HR 4680 IH
106th CONGRESS
2d Session
H. R. 4680
To amend title XVIII of the Social Security Act to provide for a
voluntary program for prescription drug coverage under the Medicare Program, to
modernize the Medicare Program, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
June 15, 2000
Mr. THOMAS (for himself, Mr. BURR of North Carolina, Mr. PETERSON of
Minnesota, Mr. BLILEY, and Mr. HALL of Texas) introduced the following bill;
which was referred to the Committee on Ways and Means, and in addition to the
Committee on Commerce, 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 title XVIII of the Social Security Act to provide for a
voluntary program for prescription drug coverage under the Medicare Program, to
modernize the Medicare Program, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE- This Act may be cited as the `Medicare Rx 2000 Act'.
(b) TABLE OF CONTENTS- The table of contents of this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I--MEDICARE PRESCRIPTION DRUG BENEFIT
Sec. 101. Establishment of a medicare prescription drug benefit.
`Part D--Voluntary Prescription Drug Benefit Program
`Sec. 1860A. Benefits; eligibility; enrollment; and coverage
period.
`Sec. 1860B. Requirements for qualified prescription drug
coverage.
`Sec. 1860C. Beneficiary protections for qualified prescription drug
coverage.
`Sec. 1860D. Requirements for prescription drug plan (PDP)
sponsors.
`Sec. 1860E. Process for beneficiaries to select qualified prescription
drug coverage.
`Sec. 1860F. Premiums.
`Sec. 1860G. Premium and cost-sharing subsidies for low-income
individuals.
`Sec. 1860H. Subsidies for all medicare beneficiaries through
reinsurance for qualified prescription drug coverage.
`Sec. 1860I. Medicare Prescription Drug Account in Federal Supplementary
Medical Insurance Trust Fund.
`Sec. 1860J. Definitions; treatment of references to provisions in part
C.
Sec. 102. Offering of qualified prescription drug coverage under the
Medicare+Choice program.
Sec. 103. Medicaid amendments.
Sec. 104. Medigap transition provisions.
TITLE II--MODERNIZATION OF ADMINISTRATION OF MEDICARE
Subtitle A--Medicare Benefits Administration
Sec. 201. Establishment of administration.
`Sec. 1807. Medicare Benefits Administration.
Sec. 202. Miscellaneous administrative provisions.
Subtitle B--Oversight of Financial Sustainability of the Medicare
Program
Sec. 211. Additional requirements for annual financial report and
oversight on medicare program.
Subtitle C--Changes in Medicare Coverage and Appeals Process
Sec. 221. Revisions to medicare appeals process.
Sec. 222. Provisions with respect to limitations on liability of
beneficiaries.
Sec. 223. Waivers of liability for cost sharing amounts.
Sec. 224. Elimination of motions by the Secretary on decisions of the
Provider Reimbursement Review Board.
TITLE III--MEDICARE+CHOICE REFORMS; PRESERVATION OF MEDICARE PART B DRUG
BENEFIT
Subtitle A--Medicare+Choice Reforms
Sec. 301. Increase in national per capita Medicare+Choice growth
percentage in 2001 and 2002.
Sec. 302. Permanently removing application of budget neutrality
beginning in 2002.
Sec. 303. Increasing minimum payment amount.
Sec. 304. Allowing movement to 50:50 percent blend in 2002.
Sec. 305. Increased update for payment areas with only one or no
Medicare+Choice contracts.
Sec. 306. Permitting higher negotiated rates in certain Medicare+Choice
payment areas below national average.
Sec. 307. 10-year phase in of risk adjustment based on data from all
settings.
Subtitle B--Preservation of Medicare Coverage of Drugs and Biologicals
Sec. 311. Preservation of coverage of drugs and biologicals under part B
of the medicare program.
TITLE I--MEDICARE PRESCRIPTION DRUG BENEFIT
SEC. 101. ESTABLISHMENT OF A MEDICARE PRESCRIPTION DRUG BENEFIT.
(a) IN GENERAL- Title XVIII of the Social Security Act is amended--
(1) by redesignating part D as part E; and
(2) by inserting after part C the following new part:
`Part D--Voluntary Prescription Drug Benefit Program
`SEC. 1860A. BENEFITS; ELIGIBILITY; ENROLLMENT; AND COVERAGE PERIOD.
`(a) PROVISION OF QUALIFIED PRESCRIPTION DRUG COVERAGE THROUGH ENROLLMENT
IN PLANS- Subject to the succeeding provisions of this part, each individual
who is enrolled under part B is entitled to obtain qualified prescription drug
coverage (described in section 1860B(a)) as follows:
`(1) MEDICARE+CHOICE PLAN- If the individual is eligible to enroll in a
Medicare+Choice plan that provides qualified prescription drug coverage
under section 1851(j), the individual may enroll in the plan and obtain
coverage through such plan.
`(2) PRESCRIPTION DRUG PLAN- If the individual is not enrolled in a
Medicare+Choice plan that provides qualified prescription drug coverage, the
individual may enroll under this part in a prescription drug plan (as
defined in section 1860C(a)).
Such individuals shall have a choice of such plans under section
1860E(d).
`(b) GENERAL ELECTION PROCEDURES-
`(1) IN GENERAL- An individual may elect to enroll in a prescription
drug plan under this part, or elect the option of qualified prescription
drug coverage under a Medicare+Choice plan under part C, and change such
election only in such manner and form as may be prescribed by regulations of
the Administrator of the Medicare Benefits Administration (appointed under
section 1807(b)) (in this part referred to as the `Medicare Benefits
Administrator') and only during an election period prescribed in or under
this subsection.
`(A) IN GENERAL- Except as provided in this paragraph, the election
periods under this subsection shall be the same as the coverage election
periods under the Medicare+Choice program under section 1851(e),
including--
`(i) annual coordinated election periods; and
`(ii) special election periods.
In applying the last sentence of section 1851(e)(4) (relating to
discontinuance of a Medicare+Choice election during the first year of
eligibility) under this subparagraph, in the case of an election described
in such section in which the individual had elected or is provided
qualified prescription drug coverage at the time of such first enrollment,
the individual shall be permitted to enroll in a prescription drug plan
under this part at the time of the election of coverage under the original
fee-for-service plan.
`(B) INITIAL ELECTION PERIODS-
`(i) INDIVIDUALS CURRENTLY COVERED- In the case of an individual who
is enrolled under part B as of November 1, 2002, there shall be an
initial election period of 6 months beginning on that date.
`(ii) INDIVIDUAL COVERED IN FUTURE- In the case of an individual who
is first enrolled under part B after November 1, 2002, there shall be an
initial election period which is the same as the initial election period
under section 1851(e)(1).
`(C) ADDITIONAL SPECIAL ELECTION PERIODS- The Medicare Benefits
Administrator shall establish special election periods--
`(i) in cases of individuals who have and involuntarily lose
prescription drug coverage described in subsection (c)(2)(C);
and
`(ii) in cases described in section 1837(h) (relating to errors in
enrollment), in the same manner as such section applies to part
B.
`(D) ONE-TIME ENROLLMENT PERMITTED FOR CURRENT PART A ONLY
BENEFICIARIES- In the case of an individual who as of November 1,
2002--
`(i) is entitled to benefits under part A; and
`(ii) is not (and has not previously been) enrolled under part
B;
the individual shall be eligible to enroll in a prescription drug plan
under this part but only during the period described in subparagraph
(B)(i). If the individual enrolls in such a plan, the individual may
change such enrollment under this part, but the individual may not enroll
in a Medicare+Choice plan under part C unless the individual enrolls under
part B. Nothing in this subparagraph shall be construed as providing for
coverage under a prescription drug plan of benefits that are excluded
because of the application of section 1860B(f)(2)(B).
`(c) GUARANTEED ISSUE; COMMUNITY RATING; AND NONDISCRIMINATION-
`(A) IN GENERAL- An eligible individual who is eligible to elect
qualified prescription drug coverage under a prescription drug plan or
Medicare+Choice plan at a time during which elections are accepted under
this part with respect to the plan shall not be denied enrollment based on
any health status-related factor (described in section 2702(a)(1) of the
Public Health Service Act) or any other factor.
`(B) MEDICARE+CHOICE LIMITATIONS PERMITTED- The provisions of
paragraphs (2) and (3) (other than subparagraph (C)(i), relating to
default enrollment) of section 1851(g) (relating to priority and
limitation on termination of election) shall apply to PDP sponsors under
this subsection.
`(2) COMMUNITY-RATED PREMIUM-
`(A) IN GENERAL- In the case of an individual who maintains (as
determined under subparagraph (C)) continuous prescription drug coverage
since first qualifying to elect prescription drug coverage under this
part, a PDP sponsor or Medicare+Choice organization offering a
prescription drug plan or Medicare+Choice plan that provides qualified
prescription drug coverage and in which the individual is enrolled may not
deny, limit, or condition the coverage or provision of covered
prescription drug benefits or increase the premium under the plan based on
any health status-related factor described in section 2702(a)(1) of the
Public Health Service Act or any other factor.
`(B) LATE ENROLLMENT PENALTY- In the case of an individual who does
not maintain such continuous prescription drug coverage, a PDP sponsor or
Medicare+Choice organization may (notwithstanding any provision in this
title) increase the premium otherwise applicable or impose a pre-existing
condition exclusion with respect to qualified prescription drug coverage
in a manner that reflects additional actuarial risk involved. Such a risk
shall be established through an appropriate actuarial opinion of the type
described in subparagraphs (A) through (C) of section 2103(c)(4).
`(C) CONTINUOUS PRESCRIPTION DRUG COVERAGE- An individual is
considered for purposes of this part to be maintaining continuous
prescription drug coverage on and after a date if the individual
establishes that there is no period of 63 days or longer on and after such
date (beginning not earlier than January 1, 2003) during all of which the
individual did not have any of the following prescription drug
coverage:
`(i) COVERAGE UNDER PRESCRIPTION DRUG PLAN OR MEDICARE+CHOICE PLAN-
Qualified prescription drug coverage under a prescription drug plan or
under a Medicare+Choice plan.
`(ii) MEDICAID PRESCRIPTION DRUG COVERAGE- Prescription drug
coverage under a medicaid plan under title XIX, including through the
Program of All-inclusive Care for the Elderly (PACE) under section 1934,
through a social health maintenance organization (referred to in section
4104(c) of the Balanced Budget Act of 1997), or through a
Medicare+Choice project that demonstrates the application of capitation
payment rates for frail elderly medicare beneficiaries through the use
of a interdisciplinary team and through the provision of primary care
services to such beneficiaries by means of such a team at the nursing
facility involved.
`(iii) PRESCRIPTION DRUG COVERAGE UNDER GROUP HEALTH PLAN- Any
outpatient prescription drug coverage under a group health plan,
including a health benefits plan under the Federal Employees Health
Benefit Plan under chapter 89 of title 5, United States Code, and a
qualified retiree prescription drug plan as defined in section
1860H(f)(1).
`(iv) PRESCRIPTION DRUG COVERAGE UNDER CERTAIN MEDIGAP POLICIES-
Coverage under a medicare supplemental policy under section 1882 that
provides benefits for prescription drugs (whether or not such coverage
conforms to the standards for packages of benefits under section
1882(p)(1)), but only if the policy was in effect on January 1, 2003,
and only until the date such coverage is terminated.
`(v) STATE PHARMACEUTICAL ASSISTANCE PROGRAM- Coverage of
prescription drugs under a State pharmaceutical assistance
program.
`(vi) VETERANS' COVERAGE OF PRESCRIPTION DRUGS- Coverage of
prescription drugs for veterans under chapter 17 of title 38, United
States Code.
`(D) CERTIFICATION- For purposes of carrying out this paragraph, the
certifications of the type described in sections 2701(e) of the Public
Health Service Act and in section 9801(e) of the Internal Revenue Code
shall also include a statement for the period of coverage of whether the
individual involved had prescription drug coverage described in
subparagraph (C).
`(E) CONSTRUCTION- Nothing in this section shall be construed as
preventing the disenrollment of an individual from a prescription drug
plan or a Medicare+Choice plan based on the termination of an election
described in section 1851(g)(3), including for non-payment of premiums or
for other reasons specified in subsection (d)(3), which takes into account
a grace period described in section 1851(g)(3)(B)(i).
`(3) NONDISCRIMINATION- A PDP sponsor offering a prescription drug plan
shall not establish a service area in a manner that would discriminate based
on health or economic status of potential enrollees.
`(d) EFFECTIVE DATE OF ELECTIONS-
`(1) IN GENERAL- Except as provided in this section, the Medicare
Benefits Administrator shall provide that elections under subsection (b)
take effect at the same time as the Secretary provides that similar
elections under section 1851(e) take effect under section 1851(f).
`(2) NO ELECTION EFFECTIVE BEFORE 2003- In no case shall any election
take effect before January 1, 2003.
`(3) TERMINATION- The Medicare Benefits Administrator shall provide for
the termination of elections in the case of--
`(A) termination of coverage under part B (other than the case of an
individual described in subsection (b)(2)(D) (relating to part A only
individuals); and
`(B) termination of elections described in section 1851(g)(3)
(including failure to pay required premiums).
`SEC. 1860B. REQUIREMENTS FOR QUALIFIED PRESCRIPTION DRUG COVERAGE.
`(1) IN GENERAL- For purposes of this part and part C, the term
`qualified prescription drug coverage' means either of the following:
`(A) STANDARD COVERAGE WITH ACCESS TO NEGOTIATED PRICES- Standard
coverage (as defined in subsection (b)) and access to negotiated prices
under subsection (d).
`(B) ACTUARIALLY EQUIVALENT COVERAGE WITH ACCESS TO NEGOTIATED PRICES-
Coverage of covered outpatient drugs which meets the alternative coverage
requirements of subsection (c) and access to negotiated prices under
subsection (d).
`(2) PERMITTING ADDITIONAL OUTPATIENT PRESCRIPTION DRUG COVERAGE-
`(A) IN GENERAL- Subject to subparagraph (B), nothing in this part
shall be construed as preventing qualified prescription drug coverage from
including coverage of covered outpatient drugs that exceeds the coverage
required under paragraph (1), but any such additional coverage shall be
limited to coverage of covered outpatient drugs.
`(B) DISAPPROVAL AUTHORITY- The Medicare Benefits Administrator shall
review the offering of qualified prescription drug coverage under this
part or part C. If the Administrator finds that, in the case of a
qualified prescription drug coverage under a prescription drug plan or a
Medicare+Choice plan, that the organization or sponsor offering the
coverage is purposefully engaged in activities intended to result in
favorable selection of those eligible medicare beneficiaries obtaining
coverage through the plan, the Administrator may terminate the contract
with the sponsor or organization under this part or part C.
`(3) APPLICATION OF SECONDARY PAYOR PROVISIONS- The provisions of
section 1852(a)(4) shall apply under this part in the same manner as they
apply under part C.
`(b) STANDARD COVERAGE- For purposes of this part, the `standard coverage'
is coverage of covered outpatient drugs (as defined in subsection (f)) that
meets the following requirements:
`(1) DEDUCTIBLE- The coverage has an annual deductible--
`(A) for 2003, that is equal to $250; or
`(B) for a subsequent year, that is equal to the amount specified
under this paragraph for the previous year increased by the percentage
specified in paragraph (5) for the year involved.
Any amount determined under subparagraph (B) that is not a multiple of
$5 shall be rounded to the nearest multiple of $5.
`(2) LIMITS ON COST-SHARING- The coverage has cost-sharing (for costs
above the annual deductible specified in paragraph (1) and up to the initial
coverage limit under paragraph (3)) that is equal to 50 percent or that is
actuarially consistent (using processes established under subsection (e))
with an average expected payment of 50 percent of such costs.
`(3) INITIAL COVERAGE LIMIT- Subject to paragraph (4), the coverage has
an initial coverage limit on the maximum costs that may be recognized for
payment purposes (above the annual deductible)--
`(A) for 2003, that is equal to $2,100; or
`(B) for a subsequent year, that is equal to the amount specified in
this paragraph for the previous year, increased by the annual percentage
increase described in paragraph (5) for the year involved.
Any amount determined under subparagraph (B) that is not a multiple of
$25 shall be rounded to the nearest multiple of $25.
`(4) LIMITATION ON OUT-OF-POCKET EXPENDITURES BY BENEFICIARY-
`(A) IN GENERAL- Notwithstanding paragraph (3), the coverage provides
benefits without any cost-sharing after the individual has incurred costs
(as described in subparagraph (C)) for covered outpatient drugs in a year
equal to the annual out-of-pocket limit specified in subparagraph
(B).
`(B) ANNUAL OUT-OF-POCKET LIMIT- For purposes of this part, the
`annual out-of-pocket limit' specified in this subparagraph--
`(i) for 2003, is equal to $6,000; or
`(ii) for a subsequent year, is equal to the amount specified in the
subparagraph for the previous year, increased by the annual percentage
increase described in paragraph (5) for the year involved.
Any amount determined under clause (ii) that is not a multiple of $100
shall be rounded to the nearest multiple of $100.
`(C) APPLICATION- In applying subparagraph (A)--
`(i) incurred costs shall only include costs incurred for the annual
deductible (described in paragraph (1)), cost-sharing (described in
paragraph (2)), and amounts for which benefits are not provided because
of the application of the initial coverage limit described in paragraph
(3); but
`(ii) costs shall be treated as incurred without regard to whether
the individual or another person, including a State program, has paid
for such costs, but shall not be counted insofar as such costs are
covered as benefits under a prescription drug plan, a Medicare+Choice
plan, or other third-party coverage.
`(5) ANNUAL PERCENTAGE INCREASE- For purposes of this part, the annual
percentage increase specified in this paragraph for a year is equal to the
annual percentage increase in average per capita aggregate expenditures for
covered outpatient drugs in the United States for medicare beneficiaries, as
determined by the Medicare Benefits Administrator for the 12-month period
ending in July of the previous year.
`(c) ALTERNATIVE COVERAGE REQUIREMENTS- A prescription drug plan or
Medicare+Choice plan may provide a different prescription drug benefit design
from the standard coverage described in subsection (b)(1) so long as the
following requirements are met:
`(1) ASSURING AT LEAST ACTUARIALLY EQUIVALENT COVERAGE-
`(A) ASSURING EQUIVALENT VALUE OF TOTAL COVERAGE- The actuarial value
of the total coverage (as determined under subsection (e)) is at least
equal to the actuarial value (as so determined) of standard
coverage.
`(B) ASSURING EQUIVALENT UNSUBSIDIZED VALUE OF COVERAGE- The
unsubsidized value of the coverage is at least equal to the unsubsidized
value of standard coverage. For purposes of this subparagraph, the
unsubsidized value of coverage is the amount by which the actuarial value
of the coverage (as determined under subsection (e)) exceeds the actuarial
value of the reinsurance subsidy payments under section 1860H with respect
to such coverage.
`(C) ASSURING STANDARD PAYMENT FOR COSTS AT INITIAL COVERAGE LIMIT-
The coverage is designed, based upon an actuarially representative pattern
of utilization (as determined under subsection (e)), to provide for the
payment, with respect to costs incurred that are equal to the sum of the
deductible under subsection (b)(1) and the initial coverage limit under
subsection (b)(3), of an amount equal to at least such initial coverage
limit multiplied by the percentage specified in subsection
(b)(2).
`(2) LIMITATION ON OUT-OF-POCKET EXPENDITURES BY BENEFICIARIES- The
coverage provides the limitation on out-of-pocket expenditures by
beneficiaries described in subsection (b)(4).
`(d) ACCESS TO NEGOTIATED PRICES- Under qualified prescription drug
coverage offered by a PDP sponsor or a Medicare+Choice organization, the
sponsor or organization shall provide beneficiaries with access to negotiated
prices (including applicable discounts) used for payment for covered
outpatient drugs, regardless of the fact that no benefits may be payable under
the coverage with respect to such drugs because of the application of
cost-sharing or an initial coverage limit (described in subsection (b)(3)).
`(e) ACTUARIAL VALUATION; DETERMINATION OF ANNUAL PERCENTAGE INCREASES-
`(1) PROCESSES- For purposes of this section, the Medicare Benefits
Administrator shall establish processes and methods--
`(A) for determining the actuarial valuation of prescription drug
coverage, including--
`(i) an actuarial valuation of standard coverage and of the
reinsurance subsidy payments under section 1860H;
`(ii) the use of generally accepted actuarial principles and
methodologies; and
`(iii) applying the same methodology for determinations of
alternative coverage under subsection (c) as is used with respect to
determinations of standard coverage under subsection (b);
and
`(B) for determining annual percentage increases described in
subsection (b)(5).
`(2) USE OF OUTSIDE ACTUARIES- Under the processes under paragraph
(1)(A), PDP sponsors and Medicare+Choice organizations may use actuarial
opinions certified by independent, qualified actuaries to establish
actuarial values.
`(f) COVERED OUTPATIENT DRUGS DEFINED-
`(1) IN GENERAL- Except as provided in this subsection, for purposes of
this part, the term `covered outpatient drug' means--
`(A) a drug that may be dispensed only upon a prescription and that is
described in subparagraph (A)(i) or (A)(ii) of section 1927(k)(2);
or
`(B) a biological product or insulin described in subparagraph (B) or
(C) of such section.
`(A) IN GENERAL- Such term does not include drugs or classes of drugs,
or their medical uses, which may be excluded from coverage or otherwise
restricted under section 1927(d)(2), other than subparagraph (E) thereof
(relating to smoking cessation agents).
`(B) AVOIDANCE OF DUPLICATE COVERAGE- A drug prescribed for an
individual that would otherwise be a covered outpatient drug under this
part shall not be so considered if payment for such drug is available
under part A or B (but shall be so considered if such payment is not
available because benefits under part A or B have been exhausted), without
regard to whether the individual is entitled to benefits under part A or
enrolled under part B.
`(3) APPLICATION OF FORMULARY RESTRICTIONS- A drug prescribed for an
individual that would otherwise be a covered outpatient drug under this part
shall not be so considered under a plan if the plan excludes the drug under
a formulary that meets the requirements of section 1860C(f)(2) (including
providing an appeal process).
`(4) APPLICATION OF GENERAL EXCLUSION PROVISIONS- A prescription drug
plan or Medicare+Choice plan may exclude from qualified prescription drug
coverage any covered outpatient drug--
`(A) for which payment would not be made if section 1862(a) applied to
part D; or
`(B) which are not prescribed in accordance with the plan or this
part.
Such exclusions are determinations subject to reconsideration and appeal
pursuant to section 1860C(f).
`SEC. 1860C. BENEFICIARY PROTECTIONS FOR QUALIFIED PRESCRIPTION DRUG
COVERAGE.
`(a) GUARANTEED ISSUE AND NONDISCRIMINATION- For provisions requiring
guaranteed issue, community-rated premiums, and nondiscrimination, see
sections 1860A(c) and 1860F(b).
`(b) DISSEMINATION OF INFORMATION-
`(1) GENERAL INFORMATION- A PDP sponsor shall disclose, in a clear,
accurate, and standardized form to each enrollee with a prescription drug
plan offered by the sponsor under this part at the time of enrollment and at
least annually thereafter, the information described in section 1852(c)(1)
relating to such plan. Such information includes the following:
`(A) Access to covered outpatient drugs, including access through
pharmacy networks.
`(B) How any formulary used by the sponsor functions.
`(C) Co-payments and deductible requirements.
`(D) Grievance and appeals procedures.
`(2) DISCLOSURE UPON REQUEST OF GENERAL COVERAGE, UTILIZATION, AND
GRIEVANCE INFORMATION- Upon request of an individual eligible to enroll
under a prescription drug plan, the PDP sponsor shall provide the
information described in section 1852(c)(2) (other than subparagraph (D)) to
such individual.
`(3) RESPONSE TO BENEFICIARY QUESTIONS- Each PDP sponsor offering a
prescription drug plan shall have a mechanism for providing specific
information to enrollees upon request. The sponsor shall make available,
through an Internet website and in writing upon request, information on
specific changes in its formulary.
`(4) CLAIMS INFORMATION- Each PDP sponsor offering a prescription drug
plan must furnish to enrolled individuals in a form easily understandable to
such individuals an explanation of benefits (in accordance with section
1806(a) or in a comparable manner) and a notice of the benefits in relation
to initial coverage limit and annual out-of-pocket limit for the current
year, whenever prescription drug benefits are provided under this part
(except that such notice need not be provided more often than
monthly).
`(c) ACCESS TO COVERED BENEFITS-
`(1) ASSURING PHARMACY ACCESS- The PDP sponsor of the prescription drug
plan shall secure the participation of sufficient numbers of pharmacies
(which may include mail order pharmacies) to ensure convenient access
(including adequate emergency access) for enrolled beneficiaries. Nothing in
this paragraph shall be construed as requiring the participation of all
pharmacies in any area under a plan.
`(2) ACCESS TO NEGOTIATED PRICES FOR PRESCRIPTION DRUGS- The PDP sponsor
of a prescription drug plan shall issue such a card that may be used by an
enrolled beneficiary to assure access to negotiated prices under section
1860B(d) for the purchase of prescription drugs for which coverage is not
otherwise provided under the prescription drug plan.
`(3) REQUIREMENTS ON DEVELOPMENT AND APPLICATION OF FORMULARIES- Insofar
as a PDP sponsor of a prescription drug plan uses a formulary, the following
requirements must be met:
`(A) FORMULARY COMMITTEE- The sponsor must establish a pharmaceutical
and therapeutic committee that develops the formulary. Such committee
shall include at least one physician and at least one pharmacist.
`(B) INCLUSION OF DRUGS IN ALL THERAPEUTIC CATEGORIES- The formulary
must include drugs within all therapeutic categories and classes of
covered outpatient drugs (although not necessarily for all drugs within
such categories and classes).
`(C) APPEALS AND EXCEPTIONS TO APPLICATION- The PDP sponsor must have,
as part of the appeals process under subsection (i)(2), a process for
appeals for denials of coverage based on such application of the
formulary.
`(d) COST AND UTILIZATION MANAGEMENT; QUALITY ASSURANCE; MEDICATION
THERAPY MANAGEMENT PROGRAM-
`(1) IN GENERAL- The PDP sponsor shall have in place--
`(A) an effective cost and drug utilization management program,
including appropriate incentives to use generic drugs, when
appropriate;
`(B) quality assurance measures and systems to reduce medical errors
and adverse drug interactions, including a medication therapy management
program described in paragraph (2); and
`(C) a program to control fraud, abuse, and waste.
`(2) MEDICATION THERAPY MANAGEMENT PROGRAM-
`(A) IN GENERAL- A medication therapy management program described in
this paragraph is a program of drug therapy management and medication
administration that is designed to assure that covered outpatient drugs
under the prescription drug plan are appropriately used to achieve
therapeutic goals and reduce the risk of adverse events, including adverse
drug interactions.
`(B) ELEMENTS- Such program may include--
`(i) enhanced beneficiary understanding of such appropriate use
through beneficiary education, counseling, and other appropriate means;
and
`(ii) increased beneficiary adherence with prescription medication
regimens through medication refill reminders, special packaging, and
other appropriate means.
`(C) DEVELOPMENT OF PROGRAM IN COOPERATION WITH LICENSED PHARMACISTS-
The program shall be developed in cooperation with licensed pharmacists
and physicians.
`(D) CONSIDERATIONS IN PHARMACY FEES- The PDP sponsor of a
prescription drug program shall take into account, in establishing fees
for pharmacists and others providing services under the medication therapy
management program, the resources and time used in implementing the
program.
`(3) TREATMENT OF ACCREDITATION- Section 1852(e)(4) (relating to
treatment of accreditation) shall apply to prescription drug plans under
this part with respect to the following requirements, in the same manner as
they apply to Medicare+Choice plans under part C with respect to the
requirements described in a clause of section 1852(e)(4)(B):
`(A) Paragraph (1) (including quality assurance), including medication
therapy management program under paragraph (2).
`(B) Subsection (c)(1) (relating to access to covered
benefits).
`(C) Subsection (g) (relating to confidentiality and accuracy of
enrollee records).
`(e) GRIEVANCE MECHANISM- Each PDP sponsor shall provide meaningful
procedures for hearing and resolving grievances between the organization
(including any entity or individual through which the sponsor provides covered
benefits) and enrollees with prescription drug plans of the sponsor under this
part in accordance with section 1852(f).
`(f) COVERAGE DETERMINATIONS, RECONSIDERATIONS, AND APPEALS-
`(1) IN GENERAL- A PDP sponsor shall meet the requirements of section
1852(g) with respect to covered benefits under the prescription drug plan it
offers under this part in the same manner as such requirements apply to a
Medicare+Choice organization with respect to benefits it offers under a
Medicare+Choice plan under part C.
`(2) APPEALS OF FORMULARY DETERMINATIONS- Under the appeals process
under paragraph (1) an individual who is enrolled in a prescription drug
plan offered by a PDP sponsor may appeal to obtain coverage for a medically
necessary covered outpatient drug that is not on the formulary of the
sponsor (established under subsection (c)) if the prescribing physician
determines that the therapeutically similar drug that is on the formulary is
not effective for the enrollee or has significant adverse effects for the
enrollee.
`(g) CONFIDENTIALITY AND ACCURACY OF ENROLLEE RECORDS- A PDP sponsor shall
meet the requirements of section 1852(h) with respect to enrollees under this
part in the same manner as such requirements apply to a Medicare+Choice
organization with respect to enrollees under part C.
`SEC. 1860D. REQUIREMENTS FOR PRESCRIPTION DRUG PLAN (PDP) SPONSORS.
`(a) GENERAL REQUIREMENTS- Each PDP sponsor of a prescription drug plan
shall meet the following requirements:
`(1) LICENSURE- Subject to subsection (c), the sponsor is organized and
licensed under State law as a risk-bearing entity eligible to offer health
insurance or health benefits coverage in each State in which it offers a
prescription drug plan.
`(2) ASSUMPTION OF FULL FINANCIAL RISK-
`(A) IN GENERAL- Subject to subparagraph (B) and section 1860E(d)(2),
the entity assumes full financial risk on a prospective basis for
qualified prescription drug coverage that it offers under a prescription
drug plan and that is not covered under reinsurance under section
1860H.
`(B) REINSURANCE PERMITTED- The entity may obtain insurance or make
other arrangements for the cost of coverage provided to any enrolled
member under this part.
`(3) SOLVENCY FOR UNLICENSED SPONSORS- In the case of a sponsor that is
not described in paragraph (1), the sponsor shall meet solvency standards
established by the Medicare Benefits Administrator under subsection
(d).
`(b) CONTRACT REQUIREMENTS-
`(1) IN GENERAL- The Medicare Benefits Administrator shall not permit
the election under section 1860A of a prescription drug plan offered by a
PDP sponsor under this part, and the sponsor shall not be eligible for
payments under section 1860G or 1860H, unless the Administrator has entered
into a contract under this subsection with the sponsor with respect to the
offering of such plan. Such a contract with a sponsor may cover more than 1
prescription drug plan. Such contract shall provide that the sponsor agrees
to comply with the applicable requirements and standards of this part and
the terms and conditions of payment as provided for in this part.
`(2) INCORPORATION OF CERTAIN MEDICARE+CHOICE CONTRACT REQUIREMENTS- The
following provisions of section 1857 shall apply, subject to subsection
(c)(5), to contracts under this section in the same manner as they apply to
contracts under section 1857(a):
`(A) MINIMUM ENROLLMENT- Paragraphs (1) and (3) of section
1857(b).
`(B) CONTRACT PERIOD AND EFFECTIVENESS- Paragraphs (1) through (3) and
(5) of section 1857(c).
`(C) PROTECTIONS AGAINST FRAUD AND BENEFICIARY PROTECTIONS- Section
1857(d).
`(D) ADDITIONAL CONTRACT TERMS- Section 1857(e); except that in
applying section 1857(e)(2) under this part--
`(i) such section shall be applied separately to costs relating to
this part (from costs under part C);
`(ii) in no case shall the amount of the fee established under this
subparagraph for a plan exceed 20 percent of the maximum amount of the
fee that may be established under subparagraph (B) of such section;
and
`(iii) no fees shall be applied under this subparagraph with respect
to Medicare+Choice plans.
`(E) INTERMEDIATE SANCTIONS- Section 1857(g).
`(F) PROCEDURES FOR TERMINATION- Section 1857(h).
`(3) RULES OF APPLICATION FOR INTERMEDIATE SANCTIONS- In applying
paragraph (2)(E)--
`(A) the reference in section 1857(g)(1)(B) to section 1854 is deemed
a reference to this part; and
`(B) the reference in section 1857(g)(1)(F) to section
1852(k)(2)(A)(ii) shall not be applied.
`(c) WAIVER OF CERTAIN REQUIREMENTS TO EXPAND CHOICE-
`(1) IN GENERAL- In the case of an entity that seeks to offer a
prescription drug plan in a State, the Medicare Benefits Administrator shall
waive the requirement of subsection (a)(1) that the entity be licensed in
that State if the Administrator determines, based on the application and
other evidence presented to the Administrator, that any of the grounds for
approval of the application described in paragraph (2) has been met.
`(2) GROUNDS FOR APPROVAL- The grounds for approval under this paragraph
are the grounds for approval described in subparagraph (B), (C), and (D) of
section 1855(a)(2), and also include the application by a State of any
grounds other than those required under Federal law.
`(3) APPLICATION OF MEDICARE+CHOICE PSO WAIVER PROCEDURES- With respect
to an application for a waiver (or a waiver granted) under this subsection,
the provisions of subparagraphs (E), (F), and (G) of section 1855(a)(2)
shall apply.
`(4) LICENSURE DOES NOT SUBSTITUTE FOR OR CONSTITUTE CERTIFICATION- The
fact that an entity is licensed in accordance with subsection (a)(1) does
not deem the entity to meet other requirements imposed under this part for a
PDP sponsor.
`(5) REFERENCES TO CERTAIN PROVISIONS- For purposes of this subsection,
in applying provisions of section 1855(a)(2) under this subsection to
prescription drug plans and PDP sponsors--
`(A) any reference to a waiver application under section 1855 shall be
treated as a reference to a waiver application under paragraph (1);
and
`(B) any reference to solvency standards were treated as a reference
to solvency standards established under subsection (c).
`(d) SOLVENCY STANDARDS FOR NON-LICENSED SPONSORS-
`(1) ESTABLISHMENT- The Medicare Benefits Administrator shall establish,
by not later than October 1, 2001, financial solvency and capital adequacy
standards that an entity that does not meet the requirements of subsection
(a)(1) must meet to qualify as a PDP sponsor under this part.
`(2) COMPLIANCE WITH STANDARDS- Each PDP sponsor that is not licensed by
a State under subsection (a)(1) and for which a waiver application has been
approved under subsection (c) shall meet solvency and capital adequacy
standards established under paragraph (1). The Medicare Benefits
Administrator shall establish certification procedures for such PDP sponsors
with respect to such solvency standards in the manner described in section
1855(c)(2).
`(e) OTHER STANDARDS- The Medicare Benefits Administrator shall establish
by regulation other standards (not described in subsection (d)) for PDP
sponsors and plans consistent with, and to carry out, this part. The
Administrator shall publish such regulations by October 1, 2001. In order to
carry out this requirement in a timely manner, the Administrator may
promulgate regulations that take effect on an interim basis, after notice and
pending opportunity for public comment.
`(f) RELATION TO STATE LAWS-
`(1) IN GENERAL- The standards established under this subsection shall
supersede any State law or regulation (including standards described in
paragraph (2)) with respect to prescription drug plans which are offered by
PDP sponsors under this part to the extent such law or regulation is
inconsistent with such standards, in the same manner as such laws and
regulations are superseded under section 1856(b)(3).
`(2) STANDARDS SPECIFICALLY SUPERSEDED- State standards relating to the
following are superseded under this subsection:
`(A) Benefit requirements.
`(B) Requirements relating to inclusion or treatment of
providers.
`(C) Coverage determinations (including related appeals and grievance
processes).
`(3) PROHIBITION OF STATE IMPOSITION OF PREMIUM TAXES- No State may
impose a premium tax or similar tax with respect to premiums paid to PDP
sponsors for prescription drug plans under this part, or with respect to any
payments made to such a sponsor by the Medicare Benefits Administrator under
this part.
`SEC. 1860E. PROCESS FOR BENEFICIARIES TO SELECT QUALIFIED PRESCRIPTION DRUG
COVERAGE.
`(a) IN GENERAL- The Medicare Benefits Administrator, through the Office
of Beneficiary Assistance, shall establish, based upon and consistent with the
procedures used under part C (including section 1851), a process for the
selection of the prescription drug plan or Medicare+Choice plan which offer
qualified prescription drug coverage through which eligible individuals elect
qualified prescription drug coverage under this part.
`(b) ELEMENTS- Such process shall include the following:
`(1) Annual, coordinated election periods, in which such individuals can
change the qualifying plans through which they obtain coverage, in
accordance with section 1860A(b)(2).
`(2) Active dissemination of information to promote an informed
selection among qualifying plans based upon price, quality, and other
features, in the manner described in (and in coordination with) section
1851(d), including the provision of annual comparative information,
maintenance of a toll-free hotline, and the use of non-federal
entities.
`(3) Coordination of elections through filing with a Medicare+Choice
organization or a PDP sponsor, in the manner described in (and in
coordination with) section 1851(c)(2).
`(c) MEDICARE+CHOICE ENROLLEE IN PLAN OFFERING PRESCRIPTION DRUG COVERAGE
MAY ONLY OBTAIN BENEFITS THROUGH THE PLAN- An individual who is enrolled under
a Medicare+Choice plan that offers qualified prescription drug coverage may
only elect to receive qualified prescription drug coverage under this part
through such plan.
`(d) ASSURING ACCESS TO A CHOICE OF QUALIFIED PRESCRIPTION DRUG
COVERAGE-
`(1) IN GENERAL- The Medicare Benefits Administrator shall assure that
each individual who is enrolled under part B and who is residing in an area
has available a choice of enrollment in at least 2 qualifying plans (as
defined in paragraph (5)) in the area in which the individual resides, at
least 1 of which is a prescription drug plan.
`(2) GUARANTEEING ACCESS TO COVERAGE- In order to assure access under
paragraph (1) and consistent with paragraph (3), the Medicare Benefits
Administrator may provide financial incentives (including partial
underwriting of risk) for a PDP sponsor to expand the service area under an
existing prescription drug plan to adjoining or additional areas or to
establish such a plan (including offering such a plan on a regional or
nationwide basis), but only so long as (and to the extent) necessary to
assure the access guaranteed under paragraph (1).
`(3) LIMITATION ON AUTHORITY- In exercising authority under this
subsection, the Medicare Benefits Administrator--
`(A) shall not provide for the full underwriting of financial risk for
any PDP sponsor;
`(B) shall not provide for any underwriting of financial risk for a
public PDP sponsor with respect to the offering of a nationwide
prescription drug plan; and
`(C) shall seek to maximize the assumption of financial risk by PDP
sponsors or Medicare+Choice organizations.
`(4) REPORTS- The Medicare Benefits Administrator shall, in each annual
report to Congress under section 1807(f), include information on the
exercise of authority under this subsection. The Administrator also shall
include such recommendations as may be appropriate to minimize the exercise
of such authority, including minimizing the assumption of financial
risk.
`(5) QUALIFYING PLAN DEFINED- For purposes of this subsection, the term
`qualifying plan' means a prescription drug plan or a a Medicare+Choice plan
that includes qualified prescription drug coverage.
`SEC. 1860F. PREMIUMS.
`(a) SUBMISSION OF PREMIUMS AND RELATED INFORMATION-
`(1) IN GENERAL- Each PDP sponsor shall submit to the Medicare Benefits
Administrator information of the type described in paragraph (2) in the same
manner as information is submitted by a Medicare+Choice organization under
section 1854(a)(1).
`(2) TYPE OF INFORMATION- The information described in this paragraph is
the following:
`(A) Information on the qualified prescription drug coverage to be
provided.
`(B) Information on the actuarial value of the coverage.
`(C) Information on the monthly premium to be charged for the
coverage, including an actuarial certification of--
`(i) the actuarial basis for such premium;
`(ii) the portion of such premium attributable to benefits in excess
of standard coverage; and
`(iii) the reduction in such premium resulting from the reinsurance
subsidy payments provided under section 1860H.
`(D) Such other information as the Medicare Benefits Administrator may
require to carry out this part.
`(3) REVIEW- The Medicare Benefits Administrator shall review the
information filed under paragraph (2) and shall approve or disapprove such
rates, amounts, and values so submitted. In exercising such authority, the
Administrator shall take into account the reinsurance subsidy payments under
section 1860H and the adjusted community rate (as defined in section
1854(f)(3)) for the benefits covered and shall have the same authority to
negotiate the terms and conditions of such premiums and other terms and
conditions of plans as the Director of the Office of Personnel Management
has with respect to health benefits plans under chapter 89 of title 5,
United States Code.
`(b) UNIFORM PREMIUM- The premium for a prescription drug plan charged
under this section may not vary among individuals enrolled in the plan in the
same service area, except as is permitted under section 1860A(c)(2)(B)
(relating to late enrollment penalties).
`(c) TERMS AND CONDITIONS FOR IMPOSING PREMIUMS- The provisions of section
1854(d) shall apply under this part in the same manner as they apply under
part C, and, for this purpose, the reference in such section to section
1851(g)(3)(B)(i) is deemed a reference to section 1860A(d)(3)(B) (relating to
failure to pay premiums required under this part).
`(d) ACCEPTANCE OF REFERENCE PREMIUM AS FULL PREMIUM IF NO STANDARD (OR
EQUIVALENT) COVERAGE IN AN AREA-
`(1) IN GENERAL- If there is no standard prescription drug coverage (as
defined in paragraph (2)) offered in an area, in the case of an individual
who is eligible for a premium subsidy under section 1860G and resides in the
area, the PDP sponsor of any prescription drug plan offered in the area (and
any Medicare+Choice organization that offers qualified prescription drug
coverage in the area) shall accept the reference premium under section
1860G(b)(2) as payment in full for the premium charge for qualified
prescription drug coverage.
`(2) STANDARD PRESCRIPTION DRUG COVERAGE DEFINED- For purposes of this
subsection, the term `standard prescription drug coverage' means qualified
prescription drug coverage that is standard coverage or that has an
actuarial value equivalent to the actuarial value for standard
coverage.
`SEC. 1860G. PREMIUM AND COST-SHARING SUBSIDIES FOR LOW-INCOME
INDIVIDUALS.
`(1) FULL PREMIUM SUBSIDY AND REDUCTION OF COST-SHARING FOR INDIVIDUALS
WITH INCOME BELOW 135 PERCENT OF FEDERAL POVERTY LEVEL- In the case of a
subsidy eligible individual (as defined in paragraph (3)) who is determined
to have income that does not exceed 135 percent of the Federal poverty
level, the individual is entitled under this section--
`(A) to a premium subsidy equal to 100 percent of the amount described
in subsection (b)(1); and
`(B) subject to subsection (c), to the substitution for the
beneficiary cost-sharing described in paragraphs (1) and (2) of section
1860B(b) (up to the initial coverage limit specified in paragraph (3) of
such section) of amounts that are nominal.
`(2) SLIDING SCALE PREMIUM SUBSIDY FOR INDIVIDUALS WITH INCOME ABOVE
135, BUT BELOW 150 PERCENT, OF FEDERAL POVERTY LEVEL- In the case of a
subsidy eligible individual who is determined to have income that exceeds
135 percent, but does not exceed 150 percent, of the Federal poverty level,
the individual is entitled under this section to a premium subsidy
determined on a linear sliding scale ranging from 100 percent of the amount
described in subsection (b)(1) for individuals with incomes at 135 percent
of such level to 0 percent of such amount for individuals with incomes at
150 percent of such level.
`(3) DETERMINATION OF ELIGIBILITY-
`(A) SUBSIDY ELIGIBLE INDIVIDUAL DEFINED- For purposes of this
section, subject to subparagraph (D), the term `subsidy eligible
individual' means an individual who--
`(i) is eligible to elect, and has elected, to obtain qualified
prescription drug coverage under this part;
`(ii) has income below 150 percent of the Federal poverty line;
and
`(iii) meets the resources requirement described in section
1905(p)(1)(C).
`(B) DETERMINATIONS- The determination of whether an individual
residing in a State is a subsidy eligible individual and the amount of
such individual's income shall be determined under the State medicaid plan
for the State under section 1935(a). In the case of a State that does not
operate such a medicaid plan (either under title XIX or under a statewide
waiver granted under section 1115), such determination shall be made under
arrangements made by the Medicare Benefits Administrator.
`(C) INCOME DETERMINATIONS- For purposes of applying this
section--
`(i) income shall be determined in the manner described in section
1905(p)(1)(B); and
`(ii) the term `Federal poverty line' means the official poverty
line (as defined by the Office of Management and Budget, and revised
annually in accordance with section 673(2) of the Omnibus Budget
Reconciliation Act of 1981) applicable to a family of the size
involved.
`(D) TREATMENT OF TERRITORIAL RESIDENTS- In the case of an individual
who is not a resident of the 50 States or the District of Columbia, the
individual is not eligible to be a subsidy eligible individual but may be
eligible for financial assistance with prescription drug expenses under
section 1935(e).
`(b) PREMIUM SUBSIDY AMOUNT-
`(1) IN GENERAL- The premium subsidy amount described in this subsection
for an individual residing in an area is the reference premium (as defined
in paragraph (2)) for qualified prescription drug coverage offered by the
prescription drug plan or the Medicare+Choice plan in which the individual
is enrolled.
`(2) REFERENCE PREMIUM DEFINED- For purposes of this subsection, the
term `reference premium' means, with respect to qualified prescription drug
coverage offered under--
`(A) a prescription drug plan that--
`(i) provides standard coverage (or alternative prescription drug
coverage the actuarial value is equivalent to that of standard
coverage), the premium imposed for enrollment under the plan under this
part (determined without regard to any subsidy under this section or any
late enrollment penalty under section 1860A(c)(2)(B)); or
`(ii) provides alternative prescription drug coverage the actuarial
value of which is greater than that of standard coverage, the premium
described in clause (i) multiplied by the ratio of (I) the actuarial
value of standard coverage, to (II) the actuarial value of the
alternative coverage; or
`(B) a Medicare+Choice plan, the standard premium computed under
section 1851(j)(4)(A)(iii), determined without regard to any reduction
effected under section 1851(j)(4)(B).
`(c) RULES IN APPLYING COST-SHARING SUBSIDIES-
`(1) IN GENERAL- In applying subsection (a)(1)(B)--
`(A) the maximum amount of subsidy that may be provided with respect
to an enrollee for a year may not exceed 95 percent of the maximum
cost-sharing described in such subsection that may be incurred for
standard coverage;
`(B) the Medicare Benefits Administrator shall determine what is
`nominal' taking into account the rules applied under section 1916(a)(3);
and
`(C) nothing in this part shall be construed as preventing a plan or
provider from waiving or reducing the amount of cost-sharing otherwise
applicable.
`(2) LIMITATION ON CHARGES- In the case of an individual receiving
cost-sharing subsidies under subsection (a)(1)(B), the PDP sponsor may not
charge more than a nominal amount in cases in which the cost-sharing subsidy
is provided under such subsection.
`(d) ADMINISTRATION OF SUBSIDY PROGRAM- The Medicare Benefits
Administrator shall provide a process whereby, in the case of an individual
who is determined to be a subsidy eligible individual and who is enrolled in
prescription drug plan or is enrolled in a Medicare+Choice plan under which
qualified prescription drug coverage is provided--
`(1) the Administrator provides for a notification of the PDP sponsor or
Medicare+Choice organization involved that the individual is eligible for a
subsidy and the amount of the subsidy under subsection (a);
`(2) the sponsor or organization involved reduces the premiums or
cost-sharing otherwise imposed by the amount of the applicable subsidy and
submits to the Administrator information on the amount of such reduction;
and
`(3) the Administrator periodically and on a timely basis reimburses the
sponsor or organization for the amount of such reductions.
The reimbursement under paragraph (3) with respect to cost-sharing
subsidies may be computed on a capitated basis, taking into account the
actuarial value of the subsidies and with appropriate adjustments to reflect
differences in the risks actually involved.
`(e) RELATION TO MEDICAID PROGRAM-
`(1) IN GENERAL- For provisions providing for eligibility
determinations, and additional financing, under the medicaid program, see
section 1935.
`(2) MEDICAID PROVIDING WRAP AROUND BENEFITS- The coverage provided
under this part is primary payor to benefits for prescribed drugs provided
under the medicaid program under title XIX.
`SEC. 1860H. SUBSIDIES FOR ALL MEDICARE BENEFICIARIES THROUGH REINSURANCE
FOR QUALIFIED PRESCRIPTION DRUG COVERAGE.
`(a) REINSURANCE SUBSIDY PAYMENT- In order to reduce premium levels
applicable to qualified prescription drug coverage for all medicare
beneficiaries, to reduce adverse selection among prescription drug plans and
Medicare+Choice plans that provide qualified prescription drug coverage, and
to promote the participation of PDP sponsors under this part, the Medicare
Benefits Administrator shall provide in accordance with this section for
payment to a qualifying entity (as defined in subsection (b)) of the
reinsurance payment amount (as defined in subsection (c)) for excess costs
incurred in providing qualified prescription drug coverage--
`(1) for individuals enrolled with a prescription drug plan under this
part;
`(2) for individuals enrolled with a Medicare+Choice plan that provides
qualified prescription drug coverage under part C; and
`(3) for medicare primary individuals (described in subsection
(f)(3)(D)) who are enrolled in a qualified retiree prescription drug
plan.
This section constitutes budget authority in advance of appropriations
Acts and represents the obligation of the Administrator to provide for the
payment of amounts provided under this section.
`(b) QUALIFYING ENTITY DEFINED- For purposes of this section, the term
`qualifying entity' means any of the following that has entered into an
agreement with the Administrator to provide the Administrator with such
information as may be required to carry out this section:
`(1) A PDP sponsor offering a prescription drug plan under this
part.
`(2) A Medicare+Choice organization that provides qualified prescription
drug coverage under a Medicare+Choice plan under part C.
`(3) The sponsor of a qualified retiree prescription drug plan (as
defined in subsection (f)).
`(c) REINSURANCE PAYMENT AMOUNT-
`(1) IN GENERAL- Subject to subsection (d)(2) and paragraph (4), the
reinsurance payment amount under this subsection for a qualifying covered
individual (as defined in subsection (g)(1)) for a coverage year (as defined
in subsection (g)(2)) is equal to the sum of the following:
`(A) For the portion of the individual's gross covered prescription
drug costs (as defined in paragraph (3)) for the year that exceeds $1,250,
but does not exceed $1,350, an amount equal to 30 percent of the allowable
costs (as defined in paragraph (2)) attributable to such gross covered
prescription drug costs.
`(B) For the portion of the individual's gross covered prescription
drug costs for the year that exceeds $1,350, but does not exceed $1,450,
an amount equal to 50 percent of the allowable costs attributable to such
gross covered prescription drug costs.
`(C) For the portion of the individual's gross covered prescription
drug costs for the year that exceeds $1,450, but does not exceed $1,550,
an amount equal to 70 percent of the allowable costs attributable to such
gross covered prescription drug costs.
`(D) For the portion of the individual's gross covered prescription
drug costs for the year that exceeds $1,550, but does not exceed $2,350,
an amount equal to 90 percent of the allowable costs attributable to such
gross covered prescription drug costs.
`(E) For the portion of the individual's gross covered prescription
drug costs for the year that exceeds $7,050, an amount equal to 90 percent
of the allowable costs attributable to such gross covered prescription
drug costs.
`(2) ALLOWABLE COSTS- For purposes of this section, the term `allowable
costs' means, with respect to gross covered prescription drug costs under a
plan described in subsection (b) offered by a qualifying entity, the part of
such costs that are actually paid under the plan, but in no case more than
the part of such costs that would have been paid under the plan if the
prescription drug coverage under the plan were standard coverage.
`(3) GROSS COVERED PRESCRIPTION DRUG COSTS- For purposes of this
section, the term `gross covered prescription drug costs' means, with
respect to an enrollee with a qualifying entity under a plan described in
subsection (b) during a coverage year, the costs incurred under the plan for
covered prescription drugs dispensed during the year, including costs
relating to the deductible, whether paid by the enrollee or under the plan,
regardless of whether the coverage under the plan exceeds standard coverage
and regardless of when the payment for such drugs is made.
`(4) INDEXING DOLLAR AMOUNTS-
`(A) AMOUNTS FOR 2003- The dollar amounts applied under paragraph (1)
for 2003 shall be the dollar amounts specified in such paragraph.
`(B) FOR 2004- The dollar amounts applied under paragraph (1) for 2004
shall be the dollar amounts specified in such paragraph increased by the
annual percentage increase described in section 1860B(b)(5) for
2004.
`(C) FOR SUBSEQUENT YEARS- The dollar amounts applied under paragraph
(1) for a year after 2004 shall be the amounts (under this paragraph)
applied under paragraph (1) for the preceding year increased by the annual
percentage increase described in section 1860B(b)(5) for the year
involved.
`(D) ROUNDING- Any amount, determined under the preceding provisions
of this paragraph for a year, which is not a multiple of $5 shall be
rounded to the nearest multiple of $5.
`(d) ADJUSTMENT OF PAYMENTS-
`(1) IN GENERAL- The Medicare Benefits Administrator shall
estimate--
`(A) the total payments to be made (without regard to this subsection)
during a year under this section; and
`(B) the total payments to be made by qualifying entities for standard
coverage under plans described in subsection (b) during the year.
`(2) ADJUSTMENT OF PAYMENTS- The Administrator shall proportionally
adjust the payments made under this section for a coverage year in such
manner so that the total of the payments made for the year under this
section is equal to 35 percent of the total payments described in paragraph
(1)(B) during the year.
`(1) IN GENERAL- Payments under this section shall be based on such a
method as the Medicare Benefits Administrator determines. The Administrator
may establish a payment method by which interim payments of amounts under
this section are made during a year based on the Administrator's best
estimate of amounts that will be payable after obtaining all of the
information.
`(2) SOURCE OF PAYMENTS- Payments under this section shall be made from
the Medicare Prescription Drug Account.
`(f) QUALIFIED RETIREE PRESCRIPTION DRUG PLAN DEFINED-
`(1) IN GENERAL- For purposes of this section, the term `qualified
retiree prescription drug plan' means employment-based retiree health
coverage (as defined in paragraph (3)(A)) if, with respect to an individual
enrolled (or eligible to be enrolled) under this part who is covered under
the plan, the following requirements are met:
`(A) ASSURANCE- The sponsor of the plan shall annually attest, and
provide such assurances as the Medicare Benefits Administrator may
require, that the coverage meets the requirements for qualified
prescription drug coverage.
`(B) AUDITS- The sponsor (and the plan) shall maintain, and afford the
Medicare Benefits Administrator access to, such records as the
Administrator may require for purposes of audits and other oversight
activities necessary to ensure the adequacy of prescription drug coverage,
the accuracy of payments made, and such other matters as may be
appropriate.
`(C) PROVISION OF CERTIFICATION OF PRESCRIPTION DRUG COVERAGE- The
sponsor of the plan shall provide for issuance of certifications of the
type described in section 1860A(c)(2)(D).
`(D) OTHER REQUIREMENTS- The sponsor of the plan shall comply with
such other requirements as the Medicare Benefits Administrator finds
necessary to administer the program under this section.
`(2) LIMITATION ON BENEFIT ELIGIBILITY- No payment shall be provided
under this section with respect to an individual who is enrolled under a
qualified retiree prescription drug plan unless the individual is a medicare
primary individual who--
`(A) is covered under the plan; and
`(B) is eligible to obtain qualified prescription drug coverage under
section 1860A but did not elect such coverage under this part (either
through a prescription drug plan or through a Medicare+Choice
plan).
`(3) DEFINITIONS- As used in this section:
`(A) EMPLOYMENT-BASED RETIREE HEALTH COVERAGE- The term
`employment-based retiree health coverage' means health insurance or other
coverage of health care costs for medicare primary individuals (or for
such individuals and their spouses and dependents) based on their status
as former employees or labor union members.
`(B) EMPLOYER- The term `employer' has the meaning given such term by
section 3(5) of the Employee Retirement Income Security Act of 1974
(except that such term shall include only employers of two or more
employees).
`(C) SPONSOR- The term `sponsor' means a plan sponsor, as defined in
section 3(16)(B) of the Employee Retirement Income Security Act of
1974.
`(D) MEDICARE PRIMARY INDIVIDUAL- The term `medicare primary
individual' means, with respect to a plan, an individual who is covered
under the plan and with respect to whom the plan is not a primary plan (as
defined in section 1862(b)(2)(A)).
`(g) GENERAL DEFINITIONS- For purposes of this section:
`(1) QUALIFYING COVERED INDIVIDUAL- The term `qualifying covered
individual' means an individual who--
`(A) is enrolled with a prescription drug plan under this
part;
`(B) is enrolled with a Medicare+Choice plan that provides qualified
prescription drug coverage under part C; or
`(C) is covered as a medicare primary individual under a qualified
retiree prescription drug plan.
`(2) COVERAGE YEAR- The term `coverage year' means a calendar year in
which covered outpatient drugs are dispensed if a claim for payment is made
under the plan for such drugs, regardless of when the claim is paid.
`SEC. 1860I. MEDICARE PRESCRIPTION DRUG ACCOUNT IN FEDERAL SUPPLEMENTARY
MEDICAL INSURANCE TRUST FUND.
`(a) IN GENERAL- There is created within the Federal Supplementary Medical
Insurance Trust Fund established by section 1841 an account to be known as the
`Medicare Prescription Drug Account' (in this section referred to as the
`Account'). The Account shall consist of such gifts and bequests as may be
made as provided in section 201(i)(1), and such amounts as may be deposited
in, or appropriated to, such fund as provided in this part. Funds provided
under this part to the Account shall be kept separate from all other funds
within the Federal Supplementary Medical Insurance Trust Fund.
`(b) PAYMENTS FROM ACCOUNT-
`(1) IN GENERAL- The Managing Trustee shall pay from time to time from
the Account such amounts as the Medicare Benefits Administrator certifies
are necessary to make--
`(A) payments under section 1860G (relating to low-income subsidy
payments);
`(B) payments under section 1860H (relating to reinsurance subsidy
payments); and
`(C) payments with respect to administrative expenses under this part
in accordance with section 201(g).
`(2) TRANSFERS TO MEDICAID ACCOUNT FOR INCREASED ADMINISTRATIVE COSTS-
The Managing Trustee shall transfer from time to time from the Account to
the Grants to States for Medicaid account amounts the Secretary certifies
are attributable to increases in payment resulting from the application of a
higher Federal matching percentage under section 1935(b).
`(c) DEPOSITS INTO ACCOUNT-
`(1) MEDICAID TRANSFER- There is hereby transferred to the Account, from
amounts appropriated for Grants to States for Medicaid, amounts equivalent
to the aggregate amount of the reductions in payments under section
1903(a)(1) attributable to the application of section 1935(c).
`(2) APPROPRIATIONS TO COVER GOVERNMENT CONTRIBUTIONS- There are
authorized to be appropriated from time to time, out of any moneys in the
Treasury not otherwise appropriated, to the Account, an amount equivalent to
the amount of payments made from the Account under subsection (b), reduced
by the amount transferred to the Account under paragraph (1).
`SEC. 1860J. DEFINITIONS; TREATMENT OF REFERENCES TO PROVISIONS IN PART
C.
`(a) DEFINITIONS- For purposes of this part:
`(1) COVERED OUTPATIENT DRUGS- The term `covered outpatient drugs' is
defined in section 1860B(f).
`(2) INITIAL COVERAGE LIMIT- The term `initial coverage limit' means the
such limit as established under section 1860B(b)(3), or, in the case of
coverage that is not standard coverage, the comparable limit (if any)
established under the coverage.
`(3) MEDICARE PRESCRIPTION DRUG ACCOUNT- The term `Medicare Prescription
Drug Account' means the Account in the Federal Supplementary Medical
Insurance Trust Fund created under section 1860I(a).
`(4) PDP SPONSOR- The term `PDP sponsor' means an entity that is
certified under this part as meeting the requirements and standards of this
part for such a sponsor.
`(5) PRESCRIPTION DRUG PLAN- The term `prescription drug plan' means
health benefits coverage that--
`(A) is offered under a policy, contract, or plan by a PDP sponsor
pursuant to, and in accordance with, a contract between the Medicare
Benefits Administrator and the sponsor under section 1860D(b);
`(B) provides qualified prescription drug coverage; and
`(C) meets the applicable requirements of the section 1860C for a
prescription drug plan.
`(6) QUALIFIED PRESCRIPTION DRUG COVERAGE- The term `qualified
prescription drug coverage' is defined in section 1860B(a).
`(7) STANDARD COVERAGE- The term `standard coverage' is defined in
section 1860B(b).
`(b) APPLICATION OF MEDICARE+CHOICE PROVISIONS UNDER THIS PART- For
purposes of applying provisions of part C under this part with respect to a
prescription drug plan and a PDP sponsor, unless otherwise provided in this
part such provisions shall be applied as if--
`(1) any reference to a Medicare+Choice plan included a reference to a
prescription drug plan;
`(2) any reference to a provider-sponsored organization included a
reference to a PDP sponsor;
`(3) any reference to a contract under section 1857 included a reference
to a contract under section 1860D(b); and
`(4) any reference to part C included a reference to this part.'.
(c) CONFORMING AMENDMENTS TO FEDERAL SUPPLEMENTARY MEDICAL INSURANCE TRUST
FUND- Section 1841 of the Social Security Act (42 U.S.C. 1395t) is
amended--
(1) in the last sentence of subsection (a)--
(A) by striking `and' before `such amounts', and
(B) by inserting before the period the following: `and such amounts as
may be deposited in, or appropriated to, the Medicare Prescription Drug
Account established by section 1860I'; and
(2) in subsection (g), by inserting after `by this part,' the following:
`the payments provided for under part D (in which case the payments shall
come from the Medicare Prescription Drug Account in the Trust Fund),'.
(d) ADDITIONAL CONFORMING CHANGES-
(1) CONFORMING REFERENCES TO PREVIOUS PART D- Any reference in law (in
effect before the date of the enactment of this Act) to part D of title
XVIII of the Social Security Act is deemed a reference to part E of such
title (as in effect after such date).
(2) SECRETARIAL SUBMISSION OF LEGISLATIVE PROPOSAL- Not later than 6
months after the date of the enactment of this Act, the Secretary of Health
and Human Services shall submit to the appropriate committees of Congress a
legislative proposal providing for such technical and conforming amendments
in the law as are required by the provisions of this subtitle.
SEC. 102. OFFERING OF QUALIFIED PRESCRIPTION DRUG COVERAGE UNDER THE
MEDICARE+CHOICE PROGRAM.
(a) IN GENERAL- Section 1851 of the Social Security Act (42 U.S.C.
1395w-21) is amended by adding at the end the following new subsection:
`(j) AVAILABILITY OF PRESCRIPTION DRUG BENEFITS-
`(1) IN GENERAL- A Medicare+Choice organization may not offer
prescription drug coverage (other than that required under parts A and B) to
an enrollee under a Medicare+Choice plan unless such drug coverage is at
least qualified prescription drug coverage and unless the requirements of
this subsection with respect to such coverage are met.
`(2) COMPLIANCE WITH ADDITIONAL BENEFICIARY PROTECTIONS- With respect to
the offering of qualified prescription drug coverage by a Medicare+Choice
organization under a Medicare+Choice plan, the organization and plan shall
meet the requirements of section 1860C, including requirements relating to
information dissemination and grievance and appeals, in the same manner as
they apply to a PDP sponsor and a prescription drug plan under part D. The
Medicare Benefits Administrator shall waive such requirements to the extent
the Administrator determines that such requirements duplicate requirements
otherwise applicable to the organization or plan under this part.
`(3) TREATMENT OF COVERAGE- Except as provided in this subsection,
qualified prescription drug coverage offered under this subsection shall be
treated under this part in the same manner as supplemental health care
benefits described in section 1852(a)(3)(A).
`(4) AVAILABILITY OF PREMIUM AND COST-SHARING SUBSIDIES FOR LOW-INCOME
ENROLLEES AND REINSURANCE SUBSIDY PAYMENTS FOR ORGANIZATIONS- For
provisions--
`(A) providing premium and cost-sharing subsidies to low-income
individuals receiving qualified prescription drug coverage through a
Medicare+Choice plan, see section 1860G; and
`(B) providing a Medicare+Choice organization with reinsurance subsidy
payments for providing qualified prescription drug coverage under this
part, see section 1860H.
`(5) SPECIFICATION OF SEPARATE AND STANDARD PREMIUM-
`(A) IN GENERAL- For purposes of applying section 1854 and section
1860G(b)(2)(B) with respect to qualified prescription drug coverage
offered under this subsection under a plan, the Medicare+Choice
organization shall compute and publish the following:
`(i) SEPARATE PRESCRIPTION DRUG PREMIUM- A premium for prescription
drug benefits that constitute qualified prescription drug coverage that
is separate from other coverage under the plan.
`(ii) PORTION OF COVERAGE ATTRIBUTABLE TO STANDARD BENEFITS- The
ratio of the actuarial value of standard coverage to the actuarial value
of the qualified prescription drug coverage offered under the
plan.
`(iii) PORTION OF PREMIUM ATTRIBUTABLE TO STANDARD BENEFITS- A
standard premium equal to the product of the premium described in clause
(i) and the ratio under clause (ii).
The premium under clause (i) shall be compute without regard to any
reduction in the premium permitted under subparagraph (B).
`(B) REDUCTION OF PREMIUMS ALLOWED- Nothing in this subsection shall
be construed as preventing a Medicare+Choice organization from reducing
the amount of a premium charged for prescription drug coverage because of
the application of section 1854(f)(1)(A) to other coverage.
`(C) ACCEPTANCE OF REFERENCE PREMIUM AS FULL PREMIUM IF NO STANDARD
(OR EQUIVALENT) COVERAGE IN AN AREA- For requirement to accept reference
premium as full premium if there is no standard (or equivalent) coverage
in the area of a Medicare+Choice plan, see section 1860F(d).
`(6) TRANSITION IN INITIAL ENROLLMENT PERIOD- Notwithstanding any other
provision of this part, the annual, coordinated election period under
subsection (e)(3)(B) for 2003 shall be the 6-month period beginning with
November 2002.
`(7) QUALIFIED PRESCRIPTION DRUG COVERAGE; STANDARD COVERAGE- For
purposes of this part, the terms `qualified prescription drug coverage' and
`standard coverage' have the meanings given such terms in section
1860B.'.
(b) CONFORMING AMENDMENTS- Section 1851 of such Act (42 U.S.C. 1395w-21)
is amended--
(1) in subsection (a)(1)--
(A) by inserting `(other than qualified prescription drug benefits)'
after `benefits';
(B) by striking the period at the end of subparagraph (B) and
inserting a comma; and
(C) by adding after and below subparagraph (B) the following:
`and may elect qualified prescription drug coverage in accordance with
section 1860A.'; and
(2) in subsection (g)(1), by inserting `and section 1860A(c)(2)(B)'
after `in this subsection'.
(c) EFFECTIVE DATE- The amendments made by this section apply to coverage
provided on or after January 1, 2003.
SEC. 103. MEDICAID AMENDMENTS.
(a) DETERMINATIONS OF ELIGIBILITY FOR LOW-INCOME SUBSIDIES-
(1) REQUIREMENT- Section 1902 of the Social Security Act (42 U.S.C.
1396a) is amended--
(i) by striking `and' at the end of paragraph (64);
(ii) by striking the period at the end of paragraph (65) and
inserting `; and'; and
(iii) by inserting after paragraph (65) the following new
paragraph:
`(66) provide for making eligibility determinations under section
1935(a).'.
(2) NEW SECTION- Title XIX of such Act is further amended--
(A) by redesignating section 1935 as section 1936; and
(B) by inserting after section 1934 the following new
section:
`SPECIAL PROVISIONS RELATING TO MEDICARE PRESCRIPTION DRUG BENEFIT
`SEC. 1935. (a) REQUIREMENT FOR MAKING ELIGIBILITY DETERMINATIONS FOR
LOW-INCOME SUBSIDIES- As a condition of its State plan under this title under
section 1902(a)(66) and receipt of any Federal financial assistance under
section 1903(a), a State shall--
`(1) make determinations of eligibility for premium and cost-sharing
subsidies under (and in accordance with) section 1860G;
`(2) inform the Administrator of the Medicare Benefits Administration of
such determinations in cases in which such eligibility is established;
and
`(3) otherwise provide such Administrator with such information as may
be required to carry out part D of title XVIII (including section
1860G).
`(b) PAYMENTS FOR ADDITIONAL ADMINISTRATIVE COSTS-
`(1) IN GENERAL- The amounts expended by a State in carrying out
subsection (a) are, subject to paragraph (2), expenditures reimbursable
under the appropriate paragraph of section 1903(a); except that,
notwithstanding any other provision of such section, the applicable Federal
matching rates with respect to such expenditures under such section shall be
increased as follows:
`(A) For expenditures attributable to costs incurred during 2003, the
otherwise applicable Federal matching rate shall be increased by 20
percent of the percentage otherwise payable (but for this subsection) by
the State.
`(B) For expenditures attributable to costs incurred during 2004, the
otherwise applicable Federal matching rate shall be increased by 40
percent of the percentage otherwise payable (but for this subsection) by
the State.
`(C) For expenditures attributable to costs incurred during 2005, the
otherwise applicable Federal matching rate shall be increased by 60
percent of the percentage otherwise payable (but for this subsection) by
the State.
`(D) For expenditures attributable to costs incurred during 2006, the
otherwise applicable Federal matching rate shall be increased by 80
percent of the percentage otherwise payable (but for this subsection) by
the State.
`(E) For expenditures attributable to costs incurred after 2006, the
otherwise applicable Federal matching rate shall be increased to 100
percent.
`(2) COORDINATION- The State shall provide the Secretary with such
information as may be necessary to properly allocate administrative
expenditures described in paragraph (1) that may otherwise be made for
similar eligibility determinations.'.
(b) PHASED-IN FEDERAL ASSUMPTION OF MEDICAID RESPONSIBILITY FOR PREMIUM
AND COST-SHARING SUBSIDIES FOR DUALLY ELIGIBLE INDIVIDUALS-
(1) IN GENERAL- Section 1903(a)(1) of the Social Security Act (42 U.S.C.
1396b(a)(1)) is amended by inserting before the semicolon the following: `,
reduced by the amount computed under section 1935(c)(1) for the State and
the quarter'.
(2) AMOUNT DESCRIBED- Section 1935 of such Act, as inserted by
subsection (a)(2), is amended by adding at the end the following new
subsection:
`(c) FEDERAL ASSUMPTION OF MEDICAID PRESCRIPTION DRUG COSTS FOR
DUALLY-ELIGIBLE BENEFICIARIES-
`(1) IN GENERAL- For purposes of section 1903(a)(1), for a State that is
one of the 50 States or the District of Columbia for a calendar quarter in a
year (beginning with 2003) the amount computed under this subsection is
equal to the product of the following:
`(A) MEDICARE SUBSIDIES- The total amount of payments made in the
quarter under section 1860G (relating to premium and cost-sharing
prescription drug subsidies for low-income medicare beneficiaries) that
are attributable to individuals who are residents of the State and are
entitled to benefits with respect to prescribed drugs under the State plan
under this title (including such a plan operating under a waiver under
section 1115).
`(B) STATE MATCHING RATE- A proportion computed by subtracting from
100 percent the Federal medical assistance percentage (as defined in
section 1905(b)) applicable to the State and the quarter.
`(C) PHASE-OUT PROPORTION- The phase-out proportion (as defined in
paragraph (2)) for the quarter.
`(2) PHASE-OUT PROPORTION- For purposes of paragraph (1)(C), the
`phase-out proportion' for a calendar quarter in--
`(D) 2006 is 20 percent; or
`(E) a year after 2006 is 0 percent.'.
(c) MEDICAID PROVIDING WRAP-AROUND BENEFITS- Section 1935 of such Act, as
so inserted and amended, is further amended by adding at the end the following
new subsection:
`(d) ADDITIONAL PROVISIONS-
`(1) MEDICAID AS SECONDARY PAYOR- In the case of an individual dually
entitled to qualified prescription drug coverage under a prescription drug
plan under part D of title XVIII (or under a Medicare+Choice plan under part
C of such title) and medical assistance for prescribed drugs under this
title, medical assistance shall continue to be provided under this title for
prescribed drugs to the extent payment is not made under the prescription
drug plan or the Medicare+Choice plan selected by the individual.
`(2) CONDITION- A State may require, as a condition for the receipt of
medical assistance under this title with respect to prescription drug
benefits for an individual eligible to obtain qualified prescription drug
coverage described in paragraph (1), that the individual elect qualified
prescription drug coverage under section 1860A.'.
(d) TREATMENT OF TERRITORIES-
(1) IN GENERAL- Section 1935 of such Act, as so inserted and amended, is
further amended--
(A) in subsection (a)(1), by inserting `subject to subsection (e),'
after `section 1903 ';
(B) in subsection (c)(1), by inserting `subject to subsection (e),'
after `1903(a)'; and
(C) by adding at the end the following new subsection:
`(e) TREATMENT OF TERRITORIES-
`(1) IN GENERAL- In the case of a State, other than the 50 States and
the District of Columbia--
`(A) the previous provisions of this section shall not apply to
residents of such State; and
`(B) if the State establishes a plan described in paragraph (2) (for
providing medical assistance with respect to the provision of prescription
drugs to medicare beneficiaries), the amount otherwise determined under
section 1108(f) (as increased under section 1108(g)) for the State shall
be increased by the amount specified in paragraph (3).
`(2) PLAN- The plan described in this paragraph is a plan that--
`(A) provides medical assistance with respect to the provision of
covered outpatient drugs (as defined in section 1860B(f)) to low-income
medicare beneficiaries; and
`(B) assures that additional amounts received by the State that are
attributable to the operation of this subsection are used only for such
assistance.
`(A) IN GENERAL- The amount specified in this paragraph for a State
for a year is equal to the product of--
`(i) the aggregate amount specified in subparagraph (B);
and
`(ii) the amount specified in section 1108(g)(1) for that State,
divided by the sum of the amounts specified in such section for all such
States.
`(B) AGGREGATE AMOUNT- The aggregate amount specified in this
subparagraph for--
`(i) 2003, is equal to $20,000,000; or
`(ii) a subsequent year, is equal to the aggregate amount specified
in this subparagraph for the previous year increased by annual
percentage increase specified in section 1860(b)(5) for the year
involved.
`(4) REPORT- The Secretary shall submit to Congress a report on the
application of this subsection and may include in the report such
recommendations as the Secretary deems appropriate.'.
(2) CONFORMING AMENDMENT- Section 1108(f) of such Act is amended by
inserting `and section 1935(e)(1)(B)' after `Subject to subsection
(g)'.
SEC. 104. MEDIGAP TRANSITION PROVISIONS.
(a) IN GENERAL- Notwithstanding any other provision of law, no new
medicare supplemental policy that provides coverage of expenses for
prescription drugs may be issued under section 1882 of the Social Security Act
on or after January 1, 2003, to an individual unless it replaces a medicare
supplemental policy that was issued to that individual and that provided some
coverage of expenses for prescription drugs.
(b) ISSUANCE OF SUBSTITUTE POLICIES IF OBTAIN PRESCRIPTION DRUG COVERAGE
THROUGH MEDICARE-
(1) IN GENERAL- The issuer of a medicare supplemental policy--
(A) may not deny or condition the issuance or effectiveness of a
medicare supplemental policy that has a benefit package classified as `A',
`B', `C', `D', `E', `F', or `G' (under the standards established under
subsection (p)(2) of section 1882 of the Social Security Act, 42 U.S.C.
1395ss) and that is offered and is available for issuance to new enrollees
by such issuer;
(B) may not discriminate in the pricing of such policy, because of
health status, claims experience, receipt of health care, or medical
condition; and
(C) may not impose an exclusion of benefits based on a pre-existing
condition under such policy,
in the case of an individual described in paragraph (2) who seeks to
enroll under the policy not later than 63 days after the date of the
termination of enrollment described in such paragraph and who submits
evidence of the date of termination or disenrollment along with the
application for such medicare supplemental policy.
(2) INDIVIDUAL COVERED- An individual described in this paragraph is an
individual who--
(A) enrolls in a prescription drug plan under part D of title XVIII of
the Social Security Act; and
(B) at the time of such enrollment was enrolled and terminates
enrollment in a medicare supplemental policy which has a benefit package
classified as `H', `I', or `J' under the standards referred to in
paragraph (1)(A) or terminates enrollment in a policy to which such
standards do not apply but which provides benefits for prescription
drugs.
(3) ENFORCEMENT- The provisions of paragraph (1) shall be enforced as
though they were included in section 1882(s) of the Social Security Act (42
U.S.C. 1395ss(s)).
(4) DEFINITIONS- For purposes of this subsection, the term `medicare
supplemental policy' has the meaning given such term in section 1882(g) of
the Social Security Act (42 U.S.C. 1395ss(g)).
TITLE II--MODERNIZATION OF ADMINISTRATION OF MEDICARE
Subtitle A--Medicare Benefits Administration
SEC. 201. ESTABLISHMENT OF ADMINISTRATION.
(a) IN GENERAL- Title XVIII of the Social Security Act (42 U.S.C. 1395 et
seq.) is amended by inserting after section 1806 the following new section:
`MEDICARE BENEFITS ADMINISTRATION
`SEC. 1807. (a) ESTABLISHMENT- There is established within the Department
of Health and Human Services an agency to be known as the Medicare Benefits
Administration.
`(b) ADMINISTRATOR AND DEPUTY ADMINISTRATOR-
`(A) IN GENERAL- The Medicare Benefits Administration shall be headed
by an Administrator (in this section referred to as the `Administrator')
who shall be appointed by the President, by and with the advice and
consent of the Senate. The Administrator shall be in direct line of
authority to the Secretary.
`(B) COMPENSATION- The Administrator shall be paid at the rate of
basic pay payable for level III of the Executive Schedule under section
5314 of title 5, United States Code.
`(C) TERM OF OFFICE- The Administrator shall be appointed for a term
of 5 years. In any case in which a successor does not take office at the
end of an Administrator's term of office, that Administrator may continue
in office until the entry upon office of such a successor. An
Administrator appointed to a term of office after the commencement of such
term may serve under such appointment only for the remainder of such
term.
`(D) GENERAL AUTHORITY- The Administrator shall be responsible for the
exercise of all powers and the discharge of all duties of the
Administration, and shall have authority and control over all personnel
and activities thereof.
`(E) RULEMAKING AUTHORITY- The Administrator may prescribe such rules
and regulations as the Administrator determines necessary or appropriate
to carry out the functions of the Administration. The regulations
prescribed by the Administrator shall be subject to the rulemaking
procedures established under section 553 of title 5, United States
Code.
`(F) AUTHORITY TO ESTABLISH ORGANIZATIONAL UNITS- The Administrator
may establish, alter, consolidate, or discontinue such organizational
units or components within the Administration as the Administrator
considers necessary or appropriate, except that this subparagraph shall
not apply with respect to any unit, component, or provision provided for
by this section.
`(G) AUTHORITY TO DELEGATE- The Administrator may assign duties, and
delegate, or authorize successive redelegations of, authority to act and
to render decisions, to such officers and employees of the Administration
as the Administrator may find necessary. Within the limitations of such
delegations, redelegations, or assignments, all official acts and
decisions of such officers and employees shall have the same force and
effect as though performed or rendered by the Administrator.
`(2) DEPUTY ADMINISTRATOR-
`(A) IN GENERAL- There shall be a Deputy Administrator of the Medicare
Benefits Administration who shall be appointed by the President, by and
with the advice and consent of the Senate.
`(B) COMPENSATION- The Deputy Administrator shall be paid at the rate
of basic pay payable for level IV of the Executive Schedule under section
5315 of title 5, United States Code.
`(C) TERM OF OFFICE- The Deputy Administrator shall be appointed for a
term of 5 years. In any case in which a successor does not take office at
the end of a Deputy Administrator's term of office, such Deputy
Administrator may continue in office until the entry upon office of such a
successor. A Deputy Administrator appointed to a term of office after the
commencement of such term may serve under such appointment only for the
remainder of such term.
`(D) DUTIES- The Deputy Administrator shall perform such duties and
exercise such powers as the Administrator shall from time to time assign
or delegate. The Deputy Administrator shall be Acting Administrator of the
Administration during the absence or disability of the Administrator and,
unless the President designates another officer of the Government as
Acting Administrator, in the event of a vacancy in the office of the
Administrator.
`(3) SECRETARIAL COORDINATION OF PROGRAM ADMINISTRATION- The Secretary
shall ensure appropriate coordination between the Administrator and the
Administrator of the Health Care Financing Administration in carrying out
the programs under this title.
`(c) DUTIES; ADMINISTRATIVE PROVISIONS-
`(A) GENERAL DUTIES- The Administrator shall carry out parts C and D,
including--
`(i) negotiating, entering into, and enforcing, contracts with plans
for the offering of Medicare+Choice plans under part C, including the
offering of qualified prescription drug coverage under such plans;
and
`(ii) negotiating, entering into, and enforcing, contracts with PDP
sponsors for the offering of prescription drug plans under part
D.
`(B) OTHER DUTIES- The Administrator shall carry out any duty provided
for under part C or part D, including demonstration projects carried out
in part or in whole under such parts, the programs of all-inclusive care
for the elderly (PACE program) under section 1894, the social health
maintenance organization (SHMO) demonstration projects (referred to in
section 4104(c) of the Balanced Budget Act of 1997), and through a
Medicare+Choice project that demonstrates the application of capitation
payment rates for frail elderly medicare beneficiaries through the use of
a interdisciplinary team and through the provision of primary care
services to such beneficiaries by means of such a team at the nursing
facility involved).
`(C) ANNUAL REPORTS- Not later March 31 of each year, the
Administrator shall submit to Congress and the President a report on the
administration of parts C and D during the previous fiscal year.
`(A) IN GENERAL- The Administrator, with the approval of the
Secretary, may employ, without regard to chapter 31 of title 5, United
States Code, such officers and employees as are necessary to administer
the activities to be carried out through the Medicare Benefits
Administration.
`(B) FLEXIBILITY WITH RESPECT TO CIVIL SERVICE LAWS-
`(i) IN GENERAL- The staff of the Medicare Benefits Administration
shall be appointed without regard to the provisions of title 5, United
States Code, governing appointments in the competitive service, and,
subject to clause (ii), shall be paid without regard to the provisions
of chapter 51 and chapter 53 of such title (relating to classification
and schedule pay rates).
`(ii) MAXIMUM RATE- In no case may the rate of compensation
determined under clause (i) exceed the rate of basic pay payable for
level IV of the Executive Schedule under section 5315 of title 5, United
States Code.
`(3) REDELEGATION OF CERTAIN FUNCTIONS OF THE HEALTH CARE FINANCING
ADMINISTRATION-
`(A) IN GENERAL- The Secretary, the Administrator, and the
Administrator of the Health Care Financing Administration shall establish
an appropriate transition of responsibility in order to redelegate the
administration of part C from the Secretary and the Administrator of the
Health Care Financing Administration to the Administrator as is
appropriate to carry out the purposes of this section.
`(B) TRANSFER OF DATA AND INFORMATION- The Secretary shall ensure that
the Administrator of the Health Care Financing Administration transfers to
the Administrator of the Medicare Benefits Administration such information
and data in the possession of the Administrator of the Health Care
Financing Administration as the Administrator of the Medicare Benefits
Administration requires to carry out the duties described in paragraph
(1).
`(C) CONSTRUCTION- Insofar as a responsibility of the Secretary or the
Administrator of the Health Care Financing Administration is redelegated
to the Administrator under this section, any reference to the Secretary or
the Administrator of the Health Care Financing Administration in this
title or title XI with respect to such responsibility is deemed to be a
reference to the Administrator.
`(d) OFFICE OF BENEFICIARY ASSISTANCE-
`(1) ESTABLISHMENT- The Secretary shall establish within the Medicare
Benefits Administration an Office of Beneficiary Assistance to carry out
functions relating to medicare beneficiaries under this title, including
making determinations of eligibility of individuals for benefits under this
title, providing for enrollment of medicare beneficiaries under this title,
and the functions described in paragraph (2). The Office shall be separate
operating division within the Administration.
`(2) DISSEMINATION OF INFORMATION ON BENEFITS AND APPEALS RIGHTS-
`(A) DISSEMINATION OF BENEFITS INFORMATION- The Office of Beneficiary
Assistance shall disseminate to medicare beneficiaries, by mail, by
posting on the Internet site of the Medicare Benefits Administration and
through the toll-free telephone number provided for under section 1804(b),
information with respect to the following:
`(i) Benefits, and limitations on payment (including cost-sharing,
stop-loss provisions, and formulary restrictions) under parts C and
D.
`(ii) Benefits, and limitations on payment under parts A and B,
including information on medicare supplemental policies under section
1882.
Such information shall be presented in a manner so that medicare
beneficiaries may compare benefits under parts A, B, D, and medicare
supplemental policies with benefits under Medicare+Choice plans under part
C.
`(B) DISSEMINATION OF APPEALS RIGHTS INFORMATION- The Office of
Beneficiary Assistance shall disseminate to medicare beneficiaries in the
manner provided under subparagraph (A) a description of procedural rights
(including grievance and appeals procedures) of beneficiaries under the
original medicare fee-for-service program under parts A and B, the
Medicare+Choice program under part C, and the Voluntary Prescription Drug
Benefit Program under part D.
`(A) IN GENERAL- Within the Office of Beneficiary Assistance, there
shall be a Medicare Ombudsman, appointed by the Secretary from among
individuals with expertise and experience in the fields of health care and
advocacy, to carry out the duties described in subparagraph (B).
`(B) DUTIES- The Medicare Ombudsman shall--
`(i) receive complaints, grievances, and requests for information
submitted by a medicare beneficiary, with respect to any aspect of the
medicare program;
`(ii) provide assistance with respect to complaints, grievances, and
requests referred to in clause (i), including--
`(I) assistance in collecting relevant information for such
beneficiaries, to seek an appeal of a decision or determination made
by a fiscal intermediary, carrier, Medicare+Choice organization, a PDP
sponsor under part D, or the Secretary; and
`(II) assistance to such beneficiaries with any problems arising
from disenrollment from a Medicare+Choice plan under part C or a
prescription drug plan under part D; and
`(iii) submit annual reports to Congress, the Secretary, and the
Medicare Policy Advisory Board describing the activities of the Office,
and including such recommendations for improvement in the administration
of this title as the Ombudsman determines appropriate.
`(C) COORDINATION WITH STATE OMBUDSMAN PROGRAMS AND CONSUMER
ORGANIZATIONS- The Medicare Ombudsman shall, to the extent appropriate,
coordinate with State medical Ombudsman programs, and with State- and
community-based consumer organizations, to--
`(i) provide information about the medicare program; and
`(ii) conduct outreach to educate medicare beneficiaries with
respect to manners in which problems under the medicare program may be
resolved or avoided.
`(e) MEDICARE POLICY ADVISORY BOARD-
`(1) ESTABLISHMENT- There is established within the Medicare Benefits
Administration the Medicare Policy Advisory Board (in this section referred
to the `Board'). The Board shall advise, consult with, and make
recommendations to the Administrator of the Medicare Benefits Administration
with respect to the administration of parts C and D, including the review of
payment policies under such parts.
`(A) IN GENERAL- With respect to matters of the administration of
parts C and D, the Board shall submit to Congress and to the Administrator
of the Medicare Benefits Administration such reports as the Board
determines appropriate. Each such report may contain such recommendations
as the Board determines appropriate for legislative or administrative
changes to improve the administration of such parts, including the topics
described in subparagraph (B). Each such report shall be published in the
Federal Register.
`(B) TOPICS DESCRIBED- Reports required under subparagraph (A) may
include the following topics:
`(i) FOSTERING COMPETITION- Recommendations or proposals to increase
competition under parts C and D for services furnished to medicare
beneficiaries.
`(ii) EDUCATION AND ENROLLMENT- Recommendations for the improvement
to efforts to provide medicare beneficiaries information and education
on the program under this title, and specifically parts C and D, and the
program for enrollment under the title.
`(iii) IMPLEMENTATION OF RISK-ADJUSTMENT- Evaluation of the
implementation under section 1853(a)(3)(C) of the risk adjustment
methodology to payment rates under that section to Medicare+Choice
organizations offering Medicare+Choice plans that accounts for
variations in per capita costs based on health status and other
demographic factors.
`(iv) DISEASE MANAGEMENT PROGRAMS- Recommendations on the
incorporation of disease management programs under parts C and
D.
`(C) MAINTAINING INDEPENDENCE OF BOARD- The Board shall directly
submit to Congress reports required under subparagraph (A). No officer or
agency of the United States may require the Board to submit to any officer
or agency of the United States for approval, comments, or review, prior to
the submission to Congress of such reports.
`(3) DUTY OF ADMINISTRATOR OF MEDICARE BENEFITS ADMINISTRATION- With
respect to any report submitted by the Board under paragraph (2)(A), not
later than 90 days after the report is submitted, the Administrator of the
Medicare Benefits Administration shall submit to Congress and the President
an analysis of recommendations made by the Board in such report. Each such
analysis shall be published in the Federal Register.
`(A) APPOINTMENT- Subject to the succeeding provisions of this
paragraph, the Board shall consist of 7 members to be appointed as
follows:
`(i) 3 members shall be appointed by the President.
`(ii) 2 members shall be appointed by the Speaker of the House of
Representatives, with the advice of the chairman and the ranking
minority member of the Committees on Ways and Means and on Commerce of
the House of Representatives.
`(iii) 2 members shall be appointed by the President pro tempore of
the Senate with the advice of the chairman and the ranking minority
member of the Senate Committee on Finance.
`(B) QUALIFICATIONS- The members shall be chosen on the basis of their
integrity, impartiality, and good judgment, and shall be individuals who
are, by reason of their education and experience in health care benefits
management, exceptionally qualified to perform the duties of members of
the Board.
`(C) PROHIBITION ON INCLUSION OF FEDERAL EMPLOYEES- No officer or
employee of the United States may serve as a member of the Board.
`(5) COMPENSATION- Members of the Board shall receive, for each day
(including travel time) they are engaged in the performance of the functions
of the board, compensation at rates not to exceed the daily equivalent to
the annual rate in effect for level IV of the Executive Schedule under
section 5315 of title 5, United States Code.
`(A) IN GENERAL- The term of office of members of the Board shall be 3
years.
`(B) TERMS OF INITIAL APPOINTEES- As designated by the President at
the time of appointment, of the members first appointed--
`(i) 1 shall be appointed for a term of 1 year;
`(ii) 3 shall be appointed for terms of 2 years; and
`(iii) 3 shall be appointed for terms of 3 years.
`(C) REAPPOINTMENTS- Any person appointed as a member of the Board may
not serve for more than 8 years.
`(D) VACANCY- Any member appointed to fill a vacancy occurring before
the expiration of the term for which the member's predecessor was
appointed shall be appointed only for the remainder of that term. A member
may serve after the expiration of that member's term until a successor has
taken office. A vacancy in the Board shall be filled in the manner in
which the original appointment was made.
`(7) CHAIR- The Chair of the Board shall be elected by the members. The
term of office of the Chair shall be 3 years.
`(8) MEETINGS- The Board shall meet at the call of the Chair, but in no
event less than 3 times during each fiscal year.
`(A) APPOINTMENT OF DIRECTOR- The Board shall have a Director who
shall be appointed by the Chair.
`(B) STAFF- With the approval of the Board, the Director may appoint
and fix the pay of such additional personnel as the Director considers
appropriate.
`(C) FLEXIBILITY IN APPLICATION OF CIVIL SERVICE LAWS-
`(i) IN GENERAL- The Director and staff of the Board shall be
appointed without regard to the provisions of chapter 31 of title 5,
United States Code, governing appointments in the competitive service,
and, subject to clause (ii), shall be paid without regard to the
provisions of chapters 51 and 53 of such title (relating to
classification and General Schedule pay rates).
`(ii) MAXIMUM RATE- In no case may the rate of compensation
determined under clause (i) exceed the rate of basic pay payable for
level IV of the Executive Schedule under section 5315 of title 5, United
States Code.
`(D) ASSISTANCE FROM THE ADMINISTRATOR OF THE MEDICARE BENEFITS
ADMINISTRATION- The Administrator of the Medicare Benefits Administration
shall make available to the Board such information and other assistance as
it may require to carry out its functions.
`(10) CONTRACT AUTHORITY- The Board may contract with and compensate
government and private agencies or persons to carry out its duties under
this subsection, without regard to section 3709 of the Revised Statutes (41
U.S.C. 5).
`(f) FUNDING- There is authorized to be appropriated, in appropriate part
from the Federal Hospital Insurance Trust Fund and from the Federal
Supplementary Medical Insurance Trust Fund (including the Medicare
Prescription Drug Account), such sums as are necessary to carry out this
section.'.
(1) IN GENERAL- The amendment made by subsection (a) shall take effect
on the date of the enactment of this Act.
(2) TIMING OF INITIAL APPOINTMENTS- The Administrator and Deputy
Administrator of the Medicare Benefits Administration may not be appointed
before March 1, 2001.
(3) DUTIES WITH RESPECT TO ELIGIBILITY DETERMINATIONS AND ENROLLMENT-
The Administrator of the Medicare Benefits Administration shall carry out
enrollment under title XVIII of the Social Security Act, make eligibility
determinations under such title, and carry out part C of such title for
years beginning or after January 1, 2003.
SEC. 202. MISCELLANEOUS ADMINISTRATIVE PROVISIONS.
(a) ADMINISTRATOR AS MEMBER OF THE BOARD OF TRUSTEES OF THE MEDICARE TRUST
FUNDS- Section 1817(b) and section 1841(b) of the Social Security Act (42
U.S.C. 1395i(b), 1395t(b)) are each amended by striking `and the Secretary of
Health and Human Services, all ex officio,' and inserting `, the Secretary of
Health and Human Services, and the Administrator of the Medicare Benefits
Administration, all ex officio,'.
(b) INCREASE IN GRADE TO EXECUTIVE LEVEL III FOR THE ADMINISTRATOR OF THE
HEALTH CARE FINANCING ADMINISTRATION-
(1) IN GENERAL- Section 5314 of title 5, United States Code, by adding
at the end the following:
`Administrator of the Health Care Financing Administration.'.
(2) CONFORMING AMENDMENT- Section 5315 of such title is amended by
striking `Administrator of the Health Care Financing Administration.'.
(3) EFFECTIVE DATE- The amendments made by this subsection take effect
on March 1, 2001.
Subtitle B--Oversight of Financial Sustainability of the Medicare
Program
SEC. 211. ADDITIONAL REQUIREMENTS FOR ANNUAL FINANCIAL REPORT AND OVERSIGHT
ON MEDICARE PROGRAM.
(a) IN GENERAL- Section 1817 of the Social Security Act (42 U.S.C. 1395i)
is amended by adding at the end the following new subsection:
`(l) COMBINED REPORT ON OPERATION AND STATUS OF THE TRUST FUND AND THE
FEDERAL SUPPLEMENTARY MEDICAL INSURANCE TRUST FUND-
`(1) IN GENERAL- In addition to the duty of the Board of Trustees to
report to Congress under subsection (b), on the date the Board submits the
report required under subsection (b)(2), the Board shall submit to Congress
a report on the operation and status of the Trust Fund and the Federal
Supplementary Medical Insurance Trust Fund established under section 1841
(in this subsection referred to as the `Trust Funds'). Such report shall
included the following information:
`(A) OVERALL SPENDING FROM THE GENERAL FUND OF THE TREASURY- A
statement of total amounts obligated during the preceding fiscal year from
the General Revenues of the Treasury to the Trust Funds for payment for
benefits covered under this title, stated in terms of the total amount and
in terms of the percentage such amount bears to all other amounts
obligated from such General Revenues during such fiscal year.
`(B) HISTORICAL OVERVIEW OF SPENDING- From the date of the inception
of the program of insurance under this title through the fiscal year
involved, a statement of the total amounts referred to in subparagraph
(A).
`(C) 10-YEAR AND 50-YEAR PROJECTIONS- An estimate of total amounts
referred to in subparagraph (A) required to be obligated for payment for
benefits covered under this title for each of the 10 fiscal years
succeeding the fiscal year involved and for the 50-year period beginning
with the succeeding fiscal year.
`(D) RELATION TO GDP GROWTH- A comparison of the rate of growth of the
total amounts referred to in subparagraph (A) to the rate of growth in the
gross domestic product for the same period.
`(2) PUBLICATION- Each report submitted under paragraph (1) shall be
published by the Committee on Ways and Means as a public document and shall
be made available by such Committee on the Internet.'.
(b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply with
respect to fiscal years beginning on or after the date of the enactment of
this Act.
(c) CONGRESSIONAL HEARINGS- It is the sense of Congress that the
committees of jurisdiction shall hold hearings on the reports submitted under
section 1817(l) of the Social Security Act.
Subtitle C--Changes in Medicare Coverage and Appeals
Process
SEC. 221. REVISIONS TO MEDICARE APPEALS PROCESS.
(a) CONDUCT OF RECONSIDERATIONS OF DETERMINATIONS BY INDEPENDENT
CONTRACTORS- Section 1869 of the Social Security Act (42 U.S.C. 1395ff) is
amended to read as follows:
`DETERMINATIONS; APPEALS
`SEC. 1869. (a) INITIAL DETERMINATIONS- The Secretary shall promulgate
regulations and make initial determinations with respect to benefits under
part A or part B in accordance with those regulations for the following:
`(1) The initial determination of whether an individual is entitled to
benefits under such parts.
`(2) The initial determination of the amount of benefits available to
the individual under such parts.
`(3) Any other initial determination with respect to a claim for
benefits under such parts, including an initial determination by the
Secretary that payment may not be made, or may no longer be made, for an
item or service under such parts, an initial determination made by a
utilization and quality control peer review organization under section
1154(a)(2), and an initial determination made by an entity pursuant to a
contract with the Secretary to administer provisions of this title or title
XI.
`(A) RECONSIDERATION OF INITIAL DETERMINATION- Subject to subparagraph
(D), any individual dissatisfied with any initial determination under
subsection (a) shall be entitled to reconsideration of the determination,
and, subject to subparagraphs (D) and (E), a hearing thereon by the
Secretary to the same extent as is provided in section 205(b) and to
judicial review of the Secretary's final decision after such hearing as is
provided in section 205(g).
`(B) REPRESENTATION BY PROVIDER OR SUPPLIER-
`(i) IN GENERAL- Sections 206(a), 1102, and 1871 shall not be
construed as authorizing the Secretary to prohibit an individual from
being represented under this section by a person that furnishes or
supplies the individual, directly or indirectly, with services or items,
solely on the basis that the person furnishes or supplies the individual
with such a service or item.
`(ii) MANDATORY WAIVER OF RIGHT TO PAYMENT FROM BENEFICIARY- Any
person that furnishes services or items to an individual may not
represent an individual under this section with respect to the issue
described in section 1879(a)(2) unless the person has waived any rights
for payment from the beneficiary with respect to the services or items
involved in the appeal.
`(iii) PROHIBITION ON PAYMENT FOR REPRESENTATION- If a person
furnishes services or items to an individual and represents the
individual under this section, the person may not impose any financial
liability on such individual in connection with such
representation.
`(iv) REQUIREMENTS FOR REPRESENTATIVES OF A BENEFICIARY- The
provisions of section 205(j) and section 206 (regarding representation
of claimants) shall apply to representation of an individual with
respect to appeals under this section in the same manner as they apply
to representation of an individual under those sections.
`(C) SUCCESSION OF RIGHTS IN CASES OF ASSIGNMENT- The right of an
individual to an appeal under this section with respect to an item or
service may be assigned to the provider of services or supplier of the
item or service upon the written consent of such individual using a
standard form established by the Secretary for such an
assignment.
`(D) TIME LIMITS FOR APPEALS-
`(i) RECONSIDERATIONS- Reconsideration under subparagraph (A) shall
be available only if the individual described subparagraph (A) files
notice with the Secretary to request reconsideration by not later than
180 days after the individual receives notice of the initial
determination under subsection (a) or within such additional time as the
Secretary may allow.
`(ii) HEARINGS CONDUCTED BY THE SECRETARY- The Secretary shall
establish in regulations time limits for the filing of a request for a
hearing by the Secretary in accordance with provisions in sections 205
and 206.
`(E) AMOUNTS IN CONTROVERSY-
`(i) IN GENERAL- A hearing (by the Secretary) shall not be available
to an individual under this section if the amount in controversy is less
than $100, and judicial review shall not be available to the individual
if the amount in controversy is less than $1,000.
`(ii) AGGREGATION OF CLAIMS- In determining the amount in
controversy, the Secretary, under regulations, shall allow 2 or more
appeals to be aggregated if the appeals involve--
`(I) the delivery of similar or related services to the same
individual by one or more providers of services or suppliers,
or
`(II) common issues of law and fact arising from services
furnished to 2 or more individuals by one or more providers of
services or suppliers.
`(F) EXPEDITED PROCEEDINGS-
`(i) EXPEDITED DETERMINATION- In the case of an individual
who--
`(I) has received notice by a provider of services that the
provider of services plans to terminate services provided to an
individual and a physician certifies that failure to continue the
provision of such services is likely to place the individual's health
at significant risk, or
`(II) has received notice by a provider of services that the
provider of services plans to discharge the individual from the
provider of services,
the individual may request, in writing or orally, an expedited
determination or an expedited reconsideration of an initial
determination made under subsection (a), as the case may be, and the
Secretary shall provide such expedited determination or expedited
reconsideration.
`(ii) EXPEDITED HEARING- In a hearing by the Secretary under this
section, in which the moving party alleges that no material issues of
fact are in dispute, the Secretary shall make an expedited determination
as to whether any such facts are in dispute and, if not, shall render a
decision expeditiously.
`(G) REOPENING AND REVISION OF DETERMINATIONS- The Secretary may
reopen or revise any initial determination or reconsidered determination
described in this subsection under guidelines established by the Secretary
in regulations.
`(2) REVIEW OF COVERAGE DETERMINATIONS-
`(A) NATIONAL COVERAGE DETERMINATIONS-
`(i) IN GENERAL- Review of any national coverage determination shall
be subject to the following limitations:
`(I) Such a determination shall not be reviewed by any
administrative law judge.
`(II) Such a determination shall not be held unlawful or set aside
on the ground that a requirement of section 553 of title 5, United
States Code, or section 1871(b) of this title, relating to publication
in the Federal Register or opportunity for public comment, was not
satisfied.
`(III) Upon the filing of a complaint by an aggrieved party, such
a determination shall be reviewed by the Departmental Appeals Board of
the Department of Health and Human Services. In conducting such a
review, the Departmental Appeals Board shall review the record and
shall permit discovery and the taking of evidence to evaluate the
reasonableness of the determination. In reviewing such a
determination, the Departmental Appeals Board shall defer only to the
reasonable findings of fact, reasonable interpretations of law, and
reasonable applications of fact to law by the
Secretary.
`(IV) A decision of the Departmental Appeals Board constitutes a
final agency action and is subject to judicial review.
`(ii) DEFINITION OF NATIONAL COVERAGE DETERMINATION- For purposes of
this section, the term `national coverage determination' means a
determination by the Secretary respecting whether or not a particular
item or service is covered under this title, including such a
determination under 1862(a)(1).
`(B) LOCAL COVERAGE DETERMINATION- In the case of a local coverage
determination made by a fiscal intermediary or a carrier under part A or
part B respecting whether a particular type or class of items or services is
covered under such parts, the following limitations apply:
`(i) Upon the filing of a complaint by an aggrieved party, such a
determination shall be reviewed by an administrative law judge of the
Social Security Administration. The administrative law judge shall review
the record and shall permit discovery and the taking of evidence to
evaluate the reasonableness of the determination. In reviewing such a
determination, the administrative law judge shall defer only to the
reasonable findings of fact, reasonable interpretations of law, and
reasonable applications of fact to law by the Secretary.
`(ii) Such a determination may be reviewed by the Departmental Appeals
Board of the Department of Health and Human Services.
`(iii) A decision of the Departmental Appeals Board constitutes a
final agency action and is subject to judicial review.
`(C) NO MATERIAL ISSUES OF FACT IN DISPUTE- In the case of review of a
determination under subparagraph (A)(i)(III) or (B)(i) where the moving
party alleges that there are no material issues of fact in dispute, and
alleges that the only issue is the constitutionality of a provision of this
title, or that a regulation, determination, or ruling by the Secretary is
invalid, the moving party may seek review by a court of competent
jurisdiction.
`(D) PENDING NATIONAL COVERAGE DETERMINATIONS-
`(i) IN GENERAL- In the event the Secretary has not issued a national
coverage or noncoverage determination with respect to a particular type or
class of items or services, an affected party may submit to the Secretary
a request to make such a determination with respect to such items or
services. By not later than the end of the 90-day period beginning on the
date the Secretary receives such a request, the Secretary shall take one
of the following actions:
`(I) Issue a national coverage determination, with or without
limitations.
`(II) Issue a national noncoverage determination.
`(III) Issue a determination that no national coverage or
noncoverage determination is appropriate as of the end of such 90-day
period with respect to national coverage of such items or
services.
`(IV) Issue a notice that states that the Secretary has not
completed a review of the national coverage determination and that
includes an identification of the remaining steps in the Secretary's
review process and a deadline by which the Secretary will complete the
review and take an action described in subclause (I), (II), or
(III).
`(ii) In the case of an action described in clause (i)(IV), if the
Secretary fails to take an action referred to in such clause by the
deadline specified by the Secretary under such clause, then the Secretary
is deemed to have taken an action described in clause (i)(III) as of the
deadline.
`(iii) When issuing a determination under clause (i), the Secretary
shall include an explanation of the basis for the determination. An action
taken under clause (i) (other than subclause (IV)) is deemed to be a
national coverage determination for purposes of review under subparagraph
(A).
`(3) PUBLICATION ON THE INTERNET OF DECISIONS OF HEARINGS OF THE
SECRETARY- Each decision of a hearing by the Secretary shall be made public,
and the Secretary shall publish each decision on the Medicare Internet site
of the Department of Health and Human Services. The Secretary shall remove
from such decision any information that would identify any individual,
provider of services, or supplier.
`(4) LIMITATION ON REVIEW OF CERTAIN REGULATIONS- A regulation or
instruction which relates to a method for determining the amount of payment
under part B and which was initially issued before January 1, 1981, shall
not be subject to judicial review.
`(5) STANDING- An action under this section seeking review of a coverage
determination (with respect to items and services under this title) may be
initiated only by one (or more) of the following aggrieved persons, or
classes of persons:
`(A) Individuals entitled to benefits under part A, or enrolled under
part B, or both, who are in need of the items or services involved in the
coverage determination.
`(B) Persons, or classes of persons, who make, manufacture, offer,
supply, make available, or provide such items and services.
`(c) CONDUCT OF RECONSIDERATIONS BY INDEPENDENT CONTRACTORS-
`(1) IN GENERAL- The Secretary shall enter into contracts with qualified
independent contractors to conduct reconsiderations of initial
determinations made under paragraphs (2) and (3) of subsection (a).
Contracts shall be for an initial term of three years and shall be renewable
on a triennial basis thereafter.
`(2) QUALIFIED INDEPENDENT CONTRACTOR- For purposes of this subsection,
the term `qualified independent contractor' means an entity or organization
that is independent of any organization under contract with the Secretary
that makes initial determinations under subsection (a), and that meets the
requirements established by the Secretary consistent with paragraph
(3).
`(3) REQUIREMENTS- Any qualified independent contractor entering into a
contract with the Secretary under this subsection shall meet the following
requirements:
`(A) IN GENERAL- The qualified independent contractor shall perform
such duties and functions and assume such responsibilities as may be
required under regulations of the Secretary promulgated to carry out the
provisions of this subsection, and such additional duties, functions, and
responsibilities as provided under the contract.
`(B) DETERMINATIONS- The qualified independent contractor shall
determine, on the basis of such criteria, guidelines, and policies
established by the Secretary and published under subsection (d)(2)(D),
whether payment shall be made for items or services under part A or part B
and the amount of such payment. Such determination shall constitute the
conclusive determination on those issues for purposes of payment under
such parts for fiscal intermediaries, carriers, and other entities whose
determinations are subject to review by the contractor; except that
payment may be made if--
`(i) such payment is allowed by reason of section 1879;
`(ii) in the case of inpatient hospital services or extended care
services, the qualified independent contractor determines that
additional time is required in order to arrange for postdischarge care,
but payment may be continued under this clause for not more than 2 days,
and only in the case in which the provider of such services did not know
and could not reasonably have been expected to know (as determined under
section 1879) that payment would not otherwise be made for such services
under part A or part B prior to notification by the qualified
independent contractor under this subsection;
`(iii) such determination is changed as the result of any hearing by
the Secretary or judicial review of the decision under this section;
or
`(iv) such payment is authorized under section
1861(v)(1)(G).
`(C) DEADLINES FOR DECISIONS-
`(i) DETERMINATIONS- The qualified independent contractor shall
conduct and conclude a determination under subparagraph (B) or an appeal
of an initial determination, and mail the notice of the decision by not
later than the end of the 45-day period beginning on the date a request
for reconsideration has been timely filed.
`(ii) CONSEQUENCES OF FAILURE TO MEET DEADLINE- In the case of a
failure by the qualified independent contractor to mail the notice of
the decision by the end of the period described in clause (i), the party
requesting the reconsideration or appeal may request a hearing before an
administrative law judge, notwithstanding any requirements for a
reconsidered determination for purposes of the party's right to such
hearing.
`(iii) EXPEDITED RECONSIDERATIONS- The qualified independent
contractor shall perform an expedited reconsideration under subsection
(b)(1)(F) of a notice from a provider of services or supplier that
payment may not be made for an item or service furnished by the provider
of services or supplier, of a decision by a provider of services to
terminate services furnished to an individual, or of a decision of the
provider of services to discharge the individual from the provider of
services, in accordance with the following:
`(I) DEADLINE FOR DECISION- Notwithstanding section 216(j), not
later than 1 day after the date the qualified independent contractor
has received a request for such reconsideration and has received such
medical or other records needed for such reconsideration, the
qualified independent contractor shall provide notice (by telephone
and in writing) to the individual and the provider of services and
attending physician of the individual of the results of the
reconsideration. Such reconsideration shall be conducted regardless of
whether the provider of services or supplier will charge the
individual for continued services or whether the individual will be
liable for payment for such continued services.
`(II) CONSULTATION WITH BENEFICIARY- In such reconsideration, the
qualified independent contractor shall solicit the views of the
individual involved.
`(D) LIMITATION ON INDIVIDUAL REVIEWING DETERMINATIONS-
`(i) PHYSICIANS- No physician under the employ of a qualified
independent contractor may review--
`(I) determinations regarding health care services furnished to a
patient if the physician was directly responsible for furnishing such
services; or
`(II) determinations regarding health care services provided in or
by an institution, organization, or agency, if the physician or any
member of the physician's family has, directly or indirectly, a
significant financial interest in such institution, organization, or
agency.
`(ii) PHYSICIAN'S FAMILY DESCRIBED- For purposes of this paragraph,
a physician's family includes the physician's spouse (other than a
spouse who is legally separated from the physician under a decree of
divorce or separate maintenance), children (including stepchildren and
legally adopted children), grandchildren, parents, and
grandparents.
`(E) EXPLANATION OF DETERMINATIONS- Any determination of a qualified
independent contractor shall be in writing, and shall include a detailed
explanation of the determination as well as a discussion of the pertinent
facts and applicable regulations applied in making such
determination.
`(F) NOTICE REQUIREMENTS- Whenever a qualified independent contractor
makes a determination under this subsection, the qualified independent
contractor shall promptly notify such individual and the entity
responsible for the payment of claims under part A or part B of such
determination.
`(G) DISSEMINATION OF INFORMATION- Each qualified independent
contractor shall, using the methodology established by the Secretary under
subsection (d)(4), make available all determinations of such qualified
independent contractors to fiscal intermediaries (under section 1816),
carriers (under section 1842), peer review organizations (under part B of
title XI), Medicare+Choice organizations offering Medicare+Choice plans
under part C, and other entities under contract with the Secretary to make
initial determinations under part A or part B or title XI.
`(H) ENSURING CONSISTENCY IN DETERMINATIONS- Each qualified
independent contractor shall monitor its determinations to ensure
consistency of determinations with respect to requests for reconsideration
of similar or related matters.
`(i) IN GENERAL- Consistent with the requirements of clause (ii), a
qualified independent contractor shall collect such information relevant
to its functions, and keep and maintain such records in such form and
manner as the Secretary may require to carry out the purposes of this
section and shall permit access to and use of any such information and
records as the Secretary may require for such purposes.
`(ii) TYPE OF DATA COLLECTED- Each qualified independent contractor
shall keep accurate records of each decision made, consistent with
standards established by the Secretary for such purpose. Such records
shall be maintained in an electronic database in a manner that provides
for identification of the following:
`(I) Specific claims that give rise to appeals.
`(II) Situations suggesting the need for increased education for
providers of services, physicians, or suppliers.
`(III) Situations suggesting the need for changes in national or
local coverage policy.
`(IV) Situations suggesting the need for changes in local medical
review policies.
`(iii) ANNUAL REPORTING- Each qualified independent contractor shall
submit annually to the Secretary (or otherwise as the Secretary may
request) records maintained under this paragraph for the previous
year.
`(J) HEARINGS BY THE SECRETARY- The qualified independent contractor
shall (i) prepare such information as is required for an appeal of its
reconsidered determination to the Secretary for a hearing, including as
necessary, explanations of issues involved in the determination and
relevant policies, and (ii) participate in such hearings as required by
the Secretary.
`(4) NUMBER OF QUALIFIED INDEPENDENT CONTRACTORS- The Secretary shall
enter into contracts with not more than 12 qualified independent contractors
under this subsection.
`(5) LIMITATION ON QUALIFIED INDEPENDENT CONTRACTOR LIABILITY- No
qualified independent contractor having a contract with the Secretary under
this subsection and no person who is employed by, or who has a fiduciary
relationship with, any such qualified independent contractor or who
furnishes professional services to such qualified independent contractor,
shall be held by reason of the performance of any duty, function, or
activity required or authorized pursuant to this subsection or to a valid
contract entered into under this subsection, to have violated any criminal
law, or to be civilly liable under any law of the United States or of any
State (or political subdivision thereof) provided due care was exercised in
the performance of such duty, function, or activity.
`(d) ADMINISTRATIVE PROVISIONS-
`(1) OUTREACH- The Secretary shall perform such outreach activities as
are necessary to inform individuals entitled to benefits under this title
and providers of services and suppliers with respect to their rights of, and
the process for, appeals made under this section. The Secretary shall use
the toll-free telephone number maintained by the Secretary
(1-800-MEDICAR(E)) (1-800-633-4227) to provide information regarding appeal
rights and respond to inquiries regarding the status of appeals.
`(2) GUIDANCE FOR RECONSIDERATIONS AND HEARINGS-
`(A) REGULATIONS- Not later than 1 year after the date of the
enactment of this section, the Secretary shall promulgate regulations
governing the processes of reconsiderations of determinations by the
Secretary and qualified independent contractors and of hearings by the
Secretary. Such regulations shall include such specific criteria and
provide such guidance as required to ensure the adequate functioning of
the reconsiderations and hearings processes and to ensure consistency in
such processes.
`(B) DEADLINES FOR ADMINISTRATIVE ACTION-
`(i) HEARING BY ADMINISTRATIVE LAW JUDGE-
`(II) IN GENERAL- Except as provided in subclause (II), an
administrative law judge shall conduct and conclude a hearing on a
decision of a qualified independent contractor under subsection (c)
and render a decision on such hearing by not later than the end of the
90-day period beginning on the date a request for hearing has been
timely filed.
`(II) WAIVER OF DEADLINE BY PARTY SEEKING HEARING- The 90-day
period under subclause (i) shall not apply in the case of a motion or
stipulation by the party requesting the hearing to waive such
period.
`(ii) DEPARTMENTAL APPEALS BOARD REVIEW- The Departmental Appeals
Board of the Department of Health and Human Services shall conduct and
conclude a review of the decision on a hearing described in subparagraph
(B) and make a decision or remand the case to the administrative law
judge for reconsideration by not later than the end of the 90-day period
beginning on the date a request for review has been timely
filed.
`(iii) CONSEQUENCES OF FAILURE TO MEET DEADLINES- In the case of a
failure by an administrative law judge to render a decision by the end
of the period described in clause (ii), the party requesting the hearing
may request a review by the Departmental Appeals Board of the Department
of Health and Human Services, notwithstanding any requirements for a
hearing for purposes of the party's right to such a review.
`(iv) DAB HEARING PROCEDURE- In the case of a request described in
clause (iii), the Departmental Appeals Board shall review the case de
novo.
`(C) POLICIES- The Secretary shall provide such specific criteria and
guidance, including all applicable national and local coverage policies
and rationale for such policies, as is necessary to assist the qualified
independent contractors to make informed decisions in considering appeals
under this section. The Secretary shall furnish to the qualified
independent contractors the criteria and guidance described in this
paragraph in a published format, which may be an electronic
format.
`(D) PUBLICATION OF MEDICARE COVERAGE POLICIES ON THE INTERNET- The
Secretary shall publish national and local coverage policies under this
title on an Internet site maintained by the Secretary.
`(E) EFFECT OF FAILURE TO PUBLISH POLICIES-
`(i) NATIONAL AND LOCAL COVERAGE POLICIES- Qualified independent
contractors shall not be bound by any national or local medicare
coverage policy established by the Secretary that is not published on
the Internet site under subparagraph (D).
`(ii) OTHER POLICIES- With respect to policies established by the
Secretary other than the policies described in clause (i), qualified
independent contractors shall not be bound by such policies if the
Secretary does not furnish to the qualified independent contractor the
policies in a published format consistent with subparagraph
(C).
`(3) CONTINUING EDUCATION REQUIREMENT FOR QUALIFIED INDEPENDENT
CONTRACTORS AND ADMINISTRATIVE LAW JUDGES-
`(A) IN GENERAL- The Secretary shall provide to each qualified
independent contractor, and to administrative law judges that decide
appeals of reconsiderations of initial determinations or other decisions
or determinations under this section, such continuing education with
respect to policies of the Secretary under this title or part B of title
XI as is necessary for such qualified independent contractors and
administrative law judges to make informed decisions with respect to
appeals.
`(B) MONITORING OF DECISIONS BY QUALIFIED INDEPENDENT CONTRACTORS AND
ADMINISTRATIVE LAW JUDGES- The Secretary shall monitor determinations made
by all qualified independent contractors and administrative law judges
under this section and shall provide continuing education and training to
such qualified independent contractors and administrative law judges to
ensure consistency of determinations with respect to appeals on similar or
related matters. To ensure such consistency, the Secretary shall provide
for administration and oversight of qualified independent contractors and
administrative law judges through a central office of the Department of
Health and Human Services. Such administration and oversight may not be
delegated to regional offices of the Department.
`(4) DISSEMINATION OF DETERMINATIONS- The Secretary shall establish a
methodology under which qualified independent contractors shall carry out
subsection (c)(3)(G).
`(5) SURVEY- Not less frequently than every 5 years, the Secretary shall
conduct a survey of a valid sample of individuals entitled to benefits under
this title, providers of services, and suppliers to determine the
satisfaction of such individuals or entities with the process for appeals of
determinations provided for under this section and education and training
provided by the Secretary with respect to that process. The Secretary shall
submit to Congress a report describing the results of the survey, and shall
include any recommendations for administrative or legislative actions that
the Secretary determines appropriate.
`(6) REPORT TO CONGRESS- The Secretary shall submit to Congress an
annual report describing the number of appeals for the previous year,
identifying issues that require administrative or legislative actions, and
including any recommendations of the Secretary with respect to such actions.
The Secretary shall include in such report an analysis of determinations by
qualified independent contractors with respect to inconsistent decisions and
an analysis of the causes of any such inconsistencies.'.
(b) APPLICABILITY OF REQUIREMENTS AND LIMITATIONS ON LIABILITY OF
QUALIFIED INDEPENDENT CONTRACTORS TO MEDICARE+CHOICE INDEPENDENT APPEALS
CONTRACTORS- Section 1852(g)(4) of the Social Security Act (42 U.S.C.
1395w-22(e)(3)) is amended by adding at the end the following: `The provisions
of section 1869(c)(5) shall apply to independent outside entities under
contract with the Secretary under this paragraph.'.
(c) CONFORMING AMENDMENT TO REVIEW BY THE PROVIDER REIMBURSEMENT REVIEW
BOARD- Section 1878(g) of the Social Security Act (42 U.S.C. 1395oo(g)) is
amended by adding at the end the following new paragraph:
`(3) Findings described in paragraph (1) and determinations and other
decisions described in paragraph (2) may be reviewed or appealed under section
1869.'.
SEC. 222. PROVISIONS WITH RESPECT TO LIMITATIONS ON LIABILITY OF
BENEFICIARIES.
(a) EXPANSION OF LIMITATION OF LIABILITY PROTECTION FOR BENEFICIARIES WITH
RESPECT TO MEDICARE CLAIMS NOT PAID OR PAID INCORRECTLY-
(1) IN GENERAL- Section 1879 of the Social Security Act (42 U.S.C.
1395pp) is amended by adding at the end the following new subsections:
`(i) Notwithstanding any other provision of this Act, an individual who is
entitled to benefits under this title and is furnished a service or item is
not liable for repayment to the Secretary of amounts with respect to such
benefits--
`(1) subject to paragraph (2), in the case of a claim for such item or
service that is incorrectly paid by the Secretary; and
`(2) in the case of payments made to the individual by the Secretary
with respect to any claim under paragraph (1), the individual shall be
liable for repayment of such amount only up to the amount of payment
received by the individual from the Secretary.
`(j)(1) An individual who is entitled to benefits under this title and is
furnished a service or item is not liable for payment of amounts with respect
to such benefits in the following cases:
`(A) In the case of a benefit for which an initial determination has not
been made by the Secretary under subsection (a) whether payment may be made
under this title for such benefit.
`(B) In the case of a claim for such item or service that is--
`(i) improperly submitted by the provider of services or supplier;
or
`(ii) rejected by an entity under contract with the Secretary to
review or pay claims for services and items furnished under this title,
including an entity under contract with the Secretary under section
1857.
`(2) The limitation on liability under paragraph (1) shall not apply if
the individual signs a waiver provided by the Secretary under subsection (l)
of protections under this paragraph, except that any such waiver shall not
apply in the case of a denial of a claim for noncompliance with applicable
regulations or procedures under this title or title XI.
`(k) An individual who is entitled to benefits under this title and is
furnished services by a provider of services is not liable for payment of
amounts with respect to such services prior to noon of the first working day
after the date the individual receives the notice of determination to
discharge and notice of appeal rights under paragraph (1), unless the
following conditions are met:
`(1) The provider of services shall furnish a notice of discharge and
appeal rights established by the Secretary under subsection (l) to each
individual entitled to benefits under this title to whom such provider of
services furnishes services, upon admission of the individual to the
provider of services and upon notice of determination to discharge the
individual from the provider of services, of the individual's limitations of
liability under this section and rights of appeal under section 1869.
`(2) If the individual, prior to discharge from the provider of
services, appeals the determination to discharge under section 1869 not
later than noon of the first working day after the date the individual
receives the notice of determination to discharge and notice of appeal
rights under paragraph (1), the provider of services shall, by the close of
business of such first working day, provide to the Secretary (or qualified
independent contractor under section 1869, as determined by the Secretary)
the records required to review the determination.
`(l) The Secretary shall develop appropriate standard forms for
individuals entitled to benefits under this title to waive limitation of
liability protections under subsection (j) and to receive notice of discharge
and appeal rights under subsection (k). The forms developed by the Secretary
under this subsection shall clearly and in plain language inform such
individuals of their limitations on liability, their rights under section
1869(a) to obtain an initial determination by the Secretary of whether payment
may be made under part A or part B for such benefit, and their rights of
appeal under section 1869(b), and shall inform such individuals that they may
obtain further information or file an appeal of the determination by use of
the toll-free telephone number (1-800-MEDICAR(E)) (1-800-633-4227) maintained
by the Secretary. The forms developed by the Secretary under this subsection
shall be the only manner in which such individuals may waive such protections
under this title or title XI.
`(m) An individual who is entitled to benefits under this title and is
furnished an item or service is not liable for payment of cost sharing amounts
of more than $50 with respect to such benefits unless the individual has been
informed in advance of being furnished the item or service of the estimated
amount of the cost sharing for the item or service using a standard form
established by the Secretary.'.
(2) CONFORMING AMENDMENT- Section 1870(a) of the Social Security Act (42
U.S.C. 1395gg(a)) is amended by striking `Any payment under this title' and
inserting `Except as provided in section 1879(i), any payment under this
title'.
(b) INCLUSION OF BENEFICIARY LIABILITY INFORMATION IN EXPLANATION OF
MEDICARE BENEFITS- Section 1806(a) of the Social Security Act (42 U.S.C.
1395b-7(a)) is amended--
(1) in paragraph (1), by striking `and' at the end;
(2) by redesignating paragraph (2) as paragraph (3); and
(3) by inserting after paragraph (1) the following new paragraph:
`(2) lists with respect to each item or service furnished the amount of
the individual's liability for payment;';
(4) in paragraph (3), as so redesignated, by striking the period at the
end and inserting `; and'; and
(5) by adding at the end the following new paragraph:
`(4) includes the toll-free telephone number (1-800-MEDICAR(E))
(1-800-633-4227) for information and questions concerning the statement,
liability of the individual for payment, and appeal rights.'.
SEC. 223. WAIVERS OF LIABILITY FOR COST SHARING AMOUNTS.
(a) IN GENERAL- Section 1128A(i)(6)(A) of the Social Security Act (42
U.S.C. 1320a-7a(i)(6)(A)) is amended by striking clauses (i) through (iii) and
inserting the following:
`(i) the waiver is offered as a part of a supplemental insurance
policy or retiree health plan;
`(ii) the waiver is not offered as part of any advertisement or
solicitation, other than in conjunction with a policy or plan described
in clause (i);
`(iii) the person waives the coinsurance and deductible amount after
the beneficiary informs the person that payment of the coinsurance or
deductible amount would pose a financial hardship for the individual;
or
`(iv) the person determines that the coinsurance and deductible
amount would not justify the costs of collection.'.
(b) CONFORMING AMENDMENT- Section 1128B(b) of the Social Security Act (42
U.S.C. 1320a-7b(b)) is amended by adding at the end the following new
paragraph:
`(4) In this section, the term `remuneration' includes the meaning given
such term in section 1128A(i)(6).'.
SEC. 224. ELIMINATION OF MOTIONS BY THE SECRETARY ON DECISIONS OF THE
PROVIDER REIMBURSEMENT REVIEW BOARD.
Section 1878(f)(1) of such Act (42 U.S.C. 1395oo(f)(1)) is amended--
(1) in the first sentence, by striking `unless the Secretary, on his own
motion, and within 60 days after the provider of services is notified of the
Board's decision, reverses, affirms, or modifies the Board's
decision';
(2) in the second sentence, by striking `, or of any reversal,
affirmance, or modification by the Secretary,' and `or of any reversal,
affirmance, or modification by the Secretary'; and
(3) in the fifth sentence, by striking ` and not subject to review by
the Secretary'.
TITLE III--MEDICARE+CHOICE REFORMS; PRESERVATION OF MEDICARE PART B DRUG
BENEFIT
Subtitle A--Medicare+Choice Reforms
SEC. 301. INCREASE IN NATIONAL PER CAPITA MEDICARE+CHOICE GROWTH PERCENTAGE
IN 2001 AND 2002.
Section 1853(c)(6)(B) of the Social Security Act (42 U.S.C.
1395w-23(c)(6)(B)) is amended--
(1) in clause (iv), by striking `for 2001, 0.5 percentage points' and
inserting `for 2001, 0.4 percentage points'; and
(2) in clause (v), by striking `for 2002, 0.3 percentage points' and
inserting `for 2002, 0.2 percentage points'.
SEC. 302. PERMANENTLY REMOVING APPLICATION OF BUDGET NEUTRALITY BEGINNING IN
2002.
Section 1853(c) of the Social Security Act (42 U.S.C. 1395w-23(c)) is
amended--
(1) in paragraph (1)(A), in the matter following clause (ii), by
inserting `(for years before 2002)' after `multiplied'; and
(2) in paragraph (5), by inserting `(before 2002)' after `for each
year'.
SEC. 303. INCREASING MINIMUM PAYMENT AMOUNT.
(a) IN GENERAL- Section 1853(c)(1)(B)(ii) of the Social Security Act (42
U.S.C. 1395w-23(c)(1)(B)(ii)) is amended--
(1) by striking `(ii) For a succeeding year' and inserting `(ii)(I)
Subject to subclause (II), for a succeeding year'; and
(2) by adding at the end the following new subclause:
`(II) For 2002 for any of the 50 States and the District of
Columbia, $450.'.
(b) EFFECTIVE DATE- The amendments made by subsection (a) apply to years
beginning with 2002.
SEC. 304. ALLOWING MOVEMENT TO 50:50 PERCENT BLEND IN 2002.
Section 1853(c)(2) of the Social Security Act (42 U.S.C. 1395w-23(c)(2))
is amended--
(1) by striking the period at the end of subparagraph (F) and inserting
a semicolon; and
(2) by adding after and below subparagraph (F) the following:
`except that a Medicare+Choice organization may elect to apply
subparagraph (F) (rather than subparagraph (E)) for 2002.'.
SEC. 305. INCREASED UPDATE FOR PAYMENT AREAS WITH ONLY ONE OR NO
MEDICARE+CHOICE CONTRACTS.
(a) IN GENERAL- Section 1853(c)(1)(C)(ii) of the Social Security Act (42
U.S.C. 1395w-23(c)(1)(C)(ii)) is amended--
(1) in clause (i), by striking `(ii) For a subsequent year' and
inserting `(ii)(I) Subject to subclause (II), for a subsequent year';
and
(2) by adding at the end the following new subclause:
`(II) During 2002, 2003, 2004, and 2005, in the case of a
Medicare+Choice payment area in which there is no more than 1 contract
entered into under this part as of July 1 before the beginning of the
year, 102.5 percent of the annual Medicare+Choice capitation rate under
this paragraph for the area for the previous year.'.
(b) CONSTRUCTION- The amendments made by subsection (a) do not affect the
payment of a first time bonus under section 1853(i) of the Social Security Act
(42 U.S.C. 1395w-23(i)).
SEC. 306. PERMITTING HIGHER NEGOTIATED RATES IN CERTAIN MEDICARE+CHOICE
PAYMENT AREAS BELOW NATIONAL AVERAGE.
Section 1853(c)(1) of the Social Security Act (42 U.S.C. 1395w-23(c)(1))
is amended--
(1) in the matter before subparagraph (A), by striking `or (C)' and
inserting `(C), or (D)'; and
(2) by adding at the end the following new subparagraph:
`(D) PERMITTING HIGHER RATES THROUGH NEGOTIATION-
`(i) IN GENERAL- For each year beginning with 2004, in the case of a
Medicare+Choice payment area for which the Medicare+Choice capitation
rate under this paragraph would otherwise be less than the United States
per capita cost (USPCC), as calculated by the Secretary, a
Medicare+Choice organization may negotiate with the Medicare Benefits
Administrator an annual per capita rate that--
`(I) reflects an annual rate of increase up to the rate of
increase specified in clause (ii);
`(II) takes into account audited current data supplied by the
organization on its adjusted community rate (as defined in section
1854(f)(3)); and
`(III) does not exceed the United States per capita cost, as
projected by the Secretary for the year involved.
`(ii) MAXIMUM RATE DESCRIBED- The rate of increase specified in this
clause for a year is the rate of inflation in private health insurance
for the year involved, as projected by the Medicare Benefits
Administrator, and includes such adjustments as may be
necessary--
`(I) to reflect the demographic characteristics in the population
under this title; and
`(II) to eliminate the costs of prescription drugs.
`(iii) ADJUSTMENTS FOR OVER OR UNDER PROJECTIONS- If subparagraph is
applied to an organization and payment area for a year, in applying this
subparagraph for a subsequent year the provisions of paragraph (6)(C)
shall apply in the same manner as such provisions apply under this
paragraph.'.
SEC. 307. 10-YEAR PHASE IN OF RISK ADJUSTMENT BASED ON DATA FROM ALL
SETTINGS.
Section 1853(a)(3)(C)(ii) of the Social Security Act (42 U.S.C.
1395w-23(c)(1)(C)(ii)) is amended--
(1) by striking the period at the end of subclause (II) and inserting a
semicolon; and
(2) by adding after and below subclause (II) the following:
`and, beginning in 2004, insofar as such risk adjustment is based on
data from all settings, the methodology shall be phased in equal
increments over a 10 year period, beginning with 2004 or (if later) the
first year in which such data is used.'.
Subtitle B--Preservation of Medicare Coverage of Drugs and
Biologicals
SEC. 311. PRESERVATION OF COVERAGE OF DRUGS AND BIOLOGICALS UNDER PART B OF
THE MEDICARE PROGRAM.
(a) IN GENERAL- Section 1861(s)(2) of the Social Security Act (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 regulations, be self-administered)' and inserting `(including drugs and
biologicals which are not usually self-administered by the patient)'.
(b) EFFECTIVE DATE- The amendment made by subsection (a) applies to drugs
and biologicals administered on or after October 1, 2000.
END