186 
(2) BASIC STANDARDS FOR MEDICAL HOMES.— 
For purposes of this subsection, the term ‘‘medical 
home’’ means a physician-directed practice that has 
been certified, under paragraph (1), as meeting the 
following standards: 
(A) ACCESS
AND
COMMUNICATION
WITH 
PATIENTS.—The practice applies standards for 
access to care and communication with partici-
pating beneficiaries. 
(B) MANAGING
PATIENT
INFORMATION 
AND USING INFORMATION IN MANAGEMENT TO 
SUPPORT
PATIENT
CARE.—The practice has 
readily accessible, clinically useful information 
on participating beneficiaries that enables the 
practice to treat such beneficiaries comprehen-
sively and systematically. 
(C) MANAGING AND COORDINATING CARE 
ACCORDING TO INDIVIDUAL NEEDS.—The prac-
tice maintains continuous relationships with 
participating beneficiaries by implementing evi-
dence-based guidelines and applying them to 
the identified needs of individual beneficiaries 
over time and with the intensity needed by such 
beneficiaries. 
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(D) PROVIDING ONGOING ASSISTANCE AND 
ENCOURAGEMENT
IN
PATIENT
SELF-MANAGE-
MENT.—The practice— 
(i) collaborates with participating 
beneficiaries to pursue their goals for opti-
mal achievable health; and 
(ii) assesses patient-specific barriers 
to communication and conducts activities 
to support patient self-management. 
(E) RESOURCES TO MANAGE CARE.—The 
practice has in place the resources and proc-
esses necessary to achieve improvements in the 
management and coordination of care for par-
ticipating beneficiaries. 
(F) 
MONITORING
PERFORMANCE.—The 
practice monitors its clinical process and per-
formance (including outcome measures) in 
meeting the applicable standards under this 
subsection and provides information in a form 
and manner specified by the Secretary with re-
spect to such process and performance. 
(3) ADDITIONAL
STANDARDS
FOR
HIT-EN-
HANCED MEDICAL HOME.—For purposes of this sub-
section, the term ‘‘HIT-enhanced medical home’’ 
means a medical home that has been certified, under 
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paragraph (1), as using a health information tech-
nology system that includes at least the following 
elements: 
(A) 
ELECTRONIC
HEALTH
RECORD 
(EHR).—The system uses, for participating 
beneficiaries, an electronic health record that 
meets the following standards: 
(i) IN GENERAL.—The record— 
(I) has the capability of inter-
operability with secure data acquisi-
tion from health information tech-
nology systems of other health care 
providers in the area served by the 
home; or 
(II) the capability to securely ac-
quire clinical data delivered by such 
other health care providers to a secure 
common data source. 
(ii) The record protects the privacy 
and security of health information. 
(iii) The record has the capability to 
acquire, manage, and display all the types 
of clinical information commonly relevant 
to services furnished by the home, such as 
complete medical records, radiographic 
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image retrieval, and clinical laboratory in-
formation. 
(iv) The record is integrated with de-
cision support capacities that facilitate the 
use of evidence-based medicine and clinical 
decision support tools to guide decision- 
making at the point-of-care based on pa-
tient-specific factors. 
(B) E-PRESCRIBING.—The system sup-
ports e-prescribing and computerized physician 
order entry. 
(C) OUTCOME MEASUREMENT.—The sys-
tem supports the secure, confidential provision 
of clinical process and outcome measures ap-
proved by the National Quality Forum to the 
Secretary for use in confidential manner for 
provider feedback and peer review and for out-
comes and clinical effectiveness research. 
(D) PATIENT
EDUCATION
CAPABILITY.— 
The system actively facilitates participating 
beneficiaries engaging in the management of 
their own health through education and support 
systems and tools for shared decision-making. 
(E) SUPPORT
OF
BASIC
STANDARDS.— 
The elements of such system, such as the elec-
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190 
tronic health record, email communications, pa-
tient registries, and clinical-decision support 
tools, are integrated in a manner to better 
achieve the basic standards specified in para-
graph (2) for a medical home. 
(4) USE OF DATA.—The Secretary shall use the 
data submitted under paragraph (1)(F) in a con-
fidential manner for feedback and peer review for 
medical homes and for outcomes and clinical effec-
tiveness research. After the first two years of the ex-
panded project, these data may be used for adjust-
ment in the monthly medical home care management 
fee under subsection (d)(2)(E). 
(d) MONTHLY MEDICAL HOME CARE MANAGEMENT 
FEE.— 
(1) IN GENERAL.—Under the expanded project, 
the Secretary shall provide for payment to the per-
sonal physician of each participating beneficiary of a 
monthly medical home care management fee. 
(2) AMOUNT OF PAYMENT.— In determining 
the amount of such fee, the Secretary shall consider 
the following: 
(A) OPERATING
EXPENSES.—The addi-
tional practice expenses for the delivery of serv-
ices through a medical home, taking into ac-
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count the additional expenses for an HIT-en-
hanced medical home. Such expenses include 
costs associated with— 
(i) structural expenses, such as equip-
ment, maintenance, and training costs; 
(ii) enhanced access and communica-
tion functions; 
(iii) population management and reg-
istry functions; 
(iv) patient medical data and referral 
tracking functions; 
(v) provision of evidence-based care; 
(vi) implementation and maintenance 
of health information technology; 
(vii) reporting on performance and 
improvement conditions; and 
(viii) patient education and patient 
decision support, including print and elec-
tronic patient education materials. 
(B) ADDED VALUE SERVICES.—The value 
of additional physician work, such as aug-
mented care plan oversight, expanded e-mail 
and telephonic consultations, extended patient 
medical data review (including data stored and 
transmitted electronically), and physician super-
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vision of enhanced self management education, 
and expanded follow-up accomplished by non- 
physician personnel, in a medical home that is 
not adequately taken into account in the estab-
lishment of the physician fee schedule under 
section 1848 of the Social Security Act. 
(C) RISK ADJUSTMENT.—The development 
of an appropriate risk adjustment mechanism 
to account for the varying costs of medical 
homes based upon characteristics of partici-
pating beneficiaries. 
(D) HIT ADJUSTMENT.—Variation of the 
fee based on the extensiveness of use of the 
health information technology in the medical 
home. 
(E) 
PERFORMANCE-BASED.—After 
the 
first two years of the expanded project, an ad-
justment of the fee based on performance of the 
home in achieving quality or outcomes stand-
ards. 
(3) PERSONAL PHYSICIAN DEFINED.—For pur-
poses of this subsection, the term ‘‘personal physi-
cian’’ means, with respect to a participating Medi-
care beneficiary, a physician (as defined in section 
1861(r)(1) of the Social Security Act (42 U.S.C. 
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193 
1395x(r)(1)) who provides accessible, continuous, co-
ordinated, and comprehensive care for the bene-
ficiary as part of a medical practice that is a quali-
fied medical home. Such a physician may be a spe-
cialist for a beneficiary requiring ongoing care for a 
chronic condition or multiple chronic conditions 
(such as severe asthma, complex diabetes, cardio-
vascular disease, rheumatologic disorder) or for a 
beneficiary with a prolonged illness. 
(e) FUNDING.— 
(1) USE
OF
CURRENT
PROJECT
FUNDING.— 
Funds otherwise applied to the demonstration under 
section 204 of the Medicare Improvement and Ex-
tension Act of 2006 (division B of Public Law 109– 
432) shall be available to carry out the expanded 
project 
(2) ADDITIONAL
FUNDING
FROM
SMI
TRUST 
FUND.— 
(A) IN
GENERAL.—In addition to the 
funds provided under paragraph (1), there shall 
be available, from the Federal Supplementary 
Medical Insurance Trust Fund (under section 
1841 of the Social Security Act), the amount of 
$500,000,000 to carry out the expanded 
project, including payments to of monthly med-
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194 
ical home care management fees under sub-
section (d), reductions in coinsurance for par-
ticipating 
beneficiaries 
under 
subsection 
(b)(4)(B), and funds for the design, implemen-
tation, and evaluation of the expanded project. 
(B) MONITORING EXPENDITURES; EARLY 
TERMINATION.—The Secretary shall monitor 
the expenditures under the expanded project 
and may terminate the project early in order 
that expenditures not exceed the amount of 
funding provided for the project under subpara-
graph (A). 
(f) EVALUATIONS AND REPORTS.—. 
(1) ANNUAL INTERIM EVALUATIONS AND RE-
PORTS.—For each year of the expanded project, the 
Secretary shall provide for an evaluation of the 
project and shall submit to Congress, by a date spec-
ified by the Secretary, a report on the project and 
on the evaluation of the project for each such year. 
(2) FINAL
EVALUATION
AND
REPORT.—The 
Secretary shall provide for an evaluation of the ex-
panded project and shall submit to Congress, not 
later than 18 months after the date of completion of 
the project, a report on the project and on the eval-
uation of the project. 
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SEC. 307. REPEAL OF PHYSICIAN ASSISTANCE AND QUAL-
ITY INITIATIVE FUND. 
Subsection (l) of section 1848 of the Social Security 
Act (42 U.S.C. 1395w–4) is repealed. 
SEC. 308. ADJUSTMENT TO MEDICARE PAYMENT LOCAL-
ITIES. 
Section 1848(e) of the Social Security Act (42 
U.S.C.1395w–4(e)) is amended by adding at the end the 
following new paragraph: 
‘‘(6) FEE SCHEDULE GEOGRAPHIC AREAS.— 
‘‘(A) IN GENERAL.— 
‘‘(i) REVISION.—Subject to clause (ii), 
for services furnished on or after January 
1, 2009, the Secretary shall revise the fee 
schedule areas used for payment under 
this section applicable to the State of Cali-
fornia using the county-based geographic 
adjustment factor as specified in option 3 
(table 9) in the proposed rule for the 2008 
physician fee schedule published at 72 
Fed. Reg. 38,122 (July 12, 2007). 
‘‘(ii) TRANSITION.—For services fur-
nished during the period beginning Janu-
ary 1, 2009, and ending December 31, 
2010, after calculating the work, practice 
expense, and malpractice geographic indi-
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196 
ces described in clauses (i), (ii), and (iii) of 
paragraph (1)(A) that would otherwise 
apply, the Secretary shall increase any 
such geographic index for any county in 
California that is lower than the geo-
graphic index used for payment for serv-
ices under this section as of December 31, 
2008, in such county to such geographic 
index level. 
‘‘(iii) NON-APPLICATION OF PERIODIC 
REVISION.—If a periodic review of geo-
graphic indices, as required under para-
graph (1)(B), results in a reduction in a 
work, practice expense and malpractice ge-
ographic index for any county in California 
that is below the geographic index level es-
tablished pursuant to clause (ii) during a 
portion of the period described in such 
clause, the work, practice expense, or mal-
practice index established in such clause 
shall be applied to payment for services 
furnished in such county during such por-
tion of such period. 
‘‘(B) SUBSEQUENT REVISIONS.— 
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197 
‘‘(i) TIMING.—Not later than January 
1, 2014, the Secretary shall review and 
make revisions to fee schedule areas in all 
States for which more than one fee sched-
ule area is used for payment of services 
under this section. The Secretary may re-
vise fee schedule areas in States in which 
a single fee schedule area is used for pay-
ment for services under this section using 
the same methodology applied in the pre-
vious sentence. 
‘‘(ii) LINK WITH GEOGRAPHIC INDEX 
DATA REVISION.—The revision described in 
clause (i) shall be made effective concur-
rently with the application of the periodic 
review of geographic adjustment factors re-
quired under paragraph (1)(C) for 2014.’’. 
SEC. 309. PAYMENT FOR IMAGING SERVICES. 
(a) PAYMENT UNDER PART B OF THE MEDICARE 
PROGRAM
FOR DIAGNOSTIC IMAGING SERVICES FUR-
NISHED IN FACILITIES CONDITIONED ON ACCREDITATION 
OF FACILITIES.— 
(1) SPECIAL PAYMENT RULE.— 
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(A) IN GENERAL.—Section 1848(b)(4) of 
the Social Security Act (42 U.S.C. 1395w- 
4(b)(4)) is amended— 
(i) in the heading, by striking ‘‘RULE’’ 
and inserting ‘‘RULES’’; 
(ii) in subparagraph (A), by striking 
‘‘IN
GENERAL’’ and inserting ‘‘LIMITA-
TION’’; and 
(iii) by adding at the end the fol-
lowing new subparagraph: 
‘‘(C) PAYMENT ONLY FOR SERVICES PRO-
VIDED IN ACCREDITED FACILITIES.— 
‘‘(i) IN GENERAL.—In the case of im-
aging services that are diagnostic imaging 
services described in clause (ii), the pay-
ment amount for the technical component 
and the professional component of the 
services established for a year under the 
fee schedule described in paragraph (1) 
shall each be zero, unless the services are 
furnished at a diagnostic imaging services 
facility that meets the certificate require-
ment described in section 354(b)(1) of the 
Public Health Service Act, as applied 
under subsection (m). The previous sen-
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tence shall not apply with respect to the 
professional component of a diagnostic im-
aging service that is furnished by a physi-
cian or that is an ultrasound furnished by 
nurse practitioner or or nurse-midwife. 
‘‘(ii) 
DIAGNOSTIC
IMAGING
SERV-
ICES.—For purposes of clause (i) and sub-
section (m), the term ‘diagnostic imaging 
services’ means all imaging modalities, in-
cluding diagnostic magnetic resonance im-
aging 
(‘MRI’), 
computed 
tomography 
(‘CT’), 
positron 
emission 
tomography 
(‘PET’), nuclear medicine procedures, x- 
rays, sonograms, ultrasounds, echocardio-
grams, and such emerging diagnostic im-
aging technologies as specified by the Sec-
retary. Such term does not include image 
guided procedures.’’. 
(B) EFFECTIVE DATE.— 
(i) IN
GENERAL.—Subject to clause 
(ii), the amendments made by subpara-
graph (A) shall apply to diagnostic imag-
ing services furnished on or after January 
1, 2010. 
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(ii) EXTENSION
FOR
ULTRASOUND 
SERVICES.—The amendments made by 
subparagraph (A) shall apply to diagnostic 
imaging services that are ultrasound serv-
ices on or after January 1, 2012. 
(2) CERTIFICATION OF FACILITIES THAT FUR-
NISH
DIAGNOSTIC
IMAGING
SERVICES.—Section 
1848 of the Social Security Act (42 U.S.C. 1395w– 
4) is amended by adding at the end the following 
new subsection: 
‘‘(m) CERTIFICATION OF FACILITIES THAT FURNISH 
DIAGNOSTIC IMAGING SERVICES.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(b)(4)(C)(i), except as provided under paragraphs 
(2) through (8), the provisions of section 354 of the 
Public Health Service Act (as in effect as of June 
1, 2007), relating to the certification of mammog-
raphy facilities, shall apply, with respect to the pro-
vision of diagnostic imaging services (as defined in 
subsection (b)(4)(C)(ii)) and to a diagnostic imaging 
services facility defined in paragraph (8) (and to the 
process of accrediting such facilities) in the same 
manner that such provisions apply, with respect to 
the provision of mammograms and to a facility de-
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201 
fined in subsection (a)(3) of such section (and to the 
process of accrediting such mammography facilities). 
‘‘(2) TERMINOLOGY
AND
REFERENCES.—For 
purposes of applying section 354 of the Public 
Health Service Act under paragraph (1)— 
‘‘(A) any reference to ‘mammography’, or 
‘breast imaging’ is deemed a reference to ‘diag-
nostic imaging services (as defined in section 
1848(b)(4)(C)(ii) of the Social Security Act)’; 
‘‘(B) any reference to a mammogram or 
film is deemed a reference to an image, as de-
fined in paragraph (8); 
‘‘(C) any reference to ‘mammography facil-
ity’ or to a ‘facility’ under such section 354 is 
deemed a reference to a diagnostic imaging 
services facility, as defined in paragraph (8); 
‘‘(D) any reference to radiological equip-
ment used to image the breast is deemed a ref-
erence to medical imaging equipment used to 
provide diagnostic imaging services; 
‘‘(E) any reference to radiological proce-
dures or radiological is deemed a reference to 
medical imaging services, as defined in para-
graph (8) or medical imaging, respectively; 
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‘‘(F) any reference to an inspection (as de-
fined in subsection (a)(4) of such section) or in-
spector is deemed a reference to an audit (as 
defined in paragraph (8)) or auditor, respec-
tively; 
‘‘(G) any reference to a medical physicist 
(as described in subsection (f)(1)(E) of such 
section) is deemed to include a reference to a 
magnetic resonance scientist or the appropriate 
qualified expert as determined by the accred-
iting body; 
‘‘(H) in applying subsection (d)(1)(A)(i) of 
such section, the reference to ‘type of each x- 
ray machine, image receptor, and processor’ is 
deemed a reference to ‘type of imaging equip-
ment’; 
‘‘(I) in applying subsection (d)(1)(B) of 
such section, the reference that ‘the person or 
agent submits to the Secretary’ is deemed a ref-
erence that ‘the person or agent submits to the 
Secretary, through the appropriate accredita-
tion body’; 
‘‘(J) in applying subsection (d)(1)(B)(i) of 
such section, the reference to standards estab-
lished by the Secretary is deemed a reference to 
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standards established by an accreditation body 
and approved by the Secretary; 
‘‘(K) in applying subsection (e) of such 
section, relating to an accreditation body— 
‘‘(i) in paragraph (1)(A), the ref-
erence to ‘may’ is deemed a reference to 
‘shall’; 
‘‘(ii) in paragraph (1)(B)(i)(II), the 
reference to ‘a random sample of clinical 
images from such facilities’ is deemed a 
reference to ‘a statistically significant ran-
dom sample of clinical images from a sta-
tistically significant random sample of fa-
cilities’; 
‘‘(iii) in paragraph (3)(A) of such sec-
tion— 
‘‘(I) the reference to ‘paragraph 
(1)(B)’ in such subsection is deemed 
to be a reference to ‘paragraph (1)(B) 
and subsection (f)’; and 
‘‘(II) the reference to the ‘Sec-
retary’ is deemed a reference to ‘an 
accreditation body, with the approval 
of the Secretary’; and 
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‘‘(iv) in paragraph (6)(B), the ref-
erence to the Committee on Labor and 
Human Resources of the Senate is deemed 
to be the Committee on Finance of the 
Senate and the reference to the Committee 
on Energy and Commerce of the House of 
Representatives is deemed to include a ref-
erence to the Committee on Ways and 
Means of the House of Representatives; 
‘‘(L) in applying subsection (f), relating to 
quality standards— 
‘‘(i) each reference to standards estab-
lished by the Secretary is deemed a ref-
erence to standards established by an ac-
creditation body involved and approved by 
the Secretary under subsection (d)(1)(B)(i) 
of such section 
‘‘(ii) in paragraph (1)(A), the ref-
erence to ‘radiation dose’ is deemed a ref-
erence to ‘radiation dose, as appropriate’; 
‘‘(iii) in paragraph (1)(B), the ref-
erence to ‘radiological standards’ is deemed 
a reference to ‘medical imaging standards, 
as appropriate’; 
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‘‘(iv) in paragraphs (1)(D)(ii) and 
(1)(E)(iii), the reference to ‘the Secretary’ 
is deemed a reference to ‘an accreditation 
body with the approval of the Secretary’; 
‘‘(v) in each of subclauses (III) and 
(IV) of paragraph (1)(G)(ii), each ref-
erence to ‘patient’ is deemed a reference to 
‘patient, if requested by the patient’; and 
‘‘(M) in applying subsection (g), relating to 
inspections— 
‘‘(i) each reference to the ‘Secretary 
or State or local agency acting on behalf of 
the Secretary’ is deemed to include a ref-
erence to an accreditation body involved; 
‘‘(ii) in the first sentence of para-
graph (1)(F), the reference to ‘annual in-
spections required under this paragraph’ is 
deemed a reference to ‘the audits carried 
out in facilities at least every three years 
from the date of initial accreditation under 
this paragraph’; and 
‘‘(iii) in the second sentence of para-
graph (1)(F), the reference to ‘inspections 
carried out under this paragraph’ is 
deemed a reference to ‘audits conducted 
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206 
under this paragraph during the previous 
year’. 
‘‘(3) DATES AND PERIODS.—For purposes of 
paragraph (1), in applying section 354 of the Public 
Health Service Act, the following applies: 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B)— 
‘‘(i) any reference to ‘October 1, 
1994’ shall be deemed a reference to ‘Jan-
uary 1, 2010’; 
‘‘(ii) the reference to ‘the date of the 
enactment of this section’ in each of sub-
sections (e)(1)(D) and (f)(1)(E)(iii) is 
deemed to be a reference to ‘the date of 
the enactment of the Children’s Health 
and Medicare Protection Act of 2007’; 
‘‘(iii) the reference to ‘annually’ in 
subsection (g)(1)(E) is deemed a reference 
to ‘every three years’; 
‘‘(iv) the reference to ‘October 1, 
1996’ in subsection (l) is deemed to be a 
reference to ‘January 1, 2011’; 
‘‘(v) the reference to ‘October 1, 
1999’ in subsection (n)(3)(H) is deemed to 
be a reference to ‘January 1, 2012’; and 
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‘‘(vi) the reference to ‘October 1, 
1993’ in the matter following paragraph 
(3)(J) of subsection (n) is deemed to be a 
reference ‘January 1, 2010’. 
‘‘(B) ULTRASOUND
SERVICES.—With re-
spect to diagnostic imaging services that are 
ultrasounds— 
‘‘(i) any reference to ‘October 1, 
1994’ shall be deemed a reference to ‘Jan-
uary 1, 2012’; 
‘‘(ii) the reference to ‘the date of the 
enactment of this section’ in subsection 
(f)(1)(E)(iii) is deemed to be a reference to 
‘7 years after the date of the enactment of 
the Children’s Health and Medicare Pro-
tection Act of 2007’; 
‘‘(iii) the reference to ‘October 1, 
1996’ in subsection (l) is deemed to be a 
reference to ‘January 1, 2013’; 
‘‘(4) PROVISIONS NOT APPLICABLE.—For pur-
poses of paragraph (1), in applying section 354 of 
the Public Health Service Act, the following provi-
sion shall not apply: 
‘‘(A) Subsections (e) and (f) of such sec-
tion, in so far as the respective subsection im-
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208 
poses any requirement for a physician to be cer-
tified, accredited, or otherwise meet require-
ments, with respect to the provision of any di-
agnostic imaging services, as a condition of pay-
ment under subsection (b)(4)(C)(i), with re-
spect to the professional or technical compo-
nent, for such service. 
‘‘(B) Subsection (e)(1)(B)(iv) of such sec-
tion, insofar as it applies to a facility with re-
spect to the provision of ultrasounds. 
‘‘(C) Subsection (e)(1)(B)(v). 
‘‘(D) Subsection (f)(1)(H) of such section, 
relating to standards for special techniques for 
mammograms of patients with breast implants. 
‘‘(E) Subsection (g)(6) of such section, re-
lating to an inspection demonstration program. 
‘‘(F) Subsection (n)(3)(G) of such section, 
relating to the national advisory committee. 
‘‘(G) Subsection (p) of such section, relat-
ing to breast cancer screening surveillance re-
search grants. 
‘‘(H) Paragraphs (1)(B) and (2) of sub-
section (r) of such section, related to funding. 
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209 
‘‘(5) ACCREDITATION
BODIES.—For purposes 
of paragraph (1), in applying section 354(e)(1) of 
the Public Health Service, the following shall apply: 
‘‘(A) APPROVAL OF TWO ACCREDITATION 
BODIES FOR EACH TREATMENT MODALITY.—In 
the case that there is more than one accredita-
tion body for a treatment modality that quali-
fies for approval under this subsection, the Sec-
retary shall approve at least two accreditation 
bodies for such treatment modality. 
‘‘(B) ADDITIONAL
ACCREDITATION
BODY 
STANDARDS.—In addition to the standards de-
scribed in subparagraph (B) of such section for 
accreditation bodies, the Secretary shall estab-
lish standards that require— 
‘‘(i) the timely integration of new 
technology by accreditation bodies for pur-
poses of accrediting facilities under this 
subsection; and 
‘‘(ii) the accreditation body involved to 
evaluate the annual medical physicist sur-
vey (or annual medical survey of another 
appropriate qualified expert chosen by the 
accreditation body) of a facility upon on-
site review of such facility. 
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210 
‘‘(6) ADDITIONAL QUALITY STANDARDS.—For 
purposes of paragraph (1), in applying subsection 
(f)(1) of section 354 of the Public Health Service— 
‘‘(A) the quality standards under such sub-
section shall, with respect to a facility include— 
‘‘(i) standards for qualifications of 
medical personnel who are not physicians 
and who perform diagnostic imaging serv-
ices at the facility that require such per-
sonnel to ensure that individuals, prior to 
performing medical imaging, demonstrate 
compliance with the standards established 
under subsection (a) through successful 
completion of certification by a nationally 
recognized professional organization, licen-
sure, completion of an examination, perti-
nent 
coursework 
or 
degree 
program, 
verified pertinent experience, or through 
other ways determined appropriate by an 
accreditation body (with the approval of 
the Secretary, or through some combina-
tion thereof); 
‘‘(ii) standards requiring the facility 
to maintain records of the credentials of 
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211 
physicians and other medical personnel de-
scribed in clause (i); 
‘‘(iii) standards for qualifications and 
responsibilities of medical directors and 
other personnel with supervising roles at 
the facility; 
‘‘(iv) standards that require the facil-
ity has procedures to ensure the safety of 
patients of the facility; and 
‘‘(v) standards for the establishment 
of a quality control program at the facility 
to be implemented as described in subpara-
graph (E) of such subsection; 
‘‘(B) the quality standards described in 
subparagraph (B) of such subsection shall be 
deemed to include standards that require the 
establishment and maintenance of a quality as-
surance and quality control program at each fa-
cility that is adequate and appropriate to en-
sure the reliability, clarity, and accuracy of the 
technical quality of diagnostic images produced 
at such facilities; and 
‘‘(C) the quality standard described in sub-
paragraph (C) of such subsection, relating to a 
requirement for personnel who perform speci-
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212 
fied services, shall include in such requirement 
that such personnel must meet continuing med-
ical education standards as specified by an ac-
creditation body (with the approval of the Sec-
retary) and update such standards at least once 
every three years. 
‘‘(7) ADDITIONAL
REQUIREMENTS.—Notwith-
standing any provision of section 354 of the Public 
Health Service Act, the following shall apply to the 
accreditation process under this subsection for pur-
poses of subsection (b)(4)(C)(i): 
‘‘(A) Any diagnostic imaging services facil-
ity accredited before January 1, 2010 (or Janu-
ary 1, 2012 in the case of ultrasounds), by an 
accrediting body approved by the Secretary 
shall be deemed a facility accredited by an ap-
proved accreditation body for purposes of such 
subsection as of such date if the facility submits 
to the Secretary proof of such accreditation by 
transmittal of the certificate of accreditation, 
including by electronic means. 
‘‘(B) The Secretary may require the ac-
creditation under this subsection of an emerg-
ing technology used in the provision of a diag-
nostic imaging service as a condition of pay-
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213 
ment under subsection (b)(4)(C)(i) for such 
service at such time as the Secretary deter-
mines there is sufficient empirical and scientific 
information to properly carry out the accredita-
tion process for such technology. 
‘‘(8) DEFINITIONS.—For purposes of this sub-
section: 
‘‘(A) AUDIT.—The term ‘audit’ means an 
onsite evaluation, with respect to a diagnostic 
imaging services facility, by the Secretary, State 
or local agency on behalf of the Secretary, or 
accreditation body approved under this sub-
section that includes the following: 
‘‘(i) Equipment verification. 
‘‘(ii) Evaluation of policies and proce-
dures for compliance with accreditation re-
quirements. 
‘‘(iii) Evaluation of personnel quali-
fications and credentialing. 
‘‘(iv) Evaluation of the technical qual-
ity of images. 
‘‘(v) Evaluation of patient reports. 
‘‘(vi) Evaluation of peer-review mech-
anisms and other quality assurance activi-
ties. 
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214 
‘‘(vii) Evaluation of quality control 
procedures, results, and follow-up actions. 
‘‘(viii) Evaluation of medical physi-
cists (or other appropriate professionals 
chosen by the accreditation body) and 
magnetic resonance scientist surveys. 
‘‘(ix) Evaluation of consumer com-
plaint mechanisms. 
‘‘(x) Provision of recommendations for 
improvement based on findings with re-
spect to clauses (i) through (ix). 
‘‘(B) DIAGNOSTIC IMAGING SERVICES FA-
CILITY.—The term ‘diagnostic imaging services 
facility’ has the meaning given the term ‘facil-
ity’ in section 354(a)(3) of the Public Health 
Service Act (42 U.S.C. 263b(a)(3)) subject to 
the reference changes specified in paragraph 
(2), but does not include any facility that does 
not furnish diagnostic imaging services for 
which payment may be made under this section. 
‘‘(C) IMAGE.—The term ‘image’ means the 
portrayal of internal structures of the human 
body for the purpose of detecting and deter-
mining the presence or extent of disease or in-
jury and may be produced through various 
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215 
techniques or modalities, including radiant en-
ergy or ionizing radiation and ultrasound and 
magnetic resonance. Such term does not include 
image guided procedures. 
‘‘(D) MEDICAL
IMAGING
SERVICE.—The 
term ‘medical imaging service’ means a service 
that involves the science of an image. Such 
term does not include image guided proce-
dures.’’. 
(b) ADJUSTMENT IN PRACTICE EXPENSE TO RE-
FLECT HIGHER PRESUMED UTILIZATION.—Section 1848 
of the Social Security Act (42 U.S.C. 1395w(b)(4)) is 
amended— 
(1) in subsection (b)(4)— 
(A) in the heading, by striking ‘‘RULE’’ 
and inserting ‘‘RULES’’; 
(B) in subparagraph (B), by striking ‘‘sub-
paragraph (A)’’ and inserting ‘‘this paragraph’’; 
and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(C) ADJUSTMENT IN PRACTICE EXPENSE 
TO
REFLECT
HIGHER
PRESUMED
UTILIZA-
TION.—In computing the number of practice 
expense relative value units under subsection 
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216 
(c)(2)(C)(ii) with respect to imaging services 
described in subparagraph (B), the Secretary 
shall adjust such number of units so it reflects 
a 75 percent (rather than 50 percent) presumed 
rate of utilization of imaging equipment.’’; and 
(2) in subsection (c)(2)(B)(v)(II), by inserting 
‘‘AND OTHER PROVISIONS’’ after ‘‘OPD PAYMENT 
CAP’’ 
(c) ADJUSTMENT IN TECHNICAL COMPONENT ‘‘DIS-
COUNT’’ ON SINGLE-SESSION IMAGING TO CONSECUTIVE 
BODY PARTS.—Section 1848(b)(4) of such Act is further 
amended by adding at the end the following new subpara-
graph: 
‘‘(D) ADJUSTMENT IN TECHNICAL COMPO-
NENT DISCOUNT ON SINGLE-SESSION IMAGING 
INVOLVING
CONSECUTIVE
BODY
PARTS.—The 
Secretary shall increase the reduction in ex-
penditures attributable to the multiple proce-
dure payment reduction applicable to the tech-
nical component for imaging under the final 
rule published by the Secretary in the Federal 
Register on November 21, 2005 (42 C.F.R. 
405, et al.) from 25 percent to 50 percent.’’. 
(d) ADJUSTMENT IN ASSUMED INTEREST RATE FOR 
CAPITAL PURCHASES.—Section 1848(b)(4) of such Act is 
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217 
further amended by adding at the end the following new 
subparagraph: 
‘‘(E) ADJUSTMENT IN ASSUMED INTEREST 
RATE FOR CAPITAL PURCHASES.—In computing 
the practice expense component for imaging 
services under this section, the Secretary shall 
change the interest rate assumption for capital 
purchases of imaging devices to reflect the pre-
vailing rate in the market, but in no case higher 
than 11 percent.’’. 
(e) DISALLOWANCE OF GLOBAL BILLING.—Effective 
for claims filed for imaging services (as defined in sub-
section (b)(4)(B) of section 1848 of the Social Security 
Act) furnished on or after the first day of the first month 
that begins more than 1 year after the date of the enact-
ment of this Act, the Secretary of Health and Human 
Services shall not accept (or pay) a claim under such sec-
tion unless the claim is made separately for each compo-
nent of such services. 
(f) EFFECTIVE DATE.—Except as otherwise pro-
vided, this section, and the amendments made by this sec-
tion, shall apply to services furnished on or after January 
1, 2008. 
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218 
SEC. 310. REPEAL OF PHYSICIANS ADVISORY COUNCIL. 
Section 1868(a) of the Social Security Act (42 U.S.C. 
1395ee(a)), relating to the Practicing Physicians Advisory 
Council, is repealed. 
TITLE IV—MEDICARE 
ADVANTAGE REFORMS 
Subtitle A—Payment Reform 
SEC. 401. EQUALIZING PAYMENTS BETWEEN MEDICARE AD-
VANTAGE 
PLANS 
AND 
FEE-FOR-SERVICE 
MEDICARE. 
(a) PHASE IN OF PAYMENT BASED ON FEE-FOR- 
SERVICE COSTS.—Section 1853 of the Social Security Act 
(42 U.S.C. 1395w–23) is amended— 
(1) in subsection (j)(1)(A)— 
(A) by striking ‘‘beginning with 2007’’ and 
inserting ‘‘for 2007 and 2008’’; and 
(B) by inserting after ‘‘(k)(1)’’ the fol-
lowing: ‘‘, or, beginning with 2009, 1⁄12 of the 
blended benchmark amount determined under 
subsection (l)(1)’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(l) DETERMINATION
OF BLENDED BENCHMARK 
AMOUNT.— 
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219 
‘‘(1) IN GENERAL.—For purposes of subsection 
(j), subject to paragraphs (2) and (3), the term 
‘blended benchmark amount’ means for an area— 
‘‘(A) for 2009 the sum of— 
‘‘(i) 2⁄3 of the applicable amount (as 
defined in subsection (k)(1)) for the area 
and year; and 
‘‘(ii) 1⁄3 of the amount specified in 
subsection (c)(1)(D)(i) for the area and 
year; 
‘‘(B) for 2010 the sum of— 
‘‘(i) 1⁄3 of the applicable amount for 
the area and year; and 
‘‘(ii) 2⁄3 of the amount specified in 
subsection (c)(1)(D)(i) for the area and 
year; and 
‘‘(C) for a subsequent year the amount 
specified in subsection (c)(1)(D)(i) for the area 
and year. 
‘‘(2) FEE-FOR-SERVICE
PAYMENT
FLOOR.—In 
no case shall the blended benchmark amount for an 
area and year be less than the amount specified in 
subsection (c)(1)(D)(i) for the area and year. 
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220 
‘‘(3) EXCEPTION FOR PACE PLANS.—This sub-
section shall not apply to payments to a PACE pro-
gram under section 1894.’’. 
(b) PHASE
IN
OF
PAYMENT
BASED
ON
IME 
COSTS.— 
(1) IN GENERAL.—Section 1853(c)(1)(D)(i) of 
such Act (42 U.S.C. 1395w–23(c)(1)(D)(i)) is 
amended by inserting ‘‘and costs attributable to pay-
ments 
under 
section 
1886(d)(5)(B)’’ 
after 
‘‘1886(h)’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply to the capitation rate 
for years beginning with 2009. 
(c) LIMITATION ON PLAN ENROLLMENT IN CASES OF 
EXCESS BIDS FOR 2009 AND 2010.— 
(1) IN GENERAL.—In the case of a Medicare 
Part C organization that offers a Medicare Part C 
plan in the 50 States or the District of Columbia for 
which— 
(A) bid amount described in paragraph (2) 
for a Medicare Part C plan for 2009 or 2010, 
exceeds 
(B) the percent specified in paragraph (4) 
of the fee-for-service amount described in para-
graph (3), 
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221 
the Medicare Part C plan may not enroll any new 
enrollees in the plan during the annual, coordinated 
election period (under section 1851(e)(3)(B) of such 
Act (42 U.S.C. 1395w–21(e)(3)(B)) for the year or 
during the year (if the enrollment becomes effective 
during the year). 
(2) BID AMOUNT FOR PART A AND B SERV-
ICES.— 
(A) IN GENERAL.—Except as provided in 
subparagraph (B), the bid amount described in 
this paragraph is the unadjusted Medicare Part 
C statutory non-drug monthly bid amount (as 
defined in section 1854(b)(2)(E) of the Social 
Security Act (42 U.S.C. 1395w–24(b)(2)(E)). 
(B) TREATMENT OF MSA PLANS.—In the 
case of an MSA plan (as defined in section 
1859(b)(3) of the Social Security Act, 42 
U.S.C. 1935w–28(b)(3)), the bid amount de-
scribed in this paragraph is the amount de-
scribed in section 1854(a)(3)(A) of such Act 
(42 U.S.C. 1395w–24(a)(3)(A)). 
(3) FEE-FOR-SERVICE AMOUNT DESCRIBED.— 
(A) IN
GENERAL.—Subject to subpara-
graph (B), the fee-for-service amount described 
in this paragraph for an Medicare Part C local 
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222 
area is the amount described in section 
1853(c)(1)(D)(i) of the Social Security Act (42 
U.S.C. 1395w–23) for such area. 
(B) 
TREATMENT
OF
MULTI-COUNTY 
PLANS.—In the case of an MA plan the service 
area for which covers more than one Medicare 
Part C local area, the fee-for-service amount 
described in this paragraph is the amount de-
scribed in section 1853(c)(1)(D)(i) of the Social 
Security Act for each such area served, weight-
ed for each such area by the proportion of the 
enrollment of the plan that resides in the coun-
ty (as determined based on amounts posted by 
the Administrator of the Centers for Medicare 
& Medicaid Services in the April bid notice for 
the year involved). 
(4) PERCENTAGE PHASE DOWN.—For purposes 
of paragraph (1), the percentage specified in this 
paragraph— 
(A) for 2009 is 106 percent; and 
(B) for 2010 is 103 percent. 
(5) EXEMPTION OF AGE-INS.—For purposes of 
paragraph (1), the term ‘‘new enrollee’’ with respect 
to a Medicare Part C plan offered by a Medicare 
Part C organization, does not include an individual 
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223 
who was enrolled in a plan offered by the organiza-
tion in the month immediately before the month in 
which the individual was eligible to enroll in such a 
Medicare Part C plan offered by the organization. 
(d) 
ANNUAL
REBASING
OF
FEE-FOR-SERVICE 
RATES.—Section 1853(c)(1)(D)(ii) of the Social Security 
Act (42 U.S.C. 1395w–23(c)(1)(D)(ii)) is amended— 
(1) by inserting ‘‘(before 2009)’’ after ‘‘for sub-
sequent years’’; and 
(2) by inserting before the period at the end the 
following: ‘‘and for each year beginning with 2009’’. 
(e) REPEAL OF PPO STABILIZATION FUND.—Sec-
tion 1858 of the Social Security Act (42 U.S.C. 1395) is 
amended— 
(1) by striking subsection (e); and 
(2) in subsection (f)(1), by striking ‘‘subject to 
subsection (e),’’. 
Subtitle B—Beneficiary Protections 
SEC. 411. NAIC DEVELOPMENT OF MARKETING, ADVER-
TISING, AND RELATED PROTECTIONS. 
(a) IN GENERAL.—Section 1852 of the Social Secu-
rity Act (42 U.S.C. 1395w–22) is amended by adding at 
the end the following new subsection: 
‘‘(m) APPLICATION OF MODEL MARKETING AND EN-
ROLLMENT STANDARDS.— 
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224 
‘‘(1) IN GENERAL.—The National Association 
of Insurance Commissioners (in this subsection re-
ferred to as the ‘NAIC’) is requested to develop, and 
to submit to the Secretary of Health and Human 
Services not later than 12 months after the date of 
the enactment of this Act, model regulations (in this 
section referred to as ‘model regulations’) regarding 
Medicare plan marketing, enrollment, broker and 
agent training and certification, agent and broker 
commissions, and market conduct by plans, agents 
and brokers for implementation (under paragraph 
(7)) under this part and part D, including for en-
forcement by States under section 1856(b)(3). 
‘‘(2) MARKETING GUIDELINES.— 
‘‘(A) IN GENERAL.—The model regulations 
shall address the sales and advertising tech-
niques used by Medicare private plans, agents 
and brokers in selling plans, including defining 
and prohibiting cold calls, unsolicited door-to- 
door sales, cross-selling, and co-branding. 
‘‘(B) 
SPECIAL
CONSIDERATIONS.—The 
model regulations shall specifically address the 
marketing— 
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225 
‘‘(i) of plans to full benefit dual-eligi-
ble individuals and qualified medicare 
beneficiaries; 
‘‘(ii) of plans to populations with lim-
ited English proficiency; 
‘‘(iii) of plans to beneficiaries in sen-
ior living facilities; and 
‘‘(iv) of plans at educational events. 
‘‘(3) ENROLLMENT GUIDELINES.— 
‘‘(A) IN GENERAL.—The model regulations 
shall address the disclosures Medicare private 
plans, agents, and brokers must make when en-
rolling beneficiaries, and a process— 
‘‘(i) for affirmative beneficiary sign 
off before enrollment in a plan; and 
‘‘(ii) in the case of Medicare Part C 
plans, for plans to conduct a beneficiary 
call-back to confirm beneficiary sign off 
and enrollment. 
‘‘(B) 
SPECIFIC
CONSIDERATIONS.—The 
model regulations shall specially address bene-
ficiary understanding of the Medicare plan 
through required disclosure (or beneficiary 
verification) of each of the following: 
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226 
‘‘(i) The type of Medicare private plan 
involved. 
‘‘(ii) Attributes of the plan, including 
premiums, cost sharing, formularies (if ap-
plicable), benefits, and provider access lim-
itations in the plan. 
‘‘(iii) Comparative quality of the plan. 
‘‘(iv) The fact that plan attributes 
may change annually. 
‘‘(4) 
APPOINTMENT, 
CERTIFICATION
AND 
TRAINING OF AGENTS AND BROKERS.—The model 
regulations shall establish procedures and require-
ments for appointment, certification (and periodic 
recertification), and training of agents and brokers 
that market or sell Medicare private plans consistent 
with existing State appointment and certification 
procedures and with this paragraph. 
‘‘(5) AGENT AND BROKER COMMISSIONS.— 
‘‘(A) IN GENERAL.—The model regulations 
shall establish standards for fair and appro-
priate commissions for agents and brokers con-
sistent with this paragraph. 
‘‘(B) LIMITATION ON TYPES OF COMMIS-
SION.—The model regulations shall specifically 
prohibit the following: 
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227 
‘‘(i) Differential commissions— 
‘‘(I) for Medicare Part C plans 
based on the type of Medicare private 
plan; or 
‘‘(II) prescription drug plans 
under part D based on the type of 
prescription drug plan. 
‘‘(ii) Commissions in the first year 
that are more than 200 percent of subse-
quent year commissions. 
‘‘(iii) The payment of extra bonuses 
or incentives (such as trips, gifts, and 
other non-commission cash payments). 
‘‘(C) AGENT DISCLOSURE.—In developing 
the model regulations, the NAIC shall consider 
requiring agents and brokers to disclose com-
missions to a beneficiary upon request of the 
beneficiary before enrollment. 
‘‘(D) PREVENTION OF FRAUD.—The model 
regulations shall consider the opportunity for 
fraud and abuse and beneficiary steering in set-
ting standards under this paragraph and shall 
provide for the ability of State commissioners to 
investigate commission structures. 
‘‘(6) MARKET CONDUCT.— 
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228 
‘‘(A) IN GENERAL.—The model regulations 
shall establish standards for the market con-
duct of organizations offering Medicare private 
plans, and of agents and brokers selling such 
plans, and for State review of plan market con-
duct. 
‘‘(B) MATTERS TO BE INCLUDED.—Such 
standards shall include standards for— 
‘‘(i) timely payment of claims; 
‘‘(ii) beneficiary complaint reporting 
and disclosure; and 
‘‘(iii) State reporting of market con-
duct violations and sanctions. 
‘‘(7) IMPLEMENTATION.— 
‘‘(A) PUBLICATION OF NAIC MODEL REGU-
LATIONS.—If the model regulations are sub-
mitted on a timely basis under paragraph (1)— 
‘‘(i) the Secretary shall publish them 
in the Federal Register upon receipt and 
request public comment on the issue of 
whether such regulations are consistent 
with the requirements established in this 
subsection for such regulations; 
‘‘(ii) not later than 6 months after the 
date of such publication, the Secretary 
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229 
shall determine whether such regulations 
are so consistent with such requirements 
and shall publish notice of such determina-
tion in the Federal Register; and 
‘‘(iii) if the Secretary makes the de-
termination under clause (ii) that such reg-
ulations are consistent with such require-
ments, in the notice published under clause 
(ii) the Secretary shall publish notice of 
adoption of such model regulations as con-
stituting the marketing and enrollment 
standards adopted under this subsection to 
be applied under this title; and 
‘‘(iv) if the Secretary makes the deter-
mination under such clause that such regu-
lations are not consistent with such re-
quirements, the procedures of clauses (ii) 
and (iii) of subparagraph (B) shall apply 
(in relation to the notice published under 
clause (ii)), in the same manner as such 
clauses would apply in the case of publica-
tion of a notice under subparagraph (B)(i). 
‘‘(B) NO
MODEL
REGULATIONS.—If the 
model regulations are not submitted on a timely 
basis under paragraph (1)— 
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230 
‘‘(i) the Secretary shall publish notice 
of such fact in the Federal Register; 
‘‘(ii) not later than 6 months after the 
date of publication of such notice, the Sec-
retary shall propose regulations that pro-
vide for marketing and enrollment stand-
ards that incorporate the requirements of 
this subsection for the model regulations 
and request public comments on such pro-
posed regulations; and 
‘‘(iii) not later than 6 months after 
the date of publication of such proposed 
regulations, the Secretary shall publish 
final regulations that shall constitute the 
marketing 
and 
enrollment 
standards 
adopted under this subsection to be applied 
under this title. 
‘‘(C) REFERENCES
TO
MARKETING
AND 
ENROLLMENT STANDARDS.—In this title, a ref-
erence to marketing and enrollment standards 
adopted under this subsection is deemed a ref-
erence to the regulations constituting such 
standards adopted under subparagraph (A) or 
(B), as the case may be. 
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231 
‘‘(D) EFFECTIVE DATE OF STANDARDS.— 
In order to provide for the orderly and timely 
implementation of marketing and enrollment 
standards adopted under this subsection, the 
Secretary, in consultation with the NAIC, shall 
specify (by program instruction or otherwise) 
effective dates with respect to all components of 
such standards consistent with the following: 
‘‘(i) In the case of components that 
relate predominantly to operations in rela-
tion to Medicare private plans, the effective 
date shall be for plan years beginning on 
or after such date (not later than 1 year 
after the date of promulgation of the 
standards) as the Secretary specifies. 
‘‘(ii) In the case of other components, 
the effective date shall be such date, not 
later than 1 year after the date of promul-
gation of the standards, as the Secretary 
specifies. 
‘‘(E) CONSULTATION.— In promulgating 
marketing and enrollment standards under this 
paragraph, the NAIC or Secretary shall consult 
with a working group composed of representa-
tives of issuers of Medicare private plans, con-
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232 
sumer groups, medicare beneficiaries, State 
Health Insurance Assistance Programs, and 
other qualified individuals. Such representatives 
shall be selected in a manner so as to assure 
balanced representation among the interested 
groups. 
‘‘(8) ENFORCEMENT.— 
‘‘(A) IN GENERAL.—Any Medicare private 
plan that violates marketing and enrollment 
standards is subject to sanctions under section 
1857(g). 
‘‘(B) STATE RESPONSIBILITIES.—Nothing 
in this subsection or section 1857(g) shall pro-
hibit States from imposing sanctions against 
Medicare private plans, agents, or brokers for 
violations of the marketing and enrollment 
standards adopted under section 1852(m). 
States shall have the sole authority to regulate 
agents and brokers. 
‘‘(9) MEDICARE PRIVATE PLAN DEFINED.—In 
this subsection, the term ‘Medicare private plan’ 
means a Medicare Part C plan and a prescription 
drug plan under part D.’’. 
(b) EXPANSION OF EXCEPTION TO PREEMPTION OF 
STATE ROLE.— 
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233 
(1) IN GENERAL.—Section 1856(b)(3) of the 
Social Security Act (42 U.S.C. 1395w–26(b)(3)) is 
amended by striking ‘‘(other than State licensing 
laws or State laws relating to plan solvency)’’ and 
inserting ‘‘(other than State laws relating to licens-
ing or plan solvency and State laws or regulations 
adopting the marketing and enrollment standards 
adopted under section 1852(m)).’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply to plans offered on or 
after July 1, 2008. 
(c) APPLICATION TO PRESCRIPTION DRUG PLANS.— 
(1) IN
GENERAL.—Section 1860D–1 of such 
Act is amended by adding at the end the following 
new subsection: 
‘‘(d) APPLICATION OF MARKETING AND ENROLL-
MENT
STANDARDS.—The marketing and enrollment 
standards adopted under section 1852(m) shall apply to 
prescription drug plans (and sponsors of such plans) in 
the same manner as they apply to Medicare Part C plans 
and organizations offering such plans.’’. 
(2) REFERENCE
TO
CURRENT
LAW
PROVI-
SIONS.—The amendment made by subsection (a) 
and (b) apply, pursuant to section 1860D– 
1(b)(1)(B)(ii) of the Social Security Act (42 U.S.C. 
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234 
1395w–101(b)(1)(B)(ii)), to prescription drug plans 
under part D of title XVIII of such Act. 
(d) CONTRACT REQUIREMENT TO MEET MARKETING 
AND ADVERTISING STANDARDS.— 
(1) IN GENERAL.—Section 1857(d) of the So-
cial Security Act (42 U.S.C. 1395w–27(d)), as 
amended by subsection (b)(1), is further amended by 
adding at the end the following new paragraph: 
‘‘(7) MARKETING
AND
ADVERTISING
STAND-
ARDS.—The contract shall require the organization 
to meet all standards adopted under section 
1852(m) (including those enforced by the State in-
volved pursuant to section 1856(b)(3)) relating to 
marketing and advertising conduct’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply to contracts for plan 
years beginning on or after January 1, 2011. 
(e) APPLICATION OF SANCTIONS.— 
(1) APPLICATION TO VIOLATION OF MARKETING 
AND ENROLLMENT STANDARDS.—Section 1857(g) of 
such Act (42 U.S.C. 1395w–27(g)) is amended— 
(A) by striking ‘‘or’’ at the end of subpara-
graph (F); 
(B) by adding ‘‘or’’ at the end of subpara-
graph (G); and 
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235 
(C) by inserting after subparagraph (G) 
the following new subparagraph: 
‘‘(H) violates marketing and enrollment 
standards adopted under section 1852(m);’’. 
(2) ENHANCED
CIVIL
MONEY
SANCTIONS.— 
Such section is further amended— 
(A) in paragraph (2)(A), by striking 
‘‘$25,000’’, ‘‘$100,000’’, and ‘‘$15,000’’ and 
inserting 
‘‘$50,000’’, 
‘‘$200,000’’, 
and 
‘‘$30,000’’, respectively; and 
(B) in subparagraphs (A), (B), and (D) of 
paragraph 
(3), 
by 
striking 
‘‘$25,000’’, 
‘‘$10,000’’, and ‘‘$100,000’’, respectively, and 
inserting 
‘‘$50,000’’, 
‘‘$20,000’’, 
and 
‘‘$200,000’’, respectively. 
(3) EFFECTIVE DATE.—The amendments made 
by paragraph (2) shall apply to violations occurring 
on or after the date of the enactment of this Act. 
(f) DISCLOSURE
OF MARKET
AND ADVERTISING 
CONTRACT VIOLATIONS AND IMPOSED SANCTIONS.—Sec-
tion 1857 of such Act is amended by adding at the end 
the following new subsection 
‘‘(j) DISCLOSURE
OF MARKET
AND ADVERTISING 
CONTRACT VIOLATIONS AND IMPOSED SANCTIONS.—For 
years beginning with 2009, the Secretary shall post on its 
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236 
public website for the Medicare program an annual report 
that— 
‘‘(1) lists each MA organization for which the 
Secretary made during the year a determination 
under subsection (c)(2) the basis of which is de-
scribed in paragraph (1)(E); and 
‘‘(2) that describes any applicable sanctions 
under subsection (g) applied to such organization 
pursuant to such determination.’’. 
(g) STANDARD DEFINITIONS
OF BENEFITS
AND 
FORMATS FOR USE IN MARKETING MATERIALS.—Section 
1851(h) of such Act (42 U.S.C. 1395w–21(h)) is amended 
by adding at the end the following new paragraph: 
‘‘(6) STANDARD
DEFINITIONS
OF
BENEFITS 
AND
FORMATS
FOR
USE
IN
MARKETING
MATE-
RIALS.— 
‘‘(A) IN GENERAL.—Not later than Janu-
ary 1, 2010, the Secretary, in consultation with 
the National Association of Insurance Commis-
sioners and a working group of the type de-
scribed in section 1852(m)(7)(E), shall develop 
standard descriptions and definitions for bene-
fits under this title for use in marketing mate-
rial distributed by Medicare Part C organiza-
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237 
tions and formats for including such descrip-
tions in such marketing material. 
‘‘(B) REQUIRED USE OF STANDARD DEFI-
NITIONS.— For plan years beginning on or 
after January 1, 2011, the Secretary shall dis-
approve the distribution of marketing material 
under paragraph (1)(B) if such marketing ma-
terial does not use, without modification, the 
applicable descriptions and formats specified 
under subparagraph (A).’’. 
(h) SUPPORT FOR STATE HEALTH INSURANCE AS-
SISTANCE PROGRAMS (SHIPS).—Section 1857(e)(2) of 
the Social Security Act (42 U.S.C. 1395w–27(e)(2)) is 
amended— 
(1) in subparagraph (B), by adding at the end 
the following: ‘‘Of the amounts so collected, no less 
than $55,000,000 for fiscal year 2009, $65,000,000 
for fiscal year 2010, $75,000,000 for fiscal year 
2011, and $85,000,000 for fiscal year 2012 shall be 
used to support Medicare Part C and Part D coun-
seling and assistance provided by State Health In-
surance Assistance Programs.’’; 
(2) in subparagraph (C)— 
(A) 
by 
striking 
‘‘and’’ 
after 
‘‘$100,000,000’’; and 
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238 
(B) by striking ‘‘an amount equal to 
$200,000,000’’ and inserting ‘‘and ending with 
fiscal 
year 
2008 
an 
amount 
equal 
to 
$200,000,000, for fiscal year 2009 an amount 
equal to $255,000,000, for fiscal year 2010 an 
amount equal to $265,000,000, for fiscal year 
2011 an amount equal to $275,000,000, and 
for fiscal year 2012 an amount equal to 
$285,000,000’’; and 
(3) in subparagraph (D)(ii)— 
(A) by striking ‘‘and’’ at the end of sub-
clause (IV); 
(B) in subclause (V), by striking the period 
at the end and inserting ‘‘before fiscal year 
2009; and’’; and 
(C) by adding at the end the following new 
subclauses: 
‘‘(VI) for fiscal year 2009 and each 
succeeding fiscal year the applicable por-
tion (as so defined) of the amount specified 
in subparagraph (C) for that fiscal year.’’. 
SEC. 412. LIMITATION ON OUT-OF-POCKET COSTS FOR INDI-
VIDUAL HEALTH SERVICES. 
(a) IN GENERAL.—Section 1852(a)(1) of the Social 
Security Act (42 U.S.C. 1395w–22(a)(1)) is amended— 
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239 
(1) in subparagraph (A), by inserting before the 
period at the end the following: ‘‘with cost-sharing 
that is no greater (and may be less) than the cost- 
sharing that would otherwise be imposed under such 
program option’’; 
(2) in subparagraph (B)(i), by striking ‘‘ or an 
actuarially equivalent level of cost-sharing as deter-
mined in this part’’; and 
(3) by amending clause (ii) of subparagraph 
(B) to read as follows: 
‘‘(ii) PERMITTING USE OF FLAT CO-
PAYMENT OR PER DIEM RATE.—Nothing in 
clause (i) shall be construed as prohibiting 
a Medicare part C plan from using a flat 
copayment or per diem rate, in lieu of the 
cost-sharing that would be imposed under 
part A or B, so long as the amount of the 
cost-sharing imposed does not exceed the 
amount of the cost-sharing that would be 
imposed under the respective part if the in-
dividual were not enrolled in a plan under 
this part.’’. 
(b) LIMITATION FOR DUAL ELIGIBLES AND QUALI-
FIED MEDICARE BENEFICIARIES.—Section 1852(a) of 
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240 
such Act is amended by adding at the end the following 
new paragraph: 
‘‘(7) LIMITATION ON COST-SHARING FOR DUAL 
ELIGIBLES
AND
QUALIFIED
MEDICARE
BENE-
FICIARIES.—In the case of a individual who is a full- 
benefit dual eligible individual (as defined in section 
1935(c)(6)) or a qualified medicare beneficiary (as 
defined in section 1905(p)(1)) who is enrolled in a 
Medicare Part C plan, the plan may not impose 
cost-sharing that exceeds the amount of cost-sharing 
that would be permitted with respect to the indi-
vidual under this title and title XIX if the individual 
were not enrolled with such plan.’’. 
(c) EFFECTIVE DATES.— 
(1) The amendments made by subsection (a) 
shall apply to plan years beginning on or after Janu-
ary 1, 2009. 
(2) The amendments made by subsection (b) 
shall apply to plan years beginning on or after Janu-
ary 1, 2008. 
SEC. 413. MA PLAN ENROLLMENT MODIFICATIONS. 
(a) 
IMPROVED
PLAN
ENROLLMENT, 
DISENROLLMENT, AND CHANGE OF ENROLLMENT.— 
(1) CONTINUOUS
OPEN
ENROLLMENT
FOR 
FULL-BENEFIT
DUAL
ELIGIBLE
INDIVIDUALS
AND 
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241 
QUALIFIED MEDICARE BENEFICIARIES (QMB).—Sec-
tion 1851(e)(2)(D) of the Social Security Act (42 
U.S.C. 1395w–21(e)(2)(D)) is amended— 
(A) in the heading, by inserting ;‘‘, FULL- 
BENEFIT
DUAL
ELIGIBLE
INDIVIDUALS, AND 
QUALIFIED
MEDICARE
BENEFICIARIES’’ after 
‘‘INSTITUTIONALIZED INDIVIDUALS’’; and 
(B) in the matter before clause (i), by in-
serting ‘‘, a full-benefit dual eligible individual 
(as defined in section 1935(c)(6)), or a quali-
fied medicare beneficiary (as defined in section 
1905(p)(1))’’ after ‘‘institutionalized (as defined 
by the Secretary)’’; and 
(C) in clause (i), by inserting ‘‘or 
disenroll’’ after ‘‘enroll’’. 
(2) SPECIAL
ELECTION
PERIODS
FOR
ADDI-
TIONAL
CATEGORIES
OF
INDIVIDUALS.—Section 
1851(e)(4) of such Act (42 U.S.C. 1395w(e)(4)) is 
amended— 
(A) in subparagraph (C), by striking at the 
end ‘‘or’’; 
(B) in subparagraph (D), by inserting ‘‘, 
taking into account the health or well-being of 
the individual’’ before the period and redesig-
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242 
nating such subparagraph as subparagraph (G); 
and 
(C) by inserting after subparagraph (C) 
the following new subparagraphs: 
‘‘(D) the individual is described in section 
1902(a)(10)(E)(iii) (relating to specified low-in-
come medicare beneficiaries); or 
‘‘(E) the individual is enrolled in an MA 
plan and enrollment in the plan is suspended 
under paragraph (2)(B) or (3)(C) of section 
1857(g) because of a failure of the plan to meet 
applicable requirements.’’. 
(3) ELIMINATION OF CONTINUOUS OPEN EN-
ROLLMENT OF ORIGINAL FEE-FOR-SERVICE ENROLL-
EES IN MEDICARE ADVANTAGE NON-PRESCRIPTION 
DRUG
PLANS.—Subparagraph 
(E) 
of 
section 
1851(e)(2) of the Social Security Act, as added by 
section 206 of division B of the Tax Relief and 
Health Care Act of 2006 (Public Law 109–432), is 
repealed. 
(4) EFFECTIVE DATE.—The amendments made 
by this subsection shall take effect on the date of the 
enactment of this Act. 
(b) ACCESS TO MEDIGAP COVERAGE FOR INDIVID-
UALS WHO LEAVE MA PLANS.— 
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243 
(1) IN
GENERAL.—Section 1882(s)(3) of the 
Social Security Act (42 U.S.C. 1395ss(s)(3)) is 
amended— 
(A) in each of clauses (v)(III) and (vi) sub-
paragraph (B), by striking ‘‘12 months’’ and 
inserting ‘‘24 months’’; and 
(B) in each of subclauses (I) and (II) of 
subparagraph (F)(i), by striking ‘‘12 months’’ 
and inserting ‘‘24 months’’. 
(2) EFFECTIVE DATE.—The amendments made 
by paragraph (1) shall apply to terminations of en-
rollments in MA plans occurring on or after the date 
of the enactment of this Act. 
(c) IMPROVED ENROLLMENT POLICIES.— 
(1) NO
AUTO-ENROLLMENT
OF
MEDICAID 
BENEFICIARIES.— 
(A) IN GENERAL.—Section 1851(e) of such 
Act (42 U.S.C. 1395w–21(e)) is amended by 
adding at the end the following new paragraph: 
‘‘(7) NO
AUTO-ENROLLMENT
OF
MEDICAID 
BENEFICIARIES.—In no case may the Secretary pro-
vide for the enrollment in a MA plan of a Medicare 
Advantage eligible individual who is eligible to re-
ceive medical assistance under title XIX as a full- 
benefit dual eligible individual or a qualified medi-
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