Note this is a hand enrollment pursuant to Public Law 105–32.

H. R. 2015

One Hundred Fifth Congress

of the

United States of America

AT THE FIRST SESSION

Begun and held at the City of Washington on Tuesday,

the seventh day of January, one thousand nine hundred and ninety-seven

An Act

To provide for reconciliation pursuant to subsections (b)(1) and (c) of section 105

of the concurrent resolution on the budget for fiscal year 1998.

Be it enacted by the Senate and House of Representatives of

the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Balanced Budget Act of 1997’’.

SEC. 2. TABLE OF TITLES.

This Act is organized into titles as follows:

Title I—Food Stamp Provisions

Title II—Housing and Related Provisions

Title III—Communications and Spectrum Allocation Provisions

Title IV—Medicare, Medicaid, and Children’s Health Provisions

Title V—Welfare and Related Provisions

Title VI—Education and Related Provisions

Title VII—Civil Service Retirement and Related Provisions

Title VIII—Veterans and Related Provisions

Title IX—Asset Sales, User Fees, and Miscellaneous Provisions

Title X—Budget Enforcement and Process Provisions

Title XI—District of Columbia Revitalization

TITLE I—FOOD STAMP PROVISIONS

SEC. 1001. EXEMPTION.

Section 6(o) of the Food Stamp Act of 1977 (7 U.S.C. 2015(o))

is amended—

(1) in paragraph (2)(D), by striking ‘‘or (5)’’ and inserting

‘‘(5), or (6)’’;

(2) by redesignating paragraph (6) as paragraph (7); and

(3) by inserting after paragraph (5) the following:

‘‘(6) 15-PERCENT EXEMPTION.— ‘‘(A) DEFINITIONS.—In this paragraph:

‘‘(i) CASELOAD.—The term ‘caseload’ means the

average monthly number of individuals receiving food

stamps during the 12-month period ending the preceding June 30.

‘‘(ii) COVERED INDIVIDUAL.—The term ‘covered

individual’ means a food stamp recipient, or an individual denied eligibility for food stamp benefits solely

due to paragraph (2), who—

‘‘(I) is not eligible for an exception under paragraph (3);
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‘‘(II) does not reside in an area covered by

a waiver granted under paragraph (4);

‘‘(III) is not complying with subparagraph (A),

(B), or (C) of paragraph (2);

‘‘(IV) is not receiving food stamp benefits during the 3 months of eligibility provided under paragraph (2); and

‘‘(V) is not receiving food stamp benefits under

paragraph (5).

‘‘(B) GENERAL RULE.—Subject to subparagraphs (C)

through (G), a State agency may provide an exemption

from the requirements of paragraph (2) for covered individuals.

‘‘(C) FISCAL YEAR 1998.—Subject to subparagraphs (E)

and (G), for fiscal year 1998, a State agency may provide

a number of exemptions such that the average monthly

number of the exemptions in effect during the fiscal year

does not exceed 15 percent of the number of covered individuals in the State in fiscal year 1998, as estimated by

the Secretary, based on the survey conducted to carry

out section 16(c) for fiscal year 1996 and such other factors

as the Secretary considers appropriate due to the timing

and limitations of the survey.

‘‘(D) SUBSEQUENT FISCAL YEARS.—Subject to subparagraphs (E) through (G), for fiscal year 1999 and each subsequent fiscal year, a State agency may provide a number

of exemptions such that the average monthly number of

the exemptions in effect during the fiscal year does not

exceed 15 percent of the number of covered individuals

in the State, as estimated by the Secretary under subparagraph (C), adjusted by the Secretary to reflect changes

in the State’s caseload and the Secretary’s estimate of

changes in the proportion of food stamp recipients covered

by waivers granted under paragraph (4).

‘‘(E) CASELOAD ADJUSTMENTS.—The Secretary shall

adjust the number of individuals estimated for a State

under subparagraph (C) or (D) during a fiscal year if the

number of food stamp recipients in the State varies from

the State’s caseload by more than 10 percent, as determined

by the Secretary.

‘‘(F) EXEMPTION ADJUSTMENTS.—During fiscal year

1999 and each subsequent fiscal year, the Secretary shall

increase or decrease the number of individuals who may

be granted an exemption by a State agency under this

paragraph to the extent that the average monthly number

of exemptions in effect in the State for the preceding fiscal

year under this paragraph is lesser or greater than the

average monthly number of exemptions estimated for the

State agency for such preceding fiscal year under this

paragraph.

‘‘(G) REPORTING REQUIREMENT.—A State agency shall

submit such reports to the Secretary as the Secretary determines are necessary to ensure compliance with this paragraph.’’.
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SEC. 1002. ADDITIONAL FUNDING FOR EMPLOYMENT AND TRAINING.

(a) IN GENERAL.—Section 16(h) of the Food Stamp Act of 1977

(7 U.S.C. 2025(h)) is amended by striking paragraph (1) and inserting the following:

‘‘(1) IN GENERAL.—

‘‘(A) AMOUNTS.—To carry out employment and training

programs, the Secretary shall reserve for allocation to State

agencies, to remain available until expended, from funds

made available for each fiscal year under section 18(a)(1)

the amount of—

‘‘(i) for fiscal year 1996, $75,000,000;

‘‘(ii) for fiscal year 1997, $79,000,000;

‘‘(iii) for fiscal year 1998—

‘‘(I) $81,000,000; and

‘‘(II) an additional amount of $131,000,000;

‘‘(iv) for fiscal year 1999—

‘‘(I) $84,000,000; and

‘‘(II) an additional amount of $131,000,000;

‘‘(v) for fiscal year 2000—

‘‘(I) $86,000,000; and

‘‘(II) an additional amount of $131,000,000;

‘‘(vi) for fiscal year 2001—

‘‘(I) $88,000,000; and

‘‘(II) an additional amount of $131,000,000;

and

‘‘(vii) for fiscal year 2002—

‘‘(I) $90,000,000; and

‘‘(II) an additional amount of $75,000,000.

‘‘(B) ALLOCATION.—

‘‘(i) ALLOCATION FORMULA.—The Secretary shall

allocate the amounts reserved under subparagraph (A)

among the State agencies using a reasonable formula,

as determined and adjusted by the Secretary each fiscal

year, to reflect—

‘‘(I) changes in each State’s caseload (as

defined in section 6(o)(6)(A));

‘‘(II) for fiscal year 1998, the portion of food

stamp recipients who reside in each State who

are not eligible for an exception under section

6(o)(3); and

‘‘(III) for each of fiscal years 1999 through

2002, the portion of food stamp recipients who

reside in each State who are not eligible for an

exception under section 6(o)(3) and who—

‘‘(aa) do not reside in an area subject to

a waiver granted by the Secretary under section 6(o)(4); or

‘‘(bb) do reside in an area subject to a

waiver granted by the Secretary under section

6(o)(4), if the State agency provides employment and training services in the area to food

stamp recipients who are not eligible for an

exception under section 6(o)(3).

‘‘(ii) ESTIMATED FACTORS.—The Secretary shall

estimate the portion of food stamp recipients who
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reside in each State who are not eligible for an exception under section 6(o)(3) based on the survey conducted to carry out subsection (c) for fiscal year 1996

and such other factors as the Secretary considers

appropriate due to the timing and limitations of the

survey.

‘‘(iii) REPORTING REQUIREMENT.—A State agency

shall submit such reports to the Secretary as the Secretary determines are necessary to ensure compliance

with this paragraph.

‘‘(C) REALLOCATION.—If a State agency will not expend

all of the funds allocated to the State agency for a fiscal

year under subparagraph (B), the Secretary shall reallocate

the unexpended funds to other States (during the fiscal

year or the subsequent fiscal year) as the Secretary considers appropriate and equitable.

‘‘(D) MINIMUM ALLOCATION.—Notwithstanding

subparagraph (B), the Secretary shall ensure that each

State agency operating an employment and training program shall receive not less than $50,000 for each fiscal

year.

‘‘(E) USE OF FUNDS.—Of the amount of funds a State

agency receives under subparagraphs (A) through (D) for

a fiscal year, not less than 80 percent of the funds shall

be used by the State agency during the fiscal year to

serve food stamp recipients who—

‘‘(i) are not eligible for an exception under section

6(o)(3); and

‘‘(ii) are placed in and comply with a program

described in subparagraph (B) or (C) of section 6(o)(2).

‘‘(F) MAINTENANCE OF EFFORT.—To receive an allocation of an additional amount made available under subclause (II) of each of clauses (iii) through (vii) of subparagraph (A), a State agency shall maintain the expenditures

of the State agency for employment and training programs

and workfare programs for any fiscal year under paragraph

(2), and administrative expenses described in section

20(g)(1), at a level that is not less than the level of the

expenditures by the State agency to carry out the programs

and such expenses for fiscal year 1996.

‘‘(G) COMPONENT COSTS.—The Secretary shall monitor

State agencies’ expenditure of funds for employment and

training programs provided under this paragraph, including the costs of individual components of State agencies’

programs. The Secretary may determine the reimbursable

costs of employment and training components, and, if the

Secretary makes such a determination, the Secretary shall

determine that the amounts spent or planned to be spent

on the components reflect the reasonable cost of efficiently

and economically providing components appropriate to

recipient employment and training needs, taking into

account, as the Secretary deems appropriate, prior expenditures on the components, the variability of costs among

State agencies’ components, the characteristics of the

recipients to be served, and such other factors as the Secretary considers necessary.’’.
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(b) REPORT TO CONGRESS.—Not later than 30 months after

the date of enactment of this Act, the Secretary of Agriculture

shall submit to the Committee on Agriculture of the House of

Representatives and the Committee on Agriculture, Nutrition, and

Forestry of the Senate a report regarding whether the amounts

made available under section 16(h)(1)(A) of the Food Stamp Act

of 1977 (as a result of the amendment made by subsection (a))

have been used by State agencies to increase the number of work

slots for recipients subject to section 6(o) of the Food Stamp Act

of 1977 (7 U.S.C. 2015(o)) in employment and training programs

and workfare in the most efficient and effective manner practicable.

SEC. 1003. DENIAL OF FOOD STAMPS FOR PRISONERS.

(a) STATE PLANS.—

(1) IN GENERAL.—Section 11(e) of the Food Stamp Act

of 1977 (7 U.S.C. 2020(e)) is amended by striking paragraph

(20) and inserting the following:

‘‘(20) that the State agency shall establish a system and

take action on a periodic basis—

‘‘(A) to verify and otherwise ensure that an individual

does not receive coupons in more than 1 jurisdiction within

the State; and

‘‘(B) to verify and otherwise ensure that an individual

who is placed under detention in a Federal, State, or local

penal, correctional, or other detention facility for more than

30 days shall not be eligible to participate in the food

stamp program as a member of any household, except

that—

‘‘(i) the Secretary may determine that extraordinary circumstances make it impracticable for the

State agency to obtain information necessary to discontinue inclusion of the individual; and

‘‘(ii) a State agency that obtains information collected under section 1611(e)(1)(I)(i)(I) of the Social

Security Act (42 U.S.C. 1382(e)(1)(I)(i)(I)) pursuant to

section 1611(e)(1)(I)(ii)(II) of that Act (42 U.S.C.

1382(e)(1)(I)(ii)(II)), or under another program determined by the Secretary to be comparable to the program carried out under that section, shall be considered in compliance with this subparagraph.’’.

(2) LIMITS ON DISCLOSURE AND USE OF INFORMATION.—

Section 11(e)(8)(E) of the Food Stamp Act of 1977 (7 U.S.C.

2020(e)(8)(E)) is amended by striking ‘‘paragraph (16)’’ and

inserting ‘‘paragraph (16) or (20)(B)’’.

(3) EFFECTIVE DATE.—

(A) IN GENERAL.—Except as provided in subparagraph

(B), the amendments made by this subsection shall take

effect on the date that is 1 year after the date of enactment

of this Act.

(B) EXTENSION.—The Secretary of Agriculture may

grant a State an extension of time to comply with the

amendments made by this subsection, not to exceed beyond

the date that is 2 years after the date of enactment of

this Act, if the chief executive officer of the State submits

a request for the extension to the Secretary—
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(i) stating the reasons why the State is not able

to comply with the amendments made by this subsection by the date that is 1 year after the date of

enactment of this Act;

(ii) providing evidence that the State is making

a good faith effort to comply with the amendments

made by this subsection as soon as practicable; and

(iii) detailing a plan to bring the State into compliance with the amendments made by this subsection

as soon as practicable but not later than the date

of the requested extension.

(b) INFORMATION SHARING.—Section 11 of the Food Stamp Act

of 1977 (7 U.S.C. 2020) is amended by adding at the end the

following:

‘‘(q) DENIAL OF FOOD STAMPS FOR PRISONERS.—The Secretary

shall assist States, to the maximum extent practicable, in

implementing a system to conduct computer matches or other systems to prevent prisoners described in section 11(e)(20)(B) from

participating in the food stamp program as a member of any household.’’.

SEC. 1004. NUTRITION EDUCATION.

Section 11(f) of the Food Stamp Act of 1977 (7 U.S.C. 2020(f))

is amended—

(1) by striking ‘‘(f) To encourage’’ and inserting the following:

‘‘(f) NUTRITION EDUCATION.—

‘‘(1) IN GENERAL.—To encourage’’; and

(2) by adding at the end the following:

‘‘(2) GRANTS.— ‘‘(A) IN GENERAL.—The Secretary shall make available not more than $600,000 for each of fiscal years 1998

through 2001 to pay the Federal share of grants made

to eligible private nonprofit organizations and State agencies to carry out subparagraph (B).

‘‘(B) ELIGIBILITY.—A private nonprofit organization or

State agency shall be eligible to receive a grant under

subparagraph (A) if the organization or agency agrees—

‘‘(i) to use the funds to direct a collaborative effort

to coordinate and integrate nutrition education into

health, nutrition, social service, and food distribution

programs for food stamp participants and other lowincome households; and

‘‘(ii) to design the collaborative effort to reach large

numbers of food stamp participants and other lowincome households through a network of organizations,

including schools, child care centers, farmers’ markets,

health clinics, and outpatient education services.

‘‘(C) PREFERENCE.—In deciding between 2 or more private nonprofit organizations or State agencies that are

eligible to receive a grant under subparagraph (B), the

Secretary shall give a preference to an organization or

agency that conducted a collaborative effort described in

subparagraph (B) and received funding for the collaborative

effort from the Secretary before the date of enactment

of this paragraph.

‘‘(D) FEDERAL SHARE.—
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‘‘(i) IN GENERAL.—Subject to subparagraph (E), the

Federal share of a grant under this paragraph shall

be 50 percent.

‘‘(ii) NO IN-KIND CONTRIBUTIONS.—The non-Federal

share of a grant under this paragraph shall be in

cash.

‘‘(iii) PRIVATE FUNDS.—The non-Federal share of

a grant under this paragraph may include amounts

from private nongovernmental sources.

‘‘(E) LIMIT ON INDIVIDUAL GRANT.—The Federal share

of a grant under subparagraph (A) may not exceed $200,000

for a fiscal year.’’.

SEC. 1005. REGULATIONS; EFFECTIVE DATE.

(a) REGULATIONS.—Not later than 1 year after the date of

enactment of this Act, the Secretary of Agriculture shall promulgate

such regulations as are necessary to implement the amendments

made by this title.

(b) EFFECTIVE DATE.—The amendments made by sections 1001

and 1002 take effect on October 1, 1997, without regard to whether

regulations have been promulgated to implement the amendments

made by such sections.

TITLE II—HOUSING AND RELATED

PROVISIONS

SEC. 2001. TABLE OF CONTENTS.

The table of contents for this title is as follows:

TITLE II—HOUSING AND RELATED PROVISIONS

Sec. 2001. Table of contents.

Sec. 2002. Extension of foreclosure avoidance and borrower assistance provisions

for FHA single family housing mortgage insurance program. Sec. 2003. Adjustment of maximum monthly rents for certain dwelling units in new

construction and substantial or moderate rehabilitation projects assisted

under section 8 rental assistance program. Sec. 2004. Adjustment of maximum monthly rents for non-turnover dwelling units

assisted under section 8 rental assistance program.

SEC. 2002. EXTENSION OF FORECLOSURE AVOIDANCE AND BORROWER

ASSISTANCE PROVISIONS FOR FHA SINGLE FAMILY

HOUSING MORTGAGE INSURANCE PROGRAM.

Section 407 of The Balanced Budget Downpayment Act, I (12

U.S.C. 1710 note) is amended—

(1) in subsection (c)—

(A) by striking ‘‘only’’; and

(B) by inserting ‘‘, on, or after’’ after ‘‘before’’; and

(2) by striking subsection (e).

SEC. 2003. ADJUSTMENT OF MAXIMUM MONTHLY RENTS FOR CERTAIN

DWELLING UNITS IN NEW CONSTRUCTION AND SUBSTANTIAL OR MODERATE REHABILITATION PROJECTS

ASSISTED UNDER SECTION 8 RENTAL ASSISTANCE PROGRAM.

The third sentence of section 8(c)(2)(A) of the United States

Housing Act of 1937 (42 U.S.C. 1437f(c)(2)(A)) is amended by inserting before the period at the end the following: ‘‘, and during fiscal

year 1999 and thereafter’’.
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SEC. 2004. ADJUSTMENT OF MAXIMUM MONTHLY RENTS FOR NONTURNOVER DWELLING UNITS ASSISTED UNDER SECTION

8 RENTAL ASSISTANCE PROGRAM.

The last sentence of section 8(c)(2)(A) of the United States

Housing Act of 1937 (42 U.S.C. 1437f(c)(2)(A)) is amended by inserting before the period at the end the following: ‘‘, and during fiscal

year 1999 and thereafter’’.

TITLE III—COMMUNICATIONS AND

SPECTRUM ALLOCATION PROVISIONS

SEC. 3001. DEFINITIONS.

(a) COMMON TERMINOLOGY.—Except as otherwise provided in

this title, the terms used in this title have the meanings provided

in section 3 of the Communications Act of 1934 (47 U.S.C. 153),

as amended by this section.

(b) ADDITIONAL DEFINITIONS.—Section 3 of the Communications

Act of 1934 (47 U.S.C. 153) is amended—

(1) by redesignating paragraphs (49) through (51) as paragraphs (50) through (52), respectively; and

(2) by inserting after paragraph (48) the following new

paragraph:

‘‘(49) TELEVISION SERVICE.— ‘‘(A) ANALOG TELEVISION SERVICE.—The term ‘analog

television service’ means television service provided pursuant to the transmission standards prescribed by the

Commission in section 73.682(a) of its regulations (47

C.F.R. 73.682(a)).

‘‘(B) DIGITAL TELEVISION SERVICE.—The term ‘digital

television service’ means television service provided pursuant to the transmission standards prescribed by the

Commission in section 73.682(d) of its regulations (47

C.F.R. 73.682(d)).’’.

SEC. 3002. SPECTRUM AUCTIONS.

(a) EXTENSION AND EXPANSION OF AUCTION AUTHORITY.— (1) IN GENERAL.—Section 309(j) of the Communications

Act of 1934 (47 U.S.C. 309(j)) is amended—

(A) by striking paragraphs (1) and (2) and inserting

in lieu thereof the following:

‘‘(1) GENERAL AUTHORITY.—If, consistent with the obligations described in paragraph (6)(E), mutually exclusive applications are accepted for any initial license or construction permit,

then, except as provided in paragraph (2), the Commission

shall grant the license or permit to a qualified applicant through

a system of competitive bidding that meets the requirements

of this subsection.

‘‘(2) EXEMPTIONS.—The competitive bidding authority

granted by this subsection shall not apply to licenses or

construction permits issued by the Commission—

‘‘(A) for public safety radio services, including private

internal radio services used by State and local governments

and non-government entities and including emergency road

services provided by not-for-profit organizations, that—

‘‘(i) are used to protect the safety of life, health,

or property; and
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‘‘(ii) are not made commercially available to the

public;

‘‘(B) for initial licenses or construction permits for digital television service given to existing terrestrial broadcast

licensees to replace their analog television service licenses;

or

‘‘(C) for stations described in section 397(6) of this

Act.’’;

(B) in paragraph (3)—

(i) by inserting after the second sentence the following new sentence: ‘‘The Commission shall, directly

or by contract, provide for the design and conduct

(for purposes of testing) of competitive bidding using

a contingent combinatorial bidding system that permits

prospective bidders to bid on combinations or groups

of licenses in a single bid and to enter multiple alternative bids within a single bidding round.’’;

(ii) by striking ‘‘and’’ at the end of subparagraph

(C);

(iii) by striking the period at the end of subparagraph (D) and inserting ‘‘; and’’; and

(iv) by adding at the end the following new

subparagraph:

‘‘(E) ensure that, in the scheduling of any competitive

bidding under this subsection, an adequate period is

allowed—

‘‘(i) before issuance of bidding rules, to permit

notice and comment on proposed auction procedures;

and

‘‘(ii) after issuance of bidding rules, to ensure that

interested parties have a sufficient time to develop

business plans, assess market conditions, and evaluate

the availability of equipment for the relevant services.’’;

(C) in paragraph (4)—

(i) by striking ‘‘and’’ at the end of subparagraph

(D);

(ii) by striking the period at the end of subparagraph (E) and inserting ‘‘; and’’; and

(iii) by adding at the end the following new

subparagraph:

‘‘(F) prescribe methods by which a reasonable reserve

price will be required, or a minimum bid will be established,

to obtain any license or permit being assigned pursuant

to the competitive bidding, unless the Commission determines that such a reserve price or minimum bid is not

in the public interest.’’;

(D) in paragraph (8)(B)—

(i) by striking the third sentence; and

(ii) by adding at the end the following new sentence: ‘‘No sums may be retained under this subparagraph during any fiscal year beginning after September

30, 1998, if the annual report of the Commission under

section 4(k) for the second preceding fiscal year fails
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to include in the itemized statement required by paragraph (3) of such section a statement of each expenditure made for purposes of conducting competitive bidding under this subsection during such second preceding fiscal year.’’;

(E) in paragraph (11), by striking ‘‘1998’’ and inserting

‘‘2007’’; and

(F) in paragraph (13)(F), by striking ‘‘September 30,

1998’’ and inserting ‘‘the date of enactment of the Balanced

Budget Act of 1997’’.

(2) TERMINATION OF LOTTERY AUTHORITY.—Section 309(i)

of the Communications Act of 1934 (47 U.S.C. 309(i)) is amended—

(A) by striking paragraph (1) and inserting the following:

‘‘(1) GENERAL AUTHORITY.—Except as provided in paragraph (5), if there is more than one application for any initial

license or construction permit, then the Commission shall have

the authority to grant such license or permit to a qualified

applicant through the use of a system of random selection.’’;

and

(B) by adding at the end the following new paragraph:

‘‘(5) TERMINATION OF AUTHORITY.—(A) Except as provided

in subparagraph (B), the Commission shall not issue any license

or permit using a system of random selection under this subsection after July 1, 1997.

‘‘(B) Subparagraph (A) of this paragraph shall not apply

with respect to licenses or permits for stations described in

section 397(6) of this Act.’’.

(3) RESOLUTION OF PENDING COMPARATIVE LICENSING

CASES.—Section 309 of the Communications Act of 1934 (47

U.S.C. 309) is further amended by adding at the end the

following new subsection:

‘‘(l) APPLICABILITY OF COMPETITIVE BIDDING TO PENDING

COMPARATIVE LICENSING CASES.—With respect to competing

applications for initial licenses or construction permits for commercial radio or television stations that were filed with the Commission

before July 1, 1997, the Commission shall—

‘‘(1) have the authority to conduct a competitive bidding

proceeding pursuant to subsection (j) to assign such license

or permit;

‘‘(2) treat the persons filing such applications as the only

persons eligible to be qualified bidders for purposes of such

proceeding; and

‘‘(3) waive any provisions of its regulations necessary to

permit such persons to enter an agreement to procure the

removal of a conflict between their applications during the

180-day period beginning on the date of enactment of the Balanced Budget Act of 1997.’’.

(4) CONFORMING AMENDMENT.—Section 6002 of the Omnibus Budget Reconciliation Act of 1993 is amended by striking

subsection (e).

(5) EFFECTIVE DATE.—Except as otherwise provided

therein, the amendments made by this subsection are effective

on July 1, 1997.

(b) ACCELERATED AVAILABILITY FOR AUCTION OF 1,710–1,755

MEGAHERTZ FROM INITIAL REALLOCATION REPORT.—The band of
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frequencies located at 1,710-1,755 megahertz identified in the initial

reallocation report under section 113(a) of the National Telecommunications and Information Administration Act (47 U.S.C.

923(a)) shall, notwithstanding the timetable recommended under

section 113(e) of such Act and section 115(b)(1) of such Act, be

available in accordance with this subsection for assignment for

commercial use. The Commission shall assign licenses for such

use by competitive bidding commenced after January 1, 2001, pursuant to section 309(j) of the Communications Act of 1934 (47 U.S.C.

309(j)).

(c) COMMISSION OBLIGATION TO MAKE ADDITIONAL SPECTRUM

AVAILABLE BY AUCTION.—

(1) IN GENERAL.—The Commission shall complete all

actions necessary to permit the assignment by September 30,

2002, by competitive bidding pursuant to section 309(j) of the

Communications Act of 1934 (47 U.S.C. 309(j)), of licenses

for the use of bands of frequencies that—

(A) in the aggregate span not less than 55 megahertz;

(B) are located below 3 gigahertz;

(C) have not, as of the date of enactment of this Act—

(i) been designated by Commission regulation for

assignment pursuant to such section;

(ii) been identified by the Secretary of Commerce

pursuant to section 113 of the National Telecommunications and Information Administration Organization

Act (47 U.S.C. 923);

(iii) been allocated for Federal Government use

pursuant to section 305 of the Communications Act

of 1934 (47 U.S.C. 305);

(iv) been designated for reallocation under section

337 of the Communications Act of 1934 (as added

by this Act); or

(v) been allocated or authorized for unlicensed use

pursuant to part 15 of the Commission’s regulations

(47 C.F.R. Part 15), if the operation of services licensed

pursuant to competitive bidding would interfere with

operation of end-user products permitted under such

regulations;

(D) include frequencies at 2,110–2,150 megahertz; and

(E) include 15 megahertz from within the bands of

frequencies at 1,990–2,110 megahertz.

(2) CRITERIA FOR REASSIGNMENT.—In making available

bands of frequencies for competitive bidding pursuant to paragraph (1), the Commission shall—

(A) seek to promote the most efficient use of the electromagnetic spectrum;

(B) consider the cost of relocating existing uses to

other bands of frequencies or other means of communication;

(C) consider the needs of existing public safety radio

services (as such services are described in section

309(j)(2)(A) of the Communications Act of 1934, as amended

by this Act);

(D) comply with the requirements of international

agreements concerning spectrum allocations; and

(E) coordinate with the Secretary of Commerce when

there is any impact on Federal Government spectrum use.
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(3) USE OF BANDS AT 2,110-2,150 MEGAHERTZ.—The Commission shall reallocate spectrum located at 2,110-2,150 megahertz

for assignment by competitive bidding unless the Commission

determines that auction of other spectrum (A) better serves

the public interest, convenience, and necessity, and (B) can

reasonably be expected to produce greater receipts. If the

Commission makes such a determination, then the Commission

shall, within 2 years after the date of enactment of this Act,

identify an alternative 40 megahertz, and report to the Congress an identification of such alternative 40 megahertz for

assignment by competitive bidding.

(4) USE OF 15 MEGAHERTZ FROM BANDS AT 1,990-2,110 MEGAHERTZ.—The Commission shall reallocate 15 megahertz from

spectrum located at 1,990-2,110 megahertz for assignment by

competitive bidding unless the President determines such spectrum cannot be reallocated due to the need to protect incumbent

Federal systems from interference, and that allocation of other

spectrum (A) better serves the public interest, convenience,

and necessity, and (B) can reasonably be expected to produce

comparable receipts. If the President makes such a determination, then the President shall, within 2 years after the date

of enactment of this Act, identify alternative bands of frequencies totalling 15 megahertz, and report to the Congress

an identification of such alternative bands for assignment by

competitive bidding.

(5) NOTIFICATION TO THE SECRETARY OF COMMERCE.—The

Commission shall attempt to accommodate incumbent licensees

displaced under this section by relocating them to other frequencies available for allocation by the Commission. The

Commission shall notify the Secretary of Commerce whenever

the Commission is not able to provide for the effective relocation

of an incumbent licensee to a band of frequencies available

to the Commission for assignment. The notification shall

include—

(A) specific information on the incumbent licensee;

(B) the bands the Commission considered for relocation

of the licensee;

(C) the reasons the licensee cannot be accommodated

in such bands; and

(D) the bands of frequencies identified by the Commission that are—

(i) suitable for the relocation of such licensee; and

(ii) allocated for Federal Government use, but that

could be reallocated pursuant to part B of the National

Telecommunications and Information Administration

Organization Act (as amended by this Act).

(d) IDENTIFICATION AND REALLOCATION OF FREQUENCIES.—

(1) IN GENERAL.—Section 113 of the National Telecommunications and Information Administration Organization Act (47

U.S.C. 923) is amended by adding at the end thereof the following:

‘‘(f) ADDITIONAL REALLOCATION REPORT.—If the Secretary

receives a notice from the Commission pursuant to section 3002(c)(5)

of the Balanced Budget Act of 1997, the Secretary shall prepare

and submit to the President, the Commission, and the Congress

a report recommending for reallocation for use other than by Federal

Government stations under section 305 of the 1934 Act (47 U.S.C.
H. R. 2015—13

305), bands of frequencies that are suitable for the licensees identified in the Commission’s notice. The Commission shall, not later

than one year after receipt of such report, prepare, submit to

the President and the Congress, and implement, a plan for the

immediate allocation and assignment of such frequencies under

the 1934 Act to incumbent licensees described in the Commission’s

notice.

‘‘(g) RELOCATION OF FEDERAL GOVERNMENT STATIONS.—

‘‘(1) IN GENERAL.—In order to expedite the commercial use

of the electromagnetic spectrum and notwithstanding section

3302(b) of title 31, United States Code, any Federal entity

which operates a Federal Government station may accept from

any person payment of the expenses of relocating the Federal

entity’s operations from one or more frequencies to another

frequency or frequencies, including the costs of any modification, replacement, or reissuance of equipment, facilities, operating manuals, or regulations incurred by that entity. Such payments may be in advance of relocation and may be in cash

or in kind. Any such payment in cash shall be deposited in

the account of such Federal entity in the Treasury of the

United States or in a separate account authorized by law.

Funds deposited according to this paragraph shall be available,

without appropriation or fiscal year limitation, only for such

expenses of the Federal entity for which such funds were deposited under this paragraph.

‘‘(2) PROCESS FOR RELOCATION.—Any person seeking to

relocate a Federal Government station that has been assigned

a frequency within a band that has been allocated for mixed

Federal and non-Federal use, or that has been scheduled for

reallocation to non-Federal use, may submit a petition for such

relocation to NTIA. The NTIA shall limit or terminate the

Federal Government station’s operating license within 6 months

after receiving the petition if the following requirements are

met:

‘‘(A) the person seeking relocation of the Federal

Government station has guaranteed to pay all relocation

costs incurred by the Federal entity, including all engineering, equipment, site acquisition and construction, and regulatory fee costs;

‘‘(B) all activities necessary for implementing the

relocation have been completed, including construction of

replacement facilities (if necessary and appropriate) and

identifying and obtaining new frequencies for use by the

relocated Federal Government station (where such station

is not relocating to spectrum reserved exclusively for Federal use);

‘‘(C) any necessary replacement facilities, equipment

modifications, or other changes have been implemented

and tested to ensure that the Federal Government station

is able to successfully accomplish its purposes; and

‘‘(D) NTIA has determined that the proposed use of

the spectrum frequency band to which the Federal entity

will relocate its operations is—

‘‘(i) consistent with obligations undertaken by the

United States in international agreements and with

United States national security and public safety

interests; and
H. R. 2015—14

‘‘(ii) suitable for the technical characteristics of

the band and consistent with other uses of the band.

In exercising its authority under clause (i) of this subparagraph, NTIA shall consult with the Secretary of Defense,

the Secretary of State, or other appropriate officers of the

Federal Government.

‘‘(3) RIGHT TO RECLAIM.—If within one year after the relocation the Federal entity demonstrates to the Commission that

the new facilities or spectrum are not comparable to the facilities or spectrum from which the Federal Government station

was relocated, the person who filed the petition under paragraph (2) for such relocation shall take reasonable steps to

remedy any defects or pay the Federal entity for the expenses

incurred in returning the Federal Government station to the

spectrum from which such station was relocated.

‘‘(h) FEDERAL ACTION TO EXPEDITE SPECTRUM TRANSFER.—Any

Federal Government station which operates on electromagnetic

spectrum that has been identified in any reallocation report under

this section shall, to the maximum extent practicable through the

use of the authority granted under subsection (g) and any other

applicable provision of law, take action to relocate its spectrum

use to other frequencies that are reserved for Federal use or to

consolidate its spectrum use with other Federal Government stations in a manner that maximizes the spectrum available for nonFederal use.

‘‘(i) DEFINITION.—For purposes of this section, the term ‘Federal

entity’ means any department, agency, or other instrumentality

of the Federal Government that utilizes a Government station

license obtained under section 305 of the 1934 Act (47 U.S.C.

305).’’.

(2) Section 114(a) of such Act (47 U.S.C. 924(a)) is amended—

(A) in paragraph (1), by striking ‘‘(a) or (d)(1)’’ and

inserting ‘‘(a), (d)(1), or (f)’’; and

(B) in paragraph (2), by striking ‘‘either’’ and inserting

‘‘any’’.

(e) IDENTIFICATION AND REALLOCATION OF AUCTIONABLE FRE- QUENCIES.—

(1) SECOND REPORT REQUIRED.—Section 113(a) of the

National Telecommunications and Information Administration

Organization Act (47 U.S.C. 923(a)) is amended by inserting

‘‘and within 6 months after the date of enactment of the Balanced Budget Act of 1997’’ after ‘‘Act of 1993’’.

(2) IN GENERAL.—Section 113(b) of such Act (47 U.S.C.

923(b)) is amended—

(A) by striking the caption of paragraph (1) and inserting ‘‘INITIAL REALLOCATION REPORT.—’’;

(B) by inserting ‘‘in the initial report required by subsection (a)’’ after ‘‘recommend for reallocation’’ in paragraph

(1);

(C) by inserting ‘‘or (3)’’ after ‘‘paragraph (1)’’ each

place it appears in paragraph (2); and

(D) by adding at the end thereof the following:

‘‘(3) SECOND REALLOCATION REPORT.—In accordance with

the provisions of this section, the Secretary shall recommend

for reallocation in the second report required by subsection

(a), for use other than by Federal Government stations under
H. R. 2015—15

section 305 of the 1934 Act (47 U.S.C. 305), a band or bands

of frequencies that—

‘‘(A) in the aggregate span not less than 20 megahertz;

‘‘(B) are located below 3 gigahertz; and

‘‘(C) meet the criteria specified in paragraphs (1)

through (5) of subsection (a).’’.

(3) CONFORMING AMENDMENT.—Section 113(d) of such Act

(47 U.S.C. 923(d)) is amended by striking ‘‘final report’’ and

inserting ‘‘initial report’’.

(4) ALLOCATION AND ASSIGNMENT.—Section 115 of such Act

(47 U.S.C. 925) is amended—

(A) by striking ‘‘the report required by section 113(a)’’

in subsection (b) and inserting ‘‘the initial reallocation

report required by section 113(a)’’; and

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

‘‘(c) ALLOCATION AND ASSIGNMENT OF FREQUENCIES IDENTIFIED

IN THE SECOND REALLOCATION REPORT.—

‘‘(1) PLAN AND IMPLEMENTATION.—With respect to the frequencies made available for reallocation pursuant to section

113(b)(3), the Commission shall, not later than one year after

receipt of the second reallocation report required by section

113(a), prepare, submit to the President and the Congress,

and implement, a plan for the immediate allocation and assignment under the 1934 Act of all such frequencies in accordance

with section 309(j) of such Act.

‘‘(2) CONTENTS.—The plan prepared by the Commission

under paragraph (1) shall consist of a schedule of allocation

and assignment of those frequencies in accordance with section

309(j) of the 1934 Act in time for the assignment of those

licenses or permits by September 30, 2002.’’.

SEC. 3003. AUCTION OF RECAPTURED BROADCAST TELEVISION SPECTRUM.

Section 309(j) of the Communications Act of 1934 (47 U.S.C.

309(j)) is amended by adding at the end the following new paragraph:

‘‘(14) AUCTION OF RECAPTURED BROADCAST TELEVISION

SPECTRUM.—

‘‘(A) LIMITATIONS ON TERMS OF TERRESTRIAL TELEVISION

BROADCAST LICENSES.—A television broadcast license that

authorizes analog television service may not be renewed

to authorize such service for a period that extends beyond

December 31, 2006.

‘‘(B) EXTENSION.—The Commission shall extend the

date described in subparagraph (A) for any station that

requests such extension in any television market if the

Commission finds that—

‘‘(i) one or more of the stations in such market

that are licensed to or affiliated with one of the four

largest national television networks are not broadcasting a digital television service signal, and the Commission finds that each such station has exercised due

diligence and satisfies the conditions for an extension

of the Commission’s applicable construction deadlines

for digital television service in that market;

‘‘(ii) digital-to-analog converter technology is not

generally available in such market; or
H. R. 2015—16

‘‘(iii) in any market in which an extension is not

available under clause (i) or (ii), 15 percent or more

of the television households in such market—

‘‘(I) do not subscribe to a multichannel video

programming distributor (as defined in section

602) that carries one of the digital television service programming channels of each of the television

stations broadcasting such a channel in such market; and

‘‘(II) do not have either—

‘‘(a) at least one television receiver capable

of receiving the digital television service signals of the television stations licensed in such

market; or

‘‘(b) at least one television receiver of analog television service signals equipped with

digital-to-analog converter technology capable

of receiving the digital television service signals of the television stations licensed in such

market.

‘‘(C) SPECTRUM REVERSION AND RESALE.—

‘‘(i) The Commission shall—

‘‘(I) ensure that, as licenses for analog television service expire pursuant to subparagraph (A)

or (B), each licensee shall cease using electromagnetic spectrum assigned to such service according to the Commission’s direction; and

‘‘(II) reclaim and organize the electromagnetic

spectrum in a manner consistent with the objectives described in paragraph (3) of this subsection.

‘‘(ii) Licensees for new services occupying spectrum

reclaimed pursuant to clause (i) shall be assigned in

accordance with this subsection. The Commission shall

complete the assignment of such licenses, and report

to the Congress the total revenues from such competitive bidding, by September 30, 2002.

‘‘(D) CERTAIN LIMITATIONS ON QUALIFIED BIDDERS

PROHIBITED.—In prescribing any regulations relating to the

qualification of bidders for spectrum reclaimed pursuant

to subparagraph (C)(i), the Commission, for any license

that may be used for any digital television service where

the grade A contour of the station is projected to encompass

the entirety of a city with a population in excess of 400,000

(as determined using the 1990 decennial census), shall

not—

‘‘(i) preclude any party from being a qualified bidder for such spectrum on the basis of—

‘‘(I) the Commission’s duopoly rule (47 C.F.R.

73.3555(b)); or

‘‘(II) the Commission’s newspaper cross-ownership rule (47 C.F.R. 73.3555(d)); or

‘‘(ii) apply either such rule to preclude such a

party that is a winning bidder in a competitive bidding

for such spectrum from using such spectrum for digital

television service.’’.
H. R. 2015—17

SEC. 3004. ALLOCATION AND ASSIGNMENT OF NEW PUBLIC SAFETY

SERVICES LICENSES AND COMMERCIAL LICENSES.

Title III of the Communications Act of 1934 is amended by

inserting after section 336 (47 U.S.C. 336) the following new section:

‘‘SEC. 337. ALLOCATION AND ASSIGNMENT OF NEW PUBLIC SAFETY

SERVICES LICENSES AND COMMERCIAL LICENSES.

‘‘(a) IN GENERAL.—Not later than January 1, 1998, the Commission shall allocate the electromagnetic spectrum between 746 megahertz and 806 megahertz, inclusive, as follows:

‘‘(1) 24 megahertz of that spectrum for public safety services

according to the terms and conditions established by the

Commission, in consultation with the Secretary of Commerce

and the Attorney General; and

‘‘(2) 36 megahertz of that spectrum for commercial use

to be assigned by competitive bidding pursuant to section 309(j).

‘‘(b) ASSIGNMENT.—The Commission shall—

‘‘(1) commence assignment of the licenses for public safety

services created pursuant to subsection (a) no later than

September 30, 1998; and

‘‘(2) commence competitive bidding for the commercial

licenses created pursuant to subsection (a) after January 1,

2001.

‘‘(c) LICENSING OF UNUSED FREQUENCIES FOR PUBLIC SAFETY

SERVICES.—

‘‘(1) USE OF UNUSED CHANNELS FOR PUBLIC SAFETY SERVICES.—Upon application by an entity seeking to provide public

safety services, the Commission shall waive any requirement

of this Act or its regulations implementing this Act (other

than its regulations regarding harmful interference) to the

extent necessary to permit the use of unassigned frequencies

for the provision of public safety services by such entity. An

application shall be granted under this subsection if the

Commission finds that—

‘‘(A) no other spectrum allocated to public safety services is immediately available to satisfy the requested public

safety service use;

‘‘(B) the requested use is technically feasible without

causing harmful interference to other spectrum users entitled to protection from such interference under the Commission’s regulations;

‘‘(C) the use of the unassigned frequency for the provision of public safety services is consistent with other allocations for the provision of such services in the geographic

area for which the application is made;

‘‘(D) the unassigned frequency was allocated for its

present use not less than 2 years prior to the date on

which the application is granted; and

‘‘(E) granting such application is consistent with the

public interest.

‘‘(2) APPLICABILITY.—Paragraph (1) shall apply to any

application to provide public safety services that is pending

or filed on or after the date of enactment of the Balanced

Budget Act of 1997.

‘‘(d) CONDITIONS ON LICENSES.—In establishing service rules

with respect to licenses granted pursuant to this section, the

Commission—
H. R. 2015—18

‘‘(1) shall establish interference limits at the boundaries

of the spectrum block and service area;

‘‘(2) shall establish any additional technical restrictions

necessary to protect full-service analog television service and

digital television service during a transition to digital television

service;

‘‘(3) may permit public safety services licensees and

commercial licensees—

‘‘(A) to aggregate multiple licenses to create larger

spectrum blocks and service areas; and

‘‘(B) to disaggregate or partition licenses to create

smaller spectrum blocks or service areas; and

‘‘(4) shall establish rules insuring that public safety services

licensees using spectrum reallocated pursuant to subsection

(a)(1) shall not be subject to harmful interference from television broadcast licensees.

‘‘(e) REMOVAL AND RELOCATION OF INCUMBENT BROADCAST

LICENSEES.—

‘‘(1) CHANNELS 60 TO 69.—Any person who holds a television broadcast license to operate between 746 and 806 megahertz may not operate at that frequency after the date on

which the digital television service transition period terminates,

as determined by the Commission.

‘‘(2) INCUMBENT QUALIFYING LOW-POWER STATIONS.—After

making any allocation or assignment under this section, the

Commission shall seek to assure, consistent with the Commission’s plan for allotments for digital television service, that

each qualifying low-power television station is assigned a frequency below 746 megahertz to permit the continued operation

of such station.

‘‘(f) DEFINITIONS.—For purposes of this section:

‘‘(1) PUBLIC SAFETY SERVICES.—The term ‘public safety services’ means services—

‘‘(A) the sole or principal purpose of which is to protect

the safety of life, health, or property;

‘‘(B) that are provided—

‘‘(i) by State or local government entities; or

‘‘(ii) by nongovernmental organizations that are

authorized by a governmental entity whose primary

mission is the provision of such services; and

‘‘(C) that are not made commercially available to the

public by the provider.

‘‘(2) QUALIFYING LOW-POWER TELEVISION STATIONS.—A station is a qualifying low-power television station if, during the

90 days preceding the date of enactment of the Balanced Budget

Act of 1997—

‘‘(A) such station broadcast a minimum of 18 hours

per day;

‘‘(B) such station broadcast an average of at least 3

hours per week of programming that was produced within

the market area served by such station; and

‘‘(C) such station was in compliance with the requirements applicable to low-power television stations.’’.

SEC. 3005. FLEXIBLE USE OF ELECTROMAGNETIC SPECTRUM.

Section 303 of the Communications Act of 1934 (47 U.S.C.

303) is amended by adding at the end thereof the following:
H. R. 2015—19

‘‘(y) Have authority to allocate electromagnetic spectrum so

as to provide flexibility of use, if—

‘‘(1) such use is consistent with international agreements

to which the United States is a party; and

‘‘(2) the Commission finds, after notice and an opportunity

for public comment, that—

‘‘(A) such an allocation would be in the public interest;

‘‘(B) such use would not deter investment in communications services and systems, or technology development;

and

‘‘(C) such use would not result in harmful interference

among users.’’.

SEC. 3006. UNIVERSAL SERVICE FUND PAYMENT SCHEDULE.

(a) APPROPRIATIONS TO THE UNIVERSAL SERVICE FUND.— (1) APPROPRIATION.—There is hereby appropriated to the Commission $3,000,000,000 in fiscal year 2001, which shall

be disbursed on October 1, 2000, to the Administrator of the

Federal universal service support programs established pursuant to section 254 of the Communications Act of 1934 (47

U.S.C. 254), and which may be expended by the Administrator

in support of such programs as provided pursuant to the rules

implementing that section.

(2) RETURN TO TREASURY.—The Administrator shall transfer $3,000,000,000 from the funds collected for such support

programs to the General Fund of the Treasury on October

1, 2001.

(b) FEE ADJUSTMENTS.—The Commission shall direct the

Administrator to adjust payments by telecommunications carriers

and other providers of interstate telecommunications so that the

$3,000,000,000 of the total payments by such carriers or providers

to the Administrator for fiscal year 2001 shall be deferred until

October 1, 2001.

(c) PRESERVATION OF AUTHORITY.—Nothing in this section shall

affect the Administrator’s authority to determine the amounts that

should be expended for universal service support programs pursuant

to section 254 of the Communications Act of 1934 and the rules

implementing that section.

(d) DEFINITION.—For purposes of this section, the term

‘‘Administrator’’ means the Administrator designated by the Federal

Communications Commission to administer Federal universal service support programs pursuant to section 254 of the Communications Act of 1934.

SEC. 3007. DEADLINE FOR COLLECTION

The Commission shall conduct the competitive bidding required

under this title or the amendments made by this title in a manner

that ensures that all proceeds of such bidding are deposited in

accordance with section 309(j)(8) of the Communications Act of

1934 not later than September 30, 2002.

SEC. 3008. ADMINISTRATIVE PROCEDURES FOR SPECTRUM AUCTIONS.

Notwithstanding section 309(b) of the Communications Act of

1934 (47 U.S.C. 309(b)), no application for an instrument of

authorization for frequencies assigned under this title (or amendments made by this title) shall be granted by the Commission

earlier than 7 days following issuance of public notice by the

Commission of the acceptance for filing of such application or of
H. R. 2015—20

any substantial amendment thereto. Notwithstanding section

309(d)(1) of such Act (47 U.S.C. 309(d)(1)), the Commission may

specify a period (no less than 5 days following issuance of such

public notice) for the filing of petitions to deny any application

for an instrument of authorization for such frequencies.

TITLE IV—MEDICARE, MEDICAID, AND

CHILDREN’S HEALTH PROVISIONS

SEC. 4000. AMENDMENTS TO SOCIAL SECURITY ACT AND REFERENCES

TO OBRA; TABLE OF CONTENTS OF TITLE.

(a) AMENDMENTS TO SOCIAL SECURITY ACT.—Except as otherwise specifically provided, whenever in this title an amendment

is expressed in terms of an amendment to or repeal of a section

or other provision, the reference shall be considered to be made

to that section or other provision of the Social Security Act.

(b) REFERENCES TO OBRA.—In this title, the terms ‘‘OBRA–

1986’’, ‘‘OBRA–1987’’, ‘‘OBRA–1989’’, ‘‘OBRA–1990’’, and ‘‘OBRA–

1993’’ refer to the Omnibus Budget Reconciliation Act of 1986

(Public Law 99–509), the Omnibus Budget Reconciliation Act of

1987 (Public Law 100–203), the Omnibus Budget Reconciliation

Act of 1989 (Public Law 101–239), the Omnibus Budget Reconciliation Act of 1990 (Public Law 101–508), and the Omnibus Budget

Reconciliation Act of 1993 (Public Law 103–66), respectively.

(c) TABLE OF CONTENTS OF TITLE.—The table of contents of

this title is as follows:

Sec. 4000. Amendments to Social Security Act and references to OBRA; table of

contents of title.

Subtitle A—Medicare+Choice Program

CHAPTER 1—MEDICARE+CHOICE PROGRAM

SUBCHAPTER A—MEDICARE+CHOICE PROGRAM

Sec. 4001. Establishment of Medicare+Choice program.

‘‘PART C—MEDICARE+CHOICE PROGRAM

‘‘Sec. 1851. Eligibility, election, and enrollment.

‘‘Sec. 1852. Benefits and beneficiary protections.

‘‘Sec. 1853. Payments to Medicare+Choice organizations.

‘‘Sec. 1854. Premiums.

‘‘Sec. 1855. Organizational and financial requirements for Medicare+Choice organizations; provider-sponsored organizations. ‘‘Sec. 1856. Establishment of standards.

‘‘Sec. 1857. Contracts with Medicare+Choice organizations.

‘‘Sec. 1859. Definitions; miscellaneous provisions. Sec. 4002. Transitional rules for current medicare HMO program.

Sec. 4003. Conforming changes in medigap program.

SUBCHAPTER B—SPECIAL RULES FOR MEDICARE+CHOICE MEDICAL SAVINGS ACCOUNTS

Sec. 4006. Medicare+Choice MSA.

CHAPTER 2—DEMONSTRATIONS

SUBCHAPTER A—MEDICARE+CHOICE COMPETITIVE PRICING DEMONSTRATION PROJECT

Sec. 4011. Medicare prepaid competitive pricing demonstration project.

Sec. 4012. Administration through the Office of Competition; advisory committee.

Sec. 4013. Project design based on FEHBP competitive bidding model.

SUBCHAPTER B—SOCIAL HEALTH MAINTENANCE ORGANIZATIONS

Sec. 4014. Social health maintenance organizations (SHMOs).

SUBCHAPTER C—MEDICARE SUBVENTION DEMONSTRATION PROJECT FOR MILITARY

RETIREES

Sec. 4015. Medicare subvention demonstration project for military retirees.
H. R. 2015—21

SUBCHAPTER D—OTHER PROJECTS

Sec. 4016. Medicare coordinated care demonstration project.

Sec. 4017. Orderly transition of municipal health service demonstration projects.

Sec. 4018. Medicare enrollment demonstration project.

Sec. 4019. Extension of certain medicare community nursing organization demonstration projects.

CHAPTER 3—COMMISSIONS

Sec. 4021. National Bipartisan Commission on the Future of Medicare.

Sec. 4022. Medicare Payment Advisory Commission.

CHAPTER 4—MEDIGAP PROTECTIONS

Sec. 4031. Medigap protections.

Sec. 4032. Addition of high deductible medigap policies.

CHAPTER 5—TAX TREATMENT OF HOSPITALS PARTICIPATING IN PROVIDER-SPONSORED

ORGANIZATIONS

Sec. 4041. Tax treatment of hospitals which participate in provider-sponsored organizations.

Subtitle B—Prevention Initiatives

Sec. 4101. Screening mammography.

Sec. 4102. Screening pap smear and pelvic exams.

Sec. 4103. Prostate cancer screening tests.

Sec. 4104. Coverage of colorectal screening.

Sec. 4105. Diabetes self-management benefits.

Sec. 4106. Standardization of medicare coverage of bone mass measurements.

Sec. 4107. Vaccines outreach expansion.

Sec. 4108. Study on preventive and enhanced benefits.

Subtitle C—Rural Initiatives

Sec. 4201. Medicare rural hospital flexibility program.

Sec. 4202. Prohibiting denial of request by rural referral centers for reclassification

on basis of comparability of wages.

Sec. 4203. Hospital geographic reclassification permitted for purposes of disproportionate share payment adjustments.

Sec. 4204. Medicare-dependent, small rural hospital payment extension.

Sec. 4205. Rural health clinic services.

Sec. 4206. Medicare reimbursement for telehealth services.

Sec. 4207. Informatics, telemedicine, and education demonstration project.

Subtitle D—Anti-Fraud and Abuse Provisions and Improvements in Protecting

Program Integrity

CHAPTER 1—REVISIONS TO SANCTIONS FOR FRAUD AND ABUSE

Sec. 4301. Permanent exclusion for those convicted of 3 health care related crimes.

Sec. 4302. Authority to refuse to enter into medicare agreements with individuals

or entities convicted of felonies.

Sec. 4303. Exclusion of entity controlled by family member of a sanctioned individual.

Sec. 4304. Imposition of civil money penalties.

CHAPTER 2—IMPROVEMENTS IN PROTECTING PROGRAM INTEGRITY

Sec. 4311. Improving information to medicare beneficiaries.

Sec. 4312. Disclosure of information and surety bonds.

Sec. 4313. Provision of certain identification numbers.

Sec. 4314. Advisory opinions regarding certain physician self-referral provisions.

Sec. 4315. Replacement of reasonable charge methodology by fee schedules.

Sec. 4316. Application of inherent reasonableness to all part B services other than

physicians’ services.

Sec. 4317. Requirement to furnish diagnostic information.

Sec. 4318. Report by GAO on operation of fraud and abuse control program.

Sec. 4319. Competitive bidding demonstration projects.

Sec. 4320. Prohibiting unnecessary and wasteful medicare payments for certain

items.

Sec. 4321. Nondiscrimination in post-hospital referral to home health agencies and

other entities.

CHAPTER 3—CLARIFICATIONS AND TECHNICAL CHANGES

Sec. 4331. Other fraud and abuse related provisions.
H. R. 2015—22

Subtitle E—Provisions Relating to Part A Only

CHAPTER 1—PAYMENT OF PPS HOSPITALS

Sec. 4401. PPS hospital payment update.

Sec. 4402. Maintaining savings from temporary reduction in capital payments for

PPS hospitals.

Sec. 4403. Disproportionate share.

Sec. 4404. Medicare capital asset sales price equal to book value.

Sec. 4405. Elimination of IME and DSH payments attributable to outlier payments.

Sec. 4406. Increase base payment rate to Puerto Rico hospitals.

Sec. 4407. Certain hospital discharges to post acute care.

Sec. 4408. Reclassification of certain counties as large urban areas under medicare

program.

Sec. 4409. Geographic reclassification for certain disproportionately large hospitals.

Sec. 4410. Floor on area wage index.

CHAPTER 2—PAYMENT OF PPS-EXEMPT HOSPITALS

SUBCHAPTER A—GENERAL PAYMENT PROVISIONS

Sec. 4411. Payment update.

Sec. 4412. Reductions to capital payments for certain PPS-exempt hospitals and

units.

Sec. 4413. Rebasing.

Sec. 4414. Cap on TEFRA limits.

Sec. 4415. Bonus and relief payments.

Sec. 4416. Change in payment and target amount for new providers.

Sec. 4417. Treatment of certain long-term care hospitals.

Sec. 4418. Treatment of certain cancer hospitals.

Sec. 4419. Elimination of exemptions for certain hospitals.

SUBCHAPTER B—PROSPECTIVE PAYMENT SYSTEM FOR PPS-EXEMPT HOSPITALS

Sec. 4421. Prospective payment for inpatient rehabilitation hospital services.

Sec. 4422. Development of proposal on payments for long-term care hospitals.

CHAPTER 3—PAYMENT FOR SKILLED NURSING FACILITIES

Sec. 4431. Extension of cost limits.

Sec. 4432. Prospective payment for skilled nursing facility services.

CHAPTER 4—PROVISIONS RELATED TO HOSPICE SERVICES

Sec. 4441. Payments for hospice services.

Sec. 4442. Payment for home hospice care based on location where care is furnished.

Sec. 4443. Hospice care benefits periods.

Sec. 4444. Other items and services included in hospice care.

Sec. 4445. Contracting with independent physicians or physician groups for hospice

care services permitted.

Sec. 4446. Waiver of certain staffing requirements for hospice care programs in

nonurbanized areas.

Sec. 4447. Limitation on liability of beneficiaries for certain hospice coverage denials.

Sec. 4448. Extending the period for physician certification of an individual’s terminal illness.

Sec. 4449. Effective date.

CHAPTER 5—OTHER PAYMENT PROVISIONS

Sec. 4451. Reductions in payments for enrollee bad debt.

Sec. 4452. Permanent extension of hemophilia pass-through payment.

Sec. 4453. Reduction in part A medicare premium for certain public retirees.

Sec. 4454. Coverage of services in religious nonmedical health care institutions

under the medicare and medicaid programs.

Subtitle F—Provisions Relating to Part B Only

CHAPTER 1—SERVICES OF HEALTH PROFESSIONALS

SUBCHAPTER A—PHYSICIANS’ SERVICES

Sec. 4501. Establishment of single conversion factor for 1998.

Sec. 4502. Establishing update to conversion factor to match spending under sustainable growth rate.

Sec. 4503. Replacement of volume performance standard with sustainable growth

rate.
H. R. 2015—23

Sec. 4504. Payment rules for anesthesia services.

Sec. 4505. Implementation of resource-based methodologies.

Sec. 4506. Dissemination of information on high per discharge relative values for

in-hospital physicians’ services. Sec. 4507. Use of private contracts by medicare beneficiaries.

SUBCHAPTER B—OTHER HEALTH CARE PROFESSIONALS

Sec. 4511. Increased medicare reimbursement for nurse practitioners and clinical

nurse specialists. Sec. 4512. Increased medicare reimbursement for physician assistants.

Sec. 4513. No x-ray required for chiropractic services.

CHAPTER 2—PAYMENT FOR HOSPITAL OUTPATIENT DEPARTMENT SERVICES

Sec. 4521. Elimination of formula-driven overpayments (FDO) for certain outpatient hospital services. Sec. 4522. Extension of reductions in payments for costs of hospital outpatient services.

Sec. 4523. Prospective payment system for hospital outpatient department services.

CHAPTER 3—AMBULANCE SERVICES

Sec. 4531. Payments for ambulance services.

Sec. 4532. Demonstration of coverage of ambulance services under medicare

through contracts with units of local government.

CHAPTER 4—PROSPECTIVE PAYMENT FOR OUTPATIENT REHABILITATION SERVICES

Sec. 4541. Prospective payment for outpatient rehabilitation services.

CHAPTER 5—OTHER PAYMENT PROVISIONS

Sec. 4551. Payments for durable medical equipment.

Sec. 4552. Oxygen and oxygen equipment.

Sec. 4553. Reduction in updates to payment amounts for clinical diagnostic laboratory tests; study on laboratory tests. Sec. 4554. Improvements in administration of laboratory tests benefit.

Sec. 4555. Updates for ambulatory surgical services.

Sec. 4556. Reimbursement for drugs and biologicals.

Sec. 4557. Coverage of oral anti-nausea drugs under chemotherapeutic regimen.

Sec. 4558. Renal dialysis-related services.

Sec. 4559. Temporary coverage restoration for portable electrocardiogram transportation.

CHAPTER 6—PART B PREMIUM AND RELATED PROVISIONS

SUBCHAPTER A—DETERMINATION OF PART B PREMIUM AMOUNT

Sec. 4571. Part B premium.

SUBCHAPTER B—OTHER PROVISIONS RELATED TO PART B PREMIUM

Sec. 4581. Protections under the medicare program for disabled workers who lose

benefits under a group health plan. Sec. 4582. Governmental entities eligible to elect to pay part B premiums for eligible individuals.

Subtitle G—Provisions Relating to Parts A and B

CHAPTER 1—HOME HEALTH SERVICES AND BENEFITS

SUBCHAPTER A—PAYMENTS FOR HOME HEALTH SERVICES

Sec. 4601. Recapturing savings resulting from temporary freeze on payment increases for home health services.

Sec. 4602. Interim payments for home health services.

Sec. 4603. Prospective payment for home health services.

Sec. 4604. Payment based on location where home health service is furnished.

SUBCHAPTER B—HOME HEALTH BENEFITS

Sec. 4611. Modification of part A home health benefit for individuals enrolled under

part B. Sec. 4612. Clarification of part-time or intermittent nursing care.

Sec. 4613. Study on definition of homebound.

Sec. 4614. Normative standards for home health claims denials.

Sec. 4615. No home health benefits based solely on drawing blood.

Sec. 4616. Reports to Congress regarding home health cost containment.

CHAPTER 2—GRADUATE MEDICAL EDUCATION

SUBCHAPTER A—INDIRECT MEDICAL EDUCATION

Sec. 4621. Indirect graduate medical education payments.
H. R. 2015—24

Sec. 4622. Payment to hospitals of indirect medical education costs for

Medicare+Choice enrollees.

SUBCHAPTER B—DIRECT GRADUATE MEDICAL EDUCATION

Sec. 4623. Limitation on number of residents and rolling average FTE count.

Sec. 4624. Payments to hospitals for direct costs of graduate medical education of

Medicare+Choice enrollees.

Sec. 4625. Permitting payment to nonhospital providers.

Sec. 4626. Incentive payments under plans for voluntary reduction in number of

residents.

Sec. 4627. Medicare special reimbursement rule for primary care combined residency programs.

Sec. 4628. Demonstration project on use of consortia.

Sec. 4629. Recommendations on long-term policies regarding teaching hospitals and

graduate medical education.

Sec. 4630. Study of hospital overhead and supervisory physician components of direct medical education costs.

CHAPTER 3—PROVISIONS RELATING TO MEDICARE SECONDARY PAYER

Sec. 4631. Permanent extension and revision of certain secondary payer provisions.

Sec. 4632. Clarification of time and filing limitations.

Sec. 4633. Permitting recovery against third party administrators.

CHAPTER 4—OTHER PROVISIONS

Sec. 4641. Placement of advance directive in medical record.

Sec. 4642. Increased certification period for certain organ procurement organizations.

Sec. 4643. Office of the Chief Actuary in the Health Care Financing Administration.

Sec. 4644. Conforming amendments to comply with congressional review of agency

rulemaking.

Subtitle H—Medicaid

CHAPTER 1—MANAGED CARE

Sec. 4701. State option of using managed care; change in terminology.

Sec. 4702. Primary care case management services as State option without need for

waiver.

Sec. 4703. Elimination of 75:25 restriction on risk contracts.

Sec. 4704. Increased beneficiary protections.

Sec. 4705. Quality assurance standards.

Sec. 4706. Solvency standards.

Sec. 4707. Protections against fraud and abuse.

Sec. 4708. Improved administration.

Sec. 4709. 6-month guaranteed eligibility for all individuals enrolled in managed

care.

Sec. 4710. Effective dates.

CHAPTER 2—FLEXIBILITY IN PAYMENT OF PROVIDERS

Sec. 4711. Flexibility in payment methods for hospital, nursing facility, ICF/MR,

and home health services.

Sec. 4712. Payment for center and clinic services.

Sec. 4713. Elimination of obstetrical and pediatric payment rate requirements.

Sec. 4714. Medicaid payment rates for certain medicare cost-sharing.

Sec. 4715. Treatment of veterans’ pensions under medicaid.

CHAPTER 3—FEDERAL PAYMENTS TO STATES

Sec. 4721. Reforming disproportionate share payments under State medicaid programs.

Sec. 4722. Treatment of State taxes imposed on certain hospitals.

Sec. 4723. Additional funding for State emergency health services furnished to undocumented aliens.

Sec. 4724. Elimination of waste, fraud, and abuse.

Sec. 4725. Increased FMAPs.

Sec. 4726. Increase in payment limitation for territories.

CHAPTER 4—ELIGIBILITY

Sec. 4731. State option of continuous eligibility for 12 months; clarification of State

option to cover children.

Sec. 4732. Payment of part B premiums.
H. R. 2015—25

Sec. 4733. State option to permit workers with disabilities to buy into medicaid.

Sec. 4734. Penalty for fraudulent eligibility.

Sec. 4735. Treatment of certain settlement payments.

CHAPTER 5—BENEFITS

Sec. 4741. Elimination of requirement to pay for private insurance.

Sec. 4742. Physician qualification requirements.

Sec. 4743. Elimination of requirement of prior institutionalization with respect to

habilitation services furnished under a waiver for home or communitybased services.

Sec. 4744. Study and report on EPSDT benefit.

CHAPTER 6—ADMINISTRATION AND MISCELLANEOUS

Sec. 4751. Elimination of duplicative inspection of care requirements for ICFS/MR

and mental hospitals. Sec. 4752. Alternative sanctions for noncompliant ICFS/MR.

Sec. 4753. Modification of MMIS requirements.

Sec. 4754. Facilitating imposition of State alternative remedies on noncompliant

nursing facilities. Sec. 4755. Removal of name from nurse aide registry.

Sec. 4756. Medically accepted indication.

Sec. 4757. Continuation of State-wide section 1115 medicaid waivers.

Sec. 4758. Extension of moratorium.

Sec. 4759. Extension of effective date for State law amendment.

Subtitle I—Programs of All-Inclusive Care for the Elderly (PACE)

Sec. 4801. Coverage of PACE under the medicare program.

Sec. 4802. Establishment of PACE program as medicaid State option.

Sec. 4803. Effective date; transition.

Sec. 4804. Study and reports.

Subtitle J—State Children’s Health Insurance Program

CHAPTER 1—STATE CHILDREN’S HEALTH INSURANCE PROGRAM

Sec. 4901. Establishment of program.

‘‘TITLE XXI—STATE CHILDREN’S HEALTH INSURANCE PROGRAM

‘‘Sec. 2101. Purpose; State child health plans.

‘‘Sec. 2102. General contents of State child health plan; eligibility; outreach.

‘‘Sec. 2103. Coverage requirements for children’s health insurance.

‘‘Sec. 2104. Allotments.

‘‘Sec. 2105. Payments to States.

‘‘Sec. 2106. Process for submission, approval, and amendment of State child

health plans. ‘‘Sec. 2107. Strategic objectives and performance goals; plan administration.

‘‘Sec. 2108. Annual reports; evaluations.

‘‘Sec. 2109. Miscellaneous provisions.

‘‘Sec. 2110. Definitions.

CHAPTER 2—EXPANDED COVERAGE OF CHILDREN UNDER MEDICAID

Sec. 4911. Optional use of State child health assistance funds for enhanced medicaid match for expanded medicaid eligibility. Sec. 4912. Medicaid presumptive eligibility for low-income children.

Sec. 4913. Continuation of medicaid eligibility for disabled children who lose SSI

benefits.

CHAPTER 3—DIABETES GRANT PROGRAMS

Sec. 4921. Special diabetes programs for children with Type I diabetes.

Sec. 4922. Special diabetes programs for Indians.

Sec. 4923. Report on diabetes grant programs.

Subtitle A—Medicare+Choice Program

CHAPTER 1—MEDICARE+CHOICE PROGRAM

Subchapter A—Medicare+Choice Program

SEC. 4001. ESTABLISHMENT OF MEDICARE+CHOICE PROGRAM.

Title XVIII is amended by redesignating part C as part D

and by inserting after part B the following new part:
H. R. 2015—26

‘‘PART C—MEDICARE+CHOICE PROGRAM

‘‘ELIGIBILITY, ELECTION, AND ENROLLMENT

‘‘SEC. 1851. (a) CHOICE OF MEDICARE BENEFITS THROUGH

MEDICARE+CHOICE PLANS.—

‘‘(1) IN GENERAL.—Subject to the provisions of this section,

each Medicare+Choice eligible individual (as defined in paragraph (3)) is entitled to elect to receive benefits under this

title—

‘‘(A) through the original medicare fee-for-service program under parts A and B, or

‘‘(B) through enrollment in a Medicare+Choice plan

under this part.

‘‘(2) TYPES OF MEDICARE+CHOICE PLANS THAT MAY BE AVAILABLE.—A Medicare+Choice plan may be any of the following

types of plans of health insurance:

‘‘(A) COORDINATED CARE PLANS.—Coordinated care

plans which provide health care services, including but

not limited to health maintenance organization plans (with

or without point of service options), plans offered by provider-sponsored organizations (as defined in section

1855(d)), and preferred provider organization plans.

‘‘(B) COMBINATION OF MSA PLAN AND CONTRIBUTIONS

TO MEDICARE+CHOICE MSA.—An MSA plan, as defined in

section 1859(b)(3), and a contribution into a

Medicare+Choice medical savings account (MSA).

‘‘(C) PRIVATE FEE-FOR-SERVICE PLANS.—A

Medicare+Choice private fee-for-service plan, as defined

in section 1859(b)(2).

‘‘(3) MEDICARE+CHOICE ELIGIBLE INDIVIDUAL.— ‘‘(A) IN GENERAL.—In this title, subject to subparagraph

(B), the term ‘Medicare+Choice eligible individual’ means

an individual who is entitled to benefits under part A

and enrolled under part B.

‘‘(B) SPECIAL RULE FOR END-STAGE RENAL DISEASE.— Such term shall not include an individual medically determined to have end-stage renal disease, except that an

individual who develops end-stage renal disease while

enrolled in a Medicare+Choice plan may continue to be

enrolled in that plan.

‘‘(b) SPECIAL RULES.— ‘‘(1) RESIDENCE REQUIREMENT.— ‘‘(A) IN GENERAL.—Except as the Secretary may otherwise provide, an individual is eligible to elect a

Medicare+Choice plan offered by a Medicare+Choice

organization only if the plan serves the geographic area

in which the individual resides.

‘‘(B) CONTINUATION OF ENROLLMENT PERMITTED.—

Pursuant to rules specified by the Secretary, the Secretary

shall provide that a plan may offer to all individuals residing in a geographic area the option to continue enrollment

in the plan, notwithstanding that the individual no longer

resides in the service area of the plan, so long as the

plan provides that individuals exercising this option have,

as part of the basic benefits described in section

1852(a)(1)(A), reasonable access within that geographic
H. R. 2015—27

area to the full range of basic benefits, subject to reasonable

cost sharing liability in obtaining such benefits.

‘‘(2) SPECIAL RULE FOR CERTAIN INDIVIDUALS COVERED

UNDER FEHBP OR ELIGIBLE FOR VETERANS OR MILITARY HEALTH

BENEFITS, VETERANS.—

‘‘(A) FEHBP.—An individual who is enrolled in a

health benefit plan under chapter 89 of title 5, United

States Code, is not eligible to enroll in an MSA plan until

such time as the Director of the Office of Management

and Budget certifies to the Secretary that the Office of

Personnel Management has adopted policies which will

ensure that the enrollment of such individuals in such

plans will not result in increased expenditures for the

Federal Government for health benefit plans under such

chapter.

‘‘(B) VA AND DOD.—The Secretary may apply rules

similar to the rules described in subparagraph (A) in the

case of individuals who are eligible for health care benefits

under chapter 55 of title 10, United States Code, or under

chapter 17 of title 38 of such Code.

‘‘(3) LIMITATION ON ELIGIBILITY OF QUALIFIED MEDICARE

BENEFICIARIES AND OTHER MEDICAID BENEFICIARIES TO ENROLL

IN AN MSA PLAN.—An individual who is a qualified medicare

beneficiary (as defined in section 1905(p)(1)), a qualified disabled and working individual (described in section 1905(s)),

an individual described in section 1902(a)(10)(E)(iii), or otherwise entitled to medicare cost-sharing under a State plan under

title XIX is not eligible to enroll in an MSA plan.

‘‘(4) COVERAGE UNDER MSA PLANS ON A DEMONSTRATION

BASIS.— ‘‘(A) IN GENERAL.—An individual is not eligible to enroll

in an MSA plan under this part—

‘‘(i) on or after January 1, 2003, unless the enrollment is the continuation of such an enrollment in

effect as of such date; or

‘‘(ii) as of any date if the number of such individuals so enrolled as of such date has reached 390,000.

Under rules established by the Secretary, an individual

is not eligible to enroll (or continue enrollment) in an

MSA plan for a year unless the individual provides assurances satisfactory to the Secretary that the individual will

reside in the United States for at least 183 days during

the year.

‘‘(B) EVALUATION.—The Secretary shall regularly

evaluate the impact of permitting enrollment in MSA plans

under this part on selection (including adverse selection),

use of preventive care, access to care, and the financial

status of the Trust Funds under this title.

‘‘(C) REPORTS.—The Secretary shall submit to Congress

periodic reports on the numbers of individuals enrolled

in such plans and on the evaluation being conducted under

subparagraph (B). The Secretary shall submit such a

report, by not later than March 1, 2002, on whether the

time limitation under subparagraph (A)(i) should be

extended or removed and whether to change the numerical

limitation under subparagraph (A)(ii).

‘‘(c) PROCESS FOR EXERCISING CHOICE.—
H. R. 2015—28

‘‘(1) IN GENERAL.—The Secretary shall establish a process

through which elections described in subsection (a) are made

and changed, including the form and manner in which such

elections are made and changed. Such elections shall be made

or changed only during coverage election periods specified under

subsection (e) and shall become effective as provided in subsection (f).

‘‘(2) COORDINATION THROUGH MEDICARE+CHOICE ORGANIZATIONS.—

‘‘(A) ENROLLMENT.—Such process shall permit an

individual who wishes to elect a Medicare+Choice plan

offered by a Medicare+Choice organization to make such

election through the filing of an appropriate election form

with the organization.

‘‘(B) DISENROLLMENT.—Such process shall permit an

individual, who has elected a Medicare+Choice plan offered

by a Medicare+Choice organization and who wishes to

terminate such election, to terminate such election through

the filing of an appropriate election form with the organization.

‘‘(3) DEFAULT.—

‘‘(A) INITIAL ELECTION.—

‘‘(i) IN GENERAL.—Subject to clause (ii), an individual who fails to make an election during an initial

election period under subsection (e)(1) is deemed to

have chosen the original medicare fee-for-service program option.

‘‘(ii) SEAMLESS CONTINUATION OF COVERAGE.—The

Secretary may establish procedures under which an

individual who is enrolled in a health plan (other than

Medicare+Choice plan) offered by a Medicare+Choice

organization at the time of the initial election period

and who fails to elect to receive coverage other than

through the organization is deemed to have elected

the Medicare+Choice plan offered by the organization

(or, if the organization offers more than one such plan,

such plan or plans as the Secretary identifies under

such procedures).

‘‘(B) CONTINUING PERIODS.—An individual who has

made (or is deemed to have made) an election under this

section is considered to have continued to make such election until such time as—

‘‘(i) the individual changes the election under this

section, or

‘‘(ii) the Medicare+Choice plan with respect to

which such election is in effect is discontinued or,

subject to subsection (b)(1)(B), no longer serves the

area in which the individual resides.

‘‘(d) PROVIDING INFORMATION TO PROMOTE INFORMED CHOICE.—

‘‘(1) IN GENERAL.—The Secretary shall provide for activities

under this subsection to broadly disseminate information to

medicare beneficiaries (and prospective medicare beneficiaries)

on the coverage options provided under this section in order

to promote an active, informed selection among such options.

‘‘(2) PROVISION OF NOTICE.—

‘‘(A) OPEN SEASON NOTIFICATION.—At least 15 days

before the beginning of each annual, coordinated election
H. R. 2015—29

period (as defined in subsection (e)(3)(B)), the Secretary

shall mail to each Medicare+Choice eligible individual

residing in an area the following:

‘‘(i) GENERAL INFORMATION.—The general information described in paragraph (3).

‘‘(ii) LIST OF PLANS AND COMPARISON OF PLAN

OPTIONS.—A list identifying the Medicare+Choice plans

that are (or will be) available to residents of the area

and information described in paragraph (4) concerning

such plans. Such information shall be presented in

a comparative form.

‘‘(iii) ADDITIONAL INFORMATION.—Any other

information that the Secretary determines will assist

the individual in making the election under this section.

The mailing of such information shall be coordinated, to

the extent practicable, with the mailing of any annual

notice under section 1804.

‘‘(B) NOTIFICATION TO NEWLY ELIGIBLE

MEDICARE+CHOICE ELIGIBLE INDIVIDUALS.—To the extent

practicable, the Secretary shall, not later than 30 days

before the beginning of the initial Medicare+Choice enrollment period for an individual described in subsection (e)(1),

mail to the individual the information described in subparagraph (A).

‘‘(C) FORM.—The information disseminated under this

paragraph shall be written and formatted using language

that is easily understandable by medicare beneficiaries.

‘‘(D) PERIODIC UPDATING.—The information described

in subparagraph (A) shall be updated on at least an annual

basis to reflect changes in the availability of

Medicare+Choice plans and the benefits and

Medicare+Choice monthly basic and supplemental beneficiary premiums for such plans.

‘‘(3) GENERAL INFORMATION.—General information under

this paragraph, with respect to coverage under this part during

a year, shall include the following:

‘‘(A) BENEFITS UNDER ORIGINAL MEDICARE FEE-FOR- SERVICE PROGRAM OPTION.—A general description of the

benefits covered under the original medicare fee-for-service

program under parts A and B, including—

‘‘(i) covered items and services,

‘‘(ii) beneficiary cost sharing, such as deductibles,

coinsurance, and copayment amounts, and

‘‘(iii) any beneficiary liability for balance billing.

‘‘(B) ELECTION PROCEDURES.—Information and instructions on how to exercise election options under this section.

‘‘(C) RIGHTS.—A general description of procedural

rights (including grievance and appeals procedures) of beneficiaries under the original medicare fee-for-service program and the Medicare+Choice program and the right to

be protected against discrimination based on health statusrelated factors under section 1852(b).

‘‘(D) INFORMATION ON MEDIGAP AND MEDICARE

SELECT.—A general description of the benefits, enrollment

rights, and other requirements applicable to medicare

supplemental policies under section 1882 and provisions
H. R. 2015—30

relating to medicare select policies described in section

1882(t).

‘‘(E) POTENTIAL FOR CONTRACT TERMINATION.—The fact

that a Medicare+Choice organization may terminate its

contract, refuse to renew its contract, or reduce the service

area included in its contract, under this part, and the

effect of such a termination, nonrenewal, or service area

reduction may have on individuals enrolled with the

Medicare+Choice plan under this part.

‘‘(4) INFORMATION COMPARING PLAN OPTIONS.—Information

under this paragraph, with respect to a Medicare+Choice plan

for a year, shall include the following:

‘‘(A) BENEFITS.—The benefits covered under the plan,

including the following:

‘‘(i) Covered items and services beyond those provided under the original medicare fee-for-service program.

‘‘(ii) Any beneficiary cost sharing.

‘‘(iii) Any maximum limitations on out-of-pocket

expenses.

‘‘(iv) In the case of an MSA plan, differences in

cost sharing, premiums, and balance billing under such

a plan compared to under other Medicare+Choice

plans.

‘‘(v) In the case of a Medicare+Choice private feefor-service plan, differences in cost sharing, premiums,

and balance billing under such a plan compared to

under other Medicare+Choice plans.

‘‘(vi) The extent to which an enrollee may obtain

benefits through out-of-network health care providers.

‘‘(vii) The extent to which an enrollee may select

among in-network providers and the types of providers

participating in the plan’s network.

‘‘(viii) The organization’s coverage of emergency

and urgently needed care.

‘‘(B) PREMIUMS.—The Medicare+Choice monthly basic

beneficiary premium and Medicare+Choice monthly supplemental beneficiary premium, if any, for the plan or, in

the case of an MSA plan, the Medicare+Choice monthly

MSA premium.

‘‘(C) SERVICE AREA.—The service area of the plan.

‘‘(D) QUALITY AND PERFORMANCE.—To the extent available, plan quality and performance indicators for the benefits under the plan (and how they compare to such indicators under the original medicare fee-for-service program

under parts A and B in the area involved), including—

‘‘(i) disenrollment rates for medicare enrollees

electing to receive benefits through the plan for the

previous 2 years (excluding disenrollment due to death

or moving outside the plan’s service area),

‘‘(ii) information on medicare enrollee satisfaction,

‘‘(iii) information on health outcomes, and

‘‘(iv) the recent record regarding compliance of the

plan with requirements of this part (as determined

by the Secretary).

‘‘(E) SUPPLEMENTAL BENEFITS.—Whether the organization offering the plan includes mandatory supplemental
H. R. 2015—31

benefits in its base benefit package or offers optional

supplemental benefits and the terms and conditions

(including premiums) for such coverage.

‘‘(5) MAINTAINING A TOLL-FREE NUMBER AND INTERNET

SITE.—The Secretary shall maintain a toll-free number for

inquiries regarding Medicare+Choice options and the operation

of this part in all areas in which Medicare+Choice plans are

offered and an Internet site through which individuals may

electronically obtain information on such options and

Medicare+Choice plans.

‘‘(6) USE OF NON-FEDERAL ENTITIES.—The Secretary may

enter into contracts with non-Federal entities to carry out

activities under this subsection.

‘‘(7) PROVISION OF INFORMATION.—A Medicare+Choice

organization shall provide the Secretary with such information

on the organization and each Medicare+Choice plan it offers

as may be required for the preparation of the information

referred to in paragraph (2)(A).

‘‘(e) COVERAGE ELECTION PERIODS.—

‘‘(1) INITIAL CHOICE UPON ELIGIBILITY TO MAKE ELECTION

IF MEDICARE+CHOICE PLANS AVAILABLE TO INDIVIDUAL.—If, at

the time an individual first becomes entitled to benefits under

part A and enrolled under part B, there is one or more

Medicare+Choice plans offered in the area in which the individual resides, the individual shall make the election under this

section during a period specified by the Secretary such that

if the individual elects a Medicare+Choice plan during the

period, coverage under the plan becomes effective as of the

first date on which the individual may receive such coverage.

‘‘(2) OPEN ENROLLMENT AND DISENROLLMENT OPPORTUNI- TIES.—Subject to paragraph (5)—

‘‘(A) CONTINUOUS OPEN ENROLLMENT AND

DISENROLLMENT THROUGH 2001.—At any time during 1998,

1999, 2000, and 2001, a Medicare+Choice eligible individual

may change the election under subsection (a)(1).

‘‘(B) CONTINUOUS OPEN ENROLLMENT AND

DISENROLLMENT FOR FIRST 6 MONTHS DURING 2002.— ‘‘(i) IN GENERAL.—Subject to clause (ii), at any

time during the first 6 months of 2002, or, if the

individual first becomes a Medicare+Choice eligible

individual during 2002, during the first 6 months during 2002 in which the individual is a Medicare+Choice

eligible individual, a Medicare+Choice eligible individual may change the election under subsection (a)(1).

‘‘(ii) LIMITATION OF ONE CHANGE.—An individual

may exercise the right under clause (i) only once. The

limitation under this clause shall not apply to changes

in elections effected during an annual, coordinated election period under paragraph (3) or during a special

enrollment period under the first sentence of paragraph

(4).

‘‘(C) CONTINUOUS OPEN ENROLLMENT AND

DISENROLLMENT FOR FIRST 3 MONTHS IN SUBSEQUENT

YEARS.—

‘‘(i) IN GENERAL.—Subject to clause (ii), at any

time during the first 3 months of a year after 2002,

or, if the individual first becomes a Medicare+Choice
H. R. 2015—32

eligible individual during a year after 2002, during

the first 3 months of such year in which the individual

is a Medicare+Choice eligible individual, a

Medicare+Choice eligible individual may change the

election under subsection (a)(1).

‘‘(ii) LIMITATION OF ONE CHANGE DURING OPEN

ENROLLMENT PERIOD EACH YEAR.—An individual may

exercise the right under clause (i) only once during

the applicable 3-month period described in such clause

in each year. The limitation under this clause shall

not apply to changes in elections effected during an

annual, coordinated election period under paragraph

(3) or during a special enrollment period under paragraph (4).

‘‘(3) ANNUAL, COORDINATED ELECTION PERIOD.—

‘‘(A) IN GENERAL.—Subject to paragraph (5), each

individual who is eligible to make an election under this

section may change such election during an annual, coordinated election period.

‘‘(B) ANNUAL, COORDINATED ELECTION PERIOD.—For

purposes of this section, the term ‘annual, coordinated election period’ means, with respect to a calendar year (beginning with 2000), the month of November before such year.

‘‘(C) MEDICARE+CHOICE HEALTH INFORMATION FAIRS.—

In the month of November of each year (beginning with

1999), in conjunction with the annual coordinated election

period defined in subparagraph (B), the Secretary shall

provide for a nationally coordinated educational and publicity campaign to inform Medicare+Choice eligible individuals about Medicare+Choice plans and the election process

provided under this section.

‘‘(D) SPECIAL INFORMATION CAMPAIGN IN 1998.—During

November 1998 the Secretary shall provide for an educational and publicity campaign to inform Medicare+Choice

eligible individuals about the availability of

Medicare+Choice plans, and eligible organizations with

risk-sharing contracts under section 1876, offered in different areas and the election process provided under this

section.

‘‘(4) SPECIAL ELECTION PERIODS.—Effective as of January

1, 2002, an individual may discontinue an election of a

Medicare+Choice plan offered by a Medicare+Choice organization other than during an annual, coordinated election period

and make a new election under this section if—

‘‘(A) the organization’s or plan’s certification under this

part has been terminated or the organization has terminated or otherwise discontinued providing the plan in the

area in which the individual resides;

‘‘(B) the individual is no longer eligible to elect the

plan because of a change in the individual’s place of residence or other change in circumstances (specified by the

Secretary, but not including termination of the individual’s

enrollment on the basis described in clause (i) or (ii) of

subsection (g)(3)(B));

‘‘(C) the individual demonstrates (in accordance with

guidelines established by the Secretary) that—
H. R. 2015—33

‘‘(i) the organization offering the plan substantially

violated a material provision of the organization’s contract under this part in relation to the individual

(including the failure to provide an enrollee on a timely

basis medically necessary care for which benefits are

available under the plan or the failure to provide such

covered care in accordance with applicable quality

standards); or

‘‘(ii) the organization (or an agent or other entity

acting on the organization’s behalf) materially misrepresented the plan’s provisions in marketing the plan

to the individual; or

‘‘(D) the individual meets such other exceptional conditions as the Secretary may provide.

Effective as of January 1, 2002, an individual who, upon first

becoming eligible for benefits under part A at age 65, enrolls

in a Medicare+Choice plan under this part, the individual may

discontinue the election of such plan, and elect coverage under

the original fee-for-service plan, at any time during the 12-

month period beginning on the effective date of such enrollment.

‘‘(5) SPECIAL RULES FOR MSA PLANS.—Notwithstanding the

preceding provisions of this subsection, an individual—

‘‘(A) may elect an MSA plan only during—

‘‘(i) an initial open enrollment period described

in paragraph (1),

‘‘(ii) an annual, coordinated election period

described in paragraph (3)(B), or

‘‘(iii) the month of November 1998;

‘‘(B) subject to subparagraph (C), may not discontinue

an election of an MSA plan except during the periods

described in clause (ii) or (iii) of subparagraph (A) and

under the first sentence of paragraph (4); and

‘‘(C) who elects an MSA plan during an annual, coordinated election period, and who never previously had elected

such a plan, may revoke such election, in a manner determined by the Secretary, by not later than December 15

following the date of the election.

‘‘(6) OPEN ENROLLMENT PERIODS.—Subject to paragraph (5),

a Medicare+Choice organization—

‘‘(A) shall accept elections or changes to elections during the initial enrollment periods described in paragraph

(1), during the month of November 1998 and each subsequent year (as provided in paragraph (3)), and during special election periods described in the first sentence of paragraph (4); and

‘‘(B) may accept other changes to elections at such

other times as the organization provides.

‘‘(f) EFFECTIVENESS OF ELECTIONS AND CHANGES OF ELECTIONS.—

‘‘(1) DURING INITIAL COVERAGE ELECTION PERIOD.—An election of coverage made during the initial coverage election period

under subsection (e)(1)(A) shall take effect upon the date the

individual becomes entitled to benefits under part A and

enrolled under part B, except as the Secretary may provide

(consistent with section 1838) in order to prevent retroactive

coverage.
H. R. 2015—34

‘‘(2) DURING CONTINUOUS OPEN ENROLLMENT PERIODS.—An

election or change of coverage made under subsection (e)(2)

shall take effect with the first day of the first calendar month

following the date on which the election is made.

‘‘(3) ANNUAL, COORDINATED ELECTION PERIOD.—An election

or change of coverage made during an annual, coordinated

election period (as defined in subsection (e)(3)(B)) in a year

shall take effect as of the first day of the following year.

‘‘(4) OTHER PERIODS.—An election or change of coverage

made during any other period under subsection (e)(4) shall

take effect in such manner as the Secretary provides in a

manner consistent (to the extent practicable) with protecting

continuity of health benefit coverage.

‘‘(g) GUARANTEED ISSUE AND RENEWAL.—

‘‘(1) IN GENERAL.—Except as provided in this subsection,

a Medicare+Choice organization shall provide that at any time

during which elections are accepted under this section with

respect to a Medicare+Choice plan offered by the organization,

the organization will accept without restrictions individuals

who are eligible to make such election.

‘‘(2) PRIORITY.—If the Secretary determines that a

Medicare+Choice organization, in relation to a Medicare+Choice

plan it offers, has a capacity limit and the number of

Medicare+Choice eligible individuals who elect the plan under

this section exceeds the capacity limit, the organization may

limit the election of individuals of the plan under this section

but only if priority in election is provided—

‘‘(A) first to such individuals as have elected the plan

at the time of the determination, and

‘‘(B) then to other such individuals in such a manner

that does not discriminate, on a basis described in section

1852(b), among the individuals (who seek to elect the plan).

The preceding sentence shall not apply if it would result in

the enrollment of enrollees substantially nonrepresentative, as

determined in accordance with regulations of the Secretary,

of the medicare population in the service area of the plan.

‘‘(3) LIMITATION ON TERMINATION OF ELECTION.— ‘‘(A) IN GENERAL.—Subject to subparagraph (B), a

Medicare+Choice organization may not for any reason

terminate the election of any individual under this section

for a Medicare+Choice plan it offers.

‘‘(B) BASIS FOR TERMINATION OF ELECTION.—A

Medicare+Choice organization may terminate an individual’s election under this section with respect to a

Medicare+Choice plan it offers if—

‘‘(i) any Medicare+Choice monthly basic and

supplemental beneficiary premiums required with

respect to such plan are not paid on a timely basis

(consistent with standards under section 1856 that

provide for a grace period for late payment of such

premiums),

‘‘(ii) the individual has engaged in disruptive

behavior (as specified in such standards), or

‘‘(iii) the plan is terminated with respect to all

individuals under this part in the area in which the

individual resides.

‘‘(C) CONSEQUENCE OF TERMINATION.—
H. R. 2015—35

‘‘(i) TERMINATIONS FOR CAUSE.—Any individual

whose election is terminated under clause (i) or (ii)

of subparagraph (B) is deemed to have elected the

original medicare fee-for-service program option

described in subsection (a)(1)(A).

‘‘(ii) TERMINATION BASED ON PLAN TERMINATION

OR SERVICE AREA REDUCTION.—Any individual whose

election is terminated under subparagraph (B)(iii) shall

have a special election period under subsection (e)(4)(A)

in which to change coverage to coverage under another

Medicare+Choice plan. Such an individual who fails

to make an election during such period is deemed

to have chosen to change coverage to the original medicare fee-for-service program option described in subsection (a)(1)(A).

‘‘(D) ORGANIZATION OBLIGATION WITH RESPECT TO ELECTION FORMS.—Pursuant to a contract under section 1857,

each Medicare+Choice organization receiving an election

form under subsection (c)(2) shall transmit to the Secretary

(at such time and in such manner as the Secretary may

specify) a copy of such form or such other information

respecting the election as the Secretary may specify.

‘‘(h) APPROVAL OF MARKETING MATERIAL AND APPLICATION

FORMS.—

‘‘(1) SUBMISSION.—No marketing material or application

form may be distributed by a Medicare+Choice organization

to (or for the use of) Medicare+Choice eligible individuals

unless—

‘‘(A) at least 45 days before the date of distribution

the organization has submitted the material or form to

the Secretary for review, and

‘‘(B) the Secretary has not disapproved the distribution

of such material or form.

‘‘(2) REVIEW.—The standards established under section

1856 shall include guidelines for the review of any material

or form submitted and under such guidelines the Secretary

shall disapprove (or later require the correction of) such material or form if the material or form is materially inaccurate

or misleading or otherwise makes a material misrepresentation.

‘‘(3) DEEMED APPROVAL (1-STOP SHOPPING).—In the case of

material or form that is submitted under paragraph (1)(A)

to the Secretary or a regional office of the Department of

Health and Human Services and the Secretary or the office

has not disapproved the distribution of marketing material

or form under paragraph (1)(B) with respect to a

Medicare+Choice plan in an area, the Secretary is deemed

not to have disapproved such distribution in all other areas

covered by the plan and organization except with regard to

that portion of such material or form that is specific only

to an area involved.

‘‘(4) PROHIBITION OF CERTAIN MARKETING PRACTICES.—Each

Medicare+Choice organization shall conform to fair marketing

standards, in relation to Medicare+Choice plans offered under

this part, included in the standards established under section

1856. Such standards—
H. R. 2015—36

‘‘(A) shall not permit a Medicare+Choice organization

to provide for cash or other monetary rebates as an inducement for enrollment or otherwise, and

‘‘(B) may include a prohibition against a

Medicare+Choice organization (or agent of such an

organization) completing any portion of any election form

used to carry out elections under this section on behalf

of any individual.

‘‘(i) EFFECT OF ELECTION OF MEDICARE+CHOICE PLAN OPTION.— ‘‘(1) PAYMENTS TO ORGANIZATIONS.—Subject to sections

1852(a)(5), 1853(g), 1853(h), 1886(d)(11), and 1886(h)(3)(D), payments under a contract with a Medicare+Choice organization

under section 1853(a) with respect to an individual electing

a Medicare+Choice plan offered by the organization shall be

instead of the amounts which (in the absence of the contract)

would otherwise be payable under parts A and B for items

and services furnished to the individual.

‘‘(2) ONLY ORGANIZATION ENTITLED TO PAYMENT.—Subject

to sections 1853(e), 1853(g), 1853(h), 1857(f)(2), and 1886(d)(11),

and 1886(h)(3)(D), only the Medicare+Choice organization shall

be entitled to receive payments from the Secretary under this

title for services furnished to the individual.

‘‘BENEFITS AND BENEFICIARY PROTECTIONS

‘‘SEC. 1852. (a) BASIC BENEFITS.— ‘‘(1) IN GENERAL.—Except as provided in section 1859(b)(3)

for MSA plans, each Medicare+Choice plan shall provide to

members enrolled under this part, through providers and other

persons that meet the applicable requirements of this title

and part A of title XI—

‘‘(A) those items and services (other than hospice care)

for which benefits are available under parts A and B to

individuals residing in the area served by the plan, and

‘‘(B) additional benefits required under section

1854(f)(1)(A).

‘‘(2) SATISFACTION OF REQUIREMENT.— ‘‘(A) IN GENERAL.—A Medicare+Choice plan (other than

an MSA plan) offered by a Medicare+Choice organization

satisfies paragraph (1)(A), with respect to benefits for items

and services furnished other than through a provider or

other person that has a contract with the organization

offering the plan, if the plan provides payment in an

amount so that—

‘‘(i) the sum of such payment amount and any

cost sharing provided for under the plan, is equal to

at least

‘‘(ii) the total dollar amount of payment for such

items and services as would otherwise be authorized

under parts A and B (including any balance billing

permitted under such parts).

‘‘(B) REFERENCE TO RELATED PROVISIONS.—For provision relating to—

‘‘(i) limitations on balance billing against

Medicare+Choice organizations for non-contract providers, see sections 1852(k) and 1866(a)(1)(O), and

‘‘(ii) limiting actuarial value of enrollee liability

for covered benefits, see section 1854(e).
H. R. 2015—37

‘‘(3) SUPPLEMENTAL BENEFITS.—

‘‘(A) BENEFITS INCLUDED SUBJECT TO SECRETARY’S

APPROVAL.—Each Medicare+Choice organization may provide to individuals enrolled under this part, other than

under an MSA plan, (without affording those individuals

an option to decline the coverage) supplemental health

care benefits that the Secretary may approve. The Secretary shall approve any such supplemental benefits unless

the Secretary determines that including such supplemental

benefits would substantially discourage enrollment by

Medicare+Choice eligible individuals with the organization.

‘‘(B) AT ENROLLEES’ OPTION.—

‘‘(i) IN GENERAL.—Subject to clause (ii), a

Medicare+Choice organization may provide to individuals enrolled under this part supplemental health care

benefits that the individuals may elect, at their option,

to have covered.

‘‘(ii) SPECIAL RULE FOR MSA PLANS.—A

Medicare+Choice organization may not provide, under

an MSA plan, supplemental health care benefits that

cover the deductible described in section 1859(b)(2)(B).

In applying the previous sentence, health benefits

described in section 1882(u)(2)(B) shall not be treated

as covering such deductible.

‘‘(C) APPLICATION TO MEDICARE+CHOICE PRIVATE FEEFOR-SERVICE PLANS.—Nothing in this paragraph shall be

construed as preventing a Medicare+Choice private feefor-service plan from offering supplemental benefits that

include payment for some or all of the balance billing

amounts permitted consistent with section 1852(k) and coverage of additional services that the plan finds to be medically necessary.

‘‘(4) ORGANIZATION AS SECONDARY PAYER.—Notwithstanding

any other provision of law, a Medicare+Choice organization

may (in the case of the provision of items and services to

an individual under a Medicare+Choice plan under circumstances in which payment under this title is made secondary pursuant to section 1862(b)(2)) charge or authorize the

provider of such services to charge, in accordance with the

charges allowed under a law, plan, or policy described in such

section—

‘‘(A) the insurance carrier, employer, or other entity

which under such law, plan, or policy is to pay for the

provision of such services, or

‘‘(B) such individual to the extent that the individual

has been paid under such law, plan, or policy for such

services.

‘‘(5) NATIONAL COVERAGE DETERMINATIONS.—If there is a

national coverage determination made in the period beginning

on the date of an announcement under section 1853(b) and

ending on the date of the next announcement under such section and the Secretary projects that the determination will

result in a significant change in the costs to a Medicare+Choice

organization of providing the benefits that are the subject of

such national coverage determination and that such change

in costs was not incorporated in the determination of the annual

Medicare+Choice capitation rate under section 1853 included
H. R. 2015—38

in the announcement made at the beginning of such period,

then, unless otherwise required by law—

‘‘(A) such determination shall not apply to contracts

under this part until the first contract year that begins

after the end of such period, and

‘‘(B) if such coverage determination provides for coverage of additional benefits or coverage under additional

circumstances, section 1851(i)(1) shall not apply to payment

for such additional benefits or benefits provided under such

additional circumstances until the first contract year that

begins after the end of such period.

‘‘(b) ANTIDISCRIMINATION.—

‘‘(1) BENEFICIARIES.—

‘‘(A) IN GENERAL.—A Medicare+Choice organization

may not deny, limit, or condition the coverage or provision

of benefits under this part, for individuals permitted to

be enrolled with the organization under this part, based

on any health status-related factor described in section

2702(a)(1) of the Public Health Service Act.

‘‘(B) CONSTRUCTION.—Subparagraph (A) shall not be

construed as requiring a Medicare+Choice organization to

enroll individuals who are determined to have end-stage

renal disease, except as provided under section

1851(a)(3)(B).

‘‘(2) PROVIDERS.—A Medicare+Choice organization shall not

discriminate with respect to participation, reimbursement, or

indemnification as to any provider who is acting within the

scope of the provider’s license or certification under applicable

State law, solely on the basis of such license or certification.

This paragraph shall not be construed to prohibit a plan from

including providers only to the extent necessary to meet the

needs of the plan’s enrollees or from establishing any measure

designed to maintain quality and control costs consistent with

the responsibilities of the plan.

‘‘(c) DISCLOSURE REQUIREMENTS.— ‘‘(1) DETAILED DESCRIPTION OF PLAN PROVISIONS.—A

Medicare+Choice organization shall disclose, in clear, accurate,

and standardized form to each enrollee with a Medicare+Choice

plan offered by the organization under this part at the time

of enrollment and at least annually thereafter, the following

information regarding such plan:

‘‘(A) SERVICE AREA.—The plan’s service area.

‘‘(B) BENEFITS.—Benefits offered under the plan,

including information described in section 1851(d)(3)(A) and

exclusions from coverage and, if it is an MSA plan, a

comparison of benefits under such a plan with benefits

under other Medicare+Choice plans.

‘‘(C) ACCESS.—The number, mix, and distribution of

plan providers, out-of-network coverage (if any) provided

by the plan, and any point-of-service option (including the

supplemental premium for such option).

‘‘(D) OUT-OF-AREA COVERAGE.—Out-of-area coverage

provided by the plan.

‘‘(E) EMERGENCY COVERAGE.—Coverage of emergency

services, including—

‘‘(i) the appropriate use of emergency services,

including use of the 911 telephone system or its local
H. R. 2015—39

equivalent in emergency situations and an explanation

of what constitutes an emergency situation;

‘‘(ii) the process and procedures of the plan for

obtaining emergency services; and

‘‘(iii) the locations of (I) emergency departments,

and (II) other settings, in which plan physicians and

hospitals provide emergency services and post-stabilization care.

‘‘(F) SUPPLEMENTAL BENEFITS.—Supplemental benefits

available from the organization offering the plan, including—

‘‘(i) whether the supplemental benefits are

optional,

‘‘(ii) the supplemental benefits covered, and

‘‘(iii) the Medicare+Choice monthly supplemental

beneficiary premium for the supplemental benefits.

‘‘(G) PRIOR AUTHORIZATION RULES.—Rules regarding

prior authorization or other review requirements that could

result in nonpayment.

‘‘(H) PLAN GRIEVANCE AND APPEALS PROCEDURES.—All

plan appeal or grievance rights and procedures.

‘‘(I) QUALITY ASSURANCE PROGRAM.—A description of

the organization’s quality assurance program under subsection (e).

‘‘(2) DISCLOSURE UPON REQUEST.—Upon request of a

Medicare+Choice eligible individual, a Medicare+Choice

organization must provide the following information to such

individual:

‘‘(A) The general coverage information and general

comparative plan information made available under clauses

(i) and (ii) of section 1851(d)(2)(A).

‘‘(B) Information on procedures used by the organization to control utilization of services and expenditures.

‘‘(C) Information on the number of grievances, redeterminations, and appeals and on the disposition in the aggregate of such matters.

‘‘(D) An overall summary description as to the method

of compensation of participating physicians.

‘‘(d) ACCESS TO SERVICES.— ‘‘(1) IN GENERAL.—A Medicare+Choice organization offering

a Medicare+Choice plan may select the providers from whom

the benefits under the plan are provided so long as—

‘‘(A) the organization makes such benefits available

and accessible to each individual electing the plan within

the plan service area with reasonable promptness and in

a manner which assures continuity in the provision of

benefits;

‘‘(B) when medically necessary the organization makes

such benefits available and accessible 24 hours a day and

7 days a week;

‘‘(C) the plan provides for reimbursement with respect

to services which are covered under subparagraphs (A)

and (B) and which are provided to such an individual

other than through the organization, if—

‘‘(i) the services were not emergency services (as

defined in paragraph (3)), but (I) the services were

medically necessary and immediately required because
H. R. 2015—40

of an unforeseen illness, injury, or condition, and (II)

it was not reasonable given the circumstances to obtain

the services through the organization,

‘‘(ii) the services were renal dialysis services and

were provided other than through the organization

because the individual was temporarily out of the

plan’s service area, or

‘‘(iii) the services are maintenance care or poststabilization care covered under the guidelines established under paragraph (2);

‘‘(D) the organization provides access to appropriate

providers, including credentialed specialists, for medically

necessary treatment and services; and

‘‘(E) coverage is provided for emergency services (as

defined in paragraph (3)) without regard to prior authorization or the emergency care provider’s contractual relationship with the organization.

‘‘(2) GUIDELINES RESPECTING COORDINATION OF POST-STABILIZATION CARE.—A Medicare+Choice plan shall comply with

such guidelines as the Secretary may prescribe relating to

promoting efficient and timely coordination of appropriate

maintenance and post-stabilization care of an enrollee after

the enrollee has been determined to be stable under section

1867.

‘‘(3) DEFINITION OF EMERGENCY SERVICES.—In this subsection—

‘‘(A) IN GENERAL.—The term ‘emergency services’

means, with respect to an individual enrolled with an

organization, covered inpatient and outpatient services

that—

‘‘(i) are furnished by a provider that is qualified

to furnish such services under this title, and

‘‘(ii) are needed to evaluate or stabilize an emergency medical condition (as defined in subparagraph

(B)).

‘‘(B) EMERGENCY MEDICAL CONDITION BASED ON PRUDENT LAYPERSON.—The term ‘emergency medical condition’

means a medical condition manifesting itself by acute

symptoms of sufficient severity (including severe pain) such

that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the

absence of immediate medical attention to result in—

‘‘(i) placing the health of the individual (or, with

respect to a pregnant woman, the health of the woman

or her unborn child) in serious jeopardy,

‘‘(ii) serious impairment to bodily functions, or

‘‘(iii) serious dysfunction of any bodily organ or

part.

‘‘(4) ASSURING ACCESS TO SERVICES IN

MEDICARE+CHOICE PRIVATE FEE-FOR-SERVICE PLANS.—In

addition to any other requirements under this part, in

the case of a Medicare+Choice private fee-for-service plan,

the organization offering the plan must demonstrate to

the Secretary that the organization has sufficient number

and range of health care professionals and providers willing
H. R. 2015—41

to provide services under the terms of the plan. The Secretary shall find that an organization has met such requirement with respect to any category of health care professional or provider if, with respect to that category of provider—

‘‘(A) the plan has established payment rates for

covered services furnished by that category of provider

that are not less than the payment rates provided

for under part A, part B, or both, for such services,

or

‘‘(B) the plan has contracts or agreements with

a sufficient number and range of providers within such

category to provide covered services under the terms

of the plan,

or a combination of both. The previous sentence shall not

be construed as restricting the persons from whom enrollees

under such a plan may obtain covered benefits.

‘‘(e) QUALITY ASSURANCE PROGRAM.—

‘‘(1) IN GENERAL.—Each Medicare+Choice organization

must have arrangements, consistent with any regulation, for

an ongoing quality assurance program for health care services

it provides to individuals enrolled with Medicare+Choice plans

of the organization.

‘‘(2) ELEMENTS OF PROGRAM.—

‘‘(A) IN GENERAL.—The quality assurance program of

an organization with respect to a Medicare+Choice plan

(other than a Medicare+Choice private fee-for-service plan

or a non-network MSA plan) it offers shall—

‘‘(i) stress health outcomes and provide for the

collection, analysis, and reporting of data (in accordance with a quality measurement system that the Secretary recognizes) that will permit measurement of

outcomes and other indices of the quality of

Medicare+Choice plans and organizations;

‘‘(ii) monitor and evaluate high volume and high

risk services and the care of acute and chronic conditions;

‘‘(iii) evaluate the continuity and coordination of

care that enrollees receive;

‘‘(iv) be evaluated on an ongoing basis as to its

effectiveness;

‘‘(v) include measures of consumer satisfaction;

‘‘(vi) provide the Secretary with such access to

information collected as may be appropriate to monitor

and ensure the quality of care provided under this

part;

‘‘(vii) provide review by physicians and other

health care professionals of the process followed in

the provision of such health care services;

‘‘(viii) provide for the establishment of written

protocols for utilization review, based on current standards of medical practice;

‘‘(ix) have mechanisms to detect both underutilization and overutilization of services;

‘‘(x) after identifying areas for improvement, establish or alter practice parameters;
H. R. 2015—42

‘‘(xi) take action to improve quality and assesses

the effectiveness of such action through systematic

followup; and

‘‘(xii) make available information on quality and

outcomes measures to facilitate beneficiary comparison

and choice of health coverage options (in such form

and on such quality and outcomes measures as the

Secretary determines to be appropriate).

‘‘(B) ELEMENTS OF PROGRAM FOR ORGANIZATIONS OFFERING MEDICARE+CHOICE PRIVATE FEE-FOR-SERVICE PLANS AND

NON-NETWORK MSA PLANS.—The quality assurance program

of an organization with respect to a Medicare+Choice private fee-for-service plan or a non-network MSA plan it

offers shall—

‘‘(i) meet the requirements of clauses (i) through

(vi) of subparagraph (A);

‘‘(ii) insofar as it provides for the establishment

of written protocols for utilization review, base such

protocols on current standards of medical practice; and

‘‘(iii) have mechanisms to evaluate utilization of

services and inform providers and enrollees of the

results of such evaluation.

‘‘(C) DEFINITION OF NON-NETWORK MSA PLAN.—In this

subsection, the term ‘non-network MSA plan’ means an

MSA plan offered by a Medicare+Choice organization that

does not provide benefits required to be provided by this

part, in whole or in part, through a defined set of providers

under contract, or under another arrangement, with the

organization.

‘‘(3) EXTERNAL REVIEW.— ‘‘(A) IN GENERAL.—Each Medicare+Choice organization

shall, for each Medicare+Choice plan it operates, have an

agreement with an independent quality review and

improvement organization approved by the Secretary to

perform functions of the type described in sections

1154(a)(4)(B) and 1154(a)(14) with respect to services furnished by Medicare+Choice plans for which payment is

made under this title. The previous sentence shall not

apply to a Medicare+Choice private fee-for-service plan or

a non-network MSA plan that does not employ utilization

review.

‘‘(B) NONDUPLICATION OF ACCREDITATION.—Except in

the case of the review of quality complaints, and consistent

with subparagraph (C), the Secretary shall ensure that

the external review activities conducted under subparagraph (A) are not duplicative of review activities conducted

as part of the accreditation process.

‘‘(C) WAIVER AUTHORITY.—The Secretary may waive

the requirement described in subparagraph (A) in the case

of an organization if the Secretary determines that the

organization has consistently maintained an excellent

record of quality assurance and compliance with other

requirements under this part.

‘‘(4) TREATMENT OF ACCREDITATION.—The Secretary shall

provide that a Medicare+Choice organization is deemed to meet

requirements of paragraphs (1) and (2) of this subsection and

subsection (h) (relating to confidentiality and accuracy of
H. R. 2015—43

enrollee records) if the organization is accredited (and periodically reaccredited) by a private organization under a process

that the Secretary has determined assures that the organization, as a condition of accreditation, applies and enforces standards with respect to the requirements involved that are no

less stringent than the standards established under section

1856 to carry out the respective requirements.

‘‘(f) GRIEVANCE MECHANISM.—Each Medicare+Choice organization must provide meaningful procedures for hearing and resolving

grievances between the organization (including any entity or

individual through which the organization provides health care

services) and enrollees with Medicare+Choice plans of the organization under this part.

‘‘(g) COVERAGE DETERMINATIONS, RECONSIDERATIONS, AND

APPEALS.—

‘‘(1) DETERMINATIONS BY ORGANIZATION.—

‘‘(A) IN GENERAL.—A Medicare+Choice organization

shall have a procedure for making determinations regarding whether an individual enrolled with the plan of the

organization under this part is entitled to receive a health

service under this section and the amount (if any) that

the individual is required to pay with respect to such

service. Subject to paragraph (3), such procedures shall

provide for such determination to be made on a timely

basis.

‘‘(B) EXPLANATION OF DETERMINATION.—Such a determination that denies coverage, in whole in part, shall be

in writing and shall include a statement in understandable

language of the reasons for the denial and a description

of the reconsideration and appeals processes.

‘‘(2) RECONSIDERATIONS.— ‘‘(A) IN GENERAL.—The organization shall provide for

reconsideration of a determination described in paragraph

(1)(B) upon request by the enrollee involved. The

reconsideration shall be within a time period specified by

the Secretary, but shall be made, subject to paragraph

(3), not later than 60 days after the date of the receipt

of the request for reconsideration.

‘‘(B) PHYSICIAN DECISION ON CERTAIN RECONSIDER- ATIONS.—A reconsideration relating to a determination to

deny coverage based on a lack of medical necessity shall

be made only by a physician with appropriate expertise

in the field of medicine which necessitates treatment who

is other than a physician involved in the initial determination.

‘‘(3) EXPEDITED DETERMINATIONS AND RECONSIDERATIONS.—

‘‘(A) RECEIPT OF REQUESTS.—

‘‘(i) ENROLLEE REQUESTS.—An enrollee in a

Medicare+Choice plan may request, either in writing

or orally, an expedited determination under paragraph

(1) or an expedited reconsideration under paragraph

(2) by the Medicare+Choice organization.

‘‘(ii) PHYSICIAN REQUESTS.—A physician, regardless

whether the physician is affiliated with the organization or not, may request, either in writing or orally,

such an expedited determination or reconsideration.

‘‘(B) ORGANIZATION PROCEDURES.—
H. R. 2015—44

‘‘(i) IN GENERAL.—The Medicare+Choice organization shall maintain procedures for expediting organization determinations and reconsiderations when, upon

request of an enrollee, the organization determines

that the application of the normal time frame for making a determination (or a reconsideration involving

a determination) could seriously jeopardize the life or

health of the enrollee or the enrollee’s ability to regain

maximum function.

‘‘(ii) EXPEDITION REQUIRED FOR PHYSICIAN

REQUESTS.—In the case of a request for an expedited

determination or reconsideration made under subparagraph (A)(ii), the organization shall expedite the determination or reconsideration if the request indicates

that the application of the normal time frame for making a determination (or a reconsideration involving

a determination) could seriously jeopardize the life or

health of the enrollee or the enrollee’s ability to regain

maximum function

‘‘(iii) TIMELY RESPONSE.—In cases described in

clauses (i) and (ii), the organization shall notify the

enrollee (and the physician involved, as appropriate)

of the determination or reconsideration under time

limitations established by the Secretary, but not later

than 72 hours of the time of receipt of the request

for the determination or reconsideration (or receipt

of the information necessary to make the determination

or reconsideration), or such longer period as the Secretary may permit in specified cases.

‘‘(4) INDEPENDENT REVIEW OF CERTAIN COVERAGE

DENIALS.—The Secretary shall contract with an independent,

outside entity to review and resolve in a timely manner

reconsiderations that affirm denial of coverage, in whole or

in part.

‘‘(5) APPEALS.—An enrollee with a Medicare+Choice plan

of a Medicare+Choice organization under this part who is

dissatisfied by reason of the enrollee’s failure to receive any

health service to which the enrollee believes the enrollee is

entitled and at no greater charge than the enrollee believes

the enrollee is required to pay is entitled, if the amount in

controversy is $100 or more, to a hearing before the Secretary

to the same extent as is provided in section 205(b), and in

any such hearing the Secretary shall make the organization

a party. If the amount in controversy is $1,000 or more, the

individual or organization shall, upon notifying the other party,

be entitled to judicial review of the Secretary’s final decision

as provided in section 205(g), and both the individual and

the organization shall be entitled to be parties to that judicial

review. In applying subsections (b) and (g) of section 205 as

provided in this paragraph, and in applying section 205(l) thereto, any reference therein to the Commissioner of Social Security

or the Social Security Administration shall be considered a

reference to the Secretary or the Department of Health and

Human Services, respectively.

‘‘(h) CONFIDENTIALITY AND ACCURACY OF ENROLLEE RECORDS.—

Insofar as a Medicare+Choice organization maintains medical
H. R. 2015—45

records or other health information regarding enrollees under this

part, the Medicare+Choice organization shall establish procedures—

‘‘(1) to safeguard the privacy of any individually identifiable

enrollee information;

‘‘(2) to maintain such records and information in a manner

that is accurate and timely, and

‘‘(3) to assure timely access of enrollees to such records

and information.

‘‘(i) INFORMATION ON ADVANCE DIRECTIVES.—Each

Medicare+Choice organization shall meet the requirement of section

1866(f) (relating to maintaining written policies and procedures

respecting advance directives).

‘‘(j) RULES REGARDING PROVIDER PARTICIPATION.—

‘‘(1) PROCEDURES.—Insofar as a Medicare+Choice organization offers benefits under a Medicare+Choice plan through

agreements with physicians, the organization shall establish

reasonable procedures relating to the participation (under an

agreement between a physician and the organization) of physicians under such a plan. Such procedures shall include—

‘‘(A) providing notice of the rules regarding participation,

‘‘(B) providing written notice of participation decisions

that are adverse to physicians, and

‘‘(C) providing a process within the organization for

appealing such adverse decisions, including the presentation of information and views of the physician regarding

such decision.

‘‘(2) CONSULTATION IN MEDICAL POLICIES.—A

Medicare+Choice organization shall consult with physicians

who have entered into participation agreements with the

organization regarding the organization’s medical policy, quality, and medical management procedures.

‘‘(3) PROHIBITING INTERFERENCE WITH PROVIDER ADVICE TO

ENROLLEES.— ‘‘(A) IN GENERAL.—Subject to subparagraphs (B) and

(C), a Medicare+Choice organization (in relation to an

individual enrolled under a Medicare+Choice plan offered

by the organization under this part) shall not prohibit

or otherwise restrict a covered health care professional

(as defined in subparagraph (D)) from advising such an

individual who is a patient of the professional about the

health status of the individual or medical care or treatment

for the individual’s condition or disease, regardless of

whether benefits for such care or treatment are provided

under the plan, if the professional is acting within the

lawful scope of practice.

‘‘(B) CONSCIENCE PROTECTION.—Subparagraph (A)

shall not be construed as requiring a Medicare+Choice

plan to provide, reimburse for, or provide coverage of a

counseling or referral service if the Medicare+Choice

organization offering the plan—

‘‘(i) objects to the provision of such service on moral

or religious grounds; and

‘‘(ii) in the manner and through the written

instrumentalities such Medicare+Choice organization

deems appropriate, makes available information on its

policies regarding such service to prospective enrollees
H. R. 2015—46

before or during enrollment and to enrollees within

90 days after the date that the organization or plan

adopts a change in policy regarding such a counseling

or referral service.

‘‘(C) CONSTRUCTION.—Nothing in subparagraph (B)

shall be construed to affect disclosure requirements under

State law or under the Employee Retirement Income Security Act of 1974.

‘‘(D) HEALTH CARE PROFESSIONAL DEFINED.—For purposes of this paragraph, the term ‘health care professional’

means a physician (as defined in section 1861(r)) or other

health care professional if coverage for the professional’s

services is provided under the Medicare+Choice plan for

the services of the professional. Such term includes a podiatrist, optometrist, chiropractor, psychologist, dentist, physician assistant, physical or occupational therapist and therapy assistant, speech-language pathologist, audiologist, registered or licensed practical nurse (including nurse practitioner, clinical nurse specialist, certified registered nurse

anesthetist, and certified nurse-midwife), licensed certified

social worker, registered respiratory therapist, and certified

respiratory therapy technician.

‘‘(4) LIMITATIONS ON PHYSICIAN INCENTIVE PLANS.—

‘‘(A) IN GENERAL.—No Medicare+Choice organization

may operate any physician incentive plan (as defined in

subparagraph (B)) unless the following requirements are

met:

‘‘(i) No specific payment is made directly or

indirectly under the plan to a physician or physician

group as an inducement to reduce or limit medically

necessary services provided with respect to a specific

individual enrolled with the organization.

‘‘(ii) If the plan places a physician or physician

group at substantial financial risk (as determined by

the Secretary) for services not provided by the physician or physician group, the organization—

‘‘(I) provides stop-loss protection for the physician or group that is adequate and appropriate,

based on standards developed by the Secretary

that take into account the number of physicians

placed at such substantial financial risk in the

group or under the plan and the number of individuals enrolled with the organization who receive

services from the physician or group, and

‘‘(II) conducts periodic surveys of both individuals enrolled and individuals previously enrolled

with the organization to determine the degree of

access of such individuals to services provided by

the organization and satisfaction with the quality

of such services.

‘‘(iii) The organization provides the Secretary with

descriptive information regarding the plan, sufficient

to permit the Secretary to determine whether the plan

is in compliance with the requirements of this subparagraph.

‘‘(B) PHYSICIAN INCENTIVE PLAN DEFINED.—In this

paragraph, the term ‘physician incentive plan’ means any
H. R. 2015—47

compensation arrangement between a Medicare+Choice

organization and a physician or physician group that may

directly or indirectly have the effect of reducing or limiting

services provided with respect to individuals enrolled with

the organization under this part.

‘‘(5) LIMITATION ON PROVIDER INDEMNIFICATION.—A

Medicare+Choice organization may not provide (directly or

indirectly) for a health care professional, provider of services,

or other entity providing health care services (or group of

such professionals, providers, or entities) to indemnify the

organization against any liability resulting from a civil action

brought for any damage caused to an enrollee with a

Medicare+Choice plan of the organization under this part by

the organization’s denial of medically necessary care.

‘‘(6) SPECIAL RULES FOR MEDICARE+CHOICE PRIVATE FEEFOR-SERVICE PLANS.—For purposes of applying this part (including subsection (k)(1)) and section 1866(a)(1)(O), a hospital (or

other provider of services), a physician or other health care

professional, or other entity furnishing health care services

is treated as having an agreement or contract in effect with

a Medicare+Choice organization (with respect to an individual

enrolled in a Medicare+Choice private fee-for-service plan it

offers), if—

‘‘(A) the provider, professional, or other entity furnishes

services that are covered under the plan to such an enrollee;

and

‘‘(B) before providing such services, the provider,

professional, or other entity —

‘‘(i) has been informed of the individual’s enrollment under the plan, and

‘‘(ii) either—

‘‘(I) has been informed of the terms and conditions of payment for such services under the plan,

or

‘‘(II) is given a reasonable opportunity to

obtain information concerning such terms and

conditions,

in a manner reasonably designed to effect informed

agreement by a provider.

The previous sentence shall only apply in the absence of an

explicit agreement between such a provider, professional, or

other entity and the Medicare+Choice organization.

‘‘(k) TREATMENT OF SERVICES FURNISHED BY CERTAIN PROVID- ERS.— ‘‘(1) IN GENERAL.—Except as provided in paragraph (2),

a physician or other entity (other than a provider of services)

that does not have a contract establishing payment amounts

for services furnished to an individual enrolled under this part

with a Medicare+Choice organization described in section

1851(a)(2)(A) shall accept as payment in full for covered services

under this title that are furnished to such an individual the

amounts that the physician or other entity could collect if

the individual were not so enrolled. Any penalty or other provision of law that applies to such a payment with respect to

an individual entitled to benefits under this title (but not

enrolled with a Medicare+Choice organization under this part)

also applies with respect to an individual so enrolled.
H. R. 2015—48

‘‘(2) APPLICATION TO MEDICARE+CHOICE PRIVATE FEE-FORSERVICE PLANS.—

‘‘(A) BALANCE BILLING LIMITS UNDER MEDICARE+CHOICE

PRIVATE FEE-FOR-SERVICE PLANS IN CASE OF CONTRACT

PROVIDERS.—

‘‘(i) IN GENERAL.—In the case of an individual

enrolled in a Medicare+Choice private fee-for-service

plan under this part, a physician, provider of services,

or other entity that has a contract (including through

the operation of subsection (j)(6)) establishing a payment rate for services furnished to the enrollee shall

accept as payment in full for covered services under

this title that are furnished to such an individual an

amount not to exceed (including any deductibles,

coinsurance, copayments, or balance billing otherwise

permitted under the plan) an amount equal to 115

percent of such payment rate.

‘‘(ii) PROCEDURES TO ENFORCE LIMITS.—The

Medicare+Choice organization that offers such a plan

shall establish procedures, similar to the procedures

described in section 1848(g)(1)(A), in order to carry

out the previous sentence.

‘‘(iii) ASSURING ENFORCEMENT.—If the

Medicare+Choice organization fails to establish and

enforce procedures required under clause (ii), the

organization is subject to intermediate sanctions under

section 1857(g).

‘‘(B) ENROLLEE LIABILITY FOR NONCONTRACT PROVIDERS.—For provision—

‘‘(i) establishing minimum payment rate in the

case of noncontract providers under a Medicare+Choice

private fee-for-service plan, see section 1852(a)(2); or

‘‘(ii) limiting enrollee liability in the case of covered

services furnished by such providers, see paragraph

(1) and section 1866(a)(1)(O).

‘‘(C) INFORMATION ON BENEFICIARY LIABILITY.—

‘‘(i) IN GENERAL.—Each Medicare+Choice organization that offers a Medicare+Choice private fee-for-service plan shall provide that enrollees under the plan

who are furnished services for which payment is sought

under the plan are provided an appropriate explanation

of benefits (consistent with that provided under parts

A and B and, if applicable, under medicare supplemental policies) that includes a clear statement of the

amount of the enrollee’s liability (including any liability

for balance billing consistent with this subsection) with

respect to payments for such services.

‘‘(ii) ADVANCE NOTICE BEFORE RECEIPT OF

INPATIENT HOSPITAL SERVICES AND CERTAIN OTHER

SERVICES.—In addition, such organization shall, in its

terms and conditions of payments to hospitals for

inpatient hospital services and for other services identified by the Secretary for which the amount of the

balancing billing under subparagraph (A) could be

substantial, require the hospital to provide to the

enrollee, before furnishing such services and if the
H. R. 2015—49

hospital imposes balance billing under subparagraph

(A)—

‘‘(I) notice of the fact that balance billing is

permitted under such subparagraph for such services, and

‘‘(II) a good faith estimate of the likely amount

of such balance billing (if any), with respect to

such services, based upon the presenting condition

of the enrollee.

‘‘PAYMENTS TO MEDICARE+CHOICE ORGANIZATIONS

‘‘SEC. 1853. (a) PAYMENTS TO ORGANIZATIONS.— ‘‘(1) MONTHLY PAYMENTS.— ‘‘(A) IN GENERAL.—Under a contract under section 1857

and subject to subsections (e) and (f) and section 1859(e)(4),

the Secretary shall make monthly payments under this

section in advance to each Medicare+Choice organization,

with respect to coverage of an individual under this part

in a Medicare+Choice payment area for a month, in an

amount equal to 1⁄12 of the annual Medicare+Choice capitation rate (as calculated under subsection (c)) with respect

to that individual for that area, adjusted for such risk

factors as age, disability status, gender, institutional status,

and such other factors as the Secretary determines to be

appropriate, so as to ensure actuarial equivalence. The

Secretary may add to, modify, or substitute for such factors,

if such changes will improve the determination of actuarial

equivalence.

‘‘(B) SPECIAL RULE FOR END-STAGE RENAL DISEASE.— The Secretary shall establish separate rates of payment

to a Medicare+Choice organization with respect to classes

of individuals determined to have end-stage renal disease

and enrolled in a Medicare+Choice plan of the organization.

Such rates of payment shall be actuarially equivalent to

rates paid to other enrollees in the Medicare+Choice payment area (or such other area as specified by the Secretary).

In accordance with regulations, the Secretary shall provide

for the application of the seventh sentence of section

1881(b)(7) to payments under this section covering the

provision of renal dialysis treatment in the same manner

as such sentence applies to composite rate payments

described in such sentence.

‘‘(2) ADJUSTMENT TO REFLECT NUMBER OF ENROLLEES.— ‘‘(A) IN GENERAL.—The amount of payment under this

subsection may be retroactively adjusted to take into

account any difference between the actual number of

individuals enrolled with an organization under this part

and the number of such individuals estimated to be so

enrolled in determining the amount of the advance payment.

‘‘(B) SPECIAL RULE FOR CERTAIN ENROLLEES.— ‘‘(i) IN GENERAL.—Subject to clause (ii), the Secretary may make retroactive adjustments under

subparagraph (A) to take into account individuals

enrolled during the period beginning on the date on

which the individual enrolls with a Medicare+Choice

organization under a plan operated, sponsored, or
H. R. 2015—50

contributed to by the individual’s employer or former

employer (or the employer or former employer of the

individual’s spouse) and ending on the date on which

the individual is enrolled in the organization under

this part, except that for purposes of making such

retroactive adjustments under this subparagraph, such

period may not exceed 90 days.

‘‘(ii) EXCEPTION.—No adjustment may be made

under clause (i) with respect to any individual who

does not certify that the organization provided the

individual with the disclosure statement described in

section 1852(c) at the time the individual enrolled with

the organization.

‘‘(3) ESTABLISHMENT OF RISK ADJUSTMENT FACTORS.—

‘‘(A) REPORT.—The Secretary shall develop, and submit

to Congress by not later than March 1, 1999, a report

on the method of risk adjustment of payment rates under

this section, to be implemented under subparagraph (C),

that accounts for variations in per capita costs based on

health status. Such report shall include an evaluation of

such method by an outside, independent actuary of the

actuarial soundness of the proposal.

‘‘(B) DATA COLLECTION.—In order to carry out this

paragraph, the Secretary shall require Medicare+Choice

organizations (and eligible organizations with risk-sharing

contracts under section 1876) to submit data regarding

inpatient hospital services for periods beginning on or after

July 1, 1997, and data regarding other services and other

information as the Secretary deems necessary for periods

beginning on or after July 1, 1998. The Secretary may

not require an organization to submit such data before

January 1, 1998.

‘‘(C) INITIAL IMPLEMENTATION.—The Secretary shall

first provide for implementation of a risk adjustment methodology that accounts for variations in per capita costs

based on health status and other demographic factors for

payments by no later than January 1, 2000.

‘‘(D) UNIFORM APPLICATION TO ALL TYPES OF PLANS.—

Subject to section 1859(e)(4), the methodology shall be

applied uniformly without regard to the type of plan.

‘‘(b) ANNUAL ANNOUNCEMENT OF PAYMENT RATES.—

‘‘(1) ANNUAL ANNOUNCEMENT.—The Secretary shall

annually determine, and shall announce (in a manner intended

to provide notice to interested parties) not later than March

1 before the calendar year concerned—

‘‘(A) the annual Medicare+Choice capitation rate for

each Medicare+Choice payment area for the year, and

‘‘(B) the risk and other factors to be used in adjusting

such rates under subsection (a)(1)(A) for payments for

months in that year.

‘‘(2) ADVANCE NOTICE OF METHODOLOGICAL CHANGES.—At

least 45 days before making the announcement under paragraph (1) for a year, the Secretary shall provide for notice

to Medicare+Choice organizations of proposed changes to be

made in the methodology from the methodology and assumptions used in the previous announcement and shall provide
H. R. 2015—51

such organizations an opportunity to comment on such proposed

changes.

‘‘(3) EXPLANATION OF ASSUMPTIONS.—In each announcement made under paragraph (1), the Secretary shall include

an explanation of the assumptions and changes in methodology

used in the announcement in sufficient detail so that

Medicare+Choice organizations can compute monthly adjusted

Medicare+Choice capitation rates for individuals in each

Medicare+Choice payment area which is in whole or in part

within the service area of such an organization.

‘‘(c) CALCULATION OF ANNUAL MEDICARE+CHOICE CAPITATION

RATES.—

‘‘(1) IN GENERAL.—For purposes of this part, subject to

paragraphs (6)(C) and (7), each annual Medicare+Choice capitation rate, for a Medicare+Choice payment area for a contract

year consisting of a calendar year, is equal to the largest

of the amounts specified in the following subparagraph (A),

(B), or (C):

‘‘(A) BLENDED CAPITATION RATE.—The sum of—

‘‘(i) the area-specific percentage (as specified under

paragraph (2) for the year) of the annual area-specific

Medicare+Choice capitation rate for the

Medicare+Choice payment area, as determined under

paragraph (3) for the year, and

‘‘(ii) the national percentage (as specified under

paragraph (2) for the year) of the input-price-adjusted

annual national Medicare+Choice capitation rate, as

determined under paragraph (4) for the year,

multiplied by the budget neutrality adjustment factor

determined under paragraph (5).

‘‘(B) MINIMUM AMOUNT.—12 multiplied by the following

amount:

‘‘(i) For 1998, $367 (but not to exceed, in the case

of an area outside the 50 States and the District of

Columbia, 150 percent of the annual per capita rate

of payment for 1997 determined under section

1876(a)(1)(C) for the area).

‘‘(ii) For a succeeding year, the minimum amount

specified in this clause (or clause (i)) for the preceding

year increased by the national per capita

Medicare+Choice growth percentage, described in paragraph (6)(A) for that succeeding year.

‘‘(C) MINIMUM PERCENTAGE INCREASE.— ‘‘(i) For 1998, 102 percent of the annual per capita

rate of payment for 1997 determined under section

1876(a)(1)(C) for the Medicare+Choice payment area.

‘‘(ii) For a subsequent year, 102 percent of the

annual Medicare+Choice capitation rate under this

paragraph for the area for the previous year.

‘‘(2) AREA-SPECIFIC AND NATIONAL PERCENTAGES.—For purposes of paragraph (1)(A)—

‘‘(A) for 1998, the ‘area-specific percentage’ is 90 percent and the ‘national percentage’ is 10 percent,

‘‘(B) for 1999, the ‘area-specific percentage’ is 82 percent and the ‘national percentage’ is 18 percent,

‘‘(C) for 2000, the ‘area-specific percentage’ is 74 percent and the ‘national percentage’ is 26 percent,
H. R. 2015—52

‘‘(D) for 2001, the ‘area-specific percentage’ is 66 percent and the ‘national percentage’ is 34 percent,

‘‘(E) for 2002, the ‘area-specific percentage’ is 58 percent and the ‘national percentage’ is 42 percent, and

‘‘(F) for a year after 2002, the ‘area-specific percentage’

is 50 percent and the ‘national percentage’ is 50 percent.

‘‘(3) ANNUAL AREA-SPECIFIC MEDICARE+CHOICE CAPITATION

RATE.—

‘‘(A) IN GENERAL.—For purposes of paragraph (1)(A),

subject to subparagraph (B), the annual area-specific

Medicare+Choice capitation rate for a Medicare+Choice

payment area—

‘‘(i) for 1998 is, subject to subparagraph (D), the

annual per capita rate of payment for 1997 determined

under section 1876(a)(1)(C) for the area, increased by

the national per capita Medicare+Choice growth

percentage for 1998 (described in paragraph (6)(A));

or

‘‘(ii) for a subsequent year is the annual areaspecific Medicare+Choice capitation rate for the previous year determined under this paragraph for the

area, increased by the national per capita

Medicare+Choice growth percentage for such subsequent year.

‘‘(B) REMOVAL OF MEDICAL EDUCATION FROM CALCULATION OF ADJUSTED AVERAGE PER CAPITA COST.—

‘‘(i) IN GENERAL.—In determining the area-specific

Medicare+Choice capitation rate under subparagraph

(A) for a year (beginning with 1998), the annual per

capita rate of payment for 1997 determined under section 1876(a)(1)(C) shall be adjusted to exclude from

the rate the applicable percent (specified in clause

(ii)) of the payment adjustments described in subparagraph (C).

‘‘(ii) APPLICABLE PERCENT.—For purposes of clause

(i), the applicable percent for—

‘‘(I) 1998 is 20 percent,

‘‘(II) 1999 is 40 percent,

‘‘(III) 2000 is 60 percent,

‘‘(IV) 2001 is 80 percent, and

‘‘(V) a succeeding year is 100 percent.

‘‘(C) PAYMENT ADJUSTMENT.— ‘‘(i) IN GENERAL.—Subject to clause (ii), the payment adjustments described in this subparagraph are

payment adjustments which the Secretary estimates

were payable during 1997—

‘‘(I) for the indirect costs of medical education

under section 1886(d)(5)(B), and

‘‘(II) for direct graduate medical education

costs under section 1886(h).

‘‘(ii) TREATMENT OF PAYMENTS COVERED UNDER

STATE HOSPITAL REIMBURSEMENT SYSTEM.—To the

extent that the Secretary estimates that an annual

per capita rate of payment for 1997 described in clause

(i) reflects payments to hospitals reimbursed under

section 1814(b)(3), the Secretary shall estimate a payment adjustment that is comparable to the payment
H. R. 2015—53

adjustment that would have been made under clause

(i) if the hospitals had not been reimbursed under

such section.

‘‘(D) TREATMENT OF AREAS WITH HIGHLY VARIABLE PAYMENT RATES.—In the case of a Medicare+Choice payment

area for which the annual per capita rate of payment

determined under section 1876(a)(1)(C) for 1997 varies by

more than 20 percent from such rate for 1996, for purposes

of this subsection the Secretary may substitute for such

rate for 1997 a rate that is more representative of the

costs of the enrollees in the area.

‘‘(4) INPUT-PRICE-ADJUSTED ANNUAL NATIONAL

MEDICARE+CHOICE CAPITATION RATE.—

‘‘(A) IN GENERAL.—For purposes of paragraph (1)(A),

the input-price-adjusted annual national Medicare+Choice

capitation rate for a Medicare+Choice payment area for

a year is equal to the sum, for all the types of medicare

services (as classified by the Secretary), of the product

(for each such type of service) of—

‘‘(i) the national standardized annual

Medicare+Choice capitation rate (determined under

subparagraph (B)) for the year,

‘‘(ii) the proportion of such rate for the year which

is attributable to such type of services, and

‘‘(iii) an index that reflects (for that year and that

type of services) the relative input price of such services

in the area compared to the national average input

price of such services.

In applying clause (iii), the Secretary may, subject to

subparagraph (C), apply those indices under this title that

are used in applying (or updating) national payment rates

for specific areas and localities.

‘‘(B) NATIONAL STANDARDIZED ANNUAL

MEDICARE+CHOICE CAPITATION RATE.—In subparagraph

(A)(i), the ‘national standardized annual Medicare+Choice

capitation rate’ for a year is equal to—

‘‘(i) the sum (for all Medicare+Choice payment

areas) of the product of—

‘‘(I) the annual area-specific Medicare+Choice

capitation rate for that year for the area under

paragraph (3), and

‘‘(II) the average number of medicare beneficiaries residing in that area in the year, multiplied by the average of the risk factor weights

used to adjust payments under subsection (a)(1)(A)

for such beneficiaries in such area; divided by

‘‘(ii) the sum of the products described in clause

(i)(II) for all areas for that year.

‘‘(C) SPECIAL RULES FOR 1998.—In applying this paragraph for 1998—

‘‘(i) medicare services shall be divided into 2 types

of services: part A services and part B services;

‘‘(ii) the proportions described in subparagraph

(A)(ii)—

‘‘(I) for part A services shall be the ratio

(expressed as a percentage) of the national average

annual per capita rate of payment for part A for
H. R. 2015—54

1997 to the total national average annual per capita rate of payment for parts A and B for 1997,

and

‘‘(II) for part B services shall be 100 percent

minus the ratio described in subclause (I);

‘‘(iii) for part A services, 70 percent of payments

attributable to such services shall be adjusted by the

index used under section 1886(d)(3)(E) to adjust payment rates for relative hospital wage levels for hospitals located in the payment area involved;

‘‘(iv) for part B services—

‘‘(I) 66 percent of payments attributable to

such services shall be adjusted by the index of

the geographic area factors under section 1848(e)

used to adjust payment rates for physicians’ services furnished in the payment area, and

‘‘(II) of the remaining 34 percent of the amount

of such payments, 40 percent shall be adjusted

by the index described in clause (iii); and

‘‘(v) the index values shall be computed based only

on the beneficiary population who are 65 years of age

or older and who are not determined to have end

stage renal disease.

The Secretary may continue to apply the rules described

in this subparagraph (or similar rules) for 1999.

‘‘(5) PAYMENT ADJUSTMENT BUDGET NEUTRALITY FACTOR.—

For purposes of paragraph (1)(A), for each year, the Secretary

shall determine a budget neutrality adjustment factor so that

the aggregate of the payments under this part shall equal

the aggregate payments that would have been made under

this part if payment were based entirely on area-specific capitation rates.

‘‘(6) NATIONAL PER CAPITA MEDICARE+CHOICE GROWTH

PERCENTAGE DEFINED.— ‘‘(A) IN GENERAL.—In this part, the ‘national per capita

Medicare+Choice growth percentage’ for a year is the

percentage determined by the Secretary, by March 1st

before the beginning of the year involved, to reflect the

Secretary’s estimate of the projected per capita rate of

growth in expenditures under this title for an individual

entitled to benefits under part A and enrolled under part

B, reduced by the number of percentage points specified

in subparagraph (B) for the year. Separate determinations

may be made for aged enrollees, disabled enrollees, and

enrollees with end-stage renal disease.

‘‘(B) ADJUSTMENT.—The number of percentage points

specified in this subparagraph is—

‘‘(i) for 1998, 0.8 percentage points,

‘‘(ii) for 1999, 0.5 percentage points,

‘‘(iii) for 2000, 0.5 percentage points,

‘‘(iv) for 2001, 0.5 percentage points,

‘‘(v) for 2002, 0.5 percentage points, and

‘‘(vi) for a year after 2002, 0 percentage points.

‘‘(C) ADJUSTMENT FOR OVER OR UNDER PROJECTION OF

NATIONAL PER CAPITA MEDICARE+CHOICE GROWTH PERCENTAGE.—Beginning with rates calculated for 1999, before

computing rates for a year as described in paragraph (1),
H. R. 2015—55

the Secretary shall adjust all area-specific and national

Medicare+Choice capitation rates (and beginning in 2000,

the minimum amount) for the previous year for the differences between the projections of the national per capita

Medicare+Choice growth percentage for that year and previous years and the current estimate of such percentage

for such years.

‘‘(7) ADJUSTMENT FOR NATIONAL COVERAGE DETERMINATIONS.—If the Secretary makes a determination with respect

to coverage under this title that the Secretary projects will

result in a significant increase in the costs to Medicare+Choice

of providing benefits under contracts under this part (for periods after any period described in section 1852(a)(5)), the Secretary shall adjust appropriately the payments to such

organizations under this part.

‘‘(d) MEDICARE+CHOICE PAYMENT AREA DEFINED.—

‘‘(1) IN GENERAL.—In this part, except as provided in paragraph (3), the term ‘Medicare+Choice payment area’ means

a county, or equivalent area specified by the Secretary.

‘‘(2) RULE FOR ESRD BENEFICIARIES.—In the case of individuals who are determined to have end stage renal disease,

the Medicare+Choice payment area shall be a State or such

other payment area as the Secretary specifies.

‘‘(3) GEOGRAPHIC ADJUSTMENT.—

‘‘(A) IN GENERAL.—Upon written request of the chief

executive officer of a State for a contract year (beginning

after 1998) made by not later than February 1 of the

previous year, the Secretary shall make a geographic

adjustment to a Medicare+Choice payment area in the

State otherwise determined under paragraph (1)—

‘‘(i) to a single statewide Medicare+Choice payment

area,

‘‘(ii) to the metropolitan based system described

in subparagraph (C), or

‘‘(iii) to consolidating into a single Medicare+Choice

payment area noncontiguous counties (or equivalent

areas described in paragraph (1)) within a State.

Such adjustment shall be effective for payments for months

beginning with January of the year following the year

in which the request is received.

‘‘(B) BUDGET NEUTRALITY ADJUSTMENT.—In the case

of a State requesting an adjustment under this paragraph,

the Secretary shall initially (and annually thereafter)

adjust the payment rates otherwise established under this

section for Medicare+Choice payment areas in the State

in a manner so that the aggregate of the payments under

this section in the State shall not exceed the aggregate

payments that would have been made under this section

for Medicare+Choice payment areas in the State in the

absence of the adjustment under this paragraph.

‘‘(C) METROPOLITAN BASED SYSTEM.—The metropolitan

based system described in this subparagraph is one in

which—

‘‘(i) all the portions of each metropolitan statistical

area in the State or in the case of a consolidated

metropolitan statistical area, all of the portions of each

primary metropolitan statistical area within the
H. R. 2015—56

consolidated area within the State, are treated as a

single Medicare+Choice payment area, and

‘‘(ii) all areas in the State that do not fall within

a metropolitan statistical area are treated as a single

Medicare+Choice payment area.

‘‘(D) AREAS.—In subparagraph (C), the terms ‘metropolitan statistical area’, ‘consolidated metropolitan statistical area’, and ‘primary metropolitan statistical area’ mean

any area designated as such by the Secretary of Commerce.

‘‘(e) SPECIAL RULES FOR INDIVIDUALS ELECTING MSA PLANS.—

‘‘(1) IN GENERAL.—If the amount of the Medicare+Choice

monthly MSA premium (as defined in section 1854(b)(2)(C))

for an MSA plan for a year is less than 1⁄12 of the annual

Medicare+Choice capitation rate applied under this section for

the area and year involved, the Secretary shall deposit an

amount equal to 100 percent of such difference in a

Medicare+Choice MSA established (and, if applicable, designated) by the individual under paragraph (2).

‘‘(2) ESTABLISHMENT AND DESIGNATION OF

MEDICARE+CHOICE MEDICAL SAVINGS ACCOUNT AS REQUIREMENT

FOR PAYMENT OF CONTRIBUTION.—In the case of an individual

who has elected coverage under an MSA plan, no payment

shall be made under paragraph (1) on behalf of an individual

for a month unless the individual—

‘‘(A) has established before the beginning of the month

(or by such other deadline as the Secretary may specify)

a Medicare+Choice MSA (as defined in section 138(b)(2)

of the Internal Revenue Code of 1986), and

‘‘(B) if the individual has established more than one

such Medicare+Choice MSA, has designated one of such

accounts as the individual’s Medicare+Choice MSA for purposes of this part.

Under rules under this section, such an individual may change

the designation of such account under subparagraph (B) for

purposes of this part.

‘‘(3) LUMP-SUM DEPOSIT OF MEDICAL SAVINGS ACCOUNT CON- TRIBUTION.—In the case of an individual electing an MSA plan

effective beginning with a month in a year, the amount of

the contribution to the Medicare+Choice MSA on behalf of

the individual for that month and all successive months in

the year shall be deposited during that first month. In the

case of a termination of such an election as of a month before

the end of a year, the Secretary shall provide for a procedure

for the recovery of deposits attributable to the remaining

months in the year.

‘‘(f) PAYMENTS FROM TRUST FUND.—The payment to a

Medicare+Choice organization under this section for individuals

enrolled under this part with the organization and payments to

a Medicare+Choice MSA under subsection (e)(1) shall be made

from the Federal Hospital Insurance Trust Fund and the Federal

Supplementary Medical Insurance Trust Fund in such proportion

as the Secretary determines reflects the relative weight that benefits

under part A and under part B represents of the actuarial value

of the total benefits under this title. Monthly payments otherwise

payable under this section for October 2000 shall be paid on the

first business day of such month. Monthly payments otherwise

payable under this section for October 2001 shall be paid on the
H. R. 2015—57

last business day of September 2001. Monthly payments otherwise

payable under this section for October 2006 shall be paid on the

first business day of October 2006.

‘‘(g) SPECIAL RULE FOR CERTAIN INPATIENT HOSPITAL STAYS.—

In the case of an individual who is receiving inpatient hospital

services from a subsection (d) hospital (as defined in section

1886(d)(1)(B)) as of the effective date of the individual’s—

‘‘(1) election under this part of a Medicare+Choice plan

offered by a Medicare+Choice organization—

‘‘(A) payment for such services until the date of the

individual’s discharge shall be made under this title

through the Medicare+Choice plan or the original medicare

fee-for-service program option described in section

1851(a)(1)(A) (as the case may be) elected before the election with such organization,

‘‘(B) the elected organization shall not be financially

responsible for payment for such services until the date

after the date of the individual’s discharge, and

‘‘(C) the organization shall nonetheless be paid the

full amount otherwise payable to the organization under

this part; or

‘‘(2) termination of election with respect to a

Medicare+Choice organization under this part—

‘‘(A) the organization shall be financially responsible

for payment for such services after such date and until

the date of the individual’s discharge,

‘‘(B) payment for such services during the stay shall

not be made under section 1886(d) or by any succeeding

Medicare+Choice organization, and

‘‘(C) the terminated organization shall not receive any

payment with respect to the individual under this part

during the period the individual is not enrolled.

‘‘(h) SPECIAL RULE FOR HOSPICE CARE.— ‘‘(1) INFORMATION.—A contract under this part shall require

the Medicare+Choice organization to inform each individual

enrolled under this part with a Medicare+Choice plan offered

by the organization about the availability of hospice care if—

‘‘(A) a hospice program participating under this title

is located within the organization’s service area; or

‘‘(B) it is common practice to refer patients to hospice

programs outside such service area.

‘‘(2) PAYMENT.—If an individual who is enrolled with a

Medicare+Choice organization under this part makes an election under section 1812(d)(1) to receive hospice care from a

particular hospice program—

‘‘(A) payment for the hospice care furnished to the

individual shall be made to the hospice program elected

by the individual by the Secretary;

‘‘(B) payment for other services for which the individual

is eligible notwithstanding the individual’s election of hospice care under section 1812(d)(1), including services not

related to the individual’s terminal illness, shall be made

by the Secretary to the Medicare+Choice organization or

the provider or supplier of the service instead of payments

calculated under subsection (a); and

‘‘(C) the Secretary shall continue to make monthly

payments to the Medicare+Choice organization in an
H. R. 2015—58

amount equal to the value of the additional benefits

required under section 1854(f)(1)(A).

‘‘PREMIUMS

‘‘SEC. 1854. (a) SUBMISSION OF PROPOSED PREMIUMS AND

RELATED INFORMATION.— (1) IN GENERAL.—Not later than May 1 of each year, each

Medicare+Choice organization shall submit to the Secretary,

in a form and manner specified by the Secretary and for each

Medicare+Choice plan for the service area in which it intends

to be offered in the following year—

‘‘(A) the information described in paragraph (2), (3),

or (4) for the type of plan involved; and

‘‘(B) the enrollment capacity (if any) in relation to

the plan and area.

‘‘(2) INFORMATION REQUIRED FOR COORDINATED CARE

PLANS.—For a Medicare+Choice plan described in section

1851(a)(2)(A), the information described in this paragraph is

as follows:

‘‘(A) BASIC (AND ADDITIONAL) BENEFITS.—For benefits

described in 1852(a)(1)(A)—

‘‘(i) the adjusted community rate (as defined in

subsection (f)(3));

‘‘(ii) the Medicare+Choice monthly basic beneficiary premium (as defined in subsection (b)(2)(A));

‘‘(iii) a description of deductibles, coinsurance, and

copayments applicable under the plan and the actuarial value of such deductibles, coinsurance, and copayments, described in subsection (e)(1)(A); and

‘‘(iv) if required under subsection (f)(1), a description of the additional benefits to be provided pursuant

to such subsection and the value determined for such

proposed benefits under such subsection.

‘‘(B) SUPPLEMENTAL BENEFITS.—For benefits described

in 1852(a)(3)—

‘‘(i) the adjusted community rate (as defined in

subsection (f)(3));

‘‘(ii) the Medicare+Choice monthly supplemental

beneficiary premium (as defined in subsection

(b)(2)(B)); and

‘‘(iii) a description of deductibles, coinsurance, and

copayments applicable under the plan and the actuarial value of such deductibles, coinsurance, and copayments, described in subsection (e)(2).

‘‘(3) REQUIREMENTS FOR MSA PLANS.—For an MSA plan

described, the information described in this paragraph is as

follows:

‘‘(A) BASIC (AND ADDITIONAL) BENEFITS.—For benefits

described in 1852(a)(1)(A), the amount of the

Medicare+Choice monthly MSA premium.

‘‘(B) SUPPLEMENTAL BENEFITS.—For benefits described

in 1852(a)(3), the amount of the Medicare+Choice monthly

supplementary beneficiary premium.

‘‘(4) REQUIREMENTS FOR PRIVATE FEE-FOR-SERVICE PLANS.— For a Medicare+Choice plan described in section 1851(a)(2)(C)

for benefits described in 1852(a)(1)(A), the information

described in this paragraph is as follows:
H. R. 2015—59

‘‘(A) BASIC (AND ADDITIONAL) BENEFITS.—For benefits

described in 1852(a)(1)(A)—

‘‘(i) the adjusted community rate (as defined in

subsection (f)(3));

‘‘(ii) the amount of the Medicare+Choice monthly

basic beneficiary premium;

‘‘(iii) a description of the deductibles, coinsurance,

and copayments applicable under the plan, and the

actuarial value of such deductibles, coinsurance, and

copayments, as described in subsection (e)(4)(A); and

‘‘(iv) if required under subsection (f)(1), a description of the additional benefits to be provided pursuant

to such subsection and the value determined for such

proposed benefits under such subsection.

‘‘(B) SUPPLEMENTAL BENEFITS.—For benefits described

in 1852(a)(3), the amount of the Medicare+Choice monthly

supplemental beneficiary premium (as defined in subsection (b)(2)(B)).

‘‘(5) REVIEW.—

‘‘(A) IN GENERAL.—Subject to subparagraph (B), the

Secretary shall review the adjusted community rates, the

amounts of the basic and supplemental premiums, and

values filed under this subsection and shall approve or

disapprove such rates, amounts, and value so submitted.

‘‘(B) EXCEPTION.—The Secretary shall not review,

approve, or disapprove the amounts submitted under paragraph (3) or subparagraphs (A)(ii) and (B) of paragraph

(4).

‘‘(b) MONTHLY PREMIUM CHARGED.— ‘‘(1) IN GENERAL.— ‘‘(A) RULE FOR OTHER THAN MSA PLANS.—The monthly

amount of the premium charged to an individual enrolled

in a Medicare+Choice plan (other than an MSA plan)

offered by a Medicare+Choice organization shall be equal

to the sum of the Medicare+Choice monthly basic beneficiary premium and the Medicare+Choice monthly supplementary beneficiary premium (if any).

‘‘(B) MSA PLANS.—The monthly amount of the premium charged to an individual enrolled in an MSA plan

offered by a Medicare+Choice organization shall be equal

to the Medicare+Choice monthly supplemental beneficiary

premium (if any).

‘‘(2) PREMIUM TERMINOLOGY DEFINED.—For purposes of this

part:

‘‘(A) THE MEDICARE+CHOICE MONTHLY BASIC BENEFICIARY PREMIUM.—The term ‘Medicare+Choice monthly

basic beneficiary premium’ means, with respect to a

Medicare+Choice plan, the amount authorized to be

charged under subsection (e)(1) for the plan, or, in the

case of a Medicare+Choice private fee-for-service plan, the

amount filed under subsection (a)(4)(A)(ii).

‘‘(B) MEDICARE+CHOICE MONTHLY SUPPLEMENTAL BENEFICIARY PREMIUM.—The term ‘Medicare+Choice monthly

supplemental beneficiary premium’ means, with respect

to a Medicare+Choice plan, the amount authorized to be

charged under subsection (e)(2) for the plan or, in the

case of a MSA plan or Medicare+Choice private fee-for-
H. R. 2015—60

service plan, the amount filed under paragraph (3)(B) or

(4)(B) of subsection (a).

‘‘(C) MEDICARE+CHOICE MONTHLY MSA PREMIUM.—The

term ‘Medicare+Choice monthly MSA premium’ means,

with respect to a Medicare+Choice plan, the amount of

such premium filed under subsection (a)(3)(A) for the plan.

‘‘(c) UNIFORM PREMIUM.—The Medicare+Choice monthly basic

and supplemental beneficiary premium, the Medicare+Choice

monthly MSA premium charged under subsection (b) of a

Medicare+Choice organization under this part may not vary among

individuals enrolled in the plan.

‘‘(d) TERMS AND CONDITIONS OF IMPOSING PREMIUMS.—Each

Medicare+Choice organization shall permit the payment of

Medicare+Choice monthly basic and supplemental beneficiary premiums on a monthly basis, may terminate election of individuals

for a Medicare+Choice plan for failure to make premium payments

only in accordance with section 1851(g)(3)(B)(i), and may not provide

for cash or other monetary rebates as an inducement for enrollment

or otherwise.

‘‘(e) LIMITATION ON ENROLLEE LIABILITY.—

‘‘(1) FOR BASIC AND ADDITIONAL BENEFITS.—In no event

may—

‘‘(A) the Medicare+Choice monthly basic beneficiary

premium (multiplied by 12) and the actuarial value of

the deductibles, coinsurance, and copayments applicable

on average to individuals enrolled under this part with

a Medicare+Choice plan described in section 1851(a)(2)(A)

of an organization with respect to required benefits

described in section 1852(a)(1)(A) and additional benefits

(if any) required under subsection (f)(1)(A) for a year,

exceed

‘‘(B) the actuarial value of the deductibles, coinsurance,

and copayments that would be applicable on average to

individuals entitled to benefits under part A and enrolled

under part B if they were not members of a

Medicare+Choice organization for the year.

‘‘(2) FOR SUPPLEMENTAL BENEFITS.—If the Medicare+Choice

organization provides to its members enrolled under this part

in a Medicare+Choice plan described in section 1851(a)(2)(A)

with respect to supplemental benefits described in section

1852(a)(3), the sum of the Medicare+Choice monthly supplemental beneficiary premium (multiplied by 12) charged and

the actuarial value of its deductibles, coinsurance, and copayments charged with respect to such benefits may not exceed

the adjusted community rate for such benefits (as defined in

subsection (f)(3)).

‘‘(3) DETERMINATION ON OTHER BASIS.—If the Secretary

determines that adequate data are not available to determine

the actuarial value under paragraph (1)(A) or (2), the Secretary

may determine such amount with respect to all individuals

in same geographic area, the State, or in the United States,

eligible to enroll in the Medicare+Choice plan involved under

this part or on the basis of other appropriate data.

‘‘(4) SPECIAL RULE FOR PRIVATE FEE-FOR-SERVICE PLANS.—

With respect to a Medicare+Choice private fee-for-service plan

(other than a plan that is an MSA plan), in no event may—
H. R. 2015—61

‘‘(A) the actuarial value of the deductibles, coinsurance,

and copayments applicable on average to individuals

enrolled under this part with such a plan of an organization

with respect to required benefits described in section

1852(a)(1), exceed

‘‘(B) the actuarial value of the deductibles, coinsurance,

and copayments that would be applicable on average to

individuals entitled to benefits under part A and enrolled

under part B if they were not members of a

Medicare+Choice organization for the year.

‘‘(f) REQUIREMENT FOR ADDITIONAL BENEFITS.—

‘‘(1) REQUIREMENT.—

‘‘(A) IN GENERAL.—Each Medicare+Choice organization

(in relation to a Medicare+Choice plan, other than an MSA

plan, it offers) shall provide that if there is an excess

amount (as defined in subparagraph (B)) for the plan for

a contract year, subject to the succeeding provisions of

this subsection, the organization shall provide to individuals such additional benefits (as the organization may

specify) in a value which the Secretary determines is at

least equal to the adjusted excess amount (as defined in

subparagraph (C)).

‘‘(B) EXCESS AMOUNT.—For purposes of this paragraph,

the ‘excess amount’, for an organization for a plan, is the

amount (if any) by which—

‘‘(i) the average of the capitation payments made

to the organization under section 1853 for the plan

at the beginning of contract year, exceeds

‘‘(ii) the actuarial value of the required benefits

described in section 1852(a)(1)(A) under the plan for

individuals under this part, as determined based upon

an adjusted community rate described in paragraph

(3) (as reduced for the actuarial value of the coinsurance, copayments, and deductibles under parts A and

B).

‘‘(C) ADJUSTED EXCESS AMOUNT.—For purposes of this

paragraph, the ‘adjusted excess amount’, for an organization for a plan, is the excess amount reduced to reflect

any amount withheld and reserved for the organization

for the year under paragraph (2).

‘‘(D) UNIFORM APPLICATION.—This paragraph shall be

applied uniformly for all enrollees for a plan.

‘‘(E) CONSTRUCTION.—Nothing in this subsection shall

be construed as preventing a Medicare+Choice organization

from providing supplemental benefits (described in section

1852(a)(3)) that are in addition to the health care benefits

otherwise required to be provided under this paragraph

and from imposing a premium for such supplemental benefits.

‘‘(2) STABILIZATION FUND.—A Medicare+Choice organization

may provide that a part of the value of an excess amount

described in paragraph (1) be withheld and reserved in the

Federal Hospital Insurance Trust Fund and in the Federal

Supplementary Medical Insurance Trust Fund (in such proportions as the Secretary determines to be appropriate) by the

Secretary for subsequent annual contract periods, to the extent

required to stabilize and prevent undue fluctuations in the
H. R. 2015—62

additional benefits offered in those subsequent periods by the

organization in accordance with such paragraph. Any of such

value of the amount reserved which is not provided as additional benefits described in paragraph (1)(A) to individuals

electing the Medicare+Choice plan of the organization in accordance with such paragraph prior to the end of such periods,

shall revert for the use of such trust funds.

‘‘(3) ADJUSTED COMMUNITY RATE.—For purposes of this subsection, subject to paragraph (4), the term ‘adjusted community

rate’ for a service or services means, at the election of a

Medicare+Choice organization, either—

‘‘(A) the rate of payment for that service or services

which the Secretary annually determines would apply to

an individual electing a Medicare+Choice plan under this

part if the rate of payment were determined under a

‘community rating system’ (as defined in section 1302(8)

of the Public Health Service Act, other than subparagraph

(C)), or

‘‘(B) such portion of the weighted aggregate premium,

which the Secretary annually estimates would apply to

such an individual, as the Secretary annually estimates

is attributable to that service or services,

but adjusted for differences between the utilization characteristics of the individuals electing coverage under this part and

the utilization characteristics of the other enrollees with the

plan (or, if the Secretary finds that adequate data are not

available to adjust for those differences, the differences between

the utilization characteristics of individuals selecting other

Medicare+Choice coverage, or Medicare+Choice eligible individuals in the area, in the State, or in the United States, eligible

to elect Medicare+Choice coverage under this part and the

utilization characteristics of the rest of the population in the

area, in the State, or in the United States, respectively).

‘‘(4) DETERMINATION BASED ON INSUFFICIENT DATA.—For

purposes of this subsection, if the Secretary finds that there

is insufficient enrollment experience to determine an average

of the capitation payments to be made under this part at

the beginning of a contract period or to determine (in the

case of a newly operated provider-sponsored organization or

other new organization) the adjusted community rate for the

organization, the Secretary may determine such an average

based on the enrollment experience of other contracts entered

into under this part and may determine such a rate using

data in the general commercial marketplace.

‘‘(g) PROHIBITION OF STATE IMPOSITION OF PREMIUM TAXES.— No State may impose a premium tax or similar tax with respect

to payments to Medicare+Choice organizations under section 1853.

‘‘ORGANIZATIONAL AND FINANCIAL REQUIREMENTS FOR

MEDICARE+CHOICE ORGANIZATIONS; PROVIDER-SPONSORED ORGANI- ZATIONS

‘‘SEC. 1855. (a) ORGANIZED AND LICENSED UNDER STATE LAW.— ‘‘(1) IN GENERAL.—Subject to paragraphs (2) and (3), a

Medicare+Choice organization shall be organized and licensed

under State law as a risk-bearing entity eligible to offer health

insurance or health benefits coverage in each State in which

it offers a Medicare+Choice plan.
H. R. 2015—63

‘‘(2) SPECIAL EXCEPTION FOR PROVIDER-SPONSORED

ORGANIZATIONS.—

‘‘(A) IN GENERAL.—In the case of a provider-sponsored

organization that seeks to offer a Medicare+Choice plan

in a State, the Secretary shall waive the requirement of

paragraph (1) that the organization be licensed in that

State if—

‘‘(i) the organization files an application for such

waiver with the Secretary by not later than November

1, 2002, and

‘‘(ii) the Secretary determines, based on the

application and other evidence presented to the Secretary, that any of the grounds for approval of the

application described in subparagraph (B), (C), or (D)

has been met.

‘‘(B) FAILURE TO ACT ON LICENSURE APPLICATION ON

A TIMELY BASIS.—The ground for approval of such a waiver

application described in this subparagraph is that the State

has failed to complete action on a licensing application

of the organization within 90 days of the date of the State’s

receipt of a substantially complete application. No period

before the date of the enactment of this section shall be

included in determining such 90-day period.

‘‘(C) DENIAL OF APPLICATION BASED ON DISCRIMINATORY

TREATMENT.—The ground for approval of such a waiver

application described in this subparagraph is that the State

has denied such a licensing application and—

‘‘(i) the standards or review process imposed by

the State as a condition of approval of the license

imposes any material requirements, procedures, or

standards (other than solvency requirements) to such

organizations that are not generally applicable to other

entities engaged in a substantially similar business,

or

‘‘(ii) the State requires the organization, as a condition of licensure, to offer any product or plan other

than a Medicare+Choice plan.

‘‘(D) DENIAL OF APPLICATION BASED ON APPLICATION

OF SOLVENCY REQUIREMENTS.—With respect to waiver

applications filed on or after the date of publication of

solvency standards under section 1856(a), the ground for

approval of such a waiver application described in this

subparagraph is that the State has denied such a licensing

application based (in whole or in part) on the organization’s

failure to meet applicable solvency requirements and—

‘‘(i) such requirements are not the same as the

solvency standards established under section 1856(a);

or

‘‘(ii) the State has imposed as a condition of

approval of the license documentation or information

requirements relating to solvency or other material

requirements, procedures, or standards relating to solvency that are different from the requirements, procedures, and standards applied by the Secretary under

subsection (d)(2).

For purposes of this paragraph, the term ‘solvency requirements’ means requirements relating to solvency and other
H. R. 2015—64

matters covered under the standards established under

section 1856(a).

‘‘(E) TREATMENT OF WAIVER.—In the case of a waiver

granted under this paragraph for a provider-sponsored

organization with respect to a State—

‘‘(i) LIMITATION TO STATE.—The waiver shall be

effective only with respect to that State and does not

apply to any other State.

‘‘(ii) LIMITATION TO 36-MONTH PERIOD.—The waiver

shall be effective only for a 36-month period and may

not be renewed.

‘‘(iii) CONDITIONED ON COMPLIANCE WITH

CONSUMER PROTECTION AND QUALITY STANDARDS.—The

continuation of the waiver is conditioned upon the

organization’s compliance with the requirements

described in subparagraph (G).

‘‘(iv) PREEMPTION OF STATE LAW.—Any provisions

of law of that State which relate to the licensing of

the organization and which prohibit the organization

from providing coverage pursuant to a contract under

this part shall be superseded.

‘‘(F) PROMPT ACTION ON APPLICATION.—The Secretary

shall grant or deny such a waiver application within 60

days after the date the Secretary determines that a

substantially complete waiver application has been filed.

Nothing in this section shall be construed as preventing

an organization which has had such a waiver application

denied from submitting a subsequent waiver application.

‘‘(G) APPLICATION AND ENFORCEMENT OF STATE

CONSUMER PROTECTION AND QUALITY STANDARDS.— ‘‘(i) IN GENERAL.—A waiver granted under this

paragraph to an organization with respect to licensing

under State law is conditioned upon the organization’s

compliance with all consumer protection and quality

standards insofar as such standards—

‘‘(I) would apply in the State to the organization if it were licensed under State law;

‘‘(II) are generally applicable to other

Medicare+Choice organizations and plans in the

State; and

‘‘(III) are consistent with the standards established under this part.

Such standards shall not include any standard preempted under section 1856(b)(3)(B).

‘‘(ii) INCORPORATION INTO CONTRACT.—In the case

of such a waiver granted to an organization with

respect to a State, the Secretary shall incorporate the

requirement that the organization (and

Medicare+Choice plans it offers) comply with standards

under clause (i) as part of the contract between the

Secretary and the organization under section 1857.

‘‘(iii) ENFORCEMENT.—In the case of such a waiver

granted to an organization with respect to a State,

the Secretary may enter into an agreement with the

State under which the State agrees to provide for

monitoring and enforcement activities with respect to

compliance of such an organization and its
H. R. 2015—65

Medicare+Choice plans with such standards. Such

monitoring and enforcement shall be conducted by the

State in the same manner as the State enforces such

standards with respect to other Medicare+Choice

organizations and plans, without discrimination based

on the type of organization to which the standards

apply. Such an agreement shall specify or establish

mechanisms by which compliance activities are undertaken, while not lengthening the time required to

review and process applications for waivers under this

paragraph.

‘‘(H) REPORT.—By not later than December 31, 2001,

the Secretary shall submit to the Committee on Ways

and Means and the Committee on Commerce of the House

of Representatives and the Committee on Finance of the

Senate a report regarding whether the waiver process

under this paragraph should be continued after December

31, 2002. In making such recommendation, the Secretary

shall consider, among other factors, the impact of such

process on beneficiaries and on the long-term solvency of

the program under this title.

‘‘(3) LICENSURE DOES NOT SUBSTITUTE FOR OR CONSTITUTE

CERTIFICATION.—The fact that an organization is licensed in

accordance with paragraph (1) does not deem the organization

to meet other requirements imposed under this part.

‘‘(b) ASSUMPTION OF FULL FINANCIAL RISK.—The

Medicare+Choice organization shall assume full financial risk on

a prospective basis for the provision of the health care services

for which benefits are required to be provided under section

1852(a)(1), except that the organization—

‘‘(1) may obtain insurance or make other arrangements

for the cost of providing to any enrolled member such services

the aggregate value of which exceeds such aggregate level

as the Secretary specifies from time to time,

‘‘(2) may obtain insurance or make other arrangements

for the cost of such services provided to its enrolled members

other than through the organization because medical necessity

required their provision before they could be secured through

the organization,

‘‘(3) may obtain insurance or make other arrangements

for not more than 90 percent of the amount by which its

costs for any of its fiscal years exceed 115 percent of its income

for such fiscal year, and

‘‘(4) may make arrangements with physicians or other

health care professionals, health care institutions, or any combination of such individuals or institutions to assume all or

part of the financial risk on a prospective basis for the provision

of basic health services by the physicians or other health professionals or through the institutions.

‘‘(c) CERTIFICATION OF PROVISION AGAINST RISK OF INSOLVENCY

FOR UNLICENSED PSOS.—

‘‘(1) IN GENERAL.—Each Medicare+Choice organization that

is a provider-sponsored organization, that is not licensed by

a State under subsection (a), and for which a waiver application

has been approved under subsection (a)(2), shall meet standards

established under section 1856(a) relating to the financial solvency and capital adequacy of the organization.
H. R. 2015—66

‘‘(2) CERTIFICATION PROCESS FOR SOLVENCY STANDARDS FOR

PSOS.—The Secretary shall establish a process for the receipt

and approval of applications of a provider-sponsored organization described in paragraph (1) for certification (and periodic

recertification) of the organization as meeting such solvency

standards. Under such process, the Secretary shall act upon

such a certification application not later than 60 days after

the date the application has been received.

‘‘(d) PROVIDER-SPONSORED ORGANIZATION DEFINED.—

‘‘(1) IN GENERAL.—In this part, the term ‘provider-sponsored organization’ means a public or private entity—

‘‘(A) that is established or organized, and operated,

by a health care provider, or group of affiliated health

care providers,

‘‘(B) that provides a substantial proportion (as defined

by the Secretary in accordance with paragraph (2)) of the

health care items and services under the contract under

this part directly through the provider or affiliated group

of providers, and

‘‘(C) with respect to which the affiliated providers

share, directly or indirectly, substantial financial risk with

respect to the provision of such items and services and

have at least a majority financial interest in the entity.

‘‘(2) SUBSTANTIAL PROPORTION.—In defining what is a

‘substantial proportion’ for purposes of paragraph (1)(B), the

Secretary—

‘‘(A) shall take into account the need for such an

organization to assume responsibility for providing—

‘‘(i) significantly more than the majority of the

items and services under the contract under this section through its own affiliated providers; and

‘‘(ii) most of the remainder of the items and services under the contract through providers with which

the organization has an agreement to provide such

items and services,

in order to assure financial stability and to address the

practical considerations involved in integrating the delivery

of a wide range of service providers;

‘‘(B) shall take into account the need for such an

organization to provide a limited proportion of the items

and services under the contract through providers that

are neither affiliated with nor have an agreement with

the organization; and

‘‘(C) may allow for variation in the definition of

substantial proportion among such organizations based on

relevant differences among the organizations, such as their

location in an urban or rural area.

‘‘(3) AFFILIATION.—For purposes of this subsection, a provider is ‘affiliated’ with another provider if, through contract,

ownership, or otherwise—

‘‘(A) one provider, directly or indirectly, controls, is

controlled by, or is under common control with the other,

‘‘(B) both providers are part of a controlled group of

corporations under section 1563 of the Internal Revenue

Code of 1986,
H. R. 2015—67

‘‘(C) each provider is a participant in a lawful combination under which each provider shares substantial financial

risk in connection with the organization’s operations, or

‘‘(D) both providers are part of an affiliated service

group under section 414 of such Code.

‘‘(4) CONTROL.—For purposes of paragraph (3), control is

presumed to exist if one party, directly or indirectly, owns,

controls, or holds the power to vote, or proxies for, not less

than 51 percent of the voting rights or governance rights of

another.

‘‘(5) HEALTH CARE PROVIDER DEFINED.—In this subsection,

the term ‘health care provider’ means—

‘‘(A) any individual who is engaged in the delivery

of health care services in a State and who is required

by State law or regulation to be licensed or certified by

the State to engage in the delivery of such services in

the State, and

‘‘(B) any entity that is engaged in the delivery of health

care services in a State and that, if it is required by

State law or regulation to be licensed or certified by the

State to engage in the delivery of such services in the

State, is so licensed.

‘‘(6) REGULATIONS.—The Secretary shall issue regulations

to carry out this subsection.

‘‘ESTABLISHMENT OF STANDARDS

‘‘SEC. 1856. (a) ESTABLISHMENT OF SOLVENCY STANDARDS FOR

PROVIDER-SPONSORED ORGANIZATIONS.— ‘‘(1) ESTABLISHMENT.— ‘‘(A) IN GENERAL.—The Secretary shall establish, on

an expedited basis and using a negotiated rulemaking process under subchapter III of chapter 5 of title 5, United

States Code, standards described in section 1855(c)(1)

(relating to the financial solvency and capital adequacy

of the organization) that entities must meet to qualify

as provider-sponsored organizations under this part.

‘‘(B) FACTORS TO CONSIDER FOR SOLVENCY STAND- ARDS.—In establishing solvency standards under subparagraph (A) for provider-sponsored organizations, the Secretary shall consult with interested parties and shall take

into account—

‘‘(i) the delivery system assets of such an organization and ability of such an organization to provide

services directly to enrollees through affiliated providers,

‘‘(ii) alternative means of protecting against insolvency, including reinsurance, unrestricted surplus, letters of credit, guarantees, organizational insurance coverage, partnerships with other licensed entities, and

valuation attributable to the ability of such an

organization to meet its service obligations through

direct delivery of care, and

‘‘(iii) any standards developed by the National

Association of Insurance Commissioners specifically for

risk-based health care delivery organizations.

‘‘(C) ENROLLEE PROTECTION AGAINST INSOLVENCY.—

Such standards shall include provisions to prevent enrollees
H. R. 2015—68

from being held liable to any person or entity for the

Medicare+Choice organization’s debts in the event of the

organization’s insolvency.

‘‘(2) PUBLICATION OF NOTICE.—In carrying out the rulemaking process under this subsection, the Secretary, after consultation with the National Association of Insurance Commissioners, the American Academy of Actuaries, organizations representative of medicare beneficiaries, and other interested parties, shall publish the notice provided for under section 564(a)

of title 5, United States Code, by not later than 45 days after

the date of the enactment of this section.

‘‘(3) TARGET DATE FOR PUBLICATION OF RULE.—As part of

the notice under paragraph (2), and for purposes of this subsection, the ‘target date for publication’ (referred to in section

564(a)(5) of such title) shall be April 1, 1998.

‘‘(4) ABBREVIATED PERIOD FOR SUBMISSION OF COMMENTS.—

In applying section 564(c) of such title under this subsection,

‘15 days’ shall be substituted for ‘30 days’.

‘‘(5) APPOINTMENT OF NEGOTIATED RULEMAKING COMMITTEE

AND FACILITATOR.—The Secretary shall provide for—

‘‘(A) the appointment of a negotiated rulemaking

committee under section 565(a) of such title by not later

than 30 days after the end of the comment period provided

for under section 564(c) of such title (as shortened under

paragraph (4)), and

‘‘(B) the nomination of a facilitator under section 566(c)

of such title by not later than 10 days after the date

of appointment of the committee.

‘‘(6) PRELIMINARY COMMITTEE REPORT.—The negotiated

rulemaking committee appointed under paragraph (5) shall

report to the Secretary, by not later than January 1, 1998,

regarding the committee’s progress on achieving a consensus

with regard to the rulemaking proceeding and whether such

consensus is likely to occur before 1 month before the target

date for publication of the rule. If the committee reports that

the committee has failed to make significant progress towards

such consensus or is unlikely to reach such consensus by the

target date, the Secretary may terminate such process and

provide for the publication of a rule under this subsection

through such other methods as the Secretary may provide.

‘‘(7) FINAL COMMITTEE REPORT.—If the committee is not

terminated under paragraph (6), the rulemaking committee

shall submit a report containing a proposed rule by not later

than 1 month before the target date of publication.

‘‘(8) INTERIM, FINAL EFFECT.—The Secretary shall publish

a rule under this subsection in the Federal Register by not

later than the target date of publication. Such rule shall be

effective and final immediately on an interim basis, but is

subject to change and revision after public notice and opportunity for a period (of not less than 60 days) for public comment.

In connection with such rule, the Secretary shall specify the

process for the timely review and approval of applications of

entities to be certified as provider-sponsored organizations

pursuant to such rules and consistent with this subsection.

‘‘(9) PUBLICATION OF RULE AFTER PUBLIC COMMENT.—The

Secretary shall provide for consideration of such comments
H. R. 2015—69

and republication of such rule by not later than 1 year after

the target date of publication.

‘‘(b) ESTABLISHMENT OF OTHER STANDARDS.— ‘‘(1) IN GENERAL.—The Secretary shall establish by regulation other standards (not described in subsection (a)) for

Medicare+Choice organizations and plans consistent with, and

to carry out, this part. The Secretary shall publish such regulations by June 1, 1998. In order to carry out this requirement

in a timely manner, the Secretary may promulgate regulations

that take effect on an interim basis, after notice and pending

opportunity for public comment.

‘‘(2) USE OF CURRENT STANDARDS.—Consistent with the

requirements of this part, standards established under this

subsection shall be based on standards established under section 1876 to carry out analogous provisions of such section.

‘‘(3) RELATION TO STATE LAWS.— ‘‘(A) IN GENERAL.—The standards established under

this subsection shall supersede any State law or regulation

(including standards described in subparagraph (B)) with

respect to Medicare+Choice plans which are offered by

Medicare+Choice organizations under this part to the

extent such law or regulation is inconsistent with such

standards.

‘‘(B) STANDARDS SPECIFICALLY SUPERSEDED.—State

standards relating to the following are superseded under

this paragraph:

‘‘(i) Benefit requirements.

‘‘(ii) Requirements relating to inclusion or treatment of providers.

‘‘(iii) Coverage determinations (including related

appeals and grievance processes).

‘‘CONTRACTS WITH MEDICARE+CHOICE ORGANIZATIONS

‘‘SEC. 1857. (a) IN GENERAL.—The Secretary shall not permit

the election under section 1851 of a Medicare+Choice plan offered

by a Medicare+Choice organization under this part, and no payment

shall be made under section 1853 to an organization, unless the

Secretary has entered into a contract under this section with the

organization with respect to the offering of such plan. Such a

contract with an organization may cover more than 1

Medicare+Choice plan. Such contract shall provide that the

organization agrees to comply with the applicable requirements

and standards of this part and the terms and conditions of payment

as provided for in this part.

‘‘(b) MINIMUM ENROLLMENT REQUIREMENTS.— ‘‘(1) IN GENERAL.—Subject to paragraph (2), the Secretary

may not enter into a contract under this section with a

Medicare+Choice organization unless the organization has—

‘‘(A) at least 5,000 individuals (or 1,500 individuals

in the case of an organization that is a provider-sponsored

organization) who are receiving health benefits through

the organization, or

‘‘(B) at least 1,500 individuals (or 500 individuals in

the case of an organization that is a provider-sponsored

organization) who are receiving health benefits through

the organization if the organization primarily serves

individuals residing outside of urbanized areas.
H. R. 2015—70

‘‘(2) APPLICATION TO MSA PLANS.—In applying paragraph

(1) in the case of a Medicare+Choice organization that is offering an MSA plan, paragraph (1) shall be applied by substituting

covered lives for individuals.

‘‘(3) ALLOWING TRANSITION.—The Secretary may waive the

requirement of paragraph (1) during the first 3 contract years

with respect to an organization.

‘‘(c) CONTRACT PERIOD AND EFFECTIVENESS.—

‘‘(1) PERIOD.—Each contract under this section shall be

for a term of at least 1 year, as determined by the Secretary,

and may be made automatically renewable from term to term

in the absence of notice by either party of intention to terminate

at the end of the current term.

‘‘(2) TERMINATION AUTHORITY.—In accordance with procedures established under subsection (h), the Secretary may at

any time terminate any such contract if the Secretary determines that the organization—

‘‘(A) has failed substantially to carry out the contract;

‘‘(B) is carrying out the contract in a manner inconsistent with the efficient and effective administration of this

part; or

‘‘(C) no longer substantially meets the applicable conditions of this part.

‘‘(3) EFFECTIVE DATE OF CONTRACTS.—The effective date

of any contract executed pursuant to this section shall be specified in the contract, except that in no case shall a contract

under this section which provides for coverage under an MSA

plan be effective before January 1999 with respect to such

coverage.

‘‘(4) PREVIOUS TERMINATIONS.—The Secretary may not

enter into a contract with a Medicare+Choice organization if

a previous contract with that organization under this section

was terminated at the request of the organization within the

preceding 5-year period, except in circumstances which warrant

special consideration, as determined by the Secretary.

‘‘(5) CONTRACTING AUTHORITY.—The authority vested in the

Secretary by this part may be performed without regard to

such provisions of law or regulations relating to the making,

performance, amendment, or modification of contracts of the

United States as the Secretary may determine to be inconsistent with the furtherance of the purpose of this title.

‘‘(d) PROTECTIONS AGAINST FRAUD AND BENEFICIARY PROTECTIONS.—

‘‘(1) PERIODIC AUDITING.—The Secretary shall provide for

the annual auditing of the financial records (including data

relating to medicare utilization, costs, and computation of the

adjusted community rate) of at least one-third of the

Medicare+Choice organizations offering Medicare+Choice plans

under this part. The Comptroller General shall monitor auditing activities conducted under this subsection.

‘‘(2) INSPECTION AND AUDIT.—Each contract under this section shall provide that the Secretary, or any person or organization designated by the Secretary—

‘‘(A) shall have the right to inspect or otherwise evaluate (i) the quality, appropriateness, and timeliness of services performed under the contract, and (ii) the facilities
H. R. 2015—71

of the organization when there is reasonable evidence of

some need for such inspection, and

‘‘(B) shall have the right to audit and inspect any

books and records of the Medicare+Choice organization

that pertain (i) to the ability of the organization to bear

the risk of potential financial losses, or (ii) to services

performed or determinations of amounts payable under

the contract.

‘‘(3) ENROLLEE NOTICE AT TIME OF TERMINATION.—Each

contract under this section shall require the organization to

provide (and pay for) written notice in advance of the contract’s

termination, as well as a description of alternatives for obtaining benefits under this title, to each individual enrolled with

the organization under this part.

‘‘(4) DISCLOSURE.—

‘‘(A) IN GENERAL.—Each Medicare+Choice organization

shall, in accordance with regulations of the Secretary,

report to the Secretary financial information which shall

include the following:

‘‘(i) Such information as the Secretary may require

demonstrating that the organization has a fiscally

sound operation.

‘‘(ii) A copy of the report, if any, filed with the

Health Care Financing Administration containing the

information required to be reported under section 1124

by disclosing entities.

‘‘(iii) A description of transactions, as specified by

the Secretary, between the organization and a party

in interest. Such transactions shall include—

‘‘(I) any sale or exchange, or leasing of any

property between the organization and a party

in interest;

‘‘(II) any furnishing for consideration of goods,

services (including management services), or facilities between the organization and a party in

interest, but not including salaries paid to employees for services provided in the normal course of

their employment and health services provided to

members by hospitals and other providers and by

staff, medical group (or groups), individual practice

association (or associations), or any combination

thereof; and

‘‘(III) any lending of money or other extension

of credit between an organization and a party in

interest.

The Secretary may require that information reported

respecting an organization which controls, is controlled by,

or is under common control with, another entity be in

the form of a consolidated financial statement for the

organization and such entity.

‘‘(B) PARTY IN INTEREST DEFINED.—For the purposes

of this paragraph, the term ‘party in interest’ means—

‘‘(i) any director, officer, partner, or employee

responsible for management or administration of a

Medicare+Choice organization, any person who is

directly or indirectly the beneficial owner of more than

5 percent of the equity of the organization, any person
H. R. 2015—72

who is the beneficial owner of a mortgage, deed of

trust, note, or other interest secured by, and valuing

more than 5 percent of the organization, and, in the

case of a Medicare+Choice organization organized as

a nonprofit corporation, an incorporator or member

of such corporation under applicable State corporation

law;

‘‘(ii) any entity in which a person described in

clause (i)—

‘‘(I) is an officer or director;

‘‘(II) is a partner (if such entity is organized

as a partnership);

‘‘(III) has directly or indirectly a beneficial

interest of more than 5 percent of the equity; or

‘‘(IV) has a mortgage, deed of trust, note, or

other interest valuing more than 5 percent of the

assets of such entity;

‘‘(iii) any person directly or indirectly controlling,

controlled by, or under common control with an

organization; and

‘‘(iv) any spouse, child, or parent of an individual

described in clause (i).

‘‘(C) ACCESS TO INFORMATION.—Each Medicare+Choice

organization shall make the information reported pursuant

to subparagraph (A) available to its enrollees upon reasonable request.

‘‘(5) LOAN INFORMATION.—The contract shall require the

organization to notify the Secretary of loans and other special

financial arrangements which are made between the organization and subcontractors, affiliates, and related parties.

‘‘(e) ADDITIONAL CONTRACT TERMS.—

‘‘(1) IN GENERAL.—The contract shall contain such other

terms and conditions not inconsistent with this part (including

requiring the organization to provide the Secretary with such

information) as the Secretary may find necessary and appropriate.

‘‘(2) COST-SHARING IN ENROLLMENT-RELATED COSTS.—

‘‘(A) IN GENERAL.—A Medicare+Choice organization

shall pay the fee established by the Secretary under

subparagraph (B).

‘‘(B) AUTHORIZATION.—The Secretary is authorized to

charge a fee to each Medicare+Choice organization with

a contract under this part that is equal to the organization’s

pro rata share (as determined by the Secretary) of the

aggregate amount of fees which the Secretary is directed

to collect in a fiscal year. Any amounts collected are authorized to be appropriated only for the purpose of carrying

out section 1851 (relating to enrollment and dissemination

of information) and section 4360 of the Omnibus Budget

Reconciliation Act of 1990 (relating to the health insurance

counseling and assistance program).

‘‘(C) CONTINGENCY.—For any fiscal year, the fees

authorized under subparagraph (B) are contingent upon

enactment in an appropriations act of a provision specifying

the aggregate amount of fees the Secretary is directed

to collect in a fiscal year. Fees collected during any fiscal
H. R. 2015—73

year under this paragraph shall be deposited and credited

as offsetting collections.

‘‘(D) LIMITATION.—In any fiscal year the fees collected

by the Secretary under subparagraph (B) shall not exceed

the lesser of—

‘‘(i) the estimated costs to be incurred by the Secretary in the fiscal year in carrying out the activities

described in section 1851 and section 4360 of the Omnibus Budget Reconciliation Act of 1990; or

‘‘(ii)(I) $200,000,000 in fiscal year 1998;

‘‘(II) $150,000,000 in fiscal year 1999; and

‘‘(III) $100,000,000 in fiscal year 2000 and each

subsequent fiscal year.

‘‘(f) PROMPT PAYMENT BY MEDICARE+CHOICE ORGANIZATION.—

‘‘(1) REQUIREMENT.—A contract under this part shall

require a Medicare+Choice organization to provide prompt payment (consistent with the provisions of sections 1816(c)(2) and

1842(c)(2)) of claims submitted for services and supplies furnished to enrollees pursuant to the contract, if the services

or supplies are not furnished under a contract between the

organization and the provider or supplier (or in the case of

a Medicare+Choice private fee-for-service plan, if a claim is

submitted to such organization by an enrollee).

‘‘(2) SECRETARY’S OPTION TO BYPASS NONCOMPLYING

ORGANIZATION.—In the case of a Medicare+Choice eligible

organization which the Secretary determines, after notice and

opportunity for a hearing, has failed to make payments of

amounts in compliance with paragraph (1), the Secretary may

provide for direct payment of the amounts owed to providers

and suppliers (or, in the case of a Medicare+Choice private

fee-for-service plan, amounts owed to the enrollees) for covered

services and supplies furnished to individuals enrolled under

this part under the contract. If the Secretary provides for

the direct payments, the Secretary shall provide for an appropriate reduction in the amount of payments otherwise made

to the organization under this part to reflect the amount of

the Secretary’s payments (and the Secretary’s costs in making

the payments).

‘‘(g) INTERMEDIATE SANCTIONS.— ‘‘(1) IN GENERAL.—If the Secretary determines that a

Medicare+Choice organization with a contract under this section—

‘‘(A) fails substantially to provide medically necessary

items and services that are required (under law or under

the contract) to be provided to an individual covered under

the contract, if the failure has adversely affected (or has

substantial likelihood of adversely affecting) the individual;

‘‘(B) imposes premiums on individuals enrolled under

this part in excess of the amount of the Medicare+Choice

monthly basic and supplemental beneficiary premiums permitted under section 1854;

‘‘(C) acts to expel or to refuse to re-enroll an individual

in violation of the provisions of this part;

‘‘(D) engages in any practice that would reasonably

be expected to have the effect of denying or discouraging

enrollment (except as permitted by this part) by eligible

individuals with the organization whose medical condition
H. R. 2015—74

or history indicates a need for substantial future medical

services;

‘‘(E) misrepresents or falsifies information that is furnished—

‘‘(i) to the Secretary under this part, or

‘‘(ii) to an individual or to any other entity under

this part;

‘‘(F) fails to comply with the applicable requirements

of section 1852(j)(3) or 1852(k)(2)(A)(ii); or

‘‘(G) employs or contracts with any individual or entity

that is excluded from participation under this title under

section 1128 or 1128A for the provision of health care,

utilization review, medical social work, or administrative

services or employs or contracts with any entity for the

provision (directly or indirectly) through such an excluded

individual or entity of such services;

the Secretary may provide, in addition to any other remedies

authorized by law, for any of the remedies described in paragraph (2).

‘‘(2) REMEDIES.—The remedies described in this paragraph

are—

‘‘(A) civil money penalties of not more than $25,000

for each determination under paragraph (1) or, with respect

to a determination under subparagraph (D) or (E)(i) of

such paragraph, of not more than $100,000 for each such

determination, plus, with respect to a determination under

paragraph (1)(B), double the excess amount charged in

violation of such paragraph (and the excess amount charged

shall be deducted from the penalty and returned to the

individual concerned), and plus, with respect to a determination under paragraph (1)(D), $15,000 for each individual not enrolled as a result of the practice involved,

‘‘(B) suspension of enrollment of individuals under this

part after the date the Secretary notifies the organization

of a determination under paragraph (1) and until the Secretary is satisfied that the basis for such determination

has been corrected and is not likely to recur, or

‘‘(C) suspension of payment to the organization under

this part for individuals enrolled after the date the Secretary notifies the organization of a determination under

paragraph (1) and until the Secretary is satisfied that

the basis for such determination has been corrected and

is not likely to recur.

‘‘(3) OTHER INTERMEDIATE SANCTIONS.—In the case of a

Medicare+Choice organization for which the Secretary makes

a determination under subsection (c)(2) the basis of which is

not described in paragraph (1), the Secretary may apply the

following intermediate sanctions:

‘‘(A) Civil money penalties of not more than $25,000

for each determination under subsection (c)(2) if the deficiency that is the basis of the determination has directly

adversely affected (or has the substantial likelihood of

adversely affecting) an individual covered under the

organization’s contract.

‘‘(B) Civil money penalties of not more than $10,000

for each week beginning after the initiation of civil money
H. R. 2015—75

penalty procedures by the Secretary during which the deficiency that is the basis of a determination under subsection

(c)(2) exists.

‘‘(C) Suspension of enrollment of individuals under this

part after the date the Secretary notifies the organization

of a determination under subsection (c)(2) and until the

Secretary is satisfied that the deficiency that is the basis

for the determination has been corrected and is not likely

to recur.

‘‘(4) CIVIL MONEY PENALTIES.—The provisions of section

1128A (other than subsections (a) and (b)) shall apply to a

civil money penalty under paragraph (2) or (3) in the same

manner as they apply to a civil money penalty or proceeding

under section 1128A(a).

‘‘(h) PROCEDURES FOR TERMINATION.— ‘‘(1) IN GENERAL.—The Secretary may terminate a contract

with a Medicare+Choice organization under this section in

accordance with formal investigation and compliance procedures established by the Secretary under which—

‘‘(A) the Secretary provides the organization with the

reasonable opportunity to develop and implement a corrective action plan to correct the deficiencies that were the

basis of the Secretary’s determination under subsection

(c)(2); and

‘‘(B) the Secretary provides the organization with

reasonable notice and opportunity for hearing (including

the right to appeal an initial decision) before terminating

the contract.

‘‘(2) EXCEPTION FOR IMMINENT AND SERIOUS RISK TO

HEALTH.—Paragraph (1) shall not apply if the Secretary determines that a delay in termination, resulting from compliance

with the procedures specified in such paragraph prior to termination, would pose an imminent and serious risk to the health

of individuals enrolled under this part with the organization.

‘‘DEFINITIONS; MISCELLANEOUS PROVISIONS

‘‘SEC. 1859. (a) DEFINITIONS RELATING TO MEDICARE+CHOICE

ORGANIZATIONS.—In this part—

‘‘(1) MEDICARE+CHOICE ORGANIZATION.—The term

‘Medicare+Choice organization’ means a public or private entity

that is certified under section 1856 as meeting the requirements

and standards of this part for such an organization.

‘‘(2) PROVIDER-SPONSORED ORGANIZATION.—The term ‘provider-sponsored organization’ is defined in section 1855(d)(1).

‘‘(b) DEFINITIONS RELATING TO MEDICARE+CHOICE PLANS.— ‘‘(1) MEDICARE+CHOICE PLAN.—The term ‘Medicare+Choice

plan’ means health benefits coverage offered under a policy,

contract, or plan by a Medicare+Choice organization pursuant

to and in accordance with a contract under section 1857.

‘‘(2) MEDICARE+CHOICE PRIVATE FEE-FOR-SERVICE PLAN.— The term ‘Medicare+Choice private fee-for-service plan’ means

a Medicare+Choice plan that—

‘‘(A) reimburses hospitals, physicians, and other providers at a rate determined by the plan on a fee-for-service

basis without placing the provider at financial risk;

‘‘(B) does not vary such rates for such a provider based

on utilization relating to such provider; and
H. R. 2015—76

‘‘(C) does not restrict the selection of providers among

those who are lawfully authorized to provide the covered

services and agree to accept the terms and conditions of

payment established by the plan.

‘‘(3) MSA PLAN.—

‘‘(A) IN GENERAL.—The term ‘MSA plan’ means a

Medicare+Choice plan that—

‘‘(i) provides reimbursement for at least the items

and services described in section 1852(a)(1) in a year

but only after the enrollee incurs countable expenses

(as specified under the plan) equal to the amount of

an annual deductible (described in subparagraph (B));

‘‘(ii) counts as such expenses (for purposes of such

deductible) at least all amounts that would have been

payable under parts A and B, and that would have

been payable by the enrollee as deductibles, coinsurance, or copayments, if the enrollee had elected to

receive benefits through the provisions of such parts;

and

‘‘(iii) provides, after such deductible is met for a

year and for all subsequent expenses for items and

services referred to in clause (i) in the year, for a

level of reimbursement that is not less than—

‘‘(I) 100 percent of such expenses, or

‘‘(II) 100 percent of the amounts that would

have been paid (without regard to any deductibles

or coinsurance) under parts A and B with respect

to such expenses,

whichever is less.

‘‘(B) DEDUCTIBLE.—The amount of annual deductible

under an MSA plan—

‘‘(i) for contract year 1999 shall be not more than

$6,000; and

‘‘(ii) for a subsequent contract year shall be not

more than the maximum amount of such deductible

for the previous contract year under this subparagraph

increased by the national per capita Medicare+Choice

growth percentage under section 1853(c)(6) for the

year.

If the amount of the deductible under clause (ii) is not

a multiple of $50, the amount shall be rounded to the

nearest multiple of $50.

‘‘(c) OTHER REFERENCES TO OTHER TERMS.—

‘‘(1) MEDICARE+CHOICE ELIGIBLE INDIVIDUAL.—The term

‘Medicare+Choice eligible individual’ is defined in section

1851(a)(3).

‘‘(2) MEDICARE+CHOICE PAYMENT AREA.—The term

‘Medicare+Choice payment area’ is defined in section 1853(d).

‘‘(3) NATIONAL PER CAPITA MEDICARE+CHOICE GROWTH

PERCENTAGE.—The ‘national per capita Medicare+Choice

growth percentage’ is defined in section 1853(c)(6).

‘‘(4) MEDICARE+CHOICE MONTHLY BASIC BENEFICIARY PREMIUM; MEDICARE+CHOICE MONTHLY SUPPLEMENTAL BENEFICIARY

PREMIUM.—The terms ‘Medicare+Choice monthly basic beneficiary premium’ and ‘Medicare+Choice monthly supplemental

beneficiary premium’ are defined in section 1854(a)(2).
H. R. 2015—77

‘‘(d) COORDINATED ACUTE AND LONG-TERM CARE BENEFITS

UNDER A MEDICARE+CHOICE PLAN.—Nothing in this part shall be

construed as preventing a State from coordinating benefits under

a medicaid plan under title XIX with those provided under a

Medicare+Choice plan in a manner that assures continuity of a

full-range of acute care and long-term care services to poor elderly

or disabled individuals eligible for benefits under this title and

under such plan.

‘‘(e) RESTRICTION ON ENROLLMENT FOR CERTAIN

MEDICARE+CHOICE PLANS.—

‘‘(1) IN GENERAL.—In the case of a Medicare+Choice religious fraternal benefit society plan described in paragraph (2),

notwithstanding any other provision of this part to the contrary

and in accordance with regulations of the Secretary, the society

offering the plan may restrict the enrollment of individuals

under this part to individuals who are members of the church,

convention, or group described in paragraph (3)(B) with which

the society is affiliated.

‘‘(2) MEDICARE+CHOICE RELIGIOUS FRATERNAL BENEFIT SOCIETY PLAN DESCRIBED.—For purposes of this subsection, a

Medicare+Choice religious fraternal benefit society plan

described in this paragraph is a Medicare+Choice plan

described in section 1851(a)(2)(A) that—

‘‘(A) is offered by a religious fraternal benefit society

described in paragraph (3) only to members of the church,

convention, or group described in paragraph (3)(B); and

‘‘(B) permits all such members to enroll under the

plan without regard to health status-related factors.

Nothing in this subsection shall be construed as waiving any

plan requirements relating to financial solvency.

‘‘(3) RELIGIOUS FRATERNAL BENEFIT SOCIETY DEFINED.—For

purposes of paragraph (2)(A), a ‘religious fraternal benefit society’ described in this section is an organization that—

‘‘(A) is described in section 501(c)(8) of the Internal

Revenue Code of 1986 and is exempt from taxation under

section 501(a) of such Act;

‘‘(B) is affiliated with, carries out the tenets of, and

shares a religious bond with, a church or convention or

association of churches or an affiliated group of churches;

‘‘(C) offers, in addition to a Medicare+Choice religious

fraternal benefit society plan, health coverage to individuals not entitled to benefits under this title who are members of such church, convention, or group; and

‘‘(D) does not impose any limitation on membership

in the society based on any health status-related factor.

‘‘(4) PAYMENT ADJUSTMENT.—Under regulations of the Secretary, in the case of individuals enrolled under this part under

a Medicare+Choice religious fraternal benefit society plan

described in paragraph (2), the Secretary shall provide for

such adjustment to the payment amounts otherwise established

under section 1854 as may be appropriate to assure an appropriate payment level, taking into account the actuarial

characteristics and experience of such individuals.’’.
H. R. 2015—78

SEC. 4002. TRANSITIONAL RULES FOR CURRENT MEDICARE HMO PROGRAM.

(a) AUTHORIZING TRANSITIONAL WAIVER OF 50:50 RULE.—Section 1876(f) (42 U.S.C. 1395mm(f)) is amended—

(1) in paragraph (1)—

(A) by striking ‘‘Each’’ and inserting ‘‘For contract periods beginning before January 1, 1999, each’’; and

(B) by striking ‘‘or under a State plan approved under

title XIX’’;

(2) in paragraph (2), by striking ‘‘The Secretary’’ and inserting ‘‘Subject to paragraph (4), the Secretary’’, and

(3) by adding at the end the following:

‘‘(4) Effective for contract periods beginning after December

31, 1996, the Secretary may waive or modify the requirement

imposed by paragraph (1) to the extent the Secretary finds that

it is in the public interest.’’.

(b) TRANSITION.— (1) RISK-SHARING CONTRACTS.—Section 1876 (42 U.S.C.

1395mm) is amended by adding at the end the following new

subsections:

‘‘(k)(1) Except as provided in paragraph (2)—

‘‘(A) on or after the date standards for Medicare+Choice

organizations and plans are first established under section

1856(b)(1), the Secretary shall not enter into any risk-sharing

contract under this section with an eligible organization; and

‘‘(B) for any contract year beginning on or after January

1, 1999, the Secretary shall not renew any such contract.

‘‘(2) An individual who is enrolled in part B only and is enrolled

in an eligible organization with a risk-sharing contract under this

section on December 31, 1998, may continue enrollment in such

organization in accordance with regulations described in section

1856(b)(1).

‘‘(3) Notwithstanding subsection (a), the Secretary shall provide

that payment amounts under risk-sharing contracts under this

section for months in a year (beginning with January 1998) shall

be computed—

‘‘(A) with respect to individuals entitled to benefits under

both parts A and B, by substituting payment rates under section

1853(a) for the payment rates otherwise established under section 1876(a), and

‘‘(B) with respect to individuals only entitled to benefits

under part B, by substituting an appropriate proportion of

such rates (reflecting the relative proportion of payments under

this title attributable to such part) for the payment rates otherwise established under subsection (a).

‘‘(4) The following requirements shall apply to eligible organizations with risk-sharing contracts under this section in the same

manner as they apply to Medicare+Choice organizations under part

C:

‘‘(A) Data collection requirements under section

1853(a)(3)(B).

‘‘(B) Restrictions on imposition of premium taxes under

section 1854(g) in relating to payments to such organizations

under this section.

‘‘(C) The requirement to accept enrollment of new enrollees

during November 1998 under section 1851(e)(6).

‘‘(D) Payments under section 1857(e)(2).’’.
H. R. 2015—79

(2) REASONABLE COST CONTRACTS.—

(A) PHASE OUT OF CONTRACTS.—Section 1876(h) (42

U.S.C. 1395mm(h)) is amended by adding at the end the

following:

‘‘(5)(A) After the date of the enactment of this paragraph,

the Secretary may not enter into a reasonable cost reimbursement

contract under this subsection (if the contract is not in effect as

of such date), except for a contract with an eligible organization

which, immediately previous to entering into such contract, had

an agreement in effect under section 1833(a)(1)(A).

‘‘(B) The Secretary may not extend or renew a reasonable

cost reimbursement contract under this subsection for any period

beyond December 31, 2002.’’.

(B) REPORT ON IMPACT.—By not later than January

1, 2001, the Secretary of Health and Human Services shall

submit to Congress a report that analyzes the potential

impact of termination of reasonable cost reimbursement

contracts, pursuant to the amendment made by subparagraph (A), on medicare beneficiaries enrolled under such

contracts and on the medicare program. The report shall

include such recommendations regarding any extension or

transition with respect to such contracts as the Secretary

deems appropriate.

(c) ENROLLMENT TRANSITION RULE.—An individual who is

enrolled on December 31, 1998, with an eligible organization under

section 1876 of the Social Security Act (42 U.S.C. 1395mm) shall

be considered to be enrolled with that organization on January

1, 1999, under part C of title XVIII of such Act if that organization

has a contract under that part for providing services on January

1, 1999 (unless the individual has disenrolled effective on that

date).

(d) ADVANCE DIRECTIVES.—Section 1866(f) (42 U.S.C. 1395cc(f))

is amended—

(1) in paragraph (1)—

(A) by inserting ‘‘1855(i),’’ after ‘‘1833(s),’’, and

(B) by inserting ‘‘, Medicare+Choice organization,’’ after

‘‘provider of services’’; and

(2) in paragraph (2)(E), by inserting ‘‘or a Medicare+Choice

organization’’ after ‘‘section 1833(a)(1)(A)’’.

(e) EXTENSION OF PROVIDER REQUIREMENT.—Section

1866(a)(1)(O) (42 U.S.C. 1395cc(a)(1)(O)) is amended—

(1) by striking ‘‘in the case of hospitals and skilled nursing

facilities,’’;

(2) by striking ‘‘inpatient hospital and extended care’’;

(3) by inserting ‘‘with a Medicare+Choice organization

under part C or’’ after ‘‘any individual enrolled’’;

(4) by striking ‘‘(in the case of hospitals) or limits (in

the case of skilled nursing facilities)’’; and

(5) by inserting ‘‘(less any payments under sections

1886(d)(11) and 1886(h)(3)(D))’’ after ‘‘under this title’’.

(f) ADDITIONAL CONFORMING CHANGES.—

(1) CONFORMING REFERENCES TO PREVIOUS PART C.—Any

reference in law (in effect before the date of the enactment

of this Act) to part C of title XVIII of the Social Security

Act is deemed a reference to part D of such title (as in effect

after such date).
H. R. 2015—80

(2) SECRETARIAL SUBMISSION OF LEGISLATIVE PROPOSAL.—

Not later than 6 months after the date of the enactment of

this Act, the Secretary of Health and Human Services shall

submit to the appropriate committees of Congress a legislative

proposal providing for such technical and conforming amendments in the law as are required by the provisions of this

chapter.

(g) IMMEDIATE EFFECTIVE DATE FOR CERTAIN REQUIREMENTS

FOR DEMONSTRATIONS.—Section 1857(e)(2) of the Social Security

Act (requiring contribution to certain costs related to the enrollment

process comparative materials) applies to demonstrations with

respect to which enrollment is effected or coordinated under section

1851 of such Act.

(h) TRANSITION RULE FOR PSO ENROLLMENT.—In applying subsection (g)(1) of section 1876 of the Social Security Act (42 U.S.C.

1395mm) to a risk-sharing contract entered into with an eligible

organization that is a provider-sponsored organization (as defined

in section 1855(d)(1) of such Act, as inserted by section 5001)

for a contract year beginning on or after January 1, 1998, there

shall be substituted for the minimum number of enrollees provided

under such section the minimum number of enrollees permitted

under section 1857(b)(1) of such Act (as so inserted).

(i) PUBLICATION OF NEW CAPITATION RATES.—Not later than

4 weeks after the date of the enactment of this Act, the Secretary

of Health and Human Services shall announce the annual

Medicare+Choice capitation rates for 1998 under section 1853(b)

of the Social Security Act.

(j) ELIMINATION OF HEALTH CARE PREPAYMENT PLAN OPTION

FOR ENTITIES ELIGIBLE TO PARTICIPATE AS MANAGED CARE

ORGANIZATION.— (1) ELIMINATION OF OPTION.— (A) IN GENERAL.—Section 1833(a)(1)(A) (42 U.S.C.

1395l(a)(1)(A)) is amended by inserting ‘‘(and either is sponsored by a union or employer, or does not provide, or

arrange for the provision of, any inpatient hospital services)’’ after ‘‘prepayment basis’’.

(B) EFFECTIVE DATE.—The amendment made by

subparagraph (A) applies to new contracts entered into

after the date of enactment of this Act and, with respect

to contracts in effect as of such date, shall apply to payment

for services furnished after December 31, 1998.

(2) MEDIGAP CONFORMING AMENDMENT.—Effective January

1, 1999, section 1882(g)(1) (42 U.S.C. 1395ss(g)(1)) is amended

by striking ‘‘, during the period beginning on the date specified

in subsection (p)(1)(C) and ending on December 31, 1995,’’.

SEC. 4003. CONFORMING CHANGES IN MEDIGAP PROGRAM.

(a) CONFORMING AMENDMENTS TO MEDICARE+CHOICE

CHANGES.—

(1) IN GENERAL.—Section 1882(d)(3)(A)(i) (42 U.S.C.

1395ss(d)(3)(A)(i)) is amended—

(A) in the matter before subclause (I), by inserting

‘‘(including an individual electing a Medicare+Choice plan

under section 1851)’’ after ‘‘of this title’’; and

(B) in subclause (II)—

(i) by inserting ‘‘in the case of an individual not

electing a Medicare+Choice plan’’ after ‘‘(II)’’, and
H. R. 2015—81

(ii) by inserting before the comma at the end the

following: ‘‘or in the case of an individual electing

a Medicare+Choice plan, a medicare supplemental policy with knowledge that the policy duplicates health

benefits to which the individual is otherwise entitled

under the Medicare+Choice plan or under another

medicare supplemental policy’’.

(2) CONFORMING AMENDMENTS.—Section 1882(d)(3)(B)(i)(I)

(42 U.S.C. 1395ss(d)(3)(B)(i)(I)) is amended by inserting

‘‘(including any Medicare+Choice plan)’’ after ‘‘health insurance

policies’’.

(3) MEDICARE+CHOICE PLANS NOT TREATED AS MEDICARE

SUPPLEMENTARY POLICIES.—Section 1882(g)(1) (42 U.S.C.

1395ss(g)(1)) is amended by inserting ‘‘or a Medicare+Choice

plan or’’ after ‘‘does not include’’.

(b) ADDITIONAL RULES RELATING TO INDIVIDUALS ENROLLED

IN MSA PLANS AND PRIVATE FEE-FOR-SERVICE PLANS.—Section 1882

(42 U.S.C. 1395ss) is further amended by adding at the end the

following new subsection:

‘‘(u)(1) It is unlawful for a person to sell or issue a policy

described in paragraph (2) to an individual with knowledge that

the individual has in effect under section 1851 an election of an

MSA plan or a Medicare+Choice private fee-for-service plan.

‘‘(2)(A) A policy described in this subparagraph is a health

insurance policy (other than a policy described in subparagraph

(B)) that provides for coverage of expenses that are otherwise

required to be counted toward meeting the annual deductible

amount provided under the MSA plan.

‘‘(B) A policy described in this subparagraph is any of the

following:

‘‘(i) A policy that provides coverage (whether through insurance or otherwise) for accidents, disability, dental care, vision

care, or long-term care.

‘‘(ii) A policy of insurance to which substantially all of

the coverage relates to—

‘‘(I) liabilities incurred under workers’ compensation

laws,

‘‘(II) tort liabilities,

‘‘(III) liabilities relating to ownership or use of property,

or

‘‘(IV) such other similar liabilities as the Secretary

may specify by regulations.

‘‘(iii) A policy of insurance that provides coverage for a

specified disease or illness.

‘‘(iv) A policy of insurance that pays a fixed amount per

day (or other period) of hospitalization.’’.

Subchapter B—Special Rules for Medicare+Choice Medical

Savings Accounts

SEC. 4006. MEDICARE+CHOICE MSA.

(a) IN GENERAL.—Part III of subchapter B of chapter 1 of

the Internal Revenue Code of 1986 (relating to amounts specifically

excluded from gross income) is amended by redesignating section

138 as section 139 and by inserting after section 137 the following

new section:
H. R. 2015—82

‘‘SEC. 138. MEDICARE+CHOICE MSA.

‘‘(a) EXCLUSION.—Gross income shall not include any payment

to the Medicare+Choice MSA of an individual by the Secretary

of Health and Human Services under part C of title XVIII of

the Social Security Act.

‘‘(b) MEDICARE+CHOICE MSA.—For purposes of this section,

the term ‘Medicare+Choice MSA’ means a medical savings account

(as defined in section 220(d))—

‘‘(1) which is designated as a Medicare+Choice MSA,

‘‘(2) with respect to which no contribution may be made

other than—

‘‘(A) a contribution made by the Secretary of Health

and Human Services pursuant to part C of title XVIII

of the Social Security Act, or

‘‘(B) a trustee-to-trustee transfer described in subsection (c)(4),

‘‘(3) the governing instrument of which provides that

trustee-to-trustee transfers described in subsection (c)(4) may

be made to and from such account, and

‘‘(4) which is established in connection with an MSA plan

described in section 1859(b)(3) of the Social Security Act.

‘‘(c) SPECIAL RULES FOR DISTRIBUTIONS.—

‘‘(1) DISTRIBUTIONS FOR QUALIFIED MEDICAL EXPENSES.—

In applying section 220 to a Medicare+Choice MSA—

‘‘(A) qualified medical expenses shall not include

amounts paid for medical care for any individual other

than the account holder, and

‘‘(B) section 220(d)(2)(C) shall not apply.

‘‘(2) PENALTY FOR DISTRIBUTIONS FROM MEDICARE+CHOICE

MSA NOT USED FOR QUALIFIED MEDICAL EXPENSES IF MINIMUM

BALANCE NOT MAINTAINED.—

‘‘(A) IN GENERAL.—The tax imposed by this chapter

for any taxable year in which there is a payment or distribution from a Medicare+Choice MSA which is not used

exclusively to pay the qualified medical expenses of the

account holder shall be increased by 50 percent of the

excess (if any) of—

‘‘(i) the amount of such payment or distribution,

over

‘‘(ii) the excess (if any) of—

‘‘(I) the fair market value of the assets in

such MSA as of the close of the calendar year

preceding the calendar year in which the taxable

year begins, over

‘‘(II) an amount equal to 60 percent of the

deductible under the Medicare+Choice MSA plan

covering the account holder as of January 1 of

the calendar year in which the taxable year begins.

Section 220(f)(4) shall not apply to any payment or distribution from a Medicare+Choice MSA.

‘‘(B) EXCEPTIONS.—Subparagraph (A) shall not apply

if the payment or distribution is made on or after the

date the account holder—

‘‘(i) becomes disabled within the meaning of section

72(m)(7), or

‘‘(ii) dies.
H. R. 2015—83

‘‘(C) SPECIAL RULES.—For purposes of subparagraph

(A)—

‘‘(i) all Medicare+Choice MSAs of the account

holder shall be treated as 1 account,

‘‘(ii) all payments and distributions not used exclusively to pay the qualified medical expenses of the

account holder during any taxable year shall be treated

as 1 distribution, and

‘‘(iii) any distribution of property shall be taken

into account at its fair market value on the date of

the distribution.

‘‘(3) WITHDRAWAL OF ERRONEOUS CONTRIBUTIONS.—Section

220(f)(2) and paragraph (2) of this subsection shall not apply

to any payment or distribution from a Medicare+Choice MSA

to the Secretary of Health and Human Services of an erroneous

contribution to such MSA and of the net income attributable

to such contribution.

‘‘(4) TRUSTEE-TO-TRUSTEE TRANSFERS.—Section 220(f)(2)

and paragraph (2) of this subsection shall not apply to any

trustee-to-trustee transfer from a Medicare+Choice MSA of an

account holder to another Medicare+Choice MSA of such

account holder.

‘‘(d) SPECIAL RULES FOR TREATMENT OF ACCOUNT AFTER DEATH

OF ACCOUNT HOLDER.—In applying section 220(f)(8)(A) to an

account which was a Medicare+Choice MSA of a decedent, the

rules of section 220(f) shall apply in lieu of the rules of subsection

(c) of this section with respect to the spouse as the account holder

of such Medicare+Choice MSA.

‘‘(e) REPORTS.—In the case of a Medicare+Choice MSA, the

report under section 220(h)—

‘‘(1) shall include the fair market value of the assets in

such Medicare+Choice MSA as of the close of each calendar

year, and

‘‘(2) shall be furnished to the account holder—

‘‘(A) not later than January 31 of the calendar year

following the calendar year to which such reports relate,

and

‘‘(B) in such manner as the Secretary prescribes in

such regulations.

‘‘(f) COORDINATION WITH LIMITATION ON NUMBER OF TAXPAYERS

HAVING MEDICAL SAVINGS ACCOUNTS.—Subsection (i) of section 220

shall not apply to an individual with respect to a Medicare+Choice

MSA, and Medicare+Choice MSA’s shall not be taken into account

in determining whether the numerical limitations under section

220(j) are exceeded.’’.

(b) TECHNICAL AMENDMENTS.—

(1) The last sentence of section 4973(d) of such Code is

amended by inserting ‘‘or section 138(c)(3)’’ after ‘‘section

220(f)(3)’’.

(2) Subsection (b) of section 220 of such Code is amended

by adding at the end the following new paragraph:

‘‘(7) MEDICARE ELIGIBLE INDIVIDUALS.—The limitation

under this subsection for any month with respect to an individual shall be zero for the first month such individual is entitled

to benefits under title XVIII of the Social Security Act and

for each month thereafter.’’.
H. R. 2015—84

(3) The table of sections for part III of subchapter B of

chapter 1 of such Code is amended by striking the last item

and inserting the following:

‘‘Sec. 138. Medicare+Choice MSA.

‘‘Sec. 139. Cross references to other Acts.’’.

(c) EFFECTIVE DATE.—The amendments made by this section

shall apply to taxable years beginning after December 31, 1998.

CHAPTER 2—DEMONSTRATIONS

Subchapter A—Medicare+Choice Competitive Pricing

Demonstration Project

SEC. 4011. MEDICARE PREPAID COMPETITIVE PRICING DEMONSTRATION PROJECT.

(a) ESTABLISHMENT OF PROJECT.—The Secretary of Health and

Human Services (in this subchapter referred to as the ‘‘Secretary’’)

shall establish a demonstration project (in this subchapter referred

to as the ‘‘project’’) under which payments to Medicare+Choice

organizations in medicare payment areas in which the project is

being conducted are determined in accordance with a competitive

pricing methodology established under this subchapter.

(b) DESIGNATION OF 7 MEDICARE PAYMENT AREAS COVERED

BY PROJECT.—

(1) IN GENERAL.—The Secretary shall designate, in accordance with the recommendations of the Competitive Pricing

Advisory Committee under paragraphs (2) and (3), medicare

payment areas as areas in which the project under this subchapter will be conducted. In this section, the term ‘‘Competitive

Pricing Advisory Committee’’ means the Competitive Pricing

Advisory Committee established under section 4012(a).

(2) INITIAL DESIGNATION OF 4 AREAS.— (A) IN GENERAL.—The Competitive Pricing Advisory

Committee shall recommend to the Secretary, consistent

with subparagraph (B), the designation of 4 specific areas

as medicare payment areas to be included in the project.

Such recommendations shall be made in a manner so as

to ensure that payments under the project in 2 such areas

will begin on January 1, 1999, and in 2 such areas will

begin on January 1, 2000.

(B) LOCATION OF DESIGNATION.—Of the 4 areas recommended under subparagraph (A), 3 shall be in urban

areas and 1 shall be in a rural area.

(3) DESIGNATION OF ADDITIONAL 3 AREAS.—Not later than

December 31, 2001, the Competitive Pricing Advisory Committee may recommend to the Secretary the designation of up

to 3 additional, specific medicare payment areas to be included

in the project.

(c) PROJECT IMPLEMENTATION.—

(1) IN GENERAL.—Subject to paragraph (2), the Secretary

shall for each medicare payment area designated under subsection (b)—

(A) in accordance with the recommendations of the

Competitive Pricing Advisory Committee—

(i) establish the benefit design among plans offered

in such area, and
H. R. 2015—85

(ii) structure the method for selecting plans offered

in such area; and

(B) in consultation with such Committee—

(i) establish methods for setting the price to be

paid to plans, including, if the Secretaries determines

appropriate, the rewarding and penalizing of

Medicare+Choice plans in the area on the basis of

the attainment of, or failure to attain, applicable quality standards, and

(ii) provide for the collection of plan information

(including information concerning quality and access

to care), the dissemination of information, and the

methods of evaluating the results of the project.

(2) CONSULTATION.—The Secretary shall take into account

the recommendations of the area advisory committee established in section 4012(b), in implementing a project design

for any area, except that no modifications may be made in

the project design without consultation with the Competitive

Pricing Advisory Committee. In no case may the Secretary

change the designation of an area based on recommendations

of any area advisory committee.

(d) MONITORING AND REPORT.—

(1) MONITORING IMPACT.—Taking into consideration the

recommendations of the Competitive Pricing Advisory Committee and the area advisory committees, the Secretary shall

closely monitor and measure the impact of the project in the

different areas on the price and quality of, and access to,

medicare covered services, choice of health plans, changes in

enrollment, and other relevant factors.

(2) REPORT.—Not later than December 31, 2002, the Secretary shall submit to Congress a report on the progress under

the project under this subchapter, including a comparison of

the matters monitored under paragraph (1) among the different

designated areas. The report may include any legislative recommendations for extending the project to the entire medicare

population.

(e) WAIVER AUTHORITY.—The Secretary of Health and Human

Services may waive such requirements of title XVIII of the Social

Security Act (as amended by this Act) as may be necessary for

the purposes of carrying out the project.

(f) RELATIONSHIP TO OTHER AUTHORITY.—Except pursuant to

this subchapter, the Secretary of Health and Human Services may

not conduct or continue any medicare demonstration project relating

to payment of health maintenance organizations, Medicare+Choice

organizations, or similar prepaid managed care entities on the

basis of a competitive bidding process or pricing system described

in subsection (a).

(g) NO ADDITIONAL COSTS TO MEDICARE PROGRAM.—The aggregate payments to Medicare+Choice organizations under the project

for any designated area for a fiscal year may not exceed the aggregate payments to such organizations that would have been made

under title XVIII of the Social Security Act (42 U.S.C. 1395 et

seq.), as amended by section 4001, if the project had not been

conducted.

(h) DEFINITIONS.—Any term used in this subchapter which

is also used in part C of title XVIII of the Social Security Act,
H. R. 2015—86

as amended by section 4001, shall have the same meaning as

when used in such part.

SEC. 4012. ADVISORY COMMITTEES.

(a) COMPETITIVE PRICING ADVISORY COMMITTEE.—

(1) IN GENERAL.—Before implementing the project under

this subchapter, the Secretary shall appoint the Competitive

Pricing Advisory Committee, including independent actuaries,

individuals with expertise in competitive health plan pricing,

and an employee of the Office of Personnel Management with

expertise in the administration of the Federal Employees

Health Benefit Program, to make recommendations to the Secretary concerning the designation of areas for inclusion in the

project and appropriate research design for implementing the

project.

(2) INITIAL RECOMMENDATIONS.—The Competitive Pricing

Advisory Committee initially shall submit recommendations

regarding the area selection, benefit design among plans

offered, structuring choice among health plans offered, methods

for setting the price to be paid to plans, collection of plan

information (including information concerning quality and

access to care), information dissemination, and methods of

evaluating the results of the project.

(3) QUALITY RECOMMENDATION.—The Competitive Pricing

Advisory Committee shall study and make recommendations

regarding the feasibility of providing financial incentives and

penalties to plans operating under the project that meet, or

fail to meet, applicable quality standards.

(4) ADVICE DURING IMPLEMENTATION.—Upon implementation of the project, the Competitive Pricing Advisory Committee

shall continue to advise the Secretary on the application of

the design in different areas and changes in the project based

on experience with its operations.

(5) SUNSET.—The Competitive Pricing Advisory Committee

shall terminate on December 31, 2004.

(b) APPOINTMENT OF AREA ADVISORY COMMITTEE.—Upon the

designation of an area for inclusion in the project, the Secretary

shall appoint an area advisory committee, composed of representatives of health plans, providers, and medicare beneficiaries in the

area, to advise the Secretary concerning how the project will be

implemented in the area. Such advice may include advice concerning

the marketing and pricing of plans in the area and other salient

factors. The duration of such a committee for an area shall be

for the duration of the operation of the project in the area.

(c) SPECIAL APPLICATION.—Notwithstanding section 9(c) of the

Federal Advisory Committee Act (5 U.S.C. App.), the Competitive

Pricing Advisory Commission and any area advisory committee

(described in subsection (b)) may meet as soon as the members

of the commission or committee, respectively, are appointed.

Subchapter B—Social Health Maintenance Organizations

SEC. 4014. SOCIAL HEALTH MAINTENANCE ORGANIZATIONS (SHMOS).

(a) EXTENSION OF DEMONSTRATION PROJECT AUTHORITIES.—

Section 4018(b) of the Omnibus Budget Reconciliation Act of 1987

is amended—
H. R. 2015—87

(1) in paragraph (1), by striking ‘‘1997’’ and inserting

‘‘2000’’, and

(2) in paragraph (4), by striking ‘‘1998’’ and inserting

‘‘2001’’.

(b) EXPANSION OF CAP.—Section 13567(c) of the Omnibus

Budget Reconciliation Act of 1993 is amended by striking ‘‘12,000’’

and inserting ‘‘36,000’’.

(c) REPORT ON INTEGRATION AND TRANSITION.—

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

Services shall submit to Congress, by not later than January

1, 1999, a plan for the integration of health plans offered

by social health maintenance organizations (including SHMO

I and SHMO II sites developed under section 2355 of the

Deficit Reduction Act of 1984 and under the amendment made

by section 4207(b)(3)(B)(i) of OBRA–1990, respectively) and

similar plans as an option under the Medicare+Choice program

under part C of title XVIII of the Social Security Act.

(2) PROVISION FOR TRANSITION.—Such plan shall include

a transition for social health maintenance organizations operating under demonstration project authority under such section.

(3) PAYMENT POLICY.—The report shall also include recommendations on appropriate payment levels for plans offered

by such organizations, including an analysis of the application

of risk adjustment factors appropriate to the population served

by such organizations.

Subchapter C—Medicare Subvention Demonstration Project

for Military Retirees

SEC. 4015. MEDICARE SUBVENTION DEMONSTRATION PROJECT FOR

MILITARY RETIREES.

(a) IN GENERAL.—Title XVIII (42 U.S.C. 1395 et seq.) (as

amended by sections 4603 and 4801) is amended by adding at

the end the following:

‘‘MEDICARE SUBVENTION DEMONSTRATION PROJECT FOR MILITARY

RETIREES

‘‘SEC. 1896. (a) DEFINITIONS.—In this section:

‘‘(1) ADMINISTERING SECRETARIES.—The term ‘administering Secretaries’ means the Secretary and the Secretary of

Defense acting jointly.

‘‘(2) DEMONSTRATION PROJECT; PROJECT.—The terms ‘demonstration project’ and ‘project’ mean the demonstration project

carried out under this section.

‘‘(3) DESIGNATED PROVIDER.—The term ‘designated provider’

has the meaning given that term in section 721(5) of the

National Defense Authorization Act For Fiscal Year 1997 (Public Law 104–201; 110 Stat. 2593; 10 U.S.C. 1073 note).

‘‘(4) MEDICARE-ELIGIBLE MILITARY RETIREE OR DEPENDENT.—The term ‘medicare-eligible military retiree or dependent’

means an individual described in section 1074(b) or 1076(b)

of title 10, United States Code, who—

‘‘(A) would be eligible for health benefits under section

1086 of such title by reason of subsection (c)(1) of such

section 1086 but for the operation of subsection (d) of

such section 1086;
H. R. 2015—88

‘‘(B)(i) is entitled to benefits under part A of this title;

and

‘‘(ii) if the individual was entitled to such benefits

before July 1, 1997, received health care items or services

from a health care facility of the uniformed services before

that date, but after becoming entitled to benefits under

part A of this title;

‘‘(C) is enrolled for benefits under part B of this title;

and

‘‘(D) has attained age 65.

‘‘(5) MEDICARE HEALTH CARE SERVICES.—The term ‘medicare health care services’ means items or services covered under

part A or B of this title.

‘‘(6) MILITARY TREATMENT FACILITY.—The term ‘military

treatment facility’ means a facility referred to in section 1074(a)

of title 10, United States Code.

‘‘(7) TRICARE.—The term ‘TRICARE’ has the same meaning as the term ‘TRICARE program’ under section 711 of the

National Defense Authorization Act for Fiscal Year 1996 (10

U.S.C. 1073 note).

‘‘(8) TRUST FUNDS.—The term ‘trust funds’ means the Federal Hospital Insurance Trust Fund established in section 1817

and the Federal Supplementary Medical Insurance Trust Fund

established in section 1841.

‘‘(b) DEMONSTRATION PROJECT.—

‘‘(1) IN GENERAL.—

‘‘(A) ESTABLISHMENT.—The administering Secretaries

are authorized to establish a demonstration project (under

an agreement entered into by the administering Secretaries) under which the Secretary shall reimburse the Secretary of Defense, from the trust funds, for medicare health

care services furnished to certain medicare-eligible military

retirees or dependents in a military treatment facility or

by a designated provider.

‘‘(B) AGREEMENT.—The agreement entered into under

subparagraph (A) shall include at a minimum—

‘‘(i) a description of the benefits to be provided

to the participants of the demonstration project established under this section;

‘‘(ii) a description of the eligibility rules for participation in the demonstration project, including any cost

sharing requirements;

‘‘(iii) a description of how the demonstration project

will satisfy the requirements under this title;

‘‘(iv) a description of the sites selected under paragraph (2);

‘‘(v) a description of how reimbursement requirements under subsection (i) and maintenance of effort

requirements under subsection (j) will be implemented

in the demonstration project;

‘‘(vi) a statement that the Secretary shall have

access to all data of the Department of Defense that

the Secretary determines is necessary to conduct

independent estimates and audits of the maintenance

of effort requirement, the annual reconciliation, and

related matters required under the demonstration

project;
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‘‘(vii) a description of any requirement that the

Secretary waives pursuant to subsection (d); and

‘‘(viii) a certification, provided after review by the

administering Secretaries, that any entity that is

receiving payments by reason of the demonstration

project has sufficient—

‘‘(I) resources and expertise to provide, consistent with payments under subsection (i), the full

range of benefits required to be provided to beneficiaries under the project; and

‘‘(II) information and billing systems in place

to ensure the accurate and timely submission of

claims for benefits and to ensure that providers

of services, physicians, and other health care

professionals are reimbursed by the entity in a

timely and accurate manner.

‘‘(2) NUMBER OF SITES.—The project established under this

section shall be conducted in no more than 6 sites, designated

jointly by the administering Secretaries after review of all

TRICARE regions.

‘‘(3) RESTRICTION.—No new military treatment facilities will

be built or expanded with funds from the demonstration project.

‘‘(4) DURATION.—The administering Secretaries shall conduct the demonstration project during the 3-year period beginning on January 1, 1998.

‘‘(5) REPORT.—At least 60 days prior to the commencement

of the demonstration project, the administering Secretaries

shall submit a copy of the agreement entered into under paragraph (1) to the committees of jurisdiction under this title.

‘‘(c) CREDITING OF PAYMENTS.—A payment received by the Secretary of Defense under the demonstration project shall be credited

to the applicable Department of Defense medical appropriation

(and within that appropriation). Any such payment received during

a fiscal year for services provided during a prior fiscal year may

be obligated by the Secretary of Defense during the fiscal year

during which the payment is received.

‘‘(d) WAIVER OF CERTAIN MEDICARE REQUIREMENTS.—

‘‘(1) AUTHORITY.—

‘‘(A) IN GENERAL.—Except as provided under subparagraph (B), the demonstration project shall meet all requirements of Medicare+Choice plans under part C of this title

and regulations pertaining thereto, and other requirements

for receiving medicare payments, except that the prohibition of payments to Federal providers of services under

sections 1814(c) and 1835(d), and paragraphs (2) and (3)

of section 1862(a) shall not apply.

‘‘(B) WAIVER.—Except as provided in paragraph (2),

the Secretary is authorized to waive any requirement

described under subparagraph (A), or approve equivalent

or alternative ways of meeting such a requirement, but

only if such waiver or approval—

‘‘(i) reflects the unique status of the Department

of Defense as an agency of the Federal Government;

and

‘‘(ii) is necessary to carry out the demonstration

project.
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‘‘(2) BENEFICIARY PROTECTIONS AND OTHER MATTERS.—The

demonstration project shall comply with the requirements of

part C of this title that relate to beneficiary protections and

other matters, including such requirements relating to the following areas:

‘‘(A) Enrollment and disenrollment.

‘‘(B) Nondiscrimination.

‘‘(C) Information provided to beneficiaries.

‘‘(D) Cost-sharing limitations.

‘‘(E) Appeal and grievance procedures.

‘‘(F) Provider participation.

‘‘(G) Access to services.

‘‘(H) Quality assurance and external review.

‘‘(I) Advance directives.

‘‘(J) Other areas of beneficiary protections that the

Secretary determines are applicable to such project.

‘‘(e) INSPECTOR GENERAL.—Nothing in the agreement entered

into under subsection (b) shall limit the Inspector General of the

Department of Health and Human Services from investigating any

matters regarding the expenditure of funds under this title for

the demonstration project, including compliance with the provisions

of this title and all other relevant laws.

‘‘(f) VOLUNTARY PARTICIPATION.—Participation of medicareeligible military retirees or dependents in the demonstration project

shall be voluntary.

‘‘(g) TRICARE HEALTH CARE PLANS.—

‘‘(1) MODIFICATION OF TRICARE CONTRACTS.—In carrying

out the demonstration project, the Secretary of Defense is

authorized to amend existing TRICARE contracts (including

contracts with designated providers) in order to provide the

medicare health care services to the medicare-eligible military

retirees and dependents enrolled in the demonstration project

consistent with part C of this title.

‘‘(2) HEALTH CARE BENEFITS.—The administering Secretaries shall prescribe the minimum health care benefits to be

provided under such a plan to medicare-eligible military retirees

or dependents enrolled in the plan. Those benefits shall include

at least all medicare health care services covered under this

title.

‘‘(h) ADDITIONAL PLANS.—Notwithstanding any provisions of

title 10, United States Code, the administering Secretaries may

agree to include in the demonstration project any of the

Medicare+Choice plans described in section 1851(a)(2)(A), and such

agreement may include an agreement between the Secretary of

Defense and the Medicare+Choice organization offering such plan

to provide medicare health care services to medicare-eligible military retirees or dependents and for such Secretary to receive payments from such organization for the provision of such services.

‘‘(i) PAYMENTS BASED ON REGULAR MEDICARE PAYMENT

RATES.—

‘‘(1) IN GENERAL.—Subject to the succeeding provisions of

this subsection, the Secretary shall reimburse the Secretary

of Defense for services provided under the demonstration project

at a rate equal to 95 percent of the amount paid to a

Medicare+Choice organization under part C of this title with

respect to such an enrollee. In cases in which a payment amount

may not otherwise be readily computed, the Secretary shall
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establish rules for computing equivalent or comparable payment

amounts.

‘‘(2) EXCLUSION OF CERTAIN AMOUNTS.—In computing the

amount of payment under paragraph (1), the following shall

be excluded:

‘‘(A) SPECIAL PAYMENTS.—Any amount attributable to

an adjustment under subparagraphs (B) and (F) of section

1886(d)(5) and subsection (h) of such section.

‘‘(B) PERCENTAGE OF CAPITAL PAYMENTS.—An amount

determined by the administering Secretaries for amounts

attributable to payments for capital-related costs under

subsection (g) of such section.

‘‘(3) PERIODIC PAYMENTS FROM MEDICARE TRUST FUNDS.—

Payments under this subsection shall be made—

‘‘(A) on a periodic basis consistent with the periodicity

of payments under this title; and

‘‘(B) in appropriate part, as determined by the Secretary, from the trust funds.

‘‘(4) CAP ON AMOUNT.—The aggregate amount to be

reimbursed under this subsection pursuant to the agreement

entered into between the administering Secretaries under subsection (b) shall not exceed a total of—

‘‘(A) $50,000,000 for calendar year 1998;

‘‘(B) $60,000,000 for calendar year 1999; and

‘‘(C) $65,000,000 for calendar year 2000.

‘‘(j) MAINTENANCE OF EFFORT.—

‘‘(1) MONITORING EFFECT OF DEMONSTRATION PROGRAM ON

COSTS TO MEDICARE PROGRAM.— ‘‘(A) IN GENERAL.—The administering Secretaries, in

consultation with the Comptroller General, shall closely

monitor the expenditures made under the medicare program for medicare-eligible military retirees or dependents

during the period of the demonstration project compared

to the expenditures that would have been made for such

medicare-eligible military retirees or dependents during

that period if the demonstration project had not been conducted. The agreement entered into by the administering

Secretaries under subsection (b) shall require any participating military treatment facility to maintain the level

of effort for space available care to medicare-eligible military retirees or dependents.

‘‘(B) ANNUAL REPORT BY THE COMPTROLLER GENERAL.— Not later than December 31 of each year during which

the demonstration project is conducted, the Comptroller

General shall submit to the administering Secretaries and

the appropriate committees of Congress a report on the

extent, if any, to which the costs of the Secretary under

the medicare program under this title increased during

the preceding fiscal year as a result of the demonstration

project.

‘‘(2) REQUIRED RESPONSE IN CASE OF INCREASE IN COSTS.—

‘‘(A) IN GENERAL.—If the administering Secretaries

find, based on paragraph (1), that the expenditures under

the medicare program under this title increased (or are

expected to increase) during a fiscal year because of the

demonstration project, the administering Secretaries shall

take such steps as may be needed—
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‘‘(i) to recoup for the medicare program the amount

of such increase in expenditures; and

‘‘(ii) to prevent any such increase in the future.

‘‘(B) STEPS.—Such steps—

‘‘(i) under subparagraph (A)(i) shall include payment of the amount of such increased expenditures

by the Secretary of Defense from the current medical

care appropriation of the Department of Defense to

the trust funds; and

‘‘(ii) under subparagraph (A)(ii) shall include

suspending or terminating the demonstration project

(in whole or in part) or lowering the amount of payment

under subsection (i)(1).

‘‘(k) EVALUATION AND REPORTS.—

‘‘(1) INDEPENDENT EVALUATION.—The Comptroller General

of the United States shall conduct an evaluation of the demonstration project, and shall submit annual reports on the

demonstration project to the administering Secretaries and to

the committees of jurisdiction in the Congress. The first report

shall be submitted not later than 12 months after the date

on which the demonstration project begins operation, and the

final report not later than 31⁄2 years after that date. The evaluation and reports shall include an assessment, based on the

agreement entered into under subsection (b), of the following:

‘‘(A) Any savings or costs to the medicare program

under this title resulting from the demonstration project.

‘‘(B) The cost to the Department of Defense of providing

care to medicare-eligible military retirees and dependents

under the demonstration project.

‘‘(C) A description of the effects of the demonstration

project on military treatment facility readiness and training

and the probable effects of the project on overall Department of Defense medical readiness and training.

‘‘(D) Any impact of the demonstration project on access

to care for active duty military personnel and their dependents.

‘‘(E) An analysis of how the demonstration project

affects the overall accessibility of the uniformed services

treatment system and the amount of space available for

point-of-service care, and a description of the unintended

effects (if any) upon the normal treatment priority system.

‘‘(F) Compliance by the Department of Defense with

the requirements under this title.

‘‘(G) The number of medicare-eligible military retirees

and dependents opting to participate in the demonstration

project instead of receiving health benefits through another

health insurance plan (including benefits under this title).

‘‘(H) A list of the health insurance plans and programs

that were the primary payers for medicare-eligible military

retirees and dependents during the year prior to their

participation in the demonstration project and the distribution of their previous enrollment in such plans and programs.

‘‘(I) Any impact of the demonstration project on private

health care providers and beneficiaries under this title

that are not enrolled in the demonstration project.
H. R. 2015—93

‘‘(J) An assessment of the access to care and quality

of care for medicare-eligible military retirees and dependents under the demonstration project.

‘‘(K) An analysis of whether, and in what manner,

easier access to the uniformed services treatment system

affects the number of medicare-eligible military retirees

and dependents receiving medicare health care services.

‘‘(L) Any impact of the demonstration project on the

access to care for medicare-eligible military retirees and

dependents who did not enroll in the demonstration project

and for other individuals entitled to benefits under this

title.

‘‘(M) A description of the difficulties (if any) experienced by the Department of Defense in managing the demonstration project and TRICARE contracts.

‘‘(N) Any additional elements specified in the agreement entered into under subsection (b).

‘‘(O) Any additional elements that the Comptroller General of the United States determines is appropriate to

assess regarding the demonstration project.

‘‘(2) REPORT ON EXTENSION AND EXPANSION OF DEMONSTRATION PROJECT.—Not later than 6 months after the date of

the submission of the final report by the Comptroller General

of the United States under paragraph (1), the administering

Secretaries shall submit to Congress a report containing their

recommendation as to—

‘‘(A) whether there is a cost to the health care program

under this title in conducting the demonstration project,

and whether the demonstration project could be expanded

without there being a cost to such health care program

or to the Federal Government;

‘‘(B) whether to extend the demonstration project or

make the project permanent; and

‘‘(C) whether the terms and conditions of the project

should be continued (or modified) if the project is extended

or expanded.’’.

(b) IMPLEMENTATION PLAN FOR VETERANS SUBVENTION.—Not

later than 12 months after the start of the demonstration project,

the Secretary of Health and Human Services and the Secretary

of Veterans Affairs shall jointly submit to Congress a detailed

implementation plan for a subvention demonstration project (that

follows the model of the demonstration project conducted under

section 1896 of the Social Security Act (as added by subsection

(a)) to begin in 1999 for veterans (as defined in section 101 of

title 38, United States Code) that are eligible for benefits under

title XVIII of the Social Security Act.

Subchapter D—Other Projects

SEC. 4016. MEDICARE COORDINATED CARE DEMONSTRATION

PROJECT.

(a) DEMONSTRATION PROJECTS.—

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

Services (in this section referred to as the ‘‘Secretary’’) shall

conduct demonstration projects for the purpose of evaluating

methods, such as case management and other models of coordinated care, that—
H. R. 2015—94

(A) improve the quality of items and services provided

to target individuals; and

(B) reduce expenditures under the medicare program

under title XVIII of the Social Security Act (42 U.S.C.

1395 et seq.) for items and services provided to target

individuals.

(2) TARGET INDIVIDUAL DEFINED.—In this section, the term

‘‘target individual’’ means an individual that has a chronic

illness, as defined and identified by the Secretary, and is

enrolled under the fee-for-service program under parts A and

B of title XVIII of the Social Security Act (42 U.S.C. 1395c

et seq.; 1395j et seq.).

(b) PROGRAM DESIGN.—

(1) INITIAL DESIGN.—The Secretary shall evaluate best practices in the private sector of methods of coordinated care for

a period of 1 year and design the demonstration project based

on such evaluation.

(2) NUMBER AND PROJECT AREAS.—Not later than 2 years

after the date of enactment of this Act, the Secretary shall

implement at least 9 demonstration projects, including—

(A) 5 projects in urban areas;

(B) 3 projects in rural areas; and

(C) 1 project within the District of Columbia which

is operated by a nonprofit academic medical center that

maintains a National Cancer Institute certified comprehensive cancer center.

(3) EXPANSION OF PROJECTS; IMPLEMENTATION OF DEMONSTRATION PROJECT RESULTS.— (A) EXPANSION OF PROJECTS.—If the initial report

under subsection (c) contains an evaluation that demonstration projects—

(i) reduce expenditures under the medicare program; or

(ii) do not increase expenditures under the medicare program and increase the quality of health care

services provided to target individuals and satisfaction

of beneficiaries and health care providers;

the Secretary shall continue the existing demonstration

projects and may expand the number of demonstration

projects.

(B) IMPLEMENTATION OF DEMONSTRATION PROJECT

RESULTS.—If a report under subsection (c) contains an

evaluation as described in subparagraph (A), the Secretary

may issue regulations to implement, on a permanent basis,

the components of the demonstration project that are beneficial to the medicare program.

(c) REPORT TO CONGRESS.—

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

implements the initial demonstration projects under this section, and biannually thereafter, the Secretary shall submit

to Congress a report regarding the demonstration projects conducted under this section.

(2) CONTENTS OF REPORT.—The report in paragraph (1)

shall include the following:

(A) A description of the demonstration projects conducted under this section.

(B) An evaluation of—
H. R. 2015—95

(i) the cost-effectiveness of the demonstration

projects;

(ii) the quality of the health care services provided

to target individuals under the demonstration projects;

and

(iii) beneficiary and health care provider satisfaction under the demonstration project.

(C) Any other information regarding the demonstration

projects conducted under this section that the Secretary

determines to be appropriate.

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

with the requirements of title XVIII of the Social Security Act

(42 U.S.C. 1395 et seq.) to such extent and for such period as

the Secretary determines is necessary to conduct demonstration

projects.

(e) FUNDING.—

(1) DEMONSTRATION PROJECTS.—

(A) IN GENERAL.—

(i) STATE PROJECTS.—Except as provided in clause

(ii), the Secretary shall provide for the transfer from

the Federal Hospital Insurance Trust Fund and the

Federal Supplementary Insurance Trust Fund under

title XVIII of the Social Security Act (42 U.S.C. 1395i,

1395t), in such proportions as the Secretary determines

to be appropriate, of such funds as are necessary for

the costs of carrying out the demonstration projects

under this section.

(ii) CANCER HOSPITAL.—In the case of the project

described in subsection (b)(2)(C), amounts shall be

available only as provided in any Federal law making

appropriations for the District of Columbia.

(B) LIMITATION.—In conducting the demonstration

project under this section, the Secretary shall ensure that

the aggregate payments made by the Secretary do not

exceed the amount which the Secretary would have paid

if the demonstration projects under this section were not

implemented.

(2) EVALUATION AND REPORT.—There are authorized to be

appropriated such sums as are necessary for the purpose of

developing and submitting the report to Congress under subsection (c).

SEC. 4017. ORDERLY TRANSITION OF MUNICIPAL HEALTH SERVICE

DEMONSTRATION PROJECTS.

Section 9215 of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended by section 6135 of OBRA–1989

and section 13557 of OBRA–1993, is further amended—

(1) by inserting ‘‘(a)’’ before ‘‘The Secretary’’, and

(2) by adding at the end the following: ‘‘Subject to subsection (c), the Secretary may further extend such demonstration projects through December 31, 2000, but only with respect

to individuals who received at least one service during the

period beginning on January 1, 1996, and ending on the date

of the enactment of the Balanced Budget Act of 1997.

‘‘(b) The Secretary shall work with each such demonstration

project to develop a plan, to be submitted to the Committee on

Ways and Means and the Committee on Commerce of the House
H. R. 2015—96

of Representatives and the Committee on Finance of the Senate

by March 31, 1998, for the orderly transition of demonstration

projects and the project participants to a non-demonstration project

health care delivery system, such as through integration with a

private or public health plan, including a medicaid managed care

or Medicare+Choice plan.

‘‘(c) A demonstration project under subsection (a) which does

not develop and submit a transition plan under subsection (b)

by March 31, 1998, or, if later, 6 months after the date of the

enactment of the Balanced Budget Act of 1997, shall be discontinued

as of December 31, 1998. The Secretary shall provide appropriate

technical assistance to assist in the transition so that disruption

of medical services to project participants may be minimized.’’.

SEC. 4018. MEDICARE ENROLLMENT DEMONSTRATION PROJECT.

(a) DEMONSTRATION PROJECT.—

(1) ESTABLISHMENT.—The Secretary shall implement a

demonstration project (in this section referred to as the

‘‘project’’) for the purpose of evaluating the use of a thirdparty contractor to conduct the Medicare+Choice plan enrollment and disenrollment functions, as described in part C of

title XVIII of the Social Security Act (as added by section

4001 of this Act), in an area.

(2) CONSULTATION.—Before implementing the project under

this section, the Secretary shall consult with affected parties

on—

(A) the design of the project;

(B) the selection criteria for the third-party contractor;

and

(C) the establishment of performance standards, as

described in paragraph (3).

(3) PERFORMANCE STANDARDS.—

(A) IN GENERAL.—The Secretary shall establish

performance standards for the accuracy and timeliness of

the Medicare+Choice plan enrollment and disenrollment

functions performed by the third-party contractor.

(B) NONCOMPLIANCE.—In the event that the third-party

contractor is not in substantial compliance with the

performance standards established under subparagraph

(A), such enrollment and disenrollment functions shall be

performed by the Medicare+Choice plan until the Secretary

appoints a new third-party contractor.

(b) REPORT TO CONGRESS.—The Secretary shall periodically

report to Congress on the progress of the project conducted pursuant

to this section.

(c) WAIVER AUTHORITY.—The Secretary shall waive compliance

with the requirements of part C of title XVIII of the Social Security

Act (as amended by section 4001 of this Act) to such extent and

for such period as the Secretary determines is necessary to conduct

the project.

(d) DURATION.—A demonstration project under this section shall

be conducted for a 3-year period.

(e) SEPARATE FROM OTHER DEMONSTRATION PROJECTS.—A

project implemented by the Secretary under this section shall not

be conducted in conjunction with any other demonstration project.
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SEC. 4019. EXTENSION OF CERTAIN MEDICARE COMMUNITY NURSING

ORGANIZATION DEMONSTRATION PROJECTS.

Notwithstanding any other provision of law, demonstration

projects conducted under section 4079 of the Omnibus Budget Reconciliation Act of 1987 may be conducted for an additional period

of 2 years, and the deadline for any report required relating to

the results of such projects shall be not later than 6 months before

the end of such additional period.

CHAPTER 3—COMMISSIONS

SEC. 4021. NATIONAL BIPARTISAN COMMISSION ON THE FUTURE OF

MEDICARE.

(a) ESTABLISHMENT.—There is established a commission to be

known as the National Bipartisan Commission on the Future of

Medicare (in this section referred to as the ‘‘Commission’’).

(b) DUTIES OF THE COMMISSION.—The Commission shall—

(1) review and analyze the long-term financial condition

of the medicare program under title XVIII of the Social Security

Act (42 U.S.C. 1395 et seq.);

(2) identify problems that threaten the financial integrity

of the Federal Hospital Insurance Trust Fund and the Federal

Supplementary Medical Insurance Trust Fund established

under that title (42 U.S.C. 1395i, 1395t), including—

(A) the financial impact on the medicare program of

the significant increase in the number of medicare eligible

individuals which will occur beginning approximately during 2010 and lasting for approximately 25 years, and

(B) the extent to which current medicare update

indexes do not accurately reflect inflation;

(3) analyze potential solutions to the problems identified

under paragraph (2) that will ensure both the financial integrity

of the medicare program and the provision of appropriate benefits under such program, including methods used by other

nations to respond to comparable demographic patterns in eligibility for health care benefits for elderly and disabled individuals and trends in employment-related health care for retirees;

(4) make recommendations to restore the solvency of the

Federal Hospital Insurance Trust Fund and the financial integrity of the Federal Supplementary Medical Insurance Trust

Fund;

(5) make recommendations for establishing the appropriate

financial structure of the medicare program as a whole;

(6) make recommendations for establishing the appropriate

balance of benefits covered and beneficiary contributions to

the medicare program;

(7) make recommendations for the time periods during

which the recommendations described in paragraphs (4), (5),

and (6) should be implemented;

(8) make recommendations regarding the financing of graduate medical education (GME), including consideration of alternative broad-based sources of funding for such education and

funding for institutions not currently eligible for such GME

support that conduct approved graduate medical residency programs, such as children’s hospitals;

(9) make recommendations on modifying age-based eligibility to correspond to changes in age-based eligibility under
H. R. 2015—98

the OASDI program and on the feasibility of allowing individuals between the age of 62 and the medicare eligibility age

to buy into the medicare program;

(10) make recommendations on the impact of chronic disease and disability trends on future costs and quality of services

under the current benefit, financing, and delivery system structure of the medicare program;

(11) make recommendations regarding a comprehensive

approach to preserve the program; and

(12) review and analyze such other matters as the Commission deems appropriate.

(c) MEMBERSHIP.—

(1) NUMBER AND APPOINTMENT.—The Commission shall be

composed of 17 members, of whom—

(A) four shall be appointed by the President;

(B) six shall be appointed by the Majority Leader of

the Senate, in consultation with the Minority Leader of

the Senate, of whom not more than 4 shall be of the

same political party;

(C) six shall be appointed by the Speaker of the House

of Representatives, in consultation with the Minority

Leader of the House of Representatives, of whom not more

than 4 shall be of the same political party; and

(D) one, who shall serve as Chairman of the Commission, appointed jointly by the President, Majority Leader

of the Senate, and the Speaker of the House of Representatives.

(2) DEADLINE FOR APPOINTMENT.—Members of the Commission shall be appointed by not later than December 1, 1997.

(3) TERMS OF APPOINTMENT.—The term of any appointment

under paragraph (1) to the Commission shall be for the life

of the Commission.

(4) MEETINGS.—The Commission shall meet at the call

of its Chairman or a majority of its members.

(5) QUORUM.—A quorum shall consist of 8 members of

the Commission, except that 4 members may conduct a hearing

under subsection (e).

(6) VACANCIES.—A vacancy on the Commission shall be

filled in the same manner in which the original appointment

was made not later than 30 days after the Commission is

given notice of the vacancy and shall not affect the power

of the remaining members to execute the duties of the Commission.

(7) COMPENSATION.—Members of the Commission shall

receive no additional pay, allowances, or benefits by reason

of their service on the Commission.

(8) EXPENSES.—Each member of the Commission shall

receive travel expenses and per diem in lieu of subsistence

in accordance with sections 5702 and 5703 of title 5, United

States Code.

(d) STAFF AND SUPPORT SERVICES.—

(1) EXECUTIVE DIRECTOR.—

(A) APPOINTMENT.—The Chairman shall appoint an

executive director of the Commission.

(B) COMPENSATION.—The executive director shall be

paid the rate of basic pay for level V of the Executive

Schedule.
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(2) STAFF.—With the approval of the Commission, the

executive director may appoint such personnel as the executive

director considers appropriate.

(3) APPLICABILITY OF CIVIL SERVICE LAWS.—The staff of

the Commission shall be appointed without regard to the provisions of title 5, United States Code, governing appointments

in the competitive service, and shall be paid without regard

to the provisions of chapter 51 and subchapter III of chapter

53 of such title (relating to classification and General Schedule

pay rates).

(4) EXPERTS AND CONSULTANTS.—With the approval of the

Commission, the executive director may procure temporary and

intermittent services under section 3109(b) of title 5, United

States Code.

(5) PHYSICAL FACILITIES.—The Administrator of the General Services Administration shall locate suitable office space

for the operation of the Commission. The facilities shall serve

as the headquarters of the Commission and shall include all

necessary equipment and incidentals required for the proper

functioning of the Commission.

(e) POWERS OF COMMISSION.—

(1) HEARINGS AND OTHER ACTIVITIES.—For the purpose of

carrying out its duties, the Commission may hold such hearings

and undertake such other activities as the Commission determines to be necessary to carry out its duties.

(2) STUDIES BY GAO.—Upon the request of the Commission,

the Comptroller General shall conduct such studies or investigations as the Commission determines to be necessary to carry

out its duties.

(3) COST ESTIMATES BY CONGRESSIONAL BUDGET OFFICE AND

OFFICE OF THE CHIEF ACTUARY OF HCFA.—

(A) The Director of the Congressional Budget Office

or the Chief Actuary of the Health Care Financing Administration, or both, shall provide to the Commission, upon

the request of the Commission, such cost estimates as

the Commission determines to be necessary to carry out

its duties.

(B) The Commission shall reimburse the Director of

the Congressional Budget Office for expenses relating to

the employment in the office of the Director of such additional staff as may be necessary for the Director to comply

with requests by the Commission under subparagraph (A).

(4) DETAIL OF FEDERAL EMPLOYEES.—Upon the request of

the Commission, the head of any Federal agency is authorized

to detail, without reimbursement, any of the personnel of such

agency to the Commission to assist the Commission in carrying

out its duties. Any such detail shall not interrupt or otherwise

affect the civil service status or privileges of the Federal

employee.

(5) TECHNICAL ASSISTANCE.—Upon the request of the

Commission, the head of a Federal agency shall provide such

technical assistance to the Commission as the Commission

determines to be necessary to carry out its duties.

(6) USE OF MAILS.—The Commission may use the United

States mails in the same manner and under the same conditions

as Federal agencies and shall, for purposes of the frank, be
H. R. 2015—100

considered a commission of Congress as described in section

3215 of title 39, United States Code.

(7) OBTAINING INFORMATION.—The Commission may secure

directly from any Federal agency information necessary to

enable it to carry out its duties, if the information may be

disclosed under section 552 of title 5, United States Code.

Upon request of the Chairman of the Commission, the head

of such agency shall furnish such information to the Commission.

(8) ADMINISTRATIVE SUPPORT SERVICES.—Upon the request

of the Commission, the Administrator of General Services shall

provide to the Commission on a reimbursable basis such

administrative support services as the Commission may

request.

(9) PRINTING.—For purposes of costs relating to printing

and binding, including the cost of personnel detailed from the

Government Printing Office, the Commission shall be deemed

to be a committee of the Congress.

(f) REPORT.—Not later than March 1, 1999, the Commission

shall submit a report to the President and Congress which shall

contain a detailed statement of only those recommendations, findings, and conclusions of the Commission that receive the approval

of at least 11 members of the Commission.

(g) TERMINATION.—The Commission shall terminate 30 days

after the date of submission of the report required in subsection

(f).

(h) AUTHORIZATION OF APPROPRIATIONS.—There are authorized

to be appropriated $1,500,000 to carry out this section. 60 percent

of such appropriation shall be payable from the Federal Hospital

Insurance Trust Fund, and 40 percent of such appropriation shall

be payable from the Federal Supplementary Medical Insurance

Trust Fund under title XVIII of the Social Security Act (42 U.S.C.

1395i, 1395t).

SEC. 4022. MEDICARE PAYMENT ADVISORY COMMISSION.

(a) IN GENERAL.—Title XVIII is amended by inserting after

section 1804 the following new section:

‘‘MEDICARE PAYMENT ADVISORY COMMISSION

‘‘SEC. 1805. (a) ESTABLISHMENT.—There is hereby established

the Medicare Payment Advisory Commission (in this section

referred to as the ‘Commission’).

‘‘(b) DUTIES.— ‘‘(1) REVIEW OF PAYMENT POLICIES AND ANNUAL REPORTS.—

The Commission shall—

‘‘(A) review payment policies under this title, including

the topics described in paragraph (2);

‘‘(B) make recommendations to Congress concerning

such payment policies;

‘‘(C) by not later than March 1 of each year (beginning

with 1998), submit a report to Congress containing the

results of such reviews and its recommendations concerning

such policies; and

‘‘(D) by not later than June 1 of each year (beginning

with 1998), submit a report to Congress containing an

examination of issues affecting the medicare program,
H. R. 2015—101

including the implications of changes in health care delivery in the United States and in the market for health

care services on the medicare program.

‘‘(2) SPECIFIC TOPICS TO BE REVIEWED.—

‘‘(A) MEDICARE+CHOICE PROGRAM.—Specifically, the

Commission shall review, with respect to the

Medicare+Choice program under part C, the following:

‘‘(i) The methodology for making payment to plans

under such program, including the making of differential payments and the distribution of differential

updates among different payment areas.

‘‘(ii) The mechanisms used to adjust payments for

risk and the need to adjust such mechanisms to take

into account health status of beneficiaries.

‘‘(iii) The implications of risk selection both among

Medicare+Choice organizations and between the

Medicare+Choice option and the original medicare feefor-service option.

‘‘(iv) The development and implementation of

mechanisms to assure the quality of care for those

enrolled with Medicare+Choice organizations.

‘‘(v) The impact of the Medicare+Choice program

on access to care for medicare beneficiaries.

‘‘(vi) Other major issues in implementation and

further development of the Medicare+Choice program.

‘‘(B) ORIGINAL MEDICARE FEE-FOR-SERVICE SYSTEM.—

Specifically, the Commission shall review payment policies

under parts A and B, including—

‘‘(i) the factors affecting expenditures for services

in different sectors, including the process for updating

hospital, skilled nursing facility, physician, and other

fees,

‘‘(ii) payment methodologies, and

‘‘(iii) their relationship to access and quality of

care for medicare beneficiaries.

‘‘(C) INTERACTION OF MEDICARE PAYMENT POLICIES WITH

HEALTH CARE DELIVERY GENERALLY.—Specifically, the

Commission shall review the effect of payment policies

under this title on the delivery of health care services

other than under this title and assess the implications

of changes in health care delivery in the United States

and in the general market for health care services on

the medicare program.

‘‘(3) COMMENTS ON CERTAIN SECRETARIAL REPORTS.—If the

Secretary submits to Congress (or a committee of Congress)

a report that is required by law and that relates to payment

policies under this title, the Secretary shall transmit a copy

of the report to the Commission. The Commission shall review

the report and, not later than 6 months after the date of

submittal of the Secretary’s report to Congress, shall submit

to the appropriate committees of Congress written comments

on such report. Such comments may include such recommendations as the Commission deems appropriate.

‘‘(4) AGENDA AND ADDITIONAL REVIEWS.—The Commission

shall consult periodically with the chairmen and ranking minority members of the appropriate committees of Congress regarding the Commission’s agenda and progress towards achieving
H. R. 2015—102

the agenda. The Commission may conduct additional reviews,

and submit additional reports to the appropriate committees

of Congress, from time to time on such topics relating to the

program under this title as may be requested by such chairmen

and members and as the Commission deems appropriate.

‘‘(5) AVAILABILITY OF REPORTS.—The Commission shall

transmit to the Secretary a copy of each report submitted

under this subsection and shall make such reports available

to the public.

‘‘(6) APPROPRIATE COMMITTEES OF CONGRESS.—For purposes

of this section, the term ‘appropriate committees of Congress’

means the Committees on Ways and Means and Commerce

of the House of Representatives and the Committee on Finance

of the Senate.

‘‘(c) MEMBERSHIP.—

‘‘(1) NUMBER AND APPOINTMENT.—The Commission shall

be composed of 15 members appointed by the Comptroller General.

‘‘(2) QUALIFICATIONS.—

‘‘(A) IN GENERAL.—The membership of the Commission

shall include individuals with national recognition for their

expertise in health finance and economics, actuarial

science, health facility management, health plans and

integrated delivery systems, reimbursement of health facilities, allopathic and osteopathic physicians, and other

providers of health services, and other related fields, who

provide a mix of different professionals, broad geographic

representation, and a balance between urban and rural

representatives.

‘‘(B) INCLUSION.—The membership of the Commission

shall include (but not be limited to) physicians and other

health professionals, employers, third-party payers, individuals skilled in the conduct and interpretation of biomedical,

health services, and health economics research and expertise in outcomes and effectiveness research and technology

assessment. Such membership shall also include representatives of consumers and the elderly.

‘‘(C) MAJORITY NONPROVIDERS.—Individuals who are

directly involved in the provision, or management of the

delivery, of items and services covered under this title

shall not constitute a majority of the membership of the

Commission.

‘‘(D) ETHICAL DISCLOSURE.—The Comptroller General

shall establish a system for public disclosure by members

of the Commission of financial and other potential conflicts

of interest relating to such members.

‘‘(3) TERMS.—

‘‘(A) IN GENERAL.—The terms of members of the

Commission shall be for 3 years except that the Comptroller

General shall designate staggered terms for the members

first appointed.

‘‘(B) VACANCIES.—Any member appointed to fill a

vacancy occurring before the expiration of the term for

which the member’s predecessor was appointed shall be

appointed only for the remainder of that term. A member

may serve after the expiration of that member’s term until

a successor has taken office. A vacancy in the Commission
H. R. 2015—103

shall be filled in the manner in which the original appointment was made.

‘‘(4) COMPENSATION.—While serving on the business of the

Commission (including traveltime), a member of the Commission shall be entitled to compensation at the per diem equivalent of the rate provided for level IV of the Executive Schedule

under section 5315 of title 5, United States Code; and while

so serving away from home and the member’s regular place

of business, a member may be allowed travel expenses, as

authorized by the Chairman of the Commission. Physicians

serving as personnel of the Commission may be provided a

physician comparability allowance by the Commission in the

same manner as Government physicians may be provided such

an allowance by an agency under section 5948 of title 5, United

States Code, and for such purpose subsection (i) of such section

shall apply to the Commission in the same manner as it applies

to the Tennessee Valley Authority. For purposes of pay (other

than pay of members of the Commission) and employment

benefits, rights, and privileges, all personnel of the Commission

shall be treated as if they were employees of the United States

Senate.

‘‘(5) CHAIRMAN; VICE CHAIRMAN.—The Comptroller General

shall designate a member of the Commission, at the time of

appointment of the member as Chairman and a member as

Vice Chairman for that term of appointment, except that in

the case of vacancy of the Chairmanship or Vice Chairmanship,

the Comptroller General may designate another member for

the remainder of that member’s term.

‘‘(6) MEETINGS.—The Commission shall meet at the call

of the Chairman.

‘‘(d) DIRECTOR AND STAFF; EXPERTS AND CONSULTANTS.—Subject to such review as the Comptroller General deems necessary

to assure the efficient administration of the Commission, the

Commission may—

‘‘(1) employ and fix the compensation of an Executive Director (subject to the approval of the Comptroller General) and

such other personnel as may be necessary to carry out its

duties (without regard to the provisions of title 5, United States

Code, governing appointments in the competitive service);

‘‘(2) seek such assistance and support as may be required

in the performance of its duties from appropriate Federal

departments and agencies;

‘‘(3) enter into contracts or make other arrangements, as

may be necessary for the conduct of the work of the Commission

(without regard to section 3709 of the Revised Statutes (41

U.S.C. 5));

‘‘(4) make advance, progress, and other payments which

relate to the work of the Commission;

‘‘(5) provide transportation and subsistence for persons

serving without compensation; and

‘‘(6) prescribe such rules and regulations as it deems necessary with respect to the internal organization and operation

of the Commission.

‘‘(e) POWERS.—

‘‘(1) OBTAINING OFFICIAL DATA.—The Commission may

secure directly from any department or agency of the United

States information necessary to enable it to carry out this
H. R. 2015—104

section. Upon request of the Chairman, the head of that department or agency shall furnish that information to the Commission on an agreed upon schedule.

‘‘(2) DATA COLLECTION.—In order to carry out its functions,

the Commission shall—

‘‘(A) utilize existing information, both published and

unpublished, where possible, collected and assessed either

by its own staff or under other arrangements made in

accordance with this section,

‘‘(B) carry out, or award grants or contracts for, original

research and experimentation, where existing information

is inadequate, and

‘‘(C) adopt procedures allowing any interested party

to submit information for the Commission’s use in making

reports and recommendations.

‘‘(3) ACCESS OF GAO TO INFORMATION.—The Comptroller

General shall have unrestricted access to all deliberations,

records, and nonproprietary data of the Commission, immediately upon request.

‘‘(4) PERIODIC AUDIT.—The Commission shall be subject

to periodic audit by the Comptroller General.

‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—

‘‘(1) REQUEST FOR APPROPRIATIONS.—The Commission shall

submit requests for appropriations in the same manner as

the Comptroller General submits requests for appropriations,

but amounts appropriated for the Commission shall be separate

from amounts appropriated for the Comptroller General.

‘‘(2) AUTHORIZATION.—There are authorized to be appropriated such sums as may be necessary to carry out the provisions of this section. Sixty percent of such appropriation shall

be payable from the Federal Hospital Insurance Trust Fund,

and 40 percent of such appropriation shall be payable from

the Federal Supplementary Medical Insurance Trust Fund.’’.

(b) ABOLITION OF PROPAC AND PPRC.—

(1) PROPAC.—

(A) IN GENERAL.—Section 1886(e) (42 U.S.C.

1395ww(e)) is amended—

(i) by striking paragraphs (2) and (6); and

(ii) in paragraph (3), by striking ‘‘(A) The Commission’’ and all that follows through ‘‘(B)’’.

(B) CONFORMING AMENDMENT.—Section 1862 (42

U.S.C. 1395y) is amended by striking ‘‘Prospective Payment

Assessment Commission’’ each place it appears in subsection (a)(1)(D) and subsection (i) and inserting ‘‘Medicare

Payment Advisory Commission’’.

(2) PPRC.—

(A) IN GENERAL.—Title XVIII is amended by striking

section 1845 (42 U.S.C. 1395w–1).

(B) ELIMINATION OF CERTAIN REPORTS.—Section 1848

(42 U.S.C. 1395w–4) is amended—

(i) by striking subparagraph (F) of subsection

(d)(2),

(ii) by striking subparagraph (B) of subsection

(f)(1), and

(iii) in subsection (f)(3), by striking ‘‘Physician Payment Review Commission,’’.
H. R. 2015—105

(C) CONFORMING AMENDMENTS.—Section 1848 (42

U.S.C. 1395w–4) is amended by striking ‘‘Physician Payment Review Commission’’ and inserting ‘‘Medicare Payment Advisory Commission’’ each place it appears in subsections (c)(2)(B)(iii), (g)(6)(C), and (g)(7)(C).

(c) EFFECTIVE DATE; TRANSITION.— (1) IN GENERAL.—The Comptroller General shall first provide for appointment of members to the Medicare Payment

Advisory Commission (in this subsection referred to as

‘‘MedPAC’’) by not later than September 30, 1997.

(2) TRANSITION.—As quickly as possible after the date a

majority of members of MedPAC are first appointed, the

Comptroller General, in consultation with the Prospective Payment Assessment Commission (in this subsection referred to

as ‘‘ProPAC’’) and the Physician Payment Review Commission

(in this subsection referred to as ‘‘PPRC’’), shall provide for

the termination of the ProPAC and the PPRC. As of the date

of termination of the respective Commissions, the amendments

made by paragraphs (1) and (2), respectively, of subsection

(b) become effective. The Comptroller General, to the extent

feasible, shall provide for the transfer to the MedPAC of assets

and staff of the ProPAC and the PPRC, without any loss

of benefits or seniority by virtue of such transfers. Fund balances available to the ProPAC or the PPRC for any period

shall be available to the MedPAC for such period for like

purposes.

(3) CONTINUING RESPONSIBILITY FOR REPORTS.—The

MedPAC shall be responsible for the preparation and submission of reports required by law to be submitted (and which

have not been submitted by the date of establishment of the

MedPAC) by the ProPAC and the PPRC, and, for this purpose,

any reference in law to either such Commission is deemed,

after the appointment of the MedPAC, to refer to the MedPAC.

CHAPTER 4—MEDIGAP PROTECTIONS

SEC. 4031. MEDIGAP PROTECTIONS.

(a) GUARANTEEING ISSUE WITHOUT PREEXISTING CONDITIONS

FOR CONTINUOUSLY COVERED INDIVIDUALS.—Section 1882(s) (42

U.S.C. 1395ss(s)) is amended—

(1) in paragraph (3), by striking ‘‘paragraphs (1) and (2)’’

and inserting ‘‘this subsection’’,

(2) by redesignating paragraph (3) as paragraph (4), and

(3) by inserting after paragraph (2) the following new paragraph:

‘‘(3)(A) The issuer of a medicare supplemental policy—

‘‘(i) may not deny or condition the issuance or effectiveness

of a medicare supplemental policy described in subparagraph

(C) that is offered and is available for issuance to new enrollees

by such issuer;

‘‘(ii) may not discriminate in the pricing of such policy,

because of health status, claims experience, receipt of health

care, or medical condition; and

‘‘(iii) may not impose an exclusion of benefits based on

a pre-existing condition under such policy,

in the case of an individual described in subparagraph (B) who

seeks to enroll under the policy not later than 63 days after the
H. R. 2015—106

date of the termination of enrollment described in such subparagraph and who submits evidence of the date of termination or

disenrollment along with the application for such medicare supplemental policy.

‘‘(B) An individual described in this subparagraph is an individual described in any of the following clauses:

‘‘(i) The individual is enrolled under an employee welfare

benefit plan that provides health benefits that supplement the

benefits under this title and the plan terminates or ceases

to provide all such supplemental health benefits to the individual.

‘‘(ii) The individual is enrolled with a Medicare+Choice

organization under a Medicare+Choice plan under part C, and

there are circumstances permitting discontinuance of the

individual’s election of the plan under the first sentence of

section 1851(e)(4).

‘‘(iii) The individual is enrolled with an eligible organization

under a contract under section 1876, a similar organization

operating under demonstration project authority, effective for

periods before April 1, 1999, with an organization under an

agreement under section 1833(a)(1)(A), or with an organization

under a policy described in subsection (t), and such enrollment

ceases under the same circumstances that would permit discontinuance of an individual’s election of coverage under the

first sentence of section 1851(e)(4) and, in the case of a policy

described in subsection (t), there is no provision under

applicable State law for the continuation or conversion of coverage under such policy.

‘‘(iv) The individual is enrolled under a medicare supplemental policy under this section and such enrollment ceases

because—

‘‘(I) of the bankruptcy or insolvency of the issuer or

because of other involuntary termination of coverage or

enrollment under such policy and there is no provision

under applicable State law for the continuation or conversion of such coverage;

‘‘(II) the issuer of the policy substantially violated a

material provision of the policy; or

‘‘(III) the issuer (or an agent or other entity acting

on the issuer’s behalf) materially misrepresented the policy’s provisions in marketing the policy to the individual.

‘‘(v) The individual—

‘‘(I) was enrolled under a medicare supplemental policy

under this section,

‘‘(II) subsequently terminates such enrollment and

enrolls, for the first time, with any Medicare+Choice

organization under a Medicare+Choice plan under part

C, any eligible organization under a contract under section

1876, any similar organization operating under demonstration project authority, or any policy described in subsection

(t), and

‘‘(III) the subsequent enrollment under subclause (II)

is terminated by the enrollee during any period within

the first 12 months of such enrollment (during which the

enrollee is permitted to terminate such subsequent enrollment under section 1851(e)).
H. R. 2015—107

‘‘(vi) The individual, upon first becoming eligible for benefits

under part A at age 65, enrolls in a Medicare+Choice plan

under part C, and disenrolls from such plan by not later than

12 months after the effective date of such enrollment.

‘‘(C)(i) Subject to clauses (ii) and (iii), a medicare supplemental

policy described in this subparagraph is a medicare supplemental

policy which has a benefit package classified as ‘A’, ‘B’, ‘C’, or

‘F’ under the standards established under subsection (p)(2).

‘‘(ii) Only for purposes of an individual described in subparagraph (B)(v), a medicare supplemental policy described in this

subparagraph is the same medicare supplemental policy referred

to in such subparagraph in which the individual was most recently

previously enrolled, if available from the same issuer, or, if not

so available, a policy described in clause (i).

‘‘(iii) Only for purposes of an individual described in subparagraph (B)(vi), a medicare supplemental policy described in this

subparagraph shall include any medicare supplemental policy.

‘‘(iv) For purposes of applying this paragraph in the case of

a State that provides for offering of benefit packages other than

under the classification referred to in clause (i), the references

to benefit packages in such clause are deemed references to comparable benefit packages offered in such State.

‘‘(D) At the time of an event described in subparagraph (B)

because of which an individual ceases enrollment or loses coverage

or benefits under a contract or agreement, policy, or plan, the

organization that offers the contract or agreement, the insurer

offering the policy, or the administrator of the plan, respectively,

shall notify the individual of the rights of the individual under

this paragraph, and obligations of issuers of medicare supplemental

policies, under subparagraph (A).’’.

(b) LIMITATION ON IMPOSITION OF PREEXISTING CONDITION

EXCLUSION DURING INITIAL OPEN ENROLLMENT PERIOD.—Section

1882(s)(2) (42 U.S.C. 1395ss(s)(2)) is amended—

(1) in subparagraph (B), by striking ‘‘subparagraph (C)’’

and inserting ‘‘subparagraphs (C) and (D)’’, and

(2) by adding at the end the following new subparagraph:

‘‘(D) In the case of a policy issued during the 6-month period

described in subparagraph (A) to an individual who is 65 years

of age or older as of the date of issuance and who as of the

date of the application for enrollment has a continuous period

of creditable coverage (as defined in 2701(c) of the Public Health

Service Act) of—

‘‘(i) at least 6 months, the policy may not exclude benefits

based on a pre-existing condition; or

‘‘(ii) less than 6 months, if the policy excludes benefits

based on a preexisting condition, the policy shall reduce the

period of any preexisting condition exclusion by the aggregate

of the periods of creditable coverage (if any, as so defined)

applicable to the individual as of the enrollment date.

The Secretary shall specify the manner of the reduction under

clause (ii), based upon the rules used by the Secretary in carrying

out section 2701(a)(3) of such Act.’’.

(c) CONFORMING AMENDMENT.—Section 1882(d)(3)(A)(vi)(III) (42

U.S.C. 1395ss(d)(2)(A)(vi)(III)) is amended by inserting ‘‘, a policy

described in clause (v),’’ after ‘‘Medicare supplemental policy’’.

(d) EFFECTIVE DATES.—
H. R. 2015—108

(1) GUARANTEED ISSUE.—The amendment made by subsection (a) shall take effect on July 1, 1998.

(2) LIMIT ON PREEXISTING CONDITION EXCLUSIONS.—The

amendment made by subsection (b) shall apply to policies issued

on or after July 1, 1998.

(3) CONFORMING AMENDMENT.—The amendment made by

subsection (c) shall be effective as if included in the enactment

of the Health Insurance Portability and Accountability Act of

1996.

(e) TRANSITION PROVISIONS.—

(1) IN GENERAL.—If the Secretary of Health and Human

Services identifies a State as requiring a change to its statutes

or regulations to conform its regulatory program to the changes

made by this section, the State regulatory program shall not

be considered to be out of compliance with the requirements

of section 1882 of the Social Security Act due solely to failure

to make such change until the date specified in paragraph

(4).

(2) NAIC STANDARDS.—If, within 9 months after the date

of the enactment of this Act, the National Association of Insurance Commissioners (in this subsection referred to as the

‘‘NAIC’’) modifies its NAIC Model Regulation relating to section

1882 of the Social Security Act (referred to in such section

as the 1991 NAIC Model Regulation, as modified pursuant

to section 171(m)(2) of the Social Security Act Amendments

of 1994 (Public Law 103–432) and as modified pursuant to

section 1882(d)(3)(A)(vi)(IV) of the Social Security Act, as added

by section 271(a) of the Health Insurance Portability and

Accountability Act of 1996 (Public Law 104–191) to conform

to the amendments made by this section, such revised regulation incorporating the modifications shall be considered to be

the applicable NAIC model regulation (including the revised

NAIC model regulation and the 1991 NAIC Model Regulation)

for the purposes of such section.

(3) SECRETARY STANDARDS.—If the NAIC does not make

the modifications described in paragraph (2) within the period

specified in such paragraph, the Secretary of Health and

Human Services shall make the modifications described in such

paragraph and such revised regulation incorporating the modifications shall be considered to be the appropriate Regulation

for the purposes of such section.

(4) DATE SPECIFIED.—

(A) IN GENERAL.—Subject to subparagraph (B), the date

specified in this paragraph for a State is the earlier of—

(i) the date the State changes its statutes or regulations to conform its regulatory program to the

changes made by this section, or

(ii) 1 year after the date the NAIC or the Secretary

first makes the modifications under paragraph (2) or

(3), respectively.

(B) ADDITIONAL LEGISLATIVE ACTION REQUIRED.—In the

case of a State which the Secretary identifies as—

(i) requiring State legislation (other than legislation appropriating funds) to conform its regulatory program to the changes made in this section, but
H. R. 2015—109

(ii) having a legislature which is not scheduled

to meet in 1999 in a legislative session in which such

legislation may be considered,

the date specified in this paragraph is the first day of

the first calendar quarter beginning after the close of the

first legislative session of the State legislature that begins

on or after July 1, 1999. For purposes of the previous

sentence, in the case of a State that has a 2-year legislative

session, each year of such session shall be deemed to be

a separate regular session of the State legislature.

(f) CONFORMING BENEFITS TO CHANGES IN TERMINOLOGY FOR

HOSPITAL OUTPATIENT DEPARTMENT COST SHARING.—For purposes

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

and regulations referred to in subsection (e), copayment amounts

provided under section 1833(t)(5) of such Act with respect to hospital

outpatient department services shall be treated under medicare

supplemental policies in the same manner as coinsurance with

respect to such services.

SEC. 4032. ADDITION OF HIGH DEDUCTIBLE MEDIGAP POLICIES.

(a) IN GENERAL.—Section 1882(p) (42 U.S.C. 1395ss(p)) is

amended—

(1) in paragraph (2)(C), by inserting ‘‘plus the 2 plans

described in paragraph (11)(A)’’ after ‘‘exceed 10’’; and

(2) by adding at the end the following:

‘‘(11)(A) For purposes of paragraph (2), the benefit packages

described in this subparagraph are as follows:

‘‘(i) The benefit package classified as ‘F’ under the standards established by such paragraph, except that it has a high

deductible feature.

‘‘(ii) The benefit package classified as ‘J’ under the standards established by such paragraph, except that it has a high

deductible feature.

‘‘(B) For purposes of subparagraph (A), a high deductible feature

is one which—

‘‘(i) requires the beneficiary of the policy to pay annual

out-of-pocket expenses (other than premiums) in the amount

specified in subparagraph (C) before the policy begins payment

of benefits, and

‘‘(ii) covers 100 percent of covered out-of-pocket expenses

once such deductible has been satisfied in a year.

‘‘(C) The amount specified in this subparagraph—

‘‘(i) for 1998 and 1999 is $1,500, and

‘‘(ii) for a subsequent year, is the amount specified in

this subparagraph for the previous year increased by the

percentage increase in the Consumer Price Index for all urban

consumers (all items; U.S. city average) for the 12-month period

ending with August of the preceding year.

If any amount determined under clause (ii) is not a multiple of

$10, it shall be rounded to the nearest multiple of $10.’’.

(b) EFFECTIVE DATE.—

(1) IN GENERAL.—The amendments made by subsection

(a) shall take effect the date of the enactment of this Act.

(2) TRANSITION.—The provisions of section 4031(e) shall

apply with respect to this section in the same manner as

they apply to section 4031.
H. R. 2015—110

CHAPTER 5—TAX TREATMENT OF HOSPITALS PARTICIPATING IN PROVIDER-SPONSORED ORGANIZATIONS

SEC. 4041. TAX TREATMENT OF HOSPITALS WHICH PARTICIPATE IN

PROVIDER-SPONSORED ORGANIZATIONS.

(a) IN GENERAL.—Section 501 of the Internal Revenue Code

of 1986 (relating to exemption from tax on corporations, certain

trusts, etc.) is amended by redesignating subsection (o) as subsection

(p) and by inserting after subsection (n) the following new subsection:

‘‘(o) TREATMENT OF HOSPITALS PARTICIPATING IN PROVIDER- SPONSORED ORGANIZATIONS.—An organization shall not fail to be

treated as organized and operated exclusively for a charitable purpose for purposes of subsection (c)(3) solely because a hospital

which is owned and operated by such organization participates

in a provider-sponsored organization (as defined in section 1853(e)

of the Social Security Act), whether or not the provider-sponsored

organization is exempt from tax. For purposes of subsection (c)(3),

any person with a material financial interest in such a providersponsored organization shall be treated as a private shareholder

or individual with respect to the hospital.’’

(b) EFFECTIVE DATE.—The amendment made by subsection (a)

shall take effect on the date of the enactment of this Act.

Subtitle B—Prevention Initiatives

SEC. 4101. SCREENING MAMMOGRAPHY.

(a) PROVIDING ANNUAL SCREENING MAMMOGRAPHY FOR WOMEN

OVER AGE 39.—Section 1834(c)(2)(A) (42 U.S.C. 1395m(c)(2)(A)) is

amended—

(1) in clause (iii), to read as follows:

‘‘(iii) In the case of a woman over 39 years of

age, payment may not be made under this part for

screening mammography performed within 11 months

following the month in which a previous screening

mammography was performed.’’; and

(2) by striking clauses (iv) and (v).

(b) WAIVER OF DEDUCTIBLE.—The first sentence of section

1833(b) (42 U.S.C. 1395l(b)) is amended—

(1) by striking ‘‘and’’ before ‘‘(4)’’, and

(2) by inserting before the period at the end the following:

‘‘, and (5) such deductible shall not apply with respect to screening mammography (as described in section 1861(jj))’’.

(c) CONFORMING AMENDMENT.—Section 1834(c)(1)(C) (42 U.S.C.

1395m(c)(1)(C)) is amended by striking ‘‘, subject to the deductible

established under section 1833(b),’’.

(d) EFFECTIVE DATE.—The amendments made by this section

shall apply to items and services furnished on or after January

1, 1998.

SEC. 4102. SCREENING PAP SMEAR AND PELVIC EXAMS.

(a) COVERAGE OF PELVIC EXAM; INCREASING FREQUENCY OF

COVERAGE OF PAP SMEAR.—Section 1861(nn) (42 U.S.C. 1395x(nn))

is amended—

(1) in the heading, by striking ‘‘Smear’’ and inserting

‘‘Smear; Screening Pelvic Exam’’;
H. R. 2015—111

(2) by inserting ‘‘or vaginal’’ after ‘‘cervical’’ each place

it appears;

(3) by striking ‘‘(nn)’’ and inserting ‘‘(nn)(1)’’;

(4) by striking ‘‘3 years’’ and all that follows and inserting

‘‘3 years, or during the preceding year in the case of a woman

described in paragraph (3).’’; and

(5) by adding at the end the following new paragraphs:

‘‘(2) The term ‘screening pelvic exam’ means a pelvic examination provided to a woman if the woman involved has not had

such an examination during the preceding 3 years, or during the

preceding year in the case of a woman described in paragraph

(3), and includes a clinical breast examination.

‘‘(3) A woman described in this paragraph is a woman who—

‘‘(A) is of childbearing age and has had a test described

in this subsection during any of the preceding 3 years that

indicated the presence of cervical or vaginal cancer or other

abnormality; or

‘‘(B) is at high risk of developing cervical or vaginal cancer

(as determined pursuant to factors identified by the Secretary).’’.

(b) WAIVER OF DEDUCTIBLE.—The first sentence of section

1833(b) (42 U.S.C. 1395l(b)), as amended by section 4101(b), is

amended—

(1) by striking ‘‘and’’ before ‘‘(5)’’, and

(2) by inserting before the period at the end the following:

‘‘, and (6) such deductible shall not apply with respect to screening pap smear and screening pelvic exam (as described in

section 1861(nn))’’.

(c) CONFORMING AMENDMENTS.—Sections 1861(s)(14) and

1862(a)(1)(F) (42 U.S.C. 1395x(s)(14), 1395y(a)(1)(F)) are each

amended by inserting ‘‘and screening pelvic exam’’ after ‘‘screening

pap smear’’.

(d) PAYMENT UNDER PHYSICIAN FEE SCHEDULE.—Section

1848(j)(3) (42 U.S.C. 1395w–4(j)(3)) is amended by striking ‘‘and

(4)’’ and inserting ‘‘(4) and (14) (with respect to services described

in section 1861(nn)(2))’’.

(e) EFFECTIVE DATE.—The amendments made by this section

shall apply to items and services furnished on or after January

1, 1998.

SEC. 4103. PROSTATE CANCER SCREENING TESTS.

(a) COVERAGE.—Section 1861 (42 U.S.C. 1395x) is amended—

(1) in subsection (s)(2)—

(A) by striking ‘‘and’’ at the end of subparagraphs

(N) and (O), and

(B) by inserting after subparagraph (O) the following

new subparagraph:

‘‘(P) prostate cancer screening tests (as defined in subsection (oo)); and’’; and

(2) by adding at the end the following new subsection:

‘‘Prostate Cancer Screening Tests

‘‘(oo)(1) The term ‘prostate cancer screening test’ means a test

that consists of any (or all) of the procedures described in paragraph

(2) provided for the purpose of early detection of prostate cancer

to a man over 50 years of age who has not had such a test

during the preceding year.
H. R. 2015—112

‘‘(2) The procedures described in this paragraph are as follows:

‘‘(A) A digital rectal examination.

‘‘(B) A prostate-specific antigen blood test.

‘‘(C) For years beginning after 2002, such other procedures

as the Secretary finds appropriate for the purpose of early

detection of prostate cancer, taking into account changes in

technology and standards of medical practice, availability,

effectiveness, costs, and such other factors as the Secretary

considers appropriate.’’.

(b) PAYMENT FOR PROSTATE-SPECIFIC ANTIGEN BLOOD TEST

UNDER CLINICAL DIAGNOSTIC LABORATORY TEST FEE SCHEDULES.— Section 1833(h)(1)(A) (42 U.S.C. 1395l(h)(1)(A)) is amended by

inserting after ‘‘laboratory tests’’ the following: ‘‘(including prostate

cancer screening tests under section 1861(oo) consisting of prostatespecific antigen blood tests)’’.

(c) CONFORMING AMENDMENT.—Section 1862(a) (42 U.S.C.

1395y(a)) is amended—

(1) in paragraph (1)—

(A) in subparagraph (E), by striking ‘‘and’’ at the end,

(B) in subparagraph (F), by striking the semicolon

at the end and inserting ‘‘, and’’, and

(C) by adding at the end the following new subparagraph:

‘‘(G) in the case of prostate cancer screening tests (as

defined in section 1861(oo)), which are performed more frequently than is covered under such section;’’; and

(2) in paragraph (7), by striking ‘‘paragraph (1)(B) or under

paragraph (1)(F)’’ and inserting ‘‘subparagraphs (B), (F), or

(G) of paragraph (1)’’.

(d) PAYMENT UNDER PHYSICIAN FEE SCHEDULE.—Section

1848(j)(3) (42 U.S.C. 1395w–4(j)(3)), as amended by section 4102,

is amended by inserting ‘‘, (2)(P) (with respect to services described

in subparagraphs (A) and (C) of section 1861(oo)(2),’’ after ‘‘(2)(G)’’

(e) EFFECTIVE DATE.—The amendments made by this section

shall apply to items and services furnished on or after January

1, 2000.

SEC. 4104. COVERAGE OF COLORECTAL SCREENING.

(a) COVERAGE.— (1) IN GENERAL.—Section 1861 (42 U.S.C. 1395x), as amended by section 4103(a), is amended—

(A) in subsection (s)(2)—

(i) by striking ‘‘and’’ at the end of subparagraph

(P);

(ii) by adding ‘‘and’’ at the end of subparagraph

(Q); and

(iii) by adding at the end the following new

subparagraph:

‘‘(R) colorectal cancer screening tests (as defined in subsection (pp)); and’’; and

(B) by adding at the end the following new subsection:

‘‘Colorectal Cancer Screening Tests

‘‘(pp)(1) The term ‘colorectal cancer screening test’ means any

of the following procedures furnished to an individual for the purpose of early detection of colorectal cancer:

‘‘(A) Screening fecal-occult blood test.
H. R. 2015—113

‘‘(B) Screening flexible sigmoidoscopy.

‘‘(C) In the case of an individual at high risk for colorectal

cancer, screening colonoscopy.

‘‘(D) Such other tests or procedures, and modifications to

tests and procedures under this subsection, with such frequency

and payment limits, as the Secretary determines appropriate,

in consultation with appropriate organizations.

‘‘(2) In paragraph (1)(C), an ‘individual at high risk for colorectal

cancer’ is an individual who, because of family history, prior experience of cancer or precursor neoplastic polyps, a history of chronic

digestive disease condition (including inflammatory bowel disease,

Crohn’s Disease, or ulcerative colitis), the presence of any appropriate recognized gene markers for colorectal cancer, or other predisposing factors, faces a high risk for colorectal cancer.’’.

(2) DEADLINE FOR PUBLICATION OF DETERMINATION ON COVERAGE OF SCREENING BARIUM ENEMA.—Not later than the earlier of the date that is January 1, 1998, or 90 days after

the date of the enactment of this Act, the Secretary of Health

and Human Services shall publish notice in the Federal Register with respect to the determination under paragraph (1)(D)

of section 1861(pp) of the Social Security Act (42 U.S.C.

1395x(pp)), as added by paragraph (1), on the coverage of

a screening barium enema as a colorectal cancer screening

test under such section.

(b) FREQUENCY LIMITS AND PAYMENT.—

(1) IN GENERAL.—Section 1834 (42 U.S.C. 1395m) is amended by inserting after subsection (c) the following new subsection:

‘‘(d) FREQUENCY LIMITS AND PAYMENT FOR COLORECTAL CANCER

SCREENING TESTS.—

‘‘(1) SCREENING FECAL-OCCULT BLOOD TESTS.—

‘‘(A) PAYMENT AMOUNT.—The payment amount for

colorectal cancer screening tests consisting of screening

fecal-occult blood tests is equal to the payment amount

established for diagnostic fecal-occult blood tests under section 1833(h).

‘‘(B) FREQUENCY LIMIT.—No payment may be made

under this part for a colorectal cancer screening test

consisting of a screening fecal-occult blood test—

‘‘(i) if the individual is under 50 years of age;

or

‘‘(ii) if the test is performed within the 11 months

after a previous screening fecal-occult blood test.

‘‘(2) SCREENING FLEXIBLE SIGMOIDOSCOPIES.—

‘‘(A) FEE SCHEDULE.—With respect to colorectal cancer

screening tests consisting of screening flexible

sigmoidoscopies, payment under section 1848 shall be

consistent with payment under such section for similar

or related services.

‘‘(B) PAYMENT LIMIT.—In the case of screening flexible

sigmoidoscopy services, payment under this part shall not

exceed such amount as the Secretary specifies, based upon

the rates recognized for diagnostic flexible sigmoidoscopy

services.

‘‘(C) FACILITY PAYMENT LIMIT.—

‘‘(i) IN GENERAL.—Notwithstanding subsections

(i)(2)(A) and (t) of section 1833, in the case of screening
H. R. 2015—114

flexible sigmoidoscopy services furnished on or after

January 1, 1999, that—

‘‘(I) in accordance with regulations, may be

performed in an ambulatory surgical center and

for which the Secretary permits ambulatory surgical center payments under this part, and

‘‘(II) are performed in an ambulatory surgical

center or hospital outpatient department,

payment under this part shall be based on the lesser

of the amount under the fee schedule that would apply

to such services if they were performed in a hospital

outpatient department in an area or the amount under

the fee schedule that would apply to such services

if they were performed in an ambulatory surgical center in the same area.

‘‘(ii) LIMITATION ON DEDUCTIBLE AND COINSURANCE.—Notwithstanding any other provision of this

title, in the case of a beneficiary who receives the

services described in clause (i)—

‘‘(I) in computing the amount of any applicable

deductible or copayment, the computation of such

deductible or coinsurance shall be based upon the

fee schedule under which payment is made for

the services, and

‘‘(II) the amount of such coinsurance is equal

to 25 percent of the payment amount under the

fee schedule described in subclause (I).

‘‘(D) SPECIAL RULE FOR DETECTED LESIONS.—If during

the course of such screening flexible sigmoidoscopy, a lesion

or growth is detected which results in a biopsy or removal

of the lesion or growth, payment under this part shall

not be made for the screening flexible sigmoidoscopy but

shall be made for the procedure classified as a flexible

sigmoidoscopy with such biopsy or removal.

‘‘(E) FREQUENCY LIMIT.—No payment may be made

under this part for a colorectal cancer screening test

consisting of a screening flexible sigmoidoscopy—

‘‘(i) if the individual is under 50 years of age;

or

‘‘(ii) if the procedure is performed within the 47

months after a previous screening flexible

sigmoidoscopy.

‘‘(3) SCREENING COLONOSCOPY FOR INDIVIDUALS AT HIGH

RISK FOR COLORECTAL CANCER.— ‘‘(A) FEE SCHEDULE.—With respect to colorectal cancer

screening test consisting of a screening colonoscopy for

individuals at high risk for colorectal cancer (as defined

in section 1861(pp)(2)), payment under section 1848 shall

be consistent with payment amounts under such section

for similar or related services.

‘‘(B) PAYMENT LIMIT.—In the case of screening

colonoscopy services, payment under this part shall not

exceed such amount as the Secretary specifies, based upon

the rates recognized for diagnostic colonoscopy services.

‘‘(C) FACILITY PAYMENT LIMIT.—

‘‘(i) IN GENERAL.—Notwithstanding subsections

(i)(2)(A) and (t) of section 1833, in the case of screening
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colonoscopy services furnished on or after January 1,

1999, that are performed in an ambulatory surgical

center or a hospital outpatient department, payment

under this part shall be based on the lesser of the

amount under the fee schedule that would apply to

such services if they were performed in a hospital

outpatient department in an area or the amount under

the fee schedule that would apply to such services

if they were performed in an ambulatory surgical center in the same area.

‘‘(ii) LIMITATION ON DEDUCTIBLE AND COINSURANCE.—Notwithstanding any other provision of this

title, in the case of a beneficiary who receives the

services described in clause (i)—

‘‘(I) in computing the amount of any applicable

deductible or coinsurance, the computation of such

deductible or coinsurance shall be based upon the

fee schedule under which payment is made for

the services, and

‘‘(II) the amount of such coinsurance is equal

to 25 percent of the payment amount under the

fee schedule described in subclause (I).

‘‘(D) SPECIAL RULE FOR DETECTED LESIONS.—If during

the course of such screening colonoscopy, a lesion or growth

is detected which results in a biopsy or removal of the

lesion or growth, payment under this part shall not be

made for the screening colonoscopy but shall be made for

the procedure classified as a colonoscopy with such biopsy

or removal.

‘‘(E) FREQUENCY LIMIT.—No payment may be made

under this part for a colorectal cancer screening test

consisting of a screening colonoscopy for individuals at

high risk for colorectal cancer if the procedure is performed

within the 23 months after a previous screening

colonoscopy.’’.

(c) CONFORMING AMENDMENTS.—(1) Paragraphs (1)(D) and

(2)(D) of section 1833(a) (42 U.S.C. 1395l(a)) are each amended

by inserting ‘‘or section 1834(d)(1)’’ after ‘‘subsection (h)(1)’’.

(2) Section 1833(h)(1)(A) (42 U.S.C. 1395l(h)(1)(A)) is amended

by striking ‘‘The Secretary’’ and inserting ‘‘Subject to section

1834(d)(1), the Secretary’’.

(3) Section 1862(a) (42 U.S.C. 1395y(a)), as amended by section

4103(c), is amended—

(A) in paragraph (1)—

(i) in subparagraph (F), by striking ‘‘and’’ at the end,

(ii) in subparagraph (G), by striking the semicolon

at the end and inserting ‘‘, and’’, and

(iii) by adding at the end the following new subparagraph:

‘‘(H) in the case of colorectal cancer screening tests, which

are performed more frequently than is covered under section

1834(d);’’; and

(B) in paragraph (7), by striking ‘‘or (G)’’ and inserting

‘‘(G), or (H)’’.

(d) PAYMENT UNDER PHYSICIAN FEE SCHEDULE.—Section

1848(j)(3) (42 U.S.C. 1395w–4(j)(3)), as amended by sections 4102

and 4103, is amended by inserting ‘‘(2)(R) (with respect to services
H. R. 2015—116

described in subparagraphs (B) , (C), and (D) of section

1861(pp)(1)),’’ before ‘‘(3)’’.

(e) EFFECTIVE DATE.—The amendments made by this section

shall apply to items and services furnished on or after January

1, 1998.

SEC. 4105. DIABETES SELF-MANAGEMENT BENEFITS.

(a) COVERAGE OF DIABETES OUTPATIENT SELF-MANAGEMENT

TRAINING SERVICES.—

(1) IN GENERAL.—Section 1861 (42 U.S.C. 1395x), as amended by sections 4103(a) and 4104(a), is amended—

(A) in subsection (s)(2)—

(i) by striking ‘‘and’’ at the end of subparagraph

(Q);

(ii) by adding ‘‘and’’ at the end of subparagraph

(R); and

(iii) by adding at the end the following new

subparagraph:

‘‘(S) diabetes outpatient self-management training services

(as defined in subsection (qq)); and’’; and

(B) by adding at the end the following new subsection:

‘‘Diabetes Outpatient Self-Management Training Services

‘‘(qq)(1) The term ‘diabetes outpatient self-management training

services’ means educational and training services furnished (at

such times as the Secretary determines appropriate) to an individual with diabetes by a certified provider (as described in paragraph

(2)(A)) in an outpatient setting by an individual or entity who

meets the quality standards described in paragraph (2)(B), but

only if the physician who is managing the individual’s diabetic

condition certifies that such services are needed under a comprehensive plan of care related to the individual’s diabetic condition to

ensure therapy compliance or to provide the individual with necessary skills and knowledge (including skills related to the selfadministration of injectable drugs) to participate in the management of the individual’s condition.

‘‘(2) In paragraph (1)—

‘‘(A) a ‘certified provider’ is a physician, or other individual

or entity designated by the Secretary, that, in addition to

providing diabetes outpatient self-management training services, provides other items or services for which payment may

be made under this title; and

‘‘(B) a physician, or such other individual or entity, meets

the quality standards described in this paragraph if the physician, or individual or entity, meets quality standards established by the Secretary, except that the physician or other

individual or entity shall be deemed to have met such standards

if the physician or other individual or entity meets applicable

standards originally established by the National Diabetes

Advisory Board and subsequently revised by organizations who

participated in the establishment of standards by such Board,

or is recognized by an organization that represents individuals

(including individuals under this title) with diabetes as meeting

standards for furnishing the services.’’.

(2) PAYMENT UNDER PHYSICIAN FEE SCHEDULE.—Section

1848(j)(3) (42 U.S.C. 1395w–4(j)(3)) as amended in sections
H. R. 2015—117

4102, 4103, and 4104, is amended by inserting ‘‘(2)(S),’’ before

‘‘(3),’’.

(3) CONSULTATION WITH ORGANIZATIONS IN ESTABLISHING

PAYMENT AMOUNTS FOR SERVICES PROVIDED BY PHYSICIANS.—

In establishing payment amounts under section 1848 of the

Social Security Act for physicians’ services consisting of diabetes

outpatient self-management training services, the Secretary of

Health and Human Services shall consult with appropriate

organizations, including such organizations representing

individuals or medicare beneficiaries with diabetes.

(b) BLOOD-TESTING STRIPS FOR INDIVIDUALS WITH DIABETES.—

(1) INCLUDING STRIPS AND MONITORS AS DURABLE MEDICAL

EQUIPMENT.—The first sentence of section 1861(n) (42 U.S.C.

1395x(n)) is amended by inserting before the semicolon the

following: ‘‘, and includes blood-testing strips and blood glucose

monitors for individuals with diabetes without regard to

whether the individual has Type I or Type II diabetes or

to the individual’s use of insulin (as determined under standards established by the Secretary in consultation with the

appropriate organizations)’’.

(2) 10 PERCENT REDUCTION IN PAYMENTS FOR TESTING

STRIPS.—Section 1834(a)(2)(B)(iv) (42 U.S.C. 1395m(a)(2)(B)(iv))

is amended by adding before the period the following: ‘‘(reduced

by 10 percent, in the case of a blood glucose testing strip

furnished after 1997 for an individual with diabetes)’’.

(c) ESTABLISHMENT OF OUTCOME MEASURES FOR BENEFICIARIES

WITH DIABETES.—

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

Services, in consultation with appropriate organizations, shall

establish outcome measures, including glysolated hemoglobin

(past 90-day average blood sugar levels), for purposes of

evaluating the improvement of the health status of medicare

beneficiaries with diabetes mellitus.

(2) RECOMMENDATIONS FOR MODIFICATIONS TO SCREENING

BENEFITS.—Taking into account information on the health status of medicare beneficiaries with diabetes mellitus as measured under the outcome measures established under paragraph

(1), the Secretary shall from time to time submit recommendations to Congress regarding modifications to the coverage of

services for such beneficiaries under the medicare program.

(d) EFFECTIVE DATE.—

(1) IN GENERAL.—Except as provided in paragraph (2), the

amendments made by this section shall apply to items and

services furnished on or after July 1, 1998.

(2) TESTING STRIPS.—The amendment made by subsection

(b)(2) shall apply with respect to blood glucose testing strips

furnished on or after January 1, 1998.

SEC. 4106. STANDARDIZATION OF MEDICARE COVERAGE OF BONE

MASS MEASUREMENTS.

(a) IN GENERAL.—Section 1861 (42 U.S.C. 1395x), as amended

by sections 4103(a), 4104(a), and 4105(a), is amended—

(1) in subsection (s)—

(A) in paragraph (12)(C), by striking ‘‘and’’ at the end,

(B) by striking the period at the end of paragraph

(14) and inserting ‘‘; and’’,
H. R. 2015—118

(C) by redesignating paragraphs (15) and (16) as paragraphs (16) and (17), respectively, and

(D) by inserting after paragraph (14) the following

new paragraph:

‘‘(15) bone mass measurement (as defined in subsection

(rr)).’’; and

(2) by inserting after subsection (qq) the following new

subsection:

‘‘Bone Mass Measurement

‘‘(rr)(1) The term ‘bone mass measurement’ means a radiologic

or radioisotopic procedure or other procedure approved by the Food

and Drug Administration performed on a qualified individual (as

defined in paragraph (2)) for the purpose of identifying bone mass

or detecting bone loss or determining bone quality, and includes

a physician’s interpretation of the results of the procedure.

‘‘(2) For purposes of this subsection, the term ‘qualified individual’ means an individual who is (in accordance with regulations

prescribed by the Secretary)—

‘‘(A) an estrogen-deficient woman at clinical risk for

osteoporosis;

‘‘(B) an individual with vertebral abnormalities;

‘‘(C) an individual receiving long-term glucocorticoid steroid

therapy;

‘‘(D) an individual with primary hyperparathyroidism; or

‘‘(E) an individual being monitored to assess the response

to or efficacy of an approved osteoporosis drug therapy.

‘‘(3) The Secretary shall establish such standards regarding

the frequency with which a qualified individual shall be eligible

to be provided benefits for bone mass measurement under this

title.’’.

(b) PAYMENT UNDER PHYSICIAN FEE SCHEDULE.—Section

1848(j)(3) (42 U.S.C. 1395w–4(j)(3)), as amended by sections 4102,

4103, 4104 and 4105, is amended—

(1) by striking ‘‘(4) and (14)’’ and inserting ‘‘(4), (14)’’ and

(2) by inserting ‘‘and (15)’’ after ‘‘1861(nn)(2))’’.

(c) CONFORMING AMENDMENTS.—Sections 1864(a),

1902(a)(9)(C), and 1915(a)(1)(B)(ii)(I) (42 U.S.C. 1395aa(a),

1396a(a)(9)(C), and 1396n(a)(1)(B)(ii)(I)) are amended by striking

‘‘paragraphs (15) and (16)’’ each place it appears and inserting

‘‘paragraphs (16) and (17)’’.

(d) EFFECTIVE DATE.—The amendments made by this section

shall apply to bone mass measurements performed on or after

July 1, 1998.

SEC. 4107. VACCINES OUTREACH EXPANSION.

(a) EXTENSION OF INFLUENZA AND PNEUMOCOCCAL VACCINATION

CAMPAIGN.—In order to increase utilization of pneumococcal and

influenza vaccines in medicare beneficiaries, the Influenza and

Pneumococcal Vaccination Campaign carried out by the Health

Care Financing Administration in conjunction with the Centers

for Disease Control and Prevention and the National Coalition

for Adult Immunization, is extended until the end of fiscal year

2002.

(b) AUTHORIZATION OF APPROPRIATION.—There are hereby

authorized to be appropriated for each of fiscal years 1998 through

2002, $8,000,000 for the Campaign described in subsection (a).
H. R. 2015—119

Of the amount so authorized to be appropriated in each fiscal

year, 60 percent of the amount so appropriated shall be payable

from the Federal Hospital Insurance Trust Fund, and 40 percent

shall be payable from the Federal Supplementary Medical Insurance

Trust Fund.

SEC. 4108. STUDY ON PREVENTIVE AND ENHANCED BENEFITS.

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

request the National Academy of Sciences, and as appropriate in

conjunction with the United States Preventive Services Task Force,

to analyze the expansion or modification of preventive or other

benefits provided to medicare beneficiaries under title XVIII of

the Social Security Act. The analysis shall consider both the short

term and long term benefits, and costs to the medicare program,

of such expansion or modification.

(b) REPORT.—

(1) INITIAL REPORT.—Not later than 2 years after the date

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

report on the findings of the analysis conducted under subsection (a) to the Committee on Ways and Means and the

Committee on Commerce of the House of Representatives and

the Committee on Finance of the Senate.

(2) CONTENTS.—Such report shall include specific findings

with respect to coverage of at least the following benefits:

(A) Nutrition therapy services, including parenteral

and enteral nutrition and including the provision of such

services by a registered dietitian.

(B) Skin cancer screening.

(C) Medically necessary dental care.

(D) Routine patient care costs for beneficiaries enrolled

in approved clinical trial programs.

(E) Elimination of time limitation for coverage of

immunosuppressive drugs for transplant patients.

(3) FUNDING.—From funds appropriated to the Department

of Health and Human Services for fiscal years 1998 and 1999,

the Secretary shall provide for such funding as the Secretary

determines necessary for the conduct of the study by the

National Academy of Sciences under this section.

Subtitle C—Rural Initiatives

SEC. 4201. MEDICARE RURAL HOSPITAL FLEXIBILITY PROGRAM.

(a) MEDICARE RURAL HOSPITAL FLEXIBILITY PROGRAM.—Section

1820 (42 U.S.C. 1395i–4) is amended to read as follows:

‘‘MEDICARE RURAL HOSPITAL FLEXIBILITY PROGRAM

‘‘SEC. 1820. (a) ESTABLISHMENT.—Any State that submits an

application in accordance with subsection (b) may establish a medicare rural hospital flexibility program described in subsection (c).

‘‘(b) APPLICATION.—A State may establish a medicare rural

hospital flexibility program described in subsection (c) if the State

submits to the Secretary at such time and in such form as the

Secretary may require an application containing—

‘‘(1) assurances that the State—

‘‘(A) has developed, or is in the process of developing,

a State rural health care plan that—
H. R. 2015—120

‘‘(i) provides for the creation of 1 or more rural

health networks (as defined in subsection (d)) in the

State;

‘‘(ii) promotes regionalization of rural health services in the State; and

‘‘(iii) improves access to hospital and other health

services for rural residents of the State; and

‘‘(B) has developed the rural health care plan described

in subparagraph (A) in consultation with the hospital

association of the State, rural hospitals located in the State,

and the State Office of Rural Health (or, in the case of

a State in the process of developing such plan, that assures

the Secretary that the State will consult with its State

hospital association, rural hospitals located in the State,

and the State Office of Rural Health in developing such

plan);

‘‘(2) assurances that the State has designated (consistent

with the rural health care plan described in paragraph (1)(A)),

or is in the process of so designating, rural nonprofit or public

hospitals or facilities located in the State as critical access

hospitals; and

‘‘(3) such other information and assurances as the Secretary

may require.

‘‘(c) MEDICARE RURAL HOSPITAL FLEXIBILITY PROGRAM

DESCRIBED.—

‘‘(1) IN GENERAL.—A State that has submitted an application in accordance with subsection (b), may establish a medicare

rural hospital flexibility program that provides that—

‘‘(A) the State shall develop at least 1 rural health

network (as defined in subsection (d)) in the State; and

‘‘(B) at least 1 facility in the State shall be designated

as a critical access hospital in accordance with paragraph

(2).

‘‘(2) STATE DESIGNATION OF FACILITIES.—

‘‘(A) IN GENERAL.—A State may designate 1 or more

facilities as a critical access hospital in accordance with

subparagraph (B).

‘‘(B) CRITERIA FOR DESIGNATION AS CRITICAL ACCESS

HOSPITAL.—A State may designate a facility as a critical

access hospital if the facility—

‘‘(i) is a nonprofit or public hospital and is located

in a county (or equivalent unit of local government)

in a rural area (as defined in section 1886(d)(2)(D))

that—

‘‘(I) is located more than a 35-mile drive (or,

in the case of mountainous terrain or in areas

with only secondary roads available, a 15-mile

drive) from a hospital, or another facility described

in this subsection; or

‘‘(II) is certified by the State as being a necessary provider of health care services to residents

in the area;

‘‘(ii) makes available 24-hour emergency care services that a State determines are necessary for ensuring

access to emergency care services in each area served

by a critical access hospital;
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‘‘(iii) provides not more than 15 (or, in the case

of a facility under an agreement described in subsection

(f), 25) acute care inpatient beds (meeting such standards as the Secretary may establish) for providing

inpatient care for a period not to exceed 96 hours

(unless a longer period is required because transfer

to a hospital is precluded because of inclement weather

or other emergency conditions), except that a peer

review organization or equivalent entity may, on

request, waive the 96-hour restriction on a case-bycase basis;

‘‘(iv) meets such staffing requirements as would

apply under section 1861(e) to a hospital located in

a rural area, except that—

‘‘(I) the facility need not meet hospital standards relating to the number of hours during a

day, or days during a week, in which the facility

must be open and fully staffed, except insofar as

the facility is required to make available emergency care services as determined under clause

(ii) and must have nursing services available on

a 24-hour basis, but need not otherwise staff the

facility except when an inpatient is present;

‘‘(II) the facility may provide any services

otherwise required to be provided by a full-time,

on site dietitian, pharmacist, laboratory technician,

medical technologist, and radiological technologist

on a part-time, off site basis under arrangements

as defined in section 1861(w)(1); and

‘‘(III) the inpatient care described in clause

(iii) may be provided by a physician assistant,

nurse practitioner, or clinical nurse specialist subject to the oversight of a physician who need not

be present in the facility; and

‘‘(v) meets the requirements of section

1861(aa)(2)(I).

‘‘(d) DEFINITION OF RURAL HEALTH NETWORK.—

‘‘(1) IN GENERAL.—In this section, the term ‘rural health

network’ means, with respect to a State, an organization

consisting of—

‘‘(A) at least 1 facility that the State has designated

or plans to designate as a critical access hospital; and

‘‘(B) at least 1 hospital that furnishes acute care services.

‘‘(2) AGREEMENTS.—

‘‘(A) IN GENERAL.—Each critical access hospital that

is a member of a rural health network shall have an

agreement with respect to each item described in subparagraph (B) with at least 1 hospital that is a member of

the network.

‘‘(B) ITEMS DESCRIBED.—The items described in this

subparagraph are the following:

‘‘(i) Patient referral and transfer.

‘‘(ii) The development and use of communications

systems including (where feasible)—

‘‘(I) telemetry systems; and
H. R. 2015—122

‘‘(II) systems for electronic sharing of patient

data.

‘‘(iii) The provision of emergency and non-emergency transportation among the facility and the hospital.

‘‘(C) CREDENTIALING AND QUALITY ASSURANCE.—Each

critical access hospital that is a member of a rural health

network shall have an agreement with respect to

credentialing and quality assurance with at least—

‘‘(i) 1 hospital that is a member of the network;

‘‘(ii) 1 peer review organization or equivalent

entity; or

‘‘(iii) 1 other appropriate and qualified entity

identified in the State rural health care plan.

‘‘(e) CERTIFICATION BY THE SECRETARY.—The Secretary shall

certify a facility as a critical access hospital if the facility—

‘‘(1) is located in a State that has established a medicare

rural hospital flexibility program in accordance with subsection

(c);

‘‘(2) is designated as a critical access hospital by the State

in which it is located; and

‘‘(3) meets such other criteria as the Secretary may require.

‘‘(f) PERMITTING MAINTENANCE OF SWING BEDS.—Nothing in

this section shall be construed to prohibit a State from designating

or the Secretary from certifying a facility as a critical access hospital

solely because, at the time the facility applies to the State for

designation as a critical access hospital, there is in effect an agreement between the facility and the Secretary under section 1883

under which the facility’s inpatient hospital facilities are used for

the provision of extended care services, so long as the total number

of beds that may be used at any time for the furnishing of either

such services or acute care inpatient services does not exceed 25

beds and the number of beds used at any time for acute care

inpatient services does not exceed 15 beds. For purposes of the

previous sentence, any bed of a unit of the facility that is licensed

as a distinct-part skilled nursing facility at the time the facility

applies to the State for designation as a critical access hospital

shall not be counted.

‘‘(g) GRANTS.— ‘‘(1) MEDICARE RURAL HOSPITAL FLEXIBILITY PROGRAM.— The Secretary may award grants to States that have submitted

applications in accordance with subsection (b) for—

‘‘(A) engaging in activities relating to planning and

implementing a rural health care plan;

‘‘(B) engaging in activities relating to planning and

implementing rural health networks; and

‘‘(C) designating facilities as critical access hospitals.

‘‘(2) RURAL EMERGENCY MEDICAL SERVICES.—

‘‘(A) IN GENERAL.—The Secretary may award grants

to States that have submitted applications in accordance

with subparagraph (B) for the establishment or expansion

of a program for the provision of rural emergency medical

services.

‘‘(B) APPLICATION.—An application is in accordance

with this subparagraph if the State submits to the Secretary at such time and in such form as the Secretary

may require an application containing the assurances
H. R. 2015—123

described in subparagraphs (A)(ii), (A)(iii), and (B) of subsection (b)(1) and paragraph (3) of that subsection.

‘‘(h) GRANDFATHERING OF CERTAIN FACILITIES.— ‘‘(1) IN GENERAL.—Any medical assistance facility operating

in Montana and any rural primary care hospital designated

by the Secretary under this section prior to the date of the

enactment of the Balanced Budget Act of 1997 shall be deemed

to have been certified by the Secretary under subsection (e)

as a critical access hospital if such facility or hospital is otherwise eligible to be designated by the State as a critical access

hospital under subsection (c).

‘‘(2) CONTINUATION OF MEDICAL ASSISTANCE FACILITY AND

RURAL PRIMARY CARE HOSPITAL TERMS.—Notwithstanding any

other provision of this title, with respect to any medical assistance facility or rural primary care hospital described in paragraph (1), any reference in this title to a ‘critical access hospital’

shall be deemed to be a reference to a ‘medical assistance

facility’ or ‘rural primary care hospital’.

‘‘(i) WAIVER OF CONFLICTING PART A PROVISIONS.—The Secretary is authorized to waive such provisions of this part and

part D as are necessary to conduct the program established under

this section.

‘‘(j) AUTHORIZATION OF APPROPRIATIONS.—There are authorized

to be appropriated from the Federal Hospital Insurance Trust Fund

for making grants to all States under subsection (g), $25,000,000

in each of the fiscal years 1998 through 2002.’’.

(b) REPORT ON ALTERNATIVE TO 96-HOUR RULE.—Not later

than June 1, 1998, the Secretary of Health and Human Services

shall submit to Congress a report on the feasibility of, and administrative requirements necessary to establish an alternative for certain medical diagnoses (as determined by the Secretary) to the

96-hour limitation for inpatient care in critical access hospitals

required by section 1820(c)(2)(B)(iii) of the Social Security Act (42

U.S.C. 1395i–4(c)(2)(B)(iii)), as added by subsection (a) of this section.

(c) CONFORMING AMENDMENTS RELATING TO RURAL PRIMARY

CARE HOSPITALS AND CRITICAL ACCESS HOSPITALS.— (1) IN GENERAL.—Title XI of the Social Security Act (42

U.S.C. 1301 et seq.) and title XVIII of that Act (42 U.S.C.

1395 et seq.) are each amended by striking ‘‘rural primary

care’’ each place it appears and inserting ‘‘critical access’’.

(2) DEFINITIONS.—Section 1861(mm) of the Social Security

Act (42 U.S.C. 1395x(mm)) is amended to read as follows:

‘‘CRITICAL ACCESS HOSPITAL; CRITICAL ACCESS HOSPITAL SERVICES

‘‘(mm)(1) The term ‘critical access hospital’ means a facility

certified by the Secretary as a critical access hospital under section

1820(e).

‘‘(2) The term ‘inpatient critical access hospital services’ means

items and services, furnished to an inpatient of a critical access

hospital by such facility, that would be inpatient hospital services

if furnished to an inpatient of a hospital by a hospital.

‘‘(3) The term ‘outpatient critical access hospital services’ means

medical and other health services furnished by a critical access

hospital on an outpatient basis.’’.

(3) PART A PAYMENT.—Section 1814 of the Social Security

Act (42 U.S.C. 1395f) is amended—
H. R. 2015—124

(A) in subsection (a)(8), by striking ‘‘72’’ and inserting

‘‘96’’; and

(B) by amending subsection (l) to read as follows:

‘‘Payment for Inpatient Critical Access Hospital Services

‘‘(l) The amount of payment under this part for inpatient critical

access hospital services is the reasonable costs of the critical access

hospital in providing such services.’’.

(4) PAYMENT CONTINUED TO DESIGNATED EACHS.—Section

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

1395ww(d)(5)(D)) is amended—

(A) in clause (iii)(III), by inserting ‘‘as in effect on

September 30, 1997’’ before the period at the end; and

(B) in clause (v)—

(i) by inserting ‘‘as in effect on September 30,

1997’’ after ‘‘1820(i)(1)’’; and

(ii) by striking ‘‘1820(g)’’ and inserting ‘‘1820(d)’’.

(5) PART B PAYMENT.—Section 1834(g) of the Social Security

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

‘‘(g) PAYMENT FOR OUTPATIENT CRITICAL ACCESS HOSPITAL

SERVICES.—The amount of payment under this part for outpatient

critical access hospital services is the reasonable costs of the critical

access hospital in providing such services.’’.

(6) TRANSITION FOR MAF.—

(A) IN GENERAL.—The Secretary of Health and Human

Services shall provide for an appropriate transition for

a facility that, as of the date of the enactment of this

Act, operated as a limited service rural hospital under

a demonstration described in section 4008(i)(1) of the Omnibus Budget Reconciliation Act of 1990 (42 U.S.C. 1395b–

1 note) from such demonstration to the program established

under subsection (a). At the conclusion of the transition

period described in subparagraph (B), the Secretary shall

end such demonstration.

(B) TRANSITION PERIOD DESCRIBED.— (i) INITIAL PERIOD.—Subject to clause (ii), the

transition period described in this subparagraph is the

period beginning on the date of the enactment of this

Act and ending on October 1, 1998.

(ii) EXTENSION.—If the Secretary determines that

the transition is not complete as of October 1, 1998,

the Secretary shall provide for an appropriate extension of the transition period.

(d) EFFECTIVE DATE.—The amendments made by this section

shall apply to services furnished on or after October 1, 1997.

SEC. 4202. PROHIBITING DENIAL OF REQUEST BY RURAL REFERRAL

CENTERS FOR RECLASSIFICATION ON BASIS OF COMPARABILITY OF WAGES.

(a) IN GENERAL.—Section 1886(d)(10)(D) (42 U.S.C.

1395ww(d)(10)(D)) is amended—

(1) by redesignating clause (iii) as clause (iv); and

(2) by inserting after clause (ii) the following new clause:

‘‘(iii) Under the guidelines published by the Secretary under

clause (i), in the case of a hospital which has ever been classified

by the Secretary as a rural referral center under paragraph (5)(C),

the Board may not reject the application of the hospital under
H. R. 2015—125

this paragraph on the basis of any comparison between the average

hourly wage of the hospital and the average hourly wage of hospitals

in the area in which it is located.’’.

(b) CONTINUING TREATMENT OF PREVIOUSLY DESIGNATED CEN- TERS.— (1) IN GENERAL.—Any hospital classified as a rural referral

center by the Secretary of Health and Human Services under

section 1886(d)(5)(C) of the Social Security Act for fiscal year

1991 shall be classified as such a rural referral center for

fiscal year 1998 and each subsequent fiscal year.

(2) BUDGET NEUTRALITY.—The provisions of section

1886(d)(8)(D) of the Social Security Act shall apply to reclassifications made pursuant to paragraph (1) in the same manner

as such provisions apply to a reclassification under section

1886(d)(10) of such Act.

SEC. 4203. HOSPITAL GEOGRAPHIC RECLASSIFICATION PERMITTED

FOR PURPOSES OF DISPROPORTIONATE SHARE PAYMENT ADJUSTMENTS.

(a) IN GENERAL.—For the period described in subsection (c),

the Medicare Geographic Classification Review Board shall consider

the application under section 1886(d)(10)(C)(i) of the Social Security

Act (42 U.S.C. 1395ww(d)(10)(C)(i)) of a hospital described in

1886(d)(1)(B) of such Act (42 U.S.C. 1395ww(d)(1)(B)) to change

the hospital’s geographic classification for purposes of determining

for a fiscal year eligibility for and amount of additional payment

amounts under section 1886(d)(5)(F) of such Act (42 U.S.C.

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

(b) APPLICABLE GUIDELINES.—The Medicare Geographic Classification Review Board shall apply the guidelines established for

reclassification under subclause (I) of section 1886(d)(10)(C)(i) of

such Act to reclassification by reason of subsection (a) until the

Secretary of Health and Human Services promulgates separate

guidelines for such reclassification.

(c) PERIOD DESCRIBED.—The period described in this subsection

is the period beginning on the date of the enactment of this Act

and ending 30 months after such date.

SEC. 4204. MEDICARE-DEPENDENT, SMALL RURAL HOSPITAL PAYMENT

EXTENSION.

(a) SPECIAL TREATMENT EXTENDED.— (1) PAYMENT METHODOLOGY.—Section 1886(d)(5)(G) (42

U.S.C. 1395ww(d)(5)(G)) is amended—

(A) in clause (i), by striking ‘‘October 1, 1994,’’ and

inserting ‘‘October 1, 1994, or beginning on or after October

1, 1997, and before October 1, 2001,’’; and

(B) in clause (ii)(II), by striking ‘‘October 1, 1994,’’

and inserting ‘‘October 1, 1994, or beginning on or after

October 1, 1997, and before October 1, 2001,’’.

(2) EXTENSION OF TARGET AMOUNT.—Section 1886(b)(3)(D)

(42 U.S.C. 1395ww(b)(3)(D)) is amended—

(A) in the matter preceding clause (i), by striking

‘‘September 30, 1994,’’ and inserting ‘‘September 30, 1994,

and for cost reporting periods beginning on or after October

1, 1997, and before October 1, 2001,’’;

(B) in clause (ii), by striking ‘‘and’’ at the end;

(C) in clause (iii), by striking the period at the end

and inserting ‘‘, and’’; and
H. R. 2015—126

(D) by adding after clause (iii) the following new clause:

‘‘(iv) with respect to discharges occurring during fiscal year

1998 through fiscal year 2000, the target amount for the preceding year increased by the applicable percentage increase under

subparagraph (B)(iv).’’.

(3) PERMITTING HOSPITALS TO DECLINE RECLASSIFICATION.—

Section 13501(e)(2) of OBRA–93 (42 U.S.C. 1395ww note) is

amended by striking ‘‘or fiscal year 1994’’ and inserting ‘‘,

fiscal year 1994, fiscal year 1998, fiscal year 1999, or fiscal

year 2000’’.

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

(a) shall apply with respect to discharges occurring on or after

October 1, 1997.

SEC. 4205. RURAL HEALTH CLINIC SERVICES.

(a) PER-VISIT PAYMENT LIMITS FOR PROVIDER-BASED CLINICS.—

(1) EXTENSION OF LIMIT.—

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

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

striking ‘‘independent rural health clinics’’ and inserting

‘‘rural health clinics (other than such clinics in rural hospitals with less than 50 beds)’’.

(B) EFFECTIVE DATE.—The amendment made by

subparagraph (A) applies to services furnished on or after

January 1, 1998.

(2) TECHNICAL CLARIFICATION.—Section 1833(f)(1) (42

U.S.C. 1395l(f)(1)) is amended by inserting ‘‘per visit’’ after

‘‘$46’’.

(b) ASSURANCE OF QUALITY SERVICES.—

(1) IN GENERAL.—Subparagraph (I) of the first sentence

of section 1861(aa)(2) (42 U.S.C. 1395x(aa)(2)) is amended to

read as follows:

‘‘(I) has a quality assessment and performance improvement program, and appropriate procedures for review of

utilization of clinic services, as the Secretary may specify,’’.

(2) EFFECTIVE DATE.—The amendment made by paragraph

(1) shall take effect on January 1, 1998.

(c) WAIVER OF CERTAIN STAFFING REQUIREMENTS LIMITED TO

CLINICS IN PROGRAM.—

(1) IN GENERAL.—Section 1861(aa)(7)(B) (42 U.S.C.

1395x(aa)(7)(B)) is amended by inserting before the period ‘‘,

or if the facility has not yet been determined to meet the

requirements (including subparagraph (J) of the first sentence

of paragraph (2)) of a rural health clinic’’.

(2) EFFECTIVE DATE.—The amendment made by paragraph

(1) applies to waiver requests made on or after January 1,

1998.

(d) REFINEMENT OF SHORTAGE AREA REQUIREMENTS.—

(1) DESIGNATION REVIEWED TRIENNIALLY.—Section

1861(aa)(2) (42 U.S.C. 1395x(aa)(2)) is amended in the second

sentence, in the matter in clause (i) preceding subclause (I)—

(A) by striking ‘‘and that is designated’’ and inserting

‘‘and that, within the previous 3-year period, has been

designated’’; and

(B) by striking ‘‘or that is designated’’ and inserting

‘‘or designated’’.
H. R. 2015—127

(2) AREA MUST HAVE SHORTAGE OF HEALTH CARE

PRACTITIONERS.—Section 1861(aa)(2) (42 U.S.C. 1395x(aa)(2)),

as amended by paragraph (1), is further amended in the second

sentence, in the matter in clause (i) preceding subclause (I)—

(A) by striking the comma after ‘‘personal health services’’; and

(B) by inserting ‘‘and in which there are insufficient

numbers of needed health care practitioners (as determined

by the Secretary),’’ after ‘‘Bureau of the Census)’’.

(3) PREVIOUSLY QUALIFYING CLINICS GRANDFATHERED ONLY

TO PREVENT SHORTAGE.—

(A) IN GENERAL.—Section 1861(aa)(2) of the Social

Security Act (42 U.S.C. 1395x(aa)(2)) is amended in the

third sentence by inserting before the period ‘‘if it is determined, in accordance with criteria established by the Secretary in regulations, to be essential to the delivery of

primary care services that would otherwise be unavailable

in the geographic area served by the clinic’’.

(B) PAYMENT FOR CERTAIN PHYSICIAN ASSISTANT SERVICES.—Section 1842(b)(6)(C) (42 U.S.C. 1395u(b)(6)(C)) is

amended to read as follows: ‘‘(C) in the case of services

described in clause (i) of section 1861(s)(2)(K), payment

shall be made to either (i) the employer of the physician

assistant involved, or (ii) with respect to a physician assistant who was the owner of a rural health clinic (as described

in section 1861(aa)(2)) for a continuous period beginning

prior to the date of the enactment of the Balanced Budget

Act of 1997 and ending on the date that the Secretary

determines such rural health clinic no longer meets the

requirements of section 1861(aa)(2), for such services provided before January 1, 2003, payment may be made

directly to the physician assistant; and’’.

(4) EFFECTIVE DATES; IMPLEMENTING REGULATIONS.— (A) IN GENERAL.—Except as otherwise provided, the

amendments made by the preceding paragraphs take effect

on the date of the enactment of this Act.

(B) CURRENT RURAL HEALTH CLINICS.—The amendments made by the preceding paragraphs take effect, with

respect to entities that are rural health clinics under title

XVIII of the Social Security Act (42 U.S.C. 1395 et seq.)

on the date of enactment of this Act, on the date of the

enactment of this Act.

(C) GRANDFATHERED CLINICS.— (i) IN GENERAL.—The amendment made by paragraph (3)(A) shall take effect on the effective date

of regulations issued by the Secretary under clause

(ii).

(ii) REGULATIONS.—The Secretary shall issue final

regulations implementing paragraph (3)(A) that shall

take effect no later than January 1, 1999.

SEC. 4206. MEDICARE REIMBURSEMENT FOR TELEHEALTH SERVICES.

(a) IN GENERAL.—Not later than January 1, 1999, the Secretary

of Health and Human Services shall make payments from the

Federal Supplementary Medical Insurance Trust Fund under part

B of title XVIII of the Social Security Act (42 U.S.C. 1395j et

seq.) in accordance with the methodology described in subsection
H. R. 2015—128

(b) for professional consultation via telecommunications systems

with a physician (as defined in section 1861(r) of such Act (42

U.S.C. 1395x(r)) or a practitioner (described in section

1842(b)(18)(C) of such Act (42 U.S.C. 1395u(b)(18)(C)) furnishing

a service for which payment may be made under such part to

a beneficiary under the medicare program residing in a county

in a rural area (as defined in section 1886(d)(2)(D) of such Act

(42 U.S.C. 1395ww(d)(2)(D))) that is designated as a health professional shortage area under section 332(a)(1)(A) of the Public Health

Service Act (42 U.S.C. 254e(a)(1)(A)), notwithstanding that the

individual physician or practitioner providing the professional consultation is not at the same location as the physician or practitioner

furnishing the service to that beneficiary.

(b) METHODOLOGY FOR DETERMINING AMOUNT OF PAYMENTS.—

Taking into account the findings of the report required under section

192 of the Health Insurance Portability and Accountability Act

of 1996 (Public Law 104–191; 110 Stat. 1988), the findings of

the report required under paragraph (c), and any other findings

related to the clinical efficacy and cost-effectiveness of telehealth

applications, the Secretary shall establish a methodology for determining the amount of payments made under subsection (a) within

the following parameters:

(1) The payment shall shared between the referring physician or practitioner and the consulting physician or practitioner.

The amount of such payment shall not be greater than the

current fee schedule of the consulting physician or practitioner

for the health care services provided.

(2) The payment shall not include any reimbursement for

any telephone line charges or any facility fees, and a beneficiary

may not be billed for any such charges or fees.

(3) The payment shall be made subject to the coinsurance

and deductible requirements under subsections (a)(1) and (b)

of section 1833 of the Social Security Act (42 U.S.C. 1395l).

(4) The payment differential of section 1848(a)(3) of such

Act (42 U.S.C. 1395w–4(a)(3)) shall apply to services furnished

by non-participating physicians. The provisions of section

1848(g) of such Act (42 U.S.C. 1395w–4(g)) and section

1842(b)(18) of such Act (42 U.S.C. 1395u(b)(18)) shall apply.

Payment for such service shall be increased annually by the

update factor for physicians’ services determined under section

1848(d) of such Act (42 U.S.C. 1395w–4(d)).

(c) SUPPLEMENTAL REPORT.—Not later than January 1, 1999,

the Secretary shall submit a report to Congress which shall contain

a detailed analysis of—

(1) how telemedicine and telehealth systems are expanding

access to health care services;

(2) the clinical efficacy and cost-effectiveness of telemedicine and telehealth applications;

(3) the quality of telemedicine and telehealth services delivered; and

(4) the reasonable cost of telecommunications charges

incurred in practicing telemedicine and telehealth in rural,

frontier, and underserved areas.

(d) EXPANSION OF TELEHEALTH SERVICES FOR CERTAIN MEDICARE BENEFICIARIES.—

(1) IN GENERAL.—Not later than January 1, 1999, the Secretary shall submit a report to Congress that examines the
H. R. 2015—129

possibility of making payments from the Federal Supplementary Medical Insurance Trust Fund under part B of title

XVIII of the Social Security Act (42 U.S.C. 1395j et seq.) for

professional consultation via telecommunications systems with

such a physician or practitioner furnishing a service for which

payment may be made under such part to a beneficiary

described in paragraph (2), notwithstanding that the individual

physician or practitioner providing the professional consultation

is not at the same location as the physician or practitioner

furnishing the service to that beneficiary.

(2) BENEFICIARY DESCRIBED.—A beneficiary described in

this paragraph is a beneficiary under the medicare program

under title XVIII of the Social Security Act (42 U.S.C. 1395

et seq.) who does not reside in a rural area (as so defined)

that is designated as a health professional shortage area under

section 332(a)(1)(A) of the Public Health Service Act (42 U.S.C.

254e(a)(1)(A)), who is homebound or nursing homebound, and

for whom being transferred for health care services imposes

a serious hardship.

(3) REPORT.—The report described in paragraph (1) shall

contain a detailed statement of the potential costs and savings

to the medicare program of making the payments described

in that paragraph using various reimbursement schemes.

SEC. 4207. INFORMATICS, TELEMEDICINE, AND EDUCATION DEMONSTRATION PROJECT.

(a) PURPOSE AND AUTHORIZATION.—

(1) IN GENERAL.—Not later than 9 months after the date

of enactment of this section, the Secretary of Health and Human

Services shall provide for a demonstration project described

in paragraph (2).

(2) DESCRIPTION OF PROJECT.— (A) IN GENERAL.—The demonstration project described

in this paragraph is a single demonstration project to use

eligible health care provider telemedicine networks to apply

high-capacity computing and advanced networks to improve

primary care (and prevent health care complications) to

medicare beneficiaries with diabetes mellitus who are residents of medically underserved rural areas or residents

of medically underserved inner-city areas.

(B) MEDICALLY UNDERSERVED DEFINED.—As used in

this paragraph, the term ‘‘medically underserved’’ has the

meaning given such term in section 330(b)(3) of the Public

Health Service Act (42 U.S.C. 254b(b)(3)).

(3) WAIVER.—The Secretary shall waive such provisions

of title XVIII of the Social Security Act as may be necessary

to provide for payment for services under the project in accordance with subsection (d).

(4) DURATION OF PROJECT.—The project shall be conducted

over a 4-year period.

(b) OBJECTIVES OF PROJECT.—The objectives of the project

include the following:

(1) Improving patient access to and compliance with appropriate care guidelines for individuals with diabetes mellitus

through direct telecommunications link with information networks in order to improve patient quality-of-life and reduce

overall health care costs.
H. R. 2015—130

(2) Developing a curriculum to train health professionals

(particularly primary care health professionals) in the use of

medical informatics and telecommunications.

(3) Demonstrating the application of advanced technologies,

such as video-conferencing from a patient’s home, remote monitoring of a patient’s medical condition, interventional

informatics, and applying individualized, automated care guidelines, to assist primary care providers in assisting patients

with diabetes in a home setting.

(4) Application of medical informatics to residents with

limited English language skills.

(5) Developing standards in the application of telemedicine

and medical informatics.

(6) Developing a model for the cost-effective delivery of

primary and related care both in a managed care environment

and in a fee-for-service environment.

(c) ELIGIBLE HEALTH CARE PROVIDER TELEMEDICINE NETWORK

DEFINED.—For purposes of this section, the term ‘‘eligible health

care provider telemedicine network’’ means a consortium that

includes at least one tertiary care hospital (but no more than

2 such hospitals), at least one medical school, no more than 4

facilities in rural or urban areas, and at least one regional telecommunications provider and that meets the following requirements:

(1) The consortium is located in an area with a high concentration of medical schools and tertiary care facilities in

the United States and has appropriate arrangements (within

or outside the consortium) with such schools and facilities,

universities, and telecommunications providers, in order to conduct the project.

(2) The consortium submits to the Secretary an application

at such time, in such manner, and containing such information

as the Secretary may require, including a description of the

use to which the consortium would apply any amounts received

under the project and the source and amount of non-Federal

funds used in the project.

(3) The consortium guarantees that it will be responsible

for payment for all costs of the project that are not paid under

this section and that the maximum amount of payment that

may be made to the consortium under this section shall not

exceed the amount specified in subsection (d)(3).

(d) COVERAGE AS MEDICARE PART B SERVICES.—

(1) IN GENERAL.—Subject to the succeeding provisions of

this subsection, services related to the treatment or management of (including prevention of complications from) diabetes

for medicare beneficiaries furnished under the project shall

be considered to be services covered under part B of title

XVIII of the Social Security Act.

(2) PAYMENTS.—

(A) IN GENERAL.—Subject to paragraph (3), payment

for such services shall be made at a rate of 50 percent

of the costs that are reasonable and related to the provision

of such services. In computing such costs, the Secretary

shall include costs described in subparagraph (B), but may

not include costs described in subparagraph (C).
H. R. 2015—131

(B) COSTS THAT MAY BE INCLUDED.—The costs

described in this subparagraph are the permissible costs

(as recognized by the Secretary) for the following:

(i) The acquisition of telemedicine equipment for

use in patients’ homes (but only in the case of patients

located in medically underserved areas).

(ii) Curriculum development and training of health

professionals in medical informatics and telemedicine.

(iii) Payment of telecommunications costs (including salaries and maintenance of equipment), including

costs of telecommunications between patients’ homes

and the eligible network and between the network

and other entities under the arrangements described

in subsection (c)(1).

(iv) Payments to practitioners and providers under

the medicare programs.

(C) COSTS NOT INCLUDED.—The costs described in this

subparagraph are costs for any of the following:

(i) The purchase or installation of transmission

equipment (other than such equipment used by health

professionals to deliver medical informatics services

under the project).

(ii) The establishment or operation of a telecommunications common carrier network.

(iii) Construction (except for minor renovations

related to the installation of reimbursable equipment)

or the acquisition or building of real property.

(3) LIMITATION.—The total amount of the payments that

may be made under this section shall not exceed $30,000,000

for the period of the project (described in subsection (a)(4)).

(4) LIMITATION ON COST-SHARING.—The project may not

impose cost sharing on a medicare beneficiary for the receipt

of services under the project in excess of 20 percent of the

costs that are reasonable and related to the provision of such

services.

(e) REPORTS.—The Secretary shall submit to the Committee

on Ways and Means and the Committee Commerce of the House

of Representatives and the Committee on Finance of the Senate

interim reports on the project and a final report on the project

within 6 months after the conclusion of the project. The final

report shall include an evaluation of the impact of the use of

telemedicine and medical informatics on improving access of medicare beneficiaries to health care services, on reducing the costs

of such services, and on improving the quality of life of such beneficiaries.

(f) DEFINITIONS.—For purposes of this section:

(1) INTERVENTIONAL INFORMATICS.—The term ‘‘interventional informatics’’ means using information technology and

virtual reality technology to intervene in patient care.

(2) MEDICAL INFORMATICS.—The term ‘‘medical informatics’’

means the storage, retrieval, and use of biomedical and related

information for problem solving and decision-making through

computing and communications technologies.

(3) PROJECT.—The term ‘‘project’’ means the demonstration

project under this section.
H. R. 2015—132

Subtitle D—Anti-Fraud and Abuse Provisions and Improvements in Protecting

Program Integrity

CHAPTER 1—REVISIONS TO SANCTIONS FOR FRAUD

AND ABUSE

SEC. 4301. PERMANENT EXCLUSION FOR THOSE CONVICTED OF 3

HEALTH CARE RELATED CRIMES.

Section 1128(c)(3) (42 U.S.C. 1320a–7(c)(3)) is amended—

(1) in subparagraph (A), by inserting ‘‘or in the case

described in subparagraph (G)’’ after ‘‘subsection (b)(12)’’;

(2) in subparagraphs (B) and (D), by striking ‘‘In the case’’

and inserting ‘‘Subject to subparagraph (G), in the case’’; and

(3) by adding at the end the following new subparagraph:

‘‘(G) In the case of an exclusion of an individual under subsection (a) based on a conviction occurring on or after the date

of the enactment of this subparagraph, if the individual has (before,

on, or after such date) been convicted—

‘‘(i) on one previous occasion of one or more offenses for

which an exclusion may be effected under such subsection,

the period of the exclusion shall be not less than 10 years,

or

‘‘(ii) on 2 or more previous occasions of one or more offenses

for which an exclusion may be effected under such subsection,

the period of the exclusion shall be permanent.’’.

SEC. 4302. AUTHORITY TO REFUSE TO ENTER INTO MEDICARE AGREEMENTS WITH INDIVIDUALS OR ENTITIES CONVICTED OF

FELONIES.

(a) MEDICARE PART A.—Section 1866(b)(2) (42 U.S.C.

1395cc(b)(2)) is amended—

(1) in subparagraph (B), by striking ‘‘or’’ at the end;

(2) in subparagraph (C), by striking the period at the

end and inserting ‘‘, or’’; and

(3) by adding at the end the following new subparagraph:

‘‘(D) has ascertained that the provider has been convicted of a felony under Federal or State law for an offense

which the Secretary determines is detrimental to the best

interests of the program or program beneficiaries.’’.

(b) MEDICARE PART B.—Section 1842(h) (42 U.S.C. 1395u(h))

is amended by adding at the end the following new paragraph:

‘‘(8) The Secretary may refuse to enter into an agreement

with a physician or supplier under this subsection, or may terminate

or refuse to renew such agreement, in the event that such physician

or supplier has been convicted of a felony under Federal or State

law for an offense which the Secretary determines is detrimental

to the best interests of the program or program beneficiaries.’’.

(c) EFFECTIVE DATE.—The amendments made by this section

shall take effect on the date of the enactment of this Act and

apply to the entry and renewal of contracts on or after such date.

SEC. 4303. EXCLUSION OF ENTITY CONTROLLED BY FAMILY MEMBER

OF A SANCTIONED INDIVIDUAL.

(a) IN GENERAL.—Section 1128 (42 U.S.C. 1320a–7) is amended—
H. R. 2015—133

(1) in subsection (b)(8)(A)—

(A) in clause (i), by striking ‘‘or’’ at the end;

(B) in clause (ii), by striking the dash at the end

and inserting ‘‘; or’’; and

(C) by inserting after clause (ii) the following:

‘‘(iii) who was described in clause (i) but is no longer

so described because of a transfer of ownership or control

interest, in anticipation of (or following) a conviction,

assessment, or exclusion described in subparagraph (B)

against the person, to an immediate family member (as

defined in subsection (j)(1)) or a member of the household

of the person (as defined in subsection (j)(2)) who continues

to maintain an interest described in such clause—’’; and

(2) by adding at the end the following new subsection:

‘‘(j) DEFINITION OF IMMEDIATE FAMILY MEMBER AND MEMBER

OF HOUSEHOLD.—For purposes of subsection (b)(8)(A)(iii):

‘‘(1) The term ‘immediate family member’ means, with

respect to a person—

‘‘(A) the husband or wife of the person;

‘‘(B) the natural or adoptive parent, child, or sibling

of the person;

‘‘(C) the stepparent, stepchild, stepbrother, or stepsister

of the person;

‘‘(D) the father-, mother-, daughter-, son-, brother-, or

sister-in-law of the person;

‘‘(E) the grandparent or grandchild of the person; and

‘‘(F) the spouse of a grandparent or grandchild of the

person.

‘‘(2) The term ‘member of the household’ means, with

respect to any person, any individual sharing a common abode

as part of a single family unit with the person, including

domestic employees and others who live together as a family

unit, but not including a roomer or boarder.’’.

(b) EFFECTIVE DATE.—The amendments made by this section

shall take effect on the date that is 45 days after the date of

the enactment of this Act.

SEC. 4304. IMPOSITION OF CIVIL MONEY PENALTIES.

(a) CIVIL MONEY PENALTIES FOR PERSONS THAT CONTRACT WITH

EXCLUDED INDIVIDUALS.—Section 1128A(a) (42 U.S.C. 1320a–7a(a))

is amended—

(1) in paragraph (4), by striking ‘‘or’’ at the end;

(2) in paragraph (5), by adding ‘‘or’’ at the end; and

(3) by inserting after paragraph (5) the following new paragraph:

‘‘(6) arranges or contracts (by employment or otherwise)

with an individual or entity that the person knows or should

know is excluded from participation in a Federal health care

program (as defined in section 1128B(f)), for the provision of

items or services for which payment may be made under such

a program;’’.

(b) CIVIL MONEY PENALTIES FOR KICKBACKS.—

(1) PERMITTING SECRETARY TO IMPOSE CIVIL MONEY PENALTY.—Section 1128A(a) (42 U.S.C. 1320a–7a(a)), as amended

by subsection (a), is amended—

(A) in paragraph (5), by striking ‘‘or’’ at the end;

(B) in paragraph (6), by adding ‘‘or’’ at the end; and
H. R. 2015—134

(C) by adding after paragraph (6) the following new

paragraph:

‘‘(7) commits an act described in paragraph (1) or (2) of

section 1128B(b);’’.

(2) DESCRIPTION OF CIVIL MONEY PENALTY APPLICABLE.—

Section 1128A(a) (42 U.S.C. 1320a–7a(a)), as amended by paragraph (1), is amended in the matter following paragraph (7)—

(A) by striking ‘‘occurs).’’ and inserting ‘‘occurs; or in

cases under paragraph (7), $50,000 for each such act).’’;

and

(B) by inserting after ‘‘of such claim’’ the following:

‘‘(or, in cases under paragraph (7), damages of not more

than 3 times the total amount of remuneration offered,

paid, solicited, or received, without regard to whether a

portion of such remuneration was offered, paid, solicited,

or received for a lawful purpose)’’.

(c) EFFECTIVE DATES.—

(1) CONTRACTS WITH EXCLUDED PERSONS.—The amendments made by subsection (a) shall apply to arrangements

and contracts entered into after the date of the enactment

of this Act.

(2) KICKBACKS.—The amendments made by subsection (b)

shall apply to acts committed after the date of the enactment

of this Act.

CHAPTER 2—IMPROVEMENTS IN PROTECTING

PROGRAM INTEGRITY

SEC. 4311. IMPROVING INFORMATION TO MEDICARE BENEFICIARIES.

(a) INCLUSION OF INFORMATION REGARDING MEDICARE WASTE, FRAUD, AND ABUSE IN ANNUAL NOTICE.— (1) IN GENERAL.—Section 1804 (42 U.S.C. 1395b–2) is

amended by adding at the end the following new subsection:

‘‘(c) The notice provided under subsection (a) shall include—

‘‘(1) a statement which indicates that because errors do

occur and because medicare fraud, waste, and abuse is a significant problem, beneficiaries should carefully check any explanation of benefits or itemized statement furnished pursuant

to section 1806 for accuracy and report any errors or questionable charges by calling the toll-free phone number described

in paragraph (4);

‘‘(2) a statement of the beneficiary’s right to request an

itemized statement for medicare items and services (as provided

in section 1806(b));

‘‘(3) a description of the program to collect information

on medicare fraud and abuse established under section 203(b)

of the Health Insurance Portability and Accountability Act of

1996; and

‘‘(4) a toll-free telephone number maintained by the Inspector General in the Department of Health and Human Services

for the receipt of complaints and information about waste,

fraud, and abuse in the provision or billing of services under

this title.’’.

(2) EFFECTIVE DATE.—The amendment made by this subsection shall apply to notices provided on or after January

1, 1998.
H. R. 2015—135

(b) CLARIFICATION OF REQUIREMENT TO PROVIDE EXPLANATION

OF MEDICARE BENEFITS.—

(1) IN GENERAL.—Title XVIII is amended by inserting after

section 1805 (as added by section 4022) the following new

section:

‘‘EXPLANATION OF MEDICARE BENEFITS

‘‘SEC. 1806. (a) IN GENERAL.—The Secretary shall furnish to

each individual for whom payment has been made under this title

(or would be made without regard to any deductible) a statement

which—

‘‘(1) lists the item or service for which payment has been

made and the amount of such payment for each item or service;

and

‘‘(2) includes a notice of the individual’s right to request

an itemized statement (as provided in subsection (b)).

‘‘(b) REQUEST FOR ITEMIZED STATEMENT FOR MEDICARE ITEMS

AND SERVICES.—

‘‘(1) IN GENERAL.—An individual may submit a written

request to any physician, provider, supplier, or any other person

(including an organization, agency, or other entity) for an itemized statement for any item or service provided to such individual by such person with respect to which payment has been

made under this title.

‘‘(2) 30-DAY PERIOD TO FURNISH STATEMENT.—

‘‘(A) IN GENERAL.—Not later than 30 days after the

date on which a request under paragraph (1) has been

made, a person described in such paragraph shall furnish

an itemized statement describing each item or service provided to the individual requesting the itemized statement.

‘‘(B) PENALTY.—Whoever knowingly fails to furnish an

itemized statement in accordance with subparagraph (A)

shall be subject to a civil money penalty of not more than

$100 for each such failure. Such penalty shall be imposed

and collected in the same manner as civil money penalties

under subsection (a) of section 1128A are imposed and

collected under that section.

‘‘(3) REVIEW OF ITEMIZED STATEMENT.— ‘‘(A) IN GENERAL.—Not later than 90 days after the

receipt of an itemized statement furnished under paragraph

(1), an individual may submit a written request for a

review of the itemized statement to the Secretary.

‘‘(B) SPECIFIC ALLEGATIONS.—A request for a review

of the itemized statement shall identify—

‘‘(i) specific items or services that the individual

believes were not provided as claimed, or

‘‘(ii) any other billing irregularity (including duplicate billing).

‘‘(4) FINDINGS OF SECRETARY.—The Secretary shall, with

respect to each written request submitted under paragraph

(3), determine whether the itemized statement identifies specific items or services that were not provided as claimed or

any other billing irregularity (including duplicate billing) that

has resulted in unnecessary payments under this title.

‘‘(5) RECOVERY OF AMOUNTS.—The Secretary shall take all

appropriate measures to recover amounts unnecessarily paid
H. R. 2015—136

under this title with respect to a statement described in paragraph (4).’’.

(2) CONFORMING AMENDMENT.—Subsection (a) of section

203 of the Health Insurance Portability and Accountability

Act of 1996 is repealed.

(3) EFFECTIVE DATES.—

(A) STATEMENT BY SECRETARY.—Paragraph (1) of section 1806(a) of the Social Security Act, as added by paragraph (1), and the repeal made by paragraph (2) shall

take effect on the date of the enactment of this Act.

(B) ITEMIZED STATEMENT.—Paragraph (2) of section

1806(a) and section 1806(b) of the Social Security Act,

as so added, shall take effect not later than January 1,

1999.

SEC. 4312. DISCLOSURE OF INFORMATION AND SURETY BONDS.

(a) DISCLOSURE OF INFORMATION AND SURETY BOND REQUIREMENT FOR SUPPLIERS OF DURABLE MEDICAL EQUIPMENT.—Section

1834(a) (42 U.S.C. 1395m(a)) is amended by inserting after paragraph (15) the following new paragraph:

‘‘(16) DISCLOSURE OF INFORMATION AND SURETY BOND.—

The Secretary shall not provide for the issuance (or renewal)

of a provider number for a supplier of durable medical equipment, for purposes of payment under this part for durable

medical equipment furnished by the supplier, unless the supplier provides the Secretary on a continuing basis—

‘‘(A) with—

‘‘(i) full and complete information as to the identity

of each person with an ownership or control interest

(as defined in section 1124(a)(3)) in the supplier or

in any subcontractor (as defined by the Secretary in

regulations) in which the supplier directly or indirectly

has a 5 percent or more ownership interest; and

‘‘(ii) to the extent determined to be feasible under

regulations of the Secretary, the name of any disclosing

entity (as defined in section 1124(a)(2)) with respect

to which a person with such an ownership or control

interest in the supplier is a person with such an ownership or control interest in the disclosing entity; and

‘‘(B) with a surety bond in a form specified by the

Secretary and in an amount that is not less than $50,000.

The Secretary may waive the requirement of a bond under

subparagraph (B) in the case of a supplier that provides a

comparable surety bond under State law.’’.

(b) SURETY BOND REQUIREMENT FOR HOME HEALTH AGENCIES.—

(1) IN GENERAL.—Section 1861(o) (42 U.S.C. 1395x(o)) is

amended—

(A) in paragraph (6), by striking ‘‘and’’ at the end;

(B) by redesignating paragraph (7) as paragraph (8);

(C) by inserting after paragraph (6) the following new

paragraph:

‘‘(7) provides the Secretary on a continuing basis with

a surety bond in a form specified by the Secretary and in

an amount that is not less than $50,000; and’’; and
H. R. 2015—137

(D) by adding at the end the following: ‘‘The Secretary

may waive the requirement of a surety bond under paragraph (7) in the case of an agency or organization that

provides a comparable surety bond under State law.’’.

(2) CONFORMING AMENDMENTS.—Section 1861(v)(1)(H) (42

U.S.C. 1395x(v)(1)(H)) is amended—

(A) in clause (i), by striking ‘‘the financial security

requirement described in subsection (o)(7)’’ and inserting

‘‘the surety bond requirement described in subsection (o)(7)

and the financial security requirement described in subsection (o)(8)’’; and

(B) in clause (ii), by striking ‘‘the financial security

requirement described in subsection (o)(7) applies’’ and

inserting ‘‘the surety bond requirement described in subsection (o)(7) and the financial security requirement

described in subsection (o)(8) apply’’.

(3) REFERENCE TO CURRENT DISCLOSURE REQUIREMENT.—

For additional provisions requiring home health agencies to

disclose information on ownership and control interests, see

section 1124 of the Social Security Act (42 U.S.C. 1320a–3).

(c) AUTHORIZING APPLICATION OF DISCLOSURE AND SURETY

BOND REQUIREMENTS TO OTHER HEALTH CARE PROVIDERS.—Section

1834(a)(16) (42 U.S.C. 1395m(a)(16)), as added by subsection (a),

is amended by adding at the end the following: ‘‘The Secretary,

at the Secretary’s discretion, may impose the requirements of the

first sentence with respect to some or all providers of items or

services under part A or some or all suppliers or other persons

(other than physicians or other practitioners, as defined in section

1842(b)(18)(C)) who furnish items or services under this part.’’.

(d) APPLICATION TO COMPREHENSIVE OUTPATIENT REHABILITA- TION FACILITIES (CORFS).—Section 1861(cc)(2) (42 U.S.C.

1395x(cc)(2)) is amended—

(1) in subparagraph (H), by striking ‘‘and’’ at the end;

(2) by redesignating subparagraph (I) as subparagraph (J);

(3) by inserting after subparagraph (H) the following new

subparagraph:

‘‘(I) provides the Secretary on a continuing basis with a

surety bond in a form specified by the Secretary and in an

amount that is not less than $50,000; and’’; and

(4) by adding at the end the following flush sentence:

‘‘The Secretary may waive the requirement of a surety bond under

subparagraph (I) in the case of a facility that provides a comparable

surety bond under State law.’’.

(e) APPLICATION TO REHABILITATION AGENCIES.—Section

1861(p) (42 U.S.C. 1395x(p)) is amended—

(1) in paragraph (4)(A)(v), by inserting after ‘‘as the Secretary may find necessary,’’ the following: ‘‘and provides the

Secretary on a continuing basis with a surety bond in a form

specified by the Secretary and in an amount that is not less

than $50,000,’’, and

(2) by adding at the end the following: ‘‘The Secretary

may waive the requirement of a surety bond under paragraph

(4)(A)(v) in the case of a clinic or agency that provides a

comparable surety bond under State law.’’.

(f) EFFECTIVE DATES.—

(1) SUPPLIERS OF DURABLE MEDICAL EQUIPMENT.—The

amendment made by subsection (a) shall apply to suppliers
H. R. 2015—138

of durable medical equipment with respect to such equipment

furnished on or after January 1, 1998.

(2) HOME HEALTH AGENCIES.—The amendments made by

subsection (b) shall apply to home health agencies with respect

to services furnished on or after January 1, 1998. The Secretary

of Health and Human Services shall modify participation agreements under section 1866(a)(1) of the Social Security Act (42

U.S.C. 1395cc(a)(1)) with respect to home health agencies to

provide for implementation of such amendments on a timely

basis.

(3) OTHER AMENDMENTS.—The amendments made by subsections (c) through (e) shall take effect on the date of the

enactment of this Act and may be applied with respect to

items and services furnished on or after January 1, 1998.

SEC. 4313. PROVISION OF CERTAIN IDENTIFICATION NUMBERS.

(a) REQUIREMENTS TO DISCLOSE EMPLOYER IDENTIFICATION

NUMBERS (EINS) AND SOCIAL SECURITY ACCOUNT NUMBERS

(SSNS).—Section 1124(a)(1) (42 U.S.C. 1320a–3(a)(1)) is amended

by inserting before the period at the end the following: ‘‘and supply

the Secretary with the both the employer identification number

(assigned pursuant to section 6109 of the Internal Revenue Code

of 1986) and social security account number (assigned under section

205(c)(2)(B)) of the disclosing entity, each person with an ownership

or control interest (as defined in subsection (a)(3)), and any subcontractor in which the entity directly or indirectly has a 5 percent

or more ownership interest.

(b) OTHER MEDICARE PROVIDERS.—Section 1124A (42 U.S.C.

1320a–3a) is amended—

(1) in subsection (a)—

(A) in paragraph (1), by striking ‘‘and’’ at the end;

(B) in paragraph (2), by striking the period at the

end and inserting ‘‘; and’’; and

(C) by adding at the end the following new paragraph:

‘‘(3) including the employer identification number (assigned

pursuant to section 6109 of the Internal Revenue Code of

1986) and social security account number (assigned under section 205(c)(2)(B)) of the disclosing part B provider and any

person, managing employee, or other entity identified or

described under paragraph (1) or (2).’’; and

(2) in subsection (c)(1), by inserting ‘‘(or, for purposes of

subsection (a)(3), any entity receiving payment)’’ after ‘‘on an

assignment-related basis’’.

(c) VERIFICATION BY SOCIAL SECURITY ADMINISTRATION (SSA).—

Section 1124A (42 U.S.C. 1320a–3a), as amended by subsection

(b), is amended—

(1) by redesignating subsection (c) as subsection (d); and

(2) by inserting after subsection (b) the following new subsection:

‘‘(c) VERIFICATION.—

‘‘(1) TRANSMITTAL BY HHS.—The Secretary shall transmit—

‘‘(A) to the Commissioner of Social Security information

concerning each social security account number (assigned

under section 205(c)(2)(B)), and

‘‘(B) to the Secretary of the Treasury information

concerning each employer identification number (assigned
H. R. 2015—139

pursuant to section 6109 of the Internal Revenue Code

of 1986),

supplied to the Secretary pursuant to subsection (a)(3) or section 1124(c) to the extent necessary for verification of such

information in accordance with paragraph (2).

‘‘(2) VERIFICATION.—The Commissioner of Social Security

and the Secretary of the Treasury shall verify the accuracy

of, or correct, the information supplied by the Secretary to

such official pursuant to paragraph (1), and shall report such

verifications or corrections to the Secretary.

‘‘(3) FEES FOR VERIFICATION.—The Secretary shall

reimburse the Commissioner and Secretary of the Treasury,

at a rate negotiated between the Secretary and such official,

for the costs incurred by such official in performing the verification and correction services described in this subsection.’’.

(d) REPORT.—Before the amendments made by this section may

become effective, the Secretary of Health and Human Services

shall submit to Congress a report on steps the Secretary has taken

to assure the confidentiality of social security account numbers

that will be provided to the Secretary under such amendments.

(e) EFFECTIVE DATES.—

(1) DISCLOSURE REQUIREMENTS.—The amendment made by

subsection (a) shall apply to the application of conditions of

participation, and entering into and renewal of contracts and

agreements, occurring more than 90 days after the date of

submission of the report under subsection (d).

(2) OTHER PROVIDERS.—The amendments made by subsection (b) shall apply to payment for items and services furnished more than 90 days after the date of submission of

such report.

SEC. 4314. ADVISORY OPINIONS REGARDING CERTAIN PHYSICIAN

SELF-REFERRAL PROVISIONS.

Section 1877(g) (42 U.S.C. 1395nn(g)) is amended by adding

at the end the following new paragraph:

‘‘(6) ADVISORY OPINIONS.— ‘‘(A) IN GENERAL.—The Secretary shall issue written

advisory opinions concerning whether a referral relating

to designated health services (other than clinical laboratory

services) is prohibited under this section. Each advisory

opinion issued by the Secretary shall be binding as to

the Secretary and the party or parties requesting the opinion.

‘‘(B) APPLICATION OF CERTAIN RULES.—The Secretary

shall, to the extent practicable, apply the rules under subsections (b)(3) and (b)(4) and take into account the regulations promulgated under subsection (b)(5) of section 1128D

in the issuance of advisory opinions under this paragraph.

‘‘(C) REGULATIONS.—In order to implement this paragraph in a timely manner, the Secretary may promulgate

regulations that take effect on an interim basis, after notice

and pending opportunity for public comment.

‘‘(D) APPLICABILITY.—This paragraph shall apply to

requests for advisory opinions made after the date which

is 90 days after the date of the enactment of this paragraph

and before the close of the period described in section

1128D(b)(6).’’.
H. R. 2015—140

SEC. 4315. REPLACEMENT OF REASONABLE CHARGE METHODOLOGY

BY FEE SCHEDULES.

(a) APPLICATION OF FEE SCHEDULE.—Section 1842 (42 U.S.C.

1395u) is amended by adding at the end the following new subsection:

‘‘(s)(1) The Secretary may implement a statewide or other

areawide fee schedule to be used for payment of any item or

service described in paragraph (2) which is paid on a reasonable

charge basis. Any fee schedule established under this paragraph

for such item or service shall be updated each year by the percentage increase in the consumer price index for all urban consumers

(United States city average) for the 12-month period ending with

June of the preceding year, except that in no event shall a fee

schedule for an item described in paragraph (2)(D) be updated

before 2003.

‘‘(2) The items and services described in this paragraph are

as follows:

‘‘(A) Medical supplies.

‘‘(B) Home dialysis supplies and equipment (as defined

in section 1881(b)(8)).

‘‘(C) Therapeutic shoes.

‘‘(D) Parenteral and enteral nutrients, equipment, and supplies.

‘‘(E) Electromyogram devices

‘‘(F) Salivation devices.

‘‘(G) Blood products.

‘‘(H) Transfusion medicine.’’.

(b) CONFORMING AMENDMENT.—Section 1833(a)(1) (42 U.S.C.

1395l(a)(1)) is amended—

(A) by striking ‘‘and (P)’’ and inserting ‘‘(P)’’; and

(B) by striking the semicolon at the end and inserting

the following: ‘‘, and (Q) with respect to items or services

for which fee schedules are established pursuant to section

1842(s), the amounts paid shall be 80 percent of the lesser

of the actual charge or the fee schedule established in

such section;’’.

(c) EFFECTIVE DATES.—The amendments made by this section

to the extent such amendments substitute fee schedules for reasonable charges, shall apply to particular services as of the date specified by the Secretary of Health and Human Services.

(d) INITIAL BUDGET NEUTRALITY.—The Secretary, in developing

a fee schedule for particular services (under the amendments made

by this section), shall set amounts for the first year period to

which the fee schedule applies at a level so that the total payments

under title XVIII of the Social Security Act (42 U.S.C. 1395 et

seq.) for those services for that year period shall be approximately

equal to the estimated total payments if such fee schedule had

not been implemented.

SEC. 4316. APPLICATION OF INHERENT REASONABLENESS TO ALL

PART B SERVICES OTHER THAN PHYSICIANS’ SERVICES.

(a) IN GENERAL.—Paragraphs (8) and (9) of section 1842(b)

(42 U.S.C. 1395u(b)) are amended to read as follows:

‘‘(8)(A)(i) The Secretary shall by regulation—

‘‘(I) describe the factors to be used in determining the

cases (of particular items or services) in which the application

of this part (other than to physicians’ services paid under
H. R. 2015—141

section 1848) results in the determination of an amount that,

because of its being grossly excessive or grossly deficient, is

not inherently reasonable, and

‘‘(II) provide in those cases for the factors to be considered

in determining an amount that is realistic and equitable.

‘‘(ii) Notwithstanding the determination made in clause (i),

the Secretary may not apply factors that would increase or decrease

the payment under this part during any year for any particular

item or service by more than 15 percent from such payment during

the preceding year except as provided in subparagraph (B).

‘‘(B) The Secretary may make a determination under this

subparagraph that would result in an increase or decrease under

subparagraph (A) of more than 15 percent of the payment amount

for a year, but only if—

‘‘(i) the Secretary’s determination takes into account the

factors described in subparagraph (C) and any additional factors

the Secretary determines appropriate,

‘‘(ii) the Secretary’s determination takes into account the

potential impacts described in subparagraph (D), and

‘‘(iii) the Secretary complies with the procedural requirements of paragraph (9).

‘‘(C) The factors described in this subparagraph are as follows:

‘‘(i) The programs established under this title and title

XIX are the sole or primary sources of payment for an item

or service.

‘‘(ii) The payment amount does not reflect changing technology, increased facility with that technology, or reductions

in acquisition or production costs.

‘‘(iii) The payment amount for an item or service under

this part is substantially higher or lower than the payment

made for the item or service by other purchasers.

‘‘(D) The potential impacts of a determination under subparagraph (B) on quality, access, and beneficiary liability, including

the likely effects on assignment rates and participation rates.

‘‘(9)(A) The Secretary shall consult with representatives of

suppliers or other individuals who furnish an item or service before

making a determination under paragraph (8)(B) with regard to

that item or service.

‘‘(B) The Secretary shall publish notice of a proposed determination under paragraph (8)(B) in the Federal Register—

‘‘(i) specifying the payment amount proposed to be established with respect to an item or service,

‘‘(ii) explaining the factors and data that the Secretary

took into account in determining the payment amount so specified, and

‘‘(iii) explaining the potential impacts described in paragraph (8)(D).

‘‘(C) After publication of the notice required by subparagraph

(B), the Secretary shall allow not less than 60 days for public

comment on the proposed determination.

‘‘(D)(i) Taking into consideration the comments made by the

public, the Secretary shall publish in the Federal Register a final

determination under paragraph (8)(B) with respect to the payment

amount to be established with respect to the item or service.

‘‘(ii) A final determination published pursuant to clause (i)

shall explain the factors and data that the Secretary took into

consideration in making the final determination.’’.
H. R. 2015—142

(b) CONFORMING AMENDMENT.—Section 1834(a)(10)(B) (42

U.S.C. 1395m(a)(10)(B)) is amended—

(1) by striking ‘‘For covered items furnished on or after

January 1, 1991, the’’ and inserting ‘‘The’’;

(2) by striking ‘‘(other than subparagraph (D))’’; and

(3) by striking all that follows ‘‘payments under this subsection’’ and inserting a period.

(c) EFFECTIVE DATE.—The amendments made by this section

shall take effect on the date of the enactment of this Act.

SEC. 4317. REQUIREMENT TO FURNISH DIAGNOSTIC INFORMATION.

(a) INCLUSION OF NON-PHYSICIAN PRACTITIONERS IN REQUIREMENT TO PROVIDE DIAGNOSTIC CODES FOR PHYSICIAN SERVICES.—

Paragraphs (1) and (2) of section 1842(p) (42 U.S.C. 1395u(p))

are each amended by inserting ‘‘or practitioner specified in subsection (b)(18)(C)’’ after ‘‘by a physician’’.

(b) REQUIREMENT TO PROVIDE DIAGNOSTIC INFORMATION WHEN

ORDERING CERTAIN ITEMS OR SERVICES FURNISHED BY ANOTHER

ENTITY.—Section 1842(p) (42 U.S.C. 1395u(p)), is amended by adding at the end the following new paragraph:

‘‘(4) In the case of an item or service defined in paragraph

(3), (6), (8), or (9) of subsection 1861(s) ordered by a physician

or a practitioner specified in subsection (b)(18)(C), but furnished

by another entity, if the Secretary (or fiscal agent of the Secretary)

requires the entity furnishing the item or service to provide diagnostic or other medical information in order for payment to be

made to the entity, the physician or practitioner shall provide

that information to the entity at the time that the item or service

is ordered by the physician or practitioner.’’.

(c) EFFECTIVE DATE.—The amendments made by this section

shall apply to items and services furnished on or after January

1, 1998.

SEC. 4318. REPORT BY GAO ON OPERATION OF FRAUD AND ABUSE

CONTROL PROGRAM.

Section 1817(k)(6) (42 U.S.C. 1395i(k)(6)) is amended by inserting ‘‘June 1, 1998, and’’ after ‘‘Not later than’’.

SEC. 4319. COMPETITIVE BIDDING DEMONSTRATION PROJECTS.

(a) GENERAL RULE.—Part B of title XVIII (42 U.S.C. 1395j

et seq.) is amended by inserting after section 1846 the following

new section:

‘‘SEC. 1847. DEMONSTRATION PROJECTS FOR COMPETITIVE ACQUISITION OF ITEMS AND SERVICES.

‘‘(a) ESTABLISHMENT OF DEMONSTRATION PROJECT BIDDING

AREAS.—

‘‘(1) IN GENERAL.—The Secretary shall implement not more

than 5 demonstration projects under which competitive acquisition areas are established for contract award purposes for the

furnishing under this part of the items and services described

in subsection (d).

‘‘(2) PROJECT REQUIREMENTS.—Each demonstration project

under paragraph (1)—

‘‘(A) shall include such group of items and services

as the Secretary may prescribe,

‘‘(B) shall be conducted in not more than 3 competitive

acquisition areas, and
H. R. 2015—143

‘‘(C) shall be operated over a 3-year period.

‘‘(3) CRITERIA FOR ESTABLISHMENT OF COMPETITIVE ACQUISITION AREAS.—Each competitive acquisition area established

under a demonstration project implemented under paragraph

(1)—

‘‘(A) shall be, or shall be within, a metropolitan statistical area (as defined by the Secretary of Commerce), and

‘‘(B) shall be chosen based on the availability and accessibility of entities able to furnish items and services, and

the probable savings to be realized by the use of competitive

bidding in the furnishing of items and services in such

area.

‘‘(b) AWARDING OF CONTRACTS IN AREAS.—

‘‘(1) IN GENERAL.—The Secretary shall conduct a competition among individuals and entities supplying items and services described in subsection (c) for each competitive acquisition

area established under a demonstration project implemented

under subsection (a).

‘‘(2) CONDITIONS FOR AWARDING CONTRACT.—The Secretary

may not award a contract to any entity under the competition

conducted pursuant to paragraph (1) to furnish an item or

service unless the Secretary finds that the entity meets quality

standards specified by the Secretary that the total amounts

to be paid under the contract are expected to be less than

the total amounts that would otherwise be paid.

‘‘(3) CONTENTS OF CONTRACT.—A contract entered into with

an entity under the competition conducted pursuant to paragraph (1) is subject to terms and conditions that the Secretary

may specify.

‘‘(4) LIMIT ON NUMBER OF CONTRACTORS.—The Secretary

may limit the number of contractors in a competitive acquisition

area to the number needed to meet projected demand for items

and services covered under the contracts.

‘‘(c) EXPANSION OF PROJECTS.— ‘‘(1) EVALUATIONS.—The Secretary shall evaluate the

impact of the implementation of the demonstration projects

on medicare program payments, access, diversity of product

selection, and quality. The Secretary shall make annual reports

to the Committees on Ways and Means and Commerce of

the House of Representatives and the Committee on Finance

of the Senate on the results of the evaluation described in

the preceding sentence and a final report not later than 6

months after the termination date specified in subsection (e).

‘‘(2) EXPANSION.—If the Secretary determines from the

evaluations under paragraph (1) that there is clear evidence

that any demonstration project—

‘‘(A) results in a decrease in Federal expenditures

under this title, and

‘‘(B) does not reduce program access, diversity of product selection, and quality under this title,

the Secretary may expand the project to additional competitive

acquisition areas.

‘‘(d) SERVICES DESCRIBED.—The items and services to which

this section applies are all items and services covered under this

part (except for physicians’ services as defined in section 1861(s)(1))

that the Secretary may specify. At least one demonstration project

shall include oxygen and oxygen equipment.
H. R. 2015—144

‘‘(e) TERMINATION.—Notwithstanding any other provision of this

section, all projects under this section shall terminate not later

than December 31, 2002.’’.

(b) ITEMS AND SERVICES TO BE FURNISHED ONLY THROUGH

COMPETITIVE ACQUISITION.—Section 1862(a) (42 U.S.C. 1395y(a))

is amended—

(1) by striking ‘‘or’’ at the end of paragraph (15),

(2) by striking the period at the end of paragraph (16)

and inserting ‘‘; or’’, and

(3) by inserting after paragraph (16) the following new

paragraph:

‘‘(17) where the expenses are for an item or service furnished in a competitive acquisition area (as established by

the Secretary under section 1847(a)) by an entity other than

an entity with which the Secretary has entered into a contract

under section 1847(b) for the furnishing of such an item or

service in that area, unless the Secretary finds that the

expenses were incurred in a case of urgent need, or in other

circumstances specified by the Secretary.’’.

(c) STUDY BY GAO.—The Comptroller of the United States

shall study the effectiveness of the establishment of competitive

acquisition areas under section 1847(a) of the Social Security Act,

as added by this section.

SEC. 4320. PROHIBITING UNNECESSARY AND WASTEFUL MEDICARE

PAYMENTS FOR CERTAIN ITEMS.

Section 1861(v) (42 U.S.C. 1395x(v)) is amended by adding

at the end the following new paragraph:

‘‘(8) ITEMS UNRELATED TO PATIENT CARE.—Reasonable costs

do not include costs for the following—

‘‘(i) entertainment, including tickets to sporting and

other entertainment events;

‘‘(ii) gifts or donations;

‘‘(iii) personal use of motor vehicles;

‘‘(iv) costs for fines and penalties resulting from violations of Federal, State, or local laws; and

‘‘(v) education expenses for spouses or other dependents

of providers of services, their employees or contractors.’’.

SEC. 4321. NONDISCRIMINATION IN POST-HOSPITAL REFERRAL TO

HOME HEALTH AGENCIES AND OTHER ENTITIES.

(a) NOTIFICATION OF AVAILABILITY OF HOME HEALTH AGENCIES

AND OTHER ENTITIES AS PART OF DISCHARGE PLANNING PROCESS.— Section 1861(ee)(2) (42 U.S.C. 1395x(ee)(2)) is amended—

(1) in subparagraph (D), by inserting before the period

the following: ‘‘, including the availability of home health services through individuals and entities that participate in the

program under this title and that serve the area in which

the patient resides and that request to be listed by the hospital

as available’’; and

(2) by adding at the end the following new subparagraph:

‘‘(H) Consistent with section 1802, the discharge plan

shall—

‘‘(i) not specify or otherwise limit the qualified provider

which may provide post-hospital home health services, and

‘‘(ii) identify (in a form and manner specified by the

Secretary) any entity to whom the individual is referred

in which the hospital has a disclosable financial interest
H. R. 2015—145

(as specified by the Secretary consistent with section

1866(a)(1)(S)) or which has such an interest in the hospital.’’.

(b) MAINTENANCE AND DISCLOSURE OF INFORMATION ON POSTHOSPITAL HOME HEALTH AGENCIES AND OTHER ENTITIES.—Section

1866(a)(1) (42 U.S.C. 1395cc(a)(1)) is amended—

(1) by striking ‘‘and’’ at the end of subparagraph (Q),

(2) by striking the period at the end of subparagraph (R),

and

(3) by adding at the end the following new subparagraph:

‘‘(S) in the case of a hospital that has a financial interest

(as specified by the Secretary in regulations) in an entity to

which individuals are referred as described in section

1861(ee)(2)(H)(ii), or in which such an entity has such a financial interest, or in which another entity has such a financial

interest (directly or indirectly) with such hospital and such

an entity, to maintain and disclose to the Secretary (in a

form and manner specified by the Secretary) information on—

‘‘(i) the nature of such financial interest,

‘‘(ii) the number of individuals who were discharged

from the hospital and who were identified as requiring

home health services, and

‘‘(iii) the percentage of such individuals who received

such services from such provider (or another such provider).’’.

(c) DISCLOSURE OF INFORMATION TO THE PUBLIC.—Title XI is

amended by inserting after section 1145 the following new section:

‘‘PUBLIC DISCLOSURE OF CERTAIN INFORMATION ON HOSPITAL

FINANCIAL INTEREST AND REFERRAL PATTERNS

‘‘SEC. 1146. The Secretary shall make available to the public,

in a form and manner specified by the Secretary, information disclosed to the Secretary pursuant to section 1866(a)(1)(S).’’.

(d) EFFECTIVE DATES.—

(1) The amendments made by subsection (a) shall apply

to discharges occurring on or after the date which is 90 days

after the date of the enactment of this Act.

(2) The Secretary of Health and Human Services shall

issue regulations by not later than the date which is 1 year

after the date of the enactment of this Act to carry out the

amendments made by subsections (b) and (c) and such amendments shall take effect as of such date (on or after the issuance

of such regulations) as the Secretary specifies in such regulations.

CHAPTER 3—CLARIFICATIONS AND TECHNICAL

CHANGES

SEC. 4331. OTHER FRAUD AND ABUSE RELATED PROVISIONS.

(a) REFERENCE CORRECTION.—(1) Section 1128D(b)(2)(D) (42

U.S.C. 1320a–7d(b)(2)(D)), as added by section 205 of the Health

Insurance Portability and Accountability Act of 1996, is amended

by striking ‘‘1128B(b)’’ and inserting ‘‘1128A(b)’’.

(2) Section 1128E(g)(3)(C) (42 U.S.C. 1320a–7e(g)(3)(C)) is

amended by striking ‘‘Veterans’ Administration’’ and inserting

‘‘Department of Veterans Affairs’’.
H. R. 2015—146

(b) LANGUAGE IN DEFINITION OF CONVICTION.—Section

1128E(g)(5) (42 U.S.C. 1320a–7e(g)(5)), as inserted by section 221(a)

of the Health Insurance Portability and Accountability Act of 1996,

is amended by striking ‘‘paragraph (4)’’ and inserting ‘‘paragraphs

(1) through (4)’’.

(c) IMPLEMENTATION OF EXCLUSIONS.—Section 1128 (42 U.S.C.

1320a–7) is amended—

(1) in subsection (a), by striking ‘‘any program under title

XVIII and shall direct that the following individuals and entities be excluded from participation in any State health care

program (as defined in subsection (h))’’ and inserting ‘‘any

Federal health care program (as defined in section 1128B(f))’’;

and

(2) in subsection (b), by striking ‘‘any program under title

XVIII and may direct that the following individuals and entities

be excluded from participation in any State health care program’’ and inserting ‘‘any Federal health care program (as

defined in section 1128B(f))’’.

(d) SANCTIONS FOR FAILURE TO REPORT.—Section 1128E(b) (42

U.S.C. 1320a–7e(b)), as inserted by section 221(a) of the Health

Insurance Portability and Accountability Act of 1996, is amended

by adding at the end the following:

‘‘(6) SANCTIONS FOR FAILURE TO REPORT.—

‘‘(A) HEALTH PLANS.—Any health plan that fails to

report information on an adverse action required to be

reported under this subsection shall be subject to a civil

money penalty of not more than $25,000 for each such

adverse action not reported. Such penalty shall be imposed

and collected in the same manner as civil money penalties

under subsection (a) of section 1128A are imposed and

collected under that section.

‘‘(B) GOVERNMENTAL AGENCIES.—The Secretary shall

provide for a publication of a public report that identifies

those Government agencies that have failed to report

information on adverse actions as required to be reported

under this subsection.’’.

(e) CLARIFICATION OF TREATMENT OF CERTAIN WAIVERS AND

PAYMENTS OF PREMIUMS.—Section 1128A(i)(6) (42 U.S.C. 1320a–

7a(i)(6)) is amended—

(1) in subparagraph (A)(iii)—

(A) in subclause (I), by adding ‘‘or’’ at the end;

(B) in subclause (II), by striking ‘‘or’’ at the end; and

(C) by striking subclause (III);

(2) by redesignating subparagraphs (B) and (C) as subparagraphs (C) and (D); and

(3) by inserting after subparagraph (A) the following:

‘‘(B) any permissible waiver as specified in section

1128B(b)(3) or in regulations issued by the Secretary;’’.

(f) EFFECTIVE DATES.—

(1) IN GENERAL.—Except as provided in this subsection,

the amendments made by this section shall be effective as

if included in the enactment of the Health Insurance Portability

and Accountability Act of 1996.

(2) FEDERAL HEALTH PROGRAM.—The amendments made

by subsection (c) shall take effect on the date of the enactment

of this Act.
H. R. 2015—147

(3) SANCTION FOR FAILURE TO REPORT.—The amendment

made by subsection (d) shall apply to failures occurring on

or after the date of the enactment of this Act.

Subtitle E—Provisions Relating to Part A

Only

CHAPTER 1—PAYMENT OF PPS HOSPITALS

SEC. 4401. PPS HOSPITAL PAYMENT UPDATE.

(a) IN GENERAL.—Section 1886(b)(3)(B)(i) (42 U.S.C.

1395ww(b)(3)(B)(i)) is amended—

(1) by striking ‘‘and’’ at the end of subclause (XII), and

(2) by striking subclause (XIII) and inserting the following:

‘‘(XIII) for fiscal year 1998, 0 percent,

‘‘(XIV) for fiscal year 1999, the market basket percentage

increase minus 1.9 percentage points for hospitals in all areas,

‘‘(XV) for fiscal year 2000, the market basket percentage

increase minus 1.8 percentage points for hospitals in all areas,

‘‘(XVI) for each of fiscal years 2001 and 2002, the market

basket percentage increase minus 1.1 percentage point for hospitals in all areas, and

‘‘(XVII) for fiscal year 2003 and each subsequent fiscal

year, the market basket percentage increase for hospitals in

all areas.’’.

(b) TEMPORARY RELIEF FOR CERTAIN NON-TEACHING, NON-DSH

HOSPITALS.—

(1) IN GENERAL.—In the case of a hospital described in

paragraph (2) for its cost reporting period—

(A) beginning in fiscal year 1998 the amount of payment made to the hospital under section 1886(d) of the

Social Security Act for discharges occurring during such

fiscal year only shall be increased as though the applicable

percentage increase (otherwise applicable to discharges

occurring during fiscal year 1998 under section

1886(b)(3)(B)(i)(XIII) of the Social Security Act (42 U.S.C.

1395ww(b)(3)(B)(i)(XIII))) had been increased by 0.5

percentage points; and

(B) beginning in fiscal year 1999 the amount of payment made to the hospital under section 1886(d) of the

Social Security Act for discharges occurring during such

fiscal year only shall be increased as though the applicable

percentage increase (otherwise applicable to discharges

occurring during fiscal year 1999 under section

1886(b)(3)(B)(i)(XIII) of the Social Security Act (42 U.S.C.

1395ww(b)(3)(B)(i)(XIII))) had been increased by 0.3

percentage points.

Subparagraph (A) shall not apply in computing the increase

under subparagraph (B) and neither subparagraph shall affect

payment for discharges for any hospital occurring during a

fiscal year after fiscal year 1999. Payment increases under

this subsection for discharges occurring during a fiscal year

are subject to settlement after the close of the fiscal year.

(2) HOSPITALS COVERED.—A hospital described in this paragraph for a cost reporting period is a hospital—

(A) that is described in paragraph (3) for such period;
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(B) that is located in a State in which the amount

of the aggregate payments under section 1886(d) of such

Act for hospitals located in the State and described in

paragraph (3) for their cost reporting periods beginning

during fiscal year 1995 is less than the aggregate allowable

operating costs of inpatient hospital services (as defined

in section 1886(a)(4) of such Act) for all such hospitals

in such State with respect to such cost reporting periods;

and

(C) with respect to which the payments under section

1886(d) of such Act (42 U.S.C. 1395ww(d)) for discharges

occurring in the cost reporting period involved, as estimated

by the Secretary, is less than the allowable operating costs

of inpatient hospital services (as defined in section

1886(a)(4) of such Act (42 U.S.C. 1395ww(a)(4)) for such

hospital for such period, as estimated by the Secretary.

(3) NON-TEACHING, NON-DSH HOSPITALS DESCRIBED.—A

hospital described in this paragraph for a cost reporting period

is a subsection (d) hospital (as defined in section 1886(d)(1)(B)

of such Act (42 U.S.C. 1395ww(d)(1)(B))) that—

(A) is not receiving any additional payment amount

described in section 1886(d)(5)(F) of such Act (42 U.S.C.

1395ww(d)(5)(F)) for discharges occurring during the

period;

(B) is not receiving any additional payment under section 1886(d)(5)(B) of such Act (42 U.S.C. 1395ww(d)(5)(B))

or a payment under section 1886(h) of such Act (42 U.S.C.

1395ww(h)) for discharges occurring during the period; and

(C) does not qualify for payment under section

1886(d)(5)(G) of such Act (42 U.S.C. 1395ww(d)(5)(G)) for

the period.

SEC. 4402. MAINTAINING SAVINGS FROM TEMPORARY REDUCTION IN

CAPITAL PAYMENTS FOR PPS HOSPITALS.

Section 1886(g)(1)(A) (42 U.S.C. 1395ww(g)(1)(A)) is amended

by adding at the end the following: ‘‘In addition to the reduction

described in the preceding sentence, for discharges occurring on

or after October 1, 1997, the Secretary shall apply the budget

neutrality adjustment factor used to determine the Federal capital

payment rate in effect on September 30, 1995 (as described in

section 412.352 of title 42 of the Code of Federal Regulations),

to (i) the unadjusted standard Federal capital payment rate (as

described in section 412.308(c) of that title, as in effect on September

30, 1997), and (ii) the unadjusted hospital-specific rate (as described

in section 412.328(e)(1) of that title, as in effect on September

30, 1997), and, for discharges occurring on or after October 1,

1997, and before September 30, 2002, reduce the rates described

in clauses (i) and (ii) by 2.1 percent.’’.

SEC. 4403. DISPROPORTIONATE SHARE.

(a) IN GENERAL.—Section 1886(d)(5)(F) (42 U.S.C.

1395ww(d)(5)(F)) is amended—

(1) in clause (i) by inserting ‘‘and before October 1, 1997’’

after ‘‘May 1, 1986’’;

(2) in clause (ii), by striking ‘‘The amount’’ and inserting

‘‘Subject to clause (ix), the amount’’; and

(3) by adding at the end the following new clause:

‘‘(ix) In the case of discharges occurring—
H. R. 2015—149

‘‘(I) during fiscal year 1998, the additional payment amount

otherwise determined under clause (ii) shall be reduced by

1 percent;

‘‘(II) during fiscal year 1999, such additional payment

amount shall be reduced by 2 percent;

‘‘(III) during fiscal year 2000, such additional payment

amount shall be reduced by 3 percent;

‘‘(IV) during fiscal year 2001, such additional payment

amount shall be reduced by 4 percent;

‘‘(V) during fiscal year 2002, such additional payment

amount shall be reduced by 5 percent; and

‘‘(VI) during fiscal year 2003 and each subsequent fiscal

year, such additional payment amount shall be reduced by

0 percent.’’.

(b) REPORT ON NEW PAYMENT FORMULA.—

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

enactment of this Act, the Secretary of Health and Human

Services shall submit to the Committee on Ways and Means

of the House of Representatives and the Committee on Finance

of the Senate a report that contains a formula for determining

additional payment amounts to hospitals under section

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

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

(2) FACTORS IN DETERMINATION OF FORMULA.—In determining such formula the Secretary shall—

(A) establish a single threshold for costs incurred by

hospitals in serving low-income patients, and

(B) consider the costs described in paragraph (3).

(3) The costs described in this paragraph are as follows:

(A) The costs incurred by the hospital during a period

(as determined by the Secretary) of furnishing hospital

services to individuals who are entitled to benefits under

part A of title XVIII of the Social Security Act and who

receive supplemental security income benefits under title

XVI of such Act (excluding any supplementation of those

benefits by a State under section 1616 of such Act (42

U.S.C. 1382e)).

(B) The costs incurred by the hospital during a period

(as so determined) of furnishing hospital services to individuals who receive medical assistance under the State plan

under title XIX of such Act and are not entitled to benefits

under part A of title XVIII of such Act (including individuals enrolled in a managed care organization (as defined

in section 1903(m)(1)(A) of such Act (42 U.S.C.

1396b(m)(1)(A)) or any other managed care plan under

such title and individuals who receive medical assistance

under such title pursuant to a waiver approved by the

Secretary under section 1115 of such Act (42 U.S.C. 1315)).

(c) DATA COLLECTION.—In developing the formula described

in subsection (b), the Secretary of Health and Human Services

may require any subsection (d) hospital (as defined in section

1886(d)(1)(B) of the Social Security Act (42 U.S.C. 1395ww(d)(1)(B)))

receiving additional payments by reason of section 1886(d)(5)(F)

of such Act (42 U.S.C. 1395ww(d)(5)(F)) to submit to the Secretary

any information that the Secretary determines is necessary to

develop such formula.
H. R. 2015—150

SEC. 4404. MEDICARE CAPITAL ASSET SALES PRICE EQUAL TO BOOK

VALUE.

(a) IN GENERAL.—Section 1861(v)(1)(O) (42 U.S.C.

1395x(v)(1)(O)) is amended—

(1) in clause (i)—

(A) by striking ‘‘and (if applicable) a return on equity

capital’’;

(B) by striking ‘‘hospital or skilled nursing facility’’

and inserting ‘‘provider of services’’;

(C) by striking ‘‘clause (iv)’’ and inserting ‘‘clause (iii)’’;

and

(D) by striking ‘‘the lesser of the allowable acquisition

cost’’ and all that follows and inserting ‘‘the historical cost

of the asset, as recognized under this title, less depreciation

allowed, to the owner of record as of the date of enactment

of the Balanced Budget Act of 1997 (or, in the case of

an asset not in existence as of that date, the first owner

of record of the asset after that date).’’;

(2) by striking clause (ii); and

(3) by redesignating clauses (iii) and (iv) as clauses (ii)

and (iii), respectively.

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

(a) apply to changes of ownership that occur after the third month

beginning after the date of enactment of this section.

SEC. 4405. ELIMINATION OF IME AND DSH PAYMENTS ATTRIBUTABLE

TO OUTLIER PAYMENTS.

(a) INDIRECT MEDICAL EDUCATION.—Section 1886(d)(5)(B)(i)(I)

(42 U.S.C. 1395ww(d)(5)(B)(i)(I)) is amended by inserting ‘‘, for

cases qualifying for additional payment under subparagraph (A)(i),’’

before ‘‘the amount paid to the hospital under subparagraph (A)’’.

(b) DISPROPORTIONATE SHARE ADJUSTMENTS.—Section

1886(d)(5)(F)(ii)(I) (42 U.S.C. 1395ww(d)(5)(F)(ii)(I)) is amended by

inserting ‘‘, for cases qualifying for additional payment under

subparagraph (A)(i),’’ before ‘‘the amount paid to the hospital under

subparagraph (A)’’.

(c) COST OUTLIER PAYMENTS.—Section 1886(d)(5)(A)(ii) (42

U.S.C. 1395ww(d)(5)(A)(ii)) is amended by striking ‘‘exceed the

applicable DRG prospective payment rate’’ and inserting ‘‘exceed

the sum of the applicable DRG prospective payment rate plus

any amounts payable under subparagraphs (B) and (F)’’.

(d) EFFECTIVE DATE.—The amendments made by this section

apply to discharges occurring after September 30, 1997.

SEC. 4406. INCREASE BASE PAYMENT RATE TO PUERTO RICO HOSPITALS.

Section 1886(d)(9)(A) (42 U.S.C. 1395ww(d)(9)(A)) is amended—

(1) in the matter preceding clause (i), by striking ‘‘in a

fiscal year beginning on or after October 1, 1987,’’,

(2) in clause (i), by striking ‘‘75 percent’’ and inserting,

‘‘for discharges beginning on or after October 1, 1997, 50 percent

(and for discharges between October 1, 1987, and September

30, 1997, 75 percent)’’, and

(3) in clause (ii), by striking ‘‘25 percent’’ and inserting,

‘‘for discharges beginning in a fiscal year beginning on or after

October 1, 1997, 50 percent (and for discharges between October

1, 1987 and September 30, 1997, 25 percent)’’.
H. R. 2015—151

SEC. 4407. CERTAIN HOSPITAL DISCHARGES TO POST ACUTE CARE.

Section 1886(d)(5) (42 U.S.C. 1395ww(d)(5)) is amended—

(1) in subparagraph (I)(ii) by inserting ‘‘not taking in

account the effect of subparagraph (J),’’ after ‘‘in a fiscal

year, ’’; and

(2) by adding at the end the following new subparagraph:

‘‘(J)(i) The Secretary shall treat the term ‘transfer case’ (as

defined in subparagraph (I)(ii)) as including the case of a qualified

discharge (as defined in clause (ii)), which is classified within a

diagnosis-related group described in clause (iii), and which occurs

on or after October 1, 1998. In the case of a qualified discharge

for which a substantial portion of the costs of care are incurred

in the early days of the inpatient stay (as defined by the Secretary),

in no case may the payment amount otherwise provided under

this subsection exceed an amount equal to the sum of—

‘‘(I) 50 percent of the amount of payment under this subsection for transfer cases (as established under subparagraph

(I)(i)), and

‘‘(II) 50 percent of the amount of payment which would

have been made under this subsection with respect to the

qualified discharge if no transfer were involved.

‘‘(ii) For purposes of clause (i), subject to clause (iii), the term

‘qualified discharge’ means a discharge classified with a diagnosisrelated group (described in clause (iii)) of an individual from a

subsection (d) hospital, if upon such discharge the individual—

‘‘(I) is admitted as an inpatient to a hospital or hospital

unit that is not a subsection (d) hospital for the provision

of inpatient hospital services;

‘‘(II) is admitted to a skilled nursing facility;

‘‘(III) is provided home health services from a home health

agency, if such services relate to the condition or diagnosis

for which such individual received inpatient hospital services

from the subsection (d) hospital, and if such services are provided within an appropriate period (as determined by the Secretary); or

‘‘(IV) for discharges occurring on or after October 1, 2000,

the individual receives post discharge services described in

clause (iv)(I).

‘‘(iii) Subject to clause (iv), a diagnosis-related group described

in this clause is—

‘‘(I) 1 of 10 diagnosis-related groups selected by the Secretary based upon a high volume of discharges classified within

such groups and a disproportionate use of post discharge services described in clause (ii); and

‘‘(II) a diagnosis-related group specified by the Secretary

under clause (iv)(II).

‘‘(iv) The Secretary shall include in the proposed rule published

under subsection (e)(5)(A) for fiscal year 2001, a description of

the effect of this subparagraph. The Secretary may include in

the proposed rule (and in the final rule published under paragraph

(6)) for fiscal year 2001 or a subsequent fiscal year, a description

of—

‘‘(I) post-discharge services not described in subclauses (I),

(II), and (III) of clause (ii), the receipt of which results in

a qualified discharge; and

‘‘(II) diagnosis-related groups described in clause (iii)(I) in

addition to the 10 selected under such clause.’’.
H. R. 2015—152

SEC. 4408. RECLASSIFICATION OF CERTAIN COUNTIES AS LARGE

URBAN AREAS UNDER MEDICARE PROGRAM.

(a) IN GENERAL.—For purposes of section 1886(d) of the Social

Security Act (42 U.S.C. 1395ww(d)), the large urban area of Charlotte-Gastonia-Rock Hill-North Carolina-South Carolina may be

deemed to include Stanly County, North Carolina.

(b) EFFECTIVE DATE.—This section shall apply with respect

to discharges occurring on or after October 1, 1997.

SEC. 4409. GEOGRAPHIC RECLASSIFICATION FOR CERTAIN DISPROPORTIONATELY LARGE HOSPITALS.

(a) NEW GUIDELINES FOR RECLASSIFICATION.—Notwithstanding

the guidelines published under section 1886(d)(10)(D)(i)(I) of the

Social Security Act (42 U.S.C. 1395ww(d)(10)(D)(i)(I)), the Secretary

of Health and Human Services shall publish and use alternative

guidelines under which a hospital described in subsection (b) qualifies for geographic reclassification under such section for a fiscal

year beginning with fiscal year 1998.

(b) HOSPITALS COVERED.—A hospital described in this subsection is a hospital that demonstrates that—

(1) the average hourly wage paid by the hospital is not

less than 108 percent of the average hourly wage paid by

all other hospitals located in the Metropolitan Statistical Area

(or the New England County Metropolitan Area) in which the

hospital is located;

(2) not less than 40 percent of the adjusted uninflated

wages paid by all hospitals located in such Area is attributable

to wages paid by the hospital; and

(3) the hospital submitted an application requesting

reclassification for purposes of wage index under section

1886(d)(10)(C) of such Act (42 U.S.C. 1395ww(d)(10)(C)) in each

of fiscal years 1992 through 1997 and that such request was

approved for each of such fiscal years.

SEC. 4410. FLOOR ON AREA WAGE INDEX.

(a) IN GENERAL.—For purposes of section 1886(d)(3)(E) of the

Social Security Act (42 U.S.C. 1395ww(d)(3)(E)) for discharges occurring on or after October 1, 1997, the area wage index applicable

under such section to any hospital which is not located in a rural

area (as defined in section 1886(d)(2)(D) of such Act (42 U.S.C.

1395ww(d)(2)(D)) may not be less than the area wage index

applicable under such section to hospitals located in rural areas

in the State in which the hospital is located.

(b) IMPLEMENTATION.—The Secretary of Health and Human

Services shall adjust the area wage index referred to in subsection

(a) for hospitals not described in such subsection in a manner

which assures that the aggregate payments made under section

1886(d) of the Social Security Act (42 U.S.C. 1395ww(d)) in a

fiscal year for the operating costs of inpatient hospital services

are not greater or less than those which would have been made

in the year if this section did not apply.

(c) EXCLUSION OF CERTAIN WAGES.—In the case of a hospital

that is owned by a municipality and that was reclassified as an

urban hospital under section 1886(d)(10) of the Social Security

Act for fiscal year 1996, in calculating the hospital’s average hourly

wage for purposes of geographic reclassification under such section

for fiscal year 1998, the Secretary of Health and Human Services
H. R. 2015—153

shall exclude the general service wages and hours of personnel

associated with a skilled nursing facility that is owned by the

hospital of the same municipality and that is physically separated

from the hospital to the extent that such wages and hours of

such personnel are not shared with the hospital and are separately

documented. A hospital that applied for and was denied reclassification as an urban hospital for fiscal year 1998, but that would

have received reclassification had the exclusion required by this

section been applied to it, shall be reclassified as an urban hospital

for fiscal year 1998.

CHAPTER 2—PAYMENT OF PPS-EXEMPT HOSPITALS

Subchapter A—General Payment Provisions

SEC. 4411. PAYMENT UPDATE.

(a) IN GENERAL.—Section 1886(b)(3)(B) (42 U.S.C.

1395ww(b)(3)(B)) is amended—

(1) in clause (ii)—

(A) by striking ‘‘and’’ at the end of subclause (V),

(B) by redesignating subclause (VI) as subclause (VIII);

and

(C) by inserting after subclause (V), the following subclauses:

‘‘(VI) for fiscal year 1998, is 0 percent;

‘‘(VII) for fiscal years 1999 through 2002, is the applicable

update factor specified under clause (vi) for the fiscal year;

and’’; and

(2) by adding at the end the following new clause:

‘‘(vi) For purposes of clause (ii)(VII) for a fiscal year, if a

hospital’s allowable operating costs of inpatient hospital services

recognized under this title for the most recent cost reporting period

for which information is available—

‘‘(I) is equal to, or exceeds, 110 percent of the hospital’s

target amount (as determined under subparagraph (A)) for

such cost reporting period, the applicable update factor specified

under this clause is the market basket percentage;

‘‘(II) exceeds 100 percent, but is less than 110 percent,

of such target amount for the hospital, the applicable update

factor specified under this clause is 0 percent or, if greater,

the market basket percentage minus 0.25 percentage points

for each percentage point by which such allowable operating

costs (expressed as a percentage of such target amount) is

less than 110 percent of such target amount;

‘‘(III) is equal to, or less than 100 percent, but exceeds 2⁄3 of such target amount for the hospital, the applicable update

factor specified under this clause is 0 percent or, if greater,

the market basket percentage minus 2.5 percentage points;

or

‘‘(IV) does not exceed 2⁄3 of such target amount for the

hospital, the applicable update factor specified under this clause

is 0 percent.’’.

(b) NO EFFECT OF PAYMENT REDUCTION ON EXCEPTIONS AND

ADJUSTMENTS.—Section 1886(b)(4)(A)(ii) (42 U.S.C.

1395ww(b)(4)(A)(ii)) is amended by adding at the end the following

new sentence: ‘‘In making such reductions, the Secretary shall

treat the applicable update factor described in paragraph (3)(B)(vi)
H. R. 2015—154

for a fiscal year as being equal to the market basket percentage

for that year.’’.

SEC. 4412. REDUCTIONS TO CAPITAL PAYMENTS FOR CERTAIN PPSEXEMPT HOSPITALS AND UNITS.

Section 1886(g) (42 U.S.C. 1395ww(g)) is amended by adding

at the end the following new paragraph:

‘‘(4) In determining the amount of the payments that are attributable to portions of cost reporting periods occurring during fiscal

years 1998 through 2002 and that may be made under this title

with respect to capital-related costs of inpatient hospital services

of a hospital which is described in clause (i), (ii), or (iv) of subsection

(d)(1)(B) or a unit described in the matter after clause (v) of such

subsection, the Secretary shall reduce the amounts of such payments otherwise determined under this title by 15 percent.’’.

SEC. 4413. REBASING.

(a) OPTION OF REBASING FOR HOSPITALS IN OPERATION BEFORE

1990.—Section 1886(b)(3)(42 U.S.C. 1395ww(b)(3)) is amended—

(1) in subparagraph (A) by striking ‘‘subparagraphs (C),

(D), and (E)’’ and inserting ‘‘subparagraph (C) and succeeding

subparagraphs’’, and

(2) by adding at the end the following new subparagraph:

‘‘(F)(i) In the case of a hospital (or unit described in the matter

following clause (v) of subsection (d)(1)(B)) that received payment

under this subsection for inpatient hospital services furnished during cost reporting periods beginning before October 1, 1990, that

is within a class of hospital described in clause (iii), and that

elects (in a form and manner determined by the Secretary) this

subparagraph to apply to the hospital, the target amount for the

hospital’s 12-month cost reporting period beginning during fiscal

year 1998 is equal to the average described in clause (ii).

‘‘(ii) The average described in this clause for a hospital or

unit shall be determined by the Secretary as follows:

‘‘(I) The Secretary shall determine the allowable operating

costs for inpatient hospital services for the hospital or unit

for each of the 5 cost reporting periods for which the Secretary

has the most recent settled cost reports as of the date of

the enactment of this subparagraph.

‘‘(II) The Secretary shall increase the amount determined

under subclause (I) for each cost reporting period by the

applicable percentage increase under subparagraph (B)(ii) for

each subsequent cost reporting period up to the cost reporting

period described in clause (i).

‘‘(III) The Secretary shall identify among such 5 cost reporting periods the cost reporting periods for which the amount

determined under subclause (II) is the highest, and the lowest.

‘‘(IV) The Secretary shall compute the averages of the

amounts determined under subclause (II) for the 3 cost reporting periods not identified under subclause (III).

‘‘(iii) For purposes of this subparagraph, each of the following

shall be treated as a separate class of hospital:

‘‘(I) Hospitals described in clause (i) of subsection (d)(1)(B)

and psychiatric units described in the matter following clause

(v) of such subsection.

‘‘(II) Hospitals described in clause (ii) of such subsection

and rehabilitation units described in the matter following clause

(v) of such subsection.
H. R. 2015—155

‘‘(III) Hospitals described in clause (iii) of such subsection.

‘‘(IV) Hospitals described in clause (iv) of such subsection.

‘‘(V) Hospitals described in clause (v) of such subsection.’’.

(b) CERTAIN LONG-TERM CARE HOSPITALS.—Section 1886(b)(3)

(42 U.S.C. 1395ww(b)(3)), as amended by subsection (a), is amended

by adding at the end the following new subparagraph:

‘‘(G)(i) In the case of a qualified long-term care hospital (as

defined in clause (ii)) that elects (in a form and manner determined

by the Secretary) this subparagraph to apply to the hospital, the

target amount for the hospital’s 12-month cost reporting period

beginning during fiscal year 1998 is equal to the allowable operating

costs of inpatient hospital services (as defined in subsection (a)(4))

recognized under this title for the hospital for the 12-month cost

reporting period beginning during fiscal year 1996, increased by

the applicable percentage increase for the cost reporting period

beginning during fiscal year 1997.

‘‘(ii) In clause (i), a ‘qualified long-term care hospital’ means,

with respect to a cost reporting period, a hospital described in

clause (iv) of subsection (d)(1)(B) during each of the 2 cost reporting

periods for which the Secretary has the most recent settled cost

reports as of the date of the enactment of this subparagraph for

each of which—

‘‘(I) the hospital’s allowable operating costs of inpatient

hospital services recognized under this title exceeded 115 percent of the hospital’s target amount, and

‘‘(II) the hospital would have a disproportionate patient

percentage of at least 70 percent (as determined by the Secretary under subsection (d)(5)(F)(vi)) if the hospital were a

subsection (d) hospital.’’.

SEC. 4414. CAP ON TEFRA LIMITS.

Section 1886(b)(3) (42 U.S.C. 1395ww(b)(3)), as amended by

section 4413, is amended by adding at the end the following new

subparagraph:

‘‘(H)(i) In the case of a hospital or unit that is within a class

of hospital described in clause (iv), the Secretary shall estimate

the 75th percentile of the target amounts for such hospitals within

such class for cost reporting periods ending during fiscal year 1996.

‘‘(ii) The Secretary shall update the amount determined under

clause (i), for each cost reporting period after the cost reporting

period described in such clause and up to the first cost reporting

period beginning on or after October 1, 1997, by a factor equal

to the market basket percentage increase.

‘‘(iii) For cost reporting periods beginning during each of fiscal

years 1999 through 2002, the Secretary shall update such amount

by a factor equal to the market basket percentage increase.

‘‘(iv) For purposes of this subparagraph, each of the following

shall be treated as a separate class of hospital:

‘‘(I) Hospitals described in clause (i) of subsection (d)(1)(B)

and psychiatric units described in the matter following clause

(v) of such subsection.

‘‘(II) Hospitals described in clause (ii) of such subsection

and rehabilitation units described in the matter following clause

(v) of such subsection.

‘‘(III) Hospitals described in clause (iv) of such subsection.’’.
H. R. 2015—156

SEC. 4415. BONUS AND RELIEF PAYMENTS.

(a) CHANGE IN BONUS PAYMENT.—Section 1886(b)(1) (42 U.S.C.

1395ww(b)(1)) is amended in subparagraph (A) by striking all that

follows ‘‘plus—’’ and inserting the following:

‘‘(i) 15 percent of the amount by which the target

amount exceeds the amount of the operating costs, or

‘‘(ii) 2 percent of the target amount,

whichever is less;’’.

(b) CONTINUOUS IMPROVEMENT BONUS PAYMENTS.—Section

1886(b) (42 U.S.C. 1395ww(b)) is amended—

(1) in paragraph (1), by inserting ‘‘plus the amount, if

any, provided under paragraph (2)’’ before ‘‘except that in no

case’’; and

(2) by inserting after paragraph (1), the following new

paragraph:

‘‘(2)(A) In addition to the payment computed under paragraph

(1), in the case of an eligible hospital (described in subparagraph

(B)) for a cost reporting period beginning on or after October 1,

1997, the amount of payment on a per discharge basis under paragraph (1) shall be increased by the lesser of—

‘‘(i) 50 percent of the amount by which the operating costs

are less than the expected costs (as defined in subparagraph

(D)) for the period; or

‘‘(ii) 1 percent of the target amount for the period.

‘‘(B) For purposes of this paragraph, an ‘eligible hospital’ means

with respect to a cost reporting period, a hospital—

‘‘(i) that has received payments under this subsection for

at least 3 full cost reporting periods before that cost reporting

period, and

‘‘(ii) whose operating costs for the period are less than

the least of its target amount, its trended costs (as defined

in subparagraph (C)), or its expected costs (as defined in

subparagraph (D)) for the period.

‘‘(C) For purposes of subparagraph (B)(ii), the term ‘trended

costs’ means for a hospital cost reporting period ending in a fiscal

year—

‘‘(i) in the case of a hospital for which its cost reporting

period ending in fiscal year 1996 was its third or subsequent

full cost reporting period for which it receives payments under

this subsection, the lesser of the operating costs or target

amount for that hospital for its cost reporting period ending

in fiscal year 1996, or

‘‘(ii) in the case of any other hospital, the operating costs

for that hospital for its third full cost reporting period for

which it receives payments under this subsection,

increased (in a compounded manner) for each succeeding fiscal

year (through the fiscal year involved) by the market basket

percentage increase for the fiscal year.

‘‘(D) For purposes of this paragraph, the term ‘expected costs’,

with respect to the cost reporting period ending in a fiscal year,

means the lesser of the operating costs of inpatient hospital services

or target amount per discharge for the previous cost reporting

period updated by the market basket percentage increase (as

defined in paragraph (3)(B)(iii)) for the fiscal year.’’.

(c) CHANGE IN RELIEF PAYMENTS.—Section 1886(b)(1) (42 U.S.C.

1395ww(b)(1)), as amended in subsections (a) and (b), is further

amended—
H. R. 2015—157

(1) by redesignating subparagraph (B) as subparagraph

(C)

(2) in subparagraph (C), as so redesignated—

(A) by striking ‘‘greater than the target amount’’ and

inserting ‘‘greater than 110 percent of the target amount’’,

and

(B) by striking ‘‘exceed the target amount’’ and inserting ‘‘exceed 110 percent of the target amount’’, and

(3) by inserting after subparagraph (A), the following new

subparagraph:

‘‘(B) are greater than the target amount but do not exceed

110 percent of the target amount, the amount of the payment

with respect to those operating costs payable under part A

on a per discharge basis shall equal the target amount; or’’.

(d) REPORT.—Not later than October 1, 1999, the Secretary

of Health and Human Services shall submit to the Committee

on Ways and Means of the House of Representatives and the

Committee on Finance of the Senate a report that describes the

effect of the amendments to section 1886(b)(1) of the Social Security

Act (42 U.S.C. 1395ww(b)(1)), made under this section, on psychiatric hospitals (as defined in section 1886(d)(1)(B)(i) of such

Act (42 U.S.C. 1395ww(d)(1)(B)(i)) that have approved medical residency training programs under title XVIII of such Act (42 U.S.C.

1395 et seq.)).

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

(a) and (c) shall apply with respect to cost reporting periods beginning on or after October 1, 1997.

SEC. 4416. CHANGE IN PAYMENT AND TARGET AMOUNT FOR NEW

PROVIDERS.

Section 1886(b) (42 U.S.C. 1395ww(b)) is amended—

(1) by adding at the end the following new paragraph:

‘‘(7)(A) Notwithstanding paragraph (1), in the case of a hospital

or unit that is within a class of hospital described in subparagraph

(B) which first receives payments under this section on or after

October 1, 1997—

‘‘(i) for each of the first 2 cost reporting periods for which

the hospital has a settled cost report, the amount of the payment with respect to operating costs described in paragraph

(1) under part A on a per discharge or per admission basis

(as the case may be) is equal to the lesser of—

‘‘(I) the amount of operating costs for such respective

period, or

‘‘(II) 110 percent of the national median of the target

amount for hospitals in the same class as the hospital

for cost reporting periods ending during fiscal year 1996,

updated by the hospital market basket increase percentage

to the fiscal year in which the hospital first received payments under this section, as adjusted under subparagraph

(C); and

‘‘(ii) for purposes of computing the target amount for the

subsequent cost reporting period, the target amount for the

preceding cost reporting period is equal to the amount determined under clause (i) for such preceding period.

‘‘(B) For purposes of this paragraph, each of the following

shall be treated as a separate class of hospital:
H. R. 2015—158

‘‘(i) Hospitals described in clause (i) of subsection (d)(1)(B)

and psychiatric units described in the matter following clause

(v) of such subsection.

‘‘(ii) Hospitals described in clause (ii) of such subsection

and rehabilitation units described in the matter following clause

(v) of such subsection.

‘‘(iii) Hospitals described in clause (iv) of such subsection.

‘‘(C) In applying subparagraph (A)(i)(II) in the case of a hospital

or unit, the Secretary shall provide for an appropriate adjustment

to the labor-related portion of the amount determined under such

subparagraph to take into account differences between average

wage-related costs in the area of the hospital and the national

average of such costs within the same class of hospital.’’; and

(2) in paragraph (3)(A), as amended in sections 4413 and

4414, by inserting ‘‘and in paragraph (7)(A)(ii),’’ before ‘‘for

purposes of’’.

SEC. 4417. TREATMENT OF CERTAIN LONG-TERM CARE HOSPITALS.

(a) IN GENERAL.—(1) Section 1886(d)(1)(B) (42 U.S.C.

1395ww(d)(1)(B)) is amended by adding at the end the following

new sentence: ‘‘A hospital that was classified by the Secretary

on or before September 30, 1995, as a hospital described in clause

(iv) shall continue to be so classified notwithstanding that it is

located in the same building as, or on the same campus as, another

hospital.’’.

(2) EFFECTIVE DATE.—The amendment made by paragraph (1)

shall apply to discharges occurring on or after October 1, 1995.

(b) CERTAIN LONG-TERM CARE HOSPITALS THAT TREAT CANCER

PATIENTS.—(1) Section 1886(d)(1)(B)(iv) (42 U.S.C.

1395ww(d)(1)(B)(iv)) is amended—

(A) by inserting ‘‘(I)’’ after ‘‘(iv)’’; and

(B) by adding at the end the following:

‘‘(II) a hospital that first received payment under this subsection in 1986 which has an average inpatient length of stay

(as determined by the Secretary) of greater than 20 days and

that has 80 percent or more of its annual medicare inpatient

discharges with a principal diagnosis that reflects a finding

of neoplastic disease in the 12-month cost reporting period

ending in fiscal year 1997, or’’.

(2) EFFECTIVE DATE.—The amendment made by paragraph (1)

shall apply to cost reporting periods beginning on or after the

date of the enactment of this Act.

SEC. 4418. TREATMENT OF CERTAIN CANCER HOSPITALS.

(a) IN GENERAL.—Section 1886(d)(1) (42 U.S.C. 1395ww(d)(1))

is amended—

(1) in subparagraph (B)(v)—

(A) by inserting ‘‘(I)’’ after ‘‘(v)’’;

(B) by striking the semicolon at the end and inserting

‘‘, or’’; and

(C) by adding at the end the following:

‘‘(II) a hospital that was recognized as a comprehensive

cancer center or clinical cancer research center by the National

Cancer Institute of the National Institutes of Health as of

April 20, 1983, that is located in a State which, as of December

19, 1989, was not operating a demonstration project under

section 1814(b), that applied and was denied, on or before

December 31, 1990, for classification as a hospital involved
H. R. 2015—159

extensively in treatment for or research on cancer under this

clause (as in effect on the day before the date of the enactment

of this subclause), that as of the date of the enactment of

this subclause, is licensed for less than 50 acute care beds,

and that demonstrates for the 4–year period ending on December 31, 1996, that at least 50 percent of its total discharges

have a principal finding of neoplastic disease, as defined in

subparagraph (E);’’ and

(2) by adding at the end the following:

‘‘(E) For purposes of subparagraph (B)(v)(II) only, the term

‘principal finding of neoplastic disease’ means the condition established after study to be chiefly responsible for occasioning the

admission of a patient to a hospital, except that only discharges

with ICD–9–CM principal diagnosis codes of 140 through 239,

V58.0, V58.1, V66.1, V66.2, or 990 will be considered to reflect

such a principal diagnosis.’’.

(b) PAYMENT.—

(1) APPLICATION TO COST REPORTING PERIODS.—Any classification by reason of section 1886(d)(1)(B)(v)(II) of the Social

Security Act (42 U.S.C. 1395ww(d)(1)(B)(v)(II)) (as added by

subsection (a)) shall apply to all cost reporting periods beginning on or after January 1, 1991.

(2) BASE YEAR.—Notwithstanding the provisions of section

1886(b)(3)(E) of such Act (42 U.S.C. 1395ww(b)(3)(E)) or other

provisions to the contrary, the base cost reporting period for

purposes of determining the target amount for any hospital

classified by reason of section 1886(d)(1)(B)(v)(II) of such Act

shall be either—

(A) the hospital’s cost reporting period beginning during fiscal year 1990, or

(B) pursuant to an election under 1886(b)(3)(G) of such

Act (42 U.S.C. 1395ww(b)(3)(G)), as added in section

4413(b), the period provided for under such section.

(3) DEADLINE FOR PAYMENTS.—Any payments owed to a

hospital by reason of this subsection shall be made expeditiously, but in no event later than 1 year after the date of

the enactment of this Act.

SEC. 4419. ELIMINATION OF EXEMPTIONS FOR CERTAIN HOSPITALS.

(a) REDUCTION OF EXEMPTIONS.—

(1) IN GENERAL.—Section 1886(b)(4)(A)(i) (42 U.S.C.

1395ww(b)(4)(A)(i)) is amended in the first sentence by striking

‘‘The Secretary shall provide for an exemption from, or an

exception and adjustment to, ’’ and inserting ‘‘The Secretary

shall provide for an exception and adjustment to (and in the

case of a hospital or unit described in subsection (d)(1)(B)(iii),

may provide an exemption from)’’.

(2) EFFECTIVE DATE.—The amendment made by paragraph

(1) shall apply to hospitals or units that first qualify as a

hospital or unit described in section 1886(d)(1)(B) (42 U.S.C.

1395ww(d)(1)(B)) for cost reporting periods beginning on or

after October 1, 1997.

(b) REPORT ON EXCEPTIONS.—The Secretary of Health and

Human Services shall publish annually in the Federal Register

a report describing the total amount of payments made to hospitals

by reason of section 1886(b)(4) of the Social Security Act (42 U.S.C.
H. R. 2015—160

1395ww(b)(4)), as amended by subsection (a), ending during the

previous fiscal year.

Subchapter B—Prospective Payment System for PPSExempt Hospitals

SEC. 4421. PROSPECTIVE PAYMENT FOR INPATIENT REHABILITATION

HOSPITAL SERVICES.

(a) IN GENERAL.—Section 1886 (42 U.S.C. 1395ww) is amended

by adding at the end the following new subsection:

‘‘(j) PROSPECTIVE PAYMENT FOR INPATIENT REHABILITATION

SERVICES.—

‘‘(1) PAYMENT DURING TRANSITION PERIOD.—

‘‘(A) IN GENERAL.—Notwithstanding section 1814(b),

but subject to the provisions of section 1813, the amount

of the payment with respect to the operating and capital

costs of inpatient hospital services of a rehabilitation hospital or a rehabilitation unit (in this subsection referred

to as a ‘rehabilitation facility’), in a cost reporting period

beginning on or after October 1, 2000, and before October

1, 2002, is equal to the sum of—

‘‘(i) the TEFRA percentage (as defined in subparagraph (C)) of the amount that would have been paid

under part A with respect to such costs if this subsection did not apply, and

‘‘(ii) the prospective payment percentage (as

defined in subparagraph (C)) of the product of (I) the

per unit payment rate established under this subsection for the fiscal year in which the payment unit

of service occurs, and (II) the number of such payment

units occurring in the cost reporting period.

‘‘(B) FULLY IMPLEMENTED SYSTEM.—Notwithstanding

section 1814(b), but subject to the provisions of section

1813, the amount of the payment with respect to the operating and capital costs of inpatient hospital services of a

rehabilitation facility for a payment unit in a cost reporting

period beginning on or after October 1, 2002, is equal

to the per unit payment rate established under this subsection for the fiscal year in which the payment unit of

service occurs.

‘‘(C) TEFRA AND PROSPECTIVE PAYMENT PERCENTAGES

SPECIFIED.—For purposes of subparagraph (A), for a cost

reporting period beginning—

‘‘(i) on or after October 1, 2000, and before October

1, 2001, the ‘TEFRA percentage’ is 662⁄3 percent and

the ‘prospective payment percentage’ is 331⁄3 percent;

and

‘‘(ii) on or after October 1, 2001, and before October

1, 2002, the ‘TEFRA percentage’ is 331⁄3 percent and

the ‘prospective payment percentage’ is 662⁄3 percent.

‘‘(D) PAYMENT UNIT.—For purposes of this subsection,

the term ‘payment unit’ means a discharge, day of inpatient

hospital services, or other unit of payment defined by the

Secretary.

‘‘(2) PATIENT CASE MIX GROUPS.—

‘‘(A) ESTABLISHMENT.—The Secretary shall establish—
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‘‘(i) classes of patients of rehabilitation facilities

(each in this subsection referred to as a ‘case mix

group’), based on such factors as the Secretary deems

appropriate, which may include impairment, age,

related prior hospitalization, comorbidities, and functional capability of the patient; and

‘‘(ii) a method of classifying specific patients in

rehabilitation facilities within these groups.

‘‘(B) WEIGHTING FACTORS.—For each case mix group

the Secretary shall assign an appropriate weighting which

reflects the relative facility resources used with respect

to patients classified within that group compared to

patients classified within other groups.

‘‘(C) ADJUSTMENTS FOR CASE MIX.—

‘‘(i) IN GENERAL.—The Secretary shall from time

to time adjust the classifications and weighting factors

established under this paragraph as appropriate to

reflect changes in treatment patterns, technology, case

mix, number of payment units for which payment is

made under this title, and other factors which may

affect the relative use of resources. Such adjustments

shall be made in a manner so that changes in aggregate

payments under the classification system are a result

of real changes and are not a result of changes in

coding that are unrelated to real changes in case mix.

‘‘(ii) ADJUSTMENT.—Insofar as the Secretary determines that such adjustments for a previous fiscal year

(or estimates that such adjustments for a future fiscal

year) did (or are likely to) result in a change in aggregate payments under the classification system during

the fiscal year that are a result of changes in the

coding or classification of patients that do not reflect

real changes in case mix, the Secretary shall adjust

the per payment unit payment rate for subsequent

years so as to eliminate the effect of such coding or

classification changes.

‘‘(D) DATA COLLECTION.—The Secretary is authorized

to require rehabilitation facilities that provide inpatient

hospital services to submit such data as the Secretary

deems necessary to establish and administer the prospective payment system under this subsection.

‘‘(3) PAYMENT RATE.— ‘‘(A) IN GENERAL.—The Secretary shall determine a

prospective payment rate for each payment unit for which

such rehabilitation facility is entitled to receive payment

under this title. Subject to subparagraph (B), such rate

for payment units occurring during a fiscal year shall be

based on the average payment per payment unit under

this title for inpatient operating and capital costs of

rehabilitation facilities using the most recent data available

(as estimated by the Secretary as of the date of establishment of the system) adjusted—

‘‘(i) by updating such per-payment-unit amount to

the fiscal year involved by the weighted average of

the applicable percentage increases provided under

subsection (b)(3)(B)(ii) (for cost reporting periods beginning during the fiscal year) covering the period from
H. R. 2015—162

the midpoint of the period for such data through the

midpoint of fiscal year 2000 and by an increase factor

(described in subparagraph (C)) specified by the Secretary for subsequent fiscal years up to the fiscal year

involved;

‘‘(ii) by reducing such rates by a factor equal to

the proportion of payments under this subsection (as

estimated by the Secretary) based on prospective payment amounts which are additional payments

described in paragraph (4) (relating to outlier and

related payments);

‘‘(iii) for variations among rehabilitation facilities

by area under paragraph (6);

‘‘(iv) by the weighting factors established under

paragraph (2)(B); and

‘‘(v) by such other factors as the Secretary determines are necessary to properly reflect variations in

necessary costs of treatment among rehabilitation

facilities.

‘‘(B) BUDGET NEUTRAL RATES.—The Secretary shall

establish the prospective payment amounts under this subsection for payment units during fiscal years 2001 and

2002 at levels such that, in the Secretary’s estimation,

the amount of total payments under this subsection for

such fiscal years (including any payment adjustments

pursuant to paragraphs (4) and (6)) shall be equal to 98

percent of the amount of payments that would have been

made under this title during the fiscal years for operating

and capital costs of rehabilitation facilities had this subsection not been enacted. In establishing such payment

amounts, the Secretary shall consider the effects of the

prospective payment system established under this subsection on the total number of payment units from

rehabilitation facilities and other factors described in

subparagraph (A).

‘‘(C) INCREASE FACTOR.—For purposes of this subsection

for payment units in each fiscal year (beginning with fiscal

year 2001), the Secretary shall establish an increase factor.

Such factor shall be based on an appropriate percentage

increase in a market basket of goods and services comprising services for which payment is made under this subsection, which may be the market basket percentage

increase described in subsection (b)(3)(B)(iii).

‘‘(4) OUTLIER AND SPECIAL PAYMENTS.—

‘‘(A) OUTLIERS.—

‘‘(i) IN GENERAL.—The Secretary may provide for

an additional payment to a rehabilitation facility for

patients in a case mix group, based upon the patient

being classified as an outlier based on an unusual

length of stay, costs, or other factors specified by the

Secretary.

‘‘(ii) PAYMENT BASED ON MARGINAL COST OF CARE.—

The amount of such additional payment under clause

(i) shall be determined by the Secretary and shall

approximate the marginal cost of care beyond the cutoff

point applicable under clause (i).
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‘‘(iii) TOTAL PAYMENTS.—The total amount of the

additional payments made under this subparagraph

for payment units in a fiscal year may not exceed

5 percent of the total payments projected or estimated

to be made based on prospective payment rates for

payment units in that year.

‘‘(B) ADJUSTMENT.—The Secretary may provide for such

adjustments to the payment amounts under this subsection

as the Secretary deems appropriate to take into account

the unique circumstances of rehabilitation facilities located

in Alaska and Hawaii.

‘‘(5) PUBLICATION.—The Secretary shall provide for publication in the Federal Register, on or before August 1 before

each fiscal year (beginning with fiscal year 2001), of the classification and weighting factors for case mix groups under paragraph (2) for such fiscal year and a description of the methodology and data used in computing the prospective payment rates

under this subsection for that fiscal year.

‘‘(6) AREA WAGE ADJUSTMENT.—The Secretary shall adjust

the proportion (as estimated by the Secretary from time to

time) of rehabilitation facilities’ costs which are attributable

to wages and wage-related costs, of the prospective payment

rates computed under paragraph (3) for area differences in

wage levels by a factor (established by the Secretary) reflecting

the relative hospital wage level in the geographic area of the

rehabilitation facility compared to the national average wage

level for such facilities. Not later than October 1, 2001 (and

at least every 36 months thereafter), the Secretary shall update

the factor under the preceding sentence on the basis of information available to the Secretary (and updated as appropriate)

of the wages and wage-related costs incurred in furnishing

rehabilitation services. Any adjustments or updates made under

this paragraph for a fiscal year shall be made in a manner

that assures that the aggregated payments under this subsection in the fiscal year are not greater or less than those

that would have been made in the year without such adjustment.

‘‘(7) LIMITATION ON REVIEW.—There shall be no administrative or judicial review under section 1869, 1878, or otherwise

of the establishment of—

‘‘(A) case mix groups, of the methodology for the classification of patients within such groups, and of the appropriate weighting factors thereof under paragraph (2),

‘‘(B) the prospective payment rates under paragraph

(3),

‘‘(C) outlier and special payments under paragraph

(4), and

‘‘(D) area wage adjustments under paragraph (6).’’.

(b) CONFORMING AMENDMENTS.—Section 1886(b) (42 U.S.C.

1395ww(b)) is amended—

(1) in paragraph (1), by inserting ‘‘and other than a

rehabilitation facility described in subsection (j)(1)’’ after ‘‘subsection (d)(1)(B)’’, and

(2) in paragraph (3)(B)(i), by inserting ‘‘and subsection (j)’’

after ‘‘For purposes of subsection (d)’’.

(c) EFFECTIVE DATE.—The amendments made by this section

shall apply to cost reporting periods beginning on or after October
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1, 2000, except that the Secretary of Health and Human Services

may require the submission of data under section 1886(j)(2)(D)

of the Social Security Act (as added by subsection (a)) on and

after the date of the enactment of this section.

SEC. 4422. DEVELOPMENT OF PROPOSAL ON PAYMENTS FOR LONGTERM CARE HOSPITALS.

(a) IN GENERAL.— (1) LEGISLATIVE PROPOSAL.—The Secretary of Health and

Human Services shall develop a legislative proposal for

establishing a case-mix adjusted prospective payment system

for payment of long-term care hospitals described in section

1886(d)(1)(B)(iv) of the Social Security Act (42 U.S.C.

1395ww(d)(1)(B)(iv)) under the medicare program. Such system

shall include an adequate patient classification system that

reflects the differences in patient resource use and costs among

such hospitals.

(2) COLLECTION OF DATA AND EVALUATION.—In developing

the legislative proposal described in paragraph (1), the Secretary—

(A) may require such long-term care hospitals to submit such information to the Secretary as the Secretary

may require to develop the proposal; and

(B) shall consider several payment methodologies,

including the feasibility of expanding the current diagnosisrelated groups and prospective payment system established

under section 1886(d) of the Social Security Act to apply

to payments under the medicare program to long-term

care hospitals.

(b) REPORT.—Not later than October 1, 1999, the Secretary

shall submit to the appropriate committees of Congress a report

that includes the legislative proposal developed under subsection

(a)(1).

CHAPTER 3—PAYMENT FOR SKILLED NURSING

FACILITIES

SEC. 4431. EXTENSION OF COST LIMITS.

The last sentence of section 1888(a) (42 U.S.C. 1395yy(a)) is

amended by striking ‘‘subsection’’ the last place it appears and

all that follows and inserting ‘‘subsection, except that the limits

effective for cost reporting periods beginning on or after October

1, 1997, shall be based on the limits effective for cost reporting

periods beginning on or after October 1, 1996.’’.

SEC. 4432. PROSPECTIVE PAYMENT FOR SKILLED NURSING FACILITY

SERVICES.

(a) IN GENERAL.—Section 1888 (42 U.S.C. 1395yy) is amended

by adding at the end the following new subsection:

‘‘(e) PROSPECTIVE PAYMENT.— ‘‘(1) PAYMENT PROVISION.—Notwithstanding any other

provision of this title, subject to paragraph (7), the amount

of the payment for all costs (as defined in paragraph (2)(B))

of covered skilled nursing facility services (as defined in paragraph (2)(A)) for each day of such services furnished—

‘‘(A) in a cost reporting period during the transition

period (as defined in paragraph (2)(E)), is equal to the

sum of—
H. R. 2015—165

‘‘(i) the non-Federal percentage of the facility-specific per diem rate (computed under paragraph (3)),

and

‘‘(ii) the Federal percentage of the adjusted Federal

per diem rate (determined under paragraph (4))

applicable to the facility; and

‘‘(B) after the transition period is equal to the adjusted

Federal per diem rate applicable to the facility.

‘‘(2) DEFINITIONS.—For purposes of this subsection:

‘‘(A) COVERED SKILLED NURSING FACILITY SERVICES.—

‘‘(i) IN GENERAL.—The term ‘covered skilled nursing facility services’—

‘‘(I) means post-hospital extended care services

as defined in section 1861(i) for which benefits

are provided under part A; and

‘‘(II) includes all items and services (other than

services described in clause (ii)) for which payment

may be made under part B and which are furnished to an individual who is a resident of a

skilled nursing facility during the period in which

the individual is provided covered post-hospital

extended care services.

‘‘(ii) SERVICES EXCLUDED.—Services described in

this clause are physicians’ services, services described

by clauses (i) through (iii) of section 1861(s)(2)(K), certified nurse-midwife services, qualified psychologist

services, services of a certified registered nurse anesthetist, items and services described in subparagraphs

(F) and (O) of section 1861(s)(2), and, only with respect

to services furnished during 1998, the transportation

costs of electrocardiogram equipment for electrocardiogram test services (HCPCS Code R0076). Services

described in this clause do not include any physical,

occupational, or speech-language therapy services

regardless of whether or not the services are furnished

by, or under the supervision of, a physician or other

health care professional.

‘‘(B) ALL COSTS.—The term ‘all costs’ means routine

service costs, ancillary costs, and capital-related costs of

covered skilled nursing facility services, but does not

include costs associated with approved educational activities.

‘‘(C) NON-FEDERAL PERCENTAGE; FEDERAL PERCENTAGE.—For—

‘‘(i) the first cost reporting period (as defined in

subparagraph (D)) of a facility, the ‘non-Federal

percentage’ is 75 percent and the ‘Federal percentage’

is 25 percent;

‘‘(ii) the next cost reporting period of such facility,

the ‘non-Federal percentage’ is 50 percent and the ‘Federal percentage’ is 50 percent; and

‘‘(iii) the subsequent cost reporting period of such

facility, the ‘non-Federal percentage’ is 25 percent and

the ‘Federal percentage’ is 75 percent.
H. R. 2015—166

‘‘(D) FIRST COST REPORTING PERIOD.—The term ‘first

cost reporting period’ means, with respect to a skilled nursing facility, the first cost reporting period of the facility

beginning on or after July 1, 1998.

‘‘(E) TRANSITION PERIOD.—

‘‘(i) IN GENERAL.—The term ‘transition period’

means, with respect to a skilled nursing facility, the

3 cost reporting periods of the facility beginning with

the first cost reporting period.

‘‘(ii) TREATMENT OF NEW SKILLED NURSING FACILITIES.—In the case of a skilled nursing facility that

first received payment for services under this title

on or after October 1, 1995, payment for such services

shall be made under this subsection as if all services

were furnished after the transition period.

‘‘(3) DETERMINATION OF FACILITY SPECIFIC PER DIEM

RATES.—The Secretary shall determine a facility-specific per

diem rate for each skilled nursing facility not described in

paragraph (2)(E)(ii) for a cost reporting period as follows:

‘‘(A) DETERMINING BASE PAYMENTS.—The Secretary

shall determine, on a per diem basis, the total of—

‘‘(i) the allowable costs of extended care services

for the facility for cost reporting periods beginning

in fiscal year 1995, including costs associated with

facilities described in subsection (d), with appropriate

adjustments (as determined by the Secretary) to nonsettled cost reports, and

‘‘(ii) an estimate of the amounts that would be

payable under part B (disregarding any applicable

deductibles, coinsurance, and copayments) for covered

skilled nursing facility services described in paragraph

(2)(A)(i)(II) furnished during such period to an individual who is a resident of the facility, regardless of

whether or not the payment was made to the facility

or to another entity.

In making appropriate adjustments under clause (i), the

Secretary shall take into account exceptions and shall take

into account exemptions but, with respect to exemptions,

only to the extent that routine costs do not exceed 150

percent of the routine cost limits otherwise applicable but

for the exemption.

‘‘(B) UPDATE TO FIRST COST REPORTING PERIOD.—

‘‘(i) IN GENERAL.—Subject to clause (ii), the Secretary shall update the amount determined under

subparagraph (A), for each cost reporting period after

the cost reporting period described in subparagraph

(A)(i) and up to the first cost reporting period by a

factor equal to the skilled nursing facility market basket percentage increase minus 1 percentage point.

‘‘(ii) CERTAIN DEMONSTRATION PROJECTS.—In the

case of a facility participating in the Nursing Home

Case-Mix and Quality Demonstration (RUGS–III),

there shall be substituted for the amount described

in clause (i) the RUGS–III rate received by the facility

for 1997.
H. R. 2015—167

‘‘(C) UPDATING TO APPLICABLE COST REPORTING

PERIOD.—The Secretary shall update the amount determined under subparagraph (B) for each cost reporting

period beginning with the first cost reporting period and

up to and including the cost reporting period involved

by a factor equal to the facility-specific update factor.

‘‘(D) FACILITY-SPECIFIC UPDATE FACTOR.—For purposes

of this paragraph, the ‘facility-specific update factor’ for

cost reporting periods beginning during—

‘‘(i) during each of fiscal years 1998 and 1999,

is equal to the skilled nursing facility market basket

percentage increase for such fiscal year minus 1

percentage point, and

‘‘(ii) during each subsequent fiscal year is equal

to the skilled nursing facility market basket percentage

increase for such fiscal year.

‘‘(4) FEDERAL PER DIEM RATE.—

‘‘(A) DETERMINATION OF HISTORICAL PER DIEM FOR

FACILITIES.—For each skilled nursing facility that received

payments for post-hospital extended care services during

a cost reporting period beginning in fiscal year 1995 and

that was subject to (and not exempted from) the per diem

limits referred to in paragraph (1) or (2) of subsection

(a) (and facilities described in subsection (d)), the Secretary

shall estimate, on a per diem basis for such cost reporting

period, the total of—

‘‘(i) the allowable costs of extended care services

(excluding exceptions payments) for the facility for cost

reporting periods beginning in 1995 with appropriate

adjustments (as determined by the Secretary) to nonsettled cost reports, and

‘‘(ii) an estimate of the amounts that would be

payable under part B (disregarding any applicable

deductibles, coinsurance, and copayments) for covered

skilled nursing facility services described in paragraph

(2)(A)(i)(II) furnished during such period to an individual who is a resident of the facility, regardless of

whether or not the payment was made to the facility

or to another entity.

‘‘(B) UPDATE TO FIRST FISCAL YEAR.—The Secretary

shall update the amount determined under subparagraph

(A), for each cost reporting period after the cost reporting

period described in subparagraph (A)(i) and up to the first

cost reporting period by a factor equal to the skilled nursing

facility market basket percentage increase reduced (on an

annualized basis) by 1 percentage point.

‘‘(C) COMPUTATION OF STANDARDIZED PER DIEM RATE.—

The Secretary shall standardize the amount updated under

subparagraph (B) for each facility by—

‘‘(i) adjusting for variations among facilities by

area in the average facility wage level per diem, and

‘‘(ii) adjusting for variations in case mix per diem

among facilities.

‘‘(D) COMPUTATION OF WEIGHTED AVERAGE PER DIEM

RATES.—

‘‘(i) ALL FACILITIES.—The Secretary shall compute

a weighted average per diem rate for all facilities by
H. R. 2015—168

computing an average of the standardized amounts

computed under subparagraph (C), weighted for each

facility by the number of days of extended care services

furnished during the cost reporting period referred to

in subparagraph (A).

‘‘(ii) FREESTANDING FACILITIES.—The Secretary

shall compute a weighted average per diem rate for

freestanding facilities by computing an average of the

standardized amounts computed under subparagraph

(C) only for such facilities , weighted for each facility

by the number of days of extended care services furnished during the cost reporting period referred to

in subparagraph (A).

‘‘(iii) SEPARATE COMPUTATION.—The Secretary may

compute and apply such averages separately for facilities located in urban and rural areas (as defined in

section 1886(d)(2)(D)).

‘‘(E) UPDATING.—

‘‘(i) INITIAL PERIOD.—For the initial period beginning on July 1, 1998, and ending on September 30,

1999, the Secretary shall compute for skilled nursing

facilities an unadjusted federal per diem rate equal

to the average of the weighted average per diem rates

computed under clauses (i) and (ii) of subparagraph

(D), increased by skilled nursing facility market basket

percentage change for such period minus 1 percentage

point.

‘‘(ii) SUBSEQUENT FISCAL YEARS.—The Secretary

shall compute an unadjusted federal per diem rate

equal to the federal per diem rate computed under

this subparagraph—

‘‘(I) for fiscal year 2000, the rate computed

for the initial period described in clause (i),

increased by the skilled nursing facility market

basket percentage change for the initial period

minus 1 percentage point;

‘‘(II) for each of fiscal years 2001 and 2002,

the rate computed for the previous fiscal year

increased by the skilled nursing facility market

basket percentage change for the fiscal year

involved minus 1 percentage point; and

‘‘(III) for each subsequent fiscal year, the rate

computed for the previous fiscal year increased

by the skilled nursing facility market basket

percentage change for the fiscal year involved.

‘‘(F) ADJUSTMENT FOR CASE MIX CREEP.—Insofar as the

Secretary determines that the adjustments under subparagraph (G)(i) for a previous fiscal year (or estimates that

such adjustments for a future fiscal year) did (or are likely

to) result in a change in aggregate payments under this

subsection during the fiscal year that are a result of

changes in the coding or classification of residents that

do not reflect real changes in case mix, the Secretary

may adjust unadjusted Federal per diem rates for subsequent fiscal years so as to eliminate the effect of such

coding or classification changes.
H. R. 2015—169

‘‘(G) DETERMINATION OF FEDERAL RATE.—The Secretary

shall compute for each skilled nursing facility for each

fiscal year (beginning with the initial period described in

subparagraph (E)(i)) an adjusted Federal per diem rate

equal to the unadjusted Federal per diem rate determined

under subparagraph (E), as adjusted under subparagraph

(F), and as further adjusted as follows:

‘‘(i) ADJUSTMENT FOR CASE MIX.—The Secretary

shall provide for an appropriate adjustment to account

for case mix. Such adjustment shall be based on a

resident classification system, established by the Secretary, that accounts for the relative resource utilization of different patient types. The case mix adjustment

shall be based on resident assessment data and other

data that the Secretary considers appropriate.

‘‘(ii) ADJUSTMENT FOR GEOGRAPHIC VARIATIONS IN

LABOR COSTS.—The Secretary shall adjust the portion

of such per diem rate attributable to wages and wagerelated costs for the area in which the facility is located

compared to the national average of such costs using

an appropriate wage index as determined by the Secretary. Such adjustment shall be done in a manner

that does not result in aggregate payments under this

subsection that are greater or less than those that

would otherwise be made if such adjustment had not

been made.

‘‘(H) PUBLICATION OF INFORMATION ON PER DIEM

RATES.—The Secretary shall provide for publication in the

Federal Register, before May 1, 1998 (with respect to fiscal

period described in subparagraph (E)(i)) and before the

August 1 preceding each succeeding fiscal year (with

respect to that succeeding fiscal year), of—

‘‘(i) the unadjusted Federal per diem rates to be

applied to days of covered skilled nursing facility services furnished during the fiscal year,

‘‘(ii) the case mix classification system to be applied

under subparagraph (G)(i) with respect to such services

during the fiscal year, and

‘‘(iii) the factors to be applied in making the area

wage adjustment under subparagraph (G)(ii) with

respect to such services.

‘‘(5) SKILLED NURSING FACILITY MARKET BASKET INDEX AND

PERCENTAGE.—For purposes of this subsection:

‘‘(A) SKILLED NURSING FACILITY MARKET BASKET

INDEX.—The Secretary shall establish a skilled nursing

facility market basket index that reflects changes over

time in the prices of an appropriate mix of goods and

services included in covered skilled nursing facility services.

‘‘(B) SKILLED NURSING FACILITY MARKET BASKET

PERCENTAGE.—The term ‘skilled nursing facility market

basket percentage’ means, for a fiscal year or other annual

period and as calculated by the Secretary, the percentage

change in the skilled nursing facility market basket index

(established under subparagraph (A)) from the midpoint

of the prior fiscal year (or period) to the midpoint of the

fiscal year (or other period) involved.
H. R. 2015—170

‘‘(6) SUBMISSION OF RESIDENT ASSESSMENT DATA.—A skilled

nursing facility, or a facility described in paragraph (7)(B),

shall provide the Secretary, in a manner and within the timeframes prescribed by the Secretary, the resident assessment

data necessary to develop and implement the rates under this

subsection. For purposes of meeting such requirement, a skilled

nursing facility, or a facility described in paragraph (7), may

submit the resident assessment data required under section

1819(b)(3), using the standard instrument designated by the

State under section 1819(e)(5).

‘‘(7) TRANSITION FOR MEDICARE SWING BED HOSPITALS.—

‘‘(A) IN GENERAL.—The Secretary shall determine an

appropriate manner in which to apply this subsection to

the facilities described in subparagraph (B), taking into

account the purposes of this subsection, and shall provide

that at the end of the transition period (as defined in

paragraph (2)(E)) such facilities shall be paid only under

this subsection. Payment shall not be made under this

subsection to such facilities for cost reporting periods beginning before such date (not earlier than July 1, 1999) as

the Secretary specifies.

‘‘(B) FACILITIES DESCRIBED.—The facilities described in

this subparagraph are facilities that have in effect an agreement described in section 1883, for which payment is made

for the furnishing of extended care services on a reasonable

cost basis under section 1814(l) (as in effect on and after

such date).

‘‘(8) LIMITATION ON REVIEW.—There shall be no administrative or judicial review under section 1869, 1878, or otherwise

of—

‘‘(A) the establishment of Federal per diem rates under

paragraph (4), including the computation of the standardized per diem rates under paragraph (4)(C), adjustments

and corrections for case mix under paragraphs (4)(F) and

(4)(G)(i), and adjustments for variations in labor-related

costs under paragraph (4)(G)(ii);

‘‘(B) the establishment of facility specific rates before

January 1, 1999, (except any determination of costs paid

under part A of this title); and

‘‘(C) the establishment of transitional amounts under

paragraph (7).’’.

(b) CONSOLIDATED BILLING.— (1) FOR SNF SERVICES.—Section 1862(a) (42 U.S.C.

1395y(a)), as amended by 4319(b), is amended—

(A) by striking ‘‘or’’ at the end of paragraph (16),

(B) by striking the period at the end of paragraph

(17) and inserting ‘‘; or’’, and

(C) by inserting after paragraph (17) the following

new paragraph:

‘‘(18) which are covered skilled nursing facility services

described in section 1888(e)(2)(A)(i) and which are furnished

to an individual who is a resident of a skilled nursing facility

or of a part of a facility that includes a skilled nursing facility

(as determined under regulations), by an entity other than

the skilled nursing facility, unless the services are furnished

under arrangements (as defined in section 1861(w)(1)) with

the entity made by the skilled nursing facility.’’.
H. R. 2015—171

(2) REQUIRING PAYMENT FOR ALL PART B ITEMS AND SERVICES TO BE MADE TO FACILITY.—The first sentence of section

1842(b)(6) (42 U.S.C. 1395u(b)(6)) is amended—

(A) by striking ‘‘and (D)’’ and inserting ‘‘(D)’’; and

(B) by striking the period at the end and inserting

the following: ‘‘, and (E) in the case of an item or service

(other than services described in section 1888(e)(2)(A)(ii))

furnished to an individual who (at the time the item or

service is furnished) is a resident of a skilled nursing

facility or of a part of a facility that includes a skilled

nursing facility (as determined under regulations), payment

shall be made to the facility (without regard to whether

or not the item or service was furnished by the facility,

by others under arrangement with them made by the facility, under any other contracting or consulting arrangement,

or otherwise).’’.

(3) PAYMENT RULES.—Section 1888(e) (42 U.S.C. 1395yy(e)),

as added by subsection (a), is amended by adding at the end

the following:

‘‘(9) PAYMENT FOR CERTAIN SERVICES.—In the case of an

item or service furnished to a resident of a skilled nursing

facility or a part of a facility that includes a skilled nursing

facility (as determined under regulations) for which payment

would (but for this paragraph) be made under part B in an

amount determined in accordance with section 1833(a)(2)(B),

the amount of the payment under such part shall be the amount

provided under the fee schedule for such item or service.

‘‘(10) REQUIRED CODING.—No payment may be made under

part B for items and services (other than services described

in paragraph (2)(A)(ii)) furnished to an individual who is a

resident of a skilled nursing facility or of a part of a facility

that includes a skilled nursing facility (as determined under

regulations), unless the claim for such payment includes a

code (or codes) under a uniform coding system specified by

the Secretary that identifies the items or services furnished.’’.

(4) FACILITY PROVIDER NUMBER REQUIRED ON CLAIMS

SUBMITTED BY PHYSICIANS.—Section 1842 (42 U.S.C. 1395u)

is amended by adding at the end the following new section:

‘‘(t) Each request for payment, or bill submitted, for an item

or service furnished by a physician to an individual who is a

resident of a skilled nursing facility or of a part of a facility

that includes a skilled nursing facility (as determined under regulations), for which payment may be made under this part shall

include the facility’s medicare provider number.’’.

(5) CONFORMING AMENDMENTS.—

(A) Section 1819(b)(3)(C)(i) (42 U.S.C. 1395i–

3(b)(3)(C)(i)) is amended by striking ‘‘Such’’ and inserting

‘‘Subject to the timeframes prescribed by the Secretary

under section 1888(e)(6), such’’.

(B) Section 1832(a)(1) (42 U.S.C. 1395k(a)(1)) is amended by striking ‘‘(2);’’ and inserting ‘‘(2) and section

1842(b)(6)(E);’’.

(C) Section 1833(a)(2)(B) (42 U.S.C. 1395l(a)(2)(B)) is

amended by inserting ‘‘or section 1888(e)(9)’’ after ‘‘section

1886’’.

(D) Section 1861(h) (42 U.S.C 1395x(h)) is amended—
H. R. 2015—172

(i) in the opening paragraph, by striking ‘‘paragraphs (3) and (6)’’ and inserting ‘‘paragraphs (3), (6),

and (7)’’, and

(ii) in paragraph (7), after ‘‘skilled nursing facilities’’, by inserting ‘‘, or by others under arrangements

with them made by the facility’’.

(E) Section 1861(v)(7)(D) (42 U.S.C. 1395x(v)(7)(D)) is

amended by inserting ‘‘subsections (a) through (c) of’’ before

‘‘section 1888.’’.

(F) Section 1866(a)(1)(H) (42 U.S.C. 1395cc(a)(1)(H))

is amended—

(i) by redesignating clauses (i) and (ii) as subclauses (I) and (II) respectively,

(ii) by inserting ‘‘(i)’’ after ‘‘(H)’’, and

(iii) by adding after clause (i), as so redesignated,

the following new clause:

‘‘(ii) in the case of skilled nursing facilities which provide

covered skilled nursing facility services—

‘‘(I) that are furnished to an individual who is a resident of the skilled nursing facility, and

‘‘(II) for which the individual is entitled to have payment made under this title,

to have items and services (other than services described in

section 1888(e)(2)(A)(ii)) furnished by the skilled nursing facility

or otherwise under arrangements (as defined in section

1861(w)(1)) made by the skilled nursing facility,’’.

(G) Section 1883(a)(2)(B)(ii)(II) (42 U.S.C.

1395tt(a)(2)(B)(ii)(II)) is amended by inserting ‘‘subsections

(a) through (d) of’’ before ‘‘section 1888’’.

(H) Section 1888(d)(1) (42 U.S.C. 1395yy(d)(1)) is

amended by striking ‘‘Any skilled nursing facility’’ and

inserting ‘‘Subject to subsection (e), any skilled nursing

facility’’.

(c) MEDICAL REVIEW PROCESS.—In order to ensure that medicare beneficiaries are furnished appropriate services in skilled nursing facilities, the Secretary of Health and Human Services shall

establish and implement a thorough medical review process to

examine the effects of the amendments made by this section on

the quality of covered skilled nursing facility services furnished

to medicare beneficiaries. In developing such a medical review

process, the Secretary shall place a particular emphasis on the

quality of non-routine covered services and physicians’ services

for which payment is made under title XVIII of the Social Security

Act.

(d) EFFECTIVE DATE.—The amendments made by this section

are effective for cost reporting periods beginning on or after July

1, 1998; except that the amendments made by subsection (b) shall

apply to items and services furnished on or after July 1, 1998.

CHAPTER 4—PROVISIONS RELATED TO HOSPICE

SERVICES

SEC. 4441. PAYMENTS FOR HOSPICE SERVICES.

(a) PAYMENT UPDATE.—Section 1814(i)(1)(C)(ii) (42 U.S.C.

1395f(i)(1)(C)(ii)) is amended—

(1) in subclause (V), by striking ‘‘and’’ at the end;

(2) by redesignating subclause (VI) as subclause (VII); and
H. R. 2015—173

(3) by inserting after subclause (V) the following new subclause:

‘‘(VI) for each of fiscal years 1998 through 2002, the market

basket percentage increase for the fiscal year involved minus

1.0 percentage points; and’’.

(b) COLLECTION OF DATA.—Section 1814(i) (42 U.S.C. 1395f(i))

is amended by adding at the end the following new paragraph:

‘‘(3) Hospice programs providing hospice care for which payment

is made under this subsection shall submit to the Secretary such

data with respect to the costs for providing such care for each

fiscal year, beginning with fiscal year 1999, as the Secretary determines necessary.’’.

SEC. 4442. PAYMENT FOR HOME HOSPICE CARE BASED ON LOCATION

WHERE CARE IS FURNISHED.

(a) IN GENERAL.—Section 1814(i)(2) (42 U.S.C. 1395f(i)(2)) is

amended by adding at the end the following:

‘‘(D) A hospice program shall submit claims for payment for

hospice care furnished in an individual’s home under this title

only on the basis of the geographic location at which the service

is furnished, as determined by the Secretary.’’.

(b) EFFECTIVE DATE.—The amendment made by subsection (a)

applies to cost reporting periods beginning on or after October

1, 1997.

SEC. 4443. HOSPICE CARE BENEFITS PERIODS.

(a) RESTRUCTURING OF BENEFIT PERIOD.—Section 1812 (42

U.S.C. 1395d) is amended in subsections (a)(4) and (d)(1) by striking

‘‘, a subsequent period of 30 days, and a subsequent extension

period’’ and inserting ‘‘and an unlimited number of subsequent

periods of 60 days each’’.

(b) CONFORMING AMENDMENTS.—(1) Section 1812 (42 U.S.C.

1395d) is amended in subsection (d)(2)(B) by striking ‘‘90- or 30-

day period or a subsequent extension period’’ and inserting ‘‘90-

day period or a subsequent 60-day period’’.

(2) Section 1814(a)(7)(A) (42 U.S.C. 1395f(a)(7)(A)) is amended—

(A) in clause (i), by inserting ‘‘and’’ at the end;

(B) in clause (ii)—

(i) by striking ‘‘30-day’’ and inserting ‘‘60-day’’; and

(ii) by striking ‘‘, and’’ at the end and inserting a

period; and

(C) by striking clause (iii).

SEC. 4444. OTHER ITEMS AND SERVICES INCLUDED IN HOSPICE CARE.

(a) IN GENERAL.—Section 1861(dd)(1) (42 U.S.C. 1395x(dd)(1))

is amended—

(1) in subparagraph (G), by striking ‘‘and’’ at the end;

(2) in subparagraph (H), by striking the period at the

end and inserting ‘‘, and’’; and

(3) by inserting after subparagraph (H) the following:

‘‘(I) any other item or service which is specified in the

plan and for which payment may otherwise be made under

this title.’’.

(b) EFFECTIVE DATE.—The amendment made by subsection (a)

shall apply with respect to items or services furnished on or after

April 1, 1998.
H. R. 2015—174

SEC. 4445. CONTRACTING WITH INDEPENDENT PHYSICIANS OR PHYSICIAN GROUPS FOR HOSPICE CARE SERVICES PERMITTED.

Section 1861(dd)(2) (42 U.S.C. 1395x(dd)(2)) is amended—

(1) in subparagraph (A)(ii)(I), by striking ‘‘(F),’’; and

(2) in subparagraph (B)(i), by inserting ‘‘or, in the case

of a physician described in subclause (I), under contract with’’

after ‘‘employed by’’.

SEC. 4446. WAIVER OF CERTAIN STAFFING REQUIREMENTS FOR HOSPICE CARE PROGRAMS IN NONURBANIZED AREAS.

Section 1861(dd)(5) (42 U.S.C. 1395x(dd)(5)) is amended—

(1) in subparagraph (B), by inserting ‘‘or (C)’’ after

‘‘subparagraph (A)’’ each place it appears; and

(2) by adding at the end the following:

‘‘(C) The Secretary may waive the requirements of paragraph

(2)(A)(i) and (2)(A)(ii) for an agency or organization with respect

to the services described in paragraph (1)(B) and, with respect

to dietary counseling, paragraph (1)(H), if such agency or organization—

‘‘(i) is located in an area which is not an urbanized area

(as defined by the Bureau of Census), and

‘‘(ii) demonstrates to the satisfaction of the Secretary that

the agency or organization has been unable, despite diligent

efforts, to recruit appropriate personnel.’’.

SEC. 4447. LIMITATION ON LIABILITY OF BENEFICIARIES FOR CERTAIN

HOSPICE COVERAGE DENIALS.

Section 1879(g) (42 U.S.C. 1395pp(g)) is amended—

(1) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively, and moving such subparagraphs 2 ems to the right;

(2) by striking ‘‘is,’’ and inserting ‘‘is—’’;

(3) by making the remaining text of subsection (g), as

amended, that follows ‘‘is—’’ a new paragraph (1) and indenting

such paragraph 2 ems to the right;

(4) by striking the period at the end and inserting ‘‘; and’’;

and

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

‘‘(2) with respect to the provision of hospice care to an

individual, a determination that the individual is not terminally

ill.’’.

SEC. 4448. EXTENDING THE PERIOD FOR PHYSICIAN CERTIFICATION

OF AN INDIVIDUAL’S TERMINAL ILLNESS.

Section 1814(a)(7)(A)(i) (42 U.S.C. 1395f(a)(7)(A)(i)) is amended

in the matter following subclause (II) by striking ‘‘, not later than

2 days after hospice care is initiated (or, if each certify verbally

not later than 2 days after hospice care is initiated, not later

than 8 days after such care is initiated)’’ and inserting ‘‘at the

beginning of the period’’.

SEC. 4449. EFFECTIVE DATE.

Except as otherwise provided in this chapter, the amendments

made by this chapter apply to benefits provided on or after the

date of the enactment of this chapter, regardless of whether or

not an individual has made an election under section 1812(d) of

the Social Security Act (42 U.S.C. 1395d(d)) before such date.
H. R. 2015—175

CHAPTER 5—OTHER PAYMENT PROVISIONS

SEC. 4451. REDUCTIONS IN PAYMENTS FOR ENROLLEE BAD DEBT.

Section 1861(v)(1) (42 U.S.C. 1395x(v)(1)) is amended by adding

at the end the following new subparagraph:

‘‘(T) In determining such reasonable costs for hospitals, no

reduction in copayments under section 1833(t)(5)(B) shall be treated

as a bad debt and the amount of bad debts otherwise treated

as allowable costs which are attributable to the deductibles and

coinsurance amounts under this title shall be reduced—

‘‘(i) for cost reporting periods beginning during fiscal year

1998, by 25 percent of such amount otherwise allowable,

‘‘(ii) for cost reporting periods beginning during fiscal year

1999, by 40 percent of such amount otherwise allowable, and

‘‘(iii) for cost reporting periods beginning during a subsequent fiscal year, by 45 percent of such amount otherwise

allowable.’’.

SEC. 4452. PERMANENT EXTENSION OF HEMOPHILIA PASS-THROUGH

PAYMENT.

Section 6011(d) of OBRA–1989 (as amended by section 13505

of OBRA–1993) is amended by striking ‘‘and shall expire September

30, 1994.’’ and inserting ‘‘and on or before September 30, 1994,

and on or after October 1, 1997.’’.

SEC. 4453. REDUCTION IN PART A MEDICARE PREMIUM FOR CERTAIN

PUBLIC RETIREES.

(a) IN GENERAL.—Section 1818(d) (42 U.S.C. 1395i–2(d)) is

amended—

(1) in paragraph (2), by striking ‘‘paragraph (4)’’ and inserting ‘‘paragraphs (4) and (5)’’; and

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

‘‘(5)(A) The amount of the monthly premium shall be zero

in the case of an individual who is a person described in subparagraph (B) for a month, if—

‘‘(i) the individual’s premium under this section for the

month is not (and will not be) paid for, in whole or in part,

by a State (under title XIX or otherwise), a political subdivision

of a State, or an agency or instrumentality of one or more

States or political subdivisions thereof; and

‘‘(ii) in each of 84 months before such month, the individual

was enrolled in this part under this section and the payment

of the individual’s premium under this section for the month

was not paid for, in whole or in part, by a State (under title

XIX or otherwise), a political subdivision of a State, or an

agency or instrumentality of one or more States or political

subdivisions thereof.

‘‘(B) A person described in this subparagraph for a month

is a person who establishes to the satisfaction of the Secretary

that, as of the last day of the previous month—

‘‘(i)(I) the person was receiving cash benefits under a qualified State or local government retirement system (as defined

in subparagraph (C)) on the basis of the person’s employment

in one or more positions covered under any such system, and

(II) the person would have at least 40 quarters of coverage

under title II if remuneration for medicare qualified government

employment (as defined in paragraph (1) of section 210(p),
H. R. 2015—176

but determined without regard to paragraph (3) of such section)

paid to such person were treated as wages paid to such person

and credited for purposes of determining quarters of coverage

under section 213;

‘‘(ii)(I) the person was married (and had been married

for the previous 1-year period) to an individual who is described

in clause (i), or (II) the person met the requirement of clause

(i)(II) and was married (and had been married for the previous

1-year period) to an individual described in clause (i)(I);

‘‘(iii) the person had been married to an individual for

a period of at least 1 year (at the time of such individual’s

death) if (I) the individual was described in clause (i) at the

time of the individual’s death, or (II) the person met the requirement of clause (i)(II) and the individual was described in clause

(i)(I) at the time of the individual’s death; or

‘‘(iv) the person is divorced from an individual and had

been married to the individual for a period of at least 10

years (at the time of the divorce) if (I) the individual was

described in clause (i) at the time of the divorce, or (II) the

person met the requirement of clause (i)(II) and the individual

was described in clause (i)(I) at the time of the divorce.

‘‘(C) For purposes of subparagraph (B)(i)(I), the term ‘qualified

State or local government retirement system’ means a retirement

system that—

‘‘(i) is established or maintained by a State or political

subdivision thereof, or an agency or instrumentality of one

or more States or political subdivisions thereof;

‘‘(ii) covers positions of some or all employees of such a

State, subdivision, agency, or instrumentality; and

‘‘(iii) does not adjust cash retirement benefits based on

eligibility for a reduction in premium under this paragraph.’’.

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

(a) shall apply to premiums for months beginning with January

1998, and months before such month may be taken into account

for purposes of meeting the requirement of section 1818(d)(5)(B)(iii)

of the Social Security Act, as added by subsection (a).

SEC. 4454. COVERAGE OF SERVICES IN RELIGIOUS NONMEDICAL

HEALTH CARE INSTITUTIONS UNDER THE MEDICARE

AND MEDICAID PROGRAMS.

(a) MEDICARE COVERAGE.— (1) IN GENERAL.—Section 1861 (42 U.S.C. 1395x) (as

amended by sections 4103 and 4106) is amended—

(A) in the sixth sentence of subsection (e)—

(i) by striking ‘‘includes’’ and all that follows up

to ‘‘but only’’ and inserting ‘‘includes a religious nonmedical health care institution (as defined in subsection (ss)(1)),’’, and

(ii) by inserting ‘‘consistent with section 1821’’

before the period;

(B) in subsection (y)—

(i) by amending the heading to read as follows:

‘‘Extended Care in Religious Nonmedical Health Care Institutions’’,

(ii) in paragraph (1), by striking ‘‘includes’’ and

all that follows up to ‘‘but only’’ and inserting ‘‘includes
H. R. 2015—177

a religious nonmedical health care institution (as

defined in subsection (ss)(1)),’’, and

(iii) by inserting ‘‘consistent with section 1821’’

before the period; and

(C) by adding at the end the following:

‘‘Religious Nonmedical Health Care Institution

‘‘(ss)(1) The term ‘religious nonmedical health care institution’

means an institution that—

‘‘(A) is described in subsection (c)(3) of section 501

of the Internal Revenue Code of 1986 and is exempt from

taxes under subsection (a) of such section;

‘‘(B) is lawfully operated under all applicable Federal,

State, and local laws and regulations;

‘‘(C) provides only nonmedical nursing items and services exclusively to patients who choose to rely solely upon

a religious method of healing and for whom the acceptance

of medical health services would be inconsistent with their

religious beliefs;

‘‘(D) provides such nonmedical items and services

exclusively through nonmedical nursing personnel who are

experienced in caring for the physical needs of such

patients;

‘‘(E) provides such nonmedical items and services to

inpatients on a 24-hour basis;

‘‘(F) on the basis of its religious beliefs, does not provide

through its personnel or otherwise medical items and services (including any medical screening, examination, diagnosis, prognosis, treatment, or the administration of drugs)

for its patients;

‘‘(G)(i) is not owed by, under common ownership with,

or has an ownership interest in, a provider of medical

treatment of services;

‘‘(ii) is not affiliated with—

‘‘(I) a provider of medical treatment or services,

or

‘‘(II) an individual who has an ownership interest

in a provider of medical treatment or services;

‘‘(H) has in effect a utilization review plan which—

‘‘(i) provides for the review of admissions to the

institution, of the duration of stays therein, of cases

of continuous extended duration, and of the items and

services furnished by the institution,

‘‘(ii) requires that such reviews be made by an

appropriate committee of the institution that includes

the individuals responsible for overall administration

and for supervision of nursing personnel at the institution,

‘‘(iii) provides that records be maintained of the

meetings, decisions, and actions of such committee,

and

‘‘(iv) meets such other requirements as the Secretary finds necessary to establish an effective utilization review plan;

‘‘(I) provides the Secretary with such information as

the Secretary may require to implement section 1821,
H. R. 2015—178

including information relating to quality of care and coverage determinations; and

‘‘(J) meets such other requirements as the Secretary

finds necessary in the interest of the health and safety

of individuals who are furnished services in the institution.

‘‘(2) To the extent that the Secretary finds that the accreditation

of an institution by a State, regional, or national agency or association provides reasonable assurances that any or all of the requirements of paragraph (1) are met or exceeded, the Secretary may

treat such institution as meeting the condition or conditions with

respect to which the Secretary made such finding.

‘‘(3)(A)(i) In administering this subsection and section 1821,

the Secretary shall not require any patient of a religious nonmedical

health care institution to undergo medical screening, examination,

diagnosis, prognosis, or treatment or to accept any other medical

health care service, if such patient (or legal representative of the

patient) objects thereto on religious grounds.

‘‘(ii) Clause (i) shall not be construed as preventing the Secretary from requiring under section 1821(a)(2) the provision of

sufficient information regarding an individual’s condition as a condition for receipt of benefits under part A for services provided in

such an institution.

‘‘(B)(i) In administering this subsection and section 1821, the

Secretary shall not subject a religious nonmedical health care

institution or its personnel to any medical supervision, regulation,

or control, insofar as such supervision, regulation, or control would

be contrary to the religious beliefs observed by the institution

or such personnel.

‘‘(ii) Clause (i) shall not be construed as preventing the Secretary from reviewing items and services billed by the institution

to the extent the Secretary determines such review to be necessary

to determine whether such items and services were not covered

under part A, are excessive, or are fraudulent.

‘‘(4)(A) For purposes of paragraph (1)(G)(i), an ownership

interest of less than 5 percent shall not be taken into account.

‘‘(B) For purposes of paragraph (1)(G)(ii), none of the following

shall be considered to create an affiliation:

‘‘(i) An individual serving as an uncompensated director,

trustee, officer, or other member of the governing body of a

religious nonmedical health care institution.

‘‘(ii) An individual who is a director, trustee, officer,

employee, or staff member of a religious nonmedical health

care institution having a family relationship with an individual

who is affiliated with (or has an ownership interest in) a

provider of medical treatment or services.

‘‘(iii) An individual or entity furnishing goods or services

as a vendor to both providers of medical treatment or services

and religious nonmedical health care institutions.’’.

(2) CONDITIONS OF COVERAGE.—Part A of title XVIII is

amended by adding at the end the following new section:

‘‘CONDITIONS FOR COVERAGE OF RELIGIOUS NONMEDICAL HEALTH

CARE INSTITUTIONAL SERVICES

‘‘SEC. 1821. (a) IN GENERAL.—Subject to subsections (c) and

(d), payment under this part may be made for inpatient hospital

services or post-hospital extended care services furnished an individual in a religious nonmedical health care institution only if—
H. R. 2015—179

‘‘(1) the individual has an election in effect for such benefits

under subsection (b); and

‘‘(2) the individual has a condition such that the individual

would qualify for benefits under this part for inpatient hospital

services or extended care services, respectively, if the individual

were an inpatient or resident in a hospital or skilled nursing

facility that was not such an institution.

‘‘(b) ELECTION.—

‘‘(1) IN GENERAL.—An individual may make an election

under this subsection in a form and manner specified by the

Secretary consistent with this subsection. Unless otherwise provided, such an election shall take effect immediately upon its

execution. Such an election, once made, shall continue in effect

until revoked.

‘‘(2) FORM.—The election form under this subsection shall

include the following:

‘‘(A) A written statement, signed by the individual

(or such individual’s legal representative), that—

‘‘(i) the individual is conscientiously opposed to

acceptance of nonexcepted medical treatment; and

‘‘(ii) the individual’s acceptance of nonexcepted

medical treatment would be inconsistent with the

individual’s sincere religious beliefs.

‘‘(B) A statement that the receipt of nonexcepted medical services shall constitute a revocation of the election

and may limit further receipt of services described in subsection (a).

‘‘(3) REVOCATION.—An election under this subsection by

an individual may be revoked by voluntarily notifying the Secretary in writing of such revocation and shall be deemed to

be revoked if the individual receives nonexcepted medical treatment for which reimbursement is made under this title.

‘‘(4) LIMITATION ON SUBSEQUENT ELECTIONS.—Once an

individual’s election under this subsection has been made and

revoked twice—

‘‘(A) the next election may not become effective until

the date that is 1 year after the date of most recent previous

revocation, and

‘‘(B) any succeeding election may not become effective

until the date that is 5 years after the date of the most

recent previous revocation.

‘‘(5) EXCEPTED MEDICAL TREATMENT.—For purposes of this

subsection:

‘‘(A) EXCEPTED MEDICAL TREATMENT.—The term

‘excepted medical treatment’ means medical care or treatment (including medical and other health services)—

‘‘(i) received involuntarily, or

‘‘(ii) required under Federal or State law or law

of a political subdivision of a State.

‘‘(B) NONEXCEPTED MEDICAL TREATMENT.—The term

‘nonexcepted medical treatment’ means medical care or

treatment (including medical and other health services)

other than excepted medical treatment.

‘‘(c) MONITORING AND SAFEGUARD AGAINST EXCESSIVE EXPENDITURES.—

‘‘(1) ESTIMATE OF EXPENDITURES.—Before the beginning of

each fiscal year (beginning with fiscal year 2000), the Secretary
H. R. 2015—180

shall estimate the level of expenditures under this part for

services described in subsection (a) for that fiscal year.

‘‘(2) ADJUSTMENT IN PAYMENTS.—

‘‘(A) PROPORTIONAL ADJUSTMENT.—If the Secretary

determines that the level estimated under paragraph (1)

for a fiscal year will exceed the trigger level (as defined

in subparagraph (C)) for that fiscal year, the Secretary

shall, subject to subparagraph (B), provide for such a

proportional reduction in payment amounts under this part

for services described in subsection (a) for the fiscal year

involved as will assure that such level (taking into account

any adjustment under subparagraph (B)) does not exceed

the trigger level for that fiscal year.

‘‘(B) ALTERNATIVE ADJUSTMENTS.—The Secretary may,

instead of making some or all of the reduction described

in subparagraph (A), impose such other conditions or

limitations with respect to the coverage of covered services

(including limitations on new elections of coverage and

new facilities) as may be appropriate to reduce the level

of expenditures described in paragraph (1) to the trigger

level.

‘‘(C) TRIGGER LEVEL.—For purposes of this subsection—

‘‘(i) IN GENERAL.—Subject to adjustment under

paragraph (3)(B), the ‘trigger level’ for a year is the

unadjusted trigger level described in clause (ii).

‘‘(ii) UNADJUSTED TRIGGER LEVEL.—The

‘unadjusted trigger level’ for—

‘‘(I) fiscal year 1998, is $20,000,000, or

‘‘(II) a succeeding fiscal year is the amount

specified under this clause for the previous fiscal

year increased by the percentage increase in the

consumer price index for all urban consumers (all

items; United States city average) for the 12-month

period ending with July preceding the beginning

of the fiscal year.

‘‘(D) PROHIBITION OF ADMINISTRATIVE AND JUDICIAL

REVIEW.—There shall be no administrative or judicial

review under section 1869, 1878, or otherwise of the estimation of expenditures under subparagraph (A) or the

application of reduction amounts under subparagraph (B).

‘‘(E) EFFECT ON BILLING.—Notwithstanding any other

provision of this title, in the case of a reduction in payment

provided under this subsection for services of a religious

nonmedical health care institution provided to an individual, the amount that the institution is otherwise permitted

to charge the individual for such services is increased by

the amount of such reduction.

‘‘(3) MONITORING EXPENDITURE LEVEL.—

‘‘(A) IN GENERAL.—The Secretary shall monitor the

expenditure level described in paragraph (2)(A) for each

fiscal year (beginning with fiscal year 1999).

‘‘(B) ADJUSTMENT IN TRIGGER LEVEL.—

‘‘(i) IN GENERAL.—If the Secretary determines that

such level for a fiscal year exceeded, or was less than,

the trigger level for that fiscal year, then, subject to

clause (ii), the trigger level for the succeeding fiscal
H. R. 2015—181

year shall be reduced, or increased, respectively, by

the amount of such excess or deficit.

‘‘(ii) LIMITATION ON CARRYFORWARD.—In no case

may the increase effected under clause (i) for a fiscal

year exceed $50,000,000.

‘‘(d) SUNSET.—If the Secretary determines that the level of

expenditures described in subsection (c)(1) for 3 consecutive fiscal

years (with the first such year being not earlier than fiscal year

2002) exceeds the trigger level for such expenditures for such years

(as determined under subsection (c)(2)), benefits shall be paid under

this part for services described in subsection (a) and furnished

on or after the first January 1 that occurs after such 3 consecutive

years only with respect to an individual who has an election in

effect under subsection (b) as of such January 1 and only during

the duration of such election.

‘‘(e) ANNUAL REPORT.—At the beginning of each fiscal year

(beginning with fiscal year 1999), the Secretary shall submit to

the Committee on Ways and Means of the House of Representatives

and the Committee on Finance of the Senate an annual report

on coverage and expenditures for services described in subsection

(a) under this part and under State plans under title XIX. Such

report shall include—

‘‘(1) level of expenditures described in subsection (c)(1) for

the previous fiscal year and estimated for the fiscal year

involved;

‘‘(2) trends in such level; and

‘‘(3) facts and circumstances of any significant change in

such level from the level in previous fiscal years.’’.

(b) MEDICAID.— (1) The third sentence of section 1902(a) (42 U.S.C.

1396a(a)) is amended by striking all that follows ‘‘shall not

apply’’ and inserting ‘‘to a religious nonmedical health care

institution (as defined in section 1861(ss)(1)).’’.

(2) Section 1908(e)(1) (42 U.S.C. 1396g–1(e)(1)) is amended

by striking all that follows ‘‘does not include’’ and inserting

‘‘a religious nonmedical health care institution (as defined in

section 1861(ss)(1)).’’.

(c) CONFORMING AMENDMENTS.— (1) Section 1122(h) (42 U.S.C. 1320a–1(h)) is amended by

striking all that follows ‘‘shall not apply to’’ and inserting

‘‘a religious nonmedical health care institution (as defined in

section 1861(ss)(1)).’’.

(2) Section 1162 (42 U.S.C. 1320c–11) is amended—

(A) by amending the heading to read as follows:

‘‘EXEMPTIONS FOR RELIGIOUS NONMEDICAL HEALTH CARE

INSTITUTIONS’’; and

(B) by striking all that follows ‘‘shall not apply with

respect to a’’ and inserting ‘‘religious nonmedical health

care institution (as defined in section 1861(ss)(1)).’’.

(d) EFFECTIVE DATE.—The amendments made by this section

shall take effect on the date of the enactment of this Act and

shall apply to items and services furnished on or after such date.

By not later than July 1, 1998, the Secretary of Health and Human

Services shall first issue regulations to carry out such amendments.

Such regulations may be issued so they are effective on an interim
H. R. 2015—182

basis pending notice and opportunity for public comment. For periods before the effective date of such regulations, such regulations

shall recognize elections entered into in good faith in order to

comply with the requirements of section 1821(b) of the Social Security Act.

Subtitle F—Provisions Relating to Part B

Only

CHAPTER 1—SERVICES OF HEALTH PROFESSIONALS

Subchapter A—Physicians’ Services

SEC. 4501. ESTABLISHMENT OF SINGLE CONVERSION FACTOR FOR

1998.

(a) IN GENERAL.—Section 1848(d)(1) (42 U.S.C. 1395w–4(d)(1))

is amended—

(1) by redesignating subparagraph (C) as subparagraph

(D), and

(2) by inserting after subparagraph (B) the following:

‘‘(C) SPECIAL RULES FOR 1998.—The single conversion

factor for 1998 under this subsection shall be the conversion

factor for primary care services for 1997, increased by

the Secretary’s estimate of the weighted average of the

three separate updates that would otherwise occur were

it not for the enactment of chapter 1 of subtitle F of

title IV of the Balanced Budget Act of 1997.’’.

(b) CONFORMING AMENDMENTS.—Section 1848 (42 U.S.C.

1395w–4) is amended—

(1) by striking ‘‘(or factors)’’ each place it appears in subsection (d)(1)(A) and (d)(1)(D)(ii) (as redesignated by subsection

(a)(1)),

(2) in subsection (d)(1)(A), by striking ‘‘or updates’’,

(3) in subsection (d)(1)(D) (as redesignated by subsection

(a)(1)), by striking ‘‘(or updates)’’ each place it appears, and

(4) in subsection (j)(1), by striking ‘‘The term’’ and inserting

‘‘For services furnished before January 1, 1998, the term’’.

SEC. 4502. ESTABLISHING UPDATE TO CONVERSION FACTOR TO

MATCH SPENDING UNDER SUSTAINABLE GROWTH RATE.

(a) UPDATE.— (1) IN GENERAL.—Section 1848(d)(3) (42 U.S.C. 1395w–

4(d)(3)) is amended to read as follows:

‘‘(3) UPDATE.—

‘‘(A) IN GENERAL.—Unless otherwise provided by law,

subject to subparagraph (D) and the budget-neutrality factor determined by the Secretary under subsection

(c)(2)(B)(ii), the update to the single conversion factor established in paragraph (1)(C) for a year beginning with 1999

is equal to the product of—

‘‘(i) 1 plus the Secretary’s estimate of the percentage increase in the MEI (as defined in section

1842(i)(3)) for the year (divided by 100), and

‘‘(ii) 1 plus the Secretary’s estimate of the update

adjustment factor for the year (divided by 100),

minus 1 and multiplied by 100.
H. R. 2015—183

‘‘(B) UPDATE ADJUSTMENT FACTOR.—For purposes of

subparagraph (A)(ii), the ‘update adjustment factor’ for a

year is equal (as estimated by the Secretary) to—

‘‘(i) the difference between (I) the sum of the

allowed expenditures for physicians’ services (as determined under subparagraph (C)) for the period beginning April 1, 1997, and ending on March 31 of the

year involved, and (II) the amount of actual expenditures for physicians’ services furnished during the

period beginning April 1, 1997, and ending on March

31 of the preceding year; divided by

‘‘(ii) the actual expenditures for physicians’ services

for the 12-month period ending on March 31 of the

preceding year, increased by the sustainable growth

rate under subsection (f) for the fiscal year which

begins during such 12-month period.

‘‘(C) DETERMINATION OF ALLOWED EXPENDITURES.—For

purposes of this paragraph, the allowed expenditures for

physicians’ services for the 12-month period ending with

March 31 of—

‘‘(i) 1997 is equal to the actual expenditures for

physicians’ services furnished during such 12-month

period, as estimated by the Secretary; or

‘‘(ii) a subsequent year is equal to the allowed

expenditures for physicians’ services for the previous

year, increased by the sustainable growth rate under

subsection (f) for the fiscal year which begins during

such 12-month period.

‘‘(D) RESTRICTION ON VARIATION FROM MEDICARE ECO- NOMIC INDEX.—Notwithstanding the amount of the update

adjustment factor determined under subparagraph (B) for

a year, the update in the conversion factor under this

paragraph for the year may not be—

‘‘(i) greater than 100 times the following amount:

(1.03 + (MEI percentage/100)) ¥1; or

‘‘(ii) less than 100 times the following amount:

(0.93 + (MEI percentage/100)) ¥1,

where ‘MEI percentage’ means the Secretary’s estimate

of the percentage increase in the MEI (as defined in section

1842(i)(3)) for the year involved.’’.

(2) EFFECTIVE DATE.—The amendment made by this subsection shall apply to the update for years beginning with

1999.

(b) ELIMINATION OF REPORT.—Section 1848(d) (42 U.S.C.

1395w–4(d)) is amended by striking paragraph (2).

SEC. 4503. REPLACEMENT OF VOLUME PERFORMANCE STANDARD

WITH SUSTAINABLE GROWTH RATE.

(a) IN GENERAL.—Section 1848(f) (42 U.S.C. 1395w–4(f)) is

amended by striking paragraphs (2) through (5) and inserting the

following:

‘‘(2) SPECIFICATION OF GROWTH RATE.—The sustainable

growth rate for all physicians’ services for a fiscal year (beginning with fiscal year 1998) shall be equal to the product of—

‘‘(A) 1 plus the Secretary’s estimate of the weighted

average percentage increase (divided by 100) in the fees

for all physicians’ services in the fiscal year involved,
H. R. 2015—184

‘‘(B) 1 plus the Secretary’s estimate of the percentage

change (divided by 100) in the average number of individuals enrolled under this part (other than Medicare+Choice

plan enrollees) from the previous fiscal year to the fiscal

year involved,

‘‘(C) 1 plus the Secretary’s estimate of the projected

percentage growth in real gross domestic product per capita

(divided by 100) from the previous fiscal year to the fiscal

year involved, and

‘‘(D) 1 plus the Secretary’s estimate of the percentage

change (divided by 100) in expenditures for all physicians’

services in the fiscal year (compared with the previous

fiscal year) which will result from changes in law and

regulations, determined without taking into account estimated changes in expenditures resulting from the update

adjustment factor determined under subsection (d)(3)(B),

minus 1 and multiplied by 100.

‘‘(3) DEFINITIONS.—In this subsection:

‘‘(A) SERVICES INCLUDED IN PHYSICIANS’ SERVICES.—

The term ‘physicians’ services’ includes other items and

services (such as clinical diagnostic laboratory tests and

radiology services), specified by the Secretary, that are

commonly performed or furnished by a physician or in

a physician’s office, but does not include services furnished

to a Medicare+Choice plan enrollee.

‘‘(B) MEDICARE+CHOICE PLAN ENROLLEE.—The term

‘Medicare+Choice plan enrollee’ means, with respect to a

fiscal year, an individual enrolled under this part who

has elected to receive benefits under this title for the fiscal

year through a Medicare+Choice plan offered under part

C, and also includes an individual who is receiving benefits

under this part through enrollment with an eligible

organization with a risk-sharing contract under section

1876.’’.

(b) CONFORMING AMENDMENT.—So much of section 1848(f) (42

U.S.C. 1395w–4(f)) as precedes paragraph (2) is amended to read

as follows:

‘‘(f) SUSTAINABLE GROWTH RATE.— ‘‘(1) PUBLICATION.—The Secretary shall cause to have published in the Federal Register the sustainable growth rate

for each fiscal year beginning with fiscal year 1998. Such

publication shall occur by not later than August 1 before each

fiscal year, except that such rate for fiscal year 1998 shall

be published not later than November 1, 1997.’’.

SEC. 4504. PAYMENT RULES FOR ANESTHESIA SERVICES.

(a) IN GENERAL.—Section 1848(d)(1) (42 U.S.C. 1395w–4(d)(1)),

as amended by section 4501(a), is amended—

(1) in subparagraph (C), by striking ‘‘The single’’ and inserting ‘‘Except as provided in subparagraph (D), the single’’;

(2) by redesignating subparagraph (D) as subparagraph

(E); and

(3) by inserting after subparagraph (C) the following new

subparagraph:

‘‘(D) SPECIAL RULES FOR ANESTHESIA SERVICES.—The

separate conversion factor for anesthesia services for a

year shall be equal to 46 percent of the single conversion
H. R. 2015—185

factor established for other physicians’ services, except as

adjusted for changes in work, practice expense, or malpractice relative value units.’’.

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

(a) shall apply to services furnished on or after January 1, 1998.

SEC. 4505. IMPLEMENTATION OF RESOURCE-BASED METHODOLOGIES.

(a) 1-YEAR DELAY IN IMPLEMENTATION.—Section 1848(c) (42

U.S.C. 1395w–4(c)) is amended—

(1) in paragraph (2)(C)(ii), in the matter before subclause

(I) and after subclause (II), by striking ‘‘1998’’ and inserting

‘‘1999’’ each place it appears; and

(2) in paragraph (3)(C)(ii), by striking ‘‘1998’’ and inserting

‘‘1999’’.

(b) PHASED-IN IMPLEMENTATION.—

(1) IN GENERAL.—Section 1848(c)(2)(C)(ii) (42 U.S.C.

1395w–4(c)(2)(C)(ii)) is further amended—

(A) by striking the comma at the end of clause (ii)

and inserting a period and the following:

‘‘For 1999, such number of units shall be determined

based 75 percent on such product and based 25 percent

on the relative practice expense resources involved in

furnishing the service. For 2000, such number of units

shall be determined based 50 percent on such product

and based 50 percent on such relative practice expense

resources. For 2001, such number of units shall be

determined based 25 percent on such product and

based 75 percent on such relative practice expense

resources. For a subsequent year, such number of units

shall be determined based entirely on such relative

practice expense resources.’’.

(2) CONFORMING AMENDMENT.—Section 1848(c)(3)(C)(ii) (42

U.S.C. 1395w–4(c)(3)(C)(ii)), as amended by subsection (a)(2),

is amended by striking ‘‘1999’’ and inserting ‘‘2002’’.

(c) REVIEW BY COMPTROLLER GENERAL.—The Comptroller General of the United States shall review and evaluate the proposed

rule on resource-based methodology for practice expenses issued

by the Secretary of Health and Human Services. The Comptroller

General shall, within 6 months of the date of the enactment of

this Act, report to the Committees on Commerce and Ways and

Means of the House of Representatives and the Committee on

Finance of the Senate the results of its evaluation, including an

analysis of—

(1) the adequacy of the data used in preparing the rule,

(2) categories of allowable costs,

(3) methods for allocating direct and indirect expenses,

(4) the potential impact of the rule on beneficiary access

to services, and

(5) any other matters related to the appropriateness of

resource-based methodology for practice expenses.

The Comptroller General shall consult with representatives of physicians’ organizations with respect to matters of both data and methodology.

(d) REQUIREMENTS FOR DEVELOPING NEW RESOURCE-BASED

PRACTICE EXPENSE RELATIVE VALUE UNITS.—

(1) DEVELOPMENT.—For purposes of section 1848(c)(2)(C)(ii)

of the Social Security Act, the Secretary of Health and Human
H. R. 2015—186

Services shall develop new resource-based relative value units.

In developing such units the Secretary shall—

(A) utilize, to the maximum extent practicable, generally accepted cost accounting principles which (i) recognize all staff, equipment, supplies, and expenses, not just

those which can be tied to specific procedures, and (ii)

use actual data on equipment utilization and other key

assumptions;

(B) consult with organizations representing physicians

regarding methodology and data to be used; and

(C) develop a refinement process to be used during

each of the 4 years of the transition period.

(2) REPORT.—The Secretary shall transmit a report by

March 1, 1998, on the development of resource-based relative

value units under paragraph (1) to the Committee on Ways

and Means and the Committee on Commerce of the House

of Representatives and the Committee on Finance of the Senate.

The report shall include a presentation of data to be used

in developing the value units and an explanation of the methodology.

(3) NOTICE OF PROPOSED RULEMAKING.—The Secretary shall

publish a notice of proposed rulemaking with the new resourcebased relative value units on or before May 1, 1998, and shall

allow for a 90-day public comment period.

(4) ITEMS INCLUDED.—The new proposed rule shall consider

the following:

(A) Impact projections which compare new proposed

payment amounts on data on actual physician practice

expenses.

(B) Impact projections for hospital-based and other

specialties, geographic payment localities, and urban versus

rural localities.

(e) ADJUSTMENTS TO RELATIVE VALUE UNITS FOR 1998.—Section

1848(c)(2) (42 U.S.C. 1395w–4(c)(2)) is amended by adding at the

end the following new subparagraph:

‘‘(G) ADJUSTMENTS IN RELATIVE VALUE UNITS FOR

1998.—

‘‘(i) IN GENERAL.—The Secretary shall—

‘‘(I) subject to clauses (iv) and (v), reduce the

practice expense relative value units applied to

any services described in clause (ii) furnished in

1998 to a number equal to 110 percent of the

number of work relative value units, and

‘‘(II) increase the practice expense relative

value units for office visit procedure codes during

1998 by a uniform percentage which the Secretary

estimates will result in an aggregate increase in

payments for such services equal to the aggregate

decrease in payments by reason of subclause (I).

‘‘(ii) SERVICES COVERED.—For purposes of clause

(i), the services described in this clause are physicians’

services that are not described in clause (iii) and for

which—

‘‘(I) there are work relative value units, and
H. R. 2015—187

‘‘(II) the number of practice expense relative

value units (determined for 1998) exceeds 110 percent of the number of work relative value units

(determined for such year).

‘‘(iii) EXCLUDED SERVICES.—For purposes of clause

(ii), the services described in this clause are services

which the Secretary determines at least 75 percent

of which are provided under this title in an office

setting.

‘‘(iv) LIMITATION ON AGGREGATE REALLOCATION.—

If the application of clause (i)(I) would result in an

aggregate amount of reductions under such clause in

excess of $390,000,000, such clause shall be applied

by substituting for 110 percent such greater percentage

as the Secretary estimates will result in the aggregate

amount of such reductions equaling $390,000,000.

‘‘(v) NO REDUCTION FOR CERTAIN SERVICES.—Practice expense relative value units for a procedure performed in an office or in a setting out of an office

shall not be reduced under clause (i) if the in-office

or out-of-office practice expense relative value, respectively, for the procedure would increase under the proposed rule on resource-based practice expenses issued

by the Secretary on June 18, 1997 (62 Federal Register

33158 et seq.).’’.

(f) APPLICATION OF RESOURCE-BASED METHODOLOGY TO MALPRACTICE RELATIVE VALUE UNITS.—

(1) IN GENERAL.—Section 1848(c)(2)(C)(iii) (42 U.S.C.

1395w–4(c)(2)(C)(iii)) is amended—

(A) in paragraph (2)(C)(iii)—

(i) by inserting ‘‘for the service for years before

2000’’ before ‘‘equal’’, and

(ii) by striking the period at the end and inserting

a comma and by adding at the end the following flush

matter:

‘‘and for years beginning with 2000 based on the malpractice expense resources involved in furnishing the

service.’’; and

(B) in paragraph (3)(C)(iii), by striking ‘‘The malpractice’’ and inserting ‘‘For years before 1999, the malpractice’’.

(2) APPLICATION OF CERTAIN BUDGET NEUTRALITY PROVI- SIONS.—In implementing the amendment made by paragraph

(1)(A)(ii), the provisions of clauses (ii)(II) and (iii) of section

1848(c)(2)(B) of the Social Security Act (42 U.S.C. 1395w–

4(c)(2)(B)) shall apply in the same manner as they apply to

adjustments under clause (ii)(I) of such section.

SEC. 4506. DISSEMINATION OF INFORMATION ON HIGH PER DISCHARGE RELATIVE VALUES FOR IN-HOSPITAL PHYSICIANS’ SERVICES.

(a) DETERMINATION AND NOTICE CONCERNING HOSPITAL-SPECIFIC PER DISCHARGE RELATIVE VALUES.—

(1) IN GENERAL.—For 1999 and 2001 the Secretary of

Health and Human Services shall determine for each hospital—

(A) the hospital-specific per discharge relative value

under subsection (b); and
H. R. 2015—188

(B) whether the hospital-specific relative value is projected to be excessive (as determined based on such value

represented as a percentage of the median of hospitalspecific per discharge relative values determined under

subsection (b)).

(2) NOTICE TO SUBSET OF MEDICAL STAFFS; EVALUATION

OF RESPONSES.—The Secretary shall notify the medical executive committee of a subset of the hospitals identified under

paragraph (1)(B) as having an excessive hospital-specific relative value, of the determinations made with respect to the

medical staff under paragraph (1). The Secretary shall evaluate

the responses of the hospitals so notified with the responses

of other hospitals so identified that were not so notified.

(b) DETERMINATION OF HOSPITAL-SPECIFIC PER DISCHARGE RELATIVE VALUES.—

(1) IN GENERAL.—For purposes of this section, the hospitalspecific per discharge relative value for the medical staff of

a hospital (other than a teaching hospital) for a year shall

be equal to the average per discharge relative value (as determined under section 1848(c)(2) of the Social Security Act (42

U.S.C. 1395w–4(c)(2)) for physicians’ services furnished to

inpatients of the hospital by the hospital’s medical staff (excluding interns and residents) during the second year preceding

that calendar year, adjusted for variations in case-mix among

hospitals and disproportionate share status and teaching status

among hospitals (as determined by the Secretary under paragraph (3)).

(2) SPECIAL RULE FOR TEACHING HOSPITALS.—The hospitalspecific relative value projected for a teaching hospital in a

year shall be equal to the sum of—

(A) the average per discharge relative value (as determined under section 1848(c)(2) of such Act) for physicians’

services furnished to inpatients of the hospital by the hospital’s medical staff (excluding interns and residents) during the second year preceding that calendar year, and

(B) the equivalent per discharge relative value (as

determined under such section) for physicians’ services furnished to inpatients of the hospital by interns and residents

of the hospital during the second year preceding that calendar year, adjusted for variations in case-mix among hospitals, and in disproportionate share status and teaching

status among hospitals (as determined by the Secretary

under paragraph (3)).

The Secretary shall determine the equivalent relative value

unit per discharge for interns and residents based on the best

available data and may make such adjustment in the aggregate.

(3) ADJUSTMENT FOR TEACHING AND DISPROPORTIONATE

SHARE HOSPITALS.—The Secretary shall adjust the allowable

per discharge relative values otherwise determined under this

subsection to take into account the needs of teaching hospitals

and hospitals receiving additional payments under subparagraphs (F) and (G) of section 1886(d)(5) of the Social Security

Act (42 U.S.C. 1395ww(d)(5)). The adjustment for teaching status or disproportionate share shall not be less than zero.

(c) DEFINITIONS.—For purposes of this section:
H. R. 2015—189

(1) HOSPITAL.—The term ‘‘hospital’’ means a subsection

(d) hospital as defined in section 1886(d) of the Social Security

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

(2) MEDICAL STAFF.—An individual furnishing a physician’s

service is considered to be on the medical staff of a hospital—

(A) if (in accordance with requirements for hospitals

established by the Joint Commission on Accreditation of

Health Organizations)—

(i) the individual is subject to bylaws, rules, and

regulations established by the hospital to provide a

framework for the self-governance of medical staff

activities,

(ii) subject to the bylaws, rules, and regulations,

the individual has clinical privileges granted by the

hospital’s governing body, and

(iii) under the clinical privileges, the individual

may provide physicians’ services independently within

the scope of the individual’s clinical privileges, or

(B) if the physician provides at least one service to

an individual entitled to benefits under this title in that

hospital.

(3) PHYSICIANS’ SERVICES.—The term ‘‘physicians’ services’’

means the services described in section 1848(j)(3) of the Social

Security Act (42 U.S.C. 1395w–4(j)(3)).

(4) RURAL AREA; URBAN AREA.—The terms ‘‘rural area’’

and ‘‘urban area’’ have the meaning given those terms under

section 1886(d)(2)(D) of such Act (42 U.S.C. 1395ww(d)(2)(D)).

(5) SECRETARY.—The term ‘‘Secretary’’ means the Secretary

of Health and Human Services.

(6) TEACHING HOSPITAL.—The term ‘‘teaching hospital’’

means a hospital which has a teaching program approved as

specified in section 1861(b)(6) of the Social Security Act (42

U.S.C. 1395x(b)(6)).

SEC. 4507. USE OF PRIVATE CONTRACTS BY MEDICARE BENEFICIARIES.

(a) ITEMS OR SERVICES PROVIDED THROUGH PRIVATE CON- TRACTS.—

(1) IN GENERAL.—Section 1802 (42 U.S.C. 1395a) is amended by adding at the end the following new subsection:

‘‘(b) USE OF PRIVATE CONTRACTS BY MEDICARE BENEFICIARIES.— ‘‘(1) IN GENERAL.—Subject to the provisions of this subsection, nothing in this title shall prohibit a physician or practitioner from entering into a private contract with a medicare

beneficiary for any item or service—

‘‘(A) for which no claim for payment is to be submitted

under this title, and

‘‘(B) for which the physician or practitioner receives—

‘‘(i) no reimbursement under this title directly or

on a capitated basis, and

‘‘(ii) receives no amount for such item or service

from an organization which receives reimbursement

for such item or service under this title directly or

on a capitated basis.

‘‘(2) BENEFICIARY PROTECTIONS.—

‘‘(A) IN GENERAL.—Paragraph (1) shall not apply to

any contract unless—
H. R. 2015—190

‘‘(i) the contract is in writing and is signed by

the medicare beneficiary before any item or service

is provided pursuant to the contract;

‘‘(ii) the contract contains the items described in

subparagraph (B); and

‘‘(iii) the contract is not entered into at a time

when the medicare beneficiary is facing an emergency

or urgent health care situation.

‘‘(B) ITEMS REQUIRED TO BE INCLUDED IN CONTRACT.—

Any contract to provide items and services to which paragraph (1) applies shall clearly indicate to the medicare

beneficiary that by signing such contract the beneficiary—

‘‘(i) agrees not to submit a claim (or to request

that the physician or practitioner submit a claim)

under this title for such items or services even if such

items or services are otherwise covered by this title;

‘‘(ii) agrees to be responsible, whether through

insurance or otherwise, for payment of such items or

services and understands that no reimbursement will

be provided under this title for such items or services;

‘‘(iii) acknowledges that no limits under this title

(including the limits under section 1848(g)) apply to

amounts that may be charged for such items or services;

‘‘(iv) acknowledges that Medigap plans under section 1882 do not, and other supplemental insurance

plans may elect not to, make payments for such items

and services because payment is not made under this

title; and

‘‘(v) acknowledges that the medicare beneficiary

has the right to have such items or services provided

by other physicians or practitioners for whom payment

would be made under this title.

Such contract shall also clearly indicate whether the physician or practitioner is excluded from participation under

the medicare program under section 1128.

‘‘(3) PHYSICIAN OR PRACTITIONER REQUIREMENTS.— ‘‘(A) IN GENERAL.—Paragraph (1) shall not apply to

any contract entered into by a physician or practitioner

unless an affidavit described in subparagraph (B) is in

effect during the period any item or service is to be provided

pursuant to the contract.

‘‘(B) AFFIDAVIT.—An affidavit is described in this

subparagraph if—

‘‘(i) the affidavit identifies the physician or practitioner and is in writing and is signed by the physician

or practitioner;

‘‘(ii) the affidavit provides that the physician or

practitioner will not submit any claim under this title

for any item or service provided to any medicare beneficiary (and will not receive any reimbursement or

amount described in paragraph (1)(B) for any such

item or service) during the 2-year period beginning

on the date the affidavit is signed; and

‘‘(iii) a copy of the affidavit is filed with the Secretary no later than 10 days after the first contract

to which such affidavit applies is entered into.
H. R. 2015—191

‘‘(C) ENFORCEMENT.—If a physician or practitioner

signing an affidavit under subparagraph (B) knowingly

and willfully submits a claim under this title for any item

or service provided during the 2-year period described in

subparagraph (B)(ii) (or receives any reimbursement or

amount described in paragraph (1)(B) for any such item

or service) with respect to such affidavit—

‘‘(i) this subsection shall not apply with respect

to any items and services provided by the physician

or practitioner pursuant to any contract on and after

the date of such submission and before the end of

such period; and

‘‘(ii) no payment shall be made under this title

for any item or service furnished by the physician

or practitioner during the period described in clause

(i) (and no reimbursement or payment of any amount

described in paragraph (1)(B) shall be made for any

such item or service).

‘‘(4) LIMITATION ON ACTUAL CHARGE AND CLAIM SUBMISSION

REQUIREMENT NOT APPLICABLE.—Section 1848(g) shall not apply

with respect to any item or service provided to a medicare

beneficiary under a contract described in paragraph (1).

‘‘(5) DEFINITIONS.—In this subsection:

‘‘(A) MEDICARE BENEFICIARY.—The term ‘medicare

beneficiary’ means an individual who is entitled to benefits

under part A or enrolled under part B.

‘‘(B) PHYSICIAN.—The term ‘physician’ has the meaning

given such term by section 1861(r)(1).

‘‘(C) PRACTITIONER.—The term ‘practitioner’ has the

meaning given such term by section 1842(b)(18)(C).’’

(2) CONFORMING AMENDMENTS.—

(A) Section 1802 (42 U.S.C. 1395a) is amended by

striking ‘‘Any’’ and inserting ‘‘(a) BASIC FREEDOM OF

CHOICE.—Any’’.

(B) Section 1862(a) (42 U.S.C. 1395y(a)), as amended

by sections 4319(b) and 4432, is amended by striking ‘‘or’’

at the end of paragraph (17), by striking the period at

the end of paragraph (18) and inserting ‘‘; or’’, and by

adding after paragraph (18) the following new paragraph:

‘‘(19) which are for items or services which are furnished

pursuant to a private contract described in section 1802(b).’’.

(b) REPORT.—Not later than October 1, 2001, the Secretary

of Health and Human Services shall submit a report to Congress

on the effect on the program under this title of private contracts

entered into under the amendment made by subsection (a). Such

report shall include—

(1) analyses regarding—

(A) the fiscal impact of such contracts on total Federal

expenditures under title XVIII of the Social Security Act

and on out-of-pocket expenditures by medicare beneficiaries

for health services under such title; and

(B) the quality of the health services provided under

such contracts; and

(2) recommendations as to whether medicare beneficiaries

should continue to be able to enter private contracts under

section 1802(b) of such Act (as added by subsection (a)) and
H. R. 2015—192

if so, what legislative changes, if any should be made to improve

such contracts.

(c) EFFECTIVE DATE.—The amendment made by subsection (a)

shall apply with respect to contracts entered into on and after

January 1, 1998.

Subchapter B—Other Health Care Professionals

SEC. 4511. INCREASED MEDICARE REIMBURSEMENT FOR NURSE

PRACTITIONERS AND CLINICAL NURSE SPECIALISTS.

(a) REMOVAL OF RESTRICTIONS ON SETTINGS.—

(1) IN GENERAL.—Clause (ii) of section 1861(s)(2)(K) (42

U.S.C. 1395x(s)(2)(K)) is amended to read as follows:

‘‘(ii) services which would be physicians’ services if furnished by a physician (as defined in subsection (r)(1)) and

which are performed by a nurse practitioner or clinical nurse

specialist (as defined in subsection (aa)(5)) working in collaboration (as defined in subsection (aa)(6)) with a physician (as

defined in subsection (r)(1)) which the nurse practitioner or

clinical nurse specialist is legally authorized to perform by

the State in which the services are performed, and such services

and supplies furnished as an incident to such services as would

be covered under subparagraph (A) if furnished incident to

a physician’s professional service, but only if no facility or

other provider charges or is paid any amounts with respect

to the furnishing of such services;’’.

(2) CONFORMING AMENDMENTS.—(A) Section 1861(s)(2)(K)

(42 U.S.C. 1395x(s)(2)(K)) is further amended—

(i) in clause (i), by inserting ‘‘and such services and

supplies furnished as incident to such services as would

be covered under subparagraph (A) if furnished incident

to a physician’s professional service; and’’ after ‘‘are performed,’’; and

(ii) by striking clauses (iii) and (iv).

(B) Section 1861(b)(4) (42 U.S.C. 1395x(b)(4)) is amended

by striking ‘‘clauses (i) or (iii) of subsection (s)(2)(K)’’ and inserting ‘‘subsection (s)(2)(K)’’.

(C) Section 1862(a)(14) (42 U.S.C. 1395y(a)(14)) is amended

by striking ‘‘section 1861(s)(2)(K)(i) or 1861(s)(2)(K)(iii)’’ and

inserting ‘‘section 1861(s)(2)(K)’’.

(D) Section 1866(a)(1)(H) (42 U.S.C. 1395cc(a)(1)(H)) is

amended by striking ‘‘section 1861(s)(2)(K)(i) or

1861(s)(2)(K)(iii)’’ and inserting ‘‘section 1861(s)(2)(K)’’.

(E) Section 1888(e)(2)(A)(ii) (42 U.S.C. 1395yy(e)(2)(A)(ii)),

as added by section 4432(a) (relating to prospective payment

system for rehabilitation hospitals), is amended by striking

‘‘through (iii)’’ and inserting ‘‘and (ii)’’.

(b) INCREASED PAYMENT.—

(1) FEE SCHEDULE AMOUNT.—Subparagraph (O) of section

1833(a)(1) (42 U.S.C. 1395l(a)(1)) is amended to read as follows:

‘‘(O) with respect to services described in section

1861(s)(2)(K)(ii) (relating to nurse practitioner or clinical nurse

specialist services), the amounts paid shall be equal to 80

percent of (i) the lesser of the actual charge or 85 percent

of the fee schedule amount provided under section 1848, or

(ii) in the case of services as an assistant at surgery, the

lesser of the actual charge or 85 percent of the amount that
H. R. 2015—193

would otherwise be recognized if performed by a physician

who is serving as an assistant at surgery; and’’.

(2) CONFORMING AMENDMENTS.—Section 1833(r) (42 U.S.C.

1395l(r)) is amended—

(A) in paragraph (1), by striking ‘‘section

1861(s)(2)(K)(iii) (relating to nurse practitioner or clinical

nurse specialist services provided in a rural area)’’ and

inserting ‘‘section 1861(s)(2)(K)(ii) (relating to nurse practitioner or clinical nurse specialist services)’’;

(B) by striking paragraph (2);

(C) in paragraph (3), by striking ‘‘section

1861(s)(2)(K)(iii)’’ and inserting ‘‘section 1861(s)(2)(K)(ii)’’;

and

(D) by redesignating paragraph (3) as paragraph (2).

(c) DIRECT PAYMENT FOR NURSE PRACTITIONERS AND CLINICAL

NURSE SPECIALISTS.—Section 1832(a)(2)(B)(iv) (42 U.S.C.

1395k(a)(2)(B)(iv)) is amended by striking ‘‘provided in a rural area

(as defined in section 1886(d)(2)(D))’’ and inserting ‘‘but only if

no facility or other provider charges or is paid any amounts with

respect to the furnishing of such services’’.

(d) DEFINITION OF CLINICAL NURSE SPECIALIST CLARIFIED.—

Section 1861(aa)(5) (42 U.S.C. 1395x(aa)(5)) is amended—

(1) by inserting ‘‘(A)’’ after ‘‘(5)’’;

(2) by striking ‘‘The term ‘physician assistant’ ’’ and all

that follows through ‘‘who performs’’ and inserting ‘‘The term

‘physician assistant’ and the term ‘nurse practitioner’ mean,

for purposes of this title, a physician assistant or nurse practitioner who performs’’; and

(3) by adding at the end the following new subparagraph:

‘‘(B) The term ‘clinical nurse specialist’ means, for purposes

of this title, an individual who—

‘‘(i) is a registered nurse and is licensed to practice nursing

in the State in which the clinical nurse specialist services

are performed; and

‘‘(ii) holds a master’s degree in a defined clinical area

of nursing from an accredited educational institution.’’.

(e) EFFECTIVE DATE.—The amendments made by this section

shall apply with respect to services furnished and supplies provided

on and after January 1, 1998.

SEC. 4512. INCREASED MEDICARE REIMBURSEMENT FOR PHYSICIAN

ASSISTANTS.

(a) REMOVAL OF RESTRICTION ON SETTINGS.—Section

1861(s)(2)(K)(i) (42 U.S.C. 1395x(s)(2)(K)(i)), as amended by section

4511, is amended—

(1) by striking ‘‘(I) in a hospital’’ and all that follows

through ‘‘shortage area,’’, and

(2) by adding at the end the following: ‘‘but only if no

facility or other provider charges or is paid any amounts with

respect to the furnishing of such services,’’.

(b) INCREASED PAYMENT.—

(1) FEE SCHEDULE AMOUNT.—Section 1833(a)(1)(O) (42

U.S.C. 1395l(a)(1)(O)), as amended by section 4511, is further

amended—

(A) by striking ‘‘section 1861(s)(2)(K)(ii)’’ and inserting

‘‘1861(s)(2)(K)’’, and
H. R. 2015—194

(B) by striking ‘‘nurse practitioner or clinical nurse

specialist services’’ and inserting ‘‘services furnished by

physician assistants, nurse practitioners, or clinic nurse

specialists’’.

(2) CONFORMING AMENDMENT.—Paragraph (12) of section

1842(b) (42 U.S.C. 1395u(b)) is repealed.

(c) REMOVAL OF RESTRICTION ON EMPLOYMENT RELATIONSHIP.— Section 1842(b)(6) (42 U.S.C. 1395u(b)(6)), as amended by section

4205, is amended by adding at the end the following new sentence:

‘‘For purposes of subparagraph (C) of the first sentence of this

paragraph, an employment relationship may include any independent contractor arrangement, and employer status shall be determined in accordance with the law of the State in which the services

described in such clause are performed.’’.

(d) EFFECTIVE DATE.—The amendments made by this section

shall apply with respect to services furnished and supplies provided

on and after January 1, 1998.

SEC. 4513. NO X-RAY REQUIRED FOR CHIROPRACTIC SERVICES.

(a) IN GENERAL.—Section 1861(r)(5) (42 U.S.C. 1395x(r)(5)) is

amended by striking ‘‘demonstrated by X-ray to exist’’.

(b) EFFECTIVE DATE.—The amendment made by subsection (a)

applies to services furnished on or after January 1, 2000.

(c) UTILIZATION GUIDELINES.—The Secretary of Health and

Human Services shall develop and implement utilization guidelines

relating to the coverage of chiropractic services under part B of

title XVIII of the Social Security Act in cases in which a subluxation

has not been demonstrated by X-ray to exist.

CHAPTER 2—PAYMENT FOR HOSPITAL OUTPATIENT

DEPARTMENT SERVICES

SEC. 4521. ELIMINATION OF FORMULA-DRIVEN OVERPAYMENTS (FDO)

FOR CERTAIN OUTPATIENT HOSPITAL SERVICES.

(a) ELIMINATION OF FDO FOR AMBULATORY SURGICAL CENTER

PROCEDURES.—Section 1833(i)(3)(B)(i)(II) (42 U.S.C.

1395l(i)(3)(B)(i)(II)) is amended—

(1) by striking ‘‘of 80 percent’’; and

(2) by striking the period at the end and inserting the

following: ‘‘, less the amount a provider may charge as described

in clause (ii) of section 1866(a)(2)(A).’’.

(b) ELIMINATION OF FDO FOR RADIOLOGY SERVICES AND DIAG- NOSTIC PROCEDURES.—Section 1833(n)(1)(B)(i) (42 U.S.C.

1395l(n)(1)(B)(i)) is amended—

(1) by striking ‘‘of 80 percent’’, and

(2) by inserting before the period at the end the following:

‘‘, less the amount a provider may charge as described in

clause (ii) of section 1866(a)(2)(A)’’.

(c) EFFECTIVE DATE.—The amendments made by this section

shall apply to services furnished during portions of cost reporting

periods occurring on or after October 1, 1997.

SEC. 4522. EXTENSION OF REDUCTIONS IN PAYMENTS FOR COSTS OF

HOSPITAL OUTPATIENT SERVICES.

(a) REDUCTION IN PAYMENTS FOR CAPITAL-RELATED COSTS.— Section 1861(v)(1)(S)(ii)(I) (42 U.S.C. 1395x(v)(1)(S)(ii)(I)) is amended by striking ‘‘through 1998’’ and inserting ‘‘through 1999 and

during fiscal year 2000 before January 1, 2000’’.
H. R. 2015—195

(b) REDUCTION IN PAYMENTS FOR OTHER COSTS.—Section

1861(v)(1)(S)(ii)(II) (42 U.S.C. 1395x(v)(1)(S)(ii)(II)) is amended by

striking ‘‘through 1998’’ and inserting ‘‘through 1999 and during

fiscal year 2000 before January 1, 2000’’.

SEC. 4523. PROSPECTIVE PAYMENT SYSTEM FOR HOSPITAL OUTPATIENT DEPARTMENT SERVICES.

(a) IN GENERAL.—Section 1833 (42 U.S.C. 1395l) is amended

by adding at the end the following:

‘‘(t) PROSPECTIVE PAYMENT SYSTEM FOR HOSPITAL OUTPATIENT

DEPARTMENT SERVICES.—

‘‘(1) AMOUNT OF PAYMENT.—

‘‘(A) IN GENERAL.—With respect to covered OPD services (as defined in subparagraph (B)) furnished during a

year beginning with 1999, the amount of payment under

this part shall be determined under a prospective payment

system established by the Secretary in accordance with

this subsection.

‘‘(B) DEFINITION OF COVERED OPD SERVICES.—For purposes of this subsection, the term ‘covered OPD services’—

‘‘(i) means hospital outpatient services designated

by the Secretary;

‘‘(ii) subject to clause (iii), includes inpatient hospital services designated by the Secretary that are

covered under this part and furnished to a hospital

inpatient who (I) is entitled to benefits under part

A but has exhausted benefits for inpatient hospital

services during a spell of illness, or (II) is not so

entitled; but

‘‘(iii) does not include any therapy services

described in subsection (a)(8) or ambulance services,

for which payment is made under a fee schedule

described in section 1834(k) or section 1834(l).

‘‘(2) SYSTEM REQUIREMENTS.—Under the payment system—

‘‘(A) the Secretary shall develop a classification system

for covered OPD services;

‘‘(B) the Secretary may establish groups of covered

OPD services, within the classification system described

in subparagraph (A), so that services classified within each

group are comparable clinically and with respect to the

use of resources;

‘‘(C) the Secretary shall, using data on claims from

1996 and using data from the most recent available cost

reports, establish relative payment weights for covered

OPD services (and any groups of such services described

in subparagraph (B)) based on median hospital costs and

shall determine projections of the frequency of utilization

of each such service (or group of services) in 1999;

‘‘(D) the Secretary shall determine a wage adjustment

factor to adjust the portion of payment and coinsurance

attributable to labor-related costs for relative differences

in labor and labor-related costs across geographic regions

in a budget neutral manner;

‘‘(E) the Secretary shall establish other adjustments,

in a budget neutral manner, as determined to be necessary

to ensure equitable payments, such as outlier adjustments

or adjustments for certain classes of hospitals; and
H. R. 2015—196

‘‘(F) the Secretary shall develop a method for controlling unnecessary increases in the volume of covered OPD

services.

‘‘(3) CALCULATION OF BASE AMOUNTS.—

‘‘(A) AGGREGATE AMOUNTS THAT WOULD BE PAYABLE

IF DEDUCTIBLES WERE DISREGARDED.—The Secretary shall

estimate the sum of—

‘‘(i) the total amounts that would be payable from

the Trust Fund under this part for covered OPD services in 1999, determined without regard to this subsection, as though the deductible under section 1833(b)

did not apply, and

‘‘(ii) the total amounts of copayments estimated

to be paid under this subsection by beneficiaries to

hospitals for covered OPD services in 1999, as though

the deductible under section 1833(b) did not apply.

‘‘(B) UNADJUSTED COPAYMENT AMOUNT.—

‘‘(i) IN GENERAL.—For purposes of this subsection,

subject to clause (ii), the ‘unadjusted copayment

amount’ applicable to a covered OPD service (or group

of such services) is 20 percent of the national median

of the charges for the service (or services within the

group) furnished during 1996, updated to 1999 using

the Secretary’s estimate of charge growth during the

period.

‘‘(ii) ADJUSTED TO BE 20 PERCENT WHEN FULLY

PHASED IN.—If the pre-deductible payment percentage

for a covered OPD service (or group of such services)

furnished in a year would be equal to or exceed 80

percent, then the unadjusted copayment amount shall

be 20 percent of amount determined under subparagraph (D).

‘‘(iii) RULES FOR NEW SERVICES.—The Secretary

shall establish rules for establishment of an unadjusted

copayment amount for a covered OPD service not furnished during 1996, based upon its classification within

a group of such services.

‘‘(C) CALCULATION OF CONVERSION FACTORS.—

‘‘(i) FOR 1999.—

‘‘(I) IN GENERAL.—The Secretary shall establish a 1999 conversion factor for determining the

medicare OPD fee schedule amounts for each covered OPD service (or group of such services) furnished in 1999. Such conversion factor shall be

established on the basis of the weights and frequencies described in paragraph (2)(C) and in such

a manner that the sum for all services and groups

of the products (described in subclause (II) for

each such service or group) equals the total projected amount described in subparagraph (A).

‘‘(II) PRODUCT DESCRIBED.—The Secretary

shall determine for each service or group the product of the medicare OPD fee schedule amounts

(taking into account appropriate adjustments

described in paragraphs (2)(D) and (2)(E)) and the

estimated frequencies for such service or group.
H. R. 2015—197

‘‘(ii) SUBSEQUENT YEARS.—Subject to paragraph

(8)(B), the Secretary shall establish a conversion factor

for covered OPD services furnished in subsequent years

in an amount equal to the conversion factor established

under this subparagraph and applicable to such services furnished in the previous year increased by the

OPD fee schedule increase factor specified under clause

(iii) for the year involved.

‘‘(iii) OPD FEE SCHEDULE INCREASE FACTOR.—For

purposes of this subparagraph, the ‘OPD fee schedule

increase factor’ for services furnished in a year is equal

to the market basket percentage increase applicable

under section 1886(b)(3)(B)(iii) to hospital discharges

occurring during the fiscal year ending in such year,

reduced by 1 percentage point for such factor for services furnished in each of 2000, 2001, and 2002. In

applying the previous sentence for years beginning

with 2000, the Secretary may substitute for the market

basket percentage increase an annual percentage

increase that is computed and applied with respect

to covered OPD services furnished in a year in the

same manner as the market basket percentage increase

is determined and applied to inpatient hospital services

for discharges occurring in a fiscal year.

‘‘(D) CALCULATION OF MEDICARE OPD FEE SCHEDULE

AMOUNTS.—The Secretary shall compute a medicare OPD

fee schedule amount for each covered OPD service (or group

of such services) furnished in a year, in an amount equal

to the product of—

‘‘(i) the conversion factor computed under subparagraph (C) for the year, and

‘‘(ii) the relative payment weight (determined

under paragraph (2)(C)) for the service or group.

‘‘(E) PRE-DEDUCTIBLE PAYMENT PERCENTAGE.—The predeductible payment percentage for a covered OPD service

(or group of such services) furnished in a year is equal

to the ratio of—

‘‘(i) the medicare OPD fee schedule amount established under subparagraph (D) for the year, minus

the unadjusted copayment amount determined under

subparagraph (B) for the service or group, to

‘‘(ii) the medicare OPD fee schedule amount determined under subparagraph (D) for the year for such

service or group.

‘‘(4) MEDICARE PAYMENT AMOUNT.—The amount of payment

made from the Trust Fund under this part for a covered OPD

service (and such services classified within a group) furnished

in a year is determined as follows:

‘‘(A) FEE SCHEDULE ADJUSTMENTS.—The medicare OPD

fee schedule amount (computed under paragraph (3)(D))

for the service or group and year is adjusted for relative

differences in the cost of labor and other factors determined

by the Secretary, as computed under paragraphs (2)(D)

and (2)(E).

‘‘(B) SUBTRACT APPLICABLE DEDUCTIBLE.—Reduce the

adjusted amount determined under subparagraph (A) by
H. R. 2015—198

the amount of the deductible under section 1833(b), to

the extent applicable.

‘‘(C) APPLY PAYMENT PROPORTION TO REMAINDER.—The

amount of payment is the amount so determined under

subparagraph (B) multiplied by the pre-deductible payment

percentage (as determined under paragraph (3)(E)) for the

service or group and year involved.

‘‘(5) COPAYMENT AMOUNT.—

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

(B), the copayment amount under this subsection is the

amount by which the amount described in paragraph (4)(B)

exceeds the amount of payment determined under paragraph (4)(C).

‘‘(B) ELECTION TO OFFER REDUCED COPAYMENT

AMOUNT.—The Secretary shall establish a procedure under

which a hospital, before the beginning of a year (beginning

with 1999), may elect to reduce the copayment amount

otherwise established under subparagraph (A) for some

or all covered OPD services to an amount that is not

less than 20 percent of the medicare OPD fee schedule

amount (computed under paragraph (3)(D)) for the service

involved. Under such procedures, such reduced copayment

amount may not be further reduced or increased during

the year involved and the hospital may disseminate

information on the reduction of copayment amount effected

under this subparagraph.

‘‘(C) NO IMPACT ON DEDUCTIBLES.—Nothing in this

paragraph shall be construed as affecting a hospital’s

authority to waive the charging of a deductible under section 1833(b).

‘‘(6) PERIODIC REVIEW AND ADJUSTMENTS COMPONENTS OF

PROSPECTIVE PAYMENT SYSTEM.— ‘‘(A) PERIODIC REVIEW.—The Secretary may periodically

review and revise the groups, the relative payment weights,

and the wage and other adjustments described in paragraph (2) to take into account changes in medical practice,

changes in technology, the addition of new services, new

cost data, and other relevant information and factors.

‘‘(B) BUDGET NEUTRALITY ADJUSTMENT.—If the Secretary makes adjustments under subparagraph (A), then

the adjustments for a year may not cause the estimated

amount of expenditures under this part for the year to

increase or decrease from the estimated amount of expenditures under this part that would have been made if the

adjustments had not been made.

‘‘(C) UPDATE FACTOR.—If the Secretary determines

under methodologies described in paragraph (2)(F) that

the volume of services paid for under this subsection

increased beyond amounts established through those methodologies, the Secretary may appropriately adjust the

update to the conversion factor otherwise applicable in

a subsequent year.

‘‘(7) SPECIAL RULE FOR AMBULANCE SERVICES.—The Secretary shall pay for hospital outpatient services that are ambulance services on the basis described in the matter in subsection

(a)(1) preceding subparagraph (A), or, if applicable, the fee

schedule established under section 1834(l).
H. R. 2015—199

‘‘(8) SPECIAL RULES FOR CERTAIN HOSPITALS.—In the case

of hospitals described in section 1886(d)(1)(B)(v)—

‘‘(A) the system under this subsection shall not apply

to covered OPD services furnished before January 1, 2000;

and

‘‘(B) the Secretary may establish a separate conversion

factor for such services in a manner that specifically takes

into account the unique costs incurred by such hospitals

by virtue of their patient population and service intensity.

‘‘(9) LIMITATION ON REVIEW.—There shall be no administrative or judicial review under section 1869, 1878, or otherwise

of—

‘‘(A) the development of the classification system under

paragraph (2), including the establishment of groups and

relative payment weights for covered OPD services, of wage

adjustment factors, other adjustments, and methods

described in paragraph (2)(F);

‘‘(B) the calculation of base amounts under paragraph

(3);

‘‘(C) periodic adjustments made under paragraph (6);

and

‘‘(D) the establishment of a separate conversion factor

under paragraph (8)(B).’’.

(b) COINSURANCE.—Section 1866(a)(2)(A)(ii) (42 U.S.C.

1395cc(a)(2)(A)(ii)) is amended by adding at the end the following:

‘‘In the case of items and services for which payment is made

under part B under the prospective payment system established

under section 1833(t), clause (ii) of the first sentence shall be

applied by substituting for 20 percent of the reasonable charge,

the applicable copayment amount established under section

1833(t)(5).’’.

(c) TREATMENT OF REDUCTION IN COPAYMENT AMOUNT.—Section

1128A(i)(6) (42 U.S.C. 1320a–7a(i)(6)) is amended—

(1) by striking ‘‘or’’ at the end of subparagraph (B),

(2) by striking the period at the end of subparagraph (C)

and inserting ‘‘; or’’, and

(3) by adding at the end the following new subparagraph:

‘‘(D) a reduction in the copayment amount for covered

OPD services under section 1833(t)(5)(B).’’.

(d) CONFORMING AMENDMENTS.—

(1) APPROVED ASC PROCEDURES PERFORMED IN HOSPITAL

OUTPATIENT DEPARTMENTS.—

(A)(i) Section 1833(i)(3)(A) (42 U.S.C. 1395l(i)(3)(A)) is

amended—

(I) by inserting ‘‘before January 1, 1999,’’ after

‘‘furnished’’, and

(II) by striking ‘‘in a cost reporting period’’.

(ii) The amendment made by clause (i) shall apply

to services furnished on or after January 1, 1999.

(B) Section 1833(a)(4) (42 U.S.C. 1395l(a)(4)) is amended by inserting ‘‘or subsection (t)’’ before the semicolon.

(2) RADIOLOGY AND OTHER DIAGNOSTIC PROCEDURES.—

(A) Section 1833(n)(1)(A) (42 U.S.C. 1395l(n)(1)(A)) is

amended by inserting ‘‘and before January 1, 1999,’’ after

‘‘October 1, 1988,’’ and after ‘‘October 1, 1989,’’.
H. R. 2015—200

(B) Section 1833(a)(2)(E) (42 U.S.C. 1395l(a)(2)(E)) is

amended by inserting ‘‘or, for services or procedures performed on or after January 1, 1999, subsection (t)’’ before

the semicolon.

(3) OTHER HOSPITAL OUTPATIENT SERVICES.—Section

1833(a)(2)(B) (42 U.S.C. 1395l(a)(2)(B)) is amended—

(A) in clause (i), by inserting ‘‘furnished before January

1, 1999,’’ after ‘‘(i)’’,

(B) in clause (ii), by inserting ‘‘before January 1, 1999,’’

after ‘‘furnished’’,

(C) by redesignating clause (iii) as clause (iv), and

(D) by inserting after clause (ii), the following new

clause:

‘‘(iii) if such services are furnished on or after

January 1, 1999, the amount determined under subsection (t), or’’.

CHAPTER 3—AMBULANCE SERVICES

SEC. 4531. PAYMENTS FOR AMBULANCE SERVICES.

(a) INTERIM REDUCTIONS.—

(1) PAYMENTS DETERMINED ON REASONABLE COST BASIS.—

Section 1861(v)(1) (42 U.S.C. 1395x(v)(1)), as amended by section 4451, is amended by adding at the end the following

new subparagraph:

‘‘(U) In determining the reasonable cost of ambulance

services (as described in subsection (s)(7)) provided during

fiscal year 1998, during fiscal year 1999, and during so

much of fiscal year 2000 as precedes January 1, 2000,

the Secretary shall not recognize the costs per trip in

excess of costs recognized as reasonable for ambulance

services provided on a per trip basis during the previous

fiscal year (after application of this subparagraph),

increased by the percentage increase in the consumer price

index for all urban consumers (U.S. city average) as estimated by the Secretary for the 12-month period ending

with the midpoint of the fiscal year involved reduced by

1.0 percentage point. For ambulance services provided after

June 30, 1998, the Secretary may provide that claims for

such services must include a code (or codes) under a uniform coding system specified by the Secretary that identifies the services furnished.’’.

(2) PAYMENTS DETERMINED ON REASONABLE CHARGE

BASIS.—Section 1842(b) (42 U.S.C. 1395u(b)) is amended by

adding at the end the following new paragraph:

‘‘(19) For purposes of section 1833(a)(1), the reasonable charge

for ambulance services (as described in section 1861(s)(7)) provided

during calendar year 1998 and calendar year 1999 may not exceed

the reasonable charge for such services provided during the previous

calendar year (after application of this paragraph), increased by

the percentage increase in the consumer price index for all urban

consumers (U.S. city average) as estimated by the Secretary for

the 12-month period ending with the midpoint of the year involved

reduced by 1.0 percentage point.’’.

(b) ESTABLISHMENT OF PROSPECTIVE FEE SCHEDULE.—
H. R. 2015—201

(1) PAYMENT IN ACCORDANCE WITH FEE SCHEDULE.—Section

1833(a)(1) (42 U.S.C. 1395l(a)(1)), as amended by section

4315(b), is amended—

(A) by striking ‘‘and (Q)’’ and inserting ‘‘(Q)’’; and

(B) by striking the semicolon at the end and inserting

the following: ‘‘, and (R) with respect to ambulance service,

the amounts paid shall be 80 percent of the lesser of

the actual charge for the services or the amount determined

by a fee schedule established by the Secretary under section

1834(l);’’.

(2) ESTABLISHMENT OF SCHEDULE.—Section 1834 (42 U.S.C.

1395m), as amended by section 4541, is amended by adding

at the end the following new subsection:

‘‘(l) ESTABLISHMENT OF FEE SCHEDULE FOR AMBULANCE SERVICES.—

‘‘(1) IN GENERAL.—The Secretary shall establish a fee schedule for payment for ambulance services whether provided

directly by a supplier or provider or under arrangement with

a provider under this part through a negotiated rulemaking

process described in title 5, United States Code, and in accordance with the requirements of this subsection.

‘‘(2) CONSIDERATIONS.—In establishing such fee schedule,

the Secretary shall—

‘‘(A) establish mechanisms to control increases in

expenditures for ambulance services under this part;

‘‘(B) establish definitions for ambulance services which

link payments to the type of services provided;

‘‘(C) consider appropriate regional and operational differences;

‘‘(D) consider adjustments to payment rates to account

for inflation and other relevant factors; and

‘‘(E) phase in the application of the payment rates

under the fee schedule in an efficient and fair manner.

‘‘(3) SAVINGS.—In establishing such fee schedule, the Secretary shall—

‘‘(A) ensure that the aggregate amount of payments

made for ambulance services under this part during 2000

does not exceed the aggregate amount of payments which

would have been made for such services under this part

during such year if the amendments made by section

4531(a) of the Balanced Budget Act of 1997 continued

in effect, except that in making such determination the

Secretary shall assume an update in such payments for

2002 equal to percentage increase in the consumer price

index for all urban consumers (U.S. city average) for the

12-month period ending with June of the previous year

reduced in the case of 2001 and 2002 by 1.0 percentage

points; and

‘‘(B) set the payment amounts provided under the fee

schedule for services furnished in 2001 and each subsequent year at amounts equal to the payment amounts

under the fee schedule for services furnished during the

previous year, increased by the percentage increase in the

consumer price index for all urban consumers (U.S. city

average) for the 12-month period ending with June of the

previous year reduced in the case of 2001 and 2002 by

1.0 percentage points.
H. R. 2015—202

‘‘(4) CONSULTATION.—In establishing the fee schedule for

ambulance services under this subsection, the Secretary shall

consult with various national organizations representing

individuals and entities who furnish and regulate ambulance

services and share with such organizations relevant data in

establishing such schedule.

‘‘(5) LIMITATION ON REVIEW.—There shall be no administrative or judicial review under section 1869 or otherwise of the

amounts established under the fee schedule for ambulance services under this subsection, including matters described in paragraph (2).

‘‘(6) RESTRAINT ON BILLING.—The provisions of subparagraphs (A) and (B) of section 1842(b)(18) shall apply to ambulance services for which payment is made under this subsection

in the same manner as they apply to services provided by

a practitioner described in section 1842(b)(18)(C).

‘‘(7) CODING SYSTEM.—The Secretary may require the claim

for any services for which the amount of payment is determined

under this subsection to include a code (or codes) under a

uniform coding system specified by the Secretary that identifies

the services furnished.’’.

(3) EFFECTIVE DATE.—The amendments made by this subsection shall apply to services furnished on or after January

1, 2000.

(c) AUTHORIZING PAYMENT FOR PARAMEDIC INTERCEPT SERVICE

PROVIDERS IN RURAL COMMUNITIES.—In promulgating regulations

to carry out section 1861(s)(7) of the Social Security Act (42 U.S.C.

1395x(s)(7)) with respect to the coverage of ambulance service,

the Secretary of Health and Human Services may include coverage

of advanced life support services (in this subsection referred to

as ‘‘ALS intercept services’’) provided by a paramedic intercept

service provider in a rural area if the following conditions are

met:

(1) The ALS intercept services are provided under a contract with one or more volunteer ambulance services and are

medically necessary based on the health condition of the

individual being transported.

(2) The volunteer ambulance service involved—

(A) is certified as qualified to provide ambulance service for purposes of such section,

(B) provides only basic life support services at the

time of the intercept, and

(C) is prohibited by State law from billing for any

services.

(3) The entity supplying the ALS intercept services—

(A) is certified as qualified to provide such services

under the medicare program under title XVIII of the Social

Security Act, and

(B) bills all recipients who receive ALS intercept services from the entity, regardless of whether or not such

recipients are medicare beneficiaries.
H. R. 2015—203

SEC. 4532. DEMONSTRATION OF COVERAGE OF AMBULANCE SERVICES

UNDER MEDICARE THROUGH CONTRACTS WITH UNITS

OF LOCAL GOVERNMENT.

(a) DEMONSTRATION PROJECT CONTRACTS WITH LOCAL GOVERN- MENTS.—The Secretary of Health and Human Services shall establish up to 3 demonstration projects under which, at the request

of a unit of local government, the Secretary enters into a contract

with the unit of local government under which—

(1) the unit of local government furnishes (or arranges

for the furnishing of) ambulance services for which payment

may be made under part B of title XVIII of the Social Security

Act for individuals residing in the unit of local government

who are enrolled under such part, except that the unit of

local government may not enter into the contract unless the

contract covers at least 80 percent of the individuals residing

in the unit of local government who are enrolled under such

part but not in a Medicare+Choice plan;

(2) any individual or entity furnishing ambulance services

under the contract meets the requirements otherwise applicable

to individuals and entities furnishing such services under such

part; and

(3) for each month during which the contract is in effect,

the Secretary makes a capitated payment to the unit of local

government in accordance with subsection (b).

The projects may extend over a period of not to exceed 3 years

each.

(b) AMOUNT OF PAYMENT.—

(1) IN GENERAL.—The amount of the monthly payment

made for months occurring during a calendar year to a unit

of local government under a demonstration project contract

under subsection (a) shall be equal to the product of—

(A) the Secretary’s estimate of the number of individuals covered under the contract for the month; and

(B) 1⁄12 of the capitated payment rate for the year

established under paragraph (2).

(2) CAPITATED PAYMENT RATE DEFINED.—In this subsection,

the ‘‘capitated payment rate’’ applicable to a contract under

this subsection for a calendar year is equal to 95 percent

of—

(A) for the first calendar year for which the contract

is in effect, the average annual per capita payment made

under part B of title XVIII of the Social Security Act

with respect to ambulance services furnished to such

individuals during the 3 most recent calendar years for

which data on the amount of such payment is available;

and

(B) for a subsequent year, the amount provided under

this paragraph for the previous year increased by the

percentage increase in the consumer price index for all

urban consumers (U.S. city average) for the 12-month

period ending with June of the previous year.

(c) OTHER TERMS OF CONTRACT.—The Secretary and the unit

of local government may include in a contract under this section

such other terms as the parties consider appropriate, including—

(1) covering individuals residing in additional units of local

government (under arrangements entered into between such

units and the unit of local government involved);
H. R. 2015—204

(2) permitting the unit of local government to transport

individuals to non-hospital providers if such providers are able

to furnish quality services at a lower cost than hospital providers; or

(3) implementing such other innovations as the unit of

local government may propose to improve the quality of ambulance services and control the costs of such services.

(d) CONTRACT PAYMENTS IN LIEU OF OTHER BENEFITS.—Payments under a contract to a unit of local government under this

section shall be instead of the amounts which (in the absence

of the contract) would otherwise be payable under part B of title

XVIII of the Social Security Act for the services covered under

the contract which are furnished to individuals who reside in the

unit of local government.

(e) REPORT ON EFFECTS OF CAPITATED CONTRACTS.—

(1) STUDY.—The Secretary shall evaluate the demonstration projects conducted under this section. Such evaluation

shall include an analysis of the quality and cost-effectiveness

of ambulance services furnished under the projects.

(2) REPORT.—Not later than January 1, 2000, the Secretary

shall submit a report to Congress on the study conducted under

paragraph (1), and shall include in the report such recommendations as the Secretary considers appropriate, including

recommendations regarding modifications to the methodology

used to determine the amount of payments made under such

contracts and extending or expanding such projects.

CHAPTER 4—PROSPECTIVE PAYMENT FOR OUTPATIENT

REHABILITATION SERVICES

SEC. 4541. PROSPECTIVE PAYMENT FOR OUTPATIENT REHABILITATION SERVICES.

(a) PAYMENT BASED ON FEE SCHEDULE.—

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

1395l(a)) is amended—

(A) in paragraph (2) in the matter before subparagraph

(A), by inserting ‘‘(C),’’ before ‘‘(D)’’;

(B) in paragraph (3), by striking ‘‘subparagraphs (D)

and (E) of section 1832(a)(2)’’ and inserting ‘‘section

1832(a)(2)(D)’’;

(C) in paragraph (6), by striking ‘‘and’’ at the end;

(D) in paragraph (7), by striking the period at the

end and inserting a semicolon; and

(E) by adding at the end the following new paragraphs:

‘‘(8) in the case of—

‘‘(A) outpatient physical therapy services (which

includes outpatient speech-language pathology services)

and outpatient occupational therapy services furnished—

‘‘(i) by a rehabilitation agency, public health

agency, clinic, comprehensive outpatient rehabilitation

facility, or skilled nursing facility,

‘‘(ii) by a home health agency to an individual

who is not homebound, or

‘‘(iii) by another entity under an arrangement with

an entity described in clause (i) or (ii); and
H. R. 2015—205

‘‘(B) outpatient physical therapy services (which

includes outpatient speech-language pathology services)

and outpatient occupational therapy services furnished—

‘‘(i) by a hospital to an outpatient or to a hospital

inpatient who is entitled to benefits under part A but

has exhausted benefits for inpatient hospital services

during a spell of illness or is not so entitled to benefits

under part A, or

‘‘(ii) by another entity under an arrangement with

a hospital described in clause (i),

the amounts described in section 1834(k); and

‘‘(9) in the case of services described in section 1832(a)(2)(E)

that are not described in paragraph (8), the amounts described

in section 1834(k).’’.

(2) PAYMENT RATES.—Section 1834 (42 U.S.C. 1395m) is

amended by adding at the end the following new subsection:

‘‘(k) PAYMENT FOR OUTPATIENT THERAPY SERVICES AND COMPREHENSIVE OUTPATIENT REHABILITATION SERVICES.—

‘‘(1) IN GENERAL.—With respect to services described in

section 1833(a)(8) or 1833(a)(9) for which payment is determined under this subsection, the payment basis shall be—

‘‘(A) for services furnished during 1998, the amount

determined under paragraph (2); or

‘‘(B) for services furnished during a subsequent year,

80 percent of the lesser of—

‘‘(i) the actual charge for the services, or

‘‘(ii) the applicable fee schedule amount (as defined

in paragraph (3)) for the services.

‘‘(2) PAYMENT IN 1998 BASED UPON ADJUSTED REASONABLE

COSTS.—The amount under this paragraph for services is the

lesser of—

‘‘(A) the charges imposed for the services, or

‘‘(B) the adjusted reasonable costs (as defined in paragraph (4)) for the services,

less 20 percent of the amount of the charges imposed for such

services.

‘‘(3) APPLICABLE FEE SCHEDULE AMOUNT.—In this subsection, the term ‘applicable fee schedule amount’ means, with

respect to services furnished in a year, the amount determined

under the fee schedule established under section 1848 for such

services furnished during the year or, if there is no such fee

schedule established for such services, the amount determined

under the fee schedule established for such comparable services

as the Secretary specifies.

‘‘(4) ADJUSTED REASONABLE COSTS.—In paragraph (2), the

term ‘adjusted reasonable costs’ means, with respect to any

services, reasonable costs determined for such services, reduced

by 10 percent. The 10-percent reduction shall not apply to

services described in section 1833(a)(8)(B) (relating to services

provided by hospitals).

‘‘(5) UNIFORM CODING.—For claims for services submitted

on or after April 1, 1998, for which the amount of payment

is determined under this subsection, the claim shall include

a code (or codes) under a uniform coding system specified

by the Secretary that identifies the services furnished.

‘‘(6) RESTRAINT ON BILLING.—The provisions of subparagraphs (A) and (B) of section 1842(b)(18) shall apply to therapy
H. R. 2015—206

services for which payment is made under this subsection in

the same manner as they apply to services provided by a

practitioner described in section 1842(b)(18)(C).’’.

(3) CONFORMING CHANGE IN BILLING.—Section

1866(a)(2)(A)(ii) (42 U.S.C. 1395cc(a)(2)(A)(ii)) is amended by

adding at the end the following: ‘‘In the case of services

described in section 1833(a)(8) or section 1833(a)(9) for which

payment is made under part B under section 1834(k), clause

(ii) of the first sentence shall be applied by substituting for

20 percent of the reasonable charge for such services 20 percent

of the lesser of the actual charge or the applicable fee schedule

amount (as defined in such section) for such services.’’.

(b) APPLICATION OF STANDARDS TO OUTPATIENT OCCUPATIONAL

AND PHYSICAL THERAPY SERVICES PROVIDED AS AN INCIDENT TO

A PHYSICIAN’S PROFESSIONAL SERVICES.—Section 1862(a), as amended by sections 4319(b), 4432(b), and 4507(a)(2)(B), (42 U.S.C.

1395y(a)) is amended—

(1) by striking ‘‘or’’ at the end of paragraph (18);

(2) by striking the period at the end of paragraph (19)

and inserting ‘‘; or’’; and

(3) by inserting after paragraph (19) the following:

‘‘(20) in the case of outpatient occupational therapy services

or outpatient physical therapy services furnished as an incident

to a physician’s professional services (as described in section

1861(s)(2)(A)), that do not meet the standards and conditions

(other than any licensing requirement specified by the Secretary) under the second sentence of section 1861(p) (or under

such sentence through the operation of section 1861(g)) as

such standards and conditions would apply to such therapy

services if furnished by a therapist.’’.

(c) APPLYING FINANCIAL LIMITATION TO ALL REHABILITATION

SERVICES.—Section 1833(g) (42 U.S.C. 1395l(g)) is amended—

(1) in the first sentence, by striking ‘‘services described

in the second sentence of section 1861(p)’’ and inserting ‘‘physical therapy services of the type described in section 1861(p),

but not described in section 1833(a)(8)(B), and physical therapy

services of such type which are furnished by a physician or

as incident to physicians’ services’’, and

(2) in the second sentence, by striking ‘‘outpatient occupational therapy services which are described in the second sentence of section 1861(p) through the operation of section

1861(g)’’ and inserting ‘‘occupational therapy services (of the

type that are described in section 1861(p) (but not described

in section 1833(a)(8)(B)) through the operation of section 1861(g)

and of such type which are furnished by a physician or as

incident to physicians’ services)’’.

(d) INDEXING LIMITATION.—

(1) IN GENERAL.—Section 1833(g) (42 U.S.C. 1395l(g)), as

amended by subsection (c), is further amended—

(A) by striking ‘‘$900’’ each place it appears and inserting ‘‘the amount specified in paragraph (2) for the year’’,

(B) by inserting ‘‘(1)’’ after ‘‘(g)’’,

(C) by designating the last sentence as a paragraph

(3), and

(D) by inserting before paragraph (3), as so designated,

the following:

‘‘(2) The amount specified in this paragraph—
H. R. 2015—207

‘‘(A) for 1999, 2000, and 2001, is $1,500, and

‘‘(B) for a subsequent year is the amount specified in this

paragraph for the preceding year increased by the percentage

increase in the MEI (as defined in section 1842(i)(3)) for such

subsequent year;

except that if an increase under subparagraph (B) for a year is

not a multiple of $10, it shall be rounded to the nearest multiple

of $10.’’.

(2) REPORT.—By not later than January 1, 2001, the Secretary of Health and Human Services shall submit to Congress

a report that includes recommendations on the establishment

of a revised coverage policy of outpatient physical therapy services and outpatient occupational therapy services under the

Social Security Act based on classification of individuals by

diagnostic category and prior use of services, in both inpatient

and outpatient settings, in place of the uniform dollar limitations specified in section 1833(g) of such Act, as amended

by paragraph (1). The recommendations shall include how such

a system of durational limits by diagnostic category might

be implemented in a budget-neutral manner.

(e) EFFECTIVE DATES.—

(1) The amendments made by subsections (a)(1), (a)(2),

and (b) apply to services furnished on or after January 1,

1998, including portions of cost reporting periods occurring

on or after such date, except that section 1834(k) of the Social

Security Act (as added by subsection (a)(2)) shall not apply

to services described in section 1833(a)(8)(B) of such Act (as

added by subsection (a)(1)) that are furnished during 1998.

(2) The amendments made by subsections (a)(3) and (c)

apply to services furnished on or after January 1, 1999.

(3) The amendments made by subsection (d)(1) apply to

expenses incurred on or after January 1, 1999.

CHAPTER 5—OTHER PAYMENT PROVISIONS

SEC. 4551. PAYMENTS FOR DURABLE MEDICAL EQUIPMENT.

(a) REDUCTION IN PAYMENT AMOUNTS FOR ITEMS OF DURABLE

MEDICAL EQUIPMENT.— (1) FREEZE IN UPDATE FOR COVERED ITEMS.—Section

1834(a)(14) (42 U.S.C. 1395m(a)(14)) is amended—

(A) in subparagraph (A), by striking ‘‘and’’ at the end;

(B) in subparagraph (B)—

(i) by striking ‘‘a subsequent year’’ and inserting

‘‘1993, 1994, 1995, 1996, and 1997’’, and

(ii) by striking the period at the end and inserting

a semicolon; and

(C) by adding at the end the following new subparagraphs:

‘‘(C) for each of the years 1998 through 2002, 0 percentage points; and

‘‘(D) for a subsequent year, the percentage increase

in the consumer price index for all urban consumers (U.S.

urban average) for the 12-month period ending with June

of the previous year.’’.

(2) UPDATE FOR ORTHOTICS AND PROSTHETICS.—Section

1834(h)(4)(A) (42 U.S.C. 1395m(h)(4)(A)) is amended—
H. R. 2015—208

(A) in clause (iii), by striking ‘‘, and’’ at the end and

inserting a semicolon;

(B) in clause (iv), by striking ‘‘a subsequent year’’ and

inserting ‘‘1996 and 1997’’; and

(C) by adding at the end the following new clauses:

‘‘(v) for each of the years 1998 through 2002, 1

percent, and

‘‘(vi) for a subsequent year, the percentage increase

in the consumer price index for all urban consumers

(United States city average) for the 12-month period

ending with June of the previous year;’’.

(b) PAYMENT FREEZE FOR PARENTERAL AND ENTERAL NUTRIENTS, SUPPLIES, AND EQUIPMENT.—In determining the amount of

payment under part B of title XVIII of the Social Security Act

with respect to parenteral and enteral nutrients, supplies, and

equipment during each of the years 1998 through 2002, the charges

determined to be reasonable with respect to such nutrients, supplies, and equipment may not exceed the charges determined to

be reasonable with respect to such nutrients, supplies, and equipment during 1995.

(c) UPGRADED DURABLE MEDICAL EQUIPMENT.—

(1) IN GENERAL.—Section 1834(a) (42 U.S.C. 1395m(a)),

as amended by section 4312(a), is amended by inserting after

paragraph (16) the following new paragraph:

‘‘(17) CERTAIN UPGRADED ITEMS.—

‘‘(A) INDIVIDUAL’S RIGHT TO CHOOSE UPGRADED ITEM.—

Notwithstanding any other provision of this title, the Secretary may issue regulations under which an individual

may purchase or rent from a supplier an item of upgraded

durable medical equipment for which payment would be

made under this subsection if the item were a standard

item.

‘‘(B) PAYMENTS TO SUPPLIER.—In the case of the purchase or rental of an upgraded item under subparagraph

(A)—

‘‘(i) the supplier shall receive payment under this

subsection with respect to such item as if such item

were a standard item; and

‘‘(ii) the individual purchasing or renting the item

shall pay the supplier an amount equal to the difference between the supplier’s charge and the amount

under clause (i).

In no event may the supplier’s charge for an upgraded

item exceed the applicable fee schedule amount (if any)

for such item.

‘‘(C) CONSUMER PROTECTION SAFEGUARDS.—Any regulations under subparagraph (A) shall provide for consumer

protection standards with respect to the furnishing of

upgraded equipment under subparagraph (A). Such regulations shall provide for—

‘‘(i) determination of fair market prices with

respect to an upgraded item;

‘‘(ii) full disclosure of the availability and price

of standard items and proof of receipt of such disclosure

information by the beneficiary before the furnishing

of the upgraded item;
H. R. 2015—209

‘‘(iii) conditions of participation for suppliers in

the billing arrangement;

‘‘(iv) sanctions of suppliers who are determined

to engage in coercive or abusive practices, including

exclusion; and

‘‘(v) such other safeguards as the Secretary determines are necessary.’’.

(2) EFFECTIVE DATE.—The amendment made by paragraph

(1) shall apply to purchases or rentals after the effective date

of any regulations issued pursuant to such amendment.

SEC. 4552. OXYGEN AND OXYGEN EQUIPMENT.

(a) IN GENERAL.—Section 1834(a)(9)(B) (42 U.S.C.

1395m(a)(9)(B)) is amended—

(1) in clause (iii), by striking ‘‘and’’ at the end;

(2) in clause (iv)—

(A) by striking ‘‘each subsequent year’’ and inserting

‘‘1995, 1996, and 1997’’, and

(B) by striking the period at the end and inserting

a semicolon; and

(3) by adding at the end the following new clauses:

‘‘(v) for 1998, 75 percent of the amount determined

under this subparagraph for 1997; and

‘‘(vi) for 1999 and each subsequent year, 70 percent

of the amount determined under this subparagraph

for 1997.’’.

(b) ESTABLISHMENT OF CLASSES FOR PAYMENT.—Section

1848(a)(9) (42 U.S.C. 1395m(a)(9)) is amended by adding at the

end the following new subparagraph:

‘‘(D) AUTHORITY TO CREATE CLASSES.— ‘‘(i) IN GENERAL.—Subject to clause (ii), the Secretary may establish separate classes for any item

of oxygen and oxygen equipment and separate national

limited monthly payment rates for each of such classes.

‘‘(ii) BUDGET NEUTRALITY.—The Secretary may

take actions under clause (i) only to the extent such

actions do not result in expenditures for any year

to be more or less than the expenditures which would

have been made if such actions had not been taken.’’.

(c) STANDARDS.—The Secretary shall as soon as practicable

establish service standards for persons seeking payment under part

B of title XVIII of the Social Security Act for the providing of

oxygen and oxygen equipment to beneficiaries within their homes.

(d) ACCESS TO HOME OXYGEN EQUIPMENT.— (1) STUDY.—The Comptroller General of the United States

shall study issues relating to access to home oxygen equipment

and shall, within 18 months after the date of the enactment

of this Act, report to the Committees on Commerce and Ways

and Means of the House of Representatives and the Committee

on Finance of the Senate the results of the study, including

recommendations (if any) for legislation.

(2) PEER REVIEW EVALUATION.—The Secretary of Health

and Human Services shall arrange for peer review organizations established under section 1154 of the Social Security

Act to evaluate access to, and quality of, home oxygen equipment.

(e) EFFECTIVE DATE.—
H. R. 2015—210

(1) OXYGEN.—The amendments made by subsection (a)

shall apply to items furnished on and after January 1, 1998.

(2) OTHER PROVISIONS.—The amendments made by this

section other than subsection (a) shall take effect on the date

of the enactment of this Act.

SEC. 4553. REDUCTION IN UPDATES TO PAYMENT AMOUNTS FOR CLINICAL DIAGNOSTIC LABORATORY TESTS; STUDY ON LABORATORY TESTS.

(a) CHANGE IN UPDATE.—Section 1833(h)(2)(A)(ii)(IV) (42 U.S.C.

1395l(h)(2)(A)(ii)(IV)) is amended by inserting ‘‘and 1998 through

2002’’ after ‘‘1995’’.

(b) LOWERING CAP ON PAYMENT AMOUNTS.—Section

1833(h)(4)(B) (42 U.S.C. 1395l(h)(4)(B)) is amended—

(1) in clause (vi), by striking ‘‘and’’ at the end;

(2) in clause (vii)—

(A) by inserting ‘‘and before January 1, 1998,’’ after

‘‘1995,’’, and

(B) by striking the period at the end and inserting

‘‘, and’’; and

(3) by adding at the end the following new clause:

‘‘(viii) after December 31, 1997, is equal to 74 percent

of such median.’’.

(c) STUDY AND REPORT ON CLINICAL LABORATORY TESTS.—

(1) IN GENERAL.—The Secretary shall request the Institute

of Medicine of the National Academy of Sciences to conduct

a study of payments under part B of title XVIII of the Social

Security Act for clinical laboratory tests. The study shall include

a review of the adequacy of the current methodology and recommendations regarding alternative payment systems. The

study shall also analyze and discuss the relationship between

such payment systems and access to high quality laboratory

tests for medicare beneficiaries, including availability and

access to new testing methodologies.

(2) REPORT TO CONGRESS.—The Secretary shall, not later

than 2 years after the date of enactment of this section, report

to the Committees on Ways and Means and Commerce of

the House of Representatives and the Committee on Finance

of the Senate the results of the study described in paragraph

(1), including any recommendations for legislation.

SEC. 4554. IMPROVEMENTS IN ADMINISTRATION OF LABORATORY

TESTS BENEFIT.

(a) SELECTION OF REGIONAL CARRIERS.— (1) IN GENERAL.—The Secretary of Health and Human

Services (in this section referred to as the ‘‘Secretary’’) shall—

(A) divide the United States into no more than 5

regions, and

(B) designate a single carrier for each such region,

for the purpose of payment of claims under part B of title

XVIII of the Social Security Act with respect to clinical diagnostic laboratory tests furnished on or after such date (not

later than July 1, 1999) as the Secretary specifies.

(2) DESIGNATION.—In designating such carriers, the Secretary shall consider, among other criteria—

(A) a carrier’s timeliness, quality, and experience in

claims processing, and
H. R. 2015—211

(B) a carrier’s capacity to conduct electronic data interchange with laboratories and data matches with other carriers.

(3) SINGLE DATA RESOURCE.—The Secretary shall select

one of the designated carriers to serve as a central statistical

resource for all claims information relating to such clinical

diagnostic laboratory tests handled by all the designated carriers under such part.

(4) ALLOCATION OF CLAIMS.—The allocation of claims for

clinical diagnostic laboratory tests to particular designated carriers shall be based on whether a carrier serves the geographic

area where the laboratory specimen was collected or other

method specified by the Secretary.

(5) SECRETARIAL EXCLUSION.—Paragraph (1) shall not apply

with respect to clinical diagnostic laboratory tests furnished

by physician office laboratories if the Secretary determines

that such offices would be unduly burdened by the application

of billing responsibilities with respect to more than one carrier.

(b) ADOPTION OF NATIONAL POLICIES FOR CLINICAL LABORATORY

TESTS BENEFIT.—

(1) IN GENERAL.—Not later than January 1, 1999, the Secretary shall first adopt, consistent with paragraph (2), national

coverage and administrative policies for clinical diagnostic laboratory tests under part B of title XVIII of the Social Security

Act, using a negotiated rulemaking process under subchapter

III of chapter 5 of title 5, United States Code.

(2) CONSIDERATIONS IN DESIGN OF NATIONAL POLICIES.—

The policies under paragraph (1) shall be designed to promote

program integrity and national uniformity and simplify

administrative requirements with respect to clinical diagnostic

laboratory tests payable under such part in connection with

the following:

(A) Beneficiary information required to be submitted

with each claim or order for laboratory tests.

(B) The medical conditions for which a laboratory test

is reasonable and necessary (within the meaning of section

1862(a)(1)(A) of the Social Security Act).

(C) The appropriate use of procedure codes in billing

for a laboratory test, including the unbundling of laboratory

services.

(D) The medical documentation that is required by

a medicare contractor at the time a claim is submitted

for a laboratory test in accordance with section 1833(e)

of the Social Security Act.

(E) Recordkeeping requirements in addition to any

information required to be submitted with a claim, including physicians’ obligations regarding such requirements.

(F) Procedures for filing claims and for providing remittances by electronic media.

(G) Limitation on frequency of coverage for the same

tests performed on the same individual.

(3) CHANGES IN LABORATORY POLICIES PENDING ADOPTION

OF NATIONAL POLICY.—During the period that begins on the

date of the enactment of this Act and ends on the date the

Secretary first implements national policies pursuant to regulations promulgated under this subsection, a carrier under such
H. R. 2015—212

part may implement changes relating to requirements for the

submission of a claim for clinical diagnostic laboratory tests.

(4) USE OF INTERIM POLICIES.—After the date the Secretary

first implements such national policies, the Secretary shall

permit any carrier to develop and implement interim policies

of the type described in paragraph (1), in accordance with

guidelines established by the Secretary, in cases in which a

uniform national policy has not been established under this

subsection and there is a demonstrated need for a policy to

respond to aberrant utilization or provision of unnecessary

tests. Except as the Secretary specifically permits, no policy

shall be implemented under this paragraph for a period of

longer than 2 years.

(5) INTERIM NATIONAL POLICIES.—After the date the Secretary first designates regional carriers under subsection (a),

the Secretary shall establish a process under which designated

carriers can collectively develop and implement interim national

policies of the type described in paragraph (1). No such policy

shall be implemented under this paragraph for a period of

longer than 2 years.

(6) BIENNIAL REVIEW PROCESS.—Not less often than once

every 2 years, the Secretary shall solicit and review comments

regarding changes in the national policies established under

this subsection. As part of such biennial review process, the

Secretary shall specifically review and consider whether to

incorporate or supersede interim policies developed under paragraph (4) or (5). Based upon such review, the Secretary may

provide for appropriate changes in the national policies previously adopted under this subsection.

(7) REQUIREMENT AND NOTICE.—The Secretary shall ensure

that any policies adopted under paragraph (3), (4), or (5) shall

apply to all laboratory claims payable under part B of title

XVIII of the Social Security Act, and shall provide for advance

notice to interested parties and a 45-day period in which such

parties may submit comments on the proposed change.

(c) INCLUSION OF LABORATORY REPRESENTATIVE ON CARRIER

ADVISORY COMMITTEES.—The Secretary shall direct that any

advisory committee established by a carrier to advise such carrier

with respect to coverage and administrative policies under part

B of title XVIII of the Social Security Act shall include an individual

to represent the independent clinical laboratories and such other

laboratories as the Secretary deems appropriate. The Secretary

shall consider recommendations from national and local organizations that represent independent clinical laboratories in such selection.

SEC. 4555. UPDATES FOR AMBULATORY SURGICAL SERVICES.

Section 1833(i)(2)(C) (42 U.S.C. 1395l(i)(2)(C)) is amended by

inserting at the end the following new sentence: ‘‘In each of the

fiscal years 1998 through 2002, the increase under this subparagraph shall be reduced (but not below zero) by 2.0 percentage

points.’’.

SEC. 4556. REIMBURSEMENT FOR DRUGS AND BIOLOGICALS.

(a) IN GENERAL.—Section 1842 (42 U.S.C. 1395u) is amended

by inserting after subsection (n) the following new subsection:

‘‘(o)(1) If a physician’s, supplier’s, or any other person’s bill

or request for payment for services includes a charge for a drug
H. R. 2015—213

or biological for which payment may be made under this part

and the drug or biological is not paid on a cost or prospective

payment basis as otherwise provided in this part, the amount

payable for the drug or biological is equal to 95 percent of the

average wholesale price.

‘‘(2) If payment for a drug or biological is made to a licensed

pharmacy approved to dispense drugs or biologicals under this

part, the Secretary may pay a dispensing fee (less the applicable

deductible and coinsurance amounts) to the pharmacy.’’.

(b) CONFORMING AMENDMENT.—Section 1833(a)(1) (42 U.S.C.

1395l(a)(1)), as amended by sections 4315(b) and 4531(b)(1), is

amended—

(1) by striking ‘‘and (R)’’ and inserting ‘‘(R)’’; and

(2) by striking the semicolon at the end and inserting

the following: ‘‘, and (S) with respect to drugs and biologicals

not paid on a cost or prospective payment basis as otherwise

provided in this part (other than items and services described

in subparagraph (B)), the amounts paid shall be 80 percent

of the lesser of the actual charge or the payment amount

established in section 1842(o);’’.

(c) STUDY AND REPORT.—The Secretary of Health and Human

Services shall study the effect on the average wholesale price of

drugs and biologicals of the amendments made by subsection (a)

and shall report to the Committees on Ways and Means and Commerce of the House of Representatives and the Committee on

Finance of the Senate the result of such study not later than

July 1, 1999.

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

(a) and (b) shall apply to drugs and biologicals furnished on or

after January 1, 1998.

SEC. 4557. COVERAGE OF ORAL ANTI-NAUSEA DRUGS UNDER

CHEMOTHERAPEUTIC REGIMEN.

(a) IN GENERAL.—Section 1861(s)(2) (42 U.S.C. 1395x(s)(2)),

as amended by sections 4104 and 4105, is amended—

(1) by striking ‘‘and’’ at the end of subparagraph (R); and

(2) by inserting after subparagraph (S) the following new

subparagraph:

‘‘(T) an oral drug (which is approved by the Federal Food

and Drug Administration) prescribed for use as an acute antiemetic used as part of an anticancer chemotherapeutic regimen

if the drug is administered by a physician (or as prescribed

by a physician)—

‘‘(i) for use immediately before, at, or within 48 hours

after the time of the administration of the anticancer

chemotherapeutic agent; and

‘‘(ii) as a full replacement for the anti-emetic therapy

which would otherwise be administered intravenously.’’.

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

(a) shall apply to items and services furnished on or after January

1, 1998.

SEC. 4558. RENAL DIALYSIS-RELATED SERVICES.

(a) AUDITING OF COST REPORTS.—Beginning with cost reports

for 1996, the Secretary shall audit cost reports of each renal dialysis

provider at least once every 3 years.

(b) IMPLEMENTATION OF QUALITY STANDARDS.—The Secretary

of Health and Human Services shall develop, by not later than
H. R. 2015—214

January 1, 1999, and implement, by not later than January 1,

2000, a method to measure and report quality of renal dialysis

services provided under the medicare program under title XVIII

of the Social Security Act.

SEC. 4559. TEMPORARY COVERAGE RESTORATION FOR PORTABLE

ELECTROCARDIOGRAM TRANSPORTATION.

(a) IN GENERAL.—Effective only for electrocardiogram tests furnished during 1998, the Secretary of Health and Human Services

shall restore separate payment, under part B of title XVIII of

the Social Security Act, for the transportation of electrocardiogram

equipment (HCPCS code R0076) based upon payment methods in

effect for such service as of December 31, 1996.

(b) DETERMINATION.—By not later than July 1, 1998, the Secretary of Health and Human Services shall make a recommendation

to the Committees on Commerce and Ways and Means of the

House of Representatives and the Committee on Finance of the

Senate as to whether coverage of portable electrocardiogram

transportation should be provided under part B of title XVIII of

the Social Security Act. In making such recommendation, the Secretary shall take into account the study of coverage of portable

electrocardiogram transportation conducted by the Comptroller General of the United States and other relevant information, including

information submitted by interested parties.

CHAPTER 6—PART B PREMIUM AND RELATED

PROVISIONS

Subchapter A—Determination of Part B Premium Amount

SEC. 4571. PART B PREMIUM.

(a) IN GENERAL.—Section 1839(a)(3) (42 U.S.C. 1395r(a)(3)) is

amended by striking the first 3 sentences and inserting the following: ‘‘The Secretary, during September of each year, shall determine

and promulgate a monthly premium rate for the succeeding calendar year that is equal to 50 percent of the monthly actuarial

rate for enrollees age 65 and over, determined according to paragraph (1), for that succeeding calendar year.’’.

(b) CONFORMING AND TECHNICAL AMENDMENTS.—

(1) SECTION 1839.—Section 1839 (42 U.S.C. 1395r) is

amended—

(A) in subsection (a)(2), by striking ‘‘(b) and (e)’’ and

inserting ‘‘(b), (c), and (f)’’;

(B) in the last sentence of subsection (a)(3)—

(i) by inserting ‘‘rate’’ after ‘‘premium’’, and

(ii) by striking ‘‘and the derivation of the dollar

amounts specified in this paragraph’’;

(C) in the first sentence of subsection (b), by striking

‘‘or (e)’’;

(D) by striking subsection (e); and

(E) by redesignating subsection (g) as subsection (e)

and inserting that subsection after subsection (d).

(2) SECTION 1844.—Subparagraphs (A)(i) and (B)(i) of section

1844(a)(1) (42 U.S.C. 1395w(a)(1)) are each amended by striking

‘‘or 1839(e), as the case may be’’.
H. R. 2015—215

Subchapter B—Other Provisions Related to Part B Premium

SEC. 4581. PROTECTIONS UNDER THE MEDICARE PROGRAM FOR DISABLED WORKERS WHO LOSE BENEFITS UNDER A GROUP

HEALTH PLAN.

(a) NO PREMIUM PENALTY FOR LATE ENROLLMENT.—The first

sentence of section 1839(b) (42 U.S.C. 1395r(b)) is amended by

inserting ‘‘and not pursuant to a special enrollment period under

section 1837(i)(4)’’ after ‘‘section 1837)’’.

(b) SPECIAL MEDICARE ENROLLMENT PERIOD.—

(1) IN GENERAL.—Section 1837(i) (42 U.S.C. 1395p(i)) is

amended by adding at the end the following new paragraph:

‘‘(4)(A) In the case of an individual who is entitled to benefits

under part A pursuant to section 226(b) and—

‘‘(i) who at the time the individual first satisfies paragraph

(1) of section 1836—

‘‘(I) is enrolled in a group health plan described in

section 1862(b)(1)(A)(v) by reason of the individual’s current

or former employment or by reason of the current or former

employment status of a member of the individual’s family,

and

‘‘(II) has elected not to enroll (or to be deemed enrolled)

under this section during the individual’s initial enrollment

period; and

‘‘(ii) whose continuous enrollment under such group health

plan is involuntarily terminated at a time when the enrollment

under the plan is not by reason of the individual’s current

employment or by reason of the current employment of a member of the individual’s family,

there shall be a special enrollment period described in subparagraph

(B).

‘‘(B) The special enrollment period referred to in subparagraph

(A) is the 6-month period beginning on the first day of the month

which includes the date of the enrollment termination described

in subparagraph (A)(ii).’’.

(2) COVERAGE PERIOD.—Section 1838(e) (42 U.S.C. 1395q(e))

is amended—

(A) by inserting ‘‘or 1837(i)(4)(B)’’ after ‘‘1837(i)(3)’’ the

first place it appears, and

(B) by inserting ‘‘or specified in section 1837(i)(4)(A)(i)’’

after ‘‘1837(i)(3)’’ the second place it appears.

(c) EFFECTIVE DATE.—The amendments made by this section

shall apply to involuntary terminations of coverage under a group

health plan occurring on or after the date of the enactment of

this Act.

SEC. 4582. GOVERNMENTAL ENTITIES ELIGIBLE TO ELECT TO PAY

PART B PREMIUMS FOR ELIGIBLE INDIVIDUALS.

Section 1839(e)(1) (as amended by section 4571(b)) is amended—

(1) by inserting ‘‘(or any appropriate State or local governmental entity specified by the Secretary)’’ after ‘‘State’’ the

first place it appears, and

(2) by inserting ‘‘(or such entity)’’ after ‘‘State’’ the second

and third place it appears.
H. R. 2015—216

Subtitle G—Provisions Relating to Parts A

and B

CHAPTER 1—HOME HEALTH SERVICES AND BENEFITS

Subchapter A—Payments For Home Health Services

SEC. 4601. RECAPTURING SAVINGS RESULTING FROM TEMPORARY

FREEZE ON PAYMENT INCREASES FOR HOME HEALTH

SERVICES.

(a) BASING UPDATES TO PER VISIT COST LIMITS ON LIMITS

FOR FISCAL YEAR 1993.—Section 1861(v)(1)(L) (42 U.S.C.

1395x(v)(1)(L)) is amended by adding at the end the following:

‘‘(iv) In establishing limits under this subparagraph for cost

reporting periods beginning after September 30, 1997, the Secretary

shall not take into account any changes in the home health market

basket, as determined by the Secretary, with respect to cost reporting periods which began on or after July 1, 1994, and before

July 1, 1996.’’.

(b) NO EXCEPTIONS PERMITTED BASED ON AMENDMENT.—The

Secretary of Health and Human Services shall not consider the

amendment made by subsection (a) in making any exemptions

and exceptions pursuant to section 1861(v)(1)(L)(ii) of the Social

Security Act (42 U.S.C. 1395x(v)(1)(L)(ii)).

SEC. 4602. INTERIM PAYMENTS FOR HOME HEALTH SERVICES.

(a) REDUCTIONS IN COST LIMITS.—Section 1861(v)(1)(L)(i) (42

U.S.C. 1395x(v)(1)(L)(i)) is amended—

(1) by moving the indentation of subclauses (I) through

(III) 2-ems to the left;

(2) in subclause (I), by inserting ‘‘of the mean of the laborrelated and nonlabor per visit costs for freestanding home

health agencies’’ before the comma at the end;

(3) in subclause (II), by striking ‘‘, or’’ and inserting ‘‘of

such mean,’’;

(4) in subclause (III)—

(A) by inserting ‘‘and before October 1, 1997,’’ after

‘‘July 1, 1987,’’, and

(B) by striking the comma at the end and inserting

‘‘of such mean, or’’; and

(5) by striking the matter following subclause (III) and

inserting the following:

‘‘(IV) October 1, 1997, 105 percent of the median of the

labor-related and nonlabor per visit costs for freestanding home

health agencies.’’.

(b) DELAY IN UPDATES.—Section 1861(v)(1)(L)(iii) (42 U.S.C.

1395x(v)(1)(L)(iii)) is amended by inserting ‘‘, or on or after July

1, 1997, and before October 1, 1997’’ after ‘‘July 1, 1996’’.

(c) ADDITIONS TO COST LIMITS.—Section 1861(v)(1)(L) (42 U.S.C.

1395x(v)(1)(L)) (as amended by section 4601(a)) is amended by

adding at the end the following new clauses:

‘‘(v) For services furnished by home health agencies for cost

reporting periods beginning on or after October 1, 1997, the Secretary shall provide for an interim system of limits. Payment shall

not exceed the costs determined under the preceding provisions

of this subparagraph or, if lower, the product of—
H. R. 2015—217

‘‘(I) an agency-specific per beneficiary annual limitation

calculated based 75 percent on 98 percent of the reasonable

costs (including nonroutine medical supplies) for the agency’s

12-month cost reporting period ending during fiscal year 1994,

and based 25 percent on 98 percent of the standardized regional

average of such costs for the agency’s census division, as applied

to such agency, for cost reporting periods ending during fiscal

year 1994, such costs updated by the home health market

basket index; and

‘‘(II) the agency’s unduplicated census count of patients

(entitled to benefits under this title) for the cost reporting

period subject to the limitation.

‘‘(vi) For services furnished by home health agencies for cost

reporting periods beginning on or after October 1, 1997, the following rules apply:

‘‘(I) For new providers and those providers without a 12-

month cost reporting period ending in fiscal year 1994, the

per beneficiary limitation shall be equal to the median of these

limits (or the Secretary’s best estimates thereof) applied to

other home health agencies as determined by the Secretary.

A home health agency that has altered its corporate structure

or name shall not be considered a new provider for this purpose.

‘‘(II) For beneficiaries who use services furnished by more

than one home health agency, the per beneficiary limitations

shall be prorated among the agencies.

‘‘(vii)(I) Not later than January 1, 1998, the Secretary shall

establish per visit limits applicable for fiscal year 1998, and not

later than April 1, 1998, the Secretary shall establish per beneficiary limits under clause (v)(I) for fiscal year 1998.

‘‘(II) Not later than August 1 of each year (beginning in 1998)

the Secretary shall establish the limits applicable under this

subparagraph for services furnished during the fiscal year beginning

October 1 of the year.’’.

(d) DEVELOPMENT OF CASE MIX SYSTEM.—The Secretary of

Health and Human Services shall expand research on a prospective

payment system for home health agencies under the medicare program that ties prospective payments to a unit of service, including

an intensive effort to develop a reliable case mix adjuster that

explains a significant amount of the variances in costs.

(e) SUBMISSION OF DATA FOR CASE MIX SYSTEM.—Effective

for cost reporting periods beginning on or after October 1, 1997,

the Secretary of Health and Human Services may require all home

health agencies to submit additional information that the Secretary

considers necessary for the development of a reliable case mix

system.

SEC. 4603. PROSPECTIVE PAYMENT FOR HOME HEALTH SERVICES.

(a) IN GENERAL.—Title XVIII (42 U.S.C. 1395 et seq.) (as

amended by section 4801) is amended by adding at the end the

following:

‘‘PROSPECTIVE PAYMENT FOR HOME HEALTH SERVICES

‘‘SEC. 1895. (a) IN GENERAL.—Notwithstanding section 1861(v),

the Secretary shall provide, for cost reporting periods beginning

on or after October 1, 1999, for payments for home health services

in accordance with a prospective payment system established by

the Secretary under this section.
H. R. 2015—218

‘‘(b) SYSTEM OF PROSPECTIVE PAYMENT FOR HOME HEALTH

SERVICES.—

‘‘(1) IN GENERAL.—The Secretary shall establish under this

subsection a prospective payment system for payment for all

costs of home health services. Under the system under this

subsection all services covered and paid on a reasonable cost

basis under the medicare home health benefit as of the date

of the enactment of the this section, including medical supplies,

shall be paid for on the basis of a prospective payment amount

determined under this subsection and applicable to the services

involved. In implementing the system, the Secretary may provide for a transition (of not longer than 4 years) during which

a portion of such payment is based on agency-specific costs,

but only if such transition does not result in aggregate payments under this title that exceed the aggregate payments

that would be made if such a transition did not occur.

‘‘(2) UNIT OF PAYMENT.—In defining a prospective payment

amount under the system under this subsection, the Secretary

shall consider an appropriate unit of service and the number,

type, and duration of visits provided within that unit, potential

changes in the mix of services provided within that unit and

their cost, and a general system design that provides for continued access to quality services.

‘‘(3) PAYMENT BASIS.—

‘‘(A) INITIAL BASIS.—

‘‘(i) IN GENERAL.—Under such system the Secretary

shall provide for computation of a standard prospective

payment amount (or amounts). Such amount (or

amounts) shall initially be based on the most current

audited cost report data available to the Secretary

and shall be computed in a manner so that the total

amounts payable under the system for fiscal year 2000

shall be equal to the total amount that would have

been made if the system had not been in effect but

if the reduction in limits described in clause (ii) had

been in effect. Such amount shall be standardized in

a manner that eliminates the effect of variations in

relative case mix and wage levels among different home

health agencies in a budget neutral manner consistent

with the case mix and wage level adjustments provided

under paragraph (4)(A). Under the system, the Secretary may recognize regional differences or differences

based upon whether or not the services or agency are

in an urbanized area.

‘‘(ii) REDUCTION.—The reduction described in this

clause is a reduction by 15 percent in the cost limits

and per beneficiary limits described in section

1861(v)(1)(L), as those limits are in effect on September

30, 1999.

‘‘(B) ANNUAL UPDATE.—

‘‘(i) IN GENERAL.—The standard prospective payment amount (or amounts) shall be adjusted for each

fiscal year (beginning with fiscal year 2001) in a

prospective manner specified by the Secretary by the

home health market basket percentage increase

applicable to the fiscal year involved.
H. R. 2015—219

‘‘(ii) HOME HEALTH MARKET BASKET PERCENTAGE

INCREASE.—For purposes of this subsection, the term

‘home health market basket percentage increase’

means, with respect to a fiscal year, a percentage (estimated by the Secretary before the beginning of the

fiscal year) determined and applied with respect to

the mix of goods and services included in home health

services in the same manner as the market basket

percentage increase under section 1886(b)(3)(B)(iii) is

determined and applied to the mix of goods and services comprising inpatient hospital services for the fiscal

year.

‘‘(C) ADJUSTMENT FOR OUTLIERS.—The Secretary shall

reduce the standard prospective payment amount (or

amounts) under this paragraph applicable to home health

services furnished during a period by such proportion as

will result in an aggregate reduction in payments for the

period equal to the aggregate increase in payments resulting from the application of paragraph (5) (relating to

outliers).

‘‘(4) PAYMENT COMPUTATION.—

‘‘(A) IN GENERAL.—The payment amount for a unit

of home health services shall be the applicable standard

prospective payment amount adjusted as follows:

‘‘(i) CASE MIX ADJUSTMENT.—The amount shall be

adjusted by an appropriate case mix adjustment factor

(established under subparagraph (B)).

‘‘(ii) AREA WAGE ADJUSTMENT.—The portion of such

amount that the Secretary estimates to be attributable

to wages and wage-related costs shall be adjusted for

geographic differences in such costs by an area wage

adjustment factor (established under subparagraph

(C)) for the area in which the services are furnished

or such other area as the Secretary may specify.

‘‘(B) ESTABLISHMENT OF CASE MIX ADJUSTMENT FAC- TORS.—The Secretary shall establish appropriate case mix

adjustment factors for home health services in a manner

that explains a significant amount of the variation in cost

among different units of services.

‘‘(C) ESTABLISHMENT OF AREA WAGE ADJUSTMENT FAC- TORS.—The Secretary shall establish area wage adjustment

factors that reflect the relative level of wages and wagerelated costs applicable to the furnishing of home health

services in a geographic area compared to the national

average applicable level. Such factors may be the factors

used by the Secretary for purposes of section 1886(d)(3)(E).

‘‘(5) OUTLIERS.—The Secretary may provide for an addition

or adjustment to the payment amount otherwise made in the

case of outliers because of unusual variations in the type or

amount of medically necessary care. The total amount of the

additional payments or payment adjustments made under this

paragraph with respect to a fiscal year may not exceed 5

percent of the total payments projected or estimated to be

made based on the prospective payment system under this

subsection in that year.

‘‘(6) PRORATION OF PROSPECTIVE PAYMENT AMOUNTS.—If a

beneficiary elects to transfer to, or receive services from,
H. R. 2015—220

another home health agency within the period covered by the

prospective payment amount, the payment shall be prorated

between the home health agencies involved.

‘‘(c) REQUIREMENTS FOR PAYMENT INFORMATION.—With respect

to home health services furnished on or after October 1, 1998,

no claim for such a service may be paid under this title unless—

‘‘(1) the claim has the unique identifier (provided under

section 1842(r)) for the physician who prescribed the services

or made the certification described in section 1814(a)(2) or

1835(a)(2)(A); and

‘‘(2) in the case of a service visit described in paragraph

(1), (2), (3), or (4) of section 1861(m), the claim contains a

code (or codes) specified by the Secretary that identifies the

length of time of the service visit, as measured in 15 minute

increments.

‘‘(d) LIMITATION ON REVIEW.—There shall be no administrative

or judicial review under section 1869, 1878, or otherwise of—

‘‘(1) the establishment of a transition period under subsection (b)(1);

‘‘(2) the definition and application of payment units under

subsection (b)(2);

‘‘(3) the computation of initial standard prospective payment amounts under subsection (b)(3)(A) (including the reduction described in clause (ii) of such subsection);

‘‘(4) the establishment of the adjustment for outliers under

subsection (b)(3)(C);

‘‘(5) the establishment of case mix and area wage adjustments under subsection (b)(4); and

‘‘(6) the establishment of any adjustments for outliers under

subsection (b)(5).’’.

(b) ELIMINATION OF PERIODIC INTERIM PAYMENTS FOR HOME

HEALTH AGENCIES.—Section 1815(e)(2) (42 U.S.C. 1395g(e)(2)) is

amended—

(1) by inserting ‘‘and’’ at the end of subparagraph (C),

(2) by striking subparagraph (D), and

(3) by redesignating subparagraph (E) as subparagraph

(D).

(c) CONFORMING AMENDMENTS.— (1) PAYMENTS UNDER PART A.—Section 1814(b) (42 U.S.C.

1395f(b)) is amended in the matter preceding paragraph (1)

by striking ‘‘and 1886’’ and inserting ‘‘1886, and 1895’’.

(2) TREATMENT OF ITEMS AND SERVICES PAID UNDER PART

B.— (A) PAYMENTS UNDER PART B.—Section 1833(a)(2) (42

U.S.C. 1395l(a)(2)) is amended—

(i) by amending subparagraph (A) to read as follows:

‘‘(A) with respect to home health services (other than

a covered osteoporosis drug) (as defined in section

1861(kk)), the amount determined under the prospective

payment system under section 1895;’’;

(ii) by striking ‘‘and’’ at the end of subparagraph

(E);

(iii) by adding ‘‘and’’ at the end of subparagraph

(F); and

(iv) by adding at the end the following new

subparagraph:
H. R. 2015—221

‘‘(G) with respect to items and services described in

section 1861(s)(10)(A), the lesser of—

‘‘(i) the reasonable cost of such services, as determined under section 1861(v), or

‘‘(ii) the customary charges with respect to such

services,

or, if such services are furnished by a public provider

of services, or by another provider which demonstrates

to the satisfaction of the Secretary that a significant portion

of its patients are low-income (and requests that payment

be made under this provision), free of charge or at nominal

charges to the public, the amount determined in accordance

with section 1814(b)(2);’’.

(B) REQUIRING PAYMENT FOR ALL ITEMS AND SERVICES

TO BE MADE TO AGENCY.—

(i) IN GENERAL.—The first sentence of section

1842(b)(6) (42 U.S.C. 1395u(b)(6)) (as amended by section 4432(b)(2)) is amended—

(I) by striking ‘‘and (E)’’ and inserting ‘‘(E)’’;

and

(II) by striking the period at the end and

inserting the following: ‘‘, and (F) in the case of

home health services furnished to an individual

who (at the time the item or service is furnished)

is under a plan of care of a home health agency,

payment shall be made to the agency (without

regard to whether or not the item or service was

furnished by the agency, by others under arrangement with them made by the agency, or when

any other contracting or consulting arrangement,

or otherwise).’’.

(ii) CONFORMING AMENDMENT.—Section 1832(a)(1)

(42 U.S.C. 1395k(a)(1)) (as amended by section

4432(b)(5)(B)) is amended by striking ‘‘section

1842(b)(6)(E);’’ and inserting ‘‘subparagraphs (E) and

(F) of section 1842(b)(6);’’.

(C) EXCLUSIONS FROM COVERAGE.—Section 1862(a) (42

U.S.C. 1395y(a)) (as amended by sections 4319(b), 4432(b),

4507(a)(2)(B) and 4541(b)) is amended—

(i) by striking ‘‘or’’ at the end of paragraph (19);

(ii) by striking the period at the end of paragraph

(20) and inserting ‘‘; or’’; and

(iii) by inserting after paragraph (20) the following:

‘‘(21) where such expenses are for home health services

furnished to an individual who is under a plan of care of

the home health agency if the claim for payment for such

services is not submitted by the agency.’’.

(d) EFFECTIVE DATE.—Except as otherwise provided, the

amendments made by this section shall apply to cost reporting

periods beginning on or after October 1, 1999.

(e) CONTINGENCY.—If the Secretary of Health and Human Services for any reason does not establish and implement the prospective

payment system for home health services described in section

1895(b) of the Social Security Act (as added by subsection (a))

for cost reporting periods described in subsection (d), for such cost

reporting periods the Secretary shall provide for a reduction by

15 percent in the cost limits and per beneficiary limits described
H. R. 2015—222

in section 1861(v)(1)(L) of such Act, as those limits would otherwise

be in effect on September 30, 1999.

SEC. 4604. PAYMENT BASED ON LOCATION WHERE HOME HEALTH

SERVICE IS FURNISHED.

(a) CONDITIONS OF PARTICIPATION.—Section 1891 (42 U.S.C.

1395bbb) is amended by adding at the end the following:

‘‘(g) PAYMENT ON BASIS OF LOCATION OF SERVICE.—A home

health agency shall submit claims for payment for home health

services under this title only on the basis of the geographic location

at which the service is furnished, as determined by the Secretary.’’.

(b) WAGE ADJUSTMENT.—Section 1861(v)(1)(L)(iii) (42 U.S.C.

1395x(v)(1)(L)(iii)) is amended by striking ‘‘agency is located’’ and

inserting ‘‘service is furnished’’.

(c) EFFECTIVE DATE.—The amendments made by this section

apply to cost reporting periods beginning on or after October 1,

1997.

Subchapter B—Home Health Benefits

SEC. 4611. MODIFICATION OF PART A HOME HEALTH BENEFIT FOR

INDIVIDUALS ENROLLED UNDER PART B.

(a) IN GENERAL.—Section 1812 (42 U.S.C. 1395d) is amended—

(1) in subsection (a)(3), by striking ‘‘home health services’’

and inserting ‘‘for individuals not enrolled in part B, home

health services, and for individuals so enrolled, post-institutional home health services furnished during a home health

spell of illness for up to 100 visits during such spell of illness’’;

and

(2) in subsection (b), by adding after and below paragraph

(3) the following:

‘‘Payment under this part for post-institutional home health services

furnished an individual during a home health spell of illness may

not be made for such services beginning after such services have

been furnished for a total of 100 visits such spell.’’.

(b) POST-INSTITUTIONAL HOME HEALTH SERVICES DEFINED.— Section 1861 (42 U.S.C. 1395x), as amended by sections 4103(a),

4104(a), 4105(a), 4106(a), and 4454, is amended by adding at the

end the following:

‘‘Post-Institutional Home Health Services; Home Health Spell of

Illness

‘‘(tt)(1) The term ‘post-institutional home health services’ means

home health services furnished to an individual—

‘‘(A) after discharge from a hospital or rural primary care

hospital in which the individual was an inpatient for not less

than 3 consecutive days before such discharge if such home

health services were initiated within 14 days after the date

of such discharge; or

‘‘(B) after discharge from a skilled nursing facility in which

the individual was provided post-hospital extended care services

if such home health services were initiated within 14 days

after the date of such discharge.

‘‘(2) The term ‘home health spell of illness’ with respect to

any individual means a period of consecutive days—

‘‘(A) beginning with the first day (not included in a previous

home health spell of illness) (i) on which such individual is
H. R. 2015—223

furnished post-institutional home health services, and (ii) which

occurs in a month for which the individual is entitled to benefits

under part A, and

‘‘(B) ending with the close of the first period of 60 consecutive days thereafter on each of which the individual is neither

an inpatient of a hospital or rural primary care hospital nor

an inpatient of a facility described in section 1819(a)(1) or

subsection (y)(1) nor provided home health services.’’.

(c) MAINTAINING APPEAL RIGHTS FOR HOME HEALTH SERVICES.—Section 1869(b)(2)(B) (42 U.S.C. 1395ff(b)(2)(B)) is amended

by inserting ‘‘(or $100 in the case of home health services)’’ after

‘‘$500’’.

(d) MAINTAINING SEAMLESS ADMINISTRATION THROUGH FISCAL

INTERMEDIARIES.—Section 1842(b)(2) (42 U.S.C. 1395u(b)(2)) is

amended by adding at the end the following:

‘‘(E) With respect to the payment of claims for home health

services under this part that, but for the amendments made by

section 4611 of the Balanced Budget Act of 1997, would be payable

under part A instead of under this part, the Secretary shall continue

administration of such claims through fiscal intermediaries under

section 1816.’’.

(e) TRANSITION.—

(1) IN GENERAL.—Notwithstanding any provision of title

XVIII of the Social Security Act, the Secretary of Health and

Human Services shall establish a transition for the aggregate

amount of expenditures that are transferred from part A, to

part B, of title XVIII of the Social Security Act, as a result

of the amendments made by this section, during each of the

years during the period beginning with 1998 and ending with

2002 according to this subsection. Under the transition for

each such year, the Secretary shall effect such transfer, between

the trust funds under such parts, as will result in only the

proportion (specified in paragraph (2)) of such aggregate

expenditures for the year being transferred from such part

A to such part B.

(2) PROPORTION SPECIFIED.—The proportion specified in

this paragraph for—

(A) 1998 is 1⁄6, (B) 1999 is 1⁄3, (C) 2000 is 1⁄2, (D) 2001 is 2⁄3, and

(E) 2002 is 5⁄6. (3) APPLICATION IN ESTABLISHING MONTHLY PREMIUMS FOR

1998 THROUGH 2003.— (A) IN GENERAL.—For purposes only of computing the

monthly premium under section 1839 of the Social Security

Act (42 U.S.C. 1395r), the monthly actuarial rate for enrollees age 65 and over shall be computed as though any

reference in paragraph (1) of this subsection to 2002 were

a reference to 2003 and as if the following proportions

were substituted for the proportions specified in paragraph

(2):

(i) For 1998, 1⁄7.

(ii) For 1999, 2⁄7.

(iii) For 2000, 3⁄7.

(iv) For 2001, 4⁄7.

(v) For 2002, 5⁄7.
H. R. 2015—224

(vi) For 2003, 6⁄7. (B) NO IMPACT ON GOVERNMENT CONTRIBUTION.— Subparagraph (A) does not apply in determining the

amount of the Government contribution under section 1844

of the Social Security Act (42 U.S.C. 1395w).

(f) EFFECTIVE DATE.—The amendments made by this section

apply to services furnished on or after January 1, 1998. For purpose

of applying such amendments, any home health spell of illness

that began, but not did not end, before such date shall be considered

to have begun as of such date.

SEC. 4612. CLARIFICATION OF PART-TIME OR INTERMITTENT NURSING

CARE.

(a) IN GENERAL.—Section 1861(m) (42 U.S.C. 1395x(m)) is

amended by adding at the end the following: ‘‘For purposes of

paragraphs (1) and (4), the term ‘part-time or intermittent services’

means skilled nursing and home health aide services furnished

any number of days per week as long as they are furnished (combined) less than 8 hours each day and 28 or fewer hours each

week (or, subject to review on a case-by-case basis as to the need

for care, less than 8 hours each day and 35 or fewer hours per

week). For purposes of sections 1814(a)(2)(C) and 1835(a)(2)(A),

‘intermittent’ means skilled nursing care that is either provided

or needed on fewer than 7 days each week, or less than 8 hours

of each day for periods of 21 days or less (with extensions in

exceptional circumstances when the need for additional care is

finite and predictable).’’.

(b) EFFECTIVE DATE.—The amendment made by subsection (a)

applies to services furnished on or after October 1, 1997.

SEC. 4613. STUDY ON DEFINITION OF HOMEBOUND.

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

conduct a study of the criteria that should be applied, and the

method of applying such criteria, in the determination of whether

an individual is homebound for purposes of qualifying for receipt

of benefits for home health services under the medicare program.

Such criteria shall include the extent and circumstances under

which a person may be absent from the home but nonetheless

qualify.

(b) REPORT.—Not later than October 1, 1998, the Secretary

shall submit a report to Congress on the study conducted under

subsection (a). The report shall include specific recommendations

on such criteria and methods.

SEC. 4614. NORMATIVE STANDARDS FOR HOME HEALTH CLAIMS

DENIALS.

(a) IN GENERAL.—Section 1862(a)(1) (42 U.S.C. 1395y(a)(1))

(as amended by section 4104(c)) is amended—

(1) by striking ‘‘and’’ at the end of subparagraph (G),

(2) by striking the semicolon at the end of subparagraph

(H) and inserting ‘‘, and’’, and

(3) by inserting after subparagraph (H) the following new

subparagraph:

‘‘(I) the frequency and duration of home health services

which are in excess of normative guidelines that the Secretary

shall establish by regulation;’’.

(b) NOTIFICATION.—The Secretary of Health and Human Services may establish a process for notifying a physician in cases
H. R. 2015—225

in which the number of home health visits, furnished under title

XVIII of the Social Security Act pursuant to a prescription or

certification of the physician, significantly exceeds such threshold

(or thresholds) as the Secretary specifies. The Secretary may adjust

such threshold to reflect demonstrated differences in the need for

home health services among different beneficiaries.

(c) EFFECTIVE DATE.—The amendments made by this section

apply to services furnished on or after October 1, 1997.

SEC. 4615. NO HOME HEALTH BENEFITS BASED SOLELY ON DRAWING

BLOOD.

(a) IN GENERAL.—Sections 1814(a)(2)(C) and 1835(a)(2)(A) (42

U.S.C. 1395f(a)(2)(C), 1395n(a)(2)(A)) are each amended by inserting

‘‘(other than solely venipuncture for the purpose of obtaining a

blood sample)’’ after ‘‘skilled nursing care’’.

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

(a) apply to home health services furnished after the 6-month

period beginning after the date of enactment of this Act.

SEC. 4616. REPORTS TO CONGRESS REGARDING HOME HEALTH COST

CONTAINMENT.

(a) ESTIMATE.—Not later than October 1, 1997, the Secretary

of Health and Human Services shall submit to the Committees

on Commerce and Ways and Means of the House of Representatives

and the Committee on Finance of the Senate a report that includes

an estimate of the outlays that will be made under parts A and

B of title XVIII of the Social Security Act for the provision of

home health services during each of fiscal years 1998 through

2002.

(b) ANNUAL REPORT.—Not later than the end of each of years

1999 through 2002, the Secretary shall submit to such Committees

a report that compares the actual outlays under such parts for

such services during the fiscal year ending in the year, to the

outlays estimated under subsection (a) for such fiscal year. If the

Secretary finds that such actual outlays were greater than such

estimated outlays for the fiscal year, the Secretary shall include

in the report recommendations regarding beneficiary copayments

for home health services provided under the medicare program

or such other methods as will reduce the growth in outlays for

home health services under the medicare program.

CHAPTER 2—GRADUATE MEDICAL EDUCATION

Subchapter A—Indirect Medical Education

SEC. 4621. INDIRECT GRADUATE MEDICAL EDUCATION PAYMENTS.

(a) MULTIYEAR TRANSITION REGARDING PERCENTAGES.— (1) IN GENERAL.—Section 1886(d)(5)(B)(ii) (42 U.S.C.

1395ww(d)(5)(B)(ii)) is amended to read as follows:

‘‘(ii) For purposes of clause (i)(II), the indirect teaching

adjustment factor is equal to c × (((1+r) to the nth power) ¥ 1), where ‘r’ is the ratio of the hospital’s full-time equivalent interns and residents to beds and ‘n’ equals .405.

For discharges occurring—

‘‘(I) on or after October 1, 1988, and before October

1, 1997, ‘c’ is equal to 1.89;

‘‘(II) during fiscal year 1998, ‘c’ is equal to 1.72;

‘‘(III) during fiscal year 1999, ‘c’ is equal to 1.6;
H. R. 2015—226

‘‘(IV) during fiscal year 2000, ‘c’ is equal to 1.47;

and

‘‘(V) on or after October 1, 2000, ‘c’ is equal to

1.35.’’.

(2) CONFORMING AMENDMENT RELATING TO DETERMINATION

OF STANDARDIZED AMOUNT.—Section 1886(d)(2)(C)(i) (42 U.S.C.

1395ww(d)(2)(C)(i)) is amended by adding at the end the following: ‘‘except that the Secretary shall not take into account

any reduction in the amount of additional payments under

paragraph (5)(B)(ii) resulting from the amendment made by

section 4621(a)(1) of the Balanced Budget Act of 1997,’’.

(b) LIMITATION ON NUMBER OF RESIDENTS FOR CERTAIN FISCAL

YEARS.—

(1) IN GENERAL.—Section 1886(d)(5)(B) (42 U.S.C.

1395ww(d)(5)(B)) is amended by adding after clause (iv) the

following:

‘‘(v) In determining the adjustment with respect to

a hospital for discharges occurring on or after October

1, 1997, the total number of full-time equivalent interns

and residents in the fields of allopathic and osteopathic

medicine in either a hospital or nonhospital setting may

not exceed the number of such full-time equivalent interns

and residents in the hospital with respect to the hospital’s

most recent cost reporting period ending on or before

December 31, 1996.

‘‘(vi) For purposes of clause (ii)—

‘‘(I) ‘r’ may not exceed the ratio of the number

of interns and residents, subject to the limit under

clause (v), with respect to the hospital for its most

recent cost reporting period to the hospital’s available

beds (as defined by the Secretary) during that cost

reporting period, and

‘‘(II) for the hospital’s cost reporting periods beginning on or after October 1, 1997, subject to the limits

described in clauses (iv) and (v), the total number

of full-time equivalent residents for payment purposes

shall equal the average of the actual full-time equivalent resident count for the cost reporting period and

the preceding two cost reporting periods.

In the case of the first cost reporting period beginning

on or after October 1, 1997, subclause (II) shall be applied

by using the average for such period and the preceding

cost reporting period.

‘‘(vii) If any cost reporting period beginning on or after

October 1, 1997, is not equal to twelve months, the Secretary

shall make appropriate modifications to ensure that the average

full-time equivalent residency count pursuant to subclause (II)

of clause (vi) is based on the equivalent of full twelve-month

cost reporting periods.

‘‘(viii) Rules similar to the rules of subsection (h)(4)(H)

shall apply for purposes of clauses (v) and (vi).’’.

(2) PAYMENT FOR INTERNS AND RESIDENTS PROVIDING OFFSITE SERVICES.—Section 1886(d)(5)(B)(iv) (42 U.S.C.

1395ww(d)(5)(B)(iv)) is amended to read as follows:

‘‘(iv) Effective for discharges occurring on or after October

1, 1997, all the time spent by an intern or resident in patient

care activities under an approved medical residency training
H. R. 2015—227

program at an entity in a nonhospital setting shall be counted

towards the determination of full-time equivalency if the hospital incurs all, or substantially all, of the costs for the training

program in that setting.’’.

SEC. 4622. PAYMENT TO HOSPITALS OF INDIRECT MEDICAL EDUCATION COSTS FOR MEDICARE+CHOICE ENROLLEES.

Section 1886(d) (42 U.S.C. 1395ww(d)) is amended by adding

at the end the following:

‘‘(11) ADDITIONAL PAYMENTS FOR MANAGED CARE ENROLLEES.—

‘‘(A) IN GENERAL.—For portions of cost reporting periods occurring on or after January 1, 1998, the Secretary

shall provide for an additional payment amount for each

applicable discharge of any subsection (d) hospital that

has an approved medical residency training program.

‘‘(B) APPLICABLE DISCHARGE.—For purposes of this

paragraph, the term ‘applicable discharge’ means the discharge of any individual who is enrolled under a risksharing contract with an eligible organization under section

1876 and who is entitled to benefits under part A or any

individual who is enrolled with a Medicare+Choice

organization under part C.

‘‘(C) DETERMINATION OF AMOUNT.—The amount of the

payment under this paragraph with respect to any

applicable discharge shall be equal to the applicable

percentage (as defined in subsection (h)(3)(D)(ii)) of the

estimated average per discharge amount that would otherwise have been paid under paragraph (5)(B) if the individuals had not been enrolled as described in subparagraph

(B).

‘‘(D) SPECIAL RULE FOR HOSPITALS UNDER REIMBURSEMENT SYSTEM.—The Secretary shall establish rules for the

application of this paragraph to a hospital reimbursed

under a reimbursement system authorized under section

1814(b)(3) in the same manner as it would apply to the

hospital if it were not reimbursed under such section.’’.

Subchapter B—Direct Graduate Medical Education

SEC. 4623. LIMITATION ON NUMBER OF RESIDENTS AND ROLLING

AVERAGE FTE COUNT.

Section 1886(h)(4) (42 U.S.C. 1395ww(h)(4)) is amended by

adding after subparagraph (E) the following:

‘‘(F) LIMITATION ON NUMBER OF RESIDENTS IN

ALLOPATHIC AND OSTEOPATHIC MEDICINE.—Such rules shall

provide that for purposes of a cost reporting period beginning on or after October 1, 1997, the total number of

full-time equivalent residents before application of

weighting factors (as determined under this paragraph)

with respect to a hospital’s approved medical residency

training program in the fields of allopathic medicine and

osteopathic medicine may not exceed the number of such

full-time equivalent residents for the hospital’s most recent

cost reporting period ending on or before December 31,

1996.
H. R. 2015—228

‘‘(G) COUNTING INTERNS AND RESIDENTS FOR FY 1998

AND SUBSEQUENT YEARS.—

‘‘(i) IN GENERAL.—For cost reporting periods beginning during fiscal years beginning on or after October

1, 1997, subject to the limit described in subparagraph

(F), the total number of full-time equivalent residents

for determining a hospital’s graduate medical education payment shall equal the average of the actual

full-time equivalent resident counts for the cost reporting period and the preceding two cost reporting periods.

‘‘(ii) ADJUSTMENT FOR SHORT PERIODS.—If any cost

reporting period beginning on or after October 1, 1997,

is not equal to twelve months, the Secretary shall

make appropriate modifications to ensure that the

average full-time equivalent resident counts pursuant

to clause (i) are based on the equivalent of full twelvemonth cost reporting periods.

‘‘(iii) TRANSITION RULE FOR 1998.—In the case of

a hospital’s first cost reporting period beginning on

or after October 1, 1997, clause (i) shall be applied

by using the average for such period and the preceding

cost reporting period.

‘‘(H) SPECIAL RULES FOR APPLICATION OF SUBPARAGRAPHS (F) AND (G).—

‘‘(i) NEW FACILITIES.—The Secretary shall, consistent with the principles of subparagraphs (F) and (G),

prescribe rules for the application of such subparagraphs in the case of medical residency training programs established on or after January 1, 1995. In

promulgating such rules for purposes of subparagraph

(F), the Secretary shall give special consideration to

facilities that meet the needs of underserved rural

areas.

‘‘(ii) AGGREGATION.—The Secretary may prescribe

rules which allow institutions which are members of

the same affiliated group (as defined by the Secretary)

to elect to apply the limitation of subparagraph (F)

on an aggregate basis.

‘‘(iii) DATA COLLECTION.—The Secretary may

require any entity that operates a medical residency

training program and to which subparagraphs (F) and

(G) apply to submit to the Secretary such additional

information as the Secretary considers necessary to

carry out such subparagraphs.’’.

SEC. 4624. PAYMENTS TO HOSPITALS FOR DIRECT COSTS OF GRADUATE MEDICAL EDUCATION OF MEDICARE+CHOICE

ENROLLEES.

Section 1886(h)(3) (42 U.S.C. 1395ww(h)(3)) is amended by

adding after subparagraph (C) the following:

‘‘(D) PAYMENT FOR MANAGED CARE ENROLLEES.—

‘‘(i) IN GENERAL.—For portions of cost reporting

periods occurring on or after January 1, 1998, the

Secretary shall provide for an additional payment

amount under this subsection for services furnished

to individuals who are enrolled under a risk-sharing

contract with an eligible organization under section
H. R. 2015—229

1876 and who are entitled to part A or with a

Medicare+Choice organization under part C. The

amount of such a payment shall equal the applicable

percentage of the product of—

‘‘(I) the aggregate approved amount (as defined

in subparagraph (B)) for that period; and

‘‘(II) the fraction of the total number of

inpatient-bed days (as established by the Secretary) during the period which are attributable

to such enrolled individuals.

‘‘(ii) APPLICABLE PERCENTAGE.—For purposes of

clause (i), the applicable percentage is—

‘‘(I) 20 percent in 1998,

‘‘(II) 40 percent in 1999,

‘‘(III) 60 percent in 2000, and

‘‘(IV) 80 percent in 2001, and

‘‘(V) 100 percent in 2002 and subsequent years.

‘‘(iii) SPECIAL RULE FOR HOSPITALS UNDER

REIMBURSEMENT SYSTEM.—The Secretary shall establish rules for the application of this subparagraph to

a hospital reimbursed under a reimbursement system

authorized under section 1814(b)(3) in the same manner as it would apply to the hospital if it were not

reimbursed under such section.’’.

SEC. 4625. PERMITTING PAYMENT TO NONHOSPITAL PROVIDERS.

(a) IN GENERAL.—Section 1886 (42 U.S.C. 1395ww), as amended

by section 4421(a), is amended by adding at the end the following:

‘‘(k) PAYMENT TO NONHOSPITAL PROVIDERS.—

‘‘(1) IN GENERAL.—For cost reporting periods beginning on

or after October 1, 1997, the Secretary may establish rules

for payment to qualified nonhospital providers for their direct

costs of medical education, if those costs are incurred in the

operation of an approved medical residency training program

described in subsection (h). Such rules shall specify the

amounts, form, and manner in which such payments will be

made and the portion of such payments that will be made

from each of the trust funds under this title.

‘‘(2) QUALIFIED NONHOSPITAL PROVIDERS.—For purposes of

this subsection, the term ‘qualified nonhospital providers’

means—

‘‘(A) a Federally qualified health center, as defined

in section 1861(aa)(4);

‘‘(B) a rural health clinic, as defined in section

1861(aa)(2);

‘‘(C) Medicare+Choice organizations; and

‘‘(D) such other providers (other than hospitals) as

the Secretary determines to be appropriate.’’.

(b) PROHIBITION ON DOUBLE PAYMENTS.—Section 1886(h)(3)(B)

(42 U.S.C. 1395ww(h)(3)(B)) is amended by adding at the end the

following:

‘‘The Secretary shall reduce the aggregate approved amount

to the extent payment is made under subsection (k) for residents

included in the hospital’s count of full-time equivalent residents.’’.
H. R. 2015—230

SEC. 4626. INCENTIVE PAYMENTS UNDER PLANS FOR VOLUNTARY

REDUCTION IN NUMBER OF RESIDENTS.

(a) IN GENERAL.—Section 1886(h) (42 U.S.C. 1395ww(h)) is

amended by adding at the end the following new paragraph:

‘‘(6) INCENTIVE PAYMENT UNDER PLANS FOR VOLUNTARY

REDUCTION IN NUMBER OF RESIDENTS.— ‘‘(A) IN GENERAL.—In the case of a voluntary residency

reduction plan for which an application is approved under

subparagraph (B), subject to subparagraph (F), each hospital which is part of the qualifying entity submitting the

plan shall be paid an applicable hold harmless percentage

(as specified in subparagraph (E)) of the sum of—

‘‘(i) the amount (if any) by which—

‘‘(I) the amount of payment which would have

been made under this subsection if there had been

a 5-percent reduction in the number of full-time

equivalent residents in the approved medical education training programs of the hospital as of June

30, 1997, exceeds

‘‘(II) the amount of payment which is made

under this subsection, taking into account the

reduction in such number effected under the reduction plan; and

‘‘(ii) the amount of the reduction in payment under

subsection (d)(5)(B) for the hospital that is attributable

to the reduction in number of residents effected under

the plan below 95 percent of the number of full-time

equivalent residents in such programs of the hospital

as of June 30, 1997.

The determination of the amounts under clauses (i) and

(ii) for any year shall be made on the basis of the provisions

of this title in effect on the application deadline date for

the first calendar year to which the reduction plan applies.

‘‘(B) APPROVAL OF PLAN APPLICATIONS.—The Secretary

may not approve the application of an qualifying entity

unless—

‘‘(i) the application is submitted in a form and

manner specified by the Secretary and by not later

than November 1, 1999,

‘‘(ii) the application provides for the operation of

a plan for the reduction in the number of full-time

equivalent residents in the approved medical residency

training programs of the entity consistent with the

requirements of subparagraph (D);

‘‘(iii) the entity elects in the application the period

of residency training years (not greater than 5) over

which the reduction will occur;

‘‘(iv) the entity will not reduce the proportion of

its residents in primary care (to the total number

of residents) below such proportion as in effect as of

the applicable time described in subparagraph (D)(v);

and

‘‘(v) the Secretary determines that the application

and the entity and such plan meet such other requirements as the Secretary specifies in regulations.

‘‘(C) QUALIFYING ENTITY.—For purposes of this paragraph, any of the following may be a qualifying entity:
H. R. 2015—231

‘‘(i) Individual hospitals operating one or more

approved medical residency training programs.

‘‘(ii) Two or more hospitals that operate such programs and apply for treatment under this paragraph

as a single qualifying entity.

‘‘(iii) A qualifying consortium (as described in section 4628 of the Balanced Budget Act of 1997).

‘‘(D) RESIDENCY REDUCTION REQUIREMENTS.—

‘‘(i) INDIVIDUAL HOSPITAL APPLICANTS.—In the case

of a qualifying entity described in subparagraph (C)(i),

the number of full-time equivalent residents in all

the approved medical residency training programs

operated by or through the entity shall be reduced

as follows:

‘‘(I) If the base number of residents exceeds

750 residents, by a number equal to at least 20

percent of such base number.

‘‘(II) Subject to subclause (IV), if the base number of residents exceeds 600 but is less than 750

residents, by 150 residents.

‘‘(III) Subject to subclause (IV), if the base

number of residents does not exceed 600 residents,

by a number equal to at least 25 percent of such

base number.

‘‘(IV) In the case of a qualifying entity which

is described in clause (v) and which elects treatment under this subclause, by a number equal

to at least 20 percent of the base number.

‘‘(ii) JOINT APPLICANTS.—In the case of a qualifying

entity described in subparagraph (C)(ii), the number

of full-time equivalent residents in the aggregate for

all the approved medical residency training programs

operated by or through the entity shall be reduced

as follows:

‘‘(I) Subject to subclause (II), by a number

equal to at least 25 percent of the base number.

‘‘(II) In the case of such a qualifying entity

which is described in clause (v) and which elects

treatment under this subclause, by a number equal

to at least 20 percent of the base number.

‘‘(iii) CONSORTIA.—In the case of a qualifying entity

described in subparagraph (C)(iii), the number of fulltime equivalent residents in the aggregate for all the

approved medical residency training programs operated by or through the entity shall be reduced by

a number equal to at least 20 percent of the base

number.

‘‘(iv) MANNER OF REDUCTION.—The reductions

specified under the preceding provisions of this

subparagraph for a qualifying entity shall be below

the base number of residents for that entity and shall

be fully effective not later than the 5th residency training year in which the application under subparagraph

(B) is effective.

‘‘(v) ENTITIES PROVIDING ASSURANCE OF INCREASE

IN PRIMARY CARE RESIDENTS.—An entity is described

in this clause if—
H. R. 2015—232

‘‘(I) the base number of residents for the entity

is less than 750 or the entity is described in

subparagraph (C)(ii); and

‘‘(II) the entity represents in its application

under subparagraph (B) that it will increase the

number of full-time equivalent residents in primary care by at least 20 percent (from such number included in the base number of residents) by

not later than the 5th residency training year in

which the application under subparagraph (B) is

effective.

If a qualifying entity fails to comply with the representation described in subclause (II) by the end of such

5th residency training year, the entity shall be subject

to repayment of all amounts paid under this paragraph,

in accordance with procedures established to carry out

subparagraph (F).

‘‘(vi) BASE NUMBER OF RESIDENTS DEFINED.—For

purposes of this paragraph, the term ‘base number

of residents’ means, with respect to a qualifying entity

(or its participating hospitals) operating approved

medical residency training programs, the number of

full-time equivalent residents in such programs (before

application of weighting factors) of the entity as of

the most recent residency training year ending before

June 30, 1997, or, if less, for any subsequent residency

training year that ends before the date the entity

makes application under this paragraph.

‘‘(E) APPLICABLE HOLD HARMLESS PERCENTAGE.—For

purposes of subparagraph (A), the ‘applicable hold harmless

percentage’ for the—

‘‘(i) first and second residency training years in

which the reduction plan is in effect, 100 percent,

‘‘(ii) third such year, 75 percent,

‘‘(iii) fourth such year, 50 percent, and

‘‘(iv) fifth such year, 25 percent.

‘‘(F) PENALTY FOR NONCOMPLIANCE.—

‘‘(i) IN GENERAL.—No payment may be made under

this paragraph to a hospital for a residency training

year if the hospital has failed to reduce the number

of full-time equivalent residents (in the manner

required under subparagraph (D)) to the number

agreed to by the Secretary and the qualifying entity

in approving the application under this paragraph with

respect to such year.

‘‘(ii) INCREASE IN NUMBER OF RESIDENTS IN SUBSEQUENT YEARS.—If payments are made under this paragraph to a hospital, and if the hospital increases the

number of full-time equivalent residents above the

number of such residents permitted under the reduction plan as of the completion of the plan, then, as

specified by the Secretary, the entity is liable for repayment to the Secretary of the total amounts paid under

this paragraph to the entity.
H. R. 2015—233

‘‘(G) TREATMENT OF ROTATING RESIDENTS.—In applying

this paragraph, the Secretary shall establish rules regarding the counting of residents who are assigned to institutions the medical residency training programs in which

are not covered under approved applications under this

paragraph.’’.

(b) RELATION TO DEMONSTRATION PROJECTS AND AUTHORITY.—

(1) Section 1886(h)(6) of the Social Security Act, added

by subsection (a), other than subparagraph (F)(ii) thereof, shall

not apply to any residency training program with respect to

which a demonstration project described in paragraph (3) has

been approved by the Health Care Financing Administration

as of May 27, 1997.

(2) Effective May 27, 1997, the Secretary of Health and

Human Services is not authorized to approve any demonstration

project described in paragraph (3) for any residency training

year beginning before July 1, 2006.

(3) A demonstration project described in this paragraph

is a project that primarily provides for additional payments

under title XVIII of the Social Security Act in connection with

a reduction in the number of residents in a medical residency

training program.

(c) INTERIM, FINAL REGULATIONS.—In order to carry out the

amendment made by subsection (a) in a timely manner, the Secretary of Health and Human Services may first promulgate regulations, that take effect on an interim basis, after notice and pending

opportunity for public comment, by not later than 6 months after

the date of the enactment of this Act.

SEC. 4627. MEDICARE SPECIAL REIMBURSEMENT RULE FOR PRIMARY

CARE COMBINED RESIDENCY PROGRAMS.

(a) IN GENERAL.—Section 1886(h)(5)(G) of the Social Security

Act (42 U.S.C. 1395ww(h)(5)(G)) is amended—

(1) in clause (i), by striking ‘‘and (iii)’’ and inserting ‘‘,

(iii), and (iv)’’; and

(2) by adding at the end the following:

‘‘(iv) SPECIAL RULE FOR CERTAIN PRIMARY CARE

COMBINED RESIDENCY PROGRAMS.—(I) In the case of

a resident enrolled in a combined medical residency

training program in which all of the individual programs (that are combined) are for training a primary

care resident (as defined in subparagraph (H)), the

period of board eligibility shall be the minimum number of years of formal training required to satisfy the

requirements for initial board eligibility in the longest

of the individual programs plus one additional year.

‘‘(II) A resident enrolled in a combined medical

residency training program that includes an obstetrics

and gynecology program shall qualify for the period

of board eligibility under subclause (I) if the other

programs such resident combines with such obstetrics

and gynecology program are for training a primary

care resident.’’.

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

(a) apply to combined medical residency training programs in effect

for residency years beginning on or after July 1, 1997.
H. R. 2015—234

SEC. 4628. DEMONSTRATION PROJECT ON USE OF CONSORTIA.

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

(in this section referred to as the ‘‘Secretary’’) shall establish a

demonstration project under which, instead of making payments

to teaching hospitals pursuant to section 1886(h) of the Social

Security Act, the Secretary shall make payments under this section

to each consortium that meets the requirements of subsection (b)

and that applies to be included under the project.

(b) QUALIFYING CONSORTIA.—For purposes of subsection (a),

a consortium meets the requirements of this subsection if the

consortium is in compliance with the following:

(1) The consortium consists of a teaching hospital with

one or more approved medical residency training programs

and one or more of the following entities:

(A) A school of allopathic medicine or osteopathic medicine.

(B) Another teaching hospital, which may be a children’s hospital.

(C) A Federally qualified health center.

(D) A medical group practice.

(E) A managed care entity.

(F) An entity furnishing outpatient services.

(G) Such other entity as the Secretary determines to

be appropriate.

(2) The members of the consortium have agreed to participate in the programs of graduate medical education that are

operated by the entities in the consortium.

(3) With respect to the receipt by the consortium of payments made pursuant to this section, the members of the

consortium have agreed on a method for allocating the payments among the members.

(4) The consortium meets such additional requirements

as the Secretary may establish.

(c) AMOUNT AND SOURCE OF PAYMENT.—The total of payments

to a qualifying consortium for a fiscal year pursuant to subsection

(a) shall not exceed the amount that would have been paid under

section 1886 (h) or (k) of the Social Security Act for the teaching

hospital (or hospitals) in the consortium. Such payments shall be

made in such proportion from each of the trust funds established

under title XVIII of such Act as the Secretary specifies.

SEC. 4629. RECOMMENDATIONS ON LONG-TERM POLICIES REGARDING

TEACHING HOSPITALS AND GRADUATE MEDICAL EDUCATION.

(a) IN GENERAL.—The Medicare Payment Advisory Commission

(established under section 1805 of the Social Security Act and

in this section referred to as the ‘‘Commission’’) shall examine

and develop recommendations on whether and to what extent medicare payment policies and other Federal policies regarding teaching

hospitals and graduate medical education should be changed. Such

recommendations shall include recommendations regarding each

of the following:

(1) Possible methodologies for making payments for graduate medical education and the selection of entities to receive

such payments. Matters considered under this paragraph shall

include—
H. R. 2015—235

(A) issues regarding children’s hospitals and approved

medical residency training programs in pediatrics, and

(B) whether and to what extent payments are being

made (or should be made) for training in the nursing and

other allied health professions.

(2) Federal policies regarding international medical graduates.

(3) The dependence of schools of medicine on service-generated income.

(4) Whether and to what extent the needs of the United

States regarding the supply of physicians, in the aggregate

and in different specialties, will change during the 10-year

period beginning on October 1, 1997, and whether and to what

extent any such changes will have significant financial effects

on teaching hospitals.

(5) Methods for promoting an appropriate number, mix,

and geographical distribution of health professionals.

(b) CONSULTATION.—In conducting the study under subsection

(a), the Commission shall consult with the Council on Graduate

Medical Education and individuals with expertise in the area of

graduate medical education, including—

(1) deans from allopathic and osteopathic schools of medicine;

(2) chief executive officers (or equivalent administrative

heads) from academic health centers, integrated health care

systems, approved medical residency training programs, and

teaching hospitals that sponsor approved medical residency

training programs;

(3) chairs of departments or divisions from allopathic and

osteopathic schools of medicine, schools of dentistry, and

approved medical residency training programs in oral surgery;

(4) individuals with leadership experience from representative fields of non-physician health professionals;

(5) individuals with substantial experience in the study

of issues regarding the composition of the health care workforce

of the United States; and

(6) individuals with expertise in health care payment policies.

(c) REPORT.—Not later than 2 years after the date of the enactment of this Act, the Commission shall submit to the Congress

a report providing its recommendations under this section and

the reasons and justifications for such recommendations.

SEC. 4630. STUDY OF HOSPITAL OVERHEAD AND SUPERVISORY PHYSICIAN COMPONENTS OF DIRECT MEDICAL EDUCATION

COSTS.

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

shall conduct a study with respect to—

(1) variations among hospitals in the hospital overhead

and supervisory physician components of their direct medical

education costs taken into account under section 1886(h) of

the Social Security Act, and

(2) the reasons for such variations.

(b) REPORT.—Not later than 1 year after the date of the enactment of this Act, the Secretary shall report the results of the

study conducted under subsection (a) to the appropriate committees

of Congress, including recommendations for legislation reducing
H. R. 2015—236

variations described in subsection (a) that the Secretary finds

inappropriate.

CHAPTER 3—PROVISIONS RELATING TO MEDICARE

SECONDARY PAYER

SEC. 4631. PERMANENT EXTENSION AND REVISION OF CERTAIN

SECONDARY PAYER PROVISIONS.

(a) APPLICATION TO DISABLED INDIVIDUALS IN LARGE GROUP

HEALTH PLANS.— (1) IN GENERAL.—Section 1862(b)(1)(B) (42 U.S.C.

1395y(b)(1)(B)) is amended—

(A) in clause (i), by striking ‘‘clause (iv)’’ and inserting

‘‘clause (iii)’’;

(B) by striking clause (iii); and

(C) by redesignating clause (iv) as clause (iii).

(2) CONFORMING AMENDMENTS.—Paragraphs (1) through (3)

of section 1837(i) (42 U.S.C. 1395p(i)) and the second sentence

of section 1839(b) (42 U.S.C. 1395r(b)) are each amended by

striking ‘‘1862(b)(1)(B)(iv)’’ each place it appears and inserting

‘‘1862(b)(1)(B)(iii)’’.

(b) INDIVIDUALS WITH END STAGE RENAL DISEASE.—Section

1862(b)(1)(C) (42 U.S.C. 1395y(b)(1)(C)) is amended—

(1) in the last sentence by striking ‘‘October 1, 1998’’ and

inserting ‘‘the date of enactment of the Balanced Budget Act

of 1997’’; and

(2) by adding at the end the following: ‘‘Effective for items

and services furnished on or after the date of enactment of

the Balanced Budget Act of 1997, (with respect to periods

beginning on or after the date that is 18 months prior to

such date), clauses (i) and (ii) shall be applied by substituting

‘30-month’ for ‘12-month’ each place it appears.’’.

(c) IRS-SSA-HCFA DATA MATCH.—

(1) SOCIAL SECURITY ACT.—Section 1862(b)(5)(C) (42 U.S.C.

1395y(b)(5)(C)) is amended by striking clause (iii).

(2) INTERNAL REVENUE CODE.—Section 6103(l)(12) of the

Internal Revenue Code of 1986 is amended by striking subparagraph (F).

SEC. 4632. CLARIFICATION OF TIME AND FILING LIMITATIONS.

(a) EXTENSION OF CLAIMS FILING PERIOD.—Section

1862(b)(2)(B) (42 U.S.C. 1395y(b)(2)(B)) is amended by adding at

the end the following new clause:

‘‘(v) CLAIMS-FILING PERIOD.—Notwithstanding any

other time limits that may exist for filing a claim

under an employer group health plan, the United

States may seek to recover conditional payments in

accordance with this subparagraph where the request

for payment is submitted to the entity required or

responsible under this subsection to pay with respect

to the item or service (or any portion thereof) under

a primary plan within the 3-year period beginning

on the date on which the item or service was furnished.’’.

(b) EFFECTIVE DATE.—The amendments made by this section

apply to items and services furnished on or after the date of the

enactment of this Act.
H. R. 2015—237

SEC. 4633. PERMITTING RECOVERY AGAINST THIRD PARTY ADMINISTRATORS.

(a) PERMITTING RECOVERY AGAINST THIRD PARTY ADMINISTRA- TORS OF PRIMARY PLANS.—Section 1862(b)(2)(B)(ii) (42 U.S.C.

1395y(b)(2)(B)(ii)) is amended—

(1) by striking ‘‘under this subsection to pay’’ and inserting

‘‘(directly, as a third-party administrator, or otherwise) to make

payment’’; and

(2) by adding at the end the following: ‘‘The United States

may not recover from a third-party administrator under this

clause in cases where the third-party administrator would not

be able to recover the amount at issue from the employer

or group health plan and is not employed by or under contract

with the employer or group health plan at the time the action

for recovery is initiated by the United States or for whom

it provides administrative services due to the insolvency or

bankruptcy of the employer or plan.’’.

(b) CLARIFICATION OF BENEFICIARY LIABILITY.—Section

1862(b)(1) (42 U.S.C. 1395y(b)(1)) is amended by adding at the

end the following new subparagraph:

‘‘(F) LIMITATION ON BENEFICIARY LIABILITY.—An

individual who is entitled to benefits under this title and

is furnished an item or service for which such benefits

are incorrectly paid is not liable for repayment of such

benefits under this paragraph unless payment of such benefits was made to the individual.’’.

(c) EFFECTIVE DATE.—The amendments made by this section

apply to items and services furnished on or after the date of the

enactment of this Act.

CHAPTER 4—OTHER PROVISIONS

SEC. 4641. PLACEMENT OF ADVANCE DIRECTIVE IN MEDICAL RECORD.

(a) IN GENERAL.—Section 1866(f)(1)(B) (42 U.S.C.

1395cc(f)(1)(B)) is amended by striking ‘‘in the individual’s medical

record’’ and inserting ‘‘in a prominent part of the individual’s current medical record’’.

(b) EFFECTIVE DATE.—The amendment made by subsection (a)

shall apply to provider agreements entered into, renewed, or

extended on or after such date (not later than 1 year after the

date of the enactment of this Act) as the Secretary of Health

and Human Services specifies.

SEC. 4642. INCREASED CERTIFICATION PERIOD FOR CERTAIN ORGAN

PROCUREMENT ORGANIZATIONS.

Section 1138(b)(1)(A)(ii) (42 U.S.C. 1320b–8(b)(1)(A)(ii)) is

amended by striking ‘‘two years’’ and inserting ‘‘2 years (4 years

if the Secretary determines appropriate for an organization on

the basis of its past practices)’’.

SEC. 4643. OFFICE OF THE CHIEF ACTUARY IN THE HEALTH CARE

FINANCING ADMINISTRATION.

Section 1117 (42 U.S.C. 1317) is amended—

(1) in the heading, by inserting ‘‘AND CHIEF ACTUARY’’ after

‘‘THE ADMINISTRATOR’’;

(2) by inserting ‘‘(a)’’ before ‘‘The Administrator’’; and

(3) by adding at the end the following:
H. R. 2015—238

‘‘(b)(1) There is established in the Health Care Financing

Administration the position of Chief Actuary. The Chief Actuary

shall be appointed by, and in direct line of authority to, the Administrator of such Administration. The Chief Actuary shall be appointed

from among individuals who have demonstrated, by their education

and experience, superior expertise in the actuarial sciences. The

Chief Actuary shall exercise such duties as are appropriate for

the office of the Chief Actuary and in accordance with professional

standards of actuarial independence. The Chief Actuary may be

removed only for cause.

‘‘(2) The Chief Actuary shall be compensated at the highest

rate of basic pay for the Senior Executive Service under section

5382(b) of title 5, United States Code.’’.

SEC. 4644. CONFORMING AMENDMENTS TO COMPLY WITH CONGRESSIONAL REVIEW OF AGENCY RULEMAKING.

(a) DRG PROSPECTIVE PAYMENT RATE METHODOLOGY.—

(1) IN GENERAL.—Section 1886(d)(6) (42 U.S.C.

1395ww(d)(6)) is amended by striking ‘‘September 1’’ and inserting ‘‘August 1’’.

(2) TRANSITION RULE FOR FISCAL YEAR 1998.—With respect

to the publication in the Federal Register of the DRG prospective payment rate methodology under such section for fiscal

year 1998, the term ‘‘60 days’’ in section 801(a)(3)(A) and section

802(a) of title 5, United States Code, is deemed to be a reference

to ‘‘30 days’’.

(b) HOSPITAL PAYMENT UPDATES.—

(1) IN GENERAL.—Section 1886(e) (42 U.S.C. 1395ww(e)

is amended—

(A) in paragraph (5)(A) by striking ‘‘May 1’’ and inserting ‘‘April 1’’; and

(B) in paragraph (5)(B) by striking ‘‘September 1’’ and

inserting ‘‘August 1’’.

(2) TRANSITION RULE FOR FISCAL YEAR 1998.—With respect

to the publication in the Federal Register of the appropriate

change factor for inpatient hospital services for discharges in

fiscal year 1998 under section 1886(e)(5)(B) (42 U.S.C.

1395ww(e)(5)(B)), the term ‘‘60 days’’ in section 801(a)(3)(A)

and section 802(a) of title 5, United States Code, is deemed

to be a reference to ‘‘30 days’’.

(c) APPLICATIONS FOR GEOGRAPHIC RECLASSIFICATION.—

(1) IN GENERAL.—Section 1886(d)(10)(C) (42 U.S.C.

1395ww(d)(10)(C)) is amended in clause (ii), by striking ‘‘the

first day of the preceding fiscal year.’’ and inserting ‘‘the first

day of the 13-month period ending on September 30 of the

preceding fiscal year.’’

(2) SPECIAL RULE FOR APPLICATIONS RECEIVED IN FISCAL

YEAR 1997.—In the case of an application for a change in

geographic classification under such section for fiscal year 1999,

the Secretary of Health and Human Services shall shorten

the deadlines under such section so as to permit completion

of a final decision by the Secretary by June 15, 1998.

(d) PHYSICIAN FEE SCHEDULE.—Section 1848(b)(1) (42 U.S.C.

1395w–4(b)(1)) is amended by striking ‘‘Before January 1 of each

year beginning with 1992’’ and inserting ‘‘Before November 1 of

the preceding year, for each year beginning with 1998’’.
H. R. 2015—239

Subtitle H—Medicaid

CHAPTER 1—MANAGED CARE

SEC. 4701. STATE OPTION OF USING MANAGED CARE; CHANGE IN

TERMINOLOGY.

(a) USE OF MANAGED CARE GENERALLY.—Title XIX is amended

by redesignating section 1932 as section 1933 and by inserting

after section 1931 the following new section:

‘‘PROVISIONS RELATING TO MANAGED CARE

‘‘SEC. 1932. (a) STATE OPTION TO USE MANAGED CARE.—

‘‘(1) USE OF MEDICAID MANAGED CARE ORGANIZATIONS AND

PRIMARY CARE CASE MANAGERS.—

‘‘(A) IN GENERAL.—Subject to the succeeding provisions

of this section, and notwithstanding paragraph (1), (10)(B),

or (23)(A) of section 1902(a), a State—

‘‘(i) may require an individual who is eligible for

medical assistance under the State plan under this

title to enroll with a managed care entity as a condition

of receiving such assistance (and, with respect to assistance furnished by or under arrangements with such

entity, to receive such assistance through the entity),

if—

‘‘(I) the entity and the contract with the State

meet the applicable requirements of this section

and section 1903(m) or section 1905(t), and

‘‘(II) the requirements described in the

succeeding paragraphs of this subsection are met;

and

‘‘(ii) may restrict the number of provider agreements with managed care entities under the State

plan if such restriction does not substantially impair

access to services.

‘‘(B) DEFINITION OF MANAGED CARE ENTITY.—In this

section, the term ‘managed care entity’ means—

‘‘(i) a medicaid managed care organization, as

defined in section 1903(m)(1)(A), that provides or

arranges for services for enrollees under a contract

pursuant to section 1903(m); and

‘‘(ii) a primary care case manager, as defined in

section 1905(t)(2).

‘‘(2) SPECIAL RULES.—

‘‘(A) EXEMPTION OF CERTAIN CHILDREN WITH SPECIAL

NEEDS.—A State may not require under paragraph (1) the

enrollment in a managed care entity of an individual under

19 years of age who—

‘‘(i) is eligible for supplemental security income

under title XVI;

‘‘(ii) is described in section 501(a)(1)(D);

‘‘(iii) is described in section 1902(e)(3);

‘‘(iv) is receiving foster care or adoption assistance

under part E of title IV; or

‘‘(v) is in foster care or otherwise in an out-ofhome placement.
H. R. 2015—240

‘‘(B) EXEMPTION OF MEDICARE BENEFICIARIES.—A State

may not require under paragraph (1) the enrollment in

a managed care entity of an individual who is a qualified

medicare beneficiary (as defined in section 1905(p)(1)) or

an individual otherwise eligible for benefits under title

XVIII.

‘‘(C) INDIAN ENROLLMENT.—A State may not require

under paragraph (1) the enrollment in a managed care

entity of an individual who is an Indian (as defined in

section 4(c) of the Indian Health Care Improvement Act

of 1976 (25 U.S.C. 1603(c)) unless the entity is one of

the following (and only if such entity is participating under

the plan):

‘‘(i) The Indian Health Service.

‘‘(ii) An Indian health program operated by an

Indian tribe or tribal organization pursuant to a contract, grant, cooperative agreement, or compact with

the Indian Health Service pursuant to the Indian SelfDetermination Act (25 U.S.C. 450 et seq.).

‘‘(iii) An urban Indian health program operated

by an urban Indian organization pursuant to a grant

or contract with the Indian Health Service pursuant

to title V of the Indian Health Care Improvement

Act (25 U.S.C. 1601 et seq.).

‘‘(3) CHOICE OF COVERAGE.—

‘‘(A) IN GENERAL.—A State must permit an individual

to choose a managed care entity from not less than two

such entities that meet the applicable requirements of this

section, and of section 1903(m) or section 1905(t).

‘‘(B) STATE OPTION.—At the option of the State, a State

shall be considered to meet the requirements of subparagraph (A) in the case of an individual residing in a rural

area, if the State requires the individual to enroll with

a managed care entity if such entity—

‘‘(i) permits the individual to receive such assistance through not less than two physicians or case

managers (to the extent that at least two physicians

or case managers are available to provide such assistance in the area), and

(ii) permits the individual to obtain such assistance

from any other provider in appropriate circumstances

(as established by the State under regulations of the

Secretary).

‘‘(C) TREATMENT OF CERTAIN COUNTY-OPERATED HEALTH

INSURING ORGANIZATIONS.—A State shall be considered to

meet the requirement of subparagraph (A) if—

‘‘(i) the managed care entity in which the individual is enrolled is a health-insuring organization

which—

‘‘(I) first became operational prior to January

1, 1986, or

‘‘(II) is described in section 9517(c)(3) of the

Omnibus Budget Reconciliation Act of 1985 (as

added by section 4734(2) of the Omnibus Budget

Reconciliation Act of 1990), and

‘‘(ii) the individual is given a choice between at

least two providers within such entity.
H. R. 2015—241

‘‘(4) PROCESS FOR ENROLLMENT AND TERMINATION AND

CHANGE OF ENROLLMENT.—As conditions under paragraph

(1)(A)—

‘‘(A) IN GENERAL.—The State, enrollment broker (if

any), and managed care entity shall permit an individual

eligible for medical assistance under the State plan under

this title who is enrolled with the entity under this title

to terminate (or change) such enrollment—

‘‘(i) for cause at any time (consistent with section

1903(m)(2)(A)(vi)), and

‘‘(ii) without cause—

‘‘(I) during the 90-day period beginning on the

date the individual receives notice of such enrollment, and

‘‘(II) at least every 12 months thereafter.

‘‘(B) NOTICE OF TERMINATION RIGHTS.—The State shall

provide for notice to each such individual of the opportunity

to terminate (or change) enrollment under such conditions.

Such notice shall be provided at least 60 days before each

annual enrollment opportunity described in subparagraph

(A)(ii)(II).

‘‘(C) ENROLLMENT PRIORITIES.—In carrying out paragraph (1)(A), the State shall establish a method for

establishing enrollment priorities in the case of a managed

care entity that does not have sufficient capacity to enroll

all such individuals seeking enrollment under which

individuals already enrolled with the entity are given priority in continuing enrollment with the entity.

‘‘(D) DEFAULT ENROLLMENT PROCESS.—In carrying out

paragraph (1)(A), the State shall establish a default enrollment process—

‘‘(i) under which any such individual who does

not enroll with a managed care entity during the

enrollment period specified by the State shall be

enrolled by the State with such an entity which has

not been found to be out of substantial compliance

with the applicable requirements of this section and

of section 1903(m) or section 1905(t); and

‘‘(ii) that takes into consideration—

‘‘(I) maintaining existing provider-individual

relationships or relationships with providers that

have traditionally served beneficiaries under this

title; and

‘‘(II) if maintaining such provider relationships

is not possible, the equitable distribution of such

individuals among qualified managed care entities

available to enroll such individuals, consistent with

the enrollment capacities of the entities.

‘‘(5) PROVISION OF INFORMATION.—

‘‘(A) INFORMATION IN EASILY UNDERSTOOD FORM.—Each

State, enrollment broker, or managed care entity shall

provide all enrollment notices and informational and

instructional materials relating to such an entity under

this title in a manner and form which may be easily understood by enrollees and potential enrollees of the entity

who are eligible for medical assistance under the State

plan under this title.
H. R. 2015—242

‘‘(B) INFORMATION TO ENROLLEES AND POTENTIAL

ENROLLEES.—Each managed care entity that is a medicaid

managed care organization shall, upon request, make available to enrollees and potential enrollees in the organization’s service area information concerning the following:

‘‘(i) PROVIDERS.—The identity, locations, qualifications, and availability of health care providers that

participate with the organization.

‘‘(ii) ENROLLEE RIGHTS AND RESPONSIBILITIES.—The

rights and responsibilities of enrollees.

‘‘(iii) GRIEVANCE AND APPEAL PROCEDURES.—The

procedures available to an enrollee and a health care

provider to challenge or appeal the failure of the

organization to cover a service.

‘‘(iv) INFORMATION ON COVERED ITEMS AND SERVICES.—All items and services that are available to

enrollees under the contract between the State and

the organization that are covered either directly or

through a method of referral and prior authorization.

Each managed care entity that is a primary care case

manager shall, upon request, make available to enrollees and potential enrollees in the organization’s service

area the information described in clause (iii).

‘‘(C) COMPARATIVE INFORMATION.—A State that

requires individuals to enroll with managed care entities

under paragraph (1)(A) shall annually (and upon request)

provide, directly or through the managed care entity, to

such individuals a list identifying the managed care entities

that are (or will be) available and information (presented

in a comparative, chart-like form) relating to the following

for each such entity offered:

‘‘(i) BENEFITS AND COST-SHARING.—The benefits

covered and cost-sharing imposed by the entity.

‘‘(ii) SERVICE AREA.—The service area of the entity.

‘‘(iii) QUALITY AND PERFORMANCE.—To the extent

available, quality and performance indicators for the

benefits under the entity.

‘‘(D) INFORMATION ON BENEFITS NOT COVERED UNDER

MANAGED CARE ARRANGEMENT.—A State, directly or

through managed care entities, shall, on or before an

individual enrolls with such an entity under this title,

inform the enrollee in a written and prominent manner

of any benefits to which the enrollee may be entitled to

under this title but which are not made available to the

enrollee through the entity. Such information shall include

information on where and how such enrollees may access

benefits not made available to the enrollee through the

entity.’’.

(b) CHANGE IN TERMINOLOGY.—

(1) IN GENERAL.—Section 1903(m)(1)(A) (42 U.S.C.

1396b(m)) is amended—

(A) by striking ‘‘The term’’ and all that follows through

‘‘and—’’ and inserting ‘‘The term ‘medicaid managed care

organization’ means a health maintenance organization,

an eligible organization with a contract under section 1876

or a Medicare+Choice organization with a contract under

part C of title XVIII, a provider sponsored organization,
H. R. 2015—243

or any other public or private organization, which meets

the requirement of section 1902(w) and—’’; and

(B) by adding after and below clause (ii) the following:

‘‘An organization that is a qualified health maintenance organization (as defined in section 1310(d) of the Public Health Service

Act) is deemed to meet the requirements of clauses (i) and (ii).’’.

(2) CONFORMING CHANGES IN TERMINOLOGY.—(A) Each of the

following provisions is amended by striking ‘‘health maintenance organization’’ and inserting ‘‘medicaid managed care

organization’’:

(i) Section 1902(a)(23) (42 U.S.C. 1396a(a)(23)).

(ii) Section 1902(a)(57) (42 U.S.C. 1396a(a)(57)).

(iii) Section 1902(p)(2) (42 U.S.C. 1396a(p)(2)).

(iv) Section 1902(w)(2)(E) (42 U.S.C. 1396a(w)(2)(E)).

(v) Section 1903(k) (42 U.S.C. 1396b(k)).

(vi) In section 1903(m)(1)(B).

(vii) In subparagraphs (A)(i) and (H)(i) of section

1903(m)(2) (42 U.S.C. 1396b(m)(2)).

(viii) Section 1903(m)(4)(A) (42 U.S.C. 1396b(m)(4)(A)),

the first place it appears.

(ix) Section 1925(b)(4)(D)(iv) (42 U.S.C. 1396r–

6(b)(4)(D)(iv)).

(x) Section 1927(j)(1) (42 U.S.C. 1396r–8(j)(1)) is

amended by striking ‘‘***Health Maintenance Organizations, including those organizations’’ and inserting ‘‘health

maintenance organizations, including medicaid managed

care organizations’’.

(B) Section 1903(m)(2)(H) (42 U.S.C. 1396b(m)(2)(H)) is

amended, in the matter following clause (iii), by striking ‘‘health

maintenance’’.

(C) Clause (viii) of section 1903(w)(7)(A) (42 U.S.C.

1396b(w)(7)(A)) is amended to read as follows:

‘‘(viii) Services of a medicaid managed care

organization with a contract under section 1903(m).’’.

(D) Section 1925(b)(4)(D)(iv) (42 U.S.C. 1396r–6(b)(4)(D)(iv))

is amended—

(i) in the heading, by striking ‘‘HMO’’ and inserting

‘‘MEDICAID MANAGED CARE ORGANIZATION’’; and

(ii) by inserting ‘‘and the applicable requirements of

section 1932’’ before the period at the end.

(c) COMPLIANCE OF CONTRACT WITH NEW REQUIREMENTS.—

Section 1903(m)(2)(A) (42 U.S.C. 1396b(m)(2)(A)) is amended—

(1) by striking ‘‘and’’ at the end of clause (x),

(2) by striking the period at the end of clause (xi) and

inserting ‘‘; and’’; and

(3) by adding at the end the following:

‘‘(xi) such contract, and the entity complies with the

applicable requirements of section 1932.’’.

(d) CONFORMING AMENDMENTS TO FREEDOM-OF-CHOICE AND

TERMINATION OF ENROLLMENT REQUIREMENTS.—

(1) Section 1902(a)(23) (42 U.S.C. 1396a(a)(23)), as amended by section 4724(d), is amended by striking ‘‘and in section

1915’’ and inserting ‘‘, in section 1915, and in section 1932(a)’’.

(2) Section 1903(m)(2) (42 U.S.C. 1396b(m)(2)) is amended—

(A) in paragraph (A)(vi)—
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(i) by striking ‘‘except as provided under subparagraph (F),’’,

(ii) by striking ‘‘without cause’’ and all that follows

through ‘‘for such termination’’ and inserting ‘‘in

accordance with section 1932(a)(4);’’,

(iii) by inserting ‘‘in accordance with such section’’

after ‘‘provides for notification’’; and

(B) by striking subparagraph (F).

SEC. 4702. PRIMARY CARE CASE MANAGEMENT SERVICES AS STATE

OPTION WITHOUT NEED FOR WAIVER.

(a) IN GENERAL.—Section 1905 (42 U.S.C. 1396d) is amended—

(1) in subsection (a)—

(A) by striking ‘‘and’’ at the end of paragraph (24);

(B) by redesignating paragraph (25) as paragraph (26)

and by striking the period at the end of such paragraph

and inserting a comma; and

(C) by inserting after paragraph (24) the following

new paragraph:

‘‘(25) primary care case management services (as defined

in subsection (t)); and’’; and

(2) by adding at the end the following new subsection:

‘‘(t)(1) The term ‘primary care case management services’ means

case-management related services (including locating, coordinating,

and monitoring of health care services) provided by a primary

care case manager under a primary care case management contract.

‘‘(2) The term ‘primary care case manager’ means any of the

following that provides services of the type described in paragraph

(1) under a contract referred to in such paragraph:

‘‘(A) A physician, a physician group practice, or an entity

employing or having other arrangements with physicians to

provide such services.

‘‘(B) At State option—

‘‘(i) a nurse practitioner (as described in section

1905(a)(21));

‘‘(ii) a certified nurse-midwife (as defined in section

1861(gg)); or

‘‘(iii) a physician assistant (as defined in section

1861(aa)(5)).

‘‘(3) The term ‘primary care case management contract’ means

a contract between a primary care case manager and a State

under which the manager undertakes to locate, coordinate, and

monitor covered primary care (and such other covered services

as may be specified under the contract) to all individuals enrolled

with the manager, and which—

‘‘(A) provides for reasonable and adequate hours of operation, including 24-hour availability of information, referral,

and treatment with respect to medical emergencies;

‘‘(B) restricts enrollment to individuals residing sufficiently

near a service delivery site of the manager to be able to reach

that site within a reasonable time using available and affordable modes of transportation;

‘‘(C) provides for arrangements with, or referrals to, sufficient numbers of physicians and other appropriate health care

professionals to ensure that services under the contract can

be furnished to enrollees promptly and without compromise

to quality of care;
H. R. 2015—245

‘‘(D) prohibits discrimination on the basis of health status

or requirements for health care services in enrollment,

disenrollment, or reenrollment of individuals eligible for medical assistance under this title;

‘‘(E) provides for a right for an enrollee to terminate enrollment in accordance with section 1932(a)(4); and

‘‘(F) complies with the other applicable provisions of section

1932.

‘‘(4) For purposes of this subsection, the term ‘primary care’

includes all health care services customarily provided in accordance

with State licensure and certification laws and regulations, and

all laboratory services customarily provided by or through, a general

practitioner, family medicine physician, internal medicine physician,

obstetrician/gynecologist, or pediatrician.’’.

(b) CONFORMING AMENDMENTS.—

(1) APPLICATION OF REENROLLMENT PROVISIONS TO PCCMS.—

Section 1903(m)(2)(H) (42 U.S.C. 1396b(m)(2)(H)) is amended—

(A) in clause (i), by inserting before the comma the

following: ‘‘or with a primary care case manager with a

contract described in section 1905(t)(3)’’; and

(B) by inserting before the period at the end the following: ‘‘or with the manager described in such clause if the

manager continues to have a contract described in section

1905(t)(3) with the State’’.

(2) CONFORMING CROSS-REFERENCE.—Section 1902(j) (42

U.S.C. 1396a(j)) is amended by striking ‘‘paragraphs (1) through

(25)’’ and inserting ‘‘a numbered paragraph of’’.

SEC. 4703. ELIMINATION OF 75:25 RESTRICTION ON RISK CONTRACTS.

(a) IN GENERAL.—Section 1903(m)(2)(A) (42 U.S.C.

1396b(m)(2)(A)) is amended by striking clause (ii).

(b) CONFORMING AMENDMENTS.—

(1) Section 1903(m)(2) (42 U.S.C. 1396b(m)(2)) is amended—

(A) by striking subparagraphs (C), (D), and (E); and

(B) in subparagraph (G), by striking ‘‘clauses (i) and

(ii)’’ and inserting ‘‘clause (i)’’.

(2) Section 1925(b)(4)(D)(iv) (42 U.S.C. 1396r–6(b)(4)(D)(iv))

is amended by striking ‘‘less than 50 percent’’ and all that

follows up to the period at the end.

SEC. 4704. INCREASED BENEFICIARY PROTECTIONS.

(a) IN GENERAL.—Section 1932, as added by section 4701(a),

is amended by adding at the end the following:

‘‘(b) BENEFICIARY PROTECTIONS.—

‘‘(1) SPECIFICATION OF BENEFITS.—Each contract with a

managed care entity under section 1903(m) or under section

1905(t)(3) shall specify the benefits the provision (or arrangement) for which the entity is responsible.

‘‘(2) ASSURING COVERAGE TO EMERGENCY SERVICES.—

‘‘(A) IN GENERAL.—Each contract with a medicaid managed care organization under section 1903(m) and each

contract with a primary care case manager under section

1905(t)(3) shall require the organization or manager—

‘‘(i) to provide coverage for emergency services (as

defined in subparagraph (B)) without regard to prior
H. R. 2015—246

authorization or the emergency care provider’s contractual relationship with the organization or manager,

and

‘‘(ii) to comply with guidelines established under

section 1852(d)(2) (respecting coordination of post-stabilization care) in the same manner as such guidelines

apply to Medicare+Choice plans offered under part C

of title XVIII.

The requirement under clause (ii) shall first apply 30 days

after the date of promulgation of the guidelines referred

to in such clause.

‘‘(B) EMERGENCY SERVICES DEFINED.—In subparagraph

(A)(i), the term ‘emergency services’ means, with respect

to an individual enrolled with an organization, covered

inpatient and outpatient services that—

‘‘(i) are furnished by a provider that is qualified

to furnish such services under this title, and

‘‘(ii) are needed to evaluate or stabilize an emergency medical condition (as defined in subparagraph

(C)).

‘‘(C) EMERGENCY MEDICAL CONDITION DEFINED.—In

subparagraph (B)(ii), the term ‘emergency medical condition’ means a medical condition manifesting itself by acute

symptoms of sufficient severity (including severe pain) such

that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the

absence of immediate medical attention to result in—

‘‘(i) placing the health of the individual (or, with

respect to a pregnant woman, the health of the woman

or her unborn child) in serious jeopardy,

‘‘(ii) serious impairment to bodily functions, or

‘‘(iii) serious dysfunction of any bodily organ or

part.

‘‘(3) PROTECTION OF ENROLLEE-PROVIDER COMMUNICA- TIONS.—‘‘(A) IN GENERAL.—Subject to subparagraphs (B) and

(C), under a contract under section 1903(m) a medicaid

managed care organization (in relation to an individual

enrolled under the contract) shall not prohibit or otherwise

restrict a covered health care professional (as defined in

subparagraph (D)) from advising such an individual who

is a patient of the professional about the health status

of the individual or medical care or treatment for the

individual’s condition or disease, regardless of whether

benefits for such care or treatment are provided under

the contract, if the professional is acting within the lawful

scope of practice.

‘‘(B) CONSTRUCTION.—Subparagraph (A) shall not be

construed as requiring a medicaid managed care organization to provide, reimburse for, or provide coverage of, a

counseling or referral service if the organization—

‘‘(i) objects to the provision of such service on moral

or religious grounds; and

‘‘(ii) in the manner and through the written

instrumentalities such organization deems appropriate,

makes available information on its policies regarding

such service to prospective enrollees before or during
H. R. 2015—247

enrollment and to enrollees within 90 days after the

date that the organization adopts a change in policy

regarding such a counseling or referral service.

Nothing in this subparagraph shall be construed to affect

disclosure requirements under State law or under the

Employee Retirement Income Security Act of 1974.

‘‘(C) HEALTH CARE PROFESSIONAL DEFINED.—For purposes of this paragraph, the term ‘health care professional’

means a physician (as defined in section 1861(r)) or other

health care professional if coverage for the professional’s

services is provided under the contract referred to in

subparagraph (A) for the services of the professional. Such

term includes a podiatrist, optometrist, chiropractor,

psychologist, dentist, physician assistant, physical or

occupational therapist and therapy assistant, speech-language pathologist, audiologist, registered or licensed practical nurse (including nurse practitioner, clinical nurse

specialist, certified registered nurse anesthetist, and certified nurse-midwife), licensed certified social worker, registered respiratory therapist, and certified respiratory therapy technician.

‘‘(4) GRIEVANCE PROCEDURES.—Each medicaid managed

care organization shall establish an internal grievance procedure under which an enrollee who is eligible for medical assistance under the State plan under this title, or a provider on

behalf of such an enrollee, may challenge the denial of coverage

of or payment for such assistance.

‘‘(5) DEMONSTRATION OF ADEQUATE CAPACITY AND SERVICES.—Each medicaid managed care organization shall provide

the State and the Secretary with adequate assurances (in a

time and manner determined by the Secretary) that the

organization, with respect to a service area, has the capacity

to serve the expected enrollment in such service area, including

assurances that the organization—

‘‘(A) offers an appropriate range of services and access

to preventive and primary care services for the population

expected to be enrolled in such service area, and

‘‘(B) maintains a sufficient number, mix, and

geographic distribution of providers of services.

‘‘(6) PROTECTING ENROLLEES AGAINST LIABILITY FOR PAYMENT.—Each medicaid managed care organization shall provide

that an individual eligible for medical assistance under the

State plan under this title who is enrolled with the organization

may not be held liable—

‘‘(A) for the debts of the organization, in the event

of the organization’s insolvency,

‘‘(B) for services provided to the individual—

‘‘(i) in the event of the organization failing to

receive payment from the State for such services; or

‘‘(ii) in the event of a health care provider with

a contractual, referral, or other arrangement with the

organization failing to receive payment from the State

or the organization for such services, or

‘‘(C) for payments to a provider that furnishes covered

services under a contractual, referral, or other arrangement

with the organization in excess of the amount that would
H. R. 2015—248

be owed by the individual if the organization had directly

provided the services.

‘‘(7) ANTIDISCRIMINATION.—A medicaid managed care

organization shall not discriminate with respect to participation, reimbursement, or indemnification as to any provider

who is acting within the scope of the provider’s license or

certification under applicable State law, solely on the basis

of such license or certification. This paragraph shall not be

construed to prohibit an organization from including providers

only to the extent necessary to meet the needs of the organization’s enrollees or from establishing any measure designed to

maintain quality and control costs consistent with the responsibilities of the organization.

‘‘(8) COMPLIANCE WITH CERTAIN MATERNITY AND MENTAL

HEALTH REQUIREMENTS.—Each medicaid managed care

organization shall comply with the requirements of subpart

2 of part A of title XXVII of the Public Health Service Act

insofar as such requirements apply and are effective with

respect to a health insurance issuer that offers group health

insurance coverage.’’.

(b) PROTECTION OF ENROLLEES AGAINST BALANCE BILLING

THROUGH SUBCONTRACTORS.—Section 1128B(d)(1) (42 U.S.C.

1320a–7b(d)(1)) is amended by inserting ‘‘(or, in the case of services

provided to an individual enrolled with a medicaid managed care

organization under title XIX under a contract under section 1903(m)

or under a contractual, referral, or other arrangement under such

contract, at a rate in excess of the rate permitted under such

contract)’’ before the comma at the end.

SEC. 4705. QUALITY ASSURANCE STANDARDS.

(a) IN GENERAL.—Section 1932 is further amended by adding

at the end the following:

‘‘(c) QUALITY ASSURANCE STANDARDS.—

‘‘(1) QUALITY ASSESSMENT AND IMPROVEMENT STRATEGY.—

‘‘(A) IN GENERAL.—If a State provides for contracts

with medicaid managed care organizations under section

1903(m), the State shall develop and implement a quality

assessment and improvement strategy consistent with this

paragraph. Such strategy shall include the following:

‘‘(i) ACCESS STANDARDS.—Standards for access to

care so that covered services are available within

reasonable timeframes and in a manner that ensures

continuity of care and adequate primary care and

specialized services capacity.

‘‘(ii) OTHER MEASURES.—Examination of other

aspects of care and service directly related to the

improvement of quality of care (including grievance

procedures and marketing and information standards).

‘‘(iii) MONITORING PROCEDURES.—Procedures for

monitoring and evaluating the quality and appropriateness of care and services to enrollees that reflect the

full spectrum of populations enrolled under the contract and that includes requirements for provision of

quality assurance data to the State using the data

and information set that the Secretary has specified

for use under part C of title XVIII or such alternative
H. R. 2015—249

data as the Secretary approves, in consultation with

the State.

‘‘(iv) PERIODIC REVIEW.—Regular, periodic

examinations of the scope and content of the strategy.

‘‘(B) STANDARDS.—The strategy developed under

subparagraph (A) shall be consistent with standards that

the Secretary first establishes within 1 year after the date

of the enactment of this section. Such standards shall not

preempt any State standards that are more stringent than

such standards. Guidelines relating to quality assurance

that are applied under section 1915(b)(1) shall apply under

this subsection until the effective date of standards for

quality assurance established under this subparagraph.

‘‘(C) MONITORING.—The Secretary shall monitor the

development and implementation of strategies under

subparagraph (A).

‘‘(D) CONSULTATION.—The Secretary shall conduct

activities under subparagraphs (B) and (C) in consultation

with the States.

‘‘(2) EXTERNAL INDEPENDENT REVIEW OF MANAGED CARE

ACTIVITIES.—

‘‘(A) REVIEW OF CONTRACTS.—

‘‘(i) IN GENERAL.—Each contract under section

1903(m) with a medicaid managed care organization

shall provide for an annual (as appropriate) external

independent review conducted by a qualified independent entity of the quality outcomes and timeliness of,

and access to, the items and services for which the

organization is responsible under the contract. The

requirement for such a review shall not apply until

after the date that the Secretary establishes the identification method described in clause (ii).

‘‘(ii) QUALIFICATIONS OF REVIEWER.—The Secretary, in consultation with the States, shall establish

a method for the identification of entities that are

qualified to conduct reviews under clause (i).

‘‘(iii) USE OF PROTOCOLS.—The Secretary, in

coordination with the National Governors’ Association,

shall contract with an independent quality review

organization (such as the National Committee for Quality Assurance) to develop the protocols to be used in

external independent reviews conducted under this

paragraph on and after January 1, 1999.

‘‘(iv) AVAILABILITY OF RESULTS.—The results of

each external independent review conducted under this

subparagraph shall be available to participating health

care providers, enrollees, and potential enrollees of

the organization, except that the results may not be

made available in a manner that discloses the identity

of any individual patient.

‘‘(B) NONDUPLICATION OF ACCREDITATION.—A State

may provide that, in the case of a medicaid managed care

organization that is accredited by a private independent

entity (such as those described in section 1852(e)(4)) or

that has an external review conducted under section

1852(e)(3), the external review activities conducted under

subparagraph (A) with respect to the organization shall
H. R. 2015—250

not be duplicative of review activities conducted as part

of the accreditation process or the external review conducted under such section.

‘‘(C) DEEMED COMPLIANCE FOR MEDICARE MANAGED

CARE ORGANIZATIONS.—At the option of a State, the requirements of subparagraph (A) shall not apply with respect

to a medicaid managed care organization if the organization

is an eligible organization with a contract in effect under

section 1876 or a Medicare+Choice organization with a

contract in effect under C of title XVIII and the organization has had a contract in effect under section 1903(m)

at least during the previous 2-year period.

(b) INCREASED FFP FOR EXTERNAL QUALITY REVIEW ORGANIZATIONS.—Section 1903(a)(3)(C) (42 U.S.C. 1396b(a)(3)(C)) is amended—

(1) by inserting ‘‘(i)’’ after ‘‘(C)’’, and

(2) by adding at the end the following new clause:

‘‘(ii) 75 percent of the sums expended with respect

to costs incurred during such quarter (as found necessary

by the Secretary for the proper and efficient administration

of the State plan) as are attributable to the performance

of independent external reviews conducted under section

1932(c)(2); and’’.

(c) STUDIES AND REPORTS.—

(1) GAO STUDY AND REPORT ON QUALITY ASSURANCE AND

ACCREDITATION STANDARDS.—

(A) STUDY.—The Comptroller General of the United

States shall conduct a study and analysis of the quality

assurance programs and accreditation standards applicable

to managed care entities operating in the private sector,

or to such entities that operate under contracts under

the medicare program under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.). Such study shall determine—

(i) if such programs and standards include consideration of the accessibility and quality of the health

care items and services delivered under such contracts

to low-income individuals; and

(ii) the appropriateness of applying such programs

and standards to medicaid managed care organizations

under section 1932(c) of such Act.

(B) REPORT.—The Comptroller General shall submit

a report to the Committee on Commerce of the House

of Representatives and the Committee on Finance of the

Senate on the study conducted under subparagraph (A).

(2) STUDY AND REPORT ON SERVICES PROVIDED TO INDIVIDUALS WITH SPECIAL HEALTH CARE NEEDS.—

(A) STUDY.—The Secretary of Health and Human Services, in consultation with States, managed care organizations, the National Academy of State Health Policy, representatives of beneficiaries with special health care needs,

experts in specialized health care, and others, shall conduct

a study concerning safeguards (if any) that may be needed

to ensure that the health care needs of individuals with

special health care needs and chronic conditions who are

enrolled with medicaid managed care organizations are

adequately met.
H. R. 2015—251

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

of the enactment of this Act, the Secretary shall submit

to Committees described in paragraph (1)(B) a report on

such study.

SEC. 4706. SOLVENCY STANDARDS.

Section 1903(m)(1) (42 U.S.C. 1396b(m)(1)) is amended—

(1) in subparagraph (A)(ii), by inserting ‘‘, meets the

requirements of subparagraph (C)(i) (if applicable),’’ after

‘‘provision is satisfactory to the State’’, and

(2) by adding at the end the following:

‘‘(C)(i) Subject to clause (ii), a provision meets the requirements

of this subparagraph for an organization if the organization meets

solvency standards established by the State for private health

maintenance organizations or is licensed or certified by the State

as a risk-bearing entity.

‘‘(ii) Clause (i) shall not apply to an organization if—

‘‘(I) the organization is not responsible for the provision

(directly or through arrangements with providers of services)

of inpatient hospital services and physicians’ services;

‘‘(II) the organization is a public entity;

‘‘(III) the solvency of the organization is guaranteed by

the State; or

‘‘(IV) the organization is (or is controlled by) one or more

Federally-qualified health centers and meets solvency standards established by the State for such an organization.

For purposes of subclause (IV), the term ‘control’ means the possession, whether direct or indirect, of the power to direct or cause

the direction of the management and policies of the organization

through membership, board representation, or an ownership

interest equal to or greater than 50.1 percent.’’.

SEC. 4707. PROTECTIONS AGAINST FRAUD AND ABUSE.

(a) IN GENERAL.—Section 1932 (42 U.S.C. 1396v) is further

amended by adding at the end the following:

‘‘(d) PROTECTIONS AGAINST FRAUD AND ABUSE.— ‘‘(1) PROHIBITING AFFILIATIONS WITH INDIVIDUALS DEBARRED

BY FEDERAL AGENCIES.— ‘‘(A) IN GENERAL.—A managed care entity may not

knowingly—

‘‘(i) have a person described in subparagraph (C)

as a director, officer, partner, or person with beneficial

ownership of more than 5 percent of the entity’s equity,

or

‘‘(ii) have an employment, consulting, or other

agreement with a person described in such subparagraph for the provision of items and services that are

significant and material to the entity’s obligations

under its contract with the State.

‘‘(B) EFFECT OF NONCOMPLIANCE.—If a State finds that

a managed care entity is not in compliance with clause

(i) or (ii) of subparagraph (A), the State—

‘‘(i) shall notify the Secretary of such noncompliance;

‘‘(ii) may continue an existing agreement with the

entity unless the Secretary (in consultation with the

Inspector General of the Department of Health and

Human Services) directs otherwise; and
H. R. 2015—252

‘‘(iii) may not renew or otherwise extend the duration of an existing agreement with the entity unless

the Secretary (in consultation with the Inspector General of the Department of Health and Human Services)

provides to the State and to Congress a written statement describing compelling reasons that exist for

renewing or extending the agreement.

‘‘(C) PERSONS DESCRIBED.—A person is described in

this subparagraph if such person—

‘‘(i) is debarred, suspended, or otherwise excluded

from participating in procurement activities under the

Federal Acquisition Regulation or from participating

in nonprocurement activities under regulations issued

pursuant to Executive Order No. 12549 or under guidelines implementing such order; or

‘‘(ii) is an affiliate (as defined in such Act) of a

person described in clause (i).

‘‘(2) RESTRICTIONS ON MARKETING.—

‘‘(A) DISTRIBUTION OF MATERIALS.—

‘‘(i) IN GENERAL.—A managed care entity, with

respect to activities under this title, may not distribute

directly or through any agent or independent contractor

marketing materials within any State—

‘‘(I) without the prior approval of the State,

and

‘‘(II) that contain false or materially misleading information.

The requirement of subclause (I) shall not apply with

respect to a State until such date as the Secretary

specifies in consultation with such State.

‘‘(ii) CONSULTATION IN REVIEW OF MARKET MATERIALS.—In the process of reviewing and approving such

materials, the State shall provide for consultation with

a medical care advisory committee.

‘‘(B) SERVICE MARKET.—A managed care entity shall

distribute marketing materials to the entire service area

of such entity covered under the contract under section

1903(m) or section 1903(t)(3).

‘‘(C) PROHIBITION OF TIE-INS.—A managed care entity,

or any agency of such entity, may not seek to influence

an individual’s enrollment with the entity in conjunction

with the sale of any other insurance.

‘‘(D) PROHIBITING MARKETING FRAUD.—Each managed

care entity shall comply with such procedures and conditions as the Secretary prescribes in order to ensure that,

before an individual is enrolled with the entity, the individual is provided accurate oral and written information sufficient to make an informed decision whether or not to

enroll.

‘‘(E) PROHIBITION OF ‘COLD-CALL’ MARKETING.—Each

managed care entity shall not, directly or indirectly, conduct door-to-door, telephonic, or other ‘cold-call’ marketing

of enrollment under this title.

‘‘(3) STATE CONFLICT-OF-INTEREST SAFEGUARDS IN MEDICAID

RISK CONTRACTING.—A medicaid managed care organization

may not enter into a contract with any State under section
H. R. 2015—253

1903(m) unless the State has in effect conflict-of-interest safeguards with respect to officers and employees of the State

with responsibilities relating to contracts with such organizations or to the default enrollment process described in subsection (a)(4)(C)(ii) that are at least as effective as the Federal

safeguards provided under section 27 of the Office of Federal

Procurement Policy Act (41 U.S.C. 423), against conflicts of

interest that apply with respect to Federal procurement officials

with comparable responsibilities with respect to such contracts.

‘‘(4) USE OF UNIQUE PHYSICIAN IDENTIFIER FOR PARTICIPATING PHYSICIANS.—Each medicaid managed care organization

shall require each physician providing services to enrollees

eligible for medical assistance under the State plan under this

title to have a unique identifier in accordance with the system

established under section 1173(b).

‘‘(e) SANCTIONS FOR NONCOMPLIANCE.—

‘‘(1) USE OF INTERMEDIATE SANCTIONS BY THE STATE TO

ENFORCE REQUIREMENTS.—

‘‘(A) IN GENERAL.—A State may not enter into or renew

a contract under section 1903(m) unless the State has

established intermediate sanctions, which may include any

of the types described in paragraph (2), other than the

termination of a contract with a medicaid managed care

organization, which the State may impose against a medicaid managed care organization with such a contract, if

the organization—

‘‘(i) fails substantially to provide medically necessary items and services that are required (under

law or under such organization’s contract with the

State) to be provided to an enrollee covered under

the contract;

‘‘(ii) imposes premiums or charges on enrollees

in excess of the premiums or charges permitted under

this title;

‘‘(iii) acts to discriminate among enrollees on the

basis of their health status or requirements for health

care services, including expulsion or refusal to reenroll

an individual, except as permitted by this title, or

engaging in any practice that would reasonably be

expected to have the effect of denying or discouraging

enrollment with the organization by eligible individuals

whose medical condition or history indicates a need

for substantial future medical services;

‘‘(iv) misrepresents or falsifies information that is

furnished—

‘‘(I) to the Secretary or the State under this

title; or

‘‘(II) to an enrollee, potential enrollee, or a

health care provider under such title; or

‘‘(v) fails to comply with the applicable requirements of section 1903(m)(2)(A)(x).

The State may also impose such intermediate sanction

against a managed care entity if the State determines

that the entity distributed directly or through any agent

or independent contractor marketing materials in violation

of subsection (d)(2)(A)(i)(II).
H. R. 2015—254

‘‘(B) RULE OF CONSTRUCTION.—Clause (i) of subparagraph (A) shall not apply to the provision of abortion services, except that a State may impose a sanction on any

medicaid managed care organization that has a contract

to provide abortion services if the organization does not

provide such services as provided for under the contract.

‘‘(2) INTERMEDIATE SANCTIONS.—The sanctions described in

this paragraph are as follows:

‘‘(A) Civil money penalties as follows:

‘‘(i) Except as provided in clause (ii), (iii), or (iv),

not more than $25,000 for each determination under

paragraph (1)(A).

‘‘(ii) With respect to a determination under clause

(iii) or (iv)(I) of paragraph (1)(A), not more than

$100,000 for each such determination.

‘‘(iii) With respect to a determination under paragraph (1)(A)(ii), double the excess amount charged in

violation of such subsection (and the excess amount

charged shall be deducted from the penalty and

returned to the individual concerned).

‘‘(iv) Subject to clause (ii), with respect to a determination under paragraph (1)(A)(iii), $15,000 for each

individual not enrolled as a result of a practice

described in such subsection.

‘‘(B) The appointment of temporary management—

‘‘(i) to oversee the operation of the medicaid managed care organization upon a finding by the State

that there is continued egregious behavior by the

organization or there is a substantial risk to the health

of enrollees; or

‘‘(ii) to assure the health of the organization’s

enrollees, if there is a need for temporary management

while—

‘‘(I) there is an orderly termination or reorganization of the organization; or

‘‘(II) improvements are made to remedy the

violations found under paragraph (1),

except that temporary management under this

subparagraph may not be terminated until the State

has determined that the medicaid managed care

organization has the capability to ensure that the violations shall not recur.

‘‘(C) Permitting individuals enrolled with the managed

care entity to terminate enrollment without cause, and

notifying such individuals of such right to terminate enrollment.

‘‘(D) Suspension or default of all enrollment of individuals under this title after the date the Secretary or the

State notifies the entity of a determination of a violation

of any requirement of section 1903(m) or this section.

‘‘(E) Suspension of payment to the entity under this

title for individuals enrolled after the date the Secretary

or State notifies the entity of such a determination and

until the Secretary or State is satisfied that the basis

for such determination has been corrected and is not likely

to recur.
H. R. 2015—255

‘‘(3) TREATMENT OF CHRONIC SUBSTANDARD ENTITIES.—In

the case of a medicaid managed care organization which has

repeatedly failed to meet the requirements of section 1903(m)

and this section, the State shall (regardless of what other

sanctions are provided) impose the sanctions described in subparagraphs (B) and (C) of paragraph (2).

‘‘(4) AUTHORITY TO TERMINATE CONTRACT.—

‘‘(A) IN GENERAL.—In the case of a managed care entity

which has failed to meet the requirements of this part

or a contract under section 1903(m) or 1905(t)(3), the State

shall have the authority to terminate such contract with

the entity and to enroll such entity’s enrollees with other

managed care entities (or to permit such enrollees to receive

medical assistance under the State plan under this title

other than through a managed care entity).

‘‘(B) AVAILABILITY OF HEARING PRIOR TO TERMINATION

OF CONTRACT.—A State may not terminate a contract with

a managed care entity under subparagraph (A) unless the

entity is provided with a hearing prior to the termination.

‘‘(C) NOTICE AND RIGHT TO DISENROLL IN CASES OF

TERMINATION HEARING.—A State may—

‘‘(i) notify individuals enrolled with a managed

care entity which is the subject of a hearing to terminate the entity’s contract with the State of the hearing,

and

‘‘(ii) in the case of such an entity, permit such

enrollees to disenroll immediately with the entity without cause.

‘‘(5) OTHER PROTECTIONS FOR MANAGED CARE ENTITIES

AGAINST SANCTIONS IMPOSED BY STATE.—Before imposing any

sanction against a managed care entity other than termination

of the entity’s contract, the State shall provide the entity with

notice and such other due process protections as the State

may provide, except that a State may not provide a managed

care entity with a pre-termination hearing before imposing

the sanction described in paragraph (2)(B).’’.

(b) LIMITATION ON AVAILABILITY OF FFP FOR USE OF ENROLLMENT BROKERS.—Section 1903(b) (42 U.S.C. 1396b(b)) is amended

by adding at the end the following:

‘‘(4) Amounts expended by a State for the use an enrollment

broker in marketing medicaid managed care organizations and other

managed care entities to eligible individuals under this title shall

be considered, for purposes of subsection (a)(7), to be necessary

for the proper and efficient administration of the State plan but

only if the following conditions are met with respect to the broker:

‘‘(A) The broker is independent of any such entity and

of any health care providers (whether or not any such provider

participates in the State plan under this title) that provide

coverage of services in the same State in which the broker

is conducting enrollment activities.

‘‘(B) No person who is an owner, employee, consultant,

or has a contract with the broker either has any direct or

indirect financial interest with such an entity or health care

provider or has been excluded from participation in the program

under this title or title XVIII or debarred by any Federal

agency, or subject to a civil money penalty under this Act.’’.
H. R. 2015—256

(c) APPLICATION OF DISCLOSURE REQUIREMENTS TO MANAGED

CARE ENTITIES.—Section 1124(a)(2)(A) (42 U.S.C. 1320a–3(a)(2)(A))

is amended by inserting ‘‘a managed care entity, as defined in

section 1932(a)(1)(B),’’ after ‘‘renal disease facility,’’.

SEC. 4708. IMPROVED ADMINISTRATION.

(a) CHANGE IN THRESHOLD AMOUNT FOR CONTRACTS REQUIRING

SECRETARY’S PRIOR APPROVAL.—Section 1903(m)(2)(A)(iii) (42

U.S.C. 1396b(m)(2)(A)(iii)) is amended by striking ‘‘$100,000’’ and

inserting ‘‘$1,000,000 for 1998 and, for a subsequent year, the

amount established under this clause for the previous year

increased by the percentage increase in the consumer price index

for all urban consumers over the previous year’’.

(b) PERMITTING SAME COPAYMENTS IN HEALTH MAINTENANCE

ORGANIZATIONS AS IN FEE-FOR-SERVICE.—Section 1916 (42 U.S.C.

1396o) is amended—

(1) in subsection (a)(2)(D), by striking ‘‘or services furnished’’ and all that follows through ‘‘enrolled,’’; and

(2) in subsection (b)(2)(D), by striking ‘‘or (at the option’’

and all that follows through ‘‘enrolled,’’.

(c) ASSURING TIMELINESS OF PROVIDER PAYMENTS.—Section

1932 is further amended by adding at the end the following:

‘‘(f) TIMELINESS OF PAYMENT.—A contract under section 1903(m)

with a medicaid managed care organization shall provide that the

organization shall make payment to health care providers for items

and services which are subject to the contract and that are furnished

to individuals eligible for medical assistance under the State plan

under this title who are enrolled with the organization on a timely

basis consistent with the claims payment procedures described in

section 1902(a)(37)(A), unless the health care provider and the

organization agree to an alternate payment schedule.’’.

(d) CLARIFICATION OF APPLICATION OF FFP DENIAL RULES TO

PAYMENTS MADE PURSUANT TO MANAGED CARE ENTITIES.—Section

1903(i) (42 U.S.C. 1396b(i)) is amended by adding at the end the

following new sentence: ‘‘Paragraphs (1), (2), (16), (17), and (18)

shall apply with respect to items or services furnished and amounts

expended by or through a managed care entity (as defined in

section 1932(a)(1)(B)) in the same manner as such paragraphs apply

to items or services furnished and amounts expended directly by

the State.’’.

SEC. 4709. 6-MONTH GUARANTEED ELIGIBILITY FOR ALL INDIVIDUALS

ENROLLED IN MANAGED CARE.

Section 1902(e)(2) (42 U.S.C. 1396a(e)(2)) is amended—

(1) by striking ‘‘who is enrolled’’ and all that follows through

‘‘section 1903(m)(2)(A)’’ and inserting ‘‘who is enrolled with

a medicaid managed care organization (as defined in section

1903(m)(1)(A)), with a primary care case manager (as defined

in section 1905(t)),’’; and

(2) by inserting before the period ‘‘or by or through the

case manager’’.

SEC. 4710. EFFECTIVE DATES.

(a) GENERAL EFFECTIVE DATE.—Except as otherwise provided

in this chapter and section 4759, the amendments made by this

chapter shall take effect on the date of the enactment of this

Act and shall apply to contracts entered into or renewed on or

after October 1, 1997.
H. R. 2015—257

(b) SPECIFIC EFFECTIVE DATES.—Subject to subsection (c) and

section 4759—

(1) PCCM OPTION.—The amendments made by section 4702

shall apply to primary care case management services furnished

on or after October 1, 1997.

(2) 75:25 RULE.—The amendments made by section 4703

apply to contracts under section 1903(m) of the Social Security

Act (42 U.S.C. 1396b(m)) on and after June 20, 1997.

(3) QUALITY STANDARDS.—Section 1932(c)(1) of the Social

Security Act, as added by section 4705(a), shall take effect

on January 1, 1999.

(4) SOLVENCY STANDARDS.—

(A) IN GENERAL.—The amendments made by section

4706 shall apply to contracts entered into or renewed on

or after October 1, 1998.

(B) TRANSITION RULE.—In the case of an organization

that as of the date of the enactment of this Act has entered

into a contract under section 1903(m) of the Social Security

Act with a State for the provision of medical assistance

under title XIX of such Act under which the organization

assumes full financial risk and is receiving capitation payments, the amendment made by section 4706 shall not

apply to such organization until 3 years after the date

of the enactment of this Act.

(5) SANCTIONS FOR NONCOMPLIANCE.—Section 1932(e) of

the Social Security Act, as added by section 4707(a), shall

apply to contracts entered into or renewed on or after April

1, 1998.

(6) LIMITATION ON FFP FOR ENROLLMENT BROKERS.—The

amendment made by section 4707(b) shall apply to amounts

expended on or after October 1, 1997.

(7) 6-MONTH GUARANTEED ELIGIBILITY.—The amendments

made by section 4709 shall take effect on October 1, 1997.

(c) NONAPPLICATION TO WAIVERS.—Nothing in this chapter (or

the amendments made by this chapter) shall be construed as affecting the terms and conditions of any waiver, or the authority of

the Secretary of Health and Human Services with respect to any

such waiver, under section 1115 or 1915 of the Social Security

Act (42 U.S.C. 1315, 1396n).

CHAPTER 2—FLEXIBILITY IN PAYMENT OF PROVIDERS

SEC. 4711. FLEXIBILITY IN PAYMENT METHODS FOR HOSPITAL, NURSING FACILITY, ICF/MR, AND HOME HEALTH SERVICES.

(a) REPEAL OF BOREN REQUIREMENTS.—Section 1902(a)(13) (42

U.S.C. 1396a(a)(13)) is amended—

(1) by striking all that precedes subparagraph (D) and

inserting the following:

‘‘(13) provide—

‘‘(A) for a public process for determination of rates

of payment under the plan for hospital services, nursing

facility services, and services of intermediate care facilities

for the mentally retarded under which—

‘‘(i) proposed rates, the methodologies underlying

the establishment of such rates, and justifications for

the proposed rates are published,
H. R. 2015—258

‘‘(ii) providers, beneficiaries and their representatives, and other concerned State residents are given

a reasonable opportunity for review and comment on

the proposed rates, methodologies, and justifications,

‘‘(iii) final rates, the methodologies underlying the

establishment of such rates, and justifications for such

final rates are published, and

‘‘(iv) in the case of hospitals, such rates take into

account (in a manner consistent with section 1923)

the situation of hospitals which serve a disproportionate number of low-income patients with special needs;’’;

(2) by redesignating subparagraphs (D) and (E) as subparagraphs (B) and (C), respectively;

(3) in subparagraph (B), as so redesignated, by adding

‘‘and’’ at the end;

(4) in subparagraph (C), as so redesignated, by striking

‘‘and’’ at the end; and

(5) by striking subparagraph (F).

(b) STUDY AND REPORT.—

(1) STUDY.—The Secretary of Health and Human Services

shall study the effect on access to, and the quality of, services

provided to beneficiaries of the rate-setting methods used by

States pursuant to section 1902(a)(13)(A) of the Social Security

Act (42 U.S.C. 1396a(a)(13)(A)), as amended by subsection (a).

(2) REPORT.—Not later than 4 years after the date of the

enactment of this Act, the Secretary of Health and Human

Services shall submit a report to the appropriate committees

of Congress on the conclusions of the study conducted under

paragraph (1), together with any recommendations for legislation as a result of such conclusions.

(c) CONFORMING AMENDMENTS.— (1) Section 1905(o)(3) (42 U.S.C. 1396d(o)(3)) is amended

by striking ‘‘amount described in section 1902(a)(13)(D)’’ and

inserting ‘‘amount determined in section 1902(a)(13)(B)’’.

(2) Section 1923 (42 U.S.C. 1396r–4) is amended, in subsections (a)(1) and (e)(1), by striking ‘‘1902(a)(13)(A)’’ each place

it appears and inserting ‘‘1902(a)(13)(A)(iv)’’.

(d) EFFECTIVE DATE.—This section shall take effect on the

date of the enactment of this Act and the amendments made by

subsections (a) and (c) shall apply to payment for items and services

furnished on or after October 1, 1997.

SEC. 4712. PAYMENT FOR CENTER AND CLINIC SERVICES.

(a) PHASE-OUT OF PAYMENT BASED ON REASONABLE COSTS.— Section 1902(a)(13)(C) (42 U.S.C. 1396a(a)(13)(C)), as redesignated

by section 4711(a)(2), is amended by inserting ‘‘(or 95 percent for

services furnished during fiscal year 2000, 90 percent for services

furnished during fiscal year 2001, 85 percent for services furnished

during fiscal year 2002, or 70 percent for services furnished during

fiscal year 2003)’’ after ‘‘100 percent’’.

(b) TRANSITIONAL SUPPLEMENTAL PAYMENT FOR SERVICES FURNISHED UNDER CERTAIN MANAGED CARE CONTRACTS.—

(1) IN GENERAL.—Section 1902(a)(13)(C) (42 U.S.C.

1396a(a)(13)(C)), as so redesignated, is further amended—

(A) by inserting ‘‘(i)’’ after ‘‘(C)’’, and

(B) by inserting before the semicolon at the end the

following: ‘‘and (ii) in carrying out clause (i) in the case
H. R. 2015—259

of services furnished by a Federally-qualified health center

or a rural health clinic pursuant to a contract between

the center and an organization under section 1903(m), for

payment to the center or clinic at least quarterly by the

State of a supplemental payment equal to the amount

(if any) by which the amount determined under clause

(i) exceeds the amount of the payments provided under

such contract’’.

(2) CONFORMING AMENDMENT TO MANAGED CARE CONTRACT

REQUIREMENT.—Clause (ix) of section 1903(m)(2)(A) (42 U.S.C.

1396b(m)(2)(A)) is amended to read as follows:

‘‘(ix) such contract provides, in the case of an entity that

has entered into a contract for the provision of services with

a Federally-qualified health center or a rural health clinic,

that the entity shall provide payment that is not less than

the level and amount of payment which the entity would make

for the services if the services were furnished by a provider

which is not a Federally-qualified health center or a rural

health clinic;’’.

(3) EFFECTIVE DATE.—The amendments made by this subsection shall apply to services furnished on or after October

1, 1997.

(c) END OF TRANSITIONAL PAYMENT RULES.—Effective for services furnished on or after October 1, 2003—

(1) subparagraph (C) of section 1902(a)(13) (42 U.S.C.

1396a(a)(13)), as so redesignated, is repealed, and

(2) clause (ix) of section 1903(m)(2)(A) (42 U.S.C.

1396b(m)(2)(A)) is repealed.

(d) FLEXIBILITY IN COVERAGE OF NON-FREESTANDING LOOK- ALIKES.—

(1) IN GENERAL.—Section 1905(l)(2)(B)(iii) (42 U.S.C.

1396d(l)(2)(B)(iii)) is amended by inserting ‘‘including requirements of the Secretary that an entity may not be owned,

controlled, or operated by another entity,’’ after ‘‘such a grant,’’.

(2) EFFECTIVE DATE.—The amendment made by paragraph

(1) shall apply to services furnished on or after the date of

the enactment of this Act.

SEC. 4713. ELIMINATION OF OBSTETRICAL AND PEDIATRIC PAYMENT

RATE REQUIREMENTS.

(a) IN GENERAL.—Section 1926 (42 U.S.C. 1396r–7) is repealed.

(b) EFFECTIVE DATE.—The repeal made by subsection (a) shall

apply to services furnished on or after October 1, 1997.

SEC. 4714. MEDICAID PAYMENT RATES FOR CERTAIN MEDICARE COSTSHARING.

(a) CLARIFICATION REGARDING STATE LIABILITY FOR MEDICARE

COST-SHARING.—

(1) IN GENERAL.—Section 1902(n) (42 U.S.C. 1396a(n)) is

amended—

(A) by inserting ‘‘(1)’’ after ‘‘(n)’’, and

(B) by adding at the end the following:

‘‘(2) In carrying out paragraph (1), a State is not required

to provide any payment for any expenses incurred relating to payment for deductibles, coinsurance, or copayments for medicare costsharing to the extent that payment under title XVIII for the service

would exceed the payment amount that otherwise would be made
H. R. 2015—260

under the State plan under this title for such service if provided

to an eligible recipient other than a medicare beneficiary.

‘‘(3) In the case in which a State’s payment for medicare costsharing for a qualified medicare beneficiary with respect to an

item or service is reduced or eliminated through the application

of paragraph (2)—

‘‘(A) for purposes of applying any limitation under title

XVIII on the amount that the beneficiary may be billed or

charged for the service, the amount of payment made under

title XVIII plus the amount of payment (if any) under the

State plan shall be considered to be payment in full for the

service;

‘‘(B) the beneficiary shall not have any legal liability to

make payment to a provider or to an organization described

in section 1903(m)(1)(A) for the service; and

‘‘(C) any lawful sanction that may be imposed upon a

provider or such an organization for excess charges under this

title or title XVIII shall apply to the imposition of any charge

imposed upon the individual in such case.

This paragraph shall not be construed as preventing payment of

any medicare cost-sharing by a medicare supplemental policy or

an employer retiree health plan on behalf of an individual.’’.

(2) CONFORMING CLARIFICATION.—Section 1905(p)(3) (42

U.S.C. 1396d(p)(3)) is amended by inserting ‘‘(subject to section

1902(n)(2))’’ after ‘‘means’’.

(b) LIMITATION ON MEDICARE PROVIDERS.—

(1) PROVIDER AGREEMENTS.—Section 1866(a)(1)(A) (42

U.S.C. 1395cc(a)(1)(A)) is amended—

(A) by inserting ‘‘(i)’’ after ‘‘(A)’’, and

(B) by inserting before the comma at the end the

following: ‘‘, and (ii) not to impose any charge that is

prohibited under section 1902(n)(3)’’.

(2) NONPARTICIPATING PROVIDERS.—Section 1848(g)(3)(A)

(42 U.S.C. 1395w–4(g)(3)(A)) is amended by inserting before

the period at the end the following: ‘‘and the provisions of

section 1902(n)(3)(A) apply to further limit permissible charges

under this section’’.

(c) EFFECTIVE DATE.—The amendments made by this section

shall apply to payment for (and with respect to provider agreements

with respect to) items and services furnished on or after the date

of the enactment of this Act. The amendments made by subsection

(a) shall also apply to payment by a State for items and services

furnished before such date if such payment is the subject of a

law suit that is based on the provisions of sections 1902(n) and

1905(p) of the Social Security Act and that is pending as of, or

is initiated after, the date of the enactment of this Act.

SEC. 4715. TREATMENT OF VETERANS’ PENSIONS UNDER MEDICAID.

(a) POST-ELIGIBILITY TREATMENT.—Section 1902(r)(1) (42 U.S.C.

1396a(r)(1)) is amended—

(1) by inserting ‘‘(A)’’ after ‘‘(r)(1)’’,

(2) by inserting ‘‘, the treatment described in subparagraph

(B) shall apply,’’ after ‘‘under such a waiver’’;

(3) by striking ‘‘and,’’ and inserting ‘‘, and’’; and

(4) by adding at the end the following:

‘‘(B)(i) In the case of a veteran who does not have a spouse

or a child, if the veteran—
H. R. 2015—261

‘‘(I) receives, after the veteran has been determined to

be eligible for medical assistance under the State plan under

this title, a veteran’s pension in excess of $90 per month,

and

‘‘(II) resides in a State veterans home with respect to

which the Secretary of Veterans Affairs makes per diem payments for nursing home care pursuant to section 1741(a) of

title 38, United States Code,

any such pension payment, including any payment made due to

the need for aid and attendance, or for unreimbursed medical

expenses, that is in excess of $90 per month shall be counted

as income only for the purpose of applying such excess payment

to the State veterans home’s cost of providing nursing home care

to the veteran.

‘‘(ii) The provisions of clause (i) shall apply with respect to

a surviving spouse of a veteran who does not have a child in

the same manner as they apply to a veteran described in such

clause.’’.

(b) EFFECTIVE DATE.—The amendments made by this section

shall apply on and after October 1, 1997.

CHAPTER 3—FEDERAL PAYMENTS TO STATES

SEC. 4721. REFORMING DISPROPORTIONATE SHARE PAYMENTS UNDER

STATE MEDICAID PROGRAMS.

(a) ADJUSTMENT OF STATE DSH ALLOTMENTS.— (1) IN GENERAL.—Section 1923(f) (42 U.S.C. 1396r–4(f))

is amended to read as follows:

‘‘(f) LIMITATION ON FEDERAL FINANCIAL PARTICIPATION.—

‘‘(1) IN GENERAL.—Payment under section 1903(a) shall

not be made to a State with respect to any payment adjustment

made under this section for hospitals in a State for quarters

in a fiscal year in excess of the disproportionate share hospital

(in this subsection referred to as ‘DSH’) allotment for the State

for the fiscal year, as specified in paragraphs (2) and (3).

‘‘(2) STATE DSH ALLOTMENTS FOR FISCAL YEARS 1998

THROUGH 2002.—The DSH allotment for a State for each fiscal

year during the period beginning with fiscal year 1998 and

ending with fiscal year 2002 is determined in accordance with

the following table:

State or District

DSH Allotment (in millions of dollars)

FY 98 FY 99 FY 00 FY 01 FY 02

Alabama 293 269 248 246 246

Alaska 10 10 10 9 9

Arizona 81 81 81 81 81

Arkansas 2 2 2 2 2

California 1,085 1,068 986 931 877

Colorado 93 85 79 74 74

Connecticut 200 194 164 160 160

Delaware 4 4 4 4 4

District of Columbia 23 23 23 23 23

Florida 207 203 197 188 160

Georgia 253 248 241 228 215

Hawaii 0 0 0 0 0

Idaho 1 1 1 1 1

Illinois 203 199 193 182 172
H. R. 2015—262

State or District

DSH Allotment (in millions of dollars)

FY 98 FY 99 FY 00 FY 01 FY 02

Indiana 201 197 191 181 171

Iowa 8 8 8 8 8

Kansas 51 49 42 36 33

Kentucky 137 134 130 123 116

Louisiana 880 795 713 658 631

Maine 103 99 84 84 84

Maryland 72 70 68 64 61

Massachusetts 288 282 273 259 244

Michigan 249 244 237 224 212

Minnesota 16 16 16 16 16

Mississippi 143 141 136 129 122

Missouri 436 423 379 379 379

Montana 0.2 0.2 0.2 0.2 0.2

Nebraska 5 5 5 5 5

Nevada 37 37 37 37 37

New Hampshire 140 136 130 130 130

New Jersey 600 582 515 515 515

New Mexico 5 5 5 5 5

New York 1,512 1,482 1,436 1,361 1,285

North Carolina 278 272 264 250 236

North Dakota 1 1 1 1 1

Ohio 382 374 363 344 325

Oklahoma 16 16 16 16 16

Oregon 20 20 20 20 20

Pennsylvania 529 518 502 476 449

Rhode Island 62 60 58 55 52

South Carolina 313 303 262 262 262

South Dakota 1 1 1 1 1

Tennessee 0 0 0 0 0

Texas 979 950 806 765 765

Utah 3 3 3 3 3

Vermont 18 18 18 18 18

Virginia 70 68 66 63 59

Washington 174 171 166 157 148

West Virginia 64 63 61 58 54

Wisconsin 7 7 7 7 7

Wyoming 0 0 0 0 0.

‘‘(3) STATE DSH ALLOTMENTS FOR FISCAL YEAR 2003 AND

THEREAFTER.— ‘‘(A) IN GENERAL.—The DSH allotment for any State

for fiscal year 2003 and each succeeding fiscal year is

equal to the DSH allotment for the State for the preceding

fiscal year under paragraph (2) or this paragraph,

increased, subject to subparagraph (B), by the percentage

change in the consumer price index for all urban consumers

(all items; U.S. city average), for the previous fiscal year.

‘‘(B) LIMITATION.—The DSH allotment for a State shall

not be increased under subparagraph (A) for a fiscal year

to the extent that such an increase would result in the

DSH allotment for the year exceeding the greater of—

‘‘(i) the DSH allotment for the previous year, or

‘‘(ii) 12 percent of the total amount of expenditures

under the State plan for medical assistance during

the fiscal year.

‘‘(4) DEFINITION OF STATE.— In this subsection, the term

‘State’ means the 50 States and the District of Columbia.’’.

(2) EFFECTIVE DATE.—The amendment made by paragraph

(1) shall apply to payment adjustments attributable to DSH

allotments for fiscal years beginning with fiscal year 1998.
H. R. 2015—263

(b) LIMITATION ON PAYMENTS TO INSTITUTIONS FOR MENTAL

DISEASES.—Section 1923 of the Social Security Act (42 U.S.C.

1396r–4) is amended by adding at the end the following:

‘‘(h) LIMITATION ON CERTAIN STATE DSH EXPENDITURES.—

‘‘(1) IN GENERAL.—Payment under section 1903(a) shall

not be made to a State with respect to any payment adjustments

made under this section for quarters in a fiscal year (beginning

with fiscal year 1998) to institutions for mental diseases or

other mental health facilities, to the extent the aggregate of

such adjustments in the fiscal year exceeds the lesser of the

following:

‘‘(A) 1995 IMD DSH PAYMENT ADJUSTMENTS.—The total

State DSH expenditures that are attributable to fiscal year

1995 for payments to institutions for mental diseases and

other mental health facilities (based on reporting data

specified by the State on HCFA Form 64 as mental health

DSH, and as approved by the Secretary).

‘‘(B) APPLICABLE PERCENTAGE OF 1995 TOTAL DSH PAYMENT ALLOTMENT.—The amount of such payment adjustments which are equal to the applicable percentage of

the Federal share of payment adjustments made to hospitals in the State under subsection (c) that are attributable

to the 1995 DSH allotment for the State for payments

to institutions for mental diseases and other mental health

facilities (based on reporting data specified by the State

on HCFA Form 64 as mental health DSH, and as approved

by the Secretary).

‘‘(2) APPLICABLE PERCENTAGE.— ‘‘(A) IN GENERAL.—For purposes of paragraph (1), the

applicable percentage with respect to—

‘‘(i) each of fiscal years 1998, 1999, and 2000, is

the percentage determined under subparagraph (B);

or

‘‘(ii) a succeeding fiscal year is the lesser of the

percentage determined under subparagraph (B) or the

following percentage:

‘‘(I) For fiscal year 2001, 50 percent.

‘‘(II) For fiscal year 2002, 40 percent.

‘‘(III) For each succeeding fiscal year, 33 percent.

‘‘(B) 1995 PERCENTAGE.—The percentage determined

under this subparagraph is the ratio (determined as a

percentage) of—

‘‘(i) the Federal share of payment adjustments

made to hospitals in the State under subsection (c)

that are attributable to the 1995 DSH allotment for

the State (as reported by the State not later than

January 1, 1997, on HCFA Form 64, and as approved

by the Secretary) for payments to institutions for mental diseases and other mental health facilities, to

‘‘(ii) the State 1995 DSH spending amount.

‘‘(C) STATE 1995 DSH SPENDING AMOUNT.—For purposes

of subparagraph (B)(ii), the ‘State 1995 DSH spending

amount’, with respect to a State, is the Federal medical

assistance percentage (for fiscal year 1995) of the payment

adjustments made under subsection (c) under the State

plan that are attributable to the fiscal year 1995 DSH
H. R. 2015—264

allotment for the State (as reported by the State not later

than January 1, 1997, on HCFA Form 64, and as approved

by the Secretary).’’.

(c) DESCRIPTION OF TARGETING PAYMENTS.—Section 1923(a)(2)

(42 U.S.C. 1396r–4(a)(2)) is amended by adding at the end the

following:

‘‘(D) A State plan under this title shall not be considered

to meet the requirements of section 1902(a)(13)(A)(iv) (insofar

as it requires payments to hospitals to take into account the

situation of hospitals that serve a disproportionate number

of low-income patients with special needs), as of October 1,

1998, unless the State has submitted to the Secretary by such

date a description of the methodology used by the State to

identify and to make payments to disproportionate share hospitals, including children’s hospitals, on the basis of the proportion of low-income and medicaid patients served by such hospitals. The State shall provide an annual report to the Secretary

describing the disproportionate share payments to each such

disproportionate share hospital.’’.

(d) DIRECT PAYMENT BY STATE FOR MANAGED CARE ENROLLEES.—Section 1923 (42 U.S.C. 1396r–4) is amended by adding at

the end the following:

‘‘(i) REQUIREMENT FOR DIRECT PAYMENT.—

‘‘(1) IN GENERAL.—No payment may be made under section

1903(a)(1) with respect to a payment adjustment made under

this section, for services furnished by a hospital on or after

October 1, 1997, with respect to individuals eligible for medical

assistance under the State plan who are enrolled with a managed care entity (as defined in section 1932(a)(1)(B)) or under

any other managed care arrangement unless a payment, equal

to the amount of the payment adjustment—

‘‘(A) is made directly to the hospital by the State;

and

‘‘(B) is not used to determine the amount of a prepaid

capitation payment under the State plan to the entity

or arrangement with respect to such individuals.

‘‘(2) EXCEPTION FOR CURRENT ARRANGEMENTS.—Paragraph

(1) shall not apply to a payment adjustment provided pursuant

to a payment arrangement in effect on July 1, 1997.’’.

(e) TRANSITION RULE.—Effective July 1, 1997, section

1923(g)(2)(A) of the Social Security Act (42 U.S.C. 1396r–4(g)(2)(A))

shall be applied to the State of California as though—

(1) ‘‘(or that begins on or after July 1, 1997, and before

July 1, 1999)’’ were inserted in such section after ‘‘January

1, 1995,’’; and

(2) ‘‘(or 175 percent in the case of a State fiscal year

that begins on or after July 1, 1997, and before July 1, 1999)’’

were inserted in such section after ‘‘200 percent’’.

SEC. 4722. TREATMENT OF STATE TAXES IMPOSED ON CERTAIN HOSPITALS.

(a) EXCEPTION FROM TAX DOES NOT DISQUALIFY AS BROADBASED TAX.—Section 1903(w)(3) (42 U.S.C. 1396b(w)(3)) is amended—

(1) in subparagraph (B), by striking ‘‘and (E)’’ and inserting

‘‘(E), and (F)’’; and

(2) by adding at the end the following:
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‘‘(F) In no case shall a tax not qualify as a broad-based health

care related tax under this paragraph because it does not apply

to a hospital that is described in section 501(c)(3) of the Internal

Revenue Code of 1986 and exempt from taxation under section

501(a) of such Code and that does not accept payment under the

State plan under this title or under title XVIII.’’.

(b) REDUCTION IN FEDERAL FINANCIAL PARTICIPATION IN CASE

OF IMPOSITION OF TAX.—Section 1903(b) (42 U.S.C. 1396b(b)), as

amended by section 4707(b), is amended by adding at the end

the following:

‘‘(5) Notwithstanding the preceding provisions of this section,

the amount determined under subsection (a)(1) for any State shall

be decreased in a quarter by the amount of any health care related

taxes (described in section 1902(w)(3)(A)) that are imposed on a

hospital described in subsection (w)(3)(F) in that quarter.’’.

(c) WAIVER OF CERTAIN PROVIDER TAX PROVISIONS.—Notwithstanding any other provision of law, taxes, fees, or assessments,

as defined in section 1903(w)(3)(A) of the Social Security Act (42

U.S.C. 1396b(w)(3)(A)), that were collected by the State of New

York from a health care provider before June 1, 1997, and for

which a waiver of the provisions of subparagraph (B) or (C) of

section 1903(w)(3) of such Act has been applied for, or that would,

but for this subsection require that such a waiver be applied for,

in accordance with subparagraph (E) of such section, and, (if so

applied for) upon which action by the Secretary of Health and

Human Services (including any judicial review of any such proceeding) has not been completed as of July 23, 1997, are deemed

to be permissible health care related taxes and in compliance with

the requirements of subparagraphs (B) and (C) of section 1903(w)(3)

of such Act.

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

(a) shall apply to taxes imposed before, on, or after the date of

the enactment of this Act and the amendment made by subsection

(b) shall apply to taxes imposed on or after such date.

SEC. 4723. ADDITIONAL FUNDING FOR STATE EMERGENCY HEALTH

SERVICES FURNISHED TO UNDOCUMENTED ALIENS.

(a) TOTAL AMOUNT AVAILABLE FOR ALLOTMENT.—There are

available for allotments under this section for each of the 4 consecutive fiscal years (beginning with fiscal year 1998) $25,000,000 for

payments to certain States under this section.

(b) STATE ALLOTMENT AMOUNT.— (1) IN GENERAL.—The Secretary of Health and Human

Services shall compute an allotment for each fiscal year beginning with fiscal year 1998 and ending with fiscal year 2001

for each of the 12 States with the highest number of undocumented aliens. The amount of such allotment for each such

State for a fiscal year shall bear the same ratio to the total

amount available for allotments under subsection (a) for the

fiscal year as the ratio of the number of undocumented aliens

in the State in the fiscal year bears to the total of such numbers

for all such States for such fiscal year. The amount of allotment

to a State provided under this paragraph for a fiscal year

that is not paid out under subsection (c) shall be available

for payment during the subsequent fiscal year.

(2) DETERMINATION.—For purposes of paragraph (1), the

number of undocumented aliens in a State under this section
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shall be determined based on estimates of the resident illegal

alien population residing in each State prepared by the Statistics Division of the Immigration and Naturalization Service

as of October 1992 (or as of such later date if such date

is at least 1 year before the beginning of the fiscal year

involved).

(c) USE OF FUNDS.—From the allotments made under subsection

(b), the Secretary shall pay to each State amounts the State demonstrates were paid by the State (or by a political subdivision

of the State) for emergency health services furnished to undocumented aliens.

(d) STATE DEFINED.—For purposes of this section, the term

‘‘State’’ includes the District of Columbia.

(e) STATE ENTITLEMENT.—This section constitutes budget

authority in advance of appropriations Acts and represents the

obligation of the Federal Government to provide for the payment

to States of amounts provided under this section.

SEC. 4724. ELIMINATION OF WASTE, FRAUD, AND ABUSE.

(a) BAN ON SPENDING FOR NONHEALTH RELATED ITEMS.—Section 1903(i) (42 U.S.C. 1396b(i)) is amended—

(1) in paragraphs (2) and (16), by striking the period at

the end and inserting ‘‘; or’’;

(2) in paragraphs (10)(B), (11), and (13), by adding ‘‘or’’

at the end; and

(3) by inserting after paragraph (16), the following:

‘‘(17) with respect to any amount expended for roads,

bridges, stadiums, or any other item or service not covered

under a State plan under this title.’’.

(b) SURETY BOND REQUIREMENT FOR HOME HEALTH AGENCIES.—

(1) IN GENERAL.—Section 1903(i) (42 U.S.C. 1396b(i)), as

amended by subsection (a), is amended—

(A) in paragraph (17), by striking the period at the

end and inserting ‘‘; or’’; and

(B) by inserting after paragraph (17), the following:

‘‘(18) with respect to any amount expended for home health

care services provided by an agency or organization unless

the agency or organization provides the State agency on a

continuing basis a surety bond in a form specified by the

Secretary under paragraph (7) of section 1861(o) and in an

amount that is not less than $50,000 or such comparable surety

bond as the Secretary may permit under the last sentence

of such section.’’.

(2) EFFECTIVE DATE.—The amendments made by paragraph

(1) shall apply to home health care services furnished on or

after January 1, 1998.

(c) CONFLICT OF INTEREST SAFEGUARDS.—

(1) IN GENERAL.—Section 1902(a)(4)(C) (42 U.S.C.

1396a(a)(4)(C)) is amended—

(A) by striking ‘‘and (C)’’ and inserting ‘‘(C)’’;

(B) by striking ‘‘local officer or employee’’ and inserting

‘‘local officer, employee, or independent contractor’’;

(C) by striking ‘‘such an officer or employee’’ the first

2 places it appears and inserting ‘‘such an officer, employee,

or contractor’’; and
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(D) by inserting before the semicolon the following:

‘‘, and (D) that each State or local officer, employee, or

independent contractor who is responsible for selecting,

awarding, or otherwise obtaining items and services under

the State plan shall be subject to safeguards against conflicts of interest that are at least as stringent as the safeguards that apply under section 27 of the Office of Federal

Procurement Policy Act (41 U.S.C. 423) to persons described

in subsection (a)(2) of such section of that Act’’.

(2) EFFECTIVE DATE.—The amendments made by paragraph

(1) shall take effect on January 1, 1998.

(d) AUTHORITY TO REFUSE TO ENTER INTO MEDICAID AGREEMENTS WITH INDIVIDUALS OR ENTITIES CONVICTED OF FELONIES.—

Section 1902(a)(23) (42 U.S.C. 1396(a)) is amended—

(1) by striking ‘‘except as provided in subsection (g) and

in section 1915 and except in the case of Puerto Rico, the

Virgin Islands, and Guam,’’; and

(2) by inserting before the semicolon at the end the following: ‘‘, except as provided in subsection (g) and in section

1915, except that this paragraph shall not apply in the case

of Puerto Rico, the Virgin Islands, and Guam, and except that

nothing in this paragraph shall be construed as requiring a

State to provide medical assistance for such services furnished

by a person or entity convicted of a felony under Federal

or State law for an offense which the State agency determines

is inconsistent with the best interests of beneficiaries under

the State plan’’.

(e) MONITORING PAYMENTS FOR DUAL ELIGIBLES.—The Administrator of the Health Care Financing Administration shall develop

mechanisms to improve the monitoring of, and to prevent, inappropriate payments under the medicaid program under title XIX of

the Social Security Act (42 U.S.C. 1396 et seq.) in the case of

individuals who are dually eligible for benefits under such program

and under the medicare program under title XVIII of such Act

(42 U.S.C. 1395 et seq.).

(f) BENEFICIARY AND PROGRAM PROTECTION AGAINST WASTE, FRAUD, AND ABUSE.—Section 1902(a) (42 U.S.C. 1396a(a)) is amended—

(1) by striking ‘‘and’’ at the end of paragraph (62);

(2) by striking the period at the end of paragraph (63)

and inserting ‘‘; and’’; and

(3) by inserting after paragraph (63) the following:

‘‘(64) provide, not later than 1 year after the date of the

enactment of this paragraph, a mechanism to receive reports

from beneficiaries and others and compile data concerning

alleged instances of waste, fraud, and abuse relating to the

operation of this title;’’.

(g) DISCLOSURE OF INFORMATION AND SURETY BOND REQUIREMENT FOR SUPPLIERS OF DURABLE MEDICAL EQUIPMENT.—

(1) REQUIREMENT.—Section 1902(a) (42 U.S.C. 1396a(a)),

as amended by subsection (f), is amended—

(A) by striking ‘‘and’’ at the end of paragraph (63);

(B) by striking the period at the end of paragraph

(64) and inserting ‘‘; and’’; and

(C) by inserting after paragraph (64) the following:

‘‘(65) provide that the State shall issue provider numbers

for all suppliers of medical assistance consisting of durable
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medical equipment, as defined in section 1861(n), and the State

shall not issue or renew such a supplier number for any such

supplier unless—

‘‘(A)(i) full and complete information as to the identity

of each person with an ownership or control interest (as

defined in section 1124(a)(3)) in the supplier or in any

subcontractor (as defined by the Secretary in regulations)

in which the supplier directly or indirectly has a 5 percent

or more ownership interest; and

‘‘(ii) to the extent determined to be feasible under

regulations of the Secretary, the name of any disclosing

entity (as defined in section 1124(a)(2)) with respect to

which a person with such an ownership or control interest

in the supplier is a person with such an ownership or

control interest in the disclosing entity; and

‘‘(B) a surety bond in a form specified by the Secretary

under section 1834(a)(16)(B) and in an amount that is

not less than $50,000 or such comparable surety bond

as the Secretary may permit under the second sentence

of such section.’’.

(2) EFFECTIVE DATE.—The amendments made by paragraph

(1) shall apply to suppliers of medical assistance consisting

of durable medical equipment furnished on or after January

1, 1998.

SEC. 4725. INCREASED FMAPS.

(a) ALASKA.—Notwithstanding the first sentence of section

1905(b) of the Social Security Act (42 U.S.C. 1396d(b)), the Federal

medical assistance percentage determined under such sentence for

Alaska shall be 59.8 percent but only with respect to—

(1) items and services furnished under a State plan under

title XIX or under a State child health plan under title XXI

of such Act during fiscal years 1998, 1999, and 2000;

(2) payments made on a capitation or other risk-basis under

such titles for coverage occurring during such period; and

(3) payments under title XIX of such Act attributable to

DSH allotments for such State determined under section 1923(f)

of such Act (42 U.S.C. 1396r–4(f)) for such fiscal years.

(b) DISTRICT OF COLUMBIA.—

(1) IN GENERAL.—The first sentence of section 1905(b) (42

U.S.C. 1396d(b)) is amended—

(A) by striking ‘‘and (2)’’ and inserting ‘‘, (2)’’, and

(B) by inserting before the period at the end the following: ‘‘, and (3) for purposes of this title and title XXI,

the Federal medical assistance percentage for the District

of Columbia shall be 70 percent’’.

(2) EFFECTIVE DATE.—The amendments made by paragraph

(1) shall apply to—

(A) items and services furnished on or after October

1, 1997;

(B) payments made on a capitation or other risk-basis

for coverage occurring on or after such date; and

(C) payments attributable to DSH allotments for such

States determined under section 1923(f) of such Act (42

U.S.C. 1396r–4(f)) for fiscal years beginning with fiscal

year 1998.
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SEC. 4726. INCREASE IN PAYMENT LIMITATION FOR TERRITORIES.

Section 1108 (42 U.S.C. 1308) is amended—

(1) in subsection (f), by striking ‘‘The’’ and inserting ‘‘Subject to subsection (g), the’’; and

(2) by adding at the end the following:

‘‘(g) MEDICAID PAYMENTS TO TERRITORIES FOR FISCAL YEAR

1998 AND THEREAFTER.— ‘‘(1) FISCAL YEAR 1998.—With respect to fiscal year 1998,

the amounts otherwise determined for Puerto Rico, the Virgin

Islands, Guam, the Northern Mariana Islands, and American

Samoa under subsection (f) for such fiscal year shall be

increased by the following amounts: ‘‘(A) For Puerto Rico, $30,000,000.

‘‘(B) For the Virgin Islands, $750,000.

‘‘(C) For Guam, $750,000.

‘‘(D) For the Northern Mariana Islands, $500,000.

‘‘(E) For American Samoa, $500,000.

‘‘(2) FISCAL YEAR 1999 AND THEREAFTER.—Notwithstanding

subsection (f), with respect to fiscal year 1999 and any fiscal

year thereafter, the total amount certified by the Secretary

under title XIX for payment to—

‘‘(A) Puerto Rico shall not exceed the sum of the amount

provided in this subsection for the preceding fiscal year

increased by the percentage increase in the medical care

component of the Consumer Price Index for all urban

consumers (as published by the Bureau of Labor Statistics)

for the 12-month period ending in March preceding the

beginning of the fiscal year, rounded to the nearest

$100,000;

‘‘(B) the Virgin Islands shall not exceed the sum of

the amount provided in this subsection for the preceding

fiscal year increased by the percentage increase referred

to in subparagraph (A), rounded to the nearest $10,000;

‘‘(C) Guam shall not exceed the sum of the amount

provided in this subsection for the preceding fiscal year

increased by the percentage increase referred to in subparagraph (A), rounded to the nearest $10,000;

‘‘(D) the Northern Mariana Islands shall not exceed

the sum of the amount provided in this subsection for

the preceding fiscal year increased by the percentage

increase referred to in subparagraph (A), rounded to the

nearest $10,000; and

‘‘(E) American Samoa shall not exceed the sum of the

amount provided in this subsection for the preceding fiscal

year increased by the percentage increase referred to in

subparagraph (A), rounded to the nearest $10,000.’’.

CHAPTER 4—ELIGIBILITY

SEC. 4731. STATE OPTION OF CONTINUOUS ELIGIBILITY FOR 12

MONTHS; CLARIFICATION OF STATE OPTION TO COVER

CHILDREN.

(a) CONTINUOUS ELIGIBILITY OPTION.—Section 1902(e) (42

U.S.C. 1396a(e)) is amended by adding at the end the following

new paragraph:

‘‘(12) At the option of the State, the plan may provide that

an individual who is under an age specified by the State (not
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to exceed 19 years of age) and who is determined to be eligible

for benefits under a State plan approved under this title under

subsection (a)(10)(A) shall remain eligible for those benefits until

the earlier of—

‘‘(A) the end of a period (not to exceed 12 months) following

the determination; or

‘‘(B) the time that the individual exceeds that age.’’.

(b) CLARIFICATION OF STATE OPTION TO COVER ALL CHILDREN

UNDER 19 YEARS OF AGE.—Section 1902(l)(1)(D) (42 U.S.C.

1396a(l)(1)(D)) is amended by inserting ‘‘(or, at the option of a

State, after any earlier date)’’ after ‘‘children born after September

30, 1983’’.

(c) EFFECTIVE DATE.—The amendments made by this section

shall apply to medical assistance for items and services furnished

on or after October 1, 1997.

SEC. 4732. PAYMENT OF PART B PREMIUMS.

(a) ELIGIBILITY.—Section 1902(a)(10)(E) (42 U.S.C.

1396a(a)(10)(E)) is amended—

(1) by striking ‘‘and’’ at the end of clause (ii); and

(2) by inserting after clause (iii) the following:

‘‘(iv) subject to sections 1933 and 1905(p)(4), for making

medical assistance available (but only for premiums payable with respect to months during the period beginning

with January 1998, and ending with December 2002)—

‘‘(I) for medicare cost-sharing described in section

1905(p)(3)(A)(ii) for individuals who would be qualified

medicare beneficiaries described in section 1905(p)(1)

but for the fact that their income exceeds the income

level established by the State under section 1905(p)(2)

and is at least 120 percent, but less than 135 percent,

of the official poverty line (referred to in such section)

for a family of the size involved and who are not

otherwise eligible for medical assistance under the

State plan, and

‘‘(II) for the portion of medicare cost-sharing

described in section 1905(p)(3)(A)(ii) that is attributable to the operation of the amendments made by

(and subsection (e)(3) of) section 4611 of the Balanced

Budget Act of 1997 for individuals who would be

described in subclause (I) if ‘135 percent’ and ‘175

percent’ were substituted for ‘120 percent’ and ‘135

percent’ respectively; and’’.

(b) CONFORMING AMENDMENT.—Section 1905(b) (42 U.S.C.

1396d(b)) is amended by striking ‘‘The term’’ and inserting ‘‘Subject

to section 1933(d), the term’’.

(c) TERMS AND CONDITIONS OF COVERAGE.—Title XIX (42 U.S.C.

1395 et seq.), as amended by section 4701(a), is amended by

redesignating section 1933 as section 1934 and by inserting after

section 1932 the following new section:

‘‘STATE COVERAGE OF MEDICARE COST-SHARING FOR ADDITIONAL

LOW-INCOME MEDICARE BENEFICIARIES

‘‘SEC. 1933. (a) IN GENERAL.—A State plan under this title

shall provide, under section 1902(a)(10)(E)(iv) and subject to the

succeeding provisions of this section and through a plan amendment, for medical assistance for payment of the cost of medicare
H. R. 2015—271

cost-sharing described in such section on behalf of all individuals

described in such section (in this section referred to as ‘qualifying

individuals’) who are selected to receive such assistance under

subsection (b).

‘‘(b) SELECTION OF QUALIFYING INDIVIDUALS.—A State shall

select qualifying individuals, and provide such individuals with

assistance, under this section consistent with the following:

‘‘(1) ALL QUALIFYING INDIVIDUALS MAY APPLY.—The State

shall permit all qualifying individuals to apply for assistance

during a calendar year.

‘‘(2) SELECTION ON FIRST-COME, FIRST-SERVED BASIS.—

‘‘(A) IN GENERAL.—For each calendar year (beginning

with 1998), from (and to the extent of) the amount of

the allocation under subsection (c) for the State for the

fiscal year ending in such calendar year, the State shall

select qualifying individuals who apply for the assistance

in the order in which they apply.

‘‘(B) CARRYOVER.—For calendar years after 1998, the

State shall give preference to individuals who were provided such assistance (or other assistance described in section 1902(a)(10)(E)) in the last month of the previous year

and who continue to be (or become) qualifying individuals.

‘‘(3) LIMIT ON NUMBER OF INDIVIDUALS BASED ON ALLOCATION.—The State shall limit the number of qualifying individuals selected with respect to assistance in a calendar year

so that the aggregate amount of such assistance provided to

such individuals in such year is estimated to be equal to (but

not exceed) the State’s allocation under subsection (c) for the

fiscal year ending in such calendar year.

‘‘(4) RECEIPT OF ASSISTANCE DURING DURATION OF YEAR.— If a qualifying individual is selected to receive assistance under

this section for a month in year, the individual is entitled

to receive such assistance for the remainder of the year if

the individual continues to be a qualifying individual. The

fact that an individual is selected to receive assistance under

this section at any time during a year does not entitle the

individual to continued assistance for any succeeding year.

‘‘(c) ALLOCATION.— ‘‘(1) TOTAL ALLOCATION.—The total amount available for

allocation under this section for—

‘‘(A) fiscal year 1998 is $200,000,000;

‘‘(B) fiscal year 1999 is $250,000,000;

‘‘(C) fiscal year 2000 is $300,000,000;

‘‘(D) fiscal year 2001 is $350,000,000; and

‘‘(E) fiscal year 2002 is $400,000,000.

‘‘(2) ALLOCATION TO STATES.—The Secretary shall provide

for the allocation of the total amount described in paragraph

(1) for a fiscal year, among the States that executed a plan

amendment in accordance with subsection (a), based upon the

Secretary’s estimate of the ratio of—

‘‘(A) an amount equal to the sum of—

‘‘(i) twice the total number of individuals described

in section 1902(a)(10)(E)(iv)(I) in the State, and

‘‘(ii) the total number of individuals described in

section 1902(a)(10)(E)(iv)(II) in the State; to

‘‘(B) the sum of the amounts computed under subparagraph (A) for all eligible States.
H. R. 2015—272

‘‘(d) APPLICABLE FMAP.—With respect to assistance described

in section 1902(a)(10)(E)(iv) furnished in a State for calendar quarters in a calendar year —

‘‘(1) to the extent that such assistance does not exceed

the State’s allocation under subsection (c) for the fiscal year

ending in the calendar year, the Federal medical assistance

percentage shall be equal to 100 percent; and

‘‘(2) to the extent that such assistance exceeds such allocation, the Federal medical assistance percentage is 0 percent.

‘‘(e) LIMITATION ON ENTITLEMENT.—Except as specifically provided under this section, nothing in this title shall be construed

as establishing any entitlement of individuals described in section

1902(a)(10)(E)(iv) to assistance described in such section.

‘‘(f) COVERAGE OF COSTS THROUGH PART B OF THE MEDICARE

PROGRAM.—For each fiscal year, the Secretary shall provide for

the transfer from the Federal Supplementary Medical Insurance

Trust Fund under section 1841 to the appropriate account in the

Treasury that provides for payments under section 1903(a) with

respect to medical assistance provided under this section, of an

amount equivalent to the total of the amount of payments made

under such section that is attributable to this section and such

transfer shall be treated as an expenditure from such Trust Fund

for purposes of section 1839.’’.

SEC. 4733. STATE OPTION TO PERMIT WORKERS WITH DISABILITIES

TO BUY INTO MEDICAID.

Section 1902(a)(10)(A)(ii) (42 U.S.C. 1396a(a)(10)(A)(ii)) is

amended—

(1) in subclause (XI), by striking ‘‘or’’ at the end;

(2) in subclause (XII), by adding ‘‘or’’ at the end; and

(3) by adding at the end the following:

‘‘(XIII) who are in families whose income is

less than 250 percent of the income official poverty

line (as defined by the Office of Management and

Budget, and revised annually in accordance with

section 673(2) of the Omnibus Budget Reconciliation Act of 1981) applicable to a family of the

size involved, and who but for earnings in excess

of the limit established under section 1905(q)(2)(B),

would be considered to be receiving supplemental

security income (subject, notwithstanding section

1916, to payment of premiums or other cost-sharing charges (set on a sliding scale based on income)

that the State may determine);’’.

SEC. 4734. PENALTY FOR FRAUDULENT ELIGIBILITY.

Section 1128B(a) (42 U.S.C. 1320a–7b(a)), as amended by section 217 of the Health Insurance Portability and Accountability

Act of 1996 (Public Law 104–191; 110 Stat. 2008), is amended—

(1) by striking paragraph (6) and inserting the following:

‘‘(6) for a fee knowingly and willfully counsels or assists

an individual to dispose of assets (including by any transfer

in trust) in order for the individual to become eligible for

medical assistance under a State plan under title XIX, if disposing of the assets results in the imposition of a period of ineligibility for such assistance under section 1917(c),’’; and

(2) in clause (ii) of the matter following such paragraph,

by striking ‘‘failure, or conversion by any other person’’ and
H. R. 2015—273

inserting ‘‘failure, conversion, or provision of counsel or assistance by any other person’’.

SEC. 4735. TREATMENT OF CERTAIN SETTLEMENT PAYMENTS.

(a) IN GENERAL.—Notwithstanding any other provision of law,

the payments described in subsection (b) shall not be considered

income or resources in determining eligibility for, or the amount

of benefits under, a State plan of medical assistance approved

under title XIX of the Social Security Act.

(b) PAYMENTS DESCRIBED.—The payments described in this subsection are—

(1) payments made from any fund established pursuant

to a class settlement in the case of Susan Walker v. Bayer

Corporation, et al., 96–C–5024 (N.D. Ill.); and

(2) payments made pursuant to a release of all claims

in a case—

(A) that is entered into in lieu of the class settlement

referred to in paragraph (1); and

(B) that is signed by all affected parties in such case

on or before the later of—

(i) December 31, 1997, or

(ii) the date that is 270 days after the date on

which such release is first sent to the persons (or

the legal representative of such persons) to whom the

payment is to be made.

CHAPTER 5—BENEFITS

SEC. 4741. ELIMINATION OF REQUIREMENT TO PAY FOR PRIVATE

INSURANCE.

(a) REPEAL OF STATE PLAN PROVISION.—Section 1902(a)(25)

(42 U.S.C. 1396a(a)(25)) is amended—

(1) by striking subparagraph (G); and

(2) by redesignating subparagraphs (H) and (I) as subparagraphs (G) and (H), respectively.

(b) MAKING PROVISION OPTIONAL.—Section 1906 (42 U.S.C.

1396e) is amended—

(1) in subsection (a)—

(A) by striking ‘‘For purposes of section 1902(a)(25)(G)

and subject to subsection (d), each’’ and inserting ‘‘Each’’;

(B) in paragraph (1), by striking ‘‘shall’’ and inserting

‘‘may’’; and

(C) in paragraph (2), by striking ‘‘shall’’ and inserting

‘‘may’’; and

(2) by striking subsection (d).

(c) EFFECTIVE DATE.—The amendments made by this section

shall take effect on the date of the enactment of this Act.

SEC. 4742. PHYSICIAN QUALIFICATION REQUIREMENTS.

(a) IN GENERAL.—Section 1903(i) (42 U.S.C. 1396b(i)) is amended by striking paragraph (12).

(b) EFFECTIVE DATE.—The amendment made by subsection (a)

shall apply to services furnished on or after the date of the enactment of this Act.
H. R. 2015—274

SEC. 4743. ELIMINATION OF REQUIREMENT OF PRIOR INSTITUTIONALIZATION WITH RESPECT TO HABILITATION SERVICES

FURNISHED UNDER A WAIVER FOR HOME OR COMMUNITY-BASED SERVICES.

(a) IN GENERAL.—Section 1915(c)(5) (42 U.S.C. 1396n(c)(5)) is

amended, in the matter preceding subparagraph (A), by striking

‘‘, with respect to individuals who receive such services after discharge from a nursing facility or intermediate care facility for

the mentally retarded’’.

(b) EFFECTIVE DATE.—The amendment made by subsection (a)

apply to services furnished on or after October 1, 1997.

SEC. 4744. STUDY AND REPORT ON EPSDT BENEFIT.

(a) STUDY.—

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

Services, in consultation with Governors, directors of State

medicaid programs, the American Academy of Actuaries, and

representatives of appropriate provider and beneficiary

organizations, shall conduct a study of the provision of early

and periodic screening, diagnostic, and treatment services

under the medicaid program under title XIX of the Social

Security Act in accordance with the requirements of section

1905(r) of such Act (42 U.S.C. 1396d(r)).

(2) REQUIRED CONTENTS.—The study conducted under paragraph (1) shall include examination of the actuarial value of

the provision of such services under the medicaid program

and an examination of the portions of such actuarial value

that are attributable to paragraph (5) of section 1905(r) of

such Act and to the second sentence of such section.

(b) REPORT.—Not later than 12 months after the date of the

enactment of this Act, the Secretary of Health and Human Services

shall submit a report to Congress on the results of the study

conducted under subsection (a).

CHAPTER 6—ADMINISTRATION AND MISCELLANEOUS

SEC. 4751. ELIMINATION OF DUPLICATIVE INSPECTION OF CARE

REQUIREMENTS FOR ICFS/MR AND MENTAL HOSPITALS.

(a) MENTAL HOSPITALS.—Section 1902(a)(26) (42 U.S.C.

1396a(a)(26)) is amended—

(1) by striking ‘‘provide—

‘‘(A) with respect to each patient’’ and inserting ‘‘provide, with respect to each patient’’; and

(2) by striking subparagraphs (B) and (C).

(b) ICFS/MR.—Section 1902(a)(31) (42 U.S.C. 1396a(a)(31)) is

amended—

(1) by striking ‘‘provide—

‘‘(A) with respect to each patient’’ and inserting ‘‘provide, with respect to each patient’’; and

(2) by striking subparagraphs (B) and (C).

(c) EFFECTIVE DATE.—The amendments made by this section

take effect on the date of the enactment of this Act.

SEC. 4752. ALTERNATIVE SANCTIONS FOR NONCOMPLIANT ICFS/MR.

(a) IN GENERAL.—Section 1902(i)(1)(B) (42 U.S.C.

1396a(i)(1)(B)) is amended by striking ‘‘provide’’ and inserting

‘‘establish alternative remedies if the State demonstrates to the
H. R. 2015—275

Secretary’s satisfaction that the alternative remedies are effective

in deterring noncompliance and correcting deficiencies, and may

provide’’.

(b) EFFECTIVE DATE.—The amendment made by subsection (a)

takes effect on the date of the enactment of this Act.

SEC. 4753. MODIFICATION OF MMIS REQUIREMENTS.

(a) IN GENERAL.—Section 1903(r) (42 U.S.C. 1396b(r)) is amended—

(1) by striking all that precedes paragraph (5) and inserting

the following:

‘‘(r)(1) In order to receive payments under subsection (a) for

use of automated data systems in administration of the State plan

under this title, a State must have in operation mechanized claims

processing and information retrieval systems that meet the requirements of this subsection and that the Secretary has found—

‘‘(A) are adequate to provide efficient, economical, and effective administration of such State plan;

‘‘(B) are compatible with the claims processing and information retrieval systems used in the administration of title XVIII,

and for this purpose—

‘‘(i) have a uniform identification coding system

for providers, other payees, and beneficiaries under

this title or title XVIII;

‘‘(ii) provide liaison between States and carriers

and intermediaries with agreements under title XVIII

to facilitate timely exchange of appropriate data; and

‘‘(iii) provide for exchange of data between the

States and the Secretary with respect to persons sanctioned under this title or title XVIII;

‘‘(C) are capable of providing accurate and timely data;

‘‘(D) are complying with the applicable provisions of part

C of title XI;

‘‘(E) are designed to receive provider claims in standard

formats to the extent specified by the Secretary; and

‘‘(F) effective for claims filed on or after January 1, 1999,

provide for electronic transmission of claims data in the format

specified by the Secretary and consistent with the Medicaid

Statistical Information System (MSIS) (including detailed

individual enrollee encounter data and other information that

the Secretary may find necessary).’’;

(2) in paragraph (5)—

(A) by striking subparagraph (B);

(B) by striking all that precedes clause (i) and inserting

the following:

‘‘(2) In order to meet the requirements of this paragraph,

mechanized claims processing and information retrieval systems

must meet the following requirements:’’;

(C) in clause (iii), by striking ‘‘under paragraph (6)’’;

and

(D) by redesignating clauses (i) through (iii) as paragraphs (A) through (C); and

(3) by striking paragraphs (6), (7), and (8).

(b) CONFORMING AMENDMENTS.—Section 1902(a)(25)(A)(ii) (42

U.S.C. 1396a(a)(25)(A)(ii)) is amended by striking all that follows

‘‘shall’’ and inserting the following: ‘‘be integrated with, and be
H. R. 2015—276

monitored as a part of the Secretary’s review of, the State’s mechanized claims processing and information retrieval systems required

under section 1903(r);’’.

(c) EFFECTIVE DATE.—Except as otherwise specifically provided,

the amendments made by this section shall take effect on January

1, 1998.

SEC. 4754. FACILITATING IMPOSITION OF STATE ALTERNATIVE REMEDIES ON NONCOMPLIANT NURSING FACILITIES.

(a) IN GENERAL.—Section 1919(h)(3)(D) (42 U.S.C.

1396r(h)(3)(D)) is amended—

(1) by inserting ‘‘and’’ at the end of clause (i);

(2) by striking ‘‘, and’’ at the end of clause (ii) and inserting

a period; and

(3) by striking clause (iii).

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

(a) take effect on the date of the enactment of this Act.

SEC. 4755. REMOVAL OF NAME FROM NURSE AIDE REGISTRY.

(a) MEDICARE.—Section 1819(g)(1) (42 U.S.C. 1395i-3(g)(1)) is

amended—

(1) by redesignating subparagraph (D) as subparagraph

(E), and

(2) by inserting after subparagraph (C) the following:

‘‘(D) REMOVAL OF NAME FROM NURSE AIDE REGISTRY.—

‘‘(i) IN GENERAL.—In the case of a finding of neglect

under subparagraph (C), the State shall establish a

procedure to permit a nurse aide to petition the State

to have his or her name removed from the registry

upon a determination by the State that—

‘‘(I) the employment and personal history of

the nurse aide does not reflect a pattern of abusive

behavior or neglect; and

‘‘(II) the neglect involved in the original finding was a singular occurrence.

‘‘(ii) TIMING OF DETERMINATION.—In no case shall

a determination on a petition submitted under clause

(i) be made prior to the expiration of the 1-year period

beginning on the date on which the name of the petitioner was added to the registry under subparagraph

(C).’’.

(b) MEDICAID.—Section 1919(g)(1) (42 U.S.C. 1396r(g)(1)) is

amended—

(1) by redesignating subparagraph (D) as subparagraph

(E), and

(2) by inserting after subparagraph (C) the following:

‘‘(D) REMOVAL OF NAME FROM NURSE AIDE REGISTRY.—

‘‘(i) IN GENERAL.—In the case of a finding of neglect

under subparagraph (C), the State shall establish a

procedure to permit a nurse aide to petition the State

to have his or her name removed from the registry

upon a determination by the State that—

‘‘(I) the employment and personal history of

the nurse aide does not reflect a pattern of abusive

behavior or neglect; and

‘‘(II) the neglect involved in the original finding was a singular occurrence.
H. R. 2015—277

‘‘(ii) TIMING OF DETERMINATION.—In no case shall

a determination on a petition submitted under clause

(i) be made prior to the expiration of the 1-year period

beginning on the date on which the name of the petitioner was added to the registry under subparagraph

(C).’’.

(c) RETROACTIVE REVIEW.—The procedures developed by a State

under the amendments made by subsection (a) and (b) shall permit

an individual to petition for a review of any finding made by

a State under section 1819(g)(1)(C) or 1919(g)(1)(C) of the Social

Security Act (42 U.S.C. 1395i-3(g)(1)(C) or 1396r(g)(1)(C)) after

January 1, 1995.

SEC. 4756. MEDICALLY ACCEPTED INDICATION.

Section 1927(g)(1)(B)(i) (42 U.S.C. 1396r–8(g)(1)(B)(i)) is amended—

(1) by striking ‘‘and’’ at the end of subclause (II),

(2) by redesignating subclause (III) as subclause (IV), and

(3) by inserting after subclause (II) the following:

‘‘(III) the DRUGDEX Information System;

and’’.

SEC. 4757. CONTINUATION OF STATE-WIDE SECTION 1115 MEDICAID

WAIVERS.

(a) IN GENERAL.—Section 1115 (42 U.S.C. 1315) is amended

by adding at the end the following new subsection:

‘‘(e)(1) The provisions of this subsection shall apply to the

extension of any State-wide comprehensive demonstration project

(in this subsection referred to as ‘waiver project’) for which a waiver

of compliance with requirements of title XIX is granted under

subsection (a).

‘‘(2) During the 6-month period ending 1 year before the date

the waiver under subsection (a) with respect to a waiver project

would otherwise expire, the chief executive officer of the State

which is operating the project may submit to the Secretary a

written request for an extension, of up to 3 years, of the project.

‘‘(3) If the Secretary fails to respond to the request within

6 months after the date it is submitted, the request is deemed

to have been granted.

‘‘(4) If such a request is granted, the deadline for submittal

of a final report under the waiver project is deemed to have been

extended until the date that is 1 year after the date the waiver

project would otherwise have expired.

‘‘(5) The Secretary shall release an evaluation of each such

project not later than 1 year after the date of receipt of the final

report.

‘‘(6) Subject to paragraphs (4) and (7), the extension of a waiver

project under this subsection shall be on the same terms and

conditions (including applicable terms and conditions relating to

quality and access of services, budget neutrality, data and reporting

requirements, and special population protections) that applied to

the project before its extension under this subsection.

‘‘(7) If an original condition of approval of a waiver project

was that Federal expenditures under the project not exceed the

Federal expenditures that would otherwise have been made, the

Secretary shall take such steps as may be necessary to ensure

that, in the extension of the project under this subsection, such

condition continues to be met. In applying the previous sentence,
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the Secretary shall take into account the Secretary’s best estimate

of rates of change in expenditures at the time of the extension.’’.

(b) EFFECTIVE DATE.—The amendment made by subsection (a)

shall apply to demonstration projects initially approved before, on,

or after the date of the enactment of this Act.

SEC. 4758. EXTENSION OF MORATORIUM.

Section 6408(a)(3) of the Omnibus Budget Reconciliation Act

of 1989, as amended by section 13642 of the Omnibus Budget

Reconciliation Act of 1993, is amended by striking ‘‘December 31,

1995’’ and inserting ‘‘December 31, 2002’’.

SEC. 4759. EXTENSION OF EFFECTIVE DATE FOR STATE LAW AMENDMENT.

In the case of a State plan under title XIX of the Social

Security Act which the Secretary of Health and Human Services

determines requires State legislation in order for the plan to meet

the additional requirements imposed by the amendments made

by a provision of this subtitle, the State plan shall not be regarded

as failing to comply with the requirements of such title solely

on the basis of its failure to meet these additional requirements

before the first day of the first calendar quarter beginning after

the close of the first regular session of the State legislature that

begins after the date of the enactment of this Act. For purposes

of the previous sentence, in the case of a State that has a 2-

year legislative session, each year of the session is considered

to be a separate regular session of the State legislature.

Subtitle I—Programs of All-Inclusive Care

for the Elderly (PACE)

SEC. 4801. COVERAGE OF PACE UNDER THE MEDICARE PROGRAM.

Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.)

is amended by adding at the end the following new section:

‘‘PAYMENTS TO, AND COVERAGE OF BENEFITS UNDER, PROGRAMS OF

ALL-INCLUSIVE CARE FOR THE ELDERLY (PACE)

‘‘SEC. 1894. (a) RECEIPT OF BENEFITS THROUGH ENROLLMENT

IN PACE PROGRAM; DEFINITIONS FOR PACE PROGRAM RELATED

TERMS.—

‘‘(1) BENEFITS THROUGH ENROLLMENT IN A PACE PROGRAM.— In accordance with this section, in the case of an individual

who is entitled to benefits under part A or enrolled under

part B and who is a PACE program eligible individual (as

defined in paragraph (5)) with respect to a PACE program

offered by a PACE provider under a PACE program agreement—

‘‘(A) the individual may enroll in the program under

this section; and

‘‘(B) so long as the individual is so enrolled and in

accordance with regulations—

‘‘(i) the individual shall receive benefits under this

title solely through such program; and

‘‘(ii) the PACE provider is entitled to payment

under and in accordance with this section and such

agreement for provision of such benefits.
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‘‘(2) PACE PROGRAM DEFINED.—For purposes of this section,

the term ‘PACE program’ means a program of all-inclusive

care for the elderly that meets the following requirements:

‘‘(A) OPERATION.—The entity operating the program

is a PACE provider (as defined in paragraph (3)).

‘‘(B) COMPREHENSIVE BENEFITS.—The program provides

comprehensive health care services to PACE program

eligible individuals in accordance with the PACE program

agreement and regulations under this section.

‘‘(C) TRANSITION.—In the case of an individual who

is enrolled under the program under this section and whose

enrollment ceases for any reason (including that the

individual no longer qualifies as a PACE program eligible

individual, the termination of a PACE program agreement,

or otherwise), the program provides assistance to the

individual in obtaining necessary transitional care through

appropriate referrals and making the individual’s medical

records available to new providers.

‘‘(3) PACE PROVIDER DEFINED.—

‘‘(A) IN GENERAL.—For purposes of this section, the

term ‘PACE provider’ means an entity that—

‘‘(i) subject to subparagraph (B), is (or is a distinct

part of) a public entity or a private, nonprofit entity

organized for charitable purposes under section

501(c)(3) of the Internal Revenue Code of 1986; and

‘‘(ii) has entered into a PACE program agreement

with respect to its operation of a PACE program.

‘‘(B) TREATMENT OF PRIVATE, FOR-PROFIT PROVIDERS.—

Clause (i) of subparagraph (A) shall not apply—

‘‘(i) to entities subject to a demonstration project

waiver under subsection (h); and

‘‘(ii) after the date the report under section 4804(b)

of the Balanced Budget Act of 1997 is submitted, unless

the Secretary determines that any of the findings

described in subparagraph (A), (B), (C), or (D) of paragraph (2) of such section are true.

‘‘(4) PACE PROGRAM AGREEMENT DEFINED.—For purposes

of this section, the term ‘PACE program agreement’ means,

with respect to a PACE provider, an agreement, consistent

with this section, section 1934 (if applicable), and regulations

promulgated to carry out such sections, between the PACE

provider and the Secretary, or an agreement between the PACE

provider and a State administering agency for the operation

of a PACE program by the provider under such sections.

‘‘(5) PACE PROGRAM ELIGIBLE INDIVIDUAL DEFINED.—For

purposes of this section, the term ‘PACE program eligible

individual’ means, with respect to a PACE program, an individual who—

‘‘(A) is 55 years of age or older;

‘‘(B) subject to subsection (c)(4), is determined under

subsection (c) to require the level of care required under

the State medicaid plan for coverage of nursing facility

services;

‘‘(C) resides in the service area of the PACE program;

and
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‘‘(D) meets such other eligibility conditions as may

be imposed under the PACE program agreement for the

program under subsection (e)(2)(A)(ii).

‘‘(6) PACE PROTOCOL.—For purposes of this section, the

term ‘PACE protocol’ means the Protocol for the Program of

All-inclusive Care for the Elderly (PACE), as published by

On Lok, Inc., as of April 14, 1995, or any successor protocol

that may be agreed upon between the Secretary and On Lok,

Inc.

‘‘(7) PACE DEMONSTRATION WAIVER PROGRAM DEFINED.—

For purposes of this section, the term ‘PACE demonstration

waiver program’ means a demonstration program under either

of the following sections (as in effect before the date of their

repeal):

‘‘(A) Section 603(c) of the Social Security Amendments

of 1983 (Public Law 98–21), as extended by section 9220

of the Consolidated Omnibus Budget Reconciliation Act

of 1985 (Public Law 99–272).

‘‘(B) Section 9412(b) of the Omnibus Budget Reconciliation Act of 1986 (Public Law 99–509).

‘‘(8) STATE ADMINISTERING AGENCY DEFINED.—For purposes

of this section, the term ‘State administering agency’ means,

with respect to the operation of a PACE program in a State,

the agency of that State (which may be the single agency

responsible for administration of the State plan under title

XIX in the State) responsible for administering PACE program

agreements under this section and section 1934 in the State.

‘‘(9) TRIAL PERIOD DEFINED.—

‘‘(A) IN GENERAL.—For purposes of this section, the

term ‘trial period’ means, with respect to a PACE program

operated by a PACE provider under a PACE program

agreement, the first 3 contract years under such agreement

with respect to such program.

‘‘(B) TREATMENT OF ENTITIES PREVIOUSLY OPERATING

PACE DEMONSTRATION WAIVER PROGRAMS.—Each contract

year (including a year occurring before the effective date

of this section) during which an entity has operated a

PACE demonstration waiver program shall be counted

under subparagraph (A) as a contract year during which

the entity operated a PACE program as a PACE provider

under a PACE program agreement.

‘‘(10) REGULATIONS.—For purposes of this section, the term

‘regulations’ refers to interim final or final regulations promulgated under subsection (f) to carry out this section and section

1934.

‘‘(b) SCOPE OF BENEFITS; BENEFICIARY SAFEGUARDS.—

‘‘(1) IN GENERAL.—Under a PACE program agreement, a

PACE provider shall—

‘‘(A) provide to PACE program eligible individuals

enrolled with the provider, regardless of source of payment

and directly or under contracts with other entities, at a

minimum—

‘‘(i) all items and services covered under this title

(for individuals enrolled under this section) and all

items and services covered under title XIX, but without

any limitation or condition as to amount, duration,
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or scope and without application of deductibles, copayments, coinsurance, or other cost-sharing that would

otherwise apply under this title or such title, respectively; and

‘‘(ii) all additional items and services specified in

regulations, based upon those required under the

PACE protocol;

‘‘(B) provide such enrollees access to necessary covered

items and services 24 hours per day, every day of the

year;

‘‘(C) provide services to such enrollees through a comprehensive, multidisciplinary health and social services

delivery system which integrates acute and long-term care

services pursuant to regulations; and

‘‘(D) specify the covered items and services that will

not be provided directly by the entity, and to arrange

for delivery of those items and services through contracts

meeting the requirements of regulations.

‘‘(2) QUALITY ASSURANCE; PATIENT SAFEGUARDS.—The

PACE program agreement shall require the PACE provider

to have in effect at a minimum—

‘‘(A) a written plan of quality assurance and improvement, and procedures implementing such plan, in accordance with regulations; and

‘‘(B) written safeguards of the rights of enrolled participants (including a patient bill of rights and procedures

for grievances and appeals) in accordance with regulations

and with other requirements of this title and Federal and

State law that are designed for the protection of patients.

‘‘(c) ELIGIBILITY DETERMINATIONS.— ‘‘(1) IN GENERAL.—The determination of whether an individual is a PACE program eligible individual—

‘‘(A) shall be made under and in accordance with the

PACE program agreement; and

‘‘(B) who is entitled to medical assistance under title

XIX, shall be made (or who is not so entitled, may be

made) by the State administering agency.

‘‘(2) CONDITION.—An individual is not a PACE program

eligible individual (with respect to payment under this section)

unless the individual’s health status has been determined by

the Secretary or the State administering agency, in accordance

with regulations, to be comparable to the health status of

individuals who have participated in the PACE demonstration

waiver programs. Such determination shall be based upon

information on health status and related indicators (such as

medical diagnoses and measures of activities of daily living,

instrumental activities of daily living, and cognitive impairment) that are part of a uniform minimum data set collected

by PACE providers on potential PACE program eligible individuals.

‘‘(3) ANNUAL ELIGIBILITY RECERTIFICATIONS.—

‘‘(A) IN GENERAL.—Subject to subparagraph (B), the

determination described in subsection (a)(5)(B) for an

individual shall be reevaluated at least annually.

‘‘(B) EXCEPTION.—The requirement of annual reevaluation under subparagraph (A) may be waived during a period

in accordance with regulations in those cases where the
H. R. 2015—282

State administering agency determines that there is no

reasonable expectation of improvement or significant

change in an individual’s condition during the period

because of the severity of chronic condition, or degree of

impairment of functional capacity of the individual

involved.

‘‘(4) CONTINUATION OF ELIGIBILITY.—An individual who is

a PACE program eligible individual may be deemed to continue

to be such an individual notwithstanding a determination that

the individual no longer meets the requirement of subsection

(a)(5)(B) if, in accordance with regulations, in the absence of

continued coverage under a PACE program the individual

reasonably would be expected to meet such requirement within

the succeeding 6-month period.

‘‘(5) ENROLLMENT; DISENROLLMENT.—

‘‘(A) VOLUNTARY DISENROLLMENT AT ANY TIME.—The

enrollment and disenrollment of PACE program eligible

individuals in a PACE program shall be pursuant to regulations and the PACE program agreement and shall permit

enrollees to voluntarily disenroll without cause at any time.

‘‘(B) LIMITATIONS ON DISENROLLMENT.—

‘‘(i) IN GENERAL.—Regulations promulgated by the

Secretary under this section and section 1934, and

the PACE program agreement, shall provide that the

PACE program may not disenroll a PACE program

eligible individual except—

‘‘(I) for nonpayment of premiums (if applicable)

on a timely basis; or

‘‘(II) for engaging in disruptive or threatening

behavior, as defined in such regulations (developed

in close consultation with State administering

agencies).

‘‘(ii) NO DISENROLLMENT FOR NONCOMPLIANT

BEHAVIOR.—Except as allowed under regulations

promulgated to carry out clause (i)(II), a PACE program may not disenroll a PACE program eligible

individual on the ground that the individual has

engaged in noncompliant behavior if such behavior

is related to a mental or physical condition of the

individual. For purposes of the preceding sentence,

the term ‘noncompliant behavior’ includes repeated

noncompliance with medical advice and repeated failure to appear for appointments.

‘‘(iii) TIMELY REVIEW OF PROPOSED NONVOLUNTARY

DISENROLLMENT.—A proposed disenrollment, other

than a voluntary disenrollment, shall be subject to

timely review and final determination by the Secretary

or by the State administering agency (as applicable),

prior to the proposed disenrollment becoming effective.

‘‘(d) PAYMENTS TO PACE PROVIDERS ON A CAPITATED BASIS.—

‘‘(1) IN GENERAL.—In the case of a PACE provider with

a PACE program agreement under this section, except as provided in this subsection or by regulations, the Secretary shall

make prospective monthly payments of a capitation amount

for each PACE program eligible individual enrolled under the

agreement under this section in the same manner and from

the same sources as payments are made to a Medicare+Choice
H. R. 2015—283

organization under section 1853 (or, for periods beginning

before January 1, 1999, to an eligible organization under a

risk-sharing contract under section 1876). Such payments shall

be subject to adjustment in the manner described in section

1853(a)(2) or section 1876(a)(1)(E), as the case may be.

‘‘(2) CAPITATION AMOUNT.—The capitation amount to be

applied under this subsection for a provider for a contract

year shall be an amount specified in the PACE program agreement for the year. Such amount shall be based upon payment

rates established for purposes of payment under section 1853

(or, for periods before January 1, 1999, for purposes of risksharing contracts under section 1876) and shall be adjusted

to take into account the comparative frailty of PACE enrollees

and such other factors as the Secretary determines to be appropriate. Such amount under such an agreement shall be computed in a manner so that the total payment level for all

PACE program eligible individuals enrolled under a program

is less than the projected payment under this title for a comparable population not enrolled under a PACE program.

‘‘(e) PACE PROGRAM AGREEMENT.—

‘‘(1) REQUIREMENT.—

‘‘(A) IN GENERAL.—The Secretary, in close cooperation

with the State administering agency, shall establish procedures for entering into, extending, and terminating PACE

program agreements for the operation of PACE programs

by entities that meet the requirements for a PACE provider

under this section, section 1934, and regulations.

‘‘(B) NUMERICAL LIMITATION.—

‘‘(i) IN GENERAL.—The Secretary shall not permit

the number of PACE providers with which agreements

are in effect under this section or under section 9412(b)

of the Omnibus Budget Reconciliation Act of 1986 to

exceed—

‘‘(I) 40 as of the date of the enactment of

this section; or

‘‘(II) as of each succeeding anniversary of such

date, the numerical limitation under this subparagraph for the preceding year plus 20.

Subclause (II) shall apply without regard to the actual

number of agreements in effect as of a previous

anniversary date.

‘‘(ii) TREATMENT OF CERTAIN PRIVATE, FOR-PROFIT

PROVIDERS.—The numerical limitation in clause (i)

shall not apply to a PACE provider that—

‘‘(I) is operating under a demonstration project

waiver under subsection (h); or

‘‘(II) was operating under such a waiver and

subsequently qualifies for PACE provider status

pursuant to subsection (a)(3)(B)(ii).

‘‘(2) SERVICE AREA AND ELIGIBILITY.—

‘‘(A) IN GENERAL.—A PACE program agreement for

a PACE program—

‘‘(i) shall designate the service area of the program;

‘‘(ii) may provide additional requirements for

individuals to qualify as PACE program eligible

individuals with respect to the program;
H. R. 2015—284

‘‘(iii) shall be effective for a contract year, but

may be extended for additional contract years in the

absence of a notice by a party to terminate and is

subject to termination by the Secretary and the State

administering agency at any time for cause (as provided under the agreement);

‘‘(iv) shall require a PACE provider to meet all

applicable State and local laws and requirements; and

‘‘(v) shall contain such additional terms and conditions as the parties may agree to, so long as such

terms and conditions are consistent with this section

and regulations.

‘‘(B) SERVICE AREA OVERLAP.—In designating a service

area under a PACE program agreement under subparagraph (A)(i), the Secretary (in consultation with the State

administering agency) may exclude from designation an

area that is already covered under another PACE program

agreement, in order to avoid unnecessary duplication of

services and avoid impairing the financial and service

viability of an existing program.

‘‘(3) DATA COLLECTION; DEVELOPMENT OF OUTCOME MEASURES.—

‘‘(A) DATA COLLECTION.—

‘‘(i) IN GENERAL.—Under a PACE program agreement, the PACE provider shall—

‘‘(I) collect data;

‘‘(II) maintain, and afford the Secretary and

the State administering agency access to, the

records relating to the program, including pertinent financial, medical, and personnel records; and

‘‘(III) make available to the Secretary and the

State administering agency reports that the Secretary finds (in consultation with State administering agencies) necessary to monitor the operation,

cost, and effectiveness of the PACE program under

this section and section 1934 .

‘‘(ii) REQUIREMENTS DURING TRIAL PERIOD.—During

the first 3 years of operation of a PACE program

(either under this section or under a PACE demonstration waiver program), the PACE provider shall provide

such additional data as the Secretary specifies in regulations in order to perform the oversight required under

paragraph (4)(A).

‘‘(B) DEVELOPMENT OF OUTCOME MEASURES.—Under a

PACE program agreement, the PACE provider, the Secretary, and the State administering agency shall jointly

cooperate in the development and implementation of health

status and quality of life outcome measures with respect

to PACE program eligible individuals.

‘‘(4) OVERSIGHT.—

‘‘(A) ANNUAL, CLOSE OVERSIGHT DURING TRIAL

PERIOD.—During the trial period (as defined in subsection

(a)(9)) with respect to a PACE program operated by a

PACE provider, the Secretary (in cooperation with the State

administering agency) shall conduct a comprehensive

annual review of the operation of the PACE program by
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the provider in order to assure compliance with the requirements of this section and regulations. Such a review shall

include—

‘‘(i) an on-site visit to the program site;

‘‘(ii) comprehensive assessment of a provider’s fiscal soundness;

‘‘(iii) comprehensive assessment of the provider’s

capacity to provide all PACE services to all enrolled

participants;

‘‘(iv) detailed analysis of the entity’s substantial

compliance with all significant requirements of this

section and regulations; and

‘‘(v) any other elements the Secretary or State

administering agency considers necessary or appropriate.

‘‘(B) CONTINUING OVERSIGHT.—After the trial period,

the Secretary (in cooperation with the State administering

agency) shall continue to conduct such review of the operation of PACE providers and PACE programs as may be

appropriate, taking into account the performance level of

a provider and compliance of a provider with all significant

requirements of this section and regulations.

‘‘(C) DISCLOSURE.—The results of reviews under this

paragraph shall be reported promptly to the PACE provider, along with any recommendations for changes to the

provider’s program, and shall be made available to the

public upon request.

‘‘(5) TERMINATION OF PACE PROVIDER AGREEMENTS.—

‘‘(A) IN GENERAL.—Under regulations—

‘‘(i) the Secretary or a State administering agency

may terminate a PACE program agreement for cause;

and

‘‘(ii) a PACE provider may terminate an agreement

after appropriate notice to the Secretary, the State

agency, and enrollees.

‘‘(B) CAUSES FOR TERMINATION.—In accordance with

regulations establishing procedures for termination of

PACE program agreements, the Secretary or a State

administering agency may terminate a PACE program

agreement with a PACE provider for, among other reasons,

the fact that—

‘‘(i) the Secretary or State administering agency

determines that—

‘‘(I) there are significant deficiencies in the

quality of care provided to enrolled participants;

or

‘‘(II) the provider has failed to comply substantially with conditions for a program or provider

under this section or section 1934; and

‘‘(ii) the entity has failed to develop and successfully initiate, within 30 days of the date of the receipt

of written notice of such a determination, a plan to

correct the deficiencies, or has failed to continue

implementation of such a plan.

‘‘(C) TERMINATION AND TRANSITION PROCEDURES.—An

entity whose PACE provider agreement is terminated
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under this paragraph shall implement the transition procedures required under subsection (a)(2)(C).

‘‘(6) SECRETARY’S OVERSIGHT; ENFORCEMENT AUTHORITY.—

‘‘(A) IN GENERAL.—Under regulations, if the Secretary

determines (after consultation with the State administering

agency) that a PACE provider is failing substantially to

comply with the requirements of this section and regulations, the Secretary (and the State administering agency)

may take any or all of the following actions:

‘‘(i) Condition the continuation of the PACE program agreement upon timely execution of a corrective

action plan.

‘‘(ii) Withhold some or all further payments under

the PACE program agreement under this section or

section 1934 with respect to PACE program services

furnished by such provider until the deficiencies have

been corrected.

‘‘(iii) Terminate such agreement.

‘‘(B) APPLICATION OF INTERMEDIATE SANCTIONS.—Under

regulations, the Secretary may provide for the application

against a PACE provider of remedies described in section

1857(g)(2) (or, for periods before January 1, 1999, section

1876(i)(6)(B)) or 1903(m)(5)(B) in the case of violations

by the provider of the type described in section 1857(g)(1)

(or section 1876(i)(6)(A) for such periods) or 1903(m)(5)(A),

respectively (in relation to agreements, enrollees, and

requirements under this section or section 1934, respectively).

‘‘(7) PROCEDURES FOR TERMINATION OR IMPOSITION OF SANCTIONS.—Under regulations, the provisions of section 1857(h)

(or for periods before January 1, 1999, section 1876(i)(9)) shall

apply to termination and sanctions respecting a PACE program

agreement and PACE provider under this subsection in the

same manner as they apply to a termination and sanctions

with respect to a contract and a Medicare+Choice organization

under part C (or for such periods an eligible organization under

section 1876).

‘‘(8) TIMELY CONSIDERATION OF APPLICATIONS FOR PACE PROGRAM PROVIDER STATUS.—In considering an application for

PACE provider program status, the application shall be deemed

approved unless the Secretary, within 90 days after the date

of the submission of the application to the Secretary, either

denies such request in writing or informs the applicant in

writing with respect to any additional information that is

needed in order to make a final determination with respect

to the application. After the date the Secretary receives such

additional information, the application shall be deemed

approved unless the Secretary, within 90 days of such date,

denies such request.

‘‘(f) REGULATIONS.—

‘‘(1) IN GENERAL.—The Secretary shall issue interim final

or final regulations to carry out this section and section 1934.

‘‘(2) USE OF PACE PROTOCOL.—

‘‘(A) IN GENERAL.—In issuing such regulations, the Secretary shall, to the extent consistent with the provisions

of this section, incorporate the requirements applied to
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PACE demonstration waiver programs under the PACE

protocol.

‘‘(B) FLEXIBILITY.—In order to provide for reasonable

flexibility in adapting the PACE service delivery model

to the needs of particular organizations (such as those

in rural areas or those that may determine it appropriate

to use nonstaff physicians according to State licensing law

requirements) under this section and section 1934, the

Secretary (in close consultation with State administering

agencies) may modify or waive provisions of the PACE

protocol so long as any such modification or waiver is

not inconsistent with and would not impair the essential

elements, objectives, and requirements of this section, but

may not modify or waive any of the following provisions:

‘‘(i) The focus on frail elderly qualifying individuals

who require the level of care provided in a nursing

facility.

‘‘(ii) The delivery of comprehensive, integrated

acute and long-term care services.

‘‘(iii) The interdisciplinary team approach to care

management and service delivery.

‘‘(iv) Capitated, integrated financing that allows

the provider to pool payments received from public

and private programs and individuals.

‘‘(v) The assumption by the provider of full financial risk.

‘‘(3) APPLICATION OF CERTAIN ADDITIONAL BENEFICIARY AND

PROGRAM PROTECTIONS.— ‘‘(A) IN GENERAL.—In issuing such regulations and subject to subparagraph (B), the Secretary may apply with

respect to PACE programs, providers, and agreements such

requirements of part C (or, for periods before January

1, 1999, section 1876) and sections 1903(m) and 1932 relating to protection of beneficiaries and program integrity

as would apply to Medicare+Choice organizations under

part C (or for such periods eligible organizations under

risk-sharing contracts under section 1876) and to medicaid

managed care organizations under prepaid capitation

agreements under section 1903(m).

‘‘(B) CONSIDERATIONS.—In issuing such regulations, the

Secretary shall—

‘‘(i) take into account the differences between populations served and benefits provided under this section

and under part C (or, for periods before January 1,

1999, section 1876) and section 1903(m);

‘‘(ii) not include any requirement that conflicts

with carrying out PACE programs under this section;

and

‘‘(iii) not include any requirement restricting the

proportion of enrollees who are eligible for benefits

under this title or title XIX.

‘‘(4) CONSTRUCTION.—Nothing in this subsection shall be

construed as preventing the Secretary from including in regulations provisions to ensure the health and safety of individuals

enrolled in a PACE program under this section that are in

addition to those otherwise provided under paragraphs (2) and

(3).
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‘‘(g) WAIVERS OF REQUIREMENTS.—With respect to carrying out

a PACE program under this section, the following requirements

of this title (and regulations relating to such requirements) are

waived and shall not apply:

‘‘(1) Section 1812, insofar as it limits coverage of institutional services.

‘‘(2) Sections 1813, 1814, 1833, and 1886, insofar as such

sections relate to rules for payment for benefits.

‘‘(3) Sections 1814(a)(2)(B), 1814(a)(2)(C), and 1835(a)(2)(A),

insofar as they limit coverage of extended care services or

home health services.

‘‘(4) Section 1861(i), insofar as it imposes a 3-day prior

hospitalization requirement for coverage of extended care services.

‘‘(5) Paragraphs (1) and (9) of section 1862(a), insofar as

they may prevent payment for PACE program services to

individuals enrolled under PACE programs.

‘‘(h) DEMONSTRATION PROJECT FOR FOR-PROFIT ENTITIES.—

‘‘(1) IN GENERAL.—In order to demonstrate the operation

of a PACE program by a private, for-profit entity, the Secretary

(in close consultation with State administering agencies) shall

grant waivers from the requirement under subsection (a)(3)

that a PACE provider may not be a for-profit, private entity.

‘‘(2) SIMILAR TERMS AND CONDITIONS.—

‘‘(A) IN GENERAL.—Except as provided under subparagraph (B), and paragraph (1), the terms and conditions

for operation of a PACE program by a provider under

this subsection shall be the same as those for PACE providers that are nonprofit, private organizations.

‘‘(B) NUMERICAL LIMITATION.—The number of programs

for which waivers are granted under this subsection shall

not exceed 10. Programs with waivers granted under this

subsection shall not be counted against the numerical

limitation specified in subsection (e)(1)(B).

‘‘(i) MISCELLANEOUS PROVISIONS.—Nothing in this section or

section 1934 shall be construed as preventing a PACE provider

from entering into contracts with other governmental or nongovernmental payers for the care of PACE program eligible individuals

who are not eligible for benefits under part A, or enrolled under

part B, or eligible for medical assistance under title XIX.’’.

SEC. 4802. ESTABLISHMENT OF PACE PROGRAM AS MEDICAID STATE

OPTION.

(a) IN GENERAL.—Title XIX is amended—

(1) in section 1905(a) (42 U.S.C. 1396d(a)), as amended

by section 4702(a)(1)—

(A) by striking ‘‘and’’ at the end of paragraph (25);

(B) by redesignating paragraph (26) as paragraph (27);

and

(C) by inserting after paragraph (25) the following

new paragraph:

‘‘(26) services furnished under a PACE program under section 1934 to PACE program eligible individuals enrolled under

the program under such section; and’’;

(2) by redesignating section 1934, as redesignated by section 4732, as section 1935; and
H. R. 2015—289

(3) by inserting after section 1933, as added by such section,

the following new section:

‘‘PROGRAM OF ALL-INCLUSIVE CARE FOR THE ELDERLY (PACE)

‘‘SEC. 1934. (a) STATE OPTION.—

‘‘(1) IN GENERAL.—A State may elect to provide medical

assistance under this section with respect to PACE program

services to PACE program eligible individuals who are eligible

for medical assistance under the State plan and who are

enrolled in a PACE program under a PACE program agreement.

Such individuals need not be eligible for benefits under part

A, or enrolled under part B, of title XVIII to be eligible to

enroll under this section. In the case of an individual enrolled

with a PACE program pursuant to such an election—

‘‘(A) the individual shall receive benefits under the

plan solely through such program, and

‘‘(B) the PACE provider shall receive payment in

accordance with the PACE program agreement for provision of such benefits.

A State may establish a numerical limit on the number of

individuals who may be enrolled in a PACE program under

a PACE program agreement.

‘‘(2) PACE PROGRAM DEFINED.—For purposes of this section,

the term ‘PACE program’ means a program of all-inclusive

care for the elderly that meets the following requirements:

‘‘(A) OPERATION.—The entity operating the program

is a PACE provider (as defined in paragraph (3)).

‘‘(B) COMPREHENSIVE BENEFITS.—The program provides

comprehensive health care services to PACE program

eligible individuals in accordance with the PACE program

agreement and regulations under this section.

‘‘(C) TRANSITION.—In the case of an individual who

is enrolled under the program under this section and whose

enrollment ceases for any reason (including that the

individual no longer qualifies as a PACE program eligible

individual, the termination of a PACE program agreement,

or otherwise), the program provides assistance to the

individual in obtaining necessary transitional care through

appropriate referrals and making the individual’s medical

records available to new providers.

‘‘(3) PACE PROVIDER DEFINED.— ‘‘(A) IN GENERAL.—For purposes of this section, the

term ‘PACE provider’ means an entity that—

‘‘(i) subject to subparagraph (B), is (or is a distinct

part of) a public entity or a private, nonprofit entity

organized for charitable purposes under section

501(c)(3) of the Internal Revenue Code of 1986, and

‘‘(ii) has entered into a PACE program agreement

with respect to its operation of a PACE program.

‘‘(B) TREATMENT OF PRIVATE, FOR-PROFIT PROVIDERS.—

Clause (i) of subparagraph (A) shall not apply—

‘‘(i) to entities subject to a demonstration project

waiver under subsection (h); and

‘‘(ii) after the date the report under section 4804(b)

of the Balanced Budget Act of 1997 is submitted, unless

the Secretary determines that any of the findings
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described in subparagraph (A), (B), (C), or (D) of paragraph (2) of such section are true.

‘‘(4) PACE PROGRAM AGREEMENT DEFINED.—For purposes

of this section, the term ‘PACE program agreement’ means,

with respect to a PACE provider, an agreement, consistent

with this section, section 1894 (if applicable), and regulations

promulgated to carry out such sections, among the PACE provider, the Secretary, and a State administering agency for

the operation of a PACE program by the provider under such

sections.

‘‘(5) PACE PROGRAM ELIGIBLE INDIVIDUAL DEFINED.—For

purposes of this section, the term ‘PACE program eligible

individual’ means, with respect to a PACE program, an individual who—

‘‘(A) is 55 years of age or older;

‘‘(B) subject to subsection (c)(4), is determined under

subsection (c) to require the level of care required under

the State medicaid plan for coverage of nursing facility

services;

‘‘(C) resides in the service area of the PACE program;

and

‘‘(D) meets such other eligibility conditions as may

be imposed under the PACE program agreement for the

program under subsection (e)(2)(A)(ii).

‘‘(6) PACE PROTOCOL.—For purposes of this section, the

term ‘PACE protocol’ means the Protocol for the Program of

All-inclusive Care for the Elderly (PACE), as published by

On Lok, Inc., as of April 14, 1995, or any successor protocol

that may be agreed upon between the Secretary and On Lok,

Inc.

‘‘(7) PACE DEMONSTRATION WAIVER PROGRAM DEFINED.— For purposes of this section, the term ‘PACE demonstration

waiver program’ means a demonstration program under either

of the following sections (as in effect before the date of their

repeal):

‘‘(A) Section 603(c) of the Social Security Amendments

of 1983 (Public Law 98–21), as extended by section 9220

of the Consolidated Omnibus Budget Reconciliation Act

of 1985 (Public Law 99–272).

‘‘(B) Section 9412(b) of the Omnibus Budget Reconciliation Act of 1986 (Public Law 99–509).

‘‘(8) STATE ADMINISTERING AGENCY DEFINED.—For purposes

of this section, the term ‘State administering agency’ means,

with respect to the operation of a PACE program in a State,

the agency of that State (which may be the single agency

responsible for administration of the State plan under this

title in the State) responsible for administering PACE program

agreements under this section and section 1894 in the State.

‘‘(9) TRIAL PERIOD DEFINED.—

‘‘(A) IN GENERAL.—For purposes of this section, the

term ‘trial period’ means, with respect to a PACE program

operated by a PACE provider under a PACE program

agreement, the first 3 contract years under such agreement

with respect to such program.

‘‘(B) TREATMENT OF ENTITIES PREVIOUSLY OPERATING

PACE DEMONSTRATION WAIVER PROGRAMS.—Each contract

year (including a year occurring before the effective date
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of this section) during which an entity has operated a

PACE demonstration waiver program shall be counted

under subparagraph (A) as a contract year during which

the entity operated a PACE program as a PACE provider

under a PACE program agreement.

‘‘(10) REGULATIONS.—For purposes of this section, the term

‘regulations’ refers to interim final or final regulations promulgated under subsection (f) to carry out this section and section

1894.

‘‘(b) SCOPE OF BENEFITS; BENEFICIARY SAFEGUARDS.—

‘‘(1) IN GENERAL.—Under a PACE program agreement, a

PACE provider shall—

‘‘(A) provide to PACE program eligible individuals,

regardless of source of payment and directly or under contracts with other entities, at a minimum—

‘‘(i) all items and services covered under title XVIII

(for individuals enrolled under section 1894) and all

items and services covered under this title, but without

any limitation or condition as to amount, duration,

or scope and without application of deductibles, copayments, coinsurance, or other cost-sharing that would

otherwise apply under such title or this title, respectively; and

‘‘(ii) all additional items and services specified in

regulations, based upon those required under the

PACE protocol;

‘‘(B) provide such enrollees access to necessary covered

items and services 24 hours per day, every day of the

year;

‘‘(C) provide services to such enrollees through a comprehensive, multidisciplinary health and social services

delivery system which integrates acute and long-term care

services pursuant to regulations; and

‘‘(D) specify the covered items and services that will

not be provided directly by the entity, and to arrange

for delivery of those items and services through contracts

meeting the requirements of regulations.

‘‘(2) QUALITY ASSURANCE; PATIENT SAFEGUARDS.—The

PACE program agreement shall require the PACE provider

to have in effect at a minimum—

‘‘(A) a written plan of quality assurance and improvement, and procedures implementing such plan, in accordance with regulations, and

‘‘(B) written safeguards of the rights of enrolled participants (including a patient bill of rights and procedures

for grievances and appeals) in accordance with regulations

and with other requirements of this title and Federal and

State law designed for the protection of patients.

‘‘(c) ELIGIBILITY DETERMINATIONS.—

‘‘(1) IN GENERAL.—The determination of—

‘‘(A) whether an individual is a PACE program eligible

individual shall be made under and in accordance with

the PACE program agreement, and

‘‘(B) who is entitled to medical assistance under this

title shall be made (or who is not so entitled, may be

made) by the State administering agency.
H. R. 2015—292

‘‘(2) CONDITION.—An individual is not a PACE program

eligible individual (with respect to payment under this section)

unless the individual’s health status has been determined by

the Secretary or the State administering agency, in accordance

with regulations, to be comparable to the health status of

individuals who have participated in the PACE demonstration

waiver programs. Such determination shall be based upon

information on health status and related indicators (such as

medical diagnoses and measures of activities of daily living,

instrumental activities of daily living, and cognitive impairment) that are part of a uniform minimum data set collected

by PACE providers on potential eligible individuals.

‘‘(3) ANNUAL ELIGIBILITY RECERTIFICATIONS.—

‘‘(A) IN GENERAL.—Subject to subparagraph (B), the

determination described in subsection (a)(5)(B) for an

individual shall be reevaluated at least annually.

‘‘(B) EXCEPTION.—The requirement of annual reevaluation under subparagraph (A) may be waived during a period

in accordance with regulations in those cases in which

the State administering agency determines that there is

no reasonable expectation of improvement or significant

change in an individual’s condition during the period

because of the severity of chronic condition, or degree of

impairment of functional capacity of the individual

involved.

‘‘(4) CONTINUATION OF ELIGIBILITY.—An individual who is

a PACE program eligible individual may be deemed to continue

to be such an individual notwithstanding a determination that

the individual no longer meets the requirement of subsection

(a)(5)(B) if, in accordance with regulations, in the absence of

continued coverage under a PACE program the individual

reasonably would be expected to meet such requirement within

the succeeding 6-month period.

‘‘(5) ENROLLMENT; DISENROLLMENT.— ‘‘(A) VOLUNTARY DISENROLLMENT AT ANY TIME.—The

enrollment and disenrollment of PACE program eligible

individuals in a PACE program shall be pursuant to regulations and the PACE program agreement and shall permit

enrollees to voluntarily disenroll without cause at any time.

‘‘(B) LIMITATIONS ON DISENROLLMENT.— ‘‘(i) IN GENERAL.—Regulations promulgated by the

Secretary under this section and section 1894, and

the PACE program agreement, shall provide that the

PACE program may not disenroll a PACE program

eligible individual except—

‘‘(I) for nonpayment of premiums (if applicable)

on a timely basis; or

‘‘(II) for engaging in disruptive or threatening

behavior, as defined in such regulations (developed

in close consultation with State administering

agencies).

‘‘(ii) NO DISENROLLMENT FOR NONCOMPLIANT

BEHAVIOR.—Except as allowed under regulations

promulgated to carry out clause (i)(II), a PACE program may not disenroll a PACE program eligible

individual on the ground that the individual has

engaged in noncompliant behavior if such behavior
H. R. 2015—293

is related to a mental or physical condition of the

individual. For purposes of the preceding sentence,

the term ‘noncompliant behavior’ includes repeated

noncompliance with medical advice and repeated failure to appear for appointments.

‘‘(iii) TIMELY REVIEW OF PROPOSED NONVOLUNTARY

DISENROLLMENT.—A proposed disenrollment, other

than a voluntary disenrollment, shall be subject to

timely review and final determination by the Secretary

or by the State administering agency (as applicable),

prior to the proposed disenrollment becoming effective.

‘‘(d) PAYMENTS TO PACE PROVIDERS ON A CAPITATED BASIS.—

‘‘(1) IN GENERAL.—In the case of a PACE provider with

a PACE program agreement under this section, except as provided in this subsection or by regulations, the State shall make

prospective monthly payments of a capitation amount for each

PACE program eligible individual enrolled under the agreement

under this section.

‘‘(2) CAPITATION AMOUNT.—The capitation amount to be

applied under this subsection for a provider for a contract

year shall be an amount specified in the PACE program agreement for the year. Such amount shall be an amount, specified

under the PACE agreement, which is less than the amount

that would otherwise have been made under the State plan

if the individuals were not so enrolled and shall be adjusted

to take into account the comparative frailty of PACE enrollees

and such other factors as the Secretary determines to be appropriate. The payment under this section shall be in addition

to any payment made under section 1894 for individuals who

are enrolled in a PACE program under such section.

‘‘(e) PACE PROGRAM AGREEMENT.— ‘‘(1) REQUIREMENT.— ‘‘(A) IN GENERAL.—The Secretary, in close cooperation

with the State administering agency, shall establish procedures for entering into, extending, and terminating PACE

program agreements for the operation of PACE programs

by entities that meet the requirements for a PACE provider

under this section, section 1894, and regulations.

‘‘(B) NUMERICAL LIMITATION.— ‘‘(i) IN GENERAL.—The Secretary shall not permit

the number of PACE providers with which agreements

are in effect under this section or under section 9412(b)

of the Omnibus Budget Reconciliation Act of 1986 to

exceed—

‘‘(I) 40 as of the date of the enactment of

this section, or

‘‘(II) as of each succeeding anniversary of such

date, the numerical limitation under this subparagraph for the preceding year plus 20.

Subclause (II) shall apply without regard to the actual

number of agreements in effect as of a previous

anniversary date.

‘‘(ii) TREATMENT OF CERTAIN PRIVATE, FOR-PROFIT

PROVIDERS.—The numerical limitation in clause (i)

shall not apply to a PACE provider that—

‘‘(I) is operating under a demonstration project

waiver under subsection (h), or
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‘‘(II) was operating under such a waiver and

subsequently qualifies for PACE provider status

pursuant to subsection (a)(3)(B)(ii).

‘‘(2) SERVICE AREA AND ELIGIBILITY.—

‘‘(A) IN GENERAL.—A PACE program agreement for

a PACE program—

‘‘(i) shall designate the service area of the program;

‘‘(ii) may provide additional requirements for

individuals to qualify as PACE program eligible

individuals with respect to the program;

‘‘(iii) shall be effective for a contract year, but

may be extended for additional contract years in the

absence of a notice by a party to terminate, and is

subject to termination by the Secretary and the State

administering agency at any time for cause (as provided under the agreement);

‘‘(iv) shall require a PACE provider to meet all

applicable State and local laws and requirements; and

‘‘(v) shall contain such additional terms and conditions as the parties may agree to, so long as such

terms and conditions are consistent with this section

and regulations.

‘‘(B) SERVICE AREA OVERLAP.—In designating a service

area under a PACE program agreement under subparagraph (A)(i), the Secretary (in consultation with the State

administering agency) may exclude from designation an

area that is already covered under another PACE program

agreement, in order to avoid unnecessary duplication of

services and avoid impairing the financial and service

viability of an existing program.

‘‘(3) DATA COLLECTION; DEVELOPMENT OF OUTCOME MEASURES.—

‘‘(A) DATA COLLECTION.—

‘‘(i) IN GENERAL.—Under a PACE program agreement, the PACE provider shall—

‘‘(I) collect data;

‘‘(II) maintain, and afford the Secretary and

the State administering agency access to, the

records relating to the program, including pertinent financial, medical, and personnel records; and

‘‘(III) submit to the Secretary and the State

administering agency such reports as the Secretary

finds (in consultation with State administering

agencies) necessary to monitor the operation, cost,

and effectiveness of the PACE program.

‘‘(ii) REQUIREMENTS DURING TRIAL PERIOD.—During

the first 3 years of operation of a PACE program

(either under this section or under a PACE demonstration waiver program), the PACE provider shall provide

such additional data as the Secretary specifies in regulations in order to perform the oversight required under

paragraph (4)(A).

‘‘(B) DEVELOPMENT OF OUTCOME MEASURES.—Under a

PACE program agreement, the PACE provider, the Secretary, and the State administering agency shall jointly

cooperate in the development and implementation of health
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status and quality of life outcome measures with respect

to PACE program eligible individuals.

‘‘(4) OVERSIGHT.—

‘‘(A) ANNUAL, CLOSE OVERSIGHT DURING TRIAL

PERIOD.—During the trial period (as defined in subsection

(a)(9)) with respect to a PACE program operated by a

PACE provider, the Secretary (in cooperation with the State

administering agency) shall conduct a comprehensive

annual review of the operation of the PACE program by

the provider in order to assure compliance with the requirements of this section and regulations. Such a review shall

include—

‘‘(i) an onsite visit to the program site;

‘‘(ii) comprehensive assessment of a provider’s fiscal soundness;

‘‘(iii) comprehensive assessment of the provider’s

capacity to provide all PACE services to all enrolled

participants;

‘‘(iv) detailed analysis of the entity’s substantial

compliance with all significant requirements of this

section and regulations; and

‘‘(v) any other elements the Secretary or the State

administering agency considers necessary or appropriate.

‘‘(B) CONTINUING OVERSIGHT.—After the trial period,

the Secretary (in cooperation with the State administering

agency) shall continue to conduct such review of the operation of PACE providers and PACE programs as may be

appropriate, taking into account the performance level of

a provider and compliance of a provider with all significant

requirements of this section and regulations.

‘‘(C) DISCLOSURE.—The results of reviews under this

paragraph shall be reported promptly to the PACE provider, along with any recommendations for changes to the

provider’s program, and shall be made available to the

public upon request.

‘‘(5) TERMINATION OF PACE PROVIDER AGREEMENTS.—

‘‘(A) IN GENERAL.—Under regulations—

‘‘(i) the Secretary or a State administering agency

may terminate a PACE program agreement for cause,

and

‘‘(ii) a PACE provider may terminate such an

agreement after appropriate notice to the Secretary,

the State administering agency, and enrollees.

‘‘(B) CAUSES FOR TERMINATION.—In accordance with

regulations establishing procedures for termination of

PACE program agreements, the Secretary or a State

administering agency may terminate a PACE program

agreement with a PACE provider for, among other reasons,

the fact that—

‘‘(i) the Secretary or State administering agency

determines that—

‘‘(I) there are significant deficiencies in the

quality of care provided to enrolled participants;

or
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‘‘(II) the provider has failed to comply substantially with conditions for a program or provider

under this section or section 1894; and

‘‘(ii) the entity has failed to develop and successfully initiate, within 30 days of the date of the receipt

of written notice of such a determination, a plan to

correct the deficiencies, or has failed to continue

implementation of such a plan.

‘‘(C) TERMINATION AND TRANSITION PROCEDURES.—An

entity whose PACE provider agreement is terminated

under this paragraph shall implement the transition procedures required under subsection (a)(2)(C).

‘‘(6) SECRETARY’S OVERSIGHT; ENFORCEMENT AUTHORITY.—

‘‘(A) IN GENERAL.—Under regulations, if the Secretary

determines (after consultation with the State administering

agency) that a PACE provider is failing substantially to

comply with the requirements of this section and regulations, the Secretary (and the State administering agency)

may take any or all of the following actions:

‘‘(i) Condition the continuation of the PACE program agreement upon timely execution of a corrective

action plan.

‘‘(ii) Withhold some or all further payments under

the PACE program agreement under this section or

section 1894 with respect to PACE program services

furnished by such provider until the deficiencies have

been corrected.

‘‘(iii) Terminate such agreement.

‘‘(B) APPLICATION OF INTERMEDIATE SANCTIONS.—Under

regulations, the Secretary may provide for the application

against a PACE provider of remedies described in section

1857(g)(2) (or, for periods before January 1, 1999, section

1876(i)(6)(B)) or 1903(m)(5)(B) in the case of violations

by the provider of the type described in section 1857(g)(1)

(or 1876(i)(6)(A) for such periods) or 1903(m)(5)(A), respectively (in relation to agreements, enrollees, and requirements under section 1894 or this section, respectively).

‘‘(7) PROCEDURES FOR TERMINATION OR IMPOSITION OF SANCTIONS.—Under regulations, the provisions of section 1857(h)

(or for periods before January 1, 1999, section 1876(i)(9)) shall

apply to termination and sanctions respecting a PACE program

agreement and PACE provider under this subsection in the

same manner as they apply to a termination and sanctions

with respect to a contract and a Medicare+Choice organization

under part C of title XVIII (or for such periods an eligible

organization under section 1876).

‘‘(8) TIMELY CONSIDERATION OF APPLICATIONS FOR PACE PROGRAM PROVIDER STATUS.—In considering an application for

PACE provider program status, the application shall be deemed

approved unless the Secretary, within 90 days after the date

of the submission of the application to the Secretary, either

denies such request in writing or informs the applicant in

writing with respect to any additional information that is

needed in order to make a final determination with respect

to the application. After the date the Secretary receives such

additional information, the application shall be deemed
H. R. 2015—297

approved unless the Secretary, within 90 days of such date,

denies such request.

‘‘(f) REGULATIONS.—

‘‘(1) IN GENERAL.—The Secretary shall issue interim final

or final regulations to carry out this section and section 1894.

‘‘(2) USE OF PACE PROTOCOL.—

‘‘(A) IN GENERAL.—In issuing such regulations, the Secretary shall, to the extent consistent with the provisions

of this section, incorporate the requirements applied to

PACE demonstration waiver programs under the PACE

protocol.

‘‘(B) FLEXIBILITY.—In order to provide for reasonable

flexibility in adapting the PACE service delivery model

to the needs of particular organizations (such as those

in rural areas or those that may determine it appropriate

to use nonstaff physicians according to State licensing law

requirements) under this section and section 1894, the

Secretary (in close consultation with State administering

agencies) may modify or waive provisions of the PACE

protocol so long as any such modification or waiver is

not inconsistent with and would not impair the essential

elements, objectives, and requirements of this section, but

may not modify or waive any of the following provisions:

‘‘(i) The focus on frail elderly qualifying individuals

who require the level of care provided in a nursing

facility.

‘‘(ii) The delivery of comprehensive, integrated

acute and long-term care services.

‘‘(iii) The interdisciplinary team approach to care

management and service delivery.

‘‘(iv) Capitated, integrated financing that allows

the provider to pool payments received from public

and private programs and individuals.

‘‘(v) The assumption by the provider of full financial risk.

‘‘(3) APPLICATION OF CERTAIN ADDITIONAL BENEFICIARY AND

PROGRAM PROTECTIONS.— ‘‘(A) IN GENERAL.—In issuing such regulations and subject to subparagraph (B), the Secretary may apply with

respect to PACE programs, providers, and agreements such

requirements of part C of title XVIII (or, for periods before

January 1, 1999, section 1876) and sections 1903(m) and

1932 relating to protection of beneficiaries and program

integrity as would apply to Medicare+Choice organizations

under such part C (or for such periods eligible organizations

under risk-sharing contracts under section 1876) and to

medicaid managed care organizations under prepaid capitation agreements under section 1903(m).

‘‘(B) CONSIDERATIONS.—In issuing such regulations, the

Secretary shall—

‘‘(i) take into account the differences between populations served and benefits provided under this section

and under part C of title XVIII (or, for periods before

January 1, 1999, section 1876) and section 1903(m);

‘‘(ii) not include any requirement that conflicts

with carrying out PACE programs under this section;

and
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‘‘(iii) not include any requirement restricting the

proportion of enrollees who are eligible for benefits

under this title or title XVIII.

‘‘(4) CONSTRUCTION.—Nothing in this subsection shall be

construed as preventing the Secretary from including in regulations provisions to ensure the health and safety of individuals

enrolled in a PACE program under this section that are in

addition to those otherwise provided under paragraphs (2) and

(3).

‘‘(g) WAIVERS OF REQUIREMENTS.—With respect to carrying out

a PACE program under this section, the following requirements

of this title (and regulations relating to such requirements) shall

not apply:

‘‘(1) Section 1902(a)(1), relating to any requirement that

PACE programs or PACE program services be provided in

all areas of a State.

‘‘(2) Section 1902(a)(10), insofar as such section relates

to comparability of services among different population groups.

‘‘(3) Sections 1902(a)(23) and 1915(b)(4), relating to freedom

of choice of providers under a PACE program.

‘‘(4) Section 1903(m)(2)(A), insofar as it restricts a PACE

provider from receiving prepaid capitation payments.

‘‘(5) Such other provisions of this title that, as added or

amended by the Balanced Budget Act of 1997, the Secretary

determines are inapplicable to carrying out a PACE program

under this section.

‘‘(h) DEMONSTRATION PROJECT FOR FOR-PROFIT ENTITIES.—

‘‘(1) IN GENERAL.—In order to demonstrate the operation

of a PACE program by a private, for-profit entity, the Secretary

(in close consultation with State administering agencies) shall

grant waivers from the requirement under subsection (a)(3)

that a PACE provider may not be a for-profit, private entity.

‘‘(2) SIMILAR TERMS AND CONDITIONS.—

‘‘(A) IN GENERAL.—Except as provided under subparagraph (B), and paragraph (1), the terms and conditions

for operation of a PACE program by a provider under

this subsection shall be the same as those for PACE providers that are nonprofit, private organizations.

‘‘(B) NUMERICAL LIMITATION.—The number of programs

for which waivers are granted under this subsection shall

not exceed 10. Programs with waivers granted under this

subsection shall not be counted against the numerical

limitation specified in subsection (e)(1)(B).

‘‘(i) POST-ELIGIBILITY TREATMENT OF INCOME.—A State may

provide for post-eligibility treatment of income for individuals

enrolled in PACE programs under this section in the same manner

as a State treats post-eligibility income for individuals receiving

services under a waiver under section 1915(c).

‘‘(j) MISCELLANEOUS PROVISIONS.—Nothing in this section or

section 1894 shall be construed as preventing a PACE provider

from entering into contracts with other governmental or nongovernmental payers for the care of PACE program eligible individuals

who are not eligible for benefits under part A, or enrolled under

part B, of title XVIII or eligible for medical assistance under this

title.’’.

(b) CONFORMING AMENDMENTS.—
H. R. 2015—299

(1) Section 1924(a)(5) (42 U.S.C. 1396r–5(a)(5)) is amended—

(A) in the heading, by striking ‘‘FROM ORGANIZATIONS

RECEIVING CERTAIN WAIVERS’’ and inserting ‘‘UNDER PACE

PROGRAMS’’; and

(B) by striking ‘‘from any organization’’ and all that

follows and inserting ‘‘under a PACE demonstration waiver

program (as defined in section 1934(a)(7)) or under a PACE

program under section 1934 or 1894.’’.

(2) Section 1903(f)(4)(C) (42 U.S.C. 1396b(f)(4)(C)) is amended by inserting ‘‘or who is a PACE program eligible individual

enrolled in a PACE program under section 1934,’’ after ‘‘section

1902(a)(10)(A),’’.

SEC. 4803. EFFECTIVE DATE; TRANSITION.

(a) TIMELY ISSUANCE OF REGULATIONS; EFFECTIVE DATE.—The

Secretary of Health and Human Services shall promulgate regulations to carry out this subtitle in a timely manner. Such regulations

shall be designed so that entities may establish and operate PACE

programs under sections 1894 and 1934 of the Social Security

Act (as added by sections 4801 and 4802 of this subtitle) for periods

beginning not later than 1 year after the date of the enactment

of this Act.

(b) EXPANSION AND TRANSITION FOR PACE DEMONSTRATION

PROJECT WAIVERS.—

(1) EXPANSION IN CURRENT NUMBER AND EXTENSION OF

DEMONSTRATION PROJECTS.—Section 9412(b) of the Omnibus

Budget Reconciliation Act of 1986, as amended by section

4118(g) of the Omnibus Budget Reconciliation Act of 1987,

is amended—

(A) in paragraph (1), by inserting before the period

at the end the following: ‘‘, except that the Secretary shall

grant waivers of such requirements to up to the applicable

numerical limitation specified in sections 1894(e)(1)(B) and

1934(e)(1)(B) of the Social Security Act’’; and

(B) in paragraph (2)—

(i) in subparagraph (A), by striking ‘‘, including

permitting the organization to assume progressively

(over the initial 3-year period of the waiver) the full

financial risk’’; and

(ii) in subparagraph (C), by adding at the end

the following: ‘‘In granting further extensions, an

organization shall not be required to provide for reporting of information which is only required because of

the demonstration nature of the project.’’.

(2) ELIMINATION OF REPLICATION REQUIREMENT.—Section

9412(b)(2)(B) of such Act, as so amended, shall not apply to

waivers granted under such section after the date of the enactment of this Act.

(3) TIMELY CONSIDERATION OF APPLICATIONS.—In considering an application for waivers under such section before the

effective date of the repeals under subsection (d), subject to

the numerical limitation under the amendment made by paragraph (1), the application shall be deemed approved unless

the Secretary of Health and Human Services, within 90 days

after the date of its submission to the Secretary, either denies

such request in writing or informs the applicant in writing
H. R. 2015—300

with respect to any additional information which is needed

in order to make a final determination with respect to the

application. After the date the Secretary receives such additional information, the application shall be deemed approved

unless the Secretary, within 90 days of such date, denies such

request.

(c) PRIORITY AND SPECIAL CONSIDERATION IN APPLICATION.—

During the 3-year period beginning on the date of the enactment

of this Act:

(1) PROVIDER STATUS.—The Secretary of Health and Human

Services shall give priority in processing applications of entities

to qualify as PACE programs under section 1894 or 1934 of

the Social Security Act—

(A) first, to entities that are operating a PACE demonstration waiver program (as defined in sections

1894(a)(7) and 1934(a)(7) of such Act); and

(B) then to entities that have applied to operate such

a program as of May 1, 1997.

(2) NEW WAIVERS.—The Secretary shall give priority, in

the awarding of additional waivers under section 9412(b) of

the Omnibus Budget Reconciliation Act of 1986—

(A) to any entities that have applied for such waivers

under such section as of May 1, 1997; and

(B) to any entity that, as of May 1, 1997, has formally

contracted with a State to provide services for which payment is made on a capitated basis with an understanding

that the entity was seeking to become a PACE provider.

(3) SPECIAL CONSIDERATION.—The Secretary shall give special consideration, in the processing of applications described

in paragraph (1) and the awarding of waivers described in

paragraph (2), to an entity which as of May 1, 1997, through

formal activities (such as entering into contracts for feasibility

studies) has indicated a specific intent to become a PACE

provider.

(d) REPEAL OF CURRENT PACE DEMONSTRATION PROJECT

WAIVER AUTHORITY.—

(1) IN GENERAL.—Subject to paragraph (2), the following

provisions of law are repealed:

(A) Section 603(c) of the Social Security Amendments

of 1983 (Public Law 98–21).

(B) Section 9220 of the Consolidated Omnibus Budget

Reconciliation Act of 1985 (Public Law 99–272).

(C) Section 9412(b) of the Omnibus Budget Reconciliation Act of 1986 (Public Law 99–509).

(2) DELAY IN APPLICATION TO CURRENT WAIVERS.—

(A) IN GENERAL.—Subject to subparagraph (B), in the

case of waivers granted with respect to a PACE program

before the initial effective date of regulations described

in subsection (a), the repeals made by paragraph (1) shall

not apply until the end of a transition period (of up to

24 months) that begins on the initial effective date of

such regulations, and that allows sufficient time for an

orderly transition from demonstration project authority to

general authority provided under the amendments made

by this subtitle.
H. R. 2015—301

(B) STATE OPTION TO SEEK EXTENSION OF CURRENT

PERIOD.—A State may elect to maintain the PACE programs which (as of the date of the enactment of this Act)

were operating in the State under the authority described

in paragraph (1) until a date (specified by the State) that

is not later than 3 years after the initial effective date

of regulations described in subsection (a). If a State makes

such an election, the repeals made by paragraph (1) shall

not apply to the programs until the date so specified,

but only so long as such programs continue to operate

under the same terms and conditions as apply to such

programs as of the date of the enactment of this Act,

and subparagraph (A) shall not apply to such programs.

SEC. 4804. STUDY AND REPORTS.

(a) STUDY.—

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

Services (in close consultation with State administering agencies, as defined in sections 1894(a)(8) and 1934(a)(8) of the

Social Security Act) shall conduct a study of the quality and

cost of providing PACE program services under the medicare

and medicaid programs under the amendments made by this

subtitle.

(2) STUDY OF PRIVATE, FOR-PROFIT PROVIDERS.—Such study

shall specifically compare the costs, quality, and access to services by entities that are private, for-profit entities operating

under demonstration projects waivers granted under sections

1894(h) and 1934(h) of the Social Security Act with the costs,

quality, and access to services of other PACE providers.

(b) REPORT.—

(1) IN GENERAL.—Not later than 4 years after the date

of the enactment of this Act, the Secretary shall provide for

a report to Congress on the impact of such amendments on

quality and cost of services. The Secretary shall include in

such report such recommendations for changes in the operation

of such amendments as the Secretary deems appropriate.

(2) TREATMENT OF PRIVATE, FOR-PROFIT PROVIDERS.—The

report shall include specific findings on whether any of the

following findings is true:

(A) The number of covered lives enrolled with entities

operating under demonstration project waivers under sections 1894(h) and 1934(h) of the Social Security Act is

fewer than 800 (or such lesser number as the Secretary

may find statistically sufficient to make determinations

respecting findings described in the succeeding subparagraphs).

(B) The population enrolled with such entities is less

frail than the population enrolled with other PACE providers.

(C) Access to or quality of care for individuals enrolled

with such entities is lower than such access or quality

for individuals enrolled with other PACE providers.

(D) The application of such section has resulted in

an increase in expenditures under the medicare or medicaid

programs above the expenditures that would have been

made if such section did not apply.
H. R. 2015—302

(c) INFORMATION INCLUDED IN ANNUAL RECOMMENDATIONS.—

The Medicare Payment Advisory Commission shall include in its

annual report under section 1805(b)(1)(B) of the Social Security

Act recommendations on the methodology and level of payments

made to PACE providers under sections 1894(d) and 1934(d) of

such Act and on the treatment of private, for-profit entities as

PACE providers.

Subtitle J—State Children’s Health

Insurance Program

CHAPTER 1—STATE CHILDREN’S HEALTH INSURANCE

PROGRAM

SEC. 4901. ESTABLISHMENT OF PROGRAM.

(a) ESTABLISHMENT.—The Social Security Act is amended by

adding at the end the following new title:

‘‘TITLE XXI—STATE CHILDREN’S HEALTH INSURANCE

PROGRAM

‘‘SEC. 2101. PURPOSE; STATE CHILD HEALTH PLANS.

‘‘(a) PURPOSE.—The purpose of this title is to provide funds

to States to enable them to initiate and expand the provision

of child health assistance to uninsured, low-income children in

an effective and efficient manner that is coordinated with other

sources of health benefits coverage for children. Such assistance

shall be provided primarily for obtaining health benefits coverage

through—

‘‘(1) obtaining coverage that meets the requirements of

section 2103, or

‘‘(2) providing benefits under the State’s medicaid plan

under title XIX,

or a combination of both.

‘‘(b) STATE CHILD HEALTH PLAN REQUIRED.—A State is not

eligible for payment under section 2105 unless the State has submitted to the Secretary under section 2106 a plan that—

‘‘(1) sets forth how the State intends to use the funds

provided under this title to provide child health assistance

to needy children consistent with the provisions of this title,

and

‘‘(2) has been approved under section 2106.

‘‘(c) STATE ENTITLEMENT.—This title constitutes budget authority in advance of appropriations Acts and represents the obligation

of the Federal Government to provide for the payment to States

of amounts provided under section 2104.

‘‘(d) EFFECTIVE DATE.—No State is eligible for payments under

section 2105 for child health assistance for coverage provided for

periods beginning before October 1, 1997.

‘‘SEC. 2102. GENERAL CONTENTS OF STATE CHILD HEALTH PLAN;

ELIGIBILITY; OUTREACH.

‘‘(a) GENERAL BACKGROUND AND DESCRIPTION.—A State child

health plan shall include a description, consistent with the requirements of this title, of—
H. R. 2015—303

‘‘(1) the extent to which, and manner in which, children

in the State, including targeted low-income children and other

classes of children classified by income and other relevant factors, currently have creditable health coverage (as defined in

section 2110(c)(2));

‘‘(2) current State efforts to provide or obtain creditable

health coverage for uncovered children, including the steps

the State is taking to identify and enroll all uncovered children

who are eligible to participate in public health insurance programs and health insurance programs that involve public-private partnerships;

‘‘(3) how the plan is designed to be coordinated with such

efforts to increase coverage of children under creditable health

coverage;

‘‘(4) the child health assistance provided under the plan

for targeted low-income children, including the proposed methods of delivery, and utilization control systems;

‘‘(5) eligibility standards consistent with subsection (b);

‘‘(6) outreach activities consistent with subsection (c); and

‘‘(7) methods (including monitoring) used—

‘‘(A) to assure the quality and appropriateness of care,

particularly with respect to well-baby care, well-child care,

and immunizations provided under the plan, and

‘‘(B) to assure access to covered services, including

emergency services.

‘‘(b) GENERAL DESCRIPTION OF ELIGIBILITY STANDARDS AND

METHODOLOGY.—

‘‘(1) ELIGIBILITY STANDARDS.— ‘‘(A) IN GENERAL.—The plan shall include a description

of the standards used to determine the eligibility of targeted low-income children for child health assistance under

the plan. Such standards may include (to the extent consistent with this title) those relating to the geographic areas

to be served by the plan, age, income and resources (including any standards relating to spenddowns and disposition

of resources), residency, disability status (so long as any

standard relating to such status does not restrict eligibility), access to or coverage under other health coverage,

and duration of eligibility. Such standards may not

discriminate on the basis of diagnosis.

‘‘(B) LIMITATIONS ON ELIGIBILITY STANDARDS.—Such

eligibility standards—

‘‘(i) shall, within any defined group of covered targeted low-income children, not cover such children with

higher family income without covering children with

a lower family income, and

‘‘(ii) may not deny eligibility based on a child having a preexisting medical condition.

‘‘(2) METHODOLOGY.—The plan shall include a description

of methods of establishing and continuing eligibility and enrollment.

‘‘(3) ELIGIBILITY SCREENING; COORDINATION WITH OTHER

HEALTH COVERAGE PROGRAMS.—The plan shall include a

description of procedures to be used to ensure—

‘‘(A) through both intake and followup screening, that

only targeted low-income children are furnished child

health assistance under the State child health plan;
H. R. 2015—304

‘‘(B) that children found through the screening to be

eligible for medical assistance under the State medicaid

plan under title XIX are enrolled for such assistance under

such plan;

‘‘(C) that the insurance provided under the State child

health plan does not substitute for coverage under group

health plans;

‘‘(D) the provision of child health assistance to targeted

low-income children in the State who are Indians (as

defined in section 4(c) of the Indian Health Care Improvement Act, 25 U.S.C. 1603(c)); and

‘‘(E) coordination with other public and private programs providing creditable coverage for low-income children.

‘‘(4) NONENTITLEMENT.—Nothing in this title shall be construed as providing an individual with an entitlement to child

health assistance under a State child health plan.

‘‘(c) OUTREACH AND COORDINATION.—A State child health plan

shall include a description of the procedures to be used by the

State to accomplish the following:

‘‘(1) OUTREACH.—Outreach to families of children likely

to be eligible for child health assistance under the plan or

under other public or private health coverage programs to

inform these families of the availability of, and to assist them

in enrolling their children in, such a program.

‘‘(2) COORDINATION WITH OTHER HEALTH INSURANCE PROGRAMS.—Coordination of the administration of the State program under this title with other public and private health

insurance programs.

‘‘SEC. 2103. COVERAGE REQUIREMENTS FOR CHILDREN’S HEALTH

INSURANCE.

‘‘(a) REQUIRED SCOPE OF HEALTH INSURANCE COVERAGE.—The

child health assistance provided to a targeted low-income child

under the plan in the form described in paragraph (1) of section

2101(a) shall consist, consistent with subsection (c)(5), of any of

the following:

‘‘(1) BENCHMARK COVERAGE.—Health benefits coverage that

is equivalent to the benefits coverage in a benchmark benefit

package described in subsection (b).

‘‘(2) BENCHMARK-EQUIVALENT COVERAGE.—Health benefits

coverage that meets the following requirements:

‘‘(A) INCLUSION OF BASIC SERVICES.—The coverage

includes benefits for items and services within each of

the categories of basic services described in subsection

(c)(1).

‘‘(B) AGGREGATE ACTUARIAL VALUE EQUIVALENT TO

BENCHMARK PACKAGE.—The coverage has an aggregate

actuarial value that is at least actuarially equivalent to

one of the benchmark benefit packages.

‘‘(C) SUBSTANTIAL ACTUARIAL VALUE FOR ADDITIONAL

SERVICES INCLUDED IN BENCHMARK PACKAGE.—With respect

to each of the categories of additional services described

in subsection (c)(2) for which coverage is provided under

the benchmark benefit package used under subparagraph

(B), the coverage has an actuarial value that is equal
H. R. 2015—305

to at least 75 percent of the actuarial value of the coverage

of that category of services in such package.

‘‘(3) EXISTING COMPREHENSIVE STATE-BASED COVERAGE.—

Health benefits coverage under an existing comprehensive

State-based program, described in subsection (d)(1).

‘‘(4) SECRETARY-APPROVED COVERAGE.—Any other health

benefits coverage that the Secretary determines, upon application by a State, provides appropriate coverage for the population

of targeted low-income children proposed to be provided such

coverage.

‘‘(b) BENCHMARK BENEFIT PACKAGES.—The benchmark benefit

packages are as follows:

‘‘(1) FEHBP-EQUIVALENT CHILDREN’S HEALTH INSURANCE

COVERAGE.—The standard Blue Cross/Blue Shield preferred

provider option service benefit plan, described in and offered

under section 8903(1) of title 5, United States Code.

‘‘(2) STATE EMPLOYEE COVERAGE.—A health benefits coverage plan that is offered and generally available to State

employees in the State involved.

‘‘(3) COVERAGE OFFERED THROUGH HMO.—The health insurance coverage plan that—

‘‘(A) is offered by a health maintenance organization

(as defined in section 2791(b)(3) of the Public Health Service Act), and

‘‘(B) has the largest insured commercial, non-medicaid

enrollment of covered lives of such coverage plans offered

by such a health maintenance organization in the State

involved.

‘‘(c) CATEGORIES OF SERVICES; DETERMINATION OF ACTUARIAL

VALUE OF COVERAGE.—

‘‘(1) CATEGORIES OF BASIC SERVICES.—For purposes of this

section, the categories of basic services described in this paragraph are as follows:

‘‘(A) Inpatient and outpatient hospital services.

‘‘(B) Physicians’ surgical and medical services.

‘‘(C) Laboratory and x-ray services.

‘‘(D) Well-baby and well-child care, including ageappropriate immunizations.

‘‘(2) CATEGORIES OF ADDITIONAL SERVICES.—For purposes

of this section, the categories of additional services described

in this paragraph are as follows:

‘‘(A) Coverage of prescription drugs.

‘‘(B) Mental health services.

‘‘(C) Vision services.

‘‘(D) Hearing services.

‘‘(3) TREATMENT OF OTHER CATEGORIES.—Nothing in this

subsection shall be construed as preventing a State child health

plan from providing coverage of benefits that are not within

a category of services described in paragraph (1) or (2).

‘‘(4) DETERMINATION OF ACTUARIAL VALUE.—The actuarial

value of coverage of benchmark benefit packages, coverage

offered under the State child health plan, and coverage of

any categories of additional services under benchmark benefit

packages and under coverage offered by such a plan, shall

be set forth in an actuarial opinion in an actuarial report

that has been prepared—
H. R. 2015—306

‘‘(A) by an individual who is a member of the American

Academy of Actuaries;

‘‘(B) using generally accepted actuarial principles and

methodologies;

‘‘(C) using a standardized set of utilization and price

factors;

‘‘(D) using a standardized population that is representative of privately insured children of the age of children

who are expected to be covered under the State child health

plan;

‘‘(E) applying the same principles and factors in

comparing the value of different coverage (or categories

of services);

‘‘(F) without taking into account any differences in

coverage based on the method of delivery or means of

cost control or utilization used; and

‘‘(G) taking into account the ability of a State to reduce

benefits by taking into account the increase in actuarial

value of benefits coverage offered under the State child

health plan that results from the limitations on cost sharing

under such coverage.

The actuary preparing the opinion shall select and specify

in the memorandum the standardized set and population to

be used under subparagraphs (C) and (D).

‘‘(5) CONSTRUCTION ON PROHIBITED COVERAGE.—Nothing in

this section shall be construed as requiring any health benefits

coverage offered under the plan to provide coverage for items

or services for which payment is prohibited under this title,

notwithstanding that any benchmark benefit package includes

coverage for such an item or service.

‘‘(d) DESCRIPTION OF EXISTING COMPREHENSIVE STATE-BASED

COVERAGE.—

‘‘(1) IN GENERAL.—A program described in this paragraph

is a child health coverage program that—

‘‘(A) includes coverage of a range of benefits;

‘‘(B) is administered or overseen by the State and

receives funds from the State;

‘‘(C) is offered in New York, Florida, or Pennsylvania;

and

‘‘(D) was offered as of the date of the enactment of

this title.

‘‘(2) MODIFICATIONS.—A State may modify a program

described in paragraph (1) from time to time so long as it

continues to meet the requirement of subparagraph (A) and

does not reduce the actuarial value of the coverage under

the program below the lower of—

‘‘(A) the actuarial value of the coverage under the

program as of the date of the enactment of this title,

or

‘‘(B) the actuarial value described in subsection

(a)(2)(B),

evaluated as of the time of the modification.

‘‘(e) COST-SHARING.—

‘‘(1) DESCRIPTION; GENERAL CONDITIONS.—

‘‘(A) DESCRIPTION.—A State child health plan shall

include a description, consistent with this subsection, of

the amount (if any) of premiums, deductibles, coinsurance,
H. R. 2015—307

and other cost sharing imposed. Any such charges shall

be imposed pursuant to a public schedule.

‘‘(B) PROTECTION FOR LOWER INCOME CHILDREN.—The

State child health plan may only vary premiums,

deductibles, coinsurance, and other cost sharing based on

the family income of targeted low-income children in a

manner that does not favor children from families with

higher income over children from families with lower

income.

‘‘(2) NO COST SHARING ON BENEFITS FOR PREVENTIVE SERVICES.—The State child health plan may not impose deductibles,

coinsurance, or other cost sharing with respect to benefits for

services within the category of services described in subsection

(c)(1)(D).

‘‘(3) LIMITATIONS ON PREMIUMS AND COST-SHARING.—

‘‘(A) CHILDREN IN FAMILIES WITH INCOME BELOW 150

PERCENT OF POVERTY LINE.—In the case of a targeted lowincome child whose family income is at or below 150 percent

of the poverty line, the State child health plan may not

impose—

‘‘(i) an enrollment fee, premium, or similar charge

that exceeds the maximum monthly charge permitted

consistent with standards established to carry out section 1916(b)(1) (with respect to individuals described

in such section); and

‘‘(ii) a deductible, cost sharing, or similar charge

that exceeds an amount that is nominal (as determined

consistent with regulations referred to in section

1916(a)(3), with such appropriate adjustment for inflation or other reasons as the Secretary determines to

be reasonable).

‘‘(B) OTHER CHILDREN.—For children not described in

subparagraph (A), subject to paragraphs (1)(B) and (2),

any premiums, deductibles, cost sharing or similar charges

imposed under the State child health plan may be imposed

on a sliding scale related to income, except that the total

annual aggregate cost-sharing with respect to all targeted

low-income children in a family under this title may not

exceed 5 percent of such family’s income for the year

involved.

‘‘(4) RELATION TO MEDICAID REQUIREMENTS.—Nothing in

this subsection shall be construed as affecting the rules relating

to the use of enrollment fees, premiums, deductions, cost sharing, and similar charges in the case of targeted low-income

children who are provided child health assistance in the form

of coverage under a medicaid program under section 2101(a)(2).

‘‘(f) APPLICATION OF CERTAIN REQUIREMENTS.—

‘‘(1) RESTRICTION ON APPLICATION OF PREEXISTING CONDITION EXCLUSIONS.—

‘‘(A) IN GENERAL.—Subject to subparagraph (B), the

State child health plan shall not permit the imposition

of any preexisting condition exclusion for covered benefits

under the plan.

‘‘(B) GROUP HEALTH PLANS AND GROUP HEALTH INSURANCE COVERAGE.—If the State child health plan provides

for benefits through payment for, or a contract with, a

group health plan or group health insurance coverage, the
H. R. 2015—308

plan may permit the imposition of a preexisting condition

exclusion but only insofar as it is permitted under the

applicable provisions of part 7 of subtitle B of title I of

the Employee Retirement Income Security Act of 1974 and

title XXVII of the Public Health Service Act.

‘‘(2) COMPLIANCE WITH OTHER REQUIREMENTS.—Coverage

offered under this section shall comply with the requirements

of subpart 2 of part A of title XXVII of the Public Health

Service Act insofar as such requirements apply with respect

to a health insurance issuer that offers group health insurance

coverage.

‘‘SEC. 2104. ALLOTMENTS.

‘‘(a) APPROPRIATION; TOTAL ALLOTMENT.—For the purpose of

providing allotments to States under this section, there is appropriated, out of any money in the Treasury not otherwise appropriated—

‘‘(1) for fiscal year 1998, $4,275,000,000;

‘‘(2) for fiscal year 1999, $4,275,000,000;

‘‘(3) for fiscal year 2000, $4,275,000,000;

‘‘(4) for fiscal year 2001, $4,275,000,000;

‘‘(5) for fiscal year 2002, $3,150,000,000;

‘‘(6) for fiscal year 2003, $3,150,000,000;

‘‘(7) for fiscal year 2004, $3,150,000,000;

‘‘(8) for fiscal year 2005, $4,050,000,000;

‘‘(9) for fiscal year 2006, $4,050,000,000; and

‘‘(10) for fiscal year 2007, $5,000,000,000.

‘‘(b) ALLOTMENTS TO 50 STATES AND DISTRICT OF COLUMBIA.— ‘‘(1) IN GENERAL.—Subject to paragraph (4) and subsection

(d), of the amount available for allotment under subsection

(a) for a fiscal year, reduced by the amount of allotments

made under subsection (c) for the fiscal year, the Secretary

shall allot to each State (other than a State described in such

subsection) with a State child health plan approved under

this title the same proportion as the ratio of—

‘‘(A) the product of (i) the number of children described

in paragraph (2) for the State for the fiscal year and

(ii) the State cost factor for that State (established under

paragraph (3)); to

‘‘(B) the sum of the products computed under subparagraph (A).

‘‘(2) NUMBER OF CHILDREN.— ‘‘(A) IN GENERAL.—The number of children described

in this paragraph for a State for—

‘‘(i) each of fiscal years 1998 through 2000 is equal

to the number of low-income children in the State

with no health insurance coverage for the fiscal year;

‘‘(ii) fiscal year 2001 is equal to—

‘‘(I) 75 percent of the number of low-income

children in the State for the fiscal year with no

health insurance coverage, plus

‘‘(II) 25 percent of the number of low-income

children in the State for the fiscal year; and

‘‘(iii) each succeeding fiscal year is equal to—

‘‘(I) 50 percent of the number of low-income

children in the State for the fiscal year with no

health insurance coverage, plus
H. R. 2015—309

‘‘(II) 50 percent of the number of low-income

children in the State for the fiscal year.

‘‘(B) DETERMINATION OF NUMBER OF CHILDREN.—For

purposes of subparagraph (A), a determination of the number of low-income children (and of such children who have

no health insurance coverage) for a State for a fiscal year

shall be made on the basis of the arithmetic average of

the number of such children, as reported and defined in

the 3 most recent March supplements to the Current Population Survey of the Bureau of the Census before the beginning of the fiscal year.

‘‘(3) ADJUSTMENT FOR GEOGRAPHIC VARIATIONS IN HEALTH

COSTS.—

‘‘(A) IN GENERAL.—For purposes of paragraph (1)(A)(ii),

the ‘State cost factor’ for a State for a fiscal year equal

to the sum of—

‘‘(i) 0.15, and

‘‘(ii) 0.85 multiplied by the ratio of—

‘‘(I) the annual average wages per employee

for the State for such year (as determined under

subparagraph (B)), to

‘‘(II) the annual average wages per employee

for the 50 States and the District of Columbia.

‘‘(B) ANNUAL AVERAGE WAGES PER EMPLOYEE.—For purposes of subparagraph (A), the ‘annual average wages per

employee’ for a State, or for all the States. for a fiscal

year is equal to the average of the annual wages per

employee for the State or for the 50 States and the District

of Columbia for employees in the health services industry

(SIC code 8000), as reported by the Bureau of Labor Statistics of the Department of Labor for each of the most recent

3 years before the beginning of the fiscal year involved.

‘‘(4) FLOOR FOR STATES.—Subject to paragraph (5), in no

case shall the amount of the allotment under this subsection

for one of the 50 States or the District of Columbia for a

year be less than $2,000,000. To the extent that the application

of the previous sentence results in an increase in the allotment

to a State above the amount otherwise provided, the allotments

for the other States and the District of Columbia under this

subsection shall be reduced in a pro rata manner (but not

below $2,000,000) so that the total of such allotments in a

fiscal year does not exceed the amount otherwise provided

for allotment under paragraph (1) for that fiscal year.

‘‘(c) ALLOTMENTS TO TERRITORIES.— ‘‘(1) IN GENERAL.—Of the amount available for allotment

under subsection (a) for a fiscal year, subject to subsection

(d), the Secretary shall allot 0.25 percent among each of the

commonwealths and territories described in paragraph (3) in

the same proportion as the percentage specified in paragraph

(2) for such commonwealth or territory bears to the sum of

such percentages for all such commonwealths or territories

so described.

‘‘(2) PERCENTAGE.—The percentage specified in this paragraph for—

‘‘(A) Puerto Rico is 91.6 percent,

‘‘(B) Guam is 3.5 percent,

‘‘(C) Virgin Islands is 2.6 percent,
H. R. 2015—310

‘‘(D) American Samoa is 1.2 percent, and

‘‘(E) the Northern Mariana Islands is 1.1 percent.

‘‘(3) COMMONWEALTHS AND TERRITORIES.—A commonwealth

or territory described in this paragraph is any of the following

if it has a State child health plan approved under this title:

‘‘(A) Puerto Rico.

‘‘(B) Guam.

‘‘(C) the Virgin Islands.

‘‘(D) American Samoa.

‘‘(E) the Northern Mariana Islands.

‘‘(d) CERTAIN MEDICAID EXPENDITURES COUNTED AGAINST

INDIVIDUAL STATE ALLOTMENTS.—The amount of the allotment

otherwise provided to a State under subsection (b) or (c) for a

fiscal year shall be reduced by the sum of—

‘‘(1) the amount (if any) of the payments made to that

State under section 1903(a) for calendar quarters during such

fiscal year that is attributable to the provision of medical assistance to a child during a presumptive eligibility period under

section 1920A, and

‘‘(2) the amount of payments under such section during

such period that is attributable to the provision of medical

assistance to a child for which payment is made under section

1903(a)(1) on the basis of an enhanced FMAP under section

1905(b).

‘‘(e) 3-YEAR AVAILABILITY OF AMOUNTS ALLOTTED.—Amounts

allotted to a State pursuant to this section for a fiscal year shall

remain available for expenditure by the State through the end

of the second succeeding fiscal year; except that amounts reallotted

to a State under subsection (f) shall be available for expenditure

by the State through the end of the fiscal year in which they

are reallotted.

‘‘(f) PROCEDURE FOR REDISTRIBUTION OF UNUSED ALLOTMENTS.—The Secretary shall determine an appropriate procedure

for redistribution of allotments from States that were provided

allotments under this section for a fiscal year but that do not

expend all of the amount of such allotments during the period

in which such allotments are available for expenditure under subsection (e), to States that have fully expended the amount of their

allotments under this section.

‘‘SEC. 2105. PAYMENTS TO STATES.

‘‘(a) IN GENERAL.—Subject to the succeeding provisions of this

section, the Secretary shall pay to each State with a plan approved

under this title, from its allotment under section 2104 (taking

into account any adjustment under section 2104(d)), an amount

for each quarter equal to the enhanced FMAP of expenditures

in the quarter—

‘‘(1) for child health assistance under the plan for targeted

low-income children in the form of providing health benefits

coverage that meets the requirements of section 2103; and

‘‘(2) only to the extent permitted consistent with subsection

(c)—

‘‘(A) for payment for other child health assistance for

targeted low-income children;
H. R. 2015—311

‘‘(B) for expenditures for health services initiatives

under the plan for improving the health of children (including targeted low-income children and other low-income children);

‘‘(C) for expenditures for outreach activities as provided

in section 2102(c)(1) under the plan; and

‘‘(D) for other reasonable costs incurred by the State

to administer the plan.

‘‘(b) ENHANCED FMAP.—For purposes of subsection (a), the

‘enhanced FMAP’, for a State for a fiscal year, is equal to the

Federal medical assistance percentage (as defined in the first sentence of section 1905(b)) for the State increased by a number of

percentage points equal to 30 percent of the number of percentage

points by which (1) such Federal medical assistance percentage

for the State, is less than (2) 100 percent; but in no case shall

the enhanced FMAP for a State exceed 85 percent.

‘‘(c) LIMITATION ON CERTAIN PAYMENTS FOR CERTAIN EXPENDITURES.—

‘‘(1) GENERAL LIMITATIONS.—Funds provided to a State

under this title shall only be used to carry out the purposes

of this title (as described in section 2101), and any health

insurance coverage provided with such funds may include coverage of abortion only if necessary to save the life of the

mother or if the pregnancy is the result of an act of rape

or incest.

‘‘(2) LIMITATION ON EXPENDITURES NOT USED FOR MEDICAID

OR HEALTH INSURANCE ASSISTANCE.—

‘‘(A) IN GENERAL.—Except as provided in this paragraph, payment shall not be made under subsection (a)

for expenditures for items described in subsection (a) (other

than paragraph (1)) for a quarter in a fiscal year to the

extent the total of such expenditures exceeds 10 percent

of the sum of—

‘‘(i) the total Federal payments made under subsection (a) for such quarter in the fiscal year, and

‘‘(ii) the total Federal payments made under section 1903(a)(1) based on an enhanced FMAP described

in section 1905(u)(2) for such quarter.

‘‘(B) WAIVER AUTHORIZED FOR COST-EFFECTIVE ALTER- NATIVE.—The limitation under subparagraph (A) on

expenditures for items described in subsection (a)(2) shall

not apply to the extent that a State establishes to the

satisfaction of the Secretary that—

‘‘(i) coverage provided to targeted low-income children through such expenditures meets the requirements of section 2103;

‘‘(ii) the cost of such coverage is not greater, on

an average per child basis, than the cost of coverage

that would otherwise be provided under section 2103;

and

‘‘(iii) such coverage is provided through the use

of a community-based health delivery system, such

as through contracts with health centers receiving

funds under section 330 of the Public Health Service

Act or with hospitals such as those that receive disproportionate share payment adjustments under section 1886(d)(5)(F) or 1923.
H. R. 2015—312

‘‘(3) WAIVER FOR PURCHASE OF FAMILY COVERAGE.—Payment may be made to a State under subsection (a)(1) for the

purchase of family coverage under a group health plan or

health insurance coverage that includes coverage of targeted

low-income children only if the State establishes to the satisfaction of the Secretary that—

‘‘(A) purchase of such coverage is cost-effective relative

to the amounts that the State would have paid to obtain

comparable coverage only of the targeted low-income children involved, and

‘‘(B) such coverage shall not be provided if it would

otherwise substitute for health insurance coverage that

would be provided to such children but for the purchase

of family coverage.

‘‘(4) USE OF NON-FEDERAL FUNDS FOR STATE MATCHING

REQUIREMENT.—Amounts provided by the Federal Government,

or services assisted or subsidized to any significant extent

by the Federal Government, may not be included in determining

the amount of non-Federal contributions required under subsection (a).

‘‘(5) OFFSET OF RECEIPTS ATTRIBUTABLE TO PREMIUMS AND

OTHER COST-SHARING.—For purposes of subsection (a), the

amount of the expenditures under the plan shall be reduced

by the amount of any premiums and other cost-sharing received

by the State.

‘‘(6) PREVENTION OF DUPLICATIVE PAYMENTS.—

‘‘(A) OTHER HEALTH PLANS.—No payment shall be made

to a State under this section for expenditures for child

health assistance provided for a targeted low-income child

under its plan to the extent that a private insurer (as

defined by the Secretary by regulation and including a

group health plan (as defined in section 607(1) of the

Employee Retirement Income Security Act of 1974), a service benefit plan, and a health maintenance organization)

would have been obligated to provide such assistance but

for a provision of its insurance contract which has the

effect of limiting or excluding such obligation because the

individual is eligible for or is provided child health assistance under the plan.

‘‘(B) OTHER FEDERAL GOVERNMENTAL PROGRAMS.—

Except as otherwise provided by law, no payment shall

be made to a State under this section for expenditures

for child health assistance provided for a targeted lowincome child under its plan to the extent that payment

has been made or can reasonably be expected to be made

promptly (as determined in accordance with regulations)

under any other federally operated or financed health care

insurance program, other than an insurance program operated or financed by the Indian Health Service, as identified

by the Secretary. For purposes of this paragraph, rules

similar to the rules for overpayments under section

1903(d)(2) shall apply.

‘‘(7) LIMITATION ON PAYMENT FOR ABORTIONS.—

‘‘(A) IN GENERAL.—Payment shall not be made to a

State under this section for any amount expended under

the State plan to pay for any abortion or to assist in
H. R. 2015—313

the purchase, in whole or in part, of health benefit coverage

that includes coverage of abortion.

‘‘(B) EXCEPTION.—Subparagraph (A) shall not apply

to an abortion only if necessary to save the life of the

mother or if the pregnancy is the result of an act of rape

or incest.

‘‘(C) RULE OF CONSTRUCTION.—Nothing in this section

shall be construed as affecting the expenditure by a State,

locality, or private person or entity of State, local, or private

funds (other than funds expended under the State plan)

for any abortion or for health benefits coverage that

includes coverage of abortion.

‘‘(d) MAINTENANCE OF EFFORT.—

‘‘(1) IN MEDICAID ELIGIBILITY STANDARDS.—No payment may

be made under subsection (a) with respect to child health

assistance provided under a State child health plan if the

State adopts income and resource standards and methodologies

for purposes of determining a child’s eligibility for medical

assistance under the State plan under title XIX that are more

restrictive than those applied as of June 1, 1997.

‘‘(2) IN AMOUNTS OF PAYMENT EXPENDED FOR CERTAIN

STATE-FUNDED HEALTH INSURANCE PROGRAMS FOR CHILDREN.—

‘‘(A) IN GENERAL.—The amount of the allotment for

a State in a fiscal year (beginning with fiscal year 1999)

shall be reduced by the amount by which—

‘‘(i) the total of the State children’s health insurance expenditures in the preceding fiscal year, is less

than

‘‘(ii) the total of such expenditures in fiscal year

1996.

‘‘(B) STATE CHILDREN’S HEALTH INSURANCE EXPENDI- TURES.—The term ‘State children’s health insurance

expenditures’ means the following:

‘‘(i) The State share of expenditures under this

title.

‘‘(ii) The State share of expenditures under title

XIX that are attributable to an enhanced FMAP under

section 1905(u).

‘‘(iii) State expenditures under health benefits coverage under an existing comprehensive State-based

program, described section 2103(d).

‘‘(e) ADVANCE PAYMENT; RETROSPECTIVE ADJUSTMENT.—The

Secretary may make payments under this section for each quarter

on the basis of advance estimates of expenditures submitted by

the State and such other investigation as the Secretary may find

necessary, and may reduce or increase the payments as necessary

to adjust for any overpayment or underpayment for prior quarters.

‘‘SEC. 2106. PROCESS FOR SUBMISSION, APPROVAL, AND AMENDMENT

OF STATE CHILD HEALTH PLANS.

‘‘(a) INITIAL PLAN.—

‘‘(1) IN GENERAL.—As a condition of receiving payment

under section 2105, a State shall submit to the Secretary a

State child health plan that meets the applicable requirements

of this title.

‘‘(2) APPROVAL.—Except as the Secretary may provide under

subsection (e), a State plan submitted under paragraph (1)—
H. R. 2015—314

‘‘(A) shall be approved for purposes of this title, and

‘‘(B) shall be effective beginning with a calendar quarter that is specified in the plan, but in no case earlier

than October 1, 1997.

‘‘(b) PLAN AMENDMENTS.—

‘‘(1) IN GENERAL.—A State may amend, in whole or in

part, its State child health plan at any time through transmittal

of a plan amendment.

‘‘(2) APPROVAL.—Except as the Secretary may provide under

subsection (e), an amendment to a State plan submitted under

paragraph (1)—

‘‘(A) shall be approved for purposes of this title, and

‘‘(B) shall be effective as provided in paragraph (3).

‘‘(3) EFFECTIVE DATES FOR AMENDMENTS.—

‘‘(A) IN GENERAL.—Subject to the succeeding provisions

of this paragraph, an amendment to a State plan shall

take effect on one or more effective dates specified in the

amendment.

‘‘(B) AMENDMENTS RELATING TO ELIGIBILITY OR BENEFITS.—

‘‘(i) NOTICE REQUIREMENT.—Any plan amendment

that eliminates or restricts eligibility or benefits under

the plan may not take effect unless the State certifies

that it has provided prior public notice of the change,

in a form and manner provided under applicable State

law.

‘‘(ii) TIMELY TRANSMITTAL.—Any plan amendment

that eliminates or restricts eligibility or benefits under

the plan shall not be effective for longer than a 60-

day period unless the amendment has been transmitted

to the Secretary before the end of such period.

‘‘(C) OTHER AMENDMENTS.—Any plan amendment that

is not described in subparagraph (B) and that becomes

effective in a State fiscal year may not remain in effect

after the end of such fiscal year (or, if later, the end

of the 90-day period on which it becomes effective) unless

the amendment has been transmitted to the Secretary.

‘‘(c) DISAPPROVAL OF PLANS AND PLAN AMENDMENTS.—

‘‘(1) PROMPT REVIEW OF PLAN SUBMITTALS.—The Secretary

shall promptly review State plans and plan amendments

submitted under this section to determine if they substantially

comply with the requirements of this title.

‘‘(2) 90-DAY APPROVAL DEADLINES.—A State plan or plan

amendment is considered approved unless the Secretary notifies

the State in writing, within 90 days after receipt of the plan

or amendment, that the plan or amendment is disapproved

(and the reasons for disapproval) or that specified additional

information is needed.

‘‘(3) CORRECTION.—In the case of a disapproval of a plan

or plan amendment, the Secretary shall provide a State with

a reasonable opportunity for correction before taking financial

sanctions against the State on the basis of such disapproval.

‘‘(d) PROGRAM OPERATION.—

‘‘(1) IN GENERAL.—The State shall conduct the program

in accordance with the plan (and any amendments) approved

under subsection (c) and with the requirements of this title.
H. R. 2015—315

‘‘(2) VIOLATIONS.—The Secretary shall establish a process

for enforcing requirements under this title. Such process shall

provide for the withholding of funds in the case of substantial

noncompliance with such requirements. In the case of an

enforcement action against a State under this paragraph, the

Secretary shall provide a State with a reasonable opportunity

for correction before taking financial sanctions against the State

on the basis of such an action.

‘‘(e) CONTINUED APPROVAL.—An approved State child health

plan shall continue in effect unless and until the State amends

the plan under subsection (b) or the Secretary finds, under subsection (d), substantial noncompliance of the plan with the requirements of this title.

‘‘SEC. 2107. STRATEGIC OBJECTIVES AND PERFORMANCE GOALS; PLAN

ADMINISTRATION.

‘‘(a) STRATEGIC OBJECTIVES AND PERFORMANCE GOALS.—

‘‘(1) DESCRIPTION.—A State child health plan shall include

a description of—

‘‘(A) the strategic objectives,

‘‘(B) the performance goals, and

‘‘(C) the performance measures,

the State has established for providing child health assistance

to targeted low-income children under the plan and otherwise

for maximizing health benefits coverage for other low-income

children and children generally in the State.

‘‘(2) STRATEGIC OBJECTIVES.—Such plan shall identify specific strategic objectives relating to increasing the extent of

creditable health coverage among targeted low-income children

and other low-income children.

‘‘(3) PERFORMANCE GOALS.—Such plan shall specify one

or more performance goals for each such strategic objective

so identified.

‘‘(4) PERFORMANCE MEASURES.—Such plan shall describe

how performance under the plan will be—

‘‘(A) measured through objective, independently verifiable means, and

‘‘(B) compared against performance goals, in order to

determine the State’s performance under this title.

‘‘(b) RECORDS, REPORTS, AUDITS, AND EVALUATION.—

‘‘(1) DATA COLLECTION, RECORDS, AND REPORTS.—A State

child health plan shall include an assurance that the State

will collect the data, maintain the records, and furnish the

reports to the Secretary, at the times and in the standardized

format the Secretary may require in order to enable the Secretary to monitor State program administration and compliance

and to evaluate and compare the effectiveness of State plans

under this title.

‘‘(2) STATE ASSESSMENT AND STUDY.—A State child health

plan shall include a description of the State’s plan for the

annual assessments and reports under section 2108(a) and

the evaluation required by section 2108(b).

‘‘(3) AUDITS.—A State child health plan shall include an

assurance that the State will afford the Secretary access to

any records or information relating to the plan for the purposes

of review or audit.
H. R. 2015—316

‘‘(c) PROGRAM DEVELOPMENT PROCESS.—A State child health

plan shall include a description of the process used to involve

the public in the design and implementation of the plan and the

method for ensuring ongoing public involvement.

‘‘(d) PROGRAM BUDGET.—A State child health plan shall include

a description of the budget for the plan. The description shall

be updated periodically as necessary and shall include details on

the planned use of funds and the sources of the non-Federal share

of plan expenditures, including any requirements for cost-sharing

by beneficiaries.

‘‘(e) APPLICATION OF CERTAIN GENERAL PROVISIONS.—The following sections of this Act shall apply to States under this title

in the same manner as they apply to a State under title XIX:

‘‘(1) TITLE XIX PROVISIONS.—

‘‘(A) Section 1902(a)(4)(C) (relating to conflict of

interest standards).

‘‘(B) Paragraphs (2), (16), and (17) of section 1903(i)

(relating to limitations on payment).

‘‘(C) Section 1903(w) (relating to limitations on provider

taxes and donations).

‘‘(2) TITLE XI PROVISIONS.—

‘‘(A) Section 1115 (relating to waiver authority).

‘‘(B) Section 1116 (relating to administrative and

judicial review), but only insofar as consistent with this

title.

‘‘(C) Section 1124 (relating to disclosure of ownership

and related information).

‘‘(D) Section 1126 (relating to disclosure of information

about certain convicted individuals).

‘‘(E) Section 1128A (relating to civil monetary penalties).

‘‘(F) Section 1128B(d) (relating to criminal penalties

for certain additional charges).

‘‘(G) Section 1132 (relating to periods within which

claims must be filed).

‘‘SEC. 2108. ANNUAL REPORTS; EVALUATIONS.

‘‘(a) ANNUAL REPORT.—The State shall—

‘‘(1) assess the operation of the State plan under this title

in each fiscal year, including the progress made in reducing

the number of uncovered low-income children; and

‘‘(2) report to the Secretary, by January 1 following the

end of the fiscal year, on the result of the assessment.

‘‘(b) STATE EVALUATIONS.— ‘‘(1) IN GENERAL.—By March 31, 2000, each State that

has a State child health plan shall submit to the Secretary

an evaluation that includes each of the following:

‘‘(A) An assessment of the effectiveness of the State

plan in increasing the number of children with creditable

health coverage.

‘‘(B) A description and analysis of the effectiveness

of elements of the State plan, including—

‘‘(i) the characteristics of the children and families

assisted under the State plan including age of the

children, family income, and the assisted child’s access

to or coverage by other health insurance prior to the

State plan and after eligibility for the State plan ends,
H. R. 2015—317

‘‘(ii) the quality of health coverage provided including the types of benefits provided,

‘‘(iii) the amount and level (including payment of

part or all of any premium) of assistance provided

by the State,

‘‘(iv) the service area of the State plan,

‘‘(v) the time limits for coverage of a child under

the State plan,

‘‘(vi) the State’s choice of health benefits coverage

and other methods used for providing child health

assistance, and

‘‘(vii) the sources of non-Federal funding used in

the State plan.

‘‘(C) An assessment of the effectiveness of other public

and private programs in the State in increasing the availability of affordable quality individual and family health

insurance for children.

‘‘(D) A review and assessment of State activities to

coordinate the plan under this title with other public and

private programs providing health care and health care

financing, including medicaid and maternal and child

health services.

‘‘(E) An analysis of changes and trends in the State

that affect the provision of accessible, affordable, quality

health insurance and health care to children.

‘‘(F) A description of any plans the State has for

improving the availability of health insurance and health

care for children.

‘‘(G) Recommendations for improving the program

under this title.

‘‘(H) Any other matters the State and the Secretary

consider appropriate.

‘‘(2) REPORT OF THE SECRETARY.—The Secretary shall submit to Congress and make available to the public by December

31, 2001, a report based on the evaluations submitted by States

under paragraph (1), containing any conclusions and recommendations the Secretary considers appropriate.

‘‘SEC. 2109. MISCELLANEOUS PROVISIONS.

‘‘(a) RELATION TO OTHER LAWS.— ‘‘(1) HIPAA.—Health benefits coverage provided under section 2101(a)(1) (and coverage provided under a waiver under

section 2105(c)(2)(B)) shall be treated as creditable coverage

for purposes of part 7 of subtitle B of title II of the Employee

Retirement Income Security Act of 1974, title XXVII of the

Public Health Service Act, and subtitle K of the Internal Revenue Code of 1986.

‘‘(2) ERISA.—Nothing in this title shall be construed as

affecting or modifying section 514 of the Employee Retirement

Income Security Act of 1974 (29 U.S.C. 1144) with respect

to a group health plan (as defined in section 2791(a)(1) of

the Public Health Service Act (42 U.S.C. 300gg–91(a)(1)).

‘‘SEC. 2110. DEFINITIONS.

‘‘(a) CHILD HEALTH ASSISTANCE.—For purposes of this title,

the term ‘child health assistance’ means payment for part or all

of the cost of health benefits coverage for targeted low-income

children that includes any of the following (and includes, in the
H. R. 2015—318

case described in section 2105(a)(2)(A), payment for part or all

of the cost of providing any of the following), as specified under

the State plan:

‘‘(1) Inpatient hospital services.

‘‘(2) Outpatient hospital services.

‘‘(3) Physician services.

‘‘(4) Surgical services.

‘‘(5) Clinic services (including health center services) and

other ambulatory health care services.

‘‘(6) Prescription drugs and biologicals and the administration of such drugs and biologicals, only if such drugs and

biologicals are not furnished for the purpose of causing, or

assisting in causing, the death, suicide, euthanasia, or mercy

killing of a person.

‘‘(7) Over-the-counter medications.

‘‘(8) Laboratory and radiological services.

‘‘(9) Prenatal care and prepregnancy family planning services and supplies.

‘‘(10) Inpatient mental health services, other than services

described in paragraph (18) but including services furnished

in a State-operated mental hospital and including residential

or other 24-hour therapeutically planned structured services.

‘‘(11) Outpatient mental health services, other than services

described in paragraph (19) but including services furnished

in a State-operated mental hospital and including communitybased services.

‘‘(12) Durable medical equipment and other medicallyrelated or remedial devices (such as prosthetic devices,

implants, eyeglasses, hearing aids, dental devices, and adaptive

devices).

‘‘(13) Disposable medical supplies.

‘‘(14) Home and community-based health care services and

related supportive services (such as home health nursing services, home health aide services, personal care, assistance with

activities of daily living, chore services, day care services, respite care services, training for family members, and minor

modifications to the home).

‘‘(15) Nursing care services (such as nurse practitioner

services, nurse midwife services, advanced practice nurse services, private duty nursing care, pediatric nurse services, and

respiratory care services) in a home, school, or other setting.

‘‘(16) Abortion only if necessary to save the life of the

mother or if the pregnancy is the result of an act of rape

or incest.

‘‘(17) Dental services.

‘‘(18) Inpatient substance abuse treatment services and

residential substance abuse treatment services.

‘‘(19) Outpatient substance abuse treatment services.

‘‘(20) Case management services.

‘‘(21) Care coordination services.

‘‘(22) Physical therapy, occupational therapy, and services

for individuals with speech, hearing, and language disorders.

‘‘(23) Hospice care.

‘‘(24) Any other medical, diagnostic, screening, preventive,

restorative, remedial, therapeutic, or rehabilitative services

(whether in a facility, home, school, or other setting) if recognized by State law and only if the service is—
H. R. 2015—319

‘‘(A) prescribed by or furnished by a physician or other

licensed or registered practitioner within the scope of practice as defined by State law,

‘‘(B) performed under the general supervision or at

the direction of a physician, or

‘‘(C) furnished by a health care facility that is operated

by a State or local government or is licensed under State

law and operating within the scope of the license.

‘‘(25) Premiums for private health care insurance coverage.

‘‘(26) Medical transportation.

‘‘(27) Enabling services (such as transportation, translation,

and outreach services) only if designed to increase the accessibility of primary and preventive health care services for

eligible low-income individuals.

‘‘(28) Any other health care services or items specified

by the Secretary and not excluded under this section.

‘‘(b) TARGETED LOW-INCOME CHILD DEFINED.—For purposes of

this title—

‘‘(1) IN GENERAL.—Subject to paragraph (2), the term ‘targeted low-income child’ means a child—

‘‘(A) who has been determined eligible by the State

for child health assistance under the State plan;

‘‘(B)(i) who is a low-income child, or

‘‘(ii) is a child whose family income (as determined

under the State child health plan) exceeds the medicaid

applicable income level (as defined in paragraph (4)), but

does not exceed 50 percentage points above the medicaid

applicable income level; and

‘‘(C) who is not found to be eligible for medical assistance under title XIX or covered under a group health

plan or under health insurance coverage (as such terms

are defined in section 2791 of the Public Health Service

Act).

‘‘(2) CHILDREN EXCLUDED.—Such term does not include—

‘‘(A) a child who is an inmate of a public institution

or a patient in an institution for mental diseases; or

‘‘(B) a child who is a member of a family that is

eligible for health benefits coverage under a State health

benefits plan on the basis of a family member’s employment

with a public agency in the State.

‘‘(3) SPECIAL RULE.—A child shall not be considered to

be described in paragraph (1)(C) notwithstanding that the child

is covered under a health insurance coverage program that

has been in operation since before July 1, 1997, and that

is offered by a State which receives no Federal funds for the

program’s operation.

‘‘(4) MEDICAID APPLICABLE INCOME LEVEL.—The term

‘medicaid applicable income level’ means, with respect to a

child, the effective income level (expressed as a percent of

the poverty line) that has been specified under the State plan

under title XIX (including under a waiver authorized by the

Secretary or under section 1902(r)(2)), as of June 1, 1997,

for the child to be eligible for medical assistance under section

1902(l)(2) for the age of such child.

‘‘(c) ADDITIONAL DEFINITIONS.—For purposes of this title:

‘‘(1) CHILD.—The term ‘child’ means an individual under

19 years of age.
H. R. 2015—320

‘‘(2) CREDITABLE HEALTH COVERAGE.—The term ‘creditable

health coverage’ has the meaning given the term ‘creditable

coverage’ under section 2701(c) of the Public Health Service

Act (42 U.S.C. 300gg(c)) and includes coverage that meets the

requirements of section 2103 provided to a targeted low-income

child under this title or under a waiver approved under section

2105(c)(2)(B) (relating to a direct service waiver).

‘‘(3) GROUP HEALTH PLAN; HEALTH INSURANCE COVERAGE;

ETC.—The terms ‘group health plan’, ‘group health insurance

coverage’, and ‘health insurance coverage’ have the meanings

given such terms in section 2191 of the Public Health Service

Act.

‘‘(4) LOW-INCOME.—The term ‘low-income child’ means a

child whose family income is at or below 200 percent of the

poverty line for a family of the size involved.

‘‘(5) POVERTY LINE DEFINED.—The term ‘poverty line’ has

the meaning given such term in section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2)), including

any revision required by such section.

‘‘(6) PREEXISTING CONDITION EXCLUSION.—The term

‘preexisting condition exclusion’ has the meaning given such

term in section 2701(b)(1)(A) of the Public Health Service Act

(42 U.S.C. 300gg(b)(1)(A)).

‘‘(7) STATE CHILD HEALTH PLAN; PLAN.—Unless the context

otherwise requires, the terms ‘State child health plan’ and

‘plan’ mean a State child health plan approved under section

2106.

‘‘(8) UNCOVERED CHILD.—The term ‘uncovered child’ means

a child that does not have creditable health coverage.’’.

(b) CONFORMING AMENDMENTS.—

(1) DEFINITION OF STATE.—Section 1101(a)(1) is amended—

(A) by striking ‘‘and XIX’’ and inserting ‘‘XIX, and

XXI’’, and

(B) by striking ‘‘title XIX’’ and inserting ‘‘titles XIX

and XXI’’.

(2) TREATMENT AS STATE HEALTH CARE PROGRAM.—Section

1128(h) (42 U.S.C. 1320a–7(h)) is amended by—

(A) in paragraph (2), by striking ‘‘or’’ at the end;

(B) in paragraph (3), by striking the period and inserting ‘‘, or’’; and

(C) by adding at the end the following:

‘‘(4) a State child health plan approved under title XXI.’’.

CHAPTER 2—EXPANDED COVERAGE OF CHILDREN

UNDER MEDICAID

SEC. 4911. OPTIONAL USE OF STATE CHILD HEALTH ASSISTANCE

FUNDS FOR ENHANCED MEDICAID MATCH FOR

EXPANDED MEDICAID ELIGIBILITY.

(a) INCREASED FMAP FOR MEDICAL ASSISTANCE FOR EXPANDED

COVERAGE OF TARGETED LOW-INCOME CHILDREN.—Section 1905 of

the Social Security Act (42 U.S.C. 1396d), as amended by section

4702(a)(2), is amended—

(1) in subsection (b), by adding at the end the following

new sentence: ‘‘Notwithstanding the first sentence of this subsection, in the case of a State plan that meets the condition

described in subsection (u)(1), with respect to expenditures
H. R. 2015—321

described in subsection (u)(2)(A) or subsection (u)(3) the Federal

medical assistance percentage is equal to the enhanced FMAP

described in section 2105(b).’’; and

(2) by adding at the end the following new subsection:

‘‘(u)(1) The conditions described in this paragraph for a State

plan are as follows:

‘‘(A) The State is complying with the requirement of section

2105(d)(1).

‘‘(B) The plan provides for such reporting of information

about expenditures and payments attributable to the operation

of this subsection as the Secretary deems necessary in order

to carry out paragraph (2) and section 2104(d).

‘‘(2)(A) For purposes of subsection (b), the expenditures

described in this subparagraph are expenditures for medical assistance for optional targeted low-income children described in subparagraph (C), but not in excess, for a State for a fiscal year, of

the amount described in subparagraph (B) for the State and fiscal

year.

‘‘(B) The amount described in this subparagraph, for a State

for a fiscal year, is the amount of the State’s allotment under

section 2104 (not taking into account reductions under section

2104(d)(2)) for the fiscal year reduced by the amount of any payments made under section 2105 to the State from such allotment

for such fiscal year.

‘‘(C) For purposes of this paragraph, the term ‘optional targeted

low-income child’ means a targeted low-income child as defined

in section 2110(b)(1) who would not qualify for medical assistance

under the State plan under this title based on such plan as in

effect on April 15, 1997 (but taking into account the expansion

of age of eligibility effected through the operation of section

1902(l)(2)(D)).

‘‘(3) For purposes of subsection (b), the expenditures described

in this subparagraph are expenditures for medical assistance for

children who are born before October 1, 1983, and who would

be described in section 1902(l)(1)(D) if they had been born on

or after such date, and who are not eligible for such assistance

under the State plan under this title based on such State plan

as in effect as of April 15, 1997.’’.

(b) ESTABLISHMENT OF OPTIONAL ELIGIBILITY CATEGORY.—Section 1902(a)(10)(A)(ii) (42 U.S.C. 1396a(a)(10)(A)(ii)), as amended

by section 4733, is amended—

(1) in subclause (XII), by striking ‘‘or’’ at the end;

(2) in subclause (XIII), by adding ‘‘or’’ at the end; and

(3) by adding at the end the following:

‘‘(XIV) who are optional targeted low-income

children described in section 1905(u)(2)(C);’’.

(c) EFFECTIVE DATE.—The amendments made by this section

shall apply to medical assistance for items and services furnished

on or after October 1, 1997.

SEC. 4912. MEDICAID PRESUMPTIVE ELIGIBILITY FOR LOW-INCOME

CHILDREN.

(a) IN GENERAL.—Title XIX of the Social Security Act is amended by inserting after section 1920 the following new section:
H. R. 2015—322

‘‘PRESUMPTIVE ELIGIBILITY FOR CHILDREN

‘‘SEC. 1920A. (a) A State plan approved under section 1902

may provide for making medical assistance with respect to health

care items and services covered under the State plan available

to a child during a presumptive eligibility period.

‘‘(b) For purposes of this section:

‘‘(1) The term ‘child’ means an individual under 19 years

of age.

‘‘(2) The term ‘presumptive eligibility period’ means, with

respect to a child, the period that—

‘‘(A) begins with the date on which a qualified entity

determines, on the basis of preliminary information, that

the family income of the child does not exceed the

applicable income level of eligibility under the State plan,

and

‘‘(B) ends with (and includes) the earlier of—

‘‘(i) the day on which a determination is made

with respect to the eligibility of the child for medical

assistance under the State plan, or

‘‘(ii) in the case of a child on whose behalf an

application is not filed by the last day of the month

following the month during which the entity makes

the determination referred to in subparagraph (A),

such last day.

‘‘(3)(A) Subject to subparagraph (B), the term ‘qualified

entity’ means any entity that—

‘‘(i)(I) is eligible for payments under a State plan

approved under this title and provides items and services

described in subsection (a) or (II) is authorized to determine

eligibility of a child to participate in a Head Start program

under the Head Start Act (42 U.S.C. 9821 et seq.), eligibility

of a child to receive child care services for which financial

assistance is provided under the Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858 et seq.),

eligibility of an infant or child to receive assistance under

the special supplemental nutrition program for women,

infants, and children (WIC) under section 17 of the Child

Nutrition Act of 1966 (42 U.S.C. 1786); and

‘‘(ii) is determined by the State agency to be capable

of making determinations of the type described in paragraph (1)(A).

‘‘(B) The Secretary may issue regulations further limiting

those entities that may become qualified entities in order to

prevent fraud and abuse and for other reasons.

‘‘(C) Nothing in this section shall be construed as preventing a State from limiting the classes of entities that may

become qualified entities, consistent with any limitations

imposed under subparagraph (B).

‘‘(c)(1) The State agency shall provide qualified entities with—

‘‘(A) such forms as are necessary for an application to

be made on behalf of a child for medical assistance under

the State plan, and

‘‘(B) information on how to assist parents, guardians, and

other persons in completing and filing such forms.
H. R. 2015—323

‘‘(2) A qualified entity that determines under subsection

(b)(1)(A) that a child is presumptively eligible for medical assistance

under a State plan shall—

‘‘(A) notify the State agency of the determination within

5 working days after the date on which determination is made,

and

‘‘(B) inform the parent or custodian of the child at the

time the determination is made that an application for medical

assistance under the State plan is required to be made by

not later than the last day of the month following the month

during which the determination is made.

‘‘(3) In the case of a child who is determined by a qualified

entity to be presumptively eligible for medical assistance under

a State plan, the parent, guardian, or other person shall make

application on behalf of the child for medical assistance under

such plan by not later than the last day of the month following

the month during which the determination is made, which application may be the application used for the receipt of medical assistance

by individuals described in section 1902(l)(1).

‘‘(d) Notwithstanding any other provision of this title, medical

assistance for items and services described in subsection (a) that—

‘‘(1) are furnished to a child—

‘‘(A) during a presumptive eligibility period,

‘‘(B) by a entity that is eligible for payments under

the State plan; and

‘‘(2) are included in the care and services covered by a

State plan;

shall be treated as medical assistance provided by such plan for

purposes of section 1903.’’.

(b) CONFORMING AMENDMENTS.—

(1) Section 1902(a)(47) (42 U.S.C. 1396a(a)(47)) is amended

by inserting before the semicolon at the end the following:

‘‘and provide for making medical assistance for items and services described in subsection (a) of section 1920A available to

children during a presumptive eligibility period in accordance

with such section’’.

(2) Section 1903(u)(1)(D)(v) (42 U.S.C. 1396b(u)(1)(D)(v))

is amended by inserting before the period at the end the following: ‘‘or for items and services described in subsection (a) of

section 1920A provided to a child during a presumptive eligibility period under such section’’.

(c) EFFECTIVE DATE.—The amendments made by this section

shall take effect on the date of the enactment of this Act.

SEC. 4913. CONTINUATION OF MEDICAID ELIGIBILITY FOR DISABLED

CHILDREN WHO LOSE SSI BENEFITS.

(a) IN GENERAL.—Section 1902(a)(10)(A)(i)(II) (42 U.S.C.

1396a(a)(10)(A)(i)(II)) is amended by inserting ‘‘(or were being paid

as of the date of the enactment of section 211(a) of the Personal

Responsibility and Work Opportunity Reconciliation Act of 1996

(P.L. 104–193)) and would continue to be paid but for the enactment

of that section’’ after ‘‘title XVI’’.

(b) EFFECTIVE DATE.—The amendment made by subsection (a)

applies to medical assistance furnished on or after July 1, 1997.
H. R. 2015—324

CHAPTER 3—DIABETES GRANT PROGRAMS

SEC. 4921. SPECIAL DIABETES PROGRAMS FOR CHILDREN WITH TYPE

I DIABETES.

Subpart I of part D of title III of the Public Health Service

Act (42 U.S.C. 254b et seq.) is amended by adding at the end

the following section:

‘‘SEC. 330B. SPECIAL DIABETES PROGRAMS FOR CHILDREN WITH TYPE

I DIABETES.

‘‘(a) TYPE I DIABETES IN CHILDREN.—The Secretary shall make

grants for services for the prevention and treatment of type I

diabetes in children, and for research in innovative approaches

to such services. Such grants may be made to children’s hospitals;

grantees under section 330 and other federally qualified health

centers; State and local health departments; and other appropriate

public or nonprofit private entities.

‘‘(b) FUNDING.—Notwithstanding section 2104(a) of the Social

Security Act, from the amounts appropriated in such section for

each of fiscal years 1998 through 2002, $30,000,000 is hereby transferred and made available in such fiscal year for grants under

this section.’’.

SEC. 4922. SPECIAL DIABETES PROGRAMS FOR INDIANS.

Subpart I of part D of title III of the Public Health Service

Act (42 U.S.C. 254b et seq.), as amended by section 4921, is further

amended by adding at the end the following section:

‘‘SEC. 330C. SPECIAL DIABETES PROGRAMS FOR INDIANS.

‘‘(a) IN GENERAL.—The Secretary shall make grants for providing services for the prevention and treatment of diabetes in accordance with subsection (b).

‘‘(b) SERVICES THROUGH INDIAN HEALTH FACILITIES.—For purposes of subsection (a), services under such subsection are provided

in accordance with this subsection if the services are provided

through any of the following entities:

‘‘(1) The Indian Health Service.

‘‘(2) An Indian health program operated by an Indian tribe

or tribal organization pursuant to a contract, grant, cooperative

agreement, or compact with the Indian Health Service pursuant

to the Indian Self-Determination Act.

‘‘(3) An urban Indian health program operated by an urban

Indian organization pursuant to a grant or contract with the

Indian Health Service pursuant to title V of the Indian Health

Care Improvement Act.

‘‘(c) FUNDING.—Notwithstanding section 2104(a) of the Social

Security Act, from the amounts appropriated in such section for

each of fiscal years 1998 through 2002, $30,000,000 is hereby transferred and made available in such fiscal year for grants under

this section.’’.

SEC. 4923. REPORT ON DIABETES GRANT PROGRAMS.

(a) EVALUATION.—The Secretary of Health and Human Services

shall conduct an evaluation of the diabetes grant programs established under the amendments made by this chapter.

(b) REPORTS.—The Secretary shall submit to the appropriate

committees of Congress—
H. R. 2015—325

(1) an interim report on the evaluation conducted under

subsection (a) not later than January 1, 2000, and

(2) a final report on such evaluation not later than January

1, 2002.

TITLE V—WELFARE AND RELATED

PROVISIONS

SEC. 5000. TABLE OF CONTENTS; REFERENCES.

(a) TABLE OF CONTENTS.—The table of contents of this title

is as follows:

Sec. 5000. Table of contents; references.

Subtitle A—TANF Block Grant

Sec. 5001. Welfare-to-work grants.

Sec. 5002. Limitation on amount of Federal funds transferable to title XX programs.

Sec. 5003. Limitation on number of persons who may be treated as engaged in

work by reason of participation in educational activities.

Sec. 5004. Penalty for failure of State to reduce assistance for recipients refusing

without good cause to work.

Subtitle B—Supplemental Security Income

Sec. 5101. Extension of deadline to perform childhood disability redeterminations.

Sec. 5102. Fees for Federal administration of State supplementary payments.

Subtitle C—Child Support Enforcement

Sec. 5201. Clarification of authority to permit certain redisclosures of wage and

claim information.

Subtitle D—Restricting Welfare and Public Benefits for Aliens

Sec. 5301. SSI eligibility for aliens receiving SSI on August 22, 1996, and disabled

aliens lawfully residing in the United States on August 22, 1996.

Sec. 5302. Extension of eligibility period for refugees and certain other qualified

aliens from 5 to 7 years for SSI and medicaid; status of Cuban and Haitian entrants.

Sec. 5303. Exceptions for certain Indians from limitation on eligibility for supplemental security income and medicaid benefits.

Sec. 5304. Exemption from restriction on supplemental security income program

participation by certain recipients eligible on the basis of very old applications.

Sec. 5305. Reinstatement of eligibility for benefits.

Sec. 5306. Treatment of certain Amerasian immigrants as refugees.

Sec. 5307. Verification of eligibility for State and local public benefits.

Sec. 5308. Effective date.

Subtitle E—Unemployment Compensation

Sec. 5401. Clarifying provision relating to base periods.

Sec. 5402. Increase in Federal unemployment account ceiling.

Sec. 5403. Special distribution to States from Unemployment Trust Fund.

Sec. 5404. Interest-free advances to State accounts in Unemployment Trust Fund

restricted to States which meet funding goals.

Sec. 5405. Exemption of service performed by election workers from the Federal

unemployment tax.

Sec. 5406. Treatment of certain services performed by inmates.

Sec. 5407. Exemption of service performed for an elementary or secondary school

operated primarily for religious purposes from the Federal unemployment tax.

Sec. 5408. State program integrity activities for unemployment compensation.

Subtitle F—Welfare Reform Technical Corrections

CHAPTER 1—BLOCK GRANTS FOR TEMPORARY ASSISTANCE TO NEEDY FAMILIES

Sec. 5501. Eligible States; State plan.

Sec. 5502. Grants to States.
H. R. 2015—326

Sec. 5503. Use of grants.

Sec. 5504. Mandatory work requirements.

Sec. 5505. Prohibitions; requirements.

Sec. 5506. Penalties.

Sec. 5507. Data collection and reporting.

Sec. 5508. Direct funding and administration by Indian Tribes.

Sec. 5509. Research, evaluations, and national studies.

Sec. 5510. Report on data processing.

Sec. 5511. Study on alternative outcomes measures.

Sec. 5512. Limitation on payments to the territories.

Sec. 5513. Conforming amendments to the Social Security Act.

Sec. 5514. Other conforming amendments.

Sec. 5515. Modifications to the job opportunities for certain low-income individuals

program.

Sec. 5516. Denial of assistance and benefits for drug-related convictions.

Sec. 5517. Transition rule.

Sec. 5518. Effective dates.

CHAPTER 2—SUPPLEMENTAL SECURITY INCOME

Sec. 5521. Conforming and technical amendments relating to eligibility restrictions.

Sec. 5522. Conforming and technical amendments relating to benefits for disabled

children.

Sec. 5523. Additional technical amendments to title XVI.

Sec. 5524. Additional technical amendments relating to title XVI.

Sec. 5525. Technical amendments relating to drug addicts and alcoholics.

Sec. 5526. Advisory board personnel.

Sec. 5527. Timing of delivery of October 1, 2000, SSI benefit payments.

Sec. 5528. Effective dates.

CHAPTER 3—CHILD SUPPORT

Sec. 5531. State obligation to provide child support enforcement services.

Sec. 5532. Distribution of collected support.

Sec. 5533. Civil penalties relating to State Directory of New Hires.

Sec. 5534. Federal Parent Locator Service.

Sec. 5535. Access to registry data for research purposes.

Sec. 5536. Collection and use of social security numbers for use in child support enforcement.

Sec. 5537. Adoption of uniform State laws.

Sec. 5538. State laws providing expedited procedures.

Sec. 5539. Voluntary paternity acknowledgement.

Sec. 5540. Calculation of paternity establishment percentage.

Sec. 5541. Means available for provision of technical assistance and operation of

Federal Parent Locator Service.

Sec. 5542. Authority to collect support from Federal employees.

Sec. 5543. Definition of support order.

Sec. 5544. State law authorizing suspension of licenses.

Sec. 5545. International support enforcement.

Sec. 5546. Child support enforcement for Indian tribes.

Sec. 5547. Continuation of rules for distribution of support in the case of a title IV–

E child.

Sec. 5548. Good cause in foster care and food stamp cases.

Sec. 5549. Date of collection of support.

Sec. 5550. Administrative enforcement in interstate cases.

Sec. 5551. Work orders for arrearages.

Sec. 5552. Additional technical State plan amendments.

Sec. 5553. Federal Case Registry of Child Support Orders.

Sec. 5554. Full faith and credit for child support orders.

Sec. 5555. Development costs of automated systems.

Sec. 5556. Additional technical amendments.

Sec. 5557. Effective date.

CHAPTER 4—RESTRICTING WELFARE AND PUBLIC BENEFITS FOR ALIENS

SUBCHAPTER A—ELIGIBILITY FOR FEDERAL BENEFITS

Sec. 5561. Alien eligibility for Federal benefits: limited application to medicare and

benefits under the Railroad Retirement Act.

Sec. 5562. Exceptions to benefit limitations: corrections to reference concerning

aliens whose deportation is withheld.

Sec. 5563. Veterans exception: application of minimum active duty service requirement; extension to unremarried surviving spouse; expanded definition of

veteran.
H. R. 2015—327

Sec. 5564. Notification concerning aliens not lawfully present: correction of terminology.

Sec. 5565. Freely associated States: contracts and licenses.

Sec. 5566. Congressional statement regarding benefits for Hmong and other Highland Lao veterans.

SUBCHAPTER B—GENERAL PROVISIONS

Sec. 5571. Determination of treatment of battered aliens as qualified aliens; inclusion of alien child of battered parent as qualified alien.

Sec. 5572. Verification of eligibility for benefits.

Sec. 5573. Qualifying quarters: disclosure of quarters of coverage information; correction to assure that crediting applies to all quarters earned by parents

before child is 18.

Sec. 5574. Statutory construction: benefit eligibility limitations applicable only with

respect to aliens present in the United States.

SUBCHAPTER C—MISCELLANEOUS CLERICAL AND TECHNICAL AMENDMENTS; EFFECTIVE

DATE

Sec. 5581. Correcting miscellaneous clerical and technical errors.

Sec. 5582. Effective date.

CHAPTER 5—CHILD PROTECTION

Sec. 5591. Conforming and technical amendments relating to child protection.

Sec. 5592. Additional technical amendments relating to child protection.

Sec. 5593. Effective date.

CHAPTER 6—CHILD CARE

Sec. 5601. Conforming and technical amendments relating to child care.

Sec. 5602. Additional conforming and technical amendments.

Sec. 5603. Effective dates.

CHAPTER 7—ERISA AMENDMENTS RELATING TO MEDICAL CHILD SUPPORT ORDERS

Sec. 5611. Amendments relating to section 303 of the Personal Responsibility and

Work Opportunity Reconciliation Act of 1996.

Sec. 5612. Amendment relating to section 381 of the Personal Responsibility and

Work Opportunity Reconciliation Act of 1996.

Sec. 5613. Amendments relating to section 382 of the Personal Responsibility and

Work Opportunity Reconciliation Act of 1996.

Subtitle G—Miscellaneous

Sec. 5701. Increase in public debt limit.

Sec. 5702. Authorization of appropriations for enforcement initiatives related to the

earned income tax credit.

(b) REFERENCES.—Except as otherwise expressly provided,

wherever in this title an amendment or repeal is expressed in

terms of an amendment to, or repeal of a section or other provision,

the reference shall be considered to be made to a section or other

provision of the Social Security Act.

Subtitle A—TANF Block Grant

SEC. 5001. WELFARE-TO-WORK GRANTS.

(a) GRANTS TO STATES.— (1) IN GENERAL.—Section 403(a) (42 U.S.C. 603(a)) is

amended by adding at the end the following:

‘‘(5) WELFARE-TO-WORK GRANTS.—

‘‘(A) FORMULA GRANTS.—

‘‘(i) ENTITLEMENT.—A State shall be entitled to

receive from the Secretary of Labor a grant for each

fiscal year specified in subparagraph (I) of this paragraph for which the State is a welfare-to-work State,

in an amount that does not exceed the lesser of—

‘‘(I) 2 times the total of the expenditures by

the State (excluding qualified State expenditures
H. R. 2015—328

(as defined in section 409(a)(7)(B)(i)) and any

expenditure described in subclause (I), (II), or (IV)

of section 409(a)(7)(B)(iv)) during the fiscal year

for activities described in subparagraph (C)(i) of

this paragraph; or

‘‘(II) the allotment of the State under clause

(iii) of this subparagraph for the fiscal year.

‘‘(ii) WELFARE-TO-WORK STATE.—A State shall be

considered a welfare-to-work State for a fiscal year

for purposes of this paragraph if the Secretary of Labor

determines that the State meets the following requirements:

‘‘(I) The State has submitted to the Secretary

of Labor and the Secretary of Health and Human

Services (in the form of an addendum to the State

plan submitted under section 402) a plan which—

‘‘(aa) describes how, consistent with this

subparagraph, the State will use any funds

provided under this subparagraph during the

fiscal year;

‘‘(bb) specifies the formula to be used

pursuant to clause (vi) to distribute funds in

the State, and describes the process by which

the formula was developed;

‘‘(cc) contains evidence that the plan was

developed in consultation and coordination

with appropriate entitites in sub-State areas;

‘‘(dd) contains assurances by the Governor

of the State that the private industry council

(and any alternate agency designated by the

Governor under item (ee)) for a service delivery area in the State will coordinate the

expenditure of any funds provided under this

subparagraph for the benefit of the service

delivery area with the expenditure of the funds

provided to the State under section 403(a)(1);

and

‘‘(ee) if the Governor of the State desires

to have an agency other than a private industry council administer the funds provided

under this subparagraph for the benefit of 1

or more service delivery areas in the State,

contains an application to the Secretary of

Labor for a waiver of clause (vii)(I) with

respect to the area or areas in order to permit

an alternate agency designated by the Governor to so administer the funds.

‘‘(II) The State has provided to the Secretary

of Labor an estimate of the amount that the State

intends to expend during the fiscal year (excluding

expenditures described in section 409(a)(7)(B)(iv)

(other than subclause (III) thereof)) pursuant to

this paragraph.

‘‘(III) The State has agreed to negotiate in

good faith with the Secretary of Health and

Human Services with respect to the substance and

funding of any evaluation under section 413(j),
H. R. 2015—329

and to cooperate with the conduct of any such

evaluation.

‘‘(IV) The State is an eligible State for the

fiscal year.

‘‘(V) The State certifies that qualified State

expenditures (within the meaning of section

409(a)(7)) for the fiscal year will be not less than

the applicable percentage of historic State expenditures (within the meaning of section 409(a)(7)) with

respect to the fiscal year.

‘‘(iii) ALLOTMENTS TO WELFARE-TO-WORK STATES.—

‘‘(I) IN GENERAL.—Subject to this clause, the

allotment of a welfare-to-work State for a fiscal

year shall be the available amount for the fiscal

year, multiplied by the State percentage for the

fiscal year.

‘‘(II) MINIMUM ALLOTMENT.—The allotment of

a welfare-to-work State (other than Guam, the

Virgin Islands, or American Samoa) for a fiscal

year shall not be less than 0.25 percent of the

available amount for the fiscal year.

‘‘(III) PRO RATA REDUCTION.—Subject to subclause (II), the Secretary of Labor shall make pro

rata reductions in the allotments to States under

this clause for a fiscal year as necessary to ensure

that the total of the allotments does not exceed

the available amount for the fiscal year.

‘‘(iv) AVAILABLE AMOUNT.—As used in this subparagraph, the term ‘available amount’ means, for a fiscal

year, the sum of—

‘‘(I) 75 percent of the sum of—

‘‘(aa) the amount specified in subparagraph (I) for the fiscal year, minus the total

of the amounts reserved pursuant to subparagraphs (E), (F), (G), and (H) for the fiscal

year; and

‘‘(bb) any amount reserved pursuant to

subparagraph (F) for the immediately preceding fiscal year that has not been obligated;

and

‘‘(II) any available amount for the immediately

preceding fiscal year that has not been obligated

by a State or sub-State entity.

‘‘(v) STATE PERCENTAGE.—As used in clause (iii),

the term ‘State percentage’ means, with respect to

a fiscal year, 1⁄2 of the sum of—

‘‘(I) the percentage represented by the number

of individuals in the State whose income is less

than the poverty line divided by the number of

such individuals in the United States; and

‘‘(II) the percentage represented by the number

of adults who are recipients of assistance under

the State program funded under this part divided

by the number of adults in the United States who

are recipients of assistance under any State program funded under this part.
H. R. 2015—330

‘‘(vi) PROCEDURE FOR DISTRIBUTION OF FUNDS

WITHIN STATES.—

‘‘(I) ALLOCATION FORMULA.—A State to which

a grant is made under this subparagraph shall

devise a formula for allocating not less than 85

percent of the amount of the grant among the

service delivery areas in the State, which—

‘‘(aa) determines the amount to be allocated for the benefit of a service delivery area

in proportion to the number (if any) by which

the population of the area with an income

that is less than the poverty line exceeds 7.5

percent of the total population of the area,

relative to such number for all such areas

in the State with such an excess, and accords

a weight of not less than 50 percent to this

factor;

‘‘(bb) may determine the amount to be

allocated for the benefit of such an area in

proportion to the number of adults residing

in the area who have been recipients of assistance under the State program funded under

this part (whether in effect before or after

the amendments made by section 103(a) of

the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 first applied

to the State) for at least 30 months (whether

or not consecutive) relative to the number of

such adults residing in the State; and

‘‘(cc) may determine the amount to be allocated for the benefit of such an area in proportion to the number of unemployed individuals

residing in the area relative to the number

of such individuals residing in the State.

‘‘(II) DISTRIBUTION OF FUNDS.—

‘‘(aa) IN GENERAL.—If the amount allocated by the formula to a service delivery area

is at least $100,000, the State shall distribute

the amount to the entity administering the

grant in the area.

‘‘(bb) SPECIAL RULE.—If the amount allocated by the formula to a service delivery area

is less than $100,000, the sum shall be available for distribution in the State under subclause (III) during the fiscal year.

‘‘(III) PROJECTS TO HELP LONG-TERM RECIPIENTS OF ASSISTANCE ENTER UNSUBSIDIZED JOBS.—

The Governor of a State to which a grant is made

under this subparagraph may distribute not more

than 15 percent of the grant funds (plus any

amount required to be distributed under this subclause by reason of subclause (II)(bb)) to projects

that appear likely to help long-term recipients of

assistance under the State program funded under

this part (whether in effect before or after the
H. R. 2015—331

amendments made by section 103(a) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 first applied to the State)

enter unsubsidized employment.

‘‘(vii) ADMINISTRATION.—

‘‘(I) PRIVATE INDUSTRY COUNCILS.—The private

industry council for a service delivery area in a

State shall have sole authority, in coordination

with the chief elected official (as described in section 103(c) of the Job Training Partnership Act)

of the area, to expend the amounts distributed

under clause (vi)(II)(aa) for the benefit of the service delivery area, in accordance with the assurances described in clause (ii)(I)(dd) provided by

the Governor of the State.

‘‘(II) ENFORCEMENT OF COORDINATION OF

EXPENDITURES WITH OTHER EXPENDITURES UNDER

THIS PART.—Notwithstanding subclause (I) of this

clause, on a determination by the Governor of a

State that a private industry council (or an alternate agency described in clause (ii)(I)(dd)) has used

funds provided under this subparagraph in a manner inconsistent with the assurances described in

clause (ii)(I)(dd)—

‘‘(aa) the private industry council (or such

alternate agency) shall remit the funds to the

Governor; and

‘‘(bb) the Governor shall apply to the Secretary of Labor for a waiver of subclause (I)

of this clause with respect to the service delivery area or areas involved in order to permit

an alternate agency designated by the Governor to administer the funds in accordance

with the assurances.

‘‘(III) AUTHORITY TO PERMIT USE OF ALTERNATE

ADMINISTERING AGENCY.—The Secretary of Labor

shall approve an application submitted under

clause (ii)(I)(ee) or subclause (II)(bb) of this clause

to waive subclause (I) of this clause with respect

to 1 or more service delivery areas if the Secretary

determines that the alternate agency designated

in the application would improve the effectiveness

or efficiency of the administration of amounts

distributed under clause (vi)(II)(aa) for the benefit

of the area or areas.

‘‘(viii) DATA TO BE USED IN DETERMINING THE NUMBER OF ADULT TANF RECIPIENTS.—For purposes of this

subparagraph, the number of adult recipients of assistance under a State program funded under this part

for a fiscal year shall be determined using data for

the most recent 12-month period for which such data

is available before the beginning of the fiscal year.

‘‘(B) COMPETITIVE GRANTS.—

‘‘(i) IN GENERAL.—The Secretary of Labor shall

award grants in accordance with this subparagraph,

in fiscal years 1998 and 1999, for projects proposed

by eligible applicants, based on the following:
H. R. 2015—332

‘‘(I) The effectiveness of the proposal in—

‘‘(aa) expanding the base of knowledge

about programs aimed at moving recipients

of assistance under State programs funded

under this part who are least job ready into

unsubsidized employment.

‘‘(bb) moving recipients of assistance

under State programs funded under this part

who are least job ready into unsubsidized

employment; and

‘‘(cc) moving recipients of assistance under

State programs funded under this part who

are least job ready into unsubsidized employment, even in labor markets that have a shortage of low-skill jobs.

‘‘(II) At the discretion of the Secretary of

Labor, any of the following:

‘‘(aa) The history of success of the

applicant in moving individuals with multiple

barriers into work.

‘‘(bb) Evidence of the applicant’s ability

to leverage private, State, and local resources.

‘‘(cc) Use by the applicant of State and

local resources beyond those required by

subparagraph (A).

‘‘(dd) Plans of the applicant to coordinate

with other organizations at the local and State

level.

‘‘(ee) Use by the applicant of current or

former recipients of assistance under a State

program funded under this part as mentors,

case managers, or service providers.

‘‘(ii) ELIGIBLE APPLICANTS.—As used in clause (i),

the term ‘eligible applicant’ means a private industry

council for a service delivery area in a State, a political

subdivision of a State, or a private entity applying

in conjunction with the private industry council for

such a service delivery area or with such a political

subdivision, that submits a proposal developed in consultation with the Governor of the State.

‘‘(iii) DETERMINATION OF GRANT AMOUNT.—In

determining the amount of a grant to be made under

this subparagraph for a project proposed by an

applicant, the Secretary of Labor shall provide the

applicant with an amount sufficient to ensure that

the project has a reasonable opportunity to be successful, taking into account the number of long-term recipients of assistance under a State program funded under

this part, the level of unemployment, the job opportunities and job growth, the poverty rate, and such other

factors as the Secretary of Labor deems appropriate,

in the area to be served by the project.

‘‘(iv) CONSIDERATION OF NEEDS OF RURAL AREAS

AND CITIES WITH LARGE CONCENTRATIONS OF POVERTY.—In making grants under this subparagraph, the

Secretary of Labor shall consider the needs of rural
H. R. 2015—333

areas and cities with large concentrations of residents

with an income that is less than the poverty line.

‘‘(v) FUNDING.—For grants under this subparagraph for each fiscal year specified in subparagraph

(I), there shall be available to the Secretary of Labor

an amount equal to the sum of—

‘‘(I) 25 percent of the sum of—

‘‘(aa) the amount specified in subparagraph (I) for the fiscal year, minus the total

of the amounts reserved pursuant to subparagraphs (E), (F), (G), and (H) for the fiscal

year; and

‘‘(bb) any amount reserved pursuant to

subparagraph (F) for the immediately preceding fiscal year that has not been obligated;

and

‘‘(II) any amount available for grants under

this subparagraph for the immediately preceding

fiscal year that has not been obligated.

‘‘(C) LIMITATIONS ON USE OF FUNDS.—

‘‘(i) ALLOWABLE ACTIVITIES.—An entity to which

funds are provided under this paragraph shall use

the funds to move individuals into and keep individuals

in lasting unsubsidized employment by means of any

of the following:

‘‘(I) The conduct and administration of community service or work experience programs.

‘‘(II) Job creation through public or private

sector employment wage subsidies.

‘‘(III) On-the-job training.

‘‘(IV) Contracts with public or private providers of readiness, placement, and post-employment

services.

‘‘(V) Job vouchers for placement, readiness,

and postemployment services.

‘‘(VI) Job retention or support services if such

services are not otherwise available.

Contracts or vouchers for job placement services supported by such funds must require that at least 1⁄2

of the payment occur after an eligible individual placed

into the workforce has been in the workforce for 6

months.

‘‘(ii) REQUIRED BENEFICIARIES.—An entity that

operates a project with funds provided under this paragraph shall expend at least 70 percent of all funds

provided to the project for the benefit of recipients

of assistance under the program funded under this

part of the State in which the entity is located, or

for the benefit of noncustodial parents of minors whose

custodial parent is such a recipient, who meet the

requirements of each of the following subclauses:

‘‘(I) At least 2 of the following apply to the

recipient:

‘‘(aa) The individual has not completed

secondary school or obtained a certificate of

general equivalency, and has low skills in

reading or mathematics.
H. R. 2015—334

‘‘(bb) The individual requires substance

abuse treatment for employment.

‘‘(cc) The individual has a poor work history.

‘‘(II) The individual—

‘‘(aa) has received assistance under the

State program funded under this part

(whether in effect before or after the amendments made by section 103 of the Personal

Responsibility and Work Opportunity Reconciliation Act of 1996 first apply to the State)

for at least 30 months (whether or not consecutive); or

‘‘(bb) within 12 months, will become ineligible for assistance under the State program

funded under this part by reason of a

durational limit on such assistance, without

regard to any exemption provided pursuant

to section 408(a)(7)(C) that may apply to the

individual.

‘‘(iii) TARGETING OF INDIVIDUALS WITH CHARACTERISTICS ASSOCIATED WITH LONG-TERM WELFARE DEPENDENCE.—An entity that operates a project with funds

provided under this paragraph may expend not more

than 30 percent of all funds provided to the project

for programs that provide assistance in a form

described in clause (i)—

‘‘(I) to recipients of assistance under the program funded under this part of the State in which

the entity is located who have characteristics associated with long-term welfare dependence (such

as school dropout, teen pregnancy, or poor work

history), including, at the option of the State, by

providing assistance in such form as a condition

of receiving assistance under the State program

funded under this part; or

‘‘(II) to individuals—

‘‘(aa) who are noncustodial parents of

minors whose custodial parent is such a recipient; and

‘‘(bb) who have such characteristics.

To the extent that the entity does not expend such

funds in accordance with the preceding sentence, the

entity shall expend such funds in accordance with

clause (ii).

‘‘(iv) AUTHORITY TO PROVIDE WORK-RELATED SERVICES TO INDIVIDUALS WHO HAVE REACHED THE 5 YEAR

LIMIT.—An entity that operates a project with funds

provided under this paragraph may use the funds to

provide assistance in a form described in clause (i)

of this subparagraph to, or for the benefit of, individuals who (but for section 408(a)(7)) would be eligible

for assistance under the program funded under this

part of the State in which the entity is located.

‘‘(v) RELATIONSHIP TO OTHER PROVISIONS OF THIS

PART.—
H. R. 2015—335

‘‘(I) RULES GOVERNING USE OF FUNDS.—The

rules of section 404, other than subsections (b),

(f), and (h) of section 404, shall not apply to a

grant made under this paragraph.

‘‘(II) RULES GOVERNING PAYMENTS TO

STATES.—The Secretary of Labor shall carry out

the functions otherwise assigned by section 405

to the Secretary of Health and Human Services

with respect to the grants payable under this paragraph.

‘‘(III) ADMINISTRATION.—Section 416 shall not

apply to the programs under this paragraph.

‘‘(vi) PROHIBITION AGAINST USE OF GRANT FUNDS

FOR ANY OTHER FUND MATCHING REQUIREMENT.—An

entity to which funds are provided under this paragraph shall not use any part of the funds, nor any

part of State expenditures made to match the funds,

to fulfill any obligation of any State, political subdivision, or private industry council to contribute funds

under section 403(b) or 418 or any other provision

of this Act or other Federal law.

‘‘(vii) DEADLINE FOR EXPENDITURE.—An entity to

which funds are provided under this paragraph shall

remit to the Secretary of Labor any part of the funds

that are not expended within 3 years after the date

the funds are so provided.

‘‘(viii) REGULATIONS.—Within 90 days after the

date of the enactment of this paragraph, the Secretary

of Labor, after consultation with the Secretary of

Health and Human Services and the Secretary of Housing and Urban Development, shall prescribe such regulations as may be necessary to implement this paragraph.

‘‘(D) DEFINITIONS.—

‘‘(i) INDIVIDUALS WITH INCOME LESS THAN THE POVERTY LINE.—For purposes of this paragraph, the number of individuals with an income that is less than

the poverty line shall be determined for a fiscal year—

‘‘(I) based on the methodology used by the

Bureau of the Census to produce and publish

intercensal poverty data for States and counties

(or, in the case of Puerto Rico, the Virgin Islands,

Guam, and American Samoa, other poverty data

selected by the Secretary of Labor); and

‘‘(II) using data for the most recent year for

which such data is available before the beginning

of the fiscal year.

‘‘(ii) PRIVATE INDUSTRY COUNCIL.—As used in this

paragraph, the term ‘private industry council’ means,

with respect to a service delivery area, the private

industry council (or successor entity) established for

the service delivery area pursuant to the Job Training

Partnership Act.

‘‘(iii) SERVICE DELIVERY AREA.—As used in this

paragraph, the term ‘service delivery area’ shall have

the meaning given such term (or the successor to such
H. R. 2015—336

term) for purposes of the Job Training Partnership

Act.

‘‘(E) SET-ASIDE FOR SUCCESSFUL PERFORMANCE

BONUS.—

‘‘(i) IN GENERAL.—The Secretary of Labor shall

make a grant in accordance with this subparagraph

to each successful performance State in fiscal year

2000.

‘‘(ii) AMOUNT OF GRANT.—The Secretary of Labor

shall determine the amount of the grant payable under

this subparagraph to a successful performance State,

which shall be based on the score assigned to the

State under clause (iv)(I)(aa) for such prior period as

the Secretary of Labor deems appropriate.

‘‘(iii) FORMULA FOR MEASURING STATE PERFORMANCE.—Not later than 1 year after the date of the

enactment of this paragraph, the Secretary of Labor,

in consultation with the Secretary of Health and

Human Services, the National Governors’ Association,

and the American Public Welfare Association, shall

develop a formula for measuring—

‘‘(I) the success of States in placing individuals

in private sector employment or in any kind of

employment, through programs operated with

funds provided under subparagraph (A);

‘‘(II) the duration of such placements;

‘‘(III) any increase in the earnings of such

individuals; and

‘‘(IV) such other factors as the Secretary of

Labor deems appropriate concerning the activities

of the States with respect to such individuals.

The formula may take into account general economic

conditions on a State-by-State basis.

‘‘(iv) SCORING OF STATE PERFORMANCE; SETTING OF

PERFORMANCE THRESHOLDS.—

‘‘(I) IN GENERAL.—The Secretary of Labor

shall—

‘‘(aa) use the formula developed under

clause (iii) to assign a score to each State

that was a welfare-to-work State for fiscal

years 1998 and 1999; and

‘‘(bb) prescribe a performance threshold

in such a manner so as to ensure that the

total amount of grants to be made under this

paragraph equals $100,000,000.

‘‘(II) AVAILABILITY OF WELFARE-TO-WORK DATA

SUBMITTED TO THE SECRETARY OF HHS.—The Secretary of Health and Human Services shall provide

the Secretary of Labor with the data reported by

States under this part with respect to programs

operated with funds provided under subparagraph

(A).

‘‘(v) SUCCESSFUL PERFORMANCE STATE DEFINED.—

As used in this subparagraph, the term ‘successful

performance State’ means a State whose score assigned

pursuant to clause (iv)(I)(aa) equals or exceeds the
H. R. 2015—337

performance threshold prescribed under clause

(iv)(I)(bb).

‘‘(vi) SET-ASIDE.—$100,000,000 of the amount

specified in subparagraph (I) for fiscal year 1999 shall

be reserved for grants under this subparagraph.

‘‘(F) FUNDING FOR INDIAN TRIBES.—1 percent of the

amount specified in subparagraph (I) for fiscal year 1998

and of the amount so specified for fiscal year 1999 shall

be reserved for grants to Indian tribes under section

412(a)(3).

‘‘(G) FUNDING FOR EVALUATIONS OF WELFARE-TO-WORK

PROGRAMS.—0.6 percent of the amount specified in subparagraph (I) for fiscal year 1998 and of the amount so specified

for fiscal year 1999 shall be reserved for use by the Secretary to carry out section 413(j).

‘‘(H) FUNDING FOR EVALUATION OF ABSTINENCE EDUCATION PROGRAMS.—

‘‘(i) IN GENERAL.—0.2 percent of the amount specified in subparagraph (I) for fiscal year 1998 and of

the amount so specified for fiscal year 1999 shall be

reserved for use by the Secretary to evaluate programs

under section 510, directly or through grants, contracts,

or interagency agreements.

‘‘(ii) AUTHORITY TO USE FUNDS FOR EVALUATIONS

OF WELFARE-TO-WORK PROGRAMS.—Any such amount

not required for such evaluations shall be available

for use by the Secretary to carry out section 413(j).

‘‘(iii) DEADLINE FOR OUTLAYS.—Outlays from funds

used pursuant to clause (i) for evaluation of programs

under section 510 shall not be made after fiscal year

2001.

‘‘(I) APPROPRIATIONS.—

‘‘(i) IN GENERAL.—Out of any money in the Treasury of the United States not otherwise appropriated,

there are appropriated $1,500,000,000 for each of fiscal

years 1998 and 1999 for grants under this paragraph.

‘‘(ii) AVAILABILITY.—The amounts made available

pursuant to clause (i) shall remain available for such

period as is necessary to make the grants provided

for in this paragraph.

‘‘(J) WORKER PROTECTIONS.—

‘‘(i) NONDISPLACEMENT IN WORK ACTIVITIES.—

‘‘(I) GENERAL PROHIBITION.—Subject to this

clause, an adult in a family receiving assistance

attributable to funds provided under this paragraph may fill a vacant employment position in

order to engage in a work activity.

‘‘(II) PROHIBITION AGAINST VIOLATION OF CONTRACTS.—A work activity engaged in under a program operated with funds provided under this

paragraph shall not violate an existing contract

for services or a collective bargaining agreement,

and such a work activity that would violate a

collective bargaining agreement shall not be undertaken without the written concurrence of the labor

organization and employer concerned.
H. R. 2015—338

‘‘(III) OTHER PROHIBITIONS.—An adult participant in a work activity engaged in under a program operated with funds provided under this

paragraph shall not be employed or assigned—

‘‘(aa) when any other individual is on layoff from the same or any substantially equivalent job;

‘‘(bb) if the employer has terminated the

employment of any regular employee or otherwise caused an involuntary reduction in its

workforce with the intention of filling the

vacancy so created with the participant; or

‘‘(cc) if the employer has caused an involuntary reduction to less than full time in hours

of any employee in the same or a substantially

equivalent job.

‘‘(ii) HEALTH AND SAFETY.—Health and safety

standards established under Federal and State law

otherwise applicable to working conditions of employees shall be equally applicable to working conditions

of other participants engaged in a work activity under

a program operated with funds provided under this

paragraph.

‘‘(iii) NONDISCRIMINATION.—In addition to the

protections provided under the provisions of law specified in section 408(c), an individual may not be

discriminated against by reason of gender with respect

to participation in work activities engaged in under

a program operated with funds provided under this

paragraph.

‘‘(iv) GRIEVANCE PROCEDURE.— ‘‘(I) IN GENERAL.—Each State to which a grant

is made under this paragraph shall establish and

maintain a procedure for grievances or complaints

from employees alleging violations of clause (i) and

participants in work activities alleging violations

of clause (i), (ii), or (iii).

‘‘(II) HEARING.—The procedure shall include

an opportunity for a hearing.

‘‘(III) REMEDIES.—The procedure shall include

remedies for violation of clause (i), (ii), or (iii),

which may continue during the pendency of the

procedure, and which may include—

‘‘(aa) suspension or termination of payments from funds provided under this paragraph;

‘‘(bb) prohibition of placement of a participant with an employer that has violated clause

(i), (ii), or (iii);

‘‘(cc) where applicable, reinstatement of

an employee, payment of lost wages and benefits, and reestablishment of other relevant

terms, conditions and privileges of employment; and

‘‘(dd) where appropriate, other equitable

relief.

‘‘(IV) APPEALS.—
H. R. 2015—339

‘‘(aa) FILING.—Not later than 30 days after

a grievant or complainant receives an adverse

decision under the procedure established

pursuant to subclause (I), the grievant or

complainant may appeal the decision to a

State agency designated by the State which

shall be independent of the State or local

agency that is administering the programs

operated with funds provided under this paragraph and the State agency administering, or

supervising the administration of, the State

program funded under this part.

‘‘(bb) FINAL DETERMINATION.—Not later

than 120 days after the State agency designated under item (aa) receives a grievance

or complaint made under the procedure established by a State pursuant to subclause (I),

the State agency shall make a final determination on the appeal.

‘‘(v) RULE OF INTERPRETATION.—This subparagraph

shall not be construed to affect the authority of a

State to provide or require workers’ compensation.

‘‘(vi) NONPREEMPTION OF STATE LAW.—The provisions of this subparagraph shall not be construed to

preempt any provision of State law that affords greater

protections to employees or to other participants

engaged in work activities under a program funded

under this part than is afforded by such provisions

of this subparagraph.’’.

(2) CONFORMING AMENDMENT.—Section 409(a)(7)(B)(iv) of

such Act (42 U.S.C. 609(a)(7)(B)(iv)) is amended to read as

follows:

‘‘(iv) EXPENDITURES BY THE STATE.—The term

‘expenditures by the State’ does not include—

‘‘(I) any expenditure from amounts made available by the Federal Government;

‘‘(II) any State funds expended for the medicaid program under title XIX;

‘‘(III) any State funds which are used to match

Federal funds provided under section 403(a)(5);

or

‘‘(IV) any State funds which are expended as

a condition of receiving Federal funds other than

under this part.

Notwithstanding subclause (IV) of the preceding sentence, such term includes expenditures by a State for

child care in a fiscal year to the extent that the total

amount of the expenditures does not exceed the amount

of State expenditures in fiscal year 1994 or 1995

(whichever is the greater) that equal the non-Federal

share for the programs described in section

418(a)(1)(A).’’.

(b) GRANTS TO OUTLYING AREAS.—Section 1108(a)(2) (42 U.S.C.

1308(a)(2)), as amended by section 5512(a) of this Act, is amended

by inserting ‘‘403(a)(5),’’ after ‘‘403(a)(4),’’.

(c) GRANTS TO INDIAN TRIBES.—Section 412(a) (42 U.S.C. 612(a))

is amended by adding at the end the following:
H. R. 2015—340

‘‘(3) WELFARE-TO-WORK GRANTS.—

‘‘(A) IN GENERAL.—The Secretary of Labor shall award

a grant in accordance with this paragraph to an Indian

tribe for each fiscal year specified in section 403(a)(5)(I)

for which the Indian tribe is a welfare-to-work tribe, in

such amount as the Secretary of Labor deems appropriate,

subject to subparagraph (B) of this paragraph.

‘‘(B) WELFARE-TO-WORK TRIBE.—An Indian tribe shall

be considered a welfare-to-work tribe for a fiscal year for

purposes of this paragraph if the Indian tribe meets the

following requirements:

‘‘(i) The Indian tribe has submitted to the Secretary

of Labor a plan which describes how, consistent with

section 403(a)(5), the Indian tribe will use any funds

provided under this paragraph during the fiscal year.

If the Indian tribe has a tribal family assistance plan,

the plan referred to in the preceding sentence shall

be in the form of an addendum to the tribal family

assistance plan.

‘‘(ii) The Indian tribe is operating a program under

a tribal family assistance plan approved by the Secretary of Health and Human Services, a program

described in paragraph (2)(C), or an employment program funded through other sources under which

substantial services are provided to recipients of assistance under a program funded under this part.

‘‘(iii) The Indian tribe has provided the Secretary

of Labor with an estimate of the amount that the

Indian tribe intends to expend during the fiscal year

(excluding tribal expenditures described in section

409(a)(7)(B)(iv) (other than subclause (III) thereof))

pursuant to this paragraph.

‘‘(iv) The Indian tribe has agreed to negotiate in

good faith with the Secretary of Health and Human

Services with respect to the substance and funding

of any evaluation under section 413(j), and to cooperate

with the conduct of any such evaluation.

‘‘(C) LIMITATIONS ON USE OF FUNDS.—

‘‘(i) IN GENERAL.—Section 403(a)(5)(C) shall apply

to funds provided to Indian tribes under this paragraph

in the same manner in which such section applies

to funds provided under section 403(a)(5).

‘‘(ii) WAIVER AUTHORITY.—The Secretary of Labor

may waive or modify the application of a provision

of section 403(a)(5)(C) (other than clause (vii) thereof)

with respect to an Indian tribe to the extent necessary

to enable the Indian tribe to operate a more efficient

or effective program with the funds provided under

this paragraph.

‘‘(iii) REGULATIONS.—Within 90 days after the date

of the enactment of this paragraph, the Secretary of

Labor, after consultation with the Secretary of Health

and Human Services and the Secretary of Housing

and Urban Development, shall prescribe such regulations as may be necessary to implement this paragraph.’’.
H. R. 2015—341

(d) FUNDS RECEIVED FROM GRANTS TO BE DISREGARDED IN

APPLYING DURATIONAL LIMIT ON ASSISTANCE.—Section 408(a)(7) (42

U.S.C. 608(a)(7)) is amended by adding at the end the following:

‘‘(G) INAPPLICABILITY TO WELFARE-TO-WORK GRANTS

AND ASSISTANCE.—For purposes of subparagraph (A) of this

paragraph, a grant made under section 403(a)(5) shall not

be considered a grant made under section 403, and noncash

assistance from funds provided under section 403(a)(5) shall

not be considered assistance.’’.

(e) DATA COLLECTION AND REPORTING.—Section 411(a) (42

U.S.C. 611(a)(1)(A)), as amended by section 5507 of this Act, is

amended—

(1) in paragraph (1)(A), by adding at the end the following:

‘‘(xviii) With respect to families participating in

a program operated with funds provided under section

403(a)(5)—

‘‘(I) any activity described in section

403(a)(5)(C)(i) engaged in by a family member;

‘‘(II) the total amount expended during the

month on the family member for each such activity;

‘‘(III) if the family member is engaged in subsidized employment or on-the-job training under

the program, the wage paid to the family member

and the amount of any wage subsidy provided

to the family member from Federal or State funds;

and

‘‘(IV) if the participation of a family member

in the program was ended during a month due

to the family member obtaining employment, the

wage of the family member in the employment

and whether the participation was ended due to

the family member obtaining unsubsidized employment, obtaining subsidized employment, receiving

an increased wage, engaging in a work training

activity funded under a program funded other than

under section 403(a)(5), or for other reasons.’’;

(2) in paragraph (2), by inserting ‘‘, with a separate statement of the percentage of such funds that are used to cover

administrative costs or overhead incurred for programs operated with funds provided under section 403(a)(5)’’ before the

period;

(3) in paragraph (3), by inserting ‘‘, with a separate statement of the total amount expended by the State during the

quarter on programs operated with funds provided under section 403(a)(5)’’ before the period;

(4) in paragraph (4), by inserting ‘‘, with a separate statement of the number of such parents who participated in programs operated with funds provided under section 403(a)(5)’’

before the period;

(5) in paragraph (6)—

(A) by striking ‘‘and’’ at the end of subparagraph (A);

(B) by striking the period at the end of subparagraph

(B) and inserting ‘‘; and’’; and

(C) by adding at the end the following:

‘‘(C) with respect to families and individuals participating in a program operated with funds provided under section 403(a)(5)—
H. R. 2015—342

‘‘(i) the total number of such families and individuals; and

‘‘(ii) the number of such families and individuals

whose participation in such a program was terminated

during a month.’’’ and

(6) in paragraph (7), by inserting ‘‘, and shall consult with

the Secretary of Labor in defining the data elements with

respect to programs operated with funds provided under section

403(a)(5)’’ before the period.

(f) EVALUATIONS.—Section 413 (42 U.S.C. 613) is amended by

adding at the end the following:

‘‘(j) EVALUATION OF WELFARE-TO-WORK PROGRAMS.—

‘‘(1) EVALUATION.—The Secretary, in consultation with the

Secretary of Labor and the Secretary of Housing and Urban

Development—

‘‘(A) shall develop a plan to evaluate how grants made

under sections 403(a)(5) and 412(a)(3) have been used;

‘‘(B) may evaluate the use of such grants by such

grantees as the Secretary deems appropriate, in accordance

with an agreement entered into with the grantees after

good-faith negotiations; and

‘‘(C) is urged to include the following outcome measures

in the plan developed under subparagraph (A):

‘‘(i) Placements in unsubsidized employment, and

placements in unsubsidized employment that last for

at least 6 months.

‘‘(ii) Placements in the private and public sectors.

‘‘(iii) Earnings of individuals who obtain employment.

‘‘(iv) Average expenditures per placement.

‘‘(2) REPORTS TO THE CONGRESS.— ‘‘(A) IN GENERAL.—Subject to subparagraphs (B) and

(C), the Secretary, in consultation with the Secretary of

Labor and the Secretary of Housing and Urban Development, shall submit to the Congress reports on the projects

funded under section 403(a)(5) and 412(a)(3) and on the

evaluations of the projects.

‘‘(B) INTERIM REPORT.—Not later than January 1, 1999,

the Secretary shall submit an interim report on the matter

described in subparagraph (A).

‘‘(C) FINAL REPORT.—Not later than January 1, 2001,

(or at a later date, if the Secretary informs the Committees

of the Congress with jurisdiction over the subject matter

of the report) the Secretary shall submit a final report

on the matter described in subparagraph (A).’’.

(g) PENALTIES.—

(1) PENALTY FOR FAILURE OF STATE TO MAINTAIN HISTORIC

EFFORT DURING YEAR IN WHICH WELFARE-TO-WORK GRANT IS

RECEIVED.—

(A) IN GENERAL.—Section 409(a) (42 U.S.C. 609(a)) is

amended by adding at the end the following:

‘‘(13) PENALTY FOR FAILURE OF STATE TO MAINTAIN HISTORIC

EFFORT DURING YEAR IN WHICH WELFARE-TO-WORK GRANT IS

RECEIVED.—If a grant is made to a State under section

403(a)(5)(A) for a fiscal year and paragraph (7) of this subsection requires the grant payable to the State under section

403(a)(1) to be reduced for the immediately succeeding fiscal
H. R. 2015—343

year, then the Secretary shall reduce the grant payable to

the State under section 403(a)(1) for such succeeding fiscal

year by the amount of the grant made to the State under

section 403(a)(5)(A) for the fiscal year.’’.

(B) INAPPLICABILITY OF GOOD CAUSE EXCEPTION.—Section 409(b)(2) of such Act (42 U.S.C. 609(b)(2)), as amended

by section 5506(k) of this Act, is amended by striking

‘‘or (12)’’ and inserting ‘‘(12), or (13)’’.

(C) INAPPLICABILITY OF CORRECTIVE COMPLIANCE

PLAN.—Section 409(c)(4) of such Act (42 U.S.C. 609(c)(4)),

as amended by section 5506(m) of this Act, is amended

by striking ‘‘or (12)’’ and inserting ‘‘(12), or (13)’’.

(2) PENALTY FOR MISUSE OF COMPETITIVE WELFARE-TO-WORK

FUNDS.—Section 409(a)(1) of such Act (42 U.S.C. 609(a)(1)) is

amended by adding at the end the following:

‘‘(C) PENALTY FOR MISUSE OF COMPETITIVE WELFARETO-WORK FUNDS.—If the Secretary of Labor finds that an

amount paid to an entity under section 403(a)(5)(B) has

been used in violation of subparagraph (B) or (C) of section

403(a)(5), the entity shall remit to the Secretary of Labor

an amount equal to the amount so used.’’.

(h) CLARIFICATION THAT SANCTIONS AGAINST RECIPIENTS

UNDER TANF PROGRAM ARE NOT WAGE REDUCTIONS.—

(1) IN GENERAL.—Section 408 (42 U.S.C. 608) is amended—

(A) by redesignating subsections (c) and (d) as subsections (d) and (e), respectively; and

(B) by inserting after subsection (b) the following:

‘‘(c) SANCTIONS AGAINST RECIPIENTS NOT CONSIDERED WAGE

REDUCTIONS.—A penalty imposed by a State against the family

of an individual by reason of the failure of the individual to comply

with a requirement under the State program funded under this

part shall not be construed to be a reduction in any wage paid

to the individual.’’.

(2) RETROACTIVITY.—The amendments made by paragraph

(1) shall take effect as if included in the enactment of section

103(a) of the Personal Responsibility and Work Opportunity

Reconciliation Act of 1996.

(i) GAO STUDY OF EFFECT OF FAMILY VIOLENCE ON NEED

FOR PUBLIC ASSISTANCE.— (1) STUDY.—The Comptroller General shall conduct a study

of the effect of family violence on the use of public assistance

programs, and in particular the extent to which family violence

prolongs or increases the need for public assistance.

(2) REPORT.—Within 1 year after the date of the enactment

of this Act, the Comptroller General shall submit to the

Committees on Ways and Means and Education and the

Workforce of the House of Representatives and the Committee

on Finance of the Senate a report that contains the findings

of the study required by paragraph (1).

SEC. 5002. LIMITATION ON AMOUNT OF FEDERAL FUNDS TRANSFERABLE TO TITLE XX PROGRAMS.

(a) IN GENERAL.—Section 404(d) (42 U.S.C. 604(d)) is amended—

(1) in paragraph (1), by striking ‘‘A State may’’ and inserting ‘‘Subject to paragraph (2), a State may’’; and

(2) by amending paragraph (2) to read as follows:
H. R. 2015—344

‘‘(2) LIMITATION ON AMOUNT TRANSFERABLE TO TITLE XX

PROGRAMS.—A State may use not more than 10 percent of

the amount of any grant made to the State under section

403(a) for a fiscal year to carry out State programs pursuant

to title XX.’’.

(b) RETROACTIVITY.—The amendments made by subsection (a)

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

of section 103(a) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996.

SEC. 5003. LIMITATION ON NUMBER OF PERSONS WHO MAY BE TREATED AS ENGAGED IN WORK BY REASON OF PARTICIPATION

IN EDUCATIONAL ACTIVITIES.

(a) IN GENERAL.—Section 407(c)(2)(D) (42 U.S.C. 607(c)(2)(D))

is amended to read as follows:

‘‘(D) LIMITATION ON NUMBER OF PERSONS WHO MAY

BE TREATED AS ENGAGED IN WORK BY REASON OF PARTICIPATION IN EDUCATIONAL ACTIVITIES.—For purposes of determining monthly participation rates under paragraphs

(1)(B)(i) and (2)(B) of subsection (b), not more than 30

percent of the number of individuals in all families and

in 2-parent families, respectively, in a State who are treated

as engaged in work for a month may consist of individuals

who are determined to be engaged in work for the month

by reason of participation in vocational educational training, or (if the month is in fiscal year 2000 or thereafter)

deemed to be engaged in work for the month by reason

of subparagraph (C) of this paragraph.’’.

(b) RETROACTIVITY.—The amendment made by subsection (a)

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

of section 103(a) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996.

SEC. 5004. PENALTY FOR FAILURE OF STATE TO REDUCE ASSISTANCE

FOR RECIPIENTS REFUSING WITHOUT GOOD CAUSE TO

WORK.

(a) IN GENERAL.—Section 409(a) (42 U.S.C. 609(a)), as amended

by section 5001(f)(1)(A) of this Act, is amended by adding at the

end the following:

‘‘(14) PENALTY FOR FAILURE TO REDUCE ASSISTANCE FOR

RECIPIENTS REFUSING WITHOUT GOOD CAUSE TO WORK.— ‘‘(A) IN GENERAL.—If the Secretary determines that

a State to which a grant is made under section 403 in

a fiscal year has violated section 407(e) during the fiscal

year, the Secretary shall reduce the grant payable to the

State under section 403(a)(1) for the immediately succeeding fiscal year by an amount equal to not less than 1

percent and not more than 5 percent of the State family

assistance grant.

‘‘(B) PENALTY BASED ON SEVERITY OF FAILURE.—The

Secretary shall impose reductions under subparagraph (A)

with respect to a fiscal year based on the degree of noncompliance.’’.

(b) RETROACTIVITY.—The amendment made by subsection (a)

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

of section 103(a) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996.
H. R. 2015—345

Subtitle B—Supplemental Security Income

SEC. 5101. EXTENSION OF DEADLINE TO PERFORM CHILDHOOD

DISABILITY REDETERMINATIONS.

Section 211(d)(2) of the Personal Responsibility and Work

Opportunity Reconciliation Act of 1996 (Public Law 104–193; 110

Stat. 2190) is amended—

(1) in subparagraph (A)—

(A) in the 1st sentence, by striking ‘‘1 year’’ and inserting ‘‘18 months’’; and

(B) by inserting after the 1st sentence the following:

‘‘Any redetermination required by the preceding sentence

that is not performed before the end of the period described

in the preceding sentence shall be performed as soon as

is practicable thereafter.’’; and

(2) in subparagraph (C), by adding at the end the following:

‘‘Before commencing a redetermination under the 2nd sentence

of subparagraph (A), in any case in which the individual

involved has not already been notified of the provisions of

this paragraph, the Commissioner of Social Security shall notify

the individual involved of the provisions of this paragraph.’’.

SEC. 5102. FEES FOR FEDERAL ADMINISTRATION OF STATE SUPPLEMENTARY PAYMENTS.

(a) FEE SCHEDULE.—

(1) OPTIONAL STATE SUPPLEMENTARY PAYMENTS.—

(A) IN GENERAL.—Section 1616(d)(2)(B) (42 U.S.C.

1382e(d)(2)(B)) is amended—

(i) by striking ‘‘and’’ at the end of clause (iii);

and

(ii) by striking clause (iv) and inserting the following: ‘‘(iv) for fiscal year 1997, $5.00;

‘‘(v) for fiscal year 1998, $6.20;

‘‘(vi) for fiscal year 1999, $7.60;

‘‘(vii) for fiscal year 2000, $7.80;

‘‘(viii) for fiscal year 2001, $8.10;

‘‘(ix) for fiscal year 2002, $8.50; and

‘‘(x) for fiscal year 2003 and each succeeding fiscal year—

‘‘(I) the applicable rate in the preceding fiscal year,

increased by the percentage, if any, by which the Consumer

Price Index for the month of June of the calendar year

of the increase exceeds the Consumer Price Index for the

month of June of the calendar year preceding the calendar

year of the increase, and rounded to the nearest whole

cent; or

‘‘(II) such different rate as the Commissioner determines is appropriate for the State.’’.

(B) CONFORMING AMENDMENT.—Section 1616(d)(2)(C)

of such Act (42 U.S.C. 1382e(d)(2)(C)) is amended by striking ‘‘(B)(iv)’’ and inserting ‘‘(B)(x)(II)’’.

(2) MANDATORY STATE SUPPLEMENTARY PAYMENTS.—

(A) IN GENERAL.—Section 212(b)(3)(B)(ii) of Public Law

93–66 (42 U.S.C. 1382 note) is amended—

(i) by striking ‘‘and’’ at the end of subclause (III);

and
H. R. 2015—346

(ii) by striking subclause (IV) and inserting the

following:

‘‘(IV) for fiscal year 1997, $5.00;

‘‘(V) for fiscal year 1998, $6.20;

‘‘(VI) for fiscal year 1999, $7.60;

‘‘(VII) for fiscal year 2000, $7.80;

‘‘(VIII) for fiscal year 2001, $8.10;

‘‘(IX) for fiscal year 2002, $8.50; and

‘‘(X) for fiscal year 2003 and each succeeding fiscal year—

‘‘(aa) the applicable rate in the preceding fiscal year,

increased by the percentage, if any, by which the Consumer

Price Index for the month of June of the calendar year

of the increase exceeds the Consumer Price Index for the

month of June of the calendar year preceding the calendar

year of the increase, and rounded to the nearest whole

cent; or

‘‘(bb) such different rate as the Commissioner determines is appropriate for the State.’’.

(B) CONFORMING AMENDMENT.—Section 212(b)(3)(B)(iii)

of such Act (42 U.S.C. 1382 note) is amended by striking

‘‘(ii)(IV)’’ and inserting ‘‘(ii)(X)(bb)’’.

(b) USE OF NEW FEES TO DEFRAY THE SOCIAL SECURITY

ADMINISTRATION’S ADMINISTRATIVE EXPENSES.—

(1) CREDIT TO SPECIAL FUND FOR FISCAL YEAR 1998 AND

SUBSEQUENT YEARS.—

(A) OPTIONAL STATE SUPPLEMENTARY PAYMENT FEES.—

Section 1616(d)(4) (42 U.S.C. 1382e(d)(4)) is amended to

read as follows:

‘‘(4)(A) The first $5 of each administration fee assessed pursuant

to paragraph (2), upon collection, shall be deposited in the general

fund of the Treasury of the United States as miscellaneous receipts.

‘‘(B) That portion of each administration fee in excess of $5,

and 100 percent of each additional services fee charged pursuant

to paragraph (3), upon collection for fiscal year 1998 and each

subsequent fiscal year, shall be credited to a special fund established

in the Treasury of the United States for State supplementary payment fees. The amounts so credited, to the extent and in the

amounts provided in advance in appropriations Acts, shall be available to defray expenses incurred in carrying out this title and

related laws. The amounts so credited shall not be scored as receipts

under section 252 of the Balanced Budget and Emergency Deficit

Control Act of 1985, and the amounts so credited shall be credited

as a discretionary offset to discretionary spending to the extent

that the amounts so credited are made available for expenditure

in appropriations Acts.’’.

(B) MANDATORY STATE SUPPLEMENTARY PAYMENT

FEES.—Section 212(b)(3)(D) of Public Law 93–66 (42 U.S.C.

1382 note) is amended to read as follows:

‘‘(D)(i) The first $5 of each administration fee assessed pursuant

to subparagraph (B), upon collection, shall be deposited in the

general fund of the Treasury of the United States as miscellaneous

receipts.

‘‘(ii) The portion of each administration fee in excess of $5,

and 100 percent of each additional services fee charged pursuant

to subparagraph (C), upon collection for fiscal year 1998 and each

subsequent fiscal year, shall be credited to a special fund established
H. R. 2015—347

in the Treasury of the United States for State supplementary payment fees. The amounts so credited, to the extent and in the

amounts provided in advance in appropriations Acts, shall be available to defray expenses incurred in carrying out this section and

title XVI of the Social Security Act and related laws. The amounts

so credited shall not be scored as receipts under section 252 of

the Balanced Budget and Emergency Deficit Control Act of 1985,

and the amounts so credited shall be credited as a discretionary

offset to discretionary spending to the extent that the amounts

so credited are made available for expenditure in appropriations

Acts.’’.

(2) LIMITATIONS ON AUTHORIZATION OF APPROPRIATIONS.—

From amounts credited pursuant to section 1616(d)(4)(B) of

the Social Security Act and section 212(b)(3)(D)(ii) of Public

Law 93–66 to the special fund established in the Treasury

of the United States for State supplementary payment fees,

there is authorized to be appropriated an amount not to exceed

$35,000,000 for fiscal year 1998, and such sums as may be

necessary for each fiscal year thereafter.

Subtitle C—Child Support Enforcement

SEC. 5201. CLARIFICATION OF AUTHORITY TO PERMIT CERTAIN REDISCLOSURES OF WAGE AND CLAIM INFORMATION.

Section 303(h)(1)(C) (42 U.S.C. 503(h)(1)(C)) is amended by

striking ‘‘section 453(i)(1) in carrying out the child support enforcement program under title IV’’ and inserting ‘‘subsections (i)(1),

(i)(3), and (j) of section 453’’.

Subtitle D—Restricting Welfare and Public

Benefits for Aliens

SEC. 5301. SSI ELIGIBILITY FOR ALIENS RECEIVING SSI ON AUGUST

22, 1996, AND DISABLED ALIENS LAWFULLY RESIDING IN

THE UNITED STATES ON AUGUST 22, 1996.

(a) SSI ELIGIBILITY FOR ALIENS RECEIVING SSI ON AUGUST

22, 1996.—Section 402(a)(2) of the Personal Responsibility and Work

Opportunity Reconciliation Act of 1996 (8 U.S.C. 1612(a)(2)) is

amended by adding after subparagraph (D) the following new

subparagraph:

‘‘(E) ALIENS RECEIVING SSI ON AUGUST 22, 1996.—With

respect to eligibility for benefits for the program defined

in paragraph (3)(A) (relating to the supplemental security

income program), paragraph (1) shall not apply to an alien

who is lawfully residing in the United States and who

was receiving such benefits on August 22, 1996.’’.

(b) SSI ELIGIBILITY FOR DISABLED ALIENS LAWFULLY RESIDING

IN THE UNITED STATES ON AUGUST 22, 1996.—Section 402(a)(2) of

the Personal Responsibility and Work Opportunity Reconciliation

Act of 1996 (8 U.S.C. 1612(a)(2)) is amended by adding at the

end the following:

‘‘(F) DISABLED ALIENS LAWFULLY RESIDING IN THE

UNITED STATES ON AUGUST 22, 1996.—With respect to eligibility for benefits for the program defined in paragraph
H. R. 2015—348

(3)(A) (relating to the supplemental security income program), paragraph (1) shall not apply to an alien who—

‘‘(i) was lawfully residing in the United States

on August 22, 1996; and

‘‘(ii) is blind or disabled, as defined in section

1614(a)(2) or 1614(a)(3) of the Social Security Act (42

U.S.C. 1382c(a)(3)).’’.

(c) EXTENSION OF GRANDFATHER PROVISION RELATING TO SSI

ELIGIBILITY.—Section 402(a)(2)(D)(i) of the Personal Responsibility

and Work Opportunity Reconciliation Act of 1996 (8 U.S.C.

1612(a)(2)(D)(i)) is amended—

(1) in subclause (I), by striking ‘‘September 30, 1997,’’ and

inserting ‘‘September 30, 1998,’’; and

(2) in subclause (III), by striking ‘‘September 30, 1997,’’

and inserting ‘‘September 30, 1998’’.

SEC. 5302. EXTENSION OF ELIGIBILITY PERIOD FOR REFUGEES AND

CERTAIN OTHER QUALIFIED ALIENS FROM 5 TO 7 YEARS

FOR SSI AND MEDICAID; STATUS OF CUBAN AND HAITIAN

ENTRANTS.

(a) SSI.—Section 402(a)(2)(A) of the Personal Responsibility

and Work Opportunity Reconciliation Act of 1996 (8 U.S.C.

1612(a)(2)(A)) is amended to read as follows:

‘‘(A) TIME-LIMITED EXCEPTION FOR REFUGEES AND

ASYLEES.—

‘‘(i) SSI.—With respect to the specified Federal

program described in paragraph (3)(A), paragraph (1)

shall not apply to an alien until 7 years after the

date—

‘‘(I) an alien is admitted to the United States

as a refugee under section 207 of the Immigration

and Nationality Act;

‘‘(II) an alien is granted asylum under section

208 of such Act;

‘‘(III) an alien’s deportation is withheld under

section 243(h) of such Act; or

‘‘(IV) an alien is granted status as a Cuban

and Haitian entrant (as defined in section 501(e)

of the Refugee Education Assistance Act of 1980).

‘‘(ii) FOOD STAMPS.—With respect to the specified

Federal program described in paragraph (3)(B), paragraph (1) shall not apply to an alien until 5 years

after the date—

‘‘(I) an alien is admitted to the United States

as a refugee under section 207 of the Immigration

and Nationality Act;

‘‘(II) an alien is granted asylum under section

208 of such Act;

‘‘(III) an alien’s deportation is withheld under

section 243(h) of such Act; or

‘‘(IV) an alien is granted status as a Cuban

and Haitian entrant (as defined in section 501(e)

of the Refugee Education Assistance Act of 1980).’’.

(b) MEDICAID.—Section 402(b)(2)(A) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C.

1612(b)(2)(A)) is amended to read as follows:
H. R. 2015—349

‘‘(A) TIME-LIMITED EXCEPTION FOR REFUGEES AND

ASYLEES.—

‘‘(i) MEDICAID.—With respect to the designated

Federal program described in paragraph (3)(C), paragraph (1) shall not apply to an alien until 7 years

after the date—

‘‘(I) an alien is admitted to the United States

as a refugee under section 207 of the Immigration

and Nationality Act;

‘‘(II) an alien is granted asylum under section

208 of such Act;

‘‘(III) an alien’s deportation is withheld under

section 243(h) of such Act; or

‘‘(IV) an alien is granted status as a Cuban

and Haitian entrant (as defined in section 501(e)

of the Refugee Education Assistance Act of 1980).

‘‘(ii) OTHER DESIGNATED FEDERAL PROGRAMS.—

With respect to the designated Federal programs under

paragraph (3) (other than subparagraph (C)), paragraph (1) shall not apply to an alien until 5 years

after the date—

‘‘(I) an alien is admitted to the United States

as a refugee under section 207 of the Immigration

and Nationality Act;

‘‘(II) an alien is granted asylum under section

208 of such Act;

‘‘(III) an alien’s deportation is withheld under

section 243(h) of such Act; or

‘‘(IV) an alien is granted status as a Cuban

and Haitian entrant (as defined in section 501(e)

of the Refugee Education Assistance Act of 1980).’’.

(c) STATUS OF CUBAN AND HAITIAN ENTRANTS.— (1) FEDERAL MEANS-TESTED PUBLIC BENEFITS.— (A) Section 403(b)(1) of the Personal Responsibility

and Work Opportunity Reconciliation Act of 1996 (8 U.S.C.

1613(b)(1)) is amended by adding at the end the following

new subparagraph:

‘‘(D) An alien who is a Cuban and Haitian entrant

as defined in section 501(e) of the Refugee Education Assistance Act of 1980.’’.

(B) Section 403 of the Personal Responsibility and

Work Opportunity Reconciliation Act of 1996 (8 U.S.C.

1613) is amended by striking subsection (d).

(2) STATE PUBLIC BENEFITS.—Section 412(b)(1) of the Personal Responsibility and Work Opportunity Reconciliation Act

of 1996 (8 U.S.C. 1622(b)(1)) is amended by adding at the

end the following new subparagraph:

‘‘(D) An alien who is a Cuban and Haitian entrant

as defined in section 501(e) of the Refugee Education Assistance Act of 1980 until 5 years after the alien is granted

such status.’’.

(3) QUALIFIED ALIEN DEFINED.—Section 431(b) of the Personal Responsibility and Work Opportunity Reconciliation Act

of 1996 (8 U.S.C. 1641(b)) is amended—

(A) in paragraph (5) by striking ‘‘or’’;

(B) in paragraph (6) by striking the period and inserting ‘‘; or’’; and
H. R. 2015—350

(C) by adding at the end the following new paragraph:

‘‘(7) an alien who is a Cuban and Haitian entrant (as

defined in section 501(e) of the Refugee Education Assistance

Act of 1980).’’.

SEC. 5303. EXCEPTIONS FOR CERTAIN INDIANS FROM LIMITATION ON

ELIGIBILITY FOR SUPPLEMENTAL SECURITY INCOME

AND MEDICAID BENEFITS.

(a) EXCEPTION FROM LIMITATION ON SSI ELIGIBILITY.—Section

402(a)(2) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1612(a)(2)) is amended by adding

at the end the following:

‘‘(G) SSI EXCEPTION FOR CERTAIN INDIANS.—With

respect to eligibility for benefits for the program defined

in paragraph (3)(A) (relating to the supplemental security

income program), section 401(a) and paragraph (1) shall

not apply to any individual—

‘‘(i) who is an American Indian born in Canada

to whom the provisions of section 289 of the Immigration and Nationality Act (8 U.S.C. 1359) apply; or

‘‘(ii) who is a member of an Indian tribe (as defined

in section 4(e) of the Indian Self-Determination and

Education Assistance Act (25 U.S.C. 450b(e))).’’.

(b) EXCEPTION FROM LIMITATION ON MEDICAID ELIGIBILITY.—

Section 402(b)(2) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1612(b)(2)) is amended

by inserting at the end the following:

‘‘(E) MEDICAID EXCEPTION FOR CERTAIN INDIANS.—With

respect to eligibility for benefits for the program defined

in paragraph (3)(C) (relating to the medicaid program),

section 401(a) and paragraph (1) shall not apply to any

individual described in subsection (a)(2)(G).’’.

(c) SSI AND MEDICAID EXCEPTIONS FROM LIMITATION ON ELIGIBILITY OF NEW ENTRANTS.—Section 403 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C.

1613) is amended by adding after subsection (c) the following new

subsection:

‘‘(d) SSI AND MEDICAID BENEFITS FOR CERTAIN INDIANS.—Notwithstanding any other provision of law, the limitations under

section 401(a) and subsection (a) shall not apply to an individual

described in section 402(a)(2)(G), but only with respect to the programs specified in subsections (a)(3)(A) and (b)(3)(C) of section

402.’’.

SEC. 5304. EXEMPTION FROM RESTRICTION ON SUPPLEMENTAL SECURITY INCOME PROGRAM PARTICIPATION BY CERTAIN

RECIPIENTS ELIGIBLE ON THE BASIS OF VERY OLD

APPLICATIONS.

Section 402(a)(2) of the Personal Responsibility and Work

Opportunity Reconciliation Act of 1996 (8 U.S.C. 1612(a)(2)) is

amended by adding at the end the following:

‘‘(H) SSI EXCEPTION FOR CERTAIN RECIPIENTS ON THE

BASIS OF VERY OLD APPLICATIONS.—With respect to eligibility for benefits for the program defined in paragraph

(3)(A) (relating to the supplemental security income program), paragraph (1) shall not apply to any individual—
H. R. 2015—351

‘‘(i) who is receiving benefits under such program

for months after July 1996 on the basis of an application filed before January 1, 1979; and

‘‘(ii) with respect to whom the Commissioner of

Social Security lacks clear and convincing evidence

that such individual is an alien ineligible for such

benefits as a result of the application of this section.’’.

SEC. 5305. REINSTATEMENT OF ELIGIBILITY FOR BENEFITS.

(a) FOOD STAMPS.—The Personal Responsibility and Work

Opportunity Reconciliation Act of 1996 is amended by adding after

section 435 the following new section:

‘‘SEC. 436. DERIVATIVE ELIGIBILITY FOR BENEFITS.

‘‘Notwithstanding any other provision of law, an alien who

under the provisions of this title is ineligible for benefits under

the food stamp program (as defined in section 402(a)(3)(B)) shall

not be eligible for such benefits because the alien receives benefits

under the supplemental security income program (as defined in

section 402(a)(3)(A)).’’.

(b) MEDICAID.—Section 402(b)(2) of the Personal Responsibility

and Work Opportunity Reconciliation Act of 1996 (8 U.S.C.

1612(b)(2)) is amended by adding at the end the following:

‘‘(F) MEDICAID EXCEPTION FOR ALIENS RECEIVING SSI.—

An alien who is receiving benefits under the program

defined in subsection (a)(3)(A) (relating to the supplemental

security income program) shall be eligible for medical

assistance under a State plan under title XIX of the Social

Security Act (42 U.S.C. 1396 et seq.) under the same terms

and conditions that apply to other recipients of benefits

under the program defined in such subsection.’’.

(c) CLERICAL AMENDMENT.—The table of sections as contained

in section 2 of the Personal Responsibility and Work Opportunity

Reconciliation Act of 1996 is amended by adding after the item

relating to section 435 the following:

‘‘Sec. 436. Derivative eligibility for benefits.’’.

SEC. 5306. TREATMENT OF CERTAIN AMERASIAN IMMIGRANTS AS

REFUGEES.

(a) FOR PURPOSES OF SSI AND FOOD STAMPS.—Section

402(a)(2)(A) of the Personal Responsibility and Work Opportunity

Reconciliation Act of 1996 (8 U.S.C. 1612(a)(2)(A)) as amended

by section 5302 is amended—

(1) in clause (i)—

(A) by striking ‘‘or’’ at the end of subclause (III);

(B) by striking the period at the end of subclause

(IV) and inserting ‘‘; or’’; and

(C) by adding at the end the following:

‘‘(V) an alien is admitted to the United States

as an Amerasian immigrant pursuant to section

584 of the Foreign Operations, Export Financing,

and Related Programs Appropriations Act, 1988

(as contained in section 101(e) of Public Law 100–

202 and amended by the 9th proviso under MIGRATION AND REFUGEE ASSISTANCE in title II of the

Foreign Operations, Export Financing, and Related
H. R. 2015—352

Programs Appropriations Act, 1989, Public Law

100–461, as amended).’’; and

(2) in clause (ii)—

(A) by striking ‘‘or’’ at the end of subclause (III);

(B) by striking the period at the end of subclause

(IV) and inserting ‘‘; or’’; and

(C) by adding at the end the following:

‘‘(V) an alien is admitted to the United States

as an Amerasian immigrant as described in clause

(i)(V).’’.

(b) FOR PURPOSES OF TANF, SSBG, AND MEDICAID.—Section

402(b)(2)(A) of the Personal Responsibility and Work Opportunity

Reconciliation Act of 1996 (8 U.S.C. 1612(b)(2)(A)) as amended

by section 5302 is amended—

(1) in clause (i)—

(A) by striking ‘‘or’’ at the end of subclause (III);

(B) by striking the period at the end of subclause

(IV) and inserting ‘‘; or’’; and

(C) by adding at the end the following:

‘‘(V) an alien admitted to the United States as

an Amerasian immigrant as described in subsection

(a)(2)(A)(i)(V) until 5 years after the date of such alien’s

entry into the United States.’’; and

(2) in clause (ii)—

(A) by striking ‘‘or’’ at the end of subclause (III);

(B) by striking the period at the end of subclause

(IV) and inserting ‘‘; or’’; and

(C) by adding at the end the following:

‘‘(V) an alien admitted to the United States as

an Amerasian immigrant as described in subsection

(a)(2)(A)(i)(V) until 5 years after the date of such alien’s

entry into the United States.’’.

(c) FOR PURPOSES OF EXCEPTION FROM 5-YEAR LIMITED ELIGI- BILITY OF QUALIFIED ALIENS.—Section 403(b)(1) of the Personal

Responsibility and Work Opportunity Reconciliation Act of 1996

(8 U.S.C. 1613(b)(1)) is amended by adding at the end the following:

‘‘(E) An alien admitted to the United States as an

Amerasian immigrant as described in section

402(a)(2)(A)(i)(V).’’.

(d) FOR PURPOSES OF CERTAIN STATE PROGRAMS.—Section

412(b)(1) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1622(b)(1)) is amended by adding

at the end the following new subparagraph:

‘‘(E) An alien admitted to the United States as an

Amerasian immigrant as described in section

402(a)(2)(A)(i)(V).’’.

SEC. 5307. VERIFICATION OF ELIGIBILITY FOR STATE AND LOCAL PUBLIC BENEFITS.

(a) IN GENERAL.—The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 is amended by adding after section

412 the following new section:

‘‘SEC. 413. AUTHORIZATION FOR VERIFICATION OF ELIGIBILITY FOR

STATE AND LOCAL PUBLIC BENEFITS.

‘‘A State or political subdivision of a State is authorized to

require an applicant for State and local public benefits (as defined

in section 411(c)) to provide proof of eligibility.’’.
H. R. 2015—353

(b) CLERICAL AMENDMENT.—The table of sections as contained

in section 2 of the Personal Responsibility and Work Opportunity

Reconciliation Act of 1996 is amended by adding after the item

relating to section 412 the following:

‘‘Sec. 413. Authorization for verification of eligibility for state and local public benefits.’’.

SEC. 5308. EFFECTIVE DATE.

Except as otherwise provided, the amendments made by this

subtitle shall be effective as if included in the enactment of title

IV of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996.

Subtitle E—Unemployment Compensation

SEC. 5401. CLARIFYING PROVISION RELATING TO BASE PERIODS.

(a) IN GENERAL.—No provision of a State law under which

the base period for such State is defined or otherwise determined

shall, for purposes of section 303(a)(1) of the Social Security Act

(42 U.S.C. 503(a)(1)), be considered a provision for a method of

administration.

(b) DEFINITIONS.—For purposes of this section, the terms ‘‘State

law’’, ‘‘base period’’, and ‘‘State’’ shall have the meanings given

them under section 205 of the Federal-State Extended Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note).

(c) EFFECTIVE DATE.—This section shall apply for purposes

of any period beginning before, on, or after the date of the enactment

of this Act.

SEC. 5402. INCREASE IN FEDERAL UNEMPLOYMENT ACCOUNT CEILING.

(a) IN GENERAL.—Section 902(a)(2) (42 U.S.C. 1102(a)(2)) is

amended by striking ‘‘0.25 percent’’ and inserting ‘‘0.5 percent’’.

(b) EFFECTIVE DATE.—This section and the amendment made

by this section—

(1) shall take effect on October 1, 2001, and

(2) shall apply to fiscal years beginning on or after that

date.

SEC. 5403. SPECIAL DISTRIBUTION TO STATES FROM UNEMPLOYMENT

TRUST FUND.

(a) IN GENERAL.—Subsection (a) of section 903 (42 U.S.C.

1103(a)) is amended by adding at the end the following new paragraph:

‘‘(3)(A) Notwithstanding any other provision of this section,

for purposes of carrying out this subsection with respect to any

excess amount (referred to in paragraph (1)) remaining in the

employment security administration account as of the close of fiscal

year 1999, 2000, or 2001, such amount shall—

‘‘(i) to the extent of any amounts not in excess of

$100,000,000, be subject to subparagraph (B), and

‘‘(ii) to the extent of any amounts in excess of $100,000,000,

be subject to subparagraph (C).

‘‘(B) Paragraphs (1) and (2) shall apply with respect to any

amounts described in subparagraph (A)(i), except that—

‘‘(i) in carrying out the provisions of paragraph (2)(B) with

respect to such amounts (to determine the portion of such
H. R. 2015—354

amounts which is to be allocated to a State for a succeeding

fiscal year), the ratio to be applied under such provisions shall

be the same as the ratio that—

‘‘(I) the amount of funds to be allocated to such State

for such fiscal year pursuant to the base allocation formula

under title III, bears to

‘‘(II) the total amount of funds to be allocated to all

States for such fiscal year pursuant to the base allocation

formula under title III,

as determined by the Secretary of Labor, and

‘‘(ii) the amounts allocated to a State pursuant to this

subparagraph shall be available to such State, subject to the

last sentence of subsection (c)(2).

Nothing in this paragraph shall preclude the application of subsection (b) with respect to any allocation determined under this

subparagraph.

‘‘(C) Any amounts described in clause (ii) of subparagraph (A)

(remaining in the employment security administration account as

of the close of any fiscal year specified in such subparagraph)

shall, as of the beginning of the succeeding fiscal year, accrue

to the Federal unemployment account, without regard to the limit

provided in section 902(a).’’.

(b) CONFORMING AMENDMENT.—Paragraph (2) of section 903(c)

of the Social Security Act is amended by adding at the end, as

a flush left sentence, the following:

‘‘Any amount allocated to a State under this section for fiscal

year 2000, 2001, or 2002 may be used by such State only to

pay expenses incurred by it for the administration of its unemployment compensation law, and may be so used by it without regard

to any of the conditions prescribed in any of the preceding provisions

of this paragraph.’’.

SEC. 5404. INTEREST-FREE ADVANCES TO STATE ACCOUNTS IN

UNEMPLOYMENT TRUST FUND RESTRICTED TO STATES

WHICH MEET FUNDING GOALS.

(a) IN GENERAL.—Paragraph (2) of section 1202(b) (42 U.S.C.

1322(b)) is amended—

(1) by striking ‘‘and’’ at the end of subparagraph (A),

(2) by striking the period at the end of subparagraph (B)

and inserting ‘‘, and’’, and

(3) by adding at the end the following new subparagraph:

‘‘(C) such State meets funding goals, established under

regulations issued by the Secretary of Labor, relating to the

accounts of the States in the Unemployment Trust Fund.’’.

(b) EFFECTIVE DATE.—The amendments made by this section

shall apply to calendar years beginning after the date of the enactment of this Act.

SEC. 5405. EXEMPTION OF SERVICE PERFORMED BY ELECTION WORKERS FROM THE FEDERAL UNEMPLOYMENT TAX.

(a) IN GENERAL.—Paragraph (3) of section 3309(b) of the

Internal Revenue Code of 1986 (relating to exemption for certain

services) is amended—

(1) by striking ‘‘or’’ at the end of subparagraph (D),

(2) by adding ‘‘or’’ at the end of subparagraph (E), and

(3) by inserting after subparagraph (E) the following new

subparagraph:
H. R. 2015—355

‘‘(F) as an election official or election worker if the

amount of remuneration received by the individual during

the calendar year for services as an election official or

election worker is less than $1,000;’’.

(b) EFFECTIVE DATE.—The amendments made by this section

shall apply with respect to service performed after the date of

the enactment of this Act.

SEC. 5406. TREATMENT OF CERTAIN SERVICES PERFORMED BY

INMATES.

(a) IN GENERAL.—Subsection (c) of section 3306 of the Internal

Revenue Code of 1986 (defining employment) is amended—

(1) by striking ‘‘or’’ at the end of paragraph (19),

(2) by striking the period at the end of paragraph (20)

and inserting ‘‘; or’’, and

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

‘‘(21) service performed by a person committed to a penal

institution.’’.

(b) EFFECTIVE DATE.—The amendments made by this section

shall apply with respect to service performed after January 1,

1994.

SEC. 5407. EXEMPTION OF SERVICE PERFORMED FOR AN ELEMENTARY

OR SECONDARY SCHOOL OPERATED PRIMARILY FOR

RELIGIOUS PURPOSES FROM THE FEDERAL UNEMPLOYMENT TAX.

(a) IN GENERAL.—Paragraph (1) of section 3309(b) of the

Internal Revenue Code of 1986 (relating to exemption for certain

services) is amended—

(1) by striking ‘‘or’’ at the end of subparagraph (A), and

(2) by inserting before the semicolon at the end the following: ‘‘, or (C) an elementary or secondary school which is operated primarily for religious purposes, which is described in

section 501(c)(3), and which is exempt from tax under section

501(a)’’.

(b) EFFECTIVE DATE.—The amendments made by this section

shall apply with respect to service performed after the date of

the enactment of this Act.

SEC. 5408. STATE PROGRAM INTEGRITY ACTIVITIES FOR UNEMPLOYMENT COMPENSATION.

Section 901(c) (42 U.S.C. 1101(c)) is amended by adding at

the end the following new paragraph:

‘‘(5)(A) There are authorized to be appropriated out of the

employment security administration account to carry out program

integrity activities, in addition to any amounts available under

paragraph (1)(A)(i)—

‘‘(i) $89,000,000 for fiscal year 1998;

‘‘(ii) $91,000,000 for fiscal year 1999;

‘‘(iii) $93,000,000 fiscal year 2000;

‘‘(iv) $96,000,000 for fiscal year 2001; and

‘‘(v) $98,000,000 for fiscal year 2002.

‘‘(B) In any fiscal year in which a State receives funds appropriated pursuant to this paragraph, the State shall expend a proportion of the funds appropriated pursuant to paragraph (1)(A)(i) to

carry out program integrity activities that is not less than the

proportion of the funds appropriated under such paragraph that
H. R. 2015—356

was expended by the State to carry out program integrity activities

in fiscal year 1997.

‘‘(C) For purposes of this paragraph, the term ‘program integrity

activities’ means initial claims review activities, eligibility review

activities, benefit payments control activities, and employer liability

auditing activities.’’.

Subtitle F—Welfare Reform Technical

Corrections

CHAPTER 1—BLOCK GRANTS FOR TEMPORARY

ASSISTANCE TO NEEDY FAMILIES

SEC. 5501. ELIGIBLE STATES; STATE PLAN.

(a) LATER DEADLINE FOR SUBMISSION OF STATE PLANS.—Section

402(a) (42 U.S.C. 602(a)) is amended by striking ‘‘2-year period

immediately preceding’’ and inserting ‘‘27-month period ending with

the close of the 1st quarter of’’.

(b) CLARIFICATION OF SCOPE OF WORK PROVISIONS.—Section

402(a)(1)(A)(ii) (42 U.S.C. 602(a)(1)(A)(ii)) is amended by inserting

‘‘, consistent with section 407(e)(2)’’ before the period.

(c) CORRECTION OF CROSS-REFERENCE.—Section 402(a)(1)(A)(v)

(42 U.S.C. 602(a)(1)(A)(v)) is amended by striking ‘‘403(a)(2)(B)’’

and inserting ‘‘403(a)(2)(C)(iii)’’.

(d) NOTIFICATION OF PLAN AMENDMENTS.—Section 402 (42

U.S.C. 602) is amended—

(1) by redesignating subsection (b) as subsection (c) and

inserting after subsection (a) the following:

‘‘(b) PLAN AMENDMENTS.—Within 30 days after a State amends

a plan submitted pursuant to subsection (a), the State shall notify

the Secretary of the amendment.’’; and

(2) in subsection (c) (as so redesignated), by inserting ‘‘or

plan amendment’’ after ‘‘plan’’.

SEC. 5502. GRANTS TO STATES.

(a) BONUS FOR DECREASE IN ILLEGITIMACY MODIFIED TO TAKE

ACCOUNT OF CERTAIN TERRITORIES.— (1) IN GENERAL.—Section 403(a)(2)(B) (42 U.S.C.

603(a)(2)(B)) is amended to read as follows:

‘‘(B) AMOUNT OF GRANT.— ‘‘(i) IN GENERAL.—If, for a bonus year, none of

the eligible States is Guam, the Virgin Islands, or

American Samoa, then the amount of the grant shall

be—

‘‘(I) $20,000,000 if there are 5 eligible States;

or

‘‘(II) $25,000,000 if there are fewer than 5

eligible States.

‘‘(ii) AMOUNT IF CERTAIN TERRITORIES ARE

ELIGIBLE.—If, for a bonus year, Guam, the Virgin

Islands, or American Samoa is an eligible State, then

the amount of the grant shall be—

‘‘(I) in the case of such a territory, 25 percent

of the mandatory ceiling amount (as defined in

section 1108(c)(4)) with respect to the territory;

and
H. R. 2015—357

‘‘(II) in the case of a State that is not such

a territory—

‘‘(aa) if there are 5 eligible States other

than such territories, $20,000,000, minus 1⁄5

of the total amount of the grants payable

under this paragraph to such territories for

the bonus year; or

‘‘(bb) if there are fewer than 5 such eligible

States, $25,000,000, or such lesser amount as

may be necessary to ensure that the total

amount of grants payable under this paragraph for the bonus year does not exceed

$100,000,000.’’.

(2) CERTAIN TERRITORIES TO BE IGNORED IN RANKING OTHER

STATES.—Section 403(a)(2)(C)(i)(I)(aa) (42 U.S.C.

603(a)(2)(C)(i)(I)(aa)) is amended by adding at the end the

following: ‘‘In the case of a State that is not a territory specified

in subparagraph (B), the comparative magnitude of the decrease

for the State shall be determined without regard to the magnitude of the corresponding decrease for any such territory.’’.

(b) COMPUTATION OF BONUS BASED ON RATIOS OF OUT-OFWEDLOCK BIRTHS TO ALL BIRTHS INSTEAD OF NUMBERS OF OUTOF-WEDLOCK BIRTHS.—Section 403(a)(2) (42 U.S.C. 603(a)(2)) is

amended—

(1) in the paragraph heading, by inserting ‘‘RATIO’’ before

the period;

(2) in subparagraph (A), by striking all that follows ‘‘bonus

year’’ and inserting a period; and

(3) in subparagraph (C)—

(A) in clause (i)—

(i) in subclause (I)(aa)—

(I) by striking ‘‘number of out-of-wedlock

births that occurred in the State during’’ and

inserting ‘‘illegitimacy ratio of the State for’’; and

(II) by striking ‘‘number of such births that

occurred during’’ and inserting ‘‘illegitimacy ratio

of the State for’’; and

(ii) in subclause (II)(aa)—

(I) by striking ‘‘number of out-of-wedlock

births that occurred in’’ each place such term

appears and inserting ‘‘illegitimacy ratio of’’; and

(II) by striking ‘‘calculate the number of outof-wedlock births’’ and inserting ‘‘calculate the

illegitimacy ratio’’; and

(B) by adding at the end the following:

‘‘(iii) ILLEGITIMACY RATIO.—The term ‘illegitimacy

ratio’ means, with respect to a State and a period—

‘‘(I) the number of out-of-wedlock births to

mothers residing in the State that occurred during

the period; divided by

‘‘(II) the number of births to mothers residing

in the State that occurred during the period.’’.

(c) USE OF CALENDAR YEAR DATA INSTEAD OF FISCAL YEAR

DATA IN CALCULATING BONUS FOR DECREASE IN ILLEGITIMACY

RATIO.—Section 403(a)(2)(C) (42 U.S.C. 603(a)(2)(C)) is amended—

(1) in clause (i)—

(A) in subclause (I)(bb)—
H. R. 2015—358

(i) by striking ‘‘the fiscal year’’ and inserting ‘‘the

calendar year for which the most recent data are available’’; and

(ii) by striking ‘‘fiscal year 1995’’ and inserting

‘‘calendar year 1995’’;

(B) in subclause (II), by striking ‘‘fiscal’’ each place

such term appears and inserting ‘‘calendar’’; and

(2) in clause (ii), by striking ‘‘fiscal years’’ and inserting

‘‘calendar years’’.

(d) CORRECTION OF HEADING.—Section 403(a)(3)(C)(ii) (42

U.S.C. 603(a)(3)(C)(ii)) is amended in the heading by striking ‘‘1997’’

and inserting ‘‘1998’’.

(e) CLARIFICATION OF CONTINGENCY FUND PROVISION.—Section

403(b) (42 U.S.C. 603(b)) is amended—

(1) in paragraph (6), by striking ‘‘(5)’’ and inserting ‘‘(4)’’;

(2) by striking paragraph (4) and redesignating paragraphs

(5) and (6) as paragraphs (4) and (5), respectively; and

(3) by inserting after paragraph (5) the following:

‘‘(6) ANNUAL RECONCILIATION.—

‘‘(A) IN GENERAL.—Notwithstanding paragraph (3), if

the Secretary makes a payment to a State under this

subsection in a fiscal year, then the State shall remit

to the Secretary, within 1 year after the end of the first

subsequent period of 3 consecutive months for which the

State is not a needy State, an amount equal to the amount

(if any) by which—

‘‘(i) the total amount paid to the State under paragraph (3) of this subsection in the fiscal year; exceeds

‘‘(ii) the product of—

‘‘(I) the Federal medical assistance percentage

for the State (as defined in section 1905(b), as

such section was in effect on September 30, 1995);

‘‘(II) the State’s reimbursable expenditures for

the fiscal year; and

‘‘(III) 1⁄12 times the number of months during

the fiscal year for which the Secretary made a

payment to the State under such paragraph (3).

‘‘(B) DEFINITIONS.—As used in subparagraph (A):

‘‘(i) REIMBURSABLE EXPENDITURES.—The term

‘reimbursable expenditures’ means, with respect to a

State and a fiscal year, the amount (if any) by which—

‘‘(I) countable State expenditures for the fiscal

year; exceeds

‘‘(II) historic State expenditures (as defined

in section 409(a)(7)(B)(iii)), excluding any amount

expended by the State for child care under subsection (g) or (i) of section 402 (as in effect during

fiscal year 1994) for fiscal year 1994.

‘‘(ii) COUNTABLE STATE EXPENDITURES.—The term

‘countable expenditures’ means, with respect to a State

and a fiscal year—

‘‘(I) the qualified State expenditures (as

defined in section 409(a)(7)(B)(i) (other than the

expenditures described in subclause (I)(bb) of such

section)) under the State program funded under

this part for the fiscal year; plus
H. R. 2015—359

‘‘(II) any amount paid to the State under paragraph (3) during the fiscal year that is expended

by the State under the State program funded

under this part.’’.

(f) ADMINISTRATION OF CONTINGENCY FUND TRANSFERRED TO

THE SECRETARY OF HHS.—Section 403(b)(7) (42 U.S.C. 603(b)(7))

is amended to read as follows:

‘‘(7) STATE DEFINED.—As used in this subsection, the term

‘State’ means each of the 50 States and the District of Columbia.’’.

SEC. 5503. USE OF GRANTS.

Section 404(a)(2) (42 U.S.C. 604(a)(2)) is amended by inserting

‘‘, or (at the option of the State) August 21, 1996’’ before the

period.

SEC. 5504. MANDATORY WORK REQUIREMENTS.

(a) FAMILY WITH A DISABLED PARENT NOT TREATED AS A 2-

PARENT FAMILY.—Section 407(b)(2) (42 U.S.C. 607(b)(2)) is amended

by adding at the end the following:

‘‘(C) FAMILY WITH A DISABLED PARENT NOT TREATED

AS A 2-PARENT FAMILY.—A family that includes a disabled

parent shall not be considered a 2-parent family for purposes of subsections (a) and (b) of this section.’’.

(b) CORRECTION OF HEADING.—Section 407(b)(3) (42 U.S.C.

607(b)(3)) is amended in the heading by inserting ‘‘AND NOT RESULT- ING FROM CHANGES IN STATE ELIGIBILITY CRITERIA’’ before the period.

(c) STATE OPTION TO INCLUDE INDIVIDUALS RECEIVING ASSIST- ANCE UNDER A TRIBAL WORK PROGRAM IN PARTICIPATION RATE

CALCULATION.—Section 407(b)(4) (42 U.S.C. 607(b)(4)) is amended—

(1) in the heading, by inserting ‘‘OR TRIBAL WORK PROGRAM’’ before the period; and

(2) by inserting ‘‘or under a tribal work program to which

funds are provided under this part’’ before the period.

(d) SHARING OF 35-HOUR WORK REQUIREMENT BETWEEN PAR- ENTS IN 2-PARENT FAMILIES.—Section 407(c)(1)(B) (42 U.S.C.

607(c)(1)(B)) is amended—

(1) in clause (i)—

(A) by striking ‘‘is’’ and inserting ‘‘and the other parent

in the family are’’; and

(B) by inserting ‘‘a total of’’ before ‘‘at least’’; and

(2) in clause (ii)—

(A) by striking ‘‘individual’s spouse is’’ and inserting

‘‘individual and the other parent in the family are’’;

(B) by inserting ‘‘for a total of at least 55 hours per

week’’ before ‘‘during the month’’;

(C) by striking ‘‘20’’ and inserting ‘‘50’’; and

(D) by striking ‘‘or (7)’’ and inserting ‘‘(6), (7), (8),

or (12)’’.

(e) CLARIFICATION OF EFFORT REQUIRED IN WORK ACTIVITIES.—

Section 407(c)(1)(B) (42 U.S.C. 607(c)(1)(B)) is amended by striking

‘‘making progress’’ each place such term appears and inserting

‘‘participating’’.

(f) ADDITIONAL CONDITION UNDER WHICH 12 WEEKS OF JOB

SEARCH MAY COUNT AS WORK.—Section 407(c)(2)(A)(i) (42 U.S.C.

607(c)(2)(A)(i)) is amended by inserting ‘‘or the State is a needy

State (within the meaning of section 403(b)(6))’’ after ‘‘United

States’’.
H. R. 2015—360

(g) CARETAKER RELATIVE OF CHILD UNDER AGE 6 DEEMED

TO BE MEETING WORK REQUIREMENTS IF ENGAGED IN WORK FOR

20 HOURS PER WEEK.—Section 407(c)(2)(B) (42 U.S.C. 607(c)(2)(B))

is amended—

(1) in the heading, by inserting ‘‘OR RELATIVE’’ after ‘‘PARENT’’ each place such term appears; and

(2) by striking ‘‘in a 1-parent family who is the parent’’

and inserting ‘‘who is the only parent or caretaker relative

in the family’’.

(h) EXTENSION TO MARRIED TEENS OF RULE THAT RECEIPT

OF SUFFICIENT EDUCATION IS ENOUGH TO MEET WORK PARTICIPATION REQUIREMENTS.—Section 407(c)(2)(C) (42 U.S.C. 607(c)(2)(C))

is amended—

(1) in the heading, by striking ‘‘TEEN HEAD OF HOUSEHOLD’’

and inserting ‘‘SINGLE TEEN HEAD OF HOUSEHOLD OR MARRIED

TEEN’’;

(2) by striking ‘‘a single’’ and inserting ‘‘married or a’’;

and

(3) by striking ‘‘, subject to subparagraph (D) of this paragraph,’’.

(i) CLARIFICATION OF NUMBER OF HOURS OF PARTICIPATION

IN EDUCATION DIRECTLY RELATED TO EMPLOYMENT THAT ARE

REQUIRED IN ORDER FOR SINGLE TEEN HEAD OF HOUSEHOLD OR

MARRIED TEEN TO BE DEEMED TO BE ENGAGED IN WORK.—Section

407(c)(2)(C)(ii) (42 U.S.C. 607(c)(2)(C)(ii)) is amended by striking

‘‘at least’’ and all that follows through ‘‘subsection’’ and inserting

‘‘an average of at least 20 hours per week during the month’’.

(j) CLARIFICATION OF REFUSAL TO WORK FOR PURPOSES OF

WORK PENALTIES FOR INDIVIDUALS.—Section 407(e)(2) (42 U.S.C.

607(e)(2)) is amended by striking ‘‘work’’ and inserting ‘‘engage

in work required in accordance with this section’’.

SEC. 5505. PROHIBITIONS; REQUIREMENTS.

(a) ELIMINATION OF REDUNDANT LANGUAGE; CLARIFICATION OF

HOME RESIDENCE REQUIREMENT.—Section 408(a)(1) (42 U.S.C.

608(a)(1)) is amended to read as follows:

‘‘(1) NO ASSISTANCE FOR FAMILIES WITHOUT A MINOR

CHILD.—A State to which a grant is made under section 403

shall not use any part of the grant to provide assistance to

a family, unless the family includes a minor child who resides

with the family (consistent with paragraph (10)) or a pregnant

individual.’’.

(b) CLARIFICATION OF TERMINOLOGY.—Section 408(a)(3) (42

U.S.C. 608(a)(3)) is amended—

(1) by striking ‘‘leaves’’ the 1st, 3rd, and 4th places such

term appears and inserting ‘‘ceases to receive assistance under’’;

and

(2) by striking ‘‘the date the family leaves the program’’

the 2nd place such term appears and inserting ‘‘such date’’.

(c) ELIMINATION OF SPACE.—Section 408(a)(5)(A)(ii) (42 U.S.C.

608(a)(5)(A)(ii)) is amended by striking ‘‘DESCRIBED.— For’’ and

inserting ‘‘DESCRIBED.—For’’.

(d) CORRECTIONS TO 5-YEAR LIMIT ON ASSISTANCE.—

(1) CLARIFICATION OF LIMITATION ON HARDSHIP EXEMPTION.—Section 408(a)(7)(C)(ii) (42 U.S.C. 608(a)(7)(C)(ii)) is

amended—
H. R. 2015—361

(A) by striking ‘‘The number’’ and inserting ‘‘The average monthly number’’; and

(B) by inserting ‘‘during the fiscal year or the immediately preceding fiscal year (but not both), as the State

may elect’’ before the period.

(2) RESIDENCE EXCEPTION MADE MORE UNIFORM AND EASIER

TO ADMINISTER.—Section 408(a)(7)(D) (42 U.S.C. 608(a)(7)(D))

is amended to read as follows:

‘‘(D) DISREGARD OF MONTHS OF ASSISTANCE RECEIVED

BY ADULT WHILE LIVING IN INDIAN COUNTRY OR AN ALASKAN

NATIVE VILLAGE WITH 50 PERCENT UNEMPLOYMENT.—

‘‘(i) IN GENERAL.—In determining the number of

months for which an adult has received assistance

under a State or tribal program funded under this

part, the State or tribe shall disregard any month

during which the adult lived in Indian country or an

Alaskan Native village if the most reliable data available with respect to the month (or a period including

the month) indicate that at least 50 percent of the

adults living in Indian country or in the village were

not employed.

‘‘(ii) INDIAN COUNTRY DEFINED.—As used in clause

(i), the term ‘Indian country’ has the meaning given

such term in section 1151 of title 18, United States

Code.’’.

(e) REINSTATEMENT OF DEEMING AND OTHER RULES APPLICABLE

TO ALIENS WHO ENTERED THE UNITED STATES UNDER AFFIDAVITS

OF SUPPORT FORMERLY USED.—Section 408 (42 U.S.C. 608), as

amended by section 5001(h)(1) of this Act, is amended by striking

subsection (e) and inserting the following:

‘‘(e) SPECIAL RULES RELATING TO TREATMENT OF CERTAIN

ALIENS.—For special rules relating to the treatment of certain

aliens, see title IV of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996.

‘‘(f) SPECIAL RULES RELATING TO THE TREATMENT OF NON- 213A ALIENS.—The following rules shall apply if a State elects

to take the income or resources of any sponsor of a non-213A

alien into account in determining whether the alien is eligible

for assistance under the State program funded under this part,

or in determining the amount or types of such assistance to be

provided to the alien:

‘‘(1) DEEMING OF SPONSOR’S INCOME AND RESOURCES.—For

a period of 3 years after a non-213A alien enters the United

States:

‘‘(A) INCOME DEEMING RULE.—The income of any sponsor of the alien and of any spouse of the sponsor is deemed

to be income of the alien, to the extent that the total

amount of the income exceeds the sum of—

‘‘(i) the lesser of—

‘‘(I) 20 percent of the total of any amounts

received by the sponsor or any such spouse in

the month as wages or salary or as net earnings

from self-employment, plus the full amount of any

costs incurred by the sponsor and any such spouse

in producing self-employment income in such

month; or

‘‘(II) $175;
H. R. 2015—362

‘‘(ii) the cash needs standard established by the

State for purposes of determining eligibility for assistance under the State program funded under this part

for a family of the same size and composition as the

sponsor and any other individuals living in the same

household as the sponsor who are claimed by the sponsor as dependents for purposes of determining the

sponsor’s Federal personal income tax liability but

whose needs are not taken into account in determining

whether the sponsor’s family has met the cash needs

standard;

‘‘(iii) any amounts paid by the sponsor or any

such spouse to individuals not living in the household

who are claimed by the sponsor as dependents for

purposes of determining the sponsor’s Federal personal

income tax liability; and

‘‘(iv) any payments of alimony or child support

with respect to individuals not living in the household.

‘‘(B) RESOURCE DEEMING RULE.—The resources of a

sponsor of the alien and of any spouse of the sponsor

are deemed to be resources of the alien to the extent

that the aggregate value of the resources exceeds $1,500.

‘‘(C) SPONSORS OF MULTIPLE NON-213A ALIENS.—If a

person is a sponsor of 2 or more non-213A aliens who

are living in the same home, the income and resources

of the sponsor and any spouse of the sponsor that would

be deemed income and resources of any such alien under

subparagraph (A) shall be divided into a number of equal

shares equal to the number of such aliens, and the State

shall deem the income and resources of each such alien

to include 1 such share.

‘‘(2) INELIGIBILITY OF NON-213A ALIENS SPONSORED BY AGENCIES; EXCEPTION.—A non-213A alien whose sponsor is or was

a public or private agency shall be ineligible for assistance

under a State program funded under this part, during a period

of 3 years after the alien enters the United States, unless

the State agency administering the program determines that

the sponsor either no longer exists or has become unable to

meet the alien’s needs.

‘‘(3) INFORMATION PROVISIONS.—

‘‘(A) DUTIES OF NON-213A ALIENS.—A non-213A alien,

as a condition of eligibility for assistance under a State

program funded under this part during the period of 3

years after the alien enters the United States, shall be

required to provide to the State agency administering the

program—

‘‘(i) such information and documentation with

respect to the alien’s sponsor as may be necessary

in order for the State agency to make any determination required under this subsection, and to obtain any

cooperation from the sponsor necessary for any such

determination; and

‘‘(ii) such information and documentation as the

State agency may request and which the alien or the

alien’s sponsor provided in support of the alien’s

immigration application.
H. R. 2015—363

‘‘(B) DUTIES OF FEDERAL AGENCIES.—The Secretary

shall enter into agreements with the Secretary of State

and the Attorney General under which any information

available to them and required in order to make any determination under this subsection will be provided by them

to the Secretary (who may, in turn, make the information

available, upon request, to a concerned State agency).

‘‘(4) NON-213A ALIEN DEFINED.—An alien is a non-213A

alien for purposes of this subsection if the affidavit of support

or similar agreement with respect to the alien that was executed

by the sponsor of the alien’s entry into the United States

was executed other than pursuant to section 213A of the

Immigration and Nationality Act.

‘‘(5) INAPPLICABILITY TO ALIEN MINOR SPONSORED BY A PARENT.—This subsection shall not apply to an alien who is a

minor child if the sponsor of the alien or any spouse of the

sponsor is a parent of the alien.

‘‘(6) INAPPLICABILITY TO CERTAIN CATEGORIES OF ALIENS.—

This subsection shall not apply to an alien who is—

‘‘(A) admitted to the United States as a refugee under

section 207 of the Immigration and Nationality Act;

‘‘(B) paroled into the United States under section

212(d)(5) of such Act for a period of at least 1 year; or

‘‘(C) granted political asylum by the Attorney General

under section 208 of such Act.’’.

SEC. 5506. PENALTIES.

(a) STATES GIVEN MORE TIME TO FILE QUARTERLY REPORTS.—

Section 409(a)(2)(A) (42 U.S.C. 609(a)(2)(A)) is amended by striking

‘‘1 month’’ and inserting ‘‘45 days’’.

(b) TREATMENT OF SUPPORT PAYMENTS PASSED THROUGH TO

FAMILIES AS QUALIFIED STATE EXPENDITURES.—Section

409(a)(7)(B)(i)(I)(aa) (42 U.S.C. 609(a)(7)(B)(i)(I)(aa)) is amended by

inserting ‘‘, including any amount collected by the State as support

pursuant to a plan approved under part D, on behalf of a family

receiving assistance under the State program funded under this

part, that is distributed to the family under section 457(a)(1)(B)

and disregarded in determining the eligibility of the family for,

and the amount of, such assistance’’ before the period.

(c) DISREGARD OF EXPENDITURES MADE TO REPLACE PENALTY

GRANT REDUCTIONS.—Section 409(a)(7)(B)(i) (42 U.S.C.

609(a)(7)(B)(i)) is amended by redesignating subclause (III) as subclause (IV) and by inserting after subclause (II) the following:

‘‘(III) EXCLUSION OF AMOUNTS EXPENDED TO

REPLACE PENALTY GRANT REDUCTIONS.—Such term

does not include any amount expended in order

to comply with paragraph (12).’’.

(d) TREATMENT OF FAMILIES OF CERTAIN ALIENS AS ELIGIBLE

FAMILIES.—Section 409(a)(7)(B)(i)(IV) (42 U.S.C. 609(a)(7)(B)(i)(IV)),

as so redesignated by subsection (c) of this section, is amended—

(1) by striking ‘‘and families’’ and inserting ‘‘families’’; and

(2) by striking ‘‘Act or section 402’’ and inserting ‘‘Act,

and families of aliens lawfully present in the United States

that would be eligible for such assistance but for the application

of title IV’’.
H. R. 2015—364

(e) ELIMINATION OF MEANINGLESS LANGUAGE.—Section

409(a)(7)(B)(ii) (42 U.S.C. 609(a)(7)(B)(ii)) is amended by striking

‘‘reduced (if appropriate) in accordance with subparagraph (C)(ii)’’.

(f) CLARIFICATION OF SOURCE OF DATA TO BE USED IN DETERMINING HISTORIC STATE EXPENDITURES.—Section 409(a)(7)(B) (42

U.S.C. 609(a)(7)(B)) is amended by adding at the end the following:

‘‘(v) SOURCE OF DATA.—In determining expenditures by a State for fiscal years 1994 and 1995, the

Secretary shall use information which was reported

by the State on ACF Form 231 or (in the case of

expenditures under part F) ACF Form 331, available

as of the dates specified in clauses (ii) and (iii) of

section 403(a)(1)(D).’’.

(g) CONFORMING TITLE IV–A PENALTIES TO TITLE IV–D

PERFORMANCE-BASED STANDARDS.—Section 409(a)(8) (42 U.S.C.

609(a)(8)) is amended to read as follows:

‘‘(8) NONCOMPLIANCE OF STATE CHILD SUPPORT ENFORCEMENT PROGRAM WITH REQUIREMENTS OF PART D.—

‘‘(A) IN GENERAL.—If the Secretary finds, with respect

to a State’s program under part D, in a fiscal year beginning on or after October 1, 1997—

‘‘(i)(I) on the basis of data submitted by a State

pursuant to section 454(15)(B), or on the basis of the

results of a review conducted under section 452(a)(4),

that the State program failed to achieve the paternity

establishment percentages (as defined in section

452(g)(2)), or to meet other performance measures that

may be established by the Secretary;

‘‘(II) on the basis of the results of an audit or

audits conducted under section 452(a)(4)(C)(i) that the

State data submitted pursuant to section 454(15)(B)

is incomplete or unreliable; or

‘‘(III) on the basis of the results of an audit or

audits conducted under section 452(a)(4)(C) that a

State failed to substantially comply with 1 or more

of the requirements of part D; and

‘‘(ii) that, with respect to the succeeding fiscal

year—

‘‘(I) the State failed to take sufficient corrective

action to achieve the appropriate performance levels or compliance as described in subparagraph

(A)(i); or

‘‘(II) the data submitted by the State pursuant

to section 454(15)(B) is incomplete or unreliable;

the amounts otherwise payable to the State under this

part for quarters following the end of such succeeding

fiscal year, prior to quarters following the end of the first

quarter throughout which the State program has achieved

the paternity establishment percentages or other performance measures as described in subparagraph (A)(i)(I), or

is in substantial compliance with 1 or more of the requirements of part D as described in subparagraph (A)(i)(III),

as appropriate, shall be reduced by the percentage specified

in subparagraph (B).

‘‘(B) AMOUNT OF REDUCTIONS.—The reductions required

under subparagraph (A) shall be—

‘‘(i) not less than 1 nor more than 2 percent;
H. R. 2015—365

‘‘(ii) not less than 2 nor more than 3 percent,

if the finding is the 2nd consecutive finding made

pursuant to subparagraph (A); or

‘‘(iii) not less than 3 nor more than 5 percent,

if the finding is the 3rd or a subsequent consecutive

such finding.

‘‘(C) DISREGARD OF NONCOMPLIANCE WHICH IS OF A

TECHNICAL NATURE.—For purposes of this section and section 452(a)(4), a State determined as a result of an audit—

‘‘(i) to have failed to have substantially complied

with 1 or more of the requirements of part D shall

be determined to have achieved substantial compliance

only if the Secretary determines that the extent of

the noncompliance is of a technical nature which does

not adversely affect the performance of the State’s

program under part D; or

‘‘(ii) to have submitted incomplete or unreliable

data pursuant to section 454(15)(B) shall be determined to have submitted adequate data only if the

Secretary determines that the extent of the incompleteness or unreliability of the data is of a technical nature

which does not adversely affect the determination of

the level of the State’s paternity establishment percentages (as defined under section 452(g)(2)) or other

performance measures that may be established by the

Secretary.’’.

(h) CORRECTION OF REFERENCE TO 5-YEAR LIMIT ON ASSISTANCE.—Section 409(a)(9) (42 U.S.C. 609(a)(9)) is amended by striking ‘‘408(a)(1)(B)’’ and inserting ‘‘408(a)(7)’’.

(i) CORRECTION OF ERRORS IN PENALTY FOR FAILURE TO MEET

MAINTENANCE OF EFFORT REQUIREMENT APPLICABLE TO THE

CONTINGENCY FUND.—Section 409(a)(10) (42 U.S.C. 609(a)(10)) is

amended—

(1) by striking ‘‘the expenditures under the State program

funded under this part for the fiscal year (excluding any

amounts made available by the Federal Government)’’ and

inserting ‘‘the qualified State expenditures (as defined in paragraph (7)(B)(i) (other than the expenditures described in subclause (I)(bb) of that paragraph)) under the State program

funded under this part for the fiscal year’’;

(2) by inserting ‘‘excluding any amount expended by the

State for child care under subsection (g) or (i) of section 402

(as in effect during fiscal year 1994) for fiscal year 1994,’’

after ‘‘(as defined in paragraph (7)(B)(iii) of this subsection),’’;

and

(3) by inserting ‘‘that the State has not remitted under

section 403(b)(6)’’ before the period.

(j) PENALTY FOR STATE FAILURE TO EXPEND ADDITIONAL STATE

FUNDS TO REPLACE GRANT REDUCTIONS.—Section 409(a)(12) (42

U.S.C. 609(a)(12)) is amended—

(1) in the heading—

(A) by striking ‘‘FAILURE’’ and inserting ‘‘REQUIREMENT’’; and

(B) by striking ‘‘REDUCTIONS’’ and inserting ‘‘REDUCTIONS; PENALTY FOR FAILURE TO DO SO’’; and

(2) by adding at the end the following: ‘‘If the State fails

during such succeeding fiscal year to make the expenditure
H. R. 2015—366

required by the preceding sentence from its own funds, the

Secretary may reduce the grant payable to the State under

section 403(a)(1) for the fiscal year that follows such succeeding

fiscal year by an amount equal to the sum of—

‘‘(A) not more than 2 percent of the State family assistance grant; and

‘‘(B) the amount of the expenditure required by the

preceding sentence.’’.

(k) ELIMINATION OF CERTAIN REASONABLE CAUSE EXCEPTIONS.—Section 409(b)(2) (42 U.S.C. 609(b)(2)) is amended by striking ‘‘(7) or (8)’’ and inserting ‘‘(6), (7), (8), (10), or (12)’’.

(l) CLARIFICATION OF WHAT IT MEANS TO CORRECT A VIOLATION.—Section 409(c) (42 U.S.C. 609(c)) is amended—

(1) in each of subparagraphs (A) and (B) of paragraph

(1), by inserting ‘‘or discontinue, as appropriate,’’ after ‘‘correct’’;

(2) in paragraph (2)—

(A) in the heading, by inserting ‘‘OR DISCONTINUING’’

after ‘‘CORRECTING’’; and

(B) by inserting ‘‘or discontinues, as appropriate’’ after

‘‘corrects’’; and

(3) in paragraph (3)—

(A) in the heading, by inserting ‘‘OR DISCONTINUE’’ after

‘‘CORRECT’’; and

(B) by inserting ‘‘or discontinue, as appropriate,’’ before

‘‘the violation’’.

(m) CERTAIN PENALTIES NOT AVOIDABLE THROUGH CORRECTIVE

COMPLIANCE PLANS.—Section 409(c)(4) (42 U.S.C. 609(c)(4)) is

amended to read as follows:

‘‘(4) INAPPLICABILITY TO CERTAIN PENALTIES.—This subsection shall not apply to the imposition of a penalty against

a State under paragraph (6), (7), (8), (10), or (12) of subsection

(a).’’.

(n) FAILURE TO SATISFY MINIMUM PARTICIPATION RATES.—Section 409(a)(3) (42 U.S.C. 609(a)(3)) is amended—

(1) in subparagraph (A), by striking ‘‘not more than’’; and

(2) in subparagraph (C), by inserting before the period

the following: ‘‘or if the noncompliance is due to extraordinary

circumstances such as a natural disaster or regional recession.

The Secretary shall provide a written report to Congress to

justify any waiver or penalty reduction due to such extraordinary circumstances’’.

SEC. 5507. DATA COLLECTION AND REPORTING.

Section 411(a) (42 U.S.C. 611(a)) is amended—

(1) in paragraph (1)—

(A) in subparagraph (A)—

(i) by striking clause (ii) and inserting the following:

‘‘(ii) Whether a child receiving such assistance or

an adult in the family is receiving—

‘‘(I) Federal disability insurance benefits;

‘‘(II) benefits based on Federal disability status;

‘‘(III) aid under a State plan approved under

title XIV (as in effect without regard to the amendment made by section 301 of the Social Security

Amendments of 1972));
H. R. 2015—367

‘‘(IV) aid or assistance under a State plan

approved under title XVI (as in effect without

regard to such amendment) by reason of being

permanently and totally disabled; or

‘‘(V) supplemental security income benefits

under title XVI (as in effect pursuant to such

amendment) by reason of disability.’’;

(ii) in clause (iv), by striking ‘‘youngest child in’’

and inserting ‘‘head of’’;

(iii) in each of clauses (vii) and (viii), by striking

‘‘status’’ and inserting ‘‘level’’; and

(iv) by adding at the end the following:

‘‘(xvii) With respect to each individual in the family

who has not attained 20 years of age, whether the

individual is a parent of a child in the family.’’; and

(B) in subparagraph (B)—

(i) in the heading, by striking ‘‘ESTIMATES’’ and

inserting ‘‘SAMPLES’’; and

(ii) in clause (i), by striking ‘‘an estimate which

is obtained’’ and inserting ‘‘disaggregated case record

information on a sample of families selected’’; and

(2) by redesignating paragraph (6) as paragraph (7) and

inserting after paragraph (5) the following:

‘‘(6) REPORT ON FAMILIES RECEIVING ASSISTANCE.—The

report required by paragraph (1) for a fiscal quarter shall

include for each month in the quarter—

‘‘(A) the number of families and individuals receiving

assistance under the State program funded under this part

(including the number of 2-parent and 1-parent families);

and

‘‘(B) the total dollar value of such assistance received

by all families.’’.

SEC. 5508. DIRECT FUNDING AND ADMINISTRATION BY INDIAN TRIBES.

(a) PRORATING OF TRIBAL FAMILY ASSISTANCE GRANTS.—Section

412(a)(1)(A) (42 U.S.C. 612(a)(1)(A)) is amended by inserting ‘‘which

shall be reduced for a fiscal year, on a pro rata basis for each

quarter, in the case of a tribal family assistance plan approved

during a fiscal year for which the plan is to be in effect,’’ before

‘‘and shall’’.

(b) TRIBAL OPTION TO OPERATE WORK ACTIVITIES PROGRAM.— Section 412(a)(2)(A) (42 U.S.C. 612(a)(2)(A)) is amended by striking

‘‘The Secretary’’ and all that follows through ‘‘2002’’ and inserting

‘‘For each of fiscal years 1997, 1998, 1999, 2000, 2001, and 2002,

the Secretary shall pay to each eligible Indian tribe that proposes

to operate a program described in subparagraph (C)’’.

(c) DISCRETION OF TRIBES TO SELECT POPULATION TO BE

SERVED BY TRIBAL WORK ACTIVITIES PROGRAM.—Section

412(a)(2)(C) (42 U.S.C. 612(a)(2)(C)) is amended by striking ‘‘members of the Indian tribe’’ and inserting ‘‘such population and such

service area or areas as the tribe specifies’’.

(d) REDUCTION OF APPROPRIATION FOR TRIBAL WORK ACTIVITIES

PROGRAMS.—Section 412(a)(2)(D) (42 U.S.C. 612(a)(2)(D)) is amended by striking ‘‘$7,638,474’’ and inserting ‘‘$7,633,287’’.

(e) AVAILABILITY OF CORRECTIVE COMPLIANCE PLANS TO INDIAN

TRIBES.—Section 412(f)(1) (42 U.S.C. 612(f)(1)) is amended by striking ‘‘and (b)’’ and inserting ‘‘(b), and (c)’’.
H. R. 2015—368

(f) ELIGIBILITY OF TRIBES FOR FEDERAL LOANS FOR WELFARE

PROGRAMS.—Section 412 (42 U.S.C. 612) is amended by redesignating subsections (f), (g), and (h) as subsections (g), (h), and (i),

respectively, and by inserting after subsection (e) the following:

‘‘(f) ELIGIBILITY FOR FEDERAL LOANS.—Section 406 shall apply

to an Indian tribe with an approved tribal assistance plan in the

same manner as such section applies to a State, except that section

406(c) shall be applied by substituting ‘section 412(a)’ for ‘section

403(a)’.’’.

SEC. 5509. RESEARCH, EVALUATIONS, AND NATIONAL STUDIES.

(a) RESEARCH.—

(1) METHODS.—Section 413(a) (42 U.S.C. 613(a)) is amended by inserting ‘‘, directly or through grants, contracts, or

interagency agreements,’’ before ‘‘shall conduct’’.

(2) CORRECTION OF CROSS REFERENCE.—Section 413(a) (42

U.S.C. 613(a)) is amended by striking ‘‘409’’ and inserting ‘‘407’’.

(b) CORRECTION OF ERRONEOUSLY INDENTED PARAGRAPH.—Section 413(e)(1) (42 U.S.C. 613(e)(1)) is amended to read as follows:

‘‘(1) IN GENERAL.—The Secretary shall annually rank States

to which grants are made under section 403 based on the

following ranking factors:

‘‘(A) ABSOLUTE OUT-OF-WEDLOCK RATIOS.—The ratio

represented by—

‘‘(i) the total number of out-of-wedlock births in

families receiving assistance under the State program

under this part in the State for the most recent year

for which information is available; over

‘‘(ii) the total number of births in families receiving

assistance under the State program under this part

in the State for the year.

‘‘(B) NET CHANGES IN THE OUT-OF-WEDLOCK RATIO.—

The difference between the ratio described in subparagraph

(A) with respect to a State for the most recent year for

which such information is available and the ratio with

respect to the State for the immediately preceding year.’’.

(c) FUNDING OF PRIOR AUTHORIZED DEMONSTRATIONS.—Section

413(h)(1)(D) (42 U.S.C. 613(h)(1)(D)) is amended by striking

‘‘September 30, 1995’’ and inserting ‘‘August 22, 1996’’.

(d) CHILD POVERTY REPORTS.—

(1) DELAYED DUE DATE FOR INITIAL REPORT.—Section

413(i)(1) (42 U.S.C. 613(i)(1)) is amended by striking ‘‘90 days

after the date of the enactment of this part’’ and inserting

‘‘May 31, 1998’’.

(2) MODIFICATION OF FACTORS TO BE USED IN ESTABLISHING

METHODOLOGY FOR USE IN DETERMINING CHILD POVERTY

RATES.—Section 413(i)(5) (42 U.S.C. 613(i)(5)) is amended by

striking ‘‘the county-by-county’’ and inserting ‘‘, to the extent

available, county-by-county’’.

SEC. 5510. REPORT ON DATA PROCESSING.

Section 106(a)(1) of the Personal Responsibility and Work

Opportunity Reconciliation Act of 1996 (Public Law 104–193; 110

Stat. 2164) is amended by striking ‘‘(whether in effect before or

after October 1, 1995)’’.
H. R. 2015—369

SEC. 5511. STUDY ON ALTERNATIVE OUTCOMES MEASURES.

Section 107(a) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (Public Law 104–193; 110 Stat.

2164) is amended by striking ‘‘409(a)(7)(C)’’ and inserting

‘‘408(a)(7)(C)’’.

SEC. 5512. LIMITATION ON PAYMENTS TO THE TERRITORIES.

(a) CERTAIN PAYMENTS TO BE DISREGARDED IN DETERMINING

LIMITATION.—Section 1108(a) (42 U.S.C. 1308) is amended to read

as follows:

‘‘(a) LIMITATION ON TOTAL PAYMENTS TO EACH TERRITORY.—

‘‘(1) IN GENERAL.—Notwithstanding any other provision of

this Act (except for paragraph (2) of this subsection), the total

amount certified by the Secretary of Health and Human Services under titles I, X, XIV, and XVI, under parts A and E

of title IV, and under subsection (b) of this section, for payment

to any territory for a fiscal year shall not exceed the ceiling

amount for the territory for the fiscal year.

‘‘(2) CERTAIN PAYMENTS DISREGARDED.—Paragraph (1) of

this subsection shall be applied without regard to any payment

made under section 403(a)(2), 403(a)(4), 406, or 413(f).’’.

(b) CERTAIN CHILD CARE AND SOCIAL SERVICES EXPENDITURES

BY TERRITORIES TREATED AS IV–A EXPENDITURES FOR PURPOSES

OF MATCHING GRANT.—Section 1108(b)(1)(A) (42 U.S.C.

1308(b)(1)(A)) is amended by inserting ‘‘, including any amount

paid to the State under part A of title IV that is transferred

in accordance with section 404(d) and expended under the program

to which transferred’’ before the semicolon.

(c) ELIMINATION OF DUPLICATIVE MAINTENANCE OF EFFORT

REQUIREMENT.—Section 1108 (42 U.S.C. 1308) is amended by striking subsection (e).

SEC. 5513. CONFORMING AMENDMENTS TO THE SOCIAL SECURITY ACT.

(a) AMENDMENTS TO PART D OF TITLE IV.—

(1) CORRECTIONS TO DETERMINATION OF PATERNITY

ESTABLISHMENT PERCENTAGES.—Section 452 (42 U.S.C. 652) is

amended—

(A) in subsection (d)(3)(A), by striking all that follows

‘‘for purposes of’’ and inserting ‘‘section 409(a)(8), to achieve

the paternity establishment percentages (as defined under

section 452(g)(2)) and other performance measures that

may be established by the Secretary, and to submit data

under section 454(15)(B) that is complete and reliable, and

to substantially comply with the requirements of this part;

and’’; and

(B) in subsection (g)(1), by striking ‘‘section 403(h)’’

and inserting ‘‘section 409(a)(8)’’.

(2) ELIMINATION OF OBSOLETE LANGUAGE.—Section

108(c)(8)(C) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (Public Law 104–193; 110

Stat. 2165) is amended by inserting ‘‘and all that follows

through ‘the best interests of such child to do so’ ’’ before ‘‘and

inserting’’.

(3) INSERTION OF LANGUAGE INADVERTENTLY OMITTED.—

Section 108(c)(13) of the Personal Responsibility and Work

Opportunity Reconciliation Act of 1996 (Public Law 104–193;
H. R. 2015—370

110 Stat. 2166) is amended by inserting ‘‘and inserting ‘pursuant to section 408(a)(3)’ ’’ before the period.

(4) ELIMINATION OF OBSOLETE CROSS REFERENCE.—Section

464(a)(1) (42 U.S.C. 664(a)(1)) is amended by striking ‘‘section

402(a)(26)’’ and inserting ‘‘section 408(a)(3)’’.

(b) AMENDMENTS TO PART E OF TITLE IV.—Each of the following

is amended by striking ‘‘June 1, 1995’’ each place such term appears

and inserting ‘‘July 16, 1996’’:

(1) Section 472(a) (42 U.S.C. 672(a)).

(2) Section 472(h) (42 U.S.C. 672(h)).

(3) Section 473(a)(2) (42 U.S.C. 673(a)(2)).

(4) Section 473(b) (42 U.S.C. 673(b)).

SEC. 5514. OTHER CONFORMING AMENDMENTS.

(a) ELIMINATION OF AMENDMENTS INCLUDED INADVERTENTLY.—

Section 110(l) of the Personal Responsibility and Work Opportunity

Reconciliation Act of 1996 (Public Law 104–193; 110 Stat. 2173)

is amended—

(1) by striking paragraphs (1), (4), (5), and (7);

(2) by redesignating paragraphs (2), (3), (6), and (8) as

paragraphs (1), (2), (3), and (4), respectively; and

(3) by adding ‘‘and’’ at the end of paragraph (3), as so

redesignated.

(b) CORRECTION OF CITATION.—Section 109(f) of the Personal

Responsibility and Work Opportunity Reconciliation Act of 1996

(Public Law 104–193; 110 Stat. 2177) is amended by striking ‘‘93–

186’’ and inserting ‘‘93–86’’.

(c) CORRECTION OF INTERNAL CROSS REFERENCE.—Section

103(a)(1) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (Public Law 104–193; 110 Stat. 2112) is

amended by striking ‘‘603(b)(2)’’ and inserting ‘‘603(b)’’.

(d) CORRECTION OF REFERENCES.—Section 416 (42 U.S.C. 616)

is amended by striking ‘‘amendment made by section 2103 of the

Personal Responsibility and Work Opportunity’’ and inserting

‘‘amendments made by section 103 of the Personal Responsibility

and Work Opportunity Reconciliation’’.

SEC. 5515. MODIFICATIONS TO THE JOB OPPORTUNITIES FOR CERTAIN

LOW-INCOME INDIVIDUALS PROGRAM.

Section 112(5) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (Public Law 104–193; 110 Stat.

2177) is amended in each of subparagraphs (A) and (B) by inserting

‘‘under’’ after ‘‘funded’’.

SEC. 5516. DENIAL OF ASSISTANCE AND BENEFITS FOR DRUG-RELATED

CONVICTIONS.

(a) EXTENSION OF CERTAIN REQUIREMENTS COORDINATED WITH

DELAYED EFFECTIVE DATE FOR SUCCESSOR PROVISIONS.—Section

115(d)(2) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (Public Law 104–193; 110 Stat. 2181) is

amended by striking ‘‘convictions’’ and inserting ‘‘a conviction if

the conviction is for conduct’’.

(b) IMMEDIATE EFFECTIVENESS OF PROVISIONS RELATING TO

RESEARCH, EVALUATIONS, AND NATIONAL STUDIES.—Section 116(a)

of the Personal Responsibility and Work Opportunity Reconciliation

Act of 1996 (Public Law 104–193; 110 Stat. 2181) is amended

by adding at the end the following:
H. R. 2015—371

‘‘(6) RESEARCH, EVALUATIONS, AND NATIONAL STUDIES.—Section 413 of the Social Security Act, as added by the amendment

made by section 103(a) of this Act, shall take effect on the

date of the enactment of this Act.’’.

SEC. 5517. TRANSITION RULE.

Section 116 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (Public Law 104–193; 110 Stat.

2181) is amended—

(1) in subsection (a)(2), by inserting ‘‘(but subject to subsection (b)(1)(A)(ii))’’ after ‘‘this section’’; and

(2) in subsection (b)(1)(A)(ii), by striking ‘‘June 30, 1997’’

and inserting ‘‘the later of June 30, 1997, or the day before

the date described in subsection (a)(2)(B) of this section’’.

SEC. 5518. EFFECTIVE DATES.

(a) AMENDMENTS TO PART A OF TITLE IV OF THE SOCIAL SECU- RITY ACT.—The amendments made by this chapter to a provision

of part A of title IV of the Social Security Act shall take effect

as if the amendments had been included in section 103(a) of the

Personal Responsibility and Work Opportunity Reconciliation Act

of 1996 at the time such section became law.

(b) AMENDMENTS TO PARTS D AND E OF TITLE IV OF THE

SOCIAL SECURITY ACT.—The amendments made by section 5513

of this Act shall take effect as if the amendments had been included

in section 108 of the Personal Responsibility and Work Opportunity

Reconciliation Act of 1996 at the time such section 108 became

law.

(c) AMENDMENTS TO OTHER AMENDATORY PROVISIONS.—The

amendments made by section 5514(a) of this Act shall take effect

as if the amendments had been included in section 110 of the

Personal Responsibility and Work Opportunity Reconciliation Act

of 1996 at the time such section 110 became law.

(d) AMENDMENTS TO FREESTANDING PROVISIONS OF THE PER- SONAL RESPONSIBILITY AND WORK OPPORTUNITY RECONCILIATION

ACT OF 1996.—The amendments made by this chapter to a provision

of the Personal Responsibility and Work Opportunity Reconciliation

Act of 1996 that have not become part of another statute shall

take effect as if the amendments had been included in the provision

at the time the provision became law.

CHAPTER 2—SUPPLEMENTAL SECURITY INCOME

SEC. 5521. CONFORMING AND TECHNICAL AMENDMENTS RELATING

TO ELIGIBILITY RESTRICTIONS.

(a) DENIAL OF SSI BENEFITS FOR FUGITIVE FELONS AND PROBA- TION AND PAROLE VIOLATORS.—Section 1611(e)(6) (42 U.S.C.

1382(e)(6)) is amended by inserting ‘‘and section 1106(c) of this

Act’’ after ‘‘of 1986’’.

(b) TREATMENT OF PRISONERS.—Section 1611(e)(1)(I)(i)(II) (42

U.S.C. 1382(e)(1)(I)(i)(II)) is amended by striking ‘‘inmate of the

institution’’ and all that follows through ‘‘this subparagraph’’ and

inserting ‘‘individual who receives in the month preceding the first

month throughout which such individual is an inmate of the jail,

prison, penal institution, or correctional facility that furnishes

information respecting such individual pursuant to subclause (I),

or is confined in the institution (that so furnishes such information)

as described in section 202(x)(1)(A)(ii), a benefit under this title
H. R. 2015—372

for such preceding month, and who is determined by the Commissioner to be ineligible for benefits under this title by reason of

confinement based on the information provided by such institution’’.

(c) CORRECTION OF REFERENCE.—Section 1611(e)(1)(I)(i)(I) (42

U.S.C. 1382(e)(1)(I)(i)(I)) is amended by striking ‘‘paragraph (1)’’

and inserting ‘‘this paragraph’’.

SEC. 5522. CONFORMING AND TECHNICAL AMENDMENTS RELATING

TO BENEFITS FOR DISABLED CHILDREN.

(a) ELIGIBILITY REDETERMINATIONS AND CONTINUING DISABILITY

REVIEWS.—

(1) DISABILITY ELIGIBILITY REDETERMINATIONS REQUIRED

FOR SSI RECIPIENTS WHO ATTAIN 18 YEARS OF AGE.—Section

1614(a)(3)(H)(iii) (42 U.S.C. 1382c(a)(3)(H)(iii)) is amended by

striking subclauses (I) and (II) and all that follows and inserting

the following:

‘‘(I) by applying the criteria used in determining initial

eligibility for individuals who are age 18 or older; and

‘‘(II) either during the 1-year period beginning on the

individual’s 18th birthday or, in lieu of a continuing disability

review, whenever the Commissioner determines that an individual’s case is subject to a redetermination under this clause.

With respect to any redetermination under this clause, paragraph

(4) shall not apply.’’.

(2) CONTINUING DISABILITY REVIEW REQUIRED FOR LOW

BIRTH WEIGHT BABIES.—Section 1614(a)(3)(H)(iv) (42 U.S.C.

1382c(a)(3)(H)(iv)) is amended—

(A) in subclause (I), by striking ‘‘Not’’ and inserting

‘‘Except as provided in subclause (VI), not’’; and

(B) by adding at the end the following:

‘‘(VI) Subclause (I) shall not apply in the case of an individual

described in that subclause who, at the time of the individual’s

initial disability determination, the Commissioner determines has

an impairment that is not expected to improve within 12 months

after the birth of that individual, and who the Commissioner schedules for a continuing disability review at a date that is after the

individual attains 1 year of age.’’.

(b) ADDITIONAL ACCOUNTABILITY REQUIREMENTS.—Section

1631(a)(2)(F) (42 U.S.C. 1383(a)(2)(F)) is amended—

(1) in clause (ii)(III)(bb), by striking ‘‘the total amount’’

and all that follows through ‘‘1613(c)’’ and inserting ‘‘in any

case in which the individual knowingly misapplies benefits

from such an account, the Commissioner shall reduce future

benefits payable to such individual (or to such individual and

his spouse) by an amount equal to the total amount of such

benefits so misapplied’’; and

(2) by striking clause (iii) and inserting the following:

‘‘(iii) The representative payee may deposit into the account

established under clause (i) any other funds representing past due

benefits under this title to the eligible individual, provided that

the amount of such past due benefits is equal to or exceeds the

maximum monthly benefit payable under this title to an eligible

individual (including State supplementary payments made by the

Commissioner pursuant to an agreement under section 1616 or

section 212(b) of Public Law 93–66).’’.
H. R. 2015—373

(c) REDUCTION IN CASH BENEFITS PAYABLE TO INSTITUTIONALIZED INDIVIDUALS WHOSE MEDICAL COSTS ARE COVERED BY PRIVATE

INSURANCE.—Section 1611(e) (42 U.S.C. 1382(e)) is amended—

(1) in paragraph (1)(B)—

(A) in the matter preceding clause (i), by striking ‘‘hospital, extended care facility, nursing home, or intermediate

care facility’’ and inserting ‘‘medical treatment facility’’;

(B) in clause (ii)—

(i) in the matter preceding subclause (I), by striking ‘‘hospital, home or’’; and

(ii) in subclause (I), by striking ‘‘hospital, home,

or’’;

(C) in clause (iii), by striking ‘‘hospital, home, or’’;

and

(D) in the matter following clause (iii), by striking

‘‘hospital, extended care facility, nursing home, or intermediate care facility which is a ‘medical institution or

nursing facility’ within the meaning of section 1917(c)’’

and inserting ‘‘medical treatment facility that provides

services described in section 1917(c)(1)(C)’’;

(2) in paragraph (1)(E)—

(A) in clause (i)(II), by striking ‘‘hospital, extended

care facility, nursing home, or intermediate care facility’’

and inserting ‘‘medical treatment facility’’; and

(B) in clause (iii), by striking ‘‘hospital, extended care

facility, nursing home, or intermediate care facility’’ and

inserting ‘‘medical treatment facility’’;

(3) in paragraph (1)(G), in the matter preceding clause

(i)—

(A) by striking ‘‘or which is a hospital, extended care

facility, nursing home, or intermediate care’’ and inserting

‘‘or is in a medical treatment’’; and

(B) by inserting ‘‘or, in the case of an individual who

is a child under the age of 18, under any health insurance

policy issued by a private provider of such insurance’’ after

‘‘title XIX’’; and

(4) in paragraph (3)—

(A) by striking ‘‘same hospital, home, or facility’’ and

inserting ‘‘same medical treatment facility’’; and

(B) by striking ‘‘same such hospital, home, or facility’’

and inserting ‘‘same such facility’’.

(d) CORRECTION OF U.S.C. CITATION.—Section 211(c) of the

Personal Responsibility and Work Opportunity Reconciliation Act

of 1996 (Public Law 104–193; 110 Stat. 2189) is amended by striking

‘‘1382(a)(4)’’ and inserting ‘‘1382c(a)(4)’’.

SEC. 5523. ADDITIONAL TECHNICAL AMENDMENTS TO TITLE XVI.

Section 1615(d) (42 U.S.C. 1382d(d)) is amended—

(1) in the first sentence, by inserting a comma after ‘‘subsection (a)(1)’’; and

(2) in the last sentence, by striking ‘‘him’’ and inserting

‘‘the Commissioner’’.

SEC. 5524. ADDITIONAL TECHNICAL AMENDMENTS RELATING TO

TITLE XVI.

Section 1110(a)(3) (42 U.S.C. 1310(a)(3)) is amended—
H. R. 2015—374

(1) by inserting ‘‘(or the Commissioner, with respect to

any jointly financed cooperative agreement or grant concerning

title XVI)’’ after ‘‘Secretary’’ the first place it appears; and

(2) by inserting ‘‘(or the Commissioner, as applicable)’’ after

‘‘Secretary’’ the second place it appears.

SEC. 5525. TECHNICAL AMENDMENTS RELATING TO DRUG ADDICTS

AND ALCOHOLICS.

(a) CLARIFICATION RELATING TO THE EFFECTIVE DATE OF THE

DENIAL OF SSI DISABILITY BENEFITS TO DRUG ADDICTS AND

ALCOHOLICS.—Section 105(b)(5) of the Contract with America

Advancement Act of 1996 (Public Law 104–121; 110 Stat. 853)

is amended—

(1) in subparagraph (A), by striking ‘‘by the Commissioner

of Social Security’’ and ‘‘by the Commissioner’’; and

(2) by redesignating subparagraph (D) as subparagraph

(F) and by inserting after subparagraph (C) the following new

subparagraphs:

‘‘(D) For purposes of this paragraph, an individual’s

claim, with respect to supplemental security income benefits under title XVI of the Social Security Act based on

disability, which has been denied in whole before the date

of the enactment of this Act, may not be considered to

be finally adjudicated before such date if, on or after such

date—

‘‘(i) there is pending a request for either administrative or judicial review with respect to such claim,

or

‘‘(ii) there is pending, with respect to such claim,

a readjudication by the Commissioner of Social Security pursuant to relief in a class action or implementation by the Commissioner of a court remand order.

‘‘(E) Notwithstanding the provisions of this paragraph,

with respect to any individual for whom the Commissioner

does not perform the eligibility redetermination before the

date prescribed in subparagraph (C), the Commissioner

shall perform such eligibility redetermination in lieu of

a continuing disability review whenever the Commissioner

determines that the individual’s eligibility is subject to

redetermination based on the preceding provisions of this

paragraph, and the provisions of section 1614(a)(4) of the

Social Security Act shall not apply to such redetermination.’’.

(b) CORRECTIONS TO EFFECTIVE DATE OF PROVISIONS CONCERN- ING REPRESENTATIVE PAYEES AND TREATMENT REFERRALS OF SSI

BENEFICIARIES WHO ARE DRUG ADDICTS AND ALCOHOLICS.—Section

105(b)(5)(B) of such Act (Public Law 104–121; 110 Stat. 853) is

amended to read as follows:

‘‘(B) The amendments made by paragraphs (2) and

(3) shall take effect on July 1, 1996, with respect to any

individual—

‘‘(i) whose claim for benefits is finally adjudicated

on or after the date of the enactment of this Act,

or

‘‘(ii) whose eligibility for benefits is based upon

an eligibility redetermination made pursuant to

subparagraph (C).’’.
H. R. 2015—375

(c) REPEAL OF OBSOLETE REPORTING REQUIREMENTS.—Subsections (a)(3)(B) and (b)(3)(B)(ii) of section 201 of the Social Security Independence and Program Improvements Act of 1994 (Public

Law 103–296; 108 Stat. 1497, 1504) are repealed.

SEC. 5526. ADVISORY BOARD PERSONNEL.

Section 703(i) (42 U.S.C. 903(i)) is amended—

(1) in the first sentence, by striking ‘‘, and three’’ and

all that follows through ‘‘Board,’’; and

(2) in the last sentence, by striking ‘‘clerical’’.

SEC. 5527. TIMING OF DELIVERY OF OCTOBER 1, 2000, SSI BENEFIT

PAYMENTS.

Notwithstanding the provisions of section 708(a) of the Social

Security Act (42 U.S.C. 908(a)), the day designated for delivery

of benefit payments under title XVI of such Act for October 2000

shall be the second day of such month.

SEC. 5528. EFFECTIVE DATES.

(a) IN GENERAL.—Except as provided in this section, the amendments made by this chapter shall take effect as if included in

the enactment of title II of the Personal Responsibility and Work

Opportunity Reconciliation Act of 1996 (Public Law 104–193; 110

Stat. 2185).

(b) SECTION 5524 AMENDMENTS.—The amendments made by

section 5524 of this Act shall take effect as if included in the

enactment of the Social Security Independence and Program

Improvements Act of 1994 (Public Law 103–296; 108 Stat. 1464).

(c) SECTION 5525 AMENDMENTS.— (1) IN GENERAL.—The amendments made by subsections

(a) and (b) of section 5525 of this Act shall take effect as

if included in the enactment of section 105 of the Contract

with America Advancement Act of 1996 (Public Law 104–121;

110 Stat. 852 et seq.).

(2) REPEALS.—The repeals made by section 5525(c) shall

take effect on the date of the enactment of this Act.

(d) SECTION 5526 AMENDMENTS.—The amendments made by

section 5526 of this Act shall take effect as if included in the

enactment of section 108 of the Contract with America Advancement

Act of 1996 (Public Law 104–121; 110 Stat. 857).

(e) SECTION 5227.—Section 5227 shall take effect on the date

of the enactment of this Act.

CHAPTER 3—CHILD SUPPORT

SEC. 5531. STATE OBLIGATION TO PROVIDE CHILD SUPPORT ENFORCEMENT SERVICES.

(a) INDIVIDUALS SUBJECT TO FEE FOR CHILD SUPPORT ENFORCEMENT SERVICES.—Section 454(6)(B) (42 U.S.C. 654(6)(B)) is amended

by striking ‘‘individuals not receiving assistance under any State

program funded under part A, which’’ and inserting ‘‘an individual,

other than an individual receiving assistance under a State program

funded under part A or E, or under a State plan approved under

title XIX, or who is required by the State to cooperate with the

State agency administering the program under this part pursuant

to subsection (l) or (m) of section 6 of the Food Stamp Act of

1977, and’’.
H. R. 2015—376

(b) CORRECTION OF REFERENCE.—Section 464(a)(2)(A) (42 U.S.C.

654(a)(2)(A)) is amended in the first sentence by striking ‘‘section

454(6)’’ and inserting ‘‘section 454(4)(A)(ii)’’.

SEC. 5532. DISTRIBUTION OF COLLECTED SUPPORT.

(a) CONTINUATION OF ASSIGNMENTS.—Section 457(b) (42 U.S.C.

657(b)) is amended—

(1) by striking ‘‘which were assigned’’ and inserting

‘‘assigned’’; and

(2) by striking ‘‘and which were in effect’’ and all that

follows and inserting ‘‘and in effect on September 30, 1997

(or such earlier date, on or after August 22, 1996, as the

State may choose), shall remain assigned after such date.’’.

(b) STATE OPTION FOR APPLICABILITY.—

(1) IN GENERAL.—Section 457(a) (42 U.S.C. 657(a)) is

amended by adding at the end the following:

‘‘(6) STATE OPTION FOR APPLICABILITY.—Notwithstanding

any other provision of this subsection, a State may elect to

apply the rules described in clauses (i)(II), (ii)(II), and (v) of

paragraph (2)(B) to support arrearages collected on and after

October 1, 1998, and, if the State makes such an election,

shall apply the provisions of this section, as in effect and

applied on the day before the date of enactment of section

302 of the Personal Responsibility and Work Opportunity Act

of 1996 (Public Law 104–193, 110 Stat. 2200), other than subsection (b)(1) (as so in effect), to amounts collected before October 1, 1998.’’.

(2) CONFORMING AMENDMENTS.—Section 408(a)(3)(A) (42

U.S.C. 608(a)(3)(A)) is amended—

(A) in clause (i), by inserting ‘‘(I)’’ after ‘‘(i)’’;

(B) in clause (ii)—

(i) by striking ‘‘(ii)’’ and inserting ‘‘(II)’’; and

(ii) by striking the period and inserting ‘‘; or’’;

and

(C) by adding at the end the following:

‘‘(ii) if the State elects to distribute collections

under section 457(a)(6), the date the family ceases

to receive assistance under the program, if the assignment is executed on or after October 1, 1998.’’.

(c) DISTRIBUTION OF COLLECTIONS WITH RESPECT TO FAMILIES

RECEIVING ASSISTANCE.—Section 457(a)(1) (42 U.S.C. 657(a)(1)) is

amended by adding at the end the following flush language:

‘‘In no event shall the total of the amounts paid to the Federal

Government and retained by the State exceed the total of

the amounts that have been paid to the family as assistance

by the State.’’.

(d) FAMILIES UNDER CERTAIN AGREEMENTS.—Section 457(a)(4)

(42 U.S.C. 657(a)(4)) is amended to read as follows:

‘‘(4) FAMILIES UNDER CERTAIN AGREEMENTS.—In the case

of an amount collected for a family in accordance with a

cooperative agreement under section 454(33), distribute the

amount so collected pursuant to the terms of the agreement.’’.

(e) STUDY AND REPORT.—Section 457(a)(5) (42 U.S.C. 657(a)(5))

is amended by striking ‘‘1998’’ and inserting ‘‘1999’’.

(f) CORRECTIONS OF REFERENCES.—Section 457(a)(2)(B) (42

U.S.C. 657(a)(2)(B)) is amended—

(1) in clauses (i)(I) and (ii)(I)—
H. R. 2015—377

(A) by striking ‘‘(other than subsection (b)(1))’’ each

place it appears; and

(B) by inserting ‘‘(other than subsection (b)(1) (as so

in effect))’’ after ‘‘1996’’ each place it appears; and

(2) in clause (ii)(II), by striking ‘‘paragraph (4)’’ and inserting ‘‘paragraph (5)’’.

(g) CORRECTION OF TERRITORIAL MATCH.—Section 457(c)(3)(A)

(42 U.S.C. 657(c)(3)(A)) is amended by striking ‘‘the Federal medical

assistance percentage (as defined in section 1118)’’ and inserting

‘‘75 percent’’.

(h) DEFINITIONS.—

(1) FEDERAL SHARE.—Section 457(c)(2) (42 U.S.C. 657(c)(2))

is amended by striking ‘‘collected’’ the second place it appears

and inserting ‘‘distributed’’.

(2) FEDERAL MEDICAL ASSISTANCE PERCENTAGE.—Section

457(c)(3)(B) (42 U.S.C. 657(c)(3)(B)) is amended by striking

‘‘as in effect on September 30, 1996’’ and inserting ‘‘as such

section was in effect on September 30, 1995’’.

(i) CONFORMING AMENDMENTS.—

(1) Section 464(a)(2)(A) (42 U.S.C. 664(a)(2)(A)) is amended,

in the penultimate sentence, by inserting ‘‘in accordance with

section 457’’ after ‘‘owed’’.

(2) Section 466(a)(3)(B) (42 U.S.C. 666(a)(3)(B)) is amended

by striking ‘‘457(b)(4) or (d)(3)’’ and inserting ‘‘457’’.

SEC. 5533. CIVIL PENALTIES RELATING TO STATE DIRECTORY OF NEW

HIRES.

Section 453A (42 U.S.C. 653a) is amended—

(1) in subsection (d)—

(A) in the matter preceding paragraph (1), by striking

‘‘shall be less than’’ and inserting ‘‘shall not exceed’’; and

(B) in paragraph (1), by striking ‘‘$25’’ and inserting

‘‘$25 per failure to meet the requirements of this section

with respect to a newly hired employee’’; and

(2) in subsection (g)(2)(B), by striking ‘‘extracts’’ and all

that follows through ‘‘Labor’’ and inserting ‘‘information’’.

SEC. 5534. FEDERAL PARENT LOCATOR SERVICE.

(a) IN GENERAL.—Section 453 (42 U.S.C. 653) is amended—

(1) in subsection (a)—

(A) by inserting ‘‘(1)’’ after ‘‘(a)’’; and

(B) by striking ‘‘to obtain’’ and all that follows through

the period and inserting ‘‘for the purposes specified in

paragraphs (2) and (3).

‘‘(2) For the purpose of establishing parentage, establishing,

setting the amount of, modifying, or enforcing child support obligations, the Federal Parent Locator Service shall obtain and transmit

to any authorized person specified in subsection (c)—

‘‘(A) information on, or facilitating the discovery of, the

location of any individual—

‘‘(i) who is under an obligation to pay child support;

‘‘(ii) against whom such an obligation is sought; or

‘‘(iii) to whom such an obligation is owed,

including the individual’s social security number (or numbers),

most recent address, and the name, address, and employer

identification number of the individual’s employer;
H. R. 2015—378

‘‘(B) information on the individual’s wages (or other income)

from, and benefits of, employment (including rights to or enrollment in group health care coverage); and

‘‘(C) information on the type, status, location, and amount

of any assets of, or debts owed by or to, any such individual.

‘‘(3) For the purpose of enforcing any Federal or State law

with respect to the unlawful taking or restraint of a child, or

making or enforcing a child custody or visitation determination,

as defined in section 463(d)(1), the Federal Parent Locator Service

shall be used to obtain and transmit the information specified

in section 463(c) to the authorized persons specified in section

463(d)(2).’’;

(2) by striking subsection (b) and inserting the following:

‘‘(b)(1) Upon request, filed in accordance with subsection (d),

of any authorized person, as defined in subsection (c) for the

information described in subsection (a)(2), or of any authorized

person, as defined in section 463(d)(2) for the information described

in section 463(c), the Secretary shall, notwithstanding any other

provision of law, provide through the Federal Parent Locator Service

such information to such person, if such information—

‘‘(A) is contained in any files or records maintained by

the Secretary or by the Department of Health and Human

Services; or

‘‘(B) is not contained in such files or records, but can

be obtained by the Secretary, under the authority conferred

by subsection (e), from any other department, agency, or

instrumentality of the United States or of any State,

and is not prohibited from disclosure under paragraph (2).

‘‘(2) No information shall be disclosed to any person if the

disclosure of such information would contravene the national policy

or security interests of the United States or the confidentiality

of census data. The Secretary shall give priority to requests made

by any authorized person described in subsection (c)(1). No information shall be disclosed to any person if the State has notified

the Secretary that the State has reasonable evidence of domestic

violence or child abuse and the disclosure of such information

could be harmful to the custodial parent or the child of such

parent, provided that—

‘‘(A) in response to a request from an authorized person

(as defined in subsection (c) of this section and section

463(d)(2)), the Secretary shall advise the authorized person

that the Secretary has been notified that there is reasonable

evidence of domestic violence or child abuse and that information can only be disclosed to a court or an agent of a court

pursuant to subparagraph (B); and

‘‘(B) information may be disclosed to a court or an agent

of a court described in subsection (c)(2) of this section or section

463(d)(2)(B), if—

‘‘(i) upon receipt of information from the Secretary,

the court determines whether disclosure to any other person of that information could be harmful to the parent

or the child; and

‘‘(ii) if the court determines that disclosure of such

information to any other person could be harmful, the

court and its agents shall not make any such disclosure.
H. R. 2015—379

‘‘(3) Information received or transmitted pursuant to this section

shall be subject to the safeguard provisions contained in section

454(26).’’; and

(3) in subsection (c)—

(A) in paragraph (1), by striking ‘‘or to seek to enforce

orders providing child custody or visitation rights’’; and

(B) in paragraph (2)—

(i) by inserting ‘‘or to serve as the initiating court

in an action to seek an order’’ after ‘‘issue an order’’;

and

(ii) by striking ‘‘or to issue an order against a

resident parent for child custody or visitation rights’’.

(b) USE OF THE FEDERAL PARENT LOCATOR SERVICE.—Section

463 (42 U.S.C. 663) is amended—

(1) in subsection (a)—

(A) in the matter preceding paragraph (1)—

(i) by striking ‘‘any State which is able and willing

to do so,’’ and inserting ‘‘every State’’; and

(ii) by striking ‘‘such State’’ and inserting ‘‘each

State’’; and

(B) in paragraph (2), by inserting ‘‘or visitation’’ after

‘‘custody’’;

(2) in subsection (b)(2), by inserting ‘‘or visitation’’ after

‘‘custody’’;

(3) in subsection (d)—

(A) in paragraph (1), by inserting ‘‘or visitation’’ after

‘‘custody’’; and

(B) in subparagraphs (A) and (B) of paragraph (2),

by inserting ‘‘or visitation’’ after ‘‘custody’’ each place it

appears;

(4) in subsection (f)(2), by inserting ‘‘or visitation’’ after

‘‘custody’’; and

(5) by striking ‘‘noncustodial’’ each place it appears.

SEC. 5535. ACCESS TO REGISTRY DATA FOR RESEARCH PURPOSES.

(a) IN GENERAL.—Section 453(j)(5) (42 U.S.C. 653(j)(5)) is

amended by inserting ‘‘data in each component of the Federal

Parent Locator Service maintained under this section and to’’ before

‘‘information’’.

(b) CONFORMING AMENDMENTS.—Section 453 (42 U.S.C. 653)

is amended—

(1) in subsection (j)(3)(B), by striking ‘‘registries’’ and inserting ‘‘components’’; and

(2) in subsection (k)(2), by striking ‘‘subsection (j)(3)’’ and

inserting ‘‘section 453A(g)(2)’’.

SEC. 5536. COLLECTION AND USE OF SOCIAL SECURITY NUMBERS FOR

USE IN CHILD SUPPORT ENFORCEMENT.

Section 466(a)(13) (42 U.S.C. 666(a)(13)) is amended—

(1) in subparagraph (A)—

(A) by striking ‘‘commercial’’; and

(B) by inserting ‘‘recreational license,’’ after ‘‘occupational license,’’; and

(2) in the matter following subparagraph (C), by inserting

‘‘to be used on the face of the document while the social security

number is kept on file at the agency’’ after ‘‘other than the

social security number’’.
H. R. 2015—380

SEC. 5537. ADOPTION OF UNIFORM STATE LAWS.

Section 466(f) (42 U.S.C. 666(f)) is amended by striking

‘‘together’’ and all that follows and inserting ‘‘and as in effect

on August 22, 1996, including any amendments officially adopted

as of such date by the National Conference of Commissioners on

Uniform State Laws.’’.

SEC. 5538. STATE LAWS PROVIDING EXPEDITED PROCEDURES.

Section 466(c) (42 U.S.C. 666(c)) is amended—

(1) in paragraph (1)—

(A) in subparagraph (E), by inserting ‘‘, part E,’’ after

‘‘part A’’; and

(B) in subparagraph (G), by inserting ‘‘any current

support obligation and’’ after ‘‘to satisfy’’; and

(2) in paragraph (2)(A)—

(A) in clause (i), by striking ‘‘the tribunal and’’; and

(B) in clause (ii)—

(i) by striking ‘‘tribunal may’’ and inserting ‘‘court

or administrative agency of competent jurisdiction

shall’’; and

(ii) by striking ‘‘filed with the tribunal’’ and inserting ‘‘filed with the State case registry’’.

SEC. 5539. VOLUNTARY PATERNITY ACKNOWLEDGEMENT.

Section 466(a)(5)(C)(i) (42 U.S.C. 666(a)(5)(C)(i)) is amended

by inserting ‘‘, or through the use of video or audio equipment,’’

after ‘‘orally’’.

SEC. 5540. CALCULATION OF PATERNITY ESTABLISHMENT PERCENTAGE.

Section 452(g)(2) (42 U.S.C. 652(g)(2)) is amended, in the matter

following subparagraph (C), by striking ‘‘subparagraph (A)’’ and

inserting ‘‘subparagraphs (A) and (B)’’.

SEC. 5541. MEANS AVAILABLE FOR PROVISION OF TECHNICAL ASSISTANCE AND OPERATION OF FEDERAL PARENT LOCATOR

SERVICE.

(a) TECHNICAL ASSISTANCE.—Section 452(j) (42 U.S.C. 652(j))

is amended, in the matter preceding paragraph (1), by striking

‘‘to cover costs incurred by the Secretary’’ and inserting ‘‘which

shall be available for use by the Secretary, either directly or through

grants, contracts, or interagency agreements,’’.

(b) OPERATION OF FEDERAL PARENT LOCATOR SERVICE.— (1) MEANS AVAILABLE.—Section 453(o) (42 U.S.C. 653(o))

is amended—

(A) in the heading, by striking ‘‘RECOVERY OF COSTS’’ and inserting ‘‘USE OF SET-ASIDE FUNDS’’; and

(B) by striking ‘‘to cover costs incurred by the Secretary’’ and inserting ‘‘which shall be available for use

by the Secretary, either directly or through grants, contracts, or interagency agreements,’’.

(2) AVAILABILITY OF FUNDS.—Section 453(o) (42 U.S.C.

653(o)) is amended by adding at the end the following:

‘‘Amounts appropriated under this subsection for each of fiscal

years 1997 through 2001 shall remain available until

expended.’’.
H. R. 2015—381

SEC. 5542. AUTHORITY TO COLLECT SUPPORT FROM FEDERAL

EMPLOYEES.

(a) RESPONSE TO NOTICE OR PROCESS.—Section 459(c)(2)(C) (42

U.S.C. 659(c)(2)(C)) is amended by striking ‘‘respond to the order,

process, or interrogatory’’ and inserting ‘‘withhold available sums

in response to the order or process, or answer the interrogatory’’.

(b) MONEYS SUBJECT TO PROCESS.—Section 459(h)(1) (42 U.S.C.

659(h)(1)) is amended—

(1) in the matter preceding subparagraph (A) and in

subparagraph (A)(i), by striking ‘‘paid or’’ each place it appears;

(2) in subparagraph (A)—

(A) in clause (ii)(V), by striking ‘‘and’’ at the end;

(B) in clause (iii)—

(i) by inserting ‘‘or payable’’ after ‘‘paid’’; and

(ii) by striking ‘‘but’’ and inserting ‘‘; and’’; and

(C) by inserting after clause (iii), the following:

‘‘(iv) benefits paid or payable under the Railroad

Retirement System, but’’; and

(3) in subparagraph (B)—

(A) in clause (i), by striking ‘‘or’’ at the end;

(B) in clause (ii), by striking the period and inserting

‘‘; or’’; and

(C) by adding at the end the following:

‘‘(iii) of periodic benefits under title 38, United

States Code, except as provided in subparagraph

(A)(ii)(V).’’.

(c) CONFORMING AMENDMENT.—Section 454(19)(B)(ii) (42 U.S.C.

654(19)(B)(ii)) is amended by striking ‘‘section 462(e)’’ and inserting

‘‘section 459(i)(5)’’.

SEC. 5543. DEFINITION OF SUPPORT ORDER.

Section 453(p) (42 U.S.C. 653(p)), is amended by striking ‘‘a

child and’’ and inserting ‘‘of’’.

SEC. 5544. STATE LAW AUTHORIZING SUSPENSION OF LICENSES.

Section 466(a)(16) (42 U.S.C. 666(a)(16)) is amended by inserting ‘‘and sporting’’ after ‘‘recreational’’.

SEC. 5545. INTERNATIONAL SUPPORT ENFORCEMENT.

Section 454(32)(A) (42 U.S.C. 654(32)(A)) is amended by striking

‘‘section 459A(d)(2)’’ and inserting ‘‘section 459A(d)’’.

SEC. 5546. CHILD SUPPORT ENFORCEMENT FOR INDIAN TRIBES.

(a) COOPERATIVE AGREEMENTS BY INDIAN TRIBES AND STATES

FOR CHILD SUPPORT ENFORCEMENT.—Section 454(33) (42 U.S.C.

654(33)) is amended—

(1) by striking ‘‘and enforce support orders, and’’ and inserting ‘‘or enforce support orders, or’’;

(2) by striking ‘‘guidelines established by such tribe or

organization’’ and inserting ‘‘guidelines established or adopted

by such tribe or organization’’;

(3) by striking ‘‘funding collected’’ and inserting ‘‘collections’’; and

(4) by striking ‘‘such funding’’ and inserting ‘‘such collections’’.

(b) CORRECTION OF SUBSECTION DESIGNATION.—Section 455 (42

U.S.C. 655) is amended by redesignating subsection (b), as added
H. R. 2015—382

by section 375(b) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (Public Law 104–193, 110 Stat.

2256), as subsection (f).

(c) DIRECT GRANTS TO TRIBES.—Section 455(f) (42 U.S.C. 655(f)),

as so redesignated by subsection (b) of this section, is amended

to read as follows:

‘‘(f) The Secretary may make direct payments under this part

to an Indian tribe or tribal organization that demonstrates to the

satisfaction of the Secretary that it has the capacity to operate

a child support enforcement program meeting the objectives of

this part, including establishment of paternity, establishment, modification, and enforcement of support orders, and location of absent

parents. The Secretary shall promulgate regulations establishing

the requirements which must be met by an Indian tribe or tribal

organization to be eligible for a grant under this subsection.’’.

SEC. 5547. CONTINUATION OF RULES FOR DISTRIBUTION OF SUPPORT

IN THE CASE OF A TITLE IV–E CHILD.

Section 457 (42 U.S.C. 657) is amended—

(1) in subsection (a), in the matter preceding paragraph

(1), by striking ‘‘subsection (e)’’ and inserting ‘‘subsections (e)

and (f)’’; and

(2) by adding at the end the following:

‘‘(f) Notwithstanding the preceding provisions of this section,

amounts collected by a State as child support for months in any

period on behalf of a child for whom a public agency is making

foster care maintenance payments under part E—

‘‘(1) shall be retained by the State to the extent necessary

to reimburse it for the foster care maintenance payments made

with respect to the child during such period (with appropriate

reimbursement of the Federal Government to the extent of

its participation in the financing);

‘‘(2) shall be paid to the public agency responsible for

supervising the placement of the child to the extent that the

amounts collected exceed the foster care maintenance payments

made with respect to the child during such period but not

the amounts required by a court or administrative order to

be paid as support on behalf of the child during such period;

and the responsible agency may use the payments in the manner it determines will serve the best interests of the child,

including setting such payments aside for the child’s future

needs or making all or a part thereof available to the person

responsible for meeting the child’s day-to-day needs; and

‘‘(3) shall be retained by the State, if any portion of the

amounts collected remains after making the payments required

under paragraphs (1) and (2), to the extent that such portion

is necessary to reimburse the State (with appropriate

reimbursement to the Federal Government to the extent of

its participation in the financing) for any past foster care

maintenance payments (or payments of assistance under the

State program funded under part A) which were made with

respect to the child (and with respect to which past collections

have not previously been retained);

and any balance shall be paid to the State agency responsible

for supervising the placement of the child, for use by such agency

in accordance with paragraph (2).’’.
H. R. 2015—383

SEC. 5548. GOOD CAUSE IN FOSTER CARE AND FOOD STAMP CASES.

(a) STATE PLAN.—Section 454(4)(A)(i) (42 U.S.C. 654(4)(A)(i))

is amended—

(1) by striking ‘‘or’’ before ‘‘(III)’’; and

(2) by inserting ‘‘or (IV) cooperation is required pursuant

to section 6(l)(1) of the Food Stamp Act of 1977 (7 U.S.C.

2015(l)(1)),’’ after ‘‘title XIX,’’.

(b) CONFORMING AMENDMENTS.—Section 454(29) (42 U.S.C.

654(29)) is amended—

(1) in subparagraph (A)—

(A) in the matter preceding clause (i), by striking ‘‘part

A of this title or the State program under title XIX’’ and

inserting ‘‘part A, the State program under part E, the

State program under title XIX, or the food stamp program,

as defined under section 3(h) of the Food Stamp Act of

1977 (7 U.S.C. 2012(h)),’’; and

(B) by striking clauses (i) and (ii) and all that follows

through the semicolon and inserting the following:

‘‘(i) in the case of the State program funded under

part A, the State program under part E, or the State

program under title XIX shall, at the option of the

State, be defined, taking into account the best interests

of the child, and applied in each case, by the State

agency administering such program; and

‘‘(ii) in the case of the food stamp program, as

defined under section 3(h) of the Food Stamp Act of

1977 (7 U.S.C. 2012(h)), shall be defined and applied

in each case under that program in accordance with

section 6(l)(2) of the Food Stamp Act of 1977 (7 U.S.C.

2015(l)(2));’’;

(2) in subparagraph (D), by striking ‘‘or the State program

under title XIX’’ and inserting ‘‘the State program under part

E, the State program under title XIX, or the food stamp program, as defined under section 3(h) of the Food Stamp Act

of 1977 (7 U.S.C. 2012(h))’’; and

(3) in subparagraph (E), by striking ‘‘individual,’’ and all

that follows through ‘‘XIX,’’ and inserting ‘‘individual and the

State agency administering the State program funded under

part A, the State agency administering the State program

under part E, the State agency administering the State program

under title XIX, or the State agency administering the food

stamp program, as defined under section 3(h) of the Food

Stamp Act of 1977 (7 U.S.C. 2012(h)),’’.

SEC. 5549. DATE OF COLLECTION OF SUPPORT.

Section 454B(c)(1) (42 U.S.C. 654B(c)(1)) is amended by adding

at the end the following: ‘‘The date of collection for amounts collected

and distributed under this part is the date of receipt by the State

disbursement unit, except that if current support is withheld by

an employer in the month when due and is received by the State

disbursement unit in a month other than the month when due,

the date of withholding may be deemed to be the date of collection.’’.

SEC. 5550. ADMINISTRATIVE ENFORCEMENT IN INTERSTATE CASES.

(a) PROCEDURES.—Section 466(a)(14) (42 U.S.C. 666(a)(14)) is

amended to read as follows:
H. R. 2015—384

‘‘(14) HIGH-VOLUME, AUTOMATED ADMINISTRATIVE ENFORCEMENT IN INTERSTATE CASES.—

‘‘(A) IN GENERAL.—Procedures under which—

‘‘(i) the State shall use high-volume automated

administrative enforcement, to the same extent as used

for intrastate cases, in response to a request made

by another State to enforce support orders, and shall

promptly report the results of such enforcement procedure to the requesting State;

‘‘(ii) the State may, by electronic or other means,

transmit to another State a request for assistance in

enforcing support orders through high-volume, automated administrative enforcement, which request—

‘‘(I) shall include such information as will

enable the State to which the request is transmitted to compare the information about the cases

to the information in the data bases of the State;

and

‘‘(II) shall constitute a certification by the

requesting State—

‘‘(aa) of the amount of support under an

order the payment of which is in arrears; and

‘‘(bb) that the requesting State has complied with all procedural due process requirements applicable to each case;

‘‘(iii) if the State provides assistance to another

State pursuant to this paragraph with respect to a

case, neither State shall consider the case to be transferred to the caseload of such other State; and

‘‘(iv) the State shall maintain records of—

‘‘(I) the number of such requests for assistance

received by the State;

‘‘(II) the number of cases for which the State

collected support in response to such a request;

and

‘‘(III) the amount of such collected support.

‘‘(B) HIGH-VOLUME AUTOMATED ADMINISTRATIVE

ENFORCEMENT.—In this part, the term ‘high-volume automated administrative enforcement’ means the use of automatic data processing to search various State data bases,

including license records, employment service data, and

State new hire registries, to determine whether information

is available regarding a parent who owes a child support

obligation.’’.

(b) INCENTIVE PAYMENTS.—Section 458(d) (42 U.S.C. 658(d))

is amended by inserting ‘‘, including amounts collected under section

466(a)(14),’’ after ‘‘another State’’.

SEC. 5551. WORK ORDERS FOR ARREARAGES.

Section 466(a)(15) (42 U.S.C. 666(a)(15)) is amended to read

as follows:

‘‘(15) PROCEDURES TO ENSURE THAT PERSONS OWING OVERDUE SUPPORT WORK OR HAVE A PLAN FOR PAYMENT OF SUCH

SUPPORT.—Procedures under which the State has the authority,

in any case in which an individual owes overdue support with

respect to a child receiving assistance under a State program

funded under part A, to issue an order or to request that
H. R. 2015—385

a court or an administrative process established pursuant to

State law issue an order that requires the individual to—

‘‘(A) pay such support in accordance with a plan

approved by the court, or, at the option of the State, a

plan approved by the State agency administering the State

program under this part; or

‘‘(B) if the individual is subject to such a plan and

is not incapacitated, participate in such work activities

(as defined in section 407(d)) as the court, or, at the option

of the State, the State agency administering the State

program under this part, deems appropriate.’’.

SEC. 5552. ADDITIONAL TECHNICAL STATE PLAN AMENDMENTS.

Section 454 (42 U.S.C. 654) is amended—

(1) in paragraph (8)—

(A) in the matter preceding subparagraph (A)—

(i) by striking ‘‘noncustodial’’; and

(ii) by inserting ‘‘, for the purpose of establishing

parentage, establishing, setting the amount of, modifying, or enforcing child support obligations, or making

or enforcing a child custody or visitation determination,

as defined in section 463(d)(1)’’ after ‘‘provide that’’;

(B) in subparagraph (A), by striking the comma and

inserting a semicolon;

(C) in subparagraph (B), by striking the semicolon

and inserting a comma; and

(D) by inserting after subparagraph (B), the following

flush language:

‘‘and shall, subject to the privacy safeguards required under

paragraph (26), disclose only the information described in sections 453 and 463 to the authorized persons specified in such

sections for the purposes specified in such sections;’’;

(2) in paragraph (17)—

(A) by striking ‘‘in the case of a State which has’’

and inserting ‘‘provide that the State will have’’; and

(B) by inserting ‘‘and’’ after ‘‘section 453,’’; and

(3) in paragraph (26)—

(A) in the matter preceding subparagraph (A), by striking ‘‘will’’;

(B) in subparagraph (A)—

(i) by inserting ‘‘, modify,’’ after ‘‘establish’’, the

second place it appears; and

(ii) by inserting ‘‘, or to make or enforce a child

custody determination’’ after ‘‘support’’;

(C) in subparagraph (B)—

(i) by inserting ‘‘or the child’’ after ‘‘1 party’’;

(ii) by inserting ‘‘or the child’’ after ‘‘former party’’;

and

(iii) by striking ‘‘and’’ at the end;

(D) in subparagraph (C)—

(i) by inserting ‘‘or the child’’ after ‘‘1 party’’;

(ii) by striking ‘‘another party’’ and inserting

‘‘another person’’;

(iii) by inserting ‘‘to that person’’ after ‘‘release

of the information’’; and

(iv) by striking ‘‘former party’’ and inserting ‘‘party

or the child’’; and
H. R. 2015—386

(E) by adding at the end the following:

‘‘(D) in cases in which the prohibitions under subparagraphs (B) and (C) apply, the requirement to notify the

Secretary, for purposes of section 453(b)(2), that the State

has reasonable evidence of domestic violence or child abuse

against a party or the child and that the disclosure of

such information could be harmful to the party or the

child; and

‘‘(E) procedures providing that when the Secretary discloses information about a parent or child to a State court

or an agent of a State court described in section 453(c)(2)

or 463(d)(2)(B), and advises that court or agent that the

Secretary has been notified that there is reasonable evidence of domestic violence or child abuse pursuant to section 453(b)(2), the court shall determine whether disclosure

to any other person of information received from the Secretary could be harmful to the parent or child and, if

the court determines that disclosure to any other person

could be harmful, the court and its agents shall not make

any such disclosure;’’.

SEC. 5553. FEDERAL CASE REGISTRY OF CHILD SUPPORT ORDERS.

Section 453(h) (42 U.S.C. 653(h)) is amended—

(1) in paragraph (1), by inserting ‘‘and order’’ after ‘‘with

respect to each case’’; and

(2) in paragraph (2)—

(A) in the heading, by inserting ‘‘AND ORDER’’ after

‘‘CASE’’;

(B) by inserting ‘‘or an order’’ after ‘‘with respect to

a case’’ and

(C) by inserting ‘‘or order’’ after ‘‘and the State or

States which have the case’’.

SEC. 5554. FULL FAITH AND CREDIT FOR CHILD SUPPORT ORDERS.

Section 1738B(f) of title 28, United States Code, is amended—

(1) in paragraph (4), by striking ‘‘a court may’’ and all

that follows and inserting ‘‘a court having jurisdiction over

the parties shall issue a child support order, which must be

recognized.’’; and

(2) in paragraph (5), by inserting ‘‘under subsection (d)’’

after ‘‘jurisdiction’’.

SEC. 5555. DEVELOPMENT COSTS OF AUTOMATED SYSTEMS.

(a) DEFINITION OF STATE.—Section 455(a)(3)(B) (42 U.S.C.

655(a)(3)(B)) is amended—

(1) in clause (i)—

(A) by inserting ‘‘or system described in clause (iii)’’

after ‘‘each State’’; and

(B) by inserting ‘‘or system’’ after ‘‘the State’’; and

(2) by adding at the end the following:

‘‘(iii) For purposes of clause (i), a system described in this

clause is a system that has been approved by the Secretary to

receive enhanced funding pursuant to the Family Support Act of

1988 (Public Law 100–485; 102 Stat. 2343) for the purpose of

developing a system that meets the requirements of sections 454(16)

(as in effect on and after September 30, 1995) and 454A, including

systems that have received funding for such purpose pursuant

to a waiver under section 1115(a).’’.
H. R. 2015—387

(b) TEMPORARY LIMITATION ON PAYMENTS.—Section 344(b)(2)

of the Personal Responsibility and Work Opportunity Reconciliation

Act of 1996 (42 U.S.C. 655 note) is amended—

(1) in subparagraph (B)—

(A) by inserting ‘‘or a system described in subparagraph

(C)’’ after ‘‘to a State’’; and

(B) by inserting ‘‘or system’’ after ‘‘for the State’’; and

(2) in subparagraph (C), by striking ‘‘Act,’’ and all that

follows and inserting ‘‘Act, and among systems that have been

approved by the Secretary to receive enhanced funding pursuant to the Family Support Act of 1988 (Public Law 100–485;

102 Stat. 2343) for the purpose of developing a system that

meets the requirements of sections 454(16) (as in effect on

and after September 30, 1995) and 454A, including systems

that have received funding for such purpose pursuant to a

waiver under section 1115(a), which shall take into account—

‘‘(i) the relative size of such State and system

caseloads under part D of title IV of the Social Security

Act; and

‘‘(ii) the level of automation needed to meet the

automated data processing requirements of such part.’’.

SEC. 5556. ADDITIONAL TECHNICAL AMENDMENTS.

(a) ELIMINATION OF SURPLUSAGE.—Section 466(c)(1)(F) (42

U.S.C. 666(c)(1)(F)) is amended by striking ‘‘of section 466’’.

(b) CORRECTION OF AMBIGUOUS AMENDMENT.—Section

344(a)(1)(F) of the Personal Responsibility and Work Opportunity

Reconciliation Act of 1996 (Public Law 104–193; 110 Stat. 2234)

is amended by inserting ‘‘the first place such term appears’’ before

‘‘and all that follows’’.

(c) CORRECTION OF ERRONEOUSLY DRAFTED PROVISION.—Section

215 of the Department of Health and Human Services Appropriations Act, 1997, (as contained in section 101(e) of the Omnibus

Consolidated Appropriations Act, 1997) is amended to read as follows:

‘‘SEC. 215. Sections 452(j) and 453(o) of the Social Security

Act (42 U.S.C. 652(j) and 653(o)), as amended by section 345 of

the Personal Responsibility and Work Opportunity Reconciliation

Act of 1996 (Public Law 104–193; 110 Stat. 2237) are each amended

by striking ‘section 457(a)’ and inserting ‘a plan approved under

this part’. Amounts available under such sections 452(j) and 453(o)

shall be calculated as though the amendments made by this section

were effective October 1, 1995.’’.

(d) ELIMINATION OF SURPLUSAGE.—Section 456(a)(2)(B) (42

U.S.C. 656(a)(2)(B)) is amended by striking ‘‘, and’’ and inserting

a period.

(e) CORRECTION OF DATE.—Section 466(a)(1)(B) (42 U.S.C.

666(a)(1)(B)) is amended by striking ‘‘October 1, 1996’’ and inserting

‘‘January 1, 1994’’.

SEC. 5557. EFFECTIVE DATE.

(a) IN GENERAL.—Except as provided in subsection (b), the

amendments made by this chapter shall take effect as if included

in the enactment of title III of the Personal Responsibility and

Work Opportunity Reconciliation Act of 1996 (Public Law 104–

193; 110 Stat. 2105).

(b) EXCEPTION.—The amendments made by section 5532(b)(2)

of this Act shall take effect as if the amendments had been included
H. R. 2015—388

in the enactment of section 103(a) of the Personal Responsibility

and Work Opportunity Reconciliation Act of 1996 (Public Law 104–

193; 110 Stat. 2112).

CHAPTER 4—RESTRICTING WELFARE AND PUBLIC

BENEFITS FOR ALIENS

Subchapter A—Eligibility for Federal Benefits

SEC. 5561. ALIEN ELIGIBILITY FOR FEDERAL BENEFITS: LIMITED

APPLICATION TO MEDICARE AND BENEFITS UNDER THE

RAILROAD RETIREMENT ACT.

(a) LIMITED APPLICATION TO MEDICARE.—Section 401(b) of the

Personal Responsibility and Work Opportunity Reconciliation Act

of 1996 (8 U.S.C. 1611(b)) is amended by adding at the end the

following:

‘‘(3) Subsection (a) shall not apply to any benefit payable

under title XVIII of the Social Security Act (relating to the

medicare program) to an alien who is lawfully present in the

United States as determined by the Attorney General and,

with respect to benefits payable under part A of such title,

who was authorized to be employed with respect to any wages

attributable to employment which are counted for purposes

of eligibility for such benefits.’’.

(b) LIMITED APPLICATION TO BENEFITS UNDER THE RAILROAD

RETIREMENT ACT.—Section 401(b) of the Personal Responsibility

and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1611(b))

(as amended by subsection (a)) is amended by inserting at the

end the following:

‘‘(4) Subsection (a) shall not apply to any benefit payable

under the Railroad Retirement Act of 1974 or the Railroad

Unemployment Insurance Act to an alien who is lawfully

present in the United States as determined by the Attorney

General or to an alien residing outside the United States.’’.

SEC. 5562. EXCEPTIONS TO BENEFIT LIMITATIONS: CORRECTIONS TO

REFERENCE CONCERNING ALIENS WHOSE DEPORTATION IS WITHHELD.

Sections 402(a)(2)(A), 402(b)(2)(A), 403(b)(1)(C), 412(b)(1)(C),

and 431(b)(5) of the Personal Responsibility and Work Opportunity

Reconciliation Act of 1996 (8 U.S.C. 1612(a)(2)(A), 1612(b)(2)(A),

1613(b)(1)(C), 1622(b)(1)(C), and 1641(b)(5)) as amended by this

Act are each amended by striking ‘‘section 243(h) of such Act’’

each place it appears and inserting ‘‘section 243(h) of such Act

(as in effect immediately before the effective date of section 307

of division C of Public Law 104–208) or section 241(b)(3) of such

Act (as amended by section 305(a) of division C of Public Law

104–208)’’.

SEC. 5563. VETERANS EXCEPTION: APPLICATION OF MINIMUM ACTIVE

DUTY SERVICE REQUIREMENT; EXTENSION TO

UNREMARRIED SURVIVING SPOUSE; EXPANDED DEFINITION OF VETERAN.

(a) APPLICATION OF MINIMUM ACTIVE DUTY SERVICE REQUIREMENT.—Sections 402(a)(2)(C)(i), 402(b)(2)(C)(i), 403(b)(2)(A), and

412(b)(3)(A) of the Personal Responsibility and Work Opportunity

Reconciliation Act of 1996 (8 U.S.C. 1612(a)(2)(C)(i), 1612(b)(2)(C)(i),

1613(b)(2)(A), and 1622(b)(3)(A)) are each amended by inserting
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‘‘and who fulfills the minimum active-duty service requirements

of section 5303A(d) of title 38, United States Code’’ after ‘‘alienage’’.

(b) EXCEPTION APPLICABLE TO UNREMARRIED SURVIVING

SPOUSE.—Sections 402(a)(2)(C)(iii), 402(b)(2)(C)(iii), 403(b)(2)(C),

and 412(b)(3)(C) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1612(a)(2)(C)(iii),

1612(b)(2)(C)(iii), 1613(b)(2)(C), and 1622(b)(3)(C)) are each amended by inserting before the period ‘‘or the unremarried surviving

spouse of an individual described in clause (i) or (ii) who is deceased

if the marriage fulfills the requirements of section 1304 of title

38, United States Code’’.

(c) EXPANDED DEFINITION OF VETERAN.—Sections

402(a)(2)(C)(i), 402(b)(2)(C)(i), 403(b)(2)(A), and 412(b)(3)(A) of the

Personal Responsibility and Work Opportunity Reconciliation Act

of 1996 (8 U.S.C. 1612(a)(2)(C)(i), 1612(b)(2)(C)(i), 1613(b)(2)(A),

and 1622(b)(3)(A)) are each amended by inserting ‘‘, 1101, or 1301,

or as described in section 107’’ after ‘‘section 101’’.

SEC. 5564. NOTIFICATION CONCERNING ALIENS NOT LAWFULLY

PRESENT: CORRECTION OF TERMINOLOGY.

Section 1631(e)(9) of the Social Security Act (42 U.S.C.

1383(e)(9)) and section 27 of the United States Housing Act of

1937, as added by section 404 of the Personal Responsibility and

Work Opportunity Reconciliation Act of 1996, are each amended

by striking ‘‘unlawfully in the United States’’ each place it appears

and inserting ‘‘not lawfully present in the United States’’.

SEC. 5565. FREELY ASSOCIATED STATES: CONTRACTS AND LICENSES.

Sections 401(c)(2)(A) and 411(c)(2)(A) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C.

1611(c)(2)(A) and 1621(c)(2)(A)) are each amended by inserting

before the semicolon at the end ‘‘, or to a citizen of a freely associated

state, if section 141 of the applicable compact of free association

approved in Public Law 99–239 or 99–658 (or a successor provision)

is in effect’’.

SEC. 5566. CONGRESSIONAL STATEMENT REGARDING BENEFITS FOR

HMONG AND OTHER HIGHLAND LAO VETERANS.

(a) FINDINGS.—The Congress makes the following findings:

(1) Hmong and other Highland Lao tribal peoples were

recruited, armed, trained, and funded for military operations

by the United States Department of Defense, Central Intelligence Agency, Department of State, and Agency for International Development to further United States national security

interests during the Vietnam conflict.

(2) Hmong and other Highland Lao tribal forces sacrificed

their own lives and saved the lives of American military personnel by rescuing downed American pilots and aircrews and by

engaging and successfully fighting North Vietnamese troops.

(3) Thousands of Hmong and other Highland Lao veterans

who fought in special guerilla units on behalf of the United

States during the Vietnam conflict, along with their families,

have been lawfully admitted to the United States in recent

years.

(4) The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (Public Law 104–193), the new national

welfare reform law, restricts certain welfare benefits for noncitizens of the United States and the exceptions for noncitizen
H. R. 2015—390

veterans of the Armed Forces of the United States do not

extend to Hmong veterans of the Vietnam conflict era, making

Hmong veterans and their families receiving certain welfare

benefits subject to restrictions despite their military service

on behalf of the United States.

(b) CONGRESSIONAL STATEMENT.—It is the sense of the Congress

that Hmong and other Highland Lao veterans who fought on behalf

of the Armed Forces of the United States during the Vietnam

conflict and have lawfully been admitted to the United States

for permanent residence should be considered veterans for purposes

of continuing certain welfare benefits consistent with the exceptions

provided other noncitizen veterans under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996.

Subchapter B—General Provisions

SEC. 5571. DETERMINATION OF TREATMENT OF BATTERED ALIENS

AS QUALIFIED ALIENS; INCLUSION OF ALIEN CHILD OF

BATTERED PARENT AS QUALIFIED ALIEN.

(a) DETERMINATION OF STATUS BY AGENCY PROVIDING BENEFITS.—Section 431 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1641) is amended in

subsections (c)(1)(A) and (c)(2)(A) by striking ‘‘Attorney General,

which opinion is not subject to review by any court)’’ each place

it appears and inserting ‘‘agency providing such benefits)’’.

(b) GUIDANCE ISSUED BY ATTORNEY GENERAL.—Section 431(c)

of the Personal Responsibility and Work Opportunity Reconciliation

Act of 1996 (8 U.S.C. 1641(c)) is amended by adding at the end

the following new undesignated paragraph:

‘‘After consultation with the Secretaries of Health and Human

Services, Agriculture, and Housing and Urban Development, the

Commissioner of Social Security, and with the heads of such Federal

agencies administering benefits as the Attorney General considers

appropriate, the Attorney General shall issue guidance (in the Attorney General’s sole and unreviewable discretion) for purposes of

this subsection and section 421(f), concerning the meaning of the

terms ‘battery’ and ‘extreme cruelty’, and the standards and methods to be used for determining whether a substantial connection

exists between battery or cruelty suffered and an individual’s need

for benefits under a specific Federal, State, or local program.’’.

(c) INCLUSION OF ALIEN CHILD OF BATTERED PARENT AS QUALI- FIED ALIEN.—Section 431(c) of the Personal Responsibility and Work

Opportunity Reconciliation Act of 1996 (8 U.S.C. 1641(c)) is amended—

(1) at the end of paragraph (1)(B)(iv) by striking ‘‘or’’;

(2) at the end of paragraph (2)(B) by striking the period

and inserting ‘‘; or’’; and

(3) by inserting after paragraph (2)(B) and before the last

sentence of such subsection the following new paragraph:

‘‘(3) an alien child who—

‘‘(A) resides in the same household as a parent who

has been battered or subjected to extreme cruelty in the

United States by that parent’s spouse or by a member

of the spouse’s family residing in the same household as

the parent and the spouse consented or acquiesced to such

battery or cruelty, but only if (in the opinion of the agency

providing such benefits) there is a substantial connection
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between such battery or cruelty and the need for the benefits to be provided; and

‘‘(B) who meets the requirement of subparagraph (B)

of paragraph (1).’’.

(d) INCLUSION OF ALIEN CHILD OF BATTERED PARENT UNDER

SPECIAL RULE FOR ATTRIBUTION OF INCOME.—Section 421(f)(1)(A)

of the Personal Responsibility and Work Opportunity Reconciliation

Act of 1996 (8 U.S.C. 1631(f)(1)(A)) is amended—

(1) at the end of clause (i) by striking ‘‘or’’; and

(2) by striking ‘‘and the battery or cruelty described in

clause (i) or (ii)’’ and inserting ‘‘or (iii) the alien is a child

whose parent (who resides in the same household as the alien

child) has been battered or subjected to extreme cruelty in

the United States by that parent’s spouse, or by a member

of the spouse’s family residing in the same household as the

parent and the spouse consented to, or acquiesced in, such

battery or cruelty, and the battery or cruelty described in

clause (i), (ii), or (iii)’’.

SEC. 5572. VERIFICATION OF ELIGIBILITY FOR BENEFITS.

(a) REGULATIONS AND GUIDANCE.—Section 432(a) of the Personal Responsibility and Work Opportunity Reconciliation Act of

1996 (8 U.S.C. 1642(a)) is amended—

(1) by inserting at the end of paragraph (1) the following:

‘‘Not later than 90 days after the date of the enactment of

the Balanced Budget Act of 1997, the Attorney General of

the United States, after consultation with the Secretary of

Health and Human Services, shall issue interim verification

guidance.’’; and

(2) by adding after paragraph (2) the following new paragraph:

‘‘(3) Not later than 90 days after the date of the enactment

of the Balanced Budget Act of 1997, the Attorney General shall

promulgate regulations which set forth the procedures by which

a State or local government can verify whether an alien applying

for a State or local public benefit is a qualified alien, a nonimmigrant under the Immigration and Nationality Act, or an alien

paroled into the United States under section 212(d)(5) of the

Immigration and Nationality Act for less than 1 year, for purposes

of determining whether the alien is ineligible for benefits under

section 411 of this Act.’’.

(b) DISCLOSURE OF INFORMATION FOR VERIFICATION.—Section

384(b) of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (division C of Public Law 104–208) is amended

by adding after paragraph (4) the following new paragraph:

‘‘(5) The Attorney General is authorized to disclose information, to Federal, State, and local public and private agencies

providing benefits, to be used solely in making determinations

of eligibility for benefits pursuant to section 431(c) of the Personal Responsibility and Work Opportunity Reconciliation Act

of 1996.’’.

SEC. 5573. QUALIFYING QUARTERS: DISCLOSURE OF QUARTERS OF

COVERAGE INFORMATION; CORRECTION TO ASSURE

THAT CREDITING APPLIES TO ALL QUARTERS EARNED

BY PARENTS BEFORE CHILD IS 18.

(a) DISCLOSURE OF QUARTERS OF COVERAGE INFORMATION.—

Section 435 of the Personal Responsibility and Work Opportunity
H. R. 2015—392

Reconciliation Act of 1996 (8 U.S.C. 1645) is amended by adding

at the end the following: ‘‘Notwithstanding section 6103 of the

Internal Revenue Code of 1986, the Commissioner of Social Security

is authorized to disclose quarters of coverage information concerning

an alien and an alien’s spouse or parents to a government agency

for the purposes of this title.’’.

(b) CORRECTION TO ASSURE THAT CREDITING APPLIES TO ALL

QUARTERS EARNED BY PARENTS BEFORE CHILD IS 18.—Section

435(1) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1645(1)) is amended by striking

‘‘while the alien was under age 18,’’ and inserting ‘‘before the

date on which the alien attains age 18,’’.

SEC. 5574. STATUTORY CONSTRUCTION: BENEFIT ELIGIBILITY LIMITATIONS APPLICABLE ONLY WITH RESPECT TO ALIENS

PRESENT IN THE UNITED STATES.

Section 433 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (8 U.S.C. 1643) is amended—

(1) by redesignating subsections (b) and (c) as subsections

(c) and (d); and

(2) by adding after subsection (a) the following new subsection:

‘‘(b) BENEFIT ELIGIBILITY LIMITATIONS APPLICABLE ONLY WITH

RESPECT TO ALIENS PRESENT IN THE UNITED STATES.—Notwithstanding any other provision of this title, the limitations on eligibility for benefits under this title shall not apply to eligibility

for benefits of aliens who are not residing, or present, in the

United States with respect to—

‘‘(1) wages, pensions, annuities, and other earned payments

to which an alien is entitled resulting from employment by,

or on behalf of, a Federal, State, or local government agency

which was not prohibited during the period of such employment

or service under section 274A or other applicable provision

of the Immigration and Nationality Act; or

‘‘(2) benefits under laws administered by the Secretary

of Veterans Affairs.’’.

Subchapter C—Miscellaneous Clerical and Technical

Amendments; Effective Date

SEC. 5581. CORRECTING MISCELLANEOUS CLERICAL AND TECHNICAL

ERRORS.

(a) INFORMATION REPORTING UNDER TITLE IV OF THE SOCIAL

SECURITY ACT.—Effective July 1, 1997, section 408 (42 U.S.C. 608),

as amended by sections 5001(h)(1) and 5505(e) of this Act, is amended by adding at the end the following new subsection:

‘‘(g) STATE REQUIRED TO PROVIDE CERTAIN INFORMATION.—

Each State to which a grant is made under section 403 shall,

at least 4 times annually and upon request of the Immigration

and Naturalization Service, furnish the Immigration and Naturalization Service with the name and address of, and other identifying information on, any individual who the State knows is not

lawfully present in the United States.’’.

(b) MISCELLANEOUS CLERICAL AND TECHNICAL CORRECTIONS.—

(1) Section 411(c)(3) of the Personal Responsibility and

Work Opportunity Reconciliation Act of 1996 (8 U.S.C.
H. R. 2015—393

1621(c)(3)) is amended by striking ‘‘4001(c)’’ and inserting

‘‘401(c)’’.

(2) Section 422(a) of the Personal Responsibility and Work

Opportunity Reconciliation Act of 1996 (8 U.S.C. 1632(a)) is

amended by striking ‘‘benefits (as defined in section 412(c)),’’

and inserting ‘‘benefits,’’.

(3) Section 412(b)(1)(C) of the Personal Responsibility and

Work Opportunity Reconciliation Act of 1996 (8 U.S.C.

1622(b)(1)(C)) is amended by striking ‘‘with-holding’’ and inserting ‘‘withholding’’.

(4) The subtitle heading for subtitle D of title IV of the

Personal Responsibility and Work Opportunity Reconciliation

Act of 1996 is amended to read as follows:

‘‘Subtitle D—General Provisions’’.

(5) The subtitle heading for subtitle F of title IV of the

Personal Responsibility and Work Opportunity Reconciliation

Act of 1996 is amended to read as follows:

‘‘Subtitle F—Earned Income Credit Denied

to Unauthorized Employees’’.

(6) Section 431(c)(2)(B) of the Personal Responsibility and

Work Opportunity Reconciliation Act of 1996 (8 U.S.C.

1641(c)(2)(B)) is amended by striking ‘‘clause (ii) of subparagraph (A)’’ and inserting ‘‘subparagraph (B) of paragraph (1)’’.

(7) Section 431(c)(1)(B) of the Personal Responsibility and

Work Opportunity Reconciliation Act of 1996 (8 U.S.C.

1641(c)(1)(B)) is amended—

(A) in clause (iii) by striking ‘‘, or’’ and inserting ‘‘(as

in effect prior to April 1, 1997),’’; and

(B) by adding after clause (iv) the following new clause:

‘‘(v) cancellation of removal pursuant to section

240A(b)(2) of such Act;’’.

SEC. 5582. EFFECTIVE DATE.

Except as otherwise provided, the amendments made by this

chapter shall be effective as if included in the enactment of title

IV of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996.

CHAPTER 5—CHILD PROTECTION

SEC. 5591. CONFORMING AND TECHNICAL AMENDMENTS RELATING

TO CHILD PROTECTION.

(a) METHODS PERMITTED FOR CONDUCT OF STUDY OF CHILD

WELFARE.—Section 429A(a) (42 U.S.C. 628b(a)) is amended by

inserting ‘‘(directly, or by grant, contract, or interagency agreement)’’ after ‘‘conduct’’.

(b) REDESIGNATION OF PARAGRAPH.—Section 471(a) (42 U.S.C.

671(a)) is amended—

(1) by striking ‘‘and’’ at the end of paragraph (17);
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(2) by striking the period at the end of paragraph (18)

(as added by section 1808(a) of the Small Business Job Protection Act of 1996 (Public Law 104–188; 110 Stat. 1903)) and

inserting ‘‘; and’’; and

(3) by redesignating paragraph (18) (as added by section

505(3) of the Personal Responsibility and Work Opportunity

Reconciliation Act of 1996 (Public Law 104–193; 110 Stat.

2278)) as paragraph (19).

SEC. 5592. ADDITIONAL TECHNICAL AMENDMENTS RELATING TO

CHILD PROTECTION.

(a) PART B AMENDMENTS.—

(1) IN GENERAL.—Part B of title IV (42 U.S.C. 620–635)

is amended—

(A) in section 422(b)—

(i) by striking the period at the end of the paragraph (9) (as added by section 554(3) of the Improving

America’s Schools Act of 1994 (Public Law 103–382;

108 Stat. 4057)) and inserting a semicolon;

(ii) by redesignating paragraph (10) as paragraph

(11); and

(iii) by redesignating paragraph (9), as added by

section 202(a)(3) of the Social Security Act Amendments of 1994 (Public Law 103–432, 108 Stat. 4453),

as paragraph (10);

(B) in sections 424(b) and 425(a), by striking ‘‘422(b)(9)’’

each place it appears and inserting ‘‘422(b)(10)’’; and

(C) by transferring section 429A (as added by section

503 of the Personal Responsibility and Work Opportunity

Reconciliation Act of 1996 (Public Law 104–193; 110 Stat.

2277)) to the end of subpart 1.

(2) CLARIFICATION OF CONFLICTING AMENDMENTS.—Section

204(a)(2) of the Social Security Act Amendments of 1994 (Public

Law 103–432; 108 Stat. 4456) is amended by inserting ‘‘(as

added by such section 202(a))’’ before ‘‘and inserting’’.

(b) PART E AMENDMENTS.—Section 472(d) (42 U.S.C. 672(d))

is amended by striking ‘‘422(b)(9)’’ and inserting ‘‘422(b)(10)’’.

SEC. 5593. EFFECTIVE DATE.

The amendments made by this chapter shall take effect as

if included in the enactment of title V of the Personal Responsibility

and Work Opportunity Reconciliation Act of 1996 (Public Law 104–

193; 110 Stat. 2277).

CHAPTER 6—CHILD CARE

SEC. 5601. CONFORMING AND TECHNICAL AMENDMENTS RELATING

TO CHILD CARE.

(a) FUNDING.—Section 418(a) (42 U.S.C. 618(a)) is amended—

(1) in paragraph (1)—

(A) in the matter preceding subparagraph (A), by

inserting ‘‘the greater of’’ after ‘‘equal to’’;

(B) in subparagraph (A)—

(i) by striking ‘‘the sum of’’;

(ii) by striking ‘‘amounts expended’’ and inserting

‘‘expenditures’’; and
H. R. 2015—395

(iii) by striking ‘‘section—’’ and all that follows

and inserting ‘‘subsections (g) and (i) of section 402

(as in effect before October 1, 1995); or’’;

(C) in subparagraph (B)—

(i) by striking ‘‘sections’’ and inserting ‘‘subsections’’; and

(ii) by striking the semicolon at the end and inserting a period; and

(D) in the matter following subparagraph (B), by striking ‘‘whichever is greater.’’; and

(2) in paragraph (2)—

(A) by striking subparagraph (B) and inserting the

following:

‘‘(B) ALLOTMENTS TO STATES.—The total amount available for payments to States under this paragraph, as determined under subparagraph (A), shall be allotted among

the States based on the formula used for determining the

amount of Federal payments to each State under section

403(n) (as in effect before October 1, 1995).’’;

(B) by striking subparagraph (C) and inserting the

following:

‘‘(C) FEDERAL MATCHING OF STATE EXPENDITURES

EXCEEDING HISTORICAL EXPENDITURES.—The Secretary

shall pay to each eligible State for a fiscal year an amount

equal to the lesser of the State’s allotment under subparagraph (B) or the Federal medical assistance percentage

for the State for the fiscal year (as defined in section

1905(b), as such section was in effect on September 30,

1995) of so much of the State’s expenditures for child

care in that fiscal year as exceed the total amount of

expenditures by the State (including expenditures from

amounts made available from Federal funds) in fiscal year

1994 or 1995 (whichever is greater) for the programs

described in paragraph (1)(A).’’; and

(C) in subparagraph (D)(i)—

(i) by striking ‘‘amounts under any grant awarded’’

and inserting ‘‘any amounts allotted’’; and

(ii) by striking ‘‘the grant is made’’ and inserting

‘‘such amounts are allotted’’.

(b) DATA USED TO DETERMINE HISTORIC STATE EXPENDI- TURES.—Section 418(a) (42 U.S.C. 618(a)) is amended by adding

at the end the following:

‘‘(5) DATA USED TO DETERMINE STATE AND FEDERAL SHARES

OF EXPENDITURES.—In making the determinations concerning

expenditures required under paragraphs (1) and (2)(C), the

Secretary shall use information that was reported by the State

on ACF Form 231 and available as of the applicable dates

specified in clauses (i)(I), (ii), and (iii)(III) of section

403(a)(1)(D).’’.

(c) DEFINITION OF STATE.—Section 418(d) (42 U.S.C. 618(d))

is amended by striking ‘‘or’’ and inserting ‘‘and’’.

SEC. 5602. ADDITIONAL CONFORMING AND TECHNICAL AMENDMENTS.

The Child Care and Development Block Grant Act of 1990

(42 U.S.C. 9858 et seq.) is amended—

(1) in section 658E(c)(2)(E)(ii), by striking ‘‘tribal organization’’ and inserting ‘‘tribal organizations’’;
H. R. 2015—396

(2) in section 658K(a)—

(A) in paragraph (1)—

(i) in subparagraph (B)—

(I) by striking clause (iv) and inserting the

following:

‘‘(iv) whether the head of the family unit is a

single parent;’’;

(II) in clause (v)—

(aa) in the matter preceding subclause (I),

by striking ‘‘including the amount obtained

from (and separately identified)—’’ and inserting ‘‘including—’’; and

(bb) by striking subclause (II) and inserting the following:

‘‘(II) cash or other assistance under—

‘‘(aa) the temporary assistance for needy

families program under part A of title IV of

the Social Security Act (42 U.S.C. 601 et seq.);

and

‘‘(bb) a State program for which State

spending is counted toward the maintenance

of effort requirement under section 409(a)(7)

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

609(a)(7));’’; and

(III) in clause (x), by striking ‘‘week’’ and

inserting ‘‘month’’; and

(ii) by striking subparagraph (D) and inserting

the following:

‘‘(D) USE OF SAMPLES.—

‘‘(i) AUTHORITY.—A State may comply with the

requirement to collect the information described in

subparagraph (B) through the use of disaggregated

case record information on a sample of families selected

through the use of scientifically acceptable sampling

methods approved by the Secretary.

‘‘(ii) SAMPLING AND OTHER METHODS.—The Secretary shall provide the States with such case sampling

plans and data collection procedures as the Secretary

deems necessary to produce statistically valid samples

of the information described in subparagraph (B). The

Secretary may develop and implement procedures for

verifying the quality of data submitted by the States.’’;

and

(B) in paragraph (2)—

(i) in the heading, by striking ‘‘BIANNUAL’’ and

inserting ‘‘ANNUAL’’; and

(ii) by striking ‘‘6’’ and inserting ‘‘12’’;

(3) in section 658L, by striking ‘‘1997’’ and inserting ‘‘1998’’;

(4) in section 658O(c)(6)(C), by striking ‘‘(A)’’ and inserting

‘‘(B)’’; and

(5) in section 658P(13), by striking ‘‘or’’ and inserting ‘‘and’’.

SEC. 5603. EFFECTIVE DATES.

(a) IN GENERAL.—Except as provided in subsection (b), this

chapter and the amendments made by this chapter shall take

effect as if included in the enactment of title VI of the Personal
H. R. 2015—397

Responsibility and Work Opportunity Reconciliation Act of 1996

(Public Law 104–193; 110 Stat. 2278).

(b) EXCEPTIONS.—The amendment made by section

5601(a)(2)(B) shall take effect on October 1, 1997.

CHAPTER 7—ERISA AMENDMENTS RELATING TO

MEDICAL CHILD SUPPORT ORDERS

SEC. 5611. AMENDMENTS RELATING TO SECTION 303 OF THE PERSONAL RESPONSIBILITY AND WORK OPPORTUNITY RECONCILIATION ACT OF 1996.

(a) PRIVACY SAFEGUARDS FOR MEDICAL CHILD SUPPORT

ORDERS.—Section 609(a)(3)(A) of the Employee Retirement Income

Security Act of 1974 (29 U.S.C. 1169(a)(3)(A)) is amended by adding

at the end the following: ‘‘except that, to the extent provided in

the order, the name and mailing address of an official of a State

or a political subdivision thereof may be substituted for the mailing

address of any such alternate recipient,’’.

(b) PAYMENT TO STATE OFFICIAL TREATED AS SATISFACTION

OF PLAN’S OBLIGATION.—Section 609(a) of such Act (29 U.S.C.

1169(a)) is amended by adding at the end the following new paragraph:

‘‘(9) PAYMENT TO STATE OFFICIAL TREATED AS SATISFACTION

OF PLAN’S OBLIGATION TO MAKE PAYMENT TO ALTERNATE RECIPI- ENT.—Payment of benefits by a group health plan to an official

of a State or a political subdivision thereof whose name and

address have been substituted for the name and address of

an alternate recipient in a qualified medical child support order,

pursuant to paragraph (3)(A), shall be treated, for purposes

of this title, as payment of benefits to the alternate recipient.’’.

(c) EFFECTIVE DATE.—The amendments made by this section

shall apply with respect to medical child support orders issued

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

SEC. 5612. AMENDMENT RELATING TO SECTION 381 OF THE PERSONAL

RESPONSIBILITY AND WORK OPPORTUNITY RECONCILIATION ACT OF 1996.

(a) CLARIFICATION OF EFFECT OF ADMINISTRATIVE NOTICES.— Section 609(a)(2)(B) of the Employee Retirement Income Security

Act of 1974 (29 U.S.C. 1169(a)(2)(B)) is amended by adding at

the end the following new sentence: ‘‘For purposes of this subparagraph, an administrative notice which is issued pursuant to an

administrative process referred to in subclause (II) of the preceding

sentence and which has the effect of an order described in clause

(i) or (ii) of the preceding sentence shall be treated as such an

order.’’.

(b) EFFECTIVE DATE.—The amendment made by this section

shall be effective as if included in the enactment of section 381

of the Personal Responsibility and Work Opportunity Reconciliation

Act of 1996 (Public Law 104–193; 110 Stat. 2257).

SEC. 5613. AMENDMENTS RELATING TO SECTION 382 OF THE PERSONAL RESPONSIBILITY AND WORK OPPORTUNITY RECONCILIATION ACT OF 1996.

(a) ELIMINATION OF REQUIREMENT THAT ORDERS SPECIFY

AFFECTED PLANS.—Section 609(a)(3) of the Employee Retirement

Income Security Act of 1974 (29 U.S.C. 1169(a)(3)) is amended—

(1) in subparagraph (B), by striking ‘‘by the plan’’;
H. R. 2015—398

(2) by adding ‘‘and’’ at the end of subparagraph (B);

(3) in subparagraph (C), by striking ‘‘, and’’ and inserting

a period; and

(4) by striking subparagraph (D).

(b) CLARIFICATION OF APPLICABILITY OF ORDERS.—Section

609(a)(1) of such Act (29 U.S.C. 1169(a)(1)) is amended by adding

at the end the following new sentence: ‘‘A qualified medical child

support order with respect to any participant or beneficiary shall

be deemed to apply to each group health plan which has received

such order, from which the participant or beneficiary is eligible

to receive benefits, and with respect to which the requirements

of paragraph (4) are met.’’.

(c) EFFECTIVE DATE.—The amendments made by this section

shall apply with respect to medical child support orders issued

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

Subtitle G—Miscellaneous

SEC. 5701. INCREASE IN PUBLIC DEBT LIMIT.

Subsection (b) of section 3101 of title 31, United States Code,

is amended by striking the dollar amount contained therein and

inserting ‘‘$5,950,000,000,000’’.

SEC. 5702. AUTHORIZATION OF APPROPRIATIONS FOR ENFORCEMENT

INITIATIVES RELATED TO THE EARNED INCOME TAX

CREDIT.

In addition to any other funds available therefor, there are

authorized to be appropriated to the Secretary of the Treasury,

for improved application of the earned income credit under section

32 of the Internal Revenue Code of 1986, not more than— (1) $138,000,000 for fiscal year 1998;

(2) $143,000,000 for fiscal year 1999;

(3) $144,000,000 for fiscal year 2000;

(4) $145,000,000 for fiscal year 2001; and

(5) $146,000,000 for fiscal year 2002.

TITLE VI—EDUCATION AND RELATED

PROVISIONS

Subtitle A—Higher Education

SEC. 6101. MANAGEMENT AND RECOVERY OF RESERVES.

(a) AMENDMENT.—Section 422 of the Higher Education Act

of 1965 (20 U.S.C. 1072) is amended by adding after subsection

(g) the following new subsection:

‘‘(h) RECALL OF RESERVES; LIMITATIONS ON USE OF RESERVE

FUNDS AND ASSETS.—

‘‘(1) IN GENERAL.—Notwithstanding any other provision of

law, the Secretary shall, except as otherwise provided in this

subsection, recall $1,000,000,000 from the reserve funds held

by guaranty agencies on September 1, 2002.

‘‘(2) DEPOSIT.—Funds recalled by the Secretary under this

subsection shall be deposited in the Treasury.

‘‘(3) REQUIRED SHARE.—The Secretary shall require each

guaranty agency to return reserve funds under paragraph (1)
H. R. 2015—399

based on the agency’s required share of recalled reserve funds

held by guaranty agencies as of September 30, 1996. For purposes of this paragraph, a guaranty agency’s required share

of recalled reserve funds shall be determined as follows:

‘‘(A) The Secretary shall compute each guaranty agency’s reserve ratio by dividing (i) the amount held in the

agency’s reserve funds as of September 30, 1996 (but

reflecting later accounting or auditing adjustments

approved by the Secretary), by (ii) the original principal

amount of all loans for which the agency has an outstanding insurance obligation as of such date, including amounts

of outstanding loans transferred to the agency from another

guaranty agency.

‘‘(B) If the reserve ratio of any guaranty agency as

computed under subparagraph (A) exceeds 2.0 percent, the

agency’s required share shall include so much of the

amounts held in the agency’s reserve funds as exceed a

reserve ratio of 2.0 percent.

‘‘(C) If any additional amount is required to be recalled

under paragraph (1) (after deducting the total of the

required shares calculated under subparagraph (B)), such

additional amount shall be obtained by imposing on each

guaranty agency an equal percentage reduction in the

amount of the agency’s reserve funds remaining after

deduction of the amount recalled under subparagraph (B),

except that such percentage reduction under this subparagraph shall not result in the agency’s reserve ratio being

reduced below 0.58 percent. The equal percentage reduction

shall be the percentage obtained by dividing—

‘‘(i) the additional amount required to be recalled

(after deducting the total of the required shares calculated under subparagraph (B)), by

‘‘(ii) the total amount of all such agencies’ reserve

funds remaining (after deduction of the required shares

calculated under such subparagraph).

‘‘(D) If any additional amount is required to be recalled

under paragraph (1) (after deducting the total of the

required shares calculated under subparagraphs (B) and

(C)), such additional amount shall be obtained by imposing

on each guaranty agency with a reserve ratio (after deducting the required shares calculated under such subparagraphs) in excess of 0.58 percent an equal percentage reduction in the amount of the agency’s reserve funds remaining

(after such deduction) that exceed a reserve ratio of 0.58

percent. The equal percentage reduction shall be the

percentage obtained by dividing—

‘‘(i) the additional amount to be recalled under

paragraph (1) (after deducting the amount recalled

under subparagraphs (B) and (C)), by

‘‘(ii) the total amount of all such agencies’ reserve

funds remaining (after deduction of the required shares

calculated under such subparagraphs) that exceed a

reserve ratio of 0.58 percent.

‘‘(4) RESTRICTED ACCOUNTS REQUIRED.—

‘‘(A) IN GENERAL.—Within 90 days after the beginning

of each of the fiscal years 1998 through 2002, each guaranty

agency shall transfer a portion of the agency’s required
H. R. 2015—400

share determined under paragraph (3) to a restricted

account established by the agency that is of a type selected

by the agency with the approval of the Secretary. Funds

transferred to such restricted accounts shall be invested

in obligations issued or guaranteed by the United States

or in other similarly low-risk securities.

‘‘(B) REQUIREMENT.—A guaranty agency shall not use

the funds in such a restricted account for any purpose

without the express written permission of the Secretary,

except that a guaranty agency may use the earnings from

such restricted account for default reduction activities.

‘‘(C) INSTALLMENTS.—In each of fiscal years 1998

through 2002, each guaranty agency shall transfer the

agency’s required share to such restricted account in 5

equal annual installments, except that—

‘‘(i) a guaranty agency that has a reserve ratio

(as computed under subparagraph (3)(A)) equal to or

less than 1.10 percent may transfer the agency’s

required share to such account in 4 equal installments

beginning in fiscal year 1999; and

‘‘(ii) a guaranty agency may transfer such required

share to such account in accordance with such other

payment schedules as are approved by the Secretary.

‘‘(5) SHORTAGE.—If, on September 1, 2002, the total amount

in the restricted accounts described in paragraph (4) is less

than the amount the Secretary is required to recall under

paragraph (1), the Secretary shall require the return of the

amount of the shortage from other reserve funds held by guaranty agencies under procedures established by the Secretary.

The Secretary shall first attempt to obtain the amount of such

shortage from each guaranty agency that failed to transfer

the agency’s required share to the agency’s restricted account

in accordance with paragraph (4).

‘‘(6) ENFORCEMENT.—

‘‘(A) IN GENERAL.—The Secretary may take such

reasonable measures, and require such information, as may

be necessary to ensure that guaranty agencies comply with

the requirements of this subsection.

‘‘(B) PROHIBITION.—If the Secretary determines that

a guaranty agency has failed to transfer to a restricted

account any portion of the agency’s required share under

this subsection, the agency may not receive any other funds

under this part until the Secretary determines that the

agency has so transferred the agency’s required share.

‘‘(C) WAIVER.—The Secretary may waive the requirements of subparagraph (B) for a guaranty agency described

in such subparagraph if the Secretary determines that

there are extenuating circumstances beyond the control

of the agency that justify such waiver.

‘‘(7) LIMITATION.—

‘‘(A) RESTRICTION ON OTHER AUTHORITY.—The Secretary shall not have any authority to direct a guaranty

agency to return reserve funds under subsection (g)(1)(A)

during the period from the date of enactment of the Balanced Budget Act of 1997 through September 30, 2002.
H. R. 2015—401

‘‘(B) USE OF TERMINATION COLLECTIONS.—Any reserve

funds directed by the Secretary to be returned to the Secretary under subsection (g)(1)(B) during such period that

do not exceed a guaranty agency’s required share of recalled

reserve funds under paragraph (3)—

‘‘(i) shall be used to satisfy the agency’s required

share of recalled reserve funds; and

‘‘(ii) shall be deposited in the restricted account

established by the agency under paragraph (4), without

regard to whether such funds exceed the next installment required under such paragraph.

‘‘(C) USE OF SANCTIONS COLLECTIONS.—Any reserve

funds directed by the Secretary to be returned to the Secretary under subsection (g)(1)(C) during such period that

do not exceed a guaranty agency’s next installment under

paragraph (4)—

‘‘(i) shall be used to satisfy the agency’s next

installment; and

‘‘(ii) shall be deposited in the restricted account

established by the agency under paragraph (4).

‘‘(D) BALANCE AVAILABLE TO SECRETARY.—Any reserve

funds directed by the Secretary to be returned to the Secretary under subparagraph (B) or (C) of subsection (g)(1)

that remain after satisfaction of the requirements of subparagraphs (B) and (C) of this paragraph shall be deposited

in the Treasury.

‘‘(8) DEFINITIONS.—For the purposes of this subsection:

‘‘(A) DEFAULT REDUCTION ACTIVITIES.—The term

‘default reduction activities’ means activities to reduce student loan defaults that improve, strengthen, and expand

default prevention activities, such as—

‘‘(i) establishing a program of partial loan cancellation to reward disadvantaged borrowers for good repayment histories with their lenders;

‘‘(ii) establishing a financial and debt management

counseling program for high-risk borrowers that provides long-term training (beginning prior to the first

disbursement of the borrower’s first student loan and

continuing through the completion of the borrower’s

program of education or training) in budgeting and

other aspects of financial management, including debt

management;

‘‘(iii) establishing a program of placement counseling to assist high-risk borrowers in identifying employment or additional training opportunities; and

‘‘(iv) developing public service announcements that

would detail consequences of student loan default and

provide information regarding a toll-free telephone

number established by the guaranty agency for use

by borrowers seeking assistance in avoiding default.

‘‘(B) RESERVE FUNDS.—The term ‘reserve funds’ when

used with respect to a guaranty agency—

‘‘(i) includes any reserve funds in cash or liquid

assets held by the guaranty agency, or held by, or

under the control of, any other entity; and

‘‘(ii) does not include buildings, equipment, or other

nonliquid assets.’’.
H. R. 2015—402

(b) CONFORMING AMENDMENT.—Section 428(c)(9)(A) of the

Higher Education Act of 1965 (20 U.S.C. 1078(c)(9)(A)) is amended—

(1) in the first sentence, by striking ‘‘for the fiscal year

of the agency that begins in 1993’’; and

(2) by striking the third sentence.

SEC. 6102. REPEAL OF DIRECT LOAN ORIGINATION FEES TO INSTITUTIONS OF HIGHER EDUCATION.

Section 452 of the Higher Education Act of 1965 (20 U.S.C.

1087b) is amended—

(1) by striking subsection (b); and

(2) by redesignating subsections (c) and (d) as subsections

(b) and (c), respectively.

SEC. 6103. FUNDS FOR ADMINISTRATIVE EXPENSES.

Subsection (a) of section 458 of the Higher Education Act of

1965 (20 U.S.C. 1087h(a)) is amended to read as follows:

‘‘(a) ADMINISTRATIVE EXPENSES.—

‘‘(1) IN GENERAL.—Each fiscal year, there shall be available

to the Secretary from funds not otherwise appropriated, funds

to be obligated for—

‘‘(A) administrative costs under this part and part B,

including the costs of the direct student loan programs

under this part, and

‘‘(B) administrative cost allowances payable to guaranty agencies under part B and calculated in accordance

with paragraph (2),

not to exceed (from such funds not otherwise appropriated)

$532,000,000 in fiscal year 1998, $610,000,000 in fiscal year

1999, $705,000,000 in fiscal year 2000, $750,000,000 in fiscal

year 2001, and $750,000,000 in fiscal year 2002. Administrative

cost allowances under subparagraph (B) of this paragraph shall

be paid quarterly and used in accordance with section 428(f).

The Secretary may carry over funds available under this section

to a subsequent fiscal year.

‘‘(2) CALCULATION BASIS.—Administrative cost allowances

payable to guaranty agencies under paragraph (1)(B) shall be

calculated on the basis of 0.85 percent of the total principal

amount of loans upon which insurance was issued in excess

of $8,200,000,000 in fiscal year 1997 and upon which insurance

is issued on or after October 1, 1997, except that such allowances shall not exceed—

‘‘(A) $170,000,000 for each of the fiscal years 1998

and 1999; or

‘‘(B) $150,000,000 for each of the fiscal years 2000,

2001, and 2002.’’.

SEC. 6104. EXTENSION OF STUDENT AID PROGRAMS.

Title IV of the Higher Education Act of 1965 (20 U.S.C. 1070

et seq.) is amended—

(1) in section 424(a), by striking ‘‘1998.’’ and ‘‘2002.’’ and

inserting ‘‘2002.’’ and ‘‘2006.’’, respectively;

(2) in section 428(a)(5), by striking ‘‘1998,’’ and ‘‘2002.’’

and inserting ‘‘2002,’’ and ‘‘2006.’’, respectively; and

(3) in section 428C(e), by striking ‘‘1998.’’ and inserting

‘‘2002.’’.
H. R. 2015—403

Subtitle B—Repeal of Smith-Hughes

Vocational Education Act

SEC. 6201. REPEAL OF SMITH-HUGHES VOCATIONAL EDUCATION ACT.

The Act of February 23, 1917 (39 Stat. 929, chapter 114; 20

U.S.C. 11 et seq.) (commonly known as the ‘‘Smith-Hughes Vocational Education Act’’), is repealed.

TITLE VII—CIVIL SERVICE RETIREMENT AND RELATED PROVISIONS

SEC. 7001. INCREASED CONTRIBUTIONS TO FEDERAL CIVILIAN

RETIREMENT SYSTEMS.

(a) CIVIL SERVICE RETIREMENT SYSTEM.—

(1) AGENCY CONTRIBUTIONS.—

(A) IN GENERAL.— Notwithstanding section 8334 (a)(1)

or (k)(1) of title 5, United States Code, during the period

beginning on October 1, 1997, through September 30, 2002,

each employing agency (other than the United States Postal

Service or the Metropolitan Washington Airports Authority)

shall contribute—

(i) 8.51 percent of the basic pay of an employee;

(ii) 9.01 percent of the basic pay of a congressional

employee, a law enforcement officer, a member of the

Capitol police, or a firefighter; and

(iii) 9.51 percent of the basic pay of a Member

of Congress, a Court of Federal Claims judge, a United

States magistrate, a judge of the United States Court

of Appeals for the Armed Forces, or a bankruptcy

judge;

in lieu of the agency contributions otherwise required under

section 8334(a)(1) of title 5, United States Code.

(B) APPLICATION.—For purposes of subparagraph (A)

and notwithstanding the amendments made by paragraph

(3), during the period beginning on January 1, 1999 through

December 31, 2002, with respect to the United States Postal

Service and the Metropolitan Washington Airports Authority, the agency contribution shall be determined as though

those amendments had not been made.

(2) NO REDUCTION IN AGENCY CONTRIBUTIONS BY THE

POSTAL SERVICE.—Contributions by the Treasury of the United

States or the United States Postal Service under section 8348

(g), (h), or (m) of title 5, United States Code—

(A) shall not be reduced as a result of the amendments

made under paragraph (3) of this subsection; and

(B) shall be computed as though such amendments

had not been enacted.

(3) INDIVIDUAL DEDUCTIONS, WITHHOLDINGS, AND

DEPOSITS.—

(A) DEDUCTIONS.—The first sentence of section

8334(a)(1) of title 5, United States Code, is amended to

read as follows: ‘‘The employing agency shall deduct and

withhold from the basic pay of an employee, Member,
H. R. 2015—404

Congressional employee, law enforcement officer, firefighter, bankruptcy judge, judge of the United States Court

of Appeals for the Armed Forces, United States magistrate,

Court of Federal Claims judge, or member of the Capitol

Police, as the case may be, the percentage of basic pay

applicable under subsection (c).’’.

(B) DEPOSITS.—The table under section 8334(c) of title

5, United States Code, is amended—

(i) in the matter relating to an employee by striking:

‘‘7 ........... After December 31, 1969.’’;

and inserting the following:

‘‘7 ........... January 1, 1970, to December 31,

1998.

7.25 ..... January 1, 1999, to December 31,

1999.

7.4 ....... January 1, 2000, to December 31,

2000.

7.5 ....... January 1, 2001, to December 31,

2002.

7 .......... After December 31, 2002.’’;

(ii) in the matter relating to a Member or employee

for congressional employee service by striking:

‘‘71⁄2 ....... After December 31, 1969.’’;

and inserting the following:

‘‘7.5 ........ January 1, 1970, to December 31,

1998.

7.75 ..... January 1, 1999, to December 31,

1999.

7.9 ....... January 1, 2000, to December 31,

2000.

8 .......... January 1, 2001, to December 31,

2002.

7.5 ....... After December 31, 2002.’’;

(iii) in the matter relating to a Member for Member

service by striking:

‘‘8 ........... After December 31, 1969.’’;

and inserting the following:

‘‘8 ........... January 1, 1970, to December 31,

1998.

8.25 ..... January 1, 1999, to December 31,

1999.

8.4 ....... January 1, 2000, to December 31,

2000.
H. R. 2015—405

8.5 ....... January 1, 2001, to December 31,

2002.

8 .......... After December 31, 2002.’’;

(iv) in the matter relating to a law enforcement

officer for law enforcement service and firefighter for

firefighter service by striking:

‘‘71⁄2 ....... After December 31, 1974.’’;

and inserting the following:

‘‘7.5 ........ January 1, 1975, to December 31,

1998.

7.75 ..... January 1, 1999, to December 31,

1999.

7.9 ....... January 1, 2000, to December 31,

2000.

8 .......... January 1, 2001, to December 31,

2002.

7.5 ....... After December 31, 2002.’’;

(v) in the matter relating to a bankruptcy judge

by striking:

‘‘8 ........... After December 31, 1983.’’;

and inserting the following:

‘‘8 ........... January 1, 1984, to December 31,

1998.

8.25 ..... January 1, 1999, to December 31,

1999.

8.4 ....... January 1, 2000, to December 31,

2000.

8.5 ....... January 1, 2001, to December 31,

2002.

8 .......... After December 31, 2002.’’;

(vi) in the matter relating to a judge of the United

States Court of Appeals for the Armed Forces for service as a judge of that court by striking:

‘‘8 ........... On and after the date of the enactment of the Department of Defense

Authorization Act, 1984.’’;

and inserting the following:

‘‘8 ........... The date of enactment of the Department of Defense Authorization Act,

1984, to December 31, 1998.

8.25 ..... January 1, 1999, to December 31,

1999.

8.4 ....... January 1, 2000, to December 31,

2000.
H. R. 2015—406

8.5 ....... January 1, 2001, to December 31,

2002.

8 .......... After December 31, 2002.’’;

(vii) in the matter relating to a United States

magistrate by striking:

‘‘8 ........... After September 30, 1987.’’;

and inserting the following:

‘‘8 ........... October 1, 1987, to December 31,

1998.

8.25 ..... January 1, 1999, to December 31,

1999.

8.4 ....... January 1, 2000, to December 31,

2000.

8.5 ....... January 1, 2001, to December 31,

2002.

8 .......... After December 31, 2002.’’;

(viii) in the matter relating to a Court of Federal

Claims judge by striking:

‘‘8 ........... After September 30, 1988.’’;

and insert the following:

‘‘8 ........... October 1, 1988, to December 31,

1998.

8.25 ..... January 1, 1999, to December 31,

1999.

8.4 ....... January 1, 2000, to December 31,

2000.

8.5 ....... January 1, 2001, to December 31,

2002.

8 .......... After December 31, 2002.’’;

and

(ix) by inserting after the matter relating to a

Court of Federal Claims judge the following:

‘‘Member of the Capitol Police ..................... 2.5 ......... August 1, 1920, to June

30, 1926.

3.5 ......... July 1, 1926, to June 30,

1942.

5 ............ July 1, 1942, to June 30,

1948.

6 ............ July 1, 1948, to October

31, 1956.

6.5 ......... November 1, 1956, to December 31, 1969.

7.5 ......... January 1, 1970, to December 31, 1998.

7.75 ....... January 1, 1999, to December 31, 1999.

7.9 ......... January 1, 2000, to December 31, 2000.

8 ............ January 1, 2001, to December 31, 2002.
H. R. 2015—407

7.5 ......... After December 31, 2002.’’.

(4) OTHER SERVICE.— (A) MILITARY SERVICE.—Section 8334(j) of title 5,

United States Code, is amended—

(i) in paragraph (1)(A) by inserting ‘‘and subject

to paragraph (5),’’ after ‘‘Except as provided in subparagraph (B),’’; and

(ii) by adding at the end the following new paragraph:

‘‘(5) Effective with respect to any period of military service

after December 31, 1998, the percentage of basic pay under section

204 of title 37 payable under paragraph (1) shall be equal to

the same percentage as would be applicable under subsection (c)

of this section for that same period for service as an employee,

subject to paragraph (1)(B).’’.

(B) VOLUNTEER SERVICE.—Section 8334(l) of title 5,

United States Code, is amended—

(i) in paragraph (1) by adding at the end the

following: ‘‘This paragraph shall be subject to paragraph (4).’’; and

(ii) by adding at the end the following new paragraph:

‘‘(4) Effective with respect to any period of service after December 31, 1998, the percentage of the readjustment allowance or

stipend (as the case may be) payable under paragraph (1) shall

be equal to the same percentage as would be applicable under

subsection (c) of this section for the same period for service as

an employee.’’.

(b) FEDERAL EMPLOYEES’ RETIREMENT SYSTEM.—

(1) INDIVIDUAL DEDUCTIONS AND WITHHOLDINGS.—

(A) IN GENERAL.—Section 8422(a) of title 5, United

States Code, is amended by striking paragraph (2) and

inserting the following:

‘‘(2) The percentage to be deducted and withheld from basic

pay for any pay period shall be equal to—

‘‘(A) the applicable percentage under paragraph (3), minus

‘‘(B) the percentage then in effect under section 3101(a)

of the Internal Revenue Code of 1986 (relating to rate of tax

for old-age, survivors, and disability insurance).

‘‘(3) The applicable percentage under this paragraph for civilian

service shall be as follows:

‘‘Employee ...................................................... 7 ............ January 1, 1987, to December 31, 1998.

7.25 ....... January 1, 1999, to December 31, 1999.

7.4 ......... January 1, 2000, to December 31, 2000.

7.5 ......... January 1, 2001, to December 31, 2002.

7 ............ After December 31, 2002.

Congressional employee ............................... 7.5 ......... January 1, 1987, to December 31, 1998.

7.75 ....... January 1, 1999, to December 31, 1999.

7.9 ......... January 1, 2000, to December 31, 2000.

8 ............ January 1, 2001, to December 31, 2002.
H. R. 2015—408

7.5 ......... After December 31, 2002.

Member .......................................................... 7.5 ......... January 1, 1987, to December 31, 1998.

7.75 ....... January 1, 1999, to December 31, 1999.

7.9 ......... January 1, 2000, to December 31, 2000.

8 ............ January 1, 2001, to December 31, 2002.

7.5 ......... After December 31, 2002.

Law enforcement officer, firefighter, member of the Capitol Police, or air traffic

controller.

7.5 ......... January 1, 1987, to December 31, 1998.

7.75 ....... January 1, 1999, to December 31, 1999.

7.9 ......... January 1, 2000, to December 31, 2000.

8 ............ January 1, 2001, to December 31, 2002.

7.5 ......... After December 31, 2002.’’.

(B) MILITARY SERVICE.—Section 8422(e) of title 5,

United States Code, is amended—

(i) in paragraph (1)(A) by inserting ‘‘and subject

to paragraph (6),’’ after ‘‘Except as provided in subparagraph (B),’’; and

(ii) by adding at the end the following:

‘‘(6) The percentage of basic pay under section 204 of title

37 payable under paragraph (1), with respect to any period of

military service performed during—

‘‘(A) January 1, 1999, through December 31, 1999, shall

be 3.25 percent;

‘‘(B) January 1, 2000, through December 31, 2000, shall

be 3.4 percent; and

‘‘(C) January 1, 2001, through December 31, 2002, shall

be 3.5 percent.’’.

(C) VOLUNTEER SERVICE.—Section 8422(f) of title 5,

United States Code, is amended—

(i) in paragraph (1) by adding at the end the

following: ‘‘This paragraph shall be subject to paragraph (4).’’; and

(ii) by adding at the end the following:

‘‘(4) The percentage of the readjustment allowance or stipend

(as the case may be) payable under paragraph (1), with respect

to any period of volunteer service performed during—

‘‘(A) January 1, 1999, through December 31, 1999, shall

be 3.25 percent;

‘‘(B) January 1, 2000, through December 31, 2000, shall

be 3.4 percent; and

‘‘(C) January 1, 2001, through December 31, 2002, shall

be 3.5 percent.’’.

(2) NO REDUCTION IN AGENCY CONTRIBUTIONS.—Contributions under section 8423 (a) and (b) of title 5, United States

Code, shall not be reduced as a result of the amendments

made under paragraph (1) of this subsection.

(c) CENTRAL INTELLIGENCE AGENCY RETIREMENT AND DISABILITY SYSTEM.—

(1) AGENCY CONTRIBUTIONS.—Notwithstanding section

211(a)(2) of the Central Intelligence Agency Retirement Act

(50 U.S.C. 2021(a)(2)), during the period beginning on October

1, 1997, through September 30, 2002, the Central Intelligence

Agency shall contribute 8.51 percent of the basic pay of an
H. R. 2015—409

employee participating in the Central Intelligence Agency

Retirement and Disability System in lieu of the agency contribution otherwise required under section 211(a)(2) of such Act.

(2) INDIVIDUAL DEDUCTIONS, WITHHOLDINGS, AND

DEPOSITS.—Notwithstanding section 211(a)(1) of the Central

Intelligence Agency Retirement Act (50 U.S.C. 2021(a)(1))

beginning on January 1, 1999, through December 31, 2002,

the percentage deducted and withheld from the basic pay of

an employee participating in the Central Intelligence Agency

Retirement and Disability System shall be as follows:

7.25 ..... January 1, 1999, to December 31,

1999.

7.4 ....... January 1, 2000, to December 31,

2000.

7.5 ....... January 1, 2001, to December 31,

2002.

(3) MILITARY SERVICE.—Section 252(h)(1) of the Central

Intelligence Agency Retirement Act (50 U.S.C. 2082(h)(1)), is

amended to read as follows:

‘‘(h)(1)(A) Each participant who has performed military service

before the date of separation on which entitlement to an annuity

under this title is based may pay to the Agency an amount equal

to 7 percent of the amount of basic pay paid under section 204

of title 37, United States Code, to the participant for each period

of military service after December 1956; except, the amount to

be paid for military service performed beginning on January 1,

1999, through December 31, 2002, shall be as follows:

‘‘7.25 percent

of basic pay.

January 1, 1999, to December 31,

1999.

7.4 percent of

basic pay.

January 1, 2000, to December 31,

2000.

7.5 percent of

basic pay.

January 1, 2001, to December 31,

2002.

‘‘(B) The amount of such payments shall be based on such

evidence of basic pay for military service as the participant may

provide or, if the Director determines sufficient evidence has not

been provided to adequately determine basic pay for military service, such payment shall be based upon estimates of such basic

pay provided to the Director under paragraph (4).’’.

(d) FOREIGN SERVICE RETIREMENT AND DISABILITY SYSTEM.—

(1) AGENCY CONTRIBUTIONS.—Notwithstanding section

805(a) (1) and (2) of the Foreign Service Act of 1980 (22 U.S.C.

4045(a) (1) and (2)), during the period beginning on October

1, 1997, through September 30, 2002, each agency employing

a participant in the Foreign Service Retirement and Disability

System shall contribute to the Foreign Service Retirement and

Disability Fund—

(A) 8.51 percent of the basic pay of each participant

covered under section 805(a)(1) of such Act participating

in the Foreign Service Retirement and Disability System;

and
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(B) 9.01 percent of the basic pay of each participant

covered under section 805(a)(2) of such Act participating

in the Foreign Service Retirement and Disability System;

in lieu of the agency contribution otherwise required under

section 805(a) (1) and (2) of such Act.

(2) INDIVIDUAL DEDUCTIONS, WITHHOLDINGS, AND

DEPOSITS.—

(A) IN GENERAL.—Notwithstanding section 805(a)(1) of

the Foreign Service Act of 1980 (22 U.S.C. 4045(a)(1)),

beginning on January 1, 1999, through December 31, 2002,

the amount withheld and deducted from the basic pay

of a participant in the Foreign Service Retirement and

Disability System shall be as follows:

7.25 ..... January 1, 1999, to December 31,

1999.

7.4 ....... January 1, 2000, to December 31,

2000.

7.5 ....... January 1, 2001, to December 31,

2002.

(B) FOREIGN SERVICE CRIMINAL INVESTIGATORS/INSPECTORS OF THE OFFICE OF THE INSPECTOR GENERAL, AGENCY

FOR INTERNATIONAL DEVELOPMENT.—Notwithstanding section 805(a)(2) of the Foreign Service Act of 1980 (22 U.S.C.

4045(a)(2)), beginning on January 1, 1999, through December 31, 2002, the amount withheld and deducted from

the basic pay of an eligible Foreign Service criminal investigator/inspector of the Office of the Inspector General,

Agency for International Development participating in the

Foreign Service Retirement and Disability System shall

be as follows:

7.75 ..... January 1, 1999, to December 31,

1999.

7.9 ....... January 1, 2000, to December 31,

2000.

8 .......... January 1, 2001, to December 31,

2002.

(C) CONFORMING AMENDMENT.—Section 805(d)(1) of the

Foreign Service Act of 1980 (22 U.S.C. 4045(d)(1)) is amended in the table in the matter following subparagraph (B)

by striking:

‘‘On and after January 1, 1970 ...................................... 7’’;

and inserting the following:

‘‘January 1, 1970, through December 31, 1998, inclusive.7

January 1, 1999, through December 31, 1999, inclusive.7.25

January 1, 2000, through December 31, 2000, inclusive.7.4
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January 1, 2001, through December 31, 2002, inclusive.7.5

After December 31, 2002 ............................................. 7’’.

(D) MILITARY SERVICE.—Section 805(e) of the Foreign

Service Act of 1980 (22 U.S.C. 4045(e)) is amended—

(i) in subsection (e)(1) by striking ‘‘Each’’ and

inserting ‘‘Subject to paragraph (5), each’’; and

(ii) by adding after paragraph (4) the following

new paragraph:

‘‘(5) Effective with respect to any period of military or naval

service after December 31, 1998, the percentage of basic pay under

section 204 of title 37, United States Code, payable under paragraph

(1) shall be equal to the same percentage as would be applicable

under section 8334(c) of title 5, United States Code, for that same

period for service as an employee.’’.

(e) FOREIGN SERVICE PENSION SYSTEM.—

(1) INDIVIDUAL DEDUCTIONS AND WITHHOLDINGS FROM

PAY.—

(A) IN GENERAL.—Section 856(a) of the Foreign Service

Act of 1980 (22 U.S.C. 4071e(a)) is amended to read as

follows:

‘‘(a)(1) The employing agency shall deduct and withhold from

the basic pay of each participant the applicable percentage of basic

pay specified in paragraph (2) of this subsection minus the percentage then in effect under section 3101(a) of the Internal Revenue

Code of 1986 (26 U.S.C. 3101(a)) (relating to the rate of tax for

old age, survivors, and disability insurance).

‘‘(2) The applicable percentage under this subsection shall be

as follows:

‘‘7.5 ........ Before January 1, 1999.

7.75 ..... January 1, 1999, to December 31,

1999.

7.9 ....... January 1, 2000, to December 31,

2000.

8 .......... January 1, 2001, to December 31,

2002.

7.5 ....... After December 31, 2002.’’.

(B) VOLUNTEER SERVICE.—Subsection 854(c) of the Foreign Service Act of 1980 (22 U.S.C. 4071c(c)) is amended

to read as follows:

‘‘(c)(1) Credit shall be given under this System to a participant

for a period of prior satisfactory service as—

‘‘(A) a volunteer or volunteer leader under the Peace Corps

Act (22 U.S.C. 2501 et seq.),

‘‘(B) a volunteer under part A of title VIII of the Economic

Opportunity Act of 1964, or

‘‘(C) a full-time volunteer for a period of service of at

least 1 year’s duration under part A, B, or C of title I of

the Domestic Volunteer Service Act of 1973 (42 U.S.C. 4951

et seq.),

if the participant makes a payment to the Fund equal to 3 percent

of pay received for the volunteer service; except, the amount to

be paid for volunteer service beginning on January 1, 1999, through

December 31, 2002, shall be as follows:
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‘‘3.25 ...... January 1, 1999, to December 31,

1999.

3.4 ....... January 1, 2000, to December 31,

2000.

3.5 ....... January 1, 2001, to December 31,

2002.

‘‘(2) The amount of such payments shall be determined in

accordance with regulations of the Secretary of State consistent

with regulations for making corresponding determinations under

chapter 83, title 5, United States Code, together with interest

determined under regulations issued by the Secretary of State.’’.

(2) NO REDUCTION IN AGENCY CONTRIBUTIONS.—Agency contributions under section 857 of the Foreign Service Act of

1980 (22 U.S.C. 4071f) shall not be reduced as a result of

the amendments made under paragraph (1) of this subsection.

(f) EFFECTIVE DATE.— (1) IN GENERAL.—This section shall take effect on—

(A) October 1, 1997; or

(B) if later, the date of enactment of this Act.

(2) SPECIAL RULE.—If the date of enactment of this Act

is later than October 1, 1997, then any reference to October

1, 1997, in subsection (a)(1), (c)(1), or (d)(1) shall be treated

as a reference to the date of enactment of this Act.

SEC. 7002. GOVERNMENT CONTRIBUTIONS UNDER THE FEDERAL

EMPLOYEES HEALTH BENEFITS PROGRAM.

(a) IN GENERAL.—Section 8906 of title 5, United States Code,

is amended by striking subsection (a) and all that follows through

the end of paragraph (1) of subsection (b) and inserting the following:

‘‘(a)(1) Not later than October 1 of each year, the Office of

Personnel Management shall determine the weighted average of

the subscription charges that will be in effect during the following

contract year with respect to—

‘‘(A) enrollments under this chapter for self alone; and

‘‘(B) enrollments under this chapter for self and family.

‘‘(2) In determining each weighted average under paragraph

(1), the weight to be given to a particular subscription charge

shall, with respect to each plan (and option) to which it is to

apply, be commensurate with the number of enrollees enrolled

in such plan (and option) as of March 31 of the year in which

the determination is being made.

‘‘(3) For purposes of paragraph (2), the term ‘enrollee’ means

any individual who, during the contract year for which the weighted

average is to be used under this section, will be eligible for a

Government contribution for health benefits.

‘‘(b)(1) Except as provided in paragraphs (2) and (3), the

biweekly Government contribution for health benefits for an

employee or annuitant enrolled in a health benefits plan under

this chapter is adjusted to an amount equal to 72 percent of the

weighted average under subsection (a)(1) (A) or (B), as applicable.

For an employee, the adjustment begins on the first day of the

employee’s first pay period of each year. For an annuitant, the

adjustment begins on the first day of the first period of each

year for which an annuity payment is made.’’.

(b) EFFECTIVE DATE.—This section shall take effect on the

first day of the contract year that begins in 1999. Nothing in

this subsection shall prevent the Office of Personnel Management
H. R. 2015—413

from taking any action, before such first day, which it considers

necessary in order to ensure the timely implementation of this

section.

SEC. 7003. REPEAL OF AUTHORIZATION OF TRANSITIONAL APPROPRIATIONS FOR THE UNITED STATES POSTAL SERVICE.

(a) REPEAL.—

(1) IN GENERAL.—Section 2004 of title 39, United States

Code, is repealed.

(2) TECHNICAL AND CONFORMING AMENDMENTS.—

(A) The table of sections for chapter 20 of such title

is amended by repealing the item relating to section 2004.

(B) Section 2003(e)(2) of such title is amended by striking ‘‘sections 2401 and 2004’’ each place it appears and

inserting ‘‘section 2401’’.

(b) CLARIFICATION THAT LIABILITIES FORMERLY PAID PURSUANT

TO SECTION 2004 REMAIN LIABILITIES PAYABLE BY THE POSTAL

SERVICE.—Section 2003 of title 39, United States Code, is amended

by adding at the end the following:

‘‘(h) Liabilities of the former Post Office Department to the

Employees’ Compensation Fund (appropriations for which were

authorized by former section 2004, as in effect before the effective

date of this subsection) shall be liabilities of the Postal Service

payable out of the Fund.’’.

(c) EFFECTIVE DATE.—

(1) IN GENERAL.—This section and the amendments made

by this section shall take effect on the date of the enactment

of this Act or October 1, 1997, whichever is later.

(2) PROVISIONS RELATING TO PAYMENTS FOR FISCAL YEAR

1998.—

(A) AMOUNTS NOT YET PAID.—No payment may be made

to the Postal Service Fund, on or after the date of the

enactment of this Act, pursuant to any appropriation for

fiscal year 1998 authorized by section 2004 of title 39,

United States Code (as in effect before the effective date

of this section).

(B) AMOUNTS PAID.—If any payment to the Postal Service Fund is or has been made pursuant to an appropriation

for fiscal year 1998 authorized by such section 2004, then,

an amount equal to the amount of such payment shall

be paid from such Fund into the Treasury as miscellaneous

receipts before October 1, 1998.

TITLE VIII—VETERANS AND RELATED

MATTERS

SEC. 8001. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE.—This title may be cited as the ‘‘Veterans

Reconciliation Act of 1997’’.

(b) TABLE OF CONTENTS.—The table of contents for this title

is as follows:

Sec. 8001. Short title; table of contents.

Subtitle A—Extension of Temporary Authorities

Sec. 8011. Enhanced loan asset sale authority.

Sec. 8012. Home loan fees.
H. R. 2015—414

Sec. 8013. Procedures applicable to liquidation sales on defaulted home loans guaranteed by the Department of Veterans Affairs. Sec. 8014. Income verification authority.

Sec. 8015. Limitation on pension for certain recipients of medicaid-covered nursing

home care.

Subtitle B—Copayments and Medical Care Cost Recovery

Sec. 8021. Authority to require that certain veterans make copayments in exchange

for receiving health care benefits. Sec. 8022. Medical care cost recovery authority.

Sec. 8023. Department of Veterans Affairs medical-care receipts.

Subtitle C—Other Matters

Sec. 8031. Rounding down of cost-of-living adjustments in compensation and DIC

rates for fiscal years 1998 through 2002. Sec. 8032. Increase in amount of home loan fees for the purchase of repossessed

homes from the Department of Veterans Affairs. Sec. 8033. Withholding of payments and benefits.

Subtitle A—Extension of Temporary

Authorities

SEC. 8011. ENHANCED LOAN ASSET SALE AUTHORITY.

Section 3720(h)(2) of title 38, United States Code, is amended

by striking out ‘‘December 31, 1997’’ and inserting in lieu thereof

‘‘December 31, 2002’’.

SEC. 8012. HOME LOAN FEES.

Section 3729(a) of title 38, United States Code, is amended—

(1) in paragraph (4), by striking out ‘‘October 1, 1998’’

and inserting in lieu thereof ‘‘October 1, 2002’’; and

(2) in paragraph (5)(C), by striking out ‘‘October 1, 1998’’

and inserting in lieu thereof ‘‘October 1, 2002’’.

SEC. 8013. PROCEDURES APPLICABLE TO LIQUIDATION SALES ON

DEFAULTED HOME LOANS GUARANTEED BY THE

DEPARTMENT OF VETERANS AFFAIRS.

Section 3732(c)(11) of title 38, United States Code, is amended

by striking out ‘‘October 1, 1998’’ and inserting in lieu thereof

‘‘October 1, 2002’’.

SEC. 8014. INCOME VERIFICATION AUTHORITY.

Section 5317(g) of title 38, United States Code, is amended

by striking out ‘‘September 30, 1998’’ and inserting in lieu thereof

‘‘September 30, 2002’’.

SEC. 8015. LIMITATION ON PENSION FOR CERTAIN RECIPIENTS OF

MEDICAID-COVERED NURSING HOME CARE.

Section 5503(f)(7) of title 38, United States Code, is amended

by striking out ‘‘September 30, 1998’’ and inserting in lieu thereof

‘‘September 30, 2002’’.

Subtitle B—Copayments and Medical Care

Cost Recovery

SEC. 8021. AUTHORITY TO REQUIRE THAT CERTAIN VETERANS MAKE

COPAYMENTS IN EXCHANGE FOR RECEIVING HEALTH

CARE BENEFITS.

(a) HOSPITAL AND MEDICAL CARE.—
H. R. 2015—415

(1) EXTENSION.—Section 1710(f)(2)(B) of title 38, United

States Code, is amended by inserting ‘‘before September 30,

2002,’’ after ‘‘(B)’’.

(2) REPEAL OF SUPERSEDED PROVISION.—Section 8013(e) of

the Omnibus Budget Reconciliation Act of 1990 (38 U.S.C.

1710 note) is repealed.

(b) OUTPATIENT MEDICATIONS.—Section 1722A(c) of title 38,

United States Code, is amended by striking out ‘‘September 30,

1998’’ and inserting in lieu thereof ‘‘September 30, 2002’’.

SEC. 8022. MEDICAL CARE COST RECOVERY AUTHORITY.

Section 1729(a)(2)(E) of title 38, United States Code, is amended

by striking out ‘‘October 1, 1998’’ and inserting in lieu thereof

‘‘October 1, 2002’’.

SEC. 8023. DEPARTMENT OF VETERANS AFFAIRS MEDICAL-CARE

RECEIPTS.

(a) ALLOCATION OF RECEIPTS.—(1) Chapter 17 of title 38, United

States Code, is amended by inserting after section 1729 the following new section:

‘‘§ 1729A. Department of Veterans Affairs Medical Care

Collections Fund

‘‘(a) There is in the Treasury a fund to be known as the

Department of Veterans Affairs Medical Care Collections Fund.

‘‘(b) Amounts recovered or collected after June 30, 1997, under

any of the following provisions of law shall be deposited in the

fund:

‘‘(1) Section 1710(f) of this title.

‘‘(2) Section 1710(g) of this title.

‘‘(3) Section 1711 of this title.

‘‘(4) Section 1722A of this title.

‘‘(5) Section 1729 of this title.

‘‘(6) Public Law 87–693, popularly known as the ‘Federal

Medical Care Recovery Act’ (42 U.S.C. 2651 et seq.), to the

extent that a recovery or collection under that law is based

on medical care or services furnished under this chapter.

‘‘(c)(1) Subject to the provisions of appropriations Acts, amounts

in the fund shall be available, without fiscal year limitation, to

the Secretary for the following purposes:

‘‘(A) Furnishing medical care and services under this chapter, to be available during any fiscal year for the same purposes

and subject to the same limitations (other than with respect

to the period of availability for obligation) as apply to amounts

appropriated from the general fund of the Treasury for that

fiscal year for medical care.

‘‘(B) Expenses of the Department for the identification,

billing, auditing, and collection of amounts owed the United

States by reason of medical care and services furnished under

this chapter.

‘‘(2) Amounts available under paragraph (1) may not be used

for any purpose other than a purpose set forth in subparagraph

(A) or (B) of that paragraph.

‘‘(3)(A) If for fiscal year 1998 the Secretary determines that

the total amount to be recovered under the provisions of law specified in subsection (b) will be less than the amount contained in

the latest Congressional Budget Office baseline estimate (computed

under section 257 of the Balanced Budget and Emergency Deficit
H. R. 2015—416

Control Act of 1985) for the amount of such recoveries for fiscal

year 1998 by at least $25,000,000, the Secretary shall promptly

certify to the Secretary of the Treasury the amount of the shortfall

(as estimated by the Secretary) that is in excess of $25,000,000.

Upon receipt of such a certification, the Secretary of the Treasury

shall, not later than 30 days after receiving the certification, deposit

in the fund, from any unobligated amounts in the Treasury, an

amount equal to the amount certified by the Secretary.

‘‘(B) If for fiscal year 1998 a deposit is made under subparagraph (A) and the Secretary subsequently determines that the

actual amount recovered for that fiscal year under the provisions

of law specified in subsection (b) is greater than the amount estimated by the Secretary that was used for purposes of the certification by the Secretary under subparagraph (A), the Secretary

shall pay into the general fund of the Treasury, from amounts

available for medical care, an amount equal to the difference

between the amount actually recovered and the amount so estimated (but not in excess of the amount of the deposit under subparagraph (A) pursuant to such certification).

‘‘(C) If for fiscal year 1998 a deposit is made under subparagraph (A) and the Secretary subsequently determines that the

actual amount recovered for that fiscal year under the provisions

of law specified in subsection (b) is less than the amount estimated

by the Secretary that was used for purposes of the certification

by the Secretary under subparagraph (A), the Secretary shall

promptly certify to the Secretary of the Treasury the amount of

the shortfall. Upon receipt of such a certification, the Secretary

of the Treasury shall, not later than 30 days after receiving the

certification, deposit in the fund, from any unobligated amounts

in the Treasury, an amount equal to the amount certified by the

Secretary.

‘‘(d)(1) Of the total amount recovered or collected by the Department during a fiscal year under the provisions of law referred

to in subsection (b) and made available from the fund, the Secretary

shall make available to each designated health care region of the

Department an amount that bears the same ratio to the total

amount so made available as the amount recovered or collected

by such region during that fiscal year under such provisions of

law bears to such total amount recovered or collected during that

fiscal year. The Secretary shall make available to each region

the entirety of the amount specified to be made available to such

region by the preceding sentence.

‘‘(2) In this subsection, the term ‘designated health care regions

of the Department’ means the geographic areas designated by the

Secretary for purposes of the management of, and allocation of

resources for, health care services provided by the Department.

‘‘(e)(1) The Secretary shall submit to the Committees on Veterans’ Affairs of the Senate and House of Representatives quarterly

reports on the operation of this section for fiscal years 1998, 1999,

and 2000 and for the first quarter of fiscal year 2001. Each such

report shall specify the amount collected under each of the provisions specified in subsection (b) during the preceding quarter and

the amount originally estimated to be collected under each such

provision during such quarter.

‘‘(2) A report under paragraph (1) for a quarter shall be submitted not later than 45 days after the end of that quarter.
H. R. 2015—417

‘‘(f) Amounts recovered or collected under the provisions of

law referred to in subsection (b) shall be treated for the purposes

of sections 251 and 252 of the Balanced Budget and Emergency

Deficit Control Act of 1985 (2 U.S.C. 901, 902) as offsets to discretionary appropriations (rather than as offsets to direct spending)

to the extent that such amounts are made available for expenditure

in appropriations Acts for the purposes specified in subsection (c).’’.

(2) The table of sections at the beginning of such chapter

is amended by inserting after the item relating to section 1729

the following new item:

‘‘1729A. Department of Veterans Affairs Medical Care Collections Fund.’’.

(b) CONFORMING AMENDMENTS.—Chapter 17 of such title is

amended as follows:

(1) Section 1710(f) is amended by striking out paragraph

(4) and redesignating paragraph (5) as paragraph (4).

(2) Section 1710(g) is amended by striking out paragraph

(4).

(3) Section 1722A(b) is amended by striking out ‘‘Department of Veterans Affairs Medical-Care Cost Recovery Fund’’

and inserting in lieu thereof ‘‘Department of Veterans Affairs

Medical Care Collections Fund’’.

(4) Section 1729 is amended by striking out subsection

(g).

(c) DISPOSITION OF FUNDS IN MEDICAL-CARE COST RECOVERY

FUND.—The amount of the unobligated balance remaining in the

Department of Veterans Affairs Medical-Care Cost Recovery Fund

(established pursuant to section 1729(g)(1) of title 38, United States

Code) at the close of June 30, 1997, shall be deposited, not later

than December 31, 1997, in the Treasury as miscellaneous receipts,

and the Department of Veterans Affairs Medical-Care Cost Recovery

Fund shall be terminated when the deposit is made.

(d) DETERMINATION OF AMOUNTS SUBJECT TO RECOVERY.—Section 1729 of title 38, United States Code, is amended—

(1) in subsection (a)(1), by striking out ‘‘the reasonable

cost of’’ and inserting in lieu thereof ‘‘reasonable charges for’’;

and

(2) in subsection (c)(2)—

(A) by striking out ‘‘the reasonable cost of’’ in the

first sentence of subparagraph (A) and in subparagraph

(B) and inserting in lieu thereof ‘‘reasonable charges for’’;

and

(B) by striking out ‘‘cost’’ in the second sentence of

subparagraph (A) and inserting in lieu thereof ‘‘charges’’.

(e) TECHNICAL AMENDMENT.—Paragraph (2) of section 712(b)

of title 38, United States Code, is amended—

(1) by striking out subparagraph (B); and

(2) by redesignating subparagraph (C) as subparagraph

(B).

(f) IMPLEMENTATION.—Not later than January 1, 1999, the Secretary of Veterans Affairs shall submit to the Committees on Veterans’ Affairs of the Senate and House of Representatives a report

on the implementation of this section. The report shall describe

the collections under each of the provisions specified in section

1729A(b) of title 38, United States Code, as added by subsection

(a). Information on such collections shall be shown for each of

the health service networks (known as Veterans Integrated Service

Networks) and, to the extent practicable for each facility within
H. R. 2015—418

each such network. The Secretary shall include in the report an

analysis of differences among the networks with respect to (A)

the market in which the networks operates, (B) the effort expended

to achieve collections, (C) the efficiency of such effort, and (D)

any other relevant information.

(g) EFFECTIVE DATE.—(1) Except as provided in paragraph (2),

this section and the amendments made by this section shall take

effect on October 1, 1997.

(2) The amendments made by subsection (d) shall take effect

on the date of the enactment of this Act.

Subtitle C—Other Matters

SEC. 8031. ROUNDING DOWN OF COST-OF-LIVING ADJUSTMENTS IN

COMPENSATION AND DIC RATES FOR FISCAL YEARS 1998

THROUGH 2002.

(a) COMPENSATION COLAS.—(1) Chapter 11 of title 38, United

States Code, is amended by inserting after section 1102 the following new section:

‘‘§ 1103. Cost-of-living adjustments

‘‘(a) In the computation of cost-of-living adjustments for fiscal

years 1998 through 2002 in the rates of, and dollar limitations

applicable to, compensation payable under this chapter, such adjustments shall be made by a uniform percentage that is no more

than the percentage equal to the social security increase for that

fiscal year, with all increased monthly rates and limitations (other

than increased rates or limitations equal to a whole dollar amount)

rounded down to the next lower whole dollar amount.

‘‘(b) For purposes of this section, the term ‘social security

increase’ means the percentage by which benefit amounts payable

under title II of the Social Security Act (42 U.S.C. 401 et seq.)

are increased for any fiscal year as a result of a determination

under section 215(i) of such Act (42 U.S.C. 415(i)).’’.

(2) The table of sections at the beginning of such chapter

is amended by inserting after the item relating to section 1102

the following new item:

‘‘1103. Cost-of-living adjustments.’’.

(b) DIC COLAS.—(1) Chapter 13 of title 38, United States

Code, is amended by inserting after section 1302 the following

new section:

‘‘§ 1303. Cost-of-living adjustments

‘‘(a) In the computation of cost-of-living adjustments for fiscal

years 1998 through 2002 in the rates of dependency and indemnity

compensation payable under this chapter, such adjustments (except

as provided in subsection (b)) shall be made by a uniform percentage

that is no more than the percentage equal to the social security

increase for that fiscal year, with all increased monthly rates (other

than increased rates equal to a whole dollar amount) rounded

down to the next lower whole dollar amount.

‘‘(b) For purposes of this section, the term ‘social security

increase’ means the percentage by which benefit amounts payable

under title II of the Social Security Act (42 U.S.C. 401 et seq.)

are increased for any fiscal year as a result of a determination

under section 215(i) of such Act (42 U.S.C. 415(i)).’’.
H. R. 2015—419

(2) The table of sections at the beginning of such chapter

is amended by inserting after the item relating to section 1302

the following new item:

‘‘1303. Cost-of-living adjustments.’’.

SEC. 8032. INCREASE IN AMOUNT OF HOME LOAN FEES FOR THE PURCHASE OF REPOSSESSED HOMES FROM THE DEPARTMENT OF VETERANS AFFAIRS.

Section 3729(a) of title 38, United States Code, is amended—

(1) in paragraph (2)—

(A) in subparagraph (A), by striking out ‘‘or 3733(a)’’;

(B) in subparagraph (D), by striking out ‘‘and’’ at the

end;

(C) in subparagraph (E), by striking out the period

at the end and inserting in lieu thereof ‘‘; and’’; and

(D) by adding at the end the following:

‘‘(F) in the case of a loan made under section 3733(a)

of this title, the amount of such fee shall be 2.25 percent

of the total loan amount.’’; and

(2) in paragraph (4), as amended by section 8012(1) of

this Act, by striking out ‘‘or (E)’’ and inserting in lieu thereof

‘‘(E), or (F)’’.

SEC. 8033. WITHHOLDING OF PAYMENTS AND BENEFITS.

(a) NOTICE REQUIRED IN LIEU OF CONSENT OR COURT ORDER.—

Section 3726 of title 38, United States Code, is amended—

(1) by inserting ‘‘(a)’’ before ‘‘No officer’’; and

(2) by striking out ‘‘unless’’ and all that follows and inserting in lieu thereof the following: ‘‘unless the Secretary provides

such veteran or surviving spouse with notice by certified mail

with return receipt requested of the authority of the Secretary

to waive the payment of indebtedness under section 5302(b)

of this title.’’; and

(3) by adding at the end the following new subsections:

‘‘(b) If the Secretary does not waive the entire amount of the

liability, the Secretary shall then determine whether the veteran

or surviving spouse should be released from liability under section

3713(b) of this title.

‘‘(c) If the Secretary determines that the veteran or surviving

spouse should not be released from liability, the Secretary shall

notify the veteran or surviving spouse of that determination and

provide a notice of the procedure for appealing that determination,

unless the Secretary has previously made such determination and

notified the veteran or surviving spouse of the procedure for appealing the determination.’’.

(b) CONFORMING AMENDMENT.—Section 5302(b) of such title

is amended by inserting ‘‘with return receipt requested’’ after ‘‘certified mail’’.

(c) EFFECTIVE DATE.—The amendments made by this section

shall apply with respect to any indebtedness to the United States

arising pursuant to chapter 37 of title 38, United States Code,

before, on, or after the date of enactment of this Act.
H. R. 2015—420

TITLE IX—ASSET SALES, USER FEES,

AND MISCELLANEOUS PROVISIONS

SEC. 9000. TABLE OF CONTENTS.

The table of contents for this title is as follows:

TITLE IX—ASSET SALES, USER FEES, AND MISCELLANEOUS PROVISIONS

Sec. 9000. Table of contents.

Subtitle A—Asset Sales

Sec. 9101. Sale of Governors Island, New York.

Sec. 9102. Sale of air rights.

Subtitle B—User Fees

Sec. 9201. Extension of higher vessel tonnage duties.

Subtitle C—Miscellaneous Provisions

Sec. 9301. Temporary Federal share formula adjustment.

Sec. 9302. Increase in excise taxes on tobacco products.

Sec. 9303. Lease of excess strategic petroleum reserve capacity.

Sec. 9304. Identification of limited tax benefits subject to line item veto.

Sec. 9305. Payment of benefits in appropriate fiscal year.

Subtitle A— Asset Sales

SEC. 9101. SALE OF GOVERNORS ISLAND, NEW YORK.

(a) IN GENERAL.—Notwithstanding any other provision of law,

the Administrator of General Services shall, no earlier than fiscal

year 2002, dispose of by sale at fair market value all rights, title,

and interests of the United States in and to the land of, and

improvements to, Governors Island, New York.

(b) RIGHT OF FIRST OFFER.—Before a sale is made under subsection (a) to any other parties, the State of New York and the

city of New York shall be given the right of first offer to purchase

all or part of Governors Island at fair market value as determined

by the Administrator of General Services. Not later than 90 days

after notification by the Administrator of General Services, such

right may be exercised by either the State of New York or the

city of New York or by both parties acting jointly.

(c) PROCEEDS.—Proceeds from the disposal of Governors Island

under subsection (a) shall be deposited in the general fund of

the Treasury and credited as miscellaneous receipts.

SEC. 9102. SALE OF AIR RIGHTS.

(a) IN GENERAL.—Notwithstanding any other provision of law,

the Administrator of General Services shall sell, at fair market

value and in a manner to be determined by the Administrator,

the air rights adjacent to Washington Union Station described

in subsection (b), including air rights conveyed to the Administrator

under subsection (d). The Administrator shall complete the sale

by such date as is necessary to ensure that the proceeds from

the sale will be deposited in accordance with subsection (c).

(b) DESCRIPTION.—The air rights referred to in subsection (a)

total approximately 16.5 acres and are depicted on the plat map

of the District of Columbia as follows:

(1) Part of lot 172, square 720.

(2) Part of lots 172 and 823, square 720.
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(3) Part of lot 811, square 717.

(c) PROCEEDS.—Before September 30, 2002, proceeds from the

sale of air rights under subsection (a) shall be deposited in the

general fund of the Treasury and credited as miscellaneous receipts.

(d) CONVEYANCE OF AMTRAK AIR RIGHTS.— (1) GENERAL RULE.—As a condition of future Federal financial assistance, Amtrak shall convey to the Administrator of

General Services on or before December 31, 1997, at no charge,

all of the air rights of Amtrak described in subsection (b).

(2) FAILURE TO COMPLY.—If Amtrak does not meet the

condition established by paragraph (1), Amtrak shall be prohibited from obligating Federal funds after March 1, 1998.

Subtitle B—User Fees

SEC. 9201. EXTENSION OF HIGHER VESSEL TONNAGE DUTIES.

(a) EXTENSION OF DUTIES.—Section 36 of the Act of August

5, 1909 (36 Stat. 111; 46 U.S.C. App. 121) is amended by striking

‘‘for fiscal years 1991, 1992, 1993, 1994, 1995, 1996, 1997, 1998,’’

each place it appears and inserting ‘‘for fiscal years 1991 through

2002,’’.

(b) CONFORMING AMENDMENT.—The Act entitled ‘‘An Act

concerning tonnage duties on vessels entering otherwise than by

sea’’, approved March 8, 1910 (36 Stat. 234; 46 U.S.C. App. 132)

is amended by striking ‘‘for fiscal years 1991, 1991, 1992, 1993,

1994, 1995, 1996, 1997, 1998,’’ and inserting ‘‘for fiscal years 1991

through 2002,’’.

Subtitle C—Miscellaneous Provisions

SEC. 9301. TEMPORARY FEDERAL SHARE FORMULA ADJUSTMENT.

The Federal share of the cost of assistance provided under

the Robert T. Stafford Disaster Relief and Emergency Assistance

Act (42 U.S.C. 5121 et seq.) for damages suffered in Kittson, Marshall, Polk, Norman, Clay, and Wilkin Counties, Minnesota, as

a result of the 1997 floods in the Red River Valley in Minnesota

and North Dakota shall be at least 90 percent.

SEC. 9302. INCREASE IN EXCISE TAXES ON TOBACCO PRODUCTS.

(a) CIGARETTES.—Subsection (b) of section 5701 of the Internal

Revenue Code of 1986 is amended—

(1) by striking ‘‘$12 per thousand ($10 per thousand on

cigarettes removed during 1991 or 1992)’’ in paragraph (1)

and inserting ‘‘$19.50 per thousand ($17 per thousand on cigarettes removed during 2000 or 2001)’’, and (2) by striking ‘‘$25.20 per thousand ($21 per thousand

on cigarettes removed during 1991 or 1992)’’ in paragraph

(2) and inserting ‘‘$40.95 per thousand ($35.70 per thousand

on cigarettes removed during 2000 or 2001)’’.

(b) CIGARS.—Subsection (a) of section 5701 of such Code is

amended—

(1) by striking ‘‘$1.125 cents per thousand (93.75 cents

per thousand on cigars removed during 1991 or 1992)’’ in paragraph (1) and inserting ‘‘$1.828 cents per thousand ($1.594

cents per thousand on cigars removed during 2000 or 2001)’’,

and
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(2) by striking ‘‘equal to’’ and all that follows in paragraph

(2) and inserting ‘‘equal to 20.719 percent (18.063 percent on

cigars removed during 2000 or 2001) of the price for which

sold but not more than $48.75 per thousand ($42.50 per thousand on cigars removed during 2000 or 2001).’’.

(c) CIGARETTE PAPERS.—Subsection (c) of section 5701 of such

Code is amended by striking ‘‘0.75 cent (0.625 cent on cigarette

papers removed during 1991 or 1992)’’ and inserting ‘‘1.22 cents

(1.06 cents on cigarette papers removed during 2000 or 2001)’’.

(d) CIGARETTE TUBES.—Subsection (d) of section 5701 of such

Code is amended by striking ‘‘1.5 cents (1.25 cents on cigarette

tubes removed during 1991 or 1992)’’ and inserting ‘‘2.44 cents

(2.13 cents on cigarette tubes removed during 2000 or 2001)’’.

(e) SMOKELESS TOBACCO.—Subsection (e) of section 5701 of

such Code is amended—

(1) by striking ‘‘36 cents (30 cents on snuff removed during

1991 or 1992)’’ in paragraph (1) and inserting ‘‘58.5 cents (51

cents on snuff removed during 2000 or 2001)’’, and

(2) by striking ‘‘12 cents (10 cents on chewing tobacco

removed during 1991 or 1992)’’ in paragraph (2) and inserting

‘‘19.5 cents (17 cents on chewing tobacco removed during 2000

or 2001)’’.

(f) PIPE TOBACCO.—Subsection (f) of section 5701 of such Code

is amended by striking ‘‘67.5 cents (56.25 cents on pipe tobacco

removed during 1991 or 1992)’’ and inserting ‘‘$1.0969 cents (95.67

cents on pipe tobacco removed during 2000 or 2001)’’.

(g) IMPOSITION OF EXCISE TAX ON MANUFACTURE OR IMPORTATION OF ROLL-YOUR-OWN TOBACCO.—

(1) IN GENERAL.—Section 5701 of such Code (relating to

rate of tax) is amended by redesignating subsection (g) as

subsection (h) and by inserting after subsection (f) the following

new subsection:

‘‘(g) ROLL-YOUR-OWN TOBACCO.—On roll-your-own tobacco,

manufactured in or imported into the United States, there shall

be imposed a tax of $1.0969 cents (95.67 cents on roll-your-own

tobacco removed during 2000 or 2001) per pound (and a proportionate tax at the like rate on all fractional parts of a pound).’’.

(2) ROLL-YOUR-OWN TOBACCO.—Section 5702 of such Code

(relating to definitions) is amended by adding at the end the

following new subsection:

‘‘(p) ROLL-YOUR-OWN TOBACCO.—The term ‘roll-your-own

tobacco’ means any tobacco which, because of its appearance, type,

packaging, or labeling, is suitable for use and likely to be offered

to, or purchased by, consumers as tobacco for making cigarettes.’’.

(3) TECHNICAL AMENDMENTS.—

(A) Subsection (c) of section 5702 of such Code is

amended by striking ‘‘and pipe tobacco’’ and inserting ‘‘pipe

tobacco, and roll-your-own tobacco’’.

(B) Subsection (d) of section 5702 of such Code is

amended—

(i) in the material preceding paragraph (1), by

striking ‘‘or pipe tobacco’’ and inserting ‘‘pipe tobacco,

or roll-your-own tobacco’’, and

(ii) by striking paragraph (1) and inserting the

following new paragraph:
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‘‘(1) a person who produces cigars, cigarettes, smokeless

tobacco, pipe tobacco, or roll-your-own tobacco solely for the

person’s own personal consumption or use, and’’.

(C) The chapter heading for chapter 52 of such Code

is amended to read as follows:

‘‘CHAPTER 52—TOBACCO PRODUCTS AND CIGARETTE

PAPERS AND TUBES’’.

(D) The table of chapters for subtitle E of such Code

is amended by striking the item relating to chapter 52

and inserting the following new item:

‘‘CHAPTER 52. Tobacco products and cigarette papers and tubes.’’.

(h) MODIFICATIONS OF CERTAIN TOBACCO TAX PROVISIONS.—

(1) EXEMPTION FOR EXPORTED TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES TO APPLY ONLY TO ARTICLES MARKED

FOR EXPORT.—

(A) Subsection (b) of section 5704 of such Code is

amended by adding at the end the following new sentence:

‘‘Tobacco products and cigarette papers and tubes may

not be transferred or removed under this subsection unless

such products or papers and tubes bear such marks, labels,

or notices as the Secretary shall by regulations prescribe.’’.

(B) Section 5761 of such Code is amended by

redesignating subsections (c) and (d) as subsections (d)

and (e), respectively, and by inserting after subsection (b)

the following new subsection:

‘‘(c) SALE OF TOBACCO PRODUCTS AND CIGARETTE PAPERS AND

TUBES FOR EXPORT.—Except as provided in subsections (b) and

(d) of section 5704—

‘‘(1) every person who sells, relands, or receives within

the jurisdiction of the United States any tobacco products or

cigarette papers or tubes which have been labeled or shipped

for exportation under this chapter,

‘‘(2) every person who sells or receives such relanded

tobacco products or cigarette papers or tubes, and

‘‘(3) every person who aids or abets in such selling, relanding, or receiving,

shall, in addition to the tax and any other penalty provided in

this title, be liable for a penalty equal to the greater of $1,000

or 5 times the amount of the tax imposed by this chapter. All

tobacco products and cigarette papers and tubes relanded within

the jurisdiction of the United States, and all vessels, vehicles,

and aircraft used in such relanding or in removing such products,

papers, and tubes from the place where relanded, shall be forfeited

to the United States.’’.

(C) Subsection (a) of section 5761 of such Code is

amended by striking ‘‘subsection (b)’’ and inserting ‘‘subsection (b) or (c)’’.

(D) Subsection (d) of section 5761 of such Code, as

redesignated by subparagraph (B), is amended by striking

‘‘The penalty imposed by subsection (b)’’ and inserting ‘‘The

penalties imposed by subsections (b) and (c)’’.

(E)(i) Subpart F of chapter 52 of such Code is amended

by adding at the end the following new section:
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‘‘SEC. 5754. RESTRICTION ON IMPORTATION OF PREVIOUSLY

EXPORTED TOBACCO PRODUCTS.

‘‘(a) IN GENERAL.—Tobacco products and cigarette papers and

tubes previously exported from the United States may be imported

or brought into the United States only as provided in section

5704(d). For purposes of this section, section 5704(d), section 5761,

and such other provisions as the Secretary may specify by regulations, references to exportation shall be treated as including a

reference to shipment to the Commonwealth of Puerto Rico.

‘‘(b) CROSS REFERENCE.—

‘‘For penalty for the sale of tobacco products and cigarette papers

and tubes in the United States which are labeled for export, see section 5761(c).’’.

(ii) The table of sections for subpart F of chapter 52

of such Code is amended by adding at the end the following

new item:

‘‘Sec. 5754. Restriction on importation of previously exported tobacco products.’’.

(2) IMPORTERS REQUIRED TO BE QUALIFIED.—

(A) Sections 5712, 5713(a), 5721, 5722, 5762(a)(1), and

5763 (b) and (c) of such Code are each amended by inserting

‘‘or importer’’ after ‘‘manufacturer’’.

(B) The heading of subsection (b) of section 5763 of

such Code is amended by inserting ‘‘QUALIFIED IMPORTERS,’’

after ‘‘MANUFACTURERS,’’.

(C) The heading for subchapter B of chapter 52 of

such Code is amended by inserting ‘‘and Importers’’ after ‘‘Manufacturers’’.

(D) The item relating to subchapter B in the table

of subchapters for chapter 52 of such Code is amended

by inserting ‘‘and importers’’ after ‘‘manufacturers’’.

(3) BOOKS OF 25 OR FEWER CIGARETTE PAPERS SUBJECT

TO TAX.—Subsection (c) of section 5701 of such Code is amended

by striking ‘‘On each book or set of cigarette papers containing

more than 25 papers,’’ and inserting ‘‘On cigarette papers,’’.

(4) STORAGE OF TOBACCO PRODUCTS.—Subsection (k) of section 5702 of such Code is amended by inserting ‘‘under section

5704’’ after ‘‘internal revenue bond’’.

(5) AUTHORITY TO PRESCRIBE MINIMUM MANUFACTURING

ACTIVITY REQUIREMENTS.—Section 5712 of such Code is amended by striking ‘‘or’’ at the end of paragraph (1), by redesignating

paragraph (2) as paragraph (3), and by inserting after paragraph (1) the following new paragraph:

‘‘(2) the activity proposed to be carried out at such premises

does not meet such minimum capacity or activity requirements

as the Secretary may prescribe, or’’.

(i) EFFECTIVE DATE.—

(1) IN GENERAL.—The amendments made by this section

shall apply to articles removed (as defined in section 5702(k)

of the Internal Revenue Code of 1986, as amended by this

section) after December 31, 1999.

(2) TRANSITIONAL RULE.—Any person who—

(A) on the date of the enactment of this Act is engaged

in business as a manufacturer of roll-your-own tobacco

or as an importer of tobacco products or cigarette papers

and tubes, and
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(B) before January 1, 2000, submits an application

under subchapter B of chapter 52 of such Code to engage

in such business,

may, notwithstanding such subchapter B, continue to engage

in such business pending final action on such application. Pending such final action, all provisions of such chapter 52 shall

apply to such applicant in the same manner and to the same

extent as if such applicant were a holder of a permit under

such chapter 52 to engage in such business.

(j) FLOOR STOCKS TAXES.—

(1) IMPOSITION OF TAX.—On tobacco products and cigarette

papers and tubes manufactured in or imported into the United

States which are removed before any tax increase date, and

held on such date for sale by any person, there is hereby

imposed a tax in an amount equal to the excess of—

(A) the tax which would be imposed under section

5701 of the Internal Revenue Code of 1986 on the article

if the article had been removed on such date, over

(B) the prior tax (if any) imposed under section 5701

of such Code on such article.

(2) AUTHORITY TO EXEMPT CIGARETTES HELD IN VENDING

MACHINES.—To the extent provided in regulations prescribed

by the Secretary, no tax shall be imposed by paragraph (1)

on cigarettes held for retail sale on any tax increase date,

by any person in any vending machine. If the Secretary provides

such a benefit with respect to any person, the Secretary may

reduce the $500 amount in paragraph (3) with respect to such

person.

(3) CREDIT AGAINST TAX.—Each person shall be allowed

as a credit against the taxes imposed by paragraph (1) an

amount equal to $500. Such credit shall not exceed the amount

of taxes imposed by paragraph (1) on any tax increase date,

for which such person is liable.

(4) LIABILITY FOR TAX AND METHOD OF PAYMENT.—

(A) LIABILITY FOR TAX.—A person holding cigarettes

on any tax increase date, to which any tax imposed by

paragraph (1) applies shall be liable for such tax.

(B) METHOD OF PAYMENT.—The tax imposed by paragraph (1) shall be paid in such manner as the Secretary

shall prescribe by regulations.

(C) TIME FOR PAYMENT.—The tax imposed by paragraph (1) shall be paid on or before April 1 following

any tax increase date.

(5) ARTICLES IN FOREIGN TRADE ZONES.—Notwithstanding

the Act of June 18, 1934 (48 Stat. 998, 19 U.S.C. 81a) and

any other provision of law, any article which is located in

a foreign trade zone on any tax increase date, shall be subject

to the tax imposed by paragraph (1) if—

(A) internal revenue taxes have been determined, or

customs duties liquidated, with respect to such article

before such date pursuant to a request made under the

1st proviso of section 3(a) of such Act, or

(B) such article is held on such date under the supervision of a customs officer pursuant to the 2d proviso

of such section 3(a).

(6) DEFINITIONS.—For purposes of this subsection—
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(A) IN GENERAL.—Terms used in this subsection which

are also used in section 5702 of the Internal Revenue

Code of 1986 shall have the respective meanings such

terms have in such section, as amended by this Act.

(B) TAX INCREASE DATE.—The term ‘‘tax increase date’’

means January 1, 2000, and January 1, 2002.

(C) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of the Treasury or the Secretary’s delegate.

(7) CONTROLLED GROUPS.—Rules similar to the rules of

section 5061(e)(3) of such Code shall apply for purposes of

this subsection.

(8) OTHER LAWS APPLICABLE.—All provisions of law, including penalties, applicable with respect to the taxes imposed

by section 5701 of such Code shall, insofar as applicable and

not inconsistent with the provisions of this subsection, apply

to the floor stocks taxes imposed by paragraph (1), to the

same extent as if such taxes were imposed by such section

5701. The Secretary may treat any person who bore the ultimate burden of the tax imposed by paragraph (1) as the person

to whom a credit or refund under such provisions may be

allowed or made.

SEC. 9303. LEASE OF EXCESS STRATEGIC PETROLEUM RESERVE

CAPACITY.

(a) AMENDMENT.—Part B of title I of the Energy Policy and

Conservation Act (42 U.S.C. 6231 et seq.) is amended by adding

at the end the following:

‘‘USE OF UNDERUTILIZED FACILITIES

‘‘SEC. 168. (a) AUTHORITY.—Notwithstanding any other provision of this title, the Secretary, by lease or otherwise, for any

term and under such other conditions as the Secretary considers

necessary or appropriate, may store in underutilized Strategic

Petroleum Reserve facilities petroleum product owned by a foreign

government or its representative. Petroleum products stored under

this section are not part of the Strategic Petroleum Reserve and

may be exported without license from the United States.

‘‘(b) PROTECTION OF FACILITIES.—All agreements entered into

pursuant to subsection (a) shall contain provisions providing for

fees to fully compensate the United States for all related costs

of storage and removals of petroleum products (including the proportionate cost of replacement facilities necessitated as a result of

any withdrawals) incurred by the United States on behalf of the

foreign government or its representative.

‘‘(c) ACCESS TO STORED OIL.—The Secretary shall ensure that

agreements to store petroleum products for foreign governments

or their representatives do not impair the ability of the United

States to withdraw, distribute, or sell petroleum products from

the Strategic Petroleum Reserve in response to an energy emergency

or to the obligations of the United States under the Agreement

on an International Energy Program.

‘‘(d) AVAILABILITY OF FUNDS.—Funds collected through the leasing of Strategic Petroleum Reserve facilities authorized by subsection (a) after September 30, 2007, shall be used by the Secretary

of Energy without further appropriation for the purchase of petroleum products for the Strategic Petroleum Reserve.’’.
H. R. 2015—427

(b) TABLE OF CONTENTS AMENDMENT.—The table of contents

of part B of title I of the Energy Policy and Conservation Act

is amended by adding at the end the following:

‘‘Sec. 168. Use of underutilized facilities.’’.

SEC. 9304. IDENTIFICATION OF LIMITED TAX BENEFITS SUBJECT TO

LINE ITEM VETO.

Section 1021(a)(3) of the Congressional Budget Act of 1974

shall only apply to 3306(c)(21) of the Internal Revenue Code of

1986 (as added by section 5406 of this Act).

SEC. 9305. PAYMENT OF BENEFITS IN APPROPRIATE FISCAL YEAR.

Section 5120(e) of title 38, United States Code, shall not apply

to benefit payments otherwise payable on October 1, 2000.

TITLE X—BUDGET ENFORCEMENT AND

PROCESS PROVISIONS

SEC. 10001. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE.—This title may be cited as the ‘‘Budget

Enforcement Act of 1997’’.

(b) TABLE OF CONTENTS.—The table of contents for this title

is as follows:

Sec. 10001. Short title; table of contents.

Subtitle A—Amendments to the Congressional Budget and Impoundment Control

Act of 1974

Sec. 10101. Amendment to section 3.

Sec. 10102. Amendments to section 201.

Sec. 10103. Amendments to section 202.

Sec. 10104. Amendment to section 300.

Sec. 10105. Amendments to section 301.

Sec. 10106. Amendments to section 302.

Sec. 10107. Amendments to section 303.

Sec. 10108. Amendment to section 304.

Sec. 10109. Amendment to section 305.

Sec. 10110. Amendments to section 308.

Sec. 10111. Amendments to section 310.

Sec. 10112. Amendments to section 311.

Sec. 10113. Amendment to section 312.

Sec. 10114. Adjustments.

Sec. 10115. Effect of adoption of a special order of business in the House of Representatives.

Sec. 10116. Amendment to section 401 and repeal of section 402.

Sec. 10117. Amendments to title V.

Sec. 10118. Repeal of title VI.

Sec. 10119. Amendments to section 904.

Sec. 10120. Repeal of sections 905 and 906.

Sec. 10121. Amendments to sections 1022 and 1024.

Sec. 10122. Amendment to section 1026.

Sec. 10123. Senate task force on consideration of budget measures.

Subtitle B—Amendments to the Balanced Budget and Emergency Deficit Control

Act of 1985

Sec. 10201. Purpose.

Sec. 10202. General statement and definitions.

Sec. 10203. Enforcing discretionary spending limits.

Sec. 10204. Violent crime reduction spending.

Sec. 10205. Enforcing pay-as-you-go.

Sec. 10206. Reports and orders.

Sec. 10207. Exempt programs and activities.

Sec. 10208. General and special sequestration rules.
H. R. 2015—428

Sec. 10209. The baseline.

Sec. 10210. Technical correction.

Sec. 10211. Judicial review.

Sec. 10212. Effective date.

Sec. 10213. Reduction of preexisting balances and exclusion of effects of this Act

from paygo scorecard.

Subtitle A—Amendments to the Congressional Budget and Impoundment Control

Act of 1974

SEC. 10101. AMENDMENT TO SECTION 3.

Section 3(9) of the Congressional Budget and Impoundment

Control Act of 1974 is amended to read as follows:

‘‘(9) The term ‘entitlement authority’ means—

‘‘(A) the authority to make payments (including loans

and grants), the budget authority for which is not provided

for in advance by appropriation Acts, to any person or

government if, under the provisions of the law containing

that authority, the United States is obligated to make

such payments to persons or governments who meet the

requirements established by that law; and

‘‘(B) the food stamp program.’’.

SEC. 10102. AMENDMENTS TO SECTION 201.

(a) TERM OF OFFICE.—The first sentence of section 201(a)(3)

of the Congressional Budget Act of 1974 is amended to read as

follows: ‘‘The term of office of the Director shall be 4 years and

shall expire on January 3 of the year preceding each Presidential

election.’’.

(b) CONFORMING CHANGE.—Section 201(e) of the Congressional

Budget Act of 1974 is amended by inserting ‘‘and’’ before ‘‘the

Library’’, by striking ‘‘and the Office of Technology Assessment,’’,

by inserting ‘‘and’’ before ‘‘the Librarian’’, and by striking ‘‘, and

the Technology Assessment Board’’.

(c) REDESIGNATION OF EXECUTED PROVISION.—Section 201 of

the Congressional Budget Act of 1974 is amended by redesignating

subsection (g) (relating to revenue estimates) as subsection (f).

SEC. 10103. AMENDMENTS TO SECTION 202.

(a) ASSISTANCE TO BUDGET COMMITTEES.—The first sentence

of section 202(a) of the Congressional Budget Act of 1974 is amended

by inserting ‘‘primary’’ before ‘‘duty’’.

(b) ELIMINATION OF EXECUTED PROVISION.—Section 202 of the

Congressional Budget Act of 1974 is amended by striking subsection

(e) and by redesignating subsections (f), (g), and (h) as subsections

(e), (f), and (g), respectively.

(c) REPORTING REQUIREMENT.—The first sentence of section

202(e)(1) of the Congressional Budget Act of 1974 (as redesignated)

is amended by—

(1) striking ‘‘and’’ before ‘‘(B)’’; and

(2) inserting before the period the following: ‘‘, and (C)

a statement of the levels of budget authority and outlays for

each program assumed to be extended in the baseline, as provided in section 257(b)(2)(A) and for excise taxes assumed to

be extended under section 257(b)(2)(C) of the Balanced Budget

and Emergency Deficit Control Act of 1985’’.
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SEC. 10104. AMENDMENT TO SECTION 300.

(a) TIMETABLE.—The item relating to February 25 in the timetable set forth in section 300 of the Congressional Budget Act

of 1974 is amended by striking ‘‘February 25’’ and inserting ‘‘Not

later than 6 weeks after President submits budget’’.

(b) CONFORMING AMENDMENTS.—(1) Clause 4(g) of rule X of

the Rules of the House of Representatives is amended by striking

‘‘on or before February 25 of each year’’ and inserting ‘‘not later

than 6 weeks after the President submits his budget’’.

(2) Clause 3(c) of rule XLVIII of the Rules of the House of

Representatives is amended by striking ‘‘On or before March 15

of each year’’ and inserting ‘‘Within 6 weeks after the President

submits a budget under section 1105(a) of title 31, United States

Code’’ and by striking ‘‘section 301(c)’’ and inserting ‘‘section 301(d)’’.

SEC. 10105. AMENDMENTS TO SECTION 301.

(a) TERMS OF BUDGET RESOLUTIONS.—Section 301(a) of the

Congressional Budget Act of 1974 is amended by striking ‘‘, and

planning levels for each of the two ensuing fiscal years,’’ and inserting ‘‘and for at least each of the 4 ensuing fiscal years’’.

(b) CONTENTS OF BUDGET RESOLUTIONS.—Paragraphs (1) and

(4) of section 301(a) of the Congressional Budget Act of 1974 are

amended by striking ‘‘, budget outlays, direct loan obligations, and

primary loan guarantee commitments’’ each place it appears and

inserting ‘‘and outlays’’.

(c) ADDITIONAL MATTERS.—Section 301(b) of the Congressional

Budget Act of 1974 is amended by—

(1) striking paragraph (7) and inserting the following:

‘‘(7) set forth procedures in the Senate whereby committee

allocations, aggregates, and other levels can be revised for

legislation if that legislation would not increase the deficit,

or would not increase the deficit when taken with other legislation enacted after the adoption of the resolution, for the first

fiscal year or the total period of fiscal years covered by the

resolution;’’;

(2) in paragraph 8, striking the period and inserting ‘‘;

and’’; and

(3) adding the following new paragraph:

‘‘(9) set forth direct loan obligation and primary loan

guarantee commitment levels.’’.

(d) VIEWS AND ESTIMATES.—The first sentence of section 301(d)

of the Congressional Budget Act of 1974 is amended by inserting

‘‘or at such time as may be requested by the Committee on the

Budget,’’ after ‘‘Code,’’.

(e) HEARINGS AND REPORT.—Section 301(e) of the Congressional

Budget Act of 1974 is amended—

(1) by striking ‘‘In developing’’ and inserting the following:

‘‘(1) IN GENERAL.—In developing’’; and

(2) by striking the sentence beginning with ‘‘The report

accompanying’’ and all that follows through the end of the

subsection and inserting the following:

‘‘(2) REQUIRED CONTENTS OF REPORT.—The report accompanying the resolution shall include—

‘‘(A) a comparison of the levels of total new budget

authority, total outlays, total revenues, and the surplus

or deficit for each fiscal year set forth in the resolution
H. R. 2015—430

with those requested in the budget submitted by the President;

‘‘(B) with respect to each major functional category,

an estimate of total new budget authority and total outlays,

with the estimates divided between discretionary and

mandatory amounts;

‘‘(C) the economic assumptions that underlie each of

the matters set forth in the resolution and any alternative

economic assumptions and objectives the committee considered;

‘‘(D) information, data, and comparisons indicating the

manner in which, and the basis on which, the committee

determined each of the matters set forth in the resolution;

‘‘(E) the estimated levels of tax expenditures (the tax

expenditures budget) by major items and functional categories for the President’s budget and in the resolution;

and

‘‘(F) allocations described in section 302(a).

‘‘(3) ADDITIONAL CONTENTS OF REPORT.—The report accompanying the resolution may include—

‘‘(A) a statement of any significant changes in the

proposed levels of Federal assistance to State and local

governments;

‘‘(B) an allocation of the level of Federal revenues recommended in the resolution among the major sources of

such revenues;

‘‘(C) information, data, and comparisons on the share

of total Federal budget outlays and of gross domestic product devoted to investment in the budget submitted by the

President and in the resolution;

‘‘(D) the assumed levels of budget authority and outlays

for public buildings, with a division between amounts for

construction and repair and for rental payments; and

‘‘(E) other matters, relating to the budget and to fiscal

policy, that the committee deems appropriate.’’.

(f) SOCIAL SECURITY CORRECTIONS.—(1) Section 301(i) of the

Congressional Budget Act of 1974 is amended by—

(A) inserting ‘‘SOCIAL SECURITY POINT OF ORDER.—’’ after

‘‘(i)’’; and

(B) striking ‘‘as reported to the Senate’’ and inserting ‘‘(or

amendment, motion, or conference report on the resolution)’’;

and

(2) Section 22 of House Concurrent Resolution 218 (103d Congress) is repealed.

SEC. 10106. AMENDMENTS TO SECTION 302.

(a) ALLOCATIONS AND SUBALLOCATIONS.—Section 302 of the

Congressional Budget Act of 1974 is amended by striking subsections (a) and (b) and inserting the following:

‘‘(a) COMMITTEE SPENDING ALLOCATIONS.—

‘‘(1) ALLOCATION AMONG COMMITTEES.—The joint explanatory statement accompanying a conference report on a concurrent resolution on the budget shall include an allocation,

consistent with the resolution recommended in the conference

report, of the levels for the first fiscal year of the resolution,

for at least each of the ensuing 4 fiscal years, and a total
H. R. 2015—431

for that period of fiscal years (except in the case of the Committee on Appropriations only for the fiscal year of that resolution)

of—

‘‘(A) total new budget authority; and

‘‘(B) total outlays;

among each committee of the House of Representatives or the

Senate that has jurisdiction over legislation providing or creating such amounts.

‘‘(2) NO DOUBLE COUNTING.—In the House of Representatives, any item allocated to one committee may not be allocated

to another committee.

‘‘(3) FURTHER DIVISION OF AMOUNTS.—

‘‘(A) IN THE SENATE.—In the Senate, the amount allocated to the Committee on Appropriations shall be further

divided among the categories specified in section 250(c)(4)

of the Balanced Budget and Emergency Deficit Control

Act of 1985 and shall not exceed the limits for each category

set forth in section 251(c) of that Act.

‘‘(B) IN THE HOUSE.—In the House of Representatives,

the amounts allocated to each committee for each fiscal

year, other than the Committee on Appropriations, shall

be further divided between amounts provided or required

by law on the date of filing of that conference report and

amounts not so provided or required. The amounts allocated

to the Committee on Appropriations shall be further

divided—

‘‘(i) between discretionary and mandatory amounts

or programs, as appropriate; and

‘‘(ii) consistent with the categories specified in section 250(c)(4) of the Balanced Budget and Emergency

Deficit Control Act of 1985.

‘‘(4) AMOUNTS NOT ALLOCATED.—In the House of Representatives or the Senate, if a committee receives no allocation

of new budget authority or outlays, that committee shall be

deemed to have received an allocation equal to zero for new

budget authority or outlays.

‘‘(5) ADJUSTING ALLOCATION OF DISCRETIONARY SPENDING

IN THE HOUSE OF REPRESENTATIVES.—(A) If a concurrent resolution on the budget is not adopted by April 15, the chairman

of the Committee on the Budget of the House of Representatives

shall submit to the House, as soon as practicable, an allocation

under paragraph (1) to the Committee on Appropriations

consistent with the discretionary spending levels in the most

recently agreed to concurrent resolution on the budget for the

appropriate fiscal year covered by that resolution.

‘‘(B) As soon as practicable after an allocation under paragraph (1) is submitted under this section, the Committee on

Appropriations shall make suballocations and report those suballocations to the House of Representatives.

‘‘(b) SUBALLOCATIONS BY APPROPRIATIONS COMMITTEES.—As

soon as practicable after a concurrent resolution on the budget

is agreed to, the Committee on Appropriations of each House (after

consulting with the Committee on Appropriations of the other

House) shall suballocate each amount allocated to it for the budget

year under subsection (a) among its subcommittees. Each Committee on Appropriations shall promptly report to its House suballocations made or revised under this subsection. The Committee on
H. R. 2015—432

Appropriations of the House of Representatives shall further divide

among its subcommittees the divisions made under subsection

(a)(3)(B) and promptly report those divisions to the House.’’.

(b) POINT OF ORDER.—Section 302(c) of the Congressional

Budget Act of 1974 is amended to read as follows:

‘‘(c) POINT OF ORDER.—After the Committee on Appropriations

has received an allocation pursuant to subsection (a) for a fiscal

year, it shall not be in order in the House of Representatives

or the Senate to consider any bill, joint resolution, amendment,

motion, or conference report within the jurisdiction of that committee providing new budget authority for that fiscal year, until that

committee makes the suballocations required by subsection (b).’’.

(c) ENFORCEMENT OF POINT OF ORDER.—

(1) IN THE HOUSE.—Section 302(f)(1) of the Congressional

Budget Act of 1974 is amended by—

(A) striking ‘‘providing new budget authority for such

fiscal year or new entitlement authority effective during

such fiscal year’’ and inserting ‘‘providing new budget

authority for any fiscal year’’; and

(B) striking ‘‘appropriate allocation made pursuant to

subsection (b)’’ and all that follows through ‘‘exceeded.’’

and inserting ‘‘applicable allocation of new budget authority

made under subsection (a) or (b) for the first fiscal year

or the total of fiscal years to be exceeded.’’.

(2) IN THE SENATE.—Section 302(f)(2) of the Congressional

Budget Act of 1974 is amended to read as follows:

‘‘(2) IN THE SENATE.—After a concurrent resolution on the

budget is agreed to, it shall not be in order in the Senate

to consider any bill, joint resolution, amendment, motion, or

conference report that would cause—

‘‘(A) in the case of any committee except the Committee

on Appropriations, the applicable allocation of new budget

authority or outlays under subsection (a) for the first fiscal

year or the total of fiscal years to be exceeded; or

‘‘(B) in the case of the Committee on Appropriations,

the applicable suballocation of new budget authority or

outlays under subsection (b) to be exceeded.’’.

(d) PAY-AS-YOU-GO EXCEPTION IN THE HOUSE.—Section 302(g)

of the Congressional Budget Act of 1974 is amended to read as

follows:

‘‘(g) PAY-AS-YOU-GO EXCEPTION IN THE HOUSE.— ‘‘(1) IN GENERAL.—(A) Subsection (f)(1) and, after April

15, section 303(a) shall not apply to any bill or joint resolution,

as reported, amendment thereto, or conference report thereon

if, for each fiscal year covered by the most recently agreed

to concurrent resolution on the budget—

‘‘(i) the enactment of that bill or resolution as reported;

‘‘(ii) the adoption and enactment of that amendment;

or

‘‘(iii) the enactment of that bill or resolution in the

form recommended in that conference report,

would not increase the deficit, and, if the sum of any revenue

increases provided in legislation already enacted during the

current session (when added to revenue increases, if any, in

excess of any outlay increase provided by the legislation proposed for consideration) is at least as great as the sum of

the amount, if any, by which the aggregate level of Federal
H. R. 2015—433

revenues should be increased as set forth in that concurrent

resolution and the amount, if any, by which revenues are

to be increased pursuant to pay-as-you-go procedures under

section 301(b)(8), if included in that concurrent resolution.

‘‘(B) Section 311(a), as that section applies to revenues,

shall not apply to any bill, joint resolution, amendment thereto,

or conference report thereon if, for each fiscal year covered

by the most recently agreed to concurrent resolution on the

budget—

‘‘(i) the enactment of that bill or resolution as reported;

‘‘(ii) the adoption and enactment of that amendment;

or

‘‘(iii) the enactment of that bill or resolution in the

form recommended in that conference report,

would not increase the deficit, and, if the sum of any outlay

reductions provided in legislation already enacted during the

current session (when added to outlay reductions, if any, in

excess of any revenue reduction provided by the legislation

proposed for consideration) is at least as great as the sum

of the amount, if any, by which the aggregate level of Federal

outlays should be reduced as required by that concurrent resolution and the amount, if any, by which outlays are to be reduced

pursuant to pay-as-you-go procedures under section 301(b)(8),

if included in that concurrent resolution.

‘‘(2) REVISED ALLOCATIONS.—(A) As soon as practicable after

Congress agrees to a bill or joint resolution that would have

been subject to a point of order under subsection (f)(1) but

for the exception provided in paragraph (1)(A) or would have

been subject to a point of order under section 311(a) but for

the exception provided in paragraph (1)(B), the chairman of

the committee on the Budget of the House of Representatives

shall file with the House appropriately revised allocations under

section 302(a) and revised functional levels and budget aggregates to reflect that bill.

‘‘(B) Such revised allocations, functional levels, and budget

aggregates shall be considered for the purposes of this Act

as allocations, functional levels, and budget aggregates contained in the most recently agreed to concurrent resolution

on the budget.’’.

SEC. 10107. AMENDMENTS TO SECTION 303.

(a) IN GENERAL.—Section 303 of the Congressional Budget Act

of 1974 is amended to read as follows:

‘‘CONCURRENT RESOLUTION ON THE BUDGET MUST BE ADOPTED

BEFORE BUDGET-RELATED LEGISLATION IS CONSIDERED

‘‘SEC. 303. (a) IN GENERAL.—Until the concurrent resolution

on the budget for a fiscal year has been agreed to, it shall not

be in order in the House of Representatives, with respect to the

first fiscal year covered by that resolution, or the Senate, with

respect to any fiscal year covered by that resolution, to consider

any bill or joint resolution, amendment or motion thereto, or conference report thereon that—

‘‘(1) first provides new budget authority for that fiscal

year;

‘‘(2) first provides an increase or decrease in revenues during that fiscal year;
H. R. 2015—434

‘‘(3) provides an increase or decrease in the public debt

limit to become effective during that fiscal year;

‘‘(4) in the Senate only, first provides new entitlement

authority for that fiscal year; or

‘‘(5) in the Senate only, first provides for an increase or

decrease in outlays for that fiscal year.

‘‘(b) EXCEPTIONS IN THE HOUSE.— In the House of Representatives, subsection (a) does not apply—

‘‘(1)(A) to any bill or joint resolution, as reported, providing

advance discretionary new budget authority that first becomes

available for the first or second fiscal year after the budget

year; or

‘‘(B) to any bill or joint resolution, as reported, first increasing or decreasing revenues in a fiscal year following the fiscal

year to which the concurrent resolution applies;

‘‘(2) after May 15, to any general appropriation bill or

amendment thereto; or

‘‘(3) to any bill or joint resolution unless it is reported

by a committee.

‘‘(c) APPLICATION TO APPROPRIATION MEASURES IN THE SEN- ATE.— ‘‘(1) IN GENERAL.—Until the concurrent resolution on the

budget for a fiscal year has been agreed to and an allocation

has been made to the Committee on Appropriations of the

Senate under section 302(a) for that year, it shall not be in

order in the Senate to consider any appropriation bill or joint

resolution, amendment or motion thereto, or conference report

thereon for that year or any subsequent year.

‘‘(2) EXCEPTION.—Paragraph (1) does not apply to appropriations legislation making advance appropriations for the

first or second fiscal year after the year the allocation referred

to in that paragraph is made.’’.

(b) CONFORMING AMENDMENT.—The item relating to section

303 in the table of contents set forth in section 1(b) of the Congressional Budget and Impoundment Control Act of 1974 is amended

to read as follows:

‘‘Sec. 303. Concurrent resolution on the budget must be adopted before budget-related legislation is considered.’’.

SEC. 10108. AMENDMENT TO SECTION 304.

Section 304 of the Congressional Budget Act of 1974 is amended

by—

(1) striking ‘‘(a) IN GENERAL.—’’; and

(2) striking subsection (b).

SEC. 10109. AMENDMENT TO SECTION 305.

(a) BUDGET ACT.—Section 305(a)(1) of the Congressional Budget

Act of 1974 is amended to read as follows:

‘‘(1) When a concurrent resolution on the budget has been

reported by the Committee on the Budget of the House of

Representatives and has been referred to the appropriate calendar of the House, it shall be in order on any day thereafter,

subject to clause 2(l)(6) of rule XI of the Rules of the House

of Representatives, to move to proceed to the consideration

of the concurrent resolution. The motion is highly privileged

and is not debatable. An amendment to the motion is not
H. R. 2015—435

in order and it is not in order to move to reconsider the

vote by which the motion is agreed to or disagreed to.’’.

(b) CONFORMING AMENDMENT IN THE HOUSE.—The first sentence of clause 2(l)(6) of rule XI of the Rules of the House of

Representatives is amended by striking ‘‘, or as provided by section

305(a)(1)’’ and all that follows thereafter through ‘‘under that section)’’.

SEC. 10110. AMENDMENTS TO SECTION 308.

Section 308 of the Congressional Budget Act of 1974 is amended—

(1)(A) in the heading of subsection (a), by striking ‘‘, NEW

SPENDING AUTHORITY, OR NEW CREDIT AUTHORITY,’’;

(B) in subsection (a)(1), by striking subparagraph (B) and

by redesignating subparagraphs (C) and (D) as subparagraphs

(B) and (C), respectively;

(C) in subsection (a)(1)(B) (as redesignated), by striking

‘‘spending authority’’ through ‘‘commitments’’ and inserting

‘‘revenues, or tax expenditures’’; and

(D) in paragraphs (1) and (2) of subsection (a), by striking

‘‘, new spending authority described in section 401(c)(2), or

new credit authority,’’ each place it appears;

(2) in subsection (b)(1), by striking ‘‘, new spending authority described in section 401(c)(2), or new credit authority,’’;

(3) in subsection (c), by inserting ‘‘and’’ after the semicolon

at the end of paragraph (3), by striking ‘‘; and’’ at the end

of paragraph (4) and inserting a period; and by striking paragraph (5); and

(4) by inserting ‘‘joint’’ before ‘‘resolution’’ each place it

appears except when ‘‘concurrent’’, ‘‘such’’, or ‘‘reconciliation’’

precedes ‘‘resolution’’ and, in subsection (b)(1), by inserting

‘‘joint’’ before ‘‘resolutions’’ each place it appears.

SEC. 10111. AMENDMENTS TO SECTION 310.

Section 310(c)(1)(A) of the Congressional Budget Act of 1974

is amended—

(1) by striking ‘‘20 percent’’ the first place it appears and

all that follows thereafter through ‘‘, and’’ and inserting the

following:

‘‘(I) in the Senate, 20 percent of the total of the

amounts of the changes such committee was directed

to make under paragraphs (1) and (2) of such subsection; or

‘‘(II) in the House of Representatives, 20 percent

of the sum of the absolute value of the changes the

committee was directed to make under paragraph (1)

and the absolute value of the changes the committee

was directed to make under paragraph (2); and’’; and

(2) by striking ‘‘20 percent’’ the second place it appears

and all that follows thereafter through ‘‘; and’’ and inserting

the following:

‘‘(I) in the Senate, 20 percent of the total of the

amounts of the changes such committee was directed

to make under paragraphs (1) and (2) of such subsection; or

‘‘(II) in the House of Representatives, 20 percent

of the sum of the absolute value of the changes the

committee was directed to make under paragraph (1)
H. R. 2015—436

and the absolute value of the changes the committee

was directed to make under paragraph (2); and’’.

SEC. 10112. AMENDMENTS TO SECTION 311.

(a) IN GENERAL.—Section 311 of the Congressional Budget Act

of 1974 is amended to read as follows:

‘‘BUDGET-RELATED LEGISLATION MUST BE WITHIN APPROPRIATE

LEVELS

‘‘SEC. 311. (a) ENFORCEMENT OF BUDGET AGGREGATES.—

‘‘(1) IN THE HOUSE OF REPRESENTATIVES.—Except as provided by subsection (c), after the Congress has completed action

on a concurrent resolution on the budget for a fiscal year,

it shall not be in order in the House of Representatives to

consider any bill, joint resolution, amendment, motion, or conference report providing new budget authority or reducing revenues, if—

‘‘(A) the enactment of that bill or resolution as reported;

‘‘(B) the adoption and enactment of that amendment;

or

‘‘(C) the enactment of that bill or resolution in the

form recommended in that conference report;

would cause the level of total new budget authority or total

outlays set forth in the applicable concurrent resolution on

the budget for the first fiscal year to be exceeded, or would

cause revenues to be less than the level of total revenues

set forth in that concurrent resolution for the first fiscal year

or for the total of that first fiscal year and the ensuing fiscal

years for which allocations are provided under section 302(a),

except when a declaration of war by the Congress is in effect.

‘‘(2) IN THE SENATE.—After a concurrent resolution on the

budget is agreed to, it shall not be in order in the Senate

to consider any bill, joint resolution, amendment, motion, or

conference report that—

‘‘(A) would cause the level of total new budget authority

or total outlays set forth for the first fiscal year in the

applicable resolution to be exceeded; or

‘‘(B) would cause revenues to be less than the level

of total revenues set forth for that first fiscal year or

for the total of that first fiscal year and the ensuing fiscal

years in the applicable resolution for which allocations

are provided under section 302(a).

‘‘(3) ENFORCEMENT OF SOCIAL SECURITY LEVELS IN THE SEN- ATE.—After a concurrent resolution on the budget is agreed

to, it shall not be in order in the Senate to consider any

bill, joint resolution, amendment, motion, or conference report

that would cause a decrease in social security surpluses or

an increase in social security deficits relative to the levels

set forth in the applicable resolution for the first fiscal year

or for the total of that fiscal year and the ensuing fiscal years

for which allocations are provided under section 302(a).

‘‘(b) SOCIAL SECURITY LEVELS.—

‘‘(1) IN GENERAL.—For purposes of subsection (a)(3), social

security surpluses equal the excess of social security revenues

over social security outlays in a fiscal year or years with such

an excess and social security deficits equal the excess of social
H. R. 2015—437

security outlays over social security revenues in a fiscal year

or years with such an excess.

‘‘(2) TAX TREATMENT.—For purposes of subsection (a)(3),

no provision of any legislation involving a change in chapter

1 of the Internal Revenue Code of 1986 shall be treated as

affecting the amount of social security revenues or outlays

unless that provision changes the income tax treatment of

social security benefits.

‘‘(c) EXCEPTION IN THE HOUSE OF REPRESENTATIVES.—Subsection (a)(1) shall not apply in the House of Representatives to

any bill, joint resolution, or amendment that provides new budget

authority for a fiscal year or to any conference report on any

such bill or resolution, if—

‘‘(1) the enactment of that bill or resolution as reported;

‘‘(2) the adoption and enactment of that amendment; or

‘‘(3) the enactment of that bill or resolution in the form

recommended in that conference report;

would not cause the appropriate allocation of new budget authority

made pursuant to section 302(a) for that fiscal year to be exceeded.’’.

(b) TABLE OF CONTENTS.—The table of contents set forth in

section 1(b) of the Congressional Budget and Impoundment Control

Act of 1974 is amended by striking the item relating to section

311 and inserting the following:

‘‘Sec. 311. Budget-related legislation must be within appropriate levels.’’.

SEC. 10113. AMENDMENT TO SECTION 312.

(a) IN GENERAL.—Section 312 of the Congressional Budget Act

of 1974 is amended to read as follows:

‘‘DETERMINATIONS AND POINTS OF ORDER

‘‘SEC. 312. (a) BUDGET COMMITTEE DETERMINATIONS.—For purposes of this title and title IV, the levels of new budget authority,

outlays, direct spending, new entitlement authority, and revenues

for a fiscal year shall be determined on the basis of estimates

made by the Committee on the Budget of the House of Representatives or the Senate, as applicable.

‘‘(b) DISCRETIONARY SPENDING POINT OF ORDER IN THE SEN- ATE.— ‘‘(1) IN GENERAL.—Except as otherwise provided in this

subsection, it shall not be in order in the Senate to consider

any bill or resolution (or amendment, motion, or conference

report on that bill or resolution) that would exceed any of

the discretionary spending limits in section 251(c) of the Balanced Budget and Emergency Deficit Control Act of 1985.

‘‘(2) EXCEPTIONS.—This subsection shall not apply if a declaration of war by the Congress is in effect or if a joint resolution

pursuant to section 258 of the Balanced Budget and Emergency

Deficit Control Act of 1985 has been enacted.

‘‘(c) MAXIMUM DEFICIT AMOUNT POINT OF ORDER IN THE SENATE.—It shall not be in order in the Senate to consider any concurrent resolution on the budget for a fiscal year, or to consider

any amendment to that concurrent resolution, or to consider a

conference report on that concurrent resolution, if—

‘‘(1) the level of total outlays for the first fiscal year set

forth in that concurrent resolution or conference report exceeds;

or
H. R. 2015—438

‘‘(2) the adoption of that amendment would result in a

level of total outlays for that fiscal year that exceeds;

the recommended level of Federal revenues for that fiscal year,

by an amount that is greater than the maximum deficit amount,

if any, specified in the Balanced Budget and Emergency Deficit

Control Act of 1985 for that fiscal year.

‘‘(d) TIMING OF POINTS OF ORDER IN THE SENATE.—A point

of order under this Act may not be raised against a bill, resolution,

amendment, motion, or conference report while an amendment or

motion, the adoption of which would remedy the violation of this

Act, is pending before the Senate.

‘‘(e) POINTS OF ORDER IN THE SENATE AGAINST AMENDMENTS

BETWEEN THE HOUSES.—Each provision of this Act that establishes

a point of order against an amendment also establishes a point

of order in the Senate against an amendment between the Houses.

If a point of order under this Act is raised in the Senate against

an amendment between the Houses and the point of order is sustained, the effect shall be the same as if the Senate had disagreed

to the amendment.

‘‘(f) EFFECT OF A POINT OF ORDER IN THE SENATE.—In the

Senate, if a point of order under this Act against a bill or resolution

is sustained, the Presiding Officer shall then recommit the bill

or resolution to the committee of appropriate jurisdiction for further

consideration.’’.

(b) TECHNICAL AND CONFORMING AMENDMENTS.—

(1) IN GENERAL.—Section 313 of the Congressional Budget

Act of 1974 is amended—

(A) by striking ‘‘(c) When’’ and inserting ‘‘(d) CON- FERENCE REPORTS.—When’’; and

(B) by striking subsection (e) and redesignating subsection (d) as subsection (e).

(2) TABLE OF CONTENTS.—The item relating to section 312

in the table of contents set forth in section 1(b) of the Congressional Budget and Impoundment Control Act of 1974 is amended by striking ‘‘Effect of points’’ and inserting ‘‘Determinations

and points’’.

SEC. 10114. ADJUSTMENTS.

(a) IN GENERAL.—Title III of the Congressional Budget Act

of 1974 is amended by adding at the end the following new section:

‘‘ADJUSTMENTS

‘‘SEC. 314. (a) ADJUSTMENTS.— ‘‘(1) IN GENERAL.—After the reporting of a bill or joint

resolution, the offering of an amendment thereto, or the submission of a conference report thereon, the chairman of the

Committee on the Budget of the House of Representatives

or the Senate shall make the adjustments set forth in paragraph (2) for the amount of new budget authority in that

measure (if that measure meets the requirements set forth

in subsection (b)) and the outlays flowing from that budget

authority.

‘‘(2) MATTERS TO BE ADJUSTED.—The adjustments referred

to in paragraph (1) are to be made to—

‘‘(A) the discretionary spending limits, if any, set forth

in the appropriate concurrent resolution on the budget;
H. R. 2015—439

‘‘(B) the allocations made pursuant to the appropriate

concurrent resolution on the budget pursuant to section

302(a); and

‘‘(C) the budgetary aggregates as set forth in the appropriate concurrent resolution on the budget.

‘‘(b) AMOUNTS OF ADJUSTMENTS.—The adjustment referred to

in subsection (a) shall be—

‘‘(1) an amount provided and designated as an emergency

requirement pursuant to section 251(b)(2)(A) or 252(e) of the

Balanced Budget and Emergency Deficit Control Act of 1985;

‘‘(2) an amount provided for continuing disability reviews

subject to the limitations in section 251(b)(2)(C) of that Act;

‘‘(3) for any fiscal year through 2002, an amount provided

that is the dollar equivalent of the Special Drawing Rights

with respect to—

‘‘(A) an increase in the United States quota as part

of the International Monetary Fund Eleventh General

Review of Quotas (United States Quota); or

‘‘(B) any increase in the maximum amount available

to the Secretary of the Treasury pursuant to section 17

of the Bretton Woods Agreements Act, as amended from

time to time (New Arrangements to Borrow);

‘‘(4) an amount provided not to exceed $1,884,000,000 for

the period of fiscal years 1998 through 2000 for arrearages

for international organizations, international peacekeeping, and

multilateral development banks; or

‘‘(5) an amount provided for an earned income tax credit

compliance initiative but not to exceed— ‘‘(A) with respect to fiscal year 1998, $138,000,000 in

new budget authority; ‘‘(B) with respect to fiscal year 1999, $143,000,000 in

new budget authority; ‘‘(C) with respect to fiscal year 2000, $144,000,000 in

new budget authority; ‘‘(D) with respect to fiscal year 2001, $145,000,000

in new budget authority; and ‘‘(E) with respect to fiscal year 2002, $146,000,000 in

new budget authority.

‘‘(c) APPLICATION OF ADJUSTMENTS.—The adjustments made

pursuant to subsection (a) for legislation shall—

‘‘(1) apply while that legislation is under consideration;

‘‘(2) take effect upon the enactment of that legislation;

and

‘‘(3) be published in the Congressional Record as soon as

practicable.

‘‘(d) REPORTING REVISED SUBALLOCATIONS.—Following any

adjustment made under subsection (a), the Committees on Appropriations of the Senate and the House of Representatives may

report appropriately revised suballocations under section 302(b)

to carry out this section.

‘‘(e) DEFINITIONS FOR CDRS.—As used in subsection (b)(2)—

‘‘(1) the term ‘continuing disability reviews’ shall have the

same meaning as provided in section 251(b)(2)(C)(ii) of the

Balanced Budget and Emergency Deficit Control Act of 1985;

and

‘‘(2) the term ‘new budget authority’ shall have the same

meaning as the term ‘additional new budget authority’ and
H. R. 2015—440

the term ‘outlays’ shall have the same meaning as ‘additional

outlays’ in that section.’’.

(b) TABLE OF CONTENTS.—The table of contents set forth in

section 1(b) of the Congressional Budget and Impoundment Control

Act of 1974 is amended by adding after the item relating to section

313 the following new item:

‘‘Sec. 314. Adjustments.’’.

SEC. 10115. EFFECT OF ADOPTION OF A SPECIAL ORDER OF BUSINESS

IN THE HOUSE OF REPRESENTATIVES.

(a) EFFECT OF POINTS OF ORDER.—Title III of the Congressional

Budget Act of 1974 is amended by adding after section 314 the

following new section:

‘‘EFFECT OF ADOPTION OF A SPECIAL ORDER OF BUSINESS IN THE

HOUSE OF REPRESENTATIVES

‘‘SEC. 315. For purposes of a reported bill or joint resolution

considered in the House of Representatives pursuant to a special

order of business, the term ‘as reported’ in this title or title IV

shall be considered to refer to the text made in order as an original

bill or joint resolution for the purpose of amendment or to the

text on which the previous question is ordered directly to passage,

as the case may be.’’.

(b) CONFORMING AMENDMENT.—The table of contents set forth

in section 1(b) of the Congressional Budget and Impoundment Control Act of 1974 is amended by adding after the item relating

to section 314 the following new item:

‘‘Sec. 315. Effect of adoption of a special order of business in the House of Representatives.’’.

SEC. 10116. AMENDMENT TO SECTION 401 AND REPEAL OF SECTION

402.

(a) SECTION 401.—

(1) CONTROLS.—Section 401 of the Congressional Budget

Act of 1974 is amended by—

(A) striking the heading and inserting the following:

‘‘BUDGET-RELATED LEGISLATION NOT SUBJECT TO APPROPRIATIONS’’;

and

(B) striking subsection (a) and inserting the following:

‘‘(a) CONTROLS ON CERTAIN BUDGET-RELATED LEGISLATION NOT

SUBJECT TO APPROPRIATIONS.—It shall not be in order in either

the House of Representatives or the Senate to consider any bill

or joint resolution (in the House of Representatives only, as

reported), amendment, motion, or conference report that provides—

‘‘(1) new authority to enter into contracts under which

the United States is obligated to make outlays;

‘‘(2) new authority to incur indebtedness (other than indebtedness incurred under chapter 31 of title 31 of the United

States Code) for the repayment of which the United States

is liable; or

‘‘(3) new credit authority;

unless that bill, joint resolution, amendment, motion, or conference

report also provides that the new authority is to be effective for

any fiscal year only to the extent or in the amounts provided

in advance in appropriation Acts.’’.
H. R. 2015—441

(2) POINT OF ORDER.—Section 401(b) of the Congressional

Budget Act of 1974 is amended—

(A) by inserting ‘‘new’’ before ‘‘entitlement’’ in the heading;

(B) by striking paragraph (1) and inserting the following:

‘‘(1) POINT OF ORDER.—It shall not be in order in either

the House of Representatives or the Senate to consider any

bill or joint resolution (in the House of Representatives only,

as reported), amendment, motion, or conference report that

provides new entitlement authority that is to become effective

during the current fiscal year.’’; and

(C) in paragraph (2)—

(i) by striking ‘‘new spending authority described

in subsection (c)(2)(C)’’ and inserting ‘‘new entitlement

authority’’; and

(ii) by striking ‘‘of that House’’ and inserting ‘‘of

the Senate or may then be referred to the Committee

on Appropriations of the House, as the case may be,’’.

(3) DEFINITIONS.—Section 401 of the Congressional Budget

Act of 1974 is amended by striking subsection (c).

(4) EXCEPTIONS.—Section 401(d) of the Congressional

Budget Act of 1974 is amended—

(A) in paragraph (1), by striking ‘‘new spending authority if the budget authority for outlays which result from

such new spending authority is derived’’ and inserting ‘‘new

authority described in those subsections if outlays from

that new authority will flow’’;

(B) by striking paragraph (2) and redesignating paragraph (3) as paragraph (2); and

(C) in paragraph (2), as redesignated, by striking ‘‘new

spending authority’’ and inserting ‘‘new authority described

in those subsections’’.

(5) REDESIGNATION.—Subsection (d) of section 401 of the

Congressional Budget Act of 1974 is redesignated as subsection

(c).

(6) CONFORMING AMENDMENTS.—(A) Clause 1(b)(4) of rule

X of the Rules of the House of Representatives is amended

to read as follows:

‘‘(4) The amount of new authority to enter into contracts

under which the United States is obligated to make outlays,

the budget authority for which is not provided in advance

by appropriation Acts; new authority to incur indebtedness

(other than indebtedness in incurred under chapter 31 of title

31 of the United States Code) for the repayment of which

the United States is liable, the budget authority for which

is not provided in advance by appropriation Acts; new entitlement authority as defined in section 3(9) of the Congressional

Budget Act of 1974, including bills and resolutions (reported

by other committees) which provide new entitlement authority

as defined in section 3(9) of the Congressional Budget Act

of 1974 and are referred to the committee under clause 4(a);

authority to forego the collection by the United States of proprietary offsetting receipts, the budget authority for which is

not provided in advance by appropriation Acts to offset such

foregone receipts; and authority to make payments by the

United States (including loans, grants, and payments from
H. R. 2015—442

revolving funds) other than those covered by this subparagraph,

the budget authority for which is not provided in advance

by appropriation Acts.’’.

(B) Clause 4(a)(2) of rule X of the Rules of the House

of Representatives is amended by striking ‘‘new spending

authority described in section 401(c)(2)(C)’’ and inserting ‘‘new

entitlement authority as defined in section 3(9)’’ and by striking

‘‘total amount of new spending authority’’ and inserting ‘‘total

amount of new entitlement authority’’.

(C) Clause 2(l)(3) of rule XI of the Rules of the House

of Representatives is amended by striking ‘‘new spending

authority as described in section 401(c)(2)’’ and by inserting

‘‘new entitlement authority as defined in section 3(9)’’.

(b) REPEALER OF SECTION 402.—Section 402 of the Congressional Budget Act of 1974 is repealed.

(c) CONFORMING AMENDMENTS.— (1) REDESIGNATION.—Sections 403 through 407 of the

Congressional Budget Act of 1974 are redesignated as sections

402 through 406, respectively.

(2) GAO ANALYSIS.—Section 404 (as redesignated) of the

Congressional Budget Act of 1974 is amended by striking

‘‘spending authority as described by section 401(c)(2) and which

provide permanent appropriations,’’ and inserting ‘‘mandatory

spending’’.

(3) TABLE OF CONTENTS.—The table of contents set forth

in section 1(b) of the Congressional Budget and Impoundment

Control Act of 1974 is amended by—

(A) striking the item for section 401 and inserting

the following:

‘‘Sec. 401. Budget-related legislation not subject to appropriations.’’; and

(B) striking the item relating to section 402 and

redesignating the items relating to sections 403 through

407 as the items relating to sections 402 through 406,

respectively.

(4) CONFORMING AMENDMENTS.—(A) Clause 2(l)(3) of rule

XI of the Rules of the House of Representatives is amended

by striking ‘‘section 403’’ and inserting ‘‘section 402’’.

(B) Clause 7(d) of rule XIII of the Rules of the House

of Representatives is amended by striking ‘‘section 403’’ and

inserting ‘‘section 402’’.

SEC. 10117. AMENDMENTS TO TITLE V.

(a) SECTION 502.—Section 502 of the Federal Credit Reform

Act of 1990 is amended as follows:

(1) In the second sentence of paragraph (1), insert ‘‘and

financing arrangements that defer payment for more than 90

days, including the sale of a government asset on credit terms’’

before the period.

(2) In paragraph (5)(A), insert ‘‘or modification thereof’’

before the first comma.

(3) In paragraph (5), strike subparagraphs (B) and (C)

and insert the following:

‘‘(B) The cost of a direct loan shall be the net present

value, at the time when the direct loan is disbursed, of the

following estimated cash flows:

‘‘(i) loan disbursements;

‘‘(ii) repayments of principal; and
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‘‘(iii) payments of interest and other payments by or

to the Government over the life of the loan after adjusting

for estimated defaults, prepayments, fees, penalties, and

other recoveries;

including the effects of changes in loan terms resulting from

the exercise by the borrower of an option included in the

loan contract.

‘‘(C) The cost of a loan guarantee shall be the net present

value, at the time when the guaranteed loan is disbursed,

of the following estimated cash flows:

‘‘(i) payments by the Government to cover defaults

and delinquencies, interest subsidies, or other payments;

and

‘‘(ii) payments to the Government including origination

and other fees, penalties and recoveries;

including the effects of changes in loan terms resulting from

the exercise by the guaranteed lender of an option included

in the loan guarantee contract, or by the borrower of an option

included in the guaranteed loan contract.’’.

(4) In paragraph (5), amend subparagraph (D) to read

as follows:

‘‘(D) The cost of a modification is the difference between

the current estimate of the net present value of the remaining

cash flows under the terms of a direct loan or loan guarantee

contract, and the current estimate of the net present value

of the remaining cash flows under the terms of the contract,

as modified.’’.

(5) In paragraph (5)(E), insert ‘‘the cash flows of’’ after

‘‘to’’.

(6) In paragraph (5), by adding at the end the following:

‘‘(F) When funds are obligated for a direct loan or loan

guarantee, the estimated cost shall be based on the current

assumptions, adjusted to incorporate the terms of the loan

contract, for the fiscal year in which the funds are obligated.’’.

(7) Redesignate paragraph (9) as paragraph (11) and after

paragraph (8) add the following new paragraphs:

‘‘(9) The term ‘modification’ means any Government action

that alters the estimated cost of an outstanding direct loan

(or direct loan obligation) or an outstanding loan guarantee

(or loan guarantee commitment) from the current estimate

of cash flows. This includes the sale of loan assets, with or

without recourse, and the purchase of guaranteed loans. This

also includes any action resulting from new legislation, or from

the exercise of administrative discretion under existing law,

that directly or indirectly alters the estimated cost of outstanding direct loans (or direct loan obligations) or loan guarantees

(or loan guarantee commitments) such as a change in collection

procedures.

‘‘(10) The term ‘current’ has the same meaning as in section

250(c)(9) of the Balanced Budget and Emergency Deficit Control

Act of 1985.’’.

(b) SECTION 504.—Section 504 of the Federal Credit Reform

Act of 1990 is amended as follows:

(1) Amend subsection (b)(1) to read as follows:

‘‘(1) new budget authority to cover their costs is provided

in advance in an appropriations Act;’’.
H. R. 2015—444

(2) In subsection (b)(2), strike ‘‘is enacted’’ and insert ‘‘has

been provided in advance in an appropriations Act’’.

(3) In subsection (c), strike ‘‘Subsection (b)’’ and insert

‘‘Subsections (b) and (e)’’.

(4) In subsection (d)(1), strike ‘‘directly or indirectly alter

the costs of outstanding direct loans and loan guarantees’’

and insert ‘‘modify outstanding direct loans (or direct loan

obligations) or loan guarantees (or loan guarantee commitments)’’.

(5) Amend subsection (e) to read as follows:

‘‘(e) MODIFICATIONS.—An outstanding direct loan (or direct loan

obligation) or loan guarantee (or loan guarantee commitment) shall

not be modified in a manner that increases its costs unless budget

authority for the additional cost has been provided in advance

in an appropriations Act.’’.

(c) SECTION 505.—Section 505 of the Federal Credit Reform

Act of 1990 is amended as follows:

(1) In subsection (c), by inserting before the period at

the end of the second sentence the following: ‘‘, except that

the rate of interest charged by the Secretary on lending to

financing accounts (including amounts treated as lending to

financing accounts by the Federal Financing Bank (hereinafter

in this subsection referred to as the ‘Bank’) pursuant to section

406(b)) and the rate of interest paid to financing accounts

on uninvested balances in financing accounts shall be the same

as the rate determined pursuant to section 502(5)(E). For

guaranteed loans financed by the Bank and treated as direct

loans by a Federal agency pursuant to section 406(b), any

fee or interest surcharge (the amount by which the interest

rate charged exceeds the rate determined pursuant to section

502(5)(E)) that the Bank charges to a private borrower pursuant

to section 6(c) of the Federal Financing Bank Act of 1973

shall be considered a cash flow to the Government for the

purposes of determining the cost of the direct loan pursuant

to section 502(5). All such amounts shall be credited to the

appropriate financing account. The Bank is authorized to

require reimbursement from a Federal agency to cover the

administrative expenses of the Bank that are attributable to

the direct loans financed for that agency. All such payments

by an agency shall be considered administrative expenses subject to section 504(g). This subsection shall apply to transactions

related to direct loan obligations or loan guarantee commitments made on or after October 1, 1991’’.

(2) In subsection (c), by striking ‘‘supercede’’ and inserting

‘‘supersede’’.

(3) By amending subsection (d) to read as follows:

‘‘(d) AUTHORIZATION FOR LIQUIDATING ACCOUNTS.—(1) Amounts

in liquidating accounts shall be available only for payments resulting from direct loan obligations or loan guarantee commitments

made prior to October 1, 1991, for—

‘‘(A) interest payments and principal repayments to the

Treasury or the Federal Financing Bank for amounts borrowed;

‘‘(B) disbursements of loans;

‘‘(C) default and other guarantee claim payments;

‘‘(D) interest supplement payments;
H. R. 2015—445

‘‘(E) payments for the costs of foreclosing, managing, and

selling collateral that are capitalized or routinely deducted

from the proceeds of sales;

‘‘(F) payments to financing accounts when required for

modifications;

‘‘(G) administrative expenses, if—

‘‘(i) amounts credited to the liquidating account would

have been available for administrative expenses under a

provision of law in effect prior to October 1, 1991; and

‘‘(ii) no direct loan obligation or loan guarantee commitment has been made, or any modification of a direct loan

or loan guarantee has been made, since September 30,

1991; or

‘‘(H) such other payments as are necessary for the liquidation of such direct loan obligations and loan guarantee commitments.

‘‘(2) Amounts credited to liquidating accounts in any year shall

be available only for payments required in that year. Any unobligated balances in liquidating accounts at the end of a fiscal year

shall be transferred to miscellaneous receipts as soon as practicable

after the end of the fiscal year.

‘‘(3) If funds in liquidating accounts are insufficient to satisfy

obligations and commitments of such accounts, there is hereby

provided permanent, indefinite authority to make any payments

required to be made on such obligations and commitments.’’.

(d) SECTION 506.—Section 506 of the Federal Credit Reform

Act of 1990 is amended—

(1) by striking ‘‘(a) IN GENERAL.—’’;

(2) by striking ‘‘(1)’’ and inserting the following:

‘‘(a) IN GENERAL.—’’;

(3) by striking ‘‘(2) The’’ and inserting the following:

‘‘(b) STUDY.—The’’;

(4) by striking ‘‘(3)’’ and inserting the following:

‘‘(c) ACCESS TO DATA.—’’; and

(5) in subsection (c) (as redesignated) by striking ‘‘paragraph (2)’’ and inserting ‘‘subsection (b)’’.

SEC. 10118. REPEAL OF TITLE VI.

(a) REPEALER.—Title VI of the Congressional Budget Act of

1974 is repealed.

(b) CONFORMING AMENDMENTS.—(1) The items relating to title

VI of the table of contents set forth in section 1(b) of the Congressional Budget and Impoundment Control Act of 1974 are repealed.

(2) Clause 4(h) of rule X of the Rules of the House of Representatives is amended by striking ‘‘section 302 or section 602 (in the

case of fiscal years 1991 through 1995)’’ and inserting ‘‘section

302’’.

SEC. 10119. AMENDMENTS TO SECTION 904.

(a) CONFORMING AMENDMENT.—Section 904(a) of the Congressional Budget Act of 1974 is amended by striking ‘‘(except section

905)’’ and by striking ‘‘V, and VI (except section 601(a))’’ and inserting ‘‘and V’’.

(b) WAIVERS.—Section 904(c) of the Congressional Budget Act

of 1974 is amended to read as follows:

‘‘(c) WAIVERS.—

‘‘(1) PERMANENT.—Sections 305(b)(2), 305(c)(4), 306,

310(d)(2), 313, 904(c), and 904(d) of this Act may be waived
H. R. 2015—446

or suspended in the Senate only by the affirmative vote of

three-fifths of the Members, duly chosen and sworn.

‘‘(2) TEMPORARY.—Sections 301(i), 302(c), 302(f), 310(g),

311(a), 312(b), and 312(c) of this Act and sections 258(a)(4)(C),

258A(b)(3)(C)(I), 258B(f)(1), 258B(h)(1), 258(h)(3), 258C(a)(5),

and 258C(b)(1) of the Balanced Budget and Emergency Deficit

Control Act of 1985 may be waived or suspended in the Senate

only by the affirmative vote of three-fifths of the Members,

duly chosen and sworn.’’.

(c) APPEALS.—Section 904(d) of the Congressional Budget Act

of 1974 is amended to read as follows:

‘‘(d) APPEALS.—

‘‘(1) PROCEDURE.—Appeals in the Senate from the decisions

of the Chair relating to any provision of title III or IV or

section 1017 shall, except as otherwise provided therein, be

limited to 1 hour, to be equally divided between, and controlled

by, the mover and the manager of the resolution, concurrent

resolution, reconciliation bill, or rescission bill, as the case

may be.

‘‘(2) PERMANENT.—An affirmative vote of three-fifths of the

Members, duly chosen and sworn, shall be required in the

Senate to sustain an appeal of the ruling of the Chair on

a point of order raised under sections 305(b)(2), 305(c)(4), 306,

310(d)(2), 313, 904(c), and 904(d) of this Act.

‘‘(3) TEMPORARY.—An affirmative vote of three-fifths of the

Members, duly chosen and sworn, shall be required in the

Senate to sustain an appeal of the ruling of the Chair on

a point of order raised under sections 301(i), 302(c), 302(f),

310(g), 311(a), 312(b), and 312(c) of this Act and sections

258(a)(4)(C), 258A(b)(3)(C)(I), 258B(f)(1), 258B(h)(1), 258(h)(3),

258C(a)(5), and 258C(b)(1) of the Balanced Budget and Emergency Deficit Control Act of 1985.’’.

(d) EXPIRATION OF SUPERMAJORITY VOTING REQUIREMENTS.—

Section 904 of the Congressional Budget Act of 1974 is amended

by adding at the end the following:

‘‘(e) EXPIRATION OF CERTAIN SUPERMAJORITY VOTING REQUIREMENTS.—Subsections (c)(2) and (d)(3) shall expire on September

30, 2002.’’.

SEC. 10120. REPEAL OF SECTIONS 905 AND 906.

(a) REPEALER.—Sections 905 and 906 of the Congressional

Budget Act of 1974 are repealed.

(b) CONFORMING AMENDMENTS.—The table of contents set forth

in section 1(b) of the Congressional Budget and Impoundment Control Act of 1974 is amended by striking the items relating to

sections 905 and 906.

SEC. 10121. AMENDMENTS TO SECTIONS 1022 AND 1024.

(a) SECTION 1022.—Section 1022(b)(1)(F) of the Congressional

Budget and Impoundment Control Act of 1974 is amended by striking ‘‘section 601’’ and inserting ‘‘section 251(c) of the Balanced

Budget and Emergency Deficit Control Act of 1985’’.

(b) SECTION 1024.—Section 1024(a)(1)(B) of the Congressional

Budget and Impoundment Control Act of 1974 is amended by striking ‘‘section 601(a)(2)’’ and inserting ‘‘section 251(c) of the Balanced

Budget and Emergency Deficit Control Act of 1985’’.
H. R. 2015—447

SEC. 10122. AMENDMENT TO SECTION 1026.

Section 1026(7)(A)(iv) of the Congressional Budget and

Impoundment Control Act of 1974 is amended by striking ‘‘; and’’

and inserting ‘‘; or’’.

SEC. 10123. SENATE TASK FORCE ON CONSIDERATION OF BUDGET

MEASURES.

(a) APPOINTMENT OF MEMBERS.—The Majority Leader and

Minority Leader of the Senate shall each appoint 3 Senators to

serve on a bipartisan task force to study the floor procedures

for the consideration of budget resolutions and reconciliation bills

in the Senate as provided in sections 305(b) and 310(e) of the

Congressional Budget Act of 1974.

(b) REPORT OF THE TASK FORCE.—The task force shall submit

its report to the Senate not later than October 8, 1997.

Subtitle B—Amendments to the Balanced

Budget and Emergency Deficit Control

Act of 1985

SEC. 10201. PURPOSE.

The purpose of this subtitle is to extend discretionary spending

limits and pay-as-you-go requirements.

SEC. 10202. GENERAL STATEMENT AND DEFINITIONS.

(a) GENERAL STATEMENT.—Section 250(b) of the Balanced

Budget and Emergency Deficit Control Act of 1985 is amended

by striking the first 2 sentences and inserting the following: ‘‘This

part provides for budget enforcement as called for in House Concurrent Resolution 84 (105th Congress, 1st session).’’.

(b) DEFINITIONS.—Section 250(c) of the Balanced Budget and

Emergency Deficit Control Act of 1985 is amended—

(1) in paragraph (1)—

(A) by striking ‘‘(but including’’ through ‘‘amount’ ’’;

and

(B) by striking ‘‘section 601 of that Act as adjusted

under sections 251 and 253’’ and inserting ‘‘section 251’’;

(2) by striking paragraph (4) and inserting the following:

‘‘(4) The term ‘category’ means the subsets of discretionary

appropriations in section 251(c). Discretionary appropriations

in each of the categories shall be those designated in the

joint explanatory statement accompanying the conference report

on the Balanced Budget Act of 1997. New accounts or activities

shall be categorized only after consultation with the committees

on Appropriations and the Budget of the House of Representatives and the Senate and that consultation shall, to the extent

practicable, include written communication to such committees

that affords such committees the opportunity to comment before

official action is taken with respect to new accounts or activities.’’;

(3) by striking paragraph (6) and inserting the following:

‘‘(6) The term ‘budgetary resources’ means new budget

authority, unobligated balances, direct spending authority, and

obligation limitations.’’;
H. R. 2015—448

(4) in paragraph (9), by striking ‘‘submission of the fiscal

year 1992 budget that are not included with a budget submission’’ and inserting ‘‘that budget submission that are not

included with it’’;

(5) in paragraph (14), by inserting ‘‘first 4’’ before ‘‘fiscal

years’’ and by striking ‘‘through fiscal year 1995’’;

(6) by striking paragraphs (17) and (20) and by redesignating paragraphs (18), (19), and (21) as paragraphs (17), (18),

and (19), respectively;

(7) in paragraph (17) (as redesignated), by striking ‘‘Omnibus Budget Reconciliation Act of 1990’’ and inserting ‘‘Balanced

Budget Act of 1997’’;

(8) in paragraph (18) (as redesignated), by striking all

after ‘‘expenses’’ and inserting ‘‘the Federal deposit insurance

agencies, and other Federal agencies supervising insured

depository institutions, resulting from full funding of, and

continuation of, the deposit insurance guarantee commitment

in effect under current estimates.’’; and

(9) by striking paragraph (19) (as redesignated) and inserting the following:

‘‘(19) The term ‘asset sale’ means the sale to the public

of any asset (except for those assets covered by title V of

the Congressional Budget Act of 1974), whether physical or

financial, owned in whole or in part by the United States.’’.

SEC. 10203. ENFORCING DISCRETIONARY SPENDING LIMITS.

(a) EXTENSION THROUGH FISCAL YEAR 2002.—Section 251 of

the Balanced Budget and Emergency Deficit Control Act of 1985

is amended—

(1) in the heading of subsection (a), by striking ‘‘Fiscal

Years 1991–1998’’;

(2) in subsection (a)(3), by striking ‘‘(h)’’ both places it

appears and inserting ‘‘(f)’’;

(3) by striking subsection (a)(7) and inserting the following:

‘‘(7) ESTIMATES.— ‘‘(A) CBO ESTIMATES.—As soon as practicable after

Congress completes action on any discretionary appropriation, CBO, after consultation with the Committees on the

Budget of the House of Representatives and the Senate,

shall provide OMB with an estimate of the amount of

discretionary new budget authority and outlays for the

current year (if any) and the budget year provided by

that legislation.

‘‘(B) OMB ESTIMATES AND EXPLANATION OF DIF- FERENCES.—Not later than 7 calendar days (excluding

Saturdays, Sundays, and legal holidays) after the date

of enactment of any discretionary appropriation, OMB shall

transmit a report to the House of Representatives and

to the Senate containing the CBO estimate of that legislation, an OMB estimate of the amount of discretionary new

budget authority and outlays for the current year (if any)

and the budget year provided by that legislation, and an

explanation of any difference between the 2 estimates.

If during the preparation of the report OMB determines

that there is a significant difference between OMB and

CBO, OMB shall consult with the Committees on the

Budget of the House of Representatives and the Senate
H. R. 2015—449

regarding that difference and that consultation shall

include, to extent practicable, written communication to

those committees that affords such committees the opportunity to comment before the issuance of the report.

‘‘(C) ASSUMPTIONS AND GUIDELINES.—OMB estimates

under this paragraph shall be made using current economic

and technical assumptions. OMB shall use the OMB estimates transmitted to the Congress under this paragraph.

OMB and CBO shall prepare estimates under this paragraph in conformance with scorekeeping guidelines determined after consultation among the House and Senate

Committees on the Budget, CBO, and OMB.

‘‘(D) ANNUAL APPROPRIATIONS.—For purposes of this

paragraph, amounts provided by annual appropriations

shall include any new budget authority and outlays for

the current year (if any) and the budget year in accounts

for which funding is provided in that legislation that result

from previously enacted legislation.’’;

(4) by striking subsection (b) and inserting the following:

‘‘(b) ADJUSTMENTS TO DISCRETIONARY SPENDING LIMITS.—

‘‘(1) PREVIEW REPORT.—When the President submits the

budget under section 1105 of title 31, United States Code,

OMB shall calculate and the budget shall include adjustments

to discretionary spending limits (and those limits as cumulatively adjusted) for the budget year and each outyear to reflect

changes in concepts and definitions. Such changes shall equal

the baseline levels of new budget authority and outlays using

up-to-date concepts and definitions minus those levels using

the concepts and definitions in effect before such changes. Such

changes may only be made after consultation with the committees on Appropriations and the Budget of the House of Representatives and the Senate and that consultation shall include

written communication to such committees that affords such

committees the opportunity to comment before official action

is taken with respect to such changes.

‘‘(2) SEQUESTRATION REPORTS.—When OMB submits a

sequestration report under section 254(e), (f), or (g) for a fiscal

year, OMB shall calculate, and the sequestration report and

subsequent budgets submitted by the President under section

1105(a) of title 31, United States Code, shall include adjustments to discretionary spending limits (and those limits as

adjusted) for the fiscal year and each succeeding year through

2002, as follows:

‘‘(A) EMERGENCY APPROPRIATIONS.—If, for any fiscal

year, appropriations for discretionary accounts are enacted

that the President designates as emergency requirements

and that the Congress so designates in statute, the adjustment shall be the total of such appropriations in discretionary accounts designated as emergency requirements

and the outlays flowing in all fiscal years from such appropriations. This subparagraph shall not apply to appropriations to cover agricultural crop disaster assistance.

‘‘(B) SPECIAL OUTLAY ALLOWANCE.—If, in any fiscal

year, outlays for a category exceed the discretionary spending limit for that category but new budget authority does

not exceed its limit for that category (after application

of the first step of a sequestration described in subsection
H. R. 2015—450

(a)(2), if necessary), the adjustment in outlays for a fiscal

year is the amount of the excess but not to exceed 0.5

percent of the sum of the adjusted discretionary spending

limits on outlays for that fiscal year.

‘‘(C) CONTINUING DISABILITY REVIEWS.—(i) If a bill or

joint resolution making appropriations for a fiscal year

is enacted that specifies an amount for continuing disability

reviews under the heading ‘Limitation on Administrative

Expenses’ for the Social Security Administration, the

adjustments for that fiscal year shall be the additional

new budget authority provided in that Act for such reviews

for that fiscal year and the additional outlays flowing from

such amounts, but shall not exceed—

‘‘(I) for fiscal year 1998, $290,000,000 in additional

new budget authority and $338,000,000 in additional

outlays;

‘‘(II) for fiscal year 1999, $520,000,000 in additional

new budget authority and $520,000,000 in additional

outlays;

‘‘(III) for fiscal year 2000, $520,000,000 in additional new budget authority and $520,000,000 in additional outlays;

‘‘(IV) for fiscal year 2001, $520,000,000 in additional new budget authority and $520,000,000 in additional outlays; and

‘‘(V) for fiscal year 2002, $520,000,000 in additional

new budget authority and $520,000,000 in additional

outlays.

‘‘(ii) As used in this subparagraph—

‘‘(I) the term ‘continuing disability reviews’ means

reviews or redeterminations as defined under section

201(g)(1)(A) of the Social Security Act and reviews

and redeterminations authorized under section 211 of

the Personal Responsibility and Work Opportunity Reconciliation Act of 1996;

‘‘(II) the term ‘additional new budget authority’

means the amount provided for a fiscal year, in excess

of $200,000,000, in an appropriations Act and specified

to pay for the costs of continuing disability reviews

under the heading ‘Limitation on Administrative

Expenses’ for the Social Security Administration; and

‘‘(III) the term ‘additional outlays’ means outlays,

in excess of $200,000,000 in a fiscal year, flowing from

the amounts specified for continuing disability reviews

under the heading ‘Limitation on Administrative

Expenses’ for the Social Security Administration,

including outlays in that fiscal year flowing from

amounts specified in Acts enacted for prior fiscal years

(but not before 1996).

‘‘(D) ALLOWANCE FOR IMF.—If an appropriation bill or

joint resolution is enacted for a fiscal year through 2002

that includes an appropriation with respect to clause (i)

or (ii), the adjustment shall be the amount of budget

authority in the measure that is the dollar equivalent

of the Special Drawing Rights with respect to—
H. R. 2015—451

‘‘(i) an increase in the United States quota as

part of the International Monetary Fund Eleventh General Review of Quotas (United States Quota); or

‘‘(ii) any increase in the maximum amount available to the Secretary of the Treasury pursuant to section 17 of the Bretton Woods Agreements Act, as

amended from time to time (New Arrangements to

Borrow).

‘‘(E) ALLOWANCE FOR INTERNATIONAL ARREARAGES.—

‘‘(i) ADJUSTMENTS.—If an appropriation bill or joint

resolution is enacted for fiscal year 1998, 1999, or

2000 that includes an appropriation for arrearages for

international organizations, international peacekeeping, and multilateral development banks for that fiscal

year, the adjustment shall be the amount of budget

authority in that measure and the outlays flowing

in all fiscal years from that budget authority.

‘‘(ii) LIMITATIONS.—The total amount of adjustments made pursuant to this subparagraph for the

period of fiscal years 1998 through 2000 shall not

exceed $1,884,000,000 in budget authority.

‘‘(F) EITC COMPLIANCE INITIATIVE.—If an appropriation

bill or joint resolution is enacted for a fiscal year that

includes an appropriation for an earned income tax credit

compliance initiative, the adjustment shall be the amount

of budget authority in that measure for that initiative

and the outlays flowing in all fiscal years from that budget

authority, but not to exceed— ‘‘(i) with respect to fiscal year 1998, $138,000,000 in new budget authority and $131,000,000 in outlays; ‘‘(ii) with respect to fiscal year 1999, $143,000,000 in new budget authority and $143,000,000 in outlays; ‘‘(iii) with respect to fiscal year 2000, $144,000,000 in new budget authority and $144,000,000 in outlays; ‘‘(iv) with respect to fiscal year 2001, $145,000,000 in new budget authority and $145,000,000 in outlays;

and

‘‘(v) with respect to fiscal year 2002, $146,000,000 in new budget authority and $146,000,000 in outlays.’’.

(b) SHIFTING OF DISCRETIONARY SPENDING LIMITS INTO THE

BALANCED BUDGET AND EMERGENCY DEFICIT CONTROL ACT OF

1985.—Section 251 of the Balanced Budget and Emergency Deficit

Control Act of 1985 is amended by adding at the end the following

new subsection:

‘‘(c) DISCRETIONARY SPENDING LIMIT.—As used in this part,

the term ‘discretionary spending limit’ means—

‘‘(1) with respect to fiscal year 1997, for the discretionary

category, the current adjusted limits of new budget authority

and outlays;

‘‘(2) with respect to fiscal year 1998—

‘‘(A) for the defense category: $269,000,000,000 in new

budget authority and $266,823,000,000 in outlays;

‘‘(B) for the nondefense category: $252,357,000,000 in

new budget authority and $282,853,000,000 in outlays; and

‘‘(C) for the violent crime reduction category:

$5,500,000,000 in new budget authority and $3,592,000,000

in outlays;
H. R. 2015—452

‘‘(3) with respect to fiscal year 1999—

‘‘(A) for the defense category: $271,500,000,000 in new

budget authority and $266,518,000,000 in outlays;

‘‘(B) for the nondefense category: $255,699,000,000 in

new budget authority and $287,850,000,000 in outlays; and

‘‘(C) for the violent crime reduction category:

$5,800,000,000 in new budget authority and $4,953,000,000

in outlays;

‘‘(4) with respect to fiscal year 2000—

‘‘(A) for the discretionary category: $532,693,000,000

in new budget authority and $558,711,000,000 in outlays;

and

‘‘(B) for the violent crime reduction category:

$4,500,000,000 in new budget authority and $5,554,000,000

in outlays;

‘‘(5) with respect to fiscal year 2001, for the discretionary

category: $542,032,000,000 in new budget authority and

$564,396,000,000 in outlays; and

‘‘(6) with respect to fiscal year 2002, for the discretionary

category: $551,074,000,000 in new budget authority and

$560,799,000,000 in outlays;

as adjusted in strict conformance with subsection (b).’’.

(c) REPEAL OF DUPLICATIVE PROVISIONS.—Sections 201, 202,

204(b), 206, and 211 of House Concurrent Resolution 84 (105th

Congress) are repealed.

SEC. 10204. VIOLENT CRIME REDUCTION SPENDING.

(a) SEQUESTRATION REGARDING VIOLENT CRIME REDUCTION

SPENDING.—

(1) REPEAL.—Section 251A of the Balanced Budget and

Emergency Deficit Control Act of 1985 is repealed.

(2) TABLE OF CONTENTS.—The item relating to section 251A

in the table contents set forth in section 250(a) of the Balanced

Budget and Emergency Deficit Control Act of 1985 is repealed.

(b) CONFORMING AMENDMENT.—Section 310002 of Public Law

103–322 (42 U.S.C. 14212) is repealed.

SEC. 10205. ENFORCING PAY-AS-YOU-GO.

Section 252 of the Balanced Budget and Emergency Deficit

Control Act of 1985 is amended—

(1) by striking subsections (a) and (b) and inserting the

following:

‘‘(a) PURPOSE.—The purpose of this section is to assure that

any legislation enacted before October 1, 2002, affecting direct

spending or receipts that increases the deficit will trigger an offsetting sequestration.

‘‘(b) SEQUESTRATION.—

‘‘(1) TIMING.—Not later than 15 calendar days after the

date Congress adjourns to end a session and on the same

day as a sequestration (if any) under section 251 or 253, there

shall be a sequestration to offset the amount of any net deficit

increase caused by all direct spending and receipts legislation

enacted before October 1, 2002, as calculated under paragraph

(2).

‘‘(2) CALCULATION OF DEFICIT INCREASE.—OMB shall calculate the amount of deficit increase or decrease by adding—
H. R. 2015—453

‘‘(A) all OMB estimates for the budget year of direct

spending and receipts legislation transmitted under subsection (d);

‘‘(B) the estimated amount of savings in direct spending

programs applicable to budget year resulting from the prior

year’s sequestration under this section or section 253, if

any, as published in OMB’s final sequestration report for

that prior year; and

‘‘(C) any net deficit increase or decrease in the current

year resulting from all OMB estimates for the current

year of direct spending and receipts legislation transmitted

under subsection (d) that were not reflected in the final

OMB sequestration report for the current year.’’;

(2) by amending subsection (c)(1)(B), by inserting ‘‘and

direct’’ after ‘‘guaranteed’’;

(3) by amending subsection (d) to read as follows:

‘‘(d) ESTIMATES.—

‘‘(1) CBO ESTIMATES.—As soon as practicable after Congress

completes action on any direct spending or receipts legislation,

CBO shall provide an estimate to OMB of that legislation.

‘‘(2) OMB ESTIMATES.—Not later than 7 calendar days

(excluding Saturdays, Sundays, and legal holidays) after the

date of enactment of any direct spending or receipts legislation,

OMB shall transmit a report to the House of Representatives

and to the Senate containing—

‘‘(A) the CBO estimate of that legislation;

‘‘(B) an OMB estimate of that legislation using current

economic and technical assumptions; and

‘‘(C) an explanation of any difference between the 2

estimates.

‘‘(3) SIGNIFICANT DIFFERENCES.—If during the preparation

of the report under paragraph (2) OMB determines that there

is a significant difference between the OMB and CBO estimates,

OMB shall consult with the Committees on the Budget of

the House of Representatives and the Senate regarding that

difference and that consultation, to the extent practicable, shall

include written communication to such committees that affords

such committees the opportunity to comment before the issuance of that report.

‘‘(4) SCOPE OF ESTIMATES.—The estimates under this section

shall include the amount of change in outlays or receipts for

the current year (if applicable), the budget year, and each

outyear excluding any amounts resulting from—

‘‘(A) full funding of, and continuation of, the deposit

insurance guarantee commitment in effect under current

estimates; and

‘‘(B) emergency provisions as designated under subsection (e).

‘‘(5) SCOREKEEPING GUIDELINES.—OMB and CBO, after consultation with each other and the Committees on the Budget

of the House of Representatives and the Senate, shall—

‘‘(A) determine common scorekeeping guidelines; and

‘‘(B) in conformance with such guidelines, prepare estimates under this section.’’; and

(4) in subsection (e), by striking ‘‘, for any fiscal year

from 1991 through 1998,’’ and by striking ‘‘through 1995’’.
H. R. 2015—454

SEC. 10206. REPORTS AND ORDERS.

Section 254 of the Balanced Budget and Emergency Deficit

Control Act of 1985 is amended—

(1) by striking subsection (c) and redesignating subsections

(d) through (k) as (c) through (j), respectively;

(2) in subsection (c) (as redesignated), by striking ‘‘1998’’

and inserting ‘‘2002’’;

(3) in subsection (d) (as redesignated), by striking ‘‘(h)’’

and inserting ‘‘(f)’’;

(4)(A) in subsection (f)(2)(A) (as redesignated), by striking

‘‘1998’’ and inserting ‘‘2002’’;

(B) in subsection (f)(3) (as redesignated), by striking

‘‘through 1998’’; and

(C) by striking subsection (f)(4) (as redesignated) and by

redesignating paragraphs (5) and (6) of that subsection as paragraphs (4) and (5), respectively; and

(5) in subsection (g) (as redesignated), by striking ‘‘(g)’’

each place it appears and inserting ‘‘(f)’’.

SEC. 10207. EXEMPT PROGRAMS AND ACTIVITIES.

(a) VETERANS PROGRAMS.—Section 255(b) of the Balanced

Budget and Emergency Deficit Control Act of 1985 is amended

as follows:

(1) In the item relating to Veterans Insurance and Indemnity, strike ‘‘Indemnity’’ and insert ‘‘Indemnities’’.

(2) In the item relating to Veterans’ Canteen Service

Revolving Fund, strike ‘‘Veterans’ ’’.

(3) In the item relating to Benefits under chapter 21 of

title 38, strike ‘‘(36–0137–0–1–702)’’ and insert ‘‘(36–0120–0–

1–701)’’.

(4) In the item relating to Veterans’ compensation, strike

‘‘Veterans’ compensation’’ and insert ‘‘Compensation’’.

(5) In the item relating to Veterans’ pensions, strike ‘‘Veterans’ pensions’’ and insert ‘‘Pensions’’.

(6) After the last item, insert the following new items:

‘‘Benefits under chapter 35 of title 38, United States Code,

related to educational assistance for survivors and dependents

of certain veterans with service-connected disabilities (36–0137–

0–1–702);

‘‘Assistance and services under chapter 31 of title 38,

United States Code, relating to training and rehabilitation for

certain veterans with service-connected disabilities (36–0137–

0–1–702);

‘‘Benefits under subchapters I, II, and III of chapter 37

of title 38, United States Code, relating to housing loans for

certain veterans and for the spouses and surviving spouses

of certain veterans Guaranty and Indemnity Program Account

(36–1119–0–1–704);

‘‘Loan Guaranty Program Account (36–1025–0–1–704); and

‘‘Direct Loan Program Account (36–1024–0–1–704).’’.

(b) CERTAIN PROGRAM BASES.—Section 255(f) of the Balanced

Budget and Emergency Deficit Control Act of 1985 is amended

to read as follows:

‘‘(f) OPTIONAL EXEMPTION OF MILITARY PERSONNEL.—
H. R. 2015—455

‘‘(1) IN GENERAL.—The President may, with respect to any

military personnel account, exempt that account from sequestration or provide for a lower uniform percentage reduction

than would otherwise apply.

‘‘(2) LIMITATION.—The President may not use the authority

provided by paragraph (1) unless the President notifies the

Congress of the manner in which such authority will be exercised on or before the date specified in section 254(a) for the

budget year.’’.

(c) OTHER PROGRAMS AND ACTIVITIES.—(1) Section 255(g)(1)(A)

of the Balanced Budget Emergency Deficit Control Act of 1985

is amended as follows:

(A) After the first item, insert the following new item:

‘‘Activities financed by voluntary payments to the

Government for goods or services to be provided for such

payments;’’.

(B) Strike ‘‘Thrift Savings Fund (26–8141–0–7–602);’’.

(C) In the first item relating to the Bureau of Indian

Affairs, insert ‘‘Indian land and water claims settlements and’’

after the comma.

(D) In the second item relating to the Bureau of Indian

Affairs, strike ‘‘miscellaneous’’ and insert ‘‘Miscellaneous’’ and

strike ‘‘, tribal trust funds’’.

(E) Strike ‘‘Claims, defense (97–0102–0–1–051);’’.

(F) In the item relating to Claims, judgments, and relief

acts, strike ‘‘806’’ and insert ‘‘808’’.

(G) Strike ‘‘Coinage profit fund (20–5811–0–2–803);’’.

(H) Insert ‘‘Compact of Free Association (14–0415–0–1–

808);’’ after the item relating to the Claims, judgments, and

relief acts.

(I) Insert ‘‘Conservation Reserve Program (12–2319–0–1–

302);’’ after the item relating to the Compensation of the President.

(J) In the item relating to the Customs Service, strike

‘‘852’’ and insert ‘‘806’’.

(K) In the item relating to the Comptroller of the Currency,

insert ‘‘, Assessment funds (20–8413–0–8–373)’’ before the semicolon.

(L) Strike ‘‘Director of the Office of Thrift Supervision;’’.

(M) Strike ‘‘Eastern Indian land claims settlement fund

(14–2202–0–1–806);’’.

(N) After the item relating to the Exchange stabilization

fund, insert the following new items:

‘‘Farm Credit Administration, Limitation on Administrative Expenses (78–4131–0–3–351);

‘‘Farm Credit System Financial Assistance Corporation, interest payment (20–1850–0–1–908);’’.

(O) Strike ‘‘Federal Deposit Insurance Corporation;’’.

(P) In the first item relating to the Federal Deposit Insurance Corporation, insert ‘‘(51–4064–0–3–373)’’ before the semicolon.

(Q) In the second item relating to the Federal Deposit

Insurance Corporation, insert ‘‘(51–4065–0–3–373)’’ before the

semicolon.

(R) In the third item relating to the Federal Deposit Insurance Corporation, insert ‘‘(51–4066–0–3–373)’’ before the semicolon.
H. R. 2015—456

(S) In the item relating to the Federal Housing Finance

Board, insert ‘‘(95–4039–0–3–371)’’ before the semicolon.

(T) In the item relating to the Federal payment to the

railroad retirement account, strike ‘‘account’’ and insert

‘‘accounts’’.

(U) In the item relating to the health professions graduate

student loan insurance fund, insert ‘‘program account’’ after

‘‘fund’’ and strike ‘‘(Health Education Assistance Loan Program)

(75–4305–0–3–553)’’ and insert ‘‘(75–0340–0–1–552)’’.

(V) In the item relating to Higher education facilities, strike

‘‘and insurance’’.

(W) In the item relating to Internal revenue collections

for Puerto Rico, strike ‘‘852’’ and insert ‘‘806’’.

(X) Amend the item relating to the Panama Canal Commission to read as follows:

‘‘Panama Canal Commission, Panama Canal Revolving

Fund (95–4061–0–3–403);’’.

(Y) In the item relating to the Medical facilities guarantee

and loan fund, strike ‘‘(75–4430–0–3–551)’’ and insert ‘‘(75–

9931–0–3–550)’’.

(Z) In the first item relating to the National Credit Union

Administration, insert ‘‘operating fund (25–4056–0–3–373)’’

before the semicolon.

(AA) In the second item relating to the National Credit

Union Administration, strike ‘‘central’’ and insert ‘‘Central’’ and

insert ‘‘(25–4470–0–3–373)’’ before the semicolon.

(BB) In the third item relating to the National Credit

Union Administration, strike ‘‘credit’’ and insert ‘‘Credit’’ and

insert ‘‘(25–4468–0–3–373)’’ before the semicolon.

(CC) After the third item relating to the National Credit

Union Administration, insert the following new item:

‘‘Office of Thrift Supervision (20–4108–0–3–373);’’.

(DD) In the item relating to Payments to health care trust

funds, strike ‘‘572’’ and insert ‘‘571’’.

(EE) Strike ‘‘Compact of Free Association, economic assistance pursuant to Public Law 99–658 (14–0415–0–1–806);’’.

(FF) In the item relating to Payments to social security

trust funds, strike ‘‘571’’ and insert ‘‘651’’.

(GG) Strike ‘‘Payments to state and local government fiscal

assistance trust fund (20–2111–0–1–851);’’.

(HH) In the item relating to Payments to the United States

territories, strike ‘‘852’’ and insert ‘‘806’’.

(II) Strike ‘‘Resolution Funding Corporation;’’.

(JJ) In the item relating to the Resolution Trust Corporation, insert ‘‘Revolving Fund (22–4055–0–3–373)’’ before the

semicolon.

(KK) After the item relating to the Tennessee Valley

Authority funds, insert the following new items:

‘‘Thrift Savings Fund;

‘‘United States Enrichment Corporation (95–4054–0–

3–271);

‘‘Vaccine Injury Compensation (75–0320–0–1–551);

‘‘Vaccine Injury Compensation Program Trust Fund

(20–8175–0–7–551);’’.

(2) Section 255(g)(1)(B) of the Balanced Budget and Emergency

Deficit Control Act of 1985 is amended as follows:
H. R. 2015—457

(A) Strike ‘‘The following budget’’ and insert ‘‘The following

Federal retirement and disability’’.

(B) In the item relating to Black lung benefits, strike

‘‘lung benefits’’ and insert ‘‘Lung Disability Trust Fund’’.

(C) In the item relating to the Court of Federal Claims

Court Judges’ Retirement Fund, strike ‘‘Court of Federal’’.

(D) In the item relating to Longshoremen’s compensation

benefits, insert ‘‘Special workers compensation expenses,’’ before

‘‘Longshoremen’s’’.

(E) In the item relating to Railroad retirement tier II,

strike ‘‘retirement tier II’’ and insert ‘‘Industry Pension Fund’’.

(3) Section 255(g)(2) of the Balanced Budget and Emergency

Deficit Control Act of 1985 is amended as follows:

(A) Strike the following items:

‘‘Agency for International Development, Housing, and

other credit guarantee programs (72–4340–0–3–151);

‘‘Agricultural credit insurance fund (12–4140–0–1–

351);’’.

(B) In the item relating to Check forgery, strike ‘‘Check’’

and insert ‘‘United States Treasury check’’.

(C) Strike ‘‘Community development grant loan guarantees

(86–0162–0–1–451);’’.

(D) After the item relating to the United States Treasury

Check forgery insurance fund, insert the following new item:

‘‘Credit liquidating accounts;’’.

(E) Strike the following items:

‘‘Credit union share insurance fund (25–4468–0–3–

371);’’.

‘‘Economic development revolving fund (13–4406–0–3–

452);’’.

‘‘Export-Import Bank of the United States, Limitation

of program activity (83–4027–0–3–155);’’.

‘‘Federal Deposit Insurance Corporation (51–8419–0–

8–371);’’.

‘‘Federal Housing Administration fund (86–4070–0–3–

371);’’.

‘‘Federal ship financing fund (69–4301–0–3–403);’’.

‘‘Federal ship financing fund, fishing vessels (13–4417–

0–3–376);’’.

‘‘Government National Mortgage Association, Guarantees of mortgage-backed securities (86–4238–0–3–371);’’.

‘‘Health education loans (75–4307–0–3–553);’’.

‘‘Indian loan guarantee and insurance fund (14–4410–

0–3–452);’’.

‘‘Railroad rehabilitation and improvement financing

fund (69–4411–0–3–401);’’.

‘‘Rural development insurance fund (12–4155–0–3–

452);’’.

‘‘Rural electric and telephone revolving fund (12–4230–

8–3–271);’’.

‘‘Rural housing insurance fund (12–4141–0–3–371);’’.

‘‘Small Business Administration, Business loan and

investment fund (73–4154–0–3–376);’’.

‘‘Small Business Administration, Lease guarantees

revolving fund (73–4157–0–3–376);’’.
H. R. 2015—458

‘‘Small Business Administration, Pollution control

equipment contract guarantee revolving fund (73–4147–

0–3–376);’’.

‘‘Small Business Administration, Surety bond guarantees revolving fund (73–4156–0–3–376);’’.

‘‘Department of Veterans Affairs Loan guaranty revolving fund (36–4025–0–3–704);’’.

(d) LOW-INCOME PROGRAMS.—Section 255(h) of the Balanced

Budget and Emergency Deficit Control Act of 1985 is amended

as follows:

(1) Amend the item relating to Child nutrition to read

as follows:

‘‘Child nutrition programs (with the exception of special

milk programs) (12–3539–0–1–605);’’.

(2) After the second item insert the following new items:

‘‘Temporary assistance for needy families (75–1552–0–1–

609);

‘‘Contingency fund (75–1522–0–1–609);’’

‘‘Child care entitlement to States (75–1550–0–1–609);

(3) Amend the item relating to Women, infants, and children program to read as follows:

‘‘Special supplemental nutrition program for women,

infants, and children (WIC) (12–3510–0–1–605);’’.

(4) After the last item add the following new item:

‘‘Family support payments to States (75–1501–0–1–609);’’.

(e) IDENTIFICATION OF PROGRAMS.—Section 255(i) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended to read as follows:

‘‘(i) IDENTIFICATION OF PROGRAMS.—For purposes of subsections

(b), (g), and (h), each account is identified by the designated budget

account identification code number set forth in the Budget of the

United States Government 1998–Appendix, and an activity within

an account is designated by the name of the activity and the

identification code number of the account.’’.

(f) OPTIONAL EXEMPTION OF MILITARY PERSONNEL.—Section

255(h) of the Balanced Budget and Emergency Deficit Control Act

of 1985 (relating to optional exemption of military personnel) is

repealed.

SEC. 10208. GENERAL AND SPECIAL SEQUESTRATION RULES.

(a) HEADINGS.—

(1) SECTION.—The section heading of section 256 of the

Balanced Budget and Emergency Deficit Control Act of 1985

is amended by striking ‘‘EXCEPTIONS, LIMITATIONS, AND SPECIAL

RULES’’ and inserting ‘‘GENERAL AND SPECIAL SEQUESTRATION

RULES’’.

(2) TABLE OF CONTENTS.—The item relating to section 256

in the table contents set forth in section 250(a) of the Balanced

Budget and Emergency Deficit Control Act of 1985 is amended

to read as follows:

‘‘SEC. 256. GENERAL AND SPECIAL SEQUESTRATION RULES.’’.

(b) AUTOMATIC SPENDING INCREASES.—Section 256(a) of the

Balanced Budget and Emergency Deficit Control Act of 1985 is

amended by striking paragraph (1) and redesignating paragraphs

(2) and (3) as paragraphs (1) and (2), respectively.
H. R. 2015—459

(c) GUARANTEED AND DIRECT STUDENT LOAN PROGRAMS.—Section 256(b) of the Balanced Budget and Emergency Deficit Control

Act of 1985 is amended to read as follows:

‘‘(b) STUDENT LOANS.—For all student loans under part B or

D of title IV of the Higher Education Act of 1965 made during

the period when a sequestration order under section 254 is in

effect as required by section 252 or 253, origination fees under

sections 438(c)(2) and 455(c) of that Act shall each be increased

by 0.50 percentage point.’’.

(d) HEALTH CENTERS.—Section 256(e)(1) of the Balanced Budget

and Emergency Deficit Control Act of 1985 is amended by striking

the dash and all that follows thereafter and inserting ‘‘2 percent.’’.

(e) TREATMENT OF FEDERAL ADMINISTRATIVE EXPENSES.—Section 256(h) of the Balanced Budget and Emergency Deficit Control

Act of 1985 is amended—

(1) in paragraph (2), by striking ‘‘joint resolution’’ and

inserting ‘‘part’’; and

(2) in paragraph (4), by striking subparagraphs (D) and

(H), by redesignating subparagraphs (E), (F), (G), and (I), as

subparagraphs (D), (E), (F), and (G), respectively, and by adding

at the end the following new subparagraph:

‘‘(H) Farm Credit Administration.’’.

(f) COMMODITY CREDIT CORPORATION.—Section 256(j) of the

Balanced Budget and Emergency Deficit Control Act of 1985 is

amended by striking paragraphs (2) through (5) and inserting the

following:

‘‘(2) REDUCTION IN PAYMENTS MADE UNDER CONTRACTS.—

(A) Loan eligibility under any contract entered into with a

person by the Commodity Credit Corporation prior to the time

an order has been issued under section 254 shall not be reduced

by an order subsequently issued. Subject to subparagraph (B),

after an order is issued under such section for a fiscal year,

any cash payments for loans or loan deficiencies made by

the Commodity Credit Corporation shall be subject to reduction

under the order.

‘‘(B) Each loan contract entered into with producers or

producer cooperatives with respect to a particular crop of a

commodity and subject to reduction under subparagraph (A)

shall be reduced in accordance with the same terms and conditions. If some, but not all, contracts applicable to a crop of

a commodity have been entered into prior to the issuance

of an order under section 254, the order shall provide that

the necessary reduction in payments under contracts applicable

to the commodity be uniformly applied to all contracts for

the next succeeding crop of the commodity, under the authority

provided in paragraph (3).

‘‘(3) DELAYED REDUCTION IN OUTLAYS PERMISSIBLE.—Notwithstanding any other provision of this title, if an order under

section 254 is issued with respect to a fiscal year, any reduction

under the order applicable to contracts described in paragraph

(1) may provide for reductions in outlays for the account

involved to occur in the fiscal year following the fiscal year

to which the order applies.

‘‘(4) UNIFORM PERCENTAGE RATE OF REDUCTION AND OTHER

LIMITATIONS.—All reductions described in paragraph (2) which

are required to be made in connection with an order issued

under section 254 with respect to a fiscal year shall be made
H. R. 2015—460

so as to ensure that outlays for each program, project, activity,

or account involved are reduced by a percentage rate that

is uniform for all such programs, projects, activities, and

accounts, and may not be made so as to achieve a percentage

rate of reduction in any such item exceeding the rate specified

in the order.

‘‘(5) DAIRY PROGRAM.—Notwithstanding any other provision

of this subsection, as the sole means of achieving any reduction

in outlays under the milk price support program, the Secretary

of Agriculture shall provide for a reduction to be made in

the price received by producers for all milk produced in the

United States and marketed by producers for commercial use.

That price reduction (measured in cents per hundred weight

of milk marketed) shall occur under section 201(d)(2)(A) of

the Agricultural Act of 1949 (7 U.S.C. 1446(d)(2)(A)), shall

begin on the day any sequestration order is issued under section

254, and shall not exceed the aggregate amount of the reduction

in outlays under the milk price support program that otherwise

would have been achieved by reducing payments for the purchase of milk or the products of milk under this subsection

during the applicable fiscal year.’’.

(g) EFFECTS OF SEQUESTRATION.—Section 256(k) of the Balanced Budget and Emergency Deficit Control Act of 1985 is amended as follows:

(1) In paragraph (1), strike ‘‘other than a trust or special

fund account’’ and insert ‘‘, except as provided in paragraph

(5)’’ before the period.

(2) Amend paragraph (6) to read as follows:

‘‘(6) Budgetary resources sequestered in revolving, trust,

and special fund accounts and offsetting collections sequestered

in appropriation accounts shall not be available for obligation

during the fiscal year in which the sequestration occurs, but

shall be available in subsequent years to the extent otherwise

provided in law.’’.

SEC. 10209. THE BASELINE.

(a) IN GENERAL.—Section 257 of the Balanced Budget and

Emergency Deficit Control Act of 1985 is amended—

(1) in subsection (b)(2) by amending subparagraph (A) to

read as follows:

‘‘(A)(i) No program established by a law enacted on or

before the date of enactment of the Balanced Budget Act of

1997 with estimated current year outlays greater than

$50,000,000 shall be assumed to expire in the budget year

or the outyears. The scoring of new programs with estimated

outlays greater than $50,000,000 a year shall be based on

scoring by the Committees on Budget or OMB, as applicable.

OMB, CBO, and the Budget Committees shall consult on the

scoring of such programs where there are differenes between

CBO and OMB.

‘‘(ii) On the expiration of the suspension of a provision

of law that is suspended under section 171 of Public Law

104–127 and that authorizes a program with estimated fiscal

year outlays that are greater than $50,000,000, for purposes

of clause (i), the program shall be assumed to continue to

operate in the same manner as the program operated immediately before the expiration of the suspension.’’;
H. R. 2015—461

(2) by adding the end of subsection (b)(2) the following

new subparagraph:

‘‘(D) If any law expires before the budget year or any

outyear, then any program with estimated current year outlays

greater than $50,000,000 that operates under that law shall

be assumed to continue to operate under that law as in effect

immediately before its expiration.’’;

(3) in the second sentence of subsection (c)(5), by striking

‘‘national product fixed-weight price index’’ and inserting

‘‘domestic product chain-type price index’’; and

(4) by striking subsection (e) and inserting the following:

‘‘(e) ASSET SALES.—Amounts realized from the sale of an asset

shall not be included in estimates under section 251, 252, or 253

if that sale would result in a financial cost to the Federal Government as determined pursuant to scorekeeping guidelines.’’.

(b) PRESIDENT’S BUDGET.—Section 1105(a) of title 31, United

States Code, is amended by adding at the end the following:

‘‘(32) a statement of the levels of budget authority and

outlays for each program assumed to be extended in the baseline as provided in section 257(b)(2)(A) and for excise taxes

assumed to be extended under section 257(b)(2)(C) of the Balanced Budget and Emergency Deficit Control Act of 1985.’’.

(c) BUDGETARY TREATMENT OF CERTAIN TRUST FUND OPERATIONS.—Section 710 of the Social Security Act (42 U.S.C. 911)

is amended to read as follows:

‘‘BUDGETARY TREATMENT OF TRUST FUND OPERATIONS

‘‘SEC. 710. (a) The receipts and disbursements of the Federal

Old-Age and Survivors Insurance Trust Fund and the Federal

Disability Insurance Trust Fund and the taxes imposed under sections 1401 and 3101 of the Internal Revenue Code of 1986 shall

not be included in the totals of the budget of the United States

Government as submitted by the President or of the congressional

budget and shall be exempt from any general budget limitation

imposed by statute on expenditures and net lending (budget outlays)

of the United States Government.

‘‘(b) No provision of law enacted after the date of enactment

of the Balanced Budget and Emergency Deficit Control Act of 1985

(other than a provision of an appropriation Act that appropriated

funds authorized under the Social Security Act as in effect on

the date of the enactment of the Balanced Budget and Emergency

Deficit control Act of 1985) may provide for payments from the

general fund of the Treasury to any Trust Fund specified in subsection (a) or for payments from any such Trust Fund to the

general fund of the Treasury.’’.

SEC. 10210. TECHNICAL CORRECTION.

Section 258 of the Balanced Budget and Emergency Deficit

Control Act of 1985, entitled ‘‘Modification of Presidential Order’’,

is repealed.

SEC. 10211. JUDICIAL REVIEW.

Section 274 of the Balanced Budget and Emergency Deficit

Control Act of 1985 is amended as follows:

(1) Strike ‘‘252’’ or ‘‘252(b)’’ each place it occurs and insert

‘‘254’’.
H. R. 2015—462

(2) In subsection (d)(1)(A), strike ‘‘257(l) to the extent that’’

and insert ‘‘256(a) if’’ and at the end insert ‘‘or’’.

(3) In subsection (d)(1)(B), strike ‘‘new budget’’ and all

that follows through ‘‘spending authority’’ and insert ‘‘budgetary

resources’’ and strike ‘‘or’’ after the comma.

(4) Strike subsection (d)(1)(C).

(5) Strike subsection (f) and redesignate subsections (g)

and (h) as subsections (f) and (g), respectively.

(6) In subsection (g) (as redesignated), strike ‘‘base levels

of total revenues and total budget outlays, as’’ and insert ‘‘figures’’, and strike ‘‘251(a)(2)(B) or (c)(2),’’ and insert ‘‘254’’.

SEC. 10212. EFFECTIVE DATE.

(a) EXPIRATION.—Section 275(b) of the Balanced Budget and

Emergency Deficit Control Act of 1985 is amended—

(1) by striking ‘‘Part C of this title, section’’ and inserting

‘‘Sections 251, 253, 258B, and’’;

(2) by striking ‘‘1995’’ and inserting ‘‘2002’’; and

(3) by adding at the end the following new sentence: ‘‘The

remaining sections of part C of this title shall expire September

30, 2006.’’.

(b) EXPIRATION.—Section 14002(c)(3) of the Omnibus Budget

Reconciliation Act of 1993 (2 U.S.C. 900 note) is repealed.

SEC. 10213. REDUCTION OF PREEXISTING BALANCES AND EXCLUSION

OF EFFECTS OF THIS ACT FROM PAYGO SCORECARD.

Upon the enactment of this Act, the Director of the Office

of Management and Budget shall—

(1) reduce any balances of direct spending and receipts

legislation for any fiscal year under section 252 of the Balanced

Budget and Emergency Deficit Control Act of 1985 to zero;

and

(2) not make any estimates of changes in direct spending

outlays and receipts under subsection (d) of that section for

any fiscal year resulting from the enactment of this Act or

of the Taxpayer Relief Act of 1997.

TITLE XI—DISTRICT OF COLUMBIA

REVITALIZATION

SECTION 11000. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE.—This title may be cited as the ‘‘National

Capital Revitalization and Self-Government Improvement Act of

1997’’.

(b) TABLE OF CONTENTS.—The table of contents of this title

is as follows:

Sec. 11000. Short title; table of contents.

Subtitle A—District of Columbia Retirement Funds

CHAPTER 1—SHORT TITLE; FINDINGS; DEFINITIONS

Sec. 11001. Short title.

Sec. 11002. Findings and declaration of policy.

Sec. 11003. Definitions.

CHAPTER 2—FEDERAL BENEFIT PAYMENTS UNDER DISTRICT RETIREMENT PROGRAMS

Sec. 11011. Obligation of Federal government to make benefit payments.

Sec. 11012. Federal benefit payments described.
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Sec. 11013. Establishment of single annual cost-of-living adjustment under District

Retirement Program.

CHAPTER 3—DETERMINATIONS AND REVIEW OF ELIGIBILITY AND PAYMENTS;

INFORMATION SHARING

Sec. 11021. Determination of eligibility for and amount of Federal benefit payments

made by Trustee.

Sec. 11022. Procedures for resolving claims arising from denied benefit payments.

Sec. 11023. Transfer of and access to records of District Government.

Sec. 11024. Federal information sharing for verification of benefit determinations.

CHAPTER 4—DISTRICT OF COLUMBIA FEDERAL PENSION LIABILITY TRUST FUND

Sec. 11031. Creation of Trust Fund.

Sec. 11032. Uses of amounts in Trust Fund.

Sec. 11033. Transfer of assets and obligations of District Retirement Funds.

Sec. 11034. Treatment of Trust Fund under certain laws.

Sec. 11035. Administration through Trustee.

CHAPTER 5—RESPONSIBILITIES OF DISTRICT GOVERNMENT

Sec. 11041. Interim administration.

Sec. 11042. Replacement plan.

CHAPTER 6—FINANCING OF BENEFIT PAYMENTS AFTER DEPLETION OF TRUST FUND

Sec. 11051. Creation of Federal Supplemental Fund.

Sec. 11052. Uses of amounts in Fund.

Sec. 11053. Determination of annual payment into Federal Supplemental Fund.

Sec. 11054. Determination of methodology for making payments.

Sec. 11055. Special requirements upon discontinuation of Trust Fund.

CHAPTER 7—REPORTS

Sec. 11061. Annual valuations and reports by enrolled actuary.

Sec. 11062. Reports by Comptroller General.

CHAPTER 8—JUDICIAL ENFORCEMENT

Sec. 11071. Judicial review.

Sec. 11072. Jurisdiction and venue.

Sec. 11073. Statute of limitations.

Sec. 11074. Treatment of misappropriation of fund amounts as Federal crime.

CHAPTER 9—MISCELLANEOUS

Sec. 11081. Coordination between Secretary, Trustee, and District Government.

Sec. 11082. Study of alternatives for financing Federal obligations.

Sec. 11083. Issuance of regulations by Secretary.

Sec. 11084. Effect on Reform Act and other laws.

Sec. 11085. Reference to new Federal program for retirement of judges of District

of Columbia courts.

Sec. 11086. Full faith and credit.

Sec. 11087. Severability of provisions.

Subtitle B—Management Reform Plans

Sec. 11101. Short title.

Sec. 11102. Management reform plans for District Government.

Sec. 11103. Procedures for development of plans.

Sec. 11104. Implementation of plans.

Sec. 11105. Reform of powers and duties of department heads.

Sec. 11106. No effect on powers of Financial Responsibility and Management Assistance Authority.

Subtitle C—Criminal Justice

CHAPTER 1—CORRECTIONS

Sec. 11201. Bureau of Prisons.

Sec. 11202. Corrections Trustee.

Sec. 11203. Priority consideration for employees of the District of Columbia.

Sec. 11204. Amendments related to persons with a mental disease or defect.

Sec. 11205. Liability for and litigation authority of Corrections Trustee.

Sec. 11206. Permitting expenditure of funds to carry out certain sewer agreement.

CHAPTER 2—SENTENCING

Sec. 11211. Truth-in-Sentencing Commission.
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Sec. 11212. General duties, powers, and goals of Commission.

Sec. 11213. Data collection.

Sec. 11214. Enactment of amendments to District of Columbia Code.

CHAPTER 3—OFFENDER SUPERVISION AND PAROLE

Sec. 11231. Parole.

Sec. 11232. Pretrial Services, Defense Services, Parole, Adult Probation and Offender Supervision Trustee.

Sec. 11233. Offender Supervision, Defender and Courts Services Agency.

Sec. 11234. Authorization of appropriations.

CHAPTER 4—DISTRICT OF COLUMBIA COURTS

SUBCHAPTER A—TRANSFER OF ADMINISTRATION AND FINANCING OF COURTS TO

FEDERAL GOVERNMENT

Sec. 11241. Authorization of appropriations.

Sec. 11242. Administration of courts under District of Columbia Code.

Sec. 11243. Budgeting and financing requirements for courts under Home Rule Act.

Sec. 11244. Auditing of accounts of court system.

Sec. 11245. Miscellaneous budgeting and financing requirements for courts under

District law.

Sec. 11246. Other provisions relating to administration of District of Columbia

courts.

SUBCHAPTER B—JUDICIAL RETIREMENT PROGRAM

Sec. 11251. Judicial Retirement and Survivors Annuity Fund.

Sec. 11252. Termination of current fund and program.

Sec. 11253. Conforming amendments.

SUBCHAPTER C—MISCELLANEOUS CONFORMING AND ADMINISTRATIVE PROVISIONS

Sec. 11261. Treatment of courts under miscellaneous District laws.

Sec. 11262. Representation of indigents in criminal cases.

CHAPTER 5—PRETRIAL SERVICES AGENCY AND PUBLIC DEFENDER SERVICE

Sec. 11271. Amendments affecting Pretrial Services Agency.

Sec. 11272. Amendments affecting Public Defender Service.

CHAPTER 6—MISCELLANEOUS PROVISIONS

Sec. 11281. Technical assistance and research.

Sec. 11282. Exemption from personnel and budget ceilings for Trustees and related

agencies.

Subtitle D—Privatization of Tax Collection and Administration

Sec. 11301. Findings.

Sec. 11302. Authorizing Chief Financial Officer to privatize tax administration and

collection.

Subtitle E—Financing of District of Columbia Accumulated Deficit

Sec. 11401. Findings.

Sec. 11402. Authorization for intermediate-term advances of funds by the Secretary

of the Treasury to liquidate the accumulated general fund deficit of the

District of Columbia.

Sec. 11403. Conforming amendments.

Sec. 11404. Technical corrections.

Sec. 11405. Authorization for issuance of general obligation bonds by the District

of Columbia to finance or refund its accumulated general fund deficit.

Subtitle F—District of Columbia Bond Financing Improvements

Sec. 11501. Short title.

Sec. 11502. Findings.

Sec. 11503. Amendment to Section 462 (relating to contents of borrowing legislation

and elections on issuing general obligation bonds).

Sec. 11504. Amendment to Section 466 (relating to public or negotiated sale of general obligation bonds).

Sec. 11505. Amendment to Section 467 (relating to authority to create security interests in District revenues).

Sec. 11506. Amendment to Section 472 (relating to borrowing in anticipation of revenues).

Sec. 11507. Addition of new Section 475 (relating to general obligation bond anticipation notes).
H. R. 2015—465

Sec. 11508. Amendment to Section 490 (relating to revenue bonds and other obligations).

Sec. 11509. Conforming amendment.

Subtitle G—District of Columbia Government Budget

Sec. 11601. Elimination of the annual Federal payment to the District of Columbia.

Sec. 11602. Requirement that the District of Columbia balance its budget in FY

1998.

Sec. 11603. Permitting expedited submission and approval of consensus budget and

financial plan. Sec. 11604. Increase in maximum amount of permitted District borrowing.

Subtitle H—Miscellaneous Provisions

CHAPTER 1—REGULATORY REFORM IN THE DISTRICT OF COLUMBIA

Sec. 11701. Review and revision of regulations and permit and application processes. Sec. 11702. Repeal of Clean Air Compliance Fee Act of 1994.

Sec. 11703. Repeal requirement for Congressional authorization of certain mergers

involving District of Columbia public utility corporations. Sec. 11704. Exemption of certain contracts from Council review.

CHAPTER 2—OTHER MISCELLANEOUS PROVISIONS

Sec. 11711. Revisions to Financial Responsibility and Management Assistance Act.

Sec. 11712. Cooperative agreements between Federal agencies and Metropolitan

Police Department. Sec. 11713. Permitting garnishment of wages of officers and employees of District

of Columbia government. Sec. 11714. Permitting excess appropriations by Water and Sewer Authority for

capital projects. Sec. 11715. Requiring certain Federal officials to provide notice before carrying out

activities affecting real property located in District of Columbia. Sec. 11716. Repeal term of deed of conveyance to certain hospital.

Sec. 11717. Short title of Home Rule Act.

CHAPTER 3—EFFECTIVE DATE; GENERAL PROVISIONS

Sec. 11721. Effective date.

Sec. 11722. Technical assistance.

Sec. 11723. Liability.

Subtitle A—District of Columbia

Retirement Funds

CHAPTER 1—SHORT TITLE; FINDINGS; DEFINITIONS

SEC. 11001. SHORT TITLE.

This subtitle may be cited as the ‘‘District of Columbia Retirement Protection Act of 1997’’.

SEC. 11002. FINDINGS AND DECLARATION OF POLICY.

(a) FINDINGS.—The Congress finds that—

(1) State and municipal retirement programs should be

funded on an actuarially sound basis;

(2) the retirement programs for the police officers and

firefighters, teachers and judges of the District of Columbia

had significant unfunded liabilities totaling approximately

$1,900,000,000 when the Federal government transferred those

programs to the District of Columbia, and those liabilities have

since increased to nearly $4,800,000,000, an increase which

is almost entirely attributable to the accumulation of interest

on the value which existed at the time of transfer;

(3) the District of Columbia has fully met its financial

obligations under the District of Columbia Retirement Reform

Act of 1979 (Public Law 96–122);
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(4) the growth of the unfunded liabilities of the three

pension funds listed above did not occur because of any action

taken or any failure to act that lay within the power of the

District of Columbia government or the District of Columbia

Retirement Board;

(5) the presence of the unfunded pension liability is having

and will continue to have a negative impact on the District

of Columbia’s credit rating as it is a legal obligation and the

total unfunded liability exceeds the total General Obligation

debt of the District, and the costs associated with this liability

are a contributing cause of the District’s ongoing financial

crisis;

(6) the obligations of the District associated with these

pension programs in fiscal year 1997 represents nearly 10

percent of the District’s revenue;

(7) the annual Federal contribution toward these costs

under the District of Columbia Retirement Reform Act has

remained $52,000,000;

(8) if the unfunded pension liability situation is not

resolved, in 2004 the District of Columbia would be responsible

for annual costs exceeding $800,000,000, a figure which would

be impossible to meet without catastrophic impact on the District government’s resources and programs;

(9) the financial resources of the District of Columbia are

not adequate to discharge the unfunded liabilities of the retirement programs; and

(10) the level of benefits and funding of the current retirement programs were authorized by various Acts of Congress.

(b) POLICY.—It is the policy of this subtitle—

(1) to relieve the District of Columbia government of the

responsibility for the unfunded pension liabilities transferred

to it by the Federal government;

(2) for the Federal government to assume the legal responsibility for paying certain pension benefits (including certain

unfunded pension liabilities which existed as of the day prior

to introduction of this legislation) for the retirement plans

of teachers, police, and firefighters;

(3) to provide for a responsible Federal system for payment

of benefits accrued prior to the date of introduction of this

legislation; and

(4) to require the establishment of replacement plans by

the District of Columbia government for the current retirement

plans for teachers, and police and firefighters.

SEC. 11003. DEFINITIONS.

For purposes of this subtitle, the following definitions shall

apply:

(1) The term ‘‘contract’’ means the contract under section

11035 between the Secretary and the Trustee.

(2) The term ‘‘covered District employee’’ means a teacher

of the District of Columbia public schools, or a member of

the Metropolitan Police Force or the Fire Department of the

District of Columbia, as defined under the District Retirement

Program.

(3) The term ‘‘District Government’’ means any entity treated as part of the District government under section 305(5)

of the District of Columbia Financial Responsibility and
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Management Assistance Act of 1995, including the District

of Columbia Retirement Board (as defined in section 102(5)

of the Reform Act).

(4) The term ‘‘District Retirement Fund’’ means the District

of Columbia Police Officers and Fire Fighters Retirement Fund

and the District of Columbia Teachers Retirement Fund, as

defined in the Reform Act.

(5) The term ‘‘District Retirement Program’’ means any

of the retirement programs for teachers and members of the

Metropolitan Police Force and Fire Department, as described

in section 102(7) of the Reform Act as in effect on the day

before the freeze date (except as amended by section 11013).

(6) The term ‘‘enrolled actuary’’ means the enrolled actuary

engaged by the Trustee under section 11061(a).

(7) The term ‘‘Federal benefit payment’’ means a payment

described in section 11012.

(8) The term ‘‘Federal Supplemental Fund’’ means the Federal Supplemental District of Columbia Pension Fund created

under section 11051.

(9) The term ‘‘freeze date’’ means June 30, 1997.

(10) The term ‘‘person’’ means an individual, partnership,

joint venture, corporation, mutual company, joint-stock company, trust, estate, unincorporated organization, association,

or employee organization.

(11) The term ‘‘Reform Act’’ means the District of Columbia

Retirement Reform Act (Public Law 96–122).

(12) The term ‘‘replacement plan’’ means the plan described

in section 11042.

(13) The term ‘‘replacement plan adoption date’’ means

the date upon which the legislation establishing the replacement plan becomes effective, or the first day after the expiration

of the 1-year period which begins on the date of the enactment

of this Act, whichever occurs first.

(14) The term ‘‘Trust Fund’’ means the District of Columbia

Federal Pension Liability Trust Fund established under section

11031.

(15) The term ‘‘Secretary’’ means the Secretary of the Treasury or the Secretary’s designee.

(16) The term ‘‘Trustee’’ means the person or persons

selected by the Secretary under section 11035.

CHAPTER 2—FEDERAL BENEFIT PAYMENTS UNDER

DISTRICT RETIREMENT PROGRAMS

SEC. 11011. OBLIGATION OF FEDERAL GOVERNMENT TO MAKE BENEFIT PAYMENTS.

(a) IN GENERAL.—In accordance with the provisions of this

subtitle, the Federal Government shall make Federal benefit payments associated with the pension plans for police officers, firefighters, and teachers of the District of Columbia.

(b) NO REVERSION OF FEDERAL RESPONSIBILITY TO DISTRICT.—

At no point after the effective date of this subtitle may the responsibility or any part thereof assigned to the Federal Government

under subsection (a) for making Federal benefit payments revert

to the District of Columbia.
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SEC. 11012. FEDERAL BENEFIT PAYMENTS DESCRIBED.

(a) IN GENERAL.—Subject to the succeeding provisions of this

subtitle, a ‘‘Federal benefit payment’’ is any benefit payment to

which an individual is entitled under a District Retirement Program, in such amount and under such terms and conditions as

may apply under such Program.

(b) TREATMENT OF SERVICE OCCURRING AFTER FREEZE DATE.— Service after the freeze date shall not be credited for purposes

of determining the amount of any Federal benefit payment. Nothing

in this subsection shall be construed to affect the crediting of

such service for any other purpose under the District Retirement

Program.

(c) SPECIAL RULE REGARDING DISABILITY BENEFITS.—To the

extent that any portion of a benefit payment to which an individual

is entitled under a District Retirement Program is based on a

determination of disability made by the District of Columbia Retirement Board or the Trustee after the freeze date, the Federal benefit

payment determined with respect to the individual shall be an

amount equal to the deferred retirement benefit or normal retirement benefit the individual would receive if the individual left

service on the day before the commencement of disability retirement

benefits.

(d) SPECIAL RULE REGARDING CERTAIN DEATH BENEFITS.— (1) IN GENERAL.—In the case of a benefit payment to which

an individual is entitled under a District Retirement Program

which is payable on the death of a covered District employee

or former covered District employee and which is not determined by the length of service of the employee or former

employee, the Federal benefit payment determined with respect

to the individual shall be equal to the pre-freeze date percentage

of the amount otherwise payable.

(2) PRE-FREEZE DATE PERCENTAGE DEFINED.—In paragraph

(1), the ‘‘pre-freeze date percentage’’ with respect to a covered

District employee or former covered District employee is the

amount (expressed as a percentage) equal to the quotient of—

(A) the number of months of the covered District

employee’s or former covered District employee’s service

prior to the freeze date; divided by

(B) the total number of months of the covered District

employee’s or former covered District employee’s service.

SEC. 11013. ESTABLISHMENT OF SINGLE ANNUAL COST-OF-LIVING

ADJUSTMENT UNDER DISTRICT RETIREMENT PROGRAM.

(a) PROGRAM FOR POLICE AND FIRE FIGHTERS.—Subsection (m)

of the Policemen and Firemen’s Retirement and Disability Act (DC

Code, sec. 4–624) is amended—

(1) in paragraph (2), by striking ‘‘the Mayor shall’’ and

all that follows and inserting the following: ‘‘on January 1

of each year (or within a reasonable time thereafter), the Mayor

shall determine the per centum change in the price index

for the preceding year by determining the difference between

the index published for December of the preceding year and

the index published for December of the second preceding

year.’’; and

(2) by amending paragraph (3) to read as follows:

‘‘(3)(A) If (in accordance with paragraph (2)) the Mayor determines in a year (beginning with 1999) that the per centum change
H. R. 2015—469

in the price index for the preceding year indicates a rise in the

price index, each annuity having a commencing date on or before

March 1 of the year shall, effective March 1 of the year, be increased

by an amount equal to—

‘‘(i) in the case of an annuity having a commencing date

on or before March 1 of such preceding year, the per centum

change computed under paragraph (2), adjusted to the nearest

1⁄10 of 1 per centum; or

‘‘(ii) in the case of an annuity having a commencing date

after March 1 of such preceding year, a pro rata increase

equal to the product of—

‘‘(I) 1⁄12 of the per centum change computed under

paragraph (2), multiplied by

‘‘(II) the number of months (not to exceed 12 months,

counting any portion of a month as an entire month) for

which the annuity was payable before the effective date

of the increase,

adjusted to the nearest 1⁄10 of 1 per centum.

‘‘(B) On January 1, 1998 (or within a reasonable time thereafter), the Mayor shall determine the per centum change in the

price index published for December 1997 over the price index published for June 1997. If such per centum change indicates a rise

in the price index, effective March 1, 1998—

‘‘(i) each annuity having a commencing date on or before

September 1, 1997, shall be increased by an amount equal

to such per centum change, adjusted to the nearest 1⁄10 of

1 per centum; and

‘‘(ii) each annuity having a commencing date after September 1, 1997, and on or before March 1, 1998, shall be increased

by a pro rata increase equal to the product of—

‘‘(I) 1⁄6 of such per centum change, multiplied by

‘‘(II) the number of months (not to exceed 6 months,

counting any portion of a month as an entire month) for

which the annuity was payable before the effective date

of the increase,

adjusted to the nearest 1⁄10 of 1 per centum.’’.

(b) PROGRAM FOR TEACHERS.—Section 21(b) of the Act entitled

‘‘An Act for the retirement of public-school teachers in the District

of Columbia’’, approved August 7, 1946 (DC Code, sec. 31–1241(b))

is amended—

(1) in paragraph (1), by striking ‘‘The Mayor shall—’’ and

all that follows and inserting the following: ‘‘On January 1

of each year (or within a reasonable time thereafter), the Mayor

shall determine the per centum change in the price index

for the preceding year by determining the difference between

the index published for December of the preceding year and

the index published for December of the second preceding

year.’’; and

(2) by amending paragraph (2) to read as follows:

‘‘(2)(A) If (in accordance with paragraph (1)) the Mayor determines in a year (beginning with 1999) that the per centum change

in the price index for the preceding year indicates a rise in the

price index, each annuity having a commencing date on or before

March 1 of the year shall, effective March 1 of the year, be increased

by an amount equal to—

‘‘(i) in the case of an annuity having a commencing date

on or before March 1 of such preceding year, the per centum
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change computed under paragraph (1), adjusted to the nearest

1⁄10 of 1 per centum; or

‘‘(ii) in the case of an annuity having a commencing date

after March 1 of such preceding year, a pro rata increase

equal to the product of—

‘‘(I) 1⁄12 of the per centum change computed under

paragraph (1), multiplied by

‘‘(II) the number of months (not to exceed 12 months,

counting any portion of a month as an entire month) for

which the annuity was payable before the effective date

of the increase,

adjusted to the nearest 1⁄10 of 1 per centum.

‘‘(B) On January 1, 1998 (or within a reasonable time thereafter), the Mayor shall determine the per centum change in the

price index published for December 1997 over the price index published for June 1997. If such per centum change indicates a rise

in the price index, effective March 1, 1998—

‘‘(i) each annuity having a commencing date on or before

September 1, 1997, shall be increased by an amount equal

to such per centum change, adjusted to the nearest 1⁄10 of

1 per centum; and

‘‘(ii) each annuity having a commencing date after September 1, 1997, and on or before March 1, 1998, shall be increased

by a pro rata increase equal to the product of—

‘‘(I) 1⁄6 of such per centum change, multiplied by

‘‘(II) the number of months (not to exceed 6 months,

counting any portion of a month as an entire month) for

which the annuity was payable before the effective date

of the increase,

adjusted to the nearest 1⁄10 of 1 per centum.’’.

CHAPTER 3—DETERMINATIONS AND REVIEW OF

ELIGIBILITY AND PAYMENTS; INFORMATION SHARING

SEC. 11021. DETERMINATION OF ELIGIBILITY FOR AND AMOUNT OF

FEDERAL BENEFIT PAYMENTS MADE BY TRUSTEE.

Notwithstanding any provision of a District Retirement Program or any other law, rule, or regulation, the Trustee—

(1) shall determine whether an individual is eligible to

receive a Federal benefit payment under this subtitle;

(2) shall determine the amount and form of an individual’s

Federal benefit payment under this subtitle; and

(3) may recoup or recover any amounts paid under this

subtitle as a result of errors or omissions by the Trustee,

the District Government, or any other person.

SEC. 11022. PROCEDURES FOR RESOLVING CLAIMS ARISING FROM

DENIED BENEFIT PAYMENTS.

(a) REQUIRING NOTICE AND OPPORTUNITY FOR REVIEW.—In

accordance with procedures approved by the Secretary, the Trustee

shall provide to any individual whose claim for a Federal benefit

payment under this subtitle has been denied in whole or in part—

(1) adequate written notice of such denial, setting forth

the specific reasons for the denial in a manner calculated

to be understood by the average participant in the District

Retirement Program; and
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(2) a reasonable opportunity for a full and fair review

of the decision denying such claim.

(b) STANDARD FOR REVIEW.—Any factual determination made

by the Trustee shall be presumed correct unless rebutted by clear

and convincing evidence. The Trustee’s interpretation and construction of the benefit provisions of the District Retirement Program

and this subtitle shall be entitled to great deference.

SEC. 11023. TRANSFER OF AND ACCESS TO RECORDS OF DISTRICT

GOVERNMENT.

(a) IN GENERAL.—Within 30 days after the Secretary or the

Trustee requests, the District Government shall furnish copies of

all records, documents, information, or data the Secretary or the

Trustee deems necessary to carry out responsibilities under this

subtitle and the contract. Upon request, the District Government

shall grant the Secretary or the Trustee direct access to such

information systems, records, documents, information or data as

the Secretary or Trustee requires to carry out responsibilities under

this subtitle or the contract.

(b) REPAYMENT BY DISTRICT GOVERNMENT.—The District

Government shall reimburse the Trust Fund for all costs, including

benefit costs, that are attributable to errors or omissions in the

transferred records that are identified within 3 years after such

records are transferred.

SEC. 11024. FEDERAL INFORMATION SHARING FOR VERIFICATION OF

BENEFIT DETERMINATIONS.

(a) IN GENERAL.—Except with respect to taxpayer returns and

return information subject to section 6103 of the Internal Revenue

Code of 1986, the Secretary may—

(1) secure directly from any department or agency of the

United States information necessary to enable the Secretary

to verify or confirm benefit determinations under this subtitle;

and

(2) by regulation authorize the Trustee to review such

information for purposes of administering this subtitle and

the contract.

(b) AMENDMENTS TO INTERNAL REVENUE CODE.—The Internal

Revenue Code of 1986 is amended as follows:

(1) In section 6103(l), as amended by section 1206(a) of

the Taxpayer Bill of Rights 2, by adding at the end the following

new paragraph:

‘‘(16) DISCLOSURE OF RETURN INFORMATION FOR PURPOSES

OF ADMINISTERING THE DISTRICT OF COLUMBIA RETIREMENT

PROTECTION ACT OF 1997.— ‘‘(A) IN GENERAL.—Upon written request available

return information (including such information disclosed

to the Social Security Administration under paragraph (1)

or (5) of this subsection), relating to the amount of wage

income (as defined in section 3121(a) or 3401(a)), the name,

address, and identifying number assigned under section

6109, of payors of wage income, taxpayer identity (as

defined in subsection 6103(b)(6)), and the occupational status reflected on any return filed by, or with respect to,

any individual with respect to whom eligibility for, or the

correct amount of, benefits under the District of Columbia

Retirement Protection Act of 1997, is sought to be determined, shall be disclosed by the Commissioner of Social
H. R. 2015—472

Security, or to the extent not available from the Social

Security Administration, by the Secretary, to any duly

authorized officer or employee of the Department of the

Treasury, or a Trustee or any designated officer or

employee of a Trustee (as defined in the District of Columbia Retirement Protection Act of 1997), or any actuary

engaged by a Trustee under the terms of the District of

Columbia Retirement Protection Act of 1997, whose official

duties require such disclosure, solely for the purpose of,

and to the extent necessary in, determining an individual’s

eligibility for, or the correct amount of, benefits under

the District of Columbia Retirement Protection Act of 1997.

‘‘(B) DISCLOSURE FOR USE IN JUDICIAL OR ADMINISTRATIVE PROCEEDINGS.—Return information disclosed to any

person under this paragraph may be disclosed in a judicial

or administrative proceeding relating to the determination

of an individual’s eligibility for, or the correct amount of,

benefits under the District of Columbia Retirement Protection Act of 1997.’’.

(2) In section 6103(a)(3), by striking ‘‘(6) or (12)’’ and inserting ‘‘(6), (12), or (16)’’;

(3) In section 6103(i)(7)(B)(i), by inserting after ‘‘(other

than an agency referred to in subparagraph (A))’’ and before

the word ‘‘for’’ the words ‘‘or by a Trustee as defined in the

District of Columbia Retirement Protection Act of 1997,’’.

(4) In section 6103(p)(3)(A), by striking ‘‘or (15)’’ and inserting ‘‘(15), or (16)’’.

(5) In section 6103(p)(4) in the matter preceding subparagraph (A), by striking ‘‘or (12)’’ and inserting ‘‘(12), or (16),

or any other person described in subsection (l)(16)’’.

(6) In section 6103(p)(4)(F)(i), by striking ‘‘or (9),’’ and

inserting ‘‘(9), or (16), or any other person described in subsection (l)(16)’’.

(7) In section 6103(p)(4)(F) in the matter following clause

(iii)—

(A) by inserting after ‘‘any such agency, body or

commission’’ and before the words ‘‘for the General Accounting Office’’ the words ‘‘, including an agency or any other

person described in subsection (l)(16),’’;

(B) by striking ‘‘to such agency, body, or commission’’

and inserting ‘‘to such agency, body, or commission, including an agency or any other person described in subsection

(l)(16),’’;

(C) by striking ‘‘or (12)(B)’’ and inserting ‘‘, (12)(B),

or (16)’’;

(D) by inserting after the words ‘‘any agent,’’ and before

the words ‘‘this paragraph shall’’ the words ‘‘or any person

including an agent described in subsection (l)(16),’’;

(E) by inserting after the words ‘‘such agent’’ and before

‘‘(except that’’ the words ‘‘or other person’’; and

(F) by inserting after the words ‘‘an agent,’’ and before

the words ‘‘any report’’ the words ‘‘or any person including

an agent described in subsection (l)(16),’’.

(8) In section 7213(a)(2), by striking ‘‘or (15),’’ and inserting

‘‘(15), or (16)’’.

(c) CONFIDENTIALITY.—The Secretary may issue regulations

governing the confidentiality of the information obtained pursuant
H. R. 2015—473

to subsection (a) and the provisions of law amended by subsection

(b).

CHAPTER 4—DISTRICT OF COLUMBIA FEDERAL

PENSION LIABILITY TRUST FUND

SEC. 11031. CREATION OF TRUST FUND.

(a) ESTABLISHMENT.—There is established on the books of the

Treasury the District of Columbia Federal Pension Liability Trust

Fund, consisting of the assets transferred pursuant to section 11033

and any income earned on the investment of such assets pursuant

to subsection (b).

(b) INVESTMENT OF ASSETS.—The Trustee may invest the assets

of the Trust Fund in private securities and any other form of

investment deemed appropriate by the Secretary.

SEC. 11032. USES OF AMOUNTS IN TRUST FUND.

(a) IN GENERAL.—Amounts in the Trust Fund shall be used—

(1) to make Federal benefit payments under this subtitle;

(2) subject to subsection (b), to cover the reasonable and

necessary expenses of administering the Trust Fund under

the contract entered into pursuant to section 11035(b); and

(3) for such other purposes as are specified in this subtitle.

(b) SPECIAL RULES REGARDING ADMINISTRATIVE EXPENSES.— (1) BUDGETING; CERTIFICATION AND APPROVAL.—The

administrative expenses of the Trust Fund shall be paid in

accordance with an annual budget set forth by the Trustee

which shall be subject to certification and approval by the

Secretary.

(2) USE OF DISTRICT RETIREMENT FUND FOR INTERIM

ADMINISTRATION.—The Secretary is authorized to requisition

from the District Retirement Fund such sums as are necessary

to administer the Trust Fund until assets are transferred to

the Trust Fund pursuant to section 11033.

SEC. 11033. TRANSFER OF ASSETS AND OBLIGATIONS OF DISTRICT

RETIREMENT FUNDS.

(a) IN GENERAL.—As of the replacement plan adoption date,

all obligations to make Federal benefit payments and all assets

of the District Retirement Fund as of the replacement plan adoption

date (except as provided in subsections (b) and (c)) shall be transferred to the Trust Fund.

(b) DESIGNATION OF ASSETS TO BE RETAINED BY DISTRICT

RETIREMENT FUND.—The Secretary shall designate assets with a value of $1.275 billion that shall not be transferred from the District

Retirement Fund under subsection (a). The Secretary’s designation

and valuation of the assets shall be final and binding.

(c) EXCEPTION FOR CERTAIN EMPLOYEE CONTRIBUTIONS.— (1) IN GENERAL.—Subsection (a) shall not apply to assets

consisting of the District Retirement Fund consisting of any

employee contributions deducted and withheld after the freeze

date or any interest thereon (computed at a rate and in a

manner determined by the Secretary).

(2) EMPLOYEE CONTRIBUTIONS DEFINED.—In paragraph (1),

the term ‘‘employee contributions’’ means amounts deducted

and withheld from the salaries of covered District employees

and paid to the District Retirement Fund (and, in the case

of teachers, amounts of additional deposits paid to the District
H. R. 2015—474

Retirement Fund), pursuant to the District Retirement Program.

(d) RESPONSIBILITIES OF DISTRICT GOVERNMENT.—

(1) IN GENERAL.—The transfer of assets from the District

Retirement Fund under this section shall be made in accordance

with the direction of the Secretary. The District Government

shall promptly take all steps, and execute all documents, that

the Secretary deems necessary to effect the transfer.

(2) FINAL RECONCILIATION OF ACCOUNTS.—As soon as practicable after the replacement plan adoption date, the District

Government shall furnish the Trustee a final reconciliation

of accounts in connection with the transfer of assets and obligations to the Trust Fund. The allocation of assets under this

section shall be adjusted in accordance with this reconciliation.

SEC. 11034. TREATMENT OF TRUST FUND UNDER CERTAIN LAWS.

(a) INTERNAL REVENUE CODE.—For purposes of the Internal

Revenue Code of 1986—

(1) the Trust Fund shall be treated as a trust described

in section 401(a) of the Code which is exempt from taxation

under section 501(a) of the Code;

(2) any transfer to or distribution from the Trust Fund

shall be treated in the same manner as a transfer to or distribution from a trust described in section 401(a) of the Code; and

(3) the benefits provided by the Trust Fund shall be treated

as benefits provided under a governmental plan maintained

by the District of Columbia.

(b) ERISA.—For purposes of the Employee Retirement Income

Security Act of 1974, the benefits provided by the Trust Fund

shall be treated as benefits provided under a governmental plan

maintained by the District of Columbia.

(c) APPLICATION OF CERTAIN FUTURE AMENDMENTS TO INTERNAL

REVENUE CODE.—To the extent that any provision of subpart A

of part I of subchapter D of chapter 1 of the Internal Revenue

Code of 1986 (26 U.S.C. 401 et seq.) is amended after the date

of the enactment of this Act, such provision as amended shall

apply to the Trust Fund only to the extent the Secretary determines

that application of the provision as amended is consistent with

the administration of this subtitle.

SEC. 11035. ADMINISTRATION THROUGH TRUSTEE.

(a) IN GENERAL.—As soon as practicable after the enactment

of this subtitle, the Secretary shall select a Trustee to administer

the Trust Fund and otherwise carry out the responsibilities and

duties specified in this subtitle in accordance with the contract

described in subsection (b).

(b) CONTRACT.—The Secretary shall enter into a contract with

the Trustee to provide for the management, investment, control

and auditing of Trust Fund assets, the making of Federal benefit

payments under this subtitle from the Trust Fund, and such other

matters as the Secretary deems appropriate. The Secretary shall

enforce the provisions of the contract and otherwise monitor the

administration of the Trust Fund.

(c) REPORTS.—The Trustee shall report to the Secretary, in

a form and manner and at such intervals as the Secretary may

prescribe, on any matters or transactions relating to the Trust

Fund, including financial matters, as the Secretary may require.
H. R. 2015—475

CHAPTER 5—RESPONSIBILITIES OF DISTRICT

GOVERNMENT

SEC. 11041. INTERIM ADMINISTRATION.

(a) ADMINISTRATION OF BENEFITS UNTIL APPOINTMENT OF

TRUSTEE.—Notwithstanding chapter 2, after the enactment of this

subtitle the District Government shall continue to discharge its

duties and responsibilities under the District Retirement Program

and the District Retirement Fund (as such duties and responsibilities are modified by this subtitle), including the responsibility

for Federal benefit payments, until such time as the Secretary

notifies the District Government that the Secretary has directed

the Trustee to carry out the duties and responsibilities required

under the contract.

(b) REIMBURSEMENT FROM TRUST FUND.—The Trustee shall

reimburse the District Government for any administrative expenses

incurred by the District Government in carrying out subsection

(a)—

(1) if the Trustee finds such expenses to be reasonable

and necessary; and

(2) to the extent that the District Government is not

reimbursed for such expenses from other sources.

(c) MAKING DISTRICT RETIREMENT FUND WHOLE.—The District

Government shall reimburse the District Retirement Fund for any

benefits paid inconsistent with this subtitle from the District Retirement Fund between the freeze date and the replacement plan

adoption date.

SEC. 11042. REPLACEMENT PLAN.

(a) ADOPTION BY DISTRICT GOVERNMENT.—Not later than one

year after the date of the enactment of this subtitle, the District

Government shall adopt a replacement plan for pension benefits

for covered District employees, effective as of the freeze date.

(b) REPLACEMENT PLAN IMPOSED IF DISTRICT GOVERNMENT

FAILS TO ADOPT PLAN.—If the District Government fails to adopt

a replacement plan within the period prescribed in subsection (a),

the retirement program applicable to police, firefighters, and teachers under the laws of the District of Columbia in effect as of

June 1, 1997 (except as otherwise amended by this Act), including

all requirements of the program regarding benefits, contributions,

and cost-of-living adjustments, shall be treated as the replacement

plan for purposes of this subtitle.

(c) NO PAYMENT OF AMOUNTS PAID AS FEDERAL BENEFIT PAYMENT.—Notwithstanding any provision of the Reform Act or any

other law, rule, or regulation, the District Government is not

required to pay any amount under any replacement plan under

this subtitle if the amount is paid as a Federal benefit payment

under this subtitle.

CHAPTER 6—FINANCING OF BENEFIT PAYMENTS AFTER

DEPLETION OF TRUST FUND

SEC. 11051. CREATION OF FEDERAL SUPPLEMENTAL FUND.

(a) ESTABLISHMENT.—There is established on the books of the

Treasury the Federal Supplemental District of Columbia Pension

Fund, which shall be administered by the Secretary and shall

consist of the following assets:
H. R. 2015—476

(1) Amounts deposited into such Fund under the provisions

of this subtitle.

(2) Any amount otherwise appropriated to such Fund.

(3) Any income earned on the investment of the assets

of such Fund pursuant to subsection (b).

(b) INVESTMENT OF ASSETS.—The Secretary shall invest such

portion of the Federal Supplemental Fund as is not in the judgment

of the Secretary required to meet current withdrawals. Such investments shall be in public debt securities with maturities suitable

to the needs of the Federal Supplemental Fund, as determined

by the Secretary, and bearing interest at rates determined by

the Secretary, taking into consideration current market yields on

outstanding marketable obligations of the United States of comparable maturities.

(c) RECORDKEEPING FOR ACTUARIAL STATUS.—The Secretary

shall provide for the keeping of such records as are necessary

for determining the actuarial status of the Federal Supplemental

Fund.

SEC. 11052. USES OF AMOUNTS IN FUND.

Amounts in the Federal Supplemental Fund shall be used

for the accumulation of funds in order to finance obligations of

the Federal Government for benefits and necessary administrative

expenses under the provisions of this subtitle, in accordance with

the methodology selected by the Secretary under section 11054(b),

except that payments from the Fund for administrative expenses

may be made only the extent and in such amounts as are provided

in advance in appropriations acts.

SEC. 11053. DETERMINATION OF ANNUAL PAYMENT INTO FEDERAL

SUPPLEMENTAL FUND.

(a) IN GENERAL.—At the end of each applicable fiscal year

the Secretary shall promptly pay into the Federal Supplemental

Fund from the General Fund of the Treasury an amount equal

to the sum of—

(1) the annual amortization amount for the year (which

may not be less than zero); and

(2) the covered administrative expenses for the year.

(b) DETERMINATION OF AMOUNTS.—For purposes of this section:

(1) The ‘‘original unfunded liability’’ is the amount that

is the present value as of the freeze date of future benefits

payable from the Federal Supplemental Fund.

(2) The ‘‘annual amortization amount’’ is the amount determined by the enrolled actuary to be necessary to amortize

in equal annual installments (until fully amortized)—

(A) the original unfunded liability over a 30-year

period;

(B) a net experience gain or loss over a 10-year period;

and

(C) any other changes in actuarial liability over a 20-

year period.

(3) The ‘‘covered administrative expenses’’ are the expenses

determined by the Secretary (on an annual basis) to be necessary to administer the Federal Supplemental Fund.

(c) TIMING.—The first applicable fiscal year under subsection

(a) is the first fiscal year that ends more than six months after

the replacement plan adoption date.
H. R. 2015—477

SEC. 11054. DETERMINATION OF METHODOLOGY FOR MAKING PAYMENTS.

(a) NOTICE TO PRESIDENT AND CONGRESS.—Not later than 18

months before the time that assets remaining in the Trust Fund

are projected to be insufficient for making Federal benefit payments

and covering necessary administrative expenses when due, the Secretary shall so advise the President and the Congress.

(b) SELECTION OF METHODOLOGY.—Before all available assets

of the Trust Fund have been depleted, the Secretary shall determine

whether Federal benefit payments and necessary administrative

expenses under this subtitle shall be made by one of the following

methods:

(1) Continuation of the Trust Fund using payments from

the Federal Supplemental Fund.

(2) Discontinuation of the Trust Fund, with payments

made—

(A) by direct payment by the Secretary from the Federal Supplemental Fund; or

(B) from the Federal Supplemental Fund through

another department or agency of the United States.

(c) ARRANGEMENTS BY SECRETARY.—The Secretary shall make

appropriate arrangements to implement the determinations made

in this subsection.

SEC. 11055. SPECIAL REQUIREMENTS UPON DISCONTINUATION OF

TRUST FUND.

(a) SUCCESSOR TO TRUSTEE.—If the Secretary determines that

the Trust Fund shall be discontinued after it has been depleted

of assets, the Secretary shall appoint a successor to the Trustee

to administer the requirements of this subtitle, with the same

powers and subject to the same conditions as were applicable to

the Trustee.

(b) CONTINUING APPLICATION OF TERMS AND CONDITIONS.—

The methodology selected by the Secretary under section 11054(b),

and the payment of benefits pursuant to such methodology, shall

be subject to the same arrangements, terms, and conditions as

were applicable under this subtitle to the Trust Fund and the

benefits paid under the Trust Fund (including provisions relating

to the treatment of the Trust Fund under certain laws).

CHAPTER 7—REPORTS

SEC. 11061. ANNUAL VALUATIONS AND REPORTS BY ENROLLED ACTUARY.

(a) DETERMINATION OF ACTUARIAL VALUATIONS.—The Trustee

shall engage an enrolled actuary (as defined in section 7701(a)(35)

of the Internal Revenue Code of 1986) who is a member of the

American Academy of Actuaries to shall perform an annual actuarial valuation (in a manner and form determined by the Secretary)

of the Trust Fund and the Federal Supplemental Fund for obligations assumed by the Federal Government under this subtitle.

(b) ANNUAL REPORT ON STATUS OF FUNDS.—The enrolled actuary shall prepare and submit to the Secretary and the Trustee

an annual report on the actuarial status of the Trust Fund and

the Federal Supplemental Fund, and shall include in the report—
H. R. 2015—478

(1) a projection of when assets in the Trust Fund will

be insufficient to pay benefits and necessary administrative

expenses when due; and

(2) a determination of the annual payment to the Federal

Supplemental Fund under section 11053.

SEC. 11062. REPORTS BY COMPTROLLER GENERAL.

(a) IN GENERAL.—The Comptroller General is authorized to

conduct evaluations of the administration of this subtitle to ensure

that the Trust Fund and Federal Supplemental Fund are being

properly administered and shall report the findings of such evaluations to the Secretary and the Congress.

(b) ACCESS TO INFORMATION.—For the purpose of evaluations

under subsection (a) the Comptroller General, subject to section

6103 of the Internal Revenue Code of 1986, shall have access

to and the right to copy any books, accounts, records, correspondence

or other pertinent documents that are in the possession of the

Secretary or the Trustee, or any contractor or subcontractor of

the Secretary or the Trustee.

CHAPTER 8—JUDICIAL ENFORCEMENT

SEC. 11071. JUDICIAL REVIEW.

(a) IN GENERAL.—A civil action may be brought—

(1) by a participant or beneficiary to enforce or clarify

rights to benefits from the Trust Fund or Federal Supplemental

Fund under this subtitle;

(2) by the Trustee—

(A) to enforce any claim arising (in whole or in part)

under this subtitle or the contract; or

(B) to recover benefits improperly paid from the Trust

Fund or Federal Supplemental Fund or to clarify a participant’s or beneficiary’s rights to benefits from the Trust

Fund or Federal Supplemental Fund; and

(3) by the Secretary to enforce any provision of this subtitle

or the contract.

(b) TREATMENT OF TRUST FUND.—The Trust Fund may sue

and be sued as an entity.

(c) EXCLUSIVE REMEDY.—This chapter shall be the exclusive

means for bringing actions against the Trust Fund, the Trustee

or the Secretary under this subtitle.

SEC. 11072. JURISDICTION AND VENUE.

(a) IN GENERAL.—The United States District Court for the

District of Columbia shall have exclusive jurisdiction and venue,

regardless of the amount in controversy, of—

(1) civil actions brought by participants or beneficiaries

pursuant to this subtitle, and

(2) any other action otherwise arising (in whole or part)

under this subtitle or the contract.

(b) REVIEW BY COURT OF APPEALS.—Notwithstanding any other

provision of law, any order of the United States District Court

for the District of Columbia issued pursuant to an action described

in subsection (a) that concerns the validity or enforceability of

any provision of this subtitle or seeks injunctive relief against

the Secretary or Trustee under this subtitle shall be reviewable

only pursuant to a notice of appeal to the United States Court

of Appeals for the District of Columbia Circuit.
H. R. 2015—479

(c) REVIEW BY SUPREME COURT.—Notwithstanding any other

provision of law, review by the Supreme Court of the United States

of a decision of the Court of Appeals that is issued pursuant

to subsection (b) may be had only if the petition for relief is

filed within 20 calendar days after the entry of such decision.

(d) RESTRICTIONS ON DECLARATORY OR INJUNCTIVE RELIEF.— No order of any court granting declaratory or injunctive relief

against the Secretary or the Trustee shall take effect during the

pendency of the action before such court, during the time an appeal

may be taken, or (if an appeal is taken or petition for certiorari

filed) during the period before the court has entered its final order

disposing of the action.

SEC. 11073. STATUTE OF LIMITATIONS.

(a) ACTION FOR BENEFITS.—Any civil action by an individual

with respect to a Federal benefit payment under this subtitle shall

be commenced within 180 days of a final benefit determination.

(b) ACTION FOR BREACH OF CONTRACT OR OTHER VIOLATIONS.— Except as provided in subsection (c), any civil action for breach

of the contract or any other violation of this subtitle shall be

commenced within the later of—

(1) six years after the last act that constituted the alleged

breach or violation or, in the case of an omission, six years

after the last date on which the alleged breach or violation

could have been cured; or

(2) three years after the earliest date on which the plaintiff

knew or could have reasonably been expected to have known

of the act or omission on which the action is based.

(c) SPECIAL RULE FOR ACTIONS AGAINST SECRETARY.—Notwithstanding subsection (b), any action against the Secretary arising

(in whole or part) under this subtitle or the contract shall be

commenced within one year of the events giving rise to the cause

of action.

SEC. 11074. TREATMENT OF MISAPPROPRIATION OF FUND AMOUNTS

AS FEDERAL CRIME.

The provisions of section 664 of title 18, United States Code

(relating to theft or embezzlement from employee benefit plans),

shall apply to the Trust Fund and the Federal Supplemental Fund.

CHAPTER 9—MISCELLANEOUS

SEC. 11081. COORDINATION BETWEEN SECRETARY, TRUSTEE, AND DISTRICT GOVERNMENT.

The Secretary, Trustee, and District Government shall carry

out responsibilities under this subtitle and under the contract in

a manner which promotes the cost-effective and efficient administration of benefit payments under the District Retirement Programs,

and in a manner which avoids unnecessary interruptions and delays

in paying individuals the full benefits to which they are entitled

under such Programs.

SEC. 11082. STUDY OF ALTERNATIVES FOR FINANCING FEDERAL

OBLIGATIONS.

(a) IN GENERAL.—As soon as practicable after the date of the

enactment of this subtitle, the Secretary shall enter into a contract

with an independent consultant to conduct a study of actuarial

alternatives for financing the federal obligations assumed under
H. R. 2015—480

this subtitle, together with an analysis of the impact of each alternative on the federal budget. The Secretary and the District Government shall cooperate with the consultant and shall provide direct

access to such information systems, records, documents, information, or data as will enable the consultant to conduct the study.

(b) DEADLINE.—The contract entered into under subsection (a)

shall require the consultant to report the results of the study

not later than 12 months after the date of enactment of this Act.

(c) NO EFFECT ON FEDERAL OBLIGATIONS.—Nothing in this

section may be construed to affect any obligation of the Federal

Government to make payments under this subtitle.

SEC. 11083. ISSUANCE OF REGULATIONS BY SECRETARY.

The Secretary is authorized to issue regulations to implement,

interpret, administer and carry out the purposes of this subtitle,

and, in the Secretary’s discretion, those regulations may have retroactive effect.

SEC. 11084. EFFECT ON REFORM ACT AND OTHER LAWS.

(a) REFORM ACT.—

(1) IN GENERAL.—This subtitle supersedes any provision

of the Reform Act inconsistent with this subtitle and the regulations thereunder.

(2) TERMINATION OF PAYMENTS TO DISTRICT RETIREMENT

FUNDS.—Section 144 of the Reform Act (DC Code, sec. 1–724)

is amended by adding at the end the following new subsection:

‘‘(f) Notwithstanding any other provision of this Act, no Federal

payments may be made to any Fund established by this title for

any fiscal year after fiscal year 1997.’’.

(b) NO EFFECT ON TAX TREATMENT OF BENEFITS.—Except as

otherwise specifically provided, nothing in this subtitle may be

construed to affect the application of any provision of the Internal

Revenue Code of 1986 to any annuity or other benefit provided

to or on behalf of any individual, including any disability benefit

or any portion of a retirement benefit attributable to an individual’s

disability status.

(c) NO EFFECT ON BENEFITS FOR PARK POLICE AND SECRET

SERVICE.—Nothing in this subtitle shall be deemed to alter or

amend in any way the provisions of existing law (including the

Reform Act) relating to the program of annuities, other retirement

benefits, or medical benefits for members and officers, retired members and officers, and survivors thereof, of the United States Park

Police force, the United States Secret Service, or the United States

Secret Service Uniformed Division.

SEC. 11085. REFERENCE TO NEW FEDERAL PROGRAM FOR RETIREMENT OF JUDGES OF DISTRICT OF COLUMBIA COURTS.

For provisions describing the retirement program for judges

and judicial personnel of the District of Columbia, see subchapter

B of chapter 4 of subtitle C.

SEC. 11086. FULL FAITH AND CREDIT.

Federal obligations for benefits under this subtitle are backed

by the full faith and credit of the United States.

SEC. 11087. SEVERABILITY OF PROVISIONS.

If any provision of this subtitle, or the application of such

provision to any person or circumstances, shall be held invalid,
H. R. 2015—481

the remainder of this subtitle, or the application of such provision

to persons or circumstances other than those as to which it is

held invalid, shall not be affected thereby.

Subtitle B—Management Reform Plans

SEC. 11101. SHORT TITLE.

This subtitle may be cited as the ‘‘District of Columbia Management Reform Act of 1997’’.

SEC. 11102. MANAGEMENT REFORM PLANS FOR DISTRICT GOVERNMENT.

(a) IN GENERAL.—In accordance with the provisions of this

subtitle, the District of Columbia Financial Responsibility and

Management Assistance Authority (hereafter in this subtitle

referred to as the ‘‘Authority’’) and the government of the District

of Columbia shall develop and implement management reform

plans—

(1) for each of the departments of the government of the

District of Columbia described in paragraph (1) of subsection

(b); and

(2) for all entities of the government of the District of

Columbia with respect to the items described in paragraph

(2) of subsection (b).

(b) DEPARTMENTS AND ITEMS SUBJECT TO PLANS.— (1) DEPARTMENTS DESCRIBED.—The departments referred

to in this paragraph are as follows:

(A) The Department of Administrative Services.

(B) The Department of Consumer and Regulatory

Affairs.

(C) The Department of Corrections.

(D) The Department of Employment Services.

(E) The Department of Fire and Emergency Medical

Services.

(F) The Department of Housing and Community Development.

(G) The Department of Human Services.

(H) The Department of Public Works.

(I) The Public Health Department.

(2) ITEMS DESCRIBED.—The items referred to in this paragraph are as follows:

(A) Asset management.

(B) Information resources management.

(C) Personnel.

(D) Procurement.

SEC. 11103. PROCEDURES FOR DEVELOPMENT OF PLANS.

(a) CONTRACTS WITH CONSULTANTS.—Not later than 30 days

after the date of the enactment of this Act (or, at the option

of the Authority and upon notification to Congress, not later than

60 days after such date), the Authority shall enter into contracts

with consultants to develop the management reform plans under

this subtitle.

(b) DEADLINE FOR SUBMISSION OF PLANS.—Under a contract

entered into with the Authority under subsection (a), a consultant
H. R. 2015—482

shall submit a completed management reform plan for the department or item involved within 90 days (or, at the option of the

Authority, within 120 days).

(c) AUTHORIZATION OF APPROPRIATIONS.—There are authorized

to be appropriated to the Authority such sums as may be necessary

to carry out the contracts entered into under this section.

SEC. 11104. IMPLEMENTATION OF PLANS.

(a) ESTABLISHMENT OF MANAGEMENT REFORM TEAMS.—With

respect to each management reform plan developed under this

subtitle, there shall be a management reform team consisting of

the following:

(1) The Chair of the Authority (or the Chair’s designee).

(2) The Chair of the Council of the District of Columbia

(or the Chair’s designee).

(3) The Mayor of the District of Columbia (or the Mayor’s

designee).

(4) In the case of a management reform plan for a department of the government of the District of Columbia, the head

of the department involved.

(b) RESPONSIBILITY FOR IMPLEMENTATION OF PLANS.—

(1) PLANS FOR SPECIFIC DEPARTMENTS.—In the case of a

management reform plan for a department of the government

of the District of Columbia, the head of the department involved

shall take any and all steps within his or her authority to

implement the terms of the plan, in consultation and coordination with the other members of the management reform team.

(2) PLANS FOR ITEMS COVERING ENTIRE DISTRICT GOVERN- MENT.—In the case of a management reform plan for an item

described in section 11102(b)(2), each member of the management reform team shall take any and all steps within the

member’s authority to implement the terms of the plan, under

the direction and subject to the instructions of the Chair of

the Authority (or the Chair’s designee).

(3) REPORT TO AUTHORITY.—In carrying out any of the

management reform plans under this section, the member of

the management reform team described in subsection (a)(4)

shall report to the Authority.

SEC. 11105. REFORM OF POWERS AND DUTIES OF DEPARTMENT HEADS.

(a) APPOINTMENT AND REMOVAL.— (1) APPOINTMENT.— (A) IN GENERAL.—During a control year, the head of

each department of the government of the District of

Columbia described in section 11102(b)(1) shall be

appointed by the Mayor as follows:

(i) Prior to appointment, the Authority may submit

recommendations for the appointment to the Mayor.

(ii) In consultation with the Authority and the

Council, the Mayor shall nominate an individual for

appointment and notify the Council of the nomination.

(iii) After the expiration of the 7-day period which

begins on the date the Mayor notifies the Council

of the nomination under clause (ii), the Mayor shall

notify the Authority of the nomination.

(iv) The nomination shall be effective subject to

approval by a majority vote of the Authority.
H. R. 2015—483

(B) APPOINTMENT BY AUTHORITY IF NO NOMINATION

MADE WITHIN 30 DAYS.—During a control year, if the Mayor

fails to nominate an individual to fill a vacancy in the

position of the head of any of the departments described

in section 11102(b)(1) during the 30-day period which

begins on the date the vacancy begins (or during such

longer period as the Authority may establish, upon notification to Congress), the Authority shall appoint an individual

to fill the vacancy.

(C) POSITIONS DEEMED VACANT UPON ENACTMENT.—

For purposes of this paragraph, a vacancy shall be deemed

to exist in the position of the head of each of the departments described in section 11102(b)(1) upon the date of

the enactment of this Act. Nothing in this subparagraph

shall be deemed to affect any of the powers and duties

of any individual serving as the head of such a department

as of such date.

(2) REMOVAL.—During a control year, the head of any of

the departments of the government of the District of Columbia

described in section 11102(b)(1) may be removed by the Authority or by the Mayor with the approval of the Authority.

(3) CONTROL YEAR DEFINED.—In this subsection, the term

‘‘control year’’ has the meaning given such term in section

305(4) of the District of Columbia Financial Responsibility and

Management Assistance Act of 1995.

(b) CONTROL OVER PERSONNEL.—

(1) IN GENERAL.—Notwithstanding any other provision of

law and except as provided in paragraph (3), all personnel

of the departments of the government of the District of Columbia described in section 11102(b)(1) shall be appointed by and

shall act under the direction and control of the head of the

department involved.

(2) REASSIGNMENT OF PERSONNEL.—The head of each of

the departments described in section 11102(b)(1) may reassign

any personnel of the department in such manner as the head

considers appropriate.

(3) REQUIREMENTS FOR ADVERSE ACTIONS.—The head of

each of the departments described in section 11102(b)(1) may

take corrective or adverse action against any personnel of the

department pursuant to rules (promulgated consistent with

the publication and comment provisions of the District of

Columbia Administrative Procedure Act) which—

(A) provide that adverse actions may only be taken

for cause;

(B) define the causes for which a corrective or adverse

action may be taken;

(C) require prior written notice of the grounds on which

the action is proposed to be taken;

(D) require an opportunity to be heard (which may

be in writing only) before the action becomes effective,

unless the head of the department finds that taking action

prior to the exercise of such opportunity is necessary to

protect the integrity of government operations, in which

case a hearing shall be afforded within a reasonable time

after the action becomes effective; and

(E) provide that the head of the department shall

be the final administrative authority with respect to the
H. R. 2015—484

action, subject to judicial review of the record of the

administrative proceeding in an action against the District

of Columbia to be brought only in the Superior Court

for the District of Columbia.

SEC. 11106. NO EFFECT ON POWERS OF FINANCIAL RESPONSIBILITY

AND MANAGEMENT ASSISTANCE AUTHORITY.

Nothing in this subtitle may be construed to affect the authority

of the District of Columbia Financial Responsibility and Management Assistance Authority to carry out any of its powers under

the District of Columbia Financial Responsibility and Management

Assistance Act of 1995.

Subtitle C—Criminal Justice

CHAPTER 1—CORRECTIONS

SEC. 11201. BUREAU OF PRISONS.

(a) FELONS SENTENCED PURSUANT TO THE TRUTH-IN-SENTENC- ING REQUIREMENTS.—Not later than October 1, 2001, any person

who has been sentenced to incarceration pursuant to the District

of Columbia Code or the truth-in-sentencing system as described

in section 11211 shall be designated by the Bureau of Prisons

to a penal or correctional facility operated or contracted for by

the Bureau of Prisons, for such term of imprisonment as the court

may direct. Such persons shall be subject to any law or regulation

applicable to persons committed for violations of laws of the United

States consistent with the sentence imposed.

(b) FELONS SENTENCED PURSUANT TO THE D.C. CODE.—Notwithstanding any other provision of law, not later than December

31, 2001, the Lorton Correctional Complex shall be closed and

the felony population sentenced pursuant to the District of Columbia

Code residing at the Lorton Correctional Complex shall be transferred to a penal or correctional facility operated or contracted

for by the Bureau of Prisons. Such persons shall be subject to

any law or regulation applicable to persons committed for violations

of laws of the United States consistent with the sentence imposed,

and the Bureau of Prisons shall be responsible for the custody,

care, subsistence, education, treatment and training of such persons.

(c) PRIVATIZATION.—

(1) TRANSITION OF INMATES FROM LORTON.—The Bureau

of Prisons shall house, in private contract facilities—

(A) at least 2000 District of Columbia sentenced felons

by December 31, 1999; and

(B) at least 50 percent of the District of Columbia

sentenced felony population by September 30, 2003.

(2) DUTIES OF DEPUTY ATTORNEY GENERAL.—The Deputy

Attorney General shall—

(A) be responsible for overseeing Bureau of Prisons

privatization activities; and

(B) submit a report to Congress on October 1 of each

year detailing the progress and status of compliance with

privatization requirements.

(3) DUTIES OF ATTORNEY GENERAL.—The Attorney General

shall—

(A) conduct a study of correctional privatization, including a review of relevant research and related legal issues,
H. R. 2015—485

and comparative analysis of the cost effectiveness and feasibility of private sector and Federal, State, and local

governmental operation of prisons and corrections programs at all security levels; and

(B) submit a report to Congress no later than one

year after the dater of enactment of this Act.

(d) SITE ACQUISITION AND CONSTRUCTION.—In order to house

the District of Columbia felony inmate population the Bureau of

Prisons shall acquire land, construct and build new facilities at

sites selected by the Bureau of Prisons, or contract for appropriate

bed space, but no facilities may be built on the grounds of the

Lorton Reservation.

(e) NATIONAL CAPITAL PLANNING.—Notwithstanding any other

provision of law, the requirements of the National Capital Planning

Act of 1952 (40 U.S.C. 71 et seq.) shall not apply to any actions

taken by the Bureau of Prisons or its agents or employees.

(f) DEPARTMENT OF CORRECTIONS AUTHORITY.—The District of

Columbia Department of Corrections shall remain responsible for

the custody, care, subsistence, education, treatment, and training

of any person convicted of a felony offense pursuant to the District

of Columbia Code and housed at the Lorton Correctional Complex

until December 31, 2001, or the date on which the last inmate

housed at the Lorton Correctional Complex is designated by the

Bureau of Prisons, whichever is earlier.

(g) LORTON CORRECTIONAL COMPLEX.—

(1) TRANSFER OF FUNCTIONS.—Notwithstanding any other

provision of law, to the extent the Bureau of Prisons assumes

functions of the Department of Corrections under this subtitle,

the Department is no longer responsible for such functions

and the provisions of ‘‘An Act to create a Department of Corrections in the District of Columbia’’, approved June 27, 1946

(D.C. Code 24–441, 442), that apply with respect to such functions are no longer applicable. Except as provided in paragraph

(2), any property on which the Lorton Correctional Complex

is located shall be transferred to the Department of the Interior.

(2) TRANSFER OF LAND.—

(A) IN GENERAL.—

(i) FAIRFAX COUNTY WATER AUTHORITY.—150 acres

of parcel 106–4–001–54 located west of Ox Road (State

Route 123) on which the Lorton Correctional Complex

is located shall be transferred, without consideration,

to the Fairfax County Water Authority of Fairfax, Virginia.

(ii) FAIRFAX COUNTY DEPARTMENT OF PARKS AND

RECREATION.—Any acres of parcel 106–4–001–54

located west of Ox Road (State Route 123) on which

the Lorton Correctional Complex is located not transferred under clause (i) shall be assigned to the Department of the Interior, National Park Service, for conveyance to the Fairfax County Department of Parks and

Recreation for recreational purposes pursuant to the

section 203(k)(2) of the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 484(k)(2)).

(B) CONDITION OF TRANSFER.—
H. R. 2015—486

(i) WATER SERVICES.—The United States Government shall not transfer any parcels under this paragraph unless the Fairfax County Water Authority certifies that it will continue to provide water services

to the Lorton Correctional Complex at the rate it provided water services prior to the transfer.

(ii) RESTRICTION ON TRANSFER.—No Federal agency

may transfer the property under this paragraph until

the prospective recipient of the property provides to

such agency—

(I) a land description survey suitable for

transferring property under Virginia law; and

(II) any necessary surveys to determine the

presence of any hazardous substances, contaminants or pollutants.

(iii) LORTON CORRECTIONAL COMPLEX.—The Lorton

Correctional Complex shall remain available for the

District of Columbia Department of Corrections to

house District of Columbia felony inmates until the

last inmate at the Complex has been designated by

the Bureau of Prisons or until December 31, 2003,

whichever is earlier.

(C) AUTHORIZATION.—The General Services Administration and the National Park Service is authorized to

expend any funds necessary to ensure that the transfer

or conveyance under subparagraph (A) complies with all

applicable environmental and historic preservation laws.

(3) WATER MAINS.—Any water mains located on or across

the Lorton Correctional Complex on the date of the transfers

under paragraph (2), that are owned by the Fairfax County

Water Authority and provide water to the public, shall be

permitted to remain in place, and shall be operated, maintained,

repaired, and replaced by the Fairfax County Water Authority

or a successor agency furnishing water to the public in Fairfax

County or adjacent jurisdictions, but shall not interfere with

operations of the Lorton Correctional Complex.

(g) DISTRICT OF COLUMBIA CORRECTIONS INFORMATION COUNCIL.—

(1) ESTABLISHMENT.—There is established a council to be

known as the District of Columbia Correction Information

Council (hereafter referred to as ‘‘Council’’.

(2) MEMBERSHIP.—The Council shall be composed of 3 members appointed as follows:

(A) 2 individuals appointed by the mayor of the District

of Columbia.

(B) 1 individual appointed by the Council of the District

of Columbia.

(3) COMPENSATION.—Members of the Council may not

receive pay, allowances, or benefits by reason of their service

on the Council.

(4) DUTIES.—The Council shall report to the Director of

the Bureau of Prisons with advice and information regarding

matters affecting the District of Columbia sentenced felon population.

(h) TIMING OF INMATE TRANSFERS.—As soon as practicable after

the date of the enactment of this Act, the Director of the Bureau
H. R. 2015—487

of Prisons shall begin the transferring of inmates to Bureau of

Prison or private contract facilities required by this section.

SEC. 11202. CORRECTIONS TRUSTEE.

(a) APPOINTMENT AND REMOVAL OF TRUSTEE.—

(1) APPOINTMENT.—Pursuant to the Federal Government’s

assumption of responsibility for persons convicted of a felony

offense under the District of Columbia Code, the Attorney General, in consultation with the Chairman of the District of

Columbia Financial Responsibility and Management Assistance

Authority (hereafter in this chapter referred to as the ‘‘D.C.

Control Board’’), the Mayor of the District of Columbia, the

District of Columbia Council, and the District of Columbia

judiciary, shall select a Corrections Trustee, who shall be an

independent officer of the government of the District of Columbia, to oversee financial operations of the District of Columbia

Department of Corrections until the Bureau of Prisons has

designated all felony offenders sentenced under the District

of Columbia Code to a penal or correctional facility operated

or contracted for by the Bureau of Prisons under section 11201.

(2) REMOVAL.—The Corrections Trustee may be removed

by the Mayor with the concurrence of the Attorney General.

The Attorney General shall have the authority to remove the

Corrections Trustee for misfeasance or malfeasance in office.

At the request of the Corrections Trustee, the District of Columbia Financial Responsibility and Management Assistance

Authority may exercise any of its powers and authorities on

behalf of the Corrections Trustee.

(b) DUTIES OF TRUSTEE.—Beginning on the date of appointment

and continuing until the felony population sentenced pursuant to

the District of Columbia Code residing at the Lorton Correctional

Complex is transferred to a penal or correctional facility operated

or contracted for by the Bureau of Prisons, the Corrections Trustee

shall carry out the following responsibilities (notwithstanding any

law of the District of Columbia to the contrary):

(1) Exercise financial oversight over the District of Columbia Department of Corrections and allocate funds as enacted

in law or as otherwise allocated, including funds for short

term improvements which are necessary for the safety and

security of staff, inmates and the community.

(2) Purchase any necessary goods or services on behalf

of the District of Columbia Department of Corrections consistent with Federal procurement regulations as they apply to

the Bureau of Prisons.

(c) FUNDING.—

(1) IN GENERAL.—Funds available for the Corrections

Trustee, staff and all necessary and appropriate operations

shall be made available to the extent provided in appropriations

acts to the Corrections Trustee. Funding requests shall be

proposed by the Corrections Trustee to the President and Congress for each Fiscal Year.

(2) REIMBURSEMENT TO BUREAU OF PRISONS.—Upon receipt

of Federal funds, the Corrections Trustee shall immediately

provide an advance reimbursement to the Bureau of Prisons

of all funds identified by the Congress for construction of new

prisons and major renovations, which shall remain available

until expended. The Bureau of Prisons shall be responsible
H. R. 2015—488

and accountable for determining how these funds shall be used

for renovation and construction, including type, security level,

and location of new facilities.

(3) ACCOUNTABILITY AND REPORTS.—The District of Columbia Department of Corrections and the Bureau of Prisons shall

maintain accountability for funds reimbursed from the Corrections Trustee, and shall provide expense reports by project

at the request of the Corrections Trustee.

(d) COMPENSATION AND DETAILEES.—The Corrections Trustee

shall be compensated at a rate not to exceed the basic pay payable

for Level IV of the Executive Schedule. The Corrections Trustee

may appoint and fix the pay of additional staff without regard

to the provisions of the District of Columbia Code governing appointments and salaries, without regard to the provisions of title 5,

United States Code, governing appointments in the competitive

service, and without regard to the provisions of chapter 51 and

subchapter III of chapter 53 of title 5, United States Code, relating

to classification and General Schedule pay rates. Upon request

of the Corrections Trustee, the head of any Federal department

or agency may, on a reimbursable or non reimbursable basis, provide services and detail any personnel of that department or agency

to the Corrections Trustee to assist in carrying out his duties.

(e) PROCUREMENT AND JUDICIAL REVIEW.—The provisions of

the District of Columbia Code governing procurement shall not

apply to the Corrections Trustee. The Corrections Trustee may

seek judicial enforcement of his authority to carry out his duties.

(f) PRESERVATION OF RETIREMENT AND CERTAIN OTHER RIGHTS

OF FEDERAL EMPLOYEES WHO BECOME EMPLOYED BY THE CORREC- TIONS TRUSTEE.— (1) IN GENERAL.—A Federal employee who, within 3 days

after separating from the Federal Government, is appointed

Corrections Trustee or becomes employed by the Corrections

Trustee—

(A) shall be treated as an employee of the Federal

Government for purposes of chapters 83, 84, 87, and 89

of title 5 of the United States Code; and

(B) if, after serving with the Trustee, such employee

becomes reemployed by the Federal Government, shall be

entitled to credit for the full period of such individual’s

service with the Trustee, for purposes of determining the

applicable leave accrual rate.

(2) REGULATIONS.—The Office of Personnel Management

shall prescribe such regulations as may be necessary to carry

out this subsection.

SEC. 11203. PRIORITY CONSIDERATION FOR EMPLOYEES OF THE DISTRICT OF COLUMBIA.

(a) ESTABLISHMENT.—As soon as practicable after appointment,

the Bureau of Prisons, working with the Corrections Trustee, shall

establish a priority consideration program to facilitate employment

placement for employees of the District of Columbia Department

of Corrections who are scheduled to be separated from service

as a result of closing the Lorton Correctional Complex.

(b) PROVISIONS.—The priority consideration program shall

include provisions under which a vacant federal correctional institution position established as a result of this Act and identified

for external hiring shall not be filled by the appointment of any
H. R. 2015—489

individual from outside of the District of Columbia Department

of Corrections if there is available any interested applicant within

the District of Columbia Department of Corrections who meets

all qualification and suitability requirements for Bureau of Prisons

law enforcement positions, including those related to criminal history, educational experience and level of functions, drug use, and

work-related misconduct. The priority consideration program shall

also include provisions under which an employee described in subsection (a) who does not meet the qualification and suitability

requirements for Bureau of Prisons law enforcement positions shall

receive priority consideration for other Federal positions, and any

such employee who is found to be well qualified for such a position

may be appointed without regard to the provisions of title 5, United

States Code, governing appointments in the competitive service.

Such program shall terminate one year after the closing of the

Lorton Correctional Complex.

SEC. 11204. AMENDMENTS RELATED TO PERSONS WITH A MENTAL

DISEASE OR DEFECT.

Title 18, United States Code, is amended as follows:

(1) Section 4246 is amended—

(A) in subsection (a) by inserting ‘‘in the custody of

the Bureau of Prisons’’ after ‘‘certifies that a person’’; and

(B) by adding at the end the following new subsection:

‘‘(h) DEFINITION.—As used in this chapter the term ‘‘State’’

includes the District of Columbia.’’.

(2) Section 4247(a) is amended—

(A) in paragraph (1)(D) by striking ‘‘and’’ after the

semicolon;

(B) in paragraph (2) by striking the period and inserting ‘‘; and’’; and

(C) by adding at the end the following new paragraph:

‘‘(3) ‘State’ includes the District of Columbia.’’.

(3) Section 4247(j) of title 18, United States Code, is amended by striking ‘‘This chapter does’’ and inserting ‘‘Sections 4241,

4242, 4243, and 4244 do’’.

SEC. 11205. LIABILITY FOR AND LITIGATION AUTHORITY OF CORRECTIONS TRUSTEE.

(a) LIABILITY.—The District of Columbia shall defend any civil

action or proceeding brought in any court or other official Federal,

state, or municipal forum against the Corrections Trustee, or

against the District of Columbia or it officers, employees, or agents,

and shall assume any liability resulting from such an action or

proceeding, if the action or proceeding arises from—

(1) an inmate’s confinement with the District of Columbia

Department of Corrections;

(2) the District of Columbia’s operation or management

of the buildings, facilities, or lands comprising the Lorton property; or

(3) the District of Columbia’s operations or activities occurring on any property not specifically transferred to the administrative control of the Federal Government pursuant to this

Act.

(b) LITIGATION.—

(1) CORPORATION COUNSEL.—Subject to paragraph (2), the

Corporation Counsel of the District of Columbia shall provide

litigation services to the Corrections Trustee, except that the
H. R. 2015—490

Trustee may instead elect, either generally or in relation to

particular cases or classes of cases, to hire necessary staff

and personnel or enter into contracts for the provision of litigation services at the Trustee’s expense.

(2) ATTORNEY GENERAL.—

(A) IN GENERAL.—Notwithstanding paragraph (1), with

respect to any litigation involving the Corrections Trustee,

the Attorney General may—

(i) direct the litigation of the Trustee, and of the

District of Columbia on behalf of the Trustee; and

(ii) provide on a reimbursable or non-reimbursable

basis litigation services for the Trustee at the Trustee’s

request or on the Attorney General’s own initiative.

(B) APPROVAL OF SETTLEMENT.—With respect to any

litigation involving the Corrections Trustee, the Trustee

may not agree to any settlement involving any form of

equitable relief without the approval of the Attorney General. The Trustee shall provide to the Attorney General

such notice and reports concerning litigation as the Attorney General may direct.

(C) DISCRETION.—Any decision to exercise any authority of the Attorney General under this subsection shall

be in the sole discretion of the Attorney General and shall

not be reviewable in any court.

(c) LIMITATIONS.—Nothing in this section shall be construed—

(1) as a waiver of sovereign immunity, or as limiting any

other defense or immunity that would otherwise be available

to the United States, the District of Columbia, their agencies,

officers, employees, or agents; or

(2) to obligate the District of Columbia to represent or

indemnify the Corrections Trustee or any officer, employee,

or agent where the Trustee (or any person employed by or

acting under the authority of the Trustee) acts beyond the

scope of his authority.

SEC. 11206. PERMITTING EXPENDITURE OF FUNDS TO CARRY OUT CERTAIN SEWER AGREEMENT.

Notwithstanding the fourth sentence of section 446 of the District of Columbia Self-Government and Governmental Reorganization Act, the District of Columbia is authorized to obligate or

expend such funds as may be necessary during a fiscal year (beginning with fiscal year 1997) to carry out the Sewage Delivery System

and Capacity Purchase Agreement between Fairfax County and

the District of Columbia with respect to Project Number K00301,

without regard to the amount appropriated for such purpose in

the budget of the District of Columbia for the fiscal year.

CHAPTER 2—SENTENCING

SEC. 11211. TRUTH IN SENTENCING COMMISSION.

(a) ESTABLISHMENT.—There is established as an independent

agency of the District of Columbia a District of Columbia Truth

in Sentencing Commission (hereafter in this chapter referred to

as ‘‘the Commission’’), which shall consist of 7 voting members.

The Attorney General, or the Attorney General’s designee, shall

be the chairperson of the Commission and shall have the duty

to convene meetings of the Commission to ensure that it fulfills
H. R. 2015—491

its responsibilities under this Act. The members shall serve for

the life of the Commission and shall be subject to removal only

for neglect of duty, malfeasance in office, or other good cause

shown.

(b) MEMBERSHIP.—The members of the Commission shall have

knowledge and responsibility with respect to criminal justice matters. Two members of the Commission shall be judges of the Superior Court of the District of Columbia, and shall be appointed

by the chief judge of that court; one member shall be a representative of the District of Columbia Council and shall be appointed

by the chairperson or chairperson pro temp of the Council; one

member shall be a representative of the executive branch of the

District of Columbia government with official responsibilities for

criminal justice matters in the District of Columbia and shall be

appointed by the Mayor of the District of Columbia; one member

shall be a representative of the District of Columbia Public Defender

Service and shall be appointed by the Director of such Service;

and one member shall be a representative of the United States

Attorney for the District of Columbia and shall be appointed by

the United States Attorney. A representative of the Federal Bureau

of Prisons and a representative of the office of Corporation Counsel

of the District of Columbia shall each serve as a non-voting, ex

officio member.

(c) VACANCY.—Any vacancy in the Commission shall be filled

in the same manner as the original appointment. Members of

the Commission shall receive no compensation for their services,

but shall be reimbursed for travel, subsistence, and other necessary

expenses incurred in the performance of duties vested in the

Commission, but not in excess of the maximum amounts authorized

under section 456 of title 28, United States Code.

SEC. 11212. GENERAL DUTIES, POWERS, AND GOALS OF COMMISSION.

(a) RECOMMENDATIONS.—The Commission shall, within 180

days after the enactment of this Act, make recommendations to

the District of Columbia Council for amendments to the District

of Columbia Code with respect to the sentences to be imposed

for all felonies committed on or after 3 years after the date of

enactment of this Act.

(b) CONTENTS OF RECOMMENDATIONS.—Such recommendations

shall—

(1) as to all felonies described in paragraph (h), meet the

truth in sentencing standards of 20104(a)(1) of the Violent

Crime Control and Law Enforcement Act of 1994;

(2) as to all felonies ensure that—

(A) an offender will have a sentence imposed that—

(i) reflects the seriousness of the offense and the

criminal history of the offender; and

(ii) provides for just punishment, affords adequate

deterrence to potential future criminal conduct of the

offender and others, and provides the offender with

needed educational or vocational training, medical

care, and other correctional treatment;

(B) good time shall be calculated pursuant to section

3624 of title 18, United States Code; and

(C) an adequate period of supervision will be imposed

to follow release from the imprisonment.
H. R. 2015—492

(c) DEATH PENALTY.—The Commission shall not have the power

to recommend a sentence of death for any offense nor for any

offense a term of imprisonment less than that prescribed by the

D.C. Code as a mandatory minimum sentence.

(d) OTHER FEATURES OF RECOMMENDATIONS.—The Commission

shall ensure that its recommendations—

(1) will be neutral as to the race, sex, marital status,

ethnic origin, religious affiliation, national origin, creed, socioeconomic status, and sexual orientation of offenders;

(2) will include provisions designed to maximize the

effectiveness of the drug court of the Superior Court of the

District of Columbia; and

(3) will be fully consistent with all other provisions of

this Act, including provisions relating to the administration

of probation, parole, and supervised release for District of

Columbia Code offenders.

(e) VOTE; TERMINATION.—The recommendations of the Commission required under subsections (a)–(d) shall be adopted by a vote

of not less than 6 of the members and when made shall be transmitted forthwith to the District of Columbia Council The Commission

shall cease to exist 90 days after the transmittal of recommendations to the Council or on the last date on which timely recommendations may be made if the Commission is unable to agree

on such recommendations.

(f) RECOMMENDATIONS FOR IMPLEMENTATION.—In fulfilling its

responsibilities, the Commission may adopt by a vote of not less

than 6 of the members and transmit to the Superior Court of

the District of Columbia recommended rules and principles for

determining the sentence to be imposed, including—

(1) whether to impose a sentence of probation, a term

of imprisonment and/or a fine, and the amount or length

thereof, and including intermediate sanctions in appropriate

cases; and

(2) whether multiple sentences of terms of imprisonment

should run concurrently or consecutively.

(g) POWERS.—The Commission is authorized—

(1) to hold hearings and call witnesses that might assist

the Commission in the exercise of its powers;

(2) to perform such other functions as may be necessary

to carry out the purposes of this section; and

(3) except as otherwise provided, to conduct business, exercise powers, and fulfill duties by the vote of a majority of

the members present at any meeting.

(h) FELONIES DESCRIBED.—The felonies described in this subsection are violations of any of the following provisions of law:

(1) The following provisions relating to arson:

(A) Section 820 of the Act entitled ‘‘An Act to establish

a code of law for the District of Columbia,’’ approved March

3, 1901 (DC Code, sec. 22–401).

(B) Section 821 of the Act entitled ‘‘An Act to establish

a code of law for the District of Columbia,’’ approved March

3, 1901 (DC Code, sec. 22–402).

(2) The following provisions relating to felony assault:

(A) Section 803 of the Act entitled ‘‘An Act to establish

a code of law for the District of Columbia,’’ approved March

3, 1901 (DC Code, sec. 22-501).
H. R. 2015—493

(B) Section 804 of the Act entitled ‘‘An Act to establish

a code of law for the District of Columbia,’’ approved March

3, 1901 (DC Code, sec. 22-502).

(C) Section 805 of the Act entitled ‘‘An Act to establish

a code of law for the District of Columbia,’’ approved March

3, 1901 (DC Code, sec. 22-503).

(D) Section 806a of the Act entitled ‘‘An Act to establish

a code of law for the District of Columbia,’’ approved March

3, 1901 (DC Code, sec. 22-504.1).

(E) Section 432 of the Revised Statutes, relating to

the District of Columbia (DC Code, sec. 22-505).

(F) Section 807 of the Act entitled ‘‘An Act to establish

a code of law for the District of Columbia,’’ approved March

3, 1901 (DC Code, sec. 22-506).

(3) Section 502 of the District of Columbia Theft and White

Collar Crimes Act of 1982 (DC Code, sec. 22–722) (relating

to obstruction of justice).

(4) Section 3 of the Act of February 13, 1885 (chapter

58; 23 Stat. 303) (DC Code, sec. 22–901) (relating to cruelty

to children).

(5) Section 823 of the Act entitled ‘‘An Act to establish

a code of law for the District of Columbia,’’ approved March

3, 1901 (DC Code, sec. 22–1801) (relating to first degree burglary).

(6) Section 812 of the Act entitled ‘‘An Act to establish

a code of law for the District of Columbia,’’ approved March

3, 1901 (DC Code, sec. 22–2101) (relating to kidnapping).

(7) The following provisions relating to murder and manslaughter:

(A) Section 798 of the Act entitled ‘‘An Act to establish

a code of law for the District of Columbia,’’ approved March

3, 1901 (DC Code, sec. 22-2401).

(B) Section 799 of the Act entitled ‘‘An Act to establish

a code of law for the District of Columbia,’’ approved March

3, 1901 (DC Code, sec. 22-2402).

(C) Section 800 of the Act entitled ‘‘An Act to establish

a code of law for the District of Columbia,’’ approved March

3, 1901 (DC Code, sec. 22-2403).

(D) Section 801 of the Act entitled ‘‘An Act to establish

a code of law for the District of Columbia,’’ approved March

3, 1901 (DC Code, sec. 22-2404).

(E) Section 802 of the Act entitled ‘‘An Act to establish

a code of law for the District of Columbia,’’ approved March

3, 1901 (DC Code, sec. 22-2405).

(F) Section 802a of the Act entitled ‘‘An Act to establish

a code of law for the District of Columbia,’’ approved March

3, 1901 (DC Code, sec. 22-2406).

(8) Section 8 of the Act of July 15, 1932 (chapter 492;

47 Stat. 698) (DC Code, sec. 22–2601) (relating to prison

breach).

(9) The Act entitled ‘‘An Act to prohibit the introduction

of contraband into the District of Columbia penal institutions,’’

approved December 15, 1941 (DC Code, sec. 22–2603).

(10) Section 810 of the Act entitled ‘‘An Act to establish

a code of law for the District of Columbia,’’ approved March

3, 1901 (DC Code, sec. 22–2901) (relating to robbery).
H. R. 2015—494

(11) Section 811a of the Act entitled ‘‘An Act to establish

a code of law for the District of Columbia,’’ approved March

3, 1901 (DC Code, sec. 22–2903) (relating to carjacking).

(12) The Dangerous Weapons Act (DC Code, sec. 22-3201

et seq.).

(13) The following provisions relating to sex offenses:

(A) Section 201 of the Anti-Sexual Abuse Act of 1994

(DC Code, sec. 22–4102).

(B) Section 202 of the Anti-Sexual Abuse Act of 1994

(DC Code, sec. 22–4103).

(C) Section 203 of the Anti-Sexual Abuse Act of 1994

(DC Code, sec. 22–4104).

(D) Section 204 of the Anti-Sexual Abuse Act of 1994

(DC Code, sec. 22–4105).

(E) Section 207 of the Anti-Sexual Abuse Act of 1994

(DC Code, sec. 22–4108).

(F) Section 208 of the Anti-Sexual Abuse Act of 1994

(DC Code, sec. 22–4109).

(G) Section 209 of the Anti-Sexual Abuse Act of 1994

(DC Code, sec. 22–4110).

(H) Section 212 of the Anti-Sexual Abuse Act of 1994

(DC Code, sec. 22–4113).

(I) Section 213 of the Anti-Sexual Abuse Act of 1994

(DC Code, sec. 22–4114).

(J) Section 214 of the Anti-Sexual Abuse Act of 1994

(DC Code, sec. 22–4115).

(K) Section 215 of the Anti-Sexual Abuse Act of 1994

(DC Code, sec. 22–4116).

(L) Section 217 of the Anti-Sexual Abuse Act of 1994

(DC Code, sec. 22–4118).

(M) Section 219 of the Anti-Sexual Abuse Act of 1994

(DC Code, sec. 22–4120).

(14) Section 401 of the District of Columbia Uniform Controlled Substances Act of 1981 (D.C. Code, sec. 33-541) (relating

to recidivist drug offenders), but only in the case of a second

or subsequent violation.

SEC. 11213. DATA COLLECTION.

(a) DATA FOR ATTORNEY GENERAL.—The Commission, the Superior Court of the District of Columbia, the District of Columbia

Department of Corrections, and other agencies as necessary shall

provide to the Attorney General such data as are requested in

furtherance of this Act.

(b) SUPERIOR COURT.—The Superior Court of the District of

Columbia, in connection with defendants sentenced in such Court,

shall provide to the Commission and the Attorney General such

data as are requested for planning, statistical analysis or projecting

future prison population levels.

SEC. 11214. ENACTMENT OF AMENDMENTS TO DISTRICT OF COLUMBIA

CODE.

If, within 270 days after the date of the enactment of this

Act, the Council of the District of Columbia has failed to amend

the District of Columbia Code to enact in whole the recommendations of the Commission under this chapter, or if the Commission

fails to make such recommendations within the deadline established

under such section, the Attorney General (after consultation with

the Commission) shall promulgate within 90 days amendments
H. R. 2015—495

to the District of Columbia Code with respect to the sentences

to be imposed for all offenses committed on or after 3 years after

the date of the enactment of this Act. Such amendments shall

be consistent with the standards of subsections (a) through (d)

of section 11212. Such amendments shall take effect 30 days after

the Attorney General transmits the recommendations to Congress.

CHAPTER 3—OFFENDER SUPERVISION AND PAROLE

SEC. 11231. PAROLE.

(a) PAROLING JURISDICTION.—

(1) JURISDICTION OF PAROLE COMMISSION TO GRANT OR DENY

PAROLE AND TO IMPOSE CONDITIONS.—Not later than one year

after date of the enactment of this Act, the United States

Parole Commission shall assume the jurisdiction and authority

of the Board of Parole of the District of Columbia to grant

and deny parole, and to impose conditions upon an order of

parole, in the case of any imprisoned felon who is eligible

for parole or reparole under the District of Columbia Code.

The Parole Commission shall have exclusive authority to amend

or supplement any regulation interpreting or implementing

the parole laws of the District of Columbia with respect to

felons, provided that the Commission adheres to the rulemaking

procedures set forth in section 4218 of title 18, United States

Code.

(2) JURISDICTION OF PAROLE COMMISSION TO REVOKE PAROLE

OR MODIFY CONDITIONS.—On the date in which the District

of Columbia Offender Supervision, Defender, and Courts Services Agency is established under section 11233, the United

States Parole Commission shall assume any remaining powers,

duties, and jurisdiction of the Board of Parole of the District

of Columbia, including jurisdiction to revoke parole and to

modify the conditions of parole, with respect to felons.

(3) JURISDICTION OF SUPERIOR COURT.—On the date on

which the District of Columbia Offender Supervision, Defender,

and Courts Services Agency is established under section 11233,

the Superior Court of the District of Columbia shall assume

the jurisdiction and authority of the Board of Parole of the

District of Columbia to grant, deny, and revoke parole, and

to impose and modify conditions of parole, with respect to

misdemeanants.

(b) ABOLITION OF THE BOARD OF PAROLE.—On the date on

which the District of Columbia Offender Supervision, Defender,

and Courts Services Agency is established under section 11233,

the Board of Parole established in the District of Columbia Board

of Parole Amendment Act of 1987 shall be abolished.

(c) RULEMAKING AND LEGISLATIVE RESPONSIBILITY FOR PAROLE

MATTERS.—The Parole Commission shall exercise the authority

vested in it by this section pursuant to the parole laws and regulations of the District of Columbia, except that the Council of the

District of Columbia and the Board of Parole of the District of

Columbia may not revise any such laws or regulations (as in effect

on the date of the enactment of this Act) without the concurrence

of the Attorney General.

(d) INCREASE IN THE AUTHORIZED NUMBER OF UNITED STATES

PAROLE COMMISSIONERS.—Section 2(c) of the Parole Commission
H. R. 2015—496

Phaseout Act of 1996 (Public Law 104–232) is amended to read

as follows:

‘‘(c) The United States Parole Commission shall have no more

than five members.’’.

SEC. 11232. PRETRIAL SERVICES, DEFENSE SERVICES, PAROLE, ADULT

PROBATION AND OFFENDER SUPERVISION TRUSTEE.

(a) APPOINTMENT AND REMOVAL.—

(1) APPOINTMENT.—The Attorney General, in consultation

with the Chairman of the District of Columbia Financial

Responsibility and Management Assistance Authority (hereafter in this section referred to as the ‘‘D.C. Control Board’’)

and the Mayor of the District of Columbia, shall appoint a

Pretrial Services, Defense Services, Parole, Adult Probation

and Offender Supervision Trustee, who shall be an independent

officer of the government of the District of Columbia, to effectuate the reorganization and transition of functions and funding

relating to pretrial services, defense services, parole, adult

probation and offender supervision.

(2) REMOVAL.—The Trustee may be removed by the Mayor

with the concurrence of the Attorney General. The Attorney

General shall have the authority to remove the Trustee for

misfeasance or malfeasance in office. At the request of the

Trustee, the District of Columbia Financial Responsibility and

Management Assistance Authority may exercise any of its powers and authorities on behalf of the Trustee.

(b) AUTHORITY.—Beginning on the date of appointment, and

continuing until the District of Columbia Offender Supervision,

Defender, and Courts Services Agency is established under section

11233, the Trustee shall—

(1) have the authority to exercise all powers and functions

authorized for the Director of the District of Columbia Offender

Supervision, Defender and Courts Services Agency;

(2) have the authority to direct the actions of all agencies

of the District of Columbia whose functions will be assumed

by or within the District of Columbia Offender Supervision,

Defender and Courts Services Agency, and of the Board of

Parole of the District of Columbia, including the authority

to discharge or replace any officers or employees of these agencies, except that the Trustee may not direct the conduct of

particular cases by the District of Columbia Public Defender

Service;

(3) exercise financial oversight over all agencies of the

District of Columbia whose functions will be assumed by or

within the District of Columbia Offender Supervision, Defender

and Courts Services Agency, and over the Board of Parole

of the District of Columbia, and allocate funds to these agencies

as appropriated by Congress and allocated by the President;

(4) receive and transmit to the District of Columbia Pretrial

Services Agency all funds appropriated for such agency; and

(5) receive and transmit to the District of Columbia Public

Defender Service all funds appropriated for such agency.

(c) COMPENSATION.—The Trustee shall be compensated at a

rate not to exceed the basic pay payable for Level IV of the Executive

Schedule. The Trustee may appoint and fix the pay of additional

staff without regard to the provisions of the District of Columbia

Code governing appointments and salaries, without regard to the
H. R. 2015—497

provisions of title 5, United States Code, governing appointments

in the competitive service, and without regard to the provisions

of chapter 51 and subchapter III of Chapter 53 of title 5, United

States Code, relating to classification and General Schedule pay

rates. Upon request of the Trustee, the head of any Federal department or agency may, on a reimbursable or non-reimbursable basis,

provide services and/or detail any personnel of that department

or agency to the Trusteeship to assist in carrying out its duties.

(d) PROCUREMENT AND JUDICIAL REVIEW.—The provisions of

the District of Columbia Code governing procurement shall not

apply to the Trustee. The Trustee may enter into such contracts

as the Trustee considers appropriate to carry out the Trustee’s

duties. The Trustee may seek judicial enforcement of the Trustee’s

authority to carry out the Trustee’s duties.

(e) PRESERVATION OF RETIREMENT AND CERTAIN OTHER RIGHTS

OF FEDERAL EMPLOYEE WHO BECOMES THE TRUSTEE OR FEDERAL

EMPLOYEES WHO BECOME EMPLOYED BY THE TRUSTEE.—

(1) IN GENERAL.—A Federal employee who, within 3 days

after separating from the Federal Government, is appointed

Trustee or becomes employed by the Trustee—

(A) shall be treated as an employee of the Federal

Government for purposes of chapters 83, 84, 87, and 89

of title 5 of the United States Code; and

(B) if, after serving with the Trustee, such employee

becomes reemployed by the Federal Government, shall be

entitled to credit for the full period of such individual’s

service with the Trustee, for purposes of determining the

applicable leave accrual rate.

(2) REGULATIONS.—The Office of Personnel Management

shall prescribe such regulations as may be necessary to carry

out this subsection.

(f) FUNDING.—Funds available for operations of the Trustee

shall be made available to the extent provided in appropriations

acts to the Trustee, through the State Justice Institute. Funding

requests shall be proposed by the Trustee to the President and

Congress for each Fiscal Year.

(g) LIABILITY AND LITIGATION AUTHORITY.—

(1) LIABILITY.—The District of Columbia shall defend any

civil action or proceeding brought in any court or other official

Federal, state, or municipal forum against the Trustee, or

against the District of Columbia or its officers, employees,

or agents, and shall assume any liability resulting from such

an action or proceeding, if the action or proceeding arises from

the—

(A) supervision of offenders on probation, parole, or

supervised release;

(B) provision of pretrial services by the District of

Columbia; or

(C) activities of the District of Columbia Board of

Parole.

(2) LITIGATION.—

(A) CORPORATION COUNSEL.—Subject to subparagraph

(B), the Corporation Counsel of the District of Columbia

shall provide litigation services to the Trustee, except that

the Trustee may instead elect, either generally or in relation to particular cases or classes of cases, to hire necessary
H. R. 2015—498

staff and personnel or enter into contracts for the provision

of litigation services at the Trustee’s expense.

(B) ATTORNEY GENERAL.—

(i) IN GENERAL.—Notwithstanding subparagraph

(A), with respect to any litigation involving the Trustee,

the Attorney General may—

(I) direct the litigation of the Trustee, and

of the District of Columbia on behalf of the Trustee;

and

(II) provide on a reimbursable or nonreimbursable basis litigation services for the

Trustee at the Trustee’s request or on the Attorney

General’s own initiative.

(ii) APPROVAL OF SETTLEMENT.—With respect to

any litigation involving the Trustee, the Trustee may

not agree to any settlement involving any form of

equitable relief without the approval of the Attorney

General. The Trustee shall provide to the Attorney

General such notice and reports concerning litigation

as the Attorney General may direct.

(iii) DISCRETION.—Any decision to exercise any

authority of the Attorney General under this paragraph

shall be in the sole discretion of the Attorney General

and shall not be reviewable in any court.

(3) LIMITATIONS.—Nothing in this section shall be construed—

(1) as a waiver of sovereign immunity, or as limiting any

other defense or immunity that would otherwise be available

to the United States, the District of Columbia, their agencies,

officers, employees, or agents; or

(2) to obligate the District of Columbia to represent or

indemnify the Corrections Trustee or any officer, employee,

or agent where the Trustee (or any person employed by or

acting under the authority of the Trustee) acts beyond the

scope of his authority.

(h) CERTIFICATION.—The District of Columbia Offender Supervision, Defender, and Courts Services Agency shall assume its

duties pursuant to section 11233 when, within the period beginning

one year after the date of the enactment of this subtitle and ending

three years after the date of the enactment of this subtitle, the

Trustee certifies to the Attorney General and the Attorney General

concurs that the Agency can carry out the functions described

in section 11233 and the United States Parole Commission can

carry out the functions described in section 11231.

SEC. 11233. OFFENDER SUPERVISION, DEFENDER AND COURTS SERVICES AGENCY.

(a) ESTABLISHMENT.— There is established within the executive

branch of the Federal Government the District of Columbia Offender

Supervision, Defender, and Courts Services Agency (hereafter in

this section referred to as the ‘‘Agency’’) which shall assumes its

duties not less than one year or more than three years after the

enactment of this Act.

(b) DIRECTOR.—

(1) APPOINTMENT AND COMPENSATION.—The Agency shall

be headed by a Director appointed by the President, by and

with the advice and consent of the Senate, for a term of six
H. R. 2015—499

years. The Director shall be compensated at the rate prescribed

for Level IV of the Executive Schedule, and may be removed

from office prior to the expiration of term only for neglect

of duty, malfeasance in office, or other good cause shown.

(2) POWERS AND DUTIES OF DIRECTOR.—The Director shall—

(A) submit annual appropriation requests for the

Agency to the Office of Management and Budget;

(B) determine, in consultation with the Chief Judge

of the United States District Court for the District of

Columbia, the Chief Judge of the Superior Court of the

District of Columbia, and the Chairman of the United

States Parole Commission, uniform supervision and reporting practices for the Agency;

(C) hire and supervise supervision officers and support

staff for the Agency;

(D) direct the use of funds made available to the

Agency;

(E) enter into such contracts, leases, and cooperative

agreements as may be necessary for the performance of

the Agency’s functions, including contracts for substance

abuse and other treatment and rehabilitative programs;

(F) develop and operate intermediate sanctions programs for sentenced offenders; and

(G) arrange for the supervision of District of Columbia

paroled offenders in jurisdictions outside the District of

Columbia.

(c) FUNCTIONS.—

(1) IN GENERAL.—The Agency shall provide supervision,

through qualified supervision officers, for offenders on probation, parole, and supervised release pursuant to the District

of Columbia Code. The Agency shall carry out its responsibilities on behalf of the court or agency having jurisdiction over

the offender being supervised.

(2) SUPERVISION OF RELEASED OFFENDERS.—The Agency

shall supervise any offender who is released from imprisonment

for any term of supervised release imposed by the Superior

Court of the District of Columbia. Such offender shall be subject

to the authority of the United States Parole Commission until

completion of the term of supervised release. The United States

Parole Commission shall have and exercise the same authority

as is vested in the United States district courts by paragraphs

(d) through (i) of section 3583 of title 18, United States Code,

except that—

(A) the procedures followed by the Commission in

exercising such authority shall be those set forth in chapter

311 of title 18, United States Code; and

(B) an extension of a term of supervised release under

subsection (e)(2) of section 3583 may only be ordered by

the Superior Court upon motion from the Commission.

(3) SUPERVISION OF PROBATIONERS.—Subject to appropriations and program availability, the Agency shall supervise all

offenders placed on probation by the Superior Court of the

District of Columbia. The Agency shall carry out the conditions

of release imposed by the Superior Court (including conditions

that probationers undergo training, education, therapy, counseling, drug testing, or drug treatment), and shall make such
H. R. 2015—500

reports to the Superior Court with respect to an individual

on probation as the Superior Court may require.

(4) SUPERVISION OF DISTRICT OF COLUMBIA PAROLEES.—

The Agency shall supervise all individuals on parole pursuant

to the District of Columbia Code. The Agency shall carry out

the conditions of release imposed by the United States Parole

Commission or, with respect to a misdemeanant, by the Superior Court of the District of Columbia, and shall make such

reports to the Commission or Court with respect to an individual on parole supervision as the Commission or Court may

require.

(d) AUTHORITY OF OFFICERS.—The supervision officers of the

Agency shall have and exercise the same powers and authority

as are granted by law to United States Probation and Pretrial

Officers.

(e) PRETRIAL SERVICES AGENCY AND PUBLIC DEFENDER SERVICE.—

(1) INDEPENDENT ENTITIES.—The District of Columbia Pretrial Services Agency established by subchapter I of chapter

13 title 23, District of Columbia Code, and the District of

Columbia Public Defender Service established by title III of

the District of Columbia Court Reform and Criminal Procedure

Act of 1970 (D.C. Code, sec. 1-2701 et seq.) shall function

as independent entities within the Agency.

(2) SUBMISSION ON BEHALF OF PRETRIAL SERVICES.—The

Director of the Agency shall submit, on behalf of the District

of Columbia Pretrial Services Agency and with the approval

of the Director of the Pretrial Services Agency, an annual

appropriation request to the Office of Management and Budget.

Such request shall be separate from the request submitted

for the Agency.

(3) SUBMISSION ON BEHALF OF PUBLIC DEFENDER SERVICE.—

The Director of the Agency shall submit, on behalf of the

District of Columbia Public Defender Service and with the

approval of the Director of the Public Defender Service, an

annual appropriation request to the Office of Management and

Budget. Such request shall be separate from that submitted

for the Agency.

(4) LIABILITY OF DISTRICT OF COLUMBIA.—The District of

Columbia shall defend any civil action or proceeding brought

in any court or other official Federal, state, or municipal forum

against the District of Columbia Pretrial Services Agency, the

District of Columbia Public Defender Service, or the District

of Columbia or its officers, employees, or agents, and shall

assume any liability resulting from such an action or proceeding, if the action or proceeding arises from the activities of

the District of Columbia Pretrial Services Agency or the District

of Columbia Public Defender Service prior to the date on which

the Offender Supervision, Defender and Courts Services Agency

assumes its duties.

(5) LITIGATION.—

(A) CORPORATION COUNSEL.—Subject to subparagraph

(B), the Corporation Counsel of the District of Columbia

shall provide litigation services to the District of Columbia

Pretrial Services Agency and the District of Columbia Public Defender Service, except that the District of Columbia
H. R. 2015—501

Pretrial Services Agency and the District of Columbia Public Defender Service may instead elect, either generally

or in relation to particular cases or classes of cases, to

hire necessary staff and personnel or enter into contracts

for the provision of litigation services at such agency’s

expense.

(B) ATTORNEY GENERAL.—

(i) IN GENERAL.—Notwithstanding subparagraph

(A), with respect to any litigation involving the District

of Columbia Pretrial Services Agency, the Attorney

General may—

(I) direct the litigation of the agency, and of

the District of Columbia on behalf of the agency;

and

(II) provide on a reimbursable or nonreimbursable basis litigation services for the

agency at the agency’s request or on the Attorney

General’s own initiative.

(ii) APPROVAL OF SETTLEMENT.—With respect to

any litigation involving the District of Columbia Pretrial Services Agency, the agency may not agree to

any settlement involving any form of equitable relief

without the approval of the Attorney General. The

agency shall provide to the Attorney General such

notice and reports concerning litigation as the Attorney

General may direct.

(iii) DISCRETION.—Any decision to exercise any

authority of the Attorney General under this paragraph

shall be in the sole discretion of the Attorney General

and shall not be reviewable in any court.

SEC. 11234. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated through the State

Justice Institute in each fiscal year such sums as may be necessary

for the following:

(1) District of Columbia Pretrial Services Agency.

(2) District of Columbia Public Defender Service.

(3) Supervision of offenders on probation, parole, or supervised release for offenses under the District of Columbia Code.

(4) Operation of the parole system for offenders convicted

of offenses under the District of Columbia Code.

(5) Operation of the Trusteeship described in section 11232.

CHAPTER 4—DISTRICT OF COLUMBIA COURTS

Subchapter A—Transfer of Administration and Financing of

Courts to Federal Government

SEC. 11241. AUTHORIZATION OF APPROPRIATIONS.

(a) AUTHORIZATIONS.—There are authorized to be appropriated

through the State Justice Institute in each fiscal year such sums

as may be necessary for the following:

(1) The Superior Court of the District of Columbia.

(2) The District of Columbia Court of Appeals.

(3) The District of Columbia Court System.

(b) SUBMISSION TO OMB.—The Joint Committee on Judicial

Administration in the District of Columbia shall include in its
H. R. 2015—502

submissions to the Office of Management and Budget and the

Congress, the budget and appropriations requests of the Superior

Court for the District of Columbia, the District of Columbia Court

of Appeals, and the District of Columbia Court System.

SEC. 11242. ADMINISTRATION OF COURTS UNDER DISTRICT OF COLUMBIA CODE.

(a) SUBMISSION OF ANNUAL BUDGET REQUESTS BY JOINT

COMMITTEE ON JUDICIAL ADMINISTRATION.—Section 11–1701(b)(4),

District of Columbia Code, is amended to read as follows:

‘‘(4) Submission of the annual budget requests of the District of Columbia Court of Appeals, the Superior Court of the

District of Columbia, and the District of Columbia Court System

as the integrated budget of the District of Columbia courts,

except that such requests may be modified upon the concurrence

of four of the five members of the Joint Committee.’’.

(b) AUDIT OF ACCOUNTS OF COURTS.—Section 11–1723(a)(3),

District of Columbia Code, is amended to read as follows:

‘‘(3) The Fiscal Officer shall be responsible for the approval

of vouchers and the internal auditing of the accounts of the

courts and shall arrange for an annual independent audit of

the accounts of the courts.’’.

(c) APPOINTMENT AND REMOVAL OF COURT PERSONNEL.—Section

11–1725(b) of the District of Columbia Code is amended to read

as follows:

‘‘(b) The Executive Officer shall appoint, and may remove,

the Director of Social Services, the clerks of the courts, the AuditorMaster, and all other nonjudicial personnel for the courts (other

than the Register of Wills and personal law clerks and secretaries

of the judges) as may be necessary, subject to—

‘‘(1) regulations approved by the Joint Committee; and

‘‘(2) the approval of the chief judge of the court to which

the personnel are or will be assigned.

Appointments and removals of court personnel shall not be subject

to the laws, rules, and limitations applicable to District of Columbia

employees.’’.

(d) PROCUREMENT OF EQUIPMENT AND SUPPLIES.—Section 11–

1742(b), District of Columbia Code, is amended to read as follows:

‘‘(b) The Executive Officer shall be responsible for the procurement of necessary equipment, supplies, and services for the courts

and shall have power, subject to applicable law, to reimburse the

District of Columbia government for services provided and to contract for such equipment, supplies, and services as may be necessary.’’.

(e) BUDGET AND EXPENDITURES.—

(1) IN GENERAL.—Section 11–1743, District of Columbia

Code, is amended to read as follows:

‘‘§ 11–1743. Annual Budget and Expenditures.

‘‘(a) The Joint Committee shall prepare and submit to the

Mayor and the Council of the District of Columbia annual estimates

of the expenditures and appropriations necessary for the maintenance and operations of the District of Columbia courts, and shall

submit such estimates to Congress and the Director of the Office

of Management and Budget after submitting them to the Mayor

and the Council. All such estimates shall be included in the budget
H. R. 2015—503

without revision by the President but subject to the President’s

recommendations.

‘‘(b) The District of Columbia Courts may make such expenditures as may be necessary to execute efficiently the functions vested

in the Courts.

‘‘(c) All expenditures of the Courts shall be allowed and paid

upon presentation of itemized vouchers signed by the certifying

officer designated by the Joint Committee. All such expenditures

shall be paid out of moneys appropriated for purposes of the

Courts.’’.

(2) CLERICAL AMENDMENT.—The item relating to section

11–1743 in the table of sections for subchapter III of chapter

17 of title 11, District of Columbia Code, is amended to read

as follows:

‘‘11–1743. Annual budget and expenditures.’’.

SEC. 11243. BUDGETING AND FINANCING REQUIREMENTS FOR COURTS

UNDER HOME RULE ACT.

(a) BUDGET OF COURTS.—Section 445 of the District of Columbia

Self-Government and Governmental Reorganization Act (DC Code,

Title 11 App.) is amended to read as follows:

‘‘SEC. 445. The District of Columbia courts shall prepare and

annually submit to the Director of the Office of Management and

Budget, for inclusion in the annual budget, annual estimates of

the expenditures and appropriations necessary for the maintenance

and operation of the District of Columbia court system. The courts

shall submit as part of their budgets both a multiyear plan and

a multiyear capital improvements plan and shall submit a statement presenting qualitative and quantitative descriptions of court

activities and the status of efforts to comply with reports of the

Comptroller General of the United States.’’.

(b) FINANCIAL DUTIES OF THE MAYOR.—Section 448(a)(6) of

such Act (DC Code, sec. 47–310(a)(6)) is amended to read as follows:

‘‘(6) supervise and be responsible for the levying and collection of all taxes, special assessments, license fees, and other

revenues of the District, as required by law, and receive all

moneys receivable by the District from the Federal Government

or from any agency or instrumentality of the District, except

that this paragraph shall not apply to moneys from the District

of Columbia Courts.’’.

(c) FUNDS OF THE DISTRICT.—Section 450 of such Act (DC

Code, sec. 47–130), is amended to read as follows:

‘‘SEC. 450. The General Fund of the District shall be composed

of those District revenues which on the effective date of this title

are paid into the Treasury of the United States and credited either

to the General Fund of the District or its miscellaneous receipts,

but shall not include any revenues which are applied by law to

any special fund existing on the date of enactment of this title.

The Council may from time to time establish such additional special

funds as may be necessary for the efficient operation of the government of the District. All money received by any agency, officer,

or employee of the District in its or his official capacity shall

belong to the District government and shall be paid promptly to

the Mayor for deposit in the appropriate fund, except that all

money received by the District of Columbia Courts shall be deposited in the Treasury of the United States or the Crime Victims

Fund.’’.
H. R. 2015—504

(d) REDUCTIONS IN BUDGETS OF INDEPENDENT AGENCIES.—Section 453(c) of such Act (DC Code, sec. 47–304.1(c)) is amended

to read as follows:

‘‘(c) Subsection (a) shall not apply to amounts appropriated

or otherwise made available to the Council or to the District of

Columbia Financial Responsibility and Management Assistance

Authority established under section 101(a) of the District of Columbia Financial Responsibility and Management Assistance Act of

1995.’’.

(e) TREATMENT OF COURT FEES IN CALCULATION OF LIMITS

ON DISTRICT BORROWING.—Section 603 of such Act (DC Code, sec.

47–313) is amended—

(1) in subsection (b)—

(A) in paragraph (1)—

(i) in the first sentence, by striking ‘‘less court

fees, any fees’’ and inserting ‘‘less any fees’’; and

(ii) in the second sentence, by striking ‘‘section

2501 , title 47 of the District of Columbia Code, as

amended’’ and inserting ‘‘title VI of the District of

Columbia Revenue Act of 1939’’;

(B) in paragraph (3)(A), by striking ‘‘less court fees,

any fees’’ and inserting ‘‘less any fees’’; and

(2) in subsection (c), by striking the last sentence (relating

to budget estimates of the District of Columbia courts).

SEC. 11244. AUDITING OF ACCOUNTS OF COURT SYSTEM.

(a) POWERS OF DISTRICT OF COLUMBIA AUDITOR.—Section 455

of the District of Columbia Self-Government and Governmental

Reorganization Act (DC Code, sec. 47–117) is amended by adding

at the end the following new subsection:

‘‘(g) This section shall not apply to the District of Columbia

Courts or the accounts and operations thereof.’’.

(b) SUBMISSION OF GAO AUDIT REPORTS TO MAYOR AND COUN- CIL.—Section 715(b) of title 31, United States Code (DC Code,

sec. 47–118.1(b)), is amended by striking ‘‘and the Mayor’’ and

inserting ‘‘and (other than the audit reports of the District of

Columbia Courts) the Mayor’’.

(c) INDEPENDENT ANNUAL AUDIT.—Section 4 of Public Law 94–

399 (DC Code, sec. 47–119) is amended by adding at the end

the following new subsection:

‘‘(d) This section shall not apply to the District of Columbia

Courts or the financial operations thereof.’’.

SEC. 11245. MISCELLANEOUS BUDGETING AND FINANCING REQUIREMENTS FOR COURTS UNDER DISTRICT LAW.

(a) DEPOSIT OF PUBLIC FUNDS.—Section 2(21) of the District

of Columbia Depository Act of 1977 (DC Code, sec. 47–341(21))

is amended by striking ‘‘a court, agency’’ and inserting ‘‘an agency’’.

(b) REPROGRAMMING OF BUDGET AMOUNTS.—Section 4(h) of D.C.

Law 3–100 (DC Code, sec. 47–363(h)) is amended by striking ‘‘the

District of Columbia courts,’’.

(c) CONTROL OF GRANT FUNDS.—(1) Section 3(1) of D.C. Law

3–104 (DC Code, sec. 47–382(1)) is amended to read as follows:

‘‘(1) ‘Agency’ means the highest organizational structure

of the District at which budgeting data is aggregated, but

shall not include the District of Columbia Courts.’’

(2) Section 4(b) of D.C. Law 3–104 (DC Code, sec. 47–383(b))

is amended to read at follows:
H. R. 2015—505

‘‘(b) The Trustees of the University of the District of Columbia,

the Board of Education, and the D.C. General Hospital Commission

shall submit to the Mayor two copies of the application and completed approval form, as an advisory notice, concurrent with submitting the application and completed approval form to a grant-making

agency in accordance with rules and regulations issued pursuant

to subsection (c) of this section.’’.

SEC. 11246. OTHER PROVISIONS RELATING TO ADMINISTRATION OF

DISTRICT OF COLUMBIA COURTS.

(a) JUROR FEES.—Section 11–1912(a), District of Columbia

Code, is amended to read as follows:

‘‘(a) Notwithstanding section 602(a) of the District of Columbia

Self-Government and Governmental Reorganization Act, grand and

petit jurors serving in the Superior Court shall receive fees and

expenses at rates established by the Board of Judges of the Superior

Court’’, except that such fees and expenses may not exceed the

respective rates paid to such jurors in the Federal system.’’.

(b) COMPENSATION AND BENEFITS FOR COURT PERSONNEL.—

(1) IN GENERAL.—Section 11–1726, District of Columbia

Code, is amended to read as follows:

‘‘§ 11–1726. Compensation and benefits for court personnel.

‘‘(a) In the case of nonjudicial employees of the District of

Columbia courts whose compensation is not otherwise fixed by

this title, the Executive Officer shall fix the rates of compensation

of such employees without regard to chapter 51 and subchapter

III of chapter 53 of title 5, United States Code. Any rates so

established shall be subject to the limitation on pay fixed by

administrative action in section 5373 of such title. In fixing the

rates of compensation of nonjudicial employees under this section,

the Executive Officer may be guided by the rates of compensation

fixed for employees in the executive and judicial branches of the

Federal Government or State or local governments occupying the

same or similar positions or occupying positions of similar responsibility, duty, and difficulty.

‘‘(b)(1) Nonjudicial employees of the District of Columbia courts

shall be treated as employees of the Federal Government solely

for purposes of any of the following provisions of title 5, United

States Code:

‘‘(A) Subchapter 1 of chapter 81 (relating to compensation

for work injuries).

‘‘(B) Chapter 83 (relating to retirement).

‘‘(C) Chapter 84 (relating to the Federal Employees’ Retirement System).

‘‘(D) Chapter 87 (relating to life insurance).

‘‘(E) Chapter 89 (relating to health insurance).

‘‘(2) The employing agency shall make contributions under the

provisions referred to paragraph (1) at the same rates applicable

to agencies of the Federal Government.

‘‘(3) An individual who is a nonjudicial employee of the District

of Columbia courts on the date of the enactment of the Balanced

Budget Act of 1997 may make, within 60 days after such date,

an election under section 8351 or section 8432 of title 5, United

States Code, to participate in the Thrift Savings Plan for Federal

employees.
H. R. 2015—506

‘‘(c)(1) Judicial employees of the District of Columbia courts

shall be treated as employees of the Federal Government for purposes of any of the following provisions of title 5, United States

Code:

‘‘(A) Subchapter 1 of chapter 81 (relating to compensation

for work injuries).

‘‘(B) Chapter 87 (relating to life insurance).

‘‘(C) Chapter 89 (relating to health insurance).

‘‘(2) The employing agency shall make contributions under the

provisions referred to paragraph (1) at the same rates applicable

to agencies of the Federal Government.

‘‘(3) For purposes of section 8706(b) and section 8901(3)(B)

of title 5, United States Code, benefits paid from the retirement

system for judicial employees of the District of Columbia courts

or from the system providing benefits to survivors of such employees

shall be considered an annuity.

‘‘(4) For purposes of section 8901(3)(A) of title 5, United States

Code, the retirement system for judicial employees of the District

of Columbia courts shall be considered a retirement system for

employees of the Government.’’.

(2) CLERICAL AMENDMENT.—The table of sections for subchapter II of chapter 15 of title 11, District of Columbia Code,

is amended by amending the item relating to section 11–1726

to read as follows:

‘‘11–1726. Compensation and benefits for court personnel.’’.

(3) EFFECTIVE DATE.—The amendments made by this subsection shall apply with respect to all months beginning after

the date on which the Director of the Office of Personnel

Management issues regulations to carry out section 11–1726,

District of Columbia Code (as amended by paragraph (1)).

(c) RETIREMENT PERIOD FOR EXECUTIVE OFFICER.—Section 11–

1703(d), District of Columbia Code, is amended by striking the

period at the end and inserting the following: ‘‘, except that the

Executive Officer (if initially hired after October 1, 1997) shall

be eligible for retirement under subchapter III of chapter 15 when

the Executive Officer has completed 7 years of service as Executive

Officer, whether continuous or not.’’.

Subchapter B—Judicial Retirement Program

SEC. 11251. JUDICIAL RETIREMENT AND SURVIVORS ANNUITY FUND.

(a) ESTABLISHMENT OF FUND.—Section 11–1570, District of

Columbia Code, is amended to read as follows:

‘‘§ 11–1570. The District of Columbia Judicial Retirement and

Survivors Annuity Fund.

‘‘(a) There is established in the Treasury a fund known as

the District of Columbia Judicial Retirement and Survivors Annuity

Fund (hereafter in this section referred to as the ‘Fund’), which

shall consist of the following assets:

‘‘(1) Amounts deposited by, or deducted and withheld from

the salary and retired pay of, a judge under section 1563

or 1567 of this title, which shall be credited to an individual

account of the judge.

‘‘(2) Amounts transferred from the District of Columbia

Judges’ Retirement Fund under section 124(c)(1) of the District
H. R. 2015—507

of Columbia Retirement Reform Act, as amended by section

11252 of the Balanced Budget Act of 1997.

‘‘(3) Amounts deposited under subsection (d).

‘‘(4) Any return on investment of the assets of the Fund.

‘‘(b)(1) The Secretary of the Treasury (hereafter in this section

referred to as the ‘Secretary’) shall be responsible for the administration of the Fund. The Secretary may carry out such responsibilities through an agreement with a Trustee or contractor (who

may be the Trustee or contractor appointed to carry out responsibilities relating to Federal benefit payments under title I of the

National Capital Revitalization and Self-Government Improvement

Act of 1997) and an enrolled actuary (as defined in section

7701(a)(35) of the Internal Revenue Code of 1986) who is a member

of the American Academy of Actuaries (who may be the enrolled

actuary engaged under such Act).

‘‘(2) The chief judges of the District of Columbia Court of

Appeals and Superior Court of the District of Columbia shall submit

to the President and the Secretary an annual estimate of the

expenditures and appropriations necessary for the maintenance

and operation of the Fund, and such supplemental and deficiency

estimates as may be required from time to time for the same

purposes, according to law.

‘‘(3) The Secretary may cause periodic examinations of the

Fund to be made by an enrolled actuary (as defined in section

7701(a)(35) of the Internal Revenue Code of 1986) who is a member

of the American Academy of Actuaries.

‘‘(c)(1) Amounts in the Fund are available for the payment

of judges’ retirement pay, annuities, refunds, and allowances under

this subchapter.

‘‘(2) Notwithstanding any other provision of District law or

any other law, rule, or regulation, the Secretary may review benefit

determinations under this subchapter made prior to the date of

the enactment of the National Capital Revitalization and SelfGovernment Improvement Act of 1997, and shall make initial benefit determinations after such date.

‘‘(d)(1) Subject to the availability of appropriations, there shall

be deposited in the Fund, not later than the close of each fiscal

year (beginning with the first fiscal year which ends more than

6 months after the replacement plan adoption date described in

section 103(13) of the National Capital Revitalization and SelfGovernment Improvement Act of 1997), an amount equal to the

sum of—

‘‘(A) the normal cost for the year;

‘‘(B) the annual amortization amount for the year (which

may not be less than zero); and

‘‘(C) the covered administrative expenses for the year.

‘‘(2) For purposes of this subsection:

‘‘(A) The ‘original unfunded liability’ is the amount that

is the present value as of June 30, 1997, of future benefits

payable from the Fund (net the sum of future normal cost

and plan assets as of such date).

‘‘(B) The ‘annual amortization amount’ is the amount determined by the enrolled actuary to be necessary to amortize

in equal annual installments (until fully amortized)—

‘‘(i) the original unfunded liability over a 30-year

period;
H. R. 2015—508

‘‘(ii) a net experience gain or loss over a 10-year period;

and

‘‘(iii) any other changes in actuarial liability over a

20-year period.

‘‘(C) The ‘covered administrative expenses’ are the expenses

determined by the Secretary (on an annual basis) to be necessary to administer the Fund.

‘‘(3) Deposits made under this subsection shall be taken from

sums available for that fiscal year for the payment of the expenses

of the Court, and shall not be credited to the account of any

individual.

‘‘(e) The Secretary shall invest such portion of the Fund as

is not in the judgment of the Secretary required to meet current

withdrawals. Such investments shall be in public debt securities

with maturities suitable to the needs of the Fund, as determined

by the Secretary, and bearing interest at rates determined by

the Secretary, taking into consideration current market yields on

outstanding marketable obligations of the United States of comparable maturities.

‘‘(f) None of the moneys mentioned in this subchapter shall

be assignable, either in law or in equity, or be subject to execution,

levy, attachment, garnishment, or other legal process (except to

the extent permitted pursuant to the District of Columbia Spouse

Equity Act of 1988).

‘‘(g) Notwithstanding any other provision of District law, rule,

or regulation, any civil action brought—

‘‘(1) by an individual to enforce or clarify rights to benefits

from the Fund; or

‘‘(2) by the Secretary—

‘‘(A) to enforce any claim arising (in whole or in part)

under this section or any contract entered into to carry

out this section,

‘‘(B) to recover benefits improperly paid from the Fund

or to clarify an individual’s rights to benefits from the

Fund, or

‘‘(C) to enforce any provision of this section or any

contract entered into to carry out this section,

shall be brought in the United States District Court for the District

of Columbia.’’.

(b) CLERICAL AMENDMENT.—The table of sections for subchapter

III of chapter 15 of title 11, District of Columbia Code, is amended

by amending the item relating to section 11–1570 to read as follows:

‘‘11–1570. The District of Columbia Judicial Retirement and Survivors Annuity

Fund.’’.

SEC. 11252. TERMINATION OF CURRENT FUND AND PROGRAM.

(a) TERMINATION OF JUDGES’ RETIREMENT FUND.—Section 124

of the District of Columbia Retirement Reform Act (DC Code, sec.

1–714) is amended by striking subsection (c) and inserting the

following:

‘‘(c)(1) Notwithstanding any other provision of this Act or the

amendments made by this Act, upon the date the assets of the

Retirement Fund described in title I of the National Capital Revitalization and Self-Government Improvement Act of 1997 are transferred, the assets of the District of Columbia Judges’ Retirement

Fund established under subsection (a) shall be transferred to the

District of Columbia Judicial Retirement and Survivors Annuity
H. R. 2015—509

Fund under section 11–1570, District of Columbia Code, and no

amounts shall be deposited into the District of Columbia Judges’

Retirement Fund after the date on which the assets are so transferred.

‘‘(2) The District of Columbia Judges’ Retirement Fund established under subsection (a) shall be continued in the Treasury

and appropriated for the purposes provided in this Act until such

time as all amounts in such Fund have been expended or transferred

to the District of Columbia Judicial Retirement and Survivors Annuity Fund pursuant to paragraph (1). Thereafter any payments of

retirement pay, annuities, refunds, and allowances for judicial

personnel of the District of Columbia shall be paid from the District

of Columbia Judicial Retirement and Survivors Annuity Fund in

accordance with subchapter III of chapter 15 of title 11, District

of Columbia Code.’’.

(b) REMOVAL OF JUDGES FROM RETIREMENT BOARD.—Section

121(b)(1)(A) of the District of Columbia Retirement Reform Act

(DC Code, sec. 1–711(b)(1)(A)) is amended—

(1) in the matter preceding clause (i), by striking ‘‘13’’

and inserting ‘‘11’’;

(2) by striking clause (vii); and

(3) by redesignating clauses (viii) and (ix) as clauses (vii)

and (viii).

SEC. 11253. CONFORMING AMENDMENTS.

(a) TRANSFER OF AUTHORITY OVER FUND TO SECRETARY OF

TREASURY.—Title 11, District of Columbia Code, is amended as

follows:

(1) In sections 11–1561(8)(C), 11–1562(c), 11–1563(b), 11–

1563(c), 11–1564(d)(6), 11–1564(d)(7), 11–1566(a), and 11–

1570(c), by striking ‘‘Commissioner [Mayor]’’ each place it

appears and inserting ‘‘Secretary of the Treasury’’.

(2) In sections 11–1566(b)(2), 11–1567(a), 11–1567(b), by

striking ‘‘Mayor’’ each place it appears and inserting ‘‘Secretary

of the Treasury’’.

(3) In sections 11–1564(d)(2)(A) and 11–1568.1(1)(B), by

striking ‘‘Mayor of the District of Columbia’’ each place it

appears and inserting ‘‘Secretary of the Treasury’’.

(4) In section 11–1563(a), by striking ‘‘paid to the Custodian

of Retirement Funds (as defined in section 102(6) of the District

of Columbia Retirement Reform Act)’’ and inserting ‘‘paid to

the Secretary of the Treasury’’.

(b) DEFINITION OF FUND.—Section 11–1561(4), District of

Columbia Code, is amended to read as follows:

‘‘(4) The term ‘fund’ means the District of Columbia Judicial

Retirement and Survivors Annuity Fund established by sections

11–1570.’’.

(c) TREATMENT OF FEDERAL SERVICE OF JUDGES.—Section 11–

1564(d)(4), District of Columbia Code, is amended by striking

‘‘Judges’ Retirement Fund established by section 124(a) of the District of Columbia Retirement Reform Act’’ and inserting ‘‘Judicial

Retirement and Survivors Annuity Fund under section 11–1570’’.
H. R. 2015—510

Subchapter C—Miscellaneous Conforming and

Administrative Provisions

SEC. 11261. TREATMENT OF COURTS UNDER MISCELLANEOUS DISTRICT LAWS.

(a) FINANCIAL RESPONSIBILITY AND MANAGEMENT ASSISTANCE

ACT.—Paragraph (5) of section 305 of the District of Columbia

Financial Responsibility and Management Assistance Act of 1995

(DC Code, sec. 47–393(5)) is amended to read as follows:

‘‘(5) The term ‘District government’ means the government

of the District of Columbia, including any department, agency

or instrumentality of the government of the District of Columbia; any independent agency of the District of Columbia established under part F of title IV of the District of Columbia

Self-Government and Governmental Reorganization Act or any

other agency, board, or commission established by the Mayor

or the Council; the Council of the District of Columbia; and

any other agency, public authority, or public benefit corporation

which has the authority to receive monies directly or indirectly

from the District of Columbia (other than monies received

from the sale of goods, the provision of services, or the loaning

of funds to the District of Columbia), except that such term

does not include the Authority.’’.

(b) MERIT PERSONNEL ACT.—(1) Section 201 of the District

of Columbia Comprehensive Merit Personnel Act of 1978 (DC Code,

sec. 1–602.1) is amended—

(A) by striking ‘‘(a) Except as provided in subsection (b)

or unless’’ and inserting ‘‘Unless’’; and

(B) by striking subsection (b).

(2) Section 301(13) of the District of Columbia Comprehensive

Merit Personnel Act of 1978 (DC Code, sec. 1–603.1(13)) is amended

by striking ‘‘, the Superior Court of the District of Columbia, and

the District of Columbia Court of Appeals shall be considered

independent agencies’’ and inserting ‘‘shall be considered an

independent agency’’.

SEC. 11262. REPRESENTATION OF INDIGENTS IN CRIMINAL CASES.

(a) BUDGET.—Section 11–2607, District of Columbia Code, is

amended to read as follows:

‘‘§ 11–2607. Preparation of Budget.

‘‘The joint committee shall prepare and include in its annual

budget requests for the District of Columbia court system estimates

of the expenditures and appropriations necessary for furnishing

representation by private attorneys to persons entitled to representation in accordance with section 2601 of this title.’’.

(b) AUTHORIZATION OF APPROPRIATIONS.—Section 11–2608 of

the District of Columbia Code is amended to read as follows:

‘‘§ 11–2608. Authorization of appropriations.

‘‘There are authorized to be appropriated through the State

Justice Institute such sums as may be necessary to pay for representation by private attorneys and related services under this chapter.

When so specified in appropriation Acts, such appropriations shall

remain available until expended.’’.

(c) REPEAL AUTHORITY OF COUNCIL.—
H. R. 2015—511

(1) IN GENERAL.—Section 11–2609, District of Columbia

Code, is repealed.

(2) CLERICAL AMENDMENT.—The table of sections for chapter 26 of title 11, District of Columbia Code, is amended by

striking the item relating to section 11–2609.

CHAPTER 5—PRETRIAL SERVICES AGENCY AND PUBLIC

DEFENDER SERVICE

SEC. 11271. AMENDMENTS AFFECTING PRETRIAL SERVICES AGENCY.

(a) IN GENERAL.—Sections 23–1304 through 23–1308 of the

District of Columbia Code are amended to read as follows:

‘‘§ 23–1304. Executive committee; composition; appointment

and qualifications of Director

‘‘(a) The agency shall be advised by an executive committee

of seven members, of which four members shall constitute a quorum.

The Executive Committee shall be composed of the following persons

or their designees: the Chief Judge of the United States Court

of Appeals for the District of Columbia Circuit, the Chief Judge

of the United States District Court for the District of Columbia,

the Chief Judge of the District of the Columbia Court of Appeals,

the Chief Judge of the Superior Court of the District of Columbia,

the United States Attorney for the District of Columbia, the Director

of the District of Columbia Public Defender Service, and the Director

of the District of Columbia Offender Supervision, Defender and

Courts Services Agency.

‘‘(b) The Chief Judge of the United States Court of Appeals

for the District of Columbia Circuit and the Chief Judge of the

United States District Court for the District of Columbia, in consultation with the other members of the executive committee, shall

appoint a Director of the agency who shall be a member of the

bar of the District of Columbia.

‘‘§ 23–1305. Duties of director; compensation

‘‘(a) The Director of the agency shall be responsible for the

supervision and execution of the duties of the agency. The Director

shall be compensated as a member of the Senior Executive Service

pursuant to subchapter VIII of chapter 53 of title 5, United States

Code.

‘‘§ 23–1306. Chief assistant and other agency personnel; compensation

‘‘The Director shall employ a chief assistant who shall be compensated as a member of the Senior Executive Service pursuant

to section 5382 of title 5, United States Code. The Director shall

employ such agency personnel as may be necessary properly to

conduct the business of the agency. All employees other than the

chief assistant shall receive compensation that is comparable to

levels of compensation established for Federal pretrial services

agencies.

‘‘§ 23–1307. Annual reports

‘‘(a) The Director shall each year submit to the executive

committee and to the Director of the District of Columbia Offender

Supervision, Defender and Courts Services Agency a report as to

the Pretrial Services Agency’s administration of its responsibilities
H. R. 2015—512

for the previous fiscal year. The Director shall include in the report

a statement of financial condition, revenues, and expenses for the

past fiscal year.

‘‘§ 23–1308. Appropriation; budget

‘‘There are authorized to be appropriated through the State

Justice Institute in each fiscal year such sums as may be necessary

to carry out the provisions of this subchapter. Funds appropriated

by Congress for the District of Columbia Pretrial Services Agency

shall be received by the Director of the District of Columbia Offender

Supervision, Defender and Courts Services Agency, and shall be

disbursed by that Director to and on behalf of the District of

Columbia Pretrial Services Agency. The District of Columbia Pretrial Services Agency shall submit to the Director of the District

of Columbia Offender Supervision, Defender and Courts Services

Agency at the time and in the form prescribed by that Director,

reports of its activities and financial position and its proposed

budget.’’.

(b) CLERICAL AMENDMENT.—The table of sections for subchapter

I of chapter 13 of title 23, District of Columbia Code, is amended

by striking the items relating to sections 23–1304 through 23–

1308 and inserting the following:

‘‘23–1304. Executive committee; composition; appointment and qualifications of Director.

‘‘23–1305. Duties of director; compensation.

‘‘23–1306. Chief assistant and other agency personnel; compensation.

‘‘23–1307. Annual reports.

‘‘23–1308. Appropriation; budget.’’.

SEC. 11272. AMENDMENTS AFFECTING PUBLIC DEFENDER SERVICE.

(a) BOARD OF TRUSTEES.—Section 303(a) of the District of

Columbia Court Reform and Criminal Procedure Act of 1970 (DC

Code, sec. 1–2703(a)) is amended to read as follows:

‘‘(a) The Service shall be advised on matters of general policy

by a Board of Trustees.’’.

(b) APPOINTMENT OF DIRECTOR AND DEPUTY DIRECTOR.—Section

304 of such Act (DC Code, sec. 1–2704) is amended to read as

follows:

‘‘SEC. 304. DIRECTOR AND DEPUTY DIRECTOR; APPOINTMENT; DUTIES;

MEMBERSHIP IN BAR REQUIRED.

‘‘The Chief Judge of the United States Court of Appeals for

the District of Columbia Circuit and the Chief Judge of the United

States District Court for the District of Columbia, in consultation

with the persons described in subparagraphs (B) through (D) of

section 303(b)(1) and the Board of Trustees, shall appoint a Director

and Deputy Director of the Service. The Director shall be responsible for the supervision and execution of the duties of the Service.

The Deputy Director shall assist the Director and shall perform

such duties as the Director may prescribe. The Director and Deputy

Director shall be members of the bar of the District of Columbia.

The Director of the District of Columbia Offender Supervision,

Defender and Courts Services Agency shall fix the compensation

of the Director and the Deputy Director, but the compensation

of the Director shall not exceed the compensation received by the

United States Attorney for the District of Columbia.’’.

(c) ANNUAL REPORT AND AUDIT.—Section 306 of such Act (DC

Code, sec. 1–2706) is amended—
H. R. 2015—513

(1) in subsection (a)—

(A) by striking ‘‘Board of Trustees’’ and inserting

‘‘Director’’, and

(B) by striking ‘‘and to the Mayor of the District of

Columbia’’ and inserting ‘‘to the Director of the District

of Columbia Offender Supervision, Defender and Courts

Services Agency, and to the Office of Management and

Budget’’; and

(2) in subsection (b)—

(A) by striking ‘‘Board of Trustees’’ and inserting

‘‘Director’’; and

(B) by striking ‘‘the Administrative Office of the United

States Courts’’ and inserting ‘‘the Director of the District

of Columbia Offender Supervision, Defender and Courts

Services Agency’’.

(d) APPROPRIATIONS.—Section 307 of such Act (DC Code, sec.

1–2707) is amended—

(1) by amending subsection (a) to read as follows:

‘‘(a) There are authorized to be appropriated through the State

Justice Institute in each fiscal year such sums as may be necessary

to carry out the provisions of this chapter. Funds appropriated

by Congress for the District of Columbia Public Defender Service

shall be received by the Director of the District of Columbia Offender

Supervision, Defender and Courts Services Agency, and shall be

disbursed by that Director to and on behalf of the Service. The

Service shall submit to the Director of the District of Columbia

Offender Supervision, Defender and Courts Services Agency, at

the time and in the form prescribed by that Director, reports of

its activities and financial position and its proposed budget.’’; and

(2) in subsection (b), by striking ‘‘Upon approval of the

Board of Trustees, the’’ and inserting ‘‘The’’ .

CHAPTER 6—MISCELLANEOUS PROVISIONS

SEC. 11281. TECHNICAL ASSISTANCE AND RESEARCH.

There are authorized to be appropriated to the National

Institute of Justice in each fiscal year (beginning with fiscal year

1998) such sums as may be necessary for the following activities:

(1) Research and demonstration projects, evaluations, and

technical assistance to assess and analyze the crime problem

in the District of Columbia, and to improve the ability of

the criminal justice and other systems and entities in the

District of Columbia to prevent, solve, and punish crimes.

(2) The establishment of a locally-based corporation or

institute in the District of Columbia supporting research and

demonstration projects relating to the prevention, solution, or

punishment of crimes in the District of Columbia, including

the provision of related technical assistance.

SEC. 11282. EXEMPTION FROM PERSONNEL AND BUDGET CEILINGS

FOR TRUSTEES AND RELATED AGENCIES.

The Trustees described in sections 11202 and 11232 and the

activities and personnel of, and the funds allocated or otherwise

available to, the Trustees and the agencies over which the Trustees

exercise financial oversight pursuant to those sections, shall not

be subject to any general personnel or budget limitations which
H. R. 2015—514

otherwise apply to the District of Columbia government or its

agencies in any appropriations act.

Subtitle D—Privatization of Tax Collection

and Administration

SEC. 11301. FINDINGS.

Congress finds as follows:

(1) The District of Columbia government has historically

had a poor record of determining and collecting all revenue

it is due under its revenue code.

(2) The impact on the District’s financial condition of poor

administration and collection is significant and has contributed

both to the size of its accumulated operating deficit and to

the difficulty in balancing the budget going forward.

(3) More complete collection of taxes would not only

increase District of Columbia revenues, but would give residents

and businesses a sense of equity and that all were paying

their fair share.

(4) Once District tax processing and collection is competently managed it will be possible for the District government

to accurately assess the true value of its many taxes and

determine that some may be reduced or eliminated without

a significant negative impact on revenues.

(5) Any reduction or elimination of non-productive or

counterproductive taxes or taxes which cost more to administer

than they produce in revenue would significantly improve the

negative atmosphere surrounding the District of Columbia tax

system and its enforcement.

SEC. 11302. AUTHORIZING CHIEF FINANCIAL OFFICER TO PRIVATIZE

TAX ADMINISTRATION AND COLLECTION.

The Chief Financial Officer of the District of Columbia may

enter into contracts with a private entity for the administration

and collection of taxes of the District of Columbia.

Subtitle E—Financing of District of

Columbia Accumulated Deficit

SEC. 11401. FINDINGS.

Congress finds as follows:

(1) The District of Columbia government sold accumulated

deficit financing bonds in 1991.

(2) Between 1991 and the end of fiscal year 1997 the

District of Columbia government is expected to accumulate

an operating deficit in excess of $500,000,000.

(3) Requiring the District of Columbia budget for fiscal

year 1998 to be balanced will ensure that no further addition

is made to the accumulated operating deficit.

(4) In every other example of an American city in financial

crisis, a vital and necessary component of recovery was to

finance the accumulated operating deficit.

(5) Carrying forward an accumualted operating deficit of

more than $500,000,000 has a significant negative impact on
H. R. 2015—515

the District of Columbia’s cash flow and financial condition

and on its ability to improve its credit rating.

(6) It is not feasible to carry forward such a debt with

an expectation of paying it off gradually from future budget

surpluses.

(7) Financing the accumulated deficit would improve the

District’s cash management position and allow more normal

cash management techniques.

SEC. 11402. AUTHORIZATION FOR INTERMEDIATE-TERM ADVANCES OF

FUNDS BY THE SECRETARY OF THE TREASURY TO LIQUIDATE THE ACCUMULATED GENERAL FUND DEFICIT OF

THE DISTRICT OF COLUMBIA.

Title VI of the District of Columbia Revenue Act of 1939 (DC

Code, sec. 47–3401 et seq.) is amended—

(1) by redesignating sections 602 through 605 as sections

603 through 606, respectively; and

(2) by inserting after section 601 the following:

‘‘SEC. 602. INTERMEDIATE-TERM ADVANCES FOR LIQUIDATION OF

DEFICIT.

‘‘(a) IN GENERAL.—If the conditions in subsection (b) are satisfied, the Secretary shall make an advance of funds from time

to time, out of any money in the Treasury not otherwise

appropriated and to the extent provided in advance in annual

appropriations Acts, for the purpose of assisting the District government in liquidating the outstanding accumulated operating deficit of the general fund of the District government existing as of

September 30, 1997.

‘‘(b) CONDITIONS TO MAKING ANY INTERMEDIATE-TERM

ADVANCE.—The Secretary shall make an advance under this section

if—

‘‘(1) the Mayor delivers to the Secretary the following

instruments, in form and substance satisfactory to the Secretary—

‘‘(A) a financing agreement in which the Mayor agrees

to procedures for requisitioning advances;

‘‘(B) a requisition for an advance under this section;

and

‘‘(C) a promissory note evidencing the District government’s obligation to reimburse the Treasury for the

requisitioned advance, which note may be a general obligation bond issued under section 461(a) of the District of

Columbia Self-Government and Governmental

Reorganization Act by the District government to the

Secretary if the Secretary determines that such a bond

is satisfactory;

‘‘(2) the date on which the requisitioned advance is

requested to be made is not later than 3 years from the date

of enactment of the Balanced Budget Act of 1997;

‘‘(3) the District government delivers to the Secretary—

‘‘(A) evidence demonstrating to the satisfaction of the

Secretary that, at the time of the Mayor’s requisition for

an advance, the District government is effectively unable

to obtain credit in the public credit markets or elsewhere

in sufficient amounts and on sufficiently reasonable terms

to meet the District government’s need for financing to

accomplish the purpose described in subsection (a); and
H. R. 2015—516

‘‘(B) a schedule setting out the anticipated timing and

amounts of requisitions for advances under this section;

‘‘(4) the Authority certifies to the Secretary that—

‘‘(A) there is an approved financial plan and budget

in effect under the District of Columbia Financial Responsibility and Management Assistance Act of 1995 for the

fiscal year in which the requisition is to be made;

‘‘(B) at the time that the Mayor’s requisition for an

advance is delivered to the Secretary, the District government is in compliance with the approved financial plan

and budget;

‘‘(C) both the receipt of funds from such advance and

the reimbursement of Treasury for such advance are

consistent with the approved financial plan and budget

for the year;

‘‘(D) such advance will not adversely affect the financial

stability of the District government; and

‘‘(E) at the time that the Mayor’s requisition for an

advance is delivered to the Secretary, the District government is effectively unable to obtain credit in the public

credit markets or elsewhere in sufficient amounts and on

sufficiently reasonable terms to meet the District government’s need for financing to accomplish the purpose

described in subsection (a);

‘‘(5) the Inspector General of the District of Columbia certifies to the Secretary the information described in subparagraphs (A) through (D) of paragraph (4), and in making this

certification, the Inspector General may rely upon an audit

conducted by an outside auditor engaged by the Inspector General under section 208(a)(4) of the District of Columbia Procurement Practices Act of 1985 if, after reasonable inquiry, the

Inspector General concurs in the findings of such audit;

‘‘(6) the Secretary determines that—

‘‘(A) there is reasonable assurance of reimbursement

for the requisitioned advance; and

‘‘(B) the debt owed by the District government to the

Treasury on account of the requisitioned advance will not

be subordinate to any other debt owed by the District

or to any other claims against the District; and

‘‘(7) the Secretary receives from such persons as the Secretary determines to be appropriate such additional certifications and opinions relating to such matters as the Secretary

determines to be appropriate.

‘‘(c) AMOUNT OF ANY INTERMEDIATE-TERM ADVANCE.— ‘‘(1) IN GENERAL.—Except as provided in paragraph (3),

if the conditions in paragraph (2) are satisfied, each advance

made under this section shall be in the amount designated

by the Mayor in the Mayor’s requisition for such advance.

‘‘(2) CONDITIONS APPLICABLE TO DESIGNATED AMOUNT.—

Paragraph (1) applies if—

‘‘(A) the Mayor certifies that the amount designated

in the Mayor’s requisition for such advance is needed to

accomplish the purpose described in subsection (a) within

30 days of the time that the Mayor’s requisition is delivered

to the Secretary; and

‘‘(B) the Authority concurs in the Mayor’s certification

under subparagraph (A).
H. R. 2015—517

‘‘(3) MAXIMUM AMOUNT.—Notwithstanding paragraph (1),

the aggregate amount of all advances made under this section

shall not be greater than $300,000,000.

‘‘(d) MATURITY OF ANY INTERMEDIATE-TERM ADVANCE.—

‘‘(1) IN GENERAL.—Except as provided in paragraphs (2)

and (3), each advance made under this section shall mature

on the date designated by the Mayor in the Mayor’s requisition

for such advance.

‘‘(2) LATEST PERMISSIBLE MATURITY DATE.—Notwithstanding paragraph (1), the maturity date for any advance made

under this section shall not be later than 10 years from the

date on which the first advance under this section is made.

‘‘(4) SECRETARY’S RIGHT TO REQUIRE EARLY REIMBURSEMENT.—Notwithstanding paragraph (1), if the Secretary

determines, at any time while any advance made under this

section has not been fully reimbursed, that the District is

able to obtain credit in the public credit markets or elsewhere

in sufficient amounts and on sufficiently reasonable terms,

in the judgment of the Secretary, to refinance all or a portion

of the unpaid balance of such advance in the public credit

markets or elsewhere without adversely affecting the financial

stability of the District government, the Secretary may require

reimbursement for all or a portion of the unpaid balance of

such advance at any time after the Secretary makes the

determination.

‘‘(e) INTEREST RATE.—Each advance made under this section

shall bear interest at an annual rate equal to a rate determined

by the Secretary at the time that the Secretary makes such advance

taking into consideration the prevailing yield on outstanding

marketable obligations of the United States with remaining periods

to maturity comparable to the repayment schedule of such advance,

plus 1⁄8 of 1 percent.

‘‘(f) OTHER TERMS AND CONDITIONS.—Each advance made under

this section shall be on such other terms and conditions, including

repayment schedule, as the Secretary determines to be appropriate.

‘‘(g) DEPOSIT OF ADVANCES.—As provided in section 204(b) of

the District of Columbia Financial Responsibility and Management

Assistance Act of 1995, advances made under this section for the

account of the District government shall be deposited by the Secretary into an escrow account held by the Authority.’’.

SEC. 11403. CONFORMING AMENDMENTS.

(a) AMENDMENT TO SECTION 601.—Section 601 of the District

of Columbia Revenue Act of 1939 (DC Code, sec. 47–3401) is amended—

(1) in subsection (c)(2)(B)(i)(IV), by striking ‘‘602(b)’’ and

inserting ‘‘603(b)’’; and

(2) in subsection (d)(2)(B)(iii), by striking ‘‘602(b)’’ and

inserting ‘‘603(b)’’.

(b) AMENDMENT TO SECTION 604.—Section 604 of the District

of Columbia Revenue Act of 1939 (DC Code, sec. 47–3401.3) is

amended—

(1) in subsection (a)(2)(A)(i), by striking ‘‘602’’ and inserting

‘‘603’’; and

(2) in subsection (a)(2)(B)(i), by striking ‘‘602’’ and inserting

‘‘603’’.
H. R. 2015—518

SEC. 11404. TECHNICAL CORRECTIONS.

Section 601 of the District of Columbia Revenue Act of 1939

(DC Code, sec. 47–3401) is amended—

(1) in subsection (a)(3)(D), by striking ‘‘September 30, 1995’’

and inserting ‘‘September 30, 1996’’;

(2) in subsection (b)(2)(E), by striking ‘‘September 30, 1996’’

and inserting ‘‘September 30, 1997’’;

(3) in subsection (c)(2)(B)(i), by striking ‘‘October 1, 1995’’

and inserting ‘‘September 30, 1995’’;

(4) in subsection (d)(2)(B)(i)(II), by striking ‘‘September 30,

1997’’ and inserting ‘‘September 30, 1998’’;

(5) in subsection (d)(2)(B)(ii)—

(A) by striking ‘‘September 30, 1995’’ and inserting

‘‘October 1, 1995’’; and

(B) by striking ‘‘September 30, 1997’’ and inserting

‘‘October 1, 1997’’; and

(6) in subsection (d)(2)(C)(iv), by striking ‘‘September 30,

1997’’ and inserting ‘‘September 30, 1998’’.

SEC. 11405. AUTHORIZATION FOR ISSUANCE OF GENERAL OBLIGATION

BONDS BY THE DISTRICT OF COLUMBIA TO FINANCE OR

REFUND ITS ACCUMULATED GENERAL FUND DEFICIT.

Section 461(a) of the District of Columbia Self-Government

and Governmental Reorganization Act (DC Code, sec. 47–321(a))

is amended—

(1) in paragraph (1), by inserting ‘‘to finance or refund

the outstanding accumulated operating deficit of the general

fund of the District of $500,000,000, existing as of September

30, 1997,’’ after ‘‘existing as of September 30, 1990,’’; and

(2) in paragraph (2), by inserting ‘‘existing as of September

30, 1990’’ after ‘‘operating deficit’’.

Subtitle F—District of Columbia Bond

Financing Improvements

SEC. 11501. SHORT TITLE.

This subtitle may be cited as the ‘‘District of Columbia Bond

Financing Improvements Act of 1997’’.

SEC. 11502. FINDINGS.

Congress finds as follows:

(1) The bond authorization provision of the District of

Columbia Self-Government and Governmental Reorganization

Act (commonly known as the ‘‘Home Rule Act’’) have not been

updated to conform with changes in the municipal securities

marketplace.

(2) The Home Rule Act unduly limits the ability of the

District to take advantage of cost savings, investment

opportunities, and other efficiencies generally available to

municipal securities issuers.

(3) Section 461 of the Home Rule Act limits the ability

of the District government to implement cost-effective capital

planning to the extent that it does not permit the District

access to interim capital financing in anticipation of its periodic

long-term borrowings.
H. R. 2015—519

(4) Section 462 of the Home Rule Act prevents the reprogramming of unused bond proceeds from dormant projects

to other pending, authorized, and viable projects.

(5) Section 466 of the Home Rule Act requires that the

District undertake competitive bond sales even under circumstances in which greater efficiencies can be achieved

through negotiated sales.

(6) Section 490 of the Home Rule Act does not permit

the issuance and sale of taxable and tax-exempt bonds for

the full range of economic development and governmental purposes permitted the States and their political subdivisions.

SEC. 11503. AMENDMENT TO SECTION 462 (RELATING TO CONTENTS

OF BORROWING LEGISLATION AND ELECTIONS ON ISSUING GENERAL OBLIGATION BONDS).

Section 462(a) of the District of Columbia Self-Government

and Governmental Reorganization Act (DC Code, sec. 47-322(a))

is amended to read as follows:

‘‘(a) The Council may by act authorize the issuance of general

obligation bonds for the purposes specified in section 461. Such

an Act shall contain, at least, provisions—

‘‘(1) briefly describing the projects or categories of projects

to be financed by the Act;

‘‘(2) identifying the act authorizing each such project or

category of projects;

‘‘(3) setting forth the maximum amount of the principal

of the indebtedness which may be incurred for the projects

to be financed;

‘‘(4) setting forth the maximum rate of interest to be paid

on such indebtedness;

‘‘(5) setting forth the maximum allowable maturity for the

issue and the maximum debt service payable in any year;

and

‘‘(6) setting forth, in the event that the Council determines

in its discretion to submit the question of issuing such bonds

to a vote of the qualified voters of the District, the manner

of holding such election, the date of such election, the manner

of voting for or against the incurring of such indebtedness,

and the form of ballot to be used at such election.’’.

SEC. 11504. AMENDMENT TO SECTION 466 (RELATING TO PUBLIC OR

NEGOTIATED SALE OF GENERAL OBLIGATION BONDS).

Section 466 of the District of Columbia Self-Government and

Governmental Reorganization Act (DC Code, sec. 47-326) is amended by striking all after the heading and inserting the following:

‘‘SEC. 466. General obligation bonds issued under this part

may be sold at a private sale on a negotiated basis (in such manner

as the Mayor may determine to be in the public interest), or

may be sold at public sale upon sealed proposals after publication

of a notice of such public sale at least once not less than 10

days prior to the date fixed for sale in a daily newspaper carrying

municipal bond notices and devoted primarily to financial news

or to the subject of State and municipal bonds published in the

city of New York, New York, and in 1 or more newspapers of

general circulation published in the District. Such notice of public

sale shall state, among other things, that no proposal shall be

considered unless there is deposited with the District as a down

payment a certified check, cashier’s check, or surety for an amount
H. R. 2015—520

equal to at least 2 percent of the par amount of general obligation

bonds bid for, and the Mayor shall reserve the right to reject

any and all bids.’’.

SEC. 11505. AMENDMENT TO SECTION 467 (RELATING TO AUTHORITY

TO CREATE SECURITY INTERESTS IN DISTRICT REVENUES).

Section 467 of the District of Columbia Self-Government and

Governmental Reorganization Act (D.C. Code Sec. 47-326.1.) is

amended by striking all after the heading and inserting the following:

‘‘SEC. 467. (a) IN GENERAL.—An act of the Council authorizing

the issuance of general obligation bonds or notes under section

461(a), section 471(a), section 472(a), or section 475(a) may create

a security interest in any District revenues as additional security

for the payment of the bonds or notes authorized by such act.

‘‘(b) CONTENTS OF ACTS.—Any such act creating a security

interest in District revenues may contain provisions (which may

be part of the contract with the holders of such bonds or notes)—

‘‘(1) describing the particular District revenues which are

subject to such security interest;

‘‘(2) creating a reasonably required debt service reserve

fund or any other special fund;

‘‘(3) authorizing the Mayor of the District to execute a

trust indenture securing the bonds or notes;

‘‘(4) vesting in the trustee under such a trust indenture

such properties, rights, powers, and duties in trust as may

be necessary, convenient, or desirable;

‘‘(5) authorizing the Mayor of the District to enter into

and amend agreements concerning—

‘‘(A) the custody, collection, use, disposition, security,

investment, and payment of the proceeds of the bonds

or notes and the District revenues which are subject to

such security interest; and

‘‘(B) the doing of any act (or the refraining from doing

any act) that the District would have the right to do in

the absence of such an agreement;

‘‘(6) prescribing the remedies of the holders of the bonds

or notes in the event of a default; and

‘‘(7) authorizing the Mayor to take any other actions in

connection with the issuance, sale, delivery, security, and payment of the bonds or notes.

‘‘(c) TIMING AND PERFECTION OF SECURITY INTERESTS.—Notwithstanding article 9 of title 28 of the District of Columbia Code,

any security interest in District revenues created under subsection

(a) shall be valid, binding, and perfected from the time such security

interest is created, with or without the physical delivery of any

funds or any other property and with or without any further action.

Such security interest shall be valid, binding, and perfected whether

or not any statement, document, or instrument relating to such

security interest is recorded or filed. The lien created by such

security interest is valid, binding, and perfected with respect to

any individual or legal entity having claims against the District,

whether or not such individual or legal entity has notice of such

lien.

‘‘(d) OBLIGATIONS AND EXPENDITURES NOT SUBJECT TO APPROPRIATION.—The fourth sentence of section 446 shall not apply to
H. R. 2015—521

any obligation or expenditure of any District revenues to secure

any general obligation bond or note under subsection (a).’’.

SEC. 11506. AMENDMENT TO SECTION 472 (RELATING TO BORROWING

IN ANTICIPATION OF REVENUES).

Section 472 of the District of Columbia Self-Government and

Governmental Reorganization Act (DC Code, sec. 47-328) is amended by striking all after the heading and inserting the following:

‘‘SEC. 472. (a) IN GENERAL.—In anticipation of the collection

or receipt of revenues for a fiscal year, the Council may by act

authorize the issuance of general obligation notes for such fiscal

year, to be known as revenue anticipation notes.

‘‘(b) LIMIT ON AGGREGATE NOTES OUTSTANDING.—The total

amount of all revenue anticipation notes issued under subsection

(a) outstanding at any time during a fiscal year shall not exceed

20 percent of the total anticipated revenue of the District for such

fiscal year, as certified by the Mayor under this subsection. The

Mayor shall certify, as of a date which occurs not more than

15 days before each original issuance of such revenue anticipation

notes, the total anticipated revenue of the District for such fiscal

year.

‘‘(c) PERMITTED OUTSTANDING DURATION.—Any revenue

anticipation note issued under subsection (a) may be renewed.

Any such note, including any renewal note, shall be due and payable

not later than the last day of the fiscal year during which the

note was originally issued.

‘‘(d) EFFECTIVE DATE OF AUTHORIZATION ACTS; PAYMENTS NOT

SUBJECT TO APPROPRIATION.— ‘‘(1) EFFECTIVE DATE.—Notwithstanding section 602(c)(1),

any act of the Council authorizing the issuance of revenue

anticipation notes under subsection (a) shall take effect—

‘‘(A) if such act is enacted during a control year (as

defined in section 305(4) of the District of Columbia Financial Responsibility and Management Assistance Act of

1995), on the date of approval by the District of Columbia

Financial Responsibility and Management Assistance

Authority; or

‘‘(B) if such act is enacted during any other year,

on the date of enactment of such act.

‘‘(2) PAYMENTS NOT SUBJECT TO APPROPRIATION.—The

fourth sentence of section 446 shall not apply to any amount

obligated or expended by the District for the payment of the

principal of, interest on, or redemption premium for any revenue anticipation note issued under subsection (a).’’.

SEC. 11507. ADDITION OF NEW SECTION 475 (RELATING TO GENERAL

OBLIGATION BOND ANTICIPATION NOTES).

(a) IN GENERAL.—Subpart 2 of part E of title IV of the District

of Columbia Self-Government and Governmental Reorganization

Act is amended by adding at the end the following new section:

‘‘BOND ANTICIPATION NOTES

‘‘SEC. 475. (a) AUTHORIZING ISSUANCE.—

‘‘(1) IN GENERAL.—In anticipation of the issuance of general

obligation bonds, the Council may by act authorize the issuance

of general obligation notes to be known as bond anticipation

notes in accordance with this section.
H. R. 2015—522

‘‘(2) PURPOSES; PERMITTING ISSUANCE OF GENERAL OBLIGATION BONDS TO COVER INDEBTEDNESS.—The proceeds of bond

anticipation notes issued under this section shall be used for

the purposes for which general obligation bonds may be issued

under section 461, and such notes shall constitute indebtedness

which may be refunded through the issuance of general obligation bonds under such section.

‘‘(b) MAXIMUM ANNUAL DEBT SERVICE AMOUNT.—The Act of

the Council authorizing the issuance of bond anticipation notes

shall set forth for the bonds anticipated by such notes an estimated

maximum annual debt service amount based on an estimated schedule of annual principal payments and an estimated schedule of

annual interest payments (based on an estimated maximum average

annual interest rate for such bonds over a period of 30 years

from the earlier of the date of issuance of the notes or the date

of original issuance of prior notes in anticipation of those bonds).

Such estimated maximum annual debt service amount as estimated

at the time of issuance of the original bond anticipation notes

shall be included in the calculation required by section 603(b)

while such notes or renewal notes are outstanding.

‘‘(c) PERMITTED OUTSTANDING DURATION.—Any bond anticipation note, including any renewal note, shall be due and payable

not later than the last day of the third fiscal year following the

fiscal year during which the note was originally issued.

‘‘(d) GENERAL AUTHORITY OF COUNCIL.—If provided for in Act

of the Council authorizing such an issue of bond anticipation notes,

bond anticipation notes may be issued in succession, in such

amounts, at such times, and bearing interest rates within the

permitted maximum authorized by such Act.

‘‘(e) EFFECTIVE DATE OF AUTHORIZATION ACTS; PAYMENTS NOT

SUBJECT TO APPROPRIATION.—

‘‘(1) EFFECTIVE DATE.—Notwithstanding section 602(c)(1),

any act of the Council authorizing the renewal of bond anticipation notes under subsection (c) or the issuance of general obligation bonds under section 461(a) to refund any bond anticipation

notes shall take effect—

‘‘(A) if such act is enacted during a control year (as

defined in section 305(4) of the District of Columbia Financial Responsibility and Management Assistance Act of

1995), on the date of approval by the District of Columbia

Financial Responsibility and Management Assistance

Authority; or

‘‘(B) if such act is enacted during any other year,

on the date of enactment of such act.

‘‘(2) PAYMENT NOT SUBJECT TO APPROPRIATION.—The fourth

sentence of 446 shall not apply to any amount obligated or

expended by the District for the payment of the principal of,

interest on, or redemption premium for any bond anticipation

note issued under this section.’’.

(b) CLERICAL AMENDMENT.—The table of contents for the District of Columbia Self-Government and Governmental Reorganization Act is amended by adding at the end of the items relating

to subpart 2 of part E of title IV the following new item:

‘‘Sec. 475. Bond anticipation notes.’’.
H. R. 2015—523

SEC. 11508. AMENDMENT TO SECTION 490 (RELATING TO REVENUE

BONDS AND OTHER OBLIGATIONS).

Section 490 of the District of Columbia Self-Government and

Governmental Reorganization Act (DC Code, sec. 47–334), as

amended by section 2 of the District of Columbia Water and Sewer

Authority Act of 1996, is amended—

(1) in subsection (a)—

(A) by amending paragraphs (1) through (3) to read

as follows:

‘‘(a)(1) Subject to paragraph (2), the Council may by act or

by resolution authorize the issuance of taxable and tax-exempt

revenue bonds, notes, or other obligations to borrow money to

finance, refinance, or reimburse and to assist in the financing,

refinancing, or reimbursing of or for capital projects and other

undertakings by the District or by any District instrumentality,

or on behalf of any qualified applicant, including capital projects

or undertakings in the areas of housing; health facilities; transit

and utility facilities; manufacturing; sports, convention, and entertainment facilities; recreation, tourism and hospitality facilities;

facilities to house and equip operations of the District government

or its instrumentalities; public infrastructure development and

redevelopment; elementary, secondary and college and university

facilities; educational programs which provide loans for the payment

of educational expenses for or on behalf of students; facilities used

to house and equip operations related to the study, development,

application, or production of innovative commercial or industrial

technologies and social services; water and sewer facilities (as

defined in paragraph (5)); pollution control facilities; solid and

hazardous waste disposal facilities; parking facilities, industrial

and commercial development; authorized capital expenditures of

the District; and any other property or project that will, as determined by the Council, contribute to the health, education, safety,

or welfare, of, or the creation or preservation of jobs for, residents

of the District, or to economic development of the District, and

any facilities or property, real or personal, used in connection with

or supplementing any of the foregoing; lease-purchase financing

of any of the foregoing facilities or property; and any costs related

to the issuance, carrying, security, liquidity or credit enhancement

of or for revenue bonds, notes, or other obligations, including,

capitalized interest and reserves, and the costs of bond insurance,

letters of credit, and guaranteed investment, forward purchase,

remarketing, auction, and swap agreements. Any such financing,

refinancing, or reimbursement may be effected by loans made

directly or indirectly to any individual or legal entity, by the purchase of any mortgage, note, or other security, or by the purchase,

lease, or sale of any property.

‘‘(2) Any revenue bond, note, or other obligation issued under

paragraph (1) shall be a special obligation of the District and

shall be a negotiable instrument, whether or not such revenue

bond, note, or other obligation is a security as defined in section

28:8-102(1)(a) of title 28 of the District of Columbia Code.

‘‘(3) Any revenue bond, note, or other obligation issued under

paragraph (1) shall be paid and secured (as to principal, interest,

and any premium) as provided by the act or resolution of the

Council authorizing the issuance of such revenue bond, note, or

other obligation. Any act or resolution of the Council, or any delegation of Council authority under subsection (a)(6), authorizing the
H. R. 2015—524

issuance of revenue bonds, notes, or other obligations may provide

for (A) the payment of such revenue bonds, notes, or other obligations from any available revenues, assets, property (including water

and sewer enterprise fund revenues, assets, or other property in

the case of bonds, notes, or obligations issued with respect to

water and sewer facilities), and (B) the securing of such revenue

bond, note, or other obligation by the mortgage of real property

or the creation of a security interest in available revenues, assets,

or other property (including water and sewer enterprise fund revenues, assets, or other property in the case of bonds, notes, or

obligations issued with respect to water and sewer facilities).’’,

(B) by amending paragraph (4)(A) to read as follows:

‘‘(4)(A) In authorizing the issuance of any revenue bond,

note, or other obligation under paragraph (1), the Council may

enter into, or authorize the Mayor to enter into, any agreement

concerning the acquisition, use, or disposition of any available

revenues, assets, or property. Any such agreement may create

a security interest in any available revenues, assets, or property, may provide for the custody, collection, security, investment, and payment of any available revenues (including any

funds held in trust) for the payment of such revenue bond,

note, or other obligation, may mortgage any property, may

provide for the acquisition, construction, maintenance, and disposition of the undertaking financed or refinanced using the

proceeds of such revenue bond, note, or other obligation, and

may provide for the doing of any act (or the refraining from

doing of any act) which the District has the right to do in

the absence of such agreement. Any such agreement may be

assigned for the benefit of, or made a part of any contract

with, any holder of such revenue bond, note, or other obligation

issued under paragraph (1).’’, and

(C) by adding at the end the following new paragraph:

‘‘(6)(A) The Council may by act delegate to any District

instrumentality the authority of the Council under subsection

(a)(1) to issue taxable or tax-exempt revenue bonds, notes,

or other obligations to borrow money for the purposes specified

in this subsection. For purposes of this paragraph, the Council

shall specify for what undertakings revenue bonds, notes, or

other obligations may be issued under each delegation made

pursuant to this paragraph. Any District instrumentality may

exercise the authority and the powers incident thereto delegated

to it by the Council as described in the first sentence of this

paragraph only in accordance with this paragraph and shall

be consistent with this paragraph and the terms of the delegation.

‘‘(B) Revenue bonds, notes, or other obligations issued by

a District instrumentality under a delegation of authority

described in subparagraph (A) shall be issued by resolution

of that instrumentality, and any such resolution shall not be

considered to be an act of the Council.

‘‘(C) Nothing in this paragraph shall be construed as

restricting, impairing, or superseding the authority otherwise

vested by law in any District instrumentality.’’;

(2) by amending subsection (b) to read as follows:

‘‘(b) No property owned by the United States may be mortgaged

or made subject to any security interest to secure any revenue

bond, note, or other obligation issued under subsection (a)(1).’’;
H. R. 2015—525

(3) by amending subsection (c) to read as follows:

‘‘(c) Any and all such revenue bonds, notes, or other obligations

issued under subsection (a)(1) shall not be general obligations of

the District, shall not be a pledge of or involve the faith and

credit or taxing power of the District (other than with respect

to any dedicated taxes) and shall not constitute a debt of the

District, and shall not constitute lending of the public credit for

private undertakings for purposes of section 602(a)(2).’’;

(4) by amending subsection (f) to read as follows:

‘‘(f) The fourth sentence of section 446 shall not apply to—

‘‘(1) any amount (including the amount of any accrued

interest or premium) obligated or expended from the proceeds

of the sale of any revenue bond, note, or other obligations

issued under subsection (a)(1);

‘‘(2) any amount obligated or expended for the payment

of the principal of, interest on, or any premium for any revenue

bond, note, or other obligation issued under subsection (a)(1);

‘‘(3) any amount obligated or expended pursuant to provisions made to secure any revenue bond, note, or other obligations issued under subsection (a)(1); and

‘‘(4) any amount obligated or expended pursuant to commitments made in connection with the issuance of revenue bonds,

notes, or other obligations for repair, maintenance, and capital

improvements relating to undertakings financed through any

revenue bond, note, or other obligation issued under subsection

(a)(1).’’; and

(5) by adding at the end the following new subsections:

‘‘(i) The revenue bonds, notes, or other obligations issued under

subsection (a)(1) are not general obligation bonds of the District

government and shall not be included in determining the aggregate

amount of all outstanding obligations subject to the limitation specified in section 603(b).

‘‘(j) The issuance of revenue bonds, notes, or other obligations

by the District where the ultimate obligation to repay such revenue

bonds, notes, or other obligations is that of one or more nongovernmental persons or entities may be authorized by resolution

of the Council. The issuance of all other revenue bonds, notes,

or other obligations by the District shall be authorized by act

of the Council.

‘‘(k) During any control period (as defined in section 209 of

the District of Columbia Financial Responsibility and Management

Assistance Act of 1995), any act or resolution of the Council

authorizing the issuance of revenue bonds, notes, or other obligations under subsection (a)(1) shall be submitted to the District

of Columbia Financial Responsibility and Management Assistance

Authority for certification in accordance with section 204 of that

Act. Any certification issued by the Authority during a control

period shall be effective for purposes of this subsection for revenue

bonds, notes, or other obligations issued pursuant to such act or

resolution of the Council whether the revenue bonds, notes, or

other obligations are issued during or subsequent to that control

period.

‘‘(l) The following provisions of law shall not apply with respect

to property acquired, held, and disposed of by the District in accordance with the terms of any lease-purchase financing authorized

pursuant to subsection (a)(1):
H. R. 2015—526

‘‘(1) The Act entitled ‘An Act authorizing the sale of certain

real estate in the District of Columbia no longer required for

public purposes’, approved August 5, 1939 (53 Stat. 1211; DC

Code sec. 9–401 et seq.).

‘‘(2) Subchapter III of chapter 13 of title 16, District of

Columbia Code.

‘‘(3) Any other provision of District of Columbia law that

prohibits or restricts lease-purchase financing.

‘‘(m) For purposes of this section, the following definitions shall

apply:

‘‘(1) The term ‘revenue bonds, notes, or other obligations’

means special fund bonds, notes, or other obligations (including

refunding bonds, notes, or other obligations) used to borrow

money to finance, assist in financing, refinance, or repay,

restore or reimburse moneys used for purposes referred to

in subsection (a)(1) the principal of and interest, if any, on

which are to be paid and secured in the manner described

in this section and which are special obligations and to which

the full faith and credit of the District of Columbia is not

pledged.

‘‘(2) The term ‘District instrumentality’ means any agency

or instrumentality (including an independent agency or

instrumentality), authority, commission, board, department,

division, office, body, or officer of the District of Columbia

government duly established by an act of the Council or by

the laws of the United States, whether established before or

after the date of enactment of the District of Columbia Bond

Financing Improvements Act of 1997.

‘‘(3) The term ‘available revenues’ means gross revenues

and receipts, other than general fund tax receipts, lawfully

available for the purpose and not otherwise exclusively committed to another purpose, including enterprise funds, grants, subsidies, contributions, fees, dedicated taxes and fees, investment

income and proceeds of revenue bonds, notes, or other obligations issued under this section.

‘‘(4) The term ‘enterprise fund’ means a fund or account

for operations that are financed or operated in a manner similar

to private business enterprises, or established so that separate

determinations may more readily be made periodically of revenues earned, expenses incurred, or net income for management

control, accountability, capital maintenance, public policy, or

other purposes.

‘‘(5) The term ‘dedicated taxes and fees’ means taxes and

surtaxes, portions thereof, tax increments, or payments in lieu

of taxes, and fees that are dedicated pursuant to law to the

payment of the debt service on revenue bonds, notes, or other

obligations authorized under this section, the provision and

maintenance of reserves for that purpose, or the provision

of working capital for or the maintenance, repair, reconstruction

or improvement of the undertaking to which the revenue bonds,

notes, or other obligations relate.

‘‘(6) The term ‘tax increments’ means taxes, other than

the special tax provided for in section 481 and pledged to

the payment of general obligation indebtedness of the District,

allocable to the increase in taxable value of real property or

the increase in sales tax receipts, each from a certain date

or dates, in prescribed areas, to the extent that such increases
H. R. 2015—527

are not otherwise exclusively committed to another purpose

and as further provided for pursuant to an act of the Council.’’.

SEC. 11509. CONFORMING AMENDMENT.

The fourth sentence of section 446 of the District of Columbia

Self-Government and Governmental Reorganization Act (DC Code,

sec. 47-304) is amended to read as follows: ‘‘Except as provided

in section 467(d), section 471(c), section 472(d)(2), section 475(e)(2),

section 483(d), and section 490(f), (g), and (h)(3), no amount may

be obligated or expended by any officer or employee of the District

of Columbia government unless such amount has been approved

by Act of Congress, and then only according to such Act.’’.

Subtitle G—District of Columbia

Government Budget

SEC. 11601. ELIMINATION OF THE ANNUAL FEDERAL PAYMENT TO

THE DISTRICT OF COLUMBIA.

(a) ELIMINATION OF PAYMENT.—

(1) IN GENERAL.—Title V of the District of Columbia SelfGovernment and Governmental Reorganization Act (DC Code,

sec. 47–3406 et seq.) is hereby repealed.

(2) CLERICAL AMENDMENT.—The table of contents of such

Act is amended by striking the items relating to title V.

(b) CONFORMING AMENDMENTS.—

(1) HOME RULE ACT.—The District of Columbia Self-Government and Governmental Reorganization Act is amended as

follows:

(A) In section 103(10) (DC Code, sec. 1–202(10)), by

striking ‘‘the annual Federal payment to the District

authorized under title V,’’.

(B) In section 483 (DC Code, sec. 47–331.2), by striking

subsection (c).

(C) In section 603(c) (DC Code, sec. 47–313(c)), by

striking the fourth sentence.

(D) In section 603(f)(1) (DC Code, sec. 47–313(f)(1)),

by striking ‘‘(other than the fourth sentence)’’.

(2) FINANCIAL RESPONSIBILITY AND MANAGEMENT ASSISTANCE ACT.—The District of Columbia Financial Responsibility

and Management Assistance Act of 1995 is amended—

(A) by striking section 205 (DC Code, sec. 47–392.5);

and

(B) in the table of contents for such Act, by striking

the item relating to section 205.

(3) PROCUREMENT PRACTICES ACT.—Section 208(a)(2) of the

District of Columbia Procurement Practices Act of 1985 (DC

Code, sec. 1–1182.8(a)(2)) is amended—

(1) by striking subparagraph (B);

(2) by redesignating subparagraph (C) as subparagraph

(B); and

(3) in subparagraph (B), as so redesignated, by striking

‘‘Amounts deposited in the dedicated fund described in subparagraph (B)’’ and inserting ‘‘Amounts appropriated for the Inspector General’’.
H. R. 2015—528

(4) DISTRICT OF COLUMBIA REVENUE ACT OF 1939.—The

District of Columbia Revenue Act of 1939 (DC Code, sec. 47–

3401 et seq.) is amended as follows:

(A) In section 603(b) (as redesignated by section

11402)—

(i) in paragraph (5), by adding ‘‘and’’ at the end;

(ii) in paragraph (6), by striking ‘‘; and’’ and inserting a period; and

(iii) by striking paragraph (7).

(B) In section 603(c) (as redesignated by section 11402),

by amending subparagraph (C) to read as follows:

‘‘(C) APPLICABLE LIMIT DEFINED.—In this paragraph,

the ‘applicable limit’ for a fiscal year is equal to 15 percent

of the total anticipated revenues of the District government

for such fiscal year, as certified by the Mayor at the time

of the Mayor’s requisition for an advance.’’.

(C) In section 605(b) (as redesignated by section

11402)—

(i) by striking paragraph (1) and redesignating

paragraphs (2) through (4) as paragraphs (1) through

(3);

(ii) in paragraph (1) (as so redesignated), by striking ‘‘OTHER’’ in the heading;

(iii) in paragraph (1) (as so redesignated), by striking ‘‘If, after’’ and all that follows through ‘‘the Secretary’’ and inserting ‘‘The Secretary’’;

(iv) in paragraph (1) (as so redesignated), by striking ‘‘to individuals,’’ and inserting ‘‘to individuals

(including any Federal contribution authorized to be

appropriated pursuant to section 11601(c)(2) of the Balanced Budget Act of 1997),’’;

(v) in paragraph (2) (as so redesignated), by striking ‘‘paragraphs (1) and (2)’’ and inserting ‘‘paragraph

(1)’’; and

(vi) in paragraph (3) (as so redesignated), by striking ‘‘(1) through (3)’’ and inserting ‘‘(1) and (2)’’.

(c) FEDERAL CONTRIBUTION TO OPERATIONS OF GOVERNMENT

OF NATION’S CAPITAL.—

(1) FINDINGS.—Congress finds as follows:

(A) Congress has restricted the overall size of the District of Columbia’s economy by limiting the height of buildings in the District and imposing other limitations relating

to the Federal presence in the District.

(B) Congress has imposed limitations on the District’s

ability to tax income earned in the District of Columbia.

(C) The unique status of the District of Columbia as

the seat of the government of the United States imposes

unusual costs and requirements which are not imposed

on other jurisdictions and many of which are not directly

reimbursed by the Federal government.

(D) These factors play a significant role in causing

the relative tax burden on District residents to be greater

than the burden on residents in other jurisdictions in the

Washington, D.C. metropolitan area and in other cities

of comparable size.
H. R. 2015—529

(2) FEDERAL CONTRIBUTION.—There is authorized to be

appropriated a Federal contribution towards the costs of the

operation of the government of the Nation’s capital—

(A) for fiscal year 1998, $190,000,000; and

(B) for each subsequent fiscal year, such amount as

may be necessary for such contribution.

In determining the amount appropriated pursuant to the

authorization under this paragraph, Congress shall take into

account the findings described in paragraph (1).

SEC. 11602. REQUIREMENT THAT THE DISTRICT OF COLUMBIA BALANCE ITS BUDGET IN FY 1998.

(a) IN GENERAL.—Section 201(c)(1) of the District of Columbia

Financial Responsibility and Management Assistance Act of 1995

is amended—

(1) in subparagraph (A), by striking ‘‘1999’’ and inserting

‘‘1998’’; and

(2) in subparagraph (B), by striking ‘‘1996, 1997, and 1998,’’

and inserting ‘‘1996 and 1997,’’.

(b) CONFORMING AMENDMENT.—Section 603(f) of the District

of Columbia Self-Government and Governmental Reorganization

Act (DC Code, sec. 47–313(f)) is amended by striking ‘‘Act of 1995)—

’’ and all that follows through ‘‘(2) the Council’’ and inserting ‘‘Act

of 1995), the Council’’.

SEC. 11603. PERMITTING EXPEDITED SUBMISSION AND APPROVAL OF

CONSENSUS BUDGET AND FINANCIAL PLAN.

(a) FINDINGS.—Congress finds the following:

(1) The District of Columbia Financial Responsibility and

Management Assistance Act (hereafter in this subsection

referred to as the ‘‘Act’’) was structured as to preserve the

maximum prerogatives of each branch of elected self-government consistent with returning the District of Columbia to

full financial stability and health.

(2) The Act was intended to eliminate unnecessary bureaucratic barriers and procedures throughout the District government, including the budget process.

(3) Preservation of home rule and self-government are

consistent with cooperation between elected officials and the

Authority in drawing the annual budget and other matters

affecting the District of Columbia government, and are preferable to achieve greater efficiency, communication among the

parties, and avoidance of conflict and delay.

(b) IN GENERAL.—Section 202 of the District of Columbia Financial Responsibility and Management Assistance Act of 1995 is

amended by adding at the end the following new subsection:

‘‘(i) EXPEDITED SUBMISSION AND APPROVAL OF CONSENSUS

BUDGET AND FINANCIAL PLAN.—Notwithstanding any other provision of this section, if the Mayor, the Council, and the Authority

jointly develop a financial plan and budget for the fiscal year

which meets the requirements applicable under section 201 and

which the Mayor, Council, and Authority certify reflects a consensus

among them—

‘‘(1) such financial plan and budget shall serve as the

budget of the District government for the fiscal year adopted

by the Council under section 446 of the District of Columbia

Self-Government and Governmental Reorganization Act; and
H. R. 2015—530

‘‘(2) the Mayor shall transmit the financial plan and budget

to the President and Congress under such section.’’.

(c) EFFECTIVE DATE.—The amendment made by subsection (b)

shall apply with respect to fiscal years beginning with fiscal year

1998.

SEC. 11604. INCREASE IN MAXIMUM AMOUNT OF PERMITTED DISTRICT

BORROWING.

Section 603(b) of the District of Columbia Self-Government

and Governmental Reorganization Act (DC Code, sec. 47–313(b))

is amended by striking ‘‘14 per centum’’ each place it appears

in paragraph (1) and paragraph (3) and inserting ‘‘17 percent’’.

Subtitle H—Miscellaneous Provisions

CHAPTER 1—REGULATORY REFORM IN THE DISTRICT

OF COLUMBIA

SEC. 11701. REVIEW AND REVISION OF REGULATIONS AND PERMIT

AND APPLICATION PROCESSES.

(a) REVIEW OF CURRENT REGULATIONS BY AUTHORITY.— (1) IN GENERAL.—Not later than 6 months after the date

of the enactment of this title, the District of Columbia Financial

Responsibility and Management Assistance Authority shall

complete a review of regulations of the District of Columbia

in effect as of the date of the enactment of this title and

analyze the extent to which such regulations unnecessarily

and inappropriately impair economic development in the District of Columbia and the financial stability and management

efficiency of the District of Columbia government. To the greatest extent possible, such review shall take into account the

work and recommendations of the Business Regulatory Reform

Commission pursuant to the Business Regulatory Reform

Commission Act of 1994 (DC Code, sec. 2–4101 et seq.) and

other existing and ongoing public and private regulatory reform

efforts. The Authority shall transmit the findings of its review

to the Mayor, Council, and Congress.

(2) REVISION.—Based on the review conducted under paragraph (1) and taking into account actions by the Council and

the Executive Branch of the District of Columbia government,

the Authority shall take such additional actions as it considers

appropriate to repeal or revise the regulations of the District

of Columbia, in accordance with (and subject to the terms

and conditions described in) section 207 of the District of Columbia Financial Responsibility and Management Assistance Act

of 1995.

(b) SURVEY AND REVISION OF PERMIT AND APPLICATION PROC- ESSES.—(1) IN GENERAL.—Not later than 6 months after the date

of the enactment of this title, the Authority shall complete

a review of the current processes of the District of Columbia

for obtaining permits and applications of all types and analyze

the extent to which such processes and their completion times

vary from the processes applicable in other jurisdictions. To

the greatest extent possible, such review shall take into account

the work and recommendations of the Business Regulatory

Reform Commission pursuant to the Business Regulatory
H. R. 2015—531

Reform Commission Act of 1994 (DC Code, sec. 2–4101 et

seq.) and other existing and ongoing public and private regulatory reform efforts. The Authority shall transmit the findings

of its review to the Mayor, Council, and Congress.

(2) REVISION.—Based on the review conducted under paragraph (1) and taking into account actions by the Council and

the Executive Branch of the District of Columbia government,

the Authority shall take such additional actions as it considers

appropriate to repeal or revise the permit and application processes (and their completion times) of the District of Columbia,

in accordance with (and subject to the terms and conditions

described in) section 207 of the District of Columbia Financial

Responsibility and Management Assistance Act of 1995. In

carrying out such repeals or revisions, the Authority shall seek

to ensure that the average time required to obtain a permit

or application from the District of Columbia is consistent with

the average time for other similar jurisdictions in the United

States.

(c) REPORTS TO CONGRESS.—Upon the expiration of the 6-month

period which begins on the date of the enactment of this title

and on a quarterly basis thereafter, the Authority shall submit

a report to Congress describing the steps taken to carry out the

requirements of this section and the effectiveness of the regulatory,

permit, and application processes of the District of Columbia.

SEC. 11702. REPEAL OF CLEAN AIR COMPLIANCE FEE ACT OF 1994.

(a) REPEAL.—

(1) IN GENERAL.—Effective March 21, 1995, the Clean Air

Compliance Fee Act of 1994 is hereby repealed (DC Code,

sec. 47–2731 et seq.), except as provided in subsection (b).

(2) CONFORMING AMENDMENT.—Section 2(b)(2) of the Stable

and Reliable Source of Revenues for WMATA Act of 1982 (DC

Code, sec. 1–2466(b)(2)) is amended by striking subparagraph

(H).

(b) EXCEPTION FOR PROVISIONS EXEMPTING DELIVERY OF NEWS- PAPERS FROM APPLICATION OF CERTAIN TAXES.—Subsection (a) shall

not apply to section 14 of the Clean Air Compliance Fee Act of

1994.

SEC. 11703. REPEAL REQUIREMENT FOR CONGRESSIONAL AUTHORIZATION OF CERTAIN MERGERS INVOLVING DISTRICT OF

COLUMBIA PUBLIC UTILITY CORPORATIONS.

Section 11 of the Act of March 4, 1913 (37 Stat. 1006; DC

Code, sec. 43–802) is hereby repealed.

SEC. 11704. EXEMPTION OF CERTAIN CONTRACTS FROM COUNCIL

REVIEW.

(a) IN GENERAL.—Section 451 of the District of Columbia SelfGovernment and Governmental Reorganization Act (sec. 1–1130,

D.C. Code) is amended by adding at the end the following new

subsection:

‘‘(d) EXEMPTION FOR CERTAIN CONTRACTS.—The requirements

of this section shall not apply with respect to any of the following

contracts:

‘‘(1) Any contract entered into by the Washington Convention Center Authority for preconstruction activities, project

management, design, or construction.
H. R. 2015—532

‘‘(2) Any contract entered into by the District of Columbia

Water and Sewer Authority established pursuant to the Water

and Sewer Authority Establishment and Department of Public

Works Reorganization Act of 1996, other than contracts for

the sale or lease of the Blue Plains Wastewater Treatment

Plant.

‘‘(3) At the option of the Council, any contract for a highway

improvement project carried out under title 23, United States

Code.’’.

(b) EFFECTIVE DATE.—The amendment made by subsection (a)

shall apply with respect to contracts entered into on or after the

date of the enactment of this title.

CHAPTER 2—OTHER MISCELLANEOUS PROVISIONS

SEC. 11711. REVISIONS TO FINANCIAL RESPONSIBILITY AND MANAGEMENT ASSISTANCE ACT.

(a) USE OF INTEREST ON ACCOUNTS OF AUTHORITY FOR BENEFIT

OF DISTRICT.—Section 106 of the District of Columbia Financial

Responsibility and Management Assistance Act of 1995 (DC Code,

sec. 47–391.6) is amended by adding at the end the following

new subsection:

‘‘(d) USE OF INTEREST ON ACCOUNTS FOR DISTRICT.— ‘‘(1) IN GENERAL.—Notwithstanding any other provision of

this Act, the Authority may transfer or otherwise expend any

amounts derived from interest earned on accounts held by

the Authority on behalf of the District of Columbia for such

purposes as it considers appropriate to promote the economic

stability and management efficiency of the District government.

‘‘(2) SPENDING NOT SUBJECT TO APPROPRIATION BY CONGRESS.—Notwithstanding subsection (a)(3), any amounts transferred or otherwise expended pursuant to paragraph (1) may

be obligated or expended without approval by Act of Congress.’’.

(b) APPOINTMENT OF INSPECTOR GENERAL.—Section 303(e)(1)

of such Act (DC Code, sec. 1–1182.8 note) is amended by striking

‘‘the Authority’’ and inserting ‘‘the Mayor’’.

SEC. 11712. COOPERATIVE AGREEMENTS BETWEEN FEDERAL AGENCIES AND METROPOLITAN POLICE DEPARTMENT.

(a) AGREEMENTS.—Each covered Federal law enforcement

agency may enter into a cooperative agreement with the Metropolitan Police Department of the District of Columbia to assist the

Department in carrying out crime prevention and law enforcement

activities in the District of Columbia, including taking appropriate

action to enforce subsection (e) (except that nothing in such an

agreement may be construed to grant authority to the United

States to prosecute violations of subsection (e)).

(b) CONTENTS OF AGREEMENT.—An agreement entered into

between a covered Federal law enforcement agency and the Metropolitan Police Department pursuant to this section may include

agreements relating to—

(1) sending personnel of the agency on patrol in areas

of the District of Columbia which immediately surround the

area of the agency’s jurisdiction, and granting personnel of

the agency the power to arrest in such areas;

(2) sharing and donating equipment and supplies with

the Metropolitan Police Department;
H. R. 2015—533

(3) operating on shared radio frequencies with the Metropolitan Police Department;

(4) permitting personnel of the agency to carry out processing and papering of suspects they arrest in the District of

Columbia; and

(5) such other items as the agency and the Metropolitan

Police Department may agree to include in the agreement.

(c) COORDINATION WITH U.S. ATTORNEY’S OFFICE.—Agreements

entered into pursuant to this section shall be coordinated in advance

with the United States Attorney for the District of Columbia.

(d) COVERED FEDERAL LAW ENFORCEMENT AGENCIES

DESCRIBED.—In this section, the term ‘‘covered Federal law enforcement agency’’ means any of the following:

(1) United States Capitol Police.

(2) United States Marshals Service.

(3) Library of Congress Police.

(4) Bureau of Engraving and Printing Police Force.

(5) Supreme Court Police.

(6) Amtrak Police Department.

(7) Department of Protective Services, United States Holocaust Museum.

(8) Government Printing Office Police.

(9) United States Park Police.

(10) Bureau of Alcohol, Tobacco, and Firearms.

(11) Drug Enforcement Administration.

(12) Federal Bureau of Investigation.

(13) Criminal Investigation Division, Internal Revenue

Service.

(14) Department of the Navy Police Division, Naval District

Washington.

(15) Naval Criminal Investigative Service.

(16) 11th Security Police Squadron, Bolling Air Force Base.

(17) United States Army Military District of Washington.

(18) United States Customs Service.

(19) Immigration and Naturalization Service.

(20) Postal Inspection Service, United States Postal Service.

(21) Uniformed Division, United States Secret Service.

(22) United States Secret Service.

(23) National Zoological Part Police.

(24) Federal Protective Service, General Services Administration, National Capital Region.

(25) Defense Protective Service, Department of Defense

Washington Headquarters Services.

(26) Office of Protective Services, Smithsonian Institution.

(27) Office of Protective Services, National Gallery of Art.

(28) United States Army Criminal Investigation Command,

Department of the Army Washington District, 3rd Military

Police Group.

(29) Marine Corps Law Enforcement.

(30) Department of State Diplomatic Security.

(31) United States Coast Guard.

(32) United States Postal Police.

(e) CERTAIN PROHIBITED ACTIVITY.—Effective with respect to

conduct occurring on or after the date of the enactment of this

title, whoever in the District of Columbia knowingly and willfully

obstructs any bridge connecting the District of Columbia and the

Commonwealth of Virginia—
H. R. 2015—534

(1) shall be fined not less than $1,000 and not more than

$5,000, and in addition may be imprisoned not more than

30 days; or

(2) if applicable, shall be subject to prosecution by the

District of Columbia under the provisions of District law and

regulation amended by the Safe Streets Anti-Prostitution

Amendment Act of 1996 (D.C. Law 11–130).

SEC. 11713. PERMITTING GARNISHMENT OF WAGES OF OFFICERS AND

EMPLOYEES OF DISTRICT OF COLUMBIA GOVERNMENT.

Section 2 of D.C. Law 2–14 (DC Code, sec. 1–516) is amended—

(1) by striking ‘‘After July 25’’ and inserting ‘‘(a) After

July 25’’; and

(2) by adding at the end the following new subsection:

‘‘(b) After October 1, 1997, wages salaries, annuities, retirement

and disability benefits, and other remuneration based upon employment, or other income owed by, due from, and payable by the

government of the District of Columbia to any individual shall

be subject to attachment, garnishment, assignment, or withholding

in accordance with subchapter III of chapter 5 of title 16 of the

District of Columbia Code in the same manner and to the same

extent as if the government of the District of Columbia were a

private person.’’.

SEC. 11714. PERMITTING EXCESS APPROPRIATIONS BY WATER AND

SEWER AUTHORITY FOR CAPITAL PROJECTS.

(a) IN GENERAL.—Section 445A of the District of Columbia

Self-Government and Governmental Reorganization Act (DC Code,

sec. 43–1691), as added by section 4(a) of the District of Columbia

Water and Sewer Authority Act of 1996, is amended—

(1) by striking ‘‘The District’’ and inserting ‘‘(a) IN GEN- ERAL.—The District’’; and

(2) by adding at the end the following new subsection:

‘‘(b) PERMITTING EXPENDITURE OF EXCESS REVENUES FOR CAP- ITAL PROJECTS IN EXCESS OF BUDGET.—Notwithstanding the

amount appropriated for the District of Columbia Water and Sewer

Authority for capital projects for a fiscal year, if the revenues

of the Authority for the year exceed the estimated revenues of

the Authority provided in the annual budget of the District of

Columbia for the fiscal year, the Authority may obligate or expend

an additional amount for capital projects during the year equal

to the amount of such excess revenues.’’.

(b) CONFORMING AMENDMENT.—The fourth sentence of section

446 of such Act (DC Code, sec. 47–304), as amended by section

2(c)(2) of the District of Columbia Water and Sewer Authority

Act of 1996, is amended by striking ‘‘in section 467(d)’’ and inserting

‘‘in section 445A(b), section 467(d)’’.

(c) EFFECTIVE DATE.—The amendments made by this section

shall apply with respect to fiscal years beginning on or after October

1, 1996.

SEC. 11715. REQUIRING CERTAIN FEDERAL OFFICIALS TO PROVIDE

NOTICE BEFORE CARRYING OUT ACTIVITIES AFFECTING

REAL PROPERTY LOCATED IN DISTRICT OF COLUMBIA.

(a) HEADS OF FEDERAL AGENCIES.—

(1) IN GENERAL.—Except as provided in subsection (d), the

head of any Federal agency may not carry out any activity
H. R. 2015—535

that affects real property located in the District of Columbia

unless—

(A) not later than 60 days before carrying out such

activity, the head of the agency provides a notice describing

such activity and the property affected to the Administrator

of General Services and the Administrator of General Services transmits such notice to the individuals described in

subsection (c); and

(B) the head of the agency provides the individuals

described in subsection (c) with the opportunity to present

oral or written comments on the activity to a representative

of the head of the agency before the head of the agency

carries out the activity.

(2) FEDERAL AGENCY DEFINED.—In subsection (a), the term

‘‘Federal agency’’ means an executive department (as defined

in section 101 of title 5, United States Code).

(b) ARCHITECT OF THE CAPITOL.—Except as provided in subsection (d), the Architect of the Capitol may not carry out any

activity that affects real property located in the District of Columbia

unless—

(1) not later than 60 days before carrying out such activity,

the Architect provides a notice describing such activity and

the property affected to the Committee on Transportation and

Infrastructure of the House of Representatives and the Committee on Environment and Public Works of the Senate and such

Committees transmit such notice to the individuals described

in subsection (c); and

(2) the Architect provides the individuals described in subsection (c) with the opportunity to present oral or written

comments on the activity to a representative of the Architect

before the Architect carries out the activity.

(c) INDIVIDUALS DESCRIBED.—The individuals described in this

paragraph (with respect to the activity and the real property

involved) are the Mayor of the District of Columbia, the Chair

of the Council of the District of Columbia, and the Chair of the

Advisory Neighborhood Commission (as established pursuant to

section 738 of the District of Columbia Self-Government and

Governmental Reorganization Act) in whose neighborhood such

property is located.

(d) EXCEPTION FOR EMERGENCIES.—The head of a Federal

agency or the Architect of the Capitol may waive the requirements

of subsection (a) if the head of the agency or the Architect finds

that compliance with the requirements would jeopardize the public

safety or the national security interests of the United States, but

only if the head of the agency or the Architect—

(1) certifies such finding and the reasons for such finding

to the individuals described in subsection (c) and to Congress;

and

(2) at the earliest time practicable, provides such individuals with the notice described in paragraph (1) of subsection

(a) or (b) (whichever is applicable) and the opportunity to

present comments described in paragraph (2) of subsection

(a) or (b).

(e) EFFECTIVE DATE.—Section 1 shall apply to activities carried

out after the expiration of the 60-day period that begins on the

date of the enactment of this title.
H. R. 2015—536

SEC. 11716. REPEAL TERM OF DEED OF CONVEYANCE TO CERTAIN

HOSPITAL.

Section 2 of the Act of June 6, 1952 (chapter 486; 66 Stat.

288) (DC Code, sec. 32–121) is hereby repealed.

SEC. 11717. SHORT TITLE OF HOME RULE ACT.

(a) IN GENERAL.—Section 101 of the District of Columbia SelfGovernment and Governmental Reorganization Act is amended by

striking ‘‘District of Columbia Self-Government and Governmental

Reorganization Act’’ and inserting ‘‘District of Columbia Home Rule

Act’’.

(b) REFERENCES IN LAW.—Any reference in law or regulation

to the District of Columbia Self-Government and Governmental

Reorganization Act shall be deemed to be a reference to the District

of Columbia Home Rule Act.

CHAPTER 3—EFFECTIVE DATE; GENERAL PROVISIONS

SEC. 11721. EFFECTIVE DATE.

Except as otherwise provided in this title, the provisions of

this title shall take effect on the later of October 1, 1997, or

the day the District of Columbia Financial Responsibility and

Management Assistance Authority certifies that the financial plan

and budget for the District government for fiscal year 1998 meet

the requirements of section 201(c)(1) of the District of Columbia

Financial Responsibility and Management Assistance Act of 1995,

as amended by this title.

SEC. 11722. TECHNICAL ASSISTANCE.

Any Federal agency (as defined in section 101 of title 31,

United States Code) may provide, at the discretion of the head

of the agency, technical assistance to, and training for, personnel

of the Government of the District of Columbia. Such assistance

shall be limited to assistance that does not interfere with the

mission of the agency. The authority provided by this section shall

expire three years from the date of enactment of this statute.

SEC. 11723. LIABILITY.

(a) DISTRICT OF COLUMBIA.—The District of Columbia shall

defend any civil action or proceeding pending on the effective date

of this title in any court or other official municipal, state, or federal

forum against the District of Columbia or its officers, employees,

or agents, and shall assume any liability resulting from such an

action or proceeding.

(b) STATE JUSTICE INSTITUTE.—The State Justice Institute shall

not be liable for damages or equitable relief on the basis of the

activities or operations of any federal or District of Columbia agency

which receives funds through the State Justice Institute pursuant

to this title.

(c) UNITED STATES.—The United States, its officers, employees,

and agents, and its agencies shall not—

(1) be responsible for the payment of any judgments, liabilities or costs resulting from any action or proceeding against

the District of Columbia or its agencies, officers, employees,

or agents;

(2) be subject to liability in any case on the basis of the

activities of the District of Columbia or its agencies, officers,

employees, or agents; or
H. R. 2015—537

(3) be subject to liability in any case under section 1979

of the Revised Statutes (42 U.S.C. 1983).

(d) LIMITATIONS.—Nothing in this section shall be construed

as a waiver of sovereign immunity, or as limiting any other defense

or immunity that would otherwise be available to the United States,

the District of Columbia, their agencies, officers, employees, or

agents.

Speaker of the House of Representatives.

Vice President of the United States and

President of the Senate.