186
(b) REPORT.—Not later than 1 year after the date
of the enactment of this Act, the Comptroller General shall
submit to Congress a report on the study conducted under
subsection (a).
SEC. 433. MEDPAC STUDY AND REPORT ON MEDICARE RE-
IMBURSEMENT FOR SERVICES PROVIDED BY
CERTAIN PROVIDERS.
(a) STUDY.—The Medicare Payment Advisory Com-
mission shall conduct a study on the appropriateness of
the current payment rates under the medicare program
under title XVIII of the Social Security Act for services
provided by a—
(1) certified nurse-midwife (as defined in sub-
section (gg)(2) of section 1861 of such Act (42
U.S.C. 1395x);
(2) physician assistant (as defined in subsection
(aa)(5)(A) of such section);
(3) nurse practitioner (as defined in such sub-
section); and
(4) clinical nurse specialist (as defined in sub-
section (aa)(5)(B) of such section).
(b) REPORT.—Not later than 18 months after the
date of the enactment of this Act, the Commission shall
submit to Congress a report on the study conducted under
subsection (a), together with any recommendations for leg-
187
islation that the Commission determines to be appropriate
as a result of such study.
SEC. 434. MEDPAC STUDY AND REPORT ON MEDICARE COV-
ERAGE OF SERVICES PROVIDED BY CERTAIN
NONPHYSICIAN PROVIDERS.
(a) STUDY.—
(1) IN GENERAL.—The Medicare Payment Ad-
visory Commission shall conduct a study to deter-
mine the appropriateness of providing coverage
under the medicare program under title XVIII of the
Social Security Act for services provided by a—
(A) surgical technologist;
(B) marriage counselor;
(C) marriage and family therapist;
(D) pastoral care counselor; and
(E) licensed professional counselor of men-
tal health.
(2) COSTS TO PROGRAM.—The study shall con-
sider the short-term and long-term benefits, and
costs to the medicare program, of providing the cov-
erage described in paragraph (1).
(b) REPORT.—Not later than 18 months after the
date of the enactment of this Act, the Commission shall
submit to Congress a report on the study conducted under
subsection (a), together with any recommendations for leg-
188
islation that the Commission determines to be appropriate
as a result of such study.
SEC. 435. GAO STUDY AND REPORT ON THE COSTS OF
EMERGENCY 
AND 
MEDICAL 
TRANSPOR-
TATION SERVICES.
(a) STUDY.—The Comptroller General of the United
States shall conduct a study on the costs of providing
emergency and medical transportation services across the
range of acuity levels of conditions for which such trans-
portation services are provided.
(b) REPORT.—Not later than 18 months after the
date of the enactment of this Act, the Comptroller General
shall submit to Congress a report on the study conducted
under subsection (a), together with recommendations for
any changes in methodology or payment level necessary
to fairly compensate suppliers of emergency and medical
transportation services and to ensure the access of bene-
ficiaries under the medicare program under title XVIII of
the Social Security Act.
SEC. 436. GAO STUDIES AND REPORTS ON MEDICARE PAY-
MENTS.
(a) GAO STUDY ON HCFA POST-PAYMENT AUDIT
PROCESS.—
(1) STUDY.—The Comptroller General of the
United States shall conduct a study on the post-pay-
189
ment audit process under the medicare program
under title XVIII of the Social Security Act as such
process applies to physicians, including the proper
level of resources that the Health Care Financing
Administration should devote to educating physi-
cians regarding—
(A) coding and billing;
(B) documentation requirements; and
(C) the calculation of overpayments.
(2) REPORT.—Not later than 18 months after
the date of the enactment of this Act, the Comp-
troller General shall submit to Congress a report on
the study conducted under paragraph (1) together
with specific recommendations for changes or im-
provements in the post-payment audit process de-
scribed in such paragraph.
(b) GAO STUDY ON ADMINISTRATION AND OVER-
SIGHT.—
(1) STUDY.—The Comptroller General of the
United States shall conduct a study on the aggre-
gate effects of regulatory, audit, oversight, and pa-
perwork burdens on physicians and other health care
providers participating in the medicare program
under title XVIII of the Social Security Act.
190
(2) REPORT.—Not later than 18 months after
the date of the enactment of this Act, the Comp-
troller General shall submit to Congress a report on
the study conducted under paragraph (1) together
with recommendations regarding any area in
which—
(A) a reduction in paperwork, an ease of
administration, or an appropriate change in
oversight and review may be accomplished; or
(B) additional payments or education are
needed to assist physicians and other health
care providers in understanding and complying
with any legal or regulatory requirements.
SEC. 437. MEDPAC STUDY ON ACCESS TO OUTPATIENT PAIN
MANAGEMENT SERVICES.
(a) STUDY.—The Medicare Payment Advisory Com-
mission shall conduct a study on the barriers to coverage
and payment for outpatient interventional pain medicine
procedures under the medicare program under title XVIII
of the Social Security Act. Such study shall examine—
(1) the specific barriers imposed under the
medicare program on the provision of pain manage-
ment procedures in hospital outpatient departments,
ambulatory surgery centers, and physicians’ offices;
and
191
(2) the consistency of medicare payment poli-
cies for pain management procedures in those dif-
ferent settings.
(b) REPORT.—Not later than 1 year after the date
of the enactment of this Act, the Commission shall submit
to Congress a report on the study.
TITLE V—PROVISIONS
RELATING TO PARTS A AND B
Subtitle A—Home Health Services
SEC. 501. 2-YEAR ADDITIONAL DELAY IN APPLICATION OF
15 PERCENT REDUCTION ON PAYMENT LIM-
ITS FOR HOME HEALTH SERVICES.
(a) IN
GENERAL.—Section 1895(b)(3)(A)(i) (42
U.S.C. 1395fff(b)(3)(A)(i)) is amended—
(1) by redesignating subclause (II) as subclause
(III);
(2) in subclause (III), as redesignated, by strik-
ing ‘‘described in subclause (I)’’ and inserting ‘‘de-
scribed in subclause (II)’’; and
(3) by inserting after subclause (I) the fol-
lowing new subclause:
‘‘(II) For each of the two 12-
month periods beginning after the pe-
riod described in subclause (I), such
amount (or amounts) shall be equal to
192
the amount (or amounts) determined
under subclause (I), updated under
subparagraph (B).’’.
(b) CHANGE IN REPORT.—Section 302(c) of BBRA
(113 Stat. 1501A–360) is amended—
(1) by striking ‘‘Not later than’’ and all that
follows through ‘‘(42 U.S.C. 1395fff)’’ and inserting
‘‘Not later than April 1, 2003’’; and
(2) by striking ‘‘Secretary’’ and inserting
‘‘Comptroller General of the United States’’.
(c) CASE MIX ADJUSTMENT CORRECTIONS.—
(1) IN GENERAL.—Section 1895(b)(3)(B) (42
U.S.C. 1395fff(b)(3)(B)) is amended by adding at
the end the following new clause:
‘‘(iv) ADJUSTMENT
FOR
CASE
MIX
CHANGES.—Insofar as the Secretary deter-
mines that the adjustments under para-
graph (4)(A)(i) for a previous fiscal year
(or estimates that such adjustments for a
future fiscal year) did (or are likely to) re-
sult in a change in aggregate payments
under this subsection during the fiscal year
that are a result of changes in the coding
or classification of different units of serv-
ices that do not reflect real changes in case
193
mix, the Secretary may adjust the stand-
ard 
prospective 
payment 
amount 
(or
amounts) under paragraph (3) for subse-
quent fiscal years so as to eliminate the ef-
fect of such coding or classification
changes.’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) applies to episodes concluding on
or after October 1, 2001.
SEC. 502. RESTORATION OF FULL HOME HEALTH MARKET
BASKET UPDATE FOR HOME HEALTH SERV-
ICES FOR FISCAL YEAR 2001.
(a) IN GENERAL.—Section 1861(v)(1)(L)(x) (42
U.S.C. 1395x(v)(1)(L)(x)) is amended—
(1) by striking ‘‘2001,’’; and
(2) by adding at the end the following: ‘‘With
respect to cost reporting periods beginning during
fiscal year 2001, the update to any limit under this
subparagraph shall be the home health market bas-
ket index.’’.
(b) SPECIAL RULE FOR PAYMENT FOR FISCAL YEAR
2001 BASED
ON ADJUSTED PROSPECTIVE PAYMENT
AMOUNTS.—
(1) IN GENERAL.—Notwithstanding the amend-
ments made by subsection (a), for purposes of mak-
194
ing payments under section 1895(b) of the Social
Security Act (42 U.S.C. 1395fff(b)) for home health
services for fiscal year 2001, the Secretary of Health
and Human Services shall—
(A) with respect to episodes and visits end-
ing on or after October 1, 2000, and before
April 1, 2001, use the final standardized and
budget neutral prospective payment amounts
for 60 day episodes and standardized average
per visit amounts for fiscal year 2001 as pub-
lished by the Secretary in the Federal Register
of July 3, 2000 (65 Federal Register 41128–
41214); and
(B) with respect to episodes and visits end-
ing on or after April 1, 2001, and before Octo-
ber 1, 2001, use such amounts increased by 2.2
percent.
(2) NO EFFECT ON OTHER PAYMENTS OR DE-
TERMINATIONS.—The Secretary shall not take the
provisions of paragraph (1) into account for pur-
poses of payments, determinations, or budget neu-
trality adjustments under section 1895 of the Social
Security Act.
195
SEC. 503. TEMPORARY TWO-MONTH EXTENSION OF PERI-
ODIC INTERIM PAYMENTS.
(a) TEMPORARY EXTENSION.—Notwithstanding sub-
section (d) of section 4603 of BBA (42 U.S.C. 1395fff
note), as amended by section 5101(c)(2) of the Tax and
Trade Relief Extension Act of 1998 (contained in division
J of Public Law 105–277), the amendments made by sub-
section (b) of such section 4603 shall not take effect until
December 1, 2000, in the case of a home health agency
that was receiving periodic interim payments under sec-
tion 1815(e)(2) as of September 30, 2000.
(b) PAYMENT RULE.—The amount of such periodic
interim payment made to a home health agency by reason
of subsection (a) during each of November and December,
2000, shall be equal to the amount of such payment made
to the agency in their last full monthly periodic interim
payment. Such amount of payment shall be included in
the tentative settlement of the last cost report for the
home health agency under the payment system in effect
prior to the implementation of the prospective payment
system under section 1895(b) of the Social Security Act
(42 U.S.C. 1395fff(b)).
SEC. 504. USE OF TELEHEALTH IN DELIVERY OF HOME
HEALTH SERVICES.
Section 1895 (42 U.S.C. 1395fff) is amended by add-
ing at the end the following new subsection:
196
‘‘(e) CONSTRUCTION RELATED TO HOME HEALTH
SERVICES.—
‘‘(1) TELECOMMUNICATIONS.—Nothing in this
section shall be construed as preventing a home
health agency furnishing a home health unit of serv-
ice for which payment is made under the prospective
payment system established by this section for such
units of service from furnishing services via a tele-
communication system if such services—
‘‘(A) do not substitute for in-person home
health services ordered as part of a plan of care
certified by a physician pursuant to section
1814(a)(2)(C) or section 1835(a)(2)(A); and
‘‘(B) are not considered a home health
visit for purposes of eligibility or payment
under this title.
‘‘(2) PHYSICIAN
CERTIFICATION.—Nothing in
this section shall be construed as waiving the re-
quirement for a physician certification under section
1814(a)(2)(C) or section 1835(a)(2)(A) of such Act
(42 U.S.C. 1395f(a)(2)(C), 1395n(a)(2)(A)) for the
payment for home health services, whether or not
furnished via a telecommunications system.’’.
197
SEC. 505. STUDY ON COSTS TO HOME HEALTH AGENCIES
OF 
PURCHASING 
NONROUTINE 
MEDICAL
SUPPLIES.
(a) STUDY.—The Comptroller General of the United
States shall conduct a study on variations in prices paid
by home health agencies furnishing home health services
under the medicare program under title XVIII of the So-
cial Security Act in purchasing nonroutine medical sup-
plies, including ostomy supplies, and volumes if such sup-
plies used, shall determine the effect (if any) of variations
on prices and volumes in the provision of such services.
(b) REPORT.—Not later than October 1, 2001, the
Comptroller General shall submit to Congress a report on
the study conducted under subsection (a), and shall in-
clude in the report recommendations respecting whether
payment for nonroutine medical supplies furnished in con-
nection with home health services should be made sepa-
rately from the prospective payment system for such serv-
ices.
SEC. 506. TREATMENT OF BRANCH OFFICES; GAO STUDY
ON SUPERVISION OF HOME HEALTH CARE
PROVIDED IN ISOLATED RURAL AREAS.
(a) TREATMENT OF BRANCH OFFICES.—
(1) IN GENERAL.—Notwithstanding any other
provision of law, in determining for purposes of title
XVIII of the Social Security Act whether an office
198
of a home health agency constitutes a branch office
or a separate home health agency, neither the time
nor distance between a parent office of the home
health agency and a branch office shall be the sole
determinant of a home health agency’s branch office
status.
(2) CONSIDERATION
OF
FORMS
OF
TECH-
NOLOGY IN DEFINITION OF SUPERVISION.—The Sec-
retary of Health and Human Services may include
forms of technology in determining what constitutes
‘‘supervision’’ for purposes of determining a home
health agency’s branch office status under para-
graph (1).
(b) GAO STUDY.—
(1) STUDY.—The Comptroller General of the
United States shall conduct a study of the provision
of adequate supervision to maintain quality of home
health services delivered under the medicare pro-
gram under title XVIII of the Social Security Act in
isolated rural areas. The study shall evaluate the
methods that home health agency branches and
subunits use to maintain adequate supervision in the
delivery of services to clients residing in those areas,
how these methods of supervision compare to re-
quirements that subunits independently meet medi-
199
care conditions of participation, and the resources
utilized by subunits to meet such conditions.
(2) REPORT.—Not later than January 1, 2002,
the Comptroller General shall submit to Congress a
report on the study conducted under paragraph (1).
The report shall include recommendations on wheth-
er exceptions are needed for subunits and branches
of home health agencies under the medicare program
to maintain access to the home health benefit or
whether alternative policies should be developed to
assure adequate supervision and access and rec-
ommendations on whether a national standard for
supervision is appropriate.
SEC. 507. CLARIFICATION OF THE HOMEBOUND DEFINI-
TION UNDER THE MEDICARE HOME HEALTH
BENEFIT.
(a) CLARIFICATION.—
(1) 
IN
GENERAL.—Sections 
1814(a) 
and
1835(a) (42 U.S.C. 1395f(a) and 1395n(a)) are
each amended—
(A) in the last sentence, by striking ‘‘, and
that absences of the individual from home are
infrequent or of relatively short duration, or are
attributable to the need to receive medical
treatment’’; and
200
(B) by adding at the end the following new
sentences: ‘‘Any absence of an individual from
the home attributable to the need to receive
health care treatment, including regular ab-
sences for the purpose of participating in thera-
peutic, psychosocial, or medical treatment in an
adult day-care program that is licensed or cer-
tified by a State, or accredited, to furnish adult
day-care services in the State shall not dis-
qualify an individual from being considered to
be ‘confined to his home’. Any other absence of
an individual from the home shall not so dis-
qualify an individual if the absence is of infre-
quent or of relatively short duration. For pur-
poses of the preceding sentence, any absence for
the purpose of attending a religious service
shall be deemed to be an absence of infrequent
or short duration.’’.
(2) EFFECTIVE DATE.—The amendments made
by paragraph (1) shall apply to items and services
provided on or after the date of enactment of this
Act.
(b) STUDY.—
(1) IN GENERAL.—The Comptroller General of
the United States shall conduct an evaluation of the
201
effect of the amendment on the cost of and access
to home health services under the medicare program
under title XVIII of the Social Security Act.
(2) REPORT.—Not later than 1 year after the
date of the enactment of this Act, the Comptroller
General shall submit to Congress a report on the
study conducted under paragraph (1).
SEC. 508. TEMPORARY INCREASE FOR HOME HEALTH
SERVICES FURNISHED IN A RURAL AREA.
(a) INCREASE FOR 2001 AND 2002.—In the case of
a unit of home health service furnished in a rural area
(as defined in section 1886(d)(2)(D) of the Social Security
Act (42 U.S.C. 1395ww(d)(2)(D))) during 2001 or 2002,
the Secretary of Health and Human Services (in this sec-
tion referred to as the ‘‘Secretary’’) shall increase the pay-
ment amount otherwise made under section 1895 of such
Act (42 U.S.C. 1395fff) for such unit of service by 10
percent.
(b) ADDITIONAL PAYMENT NOT BUILT INTO THE
BASE.—The Secretary shall not include any additional
payment made under subsection (a) in updating the stand-
ard prospective payment amount (or amounts) applicable
to units of home health services furnished during a period,
as increased by the home health applicable increase per-
centage for the fiscal year involved under section
202
1895(b)(3)(B) of the Social Security Act (42 U.S.C.
1395fff(b)(3)(B)).
(c) WAIVING BUDGET NEUTRALITY.—The Secretary
shall not reduce the standard prospective payment amount
(or amounts) under section 1895 of the Social Security
Act (42 U.S.C. 1395fff) applicable to units of home health
services furnished during a period to offset the increase
in payments resulting from the application of subsection
(a).
Subtitle B—Direct Graduate
Medical Education
SEC. 511. INCREASE IN FLOOR FOR DIRECT GRADUATE
MEDICAL EDUCATION PAYMENTS.
Section 
1886(h)(2)(D)(iii) 
(42 
U.S.C.
1395ww(h)(2)(D)(iii)) is amended—
(1) in the heading, by striking ‘‘IN FISCAL YEAR
2001 AT 70 PERCENT OF’’ and inserting ‘‘FOR’’; and
(2) by inserting after ‘‘70 percent’’ the fol-
lowing: ‘‘, and for the cost reporting period begin-
ning during fiscal year 2002 shall not be less than
85 percent,’’.
203
SEC. 
512. 
CHANGE 
IN 
DISTRIBUTION 
FORMULA 
FOR
MEDICARE+CHOICE-RELATED NURSING AND
ALLIED HEALTH EDUCATION COSTS.
(a) IN GENERAL.—Section 1886(l)(2)(C) (42 U.S.C.
1395ww(l)(2)(C)) is amended by striking all that follows
‘‘multiplied by’’ and inserting the following: ‘‘the ratio
of—
‘‘(i) the product of (I) the Secretary’s
estimate of the ratio of the amount of pay-
ments made under section 1861(v) to the
hospital for nursing and allied health edu-
cation activities for the hospital’s cost re-
porting period ending in the second pre-
ceding fiscal year, to the hospital’s total in-
patient days for such period, and (II) the
total number of inpatient days (as estab-
lished by the Secretary) for such period
which are attributable to services furnished
to individuals who are enrolled under a
risk sharing contract with an eligible orga-
nization under section 1876 and who are
entitled to benefits under part A or who
are enrolled with a Medicare+Choice orga-
nization under part C; to
204
‘‘(ii) the sum of the products deter-
mined under clause (i) for such cost re-
porting periods.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) applies to portions of cost reporting periods
occurring on or after January 1, 2001.
Subtitle C—Changes in Medicare
Coverage and Appeals Process
SEC. 521. REVISIONS TO MEDICARE APPEALS PROCESS.
(a) CONDUCT OF RECONSIDERATIONS OF DETER-
MINATIONS
BY INDEPENDENT CONTRACTORS.—Section
1869 (42 U.S.C. 1395ff) is amended to read as follows:
‘‘DETERMINATIONS; APPEALS
‘‘SEC. 1869. (a) INITIAL DETERMINATIONS.—
‘‘(1) PROMULGATIONS OF REGULATIONS.—The
Secretary shall promulgate regulations and make ini-
tial determinations with respect to benefits under
part A or part B in accordance with those regula-
tions for the following:
‘‘(A) The initial determination of whether
an individual is entitled to benefits under such
parts.
‘‘(B) The initial determination of the
amount of benefits available to the individual
under such parts.
205
‘‘(C) Any other initial determination with
respect to a claim for benefits under such parts,
including an initial determination by the Sec-
retary that payment may not be made, or may
no longer be made, for an item or service under
such parts, an initial determination made by a
utilization and quality control peer review orga-
nization under section 1154(a)(2), and an ini-
tial determination made by an entity pursuant
to a contract (other than a contract under sec-
tion 1852) with the Secretary to administer
provisions of this title or title XI.
‘‘(2) DEADLINES FOR MAKING INITIAL DETER-
MINATIONS.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), in promulgating regulations under
paragraph (1), initial determinations shall be
concluded by not later than the 45-day period
beginning on the date the fiscal intermediary or
the carrier, as the case may be, receives a claim
for benefits from an individual as described in
paragraph (1). Notice of such determination
shall be mailed to the individual filing the claim
before the conclusion of such 45-day period.
206
‘‘(B) CLEAN CLAIMS.—Subparagraph (A)
shall not apply with respect to any claim that
does not meet the requirements of section
1816(c)(2) or section 1842(c)(2).
‘‘(3) INTERNAL REDETERMINATIONS.—
‘‘(A) IN GENERAL.—In promulgating regu-
lations under paragraph (1) with respect to ini-
tial determinations, such regulations shall pro-
vide for a fiscal intermediary or a carrier to
make a redetermination with respect to a claim
for benefits that is denied in whole or in part.
‘‘(B) LIMITATIONS.—
‘‘(i) APPEALS RIGHTS.—No initial de-
termination may be reconsidered or ap-
pealed under subsection (b) unless the fis-
cal intermediary or carrier has made a re-
determination of that initial determination
under this paragraph.
‘‘(ii) DECISION MAKER.—No redeter-
mination may be made by any individual
involved in the initial determination.
‘‘(C) DEADLINES.—
‘‘(i) 
FILING
FOR
REDETERMINA-
TION.—A redetermination under subpara-
graph (A) shall be available only if notice
207
is filed with the Secretary to request the
redetermination by not later than the end
of the 180-day period beginning on the
date the individual receives notice of the
initial determination under paragraph (2).
‘‘(ii) 
CONCLUDING
REDETERMINA-
TIONS.—Except as provided in subsection
(d), redeterminations shall be made and
notice of the redetermination shall be pro-
vided in accordance with the medical needs
of the individual, but no later than 30 days
after the fiscal intermediary or the carrier,
as the case may be, receives a request for
a redetermination.
‘‘(D) CONSTRUCTION.—For purposes of
the succeeding provisions of this section a rede-
termination under this paragraph shall be con-
sidered to be part of the initial determination.
‘‘(b) APPEAL RIGHTS.—
‘‘(1) IN GENERAL.—
‘‘(A) RECONSIDERATION
OF
INITIAL
DE-
TERMINATION.—(i) Subject to subparagraph
(D), any individual dissatisfied with any initial
determination under subsection (a)(1) shall be
entitled to reconsideration of the determination,
208
and, subject to subparagraphs (D) and (E), a
hearing thereon by the Secretary to the same
extent as is provided in section 205(b) and to
judicial review of the Secretary’s final decision
after such hearing as is provided in section
205(g). For purposes of the preceding sentence,
any reference to the Commissioner of Social Se-
curity or the Social Security Administration in
subsection (g) or (l) of section 205 shall be con-
sidered a reference to the Secretary or the De-
partment of Health and Human Services, re-
spectively.
‘‘(ii) In making determinations under this
subsection, local and national coverage deter-
minations that involve the consideration of med-
ical facts of application of medical judgment
shall not be binding on qualified independent
contractors, administrative law judges or the
Departmental Appeals Board when determining
whether a particular item or service is covered
with respect to an individual making a claim for
benefit or the amount, duration or scope of an
item or service to which an individual making
a claim for benefits is eligible.
209
‘‘(B) REPRESENTATION BY PROVIDER OR
SUPPLIER.—
‘‘(i) IN
GENERAL.—Sections 206(a),
1102, and 1871 shall not be construed as
authorizing the Secretary to prohibit an in-
dividual from being represented under this
section by a person that furnishes or sup-
plies the individual, directly or indirectly,
with services or items, solely on the basis
that the person furnishes or supplies the
individual with such a service or item.
‘‘(ii) MANDATORY WAIVER OF RIGHT
TO
PAYMENT
FROM
BENEFICIARY.—Any
person that furnishes services or items to
an individual may not represent an indi-
vidual under this section with respect to
the issue described in section 1879(a)(2)
unless the person has waived any rights for
payment from the beneficiary with respect
to the services or items involved in the ap-
peal.
‘‘(iii) PROHIBITION ON PAYMENT FOR
REPRESENTATION.—If a person furnishes
services or items to an individual and rep-
resents the individual under this section,
210
the person may not impose any financial li-
ability on such individual in connection
with such representation.
‘‘(iv) 
REQUIREMENTS
FOR
REP-
RESENTATIVES OF A BENEFICIARY.—The
provisions of section 205(j) and section
206 (other than subsection (a)(4) of such
section) regarding representation of claim-
ants shall apply to representation of an in-
dividual with respect to appeals under this
section in the same manner as they apply
to representation of an individual under
those sections.
‘‘(C) SUCCESSION OF RIGHTS IN CASES OF
ASSIGNMENT.—The right of an individual to an
appeal under this section with respect to an
item or service may be assigned to the provider
of services or supplier of the item or service
upon the written consent of such individual
using a standard form established by the Sec-
retary for such an assignment.
‘‘(D) TIME LIMITS FOR FILING APPEALS.—
‘‘(i) RECONSIDERATIONS.—Reconsid-
eration under subparagraph (A) shall be
available only if the individual described in
211
subparagraph (A) files notice with the Sec-
retary to request reconsideration by not
later than the end of the 180-day period
beginning on the date the individual re-
ceives notice of the redetermination under
subsection (a)(3), or within such additional
time as the Secretary may allow.
‘‘(ii) HEARINGS CONDUCTED BY THE
SECRETARY.—The Secretary shall establish
in regulations time limits for the filing of
a request for a hearing by the Secretary in
accordance with provisions in sections 205
and 206.
‘‘(E) AMOUNTS IN CONTROVERSY.—
‘‘(i) IN GENERAL.—A hearing (by the
Secretary) shall not be available to an indi-
vidual under this section if the amount in
controversy is less than $100, and judicial
review shall not be available to the indi-
vidual if the amount in controversy is less
than $1,000.
‘‘(ii) AGGREGATION
OF
CLAIMS.—In
determining the amount in controversy, the
Secretary, under regulations, shall allow
212
two or more appeals to be aggregated if
the appeals involve—
‘‘(I) the delivery of similar or re-
lated services to the same individual
by one or more providers of services
or suppliers, or
‘‘(II) common issues of law and
fact arising from services furnished to
two or more individuals by one or
more providers of services or sup-
pliers.
‘‘(F) EXPEDITED PROCEEDINGS.—
‘‘(i) EXPEDITED
DETERMINATION.—
In the case of an individual who has re-
ceived notice by a provider of services that
the provider of services plans—
‘‘(I) to terminate services pro-
vided to an individual and a physician
certifies that failure to continue the
provision of such services is likely to
place the individual’s health at signifi-
cant risk, or
‘‘(II) to discharge the individual
from the provider of services, the indi-
vidual may request, in writing or oral-
213
ly, an expedited determination or an
expedited reconsideration of an initial
determination made under subsection
(a)(1), as the case may be, and the
Secretary shall provide such expedited
determination or expedited reconsider-
ation.
A reconsideration of a discharge from a
hospital shall be conducted under this
clause in accordance with the provisions of
paragraphs (2), (3), and (4) of section
1154(e) as in effect on the date that pre-
cedes the date of the enactment of this
subparagraph.
‘‘(ii) EXPEDITED
HEARING.—In a
hearing by the Secretary under this sec-
tion, in which the moving party alleges
that no material issues of fact are in dis-
pute, the Secretary shall make an expe-
dited determination as to whether any such
facts are in dispute and, if not, shall
render a decision expeditiously.
‘‘(G) REOPENING AND REVISION OF DE-
TERMINATIONS.—The Secretary may reopen or
revise any initial determination or reconsidered
214
determination described in this subsection
under guidelines established by the Secretary in
regulations.
‘‘(c) CONDUCT
OF RECONSIDERATIONS
BY INDE-
PENDENT CONTRACTORS.—
‘‘(1) IN GENERAL.—The Secretary shall enter
into contracts with qualified independent contractors
to conduct reconsiderations of initial determinations
made under subparagraphs (B) and (C) of sub-
section (a)(1), if such determinations involve either
whether a particular item or service is covered with
respect to an individual making a claim for benefits
or the amount, duration, or scope of an item or serv-
ice to which an individual making a claim for bene-
fits is eligible. Contracts shall be for an initial term
of three years and shall be renewable on a triennial
basis thereafter. This subsection shall not apply to
claims for persons described in subparagraphs (B)
and (C) of subsection (b)(1) that involve only the
amount of payment or the type of payment available
with respect to an item or service.
‘‘(2) QUALIFIED
INDEPENDENT
CONTRACTOR
DEFINED.—For purposes of this subsection, the
term ‘qualified independent contractor’ means an en-
tity or organization that is independent of any orga-
215
nization under contract with the Secretary that
makes 
initial 
determinations 
under 
subsection
(a)(1), and that meets the requirements established
by the Secretary consistent with paragraph (3).
‘‘(3) REQUIREMENTS.—Any 
qualified 
inde-
pendent contractor entering into a contract with the
Secretary under this subsection shall meet all of the
following requirements:
‘‘(A) IN
GENERAL.—The qualified inde-
pendent contractor shall perform such duties
and functions and assume such responsibilities
as may be required by the Secretary to carry
out the provisions of this subsection, and shall
have sufficient training and expertise in medical
science and legal matters to make reconsider-
ations under this subsection.
‘‘(B) 
RECONSIDERATIONS.—Subject 
to
subsection (b)(1)(A)(ii), the qualified inde-
pendent contractor shall review initial deter-
minations. In the case of an initial determina-
tion made with respect to whether an item or
service is reasonable and necessary for the diag-
nosis or treatment of illness or injury (under
section 1862(a)(1)(A)), such review shall in-
clude consideration of the facts and cir-
216
cumstances of the initial determination by a
physician or other appropriate health care pro-
fessional based on the medical condition of the
individual (including the medical records of the
individual) and any decisions with respect to
the reconsideration shall be based on applicable
information, including clinical experience and
valid, relevant medical, technical, and scientific
evidence.
‘‘(C) DEADLINES FOR DECISIONS.—
‘‘(i) RECONSIDERATIONS.—Except as
provided in clauses (iii) and (iv), and in ac-
cordance with subsection (e), the qualified
independent contractor shall conduct and
conclude a reconsideration under subpara-
graph (B), and mail the notice of the deci-
sion with respect to the reconsideration in
accordance with the medical needs of the
individual but not later than the end of the
30-day period beginning on the date a re-
quest for reconsideration has been timely
filed.
‘‘(ii) CONSEQUENCES OF FAILURE TO
MEET DEADLINE.—In the case of a failure
by the qualified independent contractor to
217
mail the notice of the decision by the end
of the period described in clause (i), or by
the end of the applicable period described
in subsection (e), or to provide notice by
the end of the period described in clause
(iii), as the case may be, the party request-
ing the reconsideration or appeal may re-
quest a hearing before the Secretary, not-
withstanding any requirements for a recon-
sidered determination for purposes of the
party’s right to such hearing.
‘‘(iii) 
EXPEDITED
RECONSIDER-
ATIONS.—The qualified independent con-
tractor shall perform an expedited recon-
sideration under subsection (b)(1)(F) as
follows:
‘‘(I) DEADLINE FOR DECISION.—
Notwithstanding section 216(j) and
subject to clause (iv), in accordance
with the medical needs of the indi-
vidual and not later than the end of
the 72-hour period beginning on the
date the qualified independent con-
tractor has received a request for such
reconsideration and has received such
218
medical or other records needed for
such reconsideration, the qualified
independent contractor shall provide
notice (by telephone and in writing) to
the individual and the provider of
services and attending physician of
the individual of the results of the re-
consideration. Such reconsideration
shall be conducted regardless of
whether the provider of services or
supplier will charge the individual for
continued services or whether the indi-
vidual will be liable for payment for
such continued services.
‘‘(II) CONSULTATION WITH BEN-
EFICIARY.—In such reconsideration,
the qualified independent contractor
may solicit the views of the individual
involved.
‘‘(III) SPECIAL RULE FOR HOS-
PITAL
DISCHARGES.—A reconsider-
ation of a discharge from a hospital
shall be conducted under this clause
in accordance with the provisions of
paragraphs (2), (3), and (4) of section
219
1154(e) as in effect on the date that
precedes the date of the enactment of
this subparagraph.
‘‘(iv) EXTENSION.—In any case in
which an individual requests an extension,
or the qualified independent contractor de-
termines that an extension is in the best
interests of the individual, an extension of
not greater than 14 days may be granted.
‘‘(D) LIMITATION ON INDIVIDUAL REVIEW-
ING DETERMINATIONS.—
‘‘(i) PHYSICIANS AND HEALTH CARE
PROFESSIONAL.—No physician or health
care professional under the employ of a
qualified 
independent 
contractor 
may
review—
‘‘(I) 
determinations 
regarding
health care services furnished to a pa-
tient if the physician or health care
professional was directly responsible
for furnishing such services; or
‘‘(II) determinations regarding
health care services provided in or by
an institution, organization, or agen-
cy, if the physician or any member of
220
the family of the physician or health
care professional has, directly or indi-
rectly, a significant financial interest
in such institution, organization, or
agency.
‘‘(ii) FAMILY DESCRIBED.—For pur-
poses of this paragraph, the family of a
physician or health care professional in-
cludes the spouse (other than a spouse who
is legally separated from the physician or
health care professional under a decree of
divorce or separate maintenance), children
including stepchildren and legally adopted
children), 
grandchildren, 
parents, 
and
grandparents of the physician or health
care professional.
‘‘(E) EXPLANATION
OF
DECISION.—Any
decision with respect to a reconsideration of a
qualified independent contractor shall be in
writing, and shall include a detailed explanation
of the decision as well as a discussion of the
pertinent facts and applicable regulations ap-
plied in making such decision, and in the case
of a determination of whether an item or serv-
ice is reasonable and necessary for the diag-
221
nosis or treatment of illness or injury (under
section 1862(a)(1)(A)) an explanation of the
medical and scientific rationale for the decision.
‘‘(F) NOTICE REQUIREMENTS.—Whenever
a qualified independent contractor makes a de-
cision with respect to a reconsideration under
this subsection, the qualified independent con-
tractor shall promptly notify the entity respon-
sible for the payment of claims under part A or
part B of such decision.
‘‘(G) DISSEMINATION
OF
DECISIONS
ON
RECONSIDERATIONS.—Each 
qualified 
inde-
pendent contractor shall make available all deci-
sions with respect to reconsiderations of such
qualified independent contractors to fiscal inter-
mediaries (under section 1816), carriers (under
section 1842), peer review organizations (under
part B of title XI), Medicare+Choice organiza-
tions offering Medicare+Choice plans under
part C, other entities under contract with the
Secretary to make initial determinations under
part A or part B or title XI, and to the public.
The Secretary shall establish a methodology
under which qualified independent contractors
shall carry out this subparagraph.
222
‘‘(H) ENSURING
CONSISTENCY
IN
DECI-
SIONS.—Each qualified independent contractor
shall monitor its decisions with respect to re-
considerations to ensure the consistency of such
decisions with respect to requests for reconsid-
eration of similar or related matters.
‘‘(I) DATA COLLECTION.—
‘‘(i) IN
GENERAL.—Consistent with
the requirements of clause (ii), a qualified
independent contractor shall collect such
information relevant to its functions, and
keep and maintain such records in such
form and manner as the Secretary may re-
quire to carry out the purposes of this sec-
tion and shall permit access to and use of
any such information and records as the
Secretary may require for such purposes.
‘‘(ii) TYPE
OF
DATA
COLLECTED.—
Each 
qualified 
independent 
contractor
shall keep accurate records of each deci-
sion made, consistent with standards es-
tablished by the Secretary for such pur-
pose. Such records shall be maintained in
an electronic database in a manner that
provides for identification of the following:
223
‘‘(I) Specific claims that give rise
to appeals.
‘‘(II) Situations suggesting the
need for increased education for pro-
viders of services, physicians, or sup-
pliers.
‘‘(III) Situations suggesting the
need for changes in national or local
coverage policy.
‘‘(IV) Situations suggesting the
need for changes in local medical re-
view policies.
‘‘(iii) 
ANNUAL
REPORTING.—Each
qualified independent contractor shall sub-
mit annually to the Secretary (or otherwise
as the Secretary may request) records
maintained under this paragraph for the
previous year.
‘‘(J) HEARINGS BY THE SECRETARY.—The
qualified independent contractor shall—
‘‘(i) prepare such information as is re-
quired for an appeal of a decision of the
contractor with respect to a reconsider-
ation to the Secretary for a hearing, in-
cluding as necessary, explanations of issues
224
involved in the decision and relevant poli-
cies, and
‘‘(ii) participate in such hearings as
required by the Secretary.
‘‘(4) NUMBER
OF
QUALIFIED
INDEPENDENT
CONTRACTORS.—The Secretary shall enter into con-
tracts with such number of qualified independent
contractors under this subsection as the Secretary
determines appropriate to carry out the provisions of
this subsection.
‘‘(5) LIMITATION ON QUALIFIED INDEPENDENT
CONTRACTOR LIABILITY.—No qualified independent
contractor having a contract with the Secretary
under this subsection and no person who is em-
ployed by, or who has a fiduciary relationship with,
any such qualified independent contractor or who
furnishes professional services to such qualified inde-
pendent contractor, shall be held by reason of the
performance of any duty, function, or activity re-
quired or authorized pursuant to this subsection or
to a valid contract entered into under this sub-
section, to have violated any criminal law, or to be
civilly liable under any law of the United States or
of any State (or political subdivision thereof) pro-
225
vided due care was exercised in the performance of
such duty, function, or activity.
‘‘(d) MEDICAL EXIGENT PROCESS FOR CONTRAC-
TORS.—
‘‘(1) IN GENERAL.—An individual may request,
either orally or in writing, a medical exigent review
under subsection (b). Such request shall be made to
the contractor who made the initial determination.
‘‘(2) CONDITIONS FOR GRANTING A MEDICAL
EXIGENT REVIEW.—A medical exigent review shall
be granted where—
‘‘(A) the contractor determines that the
application of the standard time frame for con-
ducting a redetermination under subsection
(a)(3) could seriously jeopardize the life or
health of the individual or such individual’s
ability to attain, maintain, or regain maximum
function, or
‘‘(B) the individual submits a certification
from a physician that the jeopardy could occur.
‘‘(3) DEADLINE
FOR
MEDICAL
EXIGENT
RE-
VIEWS.—If an individual is granted a medical exi-
gent review under this subsection, the review shall
be conducted and notice of the review shall be made,
in accordance with the individual’s medical needs,
226
but no later than 72 hours after the request was
made.
‘‘(4) FAILURE TO MEET TIME FRAMES.—In the
event the contractor who made the initial determina-
tion to meet the time frame in paragraph (3), the
individual may proceed to the next level of review.
‘‘(e) MEDICAL EXIGENT PROCESS FOR QUALIFIED
INDEPENDENT CONTRACTORS.—
‘‘(1) IN GENERAL.—An individual may request,
either orally or in writing, a medical exigent recon-
sideration of an initial determination under sub-
section (a) or a determination made under sub-
section (d). Such request shall be made to the quali-
fied independent contractor.
‘‘(2) CONDITIONS FOR GRANTING A MEDICAL
EXIGENT REVIEW.—A medical exigent review shall
be granted where—
‘‘(A) the qualified independent contractor
determines that the application of the standard
time frame for conducting a review could seri-
ously jeopardize the life or health of the indi-
vidual or such individual’s ability to attain,
maintain, or regain maximum function,
227
‘‘(B) the individual submits a certification
from a physician that the jeopardy could occur,
or
‘‘(C) was expedited at the previous con-
tractor level.
‘‘(3) DEADLINE
FOR
MEDICAL
EXIGENT
RE-
VIEWS.—If an individual is granted a medical exi-
gent reconsideration under this paragraph, the re-
view shall be conducted and notice of the review
shall be made, in accordance with the individual’s
medical needs, but no later than 72 hours after the
request was made.
‘‘(4) FAILURE TO MEET TIME FRAMES.—In the
event the qualified independent contractor or the
Secretary fails to meet the time frame in paragraph
(3), the individual may proceed to the next level of
review.
‘‘(f) TIME FRAME FOR REVIEW BY SECRETARY.—
The Secretary shall conduct all reviews in a time frame
that is in accordance with the medical exigencies of the
case.
‘‘(g) ADMINISTRATIVE PROVISIONS.—
‘‘(1) LIMITATION ON REVIEW OF CERTAIN REG-
ULATIONS.—A regulation or instruction that relates
to a method for determining the amount of payment
228
under part B and that was initially issued before
January 1, 1981, shall not be subject to judicial re-
view.
‘‘(2) OUTREACH.—The Secretary shall perform
such outreach activities as are necessary to inform
individuals entitled to benefits under this title and
providers of services and suppliers with respect to
their rights of, and the process for, appeals made
under this section. The Secretary shall use the toll-
free telephone number maintained by the Secretary
under section 1804(b) to provide information re-
garding appeal rights and respond to inquiries re-
garding the status of appeals.
‘‘(3) CONTINUING
EDUCATION
REQUIREMENT
FOR QUALIFIED INDEPENDENT CONTRACTORS AND
ADMINISTRATIVE LAW JUDGES.—The Secretary shall
provide to each qualified independent contractor,
and, in consultation with the Commissioner of Social
Security, to administrative law judges that decide
appeals of reconsiderations of initial determinations
or other decisions or determinations under this sec-
tion, such continuing education with respect to cov-
erage of items and services under this title or poli-
cies of the Secretary with respect to part B of title
XI as is necessary for such qualified independent
229
contractors and administrative law judges to make
informed decisions with respect to appeals.
‘‘(4) REPORTS.—
‘‘(A) ANNUAL
REPORT
TO
CONGRESS.—
The Secretary shall submit to Congress an an-
nual report describing the number of appeals
for the previous year, identifying issues that re-
quire administrative or legislative actions, and
including any recommendations of the Secretary
with respect to such actions. The Secretary
shall include in such report an analysis of de-
terminations by qualified independent contrac-
tors with respect to inconsistent decisions and
an analysis of the causes of any such inconsist-
encies.
‘‘(B) SURVEY.—Not less frequently than
every 5 years, the Secretary shall conduct a
survey of a valid sample of individuals entitled
to benefits under this title who have filed ap-
peals of determinations under this section, pro-
viders of services, and suppliers to determine
the satisfaction of such individuals or entities
with the process for appeals of determinations
provided for under this section and education
and training provided by the Secretary with re-
230
spect to that process. The Secretary shall sub-
mit to Congress a report describing the results
of the survey, and shall include any rec-
ommendations for administrative or legislative
actions that the Secretary determines appro-
priate.’’.
(b) APPLICABILITY OF REQUIREMENTS AND LIMITA-
TIONS ON LIABILITY OF QUALIFIED INDEPENDENT CON-
TRACTORS
TO MEDICARE+CHOICE INDEPENDENT AP-
PEALS CONTRACTORS.—Section 1852(g)(4) (42 U.S.C.
1395w22(g)(4)) is amended by adding at the end the fol-
lowing: ‘‘The provisions of section 1869(c)(5) shall apply
to independent outside entities under contract with the
Secretary under this paragraph.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section apply with respect to initial determinations
made on or after October 1, 2002.
SEC. 522. REVISIONS TO MEDICARE COVERAGE PROCESS.
(a) REVIEW
OF DETERMINATIONS.—Section 1869
(42 U.S.C. 1395ff), as amended by section 521, is further
amended by adding at the end the following new sub-
section:
‘‘(h) REVIEW OF COVERAGE DETERMINATIONS.—
‘‘(1) NATIONAL COVERAGE DETERMINATIONS.—
231
‘‘(A) IN
GENERAL.—Review of any na-
tional coverage determination shall be subject to
the following limitations:
‘‘(i) Such a determination shall not be
reviewed by any administrative law judge.
‘‘(ii) Such a determination shall not
be held unlawful or set aside on the ground
that a requirement of section 553 of title
5, United States Code, or section 1871(b)
of this title, relating to publication in the
Federal Register or opportunity for public
comment, was not satisfied.
‘‘(iii) Upon the filing of a complaint
by an aggrieved party, the Secretary shall
provide for the review of a national cov-
erage determination by the advisory panel
established pursuant to paragraph (3)
(hereinafter referred to as the ‘Panel’). In
conducting such a review, the Panel shall
review the record to evaluate whether the
determination is in accord with sound med-
ical practice, taking into account medical,
technological, or clinical advancements,
and any other medical, scientific, or other
relevant information that the Panel deems
232
reliable and may consider information that
was not available or was not considered at
the time of the determination. The Panel
shall make a recommendation to the Sec-
retary as to whether the determination
should be upheld, modified, or set aside,
and the Secretary shall have 30 days from
the receipt of such recommendation to
issue a decision.
‘‘(iv) A decision of the Secretary
under clause (iii) constitutes a final agency
action and is subject to judicial review.
‘‘(B) DEFINITION OF NATIONAL COVERAGE
DETERMINATION.—For purposes of this section,
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, but
does not include a determination of what code,
if any, is assigned to a particular item or serv-
ice covered under this title or a determination
with respect to the amount of payment made
for a particular item or service so covered.
‘‘(2) LOCAL COVERAGE DETERMINATION.—
233
‘‘(A) IN GENERAL.—Upon the filing of a
complaint by an aggrieved party (except in the
cases of issues regarding the coding or sup-
porting documentation), the Secretary shall
provide for the review of a local coverage deter-
mination by the Panel as provided in paragraph
(3) except that for purposes of a review under
this subsection, the Panel shall also consider
any special circumstances that may be relevant
to the practice of medicine in the locality. The
Panel shall make a recommendation to the Sec-
retary as to whether the determination should
be upheld, modified, or set aside, and the Sec-
retary shall have 30 days from the receipt of
such recommendation to issue a decision to up-
hold the determination or to remand it to the
fiscal intermediary or carrier for revision. A fis-
cal intermediary or carrier shall have 30 days
from the receipt of any remand instructions
from the Secretary in which to complete such
revision. The decision of the Secretary shall
have effect only with respect to the local cov-
erage determination. Such a decision constitutes
a final agency action and is subject to judicial
review.
234
‘‘(B) DEFINITION
OF
LOCAL
COVERAGE
DETERMINATION.—For purposes of this section,
the term ‘local coverage determination’ means a
determination by a fiscal intermediary or a car-
rier under part A or part B, as applicable, re-
specting whether or not a particular item or
service is covered on an intermediary- or car-
rier-wide basis under such parts, in accordance
with section 1862(a)(1)(A).
‘‘(3) ESTABLISHMENT OF MEDICAL ADVISORY
PANEL.—For the purposes of providing expert clin-
ical and scientific advice and recommendations to
the Secretary regarding reconsiderations of national
or local coverage determinations under paragraphs
(1) and (2), the Secretary shall establish panels of
experts or use panels of experts (or members of such
panels) established before the date of enactment of
this subsection or both. The Secretary shall appoint
as members of any such panel persons the Secretary
determines to have an appropriate level of expertise
in the subject matter, but shall not appoint any indi-
vidual who is in the regular full-time employ of the
Health Care Financing Administration or any indi-
vidual who participated in the initial coverage deter-
235
mination that is the subject of a reconsideration re-
quest.
‘‘(4) PENDING
NATIONAL
COVERAGE
DETER-
MINATIONS.—
‘‘(A) IN GENERAL.—In the event the Sec-
retary has not issued a national coverage or
noncoverage determination with respect to a
particular type or class of items or services, an
aggrieved person (as described in paragraph
(5)) may submit to the Secretary a request to
make such a determination with respect to such
items or services. By not later than the end of
the 90-day period beginning on the date the
Secretary receives such a request (notwith-
standing the receipt by the Secretary of new
evidence, if any, during such 90-day period),
the Secretary shall take one of the following ac-
tions:
‘‘(i) Issue a national coverage deter-
mination, with or without limitations.
‘‘(ii) Issue a national noncoverage de-
termination.
‘‘(iii) Issue a determination that no
national coverage or noncoverage deter-
mination is appropriate as of the end of
236
such 90-day period with respect to national
coverage of such items or services.
‘‘(iv) Issue a notice that states that
the Secretary has not completed a review
of the request for a national coverage de-
termination and that includes an identi-
fication of the remaining steps in the Sec-
retary’s review process and a deadline by
which the Secretary will complete the re-
view and take an action described in clause
(i), (ii), or (iii).
‘‘(B) DEEMED
ACTION
BY
THE
SEC-
RETARY.—In the case of an action described in
subparagraph (A)(iv), if the Secretary fails to
take an action referred to in such subparagraph
by the deadline specified by the Secretary under
such subparagraph, then the Secretary is
deemed to have taken an action described in
subparagraph (A)(iii) as of the deadline.
‘‘(C) 
EXPLANATION
OF
DETERMINA-
TION.—When issuing a determination under
subparagraph (A), the Secretary shall include
an explanation of the basis for the determina-
tion. An action taken under subparagraph (A)
(other than clause (iv)) is deemed to be a na-
237
tional coverage determination for purposes of
review under paragraph (1).
‘‘(5) STANDING.—An action under this sub-
section seeking review of a national coverage deter-
mination or local coverage determination may be ini-
tiated only by individuals entitled to benefits under
part A, or enrolled under part B, or both, who are
in need of the items or services that are the subject
of the coverage determination.
‘‘(6) PUBLICATION ON THE INTERNET OF DECI-
SIONS OF HEARINGS OF THE SECRETARY.—Each de-
cision of a hearing by the Secretary with respect to
a national coverage determination shall be made
public, and the Secretary shall publish each decision
on the medicare Internet site of the Department of
Health and Human Services. The Secretary shall re-
move from such decision any information that would
identify any individual, provider of services, or sup-
plier.
‘‘(7) ANNUAL REPORT ON NATIONAL COVERAGE
DETERMINATIONS.—
‘‘(A) IN
GENERAL.—Not later than De-
cember 1 of each year, beginning in 2001, the
Secretary shall submit to Congress a report
that sets forth a detailed compilation of the ac-
238
tual time periods that were necessary to com-
plete and fully implement national coverage de-
terminations that were made in the previous fis-
cal year for items, services, or medical devices
not previously covered as a benefit under this
title, including, with respect to each new item,
service, or medical device, a statement of the
time taken by the Secretary to make and imple-
ment the necessary coverage, coding, and pay-
ment determinations, and including the time
taken to complete each significant step in the
process of making and implementing such de-
terminations.
‘‘(B) PUBLICATION OF REPORTS ON THE
INTERNET.—The Secretary shall publish each
report submitted under subparagraph (A) on
the medicare Internet site of the Department of
Health and Human Services.
‘‘(8) CONSTRUCTION.—Nothing in this sub-
section shall be construed as permitting administra-
tive or judicial review pursuant to this section inso-
far as such review is explicitly prohibited or re-
stricted under another provision of law.’’.
(b) ESTABLISHMENT OF A PROCESS FOR COVERAGE
DETERMINATIONS.—Section 
1862(a) 
(42 
U.S.C.
239
1395y(a)) is amended by adding at the end the following
new sentence: ‘‘In making a national coverage determina-
tion (as defined in paragraph (1)(B) of section 1869(h))
the Secretary shall ensure that the public is afforded no-
tice and opportunity to comment prior to implementation
by the Secretary of the determination; meetings of advi-
sory committees established under section 1114(f) with re-
spect to the determination are made on the record; in
making the determination, the Secretary has considered
applicable information (including clinical experience and
valid, relevant medical, technical, and scientific evidence)
with respect to the subject matter of the determination;
and in the determination, provide a clear statement of the
basis for the determination (including responses to com-
ments received from the public), the assumptions under-
lying that basis, and make available to the public the data
(other than proprietary data) considered in making the de-
termination.’’.
(c) IMPROVEMENTS TO THE MEDICARE ADVISORY
COMMITTEE PROCESS.—Section 1114 (42 U.S.C. 1314)
is amended by adding at the end the following new sub-
section:
‘‘(i)(1) Any advisory committee appointed under sub-
section (f) to advise the Secretary on matters relating to
the interpretation, application, or implementation of sec-
240
tion 1862(a)(1) shall assure the full participation of a
nonvoting member in the deliberations of the advisory
committee, and shall provide such nonvoting member ac-
cess to all information and data made available to voting
members of the advisory committee, other than informa-
tion that—
‘‘(A) is exempt from disclosure pursuant to sub-
section (a) of section 552 of title 5, United States
Code, by reason of subsection (b)(4) of such section
(relating to trade secrets); or
‘‘(B) the Secretary determines would present a
conflict of interest relating to such nonvoting mem-
ber.
‘‘(2) If an advisory committee described in paragraph
(1) organizes into panels of experts according to types of
items or services considered by the advisory committee,
any such panel of experts may report any recommendation
with respect to such items or services directly to the Sec-
retary without the prior approval of the advisory com-
mittee or an executive committee thereof.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section apply with respect to—
(1) a review of any national or local coverage
determination filed,
241
(2) a request to make such a determination
made, and
(3) a national coverage determination made, on
or after October 1, 2001.
Subtitle D—Improving Access to
New Technologies
SEC. 531. REIMBURSEMENT IMPROVEMENTS FOR NEW
CLINICAL LABORATORY TESTS AND DURA-
BLE MEDICAL EQUIPMENT.
(a) PAYMENT
RULE
FOR
NEW
LABORATORY
TESTS.—Section 
1833(h)(4)(B)(viii) 
(42 
U.S.C.
1395l(h)(4)(B)(viii)) is amended by inserting before the
period at the end the following: ‘‘(or 100 percent of such
median in the case of a clinical diagnostic laboratory test
performed on or after January 1, 2001, that the Secretary
determines is a new test for which no limitation amount
has previously been established under this subpara-
graph)’’.
(b) ESTABLISHMENT
OF CODING
AND PAYMENT
PROCEDURES FOR NEW CLINICAL DIAGNOSTIC LABORA-
TORY TESTS AND OTHER ITEMS ON A FEE SCHEDULE.—
Not later than 1 year after the date of the enactment of
this Act, the Secretary of Health and Human Services
shall establish procedures for coding and payment deter-
minations for the categories of new clinical diagnostic lab-
242
oratory tests and new durable medical equipment under
part B of the title XVIII of the Social Security Act that
permit public consultation in a manner consistent with the
procedures established for implementing coding modifica-
tions for ICD–9–CM.
(c) REPORT ON PROCEDURES USED FOR ADVANCED,
IMPROVED TECHNOLOGIES.—Not later than 1 year after
the date of the enactment of this Act, the Secretary of
Health and Human Services shall submit to Congress a
report that identifies the specific procedures used by the
Secretary under part B of title XVIII of the Social Secu-
rity Act to adjust payments for clinical diagnostic labora-
tory tests and durable medical equipment which are classi-
fied to existing codes where, because of an advance in
technology with respect to the test or equipment, there has
been a significant increase or decrease in the resources
used in the test or in the manufacture of the equipment,
and there has been a significant improvement in the per-
formance of the test or equipment. The report shall in-
clude such recommendations for changes in law as may
be necessary to assure fair and appropriate payment levels
under such part for such improved tests and equipment
as reflects increased costs necessary to produce improved
results.
243
SEC. 532. RETENTION OF HCPCS LEVEL III CODES.
(a) IN GENERAL.—The Secretary of Health and
Human Services shall maintain and continue the use of
level III codes of the HCPCS coding system (as such sys-
tem was in effect on August 16, 2000) through December
31, 2003, and shall make such codes available to the pub-
lic.
(b) DEFINITION.—For purposes of this section, the
term ‘‘HCPCS Level III codes’’ means the alphanumeric
codes for local use under the Health Care Financing Ad-
ministration 
Common 
Procedure 
Coding 
System
(HCPCS).
SEC. 533. RECOGNITION OF NEW MEDICAL TECHNOLOGIES
UNDER INPATIENT HOSPITAL PPS.
(a) EXPEDITING
RECOGNITION
OF
NEW
TECH-
NOLOGIES INTO INPATIENT PPS CODING SYSTEM.—
(1) REPORT.—Not later than April 1, 2001, the
Secretary of Health and Human Services shall sub-
mit to Congress a report on methods of expeditiously
incorporating new medical services and technologies
into the clinical coding system used with respect to
payment for inpatient hospital services furnished
under the medicare program under title XVIII of the
Social Security Act, together with a detailed descrip-
tion of the Secretary’s preferred methods to achieve
this purpose.
244
(2) IMPLEMENTATION.—Not later than October
1, 2001, the Secretary shall implement the preferred
methods described in the report transmitted pursu-
ant to paragraph (1).
(b) ENSURING APPROPRIATE PAYMENTS FOR HOS-
PITALS INCORPORATING NEW MEDICAL SERVICES AND
TECHNOLOGIES.—
(1) ESTABLISHMENT OF MECHANISM.—Section
1886(d)(5) (42 U.S.C. 1395ww(d)(5)) is amended
by adding at the end the following new subpara-
graphs:
‘‘(K)(i) Effective for discharges beginning on or after
October 1, 2001, the Secretary shall establish a mecha-
nism to recognize the costs of new medical services and
technologies under the payment system established under
this subsection. Such mechanism shall be established after
notice and opportunity for public comment (in the publica-
tions required by subsection (e)(5) for a fiscal year or oth-
erwise).
‘‘(ii) The mechanism established pursuant to clause
(i) shall—
‘‘(I) apply to a new medical service or tech-
nology if, based on the estimated costs incurred with
respect to discharges involving such service or tech-
nology, the DRG prospective payment rate otherwise
245
applicable to such discharges under this subsection
is inadequate;
‘‘(II) provide for the collection of data with re-
spect to the costs of a new medical service or tech-
nology described in subclause (I) for a period of not
less than two years and not more than three years
beginning on the date on which an inpatient hospital
code is issued with respect to the service or tech-
nology;
‘‘(III) subject to paragraph (4)(C)(iii), provide
for additional payment to be made under this sub-
section with respect to discharges involving a new
medical service or technology described in subclause
(I) that occur during the period described in sub-
clause (II) in an amount that adequately reflects the
estimated average cost of such service or technology;
and
‘‘(IV) provide that discharges involving such a
service or technology that occur after the close of the
period described in subclause (II) will be classified
within a new or existing diagnosis-related group with
a weighting factor under paragraph (4)(B) that is
derived from cost data collected with respect to dis-
charges occurring during such period.
246
‘‘(iii) For purposes of clause (ii)(II), the term ‘inpa-
tient hospital code’ means any code that is used with re-
spect to inpatient hospital services for which payment may
be made under this subsection and includes an alpha-
numeric code issued under the International Classification
of Diseases, 9th Revision, Clinical Modification (‘ICD–9–
CM’) and its subsequent revisions.
‘‘(iv) For purposes of clause (ii)(III), the term ‘addi-
tional payment’ means, with respect to a discharge for a
new medical service or technology described in clause
(ii)(I), an amount that exceeds the prospective payment
rate otherwise applicable under this subsection to dis-
charges involving such service or technology that would
be made but for this subparagraph.
‘‘(v) The requirement under clause (ii)(III) for an ad-
ditional payment may be satisfied by means of a new-tech-
nology group (described in subparagraph (L)), an add-on
payment, a payment adjustment, or any other similar
mechanism for increasing the amount otherwise payable
with respect to a discharge under this subsection. The Sec-
retary may not establish a separate fee schedule for such
additional payment for such services and technologies, by
utilizing a methodology established under subsection (a)
or (h) of section 1834 to determine the amount of such
247
additional payment, or by other similar mechanisms or
methodologies.
‘‘(vi) For purposes of this subparagraph and sub-
paragraph (L), a medical service or technology will be con-
sidered a ‘new medical service or technology’ if the service
or technology meets criteria established by the Secretary
after notice and an opportunity for public comment.
‘‘(L)(i) In establishing the mechanism under sub-
paragraph (K), the Secretary may establish new-tech-
nology groups into which a new medical service or tech-
nology will be classified if, based on the estimated average
costs incurred with respect to discharges involving such
service or technology, the DRG prospective payment rate
otherwise applicable to such discharges under this sub-
section is inadequate.
‘‘(ii) Such groups—
‘‘(I) shall not be based on the costs associated
with a specific new medical service or technology;
but
‘‘(II) shall, in combination with the applicable
standardized amounts and the weighting factors as-
signed to such groups under paragraph (4)(B), re-
flect such cost cohorts as the Secretary determines
are appropriate for all new medical services and
248
technologies that are likely to be provided as inpa-
tient hospital services in a fiscal year.
‘‘(iii) The methodology for classifying specific hos-
pital discharges within a diagnosis-related group under
paragraph (4)(A) or a new-technology group shall provide
that a specific hospital discharge may not be classified
within both a diagnosis-related group and a new-tech-
nology group.’’.
(2) PRIOR CONSULTATION.—The Secretary of
Health and Human Services shall consult with
groups representing hospitals, physicians, and manu-
facturers of new medical technologies before pub-
lishing the notice of proposed rulemaking required
by section 1886(d)(5)(K)(i) of the Social Security
Act (as added by paragraph (1)).
(3) 
CONFORMING
AMENDMENT.—Section
1886(d)(4)(C)(i) (42 U.S.C. 1395ww(d)(4)(C)(i)) is
amended by striking ‘‘technology,’’ and inserting
‘‘technology (including a new medical service or
technology under paragraph (5)(K)),’’.
Subtitle E—Other Provisions
SEC. 541. INCREASE IN REIMBURSEMENT FOR BAD DEBT.
Section 1861(v)(1)(T) (42 U.S.C. 1395x(v)(1)(T)) is
amended—
(1) in clause (ii), by striking ‘‘and’’ at the end;
249
(2) in clause (iii)—
(A) by striking ‘‘during a subsequent fiscal
year’’ and inserting ‘‘during fiscal year 2000’’;
and
(B) by striking the period at the end and
inserting ‘‘, and’’; and
(3) by adding at the end the following new
clause:
‘‘(iv) for cost reporting periods beginning dur-
ing a subsequent fiscal year, by 30 percent of such
amount otherwise allowable.’’.
SEC. 542. TREATMENT OF CERTAIN PHYSICIAN PATHOLOGY
SERVICES UNDER MEDICARE.
(a) IN GENERAL.—When an independent laboratory
furnishes the technical component of a physician pathol-
ogy service to a fee-for-service medicare beneficiary who
is an inpatient or outpatient of a covered hospital, the Sec-
retary of Health and Human Services shall treat such
component as a service for which payment shall be made
to the laboratory under section 1848 of the Social Security
Act (42 U.S.C. 1395w–4) and not as an inpatient hospital
service for which payment is made to the hospital under
section 1886(d) of such Act (42 U.S.C. 1395ww(d)) or
as an outpatient hospital service for which payment is
250
made to the hospital under section 1833(t) of such Act
(42 U.S.C. 1395l(t)).
(b) DEFINITIONS.—For purposes of this section:
(1) COVERED HOSPITAL.—The term ‘‘covered
hospital’’ means, with respect to an inpatient or an
outpatient, a hospital that had an arrangement with
an independent laboratory that was in effect as of
July 22, 1999, under which a laboratory furnished
the technical component of physician pathology serv-
ices to fee-for-service medicare beneficiaries who
were hospital inpatients or outpatients, respectively,
and submitted claims for payment for such compo-
nent to a medicare carrier (that has a contract with
the Secretary under section 1842 of the Social Secu-
rity Act, 42 U.S.C. 1395u) and not to such hospital.
(2) 
FEE-FOR-SERVICE
MEDICARE
BENE-
FICIARY.—The term ‘‘fee-for-service medicare bene-
ficiary’’ means an individual who—
(A) is entitled to benefits under part A, or
enrolled under part B, or both, of such title;
and
(B) is not enrolled in any of the following:
(i) A Medicare+Choice plan under
part C of such title.
251
(ii) A plan offered by an eligible orga-
nization under section 1876 of such Act
(42 U.S.C. 1395mm).
(iii) A program of all-inclusive care
for the elderly (PACE) under section 1894
of such Act (42 U.S.C. 1395eee).
(iv) A social health maintenance orga-
nization (SHMO) demonstration project
established under section 4018(b) of the
Omnibus Budget Reconciliation Act of
1987 (Public Law 100–203).
(c) EFFECTIVE DATE.—This section applies to serv-
ices furnished during the 2-year period beginning on Jan-
uary 1, 2001.
(d) GAO REPORT.—
(1) STUDY.—The Comptroller General of the
United States shall conduct a study of the effects of
the previous provisions of this section on hospitals
and laboratories and access of fee-for-service medi-
care beneficiaries to the technical component of phy-
sician pathology services.
(2) REPORT.—Not later than April 1, 2002, the
Comptroller General shall submit to Congress a re-
port on such study. The report shall include rec-
ommendations about whether such provisions should
252
be extended after the end of the period specified in
subsection (c) for either or both inpatient and out-
patient hospital services, and whether the provisions
should be extended to other hospitals.
SEC. 543. EXTENSION OF ADVISORY OPINION AUTHORITY.
Section 1128D(b)(6) (42 U.S.C. 1320a–7d(b)(6)) is
amended by striking ‘‘and before the date which is 4 years
after such date of enactment’’.
SEC. 544. CHANGE IN ANNUAL MEDPAC REPORTING.
(a) REVISION OF DEADLINES FOR SUBMISSION OF
REPORTS.—
(1) IN GENERAL.—Section 1805(b)(1)(D) (42
U.S.C. 1395b–6(b)(1)(D)) is amended by striking
‘‘June 1 of each year (beginning with 1998),’’ and
inserting ‘‘June 15 of each year,’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) applies beginning with 2001.
(b) REQUIREMENT FOR ON THE RECORD VOTES ON
RECOMMENDATIONS.—Section 
1805(b) 
(42 
U.S.C.
1395b–6(b)) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(7) 
VOTING
AND
REPORTING
REQUIRE-
MENTS.—With respect to each recommendation con-
tained in a report submitted under paragraph (1),
each member of the Commission shall vote on the
253
recommendation, and the Commission shall include,
by member, the results of that vote in the report
containing the recommendation.’’.
SEC. 545. DEVELOPMENT OF PATIENT ASSESSMENT IN-
STRUMENTS.
(a) DEVELOPMENT.—
(1) IN GENERAL.—Not later than January 1,
2005, the Secretary of Health and Human Services
shall submit to the Committee on Ways and Means
and the Committee on Commerce of the House of
Representatives and the Committee on Finance of
the Senate a report on the development of standard
instruments for the assessment of the health and
functional status of patients, for whom items and
services described in subsection (b) are furnished,
and include in the report a recommendation on the
use of such standard instruments for payment pur-
poses.
(2) DESIGN FOR COMPARISON OF COMMON ELE-
MENTS.—The Secretary shall design such standard
instruments in a manner such that—
(A) elements that are common to the items
and services described in subsection (b) may be
readily comparable and are statistically compat-
ible;
254
(B) only elements necessary to meet pro-
gram objectives are collected; and
(C) the standard instruments supersede
any other assessment instrument used before
that date.
(3) CONSULTATION.—In developing an assess-
ment instrument under paragraph (1), the Secretary
shall consult with the Medicare Payment Advisory
Commission, the Agency for Healthcare Research
and Quality, and qualified organizations rep-
resenting providers of services and suppliers under
title XVIII.
(b) DESCRIPTION OF SERVICES.—For purposes of
subsection (a), items and services described in this sub-
section are those items and services furnished to individ-
uals entitled to benefits under part A, or enrolled under
part B, or both of title XVIII of the Social Security Act
for which payment is made under such title, and include
the following:
(1) Inpatient and outpatient hospital services.
(2) Inpatient and outpatient rehabilitation serv-
ices.
(3) Covered skilled nursing facility services.
(4) Home health services.
255
(5) Physical or occupational therapy or speech-
language pathology services.
(6) Items and services furnished to such indi-
viduals determined to have end stage renal disease.
(7) Partial hospitalization services and other
mental health services.
(8) Any other service for which payment is
made under such title as the Secretary determines to
be appropriate.
SEC. 546. GAO REPORT ON IMPACT OF THE EMERGENCY
MEDICAL TREATMENT AND ACTIVE LABOR
ACT (EMTALA) ON HOSPITAL EMERGENCY DE-
PARTMENTS.
(a) REPORT.—The Comptroller General of the
United States shall submit a report to the Committee on
Commerce and the Committee on Ways and Means of the
House of Representatives and the Committee on Finance
of the Senate by May 1, 2001, on the effect of the Emer-
gency Medical Treatment and Active Labor Act on hos-
pitals, emergency physicians, and physicians covering
emergency department call throughout the United States.
(b) REPORT REQUIREMENTS.—The report should
evaluate—
(1) the extent to which hospitals, emergency
physicians, and physicians covering emergency de-
256
partment call provide uncompensated services in re-
lation to the requirements of EMTALA;
(2) the extent to which the regulatory require-
ments and enforcement of EMTALA have expanded
beyond the legislation’s original intent;
(3) estimates for the total dollar amount of
EMTALA-related care uncompensated costs to
emergency physicians, physicians covering emer-
gency department call, hospital emergency depart-
ments, and other hospital services;
(4) the extent to which different portions of the
United States may be experiencing different levels of
uncompensated EMTALA-related care;
(5) the extent to which EMTALA would be
classified as an unfunded mandate if it were enacted
today;
(6) the extent to which States have programs to
provide financial support for such uncompensated
care;
(7) possible sources of funds, including medi-
care hospital bad debt accounts, that are available to
hospitals to assist with the cost of such uncompen-
sated care; and
(8) the financial strain that illegal immigration
populations, the uninsured, and the underinsured
257
place on hospital emergency departments, other hos-
pital services, emergency physicians, and physicians
covering emergency department call.
(c) DEFINITION.—In this section, the terms ‘‘Emer-
gency Medical Treatment and Active Labor Act’’ and
‘‘EMTALA’’ mean section 1867 of the Social Security Act
(42 U.S.C. 1395dd).
SEC. 547. APPLICATION OF BLOODBORNE PATHOGEN
STANDARD TO CERTAIN HOSPITALS.
(a) IN GENERAL.—Section 1866 (42 U.S.C. 1395cc)
is amended—
(1) in subsection (a)(1)—
(A) in subparagraph (R), by striking
‘‘and’’ at the end;
(B) in subparagraph (S), by striking the
period at the end and inserting ‘‘, and’’; and
(C) by inserting after subparagraph (S)
the following new subparagraph:
‘‘(T) in the case of hospitals that are not other-
wise subject to regulation by the Occupational Safe-
ty and Health Administration, to comply with the
Bloodborne 
Pathogens 
standard 
under 
section
1910.1030 of title 29 of the Code of Federal Regula-
tions (or as subsequently redesignated).’’; and
258
(2) by adding at the end of subsection (b) the
following new paragraph:
‘‘(4) With respect to a failure to comply with the re-
quirement of subsection (a)(1)(T), the Secretary shall not
terminate an agreement under this section but shall im-
pose a monetary fine in an amount similar to the amount
of civil penalties that may be imposed under section 17
of the Occupational Safety and Health Act of 1970 for
a violation of the standard referred to in such subsection
by a hospital subject to regulation by the Occupational
Safety and Health Administration. Such penalty shall be
imposed and collected in the same manner as civil money
penalties under subsection (a) of section 1128A are im-
posed and collected under that section.’’.
(b) EFFECTIVE DATE.—The amendments made by
this section apply to hospitals as of January 1, 2002.
259
TITLE VI—PROVISIONS RELAT-
ING 
TO 
PART 
C
(MEDICARE+CHOICE 
PRO-
GRAM) 
AND 
OTHER 
MEDI-
CARE MANAGED CARE PROVI-
SIONS
Subtitle A—Medicare+Choice
Payment Reforms
SEC. 
601. 
INCREASED 
PAYMENT 
FOR 
ACCOUNTABLE
MEDICARE+CHOICE PLANS.
Section 1853 (42 U.S.C. 1395w–23) is amended—
(1) in subsection (a)(1)(A), by striking ‘‘and
(i)’’ and inserting ‘‘(i), and (j)’’; and
(2) by adding at the end the following new sub-
section:
‘‘(j) INCREASED
PAYMENT
FOR
ACCOUNTABLE
MEDICARE+CHOICE COORDINATED CARE PLANS.—
‘‘(1) 
IN
GENERAL.—In 
the 
case 
of 
a
Medicare+Choice coordinated care plan that enters
into a 3-year contract for the period of 2001
through 2003, the amount of the monthly payment
otherwise made under this section (taking into ac-
count, if applicable, subsection (i)), shall be in-
creased for each year of the contract period by the
amount necessary to ensure that the total monthly
260
payment is equal to the greater of the adjusted min-
imum amount specified in paragraph (2) or an
amount equal to the otherwise applicable rate in-
creased by 1⁄3 of 1 percent.
‘‘(2) ADJUSTED MINIMUM AMOUNT.—For pur-
poses of this subsection, the adjusted minimum
amount shall equal—
‘‘(A) in 2001—
‘‘(i) for any payment area in a Metro-
politan Statistical Area or a Primary Met-
ropolitan Statistical Area, $525 per month;
and
‘‘(ii) for any other payment area,
$475;
however, in the case of a payment area outside
the 50 States and the District of Columbia,
such amount shall not exceed 110 percent of
the minimum amount for such area for 2000.
‘‘(B) in 2002 and 2003, the adjusted min-
imum amount for months during the previous
year increased by the national per capita
Medicare+Choice growth percentage, described
in subsection (c)(6)(A) for that succeeding year.
‘‘(3) PENALTY FOR CONTRACT TERMINATION.—
In the case of a Medicare+Choice coordinated care
261
plan described in paragraph (1) whose contract is
terminated prior to the end of the 3-year contract
period, the Medicare+Choice organizations that of-
fered such plan shall return to the Secretary an
amount equal to twice the total of the increased pay-
ments provided under this section. Such moneys
shall be deposited in the Federal Hospital Insurance
Trust Funds and the Federal Supplementary Med-
ical Insurance Trust Funds in such proportion as
the Secretary deems to be fair and equitable.’’.
SEC. 602. 10-YEAR PHASE-IN OF RISK ADJUSTMENT.
Section 
1853(a)(3)(C)(ii) 
(42 
U.S.C. 
1395w–
23(a)(3)(C)(ii)) is amended—
(1) in subclause (I), by striking ‘‘and 2001’’
and inserting ‘‘and each succeeding year through the
first year in which risk adjustment is based on data
from inpatient hospital and ambulatory settings’’;
and
(2) by amending subclause (II) to read as fol-
lows:
‘‘(II) beginning after such first
year, insofar as such risk adjustment
is based on data from inpatient hos-
pital and ambulatory settings, the
methodology shall be phased in equal
262
increments over a 10-year period that
begins with such first year.’’.
SEC. 603. TRANSITION TO REVISED MEDICARE+CHOICE
PAYMENT RATES.
(a) 
ANNOUNCEMENT
OF
REVISED
MEDICARE+CHOICE PAYMENT RATES.—Within 2 weeks
after the date of the enactment of this Act, the Secretary
of Health and Human Services shall determine, and shall
announce (in a manner intended to provide notice to inter-
ested parties) Medicare+Choice capitation rates under
section 1853 of the Social Security Act (42 U.S.C.
1395w–23) for 2001, revised in accordance with the provi-
sions of this Act.
(b) REENTRY
INTO
PROGRAM
PERMITTED
FOR
MEDICARE+CHOICE
PROGRAMS
IN
2000.—A
Medicare+Choice organization that provided notice to the
Secretary of Health and Human Services before the date
of the enactment of this Act that it was terminating its
contract under part C of title XVIII of the Social Security
Act 
or 
was 
reducing 
the 
service 
area 
of 
a
Medicare+Choice plan offered under such part shall be
permitted to continue participation under such part, or to
maintain the service area of such plan, for 2001 if it pro-
vides the Secretary with the information described in sec-
tion 1854(a)(1) of the Social Security Act (42 U.S.C.
263
1395w–24(a)(1)) within 2 weeks after the date revised
rates are announced by the Secretary under subsection
(a).
(c) REVISED SUBMISSION OF PROPOSED PREMIUMS
AND RELATED INFORMATION.—If—
(1) a Medicare+Choice organization provided
notice to the Secretary of Health and Human Serv-
ices as of July 3, 2000, that it was renewing its con-
tract under part C of title XVIII of the Social Secu-
rity Act for all or part of the service area or areas
served under its current contract, and
(2) any part of the service area or areas ad-
dressed in such notice includes a payment area for
which the Medicare+Choice capitation rate under
section 1853(c) of such Act (42 U.S.C. 1395w–
23(c)) for 2001, as determined under subsection (a),
is higher than the rate previously determined for
such year,
such organization shall revise its submission of the infor-
mation described in section 1854(a)(1) of the Social Secu-
rity Act (42 U.S.C. 1395w–24(a)(1)), and shall submit
such revised information to the Secretary, within 2 weeks
after the date revised rates are announced by the Sec-
retary under subsection (a).
264
(d) DISREGARD OF NEW RATE ANNOUNCEMENT IN
APPLYING PASS-THROUGH
FOR NEW NATIONAL COV-
ERAGE DETERMINATIONS.—For purposes of applying sec-
tion 1852(a)(5) of the Social Security Act (42 U.S.C.
1395w–22(a)(5)), the announcement of revised rates
under subsection (a) shall not be treated as an announce-
ment under section 1853(b) of such Act (42 U.S.C.
1395w–23(b)).
SEC. 604. REVISION OF PAYMENT RATES FOR ESRD PA-
TIENTS ENROLLED IN MEDICARE+CHOICE
PLANS.
(a) IN GENERAL.—Section 1853(a)(1)(B) (42 U.S.C.
1395w–23(a)(1)(B)) is amended by adding at the end the
following: ‘‘In establishing such rates, the Secretary shall
provide for appropriate adjustments to increase each rate
to reflect the demonstration rate (including the risk ad-
justment methodology associated with such rate) of the
social health maintenance organization end-stage renal
disease capitation demonstrations (established by section
2355 of the Deficit Reduction Act of 1984, as amended
by section 13567(b) of the Omnibus Budget Reconciliation
Act of 1993), and shall compute such rates by taking into
account such factors as renal treatment modality, age, and
the underlying cause of the end-stage renal disease.’’.
265
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to payments for months begin-
ning with January 2002.
(c) PUBLICATION.—Not later than 6 months after
the date of the enactment of this Act, the Secretary of
Health and Human Services shall publish for public com-
ment a description of the appropriate adjustments de-
scribed in the last sentence of section 1853(a)(1)(B) of
the Social Security Act (42 U.S.C. 1395w–23(a)(1)(B)),
as added by subsection (a). The Secretary shall publish
such adjustments in final form by not later than July 1,
2001, so that the amendment made by subsection (a) is
implemented on a timely basis consistent with subsection
(b).
SEC. 605. PERMITTING PREMIUM REDUCTIONS AS ADDI-
TIONAL 
BENEFITS 
UNDER
MEDICARE+CHOICE PLANS.
(a) IN GENERAL.—
(1) AUTHORIZATION OF PART B PREMIUM RE-
DUCTIONS.—Section 1854(f)(1) (42 U.S.C. 1395w–
24(f)(1)) is amended—
(A) by redesignating subparagraph (E) as
subparagraph (F); and
(B) by inserting after subparagraph (D)
the following new subparagraph:
266
‘‘(E) PREMIUM REDUCTIONS.—
‘‘(i) IN GENERAL.—Subject to clause
(ii), as part of providing any additional
benefits required under subparagraph (A),
a Medicare+Choice organization may elect
a reduction in its payments under section
1853(a)(1)(A) 
with 
respect 
to 
a
Medicare+Choice plan and the Secretary
shall apply such reduction to reduce the
premium under section 1839 of each en-
rollee in such plan as provided in section
1840(i).
‘‘(ii) AMOUNT
OF
REDUCTION.—The
amount of the reduction under clause (i)
with 
respect 
to 
any 
enrollee 
in 
a
Medicare+Choice plan—
‘‘(I) may not exceed 125 percent
of the premium described under sec-
tion 1839(a)(3); and
‘‘(II) shall apply uniformly to
each enrollee of the Medicare+Choice
plan to which such reduction ap-
plies.’’.
(2) CONFORMING AMENDMENTS.—
267
(A) 
ADJUSTMENT
OF
PAYMENTS
TO
MEDICARE+CHOICE
ORGANIZATIONS.—Section
1853(a)(1)(A) (42 U.S.C. 1395w–23(a)(1)(A))
is amended by inserting ‘‘reduced by the
amount of any reduction elected under section
1854(f)(1)(E) and’’ after ‘‘for that area,’’.
(B) ADJUSTMENT AND PAYMENT OF PART
B PREMIUMS.—
(i) ADJUSTMENT
OF
PREMIUMS.—
Section 
1839(a)(2) 
(42 
U.S.C.
1395r(a)(2)) 
is 
amended 
by 
striking
‘‘shall’’ and all that follows and inserting
the following: ‘‘shall be the amount deter-
mined under paragraph (3), adjusted as
required in accordance with subsections
(b), (c), and (f), and to reflect 80 percent
of any reduction elected under section
1854(f)(1)(E).’’.
(ii) PAYMENT OF PREMIUMS.—Section
1840 (42 U.S.C. 1395s) is amended by
adding at the end the following new sub-
section:
‘‘(i) In the case of an individual enrolled in a
Medicare+Choice plan, the Secretary shall provide for
necessary adjustments of the monthly beneficiary pre-
268
mium to reflect 80 percent of any reduction elected under
section 1854(f)(1)(E). This premium adjustment may be
provided directly or as an adjustment to any social secu-
rity, railroad retirement, and civil service retirement bene-
fits, to the extent which the Secretary determines that
such an adjustment is appropriate with the concurrence
of the agencies responsible for the administration of such
benefits.’’.
(C) INFORMATION COMPARING PLAN PRE-
MIUMS UNDER PART C.—Section 1851(d)(4)(B)
(42 U.S.C. 1395w–21(d)(4)(B)) is amended—
(i) by striking ‘‘PREMIUMS.—The’’
and inserting ‘‘PREMIUMS.—
‘‘(i) IN GENERAL.—The’’; and
(ii) by adding at the end the following
new clause:
‘‘(ii) REDUCTIONS.—The reduction in
part B premiums, if any.’’.
(D) TREATMENT OF REDUCTION FOR PUR-
POSES
OF
DETERMINING
GOVERNMENT
CON-
TRIBUTION UNDER PART B.—Section 1844 (42
U.S.C. 1395w) is amended by adding at the
end the following new subsection:
‘‘(c) The Secretary shall determine the Government
contribution under subparagraphs (A) and (B) of sub-
269
section (a)(1) without regard to any premium reduction
resulting from an election under section 1854(f)(1)(E).’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall apply to years beginning with 2002.
SEC. 606. FULL IMPLEMENTATION OF RISK ADJUSTMENT
FOR CONGESTIVE HEART FAILURE ENROLL-
EES FOR 2001.
(a) IN GENERAL.—Section 1853(a)(3)(C) (42 U.S.C.
1395w–23(a)(3)(C)) is amended—
(1) in clause (ii), by striking ‘‘Such risk adjust-
ment’’ and inserting ‘‘Except as provided in clause
(iii), such risk adjustment’’; and
(2) by adding at the end the following new
clause:
‘‘(iii) FULL
IMPLEMENTATION
OF
RISK
ADJUSTMENT
FOR
CONGESTIVE
HEART FAILURE ENROLLEES FOR 2001.—
‘‘(I) EXEMPTION
FROM
PHASE-
IN.—Subject to subclause (II), the
Secretary shall fully implement the
risk 
adjustment 
methodology 
de-
scribed in clause (i) with respect to
each individual who has had a quali-
fying congestive heart failure inpa-
tient diagnosis (as determined by the
270
Secretary under such risk adjustment
methodology) during the period begin-
ning on July 1, 1999, and ending on
June 30, 2000, and who is enrolled in
a coordinated care plan that is the
only coordinated care plan offered on
January 1, 2001, in the service area
of the individual.
‘‘(II) PERIOD OF APPLICATION.—
Subclause (I) shall only apply during
the 1-year period beginning on Janu-
ary 1, 2001.’’.
(b) EXCLUSION FROM DETERMINATION
OF
THE
BUDGET NEUTRALITY FACTOR.—Section 1853(c)(5) (42
U.S.C. 1395w–23(c)(5)) is amended by striking ‘‘sub-
section (i)’’ and inserting ‘‘subsections (a)(3)(C)(iii) and
(i)’’.
SEC. 
607. 
EXPANSION 
OF 
APPLICATION 
OF
MEDICARE+CHOICE NEW ENTRY BONUS.
(a) IN GENERAL.—Section 1853(i)(1) (42 U.S.C.
1395w–23(i)(1)) is amended in the matter preceding sub-
paragraph (A) by inserting ‘‘, or filed notice with the Sec-
retary as of October 3, 2000, that they will not be offering
such a plan as of January 1, 2001’’ after ‘‘January 1,
2000’’.
271
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply as if included in the enactment
of BBRA.
SEC. 608. REPORT ON INCLUSION OF CERTAIN COSTS OF
THE DEPARTMENT OF VETERANS AFFAIRS
AND MILITARY FACILITY SERVICES IN CAL-
CULATING 
MEDICARE+CHOICE 
PAYMENT
RATES.
The Secretary of Health and Human Services shall
report to Congress by not later than January 1, 2003,
on a method to phase-in the costs of military facility serv-
ices furnished by the Department of Veterans Affairs, and
the costs of military facility services furnished by the De-
partment of Defense, to medicare-eligible beneficiaries in
the calculation of an area’s Medicare+Choice capitation
payment. Such report shall include on a county-by-county
basis—
(1) the actual or estimated cost of such services
to medicare-eligible beneficiaries;
(2) the change in Medicare+Choice capitation
payment rates if such costs are included in the cal-
culation of payment rates;
(3) one or more proposals for the implementa-
tion of payment adjustments to Medicare+Choice
plans in counties where the payment rate has been
272
affected due to the failure to calculate the cost of
such services to medicare-eligible beneficiaries; and
(4) 
a 
system 
to 
ensure 
that 
when 
a
Medicare+Choice enrollee receives covered services
through a facility of the Department of Veterans Af-
fairs or the Department of Defense there is an ap-
propriate payment recovery to the medicare program
under title XVIII of the Social Security Act.
Subtitle B—Other Medicare+Choice
Reforms
SEC. 611. PAYMENT OF ADDITIONAL AMOUNTS FOR NEW
BENEFITS COVERED DURING A CONTRACT
TERM.
(a) IN GENERAL.—Section 1853(c)(7) (42 U.S.C.
1395w–23(c)(7)) is amended to read as follows:
‘‘(7) ADJUSTMENT FOR NATIONAL COVERAGE
DETERMINATIONS
AND
LEGISLATIVE
CHANGES
IN
BENEFITS.—If the Secretary makes a determination
with respect to coverage under this title or there is
a change in benefits required to be provided under
this part that the Secretary projects will result in a
significant increase in the costs to Medicare+Choice
of providing benefits under contracts under this part
(for periods after any period described in section
1852(a)(5)), the Secretary shall adjust appropriately
273
the payments to such organizations under this part.
Such projection and adjustment shall be based on an
analysis by the Chief Actuary of the Health Care Fi-
nancing Administration of the actuarial costs associ-
ated with the new benefits.’’.
(b) CONFORMING AMENDMENT.—Section 1852(a)(5)
(42 U.S.C. 1395w–22(a)(5)) is amended—
(1) in the heading, by inserting ‘‘AND LEGISLA-
TIVE CHANGES IN BENEFITS’’ after ‘‘NATIONAL COV-
ERAGE DETERMINATIONS’’;
(2) by inserting ‘‘or legislative change in bene-
fits required to be provided under this part’’ after
‘‘national coverage determination’’;
(3) in subparagraph (A), by inserting ‘‘or legis-
lative change in benefits’’ after ‘‘such determina-
tion’’;
(4) in subparagraph (B), by inserting ‘‘or legis-
lative change’’ after ‘‘if such coverage determina-
tion’’; and
(5) by adding at the end the following:
‘‘The projection under the previous sentence shall be
based on an analysis by the Chief Actuary of the
Health Care Financing Administration of the actu-
arial costs associated with the coverage determina-
tion or legislative change in benefits.’’.
274
(c) EFFECTIVE DATE.—The amendments made by
this section are effective on the date of the enactment of
this Act and apply to national coverage determinations
and legislative changes in benefits occurring on or after
such date.
SEC. 612. RESTRICTION ON IMPLEMENTATION OF SIGNIFI-
CANT 
NEW 
REGULATORY 
REQUIREMENTS
MIDYEAR.
(a) IN
GENERAL.—Section 1856(b) (42 U.S.C.
1395w–26(b)) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(4) PROHIBITION OF MIDYEAR IMPLEMENTA-
TION OF SIGNIFICANT NEW REGULATORY REQUIRE-
MENTS.—The Secretary may not implement, other
than at the beginning of a calendar year, regulations
under this section that impose new, significant regu-
latory requirements on a Medicare+Choice organiza-
tion or plan.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) takes effect on the date of the enactment
of this Act.
275
SEC. 613. TIMELY APPROVAL OF MARKETING MATERIAL
THAT FOLLOWS MODEL MARKETING LAN-
GUAGE.
(a) IN
GENERAL.—Section 1851(h) (42 U.S.C.
1395w–21(h)) is amended—
(1) in paragraph (1)(A), by inserting ‘‘(or 10
days in the case described in paragraph (5))’’ after
‘‘45 days’’; and
(2) by adding at the end the following new
paragraph:
‘‘(5) SPECIAL TREATMENT OF MARKETING MA-
TERIAL
FOLLOWING
MODEL
MARKETING
LAN-
GUAGE.—In the case of marketing material of an or-
ganization that uses, without modification, proposed
model language specified by the Secretary, the pe-
riod specified in paragraph (1)(A) shall be reduced
from 45 days to 10 days.’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) apply to marketing material submitted on
or after January 1, 2001.
SEC. 614. AVOIDING DUPLICATIVE REGULATION.
(a) IN GENERAL.—Section 1856(b)(3)(B) (42 U.S.C.
1395w–26(b)(3)(B)) is amended—
(1) in clause (i), by inserting ‘‘(including cost-
sharing requirements)’’ after ‘‘Benefit require-
ments’’; and
276
(2) by adding at the end the following new
clause:
‘‘(iv) Requirements relating to mar-
keting materials and summaries and sched-
ules 
of 
benefits 
regarding 
a
Medicare+Choice plan.’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) take effect on the date of the enactment
of this Act.
SEC. 615. ELECTION OF UNIFORM LOCAL COVERAGE POL-
ICY FOR MEDICARE+CHOICE PLAN COVERING
MULTIPLE LOCALITIES.
Section 1852(a)(2) (42 U.S.C. 1395w–22(a)(2)) is
amended by adding at the end the following new subpara-
graph:
‘‘(C) ELECTION
OF
UNIFORM
COVERAGE
POLICY.—In the case of a Medicare+Choice or-
ganization that offers a Medicare+Choice plan
in an area in which more than one local cov-
erage policy is applied with respect to different
parts of the area, the organization may elect to
have the local coverage policy for the part of
the 
area 
that 
is 
most 
beneficial 
to
Medicare+Choice enrollees (as identified by the
Secretary) 
apply 
with 
respect 
to 
all
277
Medicare+Choice enrollees enrolled in the
plan.’’.
SEC. 
616. 
ELIMINATING 
HEALTH 
DISPARITIES 
IN
MEDICARE+CHOICE PROGRAM.
(a) QUALITY ASSURANCE PROGRAM FOCUS ON RA-
CIAL AND ETHNIC MINORITIES.—Subparagraphs (A) and
(B) of section 1852(e)(2) (42 U.S.C. 1395w–22(e)(2)) are
each amended by adding at the end the following:
‘‘Such program shall include a separate focus
(with respect to all the elements described in
this subparagraph) on racial and ethnic minori-
ties.’’.
(b) REPORT.—Section 1852(e) (42 U.S.C. 1395w–
22(e)) is amended by adding at the end the following new
paragraph:
‘‘(5) REPORT TO CONGRESS.—
‘‘(A) IN GENERAL.—Not later than 2 years
after the date of the enactment of this para-
graph, and biennially thereafter, the Secretary
shall submit to Congress a report regarding
how quality assurance programs conducted
under this subsection focus on racial and ethnic
minorities.
‘‘(B) CONTENTS OF REPORT.—Each such
report shall include the following:
278
‘‘(i) A description of the means by
which such programs focus on such racial
and ethnic minorities.
‘‘(ii) An evaluation of the impact of
such programs on eliminating health dis-
parities and on improving health outcomes,
continuity and coordination of care, man-
agement of chronic conditions, and con-
sumer satisfaction.
‘‘(iii) Recommendations on ways to re-
duce clinical outcome disparities among ra-
cial and ethnic minorities.’’.
SEC. 617. MEDICARE+CHOICE PROGRAM COMPATIBILITY
WITH EMPLOYER OR UNION GROUP HEALTH
PLANS.
(a) IN GENERAL.—Section 1857 (42 U.S.C. 1395w–
27) is amended by adding at the end the following new
subsection:
‘‘(i) MEDICARE+CHOICE PROGRAM COMPATIBILITY
WITH EMPLOYER OR UNION GROUP HEALTH PLANS.—
To facilitate the offering of Medicare+Choice plans under
contracts between Medicare+Choice organizations and
employers, labor organizations, or the trustees of a fund
established by 1 or more employers or labor organizations
(or combination thereof) to furnish benefits to the entity’s
279
employees, former employees (or combination thereof) or
members or former members (or combination thereof) of
the labor organizations, the Secretary may waive or mod-
ify requirements that hinder the design of, the offering
of, or the enrollment in such Medicare+Choice plans.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) applies with respect to years beginning with
2001.
SEC. 618. SPECIAL MEDIGAP ENROLLMENT ANTIDISCRIMI-
NATION PROVISION FOR CERTAIN BENE-
FICIARIES.
(a) DISENROLLMENT
WINDOW
IN
ACCORDANCE
WITH
BENEFICIARY’S
CIRCUMSTANCE.—Section
1882(s)(3) (42 U.S.C. 1395ss(s)(3)) is amended—
(1) in subparagraph (A), in the matter fol-
lowing clause (iii), by striking ‘‘, subject to subpara-
graph (E), seeks to enroll under the policy not later
than 63 days after the date of the termination of en-
rollment described in such subparagraph’’ and in-
serting ‘‘seeks to enroll under the policy during the
period specified in subparagraph (E)’’; and
(2) by striking subparagraph (E) and inserting
the following new subparagraph:
‘‘(E) For purposes of subparagraph (A), the time pe-
riod specified in this subparagraph is—
280
‘‘(i) in the case of an individual described in
subparagraph (B)(i), the period beginning on the
date the individual receives a notice of termination
or cessation of all supplemental health benefits (or,
if no such notice is received, notice that a claim has
been denied because of such a termination or ces-
sation) and ending on the date that is 63 days after
the applicable notice;
‘‘(ii) in the case of an individual described in
clause (ii), (iii), (v), or (vi) of subparagraph (B)
whose enrollment is terminated involuntarily, the pe-
riod beginning on the date that the individual re-
ceives a notice of termination and ending on the
date that is 63 days after the date the applicable
coverage is terminated;
‘‘(iii) in the case of an individual described in
subparagraph (B)(iv)(I), the period beginning on the
earlier of (I) the date that the individual receives a
notice of termination, a notice of the issuer’s bank-
ruptcy or insolvency, or other such similar notice, if
any, and (II) the date that the applicable coverage
is terminated, and ending on the date that is 63
days after the date the coverage is terminated;
‘‘(iv) in the case of an individual described in
clause (ii), (iii), (iv)(II), (iv)(III), (v), or (vi) of sub-
281
paragraph (B) who disenrolls voluntarily, the period
beginning on the date that is 60 days before the ef-
fective date of the disenrollment and ending on the
date that is 63 days after such effective date; and
‘‘(v) in the case of an individual described in
subparagraph (B) but not described in the preceding
provisions of this subparagraph, the period begin-
ning on the effective date of the disenrollment and
ending on the date that is 63 days after such effec-
tive date.’’.
(b) EXTENDED MEDIGAP ACCESS FOR INTERRUPTED
TRIAL
PERIODS.—Section 
1882(s)(3) 
(42 
U.S.C.
1395ss(s)(3)), as amended by subsection (a), is further
amended by adding at the end the following new subpara-
graph:
‘‘(F)(i) Subject to clause (ii), for purposes of this
paragraph—
‘‘(I) in the case of an individual described in
subparagraph (B)(v) (or deemed to be so described,
pursuant to this subparagraph) whose enrollment
with an organization or provider described in sub-
clause (II) of such subparagraph is involuntarily ter-
minated within the first 12 months of such enroll-
ment, and who, without an intervening enrollment,
enrolls with another such organization or provider,
282
such subsequent enrollment shall be deemed to be an
initial enrollment described in such subparagraph;
and
‘‘(II) in the case of an individual described in
clause (vi) of subparagraph (B) (or deemed to be so
described, pursuant to this subparagraph) whose en-
rollment with a plan or in a program described in
such clause is involuntarily terminated within the
first 12 months of such enrollment, and who, with-
out an intervening enrollment, enrolls in another
such plan or program, such subsequent enrollment
shall be deemed to be an initial enrollment described
in such clause.
‘‘(ii) For purposes of clauses (v) and (vi) of subpara-
graph (B), no enrollment of an individual with an organi-
zation or provider described in clause (v)(II), or with a
plan or in a program described in clause (vi), may be
deemed to be an initial enrollment under this clause after
the 2-year period beginning on the date on which the indi-
vidual first enrolled with such an organization, provider,
plan, or program.’’.
283
SEC. 619. RESTORING EFFECTIVE DATE OF ELECTIONS AND
CHANGES 
OF 
ELECTIONS 
OF
MEDICARE+CHOICE PLANS.
(a) OPEN ENROLLMENT.—Section 1851(f)(2) (42
U.S.C. 1395w–21(f)(2)) is amended by striking ‘‘, except
that if such election or change is made after the 10th day
of any calendar month, then the election or change shall
not take effect until the first day of the second calendar
month following the date on which the election or change
is made’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to elections and changes of cov-
erage made on or after January 1, 2001.
SEC. 620. PERMITTING ESRD BENEFICIARIES TO ENROLL
IN ANOTHER MEDICARE+CHOICE PLAN IF
THE PLAN IN WHICH THEY ARE ENROLLED IS
TERMINATED.
(a) IN GENERAL.—Section 1851(a)(3)(B) (42 U.S.C.
1395w–21(a)(3)(B)) is amended by striking ‘‘except that’’
and all that follows and inserting the following: ‘‘except
that—
‘‘(i) an individual who develops end-
stage renal disease while enrolled in a
Medicare+Choice plan may continue to be
enrolled in that plan; and
284
‘‘(ii) in the case of such an individual
who is enrolled in a Medicare+Choice plan
under clause (i) (or subsequently under
this clause), if the enrollment is discon-
tinued under circumstances described in
section 1851(e)(4)(A), then the individual
will be treated as a ‘Medicare+Choice eli-
gible individual’ for purposes of electing to
continue 
enrollment 
in 
another
Medicare+Choice plan.’’.
(b) EFFECTIVE DATE.—
(1) IN
GENERAL.—The amendment made by
subsection (a) shall apply to terminations and
discontinuations occurring on or after the date of
the enactment of this Act.
(2) APPLICATION
TO
PRIOR
PLAN
TERMI-
NATIONS.—Clause (ii) of section 1851(a)(3)(B) of
the Social Security Act (as inserted by subsection
(a)) also shall apply to individuals whose enrollment
in a Medicare+Choice plan was terminated or dis-
continued after December 31, 1998, and before the
date of the enactment of this Act. In applying this
paragraph, such an individual shall be treated, for
purposes of part C of title XVIII of the Social Secu-
285
rity Act, as having discontinued enrollment in such
a plan as of the date of the enactment of this Act.
SEC. 621. PROVIDING CHOICE FOR SKILLED NURSING FA-
CILITY 
SERVICES 
UNDER 
THE
MEDICARE+CHOICE PROGRAM.
(a) IN GENERAL.—Section 1852 (42 U.S.C. 1395w–
22) is amended by adding at the end the following new
subsection:
‘‘(l) RETURN TO HOME SKILLED NURSING FACILI-
TIES FOR COVERED POST-HOSPITAL EXTENDED CARE
SERVICES.—
‘‘(1) ENSURING RETURN TO HOME SNF.—
‘‘(A) IN GENERAL.—In providing coverage
of post-hospital extended care services, a
Medicare+Choice plan shall provide for such
coverage through a home skilled nursing facility
if the following conditions are met:
‘‘(i) ENROLLEE ELECTION.—The en-
rollee elects to receive such coverage
through such facility.
‘‘(ii) SNF AGREEMENT.—The facility
has a contract with the Medicare+Choice
organization for the provision of such serv-
ices, or the facility agrees to accept sub-
stantially similar payment under the same
286
terms and conditions that apply to simi-
larly situated skilled nursing facilities that
are 
under 
contract 
with 
the
Medicare+Choice organization for the pro-
vision of such services and through which
the enrollee would otherwise receive such
services.
‘‘(B) MANNER
OF
PAYMENT
TO
HOME
SNF.—The organization shall provide payment
to the home skilled nursing facility consistent
with the contract or the agreement described in
subparagraph (A)(ii), as the case may be.
‘‘(2) NO
LESS
FAVORABLE
COVERAGE.—The
coverage provided under paragraph (1) (including
scope of services, cost-sharing, and other criteria of
coverage) shall be no less favorable to the enrollee
than the coverage that would be provided to the en-
rollee with respect to a skilled nursing facility the
post-hospital extended care services of which are
otherwise covered under the Medicare+Choice plan.
‘‘(3) RULE
OF
CONSTRUCTION.—Nothing in
this subsection shall be construed to do the fol-
lowing:
‘‘(A) To require coverage through a skilled
nursing facility that is not otherwise qualified
287
to provide benefits under part A for medicare
beneficiaries not enrolled in a Medicare+Choice
plan.
‘‘(B) To prevent a skilled nursing facility
from refusing to accept, or imposing conditions
upon the acceptance of, an enrollee for the re-
ceipt of post-hospital extended care services.
‘‘(4) DEFINITIONS.—In this subsection:
‘‘(A) HOME
SKILLED
NURSING
FACIL-
ITY.—The term ‘home skilled nursing facility’
means, with respect to an enrollee who is enti-
tled to receive post-hospital extended care serv-
ices under a Medicare+Choice plan, any of the
following skilled nursing facilities:
‘‘(i) SNF RESIDENCE AT TIME OF AD-
MISSION.—The skilled nursing facility in
which the enrollee resided at the time of
admission to the hospital preceding the re-
ceipt of such post-hospital extended care
services.
‘‘(ii) SNF IN CONTINUING CARE RE-
TIREMENT COMMUNITY.—A skilled nursing
facility that is providing such services
through a continuing care retirement com-
munity (as defined in subparagraph (B))
288
which provided residence to the enrollee at
the time of such admission.
‘‘(iii) SNF RESIDENCE OF SPOUSE AT
TIME OF DISCHARGE.—The skilled nursing
facility in which the spouse of the enrollee
is residing at the time of discharge from
such hospital.
‘‘(B) 
CONTINUING
CARE
RETIREMENT
COMMUNITY.—The term ‘continuing care retire-
ment community’ means, with respect to an en-
rollee in a Medicare+Choice plan, an arrange-
ment under which housing and health-related
services are provided (or arranged) through an
organization for the enrollee under an agree-
ment that is effective for the life of the enrollee
or for a specified period.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) applies with respect to contracts entered
into or renewed on or after the date of the enactment of
this Act.
(c) MEDPAC STUDY.—
(1) STUDY.—The Medicare Payment Advisory
Commission shall conduct a study analyzing the ef-
fects of the amendment made by subsection (a) on
Medicare+Choice organizations. In conducting such
289
study, the Commission shall examine the effects (if
any) such amendment has had on—
(A) the scope of additional benefits pro-
vided under the Medicare+Choice program;
(B) the administrative and other costs in-
curred by Medicare+Choice organizations;
(C) the contractual relationships between
such organizations and skilled nursing facilities.
(2) REPORT.—Not later than 2 years after the
date of the enactment of this Act, the Commission
shall submit to Congress a report on the study con-
ducted under paragraph (1).
SEC. 
622. 
PROVIDING 
FOR 
ACCOUNTABILITY 
OF
MEDICARE+CHOICE PLANS.
(a) MANDATORY REVIEW OF ACR SUBMISSIONS BY
THE CHIEF ACTUARY OF THE HEALTH CARE FINANCING
ADMINISTRATION.—Section 1854(a)(5)(A) (42 U.S.C.
1395w–24(a)(5)(A)) is amended—
(1) by striking ‘‘value’’ and inserting ‘‘values’’;
and
(2) by adding at the end the following: ‘‘The
Chief Actuary of the Health Care Financing Admin-
istration shall review the actuarial assumptions and
data used by the Medicare+Choice organization with
respect to such rates, amounts, and values so sub-
290
mitted to determine the appropriateness of such as-
sumptions and data.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) applies to submissions made on or after
January 1, 2001.
SEC. 623. CIVIL MONETARY PENALTIES FOR CONTRACT DE-
FAULT BY A MEDICARE+CHOICE ORGANIZA-
TION.
(a) IN GENERAL.—Section 1857(g)(3) is amended by
adding at the end the following new subparagraph:
‘‘(D) Civil monetary penalties of up to
$25,000 per enrollee or $100,000 per organiza-
tion, whichever is greater, where the finding
under subsection (c)(2)(A) is based on the orga-
nization’s defaulting on its contract.’’.
Subtitle C—Other Managed Care
Reforms
SEC. 631. 1-YEAR EXTENSION OF SOCIAL HEALTH MAINTE-
NANCE ORGANIZATION (SHMO) DEMONSTRA-
TION PROJECT.
Section 4018(b)(1) of the Omnibus Budget Reconcili-
ation Act of 1987, as amended by section 531(a)(1) of
BBRA (113 Stat. 1501A–388), is amended by striking
‘‘18 months’’ and inserting ‘‘30 months’’.
291
SEC. 632. REVISED TERMS AND CONDITIONS FOR EXTEN-
SION OF MEDICARE COMMUNITY NURSING
ORGANIZATION 
(CNO) 
DEMONSTRATION
PROJECT.
(a) IN GENERAL.—Section 532 of BBRA (113 Stat.
1501A–388) is amended—
(1) in subsection (a), by striking the second
sentence; and
(2) by striking subsection (b) and inserting the
following new subsection:
‘‘(b) TERMS AND CONDITIONS.—
‘‘(1) JANUARY THROUGH SEPTEMBER 2000.—
For the 9-month period beginning with January
2000, any such demonstration project shall be con-
ducted under the same terms and conditions as ap-
plied to such demonstration during 1999.
‘‘(2) OCTOBER
2000
THROUGH
DECEMBER
2001.—For the 15-month period beginning with Oc-
tober 2000, any such demonstration project shall be
conducted under the same terms and conditions as
applied to such demonstration during 1999, except
that the following modifications shall apply:
‘‘(A) BASIC CAPITATION RATE.—The basic
capitation rate paid for services covered under
the project (other than case management serv-
292
ices) per enrollee per month and furnished
during—
‘‘(i) the period beginning with October
1, 2000, and ending with December 31,
2000, shall be determined by actuarially
adjusting the actual capitation rate paid
for such services in 1999 for inflation, uti-
lization, and other changes to the CNO
service package, and by reducing such ad-
justed capitation rate by 10 percent in the
case of the demonstration sites located in
Arizona, Minnesota, and Illinois, and 15
percent for the demonstration site located
in New York; and
‘‘(ii) 2001 shall be determined by ac-
tuarially adjusting the capitation rate de-
termined under clause (i) for inflation, uti-
lization, and other changes to the CNO
service package.
‘‘(B) 
TARGETED
CASE
MANAGEMENT
FEE.—Effective October 1, 2000—
‘‘(i) the case management fee per en-
rollee per month for—
‘‘(I) the period described in sub-
paragraph (A)(i) shall be determined
293
by actuarially adjusting the case man-
agement fee for 1999 for inflation;
and
‘‘(II) 2001 shall be determined
by actuarially adjusting the amount
determined under subclause (I) for in-
flation; and
‘‘(ii) such case management fee shall
be paid only for enrollees who are classified
as moderately frail or frail pursuant to cri-
teria established by the Secretary.
‘‘(C) GREATER UNIFORMITY IN CLINICAL
FEATURES AMONG SITES.—Each project shall
implement for each site—
‘‘(i) protocols for periodic telephonic
contact with enrollees based on—
‘‘(I) the results of such standard-
ized written health assessment; and
‘‘(II) the application of appro-
priate care planning approaches;
‘‘(ii) disease management programs
for targeted diseases (such as congestive
heart failure, arthritis, diabetes, and hy-
pertension) that are highly prevalent in the
enrolled populations;
294
‘‘(iii) systems and protocols to track
enrollees through hospitalizations, includ-
ing pre-admission planning, concurrent
management 
during 
inpatient 
hospital
stays, and post-discharge assessment, plan-
ning, and follow-up; and
‘‘(iv) standardized patient educational
materials for specified diseases and health
conditions.
‘‘(D) 
QUALITY
IMPROVEMENT.—Each
project shall implement at each site once during
the 15-month period—
‘‘(i) enrollee satisfaction surveys; and
‘‘(ii) reporting on specified quality in-
dicators for the enrolled population.
‘‘(c) EVALUATION.—
‘‘(1) PRELIMINARY
REPORT.—Not later than
July 1, 2001, the Secretary of Health and Human
Services shall submit to the Committees on Ways
and Means and Commerce of the House of Rep-
resentatives and the Committee on Finance of the
Senate a preliminary report that—
‘‘(A) evaluates such demonstration projects
for the period beginning July 1, 1997, and end-
ing December 31, 1999, on a site-specific basis
295
with respect to the impact on per beneficiary
spending, specific health utilization measures,
and enrollee satisfaction; and
‘‘(B) includes a similar evaluation of such
projects for the portion of the extension period
that occurs after September 30, 2000.
‘‘(2) FINAL REPORT.—The Secretary shall sub-
mit a final report to such Committees on such dem-
onstration projects not later than July 1, 2002.
Such report shall include the same elements as the
preliminary report required by paragraph (1), but
for the period after December 31, 1999.
‘‘(3) METHODOLOGY FOR SPENDING COMPARI-
SONS.—Any evaluation of the impact of the dem-
onstration projects on per beneficiary spending in-
cluded in such reports shall include a comparison
of—
‘‘(A) data for all individuals who—
‘‘(i) were enrolled in such demonstra-
tion projects as of the first day of the pe-
riod under evaluation; and
‘‘(ii) were enrolled for a minimum of
6 months thereafter; with
‘‘(B) data for a matched sample of individ-
uals who are enrolled under part B of title
296
XVIII of the Social Security Act and are not
enrolled 
in 
such 
a 
project, 
or 
in 
a
Medicare+Choice plan under part C of such
title, a plan offered by an eligible organization
under section 1876 of such Act, or a health
care 
prepayment 
plan 
under 
section
1833(a)(1)(A) of such Act.’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall be effective as if included in the enact-
ment of section 532 of BBRA (113 Stat. 1501A–388).
SEC. 633. EXTENSION OF MEDICARE MUNICIPAL HEALTH
SERVICES DEMONSTRATION PROJECTS.
Section 9215(a) of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (42 U.S.C. 1395b–1 note), as
amended by section 6135 of the Omnibus Budget Rec-
onciliation Act of 1989, section 13557 of the Omnibus
Budget Reconciliation Act of 1993, section 4017 of BBA,
and section 534 of BBRA (113 Stat. 1501A–390), is
amended by striking ‘‘December 31, 2002’’ and inserting
‘‘December 31, 2004’’.
SEC. 634. SERVICE AREA EXPANSION FOR MEDICARE COST
CONTRACTS DURING TRANSITION PERIOD.
Section 1876(h)(5) (42 U.S.C. 1395mm(h)(5)) is
amended—
297
(1) by redesignating subparagraph (B) as sub-
paragraph (C); and
(2) by inserting after subparagraph (A), the fol-
lowing new subparagraph:
‘‘(B) Subject to subparagraph (C), the Secretary
shall approve an application for a modification to a rea-
sonable cost contract under this section in order to expand
the service area of such contract if—
‘‘(i) such application is submitted to the Sec-
retary on or before September 1, 2003; and
‘‘(ii) the Secretary determines that the organi-
zation with the contract continues to meet the re-
quirements applicable to such organizations and con-
tracts under this section.’’.
TITLE VII—MEDICAID
SEC. 701. DSH PAYMENTS.
(a) CONTINUATION OF MEDICAID DSH ALLOTMENTS
AT FISCAL YEAR 2000 LEVELS FOR FISCAL YEARS 2001
AND 2002.—Section 1923(f) (42 U.S.C. 1396r–4(f)), as
amended by section 601 of the Medicare, Medicaid, and
SCHIP Balanced Budget Refinement Act of 1999 (as en-
acted into law by section 1000(a)(6) of Public Law 106–
113), is amended—
(1) in paragraph (2)—
298
(A) by striking ‘‘2002’’ in the heading and
inserting ‘‘2000’’;
(B) in the matter preceding the table, by
striking ‘‘2002’’ and inserting ‘‘2000’’; and
(C) in the table in such paragraph, by
striking the columns labeled ‘‘FY 01’’ and ‘‘FY
02’’ relating to fiscal years 2001 and 2002; and
(2) in paragraph (3)—
(A) by striking ‘‘2003’’ in the heading and
inserting ‘‘2001’’; and
(B) by striking ‘‘2003’’ and inserting
‘‘2001’’.
(b) SPECIAL RULE FOR MEDICAID DSH ALLOTMENT
FOR
EXTREMELY
LOW
DSH 
STATES.—Section
1923(f)(3) (42 U.S.C. 1396r–4(f)(3)) is amended—
(1) in subparagraph (A), by striking ‘‘subpara-
graph (B)’’ and inserting ‘‘subparagraphs (B) and
(C)’’; and
(2) by adding at the end the following new sub-
paragraph:
‘‘(C) SPECIAL RULE FOR EXTREMELY LOW
DSH STATES.—In the case of a State in which
the total expenditures under the State plan (in-
cluding Federal and State shares) for dis-
proportionate share hospital adjustments under
299
this section for fiscal year 1999, as reported to
the Administrator of the Health Care Financing
Administration as of August 31, 2000, is great-
er than 0 but less than 1 percent of the State’s
total amount of expenditures under the State
plan for medical assistance during the fiscal
year, the DSH allotment for fiscal year 2001
shall be increased to 1 percent of the State’s
total amount of expenditures under such plan
for such assistance during such fiscal year. In
subsequent fiscal years, such increased allot-
ment is subject to an increase for inflation as
provided in subparagraph (A).’’.
(c) DISTRICT
OF COLUMBIA.—Effective beginning
with fiscal year 2001, the item in the table in section
1923(f) (42 U.S.C. 1396r–4(f)) relating to District of Co-
lumbia for FY 2000, is amended by striking ‘‘32’’ and
inserting ‘‘49’’.
(d) ASSURING IDENTIFICATION OF MEDICAID MAN-
AGED CARE PATIENTS.—
(1) IN
GENERAL.—Section 1932 (42 U.S.C.
1396u–2) is amended by adding at the end the fol-
lowing new subsection:
‘‘(g) IDENTIFICATION OF PATIENTS FOR PURPOSES
OF MAKING DSH PAYMENTS.—Each contract with a
300
managed care entity under section 1903(m) or under sec-
tion 1905(t)(3) shall require the entity either—
‘‘(1) to report to the State information nec-
essary to determine the hospital services provided
under the contract (and the identity of hospitals pro-
viding such services) for purposes of applying sec-
tions 1886(d)(5)(F) and 1923; or
‘‘(2) to include a sponsorship code in the identi-
fication card issued to individuals covered under this
title in order that a hospital may identify a patient
as being entitled to benefits under this title.’’.
(2) CLARIFICATION
OF
COUNTING
MANAGED
CARE
MEDICAID
PATIENTS.—Section 1923 (42
U.S.C. 1396r–4) is amended—
(A) in subsection (a)(2)(D), by inserting
after ‘‘the proportion of low-income and med-
icaid patients’’ the following: ‘‘(including such
patients who receive benefits through a man-
aged care entity)’’;
(B) in subsection (b)(2), by inserting after
‘‘a State plan approved under this title in a pe-
riod’’ the following: ‘‘(regardless of whether
such patients receive medical assistance on a
fee-for-service basis or through a managed care
entity)’’; and
301
(C) in subsection (b)(3)(A)(i), by inserting
after ‘‘under a State plan under this title’’ the
following: ‘‘(regardless of whether the services
were furnished on a fee-for-service basis or
through a managed care entity)’’.
(3) EFFECTIVE DATES.—
(A) The amendment made by paragraph
(1) applies to contracts as of January 1, 2001.
(B) The amendments made by paragraph
(2) apply to payments made on or after Janu-
ary 1, 2001.
(e) APPLICATION OF MEDICAID DSH TRANSITION
RULE TO PUBLIC HOSPITALS IN ALL STATES.—
(1) IN GENERAL.—During the period described
in paragraph (3), with respect to a State, section
4721(e) of the Balanced Budget Act of 1997 (Public
Law 105–33; 111 Stat. 514), as amended by section
607 of BBRA (113 Stat. 1501A–321) shall be ap-
plied as though—
(A) ‘‘September 30, 2002’’ were sub-
stituted for ‘‘July 1, 1997’’ each place it ap-
pears;
(B) ‘‘hospitals owned or operated by an in-
strumentality or a unit of government within a
302
State (as defined for purposes of title XIX)’’
were substituted for ‘‘the State of California’’;
(C) paragraph (3) were redesignated as
paragraph (4);
(D) ‘‘and’’ were omitted from the end of
paragraph (2); and
(E) the following new paragraph were in-
serted after paragraph (2):
‘‘(3) ‘(as defined in subparagraph (B) but with-
out regard to clause (ii) of that subparagraph and
subject to subsection (d))’ were substituted for ‘(as
defined in subparagraph (B))’ in subparagraph (A)
of such section; and’’.
(2) SPECIAL RULE.—With respect to California,
section 4721(e) of the Balanced Budget Act of 1997
(Public Law 105–33; 111 Stat. 514), as amended by
section 607 of BBRA (113 Stat. 1501A–321), shall
be applied without regard to paragraph (1).
(3) PERIOD DESCRIBED.—The period described
in this paragraph is the period that begins, with re-
spect to a State, on the first day of the first State
fiscal year that begins after September 30, 2002,
and ends on the last day of the succeeding State fis-
cal year.
303
(4) APPLICATION TO WAIVERS.—With respect
to a State operating under a waiver of the require-
ments of title XIX of the Social Security Act (42
U.S.C. 1396 et seq.) under section 1115 of such Act
(42 U.S.C. 1315), the amount by which any pay-
ment adjustment made by the State under title XIX
of such Act (42 U.S.C. 1396 et seq.), after the ap-
plication of section 4721(e) of the Balanced Budget
Act of 1997 under paragraph (1) to such State, ex-
ceeds the costs of furnishing hospital services pro-
vided by hospitals described in such section shall be
fully reflected as an increase in the baseline expendi-
ture limit for such waiver, but subject to the DSH
allotment for the State under section 1923(f) of
such title (42 U.S.C. 1396r–4(f)).
(f) ASSISTANCE FOR CERTAIN PUBLIC HOSPITALS.—
(1) IN GENERAL.—Subject to subsection (h),
beginning with fiscal year 2002, notwithstanding
section 1923(f) of the Social Security Act (42
U.S.C. 1396r–4(f)) and subject to paragraph (3),
with respect to a State, payment adjustments made
under title XIX of the Social Security Act (42
U.S.C. 1396 et seq.) to a hospital described in para-
graph (2) shall be made without regard to the DSH
304
allotment limitation for the State determined under
section 1923(f) of that Act (42 U.S.C. 1396r–4(f)).
(2) HOSPITAL DESCRIBED.—A hospital is de-
scribed in this paragraph if the hospital—
(A) is owned or operated by a State (as de-
fined for purposes of title XIX of the Social Se-
curity Act), or by an instrumentality or a unit
of government within a State (as so defined);
(B) as of October 1, 2000—
(i) is in existence and operating as a
hospital described in subparagraph (A);
and
(ii) is not receiving disproportionate
share hospital payments from the State in
which it is located under title XIX of such
Act; and
(C) has a low-income utilization rate (as
defined in section 1923(b)(3) of the Social Se-
curity Act (42 U.S.C. 1396r–4(b)(3))) in excess
of 65 percent.
(3) LIMITATION ON EXPENDITURES.—
(A) IN GENERAL.—With respect to any fis-
cal year, the aggregate amount of Federal fi-
nancial participation that may be provided for
payment adjustments described in paragraph
305
(1) for that fiscal year for all States may not
exceed the amount described in subparagraph
(B) for the fiscal year.
(B) AMOUNT
DESCRIBED.—The amount
described in this subparagraph for a fiscal year
is as follows:
(i) For fiscal year 2002, $15,000,000.
(ii) 
For 
fiscal 
year 
2003,
$176,000,000.
(iii) 
For 
fiscal 
year 
2004,
$269,000,000.
(iv) 
For 
fiscal 
year 
2005,
$330,000,000.
(v) For fiscal year 2006 and each fis-
cal year thereafter, $375,000,000.
(g) DSH PAYMENT ACCOUNTABILITY STANDARDS.—
Subject to subsection (h), not later than September 30,
2002, the Secretary of Health and Human Services shall
implement accountability standards to ensure that Federal
funds provided with respect to disproportionate share hos-
pital adjustments made under section 1923 of the Social
Security Act (42 U.S.C. 1396r–4) are used to reimburse
States and hospitals eligible for such payment adjustments
for providing uncompensated health care to low-income
306
patients and are otherwise made in accordance with the
requirements of section 1923 of that Act.
(h) EFFECTIVE DATE.—The amendments made by
subsection (f) and (g) take effect on the date the final
regulation required under section 705(a) (relating to the
application of an aggregate upper payment limit test for
State medicaid spending for inpatient hospital services,
outpatient hospital services, nursing facility services, in-
termediate care facility services for the mentally retarded,
and clinic services provided by government facilities that
are not State-owned or operated facilities) is published in
the Federal Register.
SEC. 702. NEW PROSPECTIVE PAYMENT SYSTEM FOR FED-
ERALLY-QUALIFIED HEALTH CENTERS AND
RURAL HEALTH CLINICS.
(a) IN
GENERAL.—Section 1902(a) (42 U.S.C.
1396a(a)) is amended—
(1) in paragraph (13)—
(A) in subparagraph (A), by adding ‘‘and’’
at the end;
(B) in subparagraph (B), by striking
‘‘and’’ at the end; and
(C) by striking subparagraph (C); and
(2) by inserting after paragraph (14) the fol-
lowing new paragraph:
307
‘‘(15) provide for payment for services de-
scribed in clause (B) or (C) of section 1905(a)(2)
under the plan in accordance with subsection (aa);’’.
(b) NEW PROSPECTIVE PAYMENT SYSTEM.—Section
1902 (42 U.S.C. 1396a) is amended by adding at the end
the following:
‘‘(aa) PAYMENT FOR SERVICES PROVIDED BY FED-
ERALLY-QUALIFIED
HEALTH
CENTERS
AND
RURAL
HEALTH CLINICS.—
‘‘(1) IN GENERAL.—Beginning with fiscal year
2001 and each succeeding fiscal year, the State plan
shall provide for payment for services described in
section 1905(a)(2)(C) furnished by a Federally-
qualified health center and services described in sec-
tion 1905(a)(2)(B) furnished by a rural health clinic
in accordance with the provisions of this subsection.
‘‘(2) FISCAL YEAR 2001.—Subject to paragraph
(4), for services furnished during fiscal year 2001,
the State plan shall provide for payment for such
services in an amount (calculated on a per visit
basis) that is equal to 100 percent of the average of
the costs of the center or clinic of furnishing such
services during fiscal years 1999 and 2000 which
are reasonable and related to the cost of furnishing
such services, or based on such other tests of reason-
308
ableness as the Secretary prescribes in regulations
under section 1833(a)(3), or, in the case of services
to which such regulations do not apply, the same
methodology used under section 1833(a)(3), ad-
justed to take into account any increase or decrease
in the scope of such services furnished by the center
or clinic during fiscal year 2001.
‘‘(3) FISCAL YEAR 2002 AND SUCCEEDING FIS-
CAL YEARS.—Subject to paragraph (4), for services
furnished during fiscal year 2002 or a succeeding
fiscal year, the State plan shall provide for payment
for such services in an amount (calculated on a per
visit basis) that is equal to the amount calculated for
such services under this subsection for the preceding
fiscal year—
‘‘(A) increased by the percentage increase
in the MEI (as defined in section 1842(i)(3))
applicable to primary care services (as defined
in section 1842(i)(4)) for that fiscal year; and
‘‘(B) adjusted to take into account any in-
crease or decrease in the scope of such services
furnished by the center or clinic during that fis-
cal year.
‘‘(4) ESTABLISHMENT OF INITIAL YEAR PAY-
MENT AMOUNT FOR NEW CENTERS OR CLINICS.—In
309
any case in which an entity first qualifies as a Fed-
erally-qualified health center or rural health clinic
after fiscal year 2000, the State plan shall provide
for payment for services described in section
1905(a)(2)(C) furnished by the center or services
described in section 1905(a)(2)(B) furnished by the
clinic in the first fiscal year in which the center or
clinic so qualifies in an amount (calculated on a per
visit basis) that is equal to 100 percent of the costs
of furnishing such services during such fiscal year
based on the rates established under this subsection
for the fiscal year for other such centers or clinics
located in the same or adjacent area with a similar
case load, service package, and case mix or, in the
absence of such a center or clinic, in accordance with
the regulations and methodology referred to in para-
graph (2) or based on such other tests of reasonable-
ness as the Secretary may specify. For each fiscal
year following the fiscal year in which the entity
first qualifies as a Federally-qualified health center
or rural health clinic, the State plan shall provide
for the payment amount to be calculated in accord-
ance with paragraph (3).
‘‘(5) ADMINISTRATION IN THE CASE OF MAN-
AGED CARE.—
310
‘‘(A) IN GENERAL.—In the case of services
furnished by a Federally-qualified health center
or rural health clinic pursuant to a contract be-
tween the center or clinic and a managed care
entity (as defined in section 1932(a)(1)(B)), the
State plan shall provide for payment to the cen-
ter or clinic by the State of a supplemental pay-
ment equal to the amount (if any) by which the
amount determined under paragraphs (2), (3),
and (4) of this subsection exceeds the amount
of the payments provided under the contract.
‘‘(B) PAYMENT SCHEDULE.—The supple-
mental payment required under subparagraph
(A) shall be made pursuant to a payment
schedule agreed to by the State and the Feder-
ally-qualified health center or rural health clin-
ic, but in no case less frequently than every 4
months.
‘‘(6) ALTERNATIVE
PAYMENT
METHODOLO-
GIES.—Notwithstanding any other provision of this
section, the State plan may provide for payment in
any fiscal year to a Federally-qualified health center
for services described in section 1905(a)(2)(C) or to
a rural health clinic for services described in section
311
1905(a)(2)(B) in an amount which is determined
under an alternative payment methodology that—
‘‘(A) is agreed to by the State and the cen-
ter or clinic; and
‘‘(B) results in payment to the center or
clinic of an amount which is at least equal to
the amount otherwise required to be paid to the
center or clinic under this section.’’.
(c) CONFORMING AMENDMENTS.—
(1) Section 4712 of the BBA (Public Law 105–
33; 111 Stat. 508) is amended by striking sub-
section (c).
(2) Section 1915(b) (42 U.S.C. 1396n(b)) is
amended by striking ‘‘1902(a)(13)(C)’’ and inserting
‘‘1902(a)(15), 1902(aa),’’.
(d) GAO STUDY
OF
FUTURE
REBASING.—The
Comptroller General of the United States shall provide for
a study on the need for, and how to, rebase or refine costs
for making payment under the medicaid program for serv-
ices provided by Federally-qualified health centers and
rural health clinics (as provided under the amendments
made by this section). The Comptroller General shall pro-
vide for submittal of a report on such study to Congress
by not later than 4 years after the date of the enactment
of this Act.
312
(e) EFFECTIVE DATE.—The amendments made by
this section take effect on October 1, 2000, and apply to
services furnished on or after such date.
SEC. 703. STREAMLINED APPROVAL OF CONTINUED STATE-
WIDE SECTION 1115 MEDICAID WAIVERS.
(a) IN GENERAL.—Section 1115 (42 U.S.C. 1315)
is amended by adding at the end the following new sub-
section:
‘‘(f) An application by the chief executive officer of
a State for an extension of a waiver project the State is
operating under an extension under subsection (e) (in this
subsection referred to as the ‘waiver project’) shall be sub-
mitted and approved or disapproved in accordance with
the following:
‘‘(1) The application for an extension of the
waiver project shall be submitted to the Secretary at
least 120 days prior to the expiration of the current
period of the waiver project.
‘‘(2) Not later than 45 days after the date such
application is received by the Secretary, the Sec-
retary shall notify the State if the Secretary intends
to review the terms and conditions of the waiver
project. A failure to provide such notification shall
be deemed to be an approval of the application.
313
‘‘(3) Not later than 45 days after the date a no-
tification is made in accordance with paragraph (2),
the Secretary shall inform the State of proposed
changes in the terms and conditions of the waiver
project. A failure to provide such information shall
be deemed to be an approval of the application.
‘‘(4) During the 30-day period that begins on
the date information described in paragraph (3) is
provided to a State, the Secretary shall negotiate re-
vised terms and conditions of the waiver project with
the State.
‘‘(5)(A) Not later than 120 days after the date
an application for an extension of the waiver project
is submitted to the Secretary (or such later date
agreed to by the chief executive officer of the State),
the Secretary shall—
‘‘(i) approve the application subject to such
modifications in the terms and conditions—
‘‘(I) as have been agreed to by the
Secretary and the State; or
‘‘(II) in the absence of such agree-
ment, as are determined by the Secretary
to be reasonable, consistent with the over-
all objectives of the waiver project, and not
in violation of applicable law; or
314
‘‘(ii) disapprove the application.
‘‘(B) A failure by the Secretary to approve or
disapprove an application submitted under this sub-
section in accordance with the requirements of sub-
paragraph (A) shall be deemed to be an approval of
the application subject to such modifications in the
terms and conditions as have been agreed to (if any)
by the Secretary and the State.
‘‘(6) An approval of an application for an exten-
sion of a waiver project under this subsection shall
be for a period not to exceed 3 years.
‘‘(7) An extension of a waiver project under this
subsection shall be subject to the final reporting and
evaluation requirements of paragraphs (4) and (5)
of subsection (e) (taking into account the extension
under this subsection with respect to any timing re-
quirements imposed under those paragraphs).’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) applies to requests for extensions of dem-
onstration projects pending or submitted on or after the
date of the enactment of this Act.
SEC. 704. MEDICAID COUNTY-ORGANIZED HEALTH SYS-
TEMS.
(a) IN GENERAL.—Section 9517(c)(3)(C) of the
Comprehensive Omnibus Budget Reconciliation Act of
315
1985 is amended by striking ‘‘10 percent’’ and inserting
‘‘14 percent’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) takes effect on the date of the enactment
of this Act.
SEC. 705. DEADLINE FOR ISSUANCE OF FINAL REGULATION
RELATING TO MEDICAID UPPER PAYMENT
LIMITS.
(a) IN GENERAL.—Not later than December 31,
2000, the Secretary of Health and Human Services (in
this section referred to as the ‘‘Secretary’’), notwith-
standing any requirement of the Administrative Proce-
dures Act under chapter 5 of title 5, United States Code,
or any other provision of law, shall issue under sections
447.272, 447.304, and 447.321 of title 42, Code of Fed-
eral Regulations (and any other section of part 447 of title
42, Code of Federal Regulations that the Secretary deter-
mines is appropriate), a final regulation based on the pro-
posed rule announced on October 5, 2000, that—
(1) modifies the upper payment limit test ap-
plied to State medicaid spending for inpatient hos-
pital services, outpatient hospital services, nursing
facility services, intermediate care facility services
for the mentally retarded, and clinic services by ap-
plying an aggregate upper payment limit to pay-
316
ments made to government facilities that are not
State-owned or operated facilities; and
(2) provides for a transition period in accord-
ance with subsection (b).
(b) TRANSITION PERIOD.—
(1) IN GENERAL.—The final regulation required
under subsection (a) shall provide that, with respect
to a State described in paragraph (3), the State
shall be considered to be in compliance with the final
regulation required under subsection (a) so long as,
for each State fiscal year during the period de-
scribed in paragraph (4), the State reduces pay-
ments under a State medicaid payment methodology
or a State plan provision described in paragraph (3),
or reduces the actual dollar payment levels described
in paragraph (3)(B), so that the amount of the pay-
ments that would otherwise have been made under
such provision, methodology, or payment levels by
the State for any State fiscal year during such pe-
riod is reduced by 15 percent in the first such State
fiscal year, and by an additional 15 percent in each
of next 5 State fiscal years.
(2) 
REQUIREMENT.—Notwithstanding 
para-
graph (1), the final regulation required under sub-
section (a) shall provide that, for any period (or por-
317
tion of a period) that occurs on or after October 1,
2008, medicaid payments made by a State described
in paragraph (3) shall comply with such final regula-
tion.
(3) STATE DESCRIBED.—A State described in
this paragraph is a State with a State medicaid pay-
ment methodology or State plan provision which—
(A) was approved, deemed to have been ap-
proved, or was in effect on or before October 1,
1992 (including any subsequent amendments or
successor provisions or methodologies and
whether or not a State plan amendment was
made to carry out such provision or method-
ology after such date) or under which claims for
Federal financial participation were filed and
paid on or before such date; and
(B) provides for payments that are in ex-
cess of the upper payment limit test established
under the final regulation required under sub-
section (a) (or which would be noncompliant
with such final regulation if the actual dollar
payment levels made under the payment provi-
sion or methodology in the State fiscal year
which begins during 1999 were continued).
318
(4) PERIOD DESCRIBED.—The period described
in this paragraph is the period that begins on the
first State fiscal year that begins after September
30, 2002, and ends on September 30, 2008.
SEC. 706. ALASKA FMAP.
Notwithstanding the first sentence of section 1905(b)
of the Social Security Act (42 U.S.C. 1396d(b)), only with
respect to each of fiscal years 2001 through 2005, for pur-
poses of titles XIX and XXI of the Social Security Act,
the State percentage used to determine the Federal med-
ical assistance percentage for Alaska shall be that percent-
age which bears the same ratio to 45 percent as the square
of the adjusted per capita income of Alaska (determined
by dividing the State’s 3-year average per capita income
by 1.05) bears to the square of the per capita income of
the 50 States.
SEC. 707. OPTIONAL COVERAGE OF LEGAL IMMIGRANTS
UNDER THE MEDICAID PROGRAM.
(a) IN
GENERAL.—Section 1903(v) (42 U.S.C.
1396b(v)) is amended—
(1) in paragraph (1), by striking ‘‘paragraph
(2)’’ and inserting ‘‘paragraphs (2) and (4)’’; and
(2) by adding at the end the following new
paragraph:
319
‘‘(4)(A) A State may elect (in a plan amendment
under this title) to provide medical assistance under this
title, notwithstanding sections 401(a), 402(b), 403, and
421 of the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996, for aliens who are lawfully re-
siding in the United States (including battered aliens de-
scribed in section 431(c) of such Act) and who are other-
wise eligible for such assistance, within either or both of
the following eligibility categories:
‘‘(i) PREGNANT WOMEN.—Women during preg-
nancy (and during the 60-day period beginning on
the last day of the pregnancy).
‘‘(ii) CHILDREN.—Children (as defined under
such plan), including optional targeted low-income
children described in section 1905(u)(2)(B).
‘‘(B) In the case of a State that has elected to provide
medical assistance to a category of aliens under subpara-
graph (A), no debt shall accrue under an affidavit of sup-
port against any sponsor of such an alien who has lawfully
resided in the United States on the basis of provision of
assistance to such category.’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) take effect on October 1, 2000, and apply
to medical assistance and child health assistance furnished
on or after such date.
320
SEC. 708. ADDITIONAL ENTITIES QUALIFIED TO DETER-
MINE MEDICAID PRESUMPTIVE ELIGIBILITY
FOR LOW-INCOME CHILDREN.
(a) IN GENERAL.—Section 1920A(b)(3)(A)(i) (42
U.S.C. 1396r–1a(b)(3)(A)(i)) is amended—
(1) by striking ‘‘or (II)’’ and inserting ‘‘, (II)’’;
and
(2) by inserting ‘‘eligibility of a child for med-
ical assistance under the State plan under this title,
or eligibility of a child for child health assistance
under the program funded under title XXI, (III) is
an elementary school or secondary school, as such
terms are defined in section 14101 of the Elemen-
tary and Secondary Education Act of 1965 (20
U.S.C. 8801), an elementary or secondary school op-
erated or supported by the Bureau of Indian Affairs,
a State or tribal child support enforcement agency,
a child care resource and referral agency, an organi-
zation that is providing emergency food and shelter
under a grant under the Stewart B. McKinney
Homeless Assistance Act, or a State or tribal office
or entity involved in enrollment in the program
under this title, under part A of title IV, under title
XXI, or that determines eligibility for any assistance
or benefits provided under any program of public or
assisted housing that receives Federal funds, includ-
321
ing the program under section 8 or any other section
of the United States Housing Act of 1937 (42
U.S.C. 1437 et seq.) or under the Native American
Housing Assistance and Self-Determination Act of
1996 (25 U.S.C. 4101 et seq.), or (IV) any other en-
tity the State so deems, as approved by the Sec-
retary’’ before the semicolon.
(b) TECHNICAL AMENDMENTS.—Section 1920A (42
U.S.C. 1396r–1a) is amended—
(1) in subsection (b)(3)(A)(i), by striking ‘‘42
U.S.C. 9821’’ and inserting ‘‘42 U.S.C. 9831’’;
(2) in subsection (b)(3)(A)(ii), by striking
‘‘paragraph (1)(A)’’ and inserting ‘‘paragraph (2)’’;
and
(3) in subsection (c)(2), in the matter preceding
subparagraph 
(A), 
by 
striking 
‘‘subsection
(b)(1)(A)’’ and inserting ‘‘subsection (b)(2)’’.
(c) APPLICATION TO PRESUMPTIVE ELIGIBILITY FOR
PREGNANT WOMEN UNDER MEDICAID.—Section 1920(b)
(42 U.S.C. 1396r–1(b)) is amended by adding at the end
after and below paragraph (2) the following flush sen-
tence:
‘‘The term ‘qualified provider’ includes a qualified entity
as defined in section 1920A(b)(3).’’.
322
(d) APPLICATION
UNDER
TITLE
XXI.—Section
2107(e)(1) (42 U.S.C. 1397gg(e)(1)) is amended by add-
ing at the end the following new subparagraph:
‘‘(D) Section 1920A (relating to presump-
tive eligibility).’’.
SEC. 709. IMPROVING WELFARE-TO-WORK TRANSITION.
(a) 1 YEAR
EXTENSION.—Section 1925(f) (42
U.S.C. 1396r–6(f)) is amended by striking ‘‘2001’’ and
inserting ‘‘2002’’.
(b) SIMPLIFICATION OPTIONS.—
(1) STATE OPTION TO WAIVE REPORTING RE-
QUIREMENTS.—Section 1925(b)(2) of such Act (42
U.S.C. 1396r–6(b)(2)) is amended by adding at the
end the following new subparagraph:
‘‘(C) STATE OPTION TO WAIVE REPORTING
REQUIREMENTS.—A State may elect to waive
the reporting requirements under subparagraph
(B) and, in the case of such a waiver for pur-
poses of notices required under subparagraph
(A), to exclude from such notices any reference
to any requirement under subparagraph (B).’’.
(2) EXEMPTION FOR STATES COVERING NEEDY
FAMILIES UP TO 185 PERCENT OF POVERTY.—Sec-
tion 1925 (42 U.S.C. 1396r–6) is amended—
323
(A) in each of subsections (a)(1) and
(b)(1), by inserting ‘‘but subject to subsection
(g),’’ after ‘‘Notwithstanding any other provi-
sion of this title,’’; and
(B) by adding at the end the following new
subsection:
‘‘(g) EXEMPTION
FOR STATE COVERING NEEDY
FAMILIES UP TO 185 PERCENT OF POVERTY.—
‘‘(1) IN GENERAL.—At State option, the provi-
sions of this section shall not apply to a State that
uses the authority under section 1931(b)(2)(C) to
make medical assistance available under the State
plan under this title, at a minimum, to all individ-
uals described in section 1931(b)(1) in families with
gross incomes (determined without regard to work-
related child care expenses of such individuals) at or
below 185 percent of the income official poverty line
(as defined by the Office of Management and Budg-
et, and revised annually in accordance with section
673(2) of the Omnibus Budget Reconciliation Act of
1981) applicable to a family of the size involved.
‘‘(2) APPLICATION TO OTHER PROVISIONS OF
THIS TITLE.—The State plan of a State described in
paragraph (1) shall be deemed to meet the require-
324
ments 
of 
sections 
1902(a)(10)(A)(i)(I) 
and
1902(e)(1).’’.
(3) EFFECTIVE DATE.—The amendments made
by this subsection take effect on October 1, 2000.
SEC. 710. MEDICAID RECOGNITION FOR SERVICES OF PHY-
SICIAN ASSISTANTS.
(a) IN
GENERAL.—Section 1905(a) (42 U.S.C.
1396d(a)) is amended—
(1) by redesignating paragraphs (22) through
(27) as paragraphs (23) through (28), respectively;
and
(2) by inserting after paragraph (21) the fol-
lowing new paragraph:
‘‘(22) services furnished by a physician assist-
ant (as defined in section 1861(aa)(5)) which the as-
sistant is legally authorized to perform under State
law and with the supervision of a physician;’’.
(b) 
CONFORMING
AMENDMENTS.—(1) 
Section
1902(a)(10)(C)(iv) (42 U.S.C. 1396a(a)(10)(C)(iv)) is
amended by striking ‘‘(24)’’ and inserting ‘‘(25)’’.
(2) 
Section 
1929(e)(2)(A) 
(42 
U.S.C.
1396t(e)(2)(A)) is amended by striking ‘‘1905(a)(23)’’
and inserting ‘‘1905(a)(24)’’.
325
(3) 
Section 
1917(c)(1)(C)(ii) 
(42 
U.S.C.
1396(p)(c)(1)(C)(ii)) is amended by striking ‘‘(22), or
(24)’’ and inserting ‘‘(23), or (25)’’.
SECTION 711. MEDICAID FAMILY OPPORTUNITY PROVI-
SIONS RELATED TO DISABLED CHILDREN.
(a) OPPORTUNITY
FOR FAMILIES
OF DISABLED
CHILDREN TO PURCHASE MEDICAID COVERAGE
FOR
SUCH CHILDREN.—
(1) STATE OPTION TO ALLOW FAMILIES OF DIS-
ABLED
CHILDREN
TO
PURCHASE
MEDICAID
COV-
ERAGE FOR SUCH CHILDREN.—
(A) IN
GENERAL.—Section 1902 (42
U.S.C. 1396a), as amended by the Foster Care
Independence Act of 1999 (Public Law 106–
169; 113 Stat. 1822) and the Ticket to Work
and Work Incentives Improvement Act of 1999
(Public Law 106–170; 113 Stat. 1860), is
amended—
(i) in subsection (a)(10)(A)(ii)—
(I) by striking ‘‘or’’ at the end of
subclause (XVI);
(II) by adding ‘‘or’’ at the end of
subclause (XVII); and
(III) by adding at the end the
following new subclause:
326
‘‘(XVIII) who are disabled chil-
dren described in subsection (aa);’’;
and
(ii) by adding at the end the following
new subsection:
‘‘(aa) Individuals described in this subsection are
individuals—
‘‘(1) who have not attained 18 years of age;
‘‘(2) who would be considered disabled under
section 1614(a)(3)(C) (determined without regard to
the reference to age in that section) but for having
earnings or deemed income or resources (as deter-
mined under title XVI for children) that exceed the
requirements for receipt of supplemental security in-
come benefits; and
‘‘(3) whose family income does not exceed such
income level as the State establishes and does not
exceed—
‘‘(A) 300 percent of the income official
poverty line (as defined by the Office of Man-
agement and Budget, and revised annually in
accordance with section 673(2) of the Omnibus
Budget Reconciliation Act of 1981) applicable
to a family of the size involved; or
327
‘‘(B) such higher percent of such poverty
line as a State may establish, except that no
Federal financial participation shall be provided
under section 1903(a) for any medical assist-
ance provided to an individual who would not be
described in this subsection but for this
clause.’’.
(B) INTERACTION WITH EMPLOYER-SPON-
SORED FAMILY COVERAGE.—Section 1902(aa)
(42 U.S.C. 1396a(aa)), as added by subpara-
graph (A), is amended by adding at the end the
following new paragraph:
‘‘(3)(A) If an employer of a parent of an individual
described in paragraph (1) offers family coverage under
a group health plan (as defined in section 2791(a) of the
Public Health Service Act), the State may—
‘‘(i) notwithstanding section 1906(a)(3), require
such parent to apply for, enroll in, and pay pre-
miums for, such coverage as a condition of such par-
ent’s child being or remaining eligible for medical as-
sistance under subsection (a)(10)(A)(ii)(XVIII) if
the parent is determined eligible for such coverage
and the employer contributes at least 50 percent of
the total cost of annual premiums for such coverage;
and
328
‘‘(ii) if such coverage is obtained—
‘‘(I) subject to paragraph (2) of section
1916(h), reduce the premium imposed by the
State under that section (if any) in an amount
that reasonably reflects the premium contribu-
tion made by the parent for private coverage on
behalf of a child with a disability; and
‘‘(II) treat such coverage as a third party
liability under subsection (a)(25).
‘‘(B) In the case of a parent to which subparagraph
(A) applies—
‘‘(i) if the family income of such parent does
not exceed 300 percent of the income official poverty
line (referred to in paragraph (1)(C)(i)), a State
may provide for payment of any portion of the an-
nual premium for such family coverage that the par-
ent is required to pay; and
‘‘(ii) any payments made by the State under
clause (i) shall be considered, for purposes of section
1903(a), to be payments for medical assistance.’’.
(2) STATE
OPTION
TO
IMPOSE
INCOME-RE-
LATED
PREMIUMS.—Section 
1916 
(42 
U.S.C.
1396o), as amended by the Ticket to Work and
Work Incentives Improvement Act of 1999 (Public
Law 106–170; 113 Stat. 1860), is amended—
329
(A) in subsection (a), by striking ‘‘sub-
section (g)’’ and inserting ‘‘subsections (g) and
(h)’’; and
(B) by adding at the end the following new
subsection:
‘‘(h)(1) With respect to disabled children provided
medical 
assistance 
under 
section
1902(a)(10)(A)(ii)(XVIII), subject to paragraph (2), a
State may (in a uniform manner for such children) require
the families of such children to pay monthly premiums set
on a sliding scale based on family income.
‘‘(2) A premium requirement imposed under para-
graph (1) may only apply to the extent that—
‘‘(A) the aggregate amount of such premium
and any premium that the parent is required to pay
for family coverage under section 1902(aa)(3)(A)(i)
does not exceed 5 percent of the family’s income;
and
‘‘(B) the requirement is imposed consistent with
section 1902(aa)(3)(A)(ii)(I).
‘‘(3) A State shall not require prepayment of a pre-
mium imposed pursuant to paragraph (1) and shall not
terminate 
eligibility 
of 
a 
child 
under 
section
1902(a)(10)(A)(ii)(XVIII) for medical assistance under
this title on the basis of failure to pay any such premium
330
until such failure continues for a period of not less than
60 days from the date on which the premium became past
due. The State may waive payment of any such premium
in any case where the State determines that requiring
such payment would create an undue hardship.’’.
(3) 
CONFORMING
AMENDMENT.—Section
1903(f)(4) (42 U.S.C. 1396b(f)(4)) is amended in
the matter preceding subparagraph (A) by inserting
‘‘1902(a)(10)(A)(ii)(XIII),
1902(a)(10)(A)(ii)(XVIII),’’ 
after
‘‘1902(a)(10)(A)(ii)(XVI),’’.
(4) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to medical assistance
for items and services furnished on or after January
1, 2002.
(b) TREATMENT OF INPATIENT PSYCHIATRIC HOS-
PITAL SERVICES FOR INDIVIDUALS UNDER AGE 21 IN
HOME OR COMMUNITY-BASED SERVICES WAIVERS.—
(1) IN GENERAL.—Section 1915(c) (42 U.S.C.
1396n(c)) is amended—
(A) in paragraph (1)—
(i) in the first sentence, by inserting
‘‘, or inpatient psychiatric hospital services
for individuals under age 21,’’ after ‘‘inter-
331
mediate care facility for the mentally re-
tarded’’; and
(ii) in the second sentence, by insert-
ing ‘‘, or inpatient psychiatric hospital
services for individuals under age 21’’ be-
fore the period;
(B) in paragraph (2)(B), by striking ‘‘or
services in an intermediate care facility for the
mentally retarded’’ each place it appears and
inserting ‘‘, services in an intermediate care fa-
cility for the mentally retarded, or inpatient
psychiatric hospital services for individuals
under age 21’’;
(C) by striking paragraph (2)(C) and in-
serting the following:
‘‘(C) such individuals who are determined to be
likely to require the level of care provided in a hos-
pital, nursing facility, or intermediate care facility
for the mentally retarded, or inpatient psychiatric
hospital services for individuals under age 21, are
informed of the feasible alternatives, if available
under the waiver, at the choice of such individuals,
to the provision of inpatient hospital services, nurs-
ing facility services, services in an intermediate care
facility for the mentally retarded, or inpatient psy-
332
chiatric hospital services for individuals under age
21;’’; and
(D) in paragraph (7)(A)—
(i) by inserting ‘‘, or inpatient psy-
chiatric hospital services for individuals
under age 21,’’ after ‘‘intermediate care fa-
cility for the mentally retarded’’; and
(ii) by inserting ‘‘, or who would re-
quire inpatient psychiatric hospital services
for individuals under age 21’’ before the
period.
(2) EFFECTIVE DATE.—The amendments made
by paragraph (1) apply with respect to medical as-
sistance provided on or after October 1, 2000.
(c) DEMONSTRATION
OF COVERAGE UNDER
THE
MEDICAID PROGRAM OF CHILDREN WITH POTENTIALLY
SEVERE DISABILITIES.—
(1) STATE APPLICATION.—A State may apply
to the Secretary of Health and Human Services (in
this subsection referred to as the ‘‘Secretary’’) for
approval of a demonstration project (in this sub-
section referred to as a ‘‘demonstration project’’)
under which up to a specified maximum number of
children with a potentially severe disability (as de-
fined in paragraph (2)) are provided medical assist-
333
ance under the State medicaid plan under title XIX
of the Social Security Act (42 U.S.C. 1396 et seq.).
(2) CHILD WITH A POTENTIALLY SEVERE DIS-
ABILITY DEFINED.—
(A) IN GENERAL.—In this subsection, the
term ‘‘child with a potentially severe disability’’
means, with respect to a demonstration project,
an individual who—
(i) has not attained 21 years of age;
(ii) has a physical or mental condi-
tion, disease, disorder (including a con-
genital birth defect or a metabolic condi-
tion), injury, or developmental disability
that was incurred before the individual at-
tained such age; and
(iii) is reasonably expected, but for
the receipt of medical assistance under the
State medicaid plan, to reach the level of
disability defined under section 1614(a)(3)
of the Social Security Act (42 U.S.C.
1382c(a)(3)), (determined without regard
to the reference to age in subparagraph
(C) of that section).
(B) EXCEPTION.—Such term does not in-
clude an individual who would be considered
334
disabled under section 1614(a)(3)(C) of the So-
cial Security Act (42 U.S.C. 1382c(a)(3)(C))
(determined without regard to the reference to
age in that section).
(3) 
APPROVAL
OF
DEMONSTRATION
PROJECTS.—
(A) IN
GENERAL.—Subject to subpara-
graph (C), the Secretary shall approve applica-
tions under paragraph (1) that meet the re-
quirements of subparagraph (B) and such addi-
tional terms and conditions as the Secretary
may require. The Secretary may waive the re-
quirement of section 1902(a)(1) of the Social
Security Act (42 U.S.C. 1396a(a)(1)) to allow
for sub-State demonstrations.
(B) TERMS
AND
CONDITIONS
OF
DEM-
ONSTRATION
PROJECTS.—The Secretary may
not approve a demonstration project under this
subsection unless the State provides assurances
satisfactory to the Secretary that the following
conditions are or will be met:
(i) INDEPENDENT EVALUATION.—The
State provides for an independent evalua-
tion of the project to be conducted during
fiscal year 2005.
335
(ii) CONSULTATION
FOR
DEVELOP-
MENT OF CRITERIA.—The State consults
with appropriate pediatric health profes-
sionals in establishing the criteria for de-
termining whether a child has a potentially
severe disability.
(iii) ANNUAL
REPORT.—The State
submits an annual report to the Secretary
(in a uniform form and manner established
by the Secretary) on the use of funds pro-
vided under the grant that includes the fol-
lowing:
(II) Enrollment and financial
statistics on the total number of chil-
dren with a potentially severe dis-
ability enrolled in the demonstration
project, disaggregated by disability;
the services provided by category or
code and the cost of each service so
categorized or coded; and the number
of children enrolled in the demonstra-
tion project who also receive services
through private insurance.
(II) With respect to the report
submitted for fiscal year 2005, the re-
336
sults of the independent evaluation
conducted under clause (i).
(III) Such additional information
as the Secretary may require.
(C) LIMITATIONS
ON
FEDERAL
FUND-
ING.—
(i) APPROPRIATION.—
(I) IN
GENERAL.—Out of any
funds in the Treasury not otherwise
appropriated, there is appropriated to
carry out this subsection $16,667,000
for each of fiscal years 2001 through
2006.
(II) BUDGET AUTHORITY.—Sub-
clause (I) constitutes budget authority
in advance of appropriations Acts and
represents the obligation of the Fed-
eral Government to provide for the
payment of the amounts appropriated
under subclause (I).
(ii) LIMITATION
ON
PAYMENTS.—In
no case may—
(I) the aggregate amount of pay-
ments made by the Secretary to
337
States under this subsection exceed
$100,000,000;
(II) the aggregate amount of
payments made by the Secretary to
States for administrative expenses re-
lating to the evaluations and annual
reports required under clauses (i) and
(iii) of subparagraph (B) exceed
$2,000,000 of such $100,000,000; or
(III) payments be provided by
the Secretary for a fiscal year after
fiscal year 2009.
(iii) 
FUNDS
ALLOCATED
TO
STATES.—
(I) IN GENERAL.—The Secretary
shall allocate funds to States based on
their applications and the availability
of funds. In making such allocations,
the Secretary shall ensure an equi-
table distribution of funds among
States with large populations and
States with small populations.
(II) AVAILABILITY.—Funds allo-
cated to a State under a grant made
338
under this subsection for a fiscal year
shall remain available until expended.
(iv) FUNDS
NOT
ALLOCATED
TO
STATES.—Funds not allocated to States in
the fiscal year for which they are appro-
priated shall remain available in suc-
ceeding fiscal years for allocation by the
Secretary using the allocation formula es-
tablished under this subsection.
(v) PAYMENTS TO STATES.—The Sec-
retary shall pay to each State with a dem-
onstration project approved under this sub-
section, from its allocation under clause
(iii), an amount for each quarter equal to
the Federal medical assistance percentage
(as defined in section 1905(b) of the Social
Security Act (42 U.S.C. 1395d(b))) of ex-
penditures in the quarter for medical as-
sistance provided to children with a poten-
tially severe disability.
(4) RECOMMENDATION.—Not later than Octo-
ber 1, 2004, the Secretary shall submit a rec-
ommendation to the Committee on Commerce of the
House of Representatives and the Committee on Fi-
nance of the Senate regarding whether the dem-
339
onstration project established under this subsection
should be continued after fiscal year 2006.
(5) STATE DEFINED.—In this subsection, the
term ‘‘State’’ has the meaning given such term for
purposes of title XIX of the Social Security Act (42
U.S.C. 1396 et seq.).
(d) DEVELOPMENT AND SUPPORT OF FAMILY-TO-
FAMILY HEALTH INFORMATION CENTERS.—Section 501
(42 U.S.C. 701) is amended by adding at the end the fol-
lowing new subsection:
‘‘(c)(1)(A) In addition to amounts appropriated
under subsection (a) and retained under section 502(a)(1)
for the purpose of carrying out activities described in sub-
section (a)(2), there is appropriated to the Secretary, out
of any money in the Treasury not otherwise appropriated,
for the purpose of enabling the Secretary (through grants,
contracts, or otherwise) to provide for special projects of
regional and national significance for the development and
support of family-to-family health information centers de-
scribed in paragraph (2), $10,000,000 for each of fiscal
years 2001 through 2006.
‘‘(B) Funds appropriated under subparagraph (A)
shall remain available until expended.
‘‘(2) The family-to-family health information centers
described in this paragraph are centers that—
340
‘‘(A) assist families of children with disabilities
or special health care needs to make informed
choices about health care in order to promote good
treatment decisions, cost-effectiveness, and improved
health outcomes for such children;
‘‘(B) provide information regarding the health
care needs of, and resources available for, children
with disabilities or special health care needs;
‘‘(C) identify successful health delivery models
for such children;
‘‘(D) develop with representatives of health care
providers, managed care organizations, health care
purchasers, and appropriate State agencies a model
for collaboration between families of such children
and health professionals;
‘‘(E) provide training and guidance regarding
caring for such children;
‘‘(F) conduct outreach activities to the families
of such children, health professionals, schools, and
other appropriate entities and individuals; and
‘‘(G) are staffed by families of children with
disabilities or special health care needs who have ex-
pertise in Federal and State public and private
health care systems and health professionals.
341
‘‘(3) The provisions of this title that are applicable
to the funds made available to the Secretary under section
502(a)(1) apply in the same manner to funds made avail-
able to the Secretary under paragraph (1).’’.
(e) RESTORATION OF MEDICAID ELIGIBILITY FOR
CERTAIN SSI BENEFICIARIES.—
(1) 
IN
GENERAL.—Section
1902(a)(10)(A)(i)(II) 
(42 
U.S.C.
1396a(a)(10)(A)(i)(II)) is amended—
(A) by inserting ‘‘(aa)’’ after ‘‘(II)’’;
(B) by striking ‘‘or who are’’ and inserting
‘‘(bb) who are’’; and
(C) by inserting before the comma at the
end the following: ‘‘, or (cc) who are under 21
years of age and with respect to whom supple-
mental security income benefits would be paid
under title XVI but for section 1611(c)(7)’’.
(2) EFFECTIVE DATE.—The amendments made
by paragraph (1) apply to medical assistance for
items and services furnished on or after October 1,
2000, except that a State may elect to apply such
amendments to items and services furnished on or
after any date after the date of the enactment of
this section and before October 1, 2000.
342
TITLE VIII—STATE CHILDREN’S
HEALTH INSURANCE PROGRAM
SEC. 801. SPECIAL RULE FOR REDISTRIBUTION AND AVAIL-
ABILITY OF UNUSED FISCAL YEAR 1998 AND
1999 SCHIP ALLOTMENTS.
(a) CHANGE IN RULES FOR REDISTRIBUTION AND
RETENTION OF UNUSED SCHIP ALLOTMENTS FOR FIS-
CAL YEARS 1998 AND 1999.—Section 2104 (42 U.S.C.
1397dd) is amended by adding at the end the following
new subsection:
‘‘(g) RULE FOR REDISTRIBUTION AND EXTENDED
AVAILABILITY OF FISCAL YEARS 1998 AND 1999 ALLOT-
MENTS.—
‘‘(1) AMOUNT REDISTRIBUTED.—
‘‘(A) IN GENERAL.—In the case of a State
that expends all of its allotment under sub-
section (b) or (c) for fiscal year 1998 by the
end of fiscal year 2000, or for fiscal year 1999
by the end of fiscal year 2001, the Secretary
shall redistribute to the State under subsection
(f) (from the fiscal year 1998 or 1999 allot-
ments of other States, respectively, as deter-
mined by the application of paragraphs (2) and
(3) with respect to the respective fiscal year))
the following amount:
343
‘‘(i) STATE.—In the case of 1 of the
50 States or the District of Columbia, with
respect to—
‘‘(I) the fiscal year 1998 allot-
ment, the amount by which the
State’s expenditures under this title in
fiscal years 1998, 1999, and 2000 ex-
ceed the State’s allotment for fiscal
year 1998 under subsection (b); or
‘‘(II) the fiscal year 1999 allot-
ment, the amount by which the
State’s expenditures under this title in
fiscal years 1999, 2000, and 2001 ex-
ceed the State’s allotment for fiscal
year 1999 under subsection (b).
‘‘(ii) TERRITORY.—In the case of a
commonwealth or territory described in
subsection (c)(3), an amount that bears
the same ratio to 1.05 percent of the total
amount described in paragraph (2)(B)(i)(I)
as the ratio of the commonwealth’s or ter-
ritory’s fiscal year 1998 or 1999 allotment
under subsection (c) (as the case may be)
bears to the total of all such allotments for
such fiscal year under such subsection.
344
‘‘(B) EXPENDITURE RULES.—An amount
redistributed to a State under this paragraph
with respect to fiscal year 1998 or 1999—
‘‘(i) shall not be included in the deter-
mination of the State’s allotment for any
fiscal year under this section;
‘‘(ii) notwithstanding subsection (e),
shall remain available for expenditure by
the State through the end of fiscal year
2002; and
‘‘(iii) shall be counted as being ex-
pended with respect to a fiscal year allot-
ment in accordance with applicable regula-
tions of the Secretary.
‘‘(2) EXTENSION OF AVAILABILITY OF PORTION
OF UNEXPENDED FISCAL YEARS 1998 AND 1999 AL-
LOTMENTS.—
‘‘(A) IN GENERAL.—Notwithstanding sub-
section (e):
‘‘(i) FISCAL YEAR 1998 ALLOTMENT.—
Of the amounts allotted to a State pursu-
ant to this section for fiscal year 1998 that
were not expended by the State by the end
of fiscal year 2000, the amount specified in
subparagraph (B) for fiscal year 1998 for
345
such State shall remain available for ex-
penditure by the State through the end of
fiscal year 2002.
‘‘(ii) 
FISCAL
YEAR
1999
ALLOT-
MENT.—Of the amounts allotted to a State
pursuant to this subsection for fiscal year
1999 that were not expended by the State
by the end of fiscal year 2001, the amount
specified in subparagraph (B) for fiscal
year 1999 for such State shall remain
available for expenditure by the State
through the end of fiscal year 2002.
‘‘(B) AMOUNT REMAINING AVAILABLE FOR
EXPENDITURE.—The amount specified in this
subparagraph for a State for a fiscal year is
equal to—
‘‘(i) the amount by which (I) the total
amount available for redistribution under
subsection (f) from the allotments for that
fiscal year, exceeds (II) the total amounts
redistributed under paragraph (1) for that
fiscal year; multiplied by
‘‘(ii) the ratio of the amount of such
State’s unexpended allotment for that fis-
346
cal year to the total amount described in
clause (i)(I) for that fiscal year.
‘‘(C) USE OF UP TO 10 PERCENT OF RE-
TAINED 1998 ALLOTMENTS FOR OUTREACH AC-
TIVITIES.—Notwithstanding 
section
2105(c)(2)(A), with respect to any State de-
scribed in subparagraph (A)(i), the State may
use up to 10 percent of the amount specified in
subparagraph (B) for fiscal year 1998 for ex-
penditures for outreach activities approved by
the Secretary.
‘‘(3) DETERMINATION OF AMOUNTS.—For pur-
poses of calculating the amounts described in para-
graphs (1) and (2) relating to the allotment for fis-
cal year 1998 or fiscal year 1999, the Secretary
shall use the amounts reported by the States not
later than November 30, 2000, or November 30,
2001, respectively, on HCFA Form 64 or HCFA
Form 21, as approved by the Secretary.’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall take effect as if included in the enact-
ment of section 4901 of BBA (111 Stat. 552).
347
SEC. 802. AUTHORITY TO PAY MEDICAID EXPANSION SCHIP
COSTS FROM TITLE XXI APPROPRIATION.
(a) AUTHORITY TO PAY MEDICAID EXPANSION
SCHIP COSTS FROM TITLE XXI APPROPRIATION.—Sec-
tion 2105(a) (42 U.S.C. 1397ee(a)) is amended—
(1) by redesignating subparagraphs (A) through
(D) of paragraph (2) as clauses (i) through (iv), re-
spectively, and indenting appropriately;
(2) by redesignating paragraph (1) as subpara-
graph (C), and indenting appropriately;
(3) by redesignating paragraph (2) as subpara-
graph (D), and indenting appropriately;
(4) by striking ‘‘(a) IN GENERAL.—’’ and the
remainder of the text that precedes subparagraph
(C), as so redesignated, and inserting the following:
‘‘(a) PAYMENTS.—
‘‘(1) IN GENERAL.—Subject to the succeeding
provisions of this section, the Secretary shall pay to
each State with a plan approved under this title,
from its allotment under section 2104, an amount
for each quarter equal to the enhanced FMAP (or,
in the case of expenditures described in subpara-
graph (B), the Federal medical assistance percent-
age (as defined in the first sentence of section
1905(b))) of expenditures in the quarter—
348
‘‘(A) for child health assistance under the
plan for targeted low-income children in the
form of providing medical assistance for which
payment is made on the basis of an enhanced
FMAP under the fourth sentence of section
1905(b);
‘‘(B) for the provision of medical assist-
ance on behalf of a child during a presumptive
eligibility period under section 1920A;’’; and
(5) by adding after subparagraph (D), as so re-
designated, the following new paragraph:
‘‘(2) ORDER OF PAYMENTS.—Payments under
paragraph (1) from a State’s allotment shall be
made in the following order:
‘‘(A) First, for expenditures for items de-
scribed in paragraph (1)(A).
‘‘(B) Second, for expenditures for items
described in paragraph (1)(B).
‘‘(C) Third, for expenditures for items de-
scribed in paragraph (1)(C).
‘‘(D) Fourth, for expenditures for items
described in paragraph (1)(D).’’.
(b) ELIMINATION
OF REQUIREMENT TO REDUCE
TITLE
XXI ALLOTMENT
BY
MEDICAID
EXPANSION
349
SCHIP COSTS.—Section 2104 (42 U.S.C. 1397dd) is
amended by striking subsection (d).
(c) AUTHORITY TO TRANSFER TITLE XXI APPRO-
PRIATIONS TO TITLE XIX APPROPRIATION ACCOUNT AS
REIMBURSEMENT
FOR MEDICAID EXPENDITURES
FOR
MEDICAID
EXPANSION
SCHIP SERVICES.—Notwith-
standing any other provision of law, all amounts appro-
priated under title XXI and allotted to a State pursuant
to subsection (b) or (c) of section 2104 of the Social Secu-
rity Act (42 U.S.C. 1397dd) for fiscal years 1998 through
2000 (including any amounts that, but for this provision,
would be considered to have expired) and not expended
in providing child health assistance or related services for
which payment may be made pursuant to subparagraph
(C) or (D) of section 2105(a)(1) of such Act (42 U.S.C.
1397ee(a)(1)) (as amended by subsection (a)), shall be
available to reimburse the Grants to States for Medicaid
account in an amount equal to the total payments made
to such State under section 1903(a) of such Act (42
U.S.C. 1396b(a)) for expenditures in such years for med-
ical assistance described in subparagraphs (A) and (B) of
section 2105(a)(1) of such Act (42 U.S.C. 1397ee(a)(1)
(as so amended).
(d) CONFORMING AMENDMENTS.—
350
(1) Section 1905(b) (42 U.S.C. 1396d(b)) is
amended in the fourth sentence by striking ‘‘the
State’s allotment under section 2104 (not taking
into account reductions under section 2104(d)(2))
for the fiscal year reduced by the amount of any
payments made under section 2105 to the State
from such allotment for such fiscal year’’ and insert-
ing ‘‘the State’s available allotment under section
2104’’.
(2) 
Section 
1905(u)(1)(B) 
(42 
U.S.C.
1396d(u)(1)(B)) is amended by striking ‘‘and sec-
tion 2104(d)’’.
(3) Section 2104 (42 U.S.C. 1397dd), as
amended by subsection (b), is further amended—
(A) in subsection (b)(1), by striking ‘‘and
subsection (d)’’; and
(B) in subsection (c)(1), by striking ‘‘sub-
ject to subsection (d),’’.
(4) Section 2105(c) (42 U.S.C. 1397ee(c)) is
amended—
(A) in paragraph (2)(A), by striking all
that follows ‘‘Except as provided in this para-
graph,’’ and inserting ‘‘the amount of payment
that may be made under subsection (a) for a
fiscal year for expenditures for items described
351
in paragraph (1)(D) of such subsection shall
not exceed 10 percent of the total amount of ex-
penditures for which payment is made under
subparagraphs (A), (C), and (D) of paragraph
(1) of such subsection.’’;
(B) in paragraph (2)(B), by striking ‘‘de-
scribed in subsection (a)(2)’’ and inserting ‘‘de-
scribed in subsection (a)(1)(D)’’; and
(C) in paragraph (6)(B), by striking ‘‘Ex-
cept as otherwise provided by law,’’ and insert-
ing ‘‘Except as provided in subparagraph (A) or
(B) of subsection (a)(1) or any other provision
of law,’’.
(5) Section 2110(a) (42 U.S.C. 1397jj(a)) is
amended by striking ‘‘section 2105(a)(2)(A)’’ and
inserting ‘‘section 2105(a)(1)(D)(i)’’.
(e) 
TECHNICAL
AMENDMENT.—Section
2105(d)(2)(B)(ii) (42 U.S.C. 1397ee(d)(2)(B)(ii)) is
amended by striking ‘‘enhanced FMAP under section
1905(u)’’ and inserting ‘‘enhanced FMAP under the
fourth sentence of section 1905(b)’’.
(f) EFFECTIVE DATE.—The amendments made by
this section shall be effective as if included in the enact-
ment of section 4901 of the BBA (111 Stat. 552).
352
SEC. 803. OPTIONAL COVERAGE OF CERTAIN LEGAL IMMI-
GRANTS UNDER SCHIP.
(a) IN GENERAL.—Section 2107(e)(1) (42 U.S.C.
1397gg(e)(1)) as amended in section 707(d), is further
amended by adding at the end the following new subpara-
graph:
‘‘(E) Section 1903(v)(4) (relating to op-
tional coverage of categories of lawfully residing
alien children) but only if the State has elected
to apply such section to the category of children
under title XIX.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) takes effect October 1, 2000, and applies
to medical assistance and child health assistance furnished
on or after such date.
TITLE IX—OTHER PROVISIONS
Subtitle A—PACE Program
SEC. 901. EXTENSION OF TRANSITION FOR CURRENT WAIV-
ERS.
Section 4803(d)(2) of BBA is amended—
(1) in subparagraph (A), by striking ‘‘24
months’’ and inserting ‘‘36 months’’;
(2) in subparagraph (A), by striking ‘‘the initial
effective date of regulations described in subsection
(a)’’ and inserting ‘‘July 1, 2000’’; and
353
(3) in subparagraph (B), by striking ‘‘3 years’’
and inserting ‘‘4 years’’.
SEC. 902. CONTINUING OF CERTAIN OPERATING ARRANGE-
MENTS PERMITTED.
(a) IN GENERAL.—Section 1894(f)(2) (42 U.S.C.
1395eee(f)(2)) is amended by adding at the end the fol-
lowing new subparagraph:
‘‘(C) CONTINUATION
OF
MODIFICATIONS
OR WAIVERS OF OPERATIONAL REQUIREMENTS
UNDER DEMONSTRATION STATUS.—If a PACE
program operating under demonstration author-
ity has contractual or other operating arrange-
ments which are not otherwise recognized in
regulation and which were in effect on July 1,
2000, the Secretary (in close consultation with,
and with the concurrence of, the State admin-
istering agency) shall permit any such program
to continue such arrangements so long as such
arrangements are found by the Secretary and
the State to be reasonably consistent with the
objectives of the PACE program.’’.
(b) CONFORMING AMENDMENT.—Section 1934(f)(2)
(42 U.S.C. 1396u–4(f)(2)) is amended by adding at the
end the following new subparagraph:
354
‘‘(C) CONTINUATION
OF
MODIFICATIONS
OR WAIVERS OF OPERATIONAL REQUIREMENTS
UNDER DEMONSTRATION STATUS.—If a PACE
program operating under demonstration author-
ity has contractual or other operating arrange-
ments which are not otherwise recognized in
regulation and which were in effect on July 1
2000, the Secretary (in close consultation with,
and with the concurrence of, the State admin-
istering agency) shall permit any such program
to continue such arrangements so long as such
arrangements are found by the Secretary and
the State to be reasonably consistent with the
objectives of the PACE program.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall be effective as included in the enactment
of BBA.
SEC. 903. FLEXIBILITY IN EXERCISING WAIVER AUTHORITY.
In 
applying 
sections 
1894(f)(2)(B) 
and
1934(f)(2)(B) of the Social Security Act (42 U.S.C.
1395eee(f)(2)(B), 1396u–4(f)(2)(B)), the Secretary of
Health and Human Services—
(1) shall approve or deny a request for a modi-
fication or a waiver of provisions of the PACE pro-
355
tocol not later than 90 days after the date the Sec-
retary receives the request; and
(2) may exercise authority to modify or waive
such provisions in a manner that responds promptly
to the needs of PACE programs relating to areas of
employment and the use of community-based pri-
mary care physicians.
Subtitle B—Outreach to Eligible
Low-Income 
Medicare 
Bene-
ficiaries
SEC. 911. OUTREACH ON AVAILABILITY OF MEDICARE
COST-SHARING 
ASSISTANCE 
TO 
ELIGIBLE
LOW-INCOME MEDICARE BENEFICIARIES.
(a) OUTREACH.—
(1) IN GENERAL.—Title XI (42 U.S.C. 1301 et
seq.) is amended by inserting after section 1143 the
following new section:
‘‘OUTREACH EFFORTS TO INCREASE AWARENESS OF THE
AVAILABILITY OF MEDICARE COST-SHARING
‘‘SEC. 1144. (a) OUTREACH.—
‘‘(1) IN GENERAL.—The Commissioner of So-
cial Security (in this section referred to as the ‘Com-
missioner’) shall conduct outreach efforts to—
‘‘(A) identify individuals entitled to bene-
fits under the medicare program under title
XVIII who may be eligible for medical assist-
356
ance for payment of the cost of medicare cost-
sharing under the medicaid program pursuant
to sections 1902(a)(10)(E) and 1933; and
‘‘(B) notify such individuals of the avail-
ability of such medical assistance under such
sections.
‘‘(2) CONTENT
OF
NOTICE.—Any notice fur-
nished under paragraph (1) shall state that eligi-
bility for medicare cost-sharing assistance under
such sections is conditioned upon—
‘‘(A) the individual providing to the State
information about income and resources (in the
case of an individual residing in a State that
imposes an assets test for such eligibility); and
‘‘(B) meeting the applicable eligibility cri-
teria.
‘‘(b) COORDINATION WITH STATES.—
‘‘(1) IN GENERAL.—In conducting the outreach
efforts under this section, the Commissioner shall—
‘‘(A) furnish the agency of each State re-
sponsible for the administration of the medicaid
program and any other appropriate State agen-
cy with information consisting of the name and
address of individuals residing in the State that
the Commissioner determines may be eligible
357
for medical assistance for payment of the cost
of medicare cost-sharing under the medicaid
program pursuant to sections 1902(a)(10)(E)
and 1933; and
‘‘(B) update any such information not less
frequently than once per year.
‘‘(2) INFORMATION
IN
PERIODIC
UPDATES.—
The periodic updates described in paragraph (1)(B)
shall include information on individuals who are or
may be eligible for the medical assistance described
in paragraph (1)(A) because such individuals have
experienced reductions in benefits under title II.’’.
(2) AMENDMENT
TO
TITLE
XIX.—Section
1905(p) (42 U.S.C. 1396d(p)) is amended by adding
at the end the following new paragraph:
‘‘(5) For provisions relating to outreach efforts to in-
crease awareness of the availability of medicare cost-shar-
ing, see section 1144.’’.
(b) GAO REPORT.—The Comptroller General of the
United States shall conduct a study of the impact of sec-
tion 1144 of the Social Security Act (as added by sub-
section (a)(1)) on the enrollment of individuals for medi-
care cost-sharing under the medicaid program. Not later
than 18 months after the date that the Commissioner of
Social Security first conducts outreach under section 1144
358
of such Act, the Comptroller General shall submit to Con-
gress a report on such study. The report shall include such
recommendations for legislative changes as the Comp-
troller General deems appropriate.
(c) EFFECTIVE DATE.—The amendments made by
subsections (a) shall take effect one year after the date
of the enactment of this Act.
Subtitle C—Maternal and Child
Health Block Grant
SEC. 921. INCREASE IN AUTHORIZATION OF APPROPRIA-
TIONS FOR THE MATERNAL AND CHILD
HEALTH SERVICES BLOCK GRANT.
(a) IN
GENERAL.—Section 501(a) (42 U.S.C.
701(a)) is amended in the matter preceding paragraph (1)
by striking ‘‘$705,000,000 for fiscal year 1994’’ and in-
serting ‘‘$850,000,000 for fiscal year 2001’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) takes effect on October 1, 2000.
Subtitle D—Diabetes
SEC. 931. INCREASE IN APPROPRIATIONS FOR SPECIAL DI-
ABETES PROGRAMS FOR TYPE I DIABETES
AND INDIANS.
(a) SPECIAL DIABETES PROGRAMS FOR TYPE I DIA-
BETES.—Section 330B(b) of the Public Health Service
Act (42 U.S.C. 254c–2(b)) is amended—
359
(1) by striking ‘‘Notwithstanding’’ and insert-
ing the following:
‘‘(1) 
TRANSFERRED
FUNDS.—Notwith-
standing’’; and
(2) by adding at the end the following:
‘‘(2) APPROPRIATIONS.—For the purpose of
making grants under this section, there is appro-
priated, out of any funds in the Treasury not other-
wise appropriated—
‘‘(A) $70,000,000 for each of fiscal years
2001 and 2002 (which shall be combined with
amounts transferred under paragraph (1) for
each such fiscal years); and
‘‘(B) $100,000,000 for fiscal year 2003.’’.
(b) SPECIAL DIABETES PROGRAMS FOR INDIANS.—
Section 330C(c) of such Act (42 U.S.C. 254c–3(c)) is
amended—
(1) by striking ‘‘Notwithstanding’’ and insert-
ing the following:
‘‘(1) 
TRANSFERRED
FUNDS.—Notwith-
standing’’; and
(2) by adding at the end the following:
‘‘(2) APPROPRIATIONS.—For the purpose of
making grants under this section, there is appro-
360
priated, out of any money in the Treasury not other-
wise appropriated—
‘‘(A) $70,000,000 for each of fiscal years
2001 and 2002 (which shall be combined with
amounts transferred under paragraph (1) for
each such fiscal years); and
‘‘(B) $100,000,000 for fiscal year 2003.’’.
(c) EXTENSION OF FINAL REPORT ON GRANT PRO-
GRAMS.—Section 4923(b)(2) of BBA is amended by strik-
ing ‘‘2002’’ and inserting ‘‘2003’’.
SEC. 932. APPROPRIATIONS FOR RICKY RAY HEMOPHILIA
RELIEF FUND.
Section 101(e) of the Ricky Ray Hemophilia Relief
Fund Act of 1998 (42 U.S.C. 300c–22 note) is amended
by adding at the end the following: ‘‘There is appropriated
to the Fund $475,000,000 for fiscal year 2001, to remain
available until expended.’’.
Æ