149
(C) The potential for fraud and abuse
under the medicare program if payment were
provided for orthotics used as a component of
durable medical equipment only when made
under the special payment provision for certain
prosthetics and custom fabricated orthotics
under section 1834(h)(1)(F) of the Social Secu-
rity Act, as added by subsection (a) and fur-
nished by qualified practitioners under that sec-
tion.
(D) The impact on payments under titles
XVIII and XIX of the Social Security Act if
such ruling were overturned.
(2) REPORT.—Not later than 6 months after
the date of the enactment of this Act, the Comp-
troller General shall submit to Congress a report on
the study conducted under paragraph (1).
SEC. 428. REPLACEMENT OF PROSTHETIC DEVICES AND
PARTS.
(a) IN GENERAL.—Section 1834(h)(1) (42 U.S.C.
1395m(h)(1)), as amended by section 427(a), is further
amended by adding at the end the following new subpara-
graph:
‘‘(G) REPLACEMENT OF PROSTHETIC DE-
VICES AND PARTS.—
150
‘‘(i) IN GENERAL.—Payment shall be
made for the replacement of prosthetic de-
vices which are artificial limbs, or for the
replacement of any part of such devices,
without regard to continuous use or useful
lifetime restrictions if an ordering physi-
cian determines that the provision of a re-
placement device, or a replacement part of
such a device, is necessary because of any
of the following:
‘‘(I) A change in the physio-
logical condition of the patient.
‘‘(II) An irreparable change in
the condition of the device, or in a
part of the device.
‘‘(III) The condition of the de-
vice, or the part of the device, re-
quires repairs and the cost of such re-
pairs would be more than 60 percent
of the cost of a replacement device, or,
as the case may be, of the part being
replaced.
‘‘(ii) CONFIRMATION
MAY
BE
RE-
QUIRED
IF
REPLACEMENT
DEVICE
OR
PART IS LESS THAN 3 YEARS OLD.—If a
151
physician determines that a replacement
device, or a replacement part, is necessary
pursuant to clause (i)—
‘‘(I) such determination shall be
controlling; and
‘‘(II) such replacement device or
part shall be deemed to be reasonable
and necessary for purposes of section
1862(a)(1)(A);
except that if the device, or part, being re-
placed is less than 3 years old (calculated
from the date on which the beneficiary
began to use the device or part), the Sec-
retary may also require confirmation of ne-
cessity of the replacement device, or, as the
case may be, the replacement part.’’.
(b) PREEMPTION OF RULE.—The provisions of sec-
tion 1834(h)(1)(G) as added by subsection (a) shall super-
sede any rule that as of the date of the enactment of this
Act may have applied a 5-year replacement rule with re-
gard to prosthetic devices.
(c) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to items replaced on or after
April 1, 2001.
152
SEC. 429. REVISED PART B PAYMENT FOR DRUGS AND
BIOLOGICALS AND RELATED SERVICES.
(a) RECOMMENDATIONS
FOR REVISED PAYMENT
METHODOLOGY FOR DRUGS AND BIOLOGICALS.—
(1) STUDY.—
(A) IN GENERAL.—The Comptroller Gen-
eral of the United States shall conduct a study
on the reimbursement for drugs and biologicals
under the current medicare payment method-
ology (provided under section 1842(o) of the
Social Security Act (42 U.S.C. 1395u(o)) and
for related services under part B of title XVIII
of such Act. In the study, the Comptroller Gen-
eral shall—
(i) identify the average prices at
which such drugs and biologicals are ac-
quired by physicians and other suppliers;
(ii) quantify the difference between
such average prices and the reimbursement
amount under such section; and
(iii) determine the extent to which (if
any) payment under such part is adequate
to compensate physicians, providers of
services, or other suppliers of such drugs
and biologicals for costs incurred in the ad-
153
ministration, handling, or storage of such
drugs or biologicals.
(B) CONSULTATION.—In conducting the
study under subparagraph (A), the Comptroller
General shall consult with physicians, providers
of services, and suppliers of drugs and
biologicals under the medicare program under
title XVIII of such Act, as well as other organi-
zations involved in the distribution of such
drugs and biologicals to such physicians, pro-
viders of services, and suppliers.
(2) REPORT.—Not later than 9 months after
the date of the enactment of this Act, the Comp-
troller General shall submit to Congress and to the
Secretary of Health and Human Services a report
on the study conducted under this subsection, and
shall include in such report recommendations for re-
vised payment methodologies described in paragraph
(3).
(3) RECOMMENDATIONS
FOR
REVISED
PAY-
MENT METHODOLOGIES.—
(A) IN GENERAL.—The Comptroller Gen-
eral shall provide specific recommendations for
revised payment methodologies for reimburse-
ment for drugs and biologicals and for related
154
services under the medicare program. The
Comptroller General may include in the
recommendations—
(i) proposals to make adjustments
under subsection (c) of section 1848 of the
Social Security Act (42 U.S.C. 1395w–4)
for the practice expense component of the
physician fee schedule under such section
for the costs incurred in the administra-
tion, handling, or storage of certain cat-
egories of such drugs and biologicals, if ap-
propriate; and
(ii) proposals for new payments to
providers of services or suppliers for such
costs, if appropriate.
(B) 
ENSURING
PATIENT
ACCESS
TO
CARE.—In making recommendations under this
paragraph, the Comptroller General shall en-
sure that any proposed revised payment meth-
odology is designed to ensure that medicare
beneficiaries continue to have appropriate ac-
cess to health care services under the medicare
program.
155
(C) MATTERS
CONSIDERED.—In making
recommendations under this paragraph, the
Comptroller General shall consider—
(i) the method and amount of reim-
bursement for similar drugs and biologicals
made by large group health plans;
(ii) as a result of any revised payment
methodology, the potential for patients to
receive inpatient or outpatient hospital
services in lieu of services in a physician’s
office; and
(iii) the effect of any revised payment
methodology on the delivery of drug thera-
pies by hospital outpatient departments.
(D) COORDINATION WITH BBRA STUDY.—
In making recommendations under this para-
graph, the Comptroller General shall conclude
and take into account the results of the study
provided for under section 213(a) of BBRA
(113 Stat. 1501A–350).
(b) IMPLEMENTATION OF NEW PAYMENT METHOD-
OLOGY.—
(1) IN GENERAL.—Notwithstanding any other
provision of law, based on the recommendations con-
tained in the report under subsection (a), the Sec-
156
retary of Health and Human Services, subject to
paragraph (2), shall revise the payment methodology
under section 1842(o) of the Social Security Act (42
U.S.C. 1395u(o)) for drugs and biologicals furnished
under part B of the medicare program. To the ex-
tent the Secretary determines appropriate, the Sec-
retary may provide for the adjustments to payments
amounts referred to in subsection (a)(3)(A)(i) or ad-
ditional 
payments 
referred 
to 
in 
subsection
(a)(2)(A)(ii).
(2) LIMITATION.—In revising the payment
methodology under paragraph (1), in no case may
the estimated aggregate payments for drugs and
biologicals under the revised system (including addi-
tional 
payments 
referred 
to 
in 
subsection
(a)(3)(A)(ii)) exceed the aggregate amount of pay-
ment for such drugs and biologicals, as projected by
the Secretary, that would have been made under the
payment methodology in effect under such section
1842(o).
(c) TEMPORARY INJUNCTION AGAINST REDUCTIONS
IN PAYMENT RATES.—Notwithstanding any other provi-
sion of law, the Administrator of the Health Care Financ-
ing Administration may not directly or indirectly increase
or decrease the rates of reimbursement (in effect on Sep-
157
tember 1, 2000) for drugs and biologicals under the cur-
rent medicare payment methodology (provided under sec-
tion 1842(o) of such Act (42 U.S.C. 1395u(o)) until such
time as the Secretary has reviewed the report submitted
under subsection (a)(2).
SEC. 430. CONTRAST ENHANCED DIAGNOSTIC PROCE-
DURES UNDER HOSPITAL PROSPECTIVE PAY-
MENT SYSTEM.
(a) SEPARATE CLASSIFICATION.—Section 1833(t)(2)
(42 U.S.C. 1395l(t)(2)) is amended—
(1) by striking ‘‘and’’ at the end of subpara-
graph (E);
(2) by striking the period at the end of sub-
paragraph (F) and inserting ‘‘; and’’; and
(3) by inserting after subparagraph (F) the fol-
lowing new subparagraph:
‘‘(G) the Secretary shall create additional
groups of covered OPD services that classify
separately those procedures that utilize contrast
media from those that do not.’’.
(b) CONFORMING AMENDMENT.—Section 1861(t)(1)
(42 U.S.C. 1395x(t)(1)) is amended by inserting ‘‘(includ-
ing contrast agents)’’ after ‘‘only such drugs’’.
158
(c) EFFECTIVE DATE.—The amendments made by
this section apply to items and services furnished on or
after January 1, 2001.
SEC. 431. QUALIFICATIONS FOR COMMUNITY MENTAL
HEALTH CENTERS.
(a) MEDICARE PROGRAM.—Section 1861(ff)(3)(B)
(42 U.S.C. 1395x(ff)(3)(B)) is amended by striking ‘‘enti-
ty’’ and all that follows and inserting the following: ‘‘entity
that—
‘‘(i)(I) provides the mental health services de-
scribed in section 1913(c)(1) of the Public Health
Service Act; or
‘‘(II) in the case of an entity operating in a
State that by law precludes the entity from pro-
viding itself the service described in subparagraph
(E) of such section, provides for such service by con-
tract with an approved organization or entity (as de-
termined by the Secretary);
‘‘(ii) meets applicable licensing or certification
requirements for community mental health centers
in the State in which it is located; and
‘‘(iii) meets such additional conditions as the
Secretary shall specify to ensure (I) the health and
safety of individuals being furnished such services,
(II) the effective and efficient furnishing of such
159
services, and (III) the compliance of such entity with
the criteria described in section 1931(c)(1) of the
Public Health Service Act.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) applies with respect to community mental
health centers with respect to services furnished on or
after the first day of the third month beginning after the
date of the enactment of this Act.
SEC. 432. MODIFICATION OF MEDICARE BILLING REQUIRE-
MENTS FOR CERTAIN INDIAN PROVIDERS.
(a) IN
GENERAL.—Section 1880(a) (42 U.S.C.
1395qq(a)) is amended by adding at the end the following
new sentence: ‘‘A hospital or a free-standing ambulatory
care clinic (as defined by the Secretary), whether operated
by the Indian Health Service or by an Indian tribe or trib-
al organization (as those terms are defined in section 4
of the Indian Health Care Improvement Act), shall be eli-
gible for payments for services for which payment is made
pursuant to section 1848, notwithstanding sections
1814(c) and 1835(d), if and for so long as it meets all
of the requirements which are applicable generally to such
payments, services, hospitals, and clinics.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to services furnished on or after
January 1, 2001.
160
SEC. 433. GAO STUDY ON COVERAGE OF SURGICAL FIRST
ASSISTING SERVICES OF CERTIFIED REG-
ISTERED NURSE FIRST ASSISTANTS.
(a) STUDY.—The Comptroller General of the United
States shall conduct a study on the effect on the medicare
program under title XVIII of the Social Security Act and
on medicare beneficiaries of coverage under the program
of surgical first assisting services of certified registered
nurse first assistants. The Comptroller General shall con-
sider the following when conducting the study:
(1) Any impact on the quality of care furnished
to medicare beneficiaries by reason of such coverage.
(2) Appropriate education and training require-
ments for certified registered nurse first assistants
who furnish such first assisting services.
(3) Appropriate rates of payment under the
program to such certified registered nurse first as-
sistants for furnishing such services, taking into ac-
count the costs of compensation, overhead, and su-
pervision attributable to certified registered nurse
first assistants.
(b) REPORT.—Not later than 1 year after the date
of the enactment of this Act, the Comptroller General shall
submit to Congress a report on the study conducted under
subsection (a).
161
SEC. 434. MEDPAC STUDY AND REPORT ON MEDICARE RE-
IMBURSEMENT FOR SERVICES PROVIDED BY
CERTAIN PROVIDERS.
(a) STUDY.—The Medicare Payment Advisory Com-
mission shall conduct a study on the appropriateness of
the current payment rates under the medicare program
under title XVIII of the Social Security Act for services
provided by a—
(1) certified nurse-midwife (as defined in sub-
section (gg)(2) of section 1861 of such Act (42
U.S.C. 1395x);
(2) physician assistant (as defined in subsection
(aa)(5)(A) of such section);
(3) nurse practitioner (as defined in such sub-
section); and
(4) clinical nurse specialist (as defined in sub-
section (aa)(5)(B) of such section).
(b) REPORT.—Not later than 18 months after the
date of the enactment of this Act, the Commission shall
submit to Congress a report on the study conducted under
subsection (a), together with any recommendations for leg-
islation that the Commission determines to be appropriate
as a result of such study.
162
SEC. 435. MEDPAC STUDY AND REPORT ON MEDICARE COV-
ERAGE OF SERVICES PROVIDED BY CERTAIN
NONPHYSICIAN PROVIDERS.
(a) STUDY.—
(1) IN GENERAL.—The Medicare Payment Ad-
visory Commission shall conduct a study to deter-
mine the appropriateness of providing coverage
under the medicare program under title XVIII of the
Social Security Act for services provided by a—
(A) surgical technologist;
(B) marriage counselor;
(C) marriage and family therapist;
(D) pastoral care counselor; and
(E) licensed professional counselor of men-
tal health.
(2) COSTS TO PROGRAM.—The study shall con-
sider the short-term and long-term benefits, and
costs to the medicare program, of providing the cov-
erage described in paragraph (1).
(b) REPORT.—Not later than 18 months after the
date of the enactment of this Act, the Commission shall
submit to Congress a report on the study conducted under
subsection (a), together with any recommendations for leg-
islation that the Commission determines to be appropriate
as a result of such study.
163
SEC. 436. GAO STUDY AND REPORT ON THE COSTS OF
EMERGENCY 
AND 
MEDICAL 
TRANSPOR-
TATION SERVICES.
(a) STUDY.—The Comptroller General of the United
States shall conduct a study on the costs of providing
emergency and medical transportation services across the
range of acuity levels of conditions for which such trans-
portation services are provided.
(b) REPORT.—Not later than 18 months after the
date of the enactment of this Act, the Comptroller General
shall submit to Congress a report on the study conducted
under subsection (a), together with recommendations for
any changes in methodology or payment level necessary
to fairly compensate suppliers of emergency and medical
transportation services and to ensure the access of bene-
ficiaries under the medicare program under title XVIII of
the Social Security Act.
SEC. 437. GAO STUDIES AND REPORTS ON MEDICARE PAY-
MENTS.
(a) GAO STUDY ON HCFA POST-PAYMENT AUDIT
PROCESS.—
(1) STUDY.—The Comptroller General of the
United States shall conduct a study on the post-pay-
ment audit process under the medicare program
under title XVIII of the Social Security Act as such
process applies to physicians, including the proper
164
level of resources that the Health Care Financing
Administration should devote to educating physi-
cians regarding—
(A) coding and billing;
(B) documentation requirements; and
(C) the calculation of overpayments.
(2) REPORT.—Not later than 18 months after
the date of the enactment of this Act, the Comp-
troller General shall submit to Congress a report on
the study conducted under paragraph (1) together
with specific recommendations for changes or im-
provements in the post-payment audit process de-
scribed in such paragraph.
(b) GAO STUDY ON ADMINISTRATION AND OVER-
SIGHT.—
(1) STUDY.—The Comptroller General of the
United States shall conduct a study on the aggre-
gate effects of regulatory, audit, oversight, and pa-
perwork burdens on physicians and other health care
providers participating in the medicare program
under title XVIII of the Social Security Act.
(2) REPORT.—Not later than 18 months after
the date of the enactment of this Act, the Comp-
troller General shall submit to Congress a report on
the study conducted under paragraph (1) together
165
with recommendations regarding any area in
which—
(A) a reduction in paperwork, an ease of
administration, or an appropriate change in
oversight and review may be accomplished; or
(B) additional payments or education are
needed to assist physicians and other health
care providers in understanding and complying
with any legal or regulatory requirements.
SEC. 438. MEDPAC STUDY ON ACCESS TO OUTPATIENT PAIN
MANAGEMENT SERVICES.
(a) STUDY.—The Medicare Payment Advisory Com-
mission shall conduct a study on the barriers to coverage
and payment for outpatient interventional pain medicine
procedures under the medicare program under title XVIII
of the Social Security Act. Such study shall examine—
(1) the specific barriers imposed under the
medicare program on the provision of pain manage-
ment procedures in hospital outpatient departments,
ambulatory surgery centers, and physicians’ offices;
and
(2) the consistency of medicare payment poli-
cies for pain management procedures in those dif-
ferent settings.
166
(b) REPORT.—Not later than 1 year after the date
of the enactment of this Act, the Commission shall submit
to Congress a report on the study.
TITLE V—PROVISIONS
RELATING TO PARTS A AND B
Subtitle A—Home Health Services
SEC. 501. 1-YEAR ADDITIONAL DELAY IN APPLICATION OF
15 PERCENT REDUCTION ON PAYMENT LIM-
ITS FOR HOME HEALTH SERVICES.
(a) IN
GENERAL.—Section 1895(b)(3)(A)(i) (42
U.S.C. 1395fff(b)(3)(A)(i)) is amended—
(1) by redesignating subclause (II) as subclause
(III);
(2) in subclause (III), as redesignated, by strik-
ing ‘‘described in subclause (I)’’ and inserting ‘‘de-
scribed in subclause (II)’’; and
(3) by inserting after subclause (I) the fol-
lowing new subclause:
‘‘(II) For the 12-month period
beginning after the period described
in subclause (I), such amount (or
amounts) shall be equal to the amount
(or amounts) determined under sub-
clause (I), updated under subpara-
graph (B).’’.
167
(b) CHANGE IN REPORT.—Section 302(c) of BBRA
(113 Stat. 1501A–360) is amended—
(1) by striking ‘‘Not later than’’ and all that
follows through ‘‘(42 U.S.C. 1395fff)’’ and inserting
‘‘Not later than April 1, 2002’’; and
(2) by striking ‘‘Secretary’’ and inserting
‘‘Comptroller General of the United States’’.
(c) CASE MIX ADJUSTMENT CORRECTIONS.—
(1) IN GENERAL.—Section 1895(b)(3)(B) (42
U.S.C. 1395fff(b)(3)(B)) is amended by adding at
the end the following new clause:
‘‘(iv) ADJUSTMENT
FOR
CASE
MIX
CHANGES.—Insofar as the Secretary deter-
mines that the adjustments under para-
graph (4)(A)(i) for a previous fiscal year
(or estimates that such adjustments for a
future fiscal year) did (or are likely to) re-
sult in a change in aggregate payments
under this subsection during the fiscal year
that are a result of changes in the coding
or classification of different units of serv-
ices that do not reflect real changes in case
mix, the Secretary may adjust the stand-
ard 
prospective 
payment 
amount 
(or
amounts) under paragraph (3) for subse-
168
quent fiscal years so as to eliminate the ef-
fect of such coding or classification
changes.’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) applies to episodes concluding on
or after October 1, 2001.
SEC. 502. RESTORATION OF FULL HOME HEALTH MARKET
BASKET UPDATE FOR HOME HEALTH SERV-
ICES FOR FISCAL YEAR 2001.
(a) IN GENERAL.—Section 1861(v)(1)(L)(x) (42
U.S.C. 1395x(v)(1)(L)(x)) is amended—
(1) by striking ‘‘2001,’’; and
(2) by adding at the end the following: ‘‘With
respect to cost reporting periods beginning during
fiscal year 2001, the update to any limit under this
subparagraph shall be the home health market bas-
ket index.’’.
(b) SPECIAL RULE FOR PAYMENT FOR FISCAL YEAR
2001 BASED
ON ADJUSTED PROSPECTIVE PAYMENT
AMOUNTS.—
(1) IN GENERAL.—Notwithstanding the amend-
ments made by subsection (a), for purposes of mak-
ing payments under section 1895(b) of the Social
Security Act (42 U.S.C. 1395fff(b)) for home health
169
services for fiscal year 2001, the Secretary of Health
and Human Services shall—
(A) with respect to episodes and visits end-
ing on or after October 1, 2000, and before
April 1, 2001, use the final standardized and
budget neutral prospective payment amounts
for 60 day episodes and standardized average
per visit amounts for fiscal year 2001 as pub-
lished by the Secretary in Federal Register of
the July 3, 2000 (65 Federal Register 41128–
41214); and
(B) with respect to episodes and visits end-
ing on or after April 1, 2001, and before Octo-
ber 1, 2001, use such amounts increased by 2.2
percent.
(2) NO EFFECT ON OTHER PAYMENTS OR DE-
TERMINATIONS.—The Secretary shall not take the
provisions of paragraph (1) into account for pur-
poses of payments, determinations, or budget neu-
trality adjustments under section 1895 of the Social
Security Act.
SEC. 503. TEMPORARY TWO-MONTH EXTENSION OF PERI-
ODIC INTERIM PAYMENTS.
(a) TEMPORARY EXTENSION.—Notwithstanding sub-
section (d) of section 4603 of BBA (42 U.S.C. 1395fff
170
note), as amended by section 5101(c)(2) of the Tax and
Trade Relief Extension Act of 1998 (contained in division
J of Public Law 105–277)), the amendments made by
subsection (b) of such section 4603 shall not take effect
until December 1, 2000, in the case of a home health
agency that was receiving periodic interim payments under
section 1815(e)(2) as of September 30, 2000.
(b) PAYMENT RULE.—The amount of such periodic
interim payment made to a home health agency by reason
of subsection (a) during each of November and December,
2000, shall be equal to the amount of such payment made
to the agency in their last full monthly periodic interim
payment. Such amount of payment shall be included in
the tentative settlement of the last cost report for the
home health agency under the payment system in effect
prior to the implementation of the prospective payment
system under section 1895(b) of the Social Security Act
(42 U.S.C. 1395fff(b)).
SEC. 504. USE OF TELEHEALTH IN DELIVERY OF HOME
HEALTH SERVICES.
Section 1895 (42 U.S.C. 1395fff) is amended by add-
ing at the end the following new subsection:
‘‘(e) CONSTRUCTION RELATED TO HOME HEALTH
SERVICES.—
171
‘‘(1) TELECOMMUNICATIONS.—Nothing in this
section shall be construed as preventing a home
health agency furnishing a home health unit of serv-
ice for which payment is made under the prospective
payment system established by this section for such
units of service from furnishing services via a tele-
communication system if such services—
‘‘(A) do not substitute for in-person home
health services ordered as part of a plan of care
certified by a physician pursuant to section
1814(a)(2)(C) or section 1835(a)(2)(A); and
‘‘(B) are not considered a home health
visit for purposes of eligibility or payment
under this title.
‘‘(2) PHYSICIAN
CERTIFICATION.—Nothing in
this section shall be construed as waiving the re-
quirement for a physician certification under section
1814(a)(2)(C) or section 1835(a)(2)(A) of such Act
(42 U.S.C. 1395f(a)(2)(C), 1395n(a)(2)(A)) for the
payment for home health services, whether or not
furnished via a telecommunications system.’’.
172
SEC. 505. STUDY ON COSTS TO HOME HEALTH AGENCIES
OF 
PURCHASING 
NONROUTINE 
MEDICAL
SUPPLIES.
(a) STUDY.—The Comptroller General of the United
States shall conduct a study on variations in prices paid
by home health agencies furnishing home health services
under the medicare program under title XVIII of the So-
cial Security Act in purchasing nonroutine medical sup-
plies, including ostomy supplies, and volumes if such sup-
plies used, shall determine the effect (if any) of variations
on prices and volumes in the provision of such services.
(b) REPORT.—Not later than October 1, 2001, the
Comptroller General shall submit to Congress a report on
the study conducted under subsection (a), and shall in-
clude in the report recommendations respecting whether
payment for nonroutine medical supplies furnished in con-
nection with home health services should be made sepa-
rately from the prospective payment system for such serv-
ices.
SEC. 506. TREATMENT OF BRANCH OFFICES; GAO STUDY
ON SUPERVISION OF HOME HEALTH CARE
PROVIDED IN ISOLATED RURAL AREAS.
(a) TREATMENT OF BRANCH OFFICES.—
(1) IN GENERAL.—Notwithstanding any other
provision of law, in determining for purposes of title
XVIII of the Social Security Act whether an office
173
of a home health agency constitutes a branch office
or a separate home health agency, neither the time
nor distance between a parent office of the home
health agency and a branch office shall be the sole
determinant of a home health agency’s branch office
status.
(2) CONSIDERATION
OF
FORMS
OF
TECH-
NOLOGY IN DEFINITION OF SUPERVISION.—The Sec-
retary of Health and Human Services may include
forms of technology in determining what constitutes
‘‘supervision’’ for purposes of determining a home
heath agency’s branch office status under paragraph
(1).
(b) GAO STUDY.—
(1) STUDY.—The Comptroller General of the
United States shall conduct a study of the provision
of adequate supervision to maintain quality of home
health services delivered under the medicare pro-
gram under title XVIII of the Social Security Act in
isolated rural areas. The study shall evaluate the
methods that home health agency branches and
subunits use to maintain adequate supervision in the
delivery of services to clients residing in those areas,
how these methods of supervision compare to re-
quirements that subunits independently meet medi-
174
care conditions of participation, and the resources
utilized by subunits to meet such conditions.
(2) REPORT.—Not later than January 1, 2002,
the Comptroller General shall submit to Congress a
report on the study conducted under paragraph (1).
The report shall include recommendations on wheth-
er exceptions are needed for subunits and branches
of home health agencies under the medicare program
to maintain access to the home health benefit or
whether alternative policies should be developed to
assure adequate supervision and access and rec-
ommendations on whether a national standard for
supervision is appropriate.
SEC. 507. CLARIFICATION OF THE HOMEBOUND DEFINI-
TION UNDER THE MEDICARE HOME HEALTH
BENEFIT.
(a) CLARIFICATION.—
(1) 
IN
GENERAL.—Sections 
1814(a) 
and
1835(a) (42 U.S.C. 1395f(a) and 1395n(a)) are
each amended—
(A) in the last sentence, by striking ‘‘, and
that absences of the individual from home are
infrequent or of relatively short duration, or are
attributable to the need to receive medical
treatment’’; and
175
(B) by adding at the end the following new
sentences: ‘‘Any absence of an individual from
the home attributable to the need to receive
health care treatment, including regular ab-
sences for the purpose of participating in thera-
peutic, psychosocial, or medical treatment in an
adult day-care program that is licensed or cer-
tified by a State, or accredited, to furnish adult
day-care services in the State shall not dis-
qualify an individual from being considered to
be ‘confined to his home’. Any other absence of
an individual from the home shall not so dis-
qualify an individual if the absence is of infre-
quent or of relatively short duration. For pur-
poses of the preceding sentence, any absence for
the purpose of attending a religious service
shall be deemed to be an absence of infrequent
or short duration.’’.
(2) EFFECTIVE DATE.—The amendments made
by paragraph (1) shall apply to items and services
provided on or after the date of enactment of this
Act.
(b) STUDY.—
(1) IN GENERAL.—The Comptroller General of
the United States shall conduct an evaluation of the
176
effect of the amendment on the cost of and access
to home health services under the medicare program
under title XVIII of the Social Security Act.
(2) REPORT.—Not later than 1 year after the
date of the enactment of this Act, the Comptroller
General shall submit to Congress a report on the
study conducted under paragraph (1).
Subtitle B—Direct Graduate
Medical Education
SEC. 511. INCREASE IN FLOOR FOR DIRECT GRADUATE
MEDICAL EDUCATION PAYMENTS.
Section 
1886(h)(2)(D)(iii) 
(42 
U.S.C.
1395ww(h)(2)(D)(iii)) is amended—
(1) in the heading, by striking ‘‘IN FISCAL YEAR
2001 AT 70 PERCENT OF’’ and inserting ‘‘FOR’’; and
(2) by inserting after ‘‘70 percent’’ the fol-
lowing: ‘‘, and for the cost reporting period begin-
ning during fiscal year 2002 shall not be less than
85 percent,’’.
SEC. 
512. 
CHANGE 
IN 
DISTRIBUTION 
FORMULA 
FOR
MEDICARE+CHOICE-RELATED NURSING AND
ALLIED HEALTH EDUCATION COSTS.
(a) IN GENERAL.—Section 1886(l)(2)(C) (42 U.S.C.
1395ww(l)(2)(C)) is amended by striking all that follows
177
‘‘multiplied by’’ and inserting the following: ‘‘the ratio
of—
‘‘(i) the product of (I) the Secretary’s
estimate of the ratio of the amount of pay-
ments made under section 1861(v) to the
hospital for nursing and allied health edu-
cation activities for the hospital’s cost re-
porting period ending in the second pre-
ceding fiscal year, to the hospital’s total in-
patient days for such period, and (II) the
total number of inpatient days (as estab-
lished by the Secretary) for such period
which are attributable to services furnished
to individuals who are enrolled under a
risk sharing contract with an eligible orga-
nization under section 1876 and who are
entitled to benefits under part A or who
are enrolled with a Medicare+Choice orga-
nization under part C; to
‘‘(ii) the sum of the products deter-
mined under clause (i) for such cost re-
porting periods.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) applies to portions of cost reporting periods
occurring on or after January 1, 2001.
178
Subtitle C—Changes in Medicare
Coverage and Appeals Process
SEC. 521. REVISIONS TO MEDICARE APPEALS PROCESS.
(a) CONDUCT OF RECONSIDERATIONS OF DETER-
MINATIONS
BY INDEPENDENT CONTRACTORS.—Section
1869 (42 U.S.C. 1395ff) is amended to read as follows:
‘‘DETERMINATIONS; APPEALS
‘‘SEC. 1869. (a) INITIAL DETERMINATIONS.—
‘‘(1) PROMULGATIONS OF REGULATIONS.—The
Secretary shall promulgate regulations and make ini-
tial determinations with respect to benefits under
part A or part B in accordance with those regula-
tions for the following:
‘‘(A) The initial determination of whether
an individual is entitled to benefits under such
parts.
‘‘(B) The initial determination of the
amount of benefits available to the individual
under such parts.
‘‘(C) Any other initial determination with
respect to a claim for benefits under such parts,
including an initial determination by the Sec-
retary that payment may not be made, or may
no longer be made, for an item or service under
such parts, an initial determination made by a
179
utilization and quality control peer review orga-
nization under section 1154(a)(2), and an ini-
tial determination made by an entity pursuant
to a contract (other than a contract under sec-
tion 1852) with the Secretary to administer
provisions of this title or title XI.
‘‘(2) DEADLINES FOR MAKING INITIAL DETER-
MINATIONS.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), in promulgating regulations under
paragraph (1), initial determinations shall be
concluded by not later than the 45-day period
beginning on the date the fiscal intermediary or
the carrier, as the case may be, receives a claim
for benefits from an individual as described in
paragraph (1). Notice of such determination
shall be mailed to the individual filing the claim
before the conclusion of such 45-day period.
‘‘(B) CLEAN CLAIMS.—Subparagraph (A)
shall not apply with respect to any claim that
is subject to the requirements of section
1816(c)(2) or section 1842(c)(2).
‘‘(3) REDETERMINATIONS.—
‘‘(A) IN GENERAL.—In promulgating regu-
lations under paragraph (1) with respect to ini-
181
later than the 30-day period beginning on the
date the fiscal intermediary or the carrier, as
the case may be, receives a request for a rede-
termination. Notice of such determination shall
be mailed to the individual filing the claim be-
fore the conclusion of such 30-day period.
‘‘(D) CONSTRUCTION.—For purposes of
the succeeding provisions of this section a rede-
termination under this paragraph shall be con-
sidered to be part of the initial determination.
‘‘(b) APPEAL RIGHTS.—
‘‘(1) IN GENERAL.—
‘‘(A) RECONSIDERATION
OF
INITIAL
DE-
TERMINATION.—Subject to subparagraph (D),
any individual dissatisfied with any initial de-
termination under subsection (a)(1) shall be en-
titled to reconsideration of the determination,
and, subject to subparagraphs (D) and (E), a
hearing thereon by the Secretary to the same
extent as is provided in section 205(b) and to
judicial review of the Secretary’s final decision
after such hearing as is provided in section
205(g). For purposes of the preceding sentence,
any reference to the ‘Commissioner of Social
Security’ or the ‘Social Security Administration’
182
in subsection (g) or (l) of section 205 shall be
considered a reference to the ‘Secretary’ or the
‘Department of Health and Human Services’,
respectively.
‘‘(B) REPRESENTATION BY PROVIDER OR
SUPPLIER.—
‘‘(i) IN
GENERAL.—Sections 206(a),
1102, and 1871 shall not be construed as
authorizing the Secretary to prohibit an in-
dividual from being represented under this
section by a person that furnishes or sup-
plies the individual, directly or indirectly,
with services or items, solely on the basis
that the person furnishes or supplies the
individual with such a service or item.
‘‘(ii) MANDATORY WAIVER OF RIGHT
TO
PAYMENT
FROM
BENEFICIARY.—Any
person that furnishes services or items to
an individual may not represent an indi-
vidual under this section with respect to
the issue described in section 1879(a)(2)
unless the person has waived any rights for
payment from the beneficiary with respect
to the services or items involved in the ap-
peal.
183
‘‘(iii) PROHIBITION ON PAYMENT FOR
REPRESENTATION.—If a person furnishes
services or items to an individual and rep-
resents the individual under this section,
the person may not impose any financial li-
ability on such individual in connection
with such representation.
‘‘(iv) 
REQUIREMENTS
FOR
REP-
RESENTATIVES OF A BENEFICIARY.—The
provisions of section 205(j) and section
206 (other than subsection (a)(4) of such
section) regarding representation of claim-
ants shall apply to representation of an in-
dividual with respect to appeals under this
section in the same manner as they apply
to representation of an individual under
those sections.
‘‘(C) SUCCESSION OF RIGHTS IN CASES OF
ASSIGNMENT.—The right of an individual to an
appeal under this section with respect to an
item or service may be assigned to the provider
of services or supplier of the item or service
upon the written consent of such individual
using a standard form established by the Sec-
retary for such an assignment.
184
‘‘(D) TIME LIMITS FOR FILING APPEALS.—
‘‘(i) RECONSIDERATIONS.—Reconsid-
eration under subparagraph (A) shall be
available only if the individual described in
subparagraph (A) files notice with the Sec-
retary to request reconsideration by not
later than the end of the 180-day period
beginning on the date the individual re-
ceives notice of the redetermination under
subsection (a)(3), or within such additional
time as the Secretary may allow.
‘‘(ii) HEARINGS CONDUCTED BY THE
SECRETARY.—The Secretary shall establish
in regulations time limits for the filing of
a request for a hearing by the Secretary in
accordance with provisions in sections 205
and 206.
‘‘(E) AMOUNTS IN CONTROVERSY.—
‘‘(i) IN GENERAL.—A hearing (by the
Secretary) shall not be available to an indi-
vidual under this section if the amount in
controversy is less than $100, and judicial
review shall not be available to the indi-
vidual if the amount in controversy is less
than $1,000.
185
‘‘(ii) AGGREGATION
OF
CLAIMS.—In
determining the amount in controversy, the
Secretary, under regulations, shall allow
two or more appeals to be aggregated if
the appeals involve—
‘‘(I) the delivery of similar or re-
lated services to the same individual
by one or more providers of services
or suppliers, or
‘‘(II) common issues of law and
fact arising from services furnished to
two or more individuals by one or
more providers of services or sup-
pliers.
‘‘(F) EXPEDITED PROCEEDINGS.—
‘‘(i) EXPEDITED
DETERMINATION.—
In the case of an individual who has re-
ceived notice by a provider of services that
the provider of services plans—
‘‘(I) to terminate services pro-
vided to an individual and a physician
certifies that failure to continue the
provision of such services is likely to
place the individual’s health at signifi-
cant risk, or
186
‘‘(II) to discharge the individual
from the provider of services,
the individual may request, in writing or
orally, an expedited determination or an
expedited reconsideration of an initial de-
termination made under subsection (a)(1),
as the case may be, and the Secretary shall
provide such expedited determination or
expedited reconsideration.
‘‘(ii) EXPEDITED
HEARING.—In a
hearing by the Secretary under this sec-
tion, in which the moving party alleges
that no material issues of fact are in dis-
pute, the Secretary shall make an expe-
dited determination as to whether any such
facts are in dispute and, if not, shall
render a decision expeditiously.
‘‘(G) REOPENING AND REVISION OF DE-
TERMINATIONS.—The Secretary may reopen or
revise any initial determination or reconsidered
determination described in this subsection
under guidelines established by the Secretary in
regulations.
‘‘(c) CONDUCT
OF RECONSIDERATIONS
BY INDE-
PENDENT CONTRACTORS.—
187
‘‘(1) IN GENERAL.—The Secretary shall enter
into contracts with qualified independent contractors
to conduct reconsiderations of initial determinations
made under subparagraphs (B) and (C) of sub-
section (a)(1). Contracts shall be for an initial term
of three years and shall be renewable on a triennial
basis thereafter.
‘‘(2) 
QUALIFIED
INDEPENDENT
CON-
TRACTOR.—For purposes of this subsection, the
term ‘qualified independent contractor’ means an en-
tity or organization that is independent of any orga-
nization under contract with the Secretary that
makes 
initial 
determinations 
under 
subsection
(a)(1), and that meets the requirements established
by the Secretary consistent with paragraph (3).
‘‘(3) REQUIREMENTS.—Any 
qualified 
inde-
pendent contractor entering into a contract with the
Secretary under this subsection shall meet the all of
the following requirements:
‘‘(A) IN
GENERAL.—The qualified inde-
pendent contractor shall perform such duties
and functions and assume such responsibilities
as may be required by the Secretary to carry
out the provisions of this subsection, and shall
have sufficient training and expertise in medical
188
science and legal matters to make reconsider-
ations under this subsection.
‘‘(B) RECONSIDERATIONS.—
‘‘(i) 
IN
GENERAL.—The 
qualified
independent contractor shall review initial
determinations. In the case an initial de-
termination made with respect to whether
an item or service is reasonable and nec-
essary for the diagnosis or treatment of ill-
ness 
or 
injury 
(under 
section
1862(a)(1)(A)), such review shall include
consideration 
of 
the 
facts 
and 
cir-
cumstances of the initial determination by
a panel of physicians or other appropriate
health care professionals and any decisions
with respect to the reconsideration shall be
based on applicable information, including
clinical experience and medical, technical,
and scientific evidence.
‘‘(ii) EFFECT
OF
NATIONAL
AND
LOCAL COVERAGE DETERMINATIONS.—
‘‘(I) NATIONAL
COVERAGE
DE-
TERMINATIONS.—If the Secretary has
made a national coverage determina-
tion pursuant to the requirements es-
189
tablished under the third sentence of
section 1862(a), such determination
shall be binding on the qualified inde-
pendent contractor in making a deci-
sion with respect to a reconsideration
under this section.
‘‘(II) LOCAL COVERAGE DETER-
MINATIONS.—If the Secretary has
made a local coverage determination,
such determination shall not be bind-
ing on the qualified independent con-
tractor in making a decision with re-
spect to a reconsideration under this
section. Notwithstanding the previous
sentence, the qualified independent
contractor shall consider the local cov-
erage determination in making such
decision.
‘‘(III) ABSENCE OF NATIONAL OR
LOCAL COVERAGE DETERMINATION.—
In the absence of such a national cov-
erage determination or local coverage
determination, 
the 
qualified 
inde-
pendent contractor shall make a deci-
sion with respect to the reconsider-
190
ation based on applicable information,
including clinical experience and med-
ical, technical, and scientific evidence.
‘‘(C) DEADLINES FOR DECISIONS.—
‘‘(i) RECONSIDERATIONS.—Except as
provided in clauses (iii) and (iv), the quali-
fied independent contractor shall conduct
and conclude a reconsideration under sub-
paragraph (B), and mail the notice of the
decision with respect to the reconsideration
by not later than the end of the 30-day pe-
riod beginning on the date a request for
reconsideration has been timely filed.
‘‘(ii) CONSEQUENCES OF FAILURE TO
MEET DEADLINE.—In the case of a failure
by the qualified independent contractor to
mail the notice of the decision by the end
of the period described in clause (i) or to
provide notice by the end of the period de-
scribed in clause (iii), as the case may be,
the party requesting the reconsideration or
appeal may request a hearing before the
Secretary, notwithstanding any require-
ments for a reconsidered determination for
191
purposes of the party’s right to such hear-
ing.
‘‘(iii) 
EXPEDITED
RECONSIDER-
ATIONS.—The qualified independent con-
tractor shall perform an expedited recon-
sideration under subsection (b)(1)(F) as
follows:
‘‘(I) DEADLINE FOR DECISION.—
Notwithstanding section 216(j) and
subject to clause (iv), not later than
the end of the 72-hour period begin-
ning on the date the qualified inde-
pendent contractor has received a re-
quest for such reconsideration and has
received such medical or other records
needed for such reconsideration, the
qualified independent contractor shall
provide notice (by telephone and in
writing) to the individual and the pro-
vider of services and attending physi-
cian of the individual of the results of
the reconsideration. Such reconsider-
ation shall be conducted regardless of
whether the provider of services or
supplier will charge the individual for
192
continued services or whether the indi-
vidual will be liable for payment for
such continued services.
‘‘(II) CONSULTATION WITH BEN-
EFICIARY.—In such reconsideration,
the qualified independent contractor
shall solicit the views of the individual
involved.
‘‘(III) SPECIAL RULE FOR HOS-
PITAL
DISCHARGES.—A reconsider-
ation of a discharge from a hospital
shall be conducted under this clause
in accordance with the provisions of
paragraphs (2), (3), and (4) of section
1154(e) as in effect on the date that
precedes the date of the enactment of
this subparagraph.
‘‘(iv) EXTENSION.—An individual re-
questing a reconsideration under this sub-
paragraph may be granted such additional
time as the individual specifies (not to ex-
ceed 14 days) for the qualified independent
contractor to conclude the reconsideration.
The individual may request such additional
time in orally or in writing.
193
‘‘(D) LIMITATION ON INDIVIDUAL REVIEW-
ING DETERMINATIONS.—
‘‘(i) PHYSICIANS AND HEALTH CARE
PROFESSIONAL.—No physician or health
care professional under the employ of a
qualified 
independent 
contractor 
may
review—
‘‘(I) 
determinations 
regarding
health care services furnished to a pa-
tient if the physician or health care
professional was directly responsible
for furnishing such services; or
‘‘(II) determinations regarding
health care services provided in or by
an institution, organization, or agen-
cy, if the physician or any member of
the family of the physician or health
care professional has, directly or indi-
rectly, a significant financial interest
in such institution, organization, or
agency.
‘‘(ii) FAMILY DESCRIBED.—For pur-
poses of this paragraph, the family of a
physician or health care professional in-
cludes the spouse (other than a spouse who
194
is legally separated from the physician or
health care professional under a decree of
divorce or separate maintenance), children
(including stepchildren and legally adopted
children), 
grandchildren, 
parents, 
and
grandparents of the physician or health
care professional.
‘‘(E) EXPLANATION
OF
DECISION.—Any
decision with respect to a reconsideration of a
qualified independent contractor shall be in
writing, and shall include a detailed explanation
of the decision as well as a discussion of the
pertinent facts and applicable regulations ap-
plied in making such decision, and in the case
of a determination of whether an item or serv-
ice is reasonable and necessary for the diag-
nosis or treatment of illness or injury (under
section 1862(a)(1)(A)) an explanation of the
medical and scientific rational for the decision.
‘‘(F) NOTICE REQUIREMENTS.—Whenever
a qualified independent contractor makes a de-
cision with respect to a reconsideration under
this subsection, the qualified independent con-
tractor shall promptly notify the entity respon-
195
sible for the payment of claims under part A or
part B of such decision.
‘‘(G) DISSEMINATION
OF
DECISIONS
ON
RECONSIDERATIONS.—Each 
qualified 
inde-
pendent contractor shall make available all deci-
sions with respect to reconsiderations of such
qualified independent contractors to fiscal inter-
mediaries (under section 1816), carriers (under
section 1842), peer review organizations (under
part B of title XI), Medicare+Choice organiza-
tions offering Medicare+Choice plans under
part C, other entities under contract with the
Secretary to make initial determinations under
part A or part B or title XI, and to the public.
The Secretary shall establish a methodology
under which qualified independent contractors
shall carry out this subparagraph.
‘‘(H) ENSURING
CONSISTENCY
IN
DECI-
SIONS.—Each qualified independent contractor
shall monitor its decisions with respect to re-
considerations to ensure the consistency of such
decisions with respect to requests for reconsid-
eration of similar or related matters.
‘‘(I) DATA COLLECTION.—
196
‘‘(i) IN
GENERAL.—Consistent with
the requirements of clause (ii), a qualified
independent contractor shall collect such
information relevant to its functions, and
keep and maintain such records in such
form and manner as the Secretary may re-
quire to carry out the purposes of this sec-
tion and shall permit access to and use of
any such information and records as the
Secretary may require for such purposes.
‘‘(ii) TYPE
OF
DATA
COLLECTED.—
Each 
qualified 
independent 
contractor
shall keep accurate records of each deci-
sion made, consistent with standards es-
tablished by the Secretary for such pur-
pose. Such records shall be maintained in
an electronic database in a manner that
provides for identification of the following:
‘‘(I) Specific claims that give rise
to appeals.
‘‘(II) Situations suggesting the
need for increased education for pro-
viders of services, physicians, or sup-
pliers.
197
‘‘(III) Situations suggesting the
need for changes in national or local
coverage policy.
‘‘(IV) Situations suggesting the
need for changes in local medical re-
view policies.
‘‘(iii) 
ANNUAL
REPORTING.—Each
qualified independent contractor shall sub-
mit annually to the Secretary (or otherwise
as the Secretary may request) records
maintained under this paragraph for the
previous year.
‘‘(J) HEARINGS BY THE SECRETARY.—The
qualified independent contractor shall (i) pre-
pare such information as is required for an ap-
peal of a decision of the contractor with respect
to a reconsideration to the Secretary for a hear-
ing, including as necessary, explanations of
issues involved in the decision and relevant poli-
cies, and (ii) participate in such hearings as re-
quired by the Secretary.
‘‘(4) NUMBER
OF
QUALIFIED
INDEPENDENT
CONTRACTORS.—The Secretary shall enter into con-
tracts with not fewer than 12 qualified independent
contractors under this subsection.
198
‘‘(5) LIMITATION ON QUALIFIED INDEPENDENT
CONTRACTOR LIABILITY.—No qualified independent
contractor having a contract with the Secretary
under this subsection and no person who is em-
ployed by, or who has a fiduciary relationship with,
any such qualified independent contractor or who
furnishes professional services to such qualified inde-
pendent contractor, shall be held by reason of the
performance of any duty, function, or activity re-
quired or authorized pursuant to this subsection or
to a valid contract entered into under this sub-
section, to have violated any criminal law, or to be
civilly liable under any law of the United States or
of any State (or political subdivision thereof) pro-
vided due care was exercised in the performance of
such duty, function, or activity.
‘‘(d) DEADLINES
FOR HEARINGS
BY
THE SEC-
RETARY.—
‘‘(1) 
HEARING
BY
ADMINISTRATIVE
LAW
JUDGE.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), an administrative law judge
shall conduct and conclude a hearing on a deci-
sion of a qualified independent contractor under
subsection (c) and render a decision on such
199
hearing by not later than the end of the 90-day
period beginning on the date a request for hear-
ing has been timely filed.
‘‘(B) WAIVER
OF
DEADLINE
BY
PARTY
SEEKING HEARING.—The 90-day period under
subparagraph (A) shall not apply in the case of
a motion or stipulation by the party requesting
the hearing to waive such period.
‘‘(2) DEPARTMENTAL
APPEALS
BOARD
RE-
VIEW.—
‘‘(A) IN
GENERAL.—The Departmental
Appeals Board of the Department of Health
and Human Services shall conduct and conclude
a review of the decision on a hearing described
in paragraph (1) and make a decision or re-
mand the case to the administrative law judge
for reconsideration by not later than the end of
the 90-day period beginning on the date a re-
quest for review has been timely filed.
‘‘(B) DAB HEARING PROCEDURE.—In re-
viewing a decision on a hearing under this para-
graph, the Departmental Appeals Board shall
review the case de novo.
‘‘(3) CONSEQUENCES
OF
FAILURE
TO
MEET
DEADLINES.—
200
‘‘(A) HEARING BY ADMINISTRATIVE LAW
JUDGE.—In the case of a failure by an adminis-
trative law judge to render a decision by the
end of the period described in paragraph (1),
the party requesting the hearing may request a
review by the Departmental Appeals Board of
the Department of Health and Human Services,
notwithstanding any requirements for a hearing
for purposes of the party’s right to such a re-
view.
‘‘(B) DEPARTMENTAL APPEALS BOARD RE-
VIEW.—In the case of a failure by the Depart-
mental Appeals Board to render a decision by
the end of the period described in paragraph
(2), the party requesting the hearing may seek
judicial review, notwithstanding any require-
ments for a hearing for purposes of the party’s
right to such judicial review.
‘‘(e) ADMINISTRATIVE PROVISIONS.—
‘‘(1) LIMITATION ON REVIEW OF CERTAIN REG-
ULATIONS.—A regulation or instruction that relates
to a method for determining the amount of payment
under part B and that was initially issued before
January 1, 1981, shall not be subject to judicial re-
view.
201
‘‘(2) OUTREACH.—The Secretary shall perform
such outreach activities as are necessary to inform
individuals entitled to benefits under this title and
providers of services and suppliers with respect to
their rights of, and the process for, appeals made
under this section. The Secretary shall use the toll-
free telephone number maintained by the Secretary
under section 1804(b) to provide information re-
garding appeal rights and respond to inquiries re-
garding the status of appeals.
‘‘(3) CONTINUING
EDUCATION
REQUIREMENT
FOR QUALIFIED INDEPENDENT CONTRACTORS AND
ADMINISTRATIVE LAW JUDGES.—The Secretary shall
provide to each qualified independent contractor,
and, in consultation with the Commissioner of Social
Security, to administrative law judges that decide
appeals of reconsiderations of initial determinations
or other decisions or determinations under this sec-
tion, such continuing education with respect to cov-
erage of items and services under this title or poli-
cies of the Secretary with respect to part B of title
XI as is necessary for such qualified independent
contractors and administrative law judges to make
informed decisions with respect to appeals.
‘‘(4) REPORTS.—
202
‘‘(A) ANNUAL
REPORT
TO
CONGRESS.—
The Secretary shall submit to Congress an an-
nual report describing the number of appeals
for the previous year, identifying issues that re-
quire administrative or legislative actions, and
including any recommendations of the Secretary
with respect to such actions. The Secretary
shall include in such report an analysis of de-
terminations by qualified independent contrac-
tors with respect to inconsistent decisions and
an analysis of the causes of any such inconsist-
encies.
‘‘(B) SURVEY.—Not less frequently than
every 5 years, the Secretary shall conduct a
survey of a valid sample of individuals entitled
to benefits under this title who have filed ap-
peals of determinations under this section, pro-
viders of services, and suppliers to determine
the satisfaction of such individuals or entities
with the process for appeals of determinations
provided for under this section and education
and training provided by the Secretary with re-
spect to that process. The Secretary shall sub-
mit to Congress a report describing the results
of the survey, and shall include any rec-
203
ommendations for administrative or legislative
actions that the Secretary determines appro-
priate.’’.
(b) APPLICABILITY OF REQUIREMENTS AND LIMITA-
TIONS ON LIABILITY OF QUALIFIED INDEPENDENT CON-
TRACTORS
TO MEDICARE+CHOICE INDEPENDENT AP-
PEALS CONTRACTORS.—Section 1852(g)(4) (42 U.S.C.
1395w–22(g)(4)) is amended by adding at the end the fol-
lowing: ‘‘The provisions of section 1869(c)(5) shall apply
to independent outside entities under contract with the
Secretary under this paragraph.’’.
(c) CONFORMING
AMENDMENT.—Section 1154(e)
(42 U.S.C. 1320c–3(e)) is amended by striking para-
graphs (2), (3), and (4).
(d) EFFECTIVE DATE.—The amendments made by
this section apply with respect to initial determinations
made on or after October 1, 2002.
SEC. 522. REVISIONS TO MEDICARE COVERAGE PROCESS.
(a) REVIEW
OF DETERMINATIONS.—Section 1869
(42 U.S.C. 1395ff), as amended by section 521, is further
amended by adding at the end the following new sub-
section:
‘‘(f) REVIEW OF COVERAGE DETERMINATIONS.—
‘‘(1) NATIONAL COVERAGE DETERMINATIONS.—
204
‘‘(A) IN
GENERAL.—Review of any na-
tional coverage determination shall be subject to
the following limitations:
‘‘(i) Such a determination shall not be
reviewed by any administrative law judge.
‘‘(ii) Such a determination shall not
be held unlawful or set aside on the ground
that a requirement of section 553 of title
5, United States Code, or section 1871(b)
of this title, relating to publication in the
Federal Register or opportunity for public
comment, was not satisfied.
‘‘(iii) Upon the filing of a complaint
by an aggrieved party, such a determina-
tion shall be reviewed by the Departmental
Appeals Board of the Department of
Health and Human Services. In con-
ducting such a review, the Departmental
Appeals Board shall review the record and
shall permit discovery and the taking of
evidence to evaluate the reasonableness of
the determination, if the Board determines
that the record is incomplete or lacks ade-
quate information to support the validity
of the determination. In reviewing such a
205
determination, the Departmental Appeals
Board shall defer only to the reasonable
findings of fact, reasonable interpretations
of law, and reasonable applications of fact
to law by the Secretary.
‘‘(iv) A decision of the Departmental
Appeals Board constitutes a final agency
action and is subject to judicial review.
‘‘(B) DEFINITION OF NATIONAL COVERAGE
DETERMINATION.—For purposes of this section,
the term ‘national coverage determination’
means a determination by the Secretary with
respect to whether or not a particular item or
service is covered nationally under this title, but
does not include a determination of what code,
if any, is assigned to a particular item or serv-
ice covered under this title or a determination
with respect to the amount of payment made
for a particular item or service so covered.
‘‘(2) LOCAL COVERAGE DETERMINATION.—
‘‘(A) IN GENERAL.—Review of any local
coverage determination shall be subject to the
following limitations:
‘‘(i) Upon the filing of a complaint by
an aggrieved party, such a determination
206
shall be reviewed by an administrative law
judge of the Social Security Administra-
tion. The administrative law judge shall re-
view the record and shall permit discovery
and the taking of evidence to evaluate the
reasonableness of the determination, if the
administrative law judge determines that
the record is incomplete or lacks adequate
information to support the validity of the
determination. In reviewing such a deter-
mination, the administrative law judge
shall defer only to the reasonable findings
of fact, reasonable interpretations of law,
and reasonable applications of fact to law
by the Secretary.
‘‘(ii) Upon the filing of a complaint by
an aggrieved party, a decision of an admin-
istrative law judge under clause (i) shall be
reviewed by the Departmental Appeals
Board of the Department of Health and
Human Services.
‘‘(iii) A decision of the Departmental
Appeals Board constitutes a final agency
action and is subject to judicial review.
207
‘‘(B) DEFINITION
OF
LOCAL
COVERAGE
DETERMINATION.—For purposes of this section,
the term ‘local coverage determination’ means a
determination by a fiscal intermediary or a car-
rier under part A or part B, as applicable, re-
specting whether or not a particular item or
service is covered on an intermediary- or car-
rier-wide basis under such parts, in accordance
with section 1862(a)(1)(A).
‘‘(3) NO MATERIAL ISSUES OF FACT IN DIS-
PUTE.—In the case of a determination that may oth-
erwise be subject to review under paragraph
(1)(A)(iii) or paragraph (2)(A)(i), where the moving
party alleges that—
‘‘(A) there are no material issues of fact in
dispute, and
‘‘(B) the only issue of law is the constitu-
tionality of a provision of this title, or that a
regulation, determination, or ruling by the Sec-
retary is invalid,
the moving party may seek review by a court of com-
petent jurisdiction without filing a complaint under
such paragraph and without otherwise exhausting
other administrative remedies.
208
‘‘(4) PENDING
NATIONAL
COVERAGE
DETER-
MINATIONS.—
‘‘(A) IN GENERAL.—In the event the Sec-
retary has not issued a national coverage or
noncoverage determination with respect to a
particular type or class of items or services, an
aggrieved person (as described in paragraph
(5)) may submit to the Secretary a request to
make such a determination with respect to such
items or services. By not later than the end of
the 90-day period beginning on the date the
Secretary receives such a request (notwith-
standing the receipt by the Secretary of new
evidence (if any) during such 90-day period),
the Secretary shall take one of the following ac-
tions:
‘‘(i) Issue a national coverage deter-
mination, with or without limitations.
‘‘(ii) Issue a national noncoverage de-
termination.
‘‘(iii) Issue a determination that no
national coverage or noncoverage deter-
mination is appropriate as of the end of
such 90-day period with respect to national
coverage of such items or services.
209
‘‘(iv) Issue a notice that states that
the Secretary has not completed a review
of the request for a national coverage de-
termination and that includes an identi-
fication of the remaining steps in the Sec-
retary’s review process and a deadline by
which the Secretary will complete the re-
view and take an action described in sub-
clause (I), (II), or (III).
‘‘(B) In the case of an action described in
clause (i)(IV), if the Secretary fails to take an
action referred to in such clause by the deadline
specified by the Secretary under such clause,
then the Secretary is deemed to have taken an
action described in clause (i)(III) as of the
deadline.
‘‘(C) When issuing a determination under
clause (i), the Secretary shall include an expla-
nation of the basis for the determination. An
action taken under clause (i) (other than sub-
clause (IV)) is deemed to be a national coverage
determination for purposes of review under sub-
paragraph (A).
‘‘(5) STANDING.—An action under this sub-
section seeking review of a national coverage deter-
210
mination or local coverage determination may be ini-
tiated only by individuals entitled to benefits under
part A, or enrolled under part B, or both, who are
in need of the items or services that are the subject
of the coverage determination.
‘‘(6) PUBLICATION ON THE INTERNET OF DECI-
SIONS OF HEARINGS OF THE SECRETARY.—Each de-
cision of a hearing by the Secretary with respect to
a national coverage determination shall be made
public, and the Secretary shall publish each decision
on the Medicare Internet site of the Department of
Health and Human Services. The Secretary shall re-
move from such decision any information that would
identify any individual, provider of services, or sup-
plier.
‘‘(7) ANNUAL REPORT ON NATIONAL COVERAGE
DETERMINATIONS.—
‘‘(A) IN
GENERAL.—Not later than De-
cember 1 of each year, beginning in 2001, the
Secretary shall submit to Congress a report
that sets forth a detailed compilation of the ac-
tual time periods that were necessary to com-
plete and fully implement national coverage de-
terminations that were made in the previous fis-
cal year for items, services, or medical devices
211
not previously covered as a benefit under this
title, including, with respect to each new item,
service, or medical device, a statement of the
time taken by the Secretary to make and imple-
ment the necessary coverage, coding, and pay-
ment determinations, including the time taken
to complete each significant step in the process
of making and implementing such determina-
tions.
‘‘(B) PUBLICATION OF REPORTS ON THE
INTERNET.—The Secretary shall publish each
report submitted under clause (i) on the medi-
care Internet site of the Department of Health
and Human Services.
‘‘(8) CONSTRUCTION.—Nothing in this sub-
section shall be construed as permitting administra-
tive or judicial review pursuant to this section inso-
far as such review is explicitly prohibited or re-
stricted under another provision of law.’’.
(b) ESTABLISHMENT OF A PROCESS FOR COVERAGE
DETERMINATIONS.—Section 
1862(a) 
(42 
U.S.C.
1395y(a)) is amended by adding at the end the following
new sentence: ‘‘In making a national coverage determina-
tion (as defined in paragraph (1)(B) of section 1869(f))
the Secretary shall ensure that the public is afforded no-
212
tice and opportunity to comment prior to implementation
by the Secretary of the determination; meetings of advi-
sory committees established under section 1114(f) with re-
spect to the determination are made on the record; in
making the determination, the Secretary has considered
applicable information (including clinical experience and
medical, technical, and scientific evidence) with respect to
the subject matter of the determination; and in the deter-
mination, provide a clear statement of the basis for the
determination (including responses to comments received
from the public), the assumptions underlying that basis,
and make available to the public the data (other than pro-
prietary data) considered in making the determination.’’.
(c) IMPROVEMENTS TO THE MEDICARE ADVISORY
COMMITTEE PROCESS.—Section 1114 (42 U.S.C. 1314)
is amended by adding at the end the following new sub-
section:
‘‘(i)(1) Any advisory committee appointed under sub-
section (f) to advise the Secretary on matters relating to
the interpretation, application, or implementation of sec-
tion 1862(a)(1) shall assure the full participation of a
nonvoting member in the deliberations of the advisory
committee, and shall provide such nonvoting member ac-
cess to all information and data made available to voting
213
members of the advisory committee, other than informa-
tion that—
‘‘(A) is exempt from disclosure pursuant to sub-
section (a) of section 552 of title 5, United States
Code, by reason of subsection (b)(4) of such section
(relating to trade secrets); or
‘‘(B) the Secretary determines would present a
conflict of interest relating to such nonvoting mem-
ber.
‘‘(2) If an advisory committee described in paragraph
(1) organizes into panels of experts according to types of
items or services considered by the advisory committee,
any such panel of experts may report any recommendation
with respect to such items or services directly to the Sec-
retary without the prior approval of the advisory com-
mittee or an executive committee thereof.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section apply with respect to—
(1) a review of any national or local coverage
determination filed,
(2) a request to make such a determination
made,
(3) a national coverage determination made,
on or after October 1, 2001.
214
Subtitle D—Improving Access to
New Technologies
SEC. 531. REIMBURSEMENT IMPROVEMENTS FOR NEW
CLINICAL LABORATORY TESTS AND DURA-
BLE MEDICAL EQUIPMENT.
(a) PAYMENT
RULE
FOR
NEW
LABORATORY
TESTS.—Section 
1833(h)(4)(B)(viii) 
(42 
U.S.C.
1395l(h)(4)(B)(viii)) is amended by inserting before the
period at the end the following: ‘‘(or 100 percent of such
median in the case of a clinical diagnostic laboratory test
performed on or after January 1, 2001, that the Secretary
determines is a new test for which no limitation amount
has previously been established under this subpara-
graph)’’.
(b) ESTABLISHMENT
OF CODING
AND PAYMENT
PROCEDURES FOR NEW CLINICAL DIAGNOSTIC LABORA-
TORY TESTS AND OTHER ITEMS ON A FEE SCHEDULE.—
Not later than 1 year after the date of the enactment of
this Act, the Secretary of Health and Human Services
shall establish procedures for coding and payment deter-
minations for the categories of new clinical diagnostic lab-
oratory tests and new durable medical equipment under
part B of the title XVIII of the Social Security Act that
permit public consultation in a manner consistent with the
215
procedures established for implementing coding modifica-
tions for ICD–9–CM.
(c) REPORT ON PROCEDURES USED FOR ADVANCED,
IMPROVED TECHNOLOGIES.—Not later than 1 year after
the date of the enactment of this Act, the Secretary of
Health and Human Services shall submit to Congress a
report that identifies the specific procedures used by the
Secretary under part B of title XVIII of the Social Secu-
rity Act to adjust payments for clinical diagnostic labora-
tory tests and durable medical equipment which are classi-
fied to existing codes where, because of an advance in
technology with respect to the test or equipment, there has
been a significant increase or decrease in the resources
used in the test or in the manufacture of the equipment,
and there has been a significant improvement in the per-
formance of the test or equipment. The report shall in-
clude such recommendations for changes in law as may
be necessary to assure fair and appropriate payment levels
under such part for such improved tests and equipment
as reflects increased costs necessary to produce improved
results.
SEC. 532. RETENTION OF HCPCS LEVEL III CODES.
(a) IN GENERAL.—The Secretary of Health and
Human Services shall maintain and continue the use of
level III codes of the HCPCS coding system (as such sys-
216
tem was in effect on August 16, 2000) through December
31, 2003, and shall make such codes available to the pub-
lic.
(b) DEFINITION.—For purposes of this section, the
term ‘‘HCPCS Level III codes’’ means the alphanumeric
codes for local use under the Health Care Financing Ad-
ministration 
Common 
Procedure 
Coding 
System
(HCPCS).
SEC. 533. RECOGNITION OF NEW MEDICAL TECHNOLOGIES
UNDER INPATIENT HOSPITAL PPS.
(a) EXPEDITING
RECOGNITION
OF
NEW
TECH-
NOLOGIES INTO INPATIENT PPS CODING SYSTEM.—
(1) REPORT.—Not later than April 1, 2001, the
Secretary of Health and Human Services shall sub-
mit to Congress a report on methods of expeditiously
incorporating new medical services and technologies
into the clinical coding system used with respect to
payment for inpatient hospital services furnished
under the medicare program under title XVIII of the
Social Security Act, together with a detailed descrip-
tion of the Secretary’s preferred methods to achieve
this purpose.
(2) IMPLEMENTATION.—Not later than October
1, 2001, the Secretary shall implement the preferred
217
methods described in the report transmitted pursu-
ant to paragraph (1).
(b) ENSURING APPROPRIATE PAYMENTS FOR HOS-
PITALS INCORPORATING NEW MEDICAL SERVICES AND
TECHNOLOGIES.—
(1) ESTABLISHMENT OF MECHANISM.—Section
1886(d)(5) (42 U.S.C. 1395ww(d)(5)) is amended
by adding at the end the following new subpara-
graphs:
‘‘(K)(i) Effective for discharges beginning on or after
October 1, 2001, the Secretary shall establish a mecha-
nism to recognize the costs of new medical services and
technologies under the payment system established under
this subsection. Such mechanism shall be established after
notice and opportunity for public comment (in the publica-
tions required by subsection (e)(5) for a fiscal year or oth-
erwise).
‘‘(ii) The mechanism established pursuant to clause
(i) shall—
‘‘(I) apply to a new medical service or tech-
nology if, based on the estimated costs incurred with
respect to discharges involving such service or tech-
nology, the DRG prospective payment rate otherwise
applicable to such discharges under this subsection
is inadequate;
218
‘‘(II) provide for the collection of data with re-
spect to the costs of a new medical service or tech-
nology described in subclause (I) for a period of not
less than two years and not more than three years
beginning on the date on which an inpatient hospital
code is issued with respect to the service or tech-
nology;
‘‘(III) subject to paragraph (4)(C)(iii), provide
for additional payment to be made under this sub-
section with respect to discharges involving a new
medical service or technology described in subclause
(I) that occur during the period described in sub-
clause (II) in an amount that adequately reflects the
estimated average cost of such service or technology;
and
‘‘(IV) provide that discharges involving such a
service or technology that occur after the close of the
period described in subclause (II) will be classified
within a new or existing diagnosis-related group with
a weighting factor under paragraph (4)(B) that is
derived from cost data collected with respect to dis-
charges occurring during such period.
‘‘(iii) For purposes of clause (ii)(II), the term ‘inpa-
tient hospital code’ means any code that is used with re-
spect to inpatient hospital services for which payment may
219
be made under this subsection and includes an alpha-
numeric code issued under the International Classification
of Diseases, 9th Revision, Clinical Modification (‘ICD–9–
CM’) and its subsequent revisions.
‘‘(iv) For purposes of clause (ii)(III), the term ‘addi-
tional payment’ means, with respect to a discharge for a
new medical service or technology described in clause
(ii)(I), an amount that exceeds the prospective payment
rate otherwise applicable under this subsection to dis-
charges involving such service or technology that would
be made but for this subparagraph.
‘‘(v) The requirement under clause (ii)(III) for an ad-
ditional payment may be satisfied by means of a new-tech-
nology group (described in subparagraph (L)), an add-on
payment, a payment adjustment, or any other similar
mechanism for increasing the amount otherwise payable
with respect to a discharge under this subsection. The Sec-
retary may not establish a separate fee schedule for such
additional payment for such services and technologies, by
utilizing a methodology established under subsection (a)
or (h) of section 1834 to determine the amount of such
additional payment, or by other similar mechanisms or
methodologies.
‘‘(vi) For purposes of this subparagraph and sub-
paragraph (L), a medical service or technology will be con-
220
sidered a ‘new medical service or technology’ if the service
or technology meets criteria established by the Secretary
after notice and an opportunity for public comment.
‘‘(L)(i) In establishing the mechanism under sub-
paragraph (K), the Secretary may establish new-tech-
nology groups into which a new medical service or tech-
nology will be classified if, based on the estimated average
costs incurred with respect to discharges involving such
service or technology, the DRG prospective payment rate
otherwise applicable to such discharges under this sub-
section is inadequate.
‘‘(ii) Such groups—
‘‘(I) shall not be based on the costs associated
with a specific new medical service or technology;
but
‘‘(II) shall, in combination with the applicable
standardized amounts and the weighting factors as-
signed to such groups under paragraph (4)(B), re-
flect such cost cohorts as the Secretary determines
are appropriate for all new medical services and
technologies that are likely to be provided as inpa-
tient hospital services in a fiscal year.
‘‘(iii) The methodology for classifying specific hos-
pital discharges within a diagnosis-related group under
paragraph (4)(A) or a new-technology group shall provide
221
that a specific hospital discharge may not be classified
within both a diagnosis-related group and a new-tech-
nology group.’’.
(2) PRIOR CONSULTATION.—The Secretary of
Health and Human Services shall consult with
groups representing hospitals, physicians, and manu-
facturers of new medical technologies before pub-
lishing the notice of proposed rulemaking required
by section 1886(d)(5)(K)(i) of the Social Security
Act (as added by paragraph (1)).
(3) 
CONFORMING
AMENDMENT.—Section
1886(d)(4)(C)(i) (42 U.S.C. 1395ww(d)(4)(C)(i)) is
amended by striking ‘‘technology,’’ and inserting
‘‘technology (including a new medical service or
technology under paragraph (5)(K)),’’.
Subtitle E—Other Provisions
SEC. 541. INCREASE IN REIMBURSEMENT FOR BAD DEBT.
Section 1861(v)(1)(T) (42 U.S.C. 1395x(v)(1)(T)) is
amended—
(1) in clause (ii), by striking ‘‘and’’ at the end;
(2) in clause (iii)—
(A) by striking ‘‘during a subsequent fiscal
year’’ and inserting ‘‘during fiscal year 2000’’;
and
222
(B) by striking the period at the end and
inserting ‘‘, and’’; and
(3) by adding at the end the following new
clause:
‘‘(iv) for cost reporting periods beginning dur-
ing a subsequent fiscal year, by 30 percent of such
amount otherwise allowable.’’.
SEC. 542. TREATMENT OF CERTAIN PHYSICIAN PATHOLOGY
SERVICES UNDER MEDICARE.
(a) IN GENERAL.—When an independent laboratory
furnishes the technical component of a physician pathol-
ogy service to a fee-for-service medicare beneficiary who
is an inpatient or outpatient of a covered hospital, the Sec-
retary of Health and Human Services shall treat such
component as a service for which payment shall be made
to the laboratory under section 1848 of the Social Security
Act (42 U.S.C. 1395w–4) and not as an inpatient hospital
service for which payment is made to the hospital under
section 1886(d) of such Act (42 U.S.C. 1395ww(d)) or
as an outpatient hospital service for which payment is
made to the hospital under section 1833(t) of such Act
(42 U.S.C. 1395l(t)).
(b) DEFINITIONS.—For purposes of this section:
(1) COVERED HOSPITAL.—The term ‘‘covered
hospital’’ means, with respect to an inpatient or an
223
outpatient, a hospital that had an arrangement with
an independent laboratory that was in effect as of
July 22, 1999, under which a laboratory furnished
the technical component of physician pathology serv-
ices to fee-for-service medicare beneficiaries who
were hospital inpatients or outpatients, respectively,
and submitted claims for payment for such compo-
nent to a medicare carrier (that has a contract with
the Secretary under section 1842 of the Social Secu-
rity Act, 42 U.S.C. 1395u) and not to such hospital.
(2) 
FEE-FOR-SERVICE
MEDICARE
BENE-
FICIARY.—The term ‘‘fee-for-service medicare bene-
ficiary’’ means an individual who—
(A) is entitled to benefits under part A, or
enrolled under part B, or both, of such title;
and
(B) is not enrolled in any of the following:
(i) A Medicare+Choice plan under
part C of such title.
(ii) A plan offered by an eligible orga-
nization under section 1876 of such Act
(42 U.S.C. 1395mm).
(iii) A program of all-inclusive care
for the elderly (PACE) under section 1894
of such Act (42 U.S.C. 1395eee).
224
(iv) A social health maintenance orga-
nization (SHMO) demonstration project
established under section 4018(b) of the
Omnibus Budget Reconciliation Act of
1987 (Public Law 100–203).
(c) EFFECTIVE DATE.—This section applies to serv-
ices furnished during the 2-year period beginning on Jan-
uary 1, 2001.
(d) GAO REPORT.—
(1) STUDY.—The Comptroller General of the
United States shall conduct a study of the effects of
the previous provisions of this section on hospitals
and laboratories and access of fee-for-service medi-
care beneficiaries to the technical component of phy-
sician pathology services.
(2) REPORT.—Not later than April 1, 2002, the
Comptroller General shall submit to Congress a re-
port on such study. The report shall include rec-
ommendations about whether such provisions should
be extended after the end of the period specified in
subsection (c) for either or both inpatient and out-
patient hospital services, and whether the provisions
should be extended to other hospitals.
225
SEC. 543. EXTENSION OF ADVISORY OPINION AUTHORITY.
Section 1128D(b)(6) (42 U.S.C. 1320a–7d(b)(6)) is
amended by striking ‘‘and before the date which is 4 years
after such date of enactment’’.
SEC. 544. CHANGE IN ANNUAL MEDPAC REPORTING.
(a) REVISION OF DEADLINES FOR SUBMISSION OF
REPORTS.—
(1) IN GENERAL.—Section 1805(b)(1)(D) (42
U.S.C. 1395b–6(b)(1)(D)) is amended by striking
‘‘June 1 of each year (beginning with 1998),’’ and
inserting ‘‘June 15 of each year,’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) applies beginning with 2001.
(b) REQUIREMENT FOR ON THE RECORD VOTES ON
RECOMMENDATIONS.—Section 
1805(b) 
(42 
U.S.C.
1395b–6(b)) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(7) 
VOTING
AND
REPORTING
REQUIRE-
MENTS.—With respect to each recommendation con-
tained in a report submitted under paragraph (1),
each member of the Commission shall vote on the
recommendation, and the Commission shall include,
by member, the results of that vote in the report
containing the recommendation.’’.
226
SEC. 545. DEVELOPMENT OF PATIENT ASSESSMENT IN-
STRUMENTS.
(a) DEVELOPMENT.—
(1) IN GENERAL.—Not later than January 1,
2005, the Secretary of Health and Human Services
shall submit to the Committee on Ways and Means
and the Committee on Commerce of the House of
Representatives and the Committee on Finance of
the Senate a report on the development of standard
instruments for the assessment of the health and
functional status of patients, for whom items and
services described in subsection (b) are furnished,
and include in the report a recommendation on the
use of such standard instruments for payment pur-
poses.
(2) DESIGN FOR COMPARISON OF COMMON ELE-
MENTS.—The Secretary shall design such standard
instruments in a manner such that—
(A) elements that are common to the items
and services described in subsection (b) may be
readily comparable and are statistically compat-
ible;
(B) only elements necessary to meet pro-
gram objectives are collected; and
227
(C) the standard instruments supersede
any other assessment instrument used before
that date.
(3) CONSULTATION.—In developing an assess-
ment instrument under paragraph (1), the Secretary
shall consult with the Medicare Payment Advisory
Commission, the Agency for Healthcare Research
and Quality, and qualified organizations rep-
resenting providers of services and suppliers under
title XVIII.
(b) DESCRIPTION OF SERVICES.—For purposes of
subsection (a), items and services described in this sub-
section are those items and services furnished to individ-
uals entitled to benefits under part A, or enrolled under
part B, or both of title XVIII of the Social Security Act
for which payment is made under such title, and include
the following:
(1) Inpatient and outpatient hospital services.
(2) Inpatient and outpatient rehabilitation serv-
ices.
(3) Covered skilled nursing facility services.
(4) Home health services.
(5) Physical or occupational therapy or speech-
language pathology services.
228
(6) Items and services furnished to such indi-
viduals determined to have end stage renal disease.
(7) Partial hospitalization services and other
mental health services.
(8) Any other service for which payment is
made under such title as the Secretary determines to
be appropriate.
SEC. 546. GAO REPORT ON IMPACT OF THE EMERGENCY
MEDICAL TREATMENT AND ACTIVE LABOR
ACT (EMTALA) ON HOSPITAL EMERGENCY DE-
PARTMENTS.
(a) REPORT.—The Comptroller General of the
United States shall submit a report to the Committee on
Commerce and the Committee on Ways and Means of the
House of Representatives and the Committee on Finance
of the Senate by May 1, 2001, on the effect of the Emer-
gency Medical Treatment and Active Labor Act on hos-
pitals, emergency physicians, and physicians covering
emergency department call throughout the United States.
(b) REPORT REQUIREMENTS.—The report should
evaluate—
(1) the extent to which hospitals, emergency
physicians, and physicians covering emergency de-
partment call provide uncompensated services in re-
lation to the requirements of EMTALA;
229
(2) the extent to which the regulatory require-
ments and enforcement of EMTALA have expanded
beyond the legislation’s original intent;
(3) estimates for the total dollar amount of
EMTALA-related care uncompensated costs to
emergency physicians, physicians covering emer-
gency department call, hospital emergency depart-
ments, and other hospital services;
(4) the extent to which different portions of the
United States may be experiencing different levels of
uncompensated EMTALA-related care;
(5) the extent to which EMTALA would be
classified as an unfunded mandate if it were enacted
today;
(6) the extent to which States have programs to
provide financial support for such uncompensated
care;
(7) possible sources of funds, including medi-
care hospital bad debt accounts, that are available to
hospitals to assist with the cost of such uncompen-
sated care; and
(8) the financial strain that illegal immigration
populations, the uninsured, and the underinsured
place on hospital emergency departments, other hos-
230
pital services, emergency physicians, and physicians
covering emergency department call.
(c) DEFINITION.—In this section, the terms ‘‘Emer-
gency Medical Treatment and Active Labor Act’’ and
‘‘EMTALA’’ mean section 1867 of the Social Security Act
(42 U.S.C. 1395dd).
TITLE VI—PROVISIONS RELAT-
ING 
TO 
PART 
C
(MEDICARE+CHOICE 
PRO-
GRAM) 
AND 
OTHER 
MEDI-
CARE MANAGED CARE PROVI-
SIONS
Subtitle A—Medicare+Choice
Payment Reforms
SEC. 601. INCREASE IN MINIMUM PAYMENT AMOUNT.
Section 
1853(c)(1)(B)(ii) 
(42 
U.S.C. 
1395w–
23(c)(1)(B)(ii)) is amended—
(1) by striking ‘‘(ii) For a succeeding year’’ and
inserting ‘‘(ii)(I) Subject to subclauses (II) and
(III), for a succeeding year’’; and
(2) by adding at the end the following new sub-
clauses:
‘‘(II) For 2001, for any area in a
Metropolitan Statistical Area within any of
the 50 States and the District of Columbia
231
with a population of more than 250,000,
$525 (and for any other area within any of
the 50 States, $475).
‘‘(III) For 2001, for any area in a
Metropolitan Statistical Area outside the
50 States and the District of Columbia
with a population of more than 250,000,
$525 (and for any other area outside the
50 States and the District of Columbia,
$475), but not to exceed 120 percent of
the amount determined under this sub-
paragraph for such area for 2000.’’.
SEC. 602. INCREASE IN MINIMUM PERCENTAGE INCREASE.
Section 
1853(c)(1)(C)(ii) 
(42 
U.S.C. 
1395w–
23(c)(1)(C)(ii)) is amended by inserting ‘‘(or 103 percent
in the case of 2001)’’ after ‘‘102 percent’’.
SEC. 603. 10-YEAR PHASE-IN OF RISK ADJUSTMENT.
Section 
1853(a)(3)(C)(ii) 
(42 
U.S.C. 
1395w–
23(a)(3)(C)(ii)) is amended—
(1) in subclause (I), by striking ‘‘and 2001’’
and inserting ‘‘and each succeeding year through the
first year in which risk adjustment is based on data
from inpatient hospital and ambulatory settings’’;
and
232
(2) by amending subclause (II) to read as fol-
lows:
‘‘(II) beginning after such first
year, insofar as such risk adjustment
is based on data from inpatient hos-
pital and ambulatory settings, the
methodology shall be phased in equal
increments over a 10-year period that
begins with such first year.’’.
SEC. 604. TRANSITION TO REVISED MEDICARE+CHOICE
PAYMENT RATES.
(a) 
ANNOUNCEMENT
OF
REVISED
MEDICARE+CHOICE PAYMENT RATES.—Within 2 weeks
after the date of the enactment of this Act, the Secretary
of Health and Human Services shall determine, and shall
announce (in a manner intended to provide notice to inter-
ested parties) Medicare+Choice capitation rates under
section 1853 of the Social Security Act (42 U.S.C.
1395w–23) for 2001, revised in accordance with the provi-
sions of this Act.
(b) REENTRY
INTO
PROGRAM
PERMITTED
FOR
MEDICARE+CHOICE
PROGRAMS
IN
2000.—A
Medicare+Choice organization that provided notice to the
Secretary of Health and Human Services before the date
of the enactment of this Act that it was terminating its
233
contract under part C of title XVIII of the Social Security
Act 
or 
was 
reducing 
the 
service 
area 
of 
a
Medicare+Choice plan offered under such part shall be
permitted to continue participation under such part, or to
maintain the service area of such plan, for 2001 if it pro-
vides the Secretary with the information described in sec-
tion 1854(a)(1) of the Social Security Act (42 U.S.C.
1395w–24(a)(1)) within 2 weeks after the date revised
rates are announced by the Secretary under subsection
(a).
(c) REVISED SUBMISSION OF PROPOSED PREMIUMS
AND RELATED INFORMATION.—If—
(1) a Medicare+Choice organization provided
notice to the Secretary of Health and Human Serv-
ices as of July 3, 2000, that it was renewing its con-
tract under part C of title XVIII of the Social Secu-
rity Act for all or part of the service area or areas
served under its current contract, and
(2) any part of the service area or areas ad-
dressed in such notice includes a payment area for
which the Medicare+Choice capitation rate under
section 1853(c) of such Act (42 U.S.C. 1395w–
23(c)) for 2001, as determined under subsection (a),
is higher than the rate previously determined for
such year,
234
such organization shall revise its submission of the infor-
mation described in section 1854(a)(1) of the Social Secu-
rity Act (42 U.S.C. 1395w–24(a)(1)), and shall submit
such revised information to the Secretary, within 2 weeks
after the date revised rates are announced by the Sec-
retary under subsection (a). In making such submission,
the organization may only reduce premiums, cost-sharing,
enhance benefits, or utilize the stabilization fund described
in section 1854(f)(2) of such Act (42 U.S.C. 1395w–
24(f)(2)).
(d) DISREGARD OF NEW RATE ANNOUNCEMENT IN
APPLYING PASS-THROUGH
FOR NEW NATIONAL COV-
ERAGE DETERMINATIONS.—For purposes of applying sec-
tion 1852(a)(5) of the Social Security Act (42 U.S.C.
1395w–22(a)(5)), the announcement of revised rates
under subsection (a) shall not be treated as an announce-
ment under section 1853(b) of such Act (42 U.S.C.
1395w–23(b)).
SEC. 605. REVISION OF PAYMENT RATES FOR ESRD PA-
TIENTS ENROLLED IN MEDICARE+CHOICE
PLANS.
(a) IN GENERAL.—Section 1853(a)(1)(B) (42 U.S.C.
1395w–23(a)(1)(B)) is amended by adding at the end the
following: ‘‘In establishing such rates, the Secretary shall
provide for appropriate adjustments to increase each rate
235
to reflect the demonstration rate (including the risk ad-
justment methodology associated with such rate) of the
social health maintenance organization end-stage renal
disease capitation demonstrations (established by section
2355 of the Deficit Reduction Act of 1984, as amended
by section 13567(b) of the Omnibus Budget Reconciliation
Act of 1993), and shall compute such rates by taking into
account such factors as renal treatment modality, age, and
the underlying cause of the end-stage renal disease.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to payments for months begin-
ning with January 2002.
(c) PUBLICATION.—Not later than 6 months after
the date of the enactment of this Act, the Secretary of
Health and Human Services shall publish for public com-
ment a description of the appropriate adjustments de-
scribed in the last sentence of section 1853(a)(1)(B) of
the Social Security Act (42 U.S.C. 1395w–23(a)(1)(B)),
as added by subsection (a). The Secretary shall publish
such adjustments in final form by not later than July 1,
2001, so that the amendment made by subsection (a) is
implemented on a timely basis consistent with subsection
(b).
236
SEC. 606. PERMITTING PREMIUM REDUCTIONS AS ADDI-
TIONAL 
BENEFITS 
UNDER
MEDICARE+CHOICE PLANS.
(a) IN GENERAL.—
(1) AUTHORIZATION OF PART B PREMIUM RE-
DUCTIONS.—Section 1854(f)(1) (42 U.S.C. 1395w–
24(f)(1)) is amended—
(A) by redesignating subparagraph (E) as
subparagraph (F); and
(B) by inserting after subparagraph (D)
the following new subparagraph:
‘‘(E) PREMIUM REDUCTIONS.—
‘‘(i) IN GENERAL.—Subject to clause
(ii), as part of providing any additional
benefits required under subparagraph (A),
a Medicare+Choice organization may elect
a reduction in its payments under section
1853(a)(1)(A) 
with 
respect 
to 
a
Medicare+Choice plan and the Secretary
shall apply such reduction to reduce the
premium under section 1839 of each en-
rollee in such plan as provided in section
1840(i).
‘‘(ii) AMOUNT
OF
REDUCTION.—The
amount of the reduction under clause (i)
237
with 
respect 
to 
any 
enrollee 
in 
a
Medicare+Choice plan—
‘‘(I) may not exceed 125 percent
of the premium described under sec-
tion 1839(a)(3); and
‘‘(II) shall apply uniformly to
each enrollee of the Medicare+Choice
plan to which such reduction ap-
plies.’’.
(2) CONFORMING AMENDMENTS.—
(A) 
ADJUSTMENT
OF
PAYMENTS
TO
MEDICARE+CHOICE
ORGANIZATIONS.—Section
1853(a)(1)(A) (42 U.S.C. 1395w–23(a)(1)(A))
is amended by inserting ‘‘reduced by the
amount of any reduction elected under section
1854(f)(1)(E) and’’ after ‘‘for that area,’’.
(B) ADJUSTMENT AND PAYMENT OF PART
B PREMIUMS.—
(i) ADJUSTMENT
OF
PREMIUMS.—
Section 
1839(a)(2) 
(42 
U.S.C.
1395r(a)(2)) 
is 
amended 
by 
striking
‘‘shall’’ and all that follows and inserting
the following: ‘‘shall be the amount deter-
mined under paragraph (3), adjusted as
required in accordance with subsections
238
(b), (c), and (f), and to reflect 80 percent
of any reduction elected under section
1854(f)(1)(E).’’.
(ii) PAYMENT OF PREMIUMS.—Section
1840 (42 U.S.C. 1395s) is amended by
adding at the end the following new sub-
section:
‘‘(i) In the case of an individual enrolled in a
Medicare+Choice plan, the Secretary shall provide for
necessary adjustments of the monthly beneficiary pre-
mium to reflect 80 percent of any reduction elected under
section 1854(f)(1)(E). This premium adjustment may be
provided directly or as an adjustment to any social secu-
rity, railroad retirement, and civil service retirement bene-
fits, to the extent which the Secretary determines that
such an adjustment is appropriate with the concurrence
of the agencies responsible for the administration of such
benefits.’’.
(C) INFORMATION COMPARING PLAN PRE-
MIUMS UNDER PART C.—Section 1851(d)(4)(B)
(42 U.S.C. 1395w–21(d)(4)(B)) is amended—
(i) by striking ‘‘PREMIUMS.—The’’
and inserting ‘‘PREMIUMS.—
‘‘(i) IN GENERAL.—The’’; and
239
(ii) by adding at the end the following
new clause:
‘‘(ii) REDUCTIONS.—The reduction in
part B premiums, if any.’’.
(D) TREATMENT OF REDUCTION FOR PUR-
POSES
OF
DETERMINING
GOVERNMENT
CON-
TRIBUTION UNDER PART B.—Section 1844 (42
U.S.C. 1395w) is amended by adding at the
end the following new subsection:
‘‘(c) The Secretary shall determine the Government
contribution under subparagraphs (A) and (B) of sub-
section (a)(1) without regard to any premium reduction
resulting from an election under section 1854(f)(1)(E).’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall apply to years beginning with 2002.
SEC. 607. FULL IMPLEMENTATION OF RISK ADJUSTMENT
FOR CONGESTIVE HEART FAILURE ENROLL-
EES FOR 2001.
(a) IN GENERAL.—Section 1853(a)(3)(C) (42 U.S.C.
1395w–23(a)(3)(C)) is amended—
(1) in clause (ii), by striking ‘‘Such risk adjust-
ment’’ and inserting ‘‘Except as provided in clause
(iii), such risk adjustment’’; and
(2) by adding at the end the following new
clause:
240
‘‘(iii) FULL
IMPLEMENTATION
OF
RISK
ADJUSTMENT
FOR
CONGESTIVE
HEART FAILURE ENROLLEES FOR 2001.—
‘‘(I) EXEMPTION
FROM
PHASE-
IN.—Subject to subclause (II), the
Secretary shall fully implement the
risk 
adjustment 
methodology 
de-
scribed in clause (i) with respect to
each individual who has had a quali-
fying congestive heart failure inpa-
tient diagnosis (as determined by the
Secretary under such risk adjustment
methodology) during the period begin-
ning on July 1, 1999, and ending on
June 30, 2000, and who is enrolled in
a coordinated care plan that is the
only coordinated care plan offered on
January 1, 2001, in the service area
of the individual.
‘‘(II) PERIOD OF APPLICATION.—
Subclause (I) shall only apply during
the 1-year period beginning on Janu-
ary 1, 2001.’’.
(b) EXCLUSION FROM DETERMINATION
OF
THE
BUDGET NEUTRALITY FACTOR.—Section 1853(c)(5) (42
241
U.S.C. 1395w–23(c)(5)) is amended by striking ‘‘sub-
section (i)’’ and inserting ‘‘subsections (a)(3)(C)(iii) and
(i)’’.
SEC. 
608. 
EXPANSION 
OF 
APPLICATION 
OF
MEDICARE+CHOICE NEW ENTRY BONUS.
(a) IN GENERAL.—Section 1853(i)(1) (42 U.S.C.
1395w–23(i)(1)) is amended in the matter preceding sub-
paragraph (A) by inserting ‘‘, or filed notice with the Sec-
retary as of October 3, 2000, that they will not be offering
such a plan as of January 1, 2001’’ after ‘‘January 1,
2000’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply as if included in the enactment
of BBRA.
SEC. 609. REPORT ON INCLUSION OF CERTAIN COSTS OF
THE DEPARTMENT OF VETERANS AFFAIRS
AND MILITARY FACILITY SERVICES IN CAL-
CULATING 
MEDICARE+CHOICE 
PAYMENT
RATES.
The Secretary of Health and Human Services shall
report to Congress by not later than January 1, 2003,
on a method to phase-in the costs of military facility serv-
ices furnished by the Department of Veterans Affairs, and
the costs of military facility services furnished by the De-
partment of Defense, to medicare-eligible beneficiaries in
242
the calculation of an area’s Medicare+Choice capitation
payment. Such report shall include on a county-by-county
basis—
(1) the actual or estimated cost of such services
to medicare-eligible beneficiaries;
(2) the change in Medicare+Choice capitation
payment rates if such costs are included in the cal-
culation of payment rates;
(3) one or more proposals for the implementa-
tion of payment adjustments to Medicare+Choice
plans in counties where the payment rate has been
affected due to the failure to calculate the cost of
such services to medicare-eligible beneficiaries; and
(4) 
a 
system 
to 
ensure 
that 
when 
a
Medicare+Choice enrollee receives covered services
through a facility of the Department of Veterans Af-
fairs or the Department of Defense there is an ap-
propriate payment recovery to the medicare program
under title XVIII of the Social Security Act.
243
Subtitle B—Other Medicare+Choice
Reforms
SEC. 611. PAYMENT OF ADDITIONAL AMOUNTS FOR NEW
BENEFITS COVERED DURING A CONTRACT
TERM.
(a) IN GENERAL.—Section 1853(c)(7) (42 U.S.C.
1395w–23(c)(7)) is amended to read as follows:
‘‘(7) ADJUSTMENT FOR NATIONAL COVERAGE
DETERMINATIONS
AND
LEGISLATIVE
CHANGES
IN
BENEFITS.—If the Secretary makes a determination
with respect to coverage under this title or there is
a change in benefits required to be provided under
this part that the Secretary projects will result in a
significant increase in the costs to Medicare+Choice
of providing benefits under contracts under this part
(for periods after any period described in section
1852(a)(5)), the Secretary shall adjust appropriately
the payments to such organizations under this part.
Such projection and adjustment shall be based on an
analysis by the Chief Actuary of the Health Care Fi-
nancing Administration of the actuarial costs associ-
ated with the new benefits.’’.
(b) CONFORMING AMENDMENT.—Section 1852(a)(5)
(42 U.S.C. 1395w–22(a)(5)) is amended—
244
(1) in the heading, by inserting ‘‘AND LEGISLA-
TIVE CHANGES IN BENEFITS’’ after ‘‘NATIONAL COV-
ERAGE DETERMINATIONS’’;
(2) by inserting ‘‘or legislative change in bene-
fits required to be provided under this part’’ after
‘‘national coverage determination’’;
(3) in subparagraph (A), by inserting ‘‘or legis-
lative change in benefits’’ after ‘‘such determina-
tion’’;
(4) in subparagraph (B), by inserting ‘‘or legis-
lative change’’ after ‘‘if such coverage determina-
tion’’; and
(5) by adding at the end the following:
‘‘The projection under the previous sentence shall be
based on an analysis by the Chief Actuary of the
Health Care Financing Administration of the actu-
arial costs associated with the coverage determina-
tion or legislative change in benefits.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section are effective on the date of the enactment of
this Act and apply to national coverage determinations
and legislative changes in benefits occurring on or after
such date.
245
SEC. 612. RESTRICTION ON IMPLEMENTATION OF SIGNIFI-
CANT 
NEW 
REGULATORY 
REQUIREMENTS
MIDYEAR.
(a) IN
GENERAL.—Section 1856(b) (42 U.S.C.
1395w–26(b)) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(4) PROHIBITION OF MIDYEAR IMPLEMENTA-
TION OF SIGNIFICANT NEW REGULATORY REQUIRE-
MENTS.—The Secretary may not implement, other
than at the beginning of a calendar year, regulations
under this section that impose new, significant regu-
latory requirements on a Medicare+Choice organiza-
tion or plan.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) takes effect on the date of the enactment
of this Act.
SEC. 613. TIMELY APPROVAL OF MARKETING MATERIAL
THAT FOLLOWS MODEL MARKETING LAN-
GUAGE.
(a) IN
GENERAL.—Section 1851(h) (42 U.S.C.
1395w–21(h)) is amended—
(1) in paragraph (1)(A), by inserting ‘‘(or 10
days in the case described in paragraph (5))’’ after
‘‘45 days’’; and
(2) by adding at the end the following new
paragraph:
246
‘‘(5) SPECIAL TREATMENT OF MARKETING MA-
TERIAL
FOLLOWING
MODEL
MARKETING
LAN-
GUAGE.—In the case of marketing material of an or-
ganization that uses, without modification, proposed
model language specified by the Secretary, the pe-
riod specified in paragraph (1)(A) shall be reduced
from 45 days to 10 days.’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) apply to marketing material submitted on
or after January 1, 2001.
SEC. 614. AVOIDING DUPLICATIVE REGULATION.
(a) IN GENERAL.—Section 1856(b)(3)(B) (42 U.S.C.
1395w–26(b)(3)(B)) is amended—
(1) in clause (i), by inserting ‘‘(including cost-
sharing requirements)’’ after ‘‘Benefit require-
ments’’; and
(2) by adding at the end the following new
clause:
‘‘(iv) Requirements relating to mar-
keting materials and summaries and sched-
ules 
of 
benefits 
regarding 
a
Medicare+Choice plan.’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) take effect on the date of the enactment
of this Act.
247
SEC. 615. ELECTION OF UNIFORM LOCAL COVERAGE POL-
ICY FOR MEDICARE+CHOICE PLAN COVERING
MULTIPLE LOCALITIES.
Section 1852(a)(2) (42 U.S.C. 1395w–22(a)(2)) is
amended by adding at the end the following new subpara-
graph:
‘‘(C) ELECTION
OF
UNIFORM
COVERAGE
POLICY.—In the case of a Medicare+Choice or-
ganization that offers a Medicare+Choice plan
in an area in which more than one local cov-
erage policy is applied with respect to different
parts of the area, the organization may elect to
have the local coverage policy for the part of
the 
area 
that 
is 
most 
beneficial 
to
Medicare+Choice enrollees (as identified by the
Secretary) 
apply 
with 
respect 
to 
all
Medicare+Choice enrollees enrolled in the
plan.’’.
SEC. 
616. 
ELIMINATING 
HEALTH 
DISPARITIES 
IN
MEDICARE+CHOICE PROGRAM.
(a) QUALITY ASSURANCE PROGRAM FOCUS ON RA-
CIAL AND ETHNIC MINORITIES.—Subparagraphs (A) and
(B) of section 1852(e)(2) (42 U.S.C. 1395w–22(e)(2)) are
each amended by adding at the end the following:
‘‘Such program shall include a separate focus
(with respect to all the elements described in
248
this subparagraph) on racial and ethnic minori-
ties.’’.
(b) REPORT.—Section 1852(e) (42 U.S.C. 1395w–
22(e)) is amended by adding at the end the following new
paragraph:
‘‘(5) REPORT TO CONGRESS.—
‘‘(A) IN GENERAL.—Not later than 2 years
after the date of the enactment of this para-
graph, and biennially thereafter, the Secretary
shall submit to Congress a report regarding
how quality assurance programs conducted
under this subsection focus on racial and ethnic
minorities.
‘‘(B) CONTENTS OF REPORT.—Each such
report shall include the following:
‘‘(i) A description of the means by
which such programs focus on such racial
and ethnic minorities.
‘‘(ii) An evaluation of the impact of
such programs on eliminating health dis-
parities and on improving health outcomes,
continuity and coordination of care, man-
agement of chronic conditions, and con-
sumer satisfaction.
249
‘‘(iii) Recommendations on ways to re-
duce clinical outcome disparities among ra-
cial and ethnic minorities.’’.
SEC. 617. MEDICARE+CHOICE PROGRAM COMPATIBILITY
WITH EMPLOYER OR UNION GROUP HEALTH
PLANS.
(a) IN GENERAL.—Section 1857 (42 U.S.C. 1395w–
27) is amended by adding at the end the following new
subsection:
‘‘(i) MEDICARE+CHOICE PROGRAM COMPATIBILITY
WITH EMPLOYER OR UNION GROUP HEALTH PLANS.—
To facilitate the offering of Medicare+Choice plans under
contracts between Medicare+Choice organizations and
employers, labor organizations, or the trustees of a fund
established by 1 or more employers or labor organizations
(or combination thereof) to furnish benefits to the entity’s
employees, former employees (or combination thereof) or
members or former members (or combination thereof) of
the labor organizations, the Secretary may waive or mod-
ify requirements that hinder the design of, the offering
of, or the enrollment in such Medicare+Choice plans.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) applies with respect to years beginning with
2001.
250
SEC. 618. SPECIAL MEDIGAP ENROLLMENT ANTIDISCRIMI-
NATION PROVISION FOR CERTAIN BENE-
FICIARIES.
(a) DISENROLLMENT
WINDOW
IN
ACCORDANCE
WITH
BENEFICIARY’S
CIRCUMSTANCE.—Section
1882(s)(3) (42 U.S.C. 1395ss(s)(3)) is amended—
(1) in subparagraph (A), in the matter fol-
lowing clause (iii), by striking ‘‘, subject to subpara-
graph (E), seeks to enroll under the policy not later
than 63 days after the date of the termination of en-
rollment described in such subparagraph’’ and in-
serting ‘‘seeks to enroll under the policy during the
period specified in subparagraph (E)’’; and
(2) by striking subparagraph (E) and inserting
the following new subparagraph:
‘‘(E) For purposes of subparagraph (A), the time pe-
riod specified in this subparagraph is—
‘‘(i) in the case of an individual described in
subparagraph (B)(i), the period beginning on the
date the individual receives a notice of termination
or cessation of all supplemental health benefits (or,
if no such notice is received, notice that a claim has
been denied because of such a termination or ces-
sation) and ending on the date that is 63 days after
the applicable notice;
251
‘‘(ii) in the case of an individual described in
clause (ii), (iii), (v), or (vi) of subparagraph (B)
whose enrollment is terminated involuntarily, the pe-
riod beginning on the date that the individual re-
ceives a notice of termination and ending on the
date that is 63 days after the date the applicable
coverage is terminated;
‘‘(iii) in the case of an individual described in
subparagraph (B)(iv)(I), the period beginning on the
earlier of (I) the date that the individual receives a
notice of termination, a notice of the issuer’s bank-
ruptcy or insolvency, or other such similar notice, if
any, and (II) the date that the applicable coverage
is terminated, and ending on the date that is 63
days after the date the coverage is terminated;
‘‘(iv) in the case of an individual described in
clause (ii), (iii), (iv)(II), (iv)(III), (v), or (vi) of sub-
paragraph (B) who disenrolls voluntarily, the period
beginning on the date that is 60 days before the ef-
fective date of the disenrollment and ending on the
date that is 63 days after such effective date; and
‘‘(v) in the case of an individual described in
subparagraph (B) but not described in the preceding
provisions of this subparagraph, the period begin-
ning on the effective date of the disenrollment and
252
ending on the date that is 63 days after such effec-
tive date.’’.
(b) EXTENDED MEDIGAP ACCESS FOR INTERRUPTED
TRIAL
PERIODS.—Section 
1882(s)(3) 
(42 
U.S.C.
1395ss(s)(3)), as amended by subsection (a), is further
amended by adding at the end the following new subpara-
graph:
‘‘(F)(i) Subject to clause (ii), for purposes of this
paragraph—
‘‘(I) in the case of an individual described in
subparagraph (B)(v) (or deemed to be so described,
pursuant to this subparagraph) whose enrollment
with an organization or provider described in sub-
clause (II) of such subparagraph is involuntarily ter-
minated within the first 12 months of such enroll-
ment, and who, without an intervening enrollment,
enrolls with another such organization or provider,
such subsequent enrollment shall be deemed to be an
initial enrollment described in such subparagraph;
and
‘‘(II) in the case of an individual described in
clause (vi) of subparagraph (B) (or deemed to be so
described, pursuant to this subparagraph) whose en-
rollment with a plan or in a program described in
such clause is involuntarily terminated within the
253
first 12 months of such enrollment, and who, with-
out an intervening enrollment, enrolls in another
such plan or program, such subsequent enrollment
shall be deemed to be an initial enrollment described
in such clause.
‘‘(ii) For purposes of clauses (v) and (vi) of subpara-
graph (B), no enrollment of an individual with an organi-
zation or provider described in clause (v)(II), or with a
plan or in a program described in clause (vi), may be
deemed to be an initial enrollment under this clause after
the 2-year period beginning on the date on which the indi-
vidual first enrolled with such an organization, provider,
plan, or program.’’.
SEC. 619. RESTORING EFFECTIVE DATE OF ELECTIONS AND
CHANGES 
OF 
ELECTIONS 
OF
MEDICARE+CHOICE PLANS.
(a) OPEN ENROLLMENT.—Section 1851(f)(2) (42
U.S.C. 1395w–21(f)(2)) is amended by striking ‘‘, except
that if such election or change is made after the 10th day
of any calendar month, then the election or change shall
not take effect until the first day of the second calendar
month following the date on which the election or change
is made’’.
254
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to elections and changes of cov-
erage made on or after January 1, 2001.
SEC. 620. PERMITTING ESRD BENEFICIARIES TO ENROLL
IN ANOTHER MEDICARE+CHOICE PLAN IF
THE PLAN IN WHICH THEY ARE ENROLLED IS
TERMINATED.
(a) IN GENERAL.—Section 1851(a)(3)(B) (42 U.S.C.
1395w–21(a)(3)(B)) is amended by striking ‘‘except that’’
and all that follows and inserting the following: ‘‘except
that—
‘‘(i) an individual who develops end-
stage renal disease while enrolled in a
Medicare+Choice plan may continue to be
enrolled in that plan; and
‘‘(ii) in the case of such an individual
who is enrolled in a Medicare+Choice plan
under clause (i) (or subsequently under
this clause), if the enrollment is discon-
tinued under circumstances described in
section 1851(e)(4)(A), then the individual
will be treated as a ‘Medicare+Choice eli-
gible individual’ for purposes of electing to
continue 
enrollment 
in 
another
Medicare+Choice plan.’’.