648
Title VII, Subtitle A
Sec. 7111. Establishment of cumulative expenditure goals for physician serv-
ices.
Sec. 7112. Imposition of coinsurance on laboratory services.
Sec. 7113. Increase in medicare part B premium for individuals with high in-
come.
Sec. 7114. Extension of 25 percent part B premium.
Sec. 7115. Reduction in hospital outpatient services through establishment of
prospective payment system.
PART 3—SAVINGS RELATING TO PARTS A AND B
Sec. 7121. Reduction in home health services through establishment of prospec-
tive payment system.
Sec. 7122. Medicare secondary payer.
Subtitle A—Increased Beneficiary
Choice; Improved Program
Efficiency
PART 1—INCREASED BENEFICIARY CHOICE
SEC. 7001. REQUIREMENTS FOR HEALTH MAINTENANCE
ORGANIZATIONS UNDER MEDICARE.
(a) USE OF METROPOLITAN STATISTICAL AREAS TO
DETERMINE ADJUSTED AVERAGE PER CAPITA COST.—
Section 1876(a)(4) of the Social Security Act (42 U.S.C.
1395mm(a)(4)) is amended by striking ‘‘in a geographic
area served by an eligible organization or in a similar
area’’ and inserting ‘‘in the metropolitan statistical area
(as defined by the Office of Management and Budget) in
which the individual resides, or in the entire portion of
the State in which the individual resides which is not lo-
cated in a metropolitan statistical area in the case of an
individual who does not reside in a metropolitan statistical
area’’.
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Title VII, Subtitle A
(b) 
DETERMINATION
OF
MODEL
ADDITIONAL
HEALTH BENEFIT PACKAGES.—Section 1876(g) of such
Act (42 U.S.C. 1395mm(g)) is amended by inserting after
paragraph (3) the following new paragraph:
‘‘(4) The Secretary shall develop the following model
packages of additional health benefits (referred to in para-
graph (3)(B)) which an eligible organization may provide
(at its option) under paragraph (2):
‘‘(A) Coverage for catastrophic illness (subject
to a limit on out-of-pocket expenditures).
‘‘(B) Coverage for prescription drugs.
‘‘(C) Coverage for preventive services.’’.
(c) REVISION OF MEMBERSHIP LIMITATION.—Sec-
tion 1876(f) of such Act (42 U.S.C. 1395mm(f)) is
amended—
(1) in paragraph (1), by striking ‘‘one-half’’
and inserting ‘‘25 percent’’; and
(2) in paragraph (2)(A), by striking ‘‘50 per-
cent’’ and inserting ‘‘75 percent’’.
(d) ENROLLMENT PERIODS FOR MEDICARE HEALTH
MAINTENANCE ORGANIZATIONS.—
(1) UNIFORM
OPEN
ENROLLMENT
PERIOD.—
Section 1876(c)(3)(A)(i) of such Act (42 U.S.C.
1395mm(c)(3)(A)(i)) is amended by striking ‘‘must
have’’ and all that follows through ‘‘and including’’
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Title VII, Subtitle A
and inserting the following: ‘‘shall have open enroll-
ment during an annual uniform open enrollment pe-
riod established by the Secretary for all eligible orga-
nizations, together with’’.
(2) 
OPEN
ENROLLMENT
FOR
CERTAIN
DISENROLLED
INDIVIDUALS.—Section
1876(c)(3)(A)(ii)(I) 
of 
such 
Act 
(42 
U.S.C.
1395mm(c)(3)(A)(ii)(I)) is amended by adding at
the end the following: ‘‘Each eligible organization
with a risk-sharing contract under this section shall
have an open enrollment period for individuals resid-
ing in the organization’s service area who disenroll
from another eligible organization with a risk-shar-
ing contract under this section on the grounds that
the individual’s primary care physician is no longer
a member of the organization’s provider network or
for cause (in accordance with such standards, and as
demonstrated through an appeals process that meets
such requirements, as the Secretary may establish).
(e) EFFECTIVE DATE.—The amendments made by
this section shall apply to contracts entered into on or
after the date of the enactment of this Act.
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Title VII, Subtitle A
SEC. 7002. EXPANSION AND REVISION OF MEDICARE SE-
LECT POLICIES.
(a) PERMITTING MEDICARE SELECT POLICIES IN
ALL STATES.—
(1) IN
GENERAL.—Subsection (c) of section
4358 of the Omnibus Budget Reconciliation Act of
1990 (hereafter referred to as ‘‘OBRA–1990’’) is
hereby repealed.
(2) CONFORMING AMENDMENT.—Section 4358
of OBRA–1990 is amended by redesignating sub-
section (d) as subsection (c).
(b) REQUIREMENTS OF MEDICARE SELECT POLI-
CIES.—Section 1882(t)(1) of the Social Security Act (42
U.S.C. 1395ss(t)(1)) is amended to read as follows:
‘‘(1)(A) If a medicare supplemental policy meets the
1991 NAIC Model Regulation or 1991 Federal Regulation
and otherwise complies with the requirements of this sec-
tion except that—
‘‘(i) the benefits under such policy are re-
stricted to items and services furnished by certain
entities (or reduced benefits are provided when items
or services are furnished by other entities), and
‘‘(ii) in the case of a policy described in sub-
paragraph (C)(i)—
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Title VII, Subtitle A
‘‘(I) the benefits under such policy are not
one of the groups or packages of benefits de-
scribed in subsection (p)(2)(A),
‘‘(II) except for nominal copayments im-
posed for services covered under part B of this
title, such benefits include at least the core
group of basic benefits described in subsection
(p)(2)(B), and
‘‘(III) an enrollee’s liability under such pol-
icy for physician’s services covered under part
B of this title is limited to the nominal
copayments described in subclause (II),
the policy shall nevertheless be treated as meeting those
standards if the policy meets the requirements of subpara-
graph (B).
‘‘(B) A policy meets the requirements of this sub-
paragraph if—
‘‘(i) full benefits are provided for items and
services furnished through a network of entities
which have entered into contracts or agreements
with the issuer of the policy,
‘‘(ii) full benefits are provided for items and
services furnished by other entities if the services are
medically necessary and immediately required be-
cause of an unforeseen illness, injury, or condition
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Title VII, Subtitle A
and it is not reasonable given the circumstances to
obtain the services through the network,
‘‘(iii) the network offers sufficient access,
‘‘(iv) the issuer of the policy has arrangements
for an ongoing quality assurance program for items
and services furnished through the network,
‘‘(v)(I) the issuer of the policy provides to each
enrollee at the time of enrollment an explanation
of—
‘‘(aa) the restrictions on payment under
the policy for services furnished other than by
or through the network,
‘‘(bb) out of area coverage under the pol-
icy,
‘‘(cc) the policy’s coverage of emergency
services and urgently needed care, and
‘‘(dd) the availability of a policy through
the entity that meets the 1991 Model NAIC
Regulation or 1991 Federal Regulation without
regard to this subsection and the premium
charged for such policy, and
‘‘(II) each enrollee prior to enrollment acknowl-
edges receipt of the explanation provided under
subclause (I), and