123
(B) by striking ‘‘eligibility purposes’’ and
inserting ‘‘eligibility and other administrative
purposes under such program’’.
(4) EFFECTIVE DATE.—The amendments made
by this subsection shall take effect as if included in
the enactment of section 203(a) of the Personal Re-
sponsibility and Work Opportunity Reconciliation
Act of 1996 (Public Law 104–193; 110 Stat. 2186).
The reference to section 202(x)(1)(A)(ii) in section
1611(e)(1)(I)(i) of the Social Security Act as amend-
ed by paragraph (2) shall be deemed a reference to
such section 202(x)(1)(A)(ii) of such Act as amended
by subsection (b)(1)(C).
(d) CONTINUED DENIAL OF BENEFITS TO SEX OF-
FENDERS REMAINING CONFINED TO PUBLIC INSTITUTIONS
UPON COMPLETION OF PRISON TERM.—
(1) IN GENERAL.—Section 202(x)(1)(A) of the
Social Security Act (42 U.S.C. 402(x)(1)(A)) is
amended—
(A) in clause (i), by striking ‘‘or’’ at the
end;
(B) in clause (ii)(IV), by striking the period
and inserting ‘‘, or’’; and
(C) by adding at the end the following new
clause:
124
‘‘(iii) immediately upon completion of confine-
ment as described in clause (i) pursuant to conviction
of a criminal offense an element of which is sexual ac-
tivity, is confined by court order in an institution at
public expense pursuant to a finding that the indi-
vidual is a sexually dangerous person or a sexual
predator or a similar finding.’’.
(2) 
CONFORMING
AMENDMENT.—Section
202(x)(1)(B)(ii) 
of 
such 
Act 
(42 
U.S.C.
402(x)(1)(B)(ii)) is amended by striking ‘‘clause (ii)’’
and inserting ‘‘clauses (ii) and (iii)’’.
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall apply with respect to benefits
for months ending after the date of the enactment of
this Act.
SEC. 403. REVOCATION BY MEMBERS OF THE CLERGY OF
EXEMPTION FROM SOCIAL SECURITY COV-
ERAGE.
(a) IN GENERAL.—Notwithstanding section 1402(e)(4)
of the Internal Revenue Code of 1986, any exemption which
has been received under section 1402(e)(1) of such Code by
a duly ordained, commissioned, or licensed minister of a
church, a member of a religious order, or a Christian
Science practitioner, and which is effective for the taxable
year in which this Act is enacted, may be revoked by filing
125
an application therefor (in such form and manner, and
with such official, as may be prescribed by the Commis-
sioner of Internal Revenue), if such application is filed no
later than the due date of the Federal income tax return
(including any extension thereof) for the applicant’s second
taxable year beginning after December 31, 1999. Any such
revocation shall be effective (for purposes of chapter 2 of
the Internal Revenue Code of 1986 and title II of the Social
Security Act), as specified in the application, either with
respect to the applicant’s first taxable year beginning after
December 31, 1999, or with respect to the applicant’s second
taxable year beginning after such date, and for all suc-
ceeding taxable years; and the applicant for any such rev-
ocation may not thereafter again file application for an ex-
emption under such section 1402(e)(1). If the application
is filed after the due date of the applicant’s Federal income
tax return for a taxable year and is effective with respect
to that taxable year, it shall include or be accompanied by
payment in full of an amount equal to the total of the taxes
that would have been imposed by section 1401 of the Inter-
nal Revenue Code of 1986 with respect to all of the appli-
cant’s income derived in that taxable year which would
have constituted net earnings from self-employment for pur-
poses of chapter 2 of such Code (notwithstanding para-
126
graphs (4) and (5) of section 1402(c)) except for the exemp-
tion under section 1402(e)(1) of such Code.
(b) EFFECTIVE DATE.—Subsection (a) shall apply
with respect to service performed (to the extent specified in
such subsection) in taxable years beginning after December
31, 1999, and with respect to monthly insurance benefits
payable under title II on the basis of the wages and self-
employment income of any individual for months in or
after the calendar year in which such individual’s applica-
tion for revocation (as described in such subsection) is effec-
tive (and lump-sum death payments payable under such
title on the basis of such wages and self-employment income
in the case of deaths occurring in or after such calendar
year).
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 Se-
curity Act (42 U.S.C. 1310(a)(3)) is amended by striking
‘‘title XVI’’ and inserting ‘‘title II or XVI’’.
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall take effect as if included in the enactment
of the Social Security Independence and Program Improve-
ments Act of 1994 (Public Law 103–296; 108 Stat. 1464).
127
SEC. 405. AUTHORIZATION FOR STATE TO PERMIT ANNUAL
WAGE REPORTS.
(a) IN GENERAL.—Section 1137(a)(3) of the Social Se-
curity Act (42 U.S.C. 1320b–7(a)(3)) is amended by insert-
ing 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 employment on a
calendar year basis pursuant to section 3510 of the Internal
Revenue Code of 1986 to make such reports 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—
(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 submitted
on and after the date of enactment of this Act.
128
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 calculated 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
certified by subsection (a)(4)(A) or (b)(1)(A) be-
fore 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
129
‘‘(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 col-
lect 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, request
or otherwise obtain reimbursement for such assess-
ment from the claimant whose claim gave rise to the
assessment.
‘‘(5) DISPOSITION
OF
ASSESSMENTS.—Assess-
ments on attorneys collected under this subsection
shall be credited to the Federal Old-Age and Survivors
Insurance Trust Fund and the Federal Disability In-
surance Trust Fund, as appropriate.
‘‘(6) AUTHORIZATION OF APPROPRIATIONS.—The
assessments authorized under this section shall be col-
130
lected and available for obligation only to the extent
and in the amount provided in advance in appro-
priations Acts. Amounts so appropriated are author-
ized to remain available until expended, for adminis-
trative 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 sub-
section (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 ‘‘section
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 certified for pay-
ment from a claimant’s past-due benefits pursuant to sub-
section (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.
131
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 So-
cial 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 inves-
tigation, any aspect of the provision of health care
services and activities of providers of such services
under any Federal health care program (as defined in
section 1128B(f)(1)), if (i) the suspected fraud or vio-
lation of law in such case or investigation is pri-
marily related to the State plan under this title, and
(ii) when such approval is granted, the Inspector
General of the relevant Federal agency retains the
continuing authority to join the case or investigation,
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—
132
(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 (in-
cluding the State plan under this title) that was sub-
ject to the activity that was the basis for the collec-
tion.’’.
(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 facili-
ties which receive payments under the State plan
under this title;
‘‘(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
133
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, dress-
ing, bathing, eating, toileting, ambulation,
transfer, positioning, self-medication, body care,
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.
134
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-
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 adminis-
trative expenses and includes payment rates
135
and the methodologies underlying the estab-
lishment 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 reimburses
only for the cost of an item or service provided
and an administrative expense incurred that is
reasonable and related to the cost of providing or
incurring such item, service, or administrative
expense or that is based on such other tests of
reasonableness as the Secretary prescribes in reg-
ulations; or
‘‘(21) with respect to any transportation service
provided by, or on behalf of, a local educational agen-
cy or school district for a child unless—
136
‘‘(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 trans-
portation service is specially equipped to accom-
modate 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
‘‘(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
137
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 adminis-
trative expense to carry out the plan provided by a
public agency that enters into a contract with an en-
tity for the development and operation of submitting
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 per-
formed 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 iden-
tified 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)’’.
(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
138
of 1997) as clause (xiii), by striking ‘‘and’’ at the end of
clause (xi), and by inserting after clause (xi) the following:
‘‘(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 cov-
erage of services required under the child’s indi-
vidual 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 contract,
that there are assurances in the State plan and in the
managed care contract that coordination exists be-
tween the local educational agency or school district
and the managed care plan to prevent duplication 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:
139
‘‘(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 Fi-
nancing Administration, in consultation with State med-
icaid and educational agencies and local school systems,
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 adminis-
trative expenses shall be based on standards related to time
studies and population estimates and a national standard
for determining payment for such administrative expenses.
140
(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 Sec-
retary 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 enact-
ment.