151
SEC. 
109. 
QUALITY 
REPORTING 
FOR 
HOSPITAL 
OUT-
PATIENT SERVICES AND AMBULATORY SUR-
GICAL CENTER SERVICES. 
(a) OUTPATIENT HOSPITAL SERVICES.—
(1) IN GENERAL.—Section 1833(t) of the Social 
Security Act (42 U.S.C. 1395l(t)) is amended—
(A) in paragraph (3)(C)(iv), by inserting 
‘‘subject to paragraph (17),’’ after ‘‘For purposes 
of this subparagraph,’’; and 
(B) by adding at the end the following new 
paragraph: 
‘‘(17) QUALITY REPORTING.—
‘‘(A) REDUCTION IN UPDATE FOR FAILURE 
TO REPORT.—
‘‘(i) IN
GENERAL.—For purposes of 
paragraph (3)(C)(iv) for 2009 and each 
subsequent year, in the case of a subsection 
(d) 
hospital 
(as 
defined 
in 
section 
1886(d)(1)(B)) that does not submit, to the 
Secretary in accordance with this para-
graph, data required to be submitted on 
measures selected under this paragraph 
with respect to such a year, the OPD fee 
schedule increase factor under paragraph 
(3)(C)(iv) for such year shall be reduced by 
2.0 percentage points.
152
‘‘(ii) 
NON-CUMULATIVE
APPLICA-
TION.—A reduction under this subpara-
graph shall apply only with respect to the 
year involved and the Secretary shall not 
take into account such reduction in com-
puting the OPD fee schedule increase factor 
for a subsequent year. 
‘‘(B) FORM AND MANNER OF SUBMISSION.—
Each subsection (d) hospital shall submit data 
on measures selected under this paragraph to the 
Secretary in a form and manner, and at a time, 
specified by the Secretary for purposes of this 
paragraph. 
‘‘(C) DEVELOPMENT OF OUTPATIENT MEAS-
URES.—
‘‘(i) IN GENERAL.—The Secretary shall 
develop measures that the Secretary deter-
mines to be appropriate for the measure-
ment of the quality of care (including medi-
cation errors) furnished by hospitals in out-
patient settings and that reflect consensus 
among affected parties and, to the extent 
feasible and practicable, shall include meas-
ures set forth by one or more national con-
sensus building entities.
153
‘‘(ii) CONSTRUCTION.—Nothing in this 
paragraph shall be construed as preventing 
the Secretary from selecting measures that 
are the same as (or a subset of) the meas-
ures for which data are required to be sub-
mitted under section 1886(b)(3)(B)(viii). 
‘‘(D) REPLACEMENT
OF
MEASURES.—For 
purposes of this paragraph, the Secretary may 
replace any measures or indicators in appro-
priate cases, such as where all hospitals are effec-
tively in compliance or the measures or indica-
tors have been subsequently shown not to rep-
resent the best clinical practice. 
‘‘(E) AVAILABILITY
OF
DATA.—The Sec-
retary shall establish procedures for making data 
submitted under this paragraph available to the 
public. Such procedures shall ensure that a hos-
pital has the opportunity to review the data that 
are to be made public with respect to the hospital 
prior to such data being made public. The Sec-
retary shall report quality measures of process, 
structure, outcome, patients’ perspectives on care, 
efficiency, and costs of care that relate to services 
furnished in outpatient settings in hospitals on
154
the Internet website of the Centers for Medicare 
& Medicaid Services.’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
1886(b)(3)(B)(viii)(III) of such Act (42 U.S.C. 
1395ww(b)(3)(B)(viii)(III)) is amended by inserting 
‘‘(including medication errors)’’ after ‘‘quality of 
care’’. 
(b) APPLICATION TO AMBULATORY SURGICAL CEN-
TERS.—Section 1833(i) of such Act (42 U.S.C. 1935l(i)) is 
amended—
(1) in paragraph (2)(D), by redesignating clause 
(iv) as clause (v) and by inserting after clause (iii) 
the following new clause: 
‘‘(iv) The Secretary may implement such system in a 
manner so as to provide for a reduction in any annual up-
date for failure to report on quality measures in accordance 
with paragraph (7).’’; and 
(2) by adding at the end the following new para-
graph: 
‘‘(7)(A) For purposes of paragraph (2)(D)(iv), the Sec-
retary may provide, in the case of an ambulatory surgical 
center that does not submit, to the Secretary in accordance 
with this paragraph, data required to be submitted on 
measures selected under this paragraph with respect to a 
year, any annual increase provided under the system estab-
155
lished under paragraph (2)(D) for such year shall be re-
duced by 2.0 percentage points. A reduction under this sub-
paragraph shall apply only with respect to the year in-
volved and the Secretary shall not take into account such 
reduction in computing any annual increase factor for a 
subsequent year. 
‘‘(B) Except as the Secretary may otherwise provide, 
the provisions of subparagraphs (B), (C), (D), and (E) of 
paragraph (17) of section 1833(t) shall apply with respect 
to services of ambulatory surgical centers under this para-
graph in a similar manner to the manner in which they 
apply under such paragraph and, for purposes of this sub-
paragraph, any reference to a hospital, outpatient setting, 
or outpatient hospital services is deemed a reference to an 
ambulatory surgical center, the setting of such a center, or 
services of such a center, respectively.’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to payment for services furnished on or 
after January 1, 2009. 
SEC. 110. REPORTING OF ANEMIA QUALITY INDICATORS 
FOR MEDICARE PART B CANCER ANTI-ANEMIA 
DRUGS. 
(a) IN GENERAL.—Section 1842 of the Social Security 
Act (42 U.S.C. 1395u) is amended by adding at the end 
the following new subsection:
156
‘‘(u) Each request for payment, or bill submitted, for 
a drug furnished to an individual for the treatment of ane-
mia in connection with the treatment of cancer shall in-
clude (in a form and manner specified by the Secretary) 
information on the hemoglobin or hematocrit levels for the 
individual.’’. 
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall apply to drugs furnished on or after Janu-
ary 1, 2008. The Secretary of Health and Human Services 
shall address the implementation of such amendment in the 
rulemaking process under section 1848 of the Social Secu-
rity Act (42 U.S.C. 1395w-4) for payment for physicians’ 
services for 2008, consistent with the previous sentence. 
SEC. 111. CLARIFICATION OF HOSPICE SATELLITE DES-
IGNATION. 
Notwithstanding any other provision of law, for pur-
poses of calculating the hospice aggregate payment cap for 
2004, 2005, and 2006 for a hospice program under section 
1814(i)(2)(A) of the Social Security Act (42 U.S.C. 
1395f(i)(2)(A)) for hospice care provided on or after Novem-
ber 1, 2003, and before December 27, 2005, Medicare pro-
vider number 29-1511 is deemed to be a multiple location 
of Medicare provider number 29-1500.
157
TITLE II—MEDICARE 
BENEFICIARY PROTECTIONS 
SEC. 201. EXTENSION OF EXCEPTIONS PROCESS FOR MEDI-
CARE THERAPY CAPS. 
Section 1833(g)(5) of the Social Security Act (42 
U.S.C. 1395l(g)(5)) is amended by striking ‘‘2006’’ and in-
serting ‘‘the period beginning on January 1, 2006, and end-
ing on December 31, 2007,’’. 
SEC. 202. PAYMENT FOR ADMINISTRATION OF PART D VAC-
CINES. 
(a) TRANSITION
FOR 2007.—Notwithstanding any 
other provision of law, in the case of a vaccine that is a 
covered part D drug under section 1860D-2(e) of the Social 
Security Act (42 U.S.C. 1395w-102(e)) and that is admin-
istered during 2007, the administration of such vaccine 
shall be paid under part B of title XVIII of such Act as 
if it were the administration of a vaccine described in sec-
tion 
1861(s)(10)(B) 
of 
such 
Act 
(42 
U.S.C. 
1395w(s)(10)(B)). 
(b) ADMINISTRATION INCLUDED IN COVERAGE OF COV-
ERED PART D DRUGS BEGINNING
IN 2008.—Section 
1860D-2(e)(1) of the Social Security Act (42 U.S.C. 1395w-
102(e)(1)) is amended, in the matter following subpara-
graph (B), by inserting ‘‘(and, for vaccines administered
158
on or after January 1, 2008, its administration)’’ after 
‘‘Public Health Service Act’’. 
SEC. 203. OIG STUDY OF NEVER EVENTS. 
(a) STUDY.—
(1) IN GENERAL.—The Inspector General in the 
Department of Health and Human Services shall con-
duct a study on—
(A) incidences of never events for Medicare 
beneficiaries, including types of such events and 
payments by any party for such events; 
(B) the extent to which the Medicare pro-
gram paid, denied payment, or recouped pay-
ment for services furnished in connection with 
such events and the extent to which beneficiaries 
paid for such services; and 
(C) the administrative processes of the Cen-
ters for Medicare & Medicaid Services to detect 
such events and to deny or recoup payments for 
services furnished in connection with such an 
event. 
(2) CONDUCT
OF
STUDY.—In conducting the 
study under paragraph (1), the Inspector General—
(A) shall audit a representative sample of 
claims and medical records of Medicare bene-
ficiaries to identify never events and any pay-
159
ment (or recoupment) for services furnished in 
connection with such events; 
(B) may request access to such claims and 
records from any Medicare contractor; and 
(C) shall not release individually identifi-
able information or facility-specific information. 
(b) REPORT.—Not later than 2 years after the date 
of the enactment of this Act, the Inspector General shall sub-
mit a report to Congress on the study conducted under this 
section. Such report shall include recommendations for such 
legislation and administrative action, such as a noncov-
erage policy or denial of payments, as the Inspector General 
determines appropriate, including—
(1) recommendations on processes to identify 
never events and to deny or recoup payments for serv-
ices furnished in connection with such events; and 
(2) a recommendation on a potential process (or 
processes) for public disclosure of never events 
which—
(A) will ensure protection of patient pri-
vacy; and 
(B) will permit the use of the disclosed in-
formation for a root cause analysis to inform the 
public and the medical community about safety 
issues involved.
160
(c) FUNDING.— Out of any funds in the Treasury not 
otherwise appropriated, there are appropriated to the In-
spector General of the Department of Health and Human 
Services $3,000,000 to carry out this section, to be available 
until January 1, 2010. 
(d) NEVER EVENTS DEFINED.—For purposes of this 
section, the term ‘‘never event’’ means an event that is listed 
and endorsed as a serious reportable event by the National 
Quality Forum as of November 16, 2006. 
SEC. 204. MEDICARE MEDICAL HOME DEMONSTRATION 
PROJECT. 
(a) IN GENERAL.—The Secretary of Health and 
Human Services (in this section referred to as the ‘‘Sec-
retary’’) shall establish under title XVIII of the Social Secu-
rity Act a medical home demonstration project (in this sec-
tion referred to as the ‘‘project’’) to redesign the health care 
delivery system to provide targeted, accessible, continuous 
and coordinated, family-centered care to high-need popu-
lations and under which—
(1) care management fees are paid to persons 
performing services as personal physicians; and 
(2) incentive payments are paid to physicians 
participating in practices that provide services as a 
medical home under subsection (d).
161
For purposes of this subsection, the term ‘‘high-need popu-
lation’’ means individuals with multiple chronic illnesses 
that require regular medical monitoring, advising, or treat-
ment. 
(b) DETAILS.—
(1) DURATION; SCOPE.—The project shall operate 
during a period of three years and shall include 
urban, rural, and underserved areas in a total of no 
more than 8 States. 
(2) ENCOURAGING
PARTICIPATION
OF
SMALL 
PHYSICIAN PRACTICES.—The project shall be designed 
to include the participation of physicians in practices 
with fewer than three full-time equivalent physicians, 
as well as physicians in larger practices particularly 
in rural and underserved areas. 
(c) PERSONAL PHYSICIAN DEFINED.—
(1) IN GENERAL.—For purposes of this section, 
the term ‘‘personal physician’’ means a physician (as 
defined in section 1861(r)(1) of the Social Security 
Act (42 U.S.C. 1395x(r)(1)) who—
(A) meets the requirements described in 
paragraph (2); and 
(B) performs the services described in para-
graph (3).
162
Nothing in this paragraph shall be construed as pre-
venting such a physician from being a specialist or 
subspecialist for an individual requiring ongoing care 
for a specific chronic condition or multiple chronic 
conditions (such as severe asthma, complex diabetes, 
cardiovascular disease, rheumatologic disorder) or for 
an individual with a prolonged illness. 
(2) 
REQUIREMENTS.—The 
requirements 
de-
scribed in this paragraph for a personal physician 
are as follows: 
(A) The physician is a board certified phy-
sician who provides first contact and continuous 
care for individuals under the physician’s care. 
(B) The physician has the staff and re-
sources to manage the comprehensive and coordi-
nated health care of each such individual. 
(3) SERVICES PERFORMED.—A personal physi-
cian shall perform or provide for the performance of 
at least the following services: 
(A) Advocates for and provides ongoing sup-
port, oversight, and guidance to implement a 
plan of care that provides an integrated, coher-
ent, cross-discipline plan for ongoing medical 
care developed in partnership with patients and 
including all other physicians furnishing care to
163
the patient involved and other appropriate med-
ical personnel or agencies (such as home health 
agencies). 
(B) Uses evidence-based medicine and clin-
ical decision support tools to guide decision-mak-
ing at the point-of-care based on patient-specific 
factors. 
(C) Uses health information technology, that 
may include remote monitoring and patient reg-
istries, to monitor and track the health status of 
patients and to provide patients with enhanced 
and convenient access to health care services. 
(D) Encourages patients to engage in the 
management of their own health through edu-
cation and support systems. 
(d) MEDICAL HOME DEFINED.—For purposes of this 
section, the term ‘‘medical home’’ means a physician prac-
tice that—
(1) is in charge of targeting beneficiaries for 
participation in the project; and 
(2) is responsible for—
(A) providing safe and secure technology to 
promote patient access to personal health infor-
mation;
164
(B) developing a health assessment tool for 
the individuals targeted; and 
(C) providing training programs for per-
sonnel involved in the coordination of care. 
(e) PAYMENT MECHANISMS.—
(1) PERSONAL
PHYSICIAN
CARE
MANAGEMENT 
FEE.—Under the project, the Secretary shall provide 
for payment under section 1848 of the Social Security 
Act (42 U.S.C. 1395w-4) of a care management fee to 
personal physicians providing care management 
under the project. Under such section and using the 
relative value scale update committee (RUC) process 
under such section, the Secretary shall develop a care 
management fee code for such payments and a value 
for such code. 
(2) MEDICAL HOME SHARING IN SAVINGS.—The 
Secretary shall provide for payment under the project 
of a medical home based on the payment methodology 
applied to physician group practices under section 
1866A of the Social Security Act (42 U.S.C. 1395cc-
1). Under such methodology, 80 percent of the reduc-
tions in expenditures under title XVIII of the Social 
Security Act resulting from participation of individ-
uals that are attributable to the medical home (as re-
duced by the total care managements fees paid to the
165
medical home under the project) shall be paid to the 
medical home. The amount of such reductions in ex-
penditures shall be determined by using assumptions 
with respect to reductions in the occurrence of health 
complications, hospitalization rates, medical errors, 
and adverse drug reactions. 
(3) SOURCE.—Payments paid under the project 
shall be made from the Federal Supplementary Med-
ical Insurance Trust Fund under section 1841 of the 
Social Security Act (42 U.S.C. 1395t). 
(f) EVALUATIONS AND REPORTS.—
(1) ANNUAL
INTERIM
EVALUATIONS
AND
RE-
PORTS.—For each year of the project, the Secretary 
shall provide for an evaluation of the project and 
shall submit to Congress, by a date specified by the 
Secretary, a report on the project and on the evalua-
tion of the project for each such year. 
(2) FINAL EVALUATION AND REPORT.—The Sec-
retary shall provide for an evaluation of the project 
and shall submit to Congress, not later than one year 
after completion of the project, a report on the project 
and on the evaluation of the project.
166
SEC. 205. MEDICARE DRA TECHNICAL CORRECTIONS. 
(a) PACE CLARIFICATION.—Paragraph (7) of section 
5302(c) of the Deficit Reduction Act of 2005 (42 U.S.C. 
1395eee note) is amended to read as follows: 
‘‘(7) APPROPRIATION.—
‘‘(A) IN
GENERAL.—Out of funds in the 
Treasury not otherwise appropriated, there are 
appropriated to the Secretary $10,000,000 to 
carry out this subsection for the period of fiscal 
years 2006 through 2010. 
‘‘(B) AVAILABILITY.—Funds appropriated 
under subparagraph (A) shall remain available 
for obligation through fiscal year 2010.’’. 
(b) MISCELLANEOUS TECHNICAL CORRECTIONS.—
(1) CORRECTION OF MARGIN (SECTION 5001).—
Section 1886(b)(3)(B) of the Social Security Act (42 
U.S.C. 1395ww(b)(3)(B)), as amended by section 
5001(a) of the Deficit Reduction Act of 2005 (Public 
Law 109–171), is amended by moving clause (viii) 
(including subclauses (I) through (VII) of such clause) 
6 ems to the left. 
(2) REFERENCE CORRECTION (SECTION 5114).—
Section 5114(a)(2) of the Deficit Reduction Act of 
2005 (Public Law 109–171), in the matter preceding 
subparagraph 
(A), 
is 
amended 
by 
striking 
‘‘1842(b)(6)(F) 
of 
such 
Act 
(42 
U.S.C.
167
1395u(b)(6)(F))’’ and inserting ‘‘1842(b)(6) of such 
Act (42 U.S.C. 1395u(b)(6))’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall take effect as if included in the enactment of 
the Deficit Reduction Act of 2005 (Public Law 109–171). 
SEC. 206. LIMITED CONTINUOUS OPEN ENROLLMENT OF 
ORIGINAL MEDICARE FEE-FOR-SERVICE EN-
ROLLEES INTO MEDICARE ADVANTAGE NON-
PRESCRIPTION DRUG PLANS. 
(a) IN GENERAL.—Section 1851(e)(2) of the Social Se-
curity Act (42 U.S.C. 1395w–21(e)(2)) is amended by add-
ing at the end the following new subparagraph: 
‘‘(E) LIMITED CONTINUOUS OPEN ENROLL-
MENT OF ORIGINAL FEE-FOR-SERVICE ENROLL-
EES
IN
MEDICARE
ADVANTAGE
NON-PRESCRIP-
TION DRUG PLANS.—
‘‘(i) IN GENERAL.—On any date dur-
ing 2007 or 2008 on which a Medicare Ad-
vantage eligible individual is an unenrolled 
fee-for-service individual (as defined in 
clause (ii)), the individual may elect under 
subsection (a)(1) to enroll in a Medicare 
Advantage plan that is not an MA–PD 
plan.
168
‘‘(ii) UNENROLLED
FEE-FOR-SERVICE 
INDIVIDUAL
DEFINED.—In this subpara-
graph, the term ‘unenrolled fee-for-service 
individual’ means, with respect to a date, a 
Medicare 
Advantage 
eligible 
individual 
who—
‘‘(I) is receiving benefits under 
this title through enrollment in the 
original medicare fee-for-service pro-
gram under parts A and B; 
‘‘(II) is not enrolled in an MA 
plan on such date; and 
‘‘(III) as of such date is not other-
wise eligible to elect to enroll in an MA 
plan. 
‘‘(iii) LIMITATION
OF
ONE
CHANGE 
DURING YEAR.—An individual may exercise 
the right under clause (i) only once during 
the year. 
‘‘(iv) NO EFFECT ON COVERAGE UNDER 
A PRESCRIPTION DRUG PLAN.—Nothing in 
this subparagraph shall be construed as per-
mitting an individual exercising the right 
under clause (i)—
169
‘‘(I) who is enrolled in a prescrip-
tion drug plan under part D, to 
disenroll from such plan or to enroll in 
a different prescription drug plan; or 
‘‘(II) who is not enrolled in a pre-
scription drug plan, to enroll in such 
a plan.’’. 
(b) 
CONFORMING
AMENDMENT.—Section 
1860D–
1(b)(1)(B)(iii) of the Social Security Act (42 U.S.C. 
1395w–101(b)(1)(B)(iii)) is amended by striking ‘‘subpara-
graphs (B) and (C)’’ and inserting ‘‘subparagraphs (B), 
(C), and (E)’’. 
TITLE III—MEDICARE PROGRAM 
INTEGRITY EFFORTS 
SEC. 301. OFFSETTING ADJUSTMENT IN MEDICARE ADVAN-
TAGE STABILIZATION FUND. 
Section 1858(e)(2)(A)(i) of the Social Security Act (42 
U.S.C. 1395w-27a(e)(2)(A)(i)) is amended by striking 
‘‘2007,’’ and ‘‘$10,000,000,000’’ and inserting ‘‘2012,’’ and 
‘‘$3,500,000,000’’, respectively.
170
SEC. 302. EXTENSION AND EXPANSION OF RECOVERY 
AUDIT CONTRACTOR PROGRAM UNDER THE 
MEDICARE INTEGRITY PROGRAM. 
(a) IN GENERAL.—Section 1893 of the Social Security 
Act (42 U.S.C. 1395ddd) is amended by adding at the end 
the following new subsection: 
‘‘(h) USE OF RECOVERY AUDIT CONTRACTORS.—
‘‘(1) IN GENERAL.—Under the Program, the Sec-
retary shall enter into contracts with recovery audit 
contractors in accordance with this subsection for the 
purpose of identifying underpayments and overpay-
ments and recouping overpayments under this title 
with respect to all services for which payment is made 
under part A or B. Under the contracts—
‘‘(A) payment shall be made to such a con-
tractor only from amounts recovered; 
‘‘(B) from such amounts recovered, pay-
ment—
‘‘(i) shall be made on a contingent 
basis for collecting overpayments; and 
‘‘(ii) may be made in such amounts as 
the Secretary may specify for identifying 
underpayments; and 
‘‘(C) the Secretary shall retain a portion of 
the amounts recovered which shall be available to 
the program management account of the Centers
171
for Medicare & Medicaid Services for purposes of 
activities conducted under the recovery audit 
program under this subsection. 
‘‘(2) DISPOSITION OF REMAINING RECOVERIES.—
The amounts recovered under such contracts that are 
not paid to the contractor under paragraph (1) or re-
tained by the Secretary under paragraph (1)(C) shall 
be applied to reduce expenditures under parts A and 
B. 
‘‘(3) NATIONWIDE
COVERAGE.—The Secretary 
shall enter into contracts under paragraph (1) in a 
manner so as to provide for activities in all States 
under such a contract by not later than January 1, 
2010. 
‘‘(4) AUDIT
AND
RECOVERY
PERIODS.—Each 
such contract shall provide that audit and recovery 
activities may be conducted during a fiscal year with 
respect to payments made under part A or B—
‘‘(A) during such fiscal year; and 
‘‘(B) retrospectively (for a period of not 
more than 4 fiscal years prior to such fiscal 
year). 
‘‘(5) WAIVER.—The Secretary shall waive such 
provisions of this title as may be necessary to provide
172
for payment of recovery audit contractors under this 
subsection in accordance with paragraph (1). 
‘‘(6) QUALIFICATIONS OF CONTRACTORS.—
‘‘(A) IN GENERAL.—The Secretary may not 
enter into a contract under paragraph (1) with 
a recovery audit contractor unless the contractor 
has staff that has the appropriate clinical knowl-
edge of, and experience with, the payment rules 
and regulations under this title or the contractor 
has, or will contract with, another entity that 
has such knowledgeable and experienced staff. 
‘‘(B) INELIGIBILITY OF CERTAIN CONTRAC-
TORS.—The Secretary may not enter into a con-
tract under paragraph (1) with a recovery audit 
contractor to the extent the contractor is a fiscal 
intermediary under section 1816, a carrier 
under section 1842, or a medicare administra-
tive contractor under section 1874A. 
‘‘(C) PREFERENCE
FOR
ENTITIES
WITH 
DEMONSTRATED
PROFICIENCY.—In 
awarding 
contracts to recovery audit contractors under 
paragraph (1), the Secretary shall give pref-
erence to those risk entities that the Secretary de-
termines have demonstrated more than 3 years 
direct management experience and a proficiency
173
for cost control or recovery audits with private 
insurers, health care providers, health plans, 
under the Medicaid program under title XIX, or 
under this title. 
‘‘(7) CONSTRUCTION RELATING TO CONDUCT OF 
INVESTIGATION OF FRAUD.—A recovery of an over-
payment to a individual or entity by a recovery 
audit contractor under this subsection shall not be 
construed to prohibit the Secretary or the Attorney 
General from investigating and prosecuting, if appro-
priate, allegations of fraud or abuse arising from such 
overpayment. 
‘‘(8) ANNUAL REPORT.—The Secretary shall an-
nually submit to Congress a report on the use of re-
covery audit contractors under this subsection. Each 
such report shall include information on the perform-
ance of such contractors in identifying underpay-
ments and overpayments and recouping overpay-
ments, including an evaluation of the comparative 
performance of such contractors and savings to the 
program under this title.’’. 
(b) ACCESS TO COORDINATION OF BENEFITS CON-
TRACTOR
DATABASE.—The Secretary of Health and 
Human Services shall provide for access by recovery audit 
contractors conducting audit and recovery activities under
174
section 1893(h) of the Social Security Act, as added by sub-
section (a), to the database of the Coordination of Benefits 
Contractor of the Centers for Medicare & Medicaid Services 
with respect to the audit and recovery periods described in 
paragraph (4) of such section 1893(h). 
(c) CONFORMING AMENDMENTS TO CURRENT DEM-
ONSTRATION PROJECT.—Section 306 of the Medicare Pre-
scription Drug, Improvement, and Modernization Act of 
2003 (Public Law 108–173; 117 Stat. 2256) is amended—
(1) in subsection (b)(2), by striking ‘‘last for not 
longer than 3 years’’ and inserting ‘‘continue until 
contracts are entered into under section 1893(h) of the 
Social Security Act’’; and 
(2) by striking subsection (f). 
SEC. 303. FUNDING FOR THE HEALTH CARE FRAUD AND 
ABUSE CONTROL ACCOUNT. 
(a) DEPARTMENTS OF HEALTH AND HUMAN SERVICES 
AND JUSTICE.—
(1) IN
GENERAL.—Section 1817(k)(3)(A)(i) of 
the Social Security Act (42 U.S.C. 1395i(k)(3)(A)(i)) 
is amended—
(A) in the matter preceding subclause (I), 
by inserting ‘‘until expended’’ after ‘‘without fur-
ther appropriation’’;
175
(B) in subclause (II), by striking ‘‘and’’ at 
the end; 
(C) in subclause (III)—
(i) by striking ‘‘for each fiscal year 
after fiscal year 2003’’ and inserting ‘‘for 
each of fiscal years 2004, 2005, and 2006’’; 
and 
(ii) by striking the period at the end 
and inserting a semicolon; and 
(D) by adding at the end the following new 
subclauses: 
‘‘(IV) for each of fiscal years 
2007, 2008, 2009, and 2010, the limit 
under this clause for the preceding fis-
cal year, increased by the percentage 
increase in the consumer price index 
for all urban consumers (all items; 
United States city average) over the 
previous year; and 
‘‘(V) for each fiscal year after fis-
cal year 2010, the limit under this 
clause for fiscal year 2010.’’. 
(2) OFFICE
OF
THE
INSPECTOR
GENERAL
OF 
THE
DEPARTMENT
OF
HEALTH
AND
HUMAN
SERV-
176
ICES.—Section 1817(k)(3)(A)(ii) of such Act (42 
U.S.C. 1395i(k)(3)(A)(ii)) is amended—
(A) in subclause (VI), by striking ‘‘and’’ at 
the end; 
(B) in subclause (VII)—
(i) by striking ‘‘for each fiscal year 
after fiscal year 2002’’ and inserting ‘‘for 
each of fiscal years 2003, 2004, 2005, and 
2006’’; and 
(ii) by striking the period at the end 
and inserting a semicolon; and 
(C) by adding at the end the following new 
subclauses: 
‘‘(VIII) for fiscal year 2007, not 
less than $160,000,000, increased by 
the percentage increase in the con-
sumer price index for all urban con-
sumers (all items; United States city 
average) over the previous year; 
‘‘(IX) for each of fiscal years 
2008, 2009, and 2010, not less than the 
amount required under this clause for 
the preceding fiscal year, increased by 
the percentage increase in the con-
sumer price index for all urban con-
177
sumers (all items; United States city 
average) over the previous year; and 
‘‘(X) for each fiscal year after fis-
cal year 2010, not less than the 
amount required under this clause for 
fiscal year 2010.’’. 
(b) FEDERAL BUREAU OF INVESTIGATION.—Section 
1817(k)(3)(B) of the Social Security Act (42 U.S.C. 
1395i(k)(3)(B)) is amended—
(1) in the matter preceding clause (i), by insert-
ing ‘‘until expended’’ after ‘‘without further appro-
priation’’; 
(2) in clause (vi), by striking ‘‘and’’ at the end; 
(3) in clause (vii)—
(A) by striking ‘‘for each fiscal year after 
fiscal year 2002’’ and inserting ‘‘for each of fis-
cal years 2003, 2004, 2005, and 2006’’; and 
(B) by striking the period at the end and 
inserting a semicolon; and 
(4) by adding at the end the following new 
clauses: 
‘‘(viii) for each of fiscal years 2007, 
2008, 2009, and 2010, the amount to be ap-
propriated under this subparagraph for the 
preceding fiscal year, increased by the per-
178
centage increase in the consumer price 
index for all urban consumers (all items; 
United States city average) over the pre-
vious year; and 
‘‘(ix) for each fiscal year after fiscal 
year 2010, the amount to be appropriated 
under this subparagraph for fiscal year 
2010.’’. 
SEC. 304. IMPLEMENTATION FUNDING. 
For purposes of implementing the provisions of, and 
amendments made by, this title and titles I and II of this 
division, other than section 203, the Secretary of Health 
and Human Services shall provide for the transfer, in ap-
propriate part from the Federal Hospital Insurance Trust 
Fund established under section 1817 of the Social Security 
Act (42 U.S.C. 1395i) and the Federal Supplementary Med-
ical Insurance Trust Fund established under section 1841 
of such Act (42 U.S.C. 1395t), of $45,000,000 to the Centers 
for Medicare & Medicaid Services Program Management 
Account for the period of fiscal years 2007 and 2008.
179
TITLE IV—MEDICAID AND OTHER 
HEALTH PROVISIONS 
SEC. 401. EXTENSION OF TRANSITIONAL MEDICAL ASSIST-
ANCE (TMA) AND ABSTINENCE EDUCATION 
PROGRAM. 
Activities authorized by sections 510 and 1925 of the 
Social Security Act shall continue through June 30, 2007, 
in the manner authorized for fiscal year 2006, notwith-
standing section 1902(e)(1)(A) of such Act, and out of any 
money in the Treasury of the United States not otherwise 
appropriated, there are hereby appropriated such sums as 
may be necessary for such purpose. Grants and payments 
may be made pursuant to this authority through the third 
quarter of fiscal year 2007 at the level provided for such 
activities through the third quarter of fiscal year 2006. 
SEC. 402. GRANTS FOR RESEARCH ON VACCINE AGAINST 
VALLEY FEVER. 
(a) IN GENERAL.—In supporting research on the de-
velopment of vaccines against human diseases, the Sec-
retary of Health and Human Services shall make grants 
for the purpose of conducting research toward the develop-
ment of a vaccine against coccidioidomycosis (commonly 
known as Valley Fever). 
(b) SUNSET.—No grant may be made under subsection 
(a) on or after October 1, 2012. The preceding sentence does