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‘‘(5) MEDICAL
LOSS
RATIO
DEFINED.—For 
purposes of this part, the term ‘medical loss ratio’ 
means, with respect to an MA plan for a year, the 
ratio of— 
‘‘(A) the aggregate benefits (excluding 
nonmedical expenses described in paragraph 
(3)(A)(ii)) paid under the plan for the year, to 
‘‘(B) the aggregate amount of premiums 
(including basic and supplemental beneficiary 
premiums) and payments made under sections 
1853 and 1860D–15) collected for the plan and 
year. 
Such ratio shall be computed without regard to 
whether the benefits or premiums are for required or 
supplemental benefits under the plan.’’. 
(b) AUDIT OF ADMINISTRATIVE COSTS AND COMPLI-
ANCE WITH THE FEDERAL ACQUISITION REGULATION.— 
(1) IN
GENERAL.—Section 1857(d)(2)(B) of 
such Act (42 U.S.C. 1395w–27(d)(2)(B)) is amend-
ed— 
(A) by striking ‘‘or (ii)’’ and inserting 
‘‘(ii)’’; and 
(B) by inserting before the period at the 
end the following: ‘‘, or (iii) to compliance with 
the requirements of subsection (e)(4) and the 
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extent to which administrative costs comply 
with the applicable requirements for such costs 
under the Federal Acquisition Regulation’’. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply for contract years be-
ginning after the date of the enactment of this Act. 
(c) MINIMUM
MEDICAL
LOSS
RATIO.—Section 
1857(e) of the Social Security Act (42 U.S.C. 1395w– 
27(e)) is amended by adding at the end the following new 
paragraph: 
‘‘(4) REQUIREMENT
FOR
MINIMUM
MEDICAL 
LOSS RATIO.—If the Secretary determines for a con-
tract year (beginning with 2010) that an MA plan 
has failed to have a medical loss ratio (as defined in 
section 1851(j)(4)) of at least .85— 
‘‘(A) for that contract year, the Secretary 
shall reduce the blended benchmark amount 
under subsection (l) for the second succeeding 
contract year by the number of percentage 
points by which such loss ratio was less than 85 
percent; 
‘‘(B) for 3 consecutive contract years, the 
Secretary shall not permit the enrollment of 
new enrollees under the plan for coverage dur-
ing the second succeeding contract year; and 
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‘‘(C) the Secretary shall terminate the plan 
contract if the plan fails to have such a medical 
loss ratio for 5 consecutive contract years.’’. 
(d) INFORMATION ON MEDICARE PART C PLAN EN-
ROLLMENT AND SERVICES.—Section 1851 of such Act, as 
amended by subsection (a), is further amended by adding 
at the end the following new subsection: 
‘‘(k) PUBLICATION OF ENROLLMENT AND OTHER IN-
FORMATION.— 
‘‘(1) MONTHLY
PUBLICATION
OF
PLAN-SPE-
CIFIC
ENROLLMENT
DATA.—The Secretary shall 
publish (on the public website of the Centers for 
Medicare & Medicaid Services or otherwise) not later 
than 30 days after the end of each month (beginning 
with January 2008) on the actual enrollment in each 
Medicare Part C plan by contract and by county. 
‘‘(2) AVAILABILITY OF OTHER INFORMATION.— 
The Secretary shall make publicly available data and 
other information in a format that may be readily 
used for analysis of the Medicare Part C program 
under this part and will contribute to the under-
standing of the organization and operation of such 
program.’’. 
(e) MEDPAC REPORT ON VARYING MINIMUM MED-
ICAL LOSS RATIOS.— 
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(1) STUDY.—The Medicare Payment Advisory 
Commission shall conduct a study of the need and 
feasibility of providing for different minimum med-
ical loss ratios for different types of Medicare Part 
C plans, including coordinated care plans, group 
model plans, coordinated care independent practice 
association plans, preferred provider organization 
plans, and private fee-for-services plans. 
(2) REPORT.—Not later than 1 year after the 
date of the enactment of this Act, submit to Con-
gress a report on the study conducted under para-
graph (1). 
Subtitle C—Quality and Other 
Provisions 
SEC. 421. REQUIRING ALL MA PLANS TO MEET EQUAL 
STANDARDS. 
(a) COLLECTION
AND REPORTING
OF INFORMA-
TION.— 
(1) IN
GENERAL.—Section 1852(e)(1) of the 
Social Security Act (42 U.S.C. 1395w–112(e)(1)) is 
amended by striking ‘‘(other than an MA private 
fee-for-service plan or an MSA plan)’’. 
(2) REPORTING FOR PRIVATE FEE-FOR-SERV-
ICES AND MSA PLANS.—Section 1852(e)(3) of such 
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Act is amended by adding at the end the following 
new subparagraph: 
‘‘(C) DATA
COLLECTION
REQUIREMENTS 
BY PRIVATE FEE-FOR-SERVICE PLANS AND MSA 
PLANS.— 
‘‘(i) USING MEASURES FOR PPOS FOR 
CONTRACT YEAR 2009.—For contract year 
2009, the Medicare Part C organization of-
fering a private fee-for-service plan or an 
MSA plan shall submit to the Secretary for 
such plan the same information on the 
same performance measures for which such 
information is required to be submitted for 
Medicare Part C plans that are preferred 
provider organization plans for that year. 
‘‘(ii) APPLICATION
OF
SAME
MEAS-
URES AS COORDINATED CARE PLANS BE-
GINNING IN CONTRACT YEAR 2010.—For a 
contract year beginning with 2010, a Medi-
care Part C organization offering a private 
fee-for-service plan or an MSA plan shall 
submit to the Secretary for such plan the 
same information on the same performance 
measures for which such information is re-
quired to be submitted for such contract 
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year Medicare Part C plans described in 
section 1851(a)(2)(A)(i) for contract year 
such contract year.’’. 
(3) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply to contract years begin-
ning on or after January 1, 2009. 
(b) EMPLOYER PLANS.— 
(1) IN GENERAL.—The first sentence of para-
graph (2) of section 1857(i) of such Act (42 U.S.C. 
1395w–27(i)) is amended by inserting before the pe-
riod at the end the following: ‘‘, but only if 90 per-
cent of the Medicare part C eligible individuals en-
rolled under such plan reside in a county in which 
the Medicare Part C organization offers a Medicare 
Part C local plan’’. 
(2) LIMITATION ON APPLICATION OF WAIVER 
AUTHORITY.—Paragraphs (1) and (2) of such sec-
tion are each amended by inserting ‘‘that were in ef-
fect before the date of the enactment of the Chil-
dren’s Health and Medicare Protection Act of 2007’’ 
after ‘‘waive or modify requirements’’. 
(3) EFFECTIVE DATES.—The amendment made 
by paragraph (1) shall apply for plan years begin-
ning on or after January 1, 2009, and the amend-
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ments made by paragraph (2) shall take effect on 
the date of the enactment of this Act. 
SEC. 422. DEVELOPMENT OF NEW QUALITY REPORTING 
MEASURES ON RACIAL DISPARITIES. 
(a) NEW QUALITY REPORTING MEASURES.— 
(1) IN
GENERAL.—Section 1852(e)(3) of the 
Social Security Act (42 U.S.C. 1395w–22(e)(3)), as 
amended by section 421(a)(2), is amended— 
(A) in subparagraph (B)— 
(i) in clause (i), by striking ‘‘The Sec-
retary’’ and inserting ‘‘Subject to subpara-
graph (D), the Secretary’’; and 
(ii) in clause (ii), by striking ‘‘sub-
clause (iii)’’ and inserting ‘‘clause (iii) and 
subparagraph (C)’’; and 
(B) by adding at the end the following new 
subparagraph: 
‘‘(D) ADDITIONAL
QUALITY
REPORTING 
MEASURES.— 
‘‘(i) IN
GENERAL.—The Secretary 
shall develop by October 1, 2009, quality 
measures for Medicare Part C plans that 
measure disparities in the amount and 
quality of health services provided to racial 
and ethnic minorities. 
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‘‘(ii) DATA TO MEASURE RACIAL AND 
ETHNIC DISPARITIES IN THE AMOUNT AND 
QUALITY OF CARE PROVIDED TO ENROLL-
EES.—The Secretary shall provide for 
Medicare Part C organizations to submit 
data under this paragraph, including data 
similar to those submitted for other quality 
measures, that permits analysis of dispari-
ties among racial and ethnic minorities in 
health services, quality of care, and health 
status among Medicare Part C plan enroll-
ees for use in submitting the reports under 
paragraph (5).’’. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to reporting of quality 
measures for plan years beginning on or after Janu-
ary 1, 2010. 
(b) BIENNIAL REPORT ON RACIAL AND ETHNIC MI-
NORITIES.—Section 1852(e) of such Act (42 U.S.C. 
1395w–22(e)) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(5) REPORT TO CONGRESS.— 
‘‘(A) IN GENERAL.—Not later than 2 years 
after the date of the enactment of this para-
graph, and biennially thereafter, the Secretary 
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shall submit to Congress a report regarding 
how quality assurance programs conducted 
under this subsection measure and report on 
disparities in the amount and quality of health 
care services furnished to racial and ethnic mi-
norities. 
‘‘(B) CONTENTS OF REPORT.—Each such 
report shall include the following: 
‘‘(i) A description of the means by 
which such programs focus on such racial 
and ethnic minorities. 
‘‘(ii) An evaluation of the impact of 
such programs on eliminating health dis-
parities and on improving health outcomes, 
continuity and coordination of care, man-
agement of chronic conditions, and con-
sumer satisfaction. 
‘‘(iii) Recommendations on ways to re-
duce clinical outcome disparities among ra-
cial and ethnic minorities. 
‘‘(iv) Data for each MA plan from 
HEDIS and other source reporting the dis-
parities in the amount and quality of 
health services furnished to racial and eth-
nic minorities.’’. 
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SEC. 423. STRENGTHENING AUDIT AUTHORITY. 
(a) FOR PART C PAYMENTS RISK ADJUSTMENT.— 
Section 1857(d)(1) of the Social Security Act (42 U.S.C. 
1395w–27(d)(1)) is amended by inserting after ‘‘section 
1858(c))’’ the following: ‘‘, and data submitted with re-
spect to risk adjustment under section 1853(a)(3)’’. 
(b) 
ENFORCEMENT
OF
AUDITS
AND
DEFI-
CIENCIES.— 
(1) IN GENERAL.—Section 1857(e) of such Act 
is amended by adding at the end the following new 
paragraph: 
‘‘(5) ENFORCEMENT
OF
AUDITS
AND
DEFI-
CIENCIES.— 
‘‘(A) INFORMATION
IN
CONTRACT.—The 
Secretary shall require that each contract with 
a Medicare Part C organization under this sec-
tion shall include terms that inform the organi-
zation of the provisions in subsection (d). 
‘‘(B) ENFORCEMENT
AUTHORITY.—The 
Secretary is authorized, in connection with con-
ducting audits and other activities under sub-
section (d), to take such actions, including pur-
suit of financial recoveries, necessary to address 
deficiencies identified in such audits or other 
activities.’’. 
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(2) APPLICATION UNDER PART D.—For provi-
sion applying the amendment made by paragraph 
(1) to prescription drug plans under part D, see sec-
tion 1860D–12(b)(3)(D) of the Social Security Act. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect the date of the enactment 
of this Act and shall apply to audits and activities con-
ducted for contract years beginning on or after January 
1, 2009. 
SEC. 424. IMPROVING RISK ADJUSTMENT FOR MA PAY-
MENTS. 
(a) IN GENERAL.—Not later than 1 year after the 
date of the enactment of this Act, the Secretary of Health 
and Human Services shall submit to Congress a report 
that evaluates the adequacy of the Medicare Advantage 
risk adjustment system under section 1853(a)(1)(C) of the 
Social Security Act (42 U.S.C. 1395–23(a)(1)(C)). 
(b) PARTICULARS.—The report under subsection (a) 
shall include an evaluation of at least the following: 
(1) The need and feasibility of improving the 
adequacy of the risk adjustment system in predicting 
costs for beneficiaries with co-morbid conditions and 
associated cognitive impairments. 
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