SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Living Well with Fatal Chronic Illness Act of 2002’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Access to medicare benefits for certain caregivers 55-to-65 years of age.
Sec. 3. Long-term care tax credit.
Sec. 4. Department of Health and Human Services programs for patients with
fatal chronic illnesses.
Sec. 5. Programs through Department of Veterans Affairs regarding patients
with fatal chronic illnesses.
SEC. 2. ACCESS TO MEDICARE BENEFITS FOR CERTAIN
CAREGIVERS 55-TO-65 YEARS OF AGE.
(a) IN GENERAL.—Title XVIII of the Social Security
Act is amended—
(1) by redesignating section 1859 and part D
as section 1858 and part E, respectively; and
(2) by inserting after such section the following
new part:
‘‘PART D—PURCHASE OF MEDICARE BENEFITS BY
CERTAIN CAREGIVERS AGE 55-TO-65 YEARS OF AGE
‘‘SEC. 1859. PROGRAM BENEFITS; ELIGIBILITY.
‘‘(a) GENERAL DESCRIPTION OF PROGRAM.—This
part provides a program of medicare eligibility for those
age 55 or older who are caring on a full-time basis for
family members and who are not otherwise eligible for
group health insurance coverage.
‘‘(b) ENTITLEMENT TO MEDICARE BENEFITS FOR
ENROLLED INDIVIDUALS.—
‘‘(1) IN
GENERAL.—An individual enrolled
under this part is entitled to the same benefits
under this title as an individual entitled to benefits
under part A and enrolled under part B.
‘‘(2) DEFINITIONS.—For purposes of this part:
‘‘(A) FEDERAL OR STATE COBRA CONTINU-
ATION PROVISION.—The term ‘Federal or State
COBRA continuation provision’ has the mean-
ing given the term ‘COBRA continuation provi-
sion’ in section 2791(d)(4) of the Public Health
Service Act and includes a comparable State
program, as determined by the Secretary.
‘‘(B) FEDERAL HEALTH INSURANCE PRO-
GRAM DEFINED.—The term ‘Federal health in-
surance program’ means any of the following:
‘‘(i) MEDICARE.—Part A or part B of
this title (other than by reason of this
part).
‘‘(ii) MEDICAID.—A State plan under
title XIX.
‘‘(iii) FEHBP.—The Federal employ-
ees health benefit program under chapter
89 of title 5, United States Code.
‘‘(iv) 
TRICARE.—The 
TRICARE
program (as defined in section 1072(7) of
title 10, United States Code).
‘‘(v) ACTIVE DUTY MILITARY.—Health
benefits under title 10, United States
Code, to an individual as a member of the
uniformed services of the United States.
‘‘(C) GROUP
HEALTH
PLAN.—The term
‘group health plan’ has the meaning given such
term in section 2791(a)(1) of the Public Health
Service Act.
‘‘(D) FAMILY MEMBER.—The term ‘family
member’ includes a domestic partner or other
significant relationship recognized under law in
the State in which the person being cared for
resides.
‘‘(c) ELIGIBILITY.—An individual who meets the fol-
lowing requirements with respect to a month is eligible to
enroll under this part with respect to such month:
‘‘(1) AGE.—As of the last day of the month, the
individual has attained 55 years of age, but has not
attained 65 years of age.
‘‘(2) MEDICARE ELIGIBILITY (BUT FOR AGE).—
The individual would be eligible for benefits under
part A or part B for the month if the individual
were 65 years of age.
‘‘(3) NOT
ELIGIBLE
FOR
COVERAGE
UNDER
GROUP HEALTH PLANS OR FEDERAL HEALTH INSUR-
ANCE PROGRAMS.—The individual is not eligible for
benefits or coverage under a Federal health insur-
ance program (as defined in subsection (b)(2)(B)) or
under a group health plan (other than such eligi-
bility merely through a Federal or State COBRA
continuation provision) as of the last day of the
month involved.
‘‘(4) CAREGIVER.—The individual is providing
the majority of care to a family member who—
‘‘(A) is entitled to benefits under part A,
or enrolled under part B; and
‘‘(B) requires substantial supervision due
to severe cognitive impairment or is unable to
perform at least 2 activities of daily living.
‘‘(5) LIMITATION OF 1 CAREGIVER FOR EACH
DISABLED
ELIGIBLE
BENEFICIARY.—There is no
other individual who is enrolled (or enrolling) under
this section on the basis of care provided to the fam-
ily member described in paragraph (4).
‘‘SEC. 1859A. ENROLLMENT PROCESS; COVERAGE.
‘‘(a) IN GENERAL.—An individual may enroll in the
program established under this part only in such manner
and form as may be prescribed by regulations, and only
during an enrollment period prescribed by the Secretary
consistent with the provisions of this section. Such regula-
tions shall provide a process under which individuals eligi-
ble to enroll as of a month are permitted to pre-enroll dur-
ing a prior month within an enrollment period described
in subsection (b).
‘‘(b) ENROLLMENT PERIODS.—
‘‘(1) IN GENERAL.—In the case of individuals
eligible to enroll under this part under section
1859(c)—
‘‘(A) INDIVIDUALS ELIGIBLE AT TIME PRO-
GRAM BEGINS.—If the individual is eligible to
enroll under such section for January 2003, the
enrollment period shall begin on November 1,
2002, and shall end on February 28, 2003. Any
such enrollment before January 1, 2003, is con-
ditioned upon compliance with the conditions of
eligibility for January 2003.
‘‘(B) INDIVIDUALS WHO BECOME ELIGIBLE
LATER.—If the individual becomes eligible to
enroll under such section for a month after
January 2003, the enrollment period shall be
the 4-month period beginning on the first day
of the second month before the month in which
the individual first is eligible to so enroll. Any
such enrollment before the first day of the third
month of such enrollment period is conditioned
upon compliance with the conditions of eligi-
bility for such third month.
‘‘(2) AUTHORITY
TO
CORRECT
FOR
GOVERN-
MENT ERRORS.—The provisions of section 1837(h)
apply with respect to enrollment under this part in
the same manner as they apply to enrollment under
part B.
‘‘(c) DATE COVERAGE BEGINS.—
‘‘(1) IN GENERAL.—The period during which
an individual is entitled to benefits under this part
shall begin as follows, but in no case earlier than
January 1, 2003:
‘‘(A) In the case of an individual who en-
rolls (including pre-enrolls) before the month in
which the individual satisfies eligibility for en-
rollment under section 1859, the first day of
such month of eligibility.
‘‘(B) In the case of an individual who en-
rolls during or after the month in which the in-
dividual first satisfies eligibility for enrollment
under such section, the first day of the fol-
lowing month.
‘‘(2) AUTHORITY
TO
PROVIDE
FOR
PARTIAL
MONTHS
OF
COVERAGE.—Under regulations, the
Secretary may, in the Secretary’s discretion, provide
for coverage periods that include portions of a
month in order to avoid lapses of coverage.
‘‘(3) LIMITATION ON PAYMENTS.—No payments
may be made under this title with respect to the ex-
penses of an individual enrolled under this part un-
less such expenses were incurred by such individual
during a period which, with respect to the individual,
is a coverage period under this section.
‘‘(d) TERMINATION OF COVERAGE.—
‘‘(1) IN
GENERAL.—An individual’s coverage
period under this part shall continue until the indi-
vidual’s enrollment has been terminated at the ear-
liest of the following:
‘‘(A) GENERAL PROVISIONS.—
‘‘(i) NOTICE.—The individual files no-
tice (in a form and manner prescribed by
the Secretary) that the individual no
longer wishes to participate in the insur-
ance program under this part.
‘‘(ii) NONPAYMENT OF PREMIUMS.—
The individual fails to make payment of
premiums required for enrollment under
this part.
‘‘(iii) MEDICARE
ELIGIBILITY.—The
individual becomes entitled to benefits
under part A or enrolled under part B
(other than by reason of this part).
‘‘(B) TERMINATION BASED ON AGE.—The
individual attains 65 years of age.
‘‘(C) OBTAINING ACCESS TO EMPLOYMENT-
BASED COVERAGE OR FEDERAL HEALTH INSUR-
ANCE PROGRAM.—The individual is covered (or
eligible for coverage) as a participant or bene-
ficiary under a group health plan or under a
Federal health insurance program.
‘‘(D) TERMINATION OF CAREGIVING.—One
year after the date that the individual ceases to
be providing the caregiving described in section
1859(c)(4) for a period of 4 consecutive weeks.
‘‘(2) EFFECTIVE DATE OF TERMINATION.—
‘‘(A) NOTICE.—The termination of a cov-
erage period under paragraph (1)(A)(i) shall
take effect at the close of the month following
the month in which the notice is filed.
‘‘(B) NONPAYMENT
OF
PREMIUM.—The
termination of a coverage period under para-
graph (1)(A)(ii) shall take effect on a date de-
termined under regulations, which may be de-
termined so as to provide a grace period in
which overdue premiums may be paid and cov-
erage continued. The grace period determined
under the preceding sentence shall not exceed
60 days; except that it may be extended for an
additional 30 days in any case where the Sec-
retary determines that there was good cause for
failure to pay the overdue premiums within
such 60-day period.
‘‘(C) AGE
OR
MEDICARE
ELIGIBILITY.—
The termination of a coverage period under
paragraph (1)(A)(iii) or (1)(B) shall take effect
as of the first day of the month in which the
individual attains 65 years of age or becomes
entitled to benefits under part A or enrolled for
benefits under part B (other than by reason of
this part).
‘‘(D) ACCESS TO COVERAGE.—The termi-
nation of a coverage period under paragraph
(1)(C) shall take effect on the date on which
the individual is eligible to begin a period of
creditable coverage (as defined in section
2701(c) of the Public Health Service Act)
under a group health plan or under a Federal
health insurance program.
‘‘SEC. 1859B. PREMIUMS.
‘‘(a) AMOUNT OF MONTHLY PREMIUMS.—The Sec-
retary shall, during September of each year (beginning
with 2002), determine a premium rate which shall apply
with respect to coverage provided under this title for any
month in the succeeding year. Such rate for individuals
residing in a premium area for most of any month in a
year shall be equal to 1⁄12 of the average, annual per capita
amount estimated under subsection (b)(1) for the year,
adjusted for such area under subsection (b)(2).
‘‘(b) ANNUAL PREMIUM.—
‘‘(1) NATIONAL, PER
CAPITA
AVERAGE.—The
Secretary shall estimate the average, annual per
capita amount that would be payable under this title
with respect to individuals residing in the United
States who meet the requirement of section
1859(c)(1) as if all such individuals were eligible for
(and enrolled) under this title during the entire year
(and assuming that section 1862(b)(2)(A)(i) did not
apply).
‘‘(2) GEOGRAPHIC
ADJUSTMENT.—The Sec-
retary shall adjust the amount determined under
paragraph (1) for each premium area (specified
under subsection (c)) in order to take into account
such factors as the Secretary deems appropriate and
shall limit the maximum premium under this para-
graph in a premium area to assure participation in
all areas throughout the United States.
‘‘(c) ESTABLISHMENT
OF PREMIUM AREAS.—For
purposes of this part, the term ‘premium area’ means such
an area as the Secretary shall specify to carry out this
part. The Secretary from time to time may change the
boundaries of such premium areas. The Secretary shall
seek to minimize the number of such areas specified under
this paragraph.
‘‘SEC. 1859C. PAYMENT OF PREMIUMS.
‘‘(a) PAYMENT OF MONTHLY PREMIUM.—
‘‘(1) IN GENERAL.—The Secretary shall provide
for payment and collection of the monthly premium,
determined under section 1859B(a) for the premium
area in which the individual principally resides, in
the same manner as for payment of monthly pre-
miums under section 1840, except that, for purposes
of applying this section, any reference in such sec-
tion to the Federal Supplementary Medical Insur-
ance Trust Fund is deemed a reference to the Trust
Fund established under section 1859D.
‘‘(2) PERIOD OF PAYMENT.—In the case of an
individual who participates in the program estab-
lished by this title, the monthly premium shall be
payable for the period commencing with the first
month of the individual’s coverage period and ending
with the month in which the individual’s coverage
under this title terminates.
‘‘(b) APPLICATION OF CERTAIN PROVISIONS.—The
provisions of section 1840 (other than subsection (h))
shall apply to premiums collected under this section in the
same manner as they apply to premiums collected under
part B, except that any reference in such section to the
Federal Supplementary Medical Insurance Trust Fund is
deemed a reference to the Trust Fund established under
section 1859D.
‘‘SEC. 1859D. MEDICARE CAREGIVER TRUST FUND.
‘‘(a) ESTABLISHMENT OF TRUST FUND.—
‘‘(1) IN GENERAL.—There is hereby created on
the books of the Treasury of the United States a
trust fund to be known as the ‘Medicare Caregiver
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 such amounts as may be de-
posited in, or appropriated to, such fund as provided
in this title.
‘‘(2) PREMIUMS.—Premiums collected under
section 1859B shall be transferred to the Trust
Fund.
‘‘(b) INCORPORATION OF PROVISIONS.—
‘‘(1) IN GENERAL.—Subject to paragraph (2),
subsections (b) through (i) of section 1841 shall
apply with respect to the Trust Fund and this title
in the same manner as they apply with respect to
the Federal Supplementary Medical Insurance Trust
Fund and part B, respectively.
‘‘(2) MISCELLANEOUS REFERENCES.—In apply-
ing provisions of section 1841 under paragraph
(1)—
‘‘(A) any reference in such section to ‘this
part’ is construed to refer to this part D;
‘‘(B) any reference in section 1841(h) to
section 1840(d) and in section 1841(i) to sec-
tions 1840(b)(1) and 1842(g) are deemed ref-
erences to comparable authority exercised under
this part; and
‘‘(C) payments may be made under section
1841(g) to the Trust Funds under sections
1817 and 1841 as reimbursement to such funds
for payments they made for benefits provided
under this part.
‘‘SEC. 1859E. OVERSIGHT AND ACCOUNTABILITY.
‘‘(a) THROUGH ANNUAL REPORTS OF TRUSTEES.—
The Board of Trustees of the Medicare Caregiver Trust
Fund under section 1859D(b)(1) shall report on an an-
nual basis to Congress concerning the status of the Trust
Fund and the need for adjustments in the program under
this part to maintain financial solvency of the program
under this part.
‘‘(b) PERIODIC GAO REPORTS.—The Comptroller
General of the United States shall periodically submit to
Congress reports on the adequacy of the financing of cov-
erage provided under this part. The Comptroller General
shall include in such report such recommendations for ad-
justments in such financing and coverage as the Comp-
troller General deems appropriate in order to maintain fi-
nancial solvency of the program under this part.
‘‘SEC. 1859F. ADMINISTRATION AND MISCELLANEOUS.
‘‘(a) TREATMENT FOR PURPOSES OF TITLE.—Ex-
cept as otherwise provided in this part—
‘‘(1) individuals enrolled under this part shall
be treated for purposes of this title as though the in-
dividual were entitled to benefits under part A and
enrolled under part B; and
‘‘(2) benefits described in section 1859 shall be
payable under this title to such individuals in the
same manner as if such individuals were so entitled
and enrolled.
‘‘(b) NOT TREATED AS MEDICARE PROGRAM FOR
PURPOSES OF MEDICAID PROGRAM.—For purposes of ap-
plying title XIX (including the provision of medicare cost-
sharing assistance under such title), an individual who is
enrolled under this part shall not be treated as being enti-
tled to benefits under this title.
‘‘(c) NOT TREATED AS MEDICARE PROGRAM FOR
PURPOSES OF COBRA CONTINUATION PROVISIONS.—In
applying a COBRA continuation provision (as defined in
section 2791(d)(4) of the Public Health Service Act), any
reference to an entitlement to benefits under this title
shall not be construed to include entitlement to benefits
under this title pursuant to the operation of this part.’’.
(b) CONFORMING AMENDMENTS TO SOCIAL SECU-
RITY ACT PROVISIONS.—
(1) Section 201(i)(1) of the Social Security Act
(42 U.S.C. 401(i)(1)) is amended by striking ‘‘or the
Federal Supplementary Medical Insurance Trust
Fund’’ and inserting ‘‘the Federal Supplementary
Medical Insurance Trust Fund, and the Medicare
Caregiver Trust Fund’’.
(2) Section 201(g)(1)(A) of such Act (42
U.S.C. 401(g)(1)(A)) is amended by striking ‘‘and
the Federal Supplementary Medical Insurance Trust
Fund established by title XVIII’’ and inserting ‘‘,
the Federal Supplementary Medical Insurance Trust
Fund, and the Medicare Caregiver Trust Fund es-
tablished by title XVIII’’.
(3) Section 1820(i) of such Act (42 U.S.C.
1395i–4(i)) is amended by striking ‘‘part D’’ and in-
serting ‘‘part E’’.
(4) Part C of title XVIII of such Act is
amended—
(A) in section 1851(a)(2)(B) (42 U.S.C.
1395w–21(a)(2)(B)), by striking ‘‘1859(b)(3)’’
and inserting ‘‘1858(b)(3)’’;
(B) in section 1851(a)(2)(C) (42 U.S.C.
1395w–21(a)(2)(C)), by striking ‘‘1859(b)(2)’’
and inserting ‘‘1858(b)(2)’’;
(C) in section 1852(a)(1) (42 U.S.C.
1395w–22(a)(1)), by striking ‘‘1859(b)(3)’’ and
inserting ‘‘1858(b)(3)’’;
(D) 
in 
section 
1852(a)(3)(B)(ii) 
(42
U.S.C. 1395w–22(a)(3)(B)(ii)), by striking
‘‘1859(b)(2)(B)’’ 
and 
inserting
‘‘1858(b)(2)(B)’’;
(E) in section 1853(a)(1)(A) (42 U.S.C.
1395w–23(a)(1)(A)), by striking ‘‘1859(e)(4)’’
and inserting ‘‘1858(e)(4)’’; and
(F) in section 1853(a)(3)(D) (42 U.S.C.
1395w–23(a)(3)(D)), by striking ‘‘1859(e)(4)’’
and inserting ‘‘1858(e)(4)’’.
(5) Section 1853(c) of such Act (42 U.S.C.
1395w–23(c)) is amended—
(A) in paragraph (1), by striking ‘‘or (7)’’
and inserting ‘‘, (7), or (8)’’, and
(B) by adding at the end the following:
‘‘(8) ADJUSTMENT FOR CAREGIVER ACCESS.—
In applying this subsection with respect to individ-
uals entitled to benefits under part D, the Secretary
shall provide for an appropriate adjustment in the
Medicare+Choice capitation rate as may be appro-
priate to reflect differences between the population
served under such part and the population under
parts A and B.’’.
(c) OTHER CONFORMING AMENDMENTS.—
(1) Section 138(b)(4) of the Internal Revenue
Code of 1986 is amended by striking ‘‘1859(b)(3)’’
and inserting ‘‘1858(b)(3)’’.
‘‘(A) IN GENERAL.—The term ‘applicable
individual’ means, with respect to any taxable
year, any individual who has been certified, be-
fore the due date for filing the return of tax for
the taxable year (without extensions), by a phy-
sician (as defined in section 1861(r)(1) of the
Social Security Act) as being an individual with
long-term care needs described in subparagraph
(B) for a period—
‘‘(i) which is at least 180 consecutive
days, and
‘‘(ii) a portion of which occurs within
the taxable year.
Such term shall not include any individual oth-
erwise meeting the requirements of the pre-
ceding sentence unless within the 391⁄2 month
period ending on such due date (or such other
period as the Secretary prescribes) a physician
(as so defined) has certified that such indi-
vidual meets such requirements.
‘‘(B) INDIVIDUALS WITH LONG-TERM CARE
NEEDS.—An individual is described in this sub-
paragraph if the individual meets any of the fol-
lowing requirements:
‘‘(i) The individual is at least 6 years
of age and—
‘‘(I) is unable to perform (with-
out substantial assistance from an-
other individual) at least 3 activities
of daily living (as defined in section
7702B(c)(2)(B)) due to a lack of
functional capacity, or
‘‘(II) requires substantial super-
vision to protect such individual from
threats to health and safety due to se-
vere cognitive impairment and is un-
able to perform at least 1 activity of
daily living (as so defined) or to the
extent provided in regulations pre-
scribed by the Secretary (in consulta-
tion with the Secretary of Health and
Human Services), is unable to engage
in age appropriate activities.
‘‘(ii) The individual is at least 2 but
not 6 years of age and is unable due to a
loss of functional capacity to perform
(without substantial assistance from an-
other individual) at least 2 of the following
activities: eating, transferring, or mobility.
‘‘(iii) The individual is under 2 years
of age and requires specific durable med-
ical equipment by reason of a severe health
condition or requires a skilled practitioner
trained to address the individual’s condi-
tion to be available if the individual’s par-
ents or guardians are absent.
‘‘(2) ELIGIBLE CAREGIVER.—
‘‘(A) IN GENERAL.—A taxpayer shall be
treated as an eligible caregiver for any taxable
year with respect to the following individuals:
‘‘(i) The taxpayer.
‘‘(ii) The taxpayer’s spouse.
‘‘(iii) An individual with respect to
whom the taxpayer is allowed a deduction
under section 151 for the taxable year.
‘‘(iv) An individual who would be de-
scribed in clause (iii) for the taxable year
if section 151(c)(1)(A) were applied by
substituting for the exemption amount an
amount equal to 200 percent of the pov-
erty level determined by using criteria of
poverty established by the Bureau of the
Census.
‘‘(v) An individual who would be de-
scribed in clause (iii) for the taxable year
if—
‘‘(I) the requirements of clause
(iv) are met with respect to the indi-
vidual, and
‘‘(II) the requirements of sub-
paragraph (B) are met with respect to
the individual in lieu of the support
test of section 152(a).
‘‘(B) RESIDENCY
TEST.—The require-
ments of this subparagraph are met if an indi-
vidual has as his principal place of abode the
home of the taxpayer and—
‘‘(i) in the case of an individual who
is an ancestor or descendant of the tax-
payer or the taxpayer’s spouse, is a mem-
ber of the taxpayer’s household for over
half the taxable year, or
‘‘(ii) in the case of any other indi-
vidual, is a member of the taxpayer’s
household for the entire taxable year.
‘‘(C) SPECIAL RULES WHERE MORE THAN
1 ELIGIBLE CAREGIVER.—
‘‘(i) IN GENERAL.—If more than 1 in-
dividual is an eligible caregiver with re-
spect to the same applicable individual for
taxable years ending with or within the
same calendar year, a taxpayer shall be
treated as the eligible caregiver if each
such individual (other than the taxpayer)
files a written declaration (in such form
and manner as the Secretary may pre-
scribe) that such individual will not claim
such applicable individual for the credit
under this section.
‘‘(ii) NO AGREEMENT.—If each indi-
vidual required under clause (i) to file a
written declaration under clause (i) does
not do so, the individual with the highest
modified adjusted gross income (as defined
in section 32(c)(5)) shall be treated as the
eligible caregiver.
‘‘(iii) MARRIED
INDIVIDUALS
FILING
SEPARATELY.—In the case of married indi-
viduals filing separately, the determination
under this subparagraph as to whether the
husband or wife is the eligible caregiver
shall be made under the rules of clause (ii)
(whether or not one of them has filed a
written declaration under clause (i)).
‘‘(d) IDENTIFICATION
REQUIREMENT.—No credit
shall be allowed under this section to a taxpayer with re-
spect to any applicable individual unless the taxpayer in-
cludes the name and taxpayer identification number of
such individual, and the identification number of the phy-
sician certifying such individual, on the return of tax for
the taxable year.
‘‘(e) TAXABLE YEAR MUST BE FULL TAXABLE
YEAR.—Except in the case of a taxable year closed by rea-
son of the death of the taxpayer, no credit shall be allow-
able under this section in the case of a taxable year cov-
ering a period of less than 12 months.’’.
(b) CONFORMING AMENDMENTS.—
(1) Paragraph (1) of section 26(a) of such Code
is amended by striking ‘‘and 25B’’ and inserting
‘‘25B, and 25C’’.
(2) Paragraph (2) of section 6213(g) of such
Code is amended by striking ‘‘and’’ at the end of
subparagraph (L), by striking the period at the end
of subparagraph (M) and inserting ‘‘, and’’, and by
inserting after subparagraph (M) the following new
subparagraph:
‘‘(N) an omission of a correct TIN or phy-
sician identification required under section
25C(d) (relating to long-term care tax credit) to
be included on a return.’’
(3) The table of sections for subpart A of part
IV of subchapter A of chapter 1 of such Code is
amended by inserting after the item relating to sec-
tion 25B the following new item:
‘‘Sec. 25C. Long-term care tax credit.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2002.
SEC. 4. DEPARTMENT OF HEALTH AND HUMAN SERVICES
PROGRAMS 
FOR 
PATIENTS 
WITH 
FATAL
CHRONIC ILLNESSES.
(a) ESTABLISHMENT OF PROGRAMS.—The Secretary
of Health and Human Services shall carry out research,
demonstration, and education programs with respect to
fatal chronic illness through the Public Health Service.
(b) STUDIES
ON END-OF-LIFE CARE.—The Sec-
retary shall conduct studies on end-of-life care through all
relevant agencies and through the Assistant Secretary for
Planning and Evaluation. Such studies shall include an
examination of the development of practice parameters ap-
plicable to such care as well as research regarding such
care. Such studies shall also include an annual report from
the Secretary to the appropriate committees for oversight
in Congress and to the Special Committee on Aging in
the Senate on service delivery and quality of life for per-
sons living through fatal chronic illness and their families
and professional caregivers.
(c) HEALTH RESOURCES AND SERVICES ADMINIS-
TRATION.—
(1) IN GENERAL.—In carrying out subsection
(a), the Secretary, acting through the Administrator
of the Health Resources and Services Administra-
tion, shall carry out research, demonstration, and
education programs toward improving the delivery of
appropriate health and support services for patients
with fatal chronic illnesses.
(2) HEALTH CENTERS.—As determined appro-
priate by the Secretary, paragraph (1) may be car-
ried out through the program under section 330 of
the Public Health Service Act (relating to commu-
nity and migrant health centers and health centers
regarding homeless individuals and residents of pub-
lic housing), including by designating individuals
with fatal chronic illnesses as medically underserved
populations.
(3) CAREGIVERS.—Programs under paragraph
(1) shall include activities regarding appropriate
support services for caregivers for patients with fatal
chronic illness, including respite care.
(4) HEALTH
PROFESSIONS
TRAINING.—Pro-
grams under paragraph (1) shall include making
awards of grants or contracts to public and non-
profit private entities for the purpose of training
health professionals, including students attending
health professions schools, in the care of patients
with fatal chronic illnesses. Such training shall in-
clude training in the provision of appropriate pallia-
tive care and appropriate referral to hospices, and
training provided as continuing education.
(5) INITIATIVE.—Programs under paragraph
(1) shall include an initiative to coordinate innova-
tion, evaluation, and service delivery relating to fatal
chronic illnesses.
(d) AGENCY
FOR HEALTHCARE RESEARCH
AND
QUALITY.—
(1) IN
GENERAL.—In carrying out section
912(c) of the Public Health Service Act, the Sec-
retary, acting through the Director of the Agency
for Healthcare Research and Quality, shall, with re-
spect to patients with fatal chronic illnesses—
(A) identify the causes of preventable
health care errors and patient injury in health
care delivery, including errors of inadequate
mobilization of services to the home, inadequate
continuity of caregivers, inadequate symptom
prevention, management, and relief, or inad-
equate advance care planning;
(B) develop, demonstrate, and evaluate
strategies for reliable performance of the care
system, including reducing errors and improv-
ing patient safety and health outcomes; and
(C) disseminate such effective strategies
throughout the health care industry.
(2) 
GRANTS.—In 
carrying 
out 
paragraph
(1)(A), the Secretary shall make grants for the pur-
pose of developing reliable and current data and in-
sight as to the merits and efficiencies of various
strategies for providing health care, including pallia-
tive and hospice care, and social services for patients
with fatal chronic illnesses.
(e) CENTERS FOR DISEASE CONTROL AND PREVEN-
TION.—The Director of the Centers for Disease Control
and Prevention shall expand activities with respect to epi-
demiology and public health in fatal chronic illness. Such
activities may include contracting with the Institute of
Medicine or another national interest non-profit organiza-
tion to provide a review of the status of care for the end
of life, which review shall be included by the Secretary in
the annual reports to Congress under subsection (h).
(f) NATIONAL INSTITUTES OF HEALTH.—
(1) EXPANSION OF ACTIVITIES.—The Director
of the National Institutes of Health (in this sub-
section referred to as the ‘‘Director’’) shall expand,
intensify, and coordinate the activities of the Na-
tional Institutes of Health with respect to research
on fatal chronic illness. Such activities shall include
programs, requests for proposals, study section
membership, advisory council membership, and
training programs to support rapid and substantial
improvements in understanding—
(A) mechanisms of disability and suffering
in fatal chronic illness and the relief and man-
agement of that disability and suffering
through to end of life; and
(B) human resources, service delivery ar-
rangements, technology, and financing that
would be most useful in ensuring comfort and
dignity for individuals with fatal chronic illness,
and in relieving the burden for family and pro-
fessional caregivers.
(2) 
ADMINISTRATION.—The 
Director 
shall
carry out this subsection acting through the Direc-
tors of every Institute within the National Institutes
of Health that has at least one fatal chronic illness
in its purview.
(3) COLLABORATION.—In carrying out this sub-
section, the Director of the National Institutes of
Health shall collaborate with the Department of Vet-
erans Affairs, the Agency for Healthcare Research
and Quality, and any other agency that the Director
determines appropriate. The Secretary of Veterans
Affairs and the Director of the Agency for
Healthcare Research and Quality shall assist in such
collaboration.
(4) RESPONSIBILITIES OF INSTITUTES.—Each
Institute within the National Institutes of Health
that has fatal chronic illness in its purview shall es-
tablish a plan for improving understanding of the
mechanisms of disability and suffering in fatal
chronic illness and the relief and management of
that disability and suffering through to end of life.
Since most Americans now die of chronic heart or
lung failure, cancer, stroke, dementia, or multifacto-
rial frailty, each such Institute shall develop and im-
plement a strategic plan and a set of projects that
aim primarily to ensure that affected patients and
their families can live through advanced illness and
death comfortably and meaningfully.
(5) CENTERS OF EXCELLENCE.—
(A) IN GENERAL.—In carrying out para-
graph (1), the Director shall make awards of
grants and contracts to public or nonprofit pri-
vate entities for the establishment and oper-
ation of centers of excellence to carry out re-
search, demonstration, and education programs
regarding fatal chronic illness, including pro-
grams regarding palliative care.
(B) DESIGNATION.—In carrying out this
subsection, the Director shall designate at least
2 Claude D. Pepper Older Americans Independ-
ence Centers (supported by the National Insti-
tute on Aging), 2 program projects of the Na-
tional, Heart, Lung, and Blood Institute, and 2
comprehensive cancer centers (supported by the
National Cancer Institute) to provide education
and information support and research data and
methods leadership for substantial and rapid
improvements in the understanding of the
mechanisms of disability and suffering in fatal
chronic illness and the relief and management
of that disability and suffering through to the
end of life.
(C) RESEARCH.—Each center established
or operated under subparagraph (A) or des-
ignated under subparagraph (B) shall conduct
basic and clinical research into fatal chronic ill-
ness.
(D) CERTAIN ACTIVITIES.—The Secretary
shall ensure that, with respect to the geographic
area in which a center of excellence under sub-
paragraph (A) is located, the activities of the
center include—
(i) providing information and edu-
cation regarding fatal chronic illness to
health professionals and the public;
(ii) serving as a resource through
which health professionals, and patients
and their caregivers, can plan and coordi-
nate the provision of health and support
services regarding fatal chronic illness; and
(iii) providing training and support of
implementation of quality improvement.
(g) MEDICARE PILOT PROGRAMS FOR TREATMENT
OF FATAL CHRONIC ILLNESSES.—
(1) ESTABLISHMENT.—The Secretary, in all
relevant parts of the Department of Health and
Human Services, including the Centers for Medicare
& Medicaid Services and the Office of the Assistant
Secretary for Planning and Evaluation, shall provide
for pilot programs under this subsection. The pilot
programs shall be developed under a coordinated na-
tional effort in order to demonstrate innovative, ef-
fective means of delivering care to Medicare bene-
ficiaries with fatal chronic illnesses under the Medi-
care program. The pilot programs shall be completed
within 5 years after the date that funds are first ap-
propriated under this subsection.
(2) DESIGN.—The pilot programs under this
subsection shall be designed to learn how—
(A) to effectively and efficiently deliver
quality care to the fatally chronically ill;
(B) to provide and maintain continuity of
care for the fatally chronically ill;
(C) to provide advance care planning to
the fatally chronically ill;
(D) to determine what rate and strategies
for payment are most appropriate;
(E) to deliver emergency care for the fa-
tally chronically ill;
(F) to facilitate access to hospice care
when the Medicare beneficiary becomes eligible
for such care;
(G) to develop and estimate the effect of
potential alternative severity criteria for eligi-
bility of specially tailored programs;
(H) to test the effectiveness and costs of
new strategies for family caregivers support;
(I) to implement a clinical services and
payment program that uses thresholds of sever-
ity to define the onset of the need for com-
prehensive end-of-life services;
(J) to test the merits of using severity cri-
teria (relating to fatal chronic illness) in deter-
mining eligibility for the Medicare hospice pro-
gram, but only when use of such criteria ex-
pands access to hospice care to individuals who
are not yet terminally ill (as that term is de-
fined at section 1861(dd)(3)(A) of the Social
Security Act); and
(K) to arrange financial incentives so that
substantially diminished payments arise when
care providers fail to ensure timely advance
care planning, symptom prevention, manage-
ment, and relief, or continuity of care across
time and settings.
(3) CONDUCT OF PILOT PROGRAMS.—The Sec-
retary shall conduct pilot programs in at least 6
sites and in at least 3 States.
(4) REPORT
TO
CONGRESS.—The Secretary
shall submit to Congress a report on the pilot pro-
grams under this subsection. Such report shall in-
clude recommendations regarding whether the pilot
programs should become a permanent part of the
Medicare program.
(h) ANNUAL REPORTS.—The Secretary, in consulta-
tion with the Secretary of Veterans Affairs and other ap-
propriate Federal agencies, shall submit an annual report
to Congress on end-of-life care and on the research, dem-
onstration, and education programs and studies conducted
under this section. The Centers for Disease Control and
Prevention shall be the lead agency for integrating and
preparing the annual reports under this subsection unless
the Secretary designates otherwise.
(i) DEFINITIONS.—For purposes of this section:
(1) The term ‘‘fatal chronic illness’’ means a
disease (or diseases), condition (or conditions), or
disorder (or disorders) that ordinarily worsens and
causes death and that causes a physical or mental
disability or periodic episodes of significant loss of
functional capacity.
(2) The term ‘‘Secretary’’ means the Secretary
of Health and Human Services.
(j) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated—
(1) such sums as may be necessary to carry out
subsections (a), (b), (e), and (f);
(2) $50,000,000 for the 5-fiscal-year period (be-
ginning with fiscal year 2004) to carry out sub-
section (c), excluding paragraph (5) of that sub-
section;
(3) $100,000,000 for the 3-fiscal-year period
(beginning with fiscal year 2004) to carry out sub-
section (c)(5);
(4) $20,000,000 for the 5-fiscal-year period (be-
ginning with fiscal year 2004) to carry out sub-
section (d);
(5) to carry out subsection (g) for each of fiscal
years 2003 through 2007—
(A) $50,000,000 for the purposes of con-
ducting evaluations of pilot programs; and
(B) $50,000,000 for the purpose of pro-
viding clinical services under pilot programs;
and
(6) $500,000 for each fiscal year during the 5-
fiscal-year period beginning with fiscal year 2004 to
carry out subsection (h).
SEC. 5. PROGRAMS THROUGH DEPARTMENT OF VETERANS
AFFAIRS REGARDING PATIENTS WITH FATAL
CHRONIC ILLNESSES.
(a) IN GENERAL.—(1) Chapter 73 of title 38, United
States Code, is amended by adding at the end of sub-
chapter II the following new section:
‘‘§ 7324. Programs for patients with fatal chronic ill-
nesses
‘‘(a) ESTABLISHMENT OF PROGRAMS.—(1) The Sec-
retary shall develop and carry out programs to improve
the delivery of appropriate health and support services for
patients with fatal chronic illnesses. As part of such pro-
grams, the Secretary shall seek to develop services in col-
laboration with community service providers serving popu-
lations of persons other than veterans, especially those
populations that use the Medicare program.
‘‘(2) For purposes of this section, community service
providers are entities outside the Department that provide
health care services to persons in the communities in
which they are located.
‘‘(b) ROLE OF GRECCS AND HEALTH SERVICES RE-
SEARCH.—The Secretary shall take appropriate steps to
involve in programs under this section both geriatric re-
search, education, and clinical centers under section 7314
of this title and activities of Health Services research and
quality improvement initiatives of the Department. As
part of such steps, the Secretary shall seek to target the
work of such centers and initiatives to improve care for
veterans with fatal chronic illnesses.
‘‘(c) TRAINING.—In conducting programs of profes-
sional training and staff development for health-care per-
sonnel of the Department and persons being trained
through health-care programs conducted by the Secretary,
the Secretary shall ensure that such programs include
training in pain relief and end-of-life care for persons with
fatal chronic illnesses. Such training shall address symp-
toms, advance care planning, and quality improvement for
those with fatal chronic illnesses.
‘‘(d) ANNUAL REPORT.—The Secretary shall prepare
an annual report on care for veterans with fatal chronic
illnesses and the activities of the Secretary under this sec-
tion. The Secretary shall furnish such report to the Sec-
retary of Health and Human Services each year in suffi-
cient time for inclusion in the annual report of that Sec-
retary under section 4(j) of the Living Well with Fatal
Chronic Illness Act of 2002.
‘‘(e) COOPERATION WITH COMMUNITY SERVICE PRO-
VIDERS.—(1) In carrying out this section, the Secretary
shall, to the extent practicable, take appropriate steps,
through collaborative agreements or otherwise, to cooper-
ate with community service providers that provide home
and hospice care.
‘‘(2) Such steps shall, to the extent practicable,
include—
‘‘(A) developing documentation of advance care
plans for persons with fatal chronic illnesses that are
acceptable to all providers of care for those persons;
‘‘(B) developing service programs for persons
with fatal chronic illnesses under which Department
facilities or personnel may be used for part of the
array of services provided to such persons; and
‘‘(C) developing protocols that facilitate the
placement with community service providers sup-
ported by the medicare or medicaid programs of vet-
erans with fatal chronic illnesses when such a place-
ment would be more efficient or effective for the
timely provision of services for the community in
which the facilities are located and for such veterans
than the provision of those services directly through
Department facilities.
‘‘(3) When the Secretary, as part of service programs
authorized by this subsection, provides services to a person
with a fatal chronic illness who is not a veteran, the Sec-
retary shall, as a condition of providing such services, be
reimbursed by appropriate community service providers
for the costs of such services.
‘‘(f) SUPPORT FOR VOLUNTEER AND COMMUNITY
SUPPORT OF VETERANS LIVING AT HOME.—The Sec-
retary shall make grants to support volunteer and commu-
nity support of veterans living at home who have fatal
chronic illnesses. The Secretary may establish the min-
imum number of volunteers an entity must have in order
to be eligible for a grant under this subsection.
‘‘(g) DEFINITION.—For purposes of this section, the
term ‘fatal chronic illness’ means a disease (or diseases),
condition (or conditions), or disorder (or disorders) that
ordinarily worsens and causes death and that causes a
physical or mental disability or periodic episodes of signifi-
cant loss of functional capacity.’’.
(2) The table of sections at the beginning of such
chapter is amended by inserting after the item relating
to section 7323 the following new item:
‘‘7324. Programs for patients with fatal chronic illnesses.’’.
(b) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated to the Secretary of Vet-
erans Affairs to carry out section 7324 of title 38, United
States Code, as added by subsection (a), the amount of
$5,000,000 for each of fiscal years 2003 through 2007.
Æ