HR 491 IH

To amend parts C and D of title XVIII of the Social Security Act to improve the operation of the Medicare+Choice and Medigap programs.

February 2, 1999

Mr. STARK (for himself, Mr. BROWN of Ohio, Mrs. THURMAN, Mr. WAXMAN, Mr. LEWIS of Georgia, Mr. MCDERMOTT, Mr. LEVIN, Mr. MATSUI, Mr. NEAL of Massachusetts, Mr. FRANK of Massachusetts, Mr. MORAN of Virginia, Mr. FROST, Mr. MARKEY, and Ms. SCHAKOWSKY) 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

To amend parts C and D of title XVIII of the Social Security Act to improve the operation of the Medicare+Choice and Medigap programs.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; AMENDMENTS TO SOCIAL SECURITY ACT; TABLE OF CONTENTS.

(a) SHORT TITLE- This Act may be cited as the `Medicare+Choice Program Improvement Act of 1999'.

(b) AMENDMENTS TO SOCIAL SECURITY ACT- Except as otherwise specifically provided, whenever in this Act an amendment is expressed in terms of an amendment to or repeal of a section or other provision, the reference shall be considered to be made to that section or other provision of the Social Security Act.

(c) TABLE OF CONTENTS- The table of contents of this Act is as follows:

Sec. 1. Short title; amendments to Social Security Act; table of contents.

Sec. 2. Enrollment of medicare beneficiaries in alternative Medicare+Choice plans and Medigap coverage in case of involuntary termination of Medicare+Choice enrollment.

Sec. 3. Applying Medigap and Medicare+Choice protections to disabled and ESRD medicare beneficiaries.

Sec. 4. Prohibition of attained-age rating of premiums for Medigap policies.

Sec. 5. Non-preemption of State prescription drug coverage mandates in case of approved State Medigap waivers.

Sec. 6. Prohibition of cold-call marketing of Medicare+Choice plans.

Sec. 7. Flexibility in definition of service area under the Medicare+Choice program.

Sec. 8. 3-year phase-in of risk adjustment of Medicare+Choice plan payments.

Sec. 9. Delay in certain deadlines under the Medicare+Choice program.

Sec. 10. Taking into account costs of VA and DOD military facility services to medicare-eligible beneficiaries in calculation of Medicare+Choice plan payment rates.

Sec. 11. Increase in civil monetary penalties for failure to meet Medigap open enrollment requirements.

Sec. 12. NAIC review and update of benefit packages for Medigap policies.

SEC. 2. ENROLLMENT OF MEDICARE BENEFICIARIES IN ALTERNATIVE MEDICARE+CHOICE PLANS AND MEDIGAP COVERAGE IN CASE OF INVOLUNTARY TERMINATION OF MEDICARE+CHOICE ENROLLMENT.

(a) PERMITTING ENROLLMENT IN ALTERNATIVE PLANS UPON RECEIPT OF NOTICE OF MEDICARE+CHOICE PLAN TERMINATION-

(1) ENROLLMENT IN ALTERNATIVE MEDICARE+CHOICE PLANS- Section 1851(e)(4) (42 U.S.C. 1395w-21(e)(4)) is amended--

(A) in subparagraph (A), by inserting before the semicolon at the end the following: `or the organization or plan, respectively, has provided notice to the individual of the impending termination (or termination or discontinuation, respectively)'; and

(B) by adding at the end the following: `In the case described in subparagraph (A), the right to make a new election under this paragraph shall extend through the end of the next annual, coordinated election period.'.

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

(A) by inserting `(or, if elected by the individual, the date of notification of the individual by the plan or organization of the impending termination or discontinuance of the plan in the area in which the individual resides)' after `the date of the termination of enrollment described in such subparagraph';

(B) by inserting `(or date of such notification, respectively)' after `the date of termination or disenrollment'; and

(C) by inserting after `63 days' the following: `(or 92 days in the case of a termination or discontinuation of coverage under the types of circumstances described in section 1851(e)(4)(A))'.

(3) EFFECTIVE DATE- The amendments made by this subsection apply to notices of intended termination made by group health plans and Medicare+Choice organizations after the date of the enactment of this Act.

(b) Guaranteed Access for Certain Medicare Beneficiaries to Medigap Policies in Case of Involuntary Termination of Coverage Under a Medicare+Choice Plan-

(1) IN GENERAL- Section 1882(s)(3)(C)(iii) (42 U.S.C. 1395ss(s)(3)(C)(iii)) is amended by inserting `or an individual described in subparagraph (B)(ii) or (B)(iii) in the case of circumstances described in section 1851(e)(4)(A)' after `subparagraph (B)(vi)'.

(2) EFFECTIVE DATE-

(A) IN GENERAL- Subject to subparagraph (B), the amendment made by paragraph (1) applies to terminations of coverage effected on or after the date of the enactment of this Act.

(B) TRANSITIONAL MEDIGAP OPEN ENROLLMENT PERIOD FOR CERTAIN INDIVIDUALS AFFECTED BY PLAN WITHDRAWALS DURING 1998- In the case of an individual described in subparagraph (B)(ii) or (B)(iii) of section 1882(s)(3) of the Social Security Act in the case of circumstances described in section 1851(e)(4)(A) of such Act (relating to discontinuation of a plan or organization entirely or in an area), if the termination or discontinuation of coverage occurred as of the end of 1998, and before the date of the enactment of this Act, the provisions of subparagraph (A) of section 1882(s)(3) such Act (in the matter up to and including clause (iii) thereof) shall apply to such an individual who seeks enrollment under a medicare supplemental policy during the 92-day period beginning with the first month that begins more than 30 days after the date of the enactment of this Act in the same manner as such provisions apply to an individual described in the matter following such clause (iii).

SEC. 3. APPLYING MEDIGAP AND MEDICARE+CHOICE PROTECTIONS TO DISABLED AND ESRD MEDICARE BENEFICIARIES.

(a) ASSURING AVAILABILITY OF MEDIGAP COVERAGE-

(1) IN GENERAL- Section 1882(s) (42 U.S.C. 1395ss(s)) is amended--

(A) in paragraph (2)(A), by striking `is 65 years of age or older and is' and inserting `is first';

(B) in paragraph (2)(D), by striking `who is 65 years of age or older as of the date of issuance and'; and

(C) paragraph (3)(B)(vi), by striking `at age 65'.

(2) EFFECTIVE DATE- The amendments made by paragraph (1) apply terminations of coverage effected on or after the date of the enactment of this Act, regardless of when the individuals become eligible for benefits under part A or part B of title XVIII of the Social Security Act.

(b) PERMITTING ESRD BENEFICIARIES TO ELECT ANOTHER MEDICARE+CHOICE PLAN IN CASE OF PLAN DISCONTINUANCE-

(1) IN GENERAL- Section 1851(a)(3)(B) (42 U.S.C. 1395w-21(a)(3)(B)) is amended by striking `except that' and all that follows and inserting the following: `except that--

`(i) an individual who develops end-stage renal disease while enrolled in a Medicare+Choice plan may continue to be enrolled in that plan; and

`(ii) in the case of such an individual who is enrolled in a Medicare+Choice plan under clause (i) (or subsequently under this clause), if the enrollment is discontinued under section 1851(e)(4)(A) the individual will be treated as a `Medicare+Choice eligible individual' for purposes of electing to continue enrollment in another Medicare+Choice plan.'.

(2) EFFECTIVE DATE- (A) The amendment made by paragraph (1) applies to terminations and discontinuations occurring on or after the date of the enactment of this Act.

(B) Clause (ii) of section 1851(a)(3)(B) of the Social Security Act (as inserted by such amendment) also shall apply to individuals whose enrollment in a Medicare+Choice plan was terminated or discontinued as of the end of 1998. In applying this subparagraph, such an individual shall be treated, for purposes of part C of title XVIII of the Social Security Act, as having discontinued enrollment in such a plan as of the date of the enactment of this Act.

SEC. 4. PROHIBITION OF ATTAINED-AGE RATING OF PREMIUMS FOR MEDIGAP POLICIES.

Section 1882 (42 U.S.C. 1395ss) is amended by adding at the end the following new subsection:

`(v)(1) A medicare supplemental policy may not be issued or renewed (or otherwise provide coverage after the deadline established under paragraph (2)) in any State unless the premiums for the policy do not increase for an individual under the policy based on the aging of the individual.

`(2) The requirement of paragraph (1) shall apply to premiums for policies under a timetable, recognized by the Secretary, that provides for an appropriate phase-in of such requirement. The Secretary shall recognize as the timetable such timetable as the National Association of Insurance Commissioners may recommend to the Secretary within 9 months after the date of the enactment of this subsection.'.

SEC. 5. NON-PREEMPTION OF STATE PRESCRIPTION DRUG COVERAGE MANDATES IN CASE OF APPROVED STATE MEDIGAP WAIVERS.

(a) IN GENERAL- Section 1856(b)(3) (42 U.S.C. 1395w-26(b)(3)) is amended--

(1) in subparagraph (A), by striking `The standards' and inserting `Subject to subparagraph (C), the standards', and

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

`(C) CONTINUATION OF STATE PRESCRIPTION DRUG LAWS- Subparagraph (A) shall not supersede any State law that requires the comprehensive coverage of prescription drugs or any regulation that carries out such a law, if--

`(i) the State has a waiver in effect under section 1882(p)(6)(A) with respect to requiring such coverage under medicare supplemental policies; or

`(ii) the Secretary provides for a waiver for the State to impose such a requirement under section 1882(p)(6)(B).'.

(b) MEDIGAP WAIVER- Section 1882(p)(6) (42 U.S.C. 1395ss(p)(6)) is amended--

(1) by inserting `(A)' after `(6)', and

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

`(B) The Secretary also may waive the application of the standards described in paragraph (1)(A)(i) for a State to include comprehensive prescription drug coverage among the benefits required for all medicare supplemental policies.'.

(c) EFFECTIVE DATE- The amendments made by this section take effect on the date of the enactment of this Act.

SEC. 6. PROHIBITION OF COLD-CALL MARKETING OF MEDICARE+CHOICE PLANS.

(a) IN GENERAL- Section 1851(h)(4) (42 U.S.C. 1395w-21(h)(4)) is amended--

(1) by striking `and' at the end of subparagraph (A),

(2) by striking the period at the end of subparagraph (B) and inserting `; and', and

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

`(C) shall include a prohibition against, directly or indirectly, conducting door-to-door, telephonic, or other `cold-call' marketing of enrollment under this part.'.

(b) EFFECTIVE DATE- The amendments made by subsection (a) apply to marketing of enrollment conducted on or after the date of the enactment of this Act.

SEC. 7. FLEXIBILITY IN DEFINITION OF SERVICE AREA UNDER THE MEDICARE+CHOICE PROGRAM.

(a) IN GENERAL- Section 1854(a) (42 U.S.C. 1395w-24(a)) is amended by adding at the end the following new paragraph:

`(6) SPECIAL RULES FOR SERVICE AREAS-

`(A) IN GENERAL- For purposes of this subsection, except as provided in this paragraph, the term `service area' means, for a Medicare+Choice organization that--

`(i) offers commercial health insurance coverage, that portion of the area identical to the service area used for purposes of offering such commercial coverage; or

`(ii) is a provider-sponsored organization that receives a Federal waiver of certain requirements under section 1855(a)(2) and does not offer commercial health insurance coverage, such area proposed by the organization and approved by the Secretary.

`(B) LIMITATION ON SERVICE AREA- In no case shall a service area for an organization include any area in which the organization is unable to provide benefits consistent with the requirements of section 1852(d).

`(C) TRANSITION FOR CURRENT CONTRACTORS- In the case of a Medicare+Choice organization that has in effect a contract under this part with the Secretary as of January 1, 1999, subparagraph (A) shall not apply to a contract year that begins before January 1, 2004, if the organization provides evidence that it has not (on or after January 1, 1999) eliminated, from the service area under this part, any area in which the organization continues to offer commercial health insurance coverage.

`(D) PERMITTING USE OF SEPARATE COMMERCIAL RATING AREAS-

`(i) IN GENERAL- If a Medicare+Choice organization offers commercial health insurance coverage and has multiple geographic areas with separate premium rates, subject to clause (ii), each of those commercial geographic rating areas may, at the option of the organization, be treated as a separate service area.

`(ii) LIMITATION ON SIZE- Unless otherwise approved by the Secretary, in no case shall a commercial geographic rating area that includes less than an entire county (or equivalent area) be treated as a separate service area.'.

(b) EFFECTIVE DATE- The amendment made by subsection (a) applies to contract years beginning on or after January 1, 2000.

SEC. 8. 3-YEAR PHASE-IN OF RISK ADJUSTMENT OF MEDICARE+CHOICE PLAN PAYMENTS.

Section 1853(a)(3)(C) (42 U.S.C. 1395w-23(a)(3)(C)) is amended by adding at the end the following: `Such risk adjustment methodology shall be implemented in a phased-in manner over a 3-year period.'.

SEC. 9. DELAY IN CERTAIN DEADLINES UNDER THE MEDICARE+CHOICE PROGRAM.

(a) DELAY IN RATE PROMULGATION DEADLINE- Section 1853(b)(1) (42 U.S.C. 1395w-23(b)(1)) is amended by striking `March 1' and inserting `May 1'.

(b) DELAY IN DEADLINE FOR SUBMISSION OF ADJUSTED COMMUNITY RATES AND RELATED INFORMATION-

(1) IN GENERAL- Section 1854(a)(1) (42 U.S.C. 1395w-24(a)(1)) is amended by striking `May 1' and inserting `July 1'.

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

(c) DELAY IN DEADLINE FOR GUBERNATORIAL REQUESTS FOR CHANGES IN PAYMENT AREAS- Section 1853(d)(3) (42 U.S.C. 1395w-23(d)(3)) is amended by striking `February 1' and inserting `March 1'.

SEC. 10. TAKING INTO ACCOUNT COSTS OF VA AND DOD MILITARY FACILITY SERVICES TO MEDICARE-ELIGIBLE BENEFICIARIES IN CALCULATION OF MEDICARE+CHOICE PLAN PAYMENT RATES.

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

(1) in subparagraph (A), by striking `subparagraph (B)' and inserting `subparagraphs (B) and (E)', and

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

`(E) INCLUSION OF COSTS OF VA AND DOD MILITARY FACILITY SERVICES TO MEDICARE-ELIGIBLE BENEFICIARIES- In determining the area-specific Medicare+Choice capitation rate under subparagraph (A) for a year (beginning with 2000), the annual per capita rate of payment for 1997 determined under section 1876(a)(1)(C) shall be adjusted to include in the rate the Secretary's best estimate on a per capita basis of the amount of additional payments that would have been made in the area involved under this title if beneficiaries under this title had not received services from facilities of the Department of Veterans Affairs or the Department of Defense.'.

(b) BUDGET NEUTRALITY- Section 1853(c) (42 U.S.C. 1395w-23(c)) is amended--

(1) in paragraph (1)(A), by striking `paragraph (5)' and inserting `paragraph (5)(A)';

(2) in paragraph (1)(C)(ii), by inserting before the period at the end the following: `and multiplied by the budget neutrality adjustment factor determined under paragraph (5)(B)'; and

(3) in paragraph (5)--

(A) by striking `FACTOR- ' and inserting `FACTORS- (A)',

(B) by inserting `(not taking into account subparagraph (B))' after `so that', and

(C) by adding at the end the following new subparagraph:

`(B) For purposes of paragraph (1)(C)(ii), for each year, the Secretary shall determine a budget neutrality adjustment factor so that the aggregate of the payments under this part shall equal the aggregate payments that would have been made under this part if paragraph (3)(E) did not apply.'.

SEC. 11. INCREASE IN CIVIL MONETARY PENALTIES FOR FAILURE TO MEET MEDIGAP OPEN ENROLLMENT REQUIREMENTS.

(a) IN GENERAL- Section 1882(s)(4) (42 U.S.C. 1395ss(s)(4)) is amended by striking `$5,000' and inserting `$50,000'.

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

SEC. 12. NAIC REVIEW AND UPDATE OF BENEFIT PACKAGES FOR MEDIGAP POLICIES.

Section 1882(p) (42 U.S.C. 1395ss(p)) is amended--

(1) in paragraph (2), by striking `The benefits' and inserting `Subject to paragraph (12), the benefits'; and

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

`(12)(A) The Secretary may request the National Association of Insurance Commissioners to review the appropriateness of the benefit packages established under paragraph (2) and, if appropriate, to recommend to the Secretary from time to time recommendations for changes in such packages to better reflect the needs of beneficiaries and modern medical practice.

`(B) If a recommendation for a change in benefit packages is recommended under subparagraph (A) and the Secretary finds that implementation of such recommendation is appropriate and consistent with carrying out the purposes of this section, the Secretary may provide that any reference in this subsection to the 1991 NAIC Model Regulation is deemed a reference to such Regulation as modified by the proposed recommendation. Any such change shall take effect as specified by the Secretary in such a manner as does not unduly disrupt the marketing of medicare supplemental policies.

`(C) Before implementing any recommendation under subparagraph (B), the Secretary shall submit a report to Congress on such recommendation, including a justification for the implementation of such recommendation.'.

END