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H.R.3426
Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999
(Introduced in the House)
SEC. 511. PHASE-IN OF NEW RISK
ADJUSTMENT METHODOLOGY; STUDIES
AND REPORTS ON RISK ADJUSTMENT .
(a) PHASE-IN- 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- Such risk adjustment methodology shall be
implemented in a phased-in manner so that the methodology insofar as it
makes adjustments to capitation rates for health status applies
to--
`(I) 10 percent of 1/12 of the annual Medicare+Choice capitation
rate in 2000 and 2001; and
`(II) not more than 20 percent of such capitation rate in
2002.'.
(b) MEDPAC STUDY AND REPORT-
(1) STUDY- The Medicare Payment Advisory Commission shall conduct a
study that evaluates the methodology used by the Secretary of Health and
Human Services in developing the risk factors used in adjusting the
Medicare+Choice capitation rate paid to Medicare+Choice organizations under
section 1853 of the Social Security Act (42 U.S.C. 1395w-23) and includes
the issues described in paragraph (2).
(2) ISSUES TO BE STUDIED- The issues described in this paragraph are the
following:
(A) The ability of the average risk adjustment factor applied to a
Medicare+Choice plan to explain variations in plans' average per capita
medicare costs, as reported by Medicare+Choice plans in the plans'
adjusted community rate filings.
(B) The year-to-year stability of the risk factors applied to each
Medicare+Choice plan and the potential for substantial changes in payment
for small Medicare+Choice plans.
(C) For medicare beneficiaries newly enrolled in Medicare+Choice plans
in a given year, the correspondence between the average risk factor calculated from
medicare fee-for-service data for those individuals from the period prior
to their enrollment in a Medicare+Choice plan and the average risk factor calculated for such
individuals during their initial year of enrollment in a Medicare+Choice
plan.
(D) For medicare beneficiaries disenrolling from or switching among
Medicare+Choice plans in a given year, the correspondence between the
average risk factor
calculated from data pertaining to the period prior to their disenrollment
from a Medicare+Choice plan and the average risk factor calculated from data
pertaining to the period after disenrollment.
(E) An evaluation of the exclusion of `discretionary' hospitalizations
from consideration in the risk adjustment methodology.
(F) Suggestions for changes or improvements in the risk adjustment methodology.
(3) REPORT- Not later than December 1, 2000, the Commission shall submit
a report to Congress on the study conducted under paragraph (1), together
with any recommendations for legislation that the Commission determines to
be appropriate as a result of such study.
(c) STUDY AND REPORT REGARDING REPORTING OF ENCOUNTER DATA-
(1) STUDY- The Secretary of Health and Human Services shall conduct a
study on how to reduce the costs and burdens on Medicare+Choice
organizations of their complying with reporting requirements for encounter
data imposed by the Secretary in establishing and implementing a risk adjustment methodology used in
making payments to such organizations under section 1853 of the Social
Security Act (42 U.S.C. 1395w-23). The Secretary shall consult with
representatives of Medicare+Choice organizations in conducting the study.
The study shall address the following issues:
(A) Limiting the number and types of sites of services (that are in
addition to inpatient sites) for which encounter data must be
reported.
(B) Establishing alternative risk adjustment methods that would
require submission of less data.
(C) The potential for Medicare+Choice organizations to misreport,
overreport, or underreport prevalence of diagnoses in outpatient sites of
care, the potential for increases in payments to Medicare+Choice
organizations from changes in Medicare+Choice plan coding practices
(commonly known as `coding creep') and proposed methods for detecting and
adjusting for such variations in diagnosis coding as part of the risk adjustment methodology using
encounter data from multiple sites of care.
(D) The impact of such requirements on the willingness of insurers to
offer Medicare+Choice MSA plans and options for modifying encounter data
reporting requirements to accommodate such plans.
(E) Differences in the ability of Medicare+Choice organizations to
report encounter data, and the potential for adverse competitive impacts
on group and staff model health maintenance organizations or other
integrated providers of care based on data reporting
capabilities.
(2) REPORT- Not later than January 1, 2001, the Secretary shall submit a
report to Congress on the study conducted under this subsection, together
with any recommendations for legislation that the Secretary determines to be
appropriate as a result of such study.
SEC. 512. ENCOURAGING OFFERING OF MEDICARE+CHOICE PLANS IN AREAS WITHOUT
PLANS.
Section 1853 (42 U.S.C. 1395w-23) is amended--
(1) in subsection (a)(1), by striking `subsections (e) and (f)' and
inserting `subsections (e), (g), and (i)';
(2) in subsection (c)(5), by inserting `(other than those attributable
to subsection (i))' after `payments under this part'; and
(3) by adding at the end the following new subsection:
`(1) IN GENERAL- Subject to paragraphs (2) and (3), in the case of
Medicare+Choice payment area in which a Medicare+Choice plan has not been
offered since 1997 (or in which all organizations that offered a plan since
such date have filed notice with the Secretary, as of October 13, 1999, that
they will not be offering such a plan as of January 1, 2000), the amount of
the monthly payment otherwise made under this section shall be
increased--
`(A) only for the first 12 months in which any Medicare+Choice plan is
offered in the area, by 5 percent of the total monthly payment otherwise
computed for such payment area; and
`(B) only for the subsequent 12 months, by 3 percent of the total
monthly payment otherwise computed for such payment area.
`(2) PERIOD OF APPLICATION- Paragraph (1) shall only apply to payment
for Medicare+Choice plans which are first offered in a Medicare+Choice
payment area during the 2-year period beginning on January 1, 2000.
`(3) LIMITATION TO ORGANIZATION OFFERING FIRST PLAN IN AN AREA-
Paragraph (1) shall only apply to payment to the first Medicare+Choice
organization that offers a Medicare+Choice plan in each Medicare+Choice
payment area, except that if more than one such organization first offers
such a plan in an area on the same date, paragraph (1) shall apply to
payment for such organizations.
`(4) CONSTRUCTION- Nothing in paragraph (1) shall be construed as
affecting the calculation of the annual Medicare+Choice capitation rate
under subsection (c) for any payment area or as applying to payment for any
period not described in such paragraph and paragraph (2).
`(5) OFFERED DEFINED- In this subsection, the term `offered' means, with
respect to a Medicare+Choice plan as of a date, that a Medicare+Choice
eligible individual may enroll with the plan on that date, regardless of
when the enrollment takes effect or when the individual obtains benefits
under the plan.'.
SEC. 513. MODIFICATION OF 5-YEAR RE-ENTRY RULE FOR CONTRACT
TERMINATIONS.
(a) REDUCTION OF GENERAL EXCLUSION PERIOD TO 2 YEARS- 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) SPECIFIC EXCEPTION WHERE CHANGE IN PAYMENT POLICY-
(1) IN GENERAL- Section 1857(c)(4) (42 U.S.C. 1395w-27(c)(4)) is
amended--
(A) by striking `except in circumstances' and inserting `except as
provided in subparagraph (B) and except in such other
circumstances';
(B) by redesignating the sentence following `(4)' as a subparagraph
(A) with an appropriate indentation and the heading `IN GENERAL- ';
and
(C) by adding at the end the following new subparagraph:
`(B) EARLIER RE-ENTRY PERMITTED WHERE CHANGE IN PAYMENT POLICY-
Subparagraph (A) shall not apply with respect to the offering by a
Medicare+Choice organization of a Medicare+Choice plan in a
Medicare+Choice payment area if during the 6-month period beginning on the
date the organization notified the Secretary of the intention to terminate
the most recent previous contract, there was a legislative change enacted
(or a regulatory change adopted) that has the effect of increasing payment
amounts under section 1853 for that Medicare+Choice payment
area.'.
(2) CONSTRUCTION RELATING TO ADDITIONAL EXCEPTIONS- Nothing in the
amendment made by paragraph (1)(C) shall be construed to affect the
authority of the Secretary of Health and Human Services to provide for
exceptions in addition to the exception provided in such amendment,
including exceptions provided under Operational Policy Letter #103
(OPL99.103).
(c) EFFECTIVE DATE- The amendments made by this section apply to contract
terminations occurring before, on, or after the date of the enactment of this
Act.
SEC. 514. CONTINUED COMPUTATION AND PUBLICATION OF MEDICARE ORIGINAL
FEE-FOR-SERVICE EXPENDITURES ON A COUNTY-SPECIFIC BASIS.
(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 beginning with 2001 at the
time of publication of the annual Medicare+Choice capitation rates under
paragraph (1), of the following information for the original medicare
fee-for-service program under parts A and B (exclusive of individuals
eligible for coverage under section 226A) for each Medicare+Choice payment
area for the second calendar year ending before the date of
publication:
`(A) Total expenditures per capita per month, computed separately for
part A and for part B.
`(B) The expenditures described in subparagraph (A) reduced by the
best estimate of the expenditures (such as graduate medical education and
disproportionate share hospital payments) not related to the payment of
claims.
`(C) The average risk
factor for the covered population based on diagnoses reported for medicare
inpatient services, using the same methodology as is expected to be
applied in making payments under subsection (a).
`(D) Such average risk
factor based on diagnoses for inpatient and other sites of service, using
the same methodology as is expected to be applied in making payments under
subsection (a).'.
(b) SPECIAL RULE FOR 2001- In providing for the publication of information
under section 1853(b)(4) of the Social Security Act (42 U.S.C.
1395w-23(b)(4)), as added by subsection (a), in 2001, the Secretary of Health
and Human Services shall also include the information described in such
section for 1998, as well as for 1999.
SEC. 515. FLEXIBILITY TO TAILOR BENEFITS UNDER MEDICARE+CHOICE PLANS.
(a) IN GENERAL- Section 1854 (42 U.S.C. 1395w-24) is amended--
(1) in subsection (a)(1), by inserting `(or segment of such an area if
permitted under subsection (h))' after `service area' in the matter
preceding subparagraph (A); and
(2) by adding at the end the following:
`(h) PERMITTING USE OF SEGMENTS OF SERVICE AREAS- The Secretary shall
permit a Medicare+Choice organization to elect to apply the provisions of this
section uniformly to separate segments of a service area (rather than
uniformly to an entire service area) as long as such segments are composed of
one or more Medicare+Choice payment areas.'.
(b) EFFECTIVE DATE- The amendments made by this section apply to contract
years beginning on or after January 1, 2001.
SEC. 516. DELAY IN DEADLINE FOR SUBMISSION OF ADJUSTED COMMUNITY RATES.
(a) DELAY IN DEADLINE FOR SUBMISSION OF ADJUSTED COMMUNITY RATES- Section
1854(a)(1) (42 U.S.C. 1395w-24(a)(1)) is amended by striking `May 1' and
inserting `July 1' in the matter preceding subparagraph (A).
(b) EFFECTIVE DATE- The amendment made by subsection (a) applies to
information submitted by Medicare+Choice organizations for years beginning
with 1999.
SEC. 517. REDUCTION IN ADJUSTMENT IN NATIONAL PER CAPITA
MEDICARE+CHOICE GROWTH PERCENTAGE FOR 2002.
Section 1853(c)(6)(B)(v) (42 U.S.C. 1395w-23(c)(6)(B)(v)) is amended by
striking `0.5 percentage points' and inserting `0.3 percentage points'.
SEC. 518. 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-
`(A) IN GENERAL- The Secretary shall provide that a Medicare+Choice
organization is deemed to meet all the requirements described in any
specific clause of subparagraph (B) 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 and enforces standards that meet or exceed the
standards established under section 1856 to carry out the requirements in
such clause.
`(B) REQUIREMENTS DESCRIBED- The provisions described in this
subparagraph are the following:
`(i) Paragraphs (1) and (2) of this subsection (relating to quality
assurance programs).
`(ii) Subsection (b) (relating to antidiscrimination).
`(iii) Subsection (d) (relating to access to services).
`(iv) Subsection (h) (relating to confidentiality and accuracy of
enrollee records).
`(v) Subsection (i) (relating to information on advance
directives).
`(vi) Subsection (j) (relating to provider participation
rules).
`(C) TIMELY ACTION ON APPLICATIONS- The Secretary shall determine,
within 210 days after the date the Secretary receives an application by a
private accrediting organization and using the criteria specified in
section 1865(b)(2), whether the process of the private accrediting
organization meets the requirements with respect to any specific clause in
subparagraph (B) with respect to which the application is made. The
Secretary may not deny such an application on the basis that it seeks to
meet the requirements with respect to only one, or more than one, such
specific clause.
`(D) CONSTRUCTION- Nothing in this paragraph shall be construed as
limiting the authority of the Secretary under section 1857, including the
authority to terminate contracts with Medicare+Choice organizations under
subsection (c)(2) of such section.'.
SEC. 519. TIMING OF MEDICARE+CHOICE HEALTH INFORMATION FAIRS.
(a) IN GENERAL- Section 1851(e)(3)(C) (42 U.S.C. 1395w-21(e)(3)(C)) is
amended by striking `In the month of November' and inserting `During the fall
season'.
(b) EFFECTIVE DATE- The amendment made by subsection (a) first applies to
campaigns conducted beginning in 2000.
SEC. 520. QUALITY ASSURANCE REQUIREMENTS FOR PREFERRED PROVIDER ORGANIZATION
PLANS.
(a) IN GENERAL- Section 1852(e)(2) (42 U.S.C. 1395w-22(e)(2)) is
amended--
(1) in subparagraph (A), by striking `or a non-network MSA plan' and
inserting `, a non-network MSA plan, or a preferred provider organization
plan';
(2) in subparagraph (B)--
(A) in the heading, by striking `AND NON-NETWORK MSA PLANS' and
inserting `, NON-NETWORK MSA PLANS, AND PREFERRED PROVIDER ORGANIZATION
PLANS'; and
(B) by striking `or a non-network MSA plan' and inserting `, a
non-network MSA plan, or a preferred provider organization plan';
(3) by adding at the end the following:
`(D) DEFINITION OF PREFERRED PROVIDER ORGANIZATION PLAN- In this
paragraph, the term `preferred provider organization plan' means a
Medicare+Choice plan that--
`(i) has a network of providers that have agreed to a contractually
specified reimbursement for covered benefits with the organization
offering the plan;
`(ii) provides for reimbursement for all covered benefits regardless
of whether such benefits are provided within such network of providers;
and
`(iii) is offered by an organization that is not licensed or
organized under State law as a health maintenance
organization.'.
(b) EFFECTIVE DATE- The amendments made by subsection (a) apply to
contract years beginning on or after January 1, 2000.
(c) QUALITY IMPROVEMENT STANDARDS-
(1) STUDY- The Medicare Payment Advisory Commission shall conduct a
study on the appropriate quality improvement standards that should apply
to--
(A) each type of Medicare+Choice plan described in section 1851(a)(2)
of the Social Security Act (42 U.S.C. 1395w-21(a)(2)), including each type
of Medicare+Choice plan that is a coordinated care plan (as described in
subparagraph (A) of such section); and
(B) the original medicare fee-for-service program under parts A and B
title XVIII of such Act (42 U.S.C. 1395 et seq.).
(2) CONSIDERATIONS- Such study shall specifically examine the effects,
costs, and feasibility of requiring entities, physicians, and other health
care providers that provide items and services under the original medicare
fee-for-service program to comply with quality standards and related
reporting requirements that are comparable to the quality standards and
related reporting requirements that are applicable to Medicare+Choice
organizations.
(3) REPORT- Not later than 2 years after the date of the enactment of
this Act, such Commission shall submit a report to Congress on the study
conducted under this subsection, together with any recommendations for
legislation that it determines to be appropriate as a result of such
study.
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