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[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 3101 Placed on Calendar Senate (PCS)]

                                                       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.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Medicare 
Improvements for Patients and Providers Act of 2008''.
    (b) Table of Contents.--The table of contents of 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

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-
                            for-service 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

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.

                           TITLE I--MEDICARE

                  Subtitle A--Beneficiary Improvements

            PART I--PREVENTION, MENTAL HEALTH, AND MARKETING

SEC. 101. IMPROVEMENTS TO COVERAGE OF PREVENTIVE SERVICES.

    (a) Coverage of Additional Preventive Services.--
            (1) Coverage.--Section 1861 of the Social Security Act (42 
        U.S.C. 1395x), as amended by section 114 of the Medicare, 
        Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-173), 
        is amended--
                    (A) in subsection (s)(2)--
                            (i) in subparagraph (Z), by striking 
                        ``and'' after the semicolon at the end;
                            (ii) in subparagraph (AA), by adding 
                        ``and'' after the semicolon at the end; and
                            (iii) by adding at the end the following 
                        new subparagraph:
            ``(BB) additional preventive services (described in 
        subsection (ddd)(1));''; and
                    (B) by adding at the end the following new 
                subsection:

                    ``Additional Preventive Services

    ``(ddd)(1) The term `additional preventive services' means services 
not otherwise described in this title that identify medical conditions 
or risk factors and that the Secretary determines are--
            ``(A) reasonable and necessary for the prevention or early 
        detection of an illness or disability;
            ``(B) recommended with a grade of A or B by the United 
        States Preventive Services Task Force; and
            ``(C) appropriate for individuals entitled to benefits 
        under part A or enrolled under part B.
    ``(2) In making determinations under paragraph (1) regarding the 
coverage of a new service, the Secretary shall use the process for 
making national coverage determinations (as defined in section 
1869(f)(1)(B)) under this title. As part of the use of such process, 
the Secretary may conduct an assessment of the relation between 
predicted outcomes and the expenditures for such service and may take 
into account the results of such assessment in making such 
determination.''.
            (2) Payment and coinsurance for additional preventive 
        services.--Section 1833(a)(1) of the Social Security Act (42 
        U.S.C. 1395l(a)(1)) is amended--
                    (A) by striking ``and'' before ``(V)''; and
                    (B) by inserting before the semicolon at the end 
                the following: ``, and (W) with respect to additional 
                preventive services (as defined in section 
                1861(ddd)(1)), the amount paid shall be (i) in the case 
                of such services which are clinical diagnostic 
                laboratory tests, the amount determined under 
                subparagraph (D), and (ii) in the case of all other 
                such services, 80 percent of the lesser of the actual 
                charge for the service or the amount determined under a 
                fee schedule established by the Secretary for purposes 
                of this subparagraph''.
            (3) Conforming amendment regarding coverage.--Section 
        1862(a)(1)(A) of the Social Security Act (42 U.S.C. 
        1395y(a)(1)(A)) is amended by inserting ``or additional 
        preventive services (as described in section 1861(ddd)(1))'' 
        after ``succeeding subparagraph''.
            (4) Rule of construction.--Nothing in the provisions of, or 
        amendments made by, this subsection shall be construed to 
        provide coverage under title XVIII of the Social Security Act 
        of items and services for the treatment of a medical condition 
        that is not otherwise covered under such title.
    (b) Revisions to Initial Preventive Physical Examination.--
            (1) In general.--Section 1861(ww) of the Social Security 
        Act (42 U.S.C. 1395x(ww)) is amended--
                    (A) in paragraph (1)--
                            (i) by inserting ``body mass index,'' after 
                        ``weight'';
                            (ii) by striking ``, and an 
                        electrocardiogram''; and
                            (iii) by inserting ``and end-of-life 
                        planning (as defined in paragraph (3)) upon the 
                        agreement with the individual'' after 
                        ``paragraph (2)'';
                    (B) in paragraph (2), by adding at the end the 
                following new subparagraphs:
            ``(M) An electrocardiogram.
            ``(N) Additional preventive services (as defined in 
        subsection (ddd)(1)).''; and
                    (C) by adding at the end the following new 
                paragraph:
    ``(3) For purposes of paragraph (1), the term `end-of-life 
planning' means verbal or written information regarding--
            ``(A) an individual's ability to prepare an advance 
        directive in the case that an injury or illness causes the 
        individual to be unable to make health care decisions; and
            ``(B) whether or not the physician is willing to follow the 
        individual's wishes as expressed in an advance directive.''.
            (2) Waiver of application of deductible.--The first 
        sentence of section 1833(b) of the Social Security Act (42 
        U.S.C. 1395l(b)) is amended--
                    (A) by striking ``and'' before ``(8)''; and
                    (B) by inserting ``, and (9) such deductible shall 
                not apply with respect to an initial preventive 
                physical examination (as defined in section 1861(ww))'' 
                before the period at the end.
            (3) Extension of eligibility period from six months to one 
        year.--Section 1862(a)(1)(K) of the Social Security Act (42 
        U.S.C. 1395y(a)(1)(K)) is amended by striking ``6 months'' and 
        inserting ``1 year''.
            (4) Technical correction.--Section 1862(a)(1)(K) of the 
        Social Security Act (42 U.S.C. 1395y(a)(1)(K)) is amended by 
        striking ``not later'' and inserting ``more''.
    (c) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after January 1, 2009.

SEC. 102. ELIMINATION OF DISCRIMINATORY COPAYMENT RATES FOR MEDICARE 
              OUTPATIENT PSYCHIATRIC SERVICES.

    Section 1833(c) of the Social Security Act (42 U.S.C. 1395l(c)) is 
amended to read as follows:
    ``(c)(1) Notwithstanding any other provision of this part, with 
respect to expenses incurred in a calendar year in connection with the 
treatment of mental, psychoneurotic, and personality disorders of an 
individual who is not an inpatient of a hospital at the time such 
expenses are incurred, there shall be considered as incurred expenses 
for purposes of subsections (a) and (b)--
            ``(A) for expenses incurred in years prior to 2010, only 
        62\1/2\ percent of such expenses;
            ``(B) for expenses incurred in 2010 or 2011, only 68\3/4\ 
        percent of such expenses;
            ``(C) for expenses incurred in 2012, only 75 percent of 
        such expenses;
            ``(D) for expenses incurred in 2013, only 81\1/4\ percent 
        of such expenses; and
            ``(E) for expenses incurred in 2014 or any subsequent 
        calendar year, 100 percent of such expenses.
    ``(2) For purposes of subparagraphs (A) through (D) of paragraph 
(1), the term `treatment' does not include brief office visits (as 
defined by the Secretary) for the sole purpose of monitoring or 
changing drug prescriptions used in the treatment of such disorders or 
partial hospitalization services that are not directly provided by a 
physician.''.

SEC. 103. PROHIBITIONS AND LIMITATIONS ON CERTAIN SALES AND MARKETING 
              ACTIVITIES UNDER MEDICARE ADVANTAGE PLANS AND 
              PRESCRIPTION DRUG PLANS.

    (a) Prohibitions.--
            (1) Medicare advantage program.--
                    (A) In general.--Section 1851 of the Social 
                Security Act (42 U.S.C. 1395w-21) is amended--
                            (i) in subsection (h)(4)--
                                    (I) in subparagraph (A)--
                                            (aa) by striking ``cash or 
                                        other monetary rebates'' and 
                                        inserting ``, subject to 
                                        subsection (j)(2)(C), cash, 
                                        gifts, prizes, or other 
                                        monetary rebates''; and
                                            (bb) by striking ``, and'' 
                                        at the end and inserting a 
                                        semicolon;
                                    (II) in subparagraph (B), by 
                                striking the period at the end and 
                                inserting a semicolon; and
                                    (III) by adding at the end the 
                                following new subparagraph:
                    ``(C) shall not permit a Medicare Advantage 
                organization (or the agents, brokers, and other third 
                parties representing such organization) to conduct the 
                prohibited activities described in subsection (j)(1); 
                and''; and
                            (ii) by adding at the end the following new 
                        subsection:
    ``(j) Prohibited Activities Described and Limitations on the 
Conduct of Certain Other Activities.--
            ``(1) Prohibited activities described.--The following 
        prohibited activities are described in this paragraph:
                    ``(A) Unsolicited means of direct contact.--Any 
                unsolicited means of direct contact of prospective 
                enrollees, including soliciting door-to-door or any 
                outbound telemarketing without the prospective enrollee 
                initiating contact.
                    ``(B) Cross-selling.--The sale of other non-health 
                related products (such as annuities and life insurance) 
                during any sales or marketing activity or presentation 
                conducted with respect to a Medicare Advantage plan.
                    ``(C) Meals.--The provision of meals of any sort, 
                regardless of value, to prospective enrollees at 
                promotional and sales activities.
                    ``(D) Sales and marketing in health care settings 
                and at educational events.--Sales and marketing 
                activities for the enrollment of individuals in 
                Medicare Advantage plans that are conducted--
                            ``(i) in health care settings in areas 
                        where health care is delivered to individuals 
                        (such as physician offices and pharmacies), 
                        except in the case where such activities are 
                        conducted in common areas in health care 
                        settings; and
                            ``(ii) at educational events.''.
            (2) Medicare prescription drug program.--Section 1860D-4 of 
        the Social Security Act (42 U.S.C. 1395w-104) is amended by 
        adding at the end the following new subsection:
    ``(l) Requirements With Respect to Sales and Marketing 
Activities.--The following provisions shall apply to a PDP sponsor (and 
the agents, brokers, and other third parties representing such sponsor) 
in the same manner as such provisions apply to a Medicare Advantage 
organization (and the agents, brokers, and other third parties 
representing such organization):
            ``(1) The prohibition under section 1851(h)(4)(C) on 
        conducting activities described in section 1851(j)(1).''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to plan years beginning on or after January 1, 
        2009.
    (b) Limitations.--
            (1) Medicare advantage program.--Section 1851 of the Social 
        Security Act (42 U.S.C. 1395w-21), as amended by subsection 
        (a)(1), is amended--
                    (A) in subsection (h)(4), by adding at the end the 
                following new subparagraph:
                    ``(D) shall only permit a Medicare Advantage 
                organization (and the agents, brokers, and other third 
                parties representing such organization) to conduct the 
                activities described in subsection (j)(2) in accordance 
                with the limitations established under such 
                subsection.''; and
                    (B) in subsection (j), by adding at the end the 
                following new paragraph:
            ``(2) Limitations.--The Secretary shall establish 
        limitations with respect to at least the following:
                    ``(A) Scope of marketing appointments.--The scope 
                of any appointment with respect to the marketing of a 
                Medicare Advantage plan. Such limitation shall require 
                advance agreement with a prospective enrollee on the 
                scope of the marketing appointment and documentation of 
                such agreement by the Medicare Advantage organization. 
                In the case where the marketing appointment is in 
                person, such documentation shall be in writing.
                    ``(B) Co-branding.--The use of the name or logo of 
                a co-branded network provider on Medicare Advantage 
                plan membership and marketing materials.
                    ``(C) Limitation of gifts to nominal dollar 
                value.--The offering of gifts and other promotional 
                items other than those that are of nominal value (as 
                determined by the Secretary) to prospective enrollees 
                at promotional activities.
                    ``(D) Compensation.--The use of compensation other 
                than as provided under guidelines established by the 
                Secretary. Such guidelines shall ensure that the use of 
                compensation creates incentives for agents and brokers 
                to enroll individuals in the Medicare Advantage plan 
                that is intended to best meet their health care needs.
                    ``(E) Required training, annual retraining, and 
                testing of agents, brokers, and other third parties.--
                The use by a Medicare Advantage organization of any 
                individual as an agent, broker, or other third party 
                representing the organization that has not completed an 
                initial training and testing program and does not 
                complete an annual retraining and testing program.''.
            (2) Medicare prescription drug program.--Section 1860D-4(l) 
        of the Social Security Act, as added by subsection (a)(2), is 
        amended by adding at the end the following new paragraph:
            ``(2) The requirement under section 1851(h)(4)(D) to 
        conduct activities described in section 1851(j)(2) in 
        accordance with the limitations established under such 
        subsection.''.
            (3) Effective date.--The amendments made by this subsection 
        shall take effect on a date specified by the Secretary (but in 
        no case later than November 15, 2008).
    (c) Required Inclusion of Plan Type in Plan Name.--
            (1) Medicare advantage program.--Section 1851(h) of the 
        Social Security Act (42 U.S.C. 1395w-21(h)) is amended by 
        adding at the end following new paragraph:
            ``(6) Required inclusion of plan type in plan name.--For 
        plan years beginning on or after January 1, 2010, a Medicare 
        Advantage organization must ensure that the name of each 
        Medicare Advantage plan offered by the Medicare Advantage 
        organization includes the plan type of the plan (using standard 
        terminology developed by the Secretary).''.
            (2) Prescription drug plans.--Section 1860D-4(l) of the 
        Social Security Act, as added by subsection (a)(2) and amended 
        by subsection (b)(2), is amended by adding at the end the 
        following new paragraph:
            ``(3) The inclusion of the plan type in the plan name under 
        section 1851(h)(6).''.
    (d) Strengthening the Ability of States To Act in Collaboration 
With the Secretary To Address Fraudulent or Inappropriate Marketing 
Practices.--
            (1) Medicare advantage program.--Section 1851(h) of the 
        Social Security Act (42 U.S.C. 1395w-21(h), as amended by 
        subsection (c)(1), is amended by adding at the end the 
        following new paragraph:
            ``(7) Strengthening the ability of states to act in 
        collaboration with the secretary to address fraudulent or 
        inappropriate marketing practices.--
                    ``(A) Appointment of agents and brokers.--Each 
                Medicare Advantage organization shall--
                            ``(i) only use agents and brokers who have 
                        been licensed under State law to sell Medicare 
                        Advantage plans offered by the Medicare 
                        Advantage organization;
                            ``(ii) in the case where a State has a 
                        State appointment law, abide by such law; and
                            ``(iii) report to the applicable State the 
                        termination of any such agent or broker, 
                        including the reasons for such termination (as 
                        required under applicable State law).
                    ``(B) Compliance with state information requests.--
                Each Medicare Advantage organization shall comply in a 
                timely manner with any request by a State for 
                information regarding the performance of a licensed 
                agent, broker, or other third party representing the 
                Medicare Advantage organization as part of an 
                investigation by the State into the conduct of the 
                agent, broker, or other third party.''.
            (2) Prescription drug plans.--Section 1860D-4(l) of the 
        Social Security Act, as amended by subsection (c)(2), is 
        amended by adding at the end the following new paragraph:
            ``(4) The requirements regarding the appointment of agents 
        and brokers and compliance with State information requests 
        under subparagraphs (A) and (B), respectively, of section 
        1851(h)(7).''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to plan years beginning on or after January 1, 
        2009.

SEC. 104. IMPROVEMENTS TO THE MEDIGAP PROGRAM.

    (a) Implementation of NAIC Recommendations.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall 
        provide for implementation of the changes in the NAIC model law 
        and regulations approved by the National Association of 
        Insurance Commissioners in its Model #651 (``Model Regulation 
        to Implement the NAIC Medicare Supplement Insurance Minimum 
        Standards Model Act'') on March 11, 2007, as modified to 
        reflect the changes made under this Act and the Genetic 
        Information Nondiscrimination Act of 2008 (Public Law 110-233).
            (2) Implementation dates.--
                    (A) In general.--The modifications to Model #651 
                required under paragraph (1) shall be completed by the 
                National Association of Insurance Commissioners not 
                later than October 31, 2008. Except as provided in 
                subparagraph (B), each State shall have 1 year from the 
                date the National Association of Insurance 
                Commissioners adopts the revised NAIC model law and 
                regulations (as changed by Model #651, as so modified) 
                to conform the regulatory program established by the 
                State to such revised NAIC model law and regulations.
                    (B) Extension of effective date for state law 
                amendment.--In the case of a State which the Secretary 
                determines requires State legislation in order to 
                conform the regulatory program established by the State 
                to such revised NAIC model law and regulations, the 
                State shall not be regarded as failing to comply with 
                the requirements of this section solely on the basis of 
                its failure to meet such requirements before the first 
                day of the first calendar quarter beginning after the 
                close of the first regular session of the State 
                legislature that begins after the date of the enactment 
                of this Act. For purposes of the previous sentence, in 
                the case of a State that has a 2-year legislative 
                session, each year of the session is considered to be a 
                separate regular session of the State legislature.
                    (C) Transition dates.--No carrier may issue a new 
                or revised medicare supplemental policy or certificate 
                under section 1882 of the Social Security Act (42 
                U.S.C. 1395ss) that meets the requirements of such 
                revised NAIC model law and regulations for coverage 
                effective prior to June 1, 2010. A carrier may continue 
                to offer or issue a medicare supplemental policy under 
                such section that meets the requirements of the NAIC 
                model law and regulations and State law (as in effect 
                prior to the adoption of such revised NAIC model law 
                and regulations) prior to June 1, 2010. Nothing shall 
                preclude carriers from marketing new or revised 
                medicare supplemental policies or certificates that 
                meet the requirements of such revised NAIC model law 
                and regulations on or after the date on which the State 
                conforms the regulatory program established by the 
                State to such revised NAIC model law and regulations.
    (b) Required Offering of a Range of Policies.--Section 1882(o) of 
the Social Security Act (42 U.S.C. 1395s(o)) is amended by adding at 
the end the following new paragraph:
            ``(4) In addition to the requirement under paragraph (2), 
        the issuer of the policy must make available to the individual 
        at least Medicare supplemental policies with benefit packages 
        classified as `C' or `F'.''.

                      PART II--LOW-INCOME PROGRAMS

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

    (a) Extension.--Section 1902(a)(10)(E)(iv) of the Social Security 
Act (42 U.S.C. 1396a(a)(10)(E)(iv)) is amended by striking ``June 
2008'' and inserting ``December 2009''.
    (b) Extending Total Amount Available for Allocation.--Section 
1933(g) of such Act (42 U.S.C. 1396u-3(g)) is amended--
            (1) in paragraph (2)--
                    (A) by striking ``and'' at the end of subparagraph 
                (H);
                    (B) in subparagraph (I)--
                            (i) by striking ``June 30'' and inserting 
                        ``September 30'';
                            (ii) by striking ``$200,000,000'' and 
                        inserting ``$300,000,000''; and
                            (iii) by striking the period at the end and 
                        inserting a semicolon; and
                    (C) by adding at the end the following new 
                subparagraphs:
                    ``(J) for the period that begins on October 1, 
                2008, and ends on December 31, 2008, the total 
                allocation amount is $100,000,000;
                    ``(K) for the period that begins on January 1, 
                2009, and ends on September 30, 2009, the total 
                allocation amount is $350,000,000; and
                    ``(L) for the period that begins on October 1, 
                2009, and ends on December 31, 2009, the total 
                allocation amount is $150,000,000.''; and
            (2) in paragraph (3), in the matter preceding subparagraph 
        (A), by striking ``or (H)'' and inserting ``(H), (J), or (L)''.

SEC. 112. APPLICATION OF FULL LIS SUBSIDY ASSETS TEST UNDER MEDICARE 
              SAVINGS PROGRAM.

    Section 1905(p)(1)(C) of such Act (42 U.S.C. 1396d(p)(1)(C)) is 
amended by inserting before the period at the end the following: ``or, 
effective beginning with January 1, 2010, whose resources (as so 
determined) do not exceed the maximum resource level applied for the 
year under subparagraph (D) of section 1860D-14(a)(3) (determined 
without regard to the life insurance policy exclusion provided under 
subparagraph (G) of such section) applicable to an individual or to the 
individual and the individual's spouse (as the case may be)''.

SEC. 113. ELIMINATING BARRIERS TO ENROLLMENT.

    (a) SSA Assistance With Medicare Savings Program and Low-Income 
Subsidy Program Applications.--Section 1144 of such Act (42 U.S.C. 
1320b-14) is amended by adding at the end the following new subsection:
    ``(c) Assistance With Medicare Savings Program and Low-Income 
Subsidy Program Applications.--
            ``(1) Distribution of applications and information to 
        individuals who are potentially eligible for low-income subsidy 
        program.--For each individual who submits an application for 
        low-income subsidies under section 1860D-14, requests an 
        application for such subsidies, or is otherwise identified as 
        an individual who is potentially eligible for such subsidies, 
        the Commissioner shall do the following:
                    ``(A) Provide information describing the low-income 
                subsidy program under section 1860D-14 and the Medicare 
                Savings Program (as defined in paragraph (7)).
                    ``(B) Provide an application for enrollment under 
                such low-income subsidy program (if not already 
                received by the Commissioner).
                    ``(C) In accordance with paragraph (3), transmit 
                data from such an application for purposes of 
                initiating an application for benefits under the 
                Medicare Savings Program.
                    ``(D) Provide information on how the individual may 
                obtain assistance in completing such application and an 
                application under the Medicare Savings Program, 
                including information on how the individual may contact 
                the State health insurance assistance program (SHIP).
                    ``(E) Make the application described in 
                subparagraph (B) and the information described in 
                subparagraphs (A) and (D) available at local offices of 
                the Social Security Administration.
            ``(2) Training personnel in explaining benefit programs and 
        assisting in completing lis application.--The Commissioner 
        shall provide training to those employees of the Social 
        Security Administration who are involved in receiving 
        applications for benefits described in paragraph (1)(B) in 
        order that they may promote beneficiary understanding of the 
        low-income subsidy program and the Medicare Savings Program in 
        order to increase participation in these programs. Such 
        employees shall provide assistance in completing an application 
        described in paragraph (1)(B) upon request.
            ``(3) Transmittal of data to states.--Beginning on January 
        1, 2010, with the consent of an individual completing an 
        application for benefits described in paragraph (1)(B), the 
        Commissioner shall electronically transmit to the appropriate 
        State Medicaid agency data from such application, as determined 
        by the Commissioner, which transmittal shall initiate an 
        application of the individual for benefits under the Medicare 
        Savings Program. In order to ensure that such data transmittal 
        provides effective assistance for purposes of State 
        adjudication of applications for benefits under the Medicare 
        Savings Program, the Commissioner shall consult with the 
        Secretary, after the Secretary has consulted with the States, 
        regarding the content, form, frequency, and manner in which 
        data (on a uniform basis for all States) shall be transmitted 
        under this subparagraph.
            ``(4) Coordination with outreach.--The Commissioner shall 
        coordinate outreach activities under this subsection with 
        outreach activities conducted by States in connection with the 
        low-income subsidy program and the Medicare Savings Program.
            ``(5) Reimbursement of social security administration 
        administrative costs.--
                    ``(A) Initial medicare savings program costs; 
                additional low-income subsidy costs.--
                            ``(i) Initial medicare savings program 
                        costs.--There are hereby appropriated to the 
                        Commissioner to carry out this subsection, out 
                        of any funds in the Treasury not otherwise 
                        appropriated, $21,100,000. The amount 
                        appropriated under ths clause shall be 
                        available on October 1, 2008, and shall remain 
                        available until expended.
                            ``(ii) Additional amount for low-income 
                        subsidy activities.--There are hereby 
                        appropriated to the Commissioner, out of any 
                        funds in the Treasury not otherwise 
                        appropriated, $24,800,000 for fiscal year 2009 
                        to carry out low-income subsidy activities 
                        under this Act, to remain available until 
                        expended. Such funds shall be in addition to 
                        the Social Security Administration's Limitation 
                        on Administrative Expenditure appropriations 
                        for such fiscal year.
                    ``(B) Subsequent funding under agreements.--
                            ``(i) In general.--Effective for fiscal 
                        years beginning on or after October 1, 2010, 
                        the Commissioner and the Secretary shall enter 
                        into an agreement which shall provide funding 
                        to cover the administrative costs of the 
                        Commissioner's activities under this 
                        subsection. Such agreement shall--
                                    ``(I) provide funds to the 
                                Commissioner for the full cost of the 
                                Social Security Administration's work 
                                related to the Medicare Savings Program 
                                required under this section;
                                    ``(II) provide such funding 
                                quarterly in advance of the applicable 
                                quarter based on estimating methodology 
                                agreed to by the Commissioner and the 
                                Secretary; and
                                    ``(III) require an annual 
                                accounting and reconciliation of the 
                                actual costs incurred and funds 
                                provided under this subsection.
                            ``(ii) Appropriation.--There are hereby 
                        appropriated to the Secretary solely for the 
                        purpose of providing payments to the 
                        Commissioner pursuant to an agreement specified 
                        in clause (i) that is in effect, out of any 
                        funds in the Treasury not otherwise 
                        appropriated, not more than $3,000,000 for 
                        fiscal year 2011 and each fiscal year 
                        thereafter.
                    ``(C) Limitation.--In no case shall funds from the 
                Social Security Administration's Limitation on 
                Administrative Expenses be used to carry out activities 
                under this subsection. For fiscal years beginning on or 
                after October 1, 2010, no such activities shall be 
                undertaken by the Social Security Administration unless 
                the agreement specified in subparagraph (B) is in 
                effect and full funding has been provided to the 
                Commissioner as specified in such subparagraph.
            ``(6) GAO analysis and report.--
                    ``(A) Analysis.--The Comptroller General of the 
                United States shall prepare an analysis of the impact 
                of this subsection--
                            ``(i) in increasing participation in the 
                        Medicare Savings Program, and
                            ``(ii) on States and the Social Security 
                        Administration.
                    ``(B) Report.--Not later than January 1, 2012, the 
                Comptroller General shall submit to Congress, the 
                Commissioner, and the Secretary a report on the 
                analysis conducted under subparagraph (A).
            ``(7) Medicare savings program defined.--For purposes of 
        this subsection, the term `Medicare Savings Program' means the 
        program of medical assistance for payment of the cost of 
        medicare cost-sharing under the Medicaid program pursuant to 
        sections 1902(a)(10)(E) and 1933.''.
    (b) Medicaid Agency Consideration of Data Transmittal.--Section 
1935(a) of such Act (42 U.S.C. 1396u-5(a)) is amended by adding at the 
end the following new paragraph:
            ``(4) Consideration of data transmitted by the social 
        security administration for purposes of medicare savings 
        program.--The State shall accept data transmitted under section 
        1144(c)(3) and act on such data in the same manner and in 
        accordance with the same deadlines as if the data constituted 
        an initiation of an application for benefits under the Medicare 
        Savings Program (as defined for purposes of such section) that 
        had been submitted directly by the applicant. The date of the 
        individual's application for the low income subsidy program 
        from which the data have been derived shall constitute the date 
        of filing of such application for benefits under the Medicare 
        Savings Program.''.
    (c) Effective Date.--Except as otherwise provided, the amendments 
made by this section shall take effect on January 1, 2010.

SEC. 114. ELIMINATION OF MEDICARE PART D LATE ENROLLMENT PENALTIES PAID 
              BY SUBSIDY ELIGIBLE INDIVIDUALS.

    (a) Waiver of Late Enrollment Penalty.--
            (1) In general.--Section 1860D-13(b) of the Social Security 
        Act (42 U.S.C. 1395w-113(b)) is amended by adding at the end 
        the following new paragraph:
            ``(8) Waiver of penalty for subsidy-eligible individuals.--
        In no case shall a part D eligible individual who is determined 
        to be a subsidy eligible individual (as defined in section 
        1860D-14(a)(3)) be subject to an increase in the monthly 
        beneficiary premium established under subsection (a).''.
            (2) Conforming amendment.--Section 1860D-14(a)(1)(A) of the 
        Social Security Act (42 U.S.C. 1395w-114(a)(1)(A)) is amended 
        by striking ``equal to'' and all that follows through the 
        period and inserting ``equal to 100 percent of the amount 
        described in subsection (b)(1), but not to exceed the premium 
        amount specified in subsection (b)(2)(B).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to subsidies for months beginning with January 2009.

SEC. 115. ELIMINATING APPLICATION OF ESTATE RECOVERY.

    (a) In General.--Section 1917(b)(1)(B)(ii) of the Social Security 
Act (42 U.S.C. 1396p(b)(1)(B)(ii)) is amended by inserting ``(but not 
including medical assistance for medicare cost-sharing or for benefits 
described in section 1902(a)(10)(E))'' before the period at the end.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect as of January 1, 2010.

SEC. 116. EXEMPTIONS FROM INCOME AND RESOURCES FOR DETERMINATION OF 
              ELIGIBILITY FOR LOW-INCOME SUBSIDY.

    (a) In General.--Section 1860D-14(a)(3) of the Social Security Act 
(42 U.S.C. 1395w-114(a)(3)) is amended--
            (1) in subparagraph (C)(i), by inserting ``and except that 
        support and maintenance furnished in kind shall not be counted 
        as income'' after ``section 1902(r)(2)'';
            (2) in subparagraph (D), in the matter before clause (i), 
        by inserting ``subject to the life insurance policy exclusion 
        provided under subparagraph (G)'' before ``)'';
            (3) in subparagraph (E)(i), in the matter before subclause 
        (I), by inserting ``subject to the life insurance policy 
        exclusion provided under subparagraph (G)'' before ``)''; and
            (4) by adding at the end the following new subparagraph:
                    ``(G) Life insurance policy exclusion.--In 
                determining the resources of an individual (and the 
                eligible spouse of the individual, if any) under 
                section 1613 for purposes of subparagraphs (D) and (E) 
                no part of the value of any life insurance policy shall 
                be taken into account.''.
    (b) Effective Date.--The amendments made by this section shall take 
effect on January 1, 2010, and shall apply to determinations of 
eligibility for months beginning with January 2010.

SEC. 117. JUDICIAL REVIEW OF DECISIONS OF THE COMMISSIONER OF SOCIAL 
              SECURITY UNDER THE MEDICARE PART D LOW-INCOME SUBSIDY 
              PROGRAM.

    (a) In General.--Section 1860D-14(a)(3)(B)(iv) of the Social 
Security Act (42 U.S.C. 1395w-114(a)(3)(B)(iv)) is amended--
            (1) in subclause (I), by striking ``and'' at the end;
            (2) in subclause (II), by striking the period at the end 
        and inserting ``; and''; and
            (3) by adding at the end the following new subclause:
                                    ``(III) judicial review of the 
                                final decision of the Commissioner made 
                                after a hearing shall be available to 
                                the same extent, and with the same 
                                limitations, as provided in subsections 
                                (g) and (h) of section 205.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect as if included in the enactment of section 101 of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003.

SEC. 118. TRANSLATION OF MODEL FORM.

    (a) In General.--Section 1905(p)(5)(A) of the Social Security Act 
(42 U.S.C. 1396d(p)(5)(A)) is amended by adding at the end the 
following: ``The Secretary shall provide for the translation of such 
application form into at least the 10 languages (other than English) 
that are most often used by individuals applying for hospital insurance 
benefits under section 226 or 226A and shall make the translated forms 
available to the States and to the Commissioner of Social Security.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on January 1, 2010.

SEC. 119. MEDICARE ENROLLMENT ASSISTANCE.

    (a) Additional Funding for State Health Insurance Assistance 
Programs.--
            (1) Grants.--
                    (A) In general.--The Secretary of Health and Human 
                Services (in this section referred to as the 
                ``Secretary'') shall use amounts made available under 
                subparagraph (B) to make grants to States for State 
                health insurance assistance programs receiving 
                assistance under section 4360 of the Omnibus Budget 
                Reconciliation Act of 1990.
                    (B) Funding.--For purposes of making grants under 
                this subsection, the Secretary shall provide for the 
                transfer, from the Federal Hospital Insurance Trust 
                Fund under section 1817 of the Social Security Act (42 
                U.S.C. 1395i) and the Federal Supplementary Medical 
                Insurance Trust Fund under section 1841 of such Act (42 
                U.S.C. 1395t), in the same proportion as the Secretary 
                determines under section 1853(f) of such Act (42 U.S.C. 
                1395w-23(f)), of $7,500,000 to the Centers for Medicare 
                & Medicaid Services Program Management Account for 
                fiscal year 2009, to remain available until expended.
            (2) Amount of grants.--The amount of a grant to a State 
        under this subsection from the total amount made available 
        under paragraph (1) shall be equal to the sum of the amount 
        allocated to the State under paragraph (3)(A) and the amount 
        allocated to the State under subparagraph (3)(B).
            (3) Allocation to states.--
                    (A) Allocation based on percentage of low-income 
                beneficiaries.--The amount allocated to a State under 
                this subparagraph from \2/3\ of the total amount made 
                available under paragraph (1) shall be based on the 
                number of individuals who meet the requirement under 
                subsection (a)(3)(A)(ii) of section 1860D-14 of the 
                Social Security Act (42 U.S.C. 1395w-114) but who have 
                not enrolled to receive a subsidy under such section 
                1860D-14 relative to the total number of individuals 
                who meet the requirement under such subsection 
                (a)(3)(A)(ii) in each State, as estimated by the 
                Secretary.
                    (B) Allocation based on percentage of rural 
                beneficiaries.--The amount allocated to a State under 
                this subparagraph from \1/3\ of the total amount made 
                available under paragraph (1) shall be based on the 
                number of part D eligible individuals (as defined in 
                section 1860D-1(a)(3)(A) of such Act (42 U.S.C. 1395w-
                101(a)(3)(A))) residing in a rural area relative to the 
                total number of such individuals in each State, as 
                estimated by the Secretary.
            (4) Portion of grant based on percentage of low-income 
        beneficiaries to be used to provide outreach to individuals who 
        may be subsidy eligible individuals or eligible for the 
        medicare savings program.--Each grant awarded under this 
        subsection with respect to amounts allocated under paragraph 
        (3)(A) shall be used to provide outreach to individuals who may 
        be subsidy eligible individuals (as defined in section 1860D-
        14(a)(3)(A) of the Social Security Act (42 U.S.C. 1395w-
        114(a)(3)(A)) or eligible for the Medicare Savings Program (as 
        defined in subsection (e)).
    (b) Additional Funding for Area Agencies on Aging.--
            (1) Grants.--
                    (A) In general.--The Secretary, acting through the 
                Assistant Secretary for Aging, shall make grants to 
                States for area agencies on aging (as defined in 
                section 102 of the Older Americans Act of 1965 (42 
                U.S.C. 3002)).
                    (B) Funding.--For purposes of making grants under 
                this subsection, the Secretary shall provide for the 
                transfer, from the Federal Hospital Insurance Trust 
                Fund under section 1817 of the Social Security Act (42 
                U.S.C. 1395i) and the Federal Supplementary Medical 
                Insurance Trust Fund under section 1841 of such Act (42 
                U.S.C. 1395t), in the same proportion as the Secretary 
                determines under section 1853(f) of such Act (42 U.S.C. 
                1395w-23(f)), of $7,500,000 to the Administration on 
                Aging for fiscal year 2009, to remain available until 
                expended.
            (2) Amount of grant and allocation to states based on 
        percentage of low-income and rural beneficiaries.--The amount 
        of a grant to a State under this subsection from the total 
        amount made available under paragraph (1) shall be determined 
        in the same manner as the amount of a grant to a State under 
        subsection (a), from the total amount made available under 
        paragraph (1) of such subsection, is determined under paragraph 
        (2) and subparagraphs (A) and (B) of paragraph (3) of such 
        subsection.
            (3) Required use of funds.--
                    (A) All funds.--Subject to subparagraph (B), each 
                grant awarded under this subsection shall be used to 
                provide outreach to eligible Medicare beneficiaries 
                regarding the benefits available under title XVIII of 
                the Social Security Act.
                    (B) Outreach to individuals who may be subsidy 
                eligible individuals or eligible for the medicare 
                savings program.--Subsection (a)(4) shall apply to each 
                grant awarded under this subsection in the same manner 
                as it applies to a grant under subsection (a).
    (c) Additional Funding for Aging and Disability Resource Centers.--
            (1) Grants.--
                    (A) In general.--The Secretary shall make grants to 
                Aging and Disability Resource Centers under the Aging 
                and Disability Resource Center grant program that are 
                established centers under such program on the date of 
                the enactment of this Act.
                    (B) Funding.--For purposes of making grants under 
                this subsection, the Secretary shall provide for the 
                transfer, from the Federal Hospital Insurance Trust 
                Fund under section 1817 of the Social Security Act (42 
                U.S.C. 1395i) and the Federal Supplementary Medical 
                Insurance Trust Fund under section 1841 of such Act (42 
                U.S.C. 1395t), in the same proportion as the Secretary 
                determines under section 1853(f) of such Act (42 U.S.C. 
                1395w-23(f)), of $5,000,000 to the Administration on 
                Aging for fiscal year 2009, to remain available until 
                expended.
            (2) Required use of funds.--Each grant awarded under this 
        subsection shall be used to provide outreach to individuals 
        regarding the benefits available under the Medicare 
        prescription drug benefit under part D of title XVIII of the 
        Social Security Act and under the Medicare Savings Program.
    (d) Coordination of Efforts To Inform Older Americans About 
Benefits Available Under Federal and State Programs.--
            (1) In general.--The Secretary, acting through the 
        Assistant Secretary for Aging, in cooperation with related 
        Federal agency partners, shall make a grant to, or enter into a 
        contract with, a qualified, experienced entity under which the 
        entity shall--
                    (A) maintain and update web-based decision support 
                tools, and integrated, person-centered systems, 
                designed to inform older individuals (as defined in 
                section 102 of the Older Americans Act of 1965 (42 
                U.S.C. 3002)) about the full range of benefits for 
                which the individuals may be eligible under Federal and 
                State programs;
                    (B) utilize cost-effective strategies to find older 
                individuals with the greatest economic need (as defined 
                in such section 102) and inform the individuals of the 
                programs;
                    (C) develop and maintain an information 
                clearinghouse on best practices and the most cost-
                effective methods for finding older individuals with 
                greatest economic need and informing the individuals of 
                the programs; and
                    (D) provide, in collaboration with related Federal 
                agency partners administering the Federal programs, 
                training and technical assistance on the most effective 
                outreach, screening, and follow-up strategies for the 
                Federal and State programs.
            (2) Funding.--For purposes of making a grant or entering 
        into a contract under paragraph (1), the Secretary shall 
        provide for the transfer, from the Federal Hospital Insurance 
        Trust Fund under section 1817 of the Social Security Act (42 
        U.S.C. 1395i) and the Federal Supplementary Medical Insurance 
        Trust Fund under section 1841 of such Act (42 U.S.C. 1395t), in 
        the same proportion as the Secretary determines under section 
        1853(f) of such Act (42 U.S.C. 1395w-23(f)), of $5,000,000 to 
        the Administration on Aging for fiscal year 2009, to remain 
        available until expended.
    (e) Medicare Savings Program Defined.--For purposes of this 
section, the term ``Medicare Savings Program'' means the program of 
medical assistance for payment of the cost of medicare cost-sharing 
under the Medicaid program pursuant to sections 1902(a)(10)(E) and 1933 
of the Social Security Act (42 U.S.C. 1396a(a)(10)(E), 1396u-3).

               Subtitle B--Provisions Relating to Part A

SEC. 121. EXPANSION AND EXTENSION OF THE MEDICARE RURAL HOSPITAL 
              FLEXIBILITY PROGRAM.

    (a) In General.--Section 1820(g) of the Social Security Act (42 
U.S.C. 1395i-4(g)) is amended by adding at the end the following new 
paragraph:
            ``(6) Providing mental health services and other health 
        services to veterans and other residents of rural areas.--
                    ``(A) Grants to states.--The Secretary may award 
                grants to States that have submitted applications in 
                accordance with subparagraph (B) for increasing the 
                delivery of mental health services or other health care 
                services deemed necessary to meet the needs of veterans 
                of Operation Iraqi Freedom and Operation Enduring 
                Freedom living in rural areas (as defined for purposes 
                of section 1886(d) and including areas that are rural 
                census tracks, as defined by the Administrator of the 
                Health Resources and Services Administration), 
                including for the provision of crisis intervention 
                services and the detection of post-traumatic stress 
                disorder, traumatic brain injury, and other signature 
                injuries of veterans of Operation Iraqi Freedom and 
                Operation Enduring Freedom, and for referral of such 
                veterans to medical facilities operated by the 
                Department of Veterans Affairs, and for the delivery of 
                such services to other residents of such rural areas.
                    ``(B) Application.--
                            ``(i) In general.--An application is in 
                        accordance with this subparagraph if the State 
                        submits to the Secretary at such time and in 
                        such form as the Secretary may require an 
                        application containing the assurances described 
                        in subparagraphs (A)(ii) and (A)(iii) of 
                        subsection (b)(1).
                            ``(ii) Consideration of regional 
                        approaches, networks, or technology.--The 
                        Secretary may, as appropriate in awarding 
                        grants to States under subparagraph (A), 
                        consider whether the application submitted by a 
                        State under this subparagraph includes 1 or 
                        more proposals that utilize regional 
                        approaches, networks, health information 
                        technology, telehealth, or telemedicine to 
                        deliver services described in subparagraph (A) 
                        to individuals described in that subparagraph. 
                        For purposes of this clause, a network may, as 
                        the Secretary determines appropriate, include 
                        federally qualified health centers, rural 
                        health clinics, home health agencies, community 
                        mental health clinics and other providers of 
                        mental health services, pharmacists, local 
                        government, and other providers deemed 
                        necessary to meet the needs of veterans.
                            ``(iii) Coordination at local level.--The 
                        Secretary shall require, as appropriate, a 
                        State to demonstrate consultation with the 
                        hospital association of such State, rural 
                        hospitals located in such State, providers of 
                        mental health services, or other appropriate 
                        stakeholders for the provision of services 
                        under a grant awarded under this paragraph.
                            ``(iv) Special consideration of certain 
                        applications.--In awarding grants to States 
                        under subparagraph (A), the Secretary shall 
                        give special consideration to applications 
                        submitted by States in which veterans make up a 
                        high percentage (as determined by the 
                        Secretary) of the total population of the 
                        State. Such consideration shall be given 
                        without regard to the number of veterans of 
                        Operation Iraqi Freedom and Operation Enduring 
                        Freedom living in the areas in which mental 
                        health services and other health care services 
                        would be delivered under the application.
                    ``(C) Coordination with va.--The Secretary shall, 
                as appropriate, consult with the Director of the Office 
                of Rural Health of the Department of Veterans Affairs 
                in awarding and administering grants to States under 
                subparagraph (A).
                    ``(D) Use of funds.--A State awarded a grant under 
                this paragraph may, as appropriate, use the funds to 
                reimburse providers of services described in 
                subparagraph (A) to individuals described in that 
                subparagraph.
                    ``(E) Limitation on use of grant funds for 
                administrative expenses.--A State awarded a grant under 
                this paragraph may not expend more than 15 percent of 
                the amount of the grant for administrative expenses.
                    ``(F) Independent evaluation and final report.--The 
                Secretary shall provide for an independent evaluation 
                of the grants awarded under subparagraph (A). Not later 
                than 1 year after the date on which the last grant is 
                awarded to a State under such subparagraph, the 
                Secretary shall submit a report to Congress on such 
                evaluation. Such report shall include an assessment of 
                the impact of such grants on increasing the delivery of 
                mental health services and other health services to 
                veterans of the United States Armed Forces living in 
                rural areas (as so defined and including such areas 
                that are rural census tracks), with particular emphasis 
                on the impact of such grants on the delivery of such 
                services to veterans of Operation Enduring Freedom and 
                Operation Iraqi Freedom, and to other individuals 
                living in such rural areas.''.
    (b) Use of Funds for Federal Administrative Expenses.--Section 
1820(g)(5) of the Social Security Act (42 U.S.C. 1395i-4(g)(5)) is 
amended--
            (1) by striking ``beginning with fiscal year 2005'' and 
        inserting ``for each of fiscal years 2005 through 2008''; and
            (2) by inserting ``and, of the total amount appropriated 
        for grants under paragraphs (1), (2), and (6) for a fiscal year 
        (beginning with fiscal year 2009)'' after ``2005)''.
    (c) Extension of Authorization for FLEX Grants.--Section 1820(j) of 
the Social Security Act (42 U.S.C. 1395i-4(j)) is amended--
            (1) by striking ``and for'' and inserting ``for''; and
            (2) by inserting ``, for making grants to all States under 
        paragraphs (1) and (2) of subsection (g), $55,000,000 in each 
        of fiscal years 2009 and 2010, and for making grants to all 
        States under paragraph (6) of subsection (g), $50,000,000 in 
        each of fiscal years 2009 and 2010, to remain available until 
        expended'' before the period at the end.
    (d) Medicare Rural Hospital Flexibility Program.--Section 
1820(g)(1) of the Social Security Act (42 U.S.C. 1395i-4(g)(1)) is 
amended--
            (1) in subparagraph (B), by striking ``and'' at the end;
            (2) in subparagraph (C), by striking the period at the end 
        and inserting ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(D) providing support for critical access 
                hospitals for quality improvement, quality reporting, 
                performance improvements, and benchmarking.''.
    (e) Assistance to Small Critical Access Hospitals Transitioning to 
Skilled Nursing Facilities and Assisted Living Facilities.--Section 
1820(g) of the Social Security Act (42 U.S.C. 1395i-4(g)), as amended 
by subsection (a), is amended by adding at the end the following new 
paragraph:
            ``(7) Critical access hospitals transitioning to skilled 
        nursing facilities and assisted living facilities.--
                    ``(A) Grants.--The Secretary may award grants to 
                eligible critical access hospitals that have submitted 
                applications in accordance with subparagraph (B) for 
                assisting such hospitals in the transition to skilled 
                nursing facilities and assisted living facilities.
                    ``(B) Application.--An applicable critical access 
                hospital seeking a grant under this paragraph shall 
                submit an application to the Secretary on or before 
                such date and in such form and manner as the Secretary 
                specifies.
                    ``(C) Additional requirements.--The Secretary may 
                not award a grant under this paragraph to an eligible 
                critical access hospital unless--
                            ``(i) local organizations or the State in 
                        which the hospital is located provides matching 
                        funds; and
                            ``(ii) the hospital provides assurances 
                        that it will surrender critical access hospital 
                        status under this title within 180 days of 
                        receiving the grant.
                    ``(D) Amount of grant.--A grant to an eligible 
                critical access hospital under this paragraph may not 
                exceed $1,000,000.
                    ``(E) Funding.--There are appropriated from the 
                Federal Hospital Insurance Trust Fund under section 
                1817 for making grants under this paragraph, $5,000,000 
                for fiscal year 2008.
                    ``(F) Eligible critical access hospital defined.--
                For purposes of this paragraph, the term `eligible 
                critical access hospital' means a critical access 
                hospital that has an average daily acute census of less 
                than 0.5 and an average daily swing bed census of 
                greater than 10.0.''.

SEC. 122. REBASING FOR SOLE COMMUNITY HOSPITALS.

    (a) Rebasing Permitted.--Section 1886(b)(3) of the Social Security 
Act (42 U.S.C. 1395ww(b)(3)) is amended by adding at the end the 
following new subparagraph:
    ``(L)(i) For cost reporting periods beginning on or after January 
1, 2009, in the case of a sole community hospital there shall be 
substituted for the amount otherwise determined under subsection 
(d)(5)(D)(i) of this section, if such substitution results in a greater 
amount of payment under this section for the hospital, the subparagraph 
(L) rebased target amount.
    ``(ii) For purposes of this subparagraph, the term `subparagraph 
(L) rebased target amount' has the meaning given the term `target 
amount' in subparagraph (C), except that--
            ``(I) there shall be substituted for the base cost 
        reporting period the 12-month cost reporting period beginning 
        during fiscal year 2006;
            ``(II) any reference in subparagraph (C)(i) to the `first 
        cost reporting period' described in such subparagraph is deemed 
        a reference to the first cost reporting period beginning on or 
        after January 1, 2009; and
            ``(III) the applicable percentage increase shall only be 
        applied under subparagraph (C)(iv) for discharges occurring on 
        or after January 1, 2009.''.
    (b) Conforming Amendments.--Section 1886(b)(3) of the Social 
Security Act (42 U.S.C. 1395ww(b)(3)) is amended--
            (1) in subparagraph (C), in the matter preceding clause 
        (i), by striking ``subparagraph (I)'' and inserting 
        ``subparagraphs (I) and (L)''; and
            (2) in subparagraph (I)(i), in the matter preceding 
        subclause (I), by striking ``For'' and inserting ``Subject to 
        subparagraph (L), for''.

SEC. 123. DEMONSTRATION PROJECT ON COMMUNITY HEALTH INTEGRATION MODELS 
              IN CERTAIN RURAL COUNTIES.

    (a) In General.--The Secretary shall establish a demonstration 
project to allow eligible entities to develop and test new models for 
the delivery of health care services in eligible counties for the 
purpose of improving access to, and better integrating the delivery of, 
acute care, extended care, and other essential health care services to 
Medicare beneficiaries.
    (b) Purpose.--The purpose of the demonstration project under this 
section is to--
            (1) explore ways to increase access to, and improve the 
        adequacy of, payments for acute care, extended care, and other 
        essential health care services provided under the Medicare and 
        Medicaid programs in eligible counties; and
            (2) evaluate regulatory challenges facing such providers 
        and the communities they serve.
    (c) Requirements.--The following requirements shall apply under the 
demonstration project:
            (1) Health care providers in eligible counties selected to 
        participate in the demonstration project under subsection 
        (d)(3) shall (when determined appropriate by the Secretary), 
        instead of the payment rates otherwise applicable under the 
        Medicare program, be reimbursed at a rate that covers at least 
        the reasonable costs of the provider in furnishing acute care, 
        extended care, and other essential health care services to 
        Medicare beneficiaries.
            (2) Methods to coordinate the survey and certification 
        process under the Medicare program and the Medicaid program 
        across all health service categories included in the 
        demonstration project shall be tested with the goal of assuring 
        quality and safety while reducing administrative burdens, as 
        appropriate, related to completing such survey and 
        certification process.
            (3) Health care providers in eligible counties selected to 
        participate in the demonstration project under subsection 
        (d)(3) and the Secretary shall work with the State to explore 
        ways to revise reimbursement policies under the Medicaid 
        program to improve access to the range of health care services 
        available in such eligible counties.
            (4) The Secretary shall identify regulatory requirements 
        that may be revised appropriately to improve access to care in 
        eligible counties.
            (5) Other essential health care services necessary to 
        ensure access to the range of health care services in eligible 
        counties selected to participate in the demonstration project 
        under subsection (d)(3) shall be identified. Ways to ensure 
        adequate funding for such services shall also be explored.
    (d) Application Process.--
            (1) Eligibility.--
                    (A) In general.--Eligibility to participate in the 
                demonstration project under this section shall be 
                limited to eligible entities.
                    (B) Eligible entity defined.--In this section, the 
                term ``eligible entity'' means an entity that--
                            (i) is a Rural Hospital Flexibility Program 
                        grantee under section 1820(g) of the Social 
                        Security Act (42 U.S.C. 1395i-4(g)); and
                            (ii) is located in a State in which at 
                        least 65 percent of the counties in the State 
                        are counties that have 6 or less residents per 
                        square mile.
            (2) Application.--
                    (A) In general.--An eligible entity seeking to 
                participate in the demonstration project under this 
                section shall submit an application to the Secretary at 
                such time, in such manner, and containing such 
                information as the Secretary may require.
                    (B) Limitation.--The Secretary shall select 
                eligible entities located in not more than 4 States to 
                participate in the demonstration project under this 
                section.
            (3) Selection of eligible counties.--An eligible entity 
        selected by the Secretary to participate in the demonstration 
        project under this section shall select not more than 6 
        eligible counties in the State in which the entity is located 
        in which to conduct the demonstration project.
            (4) Eligible county defined.--In this section, the term 
        ``eligible county'' means a county that meets the following 
        requirements:
                    (A) The county has 6 or less residents per square 
                mile.
                    (B) As of the date of the enactment of this Act, a 
                facility designated as a critical access hospital which 
                meets the following requirements was located in the 
                county:
                            (i) As of the date of the enactment of this 
                        Act, the critical access hospital furnished 1 
                        or more of the following:
                                    (I) Home health services.
                                    (II) Hospice care.
                                    (III) Rural health clinic services.
                            (ii) As of the date of the enactment of 
                        this Act, the critical access hospital has an 
                        average daily inpatient census of 5 or less.
                    (C) As of the date of the enactment of this Act, 
                skilled nursing facility services were available in the 
                county in--
                            (i) a critical access hospital using swing 
                        beds; or
                            (ii) a local nursing home.
    (e) Administration.--
            (1) In general.--The demonstration project under this 
        section shall be administered jointly by the Administrator of 
        the Office of Rural Health Policy of the Health Resources and 
        Services Administration and the Administrator of the Centers 
        for Medicare & Medicaid Services, in accordance with paragraphs 
        (2) and (3).
            (2) HRSA duties.--In administering the demonstration 
        project under this section, the Administrator of the Office of 
        Rural Health Policy of the Health Resources and Services 
        Administration shall--
                    (A) award grants to the eligible entities selected 
                to participate in the demonstration project; and
                    (B) work with such entities to provide technical 
                assistance related to the requirements under the 
                project.
            (3) CMS duties.--In administering the demonstration project 
        under this section, the Administrator of the Centers for 
        Medicare & Medicaid Services shall determine which provisions 
        of titles XVIII and XIX of the Social Security Act (42 U.S.C. 
        1395 et seq.; 1396 et seq.) the Secretary should waive under 
        the waiver authority under subsection (i) that are relevant to 
        the development of alternative reimbursement methodologies, 
        which may include, as appropriate, covering at least the 
        reasonable costs of the provider in furnishing acute care, 
        extended care, and other essential health care services to 
        Medicare beneficiaries and coordinating the survey and 
        certification process under the Medicare and Medicaid programs, 
        as appropriate, across all service categories included in the 
        demonstration project.
    (f) Duration.--
            (1) In general.--The demonstration project under this 
        section shall be conducted for a 3-year period beginning on 
        October 1, 2009.
            (2) Beginning date of demonstration project.--The 
        demonstration project under this section shall be considered to 
        have begun in a State on the date on which the eligible 
        counties selected to participate in the demonstration project 
        under subsection (d)(3) begin operations in accordance with the 
        requirements under the demonstration project.
    (g) Funding.--
            (1) CMS.--
                    (A) In general.--The Secretary shall provide for 
                the transfer, in appropriate part from the Federal 
                Hospital Insurance Trust Fund established under section 
                1817 of the Social Security Act (42 U.S.C. 1395i) and 
                the Federal Supplementary Medical Insurance Trust Fund 
                established under section 1841 of such Act (42 U.S.C. 
                1395t), of such sums as are necessary for the costs to 
                the Centers for Medicare & Medicaid Services of 
                carrying out its duties under the demonstration project 
                under this section.
                    (B) Budget neutrality.--In conducting the 
                demonstration project under this section, the Secretary 
                shall ensure that the aggregate payments made by the 
                Secretary do not exceed the amount which the Secretary 
                estimates would have been paid if the demonstration 
                project under this section was not implemented.
            (2) HRSA.--There are authorized to be appropriated to the 
        Office of Rural Health Policy of the Health Resources and 
        Services Administration $800,000 for each of fiscal years 2010, 
        2011, and 2012 for the purpose of carrying out the duties of 
        such Office under the demonstration project under this section, 
        to remain available for the duration of the demonstration 
        project.
    (h) Report.--
            (1) Interim report.--Not later than the date that is 2 
        years after the date on which the demonstration project under 
        this section is implemented, the Administrator of the Office of 
        Rural Health Policy of the Health Resources and Services 
        Administration, in coordination with the Administrator of the 
        Centers for Medicare & Medicaid Services, shall submit a report 
        to Congress on the status of the demonstration project that 
        includes initial recommendations on ways to improve access to, 
        and the availability of, health care services in eligible 
        counties based on the findings of the demonstration project.
            (2) Final report.--Not later than 1 year after the 
        completion of the demonstration project, the Administrator of 
        the Office of Rural Health Policy of the Health Resources and 
        Services Administration, in coordination with the Administrator 
        of the Centers for Medicare & Medicaid Services, shall submit a 
        report to Congress on such project, together with 
        recommendations for such legislation and administrative action 
        as the Secretary determines appropriate.
    (i) Waiver Authority.--The Secretary may waive such requirements of 
titles XVIII and XIX of the Social Security Act (42 U.S.C. 1395 et 
seq.; 1396 et seq.) as may be necessary and appropriate for the purpose 
of carrying out the demonstration project under this section.
    (j) Definitions.--In this section:
            (1) Extended care services.--The term ``extended care 
        services'' means the following:
                    (A) Home health services.
                    (B) Covered skilled nursing facility services.
                    (C) Hospice care.
            (2) Covered skilled nursing facility services.--The term 
        ``covered skilled nursing facility services'' has the meaning 
        given such term in section 1888(e)(2)(A) of the Social Security 
        Act (42 U.S.C. 1395yy(e)(2)(A)).
            (3) Critical access hospital.--The term ``critical access 
        hospital'' means a facility designated as a critical access 
        hospital under section 1820(c) of such Act (42 U.S.C. 1395i-
        4(c)).
            (4) Home health services.--The term ``home health 
        services'' has the meaning given such term in section 1861(m) 
        of such Act (42 U.S.C. 1395x(m)).
            (5) Hospice care.--The term ``hospice care'' has the 
        meaning given such term in section 1861(dd) of such Act (42 
        U.S.C. 1395x(dd)).
            (6) Medicaid program.--The term ``Medicaid program'' means 
        the program under title XIX of such Act (42 U.S.C. 1396 et 
        seq.).
            (7) Medicare program.--The term ``Medicare program'' means 
        the program under title XVIII of such Act (42 U.S.C. 1395 et 
        seq.).
            (8) Other essential health care services.--The term ``other 
        essential health care services'' means the following:
                    (A) Ambulance services (as described in section 
                1861(s)(7) of the Social Security Act (42 U.S.C. 
                1395x(s)(7))).
                    (B) Rural health clinic services.
                    (C) Public health services (as defined by the 
                Secretary).
                    (D) Other health care services determined 
                appropriate by the Secretary.
            (9) Rural health clinic services.--The term ``rural health 
        clinic services'' has the meaning given such term in section 
        1861(aa)(1) of such Act (42 U.S.C. 1395x(aa)(1)).
            (10) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.

SEC. 124. EXTENSION OF THE RECLASSIFICATION OF CERTAIN HOSPITALS.

    (a) In General.--Subsection (a) of section 106 of division B of the 
Tax Relief and Health Care Act of 2006 (42 U.S.C. 1395 note), as 
amended by section 117 of the Medicare, Medicaid, and SCHIP Extension 
Act of 2007 (Public Law 110-173), is amended by striking ``September 
30, 2008'' and inserting ``September 30, 2009''.
    (b) Special Exception Reclassifications.--Section 117(a)(2) of the 
Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-
173) is amended by striking ``September 30, 2008'' and inserting 
``September 30, 2009''.

SEC. 125. REVOCATION OF UNIQUE DEEMING AUTHORITY OF THE JOINT 
              COMMISSION.

    (a) Revocation.--Section 1865 of the Social Security Act (42 U.S.C. 
1395bb) is amended--
            (1) by striking subsection (a); and
            (2) by redesignating subsections (b), (c), (d), and (e) as 
        subsections (a), (b), (c), and (d), respectively.
    (b) Conforming Amendments.--(1) Section 1865 of the Social Security 
Act (42 U.S.C. 1395bb) is amended--
            (A) in subsection (a)(1), as redesignated by subsection 
        (a)(2), by striking ``In addition, if'' and inserting ``If'';
            (B) in subsection (b), as so redesignated--
                    (i) by striking ``released to him by the Joint 
                Commission on Accreditation of Hospitals,'' and 
                inserting ``released to the Secretary by''; and
                    (ii) by striking the comma after ``Association'';
            (C) in subsection (c), as so redesignated, by striking 
        ``pursuant to subsection (a) or (b)(1)'' and inserting 
        ``pursuant to subsection (a)(1)''; and
            (D) in subsection (d), as so redesignated, by striking 
        ``pursuant to subsection (a) or (b)(1)'' and inserting 
        ``pursuant to subsection (a)(1)''.
    (2) Section 1861(e) of the Social Security Act (42 U.S.C. 1395x(e)) 
is amended in the fourth sentence by striking ``and (ii) is accredited 
by the Joint Commission on Accreditation of Hospitals, or is accredited 
by or approved by a program of the country in which such institution is 
located if the Secretary finds the accreditation or comparable approval 
standards of such program to be essentially equivalent to those of the 
Joint Commission on Accreditation of Hospitals'' and inserting ``and 
(ii) is accredited by a national accreditation body recognized by the 
Secretary under section 1865(a), or is accredited by or approved by a 
program of the country in which such institution is located if the 
Secretary finds the accreditation or comparable approval standards of 
such program to be essentially equivalent to those of such a national 
accreditation body.''.
    (3) Section 1864(c) of the Social Security Act (42 U.S.C. 
1395aa(c)) is amended by striking ``pursuant to subsection (a) or 
(b)(1) of section 1865'' and inserting ``pursuant to section 
1865(a)(1)''.
    (4) Section 1875(b) of the Social Security Act (42 U.S.C. 
1395ll(b)) is amended by striking ``the Joint Commission on 
Accreditation of Hospitals,'' and inserting ``national accreditation 
bodies under section 1865(a)''.
    (5) Section 1834(a)(20)(B) of the Social Security Act (42 U.S.C. 
1395m(a)(20)(B)) is amended by striking ``section 1865(b)'' and 
inserting ``section 1865(a)''.
    (6) Section 1852(e)(4)(C) of the Social Security Act (42 U.S.C. 
1395w-22(e)(4)(C)) is amended by striking ``section 1865(b)(2)'' and 
inserting ``section 1865(a)(2)''.
    (c) Authority To Recognize the Joint Commission as a National 
Accreditation Body.--The Secretary of Health and Human Services may 
recognize the Joint Commission as a national accreditation body under 
section 1865 of the Social Security Act (42 U.S.C. 1395bb), as amended 
by this section, upon such terms and conditions, and upon submission of 
such information, as the Secretary may require.
    (d) Effective Date; Transition Rule.--(1) Subject to paragraph (2), 
the amendments made by this section shall apply with respect to 
accreditations of hospitals granted on or after the date that is 24 
months after the date of the enactment of this Act.
    (2) For purposes of title XVIII of the Social Security Act (42 
U.S.C. 1395 et seq.), the amendments made by this section shall not 
effect the accreditation of a hospital by the Joint Commission, or 
under accreditation or comparable approval standards found to be 
essentially equivalent to accreditation or approval standards of the 
Joint Commission, for the period of time applicable under such 
accreditation.

               Subtitle C--Provisions Relating to Part B

                      PART I--PHYSICIANS' SERVICES

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

    (a) In General.--
            (1) Increase in update for the second half of 2008 and for 
        2009.--
                    (A) For the second half of 2008.--Section 
                1848(d)(8) of the Social Security Act (42 U.S.C. 1395w-
                4(d)(8)), as added by section 101 of the Medicare, 
                Medicaid, and SCHIP Extension Act of 2007 (Public Law 
                110-173), is amended--
                            (i) in the heading, by striking ``a portion 
                        of'';
                            (ii) in subparagraph (A), by striking ``for 
                        the period beginning on January 1, 2008, and 
                        ending on June 30, 2008,''; and
                            (iii) in subparagraph (B)--
                                    (I) in the heading, by striking 
                                ``the remaining portion of 2008 and''; 
                                and
                                    (II) by striking ``for the period 
                                beginning on July 1, 2008, and ending 
                                on December 31, 2008, and''.
                    (B) For 2009.--Section 1848(d) of the Social 
                Security Act (42 U.S.C. 1395w-4(d)), as amended by 
                section 101 of the Medicare, Medicaid, and SCHIP 
                Extension Act of 2007 (Public Law 110-173), is amended 
                by adding at the end the following new paragraph:
            ``(9) Update for 2009.--
                    ``(A) In general.--Subject to paragraphs (7)(B) and 
                (8)(B), in lieu of the update to the single conversion 
                factor established in paragraph (1)(C) that would 
                otherwise apply for 2009, the update to the single 
                conversion factor shall be 1.1 percent.
                    ``(B) No effect on computation of conversion factor 
                for 2010 and subsequent years.--The conversion factor 
                under this subsection shall be computed under paragraph 
                (1)(A) for 2010 and subsequent years as if subparagraph 
                (A) had never applied.''.
            (2) Beneficiary premium protection.--Section 1839(g) of the 
        Social Security Act (42 U.S.C. 1395r(g)) is amended--
                    (A) by redesignating paragraphs (1) and (2) as 
                subparagraphs (A) and (B), respectively, and moving 
                such subparagraphs 2 ems to the right;
                    (B) in the matter preceding paragraph (1), by 
                striking ``shall exclude an estimate'' and inserting 
                ``shall exclude--
            ``(1) an estimate''; and
                    (C) by adding at the end the following new 
                paragraph:
            ``(2) with respect to the monthly premium rate under 
        subsection (a)(3) for 2009, [$_________] of benefits and 
        administrative costs.''.
            (3) Revision of the physician assistance and quality 
        initiative fund.--Section 1848(l)(2) of the Social Security Act 
        (42 U.S.C. 1395w-4(l)(2)), as amended by section 101(a)(2) of 
        the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public 
        Law 110-173), is amended--
                    (A) in subparagraph (A)--
                            (i) by striking clause (i)(III); and
                            (ii) by striking clause (ii)(III); and
                    (B) in subparagraph (B)--
                            (i) in clause (i), by adding ``and'' at the 
                        end;
                            (ii) in clause (ii), by striking ``; and'' 
                        and inserting a period; and
                            (iii) by striking clause (iii).
    (b) Extension and Improvement of the Quality Reporting System.--
            (1) System.--Section 1848(k)(2) of the Social Security Act 
        (42 U.S.C. 1395w-4(k)(2)), as amended by section 101(b)(1) of 
        the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public 
        Law 110-173), is amended by adding at the end the following new 
        subparagraphs:
                    ``(C) For 2010 and subsequent years.--
                            ``(i) In general.--Subject to clause (ii), 
                        for purposes of reporting data on quality 
                        measures for covered professional services 
                        furnished during 2010 and each subsequent year, 
                        subject to subsection (m)(3)(C), the quality 
                        measures (including electronic prescribing 
                        quality measures) specified under this 
                        paragraph shall be such measures selected by 
                        the Secretary from measures that have been 
                        endorsed by the entity with a contract with the 
                        Secretary under section 1890(a).
                            ``(ii) Exception.--In the case of a 
                        specified area or medical topic determined 
                        appropriate by the Secretary for which a 
                        feasible and practical measure has not been 
                        endorsed by the entity with a contract under 
                        section 1890(a), the Secretary may specify a 
                        measure that is not so endorsed as long as due 
                        consideration is given to measures that have 
                        been endorsed or adopted by a consensus 
                        organization identified by the Secretary, such 
                        as the AQA alliance.
                    ``(D) Opportunity to provide input on measures for 
                2009 and subsequent years.--For each quality measure 
                (including an electronic prescribing quality measure) 
                adopted by the Secretary under subparagraph (B) (with 
                respect to 2009) or subparagraph (C), the Secretary 
                shall ensure that eligible professionals have the 
                opportunity to provide input during the development, 
                endorsement, or selection of measures applicable to 
                services they furnish.''.
            (2) Redesignation of reporting system.--Subsection (c) of 
        section 101 of division B of the Tax Relief and Health Care Act 
        of 2006 (42 U.S.C. 1395w-4 note), as amended by section 
        101(b)(2) of the Medicare, Medicaid, and SCHIP Extension Act of 
        2007 (Public Law 110-173), is redesignated as subsection (m) of 
        section 1848 of the Social Security Act.
            (3) Incentive payments under reporting system.--Section 
        1848(m) of the Social Security Act, as redesignated by 
        paragraph (2), is amended--
                    (A) by amending the heading to read as follows: 
                ``Incentive Payments for Quality Reporting'';
                    (B) by striking paragraph (1) and inserting the 
                following:
            ``(1) Incentive payments.--
                    ``(A) In general.--For 2007 through 2010, with 
                respect to covered professional services furnished 
                during a reporting period by an eligible professional, 
                if--
                            ``(i) there are any quality measures that 
                        have been established under the physician 
                        reporting system that are applicable to any 
                        such services furnished by such professional 
                        for such reporting period; and
                            ``(ii) the eligible professional 
                        satisfactorily submits (as determined under 
                        this subsection) to the Secretary data on such 
                        quality measures in accordance with such 
                        reporting system for such reporting period,
                in addition to the amount otherwise paid under this 
                part, there also shall be paid to the eligible 
                professional (or to an employer or facility in the 
                cases described in clause (A) of section 1842(b)(6)) 
                or, in the case of a group practice under paragraph 
                (3)(C), to the group practice, from the Federal 
                Supplementary Medical Insurance Trust Fund established 
                under section 1841 an amount equal to the applicable 
                quality percent of the Secretary's estimate (based on 
                claims submitted not later than 2 months after the end 
                of the reporting period) of the allowed charges under 
                this part for all such covered professional services 
                furnished by the eligible professional (or, in the case 
                of a group practice under paragraph (3)(C), by the 
                group practice) during the reporting period.
                    ``(B) Applicable quality percent.--For purposes of 
                subparagraph (A), the term `applicable quality percent' 
                means--
                            ``(i) for 2007 and 2008, 1.5 percent; and
                            ``(ii) for 2009 and 2010, 2.0 percent.'';
                    (C) by striking paragraph (3) and redesignating 
                paragraph (2) as paragraph (3);
                    (D) in paragraph (3), as so redesignated--
                            (i) in the matter preceding subparagraph 
                        (A), by striking ``For purposes'' and inserting 
                        the following:
                    ``(A) In general.--For purposes'';
                            (ii) by redesignating subparagraphs (A) and 
                        (B) as clauses (i) and (ii), respectively, and 
                        moving the indentation of such clauses 2 ems to 
                        the right;
                            (iii) in subparagraph (A), as added by 
                        clause (i), by adding at the end the following 
                        flush sentence:
                ``For years after 2008, quality measures for purposes 
                of this subparagraph shall not include electronic 
                prescribing quality measures.''; and
                            (iv) by adding at the end the following new 
                        subparagraphs:
                    ``(C) Satisfactory reporting measures for group 
                practices.--
                            ``(i) In general.--By January 1, 2010, the 
                        Secretary shall establish and have in place a 
                        process under which eligible professionals in a 
                        group practice (as defined by the Secretary) 
                        shall be treated as satisfactorily submitting 
                        data on quality measures under subparagraph (A) 
                        and as meeting the requirement described in 
                        subparagraph (B)(ii) for covered professional 
                        services for a reporting period (or, for 
                        purposes of subsection (a)(5), for a reporting 
                        period for a year) if, in lieu of reporting 
                        measures under subsection (k)(2)(C), the group 
                        practice reports measures determined 
                        appropriate by the Secretary, such as measures 
                        that target high-cost chronic conditions and 
                        preventive care, in a form and manner, and at a 
                        time, specified by the Secretary.
                            ``(ii) Statistical sampling model.--The 
                        process under clause (i) shall provide for the 
                        use of a statistical sampling model to submit 
                        data on measures, such as the model used under 
                        the Physician Group Practice demonstration 
                        project under section 1866A.
                            ``(iii) No double payments.--Payments to a 
                        group practice under this subsection by reason 
                        of the process under clause (i) shall be in 
                        lieu of the payments that would otherwise be 
                        made under this subsection to eligible 
                        professionals in the group practice for 
                        satisfactorily submitting data on quality 
                        measures.
                    ``(D) Authority to revise satisfactorily reporting 
                data.--For years after 2009, the Secretary, in 
                consultation with stakeholders and experts, may revise 
                the criteria under this subsection for satisfactorily 
                submitting data on quality measures under subparagraph 
                (A) and the criteria for submitting data on electronic 
                prescribing quality measures under subparagraph 
                (B)(ii).'';
                    (E) in paragraph (5)--
                            (i) in subparagraph (C), by inserting ``for 
                        2007, 2008, and 2009,'' after ``provision of 
                        law,'';
                            (ii) in subparagraph (D)--
                                    (I) in clause (i)--
                                            (aa) by inserting ``for 
                                        2007 and 2008'' after ``under 
                                        this subsection''; and
                                            (bb) by striking 
                                        ``paragraph (2)'' and inserting 
                                        ``this subsection'';
                                    (II) in clause (ii), by striking 
                                ``shall'' and inserting ``may establish 
                                procedures to''; and
                                    (III) in clause (iii)--
                                            (aa) by inserting ``(or, in 
                                        the case of a group practice 
                                        under paragraph (3)(C), the 
                                        group practice)'' after ``an 
                                        eligible professional'';
                                            (bb) by striking ``bonus 
                                        incentive payment'' and 
                                        inserting ``incentive payment 
                                        under this subsection''; and
                                            (cc) by adding at the end 
                                        the following new sentence: 
                                        ``If such payments for such 
                                        period have already been made, 
                                        the Secretary shall recoup such 
                                        payments from the eligible 
                                        professional (or the group 
                                        practice).'';
                            (iii) in subparagraph (E)--
                                    (I) by striking ``(i) in general.--
                                '';
                                    (II) by striking clause (ii);
                                    (III) by redesignating subclauses 
                                (I) through (IV) as clauses (i) through 
                                (iv), respectively, and moving the 
                                indentation of such clauses 2 ems to 
                                the left;
                                    (IV) in clause (ii), as so 
                                redesignated, by striking ``paragraph 
                                (2)'' and inserting ``this 
                                subsection''; and
                                    (V) in clause (iv), as so 
                                redesignated--
                                            (aa) by striking ``the 
                                        bonus'' and inserting ``any''; 
                                        and
                                            (bb) by inserting ``and the 
                                        payment adjustment under 
                                        subsection (a)(5)(A)'' before 
                                        the period at the end;
                            (iv) in subparagraph (F)--
                                    (I) by striking ``2009, paragraph 
                                (3) shall not apply, and'' and 
                                inserting ``subsequent years,''; and
                                    (II) by striking ``paragraph (2)'' 
                                and inserting ``this subsection''; and
                            (v) by adding at the end the following new 
                        subparagraph:
                    ``(G) Posting on website.--The Secretary shall post 
                on the Internet website of the Centers for Medicare & 
                Medicaid Services, in an easily understandable format, 
                a list of the names of the following:
                            ``(i) The eligible professionals (or, in 
                        the case of reporting under paragraph (3)(C), 
                        the group practices) who satisfactorily 
                        submitted data on quality measures under this 
                        subsection.
                            ``(ii) The eligible professionals (or, in 
                        the case of reporting under paragraph (3)(C), 
                        the group practices) who are successful 
                        electronic prescribers.''; and
                    (F) in paragraph (6), by striking subparagraph (C) 
                and inserting the following:
                    ``(C) Reporting period.--
                            ``(i) In general.--Subject to clauses (ii) 
                        and (iii), the term `reporting period' means--
                                    ``(I) for 2007, the period 
                                beginning on July 1, 2007, and ending 
                                on December 31, 2007; and
                                    ``(II) for 2008, 2009, 2010, and 
                                2011, the entire year.
                            ``(ii) Authority to revise reporting 
                        period.--For years after 2009, the Secretary 
                        may revise the reporting period under clause 
                        (i) if the Secretary determines such revision 
                        is appropriate, produces valid results on 
                        measures reported, and is consistent with the 
                        goals of maximizing scientific validity and 
                        reducing administrative burden. If the 
                        Secretary revises such period pursuant to the 
                        preceding sentence, the term `reporting period' 
                        shall mean such revised period.
                            ``(iii) Reference.--Any reference in this 
                        subsection to a reporting period with respect 
                        to the application of subsection (a)(5) shall 
                        be deemed a reference to the reporting period 
                        under subparagraph (D)(iii) of such 
                        subsection.''.
            (4) Inclusion of qualified audiologists as eligible 
        professionals.--
                    (A) In general.--Section 1848(k)(3)(B) of the 
                Social Security Act (42 U.S.C. 1395w-4(k)(3)(B)), is 
                amended by adding at the end the following new clause:
                            ``(iv) Beginning with 2009, a qualified 
                        audiologist (as defined in section 
                        1861(ll)(3)(B)).''.
                    (B) No change in billing.--Nothing in the amendment 
                made by subparagraph (A) shall be construed to change 
                the way in which billing for audiology services (as 
                defined in section 1861(ll)(2) of the Social Security 
                Act (42 U.S.C. 1395x(ll)(2))) occurs under title XVIII 
                of such Act as of July 1, 2008.
            (5) Conforming amendments.--Section 1848(m) of the Social 
        Security Act, as added and amended by paragraphs (2) and (3), 
        is amended--
                    (A) in paragraph (5)--
                            (i) in subparagraph (A)--
                                    (I) by striking ``section 1848(k) 
                                of the Social Security Act, as added by 
                                subsection (b),'' and inserting 
                                ``subsection (k)''; and
                                    (II) by striking ``such section'' 
                                and inserting ``such subsection'';
                            (ii) in subparagraph (B), by striking ``of 
                        the Social Security Act (42 U.S.C. 1395l)'';
                            (iii) in subparagraph (E), in the matter 
                        preceding clause (i), by striking ``1869 or 
                        1878 of the Social Security Act or otherwise'' 
                        and inserting ``1869, section 1878, or 
                        otherwise''; and
                            (iv) in subparagraph (F)--
                                    (I) by striking ``paragraph (2)(B) 
                                of section 1848(k) of the Social 
                                Security Act (42 U.S.C. 1395w-4(k))'' 
                                and inserting ``subsection (k)(2)(B)''; 
                                and
                                    (II) by striking ``paragraph (4) of 
                                such section'' and inserting 
                                ``subsection (k)(4)'';
                    (B) in paragraph (6)--
                            (i) in subparagraph (A), by striking 
                        ``section 1848(k)(3) of the Social Security 
                        Act, as added by subsection (b)'' and inserting 
                        ``subsection (k)(3)''; and
                            (ii) in subparagraph (B), by striking 
                        ``section 1848(k) of the Social Security Act, 
                        as added by subsection (b)'' and inserting 
                        ``subsection (k)''; and
                    (C) by striking paragraph (6)(D).
            (6) No affect on incentive payments for 2007 or 2008.--
        Nothing in the amendments made by this subsection or section 
        132 shall affect the operation of the provisions of section 
        1848(m) of the Social Security Act, as redesignated and amended 
        by such subsection and section, with respect to 2007 or 2008.
    (c) Physician Feedback Program To Improve Efficiency and Control 
Costs.--
            (1) In general.--Section 1848 of the Social Security Act 
        (42 U.S.C. 1395w-4), as amended by subsection (b), is amended 
        by adding at the end the following new subsection:
    ``(n) Physician Feedback Program.--
            ``(1) Establishment.--
                    ``(A) In general.--The Secretary shall establish a 
                Physician Feedback Program (in this subsection referred 
                to as the `Program') under which the Secretary shall 
                use claims data under this title (and may use other 
                data) to provide confidential reports to physicians 
                (and, as determined appropriate by the Secretary, to 
                groups of physicians) that measure the resources 
                involved in furnishing care to individuals under this 
                title. If determined appropriate by the Secretary, the 
                Secretary may include information on the quality of 
                care furnished to individuals under this title by the 
                physician (or group of physicians) in such reports.
                    ``(B) Resource use.--The resources described in 
                subparagraph (A) may be measured--
                            ``(i) on an episode basis;
                            ``(ii) on a per capita basis; or
                            ``(iii) on both an episode and a per capita 
                        basis.
            ``(2) Implementation.--The Secretary shall implement the 
        Program by not later than January 1, 2009.
            ``(3) Data for reports.--To the extent practicable, reports 
        under the Program shall be based on the most recent data 
        available.
            ``(4) Authority to focus application.--The Secretary may 
        focus the application of the Program as appropriate, such as 
        focusing the Program on--
                    ``(A) physician specialties that account for a 
                certain percentage of all spending for physicians' 
                services under this title;
                    ``(B) physicians who treat conditions that have a 
                high cost or a high volume, or both, under this title;
                    ``(C) physicians who use a high amount of resources 
                compared to other physicians;
                    ``(D) physicians practicing in certain geographic 
                areas; or
                    ``(E) physicians who treat a minimum number of 
                individuals under this title.
            ``(5) Authority to exclude certain information if 
        insufficient information.--The Secretary may exclude certain 
        information regarding a service from a report under the Program 
        with respect to a physician (or group of physicians) if the 
        Secretary determines that there is insufficient information 
        relating to that service to provide a valid report on that 
        service.
            ``(6) Adjustment of data.--To the extent practicable, the 
        Secretary shall make appropriate adjustments to the data used 
        in preparing reports under the Program, such as adjustments to 
        take into account variations in health status and other patient 
        characteristics.
            ``(7) Education and outreach.--The Secretary shall provide 
        for education and outreach activities to physicians on the 
        operation of, and methodologies employed under, the Program.
            ``(8) Disclosure exemption.--Reports under the Program 
        shall be exempt from disclosure under section 552 of title 5, 
        United States Code.''.
            (2) GAO study and report on the physician feedback 
        program.--
                    (A) Study.--The Comptroller General of the United 
                States shall conduct a study of the Physician Feedback 
                Program conducted under section 1848(n) of the Social 
                Security Act, as added by paragraph (1), including the 
                implementation of the Program.
                    (B) Report.--Not later than March 1, 2011, the 
                Comptroller General of the United States shall submit a 
                report to Congress containing the results of the study 
                conducted under subparagraph (A), together with 
                recommendations for such legislation and administrative 
                action as the Comptroller General determines 
                appropriate.
    (d) Plan for Transition to Value-Based Purchasing Program for 
Physicians and Other Practitioners.--
            (1) In general.--The Secretary of Health and Human Services 
        shall develop a plan to transition to a value-based purchasing 
        program for payment under the Medicare program for covered 
        professional services (as defined in section 1848(k)(3)(A) of 
        the Social Security Act (42 U.S.C. 1395w-4(k)(3)(A))).
            (2) Report.--Not later than May 1, 2010, the Secretary of 
        Health and Human Services shall submit a report to Congress 
        containing the plan developed under paragraph (1), together 
        with recommendations for such legislation and administrative 
        action as the Secretary determines appropriate.

SEC. 132. INCENTIVES FOR ELECTRONIC PRESCRIBING.

    (a) Incentive Payments.--Section 1848(m) of the Social Security 
Act, as added and amended by section 131(b), is amended--
            (1) by inserting after paragraph (1), the following new 
        paragraph:
            ``(2) Incentive payments for electronic prescribing.--
                    ``(A) In general.--For 2009 through 2013, with 
                respect to covered professional services furnished 
                during a reporting period by an eligible professional, 
                if the eligible professional is a successful electronic 
                prescriber for such reporting period, in addition to 
                the amount otherwise paid under this part, there also 
                shall be paid to the eligible professional (or to an 
                employer or facility in the cases described in clause 
                (A) of section 1842(b)(6)) or, in the case of a group 
                practice under paragraph (3)(C), to the group practice, 
                from the Federal Supplementary Medical Insurance Trust 
                Fund established under section 1841 an amount equal to 
                the applicable electronic prescribing percent of the 
                Secretary's estimate (based on claims submitted not 
                later than 2 months after the end of the reporting 
                period) of the allowed charges under this part for all 
                such covered professional services furnished by the 
                eligible professional (or, in the case of a group 
                practice under paragraph (3)(C), by the group practice) 
                during the reporting period.
                    ``(B) Limitation with respect to electronic 
                prescribing quality measures.--The provisions of this 
                paragraph and subsection (a)(5) shall not apply to an 
                eligible professional (or, in the case of a group 
                practice under paragraph (3)(C), to the group practice) 
                if, for the reporting period (or, for purposes of 
                subsection (a)(5), for the reporting period for a 
                year)--
                            ``(i) the allowed charges under this part 
                        for all covered professional services furnished 
                        by the eligible professional (or group, as 
                        applicable) for the codes to which the 
                        electronic prescribing quality measure applies 
                        (as identified by the Secretary and published 
                        on the Internet website of the Centers for 
                        Medicare & Medicaid Services as of January 1, 
                        2008, and as subsequently modified by the 
                        Secretary) are less than 10 percent of the 
                        total of the allowed charges under this part 
                        for all such covered professional services 
                        furnished by the eligible professional (or the 
                        group, as applicable); or
                            ``(ii) if determined appropriate by the 
                        Secretary, the eligible professional does not 
                        submit (including both electronically and 
                        nonelectronically) a sufficient number (as 
                        determined by the Secretary) of prescriptions 
                        under part D.
                If the Secretary makes the determination to apply 
                clause (ii) for a period, then clause (i) shall not 
                apply for such period.
                    ``(C) Applicable electronic prescribing percent.--
                For purposes of subparagraph (A), the term `applicable 
                electronic prescribing percent' means--
                            ``(i) for 2009 and 2010, 2.0 percent;
                            ``(ii) for 2011 and 2012, 1.0 percent; and
                            ``(iii) for 2013, 0.5 percent.'';
            (2) in paragraph (3), as redesignated by section 131(b)--
                    (A) in the heading, by inserting ``and successful 
                electronic prescriber'' after ``reporting''; and
                    (B) by inserting after subparagraph (A) the 
                following new subparagraph:
                    ``(B) Successful electronic prescriber.--
                            ``(i) In general.--For purposes of 
                        paragraph (2) and subsection (a)(5), an 
                        eligible professional shall be treated as a 
                        successful electronic prescriber for a 
                        reporting period (or, for purposes of 
                        subsection (a)(5), for the reporting period for 
                        a year) if the eligible professional meets the 
                        requirement described in clause (ii), or, if 
                        the Secretary determines appropriate, the 
                        requirement described in clause (iii). If the 
                        Secretary makes the determination under the 
                        preceding sentence to apply the requirement 
                        described in clause (iii) for a period, then 
                        the requirement described in clause (ii) shall 
                        not apply for such period.
                            ``(ii) Requirement for submitting data on 
                        electronic prescribing quality measures.--The 
                        requirement described in this clause is that, 
                        with respect to covered professional services 
                        furnished by an eligible professional during a 
                        reporting period (or, for purposes of 
                        subsection (a)(5), for the reporting period for 
                        a year), if there are any electronic 
                        prescribing quality measures that have been 
                        established under the physician reporting 
                        system and are applicable to any such services 
                        furnished by such professional for the period, 
                        such professional reported each such measure 
                        under such system in at least 50 percent of the 
                        cases in which such measure is reportable by 
                        such professional under such system.
                            ``(iii) Requirement for electronically 
                        prescribing under part d.--The requirement 
                        described in this clause is that the eligible 
                        professional electronically submitted a 
                        sufficient number (as determined by the 
                        Secretary) of prescriptions under part D during 
                        the reporting period (or, for purposes of 
                        subsection (a)(5), for the reporting period for 
                        a year).
                            ``(iv) Use of part d data.--Notwithstanding 
                        sections 1860D-15(d)(2)(B) and 1860D-15(f)(2), 
                        the Secretary may use data regarding drug 
                        claims submitted for purposes of section 1860D-
                        15 that are necessary for purposes of clause 
                        (iii), paragraph (2)(B)(ii), and paragraph 
                        (5)(G).
                            ``(v) Standards for electronic 
                        prescribing.--To the extent practicable, in 
                        determining whether eligible professionals meet 
                        the requirements under clauses (ii) and (iii) 
                        for purposes of clause (i), the Secretary shall 
                        ensure that eligible professionals utilize 
                        electronic prescribing systems in compliance 
                        with standards established for such systems 
                        pursuant to the Part D Electronic Prescribing 
                        Program under section 1860D-4(e).''; and
            (3) in paragraph (5)(E), by striking clause (iii) and 
        inserting the following new clause:
                            ``(iii) the determination of a successful 
                        electronic prescriber under paragraph (3), the 
                        limitation under paragraph (2)(B), and the 
                        exception under subsection (a)(5)(B); and''.
    (b) Incentive Payment Adjustment.--Section 1848(a) of the Social 
Security Act (42 U.S.C. 1395w-4(a)) is amended by adding at the end the 
following new paragraph:
            ``(5) Incentives for electronic prescribing.--
                    ``(A) Adjustment.--
                            ``(i) In general.--Subject to subparagraph 
                        (B) and subsection (m)(2)(B), with respect to 
                        covered professional services furnished by an 
                        eligible professional during 2012 or any 
                        subsequent year, if the eligible professional 
                        is not a successful electronic prescriber for 
                        the reporting period for the year (as 
                        determined under subsection (m)(3)(B)), the fee 
                        schedule amount for such services furnished by 
                        such professional during the year (including 
                        the fee schedule amount for purposes of 
                        determining a payment based on such amount) 
                        shall be equal to the applicable percent of the 
                        fee schedule amount that would otherwise apply 
                        to such services under this subsection 
                        (determined after application of paragraph (3) 
                        but without regard to this paragraph).
                            ``(ii) Applicable percent.--For purposes of 
                        clause (i), the term `applicable percent' 
                        means--
                                    ``(I) for 2012, 99 percent;
                                    ``(II) for 2012, 98.5 percent; and
                                    ``(III) for 2014 and each 
                                subsequent year, 98 percent.
                    ``(B) Significant hardship exception.--The 
                Secretary may, on a case-by-case basis, exempt an 
                eligible professional from the application of the 
                payment adjustment under subparagraph (A) if the 
                Secretary determines, subject to annual renewal, that 
                compliance with the requirement for being a successful 
                electronic prescriber would result in a significant 
                hardship, such as in the case of an eligible 
                professional who practices in a rural area without 
                sufficient Internet access.
                    ``(C) Application.--
                            ``(i) Physician reporting system rules.--
                        Paragraphs (5), (6), and (8) of subsection (k) 
                        shall apply for purposes of this paragraph in 
                        the same manner as they apply for purposes of 
                        such subsection.
                            ``(ii) Incentive payment validation 
                        rules.--Clauses (ii) and (iii) of subsection 
                        (m)(5)(D) shall apply for purposes of this 
                        paragraph in a similar manner as they apply for 
                        purposes of such subsection.
                    ``(D) Definitions.--For purposes of this paragraph:
                            ``(i) Eligible professional; covered 
                        professional services.--The terms `eligible 
                        professional' and `covered professional 
                        services' have the meanings given such terms in 
                        subsection (k)(3).
                            ``(ii) Physician reporting system.--The 
                        term `physician reporting system' means the 
                        system established under subsection (k).
                            ``(iii) Reporting period.--The term 
                        `reporting period' means, with respect to a 
                        year, a period specified by the Secretary.''.
    (c) GAO Report on Electronic Prescribing.--Not later than September 
1, 2012, the Comptroller General of the United States shall submit to 
Congress a report on the implementation of the incentives for 
electronic prescribing established under the provisions of, and 
amendments made by, this section. Such report shall include information 
regarding the following:
            (1) The percentage of eligible professionals (as defined in 
        section 1848(k)(3) of the Social Security Act (42 U.S.C. 1395w-
        4(k)(3))) that are using electronic prescribing systems, 
        including a determination of whether less than 50 percent of 
        eligible professionals are using electronic prescribing 
        systems.
            (2) If less than 50 percent of eligible professionals are 
        using electronic prescribing systems, recommendations for 
        increasing the use of electronic prescribing systems by 
        eligible professionals, such as changes to the incentive 
        payment adjustments established under section 1848(a)(5) of 
        such Act, as added by subsection (b).
            (3) The estimated savings to the Medicare program under 
        title XVIII of such Act resulting from the use of electronic 
        prescribing systems.
            (4) Reductions in avoidable medical errors resulting from 
        the use of electronic prescribing systems.
            (5) The extent to which the privacy and security of the 
        personal health information of Medicare beneficiaries is 
        protected when such beneficiaries' prescription drug data and 
        usage information is used for purposes other than their direct 
        clinical care, including--
                    (A) whether information identifying the beneficiary 
                is, and remains, removed from data regarding the 
                beneficiary's prescription drug utilization; and
                    (B) the extent to which current law requires 
                sufficient and appropriate oversight and audit 
                capabilities to monitor the practice of prescription 
                drug data mining.
            (6) Such other recommendations and administrative action as 
        the Comptroller General determines to be appropriate.

SEC. 133. EXPANDING ACCESS TO PRIMARY CARE SERVICES.

    (a) Incentive Payment Program for Primary Care Services Furnished 
in Physician Scarcity Areas.--
            (1) In general.--Section 1833 of the Social Security Act 
        (42 U.S.C. 1395l) is amended by adding at the end the following 
        new subsection:
    ``(v) Incentive Payments for Primary Care Services Furnished in 
Physician Scarcity Areas.--
            ``(1) In general.--In the case of primary care services 
        furnished on or after January 1, 2011, by a primary care 
        physician in a primary care scarcity county, in addition to the 
        amount of payment that would otherwise be made for such 
        services under this part, there also shall be paid (on a 
        monthly or quarterly basis) an amount equal to 5 percent of the 
        payment amount for the service under this part.
            ``(2) Definitions.--In this subsection:
                    ``(A) Primary care physician.--The term `primary 
                care physician' means a physician (as described in 
                section 1861(r)(1)) for whom primary care services 
                accounted for at least a specified percent (as 
                determined by the Secretary) of the allowed charges 
                under this part for such physician in a prior period as 
                determined appropriate by the Secretary.
                    ``(B) Primary care scarcity county.--The term 
                `primary care scarcity county' means the primary care 
                scarcity counties that the Secretary was using under 
                subsection (u) with respect to physicians' services 
                furnished on December 31, 2007.
                    ``(C) Primary care services.--The term `primary 
                care services' means procedure codes for services in 
                the category of the Healthcare Common Procedure Coding 
                System, as established by the Secretary under section 
                1848(c)(5) (as of December 31, 2008 and as subsequently 
                modified by the Secretary) consisting of evaluation and 
                management services, but limited to such procedure 
                codes in the category of office or other outpatient 
                services, and consisting of subcategories of such 
                procedure codes for services for both new and 
                established patients.
            ``(3) Judicial review.--There shall be no administrative or 
        judicial review under section 1869, 1878, or otherwise, 
        respecting the identification of primary care physicians, 
        primary care specialty areas, or primary care services under 
        this subsection.''.
            (2) Conforming amendment.--Section 1834(g)(2)(B) of the 
        Social Security Act (42 U.S.C. 1395m(g)(2)(B)) is amended by 
        adding at the end the following sentence: ``Section 1833(v) 
        shall not be taken into account in determining the amounts that 
        would otherwise be paid pursuant to the preceding sentence.''.
    (b) Revisions to the Medicare Medical Home Demonstration Project.--
            (1) Authority to expand.--Section 204(b) of division B of 
        the Tax Relief and Health Care Act of 2006 (42 U.S.C. 1395b-1 
        note) is amended--
                    (A) in paragraph (1), by striking ``The project'' 
                and inserting ``Subject to paragraph (3), the 
                project''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(3) Expansion.--The Secretary may expand the duration and 
        the scope of the project under paragraph (1), to an extent 
        determined appropriate by the Secretary, if the Secretary 
        determines that such expansion will result in any of the 
        following conditions being met:
                    ``(A) The expansion of the project is expected to 
                improve the quality of patient care without increasing 
                spending under the Medicare program (not taking into 
                account amounts available under subsection (g)).
                    ``(B) The expansion of the project is expected to 
                reduce spending under the Medicare program (not taking 
                into account amounts available under subsection (g)) 
                without reducing the quality of patient care.''.
            (2) Funding and application.--Section 204 of division B of 
        the Tax Relief and Health Care Act of 2006 (42 U.S.C. 1395b-1 
        note) is amended by adding at the end the following new 
        subsections:
    ``(g) Funding From SMI Trust Fund.--There shall be available, from 
the Federal Supplementary Medical Insurance Trust Fund (under section 
1841 of the Social Security Act (42 U.S.C. 1395t)), the amount of 
$100,000,000 to carry out the project.
    ``(h) Application.--Chapter 35 of title 44, United States Code, 
shall not apply to the conduct of the project.''.
    (c) Application of Budget-Neutrality Adjustor to Conversion 
Factor.--Section 1848(c)(2)(B) of the Social Security Act (42 U.S.C. 
1395w-4(c)(2)(B)) is amended by inserting at the end the following new 
clause:
                            ``(iv) Alternative application of budget-
                        neutrality adjustment.--Notwithstanding 
                        subsection (d)(9)(A), effective for fee 
                        schedules established beginning with 2009, with 
                        respect to the 5-year review of work relative 
                        value units used in fee schedules for 2007 and 
                        2008, in lieu of continuing to apply budget-
                        neutrality adjustments required under clause 
                        (ii) for 2007 and 2008 to work relative value 
                        units, the Secretary shall apply such budget-
                        neutrality adjustments to the conversion factor 
                        otherwise determined for years beginning with 
                        2009.''.

SEC. 134. EXTENSION OF FLOOR ON MEDICARE WORK GEOGRAPHIC ADJUSTMENT 
              UNDER THE MEDICARE PHYSICIAN FEE SCHEDULE.

    (a) In General.--Section 1848(e)(1)(E) of the Social Security Act 
(42 U.S.C. 1395w-4(e)(1)(E)), as amended by section 103 of the 
Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-
173), is amended by striking ``before July 1, 2008'' and inserting 
``before January 1, 2010''.
    (b) Treatment of Physicians' Services Furnished in Certain Areas.--
Section 1848(e)(1)(G) of the Social Security Act (42 U.S.C. 1395w-
4(e)(1)(G)) is amended by adding at the end the following new sentence: 
``For purposes of payment for services furnished in the State described 
in the preceding sentence on or after January 1, 2009, after 
calculating the work geographic index in subparagraph (A)(iii), the 
Secretary shall increase the work geographic index to 1.5 if such index 
would otherwise be less than 1.5''.
    (c) Technical Correction.--Section 602(1) of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 (Public 
Law 108-173; 117 Stat. 2301) is amended to read as follows:
            ``(1) in subparagraph (A), by striking `subparagraphs (B), 
        (C), and (E)' and inserting `subparagraphs (B), (C), (E), and 
        (G)'; and''.

SEC. 135. IMAGING PROVISIONS.

    (a) Accreditation Requirement.--
            (1) Accreditation requirement.--Section 1834 of the Social 
        Security Act (42 U.S.C. 1395m) is amended by inserting after 
        subsection (d) the following new subsection:
    ``(e) Accreditation Requirement for Advanced Diagnostic Imaging 
Services.--
            ``(1) In general.--
                    ``(A) In general.--Beginning with January 1, 2012, 
                with respect to the technical component of advanced 
                diagnostic imaging services for which payment is made 
                under the fee schedule established under section 
                1848(b) and that are furnished by a supplier, payment 
                may only be made if such supplier is accredited by an 
                accreditation organization designated by the Secretary 
                under paragraph (2)(B)(i).
                    ``(B) Advanced diagnostic imaging services 
                defined.--In this subsection, the term `advanced 
                diagnostic imaging services' includes--
                            ``(i) diagnostic magnetic resonance 
                        imaging, computed tomography, and nuclear 
                        medicine (including positron emission 
                        tomography); and
                            ``(ii) such other diagnostic imaging 
                        services, including services described in 
                        section 1848(b)(4)(B) (excluding X-ray, 
                        ultrasound, and fluoroscopy), as specified by 
                        the Secretary in consultation with physician 
                        specialty organizations and other stakeholders.
                    ``(C) Supplier defined.--In this subsection, the 
                term `supplier' has the meaning given such term in 
                section 1861(d).
            ``(2) Accreditation organizations.--
                    ``(A) Factors for designation of accreditation 
                organizations.--The Secretary shall consider the 
                following factors in designating accreditation 
                organizations under subparagraph (B)(i) and in 
                reviewing and modifying the list of accreditation 
                organizations designated pursuant to subparagraph (C):
                            ``(i) The ability of the organization to 
                        conduct timely reviews of accreditation 
                        applications.
                            ``(ii) Whether the organization has 
                        established a process for the timely 
                        integration of new advanced diagnostic imaging 
                        services into the organization's accreditation 
                        program.
                            ``(iii) Whether the organization uses 
                        random site visits, site audits, or other 
                        strategies for ensuring accredited suppliers 
                        maintain adherence to the criteria described in 
                        paragraph (3).
                            ``(iv) The ability of the organization to 
                        take into account the capacities of suppliers 
                        located in a rural area (as defined in section 
                        1886(d)(2)(D)).
                            ``(v) Whether the organization has 
                        established reasonable fees to be charged to 
                        suppliers applying for accreditation.
                            ``(vi) Such other factors as the Secretary 
                        determines appropriate.
                    ``(B) Designation.--Not later than January 1, 2010, 
                the Secretary shall designate organizations to accredit 
                suppliers furnishing the technical component of 
                advanced diagnostic imaging services. The list of 
                accreditation organizations so designated may be 
                modified pursuant to subparagraph (C).
                    ``(C) Review and modification of list of 
                accreditation organizations.--
                            ``(i) In general.--The Secretary shall 
                        review the list of accreditation organizations 
                        designated under subparagraph (B) taking into 
                        account the factors under subparagraph (A). 
                        Taking into account the results of such review, 
                        the Secretary may, by regulation, modify the 
                        list of accreditation organizations designated 
                        under subparagraph (B).
                            ``(ii) Special rule for accreditations done 
                        prior to removal from list of designated 
                        accreditation organizations.--In the case where 
                        the Secretary removes an organization from the 
                        list of accreditation organizations designated 
                        under subparagraph (B), any supplier that is 
                        accredited by the organization during the 
                        period beginning on the date on which the 
                        organization is designated as an accreditation 
                        organization under subparagraph (B) and ending 
                        on the date on which the organization is 
                        removed from such list shall be considered to 
                        have been accredited by an organization 
                        designated by the Secretary under subparagraph 
                        (B) for the remaining period such accreditation 
                        is in effect.
            ``(3) Criteria for accreditation.--The Secretary shall 
        establish procedures to ensure that the criteria used by an 
        accreditation organization designated under paragraph (2)(B) to 
        evaluate a supplier that furnishes the technical component of 
        advanced diagnostic imaging services for the purpose of 
        accreditation of such supplier is specific to each imaging 
        modality. Such criteria shall include--
                    ``(A) standards for qualifications of medical 
                personnel who are not physicians and who furnish the 
                technical component of advanced diagnostic imaging 
                services;
                    ``(B) standards for qualifications and 
                responsibilities of medical directors and supervising 
                physicians, including standards that recognize the 
                considerations described in paragraph (4);
                    ``(C) procedures to ensure that equipment used in 
                furnishing the technical component of advanced 
                diagnostic imaging services meets performance 
                specifications;
                    ``(D) standards that require the supplier have 
                procedures in place to ensure the safety of persons who 
                furnish the technical component of advanced diagnostic 
                imaging services and individuals to whom such services 
                are furnished;
                    ``(E) standards that require the establishment and 
                maintenance of a quality assurance and quality control 
                program by the supplier that is adequate and 
                appropriate to ensure the reliability, clarity, and 
                accuracy of the technical quality of diagnostic images 
                produced by such supplier; and
                    ``(F) any other standards or procedures the 
                Secretary determines appropriate.
            ``(4) Recognition in standards for the evaluation of 
        medical directors and supervising physicians.--The standards 
        described in paragraph (3)(B) shall recognize whether a medical 
        director or supervising physician--
                    ``(A) in a particular specialty receives training 
                in advanced diagnostic imaging services in a residency 
                program;
                    ``(B) has attained, through experience, the 
                necessary expertise to be a medical director or a 
                supervising physician;
                    ``(C) has completed any continuing medical 
                education courses relating to such services; or
                    ``(D) has met such other standards as the Secretary 
                determines appropriate.
            ``(5) Rule for accreditations made prior to designation.--
        In the case of a supplier that is accredited before January 1, 
        2010, by an accreditation organization designated by the 
        Secretary under paragraph (2)(B) as of January 1, 2010, such 
        supplier shall be considered to have been accredited by an 
        organization designated by the Secretary under such paragraph 
        as of January 1, 2012, for the remaining period such 
        accreditation is in effect.''.
            (2) Conforming amendments.--
                    (A) In general.--Section 1862(a) of the Social 
                Security Act (42 U.S.C. 1395y(a)) is amended--
                            (i) in paragraph (21), by striking ``or'' 
                        at the end;
                            (ii) in paragraph (22), by striking the 
                        period at the end and inserting ``; or''; and
                            (iii) by inserting after paragraph (22) the 
                        following new paragraph:
            ``(23) which are the technical component of advanced 
        diagnostic imaging services described in section 1834(e)(1)(B) 
        for which payment is made under the fee schedule established 
        under section 1848(b) and that are furnished by a supplier (as 
        defined in section 1861(d)), if such supplier is not accredited 
        by an accreditation organization designated by the Secretary 
        under section 1834(e)(2)(B).''.
                    (B) Effective date.--The amendments made by this 
                paragraph shall apply to advanced diagnostic imaging 
                services furnished on or after January 1, 2012.
    (b) Demonstration Project To Assess the Appropriate Use of Imaging 
Services.--
            (1) Conduct of demonstration project.--
                    (A) In general.--The Secretary of Health and Human 
                Services (in this section referred to as the 
                ``Secretary'') shall conduct a demonstration project 
                using the models described in paragraph (2)(E) to 
                collect data regarding physician compliance with 
                appropriateness criteria selected under paragraph 
                (2)(D) in order to determine the appropriateness of 
                advanced diagnostic imaging services furnished to 
                Medicare beneficiaries.
                    (B) Advanced diagnostic imaging services.--In this 
                subsection, the term ``advanced diagnostic imaging 
                services'' has the meaning given such term in section 
                1834(e)(1)(B) of the Social Security Act, as added by 
                subsection (a).
                    (C) Authority to focus demonstration project.--The 
                Secretary may focus the demonstration project with 
                respect to certain advanced diagnostic imaging 
                services, such as services that account for a large 
                amount of expenditures under the Medicare program, 
                services that have recently experienced a high rate of 
                growth, or services for which appropriateness criteria 
                exists.
            (2) Implementation and design of demonstration project.--
                    (A) Implementation and duration.--
                            (i) Implementation.--The Secretary shall 
                        implement the demonstration project under this 
                        subsection not later than January 1, 2010.
                            (ii) Duration.--The Secretary shall conduct 
                        the demonstration project under this subsection 
                        for a 2-year period.
                    (B) Application and selection of participating 
                physicians.--
                            (i) Application.--Each physician that 
                        desires to participate in the demonstration 
                        project under this subsection shall submit an 
                        application to the Secretary at such time, in 
                        such manner, and containing such information as 
                        the Secretary may require.
                            (ii) Selection.--The Secretary shall select 
                        physicians to participate in the demonstration 
                        project under this subsection from among 
                        physicians submitting applications under clause 
                        (i). The Secretary shall ensure that the 
                        physicians selected--
                                    (I) represent a wide range of 
                                geographic areas, demographic 
                                characteristics (such as urban, rural, 
                                and suburban), and practice settings 
                                (such as private and academic 
                                practices); and
                                    (II) have the capability to submit 
                                data to the Secretary (or an entity 
                                under a subcontract with the Secretary) 
                                in an electronic format in accordance 
                                with standards established by the 
                                Secretary.
                    (C) Administrative costs and incentives.--The 
                Secretary shall--
                            (i) reimburse physicians for reasonable 
                        administrative costs incurred in participating 
                        in the demonstration project under this 
                        subsection; and
                            (ii) provide reasonable incentives to 
                        physicians to encourage participation in the 
                        demonstration project under this subsection.
                    (D) Use of appropriateness criteria.--
                            (i) In general.--The Secretary, in 
                        consultation with medical specialty societies 
                        and other stakeholders, shall select criteria 
                        with respect to the clinical appropriateness of 
                        advanced diagnostic imaging services for use in 
                        the demonstration project under this 
                        subsection.
                            (ii) Criteria selected.--Any criteria 
                        selected under clause (i) shall--
                                    (I) be developed or endorsed by a 
                                medical specialty society; and
                                    (II) be developed in adherence to 
                                appropriateness principles developed by 
                                a consensus organization, such as the 
                                AQA alliance.
                    (E) Models for collecting data regarding physician 
                compliance with selected criteria.--Subject to 
                subparagraph (H), in carrying out the demonstration 
                project under this subsection, the Secretary shall use 
                each of the following models for collecting data 
                regarding physician compliance with appropriateness 
                criteria selected under subparagraph (D):
                            (i) A model described in subparagraph (F).
                            (ii) A model described in subparagraph (G).
                            (iii) Any other model that the Secretary 
                        determines to be useful in evaluating the use 
                        of appropriateness criteria for advanced 
                        diagnostic imaging services.
                    (F) Point of service model described.--A model 
                described in this subparagraph is a model that--
                            (i) uses an electronic or paper intake form 
                        that--
                                    (I) contains a certification by the 
                                physician furnishing the imaging 
                                service that the data on the intake 
                                form was confirmed with the Medicare 
                                beneficiary before the service was 
                                furnished;
                                    (II) contains standardized data 
                                elements for diagnosis, service 
                                ordered, service furnished, and such 
                                other information determined by the 
                                Secretary, in consultation with medical 
                                specialty societies and other 
                                stakeholders, to be germane to 
                                evaluating the effectiveness of the use 
                                of appropriateness criteria selected 
                                under subparagraph (D); and
                                    (III) is accessible to physicians 
                                participating in the demonstration 
                                project under this subsection in a 
                                format that allows for the electronic 
                                submission of such form; and
                            (ii) provides for feedback reports in 
                        accordance with paragraph (3)(B).
                    (G) Point of order model described.--A model 
                described in this subparagraph is a model that--
                            (i) uses a computerized order-entry system 
                        that requires the transmittal of relevant 
                        supporting information at the time of referral 
                        for advanced diagnostic imaging services and 
                        provides automated decision-support feedback to 
                        the referring physician regarding the 
                        appropriateness of furnishing such imaging 
                        services; and
                            (ii) provides for feedback reports in 
                        accordance with paragraph (3)(B).
                    (H) Limitation.--In no case may the Secretary use 
                prior authorization--
                            (i) as a model for collecting data 
                        regarding physician compliance with 
                        appropriateness criteria selected under 
                        subparagraph (D) under the demonstration 
                        project under this subsection; or
                            (ii) under any model used for collecting 
                        such data under the demonstration project.
                    (I) Required contracts and performance standards 
                for certain entities.--
                            (i) In general.--The Secretary shall enter 
                        into contracts with entities to carry out the 
                        model described in subparagraph (G).
                            (ii) Performance standards.--The Secretary 
                        shall establish and enforce performance 
                        standards for such entities under the contracts 
                        entered into under clause (i), including 
                        performance standards with respect to--
                                    (I) the satisfaction of Medicare 
                                beneficiaries who are furnished 
                                advanced diagnostic imaging services by 
                                a physician participating in the 
                                demonstration project;
                                    (II) the satisfaction of physicians 
                                participating in the demonstration 
                                project;
                                    (III) if applicable, timelines for 
                                the provision of feedback reports under 
                                paragraph (3)(B); and
                                    (IV) any other areas determined 
                                appropriate by the Secretary.
            (3) Comparison of utilization of advanced diagnostic 
        imaging services and feedback reports.--
                    (A) Comparison of utilization of advanced 
                diagnostic imaging services.--The Secretary shall 
                consult with medical specialty societies and other 
                stakeholders to develop mechanisms for comparing the 
                utilization of advanced diagnostic imaging services by 
                physicians participating in the demonstration project 
                under this subsection against--
                            (i) the appropriateness criteria selected 
                        under paragraph (2)(D); and
                            (ii) to the extent feasible, the 
                        utilization of such services by physicians not 
                        participating in the demonstration project.
                    (B) Feedback reports.--The Secretary shall, in 
                consultation with medical specialty societies and other 
                stakeholders, develop mechanisms to provide feedback 
                reports to physicians participating in the 
                demonstration project under this subsection. Such 
                feedback reports shall include--
                            (i) a profile of the rate of compliance by 
                        the physician with appropriateness criteria 
                        selected under paragraph (2)(D), including a 
                        comparison of--
                                    (I) the rate of compliance by the 
                                physician with such criteria; and
                                    (II) the rate of compliance by the 
                                physician's peers (as defined by the 
                                Secretary) with such criteria; and
                            (ii) to the extent feasible, a comparison 
                        of--
                                    (I) the rate of utilization of 
                                advanced diagnostic imaging services by 
                                the physician; and
                                    (II) the rate of utilization of 
                                such services by the physician's peers 
                                (as defined by the Secretary) who are 
                                not participating in the demonstration 
                                project.
            (4) Conduct of demonstration project and waiver.--
                    (A) Conduct of demonstration project.--Chapter 35 
                of title 44, United States Code, shall not apply to the 
                conduct of the demonstration project under this 
                subsection.
                    (B) Waiver.--The Secretary may waive such 
                provisions of titles XI and XVIII of the Social 
                Security Act (42 U.S.C. 1301 et seq.; 1395 et seq.) as 
                may be necessary to carry out the demonstration project 
                under this subsection.
            (5) Evaluation and report.--
                    (A) Evaluation.--The Secretary shall evaluate the 
                demonstration project under this subsection to--
                            (i) assess the timeliness and efficacy of 
                        the demonstration project;
                            (ii) assess the performance of entities 
                        under a contract entered into under paragraph 
                        (2)(I)(i);
                            (iii) analyze data--
                                    (I) on the rates of appropriate, 
                                uncertain, and inappropriate advanced 
                                diagnostic imaging services furnished 
                                by physicians participating in the 
                                demonstration project;
                                    (II) on patterns and trends in the 
                                appropriateness and inappropriateness 
                                of such services furnished by such 
                                physicians;
                                    (III) on patterns and trends in 
                                national and regional variations of 
                                care with respect to the furnishing of 
                                such services; and
                                    (IV) on the correlation between the 
                                appropriateness of the services 
                                furnished and image results; and
                            (iv) address--
                                    (I) the thresholds used under the 
                                demonstration project to identify 
                                acceptable and outlier levels of 
                                performance with respect to the 
                                appropriateness of advanced diagnostic 
                                imaging services furnished;
                                    (II) whether prospective use of 
                                appropriateness criteria could have an 
                                effect on the volume of such services 
                                furnished;
                                    (III) whether expansion of the use 
                                of appropriateness criteria with 
                                respect to such services to a broader 
                                population of Medicare beneficiaries 
                                would be advisable;
                                    (IV) whether, under such an 
                                expansion, physicians who demonstrate 
                                consistent compliance with such 
                                appropriateness criteria should be 
                                exempted from certain requirements;
                                    (V) the use of incident-specific 
                                versus practice-specific outlier 
                                information in formulating future 
                                recommendations with respect to the use 
                                of appropriateness criteria for such 
                                services under the Medicare program; 
                                and
                                    (VI) the potential for using 
                                methods (including financial 
                                incentives), in addition to those used 
                                under the models under the 
                                demonstration project, to ensure 
                                compliance with such criteria.
                    (B) Report.--Not later than 1 year after the 
                completion of the demonstration project under this 
                subsection, the Secretary shall submit to Congress a 
                report containing the results of the evaluation of the 
                demonstration project conducted under subparagraph (A), 
                together with recommendations for such legislation and 
                administrative action as the Secretary determines 
                appropriate.
            (6) Funding.--The Secretary shall provide for the transfer 
        from the Federal Supplementary Medical Insurance Trust Fund 
        established under section 1841 of the Social Security Act (42 
        U.S.C. 1395t) of $10,000,000, for carrying out the 
        demonstration project under this subsection (including costs 
        associated with administering the demonstration project, 
        reimbursing physicians for administrative costs and providing 
        incentives to encourage participation under paragraph (2)(C), 
        entering into contracts under paragraph (2)(I), and evaluating 
        the demonstration project under paragraph (5)).
    (c) GAO Studies and Reports.--
            (1) Study on accreditation requirement for advanced 
        diagnostic imaging services.--
                    (A) Study.--
                            (i) In general.--The Comptroller General of 
                        the United States (in this subsection referred 
                        to as the ``Comptroller General'') shall 
                        conduct a study, by imaging modality, on--
                                    (I) the effect of the accreditation 
                                requirement under section 1834(e) of 
                                the Social Security Act, as added by 
                                subsection (a); and
                                    (II) any other relevant questions 
                                involving access to, and the value of, 
                                advanced diagnostic imaging services 
                                for Medicare beneficiaries.
                            (ii) Issues.--The study conducted under 
                        clause (i) shall examine the following:
                                    (I) The impact of such 
                                accreditation requirement on the 
                                number, type, and quality of imaging 
                                services furnished to Medicare 
                                beneficiaries.
                                    (II) The cost of such accreditation 
                                requirement, including costs to 
                                facilities of compliance with such 
                                requirement and costs to the Secretary 
                                of administering such requirement.
                                    (III) Access to imaging services by 
                                Medicare beneficiaries, especially in 
                                rural areas, before and after 
                                implementation of such accreditation 
                                requirement.
                                    (IV) Such other issues as the 
                                Secretary determines appropriate.
                    (B) Reports.--
                            (i) Preliminary report.--Not later than 
                        March 1, 2013, the Comptroller General shall 
                        submit a preliminary report to Congress on the 
                        study conducted under subparagraph (A).
                            (ii) Final report.--Not later than March 1, 
                        2014, the Comptroller General shall submit a 
                        final report to Congress on the study conducted 
                        under subparagraph (A), together with 
                        recommendations for such legislation and 
                        administrative action as the Comptroller 
                        General determines appropriate.
            (2) Study on interest rate and equipment utilization 
        assumptions used in determining practice expense.--
                    (A) Study.--
                            (i) In general.--The Comptroller General 
                        shall conduct a study on the assumptions used 
                        for interest rate and equipment utilization in 
                        the methodology for determination of practice 
                        expense relative value units under section 
                        1848(c)(2)(C)(ii) of the Social Security Act 
                        (42 U.S.C. 1395w-4(c)(2)(C)(ii)) with respect 
                        to imaging services.
                            (ii) Collection of data.--In conducting the 
                        study under clause (i), the Comptroller General 
                        shall collect data on imaging equipment 
                        utilization for different modalities of imaging 
                        equipment used in--
                                    (I) different types of practices; 
                                and
                                    (II) different geographic areas.
                    (B) Report.--Not later than June 1, 2010, the 
                Comptroller General shall submit to Congress a report 
                containing the results of the study conducted under 
                subparagraph (A), including the data collected under 
                clause (ii) of such subparagraph, together with 
                recommendations for such legislation and administrative 
                action as the Comptroller General determines 
                appropriate.

SEC. 136. EXTENSION OF TREATMENT OF CERTAIN PHYSICIAN PATHOLOGY 
              SERVICES UNDER MEDICARE.

    Section 542(c) of the Medicare, Medicaid, and SCHIP Benefits 
Improvement and Protection Act of 2000 (as enacted into law by section 
1(a)(6) of Public Law 106-554), as amended by section 732 of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(42 U.S.C. 1395w-4 note), section 104 of division B of the Tax Relief 
and Health Care Act of 2006 (42 U.S.C. 1395w-4 note), and section 104 
of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law 
110-173), is amended by striking ``2007, and the first 6 months of 
2008'' and inserting ``2007, 2008, and 2009''.

SEC. 137. ACCOMMODATION OF PHYSICIANS ORDERED TO ACTIVE DUTY IN THE 
              ARMED SERVICES.

    Section 1842(b)(6)(D)(iii) of the Social Security Act (42 U.S.C. 
1395u(b)(6)(D)(iii)), as amended by section 116 of the Medicare, 
Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-173), is 
amended by striking ``(before July 1, 2008)''.

SEC. 138. ADJUSTMENT FOR MEDICARE MENTAL HEALTH SERVICES.

    (a) Payment Adjustment.--
            (1) In general.--For purposes of payment for services 
        furnished under the physician fee schedule under section 1848 
        of the Social Security Act (42 U.S.C. 1395w-4) during the 
        period beginning on July 1, 2008, and ending on December 31, 
        2009, the Secretary of Health and Human Services shall increase 
        the fee schedule otherwise applicable for specified services by 
        5 percent.
            (2) Nonapplication of budget-neutrality.--The budget-
        neutrality provision of section 1848(c)(2)(B)(ii) of the Social 
        Security Act (42 U.S.C. 1395w-4(c)(2)(B)(ii)) shall not apply 
        to the adjustments described in paragraph (1).
    (b) Definition of Specified Services.--In this section, the term 
``specified services'' means procedure codes for services in the 
categories of the Health Care Common Procedure Coding System, 
established by the Secretary of Health and Human Services under section 
1848(c)(5) of the Social Security Act (42 U.S.C. 1395w-4(c)(5)), as of 
July 1, 2007, and as subsequently modified by the Secretary, consisting 
of psychiatric therapeutic procedures furnished in office or other 
outpatient facility settings or in inpatient hospital, partial 
hospital, or residential care facility settings, but only with respect 
to such services in such categories that are in the subcategories of 
services which are--
            (1) insight oriented, behavior modifying, or supportive 
        psychotherapy; or
            (2) interactive psychotherapy.
    (c) Implementation.--Notwithstanding any other provision of law, 
the Secretary may implement this section by program instruction or 
otherwise.

SEC. 139. IMPROVEMENTS FOR MEDICARE ANESTHESIA TEACHING PROGRAMS.

    (a) Special Payment Rule for Teaching Anesthesiologists.--Section 
1848(a) of the Social Security Act (42 U.S.C. 1395w-4(a)), as amended 
by section 132(b), is amended--
            (1) in paragraph (4)(A), by inserting ``except as provided 
        in paragraph (5),'' after ``anesthesia cases,''; and
            (2) by adding at the end the following new paragraph:
            ``(6) Special rule for teaching anesthesiologists.--With 
        respect to physicians' services furnished on or after January 
        1, 2010, in the case of teaching anesthesiologists involved in 
        the training of physician residents in a single anesthesia case 
        or two concurrent anesthesia cases, the fee schedule amount to 
        be applied shall be 100 percent of the fee schedule amount 
        otherwise applicable under this section if the anesthesia 
        services were personally performed by the teaching 
        anesthesiologist alone and paragraph (4) shall not apply if--
                    ``(A) the teaching anesthesiologist is present 
                during all critical or key portions of the anesthesia 
                service or procedure involved; and
                    ``(B) the teaching anesthesiologist (or another 
                anesthesiologist with whom the teaching 
                anesthesiologist has entered into an arrangement) is 
                immediately available to furnish anesthesia services 
                during the entire procedure.''.
    (b) Treatment of Certified Registered Nurse Anesthetists.--With 
respect to items and services furnished on or after January 1, 2010, 
the Secretary of Health and Human Services shall make appropriate 
adjustments to payments under the Medicare program under title XVIII of 
the Social Security Act for teaching certified registered nurse 
anesthetists to implement a policy with respect to teaching certified 
registered nurse anesthetists that--
            (1) is consistent with the adjustments made by the special 
        rule for teaching anesthesiologists under section 1848(a)(6) of 
        the Social Security Act, as added by subsection (a); and
            (2) maintains the existing payment differences between 
        teaching anesthesiologists and teaching certified registered 
        nurse anesthetists.

            PART II--OTHER PAYMENT AND COVERAGE IMPROVEMENTS

SEC. 141. EXTENSION OF EXCEPTIONS PROCESS FOR MEDICARE THERAPY CAPS.

    Section 1833(g)(5) of the Social Security Act (42 U.S.C. 
1395l(g)(5)), as amended by section 105 of the Medicare, Medicaid, and 
SCHIP Extension Act of 2007 (Public Law 110-173), is amended by 
striking ``June 30, 2008'' and inserting ``December 31, 2009''.

SEC. 142. EXTENSION OF PAYMENT RULE FOR BRACHYTHERAPY AND THERAPEUTIC 
              RADIOPHARMACEUTICALS.

    Section 1833(t)(16)(C) of the Social Security Act (42 U.S.C. 
1395l(t)(16)(C)), as amended by section 106 of the Medicare, Medicaid, 
and SCHIP Extension Act of 2007 (Public Law 110-173), is amended by 
striking ``July 1, 2008'' each place it appears and inserting ``January 
1, 2010''.

SEC. 143. SPEECH-LANGUAGE PATHOLOGY SERVICES.

    (a) In General.--Section 1861(ll) of the Social Security Act (42 
U.S.C. 1395x(ll)) is amended--
            (1) by redesignating paragraphs (2) and (3) as paragraphs 
        (3) and (4), respectively; and
            (2) by inserting after paragraph (1) the following new 
        paragraph:
    ``(2) The term `outpatient speech-language pathology services' has 
the meaning given the term `outpatient physical therapy services' in 
subsection (p), except that in applying such subsection--
            ``(A) `speech-language pathology' shall be substituted for 
        `physical therapy' each place it appears; and
            ``(B) `speech-language pathologist' shall be substituted 
        for `physical therapist' each place it appears.''.
    (b) Conforming Amendments.--
            (1) Section 1832(a)(2)(C) of the Social Security Act (42 
        U.S.C. 1395k(a)(2)(C)) is amended--
                    (A) by striking ``and outpatient'' and inserting 
                ``, outpatient''; and
                    (B) by inserting before the semicolon at the end 
                the following: ``, and outpatient speech-language 
                pathology services (other than services to which the 
                second sentence of section 1861(p) applies through the 
                application of section 1861(ll)(2))''.
            (2) Subparagraphs (A) and (B) of section 1833(a)(8) of the 
        Social Security Act (42 U.S.C. 1395l(a)(8)) are each amended by 
        striking ``(which includes outpatient speech-language pathology 
        services)'' and inserting ``, outpatient speech-language 
        pathology services,''.
            (3) Section 1833(g)(1) of the Social Security Act (42 
        U.S.C. 1395l(g)(1)) is amended--
                    (A) by inserting ``and speech-language pathology 
                services of the type described in such section through 
                the application of section 1861(ll)(2)'' after 
                ``1861(p)''; and
                    (B) by inserting ``and speech-language pathology 
                services'' after ``and physical therapy services''.
            (4) The second sentence of section 1835(a) of the Social 
        Security Act (42 U.S.C. 1395n(a)) is amended--
                    (A) by striking ``section 1861(g)'' and inserting 
                ``subsection (g) or (ll)(2) of section 1861'' each 
                place it appears; and
                    (B) by inserting ``or outpatient speech-language 
                pathology services, respectively'' after ``occupational 
                therapy services''.
            (5) Section 1861(p) of the Social Security Act (42 U.S.C. 
        1395x(p)) is amended by striking the fourth sentence.
            (6) Section 1861(s)(2)(D) of the Social Security Act (42 
        U.S.C. 1395x(s)(2)(D)) is amended by inserting ``, outpatient 
        speech-language pathology services,'' after ``physical therapy 
        services''.
            (7) Section 1862(a)(20) of the Social Security Act (42 
        U.S.C. 1395y(a)(20)) is amended--
                    (A) by striking ``outpatient occupational therapy 
                services or outpatient physical therapy services'' and 
                inserting ``outpatient physical therapy services, 
                outpatient speech-language pathology services, or 
                outpatient occupational therapy services''; and
                    (B) by striking ``section 1861(g)'' and inserting 
                ``subsection (g) or (ll)(2) of section 1861''.
            (8) Section 1866(e)(1) of the Social Security Act (42 
        U.S.C. 1395cc(e)(1)) is amended--
                    (A) by striking ``section 1861(g)'' and inserting 
                ``subsection (g) or (ll)(2) of section 1861'' the first 
                two places it appears;
                    (B) by striking ``defined) or'' and inserting 
                ``defined),''; and
                    (C) by inserting before the semicolon at the end 
                the following: ``, or (through the operation of section 
                1861(ll)(2)) with respect to the furnishing of 
                outpatient speech-language pathology''.
            (9) Section 1877(h)(6) of the Social Security Act (42 
        U.S.C. 1395nn(h)(6)) is amended by adding at the end the 
        following new subparagraph:
                    ``(L) Outpatient speech-language pathology 
                services.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after July 1, 2009.
    (d) Construction.--Nothing in this section shall be construed to 
affect existing regulations and policies of the Centers for Medicare & 
Medicaid Services that require physician oversight of care as a 
condition of payment for speech-language pathology services under part 
B of the Medicare program.

SEC. 144. PAYMENT AND COVERAGE IMPROVEMENTS FOR PATIENTS WITH CHRONIC 
              OBSTRUCTIVE PULMONARY DISEASE AND OTHER CONDITIONS.

    (a) Coverage of Pulmonary and Cardiac Rehabilitation.--
            (1) In general.--Section 1861 of the Social Security Act 
        (42 U.S.C. 1395x), as amended by section 101(a), is amended--
                    (A) in subsection (s)(2)--
                            (i) in subparagraph (AA), by striking 
                        ``and'' at the end;
                            (ii) in subparagraph (BB), by adding 
                        ``and'' after the semicolon at the end; and
                            (iii) by adding at the end the following 
                        new subparagraph:
                    ``(CC) items and services furnished under a cardiac 
                rehabilitation program (as defined in subsection 
                (eee)(1)) or under a pulmonary rehabilitation program 
                (as defined in subsection (fff)(1));''; and
                    (B) by adding at the end the following new 
                subsections:

                    ``Cardiac Rehabilitation Program

    ``(eee)(1) The term `cardiac rehabilitation program' means a 
physician-supervised program (as described in paragraph (2)) that 
furnishes the items and services described in paragraph (3).
    ``(2) A program described in this paragraph is a program under 
which--
            ``(A) items and services under the program are delivered--
                    ``(i) in a physician's office;
                    ``(ii) in a hospital on an outpatient basis; or
                    ``(iii) in other settings determined appropriate by 
                the Secretary.
            ``(B) a physician is immediately available and accessible 
        for medical consultation and medical emergencies at all times 
        items and services are being furnished under the program, 
        except that, in the case of items and services furnished under 
        such a program in a hospital, such availability shall be 
        presumed; and
            ``(C) individualized treatment is furnished under a written 
        plan established, reviewed, and signed by a physician every 30 
        days that describes--
                    ``(i) the individual's diagnosis;
                    ``(ii) the type, amount, frequency, and duration of 
                the items and services furnished under the plan; and
                    ``(iii) the goals set for the individual under the 
                plan.
    ``(3) The items and services described in this paragraph are--
            ``(A) physician-prescribed exercise;
            ``(B) cardiac risk factor modification, including 
        education, counseling, and behavioral intervention (to the 
        extent such education, counseling, and behavioral intervention 
        is closely related to the individual's care and treatment and 
        is tailored to the individual's needs);
            ``(C) psychosocial assessment;
            ``(D) outcomes assessment; and
            ``(E) such other items and services as the Secretary may 
        determine, but only if such items and services are--
                    ``(i) reasonable and necessary for the diagnosis or 
                active treatment of the individual's condition;
                    ``(ii) reasonably expected to improve or maintain 
                the individual's condition and functional level; and
                    ``(iii) furnished under such guidelines relating to 
                the frequency and duration of such items and services 
                as the Secretary shall establish, taking into account 
                accepted norms of medical practice and the reasonable 
                expectation of improvement of the individual.
    ``(4) The Secretary shall establish standards to ensure that a 
physician with expertise in the management of individuals with cardiac 
pathophysiology who is licensed to practice medicine in the State in 
which a cardiac rehabilitation program (or the intensive cardiac 
rehabilitation program, as the case may be) is offered--
            ``(A) is responsible for such program; and
            ``(B) in consultation with appropriate staff, is involved 
        substantially in directing the progress of individual in the 
        program.

                   ``Pulmonary Rehabilitation Program

    ``(fff)(1) The term `pulmonary rehabilitation program' means a 
physician-supervised program (as described in subsection (eee)(2) with 
respect to a program under this subsection) that furnishes the items 
and services described in paragraph (2).
    ``(2) The items and services described in this paragraph are--
            ``(A) physician-prescribed exercise;
            ``(B) education or training (to the extent the education or 
        training is closely and clearly related to the individual's 
        care and treatment and is tailored to such individual's needs);
            ``(C) psychosocial assessment;
            ``(D) outcomes assessment; and
            ``(E) such other items and services as the Secretary may 
        determine, but only if such items and services are--
                    ``(i) reasonable and necessary for the diagnosis or 
                active treatment of the individual's condition;
                    ``(ii) reasonably expected to improve or maintain 
                the individual's condition and functional level; and
                    ``(iii) furnished under such guidelines relating to 
                the frequency and duration of such items and services 
                as the Secretary shall establish, taking into account 
                accepted norms of medical practice and the reasonable 
                expectation of improvement of the individual.
    ``(3) The Secretary shall establish standards to ensure that a 
physician with expertise in the management of individuals with 
respiratory pathophysiology who is licensed to practice medicine in the 
State in which a pulmonary rehabilitation program is offered--
            ``(A) is responsible for such program; and
            ``(B) in consultation with appropriate staff, is involved 
        substantially in directing the progress of individual in the 
        program.''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to items and services furnished on or after January 
        1, 2010.
    (b) Repeal of Transfer of Ownership of Oxygen Equipment.--
            (1) In general.--Section 1834(a)(5)(F) of the Social 
        Security Act (42 U.S.C. 1395m(a)(5)(F)) is amended--
                    (A) in the heading, by striking ``Ownership of 
                equipment'' and inserting ``Rental cap''; and
                    (B) by striking clause (ii) and inserting the 
                following:
                            ``(ii) Payments and rules after rental 
                        cap.--After the 36th continuous month during 
                        which payment is made for the equipment under 
                        this paragraph--
                                    ``(I) the supplier furnishing such 
                                equipment under this subsection shall 
                                continue to furnish the equipment 
                                during any period of medical need for 
                                the remainder of the reasonable useful 
                                lifetime of the equipment, as 
                                determined by the Secretary;
                                    ``(II) payments for oxygen shall 
                                continue to be made in the amount 
                                recognized for oxygen under paragraph 
                                (9) for the period of medical need; and
                                    ``(III) maintenance and servicing 
                                payments shall, if the Secretary 
                                determines such payments are reasonable 
                                and necessary, be made (for parts and 
                                labor not covered by the supplier's or 
                                manufacturer's warranty, as determined 
                                by the Secretary to be appropriate for 
                                the equipment), and such payments shall 
                                be in an amount determined to be 
                                appropriate by the Secretary.''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall take effect on January 1, 2009.
    (c) Revision of Payment for Oxygen and Oxygen Equipment, Portable 
Oxygen Equipment, and Oxygen for Stationary Equipment.--
            (1) Separate payment for oxygen equipment and oxygen for 
        stationary equipment.--Section 1834(a) of the Social Security 
        Act (42 U.S.C. 1395m(a)) is amended by adding at the end the 
        following new paragraph:
            ``(22) Additional special payment rule beginning in 2009.--
                    ``(A) In general.--Notwithstanding the preceding 
                provisions of this subsection, for oxygen equipment 
                (other than portable oxygen and oxygen equipment) 
                furnished during 2009, the payment amount otherwise 
                determined under this subsection for such equipment 
                shall be equal to--
                            ``(i) the amount of the monthly payment 
                        amount otherwise established by the Secretary 
                        under this subsection for oxygen and oxygen 
                        equipment (other than portable oxygen 
                        equipment) furnished in 2009; minus
                            ``(ii) 71 percent of the amount of the 
                        monthly payment amount established by the 
                        Secretary under this subsection for oxygen for 
                        stationary equipment furnished in such year.
                    ``(B) Application of update to special payment 
                amount.--The covered item update under paragraph (14) 
                for oxygen equipment for 2010 and each subsequent year 
                shall be applied to the payment amount under 
                subparagraph (A) unless payment is made for such items 
                and supplies under section 1847.''.
            (2) Add-on payment for oxygen for stationary oxygen 
        equipment.--Section 1834(a)(5) of the Social Security Act (42 
        U.S.C. 1395m(a)(5)) is amended by adding at the end the 
        following new subparagraph:
                    ``(G) Add-on for oxygen for stationary oxygen 
                equipment.--In the case of oxygen furnished on or after 
                January 1, 2009, when oxygen is used with stationary 
                oxygen equipment, the payment amount recognized under 
                subparagraph (A) shall be increased by the amount 
                established by the Secretary for such oxygen (or 71 
                percent of such amount during the rental period for 
                such equipment).''.
            (3) Equalizing add-on payment for oxygen for portable 
        oxygen and oxygen equipment during monthly rental period and 
        payment for such oxygen and oxygen equipment after such rental 
        period.--Section 1834(a)(9) of the Social Security Act (42 
        U.S.C. 1395m(a)(9)) is amended by adding at the end the 
        following new subparagraph:
                    ``(E) Special rule for add-on payment for portable 
                oxygen and oxygen equipment.--In the case of oxygen and 
                oxygen equipment furnished on or after January 1, 2009, 
                for purposes of paragraph (5)(B), the monthly amount 
                recognized under this paragraph for portable oxygen and 
                oxygen equipment in a year shall be equal to the 
                monthly payment amount for portable oxygen and oxygen 
                equipment applicable for the year under this subsection 
                after the end of the 36-month period under paragraph 
                (5)(F).''.
            (4) Special rule for add-on payments for oxygen generating 
        portable equipment.--Section 1834(a)(9) of the Social Security 
        Act (42 U.S.C. 1395m(a)(9)), as amended by paragraph (3), is 
        amended by adding at the end the following new subparagraph:
                    ``(F) Special rule for add-on payment for oxygen 
                generating portable equipment.--In the case of oxygen 
                generating portable equipment, as defined by the 
                Secretary, furnished on or after January 1, 2009, the 
                Secretary shall make the following monthly add-on 
                payments during the 36-month rental period under 
                paragraph (5)(F):
                            ``(i) An amount equal to the monthly 
                        payment amount specified in subparagraph (E) 
                        for the month.
                            ``(ii) An amount equal to the monthly 
                        payment amount otherwise established by the 
                        Secretary under this subsection for such 
                        equipment for the month that recognizes that 
                        such equipment substitutes for the delivery of 
                        portable oxygen and oxygen contents during the 
                        remaining useful life of the equipment that 
                        occurs after the end of such 36-month rental 
                        period.''.
            (5) Cap on total monthly payment for liquid or gaseous 
        stationary and portable systems.--Section 1834(a)(5) of the 
        Social Security Act (42 U.S.C. 1395m(a)(5)), as amended by 
        paragraph (2), is amended by adding at the end the following 
        new subparagraph:
                    ``(H) Cap on total payments for liquid or gaseous 
                stationary and portable systems.--In the case of a 
                liquid or gaseous stationary and portable system 
                furnished on or after January 1, 2009, the total 
                monthly amount recognized under this part for such 
                system for a month (including any add-on payments under 
                this subsection) may not exceed the total monthly 
                amount that would have otherwise been recognized under 
                this part for such system for the month (including any 
                add-on payments under this subsection) if the 
                amendments made by section 144(c) of the Medicare 
                Improvements for Patients and Providers Act of 2008 had 
                not been enacted.''.
            (6) Conforming amendments.--(A) Section 1834(a)(5)(A) of 
        the Social Security Act (42 U.S.C. 1395m(a)(5)(A)) is amended--
                    (i) by inserting ``and, in the case of items and 
                services furnished on or after January 1, 2009, other 
                than oxygen for stationary equipment'' after ``portable 
                oxygen equipment''; and
                    (ii) by striking ``subparagraphs (B), (C), (E), and 
                (F)'' and inserting ``the succeeding provisions of this 
                paragraph''.
            (B) Section 1834(a)(9) of the Social Security Act (42 
        U.S.C. 1395m(a)(9)) is amended--
                    (i) in the first sentence of the matter preceding 
                subparagraph (A), by striking ``For purposes'' and 
                inserting ``Subject to paragraphs (21) and (22), for 
                purposes''; and
                    (ii) in the second sentence of the matter preceding 
                subparagraph (A)--
                            (I) by inserting ``and, in the case of 
                        items and services furnished on or after 
                        January 1, 2009, other than oxygen for 
                        stationary equipment'' after ``portable oxygen 
                        equipment'';
                            (II) by striking ``and'' before ``(ii)'' 
                        and inserting a comma; and
                            (III) by inserting ``, and (iii) in the 
                        case of items and services furnished on or 
                        after January 1, 2009, for oxygen for 
                        stationary equipment'' before ``(each such 
                        group''.
    (d) Application to Competitive Bidding.--The amendments made by 
subsections (b) and (c) shall not apply to contracts entered into under 
section 1847 of the Social Security Act (42 U.S.C. 1395w-3) prior to 
September 1, 2008, pursuant to the implementation of subsection 
(a)(1)(B)(i)(I) of such section 1847.
    (e) Institute of Medicine Study and Report on Payments for 
Different Classes of Oxygen Equipment.--
            (1) Study.--Not later than 3 months after the date of the 
        enactment of this Act, the Secretary of Health and Human 
        Services shall enter into a contract with the Institute of 
        Medicine of the National Academies (in this section referred to 
        as the ``Institute'') under which the Institute shall conduct a 
        study on the furnishing of, and payments for, oxygen and oxygen 
        equipment under the Medicare program. Such study shall include 
        an analysis of the following:
                    (A) The costs and activities associated with 
                furnishing different modalities of oxygen equipment 
                (covering gaseous and liquid portable equipment and 
                oxygen generating portable equipment), including--
                            (i) the acquisition cost of the oxygen 
                        equipment;
                            (ii) the delivery and refilling of oxygen 
                        contents for stationary and portable systems, 
                        including the frequency of delivery;
                            (iii) the delivery of the equipment and the 
                        provision of supplies and accessories;
                            (iv) training and education, intake of 
                        patient information and related documentation, 
                        and responding to beneficiary inquiries;
                            (v) servicing of different types of oxygen 
                        and oxygen equipment, including--
                                    (I) the type and frequency of 
                                routine and nonroutine servicing 
                                furnished, and variation across 
                                suppliers in furnishing such servicing; 
                                and
                                    (II) the extent to which emergency 
                                or after hours servicing is needed and 
                                furnished; and
                            (vi) other items or activities involved 
                        with furnishing oxygen and oxygen equipment not 
                        described in clauses (i) though (v).
                    (B) Whether the various items and activities 
                described in subparagraph (A) are medically necessary 
                and affect patient outcomes.
                    (C)(i) The adequacy of Medicare payment rates for 
                oxygen equipment and necessary servicing and items and 
                activities furnished in connection with the provision 
                of oxygen and oxygen equipment; and
                    (ii) how such payment rates compare to 
                competitively bid rates.
                    (D) Whether payment rates for oxygen and oxygen 
                equipment under the Medicare program should vary 
                depending on the modality of oxygen equipment used or 
                should be the same for all modalities.
                    (E) The adequacy of add-on payments under the 
                Medicare program for--
                            (i) contents for stationary equipment;
                            (ii) contents for portable equipment; and
                            (iii) oxygen-generating portable equipment.
                    (F)(i) Whether, during the rental period for oxygen 
                equipment under the Medicare program, payment for such 
                equipment and servicing should be bundled together or 
                whether separate payments are appropriate; and
                    (ii) if separate payments are appropriate, how the 
                payment should be allocated between equipment and 
                servicing.
                    (G) Options that could be considered for suppliers 
                to document or report under the Medicare program 
                detailed information on activities related to 
                furnishing oxygen and oxygen equipment to Medicare 
                beneficiaries.
            (2) Survey.--In conducting the study under paragraph (1), 
        the Institute shall conduct a survey of suppliers of oxygen and 
        oxygen equipment to obtain data on items described in paragraph 
        (1)(A).
            (3) Report.--Not later than 18 months after the date of the 
        enactment of this Act, the Institute shall submit to the 
        Secretary of Health and Human Services a report containing the 
        results of the study conducted under paragraph (1), together 
        with such recommendations as the Institute determines 
        appropriate.
            (4) Funding.--For the purpose of carrying out this section, 
        the Secretary of Health and Human Services shall provide for 
        the transfer, from the Federal Supplementary Medical Insurance 
        Trust Fund established under section 1841 of the Social 
        Security Act (42 U.S.C. 1395t), of $5,000,000 to the Centers 
        for Medicare & Medicaid Services Program Management Account.

SEC. 145. REVISION OF PAYMENT FOR POWER-DRIVEN WHEELCHAIRS.

    (a) In General.--Section 1834(a)(7)(A) of the Social Security Act 
(42 U.S.C. 1395m(a)(7)(A)) is amended--
            (1) in clause (i)--
                    (A) in subclause (II), by inserting ``subclause 
                (III) and'' after ``Subject to''; and
                    (B) by adding at the end the following new 
                subclause:
                                    ``(III) Special rule for power-
                                driven wheelchairs.--For purposes of 
                                payment for power-driven wheelchairs, 
                                subclause (II) shall be applied by 
                                substituting `15 percent' and `6 
                                percent' for `10 percent' and `7.5 
                                percent', respectively.''; and
            (2) in clause (iii)--
                    (A) in the heading, by inserting ``complex, 
                rehabilitative'' before ``power-driven''; and
                    (B) by inserting ``complex, rehabilitative'' before 
                ``power-driven''.
    (b) Technical Amendment.--Section 1834(a)(7)(C)(ii)(II) of the 
Social Security Act (42 U.S.C. 1395m(a)(7)(C)(ii)(II)) is amended by 
striking ``(A)(ii) or''.
    (c) Effective Date.--
            (1) In general.--Subject to paragraph (2), the amendments 
        made by subsection (a) shall take effect on January 1, 2009, 
        and shall apply to power-driven wheelchairs furnished on or 
        after such date.
            (2) Application to competitive bidding.--The amendments 
        made by subsection (a) shall not apply to contracts entered 
        into under section 1847 of the Social Security Act (42 U.S.C. 
        1395w-3) prior to January 1, 2009, pursuant to the 
        implementation of subsection (a)(1)(B)(i)(I) of such section 
        1847.

SEC. 146. CLINICAL LABORATORY TESTS.

    (a) Repeal of Medicare Competitive Bidding Demonstration Project 
for Clinical Laboratory Services.--
            (1) In general.--Section 1847 of the Social Security Act 
        (42 U.S.C. 1395w-3) is amended by striking subsection (e).
            (2) Conforming amendments.--Section 1833(a)(1)(D) of the 
        Social Security Act (42 U.S.C. 1395l(a)(1)(D)) is amended--
                    (A) by inserting ``or'' before ``(ii)''; and
                    (B) by striking ``or (iii) on the basis'' and all 
                that follows before the comma at the end.
            (3) Effective date.--The amendments made by this subsection 
        shall take effect on the date of the enactment of this Act.
    (b) Clinical Laboratory Test Fee Schedule Update Adjustment.--
Section 1833(h)(2)(A)(i) of the Social Security Act (42 U.S.C. 
1395l(h)(2)(A)(ii)) is amended by inserting ``minus, for each of the 
years 2009 through 2013, 0.5 percentage points'' after ``city 
average)''.

SEC. 147. IMPROVED ACCESS TO AMBULANCE SERVICES.

    (a) Extension of Increased Medicare Payments for Ground Ambulance 
Services.--Section 1834(l)(13) of the Social Security Act (42 U.S.C. 
1395m(l)(13)) is amended--
            (1) in subparagraph (A)--
                    (A) in the matter preceding clause (i), by 
                inserting ``and for such services furnished on or after 
                July 1, 2008, and before January 1, 2010'' after 
                ``2007,'';
                    (B) in clause (i), by inserting ``(or 3 percent if 
                such service is furnished on or after July 1, 2008, and 
                before January 1, 2010)'' after ``2 percent''; and
                    (C) in clause (ii), by inserting ``(or 2 percent if 
                such service is furnished on or after July 1, 2008, and 
                before January 1, 2010)'' after ``1 percent''; and
            (2) in subparagraph (B)--
                    (A) in the heading, by striking ``2006'' and 
                inserting ``applicable period''; and
                    (B) by inserting ``applicable'' before ``period''.
    (b) Air Ambulance Payment Improvements.--
            (1) Treatment of certain areas for payment for air 
        ambulance services under the ambulance fee schedule.--
        Notwithstanding any other provision of law, for purposes of 
        making payments under section 1834(l) of the Social Security 
        Act (42 U.S.C. 1395m(l)) for air ambulance services furnished 
        during the period beginning on July 1, 2008, and ending on 
        December 31, 2009, any area that was designated as a rural area 
        for purposes of making payments under such section for air 
        ambulance services furnished on December 31, 2006, shall be 
        treated as a rural area for purposes of making payments under 
        such section for air ambulance services furnished during such 
        period.
            (2) Clarification regarding satisfaction of requirement of 
        medically necessary.--
                    (A) In general.--Section 1834(l)(14)(B)(i) of the 
                Social Security Act (42 U.S.C. 1395m(l)(14)(B)(i)) is 
                amended by striking ``reasonably determines or 
                certifies'' and inserting ``certifies or reasonably 
                determines''.
                    (B) Effective date.--The amendment made by 
                subparagraph (A) shall apply to services furnished on 
                or after the date of the enactment of this Act.

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.

    Section 1833(t)(7)(D)(i) of the Social Security Act (42 U.S.C. 
1395l(t)(7)(D)(i)) is amended--
            (1) in subclause (II)--
                    (A) in the first sentence, by striking ``2009'' and 
                inserting ``2010''; and
                    (B) by striking the second sentence and inserting 
                the following new sentence: ``For purposes of the 
                preceding sentence, the applicable percentage shall be 
                95 percent with respect to covered OPD services 
                furnished in 2006, 90 percent with respect to such 
                services furnished in 2007, and 85 percent with respect 
                to such services furnished in 2008 or 2009.''; and
            (2) by adding at the end the following new subclause:
                            ``(III) In the case of a sole community 
                        hospital (as defined in section 
                        1886(d)(5)(D)(iii)) that has not more than 100 
                        beds, for covered OPD services furnished on or 
                        after January 1, 2009, and before January 1, 
                        2010, for which the PPS amount is less than the 
                        pre-BBA amount, the amount of payment under 
                        this subsection shall be increased by 85 
                        percent of the amount of such difference.''.

SEC. 149. CLARIFICATION OF PAYMENT FOR CLINICAL LABORATORY TESTS 
              FURNISHED BY CRITICAL ACCESS HOSPITALS.

    (a) In General.--Section 1834(g)(4) of the Social Security Act (42 
U.S.C. 1395m(g)(4)) is amended--
            (1) in the heading, by striking ``no beneficiary cost-
        sharing for'' and inserting ``treatment of''; and
            (2) by adding at the end the following new sentence: ``For 
        purposes of the preceding sentence and section 1861(mm)(3), 
        clinical diagnostic laboratory services furnished by a critical 
        access hospital shall be treated as being furnished as part of 
        outpatient critical access services without regard to whether 
        the individual with respect to whom such services are furnished 
        is physically present in the critical access hospital, or in a 
        skilled nursing facility or a clinic (including a rural health 
        clinic) that is operated by a critical access hospital, at the 
        time the specimen is collected.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to services furnished on or after July 1, 2009.

SEC. 150. ADDING CERTAIN ENTITIES AS ORIGINATING SITES FOR PAYMENT OF 
              TELEHEALTH SERVICES.

    (a) In General.--Section 1834(m)(4)(C)(ii) of the Social Security 
Act (42 U.S.C. 1395m(m)(4)(C)(ii)) is amended by adding at the end the 
following new subclauses:
                                    ``(VI) A hospital-based or critical 
                                access hospital-based renal dialysis 
                                center (including satellites).
                                    ``(VII) A skilled nursing facility 
                                (as defined in section 1819(a)).
                                    ``(VIII) A community mental health 
                                center (as defined in section 
                                1861(ff)(3)(B)).''.
    (b) Conforming Amendment.--Section 1888(e)(2)(A)(ii) of the Social 
Security Act (42 U.S.C. 1395yy(e)(2)(A)(ii)) is amended by inserting 
``telehealth services furnished under section 1834(m)(4)(C)(ii)(VII),'' 
after ``section 1861(s)(2),''.
    (c) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after January 1, 2009.

SEC. 151. MEDPAC STUDY AND REPORT ON IMPROVING CHRONIC CARE 
              DEMONSTRATION PROGRAMS.

    (a) Study.--The Medicare Payment Advisory Commission shall conduct 
a study on the feasability and advisability of establishing a Medicare 
Chronic Care Practice Research Network that would serve as a standing 
network of providers testing new models of care coordination and other 
care approaches for chronically ill beneficiaries, including the 
initiation, operation, evaluation, and, if appropriate, expansion of 
such models to the broader Medicare patient population.
    (b) Report.--Not later than June 15, 2009, the Medicare Payment 
Advisory Commission shall submit to Congress a report containing the 
results of the study conducted under subsection (a).

SEC. 152. INCREASE OF FQHC PAYMENT LIMITS.

    (a) In General.--Section 1833 of the Social Security Act (42 U.S.C. 
1395l), as amended by section 133(a), is amended by adding at the end 
the following new subsection:
    ``(w) Increase of FQHC Payment Limits.--In the case of services 
furnished by federally qualified health centers (as defined in section 
1861(aa)(4)), the Secretary shall establish payment limits with respect 
to such services under this part for services furnished--
            ``(1) in 2010, at the limits otherwise established under 
        this part for such year increased by $5; and
            ``(2) in a subsequent year, at the limits established under 
        this subsection for the previous year increased by the 
        percentage increase in the MEI (as defined in section 
        1842(i)(3)) for such subsequent year.''.
    (b) Study and Report on the Effects and Adequacy of the Medicare 
Federally Qualified Health Center Payment Structure.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct a study to determine whether the structure for 
        payments for services furnished by federally qualified health 
        centers (as defined in section 1861(aa)(4) of the Social 
        Security Act (42 U.S.C. 1395x(aa)(4)) under part B of title 
        XVIII of the Social Security Act (42 U.S.C. 1395j et seq.) 
        adequately reimburses federally qualified health centers for 
        the care furnished to Medicare beneficiaries. In conducting 
        such study, the Comptroller General shall--
                    (A) use the most current cost report data 
                available;
                    (B) examine the effects of the payment limits 
                established with respect to such services under such 
                part B on the ability of federally qualified health 
                centers to furnish care to Medicare beneficiaries; and
                    (C) examine the cost of furnishing services covered 
                under the Medicare program as of the date of the 
                enactment of this Act that were not covered under such 
                program as of the date on which the Secretary 
                determined the payment rate for federally qualified 
                health centers in 1991.
            (2) Report.--Not later than 15 months after the date of the 
        enactment of this Act, the Comptroller General of the United 
        States shall submit to Congress a report on the study conducted 
        under paragraph (1), together with recommendations for such 
        legislation and administrative action the Comptroller General 
        determines appropriate, taking into consideration the structure 
        and adequacy of the prospective payment methodology used to 
        make payments to federally qualified health centers under the 
        Medicaid program under title XIX of the Social Security Act (42 
        U.S.C. 1396 et seq.).

SEC. 153. KIDNEY DISEASE EDUCATION AND AWARENESS PROVISIONS.

    (a) Chronic Kidney Disease Initiatives.--Part P of title III of the 
Public Health Service Act (42 U.S.C. 280g et seq.) is amended by adding 
at the end the following new section:

``SEC. 399R. CHRONIC KIDNEY DISEASE INITIATIVES.

    ``(a) In General.--The Secretary shall establish pilot projects 
to--
            ``(1) increase public and medical community awareness 
        (particularly of those who treat patients with diabetes and 
        hypertension) regarding chronic kidney disease, focusing on 
        prevention;
            ``(2) increase screening for chronic kidney disease, 
        focusing on Medicare beneficiaries at risk of chronic kidney 
        disease; and
            ``(3) enhance surveillance systems to better assess the 
        prevalence and incidence of chronic kidney disease.
    ``(b) Scope and Duration.--
            ``(1) Scope.--The Secretary shall select at least 3 States 
        in which to conduct pilot projects under this section.
            ``(2) Duration.--The pilot projects under this section 
        shall be conducted for a period that is not longer than 5 years 
        and shall begin on January 1, 2009.
    ``(c) Evaluation and Report.--The Comptroller General of the United 
States shall conduct an evaluation of the pilot projects conducted 
under this section. Not later than 12 months after the date on which 
the pilot projects are completed, the Comptroller General shall submit 
to Congress a report on the evaluation.
    ``(d) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary for the purpose of carrying 
out this section.''.
    (b) Medicare Coverage of Kidney Disease Patient Education 
Services.--
            (1) Coverage of kidney disease education services.--
                    (A) Coverage.--Section 1861(s)(2) of the Social 
                Security Act (42 U.S.C. 1395x(s)(2)), as amended by 
                section 144(a), is amended--
                            (i) in subparagraph (BB), by striking 
                        ``and'' after the semicolon at the end;
                            (ii) in subparagraph (CC), by adding 
                        ``and'' after the semicolon at the end; and
                            (iii) by adding at the end the following 
                        new subparagraph:
            ``(DD) kidney disease education services (as defined in 
        subsection (ggg));''.
                    (B) Services described.--Section 1861 of the Social 
                Security Act (42 U.S.C. 1395x), as amended by section 
                144(a), is amended by adding at the end the following 
                new subsection:

                  ``Kidney Disease Education Services

    ``(ggg)(1) The term `kidney disease education services' means 
educational services that are--
            ``(A) furnished to an individual with stage IV chronic 
        kidney disease who, according to accepted clinical guidelines 
        identified by the Secretary, will require dialysis or a kidney 
        transplant;
            ``(B) furnished, upon the referral of the physician 
        managing the individual's kidney condition, by a qualified 
        person (as defined in paragraph (2)); and
            ``(C) designed--
                    ``(i) to provide comprehensive information 
                (consistent with the standards set under paragraph (3)) 
                regarding--
                            ``(I) the management of comorbidities, 
                        including for purposes of delaying the need for 
                        dialysis;
                            ``(II) the prevention of uremic 
                        complications; and
                            ``(III) each option for renal replacement 
                        therapy (including hemodialysis and peritoneal 
                        dialysis at home and in-center as well as 
                        vascular access options and transplantation);
                    ``(ii) to ensure that the individual has the 
                opportunity to actively participate in the choice of 
                therapy; and
                    ``(iii) to be tailored to meet the needs of the 
                individual involved.
    ``(2)(A) The term `qualified person' means--
            ``(i) a physician (as defined in section 1861(r)(1)) or a 
        physician assistant, nurse practitioner, or clinical nurse 
        specialist (as defined in section 1861(aa)(5)), who furnishes 
        services for which payment may be made under the fee schedule 
        established under section 1848; and
            ``(ii) a provider of services located in a rural area (as 
        defined in section 1886(d)(2)(D)).
    ``(B) Such term does not include a provider of services (other than 
a provider of services described in subparagraph (A)(ii)) or a renal 
dialysis facility.
    ``(3) The Secretary shall set standards for the content of such 
information to be provided under paragraph (1)(C)(i) after consulting 
with physicians, other health professionals, health educators, 
professional organizations, accrediting organizations, kidney patient 
organizations, dialysis facilities, transplant centers, network 
organizations described in section 1881(c)(2), and other knowledgeable 
persons. To the extent possible the Secretary shall consult with 
persons or entities described in the previous sentence, other than a 
dialysis facility, that has not received industry funding from a drug 
or biological manufacturer or dialysis facility.
    ``(4) No individual shall be furnished more than 6 sessions of 
kidney disease education services under this title.''.
                    (C) Payment under the physician fee schedule.--
                Section 1848(j)(3) of the Social Security Act (42 
                U.S.C. 1395w-4(j)(3)), is amended by inserting 
                ``(2)(DD),'' after ``(2)(AA),''.
                    (D) Limitation on number of sessions.--Section 
                1862(a)(1) of the Social Security Act (42 U.S.C. 
                1395y(a)(1)) is amended--
                            (i) in subparagraph (M), by striking 
                        ``and'' at the end;
                            (ii) in subparagraph (N), by striking the 
                        semicolon at the end and inserting ``, and''; 
                        and
                            (iii) by adding at the end the following 
                        new subparagraph:
            ``(O) in the case of kidney disease education services (as 
        defined in paragraph (1) of section 1861(ggg)), which are 
        furnished in excess of the number of sessions covered under 
        paragraph (4) of such section;''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to services furnished on or after January 1, 2010.

SEC. 154. RENAL DIALYSIS PROVISIONS.

    (a) Composite Rate.--
            (1) Update.--Section 1881(b)(12)(G) of the Social Security 
        Act (42 U.S.C. 1395rr(b)(12)(G)) is amended--
                    (A) in clause (i), by striking ``and'' at the end;
                    (B) in clause (ii)--
                            (i) by inserting ``and before January 1, 
                        2009,'' after ``April 1, 2007,''; and
                            (ii) by striking the period at the end and 
                        inserting a semicolon; and
                    (C) by adding at the end the following new clauses:
            ``(iii) furnished on or after January 1, 2009, and before 
        January 1, 2010, by 1.0 percent above the amount of such 
        composite rate component for such services furnished on 
        December 31, 2008; and
            ``(iv) furnished on or after January 1, 2010, by 1.0 
        percent above the amount of such composite rate component for 
        such services furnished on December 31, 2009.''.
            (2) Site neutral composite rate.--Section 1881(b)(12)(A) of 
        the Social Security Act (42 U.S.C. 1395rr(b)(12)(A)) is amended 
        by adding at the end the following new sentence: ``Under such 
        system, the payment rate for dialysis services furnished on or 
        after January 1, 2009, by providers of services shall be the 
        same as the payment rate (computed without regard to this 
        sentence) for such services furnished by renal dialysis 
        facilities, and in applying the geographic index under 
        subparagraph (D) to providers of services, the labor share 
        shall be based on the labor share otherwise applied for renal 
        dialysis facilities.''.
    (b) Development of ESRD Bundled Payment System.--
            (1) In general.--Section 1881(b) of the Social Security Act 
        (42 U.S.C. 1395rr(b)) is amended by adding at the end the 
        following new paragraph:
    ``(14)(A)(i) Subject to subparagraph (E), for services furnished on 
or after January 1, 2011, the Secretary shall implement a payment 
system under which a single payment is made under this title to a 
provider of services or a renal dialysis facility for renal dialysis 
services (as defined in subparagraph (B)) in lieu of any other payment 
(including a payment adjustment under paragraph (12)(B)(ii)) and for 
such services and items furnished pursuant to paragraph (4).
    ``(ii) In implementing the system under this paragraph the 
Secretary shall ensure that the estimated total amount of payments 
under this title for 2011 for renal dialysis services shall equal 98 
percent of the estimated total amount of payments for renal dialysis 
services, including payments under paragraph (12)(B)(ii), that would 
have been made under this title with respect to services furnished in 
2011 if such system had not been implemented. In making the estimation 
under subclause (I), the Secretary shall use per patient utilization 
data from 2007, 2008, or 2009, whichever has the lowest per patient 
utilization.
    ``(B) For purposes of this paragraph, the term `renal dialysis 
services' includes--
            ``(i) items and services included in the composite rate for 
        renal dialysis services as of December 31, 2010;
            ``(ii) erythropoiesis stimulating agents and any oral form 
        of such agents that are furnished to individuals for the 
        treatment of end stage renal disease;
            ``(iii) other drugs and biologicals that are furnished to 
        individuals for the treatment of end stage renal disease and 
        for which payment was (before the application of this 
        paragraph) made separately under this title, and any oral 
        equivalent form of such drug or biological; and
            ``(iv) diagnostic laboratory tests and other items and 
        services not described in clause (i) that are furnished to 
        individuals for the treatment of end stage renal disease.
Such term does not include vaccines.
    ``(C) The system under this paragraph may provide for payment on 
the basis of services furnished during a week or month or such other 
appropriate unit of payment as the Secretary specifies.
    ``(D) Such system--
            ``(i) shall include a payment adjustment based on case mix 
        that may take into account patient weight, body mass index, 
        comorbidities, length of time on dialysis, age, race, 
        ethnicity, and other appropriate factors;
            ``(ii) shall include a payment adjustment for high cost 
        outliers due to unusual variations in the type or amount of 
        medically necessary care, including variations in the amount of 
        erythropoiesis stimulating agents necessary for anemia 
        management;
            ``(iii) shall include a payment adjustment that reflects 
        the extent to which costs incurred by low-volume facilities (as 
        defined by the Secretary) in furnishing renal dialysis services 
        exceed the costs incurred by other facilities in furnishing 
        such services, and for payment for renal dialysis services 
        furnished on or after January 1, 2011, and before January 1, 
        2014, such payment adjustment shall not be less than 10 
        percent; and
            ``(iv) may include such other payment adjustments as the 
        Secretary determines appropriate, such as a payment 
        adjustment--
                    ``(I) for pediatric providers of services and renal 
                dialysis facilities;
                    ``(II) by a geographic index, such as the index 
                referred to in paragraph (12)(D), as the Secretary 
                determines to be appropriate; and
                    ``(III) for providers of services or renal dialysis 
                facilities located in rural areas.
The Secretary shall take into consideration the unique treatment needs 
of children and young adults in establishing such system.
    ``(E)(i) The Secretary shall provide for a four-year phase-in (in 
equal increments) of the payment amount under the payment system under 
this paragraph, with such payment amount being fully implemented for 
renal dialysis services furnished on or after January 1, 2014.
    ``(ii) A provider of services or renal dialysis facility may make a 
one-time election to be excluded from the phase-in under clause (i) and 
be paid entirely based on the payment amount under the payment system 
under this paragraph. Such an election shall be made prior to January 
1, 2011, in a form and manner specified by the Secretary, and is final 
and may not be rescinded.
    ``(iii) The Secretary shall make an adjustment to the payments 
under this paragraph for years during which the phase-in under clause 
(i) is applicable so that the estimated total amount of payments under 
this paragraph, including payments under this subparagraph, shall equal 
the estimated total amount of payments that would otherwise occur under 
this paragraph without such phase-in.
    ``(F)(i) Subject to clause (ii), beginning in 2012, the Secretary 
shall annually increase payment amounts established under this 
paragraph by an ESRD market basket percentage increase factor for a 
bundled payment system for renal dialysis services that reflects 
changes over time in the prices of an appropriate mix of goods and 
services included in renal dialysis services minus 1.0 percentage 
point.
    ``(ii) For years during which a phase-in of the payment system 
pursuant to subparagraph (E) is applicable, the following rules shall 
apply to the portion of the payment under the system that is based on 
the payment of the composite rate that would otherwise apply if the 
system under this paragraph had not been enacted:
            ``(I) The update under clause (i) shall not apply.
            ``(II) The Secretary shall annually increase such composite 
        rate by the ESRD market basket percentage increase factor 
        described in clause (i) minus 1.0 percentage point.
    ``(G) There shall be no administrative or judicial review under 
section 1869, section 1878, or otherwise of the determination of 
payment amounts under subparagraph (A), the establishment of an 
appropriate unit of payment under subparagraph (C), the identification 
of renal dialysis services included in the bundled payment, the 
adjustments under subparagraph (D), the application of the phase-in 
under subparagraph (E), and the establishment of the market basket 
percentage increase factors under subparagraph (F).
    ``(H) Erythropoiesis stimulating agents and other drugs and 
biologicals shall be treated as prescribed and dispensed or 
administered and available only under part B if they are--
            ``(i) furnished to an individual for the treatment of end 
        stage renal disease; and
            ``(ii) included in subparagraph (B) for purposes of payment 
        under this paragraph.''.
            (2) Prohibition of unbundling.--Section 1862(a) of the 
        Social Security Act (42 U.S.C. 1395y(a)), as amended by section 
        135(a)(2), is amended--
                    (A) in paragraph (22), by striking ``or'' at the 
                end;
                    (B) in paragraph (23), by striking the period at 
                the end and inserting ``; or''; and
                    (C) by inserting after paragraph (23) the following 
                new paragraph:
            ``(24) where such expenses are for renal dialysis services 
        (as defined in subparagraph (B) of section 1881(b)(14)) for 
        which payment is made under such section unless such payment is 
        made under such section to a provider of services or a renal 
        dialysis facility for such services.''.
            (3) Conforming amendments.--(A) Section 1881(b) of the 
        Social Security Act (42 U.S.C. 1395rr(b)) is amended--
                    (i) in paragraph (12)(A), by striking ``In lieu of 
                payment'' and inserting ``Subject to paragraph (14), in 
                lieu of payment'';
                    (ii) in the second sentence of paragraph (12)(F)--
                            (I) by inserting ``or paragraph (14)'' 
                        after ``this paragraph''; and
                            (II) by inserting ``or under the system 
                        under paragraph (14)'' after ``subparagraph 
                        (B)''; and
                    (iii) in paragraph (13)--
                            (I) in subparagraph (A), in the matter 
                        preceding clause (i), by striking ``The payment 
                        amounts'' and inserting ``Subject to paragraph 
                        (14), the payment amounts''; and
                            (II) in subparagraph (B)--
                                    (aa) in clause (i), by striking 
                                ``(i)'' after ``(B)'' and by inserting 
                                ``, subject to paragraph (14)'' before 
                                the period at the end; and
                                    (bb) by striking clause (ii).
            (B) Section 1861(s)(2)(F) of the Social Security Act (42 
        U.S.C. 1395x(s)(2)(F)) is amended by inserting ``, and, for 
        items and services furnished on or after January 1, 2011, renal 
        dialysis services (as defined in section 1881(b)(14)(B))'' 
        before the semicolon at the end.
            (C) Section 623(e) of the Medicare Prescription Drug, 
        Improvement, and Modernization Act of 2003 (42 U.S.C. 1395rr 
        note) is repealed.
            (4) Rule of construction.--Nothing in this subsection or 
        the amendments made by this subsection shall be construed as 
        authorizing or requiring the Secretary of Health and Human 
        Services to make payments under the payment system implemented 
        under paragraph (14)(A)(i) of section 1881(b) of the Social 
        Security Act (42 U.S.C. 1395rr(b)), as added by paragraph (1), 
        for any unrecovered amount for any bad debt attributable to 
        deductible and coinsurance on items and services not included 
        in the basic case-mix adjusted composite rate under paragraph 
        (12) of such section as in effect before the date of the 
        enactment of this Act.
    (c) Quality Incentives in the End-Stage Renal Disease Program.--
Section 1881 of the Social Security Act (42 U.S.C. 1395rr) is amended 
by adding at the end the following new subsection:
    ``(h) Quality Incentives in the End-Stage Renal Disease Program.--
            ``(1) Quality incentives.--
                    ``(A) In general.--With respect to renal dialysis 
                services (as defined in subsection (b)(14)(B)) 
                furnished on or after January 1, 2012, in the case of a 
                provider of services or a renal dialysis facility that 
                does not meet the requirement described in subparagraph 
                (B) with respect to the year, payments otherwise made 
                to such provider or facility under the system under 
                subsection (b)(14) for such services shall be reduced 
                by up to 2.0 percent, as determined appropriate by the 
                Secretary.
                    ``(B) Requirement.--The requirement described in 
                this subparagraph is that the provider or facility 
                meets (or exceeds) the total performance score under 
                paragraph (3) with respect to performance standards 
                established by the Secretary with respect to measures 
                specified in paragraph (2).
                    ``(C) No effect in subsequent years.--The reduction 
                under subparagraph (A) shall apply only with respect to 
                the year involved, and the Secretary shall not take 
                into account such reduction in computing the single 
                payment amount under the system under paragraph (14) in 
                a subsequent year.
            ``(2) Measures.--
                    ``(A) In general.--The measures specified under 
                this paragraph with respect to the year involved shall 
                include--
                            ``(i) measures on anemia management that 
                        reflect the labeling approved by the Food and 
                        Drug Administration for such management and 
                        measures on dialysis adequacy;
                            ``(ii) to the extent feasible, such measure 
                        (or measures) of patient satisfaction as the 
                        Secretary shall specify; and
                            ``(iii) such other measures as the 
                        Secretary specifies, including, to the extent 
                        feasible, measures on--
                                    ``(I) iron management;
                                    ``(II) bone mineral metabolism; and
                                    ``(III) vascular access, including 
                                for maximizing the placement of 
                                arterial venous fistula.
                    ``(B) Use of endorsed measures.--
                            ``(i) In general.--Subject to clause (ii), 
                        any measure specified by the Secretary under 
                        subparagraph (A)(iii) must have been endorsed 
                        by the entity with a contract under section 
                        1890(a).
                            ``(ii) Exception.--In the case of a 
                        specified area or medical topic determined 
                        appropriate by the Secretary for which a 
                        feasible and practical measure has not been 
                        endorsed by the entity with a contract under 
                        section 1890(a), the Secretary may specify a 
                        measure that is not so endorsed as long as due 
                        consideration is given to measures that have 
                        been endorsed or adopted by a consensus 
                        organization identified by the Secretary.
                    ``(C) Updating measures.--The Secretary shall 
                establish a process for updating the measures specified 
                under subparagraph (A) in consultation with interested 
                parties.
                    ``(D) Consideration.--In specifying measures under 
                subparagraph (A), the Secretary shall consider the 
                availability of measures that address the unique 
                treatment needs of children and young adults with 
                kidney failure.
            ``(3) Performance scores.--
                    ``(A) Total performance score.--
                            ``(i) In general.--Subject to clause (ii), 
                        the Secretary shall develop a methodology for 
                        assessing the total performance of each 
                        provider of services and renal dialysis 
                        facility based on performance standards with 
                        respect to the measures selected under 
                        paragraph (2) for a performance period 
                        established under paragraph (4)(D) (in this 
                        subsection referred to as the `total 
                        performance score').
                            ``(ii) Application.--For providers of 
                        services and renal dialysis facilities that do 
                        not meet (or exceed) the total performance 
                        score established by the Secretary, the 
                        Secretary shall ensure that the application of 
                        the methodology developed under clause (i) 
                        results in an appropriate distribution of 
                        reductions in payment under paragraph (1) among 
                        providers and facilities achieving different 
                        levels of total performance scores, with 
                        providers and facilities achieving the lowest 
                        total performance scores receiving the largest 
                        reduction in payment under paragraph (1)(A).
                            ``(iii) Weighting of measures.--In 
                        calculating the total performance score, the 
                        Secretary shall weight the scores with respect 
                        to individual measures calculated under 
                        subparagraph (B) to reflect priorities for 
                        quality improvement, such as weighting scores 
                        to ensure that providers of services and renal 
                        dialysis facilities have strong incentives to 
                        meet or exceed anemia management and dialysis 
                        adequacy performance standards, as determined 
                        appropriate by the Secretary.
                    ``(B) Performance score with respect to individual 
                measures.--The Secretary shall also calculate separate 
                performance scores for each measure, including for 
                dialysis adequacy and anemia management.
            ``(4) Performance standards.--
                    ``(A) Establishment.--Subject to subparagraph (E), 
                the Secretary shall establish performance standards 
                with respect to measures selected under paragraph (2) 
                for a performance period with respect to a year (as 
                established under subparagraph (D)).
                    ``(B) Achievement and improvement.--The performance 
                standards established under subparagraph (A) shall 
                include levels of achievement and improvement, as 
                determined appropriate by the Secretary.
                    ``(C) Timing.--The Secretary shall establish the 
                performance standards under subparagraph (A) prior to 
                the beginning of the performance period for the year 
                involved.
                    ``(D) Performance period.--The Secretary shall 
                establish the performance period with respect to a 
                year. Such performance period shall occur prior to the 
                beginning of such year.
                    ``(E) Special rule.--The Secretary shall initially 
                use as the performance standard for the measures 
                specified under paragraph (2)(A)(i) for a provider of 
                services or a renal dialysis facility the lesser of--
                            ``(i) the performance of such provider or 
                        facility for such measures in the year selected 
                        by the Secretary under the second sentence of 
                        subsection (b)(14)(A)(ii); or
                            ``(ii) a performance standard based on the 
                        national performance rates for such measures in 
                        a period determined by the Secretary.
            ``(5) Limitation on review.--There shall be no 
        administrative or judicial review under section 1869, section 
        1878, or otherwise of the following:
                    ``(A) The determination of the amount of the 
                payment reduction under paragraph (1).
                    ``(B) The establishment of the performance 
                standards and the performance period under paragraph 
                (4).
                    ``(C) The specification of measures under paragraph 
                (2).
                    ``(D) The methodology developed under paragraph (3) 
                that is used to calculate total performance scores and 
                performance scores for individual measures.
            ``(6) Public reporting.--
                    ``(A) In general.--The Secretary shall establish 
                procedures for making information regarding performance 
                under this subsection available to the public, 
                including--
                            ``(i) the total performance score achieved 
                        by the provider of services or renal dialysis 
                        facility under paragraph (3) and appropriate 
                        comparisons of providers of services and renal 
                        dialysis facilities to the national average 
                        with respect to such scores; and
                            ``(ii) the performance score achieved by 
                        the provider or facility with respect to 
                        individual measures.
                    ``(B) Opportunity to review.--The procedures 
                established under subparagraph (A) shall ensure that a 
                provider of services and a renal dialysis facility has 
                the opportunity to review the information that is to be 
                made public with respect to the provider or facility 
                prior to such data being made public.
                    ``(C) Certificates.--
                            ``(i) In general.--The Secretary shall 
                        provide certificates to providers of services 
                        and renal dialysis facilities who furnish renal 
                        dialysis services under this section to display 
                        in patient areas. The certificate shall 
                        indicate the total performance score achieved 
                        by the provider or facility under paragraph 
                        (3).
                            ``(ii) Display.--Each facility or provider 
                        receiving a certificate under clause (i) shall 
                        prominently display the certificate at the 
                        provider or facility.
                    ``(D) Web-based list.--The Secretary shall 
                establish a list of providers of services and renal 
                dialysis facilities who furnish renal dialysis services 
                under this section that indicates the total performance 
                score and the performance score for individual measures 
                achieved by the provider and facility under paragraph 
                (3). Such information shall be posted on the Internet 
                website of the Centers for Medicare & Medicaid Services 
                in an easily understandable format.''.
    (d) GAO Report on ESRD Bundling System and Quality Initiative.--Not 
later than March 1, 2013, the Comptroller General of the United States 
shall submit to Congress a report on the implementation of the payment 
system under subsection (b)(14) of section 1881 of the Social Security 
Act (as added by subsection (b)) for renal dialysis services and 
related services (defined in subparagraph (B) of such subsection 
(b)(14)) and the quality initiative under subsection (h) of such 
section 1881 (as added by subsection (b)). Such report shall include 
the following information:
            (1) The changes in utilization rates for erythropoiesis 
        stimulating agents.
            (2) The mode of administering such agents, including 
        information on the proportion of individuals receiving such 
        agents intravenously as compared to subcutaneously.
            (3) An analysis of the payment adjustment under 
        subparagraph (D)(iii) of such subsection (b)(14), including an 
        examination of the extent to which costs incurred by rural, 
        low-volume providers and facilities (as defined by the 
        Secretary) in furnishing renal dialysis services exceed the 
        costs incurred by other providers and facilities in furnishing 
        such services, and a recommendation regarding the 
        appropriateness of such adjustment.
            (4) The changes, if any, in utilization rates of drugs and 
        biologicals that the Secretary identifies under subparagraph 
        (B)(iii) of such subsection (b)(14), and any oral equivalent or 
        oral substitutable forms of such drugs and biologicals or of 
        drugs and biologicals described in clause (ii), that have 
        occurred after implementation of the payment system under such 
        subsection (b)(14).
            (5) Any other information or recommendations for 
        legislative and administrative actions determined appropriate 
        by the Comptroller General.

               Subtitle D--Provisions Relating to Part C

SEC. 161. PHASE-OUT OF INDIRECT MEDICAL EDUCATION (IME).

    (a) In General.--Section 1853(k) of the Social Security Act (42 
U.S.C. 1395w-23(k)) is amended--
            (1) in paragraph (1), in the matter preceding subparagraph 
        (A), by striking ``paragraph (2)'' and inserting ``paragraphs 
        (2) and (4)''; and
            (2) by adding at the end the following new paragraph:
            ``(4) Phase-out of the indirect costs of medical education 
        from capitation rates.--
                    ``(A) In general.--After determining the applicable 
                amount for an area for a year under paragraph (1) 
                (beginning with 2010), the Secretary shall adjust such 
                applicable amount to exclude from such applicable 
                amount the phase-in percentage (as defined in 
                subparagraph (B)(i)) for the year of the Secretary's 
                estimate of the standardized costs for payments under 
                section 1886(d)(5)(B) in the area for the year. Any 
                adjustment under the preceding sentence shall be made 
                prior to the application of paragraph (2).
                    ``(B) Percentages defined.--For purposes of this 
                paragraph:
                            ``(i) Phase-in percentage.--The term 
                        `phase-in percentage' means, for an area for a 
                        year, the ratio (expressed as a percentage, but 
                        in no case greater than 100 percent) of--
                                    ``(I) the maximum cumulative 
                                adjustment percentage for the year (as 
                                defined in clause (ii)); to
                                    ``(II) the standardized IME cost 
                                percentage (as defined in clause (iii)) 
                                for the area and year.
                            ``(ii) Maximum cumulative adjustment 
                        percentage.--The term `maximum cumulative 
                        adjustment percentage' means, for--
                                    ``(I) 2010, [0.65] percent; and
                                    ``(II) a subsequent year, the 
                                maximum cumulative adjustment 
                                percentage for the previous year 
                                increased by [0.65] percentage points.
                            ``(iii) Standardized ime cost percentage.--
                        The term `standardized IME cost percentage' 
                        means, for an area for a year, the per capita 
                        costs for payments under section 1886(d)(5)(B) 
                        (expressed as a percentage of the fee-for-
                        service amount specified in subparagraph (C)) 
                        for the area and the year.
                    ``(C) Fee-for-service amount.--The fee-for-service 
                amount specified in this subparagraph for an area for a 
                year is the amount specified under subsection (c)(1)(D) 
                for the area and the year.''.
    (b) Excluding Adjustment From the Update.--Section 1853(k)(1)(B)(i) 
of the Social Security Act (42 U.S.C. 1395w-23(k)(1)(B)(i)) is amended 
by striking ``paragraph (2)'' and inserting ``paragraphs (2) and (4)''.
    (c) Hold Harmless for PACE Program Payments.--Section 1894(d) of 
the Social Security Act (42 U.S.C. 1395eee(d)) is amended by adding at 
the end the following new paragraph:
            ``(3) Capitation rates determined without regard to the 
        phase-out of the indirect costs of medical education from the 
        annual medicare advantage capitation rate.--Capitation amounts 
        under this subsection shall be determined without regard to the 
        application of section 1853(k)(4).''.

SEC. 162. REVISIONS TO REQUIREMENTS FOR MEDICARE ADVANTAGE PRIVATE FEE-
              FOR-SERVICE PLANS.

    (a) Requirements To Assure Access to Network Coverage.--
            (1) Individual market.--Section 1852(d) of the Social 
        Security Act (42 U.S.C. 1395w-22(d)) is amended--
                    (A) in paragraph (4), in the second sentence, by 
                striking ``The Secretary'' and inserting ``Subject to 
                paragraph (5), the Secretary''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(5) Requirement of certain nonemployer medicare advantage 
        private fee-for-service plans to use contracts with 
        providers.--
                    ``(A) In general.--For plan year 2011 and 
                subsequent plan years, in the case of a Medicare 
                Advantage private fee-for-service plan not described in 
                paragraph (1) or (2) of section 1857(i) operating in a 
                network area (as defined in subparagraph (B)), the plan 
                shall meet the access standards under paragraph (4) in 
                that area only through entering into written contracts 
                as provided for under subparagraph (B) of such 
                paragraph and not, in whole or in part, through the 
                establishment of payment rates meeting the requirements 
                under subparagraph (A) of such paragraph.
                    ``(B) Network area defined.--For purposes of 
                subparagraph (A), the term `network area' means, for a 
                plan year, an area which the Secretary identifies (in 
                the Secretary's announcement of the proposed payment 
                rates for the previous plan year under section 
                1853(b)(1)(B)) as having at least 2 network-based plans 
                (as defined in subparagraph (C)) with enrollment under 
                this part as of the first day of the year in which such 
                announcement is made.
                    ``(C) Network-based plan defined.--
                            ``(i) In general.--For purposes of 
                        subparagraph (B), the term `network-based plan' 
                        means--
                                    ``(I) except as provided in clause 
                                (ii), a Medicare Advantage plan that is 
                                a coordinated care plan described in 
                                section 1851(a)(2)(A)(i);
                                    ``(II) a network-based MSA plan; 
                                and
                                    ``(III) a reasonable cost 
                                reimbursement plan under section 1876.
                            ``(ii) Exclusion of non-network regional 
                        ppos.--The term `network-based plan' shall not 
                        include an MA regional plan that, with respect 
                        to the area, meets access adequacy standards 
                        under this part substantially through the 
                        authority of section 422.112(a)(1)(ii) of title 
                        42, Code of Federal Regulations, rather than 
                        through written contracts.''.
            (2) Employer plans.--Section 1852(d) of the Social Security 
        Act (42 U.S.C. 1395w-22(d)), as amended by paragraph (1), is 
        amended--
                    (A) in paragraph (4), in the second sentence, by 
                striking ``paragraph (5)'' and inserting ``paragraphs 
                (5) and (6)''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(6) Requirement of all employer medicare advantage 
        private fee-for-service plans to use contracts with 
        providers.--For plan year 2011 and subsequent plan years, in 
        the case of a Medicare Advantage private fee-for-service plan 
        that is described in paragraph (1) or (2) of section 1857(i), 
        the plan shall meet the access standards under paragraph (4) 
        only through entering into written contracts as provided for 
        under subparagraph (B) of such paragraph and not, in whole or 
        in part, through the establishment of payment rates meeting the 
        requirements under subparagraph (A) of such paragraph.''.
            (3) Access requirements.--
                    (A) In general.--Section 1852(d)(4)(B) of the 
                Social Security Act (42 U.S.C. 1395w-22(d)(4)(B)) is 
                amended by striking ``a sufficient number'' through 
                ``terms of the plan'' and inserting ``a sufficient 
                number and range of providers within such category to 
                meet the access standards in subparagraphs (A) through 
                (E) of paragraph (1)''.
                    (B) Effective date.--The amendment made by 
                subparagraph (A) shall apply to plan year 2010 and 
                subsequent plan years.
    (b) Clarification Regarding Utilization.--Section 1859(b)(2) of the 
Social Security Act (42 U.S.C. 1395w-28(b)(2)) is amended by adding at 
the end the following flush sentence:
        ``Nothing in subparagraph (B) shall be construed to preclude a 
        plan from varying rates for such a provider based on the 
        specialty of the provider, the location of the provider, or 
        other factors related to such provider that are not related to 
        utilization, or to preclude a plan from increasing rates for 
        such a provider based on increased utilization of specified 
        preventive or screening services.''.

SEC. 163. REVISIONS TO QUALITY IMPROVEMENT PROGRAMS.

    (a) Requirement for MA Private Fee-for-Service and MSA Plans To 
Have a Quality Improvement Program.--
            (1) In general.--Section 1852(e)(1) of the Social Security 
        Act (42 U.S.C. 1395w-112(e)(1)) is amended by striking ``(other 
        than an MA private fee-for-service plan or an MSA plan)''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to plan years beginning on or after January 1, 
        2010.
    (b) Data Collection Requirements for MA Regional Plans, MA Private 
Fee-for-Service Plans, and MSA Plans.--
            (1) In general.--Section 1852(e)(3)(A) of the Social 
        Security Act (42 U.S.C. 1395w-22(e)(3)(A)) is amended--
                    (A) in clause (i), by adding at the end the 
                following new sentence: ``With respect to MA private 
                fee-for-service plans and MSA plans, such requirements 
                may not exceed the requirements under this subparagraph 
                with respect to MA local plans that are preferred 
                provider organization plans, except that the limitation 
                under clause (iii) shall not apply and such 
                requirements shall apply regardless of whether or not 
                the services are furnished by providers of services, 
                physicians, or other health care practitioners and 
                suppliers that have contracts with the organization 
                offering the MA private fee-for-service plan or the MSA 
                plan.''
                    (B) by striking clause (ii)--
                    (C) in clause (iii)--
                            (i) in the heading--
                                    (I) by inserting ``local'' after 
                                ``to''; and
                                    (II) by inserting ``and ma regional 
                                plans'' after ``organizations''; and
                            (ii) by inserting ``and to MA regional 
                        plans'' after ``organization plans''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall apply to plan years beginning on or after January 1, 
        2010.

SEC. 164. REVISIONS RELATING TO SPECIALIZED MEDICARE ADVANTAGE PLANS 
              FOR SPECIAL NEEDS INDIVIDUALS.

    (a) Extension of Authority To Restrict Enrollment.--Section 1859(f) 
of the Social Security Act (42 U.S.C. 1395w-28(f)), as amended by 
section 108(a) of the Medicare, Medicaid, and SCHIP Extension Act of 
2007 (Public Law 110-173) is amended by striking ``2010'' and inserting 
``2011''.
    (b) Moratorium on Authority To Designate Other Plans as Specialized 
MA Plans.--During the period beginning on January 1, 2010, and ending 
on December 31, 2010, the Secretary of Health and Human Services may 
not exercise the authority provided under section 231(d) of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(42 U.S.C. 1395w-21 note) to designate other plans as specialized MA 
plans for special needs individuals.
    (c) Requirements for Enrollment.--
            (1) In general.--Section 1859 of the Social Security Act 
        (42 U.S.C. 1395w-28) is amended--
                    (A) in subsection (b)(6)(A), by inserting ``and 
                that, as of January 1, 2010, meets the applicable 
                requirements of paragraph (2), (3), or (4) of 
                subsection (f), as the case may be'' before the period 
                at the end; and
                    (B) in subsection (f)--
                            (i) by amending the heading to read as 
                        follows: ``Requirements Regarding Enrollment in 
                        Specialized MA Plans for Special Needs 
                        Individuals'';
                            (ii) by designating the sentence beginning 
                        ``In the case of'' as paragraph (1) with the 
                        heading ``Requirements for enrollment.--'' and 
                        with appropriate indentation; and
                            (iii) by adding at the end the following 
                        new paragraphs:
            ``(2) Additional requirements for institutional snps.--In 
        the case of a specialized MA plan for special needs individuals 
        described in subsection (b)(6)(B)(i), the applicable 
        requirements described in this paragraph are as follows:
                    ``(A) Each individual that enrolls in the plan on 
                or after January 1, 2010, is a special needs 
                individuals described in subsection (b)(6)(B)(i). In 
                the case of an individual who is living in the 
                community but requires an institutional level of care, 
                such individual shall not be considered a special needs 
                individual described in subsection (b)(6)(B)(i) unless 
                the determination that the individual requires an 
                institutional level of care was made--
                            ``(i) using a State assessment tool of the 
                        State in which the individual resides; and
                            ``(ii) by an entity other than the 
                        organization offering the plan.
                    ``(B) The plan meets the requirements described in 
                paragraph (5).
            ``(3) Additional requirements for dual snps.--In the case 
        of a specialized MA plan for special needs individuals 
        described in subsection (b)(6)(B)(ii), the applicable 
        requirements described in this paragraph are as follows:
                    ``(A) Each individual that enrolls in the plan on 
                or after January 1, 2010, is a special needs 
                individuals described in subsection (b)(6)(B)(ii).
                    ``(B) The plan meets the requirements described in 
                paragraph (5).
                    ``(C) The plan provides each prospective enrollee, 
                prior to enrollment, with a comprehensive written 
                statement (using standardized content and format 
                established by the Secretary) that describes--
                            ``(i) the benefits and cost-sharing 
                        protections that the individual is entitled to 
                        under the State Medicaid program under title 
                        XIX; and
                            ``(ii) which of such benefits and cost-
                        sharing protections are covered under the plan.
                Such statement shall be included with any description 
                of benefits offered by the plan.
                    ``(D) The plan has a contract with the State 
                Medicaid agency to provide benefits, or arrange for 
                benefits to be provided, for which such individual is 
                entitled to receive as medical assistance under title 
                XIX. Such benefits may include long-term care services 
                consistent with State policy.
            ``(4) Additional requirements for severe or disabling 
        chronic condition snps.--In the case of a specialized MA plan 
        for special needs individuals described in subsection 
        (b)(6)(B)(iii), the applicable requirements described in this 
        paragraph are as follows:
                    ``(A) Each individual that enrolls in the plan on 
                or after January 1, 2010, is a special needs individual 
                described in subsection (b)(6)(B)(iii).
                    ``(B) The plan meets the requirements described in 
                paragraph (5).''.
            (2) Authority to operate but no service area expansion for 
        dual snps that do not meet certain requirements.--
        Notwithstanding subsection (f) of section 1859 of the Social 
        Security Act (42 U.S.C. 1395w-28), during the period beginning 
        on January 1, 2010, and ending on December 31, 2010, in the 
        case of a specialized Medicare Advantage plan for special needs 
        individuals described in subsection (b)(6)(B)(ii) of such 
        section, as amended by this section, that does not meet the 
        requirement described in subsection (f)(3)(D) of such section, 
        the Secretary of Health and Human Services--
                    (A) shall permit such plan to be offered under part 
                C of title XVIII of such Act; and
                    (B) shall not permit an expansion of the service 
                area of the plan under such part C.
            (3) Resources for state medicaid agencies.--The Secretary 
        of Health and Human Services shall provide for the designation 
        of appropriate staff and resources that can address State 
        inquiries with respect to the coordination of State and Federal 
        policies for specialized MA plans for special needs individuals 
        described in section 1859(b)(6)(B)(ii) of the Social Security 
        Act (42 U.S.C. 1395w-28(b)(6)(B)(ii)), as amended by this 
        section.
            (4) No requirement for contract.--Nothing in the provisions 
        of, or amendments made by, this subsection shall require a 
        State to enter into a contract with a Medicare Advantage 
        organization with respect to a specialized MA plan for special 
        needs individuals described in section 1859(b)(6)(B)(ii) of the 
        Social Security Act (42 U.S.C. 1395w-28(b)(6)(B)(ii)), as 
        amended by this section.
    (d) Care Management Requirements for All SNPs.--
            (1) Requirements.--Section 1859(f) of the Social Security 
        Act (42 U.S.C. 1395w-28(f)), as amended by subsection (c)(1), 
        is amended by adding at the end the following new paragraph:
            ``(5) Care management requirements for all snps.--The 
        requirements described in this paragraph are that the 
        organization offering a specialized MA plan for special needs 
        individuals described in subsection (b)(6)(B)(i)--
                    ``(A) have in place an evidenced-based model of 
                care with appropriate networks of providers and 
                specialists; and
                    ``(B) with respect to each individual enrolled in 
                the plan--
                            ``(i) conduct an initial assessment and an 
                        annual reassessment of the individual's 
                        physical, psychosocial, and functional needs;
                            ``(ii) develop a plan, in consultation with 
                        the individual as feasible, that identifies 
                        goals and objectives, including measurable 
                        outcomes as well as specific services and 
                        benefits to be provided; and
                            ``(iii) use an interdisciplinary team in 
                        the management of care.''.
            (2) Review to ensure compliance with care management 
        requirements.--Section 1857(d) of the Social Security Act (42 
        U.S.C. 1395w-27(d)) is amended by adding at the end the 
        following new paragraph:
            ``(6) Review to ensure compliance with care management 
        requirements for specialized medicare advantage plans for 
        special needs individuals.--In conjunction with the periodic 
        audit of a specialized Medicare Advantage plan for special 
        needs individuals under paragraph (1), the Secretary shall 
        conduct a review to ensure that such organization offering the 
        plan meets the requirements described in section 1859(f)(5).''.
    (e) Clarification of the Definition of a Severe or Disabling 
Chronic Conditions Specialized Needs Individual.--
            (1) In general.--Section 1859(b)(6)(B)(iii) of the Social 
        Security Act (42 U.S.C. 1395w-28(b)(6)(B)(iii)) is amended by 
        inserting ``who have one or more comorbid and medically complex 
        chronic conditions that are substantially disabling or life 
        threatening, have a high risk of hospitalization or other 
        significant adverse health outcomes, and require specialized 
        delivery systems across domains of care'' before the period at 
        the end.
            (2) Panel.--The Secretary of Health and Human Services 
        shall convene a panel of clinical advisors to determine the 
        conditions that meet the definition of severe and disabling 
        chronic conditions under section 1859(b)(6)(B)(iii) of the 
        Social Security Act (42 U.S.C. 1395w-28(b)(6)(B)(iii)), as 
        amended by paragraph (1). The panel shall include the Director 
        of the Agency for Healthcare Research and Quality (or the 
        Director's designee).
    (f) Special Requirements Regarding Quality Reporting for 
Specialized MA Plans for Special Needs Individuals.--
            (1) In general.--Section 1852(e)(3)(A) of the Social 
        Security Act (42 U.S.C. 1395w-22(e)(3)(A)), as amended by 
        section 163, is amended by inserting after clause (i) the 
        following new clause:
                            ``(ii) Special requirements for specialized 
                        ma plans for special needs individuals.--In 
                        addition to the data required to be collected, 
                        analyzed, and reported under clause (i) and 
                        notwithstanding the limitations under 
                        subparagraph (B), as part of the quality 
                        improvement program under paragraph (1), each 
                        MA organization offering a specialized Medicare 
                        Advantage plan for special needs individuals 
                        shall provide for the collection, analysis, and 
                        reporting of data that permits the measurement 
                        of health outcomes and other indices of quality 
                        with respect to the requirements described in 
                        paragraphs (2) through (5) of subsection (f). 
                        Such data may be based on claims data and shall 
                        be at the plan level.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect on a date specified by the Secretary of 
        Health and Human Services (but in no case later than January 1, 
        2010), and shall apply to all specialized Medicare Advantage 
        plans for special needs individuals regardless of when the plan 
        first entered the Medicare Advantage program under part C of 
        title XVIII of the Social Security Act.
    (g) Effective Date and Application.--The amendments made by 
subsections (c)(1), (d), and (e)(1) shall apply to plan years beginning 
on or after January 1, 2010, and shall apply to all specialized 
Medicare Advantage plans for special needs individuals regardless of 
when the plan first entered the Medicare Advantage program under part C 
of title XVIII of the Social Security Act.
    (h) No Affect on Medicaid Benefits for Duals.--Nothing in the 
provisions of, or amendments made by, this section shall affect the 
benefits available under the Medicaid program under title XIX of the 
Social Security Act for special needs individuals described in section 
1859(b)(6)(B)(ii) of such Act (42 U.S.C. 1395w-28(b)(6)(B)(ii)).

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.

    (a) In General.--Section 1852(a) of the Social Security Act (42 
U.S.C. 1395w-22(a)) is amended by adding at the end the following new 
paragraph:
            ``(7) Limitation on cost-sharing for dual eligibles and 
        qualified medicare beneficiaries.--In the case of an individual 
        who is a full-benefit dual eligible individual (as defined in 
        section 1935(c)(6)) or a qualified medicare beneficiary (as 
        defined in section 1905(p)(1)) and who is enrolled in a 
        specialized Medicare Advantage plan for special needs 
        individuals described in section 1859(b)(6)(B)(ii), the plan 
        may not impose cost-sharing that exceeds the amount of cost-
        sharing that would be permitted with respect to the individual 
        under title XIX if the individual were not enrolled in such 
        plan.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to plan years beginning on or after January 1, 2010.

SEC. 166. ADJUSTMENT TO THE MEDICARE ADVANTAGE STABILIZATION FUND.

    Section 1858(e)(2)(A)(i) of the Social Security Act (42 U.S.C. 
1395w-27a(e)(2)(A)(i)), as amended by section 110 of the Medicare, 
Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-173), is 
amended--
            (1) by striking ``2013'' and inserting ``2014''; and
            (2) by striking ``$1,790,000,000'' and inserting ``$1''.

SEC. 167. ACCESS TO MEDICARE REASONABLE COST CONTRACT PLANS.

    (a) Extension of Reasonable Cost Contracts.--Section 
1876(h)(5)(C)(ii) of the Social Security Act (42 U.S.C. 
1395mm(h)(5)(C)(ii)), as amended by section 109 of the Medicare, 
Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-173), is 
amended by striking ``January 1, 2009'' and inserting ``January 1, 
2010'' in the matter preceding subclause (I).
    (b) Requirement for at Least Two Medicare Advantage Organizations 
To Be Offering a Plan in an Area for the Prohibition To Be 
Applicable.--Subclauses (I) and (II) of section 1876(h)(5)(C)(ii) of 
the Social Security Act (42 U.S.C. 1395mm(h)(5)(C)(ii)) are each 
amended by inserting ``, provided that all such plans are not offered 
by the same Medicare Advantage organization'' after ``clause (iii)''.
    (c) Revision of Requirements for a Plan That Are Used To Determine 
if Prohibition Is Applicable.--
            (1) In general.--Section 1876(h)(5)(C)(iii)(I) of the 
        Social Security Act (42 U.S.C. 1395mm(h)(5)(C)(iii)(I)) is 
        amended by inserting ``that are not in another Metropolitan 
        Statistical Area with a population of more than 250,000'' after 
        ``such Metropolitan Statistical Area''.
            (2) Clarification.--Section 1876(h)(5)(C)(iii)(I) of the 
        Social Security Act (42 U.S.C. 1395mm(h)(5)(C)(iii)(I)) is 
        amended by adding at the end the following new sentence: ``If 
        the service area includes a portion in more than 1 Metropolitan 
        Statistical Area with a population of more than 250,000, the 
        minimum enrollment determination under the preceding sentence 
        shall be made with respect to each such Metropolitan 
        Statistical Area (and such applicable contiguous counties to 
        such Metropolitan Statistical Area).''.
    (d) GAO Study and Report.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct a study of the reasons (if any) why reasonable 
        cost contracts under section 1876(h) of the Social Security Act 
        (42 U.S.C. 1395mm(h)) are unable to become Medicare Advantage 
        plans under part C of title XVIII of such Act.
            (2) Report.--Not later than December 31, 2009, the 
        Comptroller General of the United States shall submit to 
        Congress a report containing the results of the study conducted 
        under paragraph (1), together with recommendations for such 
        legislation and administrative action as the Comptroller 
        General determines appropriate.

SEC. 168. MEDPAC STUDY AND REPORT ON QUALITY MEASURES.

    (a) Study.--The Medicare Payment Advisory Commission shall conduct 
a study on how comparable measures of performance and patient 
experience can be collected and reported by 2011 for the Medicare 
Advantage program under part C of title XVIII of the Social Security 
Act and the original Medicare fee-for-service program under parts A and 
B of such title. Such study shall address technical issues, such as 
data requirements, in addition to issues relating to appropriate 
quality benchmarks that--
            (1) compare the quality of care Medicare beneficiaries 
        receive across Medicare Advantage plans; and
            (2) compare the quality of care Medicare beneficiaries 
        receive under Medicare Advantage plans and under the original 
        Medicare fee-for-service program.
    (b) Report.--Not later than March 31, 2010, the Medicare Payment 
Advisory Commission shall submit to Congress a report containing the 
results of the study conducted under subsection (a), together with 
recommendations for such legislation and administrative action as the 
Medicare Payment Advisory Commission determines appropriate.

SEC. 169. MEDPAC STUDY AND REPORT ON MEDICARE ADVANTAGE PAYMENTS.

    (a) Study.--The Medicare Payment Advisory Commission (in this 
section referred to as the ``Commission'') shall conduct a study of the 
following:
            (1) The correlation between--
                    (A) the costs that Medicare Advantage organizations 
                with respect to Medicare Advantage plans incur in 
                providing coverage under the plan for items and 
                services covered under the original Medicare fee-for-
                service program under parts A and B of title XVIII of 
                the Social Security Act, as reflected in plan bids; and
                    (B) county-level spending under such original 
                Medicare fee-for-service program on a per capita basis, 
                as calculated by the Chief Actuary of the Centers for 
                Medicare & Medicaid Services.
        The study with respect to the issue described in the preceding 
        sentence shall include differences in correlation statistics by 
        plan type and geographic area.
            (2) Based on these results of the study with respect to the 
        issue described in paragraph (1), and other data the Commission 
        determines appropriate--
                    (A) alternate approaches to payment with respect to 
                a Medicare beneficiary enrolled in a Medicare Advantage 
                plan other than through county-level payment area 
                equivalents.
                    (B) the accuracy and completeness of county-level 
                estimates of per capita spending under such original 
                Medicare fee-for-service program (including counties in 
                Puerto Rico), as used to determine the annual Medicare 
                Advantage capitation rate under section 1853 of the 
                Social Security Act (42 U.S.C. 1395w-23), and whether 
                such estimates include--
                            (i) expenditures with respect to Medicare 
                        beneficiaries at facilities of the Department 
                        of Veterans Affairs; and
                            (ii) all appropriate administrative 
                        expenses, including claims processing.
            (3) Ways to improve the accuracy and completeness of 
        county-level estimates of per capita spending described in 
        paragraph (2)(B).
    (b) Report.--Not later than March 31, 2010, the Commission shall 
submit to Congress a report containing the results of the study 
conducted under subsection (a), together with recommendations for such 
legislation and administrative action as the Commission determines 
appropriate.

               Subtitle E--Provisions Relating to Part D

                   PART I--IMPROVING PHARMACY ACCESS

SEC. 171. PROMPT PAYMENT BY PRESCRIPTION DRUG PLANS AND MA-PD PLANS 
              UNDER PART D.

    (a) Prompt Payment by Prescription Drug Plans.--Section 1860D-12(b) 
of the Social Security Act (42 U.S.C. 1395w-112(b)) is amended by 
adding at the end the following new paragraph:
            ``(4) Prompt payment of clean claims.--
                    ``(A) Prompt payment.--
                            ``(i) In general.--Each contract entered 
                        into with a PDP sponsor under this part with 
                        respect to a prescription drug plan offered by 
                        such sponsor shall provide that payment shall 
                        be issued, mailed, or otherwise transmitted 
                        with respect to all clean claims submitted by 
                        pharmacies (other than pharmacies that dispense 
                        drugs by mail order only or are located in, or 
                        contract with, a long-term care facility) under 
                        this part within the applicable number of 
                        calendar days after the date on which the claim 
                        is received.
                            ``(ii) Clean claim defined.--In this 
                        paragraph, the term `clean claim' means a claim 
                        that has no defect or impropriety (including 
                        any lack of any required substantiating 
                        documentation) or particular circumstance 
                        requiring special treatment that prevents 
                        timely payment from being made on the claim 
                        under this part.
                            ``(iii) Date of receipt of claim.--In this 
                        paragraph, a claim is considered to have been 
                        received--
                                    ``(I) with respect to claims 
                                submitted electronically, on the date 
                                on which the claim is transferred; and
                                    ``(II) with respect to claims 
                                submitted otherwise, on the 5th day 
                                after the postmark date of the claim or 
                                the date specified in the time stamp of 
                                the transmission.
                    ``(B) Applicable number of calendar days defined.--
                In this paragraph, the term `applicable number of 
                calendar days' means--
                            ``(i) with respect to claims submitted 
                        electronically, 14 days; and
                            ``(ii) with respect to claims submitted 
                        otherwise, 30 days.
                    ``(C) Interest payment.--
                            ``(i) In general.--Subject to clause (ii), 
                        if payment is not issued, mailed, or otherwise 
                        transmitted within the applicable number of 
                        calendar days (as defined in subparagraph (B)) 
                        after a clean claim is received, the PDP 
                        sponsor shall pay interest to the pharmacy that 
                        submitted the claim at a rate equal to the 
                        weighted average of interest on 3-month 
                        marketable Treasury securities determined for 
                        such period, increased by 0.1 percentage point 
                        for the period beginning on the day after the 
                        required payment date and ending on the date on 
                        which payment is made (as determined under 
                        subparagraph (D)(iv)). Interest amounts paid 
                        under this subparagraph shall not be counted 
                        against the administrative costs of a 
                        prescription drug plan or treated as allowable 
                        risk corridor costs under section 1860D-15(e).
                            ``(ii) Authority not to charge interest.--
                        The Secretary may provide that a PDP sponsor is 
                        not charged interest under clause (i) in the 
                        case where there are exigent circumstances, 
                        including natural disasters and other unique 
                        and unexpected events, that prevent the timely 
                        processing of claims.
                    ``(D) Procedures involving claims.--
                            ``(i) Claim deemed to be clean.--A claim is 
                        deemed to be a clean claim if the PDP sponsor 
                        involved does not provide notice to the 
                        claimant of any deficiency in the claim--
                                    ``(I) with respect to claims 
                                submitted electronically, within 10 
                                days after the date on which the claim 
                                is received; and
                                    ``(II) with respect to claims 
                                submitted otherwise, within 15 days 
                                after the date on which the claim is 
                                received.
                            ``(ii) Claim determined to not be a clean 
                        claim.--
                                    ``(I) In general.--If a PDP sponsor 
                                determines that a submitted claim is 
                                not a clean claim, the PDP sponsor 
                                shall, not later than the end of the 
                                period described in clause (i), notify 
                                the claimant of such determination. 
                                Such notification shall specify all 
                                defects or improprieties in the claim 
                                and shall list all additional 
                                information or documents necessary for 
                                the proper processing and payment of 
                                the claim.
                                    ``(II) Determination after 
                                submission of additional information.--
                                A claim is deemed to be a clean claim 
                                under this paragraph if the PDP sponsor 
                                involved does not provide notice to the 
                                claimant of any defect or impropriety 
                                in the claim within 10 days of the date 
                                on which additional information is 
                                received under subclause (I).
                            ``(iii) Obligation to pay.--A claim 
                        submitted to a PDP sponsor that is not paid or 
                        contested by the sponsor within the applicable 
                        number of days (as defined in subparagraph (B)) 
                        after the date on which the claim is received 
                        shall be deemed to be a clean claim and shall 
                        be paid by the PDP sponsor in accordance with 
                        subparagraph (A).
                            ``(iv) Date of payment of claim.--Payment 
                        of a clean claim under such subparagraph is 
                        considered to have been made on the date on 
                        which--
                                    ``(I) with respect to claims paid 
                                electronically, the payment is 
                                transferred; and
                                    ``(II) with respect to claims paid 
                                otherwise, the payment is submitted to 
                                the United States Postal Service or 
                                common carrier for delivery.
                    ``(E) Electronic transfer of funds.--A PDP sponsor 
                shall pay all clean claims submitted electronically by 
                electronic transfer of funds if the pharmacy so 
                requests or has so requested previously. In the case 
                where such payment is made electronically, remittance 
                may be made by the PDP sponsor electronically as well.
                    ``(F) Protecting the rights of claimants.--
                            ``(i) In general.--Nothing in this 
                        paragraph shall be construed to prohibit or 
                        limit a claim or action not covered by the 
                        subject matter of this section that any 
                        individual or organization has against a 
                        provider or a PDP sponsor.
                            ``(ii) Anti-retaliation.--Consistent with 
                        applicable Federal or State law, a PDP sponsor 
                        shall not retaliate against an individual or 
                        provider for exercising a right of action under 
                        this subparagraph.
                    ``(G) Rule of construction.--A determination under 
                this paragraph that a claim submitted by a pharmacy is 
                a clean claim shall not be construed as a positive 
                determination regarding eligibility for payment under 
                this title, nor is it an indication of government 
                approval of, or acquiescence regarding, the claim 
                submitted. The determination shall not relieve any 
                party of civil or criminal liability with respect to 
                the claim, nor does it offer a defense to any 
                administrative, civil, or criminal action with respect 
                to the claim.''.
    (b) Prompt Payment by MA-PD Plans.--Section 1857(f) of the Social 
Security Act (42 U.S.C. 1395w-27) is amended by adding at the end the 
following new paragraph:
            ``(3) Incorporation of certain prescription drug plan 
        contract requirements.--The following provisions shall apply to 
        contracts with a Medicare Advantage organization offering an 
        MA-PD plan in the same manner as they apply to contracts with a 
        PDP sponsor offering a prescription drug plan under part D:
                    ``(A) Prompt payment.--Section 1860D-12(b)(4).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to plan years beginning on or after January 1, 2010.

SEC. 172. SUBMISSION OF CLAIMS BY PHARMACIES LOCATED IN OR CONTRACTING 
              WITH LONG-TERM CARE FACILITIES.

    (a) Submission of Claims by Pharmacies Located in or Contracting 
With Long-Term Care Facilities.--
            (1) Submission of claims to prescription drug plans.--
        Section 1860D-12(b) of the Social Security Act (42 U.S.C. 
        1395w-112(b)), as amended by section 171(a), is amended by 
        adding at the end the following new paragraph:
            ``(5) Submission of claims by pharmacies located in or 
        contracting with long-term care facilities.--Each contract 
        entered into with a PDP sponsor under this part with respect to 
        a prescription drug plan offered by such sponsor shall provide 
        that a pharmacy located in, or having a contract with, a long-
        term care facility shall have not less than 30 days (but not 
        more than 90 days) to submit claims to the sponsor for 
        reimbursement under the plan.''.
            (2) Submission of claims to ma-pd plans.--Section 
        1857(f)(3) of the Social Security Act, as added by section 
        171(b), is amended by adding at the end the following new 
        subparagraph:
                    ``(B) Submission of claims by pharmacies located in 
                or contracting with long-term care facilities.--Section 
                1860D-12(b)(5).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to plan years beginning on or after January 1, 2010.

SEC. 173. REGULAR UPDATE OF PRESCRIPTION DRUG PRICING STANDARD.

    (a) Requirement for Prescription Drug Plans.--Section 1860D-12(b) 
of the Social Security Act (42 U.S.C. 1395w-112(b)), as amended by 
section 172(a)(1), is amended by adding at the end the following new 
paragraph:
            ``(6) Regular update of prescription drug pricing 
        standard.--If the PDP sponsor of a prescription drug plan uses 
        a standard for reimbursement of pharmacies based on the cost of 
        a drug, each contract entered into with such sponsor under this 
        part with respect to the plan shall provide that the sponsor 
        shall update such standard not less frequently than once every 
        7 days, beginning with an initial update on January 1 of each 
        year, to accurately reflect the market price of acquiring the 
        drug.''.
    (b) Requirement for MA-PD Plans.--Section 1857(f)(3) of the Social 
Security Act, as amended by section 172(a)(2), is amended by adding at 
the end the following new subparagraph:
                    ``(C) Regular update of prescription drug pricing 
                standard.--Section 1860D-12(b)(6).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to plan years beginning on or after January 1, 2009.

                       PART II--OTHER PROVISIONS

SEC. 175. INCLUSION OF BARBITURATES AND BENZODIAZEPINES AS COVERED PART 
              D DRUGS.

    (a) In General.--Section 1860D-2(e)(2)(A) of the Social Security 
Act (42 U.S.C. 1395w-102(e)(2)(A)) is amended by inserting after 
``agents),'' the following ``other than subparagraph (I) of such 
section (relating to barbiturates) if the barbiturate is used in the 
treatment of epilepsy, cancer, or a chronic mental health disorder, and 
other than subparagraph (J) of such section (relating to 
benzodiazepines),''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to prescriptions dispensed on or after January 1, 2012.

SEC. 176. FORMULARY REQUIREMENTS WITH RESPECT TO CERTAIN CATEGORIES OR 
              CLASSES OF DRUGS.

    Section 1860D-4(b)(3) of the Social Security Act (42 U.S.C. 1395w-
104(b)(3)) is amended--
            (1) in subparagraph (C)(i), by striking ``The formulary'' 
        and inserting ``Subject to subparagraph (G), the formulary''; 
        and
            (2) by inserting after subparagraph (F) the following new 
        subparagraph:
                    ``(G) Required inclusion of drugs in certain 
                categories and classes.--
                            ``(i) Identification of drugs in certain 
                        categories and classes.--Beginning with plan 
                        year 2010, the Secretary shall identify, as 
                        appropriate, categories and classes of drugs 
                        for which both of the following criteria are 
                        met:
                                    ``(I) Restricted access to drugs in 
                                the category or class would have major 
                                or life threatening clinical 
                                consequences for individuals who have a 
                                disease or disorder treated by the 
                                drugs in such category or class.
                                    ``(II) There is significant 
                                clinical need for such individuals to 
                                have access to multiple drugs within a 
                                category or class due to unique 
                                chemical actions and pharmacological 
                                effects of the drugs within the 
                                category or class, such as drugs used 
                                in the treatment of cancer.
                            ``(ii) Formulary requirements.--Subject to 
                        clause (iii), PDP sponsors offering 
                        prescription drug plans shall be required to 
                        include all covered part D drugs in the 
                        categories and classes identified by the 
                        Secretary under clause (i).
                            ``(iii) Exceptions.--The Secretary may 
                        establish exceptions that permits a PDP sponsor 
                        of a prescription drug plan to exclude from its 
                        formulary a particular covered part D drug in a 
                        category or class that is otherwise required to 
                        be included in the formulary under clause (ii) 
                        (or to otherwise limit access to such a drug). 
                        Any exceptions established under the preceding 
                        sentence shall be provided under a process 
                        that--
                                    ``(I) ensures that any exception to 
                                such requirement is based upon 
                                scientific evidence and medical 
                                standards of practice; and
                                    ``(II) includes a public notice and 
                                comment period.''.

                      Subtitle F--Other Provisions

SEC. 181. USE OF PART D DATA.

    Section 1860D-12(b)(3)(D) of the Social Security Act (42 U.S.C. 
1395w-112(b)(3)(D)) is amended by adding at the end the following 
sentence: ``Notwithstanding any other provision of law, information 
provided to the Secretary under the application of section 1857(e)(1) 
to contracts under this section under the preceding sentence may be 
used for the purposes of carrying out this part, improving public 
health through research on the utilization, safety, effectiveness, 
quality, and efficiency of health care services (as the Secretary 
determines appropriate), and conducting Congressional oversight, 
monitoring, and analysis of the program under this title.''.

SEC. 182. REVISION OF DEFINITION OF MEDICALLY ACCEPTED INDICATION FOR 
              DRUGS.

    (a) Revision of Definition for Part D Drugs.--
            (1) In general.--Section 1860D-2(e)(1) of the Social 
        Security Act (42 U.S.C. 1395w-102(e)(1)) is amended, in the 
        matter following subparagraph (B)--
                    (A) by striking ``(as defined in section 
                1927(k)(6))'' and inserting ``(as defined in paragraph 
                (4))''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(4) Medically accepted indication defined.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the term `medically accepted indication' has the 
                meaning given that term--
                            ``(i) in the case of a covered part D drug 
                        used in an anticancer chemotherapeutic regimen, 
                        in section 1861(t)(2)(B), except that in 
                        applying such section--
                                    ``(I) `prescription drug plan or 
                                MA-PD plan' shall be substituted for 
                                `carrier' each place it appears; and
                                    ``(II) subject to subparagraph (B), 
                                the compendia described in section 
                                1927(g)(1)(B)(i)(III) shall be included 
                                in the list of compendia described in 
                                clause (ii)(I) section 1861(t)(2)(B); 
                                and
                            ``(ii) in the case of any other covered 
                        part D drug, in section 1927(k)(6).
                    ``(B) Conflict of interest.--On and after January 
                1, 2010, subparagraph (A)(i)(II) shall not apply unless 
                the compendia described in section 
                1927(g)(1)(B)(i)(III) meets the requirement in the 
                third sentence of section 1861(t)(2)(B).
                    ``(C) Update.--For purposes of applying 
                subparagraph (A)(ii), the Secretary shall revise the 
                list of compendia described in section 1927(g)(1)(B)(i) 
                as is appropriate for identifying medically accepted 
                indications for drugs. Any such revision shall be done 
                in a manner consistent with the process for revising 
                compendia under section 1861(t)(2)(B).''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to plan years beginning on or after January 1, 
        2009.
    (b) Conflicts of Interest.--Section 1861(t)(2)(B) of the Social 
Security Act (42 U.S.C. 1395x(t)(2)(B)) is amended by adding at the end 
the following new sentence: ``On and after January 1, 2010, no 
compendia may be included on the list of compendia under this 
subparagraph unless the compendia has a publicly transparent process 
for evaluating therapies and for identifying potential conflicts of 
interests.''.

SEC. 183. CONTRACT WITH A CONSENSUS-BASED ENTITY REGARDING PERFORMANCE 
              MEASUREMENT.

    (a) Contract.--
            (1) In general.--Part E of title XVIII of the Social 
        Security Act (42 U.S.C. 1395x et seq.) is amended by inserting 
        after section 1889 the following new section:

    ``contract with a consensus-based entity regarding performance 
                              measurement

    ``Sec. 1890.  (a) Contract.--
            ``(1) In general.--For purposes of activities conducted 
        under this Act, the Secretary shall identify and have in effect 
        a contract with a consensus-based entity, such as the National 
        Quality Forum, that meets the requirements described in 
        subsection (c). Such contract shall provide that the entity 
        will perform the duties described in subsection (b).
            ``(2) Timing for first contract.--As soon as practicable 
        after the date of the enactment of this subsection, the 
        Secretary shall enter into the first contract under paragraph 
        (1).
            ``(3) Period of contract.--A contract under paragraph (1) 
        shall be for a period of 4 years (except as may be renewed 
        after a subsequent bidding process).
            ``(4) Competitive procedures.--Competitive procedures (as 
        defined in section 4(5) of the Office of Federal Procurement 
        Policy Act (41 U.S.C. 403(5))) shall be used to enter into a 
        contract under paragraph (1).
    ``(b) Duties.--The duties described in this subsection are the 
following:
            ``(1) Priority setting process.--The entity shall 
        synthesize evidence and convene key stakeholders to make 
        recommendations, with respect to activities conducted under 
        this Act, on an integrated national strategy and priorities for 
        health care performance measurement in all applicable settings. 
        In making such recommendations, the entity shall--
                    ``(A) ensure that priority is given to measures--
                            ``(i) that address the health care provided 
                        to patients with prevalent, high-cost chronic 
                        diseases;
                            ``(ii) with the greatest potential for 
                        improving the quality, efficiency, and patient-
                        centeredness of health care; and
                            ``(iii) that may be implemented rapidly due 
                        to existing evidence, standards of care, or 
                        other reasons; and
                    ``(B) take into account measures that--
                            ``(i) may assist consumers and patients in 
                        making informed health care decisions;
                            ``(ii) address health disparities across 
                        groups and areas; and
                            ``(iii) address the continuum of care a 
                        patient receives, including services furnished 
                        by multiple health care providers or 
                        practitioners and across multiple settings.
            ``(2) Endorsement of measures.--The entity shall provide 
        for the endorsement of standardized health care performance 
        measures. The endorsement process under the preceding sentence 
        shall consider whether a measure--
                    ``(A) is evidence-based, reliable, valid, 
                verifiable, relevant to enhanced health outcomes, 
                actionable at the caregiver level, feasible to collect 
                and report, and responsive to variations in patient 
                characteristics, such as health status, language 
                capabilities, race or ethnicity, and income level; and
                    ``(B) is consistent across types of health care 
                providers, including hospitals and physicians.
            ``(3) Maintenance of measures.--The entity shall establish 
        and implement a process to ensure that measures endorsed under 
        paragraph (2) are updated (or retired if obsolete) as new 
        evidence is developed.
            ``(4) Promotion of the development of electronic health 
        records.--The entity shall promote the development and use of 
        electronic health records that contain the functionality for 
        automated collection, aggregation, and transmission of 
        performance measurement information.
            ``(5) Annual report to congress and the secretary; 
        secretarial publication and comment.--
                    ``(A) Annual report.--By not later than March 1 of 
                each year (beginning with 2009), the entity shall 
                submit to Congress and the Secretary a report 
                containing a description of--
                            ``(i) the implementation of quality 
                        measurement initiatives under this Act and the 
                        coordination of such initiatives with quality 
                        initiatives implemented by other payers;
                            ``(ii) the recommendations made under 
                        paragraph (1); and
                            ``(iii) the performance by the entity of 
                        the duties required under the contract entered 
                        into with the Secretary under subsection (a).
                    ``(B) Secretarial review and publication of annual 
                report.--Not later than 6 months after receiving a 
                report under subparagraph (A) for a year, the Secretary 
                shall--
                            ``(i) review such report; and
                            ``(ii) publish such report in the Federal 
                        Register, together with any comments of the 
                        Secretary on such report.
    ``(c) Requirements Described.--The requirements described in this 
subsection are the following:
            ``(1) Private nonprofit.--The entity is a private nonprofit 
        entity governed by a board.
            ``(2) Board membership.--The members of the board of the 
        entity include--
                    ``(A) representatives of health plans and health 
                care providers and practitioners or representatives of 
                groups representing such health plans and health care 
                providers and practitioners;
                    ``(B) health care consumers or representatives of 
                groups representing health care consumers; and
                    ``(C) representatives of purchasers and employers 
                or representatives of groups representing purchasers or 
                employers.
            ``(3) Entity membership.--The membership of the entity 
        includes persons who have experience with--
                    ``(A) urban health care issues;
                    ``(B) safety net health care issues;
                    ``(C) rural and frontier health care issues; and
                    ``(D) health care quality and safety issues.
            ``(4) Open and transparent.--With respect to matters 
        related to the contract with the Secretary under subsection 
        (a), the entity conducts its business in an open and 
        transparent manner and provides the opportunity for public 
        comment on its activities.
            ``(5) Voluntary consensus standards setting organization.--
        The entity operates as a voluntary consensus standards setting 
        organization as defined for purposes of section 12(d) of the 
        National Technology Transfer and Advancement Act of 1995 
        (Public Law 104-113) and Office of Management and Budget 
        Revised Circular A-119 (published in the Federal Register on 
        February 10, 1998).
            ``(6) Experience.--The entity has at least 4 years of 
        experience in establishing national consensus standards.
            ``(7) Membership fees.--If the entity requires a membership 
        fee for participation in the functions of the entity, such fees 
        shall be reasonable and adjusted based on the capacity of the 
        potential member to pay the fee. In no case shall membership 
        fees pose a barrier to the participation of individuals or 
        groups with low or nominal resources to participate in the 
        functions of the entity.
    ``(d) Funding.--For purposes of carrying out this section, the 
Secretary shall provide for the transfer, from the Federal Hospital 
Insurance Trust Fund under section 1817 and the Federal Supplementary 
Medical Insurance Trust Fund under section 1841 (in such proportion as 
the Secretary determines appropriate), of $10,000,000 to the Centers 
for Medicare & Medicaid Services Program Management Account for each of 
fiscal years 2009 through 2012.''.
            (2) Sense of the senate.--It is the Sense of the Senate 
        that the selection by the Secretary of Health and Human 
        Services of an entity to contract with under section 1890(a) of 
        the Social Security Act, as added by paragraph (1), should not 
        be construed as diminishing the significant contributions of 
        the Boards of Medicine, the quality alliances, and other 
        clinical and technical experts to efforts to measure and 
        improve the quality of health care services.
    (b) GAO Study and Reports on the Performance and Costs of the 
Consensus-Based Entity Under the Contract.--
            (1) In general.--The Comptroller General of the United 
        States shall conduct a study on--
                    (A) the performance of the entity with a contract 
                with the Secretary of Health and Human Services under 
                section 1890(a) of the Social Security Act, as added by 
                subsection (a), of its duties under such contract; and
                    (B) the costs incurred by such entity in performing 
                such duties.
            (2) Reports.--Not later than 18 months and 36 months after 
        the effective date of the first contract entered into under 
        such section 1890(a), the Comptroller General of the United 
        States shall submit to Congress a report containing the results 
        of the study conducted under paragraph (1), together with 
        recommendations for such legislation and administrative action 
        as the Comptroller General determines appropriate.

SEC. 184. COST-SHARING FOR CLINICAL TRIALS.

    Section 1833 of the Social Security Act (42 U.S.C. 1395l), as 
amended by section 152(a), is amended by adding at the end the 
following new subsection:
    ``(x) Methods of Payment.--The Secretary may develop alternative 
methods of payment for items and services provided under clinical 
trials and comparative effectiveness studies sponsored or supported by 
an agency of the Department of Health and Human Services, as determined 
by the Secretary, to those that would otherwise apply under this 
section, to the extent such alternative methods are necessary to 
preserve the scientific validity of such trials or studies, such as in 
the case where masking the identity of interventions from patients and 
investigators is necessary to comply with the particular trial or study 
design.''.

SEC. 185. ADDRESSING HEALTH CARE DISPARITIES.

    Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) is 
amended by inserting after section 1808 the following new section:

                  ``addressing health care disparities

    ``Sec. 1809.  (a) Evaluating Data Collection Approaches.--The 
Secretary shall evaluate approaches for the collection of data under 
this title, to be performed in conjunction with existing quality 
reporting requirements and programs under this title, that allow for 
the ongoing, accurate, and timely collection and evaluation of data on 
disparities in health care services and performance on the basis of 
race, ethnicity, and gender. In conducting such evaluation, the 
Secretary shall consider the following objectives:
            ``(1) Protecting patient privacy.
            ``(2) Minimizing the administrative burdens of data 
        collection and reporting on providers and health plans 
        participating under this title.
            ``(3) Improving Medicare program data on race, ethnicity, 
        and gender.
    ``(b) Reports to Congress.--
            ``(1) Report on evaluation.--Not later than 18 months after 
        the date of the enactment of this section, the Secretary shall 
        submit to Congress a report on the evaluation conducted under 
        subsection (a). Such report shall, taking into consideration 
        the results of such evaluation--
                    ``(A) identify approaches (including defining 
                methodologies) for identifying and collecting and 
                evaluating data on health care disparities on the basis 
                of race, ethnicity, and gender for the original 
                Medicare fee-for-service program under parts A and B, 
                the Medicare Advantage program under part C, and the 
                Medicare prescription drug program under part D; and
                    ``(B) include recommendations on the most effective 
                strategies and approaches to reporting HEDIS quality 
                measures as required under section 1852(e)(3) and other 
                nationally recognized quality performance measures, as 
                appropriate, on the basis of race, ethnicity, and 
                gender.
            ``(2) Reports on data analyses.--Not later than 4 years 
        after the date of the enactment of this section, and 4 years 
        thereafter, the Secretary shall submit to Congress a report 
        that includes recommendations for improving the identification 
        of health care disparities for Medicare beneficiaries based on 
        analyses of the data collected under subsection (c).
    ``(c) Implementing Effective Approaches.--Not later than 24 months 
after the date of the enactment of this section, the Secretary shall 
implement the approaches identified in the report submitted under 
subsection (b)(1) for the ongoing, accurate, and timely collection and 
evaluation of data on health care disparities on the basis of race, 
ethnicity, and gender.''.

SEC. 186. DEMONSTRATION TO IMPROVE CARE TO PREVIOUSLY UNINSURED.

    (a) Establishment.--Within one year after the date of the enactment 
of this Act, the Secretary (in this section referred to as the 
``Secretary'') shall establish a demonstration project to determine the 
greatest needs and most effective methods of outreach to medicare 
beneficiaries who were previously uninsured.
    (b) Scope.--The demonstration shall be in no fewer than 10 sites, 
and shall include state health insurance assistance programs, community 
health centers, community-based organizations, community health 
workers, and other service providers under parts A, B, and C of title 
XVIII of the Social Security Act. Grantees that are plans operating 
under part C shall document that enrollees who were previously 
uninsured receive the ``Welcome to Medicare'' physical exam.
    (c) Duration.--The Secretary shall conduct the demonstration 
project for a period of 2 years.
    (d) Report and Evaluation.--The Secretary shall conduct an 
evaluation of the demonstration and not later than 1 year after the 
completion of the project shall submit to Congress a report including 
the following:
            (1) An analysis of the effectiveness of outreach activities 
        targeting beneficiaries who were previously uninsured, such as 
        revising outreach and enrollment materials (including the 
        potential for use of video information), providing one-on-one 
        counseling, working with community health workers, and amending 
        the Medicare and You handbook.
            (2) The effect of such outreach on beneficiary access to 
        care, utilization of services, efficiency and cost-
        effectiveness of health care delivery, patient satisfaction, 
        and select health outcomes.

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.

    (a) Report.--Not later than two years after the date of the 
enactment of this Act, the Inspector General of the Department of 
Health and Human Services shall prepare and publish a report on--
            (1) the extent to which Medicare providers and plans are 
        complying with the Office for Civil Rights' Guidance to Federal 
        Financial Assistance Recipients Regarding Title VI Prohibition 
        Against National Origin Discrimination Affecting Limited 
        English Proficient Persons and the Office of Minority Health's 
        Culturally and Linguistically Appropriate Services Standards in 
        health care; and
            (2) a description of the costs associated with or savings 
        related to the provision of language services.
Such report shall include recommendations on improving compliance with 
CLAS Standards and recommendations on improving enforcement of CLAS 
Standards.
    (b) Implementation.--Not later than one year after the date of 
publication of the report under subsection (a), the Department of 
Health and Human Services shall implement changes responsive to any 
deficiencies identified in the report.

SEC. 188. MEDICARE IMPROVEMENT FUNDING.

    (a) Medicare Improvement Fund.--Title XVIII of the Social Security 
Act (42 U.S.C. 1395 et seq.) is amended by adding at the end the 
following new section:

                      ``medicare improvement fund

    ``Sec. 1898.  (a) Establishment.--
            ``The Secretary shall establish under this title a Medicare 
        Improvement Fund (in this section referred to as the `Fund') 
        which shall be available to the Secretary to make improvements 
        under the original fee-for-service program under parts A and B 
        for individuals entitled to, or enrolled for, benefits under 
        part A or enrolled under part B.
    ``(b) Funding.--
            ``(1) In general.--There shall be available to the Fund, 
        for expenditures from the Fund for services furnished during 
        fiscal year [2014], $[______].
            ``(2) Payment from trust funds.--The amount specified under 
        paragraph (1) shall be available to the Fund, as expenditures 
        are made from the Fund, from the Federal Hospital Insurance 
        Trust Fund and the Federal Supplementary Medical Insurance 
        Trust Fund in such proportion as the Secretary determines 
        appropriate.
            ``(3) Funding limitation.--Amounts in the Fund shall be 
        available in advance of appropriations but only if the total 
        amount obligated from the Fund does not exceed the amount 
        available to the Fund under paragraph (1). The Secretary may 
        obligate funds from the Fund only if the Secretary determines 
        (and the Chief Actuary of the Centers for Medicare & Medicaid 
        Services and the appropriate budget officer certify) that there 
        are available in the Fund sufficient amounts to cover all such 
        obligations incurred consistent with the previous sentence.''.
    (b) Implementation.--For purposes of carrying out the provisions 
of, and amendments made by, this Act, in addition to any other amounts 
provided in such provisions and amendments, the Secretary of Health and 
Human Services shall provide for the transfer, from the Federal 
Hospital Insurance Trust Fund under section 1817 of the Social Security 
Act (42 U.S.C. 1395i) and the Federal Supplementary Medical Insurance 
Trust Fund under section 1841 of such Act (42 U.S.C. 1395t), in the 
same proportion as the Secretary determines under section 1853(f) of 
such Act (42 U.S.C. 1395w-23(f)), of $140,000,000 to the Centers for 
Medicare & Medicaid Services Program Management Account for the period 
of fiscal years 2009 through 2013.

                           TITLE II--MEDICAID

SEC. 201. EXTENSION OF TRANSITIONAL MEDICAL ASSISTANCE (TMA) AND 
              ABSTINENCE EDUCATION PROGRAM.

    Section 401 of division B of the Tax Relief and Health Care Act of 
2006 (Public Law 109-432, 120 Stat. 2994), as amended by section 1 of 
Public Law 110-48 (121 Stat. 244), section 2 of the TMA, Abstinence, 
Education, and QI Programs Extension Act of 2007 (Public Law 110-90, 
121 Stat. 984), and section 202 of the Medicare, Medicaid, and SCHIP 
Extension Act of 2007 (Public Law 110-173) is amended--
            (1) by striking ``June 30, 2008'' and inserting ``December 
        31, 2009'';
            (2) by striking ``the third quarter of fiscal year 2008'' 
        and inserting ``the first quarter of fiscal year 2010''; and
            (3) by striking ``the third quarter of fiscal year 2007'' 
        and inserting ``the first quarter of fiscal year 2008''.

SEC. 202. MEDICAID DSH EXTENSION.

    Section 1923(f)(6) of the Social Security Act (42 U.S.C. 1396r-
4(f)(6)) is amended--
            (1) in the heading, by striking ``fiscal year 2007 and 
        portions of fiscal year 2008'' and inserting ``fiscal years 
        2007 through 2009 and the first calendar quarter of fiscal year 
        2010''; and
            (2) in subparagraph (A)--
                    (A) in clause (i)--
                            (i) in the second sentence--
                                    (I) by striking ``fiscal year 2008 
                                for the period ending on June 30, 
                                2008'' and inserting ``fiscal years 
                                2008 and 2009''; and
                                    (II) by striking ``\3/4\ of''; and
                            (ii) by adding at the end the following new 
                        sentences: ``Only with respect to fiscal year 
                        2010 for the period ending on December 31, 
                        2009, the DSH allotment for Tennessee for such 
                        portion of the fiscal year, notwithstanding 
                        such table or terms, shall be \1/4\ of the 
                        amount specified in the first sentence for 
                        fiscal year 2007.'';
                    (B) in clause (ii), by striking ``or for a period 
                in fiscal year 2008'' and inserting ``, 2008, 2009, or 
                for a period in fiscal year 2010'';
                    (C) in clause (iv)--
                            (i) in the heading, by striking ``fiscal 
                        year 2007 and fiscal year 2008'' and inserting 
                        ``fiscal years 2007 through 2009 and the first 
                        calendar quarter of fiscal year 2010'';
                            (ii) in subclause (I), by striking ``or for 
                        a period in fiscal year 2008'' and inserting 
                        ``, 2008, 2009, or for a period in fiscal year 
                        2010''; and
                            (iii) in subclause (II), by striking ``or 
                        for a period in fiscal year 2008'' and 
                        inserting ``, 2008, 2009, or for a period in 
                        fiscal year 2010''; and
            (3) in subparagraph (B)(i)--
                    (A) in the first sentence, by striking ``fiscal 
                year 2007'' and inserting ``each of fiscal years 2007 
                through 2009''; and
                    (B) by striking the second sentence and inserting 
                the following: ``Only with respect to fiscal year 2010 
                for the period ending on December 31, 2009, the DSH 
                allotment for Hawaii for such portion of the fiscal 
                year, notwithstanding the table set forth in paragraph 
                (2), shall be $2,500,000.''.

SEC. 203. PHARMACY REIMBURSEMENT UNDER MEDICAID.

    (a) Delay in New Payment Limits for Multiple Source Drugs Under 
Medicaid.--Notwithstanding paragraphs (4) and (5) of subsection (e) of 
section 1927 of the Social Security Act (42 U.S.C. 1396r-8) or part 447 
of title 42, Code of Federal Regulations (as in effect on the date of 
the enactment of this Act), the Secretary of Health and Human Services 
shall not require a State to establish prior to September 30, 2009, 
payment limits for multiple source drugs under a State Medicaid plan 
that do not exceed the specific upper limit established under section 
447.514(b) of title 42, Code of Federal Regulations (as so in effect) 
and shall permit any State to continue to receive Federal financial 
participation for payments for such drugs that do not exceed the 
specific upper limit that would have applied to such payments under 
section 447.332 of title 42, Code of Federal Regulations (as in effect 
on December 31, 2006).
    (b) Temporary Suspension of Updated Publicly Available AMP Data.--
Notwithstanding clause (v) of section 1927(b)(3)(D) of the Social 
Security Act (42 U.S.C. 1396r-8(b)(3)(D)), the Secretary of Health and 
Human Services shall not, prior to September 30, 2009, make publicly 
available any AMP disclosed to the Secretary.
    (c) Definitions.--In this subsection:
            (1) The term ``multiple source drug'' has the meaning given 
        that term in section 1927(k)(7)(A)(i) of the Social Security 
        Act (42 U.S.C. 1396r-8(k)(7)(A)(i)); and
            (2) The term ``AMP'' has the meaning given ``average 
        manufacturer price'' in section 1927(k)(1) of the Social 
        Security Act (42 U.S.C. 1396r-8(k)(1)) and ``AMP'' in section 
        447.504(a) of title 42, Code of Federal Regulations (as in 
        effect on the date of the enactment of this Act).

SEC. 204. REVIEW OF ADMINISTRATIVE CLAIM DETERMINATIONS.

    (a) In General.--Section 1116 of the Social Security Act (42 U.S.C. 
1316) is amended by adding at the end the following new subsection:
    ``(e)(1) Whenever the Secretary determines that any item or class 
of items on account of which Federal financial participation is claimed 
under title XIX shall be disallowed for such participation, the State 
shall be entitled to and upon request shall receive a reconsideration 
of the disallowance, provided that such request is made during the 60-
day period that begins on the date the State receives notice of the 
disallowance.
    ``(2)(A) A State may appeal a disallowance of a claim for federal 
financial participation under title XIX by the Secretary, or an 
unfavorable reconsideration of a disallowance, during the 60-day period 
that begins on the date the State receives notice of the disallowance 
or of the unfavorable reconsideration, in whole or in part, to the 
Departmental Appeals Board, established in the Department of Health and 
Human Services (in this paragraph referred to as the `Board'), by 
filing a notice of appeal with the Board.
    ``(B) The Board shall consider a State's appeal of a disallowance 
of such a claim (or of an unfavorable reconsideration of a 
disallowance) on the basis of such documentation as the State may 
submit and as the Board may require to support the final decision of 
the Board. In deciding whether to uphold a disallowance of such a claim 
or any portion thereof, the Board shall be bound by all applicable laws 
and regulations and shall conduct a thorough review of the issues, 
taking into account all relevant evidence. The Board's decision of an 
appeal under subparagraph (A) shall be the final decision of the 
Secretary and shall be subject to reconsideration by the Board only 
upon motion of either party filed during the 60-day period that begins 
on the date of the Board's decision or to judicial review in accordance 
with subparagraph (C).
    ``(C) A State may obtain judicial review of a decision of the Board 
by filing an action in any United States District Court located within 
the appealing State (or, if several States jointly appeal the 
disallowance of claims for Federal financial participation under 
section 1903, in any United States District Court that is located 
within any State that is a party to the appeal) or the United States 
District Court for the District of Columbia. Such an action may only be 
filed--
            ``(i) if no motion for reconsideration was filed within the 
        60-day period specified in subparagraph (B), during such 60-day 
        period; or
            ``(ii) if such a motion was filed within such period, 
        during the 60-day period that begins on the date of the Board's 
        decision on such motion.''.
    (b) Conforming Amendment.--Section 1116(d) of such Act (42 U.S.C. 
1316(d)) is amended by striking ``or XIX,''.
    (c) Effective Date.--The amendments made by this section take 
effect on the date of the enactment of this Act and apply to any 
disallowance of a claim for Federal financial participation under title 
XIX of the Social Security Act (42 U.S.C. 1396 et seq.) made on or 
after such date or during the 60-day period prior to such date.

                        TITLE III--MISCELLANEOUS

SEC. 301. EXTENSION OF TANF SUPPLEMENTAL GRANTS.

    (a) Extension Through Fiscal Year 2009.--Section 7101(a) of the 
Deficit Reduction Act of 2005 (Public Law 109-171; 120 Stat. 135) is 
amended by striking ``fiscal year 2008'' and inserting ``fiscal year 
2009''.
    (b) Conforming Amendment.--Section 403(a)(3)(H)(ii) of the Social 
Security Act (42 U.S.C. 603(a)(3)(H)(ii)) is amended to read as 
follows:
                            ``(ii) subparagraph (G) shall be applied as 
                        if `fiscal year 2009' were substituted for 
                        `fiscal year 2001'; and''.

SEC. 302. 70 PERCENT FEDERAL MATCHING FOR FOSTER CARE AND ADOPTION 
              ASSISTANCE FOR THE DISTRICT OF COLUMBIA.

    (a) In General.--Section 474(a) of the Social Security Act (42 
U.S.C. 674(a)) is amended in each of paragraphs (1) and (2) by striking 
``(as defined in section 1905(b) of this Act)'' and inserting ``(which 
shall be as defined in section 1905(b), in the case of a State other 
than the District of Columbia, or 70 percent, in the case of the 
District of Columbia)''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on October 1, 2008, and shall apply to calendar quarters 
beginning on or after that date.

SEC. 303. EXTENSION OF SPECIAL DIABETES GRANT PROGRAMS.

    (a) Special Diabetes Programs for Type I Diabetes.--Section 
330B(b)(2)(C) of the Public Health Service Act (42 U.S.C. 254c-2(b)(2)) 
is amended by striking ``2009'' and inserting ``2011''.
    (b) Special Diabetes Programs for Indians.--Section 330C(c)(2)(C) 
of the Public Health Service Act (42 U.S.C. 254c-3(c)(2)(C)) is amended 
by striking ``2009'' and inserting ``2011''.
    (c) Report on Grant Programs.--Section 4923(b) of the Balanced 
Budget Act of 1997 (42 U.S.C. 1254c-2 note), as amended by section 
931(c) of the Medicare, Medicaid, and SCHIP Benefits Improvement and 
Protection Act of 2000, as enacted into law by section 1(a)(6) of 
Public Law 106-554, and section 1(c) of Public Law 107-360, is 
amended--
            (1) in paragraph (1), by striking ``and'' at the end;
            (2) in paragraph (2)--
                    (A) by striking ``a final report'' and inserting 
                ``a second interim report''; and
                    (B) by striking the period at the end and inserting 
                ``; and''; and
            (3) by adding at the end the following new paragraph:
            ``(3) a report on such evaluation not later than January 1, 
        2011.''.

SEC. 304. IOM REPORTS ON BEST PRACTICES FOR CONDUCTING SYSTEMATIC 
              REVIEWS OF CLINICAL EFFECTIVENESS RESEARCH AND FOR 
              DEVELOPING CLINICAL PROTOCOLS.

    (a) Systematic Reviews of Clinical Effectiveness Research.--
            (1) Study.--Not later than 60 days after the date of the 
        enactment of this Act, the Secretary of Health and Human 
        Services shall enter into a contract with the Institute of 
        Medicine of the National Academies (in this section referred to 
        as the ``Institute'') under which the Institute shall conduct a 
        study to identify the methodological standards for conducting 
        systematic reviews of clinical effectiveness research on health 
        and health care in order to ensure that organizations 
        conducting such reviews have information on methods that are 
        objective, scientifically valid, and consistent.
            (2) Report.--Not later than 18 months after the effective 
        date of the contract under paragraph (1), the Institute, as 
        part of such contract, shall submit to the Secretary of Health 
        and Human Services and the appropriate committees of 
        jurisdiction of Congress a report containing the results of the 
        study conducted under paragraph (1), together with 
        recommendations for such legislation and administrative action 
        as the Institute determines appropriate.
            (3) Participation.--The contract under paragraph (1) shall 
        require that stakeholders with expertise in conducting clinical 
        effectiveness research participate on the panel responsible for 
        conducting the study under paragraph (1) and preparing the 
        report under paragraph (2).
    (b) Clinical Protocols.--
            (1) Study.--Not later than 60 days after the date of the 
        enactment of this Act, the Secretary of Health and Human 
        Services shall enter into a contract with the Institute of 
        Medicine of the National Academies (in this section referred to 
        as the ``Institute'') under which the Institute shall conduct a 
        study on the best methods used in developing clinical practice 
        guidelines in order to ensure that organizations developing 
        such guidelines have information on approaches that are 
        objective, scientifically valid, and consistent.
            (2) Report.--Not later than 18 months after the effective 
        date of the contract under paragraph (1), the Institute, as 
        part of such contract, shall submit to the Secretary of Health 
        and Human Services and the appropriate committees of 
        jurisdiction of Congress a report containing the results of the 
        study conducted under paragraph (1), together with 
        recommendations for such legislation and administrative action 
        as the Institute determines appropriate.
            (3) Participation.--The contract under paragraph (1) shall 
        require that stakeholders with expertise in making clinical 
        recommendations participate on the panel responsible for 
        conducting the study under paragraph (1) and preparing the 
        report under paragraph (2).
    (c) Funding.--Out of any funds in the Treasury not otherwise 
appropriated, there are appropriated for the period of fiscal years 
2009 and 2010, $3,000,000 to carry out this section.
                                                       Calendar No. 772

110th CONGRESS

  2d Session

                                S. 3101

_______________________________________________________________________

                                 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.

_______________________________________________________________________

                              June 9, 2008

            Read the second time and placed on the calendar
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