II

106TH CONGRESS

1ST SESSION S. 1959

To provide for the fiscal responsibility of the Federal Government.

IN THE SENATE OF THE UNITED STATES

NOVEMBER 18, 1999

Mr. HARKIN introduced the following bill; which was read twice and referred

to the Committee on Finance

A BILL

To provide for the fiscal responsibility of the Federal

Government.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

5 ‘‘Fiscal Responsibility Act of 1999’’.

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

7 this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—INCREASED ACCOUNTABILITY AND ELIMINATION OF

WASTEFUL SPENDING

Subtitle A—Penalties for Failure to Reduce Teen Smoking

Sec. 101. Child cigarette use surveys.

Sec. 102. Cigarette use reduction goal and noncompliance.
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Sec. 103. Enforcement.

Subtitle B—Tobacco Advertising

Sec. 111. Disallowance of deductions for advertising and promotional expenses

relating to tobacco product use.

Subtitle C—Medicare Waste Elimination

Sec. 121. Short title.

Sec. 122. Increased medical reviews and antifraud activities.

Sec. 123. Oversight of home health agencies.

Sec. 124. No markup for drugs or biologicals.

Sec. 125. Ensuring that the medicare program does not reimburse claims owed

by other payers.

Sec. 126. Extension of subpoena and injunction authority.

Sec. 127. Civil monetary penalties for services ordered or prescribed by an excluded individual or entity.

Sec. 128. Civil monetary penalties for false certification of eligibility to receive

partial hospitalization and hospice services.

Sec. 129. Application of certain provisions of the bankruptcy code.

Sec. 130. Improving private sector coordination in combatting health care

fraud.

Sec. 131. Fees for agreements with medicare providers and suppliers.

Sec. 132. Increased medicare compliance, education, and assistance for health

care providers.

Sec. 133. Paperwork and administrative hassle reduction.

Sec. 134. Clarification of application of sanctions to Federal health care programs.

Sec. 135. Payments for durable medical equipment.

Sec. 136. Implementation of commercial claims auditing systems.

Sec. 137. Partial hospitalization payment reforms.

Sec. 138. Expansion of medicare senior waste patrol nationwide.

Sec. 139. Application of inherent reasonableness to all part B services other

than physicians’ services.

Sec. 140. Standards regarding payment for certain orthotics and prosthetics.

Sec. 141. Increased flexibility in contracting for medicare claims processing.

Subtitle D—Reduction in Student Loan Fees

Sec. 151. Reduction in student loan fees.

Subtitle E—Limitations on Defense Funding for Fiscal Years 2000 Through

2004

Sec. 161. Budget authority.

Sec. 162. Protection of readiness and quality of life.

Sec. 163. Expenditures not considered emergency expenditures.

Subtitle F—Internal Revenue Code Provisions

Sec. 171. Recapture of unified credit for large estates.

Sec. 172. Repeal of percentage depletion for certain nonfuel minerals mined on

Federal lands.

Sec. 173. Repeal of foreign earned income exclusion.

Sec. 174. Depreciation adjustments for tobacco manufacturing equipment.

Sec. 175. Foreign oil and gas income.
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Sec. 176. Transfer pricing.

TITLE II—MISCELLANEOUS PROVISIONS TO REDUCE WASTEFUL

SPENDING

Sec. 201. Prohibition on funding Television Marti and Radio Marti.

Sec. 202. Prohibition of use of Federal funds for lobbying.

Sec. 203. Prohibition of funding of the nuclear energy research initiative.

Sec. 204. Reduction in government agency spending on travel, printing, supplies and other items.

Sec. 205. Reducing student loan defaults.

1 TITLE I—INCREASED ACCOUNT2 ABILITY AND ELIMINATION

3 OF WASTEFUL SPENDING

4 Subtitle A—Penalties for Failure to

5 Reduce Teen Smoking

6 SEC. 101. CHILD CIGARETTE USE SURVEYS.

7 (a) ANNUAL PERFORMANCE SURVEY.—

8 (1) IN GENERAL.—Not later than August 31,

9 2000, and annually thereafter, the Secretary of

10 Health and Human Services (referred to in this sec11 tion as the ‘‘Secretary’’) shall publish the results of

12 an annual cigarette survey, to be carried out after

13 the date of enactment of this Act and completed

14 prior to August 21, 2000, and prior to August 21

15 of each year thereafter, to determine—

16 (A) the percentage of all young individuals

17 who used a type of cigarette within the 30-day

18 period prior to the conduct of the survey in19 volved; and
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1 (B) the percentage of young individuals

2 who identify each brand of each type of ciga3 rette as the usual brand smoked within such

4 30-day period.

5 (2) YOUNG INDIVIDUALS.—For the purposes of

6 this title, the term ‘‘young individuals’’ means indi7 viduals who are under 18 years of age.

8 (b) SIZE AND METHODOLOGY.—

9 (1) IN GENERAL.—The survey referred to in

10 subsection (a) shall be comparable in size and meth11 odology to the Monitoring the Future survey that

12 was completed in 1999 to measure the use of ciga13 rettes (by brand) by youths under 18 years of age

14 within the 30 day period prior to the conduct of the

15 study.

16 (2) CONCLUSIVE ACCURATENESS.—A survey

17 using the methodology described in paragraph (1)

18 shall be deemed conclusively proper, correct and ac19 curate for purposes of this section.

20 (3) DEFINITION.—In this subtitle, the term

21 ‘‘Monitoring the Future survey’’ means the com22 bined survey of 8th, 10th, and 12th grade students

23 that was conducted at the Institute for Social Re24 search at the University of Michigan.
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1 (c) REDUCTION.—The Secretary, based on a com2 parison of the results of the first annual cigarette survey

3 referred to in subsection (a) and the Monitoring the Fu4 ture survey referred to in subsection (b)(1), shall deter5 mine the percentage reduction (if any) in youth cigarette

6 use for each manufacturer of cigarettes.

7 (d) PARTICIPATION IN SURVEY.—Notwithstanding

8 any other provision of law, the Secretary may conduct a

9 survey under this section involving minors if the results

10 of such survey with respect to such minors are kept con11 fidential and not disclosed.

12 (e) NONAPPLICABILITY.—Chapter 35 of title 44,

13 United States Code, shall not apply to information re14 quired for the purposes of carrying out this section.

15 (f) DEFINITION.—In this subtitle the term ‘‘ciga16 rette’’ has the meaning given such term in section 3(1)

17 of the Federal Cigarette Labeling and Advertising Act (15

18 U.S.C. 1332(1)).

19 SEC. 102. CIGARETTE USE REDUCTION GOAL AND NON20 COMPLIANCE.

21 (a) GOAL.—It shall be the cigarette use reduction

22 goal that each manufacturer reduce youth cigarette use

23 by at least 15 percent during the period between the Moni24 toring the Future survey referred to in section 101(b)(1)

25 and the completion of the first annual cigarette survey
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1 (and such subsequent surveys as compared to the previous

2 year’s survey) referred to in section 101(a).

3 (b) NONCOMPLIANCE.—

4 (1) INDUSTRY-WIDE PENALTY.—If the Sec5 retary determines that the cigarette use reduction

6 goal under subsection (a) has not been achieved, the

7 Secretary shall, not later than September 10, 2000,

8 and September 10 of each year thereafter, impose

9 an industry-wide penalty on the manufacturers of

10 cigarettes in an amount that is in the aggregate

11 equal to—

12 (A) if youth cigarette use has been reduced

13 by 5 percent or less, $8,000,000,000;

14 (B) if youth cigarette use has been reduced

15 by at least 6 percent but less than 10 percent,

16 $6,000,000,000; and

17 (C) if youth cigarette use has been reduced

18 by at least 11 percent but less than 15 percent,

19 $4,000,000,000.

20 (2) PAYMENT.—The industry-wide penalty im21 posed under this subsection shall be paid by each

22 manufacturer based on the percentage of cigarettes

23 of each such manufacturer that are used by youth

24 (as determined under the Monitoring the Future

25 survey and compared to the cigarettes manufactured
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1 by all manufacturers) as such percentage relates to

2 the total amount to be paid by all manufacturers.

3 (3) FINAL DETERMINATION.—The determina4 tion of the Secretary as to the amount and allocation

5 of a surcharge under this subtitle shall be final and

6 the manufacturer shall pay such surcharge within 10

7 days of the date on which the manufacturer is as8 sessed. Such payment shall be retained by the Sec9 retary pending final judicial review of what, if any,

10 change in the surcharge is appropriate.

11 (4) COMPLIANCE BY CERTAIN MANUFACTUR12 ERS.—A manufacturer that individually complies

13 with the goal under subsection (a) shall not be liable

14 for the payment of any portion of the penalty under

15 this subsection.

16 (5) LIMITATION.—With respect to cigarettes, a

17 manufacturer with a market share of 1 percent or

18 less of youth cigarette use shall not be liable for the

19 payment of a surcharge under this section.

20 (c) PENALTIES NONDEDUCTIBLE.—The payment of

21 penalties under this subtitle shall not be considered to be

22 an ordinary and necessary expense in carrying on a trade

23 or business for purposes of the Internal Revenue Code of

24 1986 and shall not be deductible.

25 (d) JUDICIAL REVIEW.—
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1 (1) AFTER PAYMENT.—A manufacturer of ciga2 rettes may seek judicial review of any action under

3 this subtitle only after the assessment involved has

4 been paid by the manufacturer to the Department of

5 the Treasury and only in the United States District

6 Court for the District of Columbia.

7 (2) REVIEW BY ATTORNEY GENERAL.—Prior to

8 the filing of an action by a manufacturer seeking ju9 dicial review of an action under this subtitle, the

10 manufacturer shall notify the Attorney General of

11 such intent to file and the Attorney General shall

12 have 30 days in which to respond to the action.

13 (3) REVIEW.—The amount of any surcharge

14 paid under this subtitle shall be subject to judicial

15 review by the United States Court of Appeals for the

16 District of Columbia Circuit, based on the arbitrary

17 and capricious standard of section 706 of title 5,

18 United States Code. Notwithstanding any other pro19 vision of law, no court shall have the authority to

20 stay any surcharge payment due to the Secretary

21 under this subtitle pending judicial review until the

22 Secretary has made or failed to make a compliance

23 determination, as described under this subtitle, that

24 has adversely affected the person seeking the review.
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1 SEC. 103. ENFORCEMENT.

2 (a) INITIAL PENALTY.—There is hereby imposed an

3 initial penalty on the failure of any manufacturer to make

4 any payment required under this subtitle within 10 days

5 after the date on which such payment is due.

6 (b) AMOUNT OF PENALTY.—The amount of the pen7 alty imposed by subsection (a) on any failure with respect

8 to a manufacturer shall be an amount equal to 2 percent

9 of the penalty owed under section 102 for each day during

10 the noncompliance period.

11 (c) NONCOMPLIANCE PERIOD.—For purposes of this

12 section, the term ‘‘noncompliance period’’ means, with re13 spect to any failure to make the surcharge payment re14 quired under this subtitle, the period—

15 (1) beginning on the due date for such pay16 ment; and

17 (2) ending on the date on which such payment

18 is paid in full.

19 (d) LIMITATIONS.—No penalty shall be imposed by

20 subsection (a) on—

21 (1) any failure to make a surcharge payment

22 under this subtitle during any period for which it is

23 established to the satisfaction of the Secretary that

24 none of the persons responsible for such failure

25 knew or, exercising reasonable diligence, would have

26 known, that such failure existed; or
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1 (2) any manufacturer that produces less than 1

2 percent of cigarettes used by youth in that year (as

3 determined by the annual survey).

4 Subtitle B—Tobacco Advertising

5 SEC. 111. DISALLOWANCE OF DEDUCTIONS FOR ADVER6 TISING AND PROMOTIONAL EXPENSES RE7 LATING TO TOBACCO PRODUCT USE.

8 (a) IN GENERAL.—Part IX of subchapter B of chap9 ter 1 of subtitle A of the Internal Revenue Code of 1986

10 (relating to items not deductible) is amended by adding

11 at the end the following new section:

12 ‘‘SEC. 280I. DISALLOWANCE OF DEDUCTION FOR TOBACCO

13 ADVERTISING AND PROMOTIONAL EX14 PENSES.

15 No deduction shall be allowed under this chapter for

16 expenses relating to advertising or promoting cigars, ciga17 rettes, smokeless tobacco, pipe tobacco, or any similar to18 bacco product. For purposes of this section, any term used

19 in this section which is also used in section 5702 shall

20 have the same meaning given such term by section 5702.’’

21 (b) CONFORMING AMENDMENT.—The table of sec22 tions for such part IX is amended by adding after the

23 item relating to section 280H the following new item:

‘‘Sec. 280I. Disallowance of deduction for tobacco advertising

and promotion expenses.’’
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to taxable years ending after De3 cember 31, 1999.

4 Subtitle C—Medicare Waste

5 Elimination

6 SEC. 121. SHORT TITLE.

7 This subtitle may be cited as the ‘‘Medicare Waste

8 Tax Reduction Act of 1999’’.

9 SEC. 122. INCREASED MEDICAL REVIEWS AND ANTIFRAUD

10 ACTIVITIES.

11 Section 1893(d) of the Social Security Act (42 U.S.C.

12 1395ddd(d)) is amended by inserting after paragraph (3)

13 the following:

14 ‘‘(4) In the case of the year 2000 and each sub15 sequent year, procedures to ensure that—

16 ‘‘(A) the number of medical reviews, utili17 zation reviews, and fraud reviews in a fiscal

18 year of providers of services and other individ19 uals and entities furnishing items and services

20 for which payment may be made under this title

21 (as a percentage of total claims paid) is equal

22 to at least twice the number of such reviews

23 that were conducted in fiscal year 1999;

24 ‘‘(B) the number of provider cost reports

25 audited in a fiscal year is equal to at least—
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1 ‘‘(i) 15 percent of those submitted by

2 a home health agency or a skilled nursing

3 facility; and

4 ‘‘(ii) twice the number of such reports

5 that were audited in fiscal year 1999 for

6 those submitted by any other provider of

7 services or any other individual or entity

8 furnishing items and services for which

9 payment may be made under this title; and

10 ‘‘(C) in determining which providers of

11 services, individuals, entities, or cost reports to

12 review or audit, priority is placed on providers,

13 individuals, entities, and areas that the Sec14 retary determines are subject to abuse and

15 most likely to result in mispayment or overpay16 ment recoveries.’’.

17 SEC. 123. OVERSIGHT OF HOME HEALTH AGENCIES.

18 Section 1891(c) of the Social Security Act (42 U.S.C.

19 1395bbb(c)) is amended by adding at the end the fol20 lowing:

21 ‘‘(3)(A)(i) The Secretary shall conduct onsite surveys

22 of a representative sample of home health agencies in each

23 State, in a sufficient number to allow inferences about the

24 adequacies of each State’s surveys conducted under this

25 subsection.
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1 ‘‘(ii) A survey described in clause (i) shall be con2 ducted by the Secretary within 2 months of the date of

3 the survey conducted by the State and may be conducted

4 concurrently with the State survey.

5 ‘‘(iii) In conducting a survey described in clause (i),

6 the Secretary shall use the same survey protocols as the

7 State is required to use under this subsection.

8 ‘‘(iv) If, through a State survey, the State has deter9 mined that a home health agency is in compliance with

10 the requirements specified in or pursuant to section

11 1861(o), this section, or this title, but the Secretary deter12 mines (after conducting the survey described in clause (i))

13 that the facility does not meet such requirements, the Sec14 retary’s determination as to the facility’s noncompliance

15 with such requirements is binding and supersedes that of

16 the State survey.

17 ‘‘(B) With respect to each State, the Secretary shall

18 conduct surveys under subparagraph (A) each year with

19 respect to at least 5 percent of the number of home health

20 agencies surveyed by the State in the year, but in no case

21 less than 5 home health agencies in the State.

22 ‘‘(C) If the Secretary finds, on the basis of such sur23 veys, that a State has failed to perform surveys as re24 quired under this subsection or that a State’s survey and

25 certification performance otherwise is not adequate, the
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1 Secretary shall provide for an appropriate remedy, which

2 may include the training of survey teams in the State.

3 ‘‘(D) If the Secretary has reason to question the com4 pliance of a home health agency with any of the require5 ments specified in or pursuant to section 1861(o), this sec6 tion, or this title, the Secretary may conduct a survey of

7 the agency and, on the basis of that survey, make inde8 pendent and binding determinations concerning the extent

9 to which the home health agency meets such require10 ments.’’.

11 SEC. 124. NO MARKUP FOR DRUGS OR BIOLOGICALS.

12 (a) IN GENERAL.—Section 1842(o) of the Social Se13 curity Act (42 U.S.C. 1395u(o)) is amended to read as

14 follows:

15 ‘‘(o)(1) If a physician’s, supplier’s, or any other per16 son’s bill or request for payment for services includes a

17 charge for a drug or biological for which payment may

18 be made under this part and the drug or biological is not

19 paid on a cost or prospective payment basis as otherwise

20 provided in this part, the payment amount established in

21 this subsection for the drug or biological shall be the low22 est of the following:

23 ‘‘(A) The actual acquisition cost, as defined in

24 paragraph (2), to the person submitting the claim

25 for payment for the drug or biological.
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1 ‘‘(B) 83 percent of the average wholesale price

2 of such drug or biological, as determined by the Sec3 retary.

4 ‘‘(C) For payments for any drug or biological

5 furnished on or after January 1, 2001, the median

6 actual acquisition cost of all claims for payment for

7 such drug or biological for the 12-month period be8 ginning July 1, 1999 (and adjusted, as the Sec9 retary determines appropriate, to reflect changes in

10 the cost of such drug or biological due to inflation,

11 and such other factors as the Secretary determines

12 appropriate).

13 ‘‘(D) The amount otherwise determined under

14 this part.

15 ‘‘(2) For purposes of paragraph (1)(A), the term ‘ac16 tual acquisition cost’ means, with respect to such drug or

17 biological, the cost of the drug or biological based on the

18 most economical case size in inventory on the date of dis19 pensing or, if less, the most economical case size pur20 chased within 6 months of the date of dispensing whether

21 or not that specific drug or biological was furnished to

22 an individual whether or not enrolled under this part.

23 Such term includes appropriate adjustments, as deter24 mined by the Secretary, for all discounts, rebates, or any

25 other benefit in cash or in kind (including travel, equip-
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1 ment, or free products). The Secretary shall include an

2 additional payment for administrative, storage, and han3 dling costs.

4 ‘‘(3)(A) No payment shall be made under this part

5 for any drug or biological to a person whose bill or request

6 for payment for such drug or biological does not include

7 a statement of the person’s actual acquisition cost.

8 ‘‘(B) A person may not bill an individual enrolled

9 under this part—

10 ‘‘(i) any amount other than the payment

11 amount specified in paragraph (1) or (4) (plus any

12 applicable deductible and coinsurance amounts), or

13 ‘‘(ii) any amount for such drug or biological for

14 which payment may not be made pursuant to sub15 paragraph (A).

16 ‘‘(C) If a person knowingly and willfully in repeated

17 cases bills 1 or more individuals in violation of subpara18 graph (B), the Secretary may apply sanctions against that

19 person in accordance with subsection (j)(2).

20 ‘‘(4) The Secretary may pay a reasonable dispensing

21 fee (less the applicable deductible and coinsurance

22 amounts) for any drug or biological to a licensed phar23 macy approved to dispense drugs or biologicals under this

24 part, if payment for such drug or biological is made to

25 the pharmacy.’’.
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1 (b) EFFECTIVE DATE.—The amendment made by

2 subsection (a) shall apply to drugs or biologicals furnished

3 on or after January 1, 2000.

4 (c) ELIMINATION OF REPORT ON AVERAGE WHOLE5 SALE PRICE.—Section 4556 of the Balanced Budget Act

6 of 1997 is amended by striking subsection (c).

7 SEC. 125. ENSURING THAT THE MEDICARE PROGRAM DOES

8 NOT REIMBURSE CLAIMS OWED BY OTHER

9 PAYERS.

10 (a) INFORMATION FROM GROUP HEALTH PLANS.—

11 Section 1862(b) of the Social Security Act (42 U.S.C.

12 1395y(b)) is amended by adding at the end the following:

13 ‘‘(7) INFORMATION FROM GROUP HEALTH

14 PLANS.—

15 ‘‘(A) PROVISION OF INFORMATION BY

16 GROUP HEALTH PLANS.—The administrator of

17 a group health plan that is subject to the re18 quirements of paragraph (1) shall provide the

19 Secretary with the information described in

20 subparagraph (C) for each individual covered

21 under the plan who is entitled to any benefits

22 under this title. Such information shall be pro23 vided in such manner and at such times as the

24 Secretary may specify (but in no case more fre25 quently than 4 times per year).
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1 ‘‘(B) PROVISION OF INFORMATION BY EM2 PLOYERS AND EMPLOYEE ORGANIZATIONS.—An

3 employer (or employee organization) that main4 tains or participates in a group health plan that

5 is subject to the requirements of paragraph (1)

6 shall provide to the administrator of the plan

7 the information described in subparagraph (C)

8 for each individual covered under the plan who

9 is entitled to any benefits under this title. Such

10 information shall be provided in such manner

11 and at such times as the Secretary may specify

12 (but in no case more frequently than 4 times

13 per year).

14 ‘‘(C) INFORMATION.—The information de15 scribed in this subparagraph is as follows:

16 ‘‘(i) ELEMENTS CONCERNING THE IN17 DIVIDUAL.—

18 ‘‘(I) The individual’s name.

19 ‘‘(II) The individual’s date of

20 birth.

21 ‘‘(III) The individual’s sex.

22 ‘‘(IV) The individual’s social se23 curity insurance number.
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1 ‘‘(V) The number assigned by the

2 Secretary to the individual for claims

3 under this title.

4 ‘‘(VI) The family relationship of

5 the individual to the person who has

6 current or prior employment status

7 with the employer.

8 ‘‘(ii) ELEMENTS CONCERNING THE

9 FAMILY MEMBER WITH CURRENT OR PRIOR

10 EMPLOYMENT STATUS.—

11 ‘‘(I) The name of the person in

12 the individual’s family who has cur13 rent or prior employment status with

14 the employer.

15 ‘‘(II) That person’s social secu16 rity insurance number.

17 ‘‘(III) The number or other iden18 tifier assigned by the plan to that per19 son.

20 ‘‘(IV) The periods of coverage for

21 that person under the plan.

22 ‘‘(V) The employment status of

23 that person (current or former em24 ployee) during those periods of cov25 erage.
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1 ‘‘(VI) The classes (of that per2 son’s family members) covered under

3 the plan.

4 ‘‘(iii) PLAN ELEMENTS.—

5 ‘‘(I) The items and services cov6 ered under the plan.

7 ‘‘(II) The name and address to

8 which claims under the plan are to be

9 sent.

10 ‘‘(III) The name, address, and

11 tax identification number of the plan

12 sponsor.

13 ‘‘(iv) ELEMENTS CONCERNING THE

14 EMPLOYER.—

15 ‘‘(I) The employer’s name.

16 ‘‘(II) The employer’s address.

17 ‘‘(III) The employer identifica18 tion number of the employer.

19 ‘‘(IV) The tax identification num20 ber of the employer if different than

21 the number in clause (iii)(III).

22 ‘‘(D) USE OF IDENTIFIERS.—The adminis23 trator of a group health plan shall utilize a

24 unique identifier for the plan in providing infor25 mation under subparagraph (A) and in other
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1 transactions, as may be specified by the Sec2 retary, related to the provisions of this sub3 section. The Secretary may provide to the ad4 ministrator the unique identifier described in

5 the preceding sentence.

6 ‘‘(E) PENALTY FOR NONCOMPLIANCE.—

7 Any individual or entity that knowingly and

8 willfully fails to comply with a requirement im9 posed by this paragraph shall be subject to a

10 civil money penalty not to exceed $1,000 for

11 each incident of such failure. The provisions of

12 section 1128A (other than subsections (a) and

13 (b)) shall apply to a civil money penalty under

14 the previous sentence in the same manner as

15 those provisions apply to a penalty or pro16 ceeding under section 1128A(a).

17 ‘‘(F) GROUP HEALTH PLAN DEFINED.—In

18 this paragraph, the term ‘group health plan’

19 has the meaning given such term in paragraph

20 (1)(A)(v).’’.

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

22 subsection (a) shall take effect on January 1, 2000.
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1 SEC. 126. EXTENSION OF SUBPOENA AND INJUNCTION AU2 THORITY.

3 (a) SUBPOENA AUTHORITY.—Section 1128A(j)(1) of

4 the Social Security Act (42 U.S.C. 1320a–7a(j)(1)) is

5 amended by inserting ‘‘and section 1128’’ after ‘‘with re6 spect to this section’’.

7 (b) INJUNCTION AUTHORITY.—Section 1128A(k) of

8 the Social Security Act (42 U.S.C. 1320a–7a(k)) is

9 amended by inserting ‘‘or an exclusion under section

10 1128,’’ after ‘‘subject to a civil monetary penalty under

11 this section,’’.

12 (c) CLARIFYING AMENDMENTS.—

13 (1) IN GENERAL.—Section 1128A(j)(1) of the

14 Social Security Act (42 U.S.C. 1320a–7a(j)(1)) is

15 amended—

16 (A) by inserting ‘‘, except that, in so ap17 plying such sections, any reference therein to

18 the Commissioner of Social Security or the So19 cial Security Administration shall be considered

20 a reference to the Secretary or the Department

21 of Health and Human Services, respectively’’

22 after ‘‘with respect to title II’’; and

23 (B) by striking the second sentence.

24 (2) AUTHORITY.—Section 1128A(j)(2) of the

25 Social Security Act (42 U.S.C. 1320a–7a(j)(2)) is

26 amended to read as follows:
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1 ‘‘(2) The Secretary may delegate to the Inspector

2 General of the Department of Health and Human Services

3 any or all authority granted under this section or under

4 section 1128.’’.

5 (d) CONFORMING AMENDMENT.—Section 1128 of the

6 Social Security Act (42 U.S.C. 1320a–7) is amended by

7 adding at the end the following:

8 ‘‘(k) For provisions of law concerning the Secretary’s

9 subpoena and injunction authority with respect to activi10 ties under this section, see subsections (j) and (k) of sec11 tion 1128A.’’.

12 SEC. 127. CIVIL MONETARY PENALTIES FOR SERVICES OR13 DERED OR PRESCRIBED BY AN EXCLUDED IN14 DIVIDUAL OR ENTITY.

15 (a) IN GENERAL.—Section 1128A(a)(1) of the Social

16 Security Act (42 U.S.C. 1320a–7a(a)(1)) is amended—

17 (1) in subparagraph (D)—

18 (A) by inserting ‘‘, ordered, or prescribed

19 by such person’’ after ‘‘other item or service

20 furnished’’;

21 (B) by inserting ‘‘(pursuant to this title or

22 title XVIII)’’ after ‘‘period in which the person

23 was excluded’’;

24 (C) by striking ‘‘pursuant to a determina25 tion by the Secretary’’ and all that follows
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1 through ‘‘the provisions of section 1842(j)(2)’’;

2 and

3 (D) by striking ‘‘or’’ at the end;

4 (2) by redesignating subparagraph (E) as sub5 paragraph (F); and

6 (3) by adding after subparagraph (D) the fol7 lowing:

8 ‘‘(E) is for a medical or other item or serv9 ice ordered or prescribed by a person excluded

10 (pursuant to this title or title XVIII) from the

11 program under which the claim was made, and

12 the person furnishing such item or service

13 knows or should know of such exclusion, or’’.

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

15 subsection (a) shall apply to claims presented on or after

16 the date of enactment of this Act.

17 SEC. 128. CIVIL MONETARY PENALTIES FOR FALSE CER18 TIFICATION OF ELIGIBILITY TO RECEIVE

19 PARTIAL HOSPITALIZATION AND HOSPICE

20 SERVICES.

21 (a) IN GENERAL.—Section 1128A(b)(3) of the Social

22 Security Act (42 U.S.C. 1320a–7a(b)(3)) is amended—

23 (1) in subparagraph (A)(ii), by inserting ‘‘, hos24 pice care, or partial hospitalization services’’ after

25 ‘‘home health services’’; and
25

•S 1959 IS

1 (2) in subparagraph (B), by inserting ‘‘, section

2 1814(a)(7) in the case of hospice care, or section

3 1835(a)(2)(F) in the case of partial hospitalization

4 services’’ after ‘‘home health services’’.

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

6 subsection (a) shall apply to documents executed on or

7 after the date of enactment of this Act.

8 SEC. 129. APPLICATION OF CERTAIN PROVISIONS OF THE

9 BANKRUPTCY CODE.

10 (a) RESTRICTED APPLICABILITY OF BANKRUPTCY

11 STAY, DISCHARGE, AND PREFERENTIAL TRANSFER PRO12 VISIONS TO MEDICARE AND MEDICAID DEBTS.—Title XI

13 of the Social Security Act (42 U.S.C. 1301 et seq.) is

14 amended by inserting after section 1143 the following:

15 ‘‘APPLICATION OF CERTAIN PROVISIONS OF THE

16 BANKRUPTCY CODE

17 ‘‘SEC. 1144. (a) MEDICARE- AND MEDICAID-RE18 LATED ACTIONS NOT STAYED BY BANKRUPTCY PRO19 CEEDINGS.—The commencement or continuation of any

20 action against a debtor under this title, title XVIII, or title

21 XIX (other than an action with respect to health care

22 services provided to the debtor under title XVIII), includ23 ing any action or proceeding to exclude or suspend the

24 debtor from program participation, assess civil money pen25 alties, recoup or set off overpayments, or deny or suspend
26

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1 payment of claims shall not be subject to the provisions

2 of section 362(a) of title 11, United States Code.

3 ‘‘(b) MEDICARE- AND MEDICAID-RELATED DEBT

4 NOT DISCHARGEABLE IN BANKRUPTCY.—A debt owed to

5 the United States or to a State for an overpayment under

6 title XVIII or title XIX (other than an overpayment for

7 health care services provided to the debtor under title

8 XVIII), or for a penalty, fine, or assessment under this

9 title, title XVIII, or title XIX, shall not be dischargeable

10 under any provision of title 11, United States Code.

11 ‘‘(c) REPAYMENT OF CERTAIN DEBTS CONSIDERED

12 FINAL.—Payments made to repay a debt to the United

13 States or to a State with respect to items or services pro14 vided, or claims for payment made, under title XVIII or

15 XIX (including repayment of an overpayment (other than

16 an overpayment for health care services provided to the

17 debtor under title XVIII)), or to pay a penalty, fine, or

18 assessment under this title, title XVIII, or title XIX, shall

19 be considered final and not preferential transfers under

20 section 547 of title 11, United States Code.’’.

21 (b) MEDICARE RULES APPLICABLE TO BANKRUPTCY

22 PROCEEDINGS.—Title XVIII of the Social Security Act

23 (42 U.S.C. 1395 et seq.) is amended by adding at the end

24 the following:
27

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1 ‘‘APPLICATION OF PROVISIONS OF THE BANKRUPTCY

2 CODE

3 ‘‘SEC. 1897. (a) USE OF MEDICARE STANDARDS AND

4 PROCEDURES.—Notwithstanding any provision of title 11,

5 United States Code, or any other provision of law, in the

6 case of claims by a debtor in bankruptcy for payment

7 under this title, the determination of whether the claim

8 is allowable, and of the amount payable, shall be made

9 in accordance with the provisions of this title and title XI.

10 ‘‘(b) NOTICE TO CREDITOR OF BANKRUPTCY PETI11 TIONER.—In the case of a debt owed to the United States

12 with respect to items or services provided, or claims for

13 payment made, under this title (including a debt arising

14 from an overpayment or a penalty, fine, or assessment

15 under title XI or this title), the notices to the creditor of

16 bankruptcy petitions, proceedings, and relief required

17 under title 11, United States Code (including under sec18 tion 342 of that title and section 2002(j) of the Federal

19 Rules of Bankruptcy Procedure), shall be given to the Sec20 retary. Provision of such notice to a fiscal agent of the

21 Secretary shall not be considered to satisfy this require22 ment.

23 ‘‘(c) TURNOVER OF PROPERTY TO THE BANKRUPTCY

24 ESTATE.—For purposes of section 542(b) of title 11,

25 United States Code, a claim for payment under this title
28

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1 shall not be considered to be a matured debt payable to

2 the estate of a debtor until such claim has been allowed

3 by the Secretary in accordance with procedures under this

4 title.’’.

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

6 this section shall apply to petitions filed on or after the

7 date of enactment of this Act.

8 SEC. 130. IMPROVING PRIVATE SECTOR COORDINATION IN

9 COMBATTING HEALTH CARE FRAUD.

10 (a) IN GENERAL.—Title XI of the Social Security Act

11 (42 U.S.C. 1301 et seq.) is amended by inserting after

12 section 1157 the following:

13 ‘‘IMPROVING PRIVATE SECTOR COORDINATION IN

14 COMBATTING HEALTH CARE FRAUD

15 ‘‘SEC. 1157A. (a) IN GENERAL.—Notwithstanding

16 any other provision of law, no health plan (as defined in

17 section 1128C(c)), issuer of a health plan, or employee of

18 a health plan shall be held liable in any civil action with

19 respect to the provision of information regarding sus20 pected health care fraud, including Federal health care of21 fenses (as defined in section 24(a) of title 18, United

22 States Code) to an applicable individual unless such infor23 mation is false and the person providing it knew, or had

24 reason to believe, that such information was false.

25 ‘‘(b) APPLICABLE INDIVIDUAL.—In subsection (a),

26 the term ‘applicable individual’ means—
29

•S 1959 IS

1 ‘‘(1) a Federal, State, or local law enforcement

2 official responsible for the investigation or prosecu3 tion of suspected health care fraud offenses; or

4 ‘‘(2) an employee of a health plan or issuer of

5 a health plan.

6 ‘‘(c) ATTORNEY’S FEES.—Any health plan, issuer of

7 a health plan, or employee of a health plan against whom

8 a civil action is brought, and who is found to be entitled

9 to immunity from liability by reason of this section, shall

10 be entitled to recover reasonable attorney’s fees and costs

11 from the person who brought the civil action.’’.

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

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

14 of this Act.

15 SEC. 131. FEES FOR AGREEMENTS WITH MEDICARE PRO16 VIDERS AND SUPPLIERS.

17 (a) FEES RELATED TO MEDICARE PROVIDER AND

18 SUPPLIER ENROLLMENT AND REENROLLMENT.—Section

19 1866 of the Social Security Act (42 U.S.C. 1395cc) is

20 amended by adding at the end the following:

21 ‘‘(j) ENROLLMENT PROCEDURES AND FEES.—

22 ‘‘(1) ENROLLMENT OF INDIVIDUALS AND ENTI23 TIES THAT ARE NOT PROVIDERS OF SERVICES.—The

24 Secretary may establish a procedure for enrollment

25 (and periodic reenrollment) of individuals or entities
30

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1 that are not providers of services subject to the pro2 visions of subsection (a) but that furnish health care

3 items or services under this title.

4 ‘‘(2) FEES.—

5 ‘‘(A) IN GENERAL.—The Secretary may

6 impose fees for initiation and renewal of pro7 vider agreements under subsection (a) and for

8 enrollment and periodic reenrollment of other

9 individuals and entities furnishing health care

10 items or services under this title under para11 graph (1), in amounts up to the full amount

12 which the Secretary reasonably estimates to be

13 sufficient to cover the Secretary’s costs related

14 to the process for initiating and reviewing such

15 agreements and enrollments.

16 ‘‘(B) FEES CREDITED TO SPECIAL FUND

17 IN TREASURY.—Fees collected pursuant to this

18 paragraph shall be credited to a special fund of

19 the United States Treasury, and shall remain

20 available until expended, to the extent and in

21 such amounts as provided in advance in appro22 priations Acts, for necessary expenses for these

23 purposes, including costs of establishing and

24 maintaining procedures and records systems,
31

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1 processing applications, and conducting back2 ground investigations.’’.

3 (b) CLERICAL AMENDMENT.—The heading of section

4 1866 of the Social Security Act (42 U.S.C. 1395cc) is

5 amended to read as follows:

6 ‘‘AGREEMENTS WITH PROVIDERS OF SERVICES AND EN7 ROLLMENT OF OTHER PERSONS FURNISHING SERV8 ICES’’.

9 SEC. 132. INCREASED MEDICARE COMPLIANCE, EDU10 CATION, AND ASSISTANCE FOR HEALTH CARE

11 PROVIDERS.

12 (a) DEVELOPMENT OF PLAN.—Not later than 6

13 months after the date of enactment of this Act, the Sec14 retary of Health and Human Services shall, in consulta15 tion with health care provider representatives, develop and

16 implement a comprehensive plan of activities to—

17 (1) maximize health care provider knowledge of

18 medicare program integrity requirements, including

19 anti-fraud and abuse laws and administrative ac20 tions;

21 (2) assist health care providers with medicare

22 program integrity compliance, including educating

23 such providers regarding compliance activities and

24 procedures of the Health Care Financing Adminis25 tration and the Inspector General of the Department

26 of Health and Human Services;
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•S 1959 IS

1 (3) develop improved computer technology for

2 health care providers to both reduce their adminis3 trative hassles and facilitate their compliance with

4 medicare program requirements, including physician

5 evaluation and management guidelines; and

6 (4) otherwise improve compliance among health

7 care providers with rules and regulations under the

8 medicare program.

9 (b) FUNDING.—Notwithstanding any other provision

10 of law, of the amounts appropriated under section

11 1817(k)(4) of the Social Security Act (42 U.S.C.

12 1395i(k)(4)) for a fiscal year, there shall be made avail13 able $10,000,000 in fiscal year 2000 and such sums as

14 are necessary in fiscal years 2001 through 2004 to carry

15 out the purposes of this section.

16 SEC. 133. PAPERWORK AND ADMINISTRATIVE HASSLE RE17 DUCTION.

18 (a) STUDY BY COMMITTEE.—

19 (1) ESTABLISHMENT.—Not later than 90 days

20 after the date of enactment of this Act, the Sec21 retary of Health and Human Services shall contract

22 with the Institute of Medicine of the National Acad23 emy of Sciences to establish a committee to study

24 medicare program administrative requirements that
33

•S 1959 IS

1 are applicable to health care providers under such

2 program.

3 (2) COMMITTEE.—The committee described in

4 paragraph (1) shall be composed of—

5 (A) at least 9 health care providers who

6 participate in, and have significant experience

7 working with, the medicare program;

8 (B) experts in paperwork reduction; and

9 (C) beneficiaries under the medicare pro10 gram or their representatives.

11 (b) RECOMMENDATIONS.—The committee described

12 in subsection (a) shall develop recommendations regarding

13 how paperwork and administrative requirements under the

14 medicare program can be minimized in a manner that—

15 (1) increases the time health care providers

16 that are subject to such requirements have to spend

17 in direct patient care; and

18 (2) maintains medicare program integrity and

19 compliance with anti-fraud and abuse requirements.

20 In developing such recommendations, the committee shall

21 seek to streamline variations in administrative and paper22 work requirements between the medicare program and

23 other government health programs and private health

24 plans.

25 (c) REPORT.—
34

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1 (1) IN GENERAL.—Not later than June 1,

2 2000, the committee described in subsection (a)

3 shall submit a report to the Secretary of Health and

4 Human Services, the Committees on Finance and

5 Appropriations of the Senate and the Committees on

6 Ways and Means, Commerce, and Appropriations of

7 the House of Representatives.

8 (2) CONTENTS.—The report required under

9 paragraph (1) shall contain a detailed description of

10 the matters studied pursuant to subsection (a) and

11 the recommendations developed pursuant to sub12 section (b), including such legislation and adminis13 trative actions as the committee considers appro14 priate.

15 (d) AUTHORIZATION OF APPROPRIATIONS.—

16 (1) IN GENERAL.—There are authorized to be

17 appropriated $1,000,000 for fiscal year 2000 to

18 carry out the purposes of this section.

19 (2) AVAILABILITY.—Any sums appropriated

20 under the authorization contained in this subsection

21 shall remain available, without fiscal year limitation,

22 until expended.
35

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1 SEC. 134. CLARIFICATION OF APPLICATION OF SANCTIONS

2 TO FEDERAL HEALTH CARE PROGRAMS.

3 (a) COVERAGE OF EMPLOYMENT.—Section 1128 of

4 the Social Security Act (42 U.S.C. 1320a–7) is

5 amended—

6 (1) in subsection (a), in the matter preceding

7 paragraph (1), by inserting ‘‘(including employment

8 under)’’ after ‘‘participation in’’; and

9 (2) in subsection (b), in the matter preceding

10 paragraph (1), by inserting ‘‘(including employment

11 under)’’ after ‘‘participation in’’.

12 (b) APPLICATION UNDER CIVIL MONEY PENALTY

13 AUTHORITY.—Section 1128A of the Social Security Act

14 (42 U.S.C. 1320a–7a) is amended—

15 (1) in subsection (a)(4), by striking ‘‘program

16 under title XVIII or a State health care program’’

17 and inserting ‘‘Federal health care program’’ each

18 place it appears;

19 (2) in subsection (a)(5)—

20 (A) by striking ‘‘title XVIII of this Act, or

21 under a State health care program (as defined

22 in section 1128(h))’’ and inserting ‘‘a Federal

23 health care program’’; and

24 (B) by striking ‘‘title XVIII, or a State

25 health care program (as so defined)’’ and in26 serting ‘‘such program’’;
36

•S 1959 IS

1 (3) in the last sentence of subsection (a), by

2 striking ‘‘and to direct the appropriate State agency

3 to exclude the person from participation in any State

4 health care program’’; and

5 (4) in subsection (h), by striking ‘‘State agency

6 or agencies administering or supervising the admin7 istration of State health care programs (as defined

8 in section 1128(h))’’ and inserting ‘‘Federal or State

9 agency or agencies administering or supervising the

10 administration of any Federal health care program’’.

11 (c) APPLICATION OF WAIVER PROVISIONS TO FED12 ERAL HEALTH CARE PROGRAMS.—Section 1128 of the

13 Social Security Act (42 U.S.C. 1320a–7) is amended—

14 (1) in subsection (c)(3)(B), by striking ‘‘upon

15 the request of a State’’ and inserting ‘‘upon the re16 quest of the director of a Federal health care pro17 gram’’;

18 (2) in subsection (d)(3)(B)(i)—

19 (A) by striking ‘‘State health care pro20 gram’’ and inserting ‘‘Federal health care pro21 gram’’; and

22 (B) by striking ‘‘State agency’’ and insert23 ing ‘‘Federal or State agency’’; and

24 (3) in subsection (d)(3)(B)(ii), by striking

25 ‘‘State health care program’’ and inserting ‘‘Federal
37

•S 1959 IS

1 health care program (other than under title

2 XVIII)’’.

3 (d) NOTICE PROVISION REGARDING FEDERAL

4 HEALTH CARE PROGRAMS.—Section 1128 of the Social

5 Security Act (42 U.S.C. 1320a–7) is amended—

6 (1) in the heading of subsection (d), by striking

7 ‘‘TO STATE AGENCIES AND EXCLUSION UNDER

8 STATE HEALTH CARE PROGRAMS’’ and inserting

9 ‘‘AND EXCLUSION UNDER FEDERAL HEALTH CARE

10 PROGRAMS’’;

11 (2) in subsection (d)(1), by striking ‘‘State’’

12 and inserting ‘‘Federal’’;

13 (3) in subsection (d)(2)—

14 (A) by striking ‘‘State agency’’ and insert15 ing ‘‘Federal or State agency’’ each place it ap16 pears; and

17 (B) by striking ‘‘State health care pro18 gram’’ and inserting ‘‘Federal health care pro19 gram’’ each place it appears;

20 (4) in subsection (d)(3)(A), by striking ‘‘State’’

21 and inserting ‘‘Federal’’; and

22 (5) in subsection (g)(3)—

23 (A) by striking ‘‘State agency’’ and insert24 ing ‘‘Federal or State agency’’; and
38

•S 1959 IS

1 (B) by striking ‘‘State health care pro2 gram’’ and inserting ‘‘Federal health care pro3 gram’’.

4 (e) USE OF DEFINITION OF FEDERAL HEALTH CARE

5 PROGRAM AND TREATMENT OF FEDERAL EMPLOYEES

6 HEALTH BENEFITS PROGRAM AS A FEDERAL HEALTH

7 CARE PROGRAM.—Section 1128B(f) of the Social Security

8 Act (42 U.S.C. 1320a–7b(f)) is amended—

9 (1) in the matter preceding paragraph (1), by

10 inserting ‘‘and sections 1128 and 1128A’’ after ‘‘this

11 section’’; and

12 (2) in paragraph (1), by striking ‘‘(other than

13 the health insurance program under chapter 89 of

14 title 5, United States Code)’’.

15 (f) AUTHORITY TO EXCLUDE FROM FEDERAL

16 HEALTH CARE PROGRAMS BASED ON PRO REC17 OMMENDATIONS.—Section 1156(b)(1) of the Social Secu18 rity Act (42 U.S.C. 1320c–5(b)(1)) is amended—

19 (1) in the second sentence, by striking ‘‘eligi20 bility to provide services under this Act on a reim21 bursable basis’’ and inserting ‘‘participation in any

22 Federal health care program (as defined in section

23 1128B(f))’’; and
39

•S 1959 IS

1 (2) in the third sentence, by striking ‘‘eligibility

2 to provide services on a reimbursable basis’’ and in3 serting ‘‘participation in such programs’’.

4 (g) EFFECTIVE DATE.—

5 (1) IN GENERAL.—Subject to paragraph (2),

6 the amendments made by this section shall take ef7 fect on the date of enactment of this Act.

8 (2) CONVICTIONS UNDER FEHBP.—The amend9 ment made by subsection (e)(2) shall apply, with re10 spect to convictions under the health insurance pro11 gram under chapter 89 of title 5, United States

12 Code, to convictions that occur on or after the date

13 of enactment of this Act.

14 SEC. 135. PAYMENTS FOR DURABLE MEDICAL EQUIPMENT.

15 (a) IN GENERAL.—Section 1834(a)(1) of the Social

16 Security Act (42 U.S.C. 1395m(a)(1)) is amended—

17 (1) in subparagraph (B)—

18 (A) in clause (i), by striking ‘‘, or’’ at the

19 end and inserting a semicolon; and

20 (B) by inserting after clause (ii) the fol21 lowing:

22 ‘‘(iii) the least expensive amount that

23 the supplier of the item is paid by a

24 Medicare+Choice organization for such

25 item; or
40

•S 1959 IS

1 ‘‘(iv) the least expensive amount that

2 the supplier of the item is paid by any

3 Federal health care program (as defined in

4 section 1128B(f)) for such item;’’; and

5 (2) by adding at the end the following:

6 ‘‘(E) ADMINISTRATIVE COSTS.—

7 ‘‘(i) IN GENERAL.—Except as pro8 vided in clause (ii), if—

9 ‘‘(I) the payment amount for an

10 item is covered under clauses (iii) or

11 (iv) of subparagraph (B); and

12 ‘‘(II) the Secretary determines

13 that the administrative costs associ14 ated with billing and receiving reim15 bursement from the Secretary for the

16 item exceeds the administrative costs

17 associated with providing such item to

18 a Medicare+Choice organization or

19 another Federal health care program

20 (as so defined);

21 then the Secretary shall adjust the pay22 ment rate for such item to reflect such ex23 cess.

24 ‘‘(ii) LIMITATION.—In no case may

25 the payment rate for an item that is ad-
41

•S 1959 IS

1 justed under clause (i) exceed the payment

2 rate for such item determined in clauses (i)

3 and (ii) of subparagraph (B).

4 ‘‘(iii) COLLECTION OF INFORMA5 TION.—The Secretary shall collect from

6 durable medical equipment suppliers that

7 receive reimbursement under Federal

8 health care programs (as so defined) such

9 information as the Secretary determines is

10 necessary in order to make the determina11 tion described in clause (i)(II).’’.

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

13 subsection (a) shall apply to items provided on or after

14 January 1, 2000.

15 SEC. 136. IMPLEMENTATION OF COMMERCIAL CLAIMS AU16 DITING SYSTEMS.

17 (a) COMMERCIAL CLAIMS AUDITING SYSTEMS.—

18 (1) IN GENERAL.—Not later than 90 days after

19 the date of enactment of this Act, the Secretary

20 shall require medicare carriers to use commercial

21 claims auditing systems in the processing of claims

22 under part B of the medicare program under title

23 XVIII of the Social Security Act (42 U.S.C. 1395j

24 et seq.) for the purpose of identifying billing errors

25 and abuses.
42

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1 (2) SUPPLEMENT TO OTHER TECHNOLOGY.—

2 Commercial claims auditing systems required under

3 paragraph (1) shall be used as a supplement to any

4 other information technology used by medicare car5 riers in processing claims under the medicare pro6 gram.

7 (3) UNIFORMITY.—In order to ensure uni8 formity in processing claims under the medicare pro9 gram, the Secretary may require that medicare car10 riers utilize 1 or more common commercial claims

11 auditing systems, provided that the selection of such

12 system or systems by the Secretary shall be—

13 (A) after due consideration of competing

14 alternative systems; but

15 (B) without regard to any provision of law

16 that requires the use of competitive procedures

17 (as defined in section 4 of the Office of Federal

18 Procurement Policy Act (41 U.S.C. 403)) or

19 the publication of notice of proposed procure20 ments.

21 (4) IMPLEMENTATION.—Commercial claims au22 diting systems required under paragraph (1) shall be

23 implemented by all medicare carriers by not later

24 than 180 days after the date of enactment of this

25 Act.
43

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1 (b) MINIMUM SOFTWARE REQUIREMENTS.—Any

2 commercial claims auditing system required to be imple3 mented pursuant to subsection (a) shall, at a minimum—

4 (1) be a commercial item;

5 (2) surpass the capability of systems currently

6 used in the processing of claims under part B of the

7 medicare program; and

8 (3) be modifiable to—

9 (A) satisfy pertinent statutory require10 ments of the medicare program; and

11 (B) conform to policies of the Secretary re12 garding claims processing under such program.

13 (c) DISCLOSURE.—

14 (1) IN GENERAL.—Except as provided in para15 graph (2), notwithstanding any other provision of

16 law, any information technology (or data related

17 thereto) utilized by medicare carriers in establishing

18 a commercial claims auditing system pursuant to

19 subsection (a) shall not be subject to public disclo20 sure.

21 (2) AUTHORIZED DISCLOSURE.—The Secretary

22 may authorize the public disclosure of the informa23 tion described in paragraph (1) if the Secretary de24 termines that—
44

•S 1959 IS

1 (A) release of such information is in the

2 public interest; and

3 (B) the information to be released is not

4 protected from disclosure under section 552(b)

5 of title 5, United States Code.

6 (d) DEFINITIONS.—In this section—

7 (1) COMMERCIAL CLAIMS AUDITING SYSTEM.—

8 The term ‘‘commercial claims auditing system’’

9 means a commercial specialized auditing system that

10 includes edits which identify inappropriately coded

11 health care claims.

12 (2) COMMERCIAL ITEM.—The term ‘‘commer13 cial item’’ has the meaning given such term in sec14 tion 4 of the Office of Federal Procurement Policy

15 Act (41 U.S.C. 403).

16 (3) INFORMATION TECHNOLOGY.—The term

17 ‘‘information technology’’ has the meaning given

18 such term in subparagraphs (A) and (B) of section

19 5002(3) of the Information Technology Management

20 Reform Act of 1996 (40 U.S.C. 1401(3)), were such

21 information technology to be acquired by an execu22 tive agency.

23 (4) MEDICARE CARRIER.—The term ‘‘medicare

24 carrier’’ means an entity that has a contract with
45

•S 1959 IS

1 the Secretary pursuant to section 1842(a) of the So2 cial Security Act (42 U.S.C. 1395u(a)).

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

4 the Secretary of Health and Human Services.

5 SEC. 137. PARTIAL HOSPITALIZATION PAYMENT REFORMS.

6 (a) LIMITATION ON LOCATION OF PROVISION OF

7 SERVICES.—

8 (1) IN GENERAL.—Section 1861(ff)(2) of the

9 Social Security Act (42 U.S.C. 1395x(ff)(2)) is

10 amended in the matter following subparagraph (I)—

11 (A) by striking ‘‘and furnished’’ and in12 serting ‘‘furnished’’; and

13 (B) by inserting ‘‘, and furnished other

14 than in a skilled nursing facility or in an indi15 vidual’s personal residence’’ before the period.

16 (2) EFFECTIVE DATE.—The amendments made

17 by paragraph (1) shall apply to partial hospitaliza18 tion services furnished on or after the first day of

19 the third month beginning after the date of enact20 ment of this Act.

21 (b) QUALIFICATIONS FOR COMMUNITY MENTAL

22 HEALTH CENTERS.—Section 1861(ff)(3)(B) of the Social

23 Security Act (42 U.S.C. 1395x(ff)(3)(B)) is amended by

24 striking ‘‘entity’’ and all that follows and inserting the fol25 lowing: ‘‘entity that—
46

•S 1959 IS

1 ‘‘(i) provides the mental health services de2 scribed in paragraph (1) of section 1913(c) of the

3 Public Health Service Act;

4 ‘‘(ii) meets applicable licensing or certification

5 requirements for community mental health centers

6 in the State in which it is located; and

7 ‘‘(iii) meets such additional standards or re8 quirements as the Secretary may specify to ensure—

9 ‘‘(I) the health and safety of individuals

10 being furnished such services;

11 ‘‘(II) the effective or efficient furnishing of

12 such services (including protecting against

13 fraud, waste, and abuse); and

14 ‘‘(III) the compliance of such entity with

15 the criteria described in such section.’’.

16 (c) REENROLLMENT OF PROVIDERS OF CMHC PAR17 TIAL HOSPITALIZATION SERVICES.—

18 (1) IN GENERAL.—With respect to each com19 munity mental health center that furnishes partial

20 hospitalization services for which payment is made

21 under title XVIII of the Social Security Act, the

22 Secretary of Health and Human Services shall pro23 vide for periodic recertification to ensure that the

24 provision of such services complies with section

25 1913(c) of the Public Health Service Act.
47

•S 1959 IS

1 (2) DEADLINE FOR FIRST RECERTIFICATION.—

2 The first recertification under paragraph (1) shall be

3 completed not later than 1 year after the date of en4 actment of this Act.

5 (d) PROSPECTIVE PAYMENT SYSTEM FOR PARTIAL

6 HOSPITALIZATION SERVICES.—

7 (1) ESTABLISHMENT OF SYSTEM.—Section

8 1833 of the Social Security Act (42 U.S.C. 1395l)

9 is amended by inserting after subsection (o) the fol10 lowing:

11 ‘‘(p)(1) The Secretary may establish by regulation a

12 prospective payment system for partial hospitalization

13 services provided by a community mental health center or

14 by a hospital to its outpatients. The system shall provide

15 for appropriate payment levels for efficient centers and

16 hospitals and take into account payment levels for similar

17 services furnished by other efficient entities.

18 ‘‘(2) A prospective payment system established pur19 suant to paragraph (1) shall provide for payment amounts

20 for—

21 ‘‘(A) the first year in which such system ap22 plies, at a level so that, as estimated by the Sec23 retary, the total aggregate payments under this part

24 (including payments attributable to deductibles and

25 coinsurance) for such year are not greater than the
48

•S 1959 IS

1 total aggregate payments that would have otherwise

2 been made under this part if such system had not

3 been implemented (assuming full implementation of

4 the provisions contained in subsections (a) through

5 (c) of section 17 of the Medicare Waste Tax Reduc6 tion Act of 1999); and

7 ‘‘(B) each subsequent year, in an amount equal

8 to the payment amount provided for under this

9 paragraph for the preceding year updated by the

10 percentage increase in the Consumer Price Index for

11 all urban consumers (all items; United States city

12 average) for the 12-month period ending with Sep13 tember of that preceding year.’’.

14 (2) COINSURANCE.—Section 1866(a)(2)(A) of

15 the Social Security Act (42 U.S.C. 1395cc(a)(2)(A))

16 is amended by adding at the end the following: ‘‘In

17 the case of services described in section

18 1832(a)(2)(J), clause (ii) of the first sentence of this

19 subparagraph shall be applied by substituting the

20 payment basis established under section 1833(p) for

21 the reasonable charges.’’.

22 (3) CONFORMING AMENDMENTS.—

23 (A) Section 1832(a)(2) of the Social Secu24 rity Act (42 U.S.C. 1395k(a)(2)) is amended—
49

•S 1959 IS

1 (i) in subparagraph (B), by striking

2 ‘‘or subparagraph (I)’’ and inserting ‘‘, (I),

3 or (J)’’; and

4 (ii) in subparagraph (J), by striking

5 ‘‘provided by a community mental health

6 center (as described in section

7 1861(ff)(2)(B))’’.

8 (B) Section 1833(a) of the Social Security

9 Act (42 U.S.C. 1395l(a)) is amended—

10 (i) in paragraph (2) in the matter pre11 ceding subparagraph (A), by striking ‘‘(H),

12 and (I)’’ and inserting ‘‘(H), (I), and (J)’’;

13 (ii) in paragraph (8), by striking

14 ‘‘and’’ at the end;

15 (iii) in paragraph (9), by striking the

16 period at the end and inserting ‘‘; and’’;

17 and

18 (iv) by adding at the end the fol19 lowing:

20 ‘‘(10) in the case of partial hospitalization serv21 ices, 80 percent of the payment basis under the pro22 spective payment system established under section

23 1833(p).’’.

24 (4) EFFECTIVE DATE.—The amendments made

25 by paragraphs (2) and (3) apply to services fur-
50

•S 1959 IS

1 nished on or after January 1 of the first year that

2 begins at least 6 months after the date on which

3 regulations are issued under section 1833(p) of the

4 Social Security Act (42 U.S.C. 1395l(p)) (as in5 serted by paragraph (1)).

6 SEC. 138. EXPANSION OF MEDICARE SENIOR WASTE PA7 TROL NATIONWIDE.

8 There are authorized to be appropriated $25,000,000

9 in fiscal year 2000, and such sums as are necessary for

10 fiscal years 2001 through 2003, for the purpose of car11 rying out, and expanding nationwide, the Health Care

12 Anti-Fraud, Waste and Abuse Community Volunteer

13 Demonstration Projects conducted by the Administration

14 on Aging pursuant to the Omnibus Consolidated Appro15 priations Act, 1997 (Public Law 104–208).

16 SEC. 139. APPLICATION OF INHERENT REASONABLENESS

17 TO ALL PART B SERVICES OTHER THAN PHY18 SICIANS’ SERVICES.

19 (a) REPEAL OF CERTAIN PROVISIONS OF THE BAL20 ANCED BUDGET ACT OF 1997.—

21 (1) REPEAL.—Section 4316 of the Balanced

22 Budget Act of 1997 (Public Law 105–33; 111 Stat.

23 390), and the amendments made by such section,

24 are repealed effective August 5, 1997.
51

•S 1959 IS

1 (2) APPLICABILITY.—Effective August 5, 1997,

2 the Social Security Act shall be applied and adminis3 tered as if section 4316 of the Balanced Budget Act

4 of 1997 (Public Law 105–33; 111 Stat. 390), and

5 the amendments made by such section, had not been

6 enacted.

7 (b) APPLICATION OF INHERENT REASONABLENESS

8 TO ALL PART B SERVICES OTHER THAN PHYSICIANS’

9 SERVICES.—

10 (1) IN GENERAL.—Section 1842(b)(8) of the

11 Social Security Act (42 U.S.C. 1395u(b)(8)) is

12 amended to read as follows:

13 ‘‘(8) The Secretary shall describe by regulation the

14 factors to be used in determining the cases (of particular

15 items or services) in which the application of this part

16 (other than to physicians’ services paid under section

17 1848) results in the determination of an amount that, be18 cause of its being grossly excessive or grossly deficient,

19 is not inherently reasonable, and provide in those cases

20 for the factors to be considered in establishing an amount

21 that is realistic and equitable.’’.

22 (2) EFFECTIVE DATE.—The amendment made

23 by this subsection shall take effect August 5, 1997.
52

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1 SEC. 140. STANDARDS REGARDING PAYMENT FOR CERTAIN

2 ORTHOTICS AND PROSTHETICS.

3 (a) STANDARDS.—

4 (1) IN GENERAL.—Section 1834(h)(1) of the

5 Social Security Act (42 U.S.C. 1395m(h)(1)) is

6 amended by adding at the end the following:

7 ‘‘(F) ESTABLISHMENT OF STANDARDS FOR

8 CERTAIN ITEMS.—

9 ‘‘(i) IN GENERAL.—No payment shall

10 be made for an applicable item unless such

11 item is provided by a qualified practitioner

12 or a qualified supplier under the system es13 tablished by the Secretary under clause

14 (iii). For purposes of the preceding sen15 tence, if a qualified practitioner or a quali16 fied supplier contracts with an entity to

17 provide an applicable item, then no pay18 ment shall be made for such item unless

19 the entity is also a qualified supplier.

20 ‘‘(ii) DEFINITIONS.—In this

21 subparagraph—

22 ‘‘(I) APPLICABLE ITEM.—The

23 term ‘applicable item’ means orthotics

24 and prosthetics that require edu25 cation, training, and experience to

26 custom fabricate such item. Such
53

•S 1959 IS

1 term does not include shoes and shoe

2 inserts.

3 ‘‘(II) QUALIFIED PRACTI4 TIONER.—The term ‘qualified practi5 tioner’ means a physician or health

6 professional who—

7 ‘‘(aa) is specifically trained

8 and educated to provide or man9 age the provision of custom-de10 signed, fabricated, modified, and

11 fitted orthotics and prosthetics,

12 and is either certified by the

13 American Board for Certification

14 in Orthotics and Prosthetics,

15 Inc., or is credentialed and ap16 proved by a program that the

17 Secretary determines, in con18 sultation with appropriate ex19 perts in orthotics and prosthetics,

20 has training and education stand21 ards that are necessary to pro22 vide applicable items;

23 ‘‘(bb) is licensed in orthotics

24 or prosthetics by the State in
54

•S 1959 IS

1 which the applicable item is sup2 plied; or

3 ‘‘(cc) has completed at least

4 10 years practice in the provision

5 of applicable items.

6 ‘‘(III) QUALIFIED SUPPLIER.—

7 The term ‘qualified supplier’ means

8 any entity that is—

9 ‘‘(aa) accredited by the

10 American Board for Certification

11 in Orthotics and Prosthetics,

12 Inc.; or

13 ‘‘(bb) accredited and ap14 proved by a program that the

15 Secretary determines has accredi16 tation and approval standards

17 that are essentially equivalent to

18 those of such Board.

19 ‘‘(iii) SYSTEM.—The Secretary, in

20 consultation with appropriate experts in

21 orthotics and prosthetics, shall establish a

22 system under which the Secretary shall—

23 ‘‘(I) determine which items are

24 applicable items and formulate a list

25 of such items;
55

•S 1959 IS

1 ‘‘(II) review the applicable items

2 billed under the coding system estab3 lished under this title; and

4 ‘‘(III) limit payment for applica5 ble items pursuant to clause (i).’’.

6 (2) EFFECTIVE DATE.—The amendment made

7 by paragraph (1) shall apply to items provided on or

8 after January 1, 2000.

9 (b) REVISION OF DEFINITION OF ORTHOTICS.—

10 (1) IN GENERAL.—Section 1861(s)(9) of the

11 Social Security Act (42 U.S.C. 1395x(s)(9)) is

12 amended by inserting ‘‘(including such braces that

13 are used in conjunction with, or as components of,

14 other medical or non-medical equipment when pro15 vided by a qualified practitioner (as defined in sub16 clause (II) of section 1834(h)(1)(F))) or a qualified

17 supplier (as defined in subclause (III) of such sec18 tion)’’ after ‘‘braces’’.

19 (2) EFFECTIVE DATE.—The amendment made

20 by paragraph (1) shall apply to items provided on or

21 after January 1, 2000.
56

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1 SEC. 141. INCREASED FLEXIBILITY IN CONTRACTING FOR

2 MEDICARE CLAIMS PROCESSING.

3 (a) CARRIERS TO INCLUDE ENTITIES THAT ARE

4 NOT INSURANCE COMPANIES.—Section 1842 of the Social

5 Security Act (42 U.S.C. 1395u) is amended—

6 (1) in subsection (a), in the matter preceding

7 paragraph (1), by striking ‘‘with carriers’’ and in8 serting ‘‘with agencies and organizations (in this

9 section referred to as ‘carriers’)’’; and

10 (2) by striking subsection (f).

11 (b) SECRETARIAL FLEXIBILITY IN CONTRACTING

12 FOR AND IN ASSIGNING FISCAL INTERMEDIARY AND CAR13 RIER FUNCTIONS.—

14 (1) IN GENERAL.—

15 (A) Section 1816(a) of the Social Security

16 Act (42 U.S.C. 1395h(a)) is amended to read

17 as follows:

18 ‘‘(a)(1) The Secretary may enter into contracts with

19 agencies or organizations to perform any or all of the fol20 lowing functions, or parts of those functions (or, to the

21 extent provided in a contract, to secure performance there22 of by other organizations) to—

23 ‘‘(A) determine (subject to the provisions of sec24 tion 1878 and to such review by the Secretary as

25 may be provided for by the contracts) the amount of
57

•S 1959 IS

1 the payments required pursuant to this part to be

2 made to providers of services;

3 ‘‘(B) make payments described in subparagraph

4 (A);

5 ‘‘(C) provide consultative services to institutions

6 or agencies to enable them to establish and maintain

7 fiscal records necessary for purposes of this part and

8 otherwise to qualify as providers of services;

9 ‘‘(D) serve as a center for, and communicate to

10 individuals entitled to benefits under this part and

11 to providers of services, any information or instruc12 tions furnished to the agency or organization by the

13 Secretary, and serve as a channel of communication

14 from individuals entitled to benefits under this part

15 and from providers of services to the Secretary;

16 ‘‘(E) make such audits of the records of pro17 viders of services as may be necessary to ensure that

18 proper payments are made under this part;

19 ‘‘(F) perform the functions described by sub20 section (d); and

21 ‘‘(G) perform such other functions as are nec22 essary to carry out the purposes of this part.

23 ‘‘(2) As used in this title and title XI, the term ‘fiscal

24 intermediary’ means an agency or organization with a con25 tract under this section.’’.
58

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1 (B) Section 1816(b)(1)(A) of the Social

2 Security Act (42 U.S.C. 1395h(b)(1)(A)) is

3 amended by striking ‘‘after applying the stand4 ards, criteria, and procedures’’ and inserting

5 ‘‘after evaluating the ability of the agency or

6 organization to fulfill the contract performance

7 requirements’’.

8 (C) Section 1816(d) of the Social Security

9 Act (42 U.S.C. 1395h(d)) is amended to read

10 as follows:

11 ‘‘(d) Each provider of services shall have a fiscal

12 intermediary that—

13 ‘‘(1) acts as a single point of contact for the

14 provider of services under this part;

15 ‘‘(2) makes its services sufficiently available to

16 meet the needs of the provider of services; and

17 ‘‘(3) is responsible and accountable for arrang18 ing the resolution of issues raised under this part by

19 the provider of services.’’.

20 (D) Section 1816(e) of the Social Security

21 Act (42 U.S.C. 1395h(d)) is amended to read

22 as follows:

23 ‘‘(e) The Secretary, in evaluating the performance of

24 a fiscal intermediary, may solicit comments from providers

25 of services.’’.
59

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1 (E) Section 1816(f)(1) of the Social Secu2 rity Act (42 U.S.C. 1395h(f)(1)) is amended to

3 read as follows:

4 ‘‘(f)(1) With respect to performance requirements

5 under subsection (a), the Secretary may consult with—

6 ‘‘(A) Medicare+Choice organizations under

7 part C of this title;

8 ‘‘(B) providers of services and other persons

9 who furnish items or services for which payment

10 may be made under this title; and

11 ‘‘(C) organizations and agencies performing

12 functions necessary to carry out the purposes of this

13 part.’’.

14 (F) Section 1842(b)(2) of the Social Secu15 rity Act (42 U.S.C. 1395u(b)(2)) is amended—

16 (i) in subparagraph (A)—

17 (I) by inserting ‘‘(i)’’ before ‘‘No

18 such contract’’;

19 (II) by striking the second sen20 tence and inserting the following:

21 ‘‘(ii) With respect to performance requirements for

22 contracts under subsection (a), the Secretary may consult

23 with—

24 ‘‘(I) Medicare+Choice organizations under part

25 C of this title;
60

•S 1959 IS

1 ‘‘(II) providers of services and other persons

2 who furnish items or services for which payment

3 may be made under this title; and

4 ‘‘(III) organizations and agencies performing

5 functions necessary to carry out the purposes of this

6 part.’’;

7 (III) by striking the third sen8 tence; and

9 (IV) by striking the fourth sen10 tence and inserting the following:

11 ‘‘(iii) The Secretary may not require, as a condition

12 of entering into a contract under this section or under sec13 tion 1871, that a carrier match data obtained other than

14 in its activities under this part with data used in the ad15 ministration of this part for purposes of identifying situa16 tions in which section 1862(b) may apply.’’;

17 (ii) in subparagraph (B), in the mat18 ter preceding clause (i), by striking ‘‘estab19 lish standards’’ and inserting ‘‘develop con20 tract performance requirements’’; and

21 (iii) in subparagraph (D), by striking

22 ‘‘standards and criteria’’ each place it ap23 pears and inserting ‘‘contract performance

24 requirements’’.

25 (2) CONFORMING AMENDMENTS.—
61

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1 (A) Section 1816(b) of the Social Security

2 Act (42 U.S.C. 1395h(b)) is amended—

3 (i) in the matter preceding paragraph

4 (1), by striking ‘‘an agreement’’ and in5 serting ‘‘a contract’’;

6 (ii) in paragraph (1)(B), by striking

7 ‘‘agreement’’ and inserting ‘‘contract’’; and

8 (iii) in paragraph (2)(A), by striking

9 ‘‘agreement’’ and inserting ‘‘contract’’.

10 (B) Section 1816(c) of the Social Security

11 Act (42 U.S.C. 1395h(c)) is amended—

12 (i) in paragraph (1)—

13 (I) in the first sentence, by strik14 ing ‘‘An agreement’’ and inserting ‘‘A

15 contract’’; and

16 (II) in the last sentence, by strik17 ing ‘‘an agreement’’ and inserting ‘‘a

18 contract’’;

19 (ii) in paragraph (2)(A), in the matter

20 preceding clause (i)—

21 (I) by striking ‘‘agreement’’ and

22 inserting ‘‘contract’’; and

23 (II) by inserting ‘‘that provides

24 for making payments under this part’’

25 after ‘‘this section’’;
62

•S 1959 IS

1 (iii) in paragraph (2)(C), by striking

2 ‘‘hospital, rural primary care hospital,

3 skilled nursing facility, home health agen4 cy, hospice program, comprehensive out5 patient rehabilitation facility, or rehabilita6 tion agency’’ and inserting ‘‘provider of

7 services (as defined in section 1861(u))’’;

8 and

9 (iv) in paragraph (3)(A)—

10 (I) by striking ‘‘agreement’’ and

11 inserting ‘‘contract’’; and

12 (II) by inserting ‘‘that provides

13 for making payments under this part’’

14 after ‘‘this section’’.

15 (C) Section 1816(h) of the Social Security

16 Act (42 U.S.C. 1395h(h)) is amended—

17 (i) by striking ‘‘An agreement’’ and

18 inserting ‘‘A contract’’; and

19 (ii) by striking ‘‘the agreement’’ each

20 place it appears and inserting ‘‘the con21 tract’’.

22 (D) Section 1816(i)(1) of the Social Secu23 rity Act (42 U.S.C. 1395h(i)(1)) is amended by

24 striking ‘‘an agreement’’ and inserting ‘‘a con25 tract’’.
63

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1 (E) Section 1816(j) of the Social Security

2 Act (42 U.S.C. 1395h(j)) is amended in the

3 matter preceding paragraph (1)—

4 (i) by striking ‘‘An agreement’’ and

5 inserting ‘‘A contract’’; and

6 (ii) by striking ‘‘for home health serv7 ices, extended care services, or post-hos8 pital extended care services’’.

9 (F) Section 1816(k) of the Social Security

10 Act (42 U.S.C. 1395h(k)) is amended—

11 (i) by striking ‘‘An agreement’’ and

12 inserting ‘‘A contract’’; and

13 (ii) by inserting ‘‘(as appropriate)’’

14 after ‘‘submit’’.

15 (G) Section 1816(l) of the Social Security

16 Act (42 U.S.C. 1395h(l)) is amended by strik17 ing ‘‘an agreement’’ and inserting ‘‘a contract’’.

18 (H) Section 1842(a) of the Social Security

19 Act (42 U.S.C. 1395u(a)) is amended—

20 (i) in the matter preceding paragraph

21 (1) (as amended by subsection (a)(1))—

22 (I) by striking ‘‘carriers with

23 which agreements’’ and inserting ‘‘sin24 gle contracts under section 1816 and

25 this section together, or separate con-
64

•S 1959 IS

1 tracts with eligible agencies and orga2 nizations with which contracts’’; and

3 (II) by striking ‘‘some or all of

4 the following functions’’ and inserting

5 ‘‘any or all of the following functions,

6 or parts of those functions’’; and

7 (ii) in paragraph (3), by inserting ‘‘(to

8 and from individuals enrolled under this

9 part and to and from physicians and other

10 entities that furnish items and services)’’

11 after ‘‘communication’’.

12 (I) Section 1842(b) of the Social Security

13 Act (42 U.S.C. 1395u(b)(2)(C)) is amended—

14 (i) in paragraph (2)(C), in the first

15 sentence, by inserting ‘‘(as appropriate)’’

16 after ‘‘carriers’’;

17 (ii) in paragraph (3), in the matter

18 preceding subparagraph (A), by inserting

19 ‘‘(as appropriate)’’ after ‘‘contract’’;

20 (iii) in paragraph (7)(A), in the mat21 ter preceding clause (i), by striking ‘‘the

22 carrier’’ and inserting ‘‘a carrier’’; and

23 (iv) in paragraph (11)(A), in the mat24 ter preceding clause (i), by inserting ‘‘(as

25 appropriate)’’ after ‘‘each carrier’’.
65

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1 (J) Section 1842(h) of the Social Security

2 Act (42 U.S.C. 1395u(h)) is amended—

3 (i) in paragraph (2), in the first

4 sentence—

5 (I) by striking ‘‘an agreement’’

6 and inserting ‘‘a contract’’; and

7 (II) by inserting ‘‘(as appro8 priate)’’ after ‘‘shall’’;

9 (ii) in paragraph (3)(A), by striking

10 ‘‘an agreement’’ and inserting ‘‘a con11 tract’’;

12 (iii) in paragraph (3)(B), in the third

13 sentence, by striking ‘‘agreements’’ and in14 serting ‘‘contracts’’;

15 (iv) in paragraph (5)(A), by inserting

16 ‘‘(as appropriate)’’ after ‘‘carriers’’; and

17 (v) in paragraph (8)—

18 (I) by striking ‘‘an agreement’’

19 and inserting ‘‘a contract’’; and

20 (II) by striking ‘‘such agree21 ment’’ and inserting ‘‘such contract’’.

22 (c) ELIMINATION OF SPECIAL PROVISIONS FOR TER23 MINATIONS OF CONTRACTS.—

24 (1) Section 1816 of the Social Security Act (42

25 U.S.C. 1395h) is amended—
66

•S 1959 IS

1 (A) in subsection (b), in the matter pre2 ceding paragraph (1), by striking ‘‘or renew’’;

3 (B) in subsection (c)(1), in the last sen4 tence, by striking ‘‘or renewing’’; and

5 (C) by striking subsection (g).

6 (2) Section 1842(b) of the Social Security Act

7 (42 U.S.C. 1395u(b)(2)) is amended by striking

8 paragraph (5).

9 (d) REPEAL OF FISCAL INTERMEDIARY REQUIRE10 MENTS THAT ARE NOT COST-EFFECTIVE.—Section

11 1816(f)(2) of the Social Security Act (42 U.S.C.

12 1395h(f)(2)) is amended to read as follows:

13 ‘‘(2) The contract performance requirements de14 scribed in paragraph (1) shall include—

15 ‘‘(A) with respect to claims for services fur16 nished under this part by any provider of services

17 (as defined in section 1861(u)) other than a hos18 pital, whether such agency or organization is able to

19 process 75 percent of reconsiderations within 60

20 days and 90 percent of reconsiderations within 90

21 days; and’’.

22 (e) REPEAL OF COST REIMBURSEMENT REQUIRE23 MENTS.—

24 (1) Section 1816(c)(1) of the Social Security

25 Act (42 U.S.C. 1395h(c)(1)) is amended—
67

•S 1959 IS

1 (A) in the first sentence—

2 (i) by striking the comma after ‘‘ap3 propriate’’ and inserting ‘‘and’’; and

4 (ii) by striking ‘‘, and shall provide

5 for payment’’ and all that follows before

6 the period; and

7 (B) by striking the second and third sen8 tences.

9 (2) Section 1842(c)(1) of the Social Security

10 Act (42 U.S.C. 1395h(c)(1)) is amended—

11 (A) in the first sentence—

12 (i) by striking ‘‘section shall provide’’

13 and inserting ‘‘section may provide’’; and

14 (ii) by striking ‘‘, and shall provide’’

15 and all that follows before the period; and

16 (B) by striking the second and third sen17 tences.

18 (3) Section 2326 of the Deficit Reduction Act

19 of 1984 (42 U.S.C. 1395h note) is amended by

20 striking subsection (a).

21 (f) SECRETARIAL FLEXIBILITY WITH RESPECT TO

22 RENEWING CONTRACTS AND TRANSFER OF FUNC23 TIONS.—
68

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1 (1) Section 1816(c) of the Social Security Act

2 (42 U.S.C. 1395h(c)) is amended by adding at the

3 end the following:

4 ‘‘(4)(A) Except as provided in laws with general ap5 plicability to Federal acquisition and procurement or in

6 subparagraph (B), the Secretary shall use competitive pro7 cedures when entering into contracts under this section.

8 ‘‘(B)(i) The Secretary may renew a contract with a

9 fiscal intermediary under this section from term to term

10 without regard to section 5 of title 41, United States Code,

11 or any other provision of law requiring competition, if the

12 fiscal intermediary has met or exceeded the performance

13 requirements established in the current contract.

14 ‘‘(ii) Functions may be transferred among fiscal

15 intermediaries without regard to any provision of law re16 quiring competition. However, the Secretary shall ensure

17 that performance quality is considered in such transfers.’’.

18 (2) Section 1842(b)(1) of the Social Security

19 Act (42 U.S.C. 1395u(b)(1)) is amended to read as

20 follows:

21 ‘‘(b)(1)(A) Except as provided in laws with general

22 applicability to Federal acquisition and procurement or in

23 subparagraph (B), the Secretary shall use competitive pro24 cedures when entering into contracts under this section.
69

•S 1959 IS

1 ‘‘(B)(i) The Secretary may renew a contract with a

2 carrier under subsection (a) from term to term without

3 regard to section 5 of title 41, United States Code, or any

4 other provision of law requiring competition, if the carrier

5 has met or exceeded the performance requirements estab6 lished in the current contract.

7 ‘‘(ii) Functions may be transferred among carriers

8 without regard to any provision of law requiring competi9 tion. However, the Secretary shall ensure that perform10 ance quality is considered in such transfers.’’.

11 (g) YEAR 2000 COMPLIANCE.—

12 (1) Section 1816(f)(2) of the Social Security

13 Act (42 U.S.C. 1395h(f)(2)) (as amended by sub14 section (d)) is amended by adding at the end the fol15 lowing:

16 ‘‘(B) a requirement that, by such time as the

17 Secretary considers reasonable, the information tech18 nology that is used or acquired by the agency or or19 ganization to carry out its responsibilities under this

20 title (to the extent that the Secretary finds such in21 formation technology is under the control of such

22 agency or organization)—

23 ‘‘(i) meets the definition of ‘Year 2000

24 compliant’ under the Federal Acquisition Regu25 lation (concerning accurate processing of date
70

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1 and time data (including calculating, com2 paring, and sequencing) from, into, and be3 tween the 20th and 21st centuries, and the

4 years 1999 and 2000 and leap year calcula5 tions) but without regard to whether the infor6 mation technology is being acquired; and

7 ‘‘(ii) meets such other criteria for Year

8 2000 compliance as the Secretary considers ap9 propriate.’’.

10 (2) Section 1842(b)(2)(A)(i) of the Social Secu11 rity Act (42 U.S.C. 1395u(b)(2)(A)(i)) (as amended

12 by subsection (b)(1)(F)) is amended by striking the

13 period and inserting ‘‘, including a requirement that,

14 by such time as the Secretary considers reasonable,

15 the information technology that is used or acquired

16 by such carrier to carry out its responsibilities under

17 this title (to the extent that the Secretary finds such

18 information technology is under the control of such

19 carrier) meets—

20 ‘‘(I) the definition of ‘Year 2000 compliant’

21 under the Federal Acquisition Regulation (con22 cerning accurate processing of date and time data

23 (including calculating, comparing, and sequencing)

24 from, into, and between the 20th and 21st centuries,

25 and the years 1999 and 2000 and leap year calcula-
71

•S 1959 IS

1 tions) but without regard to whether the information

2 technology is being acquired; and

3 ‘‘(II) such other criteria for Year 2000 compli4 ance as the Secretary considers appropriate.’’.

5 (h) WAIVER OF COMPETITIVE REQUIREMENTS FOR

6 INITIAL CONTRACTS.—Contracts that have periods that

7 begin before or during the 1-year period that begins on

8 the first day of the fourth calendar month that begins

9 after the date of enactment of this Act may be entered

10 into under section 1816(a) or 1842(a) of the Social Secu11 rity Act (42 U.S.C. 1395h(a) and 1395u(a)) without re12 gard to any provision of law requiring use of competitive

13 procedures.

14 (i) EFFECTIVE DATES.—

15 (1) The amendments made by subsection (c)

16 apply to contracts that have periods ending on or

17 after the end of the third calendar month that be18 gins after the date of enactment of this Act.

19 (2) The amendments made by subsections (a),

20 (b), (d), and (e) apply to contracts that have periods

21 beginning after the third calendar month that begins

22 after the date of enactment of this Act.

23 (3) The amendments made by subsection (f)

24 apply to contracts that have periods that begin after
72

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1 the end of the 1-year period specified in paragraph

2 (1) of this subsection.

3 (4) The amendment made by subsection (g)

4 shall take effect on the date of enactment of this

5 Act.

6 Subtitle D—Reduction in Student

7 Loan Fees

8 SEC. 151. REDUCTION IN STUDENT LOAN FEES.

9 (a) SUBSIDIZED FEDERAL STAFFORD LOANS.—Sub10 paragraph (H) of section 428(b)(1) of the Higher Edu11 cation Act of 1965 (20 U.S.C. 1078(b)(1)) is amended—

12 (1) by striking ‘‘not more than’’; and

13 (2) by striking ‘‘will not be used for incentive

14 payments to lenders’’ and inserting ‘‘shall be paid to

15 the Federal Government for deposit in the Treas16 ury’’.

17 (b) UNSUBSIDIZED STAFFORD LOAN AND PLUS

18 LOAN INSURANCE PREMIUM REDIRECTION.—

19 (1) UNSUBSIDIZED STAFFORD LOANS.—Section

20 428H(h) of the Higher Education Act of 1965 (20

21 U.S.C. 1078–8(h)) is amended—

22 (A) by striking ‘‘may’’ and inserting

23 ‘‘shall’’;

24 (B) by striking ‘‘not more than’’;
73

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1 (C) by striking ‘‘, if such premium will not

2 be used for incentive payments to lenders’’; and

3 (D) by inserting at the end the following:

4 ‘‘The proceeds of the insurance premium shall

5 be paid to the Federal Government for deposit

6 into the Treasury.’’.

7 (2) PLUS LOANS.—Section 428B of the Higher

8 Education Act of 1965 (20 U.S.C. 1078–2) is

9 amended by adding after subsection (f) the fol10 lowing:

11 ‘‘(g) INSURANCE PREMIUM.—Each State or non12 profit private institution or organization having an agree13 ment with the Secretary under section 428(b)(1) shall

14 charge the borrower of a loan made under this section a

15 single insurance premium in the amount of 1 percent of

16 the principal amount of the loan. The proceeds of the in17 surance premium shall be paid to the Federal Government

18 for deposit into the Treasury.’’.

19 Subtitle E—Limitations on Defense

20 Funding for Fiscal Years 2000

21 Through 2004

22 SEC. 161. BUDGET AUTHORITY.

23 Notwithstanding any other provision of law, the total

24 amount of the budget authority considered as being avail25 able for budget function 050 (National Defense) for fiscal
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1 years 2000 through 2004 may not exceed the following

2 amounts:

3 (1) FISCAL YEAR 2000.—For fiscal year 2000,

4 $276,348,000,000.

5 (2) FISCAL YEAR 2001.—For fiscal year 2001,

6 $283,367,000,000.

7 (3) FISCAL YEAR 2002.—For fiscal year 2002,

8 $290,470,000,000.

9 (4) FISCAL YEAR 2003.—For fiscal year 2003,

10 $297,903,000,000.

11 (5) FISCAL YEAR 2004.—For fiscal year 2004,

12 $306,024,000,000.

13 SEC. 162. PROTECTION OF READINESS AND QUALITY OF

14 LIFE.

15 Within the limits set forth in section 161, the

16 amounts available for budget function 050 (National De17 fense) for the fiscal years covered by that section shall

18 be expended in a manner that does not adversely affect

19 the readiness of the Armed Forces and the quality of life

20 of military personnel, military retirees, and their families.

21 SEC. 163. EXPENDITURES NOT CONSIDERED EMERGENCY

22 EXPENDITURES.

23 (a) IN GENERAL.—Amounts expended for readiness,

24 or for peacekeeping operations that began before Sep25 tember 30, 1999, may not be considered expenditures for
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1 emergency requirements within the meaning of section

2 251(b)(2)(A) of the Balanced Budget and Emergency

3 Deficit Control Act of 1985.

4 (b) EXCEPTION.—The limitation on treatment of ex5 penditures for peacekeeping operations under subsection

6 (a) does not apply to expenditures for any such operation

7 that significantly increases, in terms of the size of the

8 forces involved or in tempo, after September 30, 1999.

9 Subtitle F—Internal Revenue Code

10 Provisions

11 SEC. 171. RECAPTURE OF UNIFIED CREDIT FOR LARGE ES12 TATES.

13 (a) IN GENERAL.—Paragraph (2) of section 2001(c)

14 of the Internal Revenue Code of 1986 (relating to phase15 out of graduated rates and unified credit) is amended by

16 striking ‘‘$10,000,000’’ and all that follows and inserting

17 ‘‘$10,000,000. The amount of the increase under the pre18 ceding sentence shall not exceed the sum of the applicable

19 credit amount under section 2010(c) (determined without

20 regard to section 2057(a)(3)) and $359,200.’’

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

22 this section shall apply to decedents dying after the date

23 of the enactment of this Act.
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1 SEC. 172. REPEAL OF PERCENTAGE DEPLETION FOR CER2 TAIN NONFUEL MINERALS MINED ON FED3 ERAL LANDS.

4 (a) IN GENERAL.—Section 613 of the Internal Rev5 enue Code of 1986 (relating to percentage depletion) is

6 amended by adding at the end the following new sub7 section:

8 ‘‘(f) DENIAL OF PERCENTAGE DEPLETION FOR CER9 TAIN NONFUEL MINERALS MINED ON FEDERAL

10 LANDS.—

11 ‘‘(1) IN GENERAL.—In the case of any applica12 ble nonfuel mineral, the allowance for depletion shall

13 be computed without reference to this section.

14 ‘‘(2) APPLICABLE NONFUEL MINERAL.—For

15 purposes of this subsection, the term ‘applicable

16 nonfuel mineral’ means any mineral which—

17 ‘‘(A) is subject to a mining claim under

18 chapter six of title XXXII of the Revised Stat19 utes (30 U.S.C. 21 et seq.) (commonly referred

20 to as the ‘General Mining Law of 1872’), or

21 ‘‘(B) was originally acquired (whether or

22 not by the taxpayer) pursuant to a patent

23 granted under such chapter.’’

24 (b) AGGREGATION OF MINERAL INTERESTS.—Para25 graph (1) of section 614(c) of the Internal Revenue Code

26 of 1986 (relating to election to aggregate separate inter-
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1 ests) is amended by adding at the end the following new

2 sentence: ‘‘A taxpayer may not elect to aggregate a sepa3 rate operating mineral interest in any applicable nonfuel

4 mineral (as defined in section 613(f)(2)) with an interest

5 in a mineral other than such an applicable nonfuel min6 eral.’’

7 (c) EFFECTIVE DATES.—

8 (1) IN GENERAL.—The amendments made by

9 this section shall apply to taxable years beginning

10 after the date of the enactment of this Act.

11 (2) SPECIAL RULE FOR AGGREGATED MINERAL

12 INTERESTS.—

13 (A) IN GENERAL.—If, on or before the

14 first date on which the Committee on Ways and

15 Means of the House of Representatives or the

16 Committee on Finance of the Senate takes ac17 tion with respect to such amendments, a tax18 payer aggregated separate operating mineral in19 terests in applicable nonfuel minerals (as de20 fined in section 613(f)(2) of the Internal Rev21 enue Code of 1986) and in minerals other than

22 such applicable nonfuel minerals, the amend23 ments made by this section shall not apply to

24 such property, except that the allowance for de25 pletion under section 613 of such Code for tax-
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1 able years beginning after the date of the enact2 ment of this Act, with respect to such property

3 shall be equal to the amount which bears the

4 same ratio to such allowance computed without

5 regard to this paragraph as the—

6 (i) number of acres in such property

7 with respect to interests in minerals other

8 than applicable nonfuel minerals (as so de9 fined), bears to

10 (ii) total number of acres in such

11 property.

12 (B) ELECTION TO TERMINATE AGGREGA13 TION.—Subparagraph (A) shall not apply if a

14 taxpayer elects, at such time and in such man15 ner as the Secretary of the Treasury may pre16 scribe, to terminate the election under section

17 614(c) of such Code with respect to the prop18 erty described in subparagraph (A) for all tax19 able years beginning after the date of the enact20 ment of this Act. In making such election, the

21 taxpayer may elect to aggregate interests in ap22 plicable nonfuel minerals and other minerals

23 separately.

24 (3) CERTAIN PURCHASES FOR FAIR MARKET

25 VALUE.—The amendments made by this section
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1 shall not apply with respect to any mineral interests

2 in applicable nonfuel minerals (as defined in section

3 613(f)(2) of such Code) acquired by the taxpayer in

4 a sale or exchange for fair market value on or before

5 the first day on which the Committee on Ways and

6 Means of the House of Representatives or the Com7 mittee on Finance of the Senate takes action with

8 respect to such amendments. The preceding sentence

9 shall not apply if the taxpayer acquired such inter10 ests after November 10, 1999, and before such first

11 date from a person who is a related person (within

12 the meaning of section 267 or 707 of such Code).

13 SEC. 173. REPEAL OF FOREIGN EARNED INCOME EXCLU14 SION.

15 Paragraph (1) of section 911(a) of the Internal Rev16 enue Code of 1986 (relating to exclusion from gross in17 come) is amended by inserting ‘‘in the case of taxable

18 years beginning before January 1, 2000,’’ before ‘‘the for19 eign earned income’’.

20 SEC. 174. DEPRECIATION ADJUSTMENTS FOR TOBACCO

21 MANUFACTURING EQUIPMENT.

22 (a) IN GENERAL.—Section 168(b)(3) of the Internal

23 Revenue Code of 1986 (relating to property to which

24 straight line method applies) is amended by adding at the

25 end the following new subparagraph:
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1 ‘‘(G) Tobacco manufacturing equip2 ment described in subsection (e)(6).’’

3 (b) DEFINITION OF TOBACCO MANUFACTURING

4 EQUIPMENT.—Section 168(e) of the Internal Revenue

5 Code of 1986 (relating to classification of property) is

6 amended by adding at the end the following new para7 graph:

8 ‘‘(6) TOBACCO MANUFACTURING EQUIPMENT.—

9 The term ‘tobacco manufacturing equipment’ means

10 property which is used exclusively in the manufac11 turing or production of tobacco products, other than

12 property which is used in connection with a farming

13 business (as defined in section 263A(e)(4)).’’

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

15 this section shall apply to property placed in service after

16 the date of the enactment of this Act.

17 SEC. 175. FOREIGN OIL AND GAS INCOME.

18 (a) SPECIAL RULES FOR FOREIGN TAX CREDIT

19 WITH RESPECT TO FOREIGN OIL AND GAS INCOME.—

20 (1) CERTAIN TAXES NOT CREDITABLE.—

21 (A) IN GENERAL.—Subsection (a) of sec22 tion 907 of the Internal Revenue Code of 1986

23 (relating to reduction in amount allowed as for24 eign tax under section 901) is amended to read

25 as follows:
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1 ‘‘(a) CERTAIN TAXES NOT CREDITABLE.—

2 ‘‘(1) IN GENERAL.—For purposes of this sub3 title, the term ‘income, war profits, and excess prof4 its taxes’ shall not include—

5 ‘‘(A) any taxes which are paid or accrued

6 to any foreign country with respect to foreign

7 oil and gas income and which are not imposed

8 under a generally applicable income tax law of

9 such country, and

10 ‘‘(B) any taxes (not described in subpara11 graph (A)) which are paid or accrued to any

12 foreign country with respect to foreign oil and

13 gas income to the extent that the foreign law

14 imposing such amount of tax is structured, or

15 in fact operates, so that the amount of tax im16 posed with respect to foreign oil and gas income

17 will generally be materially greater, over a rea18 sonable period of time, than the amount gen19 erally imposed on income that is not foreign oil

20 and gas income.

21 In computing the amount not treated as tax under

22 subparagraph (B), such amount shall be treated as

23 a deduction under the foreign law.

24 ‘‘(2) FOREIGN OIL AND GAS INCOME.—For pur25 poses of this paragraph, the term ‘foreign oil and
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1 gas income’ means the amount of foreign oil and gas

2 extraction income and foreign oil related income.

3 ‘‘(3) GENERALLY APPLICABLE INCOME TAX

4 LAW.—For purposes of this paragraph, the term

5 ‘generally applicable income tax law’ means any law

6 of a foreign country imposing an income tax if such

7 tax generally applies to all income from sources

8 within such foreign country—

9 ‘‘(A) without regard to the residence or na10 tionality of the person earning such income,

11 and

12 ‘‘(B) in the case of any income earned by

13 a corporation, partnership, or other entity,

14 without regard to—

15 ‘‘(i) where such corporation, partner16 ship, or other entity is organized, and

17 ‘‘(ii) the residence or nationality of

18 the persons owning interests in such cor19 poration, partnership, or entity.’’

20 (B) CONFORMING AMENDMENT.—Section

21 907 of such Code is amended by striking sub22 sections (b), (c)(3), (c)(4), (c)(5), and (f).

23 (2) SEPARATE BASKETS FOR FOREIGN OIL AND

24 GAS EXTRACTION INCOME AND FOREIGN OIL RE25 LATED INCOME.—
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1 (A) IN GENERAL.—Paragraph (1) of sec2 tion 904(d) of such Code (relating to separate

3 application of section with respect to certain

4 categories of income) is amended by striking

5 ‘‘and’’ at the end of subparagraph (H), by re6 designating subparagraph (I) as subparagraph

7 (K) and by inserting after subparagraph (H)

8 the following new subparagraphs:

9 ‘‘(I) foreign oil and gas extraction income,

10 ‘‘(J) foreign oil related income, and’’.

11 (B) DEFINITIONS.—Paragraph (2) of sec12 tion 904(d) of such Code is amended by redes13 ignating subparagraphs (H) and (I) as subpara14 graphs (J) and (K), respectively, and by insert15 ing after subparagraph (G) the following new

16 subparagraphs:

17 ‘‘(H) FOREIGN OIL AND GAS EXTRACTION

18 INCOME.—The term ‘foreign oil and gas extrac19 tion income’ has the meaning given such term

20 by section 907(c)(1). Such term shall not in21 clude any dividend from a noncontrolled section

22 902 corporation.

23 ‘‘(I) FOREIGN OIL RELATED INCOME.—

24 The term ‘foreign oil related income’ has the

25 meaning given such term by section 907(c)(2).
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1 Such term shall not include any dividend from

2 a noncontrolled section 902 corporation and any

3 shipping income.’’

4 (C) CONFORMING AMENDMENT.—Clause

5 (i) of section 904(d)(3)(F) of such Code is

6 amended by striking ‘‘or (E)’’ and inserting

7 ‘‘(E), (I), or (J)’’.

8 (3) EFFECTIVE DATE.—

9 (A) IN GENERAL.—Except as otherwise

10 provided in this paragraph, the amendments

11 made by this subsection shall apply to taxable

12 years beginning after December 31, 1999.

13 (B) DISALLOWANCE RULE.—

14 (i) Section 907(a) of such Code (as

15 amended by paragraph (1)) shall apply to

16 taxes paid or accrued after December 31,

17 1999, in taxable years ending after such

18 date.

19 (ii) In determining the amount of

20 taxes deemed to be paid in a taxable year

21 beginning after December 31, 1999, under

22 section 902 or 960 of such Code, section

23 907(a) of such Code (as amended by para24 graph (1)) shall apply to all taxes whether
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1 paid or accrued before, on, or after Decem2 ber 31, 1999.

3 (C) LOSS RULE.—Notwithstanding the

4 amendments made by paragraph (1)(B), section

5 907(c)(4) of such Code shall continue to apply

6 with respect to foreign oil and gas extraction

7 losses for taxable years beginning before Janu8 ary 1, 2000.

9 (D) TRANSITIONAL RULES.—

10 (i) Any taxes paid or accrued in a tax11 able year beginning before January 1,

12 2000, with respect to income which was

13 described in subparagraph (I) of section

14 904(d)(1) of such Code (as in effect on the

15 day before the date of the enactment of

16 this Act) shall be treated as taxes paid or

17 accrued with respect to foreign oil and gas

18 extraction income or foreign oil related in19 come (as the case may be) to the extent

20 such taxes were paid or accrued with re21 spect to such type of income.

22 (ii) Any unused oil and gas extraction

23 taxes which under section 907(f) of such

24 Code (as so in effect) would have been al25 lowed as a carryover to the taxpayer’s first
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1 taxable year beginning after December 31,

2 1998 (determined without regard to the

3 limitation of paragraph (2) of such section

4 907(f) for such first taxable year), shall be

5 allowed as carryovers under section 904(c)

6 of such Code in the same manner as if

7 they were unused taxes under section

8 904(c) with respect to foreign oil and gas

9 extraction income.

10 (b) ELIMINATION OF DEFERRAL FOR FOREIGN OIL

11 AND GAS EXTRACTION INCOME.—

12 (1) GENERAL RULE.—Paragraph (1) of section

13 954(g) of the Internal Revenue Code of 1986 (defin14 ing foreign base company oil related income) is

15 amended to read as follows:

16 ‘‘(1) IN GENERAL.—Except as otherwise pro17 vided in this subsection, the term ‘foreign oil and

18 gas income’ means any income of a kind which

19 would be taken into account in determining the

20 amount of—

21 ‘‘(A) foreign oil and gas extraction income

22 (as defined in section 907(c)(1)), or

23 ‘‘(B) foreign oil related income (as defined

24 in section 907(c)(2)).’’

25 (2) CONFORMING AMENDMENTS.—
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1 (A)(i) Subsections (a)(5), (b)(5), and

2 (b)(8) of section 954 of such Code are each

3 amended by striking ‘‘base company oil related

4 income’’ each place it appears (including in the

5 heading of subsection (b)(8)) and inserting ‘‘oil

6 and gas income’’.

7 (ii) Subsection (b)(4) of section 954 of

8 such Code is amended by striking ‘‘base com9 pany oil-related income’’ and inserting ‘‘oil and

10 gas income’’.

11 (B) The subsection heading for subsection

12 (g) of section 954 of such Code is amended by

13 striking ‘‘FOREIGN BASE COMPANY OIL RE14 LATED INCOME’’ and inserting ‘‘FOREIGN OIL

15 AND GAS INCOME’’.

16 (C) Subparagraph (A) of section 954(g)(2)

17 of such Code is amended by striking ‘‘foreign

18 base company oil related income’’ and inserting

19 ‘‘foreign oil and gas income’’.

20 (3) EFFECTIVE DATE.—The amendments made

21 by this subsection shall apply to taxable years of for22 eign corporations beginning after December 31,

23 1999, and to taxable years of United States share24 holders in which or with which such taxable years of

25 foreign corporations end.
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1 SEC. 176. TRANSFER PRICING.

2 (a) AUTHORITY OF SECRETARY WHEN LEGAL LIM3 ITS ON TRANSFER BY TAXPAYER.—Section 482 of the In4 ternal Revenue Code of 1986 (relating to allocation of in5 come and deductions among taxpayers) is amended by

6 adding at the end the following: ‘‘The authority of the Sec7 retary under this section shall not be limited by any re8 striction (by any law or agreement) on the ability of such

9 interests, organizations, trades, or businesses to transfer

10 or receive money or other property.’’

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

12 this section shall apply to taxable years beginning after

13 December 31, 1999.

14 TITLE II—MISCELLANEOUS

15 PROVISIONS

16 SEC. 201. PROHIBITION ON FUNDING TELEVISION MARTI

17 AND RADIO MARTI.

18 No Federal funds may be made available to carry out

19 any provision of the Television Broadcasting to Cuba Act

20 (22 U.S.C. 14655aa et seq.) or the Radio Broadcasting

21 to Cuba Act (22 U.S.C. 1465 et seq.).

22 SEC. 202. PROHIBITION OF USE OF FEDERAL FUNDS FOR

23 LOBBYING.

24 No funds made available for the National Low-Level

25 Radioactive Waste Management Program of the Depart26 ment of Energy may be used to pay the costs of lobbying
89

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1 any Federal, State, or local government officer or em2 ployee on the question of the establishment of a low-level

3 radioactive waste storage site at any location.

4 SEC. 203. PROHIBITION OF FUNDING OF THE NUCLEAR EN5 ERGY RESEARCH INITIATIVE.

6 No funds appropriated to the Department of Energy

7 may be used to carry out the Nuclear Energy Research

8 Initiative.

9 SEC. 204. REDUCTION IN GOVERNMENT AGENCY SPENDING

10 ON TRAVEL, PRINTING, SUPPLIES AND

11 OTHER ITEMS.

12 Notwithstanding any other provision of law, the total

13 amount of budget authority available for a fiscal year to

14 all Federal agencies for—

15 (1) travel and transportation of persons (object

16 class 21.0);

17 (2) transportation of things (object class 22.0);

18 (3) printing and reproduction (object class

19 24.0);

20 (4) advisory and assistance services (object

21 class 25.1); and

22 (5) supplies and materials (object class 26.0);

23 shall be limited to the actual expenditures for those object

24 classes in fiscal year 1998.
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1 SEC. 205. REDUCING STUDENT LOAN DEFAULTS.

2 (a) IN GENERAL.—Section 453(j) of the Social Secu3 rity Act (42 U.S.C. 653(j)) is amended by adding at the

4 end the following:

5 ‘‘(6) INFORMATION COMPARISONS AND DISCLO6 SURE FOR ENFORCEMENT OF OBLIGATIONS ON

7 HIGHER EDUCATION ACT LOANS AND GRANTS.—

8 ‘‘(A) FURNISHING OF INFORMATION BY

9 THE SECRETARY OF EDUCATION.—The Sec10 retary of Education shall furnish to the Sec11 retary, on a quarterly basis or at such less fre12 quent intervals as may be determined by the

13 Secretary of Education, information in the cus14 tody of the Secretary of Education for compari15 son with information in the National Directory

16 of New Hires, in order to obtain the informa17 tion in such directory with respect to individ18 uals who—

19 ‘‘(i) are borrowers of loans made

20 under title IV of the Higher Education Act

21 of 1965 that are in default; or

22 ‘‘(ii) owe an obligation to refund an

23 overpayment of a grant awarded under

24 such title.

25 ‘‘(B) REQUIREMENT TO SEEK MINIMUM

26 INFORMATION NECESSARY.—The Secretary of
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1 Education shall seek information pursuant to

2 this section only to the extent essential to im3 proving collection of the debt described in sub4 paragraph (A).

5 ‘‘(C) DUTIES OF THE SECRETARY.—

6 ‘‘(i) INFORMATION COMPARISON; DIS7 CLOSURE TO THE SECRETARY OF EDU8 CATION.—The Secretary, in cooperation

9 with the Secretary of Education, shall

10 compare information in the National Di11 rectory of New Hires with information in

12 the custody of the Secretary of Education,

13 and disclose information in that Directory

14 to the Secretary of Education, in accord15 ance with this paragraph, for the purposes

16 specified in this paragraph.

17 ‘‘(ii) CONDITION ON DISCLOSURE.—

18 The Secretary shall make disclosures in ac19 cordance with clause (i) only to the extent

20 that the Secretary determines that such

21 disclosures do not interfere with the effec22 tive operation of the program under this

23 part. Support collection under section

24 466(b) shall be given priority over collec-
92

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1 tion of any defaulted student loan or grant

2 overpayment against the same income.

3 ‘‘(D) USE OF INFORMATION BY THE SEC4 RETARY OF EDUCATION.—The Secretary of

5 Education may use information resulting from

6 a data match pursuant to this paragraph

7 only—

8 ‘‘(i) for the purpose of collection of

9 the debt described in subparagraph (A)

10 owed by an individual whose annualized

11 wage level (determined by taking into con12 sideration information from the National

13 Directory of New Hires) exceeds $16,000;

14 and

15 ‘‘(ii) after removal of personal identi16 fiers, to conduct analyses of student loan

17 defaults.

18 ‘‘(E) DISCLOSURE OF INFORMATION BY

19 THE SECRETARY OF EDUCATION.—

20 ‘‘(i) DISCLOSURES PERMITTED.—The

21 Secretary of Education may disclose infor22 mation resulting from a data match pursu23 ant to this paragraph only to—

24 ‘‘(I) a guaranty agency holding a

25 loan made under part B of title IV of
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1 the Higher Education Act of 1965 on

2 which the individual is obligated;

3 ‘‘(II) a contractor or agent of the

4 guaranty agency described in sub5 clause (I);

6 ‘‘(III) a contractor or agent of

7 the Secretary; and

8 ‘‘(IV) the Attorney General.

9 ‘‘(ii) PURPOSE OF DISCLOSURE.—The

10 Secretary of Education may make a disclo11 sure under clause (i) only for the purpose

12 of collection of the debts owed on defaulted

13 student loans, or overpayments of grants,

14 made under title IV of the Higher Edu15 cation Act of 1965.

16 ‘‘(iii) RESTRICTION ON REDISCLO17 SURE.—An entity to which information is

18 disclosed under clause (i) may use or dis19 close such information only as needed for

20 the purpose of collecting on defaulted stu21 dent loans, or overpayments of grants,

22 made under title IV of the Higher Edu23 cation Act of 1965.

24 ‘‘(F) REIMBURSEMENT OF HHS COSTS.—

25 The Secretary of Education shall reimburse the
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1 Secretary, in accordance with subsection (k)(3),

2 for the additional costs incurred by the Sec3 retary in furnishing the information requested

4 under this subparagraph.’’.

5 (b) PENALTIES FOR MISUSE OF INFORMATION.—

6 Section 402(a) of the Child Support Performance and In7 centive Act of 1998 (112 Stat. 669) is amended in the

8 matter added by paragraph (2) by inserting ‘‘or any other

9 person’’ after ‘‘officer or employee of the United States’’.

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

11 this section shall become effective October 1, 1999.

Æ