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mine, within 210 days after the date the Secretary
receives an application by a private accrediting orga-
nization, whether the process of the private accred-
iting organization meets the requirements of the pre-
ceding sentence using the criteria specified in section
1865(b)(2). The Secretary shall, using the process
described 
in 
section 
1865(b), 
deem 
a
Medicare+Choice organization that is so accredited
as meeting the requirements of paragraphs (1) and
(2) of this subsection and subsection (h).’’
SEC. 512. MISCELLANEOUS CHANGES AND STUDIES.
(a) PERMITTING RELIGIOUS FRATERNAL BENEFIT
SOCIETIES TO OFFER A RANGE OF MEDICARE+CHOICE
PLANS.—Section 1859(e)(2) (42 U.S.C. 1395w–29(e)(2))
is amended in the matter preceding subparagraph (A) by
striking ‘‘section 1851(a)(2)(A)’’ and inserting ‘‘section
1851(a)(2)’’.
(b) STUDY OF ACCOUNTING FOR VA AND DOD EX-
PENDITURES FOR MEDICARE BENEFICIARIES.—The Sec-
retary of Health and Human Services, jointly with the
Secretaries of Defense and of Veterans Affairs, shall sub-
mit to Congress not later than 1 year after the date of
the enactment of this Act a report on the estimated use
of health care services furnished by the Departments of
Defense and of Veterans Affairs to Medicare beneficiaries,
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including both beneficiaries under the original Medicare
fee-for-service program and under the Medicare+Choice
program. The report shall include an analysis of how best
to properly account for expenditures for such services in
the computation of Medicare+Choice capitation rates.
(c) PROMOTING
PROMPT
IMPLEMENTATION
OF
INFORMATICS, TELEMEDICINE, AND EDUCATION DEM-
ONSTRATION
PROJECT.—Section 4207 of BBA is
amended—
(1) in subsection (a)(1), by adding at the end
the following: ‘‘The Secretary shall make an award
for such project not later than 3 months after the
date of the enactment of the Medicare, Medicaid,
and SCHIP Balanced Budget Refinement Act of
1999. The Secretary shall accept the proposal ad-
judged to be the best technical proposal as of such
date of the enactment without the need for addi-
tional review or resubmission of proposals.’’;
(2) in subsection (a)(2)(A), by inserting before
the period at the end the following: ‘‘that qualify as
Federally designated medically underserved areas or
health professional shortage areas at the time of en-
rollment of beneficiaries under the project’’;
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(3) in subsection (c)(2), by striking ‘‘and the
source and amount of non-Federal funds used in the
project’’;
(4) in subsection (d)(2)(A), by striking ‘‘at a
rate of 50 percent of the costs that are reasonable
and’’ and inserting ‘‘for the costs that are related’’;
(5) in subsection (d)(2)(B)(i), by striking ‘‘(but
only in the case of patients located in medically un-
derserved areas)’’ and inserting ‘‘or at sites pro-
viding health care to patients located in medically
underserved areas’’;
(6) in subsection (d)(2)(C)(i), by striking ‘‘to
deliver medical informatics services under’’ and in-
serting ‘‘for activities related to’’; and
(7) by amending paragraph (4) of subsection
(d) to read as follows:
‘‘(4) COST-SHARING.—The project may not im-
pose cost sharing on a Medicare beneficiary for the
receipt of services under the project. Project costs
will cover all costs to patients and providers related
to participation in the project.’’.
SEC. 513. MEDPAC REPORT ON MEDICARE MSA (MEDICAL
SAVINGS ACCOUNT) PLANS.
Not later than 1 year after the date of the enactment
of this Act, the Medicare Payment Advisory Commission
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shall submit to Congress a report on specific legislative
changes that should be made to make MSA plans a viable
option under the Medicare+Choice program.
SEC. 514. CLARIFICATION OF NONAPPLICABILITY OF CER-
TAIN PROVISIONS OF DISCHARGE PLANNING
PROCESS TO MEDICARE+CHOICE PLANS.
(a) IN
GENERAL.—Section 1861(ee)(2)(H) (42
U.S.C. 1395x(ee)(2)(H)), as added by section 4431 of
BBA, is amended—
(1) in clause (i)—
(A) by striking ‘‘not specify’’ and inserting
‘‘subject to clause (iii), not specify’’; and
(B) by striking ‘‘and’’ at the end; and
(2) in clause (ii), by striking the period at the
end and inserting ‘‘, and’’; and
(3) by adding at the end the following new
clause:
‘‘(iii) for individuals enrolled under a
Medicare+Choice plan, under a contract with
the Secretary under section 1857, for whom a
hospital furnishes inpatient hospital services,
the hospital may specify with respect to such
individual the provider of post-hospital home
health services or other post-hospital services
under the plan.’’.
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Subtitle B—Managed Care
Demonstration Projects
SEC. 521. EXTENSION OF SOCIAL HEALTH MAINTENANCE
ORGANIZATION 
DEMONSTRATION 
(SHMO)
PROJECT AUTHORITY.
(a) EXTENSION.—Section 4018(b) of the Omnibus
Budget Reconciliation Act of 1987 (Public Law 100–203),
as amended by section 4014(a)(1) of BBA, is amended—
(1) in paragraph (1), by striking ‘‘December
31, 2000’’ and inserting ‘‘the date that is 18 months
after the date that the Secretary submits to Con-
gress the report described in section 4014(c) of the
Balanced Budget Act of 1997’’; and
(2) by adding at the end of paragraph (4) the
following: ‘‘Not later than 6 months after the date
the Secretary submits such final report, the Medi-
care Payment Advisory Commission shall submit to
Congress a report containing recommendations re-
garding such project.’’.
(b) SUBSTITUTION
OF AGGREGATE CAP.—Section
13567(c) of the Omnibus Budget Reconciliation Act of
1993 (Public Law 103–66), as amended by section
4014(b) of BBA, is amended to read as follows:
‘‘(c) AGGREGATE LIMIT
ON NUMBER
OF MEM-
BERS.—The Secretary of Health and Human Services
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may not impose a limit on the number of individuals that
may participate in a project conducted under section 2355
of the Deficit Reduction Act of 1984, other than an aggre-
gate limit of not less than 324,000 for all sites.’’.
SEC. 522. EXTENSION OF MEDICARE COMMUNITY NURSING
ORGANIZATION DEMONSTRATION PROJECT.
(a) EXTENSION.—Notwithstanding any other provi-
sion of law, any demonstration project conducted under
section 4079 of the Omnibus Budget Reconciliation Act
of 1987 (Public Law 100–123) and conducted for the ad-
ditional period of 2 years as provided for under section
4019 of BBA, shall be conducted for an additional period
of 2 years.
(b) REPORT.—By not later than July 1, 2001, the
Secretary of Health and Human Services shall submit to
Congress a report describing the results of any demonstra-
tion project conducted under section 4079 of the Omnibus
Budget Reconciliation Act of 1987, and describing the
data collected by the Secretary relevant to the analysis of
the results of such project, including the most recently
available data through the end of 2000.
SEC. 523. MEDICARE+CHOICE COMPETITIVE BIDDING DEM-
ONSTRATION PROJECT.
Section 4011 of BBA is amended—
(1) in subsection (a)—
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(A) by striking ‘‘The Secretary’’ and in-
serting the following:
‘‘(1) IN GENERAL.—Subject to the succeeding
provisions of this subsection, the Secretary’’; and
(B) by adding at the end the following:
‘‘(2) DELAY IN IMPLEMENTATION.—The Sec-
retary shall not implement the project until January
1, 2002, or, if later, 6 months after the date the
Competitive Pricing Advisory Committee has sub-
mitted to Congress a report on each of the following
topics:
‘‘(A) INCORPORATION OF ORIGINAL FEE-
FOR-SERVICE
MEDICARE
PROGRAM
INTO
PROJECT.—What changes would be required in
the project to feasibly incorporate the original
fee-for-service Medicare program into the
project in the areas in which the project is oper-
ational.
‘‘(B) QUALITY
ACTIVITIES.—The nature
and extent of the quality reporting and moni-
toring activities that should be required of plans
participating in the project, the estimated costs
that plans will incur as a result of these re-
quirements, and the current ability of the
Health Care Financing Administration to col-
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lect and report comparable data, sufficient to
support comparable quality reporting and moni-
toring activities with respect to beneficiaries en-
rolled in the original fee-for-service Medicare
program generally.
‘‘(C) RURAL PROJECT.—The current via-
bility of initiating a project site in a rural area,
given the site specific budget neutrality require-
ments of the project, and insofar as the Com-
mittee decides that the addition of such a site
is not viable, recommendations on how the
project might best be changed so that such a
site is viable.
‘‘(D) BENEFIT STRUCTURE.—The nature
and extent of the benefit structure that should
be required of plans participating in the project,
the rationale for such benefit structure, the po-
tential implications that any benefit standard-
ization requirement may have on the number of
plan choices available to a beneficiary in an
area designated under the project, the potential
implications of requiring participating plans to
offer variations on any standardized benefit
package the committee might recommend, such
that a beneficiary could elect to pay a higher
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percentage of out-of-pocket costs in exchange
for a lower premium (or premium rebate as the
case may be), and the potential implications of
expanding the project (in conjunction with the
potential inclusion of the original fee-for-service
Medicare program) to require Medicare supple-
mental insurance plans operating in an area
designated under the project to offer a coordi-
nated and comparable standardized benefit
package.
‘‘(3) CONFORMING
DEADLINES.—Any dates
specified in the succeeding provisions of this section
shall be delayed (as specified by the Secretary) in a
manner consistent with the delay effected under
paragraph (2).’’; and
(2) in subsection (c)(1)(A)—
(A) by striking ‘‘and’’ at the end of clause
(i); and
(B) by adding at the end the following new
clause:
‘‘(iii) establish beneficiary premiums
for plans offered in such area in a manner
such that a beneficiary who enrolls in an
offered plan with a below average price (as
established by the competitive pricing
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methodology established for such area)
may, at the plan’s election, be offered a re-
bate of some or all of the Medicare part B
premium that such individual must other-
wise pay in order to participate in a
Medicare+Choice 
plan 
under 
the
Medicare+Choice program; and’’.
SEC. 524. EXTENSION OF MEDICARE MUNICIPAL HEALTH
SERVICES DEMONSTRATION PROJECTS.
Section 9215(a) of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended by section 6135
of the Omnibus Budget Reconciliation Act of 1989, section
13557 of the Omnibus Budget Reconciliation Act of 1993,
and section 4017 of BBA, is amended by striking ‘‘Decem-
ber 31, 2000’’ and inserting ‘‘December 31, 2001’’.
SEC. 525. MEDICARE COORDINATED CARE DEMONSTRA-
TION PROJECT.
Section 4016(e)(1)(A)(ii) of the Balanced Budget Act
of 1997 (42 U.S.C. 1395b–1 note) is amended to read
as follows:
‘‘(ii) CANCER HOSPITAL.—In the case
of the project described in subsection
(b)(2)(C), the Secretary shall provide for
the transfer from the Federal Hospital In-
surance Trust Fund and the Federal Sup-
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plementary Insurance Trust Fund under
title XVIII of the Social Security Act (42
U.S.C. 1395i, 1395t), in such proportions
as the Secretary determines to be appro-
priate, of such funds as are necessary to
cover costs of the project, including costs
for information infrastructure and recur-
ring costs of case management services,
flexible benefits, and program manage-
ment.’’.
TITLE VI—MEDICAID
SEC. 601. MAKING MEDICAID DSH TRANSITION RULE PER-
MANENT.
(a) IN GENERAL.—Section 4721(e) of the Balanced
Budget Act of 1997 (42 U.S.C. 1396r–4 note) is
amended—
(1) in the matter before paragraph (1), by
striking ‘‘1923(g)(2)(A)’’ and ‘‘1396r–4(g)(2)(A)’’
and inserting ‘‘1923(g)(2)’’ and ‘‘1396r–4(g)(2)’’,
respectively;
(2) in paragraphs (1) and (2)—
(A) by striking ‘‘, and before July 1,
1999’’; and
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(B) by striking ‘‘in such section’’ and in-
serting ‘‘in subparagraph (A) of such section’’;
and
(3) by striking ‘‘and’’ at the end of paragraph
(1), by striking the period at the end of paragraph
(2) and inserting ‘‘; and’’, and by adding at the end
the following new paragraph:
‘‘(3) effective for State fiscal years that begin
on or after July 1, 1999, ‘or (b)(1)(B)’ were in-
serted 
in 
section 
1923(g)(2)(B)(ii)(I) 
after
‘(b)(1)(A)’.’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall take effect as if included in the enact-
ment of section 4721(e) of the Balanced Budget Act of
1997 (Public Law 105–33; 110 Stat. 514).
SEC. 602. INCREASE IN DSH ALLOTMENT FOR CERTAIN
STATES AND THE DISTRICT OF COLUMBIA.
(a) IN GENERAL.—The table in section 1923(f)(2)
(42 U.S.C. 1396r–4(f)(2)) is amended under each of the
columns for FY 00, FY 01, and FY 02—
(1) in the entry for the District of Columbia, by
striking ‘‘23’’ and inserting ‘‘32’’;
(2) in the entry for Minnesota, by striking ‘‘16’’
and inserting ‘‘33’’;
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(3) in the entry for New Mexico, by striking
‘‘5’’ and inserting ‘‘9’’; and
(4) in the entry for Wyoming, by striking ‘‘0’’
and inserting ‘‘.100’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) take effect on October 1, 1999, and applies
to expenditures made on or after such date.
SEC. 603. NEW PROSPECTIVE PAYMENT SYSTEM FOR FED-
ERALLY-QUALIFIED HEALTH CENTERS AND
RURAL HEALTH CLINICS.
(a) IN GENERAL.—Section 1902(a) of the Social Se-
curity Act (42 U.S.C. 1396a(a)) is amended—
(1) in paragraph (13)—
(A) in subparagraph (A), by adding ‘‘and’’
at the end;
(B) in subparagraph (B), by striking
‘‘and’’ at the end; and
(C) by striking subparagraph (C); and
(2) by inserting after paragraph (14) the fol-
lowing new paragraph:
‘‘(15) for payment for services described in
clause (B) or (C) of section 1905(a)(2) under the
plan in accordance with subsection (aa);’’.
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(b) NEW PROSPECTIVE PAYMENT SYSTEM.—Section
1902 of the Social Security Act (42 U.S.C. 1396a) is
amended by adding at the end the following:
‘‘(aa) PAYMENT FOR SERVICES PROVIDED BY FED-
ERALLY-QUALIFIED
HEALTH
CENTERS
AND
RURAL
HEALTH CLINICS.—
‘‘(1) IN GENERAL.—Beginning with fiscal year
2000 and each succeeding fiscal year, the State plan
shall provide for payment for services described in
section 1905(a)(2)(C) furnished by a Federally-
qualified health center and services described in sec-
tion 1905(a)(2)(B) furnished by a rural health clinic
in accordance with the provisions of this subsection.
‘‘(2) FISCAL YEAR 2000.—Subject to paragraph
(4), for services furnished during fiscal year 2000,
the State plan shall provide for payment for such
services in an amount (calculated on a per visit
basis) that is equal to 100 percent of the costs of
the center or clinic of furnishing such services dur-
ing fiscal year 1999 which are reasonable and re-
lated to the cost of furnishing such services, or
based on such other tests of reasonableness as the
Secretary prescribes in regulations under section
1833(a)(3), or, in the case of services to which such
regulations do not apply, the same methodology used
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under section 1833(a)(3), adjusted to take into ac-
count any increase in the scope of such services fur-
nished by the center or clinic during fiscal year
2000.
‘‘(3) FISCAL YEAR 2001 AND SUCCEEDING FIS-
CAL YEARS.—Subject to paragraph (4), for services
furnished during fiscal year 2001 or a succeeding
fiscal year, the State plan shall provide for payment
for such services in an amount (calculated on a per
visit basis) that is equal to the amount calculated for
such services under this subsection for the preceding
fiscal year—
‘‘(A) increased by the percentage increase
in the MEI (as defined in section 1842(i)(3))
applicable to primary care services (as defined
in section 1842(i)(4)) for that fiscal year; and
‘‘(B) adjusted to take into account any in-
crease in the scope of such services furnished by
the center or clinic during that fiscal year.
‘‘(4) ESTABLISHMENT OF INITIAL YEAR PAY-
MENT AMOUNT FOR NEW CENTERS OR CLINICS.—In
any case in which an entity first qualifies as a Fed-
erally-qualified health center or rural health clinic
after fiscal year 1999, the State plan shall provide
for payment for services described in section
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1905(a)(2)(C) furnished by the center or services
described in section 1905(a)(2)(B) furnished by the
clinic in the first fiscal year in which the center or
clinic so qualifies in an amount (calculated on a per
visit basis) that is equal to 100 percent of the costs
of furnishing such services during such fiscal year in
accordance with the regulations and methodology re-
ferred to in paragraph (2). For each fiscal year fol-
lowing the fiscal year in which the entity first quali-
fies as a Federally-qualified health center or rural
health clinic, the State plan shall provide for the
payment amount to be calculated in accordance with
paragraph (3).
‘‘(5) ADMINISTRATION IN THE CASE OF MAN-
AGED CARE.—In the case of services furnished by a
Federally-qualified health center or rural health clin-
ic pursuant to a contract between the center or clinic
and a managed care entity (as defined in section
1932(a)(1)(B)), the State plan shall provide for pay-
ment to the center or clinic (at least quarterly) by
the State of a supplemental payment equal to the
amount (if any) by which the amount determined
under paragraphs (2), (3), and (4) of this subsection
exceeds the amount of the payments provided under
the contract.
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‘‘(6) ALTERNATIVE
PAYMENT
METHODOLO-
GIES.—Notwithstanding any other provision of this
section, the State plan may provide for payment in
any fiscal year to a Federally-qualified health center
for services described in section 1905(a)(2)(C) or to
a rural health clinic for services described in section
1905(a)(2)(B) in an amount which is determined
under an alternative payment methodology that—
‘‘(A) is agreed to by the State and the cen-
ter or clinic; and
‘‘(B) results in payment to the center or
clinic of an amount which is at least equal to
the amount otherwise required to be paid to the
center or clinic under this section.’’.
(c) CONFORMING AMENDMENTS.—
(1) Section 4712 of the Balanced Budget Act
of 1997 (Public Law 105–33; 111 Stat. 508) is
amended by striking subsection (c).
(2) Section 1915(b) of the Social Security Act
(42 U.S.C. 1396n(b)) is amended by striking
‘‘1902(a)(13)(E)’’ 
and 
inserting 
‘‘1902(a)(15),
1902(aa),’’.
(d) EFFECTIVE DATE.—The amendments made by
this section take effect on October 1, 1999, and apply to
services furnished on or after such date.
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SEC. 604. PARITY IN REIMBURSEMENT FOR CERTAIN UTILI-
ZATION AND QUALITY CONTROL SERVICES.
(a) IN
GENERAL.—Section 1903(a)(3)(C)(i) (42
U.S.C. 1396b(a)(3)(C)(i)) is amended—
(1) by inserting ‘‘(other than a review described
in clause (ii))’’ after ‘‘quality review’’; and
(2) by inserting ‘‘(or under a contract with the
State that sets forth standards of performance
equivalent to those under section 1902(d))’’ before
the semicolon.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) apply to expenditures made on and after
the date of the enactment of this Act.
TITLE VII—STATE CHILDREN’S
HEALTH 
INSURANCE 
PRO-
GRAM (SCHIP)
SEC. 701. STABILIZING THE SCHIP ALLOTMENT FORMULA.
(a) IN
GENERAL.—Section 2104(b) (42 U.S.C.
1397dd(b)) is amended—
(1) in paragraph (2)(A)—
(A) in clause (i), by striking ‘‘through
2000’’ and inserting ‘‘and 1999’’; and
(B) in clause (ii), by striking ‘‘2001’’ and
inserting ‘‘2000’’;
(2) by amending paragraph (4) to read as fol-
lows:
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‘‘(4) FLOORS AND CEILINGS IN STATE ALLOT-
MENTS.—
‘‘(A) IN GENERAL.—The proportion of the
allotment under this subsection for a subsection
(b) State (as defined in subparagraph (D)) for
fiscal year 2000 and each fiscal year thereafter
shall be subject to the following floors and ceil-
ings:
‘‘(i) FLOOR
OF
$2,000,000.—A floor
equal to $2,000,000 divided by the total of
the amount available under this subsection
for all such allotments for the fiscal year.
‘‘(ii) ANNUAL FLOOR OF 10 PERCENT
BELOW
PRECEDING
FISCAL
YEAR’S
PRO-
PORTION.—A floor of 90 percent of the
proportion for the State for the preceding
fiscal year.
‘‘(iii) CUMULATIVE FLOOR OF 30 PER-
CENT BELOW THE FY 1999 PROPORTION.—
A floor of 70 percent of the proportion for
the State for fiscal year 1999.
‘‘(iv) CUMULATIVE
CEILING
OF
PERCENT ABOVE FY 1999 PROPORTION.—A
ceiling of 145 percent of the proportion for
the State for fiscal year 1999.
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‘‘(B) RECONCILIATION.—
‘‘(i) ELIMINATION OF ANY DEFICIT BY
ESTABLISHING
A
PERCENTAGE
INCREASE
CEILING FOR STATES WITH HIGHEST AN-
NUAL
PERCENTAGE
INCREASES.—To the
extent that the application of subpara-
graph (A) would result in the sum of the
proportions of the allotments for all sub-
section (b) States exceeding 1.0, the Sec-
retary shall establish a maximum percent-
age increase in such proportions for all
subsection (b) States for the fiscal year in
a manner so that such sum equals 1.0.
‘‘(ii) 
ALLOCATION
OF
SURPLUS
THROUGH PRO RATA INCREASE.—To the
extent that the application of subpara-
graph (A) would result in the sum of the
proportions of the allotments for all sub-
section (b) States being less than 1.0, the
proportions of such allotments (as com-
puted before the application of floors under
clauses (i), (ii), and (iii) of subparagraph
(A)) for all subsection (b) States shall be
increased in a pro rata manner (but not to
exceed the ceiling established under sub-
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paragraph (A)(iv)) so that (after the appli-
cation of such floors and ceiling) such sum
equals 1.0.
‘‘(C) 
CONSTRUCTION.—This 
paragraph
shall not be construed as applying to (or taking
into account) amounts of allotments redistrib-
uted under subsection (f).
‘‘(D) DEFINITIONS.—In this paragraph:
‘‘(i) PROPORTION OF ALLOTMENT.—
The term ‘proportion’ means, with respect
to the allotment of a subsection (b) State
for a fiscal year, the amount of the allot-
ment of such State under this subsection
for the fiscal year divided by the total of
the amount available under this subsection
for all such allotments for the fiscal year.
‘‘(ii) SUBSECTION
(b)
STATE.—The
term ‘subsection (b) State’ means one of
the 50 States or the District of Colum-
bia.’’;
(3) in paragraph (2)(B), by striking ‘‘the fiscal
year’’ and inserting ‘‘the calendar year in which
such fiscal year begins’’; and
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(4) in paragraph (3)(B), by striking ‘‘the fiscal
year involved’’ and inserting ‘‘the calendar year in
which such fiscal year begins’’.
(b) EFFECTIVE DATE.—The amendments made by
this section apply to allotments determined under title
XXI of the Social Security Act (42 U.S.C. 1397aa et seq.)
for fiscal year 2000 and each fiscal year thereafter.
SEC. 702. INCREASED ALLOTMENTS FOR TERRITORIES
UNDER THE STATE CHILDREN’S HEALTH IN-
SURANCE PROGRAM.
Section 2104(c)(4)(B) (42 U.S.C. 1397dd(c)(4)(B))
is amended by inserting ‘‘, $34,200,000 for each of fiscal
years 2000 and 2001, $25,200,000 for each of fiscal years
2002 through 2004, $32,400,000 for each of fiscal years
2005 and 2006, and $40,000,000 for fiscal year 2007’’
before the period.
Passed the House of Representatives November 5,
1999.
Attest:
JEFF TRANDAHL,
Clerk.