SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare's Elderly Receiving 
Innovative Treatments (MERIT) Act of 1999''.

SEC. 2. MODIFICATION OF PAYMENT RULES.

    Section 1853 of the Social Security Act (42 U.S.C. 1395w-23) is 
amended--
            (1) in subsection (a)(1)(A), by striking ``subsections (e) 
        and (f)'' and inserting ``subsections (e) through (i)'';
            (2) in subsection (a)(3)(D), by inserting ``and paragraph 
        (4)'' after ``section 1859(e)(4)''; and
            (3) by adding at the end of subsection (a) the following 
        new paragraph:
            ``(4) Exemption from risk-adjustment system for frail 
        elderly beneficiaries enrolled in specialized programs for the 
        frail elderly.--
                    ``(A) In general.--During the period described in 
                subparagraph (B), the risk-adjustment described in 
                paragraph (3) shall not apply to a frail elderly 
                Medicare+Choice beneficiary (as defined in subsection 
                (i)(3)) who is enrolled in a Medicare+Choice plan under 
                a specialized program for the frail elderly (as defined 
                in subsection (i)(2)).
                    ``(B) Period of application.--The period described 
                in this subparagraph begins with January 2000 and ends 
                with the first month for which the Secretary certifies 
                to Congress that a comprehensive risk adjustment 
                methodology under paragraph (3)(C) (that takes into 
                account the types of factors described in subsection 
                (i)(1)) is being fully implemented.''; and
            (4) by adding at the end the following new subsection:
    ``(i) Special Rules for Frail Elderly Enrolled in Specialized 
Programs for the Frail Elderly.--
            ``(1) Development and implementation of new payment 
        system.--The Secretary shall develop and implement (as soon as 
        possible after the date of the enactment of this subsection), 
        during the period described in subsection (a)(4)(B), a payment 
        methodology for frail elderly Medicare+Choice beneficiaries 
        enrolled in a Medicare+Choice plan under a specialized program 
        for the frail elderly (as defined in paragraph (2)(A)). Such 
        methodology shall account for the prevalence, mix, and severity 
        of chronic conditions among such beneficiaries and shall 
        include medical diagnostic factors from all provider settings 
        (including hospital and nursing facility settings). It shall 
        include functional indicators of health status and such other 
        factors as may be necessary to achieve appropriate payments for 
        plans serving such beneficiaries.
            ``(2) Specialized program for the frail elderly 
        described.--
                    ``(A) In general.--For purposes of this part, the 
                term `specialized program for the frail elderly' means 
                a program which the Secretary determines--
                            ``(i) if offered under this part as a 
                        distinct part of a Medicare+Choice plan;
                            ``(ii) primarily enrolls frail elderly 
                        Medicare+Choice beneficiaries; and
                            ``(iii) has a clinical delivery system that 
                        is specifically designed to serve the special 
                        needs of such beneficiaries and to coordinate 
                        short-term and long-term care for such 
                        beneficiaries through the use of a team 
                        described in subparagraph (B) and through the 
                        provision of primary care services to such 
                        beneficiaries by means of such a team at the 
                        nursing facility involved.
                    ``(B) Specialized team.--A team described in this 
                subparagraph--
                            ``(i) includes--
                                    ``(I) a physician, and
                                    ``(II) a nurse practitioner or 
                                geriatric care manager, or both; and
                            ``(ii) has as members individuals who have 
                        special training and specialize in the care and 
                        management of the frail elderly beneficiaries.
            ``(3) Frail elderly medicare+choice beneficiary 
        described.--For purposes of this part, the term `frail elderly 
        Medicare+Choice beneficiary' means a Medicare+Choice eligible 
        individual who--
                    ``(A) is residing in a skilled nursing facility or 
                a nursing facility (as defined for purposes of title 
                XIX) for an indefinite period and without any intention 
                of residing outside the facility; and
                    ``(B) has a severity of condition that makes the 
                individual frail (as determined under guidelines 
                approved by the Secretary).''.

SEC. 3. CONTINUOUS OPEN ENROLLMENT FOR QUALIFIED INDIVIDUALS.

    (a) In General.--Section 1851(e) of the Social Security Act (42 
U.S.C. 1395w-21(e)) is amended by adding at the end the following new 
paragraph:
            ``(7) Special rules for frail elderly medicare+choice 
        beneficiaries enrolling in specialized programs for the frail 
        elderly.--There shall be a continuous open enrollment period 
        for any frail elderly Medicare+Choice beneficiary (as defined 
        in section 1853(i)(3)) who is seeking to enroll in a 
        Medicare+Choice plan under a specialized program for the frail 
        elderly (as defined in section 1853(i)(2)).''.
    (b) Effective Date.--The amendment made by subsection (a) takes 
effect on the date of the enactment of this Act.

SEC. 4. DEVELOPMENT OF QUALITY MEASUREMENT PROGRAM.

    (a) In General.--Section 1852(e) of the Social Security Act (42 
U.S.C. 1395w-22(e)) is amended by adding at the end the following new 
paragraph:
            ``(5) Quality measurement program for specialized programs 
        for the frail elderly as part of medicare+choice plans.--The 
        Secretary shall develop and implement a program to measure the 
        quality of care provided in specialized programs for the frail 
        elderly (as defined in section 1853(i)(2)) in order to reflect 
        the unique health aspects and needs of frail elderly 
        Medicare+Choice beneficiaries (as defined in section 
        1853(i)(3)). Such quality measurements may include indicators 
        of the prevalence of pressure sores, reduction of iatrogenic 
        disease, use of urinary catheters, use of anti-anxiety 
        medications, use of advance directives, incidence of pneumonia, 
        and incidence of congestive heart failure.''.
    (b) Effective Date.--The Secretary of Health and Human Services 
shall first provide for the implementation of the quality measurement 
program for specialized programs for the frail elderly under the 
amendment made by subsection (a) by not later than July 1, 2000.
Output: Medicare's Elderly Receiving Innovative Treatments (MERIT) Act of 1999 - Amends part C (Medicare+Choice) of title XVIII (Medicare) of the Social Security Act with regard to the frail elderly, modifying: (1) payment rules (including requiring the Secretary of Health and Human Services to develop and implement a new payment system); (2) eligibility, election, and enrollment provisions (adding special rules for frail elderly Medicare+Choice beneficiaries enrolling in specialized programs for the frail elderly that establish a continuous open enrollment period for such individuals); and (3) benefits and beneficiary protections provisions (requiring the Secretary to develop and implement a program to measure the quality of care provided in specialized programs for the frail elderly).  Exempts Medicare+Choice beneficiaries in a specialized program for the frail elderly from any risk adjustment system until the Secretary certifies to Congress that a comprehensive risk adjustment methodology taking certain factors into account is being fully implemented.