II

106TH CONGRESS

2D SESSION S. 2905

To amend title XVIII of the Social Security Act to make improvements

to the Medicare+Choice program under part C of the medicare program.

IN THE SENATE OF THE UNITED STATES

JULY 21, 2000

Mr. BINGAMAN 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 make

improvements to the Medicare+Choice program under

part C of the medicare program.

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; TABLE OF CONTENTS.

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

5 ‘‘Medicare+Choice Program Improvement Act of 2000’’.

6 (b) TABLE OF CONTENTS.—The table of contents of

7 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Increase in national per capita Medicare+Choice growth percentage in

2001 and 2002.

Sec. 3. Increasing minimum payment amount.

Sec. 4. Allowing movement to 50:50 percent blend in 2002.
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Sec. 5. Increased update for payment areas with only one or no

Medicare+Choice contracts.

Sec. 6. Permitting higher negotiated rates in certain Medicare+Choice payment

areas below national average.

Sec. 7. 10-year phase-in of risk adjustment based on data from all settings.

Sec. 8. Delay from July to October 2000 in deadline for offering and withdrawing Medicare+Choice plans for 2001.

1 SEC. 2. INCREASE IN NATIONAL PER CAPITA

2 MEDICARE+CHOICE GROWTH PERCENTAGE

3 IN 2001 AND 2002.

4 Section 1853(c)(6)(B) of the Social Security Act (42

5 U.S.C. 1395w–23(c)(6)(B)) is amended—

6 (1) in clause (iii), by adding ‘‘and’’ at the end;

7 (2) by striking clauses (iv) and (v);

8 (3) by redesignating clause (vi) as clause (iv);

9 and

10 (4) in clause (iv), as so redesignated, by strik11 ing ‘‘after 2002’’ and inserting ‘‘after 2000’’.

12 SEC. 3. INCREASING MINIMUM PAYMENT AMOUNT.

13 (a) IN GENERAL.—Section 1853(c)(1)(B)(ii) of the

14 Social Security Act (42 U.S.C. 1395w–23(c)(1)(B)(ii)) is

15 amended—

16 (1) by striking ‘‘(ii) For a succeeding year’’ and

17 inserting ‘‘(ii)(I) Subject to subclause (II), for a suc18 ceeding year’’; and

19 (2) by adding at the end the following new sub20 clause:
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1 ‘‘(II) For 2002 for any of the 50

2 States and the District of Columbia,

3 $500.’’.

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

5 subsection (a) apply to years beginning with 2002.

6 SEC. 4. ALLOWING MOVEMENT TO 50:50 PERCENT BLEND IN

7 2002.

8 Section 1853(c)(2) of the Social Security Act (42

9 U.S.C. 1395w–23(c)(2)) is amended—

10 (1) by striking the period at the end of sub11 paragraph (F) and inserting a semicolon; and

12 (2) by adding at the end the following flush

13 matter:

14 ‘‘except that a Medicare+Choice organization may

15 elect to apply subparagraph (F) (rather than sub16 paragraph (E)) for 2002.’’.

17 SEC. 5. INCREASED UPDATE FOR PAYMENT AREAS WITH

18 ONLY ONE OR NO MEDICARE+CHOICE CON19 TRACTS.

20 (a) IN GENERAL.—Section 1853(c)(1)(C)(ii) of the

21 Social Security Act (42 U.S.C. 1395w–23(c)(1)(C)(ii)) is

22 amended—

23 (1) by striking ‘‘(ii) For a subsequent year’’

24 and inserting ‘‘(ii)(I) Subject to subclause (II), for

25 a subsequent year’’; and
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1 (2) by adding at the end the following new sub2 clause:

3 ‘‘(II) During 2002, 2003, 2004, and

4 2005, in the case of a Medicare+Choice

5 payment area in which there is no more

6 than one contract entered into under this

7 part as of July 1 before the beginning of

8 the year, 102.5 percent of the annual

9 Medicare+Choice capitation rate under

10 this paragraph for the area for the pre11 vious year.’’.

12 (b) CONSTRUCTION.—The amendments made by sub13 section (a) do not affect the payment of a first time bonus

14 under section 1853(i) of the Social Security Act (42

15 U.S.C. 1395w–23(i)).

16 SEC. 6. PERMITTING HIGHER NEGOTIATED RATES IN CER17 TAIN MEDICARE+CHOICE PAYMENT AREAS

18 BELOW NATIONAL AVERAGE.

19 Section 1853(c)(1) of the Social Security Act (42

20 U.S.C. 1395w–23(c)(1)) is amended—

21 (1) in the matter preceding subparagraph (A),

22 by striking ‘‘or (C)’’ and inserting ‘‘(C), or (D)’’;

23 and

24 (2) by adding at the end the following new sub25 paragraph:
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1 ‘‘(D) PERMITTING HIGHER RATES

2 THROUGH NEGOTIATION.—

3 ‘‘(i) IN GENERAL.—For each year be4 ginning with 2001, in the case of a

5 Medicare+Choice payment area for which

6 the Medicare+Choice capitation rate under

7 this paragraph would otherwise be less

8 than the United States per capita cost

9 (USPCC), as calculated by the Secretary,

10 a Medicare+Choice organization may ne11 gotiate with the Secretary an annual per

12 capita rate that—

13 ‘‘(I) reflects an annual rate of in14 crease up to the rate of increase speci15 fied in clause (ii);

16 ‘‘(II) takes into account audited

17 current data supplied by the organiza18 tion on its adjusted community rate

19 (as defined in section 1854(f)(3)); and

20 ‘‘(III) does not exceed the United

21 States per capita cost, as projected by

22 the Secretary for the year involved.

23 ‘‘(ii) MAXIMUM RATE DESCRIBED.—

24 The rate of increase specified in this clause

25 for a year is the rate of inflation in private
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1 health insurance for the year involved, as

2 projected by the Secretary, and includes

3 such adjustments as may be necessary—

4 ‘‘(I) to reflect the demographic

5 characteristics in the population under

6 this title; and

7 ‘‘(II) to eliminate the costs of

8 prescription drugs.

9 ‘‘(iii) ADJUSTMENTS FOR OVER OR

10 UNDER PROJECTIONS.—If this subpara11 graph is applied to an organization and

12 payment area for a year, in applying this

13 subparagraph for a subsequent year the

14 provisions of paragraph (6)(C) shall apply

15 in the same manner as such provisions

16 apply under this paragraph.’’.

17 SEC. 7. 10-YEAR PHASE-IN OF RISK ADJUSTMENT BASED ON

18 DATA FROM ALL SETTINGS.

19 Section 1853(a)(3)(C)(ii) of the Social Security Act

20 (42 U.S.C. 1395w–23(c)(1)(C)(ii)) is amended—

21 (1) by striking the period at the end of sub22 clause (II) and inserting a semicolon; and

23 (2) by adding at the end the following flush

24 matter:
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1 ‘‘and, beginning in 2004, insofar as such

2 risk adjustment is based on data from all

3 settings, the methodology shall be phased4 in in equal increments over a 10-year pe5 riod, beginning with 2004 or (if later) the

6 first year in which such data is used.’’.

7 SEC. 8. DELAY FROM JULY TO NOVEMBER 2000 IN DEAD8 LINE FOR OFFERING AND WITHDRAWING

9 MEDICARE+CHOICE PLANS FOR 2001.

10 Notwithstanding any other provision of law, the dead11 line for a Medicare+Choice organization to withdraw the

12 offering of a Medicare+Choice plan under part C of title

13 XVIII of the Social Security Act (or otherwise to submit

14 information required for the offering of such a plan) for

15 2001 is delayed from July 1, 2000, to November 1, 2000,

16 and any such organization that provided notice of with17 drawal of such a plan during 2000 before the date of en18 actment of this Act may rescind such withdrawal at any

19 time before November 1, 2000.

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