843
‘‘(I) With respect to any portion of the 
area involved that is within a Metropoli-
tan Statistical Area with a population of 
more than 250,000 and counties contig-
uous to such Metropolitan Statistical 
Area, 5,000 individuals. 
‘‘(II) With respect to any other por-
tion of such area, 1,500 individuals.’’. 
SEC. 236. EXTENSION OF MUNICIPAL HEALTH SERVICE 
DEMONSTRATION PROJECTS. 
Section 9215(a) of the Consolidated Omni-
bus Budget Reconciliation Act of 1985 (42 
U.S.C. 1395b–1 note), as amended by section 
6135 of the Omnibus Budget Reconciliation 
Act of 1989, section 13557 of the Omnibus 
Budget Reconciliation Act of 1993, section 
4017 of BBA, section 534 of BBRA (113 Stat. 
1501A–390), and section 633 of BIPA, is amend-
ed by striking ‘‘December 31, 2004’’ and insert-
ing ‘‘December 31, 2009’’.
844
Subtitle C—Application of FEHBP-
Style Competitive Reforms
SEC. 241. APPLICATION OF FEHBP-STYLE COMPETITIVE RE-
FORM BEGINNING IN 2010.
(a) IDENTIFICATION OF COMPETITIVE EFFS 
REGIONS; COMPUTATION OF COMPETITIVE EFFS 
NON-DRUG
BENCHMARKS
UNDER
EFFS PRO-
GRAM.—
(1) IN GENERAL.—Section 1860E–3, as 
added by section 201(a), is amended by 
adding at the end the following new sub-
section: 
‘‘(e) APPLICATION OF COMPETITION.—
‘‘(1) DETERMINATION
OF
COMPETITIVE 
EFFS REGIONS.—
‘‘(A) IN GENERAL.—For purposes of 
this part, the term ‘competitive EFFS 
region’ means, for a year beginning 
with 2010, an EFFS region that the 
Administrator finds—
‘‘(i) there will be offered in 
the region during the annual, co-
ordinated election period under 
section 1851(e)(3)(B) (as applied 
under section 1860E–1(c)) before
845
the beginning of the year at least 
2 EFFS plans (in addition to the 
fee-for-service 
program 
under 
parts A and B), each offered by a 
different EFFS organization and 
each of which met the minimum 
enrollment requirements of para-
graph (1) of section 1857(b) (as ap-
plied without regard to para-
graph (3) thereof) as of March of 
the previous year; and 
‘‘(ii) during March of the pre-
vious year at least the percentage 
specified in subparagraph (C) of 
the number of EFFS eligible indi-
viduals who reside in the region 
were enrolled in an EFFS plan. 
‘‘(B) PERCENTAGE SPECIFIED.—
‘‘(i) IN GENERAL.—For purposes 
of subparagraph (A), subject to 
clause (ii), the percentage speci-
fied in this subparagraph for a 
year is equal the lesser of 20 per-
cent or to the sum of—
846
‘‘(I) the percentage, as es-
timated by the Administrator, 
of EFFS eligible individuals in 
the United States who are en-
rolled in EFFS plans during 
March of the previous year; 
and 
‘‘(II) the percentage, as es-
timated by the Administrator, 
of Medicare Advantage eligi-
ble individuals in the United 
States who are enrolled in 
Medicare 
Advantage 
plans 
during March of the previous 
year. 
‘‘(ii) EXCEPTION.—In the case 
of an EFFS region that was a 
competitive EFFS region for the 
previous year, the Medicare Bene-
fits Administrator may continue 
to treat the region as meeting the 
requirement 
of 
subparagraph 
(A)(ii) if the region would meet 
such requirement but for a de
847
minimis reduction below the per-
centage specified in clause (i). 
‘‘(2) 
COMPETITIVE
EFFS
NON-DRUG 
MONTHLY
BENCHMARK
AMOUNT.—For pur-
poses of this part, the term ‘competitive 
EFFS 
non-drug 
monthly 
benchmark 
amount’ means, with respect to an EFFS 
region for a month in a year and subject 
to paragraph (8), the sum of the 2 compo-
nents described in paragraph (3) for the 
region and year. The Administrator shall 
compute such benchmark amount for 
each competitive EFFS region before the 
beginning of each annual, coordinated 
election 
period 
under 
section 
1851(e)(3)(B) for each year (beginning 
with 2010) in which it is designated as 
such a region. 
‘‘(3) 2 COMPONENTS.—For purposes of 
paragraph (2), the 2 components de-
scribed in this paragraph for an EFFS re-
gion and a year are the following: 
‘‘(A) EFFS COMPONENT.—The prod-
uct of the following:
848
‘‘(i) 
WEIGHTED
AVERAGE
OF 
PLAN BIDS IN REGION.—The weight-
ed average of the EFFS plan bids 
for the region and year (as deter-
mined under paragraph (4)(A)). 
‘‘(ii) NON-FFS MARKET SHARE.—
1 minus the fee-for-service market 
share 
percentage 
determined 
under paragraph (5) for the re-
gion and the year. 
‘‘(B) 
FEE-FOR-SERVICE
COMPO-
NENT.—The product of the following: 
‘‘(i) FEE-FOR-SERVICE
REGION-
SPECIFIC
NON-DRUG
AMOUNT.—The 
fee-for-service 
region-specific 
non-drug amount (as defined in 
paragraph (6)) for the region and 
year. 
‘‘(ii) FEE-FOR-SERVICE
MARKET 
SHARE.—The fee-for-service mar-
ket share percentage (determined 
under paragraph (5)) for the re-
gion and the year. 
‘‘(4) DETERMINATION OF WEIGHTED AV-
ERAGE EFFS PLAN BIDS FOR A REGION.—