I

104TH CONGRESS

2D SESSION H. R. 4230

To amend title II of the Social Security Act and the Internal Revenue

Code of 1986 to make improvements in the rehabilitation programs

provided for disabled individuals under such Act, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 27, 1996

Mr. BUNNING of Kentucky (for himself, Mr. JACOBS, Mr. GIBBONS, Mr.

CRANE, Mr. THOMAS, Mr. SHAW, Mrs. JOHNSON of Connecticut, Mr.

CAMP, Mr. SAM JOHNSON of Texas, Mr. COLLINS of Georgia, Mr.

PORTMAN, Mr. LAUGHLIN, Mr. ENGLISH of Pennsylvania, Mr.

CHRISTENSEN, and Ms. DUNN of Washington) introduced the following

bill; which was referred to the Committee on Ways and Means

A BILL

To amend title II of the Social Security Act and the Internal

Revenue Code of 1986 to make improvements in the

rehabilitation programs provided for disabled individuals

under such Act, and for other purposes.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Rehabilitation and Re5 turn to Work Opportunity Act of 1996’’.
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1 SEC. 2. REHABILITATION SERVICES UNDER REHABILITA2 TION AND RETURN-TO-WORK PROGRAM.

3 (a) IN GENERAL.—Section 222 of the Social Security

4 Act (42 U.S.C. 422) is amended—

5 (1) by redesignating subsection (e) as sub6 section (f); and

7 (2) by inserting after subsection (d) the follow8 ing new subsection:

9 ‘‘(e) REHABILITATION AND RETURN-TO-WORK PRO10 GRAM.—

11 ‘‘(1) IN GENERAL.—There is established under

12 the Social Security Administration a Rehabilitation

13 and Return-to-Work Program.

14 ‘‘(2) ASSESSMENT OF CAPABILITY FOR VOCA15 TIONAL ADJUSTMENT.—Under the Program, each

16 determination under section 221 or sections 1631(c)

17 and 1633(a) that an individual is under a disability

18 shall be accompanied by a determination, by the offi19 cials making such determination under section 221

20 or sections 1631(c) and 1633(a), of whether or not

21 the individual is capable of vocational adjustment.

22 The individual shall be determined to be capable of

23 vocational adjustment if such officials determine

24 that there is a reasonable possibility that the individ25 ual will be capable, upon provision of vocational re26 habilitation services to the individual under the Pro-
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1 gram or under a State plan approved under title I

2 of the Rehabilitation Act of 1973, to perform sub3 stantial gainful activity. Participation in the Pro4 gram or such a State plan by individuals determined

5 capable of vocational adjustment shall be mandatory,

6 until a determination is made by a provider of reha7 bilitation services, in the course of employment eval8 uation under paragraph (5)(B) or during the imple9 mentation of the employment plan under paragraph

10 (5), that the individual is no longer capable of voca11 tional adjustment or that the original determination

12 that the individual is capable of vocational adjust13 ment was in error. Nothing in this paragraph shall

14 be construed to preclude voluntary participation in

15 the Program by any individual determined to be

16 under a disability under section 221 for whom par17 ticipation is not mandatory.

18 ‘‘(3) REGIONAL ADMINISTRATORS.—

19 ‘‘(A) SERVICE REGIONS.—The Program

20 shall provide for the division of the geographic

21 area of the United States into specified service

22 regions for purposes of the Program.

23 ‘‘(B) SELECTION AND ASSIGNMENT TO

24 SERVICE REGIONS.—Under the Program, the

25 Commissioner of Social Security shall enter into
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1 agreements with organizations in the private

2 sector to serve as regional administrators of the

3 Program for each service region. Regional ad4 ministrators shall be selected for each region by

5 means of a competitive bidding process, from

6 among organizations in the private sector with

7 substantial expertise and experience in the field

8 of vocational rehabilitation or Federal contract

9 management. Such organizations may serve as

10 regional administrator for any number of serv11 ice regions, except that not less than 2 qualified

12 organizations may serve at any time as regional

13 administrators under the Program.

14 ‘‘(C) TENURE, RENEWAL, AND EARLY TER15 MINATION.—Each agreement entered into

16 under this paragraph shall provide for service

17 by regional administrators limited to terms of 5

18 years, subject to renewal. Such agreements

19 shall provide for early termination upon failure

20 to meet performance standards which shall be

21 specified in the agreement and which shall be

22 weighted to take into account any performance

23 in prior terms. Such performance standards

24 shall include (but are not limited to)—
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1 ‘‘(i) measures for timely operation of

2 provider payment systems,

3 ‘‘(ii) measures for ease of access by

4 recipients to vocational rehabilitation serv5 ices, and

6 ‘‘(iii) measures for determining the

7 extent to which failures in obtaining voca8 tional rehabilitation for participants for

9 each service region, and in relation to

10 other service regions, fall within acceptable

11 parameters.

12 ‘‘(D) PRECLUSION FROM DIRECT PARTICI13 PATION IN DELIVERY OF SERVICES IN OWN

14 SERVICE AREA.—

15 ‘‘(i) IN GENERAL.—Agreements under

16 this paragraph shall conform to require17 ments which shall be provided in regula18 tions prescribed under this section which

19 preclude—

20 ‘‘(I) direct participation by the

21 regional administrator for any service

22 region in the delivery of vocational re23 habilitation services to participants in

24 such region, and
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1 ‘‘(II) the holding by regional ad2 ministrators of financial interests in

3 network coordinators and service pro4 viders under their administration.

5 ‘‘(ii) DELIVERY OF SERVICES IN

6 OTHER AREAS PERMITTED.—No agreement

7 under this paragraph shall limit the ability

8 of a regional administrator for any service

9 region to operate as a service provider

10 under the Program in any other service re11 gion not under its administration.

12 ‘‘(E) REFERRAL OF BENEFICIARIES AND

13 APPLICANTS TO PROVIDERS.—The regional ad14 ministrator for each service region shall provide

15 for expedited referral of beneficiaries and appli16 cants to providers of vocational rehabilitation

17 services in the service region. The regional ad18 ministrator shall ensure that each beneficiary or

19 applicant is allowed changes in providers for

20 good cause without being deemed to have re21 jected services under the Program, under stand22 ards which shall be provided in regulations pre23 scribed under this section in order to promote

24 the mutual responsibility of the provider of such

25 services and the recipient of such services to
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1 avoid unnecessary disruption in the delivery of

2 such services by the provider. The regional ad3 ministrator for each service region shall estab4 lish and maintain lists of providers of vocational

5 rehabilitation services eligible for referrals in

6 the service region and shall make such lists

7 generally available to the public.

8 ‘‘(F) QUALITY ASSURANCE.—The regional

9 administrator for each service region shall enter

10 into arrangements providing at least annually

11 for such reviews by consumer groups and pri12 vate auditing firms as are necessary to provide

13 for effective quality assurance in the provision

14 of services by providers in the service region

15 and in the administration of the milestone pay16 ment system prescribed pursuant to paragraph

17 (6) with respect to such providers. The primary

18 focus of such reviews shall be on the extent to

19 which the required components of employment

20 evaluation under paragraph (5)(B) and of indi21 vidual employment plans under paragraph

22 (5)(C) are reflected in the files of the recipients

23 of vocational rehabilitation under the Program.

24 Such reviews shall also determine the extent to

25 which such recipients have received information
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1 required under the Program relating to the

2 availability of the services of providers of core

3 services, providers of support services, and pro4 viders of specialized services, and the extent to

5 which such recipients have been given the op6 portunity of personal choice regarding the selec7 tion of providers and of their own employment

8 goals and objectives. The regional administrator

9 shall publish locally the results obtained from

10 the arrangements entered into under this sub11 paragraph, in accordance with regulations pre12 scribed under this section, so as to effectively

13 educate prospective recipients of vocational re14 habilitation services as they select their provid15 ers.

16 ‘‘(G) DISPUTE RESOLUTION.—Under regu17 lations which shall be prescribed under this sec18 tion, the regional administrator for each service

19 region—

20 ‘‘(i) shall afford to any party to a dis21 pute arising under the Program a reason22 able opportunity for a full and fair review

23 by the regional administrator of the matter

24 in dispute, and
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1 ‘‘(ii) shall afford to all parties to the

2 dispute an opportunity to submit the dis3 pute to arbitration by a third party se4 lected by the parties from persons deter5 mined by the regional administrator as

6 qualified to serve as an independent arbi7 trator.

8 An award by an arbitrator pursuant to arbitra9 tion entered into under this subparagraph shall

10 be final and binding between the parties to the

11 arbitration but shall have no force or effect on

12 any other person. Nothing in this subparagraph

13 shall be construed to otherwise limit the appli14 cation of subsections (b) and (g) of section 205

15 and sections 221, 1631(c), and 1633(a) with re16 spect to any beneficiary or applicant.

17 ‘‘(4) NETWORK COORDINATORS.—

18 ‘‘(A) HIRING BY REGIONAL ADMINISTRA19 TORS.—The regional administrator for each

20 service region under the Program shall recruit,

21 hire, monitor, and authorize the compensation

22 by the Social Security Administration of such

23 network coordinators for the service region as

24 are necessary and appropriate to ensure that

25 adequate choices for vocational rehabilitation
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1 services are made available to recipients of such

2 services under the Program.

3 ‘‘(B) QUALIFICATIONS FOR NETWORK CO4 ORDINATORS.—The network coordinators re5 ferred to in subparagraph (A) shall consist of

6 organizations which have substantial expertise

7 and experience in the field of vocational reha8 bilitation.

9 ‘‘(C) ENSURING AVAILABILITY OF ADE10 QUATE SERVICES.—In accordance with regula11 tions which shall be prescribed under this sec12 tion, each network coordinator assigned to a

13 service region shall ensure that—

14 ‘‘(i) a comprehensive array of voca15 tional rehabilitation services are available

16 throughout the service region, including

17 rural areas, and

18 ‘‘(ii) such services are provided by

19 both—

20 ‘‘(I) providers who are generalists

21 with respect to all populations, and

22 ‘‘(II) providers who are special23 ists with respect to particular popu24 lations, which may include specialists

25 in mobility, cognitive, sensory, and
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1 mental impairments and other areas

2 specified in such regulations.

3 A network coordinator may meet the require4 ments of this subparagraph by providing voca5 tional rehabilitation services directly, or by en6 tering into agreements with other vocational re7 habilitation service providers.

8 ‘‘(D) REASONABLE ACCESS TO SERV9 ICES.—Under standards which shall be provided

10 in regulations prescribed under this section,

11 each network coordinator shall take such meas12 ures as are necessary to ensure that each bene13 ficiary or applicant has reasonable access under

14 the Program to vocational rehabilitation serv15 ices, including career planning, career plan de16 velopment, vocational assessment, job training,

17 placement, and follow-up services and such

18 other vocational rehabilitation services as may

19 be specified in regulations issued under this sec20 tion as core services.

21 ‘‘(E) REQUIREMENTS RELATING TO PROVI22 SION OF SERVICES.—Each network coordinator

23 shall take such measures as are necessary to

24 ensure that—
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1 ‘‘(i) providers of vocational rehabilita2 tion services made available by the network

3 coordinator meet specific service delivery

4 program expectations which shall be set

5 forth in regulations prescribed under this

6 section,

7 ‘‘(ii) such providers serve minimum

8 geographic areas and populations which

9 shall be specified in regulations prescribed

10 under this section, and

11 ‘‘(iii) such providers are required to

12 meet, and maintain compliance with, both

13 general selection criteria (such as profes14 sional and governmental certification and

15 educational credentials) and specific selec16 tion criteria (such as the extent of work

17 experience by the provider with specific

18 populations), which shall be set forth in

19 regulations prescribed under this section.

20 ‘‘(F) REFERRAL LISTS AND QUALITY

21 MEASURES.—Each network coordinator shall

22 maintain procedures for establishing lists of

23 network providers eligible for referrals under

24 the Program and reimbursement for time peri25 ods specified under the Program, subject to an-
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1 nual performance reviews measured against es2 tablished quality measures applied to recipients

3 of rehabilitation services. Such measures shall

4 include return-to-work rates, job retention,

5 timeliness, cost, and other factors which shall

6 be specified in regulations prescribed under this

7 section.

8 ‘‘(G) PROVISION OF SERVICES UNDER IN9 DIVIDUAL EMPLOYMENT PLANS ENSURED.—

10 Each network coordinator shall take such meas11 ures as are necessary to ensure that vocational

12 rehabilitation services provided under the Pro13 gram by, or under agreements entered into

14 with, the network coordinator are provided

15 under appropriate individual employment plans

16 meeting the requirements of paragraph (4).

17 ‘‘(H) ADMINISTRATION OF MILESTONE

18 PAYMENT SYSTEM.—Each regional adminis19 trator for a service region shall take such meas20 ures as are necessary, in accordance with regu21 lations prescribed under this section, to ensure

22 that any compensation received, by network co23 ordinators or by other providers under agree24 ments entered into with network coordinators,

25 for vocational rehabilitation services provided
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1 under the Program in the service region com2 plies with the requirements of the milestone

3 payment system prescribed pursuant to para4 graph (6). Each network coordinator shall ad5 minister the milestone payment system with re6 spect to vocational rehabilitation services pro7 vided by, or under agreements with, such net8 work coordinator, including the authorization

9 and verification of payments to providers and

10 securing restitution of overpayments.

11 ‘‘(I) ANNUAL FINANCIAL REPORTING.—In

12 accordance with regulations which shall be pre13 scribed under this section, each network coordi14 nator for a service region shall engage a cer15 tified public accountant, who shall prepare such

16 annual financial reports to the regional admin17 istrator for such region as are necessary to pro18 vide for the quality assurance required under

19 paragraph (3)(F).

20 ‘‘(J) PERIODIC OUTCOMES REPORTING.—

21 Each network coordinator for a service region

22 shall prepare periodic reports, on at least an

23 annual basis, itemizing for the covered period

24 specific outcomes achieved with respect to spe25 cific services provided by the network coordina-
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1 tor. Such report shall conform to a national

2 model which shall be prescribed in regulations

3 under this section. In such report, outcomes

4 shall be measured at least in part on uniform

5 customer satisfaction surveys. Each network co6 ordinator shall provide a copy of the latest re7 port issued by the network coordinator pursu8 ant to this subparagraph to each beneficiary or

9 applicant upon enrollment under the Program

10 for services to be received through such network

11 coordinator. Upon issuance of such report to

12 each beneficiary or applicant, a copy of such re13 port shall be maintained in the files of the net14 work coordinator pertaining to such beneficiary

15 or applicant. The regional administrator for

16 each service region shall ensure that copies of

17 all such reports issued under this subparagraph

18 are made available to the public under reason19 able terms.

20 ‘‘(5) INDIVIDUAL EMPLOYMENT PLANS.—

21 ‘‘(A) IN GENERAL.—In accordance with

22 regulations which shall be prescribed under this

23 section, each provider of vocational rehabilita24 tion services under the Program shall develop,

25 jointly with each recipient of such services, an
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1 employment plan meeting the requirements of

2 this paragraph.

3 ‘‘(B) EMPLOYMENT EVALUATION.—In de4 vising the employment plan, the provider shall

5 undertake an employment evaluation with re6 spect to the recipient. Each employment evalua7 tion shall set forth in writing with respect to

8 the recipient at least the following:

9 ‘‘(i) A review and assessment of—

10 ‘‘(I) the recipient’s prior work

11 history,

12 ‘‘(II) the recipient’s educational

13 background,

14 ‘‘(III) the recipient’s mobility,

15 cognitive, sensory, and mental abilities

16 and limitations, and

17 ‘‘(IV) the recipient’s interests

18 and aptitudes.

19 ‘‘(ii) An inventory of the services de20 termined by the network coordinator as

21 most efficacious in obtaining employment

22 for the recipient or facilitating training for

23 employment for the recipient, identifying—

24 ‘‘(I) those services which are to

25 be provided by providers who are gen-
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1 eralists with respect to all populations,

2 and

3 ‘‘(II) those services which are to

4 be provided by providers in areas of

5 specialty, which may include special6 ties in mobility, cognitive, sensory,

7 and mental impairment and other

8 areas specified in regulations pre9 scribed under this section.

10 ‘‘(C) REQUIREMENTS FOR INDIVIDUAL EM11 PLOYMENT PLANS.—Each individual employ12 ment plan shall—

13 ‘‘(i) take into account results obtained

14 from the employment evaluation under15 taken pursuant to subparagraph (B), iden16 tifying any particular strengths and abili17 ties of the recipient,

18 ‘‘(ii) set forth specific employment

19 goals that relate to the availability of gain20 ful activity within the economy of the serv21 ice region or the economy of any alter22 native service region within which the re23 cipient chooses to relocate,

24 ‘‘(iii) outline specific steps and activi25 ties necessary to prepare for employment,
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1 obtain employment, retain employment,

2 and pursue advancement after initial em3 ployment,

4 ‘‘(iv) identify and promote career

5 paths that will allow the recipient to main6 tain a level of compensation upon obtain7 ing employment which equals or exceeds

8 the greater of—

9 ‘‘(I) the minimum level of earn10 ings which, under regulations of the

11 Commissioner of Social Security, dem12 onstrates an ability to engage in sub13 stantial gainful activity, or

14 ‘‘(II) the level of benefits received

15 by the recipient while disabled as cash

16 benefits under this title and title XVI

17 and the cash value of items and serv18 ices received under title XVIII or

19 under State plans under title XIX,

20 ‘‘(v) incorporate to the extent prac21 ticable existing resources and programs,

22 including (but not limited to):

23 ‘‘(I) co-enrollment in vocational

24 rehabilitation programs provided

25 under State plans approved under
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1 title I of the Rehabilitation Act of

2 1973,

3 ‘‘(II) any unexhausted training

4 resources available from the carrier

5 through which the recipient’s worker’s

6 compensation benefits are provided,

7 ‘‘(III) personal resources of the

8 recipient,

9 ‘‘(IV) stipends, grants, and loans

10 available from other Federal, State, or

11 local governmental programs,

12 ‘‘(V) stipends, grants, or loans

13 from, or partnership agreements with,

14 organizations of network coordinators,

15 and

16 ‘‘(VI) cooperative agreements

17 with prospective employers providing

18 for assistance with training and relat19 ed costs, and

20 ‘‘(vi) take effect upon approval by the

21 recipient.

22 ‘‘(6) MILESTONE PAYMENT SYSTEM.—

23 ‘‘(A) IN GENERAL.—Under regulations

24 prescribed under this section, the Program shall

25 provide for a milestone payment system, which
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1 shall consist of an incremental fee structure

2 governing providers of vocational rehabilitation

3 services under the Program which meets the re4 quirements of this paragraph. The milestone

5 payment system shall provide for capitation of

6 costs and fees in the case of each recipient of

7 such services under managed competition

8 (thereby precluding the use of any cost-reim9 bursement, cost-plus, or other cost-based pay10 ment methodology).

11 ‘‘(B) MILESTONES.—The milestone pay12 ment system shall provide for milestones, with

13 respect to all recipients of vocational rehabilita14 tion services from a provider under the Pro15 gram, which are directed toward the goal of

16 permanent employment and which shall serve as

17 the basis for graduated fee levels applicable

18 with respect to providers. Such milestones may

19 include:

20 ‘‘(i) completion of the employment

21 plan developed with the recipient under

22 paragraph (5);

23 ‘‘(ii) initial employment of the recipi24 ent secured after enrollment under the

25 Program; and
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1 ‘‘(iii) retention by the recipient of em2 ployment secured after enrollment under

3 the Program for specified periods of time.

4 ‘‘(C) INITIAL FIXED FEES AND SUBSE5 QUENT DEFERRED RETENTION FEES.—The

6 milestone payment system shall provide for—

7 ‘‘(i) payment of a fixed fee to the net8 work coordinator upon the attainment of

9 each milestone by the recipient of voca10 tional rehabilitation services, as consider11 ation for the attainment by the recipient of

12 such milestone, and

13 ‘‘(ii) subsequent payment of deferred

14 retention fees to the network coordinator

15 for a recipient who ceases to be entitled to

16 benefits under this title or ceases to be eli17 gible for benefits under title XVI by reason

18 of retention by the recipient of employment

19 after enrollment under the Program.

20 ‘‘(D) BACKLOADED PAYMENT STRUC21 TURE.—Under regulations prescribed under

22 this section, the milestone payment system shall

23 provide for a schedule of fee payments in con24 nection with milestones attained by a recipient

25 prior to termination of entitlement to benefits
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1 under this title or eligibility for benefits under

2 title XVI. The fee schedule shall be designed

3 so that the total amount of such fee payments

4 do not exceed 33 percent of all fees payable

5 under the Program with respect to such a recip6 ient if the recipient were to attain all milestones

7 and retain employment upon termination of

8 such entitlement or eligibility for a substantially

9 continuous period of not less than 5 years.

10 Such fees shall be scheduled so as to ensure

11 that profits attained by providers for providing

12 vocational rehabilitation services under the Pro13 gram are deferred generally until after reten14 tion by the recipient of employment for a sig15 nificant period of time. At least 67 percent of

16 all fees payable under the Program shall consist

17 of deferred retention fees described in subpara18 graph (C)(ii).

19 ‘‘(E) PERIODIC REVISIONS.—Under regula20 tions prescribed under this section, any fee

21 schedule established under the milestone pay22 ment system shall be revised on a periodic

23 basis, based on information provided to the

24 Commissioner of Social Security by the regional

25 administrators under the Program and on com-
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1 parisons made by the Commissioner of the Pro2 gram with other similar programs established

3 by the Federal Government.’’.

4 (b) CONFORMING AMENDMENTS.—

5 (1) AMENDMENTS TO TITLE II.—

6 (A) Section 222 of such Act (42 U.S.C.

7 422) is further amended—

8 (i) in subsection (a), by striking ‘‘shall

9 be promptly referred’’ and all that follows

10 through ‘‘services,’’ and inserting the fol11 lowing: ‘‘shall be promptly referred to

12 qualified providers of vocational rehabilita13 tion services,’’;

14 (ii) in subsection (b)(1)—

15 (I) by striking ‘‘for any month in

16 which such individual, if’’ and insert17 ing ‘‘for any month, if (A) such indi18 vidual is’’;

19 (II) by striking ‘‘refuses’’ and in20 serting ‘‘(B) participation by the indi21 vidual in the Rehabilitation and Re22 turn-to-Work Program or a State plan

23 approved under title I of the Rehabili24 tation Act of 1973 is mandatory

25 under subsection (e)(2), and (C) the
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1 individual refuses in such month’’;

2 and

3 (III) by striking ‘‘a State plan

4 approved under title I of the Rehabili5 tation Act of 1973’’ each place it ap6 pears and inserting ‘‘the Program or

7 such a State plan’’;

8 (iii) in subsection (d)(1)—

9 (I) by inserting ‘‘to operate, ad10 minister, and provide for payments

11 under the Rehabilitation and Return12 to-Work Program and’’ before ‘‘to re13 imburse’’; and

14 (II) by inserting ‘‘under such a

15 State plan’’ after ‘‘under this para16 graph’’ in clause (ii);

17 (iv) by striking paragraph (2) of sub18 section (d) and redesignating paragraphs

19 (3), (4), and (5) of subsection (d) as para20 graph (2), (3), and (4), respectively;

21 (v) in paragraph (2) (as redesignated)

22 of subsection (d), by inserting ‘‘to States’’

23 after ‘‘Payments’’;

24 (vi) in paragraph (3) (as redesig25 nated) of subsection (d), by striking ‘‘for
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1 the reimbursement of the costs of provid2 ing services to’’ and inserting ‘‘for the op3 eration and administration of the Rehabili4 tation and Return-to-Work Program with

5 respect to services provided to’’, and by in6 serting ‘‘and otherwise for the reimburse7 ment of the costs of providing services to

8 such individuals,’’ after ‘‘such individ9 uals,’’, and by striking ‘‘to be reimbursed’’

10 in subparagraph (A) and inserting ‘‘to be

11 paid for the operation and administration

12 of the Rehabilitation and Return-to-Work

13 Program and otherwise for reimburse14 ment’’; and

15 (vii) in paragraph (4) (as redesig16 nated) of subsection (d), by striking ‘‘sub17 section’’ each place it appears and insert18 ing ‘‘section’’.

19 (B) Section 225(b)(1) of such Act (42

20 U.S.C. 425(b)(1)) is amended by striking ‘‘a

21 program’’ and inserting ‘‘a program consisting

22 of the Rehabilitation and Return-to-Work Pro23 gram or another program’’.

24 (2) AMENDMENTS TO TITLE XVI.—Section

25 1615 of such Act (42 U.S.C. 1382d) is amended—
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1 (A) in subsection (a), by inserting after

2 ‘‘referral of such individual’’ the following: ‘‘(A)

3 to the Rehabilitation and Return-to-Work Pro4 gram established under section 222(e) or (B)’’;

5 and

6 (B) in subsection (b), by inserting ‘‘under

7 the Rehabilitation and Return-to-Work Pro8 gram or’’ after ‘‘available to him’’.

9 (c) EFFECTIVE DATE.—Subject to subsection

10 (d)(2)(C), the amendments made by subsections (a) and

11 (b) shall apply with respect to applications filed, and re12 views of continuing disability commenced, after 6 months

13 after the date of the enactment of this Act.

14 (d) THE REHABILITATION AND RETURN-TO-WORK

15 COMMISSION.—

16 (1) ESTABLISHMENT.—There is established in

17 the Social Security Administration a commission to

18 be known as the ‘‘Rehabilitation and Return-to19 Work Commission’’ (in this subsection referred to as

20 the ‘‘Commission’’).

21 (2) DUTIES OF COMMISSION.—

22 (A) IN GENERAL.—The Commission shall,

23 jointly with the Commissioner of Social Secu24 rity, take such actions, including issuance of

25 appropriate regulations under the amendments
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1 made by this section, as are necessary for the

2 full implementation of such amendments as

3 soon as practicable after the date of the enact4 ment of this Act but not later than 3 years

5 after such date of enactment.

6 (B) SPECIFIC PROGRAM DEVELOPMENT

7 RESPONSIBILITIES.—As soon as practicable

8 after the date of the enactment of this Act, the

9 Commission shall, in direct consultation with

10 Commissioner of Social Security—

11 (i) formulate and develop for purposes

12 of subparagraph (A) the procedures for as13 sessing the capability of beneficiaries and

14 applicants for vocational rehabilitation,

15 (ii) formulate and develop for pur16 poses of subparagraph (A) the milestone

17 payment system described in section

18 222(e)(5) of the Social Security Act (as

19 amended by subsection (a)) and establish

20 annual oversight procedures for such sys21 tem,

22 (iii) formulate and develop for pur23 poses of subparagraph (A) the referral

24 services, quality assurance measures, and

25 dispute resolution procedures referred to in
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1 subparagraphs (E), (F), and (G) (respec2 tively) of section 222(e)(3) of such Act (as

3 so amended),

4 (iv) establish, for the Rehabilitation

5 and Return-to-Work Program upon its es6 tablishment and for programs undertaken

7 in preparation for the establishment of the

8 Program, procedures for effective oversight

9 by the Commission and by the Commis10 sioner of Social Security, including periodic

11 reviews and reporting requirements, and

12 (v) establish the initial service regions

13 for the Rehabilitation and Return-to-Work

14 Program and carry out the provisions of

15 subparagraph (C) in each such region.

16 (C) GRADUATED IMPLEMENTATION OF

17 PROGRAM.—

18 (i) IN GENERAL.—Not later than 6

19 months after the date of the enactment of

20 this Act, the Commission, in consultation

21 with the Commissioner of Social Security,

22 shall commence implementation of the

23 amendments made by this Act in grad24 uated phases at pilot sites selected by the

25 Commission. Such pilot sites shall be se-
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1 lected so as to ensure, prior to full imple2 mentation of the Program, the develop3 ment and refinement of referral processes,

4 payment systems, computer linkages, man5 agement information systems, and admin6 istrative processes necessary to provide for

7 full implementation of such amendments.

8 (ii) REQUIREMENTS.—Implementation

9 of the Program at each pilot site shall be

10 carried out on a wide enough scale to per11 mit a thorough evaluation of the alter12 native methods under consideration, so as

13 to ensure that the most efficacious meth14 ods are determined and in place for full

15 implementation of the Rehabilitation and

16 Return-to-Work Program on a timely

17 basis. In selecting pilot sites under this

18 subparagraph, the Commission shall take

19 full advantage of the results of experiments

20 and demonstration projects conducted pur21 suant to section 505 of the Social Security

22 Disability Amendments of 1980 selecting

23 pilot sites which have participated in such

24 demonstration projects (including ‘‘Project

25 Network’’). The Commission shall also se-
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1 lect sites which have participated in the

2 ‘‘Project with Industries’’ programs estab3 lished under title VI of the Rehabilitation

4 Act of 1973.

5 (iii) FULL IMPLEMENTATION.—The

6 Commission, in consultation with the Com7 missioner of Social Security, shall ensure

8 that the Rehabilitation and Return-to9 Work Program is fully implemented as

10 soon as practicable after the date of the

11 enactment of this Act but not later than 3

12 years after such date of enactment.

13 (D) OVERSIGHT DUTIES.—After full imple14 mentation of the Rehabilitation and Return-to15 Work Program pursuant to subparagraph

16 (C)(iii), until termination of the Commission,

17 the Commission shall oversee the operation of

18 the Rehabilitation and Return-to-Work Pro19 gram and include the results of its oversight of

20 the Program in its reports to the President and

21 the Congress pursuant to paragraph (6). The

22 Commissioner of Social Security shall cooperate

23 with the Commission in carrying out its duties

24 under this subparagraph and, to the extent per25 mitted by law, provide to the Commission such
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1 information and facilities as the Commission

2 may request in the performance of its duties

3 under this subparagraph.

4 (3) MEMBERSHIP.—

5 (A) NUMBER AND APPOINTMENT.—The

6 Commission shall be composed of 9 members

7 appointed by the President as follows:

8 (i) 3 members selected for appoint9 ment from among individuals rec10 ommended by the Speaker of the House of

11 Representatives.

12 (ii) 3 members selected for appoint13 ment from among individuals rec14 ommended by the Majority Leader of the

15 Senate.

16 (iii) 3 members selected for appoint17 ment from among such other individuals as

18 the President may consider appropriate.

19 (B) POLITICAL AFFILIATION.—Not more

20 than 2 members appointed under each of

21 clauses (i), (ii), and (iii) of subparagraph (A)

22 may be of the same political party.

23 (C) REPRESENTATION.—Of the members

24 appointed under each of clauses (i), (ii), and

25 (iii) of subparagraph (A)—
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1 (i) one shall represent the interests of

2 recipients of vocational rehabilitation serv3 ices,

4 (ii) one shall represent the interests of

5 providers of vocational rehabilitation serv6 ices, and

7 (iii) one shall represent the interests

8 of private employers.

9 (D) TERMS.—

10 (i) IN GENERAL.—Each member shall

11 be appointed for a term of 4 years (or, if

12 less, for the remaining life of the Commis13 sion), except as provided in clauses (ii) and

14 (iii).

15 (ii) TERMS OF INITIAL AP16 POINTEES.—As designated by the Presi17 dent at the time of appointment, of the

18 members first appointed—

19 (I) 4 shall be appointed for a

20 term of 2 years, and

21 (II) 5 shall be appointed for a

22 term of 4 years.

23 (iii) VACANCIES.—Any member ap24 pointed to fill a vacancy occurring before

25 the expiration of the term for which the
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1 member’s predecessor was appointed shall

2 be appointed only for the remainder of that

3 term. A member may serve after the expi4 ration of that member’s term until a suc5 cessor has taken office. A vacancy in the

6 Commission shall be filled in the manner

7 in which the original appointment was

8 made.

9 (E) BASIC PAY.—Members shall each be

10 paid at a rate equal to the daily equivalent of

11 the rate of basic pay for level 4 of the Senior

12 Executive Service, as in effect from time to

13 time under section 5382 of title 5, United

14 States Code, for each day (including travel

15 time) during which they are engaged in the ac16 tual performance of duties vested in the Com17 mission.

18 (F) TRAVEL EXPENSES.—Each member

19 shall receive travel expenses, including per diem

20 in lieu of subsistence, in accordance with sec21 tions 5702 and 5703 of title 5, United States

22 Code.

23 (G) QUORUM.—5 members of the Commis24 sion shall constitute a quorum but a lesser

25 number may hold hearings.
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1 (H) CHAIRPERSON.—The Chairperson of

2 the Commission shall be designated by the

3 President. The term of office of the Chair4 person shall be 4 years.

5 (I) MEETINGS.—The Commission shall

6 meet at least quarterly and at other times at

7 the call of the Chairperson or a majority of its

8 members.

9 (4) DIRECTOR AND STAFF OF COMMISSION; EX10 PERTS AND CONSULTANTS.—

11 (A) DIRECTOR.—The Commission shall

12 have a Director who shall be appointed by the

13 Commission. The Director shall be paid at a

14 rate not to exceed the maximum rate of pay

15 payable for GS-15 of the General Schedule.

16 (B) STAFF.—Subject to rules prescribed

17 by the Commission, the Director may appoint

18 and fix the pay of additional personnel as the

19 Director considers appropriate.

20 (C) EXPERTS AND CONSULTANTS.—Sub21 ject to rules prescribed by the Commission, the

22 Director may procure temporary and intermit23 tent services under section 3109(b) of title 5,

24 United States Code.
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1 (D) STAFF OF FEDERAL AGENCIES.—

2 Upon request of the Commission, the head of

3 any Federal department or agency may detail,

4 on a reimbursable basis, any of the personnel of

5 that department or agency to the Commission

6 to assist it in carrying out its duties under this

7 Act.

8 (5) POWERS OF COMMISSION.—

9 (A) HEARINGS AND SESSIONS.—The Com10 mission may, for the purpose of carrying out

11 this its duties under this subsection, hold such

12 hearings, sit and act at such times and places,

13 and take such testimony and evidence as the

14 Commission considers appropriate.

15 (B) POWERS OF MEMBERS AND AGENTS.—

16 Any member or agent of the Commission may,

17 if authorized by the Commission, take any ac18 tion which the Commission is authorized to take

19 by this section.

20 (C) MAILS.—The Commission may use the

21 United States mails in the same manner and

22 under the same conditions as other departments

23 and agencies of the United States.

24 (D) ADMINISTRATIVE SUPPORT SERV25 ICES.—Upon the request of the Commission,
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1 the Administrator of General Services shall pro2 vide to the Commission, on a reimbursable

3 basis, the administrative support services nec4 essary for the Commission to carry out its du5 ties under this subsection.

6 (6) REPORTS.—

7 (A) INTERIM REPORTS.—The Commission

8 shall submit to the President and the Congress

9 interim reports at least annually.

10 (B) FINAL REPORT.—The Commission

11 shall transmit a final report to the President

12 and the Congress not later than 5 years after

13 the date of the enactment of this Act. The final

14 report shall contain a detailed statement of the

15 findings and conclusions of the Commission, to16 gether with its recommendations for legislation

17 and administrative actions which the Commis18 sion considers appropriate.

19 (7) TERMINATION.—The Commission shall ter20 minate immediately upon submission of its final re21 port under paragraph (6)(B).

22 (8) AUTHORIZATION OF APPROPRIATIONS.—

23 There are authorized to be appropriated from the

24 Federal Old-Age and Survivors Insurance Trust

25 Fund and the Federal Disability Insurance Trust
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1 Fund, as appropriate, such sums as are necessary to

2 carry out this subsection.

3 SEC. 3. MEDICARE COVERAGE FOR OASDI DISABILITY BEN4 EFIT RECIPIENTS WHO RETURN TO WORK.

5 (a) PROVIDING FOR 5-YEAR PERIOD OF CONTINU6 ATION COVERAGE FOR THOSE RETURNING TO WORK.—

7 Section 226 of the Social Security Act (42 U.S.C. 426)

8 is amended—

9 (1) in the first sentence of subsection (b), by in10 serting ‘‘(subject to subsection (h))’’ after ‘‘and end11 ing’’;

12 (2) by redesignating subsection (h) as sub13 section (i); and

14 (3) by inserting after subsection (g) the follow15 ing new subsection:

16 ‘‘(h)(1) If an individual, in each month during a 3-

17 consecutive-month period (covered under paragraph

18 (2))—

19 ‘‘(A)(i) is entitled to benefits described in sub20 section (b)(2)(A), (ii) is a disabled qualified railroad

21 retirement beneficiary (within the meaning of section

22 7(d) of the Railroad Retirement Act of 1974), or

23 (iii) is described in subsection (b)(2)(C)(i) and would

24 be entitled to benefits described in subsection
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1 (b)(2)(A) if subclauses (I) and (II) of subsection

2 (b)(2)(C)(ii)(II) were applicable, and

3 ‘‘(B) has earnings from employment of at least

4 160 times the minimum hourly wage rate in effect

5 under section 6(a)(1) of the Fair Labor Standards

6 Act of 1938 (29 U.S.C. 206(a)(1)) for the month,

7 then the entitlement to benefits pursuant to subsection (b)

8 shall not end before the earlier of (i) the end of the 5-

9 year period beginning with the month immediately follow10 ing such 3-consecutive-month period, or (ii) the month be11 fore the month in which the individual attains age 65.

12 ‘‘(2) Paragraph (1) shall apply only to a 3-consecu13 tive-month period that—

14 ‘‘(A) begins on or after the 4th month that be15 gins after the date of the enactment of the Disability

16 Benefits Reform Act of 1996, and

17 ‘‘(B) does not begin (with respect to an individ18 ual) during a 5-year coverage period previously pro19 vided under such paragraph with respect to the indi20 vidual.

21 ‘‘(3) Nothing in this subsection shall be construed as

22 affecting the month in which an entitlement under sub23 section (b) begins with respect to an individual.’’.

24 (b) MAKING PERMANENT MEDICARE SECONDARY

25 PAYER RULES RELATING TO DISABILITY.—Section
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1 1862(b)(1)(A) of such Act (42 U.S.C. 1395y(b)(1)(A)) is

2 amended by striking clause (iii).

3 (c) ELIMINATION OF CURRENT CONTINUATION COV4 ERAGE RULES.—

5 (1) IN GENERAL.—Section 226(b) of such Act

6 (42 U.S.C. 426(b)) is amended—

7 (A) by striking ‘‘(subject to the next to last

8 sentence of this subsection)’’ in the first sen9 tence, and

10 (B) by striking the third and fourth sen11 tences.

12 (2) EFFECTIVE DATE.—The amendments made

13 by paragraph (1) shall apply beginning with the 8th

14 month that begins after the date of the enactment

15 of this Act, except that such amendments shall not

16 apply to individuals who are entitled to benefits

17 under section 226(b) of the Social Security Act pur18 suant to the third sentence of such section for the

19 7th month that begins after such date of enactment.

20 SEC. 4. TAX CREDIT FOR EMPLOYERS WHO HIRE CERTAIN

21 DISABLED INDIVIDUALS.

22 (a) IN GENERAL.—Subpart D of part IV of sub23 chapter A of chapter 1 of the Internal Revenue Code of

24 1986 (relating to business-related credits) is amended by

25 adding at the end the following new section:
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1 ‘‘SEC. 45D. CREDIT FOR EMPLOYERS WHO HIRE CERTAIN

2 DISABLED INDIVIDUALS.

3 ‘‘(a) IN GENERAL.—For purposes of section 38, the

4 disabled employee hiring credit determined under this sec5 tion for the taxable year is an amount equal to the tax

6 paid or incurred by the taxpayer under section 3111 dur7 ing such taxable year with respect to wages paid for serv8 ices performed by a qualified disabled individual during

9 an eligible month of employment.

10 ‘‘(b) QUALIFIED DISABLED INDIVIDUAL.—For pur11 poses of this section, the term ‘qualified disabled individ12 ual’ means any individual who is disabled within the mean13 ing of section 223 of the Social Security Act or blind or

14 disabled within the meaning of paragraph (2) or (3), re15 spectively, of section 1614(a) of such Act.

16 ‘‘(c) ELIGIBLE MONTH OF EMPLOYMENT.—For pur17 poses of this section:

18 ‘‘(1) IN GENERAL.—The term ‘eligible month of

19 employment’ means—

20 ‘‘(A) the first month in which the individ21 ual is employed on a substantially full-time

22 basis by the employer at a monthly rate of pay

23 equal to at least 160 times the minimum hourly

24 wage rate in effect under section 6(a)(1) of the

25 Fair Labor Standards Act of 1938 (29 U.S.C.

26 206(a)(1)) for the month, and
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1 ‘‘(B) subject to paragraph (2), each suc2 ceeding month in which the individual is so em3 ployed.

4 ‘‘(2) LIMITATION ON NUMBER OF ELIGIBLE

5 MONTHS.—

6 ‘‘(A) IN GENERAL.—The number of eligi7 ble months which are taken into account under

8 this section with respect to the employment of

9 an individual (whether or not with the same

10 employer) during any period of disability shall

11 not exceed 12.

12 ‘‘(B) MONTHS OF ELIGIBILITY TO BE CER13 TIFIED.—An employer may treat a month as

14 one of the 12 months referred to in subpara15 graph (A) only if the employer receives a certifi16 cate to that effect from—

17 ‘‘(i) a provider of rehabilitation serv18 ices providing such services to the em19 ployed individual under section 222 or

20 1615 of the Social Security Act, or

21 ‘‘(ii) in the case of an individual who

22 does not receive services from a provider of

23 rehabilitation services under section 222 or

24 1615, the Commissioner.
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1 ‘‘(C) PERIOD OF DISABILITY.—For pur2 poses of subparagraph (A), the term ‘period of

3 disability’ means the period of eligibility speci4 fied in the disability determination under sec5 tion 221(i) of the Social Security Act.

6 ‘‘(d) DENIAL OF CREDIT FOR EMPLOYMENT OF REL7 ATIVES.—No credit shall be determined under this section

8 with respect to the employment of any individual described

9 in a subparagraph of section 51(i)(1).

10 ‘‘(e) DENIAL OF DOUBLE BENEFIT.—No deduction

11 shall be allowed under this chapter for any amount taken

12 into account in determining the credit under this section.

13 ‘‘(f) ELECTION NOT TO CLAIM CREDIT.—This sec14 tion shall not apply to a taxpayer for any taxable year

15 if such taxpayer elects to have this section not apply for

16 such taxable year.’’

17 (b) CREDIT TO BE PART OF GENERAL BUSINESS

18 CREDIT.—

19 (1) Subsection (b) of section 38 of such Code

20 (relating to general business credits) is amended by

21 striking ‘‘plus’’ at the end of paragraph (11), by

22 striking the period at the end of paragraph (12) and

23 inserting ‘‘, plus’’, and by adding after paragraph

24 (12) the following new paragraph:
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1 ‘‘(13) the disabled employee hiring credit deter2 mined under section 45D(a).’’

3 (2) Subsection (d) of section 39 of such Code

4 is amended by adding at the end thereof the follow5 ing new paragraph:

6 ‘‘(8) NO CARRYBACK OF SECTION 45D CREDIT

7 BEFORE ENACTMENT.—No portion of the unused

8 business credit for any taxable year which is attrib9 utable to the disabled employee hiring credit deter10 mined under section 45D may be carried to a tax11 able year ending before the date of the enactment of

12 the Rehabilitation and Return to Work Opportunity

13 Act of 1996.’’

14 (c) CONFORMING AMENDMENTS.—

15 (1) Subsection (c) of section 196 of such Code

16 (relating to deduction for certain unused business

17 credits) is amended by striking ‘‘and’’ at the end of

18 paragraph (6), by striking the period at the end of

19 paragraph (7) and inserting ‘‘, and’’, and by adding

20 at the end the following new paragraph:

21 ‘‘(8) the disabled employee hiring credit deter22 mined under section 45D(a).’’

23 (2) The table of sections for subpart D of part

24 IV of subchapter A of chapter 1 of such Code is
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1 amended by adding at the end the following new

2 item:

‘‘Sec. 45D. Credit for employers who hire certain disabled individuals.’’

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

4 this section shall apply to months beginning after the date

5 of the enactment of this Act in taxable years ending after

6 such date.

Æ