H. R. 6111—65
4) for payment for physicians’ services for 2008, consistent with 
the previous sentence. 
SEC. 111. CLARIFICATION OF HOSPICE SATELLITE DESIGNATION. 
Notwithstanding any other provision of law, for purposes of 
calculating the hospice aggregate payment cap for 2004, 2005, and 
2006 for a hospice program under section 1814(i)(2)(A) of the Social 
Security Act (42 U.S.C. 1395f(i)(2)(A)) for hospice care provided 
on or after November 1, 2003, and before December 27, 2005, 
Medicare provider number 29–1511 is deemed to be a multiple 
location of Medicare provider number 29–1500. 
TITLE II—MEDICARE BENEFICIARY 
PROTECTIONS 
SEC. 201. EXTENSION OF EXCEPTIONS PROCESS FOR MEDICARE 
THERAPY CAPS. 
Section 1833(g)(5) of the Social Security Act (42 U.S.C. 
1395l(g)(5)) is amended by striking ‘‘2006’’ and inserting ‘‘the period 
beginning on January 1, 2006, and ending on December 31, 2007,’’. 
SEC. 202. PAYMENT FOR ADMINISTRATION OF PART D VACCINES. 
(a) TRANSITION FOR 2007.—Notwithstanding any other provision 
of law, in the case of a vaccine that is a covered part D drug 
under section 1860D–2(e) of the Social Security Act (42 U.S.C. 
1395w–102(e)) and that is administered during 2007, the adminis-
tration of such vaccine shall be paid under part B of title XVIII 
of such Act as if it were the administration of a vaccine described 
in section 1861(s)(10)(B) of such Act (42 U.S.C. 1395w(s)(10)(B)). 
(b) ADMINISTRATION INCLUDED IN COVERAGE OF COVERED PART 
D DRUGS BEGINNING IN 2008.—Section 1860D–2(e)(1) of the Social 
Security Act (42 U.S.C. 1395w–102(e)(1)) is amended, in the matter 
following subparagraph (B), by inserting ‘‘(and, for vaccines adminis-
tered on or after January 1, 2008, its administration)’’ after ‘‘Public 
Health Service Act’’. 
SEC. 203. OIG STUDY OF NEVER EVENTS. 
(a) STUDY.—
(1) IN GENERAL.—The Inspector General in the Department 
of Health and Human Services shall conduct a study on—
(A) incidences of never events for Medicare bene-
ficiaries, including types of such events and payments by 
any party for such events; 
(B) the extent to which the Medicare program paid, 
denied payment, or recouped payment for services fur-
nished in connection with such events and the extent to 
which beneficiaries paid for such services; and 
(C) the administrative processes of the Centers for 
Medicare & Medicaid Services to detect such events and 
to deny or recoup payments for services furnished in 
connection with such an event. 
(2) CONDUCT OF STUDY.—In conducting the study under 
paragraph (1), the Inspector General—
(A) shall audit a representative sample of claims and 
medical records of Medicare beneficiaries to identify never
H. R. 6111—66
events and any payment (or recoupment) for services fur-
nished in connection with such events; 
(B) may request access to such claims and records 
from any Medicare contractor; and 
(C) shall not release individually identifiable informa-
tion or facility-specific information. 
(b) REPORT.—Not later than 2 years after the date of the 
enactment of this Act, the Inspector General shall submit a report 
to Congress on the study conducted under this section. Such report 
shall include recommendations for such legislation and administra-
tive action, such as a noncoverage policy or denial of payments, 
as the Inspector General determines appropriate, including—
(1) recommendations on processes to identify never events 
and to deny or recoup payments for services furnished in 
connection with such events; and 
(2) a recommendation on a potential process (or processes) 
for public disclosure of never events which—
(A) will ensure protection of patient privacy; and 
(B) will permit the use of the disclosed information 
for a root cause analysis to inform the public and the 
medical community about safety issues involved. 
(c) FUNDING.—Out of any funds in the Treasury not otherwise 
appropriated, there are appropriated to the Inspector General of 
the Department of Health and Human Services $3,000,000 to carry 
out this section, to be available until January 1, 2010. 
(d) NEVER EVENTS DEFINED.—For purposes of this section, the 
term ‘‘never event’’ means an event that is listed and endorsed 
as a serious reportable event by the National Quality Forum as 
of November 16, 2006. 
SEC. 204. MEDICARE MEDICAL HOME DEMONSTRATION PROJECT. 
(a) IN GENERAL.—The Secretary of Health and Human Services 
(in this section referred to as the ‘‘Secretary’’) shall establish under 
title XVIII of the Social Security Act a medical home demonstration 
project (in this section referred to as the ‘‘project’’) to redesign 
the health care delivery system to provide targeted, accessible, 
continuous and coordinated, family-centered care to high-need popu-
lations and under which—
(1) care management fees are paid to persons performing 
services as personal physicians; and 
(2) incentive payments are paid to physicians participating 
in practices that provide services as a medical home under 
subsection (d). 
For purposes of this subsection, the term ‘‘high-need population’’ 
means individuals with multiple chronic illnesses that require reg-
ular medical monitoring, advising, or treatment. 
(b) DETAILS.—
(1) DURATION; SCOPE.—The project shall operate during 
a period of three years and shall include urban, rural, and 
underserved areas in a total of no more than 8 States. 
(2) ENCOURAGING PARTICIPATION OF SMALL PHYSICIAN PRAC-
TICES.—The project shall be designed to include the participa-
tion of physicians in practices with fewer than three full-time 
equivalent physicians, as well as physicians in larger practices 
particularly in rural and underserved areas. 
(c) PERSONAL PHYSICIAN DEFINED.—
H. R. 6111—67
(1) IN GENERAL.—For purposes of this section, the term 
‘‘personal physician’’ means a physician (as defined in section 
1861(r)(1) of the Social Security Act (42 U.S.C. 1395x(r)(1)) 
who—
(A) meets the requirements described in paragraph 
(2); and 
(B) performs the services described in paragraph (3). 
Nothing in this paragraph shall be construed as preventing 
such a physician from being a specialist or subspecialist for 
an individual requiring ongoing care for a specific chronic condi-
tion or multiple chronic conditions (such as severe asthma, 
complex diabetes, cardiovascular disease, rheumatologic dis-
order) or for an individual with a prolonged illness. 
(2) REQUIREMENTS.—The requirements described in this 
paragraph for a personal physician are as follows: 
(A) The physician is a board certified physician who 
provides first contact and continuous care for individuals 
under the physician’s care. 
(B) The physician has the staff and resources to man-
age the comprehensive and coordinated health care of each 
such individual. 
(3) SERVICES PERFORMED.—A personal physician shall per-
form or provide for the performance of at least the following 
services: 
(A) Advocates for and provides ongoing support, over-
sight, and guidance to implement a plan of care that pro-
vides an integrated, coherent, cross-discipline plan for 
ongoing medical care developed in partnership with 
patients and including all other physicians furnishing care 
to the patient involved and other appropriate medical per-
sonnel or agencies (such as home health agencies). 
(B) Uses evidence-based medicine and clinical decision 
support tools to guide decision-making at the point-of-care 
based on patient-specific factors. 
(C) Uses health information technology, that may 
include remote monitoring and patient registries, to mon-
itor and track the health status of patients and to provide 
patients with enhanced and convenient access to health 
care services. 
(D) Encourages patients to engage in the management 
of their own health through education and support systems. 
(d) MEDICAL HOME DEFINED.—For purposes of this section, 
the term ‘‘medical home’’ means a physician practice that—
(1) is in charge of targeting beneficiaries for participation 
in the project; and 
(2) is responsible for—
(A) providing safe and secure technology to promote 
patient access to personal health information; 
(B) developing a health assessment tool for the individ-
uals targeted; and 
(C) providing training programs for personnel involved 
in the coordination of care. 
(e) PAYMENT MECHANISMS.—
(1) PERSONAL PHYSICIAN CARE MANAGEMENT FEE.—Under 
the project, the Secretary shall provide for payment under 
section 1848 of the Social Security Act (42 U.S.C. 1395w–
4) of a care management fee to personal physicians providing
H. R. 6111—68
care management under the project. Under such section and 
using the relative value scale update committee (RUC) process 
under such section, the Secretary shall develop a care manage-
ment fee code for such payments and a value for such code. 
(2) MEDICAL HOME SHARING IN SAVINGS.—The Secretary 
shall provide for payment under the project of a medical home 
based on the payment methodology applied to physician group 
practices under section 1866A of the Social Security Act (42 
U.S.C. 1395cc–1). Under such methodology, 80 percent of the 
reductions in expenditures under title XVIII of the Social Secu-
rity Act resulting from participation of individuals that are 
attributable to the medical home (as reduced by the total care 
managements fees paid to the medical home under the project) 
shall be paid to the medical home. The amount of such reduc-
tions in expenditures shall be determined by using assumptions 
with respect to reductions in the occurrence of health complica-
tions, hospitalization rates, medical errors, and adverse drug 
reactions. 
(3) SOURCE.—Payments paid under the project shall be 
made from the Federal Supplementary Medical Insurance Trust 
Fund under section 1841 of the Social Security Act (42 U.S.C. 
1395t). 
(f) EVALUATIONS AND REPORTS.—
(1) ANNUAL INTERIM EVALUATIONS AND REPORTS.—For each 
year of the project, the Secretary shall provide for an evaluation 
of the project and shall submit to Congress, by a date specified 
by the Secretary, a report on the project and on the evaluation 
of the project for each such year. 
(2) FINAL EVALUATION AND REPORT.—The Secretary shall 
provide for an evaluation of the project and shall submit to 
Congress, not later than one year after completion of the project, 
a report on the project and on the evaluation of the project. 
SEC. 205. MEDICARE DRA TECHNICAL CORRECTIONS. 
(a) PACE CLARIFICATION.—Paragraph (7) of section 5302(c) of 
the Deficit Reduction Act of 2005 (42 U.S.C. 1395eee note) is 
amended to read as follows: 
‘‘(7) APPROPRIATION.—
‘‘(A) IN GENERAL.—Out of funds in the Treasury not 
otherwise appropriated, there are appropriated to the Sec-
retary $10,000,000 to carry out this subsection for the 
period of fiscal years 2006 through 2010. 
‘‘(B) 
AVAILABILITY.—Funds 
appropriated 
under 
subparagraph (A) shall remain available for obligation 
through fiscal year 2010.’’. 
(b) MISCELLANEOUS TECHNICAL CORRECTIONS.—
(1) CORRECTION
OF
MARGIN
(SECTION
5001).—Section 
1886(b)(3)(B) 
of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1395ww(b)(3)(B)), as amended by section 5001(a) of the Deficit 
Reduction Act of 2005 (Public Law 109–171), is amended by 
moving clause (viii) (including subclauses (I) through (VII) of 
such clause) 6 ems to the left. 
(2) 
REFERENCE
CORRECTION
(SECTION
5114).—Section 
5114(a)(2) of the Deficit Reduction Act of 2005 (Public Law 
109–171), in the matter preceding subparagraph (A), is 
amended by striking ‘‘1842(b)(6)(F) of such Act (42 U.S.C.