer from the Federal Hospital

14 Insurance Trust Fund and the Federal Supple15 mentary Insurance Trust Fund under title

16 XVIII of the Social Security Act, in such pro17 portions as the Secretary determines to be ap18 propriate, of such funds as are necessary for

19 the costs of carrying out the demonstration

20 projects.

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

22 a demonstration project described in subsection

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

24 provided in any Federal law making appropria25 tions for the territories.
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1 (2) LIMITATION.—In conducting demonstration

2 projects, the Secretary shall ensure that the aggre3 gate payments made by the Secretary do not exceed

4 the sum of the amount which the Secretary would

5 have paid under the program for the prevention and

6 treatment of cancer if the demonstration projects

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

8 SEC. 123. STUDY ON MEDICARE COVERAGE OF ROUTINE

9 THYROID SCREENING.

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

11 Services shall request the National Academy of Sciences,

12 and as appropriate in conjunction with the United States

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

14 addition of coverage of routine thyroid screening using a

15 thyroid stimulating hormone test as a preventive benefit

16 provided to medicare beneficiaries under title XVIII of the

17 Social Security Act for some or all medicare beneficiaries.

18 In conducting the study, the Academy shall consider the

19 short-term and long-term benefits, and costs to the medi20 care program, of such addition.

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

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

23 Human Services shall submit a report on the findings of

24 the study conducted under subsection (a) to the Com25 mittee on Ways and Means and the Committee on Com-
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1 merce of the House of Representatives and the Committee

2 on Finance of the Senate.

3 SEC. 124. MEDPAC STUDY ON CONSUMER COALITIONS.

4 (a) STUDY.—The Medicare Payment Advisory Com5 mission shall conduct a study that examines the use of

6 consumer coalitions in the marketing of Medicare+Choice

7 plans under the medicare program under title XVIII of

8 the Social Security Act. The study shall examine—

9 (1) the potential for increased efficiency in the

10 medicare program through greater beneficiary

11 knowledge of their health care options, decreased

12 marketing costs of Medicare+Choice organizations,

13 and creation of a group market;

14 (2) the implications of Medicare+Choice plans

15 and medicare supplemental policies (under section

16 1882 of the Social Security Act (42 U.S.C. 1395ss))

17 offering medicare beneficiaries in the same geo18 graphic location different benefits and premiums

19 based on their affiliation with a consumer coalition;

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

21 should be accountable to the Secretary of Health

22 and Human Services, and how potential conflicts of

23 interest in the activities of consumer coalitions

24 should be avoided; and

25 (4) how such coalitions should be funded.
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1 (b) REPORT.—Not later than 1 year after the date

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

3 to Congress a report on the study conducted under sub4 section (a). The report shall include a recommendation on

5 whether and how a demonstration project might be con6 ducted for the operation of consumer coalitions under the

7 medicare program.

8 (c) CONSUMER COALITION DEFINED.—For purposes

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

10 nonprofit, community-based group of organizations that—

11 (1) provides information to medicare bene12 ficiaries about their health care options under the

13 medicare program; and

14 (2) negotiates benefits and premiums for medi15 care beneficiaries who are members or otherwise af16 filiated with the group of organizations with

17 Medicare+Choice organizations offering

18 Medicare+Choice plans, issuers of medicare supple19 mental policies, issuers of long-term care coverage,

20 and pharmacy benefit managers.
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1 SEC. 125. STUDY ON LIMITATION ON STATE PAYMENT FOR

2 MEDICARE COST-SHARING AFFECTING AC3 CESS TO SERVICES FOR QUALIFIED MEDI4 CARE BENEFICIARIES.

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

6 Human Services shall conduct a study to determine if ac7 cess to certain services (including mental health services)

8 for qualified medicare beneficiaries has been affected by

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

10 for such beneficiaries under section 1902(n) of the Social

11 Security Act (42 U.S.C. 1396a(n)). As part of such study,

12 the Secretary shall analyze the effect of such payment lim13 itation on providers who serve a disproportionate share of

14 such beneficiaries.

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

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

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

18 The report shall include recommendations regarding any

19 changes that should be made to the State payment limits

20 under section 1902(n) for qualified medicare beneficiaries

21 to ensure appropriate access to services.

22 SEC. 126. STUDIES ON PREVENTIVE INTERVENTIONS IN

23 PRIMARY CARE FOR OLDER AMERICANS.

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

25 Services, acting through the United States Preventive

26 Services Task Force, shall conduct a series of studies de-
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1 signed to identify preventive interventions that can be de2 livered in the primary care setting and that are most valu3 able to older Americans.

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

5 the United States Preventive Services Task Force is

6 amended to include the evaluation of services that are of

7 particular relevance to older Americans.

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

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

10 Secretary of Health and Human Services shall submit to

11 Congress a report on the conclusions of the studies con12 ducted under subsection (a), together with recommenda13 tions for such legislation and administrative actions as the

14 Secretary considers appropriate.

15 SEC. 127. MEDPAC STUDY AND REPORT ON MEDICARE COV16 ERAGE OF CARDIAC AND PULMONARY REHA17 BILITATION THERAPY SERVICES.

18 (a) STUDY.—

19 (1) IN GENERAL.—The Medicare Payment Ad20 visory Commission shall conduct a study on coverage

21 of cardiac and pulmonary rehabilitation therapy

22 services under the medicare program under title

23 XVIII of the Social Security Act.
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1 (2) FOCUS.—In conducting the study under

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

3 appropriate—

4 (A) qualifying diagnoses required for cov5 erage of cardiac and pulmonary rehabilitation

6 therapy services;

7 (B) level of physician direct involvement

8 and supervision in furnishing such services; and

9 (C) level of reimbursement for such serv10 ices.

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

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

13 submit to Congress a report on the study conducted under

14 subsection (a) together with such recommendations for

15 legislation and administrative action as the Commission

16 determines appropriate.

17 SEC. 128. LIFESTYLE MODIFICATION PROGRAM DEM18 ONSTRATION.

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

20 Human Services shall carry out the demonstration project

21 known as the Lifestyle Modification Program Demonstra22 tion, as described in the Health Care Financing Adminis23 tration Memorandum of Understanding entered into on

24 November 13, 2000, and as subsequently modified, (in
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1 this section referred to as the ‘‘project’’) in accordance

2 with the following requirements:

3 (1) The project shall include no fewer than

4 1,800 medicare beneficiaries who complete under the

5 project the entire course of treatment under the

6 Lifestyle Modification Program.

7 (2) The project shall be conducted over a course

8 of 4 years.

9 (b) STUDY ON COST-EFFECTIVENESS.—

10 (1) STUDY.—The Secretary shall conduct a

11 study on the cost-effectiveness of the Lifestyle Modi12 fication Program as conducted under the project. In

13 determining whether such Program is cost-effective,

14 the Secretary shall determine (using a control group

15 under a matched paired experimental design) wheth16 er expenditures incurred for medicare beneficiaries

17 enrolled under the project exceed expenditures for

18 the control group of medicare beneficiaries with

19 similar health conditions who are not enrolled under

20 the project.

21 (2) REPORTS.—

22 (A) INITIAL REPORT.—Not later that 1

23 year after the date on which 900 medicare

24 beneficiaries have completed the entire course

25 of treatment under the Lifestyle Modification
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1 Program under the project, the Secretary shall

2 submit to Congress an initial report on the

3 study conducted under paragraph (1).

4 (B) FINAL REPORT.—Not later that 1 year

5 after the date on which 1,800 medicare bene6 ficiaries have completed the entire course of

7 treatment under such Program under the

8 project, the Secretary shall submit to Congress

9 a final report on the study conducted under

10 paragraph (1).

11 TITLE II—RURAL HEALTH CARE

12 IMPROVEMENTS

13 Subtitle A—Critical Access

14 Hospital Provisions

15 SEC. 201. CLARIFICATION OF NO BENEFICIARY COST-SHAR16 ING FOR CLINICAL DIAGNOSTIC LABORA17 TORY TESTS FURNISHED BY CRITICAL AC18 CESS HOSPITALS.

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

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

21 following new paragraph:

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

23 CLINICAL DIAGNOSTIC LABORATORY SERVICES.—No

24 coinsurance, deductible, copayment, or other cost25 sharing otherwise applicable under this part shall
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1 apply with respect to clinical diagnostic laboratory

2 services furnished as an outpatient critical access

3 hospital service. Nothing in this title shall be con4 strued as providing for payment for clinical diag5 nostic laboratory services furnished as part of out6 patient critical access hospital services, other than

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

8 (b) TECHNICAL AND CONFORMING AMENDMENTS.—

9 (1) Paragraphs (1)(D)(i) and (2)(D)(i) of sec10 tion 1833(a) (42 U.S.C. 1395l(a)) are each amended

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

12 basis by a critical access hospital’’.

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

14 1501A–371) is amended by striking ‘‘The amend15 ment made by subsection (a) shall apply’’ and in16 serting ‘‘Paragraphs (1) through (3) of section

17 1834(g) of the Social Security Act (as amended by

18 paragraph (1)) apply’’.

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

20 (1) by subsection (a) shall apply to services fur21 nished on or after the date of the enactment of

22 BBRA;

23 (2) by subsection (b)(1) shall apply as if in24 cluded in the enactment of section 403(e)(1) of

25 BBRA (113 Stat. 1501A–371); and
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1 (3) by subsection (b)(2) shall apply as if in2 cluded in the enactment of section 403(d)(2) of

3 BBRA (113 Stat. 1501A–371).

4 SEC. 202. ASSISTANCE WITH FEE SCHEDULE PAYMENT FOR

5 PROFESSIONAL SERVICES UNDER ALL-INCLU6 SIVE RATE.

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

8 1395m(g)(2)(B)) is amended by inserting ‘‘115 percent

9 of’’ before ‘‘such amounts’’.

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

11 subsection (a) shall apply with respect to items and serv12 ices furnished on or after July 1, 2001.

13 SEC. 203. EXEMPTION OF CRITICAL ACCESS HOSPITAL

14 SWING BEDS FROM SNF PPS.

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

16 1395yy(e)(7)) is amended—

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

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

19 (2) in subparagraph (A), by striking ‘‘IN GEN20 ERAL.—The’’ and inserting ‘‘TRANSITION.—Subject

21 to subparagraph (C), the’’;

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

23 than critical access hospitals)’’ after ‘‘facilities de24 scribed in subparagraph (B)’’;
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1 (4) in subparagraph (B), by striking ‘‘, for

2 which payment’’ and all that follows before the pe3 riod; and

4 (5) by adding at the end the following new sub5 paragraph:

6 ‘‘(C) EXEMPTION FROM PPS OF SWING7 BED SERVICES FURNISHED IN CRITICAL ACCESS

8 HOSPITALS.—The prospective payment system

9 established under this subsection shall not

10 apply to services furnished by a critical access

11 hospital pursuant to an agreement under sec12 tion 1883.’’.

13 (b) PAYMENT ON A REASONABLE COST BASIS FOR

14 SWING BED SERVICES FURNISHED BY CRITICAL ACCESS

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

16 amended—

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

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

19 and

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

21 paragraph:

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

23 a critical access hospital shall be paid for covered skilled

24 nursing facility services furnished under an agreement en25 tered into under this section on the basis of the reasonable
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1 costs of such services (as determined under section

2 1861(v)).’’.

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

4 this section shall apply to cost reporting periods beginning

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

6 SEC. 204. PAYMENT IN CRITICAL ACCESS HOSPITALS FOR

7 EMERGENCY ROOM ON-CALL PHYSICIANS.

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

9 1395m(g)), as amended by section 201(a), is further

10 amended by adding at the end the following new para11 graph:

12 ‘‘(5) COVERAGE OF COSTS FOR EMERGENCY

13 ROOM ON-CALL PHYSICIANS.—In determining the

14 reasonable costs of outpatient critical access hospital

15 services under paragraphs (1) and (2)(A), the Sec16 retary shall recognize as allowable costs, amounts

17 (as defined by the Secretary) for reasonable com18 pensation and related costs for emergency room phy19 sicians who are on-call (as defined by the Secretary)

20 but who are not present on the premises of the crit21 ical access hospital involved, and are not otherwise

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

23 any other provider or facility.’’.
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1 (b) EFFECTIVE DATE.—The amendment made by

2 subsection (a) shall apply to cost reporting periods begin3 ning on or after October 1, 2001.

4 SEC. 205. TREATMENT OF AMBULANCE SERVICES FUR5 NISHED BY CERTAIN CRITICAL ACCESS HOS6 PITALS.

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

8 1395m(l)) is amended by adding at the end the following

9 new paragraph:

10 ‘‘(8) SERVICES FURNISHED BY CRITICAL AC11 CESS HOSPITALS.—Notwithstanding any other provi12 sion of this subsection, the Secretary shall pay the

13 reasonable costs incurred in furnishing ambulance

14 services if such services are furnished—

15 ‘‘(A) by a critical access hospital (as de16 fined in section 1861(mm)(1)), or

17 ‘‘(B) by an entity that is owned and oper18 ated by a critical access hospital,

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

20 only provider or supplier of ambulance services that

21 is located within a 35-mile drive of such critical ac22 cess hospital.’’.

23 (b) CONFORMING AMENDMENT.—Section

24 1833(a)(1)(R) (42 U.S.C. 1395l(a)(1)(R)) is amended—
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1 (1) by striking ‘‘ambulance service,’’ and insert2 ing ‘‘ambulance services, (i)’’; and

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

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

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

6 paid shall be the amounts determined under section

7 1834(g) for outpatient critical access hospital serv8 ices’’.

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

10 this section shall apply to services furnished on or after

11 the date of the enactment of this Act.

12 SEC. 206. GAO STUDY ON CERTAIN ELIGIBILITY REQUIRE13 MENTS FOR CRITICAL ACCESS HOSPITALS.

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

15 States shall conduct a study on the eligibility requirements

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

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

18 to limitations on average length of stay and number of

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

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

21 as part of a critical access hospital for purposes of

22 the medicare program under title XVIII of such Act;

23 and

24 (2) the effect of seasonal variations in patient

25 admissions on critical access hospital eligibility re-
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1 quirements with respect to limitations on average

2 annual length of stay and number of beds.

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

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

5 submit to Congress a report on the study conducted under

6 subsection (a) together with recommendations

7 regarding—

8 (1) whether distinct part units should be per9 mitted as part of a critical access hospital under the

10 medicare program;

11 (2) if so permitted, the payment methodologies

12 that should apply with respect to services provided

13 by such units;

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

15 should be included in or excluded from the bed limits

16 applicable to critical access hospitals under the

17 medicare program; and

18 (4) any adjustments to such eligibility require19 ments to account for seasonal variations in patient

20 admissions.
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1 Subtitle B—Other Rural Hospitals

2 Provisions

3 SEC. 211. TREATMENT OF RURAL DISPROPORTIONATE

4 SHARE HOSPITALS.

5 (a) APPLICATION OF UNIFORM THRESHOLD.—Sec6 tion 1886(d)(5)(F)(v) (42 U.S.C. 1395ww(d)(5)(F)(v)) is

7 amended—

8 (1) in subclause (II), by inserting ‘‘(or 15 per9 cent, for discharges occurring on or after April 1,

10 2001)’’ after ‘‘30 percent’’;

11 (2) in subclause (III), by inserting ‘‘(or 15 per12 cent, for discharges occurring on or after April 1,

13 2001)’’ after ‘‘40 percent’’; and

14 (3) in subclause (IV), by inserting ‘‘(or 15 per15 cent, for discharges occurring on or after April 1,

16 2001)’’ after ‘‘45 percent’’.

17 (b) ADJUSTMENT OF PAYMENT FORMULAS.—

18 (1) SOLE COMMUNITY HOSPITALS.—Section

19 1886(d)(5)(F) (42 U.S.C. 1395ww(d)(5)(F)) is

20 amended—

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

22 ‘‘10 percent’’ the following: ‘‘or, for discharges

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

24 the percent determined in accordance with

25 clause (x)’’; and
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1 (B) by adding at the end the following new

2 clause:

3 ‘‘(x) For purposes of clause (iv)(VI) (relating to sole

4 community hospitals), in the case of a hospital for a cost

5 reporting period with a disproportionate patient percent6 age (as defined in clause (vi)) that—

7 ‘‘(I) is less than 19.3, the disproportionate

8 share adjustment percentage is determined in ac9 cordance with the following formula: (P–15)(.65) +

10 2.5;

11 ‘‘(II) is equal to or exceeds 19.3, but is less

12 than 30.0, such adjustment percentage is equal to

13 5.25 percent; or

14 ‘‘(III) is equal to or exceeds 30, such adjust15 ment percentage is equal to 10 percent,

16 where ‘P’ is the hospital’s disproportionate patient per17 centage (as defined in clause (vi)).’’.

18 (2) RURAL REFERRAL CENTERS.—Such section

19 is further amended—

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

21 ‘‘clause (viii)’’ the following: ‘‘or, for discharges

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

23 the percent determined in accordance with

24 clause (xi)’’; and
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1 (B) by adding at the end the following new

2 clause:

3 ‘‘(xi) For purposes of clause (iv)(V) (relating to rural

4 referral centers), in the case of a hospital for a cost report5 ing period with a disproportionate patient percentage (as

6 defined in clause (vi)) that—

7 ‘‘(I) is less than 19.3, the disproportionate

8 share adjustment percentage is determined in ac9 cordance with the following formula: (P–15)(.65) +

10 2.5;

11 ‘‘(II) is equal to or exceeds 19.3, but is less

12 than 30.0, such adjustment percentage is equal to

13 5.25 percent; or

14 ‘‘(III) is equal to or exceeds 30, such adjust15 ment percentage is determined in accordance with

16 the following formula: (P–30)(.6) + 5.25,

17 where ‘P’ is the hospital’s disproportionate patient per18 centage (as defined in clause (vi)).’’.

19 (3) SMALL RURAL HOSPITALS GENERALLY.—

20 Such section is further amended—

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

22 ‘‘4 percent’’ the following: ‘‘or, for discharges

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

24 the percent determined in accordance with

25 clause (xii)’’; and
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1 (B) by adding at the end the following new

2 clause:

3 ‘‘(xii) For purposes of clause (iv)(III) (relating to

4 small rural hospitals generally), in the case of a hospital

5 for a cost reporting period with a disproportionate patient

6 percentage (as defined in clause (vi)) that—

7 ‘‘(I) is less than 19.3, the disproportionate

8 share adjustment percentage is determined in ac9 cordance with the following formula: (P–15)(.65) +

10 2.5; or

11 ‘‘(II) is equal to or exceeds 19.3, such adjust12 ment percentage is equal to 5.25 percent,

13 where ‘P’ is the hospital’s disproportionate patient per14 centage (as defined in clause (vi)).’’.

15 (4) HOSPITALS THAT ARE BOTH SOLE COMMU16 NITY HOSPITALS AND RURAL REFERRAL CENTERS.—

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

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

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

20 the greater of the percentages determined under

21 clause (x) or (xi)’’.

22 (5) URBAN HOSPITALS WITH LESS THAN 100

23 BEDS.—Such section is further amended—

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

25 percent’’ the following: ‘‘or, for discharges oc-
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1 curring on or after April 1, 2001, is equal to

2 the percent determined in accordance with

3 clause (xiii)’’; and

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

5 clause:

6 ‘‘(xiii) For purposes of clause (iv)(II) (relating to

7 urban hospitals with less than 100 beds), in the case of

8 a hospital for a cost reporting period with a dispropor9 tionate patient percentage (as defined in clause (vi))

10 that—

11 ‘‘(I) is less than 19.3, the disproportionate

12 share adjustment percentage is determined in ac13 cordance with the following formula: (P–15)(.65) +

14 2.5; or

15 ‘‘(II) is equal to or exceeds 19.3, such adjust16 ment percentage is equal to 5.25 percent,

17 where ‘P’ is the hospital’s disproportionate patient per18 centage (as defined in clause (vi)).’’.

19 SEC. 212. OPTION TO BASE ELIGIBILITY FOR MEDICARE DE20 PENDENT, SMALL RURAL HOSPITAL PRO21 GRAM ON DISCHARGES DURING TWO OF THE

22 THREE MOST RECENTLY AUDITED COST RE23 PORTING PERIODS.

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

25 (42 U.S.C. 1395ww(d)(5)(G)(iv)(IV)) is amended by in-
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1 serting ‘‘, or two of the three most recently audited cost

2 reporting periods for which the Secretary has a settled

3 cost report,’’ after ‘‘1987’’.

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

5 this section shall apply with respect to cost reporting peri6 ods beginning on or after April 1, 2001.

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

8 AMOUNTS TO ALL SOLE COMMUNITY HOS9 PITALS.

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

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

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

13 striking ‘‘that for its cost reporting period beginning

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

15 target amount’’ and inserting ‘‘there shall be sub16 stituted for the amount otherwise determined under

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

18 in a greater amount of payment under this section

19 for the hospital’’;

20 (2) in subclause (I), by striking ‘‘target amount

21 otherwise applicable’’ and all that follows through

22 ‘‘target amount’)’’ and inserting ‘‘the amount other23 wise applicable to the hospital under subsection

24 (d)(5)(D)(i) (referred to in this clause as the ‘sub25 section (d)(5)(D)(i) amount’)’’; and
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1 (3) in each of subclauses (II) and (III), by

2 striking ‘‘subparagraph (C) target amount’’ and in3 serting ‘‘subsection (d)(5)(D)(i) amount’’.

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

5 this section shall take effect as if included in the enact6 ment of section 405 of BBRA (113 Stat. 1501A–372).

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

8 PER UNIT COST OF RURAL HOSPITALS WITH

9 PSYCHIATRIC UNITS.

10 The Medicare Payment Advisory Commission, in its

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

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

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

14 volume on the per unit cost of rural hospitals with

15 psychiatric units; and

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

17 section a recommendation on whether special treat18 ment for such hospitals may be warranted.

19 Subtitle C—Other Rural Provisions

20 SEC. 221. ASSISTANCE FOR PROVIDERS OF AMBULANCE

21 SERVICES IN RURAL AREAS.

22 (a) TRANSITIONAL ASSISTANCE IN CERTAIN MILE23 AGE RATES.—Section 1834(l) (42 U.S.C. 1395m(l)) is

24 amended by adding at the end the following new para25 graph:
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1 ‘‘(8) TRANSITIONAL ASSISTANCE FOR RURAL

2 PROVIDERS.—In the case of ground ambulance serv3 ices furnished on or after July 1, 2001, and before

4 January 1, 2004, for which the transportation origi5 nates in a rural area (as defined in section

6 1886(d)(2)(D)) or in a rural census tract of a met7 ropolitan statistical area (as determined under the

8 most recent modification of the Goldsmith Modifica9 tion, originally published in the Federal Register on

10 February 27, 1992 (57 Fed. Reg. 6725)), the fee

11 schedule established under this subsection shall pro12 vide that, with respect to the payment rate for mile13 age for a trip above 17 miles, and up to 50 miles,

14 the rate otherwise established shall be increased by

not less than 1 15 ⁄2 of the additional payment per mile

16 established for the first 17 miles of such a trip origi17 nating in a rural area.’’.

18 (b) GAO STUDIES ON THE COSTS OF AMBULANCE

19 SERVICES FURNISHED IN RURAL AREAS.—

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

21 United States shall conduct a study on each of the

22 matters described in paragraph (2).

23 (2) MATTERS DESCRIBED.—The matters re24 ferred to in paragraph (1) are the following:
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1 (A) The cost of efficiently providing ambu2 lance services for trips originating in rural

3 areas, with special emphasis on collection of

4 cost data from rural providers.

5 (B) The means by which rural areas with

6 low population densities can be identified for

7 the purpose of designating areas in which the

8 cost of providing ambulance services would be

9 expected to be higher than similar services pro10 vided in more heavily populated areas because

11 of low usage. Such study shall also include an

12 analysis of the additional costs of providing am13 bulance services in areas designated under the

14 previous sentence.

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

16 the Comptroller General shall submit to Congress a

17 report on the results of the studies conducted under

18 paragraph (1) and shall include recommendations on

19 steps that should be taken to assure access to ambu20 lance services in rural areas.

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

22 for adjustments under subparagraph (D) of section

23 1834(l)(2) of the Social Security Act (42 U.S.C.

24 1395m(l)(2)) for years beginning with 2004, the Secretary

25 of Health and Human Services shall take into consider-
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1 ation the recommendations contained in the report under

2 subsection (b)(2) and shall adjust the fee schedule pay3 ment rates under such section for ambulance services pro4 vided in low density rural areas based on the increased

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

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

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

8 July 1, 2001. In applying such amendment to services fur9 nished on or after such date and before January 1, 2002,

10 the amount of the rate increase provided under such

11 amendment shall be equal to $1.25 per mile.

12 SEC. 222. PAYMENT FOR CERTAIN PHYSICIAN ASSISTANT

13 SERVICES.

14 (a) PAYMENT FOR CERTAIN PHYSICIAN ASSISTANT

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

16 1395u(b)(6)(C)) is amended—

17 (1) by striking ‘‘for such services provided be18 fore January 1, 2003,’’; and

19 (2) by striking the semicolon at the end and in20 serting a comma.

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

22 subsection (a) shall take effect on the date of the enact23 ment of this Act.
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1 SEC. 223. REVISION OF MEDICARE REIMBURSEMENT FOR

2 TELEHEALTH SERVICES.

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

4 4206(a) of BBA (42 U.S.C. 1395l note) is amended by

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

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

7 before October 1, 2001’’.

8 (b) EXPANSION OF MEDICARE PAYMENT FOR TELE9 HEALTH SERVICES.—Section 1834 (42 U.S.C. 1395m) is

10 amended by adding at the end the following new sub11 section:

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

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

14 telehealth services that are furnished via a tele15 communications system by a physician (as defined in

16 section 1861(r)) or a practitioner (described in sec17 tion 1842(b)(18)(C)) to an eligible telehealth indi18 vidual enrolled under this part notwithstanding that

19 the individual physician or practitioner providing the

20 telehealth service is not at the same location as the

21 beneficiary. For purposes of the preceding sentence,

22 in the case of any Federal telemedicine demonstra23 tion program conducted in Alaska or Hawaii, the

24 term ‘telecommunications system’ includes store25 and-forward technologies that provide for the asyn-
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1 chronous transmission of health care information in

2 single or multimedia formats.

3 ‘‘(2) PAYMENT AMOUNT.—

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

5 pay to a physician or practitioner located at a

6 distant site that furnishes a telehealth service

7 to an eligible telehealth individual an amount

8 equal to the amount that such physician or

9 practitioner would have been paid under this

10 title had such service been furnished without

11 the use of a telecommunications system.

12 ‘‘(B) FACILITY FEE FOR ORIGINATING

13 SITE.—With respect to a telehealth service, sub14 ject to section 1833(a)(1)(U), there shall be

15 paid to the originating site a facility fee equal

16 to—

17 ‘‘(i) for the period beginning on Octo18 ber 1, 2001, and ending on December 31,

19 2001, and for 2002, $20; and

20 ‘‘(ii) for a subsequent year, the facil21 ity fee specified in clause (i) or this clause

22 for the preceding year increased by the

23 percentage increase in the MEI (as defined

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

25 year.
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1 ‘‘(C) TELEPRESENTER NOT REQUIRED.—

2 Nothing in this subsection shall be construed as

3 requiring an eligible telehealth individual to be

4 presented by a physician or practitioner at the

5 originating site for the furnishing of a service

6 via a telecommunications system, unless it is

7 medically necessary (as determined by the phy8 sician or practitioner at the distant site).

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

10 ‘‘(A) PHYSICIAN AND PRACTITIONER.—

11 The provisions of section 1848(g) and subpara12 graphs (A) and (B) of section 1842(b)(18) shall

13 apply to a physician or practitioner receiving

14 payment under this subsection in the same

15 manner as they apply to physicians or practi16 tioners under such sections.

17 ‘‘(B) ORIGINATING SITE.—The provisions

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

19 sites receiving a facility fee in the same manner

20 as they apply to practitioners under such sec21 tion.

22 ‘‘(4) DEFINITIONS.—For purposes of this sub23 section:

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

25 site’ means the site at which the physician or
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1 practitioner is located at the time the service is

2 provided via a telecommunications system.

3 ‘‘(B) ELIGIBLE TELEHEALTH INDI4 VIDUAL.—The term ‘eligible telehealth indi5 vidual’ means an individual enrolled under this

6 part who receives a telehealth service furnished

7 at an originating site.

8 ‘‘(C) ORIGINATING SITE.—

9 ‘‘(i) IN GENERAL.—The term ‘origi10 nating site’ means only those sites de11 scribed in clause (ii) at which the eligible

12 telehealth individual is located at the time

13 the service is furnished via a telecommuni14 cations system and only if such site is

15 located—

16 ‘‘(I) in an area that is designated

17 as a rural health professional shortage

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

19 the Public Health Service Act (42

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

21 ‘‘(II) in a county that is not in22 cluded in a Metropolitan Statistical

23 Area; or

24 ‘‘(III) from an entity that partici25 pates in a Federal telemedicine dem-
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1 onstration project that has been ap2 proved by (or receives funding from)

3 the Secretary of Health and Human

4 Services as of December 31, 2000.

5 ‘‘(ii) SITES DESCRIBED.—The sites

6 referred to in clause (i) are the following

7 sites:

8 ‘‘(I) The office of a physician or

9 practitioner.

10 ‘‘(II) A critical access hospital

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

12 ‘‘(III) A rural health clinic (as

13 defined in section 1861(aa)(s)).

14 ‘‘(IV) A Federally qualified

15 health center (as defined in section

16 1861(aa)(4)).

17 ‘‘(V) A hospital (as defined in

18 section 1861(e)).

19 ‘‘(D) PHYSICIAN.—The term ‘physician’

20 has the meaning given that term in section

21 1861(r).

22 ‘‘(E) PRACTITIONER.—The term ‘practi23 tioner’ has the meaning given that term in sec24 tion 1842(b)(18)(C).

25 ‘‘(F) TELEHEALTH SERVICE.—
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1 ‘‘(i) IN GENERAL.—The term ‘tele2 health service’ means professional con3 sultations, office visits, and office psychi4 atry services (identified as of July 1, 2000,

5 by HCPCS codes 99241–99275, 99201–

6 99215, 90804–90809, and 90862 (and as

7 subsequently modified by the Secretary)),

8 and any additional service specified by the

9 Secretary.

10 ‘‘(ii) YEARLY UPDATE.—The Sec11 retary shall establish a process that pro12 vides, on an annual basis, for the addition

13 or deletion of services (and HCPCS codes),

14 as appropriate, to those specified in clause

15 (i) for authorized payment under para16 graph (1).’’.

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

18 (42 U.S.C. 1395l(1)), as amended by section 105(c), is

19 further amended—

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

21 and

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

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

24 described in section 1834(m)(2)(B), the amounts
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1 paid shall be 80 percent of the lesser of the actual

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

3 (d) STUDY AND REPORT ON ADDITIONAL COV4 ERAGE.—

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

6 Human Services shall conduct a study to identify—

7 (A) settings and sites for the provision of

8 telehealth services that are in addition to those

9 permitted under section 1834(m) of the Social

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

11 (B) practitioners that may be reimbursed

12 under such section for furnishing telehealth

13 services that are in addition to the practitioners

14 that may be reimbursed for such services under

15 such section; and

16 (C) geographic areas in which telehealth

17 services may be reimbursed that are in addition

18 to the geographic areas where such services

19 may be reimbursed under such section.

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

21 date of the enactment of this Act, the Secretary

22 shall submit to Congress a report on the study con23 ducted under paragraph (1) together with such rec24 ommendations for legislation that the Secretary de25 termines are appropriate.
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1 (e) EFFECTIVE DATE.—The amendments made by

2 subsections (b) and (c) shall be effective for services fur3 nished on or after October 1, 2001.

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

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

6 (42 U.S.C. 1395l(f )) preceding paragraph (1) is amended

7 by striking ‘‘rural hospitals’’ and inserting ‘‘hospitals’’.

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

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

10 July 1, 2001.

11 SEC. 225. MEDPAC STUDY ON LOW-VOLUME, ISOLATED

12 RURAL HEALTH CARE PROVIDERS.

13 (a) STUDY.—The Medicare Payment Advisory Com14 mission shall conduct a study on the effect of low patient

15 and procedure volume on the financial status of low-vol16 ume, isolated rural health care providers participating in

17 the medicare program under title XVIII of the Social Se18 curity Act.

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

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

21 submit to Congress a report on the study conducted under

22 subsection (a) indicating—

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

24 care providers are having, or may have, significantly

25 decreased medicare margins or other financial dif-
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1 ficulties resulting from any of the payment meth2 odologies described in subsection (c);

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

4 rural health care provider should be designated

5 under the medicare program and any criteria that

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

7 (3) any changes in the payment methodologies

8 described in subsection (c) that are necessary to pro9 vide appropriate reimbursement under the medicare

10 program to low-volume, isolated rural health care

11 providers (as designated pursuant to paragraph (2)).

12 (c) PAYMENT METHODOLOGIES DESCRIBED.—The

13 payment methodologies described in this subsection are

14 the following:

15 (1) The prospective payment system for hos16 pital outpatient department services under section

17 1833(t) of the Social Security Act (42 U.S.C.

18 1395l(t)).

19 (2) The fee schedule for ambulance services

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

21 1395m(l)).

22 (3) The prospective payment system for inpa23 tient hospital services under section 1886 of such

24 Act (42 U.S.C. 1395ww).
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1 (4) The prospective payment system for routine

2 service costs of skilled nursing facilities under sec3 tion 1888(e) of such Act (42 U.S.C. 1395yy(e)).

4 (5) The prospective payment system for home

5 health services under section 1895 of such Act (42

6 U.S.C. 1395fff ).

7 TITLE III—PROVISIONS

8 RELATING TO PART A

9 Subtitle A—Inpatient Hospital

10 Services

11 SEC. 301. REVISION OF ACUTE CARE HOSPITAL PAYMENT

12 UPDATE FOR 2001.

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

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

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

16 percentage points for hospitals (other than sole com17 munity hospitals) in all areas, and the market bas18 ket percentage increase for sole community hos19 pitals,’’ and inserting ‘‘for hospitals in all areas,’’;

20 (2) in subclause (XVII)—

21 (A) by striking ‘‘minus 1.1 percentage

22 points’’ and inserting ‘‘minus 0.55 percentage

23 points; and

24 (B) by striking ‘‘and’’ at the end;
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1 (3) by redesignating subclause (XVIII) as sub2 clause (XIX);

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

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

5 2004’’; and

6 (5) by inserting after subclause (XVII) the fol7 lowing new subclause:

8 ‘‘(XVIII) for fiscal year 2003, the market bas9 ket percentage increase minus 0.55 percentage

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

11 (b) SPECIAL RULE FOR PAYMENT FOR FISCAL YEAR

12 2001.—Notwithstanding the amendment made by sub13 section (a), for purposes of making payments for fiscal

14 year 2001 for inpatient hospital services furnished by sub15 section (d) hospitals (as defined in section 1886(d)(1)(B)

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

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

18 1886(b)(3)(B)(i) of such Act (42 U.S.C.

19 1395ww(b)(3)(B)(i))—

20 (1) for discharges occurring on or after October

21 1, 2000, and before April 1, 2001, shall be deter22 mined in accordance with subclause (XVI) of such

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

24 enactment of this Act; and
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1 (2) for discharges occurring on or after April 1,

2 2001, and before October 1, 2001, shall be equal

3 to—

4 (A) the market basket percentage increase

5 plus 1.1 percentage points for hospitals (other

6 than sole community hospitals) in all areas; and

7 (B) the market basket percentage increase

8 for sole community hospitals.

9 (c) CONSIDERATION OF PRICE OF BLOOD AND

10 BLOOD PRODUCTS IN MARKET BASKET INDEX.—The

11 Secretary of Health and Human Services shall, when next

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

13 revising the hospital market basket index (as defined in

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

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

16 blood and blood products purchased by hospitals and de17 termine whether those prices are adequately reflected in

18 such index.

19 (d) MEDPAC STUDY AND REPORT REGARDING CER20 TAIN HOSPITAL COSTS.—

21 (1) STUDY.—The Medicare Payment Advisory

22 Commission shall conduct a study on—

23 (A) any increased costs incurred by sub24 section (d) hospitals (as defined in paragraph

25 (1)(B) of section 1886(d) of the Social Security
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1 Act (42 U.S.C. 1395ww(d))) in providing inpa2 tient hospital services to medicare beneficiaries

3 under title XVIII of such Act during the period

4 beginning on October 1, 1983, and ending on

5 September 30, 1999, that were attributable

6 to—

7 (i) complying with new blood safety

8 measure requirements; and

9 (ii) providing such services using new

10 technologies;

11 (B) the extent to which the prospective

12 payment system for such services under such

13 section provides adequate and timely recogni14 tion of such increased costs;

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

16 practicable, the magnitude of ) cost increases

17 that hospitals will incur in providing such serv18 ices that are attributable to complying with new

19 blood safety measure requirements and pro20 viding such services using new technologies dur21 ing the 10 years after the date of the enact22 ment of this Act; and

23 (D) the feasibility and advisability of es24 tablishing mechanisms under such payment sys-
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1 tem to provide for more timely and accurate

2 recognition of such cost increases in the future.

3 (2) CONSULTATION.—In conducting the study

4 under this subsection, the Commission shall consult

5 with representatives of the blood community,

6 including—

7 (A) hospitals;

8 (B) organizations involved in the collection,

9 processing, and delivery of blood; and

10 (C) organizations involved in the develop11 ment of new blood safety technologies.

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

13 date of the enactment of this Act, the Commission

14 shall submit to Congress a report on the study con15 ducted under paragraph (1) together with such rec16 ommendations for legislation and administrative ac17 tion as the Commission determines appropriate.

18 (e) ADJUSTMENT FOR INPATIENT CASE MIX

19 CHANGES.—

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

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

22 the end the following new clause:

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

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

25 previous fiscal year (or estimates that such adjust-
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1 ments for a future fiscal year) did (or are likely to)

2 result in a change in aggregate payments under this

3 subsection during the fiscal year that are a result of

4 changes in the coding or classification of discharges

5 that do not reflect real changes in case mix, the Sec6 retary may adjust the average standardized amounts

7 computed under this paragraph for subsequent fiscal

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

9 classification changes.’’.

10 (2) EFFECTIVE DATE.—The amendment made

11 by paragraph (1) shall apply to discharges occurring

12 on or after October 1, 2001.

13 SEC. 302. ADDITIONAL MODIFICATION IN TRANSITION FOR

14 INDIRECT MEDICAL EDUCATION (IME) PER15 CENTAGE ADJUSTMENT.

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

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

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

19 end;

20 (2) by redesignating subclause (VI) as sub21 clause (VII);

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

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

24 (4) by inserting after subclause (V) the fol25 lowing new subclause:
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1 ‘‘(VI) during fiscal year 2002, ‘c’ is equal

2 to 1.6; and’’.

3 (b) SPECIAL RULE FOR PAYMENT FOR FISCAL YEAR

4 2001.—Notwithstanding paragraph (5)(B)(ii)(V) of sec5 tion 1886(d) of the Social Security Act (42 U.S.C.

6 1395ww(d)(5)(B)(ii)(V)), for purposes of making pay7 ments for subsection (d) hospitals (as defined in para8 graph (1)(B) of such section) with indirect costs of med9 ical education, the indirect teaching adjustment factor re10 ferred to in paragraph (5)(B)(ii) of such section shall be

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

12 2001, and before October 1, 2001, as if ‘‘c’’ in paragraph

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

14 1.54.

15 (c) CONFORMING AMENDMENT RELATING TO DE16 TERMINATION OF STANDARDIZED AMOUNT.—Section

17 1886(d)(2)(C)(i) (42 U.S.C. 1395ww(d)(2)(C)(i)) is

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

19 Medicaid, and SCHIP Benefits Improvement and Protec20 tion Act of 2000’’ after ‘‘Balanced Budget Refinement Act

21 of 1999’’.

22 (d) CLERICAL AMENDMENTS.—Section

23 1886(d)(5)(B) (42 U.S.C. 1395ww(d)(5)(B)), as amended

24 by subsection (a), is further amended by moving the in25 dentation of each of the following 2 ems to the left:
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1 (1) Clauses (ii), (v), and (vi).

2 (2) Subclauses (I) (II), (III), (IV), (V), and

3 (VII) of clause (ii).

4 (3) Subclauses (I) and (II) of clause (vi) and

5 the flush sentence at the end of such clause.

6 SEC. 303. DECREASE IN REDUCTIONS FOR DISPROPOR7 TIONATE SHARE HOSPITAL (DSH) PAYMENTS.

8 (a) IN GENERAL.—Section 1886(d)(5)(F)(ix) (42

9 U.S.C. 1395ww(d)(5)(F)(ix)) is amended—

10 (1) in subclause (III), by striking ‘‘each of’’ and

11 by inserting ‘‘and 2 percent, respectively’’ after ‘‘3

12 percent’’; and

13 (2) in subclause (IV), by striking ‘‘4 percent’’

14 and inserting ‘‘3 percent’’.

15 (b) SPECIAL RULE FOR PAYMENT FOR FISCAL YEAR

16 2001.—Notwithstanding the amendment made by sub17 section (a)(1), for purposes of making disproportionate

18 share payments for subsection (d) hospitals (as defined

19 in section 1886(d)(1)(B) of the Social Security Act (42

20 U.S.C. 1395ww(d)(1)(B)) for fiscal year 2001, the addi21 tional payment amount otherwise determined under clause

22 (ii) of section 1886(d)(5)(F) of the Social Security Act

23 (42 U.S.C. 1395ww(d)(5)(F))—

24 (1) for discharges occurring on or after October

25 1, 2000, and before April 1, 2001, shall be adjusted
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1 as provided by clause (ix)(III) of such section as in

2 effect on the day before the date of the enactment

3 of this Act; and

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

5 2001, and before October 1, 2001, shall, instead of

6 being reduced by 3 percent as provided by clause

7 (ix)(III) of such section as in effect after the date

8 of the enactment of this Act, be reduced by 1 per9 cent.

10 (c) CONFORMING AMENDMENTS RELATING TO DE11 TERMINATION OF STANDARDIZED AMOUNT.—Section

12 1886(d)(2)(C)(iv) (42 U.S.C. 1395ww(d)(2)(C)(iv)), is

13 amended—

14 (1) by striking ‘‘1989 or’’ and inserting

15 ‘‘1989,’’; and

16 (2) by inserting ‘‘, or the enactment of section

17 303 of the Medicare, Medicaid, and SCHIP Benefits

18 Improvement and Protection Act of 2000’’ after

19 ‘‘Omnibus Budget Reconciliation Act of 1990’’.

20 (d) TECHNICAL AMENDMENT.—

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

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

23 ‘‘and before October 1, 1997,’’.
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1 (2) EFFECTIVE DATE.—The amendment made

2 by paragraph (1) is effective as if included in the en3 actment of BBA.

4 (e) REFERENCE TO CHANGES IN DSH FOR RURAL

5 HOSPITALS.—For additional changes in the DSH pro6 gram for rural hospitals, see section 211.

7 SEC. 304. WAGE INDEX IMPROVEMENTS.

8 (a) DURATION OF WAGE INDEX RECLASSIFICATION;

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

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

11 the end the following new clauses:

12 ‘‘(v) Any decision of the Board to reclassify a sub13 section (d) hospital for purposes of the adjustment factor

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

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

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

17 procedures under which a subsection (d) hospital may

18 elect to terminate such reclassification before the end of

19 such period.

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

21 decisions on applications for reclassification for the pur22 poses described in clause (v) for fiscal year 2003 and any

23 succeeding fiscal year, the Board shall base any compari24 son of the average hourly wage for the hospital with the

25 average hourly wage for hospitals in an area on—
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1 ‘‘(I) an average of the average hourly wage

2 amount for the hospital from the most recently pub3 lished hospital wage survey data of the Secretary (as

4 of the date on which the hospital applies for reclassi5 fication) and such amount from each of the two im6 mediately preceding surveys; and

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

8 amount for hospitals in such area from the most re9 cently published hospital wage survey data of the

10 Secretary (as of the date on which the hospital ap11 plies for reclassification) and such amount from each

12 of the two immediately preceding surveys.’’.

13 (b) PROCESS TO PERMIT STATEWIDE WAGE INDEX

14 CALCULATION AND APPLICATION.—

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

16 Human Services shall establish a process (based on

17 the voluntary process utilized by the Secretary of

18 Health and Human Services under section 1848 of

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

20 purposes of computing and applying a statewide geo21 graphic adjustment factor) under which an appro22 priate statewide entity may apply to have all the ge23 ographic areas in a State treated as a single geo24 graphic area for purposes of computing and applying

25 the area wage index under section 1886(d)(3)(E) of
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1 such Act (42 U.S.C. 1395ww(d)(3)(E)). Such proc2 ess shall be established by October 1, 2001, for re3 classifications beginning in fiscal year 2003.

4 (2) PROHIBITION ON INDIVIDUAL HOSPITAL RE5 CLASSIFICATION.—Notwithstanding any other provi6 sion of law, if the Secretary applies a statewide geo7 graphic wage index under paragraph (1) with re8 spect to a State, any application submitted by a hos9 pital in that State under section 1886(d)(10) of the

10 Social Security Act (42 U.S.C. 1395ww(d)(10)) for

11 geographic reclassification shall not be considered.

12 (c) COLLECTION OF INFORMATION ON OCCUPA13 TIONAL MIX.—

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

15 Human Services shall provide for the collection of

16 data every 3 years on occupational mix for employ17 ees of each subsection (d) hospital (as defined in

18 section 1886(d)(1)(D) of the Social Security Act (42

19 U.S.C. 1395ww(d)(1)(D))) in the provision of inpa20 tient hospital services, in order to construct an occu21 pational mix adjustment in the hospital area wage

22 index applied under section 1886(d)(3)(E) of such

23 Act (42 U.S.C. 1395ww(d)(3)(E)).

24 (2) APPLICATION.—The third sentence of sec25 tion 1886(d)(3)(E) (42 U.S.C. 1395ww(d)(3)(E)) is
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1 amended by striking ‘‘To the extent determined fea2 sible by the Secretary, such survey shall measure’’

3 and inserting ‘‘Not less often than once every 3

4 years the Secretary (through such survey or other5 wise) shall measure’’.

6 (3) EFFECTIVE DATE.—By not later than Sep7 tember 30, 2003, for application beginning October

8 1, 2004, the Secretary shall first complete—

9 (A) the collection of data under paragraph

10 (1); and

11 (B) the measurement under the third sen12 tence of section 1886(d)(3)(E), as amended by

13 paragraph (2).

14 SEC. 305. PAYMENT FOR INPATIENT SERVICES OF REHA15 BILITATION HOSPITALS.

16 (a) ASSISTANCE WITH ADMINISTRATIVE COSTS AS17 SOCIATED WITH COMPLETION OF PATIENT ASSESS18 MENT.—Section 1886( j)(3)(B) (42 U.S.C.

19 1395ww( j)(3)(B)) is amended by striking ‘‘98 percent’’

20 and inserting ‘‘98 percent for fiscal year 2001 and 100

21 percent for fiscal year 2002’’.

22 (b) ELECTION TO APPLY FULL PROSPECTIVE PAY23 MENT RATE WITHOUT PHASE-IN.—

24 (1) IN GENERAL.—Paragraph (1) of section

25 1886( j) (42 U.S.C. 1395ww( j)) is amended—
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1 (A) in subparagraph (A), by inserting

2 ‘‘other than a facility making an election under

3 subparagraph (F)’’ before ‘‘in a cost reporting

4 period’’;

5 (B) in subparagraph (B), by inserting ‘‘or,

6 in the case of a facility making an election

7 under subparagraph (F), for any cost reporting

8 period described in such subparagraph,’’ after

9 ‘‘2002,’’; and

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

11 subparagraph:

12 ‘‘(F) ELECTION TO APPLY FULL PROSPEC13 TIVE PAYMENT SYSTEM.—A rehabilitation facil14 ity may elect, not later than 30 days before its

15 first cost reporting period for which the pay16 ment methodology under this subsection applies

17 to the facility, to have payment made to the fa18 cility under this subsection under the provisions

19 of subparagraph (B) (rather than subparagraph

20 (A)) for each cost reporting period to which

21 such payment methodology applies.’’.

22 (2) CLARIFICATION.—Paragraph (3)(B) of such

23 section is amended by inserting ‘‘but not taking into

24 account any payment adjustment resulting from an
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1 election permitted under paragraph (1)(F)’’ after

2 ‘‘paragraphs (4) and (6)’’.

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

4 this section take effect as if included in the enactment of

5 BBA.

6 SEC. 306. PAYMENT FOR INPATIENT SERVICES OF PSY7 CHIATRIC HOSPITALS.

8 With respect to hospitals described in clause (i) of

9 section 1886(d)(1)(B) of the Social Security Act (42

10 U.S.C. 1395ww(d)(1)(B)) and psychiatric units described

11 in the matter following clause (v) of such section, in mak12 ing incentive payments to such hospitals under section

13 1886(b)(1)(A) of such Act (42 U.S.C. 1395ww(b)(1)(A))

14 for cost reporting periods beginning on or after October

15 1, 2000, and before October 1, 2001, the Secretary of

16 Health and Human Services, in clause (ii) of such section,

17 shall substitute ‘‘3 percent’’ for ‘‘2 percent’’.

18 SEC. 307. PAYMENT FOR INPATIENT SERVICES OF LONG19 TERM CARE HOSPITALS.

20 (a) INCREASED TARGET AMOUNTS AND CAPS FOR

21 LONG-TERM CARE HOSPITALS BEFORE IMPLEMENTA22 TION OF THE PROSPECTIVE PAYMENT SYSTEM.—

23 (1) IN GENERAL.—Section 1886(b)(3) (42

24 U.S.C. 1395ww(b)(3)) is amended—
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1 (A) in subparagraph (H)(ii)(III), by insert2 ing ‘‘subject to subparagraph (J),’’ after

3 ‘‘2002,’’; and

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

5 subparagraph:

6 ‘‘(J) For cost reporting periods beginning during fis7 cal year 2001, for a hospital described in subsection

8 (d)(1)(B)(iv)—

9 ‘‘(i) the limiting or cap amount otherwise deter10 mined under subparagraph (H) shall be increased by

11 2 percent; and

12 ‘‘(ii) the target amount otherwise determined

13 under subparagraph (A) shall be increased by 25

14 percent (subject to the limiting or cap amount deter15 mined under subparagraph (H), as increased by

16 clause (i)).’’.

17 (2) APPLICATION.—The amendments made by

18 subsection (a) and by section 122 of BBRA (113

19 Stat. 1501A–331) shall not be taken into account in

20 the development and implementation of the prospec21 tive payment system under section 123 of BBRA

22 (113 Stat. 1501A–331).

23 (b) IMPLEMENTATION OF PROSPECTIVE PAYMENT

24 SYSTEM FOR LONG-TERM CARE HOSPITALS.—
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1 (1) MODIFICATION OF REQUIREMENT.—In de2 veloping the prospective payment system for pay3 ment for inpatient hospital services provided in long4 term care hospitals described in section

5 1886(d)(1)(B)(iv) of the Social Security Act (42

6 U.S.C. 1395ww(d)(1)(B)(iv)) under the medicare

7 program under title XVIII of such Act required

8 under section 123 of BBRA, the Secretary of Health

9 and Human Services shall examine the feasibility

10 and the impact of basing payment under such a sys11 tem on the use of existing (or refined) hospital diag12 nosis-related groups (DRGs) that have been modi13 fied to account for different resource use of long14 term care hospital patients as well as the use of the

15 most recently available hospital discharge data. The

16 Secretary shall examine and may provide for appro17 priate adjustments to the long-term hospital pay18 ment system, including adjustments to DRG

19 weights, area wage adjustments, geographic reclassi20 fication, outliers, updates, and a disproportionate

21 share adjustment consistent with section

22 1886(d)(5)(F) of the Social Security Act (42 U.S.C.

23 1395ww(d)(5)(F)).

24 (2) DEFAULT IMPLEMENTATION OF SYSTEM

25 BASED ON EXISTING DRG METHODOLOGY.—If the
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1 Secretary is unable to implement the prospective

2 payment system under section 123 of the BBRA by

3 October 1, 2002, the Secretary shall implement a

4 prospective payment system for such hospitals that

5 bases payment under such a system using existing

6 hospital diagnosis-related groups (DRGs), modified

7 where feasible to account for resource use of long8 term care hospital patients using the most recently

9 available hospital discharge data for such services

10 furnished on or after that date.

11 Subtitle B—Adjustments to PPS

12 Payments for Skilled Nursing

13 Facilities

14 SEC. 311. ELIMINATION OF REDUCTION IN SKILLED NURS15 ING FACILITY (SNF) MARKET BASKET UP16 DATE IN 2001.

17 (a) IN GENERAL.—Section 1888(e)(4)(E)(ii) (42

18 U.S.C. 1395yy(e)(4)(E)(ii)) is amended—

19 (1) by redesignating subclauses (II) and (III)

20 as subclauses (III) and (IV), respectively;

21 (2) in subclause (III), as so redesignated—

22 (A) by striking ‘‘each of fiscal years 2001

23 and 2002’’ and inserting ‘‘each of fiscal years

24 2002 and 2003’’; and
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1 (B) by striking ‘‘minus 1 percentage

2 point’’ and inserting ‘‘minus 0.5 percentage

3 points’’; and

4 (3) by inserting after subclause (I) the fol5 lowing new subclause:

6 ‘‘(II) for fiscal year 2001, the

7 rate computed for the previous fiscal

8 year increased by the skilled nursing

9 facility market basket percentage

10 change for the fiscal year;’’.

11 (b) SPECIAL RULE FOR PAYMENT FOR FISCAL YEAR

12 2001.—Notwithstanding the amendments made by sub13 section (a), for purposes of making payments for covered

14 skilled nursing facility services under section 1888(e) of

15 the Social Security Act (42 U.S.C. 1395yy(e)) for fiscal

16 year 2001, the Federal per diem rate referred to in para17 graph (4)(E)(ii) of such section—

18 (1) for the period beginning on October 1,

19 2000, and ending on March 31, 2001, shall be the

20 rate determined in accordance with the law as in ef21 fect on the day before the date of the enactment of

22 this Act; and

23 (2) for the period beginning on April 1, 2001,

24 and ending on September 30, 2001, shall be the rate

25 that would have been determined under such section
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1 if ‘‘plus 1 percentage point’’ had been substituted

2 for ‘‘minus 1 percentage point’’ under subclause (II)

3 of such paragraph (as in effect on the day before the

4 date of the enactment of this Act).

5 (c) RELATION TO TEMPORARY INCREASE IN

6 BBRA.—The increases provided under section 101 of

7 BBRA (113 Stat. 1501A–325) shall be in addition to any

8 increase resulting from the amendments made by sub9 section (a).

10 (d) GAO REPORT ON ADEQUACY OF SNF PAYMENT

11 RATES.—Not later than July 1, 2002, the Comptroller

12 General of the United States shall submit to Congress a

13 report on the adequacy of medicare payment rates to

14 skilled nursing facilities and the extent to which medicare

15 contributes to the financial viability of such facilities. Such

16 report shall take into account the role of private payors,

17 medicaid, and case mix on the financial performance of

18 these facilities, and shall include an analysis (by specific

19 RUG classification) of the number and characteristics of

20 such facilities.

21 (e) HCFA STUDY OF CLASSIFICATION SYSTEMS FOR

22 SNF RESIDENTS.—

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

24 Human Services shall conduct a study of the dif25 ferent systems for categorizing patients in medicare
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1 skilled nursing facilities in a manner that accounts

2 for the relative resource utilization of different pa3 tient types.

4 (2) REPORT.—Not later than January 1, 2005,

5 the Secretary shall submit to Congress a report on

6 the study conducted under subsection (a). Such re7 port shall include such recommendations regarding

8 changes in law as may be appropriate.

9 SEC. 312. INCREASE IN NURSING COMPONENT OF PPS FED10 ERAL RATE.

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

12 Human Services shall increase by 16.66 percent the nurs13 ing component of the case-mix adjusted Federal prospec14 tive payment rate specified in Tables 3 and 4 of the final

15 rule published in the Federal Register by the Health Care

16 Financing Administration on July 31, 2000 (65 Fed. Reg.

17 46770) and as subsequently updated, effective for services

18 furnished on or after April 1, 2001, and before October

19 1, 2002.

20 (b) GAO AUDIT OF NURSING STAFF RATIOS.—

21 (1) AUDIT.—The Comptroller General of the

22 United States shall conduct an audit of nursing

23 staffing ratios in a representative sample of medi24 care skilled nursing facilities. Such sample shall

25 cover selected States and shall include broad rep-
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1 resentation with respect to size, ownership, location,

2 and medicare volume. Such audit shall include an

3 examination of payroll records and medicaid cost re4 ports of individual facilities.

5 (2) REPORT.—Not later than August 1, 2002,

6 the Comptroller General shall submit to Congress a

7 report on the audits conducted under paragraph (1).

8 Such report shall include an assessment of the im9 pact of the increased payments under this subtitle

10 on increased nursing staff ratios and shall make rec11 ommendations as to whether increased payments

12 under subsection (a) should be continued.

13 SEC. 313. APPLICATION OF SNF CONSOLIDATED BILLING

14 REQUIREMENT LIMITED TO PART A COV15 ERED STAYS.

16 (a) IN GENERAL.—Section 1862(a)(18) (42 U.S.C.

17 1395y(a)(18)) is amended by striking ‘‘or of a part of a

18 facility that includes a skilled nursing facility (as deter19 mined under regulations),’’ and inserting ‘‘during a period

20 in which the resident is provided covered post-hospital ex21 tended care services (or, for services described in section

22 1861(s)(2)(D), which are furnished to such an individual

23 without regard to such period),’’.

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

25 1842(b)(6)(E) (42 U.S.C. 1395u(b)(6)(E)) is amended—
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1 (A) by inserting ‘‘by, or under arrangements

2 made by, a skilled nursing facility’’ after ‘‘fur3 nished’’;

4 (B) by striking ‘‘or of a part of a facility that

5 includes a skilled nursing facility (as determined

6 under regulations)’’; and

7 (C) by striking ‘‘(without regard to whether or

8 not the item or service was furnished by the facility,

9 by others under arrangement with them made by the

10 facility, under any other contracting or consulting

11 arrangement, or otherwise)’’.

12 (2) Section 1842(t) (42 U.S.C. 1395u(t)) is amended

13 by striking ‘‘by a physician’’ and ‘‘or of a part of a facility

14 that includes a skilled nursing facility (as determined

15 under regulations),’’.

16 (3) Section 1866(a)(1)(H)(ii)(I) (42 U.S.C.

17 1395cc(a)(1)(H)(ii)(I)) is amended by inserting after

18 ‘‘who is a resident of the skilled nursing facility’’ the fol19 lowing: ‘‘during a period in which the resident is provided

20 covered post-hospital extended care services (or, for serv21 ices described in section 1861(s)(2)(D), that are furnished

22 to such an individual without regard to such period)’’.

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

24 subsections (a) and (b) shall apply to services furnished

25 on or after January 1, 2001.
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1 (d) OVERSIGHT.—The Secretary of Health and

2 Human Services, through the Office of the Inspector Gen3 eral in the Department of Health and Human Services

4 or otherwise, shall monitor payments made under part B

5 of the title XVIII of the Social Security Act for items and

6 services furnished to residents of skilled nursing facilities

7 during a time in which the residents are not being pro8 vided medicare covered post-hospital extended care serv9 ices to ensure that there is not duplicate billing for serv10 ices or excessive services provided.

11 SEC. 314. ADJUSTMENT OF REHABILITATION RUGS TO COR12 RECT ANOMALY IN PAYMENT RATES.

13 (a) ADJUSTMENT FOR REHABILITATION RUGS.—

14 (1) IN GENERAL.—For purposes of computing

15 payments for covered skilled nursing facility services

16 under paragraph (1) of section 1888(e) of the Social

17 Security Act (42 U.S.C. 1395yy(e)) for such services

18 furnished on or after April 1, 2001, and before the

19 date described in section 101(c)(2) of BBRA (113

20 Stat. 1501A–324), the Secretary of Health and

21 Human Services shall increase by 6.7 percent the

22 adjusted Federal per diem rate otherwise determined

23 under paragraph (4) of such section (but for this

24 section) for covered skilled nursing facility services

25 for RUG–III rehabilitation groups described in para-
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1 graph (2) furnished to an individual during the pe2 riod in which such individual is classified in such a

3 RUG–III category.

4 (2) REHABILITATION GROUPS DESCRIBED.—

5 The RUG–III rehabilitation groups for which the

6 adjustment described in paragraph (1) applies are

7 RUC, RUB, RUA, RVC, RVB, RVA, RHC, RHB,

8 RHA, RMC, RMB, RMA, RLB, and RLA, as speci9 fied in Tables 3 and 4 of the final rule published in

10 the Federal Register by the Health Care Financing

11 Administration on July 31, 2000 (65 Fed. Reg.

12 46770).

13 (b) CORRECTION WITH RESPECT TO REHABILITA14 TION RUGS.—

15 (1) IN GENERAL.—Section 101(b) of BBRA

16 (113 Stat. 1501A–324) is amended by striking

17 ‘‘CA1, RHC, RMC, and RMB’’ and inserting ‘‘and

18 CA1’’.

19 (2) EFFECTIVE DATE.—The amendment made

20 by paragraph (1) shall apply to services furnished on

21 or after April 1, 2001.

22 (c) REVIEW BY OFFICE OF INSPECTOR GENERAL.—

23 The Inspector General of the Department of Health and

24 Human Services shall review the medicare payment struc25 ture for services classified within rehabilitation resource
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1 utilization groups (RUGs) (as in effect after the date of

2 the enactment of the BBRA) to assess whether payment

3 incentives exist for the delivery of inadequate care. Not

4 later than October 1, 2001, the Inspector General shall

5 submit to Congress a report on such review.

6 SEC. 315. ESTABLISHMENT OF PROCESS FOR GEOGRAPHIC

7 RECLASSIFICATION.

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

9 Human Services may establish a procedure for the geo10 graphic reclassification of a skilled nursing facility for pur11 poses of payment for covered skilled nursing facility serv12 ices under the prospective payment system established

13 under section 1888(e) of the Social Security Act (42

14 U.S.C. 1395yy(e)). Such procedure may be based upon the

15 method for geographic reclassifications for inpatient hos16 pitals established under section 1886(d)(10) of the Social

17 Security Act (42 U.S.C. 1395ww(d)(10)).

18 (b) REQUIREMENT FOR SKILLED NURSING FACILITY

19 WAGE DATA.—In no case may the Secretary implement

20 the procedure under subsection (a) before such time as

21 the Secretary has collected data necessary to establish an

22 area wage index for skilled nursing facilities based on

23 wage data from such facilities.
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1 Subtitle C—Hospice Care

2 SEC. 321. FIVE PERCENT INCREASE IN PAYMENT BASE.

3 (a) IN GENERAL.—Section 1814(i)(1)(C)(ii)(VI) (42

4 U.S.C. 1395f(i)(1)(C)(ii)(VI)) is amended by inserting ‘‘,

5 plus, in the case of fiscal year 2001, 5.0 percentage

6 points’’ before the semicolon at the end.

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

8 subsection (a) shall apply to hospice care furnished on or

9 after April 1, 2001. In applying clause (ii) of section

10 1814(i)(1)(C) of the Social Security Act (42 U.S.C.

11 1395f(i)(1)(C)) beginning with fiscal year 2002, the pay12 ment rates in effect under such section during the period

13 beginning on April 1, 2001, and ending on September 30,

14 shall be treated as the payment rates in effect during fis15 cal year 2001.

16 (c) NO EFFECT ON BBRA TEMPORARY INCREASE.—

17 The provisions of this section shall have no effect on the

18 application of section 131 of BBRA.

19 (d) APPLICATION OF WAGE INDEX.—Notwith20 standing section 1814(i) of the Social Security Act (42

21 U.S.C. 1395f(i)), the Secretary of Health and Human

22 Services shall use 1.0043 as the hospice wage index value

23 for the Wichita, Kansas Metropolitan Statistical Area in

24 calculating payments under such section for a hospice pro25 gram providing hospice care in such area during fiscal
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1 year 2000. The Secretary may provide for an appropriate

2 timely lump sum payment to reflect the application of the

3 previous sentence.

4 (e) TECHNICAL AMENDMENT.—Section

5 1814(a)(7)(A)(ii) (42 U.S.C. 1395f(a)(7)(A)(ii)) is

6 amended by striking the period at the end and inserting

7 a semicolon.

8 SEC. 322. CLARIFICATION OF PHYSICIAN CERTIFICATION.

9 (a) CERTIFICATION BASED ON NORMAL COURSE OF

10 ILLNESS.—

11 (1) IN GENERAL.—Section 1814(a) (42 U.S.C.

12 1395f(a)) is amended by adding at the end the fol13 lowing new sentence: ‘‘The certification regarding

14 terminal illness of an individual under paragraph (7)

15 shall be based on the physician’s or medical direc16 tor’s clinical judgment regarding the normal course

17 of the individual’s illness.’’.

18 (2) EFFECTIVE DATE.—The amendment made

19 by paragraph (1) shall apply to certifications made

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

21 (b) STUDY AND REPORT ON PHYSICIAN CERTIFI22 CATION REQUIREMENT FOR HOSPICE BENEFITS.—

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

24 Human Services shall conduct a study to examine

25 the appropriateness of the certification regarding
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1 terminal illness of an individual under section

2 1814(a)(7) of the Social Security Act (42 U.S.C.

3 1395f(a)(7)) that is required in order for such indi4 vidual to receive hospice benefits under the medicare

5 program under title XVIII of such Act. In con6 ducting such study, the Secretary shall take into ac7 count the effect of the amendment made by sub8 section (a).

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

10 date of the enactment of this Act, the Secretary of

11 Health and Human Services shall submit to Con12 gress a report on the study conducted under para13 graph (1), together with any recommendations for

14 legislation that the Secretary deems appropriate.

15 SEC. 323. MEDPAC REPORT ON ACCESS TO, AND USE OF,

16 HOSPICE BENEFIT.

17 (a) IN GENERAL.—The Medicare Payment Advisory

18 Commission shall conduct a study to examine the factors

19 affecting the use of hospice benefits under the medicare

20 program under title XVIII of the Social Security Act, in21 cluding a delay in the time (relative to death) of entry

22 into a hospice program, and differences in such use be23 tween urban and rural hospice programs and based upon

24 the presenting condition of the patient.
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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 any recommendations for leg5 islation that the Commission deems appropriate.

6 Subtitle D—Other Provisions

7 SEC. 331. RELIEF FROM MEDICARE PART A LATE ENROLL8 MENT PENALTY FOR GROUP BUY-IN FOR

9 STATE AND LOCAL RETIREES.

10 (a) IN GENERAL.—Section 1818 (42 U.S.C. 1395i–

11 2) is amended—

12 (1) in subsection (c)(6), by inserting before the

13 semicolon at the end the following: ‘‘and shall be

14 subject to reduction in accordance with subsection

15 (d)(6)’’; and

16 (2) by adding at the end of subsection (d) the

17 following new paragraph:

18 ‘‘(6)(A) In the case where a State, a political subdivi19 sion of a State, or an agency or instrumentality of a State

20 or political subdivision thereof determines to pay, for the

21 life of each individual, the monthly premiums due under

22 paragraph (1) on behalf of each of the individuals in a

23 qualified State or local government retiree group who

24 meets the conditions of subsection (a), the amount of any

25 increase otherwise applicable under section 1839(b) (as
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1 applied and modified by subsection (c)(6) of this section)

2 with respect to the monthly premium for benefits under

3 this part for an individual who is a member of such group

4 shall be reduced by the total amount of taxes paid under

5 section 3101(b) of the Internal Revenue Code of 1986 by

6 such individual and under section 3111(b) by the employ7 ers of such individual on behalf of such individual with

8 respect to employment (as defined in section 3121(b) of

9 such Code).

10 ‘‘(B) For purposes of this paragraph, the term ‘quali11 fied State or local government retiree group’ means all of

12 the individuals who retire prior to a specified date that

13 is before January 1, 2002, from employment in one or

14 more occupations or other broad classes of employees of—

15 ‘‘(i) the State;

16 ‘‘(ii) a political subdivision of the State; or

17 ‘‘(iii) an agency or instrumentality of the State

18 or political subdivision of the State.’’.

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

20 subsection (a) shall apply to premiums for months begin21 ning with January 1, 2002.
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1 TITLE IV—PROVISIONS

2 RELATING TO PART B

3 Subtitle A—Hospital Outpatient

4 Services

5 SEC. 401. REVISION OF HOSPITAL OUTPATIENT PPS PAY6 MENT UPDATE.

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

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

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

10 of 2000 and 2002’’.

11 (b) ADJUSTMENT FOR CASE MIX CHANGES.—

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

13 U.S.C. 1395l(t)(3)(C)) is amended—

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

15 (iv); and

16 (B) by inserting after clause (ii) the fol17 lowing new clause:

18 ‘‘(iii) ADJUSTMENT FOR SERVICE MIX

19 CHANGES.—Insofar as the Secretary deter20 mines that the adjustments for service mix

21 under paragraph (2) for a previous year

22 (or estimates that such adjustments for a

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

24 a change in aggregate payments under this

25 subsection during the year that are a re-
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1 sult of changes in the coding or classifica2 tion of covered OPD services that do not

3 reflect real changes in service mix, the Sec4 retary may adjust the conversion factor

5 computed under this subparagraph for

6 subsequent years so as to eliminate the ef7 fect of such coding or classification

8 changes.’’.

9 (2) EFFECTIVE DATE.—The amendments made

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

11 the enactment of BBA.

12 (c) SPECIAL RULE FOR PAYMENT FOR 2001.—Not13 withstanding the amendment made by subsection (a), for

14 purposes of making payments under section 1833(t) of the

15 Social Security Act (42 U.S.C. 1395l(t)) for covered OPD

16 services furnished during 2001, the medicare OPD fee

17 schedule amount under such section—

18 (1) for services furnished on or after January

19 1, 2001, and before April 1, 2001, shall be the medi20 care OPD fee schedule amount for 2001 as deter21 mined under the provisions of law in effect on the

22 day before the date of the enactment of this Act;

23 and

24 (2) for services furnished on or after April 1,

25 2001, and before January 1, 2002, shall be the fee
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1 schedule amount (as determined taking into account

2 the amendment made by subsection (a)), increased

3 by a transitional percentage allowance equal to 0.32

4 percent (to account for the timing of implementation

5 of the full market basket update).

6 SEC. 402. CLARIFYING PROCESS AND STANDARDS FOR DE7 TERMINING ELIGIBILITY OF DEVICES FOR

8 PASS-THROUGH PAYMENTS UNDER HOSPITAL

9 OUTPATIENT PPS.

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

11 1395l(t)(6)) is amended—

12 (1) by redesignating subparagraphs (C) and

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

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

15 the following new subparagraphs:

16 ‘‘(B) USE OF CATEGORIES IN DETER17 MINING ELIGIBILITY OF A DEVICE FOR PASS18 THROUGH PAYMENTS.—The following provi19 sions apply for purposes of determining whether

20 a medical device qualifies for additional pay21 ments under clause (ii) or (iv) of subparagraph

22 (A):

23 ‘‘(i) ESTABLISHMENT OF INITIAL CAT24 EGORIES.—
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1 ‘‘(I) IN GENERAL.—The Sec2 retary shall initially establish under

3 this clause categories of medical de4 vices based on type of device by April

5 1, 2001. Such categories shall be es6 tablished in a manner such that each

7 medical device that meets the require8 ments of clause (ii) or (iv) of subpara9 graph (A) as of January 1, 2001, is

10 included in such a category and no

11 such device is included in more than

12 one category. For purposes of the pre13 ceding sentence, whether a medical

14 device meets such requirements as of

15 such date shall be determined on the

16 basis of the program memoranda

17 issued before such date.

18 ‘‘(II) AUTHORIZATION OF IMPLE19 MENTATION OTHER THAN THROUGH

20 REGULATIONS.—The categories may

21 be established under this clause by

22 program memorandum or otherwise,

23 after consultation with groups rep24 resenting hospitals, manufacturers of
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1 medical devices, and other affected

2 parties.

3 ‘‘(ii) ESTABLISHING CRITERIA FOR

4 ADDITIONAL CATEGORIES.—

5 ‘‘(I) IN GENERAL.—The Sec6 retary shall establish criteria that will

7 be used for creation of additional cat8 egories (other than those established

9 under clause (i)) through rulemaking

10 (which may include use of an interim

11 final rule with comment period).

12 ‘‘(II) STANDARD.—Such cat13 egories shall be established under this

14 clause in a manner such that no med15 ical device is described by more than

16 one category. Such criteria shall in17 clude a test of whether the average

18 cost of devices that would be included

19 in a category and are in use at the

20 time the category is established is not

21 insignificant, as described in subpara22 graph (A)(iv)(II).

23 ‘‘(III) DEADLINE.—Criteria shall

24 first be established under this clause

25 by July 1, 2001. The Secretary may
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1 establish in compelling circumstances

2 categories under this clause before the

3 date such criteria are established.

4 ‘‘(IV) ADDING CATEGORIES.—

5 The Secretary shall promptly establish

6 a new category of medical devices

7 under this clause for any medical de8 vice that meets the requirements of

9 subparagraph (A)(iv) and for which

10 none of the categories in effect (or

11 that were previously in effect) is ap12 propriate.

13 ‘‘(iii) PERIOD FOR WHICH CATEGORY

14 IS IN EFFECT.—A category of medical de15 vices established under clause (i) or (ii)

16 shall be in effect for a period of at least 2

17 years, but not more than 3 years, that

18 begins—

19 ‘‘(I) in the case of a category es20 tablished under clause (i), on the first

21 date on which payment was made

22 under this paragraph for any device

23 described by such category (including

24 payments made during the period be25 fore April 1, 2001); and
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1 ‘‘(II) in the case of any other

2 category, on the first date on which

3 payment is made under this para4 graph for any medical device that is

5 described by such category.

6 ‘‘(iv) REQUIREMENTS TREATED AS

7 MET.—A medical device shall be treated as

8 meeting the requirements of subparagraph

9 (A)(iv), regardless of whether the device

10 meets the requirement of subclause (I) of

11 such subparagraph, if—

12 ‘‘(I) the device is described by a

13 category established and in effect

14 under clause (i); or

15 ‘‘(II) the device is described by a

16 category established and in effect

17 under clause (ii) and an application

18 under section 515 of the Federal

19 Food, Drug, and Cosmetic Act has

20 been approved with respect to the de21 vice, or the device has been cleared for

22 market under section 510(k) of such

23 Act, or the device is exempt from the

24 requirements of section 510(k) of

25 such Act pursuant to subsection (l) or
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1 (m) of section 510 of such Act or sec2 tion 520(g) of such Act.

3 Nothing in this clause shall be construed

4 as requiring an application or prior ap5 proval (other than that described in sub6 clause (II)) in order for a covered device

7 described by a category to qualify for pay8 ment under this paragraph.

9 ‘‘(C) LIMITED PERIOD OF PAYMENT.—

10 ‘‘(i) DRUGS AND BIOLOGICALS.—The

11 payment under this paragraph with respect

12 to a drug or biological shall only apply dur13 ing a period of at least 2 years, but not

14 more than 3 years, that begins—

15 ‘‘(I) on the first date this sub16 section is implemented in the case of

17 a drug or biological described in

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

19 (A) and in the case of a drug or bio20 logical described in subparagraph

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

22 this part is made as an outpatient

23 hospital service before such first date;

24 or
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1 ‘‘(II) in the case of a drug or bio2 logical described in subparagraph

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

4 on the first date on which payment is

5 made under this part for the drug or

6 biological as an outpatient hospital

7 service.

8 ‘‘(ii) MEDICAL DEVICES.—Payment

9 shall be made under this paragraph with

10 respect to a medical device only if such

11 device—

12 ‘‘(I) is described by a category of

13 medical devices established and in ef14 fect under subparagraph (B); and

15 ‘‘(II) is provided as part of a

16 service (or group of services) paid for

17 under this subsection and provided

18 during the period for which such cat19 egory is in effect under such subpara20 graph.’’.

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

22 (42 U.S.C. 1395l(t)) is further amended—

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

24 cost of the device, drug, or biological’’ and inserting
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1 ‘‘the cost of the drug or biological or the average

2 cost of the category of devices’’;

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

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

5 (D)(iii)’’ in the matter preceding clause (i) and in6 serting ‘‘subparagraph (E)(iii)’’; and

7 (3) in paragraph (12)(E), by striking ‘‘addi8 tional payments (consistent with paragraph (6)(B))’’

9 and inserting ‘‘additional payments, the determina10 tion and deletion of initial and new categories (con11 sistent with subparagraphs (B) and (C) of para12 graph (6))’’.

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

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

15 this Act.

16 (d) TRANSITION.—

17 (1) IN GENERAL.—In the case of a medical de18 vice provided as part of a service (or group of serv19 ices) furnished during the period before initial cat20 egories are implemented under subparagraph (B)(i)

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

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

23 for such device under such section in accordance

24 with the provisions in effect before the date of the

25 enactment of this Act. In addition, beginning on the
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1 date that is 30 days after the date of the enactment

2 of this Act, payment shall be made for such a device

3 that is not included in a program memorandum de4 scribed in such subparagraph if the Secretary of

5 Health and Human Services determines that the de6 vice (including a device that would have been in7 cluded in such program memoranda but for the re8 quirement of subparagraph (A)(iv)(I) of that sec9 tion) is likely to be described by such an initial cat10 egory.

11 (2) APPLICATION OF CURRENT PROCESS.—Not12 withstanding any other provision of law, the Sec13 retary shall continue to accept applications with re14 spect to medical devices under the process estab15 lished pursuant to paragraph (6) of section 1833(t)

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

17 before the date of the enactment of this Act)

18 through December 1, 2000, and any device—

19 (A) with respect to which an application

20 was submitted (pursuant to such process) on or

21 before such date; and

22 (B) that meets the requirements of clause

23 (ii) or (iv) of subparagraph (A) of such para24 graph (as determined pursuant to such proc25 ess),
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1 shall be treated as a device with respect to which an

2 initial category is required to be established under

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

4 by subsection (a)(2)).

5 SEC. 403. APPLICATION OF OPD PPS TRANSITIONAL COR6 RIDOR PAYMENTS TO CERTAIN HOSPITALS

7 THAT DID NOT SUBMIT A 1996 COST REPORT.

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

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

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

11 for such period, during the first subsequent cost reporting

12 period ending before 2001 for which the hospital sub13 mitted a cost report)’’ after ‘‘1996’’.

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

15 subsection (a) shall take effect as if included in the enact16 ment of BBRA.

17 SEC. 404. APPLICATION OF RULES FOR DETERMINING PRO18 VIDER-BASED STATUS FOR CERTAIN ENTI19 TIES.

20 (a) GRANDFATHER.—Notwithstanding any other pro21 vision of law, effective October 1, 2000, for purposes of

22 provider-based status under title XVIII of the Social Secu23 rity Act—

24 (1) any facility or organization that is treated

25 as provider-based in relation to a hospital or critical
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1 access hospital under such title as of such date shall

2 continue to be treated as provider-based in relation

3 to such hospital or critical access hospital under

4 such title until October 1, 2002; and

5 (2) the requirements, limitations, and exclu6 sions specified in subsections (d), (e), (f ), and (h)

7 of section 413.65 of title 42, Code of Federal Regu8 lations, shall not apply to such facility or organiza9 tion in relation to such hospital or critical access

10 hospital until October 1, 2002.

11 (b) CONTINUING CRITERIA FOR MEETING GEO12 GRAPHIC LOCATION REQUIREMENT.—Except as provided

13 in subsection (a), in making determinations of provider14 based status on or after October 1, 2000, the following

15 rules shall apply:

16 (1) The facility or organization shall be treated

17 as satisfying any requirements and standards for ge18 ographic location in relation to a hospital or a crit19 ical access hospital if the facility or organization—

20 (A) satisfies the requirements of section

21 413.65(d)(7) of title 42, Code of Federal Regu22 lations; or

23 (B) is located not more than 35 miles from

24 the main campus of the hospital or critical ac25 cess hospital.
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1 (2) The facility or organization shall be treated

2 as satisfying any of the requirements and standards

3 for geographic location in relation to a hospital or a

4 critical access hospital if the facility or organization

5 is owned and operated by a hospital or critical ac6 cess hospital that—

7 (A) is owned or operated by a unit of State

8 or local government, is a public or private non9 profit corporation that is formally granted gov10 ernmental powers by a unit of State or local

11 government, or is a private hospital that has a

12 contract with a State or local government that

13 includes the operation of clinics located off the

14 main campus of the hospital to assure access in

15 a well-defined service area to health care serv16 ices for low-income individuals who are not enti17 tled to benefits under title XVIII (or medical

18 assistance under a State plan under title XIX)

19 of the Social Security Act; and

20 (B) has a disproportionate share adjust21 ment percentage (as determined under section

22 1886(d)(5)(F) of such Act (42 U.S.C.

23 1395ww(d)(5)(F))) greater than 11.75 percent

24 or is described in clause (i)(II) of such section.
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1 (c) TEMPORARY CRITERIA.—For purposes of title

2 XVIII of the Social Security Act, a facility or organization

3 for which a determination of provider-based status in rela4 tion to a hospital or critical access hospital is requested

5 on or after October 1, 2000, and before October 1, 2002,

6 shall be treated as having provider-based status in relation

7 to such a hospital or a critical access hospital for any pe8 riod before a determination is made with respect to such

9 status pursuant to such request.

10 (d) DEFINITIONS.—For purposes of this section, the

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

12 meanings given such terms in subsections (e) and

13 (mm)(1), respectively, of section 1861 of the Social Secu14 rity Act (42 U.S.C. 1395x).

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

16 PROSPECTIVE PAYMENT SYSTEM.

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

18 1395l(t)) is amended—

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

20 inserting ‘‘AND CHILDREN’S HOSPITALS’’ after ‘‘CAN21 CER HOSPITALS’’; and

22 (2) in paragraphs (7)(D)(ii) and (11), by strik23 ing ‘‘section 1886(d)(1)(B)(v)’’ and inserting

24 ‘‘clause (iii) or (v) of section 1886(d)(1)(B)’’.
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1 (b) EFFECTIVE DATE.—The amendments made by

2 subsection (a) shall apply as if included in the enactment

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

4 SEC. 406. INCLUSION OF TEMPERATURE MONITORED

5 CRYOABLATION IN TRANSITIONAL PASS6 THROUGH FOR CERTAIN MEDICAL DEVICES,

7 DRUGS, AND BIOLOGICALS UNDER OPD PPS.

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

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

10 temperature monitored cryoablation’’ after ‘‘device of

11 brachytherapy’’.

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

13 subsection (a) shall apply to devices furnished on or after

14 April 1, 2001.

15 Subtitle B—Provisions Relating to

16 Physicians’ Services

17 SEC. 411. GAO STUDIES RELATING TO PHYSICIANS’ SERV18 ICES.

19 (a) STUDY OF SPECIALIST PHYSICIANS’ SERVICES

20 FURNISHED IN PHYSICIANS’ OFFICES AND HOSPITAL

21 OUTPATIENT DEPARTMENT SERVICES.—

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

23 United States shall conduct a study to examine the

24 appropriateness of furnishing in physicians’ offices

25 specialist physicians’ services (such as gastro-
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1 intestinal endoscopic physicians’ services) which are

2 ordinarily furnished in hospital outpatient depart3 ments. In conducting this study, the Comptroller

4 General shall—

5 (A) review available scientific and clinical

6 evidence about the safety of performing proce7 dures in physicians’ offices and hospital out8 patient departments;

9 (B) assess whether resource-based practice

10 expense relative values established by the Sec11 retary of Health and Human Services under the

12 medicare physician fee schedule under section

13 1848 of the Social Security Act (42 U.S.C.

14 1395w–4) for such specialist physicians’ serv15 ices furnished in physicians’ offices and hospital

16 outpatient departments create an incentive to

17 furnish such services in physicians’ offices in18 stead of hospital outpatient departments; and

19 (C) assess the implications for access to

20 care for medicare beneficiaries if the medicare

21 program were not to cover such services in phy22 sicians’ offices.

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

24 Comptroller General shall submit to Congress a re25 port on such study and include such recommenda-
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1 tions as the Comptroller General determines to be

2 appropriate.

3 (b) STUDY OF THE RESOURCE-BASED PRACTICE EX4 PENSE SYSTEM.—

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

6 United States shall conduct a study on the refine7 ments to the practice expense relative value units

8 during the transition to a resource-based practice ex9 pense system for physician payments under the

10 medicare program under title XVIII of the Social

11 Security Act. Such study shall examine how the Sec12 retary of Health and Human Services has accepted

13 and used the practice expense data submitted under

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

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

16 Comptroller General shall submit to Congress a re17 port on the study conducted under paragraph (1) to18 gether with recommendations regarding—

19 (A) improvements in the process for ac20 ceptance and use of practice expense data

21 under section 212 of BBRA;

22 (B) any change or adjustment that is ap23 propriate to ensure full access to a spectrum of

24 care for beneficiaries under the medicare pro25 gram; and
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1 (C) the appropriateness of payments to

2 physicians.

3 SEC. 412. PHYSICIAN GROUP PRACTICE DEMONSTRATION.

4 (a) IN GENERAL.—Title XVIII is amended by insert5 ing after section 1866 the following new sections:

6 ‘‘DEMONSTRATION OF APPLICATION OF PHYSICIAN

7 VOLUME INCREASES TO GROUP PRACTICES

8 ‘‘SEC. 1866A. (a) DEMONSTRATION PROGRAM AU9 THORIZED.—

10 ‘‘(1) IN GENERAL.—The Secretary shall con11 duct demonstration projects to test and, if proven ef12 fective, expand the use of incentives to health care

13 groups participating in the program under this title

14 that—

15 ‘‘(A) encourage coordination of the care

16 furnished to individuals under the programs

17 under parts A and B by institutional and other

18 providers, practitioners, and suppliers of health

19 care items and services;

20 ‘‘(B) encourage investment in administra21 tive structures and processes to ensure efficient

22 service delivery; and

23 ‘‘(C) reward physicians for improving

24 health outcomes.

25 Such projects shall focus on the efficiencies of fur26 nishing health care in a group-practice setting as
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1 compared to the efficiencies of furnishing health care

2 in other health care delivery systems.

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

4 as otherwise specifically provided, the Secretary may

5 administer the program under this section in accord6 ance with section 1866B.

7 ‘‘(3) DEFINITIONS.—For purposes of this sec8 tion, terms have the following meanings:

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

10 may otherwise provide, the term ‘physician’

11 means any individual who furnishes services

12 which may be paid for as physicians’ services

13 under this title.

14 ‘‘(B) HEALTH CARE GROUP.—The term

15 ‘health care group’ means a group of physicians

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

17 least in part for the purpose of providing physi18 cians’ services under this title. As the Secretary

19 finds appropriate, a health care group may in20 clude a hospital and any other individual or en21 tity furnishing items or services for which pay22 ment may be made under this title that is affili23 ated with the health care group under an ar24 rangement structured so that such individual or

25 entity participates in a demonstration under
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1 this section and will share in any bonus earned

2 under subsection (d).

3 ‘‘(b) ELIGIBILITY CRITERIA.—

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

5 to establish criteria for health care groups eligible to

6 participate in a demonstration under this section, in7 cluding criteria relating to numbers of health care

8 professionals in, and of patients served by, the

9 group, scope of services provided, and quality of

10 care.

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

12 participating in the demonstration under this section

13 shall agree with respect to services furnished to

14 beneficiaries within the scope of the demonstration

15 (as determined under subsection (c))—

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

17 and

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

19 services furnished by members of the health

20 care group to such beneficiaries shall (where de21 termined appropriate by the Secretary) be made

22 to a single entity.

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

24 participating in a demonstration under this section

25 shall report to the Secretary such data, at such
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1 times and in such format as the Secretary requires,

2 for purposes of monitoring and evaluation of the

3 demonstration under this section.

4 ‘‘(c) PATIENTS WITHIN SCOPE OF DEMONSTRA5 TION.—

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

7 in accordance with this subsection, the criteria for

8 identifying those patients of a health care group who

9 shall be considered within the scope of the dem10 onstration under this section for purposes of applica11 tion of subsection (d) and for assessment of the ef12 fectiveness of the group in achieving the objectives

13 of this section.

14 ‘‘(2) OTHER CRITERIA.—The Secretary may es15 tablish additional criteria for inclusion of bene16 ficiaries within a demonstration under this section,

17 which may include frequency of contact with physi18 cians in the group or other factors or criteria that

19 the Secretary finds to be appropriate.

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

21 each beneficiary determined to be within the scope

22 of a demonstration under this section with respect to

23 a specific health care group, the Secretary shall en24 sure that such beneficiary is notified of the incen25 tives, and of any waivers of coverage or payment
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1 rules, applicable to such group under such dem2 onstration.

3 ‘‘(d) INCENTIVES.—

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

5 shall establish for each health care group partici6 pating in a demonstration under this section—

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

8 the average total payments under parts A and

9 B for patients served by the health care group

10 on a fee-for-service basis in a base period deter11 mined by the Secretary; and

12 ‘‘(B) an annual per capita expenditure tar13 get for patients determined to be within the

14 scope of the demonstration, reflecting the base

15 expenditure amount adjusted for risk and ex16 pected growth rates.

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

18 pay to each participating health care group (subject

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

20 demonstration equal to a portion of the medicare

21 savings realized for such year relative to the per22 formance target.

23 ‘‘(3) ADDITIONAL BONUS FOR PROCESS AND

24 OUTCOME IMPROVEMENTS.—At such time as the

25 Secretary has established appropriate criteria based
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1 on evidence the Secretary determines to be suffi2 cient, the Secretary shall also pay to a participating

3 health care group (subject to paragraph (4)) an ad4 ditional bonus for a year, equal to such portion as

5 the Secretary may designate of the saving to the

6 program under this title resulting from process im7 provements made by and patient outcome improve8 ments attributable to activities of the group.

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

10 bonus payments under this section as necessary to

11 ensure that the aggregate expenditures under this

12 title (inclusive of bonus payments) with respect to

13 patients within the scope of the demonstration do

14 not exceed the amount which the Secretary esti15 mates would be expended if the demonstration

16 projects under this section were not implemented.

17 ‘‘PROVISIONS FOR ADMINISTRATION OF DEMONSTRATION

18 PROGRAM

19 ‘‘SEC. 1866B. (a) GENERAL ADMINISTRATIVE AU20 THORITY.—

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

22 otherwise provided by the Secretary, an individual

23 shall only be eligible to receive benefits under the

24 program under section 1866A (in this section re25 ferred to as the ‘demonstration program’) if such

26 individual—
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1 ‘‘(A) is enrolled under the program under

2 part B and entitled to benefits under part A;

3 and

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

5 plan under part C, an eligible organization

6 under a contract under section 1876 (or a simi7 lar organization operating under a demonstra8 tion project authority), an organization with an

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

10 PACE program under section 1894.

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

12 OF PROGRAM.—The Secretary may limit the imple13 mentation of the demonstration program to—

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

15 Secretary designates for purposes of the pro16 gram, based upon such criteria as the Secretary

17 finds appropriate;

18 ‘‘(B) a subgroup (or subgroups) of bene19 ficiaries or individuals and entities furnishing

20 items or services (otherwise eligible to partici21 pate in the program), selected on the basis of

22 the number of such participants that the Sec23 retary finds consistent with the effective and ef24 ficient implementation of the program;
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1 ‘‘(C) an element (or elements) of the pro2 gram that the Secretary determines to be suit3 able for implementation; or

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

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

6 ‘‘(3) VOLUNTARY RECEIPT OF ITEMS AND

7 SERVICES.—Items and services shall be furnished to

8 an individual under the demonstration program only

9 at the individual’s election.

10 ‘‘(4) AGREEMENTS.—The Secretary is author11 ized to enter into agreements with individuals and

12 entities to furnish health care items and services to

13 beneficiaries under the demonstration program.

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

15 The Secretary shall establish performance standards

16 for the demonstration program including, as applica17 ble, standards for quality of health care items and

18 services, cost-effectiveness, beneficiary satisfaction,

19 and such other factors as the Secretary finds appro20 priate. The eligibility of individuals or entities for

21 the initial award, continuation, and renewal of

22 agreements to provide health care items and services

23 under the program shall be conditioned, at a min24 imum, on performance that meets or exceeds such

25 standards.
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1 ‘‘(6) ADMINISTRATIVE REVIEW OF DECISIONS

2 AFFECTING INDIVIDUALS AND ENTITIES FUR3 NISHING SERVICES.—An individual or entity fur4 nishing services under the demonstration program

5 shall be entitled to a review by the program adminis6 trator (or, if the Secretary has not contracted with

7 a program administrator, by the Secretary) of a de8 cision not to enter into, or to terminate, or not to

9 renew, an agreement with the entity to provide

10 health care items or services under the program.

11 ‘‘(7) SECRETARY’S REVIEW OF MARKETING MA12 TERIALS.—An agreement with an individual or enti13 ty furnishing services under the demonstration pro14 gram shall require the individual or entity to guar15 antee that it will not distribute materials that mar16 ket items or services under the program without the

17 Secretary’s prior review and approval.

18 ‘‘(8) PAYMENT IN FULL.—

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

20 subparagraph (B), an individual or entity re21 ceiving payment from the Secretary under a

22 contract or agreement under the demonstration

23 program shall agree to accept such payment as

24 payment in full, and such payment shall be in

25 lieu of any payments to which the individual or
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1 entity would otherwise be entitled under this

2 title.

3 ‘‘(B) COLLECTION OF DEDUCTIBLES AND

4 COINSURANCE.—Such individual or entity may

5 collect any applicable deductible or coinsurance

6 amount from a beneficiary.

7 ‘‘(b) CONTRACTS FOR PROGRAM ADMINISTRATION.—

8 ‘‘(1) IN GENERAL.—The Secretary may admin9 ister the demonstration program through a contract

10 with a program administrator in accordance with the

11 provisions of this subsection.

12 ‘‘(2) SCOPE OF PROGRAM ADMINISTRATOR CON13 TRACTS.—The Secretary may enter into such con14 tracts for a limited geographic area, or on a regional

15 or national basis.

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

17 may contract for the administration of the program

18 with—

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

20 under section 1816 or 1842, determines the

21 amount of and makes payments for health care

22 items and services furnished under this title; or

23 ‘‘(B) any other entity with substantial ex24 perience in managing the type of program con25 cerned.
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1 ‘‘(4) CONTRACT AWARD, DURATION, AND RE2 NEWAL.—

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

4 subsection shall be for an initial term of up to

5 three years, renewable for additional terms of

6 up to three years.

7 ‘‘(B) NONCOMPETITIVE AWARD AND RE8 NEWAL FOR ENTITIES ADMINISTERING PART A

9 OR PART B PAYMENTS.—The Secretary may

10 enter or renew a contract under this subsection

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

12 without regard to the requirements of section 5

13 of title 41, United States Code.

14 ‘‘(5) APPLICABILITY OF FEDERAL ACQUISITION

15 REGULATION.—The Federal Acquisition Regulation

16 shall apply to program administration contracts

17 under this subsection.

18 ‘‘(6) PERFORMANCE STANDARDS.—The Sec19 retary shall establish performance standards for the

20 program administrator including, as applicable,

21 standards for the quality and cost-effectiveness of

22 the program administered, and such other factors as

23 the Secretary finds appropriate. The eligibility of en24 tities for the initial award, continuation, and renewal

25 of program administration contracts shall be condi-
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1 tioned, at a minimum, on performance that meets or

2 exceeds such standards.

3 ‘‘(7) FUNCTIONS OF PROGRAM ADMINIS4 TRATOR.—A program administrator shall perform

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

6 the Secretary:

7 ‘‘(A) AGREEMENTS WITH ENTITIES FUR8 NISHING HEALTH CARE ITEMS AND SERV9 ICES.—Determine the qualifications of entities

10 seeking to enter or renew agreements to provide

11 services under the demonstration program, and

12 as appropriate enter or renew (or refuse to

13 enter or renew) such agreements on behalf of

14 the Secretary.

15 ‘‘(B) ESTABLISHMENT OF PAYMENT

16 RATES.—Negotiate or otherwise establish, sub17 ject to the Secretary’s approval, payment rates

18 for covered health care items and services.

19 ‘‘(C) PAYMENT OF CLAIMS OR FEES.—Ad20 minister payments for health care items or serv21 ices furnished under the program.

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

23 guidelines as the Secretary shall establish, and

24 subject to the approval of the Secretary, make

25 bonus payments as described in subsection
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1 (c)(2)(A)(ii) to entities furnishing items or serv2 ices for which payment may be made under the

3 program.

4 ‘‘(E) OVERSIGHT.—Monitor the compli5 ance of individuals and entities with agreements

6 under the program with the conditions of par7 ticipation.

8 ‘‘(F) ADMINISTRATIVE REVIEW.—Conduct

9 reviews of adverse determinations specified in

10 subsection (a)(6).

11 ‘‘(G) REVIEW OF MARKETING MATE12 RIALS.—Conduct a review of marketing mate13 rials proposed by an entity furnishing services

14 under the program.

15 ‘‘(H) ADDITIONAL FUNCTIONS.—Perform

16 such other functions as the Secretary may

17 specify.

18 ‘‘(8) LIMITATION OF LIABILITY.—The provi19 sions of section 1157(b) shall apply with respect to

20 activities of contractors and their officers, employ21 ees, and agents under a contract under this sub22 section.

23 ‘‘(9) INFORMATION SHARING.—Notwithstanding

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

25 States Code, the Secretary is authorized to disclose
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1 to an entity with a program administration contract

2 under this subsection such information (including

3 medical information) on individuals receiving health

4 care items and services under the program as the

5 entity may require to carry out its responsibilities

6 under the contract.

7 ‘‘(c) RULES APPLICABLE TO BOTH PROGRAM

8 AGREEMENTS AND PROGRAM ADMINISTRATION CON9 TRACTS.—

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

11 Secretary is authorized to require entities with

12 agreements to provide health care items or services

13 under the demonstration program, and entities with

14 program administration contracts under subsection

15 (b), to maintain adequate records, to afford the Sec16 retary access to such records (including for audit

17 purposes), and to furnish such reports and other

18 materials (including audited financial statements

19 and performance data) as the Secretary may require

20 for purposes of implementation, oversight, and eval21 uation of the program and of individuals’ and enti22 ties’ effectiveness in performance of such agreements

23 or contracts.

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

25 provision of law, but subject to subparagraph
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1 (B)(ii), the Secretary may make bonus payments

2 under the demonstration program from the Federal

3 Health Insurance Trust Fund and the Federal Sup4 plementary Medical Insurance Trust Fund in

5 amounts that do not exceed the amounts authorized

6 under the program in accordance with the following:

7 ‘‘(A) PAYMENTS TO PROGRAM ADMINIS8 TRATORS.—The Secretary may make bonus

9 payments under the program to program ad10 ministrators.

11 ‘‘(B) PAYMENTS TO ENTITIES FURNISHING

12 SERVICES.—

13 ‘‘(i) IN GENERAL.—Subject to clause

14 (ii), the Secretary may make bonus pay15 ments to individuals or entities furnishing

16 items or services for which payment may

17 be made under the demonstration pro18 gram, or may authorize the program ad19 ministrator to make such bonus payments

20 in accordance with such guidelines as the

21 Secretary shall establish and subject to the

22 Secretary’s approval.

23 ‘‘(ii) LIMITATIONS.—The Secretary

24 may condition such payments on the

25 achievement of such standards related to
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1 efficiency, improvement in processes or

2 outcomes of care, or such other factors as

3 the Secretary determines to be appropriate.

4 ‘‘(3) ANTIDISCRIMINATION LIMITATION.—The

5 Secretary shall not enter into an agreement with an

6 entity to provide health care items or services under

7 the demonstration program, or with an entity to ad8 minister the program, unless such entity guarantees

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

10 or provision of benefits under the program, for indi11 viduals eligible to be enrolled under such program,

12 based on any health status-related factor described

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

14 Act.

15 ‘‘(d) LIMITATIONS ON JUDICIAL REVIEW.—The fol16 lowing actions and determinations with respect to the

17 demonstration program shall not be subject to review by

18 a judicial or administrative tribunal:

19 ‘‘(1) Limiting the implementation of the pro20 gram under subsection (a)(2).

21 ‘‘(2) Establishment of program participation

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

23 termination of, or refusal to renew, an agreement

24 with an entity to provide health care items and serv25 ices under the program.
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1 ‘‘(3) Establishment of program administration

2 contract performance standards under subsection

3 (b)(6), the refusal to renew a program administra4 tion contract, or the noncompetitive award or re5 newal of a program administration contract under

6 subsection (b)(4)(B).

7 ‘‘(4) Establishment of payment rates, through

8 negotiation or otherwise, under a program agree9 ment or a program administration contract.

10 ‘‘(5) A determination with respect to the pro11 gram (where specifically authorized by the program

12 authority or by subsection (c)(2))—

13 ‘‘(A) as to whether cost savings have been

14 achieved, and the amount of savings; or

15 ‘‘(B) as to whether, to whom, and in what

16 amounts bonuses will be paid.

17 ‘‘(e) APPLICATION LIMITED TO PARTS A AND B.—

18 None of the provisions of this section or of the demonstra19 tion program shall apply to the programs under part C.

20 ‘‘(f ) REPORTS TO CONGRESS.—Not later than two

21 years after the date of the enactment of this section, and

22 biennially thereafter for six years, the Secretary shall re23 port to Congress on the use of authorities under the dem24 onstration program. Each report shall address the impact
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1 of the use of those authorities on expenditures, access, and

2 quality under the programs under this title.’’.

3 (b) GAO REPORT.—Not later than 2 years after the

4 date on which the demonstration project under section

5 1866A of the Social Security Act, as added by subsection

6 (a), is implemented, the Comptroller General of the United

7 States shall submit to Congress a report on such dem8 onstration project. The report shall include such rec9 ommendations with respect to changes to the demonstra10 tion project that the Comptroller General determines ap11 propriate.

12 SEC. 413. STUDY ON ENROLLMENT PROCEDURES FOR

13 GROUPS THAT RETAIN INDEPENDENT CON14 TRACTOR PHYSICIANS.

15 (a) IN GENERAL.—The Comptroller General of the

16 United States shall conduct a study of the current medi17 care enrollment process for groups that retain independent

18 contractor physicians with particular emphasis on hos19 pital-based physicians, such as emergency department

20 staffing groups. In conducting the evaluation, the Comp21 troller General shall consult with groups that retain inde22 pendent contractor physicians and shall—

23 (1) review the issuance of individual medicare

24 provider numbers and the possible medicare program

25 integrity vulnerabilities of the current process;
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1 (2) review direct and indirect costs associated

2 with the current process incurred by the medicare

3 program and groups that retain independent con4 tractor physicians;

5 (3) assess the effect on program integrity by

6 the enrollment of groups that retain independent

7 contractor hospital-based physicians; and

8 (4) develop suggested procedures for the enroll9 ment of these groups.

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

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

12 submit to Congress a report on the study conducted under

13 subsection (a).

14 Subtitle C—Other Services

15 SEC. 421. ONE-YEAR EXTENSION OF MORATORIUM ON

16 THERAPY CAPS; REPORT ON STANDARDS FOR

17 SUPERVISION OF PHYSICAL THERAPY AS18 SISTANTS.

19 (a) IN GENERAL.—Section 1833(g)(4) (42 U.S.C.

20 1395l(g)(4)) is amended by striking ‘‘2000 and 2001.’’

21 and inserting ‘‘2000, 2001, and 2002.’’.

22 (b) CONFORMING AMENDMENT TO CONTINUE FO23 CUSED MEDICAL REVIEWS OF CLAIMS DURING MORATO24 RIUM PERIOD.—Section 221(a)(2) of BBRA (113 Stat.
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1 1501A–351) is amended by striking ‘‘(under the amend2 ment made by paragraph (1)(B))’’.

3 (c) STUDY ON STANDARDS FOR SUPERVISION OF

4 PHYSICAL THERAPIST ASSISTANTS.—

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

6 Human Services shall conduct a study of the

7 implications—

8 (A) of eliminating the ‘‘in the room’’ su9 pervision requirement for medicare payment for

10 services of physical therapy assistants who are

11 supervised by physical therapists; and

12 (B) of such requirement on the cap im13 posed under section 1833(g) of the Social Secu14 rity Act (42 U.S.C. 1395l(g)) on physical ther15 apy services.

16 (2) REPORT.—Not later than 18 months after

17 the date of the enactment of this Act, the Secretary

18 shall submit to Congress a report on the study con19 ducted under paragraph (1).

20 SEC. 422. UPDATE IN RENAL DIALYSIS COMPOSITE RATE.

21 (a) UPDATE.—

22 (1) IN GENERAL.—The last sentence of section

23 1881(b)(7) (42 U.S.C. 1395rr(b)(7)) is amended by

24 striking ‘‘for such services furnished on or after

25 January 1, 2001, by 1.2 percent’’ and inserting ‘‘for
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1 such services furnished on or after January 1, 2001,

2 by 2.4 percent’’.

3 (2) PROHIBITION ON EXCEPTIONS.—

4 (A) IN GENERAL.—Subject to subpara5 graphs (B) and (C), the Secretary of Health

6 and Human Services may not provide for an ex7 ception under section 1881(b)(7) of the Social

8 Security Act (42 U.S.C. 1395rr(b)(7)) on or

9 after December 31, 2000.

10 (B) DEADLINE FOR NEW APPLICATIONS.—

11 In the case of a facility that during 2000 did

12 not file for an exception rate under such sec13 tion, the facility may submit an application for

14 an exception rate by not later than July 1,

15 2001.

16 (C) PROTECTION OF APPROVED EXCEP17 TION RATES.—Any exception rate under such

18 section in effect on December 31, 2000 (or, in

19 the case of an application under subparagraph

20 (B), as approved under such application) shall

21 continue in effect so long as such rate is greater

22 than the composite rate as updated by the

23 amendment made by paragraph (1).

24 (b) DEVELOPMENT OF ESRD MARKET BASKET.—
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1 (1) DEVELOPMENT.—The Secretary of Health

2 and Human Services shall collect data and develop

3 an ESRD market basket whereby the Secretary can

4 estimate, before the beginning of a year, the percent5 age by which the costs for the year of the mix of

6 labor and nonlabor goods and services included in

7 the ESRD composite rate under section 1881(b)(7)

8 of the Social Security Act (42 U.S.C. 1395rr(b)(7))

9 will exceed the costs of such mix of goods and serv10 ices for the preceding year. In developing such index,

11 the Secretary may take into account measures of

12 changes in—

13 (A) technology used in furnishing dialysis

14 services;

15 (B) the manner or method of furnishing

16 dialysis services; and

17 (C) the amounts by which the payments

18 under such section for all services billed by a

19 facility for a year exceed the aggregate allow20 able audited costs of such services for such fa21 cility for such year.

22 (2) REPORT.—The Secretary of Health and

23 Human Services shall submit to Congress a report

24 on the index developed under paragraph (1) no later

25 than July 1, 2002, and shall include in the report
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1 recommendations on the appropriateness of an an2 nual or periodic update mechanism for renal dialysis

3 services under the medicare program under title

4 XVIII of the Social Security Act based on such

5 index.

6 (c) INCLUSION OF ADDITIONAL SERVICES IN COM7 POSITE RATE.—

8 (1) DEVELOPMENT.—The Secretary of Health

9 and Human Services shall develop a system which

10 includes, to the maximum extent feasible, in the

11 composite rate used for payment under section

12 1881(b)(7) of the Social Security Act (42 U.S.C.

13 1395rr(b)(7)), payment for clinical diagnostic lab14 oratory tests and drugs (including drugs paid under

15 section 1881(b)(11)(B) of such Act (42 U.S.C.

16 1395rr(b)(11)(B)) that are routinely used in fur17 nishing dialysis services to medicare beneficiaries but

18 which are currently separately billable by renal dialy19 sis facilities.

20 (2) REPORT.—The Secretary shall include, as

21 part of the report submitted under subsection (b)(2),

22 a report on the system developed under paragraph

23 (1) and recommendations on the appropriateness of

24 incorporating the system into medicare payment for

25 renal dialysis services.
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1 (d) GAO STUDY ON ACCESS TO SERVICES.—

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

3 United States shall study access of medicare bene4 ficiaries to renal dialysis services. Such study shall

5 include whether there is a sufficient supply of facili6 ties to furnish needed renal dialysis services, whether

7 medicare payment levels are appropriate, taking into

8 account audited costs of facilities for all services fur9 nished, to ensure continued access to such services,

10 and improvements in access (and quality of care)

11 that may result in the increased use of long nightly

12 and short daily hemodialysis modalities.

13 (2) REPORT.—Not later than January 1, 2003,

14 the Comptroller General shall submit to Congress a

15 report on the study conducted under paragraph (1).

16 (e) SPECIAL RULE FOR PAYMENT FOR 2001.—Not17 withstanding the amendment made by subsection (a)(1),

18 for purposes of making payments under section 1881(b)

19 of the Social Security Act (42 U.S.C. 1395rr(b)) for dialy20 sis services furnished during 2001, the composite rate pay21 ment under paragraph (7) of such section—

22 (1) for services furnished on or after January

23 1, 2001, and before April 1, 2001, shall be the com24 posite rate payment determined under the provisions
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1 of law in effect on the day before the date of the en2 actment of this Act; and

3 (2) for services furnished on or after April 1,

4 2001, and before January 1, 2002, shall be the com5 posite rate payment (as determined taking into ac6 count the amendment made by subsection (a)(1)) in7 creased by a transitional percentage allowance equal

8 to 0.39 percent (to account for the timing of imple9 mentation of the CPI update).

10 SEC. 423. PAYMENT FOR AMBULANCE SERVICES.

11 (a) RESTORATION OF FULL CPI INCREASE FOR

12 2001.—

13 (1) IN GENERAL.—Section 1834(l)(3) (42

14 U.S.C. 1395m(l)(3)) is amended by striking ‘‘re15 duced in the case of 2001 and 2002’’ each place it

16 appears and inserting ‘‘reduced in the case of

17 2002’’.

18 (2) SPECIAL RULE FOR PAYMENT FOR 2001.—

19 Notwithstanding the amendment made by paragraph

20 (1), for purposes of making payments for ambulance

21 services under part B of title XVIII of the Social Se22 curity Act, for services furnished during 2001, the

23 ‘‘percentage increase in the consumer price index’’

24 specified in section 1834(l)(3)(B) of such Act (42

25 U.S.C. 1395m(l)(3)(B))—
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1 (A) for services furnished on or after Jan2 uary 1, 2001, and before July 1, 2001, shall be

3 the percentage increase for 2001 as determined

4 under the provisions of law in effect on the day

5 before the date of the enactment of this Act;

6 and

7 (B) for services furnished on or after July

8 1, 2001, and before January 1, 2002, shall be

9 equal to 4.7 percent.

10 (b) MILEAGE PAYMENTS.—

11 (1) IN GENERAL.—Section 1834(l)(2)(E) (42

12 U.S.C. 1395m(l)(2)(E)) is amended by inserting be13 fore the period at the end the following: ‘‘, except

14 that such phase-in shall provide for full payment of

15 any national mileage rate for ambulance services

16 provided by suppliers that are paid by carriers in

17 any of the 50 States where payment by a carrier for

18 such services for all such suppliers in such State did

19 not, prior to the implementation of the fee schedule,

20 include a separate amount for all mileage within the

21 county from which the beneficiary is transported’’.

22 (2) EFFECTIVE DATE.—The amendment made

23 by paragraph (1) shall apply to services furnished on

24 or after July 1, 2001.
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1 SEC. 424. AMBULATORY SURGICAL CENTERS.

2 (a) DELAY IN IMPLEMENTATION OF PROSPECTIVE

3 PAYMENT SYSTEM.—The Secretary of Health and Human

4 Services may not implement a revised prospective payment

5 system for services of ambulatory surgical facilities under

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

7 1395l(i)) before January 1, 2002.

8 (b) EXTENDING PHASE-IN TO 4 YEARS.—Section

9 226 of the BBRA (113 Stat. 1501A–354) is amended by

10 striking paragraphs (1) and (2) and inserting the fol11 lowing:

12 ‘‘(1) in the first year of its implementation,

13 only a proportion (specified by the Secretary and not

14 to exceed one-fourth) of the payment for such serv15 ices shall be made in accordance with such system

16 and the remainder shall be made in accordance with

17 current regulations; and

18 ‘‘(2) in each of the following 2 years a propor19 tion (specified by the Secretary and not to exceed

20 one-half and three-fourths, respectively) of the pay21 ment for such services shall be made under such sys22 tem and the remainder shall be made in accordance

23 with current regulations.’’.

24 (c) DEADLINE FOR USE OF 1999 OR LATER COST

25 SURVEYS.—Section 226 of BBRA (113 Stat. 1501A–354)

26 is amended by adding at the end the following:
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1 ‘‘By not later than January 1, 2003, the Secretary shall

2 incorporate data from a 1999 medicare cost survey or a

3 subsequent cost survey for purposes of implementing or

4 revising such system.’’.

5 SEC. 425. FULL UPDATE FOR DURABLE MEDICAL EQUIP6 MENT.

7 (a) IN GENERAL.—Section 1834(a)(14) (42 U.S.C.

8 1395m(a)(14)) is amended—

9 (1) by redesignating subparagraph (D) as sub10 paragraph (F);

11 (2) in subparagraph (C)—

12 (A) by striking ‘‘through 2002’’ and insert13 ing ‘‘through 2000’’; and

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

15 (3) by inserting after subparagraph (C) the fol16 lowing new subparagraphs:

17 ‘‘(D) for 2001, the percentage increase in

18 the consumer price index for all urban con19 sumers (U.S. city average) for the 12-month

20 period ending with June 2000;

21 ‘‘(E) for 2002, 0 percentage points; and’’.

22 (b) SPECIAL RULE FOR PAYMENT FOR 2001.—Not23 withstanding the amendments made by subsection (a), for

24 purposes of making payments for durable medical equip25 ment under section 1834(a) of the Social Security Act (42
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1 U.S.C. 1395m(a)), other than for oxygen and oxygen

2 equipment specified in paragraph (9) of such section, the

3 payment basis recognized for 2001 under such section—

4 (1) for items furnished on or after January 1,

5 2001, and before July 1, 2001, shall be the payment

6 basis for 2001 as determined under the provisions of

7 law in effect on the day before the date of the enact8 ment of this Act (including the application of section

9 228(a)(1) of BBRA); and

10 (2) for items furnished on or after July 1,

11 2001, and before January 1, 2002, shall be the pay12 ment basis that is determined under such section

13 1834(a) if such section 228(a)(1) did not apply and

14 taking into account the amendment made by sub15 section (a), increased by a transitional percentage al16 lowance equal to 3.28 percent (to account for the

17 timing of implementation of the CPI update).

18 SEC. 426. FULL UPDATE FOR ORTHOTICS AND PROS19 THETICS.

20 (a) IN GENERAL.—Section 1834(h)(4)(A) (42 U.S.C.

21 1395m(h)(4)(A)) is amended—

22 (1) by redesignating clause (vi) as clause (viii);

23 (2) in clause (v)—

24 (A) by striking ‘‘through 2002’’ and insert25 ing ‘‘through 2000’’; and
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1 (B) by striking ‘‘and’’ at the end; and

2 (3) by inserting after clause (v) the following

3 new clause:

4 ‘‘(vi) for 2001, the percentage in5 crease in the consumer price index for all

6 urban consumers (U.S. city average) for

7 the 12-month period ending with June

8 2000;

9 ‘‘(vii) for 2002, 1 percent; and’’.

10 (b) SPECIAL RULE FOR PAYMENT FOR 2001.—Not11 withstanding the amendments made by subsection (a), for

12 purposes of making payments for prosthetic devices and

13 orthotics and prosthetics (as defined in subparagraphs (B)

14 and (C) of paragraph (4) of section 1834(h) of the Social

15 Security Act (42 U.S.C. 1395m(h)) under such section,

16 the payment basis recognized for 2001 under paragraph

17 (2) of such section—

18 (1) for items furnished on or after January 1,

19 2001, and before July 1, 2001, shall be the payment

20 basis for 2001 as determined under the provisions of

21 law in effect on the day before the date of the enact22 ment of this Act; and

23 (2) for items furnished on or after July 1,

24 2001, and before January 1, 2002, shall be the pay25 ment basis that is determined under such section
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1 taking into account the amendments made by sub2 section (a), increased by a transitional percentage al3 lowance equal to 2.6 percent (to account for the tim4 ing of implementation of the CPI update).

5 SEC. 427. ESTABLISHMENT OF SPECIAL PAYMENT PROVI6 SIONS AND REQUIREMENTS FOR PROS7 THETICS AND CERTAIN CUSTOM-FABRICATED

8 ORTHOTIC ITEMS.

9 (a) IN GENERAL.—Section 1834(h)(1) (42 U.S.C.

10 1395m(h)(1)) is amended by adding at the end the fol11 lowing:

12 ‘‘(F) SPECIAL PAYMENT RULES FOR CER13 TAIN PROSTHETICS AND CUSTOM-FABRICATED

14 ORTHOTICS.—

15 ‘‘(i) IN GENERAL.—No payment shall

16 be made under this subsection for an item

17 of custom-fabricated orthotics described in

18 clause (ii) or for an item of prosthetics un19 less such item is—

20 ‘‘(I) furnished by a qualified

21 practitioner; and

22 ‘‘(II) fabricated by a qualified

23 practitioner or a qualified supplier at

24 a facility that meets such criteria as

25 the Secretary determines appropriate.
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1 ‘‘(ii) DESCRIPTION OF CUSTOM-FAB2 RICATED ITEM.—

3 ‘‘(I) IN GENERAL.—An item de4 scribed in this clause is an item of

5 custom-fabricated orthotics that re6 quires education, training, and experi7 ence to custom-fabricate and that is

8 included in a list established by the

9 Secretary in subclause (II). Such an

10 item does not include shoes and shoe

11 inserts.

12 ‘‘(II) LIST OF ITEMS.—The Sec13 retary, in consultation with appro14 priate experts in orthotics (including

15 national organizations representing

16 manufacturers of orthotics), shall es17 tablish and update as appropriate a

18 list of items to which this subpara19 graph applies. No item may be in20 cluded in such list unless the item is

21 individually fabricated for the patient

22 over a positive model of the patient.

23 ‘‘(iii) QUALIFIED PRACTITIONER DE24 FINED.—In this subparagraph, the term
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1 ‘qualified practitioner’ means a physician

2 or other individual who—

3 ‘‘(I) is a qualified physical thera4 pist or a qualified occupational thera5 pist;

6 ‘‘(II) in the case of a State that

7 provides for the licensing of orthotics

8 and prosthetics, is licensed in

9 orthotics or prosthetics by the State

10 in which the item is supplied; or

11 ‘‘(III) in the case of a State that

12 does not provide for the licensing of

13 orthotics and prosthetics, is specifi14 cally trained and educated to provide

15 or manage the provision of prosthetics

16 and custom-designed or -fabricated

17 orthotics, and is certified by the

18 American Board for Certification in

19 Orthotics and Prosthetics, Inc. or by

20 the Board for Orthotist/Prosthetist

21 Certification, or is credentialed and

22 approved by a program that the Sec23 retary determines, in consultation

24 with appropriate experts in orthotics

25 and prosthetics, has training and edu-
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1 cation standards that are necessary to

2 provide such prosthetics and orthotics.

3 ‘‘(iv) QUALIFIED SUPPLIER DE4 FINED.—In this subparagraph, the term

5 ‘qualified supplier’ means any entity that

6 is accredited by the American Board for

7 Certification in Orthotics and Prosthetics,

8 Inc. or by the Board for Orthotist/Pros9 thetist Certification, or accredited and ap10 proved by a program that the Secretary

11 determines has accreditation and approval

12 standards that are essentially equivalent to

13 those of such Board.’’.

14 (b) EFFECTIVE DATE.—Not later than 1 year after

15 the date of the enactment of this Act, the Secretary of

16 Health and Human Services shall promulgate revised reg17 ulations to carry out the amendment made by subsection

18 (a) using a negotiated rulemaking process under sub19 chapter III of chapter 5 of title 5, United States Code.

20 (c) GAO STUDY AND REPORT.—

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

22 United States shall conduct a study on HCFA Rul23 ing 96–1, issued on September 1, 1996, with respect

24 to distinguishing orthotics from durable medical

25 equipment under the medicare program under title
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1 XVIII of the Social Security Act. The study shall as2 sess the following matters:

3 (A) The compliance of the Secretary of

4 Health and Human Services with the Adminis5 trative Procedures Act (under chapter 5 of title

6 5, United States Code) in making such ruling.

7 (B) The potential impact of such ruling on

8 the health care furnished to medicare bene9 ficiaries under the medicare program, especially

10 those beneficiaries with degenerative musculo11 skeletal conditions.

12 (C) The potential for fraud and abuse

13 under the medicare program if payment were

14 provided for orthotics used as a component of

15 durable medical equipment only when made

16 under the special payment provision for certain

17 prosthetics and custom-fabricated orthotics

18 under section 1834(h)(1)(F) of the Social Secu19 rity Act, as added by subsection (a) and fur20 nished by qualified practitioners under that sec21 tion.

22 (D) The impact on payments under titles

23 XVIII and XIX of the Social Security Act if

24 such ruling were overturned.
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1 (2) REPORT.—Not later than 6 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).

5 SEC. 428. REPLACEMENT OF PROSTHETIC DEVICES AND

6 PARTS.

7 (a) IN GENERAL.—Section 1834(h)(1) (42 U.S.C.

8 1395m(h)(1)), as amended by section 427(a), is further

9 amended by adding at the end the following new subpara10 graph:

11 ‘‘(G) REPLACEMENT OF PROSTHETIC DE12 VICES AND PARTS.—

13 ‘‘(i) IN GENERAL.—Payment shall be

14 made for the replacement of prosthetic de15 vices which are artificial limbs, or for the

16 replacement of any part of such devices,

17 without regard to continuous use or useful

18 lifetime restrictions if an ordering physi19 cian determines that the provision of a re20 placement device, or a replacement part of

21 such a device, is necessary because of any

22 of the following:

23 ‘‘(I) A change in the physio24 logical condition of the patient.
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1 ‘‘(II) An irreparable change in

2 the condition of the device, or in a

3 part of the device.

4 ‘‘(III) The condition of the de5 vice, or the part of the device, re6 quires repairs and the cost of such re7 pairs would be more than 60 percent

8 of the cost of a replacement device, or,

9 as the case may be, of the part being

10 replaced.

11 ‘‘(ii) CONFIRMATION MAY BE RE12 QUIRED IF DEVICE OR PART BEING RE13 PLACED IS LESS THAN 3 YEARS OLD.—If a

14 physician determines that a replacement

15 device, or a replacement part, is necessary

16 pursuant to clause (i)—

17 ‘‘(I) such determination shall be

18 controlling; and

19 ‘‘(II) such replacement device or

20 part shall be deemed to be reasonable

21 and necessary for purposes of section

22 1862(a)(1)(A);

23 except that if the device, or part, being re24 placed is less than 3 years old (calculated

25 from the date on which the beneficiary
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1 began to use the device or part), the Sec2 retary may also require confirmation of ne3 cessity of the replacement device or re4 placement part, as the case may be.’’.

5 (b) PREEMPTION OF RULE.—The provisions of sec6 tion 1834(h)(1)(G) as added by subsection (a) shall super7 sede any rule that as of the date of the enactment of this

8 Act may have applied a 5-year replacement rule with re9 gard to prosthetic devices.

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

11 subsection (a) shall apply to items replaced on or after

12 April 1, 2001.

13 SEC. 429. REVISED PART B PAYMENT FOR DRUGS AND

14 BIOLOGICALS AND RELATED SERVICES.

15 (a) RECOMMENDATIONS FOR REVISED PAYMENT

16 METHODOLOGY FOR DRUGS AND BIOLOGICALS.—

17 (1) STUDY.—

18 (A) IN GENERAL.—The Comptroller Gen19 eral of the United States shall conduct a study

20 on the reimbursement for drugs and biologicals

21 under the current medicare payment method22 ology (provided under section 1842(o) of the

23 Social Security Act (42 U.S.C. 1395u(o))) and

24 for related services under part B of title XVIII
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1 of such Act. In the study, the Comptroller Gen2 eral shall—

3 (i) identify the average prices at

4 which such drugs and biologicals are ac5 quired by physicians and other suppliers;

6 (ii) quantify the difference between

7 such average prices and the reimbursement

8 amount under such section; and

9 (iii) determine the extent to which (if

10 any) payment under such part is adequate

11 to compensate physicians, providers of

12 services, or other suppliers of such drugs

13 and biologicals for costs incurred in the ad14 ministration, handling, or storage of such

15 drugs or biologicals.

16 (B) CONSULTATION.—In conducting the

17 study under subparagraph (A), the Comptroller

18 General shall consult with physicians, providers

19 of services, and suppliers of drugs and

20 biologicals under the medicare program under

21 title XVIII of such Act, as well as other organi22 zations involved in the distribution of such

23 drugs and biologicals to such physicians, pro24 viders of services, and suppliers.
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1 (2) REPORT.—Not later than 9 months after

2 the date of the enactment of this Act, the Comp3 troller General shall submit to Congress and to the

4 Secretary of Health and Human Services a report

5 on the study conducted under this subsection, and

6 shall include in such report recommendations for re7 vised payment methodologies described in paragraph

8 (3).

9 (3) RECOMMENDATIONS FOR REVISED PAY10 MENT METHODOLOGIES.—

11 (A) IN GENERAL.—The Comptroller Gen12 eral shall provide specific recommendations for

13 revised payment methodologies for reimburse14 ment for drugs and biologicals and for related

15 services under the medicare program. The

16 Comptroller General may include in the

17 recommendations—

18 (i) proposals to make adjustments

19 under subsection (c) of section 1848 of the

20 Social Security Act (42 U.S.C. 1395w–4)

21 for the practice expense component of the

22 physician fee schedule under such section

23 for the costs incurred in the administra24 tion, handling, or storage of certain cat-
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1 egories of such drugs and biologicals, if ap2 propriate; and

3 (ii) proposals for new payments to

4 providers of services or suppliers for such

5 costs, if appropriate.

6 (B) ENSURING PATIENT ACCESS TO

7 CARE.—In making recommendations under this

8 paragraph, the Comptroller General shall en9 sure that any proposed revised payment meth10 odology is designed to ensure that medicare

11 beneficiaries continue to have appropriate ac12 cess to health care services under the medicare

13 program.

14 (C) MATTERS CONSIDERED.—In making

15 recommendations under this paragraph, the

16 Comptroller General shall consider—

17 (i) the method and amount of reim18 bursement for similar drugs and biologicals

19 made by large group health plans;

20 (ii) as a result of any revised payment

21 methodology, the potential for patients to

22 receive inpatient or outpatient hospital

23 services in lieu of services in a physician’s

24 office; and
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1 (iii) the effect of any revised payment

2 methodology on the delivery of drug thera3 pies by hospital outpatient departments.

4 (D) COORDINATION WITH BBRA STUDY.—

5 In making recommendations under this para6 graph, the Comptroller General shall conclude

7 and take into account the results of the study

8 provided for under section 213(a) of BBRA

9 (113 Stat. 1501A–350).

10 (b) IMPLEMENTATION OF NEW PAYMENT METHOD11 OLOGY.—

12 (1) IN GENERAL.—Notwithstanding any other

13 provision of law, based on the recommendations con14 tained in the report under subsection (a), the Sec15 retary of Health and Human Services, subject to

16 paragraph (2), shall revise the payment methodology

17 under section 1842(o) of the Social Security Act (42

18 U.S.C. 1395u(o)) for drugs and biologicals furnished

19 under part B of the medicare program. To the ex20 tent the Secretary determines appropriate, the Sec21 retary may provide for the adjustments to payments

22 amounts referred to in subsection (a)(3)(A)(i) or ad23 ditional payments referred to in subsection

24 (a)(2)(A)(ii).
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1 (2) LIMITATION.—In revising the payment

2 methodology under paragraph (1), in no case may

3 the estimated aggregate payments for drugs and

4 biologicals under the revised system (including addi5 tional payments referred to in subsection

6 (a)(3)(A)(ii)) exceed the aggregate amount of pay7 ment for such drugs and biologicals, as projected by

8 the Secretary, that would have been made under the

9 payment methodology in effect under such section

10 1842(o).

11 (c) MORATORIUM ON DECREASES IN PAYMENT

12 RATES.—Notwithstanding any other provision of law, ef13 fective for drugs and biologicals furnished on or after Jan14 uary 1, 2001, the Secretary may not directly or indirectly

15 decrease the rates of reimbursement (in effect as of such

16 date) for drugs and biologicals under the current medicare

17 payment methodology (provided under section 1842(o) of

18 the Social Security Act (42 U.S.C. 1395u(o))) until such

19 time as the Secretary has reviewed the report submitted

20 under subsection (a)(2).

21 SEC. 430. CONTRAST ENHANCED DIAGNOSTIC PROCE22 DURES UNDER HOSPITAL PROSPECTIVE PAY23 MENT SYSTEM.

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

25 (42 U.S.C. 1395l(t)(2)) is amended—
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1 (1) by striking ‘‘and’’ at the end of subpara2 graph (E);

3 (2) by striking the period at the end of sub4 paragraph (F) and inserting ‘‘; and’’; and

5 (3) by inserting after subparagraph (F) the fol6 lowing new subparagraph:

7 ‘‘(G) the Secretary shall create additional

8 groups of covered OPD services that classify

9 separately those procedures that utilize contrast

10 agents from those that do not.’’.

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

12 (42 U.S.C. 1395x(t)(1)) is amended by inserting ‘‘(includ13 ing contrast agents)’’ after ‘‘only such drugs’’.

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

15 this section apply to items and services furnished on or

16 after July 1, 2001.

17 SEC. 431. QUALIFICATIONS FOR COMMUNITY MENTAL

18 HEALTH CENTERS.

19 (a) MEDICARE PROGRAM.—Section 1861(ff )(3)(B)

20 (42 U.S.C. 1395x(ff )(3)(B)) is amended by striking ‘‘enti21 ty’’ and all that follows and inserting the following: ‘‘entity

22 that—

23 ‘‘(i)(I) provides the mental health services de24 scribed in section 1913(c)(1) of the Public Health

25 Service Act; or
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1 ‘‘(II) in the case of an entity operating in a

2 State that by law precludes the entity from pro3 viding itself the service described in subparagraph

4 (E) of such section, provides for such service by con5 tract with an approved organization or entity (as de6 termined by the Secretary);

7 ‘‘(ii) meets applicable licensing or certification

8 requirements for community mental health centers

9 in the State in which it is located; and

10 ‘‘(iii) meets such additional conditions as the

11 Secretary shall specify to ensure (I) the health and

12 safety of individuals being furnished such services,

13 (II) the effective and efficient furnishing of such

14 services, and (III) the compliance of such entity with

15 the criteria described in section 1931(c)(1) of the

16 Public Health Service Act.’’.

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

18 subsection (a) shall apply with respect to community men19 tal health centers with respect to services furnished on or

20 after the first day of the third month beginning after the

21 date of the enactment of this Act.

22 SEC. 432. PAYMENT OF PHYSICIAN AND NONPHYSICIAN

23 SERVICES IN CERTAIN INDIAN PROVIDERS.

24 (a) IN GENERAL.—Section 1880 (42 U.S.C. 1395qq)

25 is amended—
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1 (1) by redesignating subsection (e), as added by

2 section 3(b)(1) of the Alaska Native and American

3 Indian Direct Reimbursement Act of 2000 (Public

4 Law 106–417), as subsection (f ); and

5 (2) by inserting after subsection (d) the fol6 lowing new subsection:

7 ‘‘(e)(1)(A) Notwithstanding section 1835(d), subject

8 to subparagraph (B), the Secretary shall make payment

9 under part B to a hospital or an ambulatory care clinic

10 (whether provider-based or freestanding) that is operated

11 by the Indian Health Service or by an Indian tribe or trib12 al organization (as defined for purposes of subsection (a))

13 for services described in paragraph (2) furnished in or at

14 the direction of the hospital or clinic under the same situa15 tions, terms, and conditions as would apply if the services

16 were furnished in or at the direction of such a hospital

17 or clinic that was not operated by such Service, tribe, or

18 organization.

19 ‘‘(B) Payment shall not be made for services under

20 subparagraph (A) to the extent that payment is otherwise

21 made for such services under this title.

22 ‘‘(2) The services described in this paragraph are the

23 following:

24 ‘‘(A) Services for which payment is made under

25 section 1848.
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1 ‘‘(B) Services furnished by a practitioner de2 scribed in section 1842(b)(18)(C) for which payment

3 under part B is made under a fee schedule.

4 ‘‘(C) Services furnished by a physical therapist

5 or occupational therapist as described in section

6 1861(p) for which payment under part B is made

7 under a fee schedule.

8 ‘‘(3) Subsection (c) shall not apply to payments made

9 under this subsection.’’.

10 (b) CONFORMING AMENDMENTS.—

11 (1) COVERAGE AMENDMENT.—Section

12 1862(a)(3) (42 U.S.C. 1395y(a)(3)) is amended—

13 (A) by striking the second comma after

14 ‘‘1861(aa)(1)’’; and

15 (B) by inserting ‘‘in the case of services

16 for which payment may be made under section

17 1880(e),’’ after ‘‘as defined in section

18 1861(aa)(3),’’.

19 (2) DIRECT PAYMENT AMENDMENT.—The first

20 sentence of section 1842(b)(6) (42 U.S.C.

21 1395u(b)(6)) is amended—

22 (A) by striking ‘‘and (F)’’ and inserting

23 ‘‘(F)’’; and

24 (B) by inserting before the period the fol25 lowing: ‘‘, and (G) in the case of services in a
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1 hospital or clinic to which section 1880(e) ap2 plies, payment shall be made to such hospital or

3 clinic’’.

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

5 this section shall apply to services furnished on or after

6 July 1, 2001.

7 SEC. 433. GAO STUDY ON COVERAGE OF SURGICAL FIRST

8 ASSISTING SERVICES OF CERTIFIED REG9 ISTERED NURSE FIRST ASSISTANTS.

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

11 States shall conduct a study on the effect on the medicare

12 program under title XVIII of the Social Security Act and

13 on medicare beneficiaries of coverage under the program

14 of surgical first assisting services of certified registered

15 nurse first assistants. The Comptroller General shall con16 sider the following when conducting the study:

17 (1) Any impact on the quality of care furnished

18 to medicare beneficiaries by reason of such coverage.

19 (2) Appropriate education and training require20 ments for certified registered nurse first assistants

21 who furnish such first assisting services.

22 (3) Appropriate rates of payment under the

23 program to such certified registered nurse first as24 sistants for furnishing such services, taking into ac25 count the costs of compensation, overhead, and su-
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1 pervision attributable to certified registered nurse

2 first assistants.

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

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

5 submit to Congress a report on the study conducted under

6 subsection (a).

7 SEC. 434. MEDPAC STUDY AND REPORT ON MEDICARE RE8 IMBURSEMENT FOR SERVICES PROVIDED BY

9 CERTAIN PROVIDERS.

10 (a) STUDY.—The Medicare Payment Advisory Com11 mission shall conduct a study on the appropriateness of

12 the current payment rates under the medicare program

13 under title XVIII of the Social Security Act for services

14 provided by a—

15 (1) certified nurse-midwife (as defined in sub16 section (gg)(2) of section 1861 of such Act (42

17 U.S.C. 1395x));

18 (2) physician assistant (as defined in subsection

19 (aa)(5)(A) of such section);

20 (3) nurse practitioner (as defined in such sub21 section); and

22 (4) clinical nurse specialist (as defined in sub23 section (aa)(5)(B) of such section).

24 The study shall separately examine the appropriateness of

25 such payment rates for orthopedic physician assistants,
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1 taking into consideration the requirements for accredita2 tion, training, and education.

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 determines to be appropriate

8 as a result of such study.

9 SEC. 435. MEDPAC STUDY AND REPORT ON MEDICARE COV10 ERAGE OF SERVICES PROVIDED BY CERTAIN

11 NONPHYSICIAN PROVIDERS.

12 (a) STUDY.—

13 (1) IN GENERAL.—The Medicare Payment Ad14 visory Commission shall conduct a study to deter15 mine the appropriateness of providing coverage

16 under the medicare program under title XVIII of the

17 Social Security Act for services provided by a—

18 (A) surgical technologist;

19 (B) marriage counselor;

20 (C) marriage and family therapist;

21 (D) pastoral care counselor; and

22 (E) licensed professional counselor of men23 tal health.

24 (2) COSTS TO PROGRAM.—The study shall con25 sider the short-term and long-term benefits, and
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1 costs to the medicare program, of providing the cov2 erage described in paragraph (1).

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 determines to be appropriate

8 as a result of such study.

9 SEC. 436. GAO STUDY AND REPORT ON THE COSTS OF

10 EMERGENCY AND MEDICAL TRANSPOR11 TATION SERVICES.

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

13 States shall conduct a study on the costs of providing

14 emergency and medical transportation services across the

15 range of acuity levels of conditions for which such trans16 portation services are provided.

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

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

19 shall submit to Congress a report on the study conducted

20 under subsection (a), together with recommendations for

21 any changes in methodology or payment level necessary

22 to fairly compensate suppliers of emergency and medical

23 transportation services and to ensure the access of bene24 ficiaries under the medicare program under title XVIII of

25 the Social Security Act.
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1 SEC. 437. GAO STUDIES AND REPORTS ON MEDICARE PAY2 MENTS.

3 (a) GAO STUDY ON HCFA POST-PAYMENT AUDIT

4 PROCESS.—

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

6 United States shall conduct a study on the post-pay7 ment audit process under the medicare program

8 under title XVIII of the Social Security Act as such

9 process applies to physicians, including the proper

10 level of resources that the Health Care Financing

11 Administration should devote to educating physi12 cians regarding—

13 (A) coding and billing;

14 (B) documentation requirements; and

15 (C) the calculation of overpayments.

16 (2) REPORT.—Not later than 18 months after

17 the date of the enactment of this Act, the Comp18 troller General shall submit to Congress a report on

19 the study conducted under paragraph (1) together

20 with specific recommendations for changes or im21 provements in the post-payment audit process de22 scribed in such paragraph.

23 (b) GAO STUDY ON ADMINISTRATION AND OVER24 SIGHT.—

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

26 United States shall conduct a study on the aggre-
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1 gate effects of regulatory, audit, oversight, and pa2 perwork burdens on physicians and other health care

3 providers participating in the medicare program

4 under title XVIII of the Social Security Act.

5 (2) REPORT.—Not later than 18 months after

6 the date of the enactment of this Act, the Comp7 troller General shall submit to Congress a report on

8 the study conducted under paragraph (1) together

9 with recommendations regarding any area in

10 which—

11 (A) a reduction in paperwork, an ease of

12 administration, or an appropriate change in

13 oversight and review may be accomplished; or

14 (B) additional payments or education are

15 needed to assist physicians and other health

16 care providers in understanding and complying

17 with any legal or regulatory requirements.

18 SEC. 438. MEDPAC STUDY ON ACCESS TO OUTPATIENT PAIN

19 MANAGEMENT SERVICES.

20 (a) STUDY.—The Medicare Payment Advisory Com21 mission shall conduct a study on the barriers to coverage

22 and payment for outpatient interventional pain medicine

23 procedures under the medicare program under title XVIII

24 of the Social Security Act. Such study shall examine—
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1 (1) the specific barriers imposed under the

2 medicare program on the provision of pain manage3 ment procedures in hospital outpatient departments,

4 ambulatory surgery centers, and physicians’ offices;

5 and

6 (2) the consistency of medicare payment poli7 cies for pain management procedures in those dif8 ferent settings.

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

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

11 to Congress a report on the study.

12 TITLE V—PROVISIONS

13 RELATING TO PARTS A AND B

14 Subtitle A—Home Health Services

15 SEC. 501. ONE-YEAR ADDITIONAL DELAY IN APPLICATION

16 OF 15 PERCENT REDUCTION ON PAYMENT

17 LIMITS FOR HOME HEALTH SERVICES.

18 (a) IN GENERAL.—Section 1895(b)(3)(A)(i) (42

19 U.S.C. 1395fff(b)(3)(A)(i)) is amended—

20 (1) by redesignating subclause (II) as subclause

21 (III);

22 (2) in subclause (III), as redesignated, by strik23 ing ‘‘described in subclause (I)’’ and inserting ‘‘de24 scribed in subclause (II)’’; and
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1 (3) by inserting after subclause (I) the fol2 lowing new subclause:

3 ‘‘(II) For the 12-month period

4 beginning after the period described

5 in subclause (I), such amount (or

6 amounts) shall be equal to the amount

7 (or amounts) determined under sub8 clause (I), updated under subpara9 graph (B).’’.

10 (b) CHANGE IN REPORT.—Section 302(c) of BBRA

11 (113 Stat. 1501A–360) is amended—

12 (1) by striking ‘‘Not later than’’ and all that

13 follows through ‘‘(42 U.S.C. 1395fff )’’ and inserting

14 ‘‘Not later than April 1, 2002’’; and

15 (2) by striking ‘‘Secretary’’ and inserting

16 ‘‘Comptroller General of the United States’’.

17 (c) CASE MIX ADJUSTMENT CORRECTIONS.—

18 (1) IN GENERAL.—Section 1895(b)(3)(B) (42

19 U.S.C. 1395fff(b)(3)(B)) is amended by adding at

20 the end the following new clause:

21 ‘‘(iv) ADJUSTMENT FOR CASE MIX

22 CHANGES.—Insofar as the Secretary deter23 mines that the adjustments under para24 graph (4)(A)(i) for a previous fiscal year

25 (or estimates that such adjustments for a
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1 future fiscal year) did (or are likely to) re2 sult in a change in aggregate payments

3 under this subsection during the fiscal year

4 that are a result of changes in the coding

5 or classification of different units of serv6 ices that do not reflect real changes in case

7 mix, the Secretary may adjust the stand8 ard prospective payment amount (or

9 amounts) under paragraph (3) for subse10 quent fiscal years so as to eliminate the ef11 fect of such coding or classification

12 changes.’’.

13 (2) EFFECTIVE DATE.—The amendment made

14 by paragraph (1) shall apply to episodes concluding

15 on or after October 1, 2001.

16 SEC. 502. RESTORATION OF FULL HOME HEALTH MARKET

17 BASKET UPDATE FOR HOME HEALTH SERV18 ICES FOR FISCAL YEAR 2001.

19 (a) IN GENERAL.—Section 1861(v)(1)(L)(x) (42

20 U.S.C. 1395x(v)(1)(L)(x)) is amended—

21 (1) by striking ‘‘2001,’’; and

22 (2) by adding at the end the following: ‘‘With

23 respect to cost reporting periods beginning during

24 fiscal year 2001, the update to any limit under this
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1 subparagraph shall be the home health market bas2 ket index.’’.

3 (b) SPECIAL RULE FOR PAYMENT FOR FISCAL YEAR

4 2001 BASED ON ADJUSTED PROSPECTIVE PAYMENT

5 AMOUNTS.—

6 (1) IN GENERAL.—Notwithstanding the amend7 ments made by subsection (a), for purposes of mak8 ing payments under section 1895(b) of the Social

9 Security Act (42 U.S.C. 1395fff(b)) for home health

10 services furnished during fiscal year 2001, the Sec11 retary of Health and Human Services shall—

12 (A) with respect to episodes and visits end13 ing on or after October 1, 2000, and before

14 April 1, 2001, use the final standardized and

15 budget neutral prospective payment amounts

16 for 60-day episodes and standardized average

17 per visit amounts for fiscal year 2001 as pub18 lished by the Secretary in the Federal Register

19 on July 3, 2000 (65 Fed. Reg. 41128–41214);

20 and

21 (B) with respect to episodes and visits end22 ing on or after April 1, 2001, and before Octo23 ber 1, 2001, use such amounts increased by 2.2

24 percent.
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1 (2) NO EFFECT ON OTHER PAYMENTS OR DE2 TERMINATIONS.—The Secretary shall not take the

3 provisions of paragraph (1) into account for pur4 poses of payments, determinations, or budget neu5 trality adjustments under section 1895 of the Social

6 Security Act.

7 SEC. 503. TEMPORARY TWO-MONTH PERIODIC INTERIM

8 PAYMENT.

9 (a) IN GENERAL.—Notwithstanding the amendments

10 made by section 4603(b) of BBA (42 U.S.C. 1395fff

11 note), in the case of a home health agency that was receiv12 ing periodic interim payments under section 1815(e)(2) of

13 the Social Security Act (42 U.S.C. 1395g(e)(2)) as of Sep14 tember 30, 2000, and that is not described in subsection

15 (b), the Secretary of Health and Human Services shall,

16 as soon as practicable, make a single periodic interim pay17 ment to such agency in an amount equal to four times

18 the last full fortnightly periodic interim payment made to

19 such agency under the payment system in effect prior to

20 the implementation of the prospective payment system

21 under section 1895(b) of such Act (42 U.S.C. 1395fff(b)).

22 Such amount of such periodic interim payment shall be

23 included in the tentative settlement of the last cost report

24 for the home health agency under the payment system in

25 effect prior to the implementation of such prospective pay-
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1 ment system, regardless of the ending date of such cost

2 report.

3 (b) EXCEPTIONS.—The Secretary shall not make an

4 additional periodic interim payment under subsection (a)

5 in the case of a home health agency (determined as of

6 the day that such payment would otherwise be made)

7 that—

8 (1) notifies the Secretary that such agency does

9 not want to receive such payment;

10 (2) is not receiving payments pursuant to sec11 tion 405.371 of title 42, Code of Federal Regula12 tions;

13 (3) is excluded from the medicare program

14 under title XI of the Social Security Act;

15 (4) no longer has a provider agreement under

16 section 1866 of such Act (42 U.S.C. 1395cc);

17 (5) is no longer in business; or

18 (6) is subject to a court order providing for the

19 withholding of medicare payments under title XVIII

20 of such Act.

21 SEC. 504. USE OF TELEHEALTH IN DELIVERY OF HOME

22 HEALTH SERVICES.

23 Section 1895 (42 U.S.C. 1395fff ) is amended by

24 adding at the end the following new subsection:
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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 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 1835(a)(2)(A) of such Act (42

21 U.S.C. 1395f(a)(2)(C), 1395n(a)(2)(A)) for the pay22 ment for home health services, whether or not fur23 nished via a telecommunications system.’’.
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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 of 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 August 15, 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
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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 heath agency’s branch office status under paragraph

13 (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-
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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
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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 home health services

21 furnished on or after the date of the enactment of

22 this Act.

23 (b) STUDY.—

24 (1) IN GENERAL.—The Comptroller General of

25 the United States shall conduct an evaluation of the
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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) 24-MONTH INCREASE BEGINNING APRIL 1,

11 2001.—In the case of home health services furnished in

12 a rural area (as defined in section 1886(d)(2)(D) of the

13 Social Security Act (42 U.S.C. 1395ww(d)(2)(D))) on or

14 after April 1, 2001, and before April 1, 2003, the Sec15 retary of Health and Human Services shall increase the

16 payment amount otherwise made under section 1895 of

17 such Act (42 U.S.C. 1395fff ) for such services by 10 per18 cent.

19 (b) WAIVING BUDGET NEUTRALITY.—The Secretary

20 shall not reduce the standard prospective payment amount

21 (or amounts) under section 1895 of the Social Security

22 Act (42 U.S.C. 1395fff ) applicable to home health services

23 furnished during a period to offset the increase in pay24 ments resulting from the application of subsection (a).
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1 Subtitle B—Direct Graduate

2 Medical Education

3 SEC. 511. INCREASE IN FLOOR FOR DIRECT GRADUATE

4 MEDICAL EDUCATION PAYMENTS.

5 Section 1886(h)(2)(D)(iii) (42 U.S.C.

6 1395ww(h)(2)(D)(iii)) is amended—

7 (1) in the heading, by striking ‘‘IN FISCAL YEAR

8 2001 AT 70 PERCENT OF’’ and inserting ‘‘FOR’’; and

9 (2) by inserting after ‘‘70 percent’’ the fol10 lowing: ‘‘, and for the cost reporting period begin11 ning during fiscal year 2002 shall not be less than

12 85 percent,’’.

13 SEC. 512. CHANGE IN DISTRIBUTION FORMULA FOR

14 MEDICARE+CHOICE-RELATED NURSING AND

15 ALLIED HEALTH EDUCATION COSTS.

16 (a) IN GENERAL.—Section 1886(l)(2)(C) (42 U.S.C.

17 1395ww(l)(2)(C)) is amended by striking all that follows

18 ‘‘multiplied by’’ and inserting the following: ‘‘the ratio

19 of—

20 ‘‘(i) the product of (I) the Secretary’s

21 estimate of the ratio of the amount of pay22 ments made under section 1861(v) to the

23 hospital for nursing and allied health edu24 cation activities for the hospital’s cost re25 porting period ending in the second pre-
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1 ceding fiscal year, to the hospital’s total in2 patient days for such period, and (II) the

3 total number of inpatient days (as estab4 lished by the Secretary) for such period

5 which are attributable to services furnished

6 to individuals who are enrolled under a

7 risk sharing contract with an eligible orga8 nization under section 1876 and who are

9 entitled to benefits under part A or who

10 are enrolled with a Medicare+Choice orga11 nization under part C; to

12 ‘‘(ii) the sum of the products deter13 mined under clause (i) for such cost re14 porting periods.’’.

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

16 subsection (a) shall apply to portions of cost reporting pe17 riods occurring on or after January 1, 2001.

18 Subtitle C—Changes in Medicare

19 Coverage and Appeals Process

20 SEC. 521. REVISIONS TO MEDICARE APPEALS PROCESS.

21 (a) CONDUCT OF RECONSIDERATIONS OF DETER22 MINATIONS BY INDEPENDENT CONTRACTORS.—Section

23 1869 (42 U.S.C. 1395ff ) is amended to read as follows:

24 ‘‘DETERMINATIONS; APPEALS

25 ‘‘SEC. 1869. (a) INITIAL DETERMINATIONS.—
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1 ‘‘(1) PROMULGATIONS OF REGULATIONS.—The

2 Secretary shall promulgate regulations and make ini3 tial determinations with respect to benefits under

4 part A or part B in accordance with those regula5 tions for the following:

6 ‘‘(A) The initial determination of whether

7 an individual is entitled to benefits under such

8 parts.

9 ‘‘(B) The initial determination of the

10 amount of benefits available to the individual

11 under such parts.

12 ‘‘(C) Any other initial determination with

13 respect to a claim for benefits under such parts,

14 including an initial determination by the Sec15 retary that payment may not be made, or may

16 no longer be made, for an item or service under

17 such parts, an initial determination made by a

18 utilization and quality control peer review orga19 nization under section 1154(a)(2), and an ini20 tial determination made by an entity pursuant

21 to a contract (other than a contract under sec22 tion 1852) with the Secretary to administer

23 provisions of this title or title XI.

24 ‘‘(2) DEADLINES FOR MAKING INITIAL DETER25 MINATIONS.—
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1 ‘‘(A) IN GENERAL.—Subject to subpara2 graph (B), in promulgating regulations under

3 paragraph (1), initial determinations shall be

4 concluded by not later than the 45-day period

5 beginning on the date the fiscal intermediary or

6 the carrier, as the case may be, receives a claim

7 for benefits from an individual as described in

8 paragraph (1). Notice of such determination

9 shall be mailed to the individual filing the claim

10 before the conclusion of such 45-day period.

11 ‘‘(B) CLEAN CLAIMS.—Subparagraph (A)

12 shall not apply with respect to any claim that

13 is subject to the requirements of section

14 1816(c)(2) or 1842(c)(2).

15 ‘‘(3) REDETERMINATIONS.—

16 ‘‘(A) IN GENERAL.—In promulgating regu17 lations under paragraph (1) with respect to ini18 tial determinations, such regulations shall pro19 vide for a fiscal intermediary or a carrier to

20 make a redetermination with respect to a claim

21 for benefits that is denied in whole or in part.

22 ‘‘(B) LIMITATIONS.—

23 ‘‘(i) APPEAL RIGHTS.—No initial de24 termination may be reconsidered or ap25 pealed under subsection (b) unless the fis-
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1 cal intermediary or carrier has made a re2 determination of that initial determination

3 under this paragraph.

4 ‘‘(ii) DECISIONMAKER.—No redeter5 mination may be made by any individual

6 involved in the initial determination.

7 ‘‘(C) DEADLINES.—

8 ‘‘(i) FILING FOR REDETERMINA9 TION.—A redetermination under subpara10 graph (A) shall be available only if notice

11 is filed with the Secretary to request the

12 redetermination by not later than the end

13 of the 120-day period beginning on the

14 date the individual receives notice of the

15 initial determination under paragraph (2).

16 ‘‘(ii) CONCLUDING REDETERMINA17 TIONS.—Redeterminations shall be con18 cluded by not later than the 30-day period

19 beginning on the date the fiscal inter20 mediary or the carrier, as the case may be,

21 receives a request for a redetermination.

22 Notice of such determination shall be

23 mailed to the individual filing the claim be24 fore the conclusion of such 30-day period.
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1 ‘‘(D) CONSTRUCTION.—For purposes of

2 the succeeding provisions of this section a rede3 termination under this paragraph shall be con4 sidered to be part of the initial determination.

5 ‘‘(b) APPEAL RIGHTS.—

6 ‘‘(1) IN GENERAL.—

7 ‘‘(A) RECONSIDERATION OF INITIAL DE8 TERMINATION.—Subject to subparagraph (D),

9 any individual dissatisfied with any initial de10 termination under subsection (a)(1) shall be en11 titled to reconsideration of the determination,

12 and, subject to subparagraphs (D) and (E), a

13 hearing thereon by the Secretary to the same

14 extent as is provided in section 205(b) and to

15 judicial review of the Secretary’s final decision

16 after such hearing as is provided in section

17 205(g). For purposes of the preceding sentence,

18 any reference to the ‘Commissioner of Social

19 Security’ or the ‘Social Security Administration’

20 in subsection (g) or (l) of section 205 shall be

21 considered a reference to the ‘Secretary’ or the

22 ‘Department of Health and Human Services’,

23 respectively.

24 ‘‘(B) REPRESENTATION BY PROVIDER OR

25 SUPPLIER.—
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1 ‘‘(i) IN GENERAL.—Sections 206(a),

2 1102, and 1871 shall not be construed as

3 authorizing the Secretary to prohibit an in4 dividual from being represented under this

5 section by a person that furnishes or sup6 plies the individual, directly or indirectly,

7 with services or items, solely on the basis

8 that the person furnishes or supplies the

9 individual with such a service or item.

10 ‘‘(ii) MANDATORY WAIVER OF RIGHT

11 TO PAYMENT FROM BENEFICIARY.—Any

12 person that furnishes services or items to

13 an individual may not represent an indi14 vidual under this section with respect to

15 the issue described in section 1879(a)(2)

16 unless the person has waived any rights for

17 payment from the beneficiary with respect

18 to the services or items involved in the ap19 peal.

20 ‘‘(iii) PROHIBITION ON PAYMENT FOR

21 REPRESENTATION.—If a person furnishes

22 services or items to an individual and rep23 resents the individual under this section,

24 the person may not impose any financial li-
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1 ability on such individual in connection

2 with such representation.

3 ‘‘(iv) REQUIREMENTS FOR REP4 RESENTATIVES OF A BENEFICIARY.—The

5 provisions of section 205( j) and of section

6 206 (other than subsection (a)(4) of such

7 section) regarding representation of claim8 ants shall apply to representation of an in9 dividual with respect to appeals under this

10 section in the same manner as they apply

11 to representation of an individual under

12 those sections.

13 ‘‘(C) SUCCESSION OF RIGHTS IN CASES OF

14 ASSIGNMENT.—The right of an individual to an

15 appeal under this section with respect to an

16 item or service may be assigned to the provider

17 of services or supplier of the item or service

18 upon the written consent of such individual

19 using a standard form established by the Sec20 retary for such an assignment.

21 ‘‘(D) TIME LIMITS FOR FILING APPEALS.—

22 ‘‘(i) RECONSIDERATIONS.—Reconsid23 eration under subparagraph (A) shall be

24 available only if the individual described in

25 subparagraph (A) files notice with the Sec-
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1 retary to request reconsideration by not

2 later than the end of the 180-day period

3 beginning on the date the individual re4 ceives notice of the redetermination under

5 subsection (a)(3), or within such additional

6 time as the Secretary may allow.

7 ‘‘(ii) HEARINGS CONDUCTED BY THE

8 SECRETARY.—The Secretary shall establish

9 in regulations time limits for the filing of

10 a request for a hearing by the Secretary in

11 accordance with provisions in sections 205

12 and 206.

13 ‘‘(E) AMOUNTS IN CONTROVERSY.—

14 ‘‘(i) IN GENERAL.—A hearing (by the

15 Secretary) shall not be available to an indi16 vidual under this section if the amount in

17 controversy is less than $100, and judicial

18 review shall not be available to the indi19 vidual if the amount in controversy is less

20 than $1,000.

21 ‘‘(ii) AGGREGATION OF CLAIMS.—In

22 determining the amount in controversy, the

23 Secretary, under regulations, shall allow

24 two or more appeals to be aggregated if

25 the appeals involve—
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1 ‘‘(I) the delivery of similar or re2 lated services to the same individual

3 by one or more providers of services

4 or suppliers, or

5 ‘‘(II) common issues of law and

6 fact arising from services furnished to

7 two or more individuals by one or

8 more providers of services or sup9 pliers.

10 ‘‘(F) EXPEDITED PROCEEDINGS.—

11 ‘‘(i) EXPEDITED DETERMINATION.—

12 In the case of an individual who has re13 ceived notice from a provider of services

14 that such provider plans—

15 ‘‘(I) to terminate services pro16 vided to an individual and a physician

17 certifies that failure to continue the

18 provision of such services is likely to

19 place the individual’s health at signifi20 cant risk, or

21 ‘‘(II) to discharge the individual

22 from the provider of services,

23 the individual may request, in writing or

24 orally, an expedited determination or an

25 expedited reconsideration of an initial de-
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1 termination made under subsection (a)(1),

2 as the case may be, and the Secretary shall

3 provide such expedited determination or

4 expedited reconsideration.

5 ‘‘(ii) EXPEDITED HEARING.—In a

6 hearing by the Secretary under this sec7 tion, in which the moving party alleges

8 that no material issues of fact are in dis9 pute, the Secretary shall make an expe10 dited determination as to whether any such

11 facts are in dispute and, if not, shall

12 render a decision expeditiously.

13 ‘‘(G) REOPENING AND REVISION OF DE14 TERMINATIONS.—The Secretary may reopen or

15 revise any initial determination or reconsidered

16 determination described in this subsection

17 under guidelines established by the Secretary in

18 regulations.

19 ‘‘(c) CONDUCT OF RECONSIDERATIONS BY INDE20 PENDENT CONTRACTORS.—

21 ‘‘(1) IN GENERAL.—The Secretary shall enter

22 into contracts with qualified independent contractors

23 to conduct reconsiderations of initial determinations

24 made under subparagraphs (B) and (C) of sub25 section (a)(1). Contracts shall be for an initial term
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1 of three years and shall be renewable on a triennial

2 basis thereafter.

3 ‘‘(2) QUALIFIED INDEPENDENT CON4 TRACTOR.—For purposes of this subsection, the

5 term ‘qualified independent contractor’ means an en6 tity or organization that is independent of any orga7 nization under contract with the Secretary that

8 makes initial determinations under subsection

9 (a)(1), and that meets the requirements established

10 by the Secretary consistent with paragraph (3).

11 ‘‘(3) REQUIREMENTS.—Any qualified inde12 pendent contractor entering into a contract with the

13 Secretary under this subsection shall meet all of the

14 following requirements:

15 ‘‘(A) IN GENERAL.—The qualified inde16 pendent contractor shall perform such duties

17 and functions and assume such responsibilities

18 as may be required by the Secretary to carry

19 out the provisions of this subsection, and shall

20 have sufficient training and expertise in medical

21 science and legal matters to make reconsider22 ations under this subsection.

23 ‘‘(B) RECONSIDERATIONS.—

24 ‘‘(i) IN GENERAL.—The qualified

25 independent contractor shall review initial
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1 determinations. Where an initial deter2 mination is made with respect to whether

3 an item or service is reasonable and nec4 essary for the diagnosis or treatment of ill5 ness or injury (under section

6 1862(a)(1)(A)), such review shall include

7 consideration of the facts and cir8 cumstances of the initial determination by

9 a panel of physicians or other appropriate

10 health care professionals and any decisions

11 with respect to the reconsideration shall be

12 based on applicable information, including

13 clinical experience and medical, technical,

14 and scientific evidence.

15 ‘‘(ii) EFFECT OF NATIONAL AND

16 LOCAL COVERAGE DETERMINATIONS.—

17 ‘‘(I) NATIONAL COVERAGE DE18 TERMINATIONS.—If the Secretary has

19 made a national coverage determina20 tion pursuant to the requirements es21 tablished under the third sentence of

22 section 1862(a), such determination

23 shall be binding on the qualified inde24 pendent contractor in making a deci-
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1 sion with respect to a reconsideration

2 under this section.

3 ‘‘(II) LOCAL COVERAGE DETER4 MINATIONS.—If the Secretary has

5 made a local coverage determination,

6 such determination shall not be bind7 ing on the qualified independent con8 tractor in making a decision with re9 spect to a reconsideration under this

10 section. Notwithstanding the previous

11 sentence, the qualified independent

12 contractor shall consider the local cov13 erage determination in making such

14 decision.

15 ‘‘(III) ABSENCE OF NATIONAL OR

16 LOCAL COVERAGE DETERMINATION.—

17 In the absence of such a national cov18 erage determination or local coverage

19 determination, the qualified inde20 pendent contractor shall make a deci21 sion with respect to the reconsider22 ation based on applicable information,

23 including clinical experience and med24 ical, technical, and scientific evidence.

25 ‘‘(C) DEADLINES FOR DECISIONS.—
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1 ‘‘(i) RECONSIDERATIONS.—Except as

2 provided in clauses (iii) and (iv), the quali3 fied independent contractor shall conduct

4 and conclude a reconsideration under sub5 paragraph (B), and mail the notice of the

6 decision with respect to the reconsideration

7 by not later than the end of the 30-day pe8 riod beginning on the date a request for

9 reconsideration has been timely filed.

10 ‘‘(ii) CONSEQUENCES OF FAILURE TO

11 MEET DEADLINE.—In the case of a failure

12 by the qualified independent contractor to

13 mail the notice of the decision by the end

14 of the period described in clause (i) or to

15 provide notice by the end of the period de16 scribed in clause (iii), as the case may be,

17 the party requesting the reconsideration or

18 appeal may request a hearing before the

19 Secretary, notwithstanding any require20 ments for a reconsidered determination for

21 purposes of the party’s right to such hear22 ing.

23 ‘‘(iii) EXPEDITED RECONSIDER24 ATIONS.—The qualified independent con25 tractor shall perform an expedited recon-
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1 sideration under subsection (b)(1)(F) as

2 follows:

3 ‘‘(I) DEADLINE FOR DECISION.—

4 Notwithstanding section 216( j) and

5 subject to clause (iv), not later than

6 the end of the 72-hour period begin7 ning on the date the qualified inde8 pendent contractor has received a re9 quest for such reconsideration and has

10 received such medical or other records

11 needed for such reconsideration, the

12 qualified independent contractor shall

13 provide notice (by telephone and in

14 writing) to the individual and the pro15 vider of services and attending physi16 cian of the individual of the results of

17 the reconsideration. Such reconsider18 ation shall be conducted regardless of

19 whether the provider of services or

20 supplier will charge the individual for

21 continued services or whether the indi22 vidual will be liable for payment for

23 such continued services.

24 ‘‘(II) CONSULTATION WITH BEN25 EFICIARY.—In such reconsideration,
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1 the qualified independent contractor

2 shall solicit the views of the individual

3 involved.

4 ‘‘(III) SPECIAL RULE FOR HOS5 PITAL DISCHARGES.—A reconsider6 ation of a discharge from a hospital

7 shall be conducted under this clause

8 in accordance with the provisions of

9 paragraphs (2), (3), and (4) of section

10 1154(e) as in effect on the date that

11 precedes the date of the enactment of

12 this subparagraph.

13 ‘‘(iv) EXTENSION.—An individual re14 questing a reconsideration under this sub15 paragraph may be granted such additional

16 time as the individual specifies (not to ex17 ceed 14 days) for the qualified independent

18 contractor to conclude the reconsideration.

19 The individual may request such additional

20 time orally or in writing.

21 ‘‘(D) LIMITATION ON INDIVIDUAL REVIEW22 ING DETERMINATIONS.—

23 ‘‘(i) PHYSICIANS AND HEALTH CARE

24 PROFESSIONAL.—No physician or health

25 care professional under the employ of a
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1 qualified independent contractor may

2 review—

3 ‘‘(I) determinations regarding

4 health care services furnished to a pa5 tient if the physician or health care

6 professional was directly responsible

7 for furnishing such services; or

8 ‘‘(II) determinations regarding

9 health care services provided in or by

10 an institution, organization, or agen11 cy, if the physician or any member of

12 the family of the physician or health

13 care professional has, directly or indi14 rectly, a significant financial interest

15 in such institution, organization, or

16 agency.

17 ‘‘(ii) FAMILY DESCRIBED.—For pur18 poses of this paragraph, the family of a

19 physician or health care professional in20 cludes the spouse (other than a spouse who

21 is legally separated from the physician or

22 health care professional under a decree of

23 divorce or separate maintenance), children

24 (including stepchildren and legally adopted

25 children), grandchildren, parents, and
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1 grandparents of the physician or health

2 care professional.

3 ‘‘(E) EXPLANATION OF DECISION.—Any

4 decision with respect to a reconsideration of a

5 qualified independent contractor shall be in

6 writing, and shall include a detailed explanation

7 of the decision as well as a discussion of the

8 pertinent facts and applicable regulations ap9 plied in making such decision, and in the case

10 of a determination of whether an item or serv11 ice is reasonable and necessary for the diag12 nosis or treatment of illness or injury (under

13 section 1862(a)(1)(A)) an explanation of the

14 medical and scientific rationale for the decision.

15 ‘‘(F) NOTICE REQUIREMENTS.—Whenever

16 a qualified independent contractor makes a de17 cision with respect to a reconsideration under

18 this subsection, the qualified independent con19 tractor shall promptly notify the entity respon20 sible for the payment of claims under part A or

21 part B of such decision.

22 ‘‘(G) DISSEMINATION OF DECISIONS ON

23 RECONSIDERATIONS.—Each qualified inde24 pendent contractor shall make available all deci25 sions with respect to reconsiderations of such
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1 qualified independent contractors to fiscal inter2 mediaries (under section 1816), carriers (under

3 section 1842), peer review organizations (under

4 part B of title XI), Medicare+Choice organiza5 tions offering Medicare+Choice plans under

6 part C, other entities under contract with the

7 Secretary to make initial determinations under

8 part A or part B or title XI, and to the public.

9 The Secretary shall establish a methodology

10 under which qualified independent contractors

11 shall carry out this subparagraph.

12 ‘‘(H) ENSURING CONSISTENCY IN DECI13 SIONS.—Each qualified independent contractor

14 shall monitor its decisions with respect to re15 considerations to ensure the consistency of such

16 decisions with respect to requests for reconsid17 eration of similar or related matters.

18 ‘‘(I) DATA COLLECTION.—

19 ‘‘(i) IN GENERAL.—Consistent with

20 the requirements of clause (ii), a qualified

21 independent contractor shall collect such

22 information relevant to its functions, and

23 keep and maintain such records in such

24 form and manner as the Secretary may re25 quire to carry out the purposes of this sec-
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1 tion and shall permit access to and use of

2 any such information and records as the

3 Secretary may require for such purposes.

4 ‘‘(ii) TYPE OF DATA COLLECTED.—

5 Each qualified independent contractor

6 shall keep accurate records of each deci7 sion made, consistent with standards es8 tablished by the Secretary for such pur9 pose. Such records shall be maintained in

10 an electronic database in a manner that

11 provides for identification of the following:

12 ‘‘(I) Specific claims that give rise

13 to appeals.

14 ‘‘(II) Situations suggesting the

15 need for increased education for pro16 viders of services, physicians, or sup17 pliers.

18 ‘‘(III) Situations suggesting the

19 need for changes in national or local

20 coverage policy.

21 ‘‘(IV) Situations suggesting the

22 need for changes in local medical re23 view policies.

24 ‘‘(iii) ANNUAL REPORTING.—Each

25 qualified independent contractor shall sub-
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1 mit annually to the Secretary (or otherwise

2 as the Secretary may request) records

3 maintained under this paragraph for the

4 previous year.

5 ‘‘(J) HEARINGS BY THE SECRETARY.—The

6 qualified independent contractor shall (i) pre7 pare such information as is required for an ap8 peal of a decision of the contractor with respect

9 to a reconsideration to the Secretary for a hear10 ing, including as necessary, explanations of

11 issues involved in the decision and relevant poli12 cies, and (ii) participate in such hearings as re13 quired by the Secretary.

14 ‘‘(4) NUMBER OF QUALIFIED INDEPENDENT

15 CONTRACTORS.—The Secretary shall enter into con16 tracts with not fewer than 12 qualified independent

17 contractors under this subsection.

18 ‘‘(5) LIMITATION ON QUALIFIED INDEPENDENT

19 CONTRACTOR LIABILITY.—No qualified independent

20 contractor having a contract with the Secretary

21 under this subsection and no person who is em22 ployed by, or who has a fiduciary relationship with,

23 any such qualified independent contractor or who

24 furnishes professional services to such qualified inde25 pendent contractor, shall be held by reason of the
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1 performance of any duty, function, or activity re2 quired or authorized pursuant to this subsection or

3 to a valid contract entered into under this sub4 section, to have violated any criminal law, or to be

5 civilly liable under any law of the United States or

6 of any State (or political subdivision thereof ) pro7 vided due care was exercised in the performance of

8 such duty, function, or activity.

9 ‘‘(d) DEADLINES FOR HEARINGS BY THE SEC10 RETARY.—

11 ‘‘(1) HEARING BY ADMINISTRATIVE LAW

12 JUDGE.—

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

14 subparagraph (B), an administrative law judge

15 shall conduct and conclude a hearing on a deci16 sion of a qualified independent contractor under

17 subsection (c) and render a decision on such

18 hearing by not later than the end of the 90-day

19 period beginning on the date a request for hear20 ing has been timely filed.

21 ‘‘(B) WAIVER OF DEADLINE BY PARTY

22 SEEKING HEARING.—The 90-day period under

23 subparagraph (A) shall not apply in the case of

24 a motion or stipulation by the party requesting

25 the hearing to waive such period.
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1 ‘‘(2) DEPARTMENTAL APPEALS BOARD RE2 VIEW.—

3 ‘‘(A) IN GENERAL.—The Departmental

4 Appeals Board of the Department of Health

5 and Human Services shall conduct and conclude

6 a review of the decision on a hearing described

7 in paragraph (1) and make a decision or re8 mand the case to the administrative law judge

9 for reconsideration by not later than the end of

10 the 90-day period beginning on the date a re11 quest for review has been timely filed.

12 ‘‘(B) DAB HEARING PROCEDURE.—In re13 viewing a decision on a hearing under this para14 graph, the Departmental Appeals Board shall

15 review the case de novo.

16 ‘‘(3) CONSEQUENCES OF FAILURE TO MEET

17 DEADLINES.—

18 ‘‘(A) HEARING BY ADMINISTRATIVE LAW

19 JUDGE.—In the case of a failure by an adminis20 trative law judge to render a decision by the

21 end of the period described in paragraph (1),

22 the party requesting the hearing may request a

23 review by the Departmental Appeals Board of

24 the Department of Health and Human Services,

25 notwithstanding any requirements for a hearing
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1 for purposes of the party’s right to such a re2 view.

3 ‘‘(B) DEPARTMENTAL APPEALS BOARD RE4 VIEW.—In the case of a failure by the Depart5 mental Appeals Board to render a decision by

6 the end of the period described in paragraph

7 (2), the party requesting the hearing may seek

8 judicial review, notwithstanding any require9 ments for a hearing for purposes of the party’s

10 right to such judicial review.

11 ‘‘(e) ADMINISTRATIVE PROVISIONS.—

12 ‘‘(1) LIMITATION ON REVIEW OF CERTAIN REG13 ULATIONS.—A regulation or instruction that relates

14 to a method for determining the amount of payment

15 under part B and that was initially issued before

16 January 1, 1981, shall not be subject to judicial re17 view.

18 ‘‘(2) OUTREACH.—The Secretary shall perform

19 such outreach activities as are necessary to inform

20 individuals entitled to benefits under this title and

21 providers of services and suppliers with respect to

22 their rights of, and the process for, appeals made

23 under this section. The Secretary shall use the toll24 free telephone number maintained by the Secretary

25 under section 1804(b) to provide information re-
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1 garding appeal rights and respond to inquiries re2 garding the status of appeals.

3 ‘‘(3) CONTINUING EDUCATION REQUIREMENT

4 FOR QUALIFIED INDEPENDENT CONTRACTORS AND

5 ADMINISTRATIVE LAW JUDGES.—The Secretary shall

6 provide to each qualified independent contractor,

7 and, in consultation with the Commissioner of Social

8 Security, to administrative law judges that decide

9 appeals of reconsiderations of initial determinations

10 or other decisions or determinations under this sec11 tion, such continuing education with respect to cov12 erage of items and services under this title or poli13 cies of the Secretary with respect to part B of title

14 XI as is necessary for such qualified independent

15 contractors and administrative law judges to make

16 informed decisions with respect to appeals.

17 ‘‘(4) REPORTS.—

18 ‘‘(A) ANNUAL REPORT TO CONGRESS.—

19 The Secretary shall submit to Congress an an20 nual report describing the number of appeals

21 for the previous year, identifying issues that re22 quire administrative or legislative actions, and

23 including any recommendations of the Secretary

24 with respect to such actions. The Secretary

25 shall include in such report an analysis of de-
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1 terminations by qualified independent contrac2 tors with respect to inconsistent decisions and

3 an analysis of the causes of any such inconsist4 encies.

5 ‘‘(B) SURVEY.—Not less frequently than

6 every 5 years, the Secretary shall conduct a

7 survey of a valid sample of individuals entitled

8 to benefits under this title who have filed ap9 peals of determinations under this section, pro10 viders of services, and suppliers to determine

11 the satisfaction of such individuals or entities

12 with the process for appeals of determinations

13 provided for under this section and education

14 and training provided by the Secretary with re15 spect to that process. The Secretary shall sub16 mit to Congress a report describing the results

17 of the survey, and shall include any rec18 ommendations for administrative or legislative

19 actions that the Secretary determines appro20 priate.’’.

21 (b) APPLICABILITY OF REQUIREMENTS AND LIMITA22 TIONS ON LIABILITY OF QUALIFIED INDEPENDENT CON23 TRACTORS TO MEDICARE+CHOICE INDEPENDENT AP24 PEALS CONTRACTORS.—Section 1852(g)(4) (42 U.S.C.

25 1395w–22(g)(4)) is amended by adding at the end the fol-
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1 lowing: ‘‘The provisions of section 1869(c)(5) shall apply

2 to independent outside entities under contract with the

3 Secretary under this paragraph.’’.

4 (c) CONFORMING AMENDMENT.—Section 1154(e)

5 (42 U.S.C. 1320c–3(e)) is amended by striking para6 graphs (2), (3), and (4).

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

8 this section shall apply with respect to initial determina9 tions made on or after October 1, 2002.

10 SEC. 522. REVISIONS TO MEDICARE COVERAGE PROCESS.

11 (a) REVIEW OF DETERMINATIONS.—Section 1869

12 (42 U.S.C. 1395ff ), as amended by section 521, is further

13 amended by adding at the end the following new sub14 section:

15 ‘‘(f ) REVIEW OF COVERAGE DETERMINATIONS.—

16 ‘‘(1) NATIONAL COVERAGE DETERMINATIONS.—

17 ‘‘(A) IN GENERAL.—Review of any na18 tional coverage determination shall be subject to

19 the following limitations:

20 ‘‘(i) Such a determination shall not be

21 reviewed by any administrative law judge.

22 ‘‘(ii) Such a determination shall not

23 be held unlawful or set aside on the ground

24 that a requirement of section 553 of title

25 5, United States Code, or section 1871(b)
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1 of this title, relating to publication in the

2 Federal Register or opportunity for public

3 comment, was not satisfied.

4 ‘‘(iii) Upon the filing of a complaint

5 by an aggrieved party, such a determina6 tion shall be reviewed by the Departmental

7 Appeals Board of the Department of

8 Health and Human Services. In con9 ducting such a review, the Departmental

10 Appeals Board—

11 ‘‘(I) shall review the record and

12 shall permit discovery and the taking

13 of evidence to evaluate the reasonable14 ness of the determination, if the

15 Board determines that the record is

16 incomplete or lacks adequate informa17 tion to support the validity of the de18 termination;

19 ‘‘(II) may, as appropriate, con20 sult with appropriate scientific and

21 clinical experts; and

22 ‘‘(III) shall defer only to the rea23 sonable findings of fact, reasonable in24 terpretations of law, and reasonable
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1 applications of fact to law by the Sec2 retary.

3 ‘‘(iv) The Secretary shall implement a

4 decision of the Departmental Appeals

5 Board within 30 days of receipt of such

6 decision.

7 ‘‘(v) A decision of the Departmental

8 Appeals Board constitutes a final agency

9 action and is subject to judicial review.

10 ‘‘(B) DEFINITION OF NATIONAL COVERAGE

11 DETERMINATION.—For purposes of this section,

12 the term ‘national coverage determination’

13 means a determination by the Secretary with

14 respect to whether or not a particular item or

15 service is covered nationally under this title, but

16 does not include a determination of what code,

17 if any, is assigned to a particular item or serv18 ice covered under this title or a determination

19 with respect to the amount of payment made

20 for a particular item or service so covered.

21 ‘‘(2) LOCAL COVERAGE DETERMINATION.—

22 ‘‘(A) IN GENERAL.—Review of any local

23 coverage determination shall be subject to the

24 following limitations:
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1 ‘‘(i) Upon the filing of a complaint by

2 an aggrieved party, such a determination

3 shall be reviewed by an administrative law

4 judge of the Social Security Administra5 tion. The administrative law judge—

6 ‘‘(I) shall review the record and

7 shall permit discovery and the taking

8 of evidence to evaluate the reasonable9 ness of the determination, if the ad10 ministrative law judge determines that

11 the record is incomplete or lacks ade12 quate information to support the va13 lidity of the determination;

14 ‘‘(II) may, as appropriate, con15 sult with appropriate scientific and

16 clinical experts; and

17 ‘‘(III) shall defer only to the rea18 sonable findings of fact, reasonable in19 terpretations of law, and reasonable

20 applications of fact to law by the Sec21 retary.

22 ‘‘(ii) Upon the filing of a complaint by

23 an aggrieved party, a decision of an admin24 istrative law judge under clause (i) shall be

25 reviewed by the Departmental Appeals
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1 Board of the Department of Health and

2 Human Services.

3 ‘‘(iii) The Secretary shall implement a

4 decision of the administrative law judge or

5 the Departmental Appeals Board within 30

6 days of receipt of such decision.

7 ‘‘(iv) A decision of the Departmental

8 Appeals Board constitutes a final agency

9 action and is subject to judicial review.

10 ‘‘(B) DEFINITION OF LOCAL COVERAGE

11 DETERMINATION.—For purposes of this section,

12 the term ‘local coverage determination’ means a

13 determination by a fiscal intermediary or a car14 rier under part A or part B, as applicable, re15 specting whether or not a particular item or

16 service is covered on an intermediary- or car17 rier-wide basis under such parts, in accordance

18 with section 1862(a)(1)(A).

19 ‘‘(3) NO MATERIAL ISSUES OF FACT IN DIS20 PUTE.—In the case of a determination that may oth21 erwise be subject to review under paragraph

22 (1)(A)(iii) or paragraph (2)(A)(i), where the moving

23 party alleges that—

24 ‘‘(A) there are no material issues of fact in

25 dispute, and
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1 ‘‘(B) the only issue of law is the constitu2 tionality of a provision of this title, or that a

3 regulation, determination, or ruling by the Sec4 retary is invalid,

5 the moving party may seek review by a court of com6 petent jurisdiction without filing a complaint under

7 such paragraph and without otherwise exhausting

8 other administrative remedies.

9 ‘‘(4) PENDING NATIONAL COVERAGE DETER10 MINATIONS.—

11 ‘‘(A) IN GENERAL.—In the event the Sec12 retary has not issued a national coverage or

13 noncoverage determination with respect to a

14 particular type or class of items or services, an

15 aggrieved person (as described in paragraph

16 (5)) may submit to the Secretary a request to

17 make such a determination with respect to such

18 items or services. By not later than the end of

19 the 90-day period beginning on the date the

20 Secretary receives such a request (notwith21 standing the receipt by the Secretary of new

22 evidence (if any) during such 90-day period),

23 the Secretary shall take one of the following ac24 tions:
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1 ‘‘(i) Issue a national coverage deter2 mination, with or without limitations.

3 ‘‘(ii) Issue a national noncoverage de4 termination.

5 ‘‘(iii) Issue a determination that no

6 national coverage or noncoverage deter7 mination is appropriate as of the end of

8 such 90-day period with respect to national

9 coverage of such items or services.

10 ‘‘(iv) Issue a notice that states that

11 the Secretary has not completed a review

12 of the request for a national coverage de13 termination and that includes an identi14 fication of the remaining steps in the Sec15 retary’s review process and a deadline by

16 which the Secretary will complete the re17 view and take an action described in sub18 clause (I), (II), or (III).

19 ‘‘(B) DEEMED ACTION BY THE SEC20 RETARY.—In the case of an action described in

21 clause (i)(IV), if the Secretary fails to take an

22 action referred to in such clause by the deadline

23 specified by the Secretary under such clause,

24 then the Secretary is deemed to have taken an
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1 action described in clause (i)(III) as of the

2 deadline.

3 ‘‘(C) EXPLANATION OF DETERMINA4 TION.—When issuing a determination under

5 clause (i), the Secretary shall include an expla6 nation of the basis for the determination. An

7 action taken under clause (i) (other than sub8 clause (IV)) is deemed to be a national coverage

9 determination for purposes of review under sub10 paragraph (A).

11 ‘‘(5) STANDING.—An action under this sub12 section seeking review of a national coverage deter13 mination or local coverage determination may be ini14 tiated only by individuals entitled to benefits under

15 part A, or enrolled under part B, or both, who are

16 in need of the items or services that are the subject

17 of the coverage determination.

18 ‘‘(6) PUBLICATION ON THE INTERNET OF DECI19 SIONS OF HEARINGS OF THE SECRETARY.—Each de20 cision of a hearing by the Secretary with respect to

21 a national coverage determination shall be made

22 public, and the Secretary shall publish each decision

23 on the Medicare Internet site of the Department of

24 Health and Human Services. The Secretary shall re25 move from such decision any information that would
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1 identify any individual, provider of services, or sup2 plier.

3 ‘‘(7) ANNUAL REPORT ON NATIONAL COVERAGE

4 DETERMINATIONS.—

5 ‘‘(A) IN GENERAL.—Not later than De6 cember 1 of each year, beginning in 2001, the

7 Secretary shall submit to Congress a report

8 that sets forth a detailed compilation of the ac9 tual time periods that were necessary to com10 plete and fully implement national coverage de11 terminations that were made in the previous fis12 cal year for items, services, or medical devices

13 not previously covered as a benefit under this

14 title, including, with respect to each new item,

15 service, or medical device, a statement of the

16 time taken by the Secretary to make and imple17 ment the necessary coverage, coding, and pay18 ment determinations, including the time taken

19 to complete each significant step in the process

20 of making and implementing such determina21 tions.

22 ‘‘(B) PUBLICATION OF REPORTS ON THE

23 INTERNET.—The Secretary shall publish each

24 report submitted under clause (i) on the medi-
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1 care Internet site of the Department of Health

2 and Human Services.

3 ‘‘(8) CONSTRUCTION.—Nothing in this sub4 section shall be construed as permitting administra5 tive or judicial review pursuant to this section inso6 far as such review is explicitly prohibited or re7 stricted under another provision of law.’’.

8 (b) ESTABLISHMENT OF A PROCESS FOR COVERAGE

9 DETERMINATIONS.—Section 1862(a) (42 U.S.C.

10 1395y(a)) is amended by adding at the end the following

11 new sentence: ‘‘In making a national coverage determina12 tion (as defined in paragraph (1)(B) of section 1869(f ))

13 the Secretary shall ensure that the public is afforded no14 tice and opportunity to comment prior to implementation

15 by the Secretary of the determination; meetings of advi16 sory committees established under section 1114(f ) with

17 respect to the determination are made on the record; in

18 making the determination, the Secretary has considered

19 applicable information (including clinical experience and

20 medical, technical, and scientific evidence) with respect to

21 the subject matter of the determination; and in the deter22 mination, provide a clear statement of the basis for the

23 determination (including responses to comments received

24 from the public), the assumptions underlying that basis,
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1 and make available to the public the data (other than pro2 prietary data) considered in making the determination.’’.

3 (c) IMPROVEMENTS TO THE MEDICARE ADVISORY

4 COMMITTEE PROCESS.—Section 1114 (42 U.S.C. 1314)

5 is amended by adding at the end the following new sub6 section:

7 ‘‘(i)(1) Any advisory committee appointed under sub8 section (f ) to advise the Secretary on matters relating to

9 the interpretation, application, or implementation of sec10 tion 1862(a)(1) shall assure the full participation of a

11 nonvoting member in the deliberations of the advisory

12 committee, and shall provide such nonvoting member ac13 cess to all information and data made available to voting

14 members of the advisory committee, other than informa15 tion that—

16 ‘‘(A) is exempt from disclosure pursuant to sub17 section (a) of section 552 of title 5, United States

18 Code, by reason of subsection (b)(4) of such section

19 (relating to trade secrets); or

20 ‘‘(B) the Secretary determines would present a

21 conflict of interest relating to such nonvoting mem22 ber.

23 ‘‘(2) If an advisory committee described in paragraph

24 (1) organizes into panels of experts according to types of

25 items or services considered by the advisory committee,
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1 any such panel of experts may report any recommendation

2 with respect to such items or services directly to the Sec3 retary without the prior approval of the advisory com4 mittee or an executive committee thereof.’’.

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

6 this section shall apply with respect to—

7 (1) a review of any national or local coverage

8 determination filed,

9 (2) a request to make such a determination

10 made, and

11 (3) a national coverage determination made,

12 on or after October 1, 2001.

13 Subtitle D—Improving Access to

14 New Technologies

15 SEC. 531. REIMBURSEMENT IMPROVEMENTS FOR NEW

16 CLINICAL LABORATORY TESTS AND DURA17 BLE MEDICAL EQUIPMENT.

18 (a) PAYMENT RULE FOR NEW LABORATORY

19 TESTS.—Section 1833(h)(4)(B)(viii) (42 U.S.C.

20 1395l(h)(4)(B)(viii)) is amended by inserting before the

21 period at the end the following: ‘‘(or 100 percent of such

22 median in the case of a clinical diagnostic laboratory test

23 performed on or after January 1, 2001, that the Secretary

24 determines is a new test for which no limitation amount
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1 has previously been established under this subpara2 graph)’’.

3 (b) ESTABLISHMENT OF CODING AND PAYMENT

4 PROCEDURES FOR NEW CLINICAL DIAGNOSTIC LABORA5 TORY TESTS AND OTHER ITEMS ON A FEE SCHEDULE.—

6 Not later than 1 year after the date of the enactment of

7 this Act, the Secretary of Health and Human Services

8 shall establish procedures for coding and payment deter9 minations for the categories of new clinical diagnostic lab10 oratory tests and new durable medical equipment under

11 part B of title XVIII of the Social Security Act that per12 mit public consultation in a manner consistent with the

13 procedures established for implementing coding modifica14 tions for ICD–9–CM.

15 (c) REPORT ON PROCEDURES USED FOR ADVANCED,

16 IMPROVED TECHNOLOGIES.—Not later than 1 year after

17 the date of the enactment of this Act, the Secretary of

18 Health and Human Services shall submit to Congress a

19 report that identifies the specific procedures used by the

20 Secretary under part B of title XVIII of the Social Secu21 rity Act to adjust payments for clinical diagnostic labora22 tory tests and durable medical equipment which are classi23 fied to existing codes where, because of an advance in

24 technology with respect to the test or equipment, there has

25 been a significant increase or decrease in the resources
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1 used in the test or in the manufacture of the equipment,

2 and there has been a significant improvement in the per3 formance of the test or equipment. The report shall in4 clude such recommendations for changes in law as may

5 be necessary to assure fair and appropriate payment levels

6 under such part for such improved tests and equipment

7 as reflects increased costs necessary to produce improved

8 results.

9 SEC. 532. RETENTION OF HCPCS LEVEL III CODES.

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

11 Human Services shall maintain and continue the use of

12 level III codes of the HCPCS coding system (as such sys13 tem was in effect on August 16, 2000) through December

14 31, 2003, and shall make such codes available to the pub15 lic.

16 (b) DEFINITION.—For purposes of this section, the

17 term ‘‘HCPCS Level III codes’’ means the alphanumeric

18 codes for local use under the Health Care Financing Ad19 ministration Common Procedure Coding System

20 (HCPCS).

21 SEC. 533. RECOGNITION OF NEW MEDICAL TECHNOLOGIES

22 UNDER INPATIENT HOSPITAL PPS.

23 (a) EXPEDITING RECOGNITION OF NEW TECH24 NOLOGIES INTO INPATIENT PPS CODING SYSTEM.—
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1 (1) REPORT.—Not later than April 1, 2001, the

2 Secretary of Health and Human Services shall sub3 mit to Congress a report on methods of expeditiously

4 incorporating new medical services and technologies

5 into the clinical coding system used with respect to

6 payment for inpatient hospital services furnished

7 under the medicare program under title XVIII of the

8 Social Security Act, together with a detailed descrip9 tion of the Secretary’s preferred methods to achieve

10 this purpose.

11 (2) IMPLEMENTATION.—Not later than October

12 1, 2001, the Secretary shall implement the preferred

13 methods described in the report transmitted pursu14 ant to paragraph (1).

15 (b) ENSURING APPROPRIATE PAYMENTS FOR HOS16 PITALS INCORPORATING NEW MEDICAL SERVICES AND

17 TECHNOLOGIES.—

18 (1) ESTABLISHMENT OF MECHANISM.—Section

19 1886(d)(5) (42 U.S.C. 1395ww(d)(5)) is amended

20 by adding at the end the following new subpara21 graphs:

22 ‘‘(K)(i) Effective for discharges beginning on or after

23 October 1, 2001, the Secretary shall establish a mecha24 nism to recognize the costs of new medical services and

25 technologies under the payment system established under
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1 this subsection. Such mechanism shall be established after

2 notice and opportunity for public comment (in the publica3 tions required by subsection (e)(5) for a fiscal year or oth4 erwise).

5 ‘‘(ii) The mechanism established pursuant to clause

6 (i) shall—

7 ‘‘(I) apply to a new medical service or tech8 nology if, based on the estimated costs incurred with

9 respect to discharges involving such service or tech10 nology, the DRG prospective payment rate otherwise

11 applicable to such discharges under this subsection

12 is inadequate;

13 ‘‘(II) provide for the collection of data with re14 spect to the costs of a new medical service or tech15 nology described in subclause (I) for a period of not

16 less than two years and not more than three years

17 beginning on the date on which an inpatient hospital

18 code is issued with respect to the service or tech19 nology;

20 ‘‘(III) subject to paragraph (4)(C)(iii), provide

21 for additional payment to be made under this sub22 section with respect to discharges involving a new

23 medical service or technology described in subclause

24 (I) that occur during the period described in sub25 clause (II) in an amount that adequately reflects the
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1 estimated average cost of such service or technology;

2 and

3 ‘‘(IV) provide that discharges involving such a

4 service or technology that occur after the close of the

5 period described in subclause (II) will be classified

6 within a new or existing diagnosis-related group with

7 a weighting factor under paragraph (4)(B) that is

8 derived from cost data collected with respect to dis9 charges occurring during such period.

10 ‘‘(iii) For purposes of clause (ii)(II), the term ‘inpa11 tient hospital code’ means any code that is used with re12 spect to inpatient hospital services for which payment may

13 be made under this subsection and includes an alpha14 numeric code issued under the International Classification

15 of Diseases, 9th Revision, Clinical Modification (‘ICD–9–

16 CM’) and its subsequent revisions.

17 ‘‘(iv) For purposes of clause (ii)(III), the term ‘addi18 tional payment’ means, with respect to a discharge for a

19 new medical service or technology described in clause

20 (ii)(I), an amount that exceeds the prospective payment

21 rate otherwise applicable under this subsection to dis22 charges involving such service or technology that would

23 be made but for this subparagraph.

24 ‘‘(v) The requirement under clause (ii)(III) for an ad25 ditional payment may be satisfied by means of a new-tech-
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1 nology group (described in subparagraph (L)), an add-on

2 payment, a payment adjustment, or any other similar

3 mechanism for increasing the amount otherwise payable

4 with respect to a discharge under this subsection. The Sec5 retary may not establish a separate fee schedule for such

6 additional payment for such services and technologies, by

7 utilizing a methodology established under subsection (a)

8 or (h) of section 1834 to determine the amount of such

9 additional payment, or by other similar mechanisms or

10 methodologies.

11 ‘‘(vi) For purposes of this subparagraph and sub12 paragraph (L), a medical service or technology will be con13 sidered a ‘new medical service or technology’ if the service

14 or technology meets criteria established by the Secretary

15 after notice and an opportunity for public comment.

16 ‘‘(L)(i) In establishing the mechanism under sub17 paragraph (K), the Secretary may establish new-tech18 nology groups into which a new medical service or tech19 nology will be classified if, based on the estimated average

20 costs incurred with respect to discharges involving such

21 service or technology, the DRG prospective payment rate

22 otherwise applicable to such discharges under this sub23 section is inadequate.

24 ‘‘(ii) Such groups—
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1 ‘‘(I) shall not be based on the costs associated

2 with a specific new medical service or technology;

3 but

4 ‘‘(II) shall, in combination with the applicable

5 standardized amounts and the weighting factors as6 signed to such groups under paragraph (4)(B), re7 flect such cost cohorts as the Secretary determines

8 are appropriate for all new medical services and

9 technologies that are likely to be provided as inpa10 tient hospital services in a fiscal year.

11 ‘‘(iii) The methodology for classifying specific hos12 pital discharges within a diagnosis-related group under

13 paragraph (4)(A) or a new-technology group shall provide

14 that a specific hospital discharge may not be classified

15 within both a diagnosis-related group and a new-tech16 nology group.’’.

17 (2) PRIOR CONSULTATION.—The Secretary of

18 Health and Human Services shall consult with

19 groups representing hospitals, physicians, and manu20 facturers of new medical technologies before pub21 lishing the notice of proposed rulemaking required

22 by section 1886(d)(5)(K)(i) of the Social Security

23 Act (as added by paragraph (1)).

24 (3) CONFORMING AMENDMENT.—Section

25 1886(d)(4)(C)(i) (42 U.S.C. 1395ww(d)(4)(C)(i)) is
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1 amended by striking ‘‘technology,’’ and inserting

2 ‘‘technology (including a new medical service or

3 technology under paragraph (5)(K)),’’.

4 Subtitle E—Other Provisions

5 SEC. 541. INCREASE IN REIMBURSEMENT FOR BAD DEBT.

6 Section 1861(v)(1)(T) (42 U.S.C. 1395x(v)(1)(T)) is

7 amended—

8 (1) in clause (ii), by striking ‘‘and’’ at the end;

9 (2) in clause (iii)—

10 (A) by striking ‘‘during a subsequent fiscal

11 year’’ and inserting ‘‘during fiscal year 2000’’;

12 and

13 (B) by striking the period at the end and

14 inserting ‘‘, and’’; and

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

16 clause:

17 ‘‘(iv) for cost reporting periods beginning dur18 ing a subsequent fiscal year, by 30 percent of such

19 amount otherwise allowable.’’.

20 SEC. 542. TREATMENT OF CERTAIN PHYSICIAN PATHOLOGY

21 SERVICES UNDER MEDICARE.

22 (a) IN GENERAL.—When an independent laboratory

23 furnishes the technical component of a physician pathol24 ogy service to a fee-for-service medicare beneficiary who

25 is an inpatient or outpatient of a covered hospital, the Sec-
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1 retary of Health and Human Services shall treat such

2 component as a service for which payment shall be made

3 to the laboratory under section 1848 of the Social Security

4 Act (42 U.S.C. 1395w–4) and not as an inpatient hospital

5 service for which payment is made to the hospital under

6 section 1886(d) of such Act (42 U.S.C. 1395ww(d)) or

7 as an outpatient hospital service for which payment is

8 made to the hospital under section 1833(t) of such Act

9 (42 U.S.C. 1395l(t)).

10 (b) DEFINITIONS.—For purposes of this section:

11 (1) COVERED HOSPITAL.—The term ‘‘covered

12 hospital’’ means, with respect to an inpatient or an

13 outpatient, a hospital that had an arrangement with

14 an independent laboratory that was in effect as of

15 July 22, 1999, under which a laboratory furnished

16 the technical component of physician pathology serv17 ices to fee-for-service medicare beneficiaries who

18 were hospital inpatients or outpatients, respectively,

19 and submitted claims for payment for such compo20 nent to a medicare carrier (that has a contract with

21 the Secretary under section 1842 of the Social Secu22 rity Act, 42 U.S.C. 1395u) and not to such hospital.

23 (2) FEE-FOR-SERVICE MEDICARE BENE24 FICIARY.—The term ‘‘fee-for-service medicare bene25 ficiary’’ means an individual who—
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1 (A) is entitled to benefits under part A, or

2 enrolled under part B, or both, of such title;

3 and

4 (B) is not enrolled in any of the following:

5 (i) A Medicare+Choice plan under

6 part C of such title.

7 (ii) A plan offered by an eligible orga8 nization under section 1876 of such Act

9 (42 U.S.C. 1395mm).

10 (iii) A program of all-inclusive care

11 for the elderly (PACE) under section 1894

12 of such Act (42 U.S.C. 1395eee).

13 (iv) A social health maintenance orga14 nization (SHMO) demonstration project

15 established under section 4018(b) of the

16 Omnibus Budget Reconciliation Act of

17 1987 (Public Law 100–203).

18 (c) EFFECTIVE DATE.—This section shall apply to

19 services furnished during the 2-year period beginning on

20 January 1, 2001.

21 (d) GAO REPORT.—

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

23 United States shall conduct a study of the effects of

24 the previous provisions of this section on hospitals

25 and laboratories and access of fee-for-service medi-
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1 care beneficiaries to the technical component of phy2 sician pathology services.

3 (2) REPORT.—Not later than April 1, 2002, the

4 Comptroller General shall submit to Congress a re5 port on such study. The report shall include rec6 ommendations about whether such provisions should

7 be extended after the end of the period specified in

8 subsection (c) for either or both inpatient and out9 patient hospital services, and whether the provisions

10 should be extended to other hospitals.

11 SEC. 543. EXTENSION OF ADVISORY OPINION AUTHORITY.

12 Section 1128D(b)(6) (42 U.S.C. 1320a–7d(b)(6)) is

13 amended by striking ‘‘and before the date which is 4 years

14 after such date of enactment’’.

15 SEC. 544. CHANGE IN ANNUAL MEDPAC REPORTING.

16 (a) REVISION OF DEADLINES FOR SUBMISSION OF

17 REPORTS.—

18 (1) IN GENERAL.—Section 1805(b)(1)(D) (42

19 U.S.C. 1395b–6(b)(1)(D)) is amended by striking

20 ‘‘June 1 of each year (beginning with 1998),’’ and

21 inserting ‘‘June 15 of each year,’’.

22 (2) EFFECTIVE DATE.—The amendment made

23 by paragraph (1) shall apply beginning with 2001.

24 (b) REQUIREMENT FOR ON THE RECORD VOTES ON

25 RECOMMENDATIONS.—Section 1805(b) (42 U.S.C.
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1 1395b–6(b)) is amended by adding at the end the fol2 lowing new paragraph:

3 ‘‘(7) VOTING AND REPORTING REQUIRE4 MENTS.—With respect to each recommendation con5 tained in a report submitted under paragraph (1),

6 each member of the Commission shall vote on the

7 recommendation, and the Commission shall include,

8 by member, the results of that vote in the report

9 containing the recommendation.’’.

10 SEC. 545. DEVELOPMENT OF PATIENT ASSESSMENT IN11 STRUMENTS.

12 (a) DEVELOPMENT.—

13 (1) IN GENERAL.—Not later than January 1,

14 2005, the Secretary of Health and Human Services

15 shall submit to the Committee on Ways and Means

16 and the Committee on Commerce of the House of

17 Representatives and the Committee on Finance of

18 the Senate a report on the development of standard

19 instruments for the assessment of the health and

20 functional status of patients, for whom items and

21 services described in subsection (b) are furnished,

22 and include in the report a recommendation on the

23 use of such standard instruments for payment pur24 poses.
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1 (2) DESIGN FOR COMPARISON OF COMMON ELE2 MENTS.—The Secretary shall design such standard

3 instruments in a manner such that—

4 (A) elements that are common to the items

5 and services described in subsection (b) may be

6 readily comparable and are statistically compat7 ible;

8 (B) only elements necessary to meet pro9 gram objectives are collected; and

10 (C) the standard instruments supersede

11 any other assessment instrument used before

12 that date.

13 (3) CONSULTATION.—In developing an assess14 ment instrument under paragraph (1), the Secretary

15 shall consult with the Medicare Payment Advisory

16 Commission, the Agency for Healthcare Research

17 and Quality, and qualified organizations rep18 resenting providers of services and suppliers under

19 title XVIII.

20 (b) DESCRIPTION OF SERVICES.—For purposes of

21 subsection (a), items and services described in this sub22 section are those items and services furnished to individ23 uals entitled to benefits under part A, or enrolled under

24 part B, or both of title XVIII of the Social Security Act
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1 for which payment is made under such title, and include

2 the following:

3 (1) Inpatient and outpatient hospital services.

4 (2) Inpatient and outpatient rehabilitation serv5 ices.

6 (3) Covered skilled nursing facility services.

7 (4) Home health services.

8 (5) Physical or occupational therapy or speech9 language pathology services.

10 (6) Items and services furnished to such indi11 viduals determined to have end stage renal disease.

12 (7) Partial hospitalization services and other

13 mental health services.

14 (8) Any other service for which payment is

15 made under such title as the Secretary determines to

16 be appropriate.

17 SEC. 546. GAO REPORT ON IMPACT OF THE EMERGENCY

18 MEDICAL TREATMENT AND ACTIVE LABOR

19 ACT (EMTALA) ON HOSPITAL EMERGENCY DE20 PARTMENTS.

21 (a) REPORT.—The Comptroller General of the

22 United States shall submit a report to the Committee on

23 Commerce and the Committee on Ways and Means of the

24 House of Representatives and the Committee on Finance

25 of the Senate by May 1, 2001, on the effect of the Emer-
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1 gency Medical Treatment and Active Labor Act on hos2 pitals, emergency physicians, and physicians covering

3 emergency department call throughout the United States.

4 (b) REPORT REQUIREMENTS.—The report should

5 evaluate—

6 (1) the extent to which hospitals, emergency

7 physicians, and physicians covering emergency de8 partment call provide uncompensated services in re9 lation to the requirements of EMTALA;

10 (2) the extent to which the regulatory require11 ments and enforcement of EMTALA have expanded

12 beyond the legislation’s original intent;

13 (3) estimates for the total dollar amount of

14 EMTALA-related care uncompensated costs to

15 emergency physicians, physicians covering emer16 gency department call, hospital emergency depart17 ments, and other hospital services;

18 (4) the extent to which different portions of the

19 United States may be experiencing different levels of

20 uncompensated EMTALA-related care;

21 (5) the extent to which EMTALA would be

22 classified as an unfunded mandate if it were enacted

23 today;
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1 (6) the extent to which States have programs to

2 provide financial support for such uncompensated

3 care;

4 (7) possible sources of funds, including medi5 care hospital bad debt accounts, that are available to

6 hospitals to assist with the cost of such uncompen7 sated care; and

8 (8) the financial strain that illegal immigration

9 populations, the uninsured, and the underinsured

10 place on hospital emergency departments, other hos11 pital services, emergency physicians, and physicians

12 covering emergency department call.

13 (c) DEFINITION.—In this section, the terms ‘‘Emer14 gency Medical Treatment and Active Labor Act’’ and

15 ‘‘EMTALA’’ mean section 1867 of the Social Security Act

16 (42 U.S.C. 1395dd).

17 SEC. 547. CLARIFICATION OF APPLICATION OF TEMPORARY

18 PAYMENT INCREASES FOR 2001.

19 (a) INPATIENT HOSPITAL SERVICES.—The payment

20 increase provided under the following sections shall not

21 apply to discharges occurring after fiscal year 2001 and

22 shall not be taken into account in calculating the payment

23 amounts applicable for discharges occurring after such fis24 cal year:
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1 (1) Section 301(b)(2)(A) (relating to acute care

2 hospital payment update).

3 (2) Section 302(b) (relating to IME percentage

4 adjustment).

5 (3) Section 303(b)(2) (relating to DSH pay6 ments).

7 (b) SKILLED NURSING FACILITY SERVICES.—The

8 payment increase provided under section 311(b)(2) (relat9 ing to covered skilled nursing facility services) shall not

10 apply to services furnished after fiscal year 2001 and shall

11 not be taken into account in calculating the payment

12 amounts applicable for services furnished after such fiscal

13 year.

14 (c) HOME HEALTH SERVICES.—

15 (1) TRANSITIONAL ALLOWANCE FOR FULL

16 MARKETBASKET INCREASE.—The payment increase

17 provided under section 502(b)(1)(B) shall not apply

18 to episodes and visits ending after fiscal year 2001

19 and shall not be taken into account in calculating

20 the payment amounts applicable for subsequent epi21 sodes and visits.

22 (2) TEMPORARY INCREASE FOR RURAL HOME

23 HEALTH SERVICES.—The payment increase provided

24 under section 508(a) for the period beginning on

25 April 1, 2001, and ending on September 30, 2002,
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1 shall not apply to episodes and visits ending after

2 such period, and shall not be taken into account in

3 calculating the payment amounts applicable for epi4 sodes and visits occurring after such period.

5 (d) CALENDAR YEAR 2001 PROVISIONS.—The pay6 ment increase provided under the following sections shall

7 not apply after calendar year 2001 and shall not be taken

8 into account in calculating the payment amounts applica9 ble for items and services furnished after such year:

10 (1) Section 401(c)(2) (relating to covered OPD

11 services).

12 (2) Section 422(e)(2) (relating to renal dialysis

13 services paid for on a composite rate basis).

14 (3) Section 423(a)(2)(B) (relating to ambulance

15 services).

16 (4) Section 425(b)(2) (relating to durable med17 ical equipment).

18 (5) Section 426(b)(2) (relating to prosthetic de19 vices and orthotics and prosthetics).
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1 TITLE VI—PROVISIONS RELAT2 ING TO PART C

3 (MEDICARE+CHOICE PRO4 GRAM) AND OTHER MEDI5 CARE MANAGED CARE PROVI6 SIONS

7 Subtitle A—Medicare+Choice

8 Payment Reforms

9 SEC. 601. INCREASE IN MINIMUM PAYMENT AMOUNT.

10 (a) IN GENERAL.—Section 1853(c)(1)(B) (42 U.S.C.

11 1395w–23(c)(1)(B)) is amended—

12 (1) by redesignating clause (ii) as clause (iv);

13 (2) by inserting after clause (i) the following

14 new clauses:

15 ‘‘(ii) For 1999 and 2000, the min16 imum amount determined under clause (i)

17 or this clause, respectively, for the pre18 ceding year, increased by the national per

19 capita Medicare+Choice growth percentage

20 described in paragraph (6)(A) applicable to

21 1999 or 2000, respectively.

22 ‘‘(iii)(I) Subject to subclause (II), for

23 2001, for any area in a Metropolitan Sta24 tistical Area with a population of more
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1 than 250,000, $525, and for any other

2 area $475.

3 ‘‘(II) In the case of an area outside

4 the 50 States and the District of Colum5 bia, the amount specified in this clause

6 shall not exceed 120 percent of the amount

7 determined under clause (ii) for such area

8 for 2000.’’; and

9 (3) in clause (iv), as so redesignated—

10 (A) by striking ‘‘a succeeding year’’ and

11 inserting ‘‘2002 and each succeeding year’’; and

12 (B) by striking ‘‘clause (i)’’ and inserting

13 ‘‘clause (iii)’’.

14 (b) SPECIAL RULE FOR JANUARY AND FEBRUARY OF

15 2001.—

16 (1) IN GENERAL.—Notwithstanding the amend17 ments made by subsection (a), for purposes of mak18 ing payments under section 1853 of the Social Secu19 rity Act (42 U.S.C. 1395w–23) for January and

20 February 2001, the annual Medicare+Choice capita21 tion rate for a Medicare+Choice payment area shall

22 be calculated, and the excess amount under section

23 1854(f )(1)(B) of such Act (42 U.S.C. 1395w–

24 24(f )(1)(B)) shall be determined, as if such amend25 ments had not been enacted.
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1 (2) CONSTRUCTION.—Paragraph (1) shall not

2 be taken into account in computing such capitation

3 rate for 2002 and subsequent years.

4 SEC. 602. INCREASE IN MINIMUM PERCENTAGE INCREASE.

5 (a) IN GENERAL.—Section 1853(c)(1)(C) (42 U.S.C.

6 1395w–23(c)(1)(C)) is amended—

7 (1) by redesignating clause (ii) as clause (iv);

8 (2) by inserting after clause (i) the following

9 new clauses:

10 ‘‘(ii) For 1999 and 2000, 102 percent

11 of the annual Medicare+Choice capitation

12 rate under this paragraph for the area for

13 the previous year.

14 ‘‘(iii) For 2001, 103 percent of the

15 annual Medicare+Choice capitation rate

16 under this paragraph for the area for

17 2000.’’; and

18 (3) in clause (iv), as so redesignated, by strik19 ing ‘‘a subsequent year’’ and inserting ‘‘2002 and

20 each succeeding year’’.

21 (b) APPLICATION OF SPECIAL RULE FOR JANUARY

22 AND FEBRUARY OF 2001.—The provisions of section

23 601(b) shall apply with respect to the amendments made

24 by subsection (a) in the same manner as they apply to

25 the amendments made by section 601(a).
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1 SEC. 603. PHASE-IN OF RISK ADJUSTMENT.

2 Section 1853(a)(3)(C) (42 U.S.C. 1395w–

3 23(a)(3)(C)) is amended—

4 (1) in clause (ii)—

5 (A) in subclause (I), by striking ‘‘and

6 2001’’ and inserting ‘‘and each succeeding year

7 through 2003’’ and by striking ‘‘and’’ at the

8 end; and

9 (B) by striking subclause (II) and insert10 ing the following new subclauses:

11 ‘‘(II) 30 percent of such capita12 tion rate in 2004;

13 ‘‘(III) 50 percent of such capita14 tion rate in 2005;

15 ‘‘(IV) 75 percent of such capita16 tion rate in 2006; and

17 ‘‘(V) 100 percent of such capita18 tion rate in 2007 and succeeding

19 years.’’; and

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

21 clause:

22 ‘‘(iii) DATA FOR RISK ADJUSTMENT

23 METHODOLOGY.—Such risk adjustment

24 methodology for 2004 and each succeeding

25 year, shall be based on data from inpatient

26 hospital and ambulatory settings.’’.
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1 SEC. 604. TRANSITION TO REVISED MEDICARE+CHOICE

2 PAYMENT RATES.

3 (a) ANNOUNCEMENT OF REVISED

4 MEDICARE+CHOICE PAYMENT RATES.—Within 2 weeks

5 after the date of the enactment of this Act, the Secretary

6 of Health and Human Services shall determine, and shall

7 announce (in a manner intended to provide notice to inter8 ested parties) Medicare+Choice capitation rates under

9 section 1853 of the Social Security Act (42 U.S.C.

10 1395w–23) for 2001, revised in accordance with the provi11 sions of this Act.

12 (b) REENTRY INTO PROGRAM PERMITTED FOR

13 MEDICARE+CHOICE PROGRAMS.—A Medicare+Choice

14 organization that provided notice to the Secretary of

15 Health and Human Services before the date of the enact16 ment of this Act that it was terminating its contract under

17 part C of title XVIII of the Social Security Act or was

18 reducing the service area of a Medicare+Choice plan of19 fered under such part shall be permitted to continue par20 ticipation under such part, or to maintain the service area

21 of such plan, for 2001 if it submits the Secretary with

22 the information described in section 1854(a)(1) of the So23 cial Security Act (42 U.S.C. 1395w–24(a)(1)) within 2

24 weeks after the date revised rates are announced by the

25 Secretary under subsection (a).
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1 (c) REVISED SUBMISSION OF PROPOSED PREMIUMS

2 AND RELATED INFORMATION.—If—

3 (1) a Medicare+Choice organization provided

4 notice to the Secretary of Health and Human Serv5 ices as of July 3, 2000, that it was renewing its con6 tract under part C of title XVIII of the Social Secu7 rity Act for all or part of the service area or areas

8 served under its current contract, and

9 (2) any part of the service area or areas ad10 dressed in such notice includes a payment area for

11 which the Medicare+Choice capitation rate under

12 section 1853(c) of such Act (42 U.S.C. 1395w–

13 23(c)) for 2001, as determined under subsection (a),

14 is higher than the rate previously determined for

15 such year,

16 such organization shall revise its submission of the infor17 mation described in section 1854(a)(1) of the Social Secu18 rity Act (42 U.S.C. 1395w–24(a)(1)), and shall submit

19 such revised information to the Secretary, within 2 weeks

20 after the date revised rates are announced by the Sec21 retary under subsection (a). In making such submission,

22 the organization may only reduce beneficiary premiums,

23 reduce beneficiary cost-sharing, enhance benefits, utilize

24 the stabilization fund described in section 1854(f )(2) of

25 such Act (42 U.S.C. 1395w–24(f )(2)), or stabilize or en-
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1 hance beneficiary access to providers (so long as such sta2 bilization or enhancement does not result in increased ben3 eficiary premiums, increased beneficiary cost-sharing, or

4 reduced benefits).

5 (d) WAIVER OF LIMITS ON STABILIZATION FUND.—

6 Any regulatory provision that limits the proportion of the

7 excess amount that can be withheld in such stabilization

8 fund for a contract period shall not apply with respect to

9 submissions described in subsections (b) and (c).

10 (e) DISREGARD OF NEW RATE ANNOUNCEMENT IN

11 APPLYING PASS-THROUGH FOR NEW NATIONAL COV12 ERAGE DETERMINATIONS.—For purposes of applying sec13 tion 1852(a)(5) of the Social Security Act (42 U.S.C.

14 1395w–22(a)(5)), the announcement of revised rates

15 under subsection (a) shall not be treated as an announce16 ment under section 1853(b) of such Act (42 U.S.C.

17 1395w–23(b)).

18 SEC. 605. REVISION OF PAYMENT RATES FOR ESRD PA19 TIENTS ENROLLED IN MEDICARE+CHOICE

20 PLANS.

21 (a) IN GENERAL.—Section 1853(a)(1)(B) (42 U.S.C.

22 1395w–23(a)(1)(B)) is amended by adding at the end the

23 following: ‘‘In establishing such rates, the Secretary shall

24 provide for appropriate adjustments to increase each rate

25 to reflect the demonstration rate (including the risk ad-
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1 justment methodology associated with such rate) of the

2 social health maintenance organization end-stage renal

3 disease capitation demonstrations (established by section

4 2355 of the Deficit Reduction Act of 1984, as amended

5 by section 13567(b) of the Omnibus Budget Reconciliation

6 Act of 1993), and shall compute such rates by taking into

7 account such factors as renal treatment modality, age, and

8 the underlying cause of the end-stage renal disease.’’.

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

10 subsection (a) shall apply to payments for months begin11 ning with January 2002.

12 (c) PUBLICATION.—Not later than 6 months after

13 the date of the enactment of this Act, the Secretary of

14 Health and Human Services shall publish for public com15 ment a description of the appropriate adjustments de16 scribed in the last sentence of section 1853(a)(1)(B) of

17 the Social Security Act (42 U.S.C. 1395w–23(a)(1)(B)),

18 as added by subsection (a). The Secretary shall publish

19 such adjustments in final form by not later than July 1,

20 2001, so that the amendment made by subsection (a) is

21 implemented on a timely basis consistent with subsection

22 (b).
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1 SEC. 606. PERMITTING PREMIUM REDUCTIONS AS ADDI2 TIONAL BENEFITS UNDER

3 MEDICARE+CHOICE PLANS.

4 (a) IN GENERAL.—

5 (1) AUTHORIZATION OF PART B PREMIUM RE6 DUCTIONS.—Section 1854(f )(1) (42 U.S.C. 1395w–

7 24(f )(1)) is amended—

8 (A) by redesignating subparagraph (E) as

9 subparagraph (F); and

10 (B) by inserting after subparagraph (D)

11 the following new subparagraph:

12 ‘‘(E) PREMIUM REDUCTIONS.—

13 ‘‘(i) IN GENERAL.—Subject to clause

14 (ii), as part of providing any additional

15 benefits required under subparagraph (A),

16 a Medicare+Choice organization may elect

17 a reduction in its payments under section

18 1853(a)(1)(A) with respect to a

19 Medicare+Choice plan and the Secretary

20 shall apply such reduction to reduce the

21 premium under section 1839 of each en22 rollee in such plan as provided in section

23 1840(i).

24 ‘‘(ii) AMOUNT OF REDUCTION.—The

25 amount of the reduction under clause (i)
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1 with respect to any enrollee in a

2 Medicare+Choice plan—

3 ‘‘(I) may not exceed 125 percent

4 of the premium described under sec5 tion 1839(a)(3); and

6 ‘‘(II) shall apply uniformly to

7 each enrollee of the Medicare+Choice

8 plan to which such reduction ap9 plies.’’.

10 (2) CONFORMING AMENDMENTS.—

11 (A) ADJUSTMENT OF PAYMENTS TO

12 MEDICARE+CHOICE ORGANIZATIONS.—Section

13 1853(a)(1)(A) (42 U.S.C. 1395w–23(a)(1)(A))

14 is amended by inserting ‘‘reduced by the

15 amount of any reduction elected under section

16 1854(f )(1)(E) and’’ after ‘‘for that area,’’.

17 (B) ADJUSTMENT AND PAYMENT OF PART

18 B PREMIUMS.—

19 (i) ADJUSTMENT OF PREMIUMS.—

20 Section 1839(a)(2) (42 U.S.C.

21 1395r(a)(2)) is amended by striking

22 ‘‘shall’’ and all that follows and inserting

23 the following: ‘‘shall be the amount deter24 mined under paragraph (3), adjusted as

25 required in accordance with subsections
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1 (b), (c), and (f ), and to reflect 80 percent

2 of any reduction elected under section

3 1854(f )(1)(E).’’.

4 (ii) PAYMENT OF PREMIUMS.—Section

5 1840 (42 U.S.C. 1395s) is amended by

6 adding at the end the following new sub7 section:

8 ‘‘(i) In the case of an individual enrolled in a

9 Medicare+Choice plan, the Secretary shall provide for

10 necessary adjustments of the monthly beneficiary pre11 mium to reflect 80 percent of any reduction elected under

12 section 1854(f )(1)(E). To the extent to which the Sec13 retary determines that such an adjustment is appropriate,

14 with the concurrence of any agency responsible for the ad15 ministration of such benefits, such premium adjustment

16 may be provided directly, as an adjustment to any social

17 security, railroad retirement, or civil service retirement

18 benefits, or, in the case of an individual who receives med19 ical assistance under title XIX for medicare costs de20 scribed in section 1905(p)(3)(A)(ii), as an adjustment to

21 the amount otherwise owed by the State for such medical

22 assistance.’’.

23 (C) INFORMATION COMPARING PLAN PRE24 MIUMS UNDER PART C.—Section 1851(d)(4)(B)

25 (42 U.S.C. 1395w–21(d)(4)(B)) is amended—
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1 (i) by striking ‘‘PREMIUMS.—The’’

2 and inserting ‘‘PREMIUMS.—

3 ‘‘(i) IN GENERAL.—The’’; and

4 (ii) by adding at the end the following

5 new clause:

6 ‘‘(ii) REDUCTIONS.—The reduction in

7 part B premiums, if any.’’.

8 (D) TREATMENT OF REDUCTION FOR PUR9 POSES OF DETERMINING GOVERNMENT CON10 TRIBUTION UNDER PART B.—Section 1844 (42

11 U.S.C. 1395w) is amended by adding at the

12 end the following new subsection:

13 ‘‘(c) The Secretary shall determine the Government

14 contribution under subparagraphs (A) and (B) of sub15 section (a)(1) without regard to any premium reduction

16 resulting from an election under section 1854(f )(1)(E).’’.

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

18 subsection (a) shall apply to years beginning with 2003.

19 SEC. 607. FULL IMPLEMENTATION OF RISK ADJUSTMENT

20 FOR CONGESTIVE HEART FAILURE ENROLL21 EES FOR 2001.

22 (a) IN GENERAL.—Section 1853(a)(3)(C) (42 U.S.C.

23 1395w–23(a)(3)(C)) is amended—
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1 (1) in clause (ii), by striking ‘‘Such risk adjust2 ment’’ and inserting ‘‘Except as provided in clause

3 (iii), such risk adjustment’’; and

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

5 clause:

6 ‘‘(iii) FULL IMPLEMENTATION OF

7 RISK ADJUSTMENT FOR CONGESTIVE

8 HEART FAILURE ENROLLEES FOR 2001.—

9 ‘‘(I) EXEMPTION FROM PHASE10 IN.—Subject to subclause (II), the

11 Secretary shall fully implement the

12 risk adjustment methodology de13 scribed in clause (i) with respect to

14 each individual who has had a quali15 fying congestive heart failure inpa16 tient diagnosis (as determined by the

17 Secretary under such risk adjustment

18 methodology) during the period begin19 ning on July 1, 1999, and ending on

20 June 30, 2000, and who is enrolled in

21 a coordinated care plan that is the

22 only coordinated care plan offered on

23 January 1, 2001, in the service area

24 of the individual.
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1 ‘‘(II) PERIOD OF APPLICATION.—

2 Subclause (I) shall only apply during

3 the 1-year period beginning on Janu4 ary 1, 2001.’’.

5 (b) EXCLUSION FROM DETERMINATION OF THE

6 BUDGET NEUTRALITY FACTOR.—Section 1853(c)(5) (42

7 U.S.C. 1395w–23(c)(5)) is amended by striking ‘‘sub8 section (i)’’ and inserting ‘‘subsections (a)(3)(C)(iii) and

9 (i)’’.

10 SEC. 608. EXPANSION OF APPLICATION OF

11 MEDICARE+CHOICE NEW ENTRY BONUS.

12 (a) IN GENERAL.—Section 1853(i)(1) (42 U.S.C.

13 1395w–23(i)(1)) is amended in the matter preceding sub14 paragraph (A) by inserting ‘‘, or filed notice with the Sec15 retary as of October 3, 2000, that they will not be offering

16 such a plan as of January 1, 2001’’ after ‘‘January 1,

17 2000’’.

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

19 subsection (a) shall apply as if included in the enactment

20 of BBRA.
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1 SEC. 609. REPORT ON INCLUSION OF CERTAIN COSTS OF

2 THE DEPARTMENT OF VETERANS AFFAIRS

3 AND MILITARY FACILITY SERVICES IN CAL4 CULATING MEDICARE+CHOICE PAYMENT

5 RATES.

6 The Secretary of Health and Human Services shall

7 report to Congress by not later than January 1, 2003,

8 on a method to phase-in the costs of military facility serv9 ices furnished by the Department of Veterans Affairs, and

10 the costs of military facility services furnished by the De11 partment of Defense, to medicare-eligible beneficiaries in

12 the calculation of an area’s Medicare+Choice capitation

13 payment. Such report shall include on a county-by-county

14 basis—

15 (1) the actual or estimated cost of such services

16 to medicare-eligible beneficiaries;

17 (2) the change in Medicare+Choice capitation

18 payment rates if such costs are included in the cal19 culation of payment rates;

20 (3) one or more proposals for the implementa21 tion of payment adjustments to Medicare+Choice

22 plans in counties where the payment rate has been

23 affected due to the failure to calculate the cost of

24 such services to medicare-eligible beneficiaries; and

25 (4) a system to ensure that when a

26 Medicare+Choice enrollee receives covered services
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1 through a facility of the Department of Veterans Af2 fairs or the Department of Defense there is an ap3 propriate payment recovery to the medicare program

4 under title XVIII of the Social Security Act.

5 Subtitle B—Other Medicare+Choice

6 Reforms

7 SEC. 611. PAYMENT OF ADDITIONAL AMOUNTS FOR NEW

8 BENEFITS COVERED DURING A CONTRACT

9 TERM.

10 (a) IN GENERAL.—Section 1853(c)(7) (42 U.S.C.

11 1395w–23(c)(7)) is amended to read as follows:

12 ‘‘(7) ADJUSTMENT FOR NATIONAL COVERAGE

13 DETERMINATIONS AND LEGISLATIVE CHANGES IN

14 BENEFITS.—If the Secretary makes a determination

15 with respect to coverage under this title or there is

16 a change in benefits required to be provided under

17 this part that the Secretary projects will result in a

18 significant increase in the costs to Medicare+Choice

19 of providing benefits under contracts under this part

20 (for periods after any period described in section

21 1852(a)(5)), the Secretary shall adjust appropriately

22 the payments to such organizations under this part.

23 Such projection and adjustment shall be based on an

24 analysis by the Chief Actuary of the Health Care Fi-
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1 nancing Administration of the actuarial costs associ2 ated with the new benefits.’’.

3 (b) CONFORMING AMENDMENT.—Section 1852(a)(5)

4 (42 U.S.C. 1395w–22(a)(5)) is amended—

5 (1) in the heading, by inserting ‘‘AND LEGISLA6 TIVE CHANGES IN BENEFITS’’ after ‘‘NATIONAL COV7 ERAGE DETERMINATIONS’’;

8 (2) by inserting ‘‘or legislative change in bene9 fits required to be provided under this part’’ after

10 ‘‘national coverage determination’’;

11 (3) in subparagraph (A), by inserting ‘‘or legis12 lative change in benefits’’ after ‘‘such determina13 tion’’;

14 (4) in subparagraph (B), by inserting ‘‘or legis15 lative change’’ after ‘‘if such coverage determina16 tion’’; and

17 (5) by adding at the end the following:

18 ‘‘The projection under the previous sentence shall be

19 based on an analysis by the Chief Actuary of the

20 Health Care Financing Administration of the actu21 arial costs associated with the coverage determina22 tion or legislative change in benefits.’’.

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

24 this section are effective on the date of the enactment of

25 this Act and shall apply to national coverage determina-
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1 tions and legislative changes in benefits occurring on or

2 after such date.

3 SEC. 612. RESTRICTION ON IMPLEMENTATION OF SIGNIFI4 CANT NEW REGULATORY REQUIREMENTS

5 MIDYEAR.

6 (a) IN GENERAL.—Section 1856(b) (42 U.S.C.

7 1395w–26(b)) is amended by adding at the end the fol8 lowing new paragraph:

9 ‘‘(4) PROHIBITION OF MIDYEAR IMPLEMENTA10 TION OF SIGNIFICANT NEW REGULATORY REQUIRE11 MENTS.—The Secretary may not implement, other

12 than at the beginning of a calendar year, regulations

13 under this section that impose new, significant regu14 latory requirements on a Medicare+Choice organiza15 tion or plan.’’.

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

17 subsection (a) takes effect on the date of the enactment

18 of this Act.

19 SEC. 613. TIMELY APPROVAL OF MARKETING MATERIAL

20 THAT FOLLOWS MODEL MARKETING LAN21 GUAGE.

22 (a) IN GENERAL.—Section 1851(h) (42 U.S.C.

23 1395w–21(h)) is amended—
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1 (1) in paragraph (1)(A), by inserting ‘‘(or 10

2 days in the case described in paragraph (5))’’ after

3 ‘‘45 days’’; and

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

5 paragraph:

6 ‘‘(5) SPECIAL TREATMENT OF MARKETING MA7 TERIAL FOLLOWING MODEL MARKETING LAN8 GUAGE.—In the case of marketing material of an or9 ganization that uses, without modification, proposed

10 model language specified by the Secretary, the pe11 riod specified in paragraph (1)(A) shall be reduced

12 from 45 days to 10 days.’’.

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

14 subsection (a) shall apply to marketing material submitted

15 on or after January 1, 2001.

16 SEC. 614. AVOIDING DUPLICATIVE REGULATION.

17 (a) IN GENERAL.—Section 1856(b)(3)(B) (42 U.S.C.

18 1395w–26(b)(3)(B)) is amended—

19 (1) in clause (i), by inserting ‘‘(including cost20 sharing requirements)’’ after ‘‘Benefit require21 ments’’; and

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

23 clause:

24 ‘‘(iv) Requirements relating to mar25 keting materials and summaries and sched-
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1 ules of benefits regarding a

2 Medicare+Choice plan.’’.

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

4 subsection (a) take effect on the date of the enactment

5 of this Act.

6 SEC. 615. ELECTION OF UNIFORM LOCAL COVERAGE POL7 ICY FOR MEDICARE+CHOICE PLAN COVERING

8 MULTIPLE LOCALITIES.

9 Section 1852(a)(2) (42 U.S.C. 1395w–22(a)(2)) is

10 amended by adding at the end the following new subpara11 graph:

12 ‘‘(C) ELECTION OF UNIFORM COVERAGE

13 POLICY.—In the case of a Medicare+Choice or14 ganization that offers a Medicare+Choice plan

15 in an area in which more than one local cov16 erage policy is applied with respect to different

17 parts of the area, the organization may elect to

18 have the local coverage policy for the part of

19 the area that is most beneficial to

20 Medicare+Choice enrollees (as identified by the

21 Secretary) apply with respect to all

22 Medicare+Choice enrollees enrolled in the

23 plan.’’.
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1 SEC. 616. ELIMINATING HEALTH DISPARITIES IN

2 MEDICARE+CHOICE PROGRAM.

3 (a) QUALITY ASSURANCE PROGRAM FOCUS ON RA4 CIAL AND ETHNIC MINORITIES.—Subparagraphs (A) and

5 (B) of section 1852(e)(2) (42 U.S.C. 1395w–22(e)(2)) are

6 each amended by adding at the end the following:

7 ‘‘Such program shall include a separate focus

8 (with respect to all the elements described in

9 this subparagraph) on racial and ethnic minori10 ties.’’.

11 (b) REPORT.—Section 1852(e) (42 U.S.C. 1395w–

12 22(e)) is amended by adding at the end the following new

13 paragraph:

14 ‘‘(5) REPORT TO CONGRESS.—

15 ‘‘(A) IN GENERAL.—Not later than 2 years

16 after the date of the enactment of this para17 graph, and biennially thereafter, the Secretary

18 shall submit to Congress a report regarding

19 how quality assurance programs conducted

20 under this subsection focus on racial and ethnic

21 minorities.

22 ‘‘(B) CONTENTS OF REPORT.—Each such

23 report shall include the following:

24 ‘‘(i) A description of the means by

25 which such programs focus on such racial

26 and ethnic minorities.
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1 ‘‘(ii) An evaluation of the impact of

2 such programs on eliminating health dis3 parities and on improving health outcomes,

4 continuity and coordination of care, man5 agement of chronic conditions, and con6 sumer satisfaction.

7 ‘‘(iii) Recommendations on ways to re8 duce clinical outcome disparities among ra9 cial and ethnic minorities.’’.

10 SEC. 617. MEDICARE+CHOICE PROGRAM COMPATIBILITY

11 WITH EMPLOYER OR UNION GROUP HEALTH

12 PLANS.

13 (a) IN GENERAL.—Section 1857 (42 U.S.C. 1395w–

14 27) is amended by adding at the end the following new

15 subsection:

16 ‘‘(i) MEDICARE+CHOICE PROGRAM COMPATIBILITY

17 WITH EMPLOYER OR UNION GROUP HEALTH PLANS.—

18 To facilitate the offering of Medicare+Choice plans under

19 contracts between Medicare+Choice organizations and

20 employers, labor organizations, or the trustees of a fund

21 established by one or more employers or labor organiza22 tions (or combination thereof ) to furnish benefits to the

23 entity’s employees, former employees (or combination

24 thereof ) or members or former members (or combination

25 thereof ) of the labor organizations, the Secretary may
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1 waive or modify requirements that hinder the design of,

2 the offering of, or the enrollment in such

3 Medicare+Choice plans.’’.

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

5 subsection (a) shall apply with respect to years beginning

6 with 2001.

7 SEC. 618. SPECIAL MEDIGAP ENROLLMENT ANTIDISCRIMI8 NATION PROVISION FOR CERTAIN BENE9 FICIARIES.

10 (a) DISENROLLMENT WINDOW IN ACCORDANCE

11 WITH BENEFICIARY’S CIRCUMSTANCE.—Section

12 1882(s)(3) (42 U.S.C. 1395ss(s)(3)) is amended—

13 (1) in subparagraph (A), in the matter fol14 lowing clause (iii), by striking ‘‘, subject to subpara15 graph (E), seeks to enroll under the policy not later

16 than 63 days after the date of the termination of en17 rollment described in such subparagraph’’ and in18 serting ‘‘seeks to enroll under the policy during the

19 period specified in subparagraph (E)’’; and

20 (2) by striking subparagraph (E) and inserting

21 the following new subparagraph:

22 ‘‘(E) For purposes of subparagraph (A), the time pe23 riod specified in this subparagraph is—

24 ‘‘(i) in the case of an individual described in

25 subparagraph (B)(i), the period beginning on the
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1 date the individual receives a notice of termination

2 or cessation of all supplemental health benefits (or,

3 if no such notice is received, notice that a claim has

4 been denied because of such a termination or ces5 sation) and ending on the date that is 63 days after

6 the applicable notice;

7 ‘‘(ii) in the case of an individual described in

8 clause (ii), (iii), (v), or (vi) of subparagraph (B)

9 whose enrollment is terminated involuntarily, the pe10 riod beginning on the date that the individual re11 ceives a notice of termination and ending on the

12 date that is 63 days after the date the applicable

13 coverage is terminated;

14 ‘‘(iii) in the case of an individual described in

15 subparagraph (B)(iv)(I), the period beginning on the

16 earlier of (I) the date that the individual receives a

17 notice of termination, a notice of the issuer’s bank18 ruptcy or insolvency, or other such similar notice, if

19 any, and (II) the date that the applicable coverage

20 is terminated, and ending on the date that is 63

21 days after the date the coverage is terminated;

22 ‘‘(iv) in the case of an individual described in

23 clause (ii), (iii), (iv)(II), (iv)(III), (v), or (vi) of sub24 paragraph (B) who disenrolls voluntarily, the period

25 beginning on the date that is 60 days before the ef-
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1 fective date of the disenrollment and ending on the

2 date that is 63 days after such effective date; and

3 ‘‘(v) in the case of an individual described in

4 subparagraph (B) but not described in the preceding

5 provisions of this subparagraph, the period begin6 ning on the effective date of the disenrollment and

7 ending on the date that is 63 days after such effec8 tive date.’’.

9 (b) EXTENDED MEDIGAP ACCESS FOR INTERRUPTED

10 TRIAL PERIODS.—Section 1882(s)(3) (42 U.S.C.

11 1395ss(s)(3)), as amended by subsection (a), is further

12 amended by adding at the end the following new subpara13 graph:

14 ‘‘(F)(i) Subject to clause (ii), for purposes of this

15 paragraph—

16 ‘‘(I) in the case of an individual described in

17 subparagraph (B)(v) (or deemed to be so described,

18 pursuant to this subparagraph) whose enrollment

19 with an organization or provider described in sub20 clause (II) of such subparagraph is involuntarily ter21 minated within the first 12 months of such enroll22 ment, and who, without an intervening enrollment,

23 enrolls with another such organization or provider,

24 such subsequent enrollment shall be deemed to be an
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1 initial enrollment described in such subparagraph;

2 and

3 ‘‘(II) in the case of an individual described in

4 clause (vi) of subparagraph (B) (or deemed to be so

5 described, pursuant to this subparagraph) whose en6 rollment with a plan or in a program described in

7 such clause is involuntarily terminated within the

8 first 12 months of such enrollment, and who, with9 out an intervening enrollment, enrolls in another

10 such plan or program, such subsequent enrollment

11 shall be deemed to be an initial enrollment described

12 in such clause.

13 ‘‘(ii) For purposes of clauses (v) and (vi) of subpara14 graph (B), no enrollment of an individual with an organi15 zation or provider described in clause (v)(II), or with a

16 plan or in a program described in clause (vi), may be

17 deemed to be an initial enrollment under this clause after

18 the 2-year period beginning on the date on which the indi19 vidual first enrolled with such an organization, provider,

20 plan, or program.’’.

21 SEC. 619. RESTORING EFFECTIVE DATE OF ELECTIONS AND

22 CHANGES OF ELECTIONS OF

23 MEDICARE+CHOICE PLANS.

24 (a) OPEN ENROLLMENT.—Section 1851(f )(2) (42

25 U.S.C. 1395w–21(f )(2)) is amended by striking ‘‘, except
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1 that if such election or change is made after the 10th day

2 of any calendar month, then the election or change shall

3 not take effect until the first day of the second calendar

4 month following the date on which the election or change

5 is made’’.

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

7 this section shall apply to elections and changes of cov8 erage made on or after June 1, 2001.

9 SEC. 620. PERMITTING ESRD BENEFICIARIES TO ENROLL

10 IN ANOTHER MEDICARE+CHOICE PLAN IF

11 THE PLAN IN WHICH THEY ARE ENROLLED IS

12 TERMINATED.

13 (a) IN GENERAL.—Section 1851(a)(3)(B) (42 U.S.C.

14 1395w–21(a)(3)(B)) is amended by striking ‘‘except that’’

15 and all that follows and inserting the following: ‘‘except

16 that—

17 ‘‘(i) an individual who develops end18 stage renal disease while enrolled in a

19 Medicare+Choice plan may continue to be

20 enrolled in that plan; and

21 ‘‘(ii) in the case of such an individual

22 who is enrolled in a Medicare+Choice plan

23 under clause (i) (or subsequently under

24 this clause), if the enrollment is discon25 tinued under circumstances described in
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1 section 1851(e)(4)(A), then the individual

2 will be treated as a ‘Medicare+Choice eli3 gible individual’ for purposes of electing to

4 continue enrollment in another

5 Medicare+Choice plan.’’.

6 (b) EFFECTIVE DATE.—

7 (1) IN GENERAL.—The amendment made by

8 subsection (a) shall apply to terminations and

9 discontinuations occurring on or after the date of

10 the enactment of this Act.

11 (2) APPLICATION TO PRIOR PLAN TERMI12 NATIONS.—Clause (ii) of section 1851(a)(3)(B) of

13 the Social Security Act (as inserted by subsection

14 (a)) shall also apply to individuals whose enrollment

15 in a Medicare+Choice plan was terminated or dis16 continued after December 31, 1998, and before the

17 date of the enactment of this Act. In applying this

18 paragraph, such an individual shall be treated, for

19 purposes of part C of title XVIII of the Social Secu20 rity Act, as having discontinued enrollment in such

21 a plan as of the date of the enactment of this Act.
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1 SEC. 621. PROVIDING CHOICE FOR SKILLED NURSING FA2 CILITY SERVICES UNDER THE

3 MEDICARE+CHOICE PROGRAM.

4 (a) IN GENERAL.—Section 1852 (42 U.S.C. 1395w–

5 22) is amended by adding at the end the following new

6 subsection:

7 ‘‘(l) RETURN TO HOME SKILLED NURSING FACILI8 TIES FOR COVERED POST-HOSPITAL EXTENDED CARE

9 SERVICES.—

10 ‘‘(1) ENSURING RETURN TO HOME SNF.—

11 ‘‘(A) IN GENERAL.—In providing coverage

12 of post-hospital extended care services, a

13 Medicare+Choice plan shall provide for such

14 coverage through a home skilled nursing facility

15 if the following conditions are met:

16 ‘‘(i) ENROLLEE ELECTION.—The en17 rollee elects to receive such coverage

18 through such facility.

19 ‘‘(ii) SNF AGREEMENT.—The facility

20 has a contract with the Medicare+Choice

21 organization for the provision of such serv22 ices, or the facility agrees to accept sub23 stantially similar payment under the same

24 terms and conditions that apply to simi25 larly situated skilled nursing facilities that

26 are under contract with the
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1 Medicare+Choice organization for the pro2 vision of such services and through which

3 the enrollee would otherwise receive such

4 services.

5 ‘‘(B) MANNER OF PAYMENT TO HOME

6 SNF.—The organization shall provide payment

7 to the home skilled nursing facility consistent

8 with the contract or the agreement described in

9 subparagraph (A)(ii), as the case may be.

10 ‘‘(2) NO LESS FAVORABLE COVERAGE.—The

11 coverage provided under paragraph (1) (including

12 scope of services, cost-sharing, and other criteria of

13 coverage) shall be no less favorable to the enrollee

14 than the coverage that would be provided to the en15 rollee with respect to a skilled nursing facility the

16 post-hospital extended care services of which are

17 otherwise covered under the Medicare+Choice plan.

18 ‘‘(3) RULE OF CONSTRUCTION.—Nothing in

19 this subsection shall be construed to do the fol20 lowing:

21 ‘‘(A) To require coverage through a skilled

22 nursing facility that is not otherwise qualified

23 to provide benefits under part A for medicare

24 beneficiaries not enrolled in a Medicare+Choice

25 plan.
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1 ‘‘(B) To prevent a skilled nursing facility

2 from refusing to accept, or imposing conditions

3 upon the acceptance of, an enrollee for the re4 ceipt of post-hospital extended care services.

5 ‘‘(4) DEFINITIONS.—In this subsection:

6 ‘‘(A) HOME SKILLED NURSING FACIL7 ITY.—The term ‘home skilled nursing facility’

8 means, with respect to an enrollee who is enti9 tled to receive post-hospital extended care serv10 ices under a Medicare+Choice plan, any of the

11 following skilled nursing facilities:

12 ‘‘(i) SNF RESIDENCE AT TIME OF AD13 MISSION.—The skilled nursing facility in

14 which the enrollee resided at the time of

15 admission to the hospital preceding the re16 ceipt of such post-hospital extended care

17 services.

18 ‘‘(ii) SNF IN CONTINUING CARE RE19 TIREMENT COMMUNITY.—A skilled nursing

20 facility that is providing such services

21 through a continuing care retirement com22 munity (as defined in subparagraph (B))

23 which provided residence to the enrollee at

24 the time of such admission.
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1 ‘‘(iii) SNF RESIDENCE OF SPOUSE AT

2 TIME OF DISCHARGE.—The skilled nursing

3 facility in which the spouse of the enrollee

4 is residing at the time of discharge from

5 such hospital.

6 ‘‘(B) CONTINUING CARE RETIREMENT

7 COMMUNITY.—The term ‘continuing care retire8 ment community’ means, with respect to an en9 rollee in a Medicare+Choice plan, an arrange10 ment under which housing and health-related

11 services are provided (or arranged) through an

12 organization for the enrollee under an agree13 ment that is effective for the life of the enrollee

14 or for a specified period.’’.

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

16 subsection (a) shall apply with respect to contracts entered

17 into or renewed on or after the date of the enactment of

18 this Act.

19 (c) MEDPAC STUDY.—

20 (1) STUDY.—The Medicare Payment Advisory

21 Commission shall conduct a study analyzing the ef22 fects of the amendment made by subsection (a) on

23 Medicare+Choice organizations. In conducting such

24 study, the Commission shall examine the effects (if

25 any) such amendment has had—
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1 (A) on the scope of additional benefits pro2 vided under the Medicare+Choice program;

3 (B) on the administrative and other costs

4 incurred by Medicare+Choice organizations;

5 and

6 (C) on the contractual relationships be7 tween such organizations and skilled nursing fa8 cilities.

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-
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1 mitted to determine the appropriateness of such as2 sumptions and data.’’.

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

4 subsection (a) shall apply to submissions made on or after

5 May 1, 2001.

6 SEC. 623. INCREASED CIVIL MONEY PENALTY FOR

7 MEDICARE+CHOICE ORGANIZATIONS THAT

8 TERMINATE CONTRACTS MID-YEAR.

9 (a) IN GENERAL.—Section 1857(g)(3) (42 U.S.C.

10 1395w–27(g)(3)) is amended by adding at the end the fol11 lowing new subparagraph:

12 ‘‘(D) Civil monetary penalties of not more

13 than $100,000, or such higher amount as the

14 Secretary may establish by regulation, where

15 the finding under subsection (c)(2)(A) is based

16 on the organization’s termination of its contract

17 under this section other than at a time and in

18 a manner provided for under subsection (a).’’.

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

20 subsection (a) shall apply to terminations occurring after

21 the date of the enactment of this Act.
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1 Subtitle C—Other Managed Care

2 Reforms

3 SEC. 631. ONE-YEAR EXTENSION OF SOCIAL HEALTH MAIN4 TENANCE ORGANIZATION (SHMO) DEM5 ONSTRATION PROJECT.

6 Section 4018(b)(1) of the Omnibus Budget Reconcili7 ation Act of 1987, as amended by section 531(a)(1) of

8 BBRA (113 Stat. 1501A–388), is amended by striking

9 ‘‘18 months’’ and inserting ‘‘30 months’’.

10 SEC. 632. REVISED TERMS AND CONDITIONS FOR EXTEN11 SION OF MEDICARE COMMUNITY NURSING

12 ORGANIZATION (CNO) DEMONSTRATION

13 PROJECT.

14 (a) IN GENERAL.—Section 532 of BBRA (113 Stat.

15 1501A–388) is amended—

16 (1) in subsection (a), by striking the second

17 sentence; and

18 (2) by striking subsection (b) and inserting the

19 following new subsection:

20 ‘‘(b) TERMS AND CONDITIONS.—

21 ‘‘(1) JANUARY THROUGH SEPTEMBER 2000.—

22 For the 9-month period beginning with January

23 2000, any such demonstration project shall be con24 ducted under the same terms and conditions as ap25 plied to such demonstration during 1999.
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1 ‘‘(2) OCTOBER 2000 THROUGH DECEMBER

2 2001.—For the 15-month period beginning with Oc3 tober 2000, any such demonstration project shall be

4 conducted under the same terms and conditions as

5 applied to such demonstration during 1999, except

6 that the following modifications shall apply:

7 ‘‘(A) BASIC CAPITATION RATE.—The basic

8 capitation rate paid for services covered under

9 the project (other than case management serv10 ices) per enrollee per month and furnished

11 during—

12 ‘‘(i) the period beginning with October

13 1, 2000, and ending with December 31,

14 2000, shall be determined by actuarially

15 adjusting the actual capitation rate paid

16 for such services in 1999 for inflation, uti17 lization, and other changes to the CNO

18 service package, and by reducing such ad19 justed capitation rate by 10 percent in the

20 case of the demonstration sites located in

21 Arizona, Minnesota, and Illinois, and 15

22 percent for the demonstration site located

23 in New York; and

24 ‘‘(ii) 2001 shall be determined by ac25 tuarially adjusting the capitation rate de-
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1 termined under clause (i) for inflation, uti2 lization, and other changes to the CNO

3 service package.

4 ‘‘(B) TARGETED CASE MANAGEMENT

5 FEE.—Effective October 1, 2000—

6 ‘‘(i) the case management fee per en7 rollee per month for—

8 ‘‘(I) the period described in sub9 paragraph (A)(i) shall be determined

10 by actuarially adjusting the case man11 agement fee for 1999 for inflation;

12 and

13 ‘‘(II) 2001 shall be determined

14 by actuarially adjusting the amount

15 determined under subclause (I) for in16 flation; and

17 ‘‘(ii) such case management fee shall

18 be paid only for enrollees who are classified

19 as moderately frail or frail pursuant to cri20 teria established by the Secretary.

21 ‘‘(C) GREATER UNIFORMITY IN CLINICAL

22 FEATURES AMONG SITES.—Each project shall

23 implement for each site—

24 ‘‘(i) protocols for periodic telephonic

25 contact with enrollees based on—
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1 ‘‘(I) the results of such standard2 ized written health assessment; and

3 ‘‘(II) the application of appro4 priate care planning approaches;

5 ‘‘(ii) disease management programs

6 for targeted diseases (such as congestive

7 heart failure, arthritis, diabetes, and hy8 pertension) that are highly prevalent in the

9 enrolled populations;

10 ‘‘(iii) systems and protocols to track

11 enrollees through hospitalizations, includ12 ing pre-admission planning, concurrent

13 management during inpatient hospital

14 stays, and post-discharge assessment, plan15 ning, and follow-up; and

16 ‘‘(iv) standardized patient educational

17 materials for specified diseases and health

18 conditions.

19 ‘‘(D) QUALITY IMPROVEMENT.—Each

20 project shall implement at each site once during

21 the 15-month period—

22 ‘‘(i) enrollee satisfaction surveys; and

23 ‘‘(ii) reporting on specified quality in24 dicators for the enrolled population.

25 ‘‘(c) EVALUATION.—
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1 ‘‘(1) PRELIMINARY REPORT.—Not later than

2 July 1, 2001, the Secretary of Health and Human

3 Services shall submit to the Committees on Ways

4 and Means and Commerce of the House of Rep5 resentatives and the Committee on Finance of the

6 Senate a preliminary report that—

7 ‘‘(A) evaluates such demonstration projects

8 for the period beginning July 1, 1997, and end9 ing December 31, 1999, on a site-specific basis

10 with respect to the impact on per beneficiary

11 spending, specific health utilization measures,

12 and enrollee satisfaction; and

13 ‘‘(B) includes a similar evaluation of such

14 projects for the portion of the extension period

15 that occurs after September 30, 2000.

16 ‘‘(2) FINAL REPORT.—The Secretary shall sub17 mit a final report to such Committees on such dem18 onstration projects not later than July 1, 2002.

19 Such report shall include the same elements as the

20 preliminary report required by paragraph (1), but

21 for the period after December 31, 1999.

22 ‘‘(3) METHODOLOGY FOR SPENDING COMPARI23 SONS.—Any evaluation of the impact of the dem24 onstration projects on per beneficiary spending in-
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1 cluded in such reports shall include a comparison

2 of—

3 ‘‘(A) data for all individuals who—

4 ‘‘(i) were enrolled in such demonstra5 tion projects as of the first day of the pe6 riod under evaluation; and

7 ‘‘(ii) were enrolled for a minimum of

8 6 months thereafter; with

9 ‘‘(B) data for a matched sample of individ10 uals who are enrolled under part B of title

11 XVIII of the Social Security Act and are not

12 enrolled in such a project, or in a

13 Medicare+Choice plan under part C of such

14 title, a plan offered by an eligible organization

15 under section 1876 of such Act, or a health

16 care prepayment plan under section

17 1833(a)(1)(A) of such Act.’’.

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

19 subsection (a) shall be effective as if included in the enact20 ment of section 532 of BBRA (113 Stat. 1501A–388).

21 SEC. 633. EXTENSION OF MEDICARE MUNICIPAL HEALTH

22 SERVICES DEMONSTRATION PROJECTS.

23 Section 9215(a) of the Consolidated Omnibus Budget

24 Reconciliation Act of 1985 (42 U.S.C. 1395b–1 note), as

25 amended by section 6135 of the Omnibus Budget Rec-
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1 onciliation Act of 1989, section 13557 of the Omnibus

2 Budget Reconciliation Act of 1993, section 4017 of BBA,

3 and section 534 of BBRA (113 Stat. 1501A–390), is

4 amended by striking ‘‘December 31, 2002’’ and inserting

5 ‘‘December 31, 2004’’.

6 SEC. 634. SERVICE AREA EXPANSION FOR MEDICARE COST

7 CONTRACTS DURING TRANSITION PERIOD.

8 Section 1876(h)(5) (42 U.S.C. 1395mm(h)(5)) is

9 amended—

10 (1) by redesignating subparagraph (B) as sub11 paragraph (C); and

12 (2) by inserting after subparagraph (A), the fol13 lowing new subparagraph:

14 ‘‘(B) Subject to subparagraph (C), the Secretary

15 shall approve an application for a modification to a rea16 sonable cost contract under this section in order to expand

17 the service area of such contract if—

18 ‘‘(i) such application is submitted to the Sec19 retary on or before September 1, 2003; and

20 ‘‘(ii) the Secretary determines that the organi21 zation with the contract continues to meet the re22 quirements applicable to such organizations and con23 tracts under this section.’’.
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1 TITLE VII—MEDICAID

2 SEC. 701. DSH PAYMENTS.

3 (a) MODIFICATIONS TO DSH ALLOTMENTS.—

4 (1) INCREASED ALLOTMENTS FOR FISCAL

5 YEARS 2001 AND 2002.—

6 (A) IN GENERAL.—Section 1923(f ) (42

7 U.S.C. 1396r–4(f )) is amended—

8 (i) in paragraph (2), by striking ‘‘The

9 DSH allotment’’ and inserting ‘‘Subject to

10 paragraph (4), the DSH allotment’’;

11 (ii) by redesignating paragraph (4) as

12 paragraph (6); and

13 (iii) by inserting after paragraph (3)

14 the following new paragraph:

15 ‘‘(4) SPECIAL RULE FOR FISCAL YEARS 2001

16 AND 2002.—

17 ‘‘(A) IN GENERAL.—Notwithstanding para18 graph (2), the DSH allotment for any State

19 for—

20 ‘‘(i) fiscal year 2001, shall be the

21 DSH allotment determined under para22 graph (2) for fiscal year 2000 increased,

23 subject to subparagraph (B) and para24 graph (5), by the percentage change in the

25 consumer price index for all urban con-
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1 sumers (all items; U.S. city average) for

2 fiscal year 2000; and

3 ‘‘(ii) fiscal year 2002, shall be the

4 DSH allotment determined under clause

5 (i) increased, subject to subparagraph (B)

6 and paragraph (5), by the percentage

7 change in the consumer price index for all

8 urban consumers (all items; U.S. city aver9 age) for fiscal year 2001.

10 ‘‘(B) LIMITATION.—Subparagraph (B) of

11 paragraph (3) shall apply to subparagraph (A)

12 of this paragraph in the same manner as that

13 subparagraph (B) applies to paragraph (3)(A).

14 ‘‘(C) NO APPLICATION TO ALLOTMENTS

15 AFTER FISCAL YEAR 2002.—The DSH allotment

16 for any State for fiscal year 2003 or any suc17 ceeding fiscal year shall be determined under

18 paragraph (3) without regard to the DSH allot19 ments determined under subparagraph (A) of

20 this paragraph.’’.

21 (2) SPECIAL RULE FOR MEDICAID DSH ALLOT22 MENT FOR EXTREMELY LOW DSH STATES.—

23 (A) IN GENERAL.—Section 1923(f ) (42

24 U.S.C. 1396r–4(f )), as amended by paragraph
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1 (1), is amended by inserting after paragraph

2 (4) the following new paragraph:

3 ‘‘(5) SPECIAL RULE FOR EXTREMELY LOW DSH

4 STATES.—In the case of a State in which the total

5 expenditures under the State plan (including Federal

6 and State shares) for disproportionate share hospital

7 adjustments under this section for fiscal year 1999,

8 as reported to the Administrator of the Health Care

9 Financing Administration as of August 31, 2000, is

10 greater than 0 but less than 1 percent of the State’s

11 total amount of expenditures under the State plan

12 for medical assistance during the fiscal year, the

13 DSH allotment for fiscal year 2001 shall be in14 creased to 1 percent of the State’s total amount of

15 expenditures under such plan for such assistance

16 during such fiscal year. In subsequent fiscal years,

17 such increased allotment is subject to an increase for

18 inflation as provided in paragraph (3)(A).’’.

19 (B) CONFORMING AMENDMENT.—Section

20 1923(f )(3)(A) (42 U.S.C. 1396r–4(f )(3)(A)) is

21 amended by inserting ‘‘and paragraph (5)’’

22 after ‘‘subparagraph (B)’’.

23 (3) EFFECTIVE DATE.—The amendments made

24 by paragraphs (1) and (2) take effect on the date

25 the final regulation required under section 705(a)
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1 (relating to the application of an aggregate upper

2 payment limit test for State medicaid spending for

3 inpatient hospital services, outpatient hospital serv4 ices, nursing facility services, intermediate care facil5 ity services for the mentally retarded, and clinic

6 services provided by government facilities that are

7 not State-owned or operated facilities) is published

8 in the Federal Register.

9 (b) ASSURING IDENTIFICATION OF MEDICAID MAN10 AGED CARE PATIENTS.—

11 (1) IN GENERAL.—Section 1932 (42 U.S.C.

12 1396u–2) is amended by adding at the end the fol13 lowing new subsection:

14 ‘‘(g) IDENTIFICATION OF PATIENTS FOR PURPOSES

15 OF MAKING DSH PAYMENTS.—Each contract with a

16 managed care entity under section 1903(m) or under sec17 tion 1905(t)(3) shall require the entity either—

18 ‘‘(1) to report to the State information nec19 essary to determine the hospital services provided

20 under the contract (and the identity of hospitals pro21 viding such services) for purposes of applying sec22 tions 1886(d)(5)(F) and 1923; or

23 ‘‘(2) to include a sponsorship code in the identi24 fication card issued to individuals covered under this
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1 title in order that a hospital may identify a patient

2 as being entitled to benefits under this title.’’.

3 (2) CLARIFICATION OF COUNTING MANAGED

4 CARE MEDICAID PATIENTS.—Section 1923 (42

5 U.S.C. 1396r–4) is amended—

6 (A) in subsection (a)(2)(D), by inserting

7 after ‘‘the proportion of low-income and med8 icaid patients’’ the following: ‘‘(including such

9 patients who receive benefits through a man10 aged care entity)’’;

11 (B) in subsection (b)(2), by inserting after

12 ‘‘a State plan approved under this title in a pe13 riod’’ the following: ‘‘(regardless of whether

14 such patients receive medical assistance on a

15 fee-for-service basis or through a managed care

16 entity)’’; and

17 (C) in subsection (b)(3)(A)(i), by inserting

18 after ‘‘under a State plan under this title’’ the

19 following: ‘‘(regardless of whether the services

20 were furnished on a fee-for-service basis or

21 through a managed care entity)’’.

22 (3) EFFECTIVE DATES.—

23 (A) The amendment made by paragraph

24 (1) shall apply to contracts as of January 1,

25 2001.
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1 (B) The amendments made by paragraph

2 (2) shall apply to payments made on or after

3 January 1, 2001.

4 (c) APPLICATION OF MEDICAID DSH TRANSITION

5 RULE TO PUBLIC HOSPITALS IN ALL STATES.—

6 (1) IN GENERAL.—During the period described

7 in paragraph (3), with respect to a State, section

8 4721(e) of the Balanced Budget Act of 1997 (Public

9 Law 105–33; 111 Stat. 514), as amended by section

10 607 of BBRA (113 Stat. 1501A–396), shall be ap11 plied as though—

12 (A) ‘‘September 30, 2002’’ were sub13 stituted for ‘‘July 1, 1997’’ each place it ap14 pears;

15 (B) ‘‘hospitals owned or operated by a

16 State (as defined for purposes of title XIX of

17 such Act), or by an instrumentality or a unit of

18 government within a State (as so defined)’’

19 were substituted for ‘‘the State of California’’;

20 (C) paragraph (3) were redesignated as

21 paragraph (4);

22 (D) ‘‘and’’ were omitted from the end of

23 paragraph (2); and

24 (E) the following new paragraph were in25 serted after paragraph (2):
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1 ‘‘(3) ‘(as defined in subparagraph (B) but with2 out regard to clause (ii) of that subparagraph and

3 subject to subsection (d))’ were substituted for ‘(as

4 defined in subparagraph (B))’ in subparagraph (A)

5 of such section; and’’.

6 (2) SPECIAL RULE.—With respect to California,

7 section 4721(e) of the Balanced Budget Act of 1997

8 (Public Law 105–33; 111 Stat. 514), as so amend9 ed, shall be applied without regard to paragraph (1).

10 (3) PERIOD DESCRIBED.—The period described

11 in this paragraph is the period that begins, with re12 spect to a State, on the first day of the first State

13 fiscal year that begins after September 30, 2002,

14 and ends on the last day of the succeeding State fis15 cal year.

16 (4) APPLICATION TO WAIVERS.—With respect

17 to a State operating under a waiver of the require18 ments of title XIX of the Social Security Act (42

19 U.S.C. 1396 et seq.) under section 1115 of such Act

20 (42 U.S.C. 1315), the amount by which any pay21 ment adjustment made by the State under title XIX

22 of such Act (42 U.S.C. 1396 et seq.), after the ap23 plication of section 4721(e) of the Balanced Budget

24 Act of 1997 under paragraph (1) to such State, ex25 ceeds the costs of furnishing hospital services pro-
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1 vided by hospitals described in such section shall be

2 fully reflected as an increase in the baseline expendi3 ture limit for such waiver.

4 (d) ASSISTANCE FOR CERTAIN PUBLIC HOS5 PITALS.—

6 (1) IN GENERAL.—Beginning with fiscal year

7 2002, notwithstanding section 1923(f ) of the Social

8 Security Act (42 U.S.C. 1396r–4(f )) and subject to

9 paragraph (3), with respect to a State, payment ad10 justments made under title XIX of the Social Secu11 rity Act (42 U.S.C. 1396 et seq.) to a hospital de12 scribed in paragraph (2) shall be made without re13 gard to the DSH allotment limitation for the State

14 determined under section 1923(f ) of that Act (42

15 U.S.C. 1396r–4(f )).

16 (2) HOSPITAL DESCRIBED.—A hospital is de17 scribed in this paragraph if the hospital—

18 (A) is owned or operated by a State (as de19 fined for purposes of title XIX of the Social Se20 curity Act), or by an instrumentality or a unit

21 of government within a State (as so defined);

22 (B) as of October 1, 2000—

23 (i) is in existence and operating as a

24 hospital described in subparagraph (A);

25 and
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1 (ii) is not receiving disproportionate

2 share hospital payments from the State in

3 which it is located under title XIX of such

4 Act; and

5 (C) has a low-income utilization rate (as

6 defined in section 1923(b)(3) of the Social Se7 curity Act (42 U.S.C. 1396r–4(b)(3))) in excess

8 of 65 percent.

9 (3) LIMITATION ON EXPENDITURES.—

10 (A) IN GENERAL.—With respect to any fis11 cal year, the aggregate amount of Federal fi12 nancial participation that may be provided for

13 payment adjustments described in paragraph

14 (1) for that fiscal year for all States may not

15 exceed the amount described in subparagraph

16 (B) for the fiscal year.

17 (B) AMOUNT DESCRIBED.—The amount

18 described in this subparagraph for a fiscal year

19 is as follows:

20 (i) For fiscal year 2002, $15,000,000.

21 (ii) For fiscal year 2003,

22 $176,000,000.

23 (iii) For fiscal year 2004,

24 $269,000,000.
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1 (iv) For fiscal year 2005,

2 $330,000,000.

3 (v) For fiscal year 2006 and each fis4 cal year thereafter, $375,000,000.

5 (e) DSH PAYMENT ACCOUNTABILITY STANDARDS.—

6 Not later than September 30, 2002, the Secretary of

7 Health and Human Services shall implement account8 ability standards to ensure that Federal funds provided

9 with respect to disproportionate share hospital adjust10 ments made under section 1923 of the Social Security Act

11 (42 U.S.C. 1396r–4) are used to reimburse States and

12 hospitals eligible for such payment adjustments for pro13 viding uncompensated health care to low-income patients

14 and are otherwise made in accordance with the require15 ments of section 1923 of that Act.

16 SEC. 702. NEW PROSPECTIVE PAYMENT SYSTEM FOR FED17 ERALLY-QUALIFIED HEALTH CENTERS AND

18 RURAL HEALTH CLINICS.

19 (a) IN GENERAL.—Section 1902(a) (42 U.S.C.

20 1396a(a)) is amended—

21 (1) in paragraph (13)—

22 (A) in subparagraph (A), by adding ‘‘and’’

23 at the end;

24 (B) in subparagraph (B), by striking

25 ‘‘and’’ at the end; and
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1 (C) by striking subparagraph (C); and

2 (2) by inserting after paragraph (14) the fol3 lowing new paragraph:

4 ‘‘(15) provide for payment for services de5 scribed in clause (B) or (C) of section 1905(a)(2)

6 under the plan in accordance with subsection (aa);’’.

7 (b) NEW PROSPECTIVE PAYMENT SYSTEM.—Section

8 1902 (42 U.S.C. 1396a) is amended by adding at the end

9 the following:

10 ‘‘(aa) PAYMENT FOR SERVICES PROVIDED BY FED11 ERALLY-QUALIFIED HEALTH CENTERS AND RURAL

12 HEALTH CLINICS.—

13 ‘‘(1) IN GENERAL.—Beginning with fiscal year

14 2001 with respect to services furnished on or after

15 January 1, 2001, and each succeeding fiscal year,

16 the State plan shall provide for payment for services

17 described in section 1905(a)(2)(C) furnished by a

18 Federally-qualified health center and services de19 scribed in section 1905(a)(2)(B) furnished by a

20 rural health clinic in accordance with the provisions

21 of this subsection.

22 ‘‘(2) FISCAL YEAR 2001.—Subject to paragraph

23 (4), for services furnished on and after January 1,

24 2001, during fiscal year 2001, the State plan shall

25 provide for payment for such services in an amount
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1 (calculated on a per visit basis) that is equal to 100

2 percent of the average of the costs of the center or

3 clinic of furnishing such services during fiscal years

4 1999 and 2000 which are reasonable and related to

5 the cost of furnishing such services, or based on

6 such other tests of reasonableness as the Secretary

7 prescribes in regulations under section 1833(a)(3),

8 or, in the case of services to which such regulations

9 do not apply, the same methodology used under sec10 tion 1833(a)(3), adjusted to take into account any

11 increase or decrease in the scope of such services

12 furnished by the center or clinic during fiscal year

13 2001.

14 ‘‘(3) FISCAL YEAR 2002 AND SUCCEEDING FIS15 CAL YEARS.—Subject to paragraph (4), for services

16 furnished during fiscal year 2002 or a succeeding

17 fiscal year, the State plan shall provide for payment

18 for such services in an amount (calculated on a per

19 visit basis) that is equal to the amount calculated for

20 such services under this subsection for the preceding

21 fiscal year—

22 ‘‘(A) increased by the percentage increase

23 in the MEI (as defined in section 1842(i)(3))

24 applicable to primary care services (as defined

25 in section 1842(i)(4)) for that fiscal year; and
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1 ‘‘(B) adjusted to take into account any in2 crease or decrease in the scope of such services

3 furnished by the center or clinic during that fis4 cal year.

5 ‘‘(4) ESTABLISHMENT OF INITIAL YEAR PAY6 MENT AMOUNT FOR NEW CENTERS OR CLINICS.—In

7 any case in which an entity first qualifies as a Fed8 erally-qualified health center or rural health clinic

9 after fiscal year 2000, the State plan shall provide

10 for payment for services described in section

11 1905(a)(2)(C) furnished by the center or services

12 described in section 1905(a)(2)(B) furnished by the

13 clinic in the first fiscal year in which the center or

14 clinic so qualifies in an amount (calculated on a per

15 visit basis) that is equal to 100 percent of the costs

16 of furnishing such services during such fiscal year

17 based on the rates established under this subsection

18 for the fiscal year for other such centers or clinics

19 located in the same or adjacent area with a similar

20 case load or, in the absence of such a center or clin21 ic, in accordance with the regulations and method22 ology referred to in paragraph (2) or based on such

23 other tests of reasonableness as the Secretary may

24 specify. For each fiscal year following the fiscal year

25 in which the entity first qualifies as a Federally-
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1 qualified health center or rural health clinic, the

2 State plan shall provide for the payment amount to

3 be calculated in accordance with paragraph (3).

4 ‘‘(5) ADMINISTRATION IN THE CASE OF MAN5 AGED CARE.—

6 ‘‘(A) IN GENERAL.—In the case of services

7 furnished by a Federally-qualified health center

8 or rural health clinic pursuant to a contract be9 tween the center or clinic and a managed care

10 entity (as defined in section 1932(a)(1)(B)), the

11 State plan shall provide for payment to the cen12 ter or clinic by the State of a supplemental pay13 ment equal to the amount (if any) by which the

14 amount determined under paragraphs (2), (3),

15 and (4) of this subsection exceeds the amount

16 of the payments provided under the contract.

17 ‘‘(B) PAYMENT SCHEDULE.—The supple18 mental payment required under subparagraph

19 (A) shall be made pursuant to a payment

20 schedule agreed to by the State and the Feder21 ally-qualified health center or rural health clin22 ic, but in no case less frequently than every 4

23 months.

24 ‘‘(6) ALTERNATIVE PAYMENT METHODOLO25 GIES.—Notwithstanding any other provision of this
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1 section, the State plan may provide for payment in

2 any fiscal year to a Federally-qualified health center

3 for services described in section 1905(a)(2)(C) or to

4 a rural health clinic for services described in section

5 1905(a)(2)(B) in an amount which is determined

6 under an alternative payment methodology that—

7 ‘‘(A) is agreed to by the State and the cen8 ter or clinic; and

9 ‘‘(B) results in payment to the center or

10 clinic of an amount which is at least equal to

11 the amount otherwise required to be paid to the

12 center or clinic under this section.’’.

13 (c) CONFORMING AMENDMENTS.—

14 (1) Section 4712 of the BBA (Public Law 105–

15 33; 111 Stat. 508) is amended by striking sub16 section (c).

17 (2) Section 1915(b) (42 U.S.C. 1396n(b)) is

18 amended by striking ‘‘1902(a)(13)(C)’’ and inserting

19 ‘‘1902(a)(15), 1902(aa),’’.

20 (d) GAO STUDY OF FUTURE REBASING.—The

21 Comptroller General of the United States shall provide for

22 a study on the need for, and how to, rebase or refine costs

23 for making payment under the medicaid program for serv24 ices provided by Federally-qualified health centers and

25 rural health clinics (as provided under the amendments
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1 made by this section). The Comptroller General shall pro2 vide for submittal of a report on such study to Congress

3 by not later than 4 years after the date of the enactment

4 of this Act.

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

6 this section take effect on January 1, 2001, and shall

7 apply to services furnished on or after such date.

8 SEC. 703. STREAMLINED APPROVAL OF CONTINUED STATE9 WIDE SECTION 1115 MEDICAID WAIVERS.

10 (a) IN GENERAL.—Section 1115 (42 U.S.C. 1315)

11 is amended by adding at the end the following new sub12 section:

13 ‘‘(f ) An application by the chief executive officer of

14 a State for an extension of a waiver project the State is

15 operating under an extension under subsection (e) (in this

16 subsection referred to as the ‘waiver project’) shall be sub17 mitted and approved or disapproved in accordance with

18 the following:

19 ‘‘(1) The application for an extension of the

20 waiver project shall be submitted to the Secretary at

21 least 120 days prior to the expiration of the current

22 period of the waiver project.

23 ‘‘(2) Not later than 45 days after the date such

24 application is received by the Secretary, the Sec25 retary shall notify the State if the Secretary intends
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1 to review the terms and conditions of the waiver

2 project. A failure to provide such notification shall

3 be deemed to be an approval of the application.

4 ‘‘(3) Not later than 45 days after the date a no5 tification is made in accordance with paragraph (2),

6 the Secretary shall inform the State of proposed

7 changes in the terms and conditions of the waiver

8 project. A failure to provide such information shall

9 be deemed to be an approval of the application.

10 ‘‘(4) During the 30-day period that begins on

11 the date information described in paragraph (3) is

12 provided to a State, the Secretary shall negotiate re13 vised terms and conditions of the waiver project with

14 the State.

15 ‘‘(5)(A) Not later than 120 days after the date

16 an application for an extension of the waiver project

17 is submitted to the Secretary (or such later date

18 agreed to by the chief executive officer of the State),

19 the Secretary shall—

20 ‘‘(i) approve the application subject to such

21 modifications in the terms and conditions—

22 ‘‘(I) as have been agreed to by the

23 Secretary and the State; or

24 ‘‘(II) in the absence of such agree25 ment, as are determined by the Secretary
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1 to be reasonable, consistent with the over2 all objectives of the waiver project, and not

3 in violation of applicable law; or

4 ‘‘(ii) disapprove the application.

5 ‘‘(B) A failure by the Secretary to approve or

6 disapprove an application submitted under this sub7 section in accordance with the requirements of sub8 paragraph (A) shall be deemed to be an approval of

9 the application subject to such modifications in the

10 terms and conditions as have been agreed to (if any)

11 by the Secretary and the State.

12 ‘‘(6) An approval of an application for an exten13 sion of a waiver project under this subsection shall

14 be for a period not to exceed 3 years.

15 ‘‘(7) An extension of a waiver project under this

16 subsection shall be subject to the final reporting and

17 evaluation requirements of paragraphs (4) and (5)

18 of subsection (e) (taking into account the extension

19 under this subsection with respect to any timing re20 quirements imposed under those paragraphs).’’.

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

22 subsection (a) shall apply to requests for extensions of

23 demonstration projects pending or submitted on or after

24 the date of the enactment of this Act.
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1 SEC. 704. MEDICAID COUNTY-ORGANIZED HEALTH SYS2 TEMS.

3 (a) IN GENERAL.—Section 9517(c)(3)(C) of the

4 Comprehensive Omnibus Budget Reconciliation Act of

5 1985 is amended by striking ‘‘10 percent’’ and inserting

6 ‘‘14 percent’’.

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

8 subsection (a) takes effect on the date of the enactment

9 of this Act.

10 SEC. 705. DEADLINE FOR ISSUANCE OF FINAL REGULATION

11 RELATING TO MEDICAID UPPER PAYMENT

12 LIMITS.

13 (a) IN GENERAL.—Not later than December 31,

14 2000, the Secretary of Health and Human Services (in

15 this section referred to as the ‘‘Secretary’’), notwith16 standing any requirement of the Administrative Proce17 dures Act under chapter 5 of title 5, United States Code,

18 or any other provision of law, shall issue under sections

19 447.272, 447.304, and 447.321 of title 42, Code of Fed20 eral Regulations (and any other section of part 447 of title

21 42, Code of Federal Regulations that the Secretary deter22 mines is appropriate), a final regulation based on the pro23 posed rule announced on October 5, 2000, that—

24 (1) modifies the upper payment limit test ap25 plied to State medicaid spending for inpatient hos26 pital services, outpatient hospital services, nursing
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1 facility services, intermediate care facility services

2 for the mentally retarded, and clinic services by ap3 plying an aggregate upper payment limit to pay4 ments made to government facilities that are not

5 State-owned or operated facilities; and

6 (2) provides for a transition period in accord7 ance with subsection (b).

8 (b) TRANSITION PERIOD.—

9 (1) IN GENERAL.—The final regulation required

10 under subsection (a) shall provide that, with respect

11 to a State described in paragraph (3), the State

12 shall be considered to be in compliance with the final

13 regulation required under subsection (a) so long as,

14 for each State fiscal year during the period de15 scribed in paragraph (4), the State reduces pay16 ments under a State medicaid plan payment provi17 sion or methodology described in paragraph (3) (in18 cluding a payment provision or methodology de19 scribed in that paragraph that was approved under

20 a waiver of such plan), or reduces the actual dollar

21 payment levels described in paragraph (3)(B), so

22 that the amount of the payments that would other23 wise have been made under such provision, method24 ology, or payment levels by the State for any State

25 fiscal year during such period is reduced by 15 per-
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1 cent in the first such State fiscal year, and by an

2 additional 15 percent in each of the next 5 State fis3 cal years.

4 (2) REQUIREMENT.—Notwithstanding para5 graph (1), the final regulation required under sub6 section (a) shall provide that, for any period (or por7 tion of a period) that occurs on or after October 1,

8 2008, medicaid payments made by a State described

9 in paragraph (3) shall comply with such final regula10 tion.

11 (3) STATE DESCRIBED.—A State described in

12 this paragraph is a State with a State medicaid plan

13 payment provision or methodology (including a pay14 ment provision or methodology approved under a

15 waiver of such plan) which—

16 (A) was approved, deemed to have been ap17 proved, or was in effect on or before October 1,

18 1992 (including any subsequent amendments or

19 successor provisions or methodologies and

20 whether or not a State plan amendment was

21 made to carry out such provision or method22 ology after such date) or under which claims for

23 Federal financial participation were filed and

24 paid on or before such date; and
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1 (B) provides for payments that are in ex2 cess of the upper payment limit test established

3 under the final regulation required under sub4 section (a) (or which would be noncompliant

5 with such final regulation if the actual dollar

6 payment levels made under the payment provi7 sion or methodology in the State fiscal year

8 which begins during 1999 were continued).

9 (4) PERIOD DESCRIBED.—The period described

10 in this paragraph is the period that begins on the

11 first State fiscal year that begins after September

12 30, 2002, and ends on September 30, 2008.

13 SEC. 706. ALASKA FMAP.

14 Notwithstanding the first sentence of section 1905(b)

15 of the Social Security Act (42 U.S.C. 1396d(b)), only with

16 respect to each of fiscal years 2001 through 2005, for pur17 poses of titles XIX and XXI of the Social Security Act,

18 the State percentage used to determine the Federal med19 ical assistance percentage for Alaska shall be that percent20 age which bears the same ratio to 45 percent as the square

21 of the adjusted per capita income of Alaska (determined

22 by dividing the State’s 3-year average per capita income

23 by 1.05) bears to the square of the per capita income of

24 the 50 States.
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1 SEC. 707. ONE-YEAR EXTENSION OF WELFARE-TO-WORK

2 TRANSITION.

3 (a) IN GENERAL.—Section 1925(f ) (42 U.S.C.

4 1396r–6(f )) is amended by striking ‘‘2001’’ and inserting

5 ‘‘2002’’.

6 (b) CONFORMING AMENDMENT.—Section

7 1902(e)(1)(B) (42 U.S.C. 1396a(e)(1)(B)) is amended by

8 striking ‘‘2001’’ and inserting ‘‘2002’’.

9 SEC. 708. ADDITIONAL ENTITIES QUALIFIED TO DETER10 MINE MEDICAID PRESUMPTIVE ELIGIBILITY

11 FOR LOW-INCOME CHILDREN.

12 (a) IN GENERAL.—Section 1920A(b)(3)(A)(i) (42

13 U.S.C. 1396r–1a(b)(3)(A)(i)) is amended—

14 (1) by striking ‘‘or (II)’’ and inserting ‘‘, (II)’’;

15 and

16 (2) by inserting ‘‘eligibility of a child for med17 ical assistance under the State plan under this title,

18 or eligibility of a child for child health assistance

19 under the program funded under title XXI, (III) is

20 an elementary school or secondary school, as such

21 terms are defined in section 14101 of the Elemen22 tary and Secondary Education Act of 1965 (20

23 U.S.C. 8801), an elementary or secondary school op24 erated or supported by the Bureau of Indian Affairs,

25 a State or tribal child support enforcement agency,

26 an organization that is providing emergency food
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1 and shelter under a grant under the Stewart B.

2 McKinney Homeless Assistance Act, or a State or

3 tribal office or entity involved in enrollment in the

4 program under this title, under part A of title IV,

5 under title XXI, or that determines eligibility for

6 any assistance or benefits provided under any pro7 gram of public or assisted housing that receives Fed8 eral funds, including the program under section 8 or

9 any other section of the United States Housing Act

10 of 1937 (42 U.S.C. 1437 et seq.) or under the Na11 tive American Housing Assistance and Self-Deter12 mination Act of 1996 (25 U.S.C. 4101 et seq.), or

13 (IV) any other entity the State so deems, as ap14 proved by the Secretary’’ before the semicolon.

15 (b) TECHNICAL AMENDMENTS.—Section 1920A (42

16 U.S.C. 1396r–1a) is amended—

17 (1) in subsection (b)(3)(A)(i), by striking ‘‘42

18 U.S.C. 9821’’ and inserting ‘‘42 U.S.C. 9831’’;

19 (2) in subsection (b)(3)(A)(ii), by striking

20 ‘‘paragraph (1)(A)’’ and inserting ‘‘paragraph (2)’’;

21 and

22 (3) in subsection (c)(2), in the matter preceding

23 subparagraph (A), by striking ‘‘subsection

24 (b)(1)(A)’’ and inserting ‘‘subsection (b)(2)’’.
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1 SEC. 709. DEVELOPMENT OF UNIFORM QMB/SLMB APPLICA2 TION FORM.

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

4 1396d(p)) is amended by adding at the end the following

5 new paragraph:

6 ‘‘(5)(A) The Secretary shall develop and distribute to

7 States a simplified application form for use by individuals

8 (including both qualified medicare beneficiaries and speci9 fied low-income medicare beneficiaries) in applying for

10 medical assistance for medicare cost-sharing under this

11 title in the States which elect to use such form. Such form

12 shall be easily readable by applicants and uniform nation13 ally.

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

15 consult with beneficiary groups and the States.’’.

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

17 subsection (a) shall take effect 1 year after the date of

18 the enactment of this Act, regardless of whether regula19 tions have been promulgated to carry out such amendment

20 by such date. The Secretary of Health and Human Serv21 ices shall develop the uniform application form under such

22 amendment by not later than 9 months after the date of

23 the enactment of this Act.

24 SEC. 710. TECHNICAL CORRECTIONS.

25 (a) IN GENERAL.—Section 1903(f )(4) (42 U.S.C.

26 1396b(f )(4)) is amended—
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1 (1) by inserting ‘‘1902(a)(10)(A)(ii)(XVII),’’

2 after ‘‘1902(a)(10)(A)(ii)(XVI),’’; and

3 (2) by inserting ‘‘1902(a)(10)(A)(ii)(XVIII),’’

4 after ‘‘1902(a)(10)(A)(ii)(XVII),’’.

5 (b) EFFECTIVE DATES.—(1) The amendment made

6 by subsection (a)(1) shall be effective as if included in the

7 enactment of section 121 of the Foster Care Independence

8 Act of 1999 (Public Law 106–169).

9 (2) The amendment made by subsection (a)(2) shall

10 be effective as if included in the enactment of the Breast

11 and Cervical Cancer Prevention and Treatment Act of

12 2000 (Public Law 106–354).

13 TITLE VIII—STATE CHILDREN’S

14 HEALTH INSURANCE PROGRAM

15 SEC. 801. SPECIAL RULE FOR REDISTRIBUTION AND AVAIL16 ABILITY OF UNUSED FISCAL YEAR 1998 AND

17 1999 SCHIP ALLOTMENTS.

18 (a) CHANGE IN RULES FOR REDISTRIBUTION AND

19 RETENTION OF UNUSED SCHIP ALLOTMENTS FOR FIS20 CAL YEARS 1998 AND 1999.—Section 2104 (42 U.S.C.

21 1397dd) is amended by adding at the end the following

22 new subsection:

23 ‘‘(g) RULE FOR REDISTRIBUTION AND EXTENDED

24 AVAILABILITY OF FISCAL YEARS 1998 AND 1999 ALLOT25 MENTS.—
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1 ‘‘(1) AMOUNT REDISTRIBUTED.—

2 ‘‘(A) IN GENERAL.—In the case of a State

3 that expends all of its allotment under sub4 section (b) or (c) for fiscal year 1998 by the

5 end of fiscal year 2000, or for fiscal year 1999

6 by the end of fiscal year 2001, the Secretary

7 shall redistribute to the State under subsection

8 (f ) (from the fiscal year 1998 or 1999 allot9 ments of other States, respectively, as deter10 mined by the application of paragraphs (2) and

11 (3) with respect to the respective fiscal year)

12 the following amount:

13 ‘‘(i) STATE.—In the case of one of the

14 50 States or the District of Columbia, with

15 respect to—

16 ‘‘(I) the fiscal year 1998 allot17 ment, the amount by which the

18 State’s expenditures under this title in

19 fiscal years 1998, 1999, and 2000 ex20 ceed the State’s allotment for fiscal

21 year 1998 under subsection (b); or

22 ‘‘(II) the fiscal year 1999 allot23 ment, the amount by which the

24 State’s expenditures under this title in

25 fiscal years 1999, 2000, and 2001 ex-
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1 ceed the State’s allotment for fiscal

2 year 1999 under subsection (b).

3 ‘‘(ii) TERRITORY.—In the case of a

4 commonwealth or territory described in

5 subsection (c)(3), an amount that bears

6 the same ratio to 1.05 percent of the total

7 amount described in paragraph (2)(B)(i)(I)

8 as the ratio of the commonwealth’s or ter9 ritory’s fiscal year 1998 or 1999 allotment

10 under subsection (c) (as the case may be)

11 bears to the total of all such allotments for

12 such fiscal year under such subsection.

13 ‘‘(B) EXPENDITURE RULES.—An amount

14 redistributed to a State under this paragraph

15 with respect to fiscal year 1998 or 1999—

16 ‘‘(i) shall not be included in the deter17 mination of the State’s allotment for any

18 fiscal year under this section;

19 ‘‘(ii) notwithstanding subsection (e),

20 shall remain available for expenditure by

21 the State through the end of fiscal year

22 2002; and

23 ‘‘(iii) shall be counted as being ex24 pended with respect to a fiscal year allot-
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1 ment in accordance with applicable regula2 tions of the Secretary.

3 ‘‘(2) EXTENSION OF AVAILABILITY OF PORTION

4 OF UNEXPENDED FISCAL YEARS 1998 AND 1999 AL5 LOTMENTS.—

6 ‘‘(A) IN GENERAL.—Notwithstanding sub7 section (e):

8 ‘‘(i) FISCAL YEAR 1998 ALLOTMENT.—

9 Of the amounts allotted to a State pursu10 ant to this section for fiscal year 1998 that

11 were not expended by the State by the end

12 of fiscal year 2000, the amount specified in

13 subparagraph (B) for fiscal year 1998 for

14 such State shall remain available for ex15 penditure by the State through the end of

16 fiscal year 2002.

17 ‘‘(ii) FISCAL YEAR 1999 ALLOT18 MENT.—Of the amounts allotted to a State

19 pursuant to this subsection for fiscal year

20 1999 that were not expended by the State

21 by the end of fiscal year 2001, the amount

22 specified in subparagraph (B) for fiscal

23 year 1999 for such State shall remain

24 available for expenditure by the State

25 through the end of fiscal year 2002.
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1 ‘‘(B) AMOUNT REMAINING AVAILABLE FOR

2 EXPENDITURE.—The amount specified in this

3 subparagraph for a State for a fiscal year is

4 equal to—

5 ‘‘(i) the amount by which (I) the total

6 amount available for redistribution under

7 subsection (f ) from the allotments for that

8 fiscal year, exceeds (II) the total amounts

9 redistributed under paragraph (1) for that

10 fiscal year; multiplied by

11 ‘‘(ii) the ratio of the amount of such

12 State’s unexpended allotment for that fis13 cal year to the total amount described in

14 clause (i)(I) for that fiscal year.

15 ‘‘(C) USE OF UP TO 10 PERCENT OF RE16 TAINED 1998 ALLOTMENTS FOR OUTREACH AC17 TIVITIES.—Notwithstanding section

18 2105(c)(2)(A), with respect to any State de19 scribed in subparagraph (A)(i), the State may

20 use up to 10 percent of the amount specified in

21 subparagraph (B) for fiscal year 1998 for ex22 penditures for outreach activities approved by

23 the Secretary.

24 ‘‘(3) DETERMINATION OF AMOUNTS.—For pur25 poses of calculating the amounts described in para-
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1 graphs (1) and (2) relating to the allotment for fis2 cal year 1998 or fiscal year 1999, the Secretary

3 shall use the amounts reported by the States not

4 later than December 15, 2000, or November 30,

5 2001, respectively, on HCFA Form 64 or HCFA

6 Form 21, as approved by the Secretary.’’.

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

8 this section shall take effect as if included in the enact9 ment of section 4901 of BBA (111 Stat. 552).

10 SEC. 802. AUTHORITY TO PAY MEDICAID EXPANSION SCHIP

11 COSTS FROM TITLE XXI APPROPRIATION.

12 (a) AUTHORITY TO PAY MEDICAID EXPANSION

13 SCHIP COSTS FROM TITLE XXI APPROPRIATION.—Sec14 tion 2105(a) (42 U.S.C. 1397ee(a)) is amended—

15 (1) by redesignating subparagraphs (A) through

16 (D) of paragraph (2) as clauses (i) through (iv), re17 spectively, and indenting appropriately;

18 (2) by redesignating paragraph (1) as subpara19 graph (C), and indenting appropriately;

20 (3) by redesignating paragraph (2) as subpara21 graph (D), and indenting appropriately;

22 (4) by striking ‘‘(a) IN GENERAL.—’’ and the

23 remainder of the text that precedes subparagraph

24 (C), as so redesignated, and inserting the following:

25 ‘‘(a) PAYMENTS.—
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1 ‘‘(1) IN GENERAL.—Subject to the succeeding

2 provisions of this section, the Secretary shall pay to

3 each State with a plan approved under this title,

4 from its allotment under section 2104, an amount

5 for each quarter equal to the enhanced FMAP (or,

6 in the case of expenditures described in subpara7 graph (B), the Federal medical assistance percent8 age (as defined in the first sentence of section

9 1905(b))) of expenditures in the quarter—

10 ‘‘(A) for child health assistance under the

11 plan for targeted low-income children in the

12 form of providing medical assistance for which

13 payment is made on the basis of an enhanced

14 FMAP under the fourth sentence of section

15 1905(b);

16 ‘‘(B) for the provision of medical assist17 ance on behalf of a child during a presumptive

18 eligibility period under section 1920A;’’; and

19 (5) by adding after subparagraph (D), as so re20 designated, the following new paragraph:

21 ‘‘(2) ORDER OF PAYMENTS.—Payments under

22 paragraph (1) from a State’s allotment shall be

23 made in the following order:

24 ‘‘(A) First, for expenditures for items de25 scribed in paragraph (1)(A).
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1 ‘‘(B) Second, for expenditures for items

2 described in paragraph (1)(B).

3 ‘‘(C) Third, for expenditures for items de4 scribed in paragraph (1)(C).

5 ‘‘(D) Fourth, for expenditures for items

6 described in paragraph (1)(D).’’.

7 (b) ELIMINATION OF REQUIREMENT TO REDUCE

8 TITLE XXI ALLOTMENT BY MEDICAID EXPANSION

9 SCHIP COSTS.—Section 2104 (42 U.S.C. 1397dd) is

10 amended by striking subsection (d).

11 (c) AUTHORITY TO TRANSFER TITLE XXI APPRO12 PRIATIONS TO TITLE XIX APPROPRIATION ACCOUNT AS

13 REIMBURSEMENT FOR MEDICAID EXPENDITURES FOR

14 MEDICAID EXPANSION SCHIP SERVICES.—Notwith15 standing any other provision of law, all amounts appro16 priated under title XXI and allotted to a State pursuant

17 to subsection (b) or (c) of section 2104 of the Social Secu18 rity Act (42 U.S.C. 1397dd) for fiscal years 1998 through

19 2000 (including any amounts that, but for this provision,

20 would be considered to have expired) and not expended

21 in providing child health assistance or related services for

22 which payment may be made pursuant to subparagraph

23 (C) or (D) of section 2105(a)(1) of such Act (42 U.S.C.

24 1397ee(a)(1)) (as amended by subsection (a)), shall be

25 available to reimburse the Grants to States for Medicaid
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1 account in an amount equal to the total payments made

2 to such State under section 1903(a) of such Act (42

3 U.S.C. 1396b(a)) for expenditures in such years for med4 ical assistance described in subparagraphs (A) and (B) of

5 section 2105(a)(1) of such Act (42 U.S.C. 1397ee(a)(1))

6 (as so amended).

7 (d) CONFORMING AMENDMENTS.—

8 (1) Section 1905(b) (42 U.S.C. 1396d(b)) is

9 amended in the fourth sentence by striking ‘‘the

10 State’s allotment under section 2104 (not taking

11 into account reductions under section 2104(d)(2))

12 for the fiscal year reduced by the amount of any

13 payments made under section 2105 to the State

14 from such allotment for such fiscal year’’ and insert15 ing ‘‘the State’s available allotment under section

16 2104’’.

17 (2) Section 1905(u)(1)(B) (42 U.S.C.

18 1396d(u)(1)(B)) is amended by striking ‘‘and sec19 tion 2104(d)’’.

20 (3) Section 2104 (42 U.S.C. 1397dd), as

21 amended by subsection (b), is further amended—

22 (A) in subsection (b)(1), by striking ‘‘and

23 subsection (d)’’; and

24 (B) in subsection (c)(1), by striking ‘‘sub25 ject to subsection (d),’’.
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1 (4) Section 2105(c) (42 U.S.C. 1397ee(c)) is

2 amended—

3 (A) in paragraph (2)(A), by striking all

4 that follows ‘‘Except as provided in this para5 graph,’’ and inserting ‘‘the amount of payment

6 that may be made under subsection (a) for a

7 fiscal year for expenditures for items described

8 in paragraph (1)(D) of such subsection shall

9 not exceed 10 percent of the total amount of ex10 penditures for which payment is made under

11 subparagraphs (A), (C), and (D) of paragraph

12 (1) of such subsection.’’;

13 (B) in paragraph (2)(B), by striking ‘‘de14 scribed in subsection (a)(2)’’ and inserting ‘‘de15 scribed in subsection (a)(1)(D)’’; and

16 (C) in paragraph (6)(B), by striking ‘‘Ex17 cept as otherwise provided by law,’’ and insert18 ing ‘‘Except as provided in subparagraph (A) or

19 (B) of subsection (a)(1) or any other provision

20 of law,’’.

21 (5) Section 2110(a) (42 U.S.C. 1397jj(a)) is

22 amended by striking ‘‘section 2105(a)(2)(A)’’ and

23 inserting ‘‘section 2105(a)(1)(D)(i)’’.

24 (e) TECHNICAL AMENDMENT.—Section

25 2105(d)(2)(B)(ii) (42 U.S.C. 1397ee(d)(2)(B)(ii)) is
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1 amended by striking ‘‘enhanced FMAP under section

2 1905(u)’’ and inserting ‘‘enhanced FMAP under the

3 fourth sentence of section 1905(b)’’.

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

5 this section shall be effective as if included in the enact6 ment of section 4901 of the BBA (111 Stat. 552).

7 SEC. 803. APPLICATION OF MEDICAID CHILD PRESUMPTIVE

8 ELIGIBILITY PROVISIONS.

9 Section 2107(e)(1) (42 U.S.C. 1397gg(e)(1)) is

10 amended by adding at the end the following new subpara11 graph:

12 ‘‘(D) Section 1920A (relating to presump13 tive eligibility for children).’’.

14 TITLE IX—OTHER PROVISIONS

15 Subtitle A—PACE Program

16 SEC. 901. EXTENSION OF TRANSITION FOR CURRENT WAIV17 ERS.

18 Section 4803(d)(2) of BBA is amended—

19 (1) in subparagraph (A), by striking ‘‘24

20 months’’ and inserting ‘‘36 months’’;

21 (2) in subparagraph (A), by striking ‘‘the initial

22 effective date of regulations described in subsection

23 (a)’’ and inserting ‘‘July 1, 2000’’; and

24 (3) in subparagraph (B), by striking ‘‘3 years’’

25 and inserting ‘‘4 years’’.
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1 SEC. 902. CONTINUING OF CERTAIN OPERATING ARRANGE2 MENTS PERMITTED.

3 (a) IN GENERAL.—Section 1894(f )(2) (42 U.S.C.

4 1395eee(f )(2)) is amended by adding at the end the fol5 lowing new subparagraph:

6 ‘‘(C) CONTINUATION OF MODIFICATIONS

7 OR WAIVERS OF OPERATIONAL REQUIREMENTS

8 UNDER DEMONSTRATION STATUS.—If a PACE

9 program operating under demonstration author10 ity has contractual or other operating arrange11 ments which are not otherwise recognized in

12 regulation and which were in effect on July 1,

13 2000, the Secretary (in close consultation with,

14 and with the concurrence of, the State admin15 istering agency) shall permit any such program

16 to continue such arrangements so long as such

17 arrangements are found by the Secretary and

18 the State to be reasonably consistent with the

19 objectives of the PACE program.’’.

20 (b) CONFORMING AMENDMENT.—Section 1934(f )(2)

21 (42 U.S.C. 1396u–4(f )(2)) is amended by adding at the

22 end the following new subparagraph:

23 ‘‘(C) CONTINUATION OF MODIFICATIONS

24 OR WAIVERS OF OPERATIONAL REQUIREMENTS

25 UNDER DEMONSTRATION STATUS.—If a PACE

26 program operating under demonstration author-
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1 ity has contractual or other operating arrange2 ments which are not otherwise recognized in

3 regulation and which were in effect on July 1

4 2000, the Secretary (in close consultation with,

5 and with the concurrence of, the State admin6 istering agency) shall permit any such program

7 to continue such arrangements so long as such

8 arrangements are found by the Secretary and

9 the State to be reasonably consistent with the

10 objectives of the PACE program.’’.

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

12 this section shall be effective as included in the enactment

13 of BBA.

14 SEC. 903. FLEXIBILITY IN EXERCISING WAIVER AUTHORITY.

15 In applying sections 1894(f )(2)(B) and

16 1934(f )(2)(B) of the Social Security Act (42 U.S.C.

17 1395eee(f )(2)(B), 1396u–4(f )(2)(B)), the Secretary of

18 Health and Human Services—

19 (1) shall approve or deny a request for a modi20 fication or a waiver of provisions of the PACE pro21 tocol not later than 90 days after the date the Sec22 retary receives the request; and

23 (2) may exercise authority to modify or waive

24 such provisions in a manner that responds promptly

25 to the needs of PACE programs relating to areas of
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1 employment and the use of community-based pri2 mary care physicians.

3 Subtitle B—Outreach to Eligible

4 Low-Income Medicare Bene5 ficiaries

6 SEC. 911. OUTREACH ON AVAILABILITY OF MEDICARE

7 COST-SHARING ASSISTANCE TO ELIGIBLE

8 LOW-INCOME MEDICARE BENEFICIARIES.

9 (a) OUTREACH.—

10 (1) IN GENERAL.—Title XI (42 U.S.C. 1301 et

11 seq.) is amended by inserting after section 1143 the

12 following new section:

13 ‘‘OUTREACH EFFORTS TO INCREASE AWARENESS OF THE

14 AVAILABILITY OF MEDICARE COST-SHARING

15 ‘‘SEC. 1144. (a) OUTREACH.—

16 ‘‘(1) IN GENERAL.—The Commissioner of So17 cial Security (in this section referred to as the ‘Com18 missioner’) shall conduct outreach efforts to—

19 ‘‘(A) identify individuals entitled to bene20 fits under the medicare program under title

21 XVIII who may be eligible for medical assist22 ance for payment of the cost of medicare cost23 sharing under the medicaid program pursuant

24 to sections 1902(a)(10)(E) and 1933; and
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1 ‘‘(B) notify such individuals of the avail2 ability of such medical assistance under such

3 sections.

4 ‘‘(2) CONTENT OF NOTICE.—Any notice fur5 nished under paragraph (1) shall state that eligi6 bility for medicare cost-sharing assistance under

7 such sections is conditioned upon—

8 ‘‘(A) the individual providing to the State

9 information about income and resources (in the

10 case of an individual residing in a State that

11 imposes an assets test for such eligibility); and

12 ‘‘(B) meeting the applicable eligibility cri13 teria.

14 ‘‘(b) COORDINATION WITH STATES.—

15 ‘‘(1) IN GENERAL.—In conducting the outreach

16 efforts under this section, the Commissioner shall—

17 ‘‘(A) furnish the agency of each State re18 sponsible for the administration of the medicaid

19 program and any other appropriate State agen20 cy with information consisting of the name and

21 address of individuals residing in the State that

22 the Commissioner determines may be eligible

23 for medical assistance for payment of the cost

24 of medicare cost-sharing under the medicaid
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1 program pursuant to sections 1902(a)(10)(E)

2 and 1933; and

3 ‘‘(B) update any such information not less

4 frequently than once per year.

5 ‘‘(2) INFORMATION IN PERIODIC UPDATES.—

6 The periodic updates described in paragraph (1)(B)

7 shall include information on individuals who are or

8 may be eligible for the medical assistance described

9 in paragraph (1)(A) because such individuals have

10 experienced reductions in benefits under title II.’’.

11 (2) AMENDMENT TO TITLE XIX.—Section

12 1905(p) (42 U.S.C. 1396d(p)), as amended by sec13 tion 710(a), is amended by adding at the end the

14 following new paragraph:

15 ‘‘(6) For provisions relating to outreach efforts to in16 crease awareness of the availability of medicare cost-shar17 ing, see section 1144.’’.

18 (b) GAO REPORT.—The Comptroller General of the

19 United States shall conduct a study of the impact of sec20 tion 1144 of the Social Security Act (as added by sub21 section (a)(1)) on the enrollment of individuals for medi22 care cost-sharing under the medicaid program. Not later

23 than 18 months after the date that the Commissioner of

24 Social Security first conducts outreach under section 1144

25 of such Act, the Comptroller General shall submit to Con-
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1 gress a report on such study. The report shall include such

2 recommendations for legislative changes as the Comp3 troller General deems appropriate.

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

5 subsection (a) shall take effect one year after the date of

6 the enactment of this Act.

7 Subtitle C—Maternal and Child

8 Health Block Grant

9 SEC. 921. INCREASE IN AUTHORIZATION OF APPROPRIA10 TIONS FOR THE MATERNAL AND CHILD

11 HEALTH SERVICES BLOCK GRANT.

12 (a) IN GENERAL.—Section 501(a) (42 U.S.C.

13 701(a)) is amended in the matter preceding paragraph (1)

14 by striking ‘‘$705,000,000 for fiscal year 1994’’ and in15 serting ‘‘$850,000,000 for fiscal year 2001’’.

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

17 subsection (a) takes effect on October 1, 2000.

18 Subtitle D—Diabetes

19 SEC. 931. INCREASE IN APPROPRIATIONS FOR SPECIAL DI20 ABETES PROGRAMS FOR TYPE I DIABETES

21 AND INDIANS.

22 (a) SPECIAL DIABETES PROGRAMS FOR TYPE I DIA23 BETES.—Section 330B(b) of the Public Health Service

24 Act (42 U.S.C. 254c–2(b)) is amended—
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1 (1) by striking ‘‘Notwithstanding’’ and insert2 ing the following:

3 ‘‘(1) TRANSFERRED FUNDS.—

4 Notwithstanding’’; 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.—

21 Notwithstanding’’; 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-
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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.’’.

18 Subtitle E—Information on Nurse

19 Staffing

20 SEC. 941. POSTING OF INFORMATION ON NURSING FACIL21 ITY STAFFING.

22 (a) MEDICARE.—Section 1819(b) (42 U.S.C. 1395i–

23 3(b)) is amended by adding at the end the following new

24 paragraph:

25 ‘‘(8) INFORMATION ON NURSE STAFFING.—
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1 ‘‘(A) IN GENERAL.—A skilled nursing fa2 cility shall post daily for each shift the current

3 number of licensed and unlicensed nursing staff

4 directly responsible for resident care in the fa5 cility. The information shall be displayed in a

6 uniform manner (as specified by the Secretary)

7 and in a clearly visible place.

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

9 nursing facility shall, upon request, make avail10 able to the public the nursing staff data de11 scribed in subparagraph (A).’’.

12 (b) MEDICAID.—Section 1919(b) (42 U.S.C.

13 1395r(b)) is amended by adding at the end the following

14 new paragraph:

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

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

17 shall post daily for each shift the current num18 ber of licensed and unlicensed nursing staff di19 rectly responsible for resident care in the facil20 ity. The information shall be displayed in a uni21 form manner (as specified by the Secretary)

22 and in a clearly visible place.

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

24 facility shall, upon request, make available to
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1 the public the nursing staff data described in

2 subparagraph (A).’’.

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

4 this section shall take effect on January 1, 2003.

5 Subtitle F—Adjustment of Multiem6 ployer Plan Benefits Guaran7 teed

8 SEC. 951. MULTIEMPLOYER PLAN BENEFITS GUARANTEED.

9 (a) IN GENERAL.—Section 4022A(c) of the Employee

10 Retirement Income Security Act of 1974 (29 U.S.C.

11 1322a(c)) is amended—

12 (1) by striking ‘‘$5’’ each place it appears in

13 paragraph (1) and inserting ‘‘$11’’;

14 (2) by striking ‘‘$15’’ in paragraph (1)(A)(i)

15 and inserting ‘‘$33’’; and

16 (3) by striking paragraphs (2), (5), and (6) and

17 by redesignating paragraphs (3) and (4) as para18 graphs (2) and (3), respectively.

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

20 this section shall apply to any multiemployer plan that has

21 not received financial assistance (within the meaning of

22 section 4261 of the Employee Retirement Income Security

23 Act of 1974) within the 1-year period ending on the date

24 of the enactment of this Act.

Æ