H. R. 1—278
care management programs and demonstrated experience in
the evaluation of such programs. Each evaluation shall include
an assessment of the following factors of the programs:
‘‘(A) Quality improvement measures, such as adherence
to evidence-based guidelines and rehospitalization rates.
‘‘(B) Beneficiary and provider satisfaction.
‘‘(C) Health outcomes.
‘‘(D) Financial outcomes, including any cost savings
to the program under this title.
‘‘(c) EXPANDED IMPLEMENTATION PHASE (PHASE II).—
‘‘(1) IN GENERAL.—With respect to chronic care improve-
ment programs conducted under subsection (b), if the Secretary
finds that the results of the independent evaluation conducted
under subsection (b)(6) indicate that the conditions specified
in paragraph (2) have been met by a program (or components
of such program), the Secretary shall enter into agreements
consistent with subsection (f) to expand the implementation
of the program (or components) to additional geographic areas
not covered under the program as conducted under subsection
(b), which may include the implementation of the program
on a national basis. Such expansion shall begin not earlier
than 2 years after the program is implemented under subsection
(b) and not later than 6 months after the date of completion
of such program.
‘‘(2) CONDITIONS FOR EXPANSION OF PROGRAMS.—The condi-
tions specified in this paragraph are, with respect to a chronic
care improvement program conducted under subsection (b) for
a threshold condition, that the program is expected to—
‘‘(A) improve the clinical quality of care;
‘‘(B) improve beneficiary satisfaction; and
‘‘(C) achieve targets for savings to the program under
this title specified by the Secretary in the agreement within
a range determined to be appropriate by the Secretary,
subject to the application of budget neutrality with respect
to the program and not taking into account any payments
by the organization under the agreement under the pro-
gram for risk under subsection (f)(3)(B).
‘‘(3) INDEPENDENT EVALUATIONS OF PHASE II PROGRAMS.—
The Secretary shall carry out evaluations of programs expanded
under this subsection as the Secretary determines appropriate.
Such evaluations shall be carried out in the similar manner
as is provided under subsection (b)(5).
‘‘(d) IDENTIFICATION AND ENROLLMENT OF PROSPECTIVE PRO-
GRAM PARTICIPANTS.—
‘‘(1) IDENTIFICATION
OF
PROSPECTIVE
PROGRAM
PARTICI-
PANTS.—The Secretary shall establish a method for identifying
targeted beneficiaries who may benefit from participation in
a chronic care improvement program.
‘‘(2) INITIAL CONTACT BY SECRETARY.—The Secretary shall
communicate with each targeted beneficiary concerning partici-
pation in a chronic care improvement program. Such commu-
nication may be made by the Secretary and shall include
information on the following:
‘‘(A) A description of the advantages to the beneficiary
in participating in a program.
H. R. 1—279
‘‘(B) Notification that the organization offering a pro-
gram may contact the beneficiary directly concerning such
participation.
‘‘(C) Notification that participation in a program is
voluntary.
‘‘(D) A description of the method for the beneficiary
to participate or for declining to participate and the method
for obtaining additional information concerning such
participation.
‘‘(3) VOLUNTARY
PARTICIPATION.—A targeted beneficiary
may participate in a chronic care improvement program on
a voluntary basis and may terminate participation at any time.
‘‘(e) CHRONIC CARE IMPROVEMENT PROGRAMS.—
‘‘(1) IN GENERAL.—Each chronic care improvement program
shall—
‘‘(A) have a process to screen each targeted beneficiary
for conditions other than threshold conditions, such as
impaired cognitive ability and co-morbidities, for the pur-
poses of developing an individualized, goal-oriented care
management plan under paragraph (2);
‘‘(B) provide each targeted beneficiary participating in
the program with such plan; and
‘‘(C) carry out such plan and other chronic care
improvement activities in accordance with paragraph (3).
‘‘(2) ELEMENTS
OF
CARE
MANAGEMENT
PLANS.—A care
management plan for a targeted beneficiary shall be developed
with the beneficiary and shall, to the extent appropriate,
include the following:
‘‘(A) A designated point of contact responsible for
communications with the beneficiary and for facilitating
communications with other health care providers under
the plan.
‘‘(B) Self-care education for the beneficiary (through
approaches such as disease management or medical nutri-
tion therapy) and education for primary caregivers and
family members.
‘‘(C) Education for physicians and other providers and
collaboration to enhance communication of relevant clinical
information.
‘‘(D) The use of monitoring technologies that enable
patient guidance through the exchange of pertinent clinical
information, such as vital signs, symptomatic information,
and health self-assessment.
‘‘(E) The provision of information about hospice care,
pain and palliative care, and end-of-life care.
‘‘(3) CONDUCT OF PROGRAMS.—In carrying out paragraph
(1)(C) with respect to a participant, the chronic care improve-
ment organization shall—
‘‘(A) guide the participant in managing the participant’s
health (including all co-morbidities, relevant health care
services, and pharmaceutical needs) and in performing
activities as specified under the elements of the care
management plan of the participant;
‘‘(B) use decision-support tools such as evidence-based
practice guidelines or other criteria as determined by the
Secretary; and
H. R. 1—280
‘‘(C) develop a clinical information database to track
and monitor each participant across settings and to
evaluate outcomes.
‘‘(4) ADDITIONAL RESPONSIBILITIES.—
‘‘(A) OUTCOMES REPORT.—Each chronic care improve-
ment organization offering a chronic care improvement pro-
gram shall monitor and report to the Secretary, in a
manner specified by the Secretary, on health care quality,
cost, and outcomes.
‘‘(B) ADDITIONAL REQUIREMENTS.—Each such organiza-
tion and program shall comply with such additional
requirements as the Secretary may specify.
‘‘(5) ACCREDITATION.—The Secretary may provide that
chronic care improvement programs and chronic care improve-
ment organizations that are accredited by qualified organiza-
tions (as defined by the Secretary) may be deemed to meet
such requirements under this section as the Secretary may
specify.
‘‘(f) TERMS OF AGREEMENTS.—
‘‘(1) TERMS AND CONDITIONS.—
‘‘(A) IN GENERAL.—An agreement under this section
with a chronic care improvement organization shall contain
such terms and conditions as the Secretary may specify
consistent with this section.
‘‘(B) CLINICAL, QUALITY IMPROVEMENT, AND FINANCIAL
REQUIREMENTS.—The Secretary may not enter into an
agreement with such an organization under this section
for the operation of a chronic care improvement program
unless—
‘‘(i) the program and organization meet the require-
ments of subsection (e) and such clinical, quality
improvement, financial, and other requirements as the
Secretary deems to be appropriate for the targeted
beneficiaries to be served; and
‘‘(ii) the organization demonstrates to the satisfac-
tion of the Secretary that the organization is able
to assume financial risk for performance under the
agreement (as applied under paragraph (3)(B)) with
respect to payments made to the organization under
such agreement through available reserves, reinsur-
ance, withholds, or such other means as the Secretary
determines appropriate.
‘‘(2) MANNER OF PAYMENT.—Subject to paragraph (3)(B),
the payment under an agreement under—
‘‘(A) subsection (b) shall be computed on a per-member
per-month basis; or
‘‘(B) subsection (c) may be on a per-member per-month
basis or such other basis as the Secretary and organization
may agree.
‘‘(3) APPLICATION OF PERFORMANCE STANDARDS.—
‘‘(A) SPECIFICATION
OF
PERFORMANCE
STANDARDS.—
Each agreement under this section with a chronic care
improvement organization shall specify performance stand-
ards for each of the factors specified in subsection (c)(2),
including clinical quality and spending targets under this
title, against which the performance of the chronic care
H. R. 1—281
improvement organization under the agreement is meas-
ured.
‘‘(B) ADJUSTMENT
OF
PAYMENT
BASED
ON
PERFORM-
ANCE.—
‘‘(i) IN GENERAL.—Each such agreement shall pro-
vide for adjustments in payment rates to an organiza-
tion under the agreement insofar as the Secretary
determines that the organization failed to meet the
performance standards specified in the agreement
under subparagraph (A).
‘‘(ii) FINANCIAL RISK FOR PERFORMANCE.—In the
case of an agreement under subsection (b) or (c), the
agreement shall provide for a full recovery for any
amount by which the fees paid to the organization
under the agreement exceed the estimated savings to
the 
programs 
under 
this 
title 
attributable 
to
implementation of such agreement.
‘‘(4) BUDGET
NEUTRAL
PAYMENT
CONDITION.—Under this
section, the Secretary shall ensure that the aggregate sum
of medicare program benefit expenditures for beneficiaries
participating in chronic care improvement programs and funds
paid to chronic care improvement organizations under this sec-
tion, shall not exceed the medicare program benefit expendi-
tures that the Secretary estimates would have been made for
such targeted beneficiaries in the absence of such programs.
‘‘(g) FUNDING.—(1) Subject to paragraph (2), there are appro-
priated to the Secretary, in appropriate part from the Federal
Hospital Insurance Trust Fund and the Federal Supplementary
Medical Insurance Trust Fund, such sums as may be necessary
to provide for agreements with chronic care improvement programs
under this section.
‘‘(2) In no case shall the funding under this section exceed
$100,000,000 in aggregate increased expenditures under this title
(after taking into account any savings attributable to the operation
of this section) over the 3-fiscal-year period beginning on October
1, 2003.’’.
(b) REPORTS.—The Secretary shall submit to Congress reports
on the operation of section 1807 of the Social Security Act, as
added by subsection (a), as follows:
(1) Not later than 2 years after the date of the implementa-
tion of such section, the Secretary shall submit to Congress
an interim report on the scope of implementation of the pro-
grams under subsection (b) of such section, the design of the
programs, and preliminary cost and quality findings with
respect to those programs based on the following measures
of the programs:
(A) Quality improvement measures, such as adherence
to evidence-based guidelines and rehospitalization rates.
(B) Beneficiary and provider satisfaction.
(C) Health outcomes.
(D) Financial outcomes.
(2) Not later than 3 years and 6 months after the date
of the implementation of such section the Secretary shall submit
to Congress an update to the report required under paragraph
(1) on the results of such programs.
(3) The Secretary shall submit to Congress 2 additional
biennial reports on the chronic care improvement programs
H. R. 1—282
conducted under such section. The first such report shall be
submitted not later than 2 years after the report is submitted
under paragraph (2). Each such report shall include information
on—
(A) the scope of implementation (in terms of both
regions and chronic conditions) of the chronic care improve-
ment programs;
(B) the design of the programs; and
(C) the improvements in health outcomes and financial
efficiencies that result from such implementation.
SEC. 722. MEDICARE ADVANTAGE QUALITY IMPROVEMENT PROGRAMS.
(a) IN GENERAL.—Section 1852(e) (42 U.S.C. 1395w–22(e)) is
amended—
(1) in the heading, by striking ‘‘ASSURANCE’’ and inserting
‘‘IMPROVEMENT’’;
(2) by amending paragraphs (1) through (3) to read as
follows:
‘‘(1) IN GENERAL.—Each MA organization shall have an
ongoing quality improvement program for the purpose of
improving the quality of care provided to enrollees in each
MA plan offered by such organization (other than an MA private
fee-for-service plan or an MSA plan).
‘‘(2) CHRONIC CARE IMPROVEMENT PROGRAMS.—As part of
the quality improvement program under paragraph (1), each
MA organization shall have a chronic care improvement pro-
gram. Each chronic care improvement program shall have a
method for monitoring and identifying enrollees with multiple
or sufficiently severe chronic conditions that meet criteria estab-
lished by the organization for participation under the program.
‘‘(3) DATA.—
‘‘(A) COLLECTION, ANALYSIS, AND REPORTING.—
‘‘(i) IN GENERAL.—Except as provided in clauses
(ii) and (iii) with respect to plans described in such
clauses and subject to subparagraph (B), as part of
the quality improvement program under paragraph (1),
each MA organization shall provide for the collection,
analysis, and reporting of data that permits the
measurement of health outcomes and other indices
of quality.
‘‘(ii) APPLICATION
TO
MA
REGIONAL
PLANS.—The
Secretary shall establish as appropriate by regulation
requirements for the collection, analysis, and reporting
of data that permits the measurement of health out-
comes and other indices of quality for MA organizations
with respect to MA regional plans. Such requirements
may not exceed the requirements under this subpara-
graph with respect to MA local plans that are preferred
provider organization plans.
‘‘(iii) 
APPLICATION
TO
PREFERRED
PROVIDER
ORGANIZATIONS.—Clause 
(i) 
shall 
apply 
to 
MA
organizations with respect to MA local plans that are
preferred provider organization plans only insofar as
services are furnished by providers or services, physi-
cians, and other health care practitioners and suppliers
that have contracts with such organization to furnish
services under such plans.
H. R. 1—283
‘‘(iv) 
DEFINITION
OF
PREFERRED
PROVIDER
ORGANIZATION PLAN.—In this subparagraph, the term
‘preferred provider organization plan’ means an MA
plan that—
‘‘(I) has a network of providers that have
agreed to a contractually specified reimbursement
for covered benefits with the organization offering
the plan;
‘‘(II) provides for reimbursement for all covered
benefits regardless of whether such benefits are
provided within such network of providers; and
‘‘(III) is offered by an organization that is not
licensed or organized under State law as a health
maintenance organization.
‘‘(B) LIMITATIONS.—
‘‘(i) TYPES OF DATA.—The Secretary shall not collect
under subparagraph (A) data on quality, outcomes,
and beneficiary satisfaction to facilitate consumer
choice and program administration other than the
types of data that were collected by the Secretary
as of November 1, 2003.
‘‘(ii) CHANGES IN TYPES OF DATA.—Subject to sub-
clause (iii), the Secretary may only change the types
of data that are required to be submitted under
subparagraph (A) after submitting to Congress a report
on the reasons for such changes that was prepared
in consultation with MA organizations and private
accrediting bodies.
‘‘(iii) CONSTRUCTION.—Nothing in the subsection
shall be construed as restricting the ability of the
Secretary to carry out the duties under section
1851(d)(4)(D).’’;
(3) in paragraph (4)(B)—
(A) by amending clause (i) to read as follows:
‘‘(i) Paragraphs (1) through (3) of this subsection
(relating to quality improvement programs).’’; and
(B) by adding at the end the following new clause:
‘‘(vii) The requirements described in section
1860D–4(j), to the extent such requirements apply
under section 1860D–21(c).’’; and
(4) by striking paragraph (5).
(b) CONFORMING AMENDMENT.—Section 1852(c)(1)(I) (42 U.S.C.
1395w–22(c)(1)(I)) is amended to read as follows:
‘‘(I) QUALITY IMPROVEMENT PROGRAM.—A description
of the organization’s quality improvement program under
subsection (e).’’.
(c) EFFECTIVE DATE.—The amendments made by this section
shall apply with respect to contract years beginning on and after
January 1, 2006.
SEC. 723. CHRONICALLY ILL MEDICARE BENEFICIARY RESEARCH,
DATA, DEMONSTRATION STRATEGY.
(a) DEVELOPMENT OF PLAN.—Not later than 6 months after
the date of the enactment of this Act, the Secretary shall develop
a plan to improve quality of care and reduce the cost of care
for chronically ill medicare beneficiaries.
H. R. 1—284
(b) PLAN REQUIREMENTS.—The plan will utilize existing data
and identify data gaps, develop research initiatives, and propose
intervention demonstration programs to provide better health care
for chronically ill medicare beneficiaries. The plan shall—
(1) integrate existing data sets including, the Medicare
Current Beneficiary Survey (MCBS), Minimum Data Set (MDS),
Outcome and Assessment Information Set (OASIS), data from
Quality Improvement Organizations (QIO), and claims data;
(2) identify any new data needs and a methodology to
address new data needs;
(3) plan for the collection of such data in a data warehouse;
and
(4) develop a research agenda using such data.
(c) CONSULTATION.—In developing the plan under this section,
the Secretary shall consult with experts in the fields of care for
the chronically ill (including clinicians).
(d) IMPLEMENTATION.—Not later than 2 years after the date
of the enactment of this Act, the Secretary shall implement the
plan developed under this section. The Secretary may contract
with appropriate entities to implement such plan.
(e) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to the Secretary such sums as may be necessary
in fiscal years 2004 and 2005 to carry out this section.
Subtitle D—Other Provisions
SEC. 731. IMPROVEMENTS IN NATIONAL AND LOCAL COVERAGE
DETERMINATION PROCESS TO RESPOND TO CHANGES
IN TECHNOLOGY.
(a) 
NATIONAL
AND
LOCAL
COVERAGE
DETERMINATION
PROCESS.—
(1) IN
GENERAL.—Section 1862 (42 U.S.C. 1395y), as
amended by sections 948 and 950, is amended—
(A) in the third sentence of subsection (a), by inserting
‘‘consistent with subsection (l)’’ after ‘‘the Secretary shall
ensure’’; and
(B) by adding at the end the following new subsection:
‘‘(l) 
NATIONAL
AND
LOCAL
COVERAGE
DETERMINATION
PROCESS.—
‘‘(1) FACTORS
AND
EVIDENCE
USED
IN
MAKING
NATIONAL
COVERAGE DETERMINATIONS.—The Secretary shall make avail-
able to the public the factors considered in making national
coverage determinations of whether an item or service is reason-
able and necessary. The Secretary shall develop guidance docu-
ments to carry out this paragraph in a manner similar to
the development of guidance documents under section 701(h)
of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 371(h)).
‘‘(2) TIMEFRAME FOR DECISIONS ON REQUESTS FOR NATIONAL
COVERAGE DETERMINATIONS.—In the case of a request for a
national coverage determination that—
‘‘(A) does not require a technology assessment from
an outside entity or deliberation from the Medicare Cov-
erage Advisory Committee, the decision on the request
shall be made not later than 6 months after the date
of the request; or
H. R. 1—285
‘‘(B) requires such an assessment or deliberation and
in which a clinical trial is not requested, the decision
on the request shall be made not later than 9 months
after the date of the request.
‘‘(3) PROCESS FOR PUBLIC COMMENT IN NATIONAL COVERAGE
DETERMINATIONS.—
‘‘(A) PERIOD FOR PROPOSED DECISION.—Not later than
the end of the 6-month period (or 9-month period for
requests described in paragraph (2)(B)) that begins on the
date a request for a national coverage determination is
made, the Secretary shall make a draft of proposed decision
on the request available to the public through the Internet
website of the Centers for Medicare & Medicaid Services
or other appropriate means.
‘‘(B) 30-DAY PERIOD FOR PUBLIC COMMENT.—Beginning
on the date the Secretary makes a draft of the proposed
decision available under subparagraph (A), the Secretary
shall provide a 30-day period for public comment on such
draft.
‘‘(C) 60-DAY
PERIOD
FOR
FINAL
DECISION.—Not later
than 60 days after the conclusion of the 30-day period
referred to under subparagraph (B), the Secretary shall—
‘‘(i) make a final decision on the request;
‘‘(ii) include in such final decision summaries of
the public comments received and responses to such
comments;
‘‘(iii) make available to the public the clinical evi-
dence and other data used in making such a decision
when the decision differs from the recommendations
of the Medicare Coverage Advisory Committee; and
‘‘(iv) in the case of a final decision under clause
(i) to grant the request for the national coverage deter-
mination, the Secretary shall assign a temporary or
permanent code (whether existing or unclassified) and
implement the coding change.
‘‘(4) CONSULTATION
WITH
OUTSIDE
EXPERTS
IN
CERTAIN
NATIONAL
COVERAGE
DETERMINATIONS.—With respect to a
request for a national coverage determination for which there
is not a review by the Medicare Coverage Advisory Committee,
the Secretary shall consult with appropriate outside clinical
experts.
‘‘(5) LOCAL COVERAGE DETERMINATION PROCESS.—
‘‘(A) PLAN
TO
PROMOTE
CONSISTENCY
OF
COVERAGE
DETERMINATIONS.—The Secretary shall develop a plan to
evaluate new local coverage determinations to determine
which determinations should be adopted nationally and
to what extent greater consistency can be achieved among
local coverage determinations.
‘‘(B) CONSULTATION.—The Secretary shall require the
fiscal intermediaries or carriers providing services within
the same area to consult on all new local coverage deter-
minations within the area.
‘‘(C) DISSEMINATION OF INFORMATION.—The Secretary
should serve as a center to disseminate information on
local coverage determinations among fiscal intermediaries
and carriers to reduce duplication of effort.
H. R. 1—286
‘‘(6) NATIONAL
AND
LOCAL
COVERAGE
DETERMINATION
DEFINED.—For purposes of this subsection—
‘‘(A) NATIONAL COVERAGE DETERMINATION.—The term
‘national coverage determination’ means a determination
by the Secretary with respect to whether or not a particular
item or service is covered nationally under this title.
‘‘(B) LOCAL
COVERAGE
DETERMINATION.—The term
‘local coverage determination’ has the meaning given that
in section 1869(f)(2)(B).’’.
(2) EFFECTIVE DATE.—The amendments made by paragraph
(1) shall apply to national coverage determinations as of
January 1, 2004, and section 1862(l)(5) of the Social Security
Act, as added by such paragraph, shall apply to local coverage
determinations made on or after July 1, 2004.
(b) MEDICARE COVERAGE OF ROUTINE COSTS ASSOCIATED WITH
CERTAIN CLINICAL TRIALS OF CATEGORY A DEVICES.—
(1) IN
GENERAL.—Section 1862 (42 U.S.C. 1395y), as
amended by subsection (a), is amended by adding at the end
the following new subsection:
‘‘(m) COVERAGE OF ROUTINE COSTS ASSOCIATED WITH CERTAIN
CLINICAL TRIALS OF CATEGORY A DEVICES.—
‘‘(1) IN GENERAL.—In the case of an individual entitled
to benefits under part A, or enrolled under part B, or both
who participates in a category A clinical trial, the Secretary
shall not exclude under subsection (a)(1) payment for coverage
of routine costs of care (as defined by the Secretary) furnished
to such individual in the trial.
‘‘(2) CATEGORY A CLINICAL TRIAL.—For purposes of para-
graph (1), a ‘category A clinical trial’ means a trial of a medical
device if—
‘‘(A) the trial is of an experimental/investigational (cat-
egory A) medical device (as defined in regulations under
section 405.201(b) of title 42, Code of Federal Regulations
(as in effect as of September 1, 2003));
‘‘(B) the trial meets criteria established by the Sec-
retary to ensure that the trial conforms to appropriate
scientific and ethical standards; and
‘‘(C) in the case of a trial initiated before January
1, 2010, the device involved in the trial has been deter-
mined by the Secretary to be intended for use in the
diagnosis, monitoring, or treatment of an immediately life-
threatening disease or condition.’’.
(2) EFFECTIVE DATE.—The amendment made by paragraph
(1) shall apply to routine costs incurred on and after January
1, 2005, and, as of such date, section 411.15(o) of title 42,
Code of Federal Regulations, is superseded to the extent incon-
sistent with section 1862(m) of the Social Security Act, as
added by such paragraph.
(3) RULE OF CONSTRUCTION.—Nothing in the amendment
made by paragraph (1) shall be construed as applying to, or
affecting, coverage or payment for a nonexperimental/investiga-
tional (category B) device.
(c) ISSUANCE OF TEMPORARY NATIONAL CODES.—Not later than
July 1, 2004, the Secretary shall implement revised procedures
for the issuance of temporary national HCPCS codes under part
B of title XVIII of the Social Security Act.