II

106TH CONGRESS

2D SESSION S. 3165

To amend the Social Security Act to make corrections and refinements in

the Medicare, Medicaid, and SCHIP health insurance programs, as revised by the Balanced Budget Act of 1997 and the Medicare, Medicaid,

and SCHIP Balanced Budget Refinement Act of 1999, and for other

purposes.

IN THE SENATE OF THE UNITED STATES

OCTOBER 5 (legislative day, SEPTEMBER 22), 2000

Mr. ROTH (for himself, Mr. MOYNIHAN, Mr. JEFFORDS, Mr. MURKOWSKI, Mr.

HATCH, and Mr. KERREY) introduced the following bill; which was read

the first time

A BILL

To amend the Social Security Act to make corrections and

refinements in the Medicare, Medicaid, and SCHIP

health insurance programs, as revised by the Balanced

Budget Act of 1997 and the Medicare, Medicaid, and

SCHIP Balanced Budget Refinement Act of 1999, and

for other purposes.

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

3 TABLE OF CONTENTS.

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

5 ‘‘Medicare, Medicaid, and SCHIP Balanced Budget Re6 finement Act of 2000’’.

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

9 Act an amendment is expressed in terms of an amendment

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

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

12 provision of the Social Security Act.

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

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

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

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

17 (2) THE MEDICARE, MEDICAID, AND SCHIP

18 BALANCED BUDGET REFINEMENT ACT OF 1999.—

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

20 and SCHIP Balanced Budget Refinement Act of

21 1999 (113 Stat. 1501A–321), as enacted into law by

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

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

24 this Act is as follows:

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

table of contents.
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TITLE I—BENEFIT IMPROVEMENTS

Subtitle A—Beneficiary Assistance

Sec. 101. Limiting copayment amount for hospital outpatient services.

Sec. 102. Coverage of immunosuppressive drugs.

Sec. 103. Preservation of coverage of drugs and biologicals under part B of the

medicare program.

Sec. 104. Moratorium on reductions in current reimbursement rates for outpatient drugs and biologicals; GAO study and report and HHS

comments.

Subtitle B—Improved Preventive Benefits

Sec. 111. Coverage of biannual screening pap smear and pelvic exams.

Sec. 112. Coverage of screening colonoscopy for average risk individuals.

Sec. 113. Medical nutrition therapy services for beneficiaries with diabetes, a

cardiovascular disease, or a renal disease.

Sec. 114. State accreditation of diabetes self-management training programs.

Sec. 115. Studies on preventive interventions in primary care for older Americans.

Sec. 116. Institute of Medicine 3-year medicare prevention benefit study and

report.

Sec. 117. MedPAC study and report on medicare coverage of cardiac and pulmonary rehabilitation therapy services.

TITLE II—RURAL HEALTH CARE IMPROVEMENTS

Subtitle A—Critical Access Hospital Provisions

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

Sec. 202. Revision of payment for professional services provided by a critical

access hospital.

Sec. 203. Permitting critical access hospitals to operate PPS exempt distinct

part psychiatric and rehabilitation units.

Sec. 204. Exemption of critical access hospital swing beds from SNF PPS.

Subtitle B—Other Rural Hospital Provisions

Sec. 211. Equitable treatment for rural disproportionate share hospitals.

Sec. 212. Option to base eligibility for medicare dependent, small rural hospital

program on discharges during any of the 3 most recent audited

cost reporting periods.

Sec. 213. Extension of option to use rebased target amounts to all sole community hospitals.

Sec. 214. MedPAC analysis of impact of volume on per unit cost of rural hospitals with psychiatric units.

Subtitle C—Other Rural Provisions

Sec. 221. Provider-based rural health clinic cap exemption.

Sec. 222. Payment for certain physician assistant services.

Sec. 223. Temporary increase for home health services furnished in a rural

area.

Sec. 224. Refinement of medicare reimbursement for telehealth services.

Sec. 225. MedPAC study on low-volume, isolated rural health care providers.
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TITLE III—PROVISIONS RELATING TO PART A

Subtitle A—PPS Hospitals

Sec. 301. Delay of reduction in PPS hospital payment update.

Sec. 302. Revision of reduction of indirect graduate medical education payments.

Sec. 303. Decrease in reductions for disproportionate share hospital payments.

Sec. 304. Modification of payment rate for Puerto Rico hospitals.

Sec. 305. MedPAC study and report on hospital area wage indexes.

Sec. 306. MedPAC study and report regarding certain hospital costs.

Subtitle B—PPS Exempt Hospitals

Sec. 311. Permanent guarantee of pre-BBA payment levels for outpatient services furnished by children’s hospitals.

Sec. 312. Payment for inpatient services of rehabilitation hospitals.

Sec. 313. Implementation of prospective payment system for long-term care

hospitals.

Subtitle C—Skilled Nursing Facilities

Sec. 321. Revision to the skilled nursing facility (SNF) market basket update

for fiscal years 2001 and 2002.

Sec. 322. Application of SNF consolidated billing requirement limited to part

A covered stays.

Sec. 323. Reexamination of, and authority to revise, the skilled nursing facility

market basket percentage increase.

Subtitle D—Hospice Care

Sec. 331. Revision of market basket increase for 2001 and 2002.

Sec. 332. Study and report on physician certification requirement for hospice

benefits.

Sec. 333. Hospice demonstration program and hospice education grants.

Subtitle E—Other Provisions

Sec. 341. Six-month delay in implementation of rule regarding provider-based

criteria.

TITLE IV—PROVISIONS RELATING TO PART B

Subtitle A—Hospital Outpatient Services

Sec. 401. Application of transitional corridor to certain hospitals that did not

submit a 1996 cost report.

Sec. 402. Clarifying process and standards for determining eligibility of devices

for pass-through payments under hospital outpatient PPS.

Sec. 403. Contrast enhanced diagnostic procedures under hospital prospective

payment system.

Sec. 404. Transitional pass-through for contrast agents.

Subtitle B—Provisions Relating to Physicians

Sec. 411. MedPAC study on the resource-based practice expense system.

Sec. 412. GAO studies and reports on medicare payments.

Sec. 413. GAO study on gastrointestinal endoscopic services furnished in physicians’ offices and hospital outpatient department services.
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Subtitle C—Ambulance Services

Sec. 421. Elimination of reduction in inflation adjustments for ambulance services.

Sec. 422. Election to forego phase-in of fee schedule for ambulance services.

Sec. 423. Study and report on the costs of rural ambulance services.

Sec. 424. GAO study and report on the costs of emergency and medical transportation services.

Subtitle D—Other Services

Sec. 431. Revision of moratorium in caps for therapy services.

Sec. 432. Update in renal dialysis composite rate.

Sec. 433. Full update in 2001 for durable medical equipment, oxygen, and oxygen equipment.

Sec. 434. National limitation amount equal to 100 percent of national median

for new pap smear technologies and other new clinical laboratory test technologies.

Sec. 435. Delay and revision of PPS for ambulatory surgical centers.

Sec. 436. Treatment of certain physician pathology services.

Sec. 437. Modification of medicare billing requirements for certain Indian providers.

Sec. 438. Replacement of prosthetic devices and parts.

Sec. 439. MedPAC study and report on medicare reimbursement for services

provided by certain providers.

Sec. 440. MedPAC study and report on medicare coverage of services provided

by certain non-physician providers.

TITLE V—PROVISIONS RELATING TO PARTS A AND B

Subtitle A—Home Health Services

Sec. 501. 1-year additional delay in application of 15 percent reduction on payment limits for home health services.

Sec. 502. Restoration of full home health market basket update for home

health services for fiscal year 2001.

Sec. 503. Exclusion of certain nonroutine medical supplies under the PPS for

home health services.

Sec. 504. Treatment of branch offices; GAO study on supervision of home

health care provided in isolated rural areas.

Sec. 505. Temporary additional payments for high-cost patients.

Sec. 506. Clarification of the homebound definition under the medicare home

health benefit.

Subtitle B—Direct Graduate Medical Education

Sec. 511. Authority to include costs of training of clinical psychologists in payments to hospitals.

TITLE VI—PROVISIONS RELATING TO PART C

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

Subtitle A—Medicare+Choice Payment Reforms

Sec. 601. Increase in national per capita medicare+choice growth percentage in

2001 and 2002.

Sec. 602. Removing application of budget neutrality for 2002.
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Sec. 603. Increase in minimum payment amount.

Sec. 604. Allowing movement to 50:50 percent blend in 2002.

Sec. 605. Increased update for payment areas with only one or no

medicare+choice contracts.

Sec. 606. 10-year phase-in of risk adjustment and new methodology.

Sec. 607. Permitting premium reductions as additional benefits under

medicare+choice plans.

Sec. 608. Delay from July to November 2000, in deadline for offering and

withdrawing medicare+choice plans for 2001.

Sec. 609. Revision of payment rates for ESRD patients enrolled in

medicare+choice plans.

Sec. 610. Modification of payment rules for certain frail elderly medicare beneficiaries.

Sec. 611. Full implementation of risk adjustment for congestive heart failure

enrollees for 2001.

Sec. 612. Inclusion of costs of DOD military treatment facility services to medicare-eligible beneficiaries in calculation of medicare+choice

payment rates.

Subtitle B—Other Medicare+Choice Reforms

Sec. 621. Amounts in medicare trust funds available for Secretary’s share of

medicare+choice education and enrollment-related costs.

Sec. 622. Special medigap enrollment antidiscrimination provision for certain

beneficiaries.

Sec. 623. Restoring effective date of elections and changes of elections of

medicare+choice plans.

Sec. 624. Permitting ESRD beneficiaries to enroll in another medicare+choice

plan if the plan in which they are enrolled is terminated.

Sec. 625. Election of uniform local coverage policy for medicare+choice plan

covering multiple localities.

Subtitle C—Other Managed Care Reforms

Sec. 631. Revised terms and conditions for extension of medicare community

nursing organization (CNO) demonstration project.

Sec. 632. Service area expansion for medicare cost contracts during transition

period.

TITLE VII—MEDICAID

Sec. 701. New prospective payment system for Federally-qualified health centers and rural health clinics.

Sec. 702. Medicaid DSH allotments.

Sec. 703. Permanent extension of payment of medicare part B premiums for

qualified medicare beneficiaries with income up to 135 percent

of poverty.

Sec. 704. Streamlined approval of continued State-wide section 1115 medicaid

waivers.

Sec. 705. Alaska FMAP.

TITLE VIII—STATE CHILDREN’S HEALTH INSURANCE PROGRAM

(SCHIP)

Sec. 801. Special rule for redistribution and availability of unused fiscal year

1998 and 1999 SCHIP allotments.

Sec. 802. Presumptive eligibility under SCHIP.
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Sec. 803. Authority to pay medicaid expansion SCHIP costs from title XXI appropriation.

TITLE IX—OTHER PROVISIONS

Sec. 901. Increase in authorization of appropriations for the maternal and child

health services block grant.

Sec. 902. Increase in appropriations for special diabetes programs for children

with type I diabetes and Indians.

1 TITLE I—BENEFIT

2 IMPROVEMENTS

3 Subtitle A—Beneficiary Assistance

4 SEC. 101. LIMITING COPAYMENT AMOUNT FOR HOSPITAL

5 OUTPATIENT SERVICES.

6 (a) IN GENERAL.—Section 1833(t)(8)(C) (42 U.S.C.

7 1395l(t)(8)(C)) is amended—

8 (1) in the heading, by striking ‘‘TO INPATIENT

9 HOSPITAL DEDUCTIBLE AMOUNT’’; and

10 (2) by striking ‘‘exceed the amount’’ and all

11 that follows before the period and inserting ‘‘exceed

12 an amount equal to the greater of—

13 ‘‘(i) one-half of the amount of the in14 patient hospital deductible established

15 under section 1813(b) for that year; or

16 ‘‘(ii) 20 percent of the payment

17 amount determined under this subsection

18 for the procedure.’’.

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

20 subsection (a) shall apply with respect to services fur21 nished on or after January 1, 2001.
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1 SEC. 102. COVERAGE OF IMMUNOSUPPRESSIVE DRUGS.

2 (a) ELIMINATION OF TIME LIMITATION FOR COV3 ERAGE OF IMMUNOSUPPRESSIVE DRUGS.—

4 (1) IN GENERAL.—Section 1861(s)(2)(J) (42

5 U.S.C. 1395x(s)(2)(J)) is amended to read as fol6 lows:

7 ‘‘(J) prescription drugs used in immuno8 suppressive therapy furnished to an individual

9 who—

10 ‘‘(A) receives an organ transplant for

11 which payment is made under this title; or

12 ‘‘(B) received an organ transplant during

13 the 36-month period immediately preceding the

14 individual’s most recent effective date of cov15 erage of benefits under this part.’’.

16 (2) CONFORMING AMENDMENTS.—

17 (A) EXTENDED COVERAGE.—Section 1832

18 (42 U.S.C. 1395k) is amended—

19 (i) by striking subsection (b); and

20 (ii) by redesignating subsection (c) as

21 subsection (b).

22 (B) PASS-THROUGH; REPORT.—Sub23 sections (c) and (d) of section 227 of BBRA

24 (113 Stat. 1501A–355) are repealed.
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1 (b) CONTINUED ENTITLEMENT FOR IMMUNO2 SUPPRESSIVE DRUGS FOR CERTAIN INDIVIDUALS AFTER

3 MEDICARE BENEFITS END.—

4 (1) IN GENERAL.—Section 226A(b)(2) (42

5 U.S.C. 426–1(b)(2)) is amended by inserting ‘‘(ex6 cept for the provision of immunosuppressive drugs

7 pursuant to section 1861(s)(2)(J))’’ after ‘‘shall

8 end’’.

9 (2) APPLICATION.—In the case of an individual

10 whose eligibility for benefits under title XVIII of the

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

12 ended except for the provision of immunosuppressive

13 drugs pursuant to the amendment made by para14 graph (1), such individual shall be deemed to be en15 rolled in the original medicare fee-for-service pro16 gram for purposes of receiving coverage of such

17 drugs.

18 (3) TECHNICAL AMENDMENT.—Subsection (c)

19 of section 226A (42 U.S.C. 426–1), as added by sec20 tion 201(a)(3)(D)(ii) of the Social Security Inde21 pendence and Program Improvements Act of 1994

22 (Public Law 103–296; 108 Stat. 1497), is redesig23 nated as subsection (d).

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

25 this section shall apply to immunosuppressive drugs fur-
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1 nished on or after January 1, 2000, to individuals whose

2 period of entitlement (without regard to the amendment

3 made by subsection (b)(1)) to such drugs under title

4 XVIII of the Social Security Act ends after such date.

5 SEC. 103. PRESERVATION OF COVERAGE OF DRUGS AND

6 BIOLOGICALS UNDER PART B OF THE MEDI7 CARE PROGRAM.

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

9 1395x(s)(2)) is amended, in each of subparagraphs (A)

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

11 which cannot, as determined in accordance with regula12 tions, be self-administered)’’ and inserting ‘‘(including

13 injectable and infusable drugs and biologicals which are

14 not usually self-administered by the patient)’’.

15 (b) PRESERVING EXISTING COVERAGE OF

16 INJECTABLE AND INFUSABLE DRUGS AND

17 BIOLOGICALS.—

18 (1) REPORT TO CONGRESS REQUIRED BEFORE

19 COVERAGE IS LIMITED OR TERMINATED.—Notwith20 standing any other provision of law, beginning on

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

22 Health and Human Services (in this subsection re23 ferred to as the ‘‘Secretary’’) may not limit or termi24 nate coverage (or permit an agency or organization

25 with a contract under section 1816 or 1842 of the
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1 Social Security Act (42 U.S.C. 1395h; 42 U.S.C.

2 1395u) to limit or terminate coverage) of any

3 injectable or infusable drug or biological that was re4 imbursed (as determined under policies established

5 by each such agency or organization) under section

6 1861(s)(2) of such Act (42 U.S.C. 1395x(s)(2)) on

7 January 1, 2000, solely on the basis that the drug

8 or biological can be self-administered. This para9 graph shall apply to any such drug or biological

10 until the date that is 60 days after the date on

11 which the Secretary submits to Congress a report

12 described in paragraph (2) with respect to such drug

13 or biological.

14 (2) REPORT DESCRIBED.—A report described

15 in this paragraph is a report that describes in

16 detail—

17 (A) the action the Secretary (or any agen18 cy or organization described in paragraph (1))

19 proposes to take with respect to the limitation

20 or termination of coverage of an injectable or

21 infusable drug or biological under section

22 1861(s)(2) of the Social Security Act (42

23 U.S.C. 1395x(s)(2)); and

24 (B) the reasons for taking such action.
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1 (c) EFFECTIVE DATE.—The amendment made by

2 subsection (a) shall apply to drugs and biologicals fur3 nished on or after October 1, 2000.

4 SEC. 104. MORATORIUM ON REDUCTIONS IN CURRENT RE5 IMBURSEMENT RATES FOR OUTPATIENT

6 DRUGS AND BIOLOGICALS; GAO STUDY AND

7 REPORT AND HHS COMMENTS.

8 (a) MORATORIUM.—Notwithstanding any other pro9 vision of law, the Secretary of Health and Human Services

10 may not implement any reduction in the rate of reimburse11 ment for any outpatient drug or biological under the medi12 care program under title XVIII of the Social Security Act

13 (42 U.S.C. 1395 et seq.) during the period that begins

14 on the date of enactment of this Act and ends on Sep15 tember 15, 2001.

16 (b) GAO STUDY AND REPORT REGARDING REIM17 BURSEMENT RATES FOR OUTPATIENT DRUGS AND

18 BIOLOGICALS.—

19 (1) STUDY.—

20 (A) IN GENERAL.—The Comptroller Gen21 eral of the United States shall conduct a study

22 on the reasonableness of the reimbursement

23 policy for outpatient drugs and biologicals

24 under the medicare program under title XVIII

25 of the Social Security Act (42 U.S.C. 1395 et
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1 seq.) based on the average wholesale price of

2 such drugs.

3 (B) REQUIREMENTS.—The study described

4 in subparagraph (A) shall include an examina5 tion of the purchase prices providers pay for

6 such drugs and biologicals and an identification

7 of the factors that affect such purchase prices.

8 (2) REPORT.—Not later than July 1, 2001, the

9 Comptroller General of the United States shall sub10 mit to the Secretary of Health and Human Services

11 and Congress a report on the study conducted under

12 paragraph (1) together with recommendations for

13 such legislation and administrative actions as the

14 Comptroller General considers appropriate regarding

15 any adjustment in payment policy necessary to en16 sure reasonable reimbursement for outpatient drugs

17 and biologicals under the medicare program.

18 (c) COMMENTS.—Not later than 90 days after the

19 date on which the Comptroller General of the United

20 States submits the report under subsection (b) to the Sec21 retary of Health and Human Services, the Secretary shall

22 submit comments on such report to Congress.
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1 Subtitle B—Improved Preventive

2 Benefits

3 SEC. 111. COVERAGE OF BIANNUAL SCREENING PAP SMEAR

4 AND PELVIC EXAMS.

5 (a) IN GENERAL.—

6 (1) BIANNUAL SCREENING PAP SMEAR.—Sec7 tion 1861(nn)(1) (42 U.S.C. 1395x(nn)(1)) is

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

9 years’’.

10 (2) BIANNUAL SCREENING PELVIC EXAM.—Sec11 tion 1861(nn)(2) (42 U.S.C. 1395x(nn)(2)) is

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

13 years’’.

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

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

16 on or after January 1, 2001.

17 SEC. 112. COVERAGE OF SCREENING COLONOSCOPY FOR

18 AVERAGE RISK INDIVIDUALS.

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

20 1395x(pp)) is amended—

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

22 case of an individual at high risk for colorectal can23 cer, screening colonoscopy’’ and inserting ‘‘Screening

24 colonoscopy’’; and
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1 (2) in paragraph (2), by striking ‘‘In paragraph

2 (1)(C), an’’ and inserting ‘‘An’’.

3 (b) FREQUENCY LIMITS FOR SCREENING

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

5 is amended—

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

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

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

9 cancer, if the procedure is performed within the 119

10 months after a previous screening colonoscopy’’;

11 (2) in paragraph (3)—

12 (A) in the heading by striking ‘‘FOR INDI13 VIDUALS AT HIGH RISK FOR COLORECTAL CAN14 CER’’;

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

16 individuals at high risk for colorectal cancer (as

17 defined in section 1861(pp)(2))’’;

18 (C) in subparagraph (E), by inserting be19 fore the period at the end the following: ‘‘or for

20 other individuals if the procedure is performed

21 within the 119 months after a previous screen22 ing colonoscopy or within 47 months of a pre23 vious screening flexible sigmoidoscopy’’.
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section apply to colorectal cancer screening services

3 provided on or after January 1, 2001.

4 SEC. 113. MEDICAL NUTRITION THERAPY SERVICES FOR

5 BENEFICIARIES WITH DIABETES, A CARDIO6 VASCULAR DISEASE, OR A RENAL DISEASE.

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

8 1395x(s)(2)) is amended—

9 (1) in subparagraph (S), by striking ‘‘and’’ at

10 the end;

11 (2) in subparagraph (T), by adding ‘‘and’’ at

12 the end; and

13 (3) by adding at the end the following new sub14 paragraph:

15 ‘‘(U) medical nutrition therapy services (as de16 fined in subsection (uu)(1)) in the case of a bene17 ficiary with diabetes, a cardiovascular disease (in18 cluding congestive heart failure, arteriosclerosis,

19 hyperlipidemia, hypertension, and

20 hypercholesterolemia), or a renal disease;’’.

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

22 1395x) is amended by adding at the end the following new

23 subsection:
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1 ‘‘Medical Nutrition Therapy Services; Registered

2 Dietitian or Nutrition Professional

3 ‘‘(uu)(1) The term ‘medical nutrition therapy serv4 ices’ means nutritional diagnostic, therapy, and counseling

5 services for the purpose of disease management which are

6 furnished by a registered dietitian or nutrition profes7 sional (as defined in paragraph (2)) pursuant to a referral

8 by a physician (as defined in subsection (r)(1)).

9 ‘‘(2) Subject to paragraph (3), the term ‘registered

10 dietitian or nutrition professional’ means an individual

11 who—

12 ‘‘(A) holds a baccalaureate or higher degree

13 granted by a regionally accredited college or univer14 sity in the United States (or an equivalent foreign

15 degree) with completion of the academic require16 ments of a program in nutrition or dietetics, as ac17 credited by an appropriate national accreditation or18 ganization recognized by the Secretary for this pur19 pose;

20 ‘‘(B) has completed at least 900 hours of super21 vised dietetics practice under the supervision of a

22 registered dietitian or nutrition professional; and

23 ‘‘(C)(i) is licensed or certified as a dietitian or

24 nutrition professional by the State in which the serv25 ice is performed; or
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1 ‘‘(ii) in the case of an individual in a State that

2 does not provide for such licensure or certification,

3 meets such other criteria as the Secretary estab4 lishes.

5 ‘‘(3) Subparagraphs (A) and (B) of paragraph (2)

6 shall not apply in the case of an individual who, as of the

7 date of enactment of this subsection, is licensed or cer8 tified as a dietitian or nutrition professional by the State

9 in which the medical nutrition therapy service is per10 formed.’’.

11 (c) LIMITATION ON FREQUENCY.—Section 1834 (42

12 U.S.C. 1395m) is amended by adding at the end the fol13 lowing new subsection:

14 ‘‘(m) FREQUENCY LIMITATION FOR COVERAGE OF

15 MEDICAL NUTRITION THERAPY SERVICES.—Notwith16 standing any other provision of this part, no payment may

17 be made under this part for a medical nutrition therapy

18 service (as defined in section 1861(uu)) provided to an in19 dividual if such service is provided—

20 ‘‘(1) during the 12-month period beginning on

21 the date that such individual first received a medical

22 nutrition therapy service covered under this part and

23 such individual has previously received 3 medical nu24 tritional therapy services during such period; or
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1 ‘‘(2) at any time after such 12-month period if

2 such individual has previously received 3 medical nu3 tritional therapy services covered under this part

4 after such 12-month period.

5 (d) PAYMENT.—Section 1833(a)(1) (42 U.S.C.

6 1395l(a)(1)) is amended—

7 (1) by striking ‘‘and’’ before ‘‘(S)’’; and

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

9 the following: ‘‘, and (T) with respect to medical nu10 trition therapy services (as defined in section

11 1861(uu)(1)), the amount paid shall be 85 percent

12 of the lesser of the actual charge for the services

13 or the amount determined under the fee schedule es14 tablished under section 1848(b) for the same serv15 ices if furnished by a physician’’.

16 (e) CONFORMING AMENDMENTS.—Section

17 1862(a)(1) (42 U.S.C. 1395y(a)(1)) is amended—

18 (1) in subparagraph (H), by striking ‘‘and’’ at

19 the end;

20 (2) in subparagraph (I), by striking the semi21 colon at the end and inserting ‘‘, and’’; and

22 (3) by adding at the end the following new sub23 paragraph:

24 ‘‘(J) in the case of medical nutrition therapy

25 services (as defined in section 1861(uu)(1)), which
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1 are provided more frequently than is covered under

2 section 1834(m);’’.

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

4 this section apply to services furnished on or after July

5 1, 2001.

6 SEC. 114. STATE ACCREDITATION OF DIABETES SELF-MAN7 AGEMENT TRAINING PROGRAMS.

8 Section 1861(qq)(2) (42 U.S.C. 1395xx(qq)(2)) is

9 amended—

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

11 by striking ‘‘paragraph (1)—’’ and inserting ‘‘para12 graph (1):’’;

13 (2) in subparagraph (A)—

14 (A) by striking ‘‘a ‘certified provider’ ’’ and

15 inserting ‘‘A ‘certified provider’ ’’; and

16 (B) by striking ‘‘; and’’ and inserting a pe17 riod; and

18 (3) in subparagraph (B)—

19 (A) by striking ‘‘a physician, or such other

20 individual’’ and inserting ‘‘(i) A physician, or

21 such other individual’’;

22 (B) by inserting ‘‘(I)’’ before ‘‘meets appli23 cable standards’’;

24 (C) by inserting ‘‘(II)’’ before ‘‘is recog25 nized’’;
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1 (D) by inserting ‘‘, or by a program de2 scribed in clause (ii),’’ after ‘‘recognized by an

3 organization that represents individuals (includ4 ing individuals under this title) with diabetes’’;

5 and

6 (E) by adding at the end the following new

7 clause:

8 ‘‘(ii) Notwithstanding any reference to ‘a na9 tional accreditation body’ in section 1865(b), for

10 purposes of clause (i), a program described in this

11 clause is a program operated by a State for the pur12 poses of accrediting diabetes self-management train13 ing programs, if the Secretary determines that such

14 State program has established quality standards

15 that meet or exceed the standards established by the

16 Secretary under clause (i) or the standards origi17 nally established by the National Diabetes Advisory

18 Board and subsequently revised as described in

19 clause (i).’’.

20 SEC. 115. STUDIES ON PREVENTIVE INTERVENTIONS IN

21 PRIMARY CARE FOR OLDER AMERICANS.

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

23 Services, acting through the United States Preventive

24 Services Task Force, shall conduct a series of studies de25 signed to identify preventive interventions that can be de-
22

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1 livered in the primary care setting and that are most valu2 able to older Americans.

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

4 the United States Preventive Services Task Force is

5 amended to include the evaluation of services that are of

6 particular relevance to older Americans.

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

8 of enactment of this Act, and annually thereafter, the Sec9 retary of Health and Human Services shall submit a re10 port to Congress on the conclusions of the studies con11 ducted under subsection (a), together with recommenda12 tions for such legislation and administrative actions as the

13 Secretary considers appropriate.

14 SEC. 116. INSTITUTE OF MEDICINE 3-YEAR MEDICARE PRE15 VENTION BENEFIT STUDY AND REPORT.

16 (a) STUDY.—

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

18 Human Services shall contract with the Institute of

19 Medicine of the National Academy of Sciences—

20 (A) to conduct a comprehensive study of

21 current literature and best practices in the field

22 of health promotion and disease prevention

23 among medicare beneficiaries, including the

24 issues described in paragraph (2); and
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1 (B) to submit the report described in sub2 section (b).

3 (2) ISSUES STUDIED.—The study required

4 under paragraph (1) shall include an assessment

5 of—

6 (A) whether each covered benefit is—

7 (i) medically effective; and

8 (ii) a cost-effective benefit or a cost9 saving benefit;

10 (B) utilization of covered benefits (includ11 ing any barriers to or incentives to increase uti12 lization); and

13 (C) quality of life issues associated with

14 both health promotion and disease prevention

15 benefits covered under the medicare program

16 and those that are not covered under such pro17 gram that would affect all medicare bene18 ficiaries.

19 (b) REPORT.—

20 (1) IN GENERAL.—Not later than 3 years after

21 the date of enactment of this Act, and every third

22 year thereafter, the Institute of Medicine of the Na23 tional Academy of Sciences shall submit to the Sec24 retary of Health and Human Services and Congress

25 a report that contains a detailed statement of the
24

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1 findings and conclusions of the study conducted

2 under subsection (a) and the recommendations for

3 legislation described in paragraph (2).

4 (2) RECOMMENDATIONS FOR LEGISLATION.—

5 The Institute of Medicine of the National Academy

6 of Sciences, in consultation with the Partnership for

7 Prevention, shall develop recommendations in legis8 lative form that—

9 (A) prioritize the preventive benefits under

10 the medicare program; and

11 (B) modify preventive benefits offered

12 under the medicare program based on the study

13 conducted under subsection (a).

14 (3) REQUIREMENTS FOR INITIAL REPORT.—

15 The initial report submitted pursuant to paragraph

16 (1) shall address issues related to the following pre17 ventive benefits:

18 (A) Thyroid screening.

19 (B) Smoking cessation therapy services.

20 (C) Glaucoma detection tests.

21 (D) Appropriate preventive treatments for

22 precancerous skin lesions.

23 (c) DEFINITIONS.—In this section:
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1 (1) COST-EFFECTIVE BENEFIT.—The term

2 ‘‘cost-effective benefit’’ means a benefit or technique

3 that has—

4 (A) been subject to peer review;

5 (B) been described in scientific journals;

6 and

7 (C) demonstrated value as measured by

8 unit costs relative to health outcomes achieved.

9 (2) COST-SAVING BENEFIT.—The term ‘‘cost10 saving benefit’’ means a benefit or technique that

11 has—

12 (A) been subject to peer review;

13 (B) been described in scientific journals;

14 and

15 (C) caused a net reduction in health care

16 costs for medicare beneficiaries.

17 (3) MEDICALLY EFFECTIVE.—The term ‘‘medi18 cally effective’’ means, with respect to a benefit or

19 technique, that the benefit or technique has been—

20 (A) subject to peer review;

21 (B) described in scientific journals; and

22 (C) determined to achieve an intended goal

23 under normal programmatic conditions.

24 (4) MEDICARE BENEFICIARY.—The term

25 ‘‘medicare beneficiary’’ means any individual who is
26

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1 entitled to benefits under part A or enrolled under

2 part B of the medicare program under title XVIII

3 of the Social Security Act, including any individual

4 enrolled in a Medicare+Choice plan offered by a

5 Medicare+Choice organization under part C of such

6 program.

7 SEC. 117. MEDPAC STUDY AND REPORT ON MEDICARE COV8 ERAGE OF CARDIAC AND PULMONARY REHA9 BILITATION THERAPY SERVICES.

10 (a) STUDY.—

11 (1) IN GENERAL.—The Medicare Payment Ad12 visory Commission established under section 1805 of

13 the Social Security Act (42 U.S.C. 1395b–6) (in this

14 section referred to as ‘‘MedPAC’’) shall conduct a

15 study on coverage of cardiac and pulmonary rehabili16 tation therapy services under the medicare program

17 under title XVIII of the Social Security Act (42

18 U.S.C. 1395 et seq.).

19 (2) FOCUS.—In conducting the study under

20 paragraph (1), MedPAC shall focus on the

21 appropriate—

22 (A) qualifying diagnoses required for cov23 erage of cardiac and pulmonary rehabilitation

24 therapy services;
27

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1 (B) level of physician direct involvement

2 and supervision in furnishing such services; and

3 (C) level of reimbursement for such serv4 ices.

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

6 date of enactment of this Act, MedPAC shall submit a

7 report to the Secretary of Health and Human Services and

8 Congress on the study conducted under subsection (a) to9 gether with such recommendations for legislation and ad10 ministrative action as MedPAC determines appropriate.

11 TITLE II—RURAL HEALTH CARE

12 IMPROVEMENTS

13 Subtitle A—Critical Access

14 Hospital Provisions

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

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

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

21 following new paragraph:

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

23 CLINICAL DIAGNOSTIC LABORATORY SERVICES.—No

24 coinsurance, deductible, copayment, or other cost

25 sharing otherwise applicable under this part shall
28

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1 apply with respect to clinical diagnostic laboratory

2 services furnished as an outpatient critical access

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

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

8 (b) TECHNICAL AND CONFORMING AMENDMENTS.—

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

11 1395l(a)(2)(D)(i)) are each amended by striking ‘‘or

12 which are furnished on an outpatient basis by a crit13 ical access hospital’’.

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

15 1501A–371) is amended by striking ‘‘The amend16 ment made by subsection (a) shall apply’’ and in17 serting ‘‘Paragraphs (1) through (3) of section

18 1834(g) of the Social Security Act (as amended by

19 paragraph (1)) apply’’.

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

21 (1) by subsection (a) applies to services fur22 nished on or after the date of the enactment of

23 BBRA;
29

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1 (2) by subsection (b)(1) applies as if included

2 in the enactment of section 403(e)(1) of BBRA (113

3 Stat. 1501A–371); and

4 (3) by subsection (b)(2) applies as if included

5 in the enactment of section 403(d)(2) of BBRA

6 (113 Stat. 1501A–371).

7 SEC. 202. REVISION OF PAYMENT FOR PROFESSIONAL

8 SERVICES PROVIDED BY A CRITICAL ACCESS

9 HOSPITAL.

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

11 1395m(g)(2)(B)), as amended by section 403(d) of BBRA

12 (113 Stat. 1501A–371), is amended by inserting ‘‘120

13 percent of’’ after ‘‘hospital services,’’.

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

15 subsection (a) shall take effect as if included in the enact16 ment of section 403(d) of BBRA (113 Stat. 1501A–371).

17 SEC. 203. PERMITTING CRITICAL ACCESS HOSPITALS TO

18 OPERATE PPS EXEMPT DISTINCT PART PSY19 CHIATRIC AND REHABILITATION UNITS.

20 (a) CRITERIA FOR DESIGNATION AS A CRITICAL AC21 CESS HOSPITAL.—Section 1820(c)(2)(B)(iii) (42 U.S.C.

22 1395i–4(c)(2)(B)(iii)) is amended by inserting ‘‘excluding

23 any psychiatric or rehabilitation unit of the facility which

24 is a distinct part of the facility,’’ before ‘‘provides not’’.
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1 (b) DEFINITION OF PPS EXEMPT DISTINCT PART

2 PSYCHIATRIC AND REHABILITATION UNITS.—Section

3 1886(d)(1)(B) (42 U.S.C. 1395ww(d)(1)(B)) is amended

4 by inserting before the last sentence the following new sen5 tence: ‘‘In establishing such definition, the Secretary may

6 not exclude from such definition a psychiatric or rehabili7 tation unit of a critical access hospital which is a distinct

8 part of such hospital solely because such hospital is ex9 empt from the prospective payment system under this sec10 tion.’’.

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

12 this section shall take effect on the date of enactment of

13 this Act.

14 SEC. 204. EXEMPTION OF CRITICAL ACCESS HOSPITAL

15 SWING BEDS FROM SNF PPS.

16 (a) IN GENERAL.—Section 1888(e)(7) Act (42

17 U.S.C. 1395yy(e)(7)) is amended—

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

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

20 (2) in subparagraph (A), by striking ‘‘IN GEN21 ERAL.—The’’ and inserting ‘‘TRANSITION.—Subject

22 to subparagraph (C), the’’;

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

24 than critical access hospitals)’’ after ‘‘facilities de25 scribed in subparagraph (B)’’;
31

•S 3165 IS

1 (4) in subparagraph (B), by striking ‘‘, for

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

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

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

8 HOSPITALS.—The prospective payment system

9 established under this subsection shall not

10 apply to services furnished by a critical access

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

13 (b) PAYMENT ON A REASONABLE COST BASIS FOR

14 SWING BED SERVICES FURNISHED BY CRITICAL ACCESS

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

16 amended—

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

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

19 and

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

21 paragraph:

22 ‘‘(3) Notwithstanding any other provision of

23 this title, a critical access hospital shall be paid for

24 covered skilled nursing facility services furnished

25 under an agreement entered into under this section
32

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1 on the basis of the reasonable costs of such services

2 (as determined under section 1861(v)).’’.

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

4 this section shall apply to cost reporting periods beginning

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

6 Subtitle B—Other Rural Hospital

7 Provisions

8 SEC. 211. EQUITABLE TREATMENT FOR RURAL DISPROPOR9 TIONATE SHARE HOSPITALS.

10 (a) APPLICATION OF UNIFORM THRESHOLD.—Sec11 tion 1886(d)(5)(F)(v) (42 U.S.C. 1395ww(d)(5)(F)(v)) is

12 amended—

13 (1) in subclause (II), by inserting ‘‘(or 15 per14 cent, for discharges occurring on or after October 1,

15 2001)’’ after ‘‘30 percent’’;

16 (2) in subclause (III), by inserting ‘‘(or 15 per17 cent, for discharges occurring on or after October 1,

18 2001)’’ after ‘‘40 percent’’; and

19 (3) in subclause (IV), by inserting ‘‘(or 15 per20 cent, for discharges occurring on or after October 1,

21 2001)’’ after ‘‘45 percent’’.

22 (b) ADJUSTMENT OF PAYMENT FORMULAS.—

23 (1) SOLE COMMUNITY HOSPITALS.—Section

24 1886(d)(5)(F) (42 U.S.C. 1395ww(d)(5)(F)) is

25 amended—
33

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

2 ‘‘10 percent’’ the following: ‘‘or, for discharges

3 occurring on or after October 1, 2001, is equal

4 to the percent determined in accordance with

5 clause (x)’’; and

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

7 clause:

8 ‘‘(x) For purposes of clause (iv)(VI), in the case of

9 a hospital for a cost reporting period with a dispropor10 tionate patient percentage (as defined in clause (vi))

11 that—

12 ‘‘(I) is less than 17.3, the disproportionate

13 share adjustment percentage is determined in ac14 cordance with the following formula: (P–15)(.65) +

15 2.5;

16 ‘‘(II) is equal to or exceeds 17.3, but is less

17 than 30.0, such adjustment percentage is equal to 4

18 percent; or

19 ‘‘(III) is equal to or exceeds 30, such adjust20 ment percentage is equal to 10 percent,

21 where ‘P’ is the hospital’s disproportionate patient per22 centage (as defined in clause (vi)).’’.

23 (2) RURAL REFERRAL CENTERS.—Such section

24 is further amended—
34

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

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

3 occurring on or after October 1, 2001, is equal

4 to the percent determined in accordance with

5 clause (xi)’’; and

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

7 clause:

8 ‘‘(xi) For purposes of clause (iv)(V), in the case of

9 a hospital for a cost reporting period with a dispropor10 tionate patient percentage (as defined in clause (vi))

11 that—

12 ‘‘(I) is less than 17.3, the disproportionate

13 share adjustment percentage is determined in ac14 cordance with the following formula: (P–15)(.65) +

15 2.5;

16 ‘‘(II) is equal to or exceeds 17.3, but is less

17 than 30.0, such adjustment percentage is equal to 4

18 percent; or

19 ‘‘(III) is equal to or exceeds 30, such adjust20 ment percentage is determined in accordance with

21 the following formula: (P–30)(.6) + 4,

22 where ‘P’ is the hospital’s disproportionate patient per23 centage (as defined in clause (vi)).’’.

24 (3) SMALL RURAL HOSPITALS GENERALLY.—

25 Such section is further amended—
35

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

2 ‘‘4 percent’’ the following: ‘‘or, for discharges

3 occurring on or after October 1, 2001, is equal

4 to the percent determined in accordance with

5 clause (xii)’’; and

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

7 clause:

8 ‘‘(xii) For purposes of clause (iv)(III), in the case of

9 a hospital for a cost reporting period with a dispropor10 tionate patient percentage (as defined in clause (vi))

11 that—

12 ‘‘(I) is less than 17.3, the disproportionate

13 share adjustment percentage is determined in ac14 cordance with the following formula: (P–15)(.65) +

15 2.5;

16 ‘‘(II) is equal to or exceeds 17.3, such adjust17 ment percentage is equal to 4 percent,

18 where ‘P’ is the hospital’s disproportionate patient per19 centage (as defined in clause (vi)).’’.

20 (4) HOSPITALS THAT ARE BOTH SOLE COMMU21 NITY HOSPITALS AND RURAL REFERRAL CENTERS.—

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

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

24 for discharges occurring on or after October 1,
36

•S 3165 IS

1 2001, the greater of the percentages determined

2 under clause (x) or (xi)’’.

3 (5) URBAN HOSPITALS WITH LESS THAN 100

4 BEDS.—Such section is further amended—

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

6 percent’’ the following: ‘‘or, for discharges oc7 curring on or after October 1, 2001, is equal to

8 the percent determined in accordance with

9 clause (xiii)’’; and

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

11 clause:

12 ‘‘(xiii) For purposes of clause (iv)(II), in the case of

13 a hospital for a cost reporting period with a dispropor14 tionate patient percentage (as defined in clause (vi))

15 that—

16 ‘‘(I) is less than 17.3, the disproportionate

17 share adjustment percentage is determined in ac18 cordance with the following formula: (P–15)(.65) +

19 2.5;

20 ‘‘(II) is equal to or exceeds 17.3, but is less

21 than 40.0, such adjustment percentage is equal to 4

22 percent; or

23 ‘‘(III) is equal to or exceeds 40, such adjust24 ment percentage is equal to 5 percent,
37

•S 3165 IS

1 where ‘P’ is the hospital’s disproportionate patient per2 centage (as defined in clause (vi)).’’.

3 (c) TECHNICAL AMENDMENT.—Section

4 1886(d)(5)(F)(i) (42 U.S.C. 1395ww(d)(5)(F)(i)) is

5 amended by striking ‘‘and before October 1, 1997,’’.

6 SEC. 212. OPTION TO BASE ELIGIBILITY FOR MEDICARE DE7 PENDENT, SMALL RURAL HOSPITAL PRO8 GRAM ON DISCHARGES DURING ANY OF THE

9 3 MOST RECENT AUDITED COST REPORTING

10 PERIODS.

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

12 (42 U.S.C. 1395ww(d)(5)(G)(iv)(IV)) is amended by in13 serting ‘‘, or any of the 3 most recent audited cost report14 ing periods,’’ after ‘‘1987’’.

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

16 this section shall apply with respect to cost reporting peri17 ods beginning on or after the date of enactment of this

18 Act.

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

20 AMOUNTS TO ALL SOLE COMMUNITY HOS21 PITALS.

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

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

24 (1) in the matter preceding subclause (I)—
38

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1 (A) by striking ‘‘that for its cost reporting

2 period beginning during 1999 is paid on the

3 basis of the target amount applicable to the

4 hospital under subparagraph (C) and that

5 elects (in a form and manner determined by the

6 Secretary) this subparagraph to apply to the

7 hospital’’; and

8 (B) by striking ‘‘substituted for such tar9 get amount’’ and inserting ‘‘substituted, if such

10 substitution results in a greater payment under

11 this section for such hospital, for the amount

12 otherwise determined under subsection

13 (d)(5)(D)(i)’’;

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

15 otherwise applicable’’ and all that follows through

16 ‘‘target amount’)’’ and inserting ‘‘the amount other17 wise applicable to the hospital under subsection

18 (d)(5)(D)(i) (referred to in this clause as the ‘sub19 section (d)(5)(D)(i) amount’)’’; and

20 (3) in each of subclauses (II) and (III), by

21 striking ‘‘subparagraph (C) target amount’’ and in22 serting ‘‘subsection (d)(5)(D)(i) amount’’.

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

24 this section shall take effect as if included in the enact25 ment of section 405 of BBRA (113 Stat. 1501A–372).
39

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

2 PER UNIT COST OF RURAL HOSPITALS WITH

3 PSYCHIATRIC UNITS.

4 The Medicare Payment Advisory Commission, in its

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

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

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

8 volume on the per unit cost of rural hospitals with

9 psychiatric units; and

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

11 section a recommendation on whether special treat12 ment for such hospitals may be warranted.

13 Subtitle C—Other Rural Provisions

14 SEC. 221. PROVIDER-BASED RURAL HEALTH CLINIC CAP

15 EXEMPTION.

16 (a) IN GENERAL.—The matter in section 1833(f) (42

17 U.S.C. 1395l(f)) preceding paragraph (1) is amended by

18 striking ‘‘with less than 50 beds’’ and inserting ‘‘with an

19 average daily patient census that does not exceed 50’’.

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

21 subparagraph (A) shall apply to services furnished on or

22 after January 1, 2001.

23 SEC. 222. PAYMENT FOR CERTAIN PHYSICIAN ASSISTANT

24 SERVICES.

25 (a) PAYMENT FOR CERTAIN PHYSICIAN ASSISTANT

26 SERVICES.—Section 1842(b)(6)(C) (42 U.S.C.
40

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1 1395u(b)(6)(C)) is amended by striking ‘‘for such services

2 provided before January 1, 2003,’’.

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

4 subsection (a) shall take effect on the date of enactment

5 of this Act.

6 SEC. 223. TEMPORARY INCREASE FOR HOME HEALTH

7 SERVICES FURNISHED IN A RURAL AREA.

8 (a) INCREASE FOR 2001 AND 2002.—In the case of

9 a unit of home health service furnished in a rural area

10 (as defined in section 1886(d)(2)(D) of the Social Security

11 Act (42 U.S.C. 1395ww(d)(2)(D))) during 2001 or 2002,

12 the Secretary of Health and Human Services (in this sec13 tion referred to as the ‘‘Secretary’’) shall increase the pay14 ment amount otherwise made under section 1895 of such

15 Act (42 U.S.C. 1395fff) for such unit of service by 10

16 percent.

17 (b) ADDITIONAL PAYMENT NOT BUILT INTO THE

18 BASE.—The Secretary shall not include any additional

19 payment made under subsection (a) in updating the stand20 ard prospective payment amount (or amounts) applicable

21 to units of home health services furnished during a period,

22 as increased by the home health applicable increase per23 centage for the fiscal year involved under section

24 1895(b)(3)(B) of the Social Security Act (42 U.S.C.

25 1395fff(b)(3)(B)).
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1 (c) WAIVING BUDGET NEUTRALITY.—The Secretary

2 shall not reduce the standard prospective payment amount

3 (or amounts) under section 1895 of the Social Security

4 Act (42 U.S.C. 1395fff) applicable to units of home health

5 services furnished during a period to offset the increase

6 in payments resulting from the application of subsection

7 (a).

8 SEC. 224. REFINEMENT OF MEDICARE REIMBURSEMENT

9 FOR TELEHEALTH SERVICES.

10 (a) REVISION OF TELEHEALTH PAYMENT METHOD11 OLOGY AND ELIMINATION OF FEE-SHARING REQUIRE12 MENT.—Section 4206(b) of the Balanced Budget Act of

13 1997 (42 U.S.C. 1395l note) is amended to read as fol14 lows:

15 ‘‘(b) METHODOLOGY FOR DETERMINING AMOUNT OF

16 PAYMENTS.—

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

18 to—

19 ‘‘(A) the physician or practitioner at a dis20 tant site that provides an item or service under

21 subsection (a) an amount equal to the amount

22 that such physician or provider would have been

23 paid had the item or service been provided with24 out the use of a telecommunications system;

25 and
42

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1 ‘‘(B) the originating site a facility fee for

2 facility services furnished in connection with

3 such item or service.

4 ‘‘(2) APPLICATION OF PART B COINSURANCE

5 AND DEDUCTIBLE.—Any payment made under this

6 section shall be subject to the coinsurance and de7 ductible requirements under subsections (a)(1) and

8 (b) of section 1833 of the Social Security Act (42

9 U.S.C. 1395l).

10 ‘‘(3) DEFINITIONS.—In this subsection:

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

12 site’ means the site at which the physician or

13 practitioner is located at the time the item or

14 service is provided via a telecommunications

15 system.

16 ‘‘(B) FACILITY FEE.—The term ‘facility

17 fee’ means an amount equal to—

18 ‘‘(i) for 2000 and 2001, $20; and

19 ‘‘(ii) for a subsequent year, the facil20 ity fee under this subsection for the pre21 vious year increased by the percentage in22 crease in the MEI (as defined in section

23 1842(i)(3)) for such subsequent year.

24 ‘‘(C) ORIGINATING SITE.—
43

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1 ‘‘(i) IN GENERAL.—The term ‘origi2 nating site’ means the site described in

3 clause (ii) at which the eligible telehealth

4 beneficiary under the medicare program is

5 located at the time the item or service is

6 provided via a telecommunications system.

7 ‘‘(ii) SITES DESCRIBED.—The sites

8 described in this paragraph are as follows:

9 ‘‘(I) On or before January 1,

10 2002, the office of a physician or a

11 practitioner, a critical access hospital,

12 a rural health clinic, and a Federally

13 qualified health center.

14 ‘‘(II) On or before January 1,

15 2003, a hospital, a skilled nursing fa16 cility, a comprehensive outpatient re17 habilitation facility, a renal dialysis

18 facility, an ambulatory surgical center,

19 an Indian Health Service facility, and

20 a community mental health center.’’.

21 (b) ELIMINATION OF REQUIREMENT FOR TELEPRE22 SENTER.—Section 4206 of the Balanced Budget Act of

23 1997 (42 U.S.C. 1395l note) is amended—
44

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1 (1) in subsection (a), by striking ‘‘, notwith2 standing that the individual physician’’ and all that

3 follows before the period at the end; and

4 (2) by adding at the end the following new sub5 section:

6 ‘‘(e) TELEPRESENTER NOT REQUIRED.—Nothing in

7 this section shall be construed as requiring an eligible tele8 health beneficiary to be presented by a physician or practi9 tioner for the provision of an item or service via a tele10 communications system.’’.

11 (c) REIMBURSEMENT FOR MEDICARE BENE12 FICIARIES WHO DO NOT RESIDE IN A HPSA.—Section

13 4206(a) of the Balanced Budget Act of 1997 (42 U.S.C.

14 1395l note), as amended by subsection (b), is amended—

15 (1) by striking ‘‘IN GENERAL.—Not later than’’

16 and inserting the following: ‘‘TELEHEALTH SERV17 ICES REIMBURSED.—

18 ‘‘(1) IN GENERAL.—Not later than’’;

19 (2) by striking ‘‘furnishing a service for which

20 payment’’ and all that follows before the period and

21 inserting ‘‘to an eligible telehealth beneficiary’’; and

22 (3) by adding at the end the following new

23 paragraph:

24 ‘‘(2) ELIGIBLE TELEHEALTH BENEFICIARY DE25 FINED.—In this section, the term ‘eligible telehealth
45

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1 beneficiary’ means a beneficiary under the medicare

2 program under title XVIII of the Social Security Act

3 (42 U.S.C. 1395 et seq.) that resides in—

4 ‘‘(A) an area that is designated as a health

5 professional shortage area under section

6 332(a)(1)(A) of the Public Health Service Act

7 (42 U.S.C. 254e(a)(1)(A));

8 ‘‘(B) a county that is not included in a

9 Metropolitan Statistical Area; or

10 ‘‘(C) an inner-city area that is medically

11 underserved (as defined in section 330(b)(3) of

12 the Public Health Service Act (42 U.S.C.

13 254b(b)(3))).’’.

14 (d) TELEHEALTH COVERAGE FOR DIRECT PATIENT

15 CARE.—

16 (1) IN GENERAL.—Section 4206 of the Bal17 anced Budget Act of 1997 (42 U.S.C. 1395l note),

18 as amended by subsection (c), is amended—

19 (A) in subsection (a)(1), by striking ‘‘pro20 fessional consultation via telecommunications

21 systems with a physician’’ and inserting ‘‘items

22 and services for which payment may be made

23 under such part that are furnished via a tele24 communications system by a physician’’; and
46

•S 3165 IS

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

2 subsection:

3 ‘‘(f) COVERAGE OF ITEMS AND SERVICES.—Payment

4 for items and services provided pursuant to subsection (a)

5 shall include payment for professional consultations, office

6 visits, office psychiatry services, including any service

7 identified as of July 1, 2000, by HCPCS codes 99241–

8 99275, 99201–99215, 90804–90815, and 90862.’’.

9 (2) STUDY AND REPORT REGARDING ADDI10 TIONAL ITEMS AND SERVICES.—

11 (A) STUDY.—The Secretary of Health and

12 Human Services shall conduct a study to iden13 tify items and services in addition to those de14 scribed in section 4206(f) of the Balanced

15 Budget Act of 1997 (as added by paragraph

16 (1)) that would be appropriate to provide pay17 ment under title XVIII of the Social Security

18 Act (42 U.S.C. 1395 et seq.).

19 (B) REPORT.—Not later than 2 years after

20 the date of enactment of this Act, the Secretary

21 shall submit a report to Congress on the study

22 conducted under subparagraph (A) together

23 with such recommendations for legislation that

24 the Secretary determines are appropriate.
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1 (e) ALL PHYSICIANS AND PRACTITIONERS ELIGIBLE

2 FOR TELEHEALTH REIMBURSEMENT.—Section 4206(a)

3 of the Balanced Budget Act of 1997 (42 U.S.C. 1395l

4 note), as amended by subsection (d), is amended—

5 (1) in paragraph (1), by striking ‘‘(described in

6 section 1842(b)(18)(C) of such Act (42 U.S.C.

7 1395u(b)(18)(C))’’; and

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

9 paragraph:

10 ‘‘(3) PRACTITIONER DEFINED.—For purposes

11 of paragraph (1), the term ‘practitioner’ includes—

12 ‘‘(A) a practitioner described in section

13 1842(b)(18)(C) of the Social Security Act (42

14 U.S.C. 1395u(b)(18)(C)); and

15 ‘‘(B) a physical, occupational, or speech

16 therapist.’’.

17 (f) TELEHEALTH SERVICES PROVIDED USING

18 STORE-AND-FORWARD TECHNOLOGIES.—Section

19 4206(a)(1) of the Balanced Budget Act of 1997 (42

20 U.S.C. 1395l note), as amended by subsection (e), is

21 amended by adding at the end the following new para22 graph:

23 ‘‘(4) USE OF STORE-AND-FORWARD TECH24 NOLOGIES.—For purposes of paragraph (1), in the

25 case of any Federal telemedicine demonstration pro-
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1 gram in Alaska or Hawaii, the term ‘telecommuni2 cations system’ includes store-and-forward tech3 nologies that provide for the asynchronous trans4 mission of health care information in single or multi5 media formats.’’.

6 (g) CONSTRUCTION RELATING TO HOME HEALTH

7 SERVICES.—Section 4206(a) of the Balanced Budget Act

8 of 1997 (42 U.S.C. 1395l note), as amended by subsection

9 (f), is amended by adding at the end the following new

10 paragraph:

11 ‘‘(5) CONSTRUCTION RELATING TO HOME

12 HEALTH SERVICES.—

13 ‘‘(A) IN GENERAL.—Nothing in this sec14 tion or in section 1895 of the Social Security

15 Act (42 U.S.C. 1395fff) shall be construed as

16 preventing a home health agency that is receiv17 ing payment under the prospective payment

18 system described in such section from fur19 nishing a home health service via a tele20 communications system.

21 ‘‘(B) LIMITATION.—The Secretary shall

22 not consider a home health service provided in

23 the manner described in subparagraph (A) to

24 be a home health visit for purposes of—
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1 ‘‘(i) determining the amount of pay2 ment to be made under the prospective

3 payment system established under section

4 1895 of the Social Security Act (42 U.S.C.

5 1395fff); or

6 ‘‘(ii) any requirement relating to the

7 certification of a physician required under

8 section 1814(a)(2)(C) of such Act (42

9 U.S.C. 1395f(a)(2)(C)).’’.

10 (h) FIVE-YEAR APPLICATION.—The amendments

11 made by this section shall apply to items and services pro12 vided on or after April 1, 2001, and before April 1, 2006.

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

14 RURAL HEALTH CARE PROVIDERS.

15 (a) STUDY.—The Medicare Payment Advisory Com16 mission established under section 1805 of the Social Secu17 rity Act (42 U.S.C. 1395b–6) (in this section referred to

18 as ‘‘MedPAC’’) shall conduct a study on the effect of low

19 patient and procedure volume on the financial status of

20 low-volume, isolated rural health care providers partici21 pating in the medicare program under title XVIII of the

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

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

24 date of enactment of this Act, MedPAC shall submit a

25 report to the Secretary of Health and Human Services and
50

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1 Congress on the study conducted under subsection (a)

2 indicating—

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

4 care providers are having, or may have, significantly

5 decreased medicare margins or other financial dif6 ficulties resulting from any of the payment meth7 odologies described in subsection (c);

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

9 rural health care provider should be designated

10 under the medicare program and any criteria that

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

12 (3) any changes in the payment methodologies

13 described in subsection (c) that are necessary to pro14 vide appropriate reimbursement under the medicare

15 program to low-volume, isolated rural health care

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

17 (c) PAYMENT METHODOLOGIES DESCRIBED.—The

18 payment methodologies described in this subsection are

19 the following:

20 (1) The prospective payment system for hos21 pital outpatient department services under section

22 1833(t) of the Social Security Act (42 U.S.C.

23 1395l).
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1 (2) The fee schedule for ambulance services

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

3 1395m(l)).

4 (3) The prospective payment system for inpa5 tient hospital services under section 1886 of such

6 Act (42 U.S.C. 1395ww).

7 (4) The prospective payment system for routine

8 service costs of skilled nursing facilities under sec9 tion 1888(e) of such Act (42 U.S.C. 1395yy(e)).

10 (5) The prospective payment system for home

11 health services under section 1895 of such Act (42

12 U.S.C. 1395fff).

13 TITLE III—PROVISIONS

14 RELATING TO PART A

15 Subtitle A—PPS Hospitals

16 SEC. 301. DELAY OF REDUCTION IN PPS HOSPITAL PAY17 MENT UPDATE.

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

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

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

21 percentage points for hospitals (other than sole com22 munity hospitals) in all areas, and the market bas23 ket percentage increase for sole community hos24 pitals,’’ and inserting ‘‘for hospitals in all areas,’’;

25 (2) in subclause (XVII)—
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1 (A) by striking ‘‘minus 1.1 percentage

2 points’’; and

3 (B) by striking ‘‘and’’ at the end;

4 (3) by redesignating subclause (XVIII) as sub5 clause (XIX);

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

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

8 2004’’; and

9 (5) by inserting after subclause (XVII) the fol10 lowing new subclause:

11 ‘‘(XVIII) for fiscal year 2003, the market bas12 ket percentage increase minus 1 percentage point for

13 hospitals in all areas, and’’.

14 (b) SPECIAL RULE FOR PAYMENT FOR INPATIENT

15 HOSPITAL SERVICES FOR FISCAL YEAR 2001.—Notwith16 standing the amendments made by subsection (a), for pur17 poses of making payments for fiscal year 2001 for inpa18 tient hospital services furnished by subsection (d) hos19 pitals (as defined in section 1886(d)(1)(B) of the Social

20 Security Act (42 U.S.C. 1395ww(d)(1)(B))), the ‘‘applica21 ble percentage increase’’ referred to in section

22 1886(b)(3)(B)(i) of such Act (42 U.S.C.

23 1395ww(b)(3)(B)(i))—

24 (1) for discharges occurring on or after October

25 1, 2000, and before April 1, 2001, shall be deter-
53

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1 mined in accordance with subclause (XVI) of such

2 section as in effect on the day before the date of en3 actment of this Act; and

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

5 2001, and before October 1, 2001, shall be equal

6 to—

7 (A) the market basket percentage increase

8 plus 1.1 percentage points for hospitals (other

9 than sole community hospitals) in all areas; and

10 (B) the market basket percentage increase

11 for sole community hospitals.

12 SEC. 302. REVISION OF REDUCTION OF INDIRECT GRAD13 UATE MEDICAL EDUCATION PAYMENTS.

14 (a) REVISION.—Section 1886(d)(5)(B)(ii) (42 U.S.C.

15 1395ww(d)(5)(B)(ii)) is amended—

16 (1) in subclause (V)—

17 (A) by striking ‘‘fiscal year 2001’’ and in18 serting ‘‘each of fiscal years 2001 and 2002’’;

19 and

20 (B) by striking ‘‘equal to 1.54’’ and insert21 ing ‘‘equal to 1.6’’; and

22 (2) in subclause (VI), by striking ‘‘2001’’ and

23 inserting ‘‘2002’’.

24 (b) SPECIAL RULE FOR PAYMENT FOR FISCAL YEAR

25 2001.—Notwithstanding paragraph (5)(B)(ii)(V) of sec-
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1 tion 1886(d) of the Social Security Act (42 U.S.C.

2 1395ww(d)(5)(B)(ii)(V)) (as amended by subsection (a)),

3 for purposes of making payments for fiscal year 2001 for

4 subsection (d) hospitals (as defined in paragraph (1)(B)

5 of such section) with indirect costs of medical education,

6 the indirect teaching adjustment factor referred to in

7 paragraph (5)(B)(ii) of such section shall be determined—

8 (1) for discharges occurring on or after October

9 1, 2000, and before April 1, 2001, in accordance

10 with paragraph (5)(B)(ii)(V) of such section as in

11 effect on the day before the date of enactment of

12 this Act; and

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

14 2001, and before October 1, 2001, as if ‘‘c’’ in such

15 paragraph equalled 1.66.

16 (c) CONFORMING AMENDMENT RELATING TO DE17 TERMINATION OF STANDARDIZED AMOUNT.—Section

18 1886(d)(2)(C)(i) (42 U.S.C. 1395ww(d)(2)(C)(i)) is

19 amended—

20 (1) by striking ‘‘1997’’ and inserting ‘‘1997,’’;

21 and

22 (2) by inserting ‘‘, or any additional payments

23 under such paragraph resulting from the application

24 of section 302 of the Medicare, Medicaid, and
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1 SCHIP Balanced Budget Refinement Act of 2000’’

2 after ‘‘Balanced Budget Refinement Act of 1999’’.

3 (d) CLERICAL AMENDMENTS.—Section

4 1886(d)(5)(B) (42 U.S.C. 1395ww(d)(5)(B)), as amended

5 by subsection (a), is amended by moving the indentation

6 of each of the following 2 ems to the left:

7 (1) Clauses (ii), (v), and (vi).

8 (2) Subclauses (I) through (VI) of clause (ii).

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

10 the flush sentence at the end of such clause.

11 SEC. 303. DECREASE IN REDUCTIONS FOR DISPROPOR12 TIONATE SHARE HOSPITAL PAYMENTS.

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

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

15 (1) in subclause (III), by striking ‘‘each of fis16 cal years 2000 and 2001’’ and inserting ‘‘fiscal year

17 2000’’;

18 (2) by redesignating subclauses (IV) and (V) as

19 subclauses (V) and (IV), respectively;

20 (3) in subclause (V), as redesignated, by strik21 ing ‘‘4 percent’’ and inserting ‘‘3 percent’’; and

22 (4) by inserting after subclause (III) the fol23 lowing new subclause:

24 ‘‘(IV) during fiscal year 2001, such additional

25 payment amount shall be reduced by 2 percent;’’.
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1 (b) SPECIAL RULE FOR DSH PAYMENT.—Notwith2 standing the amendments made by subsection (a), for pur3 poses of making disproportionate share payments for sub4 section (d) hospitals (as defined in section 1886(d)(1)(B)

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

6 for fiscal year 2001, the additional payment amount other7 wise determined under clause (ii) of section 1886(d)(5)(F)

8 of the Social Security Act (42 U.S.C. 1395ww(d)(5)(F))—

9 (1) for discharges occurring on or after October

10 1, 2000, and before April 1, 2001, shall be adjusted

11 as provided by clause (ix)(III) of such section as in

12 effect on the day before the date of enactment of

13 this Act; and

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

15 2001, and before October 1, 2001, shall, instead of

16 being adjusted as provided by clause (ix)(IV) of such

17 section as in effect after the date of enactment of

18 this Act, shall be decreased by 1 percent.

19 (c) CONFORMING AMENDMENTS RELATING TO DE20 TERMINATION OF STANDARDIZED AMOUNT.—Section

21 1886(d)(2)(C)(iv) (42 U.S.C. 1395ww(d)(2)(C)(iv)), is

22 amended—

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

24 ‘‘1989,’’; and
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1 (2) by inserting ‘‘, or the enactment of section

2 303 of the Medicare, Medicaid, and SCHIP Bal3 anced Budget Further Refinement Act of 2000’’

4 after ‘‘Omnibus Budget Reconciliation Act of 1990’’.

5 SEC. 304. MODIFICATION OF PAYMENT RATE FOR PUERTO

6 RICO HOSPITALS.

7 (a) MODIFICATION OF PAYMENT RATE.—Section

8 1886(d)(9)(A) (42 U.S.C. 1395ww(d)(9)(A)) is

9 amended—

10 (1) in clause (i), by striking ‘‘October 1, 1997,

11 50 percent (’’ and inserting ‘‘October 1, 2000, 25

12 percent (for discharges between October 1, 1997,

13 and September 30, 2000, 50 percent,’’; and

14 (2) in clause (ii), in the matter preceding sub15 clause (I), by striking ‘‘after October 1, 1997, 50

16 percent (’’ and inserting ‘‘after October 1, 2000, 75

17 percent (for discharges between October 1, 1997,

18 and September 30, 2000, 50 percent,’’.

19 (b) SPECIAL RULE FOR PAYMENT FOR FISCAL YEAR

20 2001.—

21 (1) IN GENERAL.—Notwithstanding the amend22 ment made by subsection (a), for purposes of mak23 ing payments for the operating costs of inpatient

24 hospital services of a section 1886(d) Puerto Rico

25 hospital for fiscal year 2001, the amount referred to
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1 in the matter preceding clause (i) of section

2 1886(d)(9)(A) of the Social Security Act (42 U.S.C.

3 1395ww(d)(9)(A))—

4 (A) for discharges occurring on or after

5 October 1, 2000, and before April 1, 2001,

6 shall be determined in accordance with such

7 section as in effect on the day before the date

8 of enactment of this Act; and

9 (B) for discharges occurring on or after

10 April 1, 2001, and before October 1, 2001,

11 shall be determined—

12 (i) using 0 percent of the Puerto Rico

13 adjusted DRG prospective payment rate

14 referred to in clause (i) of such section;

15 and

16 (ii) using 100 percent of the dis17 charge-weighted average referred to in

18 clause (ii) of such section.

19 (2) SECTION 1886(d) PUERTO RICO HOSPITAL.—

20 For purposes of this subsection, the term ‘‘section

21 1886(d) Puerto Rico hospital’’ has the meaning

22 given the term ‘‘subsection (d) Puerto Rico hospital’’

23 in the last sentence of section 1886(d)(9)(A) of the

24 Social Security Act (42 U.S.C. 1395ww(d)(9)(A)).
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1 SEC. 305. MEDPAC STUDY AND REPORT ON HOSPITAL AREA

2 WAGE INDEXES.

3 (a) STUDY.—

4 (1) IN GENERAL.—The Medicare Payment Ad5 visory Commission established under section 1805 of

6 the Social Security Act (42 U.S.C. 1395b–6) (in this

7 section referred to as ‘‘MedPAC’’) shall conduct a

8 study on the hospital area wage indexes used in

9 making payments to hospitals under section 1886(d)

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

11 including an assessment of the accuracy of those in12 dexes in reflecting geographic differences in wage

13 and wage-related costs of hospitals.

14 (2) CONSIDERATIONS.—In conducting the study

15 under paragraph (1), MedPAC shall consider—

16 (A) the appropriate method for deter17 mining hospital area wage indexes;

18 (B) the appropriate portion of hospital

19 payments that should be adjusted by the appli20 cable area wage index;

21 (C) the appropriate method for adjusting

22 the wage index by occupational mix; and

23 (D) the feasibility and impact of making

24 changes (as determined appropriate by

25 MedPAC) to the methods used to determine
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1 such indexes, including the need for a data sys2 tem required to implement such changes.

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

4 date of enactment of this Act, MedPAC shall submit a

5 report to the Secretary of Health and Human Services and

6 Congress on the study conducted under subsection (a) to7 gether with such recommendations for legislation and ad8 ministrative action as MedPAC determines appropriate.

9 SEC. 306. MEDPAC STUDY AND REPORT REGARDING CER10 TAIN HOSPITAL COSTS.

11 (a) STUDY.—

12 (1) IN GENERAL.—The Medicare Payment Ad13 visory Commission established under section 1805 of

14 the Social Security Act (42 U.S.C. 1395b–6) (in this

15 section referred to as ‘‘MedPAC’’) shall conduct a

16 study on—

17 (A) any increased costs incurred by sub18 section (d) hospitals (as defined in paragraph

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

20 Act (42 U.S.C. 1395ww(d))) in providing inpa21 tient hospital services to medicare beneficiaries

22 under title XVIII of such Act during the period

23 beginning on October 1, 1983, and ending on

24 September 30, 1999, that were attributable

25 to—
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1 (i) complying with new blood safety

2 measure requirements; and

3 (ii) providing such services using new

4 technologies;

5 (B) the extent to which the prospective

6 payment system for such services under such

7 section provides adequate and timely recogni8 tion of such increased costs;

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

10 practicable, the magnitude of) cost increases

11 that hospitals will incur in providing such serv12 ices that are attributable to complying with new

13 blood safety measure requirements and pro14 viding such services using new technologies dur15 ing the 10 years after the date of enactment of

16 this Act; and

17 (D) the feasibility and advisability of es18 tablishing mechanisms under such payment sys19 tem to provide for more timely and accurate

20 recognition of such cost increases in the future.

21 (2) CONSULTATION.—In conducting the study

22 under this section, MedPAC shall consult with rep23 resentatives of the blood community, including

24 (A) hospitals;
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1 (B) organizations involved in the collection,

2 processing, and delivery of blood; and

3 (C) organizations involved in the develop4 ment of new blood safety technologies.

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

6 of enactment of this Act, MedPAC shall submit a report

7 to the Secretary of Health and Human Services and Con8 gress on the study conducted under subsection (a) to9 gether with such recommendations for legislation and ad10 ministrative action as MedPAC determines appropriate.

11 Subtitle B—PPS Exempt Hospitals

12 SEC. 311. PERMANENT GUARANTEE OF PRE-BBA PAYMENT

13 LEVELS FOR OUTPATIENT SERVICES FUR14 NISHED BY CHILDREN’S HOSPITALS.

15 (a) IN GENERAL.—Section 1833(t) (42 U.S.C.

16 1395l(t)) is amended—

17 (1) in the heading of paragraph (7)(D)(ii), by

18 inserting ‘‘AND CHILDREN’S HOSPITALS’’ after ‘‘CAN19 CER HOSPITALS’’; and

20 (2) in paragraphs (7)(D)(ii) and (11), by strik21 ing ‘‘section 1886(d)(1)(B)(v)’’ and inserting

22 ‘‘clause (iii) or (v) of section 1886(d)(1)(B)’’.

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

24 subsection (a) apply as if included in the enactment of

25 section 202 of BBRA.
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1 SEC. 312. PAYMENT FOR INPATIENT SERVICES OF REHA2 BILITATION HOSPITALS.

3 (a) ASSISTANCE WITH ADMINISTRATIVE COSTS AS4 SOCIATED WITH COMPLETION OF PATIENT ASSESS5 MENT.—Section 1886(j)(3)(B) (42 U.S.C.

6 1395ww(j)(3)(B)) is amended by striking ‘‘98 percent’’

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

8 percent for fiscal year 2002’’.

9 (b) ELECTION TO APPLY FULL PROSPECTIVE PAY10 MENT RATE WITHOUT PHASE-IN.—

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

12 1886(j) (42 U.S.C. 1395ww(j)) is amended—

13 (A) in subparagraph (A), by inserting

14 ‘‘other than a facility making an election under

15 subparagraph (F)’’ before ‘‘, in a cost reporting

16 period’’;

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

18 in the case of a facility making an election

19 under subparagraph (F), for any cost reporting

20 period described in such subparagraph,’’ after

21 ‘‘2002,’’; and

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

23 subparagraph:

24 ‘‘(F) ELECTION TO APPLY FULL PROSPEC25 TIVE PAYMENT SYSTEM.—A rehabilitation facil26 ity may elect, at least 30 days before the first
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1 date on which the payment methodology under

2 this subsection applies, to have payment made

3 to the facility under this subsection under the

4 provisions of subparagraph (B) (rather than

5 subparagraph (A)) for each cost reporting pe6 riod to which such payment methodology ap7 plies.’’.

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

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

10 account any payment adjustment resulting from an

11 election permitted under paragraph (1)(F)’’ after

12 ‘‘paragraphs (4) and (6)’’.

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

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

15 BBA.

16 SEC. 313. IMPLEMENTATION OF PROSPECTIVE PAYMENT

17 SYSTEM FOR LONG-TERM CARE HOSPITALS.

18 (a) MODIFICATION OF REQUIREMENT.—In devel19 oping the prospective payment system required under sec20 tion 123 of BBRA (113 Stat. 1501A–331), the Secretary

21 of Health and Human Services shall examine the feasi22 bility and the impact of basing payment under such sys23 tem on the use of existing (or refined) hospital diagnosis24 related groups (DRGs) and the use of the most recently

25 available hospital discharge data.
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1 (b) DEFAULT IMPLEMENTATION OF SYSTEM BASED

2 ON EXISTING DRG METHODOLOGY.—If the Secretary is

3 unable to implement the prospective payment system de4 scribed in subsection (a) by October 1, 2002, the Secretary

5 shall implement a prospective payment system for long6 term care hospitals that bases payment under such a sys7 tem using existing hospital diagnosis-related groups

8 (DRGs), consistent with subsection (a), for such services

9 furnished on or after that date.

10 Subtitle C—Skilled Nursing

11 Facilities

12 SEC. 321. REVISION TO THE SKILLED NURSING FACILITY

13 (SNF) MARKET BASKET UPDATE FOR FISCAL

14 YEARS 2001 AND 2002.

15 (a) REVISION.—Section 1888(e)(4)(E)(ii)(II) of the

16 Social Security Act (42 U.S.C. 1395yy(e)(4)(E)(ii)(II)) is

17 amended by striking ‘‘minus 1 percentage point’’ and in18 serting ‘‘plus 1 percentage point’’.

19 (b) SPECIAL RULE FOR PAYMENT FOR SKILLED

20 NURSING FACILITY SERVICES FOR FISCAL YEAR 2001.—

21 Notwithstanding the amendment made by subsection (a),

22 for purposes of making payments for covered skilled nurs23 ing facility services under section 1888(e) of the Social

24 Security Act (42 U.S.C. 1395yy(e)) for fiscal year 2001,
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1 the Federal per diem rate referred to in paragraph

2 (4)(E)(ii) of such section—

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

4 2000, and ending on March 31, 2001, shall be the

5 rate determined in accordance with subclause (II) of

6 such paragraph as in effect on the day before the

7 date of enactment of this Act; and

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

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

10 computed for fiscal year 2000 pursuant to subclause

11 (I) of such paragraph increased by the skilled nurs12 ing facility market basket percentage change for fis13 cal year 2001 plus 3 percentage points.

14 SEC. 322. APPLICATION OF SNF CONSOLIDATED BILLING

15 REQUIREMENT LIMITED TO PART A COV16 ERED STAYS.

17 (a) IN GENERAL.—Section 1862(a)(18) (42 U.S.C.

18 1395y(a)(18)) is amended by inserting after ‘‘(as deter19 mined under regulations)’’ the following: ‘‘during a period

20 in which the resident is provided covered post-hospital ex21 tended care services’’.

22 (b) CONFORMING AMENDMENTS.—(1) Section

23 1842(b)(6)(E) (42 U.S.C. 1395u(b)(6)(E)) is amended by

24 striking ‘‘in the case of an item or service (other than serv25 ices described in section 1888(e)(2)(A)(ii))’’ and inserting
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1 ‘‘in the case of services described in section

2 1861(s)(2)(D)’’.

3 (2) Section 1866(a)(1)(H)(ii)(I) (42 U.S.C.

4 1395cc(a)(1)(H)(ii)(I)) is amended by inserting after

5 ‘‘who is a resident of the skilled nursing facility’’ the fol6 lowing: ‘‘during a period in which the resident is provided

7 covered post-hospital extended care services (or, for serv8 ices described in section 1861(s)(2)(D), that are furnished

9 to such an individual without regard to such period)’’.

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

11 subsection (a) applies to services furnished on or after

12 January 1, 2001.

13 (d) OVERSIGHT.—The Secretary of Health and

14 Human Services, through the Office of the Inspector Gen15 eral in the Department of Health and Human Services

16 or otherwise, shall monitor payments made under part B

17 of the title XVIII of the Social Security Act for items and

18 services furnished to residents of skilled nursing facilities

19 during a time in which the residents are not being pro20 vided medicare covered post-hospital extended care serv21 ices to ensure that there is not duplicate billing for serv22 ices or excessive services provided.
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1 SEC. 323. REEXAMINATION OF, AND AUTHORITY TO REVISE,

2 THE SKILLED NURSING FACILITY MARKET

3 BASKET PERCENTAGE INCREASE.

4 (a) REEXAMINATION.—

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

6 Human Services shall reexamine the skilled nursing

7 facility market basket percentage (as defined in

8 paragraph (5)(B) of section 1888(e) of the Social

9 Security Act (42 U.S.C. 1395yy(e)) that was used in

10 making the update to the first fiscal year under

11 paragraph (4)(B) of such section under the prospec12 tive payment system for skilled nursing facility serv13 ices.

14 (2) SPECIFIC ELEMENTS.—In conducting the

15 reexamination under paragraph (1), the Secretary of

16 Health and Human Services shall account for costs

17 based on actual data and actual medicare skilled

18 nursing facility cost increases.

19 (b) AUTHORITY.—Notwithstanding any other provi20 sion of law, the Secretary of Health and Human Services

21 shall make adjustments to payments under the prospective

22 payment system under section 1888(e) of the Social Secu23 rity Act (42 U.S.C. 1395yy(e)) for covered skilled nursing

24 facility services furnished in fiscal year 2002 to reflect any

25 necessary adjustments to such payments as is appropriate
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1 as a result of the reexamination conducted under sub2 section (a).

3 (c) PUBLICATION.—

4 (1) IN GENERAL.—Not later than April 1,

5 2001, the Secretary of Health and Human Services

6 shall publish for public comment a description of—

7 (A) whether the Secretary will make any

8 adjustments pursuant to this section; and

9 (B) if so, the form of such adjustments.

10 (2) FINAL FORM.—Not later than August 1,

11 2001, the Secretary of Health and Human Services

12 shall publish the description described in paragraph

13 (1) in final form.

14 Subtitle D—Hospice Care

15 SEC. 331. REVISION OF MARKET BASKET INCREASE FOR

16 2001 AND 2002.

17 (a) IN GENERAL.—Section 1814(i)(1)(C)(ii) (42

18 U.S.C. 1395f(i)(1)(C)(ii)) is amended—

19 (1) by redesignating subclause (VII) as sub20 clause (VIII);

21 (2) in subclause (VI)—

22 (A) by striking ‘‘through 2002’’ and insert23 ing ‘‘through 2000’’; and

24 (B) by striking ‘‘and’’ at the end; and
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1 (3) by inserting after subclause (VI) the fol2 lowing new subclause:

3 ‘‘(VII) for each of fiscal years 2001 and 2002,

4 the market basket percentage increase for the fiscal

5 year plus 1.0 percentage point; and’’.

6 (b) REPEAL OF BBRA TEMPORARY INCREASE.—

7 (1) IN GENERAL.—Section 131 of BBRA (113

8 Stat. 1501A–333) is repealed.

9 (2) EFFECTIVE DATE.—The amendments made

10 by paragraph (1) shall take effect as if included in

11 the enactment of BBRA.

12 (c) TRANSITION DURING FISCAL YEAR 2001.—Not13 withstanding the amendments made by subsection (a), for

14 purposes of making payments for hospice care under sec15 tion 1814(i) of the Social Security Act (42 U.S.C.

16 1395f(i)) for fiscal year 2001, the payment rates referred

17 to in paragraph (1)(C) of such section—

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

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

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

22 Act; and

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

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

25 that would have been determined under paragraph
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•S 3165 IS

1 (1) if ‘‘plus 3.0 percentage points’’ were substituted

2 for ‘‘minus 1.0 percentage points under paragraph

3 (1)(C)(ii)(VI) of such section for fiscal year 2001.

4 (d) TECHNICAL AMENDMENT.—Section

5 1814(a)(7)(A)(ii) (42 U.S.C. 1395f(a)(7)(A)(ii)) is

6 amended by striking the period at the end and inserting

7 a semicolon.

8 SEC. 332. STUDY AND REPORT ON PHYSICIAN CERTIFI9 CATION REQUIREMENT FOR HOSPICE BENE10 FITS.

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

12 Human Services shall conduct a study to examine the ap13 propriateness of the certification regarding terminal ill14 ness of an individual under section 1814(a)(7) of the So15 cial Security Act (42 U.S.C. 1395f(a)(7)) that is required

16 in order for such individual to receive hospice benefits

17 under the medicare program under title XVIII of such Act

18 (42 U.S.C. 1395 et seq.).

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

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

21 Human Services shall submit a report to Congress on the

22 study conducted under subsection (a), together with any

23 recommendations for legislation that the Secretary deems

24 appropriate.
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1 SEC. 333. HOSPICE DEMONSTRATION PROGRAM AND HOS2 PICE EDUCATION GRANTS.

3 (a) DEFINITIONS.—In this section:

4 (1) DEMONSTRATION PROGRAM.—The term

5 ‘‘demonstration program’’ means the Hospice Dem6 onstration Program established by the Secretary

7 under subsection (b)(1).

8 (2) HOSPICE CARE; HOSPICE PROGRAM.—Ex9 cept as otherwise provided, the terms ‘‘hospice care’’

10 and ‘‘hospice program’’ have the meanings given

11 such terms in paragraphs (1) and (2) of section

12 1861(dd) of the Social Security Act (42 U.S.C.

13 1395x(dd)).

14 (3) MEDICARE BENEFICIARY.—The term

15 ‘‘medicare beneficiary’’ means any individual who is

16 entitled to benefits under part A or enrolled under

17 part B of the medicare program, including any indi18 vidual enrolled in a Medicare+Choice plan offered

19 by a Medicare+Choice organization under part C of

20 such program.

21 (4) MEDICARE PROGRAM.—The term ‘‘medicare

22 program’’ means the health benefits program under

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

24 1395 et seq.).

25 (5) SECRETARY.—The term ‘‘Secretary’’ means

26 the Secretary of Health and Human Services, acting
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•S 3165 IS

1 through the Administrator of the Health Care Fi2 nancing Administration.

3 (6) SERIOUSLY ILL.—The term ‘‘seriously ill’’

4 has the meaning given such term by the Secretary

5 (in consultation with hospice programs and academic

6 experts in end-of-life care), except that the Secretary

7 may not limit such term to individuals that are ter8 minally ill (as defined in section 1861(dd)(3) of the

9 Social Security Act (42 U.S.C. 1395x(dd)(3))).

10 (b) HOSPICE DEMONSTRATION PROGRAM.—

11 (1) ESTABLISHMENT.—Not later than 2 years

12 after the date of enactment of this Act, the Sec13 retary shall establish a Hospice Demonstration Pro14 gram in accordance with the provisions of this sub15 section to increase the utility of hospice care for se16 riously ill medicare beneficiaries.

17 (2) PARTICIPATION.—

18 (A) HOSPICE PROGRAMS.—Except as pro19 vided in paragraph (4)(A), only a hospice pro20 gram with an agreement under section 1866 of

21 the Social Security Act (42 U.S.C. 1395cc), a

22 consortium of such hospice programs, or a

23 State hospice association may participate in the

24 demonstration program.
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1 (B) MEDICARE BENEFICIARIES.—The Sec2 retary shall permit any seriously ill medicare

3 beneficiary residing in the service area of a hos4 pice program participating in the demonstration

5 program to participate in the demonstration

6 program on a voluntary basis.

7 (3) HOSPICE CARE UNDER DEMONSTRATION

8 PROGRAM.—The provisions of section 1814(i) of the

9 Social Security Act (42 U.S.C. 1395f(i)) shall apply

10 to the payment for hospice care provided under the

11 demonstration program, except that—

12 (A) notwithstanding section 1862(a)(1)(C)

13 of such Act (42 U.S.C. 1395y(a)(1)(C)), the

14 Secretary shall provide for reimbursement for

15 hospice care provided under the supportive and

16 comfort care benefit established under para17 graph (4);

18 (B) any licensed nurse practitioner or phy19 sician assistant may admit a seriously ill medi20 care beneficiary as the primary care provider

21 when necessary and within the scope of practice

22 of such practitioner or assistant under State

23 law;

24 (C) if a community does not have a quali25 fied social worker, any professional (other than
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1 a social worker) who has the necessary knowl2 edge, skills, and ability to provide medical social

3 services may provide such services;

4 (D) the Secretary shall waive any require5 ment that nursing facilities used for respite

6 care have skilled nurses on the premises 24

7 hours per day;

8 (E) the Secretary shall permit respite care

9 to be provided to a seriously ill medicare bene10 ficiary at home; and

11 (F) the Secretary shall waive reimburse12 ment regulations to provide—

13 (i) reimbursement for consultations

14 and preadmission informational visits, even

15 if the seriously ill medicare beneficiary

16 does not elect hospice care (including the

17 supportive and comfort care benefit under

18 paragraph (4)) at that time;

19 (ii) except with respect to the sup20 portive and comfort care benefit under

21 paragraph (4), a minimum payment for

22 hospice care provided under the dem23 onstration program based on the provision

24 of hospice care to a seriously ill medicare

25 beneficiary for a period of 14 days that—
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1 (I) the Secretary shall pay to any

2 hospice program participating in the

3 demonstration program and providing

4 hospice care (regardless of the length

5 of stay of the seriously ill medicare

6 beneficiary); and

7 (II) may not be less than the

8 amount of payment that would have

9 been made for hospice care if payment

10 had been made at the daily rate of

11 payment for such care under section

12 1814(i) of the Social Security Act (42

13 U.S.C. 1395f(i));

14 (iii) an increase in the reimbursement

15 rates for hospice care to offset—

16 (I) changes in hospice care and

17 oversight under the demonstration

18 program; and

19 (II) the higher costs of providing

20 hospice care in rural areas due to lack

21 of economies of scale or large geo22 graphic areas;

23 (iv) direct payment of any nurse prac24 titioner or physician assistant practicing

25 within the scope of State law in relation to
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•S 3165 IS

1 hospice care provided by such practitioner

2 or assistant; and

3 (v) a per diem rate of payment for in4 home care under subparagraph (E) that

5 reflects the range of care needs of the seri6 ously ill medicare beneficiary and that—

7 (I) in the case of a seriously ill

8 medicare beneficiary that needs rou9 tine care, is not less than 150 percent,

10 and not more than 200 percent, of the

11 routine home care rate for hospice

12 care; and

13 (II) in the case of a seriously ill

14 medicare beneficiary that needs acute

15 care, is equal to the continuous home

16 care day rate for hospice care.

17 (4) SUPPORTIVE AND COMFORT CARE BEN18 EFIT.—

19 (A) IN GENERAL.—For purposes of the

20 demonstration program, the Secretary shall es21 tablish a supportive and comfort care benefit

22 for any seriously ill medicare beneficiary elect23 ing hospice care.

24 (B) PARTICIPATION.—Any individual or

25 entity with an agreement under section 1866 of
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•S 3165 IS

1 the Social Security Act (42 U.S.C. 1395cc) may

2 furnish items or services covered under the sup3 portive and comfort care benefit.

4 (C) BENEFIT.—Under the supportive and

5 comfort care benefit, any seriously ill medicare

6 beneficiary may—

7 (i) continue to receive benefits for dis8 ease and symptom modifying treatment

9 under the medicare program (and the Sec10 retary may not require or prohibit any spe11 cific treatment or decision);

12 (ii) receive case management and hos13 pice care through a hospice program par14 ticipating in the demonstration program

15 (for which payment shall be made under

16 paragraph (3)(F)(ii)); and

17 (iii) receive information and experi18 ence in order to better understand the util19 ity of hospice care.

20 (D) PAYMENT.—The Secretary shall estab21 lish procedures under which the Secretary pays

22 for items and services furnished to seriously ill

23 medicare beneficiaries under the supportive and

24 comfort care benefit on a fee-for-service basis.

25 (5) CONDUCT OF DEMONSTRATION PROGRAM.—
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1 (A) SITES.—The demonstration program

2 shall be conducted in 3 sites, only 1 of which

3 may be multistate.

4 (B) SELECTION OF SITES.—

5 (i) IN GENERAL.—Except as provided

6 in clause (ii), the Secretary shall select

7 demonstration sites, on the basis of pro8 posals submitted under subparagraph (C),

9 that are located in geographic areas that—

10 (I) include both urban and rural

11 hospice programs; and

12 (II) are geographically diverse

13 and readily accessible to a significant

14 number of medicare beneficiaries.

15 (ii) EXCEPTIONS.—

16 (I) UNDERSERVED URBAN

17 AREAS.—If a geographic area does

18 not have any rural hospice program

19 available to participate in the dem20 onstration program, such area may

21 substitute an underserved urban area,

22 but the Secretary shall give priority to

23 those proposals that include a rural

24 hospice program.
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1 (II) SPECIFIC SITE.—The Sec2 retary shall select 1 demonstration

3 site in the State in which, according

4 to the Hospital Referral Region of

5 Residence, 1994–1995, as listed in the

6 Dartmouth Atlas of Health Care

7 1998, the largest metropolitan area of

8 such State had the lowest percentage

9 of medicare beneficiary deaths in a

10 hospital compared to the largest met11 ropolitan area of each other State and

12 the percentage of enrollees who expe13 rienced intensive care during the last

14 6 months of life was 21.5 percent.

15 (C) PROPOSALS.—

16 (i) IN GENERAL.—Under the dem17 onstration program, the Secretary shall ac18 cept proposals by any State hospice asso19 ciation, hospice program, or consortium of

20 hospice programs at such time, in such

21 manner, and in such form as the Secretary

22 may reasonably require.

23 (ii) RESEARCH DESIGNS.—The Sec24 retary shall permit research designs that

25 use time series, sequential implementation
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1 of the intervention, randomization by wait

2 list, or any other design that allows the

3 strongest possible implementation of the

4 demonstration program.

5 (D) FACILITATION OF EVALUATION.—The

6 Secretary shall design the demonstration pro7 gram to facilitate the evaluation conducted

8 under paragraph (7).

9 (6) DURATION.—The Secretary shall conduct

10 the demonstration program for a period of 3 years.

11 (7) EVALUATION.—During the 18-month period

12 following the completion of the demonstration pro13 gram, the Secretary shall conduct an evaluation of

14 the demonstration program in order to determine—

15 (A) the short-term and long-term costs and

16 benefits of changing hospice care provided

17 under the medicare program to include the

18 items, services, and reimbursement options pro19 vided under the demonstration program;

20 (B) whether any increase in payments for

21 hospice care provided under the medicare pro22 gram is offset by savings in other parts of the

23 medicare program;

24 (C) the projected cost of implementing the

25 demonstration program on a national basis; and
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1 (D) in consultation with hospice organiza2 tions and hospice programs (including organiza3 tions and programs that represent rural areas),

4 whether a payment system based on diagnosis5 related groups is useful for administering the

6 hospice care provided under the medicare pro7 gram.

8 (8) REPORTS TO CONGRESS.—

9 (A) INTERIM REPORT.—Not later than 2

10 years after the implementation of the dem11 onstration program, the Secretary, in consulta12 tion with participants in the program, shall sub13 mit to the to the Committee on Ways and

14 Means of the House of Representatives and to

15 the Committee on Finance of the Senate an in16 terim report on the demonstration program.

17 (B) FINAL REPORT.—Not later than 2

18 years after the date on which the demonstration

19 program ends, the Secretary shall submit to the

20 committees described in subparagraph (A) a

21 final report on the demonstration program that

22 includes the results of the evaluation conducted

23 under paragraph (7) and recommendations for

24 appropriate legislative changes.
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1 (9) WAIVER OF MEDICARE REQUIREMENTS.—

2 The Secretary shall waive compliance with such re3 quirements of the medicare program to the extent

4 and for the period the Secretary finds necessary for

5 the conduct of the demonstration program.

6 (10) SPECIAL RULES FOR PAYMENT OF

7 MEDICARE+CHOICE ORGANIZATIONS.—The Sec8 retary shall establish procedures under which the

9 Secretary provides for an appropriate adjustment in

10 the monthly payments made under section 1853 of

11 the Social Security Act (42 U.S.C. 1395w–23) to

12 any Medicare+Choice organization offering a

13 Medicare+Choice plan to reflect the participation of

14 each medicare beneficiary enrolled in such plan in

15 the demonstration program.

16 (c) HOSPICE EDUCATION GRANT PROGRAM.—

17 (1) ESTABLISHMENT.—The Secretary shall es18 tablish a Hospice Education Grant Program under

19 which the Secretary awards education grants to hos20 pice programs participating in the demonstration

21 program for the purpose of providing information

22 about—

23 (A) hospice care under the medicare pro24 gram; and
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1 (B) the benefits available to medicare

2 beneficiaries under the demonstration program.

3 (2) USE OF FUNDS.—Grants awarded under

4 paragraph (1) shall be used—

5 (A) to provide—

6 (i) individual or group education to

7 medicare beneficiaries and the families of

8 such beneficiaries; and

9 (ii) individual or group education of

10 the medical and mental health community

11 caring for medicare beneficiaries; and

12 (B) to test strategies to improve the gen13 eral public knowledge about hospice care under

14 the medicare program and the benefits available

15 to seriously ill medicare beneficiaries under the

16 demonstration program.

17 (d) FUNDING.—

18 (1) HOSPICE DEMONSTRATION PROGRAM.—

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

20 subparagraph (B), expenditures made for the

21 demonstration program shall be in lieu of the

22 funds that would have been provided to partici23 pating hospices under section 1814(i) of the So24 cial Security Act (42 U.S.C. 1395f(i)).
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1 (B) SUPPORTIVE AND COMFORT CARE

2 BENEFIT.—The Secretary shall pay any ex3 penses for the supportive and comfort care ben4 efit established under subsection (a)(4) from

5 the Federal Hospital Insurance Trust Fund es6 tablished under section 1817 of the Social Secu7 rity Act (42 U.S.C. 1395i) and the Federal

8 Supplementary Medical Insurance Trust Fund

9 established under section 1841 of such Act (42

10 U.S.C. 1395t), in such proportion as the Sec11 retary determines is appropriate.

12 (2) HOSPICE EDUCATION GRANTS.—The Sec13 retary is authorized to expend such sums as may be

14 necessary for the purposes of carrying out the Hos15 pice Education Grant program established under

16 subsection (c)(1) from the Research and Demonstra17 tion Budget of the Health Care Financing Adminis18 tration.

19 Subtitle E—Other Provisions

20 SEC. 341. SIX-MONTH DELAY IN IMPLEMENTATION OF RULE

21 REGARDING PROVIDER-BASED CRITERIA.

22 The Secretary of Health and Human Services may

23 not implement the provider-based criteria contained in the

24 final rule that was published in the Federal Register by
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1 the Health Care Financing Administration on April 7,

2 2000 (65 Fed. Reg. 18434) until after July 9, 2001.

3 TITLE IV—PROVISIONS

4 RELATING TO PART B

5 Subtitle A—Hospital Outpatient

6 Services

7 SEC. 401. APPLICATION OF TRANSITIONAL CORRIDOR TO

8 CERTAIN HOSPITALS THAT DID NOT SUBMIT

9 A 1996 COST REPORT.

10 (a) IN GENERAL.—Section 1833(t)(7)(F)(ii)(I) (42

11 U.S.C. 1395l(t)(7)(F)(ii)(I)) is amended by inserting ‘‘(or,

12 in the case of a hospital that did not submit a cost report

13 for such period, during the first cost reporting period end14 ing in a year after 1996 and before 2001 for which the

15 hospital submitted a cost report)’’ after ‘‘1996’’.

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

17 subsection (a) shall take effect as if included in the enact18 ment of section 202 of BBRA.

19 SEC. 402. CLARIFYING PROCESS AND STANDARDS FOR DE20 TERMINING ELIGIBILITY OF DEVICES FOR

21 PASS-THROUGH PAYMENTS UNDER HOSPITAL

22 OUTPATIENT PPS.

23 (a) IN GENERAL.—Section 1833(t)(6) (42 U.S.C.

24 1395l(t)(6)) is amended—
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1 (1) by redesignating subparagraphs (C) and

2 (D) as subparagraphs (D) and (E), respectively; and

3 (2) by striking subparagraph (B) and inserting

4 the following new subparagraphs:

5 ‘‘(B) USE OF CATEGORIES IN DETER6 MINING ELIGIBILITY OF A DEVICE FOR PASS7 THROUGH PAYMENTS.—The following provi8 sions apply for purposes of determining whether

9 a medical device qualifies for additional pay10 ments under clause (ii) or (iv) of subparagraph

11 (A):

12 ‘‘(i) ESTABLISHMENT OF INITIAL CAT13 EGORIES.—The Secretary shall initially es14 tablish under this clause categories of med15 ical devices based on type of device by

16 April 1, 2001. Such categories shall be es17 tablished in a manner such that each med18 ical device that meets the requirements of

19 clause (ii) or (iv) of subparagraph (A) as

20 of such date is included in such a category

21 and no such device is included in more

22 than one category. For purposes of the

23 preceding sentence, whether a medical de24 vice meets such requirements as of such

25 date shall be determined on the basis of
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•S 3165 IS

1 the program memoranda issued before

2 such date or if the Secretary determines

3 the medical device would have been in4 cluded in the program memoranda but for

5 the requirement of subparagraph

6 (A)(iv)(I). The categories may be estab7 lished under this clause by program memo8 randum or otherwise, after consultation

9 with groups representing hospitals, manu10 facturers of medical devices, and other af11 fected parties.

12 ‘‘(ii) ESTABLISHING CRITERIA FOR

13 ADDITIONAL CATEGORIES.—

14 ‘‘(I) IN GENERAL.—The Sec15 retary shall establish criteria that will

16 be used for creation of additional cat17 egories (other than those established

18 under clause (i)) through rulemaking

19 (which may include use of an interim

20 final rule with comment period).

21 ‘‘(II) STANDARD.—Such cat22 egories shall be established under this

23 clause in a manner such that no med24 ical device is described by more than

25 one category. Such criteria shall in-
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•S 3165 IS

1 clude a test of whether the average

2 cost of devices that would be included

3 in a category and are in use at the

4 time the category is established is not

5 insignificant, as described in subpara6 graph (A)(iv)(II).

7 ‘‘(III) DEADLINE.—Criteria shall

8 first be established under this clause

9 by July 1, 2001. The Secretary may

10 establish in compelling circumstances

11 categories under this clause before the

12 date such criteria are established.

13 ‘‘(IV) ADDING CATEGORIES.—

14 The Secretary shall promptly establish

15 a new category of medical device

16 under this clause for any medical de17 vice that meets the requirements of

18 subparagraph (A)(iv) and for which

19 none of the categories in effect (or

20 that were previously in effect) is ap21 propriate.

22 ‘‘(iii) PERIOD FOR WHICH CATEGORY

23 IS IN EFFECT.—A category of medical de24 vices established under clause (i) or clause

25 (ii) shall be in effect for a period of at
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1 least 2 years, but not more than 3 years,

2 that begins—

3 ‘‘(I) in the case of a category es4 tablished under clause (i), on the first

5 date on which payment was made

6 under this paragraph for any device

7 described by such category (including

8 payments made during the period be9 fore April 1, 2001); and

10 ‘‘(II) in the case of any other

11 category, on the first date on which

12 payment is made under this para13 graph for any medical device that is

14 described by such category.

15 ‘‘(iv) REQUIREMENTS TREATED AS

16 MET.—A medical device shall be treated as

17 meeting the requirements of subparagraph

18 (A)(iv) if—

19 ‘‘(I) the device is described by a

20 category established and in effect

21 under clause (i); or

22 ‘‘(II) the device is described by a

23 category established and in effect

24 under clause (ii) and an application

25 under section 515 of the Federal
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•S 3165 IS

1 Food, Drug, and Cosmetic Act has

2 been approved with respect to the de3 vice, or the device has been cleared for

4 market under section 510(k) of such

5 Act, or the device is exempt from the

6 requirements of section 510(k) of

7 such Act pursuant to subsection (l) or

8 (m) of section 510 of such Act or sec9 tion 520(g) of such Act.

10 Nothing in this clause shall be construed

11 as requiring an application or prior ap12 proval (other than that described in sub13 clause (II)) in order for a device to qualify

14 for payment under this paragraph.

15 ‘‘(C) LIMITED PERIOD OF PAYMENT.—

16 ‘‘(i) DRUGS AND BIOLOGICALS.—The

17 payment under this paragraph with respect

18 to a drug or biological shall only apply dur19 ing a period of at least 2 years, but not

20 more than 3 years, that begins—

21 ‘‘(I) on the first date this sub22 section is implemented in the case of

23 a drug or biological described in

24 clause (i), (ii), or (iii) of subparagraph

25 (A) and in the case of a drug or bio-
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1 logical described in subparagraph

2 (A)(iv) and for which payment under

3 this part is made as an outpatient

4 hospital service before such first date;

5 or

6 ‘‘(II) in the case of a drug or bio7 logical described in subparagraph

8 (A)(iv) not described in subclause (I),

9 on the first date on which payment is

10 made under this part for the drug or

11 biological as an outpatient hospital

12 service.

13 ‘‘(ii) MEDICAL DEVICES.—Payment

14 shall be made under this paragraph with

15 respect to a medical device only if such

16 device—

17 ‘‘(I) is described by a category of

18 medical devices established and in ef19 fect under subparagraph (B); and

20 ‘‘(II) is provided as part of a

21 service (or group of services) paid for

22 under this subsection and provided

23 during the period for which such cat24 egory is in effect under such subpara25 graph.’’.
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1 (b) CONFORMING AMENDMENTS.—Section 1833(t)

2 (42 U.S.C. 1395l(t)) amended—

3 (1) in paragraph (6)(A)(iv)(II), by striking ‘‘the

4 cost of the device, drug, or biological’’ and inserting

5 ‘‘the cost of the drug or biological or the average

6 cost of the category of devices’’;

7 (2) in paragraph (6)(D) (as redesignated by

8 subsection (a)(1)), by striking ‘‘subparagraph

9 (D)(iii)’’ in the matter preceding clause (i) and in10 serting ‘‘subparagraph (E)(iii)’’; and

11 (3) in paragraph (12)(E), by striking ‘‘addi12 tional payments (consistent with paragraph (6)(B))’’

13 and inserting ‘‘additional payments, the determina14 tion and deletion of initial and new categories (con15 sistent with subparagraphs (B) and (C) of para16 graph (6))’’.

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

18 this section take effect on the date of the enactment of

19 this Act.

20 (d) TRANSITION.—In the case of a medical device

21 provided as part of a service (or group of services) fur22 nished during the period beginning on the date that is 30

23 days after the date of the enactment of this Act and end24 ing on the day before the initial categories are imple25 mented under subparagraph (B)(i) of section 1833(t)(6)
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1 of the Social Security Act (as amended by subsection (a)),

2 payment shall be made for such device under such section

3 in accordance with the provisions in effect before the date

4 of the enactment of this Act, except that (notwithstanding

5 subparagraph (C)(ii) of such section, as so amended) pay6 ment shall also be made for such a device that is not in7 cluded in a program memorandum described in such sub8 paragraph if the Secretary determines that the device is

9 likely to be described by such an initial category.

10 SEC. 403. CONTRAST ENHANCED DIAGNOSTIC PROCE11 DURES UNDER HOSPITAL PROSPECTIVE PAY12 MENT SYSTEM.

13 (a) SEPARATE CLASSIFICATION.—Section 1833(t)(2)

14 (42 U.S.C. 1395l(t)(2)) is amended—

15 (1) by striking ‘‘and’’ at the end of subpara16 graph (E);

17 (2) by striking the period at the end of sub18 paragraph (F) and inserting ‘‘; and’’; and

19 (3) by inserting after subparagraph (F) the fol20 lowing new subparagraph:

21 ‘‘(G) the Secretary shall create additional

22 groups of covered OPD services that classify

23 separately those procedures that utilize contrast

24 media from those that do not.’’.
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1 (b) EFFECTIVE DATE.—The amendments made by

2 this section shall be effective as if included in the enact3 ment of BBA.

4 SEC. 404. TRANSITIONAL PASS-THROUGH FOR CONTRAST

5 AGENTS.

6 (a) IN GENERAL.—Section 1833(t)(6) (42 U.S.C.

7 1395l(t)(6)), as amended by section 402, is amended—

8 (1) in subparagraph (A)(iv)—

9 (A) in the heading, by striking ‘‘AND

10 BIOLOGICALS’’ and inserting ‘‘BIOLOGICALS,

11 AND CONTRAST AGENTS’’;

12 (B) in the matter preceding subclause (I),

13 by striking ‘‘or biological’’ and inserting ‘‘bio14 logical, or contrast agent’’;

15 (C) in subclause (I), by striking ‘‘or bio16 logical’’ and inserting ‘‘biological, or contrast

17 agent’’; and

18 (D) in subclause (II), by striking ‘‘or bio19 logical’’ and inserting ‘‘, biological, or contrast

20 agent’’;

21 (2) in subparagraph (C)—

22 (A) in the heading, by striking ‘‘AND

23 BIOLOGICALS’’ and inserting ‘‘BIOLOGICALS,

24 AND CONTRAST AGENTS’’; and
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1 (B) by striking ‘‘or biological’’ the first,

2 third, fourth, and fifth place it appears and in3 serting ‘‘, biological, or contrast agent’’; and

4 (3) in subparagraph (D)—

5 (A) in the matter preceding clause (i), by

6 striking ‘‘or biological’’ and inserting ‘‘biologi7 cal, or contrast agent’’; and

8 (B) in clause (i), by striking ‘‘or biologi9 cal’’ each place it appears and inserting ‘‘, bio10 logical, or contrast agent’’.

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

12 subsection (a) shall take effect on January 1, 2001.

13 Subtitle B—Provisions Relating to

14 Physicians

15 SEC. 411. MEDPAC STUDY ON THE RESOURCE-BASED PRAC16 TICE EXPENSE SYSTEM.

17 (a) STUDY.—The Medicare Payment Advisory Com18 mission established under section 1805 of the Social Secu19 rity Act (42 U.S.C. 1395b–6) (in this section referred to

20 as ‘‘MedPAC’’) shall conduct a study on the refinements

21 to the practice expense relative value units during the

22 transition to a resource-based practice expense system for

23 physician payments under the medicare program under

24 title XVIII of the Social Security Act (42 U.S.C. 1395
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1 et seq.) (in this section referred to as the ‘‘medicare pro2 gram’’).

3 (b) REPORT.—Not later than July 1, 2001, MedPAC

4 shall submit a report to the Secretary of Health and

5 Human Services and Congress on the study conducted

6 under subsection (a) together with recommendations

7 regarding—

8 (1) any change or adjustment that is appro9 priate to ensure full access to a spectrum of care for

10 beneficiaries under the medicare program; and

11 (2) the appropriateness of payments to physi12 cians.

13 SEC. 412. GAO STUDIES AND REPORTS ON MEDICARE PAY14 MENTS.

15 (a) GAO STUDY ON HCFA POST-PAYMENT AUDIT

16 PROCESS.—

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

18 United States shall conduct a study on the post-pay19 ment audit process under the medicare program

20 under title XVIII of the Social Security Act (42

21 U.S.C. 1395 et seq.) (in this section referred to as

22 the ‘‘medicare program’’) as such process applies to

23 physicians, including the proper level of resources

24 that the Health Care Financing Administration

25 should devote to educating physicians regarding—
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1 (A) coding and billing;

2 (B) documentation requirements; and

3 (C) the calculation of overpayments.

4 (2) REPORT.—Not later than 18 months after

5 the date of enactment of this Act, the Comptroller

6 General shall submit a report to the Secretary of

7 Health and Human Services and Congress on the

8 study conducted under paragraph (1) together with

9 specific recommendations for changes or improve10 ments in the post-payment audit process described

11 in such paragraph.

12 (b) GAO STUDY ON ADMINISTRATION AND OVER13 SIGHT.—

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

15 United States shall conduct a study on the aggre16 gate effects of regulatory, audit, oversight, and pa17 perwork burdens on physicians and other health care

18 providers participating in the medicare program.

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

20 the date of enactment of this Act, the Comptroller

21 General shall submit a report to the Secretary of

22 Health and Human Services and Congress on the

23 study conducted under paragraph (1) together with

24 recommendations regarding any area in which—
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1 (A) a reduction in paperwork, an ease of

2 administration, or an appropriate change in

3 oversight and review may be accomplished; or

4 (B) additional payments or education are

5 needed to assist physicians and other health

6 care providers in understanding and complying

7 with any legal or regulatory requirements.

8 SEC. 413. GAO STUDY ON GASTROINTESTINAL ENDOSCOPIC

9 SERVICES FURNISHED IN PHYSICIANS’ OF10 FICES AND HOSPITAL OUTPATIENT DEPART11 MENT SERVICES.

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

13 States shall conduct a study on the appropriateness of fur14 nishing gastrointestinal endoscopic physicians’ services in

15 physicians’ offices. In conducting this study, the Comp16 troller General shall—

17 (1) review available scientific and clinical evi18 dence regarding the safety of performing procedures

19 in physicians’ offices and hospital outpatient depart20 ments;

21 (2) assess whether resource-based practice ex22 pense relative values established by the Secretary of

23 Health and Human Services under the medicare

24 physician fee schedule under section 1848 of the So25 cial Security Act (42 U.S.C. 1395w–4) for gastro-
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1 intestinal endoscopic services furnished in physi2 cians’ offices and hospital outpatient departments

3 create an incentive to furnish such services in physi4 cians’ offices instead of hospital outpatient depart5 ments; and

6 (3) assess the implications for access to care for

7 medicare beneficiaries if gastrointestinal endoscopic

8 services in physicians’ offices were not covered under

9 the medicare program.

10 (b) REPORT.—Not later than July 1, 2002, the

11 Comptroller General of the United States shall submit a

12 report to the Secretary of Health and Human Services and

13 Congress on the study conducted under subsection (a) to14 gether with such recommendations for legislation and ad15 ministrative action as the Comptroller General determines

16 appropriate.

17 Subtitle C—Ambulance Services

18 SEC. 421. ELIMINATION OF REDUCTION IN INFLATION AD19 JUSTMENTS FOR AMBULANCE SERVICES.

20 Subparagraphs (A) and (B) of section 1834(l)(3) (42

21 U.S.C. 1395m(l)(3)(A)) are each amended by striking ‘‘re22 duced in the case of 2001 and 2002 by 1.0 percentage

23 points’’ and inserting ‘‘increased in the case of 2001 by

24 1.0 percentage point’’.
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1 SEC. 422. ELECTION TO FOREGO PHASE-IN OF FEE SCHED2 ULE FOR AMBULANCE SERVICES.

3 Section 1834(l) (42 U.S.C. 1395m(l)) is amended by

4 adding at the end the following new paragraph:

5 ‘‘(8) ELECTION TO FOREGO PHASE-IN OF FEE

6 SCHEDULE.—

7 ‘‘(A) IN GENERAL.—If the Secretary pro8 vides for a phase-in of the fee schedule estab9 lished under this subsection, a supplier of am10 bulance services may make an election to re11 ceive payments at any time during such phase12 in based only on such fee schedule as in effect

13 after such phase-in, and the Secretary shall

14 begin to make payments to the supplier based

15 only on such fee schedule not later than the

16 date that is 60 days after the date on which the

17 supplier notifies the Secretary of such election.

18 ‘‘(B) WAIVER OF BUDGET NEUTRALITY.—

19 The Secretary shall apply paragraph (3)(A) as

20 if this paragraph had not been enacted.’’.

21 SEC. 423. STUDY AND REPORT ON THE COSTS OF RURAL

22 AMBULANCE SERVICES.

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

24 Services (in this section referred to as the ‘‘Secretary’’),

25 in consultation with the Office of Rural Health Policy,

26 shall conduct a study on the means by which rural areas
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1 with low population densities can be identified for the pur2 pose of designating areas in which the cost of providing

3 ambulance services would be expected to be higher than

4 similar services provided in more heavily populated areas

5 because of low usage. Such study shall also include an

6 analysis of the additional costs of providing ambulance

7 services in areas designated under the previous sentence.

8 (b) REPORT.—Not later than June 30, 2001, the

9 Secretary shall submit a report to Congress on the study

10 conducted under subsection (a), together with a regulation

11 based on that study which adjusts the fee schedule pay12 ment rates for ambulance services provided in low density

13 rural areas based on the increased cost of providing such

14 services in such areas.

15 SEC. 424. GAO STUDY AND REPORT ON THE COSTS OF

16 EMERGENCY AND MEDICAL TRANSPOR17 TATION SERVICES.

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

19 States shall conduct a study on the costs of providing

20 emergency and medical transportation services across the

21 range of acuity levels of conditions for which such trans22 portation services are provided.

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

24 date of enactment of this Act, the Comptroller General

25 shall submit a report to the Secretary of Health and
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1 Human Services and Congress on the study conducted

2 under subsection (a), together with recommendations for

3 any changes in methodology or payment level necessary

4 to fairly compensate suppliers of emergency and medical

5 transportation services and to ensure the access of bene6 ficiaries under the medicare program under title XVIII of

7 the Social Security Act (42 U.S.C. 1395 et seq.) to such

8 services.

9 Subtitle D—Other Services

10 SEC. 431. REVISION OF MORATORIUM IN CAPS FOR THER11 APY SERVICES.

12 (a) EXTENSION OF MORATORIUM.—Section

13 1833(g)(4) (42 U.S.C. 1395l(g)(4)) is amended by strik14 ing ‘‘during 2000 and 2001’’ and inserting ‘‘during the

15 period beginning on January 1, 2000, and ending on the

16 date that is 18 months after the date on which the Sec17 retary submits the report required under section

18 4541(d)(2) of the Balanced Budget Act of 1997 to Con19 gress’’.

20 (b) EXTENSION OF REPORTING DATE.—Section

21 4541(d)(2) of BBA (42 U.S.C. 1395l note), as amended

22 by section 221(c) of BBRA (113 Stat. 1501A–351), is

23 amended by striking ‘‘January 1, 2001’’ and inserting

24 ‘‘January 1, 2002’’ in the matter preceding subparagraph

25 (A).
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1 SEC. 432. UPDATE IN RENAL DIALYSIS COMPOSITE RATE.

2 The last sentence of section 1881(b)(7) (42 U.S.C.

3 1395rr(b)(7)) is amended by striking ‘‘for such services

4 furnished on or after January 1, 2001, by 1.2 percent’’

5 and inserting ‘‘for such services furnished on or after Jan6 uary 1, 2001, by 2.4 percent’’.

7 SEC. 433. FULL UPDATE IN 2001 FOR DURABLE MEDICAL

8 EQUIPMENT, OXYGEN, AND OXYGEN EQUIP9 MENT.

10 (a) UPDATE FOR COVERED ITEMS.—Section

11 1834(a)(14) (42 U.S.C. 1395m(a)(14)) is amended—

12 (1) by redesignating subparagraph (D) as sub13 paragraph (F);

14 (2) in subparagraph (C)—

15 (A) by striking ‘‘through 2002’’ and insert16 ing ‘‘through 2000’’; and

17 (B) by striking ‘‘ and’’ at the end; and

18 (3) by inserting after subparagraph (C) the fol19 lowing new subparagraphs:

20 ‘‘(D) for 2001, the percentage increase in

21 the consumer price index for all urban con22 sumers (U.S. urban average) for the 12-month

23 period ending with June 2000;

24 ‘‘(E) for 2002, 0 percentage points; and’’.

25 (b) ORTHOTICS AND PROSTHETICS.—Section

26 1834(h)(4)(A) (42 U.S.C. 1395m(h)(4)(A)) is amended—
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1 (1) by redesignating clause (vi) as clause (viii);

2 (2) in clause (v)—

3 (A) by striking ‘‘through 2002’’ and insert4 ing ‘‘through 2000’’; and

5 (B) by striking ‘‘ and’’ at the end; and

6 (3) by inserting after clause (v) the following

7 new clauses:

8 ‘‘(vi) for 2001, the percentage in9 crease in the consumer price index for all

10 urban consumers (United States City aver11 age) for the 12-month period ending with

12 June 2000;

13 ‘‘(vi) for 2002, 1 percent; and’’.

14 (c) PARENTERAL AND ENTERAL NUTRIENTS, SUP15 PLIES, AND EQUIPMENT.—Section 4551(b) of BBA (42

16 U.S.C. 1395m note) is amended by striking ‘‘through

17 2002’’ and inserting ‘‘, 1999, 2000, and 2002’’.

18 (d) OXYGEN AND OXYGEN EQUIPMENT.—Section

19 1834(a)(9)(B) (42 U.S.C. 1395m(a)(9)(B)) is amended—

20 (1) in clause (v), by striking ‘‘and’’ at the end;

21 (2) in clause (vi)—

22 (A) by striking ‘‘each subsequent year’’

23 and inserting ‘‘2000’’; and

24 (B) by striking the period at the end and

25 inserting a semicolon; and
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1 (3) by adding at the end the following new

2 clauses:

3 ‘‘(vii) for 2001, the amount deter4 mined under this subparagraph for 2000

5 increased by the covered item update for

6 2001;

7 ‘‘(viii) for 2002, 70 percent of the

8 amount determined under this subpara9 graph for 1997; and

10 ‘‘(ix) for 2003 and each subsequent

11 year, the amount determined under this

12 subparagraph for the preceding year in13 creased by the covered item update for

14 such subsequent year.’’.

15 (e) CONFORMING AMENDMENT.—Section 228 of

16 BBRA (113 Stat. 1501A–356) is repealed.

17 SEC. 434. NATIONAL LIMITATION AMOUNT EQUAL TO 100

18 PERCENT OF NATIONAL MEDIAN FOR NEW

19 PAP SMEAR TECHNOLOGIES AND OTHER NEW

20 CLINICAL LABORATORY TEST TECH21 NOLOGIES.

22 Section 1833(h)(4)(B)(viii) (42 U.S.C.

23 1395l(h)(4)(B)(viii)) is amended by inserting before the

24 period at the end the following: ‘‘(or 100 percent of such

25 median in the case of a clinical diagnostic laboratory test
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1 performed on or after January 1, 2001, that the Secretary

2 determines is a new test for which no limitation amount

3 has previously been established under this subpara4 graph)’’.

5 SEC. 435. DELAY AND REVISION OF PPS FOR AMBULATORY

6 SURGICAL CENTERS.

7 (a) DELAY IN IMPLEMENTATION OF PROSPECTIVE

8 PAYMENT SYSTEM.—The Secretary of Health and Human

9 Services may not implement a revised prospective payment

10 system for services of ambulatory surgical facilities under

11 section 1833(i) of the Social Security Act (42 U.S.C.

12 1395l(i)) before January 1, 2002.

13 (b) EXTENDING PHASE-IN TO 4 YEARS.—Section

14 226 of the BBRA (113 Stat. 1501A–354) is amended by

15 striking paragraphs (1) and (2) and inserting the fol16 lowing:

17 ‘‘(1) in the first year of its implementation,

18 only a proportion (specified by the Secretary and not

to exceed 1 19 ⁄4) of the payment for such services shall

20 be made in accordance with such system and the re21 mainder shall be made in accordance with current

22 regulations; and

23 ‘‘(2) in each of the following 2 years a propor24 tion (specified by the Secretary and not to exceed

1⁄2, and 3 25 ⁄4, respectively) of the payment for such
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1 services shall be made under such system and the

2 remainder shall be made in accordance with current

3 regulations.’’.

4 (c) DEADLINE FOR USE OF 1999 OR LATER COST

5 SURVEYS.—Section 226 of BBRA (113 Stat. 1501A–354)

6 is amended by adding at the end the following:

7 ‘‘By not later than January 1, 2003, the Secretary shall

8 incorporate data from a 1999 Medicare cost survey or a

9 subsequent cost survey for purposes of implementing or

10 revising such system.’’.

11 SEC. 436. TREATMENT OF CERTAIN PHYSICIAN PATHOLOGY

12 SERVICES.

13 (a) IN GENERAL.—Section 1848(i) (42 U.S.C.

14 1395w–4(i)) is amended by adding at the end the fol15 lowing new paragraph:

16 ‘‘(4) TREATMENT OF CERTAIN PHYSICIAN PA17 THOLOGY SERVICES.—

18 ‘‘(A) IN GENERAL.—Notwithstanding any

19 other provision of law, when an independent

20 laboratory furnishes the technical component of

21 a physician pathology service with respect to a

22 fee-for-service medicare beneficiary who is a pa23 tient of a grandfathered hospital, such compo24 nent shall be treated as a service for which pay-
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1 ment shall be made to the laboratory under this

2 section and not as—

3 ‘‘(i) an inpatient hospital service for

4 which payment is made to the hospital

5 under section 1886(d); or

6 ‘‘(ii) a hospital outpatient service for

7 which payment is made to the hospital

8 under the prospective payment system

9 under section 1834(t).

10 ‘‘(B) DEFINITIONS.—In this paragraph:

11 ‘‘(i) GRANDFATHERED HOSPITAL.—

12 The term ‘grandfathered hospital’ means a

13 hospital that had an arrangement with an

14 independent laboratory—

15 ‘‘(I) that was in effect as of July

16 22, 1999; and

17 ‘‘(II) under which the laboratory

18 furnished the technical component of

19 physician pathology services with re20 spect to patients of the hospital and

21 submitted a claim for payment for

22 such component to a carrier with a

23 contract under section 1842 (and not

24 to the hospital).
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1 ‘‘(ii) FEE-FOR-SERVICE MEDICARE

2 BENEFICIARY.—The term ‘fee-for-service

3 medicare beneficiary’ means an individual

4 who is not enrolled—

5 ‘‘(I) in a Medicare+Choice plan

6 under part C;

7 ‘‘(II) in a plan offered by an eli8 gible organization under section 1876;

9 ‘‘(III) with a PACE provider

10 under section 1894;

11 ‘‘(IV) in a medicare managed

12 care demonstration project; or

13 ‘‘(V) in the case of a service fur14 nished to an individual on an out15 patient basis, in a health care prepay16 ment plan under section

17 1833(a)(1)(A).’’.

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

19 this section shall apply to services furnished on or after

20 January 1, 2001.

21 SEC. 437. MODIFICATION OF MEDICARE BILLING REQUIRE22 MENTS FOR CERTAIN INDIAN PROVIDERS.

23 (a) IN GENERAL.—Section 1880(a) (42 U.S.C.

24 1395qq(a)) is amended by adding at the end the following

25 new sentence: ‘‘A hospital or a free-standing ambulatory
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1 care clinic (as defined by the Secretary), whether operated

2 by the Indian Health Service or by an Indian tribe or trib3 al organization (as those terms are defined in section 4

4 of the Indian Health Care Improvement Act), shall be eli5 gible for payments for services for which payment is made

6 pursuant to section 1848, notwithstanding sections

7 1814(c) and 1835(d), if and for so long as it meets all

8 of the requirements which are applicable generally to such

9 payments, services, hospitals, and clinics.’’.

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

11 this section shall apply to services furnished on or after

12 January 1, 2001.

13 SEC. 438. REPLACEMENT OF PROSTHETIC DEVICES AND

14 PARTS.

15 (a) IN GENERAL.—Section 1834(h)(1) of the Social

16 Security Act (42 U.S.C. 1395m(h)(1)) is amended by add17 ing at the end the following new subparagraph:

18 ‘‘(F) REPLACEMENT OF PROSTHETIC DE19 VICES AND PARTS.—

20 ‘‘(i) IN GENERAL.—Payment shall be

21 made for the replacement of prosthetic de22 vices which are artificial limbs, or for the

23 replacement of any part of such devices,

24 without regard to continuous use or useful

25 lifetime restrictions if an ordering physi-
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1 cian determines that the provision of a re2 placement device, or a replacement part of

3 such a device, is necessary because of any

4 of the following:

5 ‘‘(I) A change in the physio6 logical condition of the patient.

7 ‘‘(II) An irreparable change in

8 the condition of the device, or in a

9 part of the device.

10 ‘‘(III) The condition of the de11 vice, or the part of the device, re12 quires repairs and the cost of such re13 pairs would be more than 60 percent

14 of the cost of a replacement device, or,

15 as the case may be, of the part being

16 replaced.

17 ‘‘(ii) CONFIRMATION MAY BE RE18 QUIRED IF REPLACEMENT DEVICE OR

19 PART IS LESS THAN 2 YEARS OLD.—If a

20 physician determines that a replacement

21 device, or a replacement part, is necessary

22 pursuant to clause (i)—

23 ‘‘(I) such determination shall be

24 controlling; and
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1 ‘‘(II) such replacement device or

2 part shall be deemed to be reasonable

3 and necessary for purposes of section

4 1862(a)(1)(A);

5 except that if the device, or part, being re6 placed is less than 2 years old (calculated

7 from the date on which the beneficiary

8 began to use the device or part), the Sec9 retary may also require the beneficiary to

10 provide confirmation of necessity of the re11 placement device, or, as the case may be,

12 the replacement part, by a prosthetist se13 lected by the beneficiary.’’.

14 (b) PREEMPTION OF RULE.—The provisions of sec15 tion 1834(h)(1)(F) of the Social Security Act (42 U.S.C.

16 1395m(h)(1)(F)), as added by subsection (a), shall super17 sede any rule that as of the date of enactment of this Act

18 may have applied a 5-year replacement rule with regard

19 to prosthetic devices.

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

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

22 the date of enactment of this Act.
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1 SEC. 439. MEDPAC STUDY AND REPORT ON MEDICARE RE2 IMBURSEMENT FOR SERVICES PROVIDED BY

3 CERTAIN PROVIDERS.

4 (a) STUDY.—The Medicare Payment Advisory Com5 mission (referred to in this section as ‘‘MedPAC’’) shall

6 conduct a study on the appropriateness of the current pay7 ment rates under the medicare program under title XVIII

8 of the Social Security Act (42 U.S.C. 1395 et seq.) for

9 services provided by a—

10 (1) certified nurse-midwife (as defined in sub11 section (gg)(2) of section 1861 of the Social Security

12 Act (42 U.S.C. 1395x);

13 (2) physician assistant (as defined in subsection

14 (aa)(5)(A) of such section);

15 (3) nurse practitioner (as defined in such sub16 section); and

17 (4) clinical nurse specialist (as defined in sub18 section (aa)(5)(B) of such section).

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

20 date of enactment of this Act, MedPAC shall submit a

21 report to the Secretary of Health and Human Services and

22 Congress on the study conducted under subsection (a), to23 gether with any recommendations for legislation that

24 MedPAC determines to be appropriate as a result of such

25 study.
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1 SEC. 440. MEDPAC STUDY AND REPORT ON MEDICARE COV2 ERAGE OF SERVICES PROVIDED BY CERTAIN

3 NON-PHYSICIAN PROVIDERS.

4 (a) STUDY.—

5 (1) IN GENERAL.—The Medicare Payment Ad6 visory Commission (referred to in this section as

7 ‘‘MedPAC’’) shall conduct a study to determine the

8 appropriateness of providing coverage under the

9 medicare program under title XVIII of the Social

10 Security Act (42 U.S.C. 1395 et seq.) for services

11 provided by a—

12 (A) certified first nurse assistant;

13 (B) marriage counselor;

14 (C) pastoral care counselor; and

15 (D) licensed professional counselor of men16 tal health.

17 (2) COSTS TO PROGRAM.—The study shall con18 sider the short-term and long-term benefits, and

19 costs to the medicare program, of providing the cov20 erage described in paragraph (1).

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

22 date of enactment of this Act, MedPAC shall submit a

23 report to the Secretary of Health and Human Services and

24 Congress on the study conducted under subsection (a), to25 gether with any recommendations for legislation that
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1 MedPAC determines to be appropriate as a result of such

2 study.

3 TITLE V—PROVISIONS

4 RELATING TO PARTS A AND B

5 Subtitle A—Home Health Services

6 SEC. 501. 1-YEAR ADDITIONAL DELAY IN APPLICATION OF

7 15 PERCENT REDUCTION ON PAYMENT LIM8 ITS FOR HOME HEALTH SERVICES.

9 (a) IN GENERAL.—Section 1895(b)(3)(A)(i) (42

10 U.S.C. 1395fff(b)(3)(A)(i)) is amended—

11 (1) by redesignating subclause (II) as subclause

12 (III);

13 (2) in subclause (III), as redesignated, by strik14 ing ‘‘described in subclause (I)’’ and inserting ‘‘de15 scribed in subclause (II)’’; and

16 (3) by inserting after subclause (I) the fol17 lowing new subclause:

18 ‘‘(II) For the 12-month period

19 beginning after the period described

20 in subclause (I), such amount (or

21 amounts) shall be equal to the amount

22 (or amounts) determined under sub23 clause (I), updated under subpara24 graph (B).’’.
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1 (b) CHANGE IN REPORT.—Section 302(c) of BBRA

2 is amended by striking ‘‘Not later than’’ and all that fol3 lows through ‘‘(42 U.S.C. 1395fff)’’ and inserting ‘‘Not

4 later than October 1, 2001’’.

5 SEC. 502. RESTORATION OF FULL HOME HEALTH MARKET

6 BASKET UPDATE FOR HOME HEALTH SERV7 ICES FOR FISCAL YEAR 2001.

8 (a) IN GENERAL.—Section 1861(v)(1)(L)(x) (42

9 U.S.C. 1395x(v)(1)(L)(x)) is amended—

10 (1) by striking ‘‘2001,’’; and

11 (2) by adding at the end the following: ‘‘With

12 respect to cost reporting periods beginning during

13 fiscal year 2001, the update to any limit under this

14 subparagraph shall be the home health market bas15 ket index.’’.

16 (b) SPECIAL RULE FOR PAYMENT FOR FISCAL YEAR

17 2001 BASED ON ADJUSTED PROSPECTIVE PAYMENT

18 AMOUNTS.—

19 (1) IN GENERAL.—Notwithstanding the amend20 ments made by subsection (a), for purposes of mak21 ing payments under section 1895(b) of the Social

22 Security Act (42 U.S.C. 1395fff(b)) for home health

23 services for fiscal year 2001, the Secretary of Health

24 and Human Services shall—
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1 (A) with respect to episodes and visits end2 ing on or after October 1, 2000, and before

3 April 1, 2001, use the final standardized and

4 budget neutral prospective payment amounts

5 for 60 day episodes and standardized average

6 per visit amounts for fiscal year 2001 as pub7 lished by the Secretary in Federal Register of

8 the July 3, 2000 (65 Federal Register 41128–

9 41214); and

10 (B) with respect to episodes and visits end11 ing on or after April 1, 2001, and before Octo12 ber 1, 2001, use such amounts increased by an

13 actuarially determined amount that represents

14 the different distributions of episodes and visits

15 in the first and second 6 month periods of fiscal

16 year 2001 due to implementation of the home

17 health prospective payment system under sec18 tion 1895 of such Act (42 U.S.C. 1395fff).

19 (2) NO EFFECT ON OTHER PAYMENTS OR DE20 TERMINATIONS.—The Secretary shall not take the

21 provisions of paragraph (1) into account for pur22 poses of payments, determinations, or budget neu23 trality adjustments under section 1895 of the Social

24 Security Act.

25 (c) ADJUSTMENT FOR CASE MIX CHANGES.—
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1 (1) IN GENERAL.—Section 1895(b)(3)(B) (42

2 U.S.C. 1395fff(b)(3)(B)) is amended by adding at

3 the end the following new clause:

4 ‘‘(vi) ADJUSTMENT FOR CASE MIX

5 CHANGES.—Insofar as the Secretary deter6 mines that the adjustments under para7 graph (4)(A)(i) for a previous fiscal year

8 (or estimates that such adjustments for a

9 future fiscal year) did (or are likely to) re10 sult in a change in aggregate payments

11 under this subsection during the fiscal year

12 that are a result of changes in the coding

13 or classification of different units of serv14 ices that do not reflect real changes in case

15 mix, the Secretary may adjust the stand16 ard prospective payment amount (or

17 amounts) under paragraph (3) for subse18 quent fiscal years so as to eliminate the ef19 fect of such coding or classification

20 changes.’’.

21 (2) EFFECTIVE DATE.—The amendment made

22 by paragraph (1) applies to episodes concluding on

23 or after October 1, 2001.
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1 SEC. 503. EXCLUSION OF CERTAIN NONROUTINE MEDICAL

2 SUPPLIES UNDER THE PPS FOR HOME

3 HEALTH SERVICES.

4 (a) EXCLUSION.—

5 (1) IN GENERAL.—Section 1895 (42 U.S.C.

6 1395fff) is amended by adding at the end the fol7 lowing new subsection:

8 ‘‘(e) EXCLUSION OF NONROUTINE MEDICAL SUP9 PLIES.—

10 ‘‘(1) IN GENERAL.—Notwithstanding the pre11 ceding provisions of this section, in the case of all

12 nonroutine medical supplies (as defined by the Sec13 retary) furnished by a home health agency during a

14 year (beginning with 2001) for which payment is

15 otherwise made on the basis of the prospective pay16 ment amount under this section, payment under this

17 section shall be based instead on the lesser of—

18 ‘‘(A) the actual charge for the nonroutine

19 medical supply; or

20 ‘‘(B) the amount determined under the fee

21 schedule established by the Secretary for pur22 poses of making payment for such items under

23 part B for nonroutine medical supplies fur24 nished during that year.

25 ‘‘(2) BUDGET NEUTRALITY ADJUSTMENT.—The

26 Secretary shall provide for an appropriate propor-
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1 tional reduction in payments under this section so

2 that, beginning with fiscal year 2001, the aggregate

3 amount of such reductions is equal to the aggregate

4 increase in payments attributable to the exclusion ef5 fected under paragraph (1).’’.

6 (2) CONFORMING AMENDMENT.—Section

7 1895(b)(1) of the Social Security Act (42 U.S.C.

8 1395fff(b)(1)) is amended by striking ‘‘The Sec9 retary’’ and inserting ‘‘Subject to subsection (e), the

10 Secretary’’.

11 (3) EFFECTIVE DATE.—The amendments made

12 by this subsection shall apply to supplies furnished

13 on or after January 1, 2001.

14 (b) EXCLUSION FROM CONSOLIDATED BILLING.—

15 (1) IN GENERAL.—For items provided during

16 the applicable period, the Secretary of Health and

17 Human Services shall administer the medicare pro18 gram under title XVIII of the Social Security Act

19 (42 U.S.C. 1395 et seq.) as if—

20 (A) section 1842(b)(6)(F) of such Act (42

21 U.S.C. 1395u(b)(6)(F)) was amended by strik22 ing ‘‘(including medical supplies described in

23 section 1861(m)(5), but excluding durable med24 ical equipment to the extent provided for in

25 such section)’’ and inserting ‘‘(excluding med-
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1 ical supplies and durable medical equipment de2 scribed in section 1861(m)(5))’’; and

3 (B) section 1862(a)(21) of such Act (42

4 U.S.C. 1395y(a)(21)) was amended by striking

5 ‘‘(including medical supplies described in sec6 tion 1861(m)(5), but excluding durable medical

7 equipment to the extent provided for in such

8 section)’’ and inserting ‘‘(excluding medical

9 supplies and durable medical equipment de10 scribed in section 1861(m)(5))’’.

11 (2) APPLICABLE PERIOD DEFINED.—For pur12 poses of paragraph (1), the term ‘‘applicable period’’

13 means the period beginning on January 1, 2001,

14 and ending on the later of—

15 (A) the date that is 18 months after the

16 date of enactment of this Act; or

17 (B) the date determined appropriate by the

18 Secretary of Health and Human Services.

19 (c) STUDY ON EXCLUSION OF CERTAIN NONROUTINE

20 MEDICAL SUPPLIES UNDER THE PPS FOR HOME

21 HEALTH SERVICES.—

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

23 Human Services (in this subsection referred to as

24 the ‘‘Secretary’’) shall conduct a study to identify

25 any nonroutine medical supply that may be appro-
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1 priately and cost-effectively excluded from the pro2 spective payment system for home health services

3 under section 1895 of the Social Security Act (42

4 U.S.C. 1395fff). Specifically, the Secretary shall

5 consider whether wound care and ostomy supplies

6 should be excluded from such prospective payment

7 system.

8 (2) REPORT.—Not later than 18 months after

9 the date of enactment of this Act, the Secretary

10 shall submit to Congress a report on the study con11 ducted under paragraph (1), including a list of any

12 nonroutine medical supplies that should be excluded

13 from the prospective payment system for home

14 health services under section 1895 of the Social Se15 curity Act (42 U.S.C. 1395fff).

16 (d) EXCLUSION OF OTHER NONROUTINE MEDICAL

17 SUPPLIES.—Upon submission of the report under sub18 section (c)(2), the Secretary shall (if necessary) revise the

19 definition of nonroutine medical supply, as defined for

20 purposes of section 1895(e) (as added by subsection (a)),

21 based on the list of nonroutine medical supplies included

22 in such report.
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1 SEC. 504. TREATMENT OF BRANCH OFFICES; GAO STUDY

2 ON SUPERVISION OF HOME HEALTH CARE

3 PROVIDED IN ISOLATED RURAL AREAS.

4 (a) TREATMENT OF BRANCH OFFICES.—

5 (1) IN GENERAL.—Notwithstanding any other

6 provision of law, in determining for purposes of title

7 XVIII of the Social Security Act whether an office

8 of a home health agency constitutes a branch office

9 or a separate home health agency, neither the time

10 nor distance between a parent office of the home

11 health agency and a branch office shall be the sole

12 determinant of a home health agency’s branch office

13 status.

14 (2) CONSIDERATION OF FORMS OF TECH15 NOLOGY IN DEFINITION OF SUPERVISION.—The Sec16 retary of Health and Human Services may include

17 forms of technology in determining what constitutes

18 ‘‘supervision’’ for purposes of determining a home

19 heath agency’s branch office status under paragraph

20 (1).

21 (b) GAO STUDY.—

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

23 United States shall conduct a study of the provision

24 of adequate supervision to maintain quality of home

25 health services delivered under the medicare pro26 gram in isolated rural areas. The study shall evalu-
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1 ate the methods that home health agency branches

2 and subunits use to maintain adequate supervision

3 in the delivery of services to clients residing in those

4 areas, how these methods of supervision compare to

5 requirements that subunits independently meet

6 medicare conditions of participation, and the re7 sources utilized by subunits to meet such conditions.

8 (2) REPORT.—Not later than January 1, 2002,

9 the Comptroller General shall submit to Congress a

10 report on the study conducted under paragraph (1).

11 The report shall include recommendations on wheth12 er exceptions are needed for subunits and branches

13 of home health agencies under the medicare program

14 to maintain access to the home health benefit or

15 whether alternative policies should be developed to

16 assure adequate supervision and access and rec17 ommendations on whether a national standard for

18 supervision is appropriate.

19 SEC. 505. TEMPORARY ADDITIONAL PAYMENTS FOR HIGH20 COST PATIENTS.

21 (a) INCREASE FOR FISCAL YEARS 2001 AND 2002.—

22 For each of fiscal years 2001 and 2002, the Secretary of

23 Health and Human Services shall increase the addition

24 or adjustment for outliers under section 1895(b)(5) of the

25 Social Security Act (42 U.S.C. 1395fff(b)(5)) applicable
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1 to home health services furnished during a fiscal year by

2 such proportion as will result in an aggregate increase in

3 such addition or adjustment for the fiscal year estimated

4 to equal $150,000,000.

5 (b) ADDITIONAL PAYMENT NOT BUILT INTO THE

6 BASE.—The Secretary of Health and Human Services

7 shall not include any additional payment made under sub8 section (a) in updating the standard prospective payment

9 amount (or amounts) applicable to units of home health

10 services furnished during a period, as increased by the

11 home health applicable increase percentage for the fiscal

12 year involved under section 1895(b)(3)(B) of the Social

13 Security Act (42 U.S.C. 1395fff(b)(3)(B)).

14 (c) WAIVING BUDGET NEUTRALITY.—The Secretary

15 of Health and Human Services shall not reduce the stand16 ard prospective payment amount (or amounts) under sec17 tion 1895 of the Social Security Act (42 U.S.C. 1395fff),

18 including under subsection (b)(3)(C) of such Act, applica19 ble to units of home health services furnished during a

20 period to offset the increase in payments resulting from

21 the application of subsection (a).
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1 SEC. 506. CLARIFICATION OF THE HOMEBOUND DEFINI2 TION UNDER THE MEDICARE HOME HEALTH

3 BENEFIT.

4 (a) IN GENERAL.—Sections 1814(a) and 1835(a) (42

5 U.S.C. 1395f(a) and 1395n(a)) are each amended—

6 (1) in the last sentence, by striking ‘‘, and that

7 absences of the individual from home are infrequent

8 or of relatively short duration, or are attributable to

9 the need to receive medical treatment’’; and

10 (2) by adding at the end the following new sen11 tences: ‘‘Any absence of an individual from the home

12 attributable to the need to receive health care treat13 ment, including regular absences for the purpose of

14 participating in therapeutic, psychosocial, or medical

15 treatment in an adult day-care program that is li16 censed or certified by a State, or accredited, to fur17 nish adult day-care services in the State shall not

18 disqualify an individual from being considered to be

19 ‘confined to his home’. Any other absence of an indi20 vidual from the home shall not so disqualify an indi21 vidual if the absence is of infrequent or short dura22 tion. For purposes of the preceding sentence, any

23 absence for the purpose of visiting a family member

24 who is unable to visit the individual or for the pur25 pose of attending a religious service shall be deemed

26 to be an absence of infrequent and short duration.’’.
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1 (b) EFFECTIVE DATE.—The amendments made by

2 subsection (a) shall apply to items and services provided

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

4 Subtitle B—Direct Graduate

5 Medical Education

6 SEC. 511. AUTHORITY TO INCLUDE COSTS OF TRAINING OF

7 CLINICAL PSYCHOLOGISTS IN PAYMENTS TO

8 HOSPITALS.

9 Effective for cost reporting periods beginning on or

10 after October 1, 1999, for purposes of payments to hos11 pitals under the medicare program under title XVIII of

12 the Social Security Act (42 U.S.C. 1395 et seq.) for costs

13 of approved educational activities (as defined in section

14 413.85 of title 42 of the Code of Federal Regulations),

15 such approved educational activities shall include the clin16 ical portion of professional educational training programs,

17 recognized by the Secretary, for clinical psychologists.
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1 TITLE VI—PROVISIONS RELAT2 ING TO PART C

3 (MEDICARE+CHOICE PRO4 GRAM) AND OTHER MEDI5 CARE MANAGED CARE PROVI6 SIONS

7 Subtitle A—Medicare+Choice

8 Payment Reforms

9 SEC. 601. INCREASE IN NATIONAL PER CAPITA

10 MEDICARE+CHOICE GROWTH PERCENTAGE

11 IN 2001 AND 2002.

12 Section 1853(c)(6)(B) (42 U.S.C. 1395w–

13 23(c)(6)(B)) is amended—

14 (1) in clause (iv), by striking ‘‘for 2001, 0.5

15 percentage points’’ and inserting ‘‘for 2001, 0 per16 centage points’’; and

17 (2) in clause (v), by striking ‘‘for 2002, 0.3 per18 centage points’’ and inserting ‘‘for 2002, 0 percent19 age points’’.

20 SEC. 602. REMOVING APPLICATION OF BUDGET NEU21 TRALITY FOR 2002.

22 Section 1853(c) (42 U.S.C. 1395w–23(c)) is

23 amended—
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1 (1) in paragraph (1)(A), in the matter following

2 clause (ii), by inserting ‘‘(except for 2002)’’ after

3 ‘‘multiplied’’; and

4 (2) in paragraph (5), by inserting ‘‘(except for

5 2002)’’ after ‘‘for each year’’.

6 SEC. 603. INCREASE IN MINIMUM PAYMENT AMOUNT.

7 Section 1853(c)(1)(B)(ii) (42 U.S.C. 1395w–

8 23(c)(1)(B)(ii)) is amended—

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

10 inserting ‘‘(ii)(I) Subject to subclause (II), for a suc11 ceeding year’’; and

12 (2) by adding at the end the following new sub13 clause:

14 ‘‘(II) For 2001 for any area in any

15 Metropolitan Statistical Area with a popu16 lation of more than 250,000, $475 (and

17 for any area outside such an area, $425).’’.

18 SEC. 604. ALLOWING MOVEMENT TO 50:50 PERCENT BLEND

19 IN 2002.

20 Section 1853(c)(2) (42 U.S.C. 1395w–23(c)(2)) is

21 amended—

22 (1) by striking the period at the end of sub23 paragraph (F) and inserting a semicolon; and

24 (2) by adding after and below subparagraph

25 (F) the following:
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1 ‘‘except that a Medicare+Choice organization may

2 elect to apply subparagraph (F) (rather than sub3 paragraph (E)) for 2002.’’.

4 SEC. 605. INCREASED UPDATE FOR PAYMENT AREAS WITH

5 ONLY ONE OR NO MEDICARE+CHOICE CON6 TRACTS.

7 (a) IN GENERAL.—Section 1853(c)(1)(C)(ii) (42

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

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

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

11 a subsequent year’’; and

12 (2) by adding at the end the following new sub13 clause:

14 ‘‘(II) During 2002 and 2003, in the

15 case of a Medicare+Choice payment area

16 in which there is no more than 1 contract

17 entered into under this part as of July 1

18 before the beginning of the year, 102.5

19 percent of the annual Medicare+Choice

20 capitation rate under this paragraph for

21 the area for the previous year.’’.

22 (b) CONSTRUCTION.—The amendments made by sub23 section (a) shall not affect the payment of a first time

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

25 U.S.C. 1395w–23(i)).
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1 SEC. 606. 10-YEAR PHASE-IN OF RISK ADJUSTMENT AND

2 NEW METHODOLOGY.

3 Section 1853(a)(3)(C)(ii) (42 U.S.C. 1395w–

4 23(c)(1)(C)(ii)) is amended—

5 (1) in subclause (I), by striking ‘‘and’’ at the

6 end;

7 (2) in subclause (II), by striking ‘‘2002.’’ and

8 inserting ‘‘2002 and 2003.’’; and

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

10 ‘‘(IV) 30 percent of such capita11 tion rate in 2004 (in which such

12 methodology should reflect a blend of

13 20 percent of only data from inpatient

14 settings and 10 percent of data from

15 all settings);

16 ‘‘(V) 40 percent of such amount

17 in 2005 (in which such methodology

18 should reflect a blend of 10 percent of

19 only data from inpatient settings and

20 30 percent of data from all settings);

21 ‘‘(VI) 50 percent of such amount

22 in 2006 (in which such methodology

23 should reflect data from all settings);

24 ‘‘(VII) 60 percent of such

25 amount in 2007 (in which such meth-
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1 odology should reflect data from all

2 settings);

3 ‘‘(VIII) 70 percent of such

4 amount in 2008 (in which such meth5 odology should reflect data from all

6 settings);

7 ‘‘(IX) 80 percent of such amount

8 in 2009 (in which such methodology

9 should reflect data from all settings);

10 ‘‘(X) 90 percent of such amount

11 in 2010 (in which such methodology

12 should reflect data from all settings);

13 and

14 ‘‘(XI) 100 percent of such

15 amount in any subsequent year (in

16 which such methodology should reflect

17 data from all settings).’’.

18 SEC. 607. PERMITTING PREMIUM REDUCTIONS AS ADDI19 TIONAL BENEFITS UNDER

20 MEDICARE+CHOICE PLANS.

21 (a) IN GENERAL.—

22 (1) AUTHORIZATION OF PART B PREMIUM RE23 DUCTIONS.—Section 1854(f)(1) (42 U.S.C. 1395w–

24 24(f)(1)) is amended by adding at the end the fol25 lowing new subparagraph:
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1 ‘‘(F) PREMIUM REDUCTIONS.—

2 ‘‘(i) IN GENERAL.—Subject to clause

3 (ii), as part of providing any additional

4 benefits required under subparagraph (A),

5 a Medicare+Choice organization may elect

6 a reduction in its payments under section

7 1853(a)(1)(A) with respect to a

8 Medicare+Choice plan and the Secretary

9 shall apply such reduction to reduce the

10 premium under section 1839 of each en11 rollee in such plan as provided in section

12 1840(i).

13 ‘‘(ii) AMOUNT OF REDUCTION.—The

14 amount of the reduction under clause (i)

15 with respect to any enrollee in a

16 Medicare+Choice plan—

17 ‘‘(I) may not exceed 120 percent

18 of the premium described under sec19 tion 1839(a)(3); and

20 ‘‘(II) shall apply uniformly to

21 each enrollee of the Medicare+Choice

22 plan to which such reduction ap23 plies.’’.

24 (2) CONFORMING AMENDMENTS.—
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1 (A) ADJUSTMENT OF PAYMENTS TO

2 MEDICARE+CHOICE ORGANIZATIONS.—Section

3 1853(a)(1)(A) (42 U.S.C. 1395w–23(a)(1)(A))

4 is amended by inserting ‘‘reduced by the

5 amount of any reduction elected under section

6 1854(f)(1)(F) and’’ after ‘‘for that area,’’.

7 (B) ADJUSTMENT AND PAYMENT OF PART

8 B PREMIUMS.—

9 (i) ADJUSTMENT OF PREMIUMS.—

10 Section 1839(a)(2) (42 U.S.C.

11 1395r(a)(2)) is amended by striking

12 ‘‘shall’’ and all that follows and inserting

13 the following: ‘‘shall be the amount deter14 mined under paragraph (3), adjusted as

15 required in accordance with subsections

16 (b), (c), and (f), and to reflect 80 percent

17 of any reduction elected under section

18 1854(f)(1)(F).’’.

19 (ii) PAYMENT OF PREMIUMS.—Section

20 1840 (42 U.S.C. 1395s) is amended by

21 adding at the end the following new sub22 section:

23 ‘‘(i) In the case of an individual enrolled in a

24 Medicare+Choice plan, the Secretary shall provide for

25 necessary adjustments of the monthly beneficiary pre-
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•S 3165 IS

1 mium to reflect 80 percent of any reduction elected under

2 section 1854(f)(1)(F). This premium adjustment may be

3 provided directly or as an adjustment to any social secu4 rity, railroad retirement, and civil service retirement bene5 fits, to the extent which the Secretary determines that

6 such an adjustment is appropriate and feasible with the

7 concurrence of the agencies responsible for the administra8 tion of such benefits.’’.

9 (C) INFORMATION COMPARING PLAN PRE10 MIUMS UNDER PART C.—Section 1851(d)(4)(B)

11 (42 U.S.C. 1395w–21(d)(4)(B)) is amended—

12 (i) by striking ‘‘PREMIUMS.—The’’

13 and inserting ‘‘PREMIUMS.—

14 ‘‘(i) IN GENERAL.—The’’; and

15 (ii) by adding at the end the following

16 new clause:

17 ‘‘(ii) REDUCTIONS.—The reduction in

18 premiums, if any.’’.

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

20 subsection (a) shall apply to years beginning with 2002.

21 SEC. 608. DELAY FROM JULY TO NOVEMBER 2000, IN DEAD22 LINE FOR OFFERING AND WITHDRAWING

23 MEDICARE+CHOICE PLANS FOR 2001.

24 Notwithstanding any other provision of law, the dead25 line for a Medicare+Choice organization to withdraw the
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1 offering of a Medicare+Choice plan under part C of title

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

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

4 2001 is delayed from July 1, 2000, to November 15, 2000,

5 and any such organization that provided notice of with6 drawal of such a plan during 2000 before the date of en7 actment of this Act may rescind such withdrawal at any

8 time before November 15, 2000.

9 SEC. 609. REVISION OF PAYMENT RATES FOR ESRD PA10 TIENTS ENROLLED IN MEDICARE+CHOICE

11 PLANS.

12 (a) IN GENERAL.—Section 1853(a)(1)(B) (42 U.S.C.

13 1395w–23(a)(1)(B)) is amended by adding at the end the

14 following: ‘‘In establishing such rates the Secretary shall

15 provide for appropriate adjustments to increase each rate

16 to reflect the demonstration rate (including the risk-ad17 justment methodology associated with such rate) of the

18 social health maintenance organization end-stage renal

19 disease demonstrations established by section 2355 of the

20 Deficit Reduction Act of 1984 (Public Law 98–369; 98

21 Stat. 1103), as amended by section 13567(b) of the Omni22 bus Budget Reconciliation Act of 1993 (Public Law 103–

23 66; 107 Stat. 608), and shall compute such rates by tak24 ing into account such factors as renal treatment modality,
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1 age, and the underlying cause of the end-stage renal dis2 ease.’’.

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

4 subsection (a) shall apply to payments for months begin5 ning with January 2002.

6 (c) PUBLICATION.—The Secretary of Health and

7 Human Services, not later than 6 months after the date

8 of enactment of this Act, shall publish for public comment

9 a description of the appropriate adjustments described in

10 the last sentence of section 1853(a)(1)(B) of the Social

11 Security Act (42 U.S.C. 1395w–23(a)(1)(B)), as added by

12 subsection (a). The Secretary shall publish such adjust13 ments in final form by not later than July 1, 2001, so

14 that the amendment made by subsection (a) is imple15 mented on a timely basis consistent with subsection (b).

16 SEC. 610. MODIFICATION OF PAYMENT RULES FOR CER17 TAIN FRAIL ELDERLY MEDICARE BENE18 FICIARIES.

19 (a) MODIFICATION OF PAYMENT RULES.—Section

20 1853 (42 U.S.C. 1395w–23) is amended—

21 (1) in subsection (a)—

22 (A) in paragraph (1)(A), by striking ‘‘sub23 sections (e), (g), and (i)’’ and inserting ‘‘sub24 sections (e), (g), (i), and (j)’’;
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1 (B) in paragraph (3)(D), by inserting

2 ‘‘paragraph (4) and’’ after ‘‘Subject to’’; and

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

4 paragraph:

5 ‘‘(4) EXEMPTION FROM RISK-ADJUSTMENT SYS6 TEM FOR FRAIL ELDERLY BENEFICIARIES EN7 ROLLED IN SPECIALIZED PROGRAMS.—

8 ‘‘(A) IN GENERAL.—In applying the risk9 adjustment factors established under paragraph

10 (3) during the period described in subparagraph

11 (B), the limitation under paragraph

12 (3)(C)(ii)(I) shall apply to a frail elderly

13 Medicare+Choice beneficiary (as defined in

14 subsection (j)(3)) who is enrolled in a

15 Medicare+Choice plan under a specialized pro16 gram for the frail elderly (as defined in sub17 section (j)(2)) during the entire period.

18 ‘‘(B) PERIOD OF APPLICATION.—The pe19 riod described in this subparagraph begins with

20 January 2001, and ends with the first month

21 for which the Secretary certifies to Congress

22 that a comprehensive risk adjustment method23 ology under paragraph (3)(C) that takes into

24 account the factors described in subsection

25 (j)(1)(B) is being fully implemented.’’; and
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1 (2) by adding at the end the following new sub2 section:

3 ‘‘(j) SPECIAL RULES FOR FRAIL ELDERLY EN4 ROLLED IN SPECIALIZED PROGRAMS FOR THE FRAIL EL5 DERLY.—

6 ‘‘(1) DEVELOPMENT AND IMPLEMENTATION OF

7 NEW PAYMENT SYSTEM.—

8 ‘‘(A) IN GENERAL.—The Secretary shall

9 develop and implement (as soon as possible

10 after the date of enactment of the Medicare,

11 Medicaid, and SCHIP Balanced Budget Refine12 ment Act of 2000) a payment methodology for

13 frail elderly Medicare+Choice beneficiaries en14 rolled in a Medicare+Choice plan under a spe15 cialized program for the frail elderly (as defined

16 in paragraph (2)(A)).

17 ‘‘(B) FACTORS DESCRIBED.—The method18 ology developed and implemented under sub19 paragraph (A) shall take into account the prev20 alence, mix, and severity of chronic conditions

21 among frail elderly Medicare+Choice bene22 ficiaries and shall include—

23 ‘‘(i) medical diagnostic factors from

24 all provider settings (including hospital

25 and nursing facility settings);
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1 ‘‘(ii) functional indicators of health

2 status; and

3 ‘‘(iii) such other factors as may be

4 necessary to achieve appropriate payments

5 for plans serving such beneficiaries.

6 ‘‘(2) SPECIALIZED PROGRAM FOR THE FRAIL

7 ELDERLY DEFINED.—

8 ‘‘(A) IN GENERAL.—In this part, the term

9 ‘specialized program for the frail elderly’ means

10 a program that the Secretary determines—

11 ‘‘(i) is offered under this part as a

12 distinct part of a Medicare+Choice plan;

13 ‘‘(ii) primarily enrolls frail elderly

14 Medicare+Choice beneficiaries; and

15 ‘‘(iii) has a clinical delivery system

16 that is specifically designed to serve the

17 special needs of such beneficiaries and to

18 coordinate short-term and long-term care

19 for such beneficiaries through the use of a

20 team described in subparagraph (B) and

21 through the provision of primary care serv22 ices to such beneficiaries by means of such

23 a team at the nursing facility involved.

24 ‘‘(B) SPECIALIZED TEAM DESCRIBED.—A

25 team described in this subparagraph—
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1 ‘‘(i) includes—

2 ‘‘(I) a physician; and

3 ‘‘(II) a nurse practitioner or geri4 atric care manager; and

5 ‘‘(ii) has as members individuals

6 who—

7 ‘‘(I) have special training in the

8 care and management of the frail el9 derly beneficiaries; and

10 ‘‘(II) specialize in the care and

11 management of such beneficiaries.

12 ‘‘(3) FRAIL ELDERLY MEDICARE+CHOICE BEN13 EFICIARY DEFINED.—In this part, the term ‘frail el14 derly Medicare+Choice beneficiary’ means a

15 Medicare+Choice eligible individual who—

16 ‘‘(A) is residing in a skilled nursing facility

17 (as defined in section 1819(a)) or a nursing fa18 cility (as defined in section 1919(a)) for an in19 definite period and without any intention of re20 siding outside the facility; and

21 ‘‘(B) has a severity of condition that

22 makes the individual frail (as determined under

23 guidelines approved by the Secretary).’’.
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1 (b) EFFECTIVE DATE.—The amendments made by

2 this section shall take effect on the date of enactment of

3 this Act.

4 SEC. 611. FULL IMPLEMENTATION OF RISK ADJUSTMENT

5 FOR CONGESTIVE HEART FAILURE ENROLL6 EES FOR 2001.

7 (a) IN GENERAL.—Section 1853(a)(3)(C) (42 U.S.C.

8 1395w–23(a)(3)(C)) is amended—

9 (1) in clause (ii), by striking ‘‘Such risk adjust10 ment’’ and inserting ‘‘Except as provided in clause

11 (iii), such risk adjustment’’; and

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

13 clause:

14 ‘‘(iii) FULL IMPLEMENTATION OF

15 RISK ADJUSTMENT FOR CONGESTIVE

16 HEART FAILURE ENROLLEES FOR 2001.—

17 ‘‘(I) EXEMPTION FROM PHASE18 IN.—Subject to subclause (II), the

19 Secretary shall fully implement the

20 risk adjustment methodology de21 scribed in clause (i) with respect to

22 each individual who has had a quali23 fying congestive heart failure inpa24 tient diagnosis (as determined by the

25 Secretary under such risk adjustment
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1 methodology) during the period begin2 ning on July 1, 1999, and ending on

3 June 30, 2000, and who is enrolled in

4 a coordinated care plan that is the

5 only coordinated care plan offered on

6 January 1, 2001, in the service area

7 of the individual.

8 ‘‘(II) PERIOD OF APPLICATION.—

9 Subclause (I) shall only apply during

10 the 1-year period beginning on Janu11 ary 1, 2001.’’.

12 (b) EXCLUSION FROM DETERMINATION OF THE

13 BUDGET NEUTRALITY FACTOR.—Section 1853(c)(5) (42

14 U.S.C. 1395w–23(c)(5)) is amended by striking ‘‘sub15 section (i)’’ and inserting ‘‘subsections (a)(3)(C)(iii) and

16 (i)’’.

17 SEC. 612. INCLUSION OF COSTS OF DOD MILITARY TREAT18 MENT FACILITY SERVICES TO MEDICARE-ELI19 GIBLE BENEFICIARIES IN CALCULATION OF

20 MEDICARE+CHOICE PAYMENT RATES.

21 Section 1853(c)(3) (42 U.S.C. 1395w–23(c)(3)) is

22 amended—

23 (1) in subparagraph (A), by striking ‘‘subpara24 graph (B)’’ and inserting ‘‘subparagraphs (B) and

25 (E)’’; and
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1 (2) by adding at the end the following new sub2 paragraph:

3 ‘‘(E) INCLUSION OF COSTS OF CERTAIN

4 DOD MILITARY TREATMENT FACILITY SERVICES

5 TO MEDICARE-ELIGIBLE BENEFICIARIES.—

6 ‘‘(i) IN GENERAL.—In determining

7 the area-specific Medicare+Choice capita8 tion rate under subparagraph (A) for a

9 year (beginning with 2001), the annual per

10 capita rate of payment for 1997 deter11 mined under section 1876(a)(1)(C) for a

12 Medicare+Choice payment area that is

13 within 1 or more MTF affected areas (as

14 defined in clause (ii)) shall be increased by

15 the sum of the MTF percentages (as de16 scribed in clause (iii)) for the MTF af17 fected area or areas. The increase under

18 this subparagraph shall not be taken into

19 account in computing the national stand20 ardized annual Medicare+Choice capita21 tion rate under paragraph (4)(B).

22 ‘‘(ii) MTF AFFECTED AREA DE23 FINED.—In this subparagraph, the term

24 ‘MTF affected area’ means, with respect to

25 a military treatment facility (as defined in
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1 subsection (a)(6) of section 1896), an area

2 that includes the following:

3 ‘‘(I) The Medicare+Choice pay4 ment area in which a military treat5 ment facility that was part of the

6 medicare subvention demonstration

7 project under such section as of July

8 1, 2000, is located.

9 ‘‘(II) Any Medicare+Choice pay10 ment area which is contiguous to the

11 area described in subclause (I) and lo12 cated not farther than 40 miles from

13 the facility.

14 ‘‘(iii) MTF PERCENTAGE.—For pur15 poses of clause (i), the MTF percentage

16 for an MTF affected area is equal to the

17 ratio of—

18 ‘‘(I) the aggregate amount of

19 costs incurred by the Department of

20 Defense in furnishing items and serv21 ices to individuals entitled to benefits

22 under this title who received services

23 from the military treatment facility

24 described in clause (ii) for that area

25 in 1996 (as determined pursuant to
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1 section 1896(j)(1)(A)), increased by

2 the national per capita

3 Medicare+Choice growth percentage

4 under paragraph (6) for 1997, to

5 ‘‘(II) the average number of indi6 viduals residing in such area in 1996

7 entitled to benefits under part A and

8 enrolled under part B.’’.

9 Subtitle B—Other Medicare+Choice

10 Reforms

11 SEC. 621. AMOUNTS IN MEDICARE TRUST FUNDS AVAIL12 ABLE FOR SECRETARY’S SHARE OF

13 MEDICARE+CHOICE EDUCATION AND EN14 ROLLMENT-RELATED COSTS.

15 (a) RELOCATION OF PROVISIONS.—Section

16 1857(e)(2) (42 U.S.C. 1395w–27(e)(2)) is amended to

17 read as follows:

18 ‘‘(2) COST-SHARING IN ENROLLMENT-RELATED

19 COSTS.—A Medicare+Choice organization shall pay

20 the fee established by the Secretary under section

21 1851(j)(3)(A).’’.

22 (b) FUNDING FOR EDUCATION AND ENROLLMENT

23 ACTIVITIES.—Section 1851 (42 U.S.C. 1395w–21) is

24 amended by adding at the end the following new sub25 section:
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1 ‘‘(j) FUNDING FOR BENEFICIARY EDUCATION AND

2 ENROLLMENT ACTIVITIES.—

3 ‘‘(1) SECRETARY’S ESTIMATE OF TOTAL

4 COSTS.—The Secretary shall annually estimate the

5 total cost for a fiscal year of carrying out this sec6 tion, section 4360 of the Omnibus Budget Reconcili7 ation Act of 1990 (relating to the health insurance

8 counseling and assistance program), and related ac9 tivities.

10 ‘‘(2) TOTAL AMOUNT AVAILABLE.—The total

11 amount available to the Secretary for a fiscal year

12 for the costs of the activities described in paragraph

13 (1) shall be equal to the lesser of—

14 ‘‘(A) the amount estimated for such fiscal

15 year under paragraph (1); or

16 ‘‘(B) for—

17 ‘‘(i) fiscal year 2001, $115,000,000;

18 and

19 ‘‘(ii) fiscal year 2002 and each subse20 quent fiscal year, the amount for the pre21 vious fiscal year, adjusted to account for

22 inflation, any change in the number of

23 beneficiaries under this title, and any other

24 relevant factors.
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1 ‘‘(3) COST-SHARING IN ENROLLMENT-RELATED

2 COSTS.—

3 ‘‘(A) AMOUNTS FROM MEDICARE+CHOICE

4 ORGANIZATIONS.—

5 ‘‘(i) IN GENERAL.—The Secretary is

6 authorized to charge a fee to each

7 Medicare+Choice organization with a con8 tract under this part that is equal to the

9 organization’s pro rata share (as deter10 mined by the Secretary) of the

11 Medicare+Choice portion (as defined in

12 clause (ii)) of the total amount available

13 under paragraph (2) for a fiscal year. Any

14 amounts collected shall be available with15 out further appropriation to the Secretary

16 for the costs of the activities described in

17 paragraph (1).

18 ‘‘(ii) MEDICARE+CHOICE PORTION

19 DEFINED.—For purposes of clause (i), the

20 term ‘Medicare+Choice portion’ means, for

21 a fiscal year, the ratio, as estimated by the

22 Secretary, of—

23 ‘‘(I) the average number of indi24 viduals enrolled in Medicare+Choice

25 plans during the fiscal year; to
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1 ‘‘(II) the average number of indi2 viduals entitled to benefits under part

3 A, and enrolled under part B, during

4 the fiscal year.

5 ‘‘(B) SECRETARY’S SHARE.—

6 ‘‘(i) AMOUNTS AVAILABLE FROM

7 TRUST FUNDS.—The Secretary’s share of

8 expenses shall be payable from funds in

9 the Federal Hospital Insurance Trust

10 Fund and the Federal Supplementary

11 Medical Insurance Trust Fund, in such

12 proportion as the Secretary shall deem to

13 be fair and equitable after taking into con14 sideration the expenses attributable to the

15 administration of this part with respect to

16 parts A and B. The Secretary shall make

17 such transfers of moneys between such

18 Trust Funds as may be appropriate to set19 tle accounts between the Trust Funds in

20 cases where expenses properly payable

21 from one such Trust Fund have been paid

22 from the other such Trust Fund.

23 ‘‘(ii) SECRETARY’S SHARE OF EX24 PENSES DEFINED.—For purposes of clause

25 (i), the term ‘Secretary’s share of ex-
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1 penses’ means, for a fiscal year, an amount

2 equal to—

3 ‘‘(I) the total amount available to

4 the Secretary under paragraph (2) for

5 the fiscal year; less

6 ‘‘(II) the amount collected under

7 subparagraph (A) for the fiscal

8 year.’’.

9 SEC. 622. SPECIAL MEDIGAP ENROLLMENT ANTIDISCRIMI10 NATION PROVISION FOR CERTAIN BENE11 FICIARIES.

12 (a) DISENROLLMENT WINDOW IN ACCORDANCE

13 WITH BENEFICIARY’S CIRCUMSTANCE.—Section

14 1882(s)(3) (42 U.S.C. 1395ss(s)(3)) is amended—

15 (1) in subparagraph (A), in the matter fol16 lowing clause (iii), by striking ‘‘, subject to subpara17 graph (E), seeks to enroll under the policy not later

18 than 63 days after the date of termination of enroll19 ment described in such subparagraph’’ and inserting

20 ‘‘seeks to enroll under the policy during the period

21 specified in subparagraph (E)’’; and

22 (2) by striking subparagraph (E) and inserting

23 the following new subparagraph:

24 ‘‘(E) For purposes of subparagraph (A), the time pe25 riod specified in this subparagraph is—
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1 ‘‘(i) in the case of an individual described in

2 subparagraph (B)(i), the period beginning on the

3 date the individual receives a notice of termination

4 or cessation of all supplemental health benefits (or,

5 if no such notice is received, notice that a claim has

6 been denied because of such a termination or ces7 sation) and ending on the date that is 63 days after

8 the applicable notice;

9 ‘‘(ii) in the case of an individual described in

10 clause (ii), (iii), (v), or (vi) of subparagraph (B)

11 whose enrollment is terminated involuntarily, the pe12 riod beginning on the date that the individual re13 ceives a notice of termination and ending on the

14 date that is 63 days after the date the applicable

15 coverage is terminated;

16 ‘‘(iii) in the case of an individual described in

17 subparagraph (B)(iv)(I), the period beginning on the

18 earlier of (I) the date that the individual receives a

19 notice of termination, a notice of the issuer’s bank20 ruptcy or insolvency, or other such similar notice, if

21 any, and (II) the date that the applicable coverage

22 is terminated, and ending on the date that is 63

23 days after the date the coverage is terminated;

24 ‘‘(iv) in the case of an individual described in

25 clause (ii), (iii), (iv)(II), (iv)(III), (v), or (vi) of sub-
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1 paragraph (B) who disenrolls voluntarily, the period

2 beginning on the date that is 60 days before the ef3 fective date of the disenrollment and ending on the

4 date that is 63 days after such effective date; and

5 ‘‘(v) in the case of an individual described in

6 subparagraph (B) but not described in the preceding

7 provisions of this subparagraph, the period begin8 ning on the effective date of the disenrollment and

9 ending on the date that is 63 days after such effec10 tive date.’’.

11 (b) EXTENDED MEDIGAP ACCESS FOR INTERRUPTED

12 TRIAL PERIODS.—Section 1882(s)(3) (42 U.S.C.

13 1395ss(s)(3)), as amended by subsection (a), is amended

14 by adding at the end the following new subparagraph:

15 ‘‘(F)(i) Subject to clause (ii), for purposes of this

16 paragraph—

17 ‘‘(I) in the case of an individual described in

18 subparagraph (B)(v) (or deemed to be so described,

19 pursuant to this subparagraph) whose enrollment

20 with an organization or provider described in sub21 clause (II) of such subparagraph is involuntarily ter22 minated within the first 12 months of such enroll23 ment, and who, without an intervening enrollment,

24 enrolls with another such organization or provider,

25 such subsequent enrollment shall be deemed to be an
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1 initial enrollment described in such subparagraph;

2 and

3 ‘‘(II) in the case of an individual described in

4 clause (vi) of subparagraph (B) (or deemed to be so

5 described, pursuant to this subparagraph) whose en6 rollment with a plan or in a program described in

7 such clause is involuntarily terminated within the

8 first 12 months of such enrollment, and who, with9 out an intervening enrollment, enrolls in another

10 such plan or program, such subsequent enrollment

11 shall be deemed to be an initial enrollment described

12 in such clause.

13 ‘‘(ii) For purposes of clauses (v) and (vi) of subpara14 graph (B), no enrollment of an individual with an organi15 zation or provider described in clause (v)(II), or with a

16 plan or in a program described in clause (vi), may be

17 deemed to be an initial enrollment under this clause after

18 the 2-year period beginning on the date on which the indi19 vidual first enrolled with such an organization, provider,

20 plan, or program.’’.

21 SEC. 623. RESTORING EFFECTIVE DATE OF ELECTIONS AND

22 CHANGES OF ELECTIONS OF

23 MEDICARE+CHOICE PLANS.

24 (a) OPEN ENROLLMENT.—Section 1851(f)(2) (42

25 U.S.C. 1395w–21(f)(2)) is amended by striking ‘‘, except
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1 that if such election or change is made after the 10th day

2 of any calendar month, then the election or change shall

3 not take effect until the first day of the second calendar

4 month following the date on which the election or change

5 is made’’.

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

7 this section shall apply to elections and changes of cov8 erage made on or after January 1, 2001.

9 SEC. 624. PERMITTING ESRD BENEFICIARIES TO ENROLL

10 IN ANOTHER MEDICARE+CHOICE PLAN IF

11 THE PLAN IN WHICH THEY ARE ENROLLED IS

12 TERMINATED.

13 (a) IN GENERAL.—Section 1851(a)(3)(B) (42 U.S.C.

14 1395w–21(a)(3)(B)) is amended by striking ‘‘except that’’

15 and all that follows and inserting the following: ‘‘except

16 that—

17 ‘‘(i) an individual who develops end18 stage renal disease while enrolled in a

19 Medicare+Choice plan may continue to be

20 enrolled in that plan; and

21 ‘‘(ii) in the case of such an individual

22 who is enrolled in a Medicare+Choice plan

23 under clause (i) (or subsequently under

24 this clause), if the enrollment is discon25 tinued under circumstances described in
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1 section 1851(e)(4)(A), then the individual

2 will be treated as a ‘Medicare+Choice eli3 gible individual’ for purposes of electing to

4 continue enrollment in another

5 Medicare+Choice plan.’’.

6 (b) EFFECTIVE DATE.—

7 (1) IN GENERAL.—The amendment made by

8 subsection (a) shall apply to terminations and

9 discontinuations occurring on or after the date of

10 enactment of this Act.

11 (2) APPLICATION TO PRIOR PLAN TERMI12 NATIONS.—Clause (ii) of section 1851(a)(3)(B) of

13 the Social Security Act (as inserted by subsection

14 (a)) also shall apply to individuals whose enrollment

15 in a Medicare+Choice plan was terminated or dis16 continued after December 31, 1997, and before the

17 date of enactment of this Act. In applying this para18 graph, such an individual shall be treated, for pur19 poses of part C of title XVIII of the Social Security

20 Act, as having discontinued enrollment in such a

21 plan as of the date of enactment of this Act.
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1 SEC. 625. ELECTION OF UNIFORM LOCAL COVERAGE POL2 ICY FOR MEDICARE+CHOICE PLAN COVERING

3 MULTIPLE LOCALITIES.

4 Section 1852(a)(2) (42 U.S.C. 1395w–22(a)(2)) is

5 amended by adding at the end the following new subpara6 graph:

7 ‘‘(C) ELECTION OF UNIFORM COVERAGE

8 POLICY.—With respect to each item or service

9 furnished by a Medicare+Choice organization

10 that offers a Medicare+Choice plan in a geo11 graphic area that includes at least 15 States

12 and in which more than 1 local coverage policy

13 is applied with respect to different parts of the

14 area, the organization may elect to have the

15 local coverage policy for the part of the area

16 that affords the broadest coverage to

17 Medicare+Choice enrollees (as determined by

18 the Secretary) with respect to such item or

19 service apply with respect to all

20 Medicare+Choice enrollees enrolled in the

21 plan.’’.
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1 Subtitle C—Other Managed Care

2 Reforms

3 SEC. 631. REVISED TERMS AND CONDITIONS FOR EXTEN4 SION OF MEDICARE COMMUNITY NURSING

5 ORGANIZATION (CNO) DEMONSTRATION

6 PROJECT.

7 (a) IN GENERAL.—Section 532 of BBRA (42 U.S.C.

8 1395mm note) is amended—

9 (1) in subsection (a), by striking the second

10 sentence; and

11 (2) by striking subsection (b) and inserting the

12 following new subsections:

13 ‘‘(b) TERMS AND CONDITIONS.—

14 ‘‘(1) JANUARY THROUGH SEPTEMBER 2000.—

15 For the 9-month period beginning with January

16 2000, any such demonstration project shall be con17 ducted under the same terms and conditions as ap18 plied to such project during 1999.

19 ‘‘(2) OCTOBER 2000 THROUGH DECEMBER

20 2001.—For the 15-month period beginning with Oc21 tober 2000, any such demonstration project shall be

22 conducted under the same terms and conditions as

23 applied to such project during 1999, except that the

24 following modifications shall apply:
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1 ‘‘(A) BASIC CAPITATION RATE.—The basic

2 capitation rate paid for services covered under

3 the project (other than case management serv4 ices) per enrollee per month shall be the basic

5 capitation rate paid for such services for 1999,

6 reduced by 10 percent in the case of the dem7 onstration sites located in Arizona, Minnesota,

8 and Illinois, and 15 percent for the demonstra9 tion site located in New York.

10 ‘‘(B) TARGETED CASE MANAGEMENT

11 FEE.—A case management fee shall be paid

12 only for enrollees who are classified as ‘mod13 erate’ or ‘at risk’ through a baseline health as14 sessment (as required for Medicare+Choice

15 plans under section 1852(e) of the Social Secu16 rity Act (42 U.S.C. 1395ww–22(e)).

17 ‘‘(C) GREATER UNIFORMITY IN CLINICAL

18 FEATURES AMONG SITES.—The project shall

19 implement for each site—

20 ‘‘(i) protocols for periodic telephonic

21 contact with enrollees based on—

22 ‘‘(I) the results of such standard23 ized written health assessment; and

24 ‘‘(II) the application of appro25 priate care planning approaches;
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1 ‘‘(ii) disease management programs

2 for targeted diseases (such as congestive

3 heart failure, arthritis, diabetes, and hy4 pertension) that are highly prevalent in the

5 enrolled populations;

6 ‘‘(iii) systems and protocols to track

7 enrollees through hospitalizations, includ8 ing preadmission planning, concurrent

9 management during inpatient hospital

10 stays, and post-discharge assessment, plan11 ning, and followup; and

12 ‘‘(iv) standardized patient educational

13 materials for specified diseases and health

14 conditions.

15 ‘‘(D) QUALITY IMPROVEMENT.—The

16 project shall implement at each site once during

17 the 15-month period—

18 ‘‘(i) surveys on enrollee satisfaction;

19 and

20 ‘‘(ii) reports on specified quality indi21 cators for the enrolled population.

22 ‘‘(c) EVALUATION.—

23 ‘‘(1) PRELIMINARY REPORT.—Not later than

24 July 1, 2001, the Secretary of Health and Human

25 Services shall submit to the Committees on Ways
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1 and Means and Commerce of the House of Rep2 resentatives and the Committee on Finance of the

3 Senate a preliminary report that—

4 ‘‘(A) evaluates such demonstration projects

5 for the period beginning July 1, 1997, and end6 ing December 31, 1999, on a site-specific basis

7 with respect to the impact on per beneficiary

8 spending, specific health utilization measures,

9 and enrollee satisfaction; and

10 ‘‘(B) includes a similar evaluation of such

11 projects for the portion of the extension period

12 that occurs after September 30, 2000.

13 ‘‘(2) FINAL REPORT.—The Secretary shall sub14 mit a final report to such Committees on such dem15 onstration projects not later than July 1, 2002.

16 Such report shall include the same elements as the

17 preliminary report required by paragraph (1), but

18 for the period after December 31, 1999.

19 ‘‘(3) METHODOLOGY FOR SPENDING COMPARI20 SONS.—Any evaluation of the impact of the dem21 onstration projects on per beneficiary spending in22 cluded in such reports shall be based on a compari23 son of—

24 ‘‘(A) data for all individuals who—
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1 ‘‘(i) were enrolled in such demonstra2 tion projects as of the first day of the pe3 riod under evaluation; and

4 ‘‘(ii) were enrolled for a minimum of

5 6 months thereafter; with

6 ‘‘(B) data for a matched sample of individ7 uals who are enrolled under part B of title

8 XVIII of the Social Security Act (42 U.S.C.

9 1395j et seq.) and who are not enrolled in such

10 a project, in a Medicare+Choice plan under

11 part C of such title (42 U.S.C. 1395w–21 et

12 seq.), a plan offered by an eligible organization

13 under section 1876 of such Act (42 U.S.C.

14 1395mm), or a health care prepayment plan

15 under section 1833(a)(1)(A) of such Act (42

16 U.S.C. 1395l(a)(1)(A)).’’.

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

18 subsection (a) shall be effective as if included in the enact19 ment of section 532 of BBRA (42 U.S.C. 1395mm note).

20 SEC. 632. SERVICE AREA EXPANSION FOR MEDICARE COST

21 CONTRACTS DURING TRANSITION PERIOD.

22 Section 1876(h)(5) (42 U.S.C. 1395mm(h)(5)) is

23 amended—

24 (1) by redesignating subparagraph (B) as sub25 paragraph (C); and
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1 (2) by inserting after subparagraph (A), the fol2 lowing new subparagraph:

3 ‘‘(B) Subject to subparagraph (C), the Secretary

4 shall approve an application for a modification to a rea5 sonable cost contract under this section in order to expand

6 the service area of such contract if—

7 ‘‘(i) such application is submitted to the Sec8 retary on or before September 1, 2003; and

9 ‘‘(ii) the Secretary determines that the organi10 zation with the contract continues to meet the re11 quirements applicable to such organizations and con12 tracts under this section.’’.

13 TITLE VII—MEDICAID

14 SEC. 701. NEW PROSPECTIVE PAYMENT SYSTEM FOR FED15 ERALLY-QUALIFIED HEALTH CENTERS AND

16 RURAL HEALTH CLINICS.

17 (a) IN GENERAL.—Section 1902(a) (42 U.S.C.

18 1396a(a)) is amended—

19 (1) in paragraph (13)—

20 (A) in subparagraph (A), by adding ‘‘and’’

21 at the end;

22 (B) in subparagraph (B), by striking

23 ‘‘and’’ at the end; and

24 (C) by striking subparagraph (C); and
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1 (2) by inserting after paragraph (14) the fol2 lowing new paragraph:

3 ‘‘(15) provide for payment for services de4 scribed in subparagraph (B) or (C) of section

5 1905(a)(2) under the plan in accordance with sub6 section (aa);’’.

7 (b) NEW PROSPECTIVE PAYMENT SYSTEM.—Section

8 1902 (42 U.S.C. 1396a) is amended by adding at the end

9 the following:

10 ‘‘(aa) PAYMENT FOR SERVICES PROVIDED BY FED11 ERALLY-QUALIFIED HEALTH CENTERS AND RURAL

12 HEALTH CLINICS.—

13 ‘‘(1) IN GENERAL.—Beginning with fiscal year

14 2001 and each succeeding fiscal year, the State plan

15 shall provide for payment for services described in

16 section 1905(a)(2)(C) furnished by a Federally17 qualified health center and services described in sec18 tion 1905(a)(2)(B) furnished by a rural health clinic

19 in accordance with the provisions of this subsection.

20 ‘‘(2) FISCAL YEAR 2001.—Subject to paragraph

21 (4), for services furnished during fiscal year 2001,

22 the State plan shall provide for payment for such

23 services in an amount (calculated on a per visit

24 basis) that is equal to 100 percent of the average of

25 the costs of the center or clinic of furnishing such
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1 services during fiscal years 1999 and 2000 which

2 are reasonable and related to the cost of furnishing

3 such services, or based on such other tests of reason4 ableness as the Secretary prescribes in regulations

5 under section 1833(a)(3), or, in the case of services

6 to which such regulations do not apply, the same

7 methodology used under section 1833(a)(3), ad8 justed to take into account any increase or decrease

9 in the scope of such services furnished by the center

10 or clinic during fiscal year 2001.

11 ‘‘(3) FISCAL YEAR 2002 AND SUCCEEDING FIS12 CAL YEARS.—Subject to paragraph (4), for services

13 furnished during fiscal year 2002 or a succeeding

14 fiscal year, the State plan shall provide for payment

15 for such services in an amount (calculated on a per

16 visit basis) that is equal to the amount calculated for

17 such services under this subsection for the preceding

18 fiscal year—

19 ‘‘(A) increased by the percentage increase

20 in the MEI (as defined in section 1842(i)(3))

21 applicable to primary care services (as defined

22 in section 1842(i)(4)) for that fiscal year; and

23 ‘‘(B) adjusted to take into account any in24 crease or decrease in the scope of such services
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1 furnished by the center or clinic during that fis2 cal year.

3 ‘‘(4) ESTABLISHMENT OF INITIAL YEAR PAY4 MENT AMOUNT FOR NEW CENTERS OR CLINICS.—In

5 any case in which an entity first qualifies as a Fed6 erally-qualified health center or rural health clinic

7 after fiscal year 2000, the State plan shall provide

8 for payment for services described in section

9 1905(a)(2)(C) furnished by the center or services

10 described in section 1905(a)(2)(B) furnished by the

11 clinic in the first fiscal year in which the center or

12 clinic so qualifies in an amount (calculated on a per

13 visit basis) that is equal to 100 percent of the costs

14 of furnishing such services during such fiscal year

15 based on the rates established under this subsection

16 for the fiscal year for other such centers or clinics

17 located in the same or adjacent area with a similar

18 case load or, in the absence of such a center or clin19 ic, in accordance with the regulations and method20 ology referred to in paragraph (2) or based on such

21 other tests of reasonableness as the Secretary may

22 specify. For each fiscal year following the fiscal year

23 in which the entity first qualifies as a Federally24 qualified health center or rural health clinic, the
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1 State plan shall provide for the payment amount to

2 be calculated in accordance with paragraph (3).

3 ‘‘(5) ADMINISTRATION IN THE CASE OF MAN4 AGED CARE.—

5 ‘‘(A) IN GENERAL.—In the case of services

6 furnished by a Federally-qualified health center

7 or rural health clinic pursuant to a contract be8 tween the center or clinic and a managed care

9 entity (as defined in section 1932(a)(1)(B)), the

10 State plan shall provide for payment to the cen11 ter or clinic by the State of a supplemental pay12 ment equal to the amount (if any) by which the

13 amount determined under paragraphs (2), (3),

14 and (4) of this subsection exceeds the amount

15 of the payments provided under the contract.

16 ‘‘(B) PAYMENT SCHEDULE.—The supple17 mental payment required under subparagraph

18 (A) shall be made pursuant to a payment

19 schedule agreed to by the State and the Feder20 ally-qualified health center or rural health clin21 ic.

22 ‘‘(6) ALTERNATIVE PAYMENT METHODOLO23 GIES.—Notwithstanding any other provision of this

24 section, the State plan may provide for payment in

25 any fiscal year to a Federally-qualified health center
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1 for services described in section 1905(a)(2)(C) or to

2 a rural health clinic for services described in section

3 1905(a)(2)(B) in an amount which is determined

4 under an alternative payment methodology that—

5 ‘‘(A) is agreed to by the State and the cen6 ter or clinic; and

7 ‘‘(B) results in payment to the center or

8 clinic of an amount which is at least equal to

9 the amount otherwise required to be paid to the

10 center or clinic under this section.’’.

11 (c) CONFORMING AMENDMENTS.—

12 (1) Section 4712 of the BBA (Public Law 105–

13 33; 111 Stat. 508) is amended by striking sub14 section (c).

15 (2) Section 1915(b) (42 U.S.C. 1396n(b)) is

16 amended by striking ‘‘1902(a)(13)(E)’’ and insert17 ing ‘‘1902(a)(15), 1902(aa),’’.

18 (d) GAO STUDY OF FUTURE REBASING.—The

19 Comptroller General of the United States shall provide for

20 a study on the need for, and how to, rebase or refine costs

21 for making payment under the medicaid program for serv22 ices provided by Federally-qualified health centers and

23 rural health centers (as provided under the amendments

24 made by this section). The Comptroller General shall pro25 vide for submittal of a report on such study to Congress
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1 by not later than 4 years after the date of the enactment

2 of this Act.

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

4 this section take effect on October 1, 2000, and apply to

5 services furnished on or after such date.

6 SEC. 702. MEDICAID DSH ALLOTMENTS.

7 (a) ONE-YEAR FREEZE IN MEDICAID DSH ALLOT8 MENTS.—Section 1923(f)(2) (42 U.S.C. 1396r–4(f)(2)) is

9 amended—

10 (1) in the matter preceding the table, by insert11 ing ‘‘(and the DSH allotment for a State for fiscal

12 year 2001 is the same as the DSH allotment for the

13 State for fiscal year 2000, as determined under the

14 following table)’’ after ‘‘2002’’; and

15 (2) in the table—

16 (A) by striking the column in the table re17 lating to FY 01 (fiscal year 2001); and

18 (B) by striking the heading in such table

19 relating to FY 00 (fiscal year 2000) and insert20 ing ‘‘FYS 00, 01’’.

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

22 this section take effect on October 1, 2000.
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1 SEC. 703. PERMANENT EXTENSION OF PAYMENT OF MEDI2 CARE PART B PREMIUMS FOR QUALIFIED

3 MEDICARE BENEFICIARIES WITH INCOME UP

4 TO 135 PERCENT OF POVERTY.

5 (a) IN GENERAL.—Section 1902(a)(10)(E)(iv) (42

6 U.S.C. 1396a(a)(10)(E)(iv)) is amended—

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

8 striking ‘‘(but only for premiums payable with re9 spect to months during the period beginning with

10 January 1998, and ending with December 2002)’’;

11 (2) in subclause (I), by inserting ‘‘only for pre12 miums payable with respect to months beginning

13 with January 1998,’’ after ‘‘(I)’’; and

14 (3) in subclause (II), by inserting ‘‘only for pre15 miums payable with respect to months during the

16 period beginning with January 1998, and ending

17 with December 2002,’’ after ‘‘(II)’’.

18 (b) CONFORMING AMENDMENT.—Section 1933(c)(1)

19 (42 U.S.C. 1396u–3(c)(1)) is amended—

20 (1) in subparagraph (D), by striking ‘‘and’’ at

21 the end;

22 (2) in subparagraph (E), by striking the period

23 and inserting ‘‘; and’’; and

24 (3) by adding at the end the following new sub25 paragraph:
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1 ‘‘(F) fiscal year 2003 and each fiscal year

2 thereafter, the amount specified under this

3 paragraph for the preceding fiscal year in4 creased by the percentage increase (if any) in

5 the medical care expenditure category of the

6 Consumer Price Index for All Urban Con7 sumers (United States city average).’’.

8 SEC. 704. STREAMLINED APPROVAL OF CONTINUED STATE9 WIDE SECTION 1115 MEDICAID WAIVERS.

10 (a) IN GENERAL.—Section 1115 (42 U.S.C. 1315)

11 is amended by adding at the end the following new sub12 section:

13 ‘‘(f) An application by the chief executive officer of

14 a State for an extension of a waiver project the State is

15 operating under an extension under subsection (e) (in this

16 subsection referred to as the ‘waiver project’) shall be sub17 mitted and approved or disapproved in accordance with

18 the following:

19 ‘‘(1) The application for an extension of the

20 waiver project shall be submitted to the Secretary at

21 least 120 days prior to the expiration of the current

22 period of the waiver project.

23 ‘‘(2) Not later than 45 days after the date such

24 application is received by the Secretary, the Sec25 retary shall notify the State if the Secretary intends
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1 to review the existing terms and conditions of the

2 waiver project. A failure to provide such notification

3 shall be deemed to be an approval of the application.

4 ‘‘(3) Not later than 45 days after the date of

5 a notification made in accordance with paragraph

6 (2), the Secretary shall inform the State of proposed

7 changes in the terms and conditions of the waiver

8 project. A failure to provide such information shall

9 be deemed to be an approval of the application.

10 ‘‘(4) During the 30-day period that begins on

11 the date information described in paragraph (3) is

12 provided to a State, the Secretary shall negotiate re13 vised terms and conditions of the waiver project with

14 the State.

15 ‘‘(5)(A) Not later than 120 days after the date

16 an application for an extension of the waiver project

17 is submitted to the Secretary (or such later date

18 agreed to by the chief executive officer of the State),

19 the Secretary shall—

20 ‘‘(i) approve the application subject to such

21 modifications in the terms and conditions—

22 ‘‘(I) as have been agreed to by the

23 Secretary and the State; or

24 ‘‘(II) in the absence of such agree25 ment, as are determined by the Secretary
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1 to be reasonable consistent with the overall

2 objectives of the waiver project; or

3 ‘‘(ii) disapprove the application.

4 ‘‘(B) A failure by the Secretary to approve or

5 disapprove an application submitted under this sub6 section in accordance with the requirements of sub7 paragraph (A) shall be deemed to be an approval of

8 the application subject to such modifications in the

9 terms and conditions as have been agreed to (if any)

10 by the Secretary and the State.

11 ‘‘(6) An approval of an application for an exten12 sion of a waiver project under this subsection shall

13 be for a period requested by the State, not to exceed

14 3 years.

15 ‘‘(7) An extension of a waiver project under this

16 subsection shall be subject to the final reporting and

17 evaluation requirements of paragraphs (4) and (5)

18 of subsection (e).’’.

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

20 subsection (a) applies to requests for extensions of dem21 onstration projects pending or submitted on or after the

22 date of enactment of this Act.

23 SEC. 705. ALASKA FMAP.

24 (a) IN GENERAL.—The first sentence of section

25 1905(b) (42 U.S.C. 1396d(b)) is amended—
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1 (1) by striking ‘‘and (3)’’ and inserting ‘‘(3)’’;

2 and

3 (2) by striking the period and inserting ‘‘, and

4 (4) only with respect to each of fiscal years 2001

5 through 2005, for purposes of this title and title

6 XXI, the State percentage used to determine the

7 Federal medical assistance percentage for Alaska

8 shall be that percentage which bears the same ratio

9 to 45 percent as the square of the adjusted per cap10 ita income of Alaska (determined by dividing the

11 State’s 3-year average per capita income by 1.05)

12 bears to the square of the per capita income of the

13 50 States.’’.

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

15 subsection (a) take effect October 1, 2000.

16 TITLE VIII—STATE CHILDREN’S

17 HEALTH INSURANCE PRO18 GRAM (SCHIP)

19 SEC. 801. SPECIAL RULE FOR REDISTRIBUTION AND AVAIL20 ABILITY OF UNUSED FISCAL YEAR 1998 AND

21 1999 SCHIP ALLOTMENTS.

22 (a) CHANGE IN RULES FOR REDISTRIBUTION AND

23 RETENTION OF UNUSED SCHIP ALLOTMENTS FOR FIS24 CAL YEARS 1998 AND 1999.—Section 2104 (42 U.S.C.
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1 1397dd) is amended by adding at the end the following

2 new subsection:

3 ‘‘(g) RULE FOR REDISTRIBUTION AND EXTENDED

4 AVAILABILITY OF FISCAL YEARS 1998 AND 1999 ALLOT5 MENTS.—

6 ‘‘(1) AMOUNT REDISTRIBUTED.—

7 ‘‘(A) IN GENERAL.—In the case of a State

8 that expends all of its allotment under sub9 section (b) or (c) for fiscal year 1998 by the

10 end of fiscal year 2000, or for fiscal year 1999

11 by the end of fiscal year 2001, the Secretary

12 shall redistribute to the State under subsection

13 (f) (from the fiscal year 1998 or 1999 allot14 ments of other States, respectively, as deter15 mined by the application of paragraphs (2) and

16 (3) with respect to the respective fiscal year))

17 the following amount:

18 ‘‘(i) STATE.—In the case of 1 of the

19 50 States or the District of Columbia, with

20 respect to—

21 ‘‘(I) the fiscal year 1998 allot22 ment, the amount by which the

23 State’s expenditures under this title in

24 fiscal years 1998, 1999, and 2000 ex-
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1 ceed the State’s allotment for fiscal

2 year 1998 under subsection (b); or

3 ‘‘(II) the fiscal year 1999 allot4 ment, the amount by which the

5 State’s expenditures under this title in

6 fiscal years 1999, 2000, and 2001 ex7 ceed the State’s allotment for fiscal

8 year 1999 under subsection (b).

9 ‘‘(ii) TERRITORY.—In the case of a

10 commonwealth or territory described in

11 subsection (c)(3), an amount that bears

12 the same ratio to 1.05 percent of the total

13 amount described in paragraph (2)(B)(i)(I)

14 as the ratio of the commonwealth’s or ter15 ritory’s fiscal year 1998 or 1999 allotment

16 under subsection (c) (as the case may be)

17 bears to the total of all such allotments for

18 such fiscal year under such subsection.

19 ‘‘(B) EXPENDITURE RULES.—An amount

20 redistributed to a State under this paragraph

21 with respect to fiscal year 1998 or 1999—

22 ‘‘(i) shall not be included in the deter23 mination of the State’s allotment for any

24 fiscal year under this section;
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1 ‘‘(ii) notwithstanding subsection (e),

2 shall remain available for expenditure by

3 the State through the end of fiscal year

4 2002; and

5 ‘‘(iii) shall be counted as being ex6 pended with respect to a fiscal year allot7 ment in accordance with applicable regula8 tions of the Secretary.

9 ‘‘(2) EXTENSION OF AVAILABILITY OF PORTION

10 OF UNEXPENDED FISCAL YEARS 1998 AND 1999 AL11 LOTMENTS.—

12 ‘‘(A) IN GENERAL.—Notwithstanding sub13 section (e):

14 ‘‘(i) FISCAL YEAR 1998 ALLOTMENT.—

15 Of the amounts allotted to a State pursu16 ant to this section for fiscal year 1998 that

17 were not expended by the State by the end

18 of fiscal year 2000, the amount specified in

19 subparagraph (B) for fiscal year 1998 for

20 such State shall remain available for ex21 penditure by the State through the end of

22 fiscal year 2002.

23 ‘‘(ii) FISCAL YEAR 1999 ALLOT24 MENT.—Of the amounts allotted to a State

25 pursuant to this subsection for fiscal year
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1 1999 that were not expended by the State

2 by the end of fiscal year 2001, the amount

3 specified in subparagraph (B) for fiscal

4 year 1999 for such State shall remain

5 available for expenditure by the State

6 through the end of fiscal year 2002.

7 ‘‘(B) AMOUNT REMAINING AVAILABLE FOR

8 EXPENDITURE.—The amount specified in this

9 subparagraph for a State for a fiscal year is

10 equal to—

11 ‘‘(i) the amount by which (I) the total

12 amount available for redistribution under

13 subsection (f) from the allotments for that

14 fiscal year, exceeds (II) the total amounts

15 redistributed under paragraph (1) for that

16 fiscal year; multiplied by

17 ‘‘(ii) the ratio of the amount of such

18 State’s unexpended allotment for that fis19 cal year to the total amount described in

20 clause (i)(I) for that fiscal year.

21 ‘‘(C) USE OF UP TO 10 PERCENT OF RE22 TAINED 1998 ALLOTMENTS FOR OUTREACH AC23 TIVITIES.—Notwithstanding section

24 2105(c)(2)(A), with respect to any State de25 scribed in subparagraph (A)(i), the State may
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1 use up to 10 percent of the amount specified

2 in subparagraph (B) for fiscal year 1998 for ex3 penditures for outreach activities approved by

4 the Secretary.

5 ‘‘(3) DETERMINATION OF AMOUNTS.—For pur6 poses of calculating the amounts described in para7 graphs (1) and (2) relating to the allotment for fis8 cal year 1998 or fiscal year 1999, the Secretary

9 shall use the amounts reported by the States not

10 later than November 30, 2000, or November 30,

11 2001, respectively, on HCFA Form 64 or HCFA

12 Form 21, as approved by the Secretary.’’.

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

14 this section shall take effect as if included in the enact15 ment of section 4901 of BBA (111 Stat. 552).

16 SEC. 802. PRESUMPTIVE ELIGIBILITY UNDER SCHIP.

17 (a) APPLICATION UNDER SCHIP.—Section

18 2107(e)(1) (42 U.S.C. 1397gg(e)(1)) is amended by add19 ing at the end the following new subparagraph:

20 ‘‘(D) Section 1920A (relating to presump21 tive eligibility).’’.

22 (b) TECHNICAL AMENDMENTS.—Section 1920A (42

23 U.S.C. 1396r–1a) is amended—
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1 (1) in subsection (b)(3)(A)(ii), by striking

2 ‘‘paragraph (1)(A)’’ and inserting ‘‘paragraph (2)’’;

3 and

4 (2) in subsection (c)(2), in the matter preceding

5 subparagraph (A), by striking ‘‘subsection

6 (b)(1)(A)’’ and inserting ‘‘subsection (b)(2)’’.

7 (c) EFFECTIVE DATE.—

8 (1) IN GENERAL.—The amendment made by

9 subsection (a) takes effect October 1, 2000, and ap10 plies to allotments under title XXI of the Social Se11 curity Act (42 U.S.C. 1397aa et seq.) for fiscal year

12 2001 and each succeeding fiscal year thereafter.

13 (2) TECHNICAL AMENDMENTS.—The amend14 ments made by subsection (b) take effect as if in15 cluded in the enactment of section 4912 of BBA

16 (111 Stat. 571).

17 SEC. 803. AUTHORITY TO PAY MEDICAID EXPANSION SCHIP

18 COSTS FROM TITLE XXI APPROPRIATION.

19 (a) AUTHORITY TO PAY MEDICAID EXPANSION

20 SCHIP COSTS FROM TITLE XXI APPROPRIATION.—Sec21 tion 2105(a) (42 U.S.C. 1397ee(a)) is amended—

22 (1) by redesignating subparagraphs (A) through

23 (D) of paragraph (2) as clauses (i) through (iv), re24 spectively, and indenting appropriately;
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1 (2) by redesignating paragraph (1) as subpara2 graph (B), and indenting appropriately;

3 (3) by redesignating paragraph (2) as subpara4 graph (C), and indenting appropriately;

5 (4) by striking ‘‘(a) IN GENERAL.—’’ and the

6 remainder of the text that precedes subparagraph

7 (B), as so redesignated, and inserting the following:

8 ‘‘(a) PAYMENTS.—

9 ‘‘(1) IN GENERAL.—Subject to the succeeding

10 provisions of this section, the Secretary shall pay to

11 each State with a plan approved under this title,

12 from its allotment under section 2104, an amount

13 for each quarter equal to the enhanced FMAP of ex14 penditures in the quarter—

15 ‘‘(A) for child health assistance under the

16 plan for targeted low-income children in the

17 form of providing medical assistance for which

18 payment is made on the basis of an enhanced

19 FMAP under the fourth sentence of section

20 1905(b);’’; and

21 (5) by adding after subparagraph (C), as so re22 designated, the following new paragraph:

23 ‘‘(2) ORDER OF PAYMENTS.—Payments under

24 paragraph (1) from a State’s allotment shall be

25 made in the following order:
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1 ‘‘(A) First, for expenditures for items de2 scribed in paragraph (1)(A).

3 ‘‘(B) Second, for expenditures for items

4 described in paragraph (1)(B).

5 ‘‘(C) Third, for expenditures for items de6 scribed in paragraph (1)(C).’’.

7 (b) ELIMINATION OF REQUIREMENT TO REDUCE

8 TITLE XXI ALLOTMENT BY MEDICAID EXPANSION

9 SCHIP COSTS.—Section 2104 (42 U.S.C. 1397dd) is

10 amended by striking subsection (d).

11 (c) AUTHORITY TO TRANSFER TITLE XXI APPRO12 PRIATIONS TO TITLE XIX APPROPRIATION ACCOUNT AS

13 REIMBURSEMENT FOR MEDICAID EXPENDITURES FOR

14 MEDICAID EXPANSION SCHIP SERVICES.—Notwith15 standing any other provision of law, all amounts appro16 priated under title XXI and allotted to a State pursuant

17 to subsection (b) or (c) of section 2104 of the Social Secu18 rity Act (42 U.S.C. 1397dd) for fiscal years 1998 through

19 2000 (including any amounts that, but for this provision,

20 would be considered to have expired) and not expended

21 in providing child health assistance or related services for

22 which payment may be made pursuant to subparagraph

23 (B) or (C) of section 2105(a)(1) of such Act (42 U.S.C.

24 1397ee(a)(1)) (as amended by subsection (a)), shall be

25 available to reimburse the Grants to States for Medicaid
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1 account in an amount equal to the total payments made

2 to such State under section 1903(a) of such Act (42

3 U.S.C. 1396b(a)) for expenditures in such years for med4 ical assistance described in subparagraph (A) of section

5 2105(a)(1) of such Act (42 U.S.C. 1397ee(a)(1)) (as so

6 amended).

7 (d) CONFORMING AMENDMENTS.—

8 (1) Section 1905(b) (42 U.S.C. 1396d(b)) is

9 amended in the fourth sentence by striking ‘‘the

10 State’s allotment under section 2104 (not taking

11 into account reductions under section 2104(d)(2))

12 for the fiscal year reduced by the amount of any

13 payments made under section 2105 to the State

14 from such allotment for such fiscal year’’ and insert15 ing ‘‘the State’s available allotment under section

16 2104’’.

17 (2) Section 1905(u)(1)(B) (42 U.S.C.

18 1396d(u)(1)(B)) is amended by striking ‘‘and sec19 tion 2104(d)’’.

20 (3) Section 2104 (42 U.S.C. 1397dd), as

21 amended by subsection (b), is further amended—

22 (A) in subsection (b)(1), by striking ‘‘and

23 subsection (d)’’; and

24 (B) in subsection (c)(1), by striking ‘‘sub25 ject to subsection (d),’’.
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1 (4) Section 2105(c) (42 U.S.C. 1397ee(c)) is

2 amended—

3 (A) in paragraph (2)(A), by striking all

4 that follows ‘‘Except as provided in this para5 graph,’’ and inserting ‘‘the amount of payment

6 that may be made under subsection (a) for a

7 fiscal year for expenditures for items described

8 in paragraph (1)(C) of such subsection shall

9 not exceed 10 percent of the total amount of ex10 penditures for which payment is made under

11 subparagraphs (A), (B), and (C) of paragraph

12 (1) of such subsection.’’;

13 (B) in paragraph (2)(B), by striking ‘‘de14 scribed in subsection (a)(2)’’ and inserting ‘‘de15 scribed in subsection (a)(1)(C)’’; and

16 (C) in paragraph (6)(B), by striking ‘‘Ex17 cept as otherwise provided by law,’’ and insert18 ing ‘‘Except as provided in subsection (a)(1)(A)

19 or any other provision of law,’’.

20 (5) Section 2110(a) (42 U.S.C. 1397jj(a)) is

21 amended by striking ‘‘section 2105(a)(2)(A)’’ and

22 inserting ‘‘section 2105(a)(1)(C)(i)’’.

23 (e) TECHNICAL AMENDMENT.—Section

24 2105(d)(2)(B)(ii) (42 U.S.C. 1397ee(d)(2)(B)(ii)) is

25 amended by striking ‘‘enhanced FMAP under section
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1 1905(u)’’ and inserting ‘‘enhanced FMAP under the

2 fourth sentence of section 1905(b)’’.

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

4 this section shall be effective as if included in the enact5 ment of section 4901 of the BBA (111 Stat. 552).

6 TITLE IX—OTHER PROVISIONS

7 SEC. 901. INCREASE IN AUTHORIZATION OF APPROPRIA8 TIONS FOR THE MATERNAL AND CHILD

9 HEALTH SERVICES BLOCK GRANT.

10 (a) IN GENERAL.—Section 501(a) (42 U.S.C.

11 701(a)) is amended in the matter preceding paragraph (1)

12 by striking ‘‘$705,000,000 for fiscal year 1994’’ and in13 serting ‘‘$1,000,000,000 for fiscal year 2001’’.

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

15 subsection (a) takes effect on October 1, 2000.

16 SEC. 902. INCREASE IN APPROPRIATIONS FOR SPECIAL DI17 ABETES PROGRAMS FOR CHILDREN WITH

18 TYPE I DIABETES AND INDIANS.

19 (a) SPECIAL DIABETES PROGRAMS FOR CHILDREN

20 WITH TYPE I DIABETES.—Section 330B(b) of the Public

21 Health Service Act (42 U.S.C. 254c–2(b)) is amended—

22 (1) by striking ‘‘Notwithstanding’’ and insert23 ing the following:

24 ‘‘(1) TRANSFERRED FUNDS.—Notwith25 standing’’; and
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1 (2) by adding at the end the following:

2 ‘‘(2) APPROPRIATIONS.—For the purpose of

3 making grants under this section, there is appro4 priated, out of any funds in the Treasury not other5 wise appropriated $70,000,000 for each of fiscal

6 years 2001 and 2002 (which shall be combined with

7 amounts transferred under paragraph (1) for each

8 such fiscal years).’’.

9 (b) SPECIAL DIABETES PROGRAMS FOR INDIANS.—

10 Section 330C(c) of the Public Health Service Act (42

11 U.S.C. 254c–3(c)) is amended—

12 (1) by striking ‘‘Notwithstanding’’ and insert13 ing the following:

14 ‘‘(1) TRANSFERRED FUNDS.—Notwith15 standing’’; and

16 (2) by adding at the end the following:

17 ‘‘(2) APPROPRIATIONS.—For the purpose of

18 making grants under this section, there is appro19 priated, out of any money in the Treasury not other20 wise appropriated $70,000,000 for each of fiscal

21 years 2001 and 2002 (which shall be combined with

22 amounts transferred under paragraph (1) for each

23 such fiscal years).’’.

Æ