[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1707 Introduced in House (IH)]







104th CONGRESS
  1st Session
                                H. R. 1707

  To amend title XVIII of the Social Security Act to ensure access to 
     services and prevent fraud and abuse for enrollees of health 
    maintenance organizations under the medicare program, to amend 
 standards for medicare supplemental policies, to modify the medicare 
                select program, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 24, 1995

   Mr. Stark (for himself, Mr. Waxman, Mr. Ackerman, Mr. Coyne, Mr. 
Dellums, Mr. Foglietta, Mr. Gonzalez, Mr. Kennedy of Rhode Island, Mr. 
  McDermott, Mr. Olver, Mr. Pallone, Ms. Pelosi, Mr. Rangel, and Ms. 
   Woolsey) introduced the following bill; which was referred to the 
  Committee on Commerce, and in addition to the Committee on Ways and 
 Means, 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 ensure access to 
     services and prevent fraud and abuse for enrollees of health 
    maintenance organizations under the medicare program, to amend 
 standards for medicare supplemental policies, to modify the medicare 
                select 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.

    This Act may be cited as the ``Medicare Beneficiary Protection 
Amendments of 1995''.

SEC. 2. REFERENCES IN ACT; TABLE OF CONTENTS.

    (a) 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.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title.
Sec. 2. References in act; table of contents.
 TITLE I--PROTECTIONS FOR BENEFICIARIES ENROLLED IN HEALTH MAINTENANCE 
                             ORGANIZATIONS

                     Subtitle A--Access to Services

Sec. 101. Requirements relating to providers of health services.
Sec. 102. Deadline for responding to requests for coverage of services.
Sec. 103. Requirements for organization service areas.
Sec. 104. Other enrollee protections.
Sec. 105. Requiring plans to provide expanded services.
Sec. 106. Outlier payments.
Sec. 107. Demonstration project on competitive rate setting.
            Subtitle B--Protections Against Fraud and Abuse

Sec. 111. Intermediate sanctions for program violations.
Sec. 112. Treatment of health care prepayment plans.
Sec. 113. Providing enrollees with certain information on plans.
Sec. 114. Restrictions on commissions for agents.
Sec. 115. Restrictions on in-person enrollment.
Sec. 116. Application of peer review to cost-based health maintenance 
                            organizations and health care pre-payment 
                            plans.
                       Subtitle C--Effective Date

Sec. 121. Effective date.
     TITLE II--PROTECTIONS FOR BENEFICIARIES ENROLLED IN MEDICARE 
               SUPPLEMENTAL AND MEDICARE SELECT POLICIES

Sec. 201. Changes in requirements for medicare supplemental policies.
Sec. 202. Application of standards to medicare select policies.
  TITLE III--COORDINATION OF ENROLLMENT AND TERMINATION OF ENROLLMENT

Sec. 301. Uniform open enrollment periods.
Sec. 302. Enrollments for new medicare beneficiaries and those who 
                            move.
Sec. 303. Provision by Secretary of enrollment information and other 
                            information on eligible organizations and 
                            medicare supplemental policies.
Sec. 304. Effective date.
 TITLE I--PROTECTIONS FOR BENEFICIARIES ENROLLED IN HEALTH MAINTENANCE 
                             ORGANIZATIONS

                     Subtitle A--Access to Services

SEC. 101. REQUIREMENTS RELATING TO PROVIDERS OF HEALTH SERVICES.

    (a) Due Process Protections for Providers.--Section 1876(c) (42 
U.S.C. 1395mm(c)) is amended by adding at the end the following new 
paragraph:
    ``(9)(A) In consultation with providers of health care services who 
are members of the organization's provider network, each eligible 
organization shall establish standards to be used by the organization 
for contracting with providers, and shall make descriptive information 
regarding these standards available to enrollees, providers who are 
members of the network, and prospective enrollees and prospective 
members of the network.
    ``(B)(i) An eligible organization may not terminate or refuse to 
renew an agreement with a provider of health care services to 
participate in the organization's provider network unless the 
organization provides written notification to the provider of the 
decision to terminate or refuse to renew the agreement. The 
notification shall include a statement of the reasons for the 
organization's decision, consistent with the standards established 
under subparagraph (A).
    ``(ii) The eligible organization shall provide the notification 
required under clause (i) at least 45 days prior to the effective date 
of the termination or expiration of the agreement (whichever is 
applicable). The previous sentence shall not apply if failure to 
terminate the agreement prior to the deadline would adversely affect 
the health or safety of an individual enrolled with the organization.
    ``(C)(i) Each eligible organization shall provide a process under 
which a provider of health care services may request a review of the 
organization's decision to terminate or refuse to renew the provider's 
participation agreement. Such review shall be conducted by a group of 
individuals the majority of whom are providers of health care services 
who are members of the organization's provider network or employees of 
the organization, and who are members of the same profession as the 
provider who requests the review.
    ``(ii) If the provider requests in advance, the eligible 
organization shall permit an attorney representing the provider to be 
present at the provider's review.
    ``(iii) The findings and conclusions of a review under this 
subparagraph shall be advisory and non-binding.
    ``(iv) Nothing in this subparagraph shall be construed to affect 
any other provision of law that provides an appeals process or other 
form of relief to a provider of health care services.
    ``(D) The term `provider network' means, with respect to an 
eligible organization, providers of health care services provided by or 
through the organization who have entered into an agreement with the 
organization under which the providers are obligated to provide such 
services to individuals enrolled with the organization.''.
    (b) Utilization Review.--
            (1) In general.--Section 1876(c) (42 U.S.C. 1395mm(c)), as 
        amended by subsection (a), is amended by adding at the end the 
        following new paragraph:
    ``(10)(A) An eligible organization may not deny coverage of or 
payment for items and services on the basis of a utilization review 
program unless the program meets the standards established by the 
Secretary under this paragraph.
    ``(B) The Secretary shall establish standards for utilization 
review programs of eligible organizations, consistent with subparagraph 
(C), and shall periodically review and update such standards to reflect 
changes in the delivery of health care services. The Secretary shall 
establish such standards in consultation with appropriate parties.
    ``(C) Under the standards established under subparagraph (B)--
            ``(i) individuals performing utilization review may not 
        receive financial compensation based upon the number of denials 
        of coverage;
            ``(ii) negative determinations of the medical necessity or 
        appropriateness of services or the site at which services are 
        furnished may be made only by clinically qualified personnel;
            ``(iii) the utilization review program shall provide for a 
        process under which an enrollee or provider may obtain timely 
        review of a denial of coverage;
            ``(iv) utilization review shall be conducted in accordance 
        with uniformly applied standards that are based on the most 
        currently available medical evidence; and
            ``(v) providers shall participate in the development of the 
        utilization review program.''.
            (2) Providing enrollees with description of requirements.--
        Section 1876(c)(3)(E) (42 U.S.C. 1395mm(c)(3)(E)) is amended--
                    (A) by striking ``and'' at the end of clause (iv);
                    (B) by striking the period at the end of clause 
                (v); and
                    (C) by adding at the end the following new clause:
            ``(vi) the organization's utilization review 
        requirements.''.
    (c) Access to Centers of Excellence.--Section 1876(c) (42 U.S.C. 
1395mm(c)), as amended by subsections (a) and (b), is amended by adding 
at the end the following new paragraph:
    ``(11)(A) Each eligible organization shall demonstrate that 
individuals enrolled with the plan who have chronic diseases or 
otherwise require specialized services have access through the 
organization to specialized treatment expertise of designated centers 
of excellence. The organization shall demonstrate such access according 
to standards developed by the Secretary, including requirements 
relating to arrangements with such centers and referral of enrollees to 
such centers.
    ``(B) The Secretary shall establish a process for the designation 
of facilities as centers of excellence for purposes of this paragraph. 
A facility may not be designated unless the facility is determined--
            ``(i) to provide specialty care,
            ``(ii) to deliver care for complex cases requiring 
        specialized treatment and for individuals with chronic 
        diseases, and
            ``(iii) to meet other requirements that may be established 
        by the Secretary relating to specialized education and training 
        of health professionals, participation in peer-reviewed 
        research, or treatment of patients from outside the geographic 
        area of the facility.''.
    (d) Recognition of Trauma Centers.--Section 1876(c)(4) (42 U.S.C. 
1395mm(c)(4)) is amended--
            (1) in subparagraph (B), by inserting after 
        ``organization'' the following: ``(including trauma services 
        provided by designated trauma centers)''; and
            (2) by adding at the end the following sentence: ``In 
        subparagraph (B), a `designated trauma center' has the meaning 
        given such term in section 1231 of the Public Health Service 
        Act, and includes a trauma center which the Secretary finds 
        meets the standards under section 1213 of such Act to be a 
        designated trauma center but is located in a State that has not 
        designated trauma centers under such section.''.
    (e) No Referral Required for Obstetrics and Gynecology.--Section 
1876(c) (42 U.S.C. 1395mm(c)), as amended by subsections (a), (b), and 
(c), is amended by adding at the end the following new paragraph:
    ``(12) An eligible organization may not require an individual to 
obtain a referral from a physician in order to obtain covered items and 
services from a physician who specializes in obstetrics and 
gynecology.''.
    (f) Coverage of Services of Essential Community Providers.--Section 
1876(c) (42 U.S.C. 1395mm(c)), as amended by subsections (a), (b), (c), 
and (e), is amended by adding at the end the following new paragraph:
    ``(13)(A) For purposes of paragraph (4)(A), the Secretary may 
require an eligible organization to enter into agreements with 
essential community providers serving the organization's service area 
to join the organization's provider network (as defined in paragraph 
(9)(D)) if the Secretary finds that such agreements are necessary for 
the organization to meet the requirements of such subparagraph.
    ``(B) In subparagraph (A), an `essential community provider' means 
a rural health clinic (described in section 1861(aa)(2)), a Federally 
qualified health center (described in section 1861(aa)(4)), and any 
other provider meeting such standards as the Secretary may require.''.
    (g) Access to Emergency Care Services.--Section 1876(c)(4)(B) (42 
U.S.C. 1395mm(c)(4)(B)), as amended by subsection (d), is further 
amended--
            (1) by inserting ``emergency'' before ``services'' the 
        first place it appears;
            (2) by striking ``, if (i)'' and all that follows through 
        ``the organization''; and
            (3) by adding at the end the following new sentence: ``In 
        such subparagraph, `emergency services' are services provided 
        to an individual after the sudden onset of a medical condition 
        that manifests itself by symptoms of sufficient severity 
        (including severe pain) such that the absence of immediate 
        medical attention could reasonably be expected by a prudent 
        layperson (possessing an average knowledge of health and 
        medicine) to result in placing the individual's health in 
        serious jeopardy, the serious impairment of a bodily function, 
        or the serious dysfunction of any bodily organ or part, and 
        includes services provided as a result of a call through the 
        911 emergency system.''.

SEC. 102. DEADLINE FOR RESPONDING TO REQUESTS FOR COVERAGE OF SERVICES.

    Section 1876(c)(5) (42 U.S.C. 1395mm(c)(5)) is amended by adding at 
the end the following new subparagraph:
    ``(C) In addition to the procedures available pursuant to 
subparagraph (A), in the case of the request of a member enrolled with 
an eligible organization for health services--
            ``(i) the eligible organization shall respond to the 
        request not later than 24 hours after the request is made; and
            ``(ii) the organization shall hear and resolve a member's 
        appeal of a denial of coverage of such services in accordance 
        with a process meeting standards established by the 
        Secretary.''.

SEC. 103. REQUIREMENTS FOR ORGANIZATION SERVICE AREAS.

    (a) In General.--Section 1876 (42 U.S.C. 1395mm(c)) is amended by 
adding at the end the following new subsection:
    ``(k)(1) Except as provided in paragraph (2), for purposes of this 
section, if an eligible organization's service area includes any part 
of a metropolitan statistical area, the service area shall include the 
entire metropolitan statistical area (including any area designated by 
the Secretary as a health professional shortage area under section 
332(a)(1)(A) of the Public Health Service Act within such metropolitan 
statistical area).
    ``(2) The Secretary may permit an organization's service area to 
exclude any portion of a metropolitan statistical area (other than the 
central county of such metropolitan statistical area) if--
            ``(A) the organization demonstrates that it lacks the 
        financial or administrative capacity to serve the entire 
        metropolitan statistical area; and
            ``(B) the Secretary finds that the composition of the 
        organization's service area does not reduce the financial risk 
        to the organization of providing services to enrollees because 
        of the health status or other demographic characteristics of 
        individuals residing in the service area (as compared to the 
        health status or demographic characteristics of individuals 
        residing in the portion of the metropolitan statistical area 
        not included in the organization's service area).''.
    (b) Conforming Amendment.--Section 1876(c)(4)(A)(i) (42 U.S.C. 
1395mm(c)(4)(A)(i)) is amended by striking ``the area served by the 
organization'' and inserting ``the organization's service area''.
SEC. 104. OTHER ENROLLEE PROTECTIONS.

    (a) Clarification of Restrictions on Charges for Out-of-Plan 
Services.--
            (1) Inpatient hospital and extended care services.--Section 
        1866(a)(1)(O) (42 U.S.C. 1395cc(a)(1)(O)) is amended in the 
        matter preceding clause (i) by inserting after ``this title'' 
        the following: ``(without regard to whether or not the services 
        are furnished on an emergency basis)''.
            (2) Physicians' services and renal dialysis services.--
        Section 1876(f)(2) (42 U.S.C. 1395mm(f)(2)) is amended by 
        striking ``this section'' and inserting ``this section (without 
        regard to whether or not the services are furnished on an 
        emergency basis)''.
    (b) Arrangements for Dialysis Services.--Section 1876(c) (42 U.S.C. 
1395mm(c)), as amended by subsections (a), (b), (c), (e), and (f) of 
section 101, is amended by adding at the end the following new 
paragraph:
    ``(14) Each eligible organization shall assure that enrollees 
requiring renal dialysis services who are temporarily outside of the 
organization's service area (within the United States) have reasonable 
access to such services by--
            ``(A) making such arrangements with providers of services 
        or renal dialysis facilities outside the service area for the 
        coverage of and payment for such services furnished to 
        enrollees as the Secretary determines necessary to assure 
        reasonable access; or
            ``(B) providing for the reimbursement of any provider of 
        services or renal dialysis facility outside the service area 
        for the furnishing of such services to enrollees.''.

SEC. 105. REQUIRING PLANS TO PROVIDE EXPANDED SERVICES.

    (a) In General.--The first sentence of section 1876(c)(2)(A) (42 
U.S.C. 1395mm(c)(2)(A)) is amended--
            (1) by striking ``(I)'' and inserting ``(III)'';
            (2) by striking ``and (II)'' and inserting ``(IV)'';
            (3) by inserting after ``except that'' the following: ``(I) 
        the organization shall provide members entitled to benefits 
        under part A with inpatient hospital services under this title 
        without regard to any limitation on the number of days of 
        coverage otherwise applicable under section 1812 and with 
        extended care services under this title without regard to 
        whether or not such services are post-hospital extended care 
        services, (II) the organization may not impose any cost-sharing 
        with respect to the services it provides which are covered 
        under this title or are described in subclause (I) unless the 
        amount imposed is nominal (in accordance with standards 
        established by the Secretary),''; and
            (4) by striking the period at the end and inserting the 
        following: ``, and (V) the organization may not discontinue 
        coverage of any such additional health care services unless the 
        organization provides enrollees with reasonable notice that the 
        services are to be discontinued.''.
    (b) Providing Enrollees With Information on Additional Covered 
Services.--Section 1876(c)(3)(E) (42 U.S.C. 1395mm(c)(3)(E)), as 
amended by section 101(b)(2), is amended--
            (1) by striking ``and'' at the end of clause (v);
            (2) by striking the period at the end of clause (vi) and 
        inserting ``, and''; and
            (3) by adding at the end the following new clause:
            ``(vii) the services provided by the organization which are 
        not covered under this title, including any limits imposed by 
        the organization on the provision of such services.''.
    (c) Conforming Calculation of Adjusted Community Rate.--Section 
1876(g)(2)(A) (42 U.S.C. 1395mm(g)(2)(A)) is amended by striking 
``parts)'' and inserting the following: ``parts and taking into account 
the expanded inpatient hospital services, extended care services, and 
nominal cost-sharing the organization is required to provide under 
subsection (c)(2)(A))''.

SEC. 106. OUTLIER PAYMENTS.

    (a) General Rule.--Section 1876(a)(1) (42 U.S.C. 1395mm(a)(1)) is 
amended by adding at the end the following:
    ``(G)(i) In the case of an eligible organization with a risk-
sharing contract, the Secretary may make additional payments to the 
organization equal to not more than 50 percent of the imputed 
reasonable cost (or, if so requested by the organization, the 
reasonable cost) above the threshold amount of services covered under 
parts A and B and provided (or paid for) in a year by the organization 
to any individual enrolled with the organization under this section.
    ``(ii) For purposes of clause (i), the `imputed reasonable cost' is 
an amount determined by the Secretary on a national, regional, or other 
basis that is related to the reasonable cost of services.
    ``(iii) For purposes of clause (i), the `threshold amount' is an 
amount determined by the Secretary from time to time, adjusted by the 
geographic factor utilized in determining payments to the organization 
under subparagraph (C) and rounded to the nearest multiple of $100, 
such that the total amount to be paid under this subparagraph for a 
year is estimated to be 5 percent or less of the total amount to be 
paid under risk-sharing contracts for services furnished for that year.
    ``(iv) An eligible organization shall submit a claim for additional 
payments under subsection (i) within such time as the Secretary may 
specify.
    ``(v) To the extent that total payments under clause (i) in a 
year--
            ``(I) exceed the payment set aside as a result of the 
        reduction under subparagraph (C) for the year, the Secretary 
        shall increase the percentage reduction under such subparagraph 
        for the following year by such percentage as will result in an 
        increase in the reduction equal to such excess in previous 
        payments, or
            ``(II) are less than the payment set aside as a result of 
        the reduction under subparagraph (C) for the year, the amount 
        of such difference shall remain available in the succeeding 
        years for additional payments under this subparagraph and the 
        Secretary may take such difference into account in establishing 
        the percentage reduction under subparagraph (C) for the 
        following year.''.
    (b) Conforming Amendment.--Section 1876(a)(1)(C) (42 U.S.C. 
1395mm(a)(1)(C)) is amended by inserting ``, reduced by a uniform 
percentage (determined by the Secretary for a year, subject to 
adjustment under subparagraph (G)(v)) so that the total reduction is 
estimated to equal the amount to be paid under subparagraph (G)'' 
before the period.

SEC. 107. DEMONSTRATION PROJECT ON COMPETITIVE RATE SETTING.

    The Secretary of Health and Human Services shall conduct a 
demonstration project in not more than 4 metropolitan statistical areas 
under which--
            (1) eligible organizations under section 1876 of the Social 
        Security Act with enrollees residing in such areas shall 
        participate in a competitive bidding process established by the 
        Secretary;
            (2) the amount of payment made to such organizations under 
        section 1876 of such Act shall be determined in accordance with 
        a methodology which takes such bids into account; and
            (3) an eligible organization may not enter into a risk-
        sharing contract under section 1876 of such Act with respect to 
        such enrollees unless the organization agrees to accept the 
        payment amount determined pursuant to paragraph (1) as the 
        amount paid to the organization under such section.

            Subtitle B--Protections Against Fraud and Abuse

SEC. 111. INTERMEDIATE SANCTIONS FOR PROGRAM VIOLATIONS.

    (a) Application of Intermediate Sanctions for Any Program 
Violations.--
            (1) In general.--Section 1876(i)(1) (42 U.S.C. 
        1395mm(i)(1)) is amended by striking ``the Secretary may 
        terminate'' and all that follows and inserting the following: 
        ``in accordance with procedures established under paragraph 
        (9), the Secretary may at any time terminate any such contract 
        or may impose the intermediate sanctions described in paragraph 
        (6)(B) or (6)(C) (whichever is applicable) on the eligible 
        organization if the Secretary determines that the 
        organization--
            ``(A) has failed substantially to carry out the contract;
            ``(B) is carrying out the contract in a manner inconsistent 
        with the efficient and effective administration of this 
        section;
            ``(C) is operating in a manner that is not in the best 
        interests of the individuals covered under the contract; or
            ``(D) no longer substantially meets the applicable 
        conditions of subsections (b), (c), (e), and (f).''.
            (2) Other intermediate sanctions for miscellaneous program 
        violations.--Section 1876(i)(6) (42 U.S.C. 1395mm(i)(6)) is 
        amended by adding at the end the following new subparagraph:
    ``(C) In the case of an eligible organization for which the 
Secretary makes a determination under paragraph (1) the basis of which 
is not described in subparagraph (A), the Secretary may apply the 
following intermediate sanctions:
            ``(i) civil money penalties of not more than $25,000 for 
        each determination under paragraph (1) if the deficiency that 
        is the basis of the determination has directly adversely 
        affected (or has the substantial likelihood of adversely 
        affecting) an individual covered under the organization's 
        contract;
            ``(ii) civil money penalties of not more than $10,000 for 
        each week beginning after the initiation of procedures by the 
        Secretary under paragraph (9) during which the deficiency that 
        is the basis of a determination under paragraph (1) exists; and
            ``(iii) suspension of enrollment of individuals under this 
        section after the date the Secretary notifies the organization 
        of a determination under paragraph (1) and until the Secretary 
        is satisfied that the deficiency that is the basis for the 
        determination has been corrected and is not likely to recur.''.
            (3) Procedures for imposing sanctions.--Section 1876(i) (42 
        U.S.C. 1395mm(i)) is amended by adding at the end the following 
        new paragraph:
    ``(9) The Secretary may terminate a contract with an eligible 
organization under this section or may impose the intermediate 
sanctions described in paragraph (6) on the organization in accordance 
with formal investigation and compliance procedures established by the 
Secretary under which--
            ``(A) the Secretary provides the organization with the 
        opportunity to develop and implement a corrective action plan 
        to correct the deficiencies that were the basis of the 
        Secretary's determination under paragraph (1);
            ``(B) the Secretary shall impose more severe sanctions on 
        organizations that have a history of deficiencies or that have 
        not taken steps to correct deficiencies the Secretary has 
        brought to their attention;
            ``(C) there are no unreasonable or unnecessary delays 
        between the finding of a deficiency and the imposition of 
        sanctions; and
            ``(D) the Secretary provides the organization with 
        reasonable notice and opportunity for hearing (including the 
        right to appeal an initial decision) before imposing any 
        sanction or terminating the contract.''.
            (4) Conforming amendments.--(A) Section 1876(i)(6)(B) (42 
        U.S.C. 1395mm(i)(6)(B)) is amended by striking the second 
        sentence.
            (B) Section 1876(i)(6) (42 U.S.C. 1395mm(i)(6)) is further 
        amended by adding at the end the following new subparagraph:
    ``(D) The provisions of section 1128A (other than subsections (a) 
and (b)) shall apply to a civil money penalty under subparagraph (A) or 
(B) in the same manner as they apply to a civil money penalty or 
proceeding under section 1128A(a).''.
    (b) Agreements With Peer Review Organizations.--
            (1) Requirement for written agreement.--Section 
        1876(i)(7)(A) (42 U.S.C. 1395mm(i)(7)(A)) is amended by 
        striking ``an agreement'' and inserting ``a written 
        agreement''.
            (2) Development of model agreement.--Not later than July 1, 
        1996, the Secretary of Health and Human Services shall develop 
        a model of the agreement that an eligible organization with a 
        risk-sharing contract under section 1876 of the Social Security 
        Act must enter into with an entity providing peer review 
        services with respect to services provided by the organization 
        under section 1876(i)(7)(A) of such Act.
            (3) Report by gao.--
                    (A) Study.--The Comptroller General shall conduct a 
                study of the costs incurred by eligible organizations 
                with risk-sharing contracts under section 1876(b) of 
                such Act of complying with the requirement of entering 
                into a written agreement with an entity providing peer 
                review services with respect to services provided by 
                the organization, together with an analysis of how 
                information generated by such entities is used by the 
                Secretary of Health and Human Services to assess the 
                quality of services provided by such eligible 
                organizations.
                    (B) Report to congress.--Not later than July 1, 
                1996, the Comptroller General shall submit a report to 
                the Committee on Ways and Means and the Committee on 
                Commerce of the House of Representatives and the 
                Committee on Finance of the Senate on the study 
                conducted under subparagraph (A).

SEC. 112. TREATMENT OF HEALTH CARE PREPAYMENT PLANS.

    (a) Applicability of Requirements for Plans.--Section 1833(a)(1)(A) 
(42 U.S.C. 1395l(a)(1)(A)) is amended by inserting after ``prepayment 
basis'' the following: ``and which meets the requirements of subsection 
(t)''.
    (b) Requirements Described.--Section 1833 (42 U.S.C. 1395l), as 
amended by section 160(d)(1) of the Social Security Act Amendments of 
1994, is amended by adding at the end the following new subsection:
    ``(t)(1) For purposes of subsection (a)(1)(A), an organization 
meets the requirements of this subsection for a year if the 
organization--
            ``(A) meets solvency standards established by the 
        Secretary'';
            ``(B) meets requirements established by the Secretary for 
        the marketing of its plan to beneficiaries; and
            ``(C) is not an eligible organization with a contract in 
        effect for the year under section 1876.
    ``(2) If the Secretary finds that an organization fails to meet the 
requirements described in paragraph (1), the Secretary may terminate 
the organization's contract under this section or impose any of the 
intermediate sanctions or remedies described in section 1876(i)(6) on 
the organization in the same manner as the Secretary may terminate a 
contract with an eligible organization under section 1876(i) or impose 
such sanctions or remedies on an eligible organization under section 
1876(i)(6).''.
    (c) Repeal of Application of Medigap Standards.--Section 1882(g)(1) 
(42 U.S.C. 1395ss(g)(1)), as amended by section 171(f)(1) of the Social 
Security Act Amendments of 1994, is amended by striking ``, or, during 
the period'' and all that follows through ``section 1833(a)(1)(A)''.

SEC. 113. PROVIDING ENROLLEES WITH CERTAIN INFORMATION ON PLANS.

    (a) Information on Physician Incentive Plans.--
    Section 1876(i)(8)(A) (42 U.S.C. 1395mm(i)(8)(A)) is amended by 
adding at the end the following new clause:
            ``(iv) Upon the request of an enrollee of the organization 
        or an individual considering enrollment with the organization, 
        the organization shall provide the enrollee with descriptive 
        information regarding the physician incentive plan.''.
    (b) Information on Provider Credentials.--Section 1876(c)(3)(E) (42 
U.S.C. 1395mm(c)(3)(E)), as amended by section 101(b)(2) and section 
105(b), is amended--
            (1) by striking ``and'' at the end of clause (vi);
            (2) by striking the period at the end of clause (vii) and 
        inserting ``, and''; and
            (3) by adding at the end the following new clause:
            ``(viii) the credentials of the individuals and entities 
        providing services to enrollees.''.

SEC. 114. RESTRICTIONS ON COMMISSIONS FOR AGENTS.

    Section 1876(c) (42 U.S.C. 1395mm(c)), as amended by paragraphs 
(1), (2), (3), (5), and (6) of subsection (a) and section 104(b), is 
amended by adding at the end the following new paragraph:
    ``(15) In the case of an eligible organization which employs agents 
to enroll individuals under this section and which pays an agent a 
commission with respect to the enrollment of an individual--
            ``(A) such commissions may not constitute the predominant 
        source of the agent's total compensation from the organization 
        (in accordance with standards established by the Secretary); 
        and
            ``(B) if an agent receives a commission from the 
        organization with respect to an individual who enrolls with the 
        organization and the individual terminates enrollment with the 
        organization during the 90-day period beginning on the date of 
        the individual's enrollment, the organization shall recoup the 
        commission from the agent.''.

SEC. 115. RESTRICTIONS ON IN-PERSON ENROLLMENT.

    Section 1876(c)(3) (42 U.S.C. 1395mm(c)(3)) is amended by adding at 
the end the following new subparagraph:
    ``(H) Each eligible organization shall permit an individual 
entitled to benefits under part A to obtain enrollment forms and 
information and to enroll under this section by mail, and no agent of 
an eligible organization may visit the residence of such an individual 
for purposes of enrolling the individual under this section or 
providing enrollment information to the individual other than at the 
individual's request.''.
SEC. 116. APPLICATION OF PEER REVIEW TO COST-BASED HEALTH MAINTENANCE 
              ORGANIZATIONS AND HEALTH CARE PRE-PAYMENT PLANS.

    Section 1876(i)(7)(A) (42 U.S.C. 1395mm(i)(7)(A)) is amended--
            (1) by striking ``risk-sharing'';
            (2) by inserting after ``this section'' the following: 
        ``and each contract with an organization described in section 
        1833(a)(1)(A)''; and
            (3) by striking ``eligible'' the second and third place it 
        appears.

                       Subtitle C--Effective Date

SEC. 121. EFFECTIVE DATE.

    The amendments made by this title shall apply with respect to 
contract years beginning on or after January 1, 1997.

     TITLE II--PROTECTIONS FOR BENEFICIARIES ENROLLED IN MEDICARE 
               SUPPLEMENTAL AND MEDICARE SELECT POLICIES

SEC. 201. CHANGES IN REQUIREMENTS FOR MEDICARE SUPPLEMENTAL POLICIES.

    (a) Requirement of Community Rating.--
            (1) In general.--Section 1882(s) (42 U.S.C. 1395ss(s)) is 
        amended--
                    (A) in paragraph (3), by striking ``and (2)'' and 
                inserting ``, (2), and (3)'', and by redesignating such 
                paragraph as paragraph (4), and
                    (B) by inserting after paragraph (2) the following 
                new paragraph:
    ``(3)(A) Except as provided in this paragraph, the issuer of a 
medicare supplemental policy may not vary the premium among individuals 
who reside in the same community rating area.
    ``(B)(i) In the first year for which this paragraph applies to such 
an issuer in a State, the premium rate charged by the issuer for such a 
policy in a community may vary so long as the premium range percentage 
(as defined in clause (iii)) does not exceed \2/3\ of the premium range 
percentage of premium rates charged by the insurer for such policies in 
the community rating area in the previous year.
    ``(ii) In the second year for which this paragraph applies to such 
an issuer in a State, the premium rate charged by the issuer for such a 
policy in a community may vary so long as the premium range percentage 
(as defined in clause (iii)) does not exceed \1/2\ of the maximum 
premium range percentage permitted under clause (i) for the previous 
year.
    ``(iii) In this paragraph, the term `premium range percentage' 
means--
            ``(I) the highest premium rate minus the lowest premium 
        rate, divided by
            ``(II) the lowest premium rate,
expressed as a percentage.
    ``(C) For purposes of this paragraph, each of the following is 
considered to be a separate `community rating area':
            ``(1) Each metropolitan statistical area.
            ``(2) The area of each State that is not within a 
        metropolitan statistical area.
            (2) Conforming amendment.--Section 1882(s)(2)(A) (42 U.S.C. 
        1395ss(s)(2)(A)) is amended by striking ``, or discriminate in 
        the pricing of the policy,''.
    (b) Increase in Loss Ratio.--Section 1882(r)(1)(A) (42 U.S.C. 
1395ss(r)(1)(A)) is amended by striking ``75 percent'' and all that 
follows through the semicolon and inserting ``85 percent;''.
    (c) Effective Date.--
            (1) NAIC standards.--If, within 6 months after the date of 
        the enactment of this Act, the National Association of 
        Insurance Commissioners (in this section referred to as the 
        ``NAIC'') makes changes in the 1991 NAIC Model Regulation (as 
        defined in section 1882(p)(1)(A) of the Social Security Act) to 
        incorporate the additional requirements imposed by the 
        amendments made by this section, section 1882(g)(2)(A) of such 
        Act shall be applied in each State, effective for policies 
        issued to policyholders on and after the date specified in 
        paragraph (3), as if the reference to the Model Regulation 
        adopted on June 6, 1979, were a reference to the 1991 NAIC 
        Model Regulation (as so defined) as changed under this section 
        (such changed Regulation referred to in this section as the 
        ``1995 NAIC Model Regulation'').
            (2) Secretary standards.--If the NAIC does not make changes 
        in the 1991 NAIC Model Regulation (as so defined) within the 6-
        month period specified in paragraph (1), the Secretary of 
        Health and Human Services (in this subsection as the 
        ``Secretary'') shall promulgate a regulation and section 
        1882(g)(2)(A) of the Social Security Act shall be applied in 
        each State, effective for policies issued to policyholders on 
        and after the date specified in paragraph (3), as if the 
        reference to the Model Regulation adopted in June 6, 1979, were 
        a reference to the 1991 NAIC Model Regulation (as so defined) 
        as changed by the Secretary under this subsection (such changed 
        Regulation referred to in this subsection as the ``1995 Federal 
        Regulation'').
            (3) Date specified.--
                    (A) In general.--Subject to subparagraph (B), the 
                date specified in this paragraph for a State is the 
                earlier of--
                            (i) the date the State adopts the 1995 NAIC 
                        Model Regulation or the 1995 Federal 
                        Regulation; or
                            (ii) 1 year after the date the NAIC or the 
                        Secretary first adopts such regulations.
                    (B) Additional legislative action required.--In the 
                case of a State which the Secretary identifies, in 
                consultation with the NAIC, as--
                            (i) requiring State legislation (other than 
                        legislation appropriating funds) in order for 
                        medicare supplemental policies to meet the 1995 
                        NAIC Model Regulation or the 1995 Federal 
                        Regulation, but
                            (ii) having a legislature which is not 
                        scheduled to meet in 1996 in a legislative 
                        session in which such legislation may be 
                        considered,
                the date specified in this paragraph is the first day 
                of the first calendar quarter beginning after the close 
                of the first legislative session of the State 
                legislature that begins on or after January 1, 1996. 
                For purposes of the previous sentence, in the case of a 
                State that has a 2-year legislative session, each year 
                of such session shall be deemed to be a separate 
                regular session of the State legislature.

SEC. 202. APPLICATION OF STANDARDS TO MEDICARE SELECT POLICIES.

    Section 1882(t) (42 U.S.C. 1395ss(t)) is amended--
            (1) in the matter in paragraph (1) before subparagraph (A), 
        by inserting ``, under the standards established under 
        paragraph (4)'' after ``if'';
            (2) by striking ``and'' at the end of paragraph (1)(E);
            (3) by striking the period at the end of paragraph (1)(F) 
        and inserting a semicolon;
            (4) by adding at the end of paragraph (1) the following new 
        subparagraphs:
                    ``(G) notwithstanding any other provision of this 
                section to the contrary, if the issuer of the policy 
                meet the requirements of paragraph (5).'';
            (5) by adding at the end of paragraph (2) the following: 
        ``The intermediate sanctions described in clauses (ii) and 
        (iii) of section 1876(i)(6)(B) shall apply to actions described 
        in the first sentence of this paragraph in the same manner as 
        they apply to violations described in section 1876(i)(6)(A).''; 
        and
            (6) by adding at the end the following new paragraphs:
    ``(4)(A) The Secretary shall establish by regulation standards for 
policies in order to be provided special treatment under paragraph (1). 
To the extent practicable, such standards shall be the same as the 
standards established by the National Association of Insurance 
Commissioners with respect to such policies. Any additional standards 
shall be developed in consultation with such Association.
    ``(B) If the Secretary determines that a State has established an 
effective program to enforce the standards established under 
subparagraph (A), any policy that a State determines under such program 
to meet such standards shall be deemed to meet such standards for 
purposes of this section.
    ``(5) For purposes of paragraph (1), the requirements of this 
paragraph, with respect to a policy are as follows:
            ``(A) If the issuer of the policy--
                    ``(i) is an eligible organization (as defined in 
                section 1876(a)), the benefits under the policy (in 
                coordination with benefits made available under this 
                title) are the same as the benefits required to be made 
                available by such an organization with a risk-sharing 
                contract under section 1876, or
                    ``(ii) is not such an organization, the benefits 
                under the policy shall be either--
                            ``(I) the benefits required under the 
                        Standardized Medicare supplement benefit plan 
                        `E' (as specified in section 9E(5) of the 1991 
                        NAIC Model Regulation), plus One Hundred 
                        Percent (100%) of the Medicare Part B Excess 
                        Charges (as defined in section 8C(5) of such 
                        Regulation); or
                            ``(II) the benefits required under the 
                        Standardized Medicare supplement benefit plan 
                        `J' (as specified in section 9E(10) of such 
                        Regulation).
            ``(B) The issuer of the policy (in relation to the policy) 
        meets the same requirements under section 1876 that would apply 
        to an eligible organization with a risk-sharing contract under 
        that section (including community rating of premiums and prior 
        approval of marketing materials, but not including provision of 
        benefits).''.

  TITLE III--COORDINATION OF ENROLLMENT AND TERMINATION OF ENROLLMENT

SEC. 301. UNIFORM OPEN ENROLLMENT PERIODS.

    (a) For Capitated Plans.--
            (1) Establishment.--The first sentence of section 
        1876(c)(3)(A)(i) (42 U.S.C. 1395mm(c)(3)(A)(i)) is amended by 
        inserting ``(which shall be specified by the Secretary)'' after 
        ``open enrollment period''.
            (2) Period for termination of enrollment.--Section 
        1876(c)(3)(B) (42 U.S.C. 1395mm(c)(3)(B)) is amended to read as 
        follows:
    ``(B)(i) Except in the case of an individual terminating enrollment 
for cause, an individual may terminate enrollment with an eligible 
organization under this section only during the open enrollment period 
described in subparagraph (A)(i), except as follows:
            ``(I) For the first 12-month period during which the 
        individual is enrolled with the organization, the individual 
        may terminate enrollment during the final month of each 
        calendar quarter occurring during such period.
            ``(II) For the second year in which the individual is 
        enrolled with the organization, the individual may terminate 
        enrollment during the final month of the second calendar 
        quarter.
            ``(III) In the case of an eligible organization with a 
        reasonable cost reimbursement contract or an organization which 
        is financially insolvent, the individual may terminate 
        enrollment in accordance with regulations prescribed by the 
        Secretary.
    ``(ii) An individual's termination of enrollment shall be effective 
as of the beginning of the first calendar month following the date on 
which the individual requests such termination (or, in the case of an 
organization with a reasonable cost reimbursement contract or an 
organization which is financially insolvent, as may be prescribed by 
the Secretary in regulations).
    ``(iii) If an individual terminates enrollment with an eligible 
organization, the organization shall provide the individual with a copy 
of the written request for termination and a written explanation of the 
period (ending on the effective date of the termination under clause 
(ii)) during which the individual continues to be enrolled with the 
organization and may not receive benefits under this title other than 
through the organization.''.
    (b) For Medigap Plans.--Section 1882(s) (42 U.S.C. 1395ss(s)), as 
amended by section 201(a)(1), is amended--
            (1) in paragraph (4), by striking ``and (3)'' and inserting 
        ``, (3), and (4)'', and by redesignating such paragraph as 
        paragraph (5), and
            (2) by inserting after paragraph (3) the following new 
        paragraph:
    ``(4)(A) Each issuer of a medicare supplemental policy shall have 
an open enrollment period (which shall be the period specified by the 
Secretary under section 1876(c)(3)(A)(i)), of at least 30 days duration 
every year, during which the issuer may not deny or condition the 
issuance or effectiveness of a medicare supplemental policy, or 
discriminate in the pricing of the policy, because of age, health 
status, claims experience, receipt of health care, or medical 
condition. The policy may not provide any time period applicable to 
pre-existing conditions, waiting periods, elimination periods, and 
probationary periods (except as provided by paragraph (2)(B)). The 
Secretary may require enrollment through a third party designated under 
section 1876(c)(3)(B).
    ``(B) The provisions of section 1876(c)(3)(B) shall apply with 
respect to the termination of enrollment with the issuer of a medicare 
supplemental policy in the same manner as such provisions apply with 
respect to the termination of enrollment with an eligible organization 
under section 1876.''.
    (c) For Medicare Select Policies.--Section 1882(t)(5) (42 U.S.C. 
1395ss(t)(5)), as added by section 202(a)(6), is amended by adding at 
the end the following new subparagraph:
            ``(C) The periods for enrollment and termination of 
        enrollment applicable for the policy are the same periods 
        applicable to a medicare supplemental policy under section 
        1882(s)(4).''.

SEC. 302. ENROLLMENTS FOR NEW MEDICARE BENEFICIARIES AND THOSE WHO 
              MOVE.

    Section 1876(c)(3)(A) (42 U.S.C. 1395mm(c)(3)(A)) is amended--
            (1) in clause (i), by striking ``clause (ii)'' and 
        inserting ``clauses (ii) through (iv)'', and
            (2) by adding at the end the following:
    ``(iii) Each eligible organization shall have an open enrollment 
period for each individual eligible to enroll under subsection (d) 
during any enrollment period specified by section 1837 that applies to 
that individual. Enrollment under this clause shall be effective as 
specified by section 1838.
    ``(iv) Each eligible organization shall have an open enrollment 
period for each individual eligible to enroll under subsection (d) who 
has previously resided outside the geographic area which the 
organization serves. The enrollment period shall begin with the 
beginning of the month that precedes the month in which the individual 
becomes a resident of that geographic area and shall end at the end of 
the following month. Enrollment under this clause shall be effective as 
of the first of the month following the month in which the individual 
enrolls.''.

SEC. 303. PROVISION BY SECRETARY OF ENROLLMENT INFORMATION AND OTHER 
              INFORMATION ON ELIGIBLE ORGANIZATIONS AND MEDICARE 
              SUPPLEMENTAL POLICIES.

    (a) In General.--Section 1804(b) (42 U.S.C. 1395b-2(b)), as added 
by section 171(j)(1)(C) of the Social Security Act Amendments of 1994, 
is amended to read as follows:
    ``(b) The Secretary shall provide information upon request 
(including through the mails and via a toll-free telephone number) to 
any individual entitled to benefits under this title on the programs 
under this title, including--
            ``(1) information to assist individuals in enrolling with 
        eligible organizations under section 1876 and in selecting 
        among such organizations for enrollment, including information 
        on the premiums charged by such organizations for enrollment; 
        and
            ``(2) information on medicare supplemental policies under 
        section 1882, including the relationship of State programs 
        under title XIX to such policies and the premiums charged by 
        such policies for enrollment (to the extent information on such 
        premiums is available to the Secretary).''.
    (b) Conforming Amendment.--Section 1882(f) (42 U.S.C. 1395ss(f)), 
as added by section 171(j)(2) of the Social Security Act Amendments of 
1994, is repealed.

SEC. 304. EFFECTIVE DATE.

    The amendments made by this title apply to enrollments and 
terminations of enrollments occurring after 1996 (but only after the 
Secretary of Health and Human Services has prescribed the relevant 
annual period), except that the amendments made by section 301(b) apply 
to enrollments for a medicare supplemental policy made after 1996.
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