SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Medicare Improvements for Patients and Providers Act 
of 2008’’. 
(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
TITLE I—MEDICARE 
Subtitle A—Beneficiary Improvements 
PART I—PREVENTION, MENTAL HEALTH, AND MARKETING 
Sec. 101. Improvements to coverage of preventive services. 
Sec. 102. Elimination of discriminatory copayment rates for Medicare out-
patient psychiatric services. 
Sec. 103. Prohibitions and limitations on certain sales and marketing activities 
under Medicare Advantage plans and prescription drug plans. 
Sec. 104. Improvements to the Medigap program. 
PART II—LOW-INCOME PROGRAMS 
Sec. 111. Extension of qualifying individual (QI) program. 
Sec. 112. Application of full LIS subsidy assets test under Medicare Savings 
Program. 
Sec. 113. Eliminating barriers to enrollment. 
Sec. 114. Elimination of Medicare part D late enrollment penalties paid by sub-
sidy eligible individuals. 
Sec. 115. Eliminating application of estate recovery. 
Sec. 116. Exemptions from income and resources for determination of eligibility 
for low-income subsidy. 
Sec. 117. Judicial review of decisions of the Commissioner of Social Security 
under the Medicare part D low-income subsidy program. 
Sec. 118. Translation of model form. 
Sec. 119. Medicare enrollment assistance. 
Subtitle B—Provisions Relating to Part A 
Sec. 121. Expansion and extension of the Medicare Rural Hospital Flexibility 
Program. 
Sec. 122. Rebasing for sole community hospitals. 
Sec. 123. Demonstration project on community health integration models in 
certain rural counties. 
Sec. 124. Extension of the reclassification of certain hospitals. 
Sec. 125. Revocation of unique deeming authority of the Joint Commission. 
Subtitle C—Provisions Relating to Part B 
PART 1—PHYSICIANS’ SERVICES 
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Sec. 131. Physician payment, efficiency, and quality improvements. 
Sec. 132. Incentives for electronic prescribing. 
Sec. 133. Expanding access to primary care services. 
Sec. 134. Extension of floor on Medicare work geographic adjustment under 
the Medicare physician fee schedule. 
Sec. 135. Imaging provisions. 
Sec. 136. Extension of treatment of certain physician pathology services under 
Medicare. 
Sec. 137. Accommodation of physicians ordered to active duty in the Armed 
Services. 
Sec. 138. Adjustment for Medicare mental health services. 
Sec. 139. Improvements for Medicare anesthesia teaching programs. 
PART 2—OTHER PAYMENT AND COVERAGE IMPROVEMENTS 
Sec. 141. Extension of exceptions process for Medicare therapy caps. 
Sec. 142. Extension of payment rule for brachytherapy and therapeutic radio-
pharmaceuticals. 
Sec. 143. Speech-language pathology services. 
Sec. 144. Coverage of pulmonary and cardiac rehabilitation. 
Sec. 145. Clinical laboratory tests. 
Sec. 146. Improved access to ambulance services. 
Sec. 147. Extension and expansion of the Medicare hold harmless provision 
under the prospective payment system for hospital outpatient 
department (HOPD) services for certain hospitals. 
Sec. 148. Clarification of payment for clinical laboratory tests furnished by crit-
ical access hospitals. 
Sec. 149. Adding certain entities as originating sites for payment of telehealth 
services. 
Sec. 150. MedPAC study and report on improving chronic care demonstration 
programs. 
Sec. 151. Increase of FQHC payment limits. 
Sec. 152. Kidney disease education and awareness provisions. 
Sec. 153. Renal dialysis provisions. 
Sec. 154. Delay in and reform of Medicare DMEPOS competitive acquisition 
program. 
Subtitle D—Provisions Relating to Part C 
Sec. 161. Phase-out of indirect medical education (IME). 
Sec. 162. Revisions to requirements for Medicare Advantage private fee-for- 
service plans. 
Sec. 163. Revisions to quality improvement programs. 
Sec. 164. Revisions relating to specialized Medicare Advantage plans for special 
needs individuals. 
Sec. 165. Limitation on out-of-pocket costs for dual eligibles and qualified 
Medicare beneficiaries enrolled in a specialized Medicare Ad-
vantage plan for special needs individuals. 
Sec. 166. Adjustment to the Medicare Advantage stabilization fund. 
Sec. 167. Access to Medicare reasonable cost contract plans. 
Sec. 168. MedPAC study and report on quality measures. 
Sec. 169. MedPAC study and report on Medicare Advantage payments. 
Subtitle E—Provisions Relating to Part D 
PART I—IMPROVING PHARMACY ACCESS 
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Sec. 171. Prompt payment by prescription drug plans and MA–PD plans under 
part D. 
Sec. 172. Regular update of prescription drug pricing standard. 
PART II—OTHER PROVISIONS 
Sec. 175. Inclusion of barbiturates and benzodiazepines as covered part D 
drugs. 
Sec. 176. Formulary requirements with respect to certain categories or classes 
of drugs. 
Subtitle F—Other Provisions 
Sec. 181. Use of part D data. 
Sec. 182. Revision of definition of medically accepted indication for drugs. 
Sec. 183. Contract with a consensus-based entity regarding performance meas-
urement. 
Sec. 184. Cost-sharing for clinical trials. 
Sec. 185. Addressing health care disparities. 
Sec. 186. Demonstration to improve care to previously uninsured. 
Sec. 187. Office of the Inspector General report on compliance with and en-
forcement of national standards on culturally and linguistically 
appropriate services (CLAS) in Medicare. 
Sec. 188. Medicare Improvement Funding. 
Sec. 189. Inclusion of Medicare providers and suppliers in Federal Payment 
Levy and Administrative Offset Program. 
TITLE J—MEDICAID 
Sec. 201. Extension of transitional medical assistance (TMA) and abstinence 
education program. 
Sec. 202. Medicaid DSH extension. 
Sec. 203. Pharmacy reimbursement under Medicaid. 
Sec. 204. Review of administrative claim determinations. 
Sec. 205. County Medicaid health insuring organizations. 
TITLE K—MISCELLANEOUS 
Sec. 301. Extension of TANF supplemental grants. 
Sec. 302. 70 percent federal matching for foster care and adoption assistance 
for the District of Columbia. 
Sec. 303. Extension of Special Diabetes Grant Programs. 
Sec. 304. IOM reports on best practices for conducting systematic reviews of 
clinical effectiveness research and for developing clinical proto-
cols. 
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TITLE I—MEDICARE 
Subtitle A—Beneficiary 
Improvements 
PART I—PREVENTION, MENTAL HEALTH, AND 
MARKETING 
SEC. 101. IMPROVEMENTS TO COVERAGE OF PREVENTIVE 
SERVICES. 
(a) COVERAGE OF ADDITIONAL PREVENTIVE SERV-
ICES.— 
(1) COVERAGE.—Section 1861 of the Social Se-
curity Act (42 U.S.C. 1395x), as amended by section 
114 of the Medicare, Medicaid, and SCHIP Exten-
sion Act of 2007 (Public Law 110–173), is amend-
ed— 
(A) in subsection (s)(2)— 
(i) in subparagraph (Z), by striking 
‘‘and’’ after the semicolon at the end; 
(ii) in subparagraph (AA), by adding 
‘‘and’’ after the semicolon at the end; and 
(iii) by adding at the end the fol-
lowing new subparagraph: 
‘‘(BB) additional preventive services (described 
in subsection (ddd)(1));’’; and 
(B) by adding at the end the following new 
subsection: 
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‘‘Additional Preventive Services 
‘‘(ddd)(1) The term ‘additional preventive services’ 
means services not otherwise described in this title that 
identify medical conditions or risk factors and that the 
Secretary determines are— 
‘‘(A) reasonable and necessary for the preven-
tion or early detection of an illness or disability; 
‘‘(B) recommended with a grade of A or B by 
the United States Preventive Services Task Force; 
and 
‘‘(C) appropriate for individuals entitled to ben-
efits under part A or enrolled under part B. 
‘‘(2) In making determinations under paragraph (1) 
regarding the coverage of a new service, the Secretary 
shall use the process for making national coverage deter-
minations (as defined in section 1869(f)(1)(B)) under this 
title. As part of the use of such process, the Secretary 
may conduct an assessment of the relation between pre-
dicted outcomes and the expenditures for such service and 
may take into account the results of such assessment in 
making such determination.’’. 
(2) PAYMENT
AND
COINSURANCE
FOR
ADDI-
TIONAL PREVENTIVE SERVICES.—Section 1833(a)(1) 
of the Social Security Act (42 U.S.C. 1395l(a)(1)) 
is amended— 
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(bb) by striking ‘‘, and’’ at 
the end and inserting a semi-
colon; 
(II) in subparagraph (B), by 
striking the period at the end and in-
serting a semicolon; and 
(III) by adding at the end the 
following new subparagraph: 
‘‘(C) shall not permit a Medicare Advan-
tage organization (or the agents, brokers, and 
other third parties representing such organiza-
tion) to conduct the prohibited activities de-
scribed in subsection (j)(1); and’’; and 
(ii) by adding at the end the following 
new subsection: 
‘‘(j) PROHIBITED ACTIVITIES DESCRIBED AND LIMI-
TATIONS ON THE CONDUCT OF CERTAIN OTHER ACTIVI-
TIES.— 
‘‘(1) PROHIBITED
ACTIVITIES
DESCRIBED.— 
The following prohibited activities are described in 
this paragraph: 
‘‘(A) UNSOLICITED
MEANS
OF
DIRECT 
CONTACT.—Any unsolicited means of direct 
contact of prospective enrollees, including solic-
iting door-to-door or any outbound tele-
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marketing without the prospective enrollee initi-
ating contact. 
‘‘(B) CROSS-SELLING.—The sale of other 
non-health related products (such as annuities 
and life insurance) during any sales or mar-
keting activity or presentation conducted with 
respect to a Medicare Advantage plan. 
‘‘(C) MEALS.—The provision of meals of 
any sort, regardless of value, to prospective en-
rollees at promotional and sales activities. 
‘‘(D) SALES AND MARKETING IN HEALTH 
CARE
SETTINGS
AND
AT
EDUCATIONAL 
EVENTS.—Sales and marketing activities for 
the enrollment of individuals in Medicare Ad-
vantage plans that are conducted— 
‘‘(i) in health care settings in areas 
where health care is delivered to individ-
uals (such as physician offices and phar-
macies), except in the case where such ac-
tivities are conducted in common areas in 
health care settings; and 
‘‘(ii) at educational events.’’. 
(2) MEDICARE
PRESCRIPTION
DRUG
PRO-
GRAM.—Section 1860D–4 of the Social Security Act 
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(42 U.S.C. 1395w–104) is amended by adding at 
the end the following new subsection: 
‘‘(l) REQUIREMENTS WITH RESPECT TO SALES AND 
MARKETING ACTIVITIES.—The following provisions shall 
apply to a PDP sponsor (and the agents, brokers, and 
other third parties representing such sponsor) in the same 
manner as such provisions apply to a Medicare Advantage 
organization (and the agents, brokers, and other third par-
ties representing such organization): 
‘‘(1) 
The 
prohibition 
under 
section 
1851(h)(4)(C) on conducting activities described in 
section 1851(j)(1).’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to plan years begin-
ning on or after January 1, 2009. 
(b) LIMITATIONS.— 
(1) MEDICARE ADVANTAGE PROGRAM.—Section 
1851 of the Social Security Act (42 U.S.C. 1395w– 
21), as amended by subsection (a)(1), is amended— 
(A) in subsection (h)(4), by adding at the 
end the following new subparagraph: 
‘‘(D) shall only permit a Medicare Advan-
tage organization (and the agents, brokers, and 
other third parties representing such organiza-
tion) to conduct the activities described in sub-
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section (j)(2) in accordance with the limitations 
established under such subsection.’’; and 
(B) in subsection (j), by adding at the end 
the following new paragraph: 
‘‘(2) LIMITATIONS.—The Secretary shall estab-
lish limitations with respect to at least the following: 
‘‘(A) SCOPE
OF
MARKETING
APPOINT-
MENTS.—The scope of any appointment with 
respect to the marketing of a Medicare Advan-
tage plan. Such limitation shall require advance 
agreement with a prospective enrollee on the 
scope of the marketing appointment and docu-
mentation of such agreement by the Medicare 
Advantage organization. In the case where the 
marketing appointment is in person, such docu-
mentation shall be in writing. 
‘‘(B) CO-BRANDING.—The use of the name 
or logo of a co-branded network provider on 
Medicare Advantage plan membership and mar-
keting materials. 
‘‘(C) LIMITATION OF GIFTS TO NOMINAL 
DOLLAR
VALUE.—The offering of gifts and 
other promotional items other than those that 
are of nominal value (as determined by the Sec-
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retary) to prospective enrollees at promotional 
activities. 
‘‘(D) COMPENSATION.—The use of com-
pensation other than as provided under guide-
lines established by the Secretary. Such guide-
lines shall ensure that the use of compensation 
creates incentives for agents and brokers to en-
roll individuals in the Medicare Advantage plan 
that is intended to best meet their health care 
needs. 
‘‘(E) REQUIRED
TRAINING, ANNUAL
RE-
TRAINING, AND TESTING OF AGENTS, BROKERS, 
AND
OTHER
THIRD
PARTIES.—The use by a 
Medicare Advantage organization of any indi-
vidual as an agent, broker, or other third party 
representing the organization that has not com-
pleted an initial training and testing program 
and does not complete an annual retraining and 
testing program.’’. 
(2) MEDICARE
PRESCRIPTION
DRUG
PRO-
GRAM.—Section 1860D–4(l) of the Social Security 
Act, as added by subsection (a)(2), is amended by 
adding at the end the following new paragraph: 
‘‘(2) 
The 
requirement 
under 
section 
1851(h)(4)(D) to conduct activities described in sec-
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tion 1851(j)(2) in accordance with the limitations 
established under such subsection.’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall take effect on a date speci-
fied by the Secretary (but in no case later than No-
vember 15, 2008). 
(c) REQUIRED INCLUSION OF PLAN TYPE IN PLAN 
NAME.— 
(1) MEDICARE ADVANTAGE PROGRAM.—Section 
1851(h) of the Social Security Act (42 U.S.C. 
1395w–21(h)) is amended by adding at the end fol-
lowing new paragraph: 
‘‘(6) REQUIRED INCLUSION OF PLAN TYPE IN 
PLAN NAME.—For plan years beginning on or after 
January 1, 2010, a Medicare Advantage organiza-
tion must ensure that the name of each Medicare 
Advantage plan offered by the Medicare Advantage 
organization includes the plan type of the plan 
(using standard terminology developed by the Sec-
retary).’’. 
(2) 
PRESCRIPTION
DRUG
PLANS.—Section 
1860D–4(l) of the Social Security Act, as added by 
subsection (a)(2) and amended by subsection (b)(2), 
is amended by adding at the end the following new 
paragraph: 
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‘‘(3) The inclusion of the plan type in the plan 
name under section 1851(h)(6).’’. 
(d) STRENGTHENING THE ABILITY OF STATES TO 
ACT IN COLLABORATION WITH THE SECRETARY TO AD-
DRESS FRAUDULENT
OR INAPPROPRIATE MARKETING 
PRACTICES.— 
(1) MEDICARE ADVANTAGE PROGRAM.—Section 
1851(h) of the Social Security Act (42 U.S.C. 
1395w–21(h), as amended by subsection (c)(1), is 
amended by adding at the end the following new 
paragraph: 
‘‘(7) STRENGTHENING THE ABILITY OF STATES 
TO ACT IN COLLABORATION WITH THE SECRETARY 
TO ADDRESS FRAUDULENT OR INAPPROPRIATE MAR-
KETING PRACTICES.— 
‘‘(A) APPOINTMENT OF AGENTS AND BRO-
KERS.—Each Medicare Advantage organization 
shall— 
‘‘(i) only use agents and brokers who 
have been licensed under State law to sell 
Medicare Advantage plans offered by the 
Medicare Advantage organization; 
‘‘(ii) in the case where a State has a 
State appointment law, abide by such law; 
and 
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‘‘(iii) report to the applicable State 
the termination of any such agent or 
broker, including the reasons for such ter-
mination (as required under applicable 
State law). 
‘‘(B) COMPLIANCE WITH STATE INFORMA-
TION
REQUESTS.—Each Medicare Advantage 
organization shall comply in a timely manner 
with any request by a State for information re-
garding the performance of a licensed agent, 
broker, or other third party representing the 
Medicare Advantage organization as part of an 
investigation by the State into the conduct of 
the agent, broker, or other third party.’’. 
(2) 
PRESCRIPTION
DRUG
PLANS.—Section 
1860D–4(l) of the Social Security Act, as amended 
by subsection (c)(2), is amended by adding at the 
end the following new paragraph: 
‘‘(4) The requirements regarding the appoint-
ment of agents and brokers and compliance with 
State information requests under subparagraphs (A) 
and (B), respectively, of section 1851(h)(7).’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to plan years begin-
ning on or after January 1, 2009. 
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SEC. 104. IMPROVEMENTS TO THE MEDIGAP PROGRAM. 
(a) IMPLEMENTATION
OF
NAIC RECOMMENDA-
TIONS.— 
(1) IN GENERAL.—The Secretary of Health and 
Human Services (in this section referred to as the 
‘‘Secretary’’) shall provide for implementation of the 
changes in the NAIC model law and regulations ap-
proved by the National Association of Insurance 
Commissioners in its Model #651 (‘‘Model Regula-
tion to Implement the NAIC Medicare Supplement 
Insurance Minimum Standards Model Act’’) on 
March 11, 2007, as modified to reflect the changes 
made under this Act and the Genetic Information 
Nondiscrimination Act of 2008 (Public Law 110– 
233). 
(2) IMPLEMENTATION DATES.— 
(A) IN
GENERAL.—The modifications to 
Model #651 required under paragraph (1) shall 
be completed by the National Association of In-
surance Commissioners not later than October 
31, 2008. Except as provided in subparagraph 
(B), each State shall have 1 year from the date 
the National Association of Insurance Commis-
sioners adopts the revised NAIC model law and 
regulations (as changed by Model #651, as so 
modified) to conform the regulatory program 
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established by the State to such revised NAIC 
model law and regulations. 
(B) EXTENSION OF EFFECTIVE DATE FOR 
STATE
LAW
AMENDMENT.—In the case of a 
State which the Secretary determines requires 
State legislation in order to conform the regu-
latory program established by the State to such 
revised NAIC model law and regulations, the 
State shall not be regarded as failing to comply 
with the requirements of this section solely on 
the basis of its failure to meet such require-
ments before the first day of the first calendar 
quarter beginning after the close of the first 
regular session of the State legislature that be-
gins after the date of the enactment of this Act. 
For purposes of the previous sentence, in the 
case of a State that has a 2-year legislative ses-
sion, each year of the session is considered to 
be a separate regular session of the State legis-
lature. 
(C) TRANSITION DATES.—No carrier may 
issue a new or revised Medicare supplemental 
policy or certificate under section 1882 of the 
Social Security Act (42 U.S.C. 1395ss) that 
meets the requirements of such revised NAIC 
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model law and regulations for coverage effective 
prior to June 1, 2010. A carrier may continue 
to offer or issue a Medicare supplemental policy 
under such section that meets the requirements 
of the NAIC model law and regulations and 
State law (as in effect prior to the adoption of 
such revised NAIC model law and regulations) 
prior to June 1, 2010. Nothing shall preclude 
carriers from marketing new or revised Medi-
care supplemental policies or certificates that 
meet the requirements of such revised NAIC 
model law and regulations on or after the date 
on which the State conforms the regulatory pro-
gram established by the State to such revised 
NAIC model law and regulations. 
(b) REQUIRED OFFERING OF A RANGE OF POLI-
CIES.—Section 1882(o) of the Social Security Act (42 
U.S.C. 1395s(o)), as amended by section 104(b)(3) of the 
Genetic Information Nondiscrimination Act of 2008 (Pub-
lic Law 110–233), is amended by adding at the end the 
following new paragraph: 
‘‘(5) In addition to the requirement under para-
graph (2), the issuer of the policy must make avail-
able to the individual at least Medicare supplemental 
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policies with benefit packages classified as ‘C’ or 
‘F’.’’. 
(c) CLARIFICATION.—Any health insurance policy 
that provides reimbursement for expenses incurred for 
items and services for which payment may be made under 
title XVIII of the Social Security Act but which are not 
reimbursable by reason of the applicability of deductibles, 
coinsurance, copayments or other limitations imposed by 
a Medicare Advantage plan (including a Medicare Advan-
tage private fee-for-service plan) under part C of such title 
shall comply with the requirements of section 1882(o) of 
the such Act (42 U.S.C. 1395ss(o)). 
PART II—LOW-INCOME PROGRAMS 
SEC. 111. EXTENSION OF QUALIFYING INDIVIDUAL (QI) 
PROGRAM. 
(a) EXTENSION.—Section 1902(a)(10)(E)(iv) of the 
Social Security Act (42 U.S.C. 1396a(a)(10)(E)(iv)) is 
amended by striking ‘‘June 2008’’ and inserting ‘‘Decem-
ber 2009’’. 
(b) EXTENDING TOTAL AMOUNT AVAILABLE FOR 
ALLOCATION.—Section 1933(g) of such Act (42 U.S.C. 
1396u–3(g)) is amended— 
(1) in paragraph (2)— 
(A) by striking ‘‘and’’ at the end of sub-
paragraph (H); 
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(B) in subparagraph (I)— 
(i) by striking ‘‘June 30’’ and insert-
ing ‘‘September 30’’; 
(ii) by striking ‘‘$200,000,000’’ and 
inserting ‘‘$300,000,000’’; and 
(iii) by striking the period at the end 
and inserting a semicolon; and 
(C) by adding at the end the following new 
subparagraphs: 
‘‘(J) for the period that begins on October 
1, 2008, and ends on December 31, 2008, the 
total allocation amount is $100,000,000; 
‘‘(K) for the period that begins on January 
1, 2009, and ends on September 30, 2009, the 
total allocation amount is $350,000,000; and 
‘‘(L) for the period that begins on October 
1, 2009, and ends on December 31, 2009, the 
total allocation amount is $150,000,000.’’; and 
(2) in paragraph (3), in the matter preceding 
subparagraph (A), by striking ‘‘or (H)’’ and insert-
ing ‘‘(H), (J), or (L)’’. 
SEC. 112. APPLICATION OF FULL LIS SUBSIDY ASSETS TEST 
UNDER MEDICARE SAVINGS PROGRAM. 
Section 1905(p)(1)(C) of such Act (42 U.S.C. 
1396d(p)(1)(C)) is amended by inserting before the period 
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at the end the following: ‘‘or, effective beginning with Jan-
uary 1, 2010, whose resources (as so determined) do not 
exceed the maximum resource level applied for the year 
under subparagraph (D) of section 1860D–14(a)(3) (de-
termined without regard to the life insurance policy exclu-
sion provided under subparagraph (G) of such section) ap-
plicable to an individual or to the individual and the indi-
vidual’s spouse (as the case may be)’’. 
SEC. 113. ELIMINATING BARRIERS TO ENROLLMENT. 
(a) SSA ASSISTANCE WITH MEDICARE SAVINGS 
PROGRAM AND LOW-INCOME SUBSIDY PROGRAM APPLI-
CATIONS.—Section 1144 of such Act (42 U.S.C. 1320b– 
14) is amended by adding at the end the following new 
subsection: 
‘‘(c) ASSISTANCE WITH MEDICARE SAVINGS PRO-
GRAM AND LOW-INCOME SUBSIDY PROGRAM APPLICA-
TIONS.— 
‘‘(1) DISTRIBUTION OF APPLICATIONS AND IN-
FORMATION
TO
INDIVIDUALS
WHO
ARE
POTEN-
TIALLY ELIGIBLE FOR LOW-INCOME SUBSIDY PRO-
GRAM.—For each individual who submits an applica-
tion for low-income subsidies under section 1860D– 
14, requests an application for such subsidies, or is 
otherwise identified as an individual who is poten-
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tially eligible for such subsidies, the Commissioner 
shall do the following: 
‘‘(A) Provide information describing the 
low-income subsidy program under section 
1860D–14 and the Medicare Savings Program 
(as defined in paragraph (7)). 
‘‘(B) Provide an application for enrollment 
under such low-income subsidy program (if not 
already received by the Commissioner). 
‘‘(C) In accordance with paragraph (3), 
transmit data from such an application for pur-
poses of initiating an application for benefits 
under the Medicare Savings Program. 
‘‘(D) Provide information on how the indi-
vidual may obtain assistance in completing such 
application and an application under the Medi-
care Savings Program, including information on 
how the individual may contact the State health 
insurance assistance program (SHIP). 
‘‘(E) Make the application described in 
subparagraph (B) and the information de-
scribed in subparagraphs (A) and (D) available 
at local offices of the Social Security Adminis-
tration. 
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‘‘(2) TRAINING
PERSONNEL
IN
EXPLAINING 
BENEFIT PROGRAMS AND ASSISTING IN COMPLETING 
LIS APPLICATION.—The Commissioner shall provide 
training to those employees of the Social Security 
Administration who are involved in receiving applica-
tions for benefits described in paragraph (1)(B) in 
order that they may promote beneficiary under-
standing of the low-income subsidy program and the 
Medicare Savings Program in order to increase par-
ticipation in these programs. Such employees shall 
provide assistance in completing an application de-
scribed in paragraph (1)(B) upon request. 
‘‘(3) TRANSMITTAL OF DATA TO STATES.—Be-
ginning on January 1, 2010, with the consent of an 
individual completing an application for benefits de-
scribed in paragraph (1)(B), the Commissioner shall 
electronically transmit to the appropriate State Med-
icaid agency data from such application, as deter-
mined by the Commissioner, which transmittal shall 
initiate an application of the individual for benefits 
under the Medicare Savings Program with the State 
Medicaid agency. In order to ensure that such data 
transmittal provides effective assistance for purposes 
of State adjudication of applications for benefits 
under the Medicare Savings Program, the Commis-
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sioner shall consult with the Secretary, after the 
Secretary has consulted with the States, regarding 
the content, form, frequency, and manner in which 
data (on a uniform basis for all States) shall be 
transmitted under this subparagraph. 
‘‘(4) COORDINATION
WITH
OUTREACH.—The 
Commissioner shall coordinate outreach activities 
under this subsection in connection with the low-in-
come subsidy program and the Medicare Savings 
Program. 
‘‘(5) REIMBURSEMENT
OF
SOCIAL
SECURITY 
ADMINISTRATION ADMINISTRATIVE COSTS.— 
‘‘(A) INITIAL
MEDICARE
SAVINGS
PRO-
GRAM
COSTS; ADDITIONAL
LOW-INCOME
SUB-
SIDY COSTS.— 
‘‘(i) INITIAL MEDICARE SAVINGS PRO-
GRAM
COSTS.—There are hereby appro-
priated to the Commissioner to carry out 
this subsection, out of any funds in the 
Treasury 
not 
otherwise 
appropriated, 
$24,100,000. The amount appropriated 
under ths clause shall be available on Octo-
ber 1, 2008, and shall remain available 
until expended. 
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‘‘(ii) ADDITIONAL AMOUNT FOR LOW- 
INCOME SUBSIDY ACTIVITIES.—There are 
hereby appropriated to the Commissioner, 
out of any funds in the Treasury not oth-
erwise appropriated, $24,800,000 for fiscal 
year 2009 to carry out low-income subsidy 
activities under section 1860D–14 and the 
Medicare Savings Program (in accordance 
with this subsection), to remain available 
until expended. Such funds shall be in ad-
dition to the Social Security Administra-
tion’s Limitation on Administrative Ex-
penditure appropriations for such fiscal 
year. 
‘‘(B) 
SUBSEQUENT
FUNDING
UNDER 
AGREEMENTS.— 
‘‘(i) IN GENERAL.—Effective for fiscal 
years beginning on or after October 1, 
2010, the Commissioner and the Secretary 
shall enter into an agreement which shall 
provide funding to cover the administrative 
costs of the Commissioner’s activities 
under this subsection. Such agreement 
shall— 
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‘‘(I) provide funds to the Com-
missioner for the full cost of the So-
cial Security Administration’s work 
related to the Medicare Savings Pro-
gram required under this section; 
‘‘(II) provide such funding quar-
terly in advance of the applicable 
quarter based on estimating method-
ology agreed to by the Commissioner 
and the Secretary; and 
‘‘(III) require an annual account-
ing and reconciliation of the actual 
costs incurred and funds provided 
under this subsection. 
‘‘(ii) 
APPROPRIATION.—There 
are 
hereby appropriated to the Secretary solely 
for the purpose of providing payments to 
the Commissioner pursuant to an agree-
ment specified in clause (i) that is in ef-
fect, out of any funds in the Treasury not 
otherwise appropriated, not more than 
$3,000,000 for fiscal year 2011 and each 
fiscal year thereafter. 
‘‘(C) LIMITATION.—In no case shall funds 
from the Social Security Administration’s Limi-
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tation on Administrative Expenses be used to 
carry out activities related to the Medicare Sav-
ings Program. For fiscal years beginning on or 
after October 1, 2010, no such activities shall 
be undertaken by the Social Security Adminis-
tration unless the agreement specified in sub-
paragraph (B) is in effect and full funding has 
been provided to the Commissioner as specified 
in such subparagraph. 
‘‘(6) GAO ANALYSIS AND REPORT.— 
‘‘(A) ANALYSIS.—The Comptroller General 
of the United States shall prepare an analysis 
of the impact of this subsection— 
‘‘(i) in increasing participation in the 
Medicare Savings Program, and 
‘‘(ii) on States and the Social Security 
Administration. 
‘‘(B) REPORT.—Not later than January 1, 
2012, the Comptroller General shall submit to 
Congress, the Commissioner, and the Secretary 
a report on the analysis conducted under sub-
paragraph (A). 
‘‘(7) MEDICARE SAVINGS PROGRAM DEFINED.— 
For purposes of this subsection, the term ‘Medicare 
Savings Program’ means the program of medical as-
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sistance for payment of the cost of Medicare cost- 
sharing under the Medicaid program pursuant to 
sections 1902(a)(10)(E) and 1933.’’. 
(b) MEDICAID AGENCY CONSIDERATION OF DATA 
TRANSMITTAL.— 
(1) IN GENERAL.—Section 1935(a) of such Act 
(42 U.S.C. 1396u–5(a)) is amended by adding at 
the end the following new paragraph: 
‘‘(4) CONSIDERATION OF DATA TRANSMITTED 
BY
THE
SOCIAL
SECURITY
ADMINISTRATION
FOR 
PURPOSES OF MEDICARE SAVINGS PROGRAM.—The 
State shall accept data transmitted under section 
1144(c)(3) and act on such data in the same man-
ner and in accordance with the same deadlines as if 
the data constituted an initiation of an application 
for benefits under the Medicare Savings Program 
(as defined for purposes of such section) that had 
been submitted directly by the applicant. The date 
of the individual’s application for the low income 
subsidy program from which the data have been de-
rived shall constitute the date of filing of such appli-
cation for benefits under the Medicare Savings Pro-
gram.’’. 
(2) 
CONFORMING
AMENDMENTS.—Section 
1935(a) of such Act (42 U.S.C. 1396u–5(a)) is 
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amended in the subsection heading by striking 
‘‘AND’’ and by inserting ‘‘, AND MEDICARE COST- 
SHARING’’ after ‘‘ASSISTANCE’’. 
(c) EFFECTIVE DATE.—Except as otherwise pro-
vided, the amendments made by this section shall take ef-
fect on January 1, 2010. 
SEC. 114. ELIMINATION OF MEDICARE PART D LATE EN-
ROLLMENT PENALTIES PAID BY SUBSIDY ELI-
GIBLE INDIVIDUALS. 
(a) WAIVER OF LATE ENROLLMENT PENALTY.— 
(1) IN GENERAL.—Section 1860D–13(b) of the 
Social Security Act (42 U.S.C. 1395w–113(b)) is 
amended by adding at the end the following new 
paragraph: 
‘‘(8) WAIVER OF PENALTY FOR SUBSIDY-ELIGI-
BLE INDIVIDUALS.—In no case shall a part D eligi-
ble individual who is determined to be a subsidy eli-
gible individual (as defined in section 1860D– 
14(a)(3)) be subject to an increase in the monthly 
beneficiary premium established under subsection 
(a).’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
1860D–14(a)(1)(A) of the Social Security Act (42 
U.S.C. 1395w–114(a)(1)(A)) is amended by striking 
‘‘equal to’’ and all that follows through the period 
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and inserting ‘‘equal to 100 percent of the amount 
described in subsection (b)(1), but not to exceed the 
premium amount specified in subsection (b)(2)(B).’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to subsidies for months beginning 
with January 2009. 
SEC. 115. ELIMINATING APPLICATION OF ESTATE RECOV-
ERY. 
(a) IN GENERAL.—Section 1917(b)(1)(B)(ii) of the 
Social Security Act (42 U.S.C. 1396p(b)(1)(B)(ii)) is 
amended by inserting ‘‘(but not including medical assist-
ance for Medicare cost-sharing or for benefits described 
in section 1902(a)(10)(E))’’ before the period at the end. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect as of January 1, 2010. 
SEC. 116. EXEMPTIONS FROM INCOME AND RESOURCES 
FOR DETERMINATION OF ELIGIBILITY FOR 
LOW-INCOME SUBSIDY. 
(a) IN GENERAL.—Section 1860D–14(a)(3) of the 
Social Security Act (42 U.S.C. 1395w–114(a)(3)) is 
amended— 
(1) in subparagraph (C)(i), by inserting ‘‘and 
except that support and maintenance furnished in 
kind shall not be counted as income’’ after ‘‘section 
1902(r)(2)’’; 
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(2) in subparagraph (D), in the matter before 
clause (i), by inserting ‘‘subject to the life insurance 
policy exclusion provided under subparagraph (G)’’ 
before ‘‘)’’; 
(3) in subparagraph (E)(i), in the matter before 
subclause (I), by inserting ‘‘subject to the life insur-
ance policy exclusion provided under subparagraph 
(G)’’ before ‘‘)’’; and 
(4) by adding at the end the following new sub-
paragraph: 
‘‘(G) LIFE
INSURANCE
POLICY
EXCLU-
SION.—In determining the resources of an indi-
vidual (and the eligible spouse of the individual, 
if any) under section 1613 for purposes of sub-
paragraphs (D) and (E) no part of the value of 
any life insurance policy shall be taken into ac-
count.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall take effect with respect to applications 
filed on or after January 1, 2010. 
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SEC. 117. JUDICIAL REVIEW OF DECISIONS OF THE COM-
MISSIONER OF SOCIAL SECURITY UNDER 
THE MEDICARE PART D LOW-INCOME SUB-
SIDY PROGRAM. 
(a) IN GENERAL.—Section 1860D–14(a)(3)(B)(iv) of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1395w– 
114(a)(3)(B)(iv)) is amended— 
(1) in subclause (I), by striking ‘‘and’’ at the 
end; 
(2) in subclause (II), by striking the period at 
the end and inserting ‘‘; and’’; and 
(3) by adding at the end the following new sub-
clause: 
‘‘(III) judicial review of the final 
decision of the Commissioner made 
after a hearing shall be available to 
the same extent, and with the same 
limitations, as provided in subsections 
(g) and (h) of section 205.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall take effect as if included in the enact-
ment of section 101 of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003. 
SEC. 118. TRANSLATION OF MODEL FORM. 
(a) IN GENERAL.—Section 1905(p)(5)(A) of the So-
cial Security Act (42 U.S.C. 1396d(p)(5)(A)) is amended 
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by adding at the end the following: ‘‘The Secretary shall 
provide for the translation of such application form into 
at least the 10 languages (other than English) that are 
most often used by individuals applying for hospital insur-
ance benefits under section 226 or 226A and shall make 
the translated forms available to the States and to the 
Commissioner of Social Security.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect on January 1, 2010. 
SEC. 119. MEDICARE ENROLLMENT ASSISTANCE. 
(a) ADDITIONAL FUNDING FOR STATE HEALTH IN-
SURANCE ASSISTANCE PROGRAMS.— 
(1) GRANTS.— 
(A) 
IN
GENERAL.—The 
Secretary 
of 
Health and Human Services (in this section re-
ferred to as the ‘‘Secretary’’) shall use amounts 
made available under subparagraph (B) to 
make grants to States for State health insur-
ance assistance programs receiving assistance 
under section 4360 of the Omnibus Budget 
Reconciliation Act of 1990. 
(B) FUNDING.—For purposes of making 
grants under this subsection, the Secretary 
shall provide for the transfer, from the Federal 
Hospital Insurance Trust Fund under section 
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1817 of the Social Security Act (42 U.S.C. 
1395i) and the Federal Supplementary Medical 
Insurance Trust Fund under section 1841 of 
such Act (42 U.S.C. 1395t), in the same pro-
portion as the Secretary determines under sec-
tion 1853(f) of such Act (42 U.S.C. 1395w– 
23(f)), of $7,500,000 to the Centers for Medi-
care & Medicaid Services Program Management 
Account for fiscal year 2009, to remain avail-
able until expended. 
(2) AMOUNT OF GRANTS.—The amount of a 
grant to a State under this subsection from the total 
amount made available under paragraph (1) shall be 
equal to the sum of the amount allocated to the 
State under paragraph (3)(A) and the amount allo-
cated to the State under subparagraph (3)(B). 
(3) ALLOCATION TO STATES.— 
(A) ALLOCATION BASED ON PERCENTAGE 
OF LOW-INCOME BENEFICIARIES.—The amount 
allocated to a State under this subparagraph 
from 2⁄3 of the total amount made available 
under paragraph (1) shall be based on the num-
ber of individuals who meet the requirement 
under 
subsection 
(a)(3)(A)(ii) 
of 
section 
1860D–14 of the Social Security Act (42 
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U.S.C. 1395w–114) but who have not enrolled 
to receive a subsidy under such section 1860D– 
14 relative to the total number of individuals 
who meet the requirement under such sub-
section (a)(3)(A)(ii) in each State, as estimated 
by the Secretary. 
(B) ALLOCATION BASED ON PERCENTAGE 
OF RURAL BENEFICIARIES.—The amount allo-
cated to a State under this subparagraph from 
1⁄3 of the total amount made available under 
paragraph (1) shall be based on the number of 
part D eligible individuals (as defined in section 
1860D–1(a)(3)(A) of such Act (42 U.S.C. 
1395w–101(a)(3)(A))) residing in a rural area 
relative to the total number of such individuals 
in each State, as estimated by the Secretary. 
(4) PORTION OF GRANT BASED ON PERCENT-
AGE OF LOW-INCOME BENEFICIARIES TO BE USED 
TO PROVIDE OUTREACH TO INDIVIDUALS WHO MAY 
BE
SUBSIDY
ELIGIBLE
INDIVIDUALS
OR
ELIGIBLE 
FOR
THE
MEDICARE
SAVINGS
PROGRAM.—Each 
grant awarded under this subsection with respect to 
amounts allocated under paragraph (3)(A) shall be 
used to provide outreach to individuals who may be 
subsidy eligible individuals (as defined in section 
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1860D–14(a)(3)(A) of the Social Security Act (42 
U.S.C. 1395w–114(a)(3)(A)) or eligible for the 
Medicare Savings Program (as defined in subsection 
(f)). 
(b) ADDITIONAL FUNDING FOR AREA AGENCIES ON 
AGING.— 
(1) GRANTS.— 
(A) IN GENERAL.—The Secretary, acting 
through the Assistant Secretary for Aging, shall 
make grants to States for area agencies on 
aging (as defined in section 102 of the Older 
Americans Act of 1965 (42 U.S.C. 3002)) and 
Native American programs carried out under 
the Older Americans Act of 1965 (42 U.S.C. 
3001 et seq.). 
(B) FUNDING.—For purposes of making 
grants under this subsection, the Secretary 
shall provide for the transfer, from the Federal 
Hospital Insurance Trust Fund under section 
1817 of the Social Security Act (42 U.S.C. 
1395i) and the Federal Supplementary Medical 
Insurance Trust Fund under section 1841 of 
such Act (42 U.S.C. 1395t), in the same pro-
portion as the Secretary determines under sec-
tion 1853(f) of such Act (42 U.S.C. 1395w– 
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23(f)), of $7,500,000 to the Administration on 
Aging for fiscal year 2009, to remain available 
until expended. 
(2) AMOUNT OF GRANT AND ALLOCATION TO 
STATES
BASED
ON
PERCENTAGE
OF
LOW-INCOME 
AND
RURAL
BENEFICIARIES.—The amount of a 
grant to a State under this subsection from the total 
amount made available under paragraph (1) shall be 
determined in the same manner as the amount of a 
grant to a State under subsection (a), from the total 
amount made available under paragraph (1) of such 
subsection, is determined under paragraph (2) and 
subparagraphs (A) and (B) of paragraph (3) of such 
subsection. 
(3) REQUIRED USE OF FUNDS.— 
(A) ALL FUNDS.—Subject to subparagraph 
(B), each grant awarded under this subsection 
shall be used to provide outreach to eligible 
Medicare beneficiaries regarding the benefits 
available under title XVIII of the Social Secu-
rity Act. 
(B) OUTREACH TO INDIVIDUALS WHO MAY 
BE SUBSIDY ELIGIBLE INDIVIDUALS OR ELIGI-
BLE FOR THE MEDICARE SAVINGS PROGRAM.— 
Subsection (a)(4) shall apply to each grant 
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awarded under this subsection in the same 
manner as it applies to a grant under sub-
section (a). 
(c) ADDITIONAL FUNDING
FOR AGING
AND DIS-
ABILITY RESOURCE CENTERS.— 
(1) GRANTS.— 
(A) IN
GENERAL.—The Secretary shall 
make grants to Aging and Disability Resource 
Centers under the Aging and Disability Re-
source Center grant program that are estab-
lished centers under such program on the date 
of the enactment of this Act. 
(B) FUNDING.—For purposes of making 
grants under this subsection, the Secretary 
shall provide for the transfer, from the Federal 
Hospital Insurance Trust Fund under section 
1817 of the Social Security Act (42 U.S.C. 
1395i) and the Federal Supplementary Medical 
Insurance Trust Fund under section 1841 of 
such Act (42 U.S.C. 1395t), in the same pro-
portion as the Secretary determines under sec-
tion 1853(f) of such Act (42 U.S.C. 1395w– 
23(f)), of $5,000,000 to the Administration on 
Aging for fiscal year 2009, to remain available 
until expended. 
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(2) REQUIRED
USE
OF
FUNDS.—Each grant 
awarded under this subsection shall be used to pro-
vide outreach to individuals regarding the benefits 
available under the Medicare prescription drug ben-
efit under part D of title XVIII of the Social Secu-
rity Act and under the Medicare Savings Program. 
(d) COORDINATION OF EFFORTS TO INFORM OLDER 
AMERICANS ABOUT BENEFITS AVAILABLE UNDER FED-
ERAL AND STATE PROGRAMS.— 
(1) 
IN
GENERAL.—The 
Secretary, 
acting 
through the Assistant Secretary for Aging, in co-
operation with related Federal agency partners, shall 
make a grant to, or enter into a contract with, a 
qualified, experienced entity under which the entity 
shall— 
(A) maintain and update web-based deci-
sion support tools, and integrated, person-cen-
tered systems, designed to inform older individ-
uals (as defined in section 102 of the Older 
Americans Act of 1965 (42 U.S.C. 3002)) 
about the full range of benefits for which the 
individuals may be eligible under Federal and 
State programs; 
(B) utilize cost-effective strategies to find 
older individuals with the greatest economic 
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need (as defined in such section 102) and in-
form the individuals of the programs; 
(C) develop and maintain an information 
clearinghouse on best practices and the most 
cost-effective methods for finding older individ-
uals with greatest economic need and informing 
the individuals of the programs; and 
(D) provide, in collaboration with related 
Federal agency partners administering the Fed-
eral programs, training and technical assistance 
on the most effective outreach, screening, and 
follow-up strategies for the Federal and State 
programs. 
(2) FUNDING.—For purposes of making a 
grant or entering into a contract under paragraph 
(1), the Secretary shall provide for the transfer, 
from the Federal Hospital Insurance Trust Fund 
under section 1817 of the Social Security Act (42 
U.S.C. 1395i) and the Federal Supplementary Med-
ical Insurance Trust Fund under section 1841 of 
such Act (42 U.S.C. 1395t), in the same proportion 
as the Secretary determines under section 1853(f) of 
such Act (42 U.S.C. 1395w–23(f)), of $5,000,000 to 
the Administration on Aging for fiscal year 2009, to 
remain available until expended. 
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(e) REPROGRAMMING
FUNDS
FROM
MEDICARE, 
MEDICAID, AND SCHIP EXTENSION ACT OF 2007.—The 
Secretary shall only use the $5,000,000 in funds allocated 
to make grants to States for Area Agencies on Aging and 
Aging Disability and Resource Centers for the period of 
fiscal years 2008 through 2009 under section 118 of the 
Medicare, Medicaid, and SCHIP Extension Act of 2007 
(Public Law 110–173) for the sole purpose of providing 
outreach to individuals regarding the benefits available 
under the Medicare prescription drug benefit under part 
D of title XVIII of the Social Security Act. The Secretary 
shall republish the request for proposals issued on April 
17, 2008, in order to comply with the preceding sentence. 
(f) MEDICARE SAVINGS PROGRAM DEFINED.—For 
purposes of this section, the term ‘‘Medicare Savings Pro-
gram’’ means the program of medical assistance for pay-
ment of the cost of Medicare cost-sharing under the Med-
icaid program pursuant to sections 1902(a)(10)(E) and 
1933 
of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1396a(a)(10)(E), 1396u–3). 
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Subtitle B—Provisions Relating to 
Part A 
SEC. 121. EXPANSION AND EXTENSION OF THE MEDICARE 
RURAL HOSPITAL FLEXIBILITY PROGRAM. 
(a) IN GENERAL.—Section 1820(g) of the Social Se-
curity Act (42 U.S.C. 1395i–4(g)) is amended by adding 
at the end the following new paragraph: 
‘‘(6) PROVIDING
MENTAL
HEALTH
SERVICES 
AND OTHER HEALTH SERVICES TO VETERANS AND 
OTHER RESIDENTS OF RURAL AREAS.— 
‘‘(A) GRANTS TO STATES.—The Secretary 
may award grants to States that have sub-
mitted applications in accordance with subpara-
graph (B) for increasing the delivery of mental 
health services or other health care services 
deemed necessary to meet the needs of veterans 
of Operation Iraqi Freedom and Operation En-
during Freedom living in rural areas (as de-
fined for purposes of section 1886(d) and in-
cluding areas that are rural census tracks, as 
defined by the Administrator of the Health Re-
sources and Services Administration), including 
for the provision of crisis intervention services 
and the detection of post-traumatic stress dis-
order, traumatic brain injury, and other signa-
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ture injuries of veterans of Operation Iraqi 
Freedom and Operation Enduring Freedom, 
and for referral of such veterans to medical fa-
cilities operated by the Department of Veterans 
Affairs, and for the delivery of such services to 
other residents of such rural areas. 
‘‘(B) APPLICATION.— 
‘‘(i) IN GENERAL.—An application is 
in accordance with this subparagraph if 
the State submits to the Secretary at such 
time and in such form as the Secretary 
may require an application containing the 
assurances described in subparagraphs 
(A)(ii) and (A)(iii) of subsection (b)(1). 
‘‘(ii) CONSIDERATION
OF
REGIONAL 
APPROACHES, 
NETWORKS, 
OR
TECH-
NOLOGY.—The Secretary may, as appro-
priate in awarding grants to States under 
subparagraph (A), consider whether the 
application submitted by a State under 
this subparagraph includes 1 or more pro-
posals that utilize regional approaches, 
networks, health information technology, 
telehealth, or telemedicine to deliver serv-
ices described in subparagraph (A) to indi-
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viduals described in that subparagraph. 
For purposes of this clause, a network 
may, as the Secretary determines appro-
priate, include federally qualified health 
centers (as defined in section 1861(aa)(4)), 
rural health clinics (as defined in section 
1861(aa)(2)), home health agencies (as de-
fined in section 1861(o)), community men-
tal health centers (as defined in section 
1861(ff)(3)(B)) and other providers of 
mental health services, pharmacists, local 
government, and other providers deemed 
necessary to meet the needs of veterans. 
‘‘(iii) 
COORDINATION
AT
LOCAL 
LEVEL.—The Secretary shall require, as 
appropriate, a State to demonstrate con-
sultation with the hospital association of 
such State, rural hospitals located in such 
State, providers of mental health services, 
or other appropriate stakeholders for the 
provision of services under a grant award-
ed under this paragraph. 
‘‘(iv) SPECIAL
CONSIDERATION
OF 
CERTAIN
APPLICATIONS.—In 
awarding 
grants to States under subparagraph (A), 
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the Secretary shall give special consider-
ation to applications submitted by States 
in which veterans make up a high percent-
age (as determined by the Secretary) of 
the total population of the State. Such 
consideration shall be given without regard 
to the number of veterans of Operation 
Iraqi Freedom and Operation Enduring 
Freedom living in the areas in which men-
tal health services and other health care 
services would be delivered under the appli-
cation. 
‘‘(C) COORDINATION WITH VA.—The Sec-
retary shall, as appropriate, consult with the 
Director of the Office of Rural Health of the 
Department of Veterans Affairs in awarding 
and administering grants to States under sub-
paragraph (A). 
‘‘(D) USE OF FUNDS.—A State awarded a 
grant under this paragraph may, as appro-
priate, use the funds to reimburse providers of 
services described in subparagraph (A) to indi-
viduals described in that subparagraph. 
‘‘(E) LIMITATION
ON
USE
OF
GRANT 
FUNDS
FOR
ADMINISTRATIVE
EXPENSES.—A 
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State awarded a grant under this paragraph 
may not expend more than 15 percent of the 
amount of the grant for administrative ex-
penses. 
‘‘(F) INDEPENDENT
EVALUATION
AND 
FINAL
REPORT.—The Secretary shall provide 
for an independent evaluation of the grants 
awarded under subparagraph (A). Not later 
than 1 year after the date on which the last 
grant is awarded to a State under such sub-
paragraph, the Secretary shall submit a report 
to Congress on such evaluation. Such report 
shall include an assessment of the impact of 
such grants on increasing the delivery of mental 
health services and other health services to vet-
erans of the United States Armed Forces living 
in rural areas (as so defined and including such 
areas that are rural census tracks), with par-
ticular emphasis on the impact of such grants 
on the delivery of such services to veterans of 
Operation Enduring Freedom and Operation 
Iraqi Freedom, and to other individuals living 
in such rural areas.’’. 
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(b) USE OF FUNDS FOR FEDERAL ADMINISTRATIVE 
EXPENSES.—Section 1820(g)(5) of the Social Security 
Act (42 U.S.C. 1395i–4(g)(5)) is amended— 
(1) by striking ‘‘beginning with fiscal year 
2005’’ and inserting ‘‘for each of fiscal years 2005 
through 2008’’; and 
(2) by inserting ‘‘and, of the total amount ap-
propriated for grants under paragraphs (1), (2), and 
(6) for a fiscal year (beginning with fiscal year 
2009)’’ after ‘‘2005)’’. 
(c) EXTENSION
OF AUTHORIZATION
FOR FLEX 
GRANTS.—Section 1820(j) of the Social Security Act (42 
U.S.C. 1395i–4(j)) is amended— 
(1) by striking ‘‘and for’’ and inserting ‘‘for’’; 
and 
(2) by inserting ‘‘, for making grants to all 
States under paragraphs (1) and (2) of subsection 
(g), $55,000,000 in each of fiscal years 2009 and 
2010, and for making grants to all States under 
paragraph (6) of subsection (g), $50,000,000 in 
each of fiscal years 2009 and 2010, to remain avail-
able until expended’’ before the period at the end. 
(d) MEDICARE RURAL HOSPITAL FLEXIBILITY PRO-
GRAM.—Section 1820(g)(1) of the Social Security Act (42 
U.S.C. 1395i–4(g)(1)) is amended— 
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(1) in subparagraph (B), by striking ‘‘and’’ at 
the end; 
(2) in subparagraph (C), by striking the period 
at the end and inserting ‘‘; and’’; and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(D) providing support for critical access 
hospitals for quality improvement, quality re-
porting, 
performance 
improvements, 
and 
benchmarking.’’. 
(e) ASSISTANCE TO SMALL CRITICAL ACCESS HOS-
PITALS TRANSITIONING TO SKILLED NURSING FACILI-
TIES
AND
ASSISTED
LIVING
FACILITIES.—Section 
1820(g) of the Social Security Act (42 U.S.C. 1395i– 
4(g)), as amended by subsection (a), is amended by adding 
at the end the following new paragraph: 
‘‘(7) 
CRITICAL
ACCESS
HOSPITALS 
TRANSITIONING
TO
SKILLED
NURSING
FACILITIES 
AND ASSISTED LIVING FACILITIES.— 
‘‘(A) GRANTS.—The Secretary may award 
grants to eligible critical access hospitals that 
have submitted applications in accordance with 
subparagraph (B) for assisting such hospitals 
in the transition to skilled nursing facilities and 
assisted living facilities. 
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‘‘(B) APPLICATION.—An applicable critical 
access hospital seeking a grant under this para-
graph shall submit an application to the Sec-
retary on or before such date and in such form 
and manner as the Secretary specifies. 
‘‘(C) ADDITIONAL
REQUIREMENTS.—The 
Secretary may not award a grant under this 
paragraph to an eligible critical access hospital 
unless— 
‘‘(i) local organizations or the State in 
which the hospital is located provides 
matching funds; and 
‘‘(ii) the hospital provides assurances 
that it will surrender critical access hos-
pital status under this title within 180 
days of receiving the grant. 
‘‘(D) AMOUNT OF GRANT.—A grant to an 
eligible critical access hospital under this para-
graph may not exceed $1,000,000. 
‘‘(E) FUNDING.—There are appropriated 
from the Federal Hospital Insurance Trust 
Fund under section 1817 for making grants 
under this paragraph, $5,000,000 for fiscal 
year 2008. 
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‘‘(F) ELIGIBLE
CRITICAL
ACCESS
HOS-
PITAL DEFINED.—For purposes of this para-
graph, the term ‘eligible critical access hospital’ 
means a critical access hospital that has an av-
erage daily acute census of less than 0.5 and an 
average daily swing bed census of greater than 
10.0.’’. 
SEC. 122. REBASING FOR SOLE COMMUNITY HOSPITALS. 
(a) REBASING PERMITTED.—Section 1886(b)(3) of 
the Social Security Act (42 U.S.C. 1395ww(b)(3)) is 
amended by adding at the end the following new subpara-
graph: 
‘‘(L)(i) For cost reporting periods beginning on or 
after January 1, 2009, in the case of a sole community 
hospital there shall be substituted for the amount other-
wise determined under subsection (d)(5)(D)(i) of this sec-
tion, if such substitution results in a greater amount of 
payment under this section for the hospital, the subpara-
graph (L) rebased target amount. 
‘‘(ii) For purposes of this subparagraph, the term 
‘subparagraph (L) rebased target amount’ has the mean-
ing given the term ‘target amount’ in subparagraph (C), 
except that— 
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‘‘(I) there shall be substituted for the base cost 
reporting period the 12-month cost reporting period 
beginning during fiscal year 2006; 
‘‘(II) any reference in subparagraph (C)(i) to 
the ‘first cost reporting period’ described in such 
subparagraph is deemed a reference to the first cost 
reporting period beginning on or after January 1, 
2009; and 
‘‘(III) the applicable percentage increase shall 
only be applied under subparagraph (C)(iv) for dis-
charges occurring on or after January 1, 2009.’’. 
(b) 
CONFORMING
AMENDMENTS.—Section 
1886(b)(3) of the Social Security Act (42 U.S.C. 
1395ww(b)(3)) is amended— 
(1) in subparagraph (C), in the matter pre-
ceding clause (i), by striking ‘‘subparagraph (I)’’ 
and inserting ‘‘subparagraphs (I) and (L)’’; and 
(2) in subparagraph (I)(i), in the matter pre-
ceding subclause (I), by striking ‘‘For’’ and inserting 
‘‘Subject to subparagraph (L), for’’. 
SEC. 123. DEMONSTRATION PROJECT ON COMMUNITY 
HEALTH INTEGRATION MODELS IN CERTAIN 
RURAL COUNTIES. 
(a) IN GENERAL.—The Secretary shall establish a 
demonstration project to allow eligible entities to develop 
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and test new models for the delivery of health care services 
in eligible counties for the purpose of improving access to, 
and better integrating the delivery of, acute care, extended 
care, and other essential health care services to Medicare 
beneficiaries. 
(b) PURPOSE.—The purpose of the demonstration 
project under this section is to— 
(1) explore ways to increase access to, and im-
prove the adequacy of, payments for acute care, ex-
tended care, and other essential health care services 
provided under the Medicare and Medicaid programs 
in eligible counties; and 
(2) evaluate regulatory challenges facing such 
providers and the communities they serve. 
(c) REQUIREMENTS.—The following requirements 
shall apply under the demonstration project: 
(1) Health care providers in eligible counties se-
lected to participate in the demonstration project 
under subsection (d)(3) shall (when determined ap-
propriate by the Secretary), instead of the payment 
rates otherwise applicable under the Medicare pro-
gram, be reimbursed at a rate that covers at least 
the reasonable costs of the provider in furnishing 
acute care, extended care, and other essential health 
care services to Medicare beneficiaries. 
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(2) Methods to coordinate the survey and cer-
tification process under the Medicare program and 
the Medicaid program across all health service cat-
egories included in the demonstration project shall 
be tested with the goal of assuring quality and safe-
ty while reducing administrative burdens, as appro-
priate, related to completing such survey and certifi-
cation process. 
(3) Health care providers in eligible counties se-
lected to participate in the demonstration project 
under subsection (d)(3) and the Secretary shall work 
with the State to explore ways to revise reimburse-
ment policies under the Medicaid program to im-
prove access to the range of health care services 
available in such eligible counties. 
(4) The Secretary shall identify regulatory re-
quirements that may be revised appropriately to im-
prove access to care in eligible counties. 
(5) Other essential health care services nec-
essary to ensure access to the range of health care 
services in eligible counties selected to participate in 
the demonstration project under subsection (d)(3) 
shall be identified. Ways to ensure adequate funding 
for such services shall also be explored. 
(d) APPLICATION PROCESS.— 
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(1) ELIGIBILITY.— 
(A) IN
GENERAL.—Eligibility to partici-
pate in the demonstration project under this 
section shall be limited to eligible entities. 
(B) ELIGIBLE ENTITY DEFINED.—In this 
section, the term ‘‘eligible entity’’ means an en-
tity that— 
(i) is a Rural Hospital Flexibility Pro-
gram grantee under section 1820(g) of the 
Social Security Act (42 U.S.C. 1395i– 
4(g)); and 
(ii) is located in a State in which at 
least 65 percent of the counties in the 
State are counties that have 6 or less resi-
dents per square mile. 
(2) APPLICATION.— 
(A) IN GENERAL.—An eligible entity seek-
ing to participate in the demonstration project 
under this section shall submit an application to 
the Secretary at such time, in such manner, 
and containing such information as the Sec-
retary may require. 
(B) LIMITATION.—The Secretary shall se-
lect eligible entities located in not more than 4 
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States to participate in the demonstration 
project under this section. 
(3) SELECTION OF ELIGIBLE COUNTIES.—An 
eligible entity selected by the Secretary to partici-
pate in the demonstration project under this section 
shall select not more than 6 eligible counties in the 
State in which the entity is located in which to con-
duct the demonstration project. 
(4) ELIGIBLE COUNTY DEFINED.—In this sec-
tion, the term ‘‘eligible county’’ means a county that 
meets the following requirements: 
(A) The county has 6 or less residents per 
square mile. 
(B) As of the date of the enactment of this 
Act, a facility designated as a critical access 
hospital which meets the following requirements 
was located in the county: 
(i) As of the date of the enactment of 
this Act, the critical access hospital fur-
nished 1 or more of the following: 
(I) Home health services. 
(II) Hospice care. 
(III) Rural health clinic services. 
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(ii) As of the date of the enactment of 
this Act, the critical access hospital has an 
average daily inpatient census of 5 or less. 
(C) As of the date of the enactment of this 
Act, skilled nursing facility services were avail-
able in the county in— 
(i) a critical access hospital using 
swing beds; or 
(ii) a local nursing home. 
(e) ADMINISTRATION.— 
(1) IN GENERAL.—The demonstration project 
under this section shall be administered jointly by 
the Administrator of the Office of Rural Health Pol-
icy of the Health Resources and Services Adminis-
tration and the Administrator of the Centers for 
Medicare & Medicaid Services, in accordance with 
paragraphs (2) and (3). 
(2) HRSA DUTIES.—In administering the dem-
onstration project under this section, the Adminis-
trator of the Office of Rural Health Policy of the 
Health Resources and Services Administration 
shall— 
(A) award grants to the eligible entities se-
lected to participate in the demonstration 
project; and 
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(B) work with such entities to provide 
technical assistance related to the requirements 
under the project. 
(3) CMS DUTIES.—In administering the dem-
onstration project under this section, the Adminis-
trator of the Centers for Medicare & Medicaid Serv-
ices shall determine which provisions of titles XVIII 
and XIX of the Social Security Act (42 U.S.C. 1395 
et seq.; 1396 et seq.) the Secretary should waive 
under the waiver authority under subsection (i) that 
are relevant to the development of alternative reim-
bursement methodologies, which may include, as ap-
propriate, covering at least the reasonable costs of 
the provider in furnishing acute care, extended care, 
and other essential health care services to Medicare 
beneficiaries and coordinating the survey and certifi-
cation process under the Medicare and Medicaid pro-
grams, as appropriate, across all service categories 
included in the demonstration project. 
(f) DURATION.— 
(1) IN GENERAL.—The demonstration project 
under this section shall be conducted for a 3-year 
period beginning on October 1, 2009. 
(2) BEGINNING
DATE
OF
DEMONSTRATION 
PROJECT.—The demonstration project under this 
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section shall be considered to have begun in a State 
on the date on which the eligible counties selected to 
participate in the demonstration project under sub-
section (d)(3) begin operations in accordance with 
the requirements under the demonstration project. 
(g) FUNDING.— 
(1) CMS.— 
(A) IN
GENERAL.—The Secretary shall 
provide for the transfer, in appropriate part 
from the Federal Hospital Insurance Trust 
Fund established under section 1817 of the So-
cial Security Act (42 U.S.C. 1395i) and the 
Federal 
Supplementary 
Medical 
Insurance 
Trust Fund established under section 1841 of 
such Act (42 U.S.C. 1395t), of such sums as 
are necessary for the costs to the Centers for 
Medicare & Medicaid Services of carrying out 
its duties under the demonstration project 
under this section. 
(B) BUDGET NEUTRALITY.—In conducting 
the demonstration project under this section, 
the Secretary shall ensure that the aggregate 
payments made by the Secretary do not exceed 
the amount which the Secretary estimates 
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would have been paid if the demonstration 
project under this section was not implemented. 
(2) HRSA.—There are authorized to be appro-
priated to the Office of Rural Health Policy of the 
Health Resources and Services Administration 
$800,000 for each of fiscal years 2010, 2011, and 
2012 for the purpose of carrying out the duties of 
such Office under the demonstration project under 
this section, to remain available for the duration of 
the demonstration project. 
(h) REPORT.— 
(1) INTERIM REPORT.—Not later than the date 
that is 2 years after the date on which the dem-
onstration project under this section is implemented, 
the Administrator of the Office of Rural Health Pol-
icy of the Health Resources and Services Adminis-
tration, in coordination with the Administrator of 
the Centers for Medicare & Medicaid Services, shall 
submit a report to Congress on the status of the 
demonstration project that includes initial rec-
ommendations on ways to improve access to, and the 
availability of, health care services in eligible coun-
ties based on the findings of the demonstration 
project. 
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(2) FINAL
REPORT.—Not later than 1 year 
after the completion of the demonstration project, 
the Administrator of the Office of Rural Health Pol-
icy of the Health Resources and Services Adminis-
tration, in coordination with the Administrator of 
the Centers for Medicare & Medicaid Services, shall 
submit a report to Congress on such project, to-
gether with recommendations for such legislation 
and administrative action as the Secretary deter-
mines appropriate. 
(i) WAIVER AUTHORITY.—The Secretary may waive 
such requirements of titles XVIII and XIX of the Social 
Security Act (42 U.S.C. 1395 et seq.; 1396 et seq.) as 
may be necessary and appropriate for the purpose of car-
rying out the demonstration project under this section. 
(j) DEFINITIONS.—In this section: 
(1) EXTENDED
CARE
SERVICES.—The term 
‘‘extended care services’’ means the following: 
(A) Home health services. 
(B) Covered skilled nursing facility serv-
ices. 
(C) Hospice care. 
(2) COVERED
SKILLED
NURSING
FACILITY 
SERVICES.—The term ‘‘covered skilled nursing facil-
ity services’’ has the meaning given such term in 
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section 1888(e)(2)(A) of the Social Security Act (42 
U.S.C. 1395yy(e)(2)(A)). 
(3) CRITICAL
ACCESS
HOSPITAL.—The term 
‘‘critical access hospital’’ means a facility designated 
as a critical access hospital under section 1820(c) of 
such Act (42 U.S.C. 1395i–4(c)). 
(4) HOME
HEALTH
SERVICES.—The term 
‘‘home health services’’ has the meaning given such 
term in section 1861(m) of such Act (42 U.S.C. 
1395x(m)). 
(5) HOSPICE CARE.—The term ‘‘hospice care’’ 
has the meaning given such term in section 
1861(dd) of such Act (42 U.S.C. 1395x(dd)). 
(6) MEDICAID PROGRAM.—The term ‘‘Medicaid 
program’’ means the program under title XIX of 
such Act (42 U.S.C. 1396 et seq.). 
(7) MEDICARE PROGRAM.—The term ‘‘Medicare 
program’’ means the program under title XVIII of 
such Act (42 U.S.C. 1395 et seq.). 
(8) OTHER
ESSENTIAL
HEALTH
CARE
SERV-
ICES.—The term ‘‘other essential health care serv-
ices’’ means the following: 
(A) Ambulance services (as described in 
section 1861(s)(7) of the Social Security Act 
(42 U.S.C. 1395x(s)(7))). 
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(B) Rural health clinic services. 
(C) Public health services (as defined by 
the Secretary). 
(D) Other health care services determined 
appropriate by the Secretary. 
(9) RURAL
HEALTH
CLINIC
SERVICES.—The 
term ‘‘rural health clinic services’’ has the meaning 
given such term in section 1861(aa)(1) of such Act 
(42 U.S.C. 1395x(aa)(1)). 
(10) 
SECRETARY.—The 
term 
‘‘Secretary’’ 
means the Secretary of Health and Human Services. 
SEC. 124. EXTENSION OF THE RECLASSIFICATION OF CER-
TAIN HOSPITALS. 
(a) IN GENERAL.—Subsection (a) of section 106 of 
division B of the Tax Relief and Health Care Act of 2006 
(42 U.S.C. 1395 note), as amended by section 117 of the 
Medicare, Medicaid, and SCHIP Extension Act of 2007 
(Public Law 110–173), is amended by striking ‘‘Sep-
tember 30, 2008’’ and inserting ‘‘September 30, 2009’’. 
(b) SPECIAL EXCEPTION RECLASSIFICATIONS.—Sec-
tion 117(a)(2) of the Medicare, Medicaid, and SCHIP Ex-
tension Act of 2008 (Public Law 110–173)) is amended 
by striking ‘‘September 30, 2008’’ and inserting ‘‘the last 
date of the extension of reclassifications under section 
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106(a) of the Medicare Improvement and Extension Act 
of 2006 (division B of Public Law 109–432)’’. 
(c) DISREGARDING SECTION 508 HOSPITAL RECLAS-
SIFICATIONS FOR PURPOSES OF GROUP RECLASSIFICA-
TIONS.—Section 508(g) of the Medicare Prescription 
Drug, Improvement, and Modernization Act of 2003 (Pub-
lic Law 108–173, 42 U.S.C. 1395ww note), as added by 
section 117(b) of the Medicare, Medicaid, and SCHIP Ex-
tension Act of 2008 (Public Law 110–173)), is amended 
by striking ‘‘during fiscal year 2008’’ and inserting ‘‘be-
ginning on October 1, 2007, and ending on the last date 
of the extension of reclassifications under section 106(a) 
of the Medicare Improvement and Extension Act of 2006 
(division B of Public Law 109–432)’’. 
SEC. 125. REVOCATION OF UNIQUE DEEMING AUTHORITY 
OF THE JOINT COMMISSION. 
(a) REVOCATION.—Section 1865 of the Social Secu-
rity Act (42 U.S.C. 1395bb) is amended— 
(1) by striking subsection (a); and 
(2) by redesignating subsections (b), (c), (d), 
and (e) as subsections (a), (b), (c), and (d), respec-
tively. 
(b) CONFORMING AMENDMENTS.—(1) Section 1865 
of the Social Security Act (42 U.S.C. 1395bb) is amend-
ed— 
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(A) in subsection (a)(1), as redesignated by 
subsection (a)(2), by striking ‘‘In addition, if’’ and 
inserting ‘‘If’’; 
(B) in subsection (b), as so redesignated— 
(i) by striking ‘‘released to him by the 
Joint Commission on Accreditation of Hos-
pitals,’’ and inserting ‘‘released to the Secretary 
by’’; and 
(ii) by striking the comma after ‘‘Associa-
tion’’; 
(C) in subsection (c), as so redesignated, by 
striking ‘‘pursuant to subsection (a) or (b)(1)’’ and 
inserting ‘‘pursuant to subsection (a)(1)’’; and 
(D) in subsection (d), as so redesignated, by 
striking ‘‘pursuant to subsection (a) or (b)(1)’’ and 
inserting ‘‘pursuant to subsection (a)(1)’’. 
(2) Section 1861(e) of the Social Security Act (42 
U.S.C. 1395x(e)) is amended in the fourth sentence by 
striking ‘‘and (ii) is accredited by the Joint Commission 
on Accreditation of Hospitals, or is accredited by or ap-
proved by a program of the country in which such institu-
tion is located if the Secretary finds the accreditation or 
comparable approval standards of such program to be es-
sentially equivalent to those of the Joint Commission on 
Accreditation of Hospitals’’ and inserting ‘‘and (ii) is ac-
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credited by a national accreditation body recognized by the 
Secretary under section 1865(a), or is accredited by or 
approved by a program of the country in which such insti-
tution is located if the Secretary finds the accreditation 
or comparable approval standards of such program to be 
essentially equivalent to those of such a national accredita-
tion body.’’. 
(3) Section 1864(c) of the Social Security Act (42 
U.S.C. 1395aa(c)) is amended by striking ‘‘pursuant to 
subsection (a) or (b)(1) of section 1865’’ and inserting 
‘‘pursuant to section 1865(a)(1)’’. 
(4) Section 1875(b) of the Social Security Act (42 
U.S.C. 1395ll(b)) is amended by striking ‘‘the Joint Com-
mission on Accreditation of Hospitals,’’ and inserting ‘‘na-
tional accreditation bodies under section 1865(a)’’. 
(5) Section 1834(a)(20)(B) of the Social Security Act 
(42 U.S.C. 1395m(a)(20)(B)) is amended by striking 
‘‘section 1865(b)’’ and inserting ‘‘section 1865(a)’’. 
(6) Section 1852(e)(4)(C) of the Social Security Act 
(42 U.S.C. 1395w–22(e)(4)(C)) is amended by striking 
‘‘section 1865(b)(2)’’ and inserting ‘‘section 1865(a)(2)’’. 
(c) AUTHORITY TO RECOGNIZE THE JOINT COMMIS-
SION AS A NATIONAL ACCREDITATION BODY.—The Sec-
retary of Health and Human Services may recognize the 
Joint Commission as a national accreditation body under 
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section 1865 of the Social Security Act (42 U.S.C. 
1395bb), as amended by this section, upon such terms and 
conditions, and upon submission of such information, as 
the Secretary may require. 
(d) EFFECTIVE DATE; TRANSITION RULE.—(1) Sub-
ject to paragraph (2), the amendments made by this sec-
tion shall apply with respect to accreditations of hospitals 
granted on or after the date that is 24 months after the 
date of the enactment of this Act. 
(2) For purposes of title XVIII of the Social Security 
Act (42 U.S.C. 1395 et seq.), the amendments made by 
this section shall not effect the accreditation of a hospital 
by the Joint Commission, or under accreditation or com-
parable approval standards found to be essentially equiva-
lent to accreditation or approval standards of the Joint 
Commission, for the period of time applicable under such 
accreditation. 
Subtitle C—Provisions Relating to 
Part B 
PART 1—PHYSICIANS’ SERVICES 
SEC. 131. PHYSICIAN PAYMENT, EFFICIENCY, AND QUALITY 
IMPROVEMENTS. 
(a) IN GENERAL.— 
(1) INCREASE
IN
UPDATE
FOR
THE
SECOND 
HALF OF 2008 AND FOR 2009.— 
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(A) FOR THE SECOND HALF OF 2008.— 
Section 1848(d)(8) of the Social Security Act 
(42 U.S.C. 1395w–4(d)(8)), as added by section 
101 of the Medicare, Medicaid, and SCHIP Ex-
tension Act of 2007 (Public Law 110–173), is 
amended— 
(i) in the heading, by striking ‘‘A POR-
TION OF’’; 
(ii) in subparagraph (A), by striking 
‘‘for the period beginning on January 1, 
2008, and ending on June 30, 2008,’’; and 
(iii) in subparagraph (B)— 
(I) in the heading, by striking 
‘‘THE
REMAINING
PORTION
OF
2008 
AND’’; and 
(II) by striking ‘‘for the period 
beginning on July 1, 2008, and end-
ing on December 31, 2008, and’’. 
(B) FOR 2009.—Section 1848(d) of the So-
cial Security Act (42 U.S.C. 1395w–4(d)), as 
amended by section 101 of the Medicare, Med-
icaid, and SCHIP Extension Act of 2007 (Pub-
lic Law 110–173), is amended by adding at the 
end the following new paragraph: 
‘‘(9) UPDATE FOR 2009.— 
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‘‘(A) IN GENERAL.—Subject to paragraphs 
(7)(B) and (8)(B), in lieu of the update to the 
single conversion factor established in para-
graph (1)(C) that would otherwise apply for 
2009, the update to the single conversion factor 
shall be 1.1 percent. 
‘‘(B) NO
EFFECT
ON
COMPUTATION
OF 
CONVERSION
FACTOR
FOR
2010
AND
SUBSE-
QUENT
YEARS.—The conversion factor under 
this subsection shall be computed under para-
graph (1)(A) for 2010 and subsequent years as 
if subparagraph (A) had never applied.’’. 
(3) REVISION OF THE PHYSICIAN ASSISTANCE 
AND QUALITY INITIATIVE FUND.— 
(A) IN
GENERAL.—Subject to subpara-
graph (B), section 1848(l)(2) of the Social Se-
curity Act (42 U.S.C. 1395w–4(l)(2)), as 
amended by section 101(a)(2) of the Medicare, 
Medicaid, and SCHIP Extension Act of 2007 
(Public Law 110–173), is amended— 
(i) in subparagraph (A)— 
(I) by striking clause (i)(III); and 
(II) by striking clause (ii)(III); 
and 
(ii) in subparagraph (B)— 
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(I) in clause (i), by adding ‘‘and’’ 
at the end; 
(II) in clause (ii), by striking ‘‘; 
and’’ and inserting a period; and 
(III) by striking clause (iii). 
(B) CONTINGENCY.—If there is enacted, 
before, on, or after the date of the enactment 
of this Act, a Supplemental Appropriations Act, 
2008 that includes a provision amending section 
1848(l) of the Social Security Act, the alter-
native amendment described in subparagraph 
(C)— 
(i) shall apply instead of the amend-
ments made by subparagraph (A); and 
(ii) shall be executed after such provi-
sion in such Supplemental Appropriations 
Act. 
(C) 
ALTERNATIVE
AMENDMENT
DE-
SCRIBED.—The 
alternative 
amendment 
de-
scribed in this subparagraph is as follows: Sec-
tion 1848(l)(2) of the Social Security Act (42 
U.S.C. 1395w–4(l)(2)), as amended by section 
101(a)(2) of the Medicare, Medicaid, and 
SCHIP Extension Act of 2007 (Public Law 
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110–173) and by the Supplemental Appropria-
tions Act, 2008, is amended— 
(i) in subparagraph (A)— 
(I) by striking subclauses (III) 
and (IV) of clause (i); and 
(II) by striking subclauses (III) 
and (IV) of clause (ii); and 
(ii) in subparagraph (B)— 
(I) in clause (i), by adding ‘‘and’’ 
at the end; 
(II) in clause (ii), by striking the 
semicolon at the end and inserting a 
period; and 
(III) by striking clauses (iii) and 
(iv). 
(b) EXTENSION AND IMPROVEMENT OF THE QUAL-
ITY REPORTING SYSTEM.— 
(1) SYSTEM.—Section 1848(k)(2) of the Social 
Security Act (42 U.S.C. 1395w–4(k)(2)), as amend-
ed by section 101(b)(1) of the Medicare, Medicaid, 
and SCHIP Extension Act of 2007 (Public Law 
110–173), is amended by adding at the end the fol-
lowing new subparagraphs: 
‘‘(C) 
FOR
2010
AND
SUBSEQUENT 
YEARS.— 
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‘‘(i) IN GENERAL.—Subject to clause 
(ii), for purposes of reporting data on qual-
ity measures for covered professional serv-
ices furnished during 2010 and each subse-
quent 
year, 
subject 
to 
subsection 
(m)(3)(C), the quality measures (including 
electronic prescribing quality measures) 
specified under this paragraph shall be 
such measures selected by the Secretary 
from measures that have been endorsed by 
the entity with a contract with the Sec-
retary under section 1890(a). 
‘‘(ii) EXCEPTION.—In the case of a 
specified area or medical topic determined 
appropriate by the Secretary for which a 
feasible and practical measure has not 
been endorsed by the entity with a contract 
under section 1890(a), the Secretary may 
specify a measure that is not so endorsed 
as long as due consideration is given to 
measures that have been endorsed or 
adopted by a consensus organization iden-
tified by the Secretary, such as the AQA 
alliance. 
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‘‘(D) OPPORTUNITY TO PROVIDE INPUT ON 
MEASURES
FOR
2009
AND
SUBSEQUENT 
YEARS.—For each quality measure (including 
an electronic prescribing quality measure) 
adopted by the Secretary under subparagraph 
(B) (with respect to 2009) or subparagraph 
(C), the Secretary shall ensure that eligible pro-
fessionals have the opportunity to provide input 
during the development, endorsement, or selec-
tion of measures applicable to services they fur-
nish.’’. 
(2) REDESIGNATION OF REPORTING SYSTEM.— 
Subsection (c) of section 101 of division B of the 
Tax Relief and Health Care Act of 2006 (42 U.S.C. 
1395w–4 note), as amended by section 101(b)(2) of 
the Medicare, Medicaid, and SCHIP Extension Act 
of 2007 (Public Law 110–173), is redesignated as 
subsection (m) of section 1848 of the Social Security 
Act. 
(3) INCENTIVE PAYMENTS UNDER REPORTING 
SYSTEM.—Section 1848(m) of the Social Security 
Act, as redesignated by paragraph (2), is amended— 
(A) by amending the heading to read as 
follows: ‘‘INCENTIVE PAYMENTS FOR QUALITY 
REPORTING’’; 
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(B) by striking paragraph (1) and insert-
ing the following: 
‘‘(1) INCENTIVE PAYMENTS.— 
‘‘(A) IN
GENERAL.—For 2007 through 
2010, with respect to covered professional serv-
ices furnished during a reporting period by an 
eligible professional, if— 
‘‘(i) there are any quality measures 
that have been established under the physi-
cian reporting system that are applicable 
to any such services furnished by such pro-
fessional for such reporting period; and 
‘‘(ii) the eligible professional satisfac-
torily submits (as determined under this 
subsection) to the Secretary data on such 
quality measures in accordance with such 
reporting system for such reporting period, 
in addition to the amount otherwise paid under 
this part, there also shall be paid to the eligible 
professional (or to an employer or facility in the 
cases described in clause (A) of section 
1842(b)(6)) or, in the case of a group practice 
under paragraph (3)(C), to the group practice, 
from the Federal Supplementary Medical Insur-
ance Trust Fund established under section 
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1841 an amount equal to the applicable quality 
percent of the Secretary’s estimate (based on 
claims submitted not later than 2 months after 
the end of the reporting period) of the allowed 
charges under this part for all such covered 
professional services furnished by the eligible 
professional (or, in the case of a group practice 
under paragraph (3)(C), by the group practice) 
during the reporting period. 
‘‘(B) APPLICABLE
QUALITY
PERCENT.— 
For purposes of subparagraph (A), the term 
‘applicable quality percent’ means— 
‘‘(i) for 2007 and 2008, 1.5 percent; 
and 
‘‘(ii) for 2009 and 2010, 2.0 per-
cent.’’; 
(C) by striking paragraph (3) and redesig-
nating paragraph (2) as paragraph (3); 
(D) in paragraph (3), as so redesignated— 
(i) in the matter preceding subpara-
graph (A), by striking ‘‘For purposes’’ and 
inserting the following: 
‘‘(A) IN GENERAL.—For purposes’’; 
(ii) by redesignating subparagraphs 
(A) and (B) as clauses (i) and (ii), respec-
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tively, and moving the indentation of such 
clauses 2 ems to the right; 
(iii) in subparagraph (A), as added by 
clause (i), by adding at the end the fol-
lowing flush sentence: 
‘‘For years after 2008, quality measures for 
purposes of this subparagraph shall not include 
electronic prescribing quality measures.’’; and 
(iv) by adding at the end the following 
new subparagraphs: 
‘‘(C) SATISFACTORY
REPORTING
MEAS-
URES FOR GROUP PRACTICES.— 
‘‘(i) IN
GENERAL.—By January 1, 
2010, the Secretary shall establish and 
have in place a process under which eligi-
ble professionals in a group practice (as 
defined by the Secretary) shall be treated 
as satisfactorily submitting data on quality 
measures under subparagraph (A) and as 
meeting the requirement described in sub-
paragraph (B)(ii) for covered professional 
services for a reporting period (or, for pur-
poses of subsection (a)(5), for a reporting 
period for a year) if, in lieu of reporting 
measures under subsection (k)(2)(C), the 
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group practice reports measures deter-
mined appropriate by the Secretary, such 
as measures that target high-cost chronic 
conditions and preventive care, in a form 
and manner, and at a time, specified by 
the Secretary. 
‘‘(ii) 
STATISTICAL
SAMPLING 
MODEL.—The process under clause (i) 
shall provide for the use of a statistical 
sampling model to submit data on meas-
ures, such as the model used under the 
Physician Group Practice demonstration 
project under section 1866A. 
‘‘(iii) NO DOUBLE PAYMENTS.—Pay-
ments to a group practice under this sub-
section by reason of the process under 
clause (i) shall be in lieu of the payments 
that would otherwise be made under this 
subsection to eligible professionals in the 
group practice for satisfactorily submitting 
data on quality measures. 
‘‘(D) AUTHORITY
TO
REVISE
SATISFAC-
TORILY
REPORTING
DATA.—For years after 
2009, the Secretary, in consultation with stake-
holders and experts, may revise the criteria 
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under this subsection for satisfactorily submit-
ting data on quality measures under subpara-
graph (A) and the criteria for submitting data 
on electronic prescribing quality measures 
under subparagraph (B)(ii).’’; 
(E) in paragraph (5)— 
(i) in subparagraph (C), by inserting 
‘‘for 2007, 2008, and 2009,’’ after ‘‘provi-
sion of law,’’; 
(ii) in subparagraph (D)— 
(I) in clause (i)— 
(aa) by inserting ‘‘for 2007 
and 2008’’ after ‘‘under this sub-
section’’; and 
(bb) by striking ‘‘paragraph 
(2)’’ and inserting ‘‘this sub-
section’’; 
(II) in clause (ii), by striking 
‘‘shall’’ and inserting ‘‘may establish 
procedures to’’; and 
(III) in clause (iii)— 
(aa) by inserting ‘‘(or, in the 
case of a group practice under 
paragraph 
(3)(C), 
the 
group 
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practice)’’ after ‘‘an eligible pro-
fessional’’; 
(bb) by striking ‘‘bonus in-
centive payment’’ and inserting 
‘‘incentive payment under this 
subsection’’; and 
(cc) by adding at the end 
the following new sentence: ‘‘If 
such payments for such period 
have already been made, the Sec-
retary shall recoup such pay-
ments from the eligible profes-
sional (or the group practice).’’; 
(iii) in subparagraph (E)— 
(I) by striking ‘‘(I)
IN
GEN-
ERAL.—’’; 
(II) by striking clause (ii); 
(III) by redesignating subclauses 
(I) through (IV) as clauses (i) 
through (iv), respectively, and moving 
the indentation of such clauses 2 ems 
to the left; 
(IV) in clause (ii), as so redesig-
nated, by striking ‘‘paragraph (2)’’ 
and inserting ‘‘this subsection’’; and 
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(V) in clause (iv), as so redesig-
nated— 
(aa) by striking ‘‘the bonus’’ 
and inserting ‘‘any’’; and 
(bb) by inserting ‘‘and the 
payment adjustment under sub-
section (a)(5)(A)’’ before the pe-
riod at the end; 
(iv) in subparagraph (F)— 
(I) by striking ‘‘2009, paragraph 
(3) shall not apply, and’’ and insert-
ing ‘‘subsequent years,’’; and 
(II) by striking ‘‘paragraph (2)’’ 
and inserting ‘‘this subsection’’; and 
(v) by adding at the end the following 
new subparagraph: 
‘‘(G) POSTING
ON
WEBSITE.—The Sec-
retary shall post on the Internet website of the 
Centers for Medicare & Medicaid Services, in an 
easily understandable format, a list of the 
names of the following: 
‘‘(i) The eligible professionals (or, in 
the case of reporting under paragraph 
(3)(C), the group practices) who satisfac-
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101 
Act (42 U.S.C. 1395w–4(k)(3)) that are using elec-
tronic prescribing systems, including a determination 
of whether less than 50 percent of eligible profes-
sionals are using electronic prescribing systems. 
(2) If less than 50 percent of eligible profes-
sionals are using electronic prescribing systems, rec-
ommendations for increasing the use of electronic 
prescribing systems by eligible professionals, such as 
changes to the incentive payment adjustments estab-
lished under section 1848(a)(5) of such Act, as 
added by subsection (b). 
(3) The estimated savings to the Medicare pro-
gram under title XVIII of such Act resulting from 
the use of electronic prescribing systems. 
(4) Reductions in avoidable medical errors re-
sulting from the use of electronic prescribing sys-
tems. 
(5) The extent to which the privacy and secu-
rity of the personal health information of Medicare 
beneficiaries is protected when such beneficiaries’ 
prescription drug data and usage information is 
used for purposes other than their direct clinical 
care, including— 
(A) whether information identifying the 
beneficiary is, and remains, removed from data 
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142 
under this subsection) that furnishes the items and serv-
ices described in paragraph (2). 
‘‘(2) The items and services described in this para-
graph are— 
‘‘(A) physician-prescribed exercise; 
‘‘(B) education or training (to the extent the 
education or training is closely and clearly related to 
the individual’s care and treatment and is tailored to 
such individual’s needs); 
‘‘(C) psychosocial assessment; 
‘‘(D) outcomes assessment; and 
‘‘(E) such other items and services as the Sec-
retary may determine, but only if such items and 
services are— 
‘‘(i) reasonable and necessary for the diag-
nosis or active treatment of the individual’s 
condition; 
‘‘(ii) reasonably expected to improve or 
maintain the individual’s condition and func-
tional level; and 
‘‘(iii) furnished under such guidelines re-
lating to the frequency and duration of such 
items and services as the Secretary shall estab-
lish, taking into account accepted norms of 
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165 
time on dialysis, age, race, ethnicity, and other ap-
propriate factors; 
‘‘(ii) shall include a payment adjustment for 
high cost outliers due to unusual variations in the 
type or amount of medically necessary care, includ-
ing variations in the amount of erythropoiesis stimu-
lating agents necessary for anemia management; 
‘‘(iii) shall include a payment adjustment that 
reflects the extent to which costs incurred by low- 
volume facilities (as defined by the Secretary) in fur-
nishing renal dialysis services exceed the costs in-
curred by other facilities in furnishing such services, 
and for payment for renal dialysis services furnished 
on or after January 1, 2011, and before January 1, 
2014, such payment adjustment shall not be less 
than 10 percent; and 
‘‘(iv) may include such other payment adjust-
ments as the Secretary determines appropriate, such 
as a payment adjustment— 
‘‘(I) for pediatric providers of services and 
renal dialysis facilities; 
‘‘(II) by a geographic index, such as the 
index referred to in paragraph (12)(D), as the 
Secretary determines to be appropriate; and 
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