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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2610 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 2610

To amend the Social Security Act and the Internal Revenue Code of 1986 
    to provide for a Mediplan that assures the provision of health 
      insurance coverage to all residents, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                              July 1, 1993

Mr. Stark introduced the following bill; which was referred jointly to 
        the Committees on Ways and Means and Energy and Commerce

                           September 29, 1993

        Additional sponsors: Mr. Coyne, Mr. Sabo, and Mr. Yates

_______________________________________________________________________

                                 A BILL

 
To amend the Social Security Act and the Internal Revenue Code of 1986 
    to provide for a Mediplan that assures the provision of health 
      insurance coverage to all residents, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as ``Mediplan Health Care 
Act of 1993''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
             TITLE I--HEALTH CARE ELIGIBILITY AND BENEFITS

Sec. 101. Eligibility and benefits.
                 ``TITLE XXI--MEDIPLAN HEALTH BENEFITS

                         ``Part A--Eligibility

        ``Sec. 2101. Eligibility.
        ``Sec. 2102. Enrollment and Mediplan cards.
                           ``Part B--Benefits

        ``Sec. 2121. Scope of benefits.
        ``Sec. 2122. Exclusions.
              ``Part C--Payment for Benefits and Financing

        ``Sec. 2141. Payments for benefits.
        ``Sec. 2142. Mediplan Trust Fund.
                ``Part D--Administrative Simplification

        ``Sec. 2151. Requirement for entitlement verification system.
        ``Sec. 2152. Requirements for uniform claims and electronic 
                            claims data set.
        ``Sec. 2153. Electronic medical records and reporting.
        ``Sec. 2154. Uniform hospital cost reporting.
        ``Sec. 2155. Health service provider defined.
                      ``Part E--General Provisions

        ``Sec. 2161. Definitions relating to beneficiaries and income.
        ``Sec. 2162. Incorporation of certain medicare provisions and 
                            other provisions.
        ``Sec. 2163. State maintenance of effort payments.
        ``Sec. 2164. Modification of medicaid and other programs to 
                            avoid duplication of benefits.
        ``Sec. 2165. Maintenance of additional benefits for current 
                            beneficiaries under group health plans.
         ``Part F--Regulation of Mediplan Supplemental Policies

        ``Sec. 2171. Standards and requirements for Mediplan 
                            supplemental policies.
        ``Sec. 2172. Establishment of standards.
        ``Sec. 2173. Requirements applicable to all Mediplan 
                            supplemental policies.
        ``Sec. 2174. Standards applicable only to insured Mediplan 
                            supplemental policies.
        ``Sec. 2175. Prohibition of duplication.
        ``Sec. 2176. Additional prohibitions.
        ``Sec. 2177. Information disclosure.
        ``Sec. 2178. Limitations on sales commissions.
        ``Sec. 2179. Definitions.
                        ``Part G--State Opt Out

        ``Sec. 2181. Election.
        ``Sec. 2182. Requirements for State alternative health care 
                            programs.
        ``Sec. 2183. Control of aggregate expenditures.
        ``Sec. 2184. Termination of approval of State election.
        ``Sec. 2185. Payments to States.
        ``Sec. 2186. No impact on medicare benefits.
                       TITLE II--COST CONTAINMENT

Sec. 201. National Mediplan expenditure budget.
Sec. 202. Classes of health care services.
Sec. 203. Allocation of health budget by class of service.
Sec. 204. National health expenditures reporting system.
Sec. 205. Conforming medicare payment rates to Mediplan health 
                            expenditure allocations; transition.
Sec. 206. Adjustments to medicare payments for graduate medical 
                            education.
Sec. 207. Definitions.
                    TITLE III--FINANCING PROVISIONS

Sec. 301. Income taxes for Mediplan health care.

             TITLE I--HEALTH CARE ELIGIBILITY AND BENEFITS

SEC. 101. ELIGIBILITY AND BENEFITS.

    (a) In General.--The Social Security Act is amended by adding at 
the end the following new title:

                 ``TITLE XXI--MEDIPLAN HEALTH BENEFITS

                         ``Part A--Eligibility

``SEC. 2101. ELIGIBILITY.

    ``(a) Universal Eligibility for Residents.--Except as provided in 
section 2163(a), each individual who is a resident of the United States 
is entitled to health insurance benefits under this title.
    ``(b) Special Eligibility Groups.--For purposes of this title, an 
individual described in subsection (a) may obtain special benefits 
under this title on the basis of one or more of the following special 
eligibility groups:
            ``(1) Children (as defined in section 2161(a)(1)).
            ``(2) Low-income individuals (as defined in section 
        2161(a)(2)).
            ``(3) Pregnant women (as defined in section 2161(a)(3)).
    ``(c) Reciprocal Coverage of Nonresidents.--An individual who--
            ``(1) is not a resident of the United States,
            ``(2) is in the United States, and
            ``(3) is a national of a foreign state which provides 
        health benefits to nationals of the United States who are 
        nonresidents in that state,
is entitled to such health insurance benefits under this title, but 
only to the extent the Secretary determines that such benefits would be 
available to nationals of the United States similarly situated as a 
nonresident in the foreign state.

``SEC. 2102. ENROLLMENT AND MEDIPLAN CARDS.

    ``(a) Enrollment.--The Secretary shall provide a mechanism for the 
enrollment of individuals entitled to benefits under this title and, in 
conjunction with such enrollment, the issuance of a Mediplan card which 
may be used for purposes of identification and processing of claims for 
benefits under this title. Mediplan cards shall identify (as 
appropriate) if the individual is a child, a pregnant woman, or a low-
income individual.
    ``(b) Enrollment at Birth.--The mechanism under subsection (a) 
shall include a process for the automatic enrollment of individuals at 
the time of birth in the United States.

                           ``Part B--Benefits

``SEC. 2121. SCOPE OF BENEFITS.

    ``(a) In General.--Except as provided in the succeeding provisions 
of this part, the benefits provided to an individual described in 
section 2101(a) by the program established by this title shall consist 
of entitlement to the same benefits as are provided under title XVIII 
to individuals entitled to benefits under part A, and enrolled under 
part B, of title XVIII.
    ``(b) Change in the Deductible and Limit on Cost-Sharing.--
            ``(1) In general.--Except as provided in the succeeding 
        provisions of this part, the amount of expenses (other than 
        expenses for benefits described in subsection (c)) with respect 
        to which an individual is entitled to have payment made under 
        this title for any year shall first be reduced by a deductible 
        of $350, except that in no case shall the amount of the 
        deductible for all the members of a family exceed $500. Such 
        deductible shall be instead of the deductible for inpatient 
        hospital services under the first sentence of section 
        1813(a)(1) and the deductible under section 1833(b).
            ``(2) Limit on out-of-pocket expenses.--Whenever in a 
        calendar year an individual's expenses for deductibles, 
        coinsurance, and copayments with respect to services covered 
        under this title (including expenses for benefits described in 
        subsection (c)) and furnished during the year equals $2,500, or 
        $3,000 for all the members of a family, payment of benefits 
        under this title for the individual (or for the members of such 
        family, respectively) for services furnished during the 
        remainder of the year shall be paid without the application of 
        any coinsurance or copayments.
    ``(c) Prescription Drugs.--
            ``(1) In general.--Subject to paragraph (2), benefits shall 
        also be made available under this title for outpatient 
        prescription drugs and biologicals (based on a formulary 
        developed by the Secretary).
            ``(2) Separate deductible.--With respect to benefits under 
        this subsection, instead of applying the cost-sharing described 
        in subsection (b), except as provided in the succeeding 
        provisions of this section and subsection (b)(2), such benefits 
        shall be subject to an annual individual deductible of $800 and 
        coinsurance of 20 percent of the recognized payment amount 
        under section 2141(g).
    ``(d) Children.--
            ``(1) No deductibles or coinsurance.--In the case of 
        children (as defined in section 2161(a)(1)), there shall be no 
        coinsurance, deductibles, or copayments applicable to covered 
        benefits (including benefits described in paragraphs (2) and 
        (3)).
            ``(2) Additional preventive benefits.--
                    ``(A) In general.--Subject to the periodicity 
                schedule established with respect to the services under 
                subparagraph (B), for children benefits shall be 
                available under this title for the following items and 
                services:
                            ``(i) Newborn and well-baby care, including 
                        normal newborn care and pediatrician services 
                        for high-risk deliveries.
                            ``(ii) Well-child care, including routine 
                        office visits, routine immunizations (including 
                        the vaccine itself), routine laboratory tests, 
                        and preventive dental care.
                    ``(B) Periodicity schedule.--The Secretary, in 
                consultation with the American Academy of Pediatrics 
                and the American Dental Association, shall establish a 
                schedule of periodicity which reflects the general, 
                appropriate frequency with which services listed in 
                subparagraph (A) should be provided to healthy 
                children.
            ``(3) Other additional services for children.--For 
        children, benefits also shall be available under this title for 
        the following:
                    ``(A) Inpatient hospital services (without regard 
                to the restrictions described in subsections (a)(1) and 
                (b)(1) of section 1812 and the coinsurance described in 
                section 1813(a)(1)).
                    ``(B) Eyeglasses and hearing aids, and examinations 
                therefor.
    ``(e) Pregnancy-Related Services.--
            ``(1) In general.--In the case of a pregnant woman (as 
        defined in section 2161(a)(3)), benefits under this title shall 
        include entitlement to have payment made for the following, 
        without the application of deductibles, coinsurance, or 
        copayments, subject to the periodicity schedule established 
        with respect to the services under paragraph (2) and prior 
        authorization of certain services under paragraph (3):
                    ``(A) Prenatal care, including care for all 
                complications of pregnancy.
                    ``(B) Inpatient labor and delivery services.
                    ``(C) Postnatal care.
                    ``(D) Postnatal family planning services.
            ``(2) Periodicity schedule.--The Secretary, in consultation 
        with the American College of Obstetrics and Gynecology, shall 
        establish a schedule of periodicity which reflects the general, 
        appropriate frequency with which services listed in paragraph 
        (1) should be provided to pregnant women without complications 
        of pregnancy.
            ``(3) Prior authorization required for certain services.--
                    ``(A) In general.--Except in the case of items and 
                services specified under subparagraph (B), benefits are 
                not available with respect to an item or service under 
                paragraph (1) unless the provision of the item or 
                service has been approved by a utilization and quality 
                control peer review organization before the provision 
                of the item or service.
                    ``(B) Exception for routine or common items and 
                services.--Subparagraph (A) shall not apply to items 
                and services which the Secretary has specified on a 
                list as being either--
                            ``(i) related to normal pregnancy, or
                            ``(ii) related to a highly prevalent 
                        complication of pregnancy,
                or in the case of emergency services.
            ``(4) Multiple bases for eligibility.--In the case of a 
        pregnant woman who is also a child or a low-income individual, 
        the benefits under this subsection shall be in addition or 
        supplementation to the benefits otherwise available to the 
        individual.
    ``(f) Lower-Income Individuals.--
            ``(1) Limitations on deductibles and coinsurance.--
                    ``(A) None for low-income individuals.--In the case 
                of a low-income individual, there shall be no 
                coinsurance, deductibles, or copayments under this 
                title.
                    ``(B) Phase-in for other lower-income 
                individuals.--In the case of an individual whose 
                applicable modified gross income (as defined in section 
                2161(b)(1)) exceeds the poverty level (as defined in 
                section 2161(b)(2)) but does not exceed twice the 
                poverty level, the coinsurance, deductibles, and 
                copayments applicable under this title shall bear the 
                same ratio to the coinsurance, deductibles, and 
                copayments otherwise applicable as--
                            ``(i) the excess of the applicable modified 
                        gross income over the poverty level, bears to
                            ``(ii) the poverty level.
                If the ratio determined under the preceding sentence is 
                not a multiple of 25 percentage points, such ratio 
                shall be rounded to the nearest 25 percentage points.
            ``(2) Additional benefits for low-income individuals.--In 
        the case of low-income individuals (as defined in section 
        2161(a)(2)), benefits under this title shall also include 
        entitlement to have payment made for the following, without the 
        application of deductibles, coinsurance, or copayments:
                    ``(A) Inpatient hospital services (without regard 
                to the restrictions described in subsections (a)(1) and 
                (b)(1) of section 1812 and the coinsurance described in 
                section 1813(a)(1)).
                    ``(B) Eyeglasses and hearing aids and examinations 
                therefor.

``SEC. 2122. EXCLUSIONS.

    ``(a) In General.--Except as provided in this section, section 1862 
shall apply to expenses incurred for items and services provided under 
this title the same manner as such section applies to items and 
services provided under title XVIII.
    ``(b) Benefits Exception.--
            ``(1) Childrens' services.--In applying section 1862(a) 
        with respect to services described in section 2121(d)(2)(A) 
        (relating to well-child services), payment shall not be denied 
        under paragraph (1), (7), or (12) of such section 1862(a) if 
        the services are provided in accordance with the periodicity 
        schedule described in section 2121(d)(2)(B).
            ``(2) Services for pregnant women.--In applying section 
        1862(a) with respect to services described in section 
        2121(e)(1) (other than subparagraph (A) thereof), payment shall 
        not be denied under paragraph (1) or (7) of such section 
        1862(a) if the services are provided in accordance with the 
        periodicity schedule described in section 2121(e)(2).
            ``(3) Treatment of eyeglasses and hearing aids for children 
        and low-income individuals.--Payment shall not be denied under 
        this title under section 1862(a)(7) with respect to eyeglasses 
        and hearing aids and examinations therefor in the case of 
        children and low-income individuals.
    ``(c) Coordination of Payments.--
            ``(1) Primary to group health plans.--Section 1862(b)(1) 
        (relating to requirements of group health plans) shall not 
        apply under this title.
            ``(2) Secondary to medicare.--Payment shall not be made 
        under this title with respect to benefits to the extent that 
        payment for such benefits may be made under title XVIII.

              ``Part C--Payment for Benefits and Financing

``SEC. 2141. PAYMENTS FOR BENEFITS.

    ``(a) In General.--Except as otherwise provided in this section and 
in section 2121--
            ``(1) payment of benefits under this title with respect to 
        benefits shall be made in an amount consistent with subsection 
        (h) and on the same basis as payment is made with respect to 
        such benefits under title XVIII, and
            ``(2) the provisions of sections 1814, 1833, 1834, 1842, 
        1848, and 1886 shall apply to payment of benefits under this 
        title in the same manner as they apply to benefits under title 
        XVIII.
    ``(b) No Cost-Sharing for Certain Services.--No deductibles, 
coinsurance, copayments, or other cost-sharing shall be imposed with 
respect to--
            ``(1) well-child care services described in section 
        2121(d)(1),
            ``(2) items and services for which an individual is 
        entitled under this title as a pregnant woman, and
            ``(3) items and services for qualified low-income 
        individuals.
For provision limiting the deductibles, coinsurance, and copayments 
under this title in any year, see section 2121(b)(2).
    ``(c) No Extra Billing Permitted.--Payment under this title may 
only be made on an assignment-related basis (as defined in section 
1842(i)(1)). If an entity knowingly and willfully presents or causes to 
be presented a claim or bills an individual enrolled under this title 
for charges for services other than on an assignment-related basis, the 
Secretary may apply sanctions against such entity in accordance with 
section 1842(j)(2).
    ``(d) Adjustment of Payments.--
            ``(1) Establishment of new drgs and weights.--In making 
        payment under this title with respect to inpatient hospital 
        services, the Secretary shall establish such additional 
        diagnosis-related groups (and weighting factors with respect to 
        discharges within such groups) and make such adjustments in the 
        diagnosis-related groups and weighting factors with respect to 
        discharges within such groups otherwise established under 
        section 1886(d)(4) as may be necessary--
                    ``(A) to reflect the types of discharges occurring 
                under this title which are not occurring under title 
                XVIII, and
                    ``(B) to provide for a weighting factor, for 
                cesarean section deliveries, which is 95 percent of the 
                weighting factor that otherwise would be established.
            ``(2) Payment for obstetrical services.--
                    ``(A) Global fee.--In making payment under this 
                title with respect to the group of obstetrical services 
                typical of treatment throughout a course of pregnancy, 
                the Secretary shall establish, as a schedule under 
                section 1848, a global fee with respect to such group 
                of services.
                    ``(B) Bonus for early presentation.--The fee 
                schedule amount with respect to obstetrical services 
                under this title shall be increased by 5 percent in the 
                case of services furnished to women who have presented 
                for prenatal care during the first trimester.
                    ``(C) Disincentive for cesarean sections.--The fee 
                schedule amount otherwise established with respect to a 
                cesarean section shall be 95 percent of the fee 
                schedule amount otherwise established.
    ``(e) Conditions of and Limitations on Payments.--The provisions of 
sections 1814 and 1835 shall apply to payment for services under this 
title in the same manner as they apply to payment for services under 
parts A and B, respectively, of title XVIII.
    ``(f) Use of Trust Fund.--In carrying out this section, any 
reference in title XVIII to a trust fund shall be treated as a 
reference to the Mediplan Trust Fund established under section 2142.
    ``(g) Payment for Outpatient Prescription Drugs and Biologicals.--
The Secretary, taking into account the payment methodology that was 
described in the amendments made by section 202 of the Medicare 
Catastrophic Coverage Act of 1988 (as in effect before its repeal), 
shall establish a prospective payment methodology for the payment for 
outpatient prescription drugs and biologicals under this title. Such 
methodology shall be established in a manner so as to meet the 
assurance described in subsection (h) with respect to the class of 
services that includes outpatient prescription drugs and biologicals.
    ``(h) Computation of Appropriate Reference Rates or Conversion 
Factors to Stay Within Budget.--In computing the amount of payment with 
respect to services (within a class of services) for which a 
standardized amount, conversion factor, or other rate basis is 
established under title XVIII, such standardized amount, conversion 
factor, or other rate basis shall be established in such a manner as 
will assure that--
            ``(1) the aggregate Mediplan expenditures (as defined in 
        section 201(d) of the Mediplan Health Care Act of 1993) for all 
        the services within such class which are not attributable to 
        services furnished to individuals who are enrolled in a staff 
        or group model health maintenance organization (as defined in 
        section 207(b)(2)(B) of such Act) with respect to health care 
        services covered under the subscriber agreement, is equal to
            ``(2) the allocation to such class for the year under 
        section 202 of such Act with respect to the national Mediplan 
        expenditure budget, less the product of such allocation and the 
        proportion of such allocation that the Secretary estimates is 
        attributable to services furnished to individuals who are 
        enrolled in such a staff or group model health maintenance 
        organization with respect to health care services covered under 
        the subscriber agreement.
In computing the aggregate Mediplan expenditures under paragraph (1), 
there shall be taken into account the adjustment in medicare payment 
rates under section 205 of such Act.

``SEC. 2142. MEDIPLAN TRUST FUND.

    ``(a) Establishment.--(1) There is hereby created on the books of 
the Treasury of the United States a trust fund to be known as the 
`Mediplan Trust Fund' (in this section referred to as the `Trust 
Fund'). The Trust Fund shall consist of such gifts and bequests as may 
be made as provided in section 201(i)(1) and amounts appropriated under 
paragraph (2).
    ``(2) There are hereby appropriated to the Trust Fund amounts 
equivalent to 100 percent of the taxes imposed by sections 59B and 59C 
of the Internal Revenue Code of 1986. The amounts appropriated by the 
preceding sentence shall be transferred from time to time from the 
general fund in the Treasury to the Trust Fund, such amounts to be 
determined on the basis of estimates by the Secretary of the Treasury 
of the taxes, paid to or deposited into the Treasury; and proper 
adjustments shall be made in amounts subsequently transferred to the 
extent prior estimates were in excess of or were less than the taxes 
specified in such sentence.
    ``(b) Incorporation of Provisions.--
            ``(1) In general.--Subject to paragraph (2), the provisions 
        of subsections (b) through (e) and (g) through (i) of section 
        1817 shall apply to the Trust Fund in the same manner as they 
        apply to the Federal Hospital Insurance Trust Fund.
            ``(2) Exceptions.--In applying paragraph (1)--
                    ``(A) the Board of Trustees and Managing Trustee of 
                the Trust Fund shall be composed of the members of the 
                Board of Trustees and the Managing Trustee, 
                respectively, of the Federal Hospital Insurance Trust 
                Fund; and
                    ``(B) any reference in section 1817 to the Federal 
                Hospital Insurance Trust Fund or to title XVIII (or 
                part A thereof) is deemed a reference to the Trust Fund 
                under this section and this title, respectively.

                ``Part D--Administrative Simplification

``SEC. 2151. REQUIREMENT FOR ENTITLEMENT VERIFICATION SYSTEM.

    ``(a) In General.--
            ``(1) Requirement.--Each Mediplan supplemental plan (as 
        defined in section 2166(d)) and the Secretary, with respect to 
        the plan provided under this title, shall provide for an 
        electronic system, that is certified by the Secretary as 
        meeting the standards established under subsection (c), for the 
        verification of an individual's entitlement to benefits under 
        such plan.
            ``(2) Deadline for application of requirement.--The 
        deadline specified under this paragraph for the requirement 
        under paragraph (1) is 6 months after the date the standards 
        are established under subsection (c).
    ``(b) Enforcement Through Civil Money Penalties.--
            ``(1) In general.--In the case of a Mediplan supplemental 
        plan that fails to provide for an electronic verification 
        system that is certified by the Secretary as meeting the 
        standards established under subsection (c), the plan is subject 
        to a civil money penalty of not to exceed $100 for each day in 
        which such failure persists. The provisions of section 1128A of 
        the Social Security Act (other than subsections (a) and (b)) 
        shall apply to a civil money penalty under this subsection in 
        the same manner as such provisions apply to a penalty or 
        proceeding under section 1128A(a) of such Act.
            ``(2) Effective date.--No penalty may be imposed under 
        paragraph (1) for any failure occurring before the deadline 
        specified in subsection (a)(2).
    ``(c) Standards for Entitlement Verification Systems.--
            ``(1) In general.--The Secretary shall establish standards 
        consistent with this subsection respecting the requirements for 
        certification of entitlement verification systems.
            ``(2) Information available.--Such standards shall require 
        a system to provide information, with respect to individuals, 
        concerning the following:
                    ``(A) The specific benefits to which the individual 
                is entitled under the plan.
                    ``(B) Current status of the individual with respect 
                to fulfillment of deductibles, copayments, and out-of-
                pocket limits on cost-sharing.
                    ``(C) Restrictions on providers who may provide 
                covered services, including utilization controls (such 
                as preadmission certification).
            ``(3) Form of inquiry.--Each verification system shall be 
        capable of accepting inquiries under this subsection from 
        health care providers in a variety of electronic and other 
        forms, including--
                    ``(A) through electronic transmission of 
                information on the uniform health claims card (in a 
                manner similar to that for verification of credit card 
                purchases),
                    ``(B) through the use of a touch-tone telephone 
                line, and
                    ``(C) through the use of a computer modem.
        The system shall also provide, for an additional fee, for the 
        acceptance of inquiries in a nonelectronic form.
            ``(4) Form of response.--Each such system shall be capable 
        of responding to such inquiries under this subsection in a 
        variety of electronic and other forms, including--
                    ``(A) through modem transmission of information,
                    ``(B) through computer synthesized voice 
                communication, and
                    ``(C) through transmission of information to a 
                facsimile (fax) machine.
        The system shall also provide, for an additional fee, for the 
        response to inquiries in a nonelectronic form.
            ``(5) Limitation on fees.--Neither the Secretary nor a 
        Mediplan supplemental may impose a fee for the acceptance or 
        response to an inquiry under this subsection except where the 
        acceptance or response is in a nonelectronic form.
            ``(6) Public domain software to providers.--The Secretary 
        shall provide for the development, and shall make available 
        without charge to health service providers and Mediplan 
        supplemental plans, such computer software as will enable--
                    ``(A) such providers to make inquiries, and receive 
                responses, electronically respecting the eligibility 
                and benefits of an individual under plans, and
                    ``(B) such plans to make inquiries, and receive 
                responses, electronically respecting liability of other 
                plans for the provision or payment of benefits.
            ``(7) Deadline.--The Secretary shall first establish the 
        standards under this subsection (and shall develop and make 
        available the software under paragraph (6)) by not later than 
        12 months after the date of the enactment of this title.
    ``(d) Application to Medicare and Medicaid Programs.--
            ``(1) Medicare program.--The Secretary shall provide, in 
        regulations promulgated to carry out the medicare program, that 
        there is established an entitlement verification system that 
        meets the standards established under subsection (c), by not 
        later than the deadline specified in subsection (a)(2).
            ``(2) State medicaid plans.--As a condition for the 
        approval of a State plan under the medicaid program, effective 
        for calendar quarters beginning on or after the deadline 
        specified in subsection (a)(2), each such plan shall provide, 
        in accordance with regulations of the Secretary, that there is 
        established an entitlement verification system that meets the 
        standards established under subsection (c).

``SEC. 2152. REQUIREMENTS FOR UNIFORM CLAIMS AND ELECTRONIC CLAIMS DATA 
              SET.

    ``(a) Requirements.--
            ``(1) Submission of claims.--Each health service provider 
        that furnishes services in the United States for which payment 
        may be made under this title or under a Mediplan supplemental 
        plan shall submit any claim for payment for such services only 
        in a form and manner consistent with standards established 
        under subsection (c).
            ``(2) Acceptance of claims.--The Secretary and a Mediplan 
        supplemental plan may not reject a claim for payment under this 
        title or the plan on the basis of the form or manner in which 
        the claim is submitted if the claim is submitted in accordance 
        with the standards established under subsection (c).
            ``(3) Effective date.--This subsection shall apply to 
        claims for services furnished on or after the date that is 6 
        months after the date standards are established under 
        subsection (c).
    ``(b) Enforcement Through Civil Money Penalties.--
            ``(1) In general.--
                    ``(A) Providers.--In the case of a health service 
                provider that submits a claim in violation of 
                subsection (a)(1), the provider is subject to a civil 
                money penalty of not to exceed $100 (or, if greater, 
                the amount of the claim) for each such violation.
                    ``(B) Plans.--In the case of a Mediplan 
                supplemental plan that rejects a claim in violation of 
                subsection (a)(2), the plan is subject to a civil money 
                penalty of not to exceed $100 (or, if greater, the 
                amount of the claim) for each such violation.
            ``(2) Process.--The provisions of section 1128A of the 
        Social Security Act (other than subsections (a) and (b)) shall 
        apply to a civil money penalty under paragraph (1) in the same 
        manner as such provisions apply to a penalty or proceeding 
        under section 1128A(a) of such Act.
            ``(3) Sunset for penalty.--No civil money penalty may be 
        imposed under this subsection for submission (or rejection) of 
        any claim on or after the date that is 36 months after the 
        effective date specified in subsection (a)(3).
    ``(c) Standards Relating to Uniform Claims and Electronic Claims 
Data Set.--
            ``(1) Establishment of standards.--The Secretary shall 
        establish standards that--
                    ``(A) relate to the form and manner of submission 
                of claims for benefits under this title and under a 
                Mediplan supplemental plan, and
                    ``(B) define the data elements to be contained in a 
                uniform electronic claims data set to be used with 
                respect to such claims.
            ``(2) Scope of information.--
                    ``(A) In general.--The standards under this 
                subsection are intended to cover substantially most 
                claims that are filed under this title and under 
                Mediplan supplemental plans. Such information need not 
                include all elements that may potentially be required 
                to be reported under utilization review provisions of 
                such plans.
                    ``(B) Ensuring accountability for claims submitted 
                electronically.--In establishing such standards, the 
                Secretary, in consultation with appropriate agencies, 
                shall include such methods of ensuring provider 
                responsibility and accountability for claims submitted 
                electronically that are designed to control fraud and 
                abuse in the submission of such claims.
                    ``(C) Components.--In establishing such standards 
                the Secretary shall--
                            ``(i) with respect to data elements, define 
                        data fields, formats, and medical nomenclature, 
                        and plan benefit and insurance information;
                            ``(ii) develop a single, uniform coding 
                        system for diagnostic and procedure codes; and
                            ``(iii) provide for standards for the 
                        uniform electronic transmission of such 
                        elements.
            ``(3) Coordination with standards for electronic medical 
        records.--In establishing standards under this subsection, the 
        Secretary shall assure that--
                    ``(A) the development of such standards is 
                coordinated with the development of the standards for 
                electronic medical records under section 2153, and
                    ``(B) the coding of data elements under the uniform 
                electronic claims data set and the coding of the same 
                elements in the uniform hospital clinical data set are 
                consistent.
            ``(4) Use of task forces.--In adopting standards under this 
        subsection--
                    ``(A) the Secretary shall take into account the 
                recommendations of current task forces, including at 
                least the Workgroup on Electronic Data Interchange, 
                National Uniform Billing Committee, the Uniform Claim 
                Task Force, and the Computer-based Patient Record 
                Institute, and
                    ``(B) the Secretary shall provide that the 
                electronic transmission standards are consistent, to 
                the extent practicable, with the applicable standards 
                established by the Accredited Standards Committee X-12 
                of the American National Standards Institute.
            ``(5) Uniform, unique provider identification codes.--In 
        establishing standards under this subsection--
                    ``(A) the Secretary shall provide for a unique 
                identifier code for each health service provider that 
                furnishes services for which a claim may be submitted 
                under this title or under a Mediplan supplemental plan, 
                and
                    ``(B) in the case of a provider that has a unique 
                identifier issued for purposes of title XVIII, the code 
                provided under subparagraph (A) shall be the same as 
                such unique identifier.
            ``(6) Public domain software to providers.--The Secretary 
        shall provide for the development, and shall make available 
        without charge to health service providers, such computer 
        software as will enable the providers to submit claims and to 
        receive verification of claims status electronically.
            ``(7) Standards for paper claims.--The standards shall 
        provide for a uniform paper claims form which is consistent 
        with data elements required for the submission of claims 
        electronically.
            ``(8) Standards for claims for clinical laboratory tests.--
        The standards shall provide that claims for clinical laboratory 
        tests for which benefits are provided under this title or under 
        a Mediplan supplemental plan shall be submitted directly by the 
        person or entity that performed (or supervised the performance 
        of) the tests to the plan in a manner consistent with (and 
        subject to such exceptions as are provided under) the 
        requirement for direct submission of such claims under title 
        XVIII.
            ``(9) Deadline.--The Secretary shall first provide for the 
        standards for the uniform claims under this subsection (and 
        shall develop and make available the software under paragraph 
        (6)) by not later than 1 year after the date of the enactment 
        of this title.
    ``(d) Use Under This Title and Medicare and Medicaid Programs.--
            ``(1) Requirement for providers.--In the case of a health 
        service provider that submits a claim for services furnished 
        under this title in violation of subsection (a)(1), no payment 
        shall be made under this title for such services.
            ``(2) Requirements of intermediaries and carriers under 
        medicare program.--The Secretary shall provide, in regulations 
        promulgated to carry out this title, that the claims process 
        provided under this title conforms to the standards established 
        under subsection (c).
            ``(3) Requirements of state medicaid plans.--As a condition 
        for the approval of State plans under the medicaid program, 
        effective as of the effective date specified in subsection 
        (a)(3), each such plan shall provide, in accordance with 
        regulations of the Secretary, that the claims process provided 
        under the plan is modified to the extent required to conform to 
        the standards established under subsection (c).

``SEC. 2153. ELECTRONIC MEDICAL RECORDS AND REPORTING.

    ``(a) Standards for Electronic Medical Records for Hospitals.--
            ``(1) Promulgation of standards.--
                    ``(A) In general.--Between July 1, 1994, and 
                January 1, 1995, the Secretary shall promulgate 
                standards described in paragraph (2) for hospitals 
                concerning electronic medical records.
                    ``(B) Revision.--The Secretary may from time to 
                time revise the standards promulgated under this 
                paragraph.
            ``(2) Contents of standards.--The standards promulgated 
        under paragraph (1) shall include at least the following:
                    ``(A) A definition of a uniform hospital clinical 
                data set, including a definition of the set of 
                comprehensive data elements, for use by utilization and 
                quality control peer review organizations.
                    ``(B) Standards for an electronic patient care 
                information system with data obtained at the point of 
                care.
                    ``(C) A specification of, and manner of 
                presentation of, the individual data elements of the 
                set and system under this paragraph.
                    ``(D) Standards concerning the transmission of 
                electronic medical data.
                    ``(E) Standards relating to confidentiality of 
                patient-specific information, which include the 
                physical security of electronic data and the use of 
                keys, passwords, encryption, and other means to ensure 
                the protection of the confidentiality and privacy of 
                electronic data.
            ``(3) Coordination with standards for uniform electronic 
        claims data set.--In establishing standards under this 
        subsection, the Secretary shall assure that--
                    ``(A) the development of such standards is 
                coordinated with the development of the standards for 
                the uniform electronic claims data set under subsection 
                (b), and
                    ``(B) the coding of data elements under the uniform 
                hospital clinical data set and the coding of the same 
                elements under the uniform electronic claims data set 
                are consistent.
            ``(4) Consultation.--In establishing standards under this 
        subsection, the Secretary shall--
                    ``(A) consult with the American National Standards 
                Institute, hospitals, health benefit plans, and other 
                interested parties, and
                    ``(B) take into consideration, in developing 
                standards under paragraph (2)(A), the data set used by 
                the utilization and quality control peer review program 
                under part B of title XI.
    ``(b) Requirement for Application of Electronic Records Standards 
to Hospitals.--
            ``(1) As condition of medicare participation.--As of 
        January 1, 1996, each hospital, as a requirement of each 
        participation agreement under this title, shall, in accordance 
        with the standards promulgated under subsection (a)(1)--
                    ``(A) maintain clinical data included in the 
                uniform hospital clinical data set under subsection 
                (a)(2)(A) in electronic form on all inpatients,
                    ``(B) upon request of the Secretary or of a 
                utilization and quality control peer review 
                organization (with which the Secretary has entered into 
                a contract under part B of title XI), transmit 
                electronically data requested from such data set, and
                    ``(C) upon request of the Secretary, or of a fiscal 
                intermediary or carrier, transmit electronically any 
                data (with respect to a claim) from such data set.
            ``(2) Application of presentation and transmission 
        standards to electronic transmission to federal agencies.--
        Effective January 1, 1996, if a hospital is required under a 
        Federal program to transmit a data element that is subject to a 
        standard, promulgated under subsection (a)(1), described in 
        subparagraph (C) or (D) of subsection (a)(2), the head of the 
        Federal agency responsible for such program (if not otherwise 
        authorized) is authorized to require the provider to present 
        and transmit the data element electronically in accordance with 
        such a standard.
    ``(c) Limitation on Data Requirements Where Standards In Effect.--
            ``(1) In general.--On or after January 1, 1996, the 
        Secretary under this title or under title XVIII (including any 
        carrier or fiscal intermediary or nor any utilization and 
        quality control peer review organization) and a Mediplan 
        supplemental plan may not require, for the purpose of 
        utilization review or as a condition of providing benefits or 
        making payments under this title, title XVIII, or the plan, 
        that a hospital--
                    ``(A) provide any data element not in the uniform 
                hospital clinical data set specified under the 
                standards promulgated under subsection (a), or
                    ``(B) transmit or present any such data element in 
                a manner inconsistent with such standards applicable to 
                such transmission or presentation.
            ``(2) Compliance.--The Secretary may impose a civil money 
        penalty on any Mediplan supplemental plan that fails to comply 
        with paragraph (1) in an amount not to exceed $100 for each 
        such failure. The provisions of section 1128A of the Social 
        Security Act (other than the first sentence of subsection (a) 
        and other than subsection (b)) shall apply to a civil money 
        penalty under this paragraph in the same manner as such 
        provisions apply to a penalty or proceeding under section 
        1128A(a) of such Act.
            ``(3) Application to medicaid program.--As a condition for 
        the approval of State plans under the medicaid program and in 
        accordance with regulations of the Secretary, effective as of 
        January 1, 1996, each such plan may not require that a 
        hospital, for the purpose of utilization review or as a 
        condition of providing benefits or making payments under the 
        plan--
                    ``(A) provide any data element not in the uniform 
                hospital clinical data set specified under the 
                standards promulgated under subsection (a), or
                    ``(B) transmit or present any such data element in 
                a manner inconsistent with such standards applicable to 
                such transmission or presentation.
    ``(d) Preemption of State Quill Pen Laws.--
            ``(1) In general.--Any provision of State law that requires 
        medical or health insurance records (including billing 
        information) to be maintained in written, rather than 
        electronic, form shall deemed to be satisfied if the records 
        are maintained in an electronic form that meets standards 
        established by the Secretary under paragraph (2).
            ``(2) Secretarial authority.--Not later than 1 year after 
        the date of the enactment of this title, the Secretary shall 
        issue regulations to carry out paragraph (1). The regulations 
        shall provide for an electronic substitute that is in the form 
        of a unique identifier (assigned to each authorized individual) 
        that serves the functional equivalent of a signature. The 
        regulations may provide for such exceptions to paragraph (1) as 
        the Secretary determines to be necessary to prevent fraud and 
        abuse, to prevent the illegal distribution of controlled 
        substances, and in such other cases as the Secretary deems 
        appropriate.
            ``(3) Effective date.--Paragraph (1) shall take effect on 
        the first day of the first month that begins more than 30 days 
        after the date the Secretary issues the regulations referred to 
        in paragraph (2).

``SEC. 2154. UNIFORM HOSPITAL COST REPORTING.

    ``Each hospital, as a requirement under a participation agreement 
under this title for each cost reporting period beginning during or 
after fiscal year 1993, shall provide for the reporting of information 
to the Secretary with respect to any hospital care provided in a 
uniform manner consistent with standards established by the Secretary 
to carry out section 4007(c) of the Omnibus Budget Reconciliation Act 
of 1987 and in an electronic form consistent with standards established 
by the Secretary.

``SEC. 2155. HEALTH SERVICE PROVIDER DEFINED.

    ``In this part, the term `health service provider' includes a 
provider of services (as defined in section 1861(u)), physician, 
supplier, and other person furnishing health care services.

                      ``Part E--General Provisions

``SEC. 2161. DEFINITIONS RELATING TO BENEFICIARIES AND INCOME.

    ``(a) Terms Relating to Beneficiaries.--In this title:
            ``(1) Child.--The term `child' means an individual who 
        throughout a month has not attained 23 years of age.
            ``(2) Low-income individual.--The term `low-income 
        individual' means an individual whose applicable modified gross 
        income (as defined in subsection (b)(1)) is less than 100 
        percent of the poverty level (as defined in subsection (b)(2)).
            ``(3) Pregnant woman.--The term `pregnant woman' means a 
        woman who has been certified by a physician (in a manner 
        specified by the Secretary) as being pregnant, until the last 
        day of the month in which the 60-day period (beginning on the 
        date of termination of the pregnancy) ends.
    ``(b) Terms Relating to Income.--In this title:
            ``(1) Applicable modified gross income.--
                    ``(A) In general.--Except as provided in this 
                paragraph, the term `applicable modified gross income' 
                means, for a calendar year for an individual, the 
                modified gross income (as defined in section 59B(c) of 
                the Internal Revenue Code of 1986) of the taxpayer (or 
                the taxpayer for whom the individual may be claimed as 
                a dependent) for the taxable year ending in the second 
                previous calendar year.
                    ``(B) Application of current year modified gross 
                income.--
                            ``(i) In general.--Subject to clause (ii), 
                        the Secretary shall establish a procedure under 
                        which an individual may file a declaration of 
                        estimated modified gross income for a taxable 
                        year ending in a calendar year, which modified 
                        gross income will apply under this subsection 
                        as the applicable modified gross income for the 
                        calendar year. Subject to clause (ii), such 
                        procedure shall be applicable regardless of 
                        whether or not the individual filed a tax 
                        return for the taxable year ending in the 
                        second previous calendar year.
                            ``(ii) Limitation on application.--The 
                        Secretary may limit the application of clause 
                        (i), in the case of individuals who have filed 
                        tax returns for the taxable year ending in the 
                        second previous calendar year, to individuals 
                        with respect to whom the applicable modified 
                        gross income will be reduced by at least 20 
                        percent as a result of the application of such 
                        clause.
                            ``(iii) Requirement for return.--Any 
                        individual who has filed a declaration under 
                        clause (i) for a calendar year is required to 
                        file an income tax return for the taxable year 
                        in the calendar year, regardless of whether any 
                        income tax is actually owed for the year. The 
                        failure of the individual to file such a return 
                        makes the individual liable for overpayments 
                        under this title under clause (iv) in the same 
                        manner as if this paragraph had not applied.
                            ``(iv) Collection for overpayments.--If a 
                        declaration of estimated modified gross income 
                        is made applicable to a calendar year under 
                        clause (i) and the actual modified gross income 
                        for that taxable year exceeds such estimated 
                        modified gross income, the individual shall be 
                        liable to the United States for 110 percent of 
                        the amount of additional payments made under 
                        this title as a result of the use of such 
                        estimated modified gross income instead of the 
                        actual modified gross income for that taxable 
                        year.
                    ``(C) Transmittal of information.--By not later 
                than October 1 of each year, the Secretary of the 
                Treasury shall transmit to the Secretary such 
                information relating to the applicable modified gross 
                income of individuals for the taxable year ending in 
                the previous year as may be necessary to apply this 
                title in the succeeding calendar year.
            ``(2) Poverty level.--The term `poverty level' means, for 
        an individual in a family, the official poverty line (as 
        defined by the Office of Management and Budget, and revised 
        annually in accordance with section 673(2) of the Omnibus 
        Budget Reconciliation Act of 1981) applicable to a family of 
        the size involved.

``SEC. 2162. INCORPORATION OF CERTAIN MEDICARE PROVISIONS AND OTHER 
              PROVISIONS.

    ``(a) Use of Carriers and Intermediaries.--The Secretary shall 
provide for the administration of this title through the use of fiscal 
intermediaries and carriers in the same manner as title XVIII is 
carried out through the use of such fiscal intermediaries and carriers, 
except that no payment shall be made under this title except on the 
basis of bills or charges that are submitted electronically in a manner 
specified by the Secretary.
    ``(b) Definitions.--Except as otherwise provided in this title, the 
definitions contained in section 1861 shall apply for purposes of this 
title in the same manner as they apply for purposes of title XVIII.
    ``(c) Certification, Provider Qualification, Etc.--The provisions 
of sections 1863 through 1875, sections 1877 through 1880, section 
1883, section 1885, and sections 1887 through 1892 shall apply to this 
title in the same manner as they apply to title XVIII.
    ``(d) Health Maintenance Organizations and Competitive Medical 
Plans.--
            ``(1) In general.--Except as provided in this subsection, 
        section 1876 shall apply to individuals entitled to benefits 
        under this title in the same manner as such section applies to 
        individuals entitled to benefits under part A, and enrolled 
        under part B, of title XVIII.
            ``(2) Application.--In applying section 1876 under this 
        section--
                    ``(A) the provisions of such section relating only 
                to individuals enrolled under part B of title XVIII 
                shall not apply;
                    ``(B) any reference to a Trust Fund established 
                under title XVIII and to benefits under such title is 
                deemed a reference to the Mediplan Trust Fund and to 
                benefits under this title;
                    ``(C) the adjusted average per capita cost and the 
                adjusted community rate shall be determined on the 
                basis of benefits and payment rates under this title; 
                and
                    ``(D) subsection (f) shall not apply.
    ``(e) Title XI Provisions.--The following provisions shall apply to 
this title in the same manner as they apply to title XVIII:
            ``(1) Sections 1124, 1126, and 1128 through 1128B (relating 
        to fraud and abuse).
            ``(2) Section 1134 (relating to nonprofit hospital 
        philanthropy).
            ``(3) Section 1138 (relating to hospital protocols for 
        organ procurement and standards for organ procurement 
        agencies).
            ``(4) Section 1142 (relating to research on outcomes of 
        health care services and procedures), except that any reference 
        in such section to a Trust Fund is deemed a reference to the 
        Mediplan Trust Fund.
            ``(5) Part B of title XI (relating to peer review of the 
        utilization and quality of health care services).
    ``(f) Other Provisions.--The provisions of section 201(i) shall 
apply to this title and the Mediplan Trust Fund in the same manner as 
they apply to title XVIII and the Federal Hospital Insurance Trust 
Fund.

``SEC. 2163. STATE MAINTENANCE OF EFFORT PAYMENTS.

    ``(a) Condition of Coverage.--Notwithstanding any other provision 
of this title, no individual who is a resident of a State is eligible 
for benefits under this title for a month in a calendar year, unless 
the State provides (in a manner and at a time specified by the 
Secretary) for payment to the Mediplan Trust Fund of \1/12\th of the 
amount specified in subsection (b) for the year.
    ``(b) Maintenance of Effort Amount.--The amount of payment 
specified in this subsection for a State for a year is equal to the 
amount of payment (net of Federal payments) made by a State under its 
State plan under title XIX for 1993 for medical assistance with respect 
to which benefits would have been payable under this title for low-
income individuals if this title were in effect in that year, increased 
to the year involved by the compounded sum of the increase in the 
consumer price index for all urban consumers (U.S. City average, as 
published by the Bureau of Labor Statistics of the Department of Labor) 
for each year after 1993 and up to the year involved.

``SEC. 2164. MODIFICATION OF MEDICAID AND OTHER PROGRAMS TO AVOID 
              DUPLICATION OF BENEFITS.

    ``Notwithstanding any other provision of law--
            ``(1) a State plan under title XIX shall not provide any 
        medical assistance for benefits with respect to which any 
        payments may be made under this title;
            ``(2) a health benefits plan under chapter 89 of title 5, 
        United States Code, shall not provide benefits for which any 
        payment may be made under this title; and
            ``(3) health benefits shall not be available under the 
        Civilian Health and Medical Program of the Uniformed Services 
        (as defined in section 1072(4) of title 10, United States Code) 
        for services for which payment may be made under this title.

``SEC. 2165. MAINTENANCE OF ADDITIONAL BENEFITS FOR CURRENT 
              BENEFICIARIES UNDER GROUP HEALTH PLANS.

    ``(a) In General.--In the case of a group health plan (as defined 
in section 5000(b)(1) of the Internal Revenue Code of 1986) that, as of 
the date of the enactment of this title, provides any health benefit to 
an employee or former employee or a family member of an employee or 
former employee that is additional to the benefits provided under this 
title, the group health plan must continue to make available such an 
additional benefit to such an individual notwithstanding the enactment 
of this title.
    ``(b) Limitation to Current Beneficiaries.--Subsection (a) shall 
not apply to an individual who is not entitled to benefits under the 
group health plan as of the date of the enactment of this title.
    ``(c) Enforcement.--There is established a private cause of action 
for damages (which shall be in an amount triple the amount otherwise 
provided) in the case of a group health plan that fails to continue to 
provide benefits in accordance with subsection (a).

         ``Part F--Regulation of Mediplan Supplemental Policies

``SEC. 2171. STANDARDS AND REQUIREMENTS FOR MEDIPLAN SUPPLEMENTAL 
              POLICIES.

    ``(a) Certification Required.--
            ``(1) In general.--No Mediplan supplemental policy (as 
        defined in section 2179(4)) may be issued on or after the 
        effective date specified in subsection (d) (and no new contract 
        may be offered under such policy with respect to any individual 
        or group beginning on or after such effective date) unless the 
        policy has been certified--
                    ``(A) by the Secretary (in accordance with such 
                procedures as the Secretary establishes), or
                    ``(B) by a State regulatory program (approved under 
                subsection (b)),
        as meeting the standards established under section 2172 by such 
        effective date.
            ``(2) Policy disapproved.--If the Secretary (or, in the 
        case of a policy certified by a State regulatory program, the 
        State) determines that a Mediplan supplemental policy does not 
        meet the applicable standards of this title on or after such 
        effective date, no coverage may be provided under the plan to 
        individuals not enrolled as of the date of the determination 
        and the policy may not be continued for policy years beginning 
        after the date of such determination until the Secretary (or 
        program) determines that such policy is in compliance with such 
        standards.
    ``(b) State Approved Programs.--
            ``(1) In general.--If the Secretary determines that a State 
        has in effect an effective regulatory program for the 
        application of the standards established under section 2172 to 
        Mediplan supplemental policies, the Secretary may approve such 
        program for purposes of certification of Mediplan supplemental 
        policies under this title.
            ``(2) Annual reports.--As a condition for the continued 
        approval of such a regulatory program, the State shall report 
        to the Secretary annually such information as the Secretary may 
        require with respect to the performance of the program. Such 
        information shall include a list of the Mediplan supplemental 
        policies certified under the program, the compliance of such 
        policies with the standards established under section 2172, and 
        enforcement actions taken to ensure such compliance.
            ``(3) Periodic secretarial review of state regulatory 
        programs.--The Secretary annually shall review State regulatory 
        programs approved under paragraph (1) to determine if they 
        continue to apply and enforce the standards. If the Secretary 
        initially determines that a State regulatory program no longer 
        is applying and enforcing such standards, the Secretary shall 
        provide the State an opportunity to adopt such a plan of 
        correction that would bring such program into compliance. If 
        the Secretary makes a final determination that the State 
        regulatory program, fails to apply and enforce such standards 
        after such an opportunity, the Secretary shall disapprove such 
        program and reassume responsibility for certification of all 
        Mediplan supplemental policies in that State.
            ``(4) GAO audits.--The Comptroller General shall conduct 
        periodic reviews on a sample of State regulatory programs 
        approved under paragraph (1) to determine their compliance with 
        the requirements of such paragraph. The Comptroller General 
        shall report to the Secretary and Congress on the findings of 
        such reviews.
    ``(c) Excise Tax Sanctions.--Nonqualified Mediplan supplemental 
policies are subject to an excise tax under section 5000A of the 
Internal Revenue Code of 1986.
    ``(d) Effective Date Specified.--
            ``(1) In general.--Subject to paragraph (2), the effective 
        date specified in this subsection for a State is the earlier 
        of--
                    ``(A) the date the State changes its statutes or 
                regulations to establish a regulatory program that 
                meets the requirements of this part, or
                    ``(B) 1 year after the date the Secretary first 
                publishes standards under section 2172.
            ``(2) Additional legislative action required.--In the case 
        of a State which the Secretary identifies as--
                    ``(A) requiring State legislation (other than 
                legislation appropriating funds) to establish a 
                regulatory program that meets the requirements of this 
                part, but
                    ``(B) having a legislature which is not scheduled 
                to meet in 1994 in a legislative session in which such 
                legislation may be considered,
        the effective date specified in this subsection is the first 
        day of the first calendar quarter beginning after the close of 
        the first legislative session of the State legislature that 
        begins on or after January 1, 1994. For purposes of the 
        previous sentence, in the case of a State that has a 2-year 
        legislative session, each year of such session shall be deemed 
        to be a separate regular session of the State legislature.

``SEC. 2172. ESTABLISHMENT OF STANDARDS.

    ``(a) Establishment of Standards.--The Secretary shall develop and 
publish, by not later than 9 months after the the date of the enactment 
of this title, specific standards to implement the requirements of this 
title and to be applied under section 5000A of the Internal Revenue 
Code of 1986.
    ``(b) More Stringent State Standards Permitted.--In the case of 
insured Mediplan supplemental policies (as defined in section 
2174(c)(2)), a State may implement standards that are more stringent 
than the standards established under this section.
    ``(c) Application to ERISA.--The Secretary shall consult with the 
Secretary of Labor concerning the application of the requirements of 
this title to employee welfare benefit plans under title I of the 
Employee Retirement Income Security Act of 1974.

``SEC. 2173. REQUIREMENTS APPLICABLE TO ALL MEDIPLAN SUPPLEMENTAL 
              POLICIES.

    ``(a) No Discrimination Based on Health Status.--
            ``(1) Provision of services.--Except as provided under 
        subsection (b), a Mediplan supplemental policy may not deny, 
        limit, or condition the coverage under (or benefits of) the 
        plan based on the health status, claims experience, receipt of 
        health care, medical history, or lack of evidence of 
        insurability, of an individual.
            ``(2) Premium charges.--A Mediplan supplemental policy may 
        not vary premiums charged based on the health status, claims 
        experience, receipt of health care, medical history, or lack of 
        evidence of insurability, of an individual.
    ``(b) Treatment of Pre-existing Condition Exclusions for All 
Services.--
            ``(1) In general.--Subject to the succeeding provisions of 
        this subsection, a Mediplan supplemental policy may exclude 
        coverage with respect to services related to treatment of a 
        pre-existing condition, but the period of such exclusion may 
        not exceed 6 months.
            ``(2) Nonapplication to newborns.--The exclusion of 
        coverage permitted under paragraph (1) shall not apply to 
        services furnished to newborns.
            ``(3)  Crediting of previous coverage.--
                    ``(A) In general.--If an individual is in a period 
                of continuous coverage (as defined in subparagraph 
                (B)(i)) with respect to particular services as of the 
                date of initial coverage under a plan, any period of 
                exclusion of coverage with respect to a pre-existing 
                condition for such services or type of services shall 
                be reduced by 1 month for each month in the period of 
                continuous coverage.
                    ``(B) Definitions.--In this paragraph:
                            ``(i) Period of continuous coverage.--The 
                        term `period of continuous coverage' means, 
                        with respect to particular services, the period 
                        beginning on the date an individual is enrolled 
                        under a Mediplan supplemental policy or health 
                        benefit plan or program (including the medicare 
                        program, a State plan under title XIX, 
                        continuation coverage under section 4980B of 
                        the Internal Revenue Code of 1986, or a State 
                        general medical assistance program) which 
                        provides the same or substantially similar 
                        benefits with respect to such services and ends 
                        on the date the individual is not so enrolled 
                        for a continuous period of more than 3 months.
                            ``(ii) Pre-existing condition.--The term 
                        `pre-existing condition' means, with respect to 
                        coverage under a policy, a condition which has 
                        been diagnosed or treated during the 3-month 
                        period ending on the day before the first date 
                        of such coverage, except that such term does 
                        not include a condition which was first 
                        diagnosed or treated during a period of 
                        continuous coverage.
                    ``(C) Standards for similar benefits.--The 
                Secretary shall establish such criteria for determining 
                if benefits are substantially similar as may be 
                necessary to carry out this subsection.
    ``(c) Simplification of Benefits.--
            ``(1) In general.--Each Mediplan supplemental policy shall 
        only offer benefits consistent with the standards promulgated 
        under paragraph (2).
            ``(2) Standards.--The Secretary shall promulgate standards 
        providing for--
                    ``(A) limitations on the groups or packages of 
                benefits that may be offered under a Mediplan 
                supplemental policy consistent with paragraphs (3) and 
                (4) of this subsection,
                    ``(B) uniform language and definitions to be used 
                with respect to such benefits, and
                    ``(C) uniform format to be used in the policy with 
                respect to such benefits.
            ``(3) Basis.--The standards under paragraph (2) shall 
        provide--
                    ``(A) for such groups or packages of benefits as 
                may be appropriate taking into account the 
                considerations specified in paragraph (4) and the 
                requirements of the succeeding subparagraphs,
                    ``(B) for identification of a core group of basic 
                benefits common to all policies, and
                    ``(C) that, subject to paragraph (5), the total 
                number of different benefit packages (counting the core 
                group of basic benefits described in subparagraph (B) 
                and each other combination of benefits that may be 
                offered as a separate benefit package) that may be 
                established in all the States and by all issuers shall 
                not exceed 10.
            ``(4) Innovation.--With the approval of the Secretary, the 
        issuer of a Mediplan supplemental policy may offer new or 
        innovative benefits in addition to the benefits provided in a 
        policy that otherwise complies with the standards. Any such new 
        or innovative benefits may include benefits that are not 
        otherwise available and are cost effective and shall be offered 
        in a manner which is consistent with the goal of simplification 
        of Mediplan supplemental policies.
            ``(5) Further limitations.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), this subsection shall not be 
                construed as preventing a State from restricting the 
                groups of benefits that may be offered in Mediplan 
                supplemental policies in the State.
                    ``(B) Limitation.--A State with a regulatory 
                program approved under section 2171(b)(1) may not 
                restrict under subparagraph (A) the offering of a 
                Mediplan supplemental policy consisting only of the 
                core group of benefits described in paragraph (3)(B).
            ``(6) Construction.--This subsection shall not be construed 
        as preventing an issuer of a Mediplan supplemental policy who 
        otherwise meets the requirements of this section from 
        providing, through an arrangement with a vendor, for discounts 
        from that vendor to the policyholder or certificateholders for 
        the purchase of items or services not covered under its 
        Mediplan supplemental policies.
            ``(7) Making basic policy available.--
                    ``(A) In general.--Anyone who sells a Mediplan 
                supplemental policy to an individual shall make 
                available for sale to the individual a Mediplan 
                supplemental policy with only the core group of basic 
                benefits (described in paragraph (3)(B)).
                    ``(B) Outline of coverage.--Anyone who sells a 
                Mediplan supplemental policy to an individual shall 
                provide the individual, before the sale of the policy, 
                an outline of coverage which describes the benefits 
                under the policy. Such outline shall be on a standard 
                form approved by the Secretary consistent with the 
                standards promulgated under this subsection.
            ``(8) Penalty.--Whoever sells or issues a Mediplan 
        supplemental policy in violation of the requirements of this 
        subsection is subject to a civil money penalty of not to exceed 
        $25,000 (or $15,000 in the case of a seller who is not the 
        issuer of the policy) for each such violation.
    ``(d) Minimum Loss Ratio Required.--
            ``(1) In general.--A Mediplan supplemental policy, a 
        specific disease policy (as defined by the Secretary), or a 
        hospital confinement indemnity policy (as defined by the 
        Secretary) may not be issued or renewed (or otherwise provide 
        coverage after the effective date specified in section 2171(d)) 
        unless--
                    ``(A) the policy can be expected for periods after 
                the effective date of these provisions (as estimated 
                for the entire period for which rates are computed to 
                provide coverage, on the basis of incurred claims 
                experience and earned premiums for such periods, and in 
                accordance with a uniform methodology, including 
                uniform reporting standards, developed by the 
                Secretary) to return to policyholders in the form of 
                aggregate benefits provided under the policy, at least 
                80 percent of the aggregate amount of premiums 
                collected in the case of group policies or at least 70 
                percent in the case of individual policies; and
                    ``(B) the issuer of the policy provides for the 
                issuance of a proportional refund, or a credit against 
                future premiums of a proportional amount, based on the 
                premium paid and in accordance with paragraph (2), of 
                the amount of premiums received necessary to assure 
                that the ratio of aggregate benefits provided to the 
                aggregate premiums collected (net of such refunds or 
                credits) complies with the expectation required under 
                subparagraph (A), treating policies of the same type as 
                a single policy for each standard package.
        For purposes of subparagraph (A) only, policies issued as a 
        result of solicitations of individuals through the mails or by 
        mass media advertising (including both print and broadcast 
        advertising) shall be deemed to be individual policies. For the 
        purpose of calculating the refund or credit required under 
        paragraph (1)(B) for a policy issued before the effective date 
        specified in section 2171(d), the refund or credit calculation 
        shall be based on the aggregate benefits provided and premiums 
        collected under all such policies issued by an insurer in a 
        State (separated as to individual and group policies) and shall 
        be based only on aggregate benefits provided and premiums 
        collected under such policies after such date.
            ``(2) Application.--Paragraph (1)(B) shall be applied with 
        respect to each type of policy by standard package. Paragraph 
        (1)(B) shall not apply to a policy until 12 months following 
        issue. In the case of a policy issued before the effective date 
        specified in section 2171(d), paragraph (1)(B) shall not apply 
        until 1 year after such date.
            ``(3) Timing of refund or credit.--
                    ``(A) In general.--A refund or credit required 
                under paragraph (1)(B) shall be made to each 
                policyholder insured under the applicable policy as of 
                the last day of the year involved.
                    ``(B) Interest.-- Such a refund shall include 
                interest from the end of the calendar year involved 
                until the date of the refund or credit at a rate as 
                specified by the Secretary for this purpose from time 
                to time which is not less than the average rate of 
                interest for 13-week Treasury notes.
                    ``(C) Deadline.-- For purposes of this paragraph 
                and paragraph (1)(B), refunds or credit against 
                premiums due shall be made, with respect to a calendar 
                year, not later than the third quarter of the 
                succeeding calendar year.
            ``(4) No preemption.--The provisions of this subsection do 
        not preempt a State from requiring a higher percentage than 
        that specified in paragraph (1)(A).
            ``(5) Audits.--The Comptroller General shall periodically, 
        not less often than every 3 years, perform audits with respect 
        to the compliance of Mediplan supplemental policies and dread 
        disease policies with the loss ratio requirements of this 
        subsection and shall report the results of such audits to any 
        State involved and to the Secretary.
            ``(6) Sanctions.--
                    ``(A) In general.--A person who fails to provide 
                refunds or credits as required in paragraph (1)(B) is 
                subject to a civil money penalty of not to exceed 
                $25,000 for each policy issued for which such failure 
                occurred.
                    ``(B) Liability.--Each issuer of a policy subject 
                to the requirements of paragraph (1)(B) shall be liable 
                to the policyholder or, in the case of a group policy, 
                to the certificateholder for credits required under 
                such paragraph.
    ``(e) Guaranteed Renewability.--
            ``(1) In general.--Each Mediplan supplemental policy shall 
        be guaranteed renewable and--
                    ``(A) the issuer may not cancel or nonrenew the 
                policy solely on the ground of health status of the 
                individual, and
                    ``(B) the issuer shall not cancel or nonrenew the 
                policy for any reason other than nonpayment of premium 
                or material misrepresentation.
            ``(2) Right of conversion upon termination of group 
        policy.--If the Mediplan supplemental policy is terminated by 
        the group policyholder and is not replaced as provided under 
        paragraph (4), the issuer shall offer certificateholders an 
        individual Mediplan supplemental policy which (at the option of 
        the certificateholder)--
                    ``(A) provides for continuation of the benefits 
                contained in the group policy, or
                    ``(B) provides for such benefits as otherwise meets 
                the requirements of this part.
            ``(3) Right of conversion upon termination of membership in 
        a group.--If an individual is a certificateholder in a group 
        Mediplan supplemental policy and the individual terminates 
        membership in the group, the issuer shall--
                    ``(A) offer the certificateholder the conversion 
                opportunity described in paragraph (2), or
                    ``(B) at the option of the group policyholder, 
                offer the certificateholder continuation of coverage 
                under the group policy.
            ``(4) Replacement.--If a group Mediplan supplemental policy 
        is replaced by another group Mediplan supplemental policy 
        purchased by the same policyholder, the succeeding issuer shall 
        offer coverage to all persons covered under the old group 
        policy on its date of termination. Coverage under the new group 
        policy shall not result in any exclusion for preexisting 
        conditions that would have been covered under the group policy 
        being replaced.
            ``(5) Suspension of policy for certain low-income 
        individuals.--
                    ``(A) In general.--Each Mediplan supplemental 
                policy shall provide that benefits and premiums under 
                the policy shall be suspended at the request of the 
                policyholder for the period (not to exceed 24 months) 
                in which the policyholder is determined to be entitled 
                for benefits under this title as a low-income 
                individual, but only if the policyholder notifies the 
                issuer of such policy within 90 days after the date the 
                individual becomes so entitled. If such suspension 
                occurs and if the policyholder or certificateholder 
                loses such entitlement, such policy shall be 
                automatically reinstituted (effective as of the date of 
                termination of such entitlement) under the following 
                terms, if the policyholder provides notice of such loss 
                of entitlement within 90 days after the date of such 
                loss:
                            ``(i) There is no waiting period with 
                        respect to treatment of pre-existing 
                        conditions.
                            ``(ii) Coverage is substantially equivalent 
                        to coverage in effect before the date of the 
                        termination.
                            ``(iii) The classification of premiums are 
                        on terms which are at least as favorable to the 
                        policyholder or certificateholder as the 
                        premium classification terms that would have 
                        applied to the policyholder or 
                        certificateholder had the coverage never 
                        terminated.
                    ``(B) Penalty.--Any person who issues a Mediplan 
                supplemental policy and fails to comply with the 
                requirements of subparagraph (A) is subject to a civil 
                money penalty of not to exceed $25,000 for each such 
                violation.

``SEC. 2174. STANDARDS APPLICABLE ONLY TO INSURED MEDIPLAN SUPPLEMENTAL 
              POLICIES.

    ``(a) Open Enrollment.--
            ``(1) In general.--Subject to the succeeding provisions of 
        this subsection, a carrier that offers an insured Mediplan 
        supplemental policy (as defined in subsection (c)) to 
        individuals residing (or to groups located) in a State must 
        offer the same policy to any other resident of (or group 
        located in) the State. Such requirement shall apply on a 
        continuous, year-round basis.
            ``(2) Restrictions of enrollment in the case of certain 
        association coverage.--In the case of an insured Mediplan 
        supplemental policy offered through an association which is 
        composed exclusively of employers (which may include self-
        employed individuals) and which has been formed for purposes 
        other than obtaining health insurance, the carrier is not 
        required to offer the policy to individuals or employers who 
        are not employees of such employers or self-employed members of 
        the association, or their dependents.
            ``(3) Treatment of health maintenance organizations.--
                    ``(A) Geographic limitations.--A health maintenance 
                organization may deny enrollment with respect to an 
                individual if the individual is residing outside the 
                service area of the organization, but only if such 
                denial is applied uniformly without regard to health 
                status or insurability.
                    ``(B) Size limits.--A health maintenance 
                organization may apply to the Secretary to cease 
                enrolling new employer groups or individuals in its 
                insured Mediplan supplemental policy (or in a 
                geographic area served by the policy) if--
                            ``(i) it ceases to enroll any new employer 
                        groups or individuals, and
                            ``(ii) it can demonstrate that its 
                        financial or administrative capacity to serve 
                        previously enrolled groups and individuals (and 
                        additional individuals who will be expected to 
                        enroll because of affiliation with such 
                        previously enrolled groups) will be impaired if 
                        it is required to enroll new employer groups or 
                        individuals.
    ``(b) Notices and Renewal Periods.--
            ``(1) Notice and specification of rates and administrative 
        changes.--
                    ``(A) Notice.--The carrier of an insured Mediplan 
                supplemental policy shall provide for notice, at least 
                30 days before the date of expiration of the policy, of 
                the terms for renewal of the policy. Except with 
                respect to rates and administrative changes, the terms 
                of renewal (including benefits) shall be the same as 
                the terms of issuance.
                    ``(B) Renewal rates same as issuance rates.--The 
                carrier may change the terms for such renewal, but the 
                premium rates charged with respect to such renewal 
                shall be the same as that for a new issue.
            ``(2) Period of renewal.--The period of renewal of each 
        insured Mediplan supplemental policy shall be for a period of 
        not less than 12 months.
    ``(c) Definitions.--In this section (and section 2172):
            ``(1) Carrier.--The term `carrier' means any person that 
        offers a Mediplan supplemental policy, whether through 
        insurance or otherwise, including a licensed insurance company, 
        a prepaid hospital or medical service plan, a health 
        maintenance organization, and a multiple employer welfare 
        arrangement (as defined in section 3(40) of the Employee 
        Retirement Income Security Act of 1974).
            ``(2) Insured mediplan supplemental policy.--The term 
        `insured Mediplan supplemental policy' means any Mediplan 
        supplemental policy provided through insurance, and includes a 
        prepaid hospital or medical service plan, a health maintenance 
        organization, and a multiple employer welfare arrangement (as 
        defined in section 3(40) of the Employee Retirement Income 
        Security Act of 1974).

``SEC. 2175. PROHIBITION OF DUPLICATION.

    ``(a) In General.--
            (1) In general.--It is unlawful for a person to sell or 
        issue to an individual entitled to benefits under this title--
                    ``(A) a health insurance policy with knowledge that 
                the policy duplicates health benefits to which the 
                individual is otherwise entitled under this title 
                (including special benefits as a low-income 
                individual),
                    ``(B) a Mediplan supplemental policy with knowledge 
                that the individual is entitled to benefits under 
                another Mediplan supplemental policy, or
                    ``(C) a health insurance policy (other than a 
                Mediplan supplemental policy) with knowledge that the 
                policy duplicates health benefits to which the 
                individual is otherwise entitled, other than benefits 
                to which the individual is entitled under a requirement 
                of State or Federal law.
            ``(2) Exception.--Paragraph (1) shall not apply with 
        respect to--
                    ``(A) the sale or issuance of a group policy or 
                plan of one or more employers or labor organizations, 
                or of the trustees of a fund established by one or more 
                employers or labor organizations (or combination 
                thereof), for employees or former employees (or 
                combination thereof) or for members or former members 
                (or combination thereof) of the labor organizations,
                    ``(B) the sale or issuance of a policy described in 
                paragraph (1)(A) (other than a Mediplan supplemental 
                policy to an individual entitled to benefits as a low-
                income individual) under which all the benefits are 
                fully payable directly to or on behalf of the 
                individual without regard to other health benefit 
                coverage of the individual but only if there is 
                disclosed in a prominent manner as part of (or together 
                with) the application the applicable statement 
                (specified under subsection (d)) of the extent to which 
                benefits payable under the policy duplicate benefits 
                under this title, or
                    ``(C) the sale or issuance of a policy described in 
                paragraph (1)(C) under which all the benefits are fully 
                payable directly to or on behalf of the individual 
                without regard to other health benefit coverage of the 
                individual.
    ``(b) Additional Prohibition.--Whoever violates subsection (a) 
shall be fined under title 18, United States Code, or imprisoned not 
more than 5 years, or both, and, in addition to or in lieu of such a 
criminal penalty, is subject to a civil money penalty of not to exceed 
$25,000 (or $15,000 in the case of a seller who is not the issuer of 
the policy) for each such prohibited act.
    ``(c) Rule.--A seller (who is not the issuer of a health insurance 
policy) shall not be considered to violate subsection (a) with respect 
to the sale of a Mediplan supplemental policy if the policy is sold in 
compliance with subsection (d).
    ``(d) Disclosure.--
            ``(1) In general.--It is unlawful for a person to issue or 
        sell a Mediplan supplemental policy to an individual entitled 
        to benefits under this title, whether directly, through the 
        mail, or otherwise, unless--
                    ``(A) the person obtains from the individual, as 
                part of the application for the issuance or purchase 
                and on a form described in subparagraph (B), a written 
                statement (in a form specified by the Secretary) signed 
                by the individual stating, to the best of the 
                individual's knowledge, what health insurance policies 
                the individual has, from what source, and whether the 
                individual is a low-income individual, and
                    ``(B) the written statement is accompanied by a 
                written acknowledgment (in a form specified by the 
                Secretary), signed by the seller of the policy, of the 
                request for and receipt of such statement.
            ``(2) Statement.--The statement required by paragraph (1) 
        shall be made on a form that--
                    ``(A) states in substance that an individual 
                entitled to benefits under this title does not need 
                more than one Mediplan supplemental policy,
                    ``(B) states in substance that low-income 
                individuals usually do not need a Mediplan supplemental 
                policy and that benefits and premiums under any such 
                policy shall be suspended upon request of the 
                policyholder during the period (of not longer than 24 
                months) of entitlement to benefits under this title as 
                a low-income individual and may be reinstated upon no 
                longer being a low-income individual, and
                    ``(C) states that counseling services may be 
                available in the State to provide advice concerning the 
                purchase of Mediplan supplemental policies and may 
                provide the telephone number for such services.
            ``(3) Need for statement.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), if the statement required by 
                paragraph (2) is not obtained or indicates that the 
                individual has another Mediplan supplemental policy or 
                indicates that the individual is entitled to benefits 
                under this title as a low-income individual, the sale 
                of a Mediplan supplemental policy shall be considered 
                to be a violation of subsection (a).
                    ``(B) Exception.--Subparagraph (A) shall not apply 
                in the case of an individual who has a Mediplan 
                supplemental policy, if the individual indicates in 
                writing, as part of the application for purchase, that 
                the policy being purchased replaces such other policy 
                and indicates an intent to terminate the policy being 
                replaced when the new policy becomes effective and the 
                issuer or seller certifies in writing that such policy 
                will not, to the best of the issuer's or seller's 
                knowledge, duplicate coverage (taking into account any 
                such replacement).
                    ``(C) Penalty.--Whoever issues or sells a Mediplan 
                supplemental policy in violation of this paragraph 
                shall be fined under title 18, United States Code, or 
                imprisoned not more than 5 years, or both, and, in 
                addition to or in lieu of such a criminal penalty, is 
                subject to a civil money penalty of not to exceed 
                $25,000 (or $15,000 in the case of a seller who is not 
                the issuer of the policy) for each such violation.

``SEC. 2176. ADDITIONAL PROHIBITIONS.

    ``(a) In General.--Whoever knowingly and willfully makes or causes 
to be made or induces or seeks to induce the making of any false 
statement or representation of a material fact with respect to 
compliance of any policy with the standards and requirements set forth 
in section 2173 or in regulations promulgated pursuant to such section 
shall be fined under title 18, United States Code, or imprisoned not 
more than 5 years, or both, and, in addition to or in lieu of such a 
criminal penalty, is subject to a civil money penalty of not to exceed 
$5,000 for each such prohibited act.
    ``(b) False Representation.--Whoever falsely assumes or pretends to 
be acting, or misrepresents in any way that he is acting, under the 
authority of or in association with, the program of health insurance 
established under this title, or any Federal agency, for the purpose of 
selling or attempting to sell insurance, or in such pretended character 
demands, or obtains money, paper, documents, or anything of value, 
shall be fined under title 18, United States Code, or imprisoned not 
more than 5 years, or both, and, in addition to or in lieu of such a 
criminal penalty, is subject to a civil money penalty of not to exceed 
$5,000 for each such prohibited act.
    ``(c) Application of Civil Money Penalty Procedures.-- The 
provisions of section 1128A (other than the first sentence of 
subsection (a) and other than subsection (b)) shall apply to a civil 
money penalty under this part in the same manner as such provisions 
apply to a penalty or proceeding under section 1128A(a).

``SEC. 2177. INFORMATION DISCLOSURE.

    ``(a) In General.--The Secretary shall provide, to all individuals 
entitled to benefits under this title such information as will permit 
such individuals to evaluate the value of Mediplan supplemental 
policies to them and the relationship of any such policies to benefits 
provided under this title.
    ``(b) Information on Prohibitions.--The Secretary shall--
            ``(1) inform all individuals entitled to benefits under 
        this title of--
                    ``(A) the actions and practices that are subject to 
                sanctions under this part and
                    ``(B) the manner in which they may report any such 
                action or practice to an appropriate official of the 
                Department of Health and Human Services (or to an 
                appropriate State official), and
            ``(2) publish the toll-free number for individuals to 
        report suspected violations of the provision of this part.
    ``(c) Counseling Numbers.--The Secretary shall provide individuals 
entitled to benefits under this title with a listing of the addresses 
and telephone numbers of State and Federal agencies and offices that 
provide information and assistance to individuals with respect to the 
selection of Mediplan supplemental policies.

``SEC. 2178. LIMITATIONS ON SALES COMMISSIONS.

    ``(a) In General.--It is unlawful for a person who provides for a 
commission or other compensation to an agent or other representatives 
with respect to the sale of a Mediplan supplemental policy (or 
certificate)--
            ``(1) to provide for a first year commission or other first 
        year compensation that exceeds 200 percent of the commission or 
        other compensation for the selling or servicing of the policy 
        or certificate in a second or subsequent year, or
            ``(2) to provide for compensation with respect to 
        replacement of such a policy or certificate that is greater 
        than the compensation that would apply to the renewal of the 
        policy or certificate.
    ``(b) Penalty.--Whoever violates subsection (a) shall be fined 
under title 18, United States Code, or imprisoned not more than 5 
years, or both, and, in addition to or in lieu of such a criminal 
penalty, is subject to a civil money penalty of not to exceed $25,000 
for each such prohibited act.
    ``(c) Definition.--In this section, the term `compensation' 
includes pecuniary and nonpecuniary compensation of any kind relating 
to the sale or renewal of a policy or certificate and specifically 
includes bonuses, gifts, prizes, awards, and finders' fees.

``SEC. 2179. DEFINITIONS.

    ``In this part:
            ``(1) Group.--The term `group' means 2 or more employees of 
        the same employer who normally perform on a monthly basis at 
        least 17\1/2\ hours of service per week for that employer.
            ``(2) Health maintenance organization.--The term `health 
        maintenance organization' has the meaning given the term 
        `eligible organization' in section 1876(b).
            ``(3) Mediplan supplemental policy.--The term `Mediplan 
        supplemental policy' is a health insurance policy or other 
        health benefit plan offered by a private entity to individuals 
        who are entitled to have payment made under this title, which 
        provides reimbursement for expenses incurred for services and 
        items for which payment may be made under this title but which 
        are not reimbursable by reason of the application of 
        deductibles, coinsurance amounts, or other limitations imposed 
        pursuant to this title; but does not include--
                    ``(A) any such policy or plan of the trustees of a 
                fund established by one or more employers or labor 
                organizations (or combination thereof) if the policy or 
                plan offers benefits as a direct service organization 
                under section 1833, or
                    ``(B) a policy or plan of a health maintenance 
                organization which offers benefits under this title 
                under section 2162(d).
        For purposes of this title, the term `policy' includes a 
        certificate issued under such policy.
            ``(4) State.--The term `State' means the 50 States and the 
        District of Columbia.

                        ``Part G--State Opt Out

``SEC. 2181. ELECTION.

    ``(a) In General.--A State may elect, in accordance with this part, 
to have health care benefits made available to residents of the State 
under a State alternative health care program under this part instead 
of under the other provisions of this title. Such an election shall not 
be effective unless--
            ``(1) the State submits to the Secretary an application for 
        election, in a form and manner specified by the Secretary, and
            ``(2) the Secretary determines that the proposed health 
        care program meets the requirements specified in sections 2182 
        and 2183.
    ``(b) No Application of Election on Out-of-State Residents.--An 
election of a State under this part shall not affect the entitlement of 
individuals who are not residents of the State to receive benefits 
under this title for services furnished in the State on the same terms 
and conditions as though such an election had not been made.

``SEC. 2182. REQUIREMENTS FOR STATE ALTERNATIVE HEALTH CARE PROGRAMS.

    ``The requirements, with respect to a State alternative health care 
program are as follows:
            ``(1) Eligibility.--Each individual who is a resident of 
        the State (as determined by the Secretary) is entitled to 
        benefits under the program.
            ``(2) Enrollment and mediplan cards.--The program provides 
        for enrollment of eligible individuals, and the issuance of 
        Mediplan cards, in a manner consistent with section 2102.
            ``(3) Scope of benefits.--
                    ``(A) In general.--The scope of benefits under the 
                program shall not be less than the scope of benefits 
                specified in section 2121 (including additional 
                services for children, pregnancy-related services and 
                special provisions for lower-income individuals).
                    ``(B) Exclusions.--The exclusions from benefits 
                shall be no more restrictive than the exclusions 
                specified in section 2122. Pursuant to section 
                2122(b)(2), payments under the program shall be 
                secondary to payments under the medicare program.
                    ``(C) Out-of-state benefits.--The program shall 
                provide for coverage of medically necessary services 
                furnished outside the State, except in such cases as 
                the Secretary may specify. In specifying such cases, 
                the Secretary shall take into account the requirements 
                of health maintenance organization for coverage of 
                services outside the organization's service area. Any 
                such out-of-State coverage shall be provided in a 
                manner consistent with the provision of benefits under 
                this title to individuals who are not residents of the 
                State.
            ``(4) Limitation on cost-sharing.--The program does not 
        impose cost-sharing in excess of the cost-sharing that would be 
        permitted under section 2141.
            ``(5) Entitlement verification system.--The program 
        provides for an entitlement verification system that meets the 
        requirements of section 2151(c).
            ``(6) Uniform claims and electronic data set.--The program 
        provides for use of uniform claims and electronic data set in 
        accordance with the standards established under section 
        2152(c).
            ``(7) Electronic medical records and reporting; uniform 
        hospital cost reporting.--The program requires hospitals in the 
        State to meet the standards for electronic medical records and 
        uniform hospital cost reporting in accordance with sections 
        2153 and 2154.
            ``(8) Reporting system.--The program provides for such 
        reporting of information on the program as the Secretary may 
        require in order to assure that the program meets the 
        requirements of this section.
            ``(9) Maintenance of effort payments.--The State is 
        providing for payment to the Mediplan Trust Fund in accordance 
        with section 2163.
            ``(10) Use of funds and savings.--The State will comply 
        with the requirements of section 2185(b).

``SEC. 2183. CONTROL OF AGGREGATE EXPENDITURES.

    ``(a) Assurances Required.--
            ``(1) In general.--A State election under this part may not 
        be approved until the Secretary has been provided satisfactory 
        assurances that under the program, during a 3-year period (the 
        first such period beginning with the first month in which this 
        section applies to that program in the State) the aggregate 
        expenditures for required health care services under the 
        program will not exceed the applicable total limit specified in 
        paragraph (2).
            ``(2) Applicable total limit.--The applicable total limit 
        specified in this paragraph is the total of the maximum amount 
        of payments that would be payable in the State for the required 
        health care services under this title if the State election 
        were not in effect.
            ``(3) Special rule for expenditures for hmos.--In 
        determining aggregate expenditures for purposes of paragraph 
        (1), the Secretary shall exclude expenditures for services of 
        staff or group model health maintenance organizations if the 
        State program provides that such organizations may negotiate 
        directly with providers of services covered under the program 
        with respect to the organization's rate of payment for such 
        services and, in determining the applicable limits under 
        paragraph (2), the Secretary shall exclude payments for 
        services of such organizations.
    ``(b) Annual Determination by Secretary.--The Secretary shall 
annually determine whether a State program met the assurances required 
under subsection (a) for the most recent 3-year period for which the 
State election was in effect.
    ``(c) Treatment of States Failing to Control Aggregate 
Expenditures.--
            ``(1) In general.--The Secretary shall terminate approval 
        of a State election under this part or impose a sanction 
        described in paragraph (2) on a State if the Secretary 
        determines that, with respect to a State program under this 
        part for a 3-year period the aggregate expenditures for 
        required health care services under the program exceeded the 
        applicable total limit specified in subsection (a)(2).
            ``(2) Sanctions.--The sanction described in this paragraph 
        is a reduction in the aggregate amount otherwise payable to the 
        State under section 2185 for the following year (or for the 
        following 3-year period, if the Secretary determines that a 
        reduction for such period is appropriate in the case of a 
        State) in an amount equal to the amount by which the aggregate 
        expenditures for the preceding 3-year period under the program 
        exceeded the applicable total limit.
            ``(3) Notice.--The Secretary may not impose any sanction 
        against a state under paragraph (2) unless the Secretary has 
        provided the State with notice of the Secretary's determination 
        under paragraph (1) and intent to impose the sanction under 
        paragraph (2).

``SEC. 2184. TERMINATION OF APPROVAL OF STATE ELECTION.

    ``(a) Process Requirements.--
            ``(1) Notice.--The Secretary may terminate the approval of 
        a State's election under this part only after the expiration of 
        a 90-day period beginning on the date the Secretary informs the 
        State of the Secretary's intention to terminate such approval, 
        unless, during such 90-day period, the State requests a hearing 
        with the Secretary.
            ``(2) Hearing.--If the State requests a hearing during the 
        90-day period described in paragraph (1), the Secretary shall 
        conduct a hearing during which the State may present evidence 
        showing that the Secretary should not terminate the approval of 
        the election. If the Secretary decides to reject such evidence, 
        the Secretary shall terminate the approval of the State's 
        election beginning with the first day of the first month that 
        begins after the Secretary's decision.
            ``(3) Judicial review prohibited.--There shall be no 
        administrative or judicial review of a decision by the 
        Secretary to terminate the approval of a State election under 
        this subsection.
    ``(b) Effect of Termination on Payment Rates Applicable to Services 
in State.--
            ``(1) In general.--If the Secretary terminates the approval 
        of a State election under this section, the maximum payment 
        rates applicable to required health services shall be the 
        maximum payment rates otherwise applicable to the services 
        subject to the adjustment described in paragraph (2).
            ``(2) Recapture of excess spending.--The Secretary shall 
        reduce the maximum payment rates applicable under this title to 
        required health services by such factor as the Secretary 
        determines necessary to decrease the amount of aggregate 
        expenditures that would otherwise be made for services provided 
        in the State by the amount by which the aggregate expenditures 
        for the preceding 3-year period under the program exceeded the 
        applicable total limit specified in section 2183(a)(2).

``SEC. 2185. PAYMENTS TO STATES.

    ``(a) In General.--In the case of a State with a State alternative 
health care program approved under this part, the Secretary shall 
provide for payment to the State, on a monthly basis, of such amounts 
as the Secretary determines to be equivalent to the payments that would 
have been made under this title with respect to residents in the State 
if the program had not been so approved. Such payments shall not 
include any amount attributable to amounts paid under the medicare 
program under title XVIII for residents of the State.
    ``(b) Use of Funds and Savings.--
            ``(1) Use of funds.--A State alternative health care 
        program may only use funds provided under subsection (a) for 
        payment of covered benefits, for the administration of the 
        program under this part, and, if applicable, for the expansion 
        of benefits or reduction of cost-sharing under paragraph (2).
            ``(2) Application of savings.--In the case of a State for 
        which the aggregate expenditures (described in section 2183) 
        for required health services are less than the applicable total 
        limit specified in section 2183(a)(2), the State shall provide 
        for such increase in the scope of benefits (which may include a 
        reduction in cost-sharing) as will assure the expenditure of 
        funds consistent with paragraph (1).

``SEC. 2186. NO IMPACT ON MEDICARE BENEFITS.

    ``Nothing in this part shall be construed as affecting the 
entitlement of individuals to medicare benefits under title XVIII.''.
    (b) Effective Date for Benefits.--Title XXI of the Social Security 
Act shall apply to items and services furnished on or after January 1, 
1995.
    (c) Excise Tax on Premiums Received on Mediplan Supplemental 
Policies Which Do Not Meet Certain Requirements.--
            (1) In general.--Chapter 47 of the Internal Revenue Code of 
        1986 (relating to taxes on group health plans) is amended by 
        adding at the end thereof the following new section:

``SEC. 5000A. FAILURE TO SATISFY CERTAIN STANDARDS FOR MEDIPLAN 
              SUPPLEMENTAL POLICIES.

    ``(a) Imposition of Tax.--
            ``(1) General rule.--There is hereby imposed a tax on any 
        nonqualified Mediplan supplemental policy.
            ``(2) Nonqualified mediplan supplemental policy defined.--
        For purposes of this section, the term `nonqualified Mediplan 
        supplemental policy' means any Mediplan supplemental policy 
        that--
                    ``(A) is not certified under section 21711 of the 
                Social Security Act, or
                    ``(B) the Secretary of Health and Human Services 
                determines is providing coverage in violation of 
                section 2171(a) of such Act.
    ``(b) Amount of Tax.--
            ``(1) In general.--The amount of tax imposed by subsection 
        (a) shall be equal to--
                    ``(A) in the case of an insured Mediplan 
                supplemental policy, 50 percent of the gross premiums 
                received by the issuer which are attributable to the 
                period during which the policy is a nonqualified 
                Mediplan supplemental policy, and
                    ``(B) in the case of a self-insured Mediplan 
                supplemental policy, 50 percent of the expenditures 
                under such policy during the period that the policy is 
                a nonqualified Mediplan supplemental policy.
            ``(2) Gross premiums.--For purposes of paragraph (1)(A), 
        gross premiums shall include any consideration received with 
        respect to any insured Mediplan supplemental policy.
            ``(3) Controlled groups.--For purposes of paragraph (1)--
                    ``(A) Controlled group of corporations.--All 
                corporations which are members of the same controlled 
                group of corporations shall be treated as 1 person. For 
                purposes of the preceding sentence, the term 
                `controlled group of corporations' has the meaning 
                given to such term by section 1563(a), except that--
                            ``(i) `more than 50 percent' shall be 
                        substituted for `at least 80 percent' each 
                        place it appears in section 1563(a)(1), and
                            ``(ii) the determination shall be made 
                        without regard to subsections (a)(4) and 
                        (e)(3)(C) of section 1563.
                    ``(B) Partnerships, proprietorships, etc., which 
                are under common control.--Under regulations prescribed 
                by the Secretary, all trades or business (whether or 
                not incorporated) which are under common control shall 
                be treated as 1 person. The regulations prescribed 
                under this subparagraph shall be based on principles 
                similar to the principles which apply in the case of 
                subparagraph (A).
    ``(c) Liability for Tax.--
            ``(1) Insured policy.--In the case of an insured Mediplan 
        supplemental policy, the issuer of the insurance or subscriber 
        contract under which such policy is provided shall be liable 
        for the tax imposed by this section.
            ``(2) Self-insured policy.--In the case of a self-insured 
        policy--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the employer maintaining such policy 
                shall be liable for the tax imposed by this section.
                    ``(B) Multiemployer policies, etc.--In the case of 
                a multiemployer policy or any other policy not 
                maintained by an employer, the issuer of the policy 
                shall be liable for the tax imposed by this section.
    ``(d) Incorporation of Definitions.--For purposes of this section, 
the terms `Mediplan supplemental policy', `insured Mediplan 
supplemental policy', and `self-insured Mediplan supplemental policy' 
have the meanings given such terms in section 2175 of the Social 
Security Act.''.
            (2) Nondeductibility of tax.--Subsection (a) of section 275 
        of such Code (relating to nondeductibility of certain taxes) is 
        amended by adding at the end thereof the following new 
        paragraph:
            ``(7) Taxes imposed by section 5000A (failure to satisfy 
        certain standards for Mediplan supplemental policies).''
            (3) Clerical amendments.--
                    (A) So much of chapter 47 of such Code as precedes 
                subsection (a) of section 5000 is amended to read as 
                follows:

          ``CHAPTER 47--TAXES RELATING TO HEALTH BENEFIT PLANS

                              ``Sec. 5000. Contributions to 
                                        nonconforming large group 
                                        health plans.
                              ``Sec. 5000A. Failure to satisfy certain 
                                        standards for Mediplan 
                                        supplemental policies.

``SEC. 5000. CONTRIBUTIONS TO NONCONFORMING LARGE GROUP HEALTH PLANS.''

                    (B) The table of chapters for subtitle D of such 
                Code is amended by striking the item relating to 
                chapter 47 and inserting the following new item:

                              ``Chapter 47. Taxes relating to health 
                                        benefit plans.''

                       TITLE II--COST CONTAINMENT

SEC. 201. NATIONAL MEDIPLAN EXPENDITURE BUDGET.

    (a) Establishment.--
            (1) In general.--For each calendar year (beginning with 
        1995), there is established a national Mediplan expenditure 
        budget (in the amount specified under paragraph (2)).
            (2) Amount.--
                    (A) 1995.--The total amount of the national 
                Mediplan expenditure budgets for 1995 is equal to the 
                Mediplan budget baseline (determined under subsection 
                (b) for 1994) multiplied by the applicable adjustment 
                factor (specified under subsection (c)) for 1995.
                    (B) Subsequent years.--The total amount of such 
                budget for each year after 1995 is equal to the budget 
                determined under this paragraph for the previous year 
                multiplied by the applicable adjustment factor 
                (specified under subsection (c)) for the year involved.
            (3) Publication.--The Secretary of Health and Human 
        Services shall publish in the Federal Register and report to 
        the Congress, by not later than April 1 before each year, the 
        amount of the national Mediplan expenditure budget for the 
        year.
    (b) Mediplan Budget Baseline.--The Secretary shall compute a 
Mediplan budget baseline under this subsection for 1994 as follows:
            (1) 1993 actual expenditures.--The Secretary shall 
        determine (on the basis of the best data available) the amount 
        of the aggregate Mediplan expenditures (as defined in 
        subsection (d)(1)) during 1993.
            (2) Projection for 1994.--The Secretary shall increase such 
        amount by the Secretary's estimate of the percentage increase 
        in the aggregate Mediplan expenditures between the midpoint of 
        1993 and the midpoint of 1994.
    (c) Applicable Adjustment Factor.--The applicable adjustment factor 
under this subsection for each year is 1 plus the sum (expressed as a 
fraction) of--
            (1) the average annual percentage increase in the gross 
        domestic product (in current dollars, as published by the 
        Secretary of Commerce) during the 5-year period ending with the 
        second previous year; plus
            (2)(A) for 1995, 3.5 percentage points,
            (B) for 1996, 2.5 percentage points,
            (C) for 1997, 1.5 percentage points,
            (D) for 1998, 0.5 percentage point, and
            (E) for each year thereafter, 0 percentage points.
    (d) Aggregate Mediplan Expenditures Defined.--In this Act, the term 
``aggregate Mediplan expenditures'' means, with respect to health care 
services or a class of services, expenditures made under the medicare 
program or under Mediplan with respect to the provision of such 
services or class of services, and also includes receipts of providers 
with respect to amounts payable as deductibles, coinsurance, or other 
amounts for which the beneficiary is liable with respect to items and 
services covered under either such program provided to a beneficiary, 
and including payments made under a contract under section 1833(a)(1) 
or section 1876 of the Social Security Act, or comparable provisions of 
title XXI of such Act (other than the portion of such payments that is 
attributable to administrative costs).

SEC. 202. CLASSES OF HEALTH CARE SERVICES.

    (a) Establishment of Classes.--
            (1) In general.--
                    (A) Specified services.--In the case of items and 
                services specified in a subparagraph under paragraph 
                (2), all of the items and services described in that 
                subparagraph shall be considered to be a ``separate'' 
                class of health care services.
                    (B) Overlapping services.--Except as the Secretary 
                may provide, items and services specified in a 
                subparagraph of paragraph (2) shall be considered to be 
                excluded from the subsequent subparagraphs of that 
                paragraph.
            (2) Specified health care services.--The items and services 
        specified in this paragraph are as follows:
                    (A) Inpatient hospital services, other than mental 
                health services.
                    (B) Outpatient hospital services and ambulatory 
                facility services (including renal dialysis facility 
                services), other than mental health services.
                    (C) Diagnostic testing services (including clinical 
                laboratory services and x-ray services).
                    (D) Physicians' services and other professional 
                medical services, other than mental health services.
                    (E) Home health services and hospice care.
                    (F) Rehabilitation services, such as physical 
                therapy, occupational and speech therapy.
                    (G) Durable medical equipment and supplies.
                    (H) Prescription drugs and biologicals and insulin.
                    (I) Nursing facility services, including skilled 
                nursing facility services and intermediate care 
                facility services, other than mental health services.
                    (J) Mental health services.
                    (K) Other covered services.
    (b) Publication.--
            (1) In general.--The Secretary shall publish--
                    (A) by not later than April 1, 1994, proposed 
                regulations defining the health care services and 
                establishing the classes of services under this 
                section, and
                    (B) by not later than June 1, 1994, final 
                regulations defining the health care services and 
                establishing such classes.
            (2) Items included in regulations.--In such regulations, 
        the Secretary shall define--
                    (A) the class or classes to be established under 
                subsection (a)(1),
                    (B) the services to be included within each class, 
                and
                    (C) the methods and sources of data for computing, 
                for purposes of this title, aggregate Mediplan 
                expenditures for services within the class.
            (3) Changes.--
                    (A) No changes authorized.--After the Secretary has 
                established classes of services under paragraph (1)(B), 
                the Secretary may not change such classes (or the 
                services included in such classes), except in the case 
                of services not previously classified. Any such 
                services not previously classified shall be classified 
                within one of the classes previously established.
                    (B) Recommended changes.--If the Secretary 
                determines that a change in the classification 
                established under this section may be appropriate, the 
                Secretary shall submit to the Congress a report 
                proposing such change. The Secretary shall include in 
                the report an explanation of--
                            (i) the rationale for such change, and
                            (ii) the impact of such change on the total 
                        aggregate Mediplan expenditures permitted for 
                        classes of services that would be affected by 
                        the change.
            (4) Commission reports.--
                    (A) Initial reports.--With respect to the 
                establishment of classes of services under this 
                section, each applicable Commission (as defined in 
                section 208(1))--
                            (i) by not later than March 1, 1994, shall 
                        report its recommendations to the Secretary and 
                        Congress concerning such classes, and
                            (ii) by not later than May 1, 1994, shall 
                        report to the Secretary and the Congress its 
                        comments concerning the classification proposed 
                        by the Secretary under paragraph (1)(A).
                    (B) Periodic reports.--Each applicable Commission 
                shall periodically report to Congress on changes in the 
                system of classification under this section that should 
                be made to promote the more efficient provision of 
                medically appropriate health care services.

SEC. 203. ALLOCATION OF HEALTH BUDGET BY CLASS OF SERVICE.

    (a) Allocation.--
            (1) In general.--The Secretary shall allocate the national 
        Mediplan expenditure budget under section 201 for a year among 
        classes of services specified under section 202.
            (2) Proportional allocation based on historical projected 
        expenditures.--The percent of the budget allocated to each 
        class for a year shall be equal to the quotient (expressed as a 
        percentage) of--
                    (A) the historical projected Mediplan expenditures 
                for the class for the year (as determined under 
                subsection (b)(1)), divided by
                    (B) the sum of such historical projected Mediplan 
                expenditures for all the classes for the year.
            (3) Publication.--
                    (A) In general.--The Secretary shall, in 
                conjunction with the publication of budget under 
                section 201(a)(3) for a year and by not later than 
                April 1 before the year, publish in the Federal 
                Register and report to the Congress the allocation of 
                the budget among the classes of services under this 
                subsection.
                    (B) Exception for 1995.--For 1995, the Secretary 
                shall publish and report the allocation of the budget 
                among the classes of services under this subsection not 
                later than August 1, 1994.
    (b) Historical Projected Expenditures.--
            (1) Determination.--For purposes of subsection (a)--
                    (A) For 1994.--The historical projected Mediplan 
                expenditures for a class of services for 1994 is equal 
                to the portion of the amount of aggregate Mediplan 
                expenditures during 1993 (as determined under section 
                201(b)(1)) which is attributable to the class of 
                services, multiplied by the trend factor (described in 
                paragraph (2)) for the class for 1994.
                    (B) Subsequent years.--The historical projected 
                Mediplan expenditures for a class of services for a 
                year after 1994 is equal to the amount of the 
                allocation for the class under subsection (a)(2) for 
                the preceding year multiplied by the trend factor 
                (described in subparagraph (B)) for the class for the 
                year involved.
            (2) Trend factor.--In paragraph (1), the ``trend factor'', 
        for a class of services, is 1 plus the average annual rate of 
        increase in aggregate Mediplan expenditures for the class of 
        services during the 5-year period ending with 1993.
            (3) Publication of trend factors.--The Secretary shall 
        publish, by not later than August 1, 1994, the trend factors 
        for the different classes of services.
    (c) Review and Changes in Allocation.--
            (1) In general.--
                    (A) No administrative authority to change.--Except 
                as specifically provided by law enacted after the 
                enactment of this Act, the Secretary has no authority 
                to change the allocation or trend factors from the 
                allocation and trend factors provided under this 
                section.
                    (B) Recommended changes.--If the Secretary 
                determines that a change in the allocation of the 
                budget among classes is appropriate, the Secretary 
                shall submit to the Congress a report proposing such 
                change. The Secretary shall include in the report an 
                explanation of--
                            (i) the rationale for such change, and
                            (ii) the impact of such change on the total 
                        aggregate Mediplan expenditures permitted for 
                        classes of services that would be affected by 
                        the change.
            (2) Commission review.--Each applicable Commission shall 
        annually review and report to Congress, in its report submitted 
        under section 202(b)(4), on the effect of the trend factors 
        used in the allocation of the budget among classes of services. 
        Such report shall include such recommendations for appropriate 
        adjustments in the trend factors as the applicable Commission 
        considers appropriate to properly take into account at least--
                    (A) changes in health care technology,
                    (B) changes in the patterns and practices relating 
                to health care delivery found to be appropriate,
                    (C) changes in the distribution of health care 
                services, and
                    (D) the special health care needs of underserved 
                rural and inner city populations.

SEC. 204. NATIONAL HEALTH EXPENDITURES REPORTING SYSTEM.

    (a) In General.--The Secretary shall establish a national health 
expenditures reporting system (in this section referred to as the 
``system'') for purposes of--
            (1) establishing the national health expenditures budget,
            (2) allocating the health budgets among classes of 
        services,
            (3) determining payment rates, and
            (4) monitoring expenditures in States which have elections 
        in effect under part G.
    (b) Information Reporting.--
            (1) By provider.--Under the system, providers of health 
        care services shall report (beginning not later than January 1, 
        1995) such information relating to the provision of health care 
        services (including the volume and receipts for such services) 
        in such form and manner (including the use of electronic 
        transmission), by such classification, and at such periodic 
        intervals, as the Secretary shall specify in regulation.
            (2) Use of reporting mechanisms.--To the maximum extent 
        practicable and appropriate, reporting under such system shall 
        be done through reporting mechanisms (such as uniform hospital 
        reports provided under section 2255 of the Social Security Act) 
        and using data bases otherwise in use.
            (3) Use of surveys.--The Secretary may, where appropriate, 
        provide for the collection of information under the system 
        through surveys of a sample of health care providers or with 
        respect to a sample of information with respect to such 
        providers.
            (4) Confidentiality.--Information gathered pursuant to the 
        authority provided under this section shall not be disclosed in 
        a manner that identifies individual providers of services.
            (5) Transition.--Before January 1, 1995, for purposes of 
        this title, the Secretary may use such other data collection 
        and estimation techniques as may be appropriate for purposes 
        described in subsection (a).
    (c) Enforcement.--If a provider of health services is required, 
under the system under this section, to report information and refuses, 
after being requested by the Secretary, to provide the information 
required, or deliberately provides information that is false, the 
Secretary may impose a civil money penalty of not to exceed $10,000 for 
each such refusal or provision of false information. The provisions of 
section 1128A of the Social Security Act (other than subsections (a) 
and (b)) shall apply to civil money penalties under the previous 
sentence in the same manner as such provisions apply to a penalty or 
proceeding under section 1128A(a) of such Act.
    (d) Inclusion of Health Maintenance Organizations.--In this 
section, the term ``provider of health care services'' includes health 
maintenance organizations.

SEC. 205. CONFORMING MEDICARE PAYMENT RATES TO MEDIPLAN HEALTH 
              EXPENDITURE ALLOCATIONS; TRANSITION.

    (a) In General.--Notwithstanding any other provision of law, the 
Secretary shall substitute for the payment rate or allowance (or, in 
the absence of such a rate, payment amount) otherwise applied under the 
medicare program (and any maximum charge limits or payment limits 
imposed under such program) for any health care service in a class of 
services the amount specified by the Secretary under subsection (b) for 
the class for the year involved.
    (b) Amount.--
            (1) In general.--At the same time as the Secretary 
        establishes payment rates under section 2141 of the Social 
        Security Act, the Secretary shall compute and publish, for each 
        class of services for each year, an amount under this 
        subsection determined as follows:
                    (A) First year.--During the first year in which 
                benefits are available under title XXI of the Social 
                Security Act, the amount shall be the sum of--
                            (i) 20 percent of the payment amount 
                        established under such title for the class of 
                        services, and
                            (ii) 80 percent of the amount established 
                        under title XVIII of such Act.
                    (B) Second year.--During the second year in which 
                benefits are available under title XXI of the Social 
                Security Act, the amount shall be the sum of--
                            (i) 40 percent of the payment amount 
                        established under such title for the class of 
                        services, and
                            (ii) 60 percent of the amount established 
                        under title XVIII of such Act.
                    (C) Third year.--During the third year in which 
                benefits are available under title XXI of the Social 
                Security Act, the amount shall be the sum of--
                            (i) 60 percent of the payment amount 
                        established under such title for the class of 
                        services, and
                            (ii) 40 percent of the amount established 
                        under title XVIII of such Act.
                    (D) Fourth year.--During the fourth year in which 
                benefits are available under title XXI of the Social 
                Security Act, the amount shall be the sum of--
                            (i) 80 percent of the payment amount 
                        established under such title for the class of 
                        services, and
                            (ii) 20 percent of the amount established 
                        under title XVIII of such Act.
                    (E) Fifth and subsequent years.--During the fifth 
                year in which benefits are available under title XXI of 
                the Social Security Act, and any subsequent year the 
                amount shall be the 100 percent of the payment amount 
                established under such title for the class of services.
            (2) Indirect application to health maintenance 
        organizations.--Nothing in this subsection shall be construed 
        as affecting the payment of amounts to health maintenance 
        organizations under the medicare program under a risk-sharing 
        contract under section 1876 of the Social Security Act. 
        However, adjustments in payment rates under paragraph (1) may 
        affect the computation of the average adjusted per capita cost 
        under such section.
    (c) Publications.--In publishing payment rates under the medicare 
program, the Secretary shall take into account the adjustment in rates 
under this section.

SEC. 206. ADJUSTMENTS TO MEDICARE PAYMENTS FOR GRADUATE MEDICAL 
              EDUCATION.

    (a) Determination of Full-Time-Equivalent Residents During Initial 
Residency Period.--
            (1) Emphasis on primary care.--Paragraph (4)(C)(ii) of 
        section 1886(h) of the Social Security Act (42 U.S.C. 
        1395ww(h)) is amended by striking ``is 1.00,'' and inserting 
        the following: ``is--
                                    ``(I) 1.1, in the case of a 
                                resident who is a primary care resident 
                                (as defined in paragraph (5)(H)),
                                    ``(II) 1.0, in the case of a 
                                resident who is not a primary care 
                                resident and who specializes in 
                                internal medicine or pediatrics,
                                    ``(III) .9, in the case of a 
                                resident who is not described in 
                                subclause (I) or (II) and who is in the 
                                initial 3 years of the residency 
                                period, or
                                    ``(IV) .8, in the case of a 
                                resident not described in subclause 
                                (I), (II), or (III),''.
            (2) Primary care resident defined.--Paragraph (5) of such 
        section is amended--
                    (A) by redesignating subparagraph (H) as 
                subparagraph (I), and
                    (B) by inserting after subparagraph (G) the 
                following new subparagraph:
                    ``(H) Primary care resident.--The term `primary 
                care resident' means (in accordance with criteria 
                established by the Secretary) a resident being trained 
                in a distinct program of family practice medicine, 
                general practice, general internal medicine, or general 
                pediatrics.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to cost reporting periods beginning on or after October 1, 1993.

SEC. 207. DEFINITIONS.

    In this title:
            (1) Applicable commission.--The term ``applicable 
        Commission'' means--
                    (A) with respect to services included in a class of 
                services furnished by a hospital, other institutional 
                provider, or home health provider, the Prospective 
                Payment Assessment Commission, and
                    (B) with respect to other health care services, the 
                Physician Payment Review Commission.
            (2) Class of services.--The term ``class'' means, with 
        respect to health care services, a class established under 
        section 202.
            (3) Health care services.--The term ``health care 
        services'' means the items and services described in section 
        202(a)(2).
            (4) Health maintenance organization.--The term ``health 
        maintenance organization'' means an eligible organization with 
        a contract under section 1876 of the Social Security Act or a 
        qualified health maintenance organization (as defined in 
        section 1310(d) of the Public Health Service Act).
            (5) Medicare program; medicare beneficiary.--(A) The term 
        ``medicare program'' means the programs established under parts 
        A and B of title XVIII of the Social Security Act.
            (B) The term ``medicare beneficiary'' means an individual 
        entitled to benefits under part A or B, or both, of the 
        medicare program.
            (6) Medicaid program.--The term ``medicaid program'' means 
        any State plan approved under title XIX of the Social Security 
        Act and includes a State program operating under a waiver under 
        section 1115 of such Act.
            (7) National mediplan expenditure budget.--The term 
        ``national Mediplan expenditure budget'' means the budget 
        established under section 201.
            (8) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (9) State.--The term ``State'' means the 50 States and the 
        District of Columbia.
            (10) United states.--The term ``United States'' means the 
        50 States and the District of Columbia.

                    TITLE III--FINANCING PROVISIONS

SEC. 301. INCOME TAXES FOR MEDIPLAN HEALTH CARE.

    (a) In General.--Subchapter A of chapter 1 of the Internal Revenue 
Code of 1986 is amended by adding at the end thereof the following new 
part:

           ``PART VIII--INCOME TAXES FOR MEDIPLAN HEALTH CARE

                              ``Sec. 59B. Tax on individuals.
                              ``Sec. 59C. Tax on gross receipts of 
                                        health service providers from 
                                        providing covered benefits.

``SEC. 59B. TAX ON INDIVIDUALS.

    ``(a) Imposition of Tax.--In the case of an individual, there is 
hereby imposed (in addition to other taxes) for each taxable year on 
the modified gross income of the taxpayer a tax equal to the Mediplan 
health care premium determined under subsection (b) for such year.
    ``(b) Mediplan Health Care Premium.--The Mediplan health care 
premium for the taxable year shall be equal the lesser of--
            ``(1) $1,500 ($3,000 in the case of a joint return), or
            ``(2) 12.5 percent of the excess (if any) of the modified 
        gross income of the taxpayer over $8,000 ($16,000 in the case 
        of a joint return).
    ``(c) Modified Gross Income.--For purposes of this section, the 
term `modified gross income' means the adjusted gross income of the 
taxpayer for the taxable year determined--
            ``(1) without regard to paragraphs (6), (7), and (11) of 
        section 62(a) and without regard to sections 911, 931, and 933, 
        and
            ``(2) increased by--
                    ``(A) the amount of interest received or accrued by 
                the taxpayer during the taxable year which is exempt 
                from tax,
                    ``(B) the amount of social security benefits (as 
                defined in section 86(d)) received during the taxable 
                year which is not includible in gross income under 
                section 86,
                    ``(C) the amount of qualified military benefits (as 
                defined in section 134(b)) received during the taxable 
                year, and
                    ``(D) the amounts described in paragraphs (7) and 
                (8) of section 6051(a) which are not includible in 
                gross income.
    ``(d) Medicare Beneficiaries Exempt From Tax.--
            ``(1) In general.--The tax imposed by this section shall 
        not apply to any individual who is a medicare-eligible 
        individual for more than 6 full months beginning in the taxable 
        year.
            ``(2) Medicare-eligible individual.--For purposes of this 
        subsection, the term `medicare-eligible individual' means, with 
        respect to any month, any individual who is entitled to (or, on 
        application without the payment of an additional premium, would 
        be entitled to) benefits under part A of title XVIII of the 
        Social Security Act.
            ``(3) Special rules for joint returns where only 1 spouse 
        is medicare-eligible.--In the case of a joint return where only 
        1 spouse is a medicare-eligible individual, this section shall 
        be applied--
                    ``(A) as if such return were the return of an 
                unmarried individual, and
                    ``(B) by taking into account one-half of the 
                modified gross income determined under the joint 
                return.
    ``(e) Cost-of-Living Adjustment.--In the case of any taxable year 
beginning in a calendar year after 1995, the $8,000 and $16,000 amounts 
contained in this section shall be increased by an amount equal to--
            ``(1) such dollar amount, multiplied by
            ``(2) the cost-of-living adjustment determined under 
        section 1(f)(3), for the calendar year in which the taxable 
        year begins, by substituting `calendar year 1993' for `calendar 
        year 1987' in subparagraph (B) thereof.
    ``(f) Coordination With Other Provisions.--
            ``(1) Not treated as medical expense.--For purposes of 
        section 213, the tax imposed by this section shall not be 
        treated as an expense for medical care.
            ``(2) Not treated as tax for certain purposes.--The taxes 
        imposed by this section shall not be treated as taxes imposed 
        by this chapter for purposes of determining--
                    ``(A) the amount of any credit allowable under this 
                chapter, or
                    ``(B) the amount of the minimum tax imposed by 
                section 55.

``SEC. 59C. TAX ON GROSS RECEIPTS OF HEALTH SERVICE PROVIDERS FROM 
              PROVIDING COVERED BENEFITS.

    ``(a) Tax Imposed.--In addition to other taxes, there is hereby 
imposed a tax on every health service provider for the taxable year an 
amount equal to 10 percent of the gross receipts of such provider for 
such taxable year attributable to covered benefits provided by such 
provider.
    ``(b) Health Service Provider.--For purposes of this section--
            ``(1) In general.--The term `health service provider' means 
        any person entitled to submit a claim under section 2152 of the 
        Social Security Act for services provided by such person.
            ``(2) Person.--The term `person' includes--
                    ``(A) any entity exempt from tax under section 
                501(a), and
                    ``(B) the United States, any State or political 
                subdivision thereof, the District of Columbia, and any 
                agency or instrumentality of the foregoing.
    ``(c) Covered Benefits.--The term `covered benefit' means any 
benefit to which an individual is entitled by reason of section 2121 of 
the Social Security Act.
    ``(d) Not Treated as Tax for Certain Purposes.--The taxes imposed 
by this section shall not be treated as taxes imposed by this chapter 
for purposes of determining--
            ``(1) the amount of any credit allowable under this 
        chapter, or
            ``(2) the amount of the minimum tax imposed by section 
        55.''
    (b) Taxes Included in Estimated Tax.--
            (1) Subparagraph (A) of section 6655(g)(1) of such Code is 
        amended by striking ``plus'' at the end of clause (iii), by 
        redesignating clause (iv) as clause (v), and by inserting after 
        clause (iii) the following new clause:
                            ``(iv) the tax imposed by section 59C, 
                        plus''.
            (2) Section 6655 of such Code is amended by redesignating 
        subsection (j) as subsection (k) and by inserting after 
        subsection (i) the following new subsection:
    ``(j) Exempt Entities Treated As Corporations for Mediplan Tax.--
Each entity referred to in section 59C(b)(2) shall be treated as a 
corporation for purposes of applying this section with respect to the 
tax imposed by section 59C.''
    (c) Certain Information Included on W-2.--Subsection (a) of section 
6051 of such Code is amended by striking ``and'' at the end of 
paragraph (8), by striking the period at the end of paragraph (9) and 
inserting ``, and'', and by inserting after paragraph (9) the following 
new paragraph:
            ``(10) the total amount of qualified military benefits (as 
        defined in section 134(b)).''
    (d) Clerical Amendment.--The table of parts for such subchapter A 
of chapter 1 of such Code is amended by adding at the end thereof the 
following new item:

                              ``Part VIII. Income taxes for Mediplan 
                                        health care.''
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1994.
    (f) Section 15 Not to Apply.--Section 15 of the Internal Revenue 
Code of 1986 shall not apply to the taxes imposed by part VIII of 
subchapter A of chapter 1 of such Code.

                                 <all>

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