II 

110TH CONGRESS 

1ST SESSION S. 130 

To amend title XVIII of the Social Security Act to extend reasonable cost 

contracts under Medicare. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 4, 2007 

Mr. ALLARD (for himself and Mr. SALAZAR) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To amend title XVIII of the Social Security Act to extend 

reasonable cost contracts under Medicare. 

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 ‘‘Medicare Cost Con5 tract Extension and Refinement Act of 2007’’. 

6 SEC. 2. EXTENSION OF REASONABLE COST CONTRACTS. 

7 (a) EXTENSION OF PERIOD REASONABLE COST

8 PLANS CAN REMAIN IN THE MARKET.—Section 

9 1876(h)(5)(C)(ii) of the Social Security Act (42 U.S.C. 

10 1395mm(h)(5)(C)(ii) is amended— 


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1 (1) in the matter preceding subclause (I)— 

2 (A) by striking ‘‘January 1, 2008’’ and in3 serting ‘‘January 1, 2013’’; 

4 (B) by striking ‘‘year’’ and inserting ‘‘two 

5 years’’; and 

6 (C) by inserting ‘‘entirely’’ after ‘‘was’’; 

7 (2) in subclause (I), by inserting ‘‘, provided 

8 that all such plans are not offered by the same 

9 Medicare Advantage organization’’ before the semi10 colon at the end; and 

11 (3) in subclause (II), by inserting ‘‘, provided 

12 that all such plans are not offered by the same 

13 Medicare Advantage organization’’ before the semi14 colon at the end. 

15 (b) EXTENSION OF PERIOD REASONABLE COST

16 PLANS CAN EXPAND THEIR SERVICE AREA.—Section 

17 1876(h)(5)(B)(i) of the Social Security Act (42 U.S.C. 

18 1395mm(h)(5)(B)(i)) is amended to read as follows: 

19 ‘‘(i) the conditions for prohibiting an extension 

20 or renewal of a contract under subparagraph (C)(ii) 

21 are not applicable to such service area at the time 

22 of the application.’’. 


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1 SEC. 3. APPLICATION OF CERTAIN MEDICARE ADVANTAGE 

2 REQUIREMENTS TO COST CONTRACTS EX3 TENDED OR RENEWED AFTER 2003. 

4 Section 1876(h) of the Social Security Act (42 U.S.C. 

5 1395mm(h)), as amended by section (2), is amended— 

6 (1) by redesignating paragraph (5) as para7 graph (6); and 

8 (2) by inserting after paragraph (4) the fol9 lowing new paragraph: 

10 ‘‘(5)(A) Any reasonable cost reimbursement contract 

11 with an eligible organization under this subsection that is 

12 extended or renewed on or after the date of enactment 

13 of the Medicare Cost Contract Extension and Refinement 

14 Act of 2005 shall provide that the provisions of the Medi15 care Advantage program under part C described in sub16 paragraph (B) shall apply to such organization and such 

17 contract in a substantially similar manner as such provi18 sions apply to Medicare Advantage organizations and 

19 Medicare Advantage plans under such part. 

20 ‘‘(B) The provisions described in this subparagraph 

21 are as follows: 

22 ‘‘(i) Section 1851(d) (relating to the provision 

23 of information to promote informed choice). 

24 ‘‘(ii) Section 1851(h) (relating to the approval 

25 of marketing material and application forms). 


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1 ‘‘(iii) Section 1852(a)(3)(A) (regarding the au2 thority of organizations to include mandatory sup3 plemental health care benefits under the plan subject 

4 to the approval of the Secretary). 

5 ‘‘(iv) Section 1852(e) (relating to the require6 ment of having an ongoing quality improvement pro7 gram and treatment of accreditation in the same 

8 manner as such provisions apply to Medicare Advan9 tage local plans that are preferred provider organiza10 tion plans). 

11 ‘‘(v) Section 1852(j)(4) (relating to limitations 

12 on physician incentive plans). 

13 ‘‘(vi) Section 1854(c) (relating to the require14 ment of uniform premiums among individuals en15 rolled in the plan). 

16 ‘‘(vii) Section 1854(g) (relating to restrictions 

17 on imposition of premium taxes with respect to pay18 ments to organizations). 

19 ‘‘(viii) Section 1856(b)(3) (relating to relation 

20 to State laws). 

21 ‘‘(ix) Section 1857(i) (relating to Medicare Ad22 vantage program compatibility with employer or 

23 union group health plans). 


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1 ‘‘(x) The provisions of part C relating to 

2 timelines for contract renewal and beneficiary notifi3 cation.’’. 

Æ 


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