326
programs under titles XVIII and XIX of the Social Secu-
rity Act as of January 1, 1994.
SEC. 5077. EXTENSION OF WAIVER FOR WATTS HEALTH
FOUNDATION.
Section 9312(c)(3)(D) of OBRA–1986, as added by
section 4018(d) of OBRA–1987 and as amended by sec-
tion 6212(a)(1) of OBRA–1989, is amended by striking
‘‘1994’’ and inserting ‘‘1996’’.
SEC. 5078. IMPROVED OUTREACH FOR QUALIFIED MEDI-
CARE BENEFICIARIES.
The Secretary of Health and Human Services shall
establish and implement a method for obtaining informa-
tion from newly eligible medicare beneficiaries that may
be used to determine whether such beneficiaries may be
eligible for medical assistance for medicare cost-sharing
under State medicaid plans as qualified medicare bene-
ficiaries, and for transmitting such information to the
State in which such a beneficiary resides.
SEC. 5079. SOCIAL HEALTH MAINTENANCE ORGANIZA-
TIONS.
(a) EXTENSION
OF CURRENT WAIVERS.—Section
4018(b) of OBRA–1987, as amended by section
4207(b)(4) of OBRA–1990, is amended—
(1) in paragraph (1) by striking ‘‘December 31,
1995’’ and inserting ‘‘December 31, 1997’’; and
327
(2) in paragraph (4) by striking ‘‘March 31,
1996’’ and inserting ‘‘March 31, 1998’’.
(b) EXPANSION
OF
DEMONSTRATIONS.—Section
2355 of the Deficit Reduction Act of 1984, as amended
by section 4207(b)(4)(B) of OBRA–1990, is amended—
(1) in the last sentence of subsection (a) by
striking ‘‘12 months’’ and inserting ‘‘36 months’’;
and
(2) in subsection (b)(1)(B)—
(A) by striking ‘‘or’’ at the end of clause
(iii), and
(B) by redesignating clause (iv) as clause
(v) and inserting after clause (iii) the following
new clause:
‘‘(iv) integrating acute and chronic
care management for patients with end-
stage renal disease through expanded com-
munity care case management services
(and for purposes of a demonstration
project conducted under this clause, any
requirement under a waiver granted under
this section that a project disenroll individ-
uals who develop end-stage renal disease
shall not apply); or’’.
328
(c) EXPANSION
OF NUMBER
OF MEMBERS PER
SITE.—The Secretary of Health and Human Services may
not impose a limit of less than 12,000 on the number of
individuals that may participate in a project conducted
under section 2355 of the Deficit Reduction Act of 1984.
(d) MISCELLANEOUS
AND
TECHNICAL
CORREC-
TIONS.—
(1) The section following section 4206 of
OBRA–1990 is amended by striking ‘‘SEC. 4027.’’
and inserting ‘‘SEC. 4207.’’, and in this subtitle is
referred to as section 4207 of OBRA–1990.
(2) Section 2355(b)(1)(B) of the Deficit Reduc-
tion 
Act 
of 
1984, 
as 
amended 
by 
section
4207(b)(4)(B)(ii) of OBRA–1990, is amended—
(A) by striking ‘‘12907(c)(4)(A)’’ and in-
serting ‘‘4207(b)(4)(B)(i)’’, and
(B) by striking ‘‘feasibilitly’’ and inserting
‘‘feasibility’’.
(3) Section 4207(b)(4)(B)(iii)(III) of OBRA–
1990 is amended by striking the period at the end
and inserting a semicolon.
(4) Subsections (c)(3) and (e) of section 2355
of the Deficit Reduction Act of 1984, as amended by
section 4207(b)(4)(B) of OBRA–1990, are each
329
amended by striking ‘‘12907(c)(4)(A)’’ each place it
appears and inserting ‘‘4207(b)(4)(B)’’.
(5) Section 4207(c)(2) of OBRA–1990 is
amended by striking ‘‘the Committee on Ways and
Means’’ each place it appears and inserting ‘‘the
Committees on Ways and Means and Energy and
Commerce’’.
(6) Section 4207(d) of OBRA–1990 is amended
by redesignating the second paragraph (3) (relating
to effective date) as paragraph (4).
(7) Section 4207(i)(2) of OBRA–1990 is
amended—
(A) by striking the period at the end of
clause (iii) and inserting a semicolon, and
(B) in clause (v), by striking ‘‘residents’’
and inserting ‘‘patients’’.
(8) Section 4207(j) of OBRA–1990 is amended
by striking ‘‘title’’ each place it appears and insert-
ing ‘‘subtitle’’.
(e) EFFECTIVE DATE.—The amendments made by
this section shall take effect as if included in the enact-
ment of OBRA–1990.
SEC. 5080. PEER REVIEW ORGANIZATIONS.
(a) REPEAL OF PRO PRECERTIFICATION REQUIRE-
MENT FOR CERTAIN SURGICAL PROCEDURES.—
330
(1) IN
GENERAL.—Section 1164 (42 U.S.C.
1320c–13) is repealed.
(2) CONFORMING AMENDMENTS.—
(A) Section 1154 (42 U.S.C. 1320c–3) is
amended—
(i) in subsection (a), by striking para-
graph (12), and
(ii) in subsection (d), by striking
‘‘(and except as provided in section
1164)’’.
(B) Section 1833 (42 U.S.C. 1395l) is
amended—
(i) in subsection (a)(1)(D)(i), by strik-
ing ‘‘, or for tests furnished in connection
with obtaining a second opinion required
under section 1164(c)(2) (or a third opin-
ion, if the second opinion was in disagree-
ment with the first opinion)’’;
(ii) in subsection (a)(1), by striking
clause (G);
(iii) in subsection (a)(2)(A), by strik-
ing ‘‘to items and services (other than clin-
ical diagnostic laboratory tests) furnished
in connection with obtaining a second opin-
ion required under section 1164(c)(2) (or a
331
third opinion, if the second opinion was in
disagreement with the first opinion),’’;
(iv) in subsection (a)(2)(D)(i)—
(I) by striking ‘‘related basis,’’
and inserting ‘‘related basis or’’, and
(II) by striking ‘‘, or for tests
furnished in connection with obtaining
a second opinion required under sec-
tion 1164(c)(2) (or a third opinion, if
the second opinion was in disagree-
ment with the first opinion)’’;
(v) in subsection (a)(3), by striking
‘‘and for items and services furnished in
connection with obtaining a second opinion
required under section 1164(c)(2), or a
third opinion, if the second opinion was in
disagreement with the first opinion)’’; and
(vi) in the first sentence of subsection
(b), by striking ‘‘(4)’’ and all that follows
through ‘‘and (5)’’ and inserting ‘‘and
(4)’’.
(C) Section 1834(g)(1)(B) (42 U.S.C.
1395m(g)(1)(B)) is amended by striking ‘‘and
for items and services furnished in connection
with obtaining a second opinion required under
332
section 1164(c)(2), or a third opinion, if the
second opinion was in disagreement with the
first opinion)’’.
(D) Section 1862(a) (42 U.S.C. 1395y(a))
is amended—
(i) by adding ‘‘or’’ at the end of para-
graph (14),
(ii) by striking ‘‘; or’’ at the end of
paragraph (15) and inserting a period, and
(iii) by striking paragraph (16).
(E) 
The 
third 
sentence 
of 
section
1866(a)(2)(A) (42 U.S.C. 1395w(a)(2)(A)) is
amended by striking ‘‘, with respect to items
and services furnished in connection with ob-
taining a second opinion required under section
1164(c)(2) (or a third opinion, if the second
opinion was in disagreement with the first opin-
ion),’’.
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to services provided on
or after the date of the enactment of this Act.
(b) MISCELLANEOUS
AND
TECHNICAL
CORREC-
TIONS.—(1) The third sentence of section 1156(b)(1) (42
U.S.C. 1320c–5(b)(1)) is amended by striking ‘‘whehter’’
and inserting ‘‘whether’’.
333
(2)(A) Subparagraph (B) of section 1154(a)(9) (42
U.S.C. 1320c–3(a)(9)) is amended to read as follows:
‘‘(B) If the organization finds, after reasonable
notice and opportunity for discussion with the physi-
cian or practitioner concerned, that the physician or
practitioner has furnished services in violation of
section 1156(a), the organization shall notify the
State board or boards responsible for the licensing
or disciplining of the physician or practitioner of its
finding and of any action taken as a result of the
finding.’’.
(B) Subparagraph (D) of section 1160(b)(1) (42
U.S.C. 1320c–9(b)(1)) is amended to read as follows:
‘‘(D) to provide notice in accordance with
section 1154(a)(9)(B);’’.
(3) Section 4205(d)(2)(B) of OBRA–1990 is amend-
ed by striking ‘‘amendments’’ and inserting ‘‘amend-
ment’’.
(4) Section 1160(d) (42 U.S.C. 1320c–9(d)) is
amended by striking ‘‘subpena’’ and inserting ‘‘subpoena’’.
(5) Section 4205(e)(2) of OBRA–1990 is amended
by striking ‘‘amendments’’ and inserting ‘‘amendment’’
and by striking ‘‘all’’.
334
(6)(A) Except as provided in subparagraph (B), the
amendments made by this subsection shall take effect as
if included in the enactment of OBRA–1990.
(B) The amendments made by paragraph (2) (relat-
ing to the requirement on reporting of information to
State boards) shall take effect on the date of the enact-
ment of this Act.
SEC. 5081. HOSPICE INFORMATION TO HOME HEALTH
BENEFICIARIES.
(a) IN GENERAL.—Section 1891(a)(1) (42 U.S.C.
1395bbb(a)(1)) is amended by adding at the end the fol-
lowing new subparagraph:
‘‘(H) The right, in the case of a resident
who is entitled to benefits under this title, to be
fully informed orally and in writing (at the time
of coming under the care of the agency) of the
entitlement of individuals to hospice care under
section 1812(a)(4) (unless there is no hospice
program providing hospice care for which pay-
ment may be made under this title within the
geographic area of the facility and it is not the
common practice of the agency to refer patients
to hospice programs located outside such geo-
graphic area).’’.
335
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to services furnished on or after
the first day of the first month beginning more than one
year after the date of the enactment of this Act.
SEC. 5082. HEALTH MAINTENANCE ORGANIZATIONS.
(a) ADJUSTMENT IN MEDICARE CAPITATION PAY-
MENTS TO ACCOUNT FOR REGIONAL VARIATIONS IN AP-
PLICATION OF SECONDARY PAYER PROVISIONS.—
(1) IN
GENERAL.—Section 1876(a)(4) (42
U.S.C. 1395mm(a)(4)) is amended by adding at the
end the following new sentence: ‘‘In establishing the
adjusted average per capita cost for a geographic
area, the Secretary shall take into account the dif-
ferences between the proportion of individuals in the
area with respect to whom there is a group health
plan that is a primary plan (within the meaning of
section 1862(b)(2)(A)) compared to the proportion
of all such individuals with respect to whom there is
such a group health plan.’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) shall apply to contracts entered
into for years beginning with 1994.
(b) REVISIONS
IN
THE PAYMENT METHODOLOGY
FOR RISK CONTRACTORS.—Section 4204(b) of OBRA–
1990 is amended to read as follows:
336
‘‘(b) REVISIONS IN THE PAYMENT METHODOLOGY
FOR RISK CONTRACTORS.—(1)(A) Not later than January
1, 1995, the Secretary of Health and Human Services (in
this subsection referred to as the ‘‘Secretary’’) shall sub-
mit a proposal to the Congress that provides for revisions
to the payment method to be applied in years beginning
with 1996 for organizations with a risk-sharing contract
under section 1876(g) of the Social Security Act.
‘‘(B) In proposing the revisions required under sub-
paragraph (A) the Secretary shall consider—
‘‘(i) the difference in costs associated with med-
icare beneficiaries with differing health status and
demographic characteristics; and
‘‘(ii) the effects of using alternative geographic
classifications on the determinations of costs associ-
ated with beneficiaries residing in different areas.
‘‘(2) Not later than 3 months after the date of sub-
mittal of the proposal made pursuant to paragraph (1),
the Comptroller General shall review the proposal and
shall report to Congress on the appropriateness of the pro-
posed modifications.’’.
(c) MISCELLANEOUS
AND
TECHNICAL
CORREC-
TIONS.—(1) 
Section 
1876(a)(3) 
(42 
U.S.C.
1395mm(a)(3)) is amended by striking ‘‘subsection
337
(c)(7)’’ and inserting ‘‘subsections (c)(2)(B)(ii) and
(c)(7)’’.
(2) Section 4204(c)(3) of OBRA–1990 is amended
by striking ‘‘for 1991’’ and inserting ‘‘for years beginning
with 1991’’.
(3) Section 4204(d)(2) of OBRA–1990 is amended
by striking ‘‘amendment’’ and inserting ‘‘amendments’’.
(4) 
Section 
1876(a)(1)(E)(ii)(I) 
(42 
U.S.C.
1395mm(a)(1)(E)(ii)(I)) is amended by striking the
comma after ‘‘contributed to’’.
(5) Section 4204(e)(2) of OBRA–1990 is amended
by striking ‘‘(which has a risk-sharing contract under sec-
tion 1876 of the Social Security Act)’’.
(6) Section 4204(f)(4) of OBRA–1990 is amended by
striking ‘‘final’’.
(7) 
Section 
1862(b)(3)(C) 
(42 
U.S.C.
1395y(b)(3)(C)) is amended—
(A) in the heading, by striking ‘‘PLAN’’ and in-
serting ‘‘PLAN OR A LARGE GROUP HEALTH PLAN’’;
(B) by striking ‘‘group health plan’’ and insert-
ing ‘‘group health plan or a large group health
plan’’;
(C) by striking ‘‘, unless such incentive is also
offered to all individuals who are eligible for cov-
erage under the plan’’; and
338
(D) by striking ‘‘the first sentence of subsection
(a) and other than subsection (b)’’ and inserting
‘‘subsections (a) and (b)’’.
(8) The amendments made by this subsection shall
take effect as if included in the enactment of OBRA–1990.
SEC. 5083. MISCELLANEOUS AND TECHNICAL CORREC-
TIONS.
(a) SURVEY AND CERTIFICATION REQUIREMENTS.—
(1) Section 1864 (42 U.S.C. 1395aa) is amended—
(A) in subsection (e), by striking ‘‘title’’ and in-
serting ‘‘title (other than any fee relating to section
353 of the Public Health Service Act)’’; and
(B) in the first sentence of subsection (a), by
striking ‘‘1861(s) or’’ and all that follows through
‘‘Service Act,’’ and inserting ‘‘1861(s),’’.
(2) An agreement made by the Secretary of Health
and Human Services with a State under section 1864(a)
of the Social Security Act may include an agreement that
the services of the State health agency or other appro-
priate State agency (or the appropriate local agencies) will
be utilized by the Secretary for the purpose of determining
whether a laboratory meets the requirements of section
353 of the Public Health Service Act.
(b) OTHER MISCELLANEOUS AND TECHNICAL PRO-
VISIONS.—(1) Section 1833 (42 U.S.C. 1395l) is amended
339
by redesignating the subsection (r) added by section
4206(b)(2) of OBRA–1990 as subsection (s).
(2) Section 1866(f)(1) (42 U.S.C. 1395cc(f)(1)) is
amended by striking ‘‘1833(r)’’ and inserting ‘‘1833(s)’’.
(3) Section 1861(s)(2) (42 U.S.C. 1395x(s)(2)) is
amended by moving subparagraph (O), as redesignated by
section 5070(f)(7)(B)(iii)(II) of this subtitle, two ems to
the left.
(4) 
Section 
1881(b)(1)(C) 
(42 
U.S.C.
1395rr(b)(1)(C)) is amended by striking ‘‘1861(s)(2)(Q)’’
and inserting ‘‘1861(s)(2)(P)’’.
(5) Section 4201(d)(2) of OBRA–1990 is amended
by striking ‘‘(B) by striking’’, ‘‘(C) by striking’’, and ‘‘(3)
by adding’’ and inserting ‘‘(i) by striking’’, ‘‘(ii) by strik-
ing’’, and ‘‘(B) by adding’’, respectively.
(6)(A) Section 4207(a)(1) of OBRA–1990 is amend-
ed by adding closing quotation marks and a period after
‘‘such review.’’.
(B) Section 4207(a)(4) of OBRA–1990 is amended
by striking ‘‘this subsection’’ and inserting ‘‘paragraphs
(2) and (3)’’.
(C) Section 4207(b)(1) of OBRA–1990 is amended
by striking ‘‘section 3(7)’’ and inserting ‘‘section
601(a)(1)’’.
(7) Section 4202 of OBRA–1990 is amended—
340
(A) in subsection (b)(1)(A), by striking ‘‘home
hemodialysis staff assistant’’ and inserting ‘‘quali-
fied home hemodialysis staff assistant (as described
in subsection (d))’’;
(B) in subsection (b)(2)(B)(ii)(I), by striking
‘‘(as adjusted to reflect differences in area wage lev-
els)’’;
(C) 
in 
subsection 
(c)(1)(A), 
by 
striking
‘‘skilled’’; and
(D) 
in 
subsection 
(c)(1)(E), 
by 
striking
‘‘(b)(4)’’ and inserting ‘‘(b)(2)’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect as if included in the enact-
ment of OBRA–1990.
CHAPTER 3—PROVISIONS RELATING TO
MEDICARE 
SUPPLEMENTAL 
INSUR-
ANCE POLICIES
SEC. 5091. STANDARDS FOR MEDICARE SUPPLEMENTAL IN-
SURANCE POLICIES.
(a) SIMPLIFICATION OF MEDICARE SUPPLEMENTAL
POLICIES.—
(1) Section 4351 of OBRA–1990 is amended by
striking ‘‘(a) IN GENERAL.—’’.
(2) Section 1882(p) (42 U.S.C. 1395ss(p)) is
amended—
341
(A) in paragraph (1)(A)—
(i) by striking ‘‘promulgates’’ and in-
serting ‘‘changes the revised NAIC Model
Regulation (described in subsection (m)) to
incorporate’’,
(ii) by striking ‘‘(such limitations, lan-
guage, definitions, format, and standards
referred to collectively in this subsection as
‘NAIC standards’),’’, and
(iii) by striking ‘‘included a reference
to the NAIC standards’’ and inserting
‘‘were a reference to the revised NAIC
Model Regulation as changed under this
subparagraph (such changed regulation re-
ferred to in this section as the ‘1991 NAIC
Model Regulation’)’’;
(B) in paragraph (1)(B)—
(i) by striking ‘‘promulgate NAIC
standards’’ 
and 
inserting 
‘‘make 
the
changes in the revised NAIC Model Regu-
lation’’,
(ii) by striking ‘‘limitations, language,
definitions, format, and standards de-
scribed in clauses (i) through (iv) of such
subparagraph (in this subsection referred
342
to collectively as ‘Federal standards’)’’ and
inserting ‘‘a regulation’’, and
(iii) by striking ‘‘included a reference
to the Federal standards’’ and inserting
‘‘were a reference to the revised NAIC
Model Regulation as changed by the Sec-
retary under this subparagraph (such
changed regulation referred to in this sec-
tion as the ‘1991 Federal Regulation’)’’;
(C) in paragraph (1)(C)(i), by striking
‘‘NAIC standards or the Federal standards’’
and inserting ‘‘1991 NAIC Model Regulation or
1991 Federal Regulation’’;
(D) in paragraphs (1)(C)(ii)(I), (1)(E),
(2), and (9)(B), by striking ‘‘NAIC or Federal
standards’’ and inserting ‘‘1991 NAIC Model
Regulation or 1991 Federal Regulation’’;
(E) in paragraph (2)(C), by striking
‘‘(5)(B)’’ and inserting ‘‘(4)(B)’’;
(F) in paragraph (4)(A)(i), by inserting
‘‘or paragraph (6)’’ after ‘‘(B)’’;
(G) in paragraph (4), by striking ‘‘applica-
ble standards’’ each place it appears and insert-
ing ‘‘applicable 1991 NAIC Model Regulation
or 1991 Federal Regulation’’;
343
(H) in paragraph (6), by striking ‘‘in re-
gard to the limitation of benefits described in
paragraph (4)’’ and inserting ‘‘described in
clauses (i) through (iii) of paragraph (1)(A)’’;
(I) in paragraph (7), by striking ‘‘policy-
holder’’ and inserting ‘‘policyholders’’;
(J) in paragraph (8), by striking ‘‘after the
effective date of the NAIC or Federal standards
with respect to the policy, in violation of the
previous requirements of this subsection’’ and
inserting ‘‘on and after the effective date speci-
fied in paragraph (1)(C) (but subject to para-
graph (10)), in violation of the applicable 1991
NAIC Model Regulation or 1991 Federal Regu-
lation insofar as such regulation relates to the
requirements of subsection (o) or (q) or clause
(i), (ii), or (iii) of paragraph (1)(A)’’;
(K) in paragraph (9), by adding at the end
the following new subparagraph:
‘‘(D) Subject to paragraph (10), this paragraph shall
apply to sales of policies occurring on or after the effective
date specified in paragraph (1)(C).’’; and
(L) in paragraph (10), by striking ‘‘this
subsection’’ 
and 
inserting 
‘‘paragraph
(1)(A)(i)’’.
344
(b) GUARANTEED RENEWABILITY.—Section 1882(q)
(42 U.S.C. 1395ss(q)) is amended—
(1) in paragraph (2), by striking ‘‘paragraph
(2)’’ and inserting ‘‘paragraph (4)’’, and
(2) in paragraph (4), by striking ‘‘the succeed-
ing issuer’’ and inserting ‘‘issuer of the replacement
policy’’.
(c) ENFORCEMENT OF STANDARDS.—
(1) 
Section 
1882(a)(2) 
(42 
U.S.C.
1395ss(a)(2)) is amended—
(A) in subparagraph (A), by striking
‘‘NAIC standards or the Federal standards’’
and inserting ‘‘1991 NAIC Model Regulation or
1991 Federal Regulation’’, and
(B) by striking ‘‘after the effective date of
the NAIC or Federal standards with respect to
the policy’’ and inserting ‘‘on and after the ef-
fective date specified in subsection (p)(1)(C)’’.
(2) The sentence in section 1882(b)(1) added
by section 4353(c)(5) of OBRA–1990 is amended—
(A) by striking ‘‘The report’’ and inserting
‘‘Each report’’,
(B) by inserting ‘‘and requirements’’ after
‘‘standards’’,
345
(C) by striking ‘‘and’’ after ‘‘compliance,’’,
and
(D) by striking the comma after ‘‘Commis-
sioners’’.
(3) 
Section 
1882(g)(2)(B) 
(42 
U.S.C.
1395ss(g)(2)(B)) is amended by striking ‘‘Panel’’
and inserting ‘‘Secretary’’.
(4) 
Section 
1882(b)(1) 
(42 
U.S.C.
1395ss(b)(1)) is amended by striking ‘‘the the Sec-
retary’’ and inserting ‘‘the Secretary’’.
(d) PREVENTING DUPLICATION.—
(1) 
Section 
1882(d)(3)(A) 
(42 
U.S.C.
1395ss(d)(3)(A)) is amended—
(A) by amending the first sentence to read
as follows:
‘‘(i) It is unlawful for a person to sell or issue to an
individual entitled to benefits under part A or enrolled
under part B of this title—
‘‘(I) a health insurance policy with knowledge
that the policy duplicates health benefits to which
the individual is otherwise entitled under this title or
title XIX,
‘‘(II) a medicare supplemental policy with
knowledge that the individual is entitled to benefits
under another medicare supplemental policy, or
346
‘‘(III) a health insurance policy (other than a
medicare supplemental policy) with knowledge that
the policy duplicates health benefits to which the in-
dividual is otherwise entitled, other than benefits to
which the individual is entitled under a requirement
of State or Federal law.’’;
(B) by designating the second sentence as
clause (ii) and, in such clause, by striking ‘‘the
previous sentence’’ and inserting ‘‘clause (i)’’;
(C) by designating the third sentence as
clause (iii) and, in such clause—
(i) by striking ‘‘the previous sentence’’
and inserting ‘‘clause (i) with respect to
the sale of a medicare supplemental pol-
icy’’, and
(ii) by striking ‘‘and the statement’’
and all that follows up to the period at the
end; and
(D) by striking the last sentence.
(2) 
Section 
1882(d)(3)(B) 
(42 
U.S.C.
1395ss(d)(3)(B)) is amended—
(A) in clause (ii)(II), by striking ‘‘65 years
of age or older’’,
(B) in clause (iii)(I), by striking ‘‘another
medicare’’ and inserting ‘‘a medicare’’,
347
(C) in clause (iii)(I), by striking ‘‘such a
policy’’ and inserting ‘‘a medicare supplemental
policy’’,
(D) in clause (iii)(II), by striking ‘‘another
policy’’ and inserting ‘‘a medicare supplemental
policy’’, and
(E) by amending subclause (III) of clause
(iii) to read as follows:
‘‘(III) If the statement required by clause (i) is ob-
tained and indicates that the individual is entitled to any
medical assistance under title XIX, the sale of the policy
is not in violation of clause (i) (insofar as such clause re-
lates to such medical assistance), if a State medicaid plan
under such title pays the premiums for the policy, or, in
the case of a qualified medicare beneficiary described in
section 1905(p)(1), if the State pays less than the full
amount of medicare cost-sharing as described in subpara-
graphs (B), (C), and (D) of section 1905(p)(3) for such
individual.’’.
(3)(A) 
Section 
1882(d)(3)(C) 
(42 
U.S.C.
1395ss(d)(3)(C)) is amended—
(i) by striking ‘‘the selling’’ and inserting
‘‘(i) the sale or issuance’’, and
(ii) by inserting before the period at the
end the following: ‘‘, (ii) the sale or issuance of
348
a policy or plan described in subparagraph
(A)(i)(I) (other than a medicare supplemental
policy to an individual entitled to any medical
assistance under title XIX) under which all the
benefits are fully payable directly to or on be-
half of the individual without regard to other
health benefit coverage of the individual but
only if (for policies sold or issued more than 60
days after the date the statements are pub-
lished or promulgated under subparagraph (D))
there is disclosed in a prominent manner as
part of (or together with) the application the
applicable statement (specified under subpara-
graph (D)) of the extent to which benefits pay-
able under the policy or plan duplicate benefits
under this title, or (iii) the sale or issuance of
a policy or plan described in subparagraph
(A)(i)(III) under which all the benefits are fully
payable directly to or on behalf of the individual
without regard to other health benefit coverage
of the individual’’.
(B) 
Section 
1882(d)(3) 
(42 
U.S.C.
1395ss(d)(3)) is amended by adding at the end the
following:
‘‘(D)(i) If—
349
‘‘(I) within the 90-day period beginning on the
date of the enactment of this subparagraph, the Na-
tional Association of Insurance Commissioners devel-
ops (after consultation with consumer and insurance
industry representatives) and submits to the Sec-
retary a statement for each of the types of health in-
surance policies (other than medicare supplemental
policies and including, as separate types of policies,
policies paying directly to the beneficiary fixed, cash
benefits) which are sold to persons entitled to health
benefits under this title, of the extent to which bene-
fits payable under the policy or plan duplicate bene-
fits under this title, and
‘‘(II) the Secretary approves all the statements
submitted as meeting the requirements of subclause
(I),
each such statement shall be (for purposes of subpara-
graph (C)) the statement specified under this subpara-
graph for the type of policy involved. The Secretary shall
review and approve (or disapprove) all the statements sub-
mitted under subclause (I) within 30 days after the date
of their submittal. Upon approval of such statements, the
Secretary shall publish such statements.
‘‘(ii) If the Secretary does not approve the statements
under clause (i) or the statements are not submitted with-
350
in the 90-day period specified in such clause, the Secretary
shall promulgate (after consultation with consumer and
insurance industry representatives and not later than 90
days after the date of disapproval or the end of such 90-
day period (as the case may be)) a statement for each
of the types of health insurance policies (other than medi-
care supplemental policies and including, as separate types
of policies, policies paying directly to the beneficiary fixed,
cash benefits) which are sold to persons entitled to health
benefits under this title, of the extent to which benefits
payable under the policy or plan duplicate benefits under
this title, and each such statement shall be (for purposes
of subparagraph (C)) the statement specified under this
subparagraph for the type of policy involved.’’.
(C) The requirement of a disclosure under sec-
tion 1882(d)(3)(C)(ii) of the Social Security Act
shall not apply to an application made for a policy
or plan before 60 days after the date of the Sec-
retary of Health and Human Services publishes or
promulgates all the statements under section
1882(d)(3)(D) of such Act.
(4) Subparagraphs (A) and (B) of section
1882(q)(5) (42 U.S.C. 1395ss(q)(5)(A)) are amend-
ed by striking ‘‘of the Social Security Act’’.
(e) LOSS RATIOS AND REFUNDS OF PREMIUMS.—
352
and shall be based only on aggregate benefits
provided and premiums collected under such
policies after the date specified in section
5091(m)(4) of the Omnibus Budget Reconcili-
ation Act of 1993.’’;
(F) in the first sentence of paragraph
(2)(A), by striking ‘‘by policy number’’ and in-
serting ‘‘by standard package’’;
(G) by striking the second sentence of
paragraph (2)(A) and inserting the following:
‘‘Paragraph (1)(B) shall not apply to a policy
until 12 months following issue.’’;
(H) in the last sentence of paragraph
(2)(A), by striking ‘‘in order’’ and all that fol-
lows through ‘‘are effective’’;
(I) by adding at the end of paragraph
(2)(A), the following new sentence: ‘‘In the case
of a policy issued before the date specified in
subsection (p)(1)(C), paragraph (1)(B) shall
not apply until 1 year after the date specified
in section 5091(m)(4) of the Omnibus Budget
Reconciliation Act of 1993.’’;
(J) in paragraph (2), by striking ‘‘policy
year’’ each place it appears and inserting ‘‘cal-
endar year’’;
353
(K) in paragraph (4), by striking ‘‘Feb-
ruary’’, ‘‘disllowance’’, ‘‘loss-ratios’’ each place
it appears, and ‘‘loss-ratio’’ and inserting ‘‘Oc-
tober’’, ‘‘disallowance’’, ‘‘loss ratios’’, and ‘‘loss
ratio’’, respectively;
(L) in paragraph (6)(A), by striking ‘‘is-
sues a policy in violation of the loss ratio re-
quirements of this subsection’’ and ‘‘such viola-
tion’’ and inserting ‘‘fails to provide refunds or
credits as required in paragraph (1)(B)’’ and
‘‘policy issued for which such failure occurred’’,
respectively; and
(M) in paragraph (6)(B), by striking ‘‘to
policyholders’’ and inserting ‘‘to the policy-
holder or, in the case of a group policy, to the
certificate holder’’.
(2) 
Section 
1882(b)(1) 
(42 
U.S.C.
1395ss(b)(1)) is amended, in the matter after sub-
paragraph (H), by striking ‘‘subsection (F)’’ and in-
serting ‘‘subparagraph (F)’’.
(3) Section 4355(d) of OBRA–1990 is amended
by striking ‘‘sold or issued’’ and all that follows and
inserting ‘‘issued or renewed (or otherwise providing
coverage after the date described in section
1882(p)(1)(C) of the Social Security Act) on or after
354
the date specified in section 1882(p)(1)(C) of such
Act.’’.
(f) TREATMENT OF HMO’S.—
(1) 
Section 
1882(g)(1) 
(42 
U.S.C.
1395ss(g)(1)) is amended by striking ‘‘a health
maintenance organization or other direct service or-
ganization’’ and all that follows through ‘‘1833’’ and
inserting ‘‘an eligible organization (as defined in sec-
tion 1876(b)) if the policy or plan provides benefits
pursuant to a contract under section 1876 or an ap-
proved demonstration project described in section
603(c) of the Social Security Amendments of 1983,
section 2355 of the Deficit Reduction Act of 1984,
or section 9412(b) of the Omnibus Budget Reconcili-
ation Act of 1986 or, during the period beginning on
the date specified in subsection (p)(1)(C) and ending
on December 31, 1994, a policy or plan of an orga-
nization if the policy or plan provides benefits pursu-
ant to an agreement under section 1833(a)(1)(A)’’.
(2) Section 4356(b) of OBRA–1990 is amended
by striking ‘‘on the date of the enactment of this
Act’’ and inserting ‘‘on the date specified in section
1882(p)(1)(C) of the Social Security Act’’.
(g) PRE-EXISTING CONDITION LIMITATIONS.—Sec-
tion 1882(s) (42 U.S.C. 1395ss(s)) is amended—
355
(1) in paragraph (2)(A), by striking ‘‘for which
an application is submitted’’ and inserting ‘‘in the
case of an individual for whom an application is sub-
mitted prior to or’’,
(2) in paragraph (2)(A), by striking ‘‘in which
the individual (who is 65 years of age or older) first
is enrolled for benefits under part B’’ and inserting
‘‘as of the first day on which the individual is 65
years of age or older and is enrolled for benefits
under part B’’, and
(3) in paragraph (2)(B), by striking ‘‘before it’’
and inserting ‘‘before the policy’’.
(h) MEDICARE SELECT POLICIES.—
(1) Section 1882(t) (42 U.S.C. 1395ss(t)) is
amended—
(A) in paragraph (1), by inserting ‘‘medi-
care supplemental’’ after ‘‘If a’’,
(B) in paragraph (1), by striking ‘‘NAIC
Model Standards’’ and inserting ‘‘1991 NAIC
Model Regulation or 1991 Federal Regulation’’,
(C) in paragraph (1)(A), by inserting ‘‘or
agreements’’ after ‘‘contracts’’,
(D) in subparagraphs (E)(i) and (F) of
paragraph (1), by striking ‘‘NAIC standards’’
and inserting ‘‘standards in the 1991 NAIC
356
Model Regulation or 1991 Federal Regulation’’,
and
(E) in paragraph (2), by inserting ‘‘the is-
suer’’ before ‘‘is subject to a civil money pen-
alty’’.
(2) Section 1154(a)(4)(B) (42 U.S.C. 1320c–
3(a)(4)(B)) is amended—
(A) by inserting ‘‘that is’’ after ‘‘(or’’, and
(B) by striking ‘‘1882(t)’’ and inserting
‘‘1882(t)(3)’’.
(i) HEALTH
INSURANCE
COUNSELING.—Section
4360 of OBRA–1990 is amended—
(1) in subsection (b)(2)(A)(ii), by striking
‘‘Act’’ and inserting ‘‘Act)’’;
(2) in subsection (b)(2)(D), by striking ‘‘serv-
ices’’ and inserting ‘‘counseling’’;
(3) in subsection (b)(2)(I), by striking ‘‘assist-
ance’’ and inserting ‘‘referrals’’;
(4) in subsection (c)(1), by striking ‘‘and that
such activities will continue to be maintained at such
level’’;
(5) in subsection (d)(3), by striking ‘‘to the
rural areas’’ and inserting ‘‘eligible individuals resid-
ing in rural areas’’;
(6) in subsection (e)—
357
(A) by striking ‘‘subsection (c) or (d)’’ and
inserting ‘‘this section’’,
(B) by striking ‘‘and annually thereafter,
issue an annual report’’ and inserting ‘‘and an-
nually thereafter during the period of the grant,
issue a report’’, and
(C) in paragraph (1), by striking ‘‘State-
wide;’’,
(7) in subsection (f), by striking paragraph (2)
and by redesignating paragraphs (3) through (5) as
paragraphs (2) through (4), respectively; and
(8) by redesignating the second subsection (f)
(relating to authorization of appropriations for
grants) as subsection (g).
(j) TELEPHONE INFORMATION SYSTEM.—
(1) Section 1804 (42 U.S.C. 1395b–2) is
amended—
(A) by adding at the end of the heading
the following: ‘‘; MEDICARE AND MEDIGAP IN-
FORMATION’’,
(B) by inserting ‘‘(a)’’ after ‘‘1804.’’, and
(C) by adding at the end the following new
subsection:
358
‘‘(b) The Secretary shall provide information via a
toll-free telephone number on the programs under this
title.’’.
(2) Section 1882(f) (42 U.S.C. 1395ss(f)) is
amended by adding at the end the following new
paragraph:
‘‘(3) The Secretary shall provide information via a
toll-free telephone number on medicare supplemental poli-
cies (including the relationship of State programs under
title XIX to such policies).’’.
(3) Section 1889 (42 U.S.C. 1395zz) is re-
pealed.
(k) MAILING OF POLICIES.—Section 1882(d)(4) (42
U.S.C. 1395ss(d)(4)) is amended—
(1) in subparagraph (D), by striking ‘‘, if such
policy’’ and all that follows up to the period at the
end, and
(2) by adding at the end the following new sub-
paragraph:
‘‘(E) Subparagraph (A) shall not apply in the case
of an issuer who mails or causes to be mailed a policy,
certificate, or other matter solely to comply with the re-
quirements of subsection (q).’’.
359
(l) EFFECTIVE DATE.—The amendments made by
this section shall be effective as if included in the enact-
ment of OBRA–1990; except that—
(1) the amendments made by subsection (d)(1)
shall take effect on the date of the enactment of this
Act, but no penalty shall be imposed under section
1882(d)(3)(A) of the Social Security Act (for an ac-
tion occurring after the effective date of the amend-
ments made by section 4354 of OBRA–1990 and be-
fore the date of the enactment of this Act) with re-
spect to the sale or issuance of a policy which is not
unlawful under section 1882(d)(3)(A)(i)(II) of the
Social Security Act (as amended by this section);
(2) the amendments made by subsection
(d)(2)(A) and by subparagraphs (A), (B), and (E)
of subsection (e)(1) shall be effective on the date
specified in subsection (m)(4); and
(3) the amendment made by subsection (g)(2)
shall take effect on January 1, 1994, and shall apply
to individuals who attain 65 years of age or older on
or after the effective date of section 1882(s)(2) of
the Social Security Act (and, in the case of individ-
uals who attained 65 years of age after such effec-
tive date and before January 1, 1994, and who were
not covered under such section before January 1,
360
1994, the 6-month period specified in that section
shall begin January 1, 1994).
(m) TRANSITION PROVISIONS.—
(1) IN GENERAL.—If the Secretary of Health
and Human Services identifies a State as requiring
a change to its statutes or regulations to conform its
regulatory program to the changes made by this sec-
tion, the State regulatory program shall not be con-
sidered to be out of compliance with the require-
ments of section 1882 of the Social Security Act due
solely to failure to make such change until the date
specified in paragraph (4).
(2) NAIC STANDARDS.—If, within 6 months
after the date of the enactment of this Act, the Na-
tional Association of Insurance Commissioners (in
this subsection referred to as the ‘‘NAIC’’) modifies
its 1991 NAIC Model Regulation (adopted in July
1991) to conform to the amendments made by this
section and to delete from section 15C the exception
which begins with ‘‘unless’’, such modifications shall
be considered to be part of that Regulation for the
purposes of section 1882 of the Social Security Act.
(3) SECRETARY
STANDARDS.—If the NAIC
does not make the modifications described in para-
graph (2) within the period specified in such para-
361
graph, the Secretary of Health and Human Services
shall make the modifications described in such para-
graph and such modifications shall be considered to
be part of that Regulation for the purposes of sec-
tion 1882 of the Social Security Act.
(4) DATE SPECIFIED.—
(A) IN
GENERAL.—Subject to subpara-
graph (B), the date specified in this paragraph
for a State is the earlier of—
(i) the date the State changes its stat-
utes or regulations to conform its regu-
latory program to the changes made by
this section, or
(ii) 1 year after the date the NAIC or
the Secretary first makes the modifications
under paragraph (2) or (3), respectively.
(B) ADDITIONAL LEGISLATIVE ACTION RE-
QUIRED.—In the case of a State which the Sec-
retary identifies as—
(i) requiring State legislation (other
than legislation appropriating funds) to
conform its regulatory program to the
changes made in this section, but
(ii) having a legislature which is not
scheduled to meet in 1994 in a legislative
362
session in which such legislation may be
considered,
the date specified in this paragraph is the first
day of the first calendar quarter beginning after
the close of the first legislative session of the
State legislature that begins on or after Janu-
ary 1, 1994. For purposes of the previous sen-
tence, in the case of a State that has a 2-year
legislative session, each year of such session
shall be deemed to be a separate regular session
of the State legislature.
Subtitle B—Medicaid Program and
Other Health Care Provisions
SEC. 5100. REFERENCES IN SUBTITLE; TABLE OF CON-
TENTS OF SUBTITLE.
(a) AMENDMENTS TO SOCIAL SECURITY ACT.—Ex-
cept as otherwise specifically provided, whenever in this
subtitle an amendment is expressed in terms of an amend-
ment to or repeal of a section or other provision, the ref-
erence shall be considered to be made to that section or
other provision of the Social Security Act.
(b) REFERENCES TO OBRA.—In this subtitle, the
terms ‘‘OBRA–1986’’, ‘‘OBRA–1987’’, ‘‘OBRA–1989’’,
and ‘‘OBRA–1990’’ refer to the Omnibus Budget Rec-
onciliation Act of 1986 (Public Law 99–509), the Omni-
363
bus Budget Reconciliation Act of 1987 (Public Law 100–
203), the Omnibus Budget Reconciliation Act of 1989
(Public Law 101–239), and the Omnibus Budget Rec-
onciliation Act of 1990 (Public Law 101–508), respec-
tively.
(c) TABLE OF CONTENTS OF SUBTITLE.—The table
of contents of this subtitle is as follows:
Subtitle B—Medicaid Program and Other Health Care Provisions
Sec. 5100. References in subtitle; table of contents of subtitle.
CHAPTER 1—MEDICAID PROGRAM
SUBCHAPTER A—PROGRAM SAVINGS PROVISIONS
PART I—REPEAL OF MANDATE
Sec. 5101. Personal care services furnished outside the home as optional bene-
fit.
PART II—OUTPATIENT PRESCRIPTION DRUGS
Sec. 5106. Permitting prescription drug formularies under State plans.
Sec. 5107. Elimination of special exemption from prior authorization for new
drugs.
Sec. 5108. Technical corrections relating to section 4401 of OBRA–1990.
PART III—RESTRICTIONS ON DIVESTITURE OF ASSETS AND ESTATE
RECOVERY
Sec. 5111. Transfer of assets.
Sec. 5112. Medicaid estate recoveries.
Sec. 5113. Closing loophole permitting wealthy individuals to qualify for medic-
aid.
PART IV—IMPROVEMENT IN IDENTIFICATION AND COLLECTION OF THIRD
PARTY PAYMENTS
Sec. 5116. Liability of third parties to pay for care and services.
Sec. 5117. Health Coverage Clearinghouse.
‘‘TITLE XXI—HEALTH COVERAGE CLEARINGHOUSE
‘‘Sec. 2101. Establishment of clearinghouse.
‘‘Sec. 2102. Provision of information.
‘‘Sec. 2103. Requirement that employers furnish information.
‘‘Sec. 2104. Data bank.’’.
Sec. 5118. Medical child support.
364
PART V—ASSURING PROPER PAYMENTS TO DISPROPORTIONATE SHARE
HOSPITALS
Sec. 5121. Assuring proper payments to disproportionate share hospitals.
SUBCHAPTER B—MISCELLANEOUS PROVISIONS
PART I—ANTI-FRAUD AND ABUSE PROVISIONS
Sec. 5131. Application of medicare rules limiting certain physician referrals.
Sec. 5132. Intermediate sanctions for kickback violations.
Sec. 5133. Requiring maintenance of effort for State medicaid fraud control
units.
PART II—MANAGED CARE PROVISIONS
Sec. 5135. Medicaid managed care anti-fraud provisions.
Sec. 5136. Clarification of treatment of HMO enrollees in computing the medic-
aid inpatient utilization rate in qualifying hospitals as dis-
proportionate share hospitals.
Sec. 5137. Extension of period of applicability of enrollment mix requirement
to certain health maintenance organizations providing services
under Dayton Area Health Plan.
Sec. 5138. Extension of medicaid waiver for Tennessee Primary Care Network.
Sec. 5139. Waiver of application of medicaid enrollment mix requirement to
District of Columbia Chartered Health Plan, Inc.
Sec. 5140. Extension of Minnesota Prepaid Medicaid Demonstration Project.
PART III—EMERGENCY SERVICES TO UNDOCUMENTED ALIENS
Sec. 5141. Increase in Federal financial participation for emergency medical as-
sistance to undocumented aliens.
Sec. 5142. Limiting Federal medicaid matching payment to bona fide emer-
gency services for undocumented aliens.
PART IV—MISCELLANEOUS PROVISIONS
Sec. 5144. Increase in limit on Federal medicaid matching payments to Puerto
Rico and other territories.
Sec. 5145. Criteria for making determinations of denial of Federal medicaid
matching payments to States.
Sec. 5146. Renewal of unfunded demonstration project for low-income pregnant
women and children.
Sec. 5147. Optional medicaid coverage of TB-related services for certain
TB-infected individuals.
Sec. 5148. Application of mammography certification requirements under the
medicaid program.
Sec. 5149. Removal of sunset on extension of eligibility for working families.
Sec. 5150. Extension of moratorium on treatment of certain facilities as insti-
tutions for mental diseases.
Sec. 5150A. Treatment of certain clinics as federally-qualified health centers.
Sec. 5150B. Nursing home reform.
SUBCHAPTER C—MISCELLANEOUS AND TECHNICAL CORRECTIONS RELATING
TO OBRA–1990
Sec. 5151. Effective date.
365
Sec. 5152. Corrections relating to section 4402 (enrollment under group health
plans).
Sec. 5153. Corrections relating to section 4501 (low-income medicare bene-
ficiaries).
Sec. 5154. Corrections relating to section 4601 (child health).
Sec. 5155. Corrections relating to section 4602 (outreach locations).
Sec. 5156. Corrections relating to section 4604 (payment for hospital services
for children under 6 years of age).
Sec. 5157. Corrections relating to section 4703 (payment adjustments for dis-
proportionate share hospitals).
Sec. 5158. Corrections relating to section 4704 (Federally-qualified health cen-
ters).
Sec. 5159. Corrections relating to section 4708 (substitute physicians).
Sec. 5160. Corrections relating to section 4711 (home and community care for
frail elderly).
Sec. 5161. Corrections relating to section 4712 (community supported living
arrangements services).
Sec. 5162. Correction relating to section 4713 (COBRA continuation coverage).
Sec. 5163. Correction relating to section 4716 (medicaid transition for family
assistance).
Sec. 5164. Corrections relating to section 4723 (medicaid spenddown option).
Sec. 5165. Corrections relating to section 4724 (optional State disability deter-
minations).
Sec. 5166. Correction relating to section 4732 (special rules for health mainte-
nance organizations).
Sec. 5167. Corrections relating to section 4741 (home and community-based
waivers).
Sec. 5168. Corrections relating to section 4744 (frail elderly waivers).
Sec. 5169. Corrections relating to section 4747 (coverage of HIV-positive indi-
viduals).
Sec. 5170. Correction relating to section 4751 (advance directives).
Sec. 5171. Corrections relating to section 4752 (physicians’ services).
Sec. 5172. Corrections relating to section 4801 (nursing home reform).
Sec. 5173. Other technical corrections.
Sec. 5174. Corrections to designations of new provisions.
CHAPTER 2—UNIVERSAL ACCESS TO CHILDHOOD IMMUNIZATIONS
Sec. 5181. Establishment of entitlement and monitoring programs with respect
to childhood immunizations.
‘‘Subtitle 3—Entitlement and Monitoring Programs With Respect to
Childhood Immunizations
‘‘PART A—ENTITLEMENT PROGRAM
‘‘Sec. 2151. Delivery to States of sufficient quantities of pediatric vaccines.
‘‘Sec. 2152. Entitlements.
‘‘Sec. 2153. Voluntary participation of health care providers.
‘‘Sec. 2154. Intrastate distribution of pediatric vaccines.
‘‘Sec. 2155. General provisions.
‘‘Sec. 2156. State option regarding immunization of additional categories
of children.
‘‘Sec. 2157. State application for vaccines.
‘‘Sec. 2158. Contracts with manufacturers of pediatric vaccines.
‘‘Sec. 2159. Certain administrative variations.
366
‘‘Sec. 2160. List of pediatric vaccines; schedule for administration.
‘‘Sec. 2161. Childhood Immunization Trust Fund.
‘‘Sec. 2162. Definitions.
‘‘Sec. 2163. Termination of program.
‘‘PART B—NATIONAL SYSTEM FOR MONITORING IMMUNIZATION STATUS OF
CHILDREN
‘‘Sec. 2171. Formula grants for State registries with respect to monitor-
ing.
‘‘Sec. 2172. Registry data.
‘‘Sec. 2173. General provisions.
‘‘Sec. 2174. Application for grant.
‘‘Sec. 2175. Determination of amount of allotment.
‘‘Sec. 2176. Definitions.
‘‘Sec. 2177. Authorization of appropriations.
‘‘PART C—FUNDING FOR OTHER PURPOSES REGARDING CHILDHOOD
IMMUNIZATIONS
‘‘Sec. 2181. Grants regarding Year 2000 health objectives.
Sec. 5182. National Vaccine Injury Compensation Program amendments.
Sec. 5183. Medicaid immunization provisions.
Sec. 5184. Availability of medicaid payments for childhood vaccine replacement
programs.
Sec. 5185. Healthy start for infants.
Sec. 5186. Increase in authorization of appropriations for the Maternal and
Child Health Services Block Grant Program.
Sec. 5187. Miscellaneous technical corrections to Public Health Service Act pro-
visions.
CHAPTER 1—MEDICAID PROGRAM
Subchapter A—Program Savings Provisions
PART I—REPEAL OF MANDATE
SEC. 5101. PERSONAL CARE SERVICES FURNISHED OUT-
SIDE THE HOME AS OPTIONAL BENEFIT.
(a) IN
GENERAL.—Section 1905(a) (42 U.S.C.
1396d(a)), as amended by section 5174(c)(1), is further
amended—
(1) in paragraph (7), by striking ‘‘including
personal care services’’ and all that follows through
‘‘nursing facility’’;
367
(2) in paragraph (23), by striking ‘‘and’’ at the
end;
(3) by redesignating paragraph (24) as para-
graph (25); and
(4) by inserting after paragraph (23) the fol-
lowing new paragraph:
‘‘(24) personal care services furnished to an in-
dividual who is not an inpatient or resident of a
nursing facility that are (A) authorized by a physi-
cian for the individual in accordance with a plan of
treatment, (B) provided by an individual who is
qualified to provide such services and who is not a
member of the individual’s family, (C) supervised by
a registered nurse, and (D) furnished in a home or
other location; and’’.
(b) 
CONFORMING
AMENDMENTS.—(1) 
Section
1902(a)(10)(C)(iv) (42 U.S.C. 1396a(a)(10)(C)(iv)), as
amended by section 5174(c)(2)(A), is amended by striking
‘‘through (23)’’ and inserting ‘‘through (24)’’.
(2) Section 1902(j) (42 U.S.C. 1396a(j)), as amend-
ed by section 5174(c)(2)(B), is amended by striking
‘‘through (24)’’ and inserting ‘‘through (25)’’.
(c) EFFECTIVE DATE.—The amendments made by
subsections (a) and (b) shall take effect as if included in
the enactment of section 4721(a) of OBRA–90.
368
PART II—OUTPATIENT PRESCRIPTION DRUGS
SEC. 
5106. 
PERMITTING 
PRESCRIPTION 
DRUG
FORMULARIES UNDER STATE PLANS.
(a) ELIMINATION OF PROHIBITION AGAINST USE OF
FORMULARIES.—Paragraph (54) of section 1902(a)(54)
(42 U.S.C. 1396a(a)(54)) is amended to read as follows:
‘‘(54) in the case of a State plan that provides
medical assistance for covered outpatient drugs (as
defined in section 1927(k)), comply with the applica-
ble requirements of section 1927;’’.
(b) 
STANDARDS
FOR
FORMULARIES.—Section
1927(d) (42 U.S.C. 1396r–8(d)), as amended by sections
5107(a) and 5108(b)(4)(A)(iii), is amended—
(1) by adding at the end of paragraph (1) the
following new subparagraph:
‘‘(C) In the case of a State that establishes a
formulary in accordance with paragraph (5), the
State may exclude coverage of a covered outpatient
drug that is not included in the formulary.’’; and
(2) by inserting after paragraph (4) the follow-
ing new paragraph:
‘‘(5) REQUIREMENTS
FOR
FORMULARIES.—A
State may establish a formulary only if the following
requirements are met:
‘‘(A) The formulary is established by a
committee 
consisting 
of 
physicians, 
phar-
369
macists, and other appropriate individuals ap-
pointed by the Governor of the State (or, at the
option of the State, the State’s drug use review
board established under subsection (g)(3)).
‘‘(B) Except as provided in subparagraph
(C), the formulary includes the covered out-
patient drugs of any manufacturer which has
entered into and complies with an agreement
under subsection (a).
‘‘(C) The committee may exclude a covered
outpatient drug with respect to the treatment of
a specific disease or condition for an identified
population (if any) only if the committee finds,
based on the drug’s labeling (or, in the case of
a drug whose prescribed use is not approved
under the Federal Food, Drug, and Cosmetic
Act but is a medically accepted indication,
based on information from the appropriate com-
pendia described in subsection (k)(6)), that the
excluded drug does not have a significant, clini-
cally meaningful therapeutic advantage in terms
of safety, effectiveness, or clinical outcome of
such treatment for such population over other
drugs included in the formulary.
370
‘‘(D) With respect to a decision to exclude
a covered outpatient drug from the formulary
or a prescribed use of such a drug, the commit-
tee issues a written explanation of its decision
that is available to the public, unless the deci-
sion was made at a meeting of the committee
which was open to the public.
‘‘(E) The manufacturer of the drug, and
any person affected by the decision, may obtain
a reversal of the committee’s decision to exclude
a covered outpatient drug from the formulary
under subparagraph (C) on the ground that the
decision was arbitrary and capricious, in ac-
cordance with an appeals process that is estab-
lished by the State and that provides an oppor-
tunity for judicial review of such decision.
‘‘(F) The State plan permits coverage of a
drug excluded from the formulary pursuant to
a prior authorization program that is consistent
with paragraph (4).
‘‘(G) The formulary meets such other re-
quirements as the Secretary may impose.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to calendar quarters beginning on
or after October 1, 1993, without regard to whether or
371
not regulations to carry out such amendments have been
promulgated by such date.
SEC. 5107. ELIMINATION OF SPECIAL EXEMPTION FROM
PRIOR AUTHORIZATION FOR NEW DRUGS.
(a) IN
GENERAL.—Section 1927(d) (42 U.S.C.
1396r–8(d)), as amended by section 5108(b)(4)(A)(iii), is
amended by striking paragraph (5).
(b) CONFORMING AMENDMENT.—Section 1927(d)(3)
(42 U.S.C. 1396r–8(d)(3)) is amended by striking ‘‘(ex-
cept with respect’’ and all that follows through ‘‘of this
paragraph)’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to calendar quarters beginning on
or after October 1, 1993, without regard to whether or
not regulations to carry out such amendments have been
promulgated by such date.
SEC. 5108. TECHNICAL CORRECTIONS RELATING TO SEC-
TION 4401 OF OBRA–1990.
(a) SECTION 1903, SSA.—Paragraph (10) of section
1903(i), as inserted by section 4401(a)(1)(B) of OBRA–
1990, is amended to read as follows:
‘‘(10) with respect to covered outpatient drugs
unless there is a rebate agreement in effect under
section 1927 with respect to such drugs or unless
section 1927(a)(3) applies;’’.
372
(b) SECTION 1927, SSA.—(1) Section 1927(a) (42
U.S.C. 1396r–8(a)) is amended—
(A) in paragraph (1)—
(i) by amending the second sentence to
read as follows: ‘‘Any such agreement entered
into prior to April 1, 1991, shall be deemed to
have been entered into on January 1, 1991, and
the amount of the rebate under such agreement
shall be calculated as if the agreement had been
entered into on January 1, 1991.’’, and
(ii) in the third sentence, by striking
‘‘March’’ and inserting ‘‘April’’;
(B) in paragraph (2)—
(i) by striking ‘‘first’’, and
(ii) by striking the period at the end and
inserting the following: ‘‘, except that such
paragraph (and section 1903(i)(10)(A)) shall
not apply to the dispensing of such a drug be-
fore April 1, 1991, if the Secretary determines
that there were extenuating circumstances with
respect to the first calendar quarter of 1991.’’;
(C) in paragraph (3), by striking ‘‘single
source’’ and all that follows and inserting the follow-
ing: ‘‘covered outpatient drugs if—
374
1902(a)(54) and of this section in the same
manner as the State would be required to meet
such requirements if the State had in effect a
plan approved under this title.
‘‘(B) 
NO
APPLICATION
IN
COMMON-
WEALTHS
AND
TERRITORIES.—This section,
and sections 1902(a)(54) and 1903(i)(10), shall
only apply to a State that is one of the 50
States or the District of Columbia.’’.
(2) Section 1927(b) (42 U.S.C. 1396r–8(b)) is
amended—
(A) in paragraph (1)(A)—
(i) by striking ‘‘(or periodically in accord-
ance with a schedule specified by the Sec-
retary)’’ and inserting ‘‘(or other period speci-
fied by the Secretary)’’, and
(ii) by inserting ‘‘after December 31, 1990,
for which payment was made’’ after ‘‘dis-
pensed’’;
(B) in paragraph (2)(A)—
(i) by striking ‘‘calendar quarter’’ and ‘‘the
quarter’’ and inserting ‘‘rebate period’’ and
‘‘the period’’, respectively,
375
(ii) by striking ‘‘dosage units’’ and insert-
ing ‘‘units of each dosage form and strength’’,
and
(iii) by inserting ‘‘after December 31,
1990, for which payment was made’’ after
‘‘dispensed’’;
(C) in paragraph (3)(A)—
(i) in clause (i), by striking ‘‘quarter’’ each
place it appears and inserting ‘‘calendar quarter
or other rebate period under the agreement’’,
(ii) in clause (i), by striking the open pa-
renthesis before ‘‘for’’ and the close parenthesis
after ‘‘drugs’’,
(iii) in clause (i), by striking ‘‘subsection
(c)(2)(B)) for covered outpatient drugs’’ and in-
serting ‘‘subsection (c)(1)(C) for each covered
outpatient drug’’, and
(iv) in clause (ii), by inserting a comma
after ‘‘this section’’ and after ‘‘1990’’;
(D) in paragraph (3)(B)—
(i) by striking ‘‘$100,000’’ and inserting
‘‘$10,000’’,
(ii) by striking ‘‘if the wholesaler’’ and in-
serting ‘‘for each instance in which the whole-
saler’’,
376
(iii) by inserting ‘‘in response to such a re-
quest’’ after ‘‘false information’’, and
(iv) by striking ‘‘(with respect to amounts
of penalties or additional assessments)’’;
(E) in paragraph (3)(C)—
(i) in clause (i), by striking ‘‘the penalty’’
and inserting ‘‘the rebate next required to be
paid’’,
(ii) in clause (i), by striking ‘‘and such
amount shall be paid to the Treasury, and, if’’
and inserting ‘‘. If’’,
(iii) in clause (ii), by inserting ‘‘under sub-
paragraph (A)’’ after ‘‘provides false informa-
tion’’, and
(iv) in clause (ii), by striking ‘‘Such civil
money penalties are’’ and inserting ‘‘Any such
civil money penalty shall be’’;
(F) in paragraph (3)(D), by striking ‘‘whole-
saler,’’ the first place it appears and inserting
‘‘wholesaler or the’’; and
(G) in paragraph (4)(B)(iii), by adding at the
end the following: ‘‘In the case of such a termi-
nation, a State may terminate coverage of the drugs
affected by such termination as of the effective date
377
of such termination without providing any advance
notice otherwise required by regulation.’’.
(3) Section 1927(c) (42 U.S.C. 1396r–8(c)) is
amended—
(A) in paragraph (1) in the matter preceding
subparagraph (A)—
(i) by striking the first sentence,
(ii) in the second sentence, by striking
‘‘Except as otherwise provided’’ and all that fol-
lows through ‘‘the Secretary)’’ and inserting the
following: ‘‘For purposes of this section, the
amount of the rebate under this subsection for
a rebate period’’, and
(iii) by inserting ‘‘(except as provided in
subsection (b)(3)(C) and paragraph (2))’’ after
‘‘drugs shall’’;
(B) in paragraph (1)(A), by striking ‘‘the quar-
ter (or other period)’’ and inserting ‘‘the rebate pe-
riod’’;
(C) in subparagraph (C)—
(i) by striking ‘‘For purposes of this para-
graph’’ and inserting ‘‘BEST PRICE DEFINED.—
For purposes of this section’’,
(ii) by inserting ‘‘provider,’’ after ‘‘re-
tailer,’’, and
378
(iii) by striking the semicolon at the end
and inserting a period; and
(D) by striking subparagraph (D) and inserting
the following:
‘‘(D) USE
OF
ESTIMATED
BEST
PRICES
DURING
INITIAL
YEAR
OF
AVAILABILITY
OF
DRUG.—If the Secretary determines that a
manufacturer cannot determine the best price
for rebate periods during the first year in which
an agreement is in effect until after the end of
the year, as part of the agreement the Sec-
retary may require the manufacturer to esti-
mate the best price for rebate periods during
the year and provide an adjustment to the re-
bate paid to the State to take into account the
difference (if any) between the best price and
the estimated best price.’’.
(4)(A) Section 1927(d) (42 U.S.C. 1396r–8(d)) is
amended—
(i) in paragraph (2)—
(I) in subparagraph (A), by inserting ‘‘or
loss’’ after ‘‘gain’’,
(II) by striking subparagraph (I), and
(III) by redesignating subparagraphs (J)
and (K) as subparagraphs (I) and (J);
379
(ii) in paragraph (3)—
(I) by striking ‘‘described in paragraph
(2)’’, and
(II) by inserting ‘‘described in paragraph
(2)’’ after ‘‘classes of drugs,’’;
(iii) by striking paragraph (4) and by redesig-
nating paragraphs (5) through (7) as paragraphs
(4) through (6);
(iv) in paragraph (6), as so redesignated, by
striking ‘‘provided’’ and inserting ‘‘if’’; and
(v) by striking the second sentence of para-
graph (6), as so redesignated, and paragraph (8)
and inserting the following:
‘‘(7) CONSTRUCTION WITH RESPECT TO FRAUD
AND ABUSE.—Nothing in this section shall be con-
strued to restrict the authority of a State to apply
sanctions under this Act against any person for
fraud or abuse.’’.
(B) Section 1927(d)(4), as redesignated by subpara-
graph (A)(iii), shall first apply to drugs dispensed on or
after July 1, 1991.
(5)(A) Section 1927(f) (42 U.S.C. 1396r–8(f)) is
amended to read as follows:
‘‘(f) NO REDUCTIONS IN PHARMACY REIMBURSE-
MENT LIMITS.—
380
‘‘(1) IN GENERAL.—During the period begin-
ning on November 5, 1990, and ending on December
31, 1994—
‘‘(A) a State may not reduce the amount
paid by the State under this title with respect
to the ingredient cost of a covered outpatient
drug or the dispensing fee for such a drug
below the amount in effect as of November 5,
1990, and
‘‘(B) the Secretary may not change the
regulations in effect on November 5, 1990, gov-
erning the amounts described in subparagraph
(A) which are eligible for Federal financial par-
ticipation, to reduce the reimbursement limits
described in such regulations.
‘‘(2) CONSTRUCTION.—If the Secretary notified
a State before November 5, 1990, that its payment
amounts under this title with respect to the ingredi-
ent cost of a covered outpatient drug or the dispens-
ing fee for such a drug were in excess of those per-
mitted under regulations in effect on such date,
paragraph (1)(B) shall not be construed as prevent-
ing a State from reducing payment amounts or dis-
pensing fee in order to comply with such regula-
tions.’’.
381
(B) Not later than April 1, 1994, the Secretary of
Health and Human Services shall establish an upper limit
on the amount of payment which is eligible for Federal
financial participation under title XIX of the Social Secu-
rity Act for each multiple source drug (as defined in sec-
tion 1927(k)(7)(A)(i) of such Act) for which the Food and
Drug Administration has rated at least 3 formulations of
such drug as therapeutically and pharmaceutically equiva-
lent, regardless of whether all the formulations of such
drug are rated as so equivalent. In establishing such a
limit for a drug, the Secretary shall take into account only
those formulations of the drug which the Food and Drug
Administration has rated as therapeutically and pharma-
ceutically equivalent.
(6) Section 1927(g) (42 U.S.C. 1396r–8(g)) is
amended—
(A) by amending paragraph (1) to read as fol-
lows:
‘‘(1) REQUIREMENT
FOR
DRUG
USE
REVIEW
PROGRAM.—Each State shall provide, by not later
than January 1, 1993, for a drug use review pro-
gram for covered outpatient drugs (other than drugs
dispensed to residents of nursing facilities) that—
‘‘(A) meets the requirements of paragraph
(2), and
382
‘‘(B) is intended to assure that prescrip-
tions for such drugs are appropriate, medically
necessary, and not likely to lead to adverse
medical results.’’;
(B) in paragraph (2)—
(i) by amending the matter before subpara-
graph (A) to read as follows:
‘‘(2) REQUIREMENTS.—’’,
(ii) by amending subparagraph (A) to read
as follows:
‘‘(A) PROSPECTIVE DRUG USE REVIEW.—
Each drug use review program shall provide for
a review of drug therapy before each prescrip-
tion is filled or delivered to an individual receiv-
ing benefits under this title (including counsel-
ing by pharmacists) consistent with standards
established by the Secretary. Nothing in this
paragraph shall be construed as requiring a
pharmacist to provide consultation when an in-
dividual receiving benefits under this title or
caregiver of such individual refuses such con-
sultation.’’,
(iii) in subparagraph (C)—
383
(I) by striking ‘‘APPLICATION
OF
STANDARDS.—’’ and inserting ‘‘STAND-
ARDS.—(i)’’,
(II) by striking ‘‘and literature re-
ferred to in subsection (1)(B)’’ and insert-
ing ‘‘described in clause (ii)’’,
(III) by striking ‘‘including but not
limited to’’ and inserting ‘‘. Such assess-
ment shall include’’,
(IV) by striking ‘‘abuse/misuse and,
as necessary, introduce remedial strate-
gies,’’ and inserting ‘‘abuse or misuse and
introduce remedial strategies’’, and
(V) by adding at the end the following
new clause:
‘‘(ii) The compendia described in this
clause are the American Hospital Formulary
Service Drug Information, the United States
Pharmacopeia-Drug 
Information, 
and 
the
American Medical Association Drug Evalua-
tions.’’, and
(iv) by amending subparagraph (D) to
read as follows:
‘‘(D) EDUCATIONAL PROGRAM.—The pro-
gram shall educate (directly or by contract)
384
pharmacists, physicians, and other individuals
prescribing or dispensing covered outpatient
drugs under the State plan on common drug
therapy problems in order to improve prescrib-
ing or dispensing practices.’’;
(C) in paragraph (3)—
(i) in subparagraph (A), by striking
‘‘(hereinafter’’ and all that follows and inserting
‘‘(in this paragraph referred to as the ‘DUR
Board’).’’,
(ii) in subparagraph (B), by striking ‘‘51
percent’’ and all that follows and inserting ‘‘50
percent licensed and actively practicing physi-
cians and at least 1/3 but not more than 50
percent licensed and actively practicing phar-
macists.’’,
(iii) by amending subparagraph (C) to
read as follows:
‘‘(C) RESPONSIBILITIES.—The responsibil-
ities of the DUR Board shall include the follow-
ing:
‘‘(i) Carrying out retrospective drug
use review pursuant to paragraph (2)(B).
385
‘‘(ii) Establishing and applying stand-
ards for drug use review described in para-
graph (2)(C).
‘‘(iii) Implementing educational pro-
grams described in paragraph (2)(D).
‘‘(iv) Conducting ongoing evaluations
of the effectiveness of its programs and ac-
tivities in improving the quality and safety
of drug therapy for individuals receiving
benefits under the State plan.’’; and
(D) by amending subparagraph (D) to read as
follows:
‘‘(4) ANNUAL REPORT.—Each State shall sub-
mit a report each year to the Secretary on the na-
ture and scope of the drug use review program
under this subsection. Such report shall include an
estimate of cost savings resulting from operation of
such program.’’.
(7) Section 1927(h) (42 U.S.C. 1396r–8(h)) is
amended to read as follows:
‘‘(h) ENCOURAGING ELECTRONIC CLAIMS MANAGE-
MENT.—The Secretary shall encourage each single State
agency under this title to establish, as its principal means
of processing claims for covered outpatient drugs, a point-
of-sale electronic claims management system for the pur-
451
this section and the State exercises its right of reconsider-
ation under section 1116(d), the Departmental Appeals
Board established in the Department of Health and
Human Services shall, if such Board upholds the basis for
the disallowance, determine whether the amount of the
disallowance should be reduced. In making this determina-
tion, the Board shall take into account (to the extent the
State makes a showing) factors which shall include—
‘‘(A) the nature of the basis for the disallow-
ance;
‘‘(B) whether the amount of the disallowance is
proportionate to the error or deficiency on which the
disallowance is based;
‘‘(C) whether the basis of the disallowance con-
stitutes noncompliance that prevented or materially
affected the provision of appropriate services to indi-
viduals eligible under this title; or
‘‘(D) whether Federal guidance with respect to
the action that is the basis for the proposed dis-
allowance was insufficient and the State made good
faith efforts to conform its action to the intent of
the applicable Federal statute or regulation.
‘‘(2) No disallowance shall be taken or upheld if the
action of the State on which the disallowance would be
based is consistent with its approved State plan.’’.
478
(b) Subparagraphs (A) and (B) of the paragraph (14)
of section 1903(i) added by section 4752(e)(2) of OBRA–
1990 are each amended—
(1) by striking ‘‘or’’ at the end of clause (v);
(2) by redesignating clause (vi) as clause (vii);
and
(3) by inserting after clause (v) the following
new clause:
‘‘(vi) delivers such services in the
emergency department of a hospital par-
ticipating in the state plan approved under
this title, or’’.
SEC. 5172. CORRECTIONS RELATING TO SECTION 4801
(NURSING HOME REFORM).
(a) Section 1919(b)(3)(C)(i)(I), as amended by sec-
tion 4801(e)(3) of OBRA–1990, is amended by striking
‘‘no later than’’ before ‘‘not to exceed 14 days’’.
(b) Section 1919(b)(5)(D), as amended by section
4801(a)(4) of OBRA–1990, is amended by striking the
comma before ‘‘or a new competency evaluation pro-
gram.’’.
(c) Section 1919(b)(5)(G) is amended by striking ‘‘or
licensed or certified social worker’’ and inserting ‘‘licensed
or certified social worker, registered respiratory therapist,
or certified respiratory therapy technician’’.
506
‘‘(A) The list of vaccines specified in sub-
paragraph (B) is deemed to be the list of vac-
cines maintained under paragraph (1).
‘‘(B) The list of vaccines specified in this
subparagraph is the list of vaccines that, for
purposes of paragraph (1), is established (and
periodically reviewed and as appropriate re-
vised) by the Advisory Committee on Immuni-
zation Practices, an advisory committee estab-
lished by the Secretary, acting through the Di-
rector of the Centers for Disease Control and
Prevention.
‘‘(b) RECOMMENDED SCHEDULE FOR ADMINISTRA-
TION.—
‘‘(1) IN GENERAL.—Subject to paragraph (2),
in the case of a pediatric vaccine, the Secretary shall
establish (and periodically review and as appropriate
revise) a schedule of nonbinding recommendations
for the following:
‘‘(A) The number of immunizations with
the vaccine that children should receive.
‘‘(B) The ages at which children should re-
ceive the immunizations.
‘‘(C) The dosage of vaccine that should be
administered in the immunizations.