255
(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
the 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, 1998, and before the
date of the enactment of this Act. In applying this
paragraph, such an individual shall be treated, for
purposes of part C of title XVIII of the Social Secu-
rity Act, as having discontinued enrollment in such
a plan as of the date of the enactment of this Act.
SEC. 621. PROVIDING CHOICE FOR SKILLED NURSING FA-
CILITY 
SERVICES 
UNDER 
THE
MEDICARE+CHOICE PROGRAM.
(a) IN GENERAL.—Section 1852 (42 U.S.C. 1395w–
22) is amended by adding at the end the following new
subsection:
‘‘(l) RETURN TO HOME SKILLED NURSING FACILI-
TIES FOR COVERED POST-HOSPITAL EXTENDED CARE
SERVICES.—
256
‘‘(1) ENSURING RETURN TO HOME SNF.—
‘‘(A) IN GENERAL.—In providing coverage
of post-hospital extended care services, a
Medicare+Choice plan shall provide for such
coverage through a home skilled nursing facility
if the following conditions are met:
‘‘(i) ENROLLEE ELECTION.—The en-
rollee elects to receive such coverage
through such facility.
‘‘(ii) SNF AGREEMENT.—The facility
has a contract with the Medicare+Choice
organization for the provision of such serv-
ices, or the facility agrees to accept sub-
stantially similar payment under the same
terms and conditions that apply to simi-
larly situated skilled nursing facilities that
are 
under 
contract 
with 
the
Medicare+Choice organization for the pro-
vision of such services and through which
the enrollee would otherwise receive such
services.
‘‘(B) MANNER
OF
PAYMENT
TO
HOME
SNF.—The organization shall provide payment
to the home skilled nursing facility consistent
257
with the contract or the agreement described in
subparagraph (A)(ii), as the case may be.
‘‘(2) NO
LESS
FAVORABLE
COVERAGE.—The
coverage provided under paragraph (1) (including
scope of services, cost-sharing, and other criteria of
coverage) shall be no less favorable to the enrollee
than the coverage that would be provided to the en-
rollee with respect to a skilled nursing facility the
post-hospital extended care services of which are
otherwise covered under the Medicare+Choice plan.
‘‘(3) RULE
OF
CONSTRUCTION.—Nothing in
this subsection shall be construed to do the fol-
lowing:
‘‘(A) To require coverage through a skilled
nursing facility that is not otherwise qualified
to provide benefits under part A for medicare
beneficiaries not enrolled in a Medicare+Choice
plan.
‘‘(B) To prevent a skilled nursing facility
from refusing to accept, or imposing conditions
upon the acceptance of, an enrollee for the re-
ceipt of post-hospital extended care services.
‘‘(4) DEFINITIONS.—In this subsection:
‘‘(A) HOME
SKILLED
NURSING
FACIL-
ITY.—The term ‘home skilled nursing facility’
258
means, with respect to an enrollee who is enti-
tled to receive post-hospital extended care serv-
ices under a Medicare+Choice plan, any of the
following skilled nursing facilities:
‘‘(i) SNF RESIDENCE AT TIME OF AD-
MISSION.—The skilled nursing facility in
which the enrollee resided at the time of
admission to the hospital preceding the re-
ceipt of such post-hospital extended care
services.
‘‘(ii) SNF IN CONTINUING CARE RE-
TIREMENT COMMUNITY.—A skilled nursing
facility that is providing such services
through a continuing care retirement com-
munity (as defined in subparagraph (B))
which provided residence to the enrollee at
the time of such admission.
‘‘(iii) SNF RESIDENCE OF SPOUSE AT
TIME OF DISCHARGE.—The skilled nursing
facility in which the spouse of the enrollee
is residing at the time of discharge from
such hospital.
‘‘(B) 
CONTINUING
CARE
RETIREMENT
COMMUNITY.—The term ‘continuing care retire-
ment community’ means, with respect to an en-
259
rollee in a Medicare+Choice plan, an arrange-
ment under which housing and health-related
services are provided (or arranged) through an
organization for the enrollee under an agree-
ment that is effective for the life of the enrollee
or for a specified period.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) applies with respect to contracts entered
into or renewed on or after the date of the enactment of
this Act.
(c) MEDPAC STUDY.—
(1) STUDY.—The Medicare Payment Advisory
Commission shall conduct a study analyzing the ef-
fects of the amendment made by subsection (a) on
Medicare+Choice organizations. In conducting such
study, the Commission shall examine the effects (if
any) such amendment has had on—
(A) the scope of additional benefits pro-
vided under the Medicare+Choice program;
(B) the administrative and other costs in-
curred by Medicare+Choice organizations;
(C) the contractual relationships between
such organizations and skilled nursing facilities.
(2) REPORT.—Not later than 2 years after the
date of the enactment of this Act, the Commission
260
shall submit to Congress a report on the study con-
ducted under paragraph (1).
SEC. 
622. 
PROVIDING 
FOR 
ACCOUNTABILITY 
OF
MEDICARE+CHOICE PLANS.
(a) MANDATORY REVIEW OF ACR SUBMISSIONS BY
THE CHIEF ACTUARY OF THE HEALTH CARE FINANCING
ADMINISTRATION.—Section 1854(a)(5)(A) (42 U.S.C.
1395w–24(a)(5)(A)) is amended—
(1) by striking ‘‘value’’ and inserting ‘‘values’’;
and
(2) by adding at the end the following: ‘‘The
Chief Actuary of the Health Care Financing Admin-
istration shall review the actuarial assumptions and
data used by the Medicare+Choice organization with
respect to such rates, amounts, and values so sub-
mitted to determine the appropriateness of such as-
sumptions and data.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) applies to submissions made on or after
January 1, 2001.
261
Subtitle C—Other Managed Care
Reforms
SEC. 631. 1-YEAR EXTENSION OF SOCIAL HEALTH MAINTE-
NANCE ORGANIZATION (SHMO) DEMONSTRA-
TION PROJECT.
Section 4018(b)(1) of the Omnibus Budget Reconcili-
ation Act of 1987, as amended by section 531(a)(1) of
BBRA (113 Stat. 1501A–388), is amended by striking
‘‘18 months’’ and inserting ‘‘30 months’’.
SEC. 632. REVISED TERMS AND CONDITIONS FOR EXTEN-
SION OF MEDICARE COMMUNITY NURSING
ORGANIZATION 
(CNO) 
DEMONSTRATION
PROJECT.
(a) IN GENERAL.—Section 532 of BBRA (113 Stat.
1501A–388) is amended—
(1) in subsection (a), by striking the second
sentence; and
(2) by striking subsection (b) and inserting the
following new subsection:
‘‘(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-
ducted under the same terms and conditions as ap-
plied to such demonstration during 1999.
262
‘‘(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 and furnished
during—
‘‘(i) the period beginning with October
1, 2000, and ending with December 31,
2000, shall be determined by actuarially
adjusting the actual capitation rate paid
for such services in 1999 for inflation, uti-
lization, and other changes to the CNO
service package, and by reducing such ad-
justed capitation rate by 10 percent in the
case of the demonstration sites located in
Arizona, Minnesota, and Illinois, and 15
percent for the demonstration site located
in New York; and
‘‘(ii) 2001 shall be determined by ac-
tuarially adjusting the capitation rate de-
263
termined under clause (i) for inflation, uti-
lization, and other changes to the CNO
service package.
‘‘(B) 
TARGETED
CASE
MANAGEMENT
FEE.—Effective October 1, 2000—
‘‘(i) the case management fee per en-
rollee per month for—
‘‘(I) the period described in sub-
paragraph (A)(i) shall be determined
by actuarially adjusting the case man-
agement fee for 1999 for inflation;
and
‘‘(II) 2001 shall be determined
by actuarially adjusting the amount
determined under subclause (I) for in-
flation; and
‘‘(ii) such case management fee shall
be paid only for enrollees who are classified
as moderately frail or frail pursuant to cri-
teria established by the Secretary.
‘‘(C) GREATER UNIFORMITY IN CLINICAL
FEATURES AMONG SITES.—Each project shall
implement for each site—
‘‘(i) protocols for periodic telephonic
contact with enrollees based on—
264
‘‘(I) the results of such standard-
ized written health assessment; and
‘‘(II) the application of appro-
priate care planning approaches;
‘‘(ii) disease management programs
for targeted diseases (such as congestive
heart failure, arthritis, diabetes, and hy-
pertension) that are highly prevalent in the
enrolled populations;
‘‘(iii) systems and protocols to track
enrollees through hospitalizations, includ-
ing pre-admission planning, concurrent
management 
during 
inpatient 
hospital
stays, and post-discharge assessment, plan-
ning, and follow-up; and
‘‘(iv) standardized patient educational
materials for specified diseases and health
conditions.
‘‘(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.—
265
‘‘(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.—The Secretary shall sub-
mit a final report to such Committees on such dem-
onstration projects not later than July 1, 2002.
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-
266
cluded in such reports shall include a comparison
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 and are not
enrolled 
in 
such 
a 
project, 
or 
in 
a
Medicare+Choice plan under part C of such
title, a plan offered by an eligible organization
under section 1876 of such Act, or a health
care 
prepayment 
plan 
under 
section
1833(a)(1)(A) of such Act.’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall be effective as if included in the enact-
ment of section 532 of BBRA (113 Stat. 1501A–388).
SEC. 633. EXTENSION OF MEDICARE MUNICIPAL HEALTH
SERVICES DEMONSTRATION PROJECTS.
Section 9215(a) of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (42 U.S.C. 1395b–1 note), as
amended by section 6135 of the Omnibus Budget Rec-
267
onciliation Act of 1989, section 13557 of the Omnibus
Budget Reconciliation Act of 1993, section 4017 of BBA,
and section 534 of BBRA (113 Stat. 1501A–390), is
amended by striking ‘‘December 31, 2002’’ and inserting
‘‘December 31, 2004’’.
SEC. 634. SERVICE AREA EXPANSION FOR MEDICARE COST
CONTRACTS DURING TRANSITION PERIOD.
Section 1876(h)(5) (42 U.S.C. 1395mm(h)(5)) is
amended—
(1) by redesignating subparagraph (B) as sub-
paragraph (C); and
(2) by inserting after subparagraph (A), the fol-
lowing new subparagraph:
‘‘(B) Subject to subparagraph (C), the Secretary
shall approve an application for a modification to a rea-
sonable cost contract under this section in order to expand
the service area of such contract if—
‘‘(i) such application is submitted to the Sec-
retary on or before September 1, 2003; and
‘‘(ii) the Secretary determines that the organi-
zation with the contract continues to meet the re-
quirements applicable to such organizations and con-
tracts under this section.’’.
268
TITLE VII—MEDICAID
SEC. 701. DSH PAYMENTS.
(a) MODIFICATIONS TO DSH ALLOTMENTS.—
(1) INCREASED
ALLOTMENTS
FOR
FISCAL
YEARS 2001 AND 2002.—
(A) IN
GENERAL.—Section 1923(f) (42
U.S.C. 1396r–4(f))) is amended—
(i) in paragraph (2), by striking ‘‘The
DSH allotment’’ and inserting ‘‘Subject to
paragraph (4), the DSH allotment’’;
(ii) by redesignating paragraph (4) as
paragraph (6); and
(iii) by inserting after paragraph (3)
the following new paragraph:
‘‘(4) SPECIAL RULE FOR FISCAL YEARS 2001
AND 2002.—
‘‘(A) IN GENERAL.—Notwithstanding para-
graph (2), the DSH allotment for any State
for—
‘‘(i) fiscal year 2001, shall be the
DSH allotment determined under para-
graph (2) for fiscal year 2000 increased,
subject to subparagraph (B) and para-
graph (5), by the percentage change in the
consumer price index for all urban con-
269
sumers (all items; U.S. city average) for
fiscal year 2000; and
‘‘(ii) fiscal year 2002, shall be the
DSH allotment determined under clause
(i) increased, subject to subparagraph (B)
and paragraph (5), by the percentage
change in the consumer price index for all
urban consumers (all items; U.S. city aver-
age) for fiscal year 2001.
‘‘(B) LIMITATION.—Subparagraph (B) of
paragraph (3) shall apply to subparagraph (A)
of this paragraph in the same manner as that
subparagraph (B) applies to paragraph (3)(A).
‘‘(C) NO
APPLICATION
TO
ALLOTMENTS
AFTER FISCAL YEAR 2002.—The DSH allotment
for any State for fiscal year 2003 or any suc-
ceeding fiscal year shall be determined under
paragraph (3) without regard to the DSH allot-
ments determined under subparagraph (A) of
this paragraph.’’.
(2) SPECIAL RULE FOR MEDICAID DSH ALLOT-
MENT FOR EXTREMELY LOW DSH STATES.—
(A) IN
GENERAL.—Section 1923(f) (42
U.S.C. 1396r–4(f)), as amended by paragraph
270
(1), is amended by inserting after paragraph
(4) the following new paragraph:
‘‘(5) SPECIAL RULE FOR EXTREMELY LOW DSH
STATES.—In the case of a State in which the total
expenditures under the State plan (including Federal
and State shares) for disproportionate share hospital
adjustments under this section for fiscal year 1999,
as reported to the Administrator of the Health Care
Financing Administration as of August 31, 2000, is
greater than 0 but less than 1 percent of the State’s
total amount of expenditures under the State plan
for medical assistance during the fiscal year, the
DSH allotment for fiscal year 2001 shall be in-
creased to 1 percent of the State’s total amount of
expenditures under such plan for such assistance
during such fiscal year. In subsequent fiscal years,
such increased allotment is subject to an increase for
inflation as provided in paragraph (3)(A).’’.
(B) CONFORMING
AMENDMENT.—Section
1923(f)(3)(A) (42 U.S.C. 1396r–4(f)(3)(A)) is
amended by inserting ‘‘and paragraph (5)’’
after ‘‘subparagraph (B)’’.
(3) EFFECTIVE DATE.—The amendments made
by paragraphs (1) and (2) take effect on the date
the final regulation required under section 705(a)
271
(relating to the application of an aggregate upper
payment limit test for State medicaid spending for
inpatient hospital services, outpatient hospital serv-
ices, nursing facility services, intermediate care facil-
ity services for the mentally retarded, and clinic
services provided by government facilities that are
not State-owned or operated facilities) is published
in the Federal Register.
(b) ASSURING IDENTIFICATION OF MEDICAID MAN-
AGED CARE PATIENTS.—
(1) IN
GENERAL.—Section 1932 (42 U.S.C.
1396u–2) is amended by adding at the end the fol-
lowing new subsection:
‘‘(g) IDENTIFICATION OF PATIENTS FOR PURPOSES
OF MAKING DSH PAYMENTS.—Each contract with a
managed care entity under section 1903(m) or under sec-
tion 1905(t)(3) shall require the entity either—
‘‘(1) to report to the State information nec-
essary to determine the hospital services provided
under the contract (and the identity of hospitals pro-
viding such services) for purposes of applying sec-
tions 1886(d)(5)(F) and 1923; or
‘‘(2) to include a sponsorship code in the identi-
fication card issued to individuals covered under this
272
title in order that a hospital may identify a patient
as being entitled to benefits under this title.’’.
(2) CLARIFICATION
OF
COUNTING
MANAGED
CARE
MEDICAID
PATIENTS.—Section 1923 (42
U.S.C. 1396r–4) is amended—
(A) in subsection (a)(2)(D), by inserting
after ‘‘the proportion of low-income and med-
icaid patients’’ the following: ‘‘(including such
patients who receive benefits through a man-
aged care entity)’’;
(B) in subsection (b)(2), by inserting after
‘‘a State plan approved under this title in a pe-
riod’’ the following: ‘‘(regardless of whether
such patients receive medical assistance on a
fee-for-service basis or through a managed care
entity)’’; and
(C) in subsection (b)(3)(A)(i), by inserting
after ‘‘under a State plan under this title’’ the
following: ‘‘(regardless of whether the services
were furnished on a fee-for-service basis or
through a managed care entity)’’.
(3) EFFECTIVE DATES.—
(A) The amendment made by paragraph
(1) applies to contracts as of January 1, 2001.
273
(B) The amendments made by paragraph
(2) apply to payments made on or after Janu-
ary 1, 2001.
(c) APPLICATION OF MEDICAID DSH TRANSITION
RULE TO PUBLIC HOSPITALS IN ALL STATES.—
(1) IN GENERAL.—During the period described
in paragraph (3), with respect to a State, section
4721(e) of the Balanced Budget Act of 1997 (Public
Law 105–33; 111 Stat. 514), as amended by section
607 of BBRA (113 Stat. 1501A–321) shall be ap-
plied as though—
(A) ‘‘September 30, 2002’’ were sub-
stituted for ‘‘July 1, 1997’’ each place it ap-
pears;
(B) ‘‘hospitals owned or operated by a
State (as defined for purposes of title XIX of
such Act), or by an instrumentality or a unit of
government within a State (as so defined)’’
were substituted for ‘‘the State of California’’;
(C) paragraph (3) were redesignated as
paragraph (4);
(D) ‘‘and’’ were omitted from the end of
paragraph (2); and
(E) the following new paragraph were in-
serted after paragraph (2):
274
‘‘(3) ‘(as defined in subparagraph (B) but with-
out regard to clause (ii) of that subparagraph and
subject to subsection (d))’ were substituted for ‘(as
defined in subparagraph (B))’ in subparagraph (A)
of such section; and’’.
(2) SPECIAL RULE.—With respect to California,
section 4721(e) of the Balanced Budget Act of 1997
(Public Law 105–33; 111 Stat. 514) shall be applied
without regard to paragraph (1).
(3) PERIOD DESCRIBED.—The period described
in this paragraph is the period that begins, with re-
spect to a State, on the first day of the first State
fiscal year that begins after September 30, 2002,
and ends on the last day of the succeeding State fis-
cal year.
(4) APPLICATION TO WAIVERS.—With respect
to a State operating under a waiver of the require-
ments of title XIX of the Social Security Act (42
U.S.C. 1396 et seq.) under section 1115 of such Act
(42 U.S.C. 1315), the amount by which any pay-
ment adjustment made by the State under title XIX
of such Act (42 U.S.C. 1396 et seq.), after the ap-
plication of section 4721(e) of the Balanced Budget
Act of 1997 under paragraph (1) to such State, ex-
ceeds the costs of furnishing hospital services pro-
275
vided by hospitals described in such section shall be
fully reflected as an increase in the baseline expendi-
ture limit for such waiver.
(d) ASSISTANCE
FOR
CERTAIN
PUBLIC
HOS-
PITALS.—
(1) IN GENERAL.—Beginning with fiscal year
2002, notwithstanding section 1923(f) of the Social
Security Act (42 U.S.C. 1396r–4(f)) and subject to
paragraph (3), with respect to a State, payment ad-
justments made under title XIX of the Social Secu-
rity Act (42 U.S.C. 1396 et seq.) to a hospital de-
scribed in paragraph (2) shall be made without re-
gard to the DSH allotment limitation for the State
determined under section 1923(f) of that Act (42
U.S.C. 1396r–4(f)).
(2) HOSPITAL DESCRIBED.—A hospital is de-
scribed in this paragraph if the hospital—
(A) is owned or operated by a State (as de-
fined for purposes of title XIX of the Social Se-
curity Act), or by an instrumentality or a unit
of government within a State (as so defined);
(B) as of October 1, 2000—
(i) is in existence and operating as a
hospital described in subparagraph (A);
and
276
(ii) is not receiving disproportionate
share hospital payments from the State in
which it is located under title XIX of such
Act; and
(C) has a low-income utilization rate (as
defined in section 1923(b)(3) of the Social Se-
curity Act (42 U.S.C. 1396r–4(b)(3))) in excess
of 65 percent.
(3) LIMITATION ON EXPENDITURES.—
(A) IN GENERAL.—With respect to any fis-
cal year, the aggregate amount of Federal fi-
nancial participation that may be provided for
payment adjustments described in paragraph
(1) for that fiscal year for all States may not
exceed the amount described in subparagraph
(B) for the fiscal year.
(B) AMOUNT
DESCRIBED.—The amount
described in this subparagraph for a fiscal year
is as follows:
(i) For fiscal year 2002, $15,000,000.
(ii) 
For 
fiscal 
year 
2003,
$176,000,000.
(iii) 
For 
fiscal 
year 
2004,
$269,000,000.
277
(iv) 
For 
fiscal 
year 
2005,
$330,000,000.
(v) For fiscal year 2006 and each fis-
cal year thereafter, $375,000,000.
(e) DSH PAYMENT ACCOUNTABILITY STANDARDS.—
Not later than September 30, 2002, the Secretary of
Health and Human Services shall implement account-
ability standards to ensure that Federal funds provided
with respect to disproportionate share hospital adjust-
ments made under section 1923 of the Social Security Act
(42 U.S.C. 1396r–4) are used to reimburse States and
hospitals eligible for such payment adjustments for pro-
viding uncompensated health care to low-income patients
and are otherwise made in accordance with the require-
ments of section 1923 of that Act.
SEC. 702. NEW PROSPECTIVE PAYMENT SYSTEM FOR FED-
ERALLY-QUALIFIED HEALTH CENTERS AND
RURAL HEALTH CLINICS.
(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
278
(C) by striking subparagraph (C); and
(2) by inserting after paragraph (14) the fol-
lowing new paragraph:
‘‘(15) provide for payment for services de-
scribed 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
2001 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 2001.—Subject to paragraph
(4), for services furnished during fiscal year 2001,
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 average of
the costs of the center or clinic of furnishing such
279
services during fiscal years 1999 and 2000 which
are reasonable and related to the cost of furnishing
such services, or based on such other tests of reason-
ableness 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), ad-
justed to take into account any increase or decrease
in the scope of such services furnished by the center
or clinic during fiscal year 2001.
‘‘(3) FISCAL YEAR 2002 AND SUCCEEDING FIS-
CAL YEARS.—Subject to paragraph (4), for services
furnished during fiscal year 2002 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 or decrease in the scope of such services
280
furnished by the center or clinic during that fis-
cal 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 2000, 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
based on the rates established under this subsection
for the fiscal year for other such centers or clinics
located in the same or adjacent area with a similar
case load or, in the absence of such a center or clin-
ic, in accordance with the regulations and method-
ology referred to in paragraph (2) or based on such
other tests of reasonableness as the Secretary may
specify. For each fiscal year following the fiscal year
in which the entity first qualifies as a Federally-
qualified health center or rural health clinic, the
281
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.—
‘‘(A) IN GENERAL.—In the case of services
furnished by a Federally-qualified health center
or rural health clinic pursuant to a contract be-
tween the center or clinic and a managed care
entity (as defined in section 1932(a)(1)(B)), the
State plan shall provide for payment to the cen-
ter or clinic by the State of a supplemental pay-
ment 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.
‘‘(B) PAYMENT SCHEDULE.—The supple-
mental payment required under subparagraph
(A) shall be made pursuant to a payment
schedule agreed to by the State and the Feder-
ally-qualified health center or rural health clin-
ic, but in no case less frequently than every 4
months.
‘‘(6) ALTERNATIVE
PAYMENT
METHODOLO-
GIES.—Notwithstanding any other provision of this
section, the State plan may provide for payment in
282
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 BBA (Public Law 105–
33; 111 Stat. 508) is amended by striking sub-
section (c).
(2) Section 1915(b) (42 U.S.C. 1396n(b)) is
amended by striking ‘‘1902(a)(13)(C)’’ and inserting
‘‘1902(a)(15), 1902(aa),’’.
(d) GAO STUDY
OF
FUTURE
REBASING.—The
Comptroller General of the United States shall provide for
a study on the need for, and how to, rebase or refine costs
for making payment under the medicaid program for serv-
ices provided by Federally-qualified health centers and
rural health clinics (as provided under the amendments
made by this section). The Comptroller General shall pro-
283
vide for submittal of a report on such study to Congress
by not later than 4 years after the date of the enactment
of this Act.
(e) EFFECTIVE DATE.—The amendments made by
this section take effect on October 1, 2000, and apply to
services furnished on or after such date.
SEC. 703. STREAMLINED APPROVAL OF CONTINUED STATE-
WIDE SECTION 1115 MEDICAID WAIVERS.
(a) IN GENERAL.—Section 1115 (42 U.S.C. 1315)
is amended by adding at the end the following new sub-
section:
‘‘(f) An application by the chief executive officer of
a State for an extension of a waiver project the State is
operating under an extension under subsection (e) (in this
subsection referred to as the ‘waiver project’) shall be sub-
mitted and approved or disapproved in accordance with
the following:
‘‘(1) The application for an extension of the
waiver project shall be submitted to the Secretary at
least 120 days prior to the expiration of the current
period of the waiver project.
‘‘(2) Not later than 45 days after the date such
application is received by the Secretary, the Sec-
retary shall notify the State if the Secretary intends
to review the terms and conditions of the waiver
284
project. A failure to provide such notification shall
be deemed to be an approval of the application.
‘‘(3) Not later than 45 days after the date a no-
tification is made in accordance with paragraph (2),
the Secretary shall inform the State of proposed
changes in the terms and conditions of the waiver
project. A failure to provide such information shall
be deemed to be an approval of the application.
‘‘(4) During the 30-day period that begins on
the date information described in paragraph (3) is
provided to a State, the Secretary shall negotiate re-
vised terms and conditions of the waiver project with
the State.
‘‘(5)(A) Not later than 120 days after the date
an application for an extension of the waiver project
is submitted to the Secretary (or such later date
agreed to by the chief executive officer of the State),
the Secretary shall—
‘‘(i) approve the application subject to such
modifications in the terms and conditions—
‘‘(I) as have been agreed to by the
Secretary and the State; or
‘‘(II) in the absence of such agree-
ment, as are determined by the Secretary
to be reasonable, consistent with the over-
285
all objectives of the waiver project, and not
in violation of applicable law; or
‘‘(ii) disapprove the application.
‘‘(B) A failure by the Secretary to approve or
disapprove an application submitted under this sub-
section in accordance with the requirements of sub-
paragraph (A) shall be deemed to be an approval of
the application subject to such modifications in the
terms and conditions as have been agreed to (if any)
by the Secretary and the State.
‘‘(6) An approval of an application for an exten-
sion of a waiver project under this subsection shall
be for a period not to exceed 3 years.
‘‘(7) An extension of a waiver project under this
subsection shall be subject to the final reporting and
evaluation requirements of paragraphs (4) and (5)
of subsection (e) (taking into account the extension
under this subsection with respect to any timing re-
quirements imposed under those paragraphs).’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) applies to requests for extensions of dem-
onstration projects pending or submitted on or after the
date of the enactment of this Act.
286
SEC. 704. MEDICAID COUNTY-ORGANIZED HEALTH SYS-
TEMS.
(a) IN GENERAL.—Section 9517(c)(3)(C) of the
Comprehensive Omnibus Budget Reconciliation Act of
1985 is amended by striking ‘‘10 percent’’ and inserting
‘‘14 percent’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) takes effect on the date of the enactment
of this Act.
SEC. 705. DEADLINE FOR ISSUANCE OF FINAL REGULATION
RELATING TO MEDICAID UPPER PAYMENT
LIMITS.
(a) IN GENERAL.—Not later than December 31,
2000, the Secretary of Health and Human Services (in
this section referred to as the ‘‘Secretary’’), notwith-
standing any requirement of the Administrative Proce-
dures Act under chapter 5 of title 5, United States Code,
or any other provision of law, shall issue under sections
447.272, 447.304, and 447.321 of title 42, Code of Fed-
eral Regulations (and any other section of part 447 of title
42, Code of Federal Regulations that the Secretary deter-
mines is appropriate), a final regulation based on the pro-
posed rule announced on October 5, 2000, that—
(1) modifies the upper payment limit test ap-
plied to State medicaid spending for inpatient hos-
pital services, outpatient hospital services, nursing
287
facility services, intermediate care facility services
for the mentally retarded, and clinic services by ap-
plying an aggregate upper payment limit to pay-
ments made to government facilities that are not
State-owned or operated facilities; and
(2) provides for a transition period in accord-
ance with subsection (b).
(b) TRANSITION PERIOD.—
(1) IN GENERAL.—The final regulation required
under subsection (a) shall provide that, with respect
to a State described in paragraph (3), the State
shall be considered to be in compliance with the final
regulation required under subsection (a) so long as,
for each State fiscal year during the period de-
scribed in paragraph (4), the State reduces pay-
ments under a State medicaid plan payment provi-
sion or methodology described in paragraph (3), or
reduces the actual dollar payment levels described in
paragraph (3)(B), so that the amount of the pay-
ments that would otherwise have been made under
such provision, methodology, or payment levels by
the State for any State fiscal year during such pe-
riod is reduced by 15 percent in the first such State
fiscal year, and by an additional 15 percent in each
of next 5 State fiscal years.
288
(2) 
REQUIREMENT.—Notwithstanding 
para-
graph (1), the final regulation required under sub-
section (a) shall provide that, for any period (or por-
tion of a period) that occurs on or after October 1,
2008, medicaid payments made by a State described
in paragraph (3) shall comply with such final regula-
tion.
(3) STATE DESCRIBED.—A State described in
this paragraph is a State with a State medicaid plan
payment provision or methodology which—
(A) was approved, deemed to have been ap-
proved, or was in effect on or before October 1,
1992 (including any subsequent amendments or
successor provisions or methodologies and
whether or not a State plan amendment was
made to carry out such provision or method-
ology after such date) or under which claims for
Federal financial participation were filed and
paid on or before such date; and
(B) provides for payments that are in ex-
cess of the upper payment limit test established
under the final regulation required under sub-
section (a) (or which would be noncompliant
with such final regulation if the actual dollar
payment levels made under the payment provi-
289
sion or methodology in the State fiscal year
which begins during 1999 were continued).
(4) PERIOD DESCRIBED.—The period described
in this paragraph is the period that begins on the
first State fiscal year that begins after September
30, 2002, and ends on September 30, 2008.
SEC. 706. ALASKA FMAP.
Notwithstanding the first sentence of section 1905(b)
of the Social Security Act (42 U.S.C. 1396d(b)), only with
respect to each of fiscal years 2001 through 2005, for pur-
poses of titles XIX and XXI of the Social Security Act,
the State percentage used to determine the Federal med-
ical assistance percentage for Alaska shall be that percent-
age which bears the same ratio to 45 percent as the square
of the adjusted per capita income of Alaska (determined
by dividing the State’s 3-year average per capita income
by 1.05) bears to the square of the per capita income of
the 50 States.
TITLE VIII—STATE CHILDREN’S
HEALTH INSURANCE PROGRAM
SEC. 801. SPECIAL RULE FOR REDISTRIBUTION AND AVAIL-
ABILITY OF UNUSED FISCAL YEAR 1998 AND
1999 SCHIP ALLOTMENTS.
(a) CHANGE IN RULES FOR REDISTRIBUTION AND
RETENTION OF UNUSED SCHIP ALLOTMENTS FOR FIS-
290
CAL YEARS 1998 AND 1999.—Section 2104 (42 U.S.C.
1397dd) is amended by adding at the end the following
new subsection:
‘‘(g) RULE FOR REDISTRIBUTION AND EXTENDED
AVAILABILITY OF FISCAL YEARS 1998 AND 1999 ALLOT-
MENTS.—
‘‘(1) AMOUNT REDISTRIBUTED.—
‘‘(A) IN GENERAL.—In the case of a State
that expends all of its allotment under sub-
section (b) or (c) for fiscal year 1998 by the
end of fiscal year 2000, or for fiscal year 1999
by the end of fiscal year 2001, the Secretary
shall redistribute to the State under subsection
(f) (from the fiscal year 1998 or 1999 allot-
ments of other States, respectively, as deter-
mined by the application of paragraphs (2) and
(3) with respect to the respective fiscal year))
the following amount:
‘‘(i) STATE.—In the case of 1 of the
50 States or the District of Columbia, with
respect to—
‘‘(I) the fiscal year 1998 allot-
ment, the amount by which the
State’s expenditures under this title in
fiscal years 1998, 1999, and 2000 ex-
291
ceed the State’s allotment for fiscal
year 1998 under subsection (b); or
‘‘(II) the fiscal year 1999 allot-
ment, the amount by which the
State’s expenditures under this title in
fiscal years 1999, 2000, and 2001 ex-
ceed the State’s allotment for fiscal
year 1999 under subsection (b).
‘‘(ii) TERRITORY.—In the case of a
commonwealth or territory described in
subsection (c)(3), an amount that bears
the same ratio to 1.05 percent of the total
amount described in paragraph (2)(B)(i)(I)
as the ratio of the commonwealth’s or ter-
ritory’s fiscal year 1998 or 1999 allotment
under subsection (c) (as the case may be)
bears to the total of all such allotments for
such fiscal year under such subsection.
‘‘(B) EXPENDITURE RULES.—An amount
redistributed to a State under this paragraph
with respect to fiscal year 1998 or 1999—
‘‘(i) shall not be included in the deter-
mination of the State’s allotment for any
fiscal year under this section;
292
‘‘(ii) notwithstanding subsection (e),
shall remain available for expenditure by
the State through the end of fiscal year
2002; and
‘‘(iii) shall be counted as being ex-
pended with respect to a fiscal year allot-
ment in accordance with applicable regula-
tions of the Secretary.
‘‘(2) EXTENSION OF AVAILABILITY OF PORTION
OF UNEXPENDED FISCAL YEARS 1998 AND 1999 AL-
LOTMENTS.—
‘‘(A) IN GENERAL.—Notwithstanding sub-
section (e):
‘‘(i) FISCAL YEAR 1998 ALLOTMENT.—
Of the amounts allotted to a State pursu-
ant to this section for fiscal year 1998 that
were not expended by the State by the end
of fiscal year 2000, the amount specified in
subparagraph (B) for fiscal year 1998 for
such State shall remain available for ex-
penditure by the State through the end of
fiscal year 2002.
‘‘(ii) 
FISCAL
YEAR
1999
ALLOT-
MENT.—Of the amounts allotted to a State
pursuant to this subsection for fiscal year
293
1999 that were not expended by the State
by the end of fiscal year 2001, the amount
specified in subparagraph (B) for fiscal
year 1999 for such State shall remain
available for expenditure by the State
through the end of fiscal year 2002.
‘‘(B) AMOUNT REMAINING AVAILABLE FOR
EXPENDITURE.—The amount specified in this
subparagraph for a State for a fiscal year is
equal to—
‘‘(i) the amount by which (I) the total
amount available for redistribution under
subsection (f) from the allotments for that
fiscal year, exceeds (II) the total amounts
redistributed under paragraph (1) for that
fiscal year; multiplied by
‘‘(ii) the ratio of the amount of such
State’s unexpended allotment for that fis-
cal year to the total amount described in
clause (i)(I) for that fiscal year.
‘‘(C) USE OF UP TO 10 PERCENT OF RE-
TAINED 1998 ALLOTMENTS FOR OUTREACH AC-
TIVITIES.—Notwithstanding 
section
2105(c)(2)(A), with respect to any State de-
scribed in subparagraph (A)(i), the State may
294
use up to 10 percent of the amount specified in
subparagraph (B) for fiscal year 1998 for ex-
penditures for outreach activities approved by
the Secretary.
‘‘(3) DETERMINATION OF AMOUNTS.—For pur-
poses of calculating the amounts described in para-
graphs (1) and (2) relating to the allotment for fis-
cal year 1998 or fiscal year 1999, the Secretary
shall use the amounts reported by the States not
later than November 30, 2000, or November 30,
2001, respectively, on HCFA Form 64 or HCFA
Form 21, as approved by the Secretary.’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall take effect as if included in the enact-
ment of section 4901 of BBA (111 Stat. 552).
SEC. 802. AUTHORITY TO PAY MEDICAID EXPANSION SCHIP
COSTS FROM TITLE XXI APPROPRIATION.
(a) AUTHORITY TO PAY MEDICAID EXPANSION
SCHIP COSTS FROM TITLE XXI APPROPRIATION.—Sec-
tion 2105(a) (42 U.S.C. 1397ee(a)) is amended—
(1) by redesignating subparagraphs (A) through
(D) of paragraph (2) as clauses (i) through (iv), re-
spectively, and indenting appropriately;
(2) by redesignating paragraph (1) as subpara-
graph (C), and indenting appropriately;
295
(3) by redesignating paragraph (2) as subpara-
graph (D), and indenting appropriately;
(4) by striking ‘‘(a) IN GENERAL.—’’ and the
remainder of the text that precedes subparagraph
(C), as so redesignated, and inserting the following:
‘‘(a) PAYMENTS.—
‘‘(1) IN GENERAL.—Subject to the succeeding
provisions of this section, the Secretary shall pay to
each State with a plan approved under this title,
from its allotment under section 2104, an amount
for each quarter equal to the enhanced FMAP (or,
in the case of expenditures described in subpara-
graph (B), the Federal medical assistance percent-
age (as defined in the first sentence of section
1905(b))) of expenditures in the quarter—
‘‘(A) for child health assistance under the
plan for targeted low-income children in the
form of providing medical assistance for which
payment is made on the basis of an enhanced
FMAP under the fourth sentence of section
1905(b);
‘‘(B) for the provision of medical assist-
ance on behalf of a child during a presumptive
eligibility period under section 1920A;’’; and
296
(5) by adding after subparagraph (D), as so re-
designated, the following new paragraph:
‘‘(2) ORDER OF PAYMENTS.—Payments under
paragraph (1) from a State’s allotment shall be
made in the following order:
‘‘(A) First, for expenditures for items de-
scribed in paragraph (1)(A).
‘‘(B) Second, for expenditures for items
described in paragraph (1)(B).
‘‘(C) Third, for expenditures for items de-
scribed in paragraph (1)(C).
‘‘(D) Fourth, for expenditures for items
described in paragraph (1)(D).’’.
(b) ELIMINATION
OF REQUIREMENT TO REDUCE
TITLE
XXI ALLOTMENT
BY
MEDICAID
EXPANSION
SCHIP COSTS.—Section 2104 (42 U.S.C. 1397dd) is
amended by striking subsection (d).
(c) AUTHORITY TO TRANSFER TITLE XXI APPRO-
PRIATIONS TO TITLE XIX APPROPRIATION ACCOUNT AS
REIMBURSEMENT
FOR MEDICAID EXPENDITURES
FOR
MEDICAID
EXPANSION
SCHIP SERVICES.—Notwith-
standing any other provision of law, all amounts appro-
priated under title XXI and allotted to a State pursuant
to subsection (b) or (c) of section 2104 of the Social Secu-
rity Act (42 U.S.C. 1397dd) for fiscal years 1998 through
297
2000 (including any amounts that, but for this provision,
would be considered to have expired) and not expended
in providing child health assistance or related services for
which payment may be made pursuant to subparagraph
(C) or (D) of section 2105(a)(1) of such Act (42 U.S.C.
1397ee(a)(1)) (as amended by subsection (a)), shall be
available to reimburse the Grants to States for Medicaid
account in an amount equal to the total payments made
to such State under section 1903(a) of such Act (42
U.S.C. 1396b(a)) for expenditures in such years for med-
ical assistance described in subparagraphs (A) and (B) of
section 2105(a)(1) of such Act (42 U.S.C. 1397ee(a)(1)
(as so amended).
(d) CONFORMING AMENDMENTS.—
(1) Section 1905(b) (42 U.S.C. 1396d(b)) is
amended in the fourth sentence by striking ‘‘the
State’s allotment under section 2104 (not taking
into account reductions under section 2104(d)(2))
for the fiscal year reduced by the amount of any
payments made under section 2105 to the State
from such allotment for such fiscal year’’ and insert-
ing ‘‘the State’s available allotment under section
2104’’.
298
(2) 
Section 
1905(u)(1)(B) 
(42 
U.S.C.
1396d(u)(1)(B)) is amended by striking ‘‘and sec-
tion 2104(d)’’.
(3) Section 2104 (42 U.S.C. 1397dd), as
amended by subsection (b), is further amended—
(A) in subsection (b)(1), by striking ‘‘and
subsection (d)’’; and
(B) in subsection (c)(1), by striking ‘‘sub-
ject to subsection (d),’’.
(4) Section 2105(c) (42 U.S.C. 1397ee(c)) is
amended—
(A) in paragraph (2)(A), by striking all
that follows ‘‘Except as provided in this para-
graph,’’ and inserting ‘‘the amount of payment
that may be made under subsection (a) for a
fiscal year for expenditures for items described
in paragraph (1)(D) of such subsection shall
not exceed 10 percent of the total amount of ex-
penditures for which payment is made under
subparagraphs (A), (C), and (D) of paragraph
(1) of such subsection.’’;
(B) in paragraph (2)(B), by striking ‘‘de-
scribed in subsection (a)(2)’’ and inserting ‘‘de-
scribed in subsection (a)(1)(D)’’; and
299
(C) in paragraph (6)(B), by striking ‘‘Ex-
cept as otherwise provided by law,’’ and insert-
ing ‘‘Except as provided in subparagraph (A) or
(B) of subsection (a)(1) or any other provision
of law,’’.
(5) Section 2110(a) (42 U.S.C. 1397jj(a)) is
amended by striking ‘‘section 2105(a)(2)(A)’’ and
inserting ‘‘section 2105(a)(1)(D)(i)’’.
(e) 
TECHNICAL
AMENDMENT.—Section
2105(d)(2)(B)(ii) (42 U.S.C. 1397ee(d)(2)(B)(ii)) is
amended by striking ‘‘enhanced FMAP under section
1905(u)’’ and inserting ‘‘enhanced FMAP under the
fourth sentence of section 1905(b)’’.
(f) EFFECTIVE DATE.—The amendments made by
this section shall be effective as if included in the enact-
ment of section 4901 of the BBA (111 Stat. 552).
TITLE IX—OTHER PROVISIONS
Subtitle A—PACE Program
SEC. 901. EXTENSION OF TRANSITION FOR CURRENT WAIV-
ERS.
Section 4803(d)(2) of BBA is amended—
(1) in subparagraph (A), by striking ‘‘24
months’’ and inserting ‘‘36 months’’;
300
(2) in subparagraph (A), by striking ‘‘the initial
effective date of regulations described in subsection
(a)’’ and inserting ‘‘July 1, 2000’’; and
(3) in subparagraph (B), by striking ‘‘3 years’’
and inserting ‘‘4 years’’.
SEC. 902. CONTINUING OF CERTAIN OPERATING ARRANGE-
MENTS PERMITTED.
(a) IN GENERAL.—Section 1894(f)(2) (42 U.S.C.
1395eee(f)(2)) is amended by adding at the end the fol-
lowing new subparagraph:
‘‘(C) CONTINUATION
OF
MODIFICATIONS
OR WAIVERS OF OPERATIONAL REQUIREMENTS
UNDER DEMONSTRATION STATUS.—If a PACE
program operating under demonstration author-
ity has contractual or other operating arrange-
ments which are not otherwise recognized in
regulation and which were in effect on July 1,
2000, the Secretary (in close consultation with,
and with the concurrence of, the State admin-
istering agency) shall permit any such program
to continue such arrangements so long as such
arrangements are found by the Secretary and
the State to be reasonably consistent with the
objectives of the PACE program.’’.
301
(b) CONFORMING AMENDMENT.—Section 1934(f)(2)
(42 U.S.C. 1396u–4(f)(2)) is amended by adding at the
end the following new subparagraph:
‘‘(C) CONTINUATION
OF
MODIFICATIONS
OR WAIVERS OF OPERATIONAL REQUIREMENTS
UNDER DEMONSTRATION STATUS.—If a PACE
program operating under demonstration author-
ity has contractual or other operating arrange-
ments which are not otherwise recognized in
regulation and which were in effect on July 1
2000, the Secretary (in close consultation with,
and with the concurrence of, the State admin-
istering agency) shall permit any such program
to continue such arrangements so long as such
arrangements are found by the Secretary and
the State to be reasonably consistent with the
objectives of the PACE program.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall be effective as included in the enactment
of BBA.
SEC. 903. FLEXIBILITY IN EXERCISING WAIVER AUTHORITY.
In 
applying 
sections 
1894(f)(2)(B) 
and
1934(f)(2)(B) of the Social Security Act (42 U.S.C.
1395eee(f)(2)(B), 1396u–4(f)(2)(B)), the Secretary of
Health and Human Services—
302
(1) shall approve or deny a request for a modi-
fication or a waiver of provisions of the PACE pro-
tocol not later than 90 days after the date the Sec-
retary receives the request; and
(2) may exercise authority to modify or waive
such provisions in a manner that responds promptly
to the needs of PACE programs relating to areas of
employment and the use of community-based pri-
mary care physicians.
Subtitle B—Outreach to Eligible
Low-Income 
Medicare 
Bene-
ficiaries
SEC. 911. OUTREACH ON AVAILABILITY OF MEDICARE
COST-SHARING 
ASSISTANCE 
TO 
ELIGIBLE
LOW-INCOME MEDICARE BENEFICIARIES.
(a) OUTREACH.—
(1) IN GENERAL.—Title XI (42 U.S.C. 1301 et
seq.) is amended by inserting after section 1143 the
following new section:
‘‘OUTREACH EFFORTS TO INCREASE AWARENESS OF THE
AVAILABILITY OF MEDICARE COST-SHARING
‘‘SEC. 1144. (a) OUTREACH.—
‘‘(1) IN GENERAL.—The Commissioner of So-
cial Security (in this section referred to as the ‘Com-
missioner’) shall conduct outreach efforts to—
303
‘‘(A) identify individuals entitled to bene-
fits under the medicare program under title
XVIII who may be eligible for medical assist-
ance for payment of the cost of medicare cost-
sharing under the medicaid program pursuant
to sections 1902(a)(10)(E) and 1933; and
‘‘(B) notify such individuals of the avail-
ability of such medical assistance under such
sections.
‘‘(2) CONTENT
OF
NOTICE.—Any notice fur-
nished under paragraph (1) shall state that eligi-
bility for medicare cost-sharing assistance under
such sections is conditioned upon—
‘‘(A) the individual providing to the State
information about income and resources (in the
case of an individual residing in a State that
imposes an assets test for such eligibility); and
‘‘(B) meeting the applicable eligibility cri-
teria.
‘‘(b) COORDINATION WITH STATES.—
‘‘(1) IN GENERAL.—In conducting the outreach
efforts under this section, the Commissioner shall—
‘‘(A) furnish the agency of each State re-
sponsible for the administration of the medicaid
program and any other appropriate State agen-
304
cy with information consisting of the name and
address of individuals residing in the State that
the Commissioner determines may be eligible
for medical assistance for payment of the cost
of medicare cost-sharing under the medicaid
program pursuant to sections 1902(a)(10)(E)
and 1933; and
‘‘(B) update any such information not less
frequently than once per year.
‘‘(2) INFORMATION
IN
PERIODIC
UPDATES.—
The periodic updates described in paragraph (1)(B)
shall include information on individuals who are or
may be eligible for the medical assistance described
in paragraph (1)(A) because such individuals have
experienced reductions in benefits under title II.’’.
(2) AMENDMENT
TO
TITLE
XIX.—Section
1905(p) (42 U.S.C. 1396d(p)) is amended by adding
at the end the following new paragraph:
‘‘(5) For provisions relating to outreach efforts to in-
crease awareness of the availability of medicare cost-shar-
ing, see section 1144.’’.
(b) GAO REPORT.—The Comptroller General of the
United States shall conduct a study of the impact of sec-
tion 1144 of the Social Security Act (as added by sub-
section (a)(1)) on the enrollment of individuals for medi-
305
care cost-sharing under the medicaid program. Not later
than 18 months after the date that the Commissioner of
Social Security first conducts outreach under section 1144
of such Act, the Comptroller General shall submit to Con-
gress a report on such study. The report shall include such
recommendations for legislative changes as the Comp-
troller General deems appropriate.
(c) EFFECTIVE DATE.—The amendments made by
subsections (a) shall take effect one year after the date
of the enactment of this Act.
Subtitle C—Maternal and Child
Health Block Grant
SEC. 921. INCREASE IN AUTHORIZATION OF APPROPRIA-
TIONS FOR THE MATERNAL AND CHILD
HEALTH SERVICES BLOCK GRANT.
(a) IN
GENERAL.—Section 501(a) (42 U.S.C.
701(a)) is amended in the matter preceding paragraph (1)
by striking ‘‘$705,000,000 for fiscal year 1994’’ and in-
serting ‘‘$850,000,000 for fiscal year 2001’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) takes effect on October 1, 2000.
306
Subtitle D—Diabetes
SEC. 931. INCREASE IN APPROPRIATIONS FOR SPECIAL DI-
ABETES PROGRAMS FOR TYPE I DIABETES
AND INDIANS.
(a) SPECIAL DIABETES PROGRAMS FOR TYPE I DIA-
BETES.—Section 330B(b) of the Public Health Service
Act (42 U.S.C. 254c–2(b)) is amended—
(1) by striking ‘‘Notwithstanding’’ and insert-
ing the following:
‘‘(1) 
TRANSFERRED
FUNDS.—Notwith-
standing’’; and
(2) by adding at the end the following:
‘‘(2) APPROPRIATIONS.—For the purpose of
making grants under this section, there is appro-
priated, out of any funds in the Treasury not other-
wise appropriated—
‘‘(A) $70,000,000 for each of fiscal years
2001 and 2002 (which shall be combined with
amounts transferred under paragraph (1) for
each such fiscal years); and
‘‘(B) $100,000,000 for fiscal year 2003.’’.
(b) SPECIAL DIABETES PROGRAMS FOR INDIANS.—
Section 330C(c) of such Act (42 U.S.C. 254c–3(c)) is
amended—
307
(1) by striking ‘‘Notwithstanding’’ and insert-
ing the following:
‘‘(1) 
TRANSFERRED
FUNDS.—Notwith-
standing’’; and
(2) by adding at the end the following:
‘‘(2) APPROPRIATIONS.—For the purpose of
making grants under this section, there is appro-
priated, out of any money in the Treasury not other-
wise appropriated—
‘‘(A) $70,000,000 for each of fiscal years
2001 and 2002 (which shall be combined with
amounts transferred under paragraph (1) for
each such fiscal years); and
‘‘(B) $100,000,000 for fiscal year 2003.’’.
(c) EXTENSION OF FINAL REPORT ON GRANT PRO-
GRAMS.—Section 4923(b)(2) of BBA is amended by strik-
ing ‘‘2002’’ and inserting ‘‘2003’’.
SEC. 932. APPROPRIATIONS FOR RICKY RAY HEMOPHILIA
RELIEF FUND.
Section 101(e) of the Ricky Ray Hemophilia Relief
Fund Act of 1998 (42 U.S.C. 300c–22 note) is amended
by adding at the end the following: ‘‘There is appropriated
to the Fund $475,000,000 for fiscal year 2001, to remain
available until expended.’’.
Æ