161
(d) TELEHEALTH COVERAGE FOR DIRECT PATIENT
CARE.—
(1) IN
GENERAL.—Section 4206 of the Bal-
anced Budget Act of 1997 (42 U.S.C. 1395l note),
as amended by subsection (c), is amended—
(A) in subsection (a)(1), by striking ‘‘pro-
fessional consultation via telecommunications
systems with a physician’’ and inserting ‘‘items
and services for which payment may be made
under such part that are furnished via a tele-
communications system by a physician’’; and
(B) by adding at the end the following new
subsection:
‘‘(f) COVERAGE OF ITEMS AND SERVICES.—Payment
for items and services provided pursuant to subsection (a)
shall include payment for professional consultations, office
visits, office psychiatry services, including any service
identified as of July 1, 2000, by HCPCS codes 99241–
99275, 99201–99215, 90804–90815, and 90862.’’.
(2) STUDY
AND
REPORT
REGARDING
ADDI-
TIONAL ITEMS AND SERVICES.—
(A) STUDY.—The Secretary of Health and
Human Services shall conduct a study to iden-
tify items and services in addition to those de-
scribed in section 4206(f) of the Balanced
162
Budget Act of 1997 (as added by paragraph
(1)) that would be appropriate to provide pay-
ment under title XVIII of the Social Security
Act (42 U.S.C. 1395 et seq.).
(B) REPORT.—Not later than 2 years after
the date of enactment of this Act, the Secretary
shall submit a report to Congress on the study
conducted under subparagraph (A) together
with such recommendations for legislation that
the Secretary determines are appropriate.
(e) ALL PHYSICIANS AND PRACTITIONERS ELIGIBLE
FOR TELEHEALTH REIMBURSEMENT.—Section 4206(a)
of the Balanced Budget Act of 1997 (42 U.S.C. 1395l
note), as amended by subsection (d), is amended—
(1) in paragraph (1), by striking ‘‘(described in
section 1842(b)(18)(C) of such Act (42 U.S.C.
1395u(b)(18)(C))’’; and
(2) by adding at the end the following new
paragraph:
‘‘(3) PRACTITIONER
DEFINED.—For purposes
of paragraph (1), the term ‘practitioner’ includes—
‘‘(A) a practitioner described in section
1842(b)(18)(C) of the Social Security Act (42
U.S.C. 1395u(b)(18)(C)); and
163
‘‘(B) a physical, occupational, or speech
therapist.’’.
(f) TELEHEALTH
SERVICES
PROVIDED
USING
STORE-AND-FORWARD
TECHNOLOGIES.—Section
4206(a)(1) of the Balanced Budget Act of 1997 (42
U.S.C. 1395l note), as amended by subsection (e), is
amended by adding at the end the following new para-
graph:
‘‘(4) USE
OF
STORE-AND-FORWARD
TECH-
NOLOGIES.—For purposes of paragraph (1), in the
case of any Federal telemedicine demonstration pro-
gram in Alaska or Hawaii, the term ‘telecommuni-
cations system’ includes store-and-forward tech-
nologies that provide for the asynchronous trans-
mission of health care information in single or multi-
media formats.’’.
(g) FIVE-YEAR
APPLICATION.—The amendments
made by this section shall apply to items and services pro-
vided on or after April 1, 2001, and before April 1, 2006.
SEC. 450. MEDPAC STUDY ON LOW-VOLUME, ISOLATED
RURAL HEALTH CARE PROVIDERS.
(a) STUDY.—The Medicare Payment Advisory Com-
mission established under section 1805 of the Social Secu-
rity Act (42 U.S.C. 1395b–6) (in this section referred to
as ‘‘MedPAC’’) shall conduct a study on the effect of low
164
patient and procedure volume on the financial status of
low-volume, isolated rural health care providers partici-
pating in the medicare program under title XVIII of the
Social Security Act (42 U.S.C. 1395 et seq.).
(b) REPORT.—Not later than 18 months after the
date of enactment of this Act, MedPAC shall submit a
report to the Secretary of Health and Human Services and
Congress on the study conducted under subsection (a)
indicating—
(1) whether low-volume, isolated rural health
care providers are having, or may have, significantly
decreased medicare margins or other financial dif-
ficulties resulting from any of the payment meth-
odologies described in subsection (c);
(2) whether the status as a low-volume, isolated
rural health care provider should be designated
under the medicare program and any criteria that
should be used to qualify for such a status; and
(3) any changes in the payment methodologies
described in subsection (c) that are necessary to pro-
vide appropriate reimbursement under the medicare
program to low-volume, isolated rural health care
providers (as designated pursuant to paragraph (2)).
165
(c) PAYMENT METHODOLOGIES DESCRIBED.—The
payment methodologies described in this subsection are
the following:
(1) The prospective payment system for hos-
pital outpatient department services under section
1833(t) of the Social Security Act (42 U.S.C.
1395l).
(2) The fee schedule for ambulance services
under section 1834(l) of such Act (42 U.S.C.
1395m(l)).
(3) The prospective payment system for inpa-
tient hospital services under section 1886 of such
Act (42 U.S.C. 1395ww).
(4) The prospective payment system for routine
service costs of skilled nursing facilities under sec-
tion 1888(e) of such Act (42 U.S.C. 1395yy(e)).
(5) The prospective payment system for home
health services under section 1895 of such Act (42
U.S.C. 1395fff).
166
TITLE 
V—PROVISIONS 
RELAT-
ING 
TO 
PART 
C
(MEDICARE+CHOICE 
PRO-
GRAM) 
AND 
OTHER 
MEDI-
CARE MANAGED CARE PROVI-
SIONS
SEC. 501. RESTORING EFFECTIVE DATE OF ELECTIONS AND
CHANGES 
OF 
ELECTIONS 
OF
MEDICARE+CHOICE PLANS.
(a) OPEN ENROLLMENT.—Section 1851(f)(2) (42
U.S.C. 1395w–21(f)(2)) is amended by striking ‘‘, except
that if such election or change is made after the 10th day
of any calendar month, then the election or change shall
not take effect until the first day of the second calendar
month following the date on which the election or change
is made’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to elections and changes of cov-
erage made on or after January 1, 2001.
SEC. 502. SPECIAL MEDIGAP ENROLLMENT ANTIDISCRIMI-
NATION PROVISION FOR CERTAIN BENE-
FICIARIES.
(a) DISENROLLMENT
WINDOW
IN
ACCORDANCE
WITH
BENEFICIARY’S
CIRCUMSTANCE.—Section
1882(s)(3) (42 U.S.C. 1395ss(s)(3)) is amended—
167
(1) in subparagraph (A), in the matter fol-
lowing clause (iii), by striking ‘‘, subject to subpara-
graph (E), seeks to enroll under the policy not later
than 63 days after the date of termination of enroll-
ment described in such subparagraph’’ and inserting
‘‘seeks to enroll under the policy during the period
specified in subparagraph (E)’’; and
(2) by striking subparagraph (E) and inserting
the following new subparagraph:
‘‘(E) For purposes of subparagraph (A), the time pe-
riod specified in this subparagraph is—
‘‘(i) in the case of an individual described in
subparagraph (B)(i), the period beginning on the
date the individual receives a notice of termination
or cessation of all supplemental health benefits (or,
if no such notice is received, notice that a claim has
been denied because of such a termination or ces-
sation) and ending on the date that is 63 days after
the applicable notice;
‘‘(ii) in the case of an individual described in
clause (ii), (iii), (v), or (vi) of subparagraph (B)
whose enrollment is terminated involuntarily, the pe-
riod beginning on the date that the individual re-
ceives a notice of termination and ending on the
168
date that is 63 days after the date the applicable
coverage is terminated;
‘‘(iii) in the case of an individual described in
subparagraph (B)(iv)(I), the period beginning on the
earlier of (I) the date that the individual receives a
notice of termination, a notice of the issuer’s bank-
ruptcy or insolvency, or other such similar notice, if
any, and (II) the date that the applicable coverage
is terminated, and ending on the date that is 63
days after the date the coverage is terminated;
‘‘(iv) in the case of an individual described in
clause (ii), (iii), (iv)(II), (iv)(III), (v), or (vi) of sub-
paragraph (B) who disenrolls voluntarily, the period
beginning on the date that is 60 days before the ef-
fective date of the disenrollment and ending on the
date that is 63 days after such effective date; and
‘‘(v) in the case of an individual described in
subparagraph (B) but not described in the preceding
provisions of this subparagraph, the period begin-
ning on the effective date of the disenrollment and
ending on the date that is 63 days after such effec-
tive date.’’.
(b) EXTENDED MEDIGAP ACCESS FOR INTERRUPTED
TRIAL
PERIODS.—Section 
1882(s)(3) 
(42 
U.S.C.
169
1395ss(s)(3)), as amended by subsection (a), is amended
by adding at the end the following new subparagraph:
‘‘(F) For purposes of this paragraph—
‘‘(i) in the case of an individual described in
subparagraph (B)(v) (or deemed to be so described,
pursuant to this subparagraph) whose enrollment
with an organization or provider described in sub-
clause (II) of such subparagraph is involuntarily ter-
minated within the first 12 months of such enroll-
ment, and who, without an intervening enrollment,
enrolls with another such organization or provider,
such subsequent enrollment shall be deemed to be an
initial enrollment described in such subparagraph;
and
‘‘(ii) in the case of an individual described in
clause (vi) of subparagraph (B) (or deemed to be so
described, pursuant to this subparagraph) whose en-
rollment with a plan or in a program described in
clause (v)(II) of such subparagraph is involuntarily
terminated within the first 12 months of such enroll-
ment, and who, without an intervening enrollment,
enrolls in another such plan or program, such subse-
quent enrollment shall be deemed to be an initial en-
rollment described in clause (vi) of such subpara-
graph.’’.
170
SEC. 
503. 
INCREASE 
IN 
NATIONAL 
PER 
CAPITA
MEDICARE+CHOICE GROWTH PERCENTAGE
IN 2001 AND 2002.
Section 1853(c)(6)(B) of the Social Security Act (42
U.S.C. 1395w–23(c)(6)(B)) is amended—
(1) in clause (iv), by striking ‘‘for 2001, 0.5
percentage points’’ and inserting ‘‘for 2001, 0 per-
centage points’’; and
(2) in clause (v), by striking ‘‘for 2002, 0.3 per-
centage points’’ and inserting ‘‘for 2002, 0 percent-
age points’’.
SEC. 504. ALLOWING MOVEMENT TO 50:50 PERCENT BLEND
IN 2002.
Section 1853(c)(2) of the Social Security Act (42
U.S.C. 1395w–23(c)(2)) is amended—
(1) by striking the period at the end of sub-
paragraph (F) and inserting a semicolon; and
(2) by adding after and below subparagraph
(F) the following:
‘‘except that a Medicare+Choice organization may
elect to apply subparagraph (F) (rather than sub-
paragraph (E)) for 2002.’’.
171
SEC. 505. DELAY FROM JULY TO NOVEMBER 2000, IN DEAD-
LINE FOR OFFERING AND WITHDRAWING
MEDICARE+CHOICE PLANS FOR 2001.
Notwithstanding any other provision of law, the dead-
line for a Medicare+Choice organization to withdraw the
offering of a Medicare+Choice plan under part C of title
XVIII of the Social Security Act (or otherwise to submit
information required for the offering of such a plan) for
2001 is delayed from July 1, 2000, to November 1, 2000,
and any such organization that provided notice of with-
drawal of such a plan during 2000 before the date of en-
actment of this Act may rescind such withdrawal at any
time before November 1, 2000.
SEC. 506. AMOUNTS IN MEDICARE TRUST FUNDS AVAIL-
ABLE 
FOR 
SECRETARY’S 
SHARE 
OF
MEDICARE+CHOICE 
EDUCATION 
AND 
EN-
ROLLMENT-RELATED COSTS.
(a) 
RELOCATION
OF
PROVISIONS.—Section
1857(e)(2) (42 U.S.C. 1395w–27(e)(2)) is amended to
read as follows:
‘‘(2) COST-SHARING IN ENROLLMENT-RELATED
COSTS.—A Medicare+Choice organization shall pay
the fee established by the Secretary under section
1851(j)(3)(A).’’.
(b) FUNDING FOR EDUCATION AND ENROLLMENT
ACTIVITIES.—Section 1851 (42 U.S.C. 1395w–21) is
172
amended by adding at the end the following new sub-
section:
‘‘(j) FUNDING FOR BENEFICIARY EDUCATION AND
ENROLLMENT ACTIVITIES.—
‘‘(1) 
SECRETARY’S
ESTIMATE
OF
TOTAL
COSTS.—The Secretary shall annually estimate the
total cost for a fiscal year of carrying out this sec-
tion, section 4360 of the Omnibus Budget Reconcili-
ation Act of 1990 (relating to the health insurance
counseling and assistance program), and related ac-
tivities.
‘‘(2) TOTAL
AMOUNT
AVAILABLE.—The total
amount available to the Secretary for a fiscal year
for the costs of the activities described in paragraph
(1) shall be equal to the lesser of—
‘‘(A) the amount estimated for such fiscal
year under paragraph (1); or
‘‘(B) for—
‘‘(i) fiscal year 2001, $130,000,000;
and
‘‘(ii) fiscal year 2002 and each subse-
quent fiscal year, the amount for the pre-
vious fiscal year, adjusted to account for
inflation, any change in the number of
173
beneficiaries under this title, and any other
relevant factors.
‘‘(3) COST-SHARING IN ENROLLMENT-RELATED
COSTS.—
‘‘(A) AMOUNTS FROM MEDICARE+CHOICE
ORGANIZATIONS.—
‘‘(i) IN GENERAL.—The Secretary is
authorized to charge a fee to each
Medicare+Choice organization with a con-
tract under this part that is equal to the
organization’s pro rata share (as deter-
mined 
by 
the 
Secretary) 
of 
the
Medicare+Choice portion (as defined in
clause (ii)) of the total amount available
under paragraph (2) for a fiscal year. Any
amounts collected shall be available with-
out further appropriation to the Secretary
for the costs of the activities described in
paragraph (1).
‘‘(ii) 
MEDICARE+CHOICE
PORTION
DEFINED.—For purposes of clause (i), the
term ‘Medicare+Choice portion’ means, for
a fiscal year, the ratio, as estimated by the
Secretary, of—
174
‘‘(I) the average number of indi-
viduals enrolled in Medicare+Choice
plans during the fiscal year; to
‘‘(II) the average number of indi-
viduals entitled to benefits under
parts A, and enrolled under part B,
during the fiscal year.
‘‘(B) SECRETARY’S SHARE.—
‘‘(i) 
AMOUNTS
AVAILABLE
FROM
TRUST FUNDS.—The Secretary’s share of
expenses shall be payable from funds in
the Federal Hospital Insurance Trust
Fund and the Federal Supplementary
Medical Insurance Trust Fund, in such
proportion as the Secretary shall deem to
be fair and equitable after taking into con-
sideration the expenses attributable to the
administration of this part with respect to
part A and B. The Secretary shall make
such transfers of moneys between such
Trust Funds as may be appropriate to set-
tle accounts between the Trust Funds in
cases where expenses properly payable
from one such Trust Fund have been paid
from the other such Trust Fund.
175
‘‘(ii) SECRETARY’S
SHARE
OF
EX-
PENSES DEFINED.—For purposes of clause
(i), the term ‘Secretary’s share of ex-
penses’ means, for a fiscal year, an amount
equal to—
‘‘(I) the total amount available to
the Secretary under paragraph (2) for
the fiscal year; less
‘‘(II) the amount collected under
subparagraph 
(A) 
for 
the 
fiscal
year.’’.
SEC. 507. REVISED TERMS AND CONDITIONS FOR EXTEN-
SION OF MEDICARE COMMUNITY NURSING
ORGANIZATION 
(CNO) 
DEMONSTRATION
PROJECT.
(a) IN GENERAL.—Section 532 of BBRA (42 U.S.C.
1395mm note) is amended—
(1) in subsection (a), by striking the second
sentence; and
(2) by striking subsection (b) and inserting the
following new subsections:
‘‘(b) TERMS AND CONDITIONS.—
‘‘(1) JANUARY THROUGH SEPTEMBER 2000.—
For the 9-month period beginning with January
2000, any such demonstration project shall be con-
176
ducted under the same terms and conditions as ap-
plied to such demonstration during 1999.
‘‘(2) OCTOBER
2000
THROUGH
DECEMBER
2001.—For the 15-month period beginning with Oc-
tober 2000, any such demonstration project shall be
conducted under the same terms and conditions as
applied to such demonstration during 1999, except
that the following modifications shall apply:
‘‘(A) BASIC CAPITATION RATE.—The basic
capitation rate paid for services covered under
the project (other than case management serv-
ices) per enrollee per month shall be basic capi-
tation rate paid for such services for 1999, re-
duced by 10 percent in the case of the dem-
onstration sites located in Arizona, Minnesota,
and Illinois, and 15 percent for the demonstra-
tion site located in New York.
‘‘(B) 
TARGETED
CASE
MANAGEMENT
FEE.—A case management fee shall be paid
only for enrollees who are classified as ‘mod-
erate’ or ‘at risk’ through a baseline health as-
sessment (as required for Medicare+Choice
plans under section 1852(e) of the Social Secu-
rity Act (42 U.S.C. 1395ww–22(e)).
178
‘‘(D) 
QUALITY
IMPROVEMENT.—Each
project shall implement at each site once during
the 15-month period—
‘‘(i) enrollee satisfaction surveys; and
‘‘(ii) reporting on specified quality in-
dicators for the enrolled population.
‘‘(c) EVALUATION.—
‘‘(1) PRELIMINARY
REPORT.—Not later than
July 1, 2001, the Secretary of Health and Human
Services shall submit to the Committees on Ways
and Means and Commerce of the House of Rep-
resentatives and the Committee on Finance of the
Senate a preliminary report that—
‘‘(A) evaluates such demonstration projects
for the period beginning July 1, 1997, and end-
ing December 31, 1999, on a site-specific basis
with respect to the impact on per beneficiary
spending, specific health utilization measures,
and enrollee satisfaction; and
‘‘(B) includes a similar evaluation of such
projects for the portion of the extension period
that occurs after September 30, 2000.
‘‘(2) FINAL REPORT.—Not later than July 1,
2002, the Secretary shall submit a final report to
such Committees on such demonstration projects.
179
Such report shall include the same elements as the
preliminary report required by paragraph (1), but
for the period after December 31, 1999.
‘‘(3) METHODOLOGY FOR SPENDING COMPARI-
SONS.—Any evaluation of the impact of the dem-
onstration projects on per beneficiary spending in-
cluded in such reports shall be based on a compari-
son of—
‘‘(A) data for all individuals who—
‘‘(i) were enrolled in such demonstra-
tion projects as of the first day of the pe-
riod under evaluation; and
‘‘(ii) were enrolled for a minimum of
6 months thereafter; with
‘‘(B) data for a matched sample of individ-
uals who are enrolled under part B of title
XVIII of the Social Security Act (42 U.S.C.
1395j et seq.) and who are not enrolled in such
a project, in a Medicare+Choice plan under
part C of such title (42 U.S.C. 1395w–21 et
seq.), a plan offered by an eligible organization
under section 1876 of such Act (42 U.S.C.
1395mm), or a health care prepayment plan
under section 1833(a)(1)(A) of such Act (42
U.S.C. 1395l(a)(1)(A)).’’.
180
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall be effective as if included in the enact-
ment of section 532 of BBRA (42 U.S.C. 1395mm note).
SEC. 508. MODIFICATION OF PAYMENT RULES FOR CER-
TAIN 
FRAIL 
ELDERLY 
MEDICARE 
BENE-
FICIARIES.
(a) MODIFICATION OF PAYMENT RULES.—Section
1853 (42 U.S.C. 1395w–23) is amended—
(1) in subsection (a)—
(A) in paragraph (1)(A), by striking ‘‘sub-
sections (e), (g), and (i)’’ and inserting ‘‘sub-
sections (e), (g), (i), and (j)’’;
(B) in paragraph (3)(D), by inserting
‘‘paragraph (4) and’’ after ‘‘Subject to’’; and
(C) by adding at the end the following new
paragraph:
‘‘(4) EXEMPTION FROM RISK-ADJUSTMENT SYS-
TEM
FOR
FRAIL
ELDERLY
BENEFICIARIES
EN-
ROLLED IN SPECIALIZED PROGRAMS.—
‘‘(A) IN GENERAL.—In applying the risk-
adjustment factors established under paragraph
(3) during the period described in subparagraph
(B), 
the 
limitation 
under 
paragraph
(3)(C)(ii)(I) shall apply to a frail elderly
Medicare+Choice beneficiary (as defined in
181
subsection 
(j)(3)) 
who 
is 
enrolled 
in 
a
Medicare+Choice plan under a specialized pro-
gram for the frail elderly (as defined in sub-
section (j)(2)) during the entire period.
‘‘(B) PERIOD OF APPLICATION.—The pe-
riod described in this subparagraph begins with
January 2001, and ends with the first month
for which the Secretary certifies to Congress
that a comprehensive risk adjustment method-
ology under paragraph (3)(C) that takes into
account the factors described in subsection
(j)(1)(B) is being fully implemented.’’; and
(2) by adding at the end the following new sub-
section:
‘‘(j) SPECIAL RULES
FOR FRAIL ELDERLY EN-
ROLLED IN SPECIALIZED PROGRAMS FOR THE FRAIL EL-
DERLY.—
‘‘(1) DEVELOPMENT AND IMPLEMENTATION OF
NEW PAYMENT SYSTEM.—
‘‘(A) IN
GENERAL.—The Secretary shall
develop and implement (as soon as possible
after the date of enactment of the Medicare,
Medicaid, and SCHIP Balanced Budget Refine-
ment Act of 2000), during the period described
in subsection (a)(4)(B), a payment methodology
182
for frail elderly Medicare+Choice beneficiaries
enrolled in a Medicare+Choice plan under a
specialized program for the frail elderly (as de-
fined in paragraph (2)(A)).
‘‘(B) FACTORS DESCRIBED.—The method-
ology developed and implemented under sub-
paragraph (A) shall take into account the prev-
alence, mix, and severity of chronic conditions
among frail elderly Medicare+Choice bene-
ficiaries and shall include—
‘‘(i) medical diagnostic factors from
all provider settings (including hospital
and nursing facility settings);
‘‘(ii) functional indicators of health
status; and
‘‘(iii) such other factors as may be
necessary to achieve appropriate payments
for plans serving such beneficiaries.
‘‘(2) SPECIALIZED PROGRAM FOR THE FRAIL
ELDERLY DEFINED.—
‘‘(A) IN GENERAL.—In this part, the term
‘specialized program for the frail elderly’ means
a program that the Secretary determines—
‘‘(i) is offered under this part as a
distinct part of a Medicare+Choice plan;
183
‘‘(ii) primarily enrolls frail elderly
Medicare+Choice beneficiaries; and
‘‘(iii) has a clinical delivery system
that is specifically designed to serve the
special needs of such beneficiaries and to
coordinate short-term and long-term care
for such beneficiaries through the use of a
team described in subparagraph (B) and
through the provision of primary care serv-
ices to such beneficiaries by means of such
a team at the nursing facility involved.
‘‘(B) SPECIALIZED TEAM DESCRIBED.—A
team described in this subparagraph—
‘‘(i) includes—
‘‘(I) a physician; and
‘‘(II) a nurse practitioner or geri-
atric care manager; and
‘‘(ii) has as members individuals
who—
‘‘(I) have special training in the
care and management of the frail el-
derly beneficiaries; and
‘‘(II) specialize in the care and
management of such beneficiaries.
184
‘‘(3) FRAIL ELDERLY MEDICARE+CHOICE BEN-
EFICIARY DEFINED.—In this part, the term ‘frail el-
derly 
Medicare+Choice 
beneficiary’ 
means 
a
Medicare+Choice eligible individual who—
‘‘(A) is residing in a skilled nursing facility
(as defined in section 1819(a)) or a nursing fa-
cility (as defined in section 1919(a)) for an in-
definite period and without any intention of re-
siding outside the facility; and
‘‘(B) has a severity of condition that
makes the individual frail (as determined under
guidelines approved by the Secretary).’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of enactment of
this Act.
TITLE VI—PROVISIONS RELAT-
ING TO INDIVIDUALS WITH
END-STAGE RENAL DISEASE
SEC. 601. UPDATE IN RENAL DIALYSIS COMPOSITE RATE.
(a) IN GENERAL.—The last sentence of section
1881(b)(7) (42 U.S.C. 1395rr(b)(7)) is amended by strik-
ing ‘‘, and for such services’’ and all that follows before
the period at the end and inserting the following: ‘‘, for
such services furnished during 2001, by 2.4 percent above
such composite rate payment amounts for such services
185
furnished on December 31, 2000, for such services fur-
nished during 2002 and 2003, by the percentage increase
in the Consumer Price Index for all urban consumers
(U.S. city average) for the 12-month period ending with
June of the previous year above such composite rate pay-
ment amounts for such services furnished on December
31 of the previous year, and for such services furnished
during a subsequent year, by the ESRD market basket
percentage increase above such composite rate payment
amounts for such services furnished on December 31 of
the previous year’’.
(b) ESRD MARKET BASKET PERCENTAGE INCREASE
DEFINED.—Section 1881(b) (42 U.S.C. 1395rr(b)) is
amended by adding at the end the following new para-
graph:
‘‘(12)(A) For purposes of this title, the term ‘ESRD
market basket percentage increase’ means, with respect to
a calendar year, the percentage (estimated by the Sec-
retary before the beginning of such year) by which—
‘‘(i) the cost of the mix of goods and services
included in the provision of dialysis services (which
may include the costs described in subparagraph (D)
as determined appropriate by the Secretary) that is
determined based on an index of appropriately
weighted indicators of changes in wages and prices
186
which are representative of the mix of goods and
services included in such dialysis services for the cal-
endar year; exceeds
‘‘(ii) the cost of such mix of goods and services
for the preceding calendar year.
‘‘(B) In determining the percentage under subpara-
graph (A), the Secretary may take into account any in-
crease in the costs of furnishing the mix of goods and serv-
ices described in such subparagraph resulting from—
‘‘(i) the adoption of scientific and technological
innovations used to provide dialysis services; and
‘‘(ii) changes in the manner or method of deliv-
ering dialysis services.
‘‘(C) The Secretary shall periodically review and up-
date (as necessary) the items and services included in the
mix of goods and services used to determine the percent-
age under subparagraph (A).
‘‘(D) The costs described in this subparagraph
include—
‘‘(i) labor, including direct patient care costs
and administrative labor costs, vacation and holiday
pay, payroll taxes, and employee benefits;
‘‘(ii) other direct costs, including drugs, sup-
plies, and laboratory fees;
187
‘‘(iii) overhead, including medical director fees,
temporary services, general and administrative costs,
interest expenses, and bad debt;
‘‘(iv) capital, including rent, real estate taxes,
depreciation, utilities, repairs, and maintenance; and
‘‘(v) such other allowable costs as the Secretary
may specify.’’.
SEC. 602. REVISION OF PAYMENT RATES FOR ESRD PA-
TIENTS ENROLLED IN MEDICARE+CHOICE
PLANS.
(a) IN GENERAL.—Section 1853(a)(1)(B) (42 U.S.C.
1395w–23(a)(1)(B)) is amended by adding at the end the
following: ‘‘In establishing such rates the Secretary shall
provide for appropriate adjustments to increase each rate
to reflect the demonstration rate (including any risk-ad-
justment associated with such rate) of the social health
maintenance organization end-stage renal disease dem-
onstrations established by section 2355 of the Deficit Re-
duction Act of 1984 (Public Law 98–369; 98 Stat. 1103),
as amended by section 13567(b) of the Omnibus Budget
Reconciliation Act of 1993 (Public Law 103–66; 107 Stat.
608), and shall compute such rates by not taking into ac-
count individuals with kidney transplants and individuals
in which the program under this title is a secondary payer
188
to another payer (or payers) pursuant to section
1862(b).’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to payments for months begin-
ning with January 2002.
(c) PUBLICATION.—The Secretary of Health and
Human Services, not later than 6 months after the date
of enactment of this Act, shall publish for public comment
a description of the appropriate adjustments described in
the last sentence of section 1853(a)(1)(B) of the Social
Security Act (42 U.S.C. 1395w–23(a)(1)(B)), as added by
subsection (a). The Secretary shall publish in final form
such adjustments by not later than July 1, 2001, so that
the amendment made by subsection (a) is implemented on
a timely basis consistent with subsection (b).
SEC. 603. PERMITTING ESRD BENEFICIARIES TO ENROLL
IN ANOTHER MEDICARE+CHOICE PLAN IF
THE PLAN IN WHICH THEY ARE ENROLLED IS
TERMINATED.
(a) IN GENERAL.—Section 1851(a)(3)(B) (42 U.S.C.
1395w–21(a)(3)(B)) is amended by striking ‘‘except that’’
and all that follows and inserting the following: ‘‘except
that—
‘‘(i) an individual who develops end-
stage renal disease while enrolled in a
189
Medicare+Choice plan may continue to be
enrolled in that plan; and
‘‘(ii) in the case of such an individual
who is enrolled in a Medicare+Choice plan
under clause (i) (or subsequently under
this clause), if the enrollment is discon-
tinued under circumstances described in
section 1851(e)(4)(A) then the individual
will be treated as a ‘Medicare+Choice eli-
gible individual’ for purposes of electing to
continue 
enrollment 
in 
another
Medicare+Choice plan.’’.
(b) EFFECTIVE DATE.—
(1) IN
GENERAL.—The amendment made by
subsection (a) shall apply to terminations and
discontinuations occurring on or after the date of
enactment of this Act.
(2) APPLICATION
TO
PRIOR
PLAN
TERMI-
NATIONS.—Clause (ii) of section 1851(a)(3)(B) of
the Social Security Act (as inserted by subsection
(a)) also shall apply to individuals whose enrollment
in a Medicare+Choice plan was terminated or dis-
continued after December 31, 1997, and before the
date of enactment of this Act. In applying this para-
graph, such an individual shall be treated, for pur-