618
‘‘(A) IN
GENERAL.—If the repayment, 
within the period otherwise permitted by a pro-
vider of services, physician, practitioner, or 
other supplier, of an overpayment under this 
title meets the standards developed under sub-
paragraph (B), subject to subparagraph (C), 
and the provider, physician, practitioner, or 
supplier requests the Secretary to enter into a 
repayment plan with respect to such overpay-
ment, the Secretary shall enter into a plan with 
the provider, physician, practitioner, or supplier 
for the offset or repayment (at the election of 
the provider, physician, practitioner, or sup-
plier) of such overpayment over a period of at 
least 1 year, but not longer than 3 years. Inter-
est shall accrue on the balance through the pe-
riod of repayment. The repayment plan shall 
meet terms and conditions determined to be ap-
propriate by the Secretary. 
‘‘(B) DEVELOPMENT
OF
STANDARDS.—
The Secretary shall develop standards for the 
recovery of overpayments. Such standards 
shall—
‘‘(i) include a requirement that the 
Secretary take into account (and weigh in
619
favor of the use of a repayment plan) the 
reliance 
(as 
described 
in 
section 
1871(d)(2)) by a provider of services, phy-
sician, practitioner, and supplier on guid-
ance when determining whether a repay-
ment plan should be offered; and 
‘‘(ii) provide for consideration of the 
financial hardship imposed on a provider of 
services, physician, practitioner, or supplier 
in considering such a repayment plan. 
In developing standards with regard to financial 
hardship with respect to a provider of services, 
physician, practitioner, or supplier, the Sec-
retary shall take into account the amount of the 
proposed recovery as a proportion of payments 
made to that provider, physician, practitioner, 
or supplier.
‘‘(C) 
EXCEPTIONS.—Subparagraph 
(A) 
shall not apply if—
‘‘(i) the Secretary has reason to sus-
pect that the provider of services, physi-
cian, practitioner, or supplier may file for 
bankruptcy or otherwise cease to do busi-
ness or discontinue participation in the 
program under this title; or
620
‘‘(ii) there is an indication of fraud or 
abuse committed against the program. 
‘‘(D) IMMEDIATE COLLECTION IF VIOLA-
TION OF REPAYMENT PLAN.—If a provider of 
services, physician, practitioner, or supplier fails 
to make a payment in accordance with a repay-
ment plan under this paragraph, the Secretary 
may immediately seek to offset or otherwise re-
cover the total balance outstanding (including 
applicable interest) under the repayment plan. 
‘‘(E) RELATION
TO
NO
FAULT
PROVI-
SION.—Nothing in this paragraph shall be con-
strued as affecting the application of section 
1870(c) (relating to no adjustment in the cases 
of certain overpayments). 
‘‘(2) LIMITATION ON RECOUPMENT.—
‘‘(A) NO RECOUPMENT UNTIL RECONSID-
ERATION EXERCISED.—In the case of a pro-
vider of services, physician, practitioner, or sup-
plier that is determined to have received an 
overpayment under this title and that seeks a 
reconsideration of such determination by a 
qualified independent contractor under section 
1869(c), the Secretary may not take any action 
(or authorize any other person, including any
621
Medicare contractor, as defined in subpara-
graph (C)) to recoup the overpayment until the 
date the decision on the reconsideration has 
been rendered. 
‘‘(B) PAYMENT OF INTEREST.—
‘‘(i) RETURN OF RECOUPED AMOUNT 
WITH INTEREST IN CASE OF REVERSAL.—
Insofar as such determination on appeal 
against the provider of services, physician, 
practitioner, or supplier is later reversed, 
the Secretary shall provide for repayment 
of the amount recouped plus interest for 
the period in which the amount was re-
couped. 
‘‘(ii) INTEREST IN CASE OF AFFIRMA-
TION.—Insofar as the determination on 
such appeal is against the provider of serv-
ices, physician, practitioner, or supplier, in-
terest on the overpayment shall accrue on 
and after the date of the original notice of 
overpayment. 
‘‘(iii) RATE OF INTEREST.—The rate 
of interest under this subparagraph shall 
be the rate otherwise applicable under this 
title in the case of overpayments.
622
‘‘(C) MEDICARE CONTRACTOR DEFINED.—
For purposes of this subsection, the term ‘medi-
care contractor’ has the meaning given such 
term in section 1889(e). 
‘‘(3) PAYMENT AUDITS.—
‘‘(A) WRITTEN
NOTICE
FOR
POST-PAY-
MENT AUDITS.—Subject to subparagraph (C), if 
a medicare contractor decides to conduct a 
post-payment audit of a provider of services, 
physician, practitioner, or supplier under this 
title, the contractor shall provide the provider of 
services, physician, practitioner, or supplier 
with written notice (which may be in electronic 
form) of the intent to conduct such an audit. 
‘‘(B) EXPLANATION OF FINDINGS FOR ALL 
AUDITS.—Subject to subparagraph (C), if a 
medicare contractor audits a provider of serv-
ices, physician, practitioner, or supplier under 
this title, the contractor shall—
‘‘(i) give the provider of services, phy-
sician, practitioner, or supplier a full re-
view and explanation of the findings of the 
audit in a manner that is understandable 
to the provider of services, physician, prac-
titioner, or supplier and permits the devel-
623
opment of an appropriate corrective action 
plan; 
‘‘(ii) inform the provider of services, 
physician, practitioner, or supplier of the 
appeal rights under this title as well as 
consent settlement options (which are at 
the discretion of the Secretary); and 
‘‘(iii) give the provider of services, 
physician, practitioner, or supplier an op-
portunity to provide additional information 
to the contractor. 
‘‘(C) 
EXCEPTION.—Subparagraphs 
(A) 
and (B) shall not apply if the provision of no-
tice or findings would compromise pending law 
enforcement activities, whether civil or criminal, 
or reveal findings of law enforcement-related 
audits.
‘‘(4) 
NOTICE
OF
OVER-UTILIZATION
OF 
CODES.—The Secretary shall establish, in consulta-
tion with organizations representing the classes of 
providers of services, physicians, practitioners, and 
suppliers, a process under which the Secretary pro-
vides for notice to classes of providers of services, 
physicians, practitioners, and suppliers served by a 
medicare contractor in cases in which the contractor
624
has identified that particular billing codes may be 
overutilized by that class of providers of services, 
physicians, practitioners, or suppliers under the pro-
grams under this title (or provisions of title XI inso-
far as they relate to such programs). 
‘‘(5) STANDARD
METHODOLOGY
FOR
PROBE 
SAMPLING.—The Secretary shall establish a stand-
ard methodology for medicare administrative con-
tractors to use in selecting a sample of claims for re-
view in the case of an abnormal billing pattern. 
‘‘(6) CONSENT SETTLEMENT REFORMS.—
‘‘(A) IN
GENERAL.—The Secretary may 
use a consent settlement (as defined in sub-
paragraph (D)) to settle a projected overpay-
ment. 
‘‘(B) OPPORTUNITY
TO
SUBMIT
ADDI-
TIONAL INFORMATION BEFORE CONSENT SET-
TLEMENT OFFER.—Before offering a provider 
of services, physician, practitioner, or supplier a 
consent settlement, the Secretary shall—
‘‘(i) communicate to the provider of 
services, physician, practitioner, or supplier 
in a nonthreatening manner that, based on 
a review of the medical records requested 
by the Secretary, a preliminary evaluation
625
of those records indicates that there would 
be an overpayment; and 
‘‘(ii) provide for a 45-day period dur-
ing which the provider of services, physi-
cian, practitioner, or supplier may furnish 
additional information concerning the med-
ical records for the claims that had been 
reviewed. 
‘‘(C) CONSENT SETTLEMENT OFFER.—The 
Secretary shall review any additional informa-
tion furnished by the provider of services, physi-
cian, practitioner, or supplier under subpara-
graph (B)(ii). Taking into consideration such 
information, the Secretary shall determine if 
there still appears to be an overpayment. If so, 
the Secretary—
‘‘(i) shall provide notice of such deter-
mination to the provider of services, physi-
cian, practitioner, or supplier, including an 
explanation of the reason for such deter-
mination; and 
‘‘(ii) in order to resolve the overpay-
ment, may offer the provider of services, 
physician, practitioner, or supplier—
626
‘‘(I) the opportunity for a statis-
tically valid random sample; or 
‘‘(II) a consent settlement. 
The opportunity provided under clause (ii)(I) 
does not waive any appeal rights with respect to 
the alleged overpayment involved. 
‘‘(D) CONSENT SETTLEMENT DEFINED.—
For purposes of this paragraph, the term ‘con-
sent settlement’ means an agreement between 
the Secretary and a provider of services, physi-
cian, practitioner, or supplier whereby both par-
ties agree to settle a projected overpayment 
based on less than a statistically valid sample of 
claims and the provider of services, physician, 
practitioner, or supplier agrees not to appeal 
the claims involved.’’. 
(b) EFFECTIVE DATES AND DEADLINES.—
(1) Not later than 1 year after the date of en-
actment of this Act, the Secretary shall first—
(A) develop standards for the recovery of 
overpayments under section 1874A(h)(1)(B) of 
the Social Security Act, as added by subsection 
(a); 
(B) establish the process for notice of over-
utilization of billing codes under section
627
1874A(h)(4) of the Social Security Act, as 
added by subsection (a); and 
(C) establish a standard methodology for 
selection of sample claims for abnormal billing 
patterns under section 1874A(h)(5) of the So-
cial Security Act, as added by subsection (a). 
(2) Section 1874A(h)(2) of the Social Security 
Act, as added by subsection (a), shall apply to ac-
tions taken after the date that is 1 year after the 
date of enactment of this Act. 
(3) Section 1874A(h)(3) of the Social Security 
Act, as added by subsection (a), shall apply to audits 
initiated after the date of enactment of this Act. 
(4) Section 1874A(h)(6) of the Social Security 
Act, as added by subsection (a), shall apply to con-
sent settlements entered into after the date of enact-
ment of this Act.
SEC. 543. PROCESS FOR CORRECTION OF MINOR ERRORS 
AND OMISSIONS ON CLAIMS WITHOUT PUR-
SUING APPEALS PROCESS. 
(a) IN GENERAL.—The Secretary shall develop, in 
consultation with appropriate medicare contractors (as de-
fined in section 1889(e) of the Social Security Act, as 
added by section 531(d)(1)) and representatives of pro-
viders of services, physicians, practitioners, facilities, and
628
suppliers, a process whereby, in the case of minor errors 
or omissions (as defined by the Secretary) that are de-
tected in the submission of claims under the programs 
under title XVIII of such Act, a provider of services, phy-
sician, practitioner, facility, or supplier is given an oppor-
tunity to correct such an error or omission without the 
need to initiate an appeal. Such process shall include the 
ability to resubmit corrected claims. 
(b) DEADLINE.—Not later than 1 year after the date 
of enactment of this Act, the Secretary shall first develop 
the process under subsection (a). 
SEC. 544. AUTHORITY TO WAIVE A PROGRAM EXCLUSION. 
The first sentence of section 1128(c)(3)(B) (42 
U.S.C. 1320a–7(c)(3)(B)) is amended to read as follows: 
‘‘Subject to subparagraph (G), in the case of an exclusion 
under subsection (a), the minimum period of exclusion 
shall be not less than 5 years, except that, upon the re-
quest of an administrator of a Federal health care pro-
gram (as defined in section 1128B(f)) who determines 
that the exclusion would impose a hardship on bene-
ficiaries of that program, the Secretary may, after con-
sulting with the Inspector General of the Department of 
Health and Human Services, waive the exclusion under 
subsection (a)(1), (a)(3), or (a)(4) with respect to that 
program in the case of an individual or entity that is the
629
sole community physician or sole source of essential spe-
cialized services in a community.’’.
TITLE VI—OTHER PROVISIONS 
SEC. 601. INCREASE IN MEDICAID DSH ALLOTMENTS FOR 
FISCAL YEARS 2004 AND 2005. 
(a) IN GENERAL.—Section 1923(f)(4) (42 U.S.C. 
1396r–4(f)(4)) is amended—
(1) in the paragraph heading, by striking ‘‘FIS-
CAL YEARS 2001 AND 2002’’ and inserting ‘‘CERTAIN 
FISCAL YEARS’’; 
(2) in subparagraph (A)—
(A) in clause (i)—
(i) by striking ‘‘paragraph (2)’’ and 
inserting ‘‘paragraphs (2) and (3)’’; and 
(ii) by striking ‘‘and’’ at the end; 
(B) in clause (ii), by striking the period 
and inserting a semicolon; and 
(C) by adding at the end the following: 
‘‘(iii) for fiscal year 2004, shall be the 
DSH allotment determined under para-
graph (3) for that fiscal year increased by 
the amount equal to the product of 0.50 
and the difference between—
‘‘(I) the amount that the DSH 
allotment would be if the DSH allot-
630
ment for the State determined under 
clause (ii) were increased, subject to 
subparagraph (B) and paragraph (5), 
by the percentage change in the Con-
sumer Price Index for all urban con-
sumers (all items; U.S. city average) 
for each of fiscal years 2002 and 
2003; and 
‘‘(II) the DSH allotment deter-
mined under paragraph (3) for the 
State for fiscal year 2004; and 
‘‘(iv) for fiscal year 2005, shall be the 
DSH allotment determined under para-
graph (3) for that fiscal year increased by 
the amount equal to the product of 0.50 
and the difference between—
‘‘(I) the amount that the DSH 
allotment would be if the DSH allot-
ment for the State determined under 
clause (ii) were increased, subject to 
subparagraph (B) and paragraph (5), 
by the percentage change in the Con-
sumer Price Index for all urban con-
sumers (all items; U.S. city average)
631
for each of fiscal years 2002, 2003, 
and 2004; and 
‘‘(II) the DSH allotment deter-
mined under paragraph (3) for the 
State for fiscal year 2005.’’; and 
(3) in subparagraph (C)—
(A) in the subparagraph heading, by strik-
ing ‘‘AFTER FISCAL YEAR 2002’’ and inserting 
‘‘FOR OTHER FISCAL YEARS’’; and 
(B) by striking ‘‘2003 or’’ and inserting 
‘‘2003, fiscal year 2006, or’’. 
(b) DSH ALLOTMENT FOR THE DISTRICT OF CO-
LUMBIA.—Section 1923(f)(4) (42 U.S.C. 1396r–4(f)(4)), 
as amended by paragraph (1), is amended—
(1) in subparagraph (A), by inserting ‘‘and ex-
cept as provided in subparagraph (C)’’ after ‘‘para-
graph (2)’’; 
(2) by redesignating subparagraph (C) as sub-
paragraph (D); and
(3) by inserting after subparagraph (B) the fol-
lowing: 
‘‘(C) DSH ALLOTMENT FOR THE DISTRICT 
OF COLUMBIA.—
‘‘(i) IN
GENERAL.—Notwithstanding 
subparagraph (A), the DSH allotment for
632
the District of Columbia for fiscal year 
2004, shall be determined by substituting 
‘‘49’’ for ‘‘32’’ in the item in the table con-
tained in paragraph (2) with respect to the 
DSH allotment for FY 00 (fiscal year 
2000) for the District of Columbia, and 
then increasing such allotment, subject to 
subparagraph (B) and paragraph (5), by 
the percentage change in the Consumer 
Price Index for all urban consumers (all 
items; U.S. city average) for each of fiscal 
years 2000, 2001, 2002, and 2003. 
‘‘(ii) NO
APPLICATION
TO
ALLOT-
MENTS
AFTER
FISCAL
YEAR
2004.—The 
DSH allotment for the District of Colum-
bia for fiscal year 2003, fiscal year 2005, 
or any succeeding fiscal year shall be de-
termined under paragraph (3) without re-
gard to the DSH allotment determined 
under clause (i).’’. 
(c) CONFORMING AMENDMENT.—Section 1923(f)(3) 
of such Act (42 U.S.C. 1396r–4(f)(3)) is amended by in-
serting ‘‘, paragraph (4),’’ after ‘‘subparagraph (B)’’.
633
SEC. 602. INCREASE IN FLOOR FOR TREATMENT AS AN EX-
TREMELY LOW DSH STATE UNDER THE MED-
ICAID PROGRAM FOR FISCAL YEARS 2004 AND 
2005. 
(a) IN GENERAL.—Section 1923(f)(5) (42 U.S.C. 
1396r–4(f)(5)) is amended—
(1) by striking ‘‘In the case of’’ and inserting 
the following: 
‘‘(A) IN GENERAL.—In the case of’’; and 
(2) by adding at the end the following: 
‘‘(B) INCREASE
IN
FLOOR
FOR
FISCAL 
YEARS 2004 AND 2005.—
‘‘(i) FISCAL YEAR 2004.—In the case 
of a State in which the total expenditures 
under the State plan (including Federal 
and State shares) for disproportionate 
share hospital adjustments under this sec-
tion for fiscal year 2000, as reported to the 
Administrator of the Centers for Medicare 
and Medicaid Services as of August 31, 
2003, is greater than 0 but less than 3 
percent of the State’s total amount of ex-
penditures under the State plan for med-
ical assistance during the fiscal year, the 
DSH allotment for fiscal year 2004 shall 
be increased to 3 percent of the State’s
634
total amount of expenditures under such 
plan for such assistance during such fiscal 
year. 
‘‘(ii) FISCAL YEAR 2005.—In the case 
of a State in which the total expenditures 
under the State plan (including Federal 
and State shares) for disproportionate 
share hospital adjustments under this sec-
tion for fiscal year 2001, as reported to the 
Administrator of the Centers for Medicare 
and Medicaid Services as of August 31, 
2004, is greater than 0 but less than 3 
percent of the State’s total amount of ex-
penditures under the State plan for med-
ical assistance during the fiscal year, the 
DSH allotment for fiscal year 2005 shall 
be the DSH allotment determined for the 
State for fiscal year 2004 (under clause (i) 
or paragraph (4) (as applicable)), in-
creased by the percentage change in the 
consumer price index for all urban con-
sumers (all items; U.S. city average) for 
fiscal year 2004. 
‘‘(iii) NO
APPLICATION
TO
ALLOT-
MENTS
AFTER
FISCAL
YEAR
2005.—The
635
DSH allotment for any State for fiscal 
year 2006 or any succeeding fiscal year 
shall be determined under this subsection 
without regard to the DSH allotments de-
termined under this subparagraph.’’. 
(b) ALLOTMENT ADJUSTMENT.—
(1) IN GENERAL.—Section 1923(f) of the Social 
Security Act (42 U.S.C. 1396r–4(f)) is amended—
(A) by redesignating paragraph (6) as 
paragraph (7); and 
(B) by inserting after paragraph (5) the 
following: 
‘‘(6) ALLOTMENT ADJUSTMENT.—Only with re-
spect to fiscal year 2004 or 2005, if a statewide 
waiver under section 1115 that was implemented on 
January 1, 1994, is revoked or terminated before 
the end of either such fiscal year, the Secretary 
shall—
‘‘(A) permit the State whose waiver was 
revoked or terminated to submit an amendment 
to its State plan that would describe the meth-
odology to be used by the State (after the effec-
tive date of such revocation or termination) to 
identify and make payments to disproportionate 
share hospitals, including children’s hospitals
636
and institutions for mental diseases or other 
mental health facilities (other than State-owned 
institutions or facilities), on the basis of the 
proportion of patients served by such hospitals 
that are low-income patients with special needs; 
and 
‘‘(B) provide for purposes of this sub-
section for computation of an appropriate DSH 
allotment for the State for fiscal year 2004 or 
2005 (or both) that provides for the maximum 
amount (permitted consistent with paragraph 
(3)(B)(ii)) that does not result in greater ex-
penditures under this title than would have 
been made if such waiver had not been revoked 
or terminated.’’. 
(2) TREATMENT OF INSTITUTIONS FOR MENTAL 
DISEASES.—Section 1923(h)(1) of the Social Secu-
rity Act (42 U.S.C. 1396r–4(h)(1)) is amended—
(A) in paragraph (1), in the matter pre-
ceding subparagraph (A), by inserting ‘‘(subject 
to paragraph (3))’’ after ‘‘the lesser of the fol-
lowing’’; and
(B) by adding at the end the following new 
paragraph:
637
‘‘(3) SPECIAL RULE.—The limitation of para-
graph (1) shall not apply in the case of a State to 
which subsection (f)(6) applies.’’. 
SEC. 603. INCREASED REPORTING REQUIREMENTS TO EN-
SURE THE APPROPRIATENESS OF PAYMENT 
ADJUSTMENTS 
TO 
DISPROPORTIONATE 
SHARE HOSPITALS UNDER THE MEDICAID 
PROGRAM. 
Section 1923 (42 U.S.C. 1396r–4) is amended by 
adding at the end the following new subsection: 
‘‘(j) ANNUAL REPORTS REGARDING PAYMENT AD-
JUSTMENTS.—With respect to fiscal year 2004 and each 
fiscal year thereafter, the Secretary shall require a State, 
as a condition of receiving a payment under section 
1903(a)(1) with respect to a payment adjustment made 
under this section, to submit an annual report that—
‘‘(1) identifies each disproportionate share hos-
pital that received a payment adjustment under this 
section for the preceding fiscal year and the amount 
of the payment adjustment made to such hospital 
for the preceding fiscal year; and 
‘‘(2) includes such other information as the 
Secretary determines necessary to ensure the appro-
priateness of the payment adjustments made under 
this section for the preceding fiscal year.’’.
638
SEC. 604. CLARIFICATION OF INCLUSION OF INPATIENT 
DRUG PRICES CHARGED TO CERTAIN PUBLIC 
HOSPITALS IN THE BEST PRICE EXEMPTIONS 
FOR THE MEDICAID DRUG REBATE PRO-
GRAM. 
(a) IN GENERAL.—Section 1927(c)(1)(C)(i)(I) of the 
Social Security Act (42 U.S.C. 1396r–8(c)(1)(C)(i)(I)) is 
amended by inserting before the semicolon the following: 
‘‘(including inpatient prices charged to hospitals described 
in section 340B(a)(4)(L) of the Public Health Service 
Act)’’. 
(b) 
ANTI-DIVERSION
PROTECTION.—Section 
1927(c)(1)(C) of the Social Security Act (42 U.S.C. 
1396r–8(c)(1)(C)) is amended by adding at the end the 
following: 
‘‘(iii) APPLICATION OF AUDITING AND 
RECORDKEEPING
REQUIREMENTS.—With 
respect to a covered entity described in 
section 340B(a)(4)(L) of the Public Health 
Service Act, any drug purchased for inpa-
tient use shall be subject to the auditing 
and recordkeeping requirements described 
in section 340B(a)(5)(C) of the Public 
Health Service Act.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section take effect on October 1, 2003.
639
SEC. 605. ASSISTANCE WITH COVERAGE OF LEGAL IMMI-
GRANTS UNDER THE MEDICAID PROGRAM 
AND SCHIP. 
(a) MEDICAID
PROGRAM.—Section 1903(v) (42 
U.S.C. 1396b(v)) is amended—
(1) in paragraph (1), by striking ‘‘paragraph 
(2)’’ and inserting ‘‘paragraphs (2) and (4)’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(4)(A) With respect to any or all of fiscal years 2005 
through 2007, a State may elect (in a plan amendment 
under this title) to provide medical assistance under this 
title (including under a waiver authorized by the Sec-
retary) for aliens who are lawfully residing in the United 
States (including battered aliens described in section 
431(c) of such Act) and who are otherwise eligible for such 
assistance, within either or both of the following eligibility 
categories: 
‘‘(i) PREGNANT WOMEN.—Women during preg-
nancy (and during the 60-day period beginning on 
the last day of the pregnancy). 
‘‘(ii) CHILDREN.—Children (as defined under 
such plan), including optional targeted low-income 
children described in section 1905(u)(2)(B). 
‘‘(B)(i) In the case of a State that has elected to pro-
vide medical assistance to a category of aliens under sub-
640
paragraph (A), no debt shall accrue under an affidavit of 
support against any sponsor of such an alien on the basis 
of provision of assistance to such category and the cost 
of such assistance shall not be considered as an unreim-
bursed cost. 
‘‘(ii) The provisions of sections 401(a), 402(b), 403, 
and 421 of the Personal Responsibility and Work Oppor-
tunity Reconciliation Act of 1996 shall not apply to a 
State that makes an election under subparagraph (A).’’. 
(b) 
SCHIP.—Section 
2107(e)(1) 
(42 
U.S.C. 
1397gg(e)(1)) is amended by redesignating subparagraphs 
(C) and (D) as subparagraph (D) and (E), respectively, 
and by inserting after subparagraph (B) the following new 
subparagraph: 
‘‘(C) Section 1903(v)(4) (relating to op-
tional coverage of categories of permanent resi-
dent alien children), but only if the State has 
elected to apply such section to the category of 
children under title XIX and only with respect 
to any or all of fiscal years 2005 through 
2007.’’.
641
SEC. 606. ESTABLISHMENT OF CONSUMER OMBUDSMAN AC-
COUNT. 
(a) IN GENERAL.—Section 1817 (42 U.S.C. 1395i) 
is amended by adding at the end the following new sub-
section: 
‘‘(i) CONSUMER OMBUDSMAN ACCOUNT.—
‘‘(1) ESTABLISHMENT.—There is hereby estab-
lished in the Trust Fund an expenditure account to 
be known as the ‘Consumer Ombudsman Account’ 
(in this subsection referred to as the ‘Account’). 
‘‘(2) APPROPRIATED
AMOUNTS
TO
ACCOUNT 
FOR
HEALTH
INSURANCE
INFORMATION, 
COUN-
SELING, AND ASSISTANCE GRANTS.—
‘‘(A) IN GENERAL.—There are hereby ap-
propriated to the Account from the Trust Fund 
for each fiscal year beginning with fiscal year 
2005, the amount described in subparagraph 
(B) for such fiscal year for the purpose of mak-
ing grants under section 4360 of the Omnibus 
Budget Reconciliation Act of 1990. 
‘‘(B) AMOUNT DESCRIBED.—For purposes 
of subparagraph (A), the amount described in 
this subparagraph for a fiscal year is the 
amount equal to the product of—
‘‘(i) $1; and
642
‘‘(ii) the total number of individuals 
receiving benefits under this title for the 
calendar year ending on December 31 of 
the preceding fiscal year.’’.
(b) CONFORMING AMENDMENT.—Section 4360(g) of 
the Omnibus Budget Reconciliation Act of 1990 (42 
U.S.C. 1395b–4(g)) is amended to read as follows: 
‘‘(g) FUNDING.—The Secretary shall use amounts 
appropriated to the Consumer Ombudsman Account in ac-
cordance with section 1817(i) of the Social Security Act 
for a fiscal year for making grants under this section for 
that fiscal year.’’. 
SEC. 607. GAO STUDY REGARDING IMPACT OF ASSETS TEST 
FOR LOW-INCOME BENEFICIARIES. 
(a) STUDY.—The Comptroller General of the United 
States shall conduct a study to determine the extent to 
which drug utilization and access to covered drugs for an 
individual described in subsection (b) differs from the drug 
utilization and access to covered drugs of an individual 
who qualifies for the transitional assistance prescription 
drug card program under section 1807A of the Social Se-
curity Act (as added by section 111) or for the premiums 
and cost-sharing subsidies applicable to a qualified medi-
care beneficiary, a specified low-income medicare bene-
643
ficiary, or a qualifying individual under section 1860D–
19 of the Social Security Act (as added by section 101). 
(b) INDIVIDUAL DESCRIBED.—An individual is de-
scribed in this subsection if the individual does not qualify 
for the transitional assistance prescription drug card pro-
gram under section 1807A of the Social Security Act or 
for the premiums and cost-sharing subsidies applicable to 
a qualified medicare beneficiary, a specified low-income 
medicare beneficiary, or a qualifying individual under sec-
tion 1860D–19 of the Social Security Act solely as a result 
of the application of an assets test to the individual. 
(c) REPORT.—Not later than September 30, 2007, 
the Comptroller General shall submit a report to Congress 
on the study conducted under subsection (a) that includes 
such recommendations for legislation as the Comptroller 
General determines are appropriate. 
(d) DEFINITIONS.—In this section: 
(1) COVERED
DRUGS.—The term ‘‘covered 
drugs’’ has the meaning given that term in section 
1860D(a)(D) of the Social Security Act. 
(2) QUALIFIED MEDICARE BENEFICIARY; SPECI-
FIED LOW-INCOME MEDICARE BENEFICIARY; QUALI-
FYING INDIVIDUAL.—The terms ‘‘qualified medicare 
beneficiary’’, ‘‘specified low-income medicare bene-
ficiary’’ and ‘‘qualifying individual’’ have the mean-
644
ing given those terms under section 1860D–19 of 
the Social Security Act. 
SEC. 608. HEALTH CARE INFRASTRUCTURE IMPROVEMENT. 
At the end of the Social Security Act, add the fol-
lowing new title: 
‘‘TITLE XXII—HEALTH CARE IN-
FRASTRUCTURE 
IMPROVE-
MENT 
‘‘SEC. 2201. DEFINITIONS. 
‘‘In this title, the following definitions apply: 
‘‘(1) ELIGIBLE PROJECT COSTS.—The term ‘eli-
gible project costs’ means amounts substantially all 
of which are paid by, or for the account of, an obli-
gor in connection with a project, including the cost 
of—
‘‘(A) development phase activities, includ-
ing planning, feasibility analysis, revenue fore-
casting, environmental study and review, per-
mitting, architectural engineering and design 
work, and other preconstruction activities; 
‘‘(B) construction, reconstruction, rehabili-
tation, replacement, and acquisition of facilities 
and real property (including land related to the 
project and improvements to land), environ-
645
mental mitigation, construction contingencies, 
and acquisition of equipment; 
‘‘(C) capitalized interest necessary to meet 
market requirements, reasonably required re-
serve funds, capital issuance expenses, and 
other carrying costs during construction;
‘‘(D) major medical equipment determined 
to be appropriate by the Secretary; and 
‘‘(E) refinancing projects or activities that 
are otherwise eligible for financial assistance 
under subparagraphs (A) through (D). 
‘‘(2) FEDERAL
CREDIT
INSTRUMENT.—The 
term ‘Federal credit instrument’ means a secured 
loan, loan guarantee, or line of credit authorized to 
be made available under this title with respect to a 
project. 
‘‘(3) INVESTMENT-GRADE
RATING.—The term 
‘investment-grade rating’ means a rating category of 
BBB minus, Baa3, or higher assigned by a rating 
agency to project obligations offered into the capital 
markets. 
‘‘(4) LENDER.—The term ‘lender’ means any 
non-Federal qualified institutional buyer (as defined 
in section 230.144A(a) of title 17, Code of Federal 
Regulations (or any successor regulation), known as
646
Rule 144A(a) of the Securities and Exchange Com-
mission and issued under the Securities Act of 1933 
(15 U.S.C. 77a et seq.)), including—
‘‘(A) a qualified retirement plan (as de-
fined in section 4974(c) of the Internal Revenue 
Code of 1986) that is a qualified institutional 
buyer; and 
‘‘(B) a governmental plan (as defined in 
section 414(d) of the Internal Revenue Code of 
1986) that is a qualified institutional buyer. 
‘‘(5) LINE OF CREDIT.—The term ‘line of cred-
it’ means an agreement entered into by the Sec-
retary with an obligor under section 2204 to provide 
a direct loan at a future date upon the occurrence 
of certain events. 
‘‘(6) LOAN GUARANTEE.—The term ‘loan guar-
antee’ means any guarantee or other pledge by the 
Secretary to pay all or part of the principal of and 
interest on a loan or other debt obligation issued by 
an obligor and funded by a lender. 
‘‘(7) 
LOCAL
SERVICER.—The 
term 
‘local 
servicer’ means a State or local government or any 
agency of a State or local government that is re-
sponsible for servicing a Federal credit instrument 
on behalf of the Secretary.
653
section, the Secretary, in consultation with each rat-
ing agency providing a rating letter under section 
2202(b)(2)(B), shall determine an appropriate cap-
ital reserve subsidy amount for each secured loan, 
taking into account such letter. 
‘‘(4) INVESTMENT-GRADE
RATING
REQUIRE-
MENT.—The funding of a secured loan under this 
section shall be contingent on the project’s senior 
obligations receiving an investment-grade rating, ex-
cept that—
‘‘(A) the Secretary may fund an amount of 
the secured loan not to exceed the capital re-
serve subsidy amount determined under para-
graph (3) prior to the obligations receiving an 
investment-grade rating; and 
‘‘(B) the Secretary may fund the remain-
ing portion of the secured loan only after the 
obligations have received an investment-grade 
rating by at least 1 rating agency. 
‘‘(b) TERMS AND LIMITATIONS.—
‘‘(1) IN GENERAL.—A secured loan under this 
section with respect to a project shall be on such 
terms and conditions and contain such covenants, 
representations, warranties, and requirements (in-
654
cluding requirements for audits) as the Secretary de-
termines appropriate. 
‘‘(2) MAXIMUM AMOUNT.—The amount of the 
secured loan shall not exceed 100 percent of the rea-
sonably anticipated eligible project costs. 
‘‘(3) PAYMENT.—The secured loan—
‘‘(A) shall—
‘‘(i) be payable, in whole or in part, 
from reliable revenue sources; and
‘‘(ii) include a rate covenant, coverage 
requirement, or similar security feature 
supporting the project obligations; and 
‘‘(B) may have a lien on revenues de-
scribed in subparagraph (A) subject to any lien 
securing project obligations. 
‘‘(4) INTEREST RATE.—The interest rate on the 
secured loan shall be not less than the yield on mar-
ketable United States Treasury securities of a simi-
lar maturity to the maturity of the secured loan on 
the date of execution of the loan agreement. 
‘‘(5) MATURITY
DATE.—The final maturity 
date of the secured loan shall be not later than 30 
years after the date of substantial completion of the 
project.