II 

Calendar No. 772 

110TH CONGRESS 

2D SESSION S. 3101 

To amend titles XVIII and XIX of the Social Security Act to extend expiring 

provisions under the Medicare program, to improve beneficiary access 

to preventive and mental health services, to enhance low-income benefit 

programs, and to maintain access to care in rural areas, including pharmacy access, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 6, 2008 

Mr. BAUCUS (for himself, Ms. SNOWE, Mr. ROCKEFELLER, and Mr. SMITH) 

ordered introduced the following bill; which was read the first time 

JUNE 9, 2008 

Read the second time and placed on the calendar 

A BILL 

To amend titles XVIII and XIX of the Social Security Act 

to extend expiring provisions under the Medicare program, to improve beneficiary access to preventive and 

mental health services, to enhance low-income benefit 

programs, and to maintain access to care in rural areas, 

including pharmacy access, 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; TABLE OF CONTENTS. 

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

3 ‘‘Medicare Improvements for Patients and Providers Act 

4 of 2008’’. 

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

6 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—MEDICARE 

Subtitle A—Beneficiary Improvements 

PART I—PREVENTION, MENTAL HEALTH, AND MARKETING

Sec. 101. Improvements to coverage of preventive services. 

Sec. 102. Elimination of discriminatory copayment rates for Medicare outpatient psychiatric services. 

Sec. 103. Prohibitions and limitations on certain sales and marketing activities 

under Medicare Advantage plans and prescription drug plans. 

Sec. 104. Improvements to the Medigap program. 

PART II—LOW-INCOME PROGRAMS

Sec. 111. Extension of qualifying individual (QI) program. 

Sec. 112. Application of full LIS subsidy assets test under Medicare Savings 

Program. 

Sec. 113. Eliminating barriers to enrollment. 

Sec. 114. Elimination of Medicare part D late enrollment penalties paid by subsidy eligible individuals. 

Sec. 115. Eliminating application of estate recovery. 

Sec. 116. Exemptions from income and resources for determination of eligibility 

for low-income subsidy. 

Sec. 117. Judicial review of decisions of the Commissioner of Social Security 

under the Medicare part D low-income subsidy program. 

Sec. 118. Translation of model form. 

Sec. 119. Medicare enrollment assistance. 

Subtitle B—Provisions Relating to Part A 

Sec. 121. Expansion and extension of the Medicare Rural Hospital Flexibility 

Program. 

Sec. 122. Rebasing for sole community hospitals. 

Sec. 123. Demonstration project on community health integration models in 

certain rural counties. 

Sec. 124. Extension of the reclassification of certain hospitals. 

Sec. 125. Revocation of unique deeming authority of the Joint Commission. 

Subtitle C—Provisions Relating to Part B 

PART I—PHYSICIANS’ SERVICES


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Sec. 131. Physician payment, efficiency, and quality improvements. 

Sec. 132. Incentives for electronic prescribing. 

Sec. 133. Expanding access to primary care services. 

Sec. 134. Extension of floor on Medicare work geographic adjustment under 

the Medicare physician fee schedule. 

Sec. 135. Imaging provisions. 

Sec. 136. Extension of treatment of certain physician pathology services under 

Medicare. 

Sec. 137. Accommodation of physicians ordered to active duty in the Armed 

Services. 

Sec. 138. Adjustment for Medicare mental health services. 

Sec. 139. Improvements for Medicare anesthesia teaching programs. 

PART II—OTHER PAYMENT AND COVERAGE IMPROVEMENTS

Sec. 141. Extension of exceptions process for Medicare therapy caps. 

Sec. 142. Extension of payment rule for brachytherapy and therapeutic radiopharmaceuticals. 

Sec. 143. Speech-language pathology services. 

Sec. 144. Payment and coverage improvements for patients with chronic obstructive pulmonary disease and other conditions. 

Sec. 145. Revision of payment for power-driven wheelchairs. 

Sec. 146. Clinical laboratory tests. 

Sec. 147. Improved access to ambulance services. 

Sec. 148. Extension and expansion of the Medicare hold harmless provision 

under the prospective payment system for hospital outpatient 

department (HOPD) services for certain hospitals. 

Sec. 149. Clarification of payment for clinical laboratory tests furnished by critical access hospitals. 

Sec. 150. Adding certain entities as originating sites for payment of telehealth 

services. 

Sec. 151. MedPAC study and report on improving chronic care demonstration 

programs. 

Sec. 152. Increase of FQHC payment limits. 

Sec. 153. Kidney disease education and awareness provisions. 

Sec. 154. Renal dialysis provisions. 

Subtitle D—Provisions Relating to Part C 

Sec. 161. Phase-out of indirect medical education (IME). 

Sec. 162. Revisions to requirements for Medicare Advantage private fee-forservice plans. 

Sec. 163. Revisions to quality improvement programs. 

Sec. 164. Revisions relating to specialized Medicare Advantage plans for special 

needs individuals. 

Sec. 165. Limitation on out-of-pocket costs for dual eligibles and qualified 

medicare beneficiaries enrolled in a specialized Medicare Advantage plan for special needs individuals. 

Sec. 166. Adjustment to the Medicare Advantage stabilization fund. 

Sec. 167. Access to Medicare reasonable cost contract plans. 

Sec. 168. MedPAC study and report on quality measures. 

Sec. 169. MedPAC study and report on Medicare Advantage payments. 

Subtitle E—Provisions Relating to Part D 

PART I—IMPROVING PHARMACY ACCESS


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Sec. 171. Prompt payment by prescription drug plans and MA–PD plans under 

part D. 

Sec. 172. Submission of claims by pharmacies located in or contracting with 

long-term care facilities. 

Sec. 173. Regular update of prescription drug pricing standard. 

PART II—OTHER PROVISIONS

Sec. 175. Inclusion of barbiturates and benzodiazepines as covered part D 

drugs. 

Sec. 176. Formulary requirements with respect to certain categories or classes 

of drugs. 

Subtitle F—Other Provisions 

Sec. 181. Use of part D data. 

Sec. 182. Revision of definition of medically accepted indication for drugs. 

Sec. 183. Contract with a consensus-based entity regarding performance measurement. 

Sec. 184. Cost-sharing for clinical trials. 

Sec. 185. Addressing health care disparities. 

Sec. 186. Demonstration to improve care to previously uninsured. 

Sec. 187. Office of the Inspector General report on compliance with and enforcement of national standards on culturally and linguistically 

appropriate services (CLAS) in Medicare. 

Sec. 188. Medicare Improvement Funding. 

TITLE II—MEDICAID 

Sec. 201. Extension of transitional medical assistance (TMA) and abstinence 

education program. 

Sec. 202. Medicaid DSH extension. 

Sec. 203. Pharmacy reimbursement under Medicaid. 

Sec. 204. Review of administrative claim determinations. 

TITLE III—MISCELLANEOUS 

Sec. 301. Extension of TANF supplemental grants. 

Sec. 302. 70 percent federal matching for foster care and adoption assistance 

for the District of Columbia. 

Sec. 303. Extension of Special Diabetes Grant Programs. 

Sec. 304. IOM reports on best practices for conducting systematic reviews of 

clinical effectiveness research and for developing clinical protocols. 


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1 TITLE I—MEDICARE 

2 Subtitle A—Beneficiary 

3 Improvements 

4 PART I—PREVENTION, MENTAL HEALTH, AND 

5 MARKETING 

6 SEC. 101. IMPROVEMENTS TO COVERAGE OF PREVENTIVE 

7 SERVICES. 

8 (a) COVERAGE OF ADDITIONAL PREVENTIVE SERV9 ICES.— 

10 (1) COVERAGE.—Section 1861 of the Social Se11 curity Act (42 U.S.C. 1395x), as amended by section 

12 114 of the Medicare, Medicaid, and SCHIP Exten13 sion Act of 2007 (Public Law 110–173), is amend14 ed— 

15 (A) in subsection (s)(2)— 

16 (i) in subparagraph (Z), by striking 

17 ‘‘and’’ after the semicolon at the end; 

18 (ii) in subparagraph (AA), by adding 

19 ‘‘and’’ after the semicolon at the end; and 

20 (iii) by adding at the end the fol21 lowing new subparagraph: 

22 ‘‘(BB) additional preventive services (described 

23 in subsection (ddd)(1));’’; and 

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

25 subsection: 


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1 ‘‘Additional Preventive Services 

2 ‘‘(ddd)(1) The term ‘additional preventive services’ 

3 means services not otherwise described in this title that 

4 identify medical conditions or risk factors and that the 

5 Secretary determines are— 

6 ‘‘(A) reasonable and necessary for the preven7 tion or early detection of an illness or disability; 

8 ‘‘(B) recommended with a grade of A or B by 

9 the United States Preventive Services Task Force; 

10 and 

11 ‘‘(C) appropriate for individuals entitled to ben12 efits under part A or enrolled under part B. 

13 ‘‘(2) In making determinations under paragraph (1) 

14 regarding the coverage of a new service, the Secretary 

15 shall use the process for making national coverage deter16 minations (as defined in section 1869(f)(1)(B)) under this 

17 title. As part of the use of such process, the Secretary 

18 may conduct an assessment of the relation between pre19 dicted outcomes and the expenditures for such service and 

20 may take into account the results of such assessment in 

21 making such determination.’’. 

22 (2) PAYMENT AND COINSURANCE FOR ADDI23 TIONAL PREVENTIVE SERVICES.—Section 1833(a)(1) 

24 of the Social Security Act (42 U.S.C. 1395l(a)(1)) 

25 is amended— 


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1 (A) by striking ‘‘and’’ before ‘‘(V)’’; and 

2 (B) by inserting before the semicolon at 

3 the end the following: ‘‘, and (W) with respect 

4 to additional preventive services (as defined in 

5 section 1861(ddd)(1)), the amount paid shall be 

6 (i) in the case of such services which are clinical 

7 diagnostic laboratory tests, the amount deter8 mined under subparagraph (D), and (ii) in the 

9 case of all other such services, 80 percent of the 

10 lesser of the actual charge for the service or the 

11 amount determined under a fee schedule estab12 lished by the Secretary for purposes of this sub13 paragraph’’. 

14 (3) CONFORMING AMENDMENT REGARDING

15 COVERAGE.—Section 1862(a)(1)(A) of the Social Se16 curity Act (42 U.S.C. 1395y(a)(1)(A)) is amended 

17 by inserting ‘‘or additional preventive services (as 

18 described in section 1861(ddd)(1))’’ after ‘‘suc19 ceeding subparagraph’’. 

20 (4) RULE OF CONSTRUCTION.—Nothing in the 

21 provisions of, or amendments made by, this sub22 section shall be construed to provide coverage under 

23 title XVIII of the Social Security Act of items and 

24 services for the treatment of a medical condition 

25 that is not otherwise covered under such title. 


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1 (b) REVISIONS TO INITIAL PREVENTIVE PHYSICAL

2 EXAMINATION.— 

3 (1) IN GENERAL.—Section 1861(ww) of the So4 cial Security Act (42 U.S.C. 1395x(ww)) is amend5 ed— 

6 (A) in paragraph (1)— 

7 (i) by inserting ‘‘body mass index,’’ 

8 after ‘‘weight’’; 

9 (ii) by striking ‘‘, and an electro10 cardiogram’’; and 

11 (iii) by inserting ‘‘and end-of-life plan12 ning (as defined in paragraph (3)) upon 

13 the agreement with the individual’’ after 

14 ‘‘paragraph (2)’’; 

15 (B) in paragraph (2), by adding at the end 

16 the following new subparagraphs: 

17 ‘‘(M) An electrocardiogram. 

18 ‘‘(N) Additional preventive services (as defined 

19 in subsection (ddd)(1)).’’; and 

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

21 paragraph: 

22 ‘‘(3) For purposes of paragraph (1), the term ‘end23 of-life planning’ means verbal or written information re24 garding— 


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1 ‘‘(A) an individual’s ability to prepare an ad2 vance directive in the case that an injury or illness 

3 causes the individual to be unable to make health 

4 care decisions; and 

5 ‘‘(B) whether or not the physician is willing to 

6 follow the individual’s wishes as expressed in an ad7 vance directive.’’. 

8 (2) WAIVER OF APPLICATION OF DEDUCT9 IBLE.—The first sentence of section 1833(b) of the 

10 Social Security Act (42 U.S.C. 1395l(b)) is amend11 ed— 

12 (A) by striking ‘‘and’’ before ‘‘(8)’’; and 

13 (B) by inserting ‘‘, and (9) such deductible 

14 shall not apply with respect to an initial preven15 tive physical examination (as defined in section 

16 1861(ww))’’ before the period at the end. 

17 (3) EXTENSION OF ELIGIBILITY PERIOD FROM

18 SIX MONTHS TO ONE YEAR.—Section 1862(a)(1)(K) 

19 of the Social Security Act (42 U.S.C. 

20 1395y(a)(1)(K)) is amended by striking ‘‘6 months’’ 

21 and inserting ‘‘1 year’’. 

22 (4) TECHNICAL CORRECTION.—Section 

23 1862(a)(1)(K) of the Social Security Act (42 U.S.C. 

24 1395y(a)(1)(K)) is amended by striking ‘‘not later’’ 

25 and inserting ‘‘more’’. 


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

2 this section shall apply to services furnished on or after 

3 January 1, 2009. 

4 SEC. 102. ELIMINATION OF DISCRIMINATORY COPAYMENT 

5 RATES FOR MEDICARE OUTPATIENT PSY6 CHIATRIC SERVICES. 

7 Section 1833(c) of the Social Security Act (42 U.S.C. 

8 1395l(c)) is amended to read as follows: 

9 ‘‘(c)(1) Notwithstanding any other provision of this 

10 part, with respect to expenses incurred in a calendar year 

11 in connection with the treatment of mental, psycho12 neurotic, and personality disorders of an individual who 

13 is not an inpatient of a hospital at the time such expenses 

14 are incurred, there shall be considered as incurred ex15 penses for purposes of subsections (a) and (b)— 

16 ‘‘(A) for expenses incurred in years prior to 

2010, only 621 17 ⁄2 percent of such expenses; 

18 ‘‘(B) for expenses incurred in 2010 or 2011, 

only 683 19 ⁄4 percent of such expenses; 

20 ‘‘(C) for expenses incurred in 2012, only 75 

21 percent of such expenses; 

‘‘(D) for expenses incurred in 2013, only 811 22 ⁄4

23 percent of such expenses; and 

24 ‘‘(E) for expenses incurred in 2014 or any sub25 sequent calendar year, 100 percent of such expenses. 


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1 ‘‘(2) For purposes of subparagraphs (A) through (D) 

2 of paragraph (1), the term ‘treatment’ does not include 

3 brief office visits (as defined by the Secretary) for the sole 

4 purpose of monitoring or changing drug prescriptions used 

5 in the treatment of such disorders or partial hospitaliza6 tion services that are not directly provided by a physi7 cian.’’. 

8 SEC. 103. PROHIBITIONS AND LIMITATIONS ON CERTAIN 

9 SALES AND MARKETING ACTIVITIES UNDER 

10 MEDICARE ADVANTAGE PLANS AND PRE11 SCRIPTION DRUG PLANS. 

12 (a) PROHIBITIONS.— 

13 (1) MEDICARE ADVANTAGE PROGRAM.— 

14 (A) IN GENERAL.—Section 1851 of the So15 cial Security Act (42 U.S.C. 1395w–21) is 

16 amended— 

17 (i) in subsection (h)(4)— 

18 (I) in subparagraph (A)— 

19 (aa) by striking ‘‘cash or 

20 other monetary rebates’’ and in21 serting ‘‘, subject to subsection 

22 (j)(2)(C), cash, gifts, prizes, or 

23 other monetary rebates’’; and 


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1 (bb) by striking ‘‘, and’’ at 

2 the end and inserting a semi3 colon; 

4 (II) in subparagraph (B), by 

5 striking the period at the end and in6 serting a semicolon; and 

7 (III) by adding at the end the 

8 following new subparagraph: 

9 ‘‘(C) shall not permit a Medicare Advan10 tage organization (or the agents, brokers, and 

11 other third parties representing such organiza12 tion) to conduct the prohibited activities de13 scribed in subsection (j)(1); and’’; and 

14 (ii) by adding at the end the following 

15 new subsection: 

16 ‘‘(j) PROHIBITED ACTIVITIES DESCRIBED AND LIMI17 TATIONS ON THE CONDUCT OF CERTAIN OTHER ACTIVI18 TIES.— 

19 ‘‘(1) PROHIBITED ACTIVITIES DESCRIBED.— 

20 The following prohibited activities are described in 

21 this paragraph: 

22 ‘‘(A) UNSOLICITED MEANS OF DIRECT

23 CONTACT.—Any unsolicited means of direct 

24 contact of prospective enrollees, including solic25 iting door-to-door or any outbound teleVerDate Aug 31 2005 00:59 Jun 10, 2008 Jkt 069200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S3101.PCS S3101

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1 marketing without the prospective enrollee initi2 ating contact. 

3 ‘‘(B) CROSS-SELLING.—The sale of other 

4 non-health related products (such as annuities 

5 and life insurance) during any sales or mar6 keting activity or presentation conducted with 

7 respect to a Medicare Advantage plan. 

8 ‘‘(C) MEALS.—The provision of meals of 

9 any sort, regardless of value, to prospective en10 rollees at promotional and sales activities. 

11 ‘‘(D) SALES AND MARKETING IN HEALTH

12 CARE SETTINGS AND AT EDUCATIONAL

13 EVENTS.—Sales and marketing activities for 

14 the enrollment of individuals in Medicare Ad15 vantage plans that are conducted— 

16 ‘‘(i) in health care settings in areas 

17 where health care is delivered to individ18 uals (such as physician offices and phar19 macies), except in the case where such ac20 tivities are conducted in common areas in 

21 health care settings; and 

22 ‘‘(ii) at educational events.’’. 

23 (2) MEDICARE PRESCRIPTION DRUG PRO24 GRAM.—Section 1860D–4 of the Social Security Act 


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1 (42 U.S.C. 1395w–104) is amended by adding at 

2 the end the following new subsection: 

3 ‘‘(l) REQUIREMENTS WITH RESPECT TO SALES AND

4 MARKETING ACTIVITIES.—The following provisions shall 

5 apply to a PDP sponsor (and the agents, brokers, and 

6 other third parties representing such sponsor) in the same 

7 manner as such provisions apply to a Medicare Advantage 

8 organization (and the agents, brokers, and other third par9 ties representing such organization): 

10 ‘‘(1) The prohibition under section 

11 1851(h)(4)(C) on conducting activities described in 

12 section 1851(j)(1).’’. 

13 (3) EFFECTIVE DATE.—The amendments made 

14 by this subsection shall apply to plan years begin15 ning on or after January 1, 2009. 

16 (b) LIMITATIONS.— 

17 (1) MEDICARE ADVANTAGE PROGRAM.—Section 

18 1851 of the Social Security Act (42 U.S.C. 1395w– 

19 21), as amended by subsection (a)(1), is amended— 

20 (A) in subsection (h)(4), by adding at the 

21 end the following new subparagraph: 

22 ‘‘(D) shall only permit a Medicare Advan23 tage organization (and the agents, brokers, and 

24 other third parties representing such organiza25 tion) to conduct the activities described in subVerDate Aug 31 2005 00:59 Jun 10, 2008 Jkt 069200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\S3101.PCS S3101

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1 section (j)(2) in accordance with the limitations 

2 established under such subsection.’’; and 

3 (B) in subsection (j), by adding at the end 

4 the following new paragraph: 

5 ‘‘(2) LIMITATIONS.—The Secretary shall estab6 lish limitations with respect to at least the following: 

7 ‘‘(A) SCOPE OF MARKETING APPOINT8 MENTS.—The scope of any appointment with 

9 respect to the marketing of a Medicare Advan10 tage plan. Such limitation shall require advance 

11 agreement with a prospective enrollee on the 

12 scope of the marketing appointment and docu13 mentation of such agreement by the Medicare 

14 Advantage organization. In the case where the 

15 marketing appointment is in person, such docu16 mentation shall be in writing. 

17 ‘‘(B) CO-BRANDING.—The use of the name 

18 or logo of a co-branded network provider on 

19 Medicare Advantage plan membership and mar20 keting materials. 

21 ‘‘(C) LIMITATION OF GIFTS TO NOMINAL

22 DOLLAR VALUE.—The offering of gifts and 

23 other promotional items other than those that 

24 are of nominal value (as determined by the SecVerDate Aug 31 2005 00:59 Jun 10, 2008 Jkt 069200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6201 E:\BILLS\S3101.PCS S3101

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1 retary) to prospective enrollees at promotional 

2 activities. 

3 ‘‘(D) COMPENSATION.—The use of com4 pensation other than as provided under guide5 lines established by the Secretary. Such guide6 lines shall ensure that the use of compensation 

7 creates incentives for agents and brokers to en8 roll individuals in the Medicare Advantage plan 

9 that is intended to best meet their health care 

10 needs. 

11 ‘‘(E) REQUIRED TRAINING, ANNUAL RE12 TRAINING, AND TESTING OF AGENTS, BROKERS, 

13 AND OTHER THIRD PARTIES.—The use by a 

14 Medicare Advantage organization of any indi15 vidual as an agent, broker, or other third party 

16 representing the organization that has not com17 pleted an initial training and testing program 

18 and does not complete an annual retraining and 

19 testing program.’’. 

20 (2) MEDICARE PRESCRIPTION DRUG PRO21 GRAM.—Section 1860D–4(l) of the Social Security 

22 Act, as added by subsection (a)(2), is amended by 

23 adding at the end the following new paragraph: 

24 ‘‘(2) The requirement under section 

25 1851(h)(4)(D) to conduct activities described in secVerDate Aug 31 2005 00:59 Jun 10, 2008 Jkt 069200 PO 00000 Frm 00016 Fmt 6652 Sfmt 6201 E:\BILLS\S3101.PCS S3101

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1 tion 1851(j)(2) in accordance with the limitations 

2 established under such subsection.’’. 

3 (3) EFFECTIVE DATE.—The amendments made 

4 by this subsection shall take effect on a date speci5 fied by the Secretary (but in no case later than No6 vember 15, 2008). 

7 (c) REQUIRED INCLUSION OF PLAN TYPE IN PLAN

8 NAME.— 

9 (1) MEDICARE ADVANTAGE PROGRAM.—Section 

10 1851(h) of the Social Security Act (42 U.S.C. 

11 1395w–21(h)) is amended by adding at the end fol12 lowing new paragraph: 

13 ‘‘(6) REQUIRED INCLUSION OF PLAN TYPE IN

14 PLAN NAME.—For plan years beginning on or after 

15 January 1, 2010, a Medicare Advantage organiza16 tion must ensure that the name of each Medicare 

17 Advantage plan offered by the Medicare Advantage 

18 organization includes the plan type of the plan 

19 (using standard terminology developed by the Sec20 retary).’’. 

21 (2) PRESCRIPTION DRUG PLANS.—Section 

22 1860D–4(l) of the Social Security Act, as added by 

23 subsection (a)(2) and amended by subsection (b)(2), 

24 is amended by adding at the end the following new 

25 paragraph: 


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1 ‘‘(3) The inclusion of the plan type in the plan 

2 name under section 1851(h)(6).’’. 

3 (d) STRENGTHENING THE ABILITY OF STATES TO

4 ACT IN COLLABORATION WITH THE SECRETARY TO AD5 DRESS FRAUDULENT OR INAPPROPRIATE MARKETING

6 PRACTICES.— 

7 (1) MEDICARE ADVANTAGE PROGRAM.—Section 

8 1851(h) of the Social Security Act (42 U.S.C. 

9 1395w–21(h), as amended by subsection (c)(1), is 

10 amended by adding at the end the following new 

11 paragraph: 

12 ‘‘(7) STRENGTHENING THE ABILITY OF STATES

13 TO ACT IN COLLABORATION WITH THE SECRETARY

14 TO ADDRESS FRAUDULENT OR INAPPROPRIATE MAR15 KETING PRACTICES.— 

16 ‘‘(A) APPOINTMENT OF AGENTS AND BRO17 KERS.—Each Medicare Advantage organization 

18 shall— 

19 ‘‘(i) only use agents and brokers who 

20 have been licensed under State law to sell 

21 Medicare Advantage plans offered by the 

22 Medicare Advantage organization; 

23 ‘‘(ii) in the case where a State has a 

24 State appointment law, abide by such law; 

25 and 


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1 ‘‘(iii) report to the applicable State 

2 the termination of any such agent or 

3 broker, including the reasons for such ter4 mination (as required under applicable 

5 State law). 

6 ‘‘(B) COMPLIANCE WITH STATE INFORMA7 TION REQUESTS.—Each Medicare Advantage 

8 organization shall comply in a timely manner 

9 with any request by a State for information re10 garding the performance of a licensed agent, 

11 broker, or other third party representing the 

12 Medicare Advantage organization as part of an 

13 investigation by the State into the conduct of 

14 the agent, broker, or other third party.’’. 

15 (2) PRESCRIPTION DRUG PLANS.—Section 

16 1860D–4(l) of the Social Security Act, as amended 

17 by subsection (c)(2), is amended by adding at the 

18 end the following new paragraph: 

19 ‘‘(4) The requirements regarding the appoint20 ment of agents and brokers and compliance with 

21 State information requests under subparagraphs (A) 

22 and (B), respectively, of section 1851(h)(7).’’. 

23 (3) EFFECTIVE DATE.—The amendments made 

24 by this subsection shall apply to plan years begin25 ning on or after January 1, 2009. 


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1 SEC. 104. IMPROVEMENTS TO THE MEDIGAP PROGRAM. 

2 (a) IMPLEMENTATION OF NAIC RECOMMENDA3 TIONS.— 

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

5 Human Services (in this section referred to as the 

6 ‘‘Secretary’’) shall provide for implementation of the 

7 changes in the NAIC model law and regulations ap8 proved by the National Association of Insurance 

9 Commissioners in its Model #651 (‘‘Model Regula10 tion to Implement the NAIC Medicare Supplement 

11 Insurance Minimum Standards Model Act’’) on 

12 March 11, 2007, as modified to reflect the changes 

13 made under this Act and the Genetic Information 

14 Nondiscrimination Act of 2008 (Public Law 110– 

15 233). 

16 (2) IMPLEMENTATION DATES.— 

17 (A) IN GENERAL.—The modifications to 

18 Model #651 required under paragraph (1) shall 

19 be completed by the National Association of In20 surance Commissioners not later than October 

21 31, 2008. Except as provided in subparagraph 

22 (B), each State shall have 1 year from the date 

23 the National Association of Insurance Commis24 sioners adopts the revised NAIC model law and 

25 regulations (as changed by Model #651, as so 

26 modified) to conform the regulatory program 


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1 established by the State to such revised NAIC 

2 model law and regulations. 

3 (B) EXTENSION OF EFFECTIVE DATE FOR

4 STATE LAW AMENDMENT.—In the case of a 

5 State which the Secretary determines requires 

6 State legislation in order to conform the regu7 latory program established by the State to such 

8 revised NAIC model law and regulations, the 

9 State shall not be regarded as failing to comply 

10 with the requirements of this section solely on 

11 the basis of its failure to meet such require12 ments before the first day of the first calendar 

13 quarter beginning after the close of the first 

14 regular session of the State legislature that be15 gins after the date of the enactment of this Act. 

16 For purposes of the previous sentence, in the 

17 case of a State that has a 2-year legislative ses18 sion, each year of the session is considered to 

19 be a separate regular session of the State legis20 lature. 

21 (C) TRANSITION DATES.—No carrier may 

22 issue a new or revised medicare supplemental 

23 policy or certificate under section 1882 of the 

24 Social Security Act (42 U.S.C. 1395ss) that 

25 meets the requirements of such revised NAIC 


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1 model law and regulations for coverage effective 

2 prior to June 1, 2010. A carrier may continue 

3 to offer or issue a medicare supplemental policy 

4 under such section that meets the requirements 

5 of the NAIC model law and regulations and 

6 State law (as in effect prior to the adoption of 

7 such revised NAIC model law and regulations) 

8 prior to June 1, 2010. Nothing shall preclude 

9 carriers from marketing new or revised medi10 care supplemental policies or certificates that 

11 meet the requirements of such revised NAIC 

12 model law and regulations on or after the date 

13 on which the State conforms the regulatory pro14 gram established by the State to such revised 

15 NAIC model law and regulations. 

16 (b) REQUIRED OFFERING OF A RANGE OF POLI17 CIES.—Section 1882(o) of the Social Security Act (42 

18 U.S.C. 1395s(o)) is amended by adding at the end the 

19 following new paragraph: 

20 ‘‘(4) In addition to the requirement under para21 graph (2), the issuer of the policy must make avail22 able to the individual at least Medicare supplemental 

23 policies with benefit packages classified as ‘C’ or 

24 ‘F’.’’. 


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1 PART II—LOW-INCOME PROGRAMS 

2 SEC. 111. EXTENSION OF QUALIFYING INDIVIDUAL (QI) 

3 PROGRAM. 

4 (a) EXTENSION.—Section 1902(a)(10)(E)(iv) of the 

5 Social Security Act (42 U.S.C. 1396a(a)(10)(E)(iv)) is 

6 amended by striking ‘‘June 2008’’ and inserting ‘‘Decem7 ber 2009’’. 

8 (b) EXTENDING TOTAL AMOUNT AVAILABLE FOR

9 ALLOCATION.—Section 1933(g) of such Act (42 U.S.C. 

10 1396u–3(g)) is amended— 

11 (1) in paragraph (2)— 

12 (A) by striking ‘‘and’’ at the end of sub13 paragraph (H); 

14 (B) in subparagraph (I)— 

15 (i) by striking ‘‘June 30’’ and insert16 ing ‘‘September 30’’; 

17 (ii) by striking ‘‘$200,000,000’’ and 

18 inserting ‘‘$300,000,000’’; and 

19 (iii) by striking the period at the end 

20 and inserting a semicolon; and 

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

22 subparagraphs: 

23 ‘‘(J) for the period that begins on October 

24 1, 2008, and ends on December 31, 2008, the 

25 total allocation amount is $100,000,000; 


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1 ‘‘(K) for the period that begins on January 

2 1, 2009, and ends on September 30, 2009, the 

3 total allocation amount is $350,000,000; and 

4 ‘‘(L) for the period that begins on October 

5 1, 2009, and ends on December 31, 2009, the 

6 total allocation amount is $150,000,000.’’; and 

7 (2) in paragraph (3), in the matter preceding 

8 subparagraph (A), by striking ‘‘or (H)’’ and insert9 ing ‘‘(H), (J), or (L)’’. 

10 SEC. 112. APPLICATION OF FULL LIS SUBSIDY ASSETS TEST 

11 UNDER MEDICARE SAVINGS PROGRAM. 

12 Section 1905(p)(1)(C) of such Act (42 U.S.C. 

13 1396d(p)(1)(C)) is amended by inserting before the period 

14 at the end the following: ‘‘or, effective beginning with Jan15 uary 1, 2010, whose resources (as so determined) do not 

16 exceed the maximum resource level applied for the year 

17 under subparagraph (D) of section 1860D–14(a)(3) (de18 termined without regard to the life insurance policy exclu19 sion provided under subparagraph (G) of such section) ap20 plicable to an individual or to the individual and the indi21 vidual’s spouse (as the case may be)’’. 

22 SEC. 113. ELIMINATING BARRIERS TO ENROLLMENT. 

23 (a) SSA ASSISTANCE WITH MEDICARE SAVINGS

24 PROGRAM AND LOW-INCOME SUBSIDY PROGRAM APPLI25 CATIONS.—Section 1144 of such Act (42 U.S.C. 1320b– 


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1 14) is amended by adding at the end the following new 

2 subsection: 

3 ‘‘(c) ASSISTANCE WITH MEDICARE SAVINGS PRO4 GRAM AND LOW-INCOME SUBSIDY PROGRAM APPLICA5 TIONS.— 

6 ‘‘(1) DISTRIBUTION OF APPLICATIONS AND IN7 FORMATION TO INDIVIDUALS WHO ARE POTEN8 TIALLY ELIGIBLE FOR LOW-INCOME SUBSIDY PRO9 GRAM.—For each individual who submits an applica10 tion for low-income subsidies under section 1860D– 

11 14, requests an application for such subsidies, or is 

12 otherwise identified as an individual who is poten13 tially eligible for such subsidies, the Commissioner 

14 shall do the following: 

15 ‘‘(A) Provide information describing the 

16 low-income subsidy program under section 

17 1860D–14 and the Medicare Savings Program 

18 (as defined in paragraph (7)). 

19 ‘‘(B) Provide an application for enrollment 

20 under such low-income subsidy program (if not 

21 already received by the Commissioner). 

22 ‘‘(C) In accordance with paragraph (3), 

23 transmit data from such an application for pur24 poses of initiating an application for benefits 

25 under the Medicare Savings Program. 


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1 ‘‘(D) Provide information on how the indi2 vidual may obtain assistance in completing such 

3 application and an application under the Medi4 care Savings Program, including information on 

5 how the individual may contact the State health 

6 insurance assistance program (SHIP). 

7 ‘‘(E) Make the application described in 

8 subparagraph (B) and the information de9 scribed in subparagraphs (A) and (D) available 

10 at local offices of the Social Security Adminis11 tration. 

12 ‘‘(2) TRAINING PERSONNEL IN EXPLAINING

13 BENEFIT PROGRAMS AND ASSISTING IN COMPLETING

14 LIS APPLICATION.—The Commissioner shall provide 

15 training to those employees of the Social Security 

16 Administration who are involved in receiving applica17 tions for benefits described in paragraph (1)(B) in 

18 order that they may promote beneficiary under19 standing of the low-income subsidy program and the 

20 Medicare Savings Program in order to increase par21 ticipation in these programs. Such employees shall 

22 provide assistance in completing an application de23 scribed in paragraph (1)(B) upon request. 

24 ‘‘(3) TRANSMITTAL OF DATA TO STATES.—Be25 ginning on January 1, 2010, with the consent of an 


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1 individual completing an application for benefits de2 scribed in paragraph (1)(B), the Commissioner shall 

3 electronically transmit to the appropriate State Med4 icaid agency data from such application, as deter5 mined by the Commissioner, which transmittal shall 

6 initiate an application of the individual for benefits 

7 under the Medicare Savings Program. In order to 

8 ensure that such data transmittal provides effective 

9 assistance for purposes of State adjudication of ap10 plications for benefits under the Medicare Savings 

11 Program, the Commissioner shall consult with the 

12 Secretary, after the Secretary has consulted with the 

13 States, regarding the content, form, frequency, and 

14 manner in which data (on a uniform basis for all 

15 States) shall be transmitted under this subpara16 graph. 

17 ‘‘(4) COORDINATION WITH OUTREACH.—The 

18 Commissioner shall coordinate outreach activities 

19 under this subsection with outreach activities con20 ducted by States in connection with the low-income 

21 subsidy program and the Medicare Savings Pro22 gram. 

23 ‘‘(5) REIMBURSEMENT OF SOCIAL SECURITY

24 ADMINISTRATION ADMINISTRATIVE COSTS.— 


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1 ‘‘(A) INITIAL MEDICARE SAVINGS PRO2 GRAM COSTS; ADDITIONAL LOW-INCOME SUB3 SIDY COSTS.— 

4 ‘‘(i) INITIAL MEDICARE SAVINGS PRO5 GRAM COSTS.—There are hereby appro6 priated to the Commissioner to carry out 

7 this subsection, out of any funds in the 

8 Treasury not otherwise appropriated, 

9 $21,100,000. The amount appropriated 

10 under ths clause shall be available on Octo11 ber 1, 2008, and shall remain available 

12 until expended. 

13 ‘‘(ii) ADDITIONAL AMOUNT FOR LOW14 INCOME SUBSIDY ACTIVITIES.—There are 

15 hereby appropriated to the Commissioner, 

16 out of any funds in the Treasury not oth17 erwise appropriated, $24,800,000 for fiscal 

18 year 2009 to carry out low-income subsidy 

19 activities under this Act, to remain avail20 able until expended. Such funds shall be in 

21 addition to the Social Security Administra22 tion’s Limitation on Administrative Ex23 penditure appropriations for such fiscal 

24 year. 


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1 ‘‘(B) SUBSEQUENT FUNDING UNDER

2 AGREEMENTS.— 

3 ‘‘(i) IN GENERAL.—Effective for fiscal 

4 years beginning on or after October 1, 

5 2010, the Commissioner and the Secretary 

6 shall enter into an agreement which shall 

7 provide funding to cover the administrative 

8 costs of the Commissioner’s activities 

9 under this subsection. Such agreement 

10 shall— 

11 ‘‘(I) provide funds to the Com12 missioner for the full cost of the So13 cial Security Administration’s work 

14 related to the Medicare Savings Pro15 gram required under this section; 

16 ‘‘(II) provide such funding quar17 terly in advance of the applicable 

18 quarter based on estimating method19 ology agreed to by the Commissioner 

20 and the Secretary; and 

21 ‘‘(III) require an annual account22 ing and reconciliation of the actual 

23 costs incurred and funds provided 

24 under this subsection. 


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1 ‘‘(ii) APPROPRIATION.—There are 

2 hereby appropriated to the Secretary solely 

3 for the purpose of providing payments to 

4 the Commissioner pursuant to an agree5 ment specified in clause (i) that is in ef6 fect, out of any funds in the Treasury not 

7 otherwise appropriated, not more than 

8 $3,000,000 for fiscal year 2011 and each 

9 fiscal year thereafter. 

10 ‘‘(C) LIMITATION.—In no case shall funds 

11 from the Social Security Administration’s Limi12 tation on Administrative Expenses be used to 

13 carry out activities under this subsection. For 

14 fiscal years beginning on or after October 1, 

15 2010, no such activities shall be undertaken by 

16 the Social Security Administration unless the 

17 agreement specified in subparagraph (B) is in 

18 effect and full funding has been provided to the 

19 Commissioner as specified in such subpara20 graph. 

21 ‘‘(6) GAO ANALYSIS AND REPORT.— 

22 ‘‘(A) ANALYSIS.—The Comptroller General 

23 of the United States shall prepare an analysis 

24 of the impact of this subsection— 


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1 ‘‘(i) in increasing participation in the 

2 Medicare Savings Program, and 

3 ‘‘(ii) on States and the Social Security 

4 Administration. 

5 ‘‘(B) REPORT.—Not later than January 1, 

6 2012, the Comptroller General shall submit to 

7 Congress, the Commissioner, and the Secretary 

8 a report on the analysis conducted under sub9 paragraph (A). 

10 ‘‘(7) MEDICARE SAVINGS PROGRAM DEFINED.— 

11 For purposes of this subsection, the term ‘Medicare 

12 Savings Program’ means the program of medical as13 sistance for payment of the cost of medicare cost14 sharing under the Medicaid program pursuant to 

15 sections 1902(a)(10)(E) and 1933.’’. 

16 (b) MEDICAID AGENCY CONSIDERATION OF DATA

17 TRANSMITTAL.—Section 1935(a) of such Act (42 U.S.C. 

18 1396u–5(a)) is amended by adding at the end the fol19 lowing new paragraph: 

20 ‘‘(4) CONSIDERATION OF DATA TRANSMITTED

21 BY THE SOCIAL SECURITY ADMINISTRATION FOR

22 PURPOSES OF MEDICARE SAVINGS PROGRAM.—The 

23 State shall accept data transmitted under section 

24 1144(c)(3) and act on such data in the same man25 ner and in accordance with the same deadlines as if 


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1 the data constituted an initiation of an application 

2 for benefits under the Medicare Savings Program 

3 (as defined for purposes of such section) that had 

4 been submitted directly by the applicant. The date 

5 of the individual’s application for the low income 

6 subsidy program from which the data have been de7 rived shall constitute the date of filing of such appli8 cation for benefits under the Medicare Savings Pro9 gram.’’. 

10 (c) EFFECTIVE DATE.—Except as otherwise pro11 vided, the amendments made by this section shall take ef12 fect on January 1, 2010. 

13 SEC. 114. ELIMINATION OF MEDICARE PART D LATE EN14 ROLLMENT PENALTIES PAID BY SUBSIDY ELI15 GIBLE INDIVIDUALS. 

16 (a) WAIVER OF LATE ENROLLMENT PENALTY.— 

17 (1) IN GENERAL.—Section 1860D–13(b) of the 

18 Social Security Act (42 U.S.C. 1395w–113(b)) is 

19 amended by adding at the end the following new 

20 paragraph: 

21 ‘‘(8) WAIVER OF PENALTY FOR SUBSIDY-ELIGI22 BLE INDIVIDUALS.—In no case shall a part D eligi23 ble individual who is determined to be a subsidy eli24 gible individual (as defined in section 1860D– 

25 14(a)(3)) be subject to an increase in the monthly 


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1 beneficiary premium established under subsection 

2 (a).’’. 

3 (2) CONFORMING AMENDMENT.—Section 

4 1860D–14(a)(1)(A) of the Social Security Act (42 

5 U.S.C. 1395w–114(a)(1)(A)) is amended by striking 

6 ‘‘equal to’’ and all that follows through the period 

7 and inserting ‘‘equal to 100 percent of the amount 

8 described in subsection (b)(1), but not to exceed the 

9 premium amount specified in subsection (b)(2)(B).’’. 

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

11 this section shall apply to subsidies for months beginning 

12 with January 2009. 

13 SEC. 115. ELIMINATING APPLICATION OF ESTATE RECOV14 ERY. 

15 (a) IN GENERAL.—Section 1917(b)(1)(B)(ii) of the 

16 Social Security Act (42 U.S.C. 1396p(b)(1)(B)(ii)) is 

17 amended by inserting ‘‘(but not including medical assist18 ance for medicare cost-sharing or for benefits described 

19 in section 1902(a)(10)(E))’’ before the period at the end. 

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

21 subsection (a) shall take effect as of January 1, 2010. 


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1 SEC. 116. EXEMPTIONS FROM INCOME AND RESOURCES 

2 FOR DETERMINATION OF ELIGIBILITY FOR 

3 LOW-INCOME SUBSIDY. 

4 (a) IN GENERAL.—Section 1860D–14(a)(3) of the 

5 Social Security Act (42 U.S.C. 1395w–114(a)(3)) is 

6 amended— 

7 (1) in subparagraph (C)(i), by inserting ‘‘and 

8 except that support and maintenance furnished in 

9 kind shall not be counted as income’’ after ‘‘section 

10 1902(r)(2)’’; 

11 (2) in subparagraph (D), in the matter before 

12 clause (i), by inserting ‘‘subject to the life insurance 

13 policy exclusion provided under subparagraph (G)’’ 

14 before ‘‘)’’; 

15 (3) in subparagraph (E)(i), in the matter before 

16 subclause (I), by inserting ‘‘subject to the life insur17 ance policy exclusion provided under subparagraph 

18 (G)’’ before ‘‘)’’; and 

19 (4) by adding at the end the following new sub20 paragraph: 

21 ‘‘(G) LIFE INSURANCE POLICY EXCLU22 SION.—In determining the resources of an indi23 vidual (and the eligible spouse of the individual, 

24 if any) under section 1613 for purposes of sub25 paragraphs (D) and (E) no part of the value of 


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1 any life insurance policy shall be taken into ac2 count.’’. 

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

4 this section shall take effect on January 1, 2010, and shall 

5 apply to determinations of eligibility for months beginning 

6 with January 2010. 

7 SEC. 117. JUDICIAL REVIEW OF DECISIONS OF THE COM8 MISSIONER OF SOCIAL SECURITY UNDER 

9 THE MEDICARE PART D LOW-INCOME SUB10 SIDY PROGRAM. 

11 (a) IN GENERAL.—Section 1860D–14(a)(3)(B)(iv) of 

12 the Social Security Act (42 U.S.C. 1395w– 

13 114(a)(3)(B)(iv)) is amended— 

14 (1) in subclause (I), by striking ‘‘and’’ at the 

15 end; 

16 (2) in subclause (II), by striking the period at 

17 the end and inserting ‘‘; and’’; and 

18 (3) by adding at the end the following new sub19 clause: 

20 ‘‘(III) judicial review of the final 

21 decision of the Commissioner made 

22 after a hearing shall be available to 

23 the same extent, and with the same 

24 limitations, as provided in subsections 

25 (g) and (h) of section 205.’’. 


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

2 subsection (a) shall take effect as if included in the enact3 ment of section 101 of the Medicare Prescription Drug, 

4 Improvement, and Modernization Act of 2003. 

5 SEC. 118. TRANSLATION OF MODEL FORM. 

6 (a) IN GENERAL.—Section 1905(p)(5)(A) of the So7 cial Security Act (42 U.S.C. 1396d(p)(5)(A)) is amended 

8 by adding at the end the following: ‘‘The Secretary shall 

9 provide for the translation of such application form into 

10 at least the 10 languages (other than English) that are 

11 most often used by individuals applying for hospital insur12 ance benefits under section 226 or 226A and shall make 

13 the translated forms available to the States and to the 

14 Commissioner of Social Security.’’. 

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

16 subsection (a) shall take effect on January 1, 2010. 

17 SEC. 119. MEDICARE ENROLLMENT ASSISTANCE. 

18 (a) ADDITIONAL FUNDING FOR STATE HEALTH IN19 SURANCE ASSISTANCE PROGRAMS.— 

20 (1) GRANTS.— 

21 (A) IN GENERAL.—The Secretary of 

22 Health and Human Services (in this section re23 ferred to as the ‘‘Secretary’’) shall use amounts 

24 made available under subparagraph (B) to 

25 make grants to States for State health insurVerDate Aug 31 2005 00:59 Jun 10, 2008 Jkt 069200 PO 00000 Frm 00036 Fmt 6652 Sfmt 6201 E:\BILLS\S3101.PCS S3101

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1 ance assistance programs receiving assistance 

2 under section 4360 of the Omnibus Budget 

3 Reconciliation Act of 1990. 

4 (B) FUNDING.—For purposes of making 

5 grants under this subsection, the Secretary 

6 shall provide for the transfer, from the Federal 

7 Hospital Insurance Trust Fund under section 

8 1817 of the Social Security Act (42 U.S.C. 

9 1395i) and the Federal Supplementary Medical 

10 Insurance Trust Fund under section 1841 of 

11 such Act (42 U.S.C. 1395t), in the same pro12 portion as the Secretary determines under sec13 tion 1853(f) of such Act (42 U.S.C. 1395w– 

14 23(f)), of $7,500,000 to the Centers for Medi15 care & Medicaid Services Program Management 

16 Account for fiscal year 2009, to remain avail17 able until expended. 

18 (2) AMOUNT OF GRANTS.—The amount of a 

19 grant to a State under this subsection from the total 

20 amount made available under paragraph (1) shall be 

21 equal to the sum of the amount allocated to the 

22 State under paragraph (3)(A) and the amount allo23 cated to the State under subparagraph (3)(B). 

24 (3) ALLOCATION TO STATES.— 


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1 (A) ALLOCATION BASED ON PERCENTAGE

2 OF LOW-INCOME BENEFICIARIES.—The amount 

3 allocated to a State under this subparagraph 

from 2 4 ⁄3 of the total amount made available 

5 under paragraph (1) shall be based on the num6 ber of individuals who meet the requirement 

7 under subsection (a)(3)(A)(ii) of section 

8 1860D–14 of the Social Security Act (42 

9 U.S.C. 1395w–114) but who have not enrolled 

10 to receive a subsidy under such section 1860D– 

11 14 relative to the total number of individuals 

12 who meet the requirement under such sub13 section (a)(3)(A)(ii) in each State, as estimated 

14 by the Secretary. 

15 (B) ALLOCATION BASED ON PERCENTAGE

16 OF RURAL BENEFICIARIES.—The amount allo17 cated to a State under this subparagraph from 

1 18 ⁄3 of the total amount made available under 

19 paragraph (1) shall be based on the number of 

20 part D eligible individuals (as defined in section 

21 1860D–1(a)(3)(A) of such Act (42 U.S.C. 

22 1395w–101(a)(3)(A))) residing in a rural area 

23 relative to the total number of such individuals 

24 in each State, as estimated by the Secretary. 


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1 (4) PORTION OF GRANT BASED ON PERCENT2 AGE OF LOW-INCOME BENEFICIARIES TO BE USED

3 TO PROVIDE OUTREACH TO INDIVIDUALS WHO MAY

4 BE SUBSIDY ELIGIBLE INDIVIDUALS OR ELIGIBLE

5 FOR THE MEDICARE SAVINGS PROGRAM.—Each 

6 grant awarded under this subsection with respect to 

7 amounts allocated under paragraph (3)(A) shall be 

8 used to provide outreach to individuals who may be 

9 subsidy eligible individuals (as defined in section 

10 1860D–14(a)(3)(A) of the Social Security Act (42 

11 U.S.C. 1395w–114(a)(3)(A)) or eligible for the 

12 Medicare Savings Program (as defined in subsection 

13 (e)). 

14 (b) ADDITIONAL FUNDING FOR AREA AGENCIES ON

15 AGING.— 

16 (1) GRANTS.— 

17 (A) IN GENERAL.—The Secretary, acting 

18 through the Assistant Secretary for Aging, shall 

19 make grants to States for area agencies on 

20 aging (as defined in section 102 of the Older 

21 Americans Act of 1965 (42 U.S.C. 3002)). 

22 (B) FUNDING.—For purposes of making 

23 grants under this subsection, the Secretary 

24 shall provide for the transfer, from the Federal 

25 Hospital Insurance Trust Fund under section 


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1 1817 of the Social Security Act (42 U.S.C. 

2 1395i) and the Federal Supplementary Medical 

3 Insurance Trust Fund under section 1841 of 

4 such Act (42 U.S.C. 1395t), in the same pro5 portion as the Secretary determines under sec6 tion 1853(f) of such Act (42 U.S.C. 1395w– 

7 23(f)), of $7,500,000 to the Administration on 

8 Aging for fiscal year 2009, to remain available 

9 until expended. 

10 (2) AMOUNT OF GRANT AND ALLOCATION TO

11 STATES BASED ON PERCENTAGE OF LOW-INCOME

12 AND RURAL BENEFICIARIES.—The amount of a 

13 grant to a State under this subsection from the total 

14 amount made available under paragraph (1) shall be 

15 determined in the same manner as the amount of a 

16 grant to a State under subsection (a), from the total 

17 amount made available under paragraph (1) of such 

18 subsection, is determined under paragraph (2) and 

19 subparagraphs (A) and (B) of paragraph (3) of such 

20 subsection. 

21 (3) REQUIRED USE OF FUNDS.— 

22 (A) ALL FUNDS.—Subject to subparagraph 

23 (B), each grant awarded under this subsection 

24 shall be used to provide outreach to eligible 

25 Medicare beneficiaries regarding the benefits 


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1 available under title XVIII of the Social Secu2 rity Act. 

3 (B) OUTREACH TO INDIVIDUALS WHO MAY

4 BE SUBSIDY ELIGIBLE INDIVIDUALS OR ELIGI5 BLE FOR THE MEDICARE SAVINGS PROGRAM.— 

6 Subsection (a)(4) shall apply to each grant 

7 awarded under this subsection in the same 

8 manner as it applies to a grant under sub9 section (a). 

10 (c) ADDITIONAL FUNDING FOR AGING AND DIS11 ABILITY RESOURCE CENTERS.— 

12 (1) GRANTS.— 

13 (A) IN GENERAL.—The Secretary shall 

14 make grants to Aging and Disability Resource 

15 Centers under the Aging and Disability Re16 source Center grant program that are estab17 lished centers under such program on the date 

18 of the enactment of this Act. 

19 (B) FUNDING.—For purposes of making 

20 grants under this subsection, the Secretary 

21 shall provide for the transfer, from the Federal 

22 Hospital Insurance Trust Fund under section 

23 1817 of the Social Security Act (42 U.S.C. 

24 1395i) and the Federal Supplementary Medical 

25 Insurance Trust Fund under section 1841 of 


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1 such Act (42 U.S.C. 1395t), in the same pro2 portion as the Secretary determines under sec3 tion 1853(f) of such Act (42 U.S.C. 1395w– 

4 23(f)), of $5,000,000 to the Administration on 

5 Aging for fiscal year 2009, to remain available 

6 until expended. 

7 (2) REQUIRED USE OF FUNDS.—Each grant 

8 awarded under this subsection shall be used to pro9 vide outreach to individuals regarding the benefits 

10 available under the Medicare prescription drug ben11 efit under part D of title XVIII of the Social Secu12 rity Act and under the Medicare Savings Program. 

13 (d) COORDINATION OF EFFORTS TO INFORM OLDER

14 AMERICANS ABOUT BENEFITS AVAILABLE UNDER FED15 ERAL AND STATE PROGRAMS.— 

16 (1) IN GENERAL.—The Secretary, acting 

17 through the Assistant Secretary for Aging, in co18 operation with related Federal agency partners, shall 

19 make a grant to, or enter into a contract with, a 

20 qualified, experienced entity under which the entity 

21 shall— 

22 (A) maintain and update web-based deci23 sion support tools, and integrated, person-cen24 tered systems, designed to inform older individ25 uals (as defined in section 102 of the Older 


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1 Americans Act of 1965 (42 U.S.C. 3002)) 

2 about the full range of benefits for which the 

3 individuals may be eligible under Federal and 

4 State programs; 

5 (B) utilize cost-effective strategies to find 

6 older individuals with the greatest economic 

7 need (as defined in such section 102) and in8 form the individuals of the programs; 

9 (C) develop and maintain an information 

10 clearinghouse on best practices and the most 

11 cost-effective methods for finding older individ12 uals with greatest economic need and informing 

13 the individuals of the programs; and 

14 (D) provide, in collaboration with related 

15 Federal agency partners administering the Fed16 eral programs, training and technical assistance 

17 on the most effective outreach, screening, and 

18 follow-up strategies for the Federal and State 

19 programs. 

20 (2) FUNDING.—For purposes of making a 

21 grant or entering into a contract under paragraph 

22 (1), the Secretary shall provide for the transfer, 

23 from the Federal Hospital Insurance Trust Fund 

24 under section 1817 of the Social Security Act (42 

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1 ical Insurance Trust Fund under section 1841 of 

2 such Act (42 U.S.C. 1395t), in the same proportion 

3 as the Secretary determines under section 1853(f) of 

4 such Act (42 U.S.C. 1395w–23(f)), of $5,000,000 to 

5 the Administration on Aging for fiscal year 2009, to 

6 remain available until expended. 

7 (e) MEDICARE SAVINGS PROGRAM DEFINED.—For 

8 purposes of this section, the term ‘‘Medicare Savings Pro9 gram’’ means the program of medical assistance for pay10 ment of the cost of medicare cost-sharing under the Med11 icaid program pursuant to sections 1902(a)(10)(E) and 

12 1933 of the Social Security Act (42 U.S.C. 

13 1396a(a)(10)(E), 1396u–3). 

14 Subtitle B—Provisions Relating to 

15 Part A 

16 SEC. 121. EXPANSION AND EXTENSION OF THE MEDICARE 

17 RURAL HOSPITAL FLEXIBILITY PROGRAM. 

18 (a) IN GENERAL.—Section 1820(g) of the Social Se19 curity Act (42 U.S.C. 1395i–4(g)) is amended by adding 

20 at the end the following new paragraph: 

21 ‘‘(6) PROVIDING MENTAL HEALTH SERVICES

22 AND OTHER HEALTH SERVICES TO VETERANS AND

23 OTHER RESIDENTS OF RURAL AREAS.— 

24 ‘‘(A) GRANTS TO STATES.—The Secretary 

25 may award grants to States that have subVerDate Aug 31 2005 00:59 Jun 10, 2008 Jkt 069200 PO 00000 Frm 00044 Fmt 6652 Sfmt 6201 E:\BILLS\S3101.PCS S3101

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1 mitted applications in accordance with subpara2 graph (B) for increasing the delivery of mental 

3 health services or other health care services 

4 deemed necessary to meet the needs of veterans 

5 of Operation Iraqi Freedom and Operation En6 during Freedom living in rural areas (as de7 fined for purposes of section 1886(d) and in8 cluding areas that are rural census tracks, as 

9 defined by the Administrator of the Health Re10 sources and Services Administration), including 

11 for the provision of crisis intervention services 

12 and the detection of post-traumatic stress dis13 order, traumatic brain injury, and other signa14 ture injuries of veterans of Operation Iraqi 

15 Freedom and Operation Enduring Freedom, 

16 and for referral of such veterans to medical fa17 cilities operated by the Department of Veterans 

18 Affairs, and for the delivery of such services to 

19 other residents of such rural areas. 

20 ‘‘(B) APPLICATION.— 

21 ‘‘(i) IN GENERAL.—An application is 

22 in accordance with this subparagraph if 

23 the State submits to the Secretary at such 

24 time and in such form as the Secretary 

25 may require an application containing the 


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1 assurances described in subparagraphs 

2 (A)(ii) and (A)(iii) of subsection (b)(1). 

3 ‘‘(ii) CONSIDERATION OF REGIONAL

4 APPROACHES, NETWORKS, OR TECH5 NOLOGY.—The Secretary may, as appro6 priate in awarding grants to States under 

7 subparagraph (A), consider whether the 

8 application submitted by a State under 

9 this subparagraph includes 1 or more pro10 posals that utilize regional approaches, 

11 networks, health information technology, 

12 telehealth, or telemedicine to deliver serv13 ices described in subparagraph (A) to indi14 viduals described in that subparagraph. 

15 For purposes of this clause, a network 

16 may, as the Secretary determines appro17 priate, include federally qualified health 

18 centers, rural health clinics, home health 

19 agencies, community mental health clinics 

20 and other providers of mental health serv21 ices, pharmacists, local government, and 

22 other providers deemed necessary to meet 

23 the needs of veterans. 

24 ‘‘(iii) COORDINATION AT LOCAL

25 LEVEL.—The Secretary shall require, as 


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1 appropriate, a State to demonstrate con2 sultation with the hospital association of 

3 such State, rural hospitals located in such 

4 State, providers of mental health services, 

5 or other appropriate stakeholders for the 

6 provision of services under a grant award7 ed under this paragraph. 

8 ‘‘(iv) SPECIAL CONSIDERATION OF

9 CERTAIN APPLICATIONS.—In awarding 

10 grants to States under subparagraph (A), 

11 the Secretary shall give special consider12 ation to applications submitted by States 

13 in which veterans make up a high percent14 age (as determined by the Secretary) of 

15 the total population of the State. Such 

16 consideration shall be given without regard 

17 to the number of veterans of Operation 

18 Iraqi Freedom and Operation Enduring 

19 Freedom living in the areas in which men20 tal health services and other health care 

21 services would be delivered under the appli22 cation. 

23 ‘‘(C) COORDINATION WITH VA.—The Sec24 retary shall, as appropriate, consult with the 

25 Director of the Office of Rural Health of the 


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1 Department of Veterans Affairs in awarding 

2 and administering grants to States under sub3 paragraph (A). 

4 ‘‘(D) USE OF FUNDS.—A State awarded a 

5 grant under this paragraph may, as appro6 priate, use the funds to reimburse providers of 

7 services described in subparagraph (A) to indi8 viduals described in that subparagraph. 

9 ‘‘(E) LIMITATION ON USE OF GRANT

10 FUNDS FOR ADMINISTRATIVE EXPENSES.—A 

11 State awarded a grant under this paragraph 

12 may not expend more than 15 percent of the 

13 amount of the grant for administrative ex14 penses. 

15 ‘‘(F) INDEPENDENT EVALUATION AND

16 FINAL REPORT.—The Secretary shall provide 

17 for an independent evaluation of the grants 

18 awarded under subparagraph (A). Not later 

19 than 1 year after the date on which the last 

20 grant is awarded to a State under such sub21 paragraph, the Secretary shall submit a report 

22 to Congress on such evaluation. Such report 

23 shall include an assessment of the impact of 

24 such grants on increasing the delivery of mental 

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1 erans of the United States Armed Forces living 

2 in rural areas (as so defined and including such 

3 areas that are rural census tracks), with par4 ticular emphasis on the impact of such grants 

5 on the delivery of such services to veterans of 

6 Operation Enduring Freedom and Operation 

7 Iraqi Freedom, and to other individuals living 

8 in such rural areas.’’. 

9 (b) USE OF FUNDS FOR FEDERAL ADMINISTRATIVE

10 EXPENSES.—Section 1820(g)(5) of the Social Security 

11 Act (42 U.S.C. 1395i–4(g)(5)) is amended— 

12 (1) by striking ‘‘beginning with fiscal year 

13 2005’’ and inserting ‘‘for each of fiscal years 2005 

14 through 2008’’; and 

15 (2) by inserting ‘‘and, of the total amount ap16 propriated for grants under paragraphs (1), (2), and 

17 (6) for a fiscal year (beginning with fiscal year 

18 2009)’’ after ‘‘2005)’’. 

19 (c) EXTENSION OF AUTHORIZATION FOR FLEX 

20 GRANTS.—Section 1820(j) of the Social Security Act (42 

21 U.S.C. 1395i–4(j)) is amended— 

22 (1) by striking ‘‘and for’’ and inserting ‘‘for’’; 

23 and 

24 (2) by inserting ‘‘, for making grants to all 

25 States under paragraphs (1) and (2) of subsection 


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1 (g), $55,000,000 in each of fiscal years 2009 and 

2 2010, and for making grants to all States under 

3 paragraph (6) of subsection (g), $50,000,000 in 

4 each of fiscal years 2009 and 2010, to remain avail5 able until expended’’ before the period at the end. 

6 (d) MEDICARE RURAL HOSPITAL FLEXIBILITY PRO7 GRAM.—Section 1820(g)(1) of the Social Security Act (42 

8 U.S.C. 1395i–4(g)(1)) is amended— 

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

10 the end; 

11 (2) in subparagraph (C), by striking the period 

12 at the end and inserting ‘‘; and’’; and 

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

15 ‘‘(D) providing support for critical access 

16 hospitals for quality improvement, quality re17 porting, performance improvements, and 

18 benchmarking.’’. 

19 (e) ASSISTANCE TO SMALL CRITICAL ACCESS HOS20 PITALS TRANSITIONING TO SKILLED NURSING FACILI21 TIES AND ASSISTED LIVING FACILITIES.—Section 

22 1820(g) of the Social Security Act (42 U.S.C. 1395i– 

23 4(g)), as amended by subsection (a), is amended by adding 

24 at the end the following new paragraph: 


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1 ‘‘(7) CRITICAL ACCESS HOSPITALS

2 TRANSITIONING TO SKILLED NURSING FACILITIES

3 AND ASSISTED LIVING FACILITIES.— 

4 ‘‘(A) GRANTS.—The Secretary may award 

5 grants to eligible critical access hospitals that 

6 have submitted applications in accordance with 

7 subparagraph (B) for assisting such hospitals 

8 in the transition to skilled nursing facilities and 

9 assisted living facilities. 

10 ‘‘(B) APPLICATION.—An applicable critical 

11 access hospital seeking a grant under this para12 graph shall submit an application to the Sec13 retary on or before such date and in such form 

14 and manner as the Secretary specifies. 

15 ‘‘(C) ADDITIONAL REQUIREMENTS.—The 

16 Secretary may not award a grant under this 

17 paragraph to an eligible critical access hospital 

18 unless— 

19 ‘‘(i) local organizations or the State in 

20 which the hospital is located provides 

21 matching funds; and 

22 ‘‘(ii) the hospital provides assurances 

23 that it will surrender critical access hos24 pital status under this title within 180 

25 days of receiving the grant. 


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1 ‘‘(D) AMOUNT OF GRANT.—A grant to an 

2 eligible critical access hospital under this para3 graph may not exceed $1,000,000. 

4 ‘‘(E) FUNDING.—There are appropriated 

5 from the Federal Hospital Insurance Trust 

6 Fund under section 1817 for making grants 

7 under this paragraph, $5,000,000 for fiscal 

8 year 2008. 

9 ‘‘(F) ELIGIBLE CRITICAL ACCESS HOS10 PITAL DEFINED.—For purposes of this para11 graph, the term ‘eligible critical access hospital’ 

12 means a critical access hospital that has an av13 erage daily acute census of less than 0.5 and an 

14 average daily swing bed census of greater than 

15 10.0.’’. 

16 SEC. 122. REBASING FOR SOLE COMMUNITY HOSPITALS. 

17 (a) REBASING PERMITTED.—Section 1886(b)(3) of 

18 the Social Security Act (42 U.S.C. 1395ww(b)(3)) is 

19 amended by adding at the end the following new subpara20 graph: 

21 ‘‘(L)(i) For cost reporting periods beginning on or 

22 after January 1, 2009, in the case of a sole community 

23 hospital there shall be substituted for the amount other24 wise determined under subsection (d)(5)(D)(i) of this sec25 tion, if such substitution results in a greater amount of 


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1 payment under this section for the hospital, the subpara2 graph (L) rebased target amount. 

3 ‘‘(ii) For purposes of this subparagraph, the term 

4 ‘subparagraph (L) rebased target amount’ has the mean5 ing given the term ‘target amount’ in subparagraph (C), 

6 except that— 

7 ‘‘(I) there shall be substituted for the base cost 

8 reporting period the 12-month cost reporting period 

9 beginning during fiscal year 2006; 

10 ‘‘(II) any reference in subparagraph (C)(i) to 

11 the ‘first cost reporting period’ described in such 

12 subparagraph is deemed a reference to the first cost 

13 reporting period beginning on or after January 1, 

14 2009; and 

15 ‘‘(III) the applicable percentage increase shall 

16 only be applied under subparagraph (C)(iv) for dis17 charges occurring on or after January 1, 2009.’’. 

18 (b) CONFORMING AMENDMENTS.—Section 

19 1886(b)(3) of the Social Security Act (42 U.S.C. 

20 1395ww(b)(3)) is amended— 

21 (1) in subparagraph (C), in the matter pre22 ceding clause (i), by striking ‘‘subparagraph (I)’’ 

23 and inserting ‘‘subparagraphs (I) and (L)’’; and 


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1 (2) in subparagraph (I)(i), in the matter pre2 ceding subclause (I), by striking ‘‘For’’ and inserting 

3 ‘‘Subject to subparagraph (L), for’’. 

4 SEC. 123. DEMONSTRATION PROJECT ON COMMUNITY 

5 HEALTH INTEGRATION MODELS IN CERTAIN 

6 RURAL COUNTIES. 

7 (a) IN GENERAL.—The Secretary shall establish a 

8 demonstration project to allow eligible entities to develop 

9 and test new models for the delivery of health care services 

10 in eligible counties for the purpose of improving access to, 

11 and better integrating the delivery of, acute care, extended 

12 care, and other essential health care services to Medicare 

13 beneficiaries. 

14 (b) PURPOSE.—The purpose of the demonstration 

15 project under this section is to— 

16 (1) explore ways to increase access to, and im17 prove the adequacy of, payments for acute care, ex18 tended care, and other essential health care services 

19 provided under the Medicare and Medicaid programs 

20 in eligible counties; and 

21 (2) evaluate regulatory challenges facing such 

22 providers and the communities they serve. 

23 (c) REQUIREMENTS.—The following requirements 

24 shall apply under the demonstration project: 


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1 (1) Health care providers in eligible counties se2 lected to participate in the demonstration project 

3 under subsection (d)(3) shall (when determined ap4 propriate by the Secretary), instead of the payment 

5 rates otherwise applicable under the Medicare pro6 gram, be reimbursed at a rate that covers at least 

7 the reasonable costs of the provider in furnishing 

8 acute care, extended care, and other essential health 

9 care services to Medicare beneficiaries. 

10 (2) Methods to coordinate the survey and cer11 tification process under the Medicare program and 

12 the Medicaid program across all health service cat13 egories included in the demonstration project shall 

14 be tested with the goal of assuring quality and safe15 ty while reducing administrative burdens, as appro16 priate, related to completing such survey and certifi17 cation process. 

18 (3) Health care providers in eligible counties se19 lected to participate in the demonstration project 

20 under subsection (d)(3) and the Secretary shall work 

21 with the State to explore ways to revise reimburse22 ment policies under the Medicaid program to im23 prove access to the range of health care services 

24 available in such eligible counties. 


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1 (4) The Secretary shall identify regulatory re2 quirements that may be revised appropriately to im3 prove access to care in eligible counties. 

4 (5) Other essential health care services nec5 essary to ensure access to the range of health care 

6 services in eligible counties selected to participate in 

7 the demonstration project under subsection (d)(3) 

8 shall be identified. Ways to ensure adequate funding 

9 for such services shall also be explored. 

10 (d) APPLICATION PROCESS.— 

11 (1) ELIGIBILITY.— 

12 (A) IN GENERAL.—Eligibility to partici13 pate in the demonstration project under this 

14 section shall be limited to eligible entities. 

15 (B) ELIGIBLE ENTITY DEFINED.—In this 

16 section, the term ‘‘eligible entity’’ means an en17 tity that— 

18 (i) is a Rural Hospital Flexibility Pro19 gram grantee under section 1820(g) of the 

20 Social Security Act (42 U.S.C. 1395i– 

21 4(g)); and 

22 (ii) is located in a State in which at 

23 least 65 percent of the counties in the 

24 State are counties that have 6 or less resi25 dents per square mile. 


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1 (2) APPLICATION.— 

2 (A) IN GENERAL.—An eligible entity seek3 ing to participate in the demonstration project 

4 under this section shall submit an application to 

5 the Secretary at such time, in such manner, 

6 and containing such information as the Sec7 retary may require. 

8 (B) LIMITATION.—The Secretary shall se9 lect eligible entities located in not more than 4 

10 States to participate in the demonstration 

11 project under this section. 

12 (3) SELECTION OF ELIGIBLE COUNTIES.—An 

13 eligible entity selected by the Secretary to partici14 pate in the demonstration project under this section 

15 shall select not more than 6 eligible counties in the 

16 State in which the entity is located in which to con17 duct the demonstration project. 

18 (4) ELIGIBLE COUNTY DEFINED.—In this sec19 tion, the term ‘‘eligible county’’ means a county that 

20 meets the following requirements: 

21 (A) The county has 6 or less residents per 

22 square mile. 

23 (B) As of the date of the enactment of this 

24 Act, a facility designated as a critical access 


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1 hospital which meets the following requirements 

2 was located in the county: 

3 (i) As of the date of the enactment of 

4 this Act, the critical access hospital fur5 nished 1 or more of the following: 

6 (I) Home health services. 

7 (II) Hospice care. 

8 (III) Rural health clinic services. 

9 (ii) As of the date of the enactment of 

10 this Act, the critical access hospital has an 

11 average daily inpatient census of 5 or less. 

12 (C) As of the date of the enactment of this 

13 Act, skilled nursing facility services were avail14 able in the county in— 

15 (i) a critical access hospital using 

16 swing beds; or 

17 (ii) a local nursing home. 

18 (e) ADMINISTRATION.— 

19 (1) IN GENERAL.—The demonstration project 

20 under this section shall be administered jointly by 

21 the Administrator of the Office of Rural Health Pol22 icy of the Health Resources and Services Adminis23 tration and the Administrator of the Centers for 

24 Medicare & Medicaid Services, in accordance with 

25 paragraphs (2) and (3). 


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1 (2) HRSA DUTIES.—In administering the dem2 onstration project under this section, the Adminis3 trator of the Office of Rural Health Policy of the 

4 Health Resources and Services Administration 

5 shall— 

6 (A) award grants to the eligible entities se7 lected to participate in the demonstration 

8 project; and 

9 (B) work with such entities to provide 

10 technical assistance related to the requirements 

11 under the project. 

12 (3) CMS DUTIES.—In administering the dem13 onstration project under this section, the Adminis14 trator of the Centers for Medicare & Medicaid Serv15 ices shall determine which provisions of titles XVIII 

16 and XIX of the Social Security Act (42 U.S.C. 1395 

17 et seq.; 1396 et seq.) the Secretary should waive 

18 under the waiver authority under subsection (i) that 

19 are relevant to the development of alternative reim20 bursement methodologies, which may include, as ap21 propriate, covering at least the reasonable costs of 

22 the provider in furnishing acute care, extended care, 

23 and other essential health care services to Medicare 

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1 grams, as appropriate, across all service categories 

2 included in the demonstration project. 

3 (f) DURATION.— 

4 (1) IN GENERAL.—The demonstration project 

5 under this section shall be conducted for a 3-year 

6 period beginning on October 1, 2009. 

7 (2) BEGINNING DATE OF DEMONSTRATION

8 PROJECT.—The demonstration project under this 

9 section shall be considered to have begun in a State 

10 on the date on which the eligible counties selected to 

11 participate in the demonstration project under sub12 section (d)(3) begin operations in accordance with 

13 the requirements under the demonstration project. 

14 (g) FUNDING.— 

15 (1) CMS.— 

16 (A) IN GENERAL.—The Secretary shall 

17 provide for the transfer, in appropriate part 

18 from the Federal Hospital Insurance Trust 

19 Fund established under section 1817 of the So20 cial Security Act (42 U.S.C. 1395i) and the 

21 Federal Supplementary Medical Insurance 

22 Trust Fund established under section 1841 of 

23 such Act (42 U.S.C. 1395t), of such sums as 

24 are necessary for the costs to the Centers for 

25 Medicare & Medicaid Services of carrying out 


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1 its duties under the demonstration project 

2 under this section. 

3 (B) BUDGET NEUTRALITY.—In conducting 

4 the demonstration project under this section, 

5 the Secretary shall ensure that the aggregate 

6 payments made by the Secretary do not exceed 

7 the amount which the Secretary estimates 

8 would have been paid if the demonstration 

9 project under this section was not implemented. 

10 (2) HRSA.—There are authorized to be appro11 priated to the Office of Rural Health Policy of the 

12 Health Resources and Services Administration 

13 $800,000 for each of fiscal years 2010, 2011, and 

14 2012 for the purpose of carrying out the duties of 

15 such Office under the demonstration project under 

16 this section, to remain available for the duration of 

17 the demonstration project. 

18 (h) REPORT.— 

19 (1) INTERIM REPORT.—Not later than the date 

20 that is 2 years after the date on which the dem21 onstration project under this section is implemented, 

22 the Administrator of the Office of Rural Health Pol23 icy of the Health Resources and Services Adminis24 tration, in coordination with the Administrator of 

25 the Centers for Medicare & Medicaid Services, shall 


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1 submit a report to Congress on the status of the 

2 demonstration project that includes initial rec3 ommendations on ways to improve access to, and the 

4 availability of, health care services in eligible coun5 ties based on the findings of the demonstration 

6 project. 

7 (2) FINAL REPORT.—Not later than 1 year 

8 after the completion of the demonstration project, 

9 the Administrator of the Office of Rural Health Pol10 icy of the Health Resources and Services Adminis11 tration, in coordination with the Administrator of 

12 the Centers for Medicare & Medicaid Services, shall 

13 submit a report to Congress on such project, to14 gether with recommendations for such legislation 

15 and administrative action as the Secretary deter16 mines appropriate. 

17 (i) WAIVER AUTHORITY.—The Secretary may waive 

18 such requirements of titles XVIII and XIX of the Social 

19 Security Act (42 U.S.C. 1395 et seq.; 1396 et seq.) as 

20 may be necessary and appropriate for the purpose of car21 rying out the demonstration project under this section. 

22 (j) DEFINITIONS.—In this section: 

23 (1) EXTENDED CARE SERVICES.—The term 

24 ‘‘extended care services’’ means the following: 

25 (A) Home health services. 


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1 (B) Covered skilled nursing facility serv2 ices. 

3 (C) Hospice care. 

4 (2) COVERED SKILLED NURSING FACILITY

5 SERVICES.—The term ‘‘covered skilled nursing facil6 ity services’’ has the meaning given such term in 

7 section 1888(e)(2)(A) of the Social Security Act (42 

8 U.S.C. 1395yy(e)(2)(A)). 

9 (3) CRITICAL ACCESS HOSPITAL.—The term 

10 ‘‘critical access hospital’’ means a facility designated 

11 as a critical access hospital under section 1820(c) of 

12 such Act (42 U.S.C. 1395i–4(c)). 

13 (4) HOME HEALTH SERVICES.—The term 

14 ‘‘home health services’’ has the meaning given such 

15 term in section 1861(m) of such Act (42 U.S.C. 

16 1395x(m)). 

17 (5) HOSPICE CARE.—The term ‘‘hospice care’’ 

18 has the meaning given such term in section 

19 1861(dd) of such Act (42 U.S.C. 1395x(dd)). 

20 (6) MEDICAID PROGRAM.—The term ‘‘Medicaid 

21 program’’ means the program under title XIX of 

22 such Act (42 U.S.C. 1396 et seq.). 

23 (7) MEDICARE PROGRAM.—The term ‘‘Medicare 

24 program’’ means the program under title XVIII of 

25 such Act (42 U.S.C. 1395 et seq.). 


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1 (8) OTHER ESSENTIAL HEALTH CARE SERV2 ICES.—The term ‘‘other essential health care serv3 ices’’ means the following: 

4 (A) Ambulance services (as described in 

5 section 1861(s)(7) of the Social Security Act 

6 (42 U.S.C. 1395x(s)(7))). 

7 (B) Rural health clinic services. 

8 (C) Public health services (as defined by 

9 the Secretary). 

10 (D) Other health care services determined 

11 appropriate by the Secretary. 

12 (9) RURAL HEALTH CLINIC SERVICES.—The 

13 term ‘‘rural health clinic services’’ has the meaning 

14 given such term in section 1861(aa)(1) of such Act 

15 (42 U.S.C. 1395x(aa)(1)). 

16 (10) SECRETARY.—The term ‘‘Secretary’’ 

17 means the Secretary of Health and Human Services. 

18 SEC. 124. EXTENSION OF THE RECLASSIFICATION OF CER19 TAIN HOSPITALS. 

20 (a) IN GENERAL.—Subsection (a) of section 106 of 

21 division B of the Tax Relief and Health Care Act of 2006 

22 (42 U.S.C. 1395 note), as amended by section 117 of the 

23 Medicare, Medicaid, and SCHIP Extension Act of 2007 

24 (Public Law 110–173), is amended by striking ‘‘Sep25 tember 30, 2008’’ and inserting ‘‘September 30, 2009’’. 


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1 (b) SPECIAL EXCEPTION RECLASSIFICATIONS.—Sec2 tion 117(a)(2) of the Medicare, Medicaid, and SCHIP Ex3 tension Act of 2007 (Public Law 110–173) is amended 

4 by striking ‘‘September 30, 2008’’ and inserting ‘‘Sep5 tember 30, 2009’’. 

6 SEC. 125. REVOCATION OF UNIQUE DEEMING AUTHORITY 

7 OF THE JOINT COMMISSION. 

8 (a) REVOCATION.—Section 1865 of the Social Secu9 rity Act (42 U.S.C. 1395bb) is amended— 

10 (1) by striking subsection (a); and 

11 (2) by redesignating subsections (b), (c), (d), 

12 and (e) as subsections (a), (b), (c), and (d), respec13 tively. 

14 (b) CONFORMING AMENDMENTS.—(1) Section 1865 

15 of the Social Security Act (42 U.S.C. 1395bb) is amend16 ed— 

17 (A) in subsection (a)(1), as redesignated by 

18 subsection (a)(2), by striking ‘‘In addition, if’’ and 

19 inserting ‘‘If’’; 

20 (B) in subsection (b), as so redesignated— 

21 (i) by striking ‘‘released to him by the 

22 Joint Commission on Accreditation of Hos23 pitals,’’ and inserting ‘‘released to the Secretary 

24 by’’; and 


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1 (ii) by striking the comma after ‘‘Associa2 tion’’; 

3 (C) in subsection (c), as so redesignated, by 

4 striking ‘‘pursuant to subsection (a) or (b)(1)’’ and 

5 inserting ‘‘pursuant to subsection (a)(1)’’; and 

6 (D) in subsection (d), as so redesignated, by 

7 striking ‘‘pursuant to subsection (a) or (b)(1)’’ and 

8 inserting ‘‘pursuant to subsection (a)(1)’’. 

9 (2) Section 1861(e) of the Social Security Act (42 

10 U.S.C. 1395x(e)) is amended in the fourth sentence by 

11 striking ‘‘and (ii) is accredited by the Joint Commission 

12 on Accreditation of Hospitals, or is accredited by or ap13 proved by a program of the country in which such institu14 tion is located if the Secretary finds the accreditation or 

15 comparable approval standards of such program to be es16 sentially equivalent to those of the Joint Commission on 

17 Accreditation of Hospitals’’ and inserting ‘‘and (ii) is ac18 credited by a national accreditation body recognized by the 

19 Secretary under section 1865(a), or is accredited by or 

20 approved by a program of the country in which such insti21 tution is located if the Secretary finds the accreditation 

22 or comparable approval standards of such program to be 

23 essentially equivalent to those of such a national accredita24 tion body.’’. 


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1 (3) Section 1864(c) of the Social Security Act (42 

2 U.S.C. 1395aa(c)) is amended by striking ‘‘pursuant to 

3 subsection (a) or (b)(1) of section 1865’’ and inserting 

4 ‘‘pursuant to section 1865(a)(1)’’. 

5 (4) Section 1875(b) of the Social Security Act (42 

6 U.S.C. 1395ll(b)) is amended by striking ‘‘the Joint Com7 mission on Accreditation of Hospitals,’’ and inserting ‘‘na8 tional accreditation bodies under section 1865(a)’’. 

9 (5) Section 1834(a)(20)(B) of the Social Security Act 

10 (42 U.S.C. 1395m(a)(20)(B)) is amended by striking 

11 ‘‘section 1865(b)’’ and inserting ‘‘section 1865(a)’’. 

12 (6) Section 1852(e)(4)(C) of the Social Security Act 

13 (42 U.S.C. 1395w–22(e)(4)(C)) is amended by striking 

14 ‘‘section 1865(b)(2)’’ and inserting ‘‘section 1865(a)(2)’’. 

15 (c) AUTHORITY TO RECOGNIZE THE JOINT COMMIS16 SION AS A NATIONAL ACCREDITATION BODY.—The Sec17 retary of Health and Human Services may recognize the 

18 Joint Commission as a national accreditation body under 

19 section 1865 of the Social Security Act (42 U.S.C. 

20 1395bb), as amended by this section, upon such terms and 

21 conditions, and upon submission of such information, as 

22 the Secretary may require. 

23 (d) EFFECTIVE DATE; TRANSITION RULE.—(1) Sub24 ject to paragraph (2), the amendments made by this sec25 tion shall apply with respect to accreditations of hospitals 


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1 granted on or after the date that is 24 months after the 

2 date of the enactment of this Act. 

3 (2) For purposes of title XVIII of the Social Security 

4 Act (42 U.S.C. 1395 et seq.), the amendments made by 

5 this section shall not effect the accreditation of a hospital 

6 by the Joint Commission, or under accreditation or com7 parable approval standards found to be essentially equiva8 lent to accreditation or approval standards of the Joint 

9 Commission, for the period of time applicable under such 

10 accreditation. 

11 Subtitle C—Provisions Relating to 

12 Part B 

13 PART I—PHYSICIANS’ SERVICES 

14 SEC. 131. PHYSICIAN PAYMENT, EFFICIENCY, AND QUALITY 

15 IMPROVEMENTS. 

16 (a) IN GENERAL.— 

17 (1) INCREASE IN UPDATE FOR THE SECOND

18 HALF OF 2008 AND FOR 2009.— 

19 (A) FOR THE SECOND HALF OF 2008.— 

20 Section 1848(d)(8) of the Social Security Act 

21 (42 U.S.C. 1395w–4(d)(8)), as added by section 

22 101 of the Medicare, Medicaid, and SCHIP Ex23 tension Act of 2007 (Public Law 110–173), is 

24 amended— 


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1 (i) in the heading, by striking ‘‘A POR2 TION OF’’; 

3 (ii) in subparagraph (A), by striking 

4 ‘‘for the period beginning on January 1, 

5 2008, and ending on June 30, 2008,’’; and 

6 (iii) in subparagraph (B)— 

7 (I) in the heading, by striking 

8 ‘‘THE REMAINING PORTION OF 2008

9 AND’’; and 

10 (II) by striking ‘‘for the period 

11 beginning on July 1, 2008, and end12 ing on December 31, 2008, and’’. 

13 (B) FOR 2009.—Section 1848(d) of the So14 cial Security Act (42 U.S.C. 1395w–4(d)), as 

15 amended by section 101 of the Medicare, Med16 icaid, and SCHIP Extension Act of 2007 (Pub17 lic Law 110–173), is amended by adding at the 

18 end the following new paragraph: 

19 ‘‘(9) UPDATE FOR 2009.— 

20 ‘‘(A) IN GENERAL.—Subject to paragraphs 

21 (7)(B) and (8)(B), in lieu of the update to the 

22 single conversion factor established in para23 graph (1)(C) that would otherwise apply for 

24 2009, the update to the single conversion factor 

25 shall be 1.1 percent. 


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1 ‘‘(B) NO EFFECT ON COMPUTATION OF

2 CONVERSION FACTOR FOR 2010 AND SUBSE3 QUENT YEARS.—The conversion factor under 

4 this subsection shall be computed under para5 graph (1)(A) for 2010 and subsequent years as 

6 if subparagraph (A) had never applied.’’. 

7 (2) BENEFICIARY PREMIUM PROTECTION.—Sec8 tion 1839(g) of the Social Security Act (42 U.S.C. 

9 1395r(g)) is amended— 

10 (A) by redesignating paragraphs (1) and 

11 (2) as subparagraphs (A) and (B), respectively, 

12 and moving such subparagraphs 2 ems to the 

13 right; 

14 (B) in the matter preceding paragraph (1), 

15 by striking ‘‘shall exclude an estimate’’ and in16 serting ‘‘shall exclude— 

17 ‘‘(1) an estimate’’; and 

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

19 paragraph: 

20 ‘‘(2) with respect to the monthly premium rate 

21 under subsection (a)(3) for 2009, 

22 ø$lllllllll¿ of benefits and adminis23 trative costs.’’. 

24 (3) REVISION OF THE PHYSICIAN ASSISTANCE

25 AND QUALITY INITIATIVE FUND.—Section 1848(l)(2) 


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1 of the Social Security Act (42 U.S.C. 1395w– 

2 4(l)(2)), as amended by section 101(a)(2) of the 

3 Medicare, Medicaid, and SCHIP Extension Act of 

4 2007 (Public Law 110–173), is amended— 

5 (A) in subparagraph (A)— 

6 (i) by striking clause (i)(III); and 

7 (ii) by striking clause (ii)(III); and 

8 (B) in subparagraph (B)— 

9 (i) in clause (i), by adding ‘‘and’’ at 

10 the end; 

11 (ii) in clause (ii), by striking ‘‘; and’’ 

12 and inserting a period; and 

13 (iii) by striking clause (iii). 

14 (b) EXTENSION AND IMPROVEMENT OF THE QUAL15 ITY REPORTING SYSTEM.— 

16 (1) SYSTEM.—Section 1848(k)(2) of the Social 

17 Security Act (42 U.S.C. 1395w–4(k)(2)), as amend18 ed by section 101(b)(1) of the Medicare, Medicaid, 

19 and SCHIP Extension Act of 2007 (Public Law 

20 110–173), is amended by adding at the end the fol21 lowing new subparagraphs: 

22 ‘‘(C) FOR 2010 AND SUBSEQUENT

23 YEARS.— 

24 ‘‘(i) IN GENERAL.—Subject to clause 

25 (ii), for purposes of reporting data on qualVerDate Aug 31 2005 00:59 Jun 10, 2008 Jkt 069200 PO 00000 Frm 00071 Fmt 6652 Sfmt 6201 E:\BILLS\S3101.PCS S3101

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1 ity measures for covered professional serv2 ices furnished during 2010 and each subse3 quent year, subject to subsection 

4 (m)(3)(C), the quality measures (including 

5 electronic prescribing quality measures) 

6 specified under this paragraph shall be 

7 such measures selected by the Secretary 

8 from measures that have been endorsed by 

9 the entity with a contract with the Sec10 retary under section 1890(a). 

11 ‘‘(ii) EXCEPTION.—In the case of a 

12 specified area or medical topic determined 

13 appropriate by the Secretary for which a 

14 feasible and practical measure has not 

15 been endorsed by the entity with a contract 

16 under section 1890(a), the Secretary may 

17 specify a measure that is not so endorsed 

18 as long as due consideration is given to 

19 measures that have been endorsed or 

20 adopted by a consensus organization iden21 tified by the Secretary, such as the AQA 

22 alliance. 

23 ‘‘(D) OPPORTUNITY TO PROVIDE INPUT ON

24 MEASURES FOR 2009 AND SUBSEQUENT

25 YEARS.—For each quality measure (including 


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1 an electronic prescribing quality measure) 

2 adopted by the Secretary under subparagraph 

3 (B) (with respect to 2009) or subparagraph 

4 (C), the Secretary shall ensure that eligible pro5 fessionals have the opportunity to provide input 

6 during the development, endorsement, or selec7 tion of measures applicable to services they fur8 nish.’’. 

9 (2) REDESIGNATION OF REPORTING SYSTEM.— 

10 Subsection (c) of section 101 of division B of the 

11 Tax Relief and Health Care Act of 2006 (42 U.S.C. 

12 1395w–4 note), as amended by section 101(b)(2) of 

13 the Medicare, Medicaid, and SCHIP Extension Act 

14 of 2007 (Public Law 110–173), is redesignated as 

15 subsection (m) of section 1848 of the Social Security 

16 Act. 

17 (3) INCENTIVE PAYMENTS UNDER REPORTING

18 SYSTEM.—Section 1848(m) of the Social Security 

19 Act, as redesignated by paragraph (2), is amended— 

20 (A) by amending the heading to read as 

21 follows: ‘‘INCENTIVE PAYMENTS FOR QUALITY

22 REPORTING’’; 

23 (B) by striking paragraph (1) and insert24 ing the following: 

25 ‘‘(1) INCENTIVE PAYMENTS.— 


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1 ‘‘(A) IN GENERAL.—For 2007 through 

2 2010, with respect to covered professional serv3 ices furnished during a reporting period by an 

4 eligible professional, if— 

5 ‘‘(i) there are any quality measures 

6 that have been established under the physi7 cian reporting system that are applicable 

8 to any such services furnished by such pro9 fessional for such reporting period; and 

10 ‘‘(ii) the eligible professional satisfac11 torily submits (as determined under this 

12 subsection) to the Secretary data on such 

13 quality measures in accordance with such 

14 reporting system for such reporting period, 

15 in addition to the amount otherwise paid under 

16 this part, there also shall be paid to the eligible 

17 professional (or to an employer or facility in the 

18 cases described in clause (A) of section 

19 1842(b)(6)) or, in the case of a group practice 

20 under paragraph (3)(C), to the group practice, 

21 from the Federal Supplementary Medical Insur22 ance Trust Fund established under section 

23 1841 an amount equal to the applicable quality 

24 percent of the Secretary’s estimate (based on 

25 claims submitted not later than 2 months after 


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1 the end of the reporting period) of the allowed 

2 charges under this part for all such covered 

3 professional services furnished by the eligible 

4 professional (or, in the case of a group practice 

5 under paragraph (3)(C), by the group practice) 

6 during the reporting period. 

7 ‘‘(B) APPLICABLE QUALITY PERCENT.— 

8 For purposes of subparagraph (A), the term 

9 ‘applicable quality percent’ means— 

10 ‘‘(i) for 2007 and 2008, 1.5 percent; 

11 and 

12 ‘‘(ii) for 2009 and 2010, 2.0 per13 cent.’’; 

14 (C) by striking paragraph (3) and redesig15 nating paragraph (2) as paragraph (3); 

16 (D) in paragraph (3), as so redesignated— 

17 (i) in the matter preceding subpara18 graph (A), by striking ‘‘For purposes’’ and 

19 inserting the following: 

20 ‘‘(A) IN GENERAL.—For purposes’’; 

21 (ii) by redesignating subparagraphs 

22 (A) and (B) as clauses (i) and (ii), respec23 tively, and moving the indentation of such 

24 clauses 2 ems to the right; 


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1 (iii) in subparagraph (A), as added by 

2 clause (i), by adding at the end the fol3 lowing flush sentence: 

4 ‘‘For years after 2008, quality measures for 

5 purposes of this subparagraph shall not include 

6 electronic prescribing quality measures.’’; and 

7 (iv) by adding at the end the following 

8 new subparagraphs: 

9 ‘‘(C) SATISFACTORY REPORTING MEAS10 URES FOR GROUP PRACTICES.— 

11 ‘‘(i) IN GENERAL.—By January 1, 

12 2010, the Secretary shall establish and 

13 have in place a process under which eligi14 ble professionals in a group practice (as 

15 defined by the Secretary) shall be treated 

16 as satisfactorily submitting data on quality 

17 measures under subparagraph (A) and as 

18 meeting the requirement described in sub19 paragraph (B)(ii) for covered professional 

20 services for a reporting period (or, for pur21 poses of subsection (a)(5), for a reporting 

22 period for a year) if, in lieu of reporting 

23 measures under subsection (k)(2)(C), the 

24 group practice reports measures deter25 mined appropriate by the Secretary, such 


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1 as measures that target high-cost chronic 

2 conditions and preventive care, in a form 

3 and manner, and at a time, specified by 

4 the Secretary. 

5 ‘‘(ii) STATISTICAL SAMPLING

6 MODEL.—The process under clause (i) 

7 shall provide for the use of a statistical 

8 sampling model to submit data on meas9 ures, such as the model used under the 

10 Physician Group Practice demonstration 

11 project under section 1866A. 

12 ‘‘(iii) NO DOUBLE PAYMENTS.—Pay13 ments to a group practice under this sub14 section by reason of the process under 

15 clause (i) shall be in lieu of the payments 

16 that would otherwise be made under this 

17 subsection to eligible professionals in the 

18 group practice for satisfactorily submitting 

19 data on quality measures. 

20 ‘‘(D) AUTHORITY TO REVISE SATISFAC21 TORILY REPORTING DATA.—For years after 

22 2009, the Secretary, in consultation with stake23 holders and experts, may revise the criteria 

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1 graph (A) and the criteria for submitting data 

2 on electronic prescribing quality measures 

3 under subparagraph (B)(ii).’’; 

4 (E) in paragraph (5)— 

5 (i) in subparagraph (C), by inserting 

6 ‘‘for 2007, 2008, and 2009,’’ after ‘‘provi7 sion of law,’’; 

8 (ii) in subparagraph (D)— 

9 (I) in clause (i)— 

10 (aa) by inserting ‘‘for 2007 

11 and 2008’’ after ‘‘under this sub12 section’’; and 

13 (bb) by striking ‘‘paragraph 

14 (2)’’ and inserting ‘‘this sub15 section’’; 

16 (II) in clause (ii), by striking 

17 ‘‘shall’’ and inserting ‘‘may establish 

18 procedures to’’; and 

19 (III) in clause (iii)— 

20 (aa) by inserting ‘‘(or, in the 

21 case of a group practice under 

22 paragraph (3)(C), the group 

23 practice)’’ after ‘‘an eligible pro24 fessional’’; 


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1 (bb) by striking ‘‘bonus in2 centive payment’’ and inserting 

3 ‘‘incentive payment under this 

4 subsection’’; and 

5 (cc) by adding at the end 

6 the following new sentence: ‘‘If 

7 such payments for such period 

8 have already been made, the Sec9 retary shall recoup such pay10 ments from the eligible profes11 sional (or the group practice).’’; 

12 (iii) in subparagraph (E)— 

13 (I) by striking ‘‘(I) IN GEN14 ERAL.—’’; 

15 (II) by striking clause (ii); 

16 (III) by redesignating subclauses 

17 (I) through (IV) as clauses (i) 

18 through (iv), respectively, and moving 

19 the indentation of such clauses 2 ems 

20 to the left; 

21 (IV) in clause (ii), as so redesig22 nated, by striking ‘‘paragraph (2)’’ 

23 and inserting ‘‘this subsection’’; and 

24 (V) in clause (iv), as so redesig25 nated— 


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1 (aa) by striking ‘‘the bonus’’ 

2 and inserting ‘‘any’’; and 

3 (bb) by inserting ‘‘and the 

4 payment adjustment under sub5 section (a)(5)(A)’’ before the pe6 riod at the end; 

7 (iv) in subparagraph (F)— 

8 (I) by striking ‘‘2009, paragraph 

9 (3) shall not apply, and’’ and insert10 ing ‘‘subsequent years,’’; and 

11 (II) by striking ‘‘paragraph (2)’’ 

12 and inserting ‘‘this subsection’’; and 

13 (v) by adding at the end the following 

14 new subparagraph: 

15 ‘‘(G) POSTING ON WEBSITE.—The Sec16 retary shall post on the Internet website of the 

17 Centers for Medicare & Medicaid Services, in an 

18 easily understandable format, a list of the 

19 names of the following: 

20 ‘‘(i) The eligible professionals (or, in 

21 the case of reporting under paragraph 

22 (3)(C), the group practices) who satisfac23 torily submitted data on quality measures 

24 under this subsection. 


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1 ‘‘(ii) The eligible professionals (or, in 

2 the case of reporting under paragraph 

3 (3)(C), the group practices) who are suc4 cessful electronic prescribers.’’; and 

5 (F) in paragraph (6), by striking subpara6 graph (C) and inserting the following: 

7 ‘‘(C) REPORTING PERIOD.— 

8 ‘‘(i) IN GENERAL.—Subject to clauses 

9 (ii) and (iii), the term ‘reporting period’ 

10 means— 

11 ‘‘(I) for 2007, the period begin12 ning on July 1, 2007, and ending on 

13 December 31, 2007; and 

14 ‘‘(II) for 2008, 2009, 2010, and 

15 2011, the entire year. 

16 ‘‘(ii) AUTHORITY TO REVISE REPORT17 ING PERIOD.—For years after 2009, the 

18 Secretary may revise the reporting period 

19 under clause (i) if the Secretary deter20 mines such revision is appropriate, pro21 duces valid results on measures reported, 

22 and is consistent with the goals of maxi23 mizing scientific validity and reducing ad24 ministrative burden. If the Secretary re25 vises such period pursuant to the preceding 


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1 sentence, the term ‘reporting period’ shall 

2 mean such revised period. 

3 ‘‘(iii) REFERENCE.—Any reference in 

4 this subsection to a reporting period with 

5 respect to the application of subsection 

6 (a)(5) shall be deemed a reference to the 

7 reporting period under subparagraph 

8 (D)(iii) of such subsection.’’. 

9 (4) INCLUSION OF QUALIFIED AUDIOLOGISTS

10 AS ELIGIBLE PROFESSIONALS.— 

11 (A) IN GENERAL.—Section 1848(k)(3)(B) 

12 of the Social Security Act (42 U.S.C. 1395w– 

13 4(k)(3)(B)), is amended by adding at the end 

14 the following new clause: 

15 ‘‘(iv) Beginning with 2009, a qualified 

16 audiologist (as defined in section 

17 1861(ll)(3)(B)).’’. 

18 (B) NO CHANGE IN BILLING.—Nothing in 

19 the amendment made by subparagraph (A) 

20 shall be construed to change the way in which 

21 billing for audiology services (as defined in sec22 tion 1861(ll)(2) of the Social Security Act (42 

23 U.S.C. 1395x(ll)(2))) occurs under title XVIII 

24 of such Act as of July 1, 2008. 


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1 (5) CONFORMING AMENDMENTS.—Section 

2 1848(m) of the Social Security Act, as added and 

3 amended by paragraphs (2) and (3), is amended— 

4 (A) in paragraph (5)— 

5 (i) in subparagraph (A)— 

6 (I) by striking ‘‘section 1848(k) 

7 of the Social Security Act, as added 

8 by subsection (b),’’ and inserting 

9 ‘‘subsection (k)’’; and 

10 (II) by striking ‘‘such section’’ 

11 and inserting ‘‘such subsection’’; 

12 (ii) in subparagraph (B), by striking 

13 ‘‘of the Social Security Act (42 U.S.C. 

14 1395l)’’; 

15 (iii) in subparagraph (E), in the mat16 ter preceding clause (i), by striking ‘‘1869 

17 or 1878 of the Social Security Act or oth18 erwise’’ and inserting ‘‘1869, section 1878, 

19 or otherwise’’; and 

20 (iv) in subparagraph (F)— 

21 (I) by striking ‘‘paragraph (2)(B) 

22 of section 1848(k) of the Social Secu23 rity Act (42 U.S.C. 1395w–4(k))’’ and 

24 inserting ‘‘subsection (k)(2)(B)’’; and 


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1 (II) by striking ‘‘paragraph (4) 

2 of such section’’ and inserting ‘‘sub3 section (k)(4)’’; 

4 (B) in paragraph (6)— 

5 (i) in subparagraph (A), by striking 

6 ‘‘section 1848(k)(3) of the Social Security 

7 Act, as added by subsection (b)’’ and in8 serting ‘‘subsection (k)(3)’’; and 

9 (ii) in subparagraph (B), by striking 

10 ‘‘section 1848(k) of the Social Security 

11 Act, as added by subsection (b)’’ and in12 serting ‘‘subsection (k)’’; and 

13 (C) by striking paragraph (6)(D). 

14 (6) NO AFFECT ON INCENTIVE PAYMENTS FOR

15 2007 OR 2008.—Nothing in the amendments made by 

16 this subsection or section 132 shall affect the oper17 ation of the provisions of section 1848(m) of the So18 cial Security Act, as redesignated and amended by 

19 such subsection and section, with respect to 2007 or 

20 2008. 

21 (c) PHYSICIAN FEEDBACK PROGRAM TO IMPROVE

22 EFFICIENCY AND CONTROL COSTS.— 

23 (1) IN GENERAL.—Section 1848 of the Social 

24 Security Act (42 U.S.C. 1395w–4), as amended by 


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1 subsection (b), is amended by adding at the end the 

2 following new subsection: 

3 ‘‘(n) PHYSICIAN FEEDBACK PROGRAM.— 

4 ‘‘(1) ESTABLISHMENT.— 

5 ‘‘(A) IN GENERAL.—The Secretary shall 

6 establish a Physician Feedback Program (in 

7 this subsection referred to as the ‘Program’) 

8 under which the Secretary shall use claims data 

9 under this title (and may use other data) to 

10 provide confidential reports to physicians (and, 

11 as determined appropriate by the Secretary, to 

12 groups of physicians) that measure the re13 sources involved in furnishing care to individ14 uals under this title. If determined appropriate 

15 by the Secretary, the Secretary may include in16 formation on the quality of care furnished to in17 dividuals under this title by the physician (or 

18 group of physicians) in such reports. 

19 ‘‘(B) RESOURCE USE.—The resources de20 scribed in subparagraph (A) may be meas21 ured— 

22 ‘‘(i) on an episode basis; 

23 ‘‘(ii) on a per capita basis; or 

24 ‘‘(iii) on both an episode and a per 

25 capita basis. 


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1 ‘‘(2) IMPLEMENTATION.—The Secretary shall 

2 implement the Program by not later than January 

3 1, 2009. 

4 ‘‘(3) DATA FOR REPORTS.—To the extent prac5 ticable, reports under the Program shall be based on 

6 the most recent data available. 

7 ‘‘(4) AUTHORITY TO FOCUS APPLICATION.—The 

8 Secretary may focus the application of the Program 

9 as appropriate, such as focusing the Program on— 

10 ‘‘(A) physician specialties that account for 

11 a certain percentage of all spending for physi12 cians’ services under this title; 

13 ‘‘(B) physicians who treat conditions that 

14 have a high cost or a high volume, or both, 

15 under this title; 

16 ‘‘(C) physicians who use a high amount of 

17 resources compared to other physicians; 

18 ‘‘(D) physicians practicing in certain geo19 graphic areas; or 

20 ‘‘(E) physicians who treat a minimum 

21 number of individuals under this title. 

22 ‘‘(5) AUTHORITY TO EXCLUDE CERTAIN INFOR23 MATION IF INSUFFICIENT INFORMATION.—The Sec24 retary may exclude certain information regarding a 

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1 spect to a physician (or group of physicians) if the 

2 Secretary determines that there is insufficient infor3 mation relating to that service to provide a valid re4 port on that service. 

5 ‘‘(6) ADJUSTMENT OF DATA.—To the extent 

6 practicable, the Secretary shall make appropriate ad7 justments to the data used in preparing reports 

8 under the Program, such as adjustments to take 

9 into account variations in health status and other 

10 patient characteristics. 

11 ‘‘(7) EDUCATION AND OUTREACH.—The Sec12 retary shall provide for education and outreach ac13 tivities to physicians on the operation of, and meth14 odologies employed under, the Program. 

15 ‘‘(8) DISCLOSURE EXEMPTION.—Reports under 

16 the Program shall be exempt from disclosure under 

17 section 552 of title 5, United States Code.’’. 

18 (2) GAO STUDY AND REPORT ON THE PHYSI19 CIAN FEEDBACK PROGRAM.— 

20 (A) STUDY.—The Comptroller General of 

21 the United States shall conduct a study of the 

22 Physician Feedback Program conducted under 

23 section 1848(n) of the Social Security Act, as 

24 added by paragraph (1), including the imple25 mentation of the Program. 


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1 (B) REPORT.—Not later than March 1, 

2 2011, the Comptroller General of the United 

3 States shall submit a report to Congress con4 taining the results of the study conducted under 

5 subparagraph (A), together with recommenda6 tions for such legislation and administrative ac7 tion as the Comptroller General determines ap8 propriate. 

9 (d) PLAN FOR TRANSITION TO VALUE-BASED PUR10 CHASING PROGRAM FOR PHYSICIANS AND OTHER PRACTI11 TIONERS.— 

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

13 Human Services shall develop a plan to transition to 

14 a value-based purchasing program for payment 

15 under the Medicare program for covered professional 

16 services (as defined in section 1848(k)(3)(A) of the 

17 Social Security Act (42 U.S.C. 1395w–4(k)(3)(A))). 

18 (2) REPORT.—Not later than May 1, 2010, the 

19 Secretary of Health and Human Services shall sub20 mit a report to Congress containing the plan devel21 oped under paragraph (1), together with rec22 ommendations for such legislation and administra23 tive action as the Secretary determines appropriate. 


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1 SEC. 132. INCENTIVES FOR ELECTRONIC PRESCRIBING. 

2 (a) INCENTIVE PAYMENTS.—Section 1848(m) of the 

3 Social Security Act, as added and amended by section 

4 131(b), is amended— 

5 (1) by inserting after paragraph (1), the fol6 lowing new paragraph: 

7 ‘‘(2) INCENTIVE PAYMENTS FOR ELECTRONIC

8 PRESCRIBING.— 

9 ‘‘(A) IN GENERAL.—For 2009 through 

10 2013, with respect to covered professional serv11 ices furnished during a reporting period by an 

12 eligible professional, if the eligible professional 

13 is a successful electronic prescriber for such re14 porting period, in addition to the amount other15 wise paid under this part, there also shall be 

16 paid to the eligible professional (or to an em17 ployer or facility in the cases described in 

18 clause (A) of section 1842(b)(6)) or, in the case 

19 of a group practice under paragraph (3)(C), to 

20 the group practice, from the Federal Supple21 mentary Medical Insurance Trust Fund estab22 lished under section 1841 an amount equal to 

23 the applicable electronic prescribing percent of 

24 the Secretary’s estimate (based on claims sub25 mitted not later than 2 months after the end of 

26 the reporting period) of the allowed charges 


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1 under this part for all such covered professional 

2 services furnished by the eligible professional 

3 (or, in the case of a group practice under para4 graph (3)(C), by the group practice) during the 

5 reporting period. 

6 ‘‘(B) LIMITATION WITH RESPECT TO ELEC7 TRONIC PRESCRIBING QUALITY MEASURES.— 

8 The provisions of this paragraph and subsection 

9 (a)(5) shall not apply to an eligible professional 

10 (or, in the case of a group practice under para11 graph (3)(C), to the group practice) if, for the 

12 reporting period (or, for purposes of subsection 

13 (a)(5), for the reporting period for a year)— 

14 ‘‘(i) the allowed charges under this 

15 part for all covered professional services 

16 furnished by the eligible professional (or 

17 group, as applicable) for the codes to 

18 which the electronic prescribing quality 

19 measure applies (as identified by the Sec20 retary and published on the Internet 

21 website of the Centers for Medicare & 

22 Medicaid Services as of January 1, 2008, 

23 and as subsequently modified by the Sec24 retary) are less than 10 percent of the 

25 total of the allowed charges under this part 


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1 for all such covered professional services 

2 furnished by the eligible professional (or 

3 the group, as applicable); or 

4 ‘‘(ii) if determined appropriate by the 

5 Secretary, the eligible professional does not 

6 submit (including both electronically and 

7 nonelectronically) a sufficient number (as 

8 determined by the Secretary) of prescrip9 tions under part D. 

10 If the Secretary makes the determination to 

11 apply clause (ii) for a period, then clause (i) 

12 shall not apply for such period. 

13 ‘‘(C) APPLICABLE ELECTRONIC PRE14 SCRIBING PERCENT.—For purposes of subpara15 graph (A), the term ‘applicable electronic pre16 scribing percent’ means— 

17 ‘‘(i) for 2009 and 2010, 2.0 percent; 

18 ‘‘(ii) for 2011 and 2012, 1.0 percent; 

19 and 

20 ‘‘(iii) for 2013, 0.5 percent.’’; 

21 (2) in paragraph (3), as redesignated by section 

22 131(b)— 

23 (A) in the heading, by inserting ‘‘AND SUC24 CESSFUL ELECTRONIC PRESCRIBER’’ after ‘‘RE25 PORTING’’; and 


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1 (B) by inserting after subparagraph (A) 

2 the following new subparagraph: 

3 ‘‘(B) SUCCESSFUL ELECTRONIC PRE4 SCRIBER.— 

5 ‘‘(i) IN GENERAL.—For purposes of 

6 paragraph (2) and subsection (a)(5), an el7 igible professional shall be treated as a 

8 successful electronic prescriber for a re9 porting period (or, for purposes of sub10 section (a)(5), for the reporting period for 

11 a year) if the eligible professional meets 

12 the requirement described in clause (ii), or, 

13 if the Secretary determines appropriate, 

14 the requirement described in clause (iii). If 

15 the Secretary makes the determination 

16 under the preceding sentence to apply the 

17 requirement described in clause (iii) for a 

18 period, then the requirement described in 

19 clause (ii) shall not apply for such period. 

20 ‘‘(ii) REQUIREMENT FOR SUBMITTING

21 DATA ON ELECTRONIC PRESCRIBING QUAL22 ITY MEASURES.—The requirement de23 scribed in this clause is that, with respect 

24 to covered professional services furnished 

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1 ing period (or, for purposes of subsection 

2 (a)(5), for the reporting period for a year), 

3 if there are any electronic prescribing qual4 ity measures that have been established 

5 under the physician reporting system and 

6 are applicable to any such services fur7 nished by such professional for the period, 

8 such professional reported each such meas9 ure under such system in at least 50 per10 cent of the cases in which such measure is 

11 reportable by such professional under such 

12 system. 

13 ‘‘(iii) REQUIREMENT FOR ELECTRONI14 CALLY PRESCRIBING UNDER PART D.—The 

15 requirement described in this clause is that 

16 the eligible professional electronically sub17 mitted a sufficient number (as determined 

18 by the Secretary) of prescriptions under 

19 part D during the reporting period (or, for 

20 purposes of subsection (a)(5), for the re21 porting period for a year). 

22 ‘‘(iv) USE OF PART D DATA.—Not23 withstanding sections 1860D–15(d)(2)(B) 

24 and 1860D–15(f)(2), the Secretary may 

25 use data regarding drug claims submitted 


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1 for purposes of section 1860D–15 that are 

2 necessary for purposes of clause (iii), para3 graph (2)(B)(ii), and paragraph (5)(G). 

4 ‘‘(v) STANDARDS FOR ELECTRONIC

5 PRESCRIBING.—To the extent practicable, 

6 in determining whether eligible profes7 sionals meet the requirements under 

8 clauses (ii) and (iii) for purposes of clause 

9 (i), the Secretary shall ensure that eligible 

10 professionals utilize electronic prescribing 

11 systems in compliance with standards es12 tablished for such systems pursuant to the 

13 Part D Electronic Prescribing Program 

14 under section 1860D–4(e).’’; and 

15 (3) in paragraph (5)(E), by striking clause (iii) 

16 and inserting the following new clause: 

17 ‘‘(iii) the determination of a successful 

18 electronic prescriber under paragraph (3), 

19 the limitation under paragraph (2)(B), and 

20 the exception under subsection (a)(5)(B); 

21 and’’. 

22 (b) INCENTIVE PAYMENT ADJUSTMENT.—Section 

23 1848(a) of the Social Security Act (42 U.S.C. 1395w– 

24 4(a)) is amended by adding at the end the following new 

25 paragraph: 


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1 ‘‘(5) INCENTIVES FOR ELECTRONIC PRE2 SCRIBING.— 

3 ‘‘(A) ADJUSTMENT.— 

4 ‘‘(i) IN GENERAL.—Subject to sub5 paragraph (B) and subsection (m)(2)(B), 

6 with respect to covered professional serv7 ices furnished by an eligible professional 

8 during 2012 or any subsequent year, if the 

9 eligible professional is not a successful 

10 electronic prescriber for the reporting pe11 riod for the year (as determined under 

12 subsection (m)(3)(B)), the fee schedule 

13 amount for such services furnished by such 

14 professional during the year (including the 

15 fee schedule amount for purposes of deter16 mining a payment based on such amount) 

17 shall be equal to the applicable percent of 

18 the fee schedule amount that would other19 wise apply to such services under this sub20 section (determined after application of 

21 paragraph (3) but without regard to this 

22 paragraph). 

23 ‘‘(ii) APPLICABLE PERCENT.—For 

24 purposes of clause (i), the term ‘applicable 

25 percent’ means— 


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1 ‘‘(I) for 2012, 99 percent; 

2 ‘‘(II) for 2012, 98.5 percent; and 

3 ‘‘(III) for 2014 and each subse4 quent year, 98 percent. 

5 ‘‘(B) SIGNIFICANT HARDSHIP EXCEP6 TION.—The Secretary may, on a case-by-case 

7 basis, exempt an eligible professional from the 

8 application of the payment adjustment under 

9 subparagraph (A) if the Secretary determines, 

10 subject to annual renewal, that compliance with 

11 the requirement for being a successful elec12 tronic prescriber would result in a significant 

13 hardship, such as in the case of an eligible pro14 fessional who practices in a rural area without 

15 sufficient Internet access. 

16 ‘‘(C) APPLICATION.— 

17 ‘‘(i) PHYSICIAN REPORTING SYSTEM

18 RULES.—Paragraphs (5), (6), and (8) of 

19 subsection (k) shall apply for purposes of 

20 this paragraph in the same manner as they 

21 apply for purposes of such subsection. 

22 ‘‘(ii) INCENTIVE PAYMENT VALIDA23 TION RULES.—Clauses (ii) and (iii) of sub24 section (m)(5)(D) shall apply for purposes 


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1 of this paragraph in a similar manner as 

2 they apply for purposes of such subsection. 

3 ‘‘(D) DEFINITIONS.—For purposes of this 

4 paragraph: 

5 ‘‘(i) ELIGIBLE PROFESSIONAL; COV6 ERED PROFESSIONAL SERVICES.—The 

7 terms ‘eligible professional’ and ‘covered 

8 professional services’ have the meanings 

9 given such terms in subsection (k)(3). 

10 ‘‘(ii) PHYSICIAN REPORTING SYS11 TEM.—The term ‘physician reporting sys12 tem’ means the system established under 

13 subsection (k). 

14 ‘‘(iii) REPORTING PERIOD.—The term 

15 ‘reporting period’ means, with respect to a 

16 year, a period specified by the Secretary.’’. 

17 (c) GAO REPORT ON ELECTRONIC PRESCRIBING.— 

18 Not later than September 1, 2012, the Comptroller Gen19 eral of the United States shall submit to Congress a report 

20 on the implementation of the incentives for electronic pre21 scribing established under the provisions of, and amend22 ments made by, this section. Such report shall include in23 formation regarding the following: 

24 (1) The percentage of eligible professionals (as 

25 defined in section 1848(k)(3) of the Social Security 


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1 Act (42 U.S.C. 1395w–4(k)(3))) that are using elec2 tronic prescribing systems, including a determination 

3 of whether less than 50 percent of eligible profes4 sionals are using electronic prescribing systems. 

5 (2) If less than 50 percent of eligible profes6 sionals are using electronic prescribing systems, rec7 ommendations for increasing the use of electronic 

8 prescribing systems by eligible professionals, such as 

9 changes to the incentive payment adjustments estab10 lished under section 1848(a)(5) of such Act, as 

11 added by subsection (b). 

12 (3) The estimated savings to the Medicare pro13 gram under title XVIII of such Act resulting from 

14 the use of electronic prescribing systems. 

15 (4) Reductions in avoidable medical errors re16 sulting from the use of electronic prescribing sys17 tems. 

18 (5) The extent to which the privacy and secu19 rity of the personal health information of Medicare 

20 beneficiaries is protected when such beneficiaries’ 

21 prescription drug data and usage information is 

22 used for purposes other than their direct clinical 

23 care, including— 

24 (A) whether information identifying the 

25 beneficiary is, and remains, removed from data 


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1 regarding the beneficiary’s prescription drug 

2 utilization; and 

3 (B) the extent to which current law re4 quires sufficient and appropriate oversight and 

5 audit capabilities to monitor the practice of pre6 scription drug data mining. 

7 (6) Such other recommendations and adminis8 trative action as the Comptroller General determines 

9 to be appropriate. 

10 SEC. 133. EXPANDING ACCESS TO PRIMARY CARE SERV11 ICES. 

12 (a) INCENTIVE PAYMENT PROGRAM FOR PRIMARY

13 CARE SERVICES FURNISHED IN PHYSICIAN SCARCITY

14 AREAS.— 

15 (1) IN GENERAL.—Section 1833 of the Social 

16 Security Act (42 U.S.C. 1395l) is amended by add17 ing at the end the following new subsection: 

18 ‘‘(v) INCENTIVE PAYMENTS FOR PRIMARY CARE

19 SERVICES FURNISHED IN PHYSICIAN SCARCITY AREAS.— 

20 ‘‘(1) IN GENERAL.—In the case of primary care 

21 services furnished on or after January 1, 2011, by 

22 a primary care physician in a primary care scarcity 

23 county, in addition to the amount of payment that 

24 would otherwise be made for such services under this 

25 part, there also shall be paid (on a monthly or quarVerDate Aug 31 2005 00:59 Jun 10, 2008 Jkt 069200 PO 00000 Frm 00099 Fmt 6652 Sfmt 6201 E:\BILLS\S3101.PCS S3101

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1 terly basis) an amount equal to 5 percent of the pay2 ment amount for the service under this part. 

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

4 ‘‘(A) PRIMARY CARE PHYSICIAN.—The 

5 term ‘primary care physician’ means a physi6 cian (as described in section 1861(r)(1)) for 

7 whom primary care services accounted for at 

8 least a specified percent (as determined by the 

9 Secretary) of the allowed charges under this 

10 part for such physician in a prior period as de11 termined appropriate by the Secretary. 

12 ‘‘(B) PRIMARY CARE SCARCITY COUNTY.— 

13 The term ‘primary care scarcity county’ means 

14 the primary care scarcity counties that the Sec15 retary was using under subsection (u) with re16 spect to physicians’ services furnished on De17 cember 31, 2007. 

18 ‘‘(C) PRIMARY CARE SERVICES.—The term 

19 ‘primary care services’ means procedure codes 

20 for services in the category of the Healthcare 

21 Common Procedure Coding System, as estab22 lished by the Secretary under section 

23 1848(c)(5) (as of December 31, 2008 and as 

24 subsequently modified by the Secretary) con25 sisting of evaluation and management services, 


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1 but limited to such procedure codes in the cat2 egory of office or other outpatient services, and 

3 consisting of subcategories of such procedure 

4 codes for services for both new and established 

5 patients. 

6 ‘‘(3) JUDICIAL REVIEW.—There shall be no ad7 ministrative or judicial review under section 1869, 

8 1878, or otherwise, respecting the identification of 

9 primary care physicians, primary care specialty 

10 areas, or primary care services under this sub11 section.’’. 

12 (2) CONFORMING AMENDMENT.—Section 

13 1834(g)(2)(B) of the Social Security Act (42 U.S.C. 

14 1395m(g)(2)(B)) is amended by adding at the end 

15 the following sentence: ‘‘Section 1833(v) shall not be 

16 taken into account in determining the amounts that 

17 would otherwise be paid pursuant to the preceding 

18 sentence.’’. 

19 (b) REVISIONS TO THE MEDICARE MEDICAL HOME

20 DEMONSTRATION PROJECT.— 

21 (1) AUTHORITY TO EXPAND.—Section 204(b) 

22 of division B of the Tax Relief and Health Care Act 

23 of 2006 (42 U.S.C. 1395b–1 note) is amended— 


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1 (A) in paragraph (1), by striking ‘‘The 

2 project’’ and inserting ‘‘Subject to paragraph 

3 (3), the project’’; and 

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

5 paragraph: 

6 ‘‘(3) EXPANSION.—The Secretary may expand 

7 the duration and the scope of the project under 

8 paragraph (1), to an extent determined appropriate 

9 by the Secretary, if the Secretary determines that 

10 such expansion will result in any of the following 

11 conditions being met: 

12 ‘‘(A) The expansion of the project is ex13 pected to improve the quality of patient care 

14 without increasing spending under the Medicare 

15 program (not taking into account amounts 

16 available under subsection (g)). 

17 ‘‘(B) The expansion of the project is ex18 pected to reduce spending under the Medicare 

19 program (not taking into account amounts 

20 available under subsection (g)) without reducing 

21 the quality of patient care.’’. 

22 (2) FUNDING AND APPLICATION.—Section 204 

23 of division B of the Tax Relief and Health Care Act 

24 of 2006 (42 U.S.C. 1395b–1 note) is amended by 

25 adding at the end the following new subsections: 


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1 ‘‘(g) FUNDING FROM SMI TRUST FUND.—There 

2 shall be available, from the Federal Supplementary Med3 ical Insurance Trust Fund (under section 1841 of the So4 cial Security Act (42 U.S.C. 1395t)), the amount of 

5 $100,000,000 to carry out the project. 

6 ‘‘(h) APPLICATION.—Chapter 35 of title 44, United 

7 States Code, shall not apply to the conduct of the 

8 project.’’. 

9 (c) APPLICATION OF BUDGET-NEUTRALITY ADJUS10 TOR TO CONVERSION FACTOR.—Section 1848(c)(2)(B) of 

11 the Social Security Act (42 U.S.C. 1395w–4(c)(2)(B)) is 

12 amended by inserting at the end the following new clause: 

13 ‘‘(iv) ALTERNATIVE APPLICATION OF

14 BUDGET-NEUTRALITY ADJUSTMENT.—Not15 withstanding subsection (d)(9)(A), effective 

16 for fee schedules established beginning 

17 with 2009, with respect to the 5-year re18 view of work relative value units used in 

19 fee schedules for 2007 and 2008, in lieu of 

20 continuing to apply budget-neutrality ad21 justments required under clause (ii) for 

22 2007 and 2008 to work relative value 

23 units, the Secretary shall apply such budg24 et-neutrality adjustments to the conversion 


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1 factor otherwise determined for years be2 ginning with 2009.’’. 

3 SEC. 134. EXTENSION OF FLOOR ON MEDICARE WORK GEO4 GRAPHIC ADJUSTMENT UNDER THE MEDI5 CARE PHYSICIAN FEE SCHEDULE. 

6 (a) IN GENERAL.—Section 1848(e)(1)(E) of the So7 cial Security Act (42 U.S.C. 1395w–4(e)(1)(E)), as 

8 amended by section 103 of the Medicare, Medicaid, and 

9 SCHIP Extension Act of 2007 (Public Law 110–173), is 

10 amended by striking ‘‘before July 1, 2008’’ and inserting 

11 ‘‘before January 1, 2010’’. 

12 (b) TREATMENT OF PHYSICIANS’ SERVICES FUR13 NISHED IN CERTAIN AREAS.—Section 1848(e)(1)(G) of 

14 the Social Security Act (42 U.S.C. 1395w–4(e)(1)(G)) is 

15 amended by adding at the end the following new sentence: 

16 ‘‘For purposes of payment for services furnished in the 

17 State described in the preceding sentence on or after Jan18 uary 1, 2009, after calculating the work geographic index 

19 in subparagraph (A)(iii), the Secretary shall increase the 

20 work geographic index to 1.5 if such index would otherwise 

21 be less than 1.5’’. 

22 (c) TECHNICAL CORRECTION.—Section 602(1) of the 

23 Medicare Prescription Drug, Improvement, and Mod24 ernization Act of 2003 (Public Law 108–173; 117 Stat. 

25 2301) is amended to read as follows: 


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1 ‘‘(1) in subparagraph (A), by striking ‘subpara2 graphs (B), (C), and (E)’ and inserting ‘subpara3 graphs (B), (C), (E), and (G)’; and’’. 

4 SEC. 135. IMAGING PROVISIONS. 

5 (a) ACCREDITATION REQUIREMENT.— 

6 (1) ACCREDITATION REQUIREMENT.—Section 

7 1834 of the Social Security Act (42 U.S.C. 1395m) 

8 is amended by inserting after subsection (d) the fol9 lowing new subsection: 

10 ‘‘(e) ACCREDITATION REQUIREMENT FOR ADVANCED

11 DIAGNOSTIC IMAGING SERVICES.— 

12 ‘‘(1) IN GENERAL.— 

13 ‘‘(A) IN GENERAL.—Beginning with Janu14 ary 1, 2012, with respect to the technical com15 ponent of advanced diagnostic imaging services 

16 for which payment is made under the fee sched17 ule established under section 1848(b) and that 

18 are furnished by a supplier, payment may only 

19 be made if such supplier is accredited by an ac20 creditation organization designated by the Sec21 retary under paragraph (2)(B)(i). 

22 ‘‘(B) ADVANCED DIAGNOSTIC IMAGING

23 SERVICES DEFINED.—In this subsection, the 

24 term ‘advanced diagnostic imaging services’ in25 cludes— 


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1 ‘‘(i) diagnostic magnetic resonance 

2 imaging, computed tomography, and nu3 clear medicine (including positron emission 

4 tomography); and 

5 ‘‘(ii) such other diagnostic imaging 

6 services, including services described in 

7 section 1848(b)(4)(B) (excluding X-ray, 

8 ultrasound, and fluoroscopy), as specified 

9 by the Secretary in consultation with phy10 sician specialty organizations and other 

11 stakeholders. 

12 ‘‘(C) SUPPLIER DEFINED.—In this sub13 section, the term ‘supplier’ has the meaning 

14 given such term in section 1861(d). 

15 ‘‘(2) ACCREDITATION ORGANIZATIONS.— 

16 ‘‘(A) FACTORS FOR DESIGNATION OF AC17 CREDITATION ORGANIZATIONS.—The Secretary 

18 shall consider the following factors in desig19 nating accreditation organizations under sub20 paragraph (B)(i) and in reviewing and modi21 fying the list of accreditation organizations des22 ignated pursuant to subparagraph (C): 

23 ‘‘(i) The ability of the organization to 

24 conduct timely reviews of accreditation ap25 plications. 


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1 ‘‘(ii) Whether the organization has es2 tablished a process for the timely integra3 tion of new advanced diagnostic imaging 

4 services into the organization’s accredita5 tion program. 

6 ‘‘(iii) Whether the organization uses 

7 random site visits, site audits, or other 

8 strategies for ensuring accredited suppliers 

9 maintain adherence to the criteria de10 scribed in paragraph (3). 

11 ‘‘(iv) The ability of the organization 

12 to take into account the capacities of sup13 pliers located in a rural area (as defined in 

14 section 1886(d)(2)(D)). 

15 ‘‘(v) Whether the organization has es16 tablished reasonable fees to be charged to 

17 suppliers applying for accreditation. 

18 ‘‘(vi) Such other factors as the Sec19 retary determines appropriate. 

20 ‘‘(B) DESIGNATION.—Not later than Janu21 ary 1, 2010, the Secretary shall designate orga22 nizations to accredit suppliers furnishing the 

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1 zations so designated may be modified pursuant 

2 to subparagraph (C). 

3 ‘‘(C) REVIEW AND MODIFICATION OF LIST

4 OF ACCREDITATION ORGANIZATIONS.— 

5 ‘‘(i) IN GENERAL.—The Secretary 

6 shall review the list of accreditation organi7 zations designated under subparagraph (B) 

8 taking into account the factors under sub9 paragraph (A). Taking into account the re10 sults of such review, the Secretary may, by 

11 regulation, modify the list of accreditation 

12 organizations designated under subpara13 graph (B). 

14 ‘‘(ii) SPECIAL RULE FOR ACCREDITA15 TIONS DONE PRIOR TO REMOVAL FROM

16 LIST OF DESIGNATED ACCREDITATION OR17 GANIZATIONS.—In the case where the Sec18 retary removes an organization from the 

19 list of accreditation organizations des20 ignated under subparagraph (B), any sup21 plier that is accredited by the organization 

22 during the period beginning on the date on 

23 which the organization is designated as an 

24 accreditation organization under subpara25 graph (B) and ending on the date on 


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1 which the organization is removed from 

2 such list shall be considered to have been 

3 accredited by an organization designated 

4 by the Secretary under subparagraph (B) 

5 for the remaining period such accreditation 

6 is in effect. 

7 ‘‘(3) CRITERIA FOR ACCREDITATION.—The Sec8 retary shall establish procedures to ensure that the 

9 criteria used by an accreditation organization des10 ignated under paragraph (2)(B) to evaluate a sup11 plier that furnishes the technical component of ad12 vanced diagnostic imaging services for the purpose 

13 of accreditation of such supplier is specific to each 

14 imaging modality. Such criteria shall include— 

15 ‘‘(A) standards for qualifications of med16 ical personnel who are not physicians and who 

17 furnish the technical component of advanced di18 agnostic imaging services; 

19 ‘‘(B) standards for qualifications and re20 sponsibilities of medical directors and super21 vising physicians, including standards that rec22 ognize the considerations described in para23 graph (4); 

24 ‘‘(C) procedures to ensure that equipment 

25 used in furnishing the technical component of 


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1 advanced diagnostic imaging services meets per2 formance specifications; 

3 ‘‘(D) standards that require the supplier 

4 have procedures in place to ensure the safety of 

5 persons who furnish the technical component of 

6 advanced diagnostic imaging services and indi7 viduals to whom such services are furnished; 

8 ‘‘(E) standards that require the establish9 ment and maintenance of a quality assurance 

10 and quality control program by the supplier 

11 that is adequate and appropriate to ensure the 

12 reliability, clarity, and accuracy of the technical 

13 quality of diagnostic images produced by such 

14 supplier; and 

15 ‘‘(F) any other standards or procedures 

16 the Secretary determines appropriate. 

17 ‘‘(4) RECOGNITION IN STANDARDS FOR THE

18 EVALUATION OF MEDICAL DIRECTORS AND SUPER19 VISING PHYSICIANS.—The standards described in 

20 paragraph (3)(B) shall recognize whether a medical 

21 director or supervising physician— 

22 ‘‘(A) in a particular specialty receives 

23 training in advanced diagnostic imaging serv24 ices in a residency program; 


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1 ‘‘(B) has attained, through experience, the 

2 necessary expertise to be a medical director or 

3 a supervising physician; 

4 ‘‘(C) has completed any continuing medical 

5 education courses relating to such services; or 

6 ‘‘(D) has met such other standards as the 

7 Secretary determines appropriate. 

8 ‘‘(5) RULE FOR ACCREDITATIONS MADE PRIOR

9 TO DESIGNATION.—In the case of a supplier that is 

10 accredited before January 1, 2010, by an accredita11 tion organization designated by the Secretary under 

12 paragraph (2)(B) as of January 1, 2010, such sup13 plier shall be considered to have been accredited by 

14 an organization designated by the Secretary under 

15 such paragraph as of January 1, 2012, for the re16 maining period such accreditation is in effect.’’. 

17 (2) CONFORMING AMENDMENTS.— 

18 (A) IN GENERAL.—Section 1862(a) of the 

19 Social Security Act (42 U.S.C. 1395y(a)) is 

20 amended— 

21 (i) in paragraph (21), by striking ‘‘or’’ 

22 at the end; 

23 (ii) in paragraph (22), by striking the 

24 period at the end and inserting ‘‘; or’’; and 


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1 (iii) by inserting after paragraph (22) 

2 the following new paragraph: 

3 ‘‘(23) which are the technical component of ad4 vanced diagnostic imaging services described in sec5 tion 1834(e)(1)(B) for which payment is made under 

6 the fee schedule established under section 1848(b) 

7 and that are furnished by a supplier (as defined in 

8 section 1861(d)), if such supplier is not accredited 

9 by an accreditation organization designated by the 

10 Secretary under section 1834(e)(2)(B).’’. 

11 (B) EFFECTIVE DATE.—The amendments 

12 made by this paragraph shall apply to advanced 

13 diagnostic imaging services furnished on or 

14 after January 1, 2012. 

15 (b) DEMONSTRATION PROJECT TO ASSESS THE AP16 PROPRIATE USE OF IMAGING SERVICES.— 

17 (1) CONDUCT OF DEMONSTRATION PROJECT.— 

18 (A) IN GENERAL.—The Secretary of 

19 Health and Human Services (in this section re20 ferred to as the ‘‘Secretary’’) shall conduct a 

21 demonstration project using the models de22 scribed in paragraph (2)(E) to collect data re23 garding physician compliance with appropriate24 ness criteria selected under paragraph (2)(D) in 

25 order to determine the appropriateness of adVerDate Aug 31 2005 00:59 Jun 10, 2008 Jkt 069200 PO 00000 Frm 00112 Fmt 6652 Sfmt 6201 E:\BILLS\S3101.PCS S3101

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1 vanced diagnostic imaging services furnished to 

2 Medicare beneficiaries. 

3 (B) ADVANCED DIAGNOSTIC IMAGING

4 SERVICES.—In this subsection, the term ‘‘ad5 vanced diagnostic imaging services’’ has the 

6 meaning given such term in section 

7 1834(e)(1)(B) of the Social Security Act, as 

8 added by subsection (a). 

9 (C) AUTHORITY TO FOCUS DEMONSTRA10 TION PROJECT.—The Secretary may focus the 

11 demonstration project with respect to certain 

12 advanced diagnostic imaging services, such as 

13 services that account for a large amount of ex14 penditures under the Medicare program, serv15 ices that have recently experienced a high rate 

16 of growth, or services for which appropriateness 

17 criteria exists. 

18 (2) IMPLEMENTATION AND DESIGN OF DEM19 ONSTRATION PROJECT.— 

20 (A) IMPLEMENTATION AND DURATION.— 

21 (i) IMPLEMENTATION.—The Secretary 

22 shall implement the demonstration project 

23 under this subsection not later than Janu24 ary 1, 2010. 


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1 (ii) DURATION.—The Secretary shall 

2 conduct the demonstration project under 

3 this subsection for a 2-year period. 

4 (B) APPLICATION AND SELECTION OF PAR5 TICIPATING PHYSICIANS.— 

6 (i) APPLICATION.—Each physician 

7 that desires to participate in the dem8 onstration project under this subsection 

9 shall submit an application to the Sec10 retary at such time, in such manner, and 

11 containing such information as the Sec12 retary may require. 

13 (ii) SELECTION.—The Secretary shall 

14 select physicians to participate in the dem15 onstration project under this subsection 

16 from among physicians submitting applica17 tions under clause (i). The Secretary shall 

18 ensure that the physicians selected— 

19 (I) represent a wide range of geo20 graphic areas, demographic character21 istics (such as urban, rural, and sub22 urban), and practice settings (such as 

23 private and academic practices); and 

24 (II) have the capability to submit 

25 data to the Secretary (or an entity 


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1 under a subcontract with the Sec2 retary) in an electronic format in ac3 cordance with standards established 

4 by the Secretary. 

5 (C) ADMINISTRATIVE COSTS AND INCEN6 TIVES.—The Secretary shall— 

7 (i) reimburse physicians for reason8 able administrative costs incurred in par9 ticipating in the demonstration project 

10 under this subsection; and 

11 (ii) provide reasonable incentives to 

12 physicians to encourage participation in 

13 the demonstration project under this sub14 section. 

15 (D) USE OF APPROPRIATENESS CRI16 TERIA.— 

17 (i) IN GENERAL.—The Secretary, in 

18 consultation with medical specialty soci19 eties and other stakeholders, shall select 

20 criteria with respect to the clinical appro21 priateness of advanced diagnostic imaging 

22 services for use in the demonstration 

23 project under this subsection. 

24 (ii) CRITERIA SELECTED.—Any cri25 teria selected under clause (i) shall— 


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1 (I) be developed or endorsed by a 

2 medical specialty society; and 

3 (II) be developed in adherence to 

4 appropriateness principles developed 

5 by a consensus organization, such as 

6 the AQA alliance. 

7 (E) MODELS FOR COLLECTING DATA RE8 GARDING PHYSICIAN COMPLIANCE WITH SE9 LECTED CRITERIA.—Subject to subparagraph 

10 (H), in carrying out the demonstration project 

11 under this subsection, the Secretary shall use 

12 each of the following models for collecting data 

13 regarding physician compliance with appro14 priateness criteria selected under subparagraph 

15 (D): 

16 (i) A model described in subparagraph 

17 (F). 

18 (ii) A model described in subpara19 graph (G). 

20 (iii) Any other model that the Sec21 retary determines to be useful in evalu22 ating the use of appropriateness criteria 

23 for advanced diagnostic imaging services. 


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1 (F) POINT OF SERVICE MODEL DE2 SCRIBED.—A model described in this subpara3 graph is a model that— 

4 (i) uses an electronic or paper intake 

5 form that— 

6 (I) contains a certification by the 

7 physician furnishing the imaging serv8 ice that the data on the intake form 

9 was confirmed with the Medicare ben10 eficiary before the service was fur11 nished; 

12 (II) contains standardized data 

13 elements for diagnosis, service or14 dered, service furnished, and such 

15 other information determined by the 

16 Secretary, in consultation with med17 ical specialty societies and other 

18 stakeholders, to be germane to evalu19 ating the effectiveness of the use of 

20 appropriateness criteria selected under 

21 subparagraph (D); and 

22 (III) is accessible to physicians 

23 participating in the demonstration 

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1 mat that allows for the electronic sub2 mission of such form; and 

3 (ii) provides for feedback reports in 

4 accordance with paragraph (3)(B). 

5 (G) POINT OF ORDER MODEL DE6 SCRIBED.—A model described in this subpara7 graph is a model that— 

8 (i) uses a computerized order-entry 

9 system that requires the transmittal of rel10 evant supporting information at the time 

11 of referral for advanced diagnostic imaging 

12 services and provides automated decision13 support feedback to the referring physician 

14 regarding the appropriateness of fur15 nishing such imaging services; and 

16 (ii) provides for feedback reports in 

17 accordance with paragraph (3)(B). 

18 (H) LIMITATION.—In no case may the 

19 Secretary use prior authorization— 

20 (i) as a model for collecting data re21 garding physician compliance with appro22 priateness criteria selected under subpara23 graph (D) under the demonstration project 

24 under this subsection; or 


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1 (ii) under any model used for col2 lecting such data under the demonstration 

3 project. 

4 (I) REQUIRED CONTRACTS AND PERFORM5 ANCE STANDARDS FOR CERTAIN ENTITIES.— 

6 (i) IN GENERAL.—The Secretary shall 

7 enter into contracts with entities to carry 

8 out the model described in subparagraph 

9 (G). 

10 (ii) PERFORMANCE STANDARDS.—The 

11 Secretary shall establish and enforce per12 formance standards for such entities under 

13 the contracts entered into under clause (i), 

14 including performance standards with re15 spect to— 

16 (I) the satisfaction of Medicare 

17 beneficiaries who are furnished ad18 vanced diagnostic imaging services by 

19 a physician participating in the dem20 onstration project; 

21 (II) the satisfaction of physicians 

22 participating in the demonstration 

23 project; 


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1 (III) if applicable, timelines for 

2 the provision of feedback reports 

3 under paragraph (3)(B); and 

4 (IV) any other areas determined 

5 appropriate by the Secretary. 

6 (3) COMPARISON OF UTILIZATION OF AD7 VANCED DIAGNOSTIC IMAGING SERVICES AND FEED8 BACK REPORTS.— 

9 (A) COMPARISON OF UTILIZATION OF AD10 VANCED DIAGNOSTIC IMAGING SERVICES.—The 

11 Secretary shall consult with medical specialty 

12 societies and other stakeholders to develop 

13 mechanisms for comparing the utilization of ad14 vanced diagnostic imaging services by physi15 cians participating in the demonstration project 

16 under this subsection against— 

17 (i) the appropriateness criteria se18 lected under paragraph (2)(D); and 

19 (ii) to the extent feasible, the utiliza20 tion of such services by physicians not par21 ticipating in the demonstration project. 

22 (B) FEEDBACK REPORTS.—The Secretary 

23 shall, in consultation with medical specialty so24 cieties and other stakeholders, develop mecha25 nisms to provide feedback reports to physicians 


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1 participating in the demonstration project 

2 under this subsection. Such feedback reports 

3 shall include— 

4 (i) a profile of the rate of compliance 

5 by the physician with appropriateness cri6 teria selected under paragraph (2)(D), in7 cluding a comparison of— 

8 (I) the rate of compliance by the 

9 physician with such criteria; and 

10 (II) the rate of compliance by the 

11 physician’s peers (as defined by the 

12 Secretary) with such criteria; and 

13 (ii) to the extent feasible, a compari14 son of— 

15 (I) the rate of utilization of ad16 vanced diagnostic imaging services by 

17 the physician; and 

18 (II) the rate of utilization of such 

19 services by the physician’s peers (as 

20 defined by the Secretary) who are not 

21 participating in the demonstration 

22 project. 

23 (4) CONDUCT OF DEMONSTRATION PROJECT

24 AND WAIVER.— 


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1 (A) CONDUCT OF DEMONSTRATION

2 PROJECT.—Chapter 35 of title 44, United 

3 States Code, shall not apply to the conduct of 

4 the demonstration project under this sub5 section. 

6 (B) WAIVER.—The Secretary may waive 

7 such provisions of titles XI and XVIII of the 

8 Social Security Act (42 U.S.C. 1301 et seq.; 

9 1395 et seq.) as may be necessary to carry out 

10 the demonstration project under this sub11 section. 

12 (5) EVALUATION AND REPORT.— 

13 (A) EVALUATION.—The Secretary shall 

14 evaluate the demonstration project under this 

15 subsection to— 

16 (i) assess the timeliness and efficacy 

17 of the demonstration project; 

18 (ii) assess the performance of entities 

19 under a contract entered into under para20 graph (2)(I)(i); 

21 (iii) analyze data— 

22 (I) on the rates of appropriate, 

23 uncertain, and inappropriate advanced 

24 diagnostic imaging services furnished 


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1 by physicians participating in the 

2 demonstration project; 

3 (II) on patterns and trends in 

4 the appropriateness and inappropri5 ateness of such services furnished by 

6 such physicians; 

7 (III) on patterns and trends in 

8 national and regional variations of 

9 care with respect to the furnishing of 

10 such services; and 

11 (IV) on the correlation between 

12 the appropriateness of the services 

13 furnished and image results; and 

14 (iv) address— 

15 (I) the thresholds used under the 

16 demonstration project to identify ac17 ceptable and outlier levels of perform18 ance with respect to the appropriate19 ness of advanced diagnostic imaging 

20 services furnished; 

21 (II) whether prospective use of 

22 appropriateness criteria could have an 

23 effect on the volume of such services 

24 furnished; 


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1 (III) whether expansion of the 

2 use of appropriateness criteria with 

3 respect to such services to a broader 

4 population of Medicare beneficiaries 

5 would be advisable; 

6 (IV) whether, under such an ex7 pansion, physicians who demonstrate 

8 consistent compliance with such ap9 propriateness criteria should be ex10 empted from certain requirements; 

11 (V) the use of incident-specific 

12 versus practice-specific outlier infor13 mation in formulating future rec14 ommendations with respect to the use 

15 of appropriateness criteria for such 

16 services under the Medicare program; 

17 and 

18 (VI) the potential for using 

19 methods (including financial incen20 tives), in addition to those used under 

21 the models under the demonstration 

22 project, to ensure compliance with 

23 such criteria. 

24 (B) REPORT.—Not later than 1 year after 

25 the completion of the demonstration project 


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1 under this subsection, the Secretary shall sub2 mit to Congress a report containing the results 

3 of the evaluation of the demonstration project 

4 conducted under subparagraph (A), together 

5 with recommendations for such legislation and 

6 administrative action as the Secretary deter7 mines appropriate. 

8 (6) FUNDING.—The Secretary shall provide for 

9 the transfer from the Federal Supplementary Med10 ical Insurance Trust Fund established under section 

11 1841 of the Social Security Act (42 U.S.C. 1395t) 

12 of $10,000,000, for carrying out the demonstration 

13 project under this subsection (including costs associ14 ated with administering the demonstration project, 

15 reimbursing physicians for administrative costs and 

16 providing incentives to encourage participation under 

17 paragraph (2)(C), entering into contracts under 

18 paragraph (2)(I), and evaluating the demonstration 

19 project under paragraph (5)). 

20 (c) GAO STUDIES AND REPORTS.— 

21 (1) STUDY ON ACCREDITATION REQUIREMENT

22 FOR ADVANCED DIAGNOSTIC IMAGING SERVICES.— 

23 (A) STUDY.— 

24 (i) IN GENERAL.—The Comptroller 

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1 section referred to as the ‘‘Comptroller 

2 General’’) shall conduct a study, by imag3 ing modality, on— 

4 (I) the effect of the accreditation 

5 requirement under section 1834(e) of 

6 the Social Security Act, as added by 

7 subsection (a); and 

8 (II) any other relevant questions 

9 involving access to, and the value of, 

10 advanced diagnostic imaging services 

11 for Medicare beneficiaries. 

12 (ii) ISSUES.—The study conducted 

13 under clause (i) shall examine the fol14 lowing: 

15 (I) The impact of such accredita16 tion requirement on the number, type, 

17 and quality of imaging services fur18 nished to Medicare beneficiaries. 

19 (II) The cost of such accredita20 tion requirement, including costs to 

21 facilities of compliance with such re22 quirement and costs to the Secretary 

23 of administering such requirement. 

24 (III) Access to imaging services 

25 by Medicare beneficiaries, especially in 


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1 rural areas, before and after imple2 mentation of such accreditation re3 quirement. 

4 (IV) Such other issues as the 

5 Secretary determines appropriate. 

6 (B) REPORTS.— 

7 (i) PRELIMINARY REPORT.—Not later 

8 than March 1, 2013, the Comptroller Gen9 eral shall submit a preliminary report to 

10 Congress on the study conducted under 

11 subparagraph (A). 

12 (ii) FINAL REPORT.—Not later than 

13 March 1, 2014, the Comptroller General 

14 shall submit a final report to Congress on 

15 the study conducted under subparagraph 

16 (A), together with recommendations for 

17 such legislation and administrative action 

18 as the Comptroller General determines ap19 propriate. 

20 (2) STUDY ON INTEREST RATE AND EQUIP21 MENT UTILIZATION ASSUMPTIONS USED IN DETER22 MINING PRACTICE EXPENSE.— 

23 (A) STUDY.— 

24 (i) IN GENERAL.—The Comptroller 

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1 sumptions used for interest rate and equip2 ment utilization in the methodology for de3 termination of practice expense relative 

4 value units under section 1848(c)(2)(C)(ii) 

5 of the Social Security Act (42 U.S.C. 

6 1395w–4(c)(2)(C)(ii)) with respect to im7 aging services. 

8 (ii) COLLECTION OF DATA.—In con9 ducting the study under clause (i), the 

10 Comptroller General shall collect data on 

11 imaging equipment utilization for different 

12 modalities of imaging equipment used in— 

13 (I) different types of practices; 

14 and 

15 (II) different geographic areas. 

16 (B) REPORT.—Not later than June 1, 

17 2010, the Comptroller General shall submit to 

18 Congress a report containing the results of the 

19 study conducted under subparagraph (A), in20 cluding the data collected under clause (ii) of 

21 such subparagraph, together with recommenda22 tions for such legislation and administrative ac23 tion as the Comptroller General determines ap24 propriate. 


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1 SEC. 136. EXTENSION OF TREATMENT OF CERTAIN PHYSI2 CIAN PATHOLOGY SERVICES UNDER MEDI3 CARE. 

4 Section 542(c) of the Medicare, Medicaid, and 

5 SCHIP Benefits Improvement and Protection Act of 2000 

6 (as enacted into law by section 1(a)(6) of Public Law 106– 

7 554), as amended by section 732 of the Medicare Prescrip8 tion Drug, Improvement, and Modernization Act of 2003 

9 (42 U.S.C. 1395w–4 note), section 104 of division B of 

10 the Tax Relief and Health Care Act of 2006 (42 U.S.C. 

11 1395w–4 note), and section 104 of the Medicare, Med12 icaid, and SCHIP Extension Act of 2007 (Public Law 

13 110–173), is amended by striking ‘‘2007, and the first 6 

14 months of 2008’’ and inserting ‘‘2007, 2008, and 2009’’. 

15 SEC. 137. ACCOMMODATION OF PHYSICIANS ORDERED TO 

16 ACTIVE DUTY IN THE ARMED SERVICES. 

17 Section 1842(b)(6)(D)(iii) of the Social Security Act 

18 (42 U.S.C. 1395u(b)(6)(D)(iii)), as amended by section 

19 116 of the Medicare, Medicaid, and SCHIP Extension Act 

20 of 2007 (Public Law 110–173), is amended by striking 

21 ‘‘(before July 1, 2008)’’. 

22 SEC. 138. ADJUSTMENT FOR MEDICARE MENTAL HEALTH 

23 SERVICES. 

24 (a) PAYMENT ADJUSTMENT.— 

25 (1) IN GENERAL.—For purposes of payment for 

26 services furnished under the physician fee schedule 


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1 under section 1848 of the Social Security Act (42 

2 U.S.C. 1395w–4) during the period beginning on 

3 July 1, 2008, and ending on December 31, 2009, 

4 the Secretary of Health and Human Services shall 

5 increase the fee schedule otherwise applicable for 

6 specified services by 5 percent. 

7 (2) NONAPPLICATION OF BUDGET-NEU8 TRALITY.—The budget-neutrality provision of sec9 tion 1848(c)(2)(B)(ii) of the Social Security Act (42 

10 U.S.C. 1395w–4(c)(2)(B)(ii)) shall not apply to the 

11 adjustments described in paragraph (1). 

12 (b) DEFINITION OF SPECIFIED SERVICES.—In this 

13 section, the term ‘‘specified services’’ means procedure 

14 codes for services in the categories of the Health Care 

15 Common Procedure Coding System, established by the 

16 Secretary of Health and Human Services under section 

17 1848(c)(5) of the Social Security Act (42 U.S.C. 1395w– 

18 4(c)(5)), as of July 1, 2007, and as subsequently modified 

19 by the Secretary, consisting of psychiatric therapeutic pro20 cedures furnished in office or other outpatient facility set21 tings or in inpatient hospital, partial hospital, or residen22 tial care facility settings, but only with respect to such 

23 services in such categories that are in the subcategories 

24 of services which are— 


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1 (1) insight oriented, behavior modifying, or sup2 portive psychotherapy; or 

3 (2) interactive psychotherapy. 

4 (c) IMPLEMENTATION.—Notwithstanding any other 

5 provision of law, the Secretary may implement this section 

6 by program instruction or otherwise. 

7 SEC. 139. IMPROVEMENTS FOR MEDICARE ANESTHESIA 

8 TEACHING PROGRAMS. 

9 (a) SPECIAL PAYMENT RULE FOR TEACHING ANES10 THESIOLOGISTS.—Section 1848(a) of the Social Security 

11 Act (42 U.S.C. 1395w–4(a)), as amended by section 

12 132(b), is amended— 

13 (1) in paragraph (4)(A), by inserting ‘‘except as 

14 provided in paragraph (5),’’ after ‘‘anesthesia 

15 cases,’’; and 

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

17 paragraph: 

18 ‘‘(6) SPECIAL RULE FOR TEACHING ANESTHE19 SIOLOGISTS.—With respect to physicians’ services 

20 furnished on or after January 1, 2010, in the case 

21 of teaching anesthesiologists involved in the training 

22 of physician residents in a single anesthesia case or 

23 two concurrent anesthesia cases, the fee schedule 

24 amount to be applied shall be 100 percent of the fee 

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1 tion if the anesthesia services were personally per2 formed by the teaching anesthesiologist alone and 

3 paragraph (4) shall not apply if— 

4 ‘‘(A) the teaching anesthesiologist is 

5 present during all critical or key portions of the 

6 anesthesia service or procedure involved; and 

7 ‘‘(B) the teaching anesthesiologist (or an8 other anesthesiologist with whom the teaching 

9 anesthesiologist has entered into an arrange10 ment) is immediately available to furnish anes11 thesia services during the entire procedure.’’. 

12 (b) TREATMENT OF CERTIFIED REGISTERED NURSE

13 ANESTHETISTS.—With respect to items and services fur14 nished on or after January 1, 2010, the Secretary of 

15 Health and Human Services shall make appropriate ad16 justments to payments under the Medicare program under 

17 title XVIII of the Social Security Act for teaching certified 

18 registered nurse anesthetists to implement a policy with 

19 respect to teaching certified registered nurse anesthetists 

20 that— 

21 (1) is consistent with the adjustments made by 

22 the special rule for teaching anesthesiologists under 

23 section 1848(a)(6) of the Social Security Act, as 

24 added by subsection (a); and 


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1 (2) maintains the existing payment differences 

2 between teaching anesthesiologists and teaching cer3 tified registered nurse anesthetists. 

4 PART II—OTHER PAYMENT AND COVERAGE 

5 IMPROVEMENTS 

6 SEC. 141. EXTENSION OF EXCEPTIONS PROCESS FOR MEDI7 CARE THERAPY CAPS. 

8 Section 1833(g)(5) of the Social Security Act (42 

9 U.S.C. 1395l(g)(5)), as amended by section 105 of the 

10 Medicare, Medicaid, and SCHIP Extension Act of 2007 

11 (Public Law 110–173), is amended by striking ‘‘June 30, 

12 2008’’ and inserting ‘‘December 31, 2009’’. 

13 SEC. 142. EXTENSION OF PAYMENT RULE FOR 

14 BRACHYTHERAPY AND THERAPEUTIC RADIO15 PHARMACEUTICALS. 

16 Section 1833(t)(16)(C) of the Social Security Act (42 

17 U.S.C. 1395l(t)(16)(C)), as amended by section 106 of the 

18 Medicare, Medicaid, and SCHIP Extension Act of 2007 

19 (Public Law 110–173), is amended by striking ‘‘July 1, 

20 2008’’ each place it appears and inserting ‘‘January 1, 

21 2010’’. 

22 SEC. 143. SPEECH-LANGUAGE PATHOLOGY SERVICES. 

23 (a) IN GENERAL.—Section 1861(ll) of the Social Se24 curity Act (42 U.S.C. 1395x(ll)) is amended— 


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1 (1) by redesignating paragraphs (2) and (3) as 

2 paragraphs (3) and (4), respectively; and 

3 (2) by inserting after paragraph (1) the fol4 lowing new paragraph: 

5 ‘‘(2) The term ‘outpatient speech-language pathology 

6 services’ has the meaning given the term ‘outpatient phys7 ical therapy services’ in subsection (p), except that in ap8 plying such subsection— 

9 ‘‘(A) ‘speech-language pathology’ shall be sub10 stituted for ‘physical therapy’ each place it appears; 

11 and 

12 ‘‘(B) ‘speech-language pathologist’ shall be sub13 stituted for ‘physical therapist’ each place it ap14 pears.’’. 

15 (b) CONFORMING AMENDMENTS.— 

16 (1) Section 1832(a)(2)(C) of the Social Security 

17 Act (42 U.S.C. 1395k(a)(2)(C)) is amended— 

18 (A) by striking ‘‘and outpatient’’ and in19 serting ‘‘, outpatient’’; and 

20 (B) by inserting before the semicolon at 

21 the end the following: ‘‘, and outpatient speech22 language pathology services (other than services 

23 to which the second sentence of section 1861(p) 

24 applies through the application of section 

25 1861(ll)(2))’’. 


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1 (2) Subparagraphs (A) and (B) of section 

2 1833(a)(8) of the Social Security Act (42 U.S.C. 

3 1395l(a)(8)) are each amended by striking ‘‘(which 

4 includes outpatient speech-language pathology serv5 ices)’’ and inserting ‘‘, outpatient speech-language 

6 pathology services,’’. 

7 (3) Section 1833(g)(1) of the Social Security 

8 Act (42 U.S.C. 1395l(g)(1)) is amended— 

9 (A) by inserting ‘‘and speech-language pa10 thology services of the type described in such 

11 section through the application of section 

12 1861(ll)(2)’’ after ‘‘1861(p)’’; and 

13 (B) by inserting ‘‘and speech-language pa14 thology services’’ after ‘‘and physical therapy 

15 services’’. 

16 (4) The second sentence of section 1835(a) of 

17 the Social Security Act (42 U.S.C. 1395n(a)) is 

18 amended— 

19 (A) by striking ‘‘section 1861(g)’’ and in20 serting ‘‘subsection (g) or (ll)(2) of section 

21 1861’’ each place it appears; and 

22 (B) by inserting ‘‘or outpatient speech-lan23 guage pathology services, respectively’’ after 

24 ‘‘occupational therapy services’’. 


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1 (5) Section 1861(p) of the Social Security Act 

2 (42 U.S.C. 1395x(p)) is amended by striking the 

3 fourth sentence. 

4 (6) Section 1861(s)(2)(D) of the Social Secu5 rity Act (42 U.S.C. 1395x(s)(2)(D)) is amended by 

6 inserting ‘‘, outpatient speech-language pathology 

7 services,’’ after ‘‘physical therapy services’’. 

8 (7) Section 1862(a)(20) of the Social Security 

9 Act (42 U.S.C. 1395y(a)(20)) is amended— 

10 (A) by striking ‘‘outpatient occupational 

11 therapy services or outpatient physical therapy 

12 services’’ and inserting ‘‘outpatient physical 

13 therapy services, outpatient speech-language pa14 thology services, or outpatient occupational 

15 therapy services’’; and 

16 (B) by striking ‘‘section 1861(g)’’ and in17 serting ‘‘subsection (g) or (ll)(2) of section 

18 1861’’. 

19 (8) Section 1866(e)(1) of the Social Security 

20 Act (42 U.S.C. 1395cc(e)(1)) is amended— 

21 (A) by striking ‘‘section 1861(g)’’ and in22 serting ‘‘subsection (g) or (ll)(2) of section 

23 1861’’ the first two places it appears; 

24 (B) by striking ‘‘defined) or’’ and inserting 

25 ‘‘defined),’’; and 


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1 (C) by inserting before the semicolon at 

2 the end the following: ‘‘, or (through the oper3 ation of section 1861(ll)(2)) with respect to the 

4 furnishing of outpatient speech-language pa5 thology’’. 

6 (9) Section 1877(h)(6) of the Social Security 

7 Act (42 U.S.C. 1395nn(h)(6)) is amended by adding 

8 at the end the following new subparagraph: 

9 ‘‘(L) Outpatient speech-language pathology 

10 services.’’. 

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

12 this section shall apply to services furnished on or after 

13 July 1, 2009. 

14 (d) CONSTRUCTION.—Nothing in this section shall be 

15 construed to affect existing regulations and policies of the 

16 Centers for Medicare & Medicaid Services that require 

17 physician oversight of care as a condition of payment for 

18 speech-language pathology services under part B of the 

19 Medicare program. 

20 SEC. 144. PAYMENT AND COVERAGE IMPROVEMENTS FOR 

21 PATIENTS WITH CHRONIC OBSTRUCTIVE 

22 PULMONARY DISEASE AND OTHER CONDI23 TIONS. 

24 (a) COVERAGE OF PULMONARY AND CARDIAC REHA25 BILITATION.— 


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1 (1) IN GENERAL.—Section 1861 of the Social 

2 Security Act (42 U.S.C. 1395x), as amended by sec3 tion 101(a), is amended— 

4 (A) in subsection (s)(2)— 

5 (i) in subparagraph (AA), by striking 

6 ‘‘and’’ at the end; 

7 (ii) in subparagraph (BB), by adding 

8 ‘‘and’’ after the semicolon at the end; and 

9 (iii) by adding at the end the fol10 lowing new subparagraph: 

11 ‘‘(CC) items and services furnished under 

12 a cardiac rehabilitation program (as defined in 

13 subsection (eee)(1)) or under a pulmonary reha14 bilitation program (as defined in subsection 

15 (fff)(1));’’; and 

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

17 subsections: 

18 ‘‘Cardiac Rehabilitation Program 

19 ‘‘(eee)(1) The term ‘cardiac rehabilitation program’ 

20 means a physician-supervised program (as described in 

21 paragraph (2)) that furnishes the items and services de22 scribed in paragraph (3). 

23 ‘‘(2) A program described in this paragraph is a pro24 gram under which— 


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1 ‘‘(A) items and services under the program are 

2 delivered— 

3 ‘‘(i) in a physician’s office; 

4 ‘‘(ii) in a hospital on an outpatient basis; 

5 or 

6 ‘‘(iii) in other settings determined appro7 priate by the Secretary. 

8 ‘‘(B) a physician is immediately available and 

9 accessible for medical consultation and medical 

10 emergencies at all times items and services are being 

11 furnished under the program, except that, in the 

12 case of items and services furnished under such a 

13 program in a hospital, such availability shall be pre14 sumed; and 

15 ‘‘(C) individualized treatment is furnished 

16 under a written plan established, reviewed, and 

17 signed by a physician every 30 days that describes— 

18 ‘‘(i) the individual’s diagnosis; 

19 ‘‘(ii) the type, amount, frequency, and du20 ration of the items and services furnished under 

21 the plan; and 

22 ‘‘(iii) the goals set for the individual under 

23 the plan. 

24 ‘‘(3) The items and services described in this para25 graph are— 


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1 ‘‘(A) physician-prescribed exercise; 

2 ‘‘(B) cardiac risk factor modification, including 

3 education, counseling, and behavioral intervention 

4 (to the extent such education, counseling, and behav5 ioral intervention is closely related to the individual’s 

6 care and treatment and is tailored to the individual’s 

7 needs); 

8 ‘‘(C) psychosocial assessment; 

9 ‘‘(D) outcomes assessment; and 

10 ‘‘(E) such other items and services as the Sec11 retary may determine, but only if such items and 

12 services are— 

13 ‘‘(i) reasonable and necessary for the diag14 nosis or active treatment of the individual’s 

15 condition; 

16 ‘‘(ii) reasonably expected to improve or 

17 maintain the individual’s condition and func18 tional level; and 

19 ‘‘(iii) furnished under such guidelines re20 lating to the frequency and duration of such 

21 items and services as the Secretary shall estab22 lish, taking into account accepted norms of 

23 medical practice and the reasonable expectation 

24 of improvement of the individual. 


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1 ‘‘(4) The Secretary shall establish standards to en2 sure that a physician with expertise in the management 

3 of individuals with cardiac pathophysiology who is licensed 

4 to practice medicine in the State in which a cardiac reha5 bilitation program (or the intensive cardiac rehabilitation 

6 program, as the case may be) is offered— 

7 ‘‘(A) is responsible for such program; and 

8 ‘‘(B) in consultation with appropriate staff, is 

9 involved substantially in directing the progress of in10 dividual in the program. 

11 ‘‘Pulmonary Rehabilitation Program 

12 ‘‘(fff)(1) The term ‘pulmonary rehabilitation pro13 gram’ means a physician-supervised program (as de14 scribed in subsection (eee)(2) with respect to a program 

15 under this subsection) that furnishes the items and serv16 ices described in paragraph (2). 

17 ‘‘(2) The items and services described in this para18 graph are— 

19 ‘‘(A) physician-prescribed exercise; 

20 ‘‘(B) education or training (to the extent the 

21 education or training is closely and clearly related to 

22 the individual’s care and treatment and is tailored to 

23 such individual’s needs); 

24 ‘‘(C) psychosocial assessment; 

25 ‘‘(D) outcomes assessment; and 


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1 ‘‘(E) such other items and services as the Sec2 retary may determine, but only if such items and 

3 services are— 

4 ‘‘(i) reasonable and necessary for the diag5 nosis or active treatment of the individual’s 

6 condition; 

7 ‘‘(ii) reasonably expected to improve or 

8 maintain the individual’s condition and func9 tional level; and 

10 ‘‘(iii) furnished under such guidelines re11 lating to the frequency and duration of such 

12 items and services as the Secretary shall estab13 lish, taking into account accepted norms of 

14 medical practice and the reasonable expectation 

15 of improvement of the individual. 

16 ‘‘(3) The Secretary shall establish standards to en17 sure that a physician with expertise in the management 

18 of individuals with respiratory pathophysiology who is li19 censed to practice medicine in the State in which a pul20 monary rehabilitation program is offered— 

21 ‘‘(A) is responsible for such program; and 

22 ‘‘(B) in consultation with appropriate staff, is 

23 involved substantially in directing the progress of in24 dividual in the program.’’. 


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1 (2) EFFECTIVE DATE.—The amendments made 

2 by this subsection shall apply to items and services 

3 furnished on or after January 1, 2010. 

4 (b) REPEAL OF TRANSFER OF OWNERSHIP OF OXY5 GEN EQUIPMENT.— 

6 (1) IN GENERAL.—Section 1834(a)(5)(F) of the 

7 Social Security Act (42 U.S.C. 1395m(a)(5)(F)) is 

8 amended— 

9 (A) in the heading, by striking ‘‘OWNER10 SHIP OF EQUIPMENT’’ and inserting ‘‘RENTAL

11 CAP’’; and 

12 (B) by striking clause (ii) and inserting the 

13 following: 

14 ‘‘(ii) PAYMENTS AND RULES AFTER

15 RENTAL CAP.—After the 36th continuous 

16 month during which payment is made for 

17 the equipment under this paragraph— 

18 ‘‘(I) the supplier furnishing such 

19 equipment under this subsection shall 

20 continue to furnish the equipment 

21 during any period of medical need for 

22 the remainder of the reasonable useful 

23 lifetime of the equipment, as deter24 mined by the Secretary; 


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1 ‘‘(II) payments for oxygen shall 

2 continue to be made in the amount 

3 recognized for oxygen under para4 graph (9) for the period of medical 

5 need; and 

6 ‘‘(III) maintenance and servicing 

7 payments shall, if the Secretary deter8 mines such payments are reasonable 

9 and necessary, be made (for parts and 

10 labor not covered by the supplier’s or 

11 manufacturer’s warranty, as deter12 mined by the Secretary to be appro13 priate for the equipment), and such 

14 payments shall be in an amount deter15 mined to be appropriate by the Sec16 retary.’’. 

17 (2) EFFECTIVE DATE.—The amendments made 

18 by paragraph (1) shall take effect on January 1, 

19 2009. 

20 (c) REVISION OF PAYMENT FOR OXYGEN AND OXY21 GEN EQUIPMENT, PORTABLE OXYGEN EQUIPMENT, AND

22 OXYGEN FOR STATIONARY EQUIPMENT.— 

23 (1) SEPARATE PAYMENT FOR OXYGEN EQUIP24 MENT AND OXYGEN FOR STATIONARY EQUIPMENT.— 

25 Section 1834(a) of the Social Security Act (42 


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1 U.S.C. 1395m(a)) is amended by adding at the end 

2 the following new paragraph: 

3 ‘‘(22) ADDITIONAL SPECIAL PAYMENT RULE

4 BEGINNING IN 2009.— 

5 ‘‘(A) IN GENERAL.—Notwithstanding the 

6 preceding provisions of this subsection, for oxy7 gen equipment (other than portable oxygen and 

8 oxygen equipment) furnished during 2009, the 

9 payment amount otherwise determined under 

10 this subsection for such equipment shall be 

11 equal to— 

12 ‘‘(i) the amount of the monthly pay13 ment amount otherwise established by the 

14 Secretary under this subsection for oxygen 

15 and oxygen equipment (other than portable 

16 oxygen equipment) furnished in 2009; 

17 minus 

18 ‘‘(ii) 71 percent of the amount of the 

19 monthly payment amount established by 

20 the Secretary under this subsection for ox21 ygen for stationary equipment furnished in 

22 such year. 

23 ‘‘(B) APPLICATION OF UPDATE TO SPE24 CIAL PAYMENT AMOUNT.—The covered item up25 date under paragraph (14) for oxygen equipVerDate Aug 31 2005 00:59 Jun 10, 2008 Jkt 069200 PO 00000 Frm 00145 Fmt 6652 Sfmt 6201 E:\BILLS\S3101.PCS S3101

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1 ment for 2010 and each subsequent year shall 

2 be applied to the payment amount under sub3 paragraph (A) unless payment is made for such 

4 items and supplies under section 1847.’’. 

5 (2) ADD-ON PAYMENT FOR OXYGEN FOR STA6 TIONARY OXYGEN EQUIPMENT.—Section 1834(a)(5) 

7 of the Social Security Act (42 U.S.C. 1395m(a)(5)) 

8 is amended by adding at the end the following new 

9 subparagraph: 

10 ‘‘(G) ADD-ON FOR OXYGEN FOR STA11 TIONARY OXYGEN EQUIPMENT.—In the case of 

12 oxygen furnished on or after January 1, 2009, 

13 when oxygen is used with stationary oxygen 

14 equipment, the payment amount recognized 

15 under subparagraph (A) shall be increased by 

16 the amount established by the Secretary for 

17 such oxygen (or 71 percent of such amount 

18 during the rental period for such equipment).’’. 

19 (3) EQUALIZING ADD-ON PAYMENT FOR OXY20 GEN FOR PORTABLE OXYGEN AND OXYGEN EQUIP21 MENT DURING MONTHLY RENTAL PERIOD AND PAY22 MENT FOR SUCH OXYGEN AND OXYGEN EQUIPMENT

23 AFTER SUCH RENTAL PERIOD.—Section 1834(a)(9) 

24 of the Social Security Act (42 U.S.C. 1395m(a)(9)) 


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1 is amended by adding at the end the following new 

2 subparagraph: 

3 ‘‘(E) SPECIAL RULE FOR ADD-ON PAY4 MENT FOR PORTABLE OXYGEN AND OXYGEN

5 EQUIPMENT.—In the case of oxygen and oxygen 

6 equipment furnished on or after January 1, 

7 2009, for purposes of paragraph (5)(B), the 

8 monthly amount recognized under this para9 graph for portable oxygen and oxygen equip10 ment in a year shall be equal to the monthly 

11 payment amount for portable oxygen and oxy12 gen equipment applicable for the year under 

13 this subsection after the end of the 36-month 

14 period under paragraph (5)(F).’’. 

15 (4) SPECIAL RULE FOR ADD-ON PAYMENTS FOR

16 OXYGEN GENERATING PORTABLE EQUIPMENT.—Sec17 tion 1834(a)(9) of the Social Security Act (42 

18 U.S.C. 1395m(a)(9)), as amended by paragraph (3), 

19 is amended by adding at the end the following new 

20 subparagraph: 

21 ‘‘(F) SPECIAL RULE FOR ADD-ON PAY22 MENT FOR OXYGEN GENERATING PORTABLE

23 EQUIPMENT.—In the case of oxygen generating 

24 portable equipment, as defined by the Sec25 retary, furnished on or after January 1, 2009, 


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1 the Secretary shall make the following monthly 

2 add-on payments during the 36-month rental 

3 period under paragraph (5)(F): 

4 ‘‘(i) An amount equal to the monthly 

5 payment amount specified in subparagraph 

6 (E) for the month. 

7 ‘‘(ii) An amount equal to the monthly 

8 payment amount otherwise established by 

9 the Secretary under this subsection for 

10 such equipment for the month that recog11 nizes that such equipment substitutes for 

12 the delivery of portable oxygen and oxygen 

13 contents during the remaining useful life of 

14 the equipment that occurs after the end of 

15 such 36-month rental period.’’. 

16 (5) CAP ON TOTAL MONTHLY PAYMENT FOR

17 LIQUID OR GASEOUS STATIONARY AND PORTABLE

18 SYSTEMS.—Section 1834(a)(5) of the Social Security 

19 Act (42 U.S.C. 1395m(a)(5)), as amended by para20 graph (2), is amended by adding at the end the fol21 lowing new subparagraph: 

22 ‘‘(H) CAP ON TOTAL PAYMENTS FOR LIQ23 UID OR GASEOUS STATIONARY AND PORTABLE

24 SYSTEMS.—In the case of a liquid or gaseous 

25 stationary and portable system furnished on or 


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1 after January 1, 2009, the total monthly 

2 amount recognized under this part for such sys3 tem for a month (including any add-on pay4 ments under this subsection) may not exceed 

5 the total monthly amount that would have oth6 erwise been recognized under this part for such 

7 system for the month (including any add-on 

8 payments under this subsection) if the amend9 ments made by section 144(c) of the Medicare 

10 Improvements for Patients and Providers Act of 

11 2008 had not been enacted.’’. 

12 (6) CONFORMING AMENDMENTS.—(A) Section 

13 1834(a)(5)(A) of the Social Security Act (42 U.S.C. 

14 1395m(a)(5)(A)) is amended— 

15 (i) by inserting ‘‘and, in the case of items 

16 and services furnished on or after January 1, 

17 2009, other than oxygen for stationary equip18 ment’’ after ‘‘portable oxygen equipment’’; and 

19 (ii) by striking ‘‘subparagraphs (B), (C), 

20 (E), and (F)’’ and inserting ‘‘the succeeding 

21 provisions of this paragraph’’. 

22 (B) Section 1834(a)(9) of the Social Security 

23 Act (42 U.S.C. 1395m(a)(9)) is amended— 

24 (i) in the first sentence of the matter pre25 ceding subparagraph (A), by striking ‘‘For purVerDate Aug 31 2005 00:59 Jun 10, 2008 Jkt 069200 PO 00000 Frm 00149 Fmt 6652 Sfmt 6201 E:\BILLS\S3101.PCS S3101

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1 poses’’ and inserting ‘‘Subject to paragraphs 

2 (21) and (22), for purposes’’; and 

3 (ii) in the second sentence of the matter 

4 preceding subparagraph (A)— 

5 (I) by inserting ‘‘and, in the case of 

6 items and services furnished on or after 

7 January 1, 2009, other than oxygen for 

8 stationary equipment’’ after ‘‘portable oxy9 gen equipment’’; 

10 (II) by striking ‘‘and’’ before ‘‘(ii)’’ 

11 and inserting a comma; and 

12 (III) by inserting ‘‘, and (iii) in the 

13 case of items and services furnished on or 

14 after January 1, 2009, for oxygen for sta15 tionary equipment’’ before ‘‘(each such 

16 group’’. 

17 (d) APPLICATION TO COMPETITIVE BIDDING.—The 

18 amendments made by subsections (b) and (c) shall not 

19 apply to contracts entered into under section 1847 of the 

20 Social Security Act (42 U.S.C. 1395w–3) prior to Sep21 tember 1, 2008, pursuant to the implementation of sub22 section (a)(1)(B)(i)(I) of such section 1847. 

23 (e) INSTITUTE OF MEDICINE STUDY AND REPORT

24 ON PAYMENTS FOR DIFFERENT CLASSES OF OXYGEN

25 EQUIPMENT.— 


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1 (1) STUDY.—Not later than 3 months after the 

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

3 Health and Human Services shall enter into a con4 tract with the Institute of Medicine of the National 

5 Academies (in this section referred to as the ‘‘Insti6 tute’’) under which the Institute shall conduct a 

7 study on the furnishing of, and payments for, oxy8 gen and oxygen equipment under the Medicare pro9 gram. Such study shall include an analysis of the 

10 following: 

11 (A) The costs and activities associated with 

12 furnishing different modalities of oxygen equip13 ment (covering gaseous and liquid portable 

14 equipment and oxygen generating portable 

15 equipment), including— 

16 (i) the acquisition cost of the oxygen 

17 equipment; 

18 (ii) the delivery and refilling of oxygen 

19 contents for stationary and portable sys20 tems, including the frequency of delivery; 

21 (iii) the delivery of the equipment and 

22 the provision of supplies and accessories; 

23 (iv) training and education, intake of 

24 patient information and related docuVerDate Aug 31 2005 00:59 Jun 10, 2008 Jkt 069200 PO 00000 Frm 00151 Fmt 6652 Sfmt 6201 E:\BILLS\S3101.PCS S3101

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1 mentation, and responding to beneficiary 

2 inquiries; 

3 (v) servicing of different types of oxy4 gen and oxygen equipment, including— 

5 (I) the type and frequency of 

6 routine and nonroutine servicing fur7 nished, and variation across suppliers 

8 in furnishing such servicing; and 

9 (II) the extent to which emer10 gency or after hours servicing is need11 ed and furnished; and 

12 (vi) other items or activities involved 

13 with furnishing oxygen and oxygen equip14 ment not described in clauses (i) though 

15 (v). 

16 (B) Whether the various items and activi17 ties described in subparagraph (A) are medi18 cally necessary and affect patient outcomes. 

19 (C)(i) The adequacy of Medicare payment 

20 rates for oxygen equipment and necessary serv21 icing and items and activities furnished in con22 nection with the provision of oxygen and oxygen 

23 equipment; and 

24 (ii) how such payment rates compare to 

25 competitively bid rates. 


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1 (D) Whether payment rates for oxygen and 

2 oxygen equipment under the Medicare program 

3 should vary depending on the modality of oxy4 gen equipment used or should be the same for 

5 all modalities. 

6 (E) The adequacy of add-on payments 

7 under the Medicare program for— 

8 (i) contents for stationary equipment; 

9 (ii) contents for portable equipment; 

10 and 

11 (iii) oxygen-generating portable equip12 ment. 

13 (F)(i) Whether, during the rental period 

14 for oxygen equipment under the Medicare pro15 gram, payment for such equipment and serv16 icing should be bundled together or whether 

17 separate payments are appropriate; and 

18 (ii) if separate payments are appropriate, 

19 how the payment should be allocated between 

20 equipment and servicing. 

21 (G) Options that could be considered for 

22 suppliers to document or report under the 

23 Medicare program detailed information on ac24 tivities related to furnishing oxygen and oxygen 

25 equipment to Medicare beneficiaries. 


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1 (2) SURVEY.—In conducting the study under 

2 paragraph (1), the Institute shall conduct a survey 

3 of suppliers of oxygen and oxygen equipment to ob4 tain data on items described in paragraph (1)(A). 

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

6 the date of the enactment of this Act, the Institute 

7 shall submit to the Secretary of Health and Human 

8 Services a report containing the results of the study 

9 conducted under paragraph (1), together with such 

10 recommendations as the Institute determines appro11 priate. 

12 (4) FUNDING.—For the purpose of carrying out 

13 this section, the Secretary of Health and Human 

14 Services shall provide for the transfer, from the Fed15 eral Supplementary Medical Insurance Trust Fund 

16 established under section 1841 of the Social Security 

17 Act (42 U.S.C. 1395t), of $5,000,000 to the Centers 

18 for Medicare & Medicaid Services Program Manage19 ment Account. 

20 SEC. 145. REVISION OF PAYMENT FOR POWER-DRIVEN 

21 WHEELCHAIRS. 

22 (a) IN GENERAL.—Section 1834(a)(7)(A) of the So23 cial Security Act (42 U.S.C. 1395m(a)(7)(A)) is amend24 ed— 

25 (1) in clause (i)— 


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1 (A) in subclause (II), by inserting ‘‘sub2 clause (III) and’’ after ‘‘Subject to’’; and 

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

4 subclause: 

5 ‘‘(III) SPECIAL RULE FOR

6 POWER-DRIVEN WHEELCHAIRS.—For 

7 purposes of payment for power-driven 

8 wheelchairs, subclause (II) shall be 

9 applied by substituting ‘15 percent’ 

10 and ‘6 percent’ for ‘10 percent’ and 

11 ‘7.5 percent’, respectively.’’; and 

12 (2) in clause (iii)— 

13 (A) in the heading, by inserting ‘‘COM14 PLEX, REHABILITATIVE’’ before ‘‘POWER-DRIV15 EN’’; and 

16 (B) by inserting ‘‘complex, rehabilitative’’ 

17 before ‘‘power-driven’’. 

18 (b) TECHNICAL AMENDMENT.—Section 

19 1834(a)(7)(C)(ii)(II) of the Social Security Act (42 U.S.C. 

20 1395m(a)(7)(C)(ii)(II)) is amended by striking ‘‘(A)(ii) 

21 or’’. 

22 (c) EFFECTIVE DATE.— 

23 (1) IN GENERAL.—Subject to paragraph (2), 

24 the amendments made by subsection (a) shall take 


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1 effect on January 1, 2009, and shall apply to power2 driven wheelchairs furnished on or after such date. 

3 (2) APPLICATION TO COMPETITIVE BIDDING.— 

4 The amendments made by subsection (a) shall not 

5 apply to contracts entered into under section 1847 

6 of the Social Security Act (42 U.S.C. 1395w–3) 

7 prior to January 1, 2009, pursuant to the implemen8 tation of subsection (a)(1)(B)(i)(I) of such section 

9 1847. 

10 SEC. 146. CLINICAL LABORATORY TESTS. 

11 (a) REPEAL OF MEDICARE COMPETITIVE BIDDING

12 DEMONSTRATION PROJECT FOR CLINICAL LABORATORY

13 SERVICES.— 

14 (1) IN GENERAL.—Section 1847 of the Social 

15 Security Act (42 U.S.C. 1395w–3) is amended by 

16 striking subsection (e). 

17 (2) CONFORMING AMENDMENTS.—Section 

18 1833(a)(1)(D) of the Social Security Act (42 U.S.C. 

19 1395l(a)(1)(D)) is amended— 

20 (A) by inserting ‘‘or’’ before ‘‘(ii)’’; and 

21 (B) by striking ‘‘or (iii) on the basis’’ and 

22 all that follows before the comma at the end. 

23 (3) EFFECTIVE DATE.—The amendments made 

24 by this subsection shall take effect on the date of the 

25 enactment of this Act. 


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1 (b) CLINICAL LABORATORY TEST FEE SCHEDULE

2 UPDATE ADJUSTMENT.—Section 1833(h)(2)(A)(i) of the 

3 Social Security Act (42 U.S.C. 1395l(h)(2)(A)(ii)) is 

4 amended by inserting ‘‘minus, for each of the years 2009 

5 through 2013, 0.5 percentage points’’ after ‘‘city aver6 age)’’. 

7 SEC. 147. IMPROVED ACCESS TO AMBULANCE SERVICES. 

8 (a) EXTENSION OF INCREASED MEDICARE PAY9 MENTS FOR GROUND AMBULANCE SERVICES.—Section 

10 1834(l)(13) of the Social Security Act (42 U.S.C. 

11 1395m(l)(13)) is amended— 

12 (1) in subparagraph (A)— 

13 (A) in the matter preceding clause (i), by 

14 inserting ‘‘and for such services furnished on or 

15 after July 1, 2008, and before January 1, 

16 2010’’ after ‘‘2007,’’; 

17 (B) in clause (i), by inserting ‘‘(or 3 per18 cent if such service is furnished on or after July 

19 1, 2008, and before January 1, 2010)’’ after ‘‘2 

20 percent’’; and 

21 (C) in clause (ii), by inserting ‘‘(or 2 per22 cent if such service is furnished on or after July 

23 1, 2008, and before January 1, 2010)’’ after ‘‘1 

24 percent’’; and 

25 (2) in subparagraph (B)— 


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1 (A) in the heading, by striking ‘‘2006’’ and 

2 inserting ‘‘APPLICABLE PERIOD’’; and 

3 (B) by inserting ‘‘applicable’’ before ‘‘pe4 riod’’. 

5 (b) AIR AMBULANCE PAYMENT IMPROVEMENTS.— 

6 (1) TREATMENT OF CERTAIN AREAS FOR PAY7 MENT FOR AIR AMBULANCE SERVICES UNDER THE

8 AMBULANCE FEE SCHEDULE.—Notwithstanding any 

9 other provision of law, for purposes of making pay10 ments under section 1834(l) of the Social Security 

11 Act (42 U.S.C. 1395m(l)) for air ambulance services 

12 furnished during the period beginning on July 1, 

13 2008, and ending on December 31, 2009, any area 

14 that was designated as a rural area for purposes of 

15 making payments under such section for air ambu16 lance services furnished on December 31, 2006, shall 

17 be treated as a rural area for purposes of making 

18 payments under such section for air ambulance serv19 ices furnished during such period. 

20 (2) CLARIFICATION REGARDING SATISFACTION

21 OF REQUIREMENT OF MEDICALLY NECESSARY.— 

22 (A) IN GENERAL.—Section 

23 1834(l)(14)(B)(i) of the Social Security Act (42 

24 U.S.C. 1395m(l)(14)(B)(i)) is amended by 

25 striking ‘‘reasonably determines or certifies’’ 


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1 and inserting ‘‘certifies or reasonably deter2 mines’’. 

3 (B) EFFECTIVE DATE.—The amendment 

4 made by subparagraph (A) shall apply to serv5 ices furnished on or after the date of the enact6 ment of this Act. 

7 SEC. 148. EXTENSION AND EXPANSION OF THE MEDICARE 

8 HOLD HARMLESS PROVISION UNDER THE 

9 PROSPECTIVE PAYMENT SYSTEM FOR HOS10 PITAL OUTPATIENT DEPARTMENT (HOPD) 

11 SERVICES FOR CERTAIN HOSPITALS. 

12 Section 1833(t)(7)(D)(i) of the Social Security Act 

13 (42 U.S.C. 1395l(t)(7)(D)(i)) is amended— 

14 (1) in subclause (II)— 

15 (A) in the first sentence, by striking 

16 ‘‘2009’’ and inserting ‘‘2010’’; and 

17 (B) by striking the second sentence and in18 serting the following new sentence: ‘‘For pur19 poses of the preceding sentence, the applicable 

20 percentage shall be 95 percent with respect to 

21 covered OPD services furnished in 2006, 90 

22 percent with respect to such services furnished 

23 in 2007, and 85 percent with respect to such 

24 services furnished in 2008 or 2009.’’; and 


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1 (2) by adding at the end the following new sub2 clause: 

3 ‘‘(III) In the case of a sole community 

4 hospital (as defined in section 

5 1886(d)(5)(D)(iii)) that has not more than 

6 100 beds, for covered OPD services fur7 nished on or after January 1, 2009, and 

8 before January 1, 2010, for which the 

9 PPS amount is less than the pre-BBA 

10 amount, the amount of payment under this 

11 subsection shall be increased by 85 percent 

12 of the amount of such difference.’’. 

13 SEC. 149. CLARIFICATION OF PAYMENT FOR CLINICAL LAB14 ORATORY TESTS FURNISHED BY CRITICAL 

15 ACCESS HOSPITALS. 

16 (a) IN GENERAL.—Section 1834(g)(4) of the Social 

17 Security Act (42 U.S.C. 1395m(g)(4)) is amended— 

18 (1) in the heading, by striking ‘‘NO BENE19 FICIARY COST-SHARING FOR’’ and inserting ‘‘TREAT20 MENT OF’’; and 

21 (2) by adding at the end the following new sen22 tence: ‘‘For purposes of the preceding sentence and 

23 section 1861(mm)(3), clinical diagnostic laboratory 

24 services furnished by a critical access hospital shall 

25 be treated as being furnished as part of outpatient 


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1 critical access services without regard to whether the 

2 individual with respect to whom such services are 

3 furnished is physically present in the critical access 

4 hospital, or in a skilled nursing facility or a clinic 

5 (including a rural health clinic) that is operated by 

6 a critical access hospital, at the time the specimen 

7 is collected.’’. 

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

9 subsection (a) shall apply to services furnished on or after 

10 July 1, 2009. 

11 SEC. 150. ADDING CERTAIN ENTITIES AS ORIGINATING 

12 SITES FOR PAYMENT OF TELEHEALTH SERV13 ICES. 

14 (a) IN GENERAL.—Section 1834(m)(4)(C)(ii) of the 

15 Social Security Act (42 U.S.C. 1395m(m)(4)(C)(ii)) is 

16 amended by adding at the end the following new sub17 clauses: 

18 ‘‘(VI) A hospital-based or critical 

19 access hospital-based renal dialysis 

20 center (including satellites). 

21 ‘‘(VII) A skilled nursing facility 

22 (as defined in section 1819(a)). 

23 ‘‘(VIII) A community mental 

24 health center (as defined in section 

25 1861(ff)(3)(B)).’’. 


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1 (b) CONFORMING AMENDMENT.—Section 

2 1888(e)(2)(A)(ii) of the Social Security Act (42 U.S.C. 

3 1395yy(e)(2)(A)(ii)) is amended by inserting ‘‘telehealth 

4 services furnished under section 1834(m)(4)(C)(ii)(VII),’’ 

5 after ‘‘section 1861(s)(2),’’. 

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

7 this section shall apply to services furnished on or after 

8 January 1, 2009. 

9 SEC. 151. MEDPAC STUDY AND REPORT ON IMPROVING 

10 CHRONIC CARE DEMONSTRATION PRO11 GRAMS. 

12 (a) STUDY.—The Medicare Payment Advisory Com13 mission shall conduct a study on the feasability and advis14 ability of establishing a Medicare Chronic Care Practice 

15 Research Network that would serve as a standing network 

16 of providers testing new models of care coordination and 

17 other care approaches for chronically ill beneficiaries, in18 cluding the initiation, operation, evaluation, and, if appro19 priate, expansion of such models to the broader Medicare 

20 patient population. 

21 (b) REPORT.—Not later than June 15, 2009, the 

22 Medicare Payment Advisory Commission shall submit to 

23 Congress a report containing the results of the study con24 ducted under subsection (a). 


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1 SEC. 152. INCREASE OF FQHC PAYMENT LIMITS. 

2 (a) IN GENERAL.—Section 1833 of the Social Secu3 rity Act (42 U.S.C. 1395l), as amended by section 133(a), 

4 is amended by adding at the end the following new sub5 section: 

6 ‘‘(w) INCREASE OF FQHC PAYMENT LIMITS.—In the 

7 case of services furnished by federally qualified health cen8 ters (as defined in section 1861(aa)(4)), the Secretary 

9 shall establish payment limits with respect to such services 

10 under this part for services furnished— 

11 ‘‘(1) in 2010, at the limits otherwise established 

12 under this part for such year increased by $5; and 

13 ‘‘(2) in a subsequent year, at the limits estab14 lished under this subsection for the previous year in15 creased by the percentage increase in the MEI (as 

16 defined in section 1842(i)(3)) for such subsequent 

17 year.’’. 

18 (b) STUDY AND REPORT ON THE EFFECTS AND ADE19 QUACY OF THE MEDICARE FEDERALLY QUALIFIED

20 HEALTH CENTER PAYMENT STRUCTURE.— 

21 (1) STUDY.—The Comptroller General of the 

22 United States shall conduct a study to determine 

23 whether the structure for payments for services fur24 nished by federally qualified health centers (as de25 fined in section 1861(aa)(4) of the Social Security 

26 Act (42 U.S.C. 1395x(aa)(4)) under part B of title 


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1 XVIII of the Social Security Act (42 U.S.C. 1395j 

2 et seq.) adequately reimburses federally qualified 

3 health centers for the care furnished to Medicare 

4 beneficiaries. In conducting such study, the Comp5 troller General shall— 

6 (A) use the most current cost report data 

7 available; 

8 (B) examine the effects of the payment 

9 limits established with respect to such services 

10 under such part B on the ability of federally 

11 qualified health centers to furnish care to Medi12 care beneficiaries; and 

13 (C) examine the cost of furnishing services 

14 covered under the Medicare program as of the 

15 date of the enactment of this Act that were not 

16 covered under such program as of the date on 

17 which the Secretary determined the payment 

18 rate for federally qualified health centers in 

19 1991. 

20 (2) REPORT.—Not later than 15 months after 

21 the date of the enactment of this Act, the Comp22 troller General of the United States shall submit to 

23 Congress a report on the study conducted under 

24 paragraph (1), together with recommendations for 

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1 troller General determines appropriate, taking into 

2 consideration the structure and adequacy of the pro3 spective payment methodology used to make pay4 ments to federally qualified health centers under the 

5 Medicaid program under title XIX of the Social Se6 curity Act (42 U.S.C. 1396 et seq.). 

7 SEC. 153. KIDNEY DISEASE EDUCATION AND AWARENESS 

8 PROVISIONS. 

9 (a) CHRONIC KIDNEY DISEASE INITIATIVES.—Part 

10 P of title III of the Public Health Service Act (42 U.S.C. 

11 280g et seq.) is amended by adding at the end the fol12 lowing new section: 

13 ‘‘SEC. 399R. CHRONIC KIDNEY DISEASE INITIATIVES. 

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

15 pilot projects to— 

16 ‘‘(1) increase public and medical community 

17 awareness (particularly of those who treat patients 

18 with diabetes and hypertension) regarding chronic 

19 kidney disease, focusing on prevention; 

20 ‘‘(2) increase screening for chronic kidney dis21 ease, focusing on Medicare beneficiaries at risk of 

22 chronic kidney disease; and 

23 ‘‘(3) enhance surveillance systems to better as24 sess the prevalence and incidence of chronic kidney 

25 disease. 


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1 ‘‘(b) SCOPE AND DURATION.— 

2 ‘‘(1) SCOPE.—The Secretary shall select at 

3 least 3 States in which to conduct pilot projects 

4 under this section. 

5 ‘‘(2) DURATION.—The pilot projects under this 

6 section shall be conducted for a period that is not 

7 longer than 5 years and shall begin on January 1, 

8 2009. 

9 ‘‘(c) EVALUATION AND REPORT.—The Comptroller 

10 General of the United States shall conduct an evaluation 

11 of the pilot projects conducted under this section. Not 

12 later than 12 months after the date on which the pilot 

13 projects are completed, the Comptroller General shall sub14 mit to Congress a report on the evaluation. 

15 ‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There 

16 are authorized to be appropriated such sums as may be 

17 necessary for the purpose of carrying out this section.’’. 

18 (b) MEDICARE COVERAGE OF KIDNEY DISEASE PA19 TIENT EDUCATION SERVICES.— 

20 (1) COVERAGE OF KIDNEY DISEASE EDUCATION

21 SERVICES.— 

22 (A) COVERAGE.—Section 1861(s)(2) of the 

23 Social Security Act (42 U.S.C. 1395x(s)(2)), as 

24 amended by section 144(a), is amended— 


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1 (i) in subparagraph (BB), by striking 

2 ‘‘and’’ after the semicolon at the end; 

3 (ii) in subparagraph (CC), by adding 

4 ‘‘and’’ after the semicolon at the end; and 

5 (iii) by adding at the end the fol6 lowing new subparagraph: 

7 ‘‘(DD) kidney disease education services (as de8 fined in subsection (ggg));’’. 

9 (B) SERVICES DESCRIBED.—Section 1861 

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

11 as amended by section 144(a), is amended by 

12 adding at the end the following new subsection: 

13 ‘‘Kidney Disease Education Services 

14 ‘‘(ggg)(1) The term ‘kidney disease education serv15 ices’ means educational services that are— 

16 ‘‘(A) furnished to an individual with stage IV 

17 chronic kidney disease who, according to accepted 

18 clinical guidelines identified by the Secretary, will re19 quire dialysis or a kidney transplant; 

20 ‘‘(B) furnished, upon the referral of the physi21 cian managing the individual’s kidney condition, by 

22 a qualified person (as defined in paragraph (2)); and 

23 ‘‘(C) designed— 


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1 ‘‘(i) to provide comprehensive information 

2 (consistent with the standards set under para3 graph (3)) regarding— 

4 ‘‘(I) the management of comorbidities, 

5 including for purposes of delaying the need 

6 for dialysis; 

7 ‘‘(II) the prevention of uremic com8 plications; and 

9 ‘‘(III) each option for renal replace10 ment therapy (including hemodialysis and 

11 peritoneal dialysis at home and in-center 

12 as well as vascular access options and 

13 transplantation); 

14 ‘‘(ii) to ensure that the individual has the 

15 opportunity to actively participate in the choice 

16 of therapy; and 

17 ‘‘(iii) to be tailored to meet the needs of 

18 the individual involved. 

19 ‘‘(2)(A) The term ‘qualified person’ means— 

20 ‘‘(i) a physician (as defined in section 

21 1861(r)(1)) or a physician assistant, nurse practi22 tioner, or clinical nurse specialist (as defined in sec23 tion 1861(aa)(5)), who furnishes services for which 

24 payment may be made under the fee schedule estab25 lished under section 1848; and 


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1 ‘‘(ii) a provider of services located in a rural 

2 area (as defined in section 1886(d)(2)(D)). 

3 ‘‘(B) Such term does not include a provider of serv4 ices (other than a provider of services described in sub5 paragraph (A)(ii)) or a renal dialysis facility. 

6 ‘‘(3) The Secretary shall set standards for the con7 tent of such information to be provided under paragraph 

8 (1)(C)(i) after consulting with physicians, other health 

9 professionals, health educators, professional organizations, 

10 accrediting organizations, kidney patient organizations, di11 alysis facilities, transplant centers, network organizations 

12 described in section 1881(c)(2), and other knowledgeable 

13 persons. To the extent possible the Secretary shall consult 

14 with persons or entities described in the previous sentence, 

15 other than a dialysis facility, that has not received indus16 try funding from a drug or biological manufacturer or di17 alysis facility. 

18 ‘‘(4) No individual shall be furnished more than 6 

19 sessions of kidney disease education services under this 

20 title.’’. 

21 (C) PAYMENT UNDER THE PHYSICIAN FEE

22 SCHEDULE.—Section 1848(j)(3) of the Social 

23 Security Act (42 U.S.C. 1395w–4(j)(3)), is 

24 amended by inserting ‘‘(2)(DD),’’ after 

25 ‘‘(2)(AA),’’. 


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1 (D) LIMITATION ON NUMBER OF SES2 SIONS.—Section 1862(a)(1) of the Social Secu3 rity Act (42 U.S.C. 1395y(a)(1)) is amended— 

4 (i) in subparagraph (M), by striking 

5 ‘‘and’’ at the end; 

6 (ii) in subparagraph (N), by striking 

7 the semicolon at the end and inserting ‘‘, 

8 and’’; and 

9 (iii) by adding at the end the fol10 lowing new subparagraph: 

11 ‘‘(O) in the case of kidney disease education 

12 services (as defined in paragraph (1) of section 

13 1861(ggg)), which are furnished in excess of the 

14 number of sessions covered under paragraph (4) of 

15 such section;’’. 

16 (2) EFFECTIVE DATE.—The amendments made 

17 by this subsection shall apply to services furnished 

18 on or after January 1, 2010. 

19 SEC. 154. RENAL DIALYSIS PROVISIONS. 

20 (a) COMPOSITE RATE.— 

21 (1) UPDATE.—Section 1881(b)(12)(G) of the 

22 Social Security Act (42 U.S.C. 1395rr(b)(12)(G)) is 

23 amended— 

24 (A) in clause (i), by striking ‘‘and’’ at the 

25 end; 


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1 (B) in clause (ii)— 

2 (i) by inserting ‘‘and before January 

3 1, 2009,’’ after ‘‘April 1, 2007,’’; and 

4 (ii) by striking the period at the end 

5 and inserting a semicolon; and 

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

7 clauses: 

8 ‘‘(iii) furnished on or after January 1, 2009, 

9 and before January 1, 2010, by 1.0 percent above 

10 the amount of such composite rate component for 

11 such services furnished on December 31, 2008; and 

12 ‘‘(iv) furnished on or after January 1, 2010, by 

13 1.0 percent above the amount of such composite rate 

14 component for such services furnished on December 

15 31, 2009.’’. 

16 (2) SITE NEUTRAL COMPOSITE RATE.—Section 

17 1881(b)(12)(A) of the Social Security Act (42 

18 U.S.C. 1395rr(b)(12)(A)) is amended by adding at 

19 the end the following new sentence: ‘‘Under such 

20 system, the payment rate for dialysis services fur21 nished on or after January 1, 2009, by providers of 

22 services shall be the same as the payment rate (com23 puted without regard to this sentence) for such serv24 ices furnished by renal dialysis facilities, and in ap25 plying the geographic index under subparagraph (D) 


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1 to providers of services, the labor share shall be 

2 based on the labor share otherwise applied for renal 

3 dialysis facilities.’’. 

4 (b) DEVELOPMENT OF ESRD BUNDLED PAYMENT

5 SYSTEM.— 

6 (1) IN GENERAL.—Section 1881(b) of the So7 cial Security Act (42 U.S.C. 1395rr(b)) is amended 

8 by adding at the end the following new paragraph: 

9 ‘‘(14)(A)(i) Subject to subparagraph (E), for services 

10 furnished on or after January 1, 2011, the Secretary shall 

11 implement a payment system under which a single pay12 ment is made under this title to a provider of services or 

13 a renal dialysis facility for renal dialysis services (as de14 fined in subparagraph (B)) in lieu of any other payment 

15 (including a payment adjustment under paragraph 

16 (12)(B)(ii)) and for such services and items furnished pur17 suant to paragraph (4). 

18 ‘‘(ii) In implementing the system under this para19 graph the Secretary shall ensure that the estimated total 

20 amount of payments under this title for 2011 for renal 

21 dialysis services shall equal 98 percent of the estimated 

22 total amount of payments for renal dialysis services, in23 cluding payments under paragraph (12)(B)(ii), that would 

24 have been made under this title with respect to services 

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1 mented. In making the estimation under subclause (I), the 

2 Secretary shall use per patient utilization data from 2007, 

3 2008, or 2009, whichever has the lowest per patient utili4 zation. 

5 ‘‘(B) For purposes of this paragraph, the term ‘renal 

6 dialysis services’ includes— 

7 ‘‘(i) items and services included in the com8 posite rate for renal dialysis services as of December 

9 31, 2010; 

10 ‘‘(ii) erythropoiesis stimulating agents and any 

11 oral form of such agents that are furnished to indi12 viduals for the treatment of end stage renal disease; 

13 ‘‘(iii) other drugs and biologicals that are fur14 nished to individuals for the treatment of end stage 

15 renal disease and for which payment was (before the 

16 application of this paragraph) made separately 

17 under this title, and any oral equivalent form of 

18 such drug or biological; and 

19 ‘‘(iv) diagnostic laboratory tests and other items 

20 and services not described in clause (i) that are fur21 nished to individuals for the treatment of end stage 

22 renal disease. 

23 Such term does not include vaccines. 

24 ‘‘(C) The system under this paragraph may provide 

25 for payment on the basis of services furnished during a 


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1 week or month or such other appropriate unit of payment 

2 as the Secretary specifies. 

3 ‘‘(D) Such system— 

4 ‘‘(i) shall include a payment adjustment based 

5 on case mix that may take into account patient 

6 weight, body mass index, comorbidities, length of 

7 time on dialysis, age, race, ethnicity, and other ap8 propriate factors; 

9 ‘‘(ii) shall include a payment adjustment for 

10 high cost outliers due to unusual variations in the 

11 type or amount of medically necessary care, includ12 ing variations in the amount of erythropoiesis stimu13 lating agents necessary for anemia management; 

14 ‘‘(iii) shall include a payment adjustment that 

15 reflects the extent to which costs incurred by low16 volume facilities (as defined by the Secretary) in fur17 nishing renal dialysis services exceed the costs in18 curred by other facilities in furnishing such services, 

19 and for payment for renal dialysis services furnished 

20 on or after January 1, 2011, and before January 1, 

21 2014, such payment adjustment shall not be less 

22 than 10 percent; and 

23 ‘‘(iv) may include such other payment adjust24 ments as the Secretary determines appropriate, such 

25 as a payment adjustment— 


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1 ‘‘(I) for pediatric providers of services and 

2 renal dialysis facilities; 

3 ‘‘(II) by a geographic index, such as the 

4 index referred to in paragraph (12)(D), as the 

5 Secretary determines to be appropriate; and 

6 ‘‘(III) for providers of services or renal di7 alysis facilities located in rural areas. 

8 The Secretary shall take into consideration the unique 

9 treatment needs of children and young adults in estab10 lishing such system. 

11 ‘‘(E)(i) The Secretary shall provide for a four-year 

12 phase-in (in equal increments) of the payment amount 

13 under the payment system under this paragraph, with 

14 such payment amount being fully implemented for renal 

15 dialysis services furnished on or after January 1, 2014. 

16 ‘‘(ii) A provider of services or renal dialysis facility 

17 may make a one-time election to be excluded from the 

18 phase-in under clause (i) and be paid entirely based on 

19 the payment amount under the payment system under this 

20 paragraph. Such an election shall be made prior to Janu21 ary 1, 2011, in a form and manner specified by the Sec22 retary, and is final and may not be rescinded. 

23 ‘‘(iii) The Secretary shall make an adjustment to the 

24 payments under this paragraph for years during which the 

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1 mated total amount of payments under this paragraph, 

2 including payments under this subparagraph, shall equal 

3 the estimated total amount of payments that would other4 wise occur under this paragraph without such phase-in. 

5 ‘‘(F)(i) Subject to clause (ii), beginning in 2012, the 

6 Secretary shall annually increase payment amounts estab7 lished under this paragraph by an ESRD market basket 

8 percentage increase factor for a bundled payment system 

9 for renal dialysis services that reflects changes over time 

10 in the prices of an appropriate mix of goods and services 

11 included in renal dialysis services minus 1.0 percentage 

12 point. 

13 ‘‘(ii) For years during which a phase-in of the pay14 ment system pursuant to subparagraph (E) is applicable, 

15 the following rules shall apply to the portion of the pay16 ment under the system that is based on the payment of 

17 the composite rate that would otherwise apply if the sys18 tem under this paragraph had not been enacted: 

19 ‘‘(I) The update under clause (i) shall not 

20 apply. 

21 ‘‘(II) The Secretary shall annually increase 

22 such composite rate by the ESRD market basket 

23 percentage increase factor described in clause (i) 

24 minus 1.0 percentage point. 


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1 ‘‘(G) There shall be no administrative or judicial re2 view under section 1869, section 1878, or otherwise of the 

3 determination of payment amounts under subparagraph 

4 (A), the establishment of an appropriate unit of payment 

5 under subparagraph (C), the identification of renal dialy6 sis services included in the bundled payment, the adjust7 ments under subparagraph (D), the application of the 

8 phase-in under subparagraph (E), and the establishment 

9 of the market basket percentage increase factors under 

10 subparagraph (F). 

11 ‘‘(H) Erythropoiesis stimulating agents and other 

12 drugs and biologicals shall be treated as prescribed and 

13 dispensed or administered and available only under part 

14 B if they are— 

15 ‘‘(i) furnished to an individual for the treatment 

16 of end stage renal disease; and 

17 ‘‘(ii) included in subparagraph (B) for purposes 

18 of payment under this paragraph.’’. 

19 (2) PROHIBITION OF UNBUNDLING.—Section 

20 1862(a) of the Social Security Act (42 U.S.C. 

21 1395y(a)), as amended by section 135(a)(2), is 

22 amended— 

23 (A) in paragraph (22), by striking ‘‘or’’ at 

24 the end; 


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1 (B) in paragraph (23), by striking the pe2 riod at the end and inserting ‘‘; or’’; and 

3 (C) by inserting after paragraph (23) the 

4 following new paragraph: 

5 ‘‘(24) where such expenses are for renal dialysis 

6 services (as defined in subparagraph (B) of section 

7 1881(b)(14)) for which payment is made under such 

8 section unless such payment is made under such sec9 tion to a provider of services or a renal dialysis facil10 ity for such services.’’. 

11 (3) CONFORMING AMENDMENTS.—(A) Section 

12 1881(b) of the Social Security Act (42 U.S.C. 

13 1395rr(b)) is amended— 

14 (i) in paragraph (12)(A), by striking ‘‘In 

15 lieu of payment’’ and inserting ‘‘Subject to 

16 paragraph (14), in lieu of payment’’; 

17 (ii) in the second sentence of paragraph 

18 (12)(F)— 

19 (I) by inserting ‘‘or paragraph (14)’’ 

20 after ‘‘this paragraph’’; and 

21 (II) by inserting ‘‘or under the system 

22 under paragraph (14)’’ after ‘‘subpara23 graph (B)’’; and 

24 (iii) in paragraph (13)— 


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1 (I) in subparagraph (A), in the matter 

2 preceding clause (i), by striking ‘‘The pay3 ment amounts’’ and inserting ‘‘Subject to 

4 paragraph (14), the payment amounts’’; 

5 and 

6 (II) in subparagraph (B)— 

7 (aa) in clause (i), by striking 

8 ‘‘(i)’’ after ‘‘(B)’’ and by inserting ‘‘, 

9 subject to paragraph (14)’’ before the 

10 period at the end; and 

11 (bb) by striking clause (ii). 

12 (B) Section 1861(s)(2)(F) of the Social Secu13 rity Act (42 U.S.C. 1395x(s)(2)(F)) is amended by 

14 inserting ‘‘, and, for items and services furnished on 

15 or after January 1, 2011, renal dialysis services (as 

16 defined in section 1881(b)(14)(B))’’ before the semi17 colon at the end. 

18 (C) Section 623(e) of the Medicare Prescription 

19 Drug, Improvement, and Modernization Act of 2003 

20 (42 U.S.C. 1395rr note) is repealed. 

21 (4) RULE OF CONSTRUCTION.—Nothing in this 

22 subsection or the amendments made by this sub23 section shall be construed as authorizing or requir24 ing the Secretary of Health and Human Services to 

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1 mented under paragraph (14)(A)(i) of section 

2 1881(b) of the Social Security Act (42 U.S.C. 

3 1395rr(b)), as added by paragraph (1), for any un4 recovered amount for any bad debt attributable to 

5 deductible and coinsurance on items and services not 

6 included in the basic case-mix adjusted composite 

7 rate under paragraph (12) of such section as in ef8 fect before the date of the enactment of this Act. 

9 (c) QUALITY INCENTIVES IN THE END-STAGE RENAL

10 DISEASE PROGRAM.—Section 1881 of the Social Security 

11 Act (42 U.S.C. 1395rr) is amended by adding at the end 

12 the following new subsection: 

13 ‘‘(h) QUALITY INCENTIVES IN THE END-STAGE

14 RENAL DISEASE PROGRAM.— 

15 ‘‘(1) QUALITY INCENTIVES.— 

16 ‘‘(A) IN GENERAL.—With respect to renal 

17 dialysis services (as defined in subsection 

18 (b)(14)(B)) furnished on or after January 1, 

19 2012, in the case of a provider of services or a 

20 renal dialysis facility that does not meet the re21 quirement described in subparagraph (B) with 

22 respect to the year, payments otherwise made 

23 to such provider or facility under the system 

24 under subsection (b)(14) for such services shall 


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1 be reduced by up to 2.0 percent, as determined 

2 appropriate by the Secretary. 

3 ‘‘(B) REQUIREMENT.—The requirement 

4 described in this subparagraph is that the pro5 vider or facility meets (or exceeds) the total 

6 performance score under paragraph (3) with re7 spect to performance standards established by 

8 the Secretary with respect to measures specified 

9 in paragraph (2). 

10 ‘‘(C) NO EFFECT IN SUBSEQUENT

11 YEARS.—The reduction under subparagraph 

12 (A) shall apply only with respect to the year in13 volved, and the Secretary shall not take into ac14 count such reduction in computing the single 

15 payment amount under the system under para16 graph (14) in a subsequent year. 

17 ‘‘(2) MEASURES.— 

18 ‘‘(A) IN GENERAL.—The measures speci19 fied under this paragraph with respect to the 

20 year involved shall include— 

21 ‘‘(i) measures on anemia management 

22 that reflect the labeling approved by the 

23 Food and Drug Administration for such 

24 management and measures on dialysis ade25 quacy; 


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1 ‘‘(ii) to the extent feasible, such meas2 ure (or measures) of patient satisfaction as 

3 the Secretary shall specify; and 

4 ‘‘(iii) such other measures as the Sec5 retary specifies, including, to the extent 

6 feasible, measures on— 

7 ‘‘(I) iron management; 

8 ‘‘(II) bone mineral metabolism; 

9 and 

10 ‘‘(III) vascular access, including 

11 for maximizing the placement of arte12 rial venous fistula. 

13 ‘‘(B) USE OF ENDORSED MEASURES.— 

14 ‘‘(i) IN GENERAL.—Subject to clause 

15 (ii), any measure specified by the Secretary 

16 under subparagraph (A)(iii) must have 

17 been endorsed by the entity with a contract 

18 under section 1890(a). 

19 ‘‘(ii) EXCEPTION.—In the case of a 

20 specified area or medical topic determined 

21 appropriate by the Secretary for which a 

22 feasible and practical measure has not 

23 been endorsed by the entity with a contract 

24 under section 1890(a), the Secretary may 

25 specify a measure that is not so endorsed 


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1 as long as due consideration is given to 

2 measures that have been endorsed or 

3 adopted by a consensus organization iden4 tified by the Secretary. 

5 ‘‘(C) UPDATING MEASURES.—The Sec6 retary shall establish a process for updating the 

7 measures specified under subparagraph (A) in 

8 consultation with interested parties. 

9 ‘‘(D) CONSIDERATION.—In specifying 

10 measures under subparagraph (A), the Sec11 retary shall consider the availability of meas12 ures that address the unique treatment needs of 

13 children and young adults with kidney failure. 

14 ‘‘(3) PERFORMANCE SCORES.— 

15 ‘‘(A) TOTAL PERFORMANCE SCORE.— 

16 ‘‘(i) IN GENERAL.—Subject to clause 

17 (ii), the Secretary shall develop a method18 ology for assessing the total performance 

19 of each provider of services and renal di20 alysis facility based on performance stand21 ards with respect to the measures selected 

22 under paragraph (2) for a performance pe23 riod established under paragraph (4)(D) 

24 (in this subsection referred to as the ‘total 

25 performance score’). 


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1 ‘‘(ii) APPLICATION.—For providers of 

2 services and renal dialysis facilities that do 

3 not meet (or exceed) the total performance 

4 score established by the Secretary, the Sec5 retary shall ensure that the application of 

6 the methodology developed under clause (i) 

7 results in an appropriate distribution of re8 ductions in payment under paragraph (1) 

9 among providers and facilities achieving 

10 different levels of total performance scores, 

11 with providers and facilities achieving the 

12 lowest total performance scores receiving 

13 the largest reduction in payment under 

14 paragraph (1)(A). 

15 ‘‘(iii) WEIGHTING OF MEASURES.—In 

16 calculating the total performance score, the 

17 Secretary shall weight the scores with re18 spect to individual measures calculated 

19 under subparagraph (B) to reflect prior20 ities for quality improvement, such as 

21 weighting scores to ensure that providers 

22 of services and renal dialysis facilities have 

23 strong incentives to meet or exceed anemia 

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1 formance standards, as determined appro2 priate by the Secretary. 

3 ‘‘(B) PERFORMANCE SCORE WITH RE4 SPECT TO INDIVIDUAL MEASURES.—The Sec5 retary shall also calculate separate performance 

6 scores for each measure, including for dialysis 

7 adequacy and anemia management. 

8 ‘‘(4) PERFORMANCE STANDARDS.— 

9 ‘‘(A) ESTABLISHMENT.—Subject to sub10 paragraph (E), the Secretary shall establish 

11 performance standards with respect to meas12 ures selected under paragraph (2) for a per13 formance period with respect to a year (as es14 tablished under subparagraph (D)). 

15 ‘‘(B) ACHIEVEMENT AND IMPROVE16 MENT.—The performance standards established 

17 under subparagraph (A) shall include levels of 

18 achievement and improvement, as determined 

19 appropriate by the Secretary. 

20 ‘‘(C) TIMING.—The Secretary shall estab21 lish the performance standards under subpara22 graph (A) prior to the beginning of the per23 formance period for the year involved. 

24 ‘‘(D) PERFORMANCE PERIOD.—The Sec25 retary shall establish the performance period 


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1 with respect to a year. Such performance period 

2 shall occur prior to the beginning of such year. 

3 ‘‘(E) SPECIAL RULE.—The Secretary shall 

4 initially use as the performance standard for 

5 the measures specified under paragraph 

6 (2)(A)(i) for a provider of services or a renal di7 alysis facility the lesser of— 

8 ‘‘(i) the performance of such provider 

9 or facility for such measures in the year 

10 selected by the Secretary under the second 

11 sentence of subsection (b)(14)(A)(ii); or 

12 ‘‘(ii) a performance standard based on 

13 the national performance rates for such 

14 measures in a period determined by the 

15 Secretary. 

16 ‘‘(5) LIMITATION ON REVIEW.—There shall be 

17 no administrative or judicial review under section 

18 1869, section 1878, or otherwise of the following: 

19 ‘‘(A) The determination of the amount of 

20 the payment reduction under paragraph (1). 

21 ‘‘(B) The establishment of the performance 

22 standards and the performance period under 

23 paragraph (4). 

24 ‘‘(C) The specification of measures under 

25 paragraph (2). 


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1 ‘‘(D) The methodology developed under 

2 paragraph (3) that is used to calculate total 

3 performance scores and performance scores for 

4 individual measures. 

5 ‘‘(6) PUBLIC REPORTING.— 

6 ‘‘(A) IN GENERAL.—The Secretary shall 

7 establish procedures for making information re8 garding performance under this subsection 

9 available to the public, including— 

10 ‘‘(i) the total performance score 

11 achieved by the provider of services or 

12 renal dialysis facility under paragraph (3) 

13 and appropriate comparisons of providers 

14 of services and renal dialysis facilities to 

15 the national average with respect to such 

16 scores; and 

17 ‘‘(ii) the performance score achieved 

18 by the provider or facility with respect to 

19 individual measures. 

20 ‘‘(B) OPPORTUNITY TO REVIEW.—The pro21 cedures established under subparagraph (A) 

22 shall ensure that a provider of services and a 

23 renal dialysis facility has the opportunity to re24 view the information that is to be made public 


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1 with respect to the provider or facility prior to 

2 such data being made public. 

3 ‘‘(C) CERTIFICATES.— 

4 ‘‘(i) IN GENERAL.—The Secretary 

5 shall provide certificates to providers of 

6 services and renal dialysis facilities who 

7 furnish renal dialysis services under this 

8 section to display in patient areas. The 

9 certificate shall indicate the total perform10 ance score achieved by the provider or fa11 cility under paragraph (3). 

12 ‘‘(ii) DISPLAY.—Each facility or pro13 vider receiving a certificate under clause (i) 

14 shall prominently display the certificate at 

15 the provider or facility. 

16 ‘‘(D) WEB-BASED LIST.—The Secretary 

17 shall establish a list of providers of services and 

18 renal dialysis facilities who furnish renal dialy19 sis services under this section that indicates the 

20 total performance score and the performance 

21 score for individual measures achieved by the 

22 provider and facility under paragraph (3). Such 

23 information shall be posted on the Internet 

24 website of the Centers for Medicare & Medicaid 

25 Services in an easily understandable format.’’. 


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1 (d) GAO REPORT ON ESRD BUNDLING SYSTEM AND

2 QUALITY INITIATIVE.—Not later than March 1, 2013, the 

3 Comptroller General of the United States shall submit to 

4 Congress a report on the implementation of the payment 

5 system under subsection (b)(14) of section 1881 of the 

6 Social Security Act (as added by subsection (b)) for renal 

7 dialysis services and related services (defined in subpara8 graph (B) of such subsection (b)(14)) and the quality ini9 tiative under subsection (h) of such section 1881 (as 

10 added by subsection (b)). Such report shall include the fol11 lowing information: 

12 (1) The changes in utilization rates for 

13 erythropoiesis stimulating agents. 

14 (2) The mode of administering such agents, in15 cluding information on the proportion of individuals 

16 receiving such agents intravenously as compared to 

17 subcutaneously. 

18 (3) An analysis of the payment adjustment 

19 under subparagraph (D)(iii) of such subsection 

20 (b)(14), including an examination of the extent to 

21 which costs incurred by rural, low-volume providers 

22 and facilities (as defined by the Secretary) in fur23 nishing renal dialysis services exceed the costs in24 curred by other providers and facilities in furnishing 


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1 such services, and a recommendation regarding the 

2 appropriateness of such adjustment. 

3 (4) The changes, if any, in utilization rates of 

4 drugs and biologicals that the Secretary identifies 

5 under subparagraph (B)(iii) of such subsection 

6 (b)(14), and any oral equivalent or oral substitutable 

7 forms of such drugs and biologicals or of drugs and 

8 biologicals described in clause (ii), that have oc9 curred after implementation of the payment system 

10 under such subsection (b)(14). 

11 (5) Any other information or recommendations 

12 for legislative and administrative actions determined 

13 appropriate by the Comptroller General. 

14 Subtitle D—Provisions Relating to 

15 Part C 

16 SEC. 161. PHASE-OUT OF INDIRECT MEDICAL EDUCATION 

17 (IME). 

18 (a) IN GENERAL.—Section 1853(k) of the Social Se19 curity Act (42 U.S.C. 1395w–23(k)) is amended— 

20 (1) in paragraph (1), in the matter preceding 

21 subparagraph (A), by striking ‘‘paragraph (2)’’ and 

22 inserting ‘‘paragraphs (2) and (4)’’; and 

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

24 paragraph: 


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1 ‘‘(4) PHASE-OUT OF THE INDIRECT COSTS OF

2 MEDICAL EDUCATION FROM CAPITATION RATES.— 

3 ‘‘(A) IN GENERAL.—After determining the 

4 applicable amount for an area for a year under 

5 paragraph (1) (beginning with 2010), the Sec6 retary shall adjust such applicable amount to 

7 exclude from such applicable amount the phase8 in percentage (as defined in subparagraph 

9 (B)(i)) for the year of the Secretary’s estimate 

10 of the standardized costs for payments under 

11 section 1886(d)(5)(B) in the area for the year. 

12 Any adjustment under the preceding sentence 

13 shall be made prior to the application of para14 graph (2). 

15 ‘‘(B) PERCENTAGES DEFINED.—For pur16 poses of this paragraph: 

17 ‘‘(i) PHASE-IN PERCENTAGE.—The 

18 term ‘phase-in percentage’ means, for an 

19 area for a year, the ratio (expressed as a 

20 percentage, but in no case greater than 

21 100 percent) of— 

22 ‘‘(I) the maximum cumulative ad23 justment percentage for the year (as 

24 defined in clause (ii)); to 


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1 ‘‘(II) the standardized IME cost 

2 percentage (as defined in clause (iii)) 

3 for the area and year. 

4 ‘‘(ii) MAXIMUM CUMULATIVE ADJUST5 MENT PERCENTAGE.—The term ‘maximum 

6 cumulative adjustment percentage’ means, 

7 for— 

8 ‘‘(I) 2010, ø0.65¿ percent; and 

9 ‘‘(II) a subsequent year, the max10 imum cumulative adjustment percent11 age for the previous year increased by 

12 ø0.65¿ percentage points. 

13 ‘‘(iii) STANDARDIZED IME COST PER14 CENTAGE.—The term ‘standardized IME 

15 cost percentage’ means, for an area for a 

16 year, the per capita costs for payments 

17 under section 1886(d)(5)(B) (expressed as 

18 a percentage of the fee-for-service amount 

19 specified in subparagraph (C)) for the area 

20 and the year. 

21 ‘‘(C) FEE-FOR-SERVICE AMOUNT.—The 

22 fee-for-service amount specified in this subpara23 graph for an area for a year is the amount 

24 specified under subsection (c)(1)(D) for the 

25 area and the year.’’. 


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1 (b) EXCLUDING ADJUSTMENT FROM THE UP2 DATE.—Section 1853(k)(1)(B)(i) of the Social Security 

3 Act (42 U.S.C. 1395w–23(k)(1)(B)(i)) is amended by 

4 striking ‘‘paragraph (2)’’ and inserting ‘‘paragraphs (2) 

5 and (4)’’. 

6 (c) HOLD HARMLESS FOR PACE PROGRAM PAY7 MENTS.—Section 1894(d) of the Social Security Act (42 

8 U.S.C. 1395eee(d)) is amended by adding at the end the 

9 following new paragraph: 

10 ‘‘(3) CAPITATION RATES DETERMINED WITH11 OUT REGARD TO THE PHASE-OUT OF THE INDIRECT

12 COSTS OF MEDICAL EDUCATION FROM THE ANNUAL

13 MEDICARE ADVANTAGE CAPITATION RATE.—Capita14 tion amounts under this subsection shall be deter15 mined without regard to the application of section 

16 1853(k)(4).’’. 

17 SEC. 162. REVISIONS TO REQUIREMENTS FOR MEDICARE 

18 ADVANTAGE PRIVATE FEE-FOR-SERVICE 

19 PLANS. 

20 (a) REQUIREMENTS TO ASSURE ACCESS TO NET21 WORK COVERAGE.— 

22 (1) INDIVIDUAL MARKET.—Section 1852(d) of 

23 the Social Security Act (42 U.S.C. 1395w–22(d)) is 

24 amended— 


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1 (A) in paragraph (4), in the second sen2 tence, by striking ‘‘The Secretary’’ and insert3 ing ‘‘Subject to paragraph (5), the Secretary’’; 

4 and 

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

6 paragraph: 

7 ‘‘(5) REQUIREMENT OF CERTAIN NON8 EMPLOYER MEDICARE ADVANTAGE PRIVATE FEE9 FOR-SERVICE PLANS TO USE CONTRACTS WITH PRO10 VIDERS.— 

11 ‘‘(A) IN GENERAL.—For plan year 2011 

12 and subsequent plan years, in the case of a 

13 Medicare Advantage private fee-for-service plan 

14 not described in paragraph (1) or (2) of section 

15 1857(i) operating in a network area (as defined 

16 in subparagraph (B)), the plan shall meet the 

17 access standards under paragraph (4) in that 

18 area only through entering into written con19 tracts as provided for under subparagraph (B) 

20 of such paragraph and not, in whole or in part, 

21 through the establishment of payment rates 

22 meeting the requirements under subparagraph 

23 (A) of such paragraph. 

24 ‘‘(B) NETWORK AREA DEFINED.—For pur25 poses of subparagraph (A), the term ‘network 


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1 area’ means, for a plan year, an area which the 

2 Secretary identifies (in the Secretary’s an3 nouncement of the proposed payment rates for 

4 the previous plan year under section 

5 1853(b)(1)(B)) as having at least 2 network6 based plans (as defined in subparagraph (C)) 

7 with enrollment under this part as of the first 

8 day of the year in which such announcement is 

9 made. 

10 ‘‘(C) NETWORK-BASED PLAN DEFINED.— 

11 ‘‘(i) IN GENERAL.—For purposes of 

12 subparagraph (B), the term ‘network13 based plan’ means— 

14 ‘‘(I) except as provided in clause 

15 (ii), a Medicare Advantage plan that 

16 is a coordinated care plan described in 

17 section 1851(a)(2)(A)(i); 

18 ‘‘(II) a network-based MSA plan; 

19 and 

20 ‘‘(III) a reasonable cost reim21 bursement plan under section 1876. 

22 ‘‘(ii) EXCLUSION OF NON-NETWORK

23 REGIONAL PPOS.—The term ‘network24 based plan’ shall not include an MA re25 gional plan that, with respect to the area, 


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1 meets access adequacy standards under 

2 this part substantially through the author3 ity of section 422.112(a)(1)(ii) of title 42, 

4 Code of Federal Regulations, rather than 

5 through written contracts.’’. 

6 (2) EMPLOYER PLANS.—Section 1852(d) of the 

7 Social Security Act (42 U.S.C. 1395w–22(d)), as 

8 amended by paragraph (1), is amended— 

9 (A) in paragraph (4), in the second sen10 tence, by striking ‘‘paragraph (5)’’ and insert11 ing ‘‘paragraphs (5) and (6)’’; and 

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

13 paragraph: 

14 ‘‘(6) REQUIREMENT OF ALL EMPLOYER MEDI15 CARE ADVANTAGE PRIVATE FEE-FOR-SERVICE PLANS

16 TO USE CONTRACTS WITH PROVIDERS.—For plan 

17 year 2011 and subsequent plan years, in the case of 

18 a Medicare Advantage private fee-for-service plan 

19 that is described in paragraph (1) or (2) of section 

20 1857(i), the plan shall meet the access standards 

21 under paragraph (4) only through entering into writ22 ten contracts as provided for under subparagraph 

23 (B) of such paragraph and not, in whole or in part, 

24 through the establishment of payment rates meeting 


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1 the requirements under subparagraph (A) of such 

2 paragraph.’’. 

3 (3) ACCESS REQUIREMENTS.— 

4 (A) IN GENERAL.—Section 1852(d)(4)(B) 

5 of the Social Security Act (42 U.S.C. 1395w– 

6 22(d)(4)(B)) is amended by striking ‘‘a suffi7 cient number’’ through ‘‘terms of the plan’’ and 

8 inserting ‘‘a sufficient number and range of 

9 providers within such category to meet the ac10 cess standards in subparagraphs (A) through 

11 (E) of paragraph (1)’’. 

12 (B) EFFECTIVE DATE.—The amendment 

13 made by subparagraph (A) shall apply to plan 

14 year 2010 and subsequent plan years. 

15 (b) CLARIFICATION REGARDING UTILIZATION.—Sec16 tion 1859(b)(2) of the Social Security Act (42 U.S.C. 

17 1395w–28(b)(2)) is amended by adding at the end the fol18 lowing flush sentence: 

19 ‘‘Nothing in subparagraph (B) shall be construed to 

20 preclude a plan from varying rates for such a pro21 vider based on the specialty of the provider, the loca22 tion of the provider, or other factors related to such 

23 provider that are not related to utilization, or to pre24 clude a plan from increasing rates for such a proVerDate Aug 31 2005 00:59 Jun 10, 2008 Jkt 069200 PO 00000 Frm 00197 Fmt 6652 Sfmt 6201 E:\BILLS\S3101.PCS S3101

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1 vider based on increased utilization of specified pre2 ventive or screening services.’’. 

3 SEC. 163. REVISIONS TO QUALITY IMPROVEMENT PRO4 GRAMS. 

5 (a) REQUIREMENT FOR MA PRIVATE FEE-FOR6 SERVICE AND MSA PLANS TO HAVE A QUALITY IM7 PROVEMENT PROGRAM.— 

8 (1) IN GENERAL.—Section 1852(e)(1) of the 

9 Social Security Act (42 U.S.C. 1395w–112(e)(1)) is 

10 amended by striking ‘‘(other than an MA private 

11 fee-for-service plan or an MSA plan)’’. 

12 (2) EFFECTIVE DATE.—The amendment made 

13 by paragraph (1) shall apply to plan years beginning 

14 on or after January 1, 2010. 

15 (b) DATA COLLECTION REQUIREMENTS FOR MA RE16 GIONAL PLANS, MA PRIVATE FEE-FOR-SERVICE PLANS, 

17 AND MSA PLANS.— 

18 (1) IN GENERAL.—Section 1852(e)(3)(A) of the 

19 Social Security Act (42 U.S.C. 1395w–22(e)(3)(A)) 

20 is amended— 

21 (A) in clause (i), by adding at the end the 

22 following new sentence: ‘‘With respect to MA 

23 private fee-for-service plans and MSA plans, 

24 such requirements may not exceed the require25 ments under this subparagraph with respect to 


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1 MA local plans that are preferred provider or2 ganization plans, except that the limitation 

3 under clause (iii) shall not apply and such re4 quirements shall apply regardless of whether or 

5 not the services are furnished by providers of 

6 services, physicians, or other health care practi7 tioners and suppliers that have contracts with 

8 the organization offering the MA private fee9 for-service plan or the MSA plan.’’ 

10 (B) by striking clause (ii)— 

11 (C) in clause (iii)— 

12 (i) in the heading— 

13 (I) by inserting ‘‘LOCAL’’ after 

14 ‘‘TO’’; and 

15 (II) by inserting ‘‘AND MA RE16 GIONAL PLANS’’ after ‘‘ORGANIZA17 TIONS’’; and 

18 (ii) by inserting ‘‘and to MA regional 

19 plans’’ after ‘‘organization plans’’. 

20 (2) EFFECTIVE DATE.—The amendments made 

21 by paragraph (1) shall apply to plan years beginning 

22 on or after January 1, 2010. 


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1 SEC. 164. REVISIONS RELATING TO SPECIALIZED MEDI2 CARE ADVANTAGE PLANS FOR SPECIAL 

3 NEEDS INDIVIDUALS. 

4 (a) EXTENSION OF AUTHORITY TO RESTRICT EN5 ROLLMENT.—Section 1859(f) of the Social Security Act 

6 (42 U.S.C. 1395w–28(f)), as amended by section 108(a) 

7 of the Medicare, Medicaid, and SCHIP Extension Act of 

8 2007 (Public Law 110–173) is amended by striking 

9 ‘‘2010’’ and inserting ‘‘2011’’. 

10 (b) MORATORIUM ON AUTHORITY TO DESIGNATE

11 OTHER PLANS AS SPECIALIZED MA PLANS.—During the 

12 period beginning on January 1, 2010, and ending on De13 cember 31, 2010, the Secretary of Health and Human 

14 Services may not exercise the authority provided under 

15 section 231(d) of the Medicare Prescription Drug, Im16 provement, and Modernization Act of 2003 (42 U.S.C. 

17 1395w–21 note) to designate other plans as specialized 

18 MA plans for special needs individuals. 

19 (c) REQUIREMENTS FOR ENROLLMENT.— 

20 (1) IN GENERAL.—Section 1859 of the Social 

21 Security Act (42 U.S.C. 1395w–28) is amended— 

22 (A) in subsection (b)(6)(A), by inserting 

23 ‘‘and that, as of January 1, 2010, meets the 

24 applicable requirements of paragraph (2), (3), 

25 or (4) of subsection (f), as the case may be’’ be26 fore the period at the end; and 


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1 (B) in subsection (f)— 

2 (i) by amending the heading to read 

3 as follows: ‘‘REQUIREMENTS REGARDING

4 ENROLLMENT IN SPECIALIZED MA PLANS

5 FOR SPECIAL NEEDS INDIVIDUALS’’; 

6 (ii) by designating the sentence begin7 ning ‘‘In the case of’’ as paragraph (1) 

8 with the heading ‘‘REQUIREMENTS FOR

9 ENROLLMENT.—’’ and with appropriate in10 dentation; and 

11 (iii) by adding at the end the fol12 lowing new paragraphs: 

13 ‘‘(2) ADDITIONAL REQUIREMENTS FOR INSTI14 TUTIONAL SNPS.—In the case of a specialized MA 

15 plan for special needs individuals described in sub16 section (b)(6)(B)(i), the applicable requirements de17 scribed in this paragraph are as follows: 

18 ‘‘(A) Each individual that enrolls in the 

19 plan on or after January 1, 2010, is a special 

20 needs individuals described in subsection 

21 (b)(6)(B)(i). In the case of an individual who is 

22 living in the community but requires an institu23 tional level of care, such individual shall not be 

24 considered a special needs individual described 

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1 tion that the individual requires an institutional 

2 level of care was made— 

3 ‘‘(i) using a State assessment tool of 

4 the State in which the individual resides; 

5 and 

6 ‘‘(ii) by an entity other than the orga7 nization offering the plan. 

8 ‘‘(B) The plan meets the requirements de9 scribed in paragraph (5). 

10 ‘‘(3) ADDITIONAL REQUIREMENTS FOR DUAL

11 SNPS.—In the case of a specialized MA plan for spe12 cial needs individuals described in subsection 

13 (b)(6)(B)(ii), the applicable requirements described 

14 in this paragraph are as follows: 

15 ‘‘(A) Each individual that enrolls in the 

16 plan on or after January 1, 2010, is a special 

17 needs individuals described in subsection 

18 (b)(6)(B)(ii). 

19 ‘‘(B) The plan meets the requirements de20 scribed in paragraph (5). 

21 ‘‘(C) The plan provides each prospective 

22 enrollee, prior to enrollment, with a comprehen23 sive written statement (using standardized con24 tent and format established by the Secretary) 

25 that describes— 


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1 ‘‘(i) the benefits and cost-sharing pro2 tections that the individual is entitled to 

3 under the State Medicaid program under 

4 title XIX; and 

5 ‘‘(ii) which of such benefits and cost6 sharing protections are covered under the 

7 plan. 

8 Such statement shall be included with any de9 scription of benefits offered by the plan. 

10 ‘‘(D) The plan has a contract with the 

11 State Medicaid agency to provide benefits, or 

12 arrange for benefits to be provided, for which 

13 such individual is entitled to receive as medical 

14 assistance under title XIX. Such benefits may 

15 include long-term care services consistent with 

16 State policy. 

17 ‘‘(4) ADDITIONAL REQUIREMENTS FOR SEVERE

18 OR DISABLING CHRONIC CONDITION SNPS.—In the 

19 case of a specialized MA plan for special needs indi20 viduals described in subsection (b)(6)(B)(iii), the ap21 plicable requirements described in this paragraph 

22 are as follows: 

23 ‘‘(A) Each individual that enrolls in the 

24 plan on or after January 1, 2010, is a special 


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1 needs individual described in subsection 

2 (b)(6)(B)(iii). 

3 ‘‘(B) The plan meets the requirements de4 scribed in paragraph (5).’’. 

5 (2) AUTHORITY TO OPERATE BUT NO SERVICE

6 AREA EXPANSION FOR DUAL SNPS THAT DO NOT

7 MEET CERTAIN REQUIREMENTS.—Notwithstanding 

8 subsection (f) of section 1859 of the Social Security 

9 Act (42 U.S.C. 1395w–28), during the period begin10 ning on January 1, 2010, and ending on December 

11 31, 2010, in the case of a specialized Medicare Ad12 vantage plan for special needs individuals described 

13 in subsection (b)(6)(B)(ii) of such section, as 

14 amended by this section, that does not meet the re15 quirement described in subsection (f)(3)(D) of such 

16 section, the Secretary of Health and Human Serv17 ices— 

18 (A) shall permit such plan to be offered 

19 under part C of title XVIII of such Act; and 

20 (B) shall not permit an expansion of the 

21 service area of the plan under such part C. 

22 (3) RESOURCES FOR STATE MEDICAID AGEN23 CIES.—The Secretary of Health and Human Serv24 ices shall provide for the designation of appropriate 

25 staff and resources that can address State inquiries 


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1 with respect to the coordination of State and Fed2 eral policies for specialized MA plans for special 

3 needs individuals described in section 

4 1859(b)(6)(B)(ii) of the Social Security Act (42 

5 U.S.C. 1395w–28(b)(6)(B)(ii)), as amended by this 

6 section. 

7 (4) NO REQUIREMENT FOR CONTRACT.—Noth8 ing in the provisions of, or amendments made by, 

9 this subsection shall require a State to enter into a 

10 contract with a Medicare Advantage organization 

11 with respect to a specialized MA plan for special 

12 needs individuals described in section 

13 1859(b)(6)(B)(ii) of the Social Security Act (42 

14 U.S.C. 1395w–28(b)(6)(B)(ii)), as amended by this 

15 section. 

16 (d) CARE MANAGEMENT REQUIREMENTS FOR ALL

17 SNPS.— 

18 (1) REQUIREMENTS.—Section 1859(f) of the 

19 Social Security Act (42 U.S.C. 1395w–28(f)), as 

20 amended by subsection (c)(1), is amended by adding 

21 at the end the following new paragraph: 

22 ‘‘(5) CARE MANAGEMENT REQUIREMENTS FOR

23 ALL SNPS.—The requirements described in this 

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1 cialized MA plan for special needs individuals de2 scribed in subsection (b)(6)(B)(i)— 

3 ‘‘(A) have in place an evidenced-based 

4 model of care with appropriate networks of pro5 viders and specialists; and 

6 ‘‘(B) with respect to each individual en7 rolled in the plan— 

8 ‘‘(i) conduct an initial assessment and 

9 an annual reassessment of the individual’s 

10 physical, psychosocial, and functional 

11 needs; 

12 ‘‘(ii) develop a plan, in consultation 

13 with the individual as feasible, that identi14 fies goals and objectives, including measur15 able outcomes as well as specific services 

16 and benefits to be provided; and 

17 ‘‘(iii) use an interdisciplinary team in 

18 the management of care.’’. 

19 (2) REVIEW TO ENSURE COMPLIANCE WITH

20 CARE MANAGEMENT REQUIREMENTS.—Section 

21 1857(d) of the Social Security Act (42 U.S.C. 

22 1395w–27(d)) is amended by adding at the end the 

23 following new paragraph: 

24 ‘‘(6) REVIEW TO ENSURE COMPLIANCE WITH

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1 IZED MEDICARE ADVANTAGE PLANS FOR SPECIAL

2 NEEDS INDIVIDUALS.—In conjunction with the peri3 odic audit of a specialized Medicare Advantage plan 

4 for special needs individuals under paragraph (1), 

5 the Secretary shall conduct a review to ensure that 

6 such organization offering the plan meets the re7 quirements described in section 1859(f)(5).’’. 

8 (e) CLARIFICATION OF THE DEFINITION OF A SE9 VERE OR DISABLING CHRONIC CONDITIONS SPECIALIZED

10 NEEDS INDIVIDUAL.— 

11 (1) IN GENERAL.—Section 1859(b)(6)(B)(iii) of 

12 the Social Security Act (42 U.S.C. 1395w– 

13 28(b)(6)(B)(iii)) is amended by inserting ‘‘who have 

14 one or more comorbid and medically complex chronic 

15 conditions that are substantially disabling or life 

16 threatening, have a high risk of hospitalization or 

17 other significant adverse health outcomes, and re18 quire specialized delivery systems across domains of 

19 care’’ before the period at the end. 

20 (2) PANEL.—The Secretary of Health and 

21 Human Services shall convene a panel of clinical ad22 visors to determine the conditions that meet the def23 inition of severe and disabling chronic conditions 

24 under section 1859(b)(6)(B)(iii) of the Social Secu25 rity Act (42 U.S.C. 1395w–28(b)(6)(B)(iii)), as 


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1 amended by paragraph (1). The panel shall include 

2 the Director of the Agency for Healthcare Research 

3 and Quality (or the Director’s designee). 

4 (f) SPECIAL REQUIREMENTS REGARDING QUALITY

5 REPORTING FOR SPECIALIZED MA PLANS FOR SPECIAL

6 NEEDS INDIVIDUALS.— 

7 (1) IN GENERAL.—Section 1852(e)(3)(A) of the 

8 Social Security Act (42 U.S.C. 1395w–22(e)(3)(A)), 

9 as amended by section 163, is amended by inserting 

10 after clause (i) the following new clause: 

11 ‘‘(ii) SPECIAL REQUIREMENTS FOR

12 SPECIALIZED MA PLANS FOR SPECIAL

13 NEEDS INDIVIDUALS.—In addition to the 

14 data required to be collected, analyzed, and 

15 reported under clause (i) and notwith16 standing the limitations under subpara17 graph (B), as part of the quality improve18 ment program under paragraph (1), each 

19 MA organization offering a specialized 

20 Medicare Advantage plan for special needs 

21 individuals shall provide for the collection, 

22 analysis, and reporting of data that per23 mits the measurement of health outcomes 

24 and other indices of quality with respect to 

25 the requirements described in paragraphs 


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1 (2) through (5) of subsection (f). Such 

2 data may be based on claims data and 

3 shall be at the plan level.’’. 

4 (2) EFFECTIVE DATE.—The amendment made 

5 by paragraph (1) shall take effect on a date specified 

6 by the Secretary of Health and Human Services (but 

7 in no case later than January 1, 2010), and shall 

8 apply to all specialized Medicare Advantage plans 

9 for special needs individuals regardless of when the 

10 plan first entered the Medicare Advantage program 

11 under part C of title XVIII of the Social Security 

12 Act. 

13 (g) EFFECTIVE DATE AND APPLICATION.—The 

14 amendments made by subsections (c)(1), (d), and (e)(1) 

15 shall apply to plan years beginning on or after January 

16 1, 2010, and shall apply to all specialized Medicare Advan17 tage plans for special needs individuals regardless of when 

18 the plan first entered the Medicare Advantage program 

19 under part C of title XVIII of the Social Security Act. 

20 (h) NO AFFECT ON MEDICAID BENEFITS FOR

21 DUALS.—Nothing in the provisions of, or amendments 

22 made by, this section shall affect the benefits available 

23 under the Medicaid program under title XIX of the Social 

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1 tion 1859(b)(6)(B)(ii) of such Act (42 U.S.C. 1395w– 

2 28(b)(6)(B)(ii)). 

3 SEC. 165. LIMITATION ON OUT-OF-POCKET COSTS FOR 

4 DUAL ELIGIBLES AND QUALIFIED MEDICARE 

5 BENEFICIARIES ENROLLED IN A SPECIAL6 IZED MEDICARE ADVANTAGE PLAN FOR SPE7 CIAL NEEDS INDIVIDUALS. 

8 (a) IN GENERAL.—Section 1852(a) of the Social Se9 curity Act (42 U.S.C. 1395w–22(a)) is amended by adding 

10 at the end the following new paragraph: 

11 ‘‘(7) LIMITATION ON COST-SHARING FOR DUAL

12 ELIGIBLES AND QUALIFIED MEDICARE BENE13 FICIARIES.—In the case of an individual who is a 

14 full-benefit dual eligible individual (as defined in sec15 tion 1935(c)(6)) or a qualified medicare beneficiary 

16 (as defined in section 1905(p)(1)) and who is en17 rolled in a specialized Medicare Advantage plan for 

18 special needs individuals described in section 

19 1859(b)(6)(B)(ii), the plan may not impose cost20 sharing that exceeds the amount of cost-sharing that 

21 would be permitted with respect to the individual 

22 under title XIX if the individual were not enrolled 

23 in such plan.’’. 


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

2 subsection (a) shall apply to plan years beginning on or 

3 after January 1, 2010. 

4 SEC. 166. ADJUSTMENT TO THE MEDICARE ADVANTAGE 

5 STABILIZATION FUND. 

6 Section 1858(e)(2)(A)(i) of the Social Security Act 

7 (42 U.S.C. 1395w–27a(e)(2)(A)(i)), as amended by sec8 tion 110 of the Medicare, Medicaid, and SCHIP Extension 

9 Act of 2007 (Public Law 110–173), is amended— 

10 (1) by striking ‘‘2013’’ and inserting ‘‘2014’’; 

11 and 

12 (2) by striking ‘‘$1,790,000,000’’ and inserting 

13 ‘‘$1’’. 

14 SEC. 167. ACCESS TO MEDICARE REASONABLE COST CON15 TRACT PLANS. 

16 (a) EXTENSION OF REASONABLE COST CON17 TRACTS.—Section 1876(h)(5)(C)(ii) of the Social Security 

18 Act (42 U.S.C. 1395mm(h)(5)(C)(ii)), as amended by sec19 tion 109 of the Medicare, Medicaid, and SCHIP Extension 

20 Act of 2007 (Public Law 110–173), is amended by strik21 ing ‘‘January 1, 2009’’ and inserting ‘‘January 1, 2010’’ 

22 in the matter preceding subclause (I). 

23 (b) REQUIREMENT FOR AT LEAST TWO MEDICARE

24 ADVANTAGE ORGANIZATIONS TO BE OFFERING A PLAN

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1 BLE.—Subclauses (I) and (II) of section 1876(h)(5)(C)(ii) 

2 of the Social Security Act (42 U.S.C. 

3 1395mm(h)(5)(C)(ii)) are each amended by inserting ‘‘, 

4 provided that all such plans are not offered by the same 

5 Medicare Advantage organization’’ after ‘‘clause (iii)’’. 

6 (c) REVISION OF REQUIREMENTS FOR A PLAN THAT

7 ARE USED TO DETERMINE IF PROHIBITION IS APPLICA8 BLE.— 

9 (1) IN GENERAL.—Section 1876(h)(5)(C)(iii)(I) 

10 of the Social Security Act (42 U.S.C. 

11 1395mm(h)(5)(C)(iii)(I)) is amended by inserting 

12 ‘‘that are not in another Metropolitan Statistical 

13 Area with a population of more than 250,000’’ after 

14 ‘‘such Metropolitan Statistical Area’’. 

15 (2) CLARIFICATION.—Section 

16 1876(h)(5)(C)(iii)(I) of the Social Security Act (42 

17 U.S.C. 1395mm(h)(5)(C)(iii)(I)) is amended by add18 ing at the end the following new sentence: ‘‘If the 

19 service area includes a portion in more than 1 Met20 ropolitan Statistical Area with a population of more 

21 than 250,000, the minimum enrollment determina22 tion under the preceding sentence shall be made 

23 with respect to each such Metropolitan Statistical 

24 Area (and such applicable contiguous counties to 

25 such Metropolitan Statistical Area).’’. 


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1 (d) GAO STUDY AND REPORT.— 

2 (1) STUDY.—The Comptroller General of the 

3 United States shall conduct a study of the reasons 

4 (if any) why reasonable cost contracts under section 

5 1876(h) of the Social Security Act (42 U.S.C. 

6 1395mm(h)) are unable to become Medicare Advan7 tage plans under part C of title XVIII of such Act. 

8 (2) REPORT.—Not later than December 31, 

9 2009, the Comptroller General of the United States 

10 shall submit to Congress a report containing the re11 sults of the study conducted under paragraph (1), 

12 together with recommendations for such legislation 

13 and administrative action as the Comptroller Gen14 eral determines appropriate. 

15 SEC. 168. MEDPAC STUDY AND REPORT ON QUALITY MEAS16 URES. 

17 (a) STUDY.—The Medicare Payment Advisory Com18 mission shall conduct a study on how comparable meas19 ures of performance and patient experience can be col20 lected and reported by 2011 for the Medicare Advantage 

21 program under part C of title XVIII of the Social Security 

22 Act and the original Medicare fee-for-service program 

23 under parts A and B of such title. Such study shall ad24 dress technical issues, such as data requirements, in addiVerDate Aug 31 2005 00:59 Jun 10, 2008 Jkt 069200 PO 00000 Frm 00213 Fmt 6652 Sfmt 6201 E:\BILLS\S3101.PCS S3101

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1 tion to issues relating to appropriate quality benchmarks 

2 that— 

3 (1) compare the quality of care Medicare bene4 ficiaries receive across Medicare Advantage plans; 

5 and 

6 (2) compare the quality of care Medicare bene7 ficiaries receive under Medicare Advantage plans 

8 and under the original Medicare fee-for-service pro9 gram. 

10 (b) REPORT.—Not later than March 31, 2010, the 

11 Medicare Payment Advisory Commission shall submit to 

12 Congress a report containing the results of the study con13 ducted under subsection (a), together with recommenda14 tions for such legislation and administrative action as the 

15 Medicare Payment Advisory Commission determines ap16 propriate. 

17 SEC. 169. MEDPAC STUDY AND REPORT ON MEDICARE AD18 VANTAGE PAYMENTS. 

19 (a) STUDY.—The Medicare Payment Advisory Com20 mission (in this section referred to as the ‘‘Commission’’) 

21 shall conduct a study of the following: 

22 (1) The correlation between— 

23 (A) the costs that Medicare Advantage or24 ganizations with respect to Medicare Advantage 

25 plans incur in providing coverage under the 


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1 plan for items and services covered under the 

2 original Medicare fee-for-service program under 

3 parts A and B of title XVIII of the Social Secu4 rity Act, as reflected in plan bids; and 

5 (B) county-level spending under such origi6 nal Medicare fee-for-service program on a per 

7 capita basis, as calculated by the Chief Actuary 

8 of the Centers for Medicare & Medicaid Serv9 ices. 

10 The study with respect to the issue described in the 

11 preceding sentence shall include differences in cor12 relation statistics by plan type and geographic area. 

13 (2) Based on these results of the study with re14 spect to the issue described in paragraph (1), and 

15 other data the Commission determines appro16 priate— 

17 (A) alternate approaches to payment with 

18 respect to a Medicare beneficiary enrolled in a 

19 Medicare Advantage plan other than through 

20 county-level payment area equivalents. 

21 (B) the accuracy and completeness of 

22 county-level estimates of per capita spending 

23 under such original Medicare fee-for-service 

24 program (including counties in Puerto Rico), as 

25 used to determine the annual Medicare AdvanVerDate Aug 31 2005 00:59 Jun 10, 2008 Jkt 069200 PO 00000 Frm 00215 Fmt 6652 Sfmt 6201 E:\BILLS\S3101.PCS S3101

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1 tage capitation rate under section 1853 of the 

2 Social Security Act (42 U.S.C. 1395w–23), and 

3 whether such estimates include— 

4 (i) expenditures with respect to Medi5 care beneficiaries at facilities of the De6 partment of Veterans Affairs; and 

7 (ii) all appropriate administrative ex8 penses, including claims processing. 

9 (3) Ways to improve the accuracy and com10 pleteness of county-level estimates of per capita 

11 spending described in paragraph (2)(B). 

12 (b) REPORT.—Not later than March 31, 2010, the 

13 Commission shall submit to Congress a report containing 

14 the results of the study conducted under subsection (a), 

15 together with recommendations for such legislation and 

16 administrative action as the Commission determines ap17 propriate. 

18 Subtitle E—Provisions Relating to 

19 Part D 

20 PART I—IMPROVING PHARMACY ACCESS 

21 SEC. 171. PROMPT PAYMENT BY PRESCRIPTION DRUG 

22 PLANS AND MA–PD PLANS UNDER PART D. 

23 (a) PROMPT PAYMENT BY PRESCRIPTION DRUG

24 PLANS.—Section 1860D–12(b) of the Social Security Act 


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1 (42 U.S.C. 1395w–112(b)) is amended by adding at the 

2 end the following new paragraph: 

3 ‘‘(4) PROMPT PAYMENT OF CLEAN CLAIMS.— 

4 ‘‘(A) PROMPT PAYMENT.— 

5 ‘‘(i) IN GENERAL.—Each contract en6 tered into with a PDP sponsor under this 

7 part with respect to a prescription drug 

8 plan offered by such sponsor shall provide 

9 that payment shall be issued, mailed, or 

10 otherwise transmitted with respect to all 

11 clean claims submitted by pharmacies 

12 (other than pharmacies that dispense 

13 drugs by mail order only or are located in, 

14 or contract with, a long-term care facility) 

15 under this part within the applicable num16 ber of calendar days after the date on 

17 which the claim is received. 

18 ‘‘(ii) CLEAN CLAIM DEFINED.—In this 

19 paragraph, the term ‘clean claim’ means a 

20 claim that has no defect or impropriety 

21 (including any lack of any required sub22 stantiating documentation) or particular 

23 circumstance requiring special treatment 

24 that prevents timely payment from being 

25 made on the claim under this part. 


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1 ‘‘(iii) DATE OF RECEIPT OF CLAIM.— 

2 In this paragraph, a claim is considered to 

3 have been received— 

4 ‘‘(I) with respect to claims sub5 mitted electronically, on the date on 

6 which the claim is transferred; and 

7 ‘‘(II) with respect to claims sub8 mitted otherwise, on the 5th day after 

9 the postmark date of the claim or the 

10 date specified in the time stamp of the 

11 transmission. 

12 ‘‘(B) APPLICABLE NUMBER OF CALENDAR

13 DAYS DEFINED.—In this paragraph, the term 

14 ‘applicable number of calendar days’ means— 

15 ‘‘(i) with respect to claims submitted 

16 electronically, 14 days; and 

17 ‘‘(ii) with respect to claims submitted 

18 otherwise, 30 days. 

19 ‘‘(C) INTEREST PAYMENT.— 

20 ‘‘(i) IN GENERAL.—Subject to clause 

21 (ii), if payment is not issued, mailed, or 

22 otherwise transmitted within the applicable 

23 number of calendar days (as defined in 

24 subparagraph (B)) after a clean claim is 

25 received, the PDP sponsor shall pay interVerDate Aug 31 2005 00:59 Jun 10, 2008 Jkt 069200 PO 00000 Frm 00218 Fmt 6652 Sfmt 6201 E:\BILLS\S3101.PCS S3101

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1 est to the pharmacy that submitted the 

2 claim at a rate equal to the weighted aver3 age of interest on 3-month marketable 

4 Treasury securities determined for such 

5 period, increased by 0.1 percentage point 

6 for the period beginning on the day after 

7 the required payment date and ending on 

8 the date on which payment is made (as de9 termined under subparagraph (D)(iv)). In10 terest amounts paid under this subpara11 graph shall not be counted against the ad12 ministrative costs of a prescription drug 

13 plan or treated as allowable risk corridor 

14 costs under section 1860D–15(e). 

15 ‘‘(ii) AUTHORITY NOT TO CHARGE IN16 TEREST.—The Secretary may provide that 

17 a PDP sponsor is not charged interest 

18 under clause (i) in the case where there 

19 are exigent circumstances, including nat20 ural disasters and other unique and unex21 pected events, that prevent the timely proc22 essing of claims. 

23 ‘‘(D) PROCEDURES INVOLVING CLAIMS.— 

24 ‘‘(i) CLAIM DEEMED TO BE CLEAN.— 

25 A claim is deemed to be a clean claim if 


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1 the PDP sponsor involved does not provide 

2 notice to the claimant of any deficiency in 

3 the claim— 

4 ‘‘(I) with respect to claims sub5 mitted electronically, within 10 days 

6 after the date on which the claim is 

7 received; and 

8 ‘‘(II) with respect to claims sub9 mitted otherwise, within 15 days after 

10 the date on which the claim is re11 ceived. 

12 ‘‘(ii) CLAIM DETERMINED TO NOT BE

13 A CLEAN CLAIM.— 

14 ‘‘(I) IN GENERAL.—If a PDP 

15 sponsor determines that a submitted 

16 claim is not a clean claim, the PDP 

17 sponsor shall, not later than the end 

18 of the period described in clause (i), 

19 notify the claimant of such determina20 tion. Such notification shall specify all 

21 defects or improprieties in the claim 

22 and shall list all additional informa23 tion or documents necessary for the 

24 proper processing and payment of the 

25 claim. 


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1 ‘‘(II) DETERMINATION AFTER

2 SUBMISSION OF ADDITIONAL INFOR3 MATION.—A claim is deemed to be a 

4 clean claim under this paragraph if 

5 the PDP sponsor involved does not 

6 provide notice to the claimant of any 

7 defect or impropriety in the claim 

8 within 10 days of the date on which 

9 additional information is received 

10 under subclause (I). 

11 ‘‘(iii) OBLIGATION TO PAY.—A claim 

12 submitted to a PDP sponsor that is not 

13 paid or contested by the sponsor within the 

14 applicable number of days (as defined in 

15 subparagraph (B)) after the date on which 

16 the claim is received shall be deemed to be 

17 a clean claim and shall be paid by the 

18 PDP sponsor in accordance with subpara19 graph (A). 

20 ‘‘(iv) DATE OF PAYMENT OF CLAIM.— 

21 Payment of a clean claim under such sub22 paragraph is considered to have been made 

23 on the date on which— 


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1 ‘‘(I) with respect to claims paid 

2 electronically, the payment is trans3 ferred; and 

4 ‘‘(II) with respect to claims paid 

5 otherwise, the payment is submitted 

6 to the United States Postal Service or 

7 common carrier for delivery. 

8 ‘‘(E) ELECTRONIC TRANSFER OF

9 FUNDS.—A PDP sponsor shall pay all clean 

10 claims submitted electronically by electronic 

11 transfer of funds if the pharmacy so requests or 

12 has so requested previously. In the case where 

13 such payment is made electronically, remittance 

14 may be made by the PDP sponsor electronically 

15 as well. 

16 ‘‘(F) PROTECTING THE RIGHTS OF CLAIM17 ANTS.— 

18 ‘‘(i) IN GENERAL.—Nothing in this 

19 paragraph shall be construed to prohibit or 

20 limit a claim or action not covered by the 

21 subject matter of this section that any in22 dividual or organization has against a pro23 vider or a PDP sponsor. 

24 ‘‘(ii) ANTI-RETALIATION.—Consistent 

25 with applicable Federal or State law, a 


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1 PDP sponsor shall not retaliate against an 

2 individual or provider for exercising a right 

3 of action under this subparagraph. 

4 ‘‘(G) RULE OF CONSTRUCTION.—A deter5 mination under this paragraph that a claim 

6 submitted by a pharmacy is a clean claim shall 

7 not be construed as a positive determination re8 garding eligibility for payment under this title, 

9 nor is it an indication of government approval 

10 of, or acquiescence regarding, the claim sub11 mitted. The determination shall not relieve any 

12 party of civil or criminal liability with respect to 

13 the claim, nor does it offer a defense to any ad14 ministrative, civil, or criminal action with re15 spect to the claim.’’. 

16 (b) PROMPT PAYMENT BY MA–PD PLANS.—Section 

17 1857(f) of the Social Security Act (42 U.S.C. 1395w–27) 

18 is amended by adding at the end the following new para19 graph: 

20 ‘‘(3) INCORPORATION OF CERTAIN PRESCRIP21 TION DRUG PLAN CONTRACT REQUIREMENTS.—The 

22 following provisions shall apply to contracts with a 

23 Medicare Advantage organization offering an MA– 

24 PD plan in the same manner as they apply to conVerDate Aug 31 2005 00:59 Jun 10, 2008 Jkt 069200 PO 00000 Frm 00223 Fmt 6652 Sfmt 6201 E:\BILLS\S3101.PCS S3101

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1 tracts with a PDP sponsor offering a prescription 

2 drug plan under part D: 

3 ‘‘(A) PROMPT PAYMENT.—Section 1860D– 

4 12(b)(4).’’. 

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

6 this section shall apply to plan years beginning on or after 

7 January 1, 2010. 

8 SEC. 172. SUBMISSION OF CLAIMS BY PHARMACIES LO9 CATED IN OR CONTRACTING WITH LONG10 TERM CARE FACILITIES. 

11 (a) SUBMISSION OF CLAIMS BY PHARMACIES LO12 CATED IN OR CONTRACTING WITH LONG-TERM CARE FA13 CILITIES.— 

14 (1) SUBMISSION OF CLAIMS TO PRESCRIPTION

15 DRUG PLANS.—Section 1860D–12(b) of the Social 

16 Security Act (42 U.S.C. 1395w–112(b)), as amend17 ed by section 171(a), is amended by adding at the 

18 end the following new paragraph: 

19 ‘‘(5) SUBMISSION OF CLAIMS BY PHARMACIES

20 LOCATED IN OR CONTRACTING WITH LONG-TERM

21 CARE FACILITIES.—Each contract entered into with 

22 a PDP sponsor under this part with respect to a 

23 prescription drug plan offered by such sponsor shall 

24 provide that a pharmacy located in, or having a con25 tract with, a long-term care facility shall have not 


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1 less than 30 days (but not more than 90 days) to 

2 submit claims to the sponsor for reimbursement 

3 under the plan.’’. 

4 (2) SUBMISSION OF CLAIMS TO MA–PD

5 PLANS.—Section 1857(f)(3) of the Social Security 

6 Act, as added by section 171(b), is amended by add7 ing at the end the following new subparagraph: 

8 ‘‘(B) SUBMISSION OF CLAIMS BY PHAR9 MACIES LOCATED IN OR CONTRACTING WITH

10 LONG-TERM CARE FACILITIES.—Section 

11 1860D–12(b)(5).’’. 

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

13 this section shall apply to plan years beginning on or after 

14 January 1, 2010. 

15 SEC. 173. REGULAR UPDATE OF PRESCRIPTION DRUG 

16 PRICING STANDARD. 

17 (a) REQUIREMENT FOR PRESCRIPTION DRUG

18 PLANS.—Section 1860D–12(b) of the Social Security Act 

19 (42 U.S.C. 1395w–112(b)), as amended by section 

20 172(a)(1), is amended by adding at the end the following 

21 new paragraph: 

22 ‘‘(6) REGULAR UPDATE OF PRESCRIPTION

23 DRUG PRICING STANDARD.—If the PDP sponsor of 

24 a prescription drug plan uses a standard for reim25 bursement of pharmacies based on the cost of a 


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1 drug, each contract entered into with such sponsor 

2 under this part with respect to the plan shall provide 

3 that the sponsor shall update such standard not less 

4 frequently than once every 7 days, beginning with an 

5 initial update on January 1 of each year, to accu6 rately reflect the market price of acquiring the 

7 drug.’’. 

8 (b) REQUIREMENT FOR MA–PD PLANS.—Section 

9 1857(f)(3) of the Social Security Act, as amended by sec10 tion 172(a)(2), is amended by adding at the end the fol11 lowing new subparagraph: 

12 ‘‘(C) REGULAR UPDATE OF PRESCRIPTION

13 DRUG PRICING STANDARD.—Section 1860D– 

14 12(b)(6).’’. 

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

16 this section shall apply to plan years beginning on or after 

17 January 1, 2009. 

18 PART II—OTHER PROVISIONS 

19 SEC. 175. INCLUSION OF BARBITURATES AND 

20 BENZODIAZEPINES AS COVERED PART D 

21 DRUGS. 

22 (a) IN GENERAL.—Section 1860D–2(e)(2)(A) of the 

23 Social Security Act (42 U.S.C. 1395w–102(e)(2)(A)) is 

24 amended by inserting after ‘‘agents),’’ the following ‘‘other 

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1 rates) if the barbiturate is used in the treatment of epi2 lepsy, cancer, or a chronic mental health disorder, and 

3 other than subparagraph (J) of such section (relating to 

4 benzodiazepines),’’. 

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

6 subsection (a) shall apply to prescriptions dispensed on or 

7 after January 1, 2012. 

8 SEC. 176. FORMULARY REQUIREMENTS WITH RESPECT TO 

9 CERTAIN CATEGORIES OR CLASSES OF 

10 DRUGS. 

11 Section 1860D–4(b)(3) of the Social Security Act (42 

12 U.S.C. 1395w–104(b)(3)) is amended— 

13 (1) in subparagraph (C)(i), by striking ‘‘The 

14 formulary’’ and inserting ‘‘Subject to subparagraph 

15 (G), the formulary’’; and 

16 (2) by inserting after subparagraph (F) the fol17 lowing new subparagraph: 

18 ‘‘(G) REQUIRED INCLUSION OF DRUGS IN

19 CERTAIN CATEGORIES AND CLASSES.— 

20 ‘‘(i) IDENTIFICATION OF DRUGS IN

21 CERTAIN CATEGORIES AND CLASSES.—Be22 ginning with plan year 2010, the Secretary 

23 shall identify, as appropriate, categories 

24 and classes of drugs for which both of the 

25 following criteria are met: 


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1 ‘‘(I) Restricted access to drugs in 

2 the category or class would have 

3 major or life threatening clinical con4 sequences for individuals who have a 

5 disease or disorder treated by the 

6 drugs in such category or class. 

7 ‘‘(II) There is significant clinical 

8 need for such individuals to have ac9 cess to multiple drugs within a cat10 egory or class due to unique chemical 

11 actions and pharmacological effects of 

12 the drugs within the category or class, 

13 such as drugs used in the treatment 

14 of cancer. 

15 ‘‘(ii) FORMULARY REQUIREMENTS.— 

16 Subject to clause (iii), PDP sponsors offer17 ing prescription drug plans shall be re18 quired to include all covered part D drugs 

19 in the categories and classes identified by 

20 the Secretary under clause (i). 

21 ‘‘(iii) EXCEPTIONS.—The Secretary 

22 may establish exceptions that permits a 

23 PDP sponsor of a prescription drug plan 

24 to exclude from its formulary a particular 

25 covered part D drug in a category or class 


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1 that is otherwise required to be included in 

2 the formulary under clause (ii) (or to oth3 erwise limit access to such a drug). Any 

4 exceptions established under the preceding 

5 sentence shall be provided under a process 

6 that— 

7 ‘‘(I) ensures that any exception 

8 to such requirement is based upon sci9 entific evidence and medical standards 

10 of practice; and 

11 ‘‘(II) includes a public notice and 

12 comment period.’’. 

13 Subtitle F—Other Provisions 

14 SEC. 181. USE OF PART D DATA. 

15 Section 1860D–12(b)(3)(D) of the Social Security 

16 Act (42 U.S.C. 1395w–112(b)(3)(D)) is amended by add17 ing at the end the following sentence: ‘‘Notwithstanding 

18 any other provision of law, information provided to the 

19 Secretary under the application of section 1857(e)(1) to 

20 contracts under this section under the preceding sentence 

21 may be used for the purposes of carrying out this part, 

22 improving public health through research on the utiliza23 tion, safety, effectiveness, quality, and efficiency of health 

24 care services (as the Secretary determines appropriate), 


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1 and conducting Congressional oversight, monitoring, and 

2 analysis of the program under this title.’’. 

3 SEC. 182. REVISION OF DEFINITION OF MEDICALLY AC4 CEPTED INDICATION FOR DRUGS. 

5 (a) REVISION OF DEFINITION FOR PART D 

6 DRUGS.— 

7 (1) IN GENERAL.—Section 1860D–2(e)(1) of 

8 the Social Security Act (42 U.S.C. 1395w– 

9 102(e)(1)) is amended, in the matter following sub10 paragraph (B)— 

11 (A) by striking ‘‘(as defined in section 

12 1927(k)(6))’’ and inserting ‘‘(as defined in 

13 paragraph (4))’’; and 

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

15 paragraph: 

16 ‘‘(4) MEDICALLY ACCEPTED INDICATION DE17 FINED.— 

18 ‘‘(A) IN GENERAL.—For purposes of para19 graph (1), the term ‘medically accepted indica20 tion’ has the meaning given that term— 

21 ‘‘(i) in the case of a covered part D 

22 drug used in an anticancer 

23 chemotherapeutic regimen, in section 

24 1861(t)(2)(B), except that in applying 

25 such section— 


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1 ‘‘(I) ‘prescription drug plan or 

2 MA–PD plan’ shall be substituted for 

3 ‘carrier’ each place it appears; and 

4 ‘‘(II) subject to subparagraph 

5 (B), the compendia described in sec6 tion 1927(g)(1)(B)(i)(III) shall be in7 cluded in the list of compendia de8 scribed in clause (ii)(I) section 

9 1861(t)(2)(B); and 

10 ‘‘(ii) in the case of any other covered 

11 part D drug, in section 1927(k)(6). 

12 ‘‘(B) CONFLICT OF INTEREST.—On and 

13 after January 1, 2010, subparagraph (A)(i)(II) 

14 shall not apply unless the compendia described 

15 in section 1927(g)(1)(B)(i)(III) meets the re16 quirement in the third sentence of section 

17 1861(t)(2)(B). 

18 ‘‘(C) UPDATE.—For purposes of applying 

19 subparagraph (A)(ii), the Secretary shall revise 

20 the list of compendia described in section 

21 1927(g)(1)(B)(i) as is appropriate for identi22 fying medically accepted indications for drugs. 

23 Any such revision shall be done in a manner 

24 consistent with the process for revising com25 pendia under section 1861(t)(2)(B).’’. 


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1 (2) EFFECTIVE DATE.—The amendments made 

2 by this subsection shall apply to plan years begin3 ning on or after January 1, 2009. 

4 (b) CONFLICTS OF INTEREST.—Section 

5 1861(t)(2)(B) of the Social Security Act (42 U.S.C. 

6 1395x(t)(2)(B)) is amended by adding at the end the fol7 lowing new sentence: ‘‘On and after January 1, 2010, no 

8 compendia may be included on the list of compendia under 

9 this subparagraph unless the compendia has a publicly 

10 transparent process for evaluating therapies and for iden11 tifying potential conflicts of interests.’’. 

12 SEC. 183. CONTRACT WITH A CONSENSUS-BASED ENTITY 

13 REGARDING PERFORMANCE MEASUREMENT. 

14 (a) CONTRACT.— 

15 (1) IN GENERAL.—Part E of title XVIII of the 

16 Social Security Act (42 U.S.C. 1395x et seq.) is 

17 amended by inserting after section 1889 the fol18 lowing new section: 

19 ‘‘CONTRACT WITH A CONSENSUS-BASED ENTITY

20 REGARDING PERFORMANCE MEASUREMENT

21 ‘‘SEC. 1890. (a) CONTRACT.— 

22 ‘‘(1) IN GENERAL.—For purposes of activities 

23 conducted under this Act, the Secretary shall iden24 tify and have in effect a contract with a consensus25 based entity, such as the National Quality Forum, 

26 that meets the requirements described in subsection 


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1 (c). Such contract shall provide that the entity will 

2 perform the duties described in subsection (b). 

3 ‘‘(2) TIMING FOR FIRST CONTRACT.—As soon 

4 as practicable after the date of the enactment of this 

5 subsection, the Secretary shall enter into the first 

6 contract under paragraph (1). 

7 ‘‘(3) PERIOD OF CONTRACT.—A contract under 

8 paragraph (1) shall be for a period of 4 years (ex9 cept as may be renewed after a subsequent bidding 

10 process). 

11 ‘‘(4) COMPETITIVE PROCEDURES.—Competitive 

12 procedures (as defined in section 4(5) of the Office 

13 of Federal Procurement Policy Act (41 U.S.C. 

14 403(5))) shall be used to enter into a contract under 

15 paragraph (1). 

16 ‘‘(b) DUTIES.—The duties described in this sub17 section are the following: 

18 ‘‘(1) PRIORITY SETTING PROCESS.—The entity 

19 shall synthesize evidence and convene key stake20 holders to make recommendations, with respect to 

21 activities conducted under this Act, on an integrated 

22 national strategy and priorities for health care per23 formance measurement in all applicable settings. In 

24 making such recommendations, the entity shall— 


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1 ‘‘(A) ensure that priority is given to meas2 ures— 

3 ‘‘(i) that address the health care pro4 vided to patients with prevalent, high-cost 

5 chronic diseases; 

6 ‘‘(ii) with the greatest potential for 

7 improving the quality, efficiency, and pa8 tient-centeredness of health care; and 

9 ‘‘(iii) that may be implemented rap10 idly due to existing evidence, standards of 

11 care, or other reasons; and 

12 ‘‘(B) take into account measures that— 

13 ‘‘(i) may assist consumers and pa14 tients in making informed health care deci15 sions; 

16 ‘‘(ii) address health disparities across 

17 groups and areas; and 

18 ‘‘(iii) address the continuum of care a 

19 patient receives, including services fur20 nished by multiple health care providers or 

21 practitioners and across multiple settings. 

22 ‘‘(2) ENDORSEMENT OF MEASURES.—The enti23 ty shall provide for the endorsement of standardized 

24 health care performance measures. The endorsement 


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1 process under the preceding sentence shall consider 

2 whether a measure— 

3 ‘‘(A) is evidence-based, reliable, valid, 

4 verifiable, relevant to enhanced health out5 comes, actionable at the caregiver level, feasible 

6 to collect and report, and responsive to vari7 ations in patient characteristics, such as health 

8 status, language capabilities, race or ethnicity, 

9 and income level; and 

10 ‘‘(B) is consistent across types of health 

11 care providers, including hospitals and physi12 cians. 

13 ‘‘(3) MAINTENANCE OF MEASURES.—The entity 

14 shall establish and implement a process to ensure 

15 that measures endorsed under paragraph (2) are up16 dated (or retired if obsolete) as new evidence is de17 veloped. 

18 ‘‘(4) PROMOTION OF THE DEVELOPMENT OF

19 ELECTRONIC HEALTH RECORDS.—The entity shall 

20 promote the development and use of electronic 

21 health records that contain the functionality for 

22 automated collection, aggregation, and transmission 

23 of performance measurement information. 


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1 ‘‘(5) ANNUAL REPORT TO CONGRESS AND THE

2 SECRETARY; SECRETARIAL PUBLICATION AND COM3 MENT.— 

4 ‘‘(A) ANNUAL REPORT.—By not later than 

5 March 1 of each year (beginning with 2009), 

6 the entity shall submit to Congress and the Sec7 retary a report containing a description of— 

8 ‘‘(i) the implementation of quality 

9 measurement initiatives under this Act and 

10 the coordination of such initiatives with 

11 quality initiatives implemented by other 

12 payers; 

13 ‘‘(ii) the recommendations made 

14 under paragraph (1); and 

15 ‘‘(iii) the performance by the entity of 

16 the duties required under the contract en17 tered into with the Secretary under sub18 section (a). 

19 ‘‘(B) SECRETARIAL REVIEW AND PUBLICA20 TION OF ANNUAL REPORT.—Not later than 6 

21 months after receiving a report under subpara22 graph (A) for a year, the Secretary shall— 

23 ‘‘(i) review such report; and 


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1 ‘‘(ii) publish such report in the Fed2 eral Register, together with any comments 

3 of the Secretary on such report. 

4 ‘‘(c) REQUIREMENTS DESCRIBED.—The require5 ments described in this subsection are the following: 

6 ‘‘(1) PRIVATE NONPROFIT.—The entity is a pri7 vate nonprofit entity governed by a board. 

8 ‘‘(2) BOARD MEMBERSHIP.—The members of 

9 the board of the entity include— 

10 ‘‘(A) representatives of health plans and 

11 health care providers and practitioners or rep12 resentatives of groups representing such health 

13 plans and health care providers and practi14 tioners; 

15 ‘‘(B) health care consumers or representa16 tives of groups representing health care con17 sumers; and 

18 ‘‘(C) representatives of purchasers and em19 ployers or representatives of groups rep20 resenting purchasers or employers. 

21 ‘‘(3) ENTITY MEMBERSHIP.—The membership 

22 of the entity includes persons who have experience 

23 with— 

24 ‘‘(A) urban health care issues; 

25 ‘‘(B) safety net health care issues; 


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1 ‘‘(C) rural and frontier health care issues; 

2 and 

3 ‘‘(D) health care quality and safety issues. 

4 ‘‘(4) OPEN AND TRANSPARENT.—With respect 

5 to matters related to the contract with the Secretary 

6 under subsection (a), the entity conducts its business 

7 in an open and transparent manner and provides the 

8 opportunity for public comment on its activities. 

9 ‘‘(5) VOLUNTARY CONSENSUS STANDARDS SET10 TING ORGANIZATION.—The entity operates as a vol11 untary consensus standards setting organization as 

12 defined for purposes of section 12(d) of the National 

13 Technology Transfer and Advancement Act of 1995 

14 (Public Law 104–113) and Office of Management 

15 and Budget Revised Circular A–119 (published in 

16 the Federal Register on February 10, 1998). 

17 ‘‘(6) EXPERIENCE.—The entity has at least 4 

18 years of experience in establishing national con19 sensus standards. 

20 ‘‘(7) MEMBERSHIP FEES.—If the entity re21 quires a membership fee for participation in the 

22 functions of the entity, such fees shall be reasonable 

23 and adjusted based on the capacity of the potential 

24 member to pay the fee. In no case shall membership 

25 fees pose a barrier to the participation of individuals 


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1 or groups with low or nominal resources to partici2 pate in the functions of the entity. 

3 ‘‘(d) FUNDING.—For purposes of carrying out this 

4 section, the Secretary shall provide for the transfer, from 

5 the Federal Hospital Insurance Trust Fund under section 

6 1817 and the Federal Supplementary Medical Insurance 

7 Trust Fund under section 1841 (in such proportion as the 

8 Secretary determines appropriate), of $10,000,000 to the 

9 Centers for Medicare & Medicaid Services Program Man10 agement Account for each of fiscal years 2009 through 

11 2012.’’. 

12 (2) SENSE OF THE SENATE.—It is the Sense of 

13 the Senate that the selection by the Secretary of 

14 Health and Human Services of an entity to contract 

15 with under section 1890(a) of the Social Security 

16 Act, as added by paragraph (1), should not be con17 strued as diminishing the significant contributions of 

18 the Boards of Medicine, the quality alliances, and 

19 other clinical and technical experts to efforts to 

20 measure and improve the quality of health care serv21 ices. 

22 (b) GAO STUDY AND REPORTS ON THE PERFORM23 ANCE AND COSTS OF THE CONSENSUS-BASED ENTITY

24 UNDER THE CONTRACT.— 


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1 (1) IN GENERAL.—The Comptroller General of 

2 the United States shall conduct a study on— 

3 (A) the performance of the entity with a 

4 contract with the Secretary of Health and 

5 Human Services under section 1890(a) of the 

6 Social Security Act, as added by subsection (a), 

7 of its duties under such contract; and 

8 (B) the costs incurred by such entity in 

9 performing such duties. 

10 (2) REPORTS.—Not later than 18 months and 

11 36 months after the effective date of the first con12 tract entered into under such section 1890(a), the 

13 Comptroller General of the United States shall sub14 mit to Congress a report containing the results of 

15 the study conducted under paragraph (1), together 

16 with recommendations for such legislation and ad17 ministrative action as the Comptroller General deter18 mines appropriate. 

19 SEC. 184. COST-SHARING FOR CLINICAL TRIALS. 

20 Section 1833 of the Social Security Act (42 U.S.C. 

21 1395l), as amended by section 152(a), is amended by add22 ing at the end the following new subsection: 

23 ‘‘(x) METHODS OF PAYMENT.—The Secretary may 

24 develop alternative methods of payment for items and 

25 services provided under clinical trials and comparative efVerDate Aug 31 2005 00:59 Jun 10, 2008 Jkt 069200 PO 00000 Frm 00240 Fmt 6652 Sfmt 6201 E:\BILLS\S3101.PCS S3101

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1 fectiveness studies sponsored or supported by an agency 

2 of the Department of Health and Human Services, as de3 termined by the Secretary, to those that would otherwise 

4 apply under this section, to the extent such alternative 

5 methods are necessary to preserve the scientific validity 

6 of such trials or studies, such as in the case where mask7 ing the identity of interventions from patients and inves8 tigators is necessary to comply with the particular trial 

9 or study design.’’. 

10 SEC. 185. ADDRESSING HEALTH CARE DISPARITIES. 

11 Title XVIII of the Social Security Act (42 U.S.C. 

12 1395 et seq.) is amended by inserting after section 1808 

13 the following new section: 

14 ‘‘ADDRESSING HEALTH CARE DISPARITIES

15 ‘‘SEC. 1809. (a) EVALUATING DATA COLLECTION

16 APPROACHES.—The Secretary shall evaluate approaches 

17 for the collection of data under this title, to be performed 

18 in conjunction with existing quality reporting require19 ments and programs under this title, that allow for the 

20 ongoing, accurate, and timely collection and evaluation of 

21 data on disparities in health care services and performance 

22 on the basis of race, ethnicity, and gender. In conducting 

23 such evaluation, the Secretary shall consider the following 

24 objectives: 

25 ‘‘(1) Protecting patient privacy. 


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1 ‘‘(2) Minimizing the administrative burdens of 

2 data collection and reporting on providers and health 

3 plans participating under this title. 

4 ‘‘(3) Improving Medicare program data on race, 

5 ethnicity, and gender. 

6 ‘‘(b) REPORTS TO CONGRESS.— 

7 ‘‘(1) REPORT ON EVALUATION.—Not later than 

8 18 months after the date of the enactment of this 

9 section, the Secretary shall submit to Congress a re10 port on the evaluation conducted under subsection 

11 (a). Such report shall, taking into consideration the 

12 results of such evaluation— 

13 ‘‘(A) identify approaches (including defin14 ing methodologies) for identifying and collecting 

15 and evaluating data on health care disparities 

16 on the basis of race, ethnicity, and gender for 

17 the original Medicare fee-for-service program 

18 under parts A and B, the Medicare Advantage 

19 program under part C, and the Medicare pre20 scription drug program under part D; and 

21 ‘‘(B) include recommendations on the most 

22 effective strategies and approaches to reporting 

23 HEDIS quality measures as required under sec24 tion 1852(e)(3) and other nationally recognized 


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1 quality performance measures, as appropriate, 

2 on the basis of race, ethnicity, and gender. 

3 ‘‘(2) REPORTS ON DATA ANALYSES.—Not later 

4 than 4 years after the date of the enactment of this 

5 section, and 4 years thereafter, the Secretary shall 

6 submit to Congress a report that includes rec7 ommendations for improving the identification of 

8 health care disparities for Medicare beneficiaries 

9 based on analyses of the data collected under sub10 section (c). 

11 ‘‘(c) IMPLEMENTING EFFECTIVE APPROACHES.—Not 

12 later than 24 months after the date of the enactment of 

13 this section, the Secretary shall implement the approaches 

14 identified in the report submitted under subsection (b)(1) 

15 for the ongoing, accurate, and timely collection and eval16 uation of data on health care disparities on the basis of 

17 race, ethnicity, and gender.’’. 

18 SEC. 186. DEMONSTRATION TO IMPROVE CARE TO PRE19 VIOUSLY UNINSURED. 

20 (a) ESTABLISHMENT.—Within one year after the 

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

22 section referred to as the ‘‘Secretary’’) shall establish a 

23 demonstration project to determine the greatest needs and 

24 most effective methods of outreach to medicare bene25 ficiaries who were previously uninsured. 


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1 (b) SCOPE.—The demonstration shall be in no fewer 

2 than 10 sites, and shall include state health insurance as3 sistance programs, community health centers, community4 based organizations, community health workers, and other 

5 service providers under parts A, B, and C of title XVIII 

6 of the Social Security Act. Grantees that are plans oper7 ating under part C shall document that enrollees who were 

8 previously uninsured receive the ‘‘Welcome to Medicare’’ 

9 physical exam. 

10 (c) DURATION.—The Secretary shall conduct the 

11 demonstration project for a period of 2 years. 

12 (d) REPORT AND EVALUATION.—The Secretary shall 

13 conduct an evaluation of the demonstration and not later 

14 than 1 year after the completion of the project shall sub15 mit to Congress a report including the following: 

16 (1) An analysis of the effectiveness of outreach 

17 activities targeting beneficiaries who were previously 

18 uninsured, such as revising outreach and enrollment 

19 materials (including the potential for use of video in20 formation), providing one-on-one counseling, working 

21 with community health workers, and amending the 

22 Medicare and You handbook. 

23 (2) The effect of such outreach on beneficiary 

24 access to care, utilization of services, efficiency and 


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1 cost-effectiveness of health care delivery, patient sat2 isfaction, and select health outcomes. 

3 SEC. 187. OFFICE OF THE INSPECTOR GENERAL REPORT 

4 ON COMPLIANCE WITH AND ENFORCEMENT 

5 OF NATIONAL STANDARDS ON CULTURALLY 

6 AND LINGUISTICALLY APPROPRIATE SERV7 ICES (CLAS) IN MEDICARE. 

8 (a) REPORT.—Not later than two years after the date 

9 of the enactment of this Act, the Inspector General of the 

10 Department of Health and Human Services shall prepare 

11 and publish a report on— 

12 (1) the extent to which Medicare providers and 

13 plans are complying with the Office for Civil Rights’ 

14 Guidance to Federal Financial Assistance Recipients 

15 Regarding Title VI Prohibition Against National Or16 igin Discrimination Affecting Limited English Pro17 ficient Persons and the Office of Minority Health’s 

18 Culturally and Linguistically Appropriate Services 

19 Standards in health care; and 

20 (2) a description of the costs associated with or 

21 savings related to the provision of language services. 

22 Such report shall include recommendations on improving 

23 compliance with CLAS Standards and recommendations 

24 on improving enforcement of CLAS Standards. 


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1 (b) IMPLEMENTATION.—Not later than one year 

2 after the date of publication of the report under subsection 

3 (a), the Department of Health and Human Services shall 

4 implement changes responsive to any deficiencies identi5 fied in the report. 

6 SEC. 188. MEDICARE IMPROVEMENT FUNDING. 

7 (a) MEDICARE IMPROVEMENT FUND.—Title XVIII 

8 of the Social Security Act (42 U.S.C. 1395 et seq.) is 

9 amended by adding at the end the following new section: 

10 ‘‘MEDICARE IMPROVEMENT FUND

11 ‘‘SEC. 1898. (a) ESTABLISHMENT.— 

12 ‘‘The Secretary shall establish under this title a 

13 Medicare Improvement Fund (in this section re14 ferred to as the ‘Fund’) which shall be available to 

15 the Secretary to make improvements under the origi16 nal fee-for-service program under parts A and B for 

17 individuals entitled to, or enrolled for, benefits under 

18 part A or enrolled under part B. 

19 ‘‘(b) FUNDING.— 

20 ‘‘(1) IN GENERAL.—There shall be available to 

21 the Fund, for expenditures from the Fund for serv22 ices furnished during fiscal year ø2014¿, 

23 $øllllll¿. 

24 ‘‘(2) PAYMENT FROM TRUST FUNDS.—The 

25 amount specified under paragraph (1) shall be avail26 able to the Fund, as expenditures are made from the 


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1 Fund, from the Federal Hospital Insurance Trust 

2 Fund and the Federal Supplementary Medical In3 surance Trust Fund in such proportion as the Sec4 retary determines appropriate. 

5 ‘‘(3) FUNDING LIMITATION.—Amounts in the 

6 Fund shall be available in advance of appropriations 

7 but only if the total amount obligated from the 

8 Fund does not exceed the amount available to the 

9 Fund under paragraph (1). The Secretary may obli10 gate funds from the Fund only if the Secretary de11 termines (and the Chief Actuary of the Centers for 

12 Medicare & Medicaid Services and the appropriate 

13 budget officer certify) that there are available in the 

14 Fund sufficient amounts to cover all such obligations 

15 incurred consistent with the previous sentence.’’. 

16 (b) IMPLEMENTATION.—For purposes of carrying out 

17 the provisions of, and amendments made by, this Act, in 

18 addition to any other amounts provided in such provisions 

19 and amendments, the Secretary of Health and Human 

20 Services shall provide for the transfer, from the Federal 

21 Hospital Insurance Trust Fund under section 1817 of the 

22 Social Security Act (42 U.S.C. 1395i) and the Federal 

23 Supplementary Medical Insurance Trust Fund under sec24 tion 1841 of such Act (42 U.S.C. 1395t), in the same pro25 portion as the Secretary determines under section 1853(f) 


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1 of such Act (42 U.S.C. 1395w–23(f)), of $140,000,000 

2 to the Centers for Medicare & Medicaid Services Program 

3 Management Account for the period of fiscal years 2009 

4 through 2013. 

5 TITLE II—MEDICAID 

6 SEC. 201. EXTENSION OF TRANSITIONAL MEDICAL ASSIST7 ANCE (TMA) AND ABSTINENCE EDUCATION 

8 PROGRAM. 

9 Section 401 of division B of the Tax Relief and 

10 Health Care Act of 2006 (Public Law 109–432, 120 Stat. 

11 2994), as amended by section 1 of Public Law 110–48 

12 (121 Stat. 244), section 2 of the TMA, Abstinence, Edu13 cation, and QI Programs Extension Act of 2007 (Public 

14 Law 110–90, 121 Stat. 984), and section 202 of the Medi15 care, Medicaid, and SCHIP Extension Act of 2007 (Public 

16 Law 110–173) is amended— 

17 (1) by striking ‘‘June 30, 2008’’ and inserting 

18 ‘‘December 31, 2009’’; 

19 (2) by striking ‘‘the third quarter of fiscal year 

20 2008’’ and inserting ‘‘the first quarter of fiscal year 

21 2010’’; and 

22 (3) by striking ‘‘the third quarter of fiscal year 

23 2007’’ and inserting ‘‘the first quarter of fiscal year 

24 2008’’. 


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1 SEC. 202. MEDICAID DSH EXTENSION. 

2 Section 1923(f)(6) of the Social Security Act (42 

3 U.S.C. 1396r–4(f)(6)) is amended— 

4 (1) in the heading, by striking ‘‘FISCAL YEAR

5 2007 AND PORTIONS OF FISCAL YEAR 2008’’ and in6 serting ‘‘FISCAL YEARS 2007 THROUGH 2009 AND THE

7 FIRST CALENDAR QUARTER OF FISCAL YEAR 2010’’; 

8 and 

9 (2) in subparagraph (A)— 

10 (A) in clause (i)— 

11 (i) in the second sentence— 

12 (I) by striking ‘‘fiscal year 2008 

13 for the period ending on June 30, 

14 2008’’ and inserting ‘‘fiscal years 

15 2008 and 2009’’; and 

(II) by striking ‘‘3 16 ⁄4 of’’; and 

17 (ii) by adding at the end the following 

18 new sentences: ‘‘Only with respect to fiscal 

19 year 2010 for the period ending on Decem20 ber 31, 2009, the DSH allotment for Ten21 nessee for such portion of the fiscal year, 

22 notwithstanding such table or terms, shall 

be 1 23 ⁄4 of the amount specified in the first 

24 sentence for fiscal year 2007.’’; 


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1 (B) in clause (ii), by striking ‘‘or for a pe2 riod in fiscal year 2008’’ and inserting ‘‘, 2008, 

3 2009, or for a period in fiscal year 2010’’; 

4 (C) in clause (iv)— 

5 (i) in the heading, by striking ‘‘FISCAL

6 YEAR 2007 AND FISCAL YEAR 2008’’ and in7 serting ‘‘FISCAL YEARS 2007 THROUGH 2009

8 AND THE FIRST CALENDAR QUARTER OF

9 FISCAL YEAR 2010’’; 

10 (ii) in subclause (I), by striking ‘‘or 

11 for a period in fiscal year 2008’’ and in12 serting ‘‘, 2008, 2009, or for a period in 

13 fiscal year 2010’’; and 

14 (iii) in subclause (II), by striking ‘‘or 

15 for a period in fiscal year 2008’’ and in16 serting ‘‘, 2008, 2009, or for a period in 

17 fiscal year 2010’’; and 

18 (3) in subparagraph (B)(i)— 

19 (A) in the first sentence, by striking ‘‘fiscal 

20 year 2007’’ and inserting ‘‘each of fiscal years 

21 2007 through 2009’’; and 

22 (B) by striking the second sentence and in23 serting the following: ‘‘Only with respect to fis24 cal year 2010 for the period ending on Decem25 ber 31, 2009, the DSH allotment for Hawaii 


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1 for such portion of the fiscal year, notwith2 standing the table set forth in paragraph (2), 

3 shall be $2,500,000.’’. 

4 SEC. 203. PHARMACY REIMBURSEMENT UNDER MEDICAID. 

5 (a) DELAY IN NEW PAYMENT LIMITS FOR MULTIPLE

6 SOURCE DRUGS UNDER MEDICAID.—Notwithstanding 

7 paragraphs (4) and (5) of subsection (e) of section 1927 

8 of the Social Security Act (42 U.S.C. 1396r–8) or part 

9 447 of title 42, Code of Federal Regulations (as in effect 

10 on the date of the enactment of this Act), the Secretary 

11 of Health and Human Services shall not require a State 

12 to establish prior to September 30, 2009, payment limits 

13 for multiple source drugs under a State Medicaid plan 

14 that do not exceed the specific upper limit established 

15 under section 447.514(b) of title 42, Code of Federal Reg16 ulations (as so in effect) and shall permit any State to 

17 continue to receive Federal financial participation for pay18 ments for such drugs that do not exceed the specific upper 

19 limit that would have applied to such payments under sec20 tion 447.332 of title 42, Code of Federal Regulations (as 

21 in effect on December 31, 2006). 

22 (b) TEMPORARY SUSPENSION OF UPDATED PUB23 LICLY AVAILABLE AMP DATA.—Notwithstanding clause 

24 (v) of section 1927(b)(3)(D) of the Social Security Act (42 

25 U.S.C. 1396r–8(b)(3)(D)), the Secretary of Health and 


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1 Human Services shall not, prior to September 30, 2009, 

2 make publicly available any AMP disclosed to the Sec3 retary. 

4 (c) DEFINITIONS.—In this subsection: 

5 (1) The term ‘‘multiple source drug’’ has the 

6 meaning given that term in section 1927(k)(7)(A)(i) 

7 of the Social Security Act (42 U.S.C. 1396r– 

8 8(k)(7)(A)(i)); and 

9 (2) The term ‘‘AMP’’ has the meaning given 

10 ‘‘average manufacturer price’’ in section 1927(k)(1) 

11 of the Social Security Act (42 U.S.C. 1396r– 

12 8(k)(1)) and ‘‘AMP’’ in section 447.504(a) of title 

13 42, Code of Federal Regulations (as in effect on the 

14 date of the enactment of this Act). 

15 SEC. 204. REVIEW OF ADMINISTRATIVE CLAIM DETERMINA16 TIONS. 

17 (a) IN GENERAL.—Section 1116 of the Social Secu18 rity Act (42 U.S.C. 1316) is amended by adding at the 

19 end the following new subsection: 

20 ‘‘(e)(1) Whenever the Secretary determines that any 

21 item or class of items on account of which Federal finan22 cial participation is claimed under title XIX shall be dis23 allowed for such participation, the State shall be entitled 

24 to and upon request shall receive a reconsideration of the 

25 disallowance, provided that such request is made during 


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1 the 60-day period that begins on the date the State re2 ceives notice of the disallowance. 

3 ‘‘(2)(A) A State may appeal a disallowance of a claim 

4 for federal financial participation under title XIX by the 

5 Secretary, or an unfavorable reconsideration of a disallow6 ance, during the 60-day period that begins on the date 

7 the State receives notice of the disallowance or of the unfa8 vorable reconsideration, in whole or in part, to the Depart9 mental Appeals Board, established in the Department of 

10 Health and Human Services (in this paragraph referred 

11 to as the ‘Board’), by filing a notice of appeal with the 

12 Board. 

13 ‘‘(B) The Board shall consider a State’s appeal of 

14 a disallowance of such a claim (or of an unfavorable recon15 sideration of a disallowance) on the basis of such docu16 mentation as the State may submit and as the Board may 

17 require to support the final decision of the Board. In de18 ciding whether to uphold a disallowance of such a claim 

19 or any portion thereof, the Board shall be bound by all 

20 applicable laws and regulations and shall conduct a thor21 ough review of the issues, taking into account all relevant 

22 evidence. The Board’s decision of an appeal under sub23 paragraph (A) shall be the final decision of the Secretary 

24 and shall be subject to reconsideration by the Board only 

25 upon motion of either party filed during the 60-day period 


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1 that begins on the date of the Board’s decision or to judi2 cial review in accordance with subparagraph (C). 

3 ‘‘(C) A State may obtain judicial review of a decision 

4 of the Board by filing an action in any United States Dis5 trict Court located within the appealing State (or, if sev6 eral States jointly appeal the disallowance of claims for 

7 Federal financial participation under section 1903, in any 

8 United States District Court that is located within any 

9 State that is a party to the appeal) or the United States 

10 District Court for the District of Columbia. Such an ac11 tion may only be filed— 

12 ‘‘(i) if no motion for reconsideration was filed 

13 within the 60-day period specified in subparagraph 

14 (B), during such 60-day period; or 

15 ‘‘(ii) if such a motion was filed within such pe16 riod, during the 60-day period that begins on the 

17 date of the Board’s decision on such motion.’’. 

18 (b) CONFORMING AMENDMENT.—Section 1116(d) of 

19 such Act (42 U.S.C. 1316(d)) is amended by striking ‘‘or 

20 XIX,’’. 

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

22 this section take effect on the date of the enactment of 

23 this Act and apply to any disallowance of a claim for Fed24 eral financial participation under title XIX of the Social 


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1 Security Act (42 U.S.C. 1396 et seq.) made on or after 

2 such date or during the 60-day period prior to such date. 

3 TITLE III—MISCELLANEOUS 

4 SEC. 301. EXTENSION OF TANF SUPPLEMENTAL GRANTS. 

5 (a) EXTENSION THROUGH FISCAL YEAR 2009.—Sec6 tion 7101(a) of the Deficit Reduction Act of 2005 (Public 

7 Law 109–171; 120 Stat. 135) is amended by striking ‘‘fis8 cal year 2008’’ and inserting ‘‘fiscal year 2009’’. 

9 (b) CONFORMING AMENDMENT.—Section 

10 403(a)(3)(H)(ii) of the Social Security Act (42 U.S.C. 

11 603(a)(3)(H)(ii)) is amended to read as follows: 

12 ‘‘(ii) subparagraph (G) shall be ap13 plied as if ‘fiscal year 2009’ were sub14 stituted for ‘fiscal year 2001’; and’’. 

15 SEC. 302. 70 PERCENT FEDERAL MATCHING FOR FOSTER 

16 CARE AND ADOPTION ASSISTANCE FOR THE 

17 DISTRICT OF COLUMBIA. 

18 (a) IN GENERAL.—Section 474(a) of the Social Secu19 rity Act (42 U.S.C. 674(a)) is amended in each of para20 graphs (1) and (2) by striking ‘‘(as defined in section 

21 1905(b) of this Act)’’ and inserting ‘‘(which shall be as 

22 defined in section 1905(b), in the case of a State other 

23 than the District of Columbia, or 70 percent, in the case 

24 of the District of Columbia)’’. 


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

2 subsection (a) shall take effect on October 1, 2008, and 

3 shall apply to calendar quarters beginning on or after that 

4 date. 

5 SEC. 303. EXTENSION OF SPECIAL DIABETES GRANT PRO6 GRAMS. 

7 (a) SPECIAL DIABETES PROGRAMS FOR TYPE I DIA8 BETES.—Section 330B(b)(2)(C) of the Public Health 

9 Service Act (42 U.S.C. 254c–2(b)(2)) is amended by strik10 ing ‘‘2009’’ and inserting ‘‘2011’’. 

11 (b) SPECIAL DIABETES PROGRAMS FOR INDIANS.— 

12 Section 330C(c)(2)(C) of the Public Health Service Act 

13 (42 U.S.C. 254c–3(c)(2)(C)) is amended by striking 

14 ‘‘2009’’ and inserting ‘‘2011’’. 

15 (c) REPORT ON GRANT PROGRAMS.—Section 4923(b) 

16 of the Balanced Budget Act of 1997 (42 U.S.C. 1254c– 

17 2 note), as amended by section 931(c) of the Medicare, 

18 Medicaid, and SCHIP Benefits Improvement and Protec19 tion Act of 2000, as enacted into law by section 1(a)(6) 

20 of Public Law 106–554, and section 1(c) of Public Law 

21 107–360, is amended— 

22 (1) in paragraph (1), by striking ‘‘and’’ at the 

23 end; 

24 (2) in paragraph (2)— 


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1 (A) by striking ‘‘a final report’’ and insert2 ing ‘‘a second interim report’’; and 

3 (B) by striking the period at the end and 

4 inserting ‘‘; and’’; and 

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

6 paragraph: 

7 ‘‘(3) a report on such evaluation not later than 

8 January 1, 2011.’’. 

9 SEC. 304. IOM REPORTS ON BEST PRACTICES FOR CON10 DUCTING SYSTEMATIC REVIEWS OF CLIN11 ICAL EFFECTIVENESS RESEARCH AND FOR 

12 DEVELOPING CLINICAL PROTOCOLS. 

13 (a) SYSTEMATIC REVIEWS OF CLINICAL EFFECTIVE14 NESS RESEARCH.— 

15 (1) STUDY.—Not later than 60 days after the 

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

17 Health and Human Services shall enter into a con18 tract with the Institute of Medicine of the National 

19 Academies (in this section referred to as the ‘‘Insti20 tute’’) under which the Institute shall conduct a 

21 study to identify the methodological standards for 

22 conducting systematic reviews of clinical effective23 ness research on health and health care in order to 

24 ensure that organizations conducting such reviews 


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258 

•S 3101 PCS

1 have information on methods that are objective, sci2 entifically valid, and consistent. 

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

4 the effective date of the contract under paragraph 

5 (1), the Institute, as part of such contract, shall 

6 submit to the Secretary of Health and Human Serv7 ices and the appropriate committees of jurisdiction 

8 of Congress a report containing the results of the 

9 study conducted under paragraph (1), together with 

10 recommendations for such legislation and adminis11 trative action as the Institute determines appro12 priate. 

13 (3) PARTICIPATION.—The contract under para14 graph (1) shall require that stakeholders with exper15 tise in conducting clinical effectiveness research par16 ticipate on the panel responsible for conducting the 

17 study under paragraph (1) and preparing the report 

18 under paragraph (2). 

19 (b) CLINICAL PROTOCOLS.— 

20 (1) STUDY.—Not later than 60 days after the 

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

22 Health and Human Services shall enter into a con23 tract with the Institute of Medicine of the National 

24 Academies (in this section referred to as the ‘‘Insti25 tute’’) under which the Institute shall conduct a 


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•S 3101 PCS

1 study on the best methods used in developing clinical 

2 practice guidelines in order to ensure that organiza3 tions developing such guidelines have information on 

4 approaches that are objective, scientifically valid, 

5 and consistent. 

6 (2) REPORT.—Not later than 18 months after 

7 the effective date of the contract under paragraph 

8 (1), the Institute, as part of such contract, shall 

9 submit to the Secretary of Health and Human Serv10 ices and the appropriate committees of jurisdiction 

11 of Congress a report containing the results of the 

12 study conducted under paragraph (1), together with 

13 recommendations for such legislation and adminis14 trative action as the Institute determines appro15 priate. 

16 (3) PARTICIPATION.—The contract under para17 graph (1) shall require that stakeholders with exper18 tise in making clinical recommendations participate 

19 on the panel responsible for conducting the study 

20 under paragraph (1) and preparing the report under 

21 paragraph (2). 

22 (c) FUNDING.—Out of any funds in the Treasury not 

23 otherwise appropriated, there are appropriated for the pe24 riod of fiscal years 2009 and 2010, $3,000,000 to carry 

25 out this section. 


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Calendar No. 772 

110TH CONGRESS 

2D SESSION S. 3101 

A BILL 

To amend titles XVIII and XIX of the Social Secumacy access, and for other purposes. tain access to care in rural areas, including phar- hance low-income benefit programs, and to main- to preventive and mental health services, to en- Medicare program, to improve beneficiary access rity Act to extend expiring provisions under the 

JUNE 9, 2008 

Read the second time and placed on the calendar 


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