208 
plification program under such subsection so as to 
eliminate the coverage of the part B deductible for 
any medical supplemental policy sold or issued under 
such program to a newly eligible Medicare bene-
ficiary on or after January 1, 2020. 
‘‘(4) TREATMENT OF REFERENCES TO CERTAIN 
POLICIES.—In the case of a newly eligible Medicare 
beneficiary, except as the Secretary may otherwise 
provide, any reference in this section to a medicare 
supplemental policy which has a benefit package 
classified as ‘C’ or ‘F’ shall be deemed, as of Janu-
ary 1, 2020, to be a reference to a medicare supple-
mental policy which has a benefit package classified 
as ‘D’ or ‘G’, respectively. 
‘‘(5) ENFORCEMENT.—The penalties described 
in clause (ii) of subsection (d)(3)(A) shall apply with 
respect to a violation of paragraph (1) in the same 
manner as it applies to a violation of clause (i) of 
such subsection.’’. 
SEC. 402. INCOME-RELATED PREMIUM ADJUSTMENT FOR 
PARTS B AND D. 
(a) IN GENERAL.—Section 1839(i)(3)(C)(i) of the 
Social Security Act (42 U.S.C. 1395r(i)(3)(C)(i)) is 
amended— 
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(1) by inserting after ‘‘IN GENERAL.—’’ the fol-
lowing: 
‘‘(I) Subject to paragraphs (5) 
and (6), for years before 2018:’’; and 
(2) by adding at the end the following: 
‘‘(II) Subject to paragraph (5), 
for years beginning with 2018: 
‘‘If the modified adjusted gross income is: 
The applicable 
percentage is:
More than $85,000 but not more than $107,000 ......
35 percent
More than $107,000 but not more than $133,500 ....
50 percent
More than $133,500 but not more than $160,000 ....
65 percent
More than $160,000 ...................................................
80 percent.’’. 
(b) CONFORMING AMENDMENTS.—Section 1839(i) of 
the Social Security Act (42 U.S.C. 1395r(i)) is amended— 
(1) in paragraph (2)(A), by inserting ‘‘(or, be-
ginning with 2018, $85,000)’’ after ‘‘$80,000’’; 
(2) in paragraph (3)(A)(i), by inserting ‘‘appli-
cable’’ before ‘‘table’’; 
(3) in paragraph (5)(A)— 
(A) in the matter before clause (i), by in-
serting ‘‘(other than 2018 and 2019)’’ after 
‘‘2007’’; and 
(B) in clause (ii), by inserting ‘‘(or, in the 
case of a calendar year beginning with 2020, 
August 2018)’’ after ‘‘August 2006’’; and 
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(4) in paragraph (6), in the matter before sub-
paragraph (A), by striking ‘‘2019’’ and inserting 
‘‘2017’’. 
Subtitle B—Other Offsets 
SEC. 411. MEDICARE PAYMENT UPDATES FOR POST-ACUTE 
PROVIDERS. 
(a) SNFS.—Section 1888(e) of the Social Security 
Act (42 U.S.C. 1395yy(e))— 
(1) in paragraph (5)(B)— 
(A) in clause (i), by striking ‘‘clause (ii)’’ 
and inserting ‘‘clauses (ii) and (iii)’’; 
(B) in clause (ii), by inserting ‘‘subject to 
clause (iii),’’ after ‘‘each subsequent fiscal 
year,’’; and 
(C) by adding at the end the following new 
clause: 
‘‘(iii) SPECIAL
RULE
FOR
FISCAL 
YEAR 2018.—For fiscal year 2018 (or other 
similar annual period specified in clause 
(i)), the skilled nursing facility market bas-
ket percentage, after application of clause 
(ii), is equal to 1 percent.’’; and 
(2) in paragraph (6)(A)(i), by striking ‘‘para-
graph (5)(B)(ii)’’ and inserting ‘‘clauses (ii) and (iii) 
of paragraph (5)(B)’’. 
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211 
(b) IRFS.—Section 1886(j) of the Social Security Act 
(42 U.S.C. 1395ww(j)) is amended— 
(1) in paragraph (3)(C)— 
(A) in clause (i), by striking ‘‘clause (ii)’’ 
and inserting ‘‘clauses (ii) and (iii)’’; 
(B) in clause (ii), by striking ‘‘After’’ and 
inserting ‘‘Subject to clause (iii), after’’; and 
(C) by adding at the end the following new 
clause: 
‘‘(iii) SPECIAL
RULE
FOR
FISCAL 
YEAR 2018.—The increase factor to be ap-
plied under this subparagraph for fiscal 
year 2018, after the application of clause 
(ii), shall be 1 percent.’’; and 
(2) in paragraph (7)(A)(i), by striking ‘‘para-
graph (3)(D)’’ and inserting ‘‘subparagraphs (C)(iii) 
and (D) of paragraph (3)’’. 
(c) HHAS.—Section 1895(b)(3)(B) of the Social Se-
curity Act (42 U.S.C. 1395fff(b)(3)(B)) is amended— 
(1) in clause (iii), by adding at the end the fol-
lowing: ‘‘Notwithstanding the previous sentence, the 
home health market basket percentage increase for 
2018 shall be 1 percent.’’; and 
(2) in clause (vi)(I), by inserting ‘‘(except 
2018)’’ after ‘‘each subsequent year’’. 
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212 
(d) HOSPICE.—Section 1814(i) of the Social Security 
Act (42 U.S.C. 1395f(i)) is amended— 
(1) in paragraph (1)(C)— 
(A) in clause (ii)(VII), by striking ‘‘clause 
(iv),,’’ and inserting ‘‘clauses (iv) and (vi),’’; 
(B) in clause (iii), by striking ‘‘clause 
(iv),’’ and inserting ‘‘clauses (iv) and (vi),’’; 
(C) in clause (iv), by striking ‘‘After deter-
mining’’ and inserting ‘‘Subject to clause (vi), 
after determining’’; and 
(D) by adding at the end the following new 
clause: 
‘‘(vi) For fiscal year 2018, the market basket per-
centage increase under clause (ii)(VII) or (iii), as applica-
ble, after application of clause (iv), shall be 1 percent.’’; 
and 
(2) in paragraph (5)(A)(i), by striking ‘‘para-
graph (1)(C)(iv)’’ and inserting ‘‘clauses (iv) and 
(vi) of paragraph (1)(C)’’. 
(e) LTCHS.—Section 1886(m)(3) of the Social Secu-
rity Act (42 U.S.C. 1395ww(m)(3)) is amended— 
(1) in subparagraph (A), in the matter pre-
ceding clause (i), by striking ‘‘In implementing’’ and 
inserting ‘‘Subject to subparagraph (C), in imple-
menting’’; and 
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213 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(C) ADDITIONAL
SPECIAL
RULE.—For 
fiscal year 2018, the annual update under sub-
paragraph (A) for the fiscal year, after applica-
tion of clauses (i) and (ii) of subparagraph (A), 
shall be 1 percent.’’. 
SEC. 412. DELAY OF REDUCTION TO MEDICAID DSH ALLOT-
MENTS. 
Section 1923(f) of the Social Security Act (42 U.S.C. 
1396r–4(f)) is amended— 
(1) in paragraph (7)(A)— 
(A) in clause (i), by striking ‘‘2017 
through 2024’’ and inserting ‘‘2018 through 
2025’’; 
(B) by striking clause (ii) and inserting the 
following new clause: 
‘‘(ii) AGGREGATE REDUCTIONS.—The 
aggregate reductions in DSH allotments 
for all States under clause (i)(I) shall be 
equal to— 
‘‘(I) $2,000,000,000 for fiscal 
year 2018; 
‘‘(II) $3,000,000,000 for fiscal 
year 2019; 
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‘‘(III) $4,000,000,000 for fiscal 
year 2020; 
‘‘(IV) $5,000,000,000 for fiscal 
year 2021; 
‘‘(V) $6,000,000,000 for fiscal 
year 2022; 
‘‘(VI) $7,000,000,000 for fiscal 
year 2023; 
‘‘(VII) $8,000,000,000 for fiscal 
year 2024; and 
‘‘(VIII) $8,000,000,000 for fiscal 
year 2025.’’; and 
(C) by adding at the end the following new 
clause: 
‘‘(v) DISTRIBUTION
OF
AGGREGATE 
REDUCTIONS.—The Secretary shall dis-
tribute the aggregate reductions under 
clause (ii) among States in accordance 
with subparagraph (B).’’; and 
(2) in paragraph (8), by striking ‘‘2024’’ and 
inserting ‘‘2025’’. 
SEC. 413. LEVY ON DELINQUENT PROVIDERS. 
(a) IN GENERAL.—Paragraph (3) of section 6331(h) 
of the Internal Revenue Code of 1986 is amended by strik-
ing ‘‘30 percent’’ and inserting ‘‘100 percent’’. 
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215 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to payments made after 180 days 
after the date of the enactment of this Act. 
SEC. 414. ADJUSTMENTS TO INPATIENT HOSPITAL PAY-
MENT RATES. 
Section 7(b) of the TMA, Abstinence Education, and 
QI Programs Extension Act of 2007 (Public Law 110– 
90), as amended by the American Taxpayer Relief Act of 
2012 (Public Law 112–240), is amended— 
(1) in paragraph (1)— 
(A) in the matter preceding subparagraph 
(A), by striking ‘‘, 2009, or 2010’’ and insert-
ing ‘‘or 2009’’; and 
(B) in subparagraph (B)— 
(i) in clause (i), by striking ‘‘and’’ at 
the end; 
(ii) in clause (ii), by striking the pe-
riod at the end and inserting ‘‘; and’’; and 
(iii) by adding at the end the fol-
lowing new clause: 
‘‘(iii) make an additional adjustment to the 
standardized 
amounts 
under 
such 
section 
1886(d) of an increase of 0.5 percentage points 
for discharges occurring during each of fiscal 
years 2018 through 2023 and not make the ad-
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216 
justment (estimated to be an increase of 3.2 
percent) that would otherwise apply for dis-
charges occurring during fiscal year 2018 by 
reason of the completion of the adjustments re-
quired under clause (ii).’’; 
(2) in paragraph (3)— 
(A) by striking ‘‘shall be construed’’ and 
all that follows through ‘‘providing authority’’ 
and inserting ‘‘shall be construed as providing 
authority’’; and 
(B) by inserting ‘‘and each succeeding fis-
cal year through fiscal year 2023’’ after 
‘‘2017’’; 
(3) by redesignating paragraphs (3) and (4) as 
paragraphs (4) and (5), respectively; and 
(4) by inserting after paragraph (2) the fol-
lowing new paragraph: 
‘‘(3) PROHIBITION.—The Secretary shall not 
make an additional prospective adjustment (esti-
mated to be a decrease of 0.55 percent) to the 
standardized amounts under such section 1886(d) to 
offset the amount of the increase in aggregate pay-
ments related to documentation and coding changes 
for discharges occurring during fiscal year 2010.’’. 
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217 
TITLE V—MISCELLANEOUS 
Subtitle A—Protecting the 
Integrity of Medicare 
SEC. 501. PROHIBITION OF INCLUSION OF SOCIAL SECU-
RITY ACCOUNT NUMBERS ON MEDICARE 
CARDS. 
(a) IN GENERAL.—Section 205(c)(2)(C) of the Social 
Security Act (42 U.S.C. 405(c)(2)(C)) is amended— 
(1) by moving clause (x), as added by section 
1414(a)(2) of the Patient Protection and Affordable 
Care Act, 6 ems to the left; 
(2) by redesignating clause (x), as added by 
section 2(a)(1) of the Social Security Number Pro-
tection Act of 2010, and clause (xi) as clauses (xi) 
and (xii), respectively; and 
(3) by adding at the end the following new 
clause: 
‘‘(xiii) The Secretary of Health and Human Services, 
in consultation with the Commissioner of Social Security, 
shall establish cost-effective procedures to ensure that a 
Social Security account number (or derivative thereof) is 
not displayed, coded, or embedded on the Medicare card 
issued to an individual who is entitled to benefits under 
part A of title XVIII or enrolled under part B of title 
XVIII and that any other identifier displayed on such card 
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is not identifiable as a Social Security account number (or 
derivative thereof).’’. 
(b) IMPLEMENTATION.—In implementing clause (xiii) 
of section 205(c)(2)(C) of the Social Security Act (42 
U.S.C. 405(c)(2)(C)), as added by subsection (a)(3), the 
Secretary of Health and Human Services shall do the fol-
lowing: 
(1) IN
GENERAL.—Establish a cost-effective 
process that involves the least amount of disruption 
to, as well as necessary assistance for, Medicare 
beneficiaries and health care providers, such as a 
process that provides such beneficiaries with access 
to assistance through a toll-free telephone number 
and provides outreach to providers. 
(2) CONSIDERATION
OF
MEDICARE
BENE-
FICIARY
IDENTIFIED.—Consider implementing a 
process, similar to the process involving Railroad Re-
tirement Board beneficiaries, under which a Medi-
care beneficiary identifier which is not a Social Secu-
rity account number (or derivative thereof) is used 
external to the Department of Health and Human 
Services and is convertible over to a Social Security 
account number (or derivative thereof) for use inter-
nal to such Department and the Social Security Ad-
ministration. 
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219 
(c) FUNDING FOR IMPLEMENTATION.—For purposes 
of implementing the provisions of and the amendments 
made by this section, the Secretary of Health and Human 
Services shall provide for the following transfers from the 
Federal Hospital Insurance Trust Fund under section 
1817 of the Social Security Act (42 U.S.C. 1395i) and 
from the Federal Supplementary Medical Insurance Trust 
Fund established under section 1841 of such Act (42 
U.S.C. 1395t), in such proportions as the Secretary deter-
mines appropriate: 
(1) To the Centers for Medicare & Medicaid 
Program Management Account, transfers of the fol-
lowing amounts: 
(A) For fiscal year 2015, $65,000,000, to 
be made available through fiscal year 2018. 
(B) For each of fiscal years 2016 and 
2017, $53,000,000, to be made available 
through fiscal year 2018. 
(C) For fiscal year 2018, $48,000,000, to 
be made available until expended. 
(2) To the Social Security Administration Limi-
tation on Administration Account, transfers of the 
following amounts: 
(A) For fiscal year 2015, $27,000,000, to 
be made available through fiscal year 2018. 
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220 
(B) For each of fiscal years 2016 and 
2017, $22,000,000, to be made available 
through fiscal year 2018. 
(C) For fiscal year 2018, $27,000,000, to 
be made available until expended. 
(3) To the Railroad Retirement Board Limita-
tion on Administration Account, the following 
amount: 
(A) For fiscal year 2015, $3,000,000, to 
be made available until expended. 
(d) EFFECTIVE DATE.— 
(1) IN
GENERAL.—Clause (xiii) of section 
205(c)(2)(C) of the Social Security Act (42 U.S.C. 
405(c)(2)(C)), as added by subsection (a)(3), shall 
apply with respect to Medicare cards issued on and 
after an effective date specified by the Secretary of 
Health and Human Services, but in no case shall 
such effective date be later than the date that is four 
years after the date of the enactment of this Act. 
(2) REISSUANCE.—The Secretary shall provide 
for the reissuance of Medicare cards that comply 
with the requirements of such clause not later than 
four years after the effective date specified by the 
Secretary under paragraph (1). 
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SEC. 502. PREVENTING WRONGFUL MEDICARE PAYMENTS 
FOR ITEMS AND SERVICES FURNISHED TO IN-
CARCERATED 
INDIVIDUALS, 
INDIVIDUALS 
NOT LAWFULLY PRESENT, AND DECEASED IN-
DIVIDUALS. 
(a) REQUIREMENT FOR THE SECRETARY TO ESTAB-
LISH POLICIES AND CLAIMS EDITS RELATING TO INCAR-
CERATED INDIVIDUALS, INDIVIDUALS NOT LAWFULLY 
PRESENT, AND DECEASED INDIVIDUALS.—Section 1874 
of the Social Security Act (42 U.S.C. 1395kk) is amended 
by adding at the end the following new subsection: 
‘‘(f) REQUIREMENT FOR THE SECRETARY TO ESTAB-
LISH POLICIES AND CLAIMS EDITS RELATING TO INCAR-
CERATED INDIVIDUALS, INDIVIDUALS NOT LAWFULLY 
PRESENT, AND DECEASED INDIVIDUALS.—The Secretary 
shall establish and maintain procedures, including proce-
dures for using claims processing edits, updating eligibility 
information to improve provider accessibility, and con-
ducting recoupment activities such as through recovery 
audit contractors, in order to ensure that payment is not 
made under this title for items and services furnished to 
an individual who is one of the following: 
‘‘(1) An individual who is incarcerated. 
‘‘(2) An individual who is not lawfully present 
in the United States and who is not eligible for cov-
erage under this title. 
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222 
‘‘(3) A deceased individual.’’. 
(b) REPORT.—Not later than 18 months after the 
date of the enactment of this section, and periodically 
thereafter as determined necessary by the Office of Inspec-
tor General of the Department of Health and Human 
Services, such Office shall submit to Congress a report 
on the activities described in subsection (f) of section 1874 
of the Social Security Act (42 U.S.C. 1395kk), as added 
by subparagraph (a), that have been conducted since such 
date of enactment. 
SEC. 503. CONSIDERATION OF MEASURES REGARDING 
MEDICARE BENEFICIARY SMART CARDS. 
To the extent the Secretary of Health and Human 
Services determines that it is cost effective and techno-
logically viable to use electronic Medicare beneficiary and 
provider cards (such as cards that use smart card tech-
nology, including an embedded and secure integrated cir-
cuit chip), as presented in the Government Accountability 
Office report required by the conference report accom-
panying the Consolidated Appropriations Act, 2014 (Pub-
lic Law 113–76), the Secretary shall consider such meas-
ures as determined appropriate by the Secretary to imple-
ment such use of such cards for beneficiary and provider 
use under title XVIII of the Social Security Act (42 
U.S.C. 1395 et seq.). In the case that the Secretary con-
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223 
siders measures under the preceding sentence, the Sec-
retary shall submit to the Committees on Ways and Means 
and Energy and Commerce of the House of Representa-
tives, and to the Committee on Finance of the Senate, a 
report outlining the considerations undertaken by the Sec-
retary under such sentence. 
SEC. 
504. 
MODIFYING 
MEDICARE 
DURABLE 
MEDICAL 
EQUIPMENT 
FACE-TO-FACE 
ENCOUNTER 
DOCUMENTATION REQUIREMENT. 
(a) IN GENERAL.—Section 1834(a)(11)(B)(ii) of the 
Social Security Act (42 U.S.C. 1395m(a)(11)(B)(ii)) is 
amended— 
(1) by striking ‘‘the physician documenting 
that’’; and 
(2) by striking ‘‘has had a face-to-face encoun-
ter’’ and inserting ‘‘documenting such physician, 
physician assistant, practitioner, or specialist has 
had a face-to-face encounter’’. 
(b) IMPLEMENTATION.—Notwithstanding any other 
provision of law, the Secretary of Health and Human 
Services may implement the amendments made by sub-
section (a) by program instruction or otherwise. 
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224 
SEC. 505. REDUCING IMPROPER MEDICARE PAYMENTS. 
(a) MEDICARE ADMINISTRATIVE CONTRACTOR IM-
PROPER PAYMENT OUTREACH
AND EDUCATION PRO-
GRAM.— 
(1) IN GENERAL.—Section 1874A of the Social 
Security Act (42 U.S.C. 1395kk–1) is amended— 
(A) in subsection (a)(4)— 
(i) by redesignating subparagraph (G) 
as subparagraph (H); and 
(ii) by inserting after subparagraph 
(F) the following new subparagraph: 
‘‘(G) IMPROPER PAYMENT OUTREACH AND 
EDUCATION PROGRAM.—Having in place an im-
proper payment outreach and education pro-
gram described in subsection (h).’’; and 
(B) by adding at the end the following new 
subsection: 
‘‘(h) IMPROPER PAYMENT OUTREACH
AND EDU-
CATION PROGRAM.— 
‘‘(1) IN
GENERAL.—In order to reduce im-
proper payments under this title, each medicare ad-
ministrative contractor shall establish and have in 
place an improper payment outreach and education 
program under which the contractor, through out-
reach, education, training, and technical assistance 
or other activities, shall provide providers of services 
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225 
and suppliers located in the region covered by the 
contract under this section with the information de-
scribed in paragraph (2). The activities described in 
the preceding sentence shall be conducted on a reg-
ular basis. 
‘‘(2) INFORMATION TO BE PROVIDED THROUGH 
ACTIVITIES.—The information to be provided under 
such payment outreach and education program shall 
include information the Secretary determines to be 
appropriate which may include the following infor-
mation: 
‘‘(A) A list of the providers’ or suppliers’ 
most frequent and expensive payment errors 
over the last quarter. 
‘‘(B) Specific instructions regarding how to 
correct or avoid such errors in the future. 
‘‘(C) A notice of new topics that have been 
approved by the Secretary for audits conducted 
by recovery audit contractors under section 
1893(h). 
‘‘(D) Specific instructions to prevent fu-
ture issues related to such new audits. 
‘‘(E) Other information determined appro-
priate by the Secretary. 
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