288
Title III, Subtitle C
guidelines and regulations shall take into account
characteristics that may differ among risk contract-
ing entities including whether such an entity is at
risk for inpatient hospital services.
‘‘(2) GUIDELINES AND REGULATIONS ON MAR-
KETING.—At the earliest practicable time after the
date of enactment of this section, the Secretary shall
issue guidelines and regulations concerning—
‘‘(A) marketing undertaken by any risk
contracting entity or any primary care case
management program to individuals eligible for
medical assistance under the State plan, and
‘‘(B) information that must be provided by
States or any such entity to individuals eligible
for medical assistance under the State plan
with respect to—
‘‘(i) the options and rights of such in-
dividuals to enroll with, and disenroll from,
any such entity, as provided in this section,
and
‘‘(ii) the availability of services from
any such entity (including a list of services
for which such entity is responsible or
must approve and information on how to
289
Title III, Subtitle C
obtain services for which such entity is not
responsible).
In developing the guidelines and regulations under
this paragraph, the Secretary shall address the spe-
cial circumstances of children with special health
care needs (as defined in subsection (e)(1)(B)(ii))
and other individuals with special health care needs.
‘‘(3) MODEL CONTRACT.—The Secretary shall
develop a model contract to reflect the requirements
of subsection (b)(3) and such other requirements as
the Secretary determines appropriate.’’.
(b) WAIVERS FROM REQUIREMENTS
ON COORDI-
NATED CARE PROGRAMS.—Section 1915(b) of such Act
(42 U.S.C. 1396n) is amended—
(1) in the matter preceding paragraph (1), by
striking ‘‘as may be necessary’’ and inserting ‘‘, and
section 1932 as may be necessary’’;
(2) in paragraph (1), by striking ‘‘a primary
care case management system or’’;
(3) by striking ‘‘and’’ at the end of paragraph
(3);
(4) by striking the period at the end of para-
graph (4) and inserting ‘‘, and’’; and
(5) by inserting after paragraph (4) the follow-
ing new paragraph:
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Title III, Subtitle C
‘‘(5) to permit a risk contracting entity (as de-
fined in section 1932(a)(3)) to restrict the period in
which individuals enrolled with such entity may ter-
minate such enrollment without cause in accordance
with section 1932(e)(3)(A).’’.
(c) STATE OPTION TO GUARANTEE MEDICAID ELIGI-
BILITY.—Section 1902(e)(2) of such Act (42 U.S.C.
1396a(e)(2)) is amended—
(1) in subparagraph (A), by striking all that
precedes ‘‘(but for this paragraph)’’ and inserting
‘‘In the case of an individual who is enrolled—
‘‘(i) with a qualified health maintenance
organization (as defined in title XIII of the
Public Health Service Act) or with a risk con-
tracting 
entity 
(as 
defined 
in 
section
1932(a)(3)), or
‘‘(ii) with any risk contracting entity (as
defined in section 1932(a)(3)) in a State that,
on the effective date of this provision, had in ef-
fect a waiver under section 1115 of require-
ments under this title under which the State
could extend eligibility for medical assistance
for enrollees of such entity, or
‘‘(iii) with an eligible organization with a
contract under section 1876,
291
Title III, Subtitle C
and who would’’,
(2) in subparagraph (B), by striking ‘‘organiza-
tion or’’ each place it appears, and
(3) by adding at the end the following new sub-
paragraph:
‘‘(C) The State plan may provide, notwith-
standing any other provision of this title, that
an individual shall be deemed to continue to be
eligible for benefits under this title until the end
of the month following the month in which such
individual would (but for this paragraph) lose
such eligibility because of excess income and re-
sources, if the individual is enrolled with a risk
contracting entity or primary care case manage-
ment entity (as those terms are defined in sec-
tion 1932(a)).’’.
(d) ENHANCED
MATCH
RELATED
TO
QUALITY
REVIEW.—Section 1903(a)(3)(C) of such Act (42 U.S.C.
1396b(a)(3)(C)) is amended—
(1) by striking ‘‘organization or by’’ and insert-
ing ‘‘organization, by’’; and
(2) by striking ‘‘section 1152, as determined by
the Secretary,’’ and inserting ‘‘section 1152, as de-
termined by the Secretary, or by another organiza-
tion approved by the Secretary which is unaffiliated
292
Title III, Subtitle C
with the State government or with any risk contract-
ing entity (as defined in section 1932(a)(3)),’’.
(e) ACCUMULATION OF RESERVES BY CERTAIN EN-
TITIES.—Any organization referred to in section 329, 330,
or 340, of the Public Health Service Act which has con-
tracted with a State agency as a risk contracting entity
under section 1932(g)(3)(A) of the Social Security Act
may accumulate reserves with respect to payments made
to such organization under section 1932(g)(3)(C) of such
Act.
(f) CONFORMING AMENDMENTS.—
(1) Section 1128(b)(6)(C)(i) of such Act (42
U.S.C. 1320a–7(b)(6)(C)(i)) is amended by striking
‘‘health maintenance organization’’ and inserting
‘‘risk contracting entity’’.
(2) Section 1902(a)(23) of such Act (42 U.S.C.
1396a(a)(23)) is amended by striking ‘‘primary
care-case management system (described in section
1915(b)(1)), a health maintenance organization,’’
and inserting ‘‘primary care case management pro-
gram (as defined in section 1932(a)(1)), a risk con-
tracting entity (as defined in section 1932(a)(3)),’’.
(3) Section 1902(a)(30)(C) of such Act (42
U.S.C. 1396a(a)(30)(C)) is amended by striking
‘‘use a utilization’’ and all that follows through
293
Title III, Subtitle C
‘‘with the results’’ and inserting ‘‘provide for inde-
pendent review and quality assurance of entities with
contracts under section 1932, in accordance with
subsection (f) of such section 1932, with the re-
sults’’.
(4) Section 1902(a)(57) of such Act (42 U.S.C.
1396a(a)(57)) is amended by striking ‘‘or health
maintenance organization (as defined in section
1903(m)(1)(A))’’ and inserting ‘‘risk contracting en-
tity, or primary care case management entity (as de-
fined in section 1932(a))’’.
(5) Section 1902(a) of such Act (42 U.S.C.
1396a), as amended by sections 3303(a)(1) and
3002(a), is amended—
(A) by striking ‘‘and’’ at the end of para-
graph (61);
(B) by striking the period at the end of
paragraph (62) and inserting ‘‘; and’’; and
(C) by inserting after paragraph (62) the
following new paragraphs:
‘‘(63) at State option, provide for a primary
care case management program in accordance with
section 1932; and
294
Title III, Subtitle C
‘‘(64) at State option, provide for a program
under which the State contracts with risk contract-
ing entities in accordance with section 1932.’’.
(6) Section 1902(p)(2) of such Act (42 U.S.C.
1396a(p)(2)) is amended by striking ‘‘health mainte-
nance organization (as defined in section 1903(m))’’
and inserting ‘‘risk contracting entity (as defined in
section 1932(a)(3))’’.
(7) Section 1902(w) of such Act (42 U.S.C.
1396a(w)) is amended—
(A) in paragraph (1), by striking ‘‘section
1903(m)(1)(A)’’ 
and 
inserting 
‘‘section
1932(a)(3)’’, and
(B) in paragraph (2)(E)—
(i) by striking ‘‘health maintenance
organization’’ and inserting ‘‘risk contract-
ing entity’’, and
(ii) by striking ‘‘organization’’ and in-
serting ‘‘entity’’.
(8) Section 1903(k) of such Act (42 U.S.C.
1396b(k)) is amended by striking ‘‘health mainte-
nance organization which meets the requirements of
subsection (m) of this section’’ and inserting ‘‘risk
contracting entity which meets the requirements of
section 1932’’.
295
Title III, Subtitle C
(9) Section 1903(w)(7)(A)(viii) of such Act (42
U.S.C. 1396b(w)(7)(A)(viii)) is amended by striking
‘‘health maintenance organizations (and other orga-
nizations with contracts under section 1903(m))’’
and inserting ‘‘risk contracting entities with con-
tracts under section 1932’’.
(10) Section 1905(a) of such Act (42 U.S.C.
1396d(a)) is amended, in the matter preceding
clause (i), by inserting ‘‘(which may be on a prepaid
capitation or other risk basis)’’ after ‘‘payment’’.
(11) Section 1916(b)(2)(D) of such Act (42
U.S.C. 1396o(b)(2)(D)) is amended by striking
‘‘health maintenance organization (as defined in sec-
tion 1903(m))’’ and inserting ‘‘risk contracting en-
tity (as defined in section 1932(a)(3))’’.
(12) Section 1925(b)(4)(D)(iv) of such Act (42
U.S.C. 1396r–6(b)(4)(D)(iv)) is amended—
(A) in the heading, by striking ‘‘HMO’’
and inserting ‘‘RISK CONTRACTING ENTITY’’,
(B) by striking ‘‘health maintenance orga-
nization (as defined in section 1903(m)(1)(A))’’
and inserting ‘‘risk contracting entity (as de-
fined in section 1932(a)(3)’’, and
(C) by striking ‘‘health maintenance orga-
nization in accordance with section 1903(m)’’
296
Title III, Subtitle D
and inserting ‘‘risk contracting entity in accord-
ance with section 1932’’.
(13) Paragraphs (1) and (2) of section 1926(a)
of such Act (42 U.S.C. 1396r–7(a)) are each amend-
ed by striking ‘‘health maintenance organizations
under section 1903(m)’’ and inserting ‘‘risk con-
tracting entities under section 1932’’.
(14) Section 1927(j)(1) of such Act is amended
by striking ‘‘ * * * Health Maintenance Organiza-
tions, including those organizations that contract
under section 1903(m)’’ and inserting ‘‘risk con-
tracting entities (as defined in section 1932(a)(3))’’.
(g) EFFECTIVE DATE.—The amendments made by
this section shall become effective with respect to calendar
quarters beginning on or after January 1, 1995.
Subtitle D—Additional Medicaid
Reforms
SEC. 3301. REDUCTION IN AMOUNT OF PAYMENT ADJUST-
MENTS 
FOR 
DISPROPORTIONATE 
SHARE
HOSPITALS.
(a) IN GENERAL.—Section 1923 of the Social Secu-
rity Act (42 U.S.C. 1396r–4) is amended by adding at
the end the following new subsection:
‘‘(h) REDUCTION IN FEDERAL FINANCIAL PARTICI-
PATION
FOR
DISPROPORTIONATE
SHARE
ADJUST-
297
Title III, Subtitle D
MENTS.—Notwithstanding any other provision of this sec-
tion, the amount of payments under section 1903(a) with
respect to any payment adjustment made under this sec-
tion for hospitals in a State for quarters in a fiscal year
shall not exceed the following percent of the amount other-
wise determined under subsection (f):
‘‘(1) For fiscal years 1995, 1996, 1997 and
1998, 75 percent.
‘‘(2) For fiscal years 1999 and 2000, 70 per-
cent.
‘‘(3) For fiscal years 2001 and 2002, 65 per-
cent.
‘‘(4) For fiscal year 2003 and thereafter, 63
percent.’’.
(b) CONFORMING AMENDMENT.—Section 1923(c) of
such Act (42 U.S.C. 1396r–4(c)) is amended in the matter
preceding paragraph (1) by striking ‘‘(f) and (g)’’ and in-
serting ‘‘(f), (g), and (h)’’.
(c) EFFECTIVE DATE.—The amendments made by
subsections (a) and (b) shall apply to quarters in fiscal
years beginning on or after October 1, 1994.
SEC. 3302. ELIMINATION OF MEDICALLY NEEDY PROGRAM
FOR INDIVIDUALS NOT IN AN INSTITUTION.
(a) IN GENERAL.—Section 1902(a)(10)(C) of the So-
cial Security Act (42 U.S.C. 1396a(a)(10)(C)) is amended
298
Title III, Subtitle D
by inserting ‘‘such assistance is restricted to individuals
in institutions and’’ after ‘‘, then’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to calendar quarters beginning
on or after January 1, 1998.
SEC. 3303. ELIMINATION OF MEDICAID PEDIATRIC IMMUNI-
ZATION PROGRAM.
(a) IN GENERAL.—Effective as if included in the en-
actment of the 13621 of the Omnibus Budget Reconcili-
ation Act of 1993, title XIX of the Social Security Act
is amended as follows:
(1) Section 1902(a) (42 U.S.C. 1396a(a)) is
amended—
(A) by inserting ‘‘and’’ at the end of para-
graph (60),
(B) in paragraph (61), by striking ‘‘; and’’
and inserting a period, and
(C) by striking paragraph (62).
(2) Section 1928 (42 U.S.C. 1396s) is repealed.
(3) Section 1903(i) (42 U.S.C. 1396b(i)) is
amended—
(A) by inserting ‘‘or’’ at the end of para-
graph (12),
(B) by striking the semicolon at the end of
paragraph (13) and inserting a period, and