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[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 3118 Placed on Calendar Senate (PCS)]

                                                       Calendar No. 776
110th CONGRESS
  2d Session
                                S. 3118

 To amend titles XVIII and XIX of the Social Security Act to preserve 
 beneficiary access to care by preventing a reduction in the Medicare 
  physician fee schedule, to improve the quality of care by advancing 
   value based purchasing, electronic health records, and electronic 
prescribing, and to maintain and improve access to care in rural areas, 
                        and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             June 11, 2008

   Mr. Grassley (for himself, Mr. McConnell, Mr. Kyl, Mr. Hatch, Mr. 
  Sununu, Mr. Bunning, Mr. Crapo, Mr. Burr, Mr. Ensign, Mr. Enzi, Mr. 
Coleman, Ms. Murkowski, and Mr. Stevens) introduced the following bill; 
                     which was read the first time

                             June 12, 2008

            Read the second time and placed on the calendar

_______________________________________________________________________

                                 A BILL

 
 To amend titles XVIII and XIX of the Social Security Act to preserve 
 beneficiary access to care by preventing a reduction in the Medicare 
  physician fee schedule, to improve the quality of care by advancing 
   value based purchasing, electronic health records, and electronic 
prescribing, and to maintain and improve access to care in rural areas, 
                        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 ``Preserving Access 
to Medicare 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--Rural Beneficiary Access Extensions and Improvements

Sec. 100. Short title.
Sec. 101. Temporary improvements to the Medicare inpatient hospital 
                            payment adjustment for low-volume 
                            hospitals.
Sec. 102. Use of non-wage adjusted PPS rate under the Medicare-
                            dependent hospital (MDH) program.
Sec. 103. Ambulance services improvements.
Sec. 104. Extension of authorization for FLEX grants.
Sec. 105. Rebasing for sole community hospitals.
Sec. 106. Extension and expansion of the Medicare hold harmless 
                            provision under the prospective payment 
                            system for hospital outpatient department 
                            (HOPD) services for certain hospitals.
Sec. 107. Clarification of payment for clinical laboratory tests 
                            furnished by critical access hospitals.
Sec. 108. Extension of floor on Medicare work geographic adjustment 
                            under the Medicare physician fee schedule.
Sec. 109. Extension of treatment of certain physician pathology 
                            services under Medicare.
Sec. 110. Adding hospital-based renal dialysis centers (including 
                            satellites) as originating sites for 
                            payment of telehealth services.
Sec. 111. Adding skilled nursing facilities as originating sites for 
                            payment of telehealth services.
Sec. 112. Applying rural home health add-on policy for 2009.
            Subtitle B--Other Provisions Relating to Part A

Sec. 121. Extension of the reclassification of certain hospitals under 
                            the Medicare program.
Sec. 122. Institute of Medicine study and report on post-acute care.
Sec. 123. Revocation of unique deeming authority of the Joint 
                            Commission.
Sec. 124. MedPAC study and report on payments for hospice care.
Sec. 125. Introducing the principals of value-based health care into 
                            the Medicare program.
            Subtitle C--Other Provisions Relating to Part B

Sec. 131. Physician payment, efficiency, and quality improvements.
Sec. 132. Incentives for electronic prescribing.
Sec. 133. Increasing the number of sites for the electronic health 
                            records demonstration.
Sec. 134. Primary care improvements.
Sec. 135. Medicare anesthesia teaching program improvements .
Sec. 136. Medicare coordinated care practice research network 
                            demonstration.
Sec. 137. Imaging provisions.
Sec. 138. Accommodation of physicians ordered to active duty in the 
                            Armed Services.
Sec. 139. Extension of exceptions process for Medicare therapy caps.
Sec. 140. Speech-language pathology services.
Sec. 141. Coverage of items and services under a cardiac rehabilitation 
                            program and a pulmonary rehabilitation 
                            program.
Sec. 142. Repeal of transfer of ownership of oxygen equipment.
Sec. 143. Extension of payment rule for brachytherapy and therapeutic 
                            radiopharmaceuticals.
Sec. 144. Clinical laboratory tests.
Sec. 145. Sense of the Senate on delayed implementation of competitive 
                            bidding for durable medical equipment, 
                            prosthetics, orthotics, and supplies 
                            (DMEPOS).
          Subtitle D--End Stage Renal Disease Program Reforms

Sec. 151. Kidney disease education and awareness provisions.
Sec. 152. Renal dialysis provisions.
               Subtitle E--Provisions Relating to Part C

Sec. 161. Phase-out of indirect medical education (IME).
Sec. 162. Revisions to quality improvement programs.
Sec. 163. Revisions relating to specialized Medicare Advantage plans 
                            for special needs individuals.
Sec. 164. Adjustment to the Medicare Advantage stabilization fund.
Sec. 165. Access to Medicare reasonable cost contract plans.
Sec. 166. MedPAC study and report on Medicare Advantage payments.
Sec. 167. Marketing of Medicare Advantage plans and prescription drug 
                            plans.
                      Subtitle F--Other Provisions

Sec. 171. Contract with a consensus-based entity regarding performance 
                            measurement.
Sec. 172. Use of part D data.
Sec. 173. Inclusion of Medicare providers and suppliers in Federal 
                            Payment Levy and Administrative Offset 
                            Program.
                           TITLE II--MEDICAID

Sec. 201. Extension of transitional medical assistance (TMA) and 
                            abstinence education program through fiscal 
                            year 2009.
Sec. 202. Extension of qualifying individual (QI) program through 
                            fiscal year 2009.
Sec. 203. Medicaid DSH extension through December 31, 2009.
Sec. 204. Asset verification through access to information held by 
                            financial institutions.
Sec. 205. Application of Medicare payment adjustment for certain 
                            hospital-acquired conditions to payments 
                            for inpatient hospital services under 
                            Medicaid.
Sec. 206. Reduction in payments for Medicaid administrative costs to 
                            prevent duplication of such payments under 
                            TANF.
Sec. 207. Clarification treatment of regional medical center.
Sec. 208. Grants to improve outreach and enrollment under Medicaid.
                        TITLE III--MISCELLANEOUS

Sec. 301. Extension of TANF supplemental grants through fiscal year 
                            2009.
Sec. 302. Special Diabetes Programs for Type I Diabetes and Indians.
Sec. 303. Additional Funding for State Health Insurance Assistance 
                            Programs, Area Agencies on Aging, and Aging 
                            and Disability Resource Centers.
Sec. 304. Extension of Federal reimbursement of emergency health 
                            services furnished to undocumented aliens.

                           TITLE I--MEDICARE

    Subtitle A--Rural Beneficiary Access Extensions and Improvements

SEC. 100. SHORT TITLE.

    This subtitle may be cited as the ``Craig Thomas Rural Hospital and 
Provider Equity Act of 2008''.

SEC. 101. TEMPORARY IMPROVEMENTS TO THE MEDICARE INPATIENT HOSPITAL 
              PAYMENT ADJUSTMENT FOR LOW-VOLUME HOSPITALS.

    Section 1886(d)(12) of the Social Security Act (42 U.S.C. 
1395ww(d)(12)) is amended--
            (1) in subparagraph (A), by inserting ``or (D) (for 
        discharges occurring in fiscal years 2009)'' after 
        ``subparagraph (B)'';
            (2) in subparagraph (B), by striking ``The Secretary'' and 
        inserting ``Except as provided in subparagraph (D), the 
        Secretary'';
            (3) in subparagraph (C)(i)--
                    (A) by inserting ``(or, with respect to fiscal 
                years 2009, 15 road miles)'' after ``25 road miles''; 
                and
                    (B) by inserting ``(or, with respect to fiscal 
                years 2009, 1,500 discharges of individuals entitled 
                to, or enrolled for, benefits under part A)'' after 
                ``800 discharges''; and
            (4) by adding at the end the following new subparagraph:
                    ``(D) Temporary applicable percentage increase.--
                For discharges occurring in fiscal years 2009, the 
                Secretary shall determine an applicable percentage 
                increase for purposes of subparagraph (A) using a 
                linear sliding scale ranging from 25 percent for low-
                volume hospitals with fewer than an appropriate number 
                (as determined by the Secretary) of discharges of 
                individuals entitled to, or enrolled for, benefits 
                under part A in the fiscal year to 0 percent for low-
                volume hospitals with greater than 1,500 discharges of 
                such individuals in the fiscal year.''.

SEC. 102. USE OF NON-WAGE ADJUSTED PPS RATE UNDER THE MEDICARE-
              DEPENDENT HOSPITAL (MDH) PROGRAM.

    (a) Use of Non-Wage Adjusted PPS Rate Under the Medicare-Dependent 
Hospital (MDH) Program.--Section 1886(d)(5)(G) of the Social Security 
Act (42 U.S.C. 1395ww(d)(5)(G)) is amended by adding at the end the 
following new clause:
    ``(v) In the case of discharges occurring on or after October 1, 
2008, and before October 1, 2009, in determining the amount under 
paragraph (1)(A)(iii) for purposes of clauses (i) and (ii)(II), such 
amount shall, if it results in greater payments to the hospital, be 
determined without regard to any adjustment for different area wage 
levels under paragraph (3)(E).''.
    (b) Treatment of Certain Hospitals.--Notwithstanding any other 
provision of law, effective for discharges occurring on or after 
October 1, 2008, the provisions of paragraph (5)(G) of section 1886(d) 
of the Social Security Act (42 U.S.C. 1395ww(d)) shall apply for 
purposes of making payments under such section to Wesley Woods 
Geriatric Hospital (provider number 110203) in the same manner as such 
provisions apply for purposes of making payments under such section to 
a Medicare-dependent, small rural hospital (as defined in paragraph 
(5)(G)(iv) of such section).

SEC. 103. AMBULANCE SERVICES IMPROVEMENTS.

    (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. 104. EXTENSION OF AUTHORIZATION FOR FLEX GRANTS.

    (a) In General.--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 ``, and 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'' before the period at the 
        end.
    (b) 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.''.

SEC. 105. REBASING FOR SOLE COMMUNITY HOSPITALS.

    (a) Rebasing Permitted.--
            (1) In general.--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.''.
            (2) Conforming amendments.--Section 1886(b)(3) of the 
        Social Security Act (42 U.S.C. 1395ww(b)(3)) is amended--
                    (A) in subparagraph (C), in the matter preceding 
                clause (i), by striking ``subparagraph (I)'' and 
                inserting ``subparagraphs (I) and (L)''; and
                    (B) in subparagraph (I)(i), in the matter preceding 
                subclause (I), by striking ``For'' and inserting 
                ``Subject to subparagraph (L), for''.
    (b) Rural Referral Center Designation.--Notwithstanding any other 
provision of law, for purposes of meeting the criteria for 
classification as a rural referral center under section 1886(d)(5)(C) 
of the Social Security Act (42 U.S.C. 1395ww(d)(5)(C)) with respect to 
cost reporting periods beginning on or after October 1, 2008, the 
Halifax Regional Medical Center (provider number 340151) shall be 
deemed to satisfy the case mix requirement.

SEC. 106. 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. 107. CLARIFICATION OF PAYMENT FOR CLINICAL LABORATORY TESTS 
              FURNISHED BY CRITICAL ACCESS HOSPITALS.

    (a) Clarification of Payment for Clinical Laboratory Tests 
Furnished by Critical Access Hospitals.--
            (1) In general.--Section 1834(g)(4) of the Social Security 
        Act (42 U.S.C. 1395m(g)(4)) is amended--
                    (A) in the heading, by striking ``no beneficiary 
                cost-sharing for'' and inserting ``treatment of''; and
                    (B) 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 at the time the specimen is collected as long 
                as the individual is present within the same county as 
                the hospital at the time the specimen is collected.''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall apply to services furnished on or after July 1, 2009.
    (b) Medicare Critical Access Hospital Designations.--Section 405(h) 
of the Medicare Prescription Drug, Improvement, and Modernization Act 
of 2003 (Public Law 108-173; 117 Stat. 2269) is amended by adding at 
the end the following new paragraph:
            ``(3) Exception.--
                    ``(A) In general.--The amendment made by paragraph 
                (1) shall not apply to the certification by the State 
                of Alabama on or after January 1, 2006, under section 
                1820(c)(2)(B)(i)(II) of the Social Security Act (42 
                U.S.C. 1395i-4(c)(2)(B)(i)(II)) of one hospital that 
                meets the criteria described in subparagraph (B) as a 
                necessary provider of health care services to residents 
                in the area of the hospital.
                    ``(B) Criteria described.--A hospital meets the 
                criteria described in this subparagraph if the hospital 
                is located--
                            ``(i) in the county seat of Butler, 
                        Alabama; and
                            ``(ii) a 32-mile drive from a hospital, or 
                        another facility described in section 1820(c) 
                        of the Social Security Act (42 U.S.C. 1395i-
                        4(c)).''.

SEC. 108. 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. 109. 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. 110. ADDING HOSPITAL-BASED RENAL DIALYSIS CENTERS (INCLUDING 
              SATELLITES) 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 subclause:
                                    ``(VI) A hospital-based or critical 
                                access hospital-based renal dialysis 
                                center (including satellites).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to services furnished on or after January 1, 2009.

SEC. 111. ADDING SKILLED NURSING FACILITIES AS ORIGINATING SITES FOR 
              PAYMENT OF TELEHEALTH SERVICES.

    (a) Addition.--
            (1) In general.--Section 1834(m)(4)(C)(ii) of the Social 
        Security Act (42 U.S.C. 1395m(m)(4)(C)(ii)), as amended by 
        section 110, is amended by adding at the end the following new 
        subclause:
                                    ``(VII) A skilled nursing facility 
                                (as defined in section 1819(a)).''.
            (2) 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),''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to telehealth services furnished on or after January 1, 2009.

SEC. 112. APPLYING RURAL HOME HEALTH ADD-ON POLICY FOR 2009.

    Section 421(a) of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (Public Law 10-173; 117 Stat. 2283), as 
amended by section 5201(b) of the Deficit Reduction Act of 2005 (Public 
Law 109-171; 120 Stat. 46), is amended--
            (1) by striking ``, and episodes'' and inserting ``, 
        episodes''; and
            (2) by inserting ``and episodes and visits ending on or 
        after January 1, 2009, and before January 1, 2010,'' after 
        ``January 1, 2007,''.

            Subtitle B--Other Provisions Relating to Part A

SEC. 121. EXTENSION OF THE RECLASSIFICATION OF CERTAIN HOSPITALS UNDER 
              THE MEDICARE PROGRAM.

    (a) Extension.--
            (1) 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''.
            (2) 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''.
    (b) Floor on Medicare Area Wage Index.--
            (1) In general.--Notwithstanding any other provision of 
        law, for purposes of section 1886(d)(3)(E) of the Social 
        Security Act (42 U.S.C. 1395ww(d)(3)(E)), the area wage index 
        applicable under such section to any hospital located in a 
        State with an area described in paragraph (2) shall not be less 
        than the area wage index applicable under such section to such 
        hospital during the period beginning on or after October 1, 
        2006, and before October 1, 2007.
            (2) Area described.--An area described in this paragraph is 
        a rural area (as defined in paragraph (2)(D) of section 1886(d) 
        of the Social Security Act (42 U.S.C. 1395ww(d))) where not 
        less than 65 percent of the wages paid by all subsection (d) 
        hospitals (as defined in paragraph (1)(B) of such section) that 
        are located in such area on October 1, 2006, taking into 
        account redesignations under section 601(g) of the Social 
        Security Amendments of 1983 (Public Law 98-21) and not taking 
        into account reclassifications or redesignations under 
        paragraph (8) or (10) of such section 1886(d), are attributable 
        to wages paid by one hospital. For purposes of making a 
        determination under the preceding sentence, the wages to be 
        used are the occupational mix adjusted inflated wages used to 
        develop the wage index in effect during the period beginning on 
        October 1, 2006 and ending on September 30, 2007 (as published 
        in the Federal Register on October 11, 2006 (71 Fed. Reg. 
        59,886)).
            (3) Implementation.--The Secretary of Health and Human 
        Services shall ensure that the aggregate payments made under 
        section 1886(d) of the Social Security Act (42 U.S.C. 
        1395ww(d)) in a fiscal year for the operating costs of 
        inpatient hospital services are not greater or less than those 
        which would have been made in the year if this subsection did 
        not apply.
            (4) Effective date.--The provisions of this subsection 
        shall apply to discharges occurring on or after October 1, 
        2008.
    (c) Medicare Hospital Geographic Reclassifications.--
            (1) Reclassifications.--Notwithstanding any other provision 
        of law, effective for discharges occurring during fiscal years 
        2009, 2010, and 2011, for purposes of making payments under 
        section 1886(d) of the Social Security Act (42 U.S.C. 
        1395ww(d)) to Ball Memorial Hospital (provider number 15-0089), 
        such hospital is deemed to be located in the Indianapolis-
        Carmel, IN Core Based Statistical Area.
            (2) Rules.--
                    (A) In general.--Except as provided in subparagraph 
                (B), any reclassification made under paragraph (1) 
                shall be treated as a decision of the Medicare 
                Geographic Classification Review Board under section 
                1886(d)(10) of the Social Security Act (42 U.S.C. 
                1395ww(d)(10)).
                    (B) Non-application of duplicative 3-year 
                application provision.--Section 1886(d)(10)(D)(v) of 
                the Social Security Act (42 U.S.C. 
                1395ww(d)(10)(D)(v)), as it relates to a 
                reclassification being effective for 3 fiscal years, 
                shall not apply with respect to any reclassification 
                made under paragraph (1).

SEC. 122. INSTITUTE OF MEDICINE STUDY AND REPORT ON POST-ACUTE CARE.

    (a) In General.--
            (1) Study.--Not later than 6 months after the date of 
        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 short- and long-term steps that can be taken under the 
        Medicare program to reform the currently fragmented post-acute 
        care payment and delivery system. Such study shall include an 
        assessment of--
                    (A) potential elements of an integrated continuum 
                of care, such as--
                            (i) a uniform assessment tool for post-
                        acute care patients;
                            (ii) evidence-based admission criteria for 
                        each post-acute care setting;
                            (iii) an integrated site-neutral payment 
                        methodology; and
                            (iv) an integrated quality assessment 
                        system; and
                    (B) actions necessary to establish the integrated 
                continuum of care.
            (2) Consultation.--In conducting the study under paragraph 
        (1), the Institute shall consult with the Administrator of the 
        Centers for Medicare & Medicaid Services regarding the status 
        of efforts by the Administrator to develop a common assessment 
        instrument for post-acute care patients under the Medicare 
        program.
            (3) Report.--Not later than 2 years after the effective 
        date of the contract under paragraph (1), the Institute shall 
        submit a report to the Secretary of Health and Human Services 
        containing the results of the study conducted under paragraph 
        (1), together with recommendations for such legislation and 
        administrative action as the Institute determines appropriate.
    (b) Funding.--The Secretary of Health and Human Services shall 
provide for the transfer, from the Federal Hospital Insurance Trust 
Fund established under section 1817 of the Social Security Act (42 
U.S.C. 1395i), of $2,700,000 for the purpose of carrying out this 
section.

SEC. 123. 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 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.

SEC. 124. MEDPAC STUDY AND REPORT ON PAYMENTS FOR HOSPICE CARE.

    (a) Study.--The Medicare Payment Advisory Commission shall conduct 
a study on payments for hospice care under the Medicare program under 
title XVIII of the Social Security Act. Such study shall include an 
analysis of potential changes in payment methodologies for hospice care 
under the Medicare program, including revisions to the cap amount under 
section 1814(i)(2) of the Social Security Act (42 U.S.C. 1395f(i)(2)), 
that may reflect--
            (1) hospice patient characteristics;
            (2) variation in hospice care utilization by patient 
        characteristics;
            (3) average lengths of stay in hospice care;
            (4) disease category;
            (5) geographic differences;
            (6) specific types of hospice care services provided; and
            (7) site of service.
    (b) Report.--Not later than June 15, 2009, the Medicare Payment 
Advisory Commission shall submit a report to Congress on the study 
conducted under subsection (a). Such report shall include 
recommendations for such legislation and administrative action as the 
Medicare Payment Advisory Commission determines appropriate.
    (c) Hospice Care Defined.--In this section, the term ``hospice 
care'' has the meaning given such term in section 1861(dd) of the 
Social Security Act (42 U.S.C. 1395x(dd)).

SEC. 125. INTRODUCING THE PRINCIPALS OF VALUE-BASED HEALTH CARE INTO 
              THE MEDICARE PROGRAM.

    (a) Incentives for Providers and Suppliers.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall design 
        and implement a budget-neutral system for use in the Medicare 
        program under title XVIII of the Social Security Act under 
        which a portion of the payments that would otherwise be made 
        under such program to some or all classes of individuals and 
        entities furnishing items or services to beneficiaries of such 
        program would be based on the quality of their performance.
            (2) Implementation.--The Secretary shall first implement 
        such system in hospitals. The initial focus of such efforts 
        shall be on quality. The system shall also include incentives 
        for reducing unwarranted geographic variations in quality.
            (3) Authority.--The Secretary may implement the system 
        described in this subsection without regard to any provision of 
        title XVIII of the Social Security Act that would, in the 
        absence of paragraphs (1) and (2), apply with respect to 
        payment to an individual or entity furnishing items or services 
        for which payment may be made under the Medicare program.
    (b) Definition of Information on Quality of Care.--In this section, 
the term ``information on quality of care'' means measures of--
            (1) the use of clinical processes and structures known to 
        improve care;
            (2) health outcomes; and
            (3) patient perceptions of their care.

            Subtitle C--Other Provisions Relating to Part B

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) 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) in clause (i)--
                                    (I) in subclause (III), by striking 
                                ``$4,960,000,000'' and inserting 
                                ``$4,090,000,000'';
                                    (II) by adding at the end the 
                                following new clause:
                                    ``(IV) For expenditures during 2014 
                                through 2017, an amount equal to 
                                $30,660,000,000.''; and
                            (ii) in clause (ii), by adding at the end 
                        the following new subclause:
                                    ``(III) 2014 through 2017.--The 
                                amount available for expenditures 
                                during 2014 through 2017 shall only be 
                                available for an adjustment to the 
                                update of the conversion factor under 
                                subsection (d) for that year.''; and
                    (B) in subparagraph (B)--
                            (i) in clause (ii), by striking ``and'' at 
                        the end;
                            (ii) in clause (iii), by striking the 
                        period at the end and inserting ``; and''; and
                            (iii) by adding at the end the following 
                        new clause:
                            ``(iv) 2014 through 2017 for payment with 
                        respect to physicians' services furnished 
                        during 2014 through 2017.''.
    (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 determined appropriate by the 
                        Secretary for which no measure has 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-based 
                        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)--
                                    (I) in subclause (II), by striking 
                                ``paragraph (2)'' and inserting ``this 
                                subsection''; and
                                    (II) in subclause (IV)--
                                            (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)--
                                    (I) in clause (i), in the matter 
                                preceding subclause (I), by striking 
                                ``1869 or 1878 of the Social Security 
                                Act or otherwise'' and inserting 
                                ``1869, section 1878, or otherwise''; 
                                and
                                    (II) in clause (ii), by striking 
                                ``of the Social Security Act''; 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.
    (e) Implementation.--For purposes of carrying out the provisions 
of, and amendments made by, this title, in addition to any amounts 
otherwise provided in such provisions and amendments, there are 
appropriated to the Centers for Medicare & Medicaid Services Program 
Management Account, out of any money in the Treasury not otherwise 
appropriated, $140,000,000 for the period of fiscal years 2009 through 
2013.

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 (ii) for a period, then the 
                        requirement described in clause (i) 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 1858(c)(3)(B), 1860D-15(d)(2)(B), and 
                        1860D-15(f)(2), the Secretary may use data 
                        submitted for purposes of part D for purposes 
                        of clause (iii) and paragraph (2)(B)(ii). Such 
                        data shall only be used for such purposes.
                            ``(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)--
                    (A) in clause (i), by striking subclause (III) and 
                inserting the following new subclause:
                                    ``(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''; and
                    (B) in clause (ii), by inserting ``or subsection 
                (a)(5)'' after ``this subsection''.
    (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 2011 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 2011, 99 percent;
                                    ``(II) for 2012, 98.5 percent; and
                                    ``(III) for 2013 and each 
                                subsequent year, 98 percent.
                    ``(B) Significant hardship exception.--The 
                Secretary may exempt an eligible professional from the 
                application of the payment adjustment under 
                subparagraph (A) if the Secretary determines that 
                compliance with the requirement for being a successful 
                electronic prescriber would be a significant hardship, 
                such as an eligible professional who practices in a 
                rural area without sufficient Internet access and an 
                eligible professional who frequently sends 
                prescriptions to pharmacies that are not capable of 
                receiving prescriptions electronically.
                    ``(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.''.

SEC. 133. INCREASING THE NUMBER OF SITES FOR THE ELECTRONIC HEALTH 
              RECORDS DEMONSTRATION.

    Out of funds in the Treasury not otherwise appropriated, there are 
appropriated for the period of fiscal years 2009 through 2014, 
$45,000,000 to the Centers for Medicare & Medicaid Services Program 
Management Account for administrative costs to increase the number of 
sites, up to 40, in which the Electronic Health Records Demonstration 
is being conducted.

SEC. 134. PRIMARY CARE IMPROVEMENTS.

    (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 adding at the end the following new 
clause:
                            ``(vi) 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. 135. MEDICARE ANESTHESIA TEACHING PROGRAM IMPROVEMENTS.

    (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.

SEC. 136. MEDICARE COORDINATED CARE PRACTICE RESEARCH NETWORK 
              DEMONSTRATION.

    (a) Demonstration Program.--
            (1) In general.--Not later than October 1, 2009, the 
        Secretary shall establish a demonstration program to test best 
        practices and new and innovative coordinated care projects for 
        Medicare beneficiaries with multiple chronic conditions.
            (2) Demonstration program design.--
                    (A) Initial sites.--The Secretary shall select not 
                less than 8 organizations to participate in the 
                demonstration program under this section initially. The 
                organizations selected under this subparagraph shall 
                meet the following requirements:
                            (i) The organizations are highly qualified 
                        direct providers of coordinated care to 
                        Medicare beneficiaries with multiple chronic 
                        conditions.
                            (ii) The organizations were participants in 
                        the Medicare Coordinated Care Demonstration 
                        under section 4016 of the Balanced Budget Act 
                        of 1997 (42 U.S.C. 1395b-1 note) as of October 
                        1, 2007.
                    (B) Additional sites.--The Secretary may select 
                organizations to participate in the demonstration 
                program under this section in addition to those 
                initially selected under subparagraph (A). The 
                organizations selected under this subparagraph shall 
                meet the following requirements:
                            (i) The organizations are highly qualified 
                        direct providers of coordinated care to 
                        Medicare beneficiaries with multiple chronic 
                        conditions.
                            (ii) The organizations meet such other 
                        criteria as the Secretary determines 
                        appropriate.
            (3) Duration.--
                    (A) In general.--Subject to subparagraph (B), the 
                demonstration program under this section shall be 
                conducted for a 5-year period.
                    (B) Expansion of demonstration program; 
                implementation of demonstration program results.--
                            (i) Expansion of demonstration program.--If 
                        the report under paragraph (5) contains an 
                        evaluation that the demonstration program under 
                        this section--
                                    (I) reduces expenditures under the 
                                Medicare program; or
                                    (II) does not increase expenditures 
                                under the Medicare program and 
                                increases the quality of health care 
                                services provided to Medicare 
                                beneficiaries with multiple chronic 
                                conditions and satisfaction of 
                                beneficiaries and health care 
                                providers;
                        the Secretary shall continue the existing 
                        demonstration program and may expand the 
                        demonstration program.
                            (ii) Implementation of demonstration 
                        program results.--If the report under paragraph 
                        (5) contains an evaluation described in clause 
                        (i), the Secretary may issue regulations to 
                        implement, on a permanent basis, the components 
                        of the demonstration program that are 
                        beneficial to the Medicare program.
            (4) Use of contractor to facilitate communication and 
        information sharing.--
                    (A) In general.--Under the demonstration program 
                under this section, the Secretary shall enter into a 
                contract with a contractor to facilitate communications 
                and data analysis among sites participating in the 
                demonstration program and to share information on best 
                practices with such sites.
                    (B) Duties.--The contractor shall have such duties 
                and responsibilities as are specified by the Secretary, 
                including ensuring, to the extent feasible, that each 
                site participating in the demonstration program under 
                this section receives timely and regular access to data 
                from the other sites participating in the demonstration 
                program to enable each site to modify, refine, and 
                evaluate current and proposed chronic care 
                interventions and new models of care.
    (b) Evaluation and Report.--Not later than 4 years after the 
establishment of the demonstration program under this section, the 
Secretary shall submit a report to Congress on the Medicare chronic 
care practice research network based on an evaluation of the 
demonstration program. Such report shall include an evaluation of the 
effectiveness of each site participating in the demonstration program, 
including the following:
            (1) An analysis of progress made under the demonstration 
        program toward developing an efficient and effective research 
        infrastructure capable of robustly testing new interventions 
        and models of care for Medicare beneficiaries with multiple 
        chronic conditions in a timely manner.
            (2) An evaluation of the impacts of the care coordination 
        models used by each site participating in the demonstration 
        program, including the overall quality of care provided, 
        patient satisfaction, and cost-effectiveness of the 
        interventions tested under the demonstration program at each 
        site.
            (3) An evaluation of the capability of the demonstration 
        program to define and test specifications needed to deploy 
        successful interventions on a large geographic or nationwide 
        scale without loss of effectiveness.
            (4) A description of any benefits to the Medicare program 
        under title XVIII of the Social Security Act resulting from 
        increased collaboration and partnership between participating 
        sites under the demonstration program.
            (5) Any other information regarding the demonstration 
        program that the Secretary determines appropriate.
            (6) Recommendations for practices and guidelines for 
        chronic care, including a summary of the care models found to 
        be most effective in managing Medicare beneficiaries with 
        multiple chronic conditions under the demonstration program 
        under this subsection.
            (7) Recommendations for such legislation and administrative 
        action as the Secretary determines appropriate.
    (c) Funding.--
            (1) Implementation funding.--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 such 
        proportion as the Secretary determines to be appropriate, of 
        $15,000,000 to the Centers for Medicare & Medicaid Services 
        Program Management Account to implement the demonstration 
        program under this section.
            (2) Additional funding.--
                    (A) In general.--In addition to the implementation 
                funding 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 such 
                proportion as the Secretary determines to be 
                appropriate, of such funds as are necessary to the 
                Centers for Medicare & Medicaid Services Program 
                Management Account to carry out the demonstration 
                program under this section.
                    (B) Limitation.--Except with respect to the 
                implementation funding under paragraph (1), in 
                conducting the demonstration program 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 program under this section were not 
                implemented.
    (d) Waiver.--The Secretary shall waive compliance with the 
requirements of title XVIII of the Social Security Act (42 U.S.C. 1395 
et seq.) to such extent and for such period as the Secretary determines 
is necessary to carry out this section.

SEC. 137. 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 diagnostic 
                magnetic resonance imaging, computed tomography, 
                nuclear medicine (including positron emission 
                tomography), and such other diagnostic imaging 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) Disclosure Requirement for Physicians Referring for Imaging 
Services.--
            (1) In general.--Section 1877(b)(2) of the Social Security 
        Act (42 U.S.C. 1395nn(b)(2)) is amended by adding at the end 
        the following new sentence: ``Such requirements shall, with 
        respect to magnetic resonance imaging, computed tomography, 
        positron emission tomography, and any other designated health 
        services specified under subsection (h)(6)(D) that the 
        Secretary determines appropriate, include a requirement that 
        the referring physician inform the individual in writing at the 
        time of the referral that the individual may obtain the 
        services for which the individual is being referred from a 
        person other than a person described in subparagraph (A)(i) and 
        provide such individual with a written list of suppliers (as 
        defined in section 1861(d)) who furnish such services in the 
        area in which such individual resides.''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply to services furnished on or after January 1, 2010.
    (d) GAO Study and Reports on Accreditation Requirement for Advanced 
Diagnostic Imaging Services.--
            (1) Study.--
                    (A) 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.
                    (B) Issues.--The study conducted under subparagraph 
                (A) 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.
            (2) Reports.--
                    (A) Preliminary report.--Not later than March 1, 
                2013, the Comptroller General shall submit a 
                preliminary report to Congress on the study conducted 
                under paragraph (1).
                    (B) Final report.--Not later than March 1, 2014, 
                the Comptroller General shall submit a final report to 
                Congress on the study conducted under paragraph (1), 
                together with recommendations for such legislation and 
                administrative action as the Comptroller General 
                determines appropriate.

SEC. 138. 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. 139. 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. 140. 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 such 
        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 such 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 such 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 such Act (42 U.S.C. 1395x(p)) is 
        amended by striking the fourth sentence.
            (6) Section 1861(s)(2)(D) of such 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 such 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 such 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 such 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 January 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. 141. COVERAGE OF ITEMS AND SERVICES UNDER A CARDIAC REHABILITATION 
              PROGRAM AND A PULMONARY REHABILITATION PROGRAM.

    (a) In General.--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 110-171), is amended--
            (1) in subsection (s)(2)--
                    (A) in subparagraph (Z), by striking ``and'' at the 
                end;
                    (B) in subparagraph (AA), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(BB) items and services furnished under a cardiac 
                rehabilitation program (as defined in subsection (ddd)) 
                or under a pulmonary rehabilitation program (as defined 
                in subsection (eee)).''; and
            (2) by adding at the end the following new subsections:

                    ``Cardiac Rehabilitation Program

    ``(ddd)(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 physician-directed clinic; or
                    ``(iii) in a hospital on an outpatient basis;
            ``(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 is offered--
            ``(A) is responsible for such program; and
            ``(B) in consultation with appropriate staff, is involved 
        substantially in directing the progress of individual patients 
        in the program.

                   ``Pulmonary Rehabilitation Program

    ``(eee)(1) The term `pulmonary rehabilitation program' means a 
physician-supervised program (as described in subsection (ddd)(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 patients 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 patients 
        in the program.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to items and services furnished on or after January 1, 2009.

SEC. 142. REPEAL OF TRANSFER OF OWNERSHIP OF OXYGEN EQUIPMENT.

    (a) In General.--Section 1834(a)(5)(F) of the Social Security Act 
(42 U.S.C. 1395m(a)(5)(F)) is amended--
            (1) in the heading, by striking ``Ownership of equipment'' 
        and inserting ``Rental cap''; and
            (2) 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.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect on January 1, 2009.

SEC. 143. 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. 144. 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. 145. SENSE OF THE SENATE ON DELAYED IMPLEMENTATION OF COMPETITIVE 
              BIDDING FOR DURABLE MEDICAL EQUIPMENT, PROSTHETICS, 
              ORTHOTICS, AND SUPPLIES (DMEPOS).

    It is the Sense of the Senate that--
            (1) the implementation of the durable medical equipment, 
        prosthetics, orthotics, and supplies (DMEPOS) competitive 
        bidding program under section 1847 of the Social Security Act 
        (42 U.S.C. 1395w-3) should be delayed by 18 months in order to 
        review and address ongoing concerns about the bidding process 
        and to ensure continued access to quality medical equipment and 
        supplies for all Medicare beneficiaries; and
            (2) such delay should be offset by a reduction in current 
        payment rates for durable medical equipment, prosthetics, 
        orthotics, and supplies under the Medicare program.

          Subtitle D--End Stage Renal Disease Program Reforms

SEC. 151. 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 may establish pilot projects to--
            ``(1) increase awareness 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.''.
    (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 141(a)(1), is amended--
                            (i) in subparagraph (AA), by striking 
                        ``and'' after the semicolon 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) kidney disease education services (as defined in 
        subsection (fff));''.
                    (B) Services described.--Section 1861 of the Social 
                Security Act (42 U.S.C. 1395x), as amended by section 
                141(a)(2), is amended by adding at the end the 
                following new subsection:

                  ``Kidney Disease Education Services

    ``(fff)(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) The term `qualified person' means--
            ``(A) 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
            ``(B) a renal dialysis facility subject to the requirements 
        of section 1881(b)(1) with personnel who--
                    ``(i) provide the services described in paragraph 
                (1); and
                    ``(ii) meet the requirements of subparagraph (A).
    ``(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)(CC),'' 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(fff)), 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. 152. 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 ``; and''; 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 such 
estimation, 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, 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 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 
        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; and
                    ``(II) 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 updates 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 
        137(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; and
                                    ``(II) 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).
                    ``(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.
            ``(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 April 1, 2012, 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) Any other information or recommendations for 
        legislative and administrative actions determined appropriate 
        by the Comptroller General.

               Subtitle E--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, 0.6 percent; and
                                    ``(II) a subsequent year, the 
                                maximum cumulative adjustment 
                                percentage for the previous year 
                                increased by 0.6 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 QUALITY IMPROVEMENT PROGRAMS.

    (a) Requirement for MA Private Fee-for-Service and MSA Plans To 
Have a Quality Improvement Program.--Section 1852(e)(1) of the Social 
Security Act (42 U.S.C. 1395w-22(e)(1)) is amended by striking ``(other 
than an MA private fee-for-service plan or an MSA plan)''.
    (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)--
                            (i) by striking ``clauses (ii) and (iii)'' 
                        and inserting ``clause (ii)''; and
                            (ii) by adding at the end the following new 
                        sentence: ``With respect to MA private fee-for-
                        service plans and MSA plans, the requirements 
                        under the preceding sentence 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 (ii) 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) by redesignating clauses (iii) and (iv) as 
                clauses (ii) and (iii), respectively; and
                    (D) in clause (ii), as redesignated by subparagraph 
                (C)--
                            (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) Limitation.--Section 1852(e)(3)(B) of the Social 
        Security Act (42 U.S.C. 1395w-22(e)(3)(B)) is amended--
                    (A) in clause (ii), by striking ``subclause (iii)'' 
                and inserting ``clauses (iii) and (iv)''; and
                    (B) by adding at the end the following new clause:
                            ``(iv) Limitation.--Notwithstanding clause 
                        (ii), with respect to MA private fee-for-
                        service plans and MSA plans, to the extent that 
                        services are not services furnished by 
                        providers of services, physicians, or other 
                        health care practitioners and suppliers that 
                        have contracts with the organization offering 
                        the plan, the data required to be collected, 
                        analyzed, and reported under subparagraph 
                        (A)(i) shall only include administrative and 
                        beneficiary survey data.''.
    (c) Effective Date.--The amendments made by this subsection shall 
apply to plan years beginning on or after January 1, 2010.

SEC. 163. 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 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: ``Provisions Regarding Specialized MA 
                        Plans for Special Needs Individuals'';
                            (ii) by designating the sentence beginning 
                        ``In the case of'' as paragraph (1) with the 
                        heading ``Restrictions on 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) Enrollment under the plan is restricted so, 
                of the individuals who are enrolling in the plan on or 
                after January 1, 2009, at least 90 percent of such 
                individuals are individuals who are special needs 
                individuals described in subsection (b)(6)(B)(i). In 
                applying this subparagraph, in order for an individual 
                residing in a community setting but requiring an 
                institutional level of care to be treated as an 
                individual described in such subsection, the individual 
                must be assessed and certified, using a State 
                assessment tool of the State in which the individual 
                resides, as requiring an institutional level of care.
                    ``(B) Effective for plan years beginning on or 
                after January 1, 2010, the plan has in place a model of 
                care plan 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) Enrollment under the plan is restricted so, 
                of the individuals who are enrolling in the plan on or 
                after January 1, 2009, at least 90 percent of such 
                individuals are individuals who are special needs 
                individuals described in subsection (b)(6)(B)(ii).
                    ``(B) Effective for plan years beginning on or 
                after January 1, 2010, the plan has in place a model of 
                care plan described in paragraph (5).
                    ``(C) Effective for plan years beginning on or 
                after January 1, 2012, the plan has documented 
                arrangements with the State Medicaid agency that 
                address cooperation on coordination of the operation of 
                the plan and the State Medicaid plan under title XIX 
                for such special needs individuals and that include at 
                least the following:
                            ``(i) A means for the agency to verify an 
                        enrollee's eligibility for medical assistance 
                        under such title.
                            ``(ii) A means to identify and share 
                        information on provider participation under 
                        such title.
                            ``(iii) A means to supply the specialized 
                        MA plan with information on the benefits to 
                        which an individual enrolled under the State 
                        Medicaid plan and eligible for medical 
                        assistance under title XIX is entitled.
                    ``(D) Effective for plan years beginning on or 
                after January 1, 2010, the plan has necessary 
                arrangements, including arrangements with providers, in 
                order to assure that enrollees who are special needs 
                individuals described in subsection (b)(6)(B)(ii) are 
                not charged or liable for cost-sharing for items and 
                services furnished through the plan and for which they 
                are entitled to benefits under title XIX in excess of 
                the cost-sharing that the individuals would be charged 
                if the individuals were enrolled under the original 
                Medicare fee-for-service program and not under the 
                plan.
                    ``(E) Effective for enrollments made during or 
                after the annual open enrollment period for the plan 
                year beginning on the earlier of January 1, 2012 or the 
                first plan year for which the plan reaches an agreement 
                with the state, the plan provides each prospective 
                enrollee described in subsection (b)(6)(B)(ii), prior 
                to enrollment, with an accurate and easily 
                understandable summary comparison (using a standardized 
                format established by the Secretary) that compares--
                            ``(i) the benefits and cost-sharing that 
                        apply to individuals entitled to benefits under 
                        a State Medicaid program under title XIX if 
                        such individuals enroll in the original 
                        Medicare fee-for-service program under Parts A 
                        and B; and
                            ``(ii) the benefits and cost-sharing that 
                        apply to individuals entitled to benefits under 
                        a State Medicaid program under title XIX if 
                        such individuals enroll in the plan.
                Such summary comparison shall be included with any 
                description of benefits offered by the plan.
            ``(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) Enrollment under the plan is restricted so, 
                of the individuals who are enrolling in the plan on or 
                after January 1, 2009, at least 90 percent of such 
                individuals are individuals who are special needs 
                individuals described in subsection (b)(6)(B)(iii).
                    ``(B) Effective for plan years beginning on or 
                after January 1, 2010, the plan has in place a model of 
                care plan described in paragraph (5).''.
            (2) 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 subsection (b)(6)(B)(ii) of section 1859 of the 
        Social Security Act (42 U.S.C. 1395w-28) as described in 
        subsection (f)(3) of such section, as added by this subsection.
            (3) Rule of construction.--Nothing in the provisions of, or 
        amendments made by, this subsection shall be construed to 
        require a State to enter into a contract or agreement with a 
        Medicare Advantage organization with respect to such plans.
    (d) Model of Care Plan Requirement for All SNPs.--
            (1) In general.--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) Model of care plan requirement for all snps.--A model 
        of care plan described in this paragraph for a specialized MA 
        plan is a model of care plan that specifies how the plan will 
        coordinate and deliver care designed for the plan's enrollees. 
        Such model shall include at least the following:
                    ``(A) Targeting a population of special needs 
                enrollees for whom the plan is designed.
                    ``(B) Coordination of care for enrollees.
                    ``(C) Inclusion of a network of providers and 
                services with clinical expertise relevant to the 
                targeted enrollee population.
                    ``(D) Delivery of care based on appropriate 
                protocols for the targeted enrollee population.
                    ``(E) Application of performance measures to 
                evaluate processes and outcomes of the model.
                    ``(F) At least annually, or more often as each 
                enrollee's situation may require, contacting each 
                enrollee (or the enrollee's representative) and 
                evaluating the enrollee in order to ensure that the 
                model of care is being appropriately applied to such 
                enrollee.''.
            (2) Review to ensure compliance with model of care plan 
        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 model of care plan 
        requirements for specialized medicare advantage plans for 
        special needs individuals.--In conjunction with a general 
        compliance audit of a specialized Medicare Advantage plan for 
        special needs individuals under paragraph (2), the Secretary 
        shall conduct a review to ensure that such plan is in 
        compliance with the model of care plan requirements under 
        section 1859(f)(5).''.
    (e) 1-Year Extension of Moratorium for Chronic Care SNPs.--Section 
108(b)(2) of the Medicare, Medicaid, and SCHIP Extension Act of 2007 
(Public Law 110-173) is amended by inserting after ``December 31, 
2009'' the following: ``(or December 31, 2010, in the case of a 
specialized MA plan for special needs individuals described in section 
1859(b)(6)(B)(iii) of the Social Security Act)''.

SEC. 164. 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. 165. 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) Revisions to Limitation on Extension or Renewal.--
            (1) Clarification regarding use of counties rather than 
        service areas in application of prohibition.--Section 
        1876(h)(5)(C)(ii) of the Social Security Act (42 U.S.C. 
        1395mm(h)(5)(C)(ii)), in the matter preceding subclause (I), is 
        amended by striking ``for a service area'' and all that follows 
        through ``previous year was'' and inserting ``for a county in 
        the service area of such contract insofar as such county during 
        the entire previous year was entirely''.
            (2) 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 Plans That Are Used To Determine 
if Prohibition Is Applicable.--Section 1876(h)(5)(C)(iii) of the Social 
Security Act (42 U.S.C. 1395mm(h)(5)(C)(iii)) is amended--
            (1) in the matter preceding subclause (I)--
                    (A) by inserting ``portion of the plan's'' after 
                ``if the''; and
                    (B) by inserting ``that is within the service area 
                of a reasonable cost reimbursement contract'' after 
                ``for the year''; and
            (2) in subclause (I)--
                    (A) by inserting ``that are not in another 
                Metropolitan Statistical Area with a population of more 
                than 250,000'' after ``such Metropolitan Statistical 
                Area''; and
                    (B) 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 July 1, 2009, the Comptroller 
        General of the United States shall submit a report to Congress 
        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. 166. 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 achieving payment 
                neutrality under the Medicare program with respect to a 
                Medicare beneficiary enrolled in a Medicare Advantage 
                plan and a Medicare beneficiary enrolled in such 
                original Medicare fee-for-service program other than 
                through county-level payment area equivalents, such 
                as--
                            (i) blends of national average per capita 
                        spending under such original Medicare fee-for-
                        service program and local spending under such 
                        original Medicare fee-for-service program;
                            (ii) price adjusting national average per 
                        capita spending under such original Medicare 
                        fee-for-service program by geography and 
                        excluding utilization factors; and
                            (iii) blends of national average per capita 
                        spending under such original Medicare fee-for-
                        service program with Medicare Advantage plan 
                        bids; and
                    (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 December 1, 2009, the Commission shall 
submit a report to Congress containing the results of the study 
conducted under subsection (a), together with recommendations for such 
legislation and administrative action as the Commission determines 
appropriate.

SEC. 167. MARKETING OF MEDICARE ADVANTAGE PLANS AND PRESCRIPTION DRUG 
              PLANS.

    (a) Prohibitions.--
            (1) Medicare advantage program.--
                    (A) In general.--Section 1851(h)(4) of the Social 
                Security Act (42 U.S.C. 1395w-21(h)(4) is amended by 
                striking subparagraph (A) and inserting the following:
                    ``(A) shall not permit a Medicare Advantage 
                organization (or the marketing representatives of such 
                an organization) to--
                            ``(i) provide cash or other remuneration as 
                        an inducement for enrollment or otherwise;
                            ``(ii) offer gifts, except for gifts of 
                        nominal value (as determined by the Secretary), 
                        to potential enrollees;
                            ``(iii) provide meals, regardless of value, 
                        to potential enrollees;
                            ``(iv) solicit door-to-door or through 
                        other unsolicited means of direct contact, 
                        including the telephone and personally 
                        approaching the beneficiary, unless the 
                        beneficiary initiates the contact;
                            ``(v) engage in activities that mislead 
                        beneficiaries about or misrepresent the 
                        Medicare Advantage organization or the Medicare 
                        Advantage plan offered by the organization, 
                        including any activities prohibited under 
                        cobranding standards established by the 
                        Secretary to prevent beneficiaries from being 
                        misled;
                            ``(vi) market non-health care related 
                        products to potential enrollees during any 
                        Medicare Advantage sales activity or 
                        presentation;
                            ``(vii) conduct a marketing appointment 
                        with a beneficiary unless the organization has 
                        a documented agreement with the beneficiary in 
                        advance of the appointment as to what health 
                        care related products will be discussed;
                            ``(viii) conduct sales presentations or 
                        distribute and accept Medicare Advantage plan 
                        enrollment forms in health care provider 
                        offices or, under rules provided by the 
                        Secretary, other places where health care is 
                        delivered; or
                            ``(ix) engage in any other marketing 
                        activity prohibited by the Secretary; and''.
            (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 Marketing.--The following 
provisions shall apply to a PDP sponsor in the same manner as such 
provisions apply to a Medicare Advantage organization:
            ``(1) The prohibitions on the conduct of certain activities 
        under section 1851(h)(4)(A).''.
    (b) Additional Marketing Protections.--
            (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 the following new paragraph:
            ``(6) Additional marketing protections.--
                    ``(A) Confirmation of marketing resources.--Each 
                Medicare Advantage organization shall establish and 
                maintain a system for confirming that individuals who 
                are enrolled in a Medicare Advantage plan offered by 
                the organization--
                            ``(i) have in fact enrolled in such plan; 
                        and
                            ``(ii) understand the rules applicable 
                        under such plan.
                    ``(B) Licensing of marketing representatives.--
                            ``(i) In general.--Each Medicare Advantage 
                        organization shall--
                                    ``(I) only conduct marketing 
                                activities (as defined by the 
                                Secretary) in a State through marketing 
                                representatives who are licensed by the 
                                State; and
                                    ``(II) inform the State that it has 
                                appointed those individuals as 
                                marketing representatives of the 
                                organization, consistent with the 
                                State's appointment laws, except that 
                                no appointment fees shall apply to such 
                                appointment.
                            ``(ii) Marketing representative defined.--
                        In this subsection, the term `marketing 
                        representative' means an employee, agent, 
                        broker, or other third party who conducts 
                        marketing activities (as so defined) for a 
                        Medicare Advantage organization.
                    ``(C) Compliance with state requests for 
                information.--Each Medicare Advantage organization 
                shall comply with State requests for information about 
                the performance of a licensed agent or broker as part 
                of a State investigation into the individual's 
                conduct.''.
            (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 additional marketing protections under section 
        1851(h)(6).''.
    (c) Commissions and Training for Marketing Representatives.--
            (1) Medicare advantage program.--Section 1851(h) of the 
        Social Security Act (42 U.S.C. 1395w-21(h)), as amended by 
        subsection (b)(1), is amended by adding at the end the 
        following new paragraph:
            ``(7) Commissions and training for marketing 
        representatives.--
                    ``(A) Commissions.--Not later than January 1, 2009, 
                the Secretary shall issue rules governing commissions 
                and, as determined appropriate by the Secretary, other 
                compensation offered by Medicare Advantage 
                organizations. Such rules--
                            ``(i) shall be intended to provide 
                        marketing representatives with incentives to 
                        recommend appropriate plan options for 
                        individual beneficiaries; and
                            ``(ii) shall take effect on a date 
                        specified by the Secretary.
                    ``(B) Training.--Each Medicare Advantage 
                organization shall ensure that marketing 
                representatives who sell Medicare products are trained 
                and tested on--
                            ``(i) rules and regulations under the 
                        program under this title; and
                            ``(ii) other information specific to the 
                        Medicare Advantage plan products the 
                        organization intends to sell.''.
            (2) Medicare prescription drug program.--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 requirements with respect to commissions and 
        training for marketing representatives under section 
        1851(h)(7).''.
    (d) Effective Date.--Except as provided in section 1851(h)(7)(A) of 
the Social Security Act, as added by subsection (c)(1), the amendments 
made by this section shall apply with respect to marketing for plan 
years beginning on or after January 1, 2009.

                      Subtitle F--Other Provisions

SEC. 171. 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 subsection, 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 up to $40,000,000 to the 
Centers for Medicare & Medicaid Services Program Management Account for 
the period 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 subsection (a), 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 a report to Congress 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. 172. 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. 173. INCLUSION OF MEDICARE PROVIDERS AND SUPPLIERS IN FEDERAL 
              PAYMENT LEVY AND ADMINISTRATIVE OFFSET PROGRAM.

    (a) In General.--Section 1874 of the Social Security Act (42 U.S.C. 
1395kk) is amended by adding at the end the following new subsection:
    ``(d) Inclusion of Medicare Provider and Supplier Payments in 
Federal Payment Levy Program.--
            ``(1) In general.--The Centers for Medicare & Medicaid 
        Services shall take all necessary steps to participate in the 
        Federal Payment Levy Program under section 6331(h) of the 
        Internal Revenue Code of 1986 as soon as possible and shall 
        ensure that--
                    ``(A) at least 50 percent of all payments under 
                parts A and B are processed through such program 
                beginning within 1 year after the date of the enactment 
                of this section;
                    ``(B) at least 75 percent of all payments under 
                parts A and B are processed through such program 
                beginning within 2 years after such date; and
                    ``(C) all payments under parts A and B are 
                processed through such program beginning not later than 
                September 30, 2011.
            ``(2) Assistance.--The Financial Management Service and the 
        Internal Revenue Service shall provide assistance to the 
        Centers for Medicare & Medicaid Services to ensure that all 
        payments described in paragraph (1) are included in the Federal 
        Payment Levy Program by the deadlines specified in that 
        subsection.''.
    (b) Application of Administrative Offset Provisions to Medicare 
Provider or Supplier Payments.--Section 3716 of title 31, United States 
Code, is amended--
            (1) by inserting ``the Department of Health and Human 
        Services,'' after ``United States Postal Service,'' in 
        subsection (c)(1)(A); and
            (2) by adding at the end of subsection (c)(3) the following 
        new subparagraph:
                    ``(D) This section shall apply to payments made 
                after the date which is 90 days after the enactment of 
                this subparagraph (or such earlier date as designated 
                by the Secretary of Health and Human Services) with 
                respect to claims or debts, and to amounts payable, 
                under title XVIII of the Social Security Act.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

                           TITLE II--MEDICAID

SEC. 201. EXTENSION OF TRANSITIONAL MEDICAL ASSISTANCE (TMA) AND 
              ABSTINENCE EDUCATION PROGRAM THROUGH FISCAL YEAR 2009.

    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 ``September 
        30, 2009'';
            (2) by striking ``the third quarter of fiscal year 2008'' 
        and inserting ``the fourth quarter of fiscal year 2009''; and
            (3) by striking ``the third quarter of fiscal year 2007'' 
        and inserting ``the fourth quarter of fiscal year 2007''.

SEC. 202. EXTENSION OF QUALIFYING INDIVIDUAL (QI) PROGRAM THROUGH 
              FISCAL YEAR 2009.

    (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 ``September 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 ``$375,000,000''; 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 $150,000,000; and
                    ``(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
            (2) in paragraph (3), in the matter preceding subparagraph 
        (A), by striking ``or (H)'' and inserting ``(H), or (J)''.

SEC. 203. MEDICAID DSH EXTENSION THROUGH DECEMBER 31, 2009.

    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 ``for fiscal year 2007 and 
        portions of fiscal year 2008'';
            (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''; and
                    (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. 204. ASSET VERIFICATION THROUGH ACCESS TO INFORMATION HELD BY 
              FINANCIAL INSTITUTIONS.

    (a) Addition of Authority.--Title XIX of the Social Security Act is 
amended by inserting after section 1939 the following new section:

 ``asset verification through access to information held by financial 
                              institutions

    ``Sec. 1940.  (a) Implementation.--
            ``(1) In general.--Subject to the provisions of this 
        section, each State shall implement an asset verification 
        program described in subsection (b), for purposes of 
        determining or redetermining the eligibility of an individual 
        for medical assistance under the State plan under this title.
            ``(2) Plan submittal.--In order to meet the requirement of 
        paragraph (1), each State shall--
                    ``(A) submit not later than a deadline specified by 
                the Secretary consistent with paragraph (3), a State 
                plan amendment under this title that describes how the 
                State intends to implement the asset verification 
                program; and
                    ``(B) provide for implementation of such program 
                for eligibility determinations and redeterminations 
                made on or after 6 months after the deadline 
                established for submittal of such plan amendment.
            ``(3) Phase-in.--
                    ``(A) In general.--
                            ``(i) Implementation in current asset 
                        verification demo states.--The Secretary shall 
                        require those States specified in subparagraph 
                        (C) (to which an asset verification program has 
                        been applied before the date of the enactment 
                        of this section) to implement an asset 
                        verification program under this subsection by 
                        the end of fiscal year 2009.
                            ``(ii) Implementation in other states.--The 
                        Secretary shall require other States to submit 
                        and implement an asset verification program 
                        under this subsection in such manner as is 
                        designed to result in the application of such 
                        programs, in the aggregate for all such other 
                        States, to enrollment of approximately, but not 
                        less than, the following percentage of 
                        enrollees, in the aggregate for all such other 
                        States, by the end of the fiscal year involved:
                                    ``(I) 12.5 percent by the end of 
                                fiscal year 2009.
                                    ``(II) 25 percent by the end of 
                                fiscal year 2010.
                                    ``(III) 50 percent by the end of 
                                fiscal year 2011.
                                    ``(IV) 75 percent by the end of 
                                fiscal year 2012.
                                    ``(V) 100 percent by the end of 
                                fiscal year 2013.
                    ``(B) Consideration.--In selecting States under 
                subparagraph (A)(ii), the Secretary shall consult with 
                the States involved and take into account the 
                feasibility of implementing asset verification programs 
                in each such State.
                    ``(C) States specified.--The States specified in 
                this subparagraph are California, New York, and New 
                Jersey.
                    ``(D) Construction.--Nothing in subparagraph 
                (A)(ii) shall be construed as preventing a State from 
                requesting, and the Secretary approving, the 
                implementation of an asset verification program in 
                advance of the deadline otherwise established under 
                such subparagraph.
            ``(4) Exemption of territories.--This section shall only 
        apply to the 50 States and the District of Columbia.
    ``(b) Asset Verification Program.--
            ``(1) In general.--For purposes of this section, an asset 
        verification program means a program described in paragraph (2) 
        under which a State--
                    ``(A) requires each applicant for, or recipient of, 
                medical assistance under the State plan under this 
                title on the basis of being aged, blind, or disabled to 
                provide authorization by such applicant or recipient 
                (and any other person whose resources are material to 
                the determination of the eligibility of the applicant 
                or recipient for such assistance) for the State to 
                obtain (subject to the cost reimbursement requirements 
                of section 1115(a) of the Right to Financial Privacy 
                Act but at no cost to the applicant or recipient) from 
                any financial institution (within the meaning of 
                section 1101(1) of such Act) any financial record 
                (within the meaning of section 1101(2) of such Act) 
                held by the institution with respect to the applicant 
                or recipient (and such other person, as applicable), 
                whenever the State determines the record is needed in 
                connection with a determination with respect to such 
                eligibility for (or the amount or extent of) such 
                medical assistance; and
                    ``(B) uses the authorization provided under 
                subparagraph (A) to verify the financial resources of 
                such applicant or recipient (and such other person, as 
                applicable), in order to determine or redetermine the 
                eligibility of such applicant or recipient for medical 
                assistance under the State plan.
            ``(2) Program described.--A program described in this 
        paragraph is a program for verifying individual assets in a 
        manner consistent with the approach used by the Commissioner of 
        Social Security under section 1631(e)(1)(B)(ii).
    ``(c) Duration of Authorization.--Notwithstanding section 
1104(a)(1) of the Right to Financial Privacy Act, an authorization 
provided to a State under subsection (b)(1) shall remain effective 
until the earliest of--
            ``(1) the rendering of a final adverse decision on the 
        applicant's application for medical assistance under the 
        State's plan under this title;
            ``(2) the cessation of the recipient's eligibility for such 
        medical assistance; or
            ``(3) the express revocation by the applicant or recipient 
        (or such other person described in subsection (b)(1), as 
        applicable) of the authorization, in a written notification to 
        the State.
    ``(d) Treatment of Right to Financial Privacy Act Requirements.--
            ``(1) An authorization obtained by the State under 
        subsection (b)(1) shall be considered to meet the requirements 
        of the Right to Financial Privacy Act for purposes of section 
        1103(a) of such Act, and need not be furnished to the financial 
        institution, notwithstanding section 1104(a) of such Act.
            ``(2) The certification requirements of section 1103(b) of 
        the Right to Financial Privacy Act shall not apply to requests 
        by the State pursuant to an authorization provided under 
        subsection (b)(1).
            ``(3) A request by the State pursuant to an authorization 
        provided under subsection (b)(1) is deemed to meet the 
        requirements of section 1104(a)(3) of the Right to Financial 
        Privacy Act and of section 1102 of such Act, relating to a 
        reasonable description of financial records.
    ``(e) Required Disclosure.--The State shall inform any person who 
provides authorization pursuant to subsection (b)(1)(A) of the duration 
and scope of the authorization.
    ``(f) Refusal or Revocation of Authorization.--If an applicant for, 
or recipient of, medical assistance under the State plan under this 
title (or such other person described in subsection (b)(1), as 
applicable) refuses to provide, or revokes, any authorization made by 
the applicant or recipient (or such other person, as applicable) under 
subsection (b)(1)(A) for the State to obtain from any financial 
institution any financial record, the State may, on that basis, 
determine that the applicant or recipient is ineligible for medical 
assistance.
    ``(g) Use of Contractor.--For purposes of implementing an asset 
verification program under this section, a State may select and enter 
into a contract with a public or private entity meeting such criteria 
and qualifications as the State determines appropriate, consistent with 
requirements in regulations relating to general contracting provisions 
and with section 1903(i)(2). In carrying out activities under such 
contract, such an entity shall be subject to the same requirements and 
limitations on use and disclosure of information as would apply if the 
State were to carry out such activities directly.
    ``(h) Technical Assistance.--The Secretary shall provide States 
with technical assistance to aid in implementation of an asset 
verification program under this section.
    ``(i) Reports.--A State implementing an asset verification program 
under this section shall furnish to the Secretary such reports 
concerning the program, at such times, in such format, and containing 
such information as the Secretary determines appropriate.
    ``(j) Treatment of Program Expenses.--Notwithstanding any other 
provision of law, reasonable expenses of States in carrying out the 
program under this section shall be treated, for purposes of section 
1903(a), in the same manner as State expenditures specified in 
paragraph (7) of such section.''.
    (b) State Plan Requirements.--Section 1902(a) of such Act (42 
U.S.C. 1396a(a)) is amended--
            (1) in paragraph (69) by striking ``and'' at the end;
            (2) in paragraph (70) by striking the period at the end and 
        inserting ``; and''; and
            (3) by inserting after paragraph (70), as so amended, the 
        following new paragraph:
            ``(71) provide that the State will implement an asset 
        verification program as required under section 1940.''.
    (c) Withholding of Federal Matching Payments for Noncompliant 
States.--Section 1903(i) of such Act (42 U.S.C. 1396b(i)) is amended--
            (1) in paragraph (22) by striking ``or'' at the end;
            (2) in paragraph (23) by striking the period at the end and 
        inserting ``; or''; and
            (3) by adding after paragraph (23) the following new 
        paragraph:
            ``(24) if a State is required to implement an asset 
        verification program under section 1940 and fails to implement 
        such program in accordance with such section, with respect to 
        amounts expended by such State for medical assistance for 
        individuals subject to asset verification under such section, 
        unless--
                    ``(A) the State demonstrates to the Secretary's 
                satisfaction that the State made a good faith effort to 
                comply;
                    ``(B) not later than 60 days after the date of a 
                finding that the State is in noncompliance, the State 
                submits to the Secretary (and the Secretary approves) a 
                corrective action plan to remedy such noncompliance; 
                and
                    ``(C) not later than 12 months after the date of 
                such submission (and approval), the State fulfills the 
                terms of such corrective action plan.''.
    (d) Repeal.--Section 4 of Public Law 110-90 is repealed.

SEC. 205. APPLICATION OF MEDICARE PAYMENT ADJUSTMENT FOR CERTAIN 
              HOSPITAL-ACQUIRED CONDITIONS TO PAYMENTS FOR INPATIENT 
              HOSPITAL SERVICES UNDER MEDICAID.

    (a) State Plan Requirement.--Section 1902(a)(13)(A)(iv) of the 
Social Security Act (42 U.S.C. 1396a(a)(13)(A)(iv)) is amended--
            (1) by striking ``rates take'' and inserting ``rates--
                                    ``(I) take'';
            (2) by striking the semicolon and inserting a comma; and
            (3) by adding at the end the following:
                                    ``(II) ensure that higher payments 
                                are not made for services related to 
                                the presence of a condition that could 
                                be identified by a secondary diagnostic 
                                code described in section 
                                1886(d)(4)(D);''.
    (b) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by subsection (a) take effect on October 1, 
        2008.
            (2) Extension of effective date for state law amendment.--
        In the case of a State plan under title XIX of the Social 
        Security Act (42 U.S.C. 1396 et seq.) which the Secretary of 
        Health and Human Services determines requires State legislation 
        in order for the plan to meet the additional requirements 
        imposed by the amendments made by this section, the State plan 
        shall not be regarded as failing to comply with the 
        requirements of such title solely on the basis of its failure 
        to meet these additional 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 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.

SEC. 206. REDUCTION IN PAYMENTS FOR MEDICAID ADMINISTRATIVE COSTS TO 
              PREVENT DUPLICATION OF SUCH PAYMENTS UNDER TANF.

    Section 1903 of the Social Security Act (42 U.S.C. 1396b) is 
amended--
            (1) in subsection (a)(7), by striking ``section 
        1919(g)(3)(B)'' and inserting ``subsection (h)'';
            (2) in subsection (a)(2)(D) by inserting ``, subject to 
        subsection (g)(3)(C) of such section'' after ``as are 
        attributable to State activities under section 1919(g)''; and
            (3) by adding after subsection (g) the following new 
        subsection:
    ``(h) Reduction in Payments for Administrative Costs To Prevent 
Duplication of Payments Under Title IV.--Beginning with the calendar 
quarter commencing October 1, 2008, the Secretary shall reduce the 
amount paid to each State under subsection (a)(7) for each quarter by 
an amount equal to \1/4\ of the annualized amount determined for the 
Medicaid program under section 16(k)(2)(B) of the Food Stamp Act of 
1977 (7 U.S.C. 2025(k)(2)(B)).''.

SEC. 207. CLARIFICATION TREATMENT OF REGIONAL MEDICAL CENTER.

    (a) In General.--Nothing in section 1903(w) of the Social Security 
Act (42 U.S.C. 1396b(w)) shall be construed by the Secretary of Health 
and Human Services as prohibiting a State's use of funds as the non-
Federal share of expenditures under title XIX of such Act where such 
funds are transferred from or certified by a publicly-owned regional 
medical center located in another State and described in subsection 
(b), so long as the Secretary determines that such use of funds is 
proper and in the interest of the program under title XIX.
    (b) Center Described.--A center described in this subsection is a 
publicly-owned regional medical center that--
            (1) provides level 1 trauma and burn care services;
            (2) provides level 3 neonatal care services;
            (3) is obligated to serve all patients, regardless of 
        ability to pay;
            (4) is located within a Standard Metropolitan Statistical 
        Area (SMSA) that includes at least 3 States;
            (5) provides services as a tertiary care provider for 
        patients residing within a 125-mile radius; and
            (6) meets the criteria for a disproportionate share 
        hospital under section 1923 of such Act (42 U.S.C. 1396r-4) in 
        at least one State other than the State in which the center is 
        located.

SEC. 208. GRANTS TO IMPROVE OUTREACH AND ENROLLMENT UNDER MEDICAID.

    (a) Authority To Award Grants.--From the amounts appropriated for a 
fiscal year under subsection (g), the Secretary shall award grants to 
eligible entities to conduct outreach and enrollment efforts that are 
designed to increase the enrollment and participation of eligible 
individuals under Medicaid.
    (b) Priority for Award of Grants.--
            (1) In general.--In awarding grants under subsection (a), 
        the Secretary shall give priority to eligible entities that--
                    (A) propose to target geographic areas with high 
                rates of--
                            (i) individuals who are eligible for, but 
                        unenrolled in, Medicaid, including such 
                        individuals who reside in rural areas; or
                            (ii) racial and ethnic minorities and 
                        health disparity populations, including those 
                        proposals that address cultural and linguistic 
                        barriers to enrollment; and
                    (B) submit the most demonstrable evidence required 
                under paragraphs (1) and (2) of subsection (c).
            (2) 10 percent set aside for outreach to indians.--An 
        amount equal to 10 percent of the funds appropriated under 
        subsection (g) for a fiscal year shall be used by the Secretary 
        to award grants to Indian Health Service providers and urban 
        Indian organizations receiving funds under title V of the 
        Indian Health Care Improvement Act (25 U.S.C. 1651 et seq.) for 
        outreach to, and enrollment of, individuals who are Indians.
    (c) Application.--An eligible entity that desires to receive a 
grant under subsection (a) shall submit an application to the Secretary 
in such form and manner, and containing such information, as the 
Secretary may decide. Such application shall include--
            (1) evidence demonstrating that the entity includes members 
        who have access to, and credibility with, ethnic or low-income 
        populations in the communities in which activities funded under 
        the grant are to be conducted;
            (2) evidence demonstrating that the entity has the ability 
        to address barriers to enrollment, such as lack of awareness of 
        eligibility, stigma concerns and punitive fears associated with 
        receipt of benefits, and other cultural barriers to applying 
        for and receiving medical assistance;
            (3) specific quality or outcomes performance measures to 
        evaluate the effectiveness of activities funded by a grant 
        awarded under this section; and
            (4) an assurance that the eligible entity shall--
                    (A) conduct an assessment of the effectiveness of 
                such activities against the performance measures;
                    (B) cooperate with the collection and reporting of 
                enrollment data and other information in order for the 
                Secretary to conduct such assessments; and
                    (C) in the case of an eligible entity that is not a 
                State, provide each State in which the eligible entity 
                conducts outreach activities with grant funds with 
                enrollment data and other information as necessary for 
                each such State to administer its State Medicaid 
                program.
    (d) Dissemination of Enrollment Data and Information Determined 
From Effectiveness Assessments; Annual Report.--The Secretary shall--
            (1) make publicly available the enrollment data and 
        information collected and reported in accordance with 
        subsection (c)(4)(B); and
            (2) not later than December 31, 2009, submit a report to 
        Congress on the outreach and enrollment activities conducted 
        with funds appropriated under this section.
    (e) Supplement, Not Supplant.--Federal funds awarded under this 
section shall be used to supplement, not supplant, non-Federal funds 
that are otherwise available for activities funded under this section.
    (f) Definitions.--In this section:
            (1) Eligible entity.--The term ``eligible entity'' means 
        any of the following:
                    (A) A State.
                    (B) A local government.
                    (C) An Indian tribe or tribal consortium, a tribal 
                organization, an urban Indian organization receiving 
                funds under title V of the Indian Health Care 
                Improvement Act (25 U.S.C. 1651 et seq.), or an Indian 
                Health Service provider.
                    (D) A Federal health safety net organization.
                    (E) A State, national, local, or community-based 
                public or nonprofit private organization.
                    (F) A faith-based organization or consortia, to the 
                extent that a grant awarded to such an entity is 
                consistent with the requirements of section 1955 of the 
                Public Health Service Act (42 U.S.C. 300x-65) relating 
                to a grant award to non-governmental entities.
                    (G) An elementary or secondary school.
            (2) Federal health safety net organization.--The term 
        ``Federal health safety net organization'' means--
                    (A) a federally-qualified health center (as defined 
                in section 1905(l)(2)(B) of the Social Security Act (42 
                U.S.C. 1396d(l)(2)(B));
                    (B) a hospital defined as a disproportionate share 
                hospital for purposes of section 1923 of such Act (42 
                U.S.C. 1396r-4);
                    (C) a covered entity described in section 
                340B(a)(4) of the Public Health Service Act (42 U.S.C. 
                256b(a)(4)); and
                    (D) any other entity or consortium that serves 
                children under a federally-funded program, including 
                the special supplemental nutrition program for women, 
                infants, and children (WIC) established under section 
                17 of the Child Nutrition Act of 1966 (42 U.S.C. 1786), 
                the head start and early head start programs under the 
                Head Start Act (42 U.S.C. 9801 et seq.), the school 
                lunch program established under the Richard B. Russell 
                National School Lunch Act, and an elementary or 
                secondary school.
            (3) Indians; indian tribe; tribal organization; urban 
        indian organization.--The terms ``Indian'', ``Indian tribe'', 
        ``tribal organization'', and ``urban Indian organization'' have 
        the meanings given such terms in section 4 of the Indian Health 
        Care Improvement Act (25 U.S.C. 1603).
            (4) Medicaid.--The term ``Medicaid'' means the program of 
        medical assistance established under title XIX of the Social 
        Security Act (42 U.S.C. 1396 et seq.).
    (g) Appropriation.--There is appropriated, out of any money in the 
Treasury not otherwise appropriated, for the purpose of awarding grants 
under this section, $25,000,000 for fiscal year 2009, to remain 
available until expended. Amounts appropriated and paid under the 
authority of this section to an eligible entity that is a State shall 
be in addition to amounts paid to the State under section 1903(a) of 
the Social Security Act (42 U.S.C. 1396b(a)).

                        TITLE III--MISCELLANEOUS

SEC. 301. EXTENSION OF TANF SUPPLEMENTAL GRANTS THROUGH FISCAL YEAR 
              2009.

    (a) Extension.--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. SPECIAL DIABETES PROGRAMS FOR TYPE I DIABETES AND INDIANS.

    (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)(C)) 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 final report on such evaluation not later than 
        January 1, 2011.''.

SEC. 303. ADDITIONAL FUNDING FOR STATE HEALTH INSURANCE ASSISTANCE 
              PROGRAMS, AREA AGENCIES ON AGING, AND AGING AND 
              DISABILITY RESOURCE CENTERS.

    (a) State Heath Insurance Programs.--
            (1) In general.--Paragraph (2) of section 118(a) of the 
        Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law 
        110-173) is amended by inserting ``and of $19,000,000 to such 
        account for fiscal year 2009'' before the period at the end.
            (2) Amount of grants.--The amount of a grant to a State 
        under such section 118(a) from the total amount made available 
        under that section for fiscal year 2009 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 section 118(a) of such Act for fiscal 
                year 2009 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 section 118(a) of such Act for fiscal 
                year 2009 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 section 
        118(a) of such Act 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 (c)).
    (b) Area Agencies on Aging and Disability Resource Centers.--
            (1) In general.--Paragraph (2) of section 118(b) of the 
        Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law 
        110-173) is amended by striking ``for the period of fiscal 
        years 2008 through 2009'' and inserting ``for fiscal year 2008 
        and of $6,000,000 to such account for fiscal year 2009''.
            (2) Amount of grant.--The amount of a grant to a State 
        under such section 118(b) from the total amount made available 
        under that section for fiscal year 2009 shall be determined in 
        the same manner as the amount of a grant to a State under 
        section 118(a) of the Medicare, Medicaid, and SCHIP Extension 
        Act of 2007 (Public Law 110-173) is determined for fiscal year 
        2009.
            (3) Allocation and use of portion of grant funds to provide 
        outreach to individuals who may be subsidy eligible individuals 
        or eligible for the medicare savings program.--
                    (A) Allocation.--The total amount available under 
                section 118(b) of the Medicare, Medicaid, and SCHIP 
                Extension Act of 2007 (Public Law 110-173) for fiscal 
                year 2009 shall be allocated to States in the same 
                manner as the amount made available for such fiscal 
                year under section 118(a) of such Act is allocated to 
                States under subparagraphs (A) and (B) of subsection 
                (a)(3) of this Act.
                    (B) Use of portion of grant funds to provide 
                outreach to individuals who may be subsidy eligible 
                individuals or eligible for the medicare savings 
                program.--Paragraph (4) of subsection (a) of this Act 
                shall apply to the amounts allocated under this 
                paragraph in the same manner such paragraph applies to 
                the amounts allocated under subsection (a)(3) of this 
                Act.
    (c) 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).

SEC. 304. EXTENSION OF FEDERAL REIMBURSEMENT OF EMERGENCY HEALTH 
              SERVICES FURNISHED TO UNDOCUMENTED ALIENS.

    Section 1011(a) of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (42 U.S.C. 13955dd note) is amended--
            (1) in paragraph (1), by inserting ``and $200,000,000 for 
        each of fiscal years 2009 and 2010,'' after ``2008'';
            (2) by redesignating paragraph (2) as paragraph (3); and
            (3) by inserting after paragraph (1) the following new 
        paragraph:
            ``(2) Administrative costs.--From the funds made available 
        under paragraph (1) for fiscal year 2009, the Secretary may use 
        not more than $8,000,000 of such funds for the administration 
        of this section.''.
                                                       Calendar No. 776

110th CONGRESS

  2d Session

                                S. 3118

_______________________________________________________________________

                                 A BILL

 To amend titles XVIII and XIX of the Social Security Act to preserve 
 beneficiary access to care by preventing a reduction in the Medicare 
  physician fee schedule, to improve the quality of care by advancing 
   value based purchasing, electronic health records, and electronic 
prescribing, and to maintain and improve access to care in rural areas, 
                        and for other purposes.

_______________________________________________________________________

                             June 12, 2008

            Read the second time and placed on the calendar
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