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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 1380 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                S. 1380

 To amend title XVIII of the Social Security Act to create a sensible 
  infrastructure for delivery system reform by renaming the Medicare 
Payment Advisory Commission, making the Commission an executive branch 
  agency, and providing the Commission new resources and authority to 
                   implement Medicare payment policy.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             June 25, 2009

Mr. Rockefeller introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
 To amend title XVIII of the Social Security Act to create a sensible 
  infrastructure for delivery system reform by renaming the Medicare 
Payment Advisory Commission, making the Commission an executive branch 
  agency, and providing the Commission new resources and authority to 
                   implement Medicare payment policy.

    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 ``Medicare Payment Advisory Commission 
(MedPAC) Reform Act of 2009''.

SEC. 2. RENAMING AND REFORMING THE MEDICARE PAYMENT ADVISORY 
              COMMISSION.

    (a) Amendment to Title.--
            (1) In general.--Section 1805 of the Social Security Act 
        (42 U.S.C. 1395b-6) is amended--
                    (A) in the heading, by striking ``medicare payment 
                advisory commission'' and inserting ``medicare payment 
                and access commission''; and
                    (B) in subsection (a), by striking ``Medicare 
                Payment Advisory Commission'' and inserting ``Medicare 
                Payment and Access Commission (or `MedPAC')''.
            (2) References.--Any reference to the Medicare Payment 
        Advisory Commission shall be deemed a reference to the Medicare 
        Payment and Access Commission.
    (b) Establishment as Executive Agency.--Section 1805 of the Social 
Security Act (42 U.S.C. 1395b-6) is amended--
            (1) in subsection (a)--
                    (A) by striking ``Establishment.--There is'' and 
                inserting ``Establishment.--
                            ``(i) In general.--There is'';
                    (B) in clause (i), as added by subparagraph (A), by 
                striking ``agency of Congress'' and inserting 
                ``independent establishment (as defined in section 104 
                of title 5, United States Code)''; and
                    (C) by adding at the end the following new clause:
                            ``(ii) Purpose.--
                                    ``(I) In general.--The purpose of 
                                the Commission is to act as the 
                                regulatory authority for payment and 
                                coverage policies under the program 
                                under this title and to implement 
                                policies that improve health outcomes, 
                                promote greater quality and efficiency, 
                                improve beneficiary access to necessary 
                                and evidence-based items and services, 
                                maintain coverage affordability, and 
                                improve the long-term solvency of the 
                                program under this title.
                                    ``(II) Specific responsibilities.--
                                The specific responsibilities of the 
                                Commission fall into the following 3 
                                categories:
                                            ``(aa) Reimbursement 
                                        policy.--The Commission shall 
                                        determine payment policies, 
                                        methodologies, and rates under 
                                        this title, including units of 
                                        payment and the amount of 
                                        payment, so as to ensure 
                                        maximum efficiency and quality 
                                        and in a manner that is 
                                        financially sustainable.
                                            ``(bb) Coverage policy.--
                                        The Commission shall determine 
                                        coverage policies and 
                                        methodologies, including 
                                        national coverage 
                                        determinations (as defined in 
                                        section 1869(f)(1)(B)), in a 
                                        manner that provides stable 
                                        premiums and maximum 
                                        beneficiary access to medically 
                                        necessary and appropriate care 
                                        in the appropriate setting at 
                                        the appropriate time.
                                            ``(cc) Financial 
                                        stability.--The Commission 
                                        shall improve the overall 
                                        financial stability of the 
                                        program under this title, by 
                                        using payment policies, 
                                        methodologies, and rates and 
                                        coverage policies and 
                                        methodologies to reasonably 
                                        reduce the growth in 
                                        expenditures under this title 
                                        without sacrificing current or 
                                        future beneficiary access to 
                                        medically necessary and 
                                        appropriate care in the 
                                        appropriate setting at the 
                                        appropriate time.
                                    ``(III) Carrying out 
                                responsibilities.--In carrying out its 
                                responsibilities under this section, 
                                the Commission shall do so in a manner 
                                that serves the interests of current 
                                and future beneficiaries.'';
            (2) in subsection (c)--
                    (A) in paragraph (1)--
                            (i) by striking ``Appointment.--The 
                        Commission'' and inserting ``Appointment.--
                    ``(A) In general.--The Commission'';
                            (ii) in subparagraph (A), as inserted by 
                        clause (i)--
                                    (I) by striking ``17'' and 
                                inserting ``11'';
                                    (II) by inserting ``the Secretary 
                                and the Administrator of the Centers 
                                for Medicare & Medicaid Services, who 
                                shall each serve as non-voting members 
                                of the Commission, and'' after 
                                ``composed of''; and
                                    (III) by striking ``Comptroller 
                                General'' and inserting ``President, by 
                                and with the advice and consent of the 
                                Senate''; and
                            (iii) by adding at the end the following 
                        new subparagraphs:
                    ``(B) Limitation on number of terms served.--An 
                individual may not be appointed as a member of the 
                Commission for more than 2 consecutive terms.
                    ``(C) Members currently appointed.--
                            ``(i) In general.--Any individual serving 
                        as a member of the Commission as of the date of 
                        enactment of the Medicare Payment Advisory 
                        Commission (MedPAC) Reform Act of 2009 may 
                        continue to serve as a member until the earlier 
                        of--
                                    ``(I) the remainder of the term for 
                                which the member was appointed; or
                                    ``(II) April 30, 2010.
                            ``(ii) Clarification regarding vacancies.--
                        Any vacancy in the Commission on or after such 
                        date of enactment shall be filled as provided 
                        in accordance with subparagraph (A).''; and
                    (B) in paragraph (2), by striking subparagraph (D) 
                and inserting the following new subparagraph:
                    ``(D) Additional qualifications.--In addition to 
                the qualifications described in the succeeding 
                provisions of this paragraph, the President shall 
                consider the political balance of the membership of the 
                Commission and the needs of individuals entitled to (or 
                enrolled for) benefits under part A or enrolled under 
                part B who are entitled to medical assistance under a 
                State plan under title XIX.''.
                    (C) in paragraph (3)--
                            (i) by amending subparagraph (A) to read as 
                        follows:
                    ``(A) In general.--The terms of members of the 
                Commission shall be for 6 years except that, of the 
                members first appointed--
                            ``(i) four shall be appointed for terms of 
                        5 years;
                            ``(ii) four shall be appointed for terms of 
                        3 years; and
                            ``(iii) three shall be appointed for terms 
                        of 1 year.''; and
                            (ii) in subparagraph (B), in the third 
                        sentence, by striking ``A vacancy'' and 
                        inserting ``Except as provided in paragraph 
                        (1)(C), a vacancy'';
                    (D) by amending paragraph (4) to read as follows:
            ``(4) Compensation.--Membership in the Commission shall be 
        a full-time position. A member of the Commission shall be 
        entitled to compensation at the rate payable for level IV of 
        the Executive Schedule under section 5316 of title 5, United 
        States Code. The Commission shall determine and prescribe the 
        manner in which its obligations shall be incurred and its 
        disbursements and expenses allowed and paid and the salaries of 
        its members and employees, whose employment, compensation, 
        leave, and expenses shall be governed solely by the provisions 
        of this section and rules and regulations of the Commission not 
        inconsistent therewith.'';
                    (E) by amending paragraph (5) to read as follows:
            ``(5) Chairman; vice chairman.--The President shall 
        designate a member of the Commission, at the time of 
        appointment of the member by and with the advice and consent of 
        the Senate, as Chairman and a member of the Commission, at the 
        time of appointment of the member by and with the advice and 
        consent of the Senate, as Vice Chairman, except that in the 
        case where the Chairman or the Vice Chairman is not able to be 
        present (including in the case of vacancy), a majority of the 
        Commission may designate another member for the period of such 
        absence.''; and
                    (F) by adding at the end the following new 
                paragraph:
            ``(7) Nonapplicability of federal advisory committee act.--
        The Federal Advisory Committee Act (5 U.S.C. App.) shall not 
        apply to any advisory committee established or utilized by the 
        Commission.'';
            (3) in subsection (d), in the matter preceding paragraph 
        (1), by striking ``Subject to such review as the Comptroller 
        General deems necessary to assure the efficient administration 
        of the Commission, the Commission'' and inserting ``The 
        Commission'';
            (4) by amending subsection (f) to read as follows:
    ``(f) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out the provisions 
of this section. Sixty percent of such appropriations 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.''; and
            (5) by adding at the end the following new subsection:
    ``(g) References.--Any reference to the Medicare Payment Advisory 
Commission or MedPAC shall be deemed a reference to the Medicare 
Payment and Access Commission.''.
    (c) Authority To Determine Payment and Coverage and Routine 
Evaluation of Payment Rates Under the Medicare Program.--
            (1) In general.--Section 1805(b) of the Social Security Act 
        (42 U.S.C. 1395b-6(b)) is amended--
                    (A) in paragraph (1)(B), by inserting ``, determine 
                payment policies, methodologies, and rates under this 
                title in accordance with paragraph (9)(A), and 
                determine coverage policies and methodologies under 
                this title in accordance with paragraph (9)(B)'' before 
                the semicolon at the end; and
                    (B) by adding at the end the following new 
                paragraphs:
            ``(9) Authority to determine payment and coverage under 
        this title.--
                    ``(A) Determination of payment policies, 
                methodologies, and rates.--
                            ``(i) In general.--Notwithstanding any 
                        other provision of law, subject to subparagraph 
                        (C), the Commission shall determine payment 
                        policies, methodologies, and rates for items 
                        and services, providers of services, and 
                        suppliers under this title.
                            ``(ii) Timeline for determinations with 
                        respect to payment policies, methodologies, and 
                        rates for physicians and hospitals.--The 
                        Commission shall make a determination under 
                        this subparagraph with respect to payment 
                        policies, methodologies, and rates--
                                    ``(I) for physicians (as defined in 
                                section 1861(r)(1)), not later than 
                                December 1 of each year (beginning with 
                                2012); and
                                    ``(II) for hospitals, not later 
                                than March 1 of each year (beginning 
                                with 2013).
                            ``(iii) Implementation of payment policies, 
                        methodologies, and rates.--
                                    ``(I) Authority of secretary.--
                                Notwithstanding any other provision of 
                                law, the Secretary shall promulgate 
                                regulations to implement any payment 
                                policy, methodology, or rate determined 
                                by the Commission under this 
                                subparagraph.
                                    ``(II) Regulations currently in 
                                effect.--Any payment policies, 
                                methodologies, and rates for items and 
                                services, providers of services, or 
                                suppliers under this title as of the 
                                date of enactment of the Medicare 
                                Payment Advisory Commission (MedPAC) 
                                Reform Act of 2009 or regulation 
                                promulgated by the Secretary relating 
                                to such payment policies, 
                                methodologies, and rates prior to such 
                                date of enactment shall remain in 
                                effect until the Secretary promulgates 
                                regulations under subclause (I) to 
                                implement a payment policy, 
                                methodology, or rate determined by the 
                                Commission with respect to the item or 
                                service, provider of services, or 
                                supplier.
                    ``(B) Determination of coverage policies and 
                methodologies.--
                            ``(i) In general.--Notwithstanding any 
                        other provision of law, subject to subparagraph 
                        (C), the Commission shall determine coverage 
                        policies and methodologies for items and 
                        services furnished under this title.
                            ``(ii) Implementation of coverage policies 
                        and methodologies.--
                                    ``(I) Authority of secretary.--
                                Notwithstanding any other provision of 
                                law, the Secretary shall promulgate 
                                regulations to implement any coverage 
                                policies and methodologies determined 
                                by the Commission under this 
                                subparagraph.
                                    ``(II) Regulations currently in 
                                effect.--Any coverage policy or 
                                methodology for items and services 
                                furnished under this title as of the 
                                date of enactment of the Medicare 
                                Payment Advisory Commission (MedPAC) 
                                Reform Act of 2009 or regulation 
                                promulgated by the Secretary relating 
                                to such coverage policy or methodology 
                                prior to such date of enactment shall 
                                remain in effect until the Secretary 
                                promulgates regulations under subclause 
                                (I) to implement a coverage policy or 
                                methodology determined by the 
                                Commission with respect to the item or 
                                service.
                    ``(C) Use of authority.--
                            ``(i) In general.--In making a 
                        determination under subparagraph (A) or (B), 
                        the Commission shall do so in a manner that--
                                    ``(I) is consistent with the 
                                provisions of sections 1801 and 1802;
                                    ``(II) is in the best interest of 
                                beneficiaries, including improving 
                                beneficiary access to care; and
                                    ``(III) improves the future 
                                viability of the program under this 
                                title, including protecting the short-
                                term and long-term solvency of the 
                                program under this title.
                            ``(ii) Limitation.--A determination under 
                        subparagraph (A) or (B) shall not limit 
                        beneficiary access under this title to items 
                        and services that are medically necessary.
                    ``(D) Limitation on judicial review.--Any 
                determination of the Commission under subparagraph (A) 
                or (B) shall be a final agency action of the Commission 
                and shall not be subject to judicial review.
                    ``(E) Annual report.--Not later than March 15 of 
                each year (beginning with 2012), the Commission shall 
                submit to Congress a report on any determinations made 
                under subparagraph (A) or (B) during the preceding 
                year, including the performance of the Secretary in 
                implementing such determinations by promulgating 
                regulations under subparagraph (A)(iii) or (B)(ii) and 
                any changes in coverage policies or methodologies, 
                including any national coverage determinations (as 
                defined in section 1869(f)(1)(B)) made during the 
                preceding year.
                    ``(F) Definitions.--
                            ``(i) Coverage policies and 
                        methodologies.--In this section, the term 
                        `coverage policies and methodologies' means the 
                        application of any requirements for coverage of 
                        items and services under this title, including 
                        the determination of the most appropriate way 
                        to provide and pay for such items and services 
                        consistent with the requirements of this title, 
                        the application of any exclusion from coverage 
                        under this title (including whether an item or 
                        service is reasonable and necessary for 
                        purposes of section 1862(a)(1)(A)) and national 
                        coverage determinations (as defined in section 
                        1869(f)(1)(B)).
                            ``(ii) Payment policies, methodologies, and 
                        rates.--In this section, the term `payment 
                        policies, methodologies, and rates' means the 
                        application of any requirements for payment for 
                        items and services furnished under this title, 
                        including the amount of such payment and the 
                        methodology for determining such payment 
                        amount, including any annual updates to such 
                        payment under this title.
                    ``(G) Clarification.--Nothing in this paragraph 
                shall affect any requirement under this title to cover 
                an item or service.
            ``(10) Routine evaluation of payment policies, 
        methodologies, and rates.--The Commission shall review the 
        payment policies, methodologies, and rates for each item and 
        service, provider of services, and supplier under this title 
        not less frequently than every 5 years in order to determine 
        whether the Commission should make a determination under 
        paragraph (9)(A) to update such payment policy, methodology, or 
        rate.''.
            (2) GAO study and annual report on determination and 
        implementation of payment and coverage policies under the 
        medicare program.--
                    (A) Study.--The Comptroller General of the United 
                States shall conduct a study on changes to payment 
                policies, methodologies, and rates and coverage 
                policies and methodologies under the Medicare Program 
                under title XVIII of the Social Security Act as a 
                result of the amendments made by this subsection, 
                including an analysis of--
                            (i) any determinations made by the Medicare 
                        Payment and Access Commission under 
                        subparagraph (A) or (B) of section 1805(b)(9) 
                        of such Act, as added by paragraph (1), during 
                        the preceding year;
                            (ii) any regulations promulgated by the 
                        Secretary of Health and Human Services under 
                        subparagraph (A)(iii) or (B)(ii) of such 
                        section during the preceding year;
                            (iii) the process for--
                                    (I) making such determinations 
                                (including the evidence to support any 
                                such determination);
                                    (II) promulgating such regulations 
                                (including the capacity of the 
                                Secretary of Health and Human Services 
                                to promulgate such regulations); and
                            (iv) the ability of the Centers for 
                        Medicare & Medicaid Services to fulfill its 
                        responsibilities in carrying out such 
                        regulations.
                    (B) Report.--Not later than December 31 of each 
                year (beginning with 2012), the Comptroller General 
                shall submit to Congress a report containing the 
                results of the study conducted under subparagraph (A), 
                together with recommendations for such legislation and 
                administrative action as the Secretary determines 
                appropriate.
    (d) Congressional Action.--Section 1805 of the Social Security Act 
(42 U.S.C. 1395b-6), as amended by subsection (b), is amended--
            (1) by redesignating subsections (f) and (g), respectively, 
        as subsections (g) and (h); and
            (2) by inserting after subsection (e) the following new 
        subsection:
    ``(f) Congressional Action.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, it shall only be in order in the Senate or the House of 
        Representatives to consider any measure that would overrule a 
        determination of the Commission under subparagraph (A) or (B) 
        of subsection (d)(9) if \3/5\ of the Members, duly chosen and 
        sworn, of the Senate or the House of Representatives agree to 
        such consideration.
            ``(2) Rules of the senate and house of representatives.--
        This subsection is enacted by Congress--
                    ``(A) as an exercise of the rulemaking power of the 
                Senate and House of Representatives, respectively, and 
                is deemed to be part of the rules of each House, 
                respectively, but applicable only with respect to the 
                procedure to be followed in that House in the case of a 
                measure described in paragraph (1), and it supersedes 
                other rules only to the extent that it is inconsistent 
                with such rules; and
                    ``(B) with full recognition of the constitutional 
                right of either House to change the rules (so far as 
                they relate to the procedure of that House) at any 
                time, in the same manner, and to the same extent as in 
                the case of any other rule of that House.''.
    (e) Research and Information Access.--Section 1805(e) of the Social 
Security Act (42 U.S.C. 1395b-6(e)) is amended by adding at the end the 
following new paragraphs:
            ``(5) Authority to inform research priorities for data 
        collection.--The Commission may advise the Secretary (through 
        the Director of the Agency for Healthcare Research and Quality 
        and the Director of the National Institutes of Health) on 
        priorities for health services research, particularly as such 
        priorities pertain to necessary changes and issues regarding 
        payment reforms under this title.
            ``(6) Expanded authority to access federal data and 
        reports.--In addition to data obtained under paragraph (1), the 
        Commission shall have priority access to all raw data and 
        research conducted or funded by the Federal Government, 
        including data and research produced by the Centers for 
        Medicare & Medicaid Services, the National Institutes of 
        Health, and the Agency for Healthcare Research and Quality.
            ``(7) Electronic access.--The National Director for Health 
        Information Technology, in coordination with the Secretary, the 
        Administrator of the Centers for Medicare & Medicaid Services, 
        and the Commission, shall establish a direct electronic link 
        for raw data, including claims data under this title, to be 
        accessed by the Commission for the purposes of evaluating and 
        determining recommendations under this title, in accordance 
        with applicable privacy laws and data use agreements.
            ``(8) Access to biannual reports.--Not less frequently than 
        on a biannual basis, the National Institutes of Health and the 
        Agency for Healthcare Research and Quality shall submit to the 
        Commission a report containing information on any research 
        conducted by the National Institutes of Health and the Agency 
        for Healthcare Research and Quality, respectively, which has 
        relevance for the determinations and recommendations being 
        considered by the Commission. Such information shall be 
        provided to the Commission in electronic form.''.
    (f) Additional Resources To Carry Out Duties.--
            (1) In general.--Section 1805(d) of the Social Security Act 
        (42 U.S.C. 1395b-6(d)) is amended--
                    (A) in paragraph (1), by inserting ``(including an 
                attorney)'' after ``such other personnel''; and
                    (B) in paragraph (5), by striking ``and'' at the 
                end;
                    (C) in paragraph (6), by striking the period at the 
                end and inserting ``; and''; and
                    (D) by adding at the end the following new 
                paragraph:
            ``(7) establish a public affairs office.''.
            (2) Office of the ombudsman.--Section 1805(e) of the Social 
        Security Act (42 U.S.C. 1395b-6(e)), as amended by subsection 
        (e), is amended by adding at the end the following new 
        paragraph:
            ``(10) Office of the ombudsman.--
                    ``(A) In general.--The Commission shall establish 
                an office of the ombudsman to handle complaints 
                regarding the implementation of regulations under 
                subsection (a)(9)(B).
                    ``(B) Duties.--The office of the ombudsman shall--
                            ``(i) act as a liaison between the 
                        Commission and any entity or individual 
                        affected by the implementation of such a 
                        regulation; and
                            ``(ii) ensure that the Commission has 
                        established safeguards--
                                    ``(I) to encourage such entities 
                                and individuals to submit complaints to 
                                the office of the ombudsman; and
                                    ``(II) to protect the 
                                confidentiality of any entity or 
                                individual who submits such a 
                                complaint.''.
    (g) MACPAC Technical Amendments.--Section 1900(b) of the Social 
Security Act (42 U.S.C. 1396) is amended--
            (1) in paragraph (1)(D), by striking ``June 1'' and 
        inserting ``June 15''; and
            (2) by adding at the end the following:
            ``(10) Consultation with medpac.--MACPAC shall regularly 
        consult with the Medicare Payment and Access Commission (in 
        this paragraph referred to as `MedPAC') established under 
        section 1805 in carrying out its duties under this section.''.
    (h) Lobbying Cooling-off Period for Members of the Medicare Payment 
Advisory Commission.--Section 207(c) of title 18, United States Code, 
is amended by inserting at the end the following:
            ``(3) Members of the medicare payment advisory 
        commission.--
                    ``(A) In general.--Paragraph (1) shall apply to a 
                member of the Medicare Payment Advisory Commission who 
                was appointed to such Commission as of the date of 
                enactment of the Medicare Payment Advisory Commission 
                (MedPAC) Reform Act of 2009.
                    ``(B) Agencies and congress.--For purposes of 
                paragraph (1), the agency in which the individual 
                described in subparagraph (A) served shall be 
                considered to be the Medicare Payment and Access 
                Commission established under section 1805 of the Social 
                Security Act, the Department of Health and Human 
                Services, and the relevant committees of jurisdiction 
                of Congress.''.

SEC. 3. ESTABLISHMENT OF COUNCIL OF HEALTH AND ECONOMIC ADVISERS, 
              CONSUMER ADVISORY COUNCIL, AND FEDERAL HEALTH ADVISORY 
              COUNCIL.

    Section 1805(b) of the Social Security Act (42 U.S.C. 1395b-6(b)), 
as amended by section 2(c), is amended by adding at the end the 
following new paragraph:
            ``(11) Council of health and economic advisers, consumer 
        advisory council, and federal health advisory council.--
                    ``(A) Council of health and economic advisers.--
                            ``(i) In general.--The Commission shall 
                        establish a council of health and economic 
                        advisers to advise the Commission on its 
                        development, analyses, and implementation of 
                        payment policies under this title.
                            ``(ii) Membership.--
                                    ``(I) In general.--The council of 
                                health and economic advisers shall be 
                                composed of acknowledged experts in 
                                health care and economics selected by 
                                the Commission.
                                    ``(II) Initial inclusion of former 
                                members of medicare payment advisory 
                                commission.--The members initially 
                                selected for the council of health and 
                                economic advisers under subclause (I) 
                                shall include those individuals who 
                                were members of the Medicare Payment 
                                Advisory Commission as of the day 
                                before the date of enactment of the 
                                Medicare Payment Advisory Commission 
                                (MedPAC) Reform Act of 2009.
                    ``(B) Consumer advisory council.--
                            ``(i) In general.--There is established a 
                        consumer advisory council to advise the 
                        Commission on the impact of payment policies 
                        under this title on consumers.
                            ``(ii) Membership.--
                                    ``(I) Number and appointment.--The 
                                consumer advisory council shall be 
                                composed of 10 consumer representatives 
                                appointed by the Comptroller General of 
                                the United States, 1 from among each of 
                                the 10 regions established by the 
                                Secretary as of the date of enactment 
                                of the Medicare Payment Advisory 
                                Commission (MedPAC) Reform Act of 2009.
                                    ``(II) Qualifications.--The 
                                membership of the council shall 
                                represent the interests of consumers 
                                and particular communities.
                            ``(iii) Duties.--The consumer advisory 
                        council shall, subject to the call of the 
                        Commission, meet not less frequently than 2 
                        times each year in the District of Columbia.
                            ``(iv) Open meetings.--Meetings of the 
                        consumer advisory council shall be open to the 
                        public.
                            ``(v) Election of officers.--Members of the 
                        consumer advisory council shall elect their own 
                        officers.
                    ``(C) Federal health advisory council.--
                            ``(i) In general.--There is established a 
                        Federal health advisory council to consult with 
                        and provide advice to the Commission on all 
                        matters within the jurisdiction of the 
                        Commission.
                            ``(ii) Membership.--The Federal health 
                        advisory council shall be composed of 10 
                        representatives from the health care industry 
                        appointed by the Comptroller General of the 
                        United States, 1 from among each of the 10 
                        regions established by the Secretary as of the 
                        date of enactment of the Medicare Payment 
                        Advisory Commission (MedPAC) Reform Act of 
                        2009.
                            ``(iii) Terms.--
                                    ``(I) In general.--The terms of 
                                members of the Federal health advisory 
                                council shall be for 1 year.
                                    ``(II) Limitation on number of 
                                terms served.--An individual may not be 
                                appointed as a member of the Federal 
                                health advisory council for more than 3 
                                terms.
                            ``(iv) Duties.--The Federal health advisory 
                        council shall, subject to the call of the 
                        Commission, meet not less frequently than 2 
                        times each year in the District of Columbia.
                            ``(v) Open meetings.--Meetings of the 
                        Federal health advisory council shall be open 
                        to the public.
                            ``(vi) Election of officers.--Members of 
                        the Federal health advisory council shall elect 
                        their own officers.
                    ``(D) Limitation on funding.--Out of amounts 
                appropriated under subsection (g), the Commission may 
                use not more than $300,000 each fiscal year to carry 
                out this paragraph.''.

SEC. 4. COST CONTAINMENT IN MEDICARE.

    Section 1805(b) of the Social Security Act (42 U.S.C. 1395b-6(b)), 
as amended by section 3, is amended by adding at the end the following 
new paragraph:
            ``(12) Spending reductions.--
                    ``(A) In general.--
                            ``(i) Implementation by the commission.--
                        Notwithstanding any other provision of law, 
                        effective beginning on January 1, 2012, subject 
                        to clause (ii) and the succeeding provisions of 
                        this paragraph, the Commission shall implement 
                        payment policies, methodologies, and rates and 
                        coverage policies and methodologies which are 
                        estimated to reduce expenditures under this 
                        title by not less than 1.5 percent annually.
                            ``(ii) Fail safe mechanism.--
                        Notwithstanding any other provision of law, 
                        effective beginning on January 1, 2013, subject 
                        to the succeeding provisions of this paragraph, 
                        in the case where the Chief Actuary of the 
                        Centers for Medicare & Medicaid Services finds 
                        that the payment policies, methodologies, and 
                        rates and coverage policies and methodologies 
                        implemented under clause (i) for a given year 
                        will not reduce annual expenditures under this 
                        title by not less than 1.5 percent, the 
                        Secretary shall implement an automatic 
                        reduction in reimbursement for providers of 
                        services and suppliers under the original 
                        Medicare fee-for-service program under parts A 
                        and B in order to achieve such 1.5 percent 
                        reduction. Such reduction shall be cumulative, 
                        may vary depending on the provider of services 
                        or supplier involved, and may be zero based on 
                        initiatives implemented by the Secretary for 
                        including no reduction.
                    ``(B) Requirements.--In carrying out subparagraph 
                (A), the following requirements shall apply:
                            ``(i) Any reductions in reimbursement for 
                        items and services furnished under this title 
                        which are subject to a competitive bidding 
                        process shall apply in the year following the 
                        year in which the Commission or the Secretary 
                        determines that such reduction shall be 
                        implemented.
                            ``(ii) Any reductions in reimbursement to a 
                        Medicare Advantage organization offering a 
                        Medicare Advantage plan under part C shall be 
                        reflected in the MA area-specific non-drug 
                        monthly benchmark amount computed under section 
                        1853(j) for months in the year following the 
                        year in which the Commission or the Secretary 
                        determines that such reduction shall be 
                        implemented.
                            ``(iii) The amount of a reduction in 
                        reimbursement to a provider of services or a 
                        supplier under this title during a year shall 
                        not be greater than 5 percent of the amount of 
                        payment that would otherwise apply under this 
                        title.
                            ``(iv) In the case where the amount of any 
                        savings to the program under this title during 
                        a year as a result of the provisions of 
                        subparagraph (A) exceeds 1.5 percent of the 
                        amount of expenditures that would otherwise be 
                        made under this title, the amount of such 
                        excess shall be deposited, in such proportion 
                        as the Commission determines appropriate, in 
                        the Federal Hospital Insurance Trust Fund 
                        established under section 1817 and the Federal 
                        Supplementary Medical Insurance Trust Fund 
                        established under section 1841.
                    ``(C) Analysis.--The Chief Actuary of the Centers 
                for Medicare & Medicaid Services shall--
                            ``(i) analyze such payment polices, 
                        methodologies, and rates and coverage policies 
                        and methodologies prospectively, in order to 
                        determine the amount of such estimated 
                        reduction in expenditures for a year; and
                            ``(ii) include such analysis in the annual 
                        report of the Boards of Trustees of the Federal 
                        Hospital Insurance Trust Fund and Federal 
                        Supplementary Medical Insurance Trust Funds for 
                        the year.
                    ``(D) Third party verification.--The analysis under 
                subparagraph (C) shall be verified by an independent, 
                third party actuary.
                    ``(E) GAO audit and annual report.--
                            ``(i) Audit.--The Comptroller General of 
                        the United States shall audit the procedures 
                        used to determine such estimated reduction in 
                        expenditures.
                            ``(ii) Annual report.--The Comptroller 
                        General shall submit to Congress an annual 
                        report containing the results of the audit 
                        conducted under clause (i).
                    ``(F) Inclusion of interim payment and coverage 
                policies.--Any savings or additional expenditures as a 
                result of payment policies, methodologies, and rates 
                and coverage policies and methodologies under any 
                health reform legislation enacted on or after the date 
                of enactment of the Medicare Payment Advisory 
                Commission (MedPAC) Reform Act of 2009 shall be 
                included in the determination of whether expenditures 
                under this title have been reduced by not less than 1.5 
                percent for a year.
                    ``(G) Non-application during years when solvency 
                has been determined.--This paragraph shall not apply 
                for a year in the case where the Chief Actuary of the 
                Centers for Medicare & Medicaid Services determines, as 
                part of the annual report of the Boards of Trustees of 
                the Federal Hospital Insurance Trust Fund and Federal 
                Supplementary Medical Insurance Trust Funds for the 
                preceding year, that the program under this title is 
                solvent, according to the short range test for 
                financial adequacy of the Chief Actuary of the Centers 
                for Medicare & Medicaid Services.''.

SEC. 5. ESTABLISHMENT OF JOINT COMMITTEE ON MEDICARE.

    (a) In General.--There is hereby established the Joint Committee on 
Medicare (in this section referred to as the ``Joint Committee'').
    (b) Membership.--The Joint Committee shall be composed of 11 
members appointed as follows:
            (1) 5 members shall be appointed by the President pro 
        tempore of the Senate, on the recommendation of the majority 
        and minority leaders of the Senate, from among the members of 
        the Committee on Finance of the Senate, 3 of whom shall be from 
        the majority on the Committee and 2 of whom shall be from the 
        minority on the Committee; and
            (2) 6 members shall be appointed by the Speaker of the 
        House of Representatives, in consultation with the minority 
        leader of the House of Representatives--
                    (A) 3 from among the members of the Committee on 
                Ways and Means of the House of Representatives, 2 of 
                whom shall be from the majority on the Committee and 1 
                of whom shall be from the minority on the Committee; 
                and
                    (B) 3 from among the members of the Committee on 
                Energy and Commerce of the House of Representatives, 2 
                of whom shall be from the majority on the Committee and 
                1 of whom shall be from the minority on the Committee.
    (c) Duties.--The Joint Committee shall--
            (1) study the operation and effects of any changes proposed 
        by Congress to the Medicare Program under title XVIII of the 
        Social Security Act, and other matters relating to the Medicare 
        Program that the Joint Committee determines appropriate;
            (2) submit reports to the Committee on Finance of the 
        Senate and the Committee on Ways and Means and the Committee on 
        Energy and Commerce of the House of Representatives containing 
        the results of any studies conducted under paragraph (1), 
        including recommendations for such legislation and 
        administrative action as the Joint Committee determines 
        appropriate;
            (3) prepare pamphlets for hearings conducted by such 
        Committees, reports of such Committees, and conference reports 
        accompanying any legislation enacted by Congress relating to 
        the Medicare Program;
            (4) assist members of Congress in drafting legislative 
        language relating to the Medicare Program;
            (5) assist members of Congress with the development and 
        analysis of proposed legislation relating to the Medicare 
        Program; and
            (6) prepare impact estimates of all legislation relating to 
        the Medicare Program that is considered by Congress.
    (d) Hearings.--
            (1) In general.--The Joint Committee or, at the direction 
        of the Joint Committee, any subcommittee or member of the Joint 
        Committee, may, for the purpose of carrying out this Act--
                    (A) hold such hearings, meet and act at such times 
                and places, take such testimony, receive such evidence, 
                and administer such oaths; and
                    (B) require, by subpoena or otherwise, the 
                attendance and testimony of such witnesses and the 
                production of such books, records, correspondence, 
                memoranda, papers, documents, tapes, and materials;
        as the Joint Committee or such subcommittee or member considers 
        advisable.
            (2) Issuance and enforcement of subpoenas.--
                    (A) Issuance.--A subpoena issued under paragraph 
                (1) shall--
                            (i) bear the signature of the Chairperson 
                        of the Joint Committee; and
                            (ii) be served by any person or class of 
                        persons designated by the Chairperson for that 
                        purpose.
                    (B) Enforcement.--In the case of contumacy or 
                failure to obey a subpoena issued under paragraph 
                (1)(B), the United States district court for the 
                district in which the subpoenaed person resides, is 
                served, or may be found may issue an order requiring 
                the person to appear at any designated place to testify 
                or to produce documentary or other evidence.
                    (C) Noncompliance.--Any failure to obey the order 
                of the court may be punished by the court as a contempt 
                of court.
            (3) Witness allowances and fees.--
                    (A) In general.--Section 1821 of title 28, United 
                States Code, shall apply to a witness requested or 
                subpoenaed to appear at a hearing of the Joint 
                Committee.
                    (B) Expenses.--The per diem and mileage allowances 
                for a witness shall be paid from funds available to pay 
                the expenses of the Joint Committee.
    (e) Information From Federal Agencies.--
            (1) In general.--The Joint Committee may secure directly 
        from a Federal agency such information as the Joint Committee 
        considers necessary to carry out this Act, including any data 
        relating to the Medicare Program (including Medicare claims 
        data).
            (2) Provision of information.--On request of the Joint 
        Committee, the head of the agency shall provide the information 
        to the Joint Committee.
    (f) Postal Services.--The Joint Committee may use the United States 
mails in the same manner and under the same conditions as other 
agencies of the Federal Government.
    (g) Printing and Binding, Other Necessary Expenditures.--The Joint 
Committee may make necessary expenditures, including the procurement of 
printing and binding services, as the Joint Committee determines 
appropriate.
    (h) Joint Committee Personnel Matters.--
            (1) Compensation of members.--A member of the Joint 
        Committee shall serve without compensation in addition to the 
        compensation received for the services of the member as an 
        officer or employee of the Federal Government.
            (2) Travel expenses.--A member of the Joint Committee shall 
        be allowed travel expenses, including per diem in lieu of 
        subsistence, at rates authorized for an employee of an agency 
        under subchapter I of chapter 57 of title 5, United States 
        Code, while away from the home or regular place of business of 
        the member in the performance of the duties of the Joint 
        Committee.
            (3) Staff.--
                    (A) In general.--The Chairperson of the Joint 
                Committee may, without regard to the civil service laws 
                (including regulations), appoint and terminate an 
                executive director and such other additional personnel 
                as are necessary to enable the Joint Committee to 
                perform the duties of the Joint Committee.
                    (B) Confirmation of executive director.--The 
                employment of an executive director shall be subject to 
                confirmation by the Joint Committee.
                    (C) Compensation.--
                            (i) In general.--Except as provided in 
                        subparagraph (B), the Chairperson of the Joint 
                        Committee may fix the compensation of the 
                        executive director and other personnel without 
                        regard to the provisions of chapter 51 and 
                        subchapter III of chapter 53 of title 5, United 
                        States Code, relating to classification of 
                        positions and General Schedule pay rates.
                            (ii) Maximum rate of pay.--The rate of pay 
                        for the executive director and other personnel 
                        shall not exceed the rate payable for level V 
                        of the Executive Schedule under section 5316 of 
                        title 5, United States Code.
            (4) Detail of federal government employees.--
                    (A) In general.--An employee of the Federal 
                Government may be detailed to the Joint Committee 
                without reimbursement.
                    (B) Civil service status.--The detail of the 
                employee shall be without interruption or loss of civil 
                service status or privilege.
            (5) Procurement of temporary and intermittent services.--
        The Chairperson of the Joint Committee may procure temporary 
        and intermittent services in accordance with section 3109(b) of 
        title 5, United States Code, at rates for individuals that do 
        not exceed the daily equivalent of the annual rate of basic pay 
        prescribed for level V of the Executive Schedule under section 
        5316 of that title.
            (6) Nonpartisan staff.--Personnel of the Joint Committee 
        shall provide objective and confidential technical analysis and 
        assistance on legislation relating to the Medicare Program. 
        Such personnel--
                    (A) shall not operate as personnel solely for the 
                majority or the minority in Congress;
                    (B) shall not be responsible for representing a 
                particular point of view on any issue relating to the 
                Medicare Program; and
                    (C) shall examine critically policies under the 
                Medicare Program, including the long-range effects of 
                such policies.

SEC. 6. REVISIONS TO PROCESS FOR CONDUCT OF DEMONSTRATION PROJECTS.

    (a) In General.--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:

``SEC. 1899. CONDUCT OF DEMONSTRATION PROJECTS.

    ``(a) In General.--
            ``(1) Renaming and transfer of office of research, 
        development and information.--Effective beginning January 1, 
        2011, the Office of Research, Development and Information shall 
        be--
                    ``(A) transferred from the Administrator of the 
                Centers for Medicare & Medicaid Services to the 
                Assistant Secretary for Planning and Evaluation of the 
                Department of Health and Human Services; and
                    ``(B) renamed the Office of Research, Development 
                and Information of the Department of Health and Human 
                Services.
            ``(2) Authority to design and evaluate demonstration 
        projects.--The Office of Research, Development and Information 
        of the Department of Health and Human Services (in this section 
        referred to as the `Office') shall have sole authority to 
        design and evaluate demonstration projects under this title, 
        including demonstration projects to test new and innovative 
        methods of reimbursement under the Medicare program to improve 
        the quality and efficiency of health care and reduce costs 
        under the Medicare program.
            ``(3) Implementation.--The Secretary of Health and Human 
        Services (in this section referred to as the `Secretary') shall 
        maintain all responsibility for implementing demonstration 
        projects under this title, including for implementing the 
        process through which providers of services and suppliers are 
        reimbursed for items and services furnished under the 
        demonstration projects.
            ``(4) Authority to expand successful demonstration 
        projects.--
                    ``(A) Expansion.--Notwithstanding any other 
                provision of law, the Secretary may expand the duration 
                and scope of a demonstration project under this title, 
                to an extent determined appropriate by the Secretary, 
                if the Secretary determines that such expansion is 
                appropriate.
                    ``(B) Audits and reports.--
                            ``(i) Audits.--The Inspector General of the 
                        Department of Health and Human Services shall 
                        conduct an annual audit of any expansion under 
                        subparagraph (A) to determine whether the 
                        funding of and process for such expansion is 
                        consistent with Congressional intent and serves 
                        the best interest of beneficiaries.
                            ``(ii) Reports.--The Inspector General 
                        shall submit to Congress an annual report 
                        containing the results of any audits conducted 
                        under clause (i), together with recommendations 
                        for such legislation and administrative action 
                        as the Inspector General determines 
                        appropriate.
                    ``(C) Website.--The Office shall establish a 
                publicly available Internet website that contains 
                current information regarding demonstration projects 
                under this title, including a description of the 
                demonstration projects and the status, location, points 
                of contact, and any midterm or final evaluation of the 
                demonstration projects.
    ``(b) Advisory Committee.--
            ``(1) Establishment.--There is hereby established an 
        advisory committee to consult with the Office on existing and 
        proposed demonstration projects under this title.
            ``(2) Membership.--The advisory committee shall be composed 
        of the following members:
                    ``(A) The Chairman of the Medicare Payment and 
                Access Commission established under section 1805.
                    ``(B) The Director of the Agency for Healthcare 
                Research and Quality.
                    ``(C) The Administrator of the Centers for Medicare 
                & Medicaid Services.
                    ``(D) The National Coordinator for Health 
                Information Technology.
                    ``(E) The Director of the Office of Management and 
                Budget.
            ``(3) Duties.--Not less frequently than 2 times each year, 
        the advisory committee shall meet with the Office to consult on 
        demonstration projects under this title.
    ``(c) Elimination of Budget Neutral Implementation Requirement for 
Demonstration Projects.--Notwithstanding any other provision of law, 
the Secretary, in conducting a demonstration project under this title, 
shall not be required to ensure that the aggregate payments made by the 
Secretary under this title do not exceed the amount which the Secretary 
would have paid under this title if the demonstration project was not 
implemented.
    ``(d) Authorization of Appropriations.--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 established under 
section 1817 of the Social Security Act (42 U.S.C. 1395i), and 40 
percent of such appropriation shall be payable from the Federal 
Supplementary Medical Insurance Trust Fund established under section 
1841 of such Act (42 U.S.C. 1395t). Out of amounts appropriated under 
the preceding sentence, the Secretary may use not more than 
$500,000,000 each fiscal year to conduct demonstration projects to test 
new and innovative methods of reimbursement under the Medicare program 
that seek to improve quality and efficiency of health care reduce costs 
under the Medicare program.''.
    (b) Biannual Communications by MedPAC to the Secretary and 
Congress.--Section 1805(b) of the Social Security Act (42 U.S.C. 1395b-
6(b)), as amended by section 4, is amended by adding at the end the 
following new paragraph:
            ``(13) Not later than 30 days after each meeting of the 
        advisory committee established under section 1899(b), the 
        Commission shall send a detailed letter to the Secretary and to 
        Congress providing feedback on the following:
                    ``(A) Recommendations for demonstration projects 
                being conducted under this title as of the date of such 
                biannual meeting that should be expanded on a program-
                wide basis.
                    ``(B) Recommendations for such demonstration 
                projects that should be eliminated.
                    ``(C) Recommendations for potential changes to 
                improve, expand, or otherwise alter such demonstration 
                projects.
                    ``(D) Recommendations for new ideas to test through 
                demonstration projects conducted under this title.''.
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