I
106TH CONGRESS
2D SESSION
H. R. 5001
To amend title XVIII of the Social Security Act to provide for equitable
payments to providers of services under the Medicare Program, and
to amend title XIX of such Act to provide for coverage of additional
children under the Medicaid Program.
IN THE HOUSE OF REPRESENTATIVES
JULY 27, 2000
Mrs. WILSON (for herself, Mr. LUTHER, Mr. RYAN of Wisconsin, Ms. HOOLEY
of Oregon, Mr. SABO, and Mr. MINGE) introduced the following bill;
which was referred to the Committee on Commerce, and in addition to
the Committee on Ways and Means, for a period to be subsequently de-
termined by the Speaker, in each case for consideration of such provisions
as fall within the jurisdiction of the committee concerned
A BILL
To amend title XVIII of the Social Security Act to provide
for equitable payments to providers of services under
the Medicare Program, and to amend title XIX of such
Act to provide for coverage of additional children under
the Medicaid Program.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; AMENDMENTS TO SOCIAL SECU-
RITY ACT; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Fair Care for Seniors and Children Act of 2000’’.
(b) AMENDMENTS TO SOCIAL SECURITY ACT.—Ex-
cept as otherwise specifically provided, whenever in this
Act an amendment is expressed in terms of an amendment
to or repeal of a section or other provision, the reference
shall be considered to be made to that section or other
provision of the Social Security Act.
(c) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; amendments to Social Security Act; table of contents.
TITLE I—MEDICARE PROGRAM
Subtitle A—Medicare+Choice Program
Sec. 101. Increasing minimum payment amount.
Sec. 102. Increase in national per capita Medicare+Choice growth percentage
in 2001 and 2002.
Sec. 103. Permanently removing application of budget neutrality beginning in
2001.
Sec. 104. Allowing movement to 50:50 percent blend in 2001.
Sec. 105. Increased update for payment areas with only one or no
Medicare+Choice contracts.
Sec. 106. Permitting higher negotiated rates in certain Medicare+Choice pay-
ment areas below national average.
Sec. 107. Reasonable cost reimbursement for payment areas with no more than
one medicare+choice contract.
Sec. 108. 10-Year phase in of risk adjustment based on data from all settings.
Sec. 109. Delay from July to November 2000 in deadline for offering and with-
drawing Medicare+Choice plans for 2001.
Subtitle B—Inpatient Hospital Services
Sec. 111. Elimination of authority to estimate costs incurred by a hospital for
wages.
Subtitle C—Home Health Services
Sec. 121. Elimination of 15 percent reduction in payment rates under the medi-
care prospective payment system for home health services.
TITLE II—MEDICAID PROGRAM
Subtitle A—Expansion of Coverage of Children under the Medicaid Program
Sec. 201. Use of State Children’s Health Insurance Program funds for en-
hanced matching rate for coverage of additional children under
the medicaid program.
Sec. 202. Expansion of presumptive eligibility option for children under the
medicaid program.
Sec. 203. Increased SCHIP flexibility for states with high medicaid child in-
come levels when SCHIP initiated.
Subtitle B—Prospective Payment System for Federally-qualified Health
Centers and Rural Health Clinics
Sec. 211. Establishment of prospective payment system for federally-qualified
health centers and rural health clinics.
TITLE I—MEDICARE PROGRAM
Subtitle A—Medicare+Choice
Program
SEC. 101. INCREASING MINIMUM PAYMENT AMOUNT.
Section 
1853(c)(1)(B)(ii) 
(42 
U.S.C. 
1395w–
23(c)(1)(B)(ii)) is amended—
(1) by striking ‘‘(ii) For a succeeding year’’ and
inserting ‘‘(ii)(I) Subject to subclause (II), for a suc-
ceeding year’’; and
(2) by adding at the end the following new sub-
clause:
‘‘(II) For 2001 for any area in a Met-
ropolitan Statistical Area with a population
of more than 250,000, $525 (and for any
other area, $475).’’.
SEC. 
102. 
INCREASE 
IN 
NATIONAL 
PER 
CAPITA
MEDICARE+CHOICE GROWTH PERCENTAGE
IN 2001 AND 2002.
Section 
1853(c)(6)(B) 
(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. 103. PERMANENTLY REMOVING APPLICATION OF
BUDGET NEUTRALITY BEGINNING IN 2002.
Section 1853(c) (42 U.S.C. 1395w–23(c)) is
amended—
(1) in paragraph (1)(A), in the matter following
clause (ii), by inserting ‘‘(for years before 2001)’’
after ‘‘multiplied’’; and
(2) in paragraph (5), by inserting ‘‘(before
2001)’’ after ‘‘for each year’’.
SEC. 104. ALLOWING MOVEMENT TO 50:50 PERCENT BLEND
IN 2001.
Section 1853(c)(2) (42 U.S.C. 1395w–23(c)(2)) is
amended—
(1) by adding ‘‘and’’ at the end of subpara-
graph (C);
(2) by striking subparagraphs (D) and (E);
(3) by redesignating subparagraph (F) and sub-
paragraph (D); and
(4) in subparagraph (D), as so redesignated, by
striking ‘‘2002’’ and inserting ‘‘2000’’.
SEC. 105. INCREASED UPDATE FOR PAYMENT AREAS WITH
ONLY ONE OR NO MEDICARE+CHOICE CON-
TRACTS.
(a) IN GENERAL.—Section 1853(c)(1)(C)(ii) (42
U.S.C. 1395w–23(c)(1)(C)(ii)) is amended—
(1) by striking ‘‘(ii) For a subsequent year’’
and inserting ‘‘(ii)(I) Subject to subclause (II), for
a subsequent year’’; and
(2) by adding at the end the following new sub-
clause:
‘‘(II) During 2001, 2002, 2003, 2004,
and 
2005, 
in 
the 
case 
of 
a
Medicare+Choice payment area in which
there is no more than one contract entered
into under this part as of July 1 before the
beginning of the year, 102.5 percent of the
annual Medicare+Choice capitation rate
under this paragraph for the area for the
previous year.’’.
(b) CONSTRUCTION.—The amendments made by sub-
section (a) do not affect the payment of a first-time bonus
under section 1853(i) of the Social Security Act (42
U.S.C. 1395w–23(i)).
SEC. 106. PERMITTING HIGHER NEGOTIATED RATES IN
CERTAIN 
MEDICARE+CHOICE 
PAYMENT
AREAS BELOW NATIONAL AVERAGE.
Section 1853(c)(1) (42 U.S.C. 1395w–23(c)(1)) is
amended—
(1) in the matter before subparagraph (A), by
striking ‘‘or (C)’’ and inserting ‘‘(C), or (D)’’; and
(2) by adding at the end the following new sub-
paragraph:
‘‘(D) 
PERMITTING
HIGHER
RATES
THROUGH NEGOTIATION.—
‘‘(i) IN GENERAL.—For each year be-
ginning with 2001, in the case of a
Medicare+Choice payment area for which
the Medicare+Choice capitation rate under
this paragraph would otherwise be less
than the United States per capita cost
(USPCC), as calculated by the Secretary,
a Medicare+Choice organization may ne-
gotiate with the Secretary an annual per
capita rate that—
‘‘(I) reflects an annual rate of in-
crease up to the rate of increase speci-
fied in clause (ii);
‘‘(II) takes into account audited
current data supplied by the organiza-
tion on its adjusted community rate
(as defined in section 1854(f)(3)); and
‘‘(III) does not exceed the United
States per capita cost, as projected by
the Secretary for the year involved.
‘‘(ii) MAXIMUM
RATE
DESCRIBED.—
The rate of increase specified in this clause
for a year is the rate of inflation in private
health insurance for the year involved, as
projected by the Secretary, and includes
such adjustments as may be necessary to
reflect the demographic characteristics in
the population under this title.
‘‘(iii) ADJUSTMENTS
FOR
OVER
OR
UNDER
PROJECTIONS.—If this subpara-
graph is applied to an organization and
payment area for a year, in applying this
subparagraph for a subsequent year the
provisions of paragraph (6)(C) shall apply
in the same manner as such provisions
apply under this paragraph.’’.
SEC. 107. REASONABLE COST REIMBURSEMENT FOR PAY-
MENT AREAS WITH NO MORE THAN ONE
MEDICARE+CHOICE CONTRACT.
(a) IN GENERAL.—Section 1853 (42 U.S.C. 1395w–
23) is amended—
(1) in subsection (a)(1)(A) by striking ‘‘(g), and
(i)’’ and inserting ‘‘(g), (i), and (j)’’; and
(2) by adding at the end the following new sub-
section:
‘‘(j) REASONABLE COST REIMBURSEMENT FOR PAY-
MENT
AREAS
WITH
NO
MORE
THAN
ONE
MEDICARE+CHOICE CONTRACT.—
‘‘(1) IN GENERAL.—Subject to paragraph (2),
in the case of a Medicare+Choice payment area in
which there is no more than 1 contract entered into
under this part as of July 1 before the beginning of
the 
following 
year, 
at 
the 
election 
of 
a
Medicare+Choice organization the amount of pay-
ment under this section for such following year for
enrollment under a Medicare+Choice plan offered by
the organization in that area shall be the amount of
payment otherwise applicable to an eligible organiza-
tion that has entered into a reasonable cost reim-
bursement contract with the Secretary under section
1876(h).
‘‘(2) LIMITATION.—A Medicare+Choice organi-
zation that has negotiated a higher an annual per
capita rate under subsection (c)(1)(D) for a year
may not elect reimbursement under paragraph (1)
for that year.’’.
SEC. 108. 10-YEAR PHASE IN OF RISK ADJUSTMENT BASED
ON DATA FROM ALL SETTINGS.
Section 
1853(a)(3)(C)(ii) 
(42 
U.S.C. 
1395w–
23(c)(1)(C)(ii)) is amended—
(1) by striking the period at the end of sub-
clause (II) and inserting a semicolon; and
(2) by adding after and below subclause (II) the
following:
‘‘and, beginning in 2004, insofar as such
risk adjustment is based on data from all
settings, the methodology shall be phased
in in equal increments over a 10-year pe-
riod, beginning with 2004 or (if later) the
first year in which such data are used.’’.
SEC. 109. 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 October 1, 2000,
and any such organization that provided notice of with-
drawal of such a plan during 2000 before the date of the
enactment of this Act may rescind such withdrawal at any
time before November 1, 2000.
Subtitle B—Inpatient Hospital
Services
SEC. 111. ELIMINATION OF AUTHORITY TO ESTIMATE
COSTS 
INCURRED 
BY 
A 
HOSPITAL 
FOR
WAGES.
(a) IN GENERAL.—The first sentence of section
1886(d)(3)(E) (42 U.S.C. 1395ww(d)(3)(E)) is amended
by striking ‘‘, (as estimated by the Secretary from time
to time) of hospitals’ costs’’ and inserting ‘‘of each hos-
pital’s costs (based on the most recent data available to
the Secretary with respect to each hospital)’’.
(b) SPECIAL RULE FOR PUERTO RICO HOSPITALS.—
Section 1886(d)(3)(E) (42 U.S.C. 1395ww(d)(3)(E)) is
amended by adding at the end the following new sentence:
‘‘In the case of a subsection (d) Puerto Rico hospital, the
first sentence of this subparagraph shall be applied as in
effect on the date that precedes the date of the enactment
of the Fair Care for Seniors and Children Act of 2000.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to discharges occur-
ring on or after January 1, 2001.
Subtitle C—Home Health Services
SEC. 121. ELIMINATION OF 15 PERCENT REDUCTION IN
PAYMENT RATES UNDER THE MEDICARE
PROSPECTIVE PAYMENT SYSTEM FOR HOME
HEALTH SERVICES.
(a) IN GENERAL.—Section 1895(b)(3)(A) (42 U.S.C.
1395fff(b)(3)(A)), as amended by sections 302(b) and
303(f) of the Medicare, Medicaid, and SCHIP Balanced
Budget Refinement Act of 1999 (113 Stat. 1501A–359,
361), as enacted into law by section 1000(a)(6) of Public
Law 106–113, is amended to read as follows:
‘‘(A) INITIAL BASIS.—Under such system
the Secretary shall provide for computation of
a standard prospective payment amount (or
amounts). Such amount (or amounts) shall ini-
tially be based on the most current audited cost
report data available to the Secretary and shall
be computed in a manner so that the total
amounts payable under the system for the 12-
month period beginning on the date the Sec-
retary implements the system shall be equal to
the total amount that would have been made if
the system had not been in effect and if section
1861(v)(1)(L)(ix) had not been enacted. Each
such amount shall be standardized in a manner
that eliminates the effect of variations in rel-
ative case mix and area wage adjustments
among different home health agencies in a
budget neutral manner consistent with the case
mix and wage level adjustments provided under
paragraph (4)(A). Under the system, the Sec-
retary may recognize regional differences or dif-
ferences based upon whether or not the services
or agency are in an urbanized area.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect as if included in the enact-
ment of the Medicare, Medicaid, and SCHIP Balanced
Budget Refinement Act of 1999 (Public Law 106–113).
TITLE II—MEDICAID PROGRAM
Subtitle A—Expansion of Coverage
of Children under the Medicaid
Program
SEC. 201. USE OF STATE CHILDREN’S HEALTH INSURANCE
PROGRAM FUNDS FOR ENHANCED MATCH-
ING RATE FOR COVERAGE OF ADDITIONAL
CHILDREN UNDER THE MEDICAID PROGRAM.
(a) IN GENERAL.—Section 1905 (42 U.S.C. 1396d)
is amended—
(1) in subsection (b), by striking ‘‘or subsection
(u)(3)’’ and inserting ‘‘, subsection (u)(3), or sub-
section (u)(4)(A)’’; and
(2) in subsection (u) (as added by section
4911(a)(2) of the Balanced Budget Act of 1997 and
as amended by section 162 of Public Law 105–
100)—
(A) by redesignating paragraph (4) as
paragraph (5); and
(B) by inserting after paragraph (3) the
following new paragraph:
‘‘(4)(A) For purposes of subsection (b), the expendi-
tures described in this subparagraph are expenditures for
medical assistance for waivered low-income children de-
scribed in subparagraph (B) but—
‘‘(i) only in the case of children residing in a
State described in subparagraph (C); and
‘‘(ii) only to the extent the number of full-year
equivalent waivered low-income children enrolled
under the State plan under this title for the fiscal
year exceeds the number of waivered low-income
children described in subparagraph (D)(i) for the
State for the fiscal year.
‘‘(B) For purposes of this paragraph, the term
‘waivered low-income child’ means a child whose family in-
come exceeds the minimum income level required to be es-
tablished for the age of such child under section
1902(l)(2) in order for the child to be eligible for medical
assistance under this title, but does not exceed the med-
icaid applicable income level (as defined in section
2110(b)(4) but determined as if ‘June 1, 1997’ were sub-
stituted for ‘March 31, 1997’) for that child.
‘‘(C) A State described in this subparagraph is a
State that—
‘‘(i) has under a waiver authorized by the Sec-
retary or under section 1902(r)(2) established a
medicaid applicable income level (as defined in sec-
tion 2110(b)(4) but determined as if ‘June 1, 1997’
were substituted for ‘March 31, 1997’) for children
under 19 years of age residing in the State that is
at or above 185 percent of the poverty line; and
‘‘(ii) demonstrates to the satisfaction of the
Secretary a commitment to reach and enroll children
who are eligible for, but not enrolled under, the
State plan through means, such as the following:
‘‘(I) Eliminating the assets test for eligi-
bility of waivered low-income children.
‘‘(II) Using shortened and simplified appli-
cations for such children.
‘‘(III) Allowing applications for such chil-
dren to be submitted by mail or through tele-
phone.
‘‘(IV) Outstationing State eligibility work-
ers at sites that are frequented by families with
children, including schools, child care centers,
churches, centers providing Head Start services,
local offices of the special supplemental food
program for women, infants and young children
(WIC) established under section 17 of the Child
Nutrition Act of 1966, community centers, Job
Corps centers established under part B of title
IV of the Job Training Partnership Act or sub-
title C of title I of the Workforce Investment
Act of 1998, sites offering the recognized equiv-
alent of a secondary school degree, offices of
tribal organizations (as defined in section 4(l)
of the Indian Self-Determination and Education
Assistance Act), and Social Security Adminis-
tration field offices.
‘‘(V) Using presumptive eligibility for
waivered low-income children.
‘‘(VI) Collaborating with public and private
entities to conduct outreach campaigns to enroll
such children.
‘‘(D)(i) For purposes of subparagraph (A)(ii), the
number of waivered low-income children for a State de-
scribed in this clause for—
‘‘(I) fiscal year 1998, is equal to the number of
full-year equivalent waivered low-income children en-
rolled under the State plan under this title for fiscal
year 1997; and
‘‘(II) fiscal year 1999 or a succeeding fiscal
year, is equal to the number of waivered low-income
children determined under this clause for the pre-
ceding fiscal year increased by the number of per-
centage points determined under clause (ii) for the
State for the fiscal year involved.
‘‘(ii) The number of percentage points determined
under this clause for a State for a fiscal year is equal to
the number of percentage points by which—
‘‘(I) the arithmetic average of the total number
of children in the State set forth in the 3 most re-
cent March supplements to the Current Population
Survey of the Bureau of the Census before the be-
ginning of the fiscal year; exceeds
‘‘(II) the arithmetic average of such total num-
ber set forth in the second, third, and fourth most
recent March supplements to such Survey before the
beginning of the fiscal year.
‘‘(E) For purposes of section 2104(d) (regarding the
reduction of an allotment under title XXI) the amount de-
termined under paragraph (2) of that section shall, with
respect to expenditures described in subparagraph (A),
only take into account the amount by which—
‘‘(i) the payments made to a State for such ex-
penditures for a fiscal year on the basis of an en-
hanced FMAP under the fourth sentence of sub-
section (b); exceed
‘‘(ii) the amount of payments that would have
been made for the expenditures if the enhanced
FMAP did not apply.
‘‘(F) Each State shall submit to the Secretary such
information, at such time and in such manner, as the Sec-
retary determines is necessary to ensure that the require-
ments of this paragraph are satisfied. The Secretary shall
ensure that information is provided under this subsection
in a manner that is consistent with other reporting re-
quirements for information required to be submitted by
a State under this title and title XXI, and avoids duplica-
tion of reporting requirements.
‘‘(G) The Secretary shall regularly examine the pay-
ments made to a State for the expenditures described in
subparagraph (A) to confirm that the payments are attrib-
utable to expenditures described in such subparagraph.’’.
(b) CONFORMING AMENDMENT.—Section 2104(d)(2)
(42 U.S.C. 1397dd(d)(2)) is amended by inserting ‘‘sub-
ject to section 1905(u)(4)(E),’’ after ‘‘(2)’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall be effective as if included in the enact-
ment of section 4911 of the Balanced Budget Act of 1997.
SEC. 202. EXPANSION OF PRESUMPTIVE ELIGIBILITY OP-
TION FOR CHILDREN UNDER THE MEDICAID
PROGRAM.
(a) IN GENERAL.—Section 1920A(b)(3)(A)(i) (42
U.S.C. 1396r–1a(b)(3)(A)(i)) is amended—
(1) by striking ‘‘or (II)’’ and inserting ‘‘, (II)’’;
and
(2) by inserting before the semicolon ‘‘, eligi-
bility for assistance under the State plan under part
A of title IV, eligibility of a child to receive medical
assistance under the State plan under this title or
title XXI, (III) is a staff member of an elementary
school or secondary school, as such terms are de-
fined in section 14101 of the Elementary and Sec-
ondary Education Act of 1965 (20 U.S.C. 8801), a
child care resource and referral center, or an agency
administering a State plan under part D of title IV,
or (IV) is so designated by the State’’.
(b) CONFORMING AMENDMENTS.—Section 1920A
(42 U.S.C. 1396r–1a) is amended—
(1) in subsection (b)(3)(A)(ii), by striking
‘‘paragraph 
(1)(A)’’ 
and 
inserting 
‘‘paragraph
(2)(A)’’; and
(2) in subsection (c)(2), in the matter preceding
subparagraph 
(A), 
by 
striking 
‘‘subsection
(b)(1)(A)’’ and inserting ‘‘subsection (b)(2)(A)’’.
SEC. 203. INCREASED SCHIP FLEXIBILITY FOR STATES
WITH HIGH MEDICAID CHILD INCOME LEV-
ELS WHEN SCHIP INITIATED.
(a) USE
OF ENHANCED MATCH
FOR EXPANDED
MEDICAID CHILD COVERAGE.—Section 1905 (42 U.S.C.
1396d), as amended by section 201, is further amended—
(1) in subsection (b), by striking ‘‘or subsection
(u)(4)(A)’’ and inserting ‘‘, subsection (u)(4)(A), or
subsection (u)(5)(A)’’; and
(2) in subsection (u)—
(A) by redesignating paragraph (5) as
paragraph (6); and
(B) by inserting after paragraph (4) the
following new paragraph:
‘‘(5)(A) For purposes of subsection (b), the expendi-
tures described in this subparagraph are expenditures for
medical assistance for expansion children (as defined in
subparagraph (B)) but—
‘‘(i) only in the case of expansion children resid-
ing in a State that has, under a waiver authorized
by the Secretary under section 1115 or under sec-
tion 1902(r)(2), established a medicaid applicable in-
come level (as defined in section 2110(b)(4)) for
children under 19 years of age residing in the State
that is at or above 185 percent of the poverty line;
and
‘‘(ii) only for a fiscal year to the extent the full-
year equivalent number of expansion children en-
rolled under the State plan under this title for the
fiscal year exceeds the number of such children en-
rolled under the plan for the State during the first
month in which the State’s child health plan under
title XXI was effective.
‘‘(B) For purposes of this paragraph, the term ‘ex-
pansion child’ means a child who is eligible for medical
assistance under this title only due to a waiver described
in subparagraph (A)(i), and whose family income does not
exceed the medicaid applicable income level (as defined in
section 2110(b)(4)) for that child.’’.
(b) APPLICATION OF INCREASED PROPORTION OF
SCHIP ALLOTMENT FOR SPECIAL INITIATIVES AND SIMI-
LAR PURPOSES.—Section 2105(c)(2) of such Act (42
U.S.C. 1397ee(c)(2)) is amended by adding at the end the
following new subparagraph:
‘‘(C) INCREASED
FLEXIBILITY
FOR
CER-
TAIN STATES.—In the case of a State with a
medicaid applicable income level that is at or
above 185 percent of the poverty line—
‘‘(i) the limitation under subpara-
graph (A) shall not apply to payments and
expenditures 
described 
in 
subsection
(a)(2)(A) or (a)(2)(B); and
‘‘(ii) in applying such limitation to ex-
penditures and costs described in sub-
section (a)(2)(C) or (a)(2)(D), any ref-
erence in subparagraph (A) to a sum is
deemed a reference to the amount of the
State’s allotment under section 2104 for
the fiscal year involved.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall be effective as if included in the enact-
ment of section 4911 of the Balanced Budget Act of 1997.
Subtitle B—Prospective Payment
System for Federally-qualified
Health 
Centers 
and 
Rural
Health Clinics
SEC. 211. ESTABLISHMENT OF PROSPECTIVE PAYMENT
SYSTEM 
FOR 
FEDERALLY-QUALIFIED
HEALTH CENTERS AND RURAL HEALTH CLIN-
ICS.
(a) IN
GENERAL.—Section 1902(a) (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);’’.
(b) NEW PROSPECTIVE PAYMENT SYSTEM.—Section
1902 (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
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
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.
‘‘(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) (42 U.S.C. 1396n(b)) is
amended by striking ‘‘1902(a)(13)(E)’’ and insert-
ing ‘‘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.
Æ