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‘‘(B) the elected organization shall not be
financially responsible for payment for such
services until the date after the date of the indi-
vidual’s discharge, and
‘‘(C) the organization shall nonetheless be
paid the full amount otherwise payable to the
organization under this part; or
‘‘(2) termination of election with respect to a
MedicarePlus organization under this part—
‘‘(A) the organization shall be financially
responsible for payment for such services after
such date and until the date of the individual’s
discharge,
‘‘(B) payment for such services during the
stay shall not be made under section 1886(d) or
by any succeeding MedicarePlus organization,
and
‘‘(C) the terminated organization shall not
receive any payment with respect to the individ-
ual under this part during the period the indi-
vidual is not enrolled.
‘‘ESTABLISHMENT OF STANDARDS FOR MEDICARE-PLUS
ORGANIZATIONS AND PRODUCTS
‘‘SEC. 1856. (a) STANDARDS APPLICABLE TO STATE-
REGULATED ORGANIZATIONS AND PRODUCTS.—
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‘‘(1) RECOMMENDATIONS OF NAIC.—The Sec-
retary shall request the National Association of In-
surance Commissioners to develop and submit to the
Secretary, not later than 12 months after the date
of the enactment of the Medicare Preservation Act
of 1995, proposed standards consistent with the re-
quirements of this part for MedicarePlus organiza-
tions (other than union sponsors, Taft-Hartley spon-
sors, and provider-sponsored organizations) and
MedicarePlus products offered by such organiza-
tions, except that such proposed standards may re-
late to MedicarePlus organizations that are qualified
associations only with respect to MedicarePlus prod-
ucts offered by them and only if such products are
issued by organizations to which section 1851(b)(1)
applies.
‘‘(2) REVIEW.—If the Association submits such
standards on a timely basis, the Secretary shall re-
view such standards to determine if the standards
meet the requirements of the part. The Secretary
shall complete the review of the standards not later
than 90 days after the date of their submission. The
Secretary shall promulgate such proposed standards
to apply to organizations and products described in
paragraph (1) except to the extent that the Sec-
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retary modifies such proposed standards because
they do not meet such requirements.
‘‘(3) FAILURE TO SUBMIT.—If the Association
does not submit such standards on a timely basis,
the Secretary shall promulgate such standards by
not later than the date the Secretary would other-
wise have been required to promulgate standards
under paragraph (2).
‘‘(4) USE OF INTERIM RULES.—For the period
in which this part is in effect and standards are
being developed and established under the preceding
provisions of this subsection, the Secretary shall pro-
vide by not later than June 1, 1996, for the applica-
tion of such interim standards (without regard to
any requirements for notice and public comment) as
may be appropriate to provide for the expedited im-
plementation of this part. Such interim standards
shall not apply after the date standards are estab-
lished under the preceding provisions of this sub-
section.
‘‘(b) UNION AND TAFT-HARTLEY SPONSORS, QUALI-
FIED ASSOCIATIONS, AND PRODUCTS.—
‘‘(1) IN GENERAL.—The Secretary shall develop
and promulgate by regulation standards consistent
with the requirements of this part for union and
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Taft-Hartley sponsors, for qualified associations,
and for MedicarePlus products offered by such orga-
nizations (other than MedicarePlus products offered
by qualified associations that are issued by organiza-
tions to which section 1851(b)(1) applies).
‘‘(2) CONSULTATION WITH LABOR.—The Sec-
retary shall consult with the Secretary of Labor with
respect to such standards for such sponsors and
products.
‘‘(3) TIMING.—Standards under this subsection
shall be promulgated at or about the time standards
are promulgated under subsection (a).
‘‘(c) ESTABLISHMENT
OF STANDARDS
FOR PRO-
VIDER-SPONSORED ORGANIZATIONS.—
‘‘(1) IN GENERAL.—The Secretary shall estab-
lish, on an expedited basis and using a negotiated
rulemaking process under subchapter 3 of chapter 5
of title 5, United States Code, standards that enti-
ties must meet to qualify as provider-sponsored or-
ganizations under this part.
‘‘(2) PUBLICATION
OF
NOTICE.—In carrying
out the rulemaking process under this subsection,
the Secretary, after consultation with the National
Association of Insurance Commissioners, the Amer-
ican Academy of Actuaries, organizations represent-
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ative of medicare beneficiaries, and other interested
parties, shall publish the notice provided for under
section 564(a) of title 5, United States Code, by not
later than 45 days after the date of the enactment
of Medicare Preservation Act of 1995.
‘‘(3) TARGET
DATE
FOR
PUBLICATION
OF
RULE.—As part of the notice under paragraph (2),
and for purposes of this subsection, the ‘target date
for publication’ (referred to in section 564(a)(5) of
such title) shall be September 1, 1996.
‘‘(4) ABBREVIATED
PERIOD
FOR
SUBMISSION
OF COMMENTS.—In applying section 564(c) of such
title under this subsection, ‘15 days’ shall be sub-
stituted for ‘30 days’.
‘‘(5) APPOINTMENT
OF
NEGOTIATED
RULE-
MAKING COMMITTEE AND FACILITATOR.—The Sec-
retary shall provide for—
‘‘(A) the appointment of a negotiated rule-
making committee under section 565(a) of such
title by not later than 30 days after the end of
the comment period provided for under section
564(c) of such title (as shortened under para-
graph (4)), and
‘‘(B) the nomination of a facilitator under
section 566(c) of such title by not later than 10
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days after the date of appointment of the com-
mittee.
‘‘(6) PRELIMINARY COMMITTEE REPORT.—The
negotiated rulemaking committee appointed under
paragraph (5) shall report to the Secretary, by not
later than June 1, 1996, regarding the committee’s
progress on achieving a concensus with regard to the
rulemaking proceeding and whether such consensus
is likely to occur before one month before the target
date for publication of the rule. If the committee re-
ports that the committee has failed to make signifi-
cant progress towards such consensus or is unlikely
to reach such consensus by the target date, the Sec-
retary may terminate such process and provide for
the publication of a rule under this subsection
through such other methods as the Secretary may
provide.
‘‘(7) FINAL COMMITTEE REPORT.—If the com-
mittee is not terminated under paragraph (6), the
rulemaking committee shall submit a report contain-
ing a proposed rule by not later than one month be-
fore the target publication date.
‘‘(8) INTERIM, FINAL EFFECT.—The Secretary
shall publish a rule under this subsection in the Fed-
eral Register by not later than the target publication
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date. Such rule shall be effective and final imme-
diately on an interim basis, but is subject to change
and revision after public notice and opportunity for
a period (of not less than 60 days) for public com-
ment. In connection with such rule, the Secretary
shall specify the process for the timely review and
approval of applications of entities to be certified as
provider-sponsored organizations pursuant to such
rules and consistent with this subsection.
‘‘(9) PUBLICATION
OF
RULE
AFTER
PUBLIC
COMMENT.—The Secretary shall provide for consid-
eration of such comments and republication of such
rule by not later than 1 year after the target publi-
cation date.
‘‘(10) PROCESS
FOR
APPROVAL
OF
APPLICA-
TIONS FOR CERTIFICATION.—
‘‘(A) IN
GENERAL.—The Secretary shall
establish a process for the receipt and approval
of applications of entities for certification as
provider-sponsored organizations under this
part. Under such process, the Secretary shall
act upon a complete application submitted with-
in 60 days after the date it is received.
‘‘(B) CIRCULATION OF PROPOSED APPLI-
CATION FORM.—By March 1, 1996, the Sec-
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retary, after consultation with the negotiated
rulemaking committee, shall circulate a pro-
posed application form that could be used by
entities considering becoming certified as a pro-
vider-sponsored organization under this part.
‘‘(d) COORDINATION AMONG FINAL STANDARDS.—In
establishing standards (other than on an interim basis)
under the previous provisions of this section, the Secretary
shall seek to provide for consistency (as appropriate)
across the different types of MedicarePlus organizations,
in order to promote equitable treatment of different types
of organizations and consistent protection for individuals
who elect products offered by the different types of
MedicarePlus organizations.
‘‘(e) USE OF CURRENT STANDARDS FOR INTERIM
STANDARDS.—To the extent practicable and consistent
with the requirements of this part, standards established
on an interim basis to carry out requirements of this part
may be based on currently applicable standards, such as
the rules established under section 1876 (as in effect as
of the date of the enactment of this section) to carry out
analogous provisions of such section or standards estab-
lished or developed for application in the private health
insurance market.
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‘‘(f) APPLICATION OF NEW STANDARDS TO ENTITIES
WITH A CONTRACT.—In the case of a MedicarePlus orga-
nization with a contract in effect under this part at the
time standards applicable to the organization under this
section are changed, the organization may elect not to
have such changes apply to the organization until the end
of the current contract year (or, if there is less than 6
months remaining in the contract year, until 1 year after
the end of the current contract year).
‘‘(g) RELATION TO STATE LAWS.—The standards es-
tablished under this section shall supersede any State law
or regulation with respect to MedicarePlus products which
are offered by MedicarePlus organizations and are issued
by organizations to which section 1851(b)(1) applies, to
the extent such law or regulation is inconsistent with such
standards.
‘‘MEDICARE-PLUS CERTIFICATION
‘‘SEC. 1857. (a) STATE CERTIFICATION PROCESS
FOR STATE-REGULATED ORGANIZATIONS.—
‘‘(1) APPROVAL OF STATE PROCESS.—The Sec-
retary shall approve a MedicarePlus certification and
enforcement program established by a State for ap-
plying the standards established under section 1856
to MedicarePlus organizations (other than union
sponsors, Taft-Hartley sponsors, and provider-spon-
sored organizations) and MedicarePlus products of-
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fered by such organizations if the Secretary deter-
mines that the program effectively provides for the
application and enforcement of such standards in
the State with respect to such organizations and
products. Such program shall provide for certifi-
cation of compliance of MedicarePlus organizations
and products with the applicable requirements of
this part not less often than once every 3 years.
‘‘(2) EFFECT OF CERTIFICATION UNDER STATE
PROCESS.—A 
MedicarePlus 
organization 
and
MedicarePlus product offered by such an organiza-
tion that is certified under such program is consid-
ered to have been certified under this subsection
with respect to the offering of the product to individ-
uals residing in the State.
‘‘(3) USER FEES.—The State may impose user
fees on organizations seeking certification under this
subsection in such amounts as the State deems suffi-
cient to finance the costs of such certification. Noth-
ing in this paragraph shall be construed as restrict-
ing a State’s authority to impose premium taxes,
other taxes, or other levies.
‘‘(4) REVIEW.—The Secretary periodically shall
review State programs approved under paragraph
(1) to determine if they continue to provide for cer-
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tification and enforcement described in such para-
graph. If the Secretary finds that a State program
no longer so provides, before making a final deter-
mination, the Secretary shall provide the State an
opportunity to adopt such a plan of correction as
would permit the State program to meet the require-
ments of paragraph (1). If the Secretary makes a
final determination that the State program, after
such an opportunity, fails to meet such require-
ments, the provisions of subsection (b) shall apply to
MedicarePlus organizations and products in the
State.
‘‘(5) EFFECT OF NO STATE PROGRAM.—Begin-
ning on the date standards are established under
section 1856, in the case of organizations and prod-
ucts in States in which a certification program has
not been approved and in operation under paragraph
(1), the Secretary shall establish a process for the
certification of MedicarePlus organizations (other
than union sponsors, Taft-Hartley sponsors, and
provider-sponsored organizations) and products of
such organizations as meeting such standards.
‘‘(6) PUBLICATION
OF
LIST
OF
APPROVED
STATE
PROGRAMS.—The Secretary shall publish
(and periodically update) a list of those State pro-
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grams which are approved for purposes of this sub-
section.
‘‘(b) FEDERAL CERTIFICATION PROCESS FOR UNION
SPONSORS, TAFT-HARTLEY SPONSORS, AND PROVIDER-
SPONSORED ORGANIZATIONS.—
‘‘(1) ESTABLISHMENT.—The Secretary shall es-
tablish a process for the certification of union spon-
sors, Taft-Hartley sponsors, and provider-sponsored
organizations and MedicarePlus products offered by
such sponsors and organizations as meeting the ap-
plicable standards established under section 1856.
‘‘(2) 
INVOLVEMENT
OF
SECRETARY
OF
LABOR.—Such process shall be established and oper-
ated in cooperation with the Secretary of Labor with
respect to union sponsors and Taft-Hartley spon-
sors.
‘‘(3) USE OF STATE LICENSING AND PRIVATE
ACCREDITATION PROCESSES.—
‘‘(A) IN
GENERAL.—The process under
this subsection shall, to the maximum extent
practicable, provide that MedicarePlus organi-
zations and products that are licensed or cer-
tified through a qualified private accreditation
process that the Secretary finds applies stand-
ards that are no less stringent than the require-
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ments of this part are deemed to meet the cor-
responding requirements of this part for such
an organization or product.
‘‘(B) PERIODIC ACCREDITATION.—The use
of an accreditation under subparagraph (A)
shall be valid only for such period as the Sec-
retary specifies.
‘‘(4) USER FEES.—The Secretary may impose
user fees on entities seeking certification under this
subsection in such amounts as the Secretary deems
sufficient to finance the costs of such certification.
‘‘(c) CERTIFICATION OF PROVIDER-SPONSORED OR-
GANIZATIONS BY STATES.—
‘‘(1) IN GENERAL.—The Secretary shall estab-
lish a process under which a State may propose to
provide for certification of entities as meeting the re-
quirements of this part to be provider-sponsored or-
ganizations.
‘‘(2) CONDITIONS
FOR
APPROVAL.—The Sec-
retary may not approve a State program for certifi-
cation under paragraph (1) unless the Secretary de-
termines that the certification program applies
standards and requirements that are identical to the
standards and requirements of this part and the ap-
plicable provisions for enforcement of such standards
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and requirements do not result in a lower level or
quality of enforcement than that which is otherwise
applicable under this title.
‘‘(d) NOTICE TO ENROLLEES IN CASE OF DECERTI-
FICATION.—If a MedicarePlus organization or product is
decertified under this section, the organization shall notify
each enrollee with the organization and product under this
part of such decertification.
‘‘(e) QUALIFIED ASSOCIATIONS.—In the case of
MedicarePlus products offered by a MedicarePlus organi-
zation that is a qualified association (as defined in section
1854(c)(4)(C)) and issued by an organization to which
section 1851(b)(1) applies or by a provider-sponsored or-
ganization (as defined in section 1854(a)), nothing in this
section shall be construed as limiting the authority of
States to regulate such products.
‘‘CONTRACTS WITH MEDICAREPLUS ORGANIZATIONS
‘‘SEC. 1858. (a) IN GENERAL.—The Secretary shall
not permit the election under section 1805 of a
MedicarePlus product offered by a MedicarePlus organiza-
tion under this part, and no payment shall be made under
section 1856 to an organization, unless the Secretary has
entered into a contract under this section with an organi-
zation with respect to the offering of such product. Such
a contract with an organization may cover more than one
MedicarePlus product. Such contract shall provide that
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the organization agrees to comply with the applicable re-
quirements and standards of this part and the terms and
conditions of payment as provided for in this part.
‘‘(b) MINIMUM ENROLLMENT REQUIREMENTS.—
‘‘(1) IN GENERAL.—Subject to paragraphs (1)
and (2), the Secretary may not enter into a contract
under this section with a MedicarePlus organization
(other than a union sponsor or Taft-Hartley spon-
sor) unless the organization has at least 5,000 indi-
viduals (or 1,500 individuals in the case of an orga-
nization that is a provider-sponsored organization)
who are receiving health benefits through the organi-
zation, except that the standards under section 1856
may permit the organization to have a lesser number
of beneficiaries (but not less than 500 in the case
of an organization that is a provider-sponsored orga-
nization) if the organization primarily serves individ-
uals residing outside of urbanized areas.
‘‘(2) EXCEPTION
FOR
HIGH
DEDUCTIBLE/
MEDISAVE PRODUCT.—Paragraph (1) shall not apply
with respect to a contract that relates only to a high
deductible/medisave product.
‘‘(3) ALLOWING
TRANSITION.—The Secretary
may waive the requirement of paragraph (1) during
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the first 3 contract years with respect to an organi-
zation.
‘‘(c) CONTRACT PERIOD AND EFFECTIVENESS.—
‘‘(1) PERIOD.—Each contract under this sec-
tion shall be for a term of at least one year, as de-
termined by the Secretary, and may be made auto-
matically renewable from term to term in the ab-
sence of notice by either party of intention to termi-
nate at the end of the current term.
‘‘(2) TERMINATION
AUTHORITY.—In accord-
ance with procedures established under subsection
(h), the Secretary may at any time terminate any
such contract or may impose the intermediate sanc-
tions described in an applicable paragraph of sub-
section (g) on the MedicarePlus organization if the
Secretary determines that the organization—
‘‘(A) has failed substantially to carry out
the contract;
‘‘(B) is carrying out the contract in a man-
ner inconsistent with the efficient and effective
administration of this part;
‘‘(C) is operating in a manner that is not
in the best interests of the individuals covered
under the contract; or
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‘‘(D) no longer substantially meets the ap-
plicable conditions of this part.
‘‘(3) EFFECTIVE
DATE
OF
CONTRACTS.—The
effective date of any contract executed pursuant to
this section shall be specified in the contract, except
that in no case shall a contract under this section
which provides for coverage under a high deductible/
medisave account be effective before January 1997
with respect to such coverage.
‘‘(4) PREVIOUS TERMINATIONS.—The Secretary
may not enter into a contract with a MedicarePlus
organization if a previous contract with that organi-
zation under this section was terminated at the re-
quest of the organization within the preceding five-
year period, except in circumstances which warrant
special consideration, as determined by the Sec-
retary.
‘‘(5) NO CONTRACTING AUTHORITY.—The au-
thority vested in the Secretary by this part may be
performed without regard to such provisions of law
or regulations relating to the making, performance,
amendment, or modification of contracts of the
United States as the Secretary may determine to be
inconsistent with the furtherance of the purpose of
this title.
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‘‘(d) PROTECTIONS AGAINST FRAUD
AND BENE-
FICIARY PROTECTIONS.—
‘‘(1) INSPECTION AND AUDIT.—Each contract
under this section shall provide that the Secretary,
or any person or organization designated by the Sec-
retary—
‘‘(A) shall have the right to inspect or oth-
erwise evaluate (i) the quality, appropriateness,
and timeliness of services performed under the
contract and (ii) the facilities of the organiza-
tion when there is reasonable evidence of some
need for such inspection, and
‘‘(B) shall have the right to audit and in-
spect 
any 
books 
and 
records 
of 
the
MedicarePlus organization that pertain (i) to
the ability of the organization to bear the risk
of potential financial losses, or (ii) to services
performed or determinations of amounts pay-
able under the contract.
‘‘(2) ENROLLEE NOTICE AT TIME OF TERMI-
NATION.—Each contract under this section shall re-
quire the organization to provide (and pay for) writ-
ten notice in advance of the contract’s termination,
as well as a description of alternatives for obtaining
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benefits under this title, to each individual enrolled
with the organization under this part.
‘‘(3) DISCLOSURE.—
‘‘(A) IN
GENERAL.—Each MedicarePlus
organization shall, in accordance with regula-
tions of the Secretary, report to the Secretary
financial information which shall include the
following:
‘‘(i) Such information as the Sec-
retary may require demonstrating that the
organization has a fiscally sound operation.
‘‘(ii) A copy of the report, if any, filed
with the Health Care Financing Adminis-
tration containing the information required
to be reported under section 1124 by dis-
closing entities.
‘‘(iii) A description of transactions, as
specified by the Secretary, between the or-
ganization and a party in interest. Such
transactions shall include—
‘‘(I) any sale or exchange, or
leasing of any property between the
organization and a party in interest;
‘‘(II) any furnishing for consider-
ation of goods, services (including
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management services), or facilities be-
tween the organization and a party in
interest, but not including salaries
paid to employees for services pro-
vided in the normal course of their
employment and health services pro-
vided to members by hospitals and
other providers and by staff, medical
group (or groups), individual practice
association (or associations), or any
combination thereof; and
‘‘(III) any lending of money or
other extension of credit between an
organization and a party in interest.
The Secretary may require that information re-
ported respecting an organization which con-
trols, is controlled by, or is under common con-
trol with, another entity be in the form of a
consolidated financial statement for the organi-
zation and such entity.
‘‘(B) PARTY IN INTEREST DEFINED.—For
the purposes of this paragraph, the term ‘party
in interest’ means—
‘‘(i) any director, officer, partner, or
employee responsible for management or
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administration of a MedicarePlus organiza-
tion, any person who is directly or indi-
rectly the beneficial owner of more than 5
percent of the equity of the organization,
any person who is the beneficial owner of
a mortgage, deed of trust, note, or other
interest secured by, and valuing more than
5 percent of the organization, and, in the
case of a MedicarePlus organization orga-
nized as a nonprofit corporation, an incor-
porator or member of such corporation
under applicable State corporation law;
‘‘(ii) any entity in which a person de-
scribed in clause (i)—
‘‘(I) is an officer or director;
‘‘(II) is a partner (if such entity
is organized as a partnership);
‘‘(III) has directly or indirectly a
beneficial interest of more than 5 per-
cent of the equity; or
‘‘(IV) has a mortgage, deed of
trust, note, or other interest valuing
more than 5 percent of the assets of
such entity;
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‘‘(iii) any person directly or indirectly
controlling, controlled by, or under com-
mon control with an organization; and
‘‘(iv) any spouse, child, or parent of
an individual described in clause (i).
‘‘(C) ACCESS
TO
INFORMATION.—Each
MedicarePlus organization shall make the infor-
mation reported pursuant to subparagraph (A)
available to its enrollees upon reasonable re-
quest.
‘‘(4) LOAN INFORMATION.—The contract shall
require the organization to notify the Secretary of
loans and other special financial arrangements which
are made between the organization and subcontrac-
tors, affiliates, and related parties.
‘‘(e) ADDITIONAL CONTRACT TERMS.—The contract
shall contain such other terms and conditions not incon-
sistent with this part (including requiring the organization
to provide the Secretary with such information) as the
Secretary may find necessary and appropriate.
‘‘(f) INTERMEDIATE SANCTIONS.—
‘‘(1) IN GENERAL.—If the Secretary determines
that a MedicarePlus organization with a contract
under this section—
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‘‘(A) fails substantially to provide medi-
cally necessary items and services that are re-
quired (under law or under the contract) to be
provided to an individual covered under the con-
tract, if the failure has adversely affected (or
has substantial likelihood of adversely affecting)
the individual;
‘‘(B) imposes premiums on individuals en-
rolled under this part in excess of the premiums
permitted;
‘‘(C) acts to expel or to refuse to re-enroll
an individual in violation of the provisions of
this part;
‘‘(D) engages in any practice that would
reasonably be expected to have the effect of de-
nying or discouraging enrollment (except as
permitted by this part) by eligible individuals
with the organization whose medical condition
or history indicates a need for substantial fu-
ture medical services;
‘‘(E) misrepresents or falsifies information
that is furnished—
‘‘(i) to the Secretary under this part,
or
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‘‘(ii) to an individual or to any other
entity under this part;
‘‘(F) fails to comply with the requirements
of section 1852(f)(3); or
‘‘(G) employs or contracts with any indi-
vidual or entity that is excluded from participa-
tion under this title under section 1128 or
1128A for the provision of health care, utiliza-
tion review, medical social work, or administra-
tive services or employs or contracts with any
entity for the provision (directly or indirectly)
through such an excluded individual or entity of
such services;
the Secretary may provide, in addition to any other
remedies authorized by law, for any of the remedies
described in paragraph (2).
‘‘(2) REMEDIES.—The remedies described in
this paragraph are—
‘‘(A) civil money penalties of not more
than $25,000 for each determination under
paragraph (1) or, with respect to a determina-
tion under subparagraph (D) or (E)(i) of such
paragraph, of not more than $100,000 for each
such determination, plus, with respect to a de-
termination under paragraph (1)(B), double the
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excess amount charged in violation of such
paragraph (and the excess amount charged
shall be deducted from the penalty and returned
to the individual concerned), and plus, with re-
spect to a determination under paragraph
(1)(D), $15,000 for each individual not enrolled
as a result of the practice involved,
‘‘(B) suspension of enrollment of individ-
uals under this part after the date the Sec-
retary notifies the organization of a determina-
tion under paragraph (1) and until the Sec-
retary is satisfied that the basis for such deter-
mination has been corrected and is not likely to
recur, or
‘‘(C) suspension of payment to the organi-
zation under this part for individuals enrolled
after the date the Secretary notifies the organi-
zation of a determination under paragraph (1)
and until the Secretary is satisfied that the
basis for such determination has been corrected
and is not likely to recur.
‘‘(3) OTHER
INTERMEDIATE
SANCTIONS.—In
the case of a MedicarePlus organization for which
the Secretary makes a determination under sub-
section (c)(2) the basis of which is not described in
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paragraph (1), the Secretary may apply the follow-
ing intermediate sanctions:
‘‘(A) civil money penalties of not more
than $25,000 for each determination under
subsection (c)(2) if the deficiency that is the
basis of the determination has directly adversely
affected (or has the substantial likelihood of ad-
versely affecting) an individual covered under
the organization’s contract;
‘‘(B) civil money penalties of not more
than $10,000 for each week beginning after the
initiation of procedures by the Secretary under
subsection (h) during which the deficiency that
is the basis of a determination under subsection
(c)(2) exists; and
‘‘(C) suspension of enrollment of individ-
uals under this part after the date the Sec-
retary notifies the organization of a determina-
tion under subsection (c)(2) and until the Sec-
retary is satisfied that the deficiency that is the
basis for the determination has been corrected
and is not likely to recur.
‘‘(4) 
PROCEDURES
FOR
IMPOSING
SANC-
TIONS.—The provisions of section 1128A (other
than subsections (a) and (b)) shall apply to a civil
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money penalty under paragraph (1) or (2) in the
same manner as they apply to a civil money penalty
or proceeding under section 1128A(a).
‘‘(g) PROCEDURES FOR IMPOSING SANCTIONS.—The
Secretary may terminate a contract with a MedicarePlus
organization under this section or may impose the inter-
mediate sanctions described in subsection (f) on the orga-
nization in accordance with formal investigation and com-
pliance procedures established by the Secretary under
which—
‘‘(1) the Secretary provides the organization
with the opportunity to develop and implement a
corrective action plan to correct the deficiencies that
were the basis of the Secretary’s determination
under subsection (c)(2);
‘‘(2) the Secretary shall impose more severe
sanctions on organizations that have a history of de-
ficiencies or that have not taken steps to correct de-
ficiencies the Secretary has brought to their atten-
tion;
‘‘(3) there are no unreasonable or unnecessary
delays between the finding of a deficiency and the
imposition of sanctions; and
‘‘(4) the Secretary provides the organization
with reasonable notice and opportunity for hearing
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(including the right to appeal an initial decision) be-
fore imposing any sanction or terminating the con-
tract.’’.
(b) CONFORMING REFERENCES TO PREVIOUS PART
C.—Any reference in law (in effect before the date of the
enactment of this Act) to part C of title XVIII of the So-
cial Security Act is deemed a reference to part D of such
title (as in effect after such date).
(c) USE
OF INTERIM, FINAL REGULATIONS.—In
order to carry out the amendment made by subsection (a)
in a timely manner, the Secretary of Health and Human
Services may promulgate regulations that take effect on
an interim basis, after notice and pending opportunity for
public comment.
(d) ADVANCE DIRECTIVES.—Section 1866(f) (42
U.S.C. 1395cc(f)) is amended—
(1) in paragraph (1)—
(A) 
by 
inserting 
‘‘1853(g),’’ 
after
‘‘1833(s),’’, and
(B) by inserting ‘‘, MedicarePlus organiza-
tion,’’ after ‘‘provider of services’’, and
(2) by adding at the end the following new
paragraph:
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‘‘(4) Nothing in this subsection shall be construed to
require the provision of information regarding assisted
suicide, euthanasia, or mercy killing.’’.
(e) 
CONFORMING
AMENDMENT.—Section
1866(a)(1)(O) (42 U.S.C. 1395cc(a)(1)(O)) is amended
by inserting before the semicolon at the end the following:
‘‘and in the case of hospitals to accept as payment in full
for inpatient hospital services that are emergency services
(as defined in section 1853(b)(4)) that are covered under
this title and are furnished to any individual enrolled
under part C with a MedicarePlus organization which does
not have a contract establishing payment amounts for
services furnished to members of the organization the
amounts that would be made as a payment in full under
this title if the individuals were not so enrolled’’.
SEC. 15003. DUPLICATION AND COORDINATION OF MEDI-
CARE-RELATED PRODUCTS.
(a) TREATMENT OF CERTAIN HEALTH INSURANCE
POLICIES AS NONDUPLICATIVE.—
(1) IN GENERAL.—Effective as if included in
the enactment of section 4354 of the Omnibus
Budget 
Reconciliation 
Act 
of 
1990, 
section
1882(d)(3)(A) (42 U.S.C. 1395ss(d)(3)(A)) is
amended—
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(A) by amending clause (i) to read as fol-
lows:
‘‘(i) It is unlawful for a person to sell or issue to an
individual entitled to benefits under part A or enrolled
under part B of this title or electing a MedicarePlus prod-
uct under section 1805—
‘‘(I) a health insurance policy (other than a
medicare supplemental policy) with knowledge that
the policy duplicates health benefits to which the in-
dividual is otherwise entitled under this title or title
XIX,
‘‘(II) in the case of an individual not electing a
MedicarePlus product, a medicare supplemental pol-
icy with knowledge that the individual is entitled to
benefits under another medicare supplemental policy,
or
‘‘(III) in the case of an individual electing a
MedicarePlus product, a medicare supplemental pol-
icy with knowledge that the policy duplicates health
benefits to which the individual is otherwise entitled
under this title or under another medicare supple-
mental policy.’’;
(B) in clause (iii), by striking ‘‘clause (i)’’
and inserting ‘‘clause (i)(II)’’; and
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(C) by adding at the end the following new
clauses:
‘‘(iv) For purposes of this subparagraph a health in-
surance policy shall be considered to ‘duplicate’ benefits
under this title only when, under its terms, the policy pro-
vides specific reimbursement for identical items and serv-
ices to the extent paid for under this title, and a health
insurance policy providing for benefits which are payable
to or on behalf of an individual without regard to other
health benefit coverage of such individual is not considered
to ‘duplicate’ any health benefits under this title.
‘‘(v) For purposes of this subparagraph, a health in-
surance policy (or a rider to an insurance contract which
is not a health insurance policy), including a policy (such
as a long-term care insurance contract described in section
7702B(b) of the Internal Revenue Code of 1986, as added
by the Contract with America Tax Relief Act of 1995
(H.R. 1215)) providing benefits for long-term care, nurs-
ing home care, home health care, or community-based
care, that coordinates against or excludes items and serv-
ices available or paid for under this title and (for policies
sold or issued after January 1, 1996) that discloses such
coordination or exclusion in the policy’s outline of cov-
erage, is not considered to ‘duplicate’ health benefits
under this title. For purposes of this clause, the terms ‘co-
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ordinates’ and ‘coordination’ mean, with respect to a pol-
icy in relation to health benefits under this title, that the
policy under its terms is secondary to, or excludes from
payment, items and services to the extent available or paid
for under this title.
‘‘(vi) Notwithstanding any other provision of law, no
criminal or civil penalty may be imposed at any time under
this subparagraph and no legal action may be brought or
continued at any time in any Federal or State court if
the penalty or action is based on an act or omission that
occurred after November 5, 1991, and before the date of
the enactment of this clause, and relates to the sale, issu-
ance, or renewal of any health insurance policy during
such period, if such policy meets the requirements of
clause (iv) or (v).
‘‘(vii) A State may not impose, with respect to the
sale or issuance of a policy (or rider) that meets the re-
quirements of this title pursuant to clause (iv) or (v) to
an individual entitled to benefits under part A or enrolled
under part B or enrolled under a MedicarePlus product
under part C, any requirement based on the premise that
such a policy or rider duplicates health benefits to which
the individual is otherwise entitled under this title.’’.
(2) 
CONFORMING
AMENDMENTS.—Section
1882(d)(3) (42 U.S.C. 1395ss(d)(3)) is amended—
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(A) in subparagraph (B), by inserting
‘‘(including any MedicarePlus product)’’ after
‘‘health insurance policies’’;
(B) in subparagraph (C)—
(i) by striking ‘‘with respect to (i)’’
and inserting ‘‘with respect to’’, and
(ii) by striking ‘‘, (ii) the sale’’ and all
that follows up to the period at the end;
and
(C) by striking subparagraph (D).
(3) MEDICAREPLUS PRODUCTS NOT TREATED
AS MEDICARE SUPPLEMENTARY POLICIES.—Section
1882(g) (42 U.S.C. 1395ss(g)) is amended by in-
serting ‘‘a MedicarePlus product or’’ after ‘‘and does
not include’’
(4) REPORT ON DUPLICATION AND COORDINA-
TION OF HEALTH INSURANCE POLICIES THAT ARE
NOT
MEDICARE
SUPPLEMENTAL
POLICIES.—Not
later than 3 years after the date of the enactment
of this Act, the Secretary of Health and Human
Services shall prepare and submit to Congress a re-
port on the advisability and feasibility of restricting
the sale to medicare beneficiaries of health insurance
policies that duplicate (within the meaning of section
1882(d)(3)(A) of the Social Security Act) other
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health insurance policies that such a beneficiary may
have. In preparing such report, the Secretary shall
seek the advice of the National Association of Insur-
ance Commissioners and shall take into account the
standards established under section 1807 of the So-
cial Security Act for the electronic coordination of
benefits.
(b) ADDITIONAL RULES RELATING TO INDIVIDUALS
ENROLLED
IN
MEDICAREPLUS
PRODUCTS.—Section
1882 (42 U.S.C. 1395ss) is further amended by adding
at the end the following new subsection:
‘‘(u)(1) Notwithstanding the previous provisions of
this section, the following provisions shall not apply to a
health insurance policy (other than a medicare supple-
mental policy) provided to an individual who has elected
the MedicarePlus option under section 1805:
‘‘(A) Subsections (o)(1), (o)(2), (p)(1)(A)(i),
(p)(2), (p)(3), (p)(8), and (p)(9) (insofar as they re-
late to limitations on benefits or groups of benefits
that may be offered).
‘‘(B) Subsection (r) (relating to loss-ratios).
‘‘(2)(A) It is unlawful for a person to sell or issue
a policy described in subparagraph (B) to an individual
with knowledge that the individual has in effect under sec-
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tion 1805 an election of a high deductible/medisave prod-
uct.
‘‘(B) A policy described in this subparagraph is a
health insurance policy that provides for coverage of ex-
penses that are otherwise required to be counted toward
meeting the annual deductible amount provided under the
high deductible/medisave product.’’.
SEC. 15004. TRANSITIONAL RULES FOR CURRENT MEDI-
CARE HMO PROGRAM.
(a) TRANSITION FROM CURRENT CONTRACTS.—
(1) LIMITATION ON NEW CONTRACTS.—
(A) NO
NEW
RISK-SHARING
CONTRACTS
AFTER
NEW
STANDARDS
ESTABLISHED.—The
Secretary of Health and Human Services (in
this section referred to as the ‘‘Secretary’’)
shall not enter into any risk-sharing contract
under section 1876 of the Social Security Act
with an eligible organization for any contract
year beginning on or after the date standards
for MedicarePlus organizations and products
are first established under section 1856(a) of
such Act with respect to MedicarePlus organi-
zations that are insurers or health maintenance
organizations unless such a contract had been
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in effect under section 1876 of such Act for the
organization for the previous contract year.
(B) NO NEW COST REIMBURSEMENT CON-
TRACTS.—The Secretary shall not enter into
any cost reimbursement contract under section
1876 of the Social Security Act beginning for
any contract year beginning on or after the
date of the enactment of this Act.
(2) TERMINATION OF CURRENT CONTRACTS.—
(A) RISK-SHARING CONTRACTS.—Notwith-
standing any other provision of law, the Sec-
retary shall not extend or continue any risk-
sharing contract with an eligible organization
under section 1876 of the Social Security Act
(for which a contract was entered into consist-
ent with paragraph (1)(A)) for any contract
year beginning on or after 1 year after the date
standards described in paragraph (1)(A) are es-
tablished.
(B) COST REIMBURSEMENT CONTRACTS.—
The Secretary shall not extend or continue any
reasonable cost reimbursement contract with an
eligible organization under section 1876 of the
Social Security Act for any contract year begin-
ning on or after January 1, 1998.
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(b) CONFORMING PAYMENT RATES.—
(1) RISK-SHARING CONTRACTS.—Notwithstand-
ing any other provision of law, the Secretary shall
provide that payment amounts under risk-sharing
contracts under section 1876(a) of the Social Secu-
rity Act for months in a year (beginning with Janu-
ary 1996) shall be computed—
(A) with respect to individuals entitled to
benefits under both parts A and B of title
XVIII of such Act, by substituting payment
rates under section 1855(a) of such Act for the
payment rates otherwise established under sec-
tion 1876(a) of such Act, and
(B) with respect to individuals only enti-
tled to benefits under part B of such title, by
substituting an appropriate proportion of such
rates (reflecting the relative proportion of pay-
ments under such title attributable to such
part) for the payment rates otherwise estab-
lished under section 1876(a) of such Act.
For purposes of carrying out this paragraph for pay-
ment for months in 1996, the Secretary shall com-
pute, announce, and apply the payment rates under
section 1855(a) of such Act (notwithstanding any
deadlines specified in such section) in as timely a
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manner as possible and may (to the extent nec-
essary) provide for retroactive adjustment in pay-
ments made not in accordance with such rates.
(2) COST
CONTRACTS.—Notwithstanding any
other provision of law, the Secretary shall provide
that payment amounts under cost reimbursement
contracts under section 1876(a) of the Social Secu-
rity Act shall take into account adjustments in pay-
ment amounts made in parts A and B of title XVIII
of such Act pursuant to the amendments made by
this title.
(c) ELIMINATION OF 50:50 RULE.—
(1) IN
GENERAL.—Section 1876 (42 U.S.C.
1395mm) is amended by striking subsection (f).
(2) CONFORMING AMENDMENTS.—Section 1876
is further amended—
(A) in subsection (c)(3)(A)(i), by striking
‘‘would result in failure to meet the require-
ments of subsection (f) or’’, and
(B) in subsection (i)(1)(C), by striking
‘‘(e), and (f)’’ and inserting ‘‘and (e)’’.
(3) EFFECTIVE DATE.—The amendments made
by this section shall apply to contract years begin-
ning on or after January 1, 1996.
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PART 2—SPECIAL RULES FOR MEDICAREPLUS
MEDICAL SAVINGS ACCOUNTS
SEC. 15011. MEDICAREPLUS MSA’S.
(a) IN GENERAL.—Part III of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to
amounts specifically excluded from gross income) is
amended by redesignating section 137 as section 138 and
by inserting after section 136 the following new section:
‘‘SEC. 137. MEDICAREPLUS MSA’S.
‘‘(a) EXCLUSION.—Gross income shall not include
any payment to the MedicarePlus MSA of an individual
by the Secretary of Health and Human Services under
section 1855(f)(1)(B) of the Social Security Act.
‘‘(b) MEDICAREPLUS MSA.—For purposes of this
section—
‘‘(1) 
MEDICAREPLUS
MSA.—The 
term
‘MedicarePlus MSA’ means a trust created or orga-
nized in the United States exclusively for the pur-
pose of paying the qualified medical expenses of the
account holder, but only if the written governing in-
strument creating the trust meets the following re-
quirements:
‘‘(A) Except in the case of a trustee-to-
trustee transfer described in subsection (d)(4),
no contribution will be accepted unless it is
made by the Secretary of Health and Human
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Services under section 1855(f)(1)(B) of the So-
cial Security Act.
‘‘(B) The trustee is a bank (as defined in
section 408(n)), an insurance company (as de-
fined in section 816), or another person who
demonstrates to the satisfaction of the Sec-
retary that the manner in which such person
will administer the trust will be consistent with
the requirements of this section.
‘‘(C) No part of the trust assets will be in-
vested in life insurance contracts.
‘‘(D) The assets of the trust will not be
commingled with other property except in a
common trust fund or common investment
fund.
‘‘(E) The interest of an individual in the
balance in his account is nonforfeitable.
‘‘(F) Trustee-to-trustee transfers described
in subsection (d)(4) may be made to and from
the trust.
‘‘(2) QUALIFIED MEDICAL EXPENSES.—
‘‘(A) IN
GENERAL.—The term ‘qualified
medical expenses’ means, with respect to an ac-
count holder, amounts paid by such holder—
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‘‘(i) for medical care (as defined in
section 213(d)) for the account holder, but
only to the extent such amounts are not
compensated for by insurance or otherwise,
or
‘‘(ii) for long-term care insurance for
the account holder.
‘‘(B) HEALTH
INSURANCE
MAY
NOT
BE
PURCHASED
FROM
ACCOUNT.—Subparagraph
(A)(i) shall not apply to any payment for insur-
ance.
‘‘(3) ACCOUNT
HOLDER.—The term ‘account
holder’ means the individual on whose behalf the
MedicarePlus MSA is maintained.
‘‘(4) CERTAIN RULES TO APPLY.—Rules similar
to the rules of subsections (g) and (h) of section 408
shall apply for purposes of this section.
‘‘(c) TAX TREATMENT OF ACCOUNTS.—
‘‘(1) IN GENERAL.—A MedicarePlus MSA is ex-
empt from taxation under this subtitle unless such
MSA has ceased to be a MedicarePlus MSA by rea-
son of paragraph (2). Notwithstanding the preceding
sentence, any such MSA is subject to the taxes im-
posed by section 511 (relating to imposition of tax
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on unrelated business income of charitable, etc. or-
ganizations).
‘‘(2) ACCOUNT ASSETS TREATED AS DISTRIB-
UTED IN THE CASE OF PROHIBITED TRANSACTIONS
OR ACCOUNT PLEDGED AS SECURITY FOR LOAN.—
Rules similar to the rules of paragraphs (2) and (4)
of section 408(e) shall apply to MedicarePlus
MSA’s, and any amount treated as distributed under
such rules shall be treated as not used to pay quali-
fied medical expenses.
‘‘(d) TAX TREATMENT OF DISTRIBUTIONS.—
‘‘(1) INCLUSION OF AMOUNTS NOT USED FOR
QUALIFIED MEDICAL EXPENSES.—No amount shall
be included in the gross income of the account hold-
er by reason of a payment or distribution from a
MedicarePlus MSA which is used exclusively to pay
the qualified medical expenses of the account holder.
Any 
amount 
paid 
or 
distributed 
from 
a
MedicarePlus MSA which is not so used shall be in-
cluded in the gross income of such holder.
‘‘(2) PENALTY FOR DISTRIBUTIONS NOT USED
FOR
QUALIFIED
MEDICAL
EXPENSES
IF
MINIMUM
BALANCE NOT MAINTAINED.—
‘‘(A) IN GENERAL.—The tax imposed by
this chapter for any taxable year in which there
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is 
a 
payment 
or 
distribution 
from 
a
MedicarePlus MSA which is not used exclu-
sively to pay the qualified medical expenses of
the account holder shall be increased by 50 per-
cent of the excess (if any) of—
‘‘(i) the amount of such payment or
distribution, over
‘‘(ii) the excess (if any) of—
‘‘(I) the fair market value of the
assets in the MedicarePlus MSA as of
the close of the calendar year preced-
ing the calendar year in which the
taxable year begins, over
‘‘(II) an amount equal to 60 per-
cent of the deductible under the high
deductible/medisave product covering
the account holder as of January 1 of
the calendar year in which the taxable
year begins.
‘‘(B) 
EXCEPTIONS.—Subparagraph 
(A)
shall not apply if the payment or distribution is
made on or after the date the account holder—
‘‘(i) becomes disabled within the
meaning of section 72(m)(7), or
‘‘(ii) dies.
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‘‘(C) SPECIAL
RULES.—For purposes of
subparagraph (A)—
‘‘(i) all MedicarePlus MSA’s of the ac-
count holder shall be treated as 1 account,
‘‘(ii) all payments and distributions
not used exclusively to pay the qualified
medical expenses of the account holder
during any taxable year shall be treated as
1 distribution, and
‘‘(iii) any distribution of property
shall be taken into account at its fair mar-
ket value on the date of the distribution.
‘‘(3) WITHDRAWAL OF ERRONEOUS CONTRIBU-
TIONS.—Paragraphs (1) and (2) shall not apply to
any payment or distribution from a MedicarePlus
MSA to the Secretary of Health and Human Serv-
ices of an erroneous contribution to such MSA and
of the net income attributable to such contribution.
‘‘(4) 
TRUSTEE-TO-TRUSTEE
TRANSFERS.—
Paragraphs (1) and (2) shall not apply to any trust-
ee-to-trustee transfer from a MedicarePlus MSA of
an account holder to another MedicarePlus MSA of
such account holder.
‘‘(5) COORDINATION WITH MEDICAL EXPENSE
DEDUCTION.—For purposes of section 213, any pay-
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ment or distribution out of a MedicarePlus MSA for
qualified medical expenses shall not be treated as an
expense paid for medical care.
‘‘(e) TREATMENT OF ACCOUNT AFTER DEATH OF
ACCOUNT HOLDER.—
‘‘(1) TREATMENT IF DESIGNATED BENEFICIARY
IS SPOUSE.—
‘‘(A) IN GENERAL.—In the case of an ac-
count holder’s interest in a MedicarePlus MSA
which is payable to (or for the benefit of) such
holder’s spouse upon the death of such holder,
such MedicarePlus MSA shall be treated as a
MedicarePlus MSA of such spouse as of the
date of such death.
‘‘(B) SPECIAL RULES IF SPOUSE NOT MED-
ICARE ELIGIBLE.—If, as of the date of such
death, such spouse is not entitled to benefits
under title XVIII of the Social Security Act,
then after the date of such death—
‘‘(i) the Secretary of Health and
Human Services may not make any pay-
ments to such MedicarePlus MSA, other
than payments attributable to periods be-
fore such date,
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‘‘(ii) in applying subsection (b)(2)
with respect to such MedicarePlus MSA,
references to the account holder shall be
treated as including references to any de-
pendent (as defined in section 152) of such
spouse and any subsequent spouse of such
spouse, and
‘‘(iii) in lieu of applying subsection
(d)(2), the rules of section 220(f)(2) shall
apply.
‘‘(2) TREATMENT IF DESIGNATED BENEFICIARY
IS NOT SPOUSE.—In the case of an account holder’s
interest in a MedicarePlus MSA which is payable to
(or for the benefit of) any person other than such
holder’s spouse upon the death of such holder—
‘‘(A) such account shall cease to be a
MedicarePlus MSA as of the date of death, and
‘‘(B) an amount equal to the fair market
value of the assets in such account on such date
shall be includible—
‘‘(i) if such person is not the estate of
such holder, in such person’s gross income
for the taxable year which includes such
date, or
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‘‘(ii) if such person is the estate of
such holder, in such holder’s gross income
for last taxable year of such holder.
‘‘(f) REPORTS.—
‘‘(1) 
IN
GENERAL.—The 
trustee 
of 
a
MedicarePlus MSA shall make such reports regard-
ing such account to the Secretary and to the account
holder with respect to—
‘‘(A) the fair market value of the assets in
such MedicarePlus MSA as of the close of each
calendar year, and
‘‘(B) contributions, distributions, and other
matters,
as the Secretary may require by regulations.
‘‘(2) TIME AND MANNER OF REPORTS.—The re-
ports required by this subsection—
‘‘(A) shall be filed at such time and in
such manner as the Secretary prescribes in
such regulations, and
‘‘(B) shall be furnished to the account
holder—
‘‘(i) not later than January 31 of the
calendar year following the calendar year
to which such reports relate, and
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‘‘(ii) in such manner as the Secretary
prescribes in such regulations.’’
(b) EXCLUSION OF MEDICAREPLUS MSA’S FROM
ESTATE TAX.—Part IV of subchapter A of chapter 11 of
such Code is amended by adding at the end the following
new section:
‘‘SEC. 2057. MEDICAREPLUS MSA’S.
‘‘For purposes of the tax imposed by section 2001,
the value of the taxable estate shall be determined by de-
ducting from the value of the gross estate an amount
equal to the value of any MedicarePlus MSA (as defined
in section 137(b)) included in the gross estate.’’
(c) TAX ON PROHIBITED TRANSACTIONS.—
(1) Section 4975 of such Code (relating to tax
on prohibited transactions) is amended by adding at
the end of subsection (c) the following new para-
graph:
‘‘(4) 
SPECIAL
RULE
FOR
MEDICAREPLUS
MSA’S.—An 
individual 
for 
whose 
benefit 
a
MedicarePlus MSA (within the meaning of section
137(b)) is established shall be exempt from the tax
imposed by this section with respect to any trans-
action concerning such account (which would other-
wise be taxable under this section) if, with respect
to such transaction, the account ceases to be a
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MedicarePlus MSA by reason of the application of
section 137(c)(2) to such account.’’
(2) Paragraph (1) of section 4975(e) of such
Code is amended to read as follows:
‘‘(1) PLAN.—For purposes of this section, the
term ‘plan’ means—
‘‘(A) a trust described in section 401(a)
which forms a part of a plan, or a plan de-
scribed in section 403(a), which trust or plan is
exempt from tax under section 501(a),
‘‘(B) an individual retirement account de-
scribed in section 408(a),
‘‘(C) an individual retirement annuity de-
scribed in section 408(b),
‘‘(D) a medical savings account described
in section 220(d),
‘‘(E) a MedicarePlus MSA described in
section 137(b), or
‘‘(F) a trust, plan, account, or annuity
which, at any time, has been determined by the
Secretary to be described in any preceding sub-
paragraph of this paragraph.’’
(d) 
FAILURE
TO
PROVIDE
REPORTS
ON
MEDICAREPLUS MSA’S.—
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(1) Subsection (a) of section 6693 of such Code
(relating to failure to provide reports on individual
retirement accounts or annuities) is amended to read
as follows:
‘‘(a) REPORTS.—
‘‘(1) IN GENERAL.—If a person required to file
a report under a provision referred to in paragraph
(2) fails to file such report at the time and in the
manner required by such provision, such person
shall pay a penalty of $50 for each failure unless it
is shown that such failure is due to reasonable
cause.
‘‘(2) PROVISIONS.—The provisions referred to
in this paragraph are—
‘‘(A) subsections (i) and (l) of section 408
(relating to individual retirement plans),
‘‘(B) section 220(h) (relating to medical
savings accounts), and
‘‘(C) 
section 
137(f) 
(relating 
to
MedicarePlus MSA’s).’’
(2) The section heading for section 6693 of
such Code is amended to read as follows:
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‘‘SEC. 6693. FAILURE TO FILE REPORTS ON INDIVIDUAL RE-
TIREMENT PLANS AND CERTAIN OTHER TAX-
FAVORED ACCOUNTS; PENALTIES RELATING
TO 
DESIGNATED 
NONDEDUCTIBLE 
CON-
TRIBUTIONS.’’
(e) CLERICAL AMENDMENTS.—
(1) The table of sections for part III of sub-
chapter B of chapter 1 of such Code is amended by
striking the last item and inserting the following:
‘‘Sec. 137. MedicarePlus MSA’s.
‘‘Sec. 138. Cross references to other Acts.’’
(2) The table of sections for part 1 of sub-
chapter B of chapter 68 of such Code is amended
by striking the item relating to section 6693 and in-
serting the following new item:
‘‘Sec. 6693. Failure to file reports on individual retirement plans
and certain other tax-favored accounts; penalties re-
lating to designated nondeductible contributions.’’
(3) The table of sections for part IV of sub-
chapter A of chapter 11 of such Code is amended by
adding at the end the following new item:
‘‘Sec. 2057. MedicarePlus MSA’s.’’
(f) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1996.
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SEC. 15012. CERTAIN REBATES EXCLUDED FROM GROSS
INCOME.
(a) IN GENERAL.—Section 105 of the Internal Reve-
nue Code of 1986 (relating to amounts received under ac-
cident and health plans) is amended by adding at the end
the following new subsection:
‘‘(j) CERTAIN REBATES UNDER SOCIAL SECURITY
ACT.—Gross income does not include any rebate received
under section 1852(e)(1)(A) of the Social Security Act
during the taxable year.’’
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to amounts received after the
date of the enactment of this Act.
PART 3—SPECIAL ANTITRUST RULE FOR
PROVIDER SERVICE NETWORKS
SEC. 15021. APPLICATION OF ANTITRUST RULE OF REASON
TO PROVIDER SERVICE NETWORKS.
(a) RULE OF REASON STANDARD.—In any action
under the antitrust laws, or under any State law similar
to the antitrust laws—
(1) the conduct of a provider service network in
negotiating, making, or performing a contract (in-
cluding the establishment and modification of a fee
schedule and the development of a panel of physi-
cians), to the extent such contract is for the purpose
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of providing health care services to individuals under
the terms of a MedicarePlus PSO product, and
(2) the conduct of any member of such network
for the purpose of providing such health care serv-
ices under such contract to such extent,
shall not be deemed illegal per se. Such conduct shall be
judged on the basis of its reasonableness, taking into ac-
count all relevant factors affecting competition, including
the effects on competition in properly defined markets.
(b) DEFINITIONS.—For purposes of subsection (a):
(1) ANTITRUST
LAWS.—The term ‘‘antitrust
laws’’ has the meaning given it in subsection (a) of
the first section of the Clayton Act (15 U.S.C. 12),
except that such term includes section 5 of the Fed-
eral Trade Commission Act (15 U.S.C. 45) to the
extent that such section 5 applies to unfair methods
of competition.
(2) HEALTH
CARE
PROVIDER.—The term
‘‘health care provider’’ means any individual or en-
tity that is engaged in the delivery of health care
services in a State and that is required by State law
or regulation to be licensed or certified by the State
to engage in the delivery of such services in the
State.
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(3) HEALTH CARE SERVICE.—The term ‘‘health
care service’’ means any service for which payment
may be made under a MedicarePlus PSO product in-
cluding services related to the delivery or adminis-
tration of such service.
(4) 
MEDICAREPLUS
PROGRAM.—The 
term
‘‘MedicarePlus program’’ means the program under
part C of title XVIII of the Social Security Act.
(5) MEDICAREPLUS PSO PRODUCT.—The term
‘‘MedicarePlus PSO product’’ means a MedicarePlus
product offered by a provider-sponsored organization
under part C of title XVIII of the Social Security
Act.
(6) PROVIDER SERVICE NETWORK.—The term
‘‘provider service network’’ means an organization
that—
(A) is organized by, operated by, and com-
posed of members who are health care providers
and for purposes that include providing health
care services,
(B) is funded in part by capital contribu-
tions made by the members of such organiza-
tion,
(C) with respect to each contract made by
such organization for the purpose of providing
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a type of health care service to individuals
under the terms of a MedicarePlus PSO prod-
uct—
(i) requires all members of such orga-
nization who engage in providing such type
of health care service to agree to provide
health care services of such type under
such contract,
(ii) receives the compensation paid for
the health care services of such type pro-
vided under such contract by such mem-
bers, and
(iii) provides for the distribution of
such compensation,
(D) has established, consistent with the re-
quirements of the MedicarePlus program for
provider-sponsored organizations, a program to
review, pursuant to written guidelines, the qual-
ity, efficiency, and appropriateness of treatment
methods and setting of services for all health
care providers and all patients participating in
such product, along with internal procedures to
correct identified deficiencies relating to such
methods and such services,
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(E) has established, consistent with the re-
quirements of the MedicarePlus program for
provider-sponsored organizations, a program to
monitor and control utilization of health care
services provided under such product, for the
purpose of improving efficient, appropriate care
and eliminating the provision of unnecessary
health care services,
(F) has established a management pro-
gram to coordinate the delivery of health care
services for all health care providers and all pa-
tients participating in such product, for the
purpose of achieving efficiencies and enhancing
the quality of health care services provided, and
(G) has established, consistent with the re-
quirements of the MedicarePlus program for
provider-sponsored organizations, a grievance
and appeal process for such organization de-
signed to review and promptly resolve bene-
ficiary or patient grievances and complaints.
Such term may include a provider-sponsored organi-
zation.
(7) PROVIDER-SPONSORED
ORGANIZATION.—
The term ‘‘provider-sponsored organization’’ means
a MedicarePlus organization under the MedicarePlus
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program that is a provider-sponsored organization
(as defined in section ll of the Social Security
Act).
(8) STATE.—The term ‘‘State’’ has the mean-
ing given it in section 4G(2) of the Clayton Act (15
U.S.C. 15g(2)).
(c) ISSUANCE OF GUIDELINES.—Not later than 120
days after the date of the enactment of this Act, the Attor-
ney General and the Federal Trade Commission shall
issue jointly guidelines specifying the enforcement policies
and analytical principles that will be applied by the De-
partment of Justice and the Commission with respect to
the operation of subsection (a).
PART 4—COMMISSIONS
SEC. 15031. MEDICARE PAYMENT REVIEW COMMISSION.
(a) IN GENERAL.—Title XVIII, as amended by sec-
tion 15001(a), is amended by inserting after section 1805
the following new section:
‘‘MEDICARE PAYMENT REVIEW COMMISSION
‘‘SEC. 1806. (a) ESTABLISHMENT.—There is hereby
established the Medicare Payment Review Commission (in
this section referred to as the ‘Commission’).
‘‘(b) DUTIES.—
‘‘(1) GENERAL DUTIES AND REPORTS.—
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‘‘(A) IN GENERAL.—The Commission shall
review, and make recommendations to Congress
concerning, payment policies under this title.
‘‘(B) ANNUAL
REPORTS.—By not later
than June 1 of each year, the Commission shall
submit a report to Congress containing an ex-
amination of issues affecting the medicare pro-
gram, including the implications of changes in
health care delivery in the United States and in
the market for health care services on the medi-
care program.
‘‘(C) ADDITIONAL
REPORTS.—The Com-
mission may submit to Congress from time to
time such other reports as the Commission
deems appropriate. By not later than May 1,
1997, the Commission shall submit to Congress
a report on the matter described in paragraph
(2)(G).
‘‘(D) SECRETARIAL
RESPONSE
IN
RULE-
MAKING.—The Secretary shall respond to rec-
ommendations of the Commission in notices of
rulemaking proceedings under this title.
‘‘(2) 
SPECIFIC
DUTIES
RELATING
TO
MEDICAREPLUS
PROGRAM.—Specifically, the Com-
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mission 
shall 
review, 
with 
respect 
to 
the
MedicarePlus program under part C—
‘‘(A) the appropriateness of the methodol-
ogy for making payment to plans under such
program, including the making of differential
payments and the distribution of differential
updates among different payment areas);
‘‘(B) the appropriateness of the mecha-
nisms used to adjust payments for risk and the
need to adjust such mechanisms to take into ac-
count health status of beneficiaries;
‘‘(C) the implications of risk selection both
among MedicarePlus organizations and between
the 
MedicarePlus 
option 
and 
the 
non-
MedicarePlus option;
‘‘(D) in relation to payment under part C,
the development and implementation of mecha-
nisms to assure the quality of care for those en-
rolled with MedicarePlus organizations;
‘‘(E) the impact of the MedicarePlus pro-
gram on access to care for medicare bene-
ficiaries;
‘‘(F) the feasibility and desirability of ex-
tending the rules for open enrollment that apply
during the transition period to apply in each
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county during the first 2 years in which
MedicarePlus products are made available to in-
dividuals residing in the county; and
‘‘(G) other major issues in implementation
and further development of the MedicarePlus
program.
‘‘(3) SPECIFIC
DUTIES
RELATING
TO
THE
FAILSAFE
BUDGET
MECHANISM.—Specifically, the
Commission shall review, with respect to the failsafe
budget mechanism described in section 1895—
‘‘(A) the appropriateness of the expendi-
ture projections by the Secretary under section
1895(c) for each medicare sector;
‘‘(B) the appropriateness of the growth
factors for each sector and the ability to take
into account substitution across sectors;
‘‘(C) the appropriateness of the mecha-
nisms for implementing reductions in payment
amounts for different sectors, including any ad-
justments to reflect changes in volume or inten-
sity resulting for any payment reductions;
‘‘(D) the impact of the mechanism on pro-
vider participation in parts A and B and in the
MedicarePlus program; and
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‘‘(E) the appropriateness of the medicare
benefit budget (under section 1895(c)(2)(C) of
the Social Security Act), particularly for fiscal
years after fiscal year 2002.
‘‘(4) SPECIFIC DUTIES RELATING TO THE FEE-
FOR-SERVICE SYSTEM.—Specifically, the Commission
shall review payment policies under parts A and B,
including—
‘‘(A) the factors affecting expenditures for
services in different sectors, including the proc-
ess for updating hospital, physician, and other
fees,
‘‘(B) payment methodologies; and
‘‘(C) the impact of payment policies on ac-
cess and quality of care for medicare bene-
ficiaries.
‘‘(5) SPECIFIC
DUTIES
RELATING
TO
INTER-
ACTION OF PAYMENT POLICIES WITH HEALTH CARE
DELIVERY
GENERALLY.—Specifically the Commis-
sion shall review the effect of payment policies under
this title on the delivery of health care services
under this title and assess the implications of
changes in the health services market on the medi-
care program.
‘‘(c) MEMBERSHIP.—
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‘‘(1) NUMBER AND APPOINTMENT.—The Com-
mission shall be composed of 15 members appointed
by the Comptroller General.
‘‘(2) QUALIFICATIONS.—The membership of the
Commission shall include individuals with national
recognition for their expertise in health finance and
economics, actuarial science, health facility manage-
ment, health plans and integrated delivery systems,
reimbursement of health facilities, allopathic and os-
teopathic physicians, and other providers of services,
and other related fields, who provide a mix of dif-
ferent professionals, broad geographic representa-
tion, and a balance between urban and rural rep-
resentatives, including physicians and other health
professionals, employers, third party payors, individ-
uals skilled in the conduct and interpretation of bio-
medical, health services, and health economics re-
search and expertise in outcomes and effectiveness
research and technology assessment. Such member-
ship shall also include representatives of consumers
and the elderly.
‘‘(3) CONSIDERATIONS
IN
INITIAL
APPOINT-
MENT.—To the extent possible, in first appointing
members to the Commission the Comptroller Gen-
eral shall consider appointing individuals who (as of
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the date of the enactment of this section) were serv-
ing on the Prospective Payment Assessment Com-
mission or the Physician Payment Review Commis-
sion.
‘‘(4) TERMS.—
‘‘(A) IN GENERAL.—The terms of mem-
bers of the Commission shall be for 3 years ex-
cept that the Comptroller General shall des-
ignate staggered terms for the members first
appointed.
‘‘(B) VACANCIES.—Any member appointed
to fill a vacancy occurring before the expiration
of the term for which the member’s predecessor
was appointed shall be appointed only for the
remainder of that term. A member may serve
after the expiration of that member’s term until
a successor has taken office. A vacancy in the
Commission shall be filled in the manner in
which the original appointment was made.
‘‘(5) COMPENSATION.—While serving on the
business of the Commission (including traveltime), a
member of the Commission shall be entitled to com-
pensation at the per diem equivalent of the rate pro-
vided for level IV of the Executive Schedule under
section 5315 of title 5, United States Code; and
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while so serving away from home and member’s reg-
ular place of business, a member may be allowed
travel expenses, as authorized by the Chairman of
the Commission. Physicians serving as personnel of
the Commission may be provided a physician com-
parability allowance by the Commission in the same
manner as Government physicians may be provided
such an allowance by an agency under section 5948
of title 5, United States Code, and for such purpose
subsection (i) of such section shall apply to the Com-
mission in the same manner as it applies to the Ten-
nessee Valley Authority. For purposes of pay (other
than pay of members of the Commission) and em-
ployment benefits, rights, and privileges, all person-
nel of the Commission shall be treated as if they
were employees of the United States Senate.
‘‘(6) CHAIRMAN; VICE CHAIRMAN.—The Comp-
troller General shall designate a member of the
Commission, at the time of appointment of the mem-
ber, as Chairman and a member as Vice Chairman
for that term of appointment.
‘‘(7) MEETINGS.—The Commission shall meet
at the call of the Chairman.
‘‘(d) DIRECTOR AND STAFF; EXPERTS AND CON-
SULTANTS.—Subject to such review as the Comptroller
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General deems necessary to assure the efficient adminis-
tration of the Commission, the Commission may—
‘‘(1) employ and fix the compensation of an Ex-
ecutive Director (subject to the approval of the
Comptroller General) and such other personnel as
may be necessary to carry out its duties (without re-
gard to the provisions of title 5, United States Code,
governing appointments in the competitive service);
‘‘(2) seek such assistance and support as may
be required in the performance of its duties from ap-
propriate Federal departments and agencies;
‘‘(3) enter into contracts or make other ar-
rangements, as may be necessary for the conduct of
the work of the Commission (without regard to sec-
tion 3709 of the Revised Statutes (41 U.S.C. 5));
‘‘(4) make advance, progress, and other pay-
ments which relate to the work of the Commission;
‘‘(5) provide transportation and subsistence for
persons serving without compensation; and
‘‘(6) prescribe such rules and regulations as it
deems necessary with respect to the internal organi-
zation and operation of the Commission.
‘‘(e) POWERS.—
‘‘(1) OBTAINING
OFFICIAL
DATA.—The Com-
mission may secure directly from any department or
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agency of the United States information necessary
to enable it to carry out this section. Upon request
of the Chairman, the head of that department or
agency shall furnish that information to the Com-
mission on an agreed upon schedule.
‘‘(2) DATA COLLECTION.—In order to carry out
its functions, the Commission shall collect and as-
sess information to—
‘‘(A) utilize existing information, both pub-
lished and unpublished, where possible, collected
and assessed either by its own staff or under
other arrangements made in accordance with
this section,
‘‘(B) carry out, or award grants or con-
tracts for, original research and experimen-
tation, where existing information is inad-
equate, and
‘‘(C) adopt procedures allowing any inter-
ested party to submit information for the Com-
mission’s use in making reports and rec-
ommendations.
‘‘(3) ACCESS OF GAO TO INFORMATION.—The
Comptroller General shall have unrestricted access
to all deliberations, records, and data of the Com-
mission, immediately upon request.
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‘‘(4) PERIODIC AUDIT.—The Commission shall
be subject to periodic audit by the General Account-
ing Office.
‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—
‘‘(1) REQUEST
FOR
APPROPRIATIONS.—The
Commission shall submit requests for appropriations
in the same manner as the Comptroller General sub-
mits requests for appropriations, but amounts ap-
propriated for the Commission shall be separate
from amounts appropriated for the Comptroller Gen-
eral.
‘‘(2) AUTHORIZATION.—There are authorized to
be appropriated such sums as may be necessary to
carry out the provisions of this section. 60 percent
of such appropriation shall be payable from the Fed-
eral Hospital Insurance Trust Fund, and 40 percent
of such appropriation shall be payable from the Fed-
eral 
Supplementary 
Medical 
Insurance 
Trust
Fund.’’.
(b) ABOLITION OF PROPAC AND PPRC.—
(1) PROPAC.—
(A) IN
GENERAL.—Section 1886(e) (42
U.S.C. 1395ww(e)) is amended—
(i) by striking paragraphs (2) and (6);
and
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(ii) in paragraph (3), by striking ‘‘(A)
The Commission’’ and all that follows
through ‘‘(B)’’.
(B) CONFORMING
AMENDMENT.—Section
1862 (42 U.S.C. 1395y) is amended by striking
‘‘Prospective Payment Assessment Commis-
sion’’ each place it appears in subsection
(a)(1)(D) and subsection (i) and inserting
‘‘Medicare Payment Review Commission’’.
(2) PPRC.—
(A) IN GENERAL.—Title XVIII is amended
by striking section 1845 (42 U.S.C. 1395w–1).
(B) CONFORMING AMENDMENTS.—
(i) Section 1834(b)(2) (42 U.S.C.
1395m(b)(2)) is amended by striking
‘‘Physician Payment Review Commission’’
and inserting ‘‘Medicare Payment Review
Commission’’.
(ii) 
Section 
1842(b) 
(42 
U.S.C.
1395u(b)) is amended by striking ‘‘Physi-
cian Payment Review Commission’’ each
place it appears in paragraphs (9)(D) and
(14)(C)(i) and inserting ‘‘Medicare Pay-
ment Review Commission’’.
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(iii) Section 1848 (42 U.S.C. 1395w–
4) is amended by striking ‘‘Physician Pay-
ment Review Commission’’ and inserting
‘‘Medicare Payment Review Commission’’
each 
place 
it 
appears 
in 
paragraph
(2)(A)(ii), (2)(B)(iii), and (5) of subsection
(c), 
subsection 
(d)(2)(F), 
paragraphs
(1)(B), (3), and (4)(A) of subsection (f),
and paragraphs (6)(C) and (7)(C) of sub-
section (g).
(c) EFFECTIVE DATE; TRANSITION.—
(1) IN
GENERAL.—The Comptroller General
shall first provide for appointment of members to
the Medicare Payment Review Commission (in this
subsection referred to as ‘‘MPRC’’) by not later
than March 31, 1996.
(2) TRANSITION.—Effective on a date (not later
than 30 days after the date a majority of members
of the MPRC have first been appointed, the Pro-
spective Payment Assessment Commission (in this
subsection referred to as ‘‘ProPAC’’) and the Physi-
cian Payment Review Commission (in this subsection
referred to as ‘‘PPRC’’), and amendments made by
subsection (b), are terminated. The Comptroller
General, to the maximum extent feasible, shall pro-
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vide for the transfer to the MPRC of assets and
staff of ProPAC and PPRC, without any loss of
benefits or seniority by virtue of such transfers.
Fund balances available to the ProPAC or PPRC
for any period shall be available to the MPRC for
such period for like purposes.
(3) CONTINUING
RESPONSIBILITY
FOR
RE-
PORTS.—The MPRC shall be responsible for the
preparation and submission of reports required by
law to be submitted (and which have not been sub-
mitted by the date of establishment of the MPRC)
by the ProPAC and PPRC, and, for this purpose,
any reference in law to either such Commission is
deemed, after the appointment of the MPRC, to
refer to the MPRC.
SEC. 15032. COMMISSION ON THE EFFECT OF THE BABY
BOOM GENERATION ON THE MEDICARE PRO-
GRAM.
(a) ESTABLISHMENT.—There is established a com-
mission to be known as the Commission on the Effect of
the Baby Boom Generation on the Medicare Program (in
this section referred to as the ‘‘Commission’’).
(b) DUTIES.—
(1) IN GENERAL.—The Commission shall—
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(A) examine the financial impact on the
medicare program of the significant increase in
the number of medicare eligible individuals
which will occur beginning approximately dur-
ing 2010 and lasting for approximately 25
years, and
(B) make specific recommendations to the
Congress respecting a comprehensive approach
to preserve the medicare program for the period
during which such individuals are eligible for
medicare.
(2) 
CONSIDERATIONS
IN
MAKING
REC-
OMMENDATIONS.—In making its recommendations,
the Commission shall consider the following:
(A) The amount and sources of Federal
funds to finance the medicare program, includ-
ing the potential use of innovative financing
methods.
(B) The most efficient and effective man-
ner of administering the program, including the
appropriateness of continuing the application of
the failsafe budget mechanism under section
1895 of the Social Security Act for fiscal years
after fiscal year 2002 and the appropriate long-
term growth rates for contributions electing
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coverage under MedicarePlus under part C of
title XVIII of such Act.
(C) Methods used by other nations to re-
spond to comparable demographic patterns in
eligibility for health care benefits for elderly
and disabled individuals.
(D) Modifying age-based eligibility to cor-
respond to changes in age-based eligibility
under the OASDI program.
(E) Trends in employment-related health
care for retirees, including the use of medical
savings accounts and similar financing devices.
(c) MEMBERSHIP.—
(1) APPOINTMENT.—The Commission shall be
composed of 15 members appointed as follows:
(A) The President shall appoint 3 mem-
bers.
(B) The Majority Leader of the Senate
shall appoint, after consultation with the minor-
ity leader of the Senate, 6 members, of whom
not more than 4 may be of the same political
party.
(C) The Speaker of the House of Rep-
resentatives shall appoint, after consultation
with the minority leader of the House of Rep-
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resentatives, 6 members, of whom not more
than 4 may be of the same political party.
(2) CHAIRMAN
AND
VICE
CHAIRMAN.—The
Commission shall elect a Chairman and Vice Chair-
man from among its members.
(3) VACANCIES.—Any vacancy in the member-
ship of the Commission shall be filled in the manner
in which the original appointment was made and
shall not affect the power of the remaining members
to execute the duties of the Commission.
(4) QUORUM.—A quorum shall consist of 8
members of the Commission, except that 4 members
may conduct a hearing under subsection (e).
(5) MEETINGS.—The Commission shall meet at
the call of its Chairman or a majority of its mem-
bers.
(6) COMPENSATION AND REIMBURSEMENT OF
EXPENSES.—Members of the Commission are not
entitled to receive compensation for service on the
Commission. Members may be reimbursed for travel,
subsistence, and other necessary expenses incurred
in carrying out the duties of the Commission.
(d) STAFF AND CONSULTANTS.—
(1) STAFF.—The Commission may appoint and
determine the compensation of such staff as may be
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necessary to carry out the duties of the Commission.
Such appointments and compensation may be made
without regard to the provisions of title 5, United
States Code, that govern appointments in the com-
petitive services, and the provisions of chapter 51
and subchapter III of chapter 53 of such title that
relate to classifications and the General Schedule
pay rates.
(2) CONSULTANTS.—The Commission may pro-
cure such temporary and intermittent services of
consultants under section 3109(b) of title 5, United
States Code, as the Commission determines to be
necessary to carry out the duties of the Commission.
(e) POWERS.—
(1) HEARINGS
AND
OTHER
ACTIVITIES.—For
the purpose of carrying out its duties, the Commis-
sion may hold such hearings and undertake such
other activities as the Commission determines to be
necessary to carry out its duties.
(2) STUDIES BY GAO.—Upon the request of the
Commission, the Comptroller General shall conduct
such studies or investigations as the Commission de-
termines to be necessary to carry out its duties.
(3) COST
ESTIMATES
BY
CONGRESSIONAL
BUDGET OFFICE.—