Note this is a hand enrollment pursuant to Public Law 105–32.
H. R. 2015
One Hundred Fifth Congress
of the
United States of America
AT THE FIRST SESSION
Begun and held at the City of Washington on Tuesday,
the seventh day of January, one thousand nine hundred and ninety-seven
An Act
To provide for reconciliation pursuant to subsections (b)(1) and (c) of section 105
of the concurrent resolution on the budget for fiscal year 1998.
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Balanced Budget Act of 1997’’.
SEC. 2. TABLE OF TITLES.
This Act is organized into titles as follows:
Title I—Food Stamp Provisions
Title II—Housing and Related Provisions
Title III—Communications and Spectrum Allocation Provisions
Title IV—Medicare, Medicaid, and Children’s Health Provisions
Title V—Welfare and Related Provisions
Title VI—Education and Related Provisions
Title VII—Civil Service Retirement and Related Provisions
Title VIII—Veterans and Related Provisions
Title IX—Asset Sales, User Fees, and Miscellaneous Provisions
Title X—Budget Enforcement and Process Provisions
Title XI—District of Columbia Revitalization
TITLE I—FOOD STAMP PROVISIONS
SEC. 1001. EXEMPTION.
Section 6(o) of the Food Stamp Act of 1977 (7 U.S.C. 2015(o))
is amended—
(1) in paragraph (2)(D), by striking ‘‘or (5)’’ and inserting
‘‘(5), or (6)’’;
(2) by redesignating paragraph (6) as paragraph (7); and
(3) by inserting after paragraph (5) the following:
‘‘(6) 15-PERCENT EXEMPTION.—
‘‘(A) DEFINITIONS.—In this paragraph:
‘‘(i) CASELOAD.—The term ‘caseload’ means the
average monthly number of individuals receiving food
stamps during the 12-month period ending the preced-
ing June 30.
‘‘(ii) COVERED
INDIVIDUAL.—The term ‘covered
individual’ means a food stamp recipient, or an individ-
ual denied eligibility for food stamp benefits solely
due to paragraph (2), who—
‘‘(I) is not eligible for an exception under para-
graph (3);
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‘‘(II) does not reside in an area covered by
a waiver granted under paragraph (4);
‘‘(III) is not complying with subparagraph (A),
(B), or (C) of paragraph (2);
‘‘(IV) is not receiving food stamp benefits dur-
ing the 3 months of eligibility provided under para-
graph (2); and
‘‘(V) is not receiving food stamp benefits under
paragraph (5).
‘‘(B) GENERAL
RULE.—Subject to subparagraphs (C)
through (G), a State agency may provide an exemption
from the requirements of paragraph (2) for covered individ-
uals.
‘‘(C) FISCAL YEAR 1998.—Subject to subparagraphs (E)
and (G), for fiscal year 1998, a State agency may provide
a number of exemptions such that the average monthly
number of the exemptions in effect during the fiscal year
does not exceed 15 percent of the number of covered individ-
uals in the State in fiscal year 1998, as estimated by
the Secretary, based on the survey conducted to carry
out section 16(c) for fiscal year 1996 and such other factors
as the Secretary considers appropriate due to the timing
and limitations of the survey.
‘‘(D) SUBSEQUENT FISCAL YEARS.—Subject to subpara-
graphs (E) through (G), for fiscal year 1999 and each subse-
quent fiscal year, a State agency may provide a number
of exemptions such that the average monthly number of
the exemptions in effect during the fiscal year does not
exceed 15 percent of the number of covered individuals
in the State, as estimated by the Secretary under subpara-
graph (C), adjusted by the Secretary to reflect changes
in the State’s caseload and the Secretary’s estimate of
changes in the proportion of food stamp recipients covered
by waivers granted under paragraph (4).
‘‘(E) CASELOAD
ADJUSTMENTS.—The Secretary shall
adjust the number of individuals estimated for a State
under subparagraph (C) or (D) during a fiscal year if the
number of food stamp recipients in the State varies from
the State’s caseload by more than 10 percent, as determined
by the Secretary.
‘‘(F) EXEMPTION
ADJUSTMENTS.—During fiscal year
1999 and each subsequent fiscal year, the Secretary shall
increase or decrease the number of individuals who may
be granted an exemption by a State agency under this
paragraph to the extent that the average monthly number
of exemptions in effect in the State for the preceding fiscal
year under this paragraph is lesser or greater than the
average monthly number of exemptions estimated for the
State agency for such preceding fiscal year under this
paragraph.
‘‘(G) REPORTING REQUIREMENT.—A State agency shall
submit such reports to the Secretary as the Secretary deter-
mines are necessary to ensure compliance with this para-
graph.’’.
H. R. 2015—3
SEC. 1002. ADDITIONAL FUNDING FOR EMPLOYMENT AND TRAINING.
(a) IN GENERAL.—Section 16(h) of the Food Stamp Act of 1977
(7 U.S.C. 2025(h)) is amended by striking paragraph (1) and insert-
ing the following:
‘‘(1) IN GENERAL.—
‘‘(A) AMOUNTS.—To carry out employment and training
programs, the Secretary shall reserve for allocation to State
agencies, to remain available until expended, from funds
made available for each fiscal year under section 18(a)(1)
the amount of—
‘‘(i) for fiscal year 1996, $75,000,000;
‘‘(ii) for fiscal year 1997, $79,000,000;
‘‘(iii) for fiscal year 1998—
‘‘(I) $81,000,000; and
‘‘(II) an additional amount of $131,000,000;
‘‘(iv) for fiscal year 1999—
‘‘(I) $84,000,000; and
‘‘(II) an additional amount of $131,000,000;
‘‘(v) for fiscal year 2000—
‘‘(I) $86,000,000; and
‘‘(II) an additional amount of $131,000,000;
‘‘(vi) for fiscal year 2001—
‘‘(I) $88,000,000; and
‘‘(II) an additional amount of $131,000,000;
and
‘‘(vii) for fiscal year 2002—
‘‘(I) $90,000,000; and
‘‘(II) an additional amount of $75,000,000.
‘‘(B) ALLOCATION.—
‘‘(i) ALLOCATION
FORMULA.—The Secretary shall
allocate the amounts reserved under subparagraph (A)
among the State agencies using a reasonable formula,
as determined and adjusted by the Secretary each fiscal
year, to reflect—
‘‘(I) changes in each State’s caseload (as
defined in section 6(o)(6)(A));
‘‘(II) for fiscal year 1998, the portion of food
stamp recipients who reside in each State who
are not eligible for an exception under section
6(o)(3); and
‘‘(III) for each of fiscal years 1999 through
2002, the portion of food stamp recipients who
reside in each State who are not eligible for an
exception under section 6(o)(3) and who—
‘‘(aa) do not reside in an area subject to
a waiver granted by the Secretary under sec-
tion 6(o)(4); or
‘‘(bb) do reside in an area subject to a
waiver granted by the Secretary under section
6(o)(4), if the State agency provides employ-
ment and training services in the area to food
stamp recipients who are not eligible for an
exception under section 6(o)(3).
‘‘(ii) ESTIMATED
FACTORS.—The Secretary shall
estimate the portion of food stamp recipients who
H. R. 2015—4
reside in each State who are not eligible for an excep-
tion under section 6(o)(3) based on the survey con-
ducted to carry out subsection (c) for fiscal year 1996
and such other factors as the Secretary considers
appropriate due to the timing and limitations of the
survey.
‘‘(iii) REPORTING
REQUIREMENT.—A State agency
shall submit such reports to the Secretary as the Sec-
retary determines are necessary to ensure compliance
with this paragraph.
‘‘(C) REALLOCATION.—If a State agency will not expend
all of the funds allocated to the State agency for a fiscal
year under subparagraph (B), the Secretary shall reallocate
the unexpended funds to other States (during the fiscal
year or the subsequent fiscal year) as the Secretary consid-
ers appropriate and equitable.
‘‘(D) 
MINIMUM
ALLOCATION.—Notwithstanding
subparagraph (B), the Secretary shall ensure that each
State agency operating an employment and training pro-
gram shall receive not less than $50,000 for each fiscal
year.
‘‘(E) USE OF FUNDS.—Of the amount of funds a State
agency receives under subparagraphs (A) through (D) for
a fiscal year, not less than 80 percent of the funds shall
be used by the State agency during the fiscal year to
serve food stamp recipients who—
‘‘(i) are not eligible for an exception under section
6(o)(3); and
‘‘(ii) are placed in and comply with a program
described in subparagraph (B) or (C) of section 6(o)(2).
‘‘(F) MAINTENANCE OF EFFORT.—To receive an alloca-
tion of an additional amount made available under sub-
clause (II) of each of clauses (iii) through (vii) of subpara-
graph (A), a State agency shall maintain the expenditures
of the State agency for employment and training programs
and workfare programs for any fiscal year under paragraph
(2), and administrative expenses described in section
20(g)(1), at a level that is not less than the level of the
expenditures by the State agency to carry out the programs
and such expenses for fiscal year 1996.
‘‘(G) COMPONENT COSTS.—The Secretary shall monitor
State agencies’ expenditure of funds for employment and
training programs provided under this paragraph, includ-
ing the costs of individual components of State agencies’
programs. The Secretary may determine the reimbursable
costs of employment and training components, and, if the
Secretary makes such a determination, the Secretary shall
determine that the amounts spent or planned to be spent
on the components reflect the reasonable cost of efficiently
and economically providing components appropriate to
recipient employment and training needs, taking into
account, as the Secretary deems appropriate, prior expendi-
tures on the components, the variability of costs among
State agencies’ components, the characteristics of the
recipients to be served, and such other factors as the Sec-
retary considers necessary.’’.
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(b) REPORT TO CONGRESS.—Not later than 30 months after
the date of enactment of this Act, the Secretary of Agriculture
shall submit to the Committee on Agriculture of the House of
Representatives and the Committee on Agriculture, Nutrition, and
Forestry of the Senate a report regarding whether the amounts
made available under section 16(h)(1)(A) of the Food Stamp Act
of 1977 (as a result of the amendment made by subsection (a))
have been used by State agencies to increase the number of work
slots for recipients subject to section 6(o) of the Food Stamp Act
of 1977 (7 U.S.C. 2015(o)) in employment and training programs
and workfare in the most efficient and effective manner practicable.
SEC. 1003. DENIAL OF FOOD STAMPS FOR PRISONERS.
(a) STATE PLANS.—
(1) IN GENERAL.—Section 11(e) of the Food Stamp Act
of 1977 (7 U.S.C. 2020(e)) is amended by striking paragraph
(20) and inserting the following:
‘‘(20) that the State agency shall establish a system and
take action on a periodic basis—
‘‘(A) to verify and otherwise ensure that an individual
does not receive coupons in more than 1 jurisdiction within
the State; and
‘‘(B) to verify and otherwise ensure that an individual
who is placed under detention in a Federal, State, or local
penal, correctional, or other detention facility for more than
30 days shall not be eligible to participate in the food
stamp program as a member of any household, except
that—
‘‘(i) the Secretary may determine that extraor-
dinary circumstances make it impracticable for the
State agency to obtain information necessary to dis-
continue inclusion of the individual; and
‘‘(ii) a State agency that obtains information col-
lected under section 1611(e)(1)(I)(i)(I) of the Social
Security Act (42 U.S.C. 1382(e)(1)(I)(i)(I)) pursuant to
section 1611(e)(1)(I)(ii)(II) of that Act (42 U.S.C.
1382(e)(1)(I)(ii)(II)), or under another program deter-
mined by the Secretary to be comparable to the pro-
gram carried out under that section, shall be consid-
ered in compliance with this subparagraph.’’.
(2) LIMITS
ON
DISCLOSURE
AND
USE
OF
INFORMATION.—
Section 11(e)(8)(E) of the Food Stamp Act of 1977 (7 U.S.C.
2020(e)(8)(E)) is amended by striking ‘‘paragraph (16)’’ and
inserting ‘‘paragraph (16) or (20)(B)’’.
(3) EFFECTIVE DATE.—
(A) IN GENERAL.—Except as provided in subparagraph
(B), the amendments made by this subsection shall take
effect on the date that is 1 year after the date of enactment
of this Act.
(B) EXTENSION.—The Secretary of Agriculture may
grant a State an extension of time to comply with the
amendments made by this subsection, not to exceed beyond
the date that is 2 years after the date of enactment of
this Act, if the chief executive officer of the State submits
a request for the extension to the Secretary—
H. R. 2015—6
(i) stating the reasons why the State is not able
to comply with the amendments made by this sub-
section by the date that is 1 year after the date of
enactment of this Act;
(ii) providing evidence that the State is making
a good faith effort to comply with the amendments
made by this subsection as soon as practicable; and
(iii) detailing a plan to bring the State into compli-
ance with the amendments made by this subsection
as soon as practicable but not later than the date
of the requested extension.
(b) INFORMATION SHARING.—Section 11 of the Food Stamp Act
of 1977 (7 U.S.C. 2020) is amended by adding at the end the
following:
‘‘(q) DENIAL OF FOOD STAMPS FOR PRISONERS.—The Secretary
shall assist States, to the maximum extent practicable, in
implementing a system to conduct computer matches or other sys-
tems to prevent prisoners described in section 11(e)(20)(B) from
participating in the food stamp program as a member of any house-
hold.’’.
SEC. 1004. NUTRITION EDUCATION.
Section 11(f) of the Food Stamp Act of 1977 (7 U.S.C. 2020(f))
is amended—
(1) by striking ‘‘(f) To encourage’’ and inserting the follow-
ing:
‘‘(f) NUTRITION EDUCATION.—
‘‘(1) IN GENERAL.—To encourage’’; and
(2) by adding at the end the following:
‘‘(2) GRANTS.—
‘‘(A) IN GENERAL.—The Secretary shall make available
not more than $600,000 for each of fiscal years 1998
through 2001 to pay the Federal share of grants made
to eligible private nonprofit organizations and State agen-
cies to carry out subparagraph (B).
‘‘(B) ELIGIBILITY.—A private nonprofit organization or
State agency shall be eligible to receive a grant under
subparagraph (A) if the organization or agency agrees—
‘‘(i) to use the funds to direct a collaborative effort
to coordinate and integrate nutrition education into
health, nutrition, social service, and food distribution
programs for food stamp participants and other low-
income households; and
‘‘(ii) to design the collaborative effort to reach large
numbers of food stamp participants and other low-
income households through a network of organizations,
including schools, child care centers, farmers’ markets,
health clinics, and outpatient education services.
‘‘(C) PREFERENCE.—In deciding between 2 or more pri-
vate nonprofit organizations or State agencies that are
eligible to receive a grant under subparagraph (B), the
Secretary shall give a preference to an organization or
agency that conducted a collaborative effort described in
subparagraph (B) and received funding for the collaborative
effort from the Secretary before the date of enactment
of this paragraph.
‘‘(D) FEDERAL SHARE.—
H. R. 2015—7
‘‘(i) IN GENERAL.—Subject to subparagraph (E), the
Federal share of a grant under this paragraph shall
be 50 percent.
‘‘(ii) NO IN-KIND CONTRIBUTIONS.—The non-Federal
share of a grant under this paragraph shall be in
cash.
‘‘(iii) PRIVATE FUNDS.—The non-Federal share of
a grant under this paragraph may include amounts
from private nongovernmental sources.
‘‘(E) LIMIT ON INDIVIDUAL GRANT.—The Federal share
of a grant under subparagraph (A) may not exceed $200,000
for a fiscal year.’’.
SEC. 1005. REGULATIONS; EFFECTIVE DATE.
(a) REGULATIONS.—Not later than 1 year after the date of
enactment of this Act, the Secretary of Agriculture shall promulgate
such regulations as are necessary to implement the amendments
made by this title.
(b) EFFECTIVE DATE.—The amendments made by sections 1001
and 1002 take effect on October 1, 1997, without regard to whether
regulations have been promulgated to implement the amendments
made by such sections.
TITLE II—HOUSING AND RELATED
PROVISIONS
SEC. 2001. TABLE OF CONTENTS.
The table of contents for this title is as follows:
TITLE II—HOUSING AND RELATED PROVISIONS
Sec. 2001. Table of contents.
Sec. 2002. Extension of foreclosure avoidance and borrower assistance provisions
for FHA single family housing mortgage insurance program.
Sec. 2003. Adjustment of maximum monthly rents for certain dwelling units in new
construction and substantial or moderate rehabilitation projects assisted
under section 8 rental assistance program.
Sec. 2004. Adjustment of maximum monthly rents for non-turnover dwelling units
assisted under section 8 rental assistance program.
SEC. 2002. EXTENSION OF FORECLOSURE AVOIDANCE AND BORROWER
ASSISTANCE PROVISIONS FOR FHA SINGLE FAMILY
HOUSING MORTGAGE INSURANCE PROGRAM.
Section 407 of The Balanced Budget Downpayment Act, I (12
U.S.C. 1710 note) is amended—
(1) in subsection (c)—
(A) by striking ‘‘only’’; and
(B) by inserting ‘‘, on, or after’’ after ‘‘before’’; and
(2) by striking subsection (e).
SEC. 2003. ADJUSTMENT OF MAXIMUM MONTHLY RENTS FOR CERTAIN
DWELLING UNITS IN NEW CONSTRUCTION AND SUBSTAN-
TIAL 
OR 
MODERATE 
REHABILITATION 
PROJECTS
ASSISTED UNDER SECTION 8 RENTAL ASSISTANCE PRO-
GRAM.
The third sentence of section 8(c)(2)(A) of the United States
Housing Act of 1937 (42 U.S.C. 1437f(c)(2)(A)) is amended by insert-
ing before the period at the end the following: ‘‘, and during fiscal
year 1999 and thereafter’’.
H. R. 2015—8
SEC. 2004. ADJUSTMENT OF MAXIMUM MONTHLY RENTS FOR NON-
TURNOVER DWELLING UNITS ASSISTED UNDER SECTION
8 RENTAL ASSISTANCE PROGRAM.
The last sentence of section 8(c)(2)(A) of the United States
Housing Act of 1937 (42 U.S.C. 1437f(c)(2)(A)) is amended by insert-
ing before the period at the end the following: ‘‘, and during fiscal
year 1999 and thereafter’’.
TITLE III—COMMUNICATIONS AND
SPECTRUM ALLOCATION PROVISIONS
SEC. 3001. DEFINITIONS.
(a) COMMON TERMINOLOGY.—Except as otherwise provided in
this title, the terms used in this title have the meanings provided
in section 3 of the Communications Act of 1934 (47 U.S.C. 153),
as amended by this section.
(b) ADDITIONAL DEFINITIONS.—Section 3 of the Communications
Act of 1934 (47 U.S.C. 153) is amended—
(1) by redesignating paragraphs (49) through (51) as para-
graphs (50) through (52), respectively; and
(2) by inserting after paragraph (48) the following new
paragraph:
‘‘(49) TELEVISION SERVICE.—
‘‘(A) ANALOG TELEVISION SERVICE.—The term ‘analog
television service’ means television service provided pursu-
ant to the transmission standards prescribed by the
Commission in section 73.682(a) of its regulations (47
C.F.R. 73.682(a)).
‘‘(B) DIGITAL TELEVISION SERVICE.—The term ‘digital
television service’ means television service provided pursu-
ant to the transmission standards prescribed by the
Commission in section 73.682(d) of its regulations (47
C.F.R. 73.682(d)).’’.
SEC. 3002. SPECTRUM AUCTIONS.
(a) EXTENSION AND EXPANSION OF AUCTION AUTHORITY.—
(1) IN
GENERAL.—Section 309(j) of the Communications
Act of 1934 (47 U.S.C. 309(j)) is amended—
(A) by striking paragraphs (1) and (2) and inserting
in lieu thereof the following:
‘‘(1) GENERAL AUTHORITY.—If, consistent with the obliga-
tions described in paragraph (6)(E), mutually exclusive applica-
tions are accepted for any initial license or construction permit,
then, except as provided in paragraph (2), the Commission
shall grant the license or permit to a qualified applicant through
a system of competitive bidding that meets the requirements
of this subsection.
‘‘(2) EXEMPTIONS.—The competitive bidding authority
granted by this subsection shall not apply to licenses or
construction permits issued by the Commission—
‘‘(A) for public safety radio services, including private
internal radio services used by State and local governments
and non-government entities and including emergency road
services provided by not-for-profit organizations, that—
‘‘(i) are used to protect the safety of life, health,
or property; and
H. R. 2015—9
‘‘(ii) are not made commercially available to the
public;
‘‘(B) for initial licenses or construction permits for digi-
tal television service given to existing terrestrial broadcast
licensees to replace their analog television service licenses;
or
‘‘(C) for stations described in section 397(6) of this
Act.’’;
(B) in paragraph (3)—
(i) by inserting after the second sentence the fol-
lowing new sentence: ‘‘The Commission shall, directly
or by contract, provide for the design and conduct
(for purposes of testing) of competitive bidding using
a contingent combinatorial bidding system that permits
prospective bidders to bid on combinations or groups
of licenses in a single bid and to enter multiple alter-
native bids within a single bidding round.’’;
(ii) by striking ‘‘and’’ at the end of subparagraph
(C);
(iii) by striking the period at the end of subpara-
graph (D) and inserting ‘‘; and’’; and
(iv) by adding at the end the following new
subparagraph:
‘‘(E) ensure that, in the scheduling of any competitive
bidding under this subsection, an adequate period is
allowed—
‘‘(i) before issuance of bidding rules, to permit
notice and comment on proposed auction procedures;
and
‘‘(ii) after issuance of bidding rules, to ensure that
interested parties have a sufficient time to develop
business plans, assess market conditions, and evaluate
the availability of equipment for the relevant services.’’;
(C) in paragraph (4)—
(i) by striking ‘‘and’’ at the end of subparagraph
(D);
(ii) by striking the period at the end of subpara-
graph (E) and inserting ‘‘; and’’; and
(iii) by adding at the end the following new
subparagraph:
‘‘(F) prescribe methods by which a reasonable reserve
price will be required, or a minimum bid will be established,
to obtain any license or permit being assigned pursuant
to the competitive bidding, unless the Commission deter-
mines that such a reserve price or minimum bid is not
in the public interest.’’;
(D) in paragraph (8)(B)—
(i) by striking the third sentence; and
(ii) by adding at the end the following new sen-
tence: ‘‘No sums may be retained under this subpara-
graph during any fiscal year beginning after September
30, 1998, if the annual report of the Commission under
section 4(k) for the second preceding fiscal year fails
H. R. 2015—10
to include in the itemized statement required by para-
graph (3) of such section a statement of each expendi-
ture made for purposes of conducting competitive bid-
ding under this subsection during such second preced-
ing fiscal year.’’;
(E) in paragraph (11), by striking ‘‘1998’’ and inserting
‘‘2007’’; and
(F) in paragraph (13)(F), by striking ‘‘September 30,
1998’’ and inserting ‘‘the date of enactment of the Balanced
Budget Act of 1997’’.
(2) TERMINATION OF LOTTERY AUTHORITY.—Section 309(i)
of the Communications Act of 1934 (47 U.S.C. 309(i)) is amend-
ed—
(A) by striking paragraph (1) and inserting the follow-
ing:
‘‘(1) GENERAL
AUTHORITY.—Except as provided in para-
graph (5), if there is more than one application for any initial
license or construction permit, then the Commission shall have
the authority to grant such license or permit to a qualified
applicant through the use of a system of random selection.’’;
and
(B) by adding at the end the following new paragraph:
‘‘(5) TERMINATION OF AUTHORITY.—(A) Except as provided
in subparagraph (B), the Commission shall not issue any license
or permit using a system of random selection under this sub-
section after July 1, 1997.
‘‘(B) Subparagraph (A) of this paragraph shall not apply
with respect to licenses or permits for stations described in
section 397(6) of this Act.’’.
(3) RESOLUTION
OF
PENDING
COMPARATIVE
LICENSING
CASES.—Section 309 of the Communications Act of 1934 (47
U.S.C. 309) is further amended by adding at the end the
following new subsection:
‘‘(l) APPLICABILITY
OF
COMPETITIVE
BIDDING
TO
PENDING
COMPARATIVE
LICENSING
CASES.—With respect to competing
applications for initial licenses or construction permits for commer-
cial radio or television stations that were filed with the Commission
before July 1, 1997, the Commission shall—
‘‘(1) have the authority to conduct a competitive bidding
proceeding pursuant to subsection (j) to assign such license
or permit;
‘‘(2) treat the persons filing such applications as the only
persons eligible to be qualified bidders for purposes of such
proceeding; and
‘‘(3) waive any provisions of its regulations necessary to
permit such persons to enter an agreement to procure the
removal of a conflict between their applications during the
180-day period beginning on the date of enactment of the Bal-
anced Budget Act of 1997.’’.
(4) CONFORMING AMENDMENT.—Section 6002 of the Omni-
bus Budget Reconciliation Act of 1993 is amended by striking
subsection (e).
(5) EFFECTIVE
DATE.—Except as otherwise provided
therein, the amendments made by this subsection are effective
on July 1, 1997.
(b) ACCELERATED AVAILABILITY FOR AUCTION OF 1,710–1,755
MEGAHERTZ
FROM INITIAL REALLOCATION REPORT.—The band of
H. R. 2015—11
frequencies located at 1,710-1,755 megahertz identified in the initial
reallocation report under section 113(a) of the National Tele-
communications and Information Administration Act (47 U.S.C.
923(a)) shall, notwithstanding the timetable recommended under
section 113(e) of such Act and section 115(b)(1) of such Act, be
available in accordance with this subsection for assignment for
commercial use. The Commission shall assign licenses for such
use by competitive bidding commenced after January 1, 2001, pursu-
ant to section 309(j) of the Communications Act of 1934 (47 U.S.C.
309(j)).
(c) COMMISSION OBLIGATION TO MAKE ADDITIONAL SPECTRUM
AVAILABLE BY AUCTION.—
(1) IN
GENERAL.—The Commission shall complete all
actions necessary to permit the assignment by September 30,
2002, by competitive bidding pursuant to section 309(j) of the
Communications Act of 1934 (47 U.S.C. 309(j)), of licenses
for the use of bands of frequencies that—
(A) in the aggregate span not less than 55 megahertz;
(B) are located below 3 gigahertz;
(C) have not, as of the date of enactment of this Act—
(i) been designated by Commission regulation for
assignment pursuant to such section;
(ii) been identified by the Secretary of Commerce
pursuant to section 113 of the National Telecommuni-
cations and Information Administration Organization
Act (47 U.S.C. 923);
(iii) been allocated for Federal Government use
pursuant to section 305 of the Communications Act
of 1934 (47 U.S.C. 305);
(iv) been designated for reallocation under section
337 of the Communications Act of 1934 (as added
by this Act); or
(v) been allocated or authorized for unlicensed use
pursuant to part 15 of the Commission’s regulations
(47 C.F.R. Part 15), if the operation of services licensed
pursuant to competitive bidding would interfere with
operation of end-user products permitted under such
regulations;
(D) include frequencies at 2,110–2,150 megahertz; and
(E) include 15 megahertz from within the bands of
frequencies at 1,990–2,110 megahertz.
(2) CRITERIA
FOR REASSIGNMENT.—In making available
bands of frequencies for competitive bidding pursuant to para-
graph (1), the Commission shall—
(A) seek to promote the most efficient use of the electro-
magnetic spectrum;
(B) consider the cost of relocating existing uses to
other bands of frequencies or other means of communica-
tion;
(C) consider the needs of existing public safety radio
services (as such services are described in section
309(j)(2)(A) of the Communications Act of 1934, as amended
by this Act);
(D) comply with the requirements of international
agreements concerning spectrum allocations; and
(E) coordinate with the Secretary of Commerce when
there is any impact on Federal Government spectrum use.
H. R. 2015—12
(3) USE OF BANDS AT 2,110-2,150 MEGAHERTZ.—The Commis-
sion shall reallocate spectrum located at 2,110-2,150 megahertz
for assignment by competitive bidding unless the Commission
determines that auction of other spectrum (A) better serves
the public interest, convenience, and necessity, and (B) can
reasonably be expected to produce greater receipts. If the
Commission makes such a determination, then the Commission
shall, within 2 years after the date of enactment of this Act,
identify an alternative 40 megahertz, and report to the Con-
gress an identification of such alternative 40 megahertz for
assignment by competitive bidding.
(4) USE OF 15 MEGAHERTZ FROM BANDS AT 1,990-2,110 MEGA-
HERTZ.—The Commission shall reallocate 15 megahertz from
spectrum located at 1,990-2,110 megahertz for assignment by
competitive bidding unless the President determines such spec-
trum cannot be reallocated due to the need to protect incumbent
Federal systems from interference, and that allocation of other
spectrum (A) better serves the public interest, convenience,
and necessity, and (B) can reasonably be expected to produce
comparable receipts. If the President makes such a determina-
tion, then the President shall, within 2 years after the date
of enactment of this Act, identify alternative bands of fre-
quencies totalling 15 megahertz, and report to the Congress
an identification of such alternative bands for assignment by
competitive bidding.
(5) NOTIFICATION TO THE SECRETARY OF COMMERCE.—The
Commission shall attempt to accommodate incumbent licensees
displaced under this section by relocating them to other fre-
quencies available for allocation by the Commission. The
Commission shall notify the Secretary of Commerce whenever
the Commission is not able to provide for the effective relocation
of an incumbent licensee to a band of frequencies available
to the Commission for assignment. The notification shall
include—
(A) specific information on the incumbent licensee;
(B) the bands the Commission considered for relocation
of the licensee;
(C) the reasons the licensee cannot be accommodated
in such bands; and
(D) the bands of frequencies identified by the Commis-
sion that are—
(i) suitable for the relocation of such licensee; and
(ii) allocated for Federal Government use, but that
could be reallocated pursuant to part B of the National
Telecommunications and Information Administration
Organization Act (as amended by this Act).
(d) IDENTIFICATION AND REALLOCATION OF FREQUENCIES.—
(1) IN GENERAL.—Section 113 of the National Telecommuni-
cations and Information Administration Organization Act (47
U.S.C. 923) is amended by adding at the end thereof the follow-
ing:
‘‘(f) ADDITIONAL
REALLOCATION
REPORT.—If the Secretary
receives a notice from the Commission pursuant to section 3002(c)(5)
of the Balanced Budget Act of 1997, the Secretary shall prepare
and submit to the President, the Commission, and the Congress
a report recommending for reallocation for use other than by Federal
Government stations under section 305 of the 1934 Act (47 U.S.C.
H. R. 2015—13
305), bands of frequencies that are suitable for the licensees identi-
fied in the Commission’s notice. The Commission shall, not later
than one year after receipt of such report, prepare, submit to
the President and the Congress, and implement, a plan for the
immediate allocation and assignment of such frequencies under
the 1934 Act to incumbent licensees described in the Commission’s
notice.
‘‘(g) RELOCATION OF FEDERAL GOVERNMENT STATIONS.—
‘‘(1) IN GENERAL.—In order to expedite the commercial use
of the electromagnetic spectrum and notwithstanding section
3302(b) of title 31, United States Code, any Federal entity
which operates a Federal Government station may accept from
any person payment of the expenses of relocating the Federal
entity’s operations from one or more frequencies to another
frequency or frequencies, including the costs of any modifica-
tion, replacement, or reissuance of equipment, facilities, operat-
ing manuals, or regulations incurred by that entity. Such pay-
ments may be in advance of relocation and may be in cash
or in kind. Any such payment in cash shall be deposited in
the account of such Federal entity in the Treasury of the
United States or in a separate account authorized by law.
Funds deposited according to this paragraph shall be available,
without appropriation or fiscal year limitation, only for such
expenses of the Federal entity for which such funds were depos-
ited under this paragraph.
‘‘(2) PROCESS
FOR
RELOCATION.—Any person seeking to
relocate a Federal Government station that has been assigned
a frequency within a band that has been allocated for mixed
Federal and non-Federal use, or that has been scheduled for
reallocation to non-Federal use, may submit a petition for such
relocation to NTIA. The NTIA shall limit or terminate the
Federal Government station’s operating license within 6 months
after receiving the petition if the following requirements are
met:
‘‘(A) the person seeking relocation of the Federal
Government station has guaranteed to pay all relocation
costs incurred by the Federal entity, including all engineer-
ing, equipment, site acquisition and construction, and regu-
latory fee costs;
‘‘(B) all activities necessary for implementing the
relocation have been completed, including construction of
replacement facilities (if necessary and appropriate) and
identifying and obtaining new frequencies for use by the
relocated Federal Government station (where such station
is not relocating to spectrum reserved exclusively for Fed-
eral use);
‘‘(C) any necessary replacement facilities, equipment
modifications, or other changes have been implemented
and tested to ensure that the Federal Government station
is able to successfully accomplish its purposes; and
‘‘(D) NTIA has determined that the proposed use of
the spectrum frequency band to which the Federal entity
will relocate its operations is—
‘‘(i) consistent with obligations undertaken by the
United States in international agreements and with
United States national security and public safety
interests; and
H. R. 2015—14
‘‘(ii) suitable for the technical characteristics of
the band and consistent with other uses of the band.
In exercising its authority under clause (i) of this subpara-
graph, NTIA shall consult with the Secretary of Defense,
the Secretary of State, or other appropriate officers of the
Federal Government.
‘‘(3) RIGHT TO RECLAIM.—If within one year after the reloca-
tion the Federal entity demonstrates to the Commission that
the new facilities or spectrum are not comparable to the facili-
ties or spectrum from which the Federal Government station
was relocated, the person who filed the petition under para-
graph (2) for such relocation shall take reasonable steps to
remedy any defects or pay the Federal entity for the expenses
incurred in returning the Federal Government station to the
spectrum from which such station was relocated.
‘‘(h) FEDERAL ACTION TO EXPEDITE SPECTRUM TRANSFER.—Any
Federal Government station which operates on electromagnetic
spectrum that has been identified in any reallocation report under
this section shall, to the maximum extent practicable through the
use of the authority granted under subsection (g) and any other
applicable provision of law, take action to relocate its spectrum
use to other frequencies that are reserved for Federal use or to
consolidate its spectrum use with other Federal Government sta-
tions in a manner that maximizes the spectrum available for non-
Federal use.
‘‘(i) DEFINITION.—For purposes of this section, the term ‘Federal
entity’ means any department, agency, or other instrumentality
of the Federal Government that utilizes a Government station
license obtained under section 305 of the 1934 Act (47 U.S.C.
305).’’.
(2) Section 114(a) of such Act (47 U.S.C. 924(a)) is amend-
ed—
(A) in paragraph (1), by striking ‘‘(a) or (d)(1)’’ and
inserting ‘‘(a), (d)(1), or (f)’’; and
(B) in paragraph (2), by striking ‘‘either’’ and inserting
‘‘any’’.
(e) IDENTIFICATION AND REALLOCATION OF AUCTIONABLE FRE-
QUENCIES.—
(1) SECOND
REPORT
REQUIRED.—Section 113(a) of the
National Telecommunications and Information Administration
Organization Act (47 U.S.C. 923(a)) is amended by inserting
‘‘and within 6 months after the date of enactment of the Bal-
anced Budget Act of 1997’’ after ‘‘Act of 1993’’.
(2) IN GENERAL.—Section 113(b) of such Act (47 U.S.C.
923(b)) is amended—
(A) by striking the caption of paragraph (1) and insert-
ing ‘‘INITIAL REALLOCATION REPORT.—’’;
(B) by inserting ‘‘in the initial report required by sub-
section (a)’’ after ‘‘recommend for reallocation’’ in paragraph
(1);
(C) by inserting ‘‘or (3)’’ after ‘‘paragraph (1)’’ each
place it appears in paragraph (2); and
(D) by adding at the end thereof the following:
‘‘(3) SECOND REALLOCATION REPORT.—In accordance with
the provisions of this section, the Secretary shall recommend
for reallocation in the second report required by subsection
(a), for use other than by Federal Government stations under
H. R. 2015—15
section 305 of the 1934 Act (47 U.S.C. 305), a band or bands
of frequencies that—
‘‘(A) in the aggregate span not less than 20 megahertz;
‘‘(B) are located below 3 gigahertz; and
‘‘(C) meet the criteria specified in paragraphs (1)
through (5) of subsection (a).’’.
(3) CONFORMING AMENDMENT.—Section 113(d) of such Act
(47 U.S.C. 923(d)) is amended by striking ‘‘final report’’ and
inserting ‘‘initial report’’.
(4) ALLOCATION AND ASSIGNMENT.—Section 115 of such Act
(47 U.S.C. 925) is amended—
(A) by striking ‘‘the report required by section 113(a)’’
in subsection (b) and inserting ‘‘the initial reallocation
report required by section 113(a)’’; and
(B) by adding at the end thereof the following:
‘‘(c) ALLOCATION AND ASSIGNMENT OF FREQUENCIES IDENTIFIED
IN THE SECOND REALLOCATION REPORT.—
‘‘(1) PLAN AND IMPLEMENTATION.—With respect to the fre-
quencies made available for reallocation pursuant to section
113(b)(3), the Commission shall, not later than one year after
receipt of the second reallocation report required by section
113(a), prepare, submit to the President and the Congress,
and implement, a plan for the immediate allocation and assign-
ment under the 1934 Act of all such frequencies in accordance
with section 309(j) of such Act.
‘‘(2) CONTENTS.—The plan prepared by the Commission
under paragraph (1) shall consist of a schedule of allocation
and assignment of those frequencies in accordance with section
309(j) of the 1934 Act in time for the assignment of those
licenses or permits by September 30, 2002.’’.
SEC. 3003. AUCTION OF RECAPTURED BROADCAST TELEVISION SPEC-
TRUM.
Section 309(j) of the Communications Act of 1934 (47 U.S.C.
309(j)) is amended by adding at the end the following new para-
graph:
‘‘(14) AUCTION
OF
RECAPTURED
BROADCAST
TELEVISION
SPECTRUM.—
‘‘(A) LIMITATIONS ON TERMS OF TERRESTRIAL TELEVISION
BROADCAST LICENSES.—A television broadcast license that
authorizes analog television service may not be renewed
to authorize such service for a period that extends beyond
December 31, 2006.
‘‘(B) EXTENSION.—The Commission shall extend the
date described in subparagraph (A) for any station that
requests such extension in any television market if the
Commission finds that—
‘‘(i) one or more of the stations in such market
that are licensed to or affiliated with one of the four
largest national television networks are not broadcast-
ing a digital television service signal, and the Commis-
sion finds that each such station has exercised due
diligence and satisfies the conditions for an extension
of the Commission’s applicable construction deadlines
for digital television service in that market;
‘‘(ii) digital-to-analog converter technology is not
generally available in such market; or
H. R. 2015—16
‘‘(iii) in any market in which an extension is not
available under clause (i) or (ii), 15 percent or more
of the television households in such market—
‘‘(I) do not subscribe to a multichannel video
programming distributor (as defined in section
602) that carries one of the digital television serv-
ice programming channels of each of the television
stations broadcasting such a channel in such mar-
ket; and
‘‘(II) do not have either—
‘‘(a) at least one television receiver capable
of receiving the digital television service sig-
nals of the television stations licensed in such
market; or
‘‘(b) at least one television receiver of ana-
log television service signals equipped with
digital-to-analog converter technology capable
of receiving the digital television service sig-
nals of the television stations licensed in such
market.
‘‘(C) SPECTRUM REVERSION AND RESALE.—
‘‘(i) The Commission shall—
‘‘(I) ensure that, as licenses for analog tele-
vision service expire pursuant to subparagraph (A)
or (B), each licensee shall cease using electro-
magnetic spectrum assigned to such service accord-
ing to the Commission’s direction; and
‘‘(II) reclaim and organize the electromagnetic
spectrum in a manner consistent with the objec-
tives described in paragraph (3) of this subsection.
‘‘(ii) Licensees for new services occupying spectrum
reclaimed pursuant to clause (i) shall be assigned in
accordance with this subsection. The Commission shall
complete the assignment of such licenses, and report
to the Congress the total revenues from such competi-
tive bidding, by September 30, 2002.
‘‘(D) CERTAIN
LIMITATIONS
ON
QUALIFIED
BIDDERS
PROHIBITED.—In prescribing any regulations relating to the
qualification of bidders for spectrum reclaimed pursuant
to subparagraph (C)(i), the Commission, for any license
that may be used for any digital television service where
the grade A contour of the station is projected to encompass
the entirety of a city with a population in excess of 400,000
(as determined using the 1990 decennial census), shall
not—
‘‘(i) preclude any party from being a qualified bid-
der for such spectrum on the basis of—
‘‘(I) the Commission’s duopoly rule (47 C.F.R.
73.3555(b)); or
‘‘(II) the Commission’s newspaper cross-owner-
ship rule (47 C.F.R. 73.3555(d)); or
‘‘(ii) apply either such rule to preclude such a
party that is a winning bidder in a competitive bidding
for such spectrum from using such spectrum for digital
television service.’’.
H. R. 2015—17
SEC. 3004. ALLOCATION AND ASSIGNMENT OF NEW PUBLIC SAFETY
SERVICES LICENSES AND COMMERCIAL LICENSES.
Title III of the Communications Act of 1934 is amended by
inserting after section 336 (47 U.S.C. 336) the following new section:
‘‘SEC. 337. ALLOCATION AND ASSIGNMENT OF NEW PUBLIC SAFETY
SERVICES LICENSES AND COMMERCIAL LICENSES.
‘‘(a) IN GENERAL.—Not later than January 1, 1998, the Commis-
sion shall allocate the electromagnetic spectrum between 746 mega-
hertz and 806 megahertz, inclusive, as follows:
‘‘(1) 24 megahertz of that spectrum for public safety services
according to the terms and conditions established by the
Commission, in consultation with the Secretary of Commerce
and the Attorney General; and
‘‘(2) 36 megahertz of that spectrum for commercial use
to be assigned by competitive bidding pursuant to section 309(j).
‘‘(b) ASSIGNMENT.—The Commission shall—
‘‘(1) commence assignment of the licenses for public safety
services created pursuant to subsection (a) no later than
September 30, 1998; and
‘‘(2) commence competitive bidding for the commercial
licenses created pursuant to subsection (a) after January 1,
2001.
‘‘(c) LICENSING OF UNUSED FREQUENCIES FOR PUBLIC SAFETY
SERVICES.—
‘‘(1) USE OF UNUSED CHANNELS FOR PUBLIC SAFETY SERV-
ICES.—Upon application by an entity seeking to provide public
safety services, the Commission shall waive any requirement
of this Act or its regulations implementing this Act (other
than its regulations regarding harmful interference) to the
extent necessary to permit the use of unassigned frequencies
for the provision of public safety services by such entity. An
application shall be granted under this subsection if the
Commission finds that—
‘‘(A) no other spectrum allocated to public safety serv-
ices is immediately available to satisfy the requested public
safety service use;
‘‘(B) the requested use is technically feasible without
causing harmful interference to other spectrum users enti-
tled to protection from such interference under the Commis-
sion’s regulations;
‘‘(C) the use of the unassigned frequency for the provi-
sion of public safety services is consistent with other alloca-
tions for the provision of such services in the geographic
area for which the application is made;
‘‘(D) the unassigned frequency was allocated for its
present use not less than 2 years prior to the date on
which the application is granted; and
‘‘(E) granting such application is consistent with the
public interest.
‘‘(2) APPLICABILITY.—Paragraph (1) shall apply to any
application to provide public safety services that is pending
or filed on or after the date of enactment of the Balanced
Budget Act of 1997.
‘‘(d) CONDITIONS ON LICENSES.—In establishing service rules
with respect to licenses granted pursuant to this section, the
Commission—
H. R. 2015—18
‘‘(1) shall establish interference limits at the boundaries
of the spectrum block and service area;
‘‘(2) shall establish any additional technical restrictions
necessary to protect full-service analog television service and
digital television service during a transition to digital television
service;
‘‘(3) may permit public safety services licensees and
commercial licensees—
‘‘(A) to aggregate multiple licenses to create larger
spectrum blocks and service areas; and
‘‘(B) to disaggregate or partition licenses to create
smaller spectrum blocks or service areas; and
‘‘(4) shall establish rules insuring that public safety services
licensees using spectrum reallocated pursuant to subsection
(a)(1) shall not be subject to harmful interference from tele-
vision broadcast licensees.
‘‘(e) REMOVAL
AND RELOCATION
OF INCUMBENT BROADCAST
LICENSEES.—
‘‘(1) CHANNELS 60 TO 69.—Any person who holds a tele-
vision broadcast license to operate between 746 and 806 mega-
hertz may not operate at that frequency after the date on
which the digital television service transition period terminates,
as determined by the Commission.
‘‘(2) INCUMBENT QUALIFYING LOW-POWER STATIONS.—After
making any allocation or assignment under this section, the
Commission shall seek to assure, consistent with the Commis-
sion’s plan for allotments for digital television service, that
each qualifying low-power television station is assigned a fre-
quency below 746 megahertz to permit the continued operation
of such station.
‘‘(f) DEFINITIONS.—For purposes of this section:
‘‘(1) PUBLIC SAFETY SERVICES.—The term ‘public safety serv-
ices’ means services—
‘‘(A) the sole or principal purpose of which is to protect
the safety of life, health, or property;
‘‘(B) that are provided—
‘‘(i) by State or local government entities; or
‘‘(ii) by nongovernmental organizations that are
authorized by a governmental entity whose primary
mission is the provision of such services; and
‘‘(C) that are not made commercially available to the
public by the provider.
‘‘(2) QUALIFYING LOW-POWER TELEVISION STATIONS.—A sta-
tion is a qualifying low-power television station if, during the
90 days preceding the date of enactment of the Balanced Budget
Act of 1997—
‘‘(A) such station broadcast a minimum of 18 hours
per day;
‘‘(B) such station broadcast an average of at least 3
hours per week of programming that was produced within
the market area served by such station; and
‘‘(C) such station was in compliance with the require-
ments applicable to low-power television stations.’’.
SEC. 3005. FLEXIBLE USE OF ELECTROMAGNETIC SPECTRUM.
Section 303 of the Communications Act of 1934 (47 U.S.C.
303) is amended by adding at the end thereof the following:
H. R. 2015—19
‘‘(y) Have authority to allocate electromagnetic spectrum so
as to provide flexibility of use, if—
‘‘(1) such use is consistent with international agreements
to which the United States is a party; and
‘‘(2) the Commission finds, after notice and an opportunity
for public comment, that—
‘‘(A) such an allocation would be in the public interest;
‘‘(B) such use would not deter investment in commu-
nications services and systems, or technology development;
and
‘‘(C) such use would not result in harmful interference
among users.’’.
SEC. 3006. UNIVERSAL SERVICE FUND PAYMENT SCHEDULE.
(a) APPROPRIATIONS TO THE UNIVERSAL SERVICE FUND.—
(1) APPROPRIATION.—There is hereby appropriated to the
Commission $3,000,000,000 in fiscal year 2001, which shall
be disbursed on October 1, 2000, to the Administrator of the
Federal universal service support programs established pursu-
ant to section 254 of the Communications Act of 1934 (47
U.S.C. 254), and which may be expended by the Administrator
in support of such programs as provided pursuant to the rules
implementing that section.
(2) RETURN TO TREASURY.—The Administrator shall trans-
fer $3,000,000,000 from the funds collected for such support
programs to the General Fund of the Treasury on October
1, 2001.
(b) FEE
ADJUSTMENTS.—The Commission shall direct the
Administrator to adjust payments by telecommunications carriers
and other providers of interstate telecommunications so that the
$3,000,000,000 of the total payments by such carriers or providers
to the Administrator for fiscal year 2001 shall be deferred until
October 1, 2001.
(c) PRESERVATION OF AUTHORITY.—Nothing in this section shall
affect the Administrator’s authority to determine the amounts that
should be expended for universal service support programs pursuant
to section 254 of the Communications Act of 1934 and the rules
implementing that section.
(d) DEFINITION.—For purposes of this section, the term
‘‘Administrator’’ means the Administrator designated by the Federal
Communications Commission to administer Federal universal serv-
ice support programs pursuant to section 254 of the Communica-
tions Act of 1934.
SEC. 3007. DEADLINE FOR COLLECTION
The Commission shall conduct the competitive bidding required
under this title or the amendments made by this title in a manner
that ensures that all proceeds of such bidding are deposited in
accordance with section 309(j)(8) of the Communications Act of
1934 not later than September 30, 2002.
SEC. 3008. ADMINISTRATIVE PROCEDURES FOR SPECTRUM AUCTIONS.
Notwithstanding section 309(b) of the Communications Act of
1934 (47 U.S.C. 309(b)), no application for an instrument of
authorization for frequencies assigned under this title (or amend-
ments made by this title) shall be granted by the Commission
earlier than 7 days following issuance of public notice by the
Commission of the acceptance for filing of such application or of
H. R. 2015—20
any substantial amendment thereto. Notwithstanding section
309(d)(1) of such Act (47 U.S.C. 309(d)(1)), the Commission may
specify a period (no less than 5 days following issuance of such
public notice) for the filing of petitions to deny any application
for an instrument of authorization for such frequencies.
TITLE IV—MEDICARE, MEDICAID, AND
CHILDREN’S HEALTH PROVISIONS
SEC. 4000. AMENDMENTS TO SOCIAL SECURITY ACT AND REFERENCES
TO OBRA; TABLE OF CONTENTS OF TITLE.
(a) AMENDMENTS TO SOCIAL SECURITY ACT.—Except as other-
wise specifically provided, whenever in this title an amendment
is expressed in terms of an amendment to or repeal of a section
or other provision, the reference shall be considered to be made
to that section or other provision of the Social Security Act.
(b) REFERENCES TO OBRA.—In this title, the terms ‘‘OBRA–
1986’’, ‘‘OBRA–1987’’, ‘‘OBRA–1989’’, ‘‘OBRA–1990’’, and ‘‘OBRA–
1993’’ refer to the Omnibus Budget Reconciliation Act of 1986
(Public Law 99–509), the Omnibus Budget Reconciliation Act of
1987 (Public Law 100–203), the Omnibus Budget Reconciliation
Act of 1989 (Public Law 101–239), the Omnibus Budget Reconcili-
ation Act of 1990 (Public Law 101–508), and the Omnibus Budget
Reconciliation Act of 1993 (Public Law 103–66), respectively.
(c) TABLE OF CONTENTS OF TITLE.—The table of contents of
this title is as follows:
Sec. 4000. Amendments to Social Security Act and references to OBRA; table of
contents of title.
Subtitle A—Medicare+Choice Program
CHAPTER 1—MEDICARE+CHOICE PROGRAM
SUBCHAPTER A—MEDICARE+CHOICE PROGRAM
Sec. 4001. Establishment of Medicare+Choice program.
‘‘PART C—MEDICARE+CHOICE PROGRAM
‘‘Sec. 1851. Eligibility, election, and enrollment.
‘‘Sec. 1852. Benefits and beneficiary protections.
‘‘Sec. 1853. Payments to Medicare+Choice organizations.
‘‘Sec. 1854. Premiums.
‘‘Sec. 1855. Organizational and financial requirements for Medicare+Choice or-
ganizations; provider-sponsored organizations.
‘‘Sec. 1856. Establishment of standards.
‘‘Sec. 1857. Contracts with Medicare+Choice organizations.
‘‘Sec. 1859. Definitions; miscellaneous provisions.
Sec. 4002. Transitional rules for current medicare HMO program.
Sec. 4003. Conforming changes in medigap program.
SUBCHAPTER B—SPECIAL RULES FOR MEDICARE+CHOICE MEDICAL SAVINGS ACCOUNTS
Sec. 4006. Medicare+Choice MSA.
CHAPTER 2—DEMONSTRATIONS
SUBCHAPTER A—MEDICARE+CHOICE COMPETITIVE PRICING DEMONSTRATION PROJECT
Sec. 4011. Medicare prepaid competitive pricing demonstration project.
Sec. 4012. Administration through the Office of Competition; advisory committee.
Sec. 4013. Project design based on FEHBP competitive bidding model.
SUBCHAPTER B—SOCIAL HEALTH MAINTENANCE ORGANIZATIONS
Sec. 4014. Social health maintenance organizations (SHMOs).
SUBCHAPTER C—MEDICARE SUBVENTION DEMONSTRATION PROJECT FOR MILITARY
RETIREES
Sec. 4015. Medicare subvention demonstration project for military retirees.
H. R. 2015—21
SUBCHAPTER D—OTHER PROJECTS
Sec. 4016. Medicare coordinated care demonstration project.
Sec. 4017. Orderly transition of municipal health service demonstration projects.
Sec. 4018. Medicare enrollment demonstration project.
Sec. 4019. Extension of certain medicare community nursing organization dem-
onstration projects.
CHAPTER 3—COMMISSIONS
Sec. 4021. National Bipartisan Commission on the Future of Medicare.
Sec. 4022. Medicare Payment Advisory Commission.
CHAPTER 4—MEDIGAP PROTECTIONS
Sec. 4031. Medigap protections.
Sec. 4032. Addition of high deductible medigap policies.
CHAPTER 5—TAX TREATMENT OF HOSPITALS PARTICIPATING IN PROVIDER-SPONSORED
ORGANIZATIONS
Sec. 4041. Tax treatment of hospitals which participate in provider-sponsored orga-
nizations.
Subtitle B—Prevention Initiatives
Sec. 4101. Screening mammography.
Sec. 4102. Screening pap smear and pelvic exams.
Sec. 4103. Prostate cancer screening tests.
Sec. 4104. Coverage of colorectal screening.
Sec. 4105. Diabetes self-management benefits.
Sec. 4106. Standardization of medicare coverage of bone mass measurements.
Sec. 4107. Vaccines outreach expansion.
Sec. 4108. Study on preventive and enhanced benefits.
Subtitle C—Rural Initiatives
Sec. 4201. Medicare rural hospital flexibility program.
Sec. 4202. Prohibiting denial of request by rural referral centers for reclassification
on basis of comparability of wages.
Sec. 4203. Hospital geographic reclassification permitted for purposes of dispropor-
tionate share payment adjustments.
Sec. 4204. Medicare-dependent, small rural hospital payment extension.
Sec. 4205. Rural health clinic services.
Sec. 4206. Medicare reimbursement for telehealth services.
Sec. 4207. Informatics, telemedicine, and education demonstration project.
Subtitle D—Anti-Fraud and Abuse Provisions and Improvements in Protecting
Program Integrity
CHAPTER 1—REVISIONS TO SANCTIONS FOR FRAUD AND ABUSE
Sec. 4301. Permanent exclusion for those convicted of 3 health care related crimes.
Sec. 4302. Authority to refuse to enter into medicare agreements with individuals
or entities convicted of felonies.
Sec. 4303. Exclusion of entity controlled by family member of a sanctioned individ-
ual.
Sec. 4304. Imposition of civil money penalties.
CHAPTER 2—IMPROVEMENTS IN PROTECTING PROGRAM INTEGRITY
Sec. 4311. Improving information to medicare beneficiaries.
Sec. 4312. Disclosure of information and surety bonds.
Sec. 4313. Provision of certain identification numbers.
Sec. 4314. Advisory opinions regarding certain physician self-referral provisions.
Sec. 4315. Replacement of reasonable charge methodology by fee schedules.
Sec. 4316. Application of inherent reasonableness to all part B services other than
physicians’ services.
Sec. 4317. Requirement to furnish diagnostic information.
Sec. 4318. Report by GAO on operation of fraud and abuse control program.
Sec. 4319. Competitive bidding demonstration projects.
Sec. 4320. Prohibiting unnecessary and wasteful medicare payments for certain
items.
Sec. 4321. Nondiscrimination in post-hospital referral to home health agencies and
other entities.
CHAPTER 3—CLARIFICATIONS AND TECHNICAL CHANGES
Sec. 4331. Other fraud and abuse related provisions.
H. R. 2015—22
Subtitle E—Provisions Relating to Part A Only
CHAPTER 1—PAYMENT OF PPS HOSPITALS
Sec. 4401. PPS hospital payment update.
Sec. 4402. Maintaining savings from temporary reduction in capital payments for
PPS hospitals.
Sec. 4403. Disproportionate share.
Sec. 4404. Medicare capital asset sales price equal to book value.
Sec. 4405. Elimination of IME and DSH payments attributable to outlier payments.
Sec. 4406. Increase base payment rate to Puerto Rico hospitals.
Sec. 4407. Certain hospital discharges to post acute care.
Sec. 4408. Reclassification of certain counties as large urban areas under medicare
program.
Sec. 4409. Geographic reclassification for certain disproportionately large hospitals.
Sec. 4410. Floor on area wage index.
CHAPTER 2—PAYMENT OF PPS-EXEMPT HOSPITALS
SUBCHAPTER A—GENERAL PAYMENT PROVISIONS
Sec. 4411. Payment update.
Sec. 4412. Reductions to capital payments for certain PPS-exempt hospitals and
units.
Sec. 4413. Rebasing.
Sec. 4414. Cap on TEFRA limits.
Sec. 4415. Bonus and relief payments.
Sec. 4416. Change in payment and target amount for new providers.
Sec. 4417. Treatment of certain long-term care hospitals.
Sec. 4418. Treatment of certain cancer hospitals.
Sec. 4419. Elimination of exemptions for certain hospitals.
SUBCHAPTER B—PROSPECTIVE PAYMENT SYSTEM FOR PPS-EXEMPT HOSPITALS
Sec. 4421. Prospective payment for inpatient rehabilitation hospital services.
Sec. 4422. Development of proposal on payments for long-term care hospitals.
CHAPTER 3—PAYMENT FOR SKILLED NURSING FACILITIES
Sec. 4431. Extension of cost limits.
Sec. 4432. Prospective payment for skilled nursing facility services.
CHAPTER 4—PROVISIONS RELATED TO HOSPICE SERVICES
Sec. 4441. Payments for hospice services.
Sec. 4442. Payment for home hospice care based on location where care is fur-
nished.
Sec. 4443. Hospice care benefits periods.
Sec. 4444. Other items and services included in hospice care.
Sec. 4445. Contracting with independent physicians or physician groups for hospice
care services permitted.
Sec. 4446. Waiver of certain staffing requirements for hospice care programs in
nonurbanized areas.
Sec. 4447. Limitation on liability of beneficiaries for certain hospice coverage deni-
als.
Sec. 4448. Extending the period for physician certification of an individual’s termi-
nal illness.
Sec. 4449. Effective date.
CHAPTER 5—OTHER PAYMENT PROVISIONS
Sec. 4451. Reductions in payments for enrollee bad debt.
Sec. 4452. Permanent extension of hemophilia pass-through payment.
Sec. 4453. Reduction in part A medicare premium for certain public retirees.
Sec. 4454. Coverage of services in religious nonmedical health care institutions
under the medicare and medicaid programs.
Subtitle F—Provisions Relating to Part B Only
CHAPTER 1—SERVICES OF HEALTH PROFESSIONALS
SUBCHAPTER A—PHYSICIANS’ SERVICES
Sec. 4501. Establishment of single conversion factor for 1998.
Sec. 4502. Establishing update to conversion factor to match spending under sus-
tainable growth rate.
Sec. 4503. Replacement of volume performance standard with sustainable growth
rate.
H. R. 2015—23
Sec. 4504. Payment rules for anesthesia services.
Sec. 4505. Implementation of resource-based methodologies.
Sec. 4506. Dissemination of information on high per discharge relative values for
in-hospital physicians’ services.
Sec. 4507. Use of private contracts by medicare beneficiaries.
SUBCHAPTER B—OTHER HEALTH CARE PROFESSIONALS
Sec. 4511. Increased medicare reimbursement for nurse practitioners and clinical
nurse specialists.
Sec. 4512. Increased medicare reimbursement for physician assistants.
Sec. 4513. No x-ray required for chiropractic services.
CHAPTER 2—PAYMENT FOR HOSPITAL OUTPATIENT DEPARTMENT SERVICES
Sec. 4521. Elimination of formula-driven overpayments (FDO) for certain out-
patient hospital services.
Sec. 4522. Extension of reductions in payments for costs of hospital outpatient serv-
ices.
Sec. 4523. Prospective payment system for hospital outpatient department services.
CHAPTER 3—AMBULANCE SERVICES
Sec. 4531. Payments for ambulance services.
Sec. 4532. Demonstration of coverage of ambulance services under medicare
through contracts with units of local government.
CHAPTER 4—PROSPECTIVE PAYMENT FOR OUTPATIENT REHABILITATION SERVICES
Sec. 4541. Prospective payment for outpatient rehabilitation services.
CHAPTER 5—OTHER PAYMENT PROVISIONS
Sec. 4551. Payments for durable medical equipment.
Sec. 4552. Oxygen and oxygen equipment.
Sec. 4553. Reduction in updates to payment amounts for clinical diagnostic labora-
tory tests; study on laboratory tests.
Sec. 4554. Improvements in administration of laboratory tests benefit.
Sec. 4555. Updates for ambulatory surgical services.
Sec. 4556. Reimbursement for drugs and biologicals.
Sec. 4557. Coverage of oral anti-nausea drugs under chemotherapeutic regimen.
Sec. 4558. Renal dialysis-related services.
Sec. 4559. Temporary coverage restoration for portable electrocardiogram transpor-
tation.
CHAPTER 6—PART B PREMIUM AND RELATED PROVISIONS
SUBCHAPTER A—DETERMINATION OF PART B PREMIUM AMOUNT
Sec. 4571. Part B premium.
SUBCHAPTER B—OTHER PROVISIONS RELATED TO PART B PREMIUM
Sec. 4581. Protections under the medicare program for disabled workers who lose
benefits under a group health plan.
Sec. 4582. Governmental entities eligible to elect to pay part B premiums for eligi-
ble individuals.
Subtitle G—Provisions Relating to Parts A and B
CHAPTER 1—HOME HEALTH SERVICES AND BENEFITS
SUBCHAPTER A—PAYMENTS FOR HOME HEALTH SERVICES
Sec. 4601. Recapturing savings resulting from temporary freeze on payment in-
creases for home health services.
Sec. 4602. Interim payments for home health services.
Sec. 4603. Prospective payment for home health services.
Sec. 4604. Payment based on location where home health service is furnished.
SUBCHAPTER B—HOME HEALTH BENEFITS
Sec. 4611. Modification of part A home health benefit for individuals enrolled under
part B.
Sec. 4612. Clarification of part-time or intermittent nursing care.
Sec. 4613. Study on definition of homebound.
Sec. 4614. Normative standards for home health claims denials.
Sec. 4615. No home health benefits based solely on drawing blood.
Sec. 4616. Reports to Congress regarding home health cost containment.
CHAPTER 2—GRADUATE MEDICAL EDUCATION
SUBCHAPTER A—INDIRECT MEDICAL EDUCATION
Sec. 4621. Indirect graduate medical education payments.
H. R. 2015—24
Sec. 4622. Payment 
to 
hospitals 
of 
indirect 
medical 
education 
costs 
for
Medicare+Choice enrollees.
SUBCHAPTER B—DIRECT GRADUATE MEDICAL EDUCATION
Sec. 4623. Limitation on number of residents and rolling average FTE count.
Sec. 4624. Payments to hospitals for direct costs of graduate medical education of
Medicare+Choice enrollees.
Sec. 4625. Permitting payment to nonhospital providers.
Sec. 4626. Incentive payments under plans for voluntary reduction in number of
residents.
Sec. 4627. Medicare special reimbursement rule for primary care combined resi-
dency programs.
Sec. 4628. Demonstration project on use of consortia.
Sec. 4629. Recommendations on long-term policies regarding teaching hospitals and
graduate medical education.
Sec. 4630. Study of hospital overhead and supervisory physician components of di-
rect medical education costs.
CHAPTER 3—PROVISIONS RELATING TO MEDICARE SECONDARY PAYER
Sec. 4631. Permanent extension and revision of certain secondary payer provisions.
Sec. 4632. Clarification of time and filing limitations.
Sec. 4633. Permitting recovery against third party administrators.
CHAPTER 4—OTHER PROVISIONS
Sec. 4641. Placement of advance directive in medical record.
Sec. 4642. Increased certification period for certain organ procurement organiza-
tions.
Sec. 4643. Office of the Chief Actuary in the Health Care Financing Administra-
tion.
Sec. 4644. Conforming amendments to comply with congressional review of agency
rulemaking.
Subtitle H—Medicaid
CHAPTER 1—MANAGED CARE
Sec. 4701. State option of using managed care; change in terminology.
Sec. 4702. Primary care case management services as State option without need for
waiver.
Sec. 4703. Elimination of 75:25 restriction on risk contracts.
Sec. 4704. Increased beneficiary protections.
Sec. 4705. Quality assurance standards.
Sec. 4706. Solvency standards.
Sec. 4707. Protections against fraud and abuse.
Sec. 4708. Improved administration.
Sec. 4709. 6-month guaranteed eligibility for all individuals enrolled in managed
care.
Sec. 4710. Effective dates.
CHAPTER 2—FLEXIBILITY IN PAYMENT OF PROVIDERS
Sec. 4711. Flexibility in payment methods for hospital, nursing facility, ICF/MR,
and home health services.
Sec. 4712. Payment for center and clinic services.
Sec. 4713. Elimination of obstetrical and pediatric payment rate requirements.
Sec. 4714. Medicaid payment rates for certain medicare cost-sharing.
Sec. 4715. Treatment of veterans’ pensions under medicaid.
CHAPTER 3—FEDERAL PAYMENTS TO STATES
Sec. 4721. Reforming disproportionate share payments under State medicaid pro-
grams.
Sec. 4722. Treatment of State taxes imposed on certain hospitals.
Sec. 4723. Additional funding for State emergency health services furnished to un-
documented aliens.
Sec. 4724. Elimination of waste, fraud, and abuse.
Sec. 4725. Increased FMAPs.
Sec. 4726. Increase in payment limitation for territories.
CHAPTER 4—ELIGIBILITY
Sec. 4731. State option of continuous eligibility for 12 months; clarification of State
option to cover children.
Sec. 4732. Payment of part B premiums.
H. R. 2015—25
Sec. 4733. State option to permit workers with disabilities to buy into medicaid.
Sec. 4734. Penalty for fraudulent eligibility.
Sec. 4735. Treatment of certain settlement payments.
CHAPTER 5—BENEFITS
Sec. 4741. Elimination of requirement to pay for private insurance.
Sec. 4742. Physician qualification requirements.
Sec. 4743. Elimination of requirement of prior institutionalization with respect to
habilitation services furnished under a waiver for home or community-
based services.
Sec. 4744. Study and report on EPSDT benefit.
CHAPTER 6—ADMINISTRATION AND MISCELLANEOUS
Sec. 4751. Elimination of duplicative inspection of care requirements for ICFS/MR
and mental hospitals.
Sec. 4752. Alternative sanctions for noncompliant ICFS/MR.
Sec. 4753. Modification of MMIS requirements.
Sec. 4754. Facilitating imposition of State alternative remedies on noncompliant
nursing facilities.
Sec. 4755. Removal of name from nurse aide registry.
Sec. 4756. Medically accepted indication.
Sec. 4757. Continuation of State-wide section 1115 medicaid waivers.
Sec. 4758. Extension of moratorium.
Sec. 4759. Extension of effective date for State law amendment.
Subtitle I—Programs of All-Inclusive Care for the Elderly (PACE)
Sec. 4801. Coverage of PACE under the medicare program.
Sec. 4802. Establishment of PACE program as medicaid State option.
Sec. 4803. Effective date; transition.
Sec. 4804. Study and reports.
Subtitle J—State Children’s Health Insurance Program
CHAPTER 1—STATE CHILDREN’S HEALTH INSURANCE PROGRAM
Sec. 4901. Establishment of program.
‘‘TITLE XXI—STATE CHILDREN’S HEALTH INSURANCE PROGRAM
‘‘Sec. 2101. Purpose; State child health plans.
‘‘Sec. 2102. General contents of State child health plan; eligibility; outreach.
‘‘Sec. 2103. Coverage requirements for children’s health insurance.
‘‘Sec. 2104. Allotments.
‘‘Sec. 2105. Payments to States.
‘‘Sec. 2106. Process for submission, approval, and amendment of State child
health plans.
‘‘Sec. 2107. Strategic objectives and performance goals; plan administration.
‘‘Sec. 2108. Annual reports; evaluations.
‘‘Sec. 2109. Miscellaneous provisions.
‘‘Sec. 2110. Definitions.
CHAPTER 2—EXPANDED COVERAGE OF CHILDREN UNDER MEDICAID
Sec. 4911. Optional use of State child health assistance funds for enhanced medic-
aid match for expanded medicaid eligibility.
Sec. 4912. Medicaid presumptive eligibility for low-income children.
Sec. 4913. Continuation of medicaid eligibility for disabled children who lose SSI
benefits.
CHAPTER 3—DIABETES GRANT PROGRAMS
Sec. 4921. Special diabetes programs for children with Type I diabetes.
Sec. 4922. Special diabetes programs for Indians.
Sec. 4923. Report on diabetes grant programs.
Subtitle A—Medicare+Choice Program
CHAPTER 1—MEDICARE+CHOICE PROGRAM
Subchapter A—Medicare+Choice Program
SEC. 4001. ESTABLISHMENT OF MEDICARE+CHOICE PROGRAM.
Title XVIII is amended by redesignating part C as part D
and by inserting after part B the following new part:
H. R. 2015—26
‘‘PART C—MEDICARE+CHOICE PROGRAM
‘‘ELIGIBILITY, ELECTION, AND ENROLLMENT
‘‘SEC. 1851. (a) CHOICE
OF MEDICARE BENEFITS THROUGH
MEDICARE+CHOICE PLANS.—
‘‘(1) IN GENERAL.—Subject to the provisions of this section,
each Medicare+Choice eligible individual (as defined in para-
graph (3)) is entitled to elect to receive benefits under this
title—
‘‘(A) through the original medicare fee-for-service pro-
gram under parts A and B, or
‘‘(B) through enrollment in a Medicare+Choice plan
under this part.
‘‘(2) TYPES OF MEDICARE+CHOICE PLANS THAT MAY BE AVAIL-
ABLE.—A Medicare+Choice plan may be any of the following
types of plans of health insurance:
‘‘(A) COORDINATED
CARE
PLANS.—Coordinated care
plans which provide health care services, including but
not limited to health maintenance organization plans (with
or without point of service options), plans offered by pro-
vider-sponsored organizations (as defined in section
1855(d)), and preferred provider organization plans.
‘‘(B) COMBINATION OF MSA PLAN AND CONTRIBUTIONS
TO MEDICARE+CHOICE MSA.—An MSA plan, as defined in
section 
1859(b)(3), 
and 
a 
contribution 
into 
a
Medicare+Choice medical savings account (MSA).
‘‘(C) 
PRIVATE
FEE-FOR-SERVICE
PLANS.—A
Medicare+Choice private fee-for-service plan, as defined
in section 1859(b)(2).
‘‘(3) MEDICARE+CHOICE ELIGIBLE INDIVIDUAL.—
‘‘(A) IN GENERAL.—In this title, subject to subparagraph
(B), the term ‘Medicare+Choice eligible individual’ means
an individual who is entitled to benefits under part A
and enrolled under part B.
‘‘(B) SPECIAL RULE FOR END-STAGE RENAL DISEASE.—
Such term shall not include an individual medically deter-
mined to have end-stage renal disease, except that an
individual who develops end-stage renal disease while
enrolled in a Medicare+Choice plan may continue to be
enrolled in that plan.
‘‘(b) SPECIAL RULES.—
‘‘(1) RESIDENCE REQUIREMENT.—
‘‘(A) IN GENERAL.—Except as the Secretary may other-
wise provide, an individual is eligible to elect a
Medicare+Choice plan offered by a Medicare+Choice
organization only if the plan serves the geographic area
in which the individual resides.
‘‘(B) CONTINUATION
OF
ENROLLMENT
PERMITTED.—
Pursuant to rules specified by the Secretary, the Secretary
shall provide that a plan may offer to all individuals resid-
ing in a geographic area the option to continue enrollment
in the plan, notwithstanding that the individual no longer
resides in the service area of the plan, so long as the
plan provides that individuals exercising this option have,
as part of the basic benefits described in section
1852(a)(1)(A), reasonable access within that geographic
H. R. 2015—27
area to the full range of basic benefits, subject to reasonable
cost sharing liability in obtaining such benefits.
‘‘(2) SPECIAL
RULE
FOR
CERTAIN
INDIVIDUALS
COVERED
UNDER FEHBP OR ELIGIBLE FOR VETERANS OR MILITARY HEALTH
BENEFITS, VETERANS.—
‘‘(A) FEHBP.—An individual who is enrolled in a
health benefit plan under chapter 89 of title 5, United
States Code, is not eligible to enroll in an MSA plan until
such time as the Director of the Office of Management
and Budget certifies to the Secretary that the Office of
Personnel Management has adopted policies which will
ensure that the enrollment of such individuals in such
plans will not result in increased expenditures for the
Federal Government for health benefit plans under such
chapter.
‘‘(B) VA AND
DOD.—The Secretary may apply rules
similar to the rules described in subparagraph (A) in the
case of individuals who are eligible for health care benefits
under chapter 55 of title 10, United States Code, or under
chapter 17 of title 38 of such Code.
‘‘(3) LIMITATION
ON
ELIGIBILITY
OF
QUALIFIED
MEDICARE
BENEFICIARIES AND OTHER MEDICAID BENEFICIARIES TO ENROLL
IN AN MSA PLAN.—An individual who is a qualified medicare
beneficiary (as defined in section 1905(p)(1)), a qualified dis-
abled and working individual (described in section 1905(s)),
an individual described in section 1902(a)(10)(E)(iii), or other-
wise entitled to medicare cost-sharing under a State plan under
title XIX is not eligible to enroll in an MSA plan.
‘‘(4) COVERAGE UNDER MSA PLANS ON A DEMONSTRATION
BASIS.—
‘‘(A) IN GENERAL.—An individual is not eligible to enroll
in an MSA plan under this part—
‘‘(i) on or after January 1, 2003, unless the enroll-
ment is the continuation of such an enrollment in
effect as of such date; or
‘‘(ii) as of any date if the number of such individ-
uals so enrolled as of such date has reached 390,000.
Under rules established by the Secretary, an individual
is not eligible to enroll (or continue enrollment) in an
MSA plan for a year unless the individual provides assur-
ances satisfactory to the Secretary that the individual will
reside in the United States for at least 183 days during
the year.
‘‘(B) EVALUATION.—The Secretary shall regularly
evaluate the impact of permitting enrollment in MSA plans
under this part on selection (including adverse selection),
use of preventive care, access to care, and the financial
status of the Trust Funds under this title.
‘‘(C) REPORTS.—The Secretary shall submit to Congress
periodic reports on the numbers of individuals enrolled
in such plans and on the evaluation being conducted under
subparagraph (B). The Secretary shall submit such a
report, by not later than March 1, 2002, on whether the
time limitation under subparagraph (A)(i) should be
extended or removed and whether to change the numerical
limitation under subparagraph (A)(ii).
‘‘(c) PROCESS FOR EXERCISING CHOICE.—
H. R. 2015—28
‘‘(1) IN GENERAL.—The Secretary shall establish a process
through which elections described in subsection (a) are made
and changed, including the form and manner in which such
elections are made and changed. Such elections shall be made
or changed only during coverage election periods specified under
subsection (e) and shall become effective as provided in sub-
section (f).
‘‘(2) COORDINATION THROUGH MEDICARE+CHOICE ORGANIZA-
TIONS.—
‘‘(A) ENROLLMENT.—Such process shall permit an
individual who wishes to elect a Medicare+Choice plan
offered by a Medicare+Choice organization to make such
election through the filing of an appropriate election form
with the organization.
‘‘(B) DISENROLLMENT.—Such process shall permit an
individual, who has elected a Medicare+Choice plan offered
by a Medicare+Choice organization and who wishes to
terminate such election, to terminate such election through
the filing of an appropriate election form with the organiza-
tion.
‘‘(3) DEFAULT.—
‘‘(A) INITIAL ELECTION.—
‘‘(i) IN GENERAL.—Subject to clause (ii), an individ-
ual who fails to make an election during an initial
election period under subsection (e)(1) is deemed to
have chosen the original medicare fee-for-service pro-
gram option.
‘‘(ii) SEAMLESS CONTINUATION OF COVERAGE.—The
Secretary may establish procedures under which an
individual who is enrolled in a health plan (other than
Medicare+Choice plan) offered by a Medicare+Choice
organization at the time of the initial election period
and who fails to elect to receive coverage other than
through the organization is deemed to have elected
the Medicare+Choice plan offered by the organization
(or, if the organization offers more than one such plan,
such plan or plans as the Secretary identifies under
such procedures).
‘‘(B) CONTINUING
PERIODS.—An individual who has
made (or is deemed to have made) an election under this
section is considered to have continued to make such elec-
tion until such time as—
‘‘(i) the individual changes the election under this
section, or
‘‘(ii) the Medicare+Choice plan with respect to
which such election is in effect is discontinued or,
subject to subsection (b)(1)(B), no longer serves the
area in which the individual resides.
‘‘(d) PROVIDING INFORMATION TO PROMOTE INFORMED CHOICE.—
‘‘(1) IN GENERAL.—The Secretary shall provide for activities
under this subsection to broadly disseminate information to
medicare beneficiaries (and prospective medicare beneficiaries)
on the coverage options provided under this section in order
to promote an active, informed selection among such options.
‘‘(2) PROVISION OF NOTICE.—
‘‘(A) OPEN
SEASON
NOTIFICATION.—At least 15 days
before the beginning of each annual, coordinated election
H. R. 2015—29
period (as defined in subsection (e)(3)(B)), the Secretary
shall mail to each Medicare+Choice eligible individual
residing in an area the following:
‘‘(i) GENERAL INFORMATION.—The general informa-
tion described in paragraph (3).
‘‘(ii) LIST
OF
PLANS
AND
COMPARISON
OF
PLAN
OPTIONS.—A list identifying the Medicare+Choice plans
that are (or will be) available to residents of the area
and information described in paragraph (4) concerning
such plans. Such information shall be presented in
a comparative form.
‘‘(iii) 
ADDITIONAL
INFORMATION.—Any 
other
information that the Secretary determines will assist
the individual in making the election under this sec-
tion.
The mailing of such information shall be coordinated, to
the extent practicable, with the mailing of any annual
notice under section 1804.
‘‘(B) 
NOTIFICATION
TO
NEWLY
ELIGIBLE
MEDICARE+CHOICE
ELIGIBLE
INDIVIDUALS.—To the extent
practicable, the Secretary shall, not later than 30 days
before the beginning of the initial Medicare+Choice enroll-
ment period for an individual described in subsection (e)(1),
mail to the individual the information described in subpara-
graph (A).
‘‘(C) FORM.—The information disseminated under this
paragraph shall be written and formatted using language
that is easily understandable by medicare beneficiaries.
‘‘(D) PERIODIC UPDATING.—The information described
in subparagraph (A) shall be updated on at least an annual
basis 
to 
reflect 
changes 
in 
the 
availability 
of
Medicare+Choice 
plans 
and 
the 
benefits 
and
Medicare+Choice monthly basic and supplemental bene-
ficiary premiums for such plans.
‘‘(3) GENERAL
INFORMATION.—General information under
this paragraph, with respect to coverage under this part during
a year, shall include the following:
‘‘(A) BENEFITS
UNDER
ORIGINAL
MEDICARE
FEE-FOR-
SERVICE PROGRAM OPTION.—A general description of the
benefits covered under the original medicare fee-for-service
program under parts A and B, including—
‘‘(i) covered items and services,
‘‘(ii) beneficiary cost sharing, such as deductibles,
coinsurance, and copayment amounts, and
‘‘(iii) any beneficiary liability for balance billing.
‘‘(B) ELECTION PROCEDURES.—Information and instruc-
tions on how to exercise election options under this section.
‘‘(C) RIGHTS.—A general description of procedural
rights (including grievance and appeals procedures) of bene-
ficiaries under the original medicare fee-for-service pro-
gram and the Medicare+Choice program and the right to
be protected against discrimination based on health status-
related factors under section 1852(b).
‘‘(D) 
INFORMATION
ON
MEDIGAP
AND
MEDICARE
SELECT.—A general description of the benefits, enrollment
rights, and other requirements applicable to medicare
supplemental policies under section 1882 and provisions
H. R. 2015—30
relating to medicare select policies described in section
1882(t).
‘‘(E) POTENTIAL FOR CONTRACT TERMINATION.—The fact
that a Medicare+Choice organization may terminate its
contract, refuse to renew its contract, or reduce the service
area included in its contract, under this part, and the
effect of such a termination, nonrenewal, or service area
reduction may have on individuals enrolled with the
Medicare+Choice plan under this part.
‘‘(4) INFORMATION COMPARING PLAN OPTIONS.—Information
under this paragraph, with respect to a Medicare+Choice plan
for a year, shall include the following:
‘‘(A) BENEFITS.—The benefits covered under the plan,
including the following:
‘‘(i) Covered items and services beyond those pro-
vided under the original medicare fee-for-service pro-
gram.
‘‘(ii) Any beneficiary cost sharing.
‘‘(iii) Any maximum limitations on out-of-pocket
expenses.
‘‘(iv) In the case of an MSA plan, differences in
cost sharing, premiums, and balance billing under such
a plan compared to under other Medicare+Choice
plans.
‘‘(v) In the case of a Medicare+Choice private fee-
for-service plan, differences in cost sharing, premiums,
and balance billing under such a plan compared to
under other Medicare+Choice plans.
‘‘(vi) The extent to which an enrollee may obtain
benefits through out-of-network health care providers.
‘‘(vii) The extent to which an enrollee may select
among in-network providers and the types of providers
participating in the plan’s network.
‘‘(viii) The organization’s coverage of emergency
and urgently needed care.
‘‘(B) PREMIUMS.—The Medicare+Choice monthly basic
beneficiary premium and Medicare+Choice monthly supple-
mental beneficiary premium, if any, for the plan or, in
the case of an MSA plan, the Medicare+Choice monthly
MSA premium.
‘‘(C) SERVICE AREA.—The service area of the plan.
‘‘(D) QUALITY AND PERFORMANCE.—To the extent avail-
able, plan quality and performance indicators for the bene-
fits under the plan (and how they compare to such indica-
tors under the original medicare fee-for-service program
under parts A and B in the area involved), including—
‘‘(i) disenrollment rates for medicare enrollees
electing to receive benefits through the plan for the
previous 2 years (excluding disenrollment due to death
or moving outside the plan’s service area),
‘‘(ii) information on medicare enrollee satisfaction,
‘‘(iii) information on health outcomes, and
‘‘(iv) the recent record regarding compliance of the
plan with requirements of this part (as determined
by the Secretary).
‘‘(E) SUPPLEMENTAL BENEFITS.—Whether the organiza-
tion offering the plan includes mandatory supplemental
H. R. 2015—31
benefits in its base benefit package or offers optional
supplemental benefits and the terms and conditions
(including premiums) for such coverage.
‘‘(5) MAINTAINING
A
TOLL-FREE
NUMBER
AND
INTERNET
SITE.—The Secretary shall maintain a toll-free number for
inquiries regarding Medicare+Choice options and the operation
of this part in all areas in which Medicare+Choice plans are
offered and an Internet site through which individuals may
electronically 
obtain 
information 
on 
such 
options 
and
Medicare+Choice plans.
‘‘(6) USE OF NON-FEDERAL ENTITIES.—The Secretary may
enter into contracts with non-Federal entities to carry out
activities under this subsection.
‘‘(7) PROVISION
OF
INFORMATION.—A Medicare+Choice
organization shall provide the Secretary with such information
on the organization and each Medicare+Choice plan it offers
as may be required for the preparation of the information
referred to in paragraph (2)(A).
‘‘(e) COVERAGE ELECTION PERIODS.—
‘‘(1) INITIAL CHOICE UPON ELIGIBILITY TO MAKE ELECTION
IF MEDICARE+CHOICE PLANS AVAILABLE TO INDIVIDUAL.—If, at
the time an individual first becomes entitled to benefits under
part A and enrolled under part B, there is one or more
Medicare+Choice plans offered in the area in which the individ-
ual resides, the individual shall make the election under this
section during a period specified by the Secretary such that
if the individual elects a Medicare+Choice plan during the
period, coverage under the plan becomes effective as of the
first date on which the individual may receive such coverage.
‘‘(2) OPEN ENROLLMENT AND DISENROLLMENT OPPORTUNI-
TIES.—Subject to paragraph (5)—
‘‘(A) 
CONTINUOUS
OPEN
ENROLLMENT
AND
DISENROLLMENT THROUGH 2001.—At any time during 1998,
1999, 2000, and 2001, a Medicare+Choice eligible individual
may change the election under subsection (a)(1).
‘‘(B) 
CONTINUOUS
OPEN
ENROLLMENT
AND
DISENROLLMENT FOR FIRST 6 MONTHS DURING 2002.—
‘‘(i) IN
GENERAL.—Subject to clause (ii), at any
time during the first 6 months of 2002, or, if the
individual first becomes a Medicare+Choice eligible
individual during 2002, during the first 6 months dur-
ing 2002 in which the individual is a Medicare+Choice
eligible individual, a Medicare+Choice eligible individ-
ual may change the election under subsection (a)(1).
‘‘(ii) LIMITATION OF ONE CHANGE.—An individual
may exercise the right under clause (i) only once. The
limitation under this clause shall not apply to changes
in elections effected during an annual, coordinated elec-
tion period under paragraph (3) or during a special
enrollment period under the first sentence of paragraph
(4).
‘‘(C) 
CONTINUOUS
OPEN
ENROLLMENT
AND
DISENROLLMENT
FOR
FIRST
MONTHS
IN
SUBSEQUENT
YEARS.—
‘‘(i) IN
GENERAL.—Subject to clause (ii), at any
time during the first 3 months of a year after 2002,
or, if the individual first becomes a Medicare+Choice
H. R. 2015—32
eligible individual during a year after 2002, during
the first 3 months of such year in which the individual
is 
a 
Medicare+Choice 
eligible 
individual, 
a
Medicare+Choice eligible individual may change the
election under subsection (a)(1).
‘‘(ii) LIMITATION
OF
ONE
CHANGE
DURING
OPEN
ENROLLMENT PERIOD EACH YEAR.—An individual may
exercise the right under clause (i) only once during
the applicable 3-month period described in such clause
in each year. The limitation under this clause shall
not apply to changes in elections effected during an
annual, coordinated election period under paragraph
(3) or during a special enrollment period under para-
graph (4).
‘‘(3) ANNUAL, COORDINATED ELECTION PERIOD.—
‘‘(A) IN
GENERAL.—Subject to paragraph (5), each
individual who is eligible to make an election under this
section may change such election during an annual, coordi-
nated election period.
‘‘(B) ANNUAL, COORDINATED
ELECTION
PERIOD.—For
purposes of this section, the term ‘annual, coordinated elec-
tion period’ means, with respect to a calendar year (begin-
ning with 2000), the month of November before such year.
‘‘(C) MEDICARE+CHOICE HEALTH INFORMATION FAIRS.—
In the month of November of each year (beginning with
1999), in conjunction with the annual coordinated election
period defined in subparagraph (B), the Secretary shall
provide for a nationally coordinated educational and public-
ity campaign to inform Medicare+Choice eligible individ-
uals about Medicare+Choice plans and the election process
provided under this section.
‘‘(D) SPECIAL INFORMATION CAMPAIGN IN 1998.—During
November 1998 the Secretary shall provide for an edu-
cational and publicity campaign to inform Medicare+Choice
eligible 
individuals 
about 
the 
availability 
of
Medicare+Choice plans, and eligible organizations with
risk-sharing contracts under section 1876, offered in dif-
ferent areas and the election process provided under this
section.
‘‘(4) SPECIAL ELECTION PERIODS.—Effective as of January
1, 2002, an individual may discontinue an election of a
Medicare+Choice plan offered by a Medicare+Choice organiza-
tion other than during an annual, coordinated election period
and make a new election under this section if—
‘‘(A) the organization’s or plan’s certification under this
part has been terminated or the organization has termi-
nated or otherwise discontinued providing the plan in the
area in which the individual resides;
‘‘(B) the individual is no longer eligible to elect the
plan because of a change in the individual’s place of resi-
dence or other change in circumstances (specified by the
Secretary, but not including termination of the individual’s
enrollment on the basis described in clause (i) or (ii) of
subsection (g)(3)(B));
‘‘(C) the individual demonstrates (in accordance with
guidelines established by the Secretary) that—
H. R. 2015—33
‘‘(i) the organization offering the plan substantially
violated a material provision of the organization’s con-
tract under this part in relation to the individual
(including the failure to provide an enrollee on a timely
basis medically necessary care for which benefits are
available under the plan or the failure to provide such
covered care in accordance with applicable quality
standards); or
‘‘(ii) the organization (or an agent or other entity
acting on the organization’s behalf) materially mis-
represented the plan’s provisions in marketing the plan
to the individual; or
‘‘(D) the individual meets such other exceptional condi-
tions as the Secretary may provide.
Effective as of January 1, 2002, an individual who, upon first
becoming eligible for benefits under part A at age 65, enrolls
in a Medicare+Choice plan under this part, the individual may
discontinue the election of such plan, and elect coverage under
the original fee-for-service plan, at any time during the 12-
month period beginning on the effective date of such enrollment.
‘‘(5) SPECIAL RULES FOR MSA PLANS.—Notwithstanding the
preceding provisions of this subsection, an individual—
‘‘(A) may elect an MSA plan only during—
‘‘(i) an initial open enrollment period described
in paragraph (1),
‘‘(ii) 
an 
annual, 
coordinated 
election 
period
described in paragraph (3)(B), or
‘‘(iii) the month of November 1998;
‘‘(B) subject to subparagraph (C), may not discontinue
an election of an MSA plan except during the periods
described in clause (ii) or (iii) of subparagraph (A) and
under the first sentence of paragraph (4); and
‘‘(C) who elects an MSA plan during an annual, coordi-
nated election period, and who never previously had elected
such a plan, may revoke such election, in a manner deter-
mined by the Secretary, by not later than December 15
following the date of the election.
‘‘(6) OPEN ENROLLMENT PERIODS.—Subject to paragraph (5),
a Medicare+Choice organization—
‘‘(A) shall accept elections or changes to elections dur-
ing the initial enrollment periods described in paragraph
(1), during the month of November 1998 and each subse-
quent year (as provided in paragraph (3)), and during spe-
cial election periods described in the first sentence of para-
graph (4); and
‘‘(B) may accept other changes to elections at such
other times as the organization provides.
‘‘(f) EFFECTIVENESS
OF ELECTIONS
AND CHANGES
OF ELEC-
TIONS.—
‘‘(1) DURING INITIAL COVERAGE ELECTION PERIOD.—An elec-
tion of coverage made during the initial coverage election period
under subsection (e)(1)(A) shall take effect upon the date the
individual becomes entitled to benefits under part A and
enrolled under part B, except as the Secretary may provide
(consistent with section 1838) in order to prevent retroactive
coverage.
H. R. 2015—34
‘‘(2) DURING CONTINUOUS OPEN ENROLLMENT PERIODS.—An
election or change of coverage made under subsection (e)(2)
shall take effect with the first day of the first calendar month
following the date on which the election is made.
‘‘(3) ANNUAL, COORDINATED ELECTION PERIOD.—An election
or change of coverage made during an annual, coordinated
election period (as defined in subsection (e)(3)(B)) in a year
shall take effect as of the first day of the following year.
‘‘(4) OTHER PERIODS.—An election or change of coverage
made during any other period under subsection (e)(4) shall
take effect in such manner as the Secretary provides in a
manner consistent (to the extent practicable) with protecting
continuity of health benefit coverage.
‘‘(g) GUARANTEED ISSUE AND RENEWAL.—
‘‘(1) IN GENERAL.—Except as provided in this subsection,
a Medicare+Choice organization shall provide that at any time
during which elections are accepted under this section with
respect to a Medicare+Choice plan offered by the organization,
the organization will accept without restrictions individuals
who are eligible to make such election.
‘‘(2) PRIORITY.—If the Secretary determines that a
Medicare+Choice organization, in relation to a Medicare+Choice
plan it offers, has a capacity limit and the number of
Medicare+Choice eligible individuals who elect the plan under
this section exceeds the capacity limit, the organization may
limit the election of individuals of the plan under this section
but only if priority in election is provided—
‘‘(A) first to such individuals as have elected the plan
at the time of the determination, and
‘‘(B) then to other such individuals in such a manner
that does not discriminate, on a basis described in section
1852(b), among the individuals (who seek to elect the plan).
The preceding sentence shall not apply if it would result in
the enrollment of enrollees substantially nonrepresentative, as
determined in accordance with regulations of the Secretary,
of the medicare population in the service area of the plan.
‘‘(3) LIMITATION ON TERMINATION OF ELECTION.—
‘‘(A) IN
GENERAL.—Subject to subparagraph (B), a
Medicare+Choice organization may not for any reason
terminate the election of any individual under this section
for a Medicare+Choice plan it offers.
‘‘(B) 
BASIS
FOR
TERMINATION
OF
ELECTION.—A
Medicare+Choice organization may terminate an individ-
ual’s election under this section with respect to a
Medicare+Choice plan it offers if—
‘‘(i) any Medicare+Choice monthly basic and
supplemental beneficiary premiums required with
respect to such plan are not paid on a timely basis
(consistent with standards under section 1856 that
provide for a grace period for late payment of such
premiums),
‘‘(ii) the individual has engaged in disruptive
behavior (as specified in such standards), or
‘‘(iii) the plan is terminated with respect to all
individuals under this part in the area in which the
individual resides.
‘‘(C) CONSEQUENCE OF TERMINATION.—
H. R. 2015—35
‘‘(i) TERMINATIONS
FOR
CAUSE.—Any individual
whose election is terminated under clause (i) or (ii)
of subparagraph (B) is deemed to have elected the
original 
medicare 
fee-for-service 
program 
option
described in subsection (a)(1)(A).
‘‘(ii) TERMINATION
BASED
ON
PLAN
TERMINATION
OR SERVICE AREA REDUCTION.—Any individual whose
election is terminated under subparagraph (B)(iii) shall
have a special election period under subsection (e)(4)(A)
in which to change coverage to coverage under another
Medicare+Choice plan. Such an individual who fails
to make an election during such period is deemed
to have chosen to change coverage to the original medi-
care fee-for-service program option described in sub-
section (a)(1)(A).
‘‘(D) ORGANIZATION OBLIGATION WITH RESPECT TO ELEC-
TION FORMS.—Pursuant to a contract under section 1857,
each Medicare+Choice organization receiving an election
form under subsection (c)(2) shall transmit to the Secretary
(at such time and in such manner as the Secretary may
specify) a copy of such form or such other information
respecting the election as the Secretary may specify.
‘‘(h) APPROVAL
OF MARKETING MATERIAL
AND APPLICATION
FORMS.—
‘‘(1) SUBMISSION.—No marketing material or application
form may be distributed by a Medicare+Choice organization
to (or for the use of) Medicare+Choice eligible individuals
unless—
‘‘(A) at least 45 days before the date of distribution
the organization has submitted the material or form to
the Secretary for review, and
‘‘(B) the Secretary has not disapproved the distribution
of such material or form.
‘‘(2) REVIEW.—The standards established under section
1856 shall include guidelines for the review of any material
or form submitted and under such guidelines the Secretary
shall disapprove (or later require the correction of) such mate-
rial or form if the material or form is materially inaccurate
or misleading or otherwise makes a material misrepresentation.
‘‘(3) DEEMED APPROVAL (1-STOP SHOPPING).—In the case of
material or form that is submitted under paragraph (1)(A)
to the Secretary or a regional office of the Department of
Health and Human Services and the Secretary or the office
has not disapproved the distribution of marketing material
or 
form 
under 
paragraph 
(1)(B) 
with 
respect 
to 
a
Medicare+Choice plan in an area, the Secretary is deemed
not to have disapproved such distribution in all other areas
covered by the plan and organization except with regard to
that portion of such material or form that is specific only
to an area involved.
‘‘(4) PROHIBITION OF CERTAIN MARKETING PRACTICES.—Each
Medicare+Choice organization shall conform to fair marketing
standards, in relation to Medicare+Choice plans offered under
this part, included in the standards established under section
1856. Such standards—
H. R. 2015—36
‘‘(A) shall not permit a Medicare+Choice organization
to provide for cash or other monetary rebates as an induce-
ment for enrollment or otherwise, and
‘‘(B) 
may 
include 
a 
prohibition 
against 
a
Medicare+Choice organization (or agent of such an
organization) completing any portion of any election form
used to carry out elections under this section on behalf
of any individual.
‘‘(i) EFFECT OF ELECTION OF MEDICARE+CHOICE PLAN OPTION.—
‘‘(1) PAYMENTS
TO
ORGANIZATIONS.—Subject to sections
1852(a)(5), 1853(g), 1853(h), 1886(d)(11), and 1886(h)(3)(D), pay-
ments under a contract with a Medicare+Choice organization
under section 1853(a) with respect to an individual electing
a Medicare+Choice plan offered by the organization shall be
instead of the amounts which (in the absence of the contract)
would otherwise be payable under parts A and B for items
and services furnished to the individual.
‘‘(2) ONLY ORGANIZATION ENTITLED TO PAYMENT.—Subject
to sections 1853(e), 1853(g), 1853(h), 1857(f)(2), and 1886(d)(11),
and 1886(h)(3)(D), only the Medicare+Choice organization shall
be entitled to receive payments from the Secretary under this
title for services furnished to the individual.
‘‘BENEFITS AND BENEFICIARY PROTECTIONS
‘‘SEC. 1852. (a) BASIC BENEFITS.—
‘‘(1) IN GENERAL.—Except as provided in section 1859(b)(3)
for MSA plans, each Medicare+Choice plan shall provide to
members enrolled under this part, through providers and other
persons that meet the applicable requirements of this title
and part A of title XI—
‘‘(A) those items and services (other than hospice care)
for which benefits are available under parts A and B to
individuals residing in the area served by the plan, and
‘‘(B) 
additional 
benefits 
required 
under 
section
1854(f)(1)(A).
‘‘(2) SATISFACTION OF REQUIREMENT.—
‘‘(A) IN GENERAL.—A Medicare+Choice plan (other than
an MSA plan) offered by a Medicare+Choice organization
satisfies paragraph (1)(A), with respect to benefits for items
and services furnished other than through a provider or
other person that has a contract with the organization
offering the plan, if the plan provides payment in an
amount so that—
‘‘(i) the sum of such payment amount and any
cost sharing provided for under the plan, is equal to
at least
‘‘(ii) the total dollar amount of payment for such
items and services as would otherwise be authorized
under parts A and B (including any balance billing
permitted under such parts).
‘‘(B) REFERENCE TO RELATED PROVISIONS.—For provi-
sion relating to—
‘‘(i) 
limitations 
on 
balance 
billing 
against
Medicare+Choice organizations for non-contract provid-
ers, see sections 1852(k) and 1866(a)(1)(O), and
‘‘(ii) limiting actuarial value of enrollee liability
for covered benefits, see section 1854(e).
H. R. 2015—37
‘‘(3) SUPPLEMENTAL BENEFITS.—
‘‘(A) BENEFITS
INCLUDED
SUBJECT
TO
SECRETARY’S
APPROVAL.—Each Medicare+Choice organization may pro-
vide to individuals enrolled under this part, other than
under an MSA plan, (without affording those individuals
an option to decline the coverage) supplemental health
care benefits that the Secretary may approve. The Sec-
retary shall approve any such supplemental benefits unless
the Secretary determines that including such supplemental
benefits would substantially discourage enrollment by
Medicare+Choice eligible individuals with the organization.
‘‘(B) AT ENROLLEES’ OPTION.—
‘‘(i) 
IN
GENERAL.—Subject 
to 
clause 
(ii), 
a
Medicare+Choice organization may provide to individ-
uals enrolled under this part supplemental health care
benefits that the individuals may elect, at their option,
to have covered.
‘‘(ii) 
SPECIAL
RULE
FOR
MSA
PLANS.—A
Medicare+Choice organization may not provide, under
an MSA plan, supplemental health care benefits that
cover the deductible described in section 1859(b)(2)(B).
In applying the previous sentence, health benefits
described in section 1882(u)(2)(B) shall not be treated
as covering such deductible.
‘‘(C) APPLICATION TO MEDICARE+CHOICE PRIVATE FEE-
FOR-SERVICE PLANS.—Nothing in this paragraph shall be
construed as preventing a Medicare+Choice private fee-
for-service plan from offering supplemental benefits that
include payment for some or all of the balance billing
amounts permitted consistent with section 1852(k) and cov-
erage of additional services that the plan finds to be medi-
cally necessary.
‘‘(4) ORGANIZATION AS SECONDARY PAYER.—Notwithstanding
any other provision of law, a Medicare+Choice organization
may (in the case of the provision of items and services to
an individual under a Medicare+Choice plan under cir-
cumstances in which payment under this title is made second-
ary pursuant to section 1862(b)(2)) charge or authorize the
provider of such services to charge, in accordance with the
charges allowed under a law, plan, or policy described in such
section—
‘‘(A) the insurance carrier, employer, or other entity
which under such law, plan, or policy is to pay for the
provision of such services, or
‘‘(B) such individual to the extent that the individual
has been paid under such law, plan, or policy for such
services.
‘‘(5) NATIONAL COVERAGE DETERMINATIONS.—If there is a
national coverage determination made in the period beginning
on the date of an announcement under section 1853(b) and
ending on the date of the next announcement under such sec-
tion and the Secretary projects that the determination will
result in a significant change in the costs to a Medicare+Choice
organization of providing the benefits that are the subject of
such national coverage determination and that such change
in costs was not incorporated in the determination of the annual
Medicare+Choice capitation rate under section 1853 included
H. R. 2015—38
in the announcement made at the beginning of such period,
then, unless otherwise required by law—
‘‘(A) such determination shall not apply to contracts
under this part until the first contract year that begins
after the end of such period, and
‘‘(B) if such coverage determination provides for cov-
erage of additional benefits or coverage under additional
circumstances, section 1851(i)(1) shall not apply to payment
for such additional benefits or benefits provided under such
additional circumstances until the first contract year that
begins after the end of such period.
‘‘(b) ANTIDISCRIMINATION.—
‘‘(1) BENEFICIARIES.—
‘‘(A) IN
GENERAL.—A Medicare+Choice organization
may not deny, limit, or condition the coverage or provision
of benefits under this part, for individuals permitted to
be enrolled with the organization under this part, based
on any health status-related factor described in section
2702(a)(1) of the Public Health Service Act.
‘‘(B) CONSTRUCTION.—Subparagraph (A) shall not be
construed as requiring a Medicare+Choice organization to
enroll individuals who are determined to have end-stage
renal 
disease, 
except 
as 
provided 
under 
section
1851(a)(3)(B).
‘‘(2) PROVIDERS.—A Medicare+Choice organization shall not
discriminate with respect to participation, reimbursement, or
indemnification as to any provider who is acting within the
scope of the provider’s license or certification under applicable
State law, solely on the basis of such license or certification.
This paragraph shall not be construed to prohibit a plan from
including providers only to the extent necessary to meet the
needs of the plan’s enrollees or from establishing any measure
designed to maintain quality and control costs consistent with
the responsibilities of the plan.
‘‘(c) DISCLOSURE REQUIREMENTS.—
‘‘(1) DETAILED
DESCRIPTION
OF
PLAN
PROVISIONS.—A
Medicare+Choice organization shall disclose, in clear, accurate,
and standardized form to each enrollee with a Medicare+Choice
plan offered by the organization under this part at the time
of enrollment and at least annually thereafter, the following
information regarding such plan:
‘‘(A) SERVICE AREA.—The plan’s service area.
‘‘(B) BENEFITS.—Benefits offered under the plan,
including information described in section 1851(d)(3)(A) and
exclusions from coverage and, if it is an MSA plan, a
comparison of benefits under such a plan with benefits
under other Medicare+Choice plans.
‘‘(C) ACCESS.—The number, mix, and distribution of
plan providers, out-of-network coverage (if any) provided
by the plan, and any point-of-service option (including the
supplemental premium for such option).
‘‘(D) OUT-OF-AREA
COVERAGE.—Out-of-area coverage
provided by the plan.
‘‘(E) EMERGENCY COVERAGE.—Coverage of emergency
services, including—
‘‘(i) the appropriate use of emergency services,
including use of the 911 telephone system or its local
H. R. 2015—39
equivalent in emergency situations and an explanation
of what constitutes an emergency situation;
‘‘(ii) the process and procedures of the plan for
obtaining emergency services; and
‘‘(iii) the locations of (I) emergency departments,
and (II) other settings, in which plan physicians and
hospitals provide emergency services and post-sta-
bilization care.
‘‘(F) SUPPLEMENTAL BENEFITS.—Supplemental benefits
available from the organization offering the plan, includ-
ing—
‘‘(i) 
whether 
the 
supplemental 
benefits 
are
optional,
‘‘(ii) the supplemental benefits covered, and
‘‘(iii) the Medicare+Choice monthly supplemental
beneficiary premium for the supplemental benefits.
‘‘(G) PRIOR
AUTHORIZATION
RULES.—Rules regarding
prior authorization or other review requirements that could
result in nonpayment.
‘‘(H) PLAN GRIEVANCE AND APPEALS PROCEDURES.—All
plan appeal or grievance rights and procedures.
‘‘(I) QUALITY ASSURANCE PROGRAM.—A description of
the organization’s quality assurance program under sub-
section (e).
‘‘(2) DISCLOSURE
UPON
REQUEST.—Upon request of a
Medicare+Choice 
eligible 
individual, 
a 
Medicare+Choice
organization must provide the following information to such
individual:
‘‘(A) The general coverage information and general
comparative plan information made available under clauses
(i) and (ii) of section 1851(d)(2)(A).
‘‘(B) Information on procedures used by the organiza-
tion to control utilization of services and expenditures.
‘‘(C) Information on the number of grievances, redeter-
minations, and appeals and on the disposition in the aggre-
gate of such matters.
‘‘(D) An overall summary description as to the method
of compensation of participating physicians.
‘‘(d) ACCESS TO SERVICES.—
‘‘(1) IN GENERAL.—A Medicare+Choice organization offering
a Medicare+Choice plan may select the providers from whom
the benefits under the plan are provided so long as—
‘‘(A) the organization makes such benefits available
and accessible to each individual electing the plan within
the plan service area with reasonable promptness and in
a manner which assures continuity in the provision of
benefits;
‘‘(B) when medically necessary the organization makes
such benefits available and accessible 24 hours a day and
7 days a week;
‘‘(C) the plan provides for reimbursement with respect
to services which are covered under subparagraphs (A)
and (B) and which are provided to such an individual
other than through the organization, if—
‘‘(i) the services were not emergency services (as
defined in paragraph (3)), but (I) the services were
medically necessary and immediately required because
H. R. 2015—40
of an unforeseen illness, injury, or condition, and (II)
it was not reasonable given the circumstances to obtain
the services through the organization,
‘‘(ii) the services were renal dialysis services and
were provided other than through the organization
because the individual was temporarily out of the
plan’s service area, or
‘‘(iii) the services are maintenance care or post-
stabilization care covered under the guidelines estab-
lished under paragraph (2);
‘‘(D) the organization provides access to appropriate
providers, including credentialed specialists, for medically
necessary treatment and services; and
‘‘(E) coverage is provided for emergency services (as
defined in paragraph (3)) without regard to prior authoriza-
tion or the emergency care provider’s contractual relation-
ship with the organization.
‘‘(2) GUIDELINES RESPECTING COORDINATION OF POST-STA-
BILIZATION CARE.—A Medicare+Choice plan shall comply with
such guidelines as the Secretary may prescribe relating to
promoting efficient and timely coordination of appropriate
maintenance and post-stabilization care of an enrollee after
the enrollee has been determined to be stable under section
1867.
‘‘(3) DEFINITION
OF
EMERGENCY
SERVICES.—In this sub-
section—
‘‘(A) IN
GENERAL.—The term ‘emergency services’
means, with respect to an individual enrolled with an
organization, covered inpatient and outpatient services
that—
‘‘(i) are furnished by a provider that is qualified
to furnish such services under this title, and
‘‘(ii) are needed to evaluate or stabilize an emer-
gency medical condition (as defined in subparagraph
(B)).
‘‘(B) EMERGENCY MEDICAL CONDITION BASED ON PRU-
DENT LAYPERSON.—The term ‘emergency medical condition’
means a medical condition manifesting itself by acute
symptoms of sufficient severity (including severe pain) such
that a prudent layperson, who possesses an average knowl-
edge of health and medicine, could reasonably expect the
absence of immediate medical attention to result in—
‘‘(i) placing the health of the individual (or, with
respect to a pregnant woman, the health of the woman
or her unborn child) in serious jeopardy,
‘‘(ii) serious impairment to bodily functions, or
‘‘(iii) serious dysfunction of any bodily organ or
part.
‘‘(4) 
ASSURING
ACCESS
TO
SERVICES
IN
MEDICARE+CHOICE
PRIVATE
FEE-FOR-SERVICE
PLANS.—In
addition to any other requirements under this part, in
the case of a Medicare+Choice private fee-for-service plan,
the organization offering the plan must demonstrate to
the Secretary that the organization has sufficient number
and range of health care professionals and providers willing
H. R. 2015—41
to provide services under the terms of the plan. The Sec-
retary shall find that an organization has met such require-
ment with respect to any category of health care profes-
sional or provider if, with respect to that category of pro-
vider—
‘‘(A) the plan has established payment rates for
covered services furnished by that category of provider
that are not less than the payment rates provided
for under part A, part B, or both, for such services,
or
‘‘(B) the plan has contracts or agreements with
a sufficient number and range of providers within such
category to provide covered services under the terms
of the plan,
or a combination of both. The previous sentence shall not
be construed as restricting the persons from whom enrollees
under such a plan may obtain covered benefits.
‘‘(e) QUALITY ASSURANCE PROGRAM.—
‘‘(1) IN
GENERAL.—Each Medicare+Choice organization
must have arrangements, consistent with any regulation, for
an ongoing quality assurance program for health care services
it provides to individuals enrolled with Medicare+Choice plans
of the organization.
‘‘(2) ELEMENTS OF PROGRAM.—
‘‘(A) IN GENERAL.—The quality assurance program of
an organization with respect to a Medicare+Choice plan
(other than a Medicare+Choice private fee-for-service plan
or a non-network MSA plan) it offers shall—
‘‘(i) stress health outcomes and provide for the
collection, analysis, and reporting of data (in accord-
ance with a quality measurement system that the Sec-
retary recognizes) that will permit measurement of
outcomes 
and 
other 
indices 
of 
the 
quality 
of
Medicare+Choice plans and organizations;
‘‘(ii) monitor and evaluate high volume and high
risk services and the care of acute and chronic condi-
tions;
‘‘(iii) evaluate the continuity and coordination of
care that enrollees receive;
‘‘(iv) be evaluated on an ongoing basis as to its
effectiveness;
‘‘(v) include measures of consumer satisfaction;
‘‘(vi) provide the Secretary with such access to
information collected as may be appropriate to monitor
and ensure the quality of care provided under this
part;
‘‘(vii) provide review by physicians and other
health care professionals of the process followed in
the provision of such health care services;
‘‘(viii) provide for the establishment of written
protocols for utilization review, based on current stand-
ards of medical practice;
‘‘(ix) have mechanisms to detect both underutiliza-
tion and overutilization of services;
‘‘(x) after identifying areas for improvement, estab-
lish or alter practice parameters;
H. R. 2015—42
‘‘(xi) take action to improve quality and assesses
the effectiveness of such action through systematic
followup; and
‘‘(xii) make available information on quality and
outcomes measures to facilitate beneficiary comparison
and choice of health coverage options (in such form
and on such quality and outcomes measures as the
Secretary determines to be appropriate).
‘‘(B) ELEMENTS OF PROGRAM FOR ORGANIZATIONS OFFER-
ING MEDICARE+CHOICE PRIVATE FEE-FOR-SERVICE PLANS AND
NON-NETWORK MSA PLANS.—The quality assurance program
of an organization with respect to a Medicare+Choice pri-
vate fee-for-service plan or a non-network MSA plan it
offers shall—
‘‘(i) meet the requirements of clauses (i) through
(vi) of subparagraph (A);
‘‘(ii) insofar as it provides for the establishment
of written protocols for utilization review, base such
protocols on current standards of medical practice; and
‘‘(iii) have mechanisms to evaluate utilization of
services and inform providers and enrollees of the
results of such evaluation.
‘‘(C) DEFINITION OF NON-NETWORK MSA PLAN.—In this
subsection, the term ‘non-network MSA plan’ means an
MSA plan offered by a Medicare+Choice organization that
does not provide benefits required to be provided by this
part, in whole or in part, through a defined set of providers
under contract, or under another arrangement, with the
organization.
‘‘(3) EXTERNAL REVIEW.—
‘‘(A) IN GENERAL.—Each Medicare+Choice organization
shall, for each Medicare+Choice plan it operates, have an
agreement with an independent quality review and
improvement organization approved by the Secretary to
perform functions of the type described in sections
1154(a)(4)(B) and 1154(a)(14) with respect to services fur-
nished by Medicare+Choice plans for which payment is
made under this title. The previous sentence shall not
apply to a Medicare+Choice private fee-for-service plan or
a non-network MSA plan that does not employ utilization
review.
‘‘(B) NONDUPLICATION OF ACCREDITATION.—Except in
the case of the review of quality complaints, and consistent
with subparagraph (C), the Secretary shall ensure that
the external review activities conducted under subpara-
graph (A) are not duplicative of review activities conducted
as part of the accreditation process.
‘‘(C) WAIVER
AUTHORITY.—The Secretary may waive
the requirement described in subparagraph (A) in the case
of an organization if the Secretary determines that the
organization has consistently maintained an excellent
record of quality assurance and compliance with other
requirements under this part.
‘‘(4) TREATMENT OF ACCREDITATION.—The Secretary shall
provide that a Medicare+Choice organization is deemed to meet
requirements of paragraphs (1) and (2) of this subsection and
subsection (h) (relating to confidentiality and accuracy of
H. R. 2015—43
enrollee records) if the organization is accredited (and periodi-
cally reaccredited) by a private organization under a process
that the Secretary has determined assures that the organiza-
tion, as a condition of accreditation, applies and enforces stand-
ards with respect to the requirements involved that are no
less stringent than the standards established under section
1856 to carry out the respective requirements.
‘‘(f) GRIEVANCE MECHANISM.—Each Medicare+Choice organiza-
tion must provide meaningful procedures for hearing and resolving
grievances between the organization (including any entity or
individual through which the organization provides health care
services) and enrollees with Medicare+Choice plans of the organiza-
tion under this part.
‘‘(g) COVERAGE
DETERMINATIONS, RECONSIDERATIONS, 
AND
APPEALS.—
‘‘(1) DETERMINATIONS BY ORGANIZATION.—
‘‘(A) IN
GENERAL.—A Medicare+Choice organization
shall have a procedure for making determinations regard-
ing whether an individual enrolled with the plan of the
organization under this part is entitled to receive a health
service under this section and the amount (if any) that
the individual is required to pay with respect to such
service. Subject to paragraph (3), such procedures shall
provide for such determination to be made on a timely
basis.
‘‘(B) EXPLANATION OF DETERMINATION.—Such a deter-
mination that denies coverage, in whole in part, shall be
in writing and shall include a statement in understandable
language of the reasons for the denial and a description
of the reconsideration and appeals processes.
‘‘(2) RECONSIDERATIONS.—
‘‘(A) IN GENERAL.—The organization shall provide for
reconsideration of a determination described in paragraph
(1)(B) upon request by the enrollee involved. The
reconsideration shall be within a time period specified by
the Secretary, but shall be made, subject to paragraph
(3), not later than 60 days after the date of the receipt
of the request for reconsideration.
‘‘(B) PHYSICIAN
DECISION
ON
CERTAIN
RECONSIDER-
ATIONS.—A reconsideration relating to a determination to
deny coverage based on a lack of medical necessity shall
be made only by a physician with appropriate expertise
in the field of medicine which necessitates treatment who
is other than a physician involved in the initial determina-
tion.
‘‘(3) EXPEDITED DETERMINATIONS AND RECONSIDERATIONS.—
‘‘(A) RECEIPT OF REQUESTS.—
‘‘(i) ENROLLEE
REQUESTS.—An enrollee in a
Medicare+Choice plan may request, either in writing
or orally, an expedited determination under paragraph
(1) or an expedited reconsideration under paragraph
(2) by the Medicare+Choice organization.
‘‘(ii) PHYSICIAN REQUESTS.—A physician, regardless
whether the physician is affiliated with the organiza-
tion or not, may request, either in writing or orally,
such an expedited determination or reconsideration.
‘‘(B) ORGANIZATION PROCEDURES.—
H. R. 2015—44
‘‘(i) IN GENERAL.—The Medicare+Choice organiza-
tion shall maintain procedures for expediting organiza-
tion determinations and reconsiderations when, upon
request of an enrollee, the organization determines
that the application of the normal time frame for mak-
ing a determination (or a reconsideration involving
a determination) could seriously jeopardize the life or
health of the enrollee or the enrollee’s ability to regain
maximum function.
‘‘(ii) 
EXPEDITION
REQUIRED
FOR
PHYSICIAN
REQUESTS.—In the case of a request for an expedited
determination or reconsideration made under subpara-
graph (A)(ii), the organization shall expedite the deter-
mination or reconsideration if the request indicates
that the application of the normal time frame for mak-
ing a determination (or a reconsideration involving
a determination) could seriously jeopardize the life or
health of the enrollee or the enrollee’s ability to regain
maximum function
‘‘(iii) TIMELY
RESPONSE.—In cases described in
clauses (i) and (ii), the organization shall notify the
enrollee (and the physician involved, as appropriate)
of the determination or reconsideration under time
limitations established by the Secretary, but not later
than 72 hours of the time of receipt of the request
for the determination or reconsideration (or receipt
of the information necessary to make the determination
or reconsideration), or such longer period as the Sec-
retary may permit in specified cases.
‘‘(4) 
INDEPENDENT
REVIEW
OF
CERTAIN
COVERAGE
DENIALS.—The Secretary shall contract with an independent,
outside entity to review and resolve in a timely manner
reconsiderations that affirm denial of coverage, in whole or
in part.
‘‘(5) APPEALS.—An enrollee with a Medicare+Choice plan
of a Medicare+Choice organization under this part who is
dissatisfied by reason of the enrollee’s failure to receive any
health service to which the enrollee believes the enrollee is
entitled and at no greater charge than the enrollee believes
the enrollee is required to pay is entitled, if the amount in
controversy is $100 or more, to a hearing before the Secretary
to the same extent as is provided in section 205(b), and in
any such hearing the Secretary shall make the organization
a party. If the amount in controversy is $1,000 or more, the
individual or organization shall, upon notifying the other party,
be entitled to judicial review of the Secretary’s final decision
as provided in section 205(g), and both the individual and
the organization shall be entitled to be parties to that judicial
review. In applying subsections (b) and (g) of section 205 as
provided in this paragraph, and in applying section 205(l) there-
to, any reference therein to the Commissioner of Social Security
or the Social Security Administration shall be considered a
reference to the Secretary or the Department of Health and
Human Services, respectively.
‘‘(h) CONFIDENTIALITY AND ACCURACY OF ENROLLEE RECORDS.—
Insofar as a Medicare+Choice organization maintains medical
H. R. 2015—45
records or other health information regarding enrollees under this
part, the Medicare+Choice organization shall establish procedures—
‘‘(1) to safeguard the privacy of any individually identifiable
enrollee information;
‘‘(2) to maintain such records and information in a manner
that is accurate and timely, and
‘‘(3) to assure timely access of enrollees to such records
and information.
‘‘(i) 
INFORMATION
ON
ADVANCE
DIRECTIVES.—Each
Medicare+Choice organization shall meet the requirement of section
1866(f) (relating to maintaining written policies and procedures
respecting advance directives).
‘‘(j) RULES REGARDING PROVIDER PARTICIPATION.—
‘‘(1) PROCEDURES.—Insofar as a Medicare+Choice organiza-
tion offers benefits under a Medicare+Choice plan through
agreements with physicians, the organization shall establish
reasonable procedures relating to the participation (under an
agreement between a physician and the organization) of physi-
cians under such a plan. Such procedures shall include—
‘‘(A) providing notice of the rules regarding participa-
tion,
‘‘(B) providing written notice of participation decisions
that are adverse to physicians, and
‘‘(C) providing a process within the organization for
appealing such adverse decisions, including the presen-
tation of information and views of the physician regarding
such decision.
‘‘(2) 
CONSULTATION
IN
MEDICAL
POLICIES.—A
Medicare+Choice organization shall consult with physicians
who have entered into participation agreements with the
organization regarding the organization’s medical policy, qual-
ity, and medical management procedures.
‘‘(3) PROHIBITING INTERFERENCE WITH PROVIDER ADVICE TO
ENROLLEES.—
‘‘(A) IN GENERAL.—Subject to subparagraphs (B) and
(C), a Medicare+Choice organization (in relation to an
individual enrolled under a Medicare+Choice plan offered
by the organization under this part) shall not prohibit
or otherwise restrict a covered health care professional
(as defined in subparagraph (D)) from advising such an
individual who is a patient of the professional about the
health status of the individual or medical care or treatment
for the individual’s condition or disease, regardless of
whether benefits for such care or treatment are provided
under the plan, if the professional is acting within the
lawful scope of practice.
‘‘(B) 
CONSCIENCE
PROTECTION.—Subparagraph 
(A)
shall not be construed as requiring a Medicare+Choice
plan to provide, reimburse for, or provide coverage of a
counseling or referral service if the Medicare+Choice
organization offering the plan—
‘‘(i) objects to the provision of such service on moral
or religious grounds; and
‘‘(ii) in the manner and through the written
instrumentalities such Medicare+Choice organization
deems appropriate, makes available information on its
policies regarding such service to prospective enrollees
H. R. 2015—46
before or during enrollment and to enrollees within
90 days after the date that the organization or plan
adopts a change in policy regarding such a counseling
or referral service.
‘‘(C) CONSTRUCTION.—Nothing in subparagraph (B)
shall be construed to affect disclosure requirements under
State law or under the Employee Retirement Income Secu-
rity Act of 1974.
‘‘(D) HEALTH CARE PROFESSIONAL DEFINED.—For pur-
poses of this paragraph, the term ‘health care professional’
means a physician (as defined in section 1861(r)) or other
health care professional if coverage for the professional’s
services is provided under the Medicare+Choice plan for
the services of the professional. Such term includes a podia-
trist, optometrist, chiropractor, psychologist, dentist, physi-
cian assistant, physical or occupational therapist and ther-
apy assistant, speech-language pathologist, audiologist, reg-
istered or licensed practical nurse (including nurse practi-
tioner, clinical nurse specialist, certified registered nurse
anesthetist, and certified nurse-midwife), licensed certified
social worker, registered respiratory therapist, and certified
respiratory therapy technician.
‘‘(4) LIMITATIONS ON PHYSICIAN INCENTIVE PLANS.—
‘‘(A) IN GENERAL.—No Medicare+Choice organization
may operate any physician incentive plan (as defined in
subparagraph (B)) unless the following requirements are
met:
‘‘(i) No specific payment is made directly or
indirectly under the plan to a physician or physician
group as an inducement to reduce or limit medically
necessary services provided with respect to a specific
individual enrolled with the organization.
‘‘(ii) If the plan places a physician or physician
group at substantial financial risk (as determined by
the Secretary) for services not provided by the physi-
cian or physician group, the organization—
‘‘(I) provides stop-loss protection for the physi-
cian or group that is adequate and appropriate,
based on standards developed by the Secretary
that take into account the number of physicians
placed at such substantial financial risk in the
group or under the plan and the number of individ-
uals enrolled with the organization who receive
services from the physician or group, and
‘‘(II) conducts periodic surveys of both individ-
uals enrolled and individuals previously enrolled
with the organization to determine the degree of
access of such individuals to services provided by
the organization and satisfaction with the quality
of such services.
‘‘(iii) The organization provides the Secretary with
descriptive information regarding the plan, sufficient
to permit the Secretary to determine whether the plan
is in compliance with the requirements of this subpara-
graph.
‘‘(B) PHYSICIAN
INCENTIVE
PLAN
DEFINED.—In this
paragraph, the term ‘physician incentive plan’ means any
H. R. 2015—47
compensation arrangement between a Medicare+Choice
organization and a physician or physician group that may
directly or indirectly have the effect of reducing or limiting
services provided with respect to individuals enrolled with
the organization under this part.
‘‘(5) 
LIMITATION
ON
PROVIDER
INDEMNIFICATION.—A
Medicare+Choice organization may not provide (directly or
indirectly) for a health care professional, provider of services,
or other entity providing health care services (or group of
such professionals, providers, or entities) to indemnify the
organization against any liability resulting from a civil action
brought for any damage caused to an enrollee with a
Medicare+Choice plan of the organization under this part by
the organization’s denial of medically necessary care.
‘‘(6) SPECIAL RULES FOR MEDICARE+CHOICE PRIVATE FEE-
FOR-SERVICE PLANS.—For purposes of applying this part (includ-
ing subsection (k)(1)) and section 1866(a)(1)(O), a hospital (or
other provider of services), a physician or other health care
professional, or other entity furnishing health care services
is treated as having an agreement or contract in effect with
a Medicare+Choice organization (with respect to an individual
enrolled in a Medicare+Choice private fee-for-service plan it
offers), if—
‘‘(A) the provider, professional, or other entity furnishes
services that are covered under the plan to such an enrollee;
and
‘‘(B) before providing such services, the provider,
professional, or other entity —
‘‘(i) has been informed of the individual’s enroll-
ment under the plan, and
‘‘(ii) either—
‘‘(I) has been informed of the terms and condi-
tions of payment for such services under the plan,
or
‘‘(II) is given a reasonable opportunity to
obtain information concerning such terms and
conditions,
in a manner reasonably designed to effect informed
agreement by a provider.
The previous sentence shall only apply in the absence of an
explicit agreement between such a provider, professional, or
other entity and the Medicare+Choice organization.
‘‘(k) TREATMENT OF SERVICES FURNISHED BY CERTAIN PROVID-
ERS.—
‘‘(1) IN GENERAL.—Except as provided in paragraph (2),
a physician or other entity (other than a provider of services)
that does not have a contract establishing payment amounts
for services furnished to an individual enrolled under this part
with a Medicare+Choice organization described in section
1851(a)(2)(A) shall accept as payment in full for covered services
under this title that are furnished to such an individual the
amounts that the physician or other entity could collect if
the individual were not so enrolled. Any penalty or other provi-
sion of law that applies to such a payment with respect to
an individual entitled to benefits under this title (but not
enrolled with a Medicare+Choice organization under this part)
also applies with respect to an individual so enrolled.
H. R. 2015—48
‘‘(2) APPLICATION TO MEDICARE+CHOICE PRIVATE FEE-FOR-
SERVICE PLANS.—
‘‘(A) BALANCE BILLING LIMITS UNDER MEDICARE+CHOICE
PRIVATE
FEE-FOR-SERVICE
PLANS
IN
CASE
OF
CONTRACT
PROVIDERS.—
‘‘(i) IN
GENERAL.—In the case of an individual
enrolled in a Medicare+Choice private fee-for-service
plan under this part, a physician, provider of services,
or other entity that has a contract (including through
the operation of subsection (j)(6)) establishing a pay-
ment rate for services furnished to the enrollee shall
accept as payment in full for covered services under
this title that are furnished to such an individual an
amount not to exceed (including any deductibles,
coinsurance, copayments, or balance billing otherwise
permitted under the plan) an amount equal to 115
percent of such payment rate.
‘‘(ii) 
PROCEDURES
TO
ENFORCE
LIMITS.—The
Medicare+Choice organization that offers such a plan
shall establish procedures, similar to the procedures
described in section 1848(g)(1)(A), in order to carry
out the previous sentence.
‘‘(iii) 
ASSURING
ENFORCEMENT.—If 
the
Medicare+Choice organization fails to establish and
enforce procedures required under clause (ii), the
organization is subject to intermediate sanctions under
section 1857(g).
‘‘(B) ENROLLEE LIABILITY FOR NONCONTRACT PROVID-
ERS.—For provision—
‘‘(i) establishing minimum payment rate in the
case of noncontract providers under a Medicare+Choice
private fee-for-service plan, see section 1852(a)(2); or
‘‘(ii) limiting enrollee liability in the case of covered
services furnished by such providers, see paragraph
(1) and section 1866(a)(1)(O).
‘‘(C) INFORMATION ON BENEFICIARY LIABILITY.—
‘‘(i) IN GENERAL.—Each Medicare+Choice organiza-
tion that offers a Medicare+Choice private fee-for-serv-
ice plan shall provide that enrollees under the plan
who are furnished services for which payment is sought
under the plan are provided an appropriate explanation
of benefits (consistent with that provided under parts
A and B and, if applicable, under medicare supple-
mental policies) that includes a clear statement of the
amount of the enrollee’s liability (including any liability
for balance billing consistent with this subsection) with
respect to payments for such services.
‘‘(ii) 
ADVANCE
NOTICE
BEFORE
RECEIPT
OF
INPATIENT
HOSPITAL
SERVICES
AND
CERTAIN
OTHER
SERVICES.—In addition, such organization shall, in its
terms and conditions of payments to hospitals for
inpatient hospital services and for other services identi-
fied by the Secretary for which the amount of the
balancing billing under subparagraph (A) could be
substantial, require the hospital to provide to the
enrollee, before furnishing such services and if the
H. R. 2015—49
hospital imposes balance billing under subparagraph
(A)—
‘‘(I) notice of the fact that balance billing is
permitted under such subparagraph for such serv-
ices, and
‘‘(II) a good faith estimate of the likely amount
of such balance billing (if any), with respect to
such services, based upon the presenting condition
of the enrollee.
‘‘PAYMENTS TO MEDICARE+CHOICE ORGANIZATIONS
‘‘SEC. 1853. (a) PAYMENTS TO ORGANIZATIONS.—
‘‘(1) MONTHLY PAYMENTS.—
‘‘(A) IN GENERAL.—Under a contract under section 1857
and subject to subsections (e) and (f) and section 1859(e)(4),
the Secretary shall make monthly payments under this
section in advance to each Medicare+Choice organization,
with respect to coverage of an individual under this part
in a Medicare+Choice payment area for a month, in an
amount equal to 1⁄12 of the annual Medicare+Choice capita-
tion rate (as calculated under subsection (c)) with respect
to that individual for that area, adjusted for such risk
factors as age, disability status, gender, institutional status,
and such other factors as the Secretary determines to be
appropriate, so as to ensure actuarial equivalence. The
Secretary may add to, modify, or substitute for such factors,
if such changes will improve the determination of actuarial
equivalence.
‘‘(B) SPECIAL RULE FOR END-STAGE RENAL DISEASE.—
The Secretary shall establish separate rates of payment
to a Medicare+Choice organization with respect to classes
of individuals determined to have end-stage renal disease
and enrolled in a Medicare+Choice plan of the organization.
Such rates of payment shall be actuarially equivalent to
rates paid to other enrollees in the Medicare+Choice pay-
ment area (or such other area as specified by the Secretary).
In accordance with regulations, the Secretary shall provide
for the application of the seventh sentence of section
1881(b)(7) to payments under this section covering the
provision of renal dialysis treatment in the same manner
as such sentence applies to composite rate payments
described in such sentence.
‘‘(2) ADJUSTMENT TO REFLECT NUMBER OF ENROLLEES.—
‘‘(A) IN GENERAL.—The amount of payment under this
subsection may be retroactively adjusted to take into
account any difference between the actual number of
individuals enrolled with an organization under this part
and the number of such individuals estimated to be so
enrolled in determining the amount of the advance pay-
ment.
‘‘(B) SPECIAL RULE FOR CERTAIN ENROLLEES.—
‘‘(i) IN GENERAL.—Subject to clause (ii), the Sec-
retary may make retroactive adjustments under
subparagraph (A) to take into account individuals
enrolled during the period beginning on the date on
which the individual enrolls with a Medicare+Choice
organization under a plan operated, sponsored, or
H. R. 2015—50
contributed to by the individual’s employer or former
employer (or the employer or former employer of the
individual’s spouse) and ending on the date on which
the individual is enrolled in the organization under
this part, except that for purposes of making such
retroactive adjustments under this subparagraph, such
period may not exceed 90 days.
‘‘(ii) EXCEPTION.—No adjustment may be made
under clause (i) with respect to any individual who
does not certify that the organization provided the
individual with the disclosure statement described in
section 1852(c) at the time the individual enrolled with
the organization.
‘‘(3) ESTABLISHMENT OF RISK ADJUSTMENT FACTORS.—
‘‘(A) REPORT.—The Secretary shall develop, and submit
to Congress by not later than March 1, 1999, a report
on the method of risk adjustment of payment rates under
this section, to be implemented under subparagraph (C),
that accounts for variations in per capita costs based on
health status. Such report shall include an evaluation of
such method by an outside, independent actuary of the
actuarial soundness of the proposal.
‘‘(B) DATA
COLLECTION.—In order to carry out this
paragraph, the Secretary shall require Medicare+Choice
organizations (and eligible organizations with risk-sharing
contracts under section 1876) to submit data regarding
inpatient hospital services for periods beginning on or after
July 1, 1997, and data regarding other services and other
information as the Secretary deems necessary for periods
beginning on or after July 1, 1998. The Secretary may
not require an organization to submit such data before
January 1, 1998.
‘‘(C) INITIAL
IMPLEMENTATION.—The Secretary shall
first provide for implementation of a risk adjustment meth-
odology that accounts for variations in per capita costs
based on health status and other demographic factors for
payments by no later than January 1, 2000.
‘‘(D) UNIFORM APPLICATION TO ALL TYPES OF PLANS.—
Subject to section 1859(e)(4), the methodology shall be
applied uniformly without regard to the type of plan.
‘‘(b) ANNUAL ANNOUNCEMENT OF PAYMENT RATES.—
‘‘(1) 
ANNUAL
ANNOUNCEMENT.—The 
Secretary 
shall
annually determine, and shall announce (in a manner intended
to provide notice to interested parties) not later than March
1 before the calendar year concerned—
‘‘(A) the annual Medicare+Choice capitation rate for
each Medicare+Choice payment area for the year, and
‘‘(B) the risk and other factors to be used in adjusting
such rates under subsection (a)(1)(A) for payments for
months in that year.
‘‘(2) ADVANCE NOTICE OF METHODOLOGICAL CHANGES.—At
least 45 days before making the announcement under para-
graph (1) for a year, the Secretary shall provide for notice
to Medicare+Choice organizations of proposed changes to be
made in the methodology from the methodology and assump-
tions used in the previous announcement and shall provide
H. R. 2015—51
such organizations an opportunity to comment on such proposed
changes.
‘‘(3) EXPLANATION
OF
ASSUMPTIONS.—In each announce-
ment made under paragraph (1), the Secretary shall include
an explanation of the assumptions and changes in methodology
used in the announcement in sufficient detail so that
Medicare+Choice organizations can compute monthly adjusted
Medicare+Choice capitation rates for individuals in each
Medicare+Choice payment area which is in whole or in part
within the service area of such an organization.
‘‘(c) CALCULATION OF ANNUAL MEDICARE+CHOICE CAPITATION
RATES.—
‘‘(1) IN
GENERAL.—For purposes of this part, subject to
paragraphs (6)(C) and (7), each annual Medicare+Choice capita-
tion rate, for a Medicare+Choice payment area for a contract
year consisting of a calendar year, is equal to the largest
of the amounts specified in the following subparagraph (A),
(B), or (C):
‘‘(A) BLENDED CAPITATION RATE.—The sum of—
‘‘(i) the area-specific percentage (as specified under
paragraph (2) for the year) of the annual area-specific
Medicare+Choice 
capitation 
rate 
for 
the
Medicare+Choice payment area, as determined under
paragraph (3) for the year, and
‘‘(ii) the national percentage (as specified under
paragraph (2) for the year) of the input-price-adjusted
annual national Medicare+Choice capitation rate, as
determined under paragraph (4) for the year,
multiplied by the budget neutrality adjustment factor
determined under paragraph (5).
‘‘(B) MINIMUM AMOUNT.—12 multiplied by the following
amount:
‘‘(i) For 1998, $367 (but not to exceed, in the case
of an area outside the 50 States and the District of
Columbia, 150 percent of the annual per capita rate
of payment for 1997 determined under section
1876(a)(1)(C) for the area).
‘‘(ii) For a succeeding year, the minimum amount
specified in this clause (or clause (i)) for the preceding
year 
increased 
by 
the 
national 
per 
capita
Medicare+Choice growth percentage, described in para-
graph (6)(A) for that succeeding year.
‘‘(C) MINIMUM PERCENTAGE INCREASE.—
‘‘(i) For 1998, 102 percent of the annual per capita
rate of payment for 1997 determined under section
1876(a)(1)(C) for the Medicare+Choice payment area.
‘‘(ii) For a subsequent year, 102 percent of the
annual Medicare+Choice capitation rate under this
paragraph for the area for the previous year.
‘‘(2) AREA-SPECIFIC AND NATIONAL PERCENTAGES.—For pur-
poses of paragraph (1)(A)—
‘‘(A) for 1998, the ‘area-specific percentage’ is 90 per-
cent and the ‘national percentage’ is 10 percent,
‘‘(B) for 1999, the ‘area-specific percentage’ is 82 per-
cent and the ‘national percentage’ is 18 percent,
‘‘(C) for 2000, the ‘area-specific percentage’ is 74 per-
cent and the ‘national percentage’ is 26 percent,
H. R. 2015—52
‘‘(D) for 2001, the ‘area-specific percentage’ is 66 per-
cent and the ‘national percentage’ is 34 percent,
‘‘(E) for 2002, the ‘area-specific percentage’ is 58 per-
cent and the ‘national percentage’ is 42 percent, and
‘‘(F) for a year after 2002, the ‘area-specific percentage’
is 50 percent and the ‘national percentage’ is 50 percent.
‘‘(3) ANNUAL AREA-SPECIFIC MEDICARE+CHOICE CAPITATION
RATE.—
‘‘(A) IN GENERAL.—For purposes of paragraph (1)(A),
subject to subparagraph (B), the annual area-specific
Medicare+Choice capitation rate for a Medicare+Choice
payment area—
‘‘(i) for 1998 is, subject to subparagraph (D), the
annual per capita rate of payment for 1997 determined
under section 1876(a)(1)(C) for the area, increased by
the national per capita Medicare+Choice growth
percentage for 1998 (described in paragraph (6)(A));
or
‘‘(ii) for a subsequent year is the annual area-
specific Medicare+Choice capitation rate for the pre-
vious year determined under this paragraph for the
area, 
increased 
by 
the 
national 
per 
capita
Medicare+Choice growth percentage for such subse-
quent year.
‘‘(B) REMOVAL OF MEDICAL EDUCATION FROM CALCULA-
TION OF ADJUSTED AVERAGE PER CAPITA COST.—
‘‘(i) IN GENERAL.—In determining the area-specific
Medicare+Choice capitation rate under subparagraph
(A) for a year (beginning with 1998), the annual per
capita rate of payment for 1997 determined under sec-
tion 1876(a)(1)(C) shall be adjusted to exclude from
the rate the applicable percent (specified in clause
(ii)) of the payment adjustments described in subpara-
graph (C).
‘‘(ii) APPLICABLE PERCENT.—For purposes of clause
(i), the applicable percent for—
‘‘(I) 1998 is 20 percent,
‘‘(II) 1999 is 40 percent,
‘‘(III) 2000 is 60 percent,
‘‘(IV) 2001 is 80 percent, and
‘‘(V) a succeeding year is 100 percent.
‘‘(C) PAYMENT ADJUSTMENT.—
‘‘(i) IN GENERAL.—Subject to clause (ii), the pay-
ment adjustments described in this subparagraph are
payment adjustments which the Secretary estimates
were payable during 1997—
‘‘(I) for the indirect costs of medical education
under section 1886(d)(5)(B), and
‘‘(II) for direct graduate medical education
costs under section 1886(h).
‘‘(ii) TREATMENT
OF
PAYMENTS
COVERED
UNDER
STATE
HOSPITAL
REIMBURSEMENT
SYSTEM.—To the
extent that the Secretary estimates that an annual
per capita rate of payment for 1997 described in clause
(i) reflects payments to hospitals reimbursed under
section 1814(b)(3), the Secretary shall estimate a pay-
ment adjustment that is comparable to the payment
H. R. 2015—53
adjustment that would have been made under clause
(i) if the hospitals had not been reimbursed under
such section.
‘‘(D) TREATMENT OF AREAS WITH HIGHLY VARIABLE PAY-
MENT RATES.—In the case of a Medicare+Choice payment
area for which the annual per capita rate of payment
determined under section 1876(a)(1)(C) for 1997 varies by
more than 20 percent from such rate for 1996, for purposes
of this subsection the Secretary may substitute for such
rate for 1997 a rate that is more representative of the
costs of the enrollees in the area.
‘‘(4) 
INPUT-PRICE-ADJUSTED
ANNUAL
NATIONAL
MEDICARE+CHOICE CAPITATION RATE.—
‘‘(A) IN GENERAL.—For purposes of paragraph (1)(A),
the input-price-adjusted annual national Medicare+Choice
capitation rate for a Medicare+Choice payment area for
a year is equal to the sum, for all the types of medicare
services (as classified by the Secretary), of the product
(for each such type of service) of—
‘‘(i) 
the 
national 
standardized 
annual
Medicare+Choice capitation rate (determined under
subparagraph (B)) for the year,
‘‘(ii) the proportion of such rate for the year which
is attributable to such type of services, and
‘‘(iii) an index that reflects (for that year and that
type of services) the relative input price of such services
in the area compared to the national average input
price of such services.
In applying clause (iii), the Secretary may, subject to
subparagraph (C), apply those indices under this title that
are used in applying (or updating) national payment rates
for specific areas and localities.
‘‘(B) 
NATIONAL
STANDARDIZED
ANNUAL
MEDICARE+CHOICE
CAPITATION
RATE.—In subparagraph
(A)(i), the ‘national standardized annual Medicare+Choice
capitation rate’ for a year is equal to—
‘‘(i) the sum (for all Medicare+Choice payment
areas) of the product of—
‘‘(I) the annual area-specific Medicare+Choice
capitation rate for that year for the area under
paragraph (3), and
‘‘(II) the average number of medicare bene-
ficiaries residing in that area in the year, multi-
plied by the average of the risk factor weights
used to adjust payments under subsection (a)(1)(A)
for such beneficiaries in such area; divided by
‘‘(ii) the sum of the products described in clause
(i)(II) for all areas for that year.
‘‘(C) SPECIAL RULES FOR 1998.—In applying this para-
graph for 1998—
‘‘(i) medicare services shall be divided into 2 types
of services: part A services and part B services;
‘‘(ii) the proportions described in subparagraph
(A)(ii)—
‘‘(I) for part A services shall be the ratio
(expressed as a percentage) of the national average
annual per capita rate of payment for part A for
H. R. 2015—54
1997 to the total national average annual per cap-
ita rate of payment for parts A and B for 1997,
and
‘‘(II) for part B services shall be 100 percent
minus the ratio described in subclause (I);
‘‘(iii) for part A services, 70 percent of payments
attributable to such services shall be adjusted by the
index used under section 1886(d)(3)(E) to adjust pay-
ment rates for relative hospital wage levels for hos-
pitals located in the payment area involved;
‘‘(iv) for part B services—
‘‘(I) 66 percent of payments attributable to
such services shall be adjusted by the index of
the geographic area factors under section 1848(e)
used to adjust payment rates for physicians’ serv-
ices furnished in the payment area, and
‘‘(II) of the remaining 34 percent of the amount
of such payments, 40 percent shall be adjusted
by the index described in clause (iii); and
‘‘(v) the index values shall be computed based only
on the beneficiary population who are 65 years of age
or older and who are not determined to have end
stage renal disease.
The Secretary may continue to apply the rules described
in this subparagraph (or similar rules) for 1999.
‘‘(5) PAYMENT ADJUSTMENT BUDGET NEUTRALITY FACTOR.—
For purposes of paragraph (1)(A), for each year, the Secretary
shall determine a budget neutrality adjustment factor so that
the aggregate of the payments under this part shall equal
the aggregate payments that would have been made under
this part if payment were based entirely on area-specific capita-
tion rates.
‘‘(6) NATIONAL
PER
CAPITA
MEDICARE+CHOICE
GROWTH
PERCENTAGE DEFINED.—
‘‘(A) IN GENERAL.—In this part, the ‘national per capita
Medicare+Choice growth percentage’ for a year is the
percentage determined by the Secretary, by March 1st
before the beginning of the year involved, to reflect the
Secretary’s estimate of the projected per capita rate of
growth in expenditures under this title for an individual
entitled to benefits under part A and enrolled under part
B, reduced by the number of percentage points specified
in subparagraph (B) for the year. Separate determinations
may be made for aged enrollees, disabled enrollees, and
enrollees with end-stage renal disease.
‘‘(B) ADJUSTMENT.—The number of percentage points
specified in this subparagraph is—
‘‘(i) for 1998, 0.8 percentage points,
‘‘(ii) for 1999, 0.5 percentage points,
‘‘(iii) for 2000, 0.5 percentage points,
‘‘(iv) for 2001, 0.5 percentage points,
‘‘(v) for 2002, 0.5 percentage points, and
‘‘(vi) for a year after 2002, 0 percentage points.
‘‘(C) ADJUSTMENT FOR OVER OR UNDER PROJECTION OF
NATIONAL PER CAPITA MEDICARE+CHOICE GROWTH PERCENT-
AGE.—Beginning with rates calculated for 1999, before
computing rates for a year as described in paragraph (1),
H. R. 2015—55
the Secretary shall adjust all area-specific and national
Medicare+Choice capitation rates (and beginning in 2000,
the minimum amount) for the previous year for the dif-
ferences between the projections of the national per capita
Medicare+Choice growth percentage for that year and pre-
vious years and the current estimate of such percentage
for such years.
‘‘(7) ADJUSTMENT
FOR
NATIONAL
COVERAGE
DETERMINA-
TIONS.—If the Secretary makes a determination with respect
to coverage under this title 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 peri-
ods after any period described in section 1852(a)(5)), the Sec-
retary shall adjust appropriately the payments to such
organizations under this part.
‘‘(d) MEDICARE+CHOICE PAYMENT AREA DEFINED.—
‘‘(1) IN GENERAL.—In this part, except as provided in para-
graph (3), the term ‘Medicare+Choice payment area’ means
a county, or equivalent area specified by the Secretary.
‘‘(2) RULE FOR ESRD BENEFICIARIES.—In the case of individ-
uals who are determined to have end stage renal disease,
the Medicare+Choice payment area shall be a State or such
other payment area as the Secretary specifies.
‘‘(3) GEOGRAPHIC ADJUSTMENT.—
‘‘(A) IN GENERAL.—Upon written request of the chief
executive officer of a State for a contract year (beginning
after 1998) made by not later than February 1 of the
previous year, the Secretary shall make a geographic
adjustment to a Medicare+Choice payment area in the
State otherwise determined under paragraph (1)—
‘‘(i) to a single statewide Medicare+Choice payment
area,
‘‘(ii) to the metropolitan based system described
in subparagraph (C), or
‘‘(iii) to consolidating into a single Medicare+Choice
payment area noncontiguous counties (or equivalent
areas described in paragraph (1)) within a State.
Such adjustment shall be effective for payments for months
beginning with January of the year following the year
in which the request is received.
‘‘(B) BUDGET
NEUTRALITY
ADJUSTMENT.—In the case
of a State requesting an adjustment under this paragraph,
the Secretary shall initially (and annually thereafter)
adjust the payment rates otherwise established under this
section for Medicare+Choice payment areas in the State
in a manner so that the aggregate of the payments under
this section in the State shall not exceed the aggregate
payments that would have been made under this section
for Medicare+Choice payment areas in the State in the
absence of the adjustment under this paragraph.
‘‘(C) METROPOLITAN BASED SYSTEM.—The metropolitan
based system described in this subparagraph is one in
which—
‘‘(i) all the portions of each metropolitan statistical
area in the State or in the case of a consolidated
metropolitan statistical area, all of the portions of each
primary metropolitan statistical area within the
H. R. 2015—56
consolidated area within the State, are treated as a
single Medicare+Choice payment area, and
‘‘(ii) all areas in the State that do not fall within
a metropolitan statistical area are treated as a single
Medicare+Choice payment area.
‘‘(D) AREAS.—In subparagraph (C), the terms ‘metro-
politan statistical area’, ‘consolidated metropolitan statis-
tical area’, and ‘primary metropolitan statistical area’ mean
any area designated as such by the Secretary of Commerce.
‘‘(e) SPECIAL RULES FOR INDIVIDUALS ELECTING MSA PLANS.—
‘‘(1) IN GENERAL.—If the amount of the Medicare+Choice
monthly MSA premium (as defined in section 1854(b)(2)(C))
for an MSA plan for a year is less than 1⁄12 of the annual
Medicare+Choice capitation rate applied under this section for
the area and year involved, the Secretary shall deposit an
amount equal to 100 percent of such difference in a
Medicare+Choice MSA established (and, if applicable, des-
ignated) by the individual under paragraph (2).
‘‘(2) 
ESTABLISHMENT
AND
DESIGNATION
OF
MEDICARE+CHOICE MEDICAL SAVINGS ACCOUNT AS REQUIREMENT
FOR PAYMENT OF CONTRIBUTION.—In the case of an individual
who has elected coverage under an MSA plan, no payment
shall be made under paragraph (1) on behalf of an individual
for a month unless the individual—
‘‘(A) has established before the beginning of the month
(or by such other deadline as the Secretary may specify)
a Medicare+Choice MSA (as defined in section 138(b)(2)
of the Internal Revenue Code of 1986), and
‘‘(B) if the individual has established more than one
such Medicare+Choice MSA, has designated one of such
accounts as the individual’s Medicare+Choice MSA for pur-
poses of this part.
Under rules under this section, such an individual may change
the designation of such account under subparagraph (B) for
purposes of this part.
‘‘(3) LUMP-SUM DEPOSIT OF MEDICAL SAVINGS ACCOUNT CON-
TRIBUTION.—In the case of an individual electing an MSA plan
effective beginning with a month in a year, the amount of
the contribution to the Medicare+Choice MSA on behalf of
the individual for that month and all successive months in
the year shall be deposited during that first month. In the
case of a termination of such an election as of a month before
the end of a year, the Secretary shall provide for a procedure
for the recovery of deposits attributable to the remaining
months in the year.
‘‘(f) PAYMENTS
FROM
TRUST
FUND.—The payment to a
Medicare+Choice organization under this section for individuals
enrolled under this part with the organization and payments to
a Medicare+Choice MSA under subsection (e)(1) shall be made
from the Federal Hospital Insurance Trust Fund and the Federal
Supplementary Medical Insurance Trust Fund in such proportion
as the Secretary determines reflects the relative weight that benefits
under part A and under part B represents of the actuarial value
of the total benefits under this title. Monthly payments otherwise
payable under this section for October 2000 shall be paid on the
first business day of such month. Monthly payments otherwise
payable under this section for October 2001 shall be paid on the
H. R. 2015—57
last business day of September 2001. Monthly payments otherwise
payable under this section for October 2006 shall be paid on the
first business day of October 2006.
‘‘(g) SPECIAL RULE FOR CERTAIN INPATIENT HOSPITAL STAYS.—
In the case of an individual who is receiving inpatient hospital
services from a subsection (d) hospital (as defined in section
1886(d)(1)(B)) as of the effective date of the individual’s—
‘‘(1) election under this part of a Medicare+Choice plan
offered by a Medicare+Choice organization—
‘‘(A) payment for such services until the date of the
individual’s discharge shall be made under this title
through the Medicare+Choice plan or the original medicare
fee-for-service 
program 
option 
described 
in 
section
1851(a)(1)(A) (as the case may be) elected before the elec-
tion with such organization,
‘‘(B) the elected organization shall not be financially
responsible for payment for such services until the date
after the date of the individual’s discharge, and
‘‘(C) the organization shall nonetheless be paid the
full amount otherwise payable to the organization under
this part; or
‘‘(2) 
termination 
of 
election 
with 
respect 
to 
a
Medicare+Choice organization under this part—
‘‘(A) the organization shall be financially responsible
for payment for such services after such date and until
the date of the individual’s discharge,
‘‘(B) payment for such services during the stay shall
not be made under section 1886(d) or by any succeeding
Medicare+Choice organization, and
‘‘(C) the terminated organization shall not receive any
payment with respect to the individual under this part
during the period the individual is not enrolled.
‘‘(h) SPECIAL RULE FOR HOSPICE CARE.—
‘‘(1) INFORMATION.—A contract under this part shall require
the Medicare+Choice organization to inform each individual
enrolled under this part with a Medicare+Choice plan offered
by the organization about the availability of hospice care if—
‘‘(A) a hospice program participating under this title
is located within the organization’s service area; or
‘‘(B) it is common practice to refer patients to hospice
programs outside such service area.
‘‘(2) PAYMENT.—If an individual who is enrolled with a
Medicare+Choice organization under this part makes an elec-
tion under section 1812(d)(1) to receive hospice care from a
particular hospice program—
‘‘(A) payment for the hospice care furnished to the
individual shall be made to the hospice program elected
by the individual by the Secretary;
‘‘(B) payment for other services for which the individual
is eligible notwithstanding the individual’s election of hos-
pice care under section 1812(d)(1), including services not
related to the individual’s terminal illness, shall be made
by the Secretary to the Medicare+Choice organization or
the provider or supplier of the service instead of payments
calculated under subsection (a); and
‘‘(C) the Secretary shall continue to make monthly
payments to the Medicare+Choice organization in an
H. R. 2015—58
amount equal to the value of the additional benefits
required under section 1854(f)(1)(A).
‘‘PREMIUMS
‘‘SEC. 1854. (a) SUBMISSION
OF PROPOSED PREMIUMS
AND
RELATED INFORMATION.—
(1) IN GENERAL.—Not later than May 1 of each year, each
Medicare+Choice organization shall submit to the Secretary,
in a form and manner specified by the Secretary and for each
Medicare+Choice plan for the service area in which it intends
to be offered in the following year—
‘‘(A) the information described in paragraph (2), (3),
or (4) for the type of plan involved; and
‘‘(B) the enrollment capacity (if any) in relation to
the plan and area.
‘‘(2) INFORMATION
REQUIRED
FOR
COORDINATED
CARE
PLANS.—For a Medicare+Choice plan described in section
1851(a)(2)(A), the information described in this paragraph is
as follows:
‘‘(A) BASIC (AND ADDITIONAL) BENEFITS.—For benefits
described in 1852(a)(1)(A)—
‘‘(i) the adjusted community rate (as defined in
subsection (f)(3));
‘‘(ii) the Medicare+Choice monthly basic bene-
ficiary premium (as defined in subsection (b)(2)(A));
‘‘(iii) a description of deductibles, coinsurance, and
copayments applicable under the plan and the actuar-
ial value of such deductibles, coinsurance, and copay-
ments, described in subsection (e)(1)(A); and
‘‘(iv) if required under subsection (f)(1), a descrip-
tion of the additional benefits to be provided pursuant
to such subsection and the value determined for such
proposed benefits under such subsection.
‘‘(B) SUPPLEMENTAL BENEFITS.—For benefits described
in 1852(a)(3)—
‘‘(i) the adjusted community rate (as defined in
subsection (f)(3));
‘‘(ii) the Medicare+Choice monthly supplemental
beneficiary 
premium 
(as 
defined 
in 
subsection
(b)(2)(B)); and
‘‘(iii) a description of deductibles, coinsurance, and
copayments applicable under the plan and the actuar-
ial value of such deductibles, coinsurance, and copay-
ments, described in subsection (e)(2).
‘‘(3) REQUIREMENTS FOR MSA PLANS.—For an MSA plan
described, the information described in this paragraph is as
follows:
‘‘(A) BASIC (AND ADDITIONAL) BENEFITS.—For benefits
described 
in 
1852(a)(1)(A), 
the 
amount 
of 
the
Medicare+Choice monthly MSA premium.
‘‘(B) SUPPLEMENTAL BENEFITS.—For benefits described
in 1852(a)(3), the amount of the Medicare+Choice monthly
supplementary beneficiary premium.
‘‘(4) REQUIREMENTS FOR PRIVATE FEE-FOR-SERVICE PLANS.—
For a Medicare+Choice plan described in section 1851(a)(2)(C)
for benefits described in 1852(a)(1)(A), the information
described in this paragraph is as follows:
H. R. 2015—59
‘‘(A) BASIC (AND ADDITIONAL) BENEFITS.—For benefits
described in 1852(a)(1)(A)—
‘‘(i) the adjusted community rate (as defined in
subsection (f)(3));
‘‘(ii) the amount of the Medicare+Choice monthly
basic beneficiary premium;
‘‘(iii) a description of the deductibles, coinsurance,
and copayments applicable under the plan, and the
actuarial value of such deductibles, coinsurance, and
copayments, as described in subsection (e)(4)(A); and
‘‘(iv) if required under subsection (f)(1), a descrip-
tion of the additional benefits to be provided pursuant
to such subsection and the value determined for such
proposed benefits under such subsection.
‘‘(B) SUPPLEMENTAL BENEFITS.—For benefits described
in 1852(a)(3), the amount of the Medicare+Choice monthly
supplemental beneficiary premium (as defined in sub-
section (b)(2)(B)).
‘‘(5) REVIEW.—
‘‘(A) IN GENERAL.—Subject to subparagraph (B), the
Secretary shall review the adjusted community rates, the
amounts of the basic and supplemental premiums, and
values filed under this subsection and shall approve or
disapprove such rates, amounts, and value so submitted.
‘‘(B) EXCEPTION.—The Secretary shall not review,
approve, or disapprove the amounts submitted under para-
graph (3) or subparagraphs (A)(ii) and (B) of paragraph
(4).
‘‘(b) MONTHLY PREMIUM CHARGED.—
‘‘(1) IN GENERAL.—
‘‘(A) RULE FOR OTHER THAN MSA PLANS.—The monthly
amount of the premium charged to an individual enrolled
in a Medicare+Choice plan (other than an MSA plan)
offered by a Medicare+Choice organization shall be equal
to the sum of the Medicare+Choice monthly basic bene-
ficiary premium and the Medicare+Choice monthly supple-
mentary beneficiary premium (if any).
‘‘(B) MSA PLANS.—The monthly amount of the pre-
mium charged to an individual enrolled in an MSA plan
offered by a Medicare+Choice organization shall be equal
to the Medicare+Choice monthly supplemental beneficiary
premium (if any).
‘‘(2) PREMIUM TERMINOLOGY DEFINED.—For purposes of this
part:
‘‘(A) THE MEDICARE+CHOICE
MONTHLY
BASIC
BENE-
FICIARY
PREMIUM.—The term ‘Medicare+Choice monthly
basic beneficiary premium’ means, with respect to a
Medicare+Choice plan, the amount authorized to be
charged under subsection (e)(1) for the plan, or, in the
case of a Medicare+Choice private fee-for-service plan, the
amount filed under subsection (a)(4)(A)(ii).
‘‘(B) MEDICARE+CHOICE MONTHLY SUPPLEMENTAL BENE-
FICIARY
PREMIUM.—The term ‘Medicare+Choice monthly
supplemental beneficiary premium’ means, with respect
to a Medicare+Choice plan, the amount authorized to be
charged under subsection (e)(2) for the plan or, in the
case of a MSA plan or Medicare+Choice private fee-for-
H. R. 2015—60
service plan, the amount filed under paragraph (3)(B) or
(4)(B) of subsection (a).
‘‘(C) MEDICARE+CHOICE MONTHLY MSA PREMIUM.—The
term ‘Medicare+Choice monthly MSA premium’ means,
with respect to a Medicare+Choice plan, the amount of
such premium filed under subsection (a)(3)(A) for the plan.
‘‘(c) UNIFORM PREMIUM.—The Medicare+Choice monthly basic
and supplemental beneficiary premium, the Medicare+Choice
monthly MSA premium charged under subsection (b) of a
Medicare+Choice organization under this part may not vary among
individuals enrolled in the plan.
‘‘(d) TERMS AND CONDITIONS OF IMPOSING PREMIUMS.—Each
Medicare+Choice organization shall permit the payment of
Medicare+Choice monthly basic and supplemental beneficiary pre-
miums on a monthly basis, may terminate election of individuals
for a Medicare+Choice plan for failure to make premium payments
only in accordance with section 1851(g)(3)(B)(i), and may not provide
for cash or other monetary rebates as an inducement for enrollment
or otherwise.
‘‘(e) LIMITATION ON ENROLLEE LIABILITY.—
‘‘(1) FOR BASIC AND ADDITIONAL BENEFITS.—In no event
may—
‘‘(A) the Medicare+Choice monthly basic beneficiary
premium (multiplied by 12) and the actuarial value of
the deductibles, coinsurance, and copayments applicable
on average to individuals enrolled under this part with
a Medicare+Choice plan described in section 1851(a)(2)(A)
of an organization with respect to required benefits
described in section 1852(a)(1)(A) and additional benefits
(if any) required under subsection (f)(1)(A) for a year,
exceed
‘‘(B) the actuarial value of the deductibles, coinsurance,
and copayments that would be applicable on average to
individuals entitled to benefits under part A and enrolled
under 
part 
B 
if 
they 
were 
not 
members 
of 
a
Medicare+Choice organization for the year.
‘‘(2) FOR SUPPLEMENTAL BENEFITS.—If the Medicare+Choice
organization provides to its members enrolled under this part
in a Medicare+Choice plan described in section 1851(a)(2)(A)
with respect to supplemental benefits described in section
1852(a)(3), the sum of the Medicare+Choice monthly supple-
mental beneficiary premium (multiplied by 12) charged and
the actuarial value of its deductibles, coinsurance, and copay-
ments charged with respect to such benefits may not exceed
the adjusted community rate for such benefits (as defined in
subsection (f)(3)).
‘‘(3) DETERMINATION
ON
OTHER
BASIS.—If the Secretary
determines that adequate data are not available to determine
the actuarial value under paragraph (1)(A) or (2), the Secretary
may determine such amount with respect to all individuals
in same geographic area, the State, or in the United States,
eligible to enroll in the Medicare+Choice plan involved under
this part or on the basis of other appropriate data.
‘‘(4) SPECIAL RULE FOR PRIVATE FEE-FOR-SERVICE PLANS.—
With respect to a Medicare+Choice private fee-for-service plan
(other than a plan that is an MSA plan), in no event may—
H. R. 2015—61
‘‘(A) the actuarial value of the deductibles, coinsurance,
and copayments applicable on average to individuals
enrolled under this part with such a plan of an organization
with respect to required benefits described in section
1852(a)(1), exceed
‘‘(B) the actuarial value of the deductibles, coinsurance,
and copayments that would be applicable on average to
individuals entitled to benefits under part A and enrolled
under 
part 
B 
if 
they 
were 
not 
members 
of 
a
Medicare+Choice organization for the year.
‘‘(f) REQUIREMENT FOR ADDITIONAL BENEFITS.—
‘‘(1) REQUIREMENT.—
‘‘(A) IN GENERAL.—Each Medicare+Choice organization
(in relation to a Medicare+Choice plan, other than an MSA
plan, it offers) shall provide that if there is an excess
amount (as defined in subparagraph (B)) for the plan for
a contract year, subject to the succeeding provisions of
this subsection, the organization shall provide to individ-
uals such additional benefits (as the organization may
specify) in a value which the Secretary determines is at
least equal to the adjusted excess amount (as defined in
subparagraph (C)).
‘‘(B) EXCESS AMOUNT.—For purposes of this paragraph,
the ‘excess amount’, for an organization for a plan, is the
amount (if any) by which—
‘‘(i) the average of the capitation payments made
to the organization under section 1853 for the plan
at the beginning of contract year, exceeds
‘‘(ii) the actuarial value of the required benefits
described in section 1852(a)(1)(A) under the plan for
individuals under this part, as determined based upon
an adjusted community rate described in paragraph
(3) (as reduced for the actuarial value of the coinsur-
ance, copayments, and deductibles under parts A and
B).
‘‘(C) ADJUSTED EXCESS AMOUNT.—For purposes of this
paragraph, the ‘adjusted excess amount’, for an organiza-
tion for a plan, is the excess amount reduced to reflect
any amount withheld and reserved for the organization
for the year under paragraph (2).
‘‘(D) UNIFORM APPLICATION.—This paragraph shall be
applied uniformly for all enrollees for a plan.
‘‘(E) CONSTRUCTION.—Nothing in this subsection shall
be construed as preventing a Medicare+Choice organization
from providing supplemental benefits (described in section
1852(a)(3)) that are in addition to the health care benefits
otherwise required to be provided under this paragraph
and from imposing a premium for such supplemental bene-
fits.
‘‘(2) STABILIZATION FUND.—A Medicare+Choice organization
may provide that a part of the value of an excess amount
described in paragraph (1) be withheld and reserved in the
Federal Hospital Insurance Trust Fund and in the Federal
Supplementary Medical Insurance Trust Fund (in such propor-
tions as the Secretary determines to be appropriate) by the
Secretary for subsequent annual contract periods, to the extent
required to stabilize and prevent undue fluctuations in the
H. R. 2015—62
additional benefits offered in those subsequent periods by the
organization in accordance with such paragraph. Any of such
value of the amount reserved which is not provided as addi-
tional benefits described in paragraph (1)(A) to individuals
electing the Medicare+Choice plan of the organization in accord-
ance with such paragraph prior to the end of such periods,
shall revert for the use of such trust funds.
‘‘(3) ADJUSTED COMMUNITY RATE.—For purposes of this sub-
section, subject to paragraph (4), the term ‘adjusted community
rate’ for a service or services means, at the election of a
Medicare+Choice organization, either—
‘‘(A) the rate of payment for that service or services
which the Secretary annually determines would apply to
an individual electing a Medicare+Choice plan under this
part if the rate of payment were determined under a
‘community rating system’ (as defined in section 1302(8)
of the Public Health Service Act, other than subparagraph
(C)), or
‘‘(B) such portion of the weighted aggregate premium,
which the Secretary annually estimates would apply to
such an individual, as the Secretary annually estimates
is attributable to that service or services,
but adjusted for differences between the utilization characteris-
tics of the individuals electing coverage under this part and
the utilization characteristics of the other enrollees with the
plan (or, if the Secretary finds that adequate data are not
available to adjust for those differences, the differences between
the utilization characteristics of individuals selecting other
Medicare+Choice coverage, or Medicare+Choice eligible individ-
uals in the area, in the State, or in the United States, eligible
to elect Medicare+Choice coverage under this part and the
utilization characteristics of the rest of the population in the
area, in the State, or in the United States, respectively).
‘‘(4) DETERMINATION
BASED
ON
INSUFFICIENT
DATA.—For
purposes of this subsection, if the Secretary finds that there
is insufficient enrollment experience to determine an average
of the capitation payments to be made under this part at
the beginning of a contract period or to determine (in the
case of a newly operated provider-sponsored organization or
other new organization) the adjusted community rate for the
organization, the Secretary may determine such an average
based on the enrollment experience of other contracts entered
into under this part and may determine such a rate using
data in the general commercial marketplace.
‘‘(g) PROHIBITION OF STATE IMPOSITION OF PREMIUM TAXES.—
No State may impose a premium tax or similar tax with respect
to payments to Medicare+Choice organizations under section 1853.
‘‘ORGANIZATIONAL
AND
FINANCIAL
REQUIREMENTS
FOR
MEDICARE+CHOICE ORGANIZATIONS; PROVIDER-SPONSORED ORGANI-
ZATIONS
‘‘SEC. 1855. (a) ORGANIZED AND LICENSED UNDER STATE LAW.—
‘‘(1) IN
GENERAL.—Subject to paragraphs (2) and (3), a
Medicare+Choice organization shall be organized and licensed
under State law as a risk-bearing entity eligible to offer health
insurance or health benefits coverage in each State in which
it offers a Medicare+Choice plan.
H. R. 2015—63
‘‘(2) 
SPECIAL
EXCEPTION
FOR
PROVIDER-SPONSORED
ORGANIZATIONS.—
‘‘(A) IN GENERAL.—In the case of a provider-sponsored
organization that seeks to offer a Medicare+Choice plan
in a State, the Secretary shall waive the requirement of
paragraph (1) that the organization be licensed in that
State if—
‘‘(i) the organization files an application for such
waiver with the Secretary by not later than November
1, 2002, and
‘‘(ii) the Secretary determines, based on the
application and other evidence presented to the Sec-
retary, that any of the grounds for approval of the
application described in subparagraph (B), (C), or (D)
has been met.
‘‘(B) FAILURE TO ACT ON LICENSURE APPLICATION ON
A TIMELY BASIS.—The ground for approval of such a waiver
application described in this subparagraph is that the State
has failed to complete action on a licensing application
of the organization within 90 days of the date of the State’s
receipt of a substantially complete application. No period
before the date of the enactment of this section shall be
included in determining such 90-day period.
‘‘(C) DENIAL OF APPLICATION BASED ON DISCRIMINATORY
TREATMENT.—The ground for approval of such a waiver
application described in this subparagraph is that the State
has denied such a licensing application and—
‘‘(i) the standards or review process imposed by
the State as a condition of approval of the license
imposes any material requirements, procedures, or
standards (other than solvency requirements) to such
organizations that are not generally applicable to other
entities engaged in a substantially similar business,
or
‘‘(ii) the State requires the organization, as a condi-
tion of licensure, to offer any product or plan other
than a Medicare+Choice plan.
‘‘(D) DENIAL OF APPLICATION BASED ON APPLICATION
OF
SOLVENCY
REQUIREMENTS.—With respect to waiver
applications filed on or after the date of publication of
solvency standards under section 1856(a), the ground for
approval of such a waiver application described in this
subparagraph is that the State has denied such a licensing
application based (in whole or in part) on the organization’s
failure to meet applicable solvency requirements and—
‘‘(i) such requirements are not the same as the
solvency standards established under section 1856(a);
or
‘‘(ii) the State has imposed as a condition of
approval of the license documentation or information
requirements relating to solvency or other material
requirements, procedures, or standards relating to sol-
vency that are different from the requirements, proce-
dures, and standards applied by the Secretary under
subsection (d)(2).
For purposes of this paragraph, the term ‘solvency require-
ments’ means requirements relating to solvency and other
H. R. 2015—64
matters covered under the standards established under
section 1856(a).
‘‘(E) TREATMENT OF WAIVER.—In the case of a waiver
granted under this paragraph for a provider-sponsored
organization with respect to a State—
‘‘(i) LIMITATION TO STATE.—The waiver shall be
effective only with respect to that State and does not
apply to any other State.
‘‘(ii) LIMITATION TO 36-MONTH PERIOD.—The waiver
shall be effective only for a 36-month period and may
not be renewed.
‘‘(iii) 
CONDITIONED
ON
COMPLIANCE
WITH
CONSUMER PROTECTION AND QUALITY STANDARDS.—The
continuation of the waiver is conditioned upon the
organization’s 
compliance 
with 
the 
requirements
described in subparagraph (G).
‘‘(iv) PREEMPTION OF STATE LAW.—Any provisions
of law of that State which relate to the licensing of
the organization and which prohibit the organization
from providing coverage pursuant to a contract under
this part shall be superseded.
‘‘(F) PROMPT ACTION ON APPLICATION.—The Secretary
shall grant or deny such a waiver application within 60
days after the date the Secretary determines that a
substantially complete waiver application has been filed.
Nothing in this section shall be construed as preventing
an organization which has had such a waiver application
denied from submitting a subsequent waiver application.
‘‘(G) 
APPLICATION
AND
ENFORCEMENT
OF
STATE
CONSUMER PROTECTION AND QUALITY STANDARDS.—
‘‘(i) IN
GENERAL.—A waiver granted under this
paragraph to an organization with respect to licensing
under State law is conditioned upon the organization’s
compliance with all consumer protection and quality
standards insofar as such standards—
‘‘(I) would apply in the State to the organiza-
tion if it were licensed under State law;
‘‘(II) 
are 
generally 
applicable 
to 
other
Medicare+Choice organizations and plans in the
State; and
‘‘(III) are consistent with the standards estab-
lished under this part.
Such standards shall not include any standard pre-
empted under section 1856(b)(3)(B).
‘‘(ii) INCORPORATION INTO CONTRACT.—In the case
of such a waiver granted to an organization with
respect to a State, the Secretary shall incorporate the
requirement 
that 
the 
organization 
(and
Medicare+Choice plans it offers) comply with standards
under clause (i) as part of the contract between the
Secretary and the organization under section 1857.
‘‘(iii) ENFORCEMENT.—In the case of such a waiver
granted to an organization with respect to a State,
the Secretary may enter into an agreement with the
State under which the State agrees to provide for
monitoring and enforcement activities with respect to
compliance 
of 
such 
an 
organization 
and 
its
H. R. 2015—65
Medicare+Choice plans with such standards. Such
monitoring and enforcement shall be conducted by the
State in the same manner as the State enforces such
standards with respect to other Medicare+Choice
organizations and plans, without discrimination based
on the type of organization to which the standards
apply. Such an agreement shall specify or establish
mechanisms by which compliance activities are under-
taken, while not lengthening the time required to
review and process applications for waivers under this
paragraph.
‘‘(H) REPORT.—By not later than December 31, 2001,
the Secretary 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 regarding whether the waiver process
under this paragraph should be continued after December
31, 2002. In making such recommendation, the Secretary
shall consider, among other factors, the impact of such
process on beneficiaries and on the long-term solvency of
the program under this title.
‘‘(3) LICENSURE DOES NOT SUBSTITUTE FOR OR CONSTITUTE
CERTIFICATION.—The fact that an organization is licensed in
accordance with paragraph (1) does not deem the organization
to meet other requirements imposed under this part.
‘‘(b) 
ASSUMPTION
OF
FULL
FINANCIAL
RISK.—The
Medicare+Choice organization shall assume full financial risk on
a prospective basis for the provision of the health care services
for which benefits are required to be provided under section
1852(a)(1), except that the organization—
‘‘(1) may obtain insurance or make other arrangements
for the cost of providing to any enrolled member such services
the aggregate value of which exceeds such aggregate level
as the Secretary specifies from time to time,
‘‘(2) may obtain insurance or make other arrangements
for the cost of such services provided to its enrolled members
other than through the organization because medical necessity
required their provision before they could be secured through
the organization,
‘‘(3) may obtain insurance or make other arrangements
for not more than 90 percent of the amount by which its
costs for any of its fiscal years exceed 115 percent of its income
for such fiscal year, and
‘‘(4) may make arrangements with physicians or other
health care professionals, health care institutions, or any com-
bination of such individuals or institutions to assume all or
part of the financial risk on a prospective basis for the provision
of basic health services by the physicians or other health profes-
sionals or through the institutions.
‘‘(c) CERTIFICATION OF PROVISION AGAINST RISK OF INSOLVENCY
FOR UNLICENSED PSOS.—
‘‘(1) IN GENERAL.—Each Medicare+Choice organization that
is a provider-sponsored organization, that is not licensed by
a State under subsection (a), and for which a waiver application
has been approved under subsection (a)(2), shall meet standards
established under section 1856(a) relating to the financial sol-
vency and capital adequacy of the organization.
H. R. 2015—66
‘‘(2) CERTIFICATION PROCESS FOR SOLVENCY STANDARDS FOR
PSOS.—The Secretary shall establish a process for the receipt
and approval of applications of a provider-sponsored organiza-
tion described in paragraph (1) for certification (and periodic
recertification) of the organization as meeting such solvency
standards. Under such process, the Secretary shall act upon
such a certification application not later than 60 days after
the date the application has been received.
‘‘(d) PROVIDER-SPONSORED ORGANIZATION DEFINED.—
‘‘(1) IN GENERAL.—In this part, the term ‘provider-spon-
sored organization’ means a public or private entity—
‘‘(A) that is established or organized, and operated,
by a health care provider, or group of affiliated health
care providers,
‘‘(B) that provides a substantial proportion (as defined
by the Secretary in accordance with paragraph (2)) of the
health care items and services under the contract under
this part directly through the provider or affiliated group
of providers, and
‘‘(C) with respect to which the affiliated providers
share, directly or indirectly, substantial financial risk with
respect to the provision of such items and services and
have at least a majority financial interest in the entity.
‘‘(2) SUBSTANTIAL
PROPORTION.—In defining what is a
‘substantial proportion’ for purposes of paragraph (1)(B), the
Secretary—
‘‘(A) shall take into account the need for such an
organization to assume responsibility for providing—
‘‘(i) significantly more than the majority of the
items and services under the contract under this sec-
tion through its own affiliated providers; and
‘‘(ii) most of the remainder of the items and serv-
ices under the contract through providers with which
the organization has an agreement to provide such
items and services,
in order to assure financial stability and to address the
practical considerations involved in integrating the delivery
of a wide range of service providers;
‘‘(B) shall take into account the need for such an
organization to provide a limited proportion of the items
and services under the contract through providers that
are neither affiliated with nor have an agreement with
the organization; and
‘‘(C) may allow for variation in the definition of
substantial proportion among such organizations based on
relevant differences among the organizations, such as their
location in an urban or rural area.
‘‘(3) AFFILIATION.—For purposes of this subsection, a pro-
vider is ‘affiliated’ with another provider if, through contract,
ownership, or otherwise—
‘‘(A) one provider, directly or indirectly, controls, is
controlled by, or is under common control with the other,
‘‘(B) both providers are part of a controlled group of
corporations under section 1563 of the Internal Revenue
Code of 1986,
H. R. 2015—67
‘‘(C) each provider is a participant in a lawful combina-
tion under which each provider shares substantial financial
risk in connection with the organization’s operations, or
‘‘(D) both providers are part of an affiliated service
group under section 414 of such Code.
‘‘(4) CONTROL.—For purposes of paragraph (3), control is
presumed to exist if one party, directly or indirectly, owns,
controls, or holds the power to vote, or proxies for, not less
than 51 percent of the voting rights or governance rights of
another.
‘‘(5) HEALTH CARE PROVIDER DEFINED.—In this subsection,
the term ‘health care provider’ means—
‘‘(A) any individual who is engaged in the delivery
of health care services in a State and who is required
by State law or regulation to be licensed or certified by
the State to engage in the delivery of such services in
the State, and
‘‘(B) any entity that is engaged in the delivery of health
care services in a State and that, if it is required by
State law or regulation to be licensed or certified by the
State to engage in the delivery of such services in the
State, is so licensed.
‘‘(6) REGULATIONS.—The Secretary shall issue regulations
to carry out this subsection.
‘‘ESTABLISHMENT OF STANDARDS
‘‘SEC. 1856. (a) ESTABLISHMENT OF SOLVENCY STANDARDS FOR
PROVIDER-SPONSORED ORGANIZATIONS.—
‘‘(1) ESTABLISHMENT.—
‘‘(A) IN GENERAL.—The Secretary shall establish, on
an expedited basis and using a negotiated rulemaking proc-
ess under subchapter III of chapter 5 of title 5, United
States Code, standards described in section 1855(c)(1)
(relating to the financial solvency and capital adequacy
of the organization) that entities must meet to qualify
as provider-sponsored organizations under this part.
‘‘(B) FACTORS
TO
CONSIDER
FOR
SOLVENCY
STAND-
ARDS.—In establishing solvency standards under subpara-
graph (A) for provider-sponsored organizations, the Sec-
retary shall consult with interested parties and shall take
into account—
‘‘(i) the delivery system assets of such an organiza-
tion and ability of such an organization to provide
services directly to enrollees through affiliated provid-
ers,
‘‘(ii) alternative means of protecting against insol-
vency, including reinsurance, unrestricted surplus, let-
ters of credit, guarantees, organizational insurance cov-
erage, partnerships with other licensed entities, and
valuation attributable to the ability of such an
organization to meet its service obligations through
direct delivery of care, and
‘‘(iii) any standards developed by the National
Association of Insurance Commissioners specifically for
risk-based health care delivery organizations.
‘‘(C) ENROLLEE
PROTECTION
AGAINST
INSOLVENCY.—
Such standards shall include provisions to prevent enrollees
H. R. 2015—68
from being held liable to any person or entity for the
Medicare+Choice organization’s debts in the event of the
organization’s insolvency.
‘‘(2) PUBLICATION OF NOTICE.—In carrying out the rule-
making process under this subsection, the Secretary, after con-
sultation with the National Association of Insurance Commis-
sioners, the American Academy of Actuaries, organizations rep-
resentative of medicare beneficiaries, and other interested par-
ties, shall publish the notice provided for under section 564(a)
of title 5, United States Code, by not later than 45 days after
the date of the enactment of this section.
‘‘(3) TARGET DATE FOR PUBLICATION OF RULE.—As part of
the notice under paragraph (2), and for purposes of this sub-
section, the ‘target date for publication’ (referred to in section
564(a)(5) of such title) shall be April 1, 1998.
‘‘(4) ABBREVIATED PERIOD FOR SUBMISSION OF COMMENTS.—
In applying section 564(c) of such title under this subsection,
‘15 days’ shall be substituted for ‘30 days’.
‘‘(5) APPOINTMENT OF NEGOTIATED RULEMAKING COMMITTEE
AND FACILITATOR.—The Secretary shall provide for—
‘‘(A) the appointment of a negotiated rulemaking
committee under section 565(a) of such title by not later
than 30 days after the end of the comment period provided
for under section 564(c) of such title (as shortened under
paragraph (4)), and
‘‘(B) the nomination of a facilitator under section 566(c)
of such title by not later than 10 days after the date
of appointment of the committee.
‘‘(6) PRELIMINARY
COMMITTEE
REPORT.—The negotiated
rulemaking committee appointed under paragraph (5) shall
report to the Secretary, by not later than January 1, 1998,
regarding the committee’s progress on achieving a consensus
with regard to the rulemaking proceeding and whether such
consensus is likely to occur before 1 month before the target
date for publication of the rule. If the committee reports that
the committee has failed to make significant progress towards
such consensus or is unlikely to reach such consensus by the
target date, the Secretary may terminate such process and
provide for the publication of a rule under this subsection
through such other methods as the Secretary may provide.
‘‘(7) FINAL COMMITTEE REPORT.—If the committee is not
terminated under paragraph (6), the rulemaking committee
shall submit a report containing a proposed rule by not later
than 1 month before the target date of publication.
‘‘(8) INTERIM, FINAL EFFECT.—The Secretary shall publish
a rule under this subsection in the Federal Register by not
later than the target date of publication. Such rule shall be
effective and final immediately on an interim basis, but is
subject to change and revision after public notice and oppor-
tunity for a period (of not less than 60 days) for public comment.
In connection with such rule, the Secretary shall specify the
process for the timely review and approval of applications of
entities to be certified as provider-sponsored organizations
pursuant to such rules and consistent with this subsection.
‘‘(9) PUBLICATION OF RULE AFTER PUBLIC COMMENT.—The
Secretary shall provide for consideration of such comments
H. R. 2015—69
and republication of such rule by not later than 1 year after
the target date of publication.
‘‘(b) ESTABLISHMENT OF OTHER STANDARDS.—
‘‘(1) IN GENERAL.—The Secretary shall establish by regula-
tion other standards (not described in subsection (a)) for
Medicare+Choice organizations and plans consistent with, and
to carry out, this part. The Secretary shall publish such regula-
tions by June 1, 1998. In order to carry out this requirement
in a timely manner, the Secretary may promulgate regulations
that take effect on an interim basis, after notice and pending
opportunity for public comment.
‘‘(2) USE
OF
CURRENT
STANDARDS.—Consistent with the
requirements of this part, standards established under this
subsection shall be based on standards established under sec-
tion 1876 to carry out analogous provisions of such section.
‘‘(3) RELATION TO STATE LAWS.—
‘‘(A) IN
GENERAL.—The standards established under
this subsection shall supersede any State law or regulation
(including standards described in subparagraph (B)) with
respect to Medicare+Choice plans which are offered by
Medicare+Choice organizations under this part to the
extent such law or regulation is inconsistent with such
standards.
‘‘(B) STANDARDS
SPECIFICALLY
SUPERSEDED.—State
standards relating to the following are superseded under
this paragraph:
‘‘(i) Benefit requirements.
‘‘(ii) Requirements relating to inclusion or treat-
ment of providers.
‘‘(iii) Coverage determinations (including related
appeals and grievance processes).
‘‘CONTRACTS WITH MEDICARE+CHOICE ORGANIZATIONS
‘‘SEC. 1857. (a) IN GENERAL.—The Secretary shall not permit
the election under section 1851 of a Medicare+Choice plan offered
by a Medicare+Choice organization under this part, and no payment
shall be made under section 1853 to an organization, unless the
Secretary has entered into a contract under this section with the
organization with respect to the offering of such plan. Such a
contract 
with 
an 
organization 
may 
cover 
more 
than 
Medicare+Choice plan. Such contract shall provide that the
organization agrees to comply with the applicable requirements
and standards of this part and the terms and conditions of payment
as provided for in this part.
‘‘(b) MINIMUM ENROLLMENT REQUIREMENTS.—
‘‘(1) IN GENERAL.—Subject to paragraph (2), the Secretary
may not enter into a contract under this section with a
Medicare+Choice organization unless the organization has—
‘‘(A) at least 5,000 individuals (or 1,500 individuals
in the case of an organization that is a provider-sponsored
organization) who are receiving health benefits through
the organization, or
‘‘(B) at least 1,500 individuals (or 500 individuals in
the case of an organization that is a provider-sponsored
organization) who are receiving health benefits through
the organization if the organization primarily serves
individuals residing outside of urbanized areas.
H. R. 2015—70
‘‘(2) APPLICATION TO MSA PLANS.—In applying paragraph
(1) in the case of a Medicare+Choice organization that is offer-
ing an MSA plan, paragraph (1) shall be applied by substituting
covered lives for individuals.
‘‘(3) ALLOWING TRANSITION.—The Secretary may waive the
requirement of paragraph (1) during the first 3 contract years
with respect to an organization.
‘‘(c) CONTRACT PERIOD AND EFFECTIVENESS.—
‘‘(1) PERIOD.—Each contract under this section shall be
for a term of at least 1 year, as determined by the Secretary,
and may be made automatically renewable from term to term
in the absence of notice by either party of intention to terminate
at the end of the current term.
‘‘(2) TERMINATION AUTHORITY.—In accordance with proce-
dures established under subsection (h), the Secretary may at
any time terminate any such contract if the Secretary deter-
mines that the organization—
‘‘(A) has failed substantially to carry out the contract;
‘‘(B) is carrying out the contract in a manner inconsist-
ent with the efficient and effective administration of this
part; or
‘‘(C) no longer substantially meets the applicable condi-
tions of this part.
‘‘(3) EFFECTIVE DATE OF CONTRACTS.—The effective date
of any contract executed pursuant to this section shall be speci-
fied in the contract, except that in no case shall a contract
under this section which provides for coverage under an MSA
plan be effective before January 1999 with respect to such
coverage.
‘‘(4) PREVIOUS
TERMINATIONS.—The Secretary may not
enter into a contract with a Medicare+Choice organization if
a previous contract with that organization under this section
was terminated at the request of the organization within the
preceding 5-year period, except in circumstances which warrant
special consideration, as determined by the Secretary.
‘‘(5) CONTRACTING AUTHORITY.—The authority vested in the
Secretary by this part may be performed without regard to
such provisions of law or regulations relating to the making,
performance, amendment, or modification of contracts of the
United States as the Secretary may determine to be inconsist-
ent with the furtherance of the purpose of this title.
‘‘(d) PROTECTIONS AGAINST FRAUD AND BENEFICIARY PROTEC-
TIONS.—
‘‘(1) PERIODIC AUDITING.—The Secretary shall provide for
the annual auditing of the financial records (including data
relating to medicare utilization, costs, and computation of the
adjusted community rate) of at least one-third of the
Medicare+Choice organizations offering Medicare+Choice plans
under this part. The Comptroller General shall monitor audit-
ing activities conducted under this subsection.
‘‘(2) INSPECTION AND AUDIT.—Each contract under this sec-
tion shall provide that the Secretary, or any person or organiza-
tion designated by the Secretary—
‘‘(A) shall have the right to inspect or otherwise evalu-
ate (i) the quality, appropriateness, and timeliness of serv-
ices performed under the contract, and (ii) the facilities
H. R. 2015—71
of the organization when there is reasonable evidence of
some need for such inspection, and
‘‘(B) shall have the right to audit and inspect any
books and records of the Medicare+Choice organization
that pertain (i) to the ability of the organization to bear
the risk of potential financial losses, or (ii) to services
performed or determinations of amounts payable under
the contract.
‘‘(3) ENROLLEE
NOTICE
AT
TIME
OF
TERMINATION.—Each
contract under this section shall require the organization to
provide (and pay for) written notice in advance of the contract’s
termination, as well as a description of alternatives for obtain-
ing benefits under this title, to each individual enrolled with
the organization under this part.
‘‘(4) DISCLOSURE.—
‘‘(A) IN GENERAL.—Each Medicare+Choice organization
shall, in accordance with regulations of the Secretary,
report to the Secretary financial information which shall
include the following:
‘‘(i) Such information as the Secretary may require
demonstrating that the organization has a fiscally
sound operation.
‘‘(ii) A copy of the report, if any, filed with the
Health Care Financing Administration containing the
information required to be reported under section 1124
by disclosing entities.
‘‘(iii) A description of transactions, as specified by
the Secretary, between the organization and a party
in interest. Such transactions shall include—
‘‘(I) any sale or exchange, or leasing of any
property between the organization and a party
in interest;
‘‘(II) any furnishing for consideration of goods,
services (including management services), or facili-
ties between the organization and a party in
interest, but not including salaries paid to employ-
ees for services provided in the normal course of
their employment and health services provided to
members by hospitals and other providers and by
staff, medical group (or groups), individual practice
association (or associations), or any combination
thereof; and
‘‘(III) any lending of money or other extension
of credit between an organization and a party in
interest.
The Secretary may require that information reported
respecting an organization which controls, is controlled by,
or is under common control with, another entity be in
the form of a consolidated financial statement for the
organization and such entity.
‘‘(B) PARTY IN INTEREST DEFINED.—For the purposes
of this paragraph, the term ‘party in interest’ means—
‘‘(i) any director, officer, partner, or employee
responsible for management or administration of a
Medicare+Choice organization, any person who is
directly or indirectly the beneficial owner of more than
5 percent of the equity of the organization, any person