I
107TH CONGRESS
1ST SESSION
H. R. 2953
To amend title XVIII of the Social Security Act to make the social health
maintenance 
organization 
a 
permanent 
option 
under 
the
Medicare+Choice program.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 25, 2001
Mr. HORN introduced the following bill; which was referred to the Committee
on Ways and Means, and in addition to the committee on Energy and
Commerce, for a period to be subsequently determined by the Speaker,
in each case for consideration of such provisions as fall within the juris-
diction of the committee concerned
A BILL
To amend title XVIII of the Social Security Act to make
the social health maintenance organization a permanent
option under the Medicare+Choice program.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Medicare Coordinated
Community Care Act of 2001’’.
SEC. 2. MAKING SOCIAL HEALTH MAINTENANCE ORGANI-
ZATIONS (S/HMOS) A PERMANENT OPTION AS
COORDINATED 
COMMUNITY 
CARE 
PLANS
UNDER THE MEDICARE+CHOICE PROGRAM.
(a) INCLUSION OF COORDINATED COMMUNITY CARE
PLANS INTO GROUPING OF MEDICARE+CHOICE COORDI-
NATED CARE PLANS.—Section 1851(a)(2)(A) of the So-
cial Security Act (42 U.S.C. 1395w–21(a)(2)(A)) is
amended by striking ‘‘and preferred provider organization
plans’’ and inserting ‘‘preferred provider organization
plans, and coordinated community care plans (as defined
in section 1859(b)(4))’’.
(b) DEFINITION
OF
COORDINATED
COMMUNITY
CARE PLAN.—Section 1859(b) of such Act (42 U.S.C.
1395w–29(b)) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(4) COORDINATED COMMUNITY CARE PLAN.—
The term ‘coordinated community care plan’ means
a Medicare+Choice plan that (in addition to pro-
viding services and otherwise meeting the require-
ments of this part) meets the following require-
ments:
‘‘(A) The plan provides as benefits to all
enrollees chronic illness services and ancillary
services, as specified in section 1852(a)(6).
‘‘(B) The plan provides as benefits ex-
panded care services, as specified in section
1852(a)(7), to enrollees who meet the criteria
for at-risk enrollees (as defined in paragraph
(5)).
‘‘(C) The plan meets the quality assurance
requirements specified in section 1852(e)(2)(E).
‘‘(D) The plan submits to the Secretary re-
ports on the functional status of enrollees as
well as on expenditures and utilization of cov-
ered expanded care services.
‘‘(5) AT-RISK ENROLLEE.—For purposes of de-
termining an enrollee’s eligibility to receive expanded
care services from a coordinated community care
plan, the term ‘at-risk enrollee’ means an enrollee of
a coordinated community care plan who has been de-
termined by the coordinated community care plan,
based on a multidimensional, geriatric assessment,
to meet at least one of the following criteria:
‘‘(A) The individual needs personal super-
vision or hands-on assistance with bathing,
dressing, transferring, toileting, eating, or daily
mobility assistance inside the home.
‘‘(B) The individual needs protection and
supervision on a constant basis due to cognitive
impairment.
‘‘(C) The individual needs daily personal
assistance to ensure proper administration and
management of prescribed medications or med-
ical or nursing procedures.
‘‘(D) The individual needs personal assist-
ance (at least 3 times a week) to manage incon-
tinence problems or ostomy equipment.
‘‘(E) The individual needs special ongoing
management because the enrollee is frequently
disruptive, aggressive, or agitated, or is a dan-
ger to self or others.
‘‘(F) The individual needs help to prevent,
delay, or minimize functional decline.
‘‘(G) The individual meets such other cri-
teria as the Secretary may determine.’’.
(c) 
INFORMATION
ON
BENEFITS.—Section
1851(a)(4)(A) 
of 
such 
Act 
(42 
U.S.C. 
1395w–
21(a)(4)(A)) is amended by adding at the end the fol-
lowing new clause:
‘‘(ix) In the case of a coordinated
community care plan, differences in bene-
fits, care coordination services, quality im-
provement programs, and other distin-
guishing 
factors 
compared 
to 
other
Medicare+Choice plans.’’.
(d) BASIC
AND
EXPANDED
BENEFITS.—Section
1852 of such Act (42 U.S.C. 1395w–22) is amended—
(1) by adding at the end of subsection (a) the
following new paragraphs:
‘‘(6) BENEFITS
OFFERED
BY
COORDINATED
COMMUNITY CARE PLANS.—
‘‘(A) IN
GENERAL.—In addition to the
benefits required under parts A and B, each co-
ordinated community care plan shall make
available to each enrollee—
‘‘(i) chronic illness care services (de-
scribed in subparagraph (B)) to manage
common geriatric conditions and chronic
illness; and
‘‘(ii) ancillary services described in
subparagraph (C).
‘‘(B) CHRONIC ILLNESS CARE SERVICES.—
Chronic illness care services under this subpara-
graph shall be furnished in accordance with
guidelines and protocols adopted by the Sec-
retary and by geriatricians, geriatric nurse
practitioners, and other providers experienced
in chronic illness care. Such services may in-
clude geriatric and chronic illness and disability
training supplements, consultation with medical
specialists, and other services deemed appro-
priate by the plans.
‘‘(C) 
ANCILLARY
SERVICES.—Ancillary
services under this subparagraph—
‘‘(i) shall include prescription drugs,
eyeglasses, and hearing aids, in an amount
and duration specified under the plan; and
‘‘(ii) may also include, at the discre-
tion of the plan, such preventive services
and other items and services not otherwise
covered under part A or B as the plan may
specify.
‘‘(7) EXPANDED CARE SERVICES FOR AT-RISK
ENROLLEES.—
‘‘(A) IN
GENERAL.—In addition to the
benefits required under parts A and B and
paragraph (6), each coordinated community
care plan shall make available to each at-risk
enrollee (as defined in section 1859(b)(5))
through providers with appropriate expertise in
geriatric and chronic illness care services and in
accordance with an expanded care plan under
subsection (m)(3)—
‘‘(i) benefits for home and commu-
nity-based services described in subpara-
graph (B);
‘‘(ii) benefits for supplemental non-
acute institutional services described in
subparagraph (C) but only in the case of
an individual who does not reside in an in-
stitutional setting; and
‘‘(iii) end-of-life and palliative care
services described in subparagraph (D).
‘‘(B) HOME AND COMMUNITY-BASED BEN-
EFITS.—
‘‘(i) IN
GENERAL.—The home and
community-based services under this sub-
paragraph include, subject to clause (ii),
personal care, homemakers, medical trans-
portation, adult day health, and medication
management. Such services may also in-
clude routine foot care in the home, home
modifications, medical and adaptive equip-
ment and supplies, expanded mental health
services, personal emergency response sys-
tems, home-delivered meals, and nutri-
tional assessments and services.
‘‘(ii) SCOPE.—The benefits under this
subparagraph may be limited to a specified
dollar amount of coverage per enrollee per
year (exclusive of member copayments).
Such dollar limit—
‘‘(I) for benefits during 2002,
shall not be less than $7,500; or
‘‘(II) for benefits during a subse-
quent year, shall not be less than the
dollar amount specified under this
clause for the previous year increased
by minimum percentage increase in
Medicare+Choice 
capitation 
rates
provided under section 1853(c)(1)(C)
applicable to that subsequent year.
‘‘(iii) LIMITS ON COPAYMENTS.—With
respect to the benefits under this subpara-
graph, a coordinated community care plan
may not charge a deductible and may not
charge copayments that exceed 25 percent.
‘‘(C) SUPPLEMENTAL NON-ACUTE INSTITU-
TIONAL SERVICES.—
‘‘(i) IN GENERAL.—Benefits for sup-
plemental non-acute institutional services
under this subparagraph are benefits for
institutional care (such as care in an insti-
tutional setting, as defined in clause (iv))
that is not otherwise covered under part A
or part B and that is in aid of returning
the enrollee to a community residence and
that is provided to an individual who re-
sides outside an institutional setting.
‘‘(ii) DURATION.—
‘‘(I) INITIAL PERIOD OF ELIGI-
BILITY.—The benefits under this sub-
paragraph shall include at least 14
days of supplemental non-acute insti-
tutional care.
‘‘(II) SUBSEQUENT PERIODS OF
ELIGIBILITY.—After receipt of the
benefits described in subclause (I),
after the at-risk enrollee has resumed
residing in a community residence for
a continuous period of 60 days, sub-
ject to subclause (III), the benefits
under this subparagraph shall include
at least an additional 14 days of sup-
plemental non-acute institutional care.
‘‘(III) ANNUAL
LIMITATION.—A
plan is not required to provide supple-
mental non-acute institutional care for
more than 30 days of supplemental
non-acute institutional care for any
enrollee in any calendar year.
‘‘(IV) COMMUNITY RESIDENCE.—
For purposes of this clause, the term
‘community residence’ means a resi-
dence in a community-setting and
does not include a residence in any in-
stitutional setting.
‘‘(iii) LIMITS ON COPAYMENTS.—With
respect to the supplemental non-acute in-
stitutional services benefit under this sub-
paragraph, the coordinated community
care plan may not charge a deductible and
may not charge copayments that exceed 25
percent.
‘‘(iv) INSTITUTIONAL
SETTING.—For
purposes of this paragraph, the term ‘insti-
tutional setting’ includes a nursing facility,
assisted living facility, adult foster home,
or other licensed non-acute care facility.
‘‘(D) END-OF-LIFE CARE.—End-of-life and
palliative care services under this subparagraph
shall not be limited to the last 6 months of life,
shall cover a broader range of life-limiting con-
ditions than traditional hospice care, and shall
include support of family caregivers.’’; and
(2) by adding at the end the following new sub-
section:
‘‘(m) CARE COORDINATION.—Coordinated commu-
nity care plans shall adopt a care coordination program
for serving members. This program shall include geriatric-
focused assessment and care planning that meet at least
the following requirements:
‘‘(1) POPULATION
SCREENING.—The coordi-
nated community care plan shall screen each new
enrollee upon enrollment and annually thereafter
through a self-report health status form with a
standardized set of core items designed to identify
enrollees who may be at risk due to medical, psycho-
logical, behavioral, environmental, or functional con-
ditions.
‘‘(2) CLINICAL SCREENING.—In the case of an
enrollee who is identified, under a screening under
paragraph (1) or otherwise, as potentially being at
risk due to conditions described in such paragraph
or who otherwise self-identifies as potentially being
so at risk, the coordinated community care plan
shall provide for an appropriate clinical screening to
determine if the enrollee is an at-risk enrollee.
‘‘(3) COMPREHENSIVE ASSESSMENT AND PLAN-
NING.—In the case of an enrollee identified as an at-
risk enrollee, a care coordinator in the coordinated
community care plan shall contact the enrollee to de-
termine the enrollee’s need for a comprehensive as-
sessment to determine the enrollee’s needs, pref-
erences, and eligibility for expanded care benefits.
Such an assessment shall be conducted in the enroll-
ee’s home and other settings, as appropriate, using
flexible, multidimensional geriatric approaches that
incorporate medical, functional, psychological, and
environmental dimensions. All at-risk enrollees shall
be assigned a care coordinator who will develop an
expanded care plan based on the multidimensional
assessment, information on medical status and care,
and member preferences. The coordinated commu-
nity care plan shall assure that at-risk enrollees be
referred in a timely manner to the appropriate pro-
vider or providers for appropriate services under the
expanded care plan.
‘‘(4) INTEGRATION OF CARE.—Procedures shall
be established among such care coordinators and
acute and expanded care providers in such plans to
ensure timely sharing of clinical information, assign-
ment of responsibility, and coordination and integra-
tion of services under the expanded care plan across
all providers and settings in a manner that meets
the special needs of geriatric and chronically ill or
impaired individuals.’’.
(d) QUALITY ASSURANCE.—Section 1852(e)(2) of
such Act (42 U.S.C. 1395w–22(e)(2)) is amended by add-
ing at the end the following new subparagraph:
‘‘(E) COORDINATED
COMMUNITY
CARE
PLANS.—In addition in the case of a coordi-
nated community care plan, the quality assur-
ance program shall employ systems to ensure
the quality of covered expanded care and chron-
ic illness care services. The Secretary shall es-
tablish appropriate outcome measures for as-
sessing the quality of care provided to frail el-
derly and at-risk enrollees with chronic condi-
tions in such plans. Such outcome indicators
shall measure plans’ and providers’ effective-
ness in—
‘‘(i) integrating the delivery of acute
care and expanded care;
‘‘(ii) meeting identified expanded care
needs;
‘‘(iii) preventing, delaying, or mini-
mizing disability progression; and
‘‘(iv) preventing or delaying institu-
tionalization.’’.
(e) PAYMENTS.—Section 1853 of such Act (42
U.S.C. 1395w–23) is amended by adding at the end the
following new subsection:
‘‘(j) COORDINATED COMMUNITY CARE PLANS.—Not-
withstanding the previous provisions of this section, each
coordinated community care plans shall be paid under this
section as follows:
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2)—
‘‘(A) CURRENT SOCIAL HMOS.—In the case
of a coordinated community care plan that con-
tracted with the Secretary to furnish services as
a social HMO during 2001 and that continues
to contract with the Secretary following the ef-
fective date of this subsection, payment shall be
based on the same risk adjustment factors and
formula such plan was paid during 2001.
‘‘(B) OTHER PLANS.—In the case of a co-
ordinated community care plan not described in
subparagraph (A), before the adoption and im-
plementation of a new payment methodology for
coordinated community care plans under para-
graph (2), the Secretary shall have the discre-
tion to select one of the 2 methodologies for
risk adjustment factors and formula that may
be applied under subparagraph (A) to pay any
Medicare+Choice coordinated care plan that is
certified as a coordinated community care plan.
‘‘(2) NEW PAYMENT METHODOLOGY.—The Sec-
retary shall develop a new payment methodology to
pay coordinated community care plans. In developing
this new payment methodology, the Secretary shall
be guided by the following 3 factors:
‘‘(A) Recognizing that impairment-related
costs are not adequately accounted for in the
individual diagnostic and demographic factors
used 
to 
adjust 
payments 
for 
other
Medicare+Choice plans, a functional status fac-
tor or factors or other factors equally sensitive
to costs associated with disability, frailty, and
comorbidities will be included in the coordinated
community care plan payment system.
‘‘(B) There will be an enhancement of the
underlying base payment to coordinated com-
munity care plans that reflects the increased
risk of offering the additional benefits required
by paragraphs (6) and (7) of section 1852(a).
The Secretary shall make this enhancement
commensurate with the original intent of the
Deficit Reduction Act of 1984 to pay not less
than the actuarial equivalent of 100 percent of
what would have been paid under this title for
the enrolled members had they not enrolled in
a plan under this part but obtained benefits
through the fee-for-service system.
‘‘(C) The Secretary shall assure that the
payment methodology will not change because a
coordinated community care plan has a contract
with a State under title XIX to serve individ-
uals dually eligible under this title and that
title.
‘‘(3) TRANSITION.—If the payment method-
ology developed by the Secretary under paragraph
(2) results in a reduction of payment to a coordi-
nated community care plan that is receiving pay-
ment under a method described in paragraph (1),
the Secretary shall establish a 4-year transition pe-
riod during which the new payment methodology is
phased in. During the first year of the transition,
payment will be based on a blend weighted 1⁄4 of the
new payment methodology under paragraph (2) and
3⁄4 of the payment methodology under paragraph
(1). During each of the second and third years, pay-
ment will be based on a blend weighted 1⁄2 and 3⁄4,
respectively, of the new payment methodology under
paragraph (2) and 1⁄2 and 1⁄4, respectively, based on
the payment methodology under paragraph (1). The
Secretary shall fully implement the new payment
methodology during the fourth year.
‘‘(4) COMMENT.—The Secretary shall submit
the new payment methodology for coordinated com-
munity care plans to public comment as part of the
advance notice of methodological changes under sec-
tion 1853(b)(2).’’.
(f) PREMIUMS.—Section 1854(f)(1) of such Act (42
U.S.C. 1395w–24(f)(1)) is amended by adding at the end
the following new subparagraph:
‘‘(F) SPECIAL RULES FOR COORDINATED
COMMUNITY CARE PLANS.—
‘‘(i) Each coordinated community care
plan shall include as additional benefits
those services described in paragraphs (6)
and (7) of section 1852(a) unless inclusion
of the additional benefits results in the ac-
tuarial value of the benefits exceeding the
average of the capitation payments made
to the coordinated community care plan. If
so, the coordinated community care plan
may treat the excess as a supplemental
benefit (as defined in section 1852(a)(3)),
and charge a premium for the actuarial
value of the excess costs.
‘‘(ii) Nothing in this part shall be con-
strued to preclude a coordinated commu-
nity care plan from furnishing the services
specified in section 1852(a)(7) only to at-
risk enrollees (as defined in section
1859(b)(5)).’’.
(g) DISCRETION TO WAIVE REQUIREMENTS.—Sec-
tion 1856(b) of such Act (42 U.S.C. 1395w–26(b)) is
amended by adding at the end the following new para-
graph:
‘‘(4) ADAPTATION
TO
COORDINATED
COMMU-
NITY CARE PLANS.—In establishing standards under
this section, the Secretary shall adapt such stand-
ards as they apply to coordinated community care
plans to appropriately account for their unique char-
acteristics as reflected in the composition of enroll-
ment and the care coordination and expanded ben-
efit requirements under this part.’’.
(h) EFFECTIVE DATE; TRANSITION.—
(1) EFFECTIVE
DATE.—Except as otherwise
provided in this subsection, the amendments made
by this section shall take effect on January 1, 2002.
(2) TRANSITION.—
(A) IN GENERAL.—Upon the enactment of
this section, the Secretary of Health and
Human Services shall proceed in an expedited
manner to develop and promulgate the nec-
essary rules and the payment methodology re-
quired by the amendments made by this sec-
tion.
(B) APPLICATION
OF
REQUIREMENTS.—
Except as provided in paragraph (3), the Sec-
retary of Health and Human Services may not
certify a Medicare+Choice organization as
meeting the requirements applicable to coordi-
nated community care plans under part C of
title XVIII of the Social Security Act until the
adoption of final regulations implementing the
statutory requirements applicable to coordi-
nated community care plans under such part.
(3) DEEMED TREATMENT.—
(A) 
CURRENT
S/HMOS.—Any
Medicare+Choice organization that is operating
as of the date of the enactment of this Act
under demonstration authority as a Social
HMO (S/HMO I or S/HMO II or a combination
thereof) shall be deemed to meet the require-
ments applicable to coordinated community care
plans under part C of title XVIII of the Social
Security Act from the effective date specified in
paragraph (1) through 24 months following the
date the Secretary publishes final regulations
establishing standards for coordinated commu-
nity care plans under the amendments made by
this section.
(B) S/HMOS WITH PLANNING GRANTS.—
In the case of an entity that received a planning
grant in 1998 under the 1997 Grants Program
for Reforming Service Delivery for Dual Eligi-
ble Beneficiaries to develop a Second Genera-
tion Social HMO Demonstration program, if
the Secretary determines that the program de-
veloped under such a grant would qualify to op-
erate as a demonstration authority as a Social
HMO (S/HMO I or S/HMO II or a combination
thereof), the Secretary may treat the entity
with respect to such program as a Social HMO
for purposes of applying subparagraph, effective
on a date specified by the Secretary.
(4) IMMEDIATE REMOVAL OF LIMITATION ON
NUMBER
OF
MEMBERS
PER
SITE
UNDER
DEM-
ONSTRATION
PROJECT.—Section 13567(c) of the
Omnibus Budget Reconciliation Act of 1993, as
amended by sections 4014(b) of the Balanced Budg-
et Act of 1997 and by section 531(c) of the Medi-
care, Medicaid, and SCHIP Balanced Budget Re-
finement Act of 1999 (113 1501A–388), is
amended—
(A) in the heading, by striking ‘‘AGGRE-
GATE’’ and inserting ‘‘NO’’; and
(B) by striking ‘‘other than an aggregate
limit of not less than 324,000 for all sites’’.
(5) LIMITATION
ON
INITIAL
EXPANSION.—In
the first 3 years following the effective date of imple-
menting regulations described in paragraph (2)(A),
the Secretary of Health and Human Services shall
not approve any more than the following total num-
ber of coordinated community care plans under part
C of title XVIII of the Social Security Act (in addi-
tion to the plans referred to in paragraph (3)):
(A) In the first such year, 5 coordinated
community care plans.
(B) In the second such year, 15 coordi-
nated community care plans.
(C) In the third such year, 30 coordinated
community care plans.
For any succeeding year, there shall be no limit on
the number of such plans that may be approved.
(i) ADVISORY COMMITTEE.—
(1) ESTABLISHMENT.—The Secretary of Health
and Human Services shall establish a National Advi-
sory Committee on Social HMO Replication to assist
Medicare+Choice plans, health care providers, and
other appropriate organizations in the design, imple-
mentation, and ongoing evaluation of coordinated
community care plans under the amendments made
by this section.
(2) MEMBERSHIP.—Membership on the com-
mittee shall include representation from the fol-
lowing:
(A) Existing Social HMO I and II sites.
(B) Social HMO II planning grant sites.
(C) Providers and professionals with exper-
tise in geriatric medicine, chronic illness care
and home and community-based service pro-
grams.
(D) Representatives from the Federal and
State governments with oversight responsibil-
ities for programs serving the elderly and dis-
abled.
(E) Representatives from the Social HMO
research and development groups at Brandeis
University, University of Minnesota, and the
University of California at San Francisco.
(F) Such other representatives as the Sec-
retary may designate.
Æ