II

104TH CONGRESS

1ST SESSION S. 1487

To establish a demonstration project to provide that the Department of

Defense may receive medicare reimbursement for health care services

provided to certain medicare-eligible covered military beneficiaries.

IN THE SENATE OF THE UNITED STATES

DECEMBER 20, 1995

Mr. MCCAIN for Mr. GRAMM (for himself, Mr. INOUYE, Mr. MCCAIN, Mrs.

HUTCHISON, and Mr. INHOFE) introduced the following bill; which was

read twice and referred to the Committee on Finance

A BILL

To establish a demonstration project to provide that the

Department of Defense may receive medicare reimbursement for health care services provided to certain medicare-eligible covered military beneficiaries.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Uniformed Services

5 Medicare Subvention Demonstration Project Act’’.

6 SEC. 2. DEFINITIONS.

7 For purposes of this Act:
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1 (1) MEDICARE-ELIGIBLE COVERED MILITARY

2 BENEFICIARY.—The term ‘‘medicare-eligible covered

3 military beneficiary’’ means a beneficiary under

4 chapter 55 of title 10, United States Code, including

5 a beneficiary under section 1074(a) of such title,

6 who is entitled to benefits under part A of title

7 XVIII of the Social Security Act (42 U.S.C. 1395 et

8 seq.).

9 (2) TRICARE PROGRAM.—The term

10 ‘‘TRICARE program’’ means the managed health

11 care program that is established by the Secretary of

12 Defense under the authority of chapter 55 of title

13 10, United States Code, principally section 1097 of

14 such title, and includes the competitive selection of

15 contractors to financially underwrite the delivery of

16 health care services under the Civilian Health and

17 Medical Program of the Uniformed Services.

18 (3) MILITARY TREATMENT FACILITY.—The

19 term ‘‘military treatment facility’’ means a facility

20 referred to in section 1074(a) of title 10, United

21 States Code.

22 SEC. 3. ESTABLISHMENT.

23 (a) IN GENERAL.—Not later than 180 days after the

24 date of the enactment of this Act, the Secretary of Defense

25 and the Secretary of Health and Human Services shall
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1 jointly establish a demonstration project to provide the

2 Department of Defense with reimbursement, in accord3 ance with section 4, from the medicare program under

4 title XVIII of the Social Security Act (42 U.S.C. 1395

5 et seq.) for health services provided to certain medicare6 eligible covered military beneficiaries.

7 (b) GEOGRAPHIC REGIONS.—The demonstration

8 project established under this section shall be conducted

9 in one or more geographic regions in which the TRICARE

10 program has been implemented.

11 (c) DURATION.—The demonstration project estab12 lished under this section shall be conducted for a period

13 not to exceed 2 years.

14 (d) REPORTING.—

15 (1) IN GENERAL.—

16 (A) FIRST ANNUAL REPORT.—Not later

17 than 15 months after the demonstration project

18 under this section has been established, the

19 Secretary of Defense and the Secretary of

20 Health and Human Services shall jointly submit

21 to Congress a report including the information

22 described in paragraph (2).

23 (B) FINAL REPORT.—Not later than 90

24 days after the termination of the demonstration

25 project, the Secretary shall jointly submit to
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1 Congress a final report including the informa2 tion described in paragraph (2).

3 (2) INFORMATION DESCRIBED.—The informa4 tion described in this paragraph includes the follow5 ing:

6 (A) The number of medicare-eligible cov7 ered military beneficiaries opting to participate

8 in the demonstration project established under

9 this section instead of receiving health benefits

10 through another health insurance plan (includ11 ing through the medicare program).

12 (B) Whether, and in what manner, easier

13 access to the military treatment system affects

14 the number of medicare-eligible covered military

15 beneficiaries receiving health benefits under the

16 medicare program.

17 (C) A list of the health insurance plans

18 and programs that were the primary payers for

19 medicare-eligible covered military beneficiaries

20 during the year prior to such beneficiary’s par21 ticipation in the demonstration project and the

22 distribution of enrollment of such beneficiaries

23 in such plans and programs.

24 (D) The total number of medicare-eligible

25 covered military beneficiaries who participated
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1 in the project during the preceding year and the

2 number of such beneficiaries who were entitled

3 to benefits under part A of title XVIII of the

4 Social Security Act (42 U.S.C. 1395 et seq.)

5 and were not enrolled under part B of such

6 title.

7 (E) An identification of cost-shifting (if

8 any) among medical care programs as a result

9 of the demonstration project and a description

10 of the nature of any such cost-shifting.

11 (F) An analysis of how the demonstration

12 project affects the overall accessibility of the

13 military treatment system and the amount of

14 space available for point-of-service care and a

15 description of the unintended effects (if any)

16 upon the normal treatment priority system.

17 (G) A description of the difficulties (if any)

18 experienced by the Department of Defense in

19 managing the demonstration project.

20 (H) A description of the effects of the

21 demonstration project on military treatment fa22 cility readiness and training and the probable

23 effects of the project on overall Department of

24 Defense medical readiness and training.
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1 (I) A description of the effects that the

2 demonstration project, if permanent, would be

3 expected to have on the overall budget of the

4 military health care system and the budgets of

5 individual military treatment facilities.

6 (J) Whether the demonstration project af7 fects the cost to the Department of Defense of

8 prescription drugs or the accessibility, availabil9 ity, and cost of such drugs to program bene10 ficiaries.

11 SEC. 4. REIMBURSEMENT AMOUNTS.

12 (a) PAYMENT TO DEPARTMENT OF DEFENSE.—The

13 Secretary of Health and Human Services shall make

14 monthly payments to the Department of Defense from the

15 Federal Hospital Insurance Trust Fund and the Federal

16 Supplementary Medical Insurance Trust Fund (allocated

17 between each Trust Fund in an amount to be determined

18 by the Secretary of Health and Human Services based on

19 the relative weight that benefits from each Trust Fund

20 contribute to the amounts determined under this sub21 section) in an amount equal to the sum of—

22 (1) the payments determined under subsection

23 (b) with respect to medicare-eligible covered military

24 beneficiaries who are enrolled in the TRICARE pro25 gram; and
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1 (2) the payments determined under subsection

2 (c) with respect to such beneficiaries who are not en3 rolled in the TRICARE program.

4 (b) TRICARE PAYMENTS.—

5 (1) IN GENERAL.—The amount of payment de6 termined under this subsection is an amount equal

to 1 7 ⁄12 of the amount determined under paragraph

8 (2) for each medicare-eligible covered military bene9 ficiary enrolled during the year in the TRICARE

10 program in a geographic region in which the dem11 onstration project is in operation, but only if such

12 beneficiary’s enrollment is in excess of the minimum

13 enrollment number determined under subsection

14 (d)(1)(A) for such geographic region.

15 (2) AMOUNT DETERMINED.—The amount de16 termined under this paragraph is an amount equal

17 to—

18 (A) in the case of an individual entitled to

19 benefits under part A and enrolled under part

20 B of title XVIII of the Social Security Act, 93

21 percent of the average adjusted per capita cost

22 determined under section 1876(a)(4) of the So23 cial Security Act (42 U.S.C. 1395mm(a)(4)) for

24 such year; or
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1 (B) in the case of an individual entitled to

2 benefits under part A and not enrolled under

3 part B of such title, an amount equal to the

4 amount determined under subparagraph (A) at5 tributable to services covered by and expenses

6 otherwise reimbursable under part A of such

7 title only.

8 (c) TREATMENT AT A MILITARY TREATMENT FACIL9 ITY.—The amount of payment determined under this sub10 section is an amount equal to the sum of the Secretary’s

11 estimates of the amounts determined for each health serv12 ice (using a DRG equivalent and fee schedule equivalent

13 scale developed by the Secretary of Health and Human

14 Services) provided during the month for which the pay15 ment is made under subsection (a) to each medicare-eligi16 ble covered military beneficiary (other than a beneficiary

17 who is enrolled in the TRICARE program) in a military

18 treatment facility located in a geographic region in which

19 the demonstration project is in operation, but only if such

level is in excess of 1 20 ⁄12 of the minimum level of health

21 services described under subsection (d)(1)(B) for such ge22 ographic region.

23 (d) ESTABLISHMENT OF BASE LEVEL OF COV24 ERAGE.—
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1 (1) IN GENERAL.—Prior to the establishment of

2 the demonstration project under this Act and subject

3 to paragraph (2), the Secretary of Defense and the

4 Secretary of Health and Human Services shall joint5 ly estimate, based on the best available data—

6 (A) a minimum enrollment number of med7 icare-eligible covered military beneficiaries who

8 are required to enroll in the TRICARE pro9 gram during a year in each geographic region

10 in which the demonstration project is in oper11 ation before the Department of Defense may re12 ceive payment under subsection (a)(1); and

13 (B) a minimum level of health services

14 (using a DRG equivalent and fee schedule

15 equivalent scale developed by the Secretary of

16 Health and Human Services) provided to medi17 care-eligible covered military beneficiaries (other

18 than beneficiaries enrolled in the TRICARE

19 program) during a year through a military

20 treatment facility in each geographic region in

21 which the demonstration project is in operation

22 before the Department of Defense may receive

23 payment under subsection (a)(2).

24 (2) DETERMINATION OF BASELINE COSTS.—

25 The Secretary of Defense and the Secretary of
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1 Health and Human Services shall establish the mini2 mum enrollment number under paragraph (1)(A)

3 and the minimum level of health services under

4 paragraph (1)(B) such that the projected expendi5 tures by the Department of Defense for such num6 ber of medicare-eligible covered military beneficiaries

7 and such level of services provided to such bene8 ficiaries by the Department of Defense is equivalent

9 to the projected expenditures that would have been

10 made by the Department for such beneficiaries if the

11 demonstration project under this Act had not been

12 established.

13 (3) UPPER REIMBURSEMENT LIMITS.—The Sec14 retary of Defense and the Secretary of Health and

15 Human Services shall jointly establish a maximum

16 number of medicare-eligible covered military bene17 ficiaries and maximum level of health services for

18 which payment may be made by the Secretary of

19 Health and Human Services under subsection (a).

20 (e) TRICARE PROGRAM ENROLLMENT FEE WAIV21 ER.—The Secretary of Defense shall waive the enrollment

22 fee applicable to any individual enrolled in the TRICARE

23 program for whom reimbursement in the amount deter24 mined under subsection (b)(2)(A) is received under sub25 section (b)(1).
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1 SEC. 5. MEDICARE SUBVENTION FUND.

2 (a) ESTABLISHMENT.—There is hereby established in

3 the Treasury of the United States a revolving fund known

4 as the Medicare Subvention Fund (hereafter in this sec5 tion referred to as the ‘‘Fund’’).

6 (b) USE OF FUNDS.—The Fund shall be available to

7 the Secretary of Defense, as so provided in appropriations

8 Acts from funds otherwise appropriated to the Depart9 ment of Defense, and without fiscal year limitation—

10 (1) to make payments to the Secretary of

11 Health and Human Services for deposit into the

12 Federal Hospital Insurance Trust Fund and the

13 Federal Supplementary Medical Insurance Trust

14 Fund in order to reimburse such Funds for addi15 tional costs to such Trust Funds resulting from the

16 operation of the demonstration project established

17 under this Act;

18 (2) to provide for the participation of medicare19 eligible covered military beneficiaries in excess of the

20 maximum enrollment number and maximum level of

21 health services established under section 4(d)(1);

22 (3) to provide for payment of administrative ex23 penses associated with the demonstration project es24 tablished under this Act; and

25 (4) if amounts are available in the Fund after

26 expenditures are made under paragraphs (1)
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1 through (3), for any other lawful purpose for which

2 the Secretary of Defense may expend funds.

3 (c) NO FUNDS AVAILABLE.—The Secretary of De4 fense may, if inadequate amounts are available in the

5 Fund, limit the enrollment of medicare-eligible covered

6 military beneficiaries in the demonstration project estab7 lished under this Act.

8 (d) AUTHORIZATION OF APPROPRIATIONS.—For

9 each of fiscal years 1997 and 1998, there are authorized

10 to be appropriated from funds otherwise appropriated to

11 the Department of Defense, for deposit in the Fund such

12 sums as may be necessary to carry out the purposes de13 scribed in paragraphs (1) through (3) of subsection (c).

14 Any amounts appropriated in accordance with this sub15 section shall not be taken into account in establishing ap16 propriations levels for the Department of Defense health

17 affairs budget.

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