S 3029 IS

To amend part C of title XVIII to stabilize the Medicare+Choice program by improving the methodology for the calculation of Medicare+Choice payment rates, and for other purposes.

September 12, 2000

Mr. SANTORUM introduced the following bill; which was read twice and referred to the Committee on Finance

To amend part C of title XVIII to stabilize the Medicare+Choice program by improving the methodology for the calculation of Medicare+Choice payment rates, 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 Beneficiaries' Choice Stabilization Act of 2000'.

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

Sec. 1. Short title; table of contents.

Sec. 2. Establishment of payment floor for Medicare+Choice payment rates after applying risk-adjustment methodology.

Sec. 3. Change in application of budget neutrality adjustment for 2001 and 2002.

Sec. 4. Increase in national per capita Medicare+Choice growth percentage in 2001 and 2002.

Sec. 5. Increasing minimum payment amount.

Sec. 6. Allowing movement to 50:50 percent blend in 2002.

Sec. 7. Increased update for payment areas with only one or no Medicare+Choice contracts.

Sec. 8. Permitting higher negotiated rates in certain Medicare+Choice payment areas below national average.

Sec. 9. 10-year phase in of risk adjustment based on data from all settings.

Sec. 10. Delay from July to November, 2000 in deadline for offering and withdrawing Medicare+Choice plans for 2001.

Sec. 11. Miscellaneous regulatory changes.

SEC. 2. ESTABLISHMENT OF PAYMENT FLOOR FOR MEDICARE+CHOICE PAYMENT RATES AFTER APPLYING RISK-ADJUSTMENT METHODOLOGY.

(a) IN GENERAL- Section 1853(c)(1) of the Social Security Act (42 U.S.C. 1395w-23(c)(1)) is amended--

(1) in the matter preceding subparagraph (A), by striking `or (C)' and inserting `(C), or (D)'; and

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

`(D) DEMOGRAPHICALLY ADJUSTED FEE-FOR-SERVICE PER CAPITA EXPENDITURES-

`(i) IN GENERAL- For 2001 and each subsequent year, 90 percent of the adjusted average per capita cost for the year for the Medicare+Choice payment area determined by the Secretary based upon the rule specified under paragraph (4) of section 1876(a) and calculated without regard to the adjustment under paragraph (1)(C) of such section.

`(ii) SPECIAL RULE FOR RISK ADJUSTMENT- For purposes of applying risk adjustment to the payment amount determined under this subparagraph for a demographic class, the risk adjustment for such demographic class shall be determined under the methodology applied by the Secretary under section 1876(a)(4) without regard to subsection (a)(3) of this section.'.

(b) CONTINUATION OF COMPUTATION OF AAPCC DATA- Section 1853(b) of such Act (42 U.S.C. 1395w-23(b)) is amended by adding at the end the following new paragraph:

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

SEC. 3. ELIMINATION OF BUDGET NEUTRALITY ADJUSTMENT FOR 2001 AND 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 a year (other than 2001 or 2002)' after `multiplied'; and

(2) in paragraph (5), by inserting `(other than 2001 or 2002)' after `for each year'.

SEC. 4. 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 percentage points'; and

(2) in clause (v), by striking `for 2002, 0.3 percentage points' and inserting `for 2002, 0 percentage points'.

SEC. 5. 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 2001 for any of the 50 States and the District of Columbia, $475.'.

(b) EFFECTIVE DATE- The amendments made by subsection (a) apply to years beginning with 2001.

SEC. 6. 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 2001 and for 2002.'.

SEC. 7. 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) 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 2001, 2002, 2003, 2004, and 2005, in the case of a Medicare+Choice payment area in which there is no more than one 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. 8. 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 Secretary 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 Secretary, 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. 9. 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 (or substantially 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.'.

SEC. 10. DELAY FROM JULY TO NOVEMBER, 2000 IN DEADLINE FOR OFFERING AND WITHDRAWING MEDICARE+CHOICE PLANS FOR 2001.

Notwithstanding any other provision of law, the deadline for a Medicare+Choice organization to withdraw the offering of a Medicare+Choice plan under part C of title XVIII of the Social Security Act (or otherwise to submit information required for the offering of such a plan) for 2001 is delayed from July 1, 2000, to November 1, 2000, and any such organization that provided notice of withdrawal of such a plan during 2000 before the date of the enactment of this Act may rescind such withdrawal at any time before November 1, 2000.

SEC. 11. MISCELLANEOUS REGULATORY CHANGES.

(a) PROHIBITION ON REQUIREMENT TO SUBMIT ENCOUNTER DATA- Section 1853(a)(3)(B) of the Social Security Act (42 U.S.C. 1395w-23(a)(3)(B)) is amended--

(1) by designating the matter following `DATA COLLECTION' as a clause (i) with appropriate indentation and the heading `IN GENERAL'; and

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

`(ii) ISSUANCE OF DATA SUBMISSION REQUIREMENTS- The Secretary may not require under clause (i) the submission of encounter data to support a risk adjustment methodology based on all (or substantially all) settings until a reasonable time after the Secretary issues the complete requirements for data submission. Such requirements shall be limited to the minimum data elements necessary to support the risk adjustment methodology. Such system shall be designed to accept the required minimum data elements in a form and manner compatible with

Medicare+Choice organizations' operations.

`(iii) EVALUATION- In issuing such data submission requirements, the Secretary must include an evaluation by an outside, independent actuary of whether the proposed data elements are the minimum necessary to support the risk adjustment methodology.'.

(b) POST-STABILIZATION GUIDELINES- Section 1852(d)(2) of such Act (42 U.S.C. 1395w-22(d)(2)) is amended by adding at the end the following: `In prescribing such guidelines--

`(A) post-stabilization care shall be limited to care related to treatment of the condition that precipitated the provision of emergency services; and

`(B) the provider of emergency services is not authorized to provide post-stabilization care unless--

`(i) the Medicare+Choice organization has been notified as soon as practicable, but not later than 2 hours after stabilization, in advance of the request to provide such care;

`(ii) the organization has either approved the request or not responded to such request within a reasonable period (of at least 3 hours) after it has been notified; and

`(iii) the emergency services provider maintains a written documentation concerning the notice and the organization's response to such notice.'.

(c) ENROLLMENT PROCESS-

(1) ALLOWING ON-LINE ENROLLMENT- Section 1851(c)(2) of such Act (42 U.S.C. 1395w-21(c)(2)) is amended by adding at the end the following:

`(C) ON-LINE APPLICATIONS- Such process shall permit the filing of appropriate election forms under subparagraphs (A) and (B) to be done through electronic means (including use of the Internet).'.

(2) MORATORIUM ON CHANGES IN MEDICARE+CHOICE ENROLLMENT RULES- The Secretary of Health and Human Services shall not make any changes in the enrollment and disenrollment instructions and related materials (including operational policy letters and evidence of coverage) under the Medicare+Choice program under part C of title XVIII of the Social Security Act between the date of the enactment of this Act and January 1, 2002, except as may be specifically and only required to comply with a change in statute.

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