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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 injectable and infusable 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.

SEC. 312. COMPREHENSIVE IMMUNOSUPPRESSIVE DRUG COVERAGE FOR TRANSPLANT PATIENTS.

(a) REVISION OF MEDICARE COVERAGE FOR IMMUNOSUPPRESSIVE DRUGS-

(1) IN GENERAL- Section 1861(s)(2)(J) of the Social Security Act (42 U.S.C. 1395x(s)(2)(J)) (as amended by section 227(a) of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 (113 Stat. 1501A-354), as enacted into law by section 1000(a)(6) of Public Law 106-113) is amended by striking `, to an individual who receives' and all that follows before the semicolon at the end and inserting `to an individual who has received an organ transplant'.

(2) CONFORMING AMENDMENTS-

(A) Section 1832 of the Social Security Act (42 U.S.C. 1395k) (as amended by section 227(b) of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 (113 Stat. 1501A-354), as enacted into law by section 1000(a)(6) of Public Law 106-113) is amended--

(i) by striking subsection (b); and

(ii) by redesignating subsection (c) as subsection (b).

(B) Subsections (c) and (d) of section 227 of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 (113 Stat. 1501A-355), as enacted into law by section 1000(a)(6) of Public Law 106-113, are repealed.

(3) EFFECTIVE DATE- The amendments made by this subsection shall apply to drugs furnished on or after the date of enactment of this Act.

(b) EXTENSION OF CERTAIN SECONDARY PAYER REQUIREMENTS- Section 1862(b)(1)(C) of the Social Security Act (42 U.S.C. 1395y(b)(1)(C)) is amended by adding at the end the following: `With regard to immunosuppressive drugs furnished on or after the date of enactment of the Medicare Guaranteed and Defined Rx Benefit and Health Provider Relief Act of 2000, this subparagraph shall be applied without regard to any time limitation.'.

(c) ESTABLISHMENT OF PART D CATASTROPHIC LIMIT ON PART B COPAYMENTS FOR IMMUNOSUPPRESSIVE DRUGS- Section 1833 of the Social Security Act (42 U.S.C. 1395l) is

amended by inserting after subsection (o) the following new subsection:

`(p) LIMITATION ON AMOUNT OF DEDUCTIBLES AND COINSURANCE FOR IMMUNOSUPPRESSIVE DRUGS FOR CERTAIN BENEFICIARIES- With respect to 2003 and each subsequent year, no deductibles and coinsurance applicable to immunosuppresive drugs (as described in section 1861(s)(2)(J)) in a year under this part shall be imposed to the extent that the individual has incurred expenditures in that year for out-of-pocket expenditures for immunosuppressive drugs in excess of the catastrophic benefit level provided for under section 1860B(c).'.

Subtitle C--Improvement of Certain Preventive Benefits

SEC. 321. COVERAGE OF ANNUAL SCREENING PAP SMEAR AND PELVIC EXAMS.

(a) IN GENERAL-

(1) ANNUAL SCREENING PAP SMEAR- Section 1861(nn)(1) of the Social Security Act (42 U.S.C. 1395x(nn)(1)) is amended by striking `if the individual involved has not had such a test during the preceding 3 years, or during the preceding year in the case of a woman described in paragraph (3).' and inserting `if the woman involved has not had such a test during the preceding year.'.

(2) ANNUAL SCREENING PELVIC EXAM- Section 1861(nn)(2) of such Act (42 U.S.C. 1395x(nn)(2)) is amended by striking `during the preceding 3 years, or during the preceding year in the case of a woman described in paragraph (3),' and inserting `during the preceding year,'.

(3) CONFORMING AMENDMENT- Section 1861(nn) of such Act (42 U.S.C. 1395x(nn)) is amended by striking paragraph (3).

(b) EFFECTIVE DATE- The amendments made by subsection (a) apply to items and services furnished on or after January 1, 2001.

TITLE IV--ADJUSTMENTS TO PAYMENT PROVISIONS OF THE BALANCED BUDGET ACT

Subtitle A--Payments for Inpatient Hospital Services

SEC. 401. ELIMINATING REDUCTION IN HOSPITAL MARKET BASKET UPDATE FOR FISCAL YEAR 2001.

Section 1886(b)(3)(B)(i)(XVI) of the Social Security Act (42 U.S.C. 1395ww(b)(3)(B)(i)(XVI)) is amended by striking `minus 1.1 percentage points for hospitals (other than sole community hospitals) in all areas, and the market basket percentage increase for sole community hospitals,' and inserting `for hospitals in all areas,'.

SEC. 402. ELIMINATING FURTHER REDUCTIONS IN INDIRECT MEDICAL EDUCATION (IME) FOR FISCAL YEAR 2001.

Section 1886(d)(5)(B)(ii) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(B)(ii)(V)) is amended--

(1) in subclause (IV)--

(A) by striking `fiscal year 2000' and inserting `each of fiscal years 2000 and 2001'; and

(B) by adding `and' at the end;

(2) by striking subclause (V); and

(3) by redesignating subclause (VI) as subclause (V).

SEC. 403. ELIMINATING FURTHER REDUCTIONS IN DISPROPORTIONATE SHARE HOSPITAL (DSH) PAYMENTS.

(a) MEDICARE PAYMENTS- Section 1886(d)(5)(F)(ix) of the Social Security Act (42 U.S.C. 1395ww(d)(5)(F)(ix)) is amended--

(1) in subclause (III), by striking `and 2001';

(2) by redesignating subclauses (IV) and (V) as subclauses (V) and (VI), respectively; and

(3) by inserting after subclause (III) the following new subclause:

`(IV) during fiscal year 2001, such additional payment amount shall be reduced by 0 percent;'.

(b) FREEZE IN MEDICAID DSH ALLOTMENTS FOR FISCAL YEAR 2001- Notwithstanding section 1923(f)(2) of the Social Security Act (42 U.S.C. 1396r-4(f)(2)), the DSH allotment under such section for a State for fiscal year 2001 shall be the same as the DSH allotment under such section for fiscal year 2000.

SEC. 404. INCREASE BASE PAYMENT TO PUERTO RICO HOSPITALS.

Section 1886(d)(9)(A) of the Social Security Act (42 U.S.C. 1395ww(d)(9)(A)) is amended--

(1) in clause (i), by striking `October 1, 1997, 50 percent (' and inserting `October 1, 2000, 25 percent (for discharges between October 1, 1997 and September 30, 2000, 50 percent,'; and

(2) in clause (ii), in the matter preceding subclause (I), by striking `after October 1, 1997, 50 percent (' and inserting `after October 1, 2000, 75 percent (for discharges between October 1, 1997, and September 30, 2000, 50 percent,'.

Subtitle B--Payments for Skilled Nursing Services

SEC. 411. ELIMINATING REDUCTION IN SNF MARKET BASKET UPDATE FOR FISCAL YEAR 2001.

Section 1888(e)(4)(E) of the Social Security Act (42 U.S.C. 1395yy(e)(4)(E)) is amended--

(1) by redesignating subclauses (II) and (III) as subclauses (III) and (IV) respectively;

(2) in subclause (III) as redesignated, by striking `for each of fiscal years 2001 and 2002,' and inserting `for fiscal year 2002,'; and

(3) by inserting after subclause (I) the following new subclause:

`(II) for fiscal year 2001, the rate computed for fiscal year 2000 increased by the skilled nursing facility market basket percentage increase for fiscal year 2000.'.

SEC. 412. EXTENSION OF MORATORIUM ON THERAPY CAPS.

Section 1833(g) of the Social Security Act (42 U.S.C. 1395l(g)) is amended in paragraph (4) by striking `2000 and 2001.' and inserting `2000 through 2002.'.

Subtitle C--Payments for Home Health Services

SEC. 421. 1-YEAR ADDITIONAL DELAY IN APPLICATION OF 15 PERCENT REDUCTION ON PAYMENT LIMITS FOR HOME HEALTH SERVICES.

Section 1895(b)(3)(A)(i) of the Social Security Act (42 U.S.C. 1395fff(b)(3)(A)(i)) is amended--

(1) by redesignating subparagraph (II) as subparagraph (III);

(2) by inserting in subparagraph (III), as redesignated, `24 months' following `periods beginning'; and

(3) by inserting after subclause (I) the following new subclause:

`(II) For the 12-month period beginning after the period described in subclause (I), such amount (or amounts) shall be equal to the amount (or amounts) determined under subclause (I), updated under subparagraph (B).'.

SEC. 422. PROVISION OF FULL MARKET BASKET UPDATE FOR HOME HEALTH SERVICES FOR FISCAL YEAR 2001.

Section 1861(v)(1)(L)(x) of the Social Security Act (42 U.S.C. 1395x(v)(1)(L)(x)) is amended--

(1) by striking `2001,'; and

(2) by adding at the end the following: `With respect to cost reporting periods beginning during fiscal year 2001, the update to any limit under this subparagraph shall be the home health market basket.'.

Subtitle D--Rural Provider Provisions

SEC. 431. ELIMINATION OF REDUCTION IN HOSPITAL OUTPATIENT MARKET BASKET INCREASE.

Section 1833(t)(3)(C)(iii) of the Social Security Act (42 U.S.C. 1395l(t)(3)(C)(iii)) is amended by striking `reduced by 1 percentage point for such factor for services furnished in each of 2000, 2001, and 2002' and inserting `reduced by 1 percentage point for such factor for services furnished in 2000 and reduced (except in the case of hospitals located in a rural area, as defined for purposes of section 1886(d)) by 1 percentage point for such factor for services furnished in each of 2001 and 2002.'

Subtitle E--Other Providers

SEC. 441. UPDATE IN RENAL DIALYSIS COMPOSITE RATE.

The last sentence of section 1881(b)(7) of the Social Security Act (42 U.S.C. 1395rr(b)(7)) is amended by striking `for such services furnished on or after January 1, 2001, by 1.2 percent' and inserting `for such services furnished on or after January 1, 2001, by 2.4 percent'.

Subtitle F--Provision for Additional Adjustments

SEC. 451. GUARANTEE OF ADDITIONAL ADJUSTMENTS TO PAYMENTS FOR PROVIDERS FROM BUDGET SURPLUS.

Notwithstanding any other provision of law, from amounts estimated to be in excess social security surpluses estimated under the Balanced Budget and Emergency Deficit Control Act of 1985 for the 5 fiscal year and 10 fiscal year periods beginning in fiscal year 2001, there shall be made available for further adjustments to payment policies established by the Balanced Budget Act of 1997, amounts that would provide for additional improvements to the medicare and medicaid programs carried out under titles XVIII and XIX of the Social Security Act and payments to providers of services and suppliers furnishing items and services for which payments is made under those programs in the aggregate amounts over such 5 fiscal year and 10 fiscal year periods of $11,000,000, and $21,000,000, respectively.

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