244 
care beneficiary, without the affirmative application 
of such individual (or authorized representative of 
the individual) to be enrolled in such plan.’’. 
(B) NO
APPLICATION
TO
PRESCRIPTION 
DRUG
PLANS.—Section 1860D–1(b)(1)(B)(iii) 
of 
such 
Act 
(42 
U.S.C. 
1395w– 
101(b)(1)(B)(iii)) is amended— 
(i) by striking ‘‘paragraph (2) and’’ 
and by inserting ‘‘paragraph (2),’’; and 
(ii) by inserting ‘‘, and paragraph 
(7),’’ after ‘‘paragraph (4)’’. 
(C) EFFECTIVE DATE.—The amendments 
made by this paragraph shall apply to enroll-
ments that are effective on or after the date of 
the enactment of this Act. 
SEC. 414. INFORMATION FOR BENEFICIARIES ON MA PLAN 
ADMINISTRATIVE COSTS. 
(a) DISCLOSURE OF MEDICAL LOSS RATIOS AND 
OTHER EXPENSE DATA.—Section 1851 of the Social Se-
curity Act (42 U.S.C. 1395w–21) is amended by adding 
at the end the following new subsection: 
‘‘(j) PUBLICATION OF MEDICAL LOSS RATIOS AND 
OTHER COST-RELATED INFORMATION.— 
‘‘(1) IN GENERAL.—The Secretary shall pub-
lish, not later than October 1 of each year (begin-
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ning with 2009), for each Medicare Part C plan con-
tract, the following: 
‘‘(A) The medical loss ratio of the plan in 
the previous year. 
‘‘(B) The per enrollee payment under this 
part to the plan, as adjusted to reflect a risk 
score (based on factors described in section 
1853(a)(1)(C)(i)) of 1.0. 
‘‘(C) The average risk score (as so based). 
‘‘(2) SUBMISSION OF DATA.— 
‘‘(A) IN GENERAL.—Each Medicare Part C 
organization shall submit to the Secretary, in a 
form and manner specified by the Secretary, 
data necessary for the Secretary to publish the 
information described in paragraph (1) on a 
timely basis, including the information de-
scribed in paragraph (3). 
‘‘(B) DATA FOR 2008 AND 2009.—The data 
submitted under subparagraph (A) for 2008 
and for 2009 shall be consistent in content with 
the data reported as part of the Medicare Part 
C plan bid in June 2007 for 2008. 
‘‘(C) MEDICAL
LOSS
RATIO
DATA.—The 
data to be submitted under subparagraph (A) 
relating to medical loss ratio for a year— 
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‘‘(i) shall be submitted not later than 
June 1 of the following year; and 
‘‘(ii) beginning with 2010, shall be 
submitted based on the standardized ele-
ments and definitions developed under 
paragraph (4). 
‘‘(D) AUDITED
DATA.—Data submitted 
under this paragraph shall be data that has 
been audited by an independent third party 
auditor. 
‘‘(3) MLR INFORMATION.—The information de-
scribed in this paragraph with respect to a Medicare 
Part C plan for a year is as follows: 
‘‘(A) The costs for the plan in the previous 
year for each of the following: 
‘‘(i) Total medical expenses, sepa-
rately indicated for benefits for the original 
medicare fee-for-service program option 
and for supplemental benefits. 
‘‘(ii) Non-medical expenses, shown 
separately for each of the following cat-
egories of expenses: 
‘‘(I) Marketing and sales. 
‘‘(II) Direct administration. 
‘‘(III) Indirect administration. 
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‘‘(IV) Net cost of private reinsur-
ance. 
‘‘(B) Gain or loss margin. 
‘‘(C) Total revenue requirement, computed 
as the total of medical and nonmedical expenses 
and gain or loss margin, multiplied by the gain 
or loss margin. 
‘‘(D) Percent of revenue ratio, computed 
as the total revenue requirement expressed as a 
percentage of revenue. 
‘‘(4) DEVELOPMENT
OF
DATA
REPORTING 
STANDARDS.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
develop and implement standardized data ele-
ments and definitions for reporting under this 
subsection, for contract years beginning with 
2010, of data necessary for the calculation of 
the medical loss ratio for Medicare Part C 
plans. Not later than December 31, 2008, the 
Secretary shall publish a report describing the 
elements and definitions so developed. 
‘‘(B) 
CONSULTATION.—The 
Secretary 
shall consult with representatives of Medicare 
Part C organizations, experts on health plan ac-
counting systems, and representatives of the 
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National Association of Insurance Commis-
sioners, in the development of such data ele-
ments and definitions 
‘‘(5) MEDICAL
LOSS
RATIO
DEFINED.—For 
purposes of this part, the term ‘medical loss ratio’ 
means, with respect to an MA plan for a year, the 
ratio of— 
‘‘(A) the aggregate benefits (excluding 
nonmedical expenses described in paragraph 
(3)(A)(ii)) paid under the plan for the year, to 
‘‘(B) the aggregate amount of premiums 
(including basic and supplemental beneficiary 
premiums) and payments made under sections 
1853 and 1860D–15) collected for the plan and 
year. 
Such ratio shall be computed without regard to 
whether the benefits or premiums are for required or 
supplemental benefits under the plan.’’. 
(b) AUDIT OF ADMINISTRATIVE COSTS AND COMPLI-
ANCE WITH THE FEDERAL ACQUISITION REGULATION.— 
(1) IN
GENERAL.—Section 1857(d)(2)(B) of 
such Act (42 U.S.C. 1395w–27(d)(2)(B)) is amend-
ed— 
(A) by striking ‘‘or (ii)’’ and inserting 
‘‘(ii)’’; and 
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