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SEC. 501. PHASE-IN OF NEW RISK ADJUSTMENT METHODOLOGY.

Section 1853(a)(3)(C) (42 U.S.C. 1395w-23(a)(3)(C)) is amended--

(1) by redesignating the first sentence as clause (i) with the heading `IN GENERAL- ' and appropriate indentation; and

(2) by adding at the end the following new clause:

`(ii) PHASE-IN- Subject to clause (iii)(II), such risk adjustment methodology shall be implemented in a phased-in manner so that the new methodology applies only to--

`(I) 10 percent of the payment amount in 2000, 2001, 2002, and 2003;

`(II) 50 percent of such amount in 2004;

`(III) 75 percent of such amount in 2005; and

`(IV) 100 percent of such amount in any subsequent year.

`(iii) REQUIREMENT AND CONTINGENCY-

`(I) REQUIREMENT- The Secretary shall provide for the application of data from multiple settings (including hospital outpatient settings) in applying the risk methodology in years beginning with 2004.

`(II) CONTINGENCY- The percent applied under clause (ii) shall not exceed 10 percent in a year after 2003 unless the Secretary is using data from multiple settings (including hospital outpatient settings) in applying the risk methodology in that year.'.

SEC. 502. CONTINUED COMPUTATION AND PUBLICATION OF AAPCC DATA.

(a) IN GENERAL- Section 1853(b) (42 U.S.C. 1395w-23(b)) is amended by adding at the end the following new paragraph:

`(4) CONTINUED COMPUTATION AND PUBLICATION OF COUNTY-SPECIFIC PER CAPITA FEE-FOR-SERVICE EXPENDITURE INFORMATION- The Secretary, through the Chief Actuary of the Health Care Financing Administration, shall provide for the computation and publication, on an annual basis at the time of publication of the annual Medicare+Choice capitation rates, of information on the level of the average annual per capita costs (described in section 1876(a)(4)) for each Medicare+Choice payment area.'.

(b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effect on the date of the enactment of this Act and apply to publications of the annual Medicare+Choice capitation rates made on or after such date.

SEC. 503. CHANGES IN MEDICARE+CHOICE AND MEDIGAP ENROLLMENT RULES.

(a) PERMITTING ENROLLMENT IN ALTERNATIVE MEDICARE+CHOICE PLANS IN CASE OF INVOLUNTARY TERMINATION OF MEDICARE+CHOICE ENROLLMENT- Section 1851(e)(4) (42 U.S.C. 1395w-21(e)(4)) is amended by striking subparagraph (A) and inserting the following:

`(A)(i) the certification of the organization or plan under this part has been terminated, or the organization or plan has notified the individual of an impending termination of such certification; or

`(ii) the organization has terminated or otherwise discontinued providing the plan in the area in which the individual resides, or has notified the individual of an impending termination or discontinuation of such plan;'.

(b) CONFORMING MEDIGAP AMENDMENT- Section 1882(s)(3)(A) (42 U.S.C. 1395ss(s)(3)(A)) is amended, in the matter following clause (iii)--

(1) by inserting `(or, if elected by the individual, the date of notification of the individual or the Secretary by the plan or organization of the impending termination or discontinuance of the plan in the area in which the individual resides)' after `the

date of the termination of enrollment described in such subparagraph'; and

(2) by inserting `(or the date of such notification)' after `the date of termination or disenrollment'.

SEC. 504. ALLOWING VARIATION IN PREMIUM WAIVERS WITHIN A SERVICE AREA IF MEDICARE+CHOICE PAYMENT RATES VARY WITHIN THE AREA.

(a) IN GENERAL- Section 1854(c) (42 U.S.C. 1395w-24(c)) is amended--

(1) by striking `The' and inserting `Subject to paragraph (2), the';

(2) by redesignating the first sentence as a paragraph (1) with an appropriate indentation and the heading `IN GENERAL- '; and

(3) by adding at the end the following new paragraph:

`(2) VARIATION IN PREMIUM WAIVER PERMITTED- A Medicare+Choice organization may waive part or all of a premium described in paragraph (1) for one or more Medicare+Choice payment areas within its service area if the annual Medicare+Choice capitation rates under section 1853(c) vary between such payment area and other payment areas within such service area.'.

(b) EFFECTIVE DATE- The amendments made by subsection (a) apply to premiums for contract years beginning on or after January 1, 2001.

SEC. 505. DELAY IN DEADLINE FOR SUBMISSION OF ADJUSTED COMMUNITY RATES AND RELATED INFORMATION.

(a) DELAY IN DEADLINE FOR SUBMISSION OF ADJUSTED COMMUNITY RATES AND RELATED INFORMATION- Section 1854(a)(1) (42 U.S.C. 1395w-24(a)(1)) is amended by striking `May 1' and inserting `July 1'.

(b) ADJUSTMENT IN INFORMATION DISCLOSURE PROVISIONS- Section 1851(d)(2)(A)(ii) (42 U.S.C. 1395w-21(d)(2)(A)(ii)) is amended by inserting after `information described in paragraph (4) concerning such plans' the following: `, to the extent such information is available at the time of preparation of the material for mailing'.

SEC. 506. DEEMING OF MEDICARE+CHOICE ORGANIZATION TO MEET REQUIREMENTS.

Section 1852(e)(4) (42 U.S.C. 1395w-22(e)(4)) is amended to read as follows:

`(4) TREATMENT OF ACCREDITATION- The Secretary shall provide that a Medicare+Choice organization is deemed to meet requirements of paragraphs (1) and (2) of this subsection and subsection (h) (relating to confidentiality and accuracy of enrollee records) if the organization is accredited (and periodically reaccredited) by a private accrediting organization under a process that the Secretary has determined assures that the accrediting organization applies standards that meet or exceed the standards established under section 1856 to carry out the respective requirements. The Secretary shall determine, within 90 days after the date the Secretary receives an application by a private accrediting organization, whether the process of the private accrediting organization meets the requirements of the preceding sentence using the criteria specified in section 1865(b)(2). The Secretary shall, using the process described in section 1865(b), deem a Medicare+Choice organization that is so accredited as meeting the requirements of paragraphs (1) and (2) of this subsection and subsection (h).'

SEC. 507. REDUCTION IN ADJUSTMENT IN NATIONAL PER CAPITA MEDICARE+CHOICE GROWTH PERCENTAGE FOR 2001 AND 2002.

Section 1853(c)(6)(B) (42 U.S.C. 1395w-23(c)(6)(B)) is amended in clauses (iv) and (v) by striking `0.5 percentage points' and inserting `0.3 percentage points'.

SEC. 508. 3 YEAR EXTENSION OF MEDICARE COST CONTRACTS.

Section 1876(h)(5)(B) (42 U.S.C. 1395mm(h)(5)(B)) is amended by striking `2002' and inserting `2005'.

SEC. 509. REDUCING TO 2 YEARS THE RE-ENTRY PERIOD AFTER CONTRACT TERMINATION.

(a) IN GENERAL- Section 1857(c)(4) (42 U.S.C. 1395w-27(c)(4)) is amended by striking `5-year period' and inserting `2-year period'.

(b) EFFECTIVE DATE- The amendment made by subsection (a) applies to contract terminations occurring before, on, or after the date of the enactment of this Act.

SEC. 510. MEDPAC STUDIES RELATING TO RISK ADJUSTMENT .

(a) STUDY- The Medicare Payment Advisory Commission established under section 1805 of the Social Security Act (42 U.S.C. 1395b-6) (in this section referred to as `MedPAC') shall conduct a study on the adequacy and accuracy of health-based risk adjustment methodologies being developed and used by the Health Care Financing Administration in the Medicare+Choice program.

(b) REPORT- The Commission shall submit to Congress by March 1, 2001, a report on the study under subsection (a) and shall include recommendations regarding alternative risk adjustment methodologies that are less onerous.

SEC. 511. MEDPAC REPORT ON MEDICARE MSA (MEDICAL SAVINGS ACCOUNT) PLANS.

Not later than 1 year after the date of the enactment of this Act, the Medicare Payment Advisory Commission shall submit to Congress a report on specific legislative changes that should be made to make MSA plans a viable option under the Medicare+Choice program.

SEC. 512. MISCELLANEOUS CHANGES.

(a) PERMITTING RELIGIOUS FRATERNAL BENEFIT SOCIETIES TO OFFER A RANGE OF MEDICARE+CHOICE PLANS- Section 1859(e)(2)(A) (42 U.S.C. 1395w-29(e)(2)(A)) is amended by striking `section 1851(a)(2)(A)' and inserting `section 1851(a)(2)'.

Subtitle B--Other Managed Care Provisions

SEC. 521. MEDICARE+CHOICE COMPETITIVE BIDDING DEMONSTRATION PROJECT.

Section 4011 of BBA is amended--

(1) in subsection (a)--

(A) by striking `The Secretary' and inserting the following:

`(1) IN GENERAL- Subject to the succeeding provisions of this subsection, the Secretary'; and

(B) by adding at the end the following:

`(2) DELAY IN IMPLEMENTATION- The Secretary shall not implement the project until January 1, 2002, or, if later, 6 months after the date the Competitive Pricing Advisory Committee has submitted to Congress a report on each of the following topics:

`(A) INCORPORATION OF ORIGINAL FEE-FOR-SERVICE MEDICARE PROGRAM INTO PROJECT- What changes would be required in the project to feasibly incorporate the original fee-for-service medicare program into the project in the areas in which the project is operational.

`(B) QUALITY ACTIVITIES- The nature and extent of the quality reporting and monitoring activities that should be required of plans participating in the project, the estimated costs that plans will incur as a result of these requirements, and the current ability of the Health Care Financing Administration to collect and report comparable data, sufficient to support comparable quality reporting and monitoring activities with respect to beneficiaries enrolled in the original fee-for-service medicare program generally.

`(C) RURAL PROJECT- The current viability of initiating a project site in a rural area, given the site specific budget neutrality requirements of the project, and insofar as the Committee decides that the addition of such a site is not viable, recommendations on how the project might best be changed so that such a site is viable.

`(D) BENEFIT STRUCTURE- The nature and extent of the benefit structure that should be required of plans participating in the project, the rationale for such benefit structure, the potential implications that any benefit standardization requirement may have on the number of plan choices available to a beneficiary in an area designated under the project, the potential implications of requiring participating plans to offer variations on any standardized benefit package the committee might recommend, such that a beneficiary could elect to pay a higher percentage of out-of-pocket costs in exchange for a lower premium (or premium rebate as the case may be), and the potential implications of expanding the project (in conjunction with the potential inclusion of the original fee-for-service medicare program) to require medicare supplemental insurance plans operating in an area designated under the project to offer a coordinated and comparable standardized benefit package.

`(3) CONFORMING DEADLINES- Any dates specified in the succeeding provisions of this section shall be delayed (as specified by the Secretary) in a manner consistent with the delay effected under paragraph (2).'; and

(2) in subsection (c)(1)(A)--

(A) by striking `and' at the end of clause (i); and

(B) by adding at the end the following new clause:

`(iii) establish beneficiary premiums for plans offered in such area in a manner such that a beneficiary who enrolls in an offered plan with a below average price (as established by the competitive pricing methodology established for such area) may, at the plan's election, be offered a rebate of some or all of the medicare part B premium that such individual must otherwise pay in order to participate in a Medicare+Choice plan under the Medicare+Choice program; and'.

SEC. 522. INAPPLICABILITY OF OASIS TO PACE.

Sections 1894(e)(3) and 1934(e)(3) (42 U.S.C. 1395eee(e)(3); 1396u-4(e)(3)) are each amended by adding at the end the following:

`(C) INAPPLICABILITY OF OASIS TO PACE- Notwithstanding the previous provisions of this paragraph, with respect to any home health service provided under a PACE program under this section, the Secretary shall not apply the data collection and reporting requirements under the Outcome and Assessment Information Set (OASIS) to such program or to any enrollee of such program, regardless of whether such service is provided by a PACE program directly or through a contract with a home health agency.'.

TITLE VI--MEDICAID

SEC. 601. MAKING MEDICAID DSH TRANSITION RULE PERMANENT.

(a) IN GENERAL- Section 4721(e) of the Balanced Budget Act of 1997 (42 U.S.C. 1396r-4 note) is amended--

(1) in the matter before paragraph (1), by striking `1923(g)(2)(A)' and `1396r-4(g)(2)(A)' and inserting `1923(g)(2)' and `1396r-4(g)(2)', respectively;

(2) in paragraphs (1) and (2)--

(A) by striking `, and before July 1, 1999'; and

(B) by striking `in such section' and inserting `in subparagraph (A) of such section'; and

(3) by striking `and' at the end of paragraph (1), by striking the period at the end of paragraph (2) and inserting `; and', and by adding at the end the following new paragraph:

`(3) effective for State fiscal years that begin on or after July 1, 1999, `or (b)(1)(B)' were inserted in section 1923(g)(2)(B)(ii)(I) after `(b)(1)(A)'.'.

(b) EFFECTIVE DATE- The amendments made by subsection (a) shall take effect as if included in the enactment of section 4721(e) of the Balanced Budget Act of 1997 (Public Law 105-33; 110 Stat. 514).

SEC. 602. INCREASE IN DSH ALLOTMENT FOR CERTAIN STATES AND THE DISTRICT OF COLUMBIA.

(a) IN GENERAL- The table in section 1923(f)(2) (42 U.S.C. 1396r-4(f)(2)) is amended under each of the columns for FY 00, FY 01, and FY 02--

(1) in the entry for the District of Columbia, by striking `23' and inserting `32';

(2) in the entry for Minnesota, by striking `16' and inserting `33';

(3) in the entry for New Mexico, by striking `5' and inserting `9'; and

(4) in the entry for Wyoming, by striking `0' and inserting `.100'.

(b) EFFECTIVE DATE- The amendments made by subsection (a) take effect on October 1, 1999, and applies to expenditures made on or after such date.

SEC. 603. NEW PROSPECTIVE PAYMENT SYSTEM FOR FEDERALLY-QUALIFIED HEALTH CENTERS AND RURAL HEALTH CLINICS.

(a) IN GENERAL- Section 1902(a) of the Social Security Act (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 following new paragraph:

`(15) for payment for services described in clause (B) or (C) of section 1905(a)(2) under the plan in accordance with subsection (aa);'.

(b) NEW PROSPECTIVE PAYMENT SYSTEM- Section 1902 of the Social Security Act (42 U.S.C. 1396a) is amended by adding at the end the following:

`(aa) PAYMENT FOR SERVICES PROVIDED BY FEDERALLY-QUALIFIED HEALTH CENTERS AND RURAL HEALTH CLINICS-

`(1) IN GENERAL- Beginning with fiscal year 2000 and each succeeding fiscal year, the State plan shall provide for payment for services described in section 1905(a)(2)(C) furnished by a Federally-qualified health center and services described in section 1905(a)(2)(B) furnished by a rural health clinic in accordance with the provisions of this subsection.

`(2) FISCAL YEAR 2000- Subject to paragraph (4), for services furnished during fiscal year 2000, the State plan shall provide for payment for such services in an amount (calculated on a per visit basis) that is equal to 100 percent of the costs of the center or clinic of furnishing such services during fiscal year 1999 which are reasonable and related to the cost of furnishing such services, or based on such other tests of reasonableness as the Secretary prescribes in regulations under section 1833(a)(3), or, in the case of services to which such regulations do not apply, the same methodology used under section 1833(a)(3), adjusted to take into account any increase in the scope of such services furnished by the center or clinic during fiscal year 2000.

`(3) FISCAL YEAR 2001 AND SUCCEEDING FISCAL YEARS- Subject to paragraph (4), for services furnished during fiscal year 2001 or a succeeding fiscal year, the State plan shall provide for payment for such services in an amount (calculated on a per visit basis) that is equal to the amount calculated for such services under this subsection for the preceding fiscal year--

`(A) increased by the percentage increase in the MEI (as defined in section 1842(i)(3)) applicable to primary care services (as defined in section 1842(i)(4)) for that fiscal year; and

`(B) adjusted to take into account any increase in the scope of such services furnished by the center or clinic during that fiscal year.

`(4) ESTABLISHMENT OF INITIAL YEAR PAYMENT AMOUNT FOR NEW CENTERS OR CLINICS- In any case in which an entity first qualifies as a Federally-qualified health center or rural health clinic after fiscal year 1999, the State plan shall provide for payment for services described in section 1905(a)(2)(C) furnished by the center or services described in section 1905(a)(2)(B) furnished by the clinic in the first fiscal year in which the center or clinic so qualifies in an amount (calculated on a per visit basis) that is equal to 100 percent of the costs of furnishing such services during such fiscal year in accordance with the regulations and methodology referred to in paragraph (2). For each fiscal year following the fiscal year in which the entity first qualifies as a Federally-qualified health center or rural health clinic, the State plan shall provide for the payment amount to be calculated in accordance with paragraph (3).

`(5) ADMINISTRATION IN THE CASE OF MANAGED CARE- In the case of services furnished by a Federally-qualified health center or rural health clinic pursuant to a contract between the center or clinic and a managed care entity (as defined in section 1932(a)(1)(B)), the State plan shall provide for payment to the center or clinic (at least quarterly) by the State of a supplemental payment equal to the amount (if any) by which the amount determined under paragraphs (2), (3), and (4) of this subsection exceeds the amount of the payments provided under the contract.

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