(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows:
Sec. 1. Short title; table of contents. 
TITLE I—BENEFITS TO PREVENT, DELAY, AND MINIMIZE THE 
PROGRESSION OF CHRONIC CONDITIONS 
Subtitle A—Improving Access to Preventive Services 
Sec. 101. Elimination of deductibles and coinsurance for existing preventive 
health benefits. 
Sec. 102. Institute of Medicine medicare prevention benefit study and report. 
Sec. 103. Authority to administratively provide for coverage of additional pre-
ventive benefits. 
Sec. 104. Coverage of an initial preventive physical examination. 
Subtitle B—Medicare Coverage for Care Coordination and Assessment 
Services 
Sec. 111. Care coordination and assessment services. 
Sec. 112. Care coordination and assessment services and quality improvement 
program in Medicare+Choice plans. 
Sec. 113. Improving chronic care coordination through information technology. 
Subtitle C—Additional Provisions 
Sec. 121. Review of coverage standards. 
TITLE II—INSTITUTE OF MEDICINE STUDY ON EFFECTIVE 
CHRONIC CONDITION CARE 
Sec. 201. Institute of Medicine medicare chronic condition care improvement 
study and report.
TITLE 
I—BENEFITS 
TO 
PRE-
VENT, DELAY, AND MINIMIZE 
THE 
PROGRESSION 
OF 
CHRONIC CONDITIONS 
Subtitle A—Improving Access to 
Preventive Services 
SEC. 101. ELIMINATION OF DEDUCTIBLES AND COINSUR-
ANCE FOR EXISTING PREVENTIVE HEALTH 
BENEFITS. 
(a) IN GENERAL.—Section 1833 of the Social Secu-
rity Act (42 U.S.C. 1395l) is amended by inserting after 
subsection (o) the following new subsection: 
‘‘(p) DEDUCTIBLES AND COINSURANCE WAIVED FOR 
PREVENTIVE HEALTH ITEMS AND SERVICES.—The Sec-
retary shall not require the payment of any deductible or 
coinsurance under subsection (a) or (b), respectively, of 
any individual enrolled for coverage under this part for 
any of the following preventive health items and services: 
‘‘(1) Blood-testing strips, lancets, and blood 
glucose monitors for individuals with diabetes de-
scribed in section 1861(n). 
‘‘(2) 
Diabetes 
outpatient 
self-management 
training services (as defined in section 1861(qq)(1)).
‘‘(3) Pneumococcal, influenza, and hepatitis B 
vaccines and administration described in section 
1861(s)(10). 
‘‘(4) Screening mammography (as defined in 
section 1861(jj)). 
‘‘(5) Screening pap smear and screening pelvic 
exam (as defined in paragraphs (1) and (2) of sec-
tion 1861(nn), respectively). 
‘‘(6) Bone mass measurement (as defined in 
section 1861(rr)(1)). 
‘‘(7) Prostate cancer screening test (as defined 
in section 1861(oo)(1)). 
‘‘(8) Colorectal cancer screening test (as de-
fined in section 1861(pp)(1)). 
‘‘(9) Screening for glaucoma (as defined in sec-
tion 1861(uu)). 
‘‘(10) Medical nutrition therapy services (as de-
fined in section 1861(vv)(1)).’’. 
(b) WAIVER OF COINSURANCE.—
(1) IN GENERAL.—Section 1833(a)(1)(B) of the 
Social Security Act (42 U.S.C. 1395l(a)(1)(B)) is 
amended to read as follows: ‘‘(B) with respect to 
preventive health items and services described in 
subsection (p), the amounts paid shall be 100 per-
cent of the fee schedule or other basis of payment 
under this title for the particular item or service,’’. 
(2) ELIMINATION
OF
COINSURANCE
IN
OUT-
PATIENT HOSPITAL SETTINGS.—The third sentence 
of section 1866(a)(2)(A) of the Social Security Act 
(42 U.S.C. 1395cc(a)(2)(A)) is amended by insert-
ing after ‘‘1861(s)(10)(A)’’ the following: ‘‘, preven-
tive health items and services described in section 
1833(p),’’. 
(c) WAIVER OF APPLICATION OF DEDUCTIBLE.—
Section 1833(b)(1) of the Social Security Act (42 U.S.C. 
1395l(b)(1)) is amended to read as follows: ‘‘(1) such de-
ductible shall not apply with respect to preventive health 
items and services described in subsection (p),’’. 
(d) ADDING ‘‘LANCET’’ TO DEFINITION OF DME.—
Section 1861(n) of the Social Security Act (42 U.S.C. 
1395x(n)) is amended by striking ‘‘blood-testing strips 
and blood glucose monitors’’ and inserting ‘‘blood-testing 
strips, lancets, and blood glucose monitors’’. 
(e) CONFORMING AMENDMENTS.—
(1) ELIMINATION OF COINSURANCE FOR CLIN-
ICAL DIAGNOSTIC LABORATORY TESTS.—Paragraphs 
(1)(D)(i) and (2)(D)(i) of section 1833(a) of the So-
cial Security Act (42 U.S.C. 1395l(a)) are each
amended by inserting ‘‘or which are described in 
subsection (p)’’ after ‘‘assignment-related basis’’. 
(2) ELIMINATION OF COINSURANCE FOR CER-
TAIN DME.—Section 1834(a)(1)(A) of the Social Se-
curity Act (42 U.S.C. 1395m(a)(1)(A)) is amended 
by inserting ‘‘(or 100 percent, in the case of such an 
item described in section 1833(p))’’ after ‘‘80 per-
cent’’. 
(3) ELIMINATION OF DEDUCTIBLES AND COIN-
SURANCE
FOR
COLORECTAL
CANCER
SCREENING 
TESTS.—Section 1834(d) of the Social Security Act 
(42 U.S.C. 1395m(d)) is amended—
(A) in paragraph (2)(C)—
(i) by striking ‘‘(C) FACILITY
PAY-
MENT
LIMIT.—’’ and all that follows 
through 
‘‘Notwithstanding 
subsections’’ 
and inserting the following: 
‘‘(C) FACILITY PAYMENT LIMIT.—Notwith-
standing subsections’’; 
(ii) by striking ‘‘(I) in accordance’’ 
and inserting the following: 
‘‘(i) in accordance’’; 
(iii) by striking ‘‘(II) are performed’’ 
and all that follows through ‘‘payment 
under’’ and inserting the following:
‘‘(ii) are performed in an ambulatory 
surgical center or hospital outpatient de-
partment, 
payment under’’; and 
(iv) by striking clause (ii); and 
(B) in paragraph (3)(C)—
(i) by striking ‘‘(C) FACILITY
PAY-
MENT
LIMIT.—’’ and all that follows 
through 
‘‘Notwithstanding 
subsections’’ 
and inserting the following: 
‘‘(C) FACILITY PAYMENT LIMIT.—Notwith-
standing subsections’’; and 
(ii) by striking clause (ii). 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to services furnished on or after 
January 1, 2004. 
SEC. 102. INSTITUTE OF MEDICINE MEDICARE PREVEN-
TION BENEFIT STUDY AND REPORT. 
(a) STUDY.—
(1) IN GENERAL.—The Secretary of Health and 
Human Services shall contract with the Institute of 
Medicine of the National Academy of Sciences to—
(A) conduct a comprehensive study of cur-
rent literature and best practices in the field of 
health promotion and disease prevention among
medicare beneficiaries, including the issues de-
scribed in paragraph (2); and 
(B) submit the report described in sub-
section (b). 
(2) ISSUES
STUDIED.—The study required 
under paragraph (1) shall include an assessment 
of—
(A) whether each health promotion and 
disease prevention benefit covered under the 
medicare program is medically effective (as de-
fined in subsection (d)(3)); 
(B) utilization by medicare beneficiaries of 
such benefits (including any barriers to or in-
centives to increase utilization); 
(C) quality of life issues associated with 
such benefits; and 
(D) whether health promotion and disease 
prevention benefits that are not covered under 
the medicare program that would affect all 
medicare beneficiaries are likely to be medically 
effective (as so defined). 
(b) REPORTS.—
(1) THREE-YEAR REPORT.—On the date that is 
3 years after the date of enactment of this Act, and 
each successive 3-year anniversary thereafter, the
Institute of Medicine of the National Academy of 
Sciences shall submit to the President a report that 
contains—
(A) a detailed statement of the findings 
and conclusions of the study conducted under 
subsection (a); and 
(B) the recommendations for legislation 
described in paragraph (3).
(2) INTERIM REPORT BASED ON NEW GUIDE-
LINES.—If the United States Preventive Services 
Task Force or the Task Force on Community Pre-
ventive Services establishes new guidelines regarding 
preventive health benefits for medicare beneficiaries 
more than 1 year prior to the date that a report de-
scribed in paragraph (1) is due to be submitted to 
the President, then not later than 6 months after 
the date such new guidelines are established, the In-
stitute of Medicine of the National Academy of 
Sciences shall submit to the President a report that 
contains a detailed description of such new guide-
lines. Such report may also contain recommenda-
tions for legislation described in paragraph (3). 
(3) RECOMMENDATIONS
FOR
LEGISLATION.—
The Institute of Medicine of the National Academy 
of Sciences, in consultation with the United States
Preventive Services Task Force and the Task Force 
on Community Preventive Services, shall develop 
recommendations in legislative form that—
(A) prioritize the preventive health benefits 
under the medicare program; and 
(B) modify such benefits, including adding 
new benefits under such program, based on the 
study conducted under subsection (a). 
(c) TRANSMISSION TO CONGRESS.—
(1) IN GENERAL.—Subject to paragraph (2), on 
the day that is 6 months after the date on which the 
report described in paragraph (1) of subsection (b) 
(or paragraph (2) of such subsection if the report 
contains recommendations in legislative form de-
scribed in subsection (b)(3)) is submitted to the 
President, the President shall transmit the report 
and recommendations to Congress. 
(2) REGULATORY ACTION BY THE SECRETARY 
OF
HEALTH
AND
HUMAN
SERVICES.—If the Sec-
retary of Health and Human Services has exercised 
the authority under section 103(a) to adopt by regu-
lation one or more of the recommendations under 
subsection (b)(3), the President shall only submit to 
Congress those recommendations under subsection 
(b)(3) that have not been adopted by the Secretary.
(3) DELIVERY.—Copies of the report and rec-
ommendations in legislative form required to be 
transmitted to Congress under paragraph (1) shall 
be delivered— 
(A) to both Houses of Congress on the 
same day; 
(B) to the Clerk of the House of Rep-
resentatives if the House is not in session; and 
(C) to the Secretary of the Senate if the 
Senate is not in session. 
(d) DEFINITION
OF MEDICALLY EFFECTIVE.—In 
this section, the term ‘‘medically effective’’ means, with 
respect to a benefit or technique, that the benefit or tech-
nique has been—
(1) subject to peer review; 
(2) described in scientific journals; and 
(3) determined to achieve an intended goal 
under normal programmatic conditions.
SEC. 103. AUTHORITY TO ADMINISTRATIVELY PROVIDE 
FOR COVERAGE OF ADDITIONAL PREVEN-
TIVE BENEFITS. 
(a) IN GENERAL.—The Secretary of Health and 
Human Services may by regulation adopt any or all of 
the legislative recommendations developed by the Institute 
of Medicine of the National Academy of Sciences, in con-
sultation with the United States Preventive Services Task 
Force and the Task Force on Community Preventive Serv-
ices in a report under section 102(b)(3) (relating to 
prioritizing and modifying preventive health benefits 
under the medicare program and the addition of new pre-
ventive benefits), consistent with subsection (b). 
(b) ELIMINATION OF COST-SHARING.—With respect 
to items and services furnished under the medicare pro-
gram that the Secretary has incorporated by regulation 
under subsection (a), the provisions of section 1833(p) of 
the Social Security Act (relating to elimination of cost-
sharing for preventive benefits), as added by section 
101(a), shall apply to those items and services in the same 
manner as such section applies to the items and services 
described in paragraphs (1) through (10) of such section. 
SEC. 104. COVERAGE OF AN INITIAL PREVENTIVE PHYS-
ICAL EXAMINATION. 
(a) COVERAGE.—Section 1861(s)(2) of the Social Se-
curity Act (42 U.S.C. 1395x(s)(2)) is amended—
(1) in subparagraph (U), by striking ‘‘and’’ at 
the end; 
(2) in subparagraph (V), by inserting ‘‘and’’ at 
the end; and 
(3) by adding at the end the following new sub-
paragraph:
‘‘(W) an initial preventive physical examination 
(as defined in subsection (ww));’’. 
(b) SERVICES DESCRIBED.—Section 1861 of such 
Act (42 U.S.C. 1395x) is amended by adding at the end 
the following new subsection: 
‘‘Initial Preventive Physical Examination 
‘‘(ww) The term ‘initial preventive physical examina-
tion’ means physicians’ services consisting of a physical 
examination with the goal of health promotion and disease 
detection and includes a history and physical exam, a 
health risk appraisal, and health risk counseling, and lab-
oratory tests or other items and services as determined 
by the Secretary in consultation with the United States 
Preventive Services Task Force.’’. 
(c) WAIVER OF DEDUCTIBLE AND COINSURANCE.—
(1) DEDUCTIBLE.—The first sentence of sec-
tion 1833(b) of such Act (42 U.S.C. 1395l(b)) is 
amended—
(A) by striking ‘‘and’’ before ‘‘(6)’’, and 
(B) by inserting before the period at the 
end the following: ‘‘, and (7) such deductible 
shall not apply with respect to an initial preven-
tive physical examination (as defined in section 
1861(ww))’’.
(2) COINSURANCE.—Section 1833(a)(1) of such 
Act (42 U.S.C. 1395l(a)(1)) is amended—
(A) in clause (N), by inserting ‘‘(or 100 
percent in the case of an initial preventive phys-
ical 
examination, 
as 
defined 
in 
section 
1861(ww))’’ after ‘‘80 percent’’; and 
(B) in clause (O), by inserting ‘‘(or 100 
percent in the case of an initial preventive phys-
ical 
examination, 
as 
defined 
in 
section 
1861(ww))’’ after ‘‘80 percent’’. 
(d) PAYMENT AS PHYSICIANS’ SERVICES.—Section 
1848(j)(3) of such Act (42 U.S.C. 1395w–4(j)(3)) is 
amended by inserting ‘‘(2)(W),’’ after ‘‘(2)(S),’’. 
(e) OTHER CONFORMING AMENDMENTS.—Section 
1862(a) of such Act (42 U.S.C. 1395y(a)) is amended—
(1) in paragraph (1)—
(A) by striking ‘‘and’’ at the end of sub-
paragraph (H); 
(B) by striking the semicolon at the end of 
subparagraph (I) and inserting ‘‘, and’’; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(J) in the case of an initial preventive physical 
examination (as defined in section 1861(ww)), which 
is performed not later than 6 months after the date
the individual’s first coverage period begins under 
part B;’’; and 
(2) in paragraph (7), by striking ‘‘or (H)’’ and 
inserting ‘‘(H), or (J)’’. 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to services furnished on or after 
January 1, 2004, but only for individuals whose coverage 
period begins on or after such date. 
Subtitle B—Medicare Coverage for 
Care Coordination and Assess-
ment Services 
SEC. 111. CARE COORDINATION AND ASSESSMENT SERV-
ICES. 
(a) SERVICES AUTHORIZED.—Title XVIII of the So-
cial Security Act (42 U.S.C. 1395 et seq.) is amended by 
adding at the end the following new section: 
‘‘CARE COORDINATION AND ASSESSMENT SERVICES 
‘‘SEC. 1897. (a) PURPOSE.—
‘‘(1) IN GENERAL.—The purpose of this section 
is to provide the appropriate level and mix of follow-
up care to an individual with a chronic condition 
who qualifies as an eligible beneficiary (as defined in 
paragraph (2)). 
‘‘(2) ELIGIBLE
BENEFICIARY
DEFINED.—In 
this section, the term ‘eligible beneficiary’ means a 
beneficiary who—
‘‘(A) has a serious and disabling chronic 
condition (as defined in subsection(f)(1)); or 
‘‘(B) has four or more chronic conditions 
(as defined in subsection (f)(4)). 
‘‘(b) ELECTION OF CARE COORDINATION AND AS-
SESSMENT SERVICES.—
‘‘(1) IN
GENERAL.—On or after January 1, 
2005, an eligible beneficiary may elect to receive 
care coordination services in accordance with the 
provisions of this section under which, in appro-
priate circumstances, the eligible beneficiary has 
health care services covered under this title managed 
and coordinated by a care coordinator who is quali-
fied under subsection (e) to furnish care coordina-
tion services under this section. 
‘‘(2) REVOCATION OF ELECTION.—An eligible 
beneficiary who has made an election under para-
graph (1) may revoke that election at any time. 
‘‘(c) OUTREACH.—The Secretary shall provide for the 
wide dissemination of information to beneficiaries and pro-
viders of services, physicians, practitioners, and suppliers 
with respect to the availability of and requirements for 
care coordination services under this section.
‘‘(d) CARE COORDINATION AND ASSESSMENT SERV-
ICES DESCRIBED.—Care coordination services under this 
section shall include the following: 
‘‘(1) BASIC CARE COORDINATION AND ASSESS-
MENT SERVICES.—Except as otherwise provided in 
this section, eligible beneficiaries who have made an 
election under this section shall receive the following 
services: 
‘‘(A)(i) An initial assessment of an individ-
ual’s medical condition, functional and cognitive 
capacity, and environmental and psychosocial 
needs. 
‘‘(ii) Annual assessments after the initial 
assessment performed under clause (i), unless 
the physician or care coordinator of the indi-
vidual determines that additional assessments 
are required due to sentinel health events or 
changes in the health status of the individual 
that may require changes in the plan of care 
developed for the individual. 
‘‘(B) The development of an initial plan of 
care, and subsequent appropriate revisions to 
that plan of care. 
‘‘(C) The management of, and referral for, 
medical and other health services, including
multidisciplinary care conferences and coordina-
tion with other providers. 
‘‘(D) The monitoring and management of 
medications. 
‘‘(E) Patient education and counseling 
services. 
‘‘(F) Family caregiver education and coun-
seling services. 
‘‘(G) Self-management services, including 
health education and risk appraisal to identify 
behavioral risk factors through self-assessment. 
‘‘(H) Consultations by telephone with phy-
sicians and other appropriate health care pro-
fessionals, including 24-hour access to a care 
coordinator. 
‘‘(I) Coordination with the principal care-
giver in the home. 
‘‘(J) The managing and facilitating of 
transitions among health care professionals and 
across settings of care, including the following: 
‘‘(i) The pursuit the treatment option 
elected by the individual. 
‘‘(ii) The inclusion of any advance di-
rective executed by the individual in the 
medical file of the individual.
‘‘(K) Activities that facilitate continuity of 
care and patient adherence to plans of care. 
‘‘(L) Information about, and referral to, 
community-based services, including patient and 
family caregiver education and counseling about 
such services, and facilitating access to such 
services when elected. 
‘‘(M) Information about, and referral to, 
hospice services and palliative care, including 
patient and family caregiver education and 
counseling about hospice services and palliative 
care, and facilitating transition to hospice when 
elected. 
‘‘(N) Such other medical and health care 
services for which payment would not otherwise 
be made under this title as the Secretary deter-
mines to be appropriate for effective care co-
ordination, including the additional items and 
services as described in paragraph (2). 
‘‘(2) ADDITIONAL
BENEFITS.—The Secretary 
may specify additional benefits for which payment 
would not otherwise be made under this title that 
may be available to eligible beneficiaries who have 
made an election under this section (subject to an 
assessment by the care coordinator of an individual
‘‘(i) A one-year period for each of the 
first three years of participation under this 
section. 
‘‘(ii) A three-year period thereafter. 
‘‘(2) ADDITIONAL REQUIREMENTS.—
‘‘(A) SUBMISSION OF DATA.—A care coor-
dinator shall comply with such data collection 
and reporting requirements as the Secretary de-
termines necessary to assess the effect of care 
coordination on health outcomes. 
‘‘(B) PARTICIPATION
IN
QUALITY
IM-
PROVEMENT
PROGRAM.—A care coordinator 
shall participate in the quality improvement 
program under paragraph (3). 
‘‘(C) ADDITIONAL TERMS.—A care coordi-
nator shall comply with such other terms and 
conditions as the Secretary may specify. 
‘‘(3) QUALITY IMPROVEMENT PROGRAM.—
‘‘(A) IN
GENERAL.—The Secretary shall 
establish a chronic care quality assurance pro-
gram to monitor and improve clinical outcomes 
for beneficiaries with chronic conditions. 
‘‘(B) ELEMENTS OF PROGRAM.—Under the 
program, the Secretary shall—
‘‘(i) establish standards to measure—
‘‘(I) quality and performance of 
the care of chronic conditions; 
‘‘(II) the continuity and coordi-
nation of care that eligible bene-
ficiaries under this section receive; 
and 
‘‘(III) both underutilization and 
overutilization of services; 
‘‘(ii) provide to care coordinators peri-
odic reports on their performance on such 
measures; and 
‘‘(iii) make available information on 
quality and outcomes measures to facilitate 
beneficiary comparison and choice of care 
coordination options (in such form and on 
such quality and outcomes measures as the 
Secretary determines to be appropriate). 
‘‘(C) REVIEW OF CLAIMS.—
‘‘(i) IN GENERAL.—Subject to clause 
(ii), under the program the Secretary shall 
make available to care coordinators claims 
data relating to a beneficiary for whom the 
coordinator coordinates care under this 
section for the coordinator’s review and 
subsequent appropriate follow-up action.
‘‘(ii) 
AUTHORIZATION.—Data 
may 
only be provided to a care coordinator 
under clause (i) if the eligible beneficiary 
involved has given written authorization 
for such information to be so provided. 
‘‘(4) LIMITATION ON NUMBER OF CARE COOR-
DINATORS.—Payment may only be made under this 
section for care coordination services furnished dur-
ing a period to one care coordinator with respect to 
an eligible beneficiary. 
‘‘(5) PAYMENT FOR SERVICES.—
‘‘(A) IN
GENERAL.—The Secretary shall 
establish payment terms and conditions and 
payment rates for basic care coordination and 
assessment services described in subsection (d). 
‘‘(B) PAYMENT METHODOLOGY.—Payment 
under this section shall be made in a manner 
that bundles payment for all care coordination 
and assessment services furnished during a pe-
riod, as specified by the Secretary. 
‘‘(C) CODES.—The Secretary may estab-
lish new billing codes to carry out the provisions 
of this paragraph. 
‘‘(f) DEFINITIONS.—In this section:
‘‘(1) SERIOUS AND DISABLING CHRONIC CONDI-
TION.—The term ‘serious and disabling chronic con-
dition’ means, with respect to an individual, that the 
individual has at least one chronic condition and a 
licensed health care practitioner has certified within 
the preceding 12-month period that—
‘‘(A) the individual has a level of disability 
such that the individual is unable to perform 
(without substantial assistance from another in-
dividual) for a period of at least 90 days due 
to a loss of functional capacity—
‘‘(i) at least 2 activities of daily living; 
or 
‘‘(ii) such number of instrumental ac-
tivities of daily living that is equivalent (as 
determined by the Secretary) to the level 
of disability described in clause (i); 
‘‘(B) the individual has a level of disability 
equivalent (as determined by the Secretary) to 
the level of disability described in subparagraph 
(A); or 
‘‘(C) the individual requires substantial su-
pervision to protect the individual from threats 
to health and safety due to severe cognitive im-
pairment.
‘‘(2) ACTIVITIES OF DAILY LIVING.—The term 
‘activities of daily living’ means each of the fol-
lowing: 
‘‘(A) Eating. 
‘‘(B) Toileting. 
‘‘(C) Transferring. 
‘‘(D) Bathing. 
‘‘(E) Dressing. 
‘‘(F) Continence. 
‘‘(3) INSTRUMENTAL ACTIVITIES OF DAILY LIV-
ING.—The term ‘instrumental activities of daily liv-
ing’ means each of the following: 
‘‘(A) Medication management. 
‘‘(B) Meal preparation. 
‘‘(C) Shopping. 
‘‘(D) Housekeeping. 
‘‘(E) Laundry. 
‘‘(F) Money management. 
‘‘(G) Telephone use. 
‘‘(H) Transportation use. 
‘‘(4) CHRONIC CONDITION.—The term ‘chronic 
condition’ means an illness, functional limitation, or 
cognitive impairment that—
‘‘(A) lasts, or is expected to last, at least 
one year;
‘‘(B) limits what a person can do; and 
‘‘(C) requires on-going medical care. 
‘‘(5) BENEFICIARY.—The term ‘beneficiary’ 
means an individual entitled to benefits under part 
A and enrolled under part B, including an individual 
enrolled under the Medicare+Choice program under 
part C.’’. 
(b) COVERAGE OF CARE COORDINATION AND AS-
SESSMENT SERVICES AS A PART B MEDICAL SERVICE.—
(1) IN GENERAL.—Section 1861(s) of the So-
cial Security Act (42 U.S.C. 1395x(s)) is amended—
(A) in the second sentence, by redesig-
nating paragraphs (16) and (17) as clauses (i) 
and (ii); and 
(B) in the first sentence—
(i) by striking ‘‘and’’ at the end of 
paragraph (14); 
(ii) by striking the period at the end 
of paragraph (15) and inserting ‘‘; and’’; 
and 
(iii) by adding after paragraph (15) 
the following new paragraph: 
‘‘(16) care coordination and assessment services 
furnished by a care coordinator in accordance with 
section 1897.’’.
(2) 
CONFORMING
AMENDMENTS.—Sections 
1864(a), 1902(a)(9)(C), and 1915(a)(1)(B)(ii)(I) of 
such Act (42 U.S.C. 1395aa(a), 1396a(a)(9)(C), and 
1396n(a)(1)(B)(ii)(I)) are each amended by striking 
‘‘paragraphs (16) and (17)’’ each place it appears 
and inserting ‘‘clauses (i) and (ii) of the second sen-
tence’’. 
(3) PART
B
COINSURANCE
AND
DEDUCTIBLE 
NOT APPLICABLE TO CARE COORDINATION AND AS-
SESSMENT SERVICES.—
(A) COINSURANCE.—Section 1833(a)(1) of 
the Social Security Act (42 U.S.C. 1395l(a)(1)) 
is amended—
(i) by striking ‘‘and’’ at the end of 
subparagraph (T); and 
(ii) by inserting before the final semi-
colon ‘‘, and (V) with respect to care co-
ordination and assessment services de-
scribed in section 1861(s)(16) that are fur-
nished by, or coordinated through, a care 
coordinator, the amounts paid shall be 100 
percent of the payment amount established 
under section 1897’’. 
(B) DEDUCTIBLE.—Section 1833(b) of 
such Act (42 U.S.C. 1395l(b)) is amended—
(i) by striking ‘‘and’’ at the end of 
paragraph (5); and 
(ii) by inserting before the final period 
‘‘, and (7) such deductible shall not apply 
with respect to care coordination and as-
sessment services (as described in section 
1861(s)(16))’’. 
(C) ELIMINATION
OF
COINSURANCE
IN 
OUTPATIENT HOSPITAL SETTINGS.—The third 
sentence of section 1866(a)(2)(A) of such Act 
(42 U.S.C. 1395cc(a)(2)(A)), as amended by 
section 101(b)(2), is further amended by insert-
ing after ‘‘section 1833(p),’’ the following: 
‘‘with respect to care coordination and assess-
ment 
services 
(as 
described 
in 
section 
1861(s)(16)),’’. 
SEC. 112. CARE COORDINATION AND ASSESSMENT SERV-
ICES AND QUALITY IMPROVEMENT PROGRAM 
IN MEDICARE+CHOICE PLANS. 
Section 1852(e)(1) of the Social Security Act (42 
U.S.C. 1395w–22(e)(1)) is amended by inserting before 
the period at the end the following: ‘‘, including a quality 
improvement program for coordinated care services re-
ferred to in section 1897(e)(3)’’.
SEC. 113. IMPROVING CHRONIC CARE COORDINATION 
THROUGH INFORMATION TECHNOLOGY. 
(a) TECHNOLOGY IMPROVEMENT GRANTS.—
(1) IN GENERAL.—The Secretary of Health and 
Human Services (hereinafter in this section referred 
to as the ‘‘Secretary’’) shall make grants to eligible 
entities to enable such entities to develop, imple-
ment, or train personnel in the use of standardized 
clinical information technology systems designed 
to—
(A) improve the coordination and quality 
of care furnished to medicare beneficiaries with 
chronic conditions; and 
(B) increase administrative efficiencies of 
such entities. 
(2) CARE COORDINATORS AS ELIGIBLE ENTI-
TIES.—In this section, an eligible entity is a care co-
ordinator who furnishes care coordination services to 
medicare beneficiaries under section 1897 of the So-
cial Security Act. 
(b) ELIGIBILITY.—To be eligible to receive a grant 
under subsection (a), a care coordinator shall—
(1) prepare and submit to the Secretary an ap-
plication at such time, in such manner, and con-
taining such information as the Secretary may re-
quire, including a description of the clinical informa-
tion technology system that the care coordinator in-
tends to implement using amounts received under 
the grant; 
(2) provide assurances that are satisfactory to 
the Secretary that such system, for which amounts 
are to be expended under the grant, conforms to the 
standards established by the Secretary under part C 
of title XI of the Social Security Act, and such other 
standards as the Secretary may specify; and 
(3) furnish the Secretary with such information 
as the Secretary may require to—
(A) evaluate the project for which the 
grant is made; and 
(B) ensure that funding provided under 
the grant is expended for the purposes for 
which it is made. 
(c) MATCHING REQUIREMENT.—The Secretary may 
not make a grant to a care coordinator under subsection 
(a) unless that care coordinator agrees that, with respect 
to the costs to be incurred by the care coordinator in car-
rying out the activities for which the grant is being award-
ed, the care coordinator will make available (directly or 
through donations from public or private entities) non-
Federal contributions toward such costs in an amount
equal to $1 for each $1 of Federal funds provided under 
the grant. 
(d) REPORTS TO CONGRESS.—
(1) INITIAL
REPORT.—Not later than 18 
months after the first grant has been made under 
this section, the Secretary shall submit an initial re-
port to Congress containing the information referred 
to in paragraph (3) as well as any recommendations 
with respect to grants under this section. 
(2) FINAL REPORT.—Not later than 6 months 
after the last grant has been awarded (as deter-
mined by the Secretary) under this section, the Sec-
retary shall submit a final report to Congress con-
taining the information referred to in paragraph (2) 
as well as any recommendations with respect to 
grants under this section. 
(3) CONTENTS OF REPORT.—The reports under 
this subsection shall include the following: 
(A) A description of the number and na-
ture of grants made under this section. 
(B) An evaluation of—
(i) improvements in the coordination 
and quality of care furnished to bene-
ficiaries with chronic conditions; and
(ii) increases in administrative effi-
ciencies of care coordinators. 
(e) AUTHORIZATION OF APPROPRIATIONS.—For each 
of fiscal years 2005, 2006, and 2007, there are authorized 
to be appropriated to the Secretary $10,000,000 to carry 
out the program under this section. 
Subtitle C—Additional Provisions 
SEC. 121. REVIEW OF COVERAGE STANDARDS. 
(a) REVIEW.—With respect to determinations under 
section 1862(a)(1) of such Act (42 U.S.C. 1395y(a)(1)) 
(relating to whether an item or service is reasonable and 
necessary for the diagnosis or treatment of illness or in-
jury for purposes of payment under title XVIII of such 
Act), the Secretary of Health and Human Services shall 
conduct a review of—
(1) regulations, policies, procedures, and in-
structions of the Centers for Medicare & Medicaid 
Services for making those determinations; and 
(2) policies, procedures, local medical review 
policies, manual instructions, interpretative rules, 
statements of policy, and guidelines of general appli-
cability of fiscal intermediaries (under section 1816 
of the Social Security Act (42 U.S.C. 1395h)) and 
carriers under section 1842 of such Act (42 U.S.C. 
1395u) for making those determinations.
(b) MODIFICATION.—Insofar as the Secretary deter-
mines that the Centers for Medicare & Medicaid Services, 
a fiscal intermediary, or a carrier has misapplied such 
standard by requiring that the item or service improve the 
condition of the patient with respect to such illness or in-
jury, the Secretary shall take such corrective measures as 
are appropriate to ensure the Centers, intermediary, or 
carrier (as the case may be) applies the proper standard 
for making such determinations. 
(c) REPORT.—On the date that is 18 months after 
the date of enactment of this Act, the Secretary shall sub-
mit to Congress a report that contains—
(1) a detailed statement of the findings and 
conclusions of the review conducted under subsection 
(a); 
(2) a detailed statement of the modifications 
made under subsection (b); and 
(3) recommendations to avoid misapplication of 
the standard in the future.
TITLE II—INSTITUTE OF MEDI-
CINE STUDY ON EFFECTIVE 
CHRONIC CONDITION CARE 
SEC. 201. INSTITUTE OF MEDICINE MEDICARE CHRONIC 
CONDITION CARE IMPROVEMENT STUDY AND 
REPORT. 
(a) STUDY.—
(1) IN GENERAL.—The Secretary of Health and 
Human Services shall contract with the Institute of 
Medicine of the National Academy of Sciences to—
(A) conduct a comprehensive study of the 
medicare program to identify—
(i) factors that facilitate provision of 
effective care (including, where appro-
priate, hospice care) for medicare bene-
ficiaries with chronic conditions; and 
(ii) factors that impede provision of 
such care for such beneficiaries, 
including the issues studied under paragraph 
(2); and 
(B) submit the report described in sub-
section (b). 
(2) ISSUES
STUDIED.—The study required 
under paragraph (1) shall—
(A) identify inconsistent clinical, financial, 
or administrative requirements across provider 
and supplier settings or professional services 
with respect to medicare beneficiaries; 
(B) identify requirements under the pro-
gram imposed by law or regulation that—
(i) promote costshifting across pro-
viders and suppliers; 
(ii) impede provision of effective, 
seamless transitions across health care set-
tings, such as between hospitals, skilled 
nursing facilities, home health services, 
hospice care, and care in the home; 
(iii) impose unnecessary burdens on 
such beneficiaries and their family care-
givers; 
(iv) impede the establishment of ad-
ministrative information systems to track 
health status, utilization, cost, and quality 
data across providers and suppliers and 
provider settings; 
(v) impede the establishment of clin-
ical information systems that support con-
tinuity of care across settings and over 
time; or
(vi) impede the alignment of financial 
incentives among the medicare program, 
the medicaid program, and group health 
plans and providers and suppliers that fur-
nish services to the same beneficiary. 
(b) REPORT.—On the date that is 18 months after 
the date of enactment of this Act, the Institute of Medi-
cine of the National Academy of Sciences shall submit to 
Congress and the Secretary of Health and Human Serv-
ices a report that contains—
(1) a detailed statement of the findings and 
conclusions of the study conducted under subsection 
(a); and 
(2) recommendations to improve provision of ef-
fective care for medicare beneficiaries with chronic 
conditions.
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