I
106TH CONGRESS
2D SESSION
H. R. 5291
To amend titles XVIII, XIX, and XXI of the Social Security Act to make
additional corrections and refinements in the Medicare, Medicaid, and
State children’s health insurance programs, as revised by the Balanced
Budget Act of 1997.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 26, 2000
Mr. BLILEY (for himself, Mr. DINGELL, Mr. BILIRAKIS, Mr. BROWN of Ohio,
Mr. TAUZIN, Mr. OXLEY, Mr. UPTON, Mr. STEARNS, Mr. GILLMOR, Mr.
GREENWOOD, Mr. BURR of North Carolina, Mr. NORWOOD, Mr. ROGAN,
Mr. SHIMKUS, Mrs. WILSON, Mr. PICKERING, Mr. BRYANT, Mr. BLUNT,
Mr. EHRLICH, Ms. MCCARTHY of Missouri, Mr. LUTHER, Mr. ALLEN,
Mr. WEYGAND, Mr. WAXMAN, Mr. MARKEY, Mr. HALL of Texas, Mr.
BOUCHER, Mr. TOWNS, Mr. PALLONE, Mr. GORDON, Ms. ESHOO, Mr.
KLINK, Mr. STUPAK, Mr. ENGEL, Mr. WYNN, Mr. BARRETT of Wis-
consin, and Mr. HOEFFEL) introduced the following bill; which was re-
ferred to the Committee on Commerce, and in addition to the Committee
on Ways and Means, for a period to be subsequently determined by the
Speaker, in each case for consideration of such provisions as fall within
the jurisdiction of the committee concerned
A BILL
To amend titles XVIII, XIX, and XXI of the Social Security
Act to make additional corrections and refinements in
the Medicare, Medicaid, and State children’s health in-
surance programs, as revised by the Balanced Budget
Act of 1997.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; AMENDMENTS TO SOCIAL SECU-
RITY ACT; REFERENCES TO OTHER ACTS;
TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Beneficiary Improvement and Protection Act of 2000’’.
(b) AMENDMENTS TO SOCIAL SECURITY ACT.—Ex-
cept as otherwise specifically provided, whenever in this
Act an amendment is expressed in terms of an amendment
to or repeal of a section or other provision, the reference
shall be considered to be made to that section or other
provision of the Social Security Act.
(c) REFERENCES TO OTHER ACTS.—In this Act:
(1) BALANCED
BUDGET
ACT
OF
1997.—The
term ‘‘BBA’’ means the Balanced Budget Act of
1997 (Public Law 105–33).
(2) MEDICARE, MEDICAID, AND
SCHIP
BAL-
ANCED
BUDGET
REFINEMENT
ACT
OF
1999.—The
term ‘‘BBRA’’ means the Medicare, Medicaid, and
SCHIP Balanced Budget Refinement Act of 1999,
as enacted into law by section 1000(a)(6) of Public
Law 106–113 (Appendix F).
(d) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; amendments to Social Security Act; references to other Acts;
table of contents.
TITLE I—BENEFICIARY IMPROVEMENTS
Sec. 101. Improving availability of QMB/SLMB application forms.
Sec. 102. Study on limitation on State payment for medicare cost-sharing af-
fecting access to services for qualified medicare beneficiaries.
Sec. 103. Election of periodic colonoscopy.
Sec. 104. Waiver of 24-month waiting period for medicare coverage of individ-
uals disabled with amyotrophic lateral sclerosis (ALS).
Sec. 105. Elimination of time limitation on medicare benefits for immuno-
suppressive drugs.
Sec. 106. Preservation of coverage of drugs and biologicals under part B of the
medicare program.
Sec. 107. Demonstration of medicare coverage of medical nutrition therapy
services.
TITLE II—OTHER MEDICARE PART B PROVISIONS
Subtitle A—Access to Technology
Sec. 201. Annual reports on national coverage determinations.
Sec. 202. National limitation amount equal to 100 percent of national median
for new clinical laboratory test technologies; fee schedule for
new clinical laboratory tests.
Sec. 203. Clarifying process and standards for determining eligibility of devices
for pass-through payments under hospital outpatient PPS.
Sec. 204. Access to new technologies applied to screening mammography to en-
hance breast cancer detection.
Subtitle B—Provisions Relating to Physicians Services
Sec. 211. GAO study of gastrointestinal endoscopic services furnished in physi-
cians offices and hospital outpatient department services.
Sec. 212. Treatment of certain physician pathology services.
Sec. 213. Physician group practice demonstration.
Sec. 214. Designation of separate category for interventional pain management
physicians.
Sec. 215. Evaluation of enrollment procedures for medical groups that retain
independent contractor physicians.
Subtitle C—Other Services
Sec. 221. 3-year moratorium on SNF part B consolidated billing requirements.
Sec. 222. Ambulatory surgical centers.
Sec. 223. 1-year extension of moratorium on therapy caps.
Sec. 224. Revision of medicare reimbursement for telehealth services.
Sec. 225. Payment for ambulance services.
Sec. 226. Contrast enhanced diagnostic procedures under hospital prospective
payment system.
Sec. 227. 10-year phased-in increase from 55 percent to 80 percent in the pro-
portion of hospital bad debt recognized.
Sec. 228. State accreditation of diabetes self-management training programs.
Sec. 229. Update in renal dialysis composite rate.
TITLE III—MEDICARE PART A AND B PROVISIONS
Sec. 301. Home health services.
Sec. 302. Advisory opinions.
Sec. 303. Hospital geographic reclassification for labor costs for other PPS sys-
tems.
Sec. 304. Reclassification of a metropolitan statistical area for purposes of re-
imbursement under the medicare program.
Sec. 305. Making the medicare dependent, small rural hospital program perma-
nent.
Sec. 306. Option to base eligibility on discharges during any of the 3 most re-
cent audited cost reporting periods.
Sec. 307. Identification and reduction of medical errors by peer review organi-
zations.
Sec. 308. GAO report on impact of the Emergency Medical Treatment and Ac-
tive Labor Act (EMTALA) on hospital emergency departments.
TITLE IV—MEDICARE+CHOICE PROGRAM STABILIZATION AND
IMPROVEMENTS
Subtitle A—Payment Reforms
Sec. 401. Increasing minimum payment amount.
Sec. 402. 3 percent minimum percentage update in 2001.
Sec. 403. 10-year phase in of risk adjustment based on data from all settings.
Sec. 404. Transition to revised Medicare+Choice payment rates.
Subtitle B—Administrative Reforms
Sec. 411. Effectiveness of elections and changes of elections.
Sec. 412. Medicare+Choice program compatibility with employer or union
group health plans.
Sec. 413. Uniform premium and benefits.
TITLE V—MEDICAID
Sec. 501. DSH payments.
Sec. 502. New prospective payment system for Federally-qualified health cen-
ters and rural health clinics.
Sec. 503. Optional coverage of legal immigrants under the medicaid program.
Sec. 504. Additional entities qualified to determine medicaid presumptive eligi-
bility for low-income children.
Sec. 505. Improving welfare-to-work transition.
Sec. 506. Medicaid county-organized health systems.
Sec. 507. Medicaid recognition for services of physician assistants.
TITLE VI—STATE CHILDREN’S HEALTH INSURANCE PROGRAM
Sec. 601. Special rule for availability and redistribution of unused fiscal year
1998 and 1999 SCHIP allotments.
Sec. 602. Optional coverage of certain legal immigrants under SCHIP.
TITLE VII—EXTENSION OF SPECIAL DIABETES GRANT
PROGRAMS
Sec. 701. Extension of juvenile and Indian diabetes grant programs.
TITLE I—BENEFICIARY
IMPROVEMENTS
SEC. 101. IMPROVING AVAILABILITY OF QMB/SLMB APPLI-
CATION FORMS.
(a) THROUGH LOCAL SOCIAL SECURITY OFFICES.—
(1) IN
GENERAL.—Section 1804 (42 U.S.C.
1395b–2) is amended by adding at the end the fol-
lowing new subsection:
‘‘(d) AVAILABILITY
OF APPLICATION FORMS
FOR
MEDICAL ASSISTANCE FOR MEDICARE COST-SHARING.—
The Secretary shall make available to the Administrator
of the Social Security Administration appropriate forms
for applying for medical assistance for medicare cost-shar-
ing under a State plan under title XIX. Such Adminis-
trator, through local offices of the Social Security Admin-
istration shall—
‘‘(1) notify applicants and beneficiaries who
present at a local office orally of the availability of
such forms and make such forms available to such
individuals upon request; and
‘‘(2) provide assistance to such individuals in
completing such forms and, upon request, in submit-
ting such forms to the appropriate State agency.’’.
(2) 
CONFORMING
AMENDMENT.—Section
1902(a)(8) (42 U.S.C. 1396a(a)(8)) is amended by
inserting before the semicolon at the end the fol-
lowing: ‘‘and provide application forms for medical
assistance for medicare cost-sharing under the plan
to the Secretary in order to make them available
through Federal offices under section 1804(d) within
the State’’.
(b) STREAMLINING APPLICATION PROCESS.—
(1) REQUIREMENT.—Section 1902(a)(8) (42
U.S.C. 1396a(a)(8)) is amended by striking ‘‘, and
that’’ and inserting ‘‘permit individuals to apply for
and obtain medical assistance for medicare cost-
sharing using the simplified uniform application
form developed under section 1905(p)(5), make
available such forms to such individuals, permit such
individuals to apply for such assistance by mail
(and, at the State option, by telephone or other elec-
tronic means) and not require them to apply in per-
son, and provide that’’.
(2) SIMPLIFIED
APPLICATION
FORM.—Section
1905(p) (42 U.S.C. 1396d(p)) is amended by adding
at the end the following new paragraph:
‘‘(5)(A) The Secretary shall develop a simplified ap-
plication form for use by individuals (including both quali-
fied medicare beneficiaries and specified low-income medi-
care beneficiaries) in applying for medical assistance for
medicare cost-sharing under this title. Such form shall be
easily readable by applicants and uniform nationally.
‘‘(B) In developing such form, the Secretary shall
consult with beneficiary groups and the States.
‘‘(C) The Secretary shall make such application
forms available—
‘‘(i) to the Administrator of the Social Security
Administration for distribution through local social
security offices;
‘‘(ii) at such other sites as the Secretary deter-
mines appropriate; and
‘‘(iii) to persons upon request.’’.
(c) EFFECTIVE DATES.—
(1) The amendments made by subsection (a)
take effect on January 1, 2004.
(2) EFFECTIVE DATE.—The amendments made
by subsection (b) take effect 1 year after the date
of the enactment of this Act, regardless of whether
regulations have been promulgated to carry out such
amendments by such date. Secretary of Health and
Human Services shall develop the uniform applica-
tion form under the amendment made by subsection
(b)(2) by not later than 9 months after the date of
the enactment of this Act.
SEC. 102. STUDY ON LIMITATION ON STATE PAYMENT FOR
MEDICARE COST-SHARING AFFECTING AC-
CESS TO SERVICES FOR QUALIFIED MEDI-
CARE BENEFICIARIES.
(a) IN GENERAL.—The Secretary of Health and
Human Services shall conduct a study to determine if ac-
cess to certain services (including mental health services)
for qualified medicare beneficiaries has been affected by
limitations on a State’s payment for medicare cost-sharing
for such beneficiaries under section 1902(n) of the Social
Security Act (42 U.S.C. 1396a(n)). As part of such study,
the Secretary shall analyze the effect of such payment lim-
itation on providers who serve a disproportionate share of
such beneficiaries.
(b) REPORT.—Not later than 1 year after the date
of the enactment of this Act the Secretary shall submit
to Congress a report on the study under subsection (a).
The report shall include recommendations regarding any
changes that should be made to the State payment limits
under section 1902(n) for qualified medicare beneficiaries
to ensure appropriate access to services.
SEC. 103. ELECTION OF PERIODIC COLONOSCOPY.
(a) COVERAGE.—Section 1861(pp)(1)(C) (42 U.S.C.
1395x(pp)(1)(C)) is amended by inserting ‘‘and in the
case of an individual making the election described in sec-
tion 1834(d)(4)’’ after ‘‘high risk for colorectal cancer’’.
(b) 
ELECTION.—Section 
1834(d) 
(42 
U.S.C.
1395m(d)) is amended—
(1) in paragraph (2)(E)—
(A) by striking ‘‘or’’ at the end of clause
(i);
(B) by striking the period at the end of
clause (ii) and inserting ‘‘; or’’; and
(C) by adding at the end the following new
clause:
‘‘(iii) if the procedure is performed
within 119 months after a screening
colonoscopy under paragraph (4).’’;
(2) in paragraph (3)(A), by inserting ‘‘and for
individuals making the election described in para-
graph (4)’’ after ‘‘1861(pp)(2))’’;
(3) in paragraph (3)(E), by adding at the end
the following: ‘‘No payment may be made under this
part for a colorectal cancer screening test consisting
of a screening colonoscopy for individuals making
the election described in paragraph (4) if the proce-
dure is performed within the 119 months after a
previous screening colonoscopy or within 47 months
after a screening flexible sigmoidoscopy.’’; and
(4) by adding at the end the following new
paragraph:
‘‘(4) ELECTION OF SCREENING COLONOSCOPY
INSTEAD OF SCREENING SIGMOIDOSCOPY.—An indi-
vidual may elect, in a manner specified by the Sec-
retary, to receive a screening colonoscopy instead of
a screening sigmoidoscopy.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section take effect on January 1, 2001.
SEC. 104. WAIVER OF 24-MONTH WAITING PERIOD FOR
MEDICARE COVERAGE OF INDIVIDUALS DIS-
ABLED WITH AMYOTROPHIC LATERAL SCLE-
ROSIS (ALS).
(a) IN GENERAL.—Section 226 (42 U.S.C. 426) is
amended—
(1) by redesignating subsection (h) as sub-
section (j) and by moving such subsection to the end
of the section, and
(2) by inserting after subsection (g) the fol-
lowing new subsection:
‘‘(h) For purposes of applying this section in the case
of an individual medically determined to have amyotrophic
lateral sclerosis (ALS), the following special rules apply:
‘‘(1) Subsection (b) shall be applied as if there
were no requirement for any entitlement to benefits,
or status, for a period longer than 1 month.
‘‘(2) The entitlement under such subsection
shall begin with the first month (rather than twenty-
fifth month) of entitlement or status.
‘‘(3) Subsection (f) shall not be applied.’’.
(b) CONFORMING AMENDMENT.—Section 1837 (42
U.S.C. 1395p) is amended by adding at the end the fol-
lowing new subsection:
‘‘(j) In applying this section in the case of an indi-
vidual who is entitled to benefits under part A pursuant
to the operation of section 226(h), the following special
rules apply:
‘‘(1) The initial enrollment period under sub-
section (d) shall begin on the first day of the first
month in which the individual satisfies the require-
ment of section 1836(1).
‘‘(2) In applying subsection (g)(1), the initial
enrollment period shall begin on the first day of the
first month of entitlement to disability insurance
benefits referred to in such subsection.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section apply to benefits for months beginning after
the date of the enactment of this Act.
SEC. 105. ELIMINATION OF TIME LIMITATION ON MEDI-
CARE BENEFITS FOR IMMUNOSUPPRESSIVE
DRUGS.
(a) IN GENERAL.—Section 1861(s)(2)(J) (42 U.S.C.
1395x(s)(2)(J)) is amended by striking ‘‘, but only’’ and
all that follows up to the semicolon at the end.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to drugs furnished on or after
the date of the enactment of this Act.
SEC. 106. PRESERVATION OF COVERAGE OF DRUGS AND
BIOLOGICALS UNDER PART B OF THE MEDI-
CARE PROGRAM.
(a) IN GENERAL.—Section 1861(s)(2) (42 U.S.C.
1395x(s)(2)) is amended, in each of subparagraphs (A)
and (B), by striking ‘‘(including drugs and biologicals
which cannot, as determined in accordance with regula-
tions, be self-administered)’’ and inserting ‘‘(including
drugs and biologicals which are not usually self-adminis-
tered by the patient)’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) applies to drugs and biologicals adminis-
tered on or after October 1, 2000.
SEC. 107. DEMONSTRATION OF MEDICARE COVERAGE OF
MEDICAL NUTRITION THERAPY SERVICES.
(a) IN GENERAL.—The Secretary of Health and
Human Services shall conduct a demonstration project (in
this section referred to as the ‘‘project’’) to examine the
cost-effectiveness of providing medical nutrition therapy
services under the medicare program and the financial im-
pact of providing such services under the program.
(b) SCOPE OF SERVICES.—
(1) 
TIME
PERIOD
AND
LOCATIONS.—The
project shall be conducted—
(A) during a period of 5 fiscal years; and
(B) in the 5 States which have the highest
proportion of the population who are 65 years
of age or older.
(2) FUNDING.—The total amount of the pay-
ments that may be made under this section shall not
exceed $60,000,000 for each of the 5 fiscal years of
the project. Funding for the project shall be made
from the Federal Supplementary Medical Insurance
Trust Fund established under section 1841 of the
Social Security Act (42 U.S.C. 1395t).
(c) COVERAGE AS MEDICARE PART B SERVICES.—
(1) IN
GENERAL.—Subject to the succeeding
provisions of this subsection, medical nutrition ther-
apy services furnished under the project shall be
considered to be services covered under part B of
title XVIII of the Social Security Act.
(2) PAYMENT.—Payment for such services shall
be made at a rate of 80 percent of the lesser of the
actual charge for the services or 85 percent of the
amount determined under the fee schedule estab-
lished under section 1848(b) of the Social Security
Act (42 U.S.C. 1395w–4(b)) for the same services if
furnished by a physician.
(3) APPLICATION OF LIMITS ON BILLING.—The
provisions of section 1842(b)(18) of the Social Secu-
rity Act (42 U.S.C. 1395u(b)(18)) shall apply to a
registered dietitian or nutrition professional fur-
nishing services under the project in the same man-
ner as they to a practitioner described in subpara-
graph (C) of such section furnishing services under
title XVIII of such Act.
(d) REPORTS.—The Secretary shall submit to the
Committee on Ways and Means and the Committee on
Commerce of the House of Representatives and the Com-
mittee on Finance of the Senate interim reports on the
project and a final report on the project within 6 months
after the conclusion of the project. The final report shall
include an evaluation of the impact of the use of medical
nutrition therapy services on medicare beneficiaries and
on the medicare program, including any impact on reduc-
ing costs under the program and improving the health of
beneficiaries.
(e) DEFINITIONS.—For purposes of this section:
(1) MEDICAL
NUTRITION
THERAPY
SERV-
ICES.—The term ‘‘medical nutrition therapy serv-
ices’’ means nutritional diagnostic, therapy, and
counseling services for the purpose of disease man-
agement which are furnished by a registered dieti-
tian or nutrition professional (as defined in para-
graph (2)) pursuant to a referral by a physician (as
defined in section 1861(r)(1) of the Social Security
Act, 42 U.S.C. 1395x(r)(1)).
(2) REGISTERED
DIETITIAN
OR
NUTRITION
PROFESSIONAL.—
(A) IN
GENERAL.—Subject to subpara-
graph (B), the term ‘‘registered dietitian or nu-
trition professional’’ means an individual who—
(i) holds a baccalaureate or higher de-
gree granted by a regionally accredited col-
lege or university in the United States (or
an equivalent foreign degree) with comple-
tion of the academic requirements of a pro-
gram in nutrition or dietetics, as accred-
ited by an appropriate national accredita-
tion organization recognized by the Sec-
retary for this purpose;
(ii) has completed at least 900 hours
of supervised dietetics practice under the
supervision of a registered dietitian or nu-
trition professional; and
(iii)(I) is licensed or certified as a die-
titian or nutrition professional by the State
in which the services are performed, or
(II) in the case of an individual in a
State which does not provide for such li-
censure or certification, meets such other
criteria as the Secretary establishes.
(B) EXCEPTION.—Clauses (i) and (ii) of
subparagraph (A) shall not apply in the case of
an individual who as of the date of the enact-
ment of this Act is licensed or certified as a die-
titian or nutrition professional by the State in
which medical nutrition therapy services are
performed.
(3) SECRETARY.—The term ‘‘Secretary’’ means
Secretary of Health and Human Services.
TITLE II—OTHER MEDICARE
PART B PROVISIONS
Subtitle A—Access to Technology
SEC. 201. ANNUAL REPORTS ON NATIONAL COVERAGE DE-
TERMINATIONS.
(a) ANNUAL REPORTS.—Not later than December 1
of each year, beginning in 2001, the Secretary of Health
and Human Services shall submit to Congress a report
that sets forth a detailed compilation of the actual time
periods that were necessary to complete and fully imple-
ment any national coverage determinations that were
made in the previous fiscal year for items, services, or
medical devices not previously covered as a benefit under
title XVIII of the Social Security Act (42 U.S.C. 1395
et seq.), including, with respect to each new item, service,
or medical device, a statement of the time taken by the
Secretary to make the necessary coverage, coding, and
payment determinations, including the time taken to com-
plete each significant step in the process of making such
determinations.
(b) PUBLICATION OF REPORTS ON THE INTERNET.—
The Secretary of Health and Human Services shall pub-
lish each report submitted under subsection (a) on the
medicare Internet site of the Department of Health and
Human Services.
SEC. 202. NATIONAL LIMITATION AMOUNT EQUAL TO 100
PERCENT OF NATIONAL MEDIAN FOR NEW
CLINICAL 
LABORATORY 
TEST 
TECH-
NOLOGIES; FEE SCHEDULE FOR NEW CLIN-
ICAL LABORATORY TESTS.
(a) IN GENERAL.—Section 1833(h)(4)(B)(viii) (42
U.S.C. 1395l(h)(4)(B)(viii)) is amended by inserting be-
fore the period the following: ‘‘(or 100 percent of such me-
dian in the case of a clinical diagnostic laboratory test per-
formed on or after January 1, 2001, that the Secretary
determines is a new test for which no limitation amount
has previously been established under this subpara-
graph)’’.
(b) FEE
SCHEDULE
FOR
NEW
CLINICAL
LAB
TESTS.—
(1) ESTABLISHMENT OF FEE SCHEDULE FOR
NEW
TESTS.—Section 
1833(h)(1) 
(42 
U.S.C.
1395l(h)(1)) is amended—
(A) in subparagraph (B), by striking ‘‘In’’
and inserting ‘‘Except for tests described in
subparagraph (E), in’’; and
(B) by inserting at the end the following
new subparagraph:
‘‘(E) In the case of a clinical diagnostic laboratory
test which is described by a new code in the Health Care
Financing Administration Common Procedure Coding
System (commonly referred to as ‘HCPCS’), for which the
Secretary is not able to crosswalk with a similar test with
an established schedule amount, the Secretary shall estab-
lish for purposes of subparagraph (A) a single fee schedule
amount for all areas in the following manner:
‘‘(i) By not later than December 1 of each year,
beginning with 2001, the Secretary shall cause to
have published in the Federal Register (which may
include publication on an interim final rule basis
with a comment period) an interim fee schedule
amount for each such new test which shall apply for
such new tests furnished during the following year.
‘‘(ii) The interim fee schedule amount for each
such new test shall be subject to a comment period
of 60 days. The Secretary shall review comments
and data received and make appropriate adjustments
to the fee schedule for each test applicable beginning
with the following calendar year.
‘‘(iii) For years beginning with 2002, the Sec-
retary shall also cause to have published in the Fed-
eral Register by not later than December 1 of the
year prior to its application, the adjustments to the
interim fee schedule amount described in clause (ii)
for each such new test for which an interim fee
schedule amount was established for a year, includ-
ing adjustments to such fee schedule amounts in re-
sponse to comments.’’.
(2) CONFORMING
AMENDMENT
TO
UPDATE
PROVISION.—Section 
1833(h)(2)(A) 
(42 
U.S.C.
1395l(h)(2)(A)) is amended by striking ‘‘July 1,
1984,’’ and inserting the following: ‘‘July 1, 1984.
The fee schedules established under the previous
sentence and paragraph (1)(E)(3) shall be’’.
SEC. 203. CLARIFYING PROCESS AND STANDARDS FOR DE-
TERMINING ELIGIBILITY OF DEVICES FOR
PASS-THROUGH PAYMENTS UNDER HOSPITAL
OUTPATIENT PPS.
(a) IN GENERAL.—Section 1833(t)(6) (42 U.S.C.
1395l(t)(6)) is amended—
(1) by redesignating subparagraphs (C) and
(D) as subparagraphs (D) and (E), respectively; and
(2) by striking subparagraph (B) and inserting
the following:
‘‘(B) USE
OF
CATEGORIES
IN
DETER-
MINING ELIGIBILITY OF A DEVICE FOR PASS-
THROUGH PAYMENTS.—The Secretary shall de-
termine whether a medical device meets the re-
quirements of subparagraph (A)(iv) as follows:
‘‘(i) 
ESTABLISHMENT
OF
CAT-
EGORIES.—The Secretary shall establish
categories of medical devices based on type
of medical device as follows:
‘‘(I) IN
GENERAL.—The Sec-
retary shall establish criteria that will
be used for creation of categories
through rulemaking (which may in-
clude use of an interim final rule with
comment period). Such categories
shall be established in a manner such
that no medical device is described by
more than one category. Such criteria
shall include a test of whether the av-
erage cost of devices that would be in-
cluded in a category, as estimated by
the Secretary, is not insignificant as
described in paragraph (A)(iv)(II).
‘‘(II) INITIAL CATEGORIES.—The
categories to be applied as of the cat-
egory-based pass-through implementa-
tion date specified pursuant to sub-
clause (V) shall be established in a
manner such that each medical device
that meets the requirements of clause
(ii) or (iv) of subparagraph (A) as of
such date is included in a such a cat-
egory. For purposes of the preceding
sentence, whether a medical device
meets the requirements of clause (ii)
or (iv) of subparagraph (A) as of such
date shall be determined without re-
gard to clause (ii) of this subpara-
graph and on the basis of the pro-
gram memoranda issued before such
date identifying medical devices that
meet such requirements.
‘‘(III) ADDING
CATEGORIES.—
The Secretary shall promptly establish
a new category of medical device
under this clause for any medical de-
vice that meets the requirements of
subparagraph (A)(iv) and for which
none of the categories in effect or that
were previously in effect (as described
in subparagraph (C)(iii)) is appro-
priate. The Secretary shall only estab-
lish a new category for a medical de-
vice that is described by a category
that was previously in effect if the
Secretary determines, in accord with
criteria established under subclause
(I) of this clause, that the device rep-
resents a significant advance in med-
ical technology that is expected to sig-
nificantly improve the treatment of
Medicare beneficiaries.
(IV) DELETING
CATEGORIES.—
The Secretary shall delete a category
at the close of the period for which
the category is in effect (as described
in subparagraph (C)(iii)).
‘‘(V) 
CATEGORY-BASED
PASS-
THROUGH IMPLEMENTATION DATE.—
For purposes of this subparagraph
and subparagraph (C), the ‘category-
based pass-through implementation
date’ is a date specified by the Sec-
retary as of which the categories es-
tablished under this clause are first
used for purposes of clause (ii)(I).
Such date may not be later than July
1, 2000.
‘‘(ii) REQUIREMENTS
TREATED
AS
MET.—A medical device shall be treated as
meeting the requirements of subparagraph
(A)(iv) if—
‘‘(I) the device is described by a
category established under clause (i),
and
‘‘(II) an application under section
515 of the Federal Food, Drug, and
Cosmetic Act has been approved with
respect to the device, or the device has
been cleared for market under section
510(k) of such Act, or the device is
exempt from the requirements of sec-
tion 510(k) of such Act pursuant to
subsection (l) or (m) of section 510 of
such Act or section 520(g) of such
Act, without an additional require-
ment for application or prior ap-
proval.–––
‘‘(C) LIMITED PERIOD OF PAYMENT.—
‘‘(i) DRUGS AND BIOLOGICALS.—The
payment under this paragraph with respect
to a drug or biological shall only apply dur-
ing a period of at least 2 years, but not
more than 3 years, that begins—
‘‘(I) on the first date this sub-
section is implemented in the case of
a drug or biological described in
clause (i), (ii), or (iii) of subparagraph
(A) and in the case of a drug or bio-
logical described in subparagraph
(A)(iv) and for which payment under
this part is made as an outpatient
hospital service before such first date;
or
‘‘(II) in the case of a drug or bio-
logical described in subparagraph
(A)(iv) not described in subclause (I),
on the first date on which payment is
made under this part for the drug or
biological as an outpatient hospital
service.
‘‘(ii) MEDICAL
DEVICES.—Except as
provided in clause (iv), payment shall be
made under this paragraph with respect to
a medical device only if such device—
‘‘(I) is described by a category of
medical devices established under sub-
paragraph (B)(i); and
‘‘(II) is provided as part of a
service (or group of services) paid for
under this subsection and provided
during the period for which such cat-
egory is in effect (as described in
clause (iii)).
‘‘(iii) PERIOD FOR WHICH CATEGORY
IS IN EFFECT.—For purposes of this sub-
paragraph and subparagraph (B), a cat-
egory of medical devices established under
subparagraph (B)(i) shall be in effect for
a period of at least 2 years, but not more
than 3 years, that begins—
‘‘(I) in the case of a category es-
tablished 
under 
subparagraph
(B)(i)(II), on the first date on which
payment was made under this para-
graph for any device described by
such category (including payments
made during the period before the
category-based pass-through imple-
mentation date); and
‘‘(II) in the case of a category es-
tablished 
under 
subparagraph
(B)(i)(III), on the first date on which
payment is made under this para-
graph for any medical device that is
described by such category.
‘‘(iv) PAYMENTS MADE BEFORE CAT-
EGORY-BASED PASS-THROUGH IMPLEMEN-
TATION DATE.—
‘‘(I) in the case of a medical de-
vice provided as part of a service (or
group of services) paid for under this
subsection and provided during the
period beginning on the first date on
which the system under this sub-
section is implemented and ending on
(and including) the day before the
category-based pass-through imple-
mentation date specified pursuant to
subparagraph 
(B)(i)(V), 
payment
shall be made in accordance with the
provisions of this paragraph as in ef-
fect on the day before the date of the
enactment of this subparagraph; and
‘‘(II) notwithstanding subclause
(I), the Secretary shall make pay-
ments under this paragraph during
the period beginning one month after
the date of enactment of the Bene-
ficiary Improvement and Protection
Act of 2000 and ending on the same
ending date in subclause (I) with re-
spect to any medical device that is not
included in a program memorandum
referred to in subparagraph (B)(i)(II)
but that is substantially similar (other
than with respect to the restriction in
subparagraph (A)(iv)(I)) to devices
that are so included and that the Sec-
retary determines is likely to be de-
scribed by a initial category estab-
lished under such subparagraph.’’.
(b) CONFORMING AMENDMENTS.—Section 1833(t) is
further amended—
(1) in paragraph (6)(D) (as redesignated by
subsection 
(a)(1)), 
by 
striking 
‘‘subparagraph
(D)(iii)’’ in the matter preceding clause (i) and in-
serting ‘‘subparagraph (E)(iii)’’;
(2) in paragraph (12)(E), by striking ‘‘para-
graph (6)(B)’’ and inserting ‘‘paragraph (6)(C)’’;
(3) in paragraph (11)(E), by striking ‘‘addi-
tional payments (consistent with paragraph (6)(B))’’
and inserting ‘‘additional payments, the determina-
tion and deletion of initial and new categories (con-
sistent with subparagraphs (B) and (C) of para-
graph (6))’’; and
(4) in paragraph (6)(A), by striking ‘‘the cost
of the device, drug, or biological’’ and inserting ‘‘the
cost of the drug or biological or the average cost of
the category of devices’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall become effective on the date of the enact-
ment of this Act.
SEC. 204. ACCESS TO NEW TECHNOLOGIES APPLIED TO
SCREENING MAMMOGRAPHY TO ENHANCE
BREAST CANCER DETECTION.
(a) $15 INITIAL INCREASE IN PAYMENT LIMIT.—
Section 
1834(c)(3) 
(42 
U.S.C. 
1395m(c)(3)) 
is
amended—
(1) in subparagraph (A)—
(A) by striking ‘‘subparagraph (B)’’ and
inserting ‘‘subparagraphs (B) and (D)’’; and
(B) in clause (ii), by inserting ‘‘(taking
into account, if applicable, subparagraph (D))’’
after ‘‘for the preceding year’’; and
(2) by adding at the end the following new sub-
paragraph:
‘‘(D) INCREASE IN PAYMENT LIMIT FOR
NEW TECHNOLOGIES.—In the case of new tech-
nologies applied to screening mammography
performed beginning in 2001 and determined
by the Secretary to enhance the detection of
breast cancer, the limit applied under this para-
graph for 2001 shall be increased by $15.’’.
(b) CHANGE IN REVISION OF LIMIT.—Subparagraph
(B) of such section is amended—
(1) by striking ‘‘REDUCTION OF’’ and inserting
‘‘REVISIONS TO’’,
(2) by inserting ‘‘or new technologies described
in paragraph (1)(D)’’ after ‘‘1992’’, and
(3) by inserting ‘‘increase or’’ before ‘‘reduce’’.
(c) INCLUSION
OF
NEW
TECHNOLOGY.—Section
1861(jj) (42 U.S.C. 1395x(jj)) is amended by inserting
before the period at the end the following: ‘‘, as well as
new technology applied to such a procedure that the Sec-
retary determines enhances the detection of breast can-
cer’’.
(d) EFFECTIVE DATE.—The amendments made by
this section apply to mammography performed on or after
January 1, 2001.
Subtitle B—Provisions Relating to
Physicians Services
SEC. 211. GAO STUDY OF GASTROINTESTINAL ENDOSCOPIC
SERVICES FURNISHED IN PHYSICIANS OF-
FICES AND HOSPITAL OUTPATIENT DEPART-
MENT SERVICES.
(a) STUDY.—The Comptroller General of the United
States shall conduct a study on the appropriateness of fur-
nishing gastrointestinal endoscopic physicians services in
physicians offices. In conducting this study, the Comp-
troller General shall—
(1) review available scientific and clinical evi-
dence about the safety of performing procedures in
physicians offices and hospital outpatient depart-
ments;
(2) assess whether resource-based practice ex-
pense relative values established by the Secretary of
Health and Human Services under the Medicare
physician fee schedule under section 1848 of the So-
cial Security Act (42 U.S.C. 1395w–4) for gastro-
intestinal endoscopic services furnished in physicians
offices and hospital outpatient departments create
an incentive to furnish such services in physicians
offices instead of hospital outpatient departments;
and
(3) assess the implications for access to care for
Medicare beneficiaries if Medicare were not to cover
gastrointestinal endoscopic services in physicians of-
fices. –
(b) REPORT.—The Comptroller General shall submit
a report to Congress on such study no later than July
1, 2002 and include such recommendations as the Comp-
troller General determines to be appropriate.
SEC. 212. TREATMENT OF CERTAIN PHYSICIAN PATHOLOGY
SERVICES.
(a) IN GENERAL.—When an independent laboratory
furnishes the technical component of a physician pathol-
ogy service to a fee-for-service medicare beneficiary who
is a patient of a grandfathered hospital, the Secretary of
Health and Human Services shall treat such component
as a service for which payment shall be made to the lab-
oratory under section 1848 of the Social Security Act (42
U.S.C. 1395w–4) and not as an inpatient hospital service
for which payment is made to the hospital under section
1886(d) of such Act (42 U.S.C. 1395ww(d)) or as an out-
patient hospital service for which payment is made to the
hospital under section 1834(t) of such Act (42 U.S.C.
1395l(t)).
(b) DEFINITIONS.—For purposes of this section:
(1) GRANDFATHERED
HOSPITAL.—The term
‘‘grandfathered hospital’’ means a hospital that had
an arrangement with an independent laboratory that
was in effect as of July 22, 1999, under which a lab-
oratory furnished the technical component of physi-
cian pathology services to fee-for-service medicare
beneficiaries who were hospital patients and sub-
mitted claims for payment for such component to a
medicare carrier (and not to the hospital).
(2) 
FEE-FOR-SERVICE
MEDICARE
BENE-
FICIARY.—The term ‘‘fee-for-service medicare bene-
ficiary’’ means an individual who—
(A) is entitled to benefits under part A, or
enrolled under part B, of title XVIII of the So-
cial Security Act (42 U.S.C. 1395c et seq.); and
(B) 
is 
not 
enrolled 
in 
(i) 
a
Medicare+Choice plan under part C of such
title (42 U.S.C. 1395w–21 et seq.), (ii) a plan
offered by an eligible organization under section
1876 of such Act (42 U.S.C. 1395mm), (iii) a
program of all-inclusive care for the elderly
(PACE) under section 1898 of such Act, or (iv)
a 
social 
health 
maintenance 
organization
(SHMO) 
demonstration 
project 
established
under section 4018(b) of the Omnibus Budget
Reconciliation Act of 1987 (Public Law 100–
203).
(3) MEDICARE CARRIER.—The term ‘‘medicare
carrier’’ means an organization with a contract
under section 1842 of such Act (42 U.S.C. 1395u).
(c) EFFECTIVE DATE.—Subsection (a) applies to
services furnished during the 2-year period beginning on
January 1, 2001.
(d) GAO REPORT.—
(1) STUDY.—The Comptroller General of the
United States shall—
(A) analyze the types of hospitals that are
grandfathered under subsection (a); and
(B) study the effects of subsection (a) on
hospitals, laboratories, and medicare bene-
ficiaries access to physician pathology services.
(2) REPORT.—The Comptroller General shall
submit a report to Congress on such analysis and
study no later than July 1, 2002. The report shall
include recommendations about whether the provi-
sions of subsection (a) should apply after the 2-year
period under subsection (c) for grandfathered hos-
pitals for either (or both) inpatient and outpatient
hospital services and whether such subsection should
be extended to apply to other hospitals that have
similar characteristics to grandfathered hospitals.
SEC. 213. PHYSICIAN GROUP PRACTICE DEMONSTRATION.
Title XVIII is amended by inserting after section
1866 the following new sections:
‘‘DEMONSTRATION OF APPLICATION OF PHYSICIAN
VOLUME INCREASES TO GROUP PRACTICES
‘‘SEC. 1866A. (a) DEMONSTRATION PROGRAM AU-
THORIZED.—
‘‘(1) IN GENERAL.—The Secretary shall con-
duct demonstration projects to test and, if proven ef-
fective, expand the use of incentives to health care
groups participating in the program under this title
that—
‘‘(A) encourage coordination of the care
furnished to individuals under the programs
under parts A and B by institutional and other
providers, practitioners, and suppliers of health
care items and services;
‘‘(B) encourage investment in administra-
tive structures and processes to ensure efficient
service delivery; and
‘‘(C) reward physicians for improving
health outcomes.
‘‘(2) ADMINISTRATION BY CONTRACT.—Except
as otherwise specifically provided, the Secretary may
administer the program under this section in accord-
ance with section 1866B.
‘‘(3) DEFINITIONS.—For purposes of this sec-
tion, terms have the following meanings:
‘‘(A) PHYSICIAN.—Except as the Secretary
may otherwise provide, the term ‘physician’
means any individual who furnishes services
which may be paid for as physicians’ services
under this title .
‘‘(B) HEALTH
CARE
GROUP.—The term
‘health care group’ means a group of physicians
(as defined in subparagraph (A)) organized at
least in part for the purpose of providing physi-
cians’ services under this title. As the Secretary
finds appropriate, a health care group may in-
clude a hospital and any other individual or en-
tity furnishing items or services for which pay-
ment may be made under this title that is affili-
ated with the health care group under an ar-
rangement structured so that such individual or
entity participates in a demonstration under
this section and will share in any bonus earned
under subsection (d).
‘‘(b) ELIGIBILITY CRITERIA.—
‘‘(1) IN GENERAL.—The Secretary is authorized
to establish criteria for health care groups eligible to
participate in a demonstration under this section, in-
cluding criteria relating to numbers of health care
professionals in, and of patients served by, the
group, scope of services provided, and quality of
care.
‘‘(2) PAYMENT METHOD.—A health care group
participating in the demonstration under this section
shall agree with respect to services furnished to
beneficiaries within the scope of the demonstration
(as determined under subsection (c))—
‘‘(A) to be paid on a fee-for-service basis;
and
‘‘(B) that payment with respect to all such
services furnished by members of the health
care group to such beneficiaries shall (where de-
termined appropriate by the Secretary) be made
to a single entity.
‘‘(3) DATA REPORTING.—A health care group
participating in a demonstration under this section
shall report to the Secretary such data, at such
times and in such format as the Secretary require,
for purposes of monitoring and evaluation of the
demonstration under this section.
‘‘(c) PATIENTS WITHIN SCOPE
OF DEMONSTRA-
TION.—
‘‘(1) IN GENERAL.—The Secretary shall specify,
in accordance with this subsection, the criteria for
identifying those patients of a health care group who
shall be considered within the scope of the dem-
onstration under this section for purposes of applica-
tion of subsection (d) and for assessment of the ef-
fectiveness of the group in achieving the objectives
of this section.
‘‘(2) OTHER CRITERIA.—The Secretary may es-
tablish additional criteria for inclusion of bene-
ficiaries within a demonstration under this section,
which may include frequency of contact with physi-
cians in the group or other factors or criteria that
the Secretary finds to be appropriate.
‘‘(3) NOTICE REQUIREMENTS.—In the case of
each beneficiary determined to be within the scope
of a demonstration under this section with respect to
a specific health care group, the Secretary shall en-
sure that such beneficiary is notified of the incen-
tives, and of any waivers of coverage or payment
rules, applicable to such group under such dem-
onstration.
‘‘(d) INCENTIVES.—
‘‘(1) PERFORMANCE
TARGET.—The Secretary
shall establish for each health care group partici-
pating in a demonstration under this section—
‘‘(A) a base expenditure amount, equal to
the average total payments under parts A and
B for patients served by the health care group
on a fee-for-service basis in a base period deter-
mined by the Secretary; and
‘‘(B) an annual per capita expenditure tar-
get for patients determined to be within the
scope of the demonstration, reflecting the base
expenditure amount adjusted for risk and ex-
pected growth rates.
‘‘(2) INCENTIVE BONUS.—The Secretary shall
pay to each participating health care group (subject
to paragraph (4)) a bonus for each year under the
demonstration equal to a portion of the Medicare
savings realized for such year relative to the per-
formance target.
‘‘(3) ADDITIONAL
BONUS
FOR
PROCESS
AND
OUTCOME
IMPROVEMENTS.—At such time as the
Secretary has established appropriate criteria based
on evidence the Secretary determines to be suffi-
cient, the Secretary shall also pay to a participating
health care group (subject to paragraph (4)) an ad-
ditional bonus for a year, equal to such portion as
the Secretary may designate of the saving to the
program under this title resulting from process im-
provements made by and patient outcome improve-
ments attributable to activities of the group.
‘‘(4) LIMITATION.—The Secretary shall limit
bonus payments under this section as necessary to
ensure that the aggregate expenditures under this
title (inclusive of bonus payments) with respect to
patients within the scope of the demonstration do
not exceed the amount which the Secretary esti-
mates would be expended if the demonstration
projects under this section were not implemented.
‘‘PROVISIONS FOR ADMINISTRATION OF DEMONSTRATION
PROGRAM
‘‘SEC. 1866B. (a) GENERAL ADMINISTRATIVE AU-
THORITY.—
‘‘(1) BENEFICIARY
ELIGIBILITY.—Except as
otherwise provided by the Secretary, an individual
shall only be eligible to receive benefits under the
program under section 1866A (in this section re-
ferred to as the ‘demonstration program’) if such
individual—
‘‘(A) is enrolled in under the program
under part B and entitled to benefits under
part A; and
‘‘(B) is not enrolled in a Medicare+Choice
plan under part C, an eligible organization
under a contract under section 1876 (or a simi-
lar organization operating under a demonstra-
tion project authority), an organization with an
agreement under section 1833(a)(1)(A), or a
PACE program under section 1894.
‘‘(2) SECRETARY’S DISCRETION AS TO SCOPE
OF PROGRAM.—The Secretary may limit the imple-
mentation of the demonstration program to—
‘‘(A) a geographic area (or areas) that the
Secretary designates for purposes of the pro-
gram, based upon such criteria as the Secretary
finds appropriate;
‘‘(B) a subgroup (or subgroups) of bene-
ficiaries or individuals and entities furnishing
items or services (otherwise eligible to partici-
pate in the program), selected on the basis of
the number of such participants that the Sec-
retary finds consistent with the effective and ef-
ficient implementation of the program;
‘‘(C) an element (or elements) of the pro-
gram that the Secretary determines to be suit-
able for implementation; or
‘‘(D) any combination of any of the limits
described in subparagraphs (A) through (C).
‘‘(3) VOLUNTARY
RECEIPT
OF
ITEMS
AND
SERVICES.—Items and services shall be furnished to
an individual under the demonstration program only
at the individual’s election.
‘‘(4) AGREEMENTS.—The Secretary is author-
ized to enter into agreements with individuals and
entities to furnish health care items and services to
beneficiaries under the demonstration program.
‘‘(5) PROGRAM
STANDARDS
AND
CRITERIA.—
The Secretary shall establish performance standards
for the demonstration program including, as applica-
ble, standards for quality of health care items and
services, cost-effectiveness, beneficiary satisfaction,
and such other factors as the Secretary finds appro-
priate. The eligibility of individuals or entities for
the initial award, continuation, and renewal of
agreements to provide health care items and services
under the program shall be conditioned, at a min-
imum, on performance that meets or exceeds such
standards.
‘‘(6) ADMINISTRATIVE REVIEW OF DECISIONS
AFFECTING
INDIVIDUALS
AND
ENTITIES
FUR-
NISHING
SERVICES.—An individual or entity fur-
nishing services under the demonstration program
shall be entitled to a review by the program adminis-
trator (or, if the Secretary has not contracted with
a program administrator, by the Secretary) of a de-
cision not to enter into, or to terminate, or not to
renew, an agreement with the entity to provide
health care items or services under the program.
‘‘(7) SECRETARY’S REVIEW OF MARKETING MA-
TERIALS.—An agreement with an individual or enti-
ty furnishing services under the demonstration pro-
gram shall require the individual or entity to guar-
antee that it will not distribute materials marketing
items or services under the program without the
Secretary’s prior review and approval;
‘‘(8) PAYMENT IN FULL.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), an individual or entity re-
ceiving payment from the Secretary under a
contract or agreement under the demonstration
program shall agree to accept such payment as
payment in full, and such payment shall be in
lieu of any payments to which the individual or
entity would otherwise be entitled under this
title.
‘‘(B) COLLECTION OF DEDUCTIBLES AND
COINSURANCE.—Such individual or entity may
collect any applicable deductible or coinsurance
amount from a beneficiary.
‘‘(b) CONTRACTS FOR PROGRAM ADMINISTRATION.—
‘‘(1) IN GENERAL.—The Secretary may admin-
ister the demonstration program through a contract
with a program administrator in accordance with the
provisions of this subsection.
‘‘(2) SCOPE OF PROGRAM ADMINISTRATOR CON-
TRACTS.—The Secretary may enter into such con-
tracts for a limited geographic area, or on a regional
or national basis.
‘‘(3) ELIGIBLE CONTRACTORS.—The Secretary
may contract for the administration of the program
with—
‘‘(A) an entity that, under a contract
under section 1816 or 1842, determines the
amount of and makes payments for health care
items and services furnished under this title; or
‘‘(B) any other entity with substantial ex-
perience in managing the type of program con-
cerned.
‘‘(4) CONTRACT AWARD, DURATION, AND RE-
NEWAL.—
‘‘(A) IN GENERAL.—A contract under this
subsection shall be for an initial term of up to
three years, renewable for additional terms of
up to three years.
‘‘(B) NONCOMPETITIVE
AWARD
AND
RE-
NEWAL FOR ENTITIES ADMINISTERING PART A
OR
PART
B
PAYMENTS.—The Secretary may
enter or renew a contract under this subsection
with an entity described in paragraph (3)(A)
without regard to the requirements of section 5
of title 41, United States Code.
‘‘(5) APPLICABILITY OF FEDERAL ACQUISITION
REGULATION.—The Federal Acquisition Regulation
shall apply to program administration contracts
under this subsection.
‘‘(6) PERFORMANCE
STANDARDS.—The Sec-
retary shall establish performance standards for the
program administrator including, as applicable,
standards for the quality and cost-effectiveness of
the program administered, and such other factors as
the Secretary finds appropriate. The eligibility of en-
tities for the initial award, continuation, and renewal
of program administration contracts shall be condi-
tioned, at a minimum, on performance that meets or
exceeds such standards.
‘‘(7) 
FUNCTIONS
OF
PROGRAM
ADMINIS-
TRATOR.—A program administrator shall perform
any or all of the following functions, as specified by
the Secretary:
‘‘(A) AGREEMENTS WITH ENTITIES FUR-
NISHING
HEALTH
CARE
ITEMS
AND
SERV-
ICES.—Determine the qualifications of entities
seeking to enter or renew agreements to provide
services under the program, and as appropriate
enter or renew (or refuse to enter or renew)
such agreements on behalf of the Secretary.
‘‘(B) 
ESTABLISHMENT
OF
PAYMENT
RATES.—Negotiate or otherwise establish, sub-
ject to the Secretary’s approval, payment rates
for covered health care items and services.
‘‘(C) PAYMENT OF CLAIMS OR FEES.—Ad-
minister payments for health care items or serv-
ices furnished under the program.
‘‘(D) PAYMENT OF BONUSES.—Using such
guidelines as the Secretary shall establish, and
subject to the approval of the Secretary, make
bonus payments as described in subsection
(c)(2)(A)(ii) to entities furnishing items or serv-
ices for which payment may be made under the
program.
‘‘(E) OVERSIGHT.—Monitor the compli-
ance of individuals and entities with agreements
under the program with the conditions of par-
ticipation.
‘‘(F) ADMINISTRATIVE REVIEW.—Conduct
reviews of adverse determinations specified in
subsection (a)(6).
‘‘(G) REVIEW
OF
MARKETING
MATE-
RIALS.—Conduct a review of marketing mate-
rials proposed by an entity furnishing services
under the program.
‘‘(H) ADDITIONAL
FUNCTIONS.—Perform
such other functions as the Secretary may
specify.
‘‘(8) LIMITATION
OF
LIABILITY.—The provi-
sions of section 1157(b) shall apply with respect to
activities of contractors and their officers, employ-
ees, and agents under a contract under this sub-
section.
‘‘(9) INFORMATION SHARING.—Notwithstanding
section 1106 and section 552a of title 5, United
States Code, the Secretary is authorized to disclose
to an entity with a program administration contract
under this subsection such information (including
medical information) on individuals receiving health
care items and services under the program as the
entity may require to carry out its responsibilities
under the contract.
‘‘(c) RULES
APPLICABLE
TO
BOTH
PROGRAM
AGREEMENTS
AND
PROGRAM
ADMINISTRATION
CON-
TRACTS.—
‘‘(1) RECORDS, REPORTS, AND AUDITS.—The
Secretary is authorized to require entities with
agreements to provide health care items or services
under the demonstration program, and entities with
program administration contracts under subsection
(b), to maintain adequate records, to afford the Sec-
retary access to such records (including for audit
purposes), and to furnish such reports and other
materials (including audited financial statements
and performance data) as the Secretary may require
for purposes of implementation, oversight, and eval-
uation of the program and of individuals’ and enti-
ties’ effectiveness in performance of such agreements
or contracts.
‘‘(2) BONUSES.—Notwithstanding any other
provision of law, but subject to subparagraph
(B)(ii), the Secretary may make bonus payments
under the program from the Federal Health Insur-
ance Trust Fund and the Federal Supplementary
Medical Insurance Trust Fund in amounts that do
not exceed the amounts authorized under the pro-
gram in accordance with the following:
‘‘(A) PAYMENTS
TO
PROGRAM
ADMINIS-
TRATORS.—The Secretary may make bonus
payments under the program to program ad-
ministrators.
‘‘(B) PAYMENTS TO ENTITIES FURNISHING
SERVICES.—
‘‘(i) IN GENERAL.—Subject to clause
(ii), the Secretary may make bonus pay-
ments to individuals or entities furnishing
items or services for which payment may
be made under the program, or may au-
thorize the program administrator to make
such bonus payments in accordance with
such guidelines as the Secretary shall es-
tablish and subject to the Secretary’s ap-
proval.
‘‘(ii) LIMITATIONS.—The Secretary
may condition such payments on the
achievement of such standards related to
efficiency, improvement in processes or
outcomes of care, or such other factors as
the Secretary determines to be appropriate.
‘‘(3) ANTIDISCRIMINATION
LIMITATION.—The
Secretary shall not enter into an agreement with an
entity to provide health care items or services under
the program, or with an entity to administer the
program, unless such entity guarantees that it will
not deny, limit, or condition the coverage or provi-
sion of benefits under the program, for individuals
eligible to be enrolled under such program, based on
any health status-related factor described in section
2702(a)(1) of the Public Health Service Act.
‘‘(d) LIMITATIONS ON JUDICIAL REVIEW.—The fol-
lowing actions and determinations with respect to the
demonstration program shall not be subject to review by
a judicial or administrative tribunal:
‘‘(1) Limiting the implementation of the pro-
gram under subsection (a)(2).
‘‘(2) Establishment of program participation
standards under subsection (a)(5) or the denial or
termination of, or refusal to renew, an agreement
with an entity to provide health care items and serv-
ices under the program.
‘‘(3) Establishment of program administration
contract performance standards under subsection
(b)(6), the refusal to renew a program administra-
tion contract, or the noncompetitive award or re-
newal of a program administration contract under
subsection (b)(4)(B).
‘‘(4) Establishment of payment rates, through
negotiation or otherwise, under a program agree-
ment or a program administration contract.
‘‘(5) A determination with respect to the pro-
gram (where specifically authorized by the program
authority or by subsection (c)(2))—
‘‘(A) as to whether cost savings have been
achieved, and the amount of savings; or
‘‘(B) as to whether, to whom, and in what
amounts bonuses will be paid.
‘‘(e) APPLICATION LIMITED TO PARTS A AND B.—
None of the provisions of this section or of the demonstra-
tion program shall apply to the programs under part C.
‘‘(f) REPORTS TO CONGRESS.—Not later than two
years after the date of enactment of this section, and bien-
nially thereafter for six years, the Secretary shall report
to the Congress on the use of authorities under the dem-
onstration program. Each report shall address the impact
of the use of those authorities on expenditures, access, and
quality under the programs under this title.’’.
SEC. 214. DESIGNATION OF SEPARATE CATEGORY FOR
INTERVENTIONAL PAIN MANAGEMENT PHY-
SICIANS.
With respect to services furnished on or after Janu-
ary 1, 2002, the Secretary of Health and Human Services
shall 
provide 
for 
the 
designation 
under 
section
1848(c)(3)(A) of the Social Security Act (42 U.S.C.
1395w–4(c)(3)(A)) of interventional pain management
physicians as a separate category of physician specialists.
SEC. 215. EVALUATION OF ENROLLMENT PROCEDURES
FOR MEDICAL GROUPS THAT RETAIN INDE-
PENDENT CONTRACTOR PHYSICIANS.
(a) IN GENERAL.—The Secretary of Health and
Human Services shall conduct an evaluation of the current
medicare enrollment process for medical groups that re-
tain independent contractor physicians with particular em-
phasis on hospital-based physicians, such as emergency
department staffing groups. In conducting the evaluation,
the Secretary shall—
(1) review the increase of individual medicare
provider numbers issued and the possible medicare
program integrity vulnerabilities of the current proc-
ess;
(2) assess how program integrity could be en-
hanced by the enrollment of groups that retain inde-
pendent contractor hospital-based physicians; and
(3) develop suggested procedures for the enroll-
ment of these groups.
(b) REPORT.—Not later than 1 year after the date
of the enactment of this Act, the Secretary shall submit
to Congress a report on the evaluation conducted under
subsection (a).
Subtitle C—Other Services
SEC. 221. 3-YEAR MORATORIUM ON SNF PART B CONSOLI-
DATED BILLING REQUIREMENTS.
(a) MORATORIUM
IN APPLICATION
OF CONSOLI-
DATED BILLING TO SNF RESIDENTS IN NON-COVERED
STAYS.—Section 
1842(b)(6)(E) 
(42 
U.S.C.
1395u(b)(6)(E)) is amended by inserting ‘‘(on or after Oc-
tober 1, 2003)’’ after ‘‘furnished to an individual’’.
(b) MORATORIUM IN PROVIDER AGREEMENT PROVI-
SION.—Section 
1866(a)(1)(H)(ii)(I) 
(42 
U.S.C.
1395cc(a)(1)(H)(ii)(I) is amended by inserting ‘‘in the
case of a resident who is in a stay covered under part
A, and for services furnished on or after October 1, 2003,
in the case of a resident who is not in a stay covered under
such part’’ before the comma.
(c) MORATORIUM IN REQUIREMENT FOR SNF BILL-
ING
OF PART B SERVICES.—Section 1862(a)(18) (42
U.S.C. 1395y(a)(18)) is amended to read as follows:
‘‘(18) which are covered skilled nursing facility
services described in section 1888(e)(2)(A)(i) and
which are furnished to an individual who is a
resident—
‘‘(A) of a skilled nursing facility in the
case of a resident who is in a stay covered
under part A; or
‘‘(B) of a skilled nursing facility or of a
part of a facility that includes a skilled nursing
facility (as determined under regulations) for
services furnished on or after October 1, 2003,
in the case of a resident who is not in a stay
covered under such part,
by an entity other than the skilled nursing facility,
unless the services are furnished under arrange-
ments (as defined in section 1861(w)(1)) with the
entity made by the skilled nursing facility;’’.
(d) EFFECTIVE DATE.—The amendments made by
subsections (a), (b) and (c) are effective as if included in
the enactment of BBA.
(e) REPORT.—Not later than October 1, 2002, the
Comptroller General of the United States shall submit to
Congress a report that includes an analysis and rec-
ommendations on—
(1) alternatives, if any, to consolidated billing
for part B items and services described in section
1842(b)(6) of the Social Security Act (42 U.S.C.
1395u(b)(6)) to ensure accountability by skilled
nursing facilities and accuracy in claims submitted
for all services and items provided to skilled nursing
facility residents under part B of the medicare pro-
gram;
(2) the costs expected to be incurred by skilled
nursing facilities under such alternative approaches,
compared with the costs associated with the imple-
mentation of consolidated billing; and
(3) the costs incurred by the medicare program
in implementing such alternative approaches and
their effect on utilization review, compared with the
costs and effect on utilization review expected with
consolidated billing.
SEC. 222. AMBULATORY SURGICAL CENTERS.
(a) DELAY IN IMPLEMENTATION OF PROSPECTIVE
PAYMENT SYSTEM.—The Secretary of Health and Human
Services may not implement a revised prospective payment
system for services of ambulatory surgical facilities under
section 1833(i) of the Social Security Act (42 U.S.C.
1395l(i)) before January 1, 2002.
(b) EXTENDING PHASE-IN TO 4 YEARS.—Section
226 of the BBRA is amended by striking paragraphs (1)
and (2) and inserting the following:
‘‘(1) in the first year of its implementation,
only a proportion (specified by the Secretary and not
to exceed 1⁄4) of the payment for such services shall
be made in accordance with such system and the re-
mainder shall be made in accordance with current
regulations; and
‘‘(2) in each of the following 2 years a propor-
tion (specified by the Secretary and not to exceed
1⁄2, and 3⁄4, respectively) of the payment for such
services shall be made under such system and the
remainder shall be made in accordance with current
regulations.’’.
(c) DEADLINE FOR USE OF 1999 OR LATER COST
SURVEYS.—Section 226(c) of BBRA is amended by add-
ing at the end the following:
‘‘By not later than January 1, 2003, the Secretary shall
incorporate data from a 1999 Medicare cost survey or a
subsequent cost survey for purposes of implementing or
revising such system.’’.
SEC. 223. 1-YEAR EXTENSION OF MORATORIUM ON THER-
APY CAPS.
(a) IN GENERAL.—Section 1833(g)(4) (42 U.S.C.
1395l(g)), as added by section 221(a) of BBRA, is amend-
ed by striking ‘‘and 2001’’ and inserting ‘‘, 2001, and
2002’’.
(b) CONFORMING AMENDMENT TO CONTINUE FO-
CUSED MEDICAL REVIEWS OF CLAIMS DURING MORATO-
RIUM PERIOD.—Section 221(a)(2) of BBRA is amended
by striking ‘‘(under the amendment made by paragraph
(1)(B))’’.
SEC. 224. REVISION OF MEDICARE REIMBURSEMENT FOR
TELEHEALTH SERVICES.
Section 4206 of the Balanced Budget Act of 1997
(42 U.S.C. 1395l note) is amended to read as follows:
‘‘(a) TELEHEALTH SERVICES REIMBURSED.—
‘‘(1) IN
GENERAL.—Not later than April 1,
2001, the Secretary of Health and Human Services
shall make payments from the Federal Supple-
mentary Medical Insurance Trust Fund in accord-
ance with the methodology described in subsection
(b) for services for which payment may be made
under part B of title XVIII of the Social Security
Act (42 U.S.C. 1395j et seq.) that are furnished via
a telecommunications system by a physician or prac-
titioner to an eligible telehealth beneficiary.
‘‘(2) USE
OF
STORE-AND-FORWARD
TECH-
NOLOGIES.—For purposes of paragraph (1), in the
case of any Federal telemedicine demonstration pro-
gram in Alaska or Hawaii, the term ‘telecommuni-
cations system’ includes store-and-forward tech-
nologies that provide for the asynchronous trans-
mission of health care information in single or multi-
media formats.
‘‘(b) METHODOLOGY FOR DETERMINING AMOUNT OF
PAYMENTS.—
‘‘(1) IN GENERAL.—The Secretary shall make
payment under this section as follows:
‘‘(A) Subject to subparagraph (B), with re-
spect to a physician or practitioner located at a
distant site that furnishes a service to an eligi-
ble medicare beneficiary under subsection (a),
an amount equal to the amount that such phy-
sician or practitioner would have been paid had
the service been furnished without the use of a
telecommunications system.
‘‘(B) With respect to an originating site, a
facility fee equal to—
‘‘(i) for 2001 (beginning with April 1,
2001) and 2002, $20; and
‘‘(ii) for a subsequent year, the facil-
ity fee under this subsection for the pre-
vious year increased by the percentage in-
crease in the MEI (as defined in section
1842(i)(3)) for such subsequent year.
‘‘(2) APPLICATION
OF
PART
B
COINSURANCE
AND DEDUCTIBLE.—Any payment made under this
section shall be subject to the coinsurance and de-
ductible requirements under subsections (a)(1) and
(b) of section 1833 of the Social Security Act (42
U.S.C. 1395l).
‘‘(3) APPLICATION OF NONPARTICIPATING PHY-
SICIAN
PAYMENT
DIFFERENTIAL
AND
BALANCE
BILLING LIMITS.—The payment differential of sec-
tion 1848(a)(3) of such Act (42 U.S.C. 1395w–
4(a)(3)) shall apply to services furnished by non-par-
ticipating physicians. The provisions of section
1848(g) of such Act (42 U.S.C. 1395w–4(g)) and
section 1842(b)(18) of such Act (42 U.S.C.
1395u(b)(18)) shall apply. Payment for such service
shall be increased annually by the update factor for
physicians’ 
services 
determined 
under 
section
1848(d) of such Act (42 U.S.C. 1395w–4(d)).
‘‘(c) TELEPRESENTER NOT REQUIRED.—Nothing in
this section shall be construed as requiring an eligible tele-
health beneficiary to be presented by a physician or practi-
tioner at the originating site for the furnishing of a service
via a telecommunications system, unless it is medically
necessary as determined by the physician or practitioner
at the distant site.
‘‘(d) COVERAGE OF ADDITIONAL SERVICES.—
‘‘(1) STUDY
AND
REPORT
ON
ADDITIONAL
SERVICES.—
‘‘(A) STUDY.—The Secretary of Health
and Human Services shall conduct a study to
identify services in addition to those described
in subsection (a)(1) that are appropriate for
payment under this section.
‘‘(B) REPORT.—Not later than 2 years
after the date of enactment of this Act, the Sec-
retary shall submit to Congress a report on the
study conducted under subparagraph (A) to-
gether with such recommendations for legisla-
tion that the Secretary determines are appro-
priate.
‘‘(2) IN GENERAL.—The Secretary shall provide
for payment under this section for services identified
in paragraph (1).
‘‘(e) CONSTRUCTION RELATING TO HOME HEALTH
SERVICES.—
‘‘(1) IN GENERAL.—Nothing in this section or
in section 1895 of the Social Security Act (42
U.S.C. 1395fff) shall be construed as preventing a
home health agency furnishing a home health unit of
service for which payment is made under the pro-
spective payment system established in such section
for such units of service from furnishing the service.
‘‘(2) LIMITATION.—The Secretary shall not
consider a home health service provided in the man-
ner described in paragraph (1) to be a home health
visit for purposes of—
‘‘(A) determining the amount of payment
to be made under such prospective payment
system; or
‘‘(B) any requirement relating to the cer-
tification of a physician required under section
1814(a)(2)(C) 
of 
such 
Act 
(42 
U.S.C.
1395f(a)(2)(C)).
‘‘(f) COVERAGE OF ITEMS AND SERVICES.—
‘‘(1) IN GENERAL.—Subject to paragraph (2),
payment for items and services provided pursuant to
subsection (a) shall include payment for professional
consultations, office visits, office psychiatry services,
including any service identified as of July 1, 2000,
by HCPCS codes 99241–99275, 99201–99215,
90804–90809, and 90862, and any additional item
or service specified by the Secretary.
‘‘(2) YEARLY
UPDATE.—The Secretary shall
provide a process that provides, on at least an an-
nual basis, for the review and revision of services
(and HCPCS codes) to those specified in paragraph
(1) for authorized payment under subsection (a).
‘‘(g) DEFINITIONS.—In this section:
‘‘(1) ELIGIBLE TELEHEALTH BENEFICIARY.—
The term ‘eligible telehealth beneficiary’ means an
individual enrolled under part B of title XVIII of the
Social Security Act (42 U.S.C. 1395j et seq.) that
receives a service originating—
‘‘(A) in an area that is designated as a
health professional shortage area under section
332(a)(1)(A) of the Public Health Service Act
(42 U.S.C. 254e(a)(1)(A));
‘‘(B) in a county that is not included in a
Metropolitan Statistical Area;
‘‘(C) effective January 1, 2002, in an
inner-city area that is medically underserved (as
defined in section 330(b)(3) of the Public
Health Service Act (42 U.S.C. 254b(b)(3))); or
they receive benefits on a fee-for-service basis
or through a managed care entity)’’; and
(C) in subsection (b)(3)(A)(i), by inserting
after ‘‘under a State plan under this title’’ the
following: ‘‘(regardless of whether the services
were furnished on a fee-for-service basis or
through a managed care entity)’’.
(3) EFFECTIVE DATE.—The amendments made
by paragraph (1) apply to payments made for peri-
ods on or after January 1, 2001.
SEC. 502. NEW PROSPECTIVE PAYMENT SYSTEM FOR FED-
ERALLY-QUALIFIED HEALTH CENTERS AND
RURAL HEALTH CLINICS.
(a) IN
GENERAL.—Section 1902(a) (42 U.S.C.
1396a(a)) is amended—
(1) in paragraph (13)—
(A) in subparagraph (A), by adding ‘‘and’’
at the end;
(B) in subparagraph (B), by striking
‘‘and’’ at the end; and
(C) by striking subparagraph (C); and
(2) by inserting after paragraph (14) the fol-
lowing new paragraph: