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SEC. 404. ADDITIONAL TECHNICAL AMENDMENT RELATING
TO 
COOPERATIVE 
RESEARCH 
OR 
DEM-
ONSTRATION PROJECTS UNDER TITLES II
AND XVI.
(a) IN GENERAL.—Section 1110(a)(3) of the Social
Security Act (42 U.S.C. 1310(a)(3)) is amended by strik-
ing ‘‘title XVI’’ and inserting ‘‘title II or XVI’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect as if included in the enact-
ment of the Social Security Independence and Program
Improvements Act of 1994 (Public Law 103–296; 108
Stat. 1464).
SEC. 405. AUTHORIZATION FOR STATE TO PERMIT ANNUAL
WAGE REPORTS.
(a) IN GENERAL.—Section 1137(a)(3) of the Social
Security Act (42 U.S.C. 1320b–7(a)(3)) is amended by
inserting before the semicolon the following: ‘‘, and except
that in the case of wage reports with respect to domestic
service employment, a State may permit employers (as so
defined) that make returns with respect to such employ-
ment on a calendar year basis pursuant to section 3510
of the Internal Revenue Code of 1986 to make such re-
ports on an annual basis’’.
(b) TECHNICAL AMENDMENTS.—Section 1137(a)(3)
of the Social Security Act (42 U.S.C. 1320b–7(a)(3)) is
amended—
130
(1) by striking ‘‘(as defined in section
453A(a)(2)(B)(iii))’’; and
(2) by inserting ‘‘(as defined in section
453A(a)(2)(B))’’ after ‘‘employers’’ .
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to wage reports required to be sub-
mitted on and after the date of enactment of this Act.
SEC. 406. ASSESSMENT ON ATTORNEYS WHO RECEIVE
THEIR FEES VIA THE SOCIAL SECURITY AD-
MINISTRATION.
(a) IN GENERAL.—Section 206 of the Social Security
Act (42 U.S.C. 606) is amended by adding at the end the
following:
‘‘(d) ASSESSMENT ON ATTORNEYS.—
‘‘(1) IN GENERAL.—Whenever a fee for services
is required to be certified for payment to an attorney
from a claimant’s past-due benefits pursuant to sub-
section (a)(4)(A) or (b)(1)(A), the Commissioner
shall impose on the attorney an assessment cal-
culated in accordance with paragraph (2).
‘‘(2) AMOUNT.—
‘‘(A) The amount of an assessment under
paragraph (1) shall be equal to the product ob-
tained by multiplying the amount of the rep-
resentative’s fee that would be required to be so
131
certified by subsection (a)(4)(A) or (b)(1)(A)
before the application of this subsection, by the
percentage specified in subparagraph (B).
‘‘(B) The percentage specified in this sub-
paragraph is—
‘‘(i) for calendar years before 2001,
6.3 percent, and
‘‘(ii) for calendar years after 2000,
6.3 percent or such different percentage
rate as the Commissioner determines is
necessary in order to achieve full recovery
of the costs of certifying fees to attorneys
from the past-due benefits of claimants.
‘‘(3) COLLECTION.—The Commissioner may
collect the assessment imposed on an attorney under
paragraph (1) by offset from the amount of the fee
otherwise required by subsection (a)(4)(A) or
(b)(1)(A) to be certified for payment to the attorney
from a claimant’s past-due benefits.
‘‘(4) PROHIBITION ON CLAIMANT REIMBURSE-
MENT.—An attorney subject to an assessment under
paragraph (1) may not, directly or indirectly, re-
quest or otherwise obtain reimbursement for such
assessment from the claimant whose claim gave rise
to the assessment.
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‘‘(5) DISPOSITION OF ASSESSMENTS.—Assess-
ments on attorneys collected under this subsection
shall be credited to the Federal Old-Age and Sur-
vivors Insurance Trust Fund and the Federal Dis-
ability Insurance Trust Fund, as appropriate.
‘‘(6) AUTHORIZATION
OF
APPROPRIATIONS.—
The assessments authorized under this section shall
be collected and available for obligation only to the
extent and in the amount provided in advance in ap-
propriations Acts. Amounts so appropriated are au-
thorized to remain available until expended, for ad-
ministrative expenses in carrying out title II of the
Social Security Act and related laws.
(b) CONFORMING AMENDMENTS.—
(1) Section 206(a)(4)(A) of such Act (42
U.S.C. 606(a)(4)(A)) is amended by inserting ‘‘and
subsection (d)’’ after ‘‘subparagraph (B)’’.
(2) Section 206(b)(1)(A) of such Act (42
U.S.C. 606(b)(1)(A)) is amended by inserting ‘‘, but
subject to subsection (d) of this section’’ after ‘‘sec-
tion 205(i)’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply in the case of any attorney with
respect to whom a fee for services is required to be cer-
tified for payment from a claimant’s past-due benefits
133
pursuant to subsection (a)(4)(A) or (b)(4)(A) of section
206 of the Social Security Act after—
(1) December 31, 1999, or
(2) the last day of the first month beginning
after the month in which this Act is enacted.
SEC. 407. EXTENSION OF AUTHORITY OF STATE MEDICAID
FRAUD CONTROL UNITS.
(a) EXTENSION OF CONCURRENT AUTHORITY TO IN-
VESTIGATE AND PROSECUTE FRAUD IN OTHER FEDERAL
HEALTH CARE PROGRAMS.—Section 1903(q)(3) of the
Social Security Act (42 U.S.C. 1396b(q)(3)) is amended—
(1) by inserting ‘‘(A)’’ after ‘‘in connection
with’’; and
(2) by striking ‘‘title.’’ and inserting ‘‘title; and
(B) upon the approval of the Inspector General of
the relevant Federal agency in a particular case or
investigation, any aspect of the provision of health
care services and activities of providers of such serv-
ices under any Federal health care program (as de-
fined in section 1128B(f)(1)), if (i) the suspected
fraud or violation of law in such case or investiga-
tion is primarily related to the State plan under this
title, and (ii) when such approval is granted, the In-
spector General of the relevant Federal agency re-
tains the continuing authority to join the case or in-
134
vestigation, or after consultation with the entity, to
replace the entity as the primary agency assigned to
the case or investigation.’’.
(b) RECOUPMENT OF FUNDS.—Section 1903(q)(5) of
such Act (42 U.S.C. 1396b(q)(5)) is amended—
(1) by inserting ‘‘or under any Federal health
care program (as so defined)’’ after ‘‘plan’’; and
(2) by adding at the end the following: ‘‘All
funds collected in accordance with this paragraph
shall be credited exclusively to, and available for ex-
penditure under, the Federal health care program
(including the State plan under this title) that was
subject to the activity that was the basis for the col-
lection.’’.
(c) EXTENSION
OF AUTHORITY TO INVESTIGATE
AND PROSECUTE RESIDENT ABUSE IN NON-MEDICAID
BOARD AND CARE FACILITIES.—Section 1903(q)(4) of
such Act (42 U.S.C. 1396b(q)(4)) is amended to read as
follows:
‘‘(4)(A) The entity has—
‘‘(i) procedures for reviewing complaints of
abuse or neglect of patients in health care fa-
cilities which receive payments under the State
plan under this title;
135
‘‘(ii) at the option of the entity, procedures
for reviewing complaints of abuse or neglect of
patients residing in board and care facilities;
and
‘‘(iii) procedures for acting upon such com-
plaints under the criminal laws of the State or
for referring such complaints to other State
agencies for action.
‘‘(B) For purposes of this paragraph, the term
‘board and care facility’ means a residential setting
which receives payment (regardless of whether such
payment is made under the State plan under this
title) from or on behalf of two or more unrelated
adults who reside in such facility, and for whom one
or both of the following is provided:
‘‘(i) Nursing care services provided by, or
under the supervision of, a registered nurse, li-
censed practical nurse, or licensed nursing as-
sistant.
‘‘(ii) A substantial amount of personal care
services that assist residents with the activities
of daily living, including personal hygiene,
dressing, bathing, eating, toileting, ambulation,
transfer, positioning, self-medication, body care,
136
travel to medical services, essential shopping,
meal preparation, laundry, and housework.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section take effect on the date of enactment of this
Act.
SEC. 408. ELIMINATION OF FRAUD AND ABUSE ASSOCIATED
WITH CERTAIN PAYMENTS UNDER THE MED-
ICAID PROGRAM.
(a) 
REQUIREMENTS
FOR
PAYMENTS.—Section
1903(i) of the Social Security Act (42 U.S.C. 1396b(i))
is amended—
(1) in paragraph (19), by striking the period at
the end and inserting ‘‘; or’’;
(2) by inserting after paragraph (19) the fol-
lowing:
‘‘(20) with respect to any amount expended for
an item or service provided under the plan, or for
any administrative expense incurred to carry out the
plan, which is provided or incurred by, or on behalf
of, a local educational agency or school district—
‘‘(A) for which payment is made for a bun-
dled group of individual items, services, and ad-
ministrative expenses, unless payment for the
grouped items, services, and administrative ex-
137
penses is made in accordance with a system
that is approved by the Secretary and that—
‘‘(i) provides for an itemization to the
Secretary for assuring accountability of
cost of the grouped items, services, and ad-
ministrative expenses and includes pay-
ment rates and the methodologies under-
lying the establishment of such rates;
‘‘(ii) has an actuarially sound basis
for determining the payment rates and the
methodologies; and
‘‘(iii) reconciles payments for the
grouped items and services provided and
administrative expenses incurred under
this title with their cost; or
‘‘(B) for which payment is otherwise made
using a fee-for-service methodology, unless pay-
ment for the item, service, or administrative ex-
pense is made in accordance with a system that
is approved by the Secretary and that reim-
burses only for the cost of an item or service
provided and an administrative expense in-
curred that is reasonable and related to the cost
of providing or incurring such item, service, or
administrative expense or that is based on such
138
other tests of reasonableness as the Secretary
prescribes in regulations; or
‘‘(21) with respect to any transportation service
provided by, or on behalf of, a local educational
agency or school district for a child unless—
‘‘(A) a medical need for transportation is
noted in the individual education plan of the
child, including a child residing in a geographic
area within which school bus transportation is
otherwise not provided;
‘‘(B) the vehicle used to furnish such
transportation service is specially equipped to
accommodate individuals with special medical
needs; and
‘‘(C) the payment for such service—
‘‘(i) is made only with respect to costs
associated with transporting individuals
whose medical needs require transport in
such a vehicle; and
‘‘(ii) reflects only the proportion of
the transportation costs equal to—
‘‘(I) the proportion of time spent
by such individuals at such location in
activities relating to the receipt of cov-
ered services under this title; or
139
‘‘(II) such other proportion based
on an allocation method that the Sec-
retary finds reasonable in light of the
benefit to the program under this title
and consistent with the cost principles
contained in OMB Circular A-87; or
‘‘(22) with respect to any amount expended for
an item or service under the plan or for any admin-
istrative expense to carry out the plan provided by
a public agency that enters into a contract with an
entity for the development and operation of submit-
ting claims for such amount unless the agency—
‘‘(A) uses a competitive bidding process or
otherwise to contract with such entity at a rea-
sonable rate commensurate with the services
performed by such entity; and
‘‘(B) requires that any fees (including any
administrative fees) to be paid to the entity for
the development of the claims procedure are
identified as a non-contingent, specified dollar
amount in the contract.’’; and
(3) in the third sentence, by striking ‘‘(17), and
(18)’’ and inserting ‘‘(17), (18), (19), (20), and
(21)’’.
140
(b) PROVISION OF ITEMS AND SERVICES THROUGH
MEDICAID MANAGED CARE ORGANIZATIONS.—Section
1903(m)(2)(A) of the Social Security Act (42 U.S.C.
1396b(m)(2)(A)) is amended by redesignating clause (xi)
(as added by section 4701(c)(3) of the Balanced Budget
Act of 1997) as clause (xiii), by striking ‘‘and’’ at the end
of clause (xi), and by inserting after clause (xi) the fol-
lowing:
‘‘(xii) such contract provides that with respect
to payment for, and coverage of, such services in any
case in which—
‘‘(I) a medicaid managed care organization
is responsible for providing such services to a
child eligible for benefits under this title but
coverage of services required under the child’s
individual education plan is not included in the
managed care contract but is the responsibility
of the local educational agency or school district
in the State; or
‘‘(II) acute care services are available in
the schools to children enrolled under such con-
tract,
that there are assurances in the State plan and in
the managed care contract that coordination exists
between the local educational agency or school dis-
141
trict and the managed care plan to prevent duplica-
tion of services or duplication of payments under
this title for such services.’’
(c) ALLOWABLE SHARE OF FFP WITH RESPECT TO
PAYMENT FOR SERVICES FURNISHED IN SCHOOL SET-
TING.—Section 1903 of the Social Security Act (42 U.S.C.
1396b) is amended by adding at the end the following:
‘‘(x) In the case of any Federal financial participation
amount determined under subsection (a) with respect to
any expenditure for an item or service under the plan, or
for any administrative expense to carry out the plan,
which is furnished by a local educational agency or school
district, the State shall provide that—
‘‘(1) 100 percent of such amount be paid to
such agency or district, or
‘‘(2) a percentage of such amount be retained
by the State, but only to the extent such percentage
does not exceed the percentage of such expenditure
funded by State general revenue sources dedicated
for such purpose.’’
(d) UNIFORM METHODOLOGY FOR SCHOOL-BASED
CLAIMS.—Not later than 90 days after the date of enact-
ment of this Act, the Administrator of the Health Care
Financing Administration, in consultation with State med-
icaid and educational agencies and local school systems,
142
shall develop and implement a uniform methodology for
claims for payment of medical assistance and related ad-
ministrative expenses furnished under title XIX of the So-
cial Security Act by schools. Such methodology for admin-
istrative expenses shall be based on standards related to
time studies and population estimates and a national
standard for determining payment for such administrative
expenses.
(e) EFFECTIVE DATE.—The amendments made by
this section shall apply to items and services provided on
and after the date of enactment of this Act, without regard
to whether implementing regulations are in effect. The
Secretary of Health and Human Services shall promulgate
such final regulations as are necessary to carry out such
amendments not later than 1 year after such date of en-
actment.
Æ