[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4567 Engrossed in House (EH)]


  2d Session

                               H. R. 4567

_______________________________________________________________________

                                 AN ACT

 To amend titles XI and XVIII of the Social Security Act to revise the 
  per beneficiary and per visit home health payment limits under the 
medicare program, to improve access to health care services for certain 
 medicare-eligible veterans, to authorize additional exceptions to the 
      imposition of civil money penalties in cases of payments to 
  beneficiaries, and to expand the membership of the Medicare Payment 
                          Advisory Commission.
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
105th CONGRESS
  2d Session
                                H. R. 4567

_______________________________________________________________________

                                 AN ACT


 
 To amend titles XI and XVIII of the Social Security Act to revise the 
  per beneficiary and per visit home health payment limits under the 
medicare program, to improve access to health care services for certain 
 medicare-eligible veterans, to authorize additional exceptions to the 
      imposition of civil money penalties in cases of payments to 
  beneficiaries, and to expand the membership of the Medicare Payment 
                          Advisory Commission.

    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 Home 
Health and Veterans Health Care Improvement Act of 1998''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:


Sec. 1. Short title; table of contents.
  TITLE I--MEDICARE HOME HEALTH CARE INTERIM PAYMENT SYSTEM REFINEMENT

Sec. 101. Increase in per beneficiary limits and per visit payment 
                            limits for payment for home health 
                            services.
             TITLE II--VETERANS MEDICARE ACCESS IMPROVEMENT

Sec. 201. Improvement in veterans' access to services.
  TITLE III--AUTHORIZATION OF ADDITIONAL EXCEPTIONS TO IMPOSITION OF 
                   PENALTIES FOR CERTAIN INDUCEMENTS

Sec. 301. Authorization of additional exceptions to imposition of 
                            penalties for providing inducements to 
                            beneficiaries.
  TITLE IV--EXPANSION OF MEMBERSHIP OF THE MEDICARE PAYMENT ADVISORY 
                               COMMISSION

Sec. 401. Expansion of membership of MedPAC to 17.
                        TITLE V--REVENUE OFFSET

Sec. 501. Revenue offset.

  TITLE I--MEDICARE HOME HEALTH CARE INTERIM PAYMENT SYSTEM REFINEMENT

SEC. 101. INCREASE IN PER BENEFICIARY LIMITS AND PER VISIT PAYMENT 
              LIMITS FOR PAYMENT FOR HOME HEALTH SERVICES.

    (a) Increase in Per Beneficiary Limits.--Section 1861(v)(1)(L) of 
the Social Security Act (42 U.S.C. 1395x(v)(1)(L)) is amended--
            (1) in the first sentence of clause (v), by inserting 
        ``subject to clause (viii)(I),'' before ``the Secretary'';
            (2) in clause (vi)(I), by inserting ``subject to clauses 
        (viii)(II) and (viii)(III)'' after ``fiscal year 1994''; and
            (3) by adding at the end the following new clause:
    ``(viii)(I) In the case of a provider with a 12-month cost 
reporting period ending in fiscal year 1994, if the limit imposed under 
clause (v) (determined without regard to this subclause) for a cost 
reporting period beginning during or after fiscal year 1999 is less 
than the median described in clause (vi)(I) (but determined as if any 
reference in clause (v) to `98 percent' were a reference to `100 
percent'), the limit otherwise imposed under clause (v) for such 
provider and period shall be increased by \1/2\ of such difference.
    ``(II) Subject to subclause (IV), for new providers and those 
providers without a 12-month cost reporting period ending in fiscal 
year 1994, but for which the first cost reporting period begins before 
fiscal year 1999, for cost reporting periods beginning during or after 
fiscal year 1999, the per beneficiary limitation described in clause 
(vi)(I) shall be equal to 50 percent of the median described in such 
clause plus 50 percent of the sum of 75 percent of such median and 25 
percent of 98 percent of the standardized regional average of such 
costs for the agency's census division, described in clause (v)(I). 
However, in no case shall the limitation under this subclause be less 
than the median described in clause (vi)(I) (determined as if any 
reference in clause (v) to `98 percent' were a reference to `100 
percent').
    ``(III) Subject to subclause (IV), in the case of a new home health 
agency for which the first cost reporting period begins during or after 
fiscal year 1999, the limitation applied under clause (vi)(I) (but only 
with respect to such provider) shall be equal to 75 percent of the 
median described in clause (vi)(I).
    ``(IV) In the case of a new provider or a provider without a 12-
month cost reporting period ending in fiscal year 1994, subclause (II) 
shall apply, instead of subclause (III), to a home health agency which 
filed an application for home health agency provider status under this 
title before September 15, 1998, or which was approved as a branch of 
its parent agency before such date and becomes a subunit of the parent 
agency or a separate agency on or after such date.
    ``(V) Each of the amounts specified in subclauses (I) through (III) 
are such amounts as adjusted under clause (iii) to reflect variations 
in wages among different areas.''.
    (b) Revision of Per Visit Limits.--Section 1861(v)(1)(L)(i) of such 
Act (42 U.S.C. 1395x(v)(1)(L)(i)) is amended--
            (1) in subclause (III), by striking ``or'';
            (2) in subclause (IV)--
                    (A) by inserting ``and before October 1, 1998,'' 
                after ``October 1, 1997,''; and
                    (B) by striking the period at the end and inserting 
                ``, or''; and
            (3) by adding at the end the following new subclause:
            ``(V) October 1, 1998, 108 percent of such median.''.
    (c) Exclusion of Additional Part B Costs From Determination of Part 
B Monthly Premium.--Section 1839 of such Act (42 U.S.C. 1395r) is 
amended--
            (1) in subsection (a)(3), by inserting ``(except as 
        provided in subsection (g))'' after ``year that''; and
            (2) by adding at the end the following new subsection:
    ``(g) In estimating the benefits and administrative costs which 
will be payable from the Federal Supplementary Medical Insurance Trust 
Fund for a year for purposes of determining the monthly premium rate 
under subsection (a)(3), the Secretary shall exclude an estimate of any 
benefits and administrative costs attributable to the application of 
section 1861(v)(1)(L)(viii) or to the establishment under section 
1861(v)(1)(L)(i)(V) of a per visit limit at 108 percent of the median 
(instead of 105 percent of the median), but only to the extent payment 
for home health services under this title is not being made under 
section 1895 (relating to prospective payment for home health 
services).''.
    (d) Reports on Summary of Research Conducted by the Secretary on 
the Prospective Payment System.--By not later than January 1, 1999, the 
Secretary of Health and Human Services shall submit to Congress a 
report on the following matters:
            (1) Research.--A description of any research paid for by 
        the Secretary on the development of a prospective payment 
        system for home health services furnished under the medicare 
        care program under title XVIII of the Social Security Act, and 
        a summary of the results of such research.
            (2) Schedule for implementation of system.--The Secretary's 
        schedule for the implementation of the prospective payment 
        system for home health services under section 1895 of the 
        Social Security Act (42 U.S.C. 1395fff).
            (3) Alternative to 15 percent reduction in limits.--The 
        Secretary's recommendations for one or more alternative means 
        to provide for savings equivalent to the savings estimated to 
        be made by the mandatory 15 percent reduction in payment limits 
        for such home health services for fiscal year 2000 under 
        section 1895(b)(3)(A) of the Social Security Act (42 U.S.C. 
        1395fff(b)(3)(A)), or, in the case the Secretary does not 
        establish and implement such prospective payment system, under 
        section 4603(e) of the Balanced Budget Act of 1997.
    (e) MedPAC Reports.--
            (1) Review of secretary's report.--Not later than 60 days 
        after the date the Secretary of Health and Human Services 
        submits to Congress the report under subsection (d), the 
        Medicare Payment Advisory Commission (established under section 
        1805 of the Social Security Act (42 U.S.C. 1395b-6)) shall 
        submit to Congress a report describing the Commission's 
        analysis of the Secretary's report, and shall include the 
        Commission's recommendations with respect to the matters 
        contained in such report.
            (2) Annual report.--The Commission shall include in its 
        annual report to Congress for June 1999 an analysis of whether 
        changes in law made by the Balanced Budget Act of 1997, as 
        modified by the amendments made by this section, with respect 
        to payments for home health services furnished under the 
        medicare program under title XVIII of the Social Security Act 
        impede access to such services by individuals entitled to 
        benefits under such program.
    (f) GAO Audit of Research Expenditures.--The Comptroller General of 
the United States shall conduct an audit of sums obligated or expended 
by the Health Care Financing Administration for the research described 
in subsection (d)(1), and of the data, reports, proposals, or other 
information provided by such research.
    (g) Prompt Implementation.--The Secretary of Health and Human 
Services shall promptly issue (without regard to chapter 8 of title 5, 
United States Code) such regulations or program memoranda as may be 
necessary to effect the amendments made by this section for cost 
reporting periods beginning on or after October 1, 1998. In effecting 
the amendments made by subsection (a) for cost reporting periods 
beginning in fiscal year 1999, the ``median'' referred to in section 
1861(v)(1)(L)(vi)(I) of the Social Security Act for such periods shall 
be the national standardized per beneficiary limitation specified in 
Table 3C published in the Federal Register on August 11, 1998, (63 FR 
42926) and the ``standardized regional average of such costs'' referred 
to in section 1861(v)(1)(L)(v)(I) of such Act for a census division 
shall be the sum of the labor and nonlabor components of the 
standardized per-beneficiary limitation for that census division 
specified in Table 3B published in the Federal Register on that date 
(63 FR 42926) (or in Table 3D as so published with respect to Puerto 
Rico and Guam).

             TITLE II--VETERANS MEDICARE ACCESS IMPROVEMENT

SEC. 201. IMPROVEMENT IN VETERANS' ACCESS TO SERVICES.

    (a) In General.--Title XVIII of the Social Security Act, as amended 
by sections 4603, 4801, and 4015(a) of the Balanced Budget Act of 1997, 
is amended by adding at the end the following:

                ``improving veterans' access to services

    ``Sec. 1897. (a) Definitions.--In this section:
            ``(1) Administering secretaries.--The term `administering 
        Secretaries' means the Secretary of Health and Human Services 
        and the Secretary of Veterans Affairs acting jointly.
            ``(2) Program.--The term `program' means the program 
        established under this section with respect to category A 
        medicare-eligible veterans.
            ``(3) Demonstration project; project.--The terms 
        `demonstration project' and `project' mean the demonstration 
        project carried out under this section with respect to category 
        C medicare-eligible veterans.
            ``(4) Medicare-eligible veterans.--
                    ``(A) Category a medicare-eligible veteran.--The 
                term `category A medicare-eligible veteran' means an 
                individual--
                            ``(i) who is a veteran (as defined in 
                        section 101(2) of title 38, United States Code) 
                        and is described in paragraph (1) or (2) of 
                        section 1710(a) of title 38, United States 
                        Code;
                            ``(ii) who is entitled to hospital 
                        insurance benefits under part A of the medicare 
                        program and is enrolled in the supplementary 
                        medical insurance program under part B of the 
                        medicare program; and
                            ``(iii) for whom the medical center of the 
                        Department of Veterans Affairs that is closest 
                        to the individual's place of residence is 
                        geographically remote or inaccessible from such 
                        place.
                    ``(B) Category c medicare-eligible veteran.--The 
                term `category C medicare-eligible veteran' means an 
                individual who--
                            ``(i) is a veteran (as defined in section 
                        101(2) of title 38, United States Code) and is 
                        described in section 1710(a)(3) of title 38, 
                        United States Code; and
                            ``(ii) is entitled to hospital insurance 
                        benefits under part A of the medicare program 
                        and is enrolled in the supplementary medical 
                        insurance program under part B of the medicare 
                        program.
            ``(5) Medicare health care services.--The term `medicare 
        health care services' means items or services covered under 
        part A or B of this title.
            ``(6) Trust funds.--The term `trust funds' means the 
        Federal Hospital Insurance Trust Fund established in section 
        1817 and the Federal Supplementary Medical Insurance Trust Fund 
        established in section 1841.
    ``(b) Program and Demonstration Project.--
            ``(1) In general.--
                    ``(A) Establishment.--The administering Secretaries 
                are authorized to establish--
                            ``(i) a program (under an agreement entered 
                        into by the administering Secretaries) under 
                        which the Secretary of Health and Human 
                        Services shall reimburse the Secretary of 
                        Veterans Affairs, from the trust funds, for 
                        medicare health care services furnished to 
                        category A medicare-eligible veterans; and
                            ``(ii) a demonstration project (under such 
                        an agreement) under which the Secretary of 
                        Health and Human Services shall reimburse the 
                        Secretary of Veterans Affairs, from the trust 
                        funds, for medicare health care services 
                        furnished to category C medicare-eligible 
                        veterans.
                    ``(B) Agreement.--The agreement entered into under 
                subparagraph (A) shall include at a minimum--
                            ``(i) a description of the benefits to be 
                        provided to the participants of the program and 
                        the demonstration project established under 
                        this section;
                            ``(ii) a description of the eligibility 
                        rules for participation in the program and 
                        demonstration project, including any cost 
                        sharing requirements;
                            ``(iii) a description of the process for 
                        enrolling veterans for participation in the 
                        program, which process may, to the extent 
                        practicable, be administered in the same or 
                        similar manner to the registration process 
                        established to implement section 1705 of title 
                        38, United States Code;
                            ``(iv) a description of how the program and 
                        the demonstration project will satisfy the 
                        requirements under this title;
                            ``(v) a description of the sites selected 
                        under paragraph (2);
                            ``(vi) a description of how reimbursement 
                        requirements under subsection (g) and 
                        maintenance of effort requirements under 
                        subsection (h) will be implemented in the 
                        program and in the demonstration project;
                            ``(vii) a statement that all data of the 
                        Department of Veterans Affairs and of the 
                        Department of Health and Human Services that 
                        the administering Secretaries determine is 
                        necessary to conduct independent estimates and 
                        audits of the maintenance of effort 
                        requirement, the annual reconciliation, and 
                        related matters required under the program and 
                        the demonstration project shall be available to 
                        the administering Secretaries;
                            ``(viii) a description of any requirement 
                        that the Secretary of Health and Human Services 
                        waives pursuant to subsection (d);
                            ``(ix) a requirement that the Secretary of 
                        Veterans Affairs undertake and maintain 
                        outreach and marketing activities, consistent 
                        with capacity limits under the program, for 
                        category A medicare-eligible veterans;
                            ``(x) a description of how the 
                        administering Secretaries shall conduct the 
                        data matching program under subparagraph (F), 
                        including the frequency of updates to the 
                        comparisons performed under subparagraph 
                        (F)(ii); and
                            ``(xi) a statement by the Secretary of 
                        Veterans Affairs that the type or amount of 
                        health care services furnished under chapter 17 
                        of title 38, United States Code, to veterans 
                        who are entitled to benefits under part A or 
                        enrolled under part B, or both, shall not be 
                        reduced by reason of the program or project.
                    ``(C) Cost-sharing under demonstration project.--
                Notwithstanding any provision of title 38, United 
                States Code, in order--
                            ``(i) to maintain and broaden access to 
                        services,
                            ``(ii) to encourage appropriate use of 
                        services, and
                            ``(iii) to control costs,
                the Secretary of Veterans Affairs may establish 
                enrollment fees and copayment requirements under the 
                demonstration project under this section consistent 
                with subsection (d)(1). Such fees and requirements may 
                vary based on income.
                    ``(D) Health care benefits.--The administering 
                Secretaries shall prescribe the minimum health care 
                benefits to be provided under the program and 
                demonstration project to medicare-eligible veterans 
                enrolled in the program or project. Those benefits 
                shall include at least all medicare health care 
                services covered under this title.
                    ``(E) Establishment of service networks.--
                            ``(i) Use of va outpatient clinics.--The 
                        Secretary of Veterans Affairs, to the extent 
                        practicable, shall use outpatient clinics of 
                        the Department of Veterans Affairs in providing 
                        services under the program.
                            ``(ii) Authority to contract for 
                        services.--The Secretary of Veterans Affairs 
                        may enter into contracts and arrangements with 
                        entities (such as private practitioners, 
                        providers of services, preferred provider 
                        organizations, and health care plans) for the 
                        provision of services for which the Secretary 
                        of Health and Human Services is responsible 
                        under the program or project under this section 
                        and shall take into account the existence of 
                        qualified practitioners and providers in the 
                        areas in which the program or project is being 
                        conducted. Under such contracts and 
                        arrangements, such Secretary of Health and 
                        Human Services may require the entities to 
                        furnish such information as such Secretary may 
                        require to carry out this section.
                    ``(F) Data match.--
                            ``(i) Establishment of data matching 
                        program.--The administering Secretaries shall 
                        establish a data matching program under which 
                        there is an exchange of information of the 
                        Department of Veterans Affairs and of the 
                        Department of Health and Human Services as is 
                        necessary to identify veterans who are entitled 
                        to benefits under part A or enrolled under part 
                        B, or both, in order to carry out this section. 
                        The provisions of section 552a of title 5, 
                        United States Code, shall apply with respect to 
                        such matching program only to the extent the 
                        administering Secretaries find it feasible and 
                        appropriate in carrying out this section in a 
                        timely and efficient manner.
                            ``(ii) Performance of data match.--The 
                        administering Secretaries, using the data 
                        matching program established under clause (i), 
                        shall perform a comparison in order to identify 
                        veterans who are entitled to benefits under 
                        part A or enrolled under part B, or both. To 
                        the extent such Secretaries deem appropriate to 
                        carry out this section, the comparison and 
                        identification may distinguish among such 
                        veterans by category of veterans, by 
                        entitlement to benefits under this title, or by 
                        other characteristics.
                            ``(iii) Deadline for first data match.--The 
                        administering Secretaries shall first perform a 
                        comparison under clause (ii) by not later than 
                        October 31, 1998.
                            ``(iv) Certification by inspector 
                        general.--
                                    ``(I) In general.--The 
                                administering Secretaries may not 
                                conduct the program unless the 
                                Inspector General of the Department of 
                                Health and Human Services certifies to 
                                Congress that the administering 
                                Secretaries have established the data 
                                matching program under clause (i) and 
                                have performed a comparison under 
                                clause (ii).
                                    ``(II) Deadline for 
                                certification.--Not later than December 
                                15, 1998, the Inspector General of the 
                                Department of Health and Human Services 
                                shall submit a report to Congress 
                                containing the certification under 
                                subclause (I) or the denial of such 
                                certification.
            ``(2) Number of sites.--The program and demonstration 
        project shall be conducted in geographic service areas of the 
        Department of Veterans Affairs, designated jointly by the 
        administering Secretaries after review of all such areas, as 
        follows:
                    ``(A) Program sites.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the program shall be conducted in 
                        not more than 3 such areas with respect to 
                        category A medicare-eligible veterans.
                            ``(ii) Additional program sites.--Subject 
                        to the certification required under subsection 
                        (h)(1)(B)(iii), for a year beginning on or 
                        after January 1, 2003, the program shall be 
                        conducted in such areas as are designated 
                        jointly by the administering Secretaries after 
                        review of all such areas.
                    ``(B) Project sites.--
                            ``(i) In general.--The demonstration 
                        project shall be conducted in not more than 3 
                        such areas with respect to category C medicare-
                        eligible veterans.
                            ``(ii) Mandatory site.--At least one of the 
                        areas designated under clause (i) shall 
                        encompass the catchment area of a military 
                        medical facility which was closed pursuant to 
                        either the Defense Base Closure and Realignment 
                        Act of 1990 (part A of title XXIX of Public Law 
                        101-510; 10 U.S.C. 2687 note) or title II of 
                        the Defense Authorization Amendments and Base 
                        Closure and Realignment Act (Public Law 100-
                        526; 10 U.S.C. 2687 note).
            ``(3) Restriction.--Funds from the program or demonstration 
        project shall not be used for--
                    ``(A) the construction of any treatment facility of 
                the Department of Veterans Affairs; or
                    ``(B) the renovation, expansion, or other 
                construction at such a facility.
            ``(4) Duration.--The administering Secretaries shall 
        conduct and implement the program and the demonstration project 
        as follows:
                    ``(A) Program.--
                            ``(i) In general.--The program shall begin 
                        on January 1, 2000, in the sites designated 
                        under paragraph (2)(A)(i) and, subject to 
                        subsection (h)(1)(B)(iii)(II), for a year 
                        beginning on or after January 1, 2003, the 
                        program may be conducted in such additional 
                        sites designated under paragraph (2)(A)(ii).
                            ``(ii) Limitation on number of veterans 
                        covered under certain circumstances.--If for a 
                        year beginning on or after January 1, 2003, the 
                        program is conducted only in the sites 
                        designated under paragraph (2)(A)(i), medicare 
                        health care services may not be provided under 
                        the program to a number of category-A medicare-
                        eligible veterans that exceeds the aggregate 
                        number of such veterans covered under the 
                        program as of December 31, 2002.
                    ``(B) Project.--The demonstration project shall 
                begin on January 1, 1999, and end on December 31, 2001.
                    ``(C) Implementation.--The administering 
                Secretaries may implement the program and demonstration 
                project through the publication of regulations that 
                take effect on an interim basis, after notice and 
                pending opportunity for public comment.
            ``(5) Reports.--
                    ``(A) Program.--By not later than September 1, 
                1999, the administering Secretaries shall submit a copy 
                of the agreement entered into under paragraph (1) with 
                respect to the program to Congress.
                    ``(B) Project.--By not later than November 1, 1998, 
                the administering Secretaries shall submit a copy of 
                the agreement entered into under paragraph (1) with 
                respect to the project to Congress.
            ``(6) Report on maintenance of level of health care 
        services.--
                    ``(A) In general.--The Secretary of Veterans 
                Affairs may not implement the program at a site 
                designated under paragraph (2)(A) unless, by not later 
                than 90 days before the date of the implementation, the 
                Secretary of Veterans Affairs submits to Congress and 
                to the Comptroller General of the United States a 
                report that contains the information described in 
                subparagraph (B). The Secretary of Veterans Affairs 
                shall periodically update the report under this 
                paragraph as appropriate.
                    ``(B) Information described.--For purposes of 
                subparagraph (A), the information described in this 
                subparagraph is a description of the operation of the 
                program at the site and of the steps to be taken by the 
                Secretary of Veterans Affairs to prevent the reduction 
                of the type or amount of health care services furnished 
                under chapter 17 of title 38, United States Code, to 
                veterans who are entitled to benefits under part A or 
                enrolled under part B, or both, within the geographic 
                service area of the Department of Veterans Affairs in 
                which the site is located by reason of the program or 
                project.
    ``(c) Crediting of Payments.--A payment received by the Secretary 
of Veterans Affairs under the program or demonstration project shall be 
credited to the applicable Department of Veterans Affairs medical care 
appropriation (and within that appropriation). Any such payment 
received during a fiscal year for services provided during a prior 
fiscal year may be obligated by the Secretary of Veterans Affairs 
during the fiscal year during which the payment is received.
    ``(d) Application of Certain Medicare Requirements.--
            ``(1) Authority.--
                    ``(A) In general.--Except as provided under 
                subparagraph (B), the program and the demonstration 
                project shall meet all requirements of Medicare+Choice 
                plans under part C and regulations pertaining thereto, 
                and other requirements for receiving medicare payments, 
                except that the prohibition of payments to Federal 
                providers of services under sections 1814(c) and 
                1835(d), and paragraphs (2) and (3) of section 1862(a) 
                shall not apply.
                    ``(B) Waiver.--Except as provided in paragraph (2), 
                the Secretary of Health and Human Services is 
                authorized to waive any requirement described under 
                subparagraph (A), or approve equivalent or alternative 
                ways of meeting such a requirement, but only if such 
                waiver or approval--
                            ``(i) reflects the unique status of the 
                        Department of Veterans Affairs as an agency of 
                        the Federal Government; and
                            ``(ii) is necessary to carry out the 
                        program or demonstration project.
            ``(2) Beneficiary protections and other matters.--The 
        program and the demonstration project shall comply with the 
        requirements of part C of this title that relate to beneficiary 
        protections and other matters, including such requirements 
        relating to the following areas, to the extent not inconsistent 
        with subsection (b)(1)(B)(iii):
                    ``(A) Enrollment and disenrollment.
                    ``(B) Nondiscrimination.
                    ``(C) Information provided to beneficiaries.
                    ``(D) Cost-sharing limitations.
                    ``(E) Appeal and grievance procedures.
                    ``(F) Provider participation.
                    ``(G) Access to services.
                    ``(H) Quality assurance and external review.
                    ``(I) Advance directives.
                    ``(J) Other areas of beneficiary protections that 
                the administering Secretaries determine are applicable 
                to such program or project.
    ``(e) Inspector General.--Nothing in the agreement entered into 
under subsection (b) shall limit the Inspector General of the 
Department of Health and Human Services from investigating any matters 
regarding the expenditure of funds under this title for the program and 
demonstration project, including compliance with the provisions of this 
title and all other relevant laws.
    ``(f) Voluntary Participation.--Participation of a category A 
medicare-eligible veteran in the program or category C medicare-
eligible veteran in the demonstration project shall be voluntary.
    ``(g) Payments Based on Regular Medicare Payment Rates.--
            ``(1) In general.--Subject to the succeeding provisions of 
        this subsection, the Secretary of Health and Human Services 
        shall reimburse the Secretary of Veterans Affairs for services 
        provided under the program or demonstration project at a rate 
        equal to 95 percent of the amount paid to a Medicare+Choice 
        organization under part C of this title with respect to such an 
        enrollee. In cases in which a payment amount may not otherwise 
        be readily computed, the Secretary of Health and Human Services 
        shall establish rules for computing equivalent or comparable 
        payment amounts.
            ``(2) Exclusion of certain amounts.--In computing the 
        amount of payment under paragraph (1), the following shall be 
        excluded:
                    ``(A) Special payments.--Any amount attributable to 
                an adjustment under subparagraphs (B) and (F) of 
                section 1886(d)(5) and subsection (h) of such section.
                    ``(B) Percentage of capital payments.--An amount 
                determined by the administering Secretaries for amounts 
                attributable to payments for capital-related costs 
                under subsection (g) of such section.
            ``(3) Periodic payments from medicare trust funds.--
        Payments under this subsection shall be made--
                    ``(A) on a periodic basis consistent with the 
                periodicity of payments under this title; and
                    ``(B) in appropriate part, as determined by the 
                Secretary of Health and Human Services, from the trust 
                funds.
            ``(4) Cap on reimbursement amounts.--The aggregate amount 
        to be reimbursed under this subsection pursuant to the 
        agreement entered into between the administering Secretaries 
        under subsection (b) is as follows:
                    ``(A) Program.--With respect to category A 
                medicare-eligible veterans, such aggregate amount shall 
                not exceed--
                            ``(i) for 2000, a total of $50,000,000;
                            ``(ii) for 2001, a total of $75,000,000; 
                        and
                            ``(iii) subject to subparagraph (B), for 
                        2002 and each succeeding year, a total of 
                        $100,000,000.
                    ``(B) Expansion of program.--If for a year 
                beginning on or after January 1, 2003, the program is 
                conducted in sites designated under subsection 
                (b)(2)(A)(ii), the limitation under subparagraph 
                (A)(iii) shall not apply to the program for such a 
                year.
                    ``(C) Project.--With respect to category C 
                medicare-eligible veterans, such aggregate amount shall 
                not exceed a total of $50,000,000 for each of calendar 
                years 1999 through 2001.
    ``(h) Maintenance of Effort.--
            ``(1) Monitoring effect of program and demonstration 
        project on costs to medicare program.--
                    ``(A) In general.--The administering Secretaries, 
                in consultation with the Comptroller General of the 
                United States, shall closely monitor the expenditures 
                made under this title for category A and C medicare-
                eligible veterans compared to the expenditures that 
                would have been made for such veterans if the program 
                and demonstration project had not been conducted. The 
                agreement entered into by the administering Secretaries 
                under subsection (b) shall require the Department of 
                Veterans Affairs to maintain overall the level of 
                effort for services covered under this title to such 
                categories of veterans by reference to a base year as 
                determined by the administering Secretaries.
                    ``(B) Determination of measure of costs of medicare 
                health care services.--
                            ``(i) Improvement of information management 
                        system.--Not later than October 1, 2001, the 
                        Secretary of Veterans Affairs shall improve its 
                        information management system such that, for a 
                        year beginning on or after January 1, 2002, the 
                        Secretary of Veterans Affairs is able to 
                        identify costs incurred by the Department of 
                        Veterans Affairs in providing medicare health 
                        care services to medicare-eligible veterans for 
                        purposes of meeting the requirements with 
                        respect to maintenance of effort under an 
                        agreement under subsection (b)(1)(A).
                            ``(ii) Identification of medicare health 
                        care services.--The Secretary of Health and 
                        Human Services shall provide such assistance as 
                        is necessary for the Secretary of Veterans 
                        Affairs to determine which health care services 
                        furnished by the Secretary of Veterans Affairs 
                        qualify as medicare health care services.
                            ``(iii) Certification by hhs inspector 
                        general.--
                                    ``(I) Request for certification.--
                                The Secretary of Veterans Affairs may 
                                request the Inspector General of the 
                                Department of Health and Human Services 
                                to make a certification to Congress 
                                that the Secretary of Veterans Affairs 
                                has improved its management system 
                                under clause (i) such that the 
                                Secretary of Veterans Affairs is able 
                                to identify the costs described in such 
                                clause in a reasonably reliable and 
                                accurate manner.
                                    ``(II) Requirement for expansion of 
                                program.--The program may be conducted 
                                in the additional sites under paragraph 
                                (2)(A)(ii) and cover such additional 
                                category A medicare eligible veterans 
                                in such additional sites only if the 
                                Inspector General of the Department of 
                                Health and Human Services has made the 
                                certification described in subclause 
                                (I).
                                    ``(III) Deadline for 
                                certification.--Not later than the date 
                                that is the earlier of the date that is 
                                60 days after the Secretary of Veterans 
                                Affairs requests a certification under 
                                subclause (I) or June 1, 2002, the 
                                Inspector General of the Department of 
                                Health and Human Services shall submit 
                                a report to Congress containing the 
                                certification under subclause (I) or 
                                the denial of such certification.
                    ``(C) Maintenance of level of effort.--
                            ``(i) Report by secretary of veterans 
                        affairs on basis for calculation.--Not later 
                        than the date that is 60 days after the date on 
                        which the administering Secretaries enter into 
                        an agreement under subsection (b)(1)(A), the 
                        Secretary of Veterans Affairs shall submit a 
                        report to Congress and the Comptroller General 
                        of the United States explaining the methodology 
                        used and basis for calculating the level of 
                        effort of the Department of Veterans Affairs 
                        under the program and project.
                            ``(ii) Report by comptroller general.--Not 
                        later than the date that is 180 days after the 
                        date described in clause (i), the Comptroller 
                        General of the United States shall submit to 
                        Congress and the administering Secretaries a 
                        report setting forth the Comptroller General's 
                        findings, conclusion, and recommendations with 
                        respect to the report submitted by the 
                        Secretary of Veterans Affairs under clause (i).
                            ``(iii) Response by secretary of veterans 
                        affairs.--The Secretary of Veterans Affairs 
                        shall submit to Congress not later than 60 days 
                        after the date described in clause (ii) a 
                        report setting forth such Secretary's response 
                        to the report submitted by the Comptroller 
                        General under clause (ii).
                    ``(D) Annual report by the comptroller general.--
                Not later than December 31 of each year during which 
                the program and demonstration project is conducted, the 
                Comptroller General of the United States shall submit 
                to the administering Secretaries and to Congress a 
                report on the extent, if any, to which the costs of the 
                Secretary of Health and Human Services under the 
                medicare program under this title increased during the 
                preceding fiscal year as a result of the program or 
                demonstration project.
            ``(2) Required response in case of increase in costs.--
                    ``(A) In general.--If the administering Secretaries 
                find, based on paragraph (1), that the expenditures 
                under the medicare program under this title increased 
                (or are expected to increase) during a fiscal year 
                because of the program or demonstration project, the 
                administering Secretaries shall take such steps as may 
                be needed--
                            ``(i) to recoup for the medicare program 
                        the amount of such increase in expenditures; 
                        and
                            ``(ii) to prevent any such increase in the 
                        future.
                    ``(B) Steps.--Such steps--
                            ``(i) under subparagraph (A)(i) shall 
                        include payment of the amount of such increased 
                        expenditures by the Secretary of Veterans 
                        Affairs from the current medical care 
                        appropriation for the Department of Veterans 
                        Affairs to the trust funds; and
                            ``(ii) under subparagraph (A)(ii) shall 
                        include lowering the amount of payment under 
                        the program or project under subsection (g)(1), 
                        and may include, in the case of the 
                        demonstration project, suspending or 
                        terminating the project (in whole or in part).
    ``(i) Evaluation and Reports.--
            ``(1) Independent evaluation by gao.--
                    ``(A) In general.--The Comptroller General of the 
                United States shall conduct an evaluation of the 
                program and an evaluation of the demonstration project, 
                and shall submit annual reports on the program and 
                demonstration project to the administering Secretaries 
                and to Congress.
                    ``(B) First report.--The first report for the 
                program or demonstration project under subparagraph (A) 
                shall be submitted not later than 12 months after the 
                date on which the Secretary of Veterans Affairs first 
                provides services under the program or project, 
                respectively.
                    ``(C) Final report on demonstration project.--A 
                final report shall be submitted with respect to the 
                demonstration project not later than 3\1/2\ years after 
                the date of the first report on the project under 
                subparagraph (B).
                    ``(D) Contents.--The evaluation and reports under 
                this paragraph for the program or demonstration project 
                shall include an assessment, based on the agreement 
                entered into under subsection (b), of the following:
                            ``(i) Any savings or costs to the medicare 
                        program under this title resulting from the 
                        program or project.
                            ``(ii) The cost to the Department of 
                        Veterans Affairs of providing care to category 
                        A medicare-eligible veterans under the program 
                        or to category C medicare-eligible veterans 
                        under the demonstration project, respectively.
                            ``(iii) An analysis of how such program or 
                        project affects the overall accessibility of 
                        medical care through the Department of Veterans 
                        Affairs, and a description of the unintended 
                        effects (if any) upon the patient enrollment 
                        system under section 1705 of title 38, United 
                        States Code.
                            ``(iv) Compliance by the Department of 
                        Veterans Affairs with the requirements under 
                        this title.
                            ``(v) The number of category A medicare-
                        eligible veterans or category C medicare-
                        eligible veterans, respectively, opting to 
                        participate in the program or project instead 
                        of receiving health benefits through another 
                        health insurance plan (including benefits under 
                        this title).
                            ``(vi) A list of the health insurance plans 
                        and programs that were the primary payers for 
                        medicare-eligible veterans during the year 
                        prior to their participation in the program or 
                        project, respectively, and the distribution of 
                        their previous enrollment in such plans and 
                        programs.
                            ``(vii) Any impact of the program or 
                        project, respectively, on private health care 
                        providers and beneficiaries under this title 
                        that are not enrolled in the program or 
                        project.
                            ``(viii) An assessment of the access to 
                        care and quality of care for medicare-eligible 
                        veterans under the program or project, 
                        respectively.
                            ``(ix) An analysis of whether, and in what 
                        manner, easier access to medical centers of the 
                        Department of Veterans Affairs affects the 
                        number of category A medicare-eligible veterans 
                        or C medicare-eligible veterans, respectively, 
                        receiving medicare health care services.
                            ``(x) Any impact of the program or project, 
                        respectively, on the access to care for 
                        category A medicare-eligible veterans or C 
                        medicare-eligible veterans, respectively, who 
                        did not enroll in the program or project and 
                        for other individuals entitled to benefits 
                        under this title.
                            ``(xi) A description of the difficulties 
                        (if any) experienced by the Department of 
                        Veterans Affairs in managing the program or 
                        project, respectively.
                            ``(xii) Any additional elements specified 
                        in the agreement entered into under subsection 
                        (b).
                            ``(xiii) Any additional elements that the 
                        Comptroller General of the United States 
                        determines is appropriate to assess regarding 
                        the program or project, respectively.
            ``(2) Reports by secretaries on program and demonstration 
        project with respect to medicare-eligible veterans.--
                    ``(A) Demonstration project.--Not later than 6 
                months after the date of the submission of the final 
                report by the Comptroller General of the United States 
                on the demonstration project under paragraph (1)(C), 
                the administering Secretaries shall submit to Congress 
                a report containing their recommendation as to--
                            ``(i) whether there is a cost to the health 
                        care program under this title in conducting the 
                        demonstration project;
                            ``(ii) whether to extend the demonstration 
                        project or make the project permanent; and
                            ``(iii) whether the terms and conditions of 
                        the project should otherwise be continued (or 
                        modified) with respect to medicare-eligible 
                        veterans.
                    ``(B) Program.--Not later than 6 months after the 
                date of the submission of the report by the Comptroller 
                General of the United States on the third year of the 
                operation of the program, the administering Secretaries 
                shall submit to Congress a report containing their 
                recommendation as to--
                            ``(i) whether there is a cost to the health 
                        care program under this title in conducting the 
                        program under this section;
                            ``(ii) whether to discontinue the program 
                        with respect to category A medicare-eligible 
                        veterans; and
                            ``(iii) whether the terms and conditions of 
                        the program should otherwise be continued (or 
                        modified) with respect to medicare-eligible 
                        veterans.
    ``(j) Application of Medigap Protections to Demonstration Project 
Enrollees.--(1) Subject to paragraph (2), the provisions of section 
1882(s)(3) (other than clauses (i) through (iv) of subparagraph (B)) 
and 1882(s)(4) shall apply to enrollment (and termination of 
enrollment) in the demonstration project, in the same manner as they 
apply to enrollment (and termination of enrollment) with a 
Medicare+Choice organization in a Medicare+Choice plan.
    ``(2) In applying paragraph (1)--
            ``(A) any reference in clause (v) or (vi) of section 
        1882(s)(3)(B) to 12 months is deemed a reference to 36 months; 
        and
            ``(B) the notification required under section 1882(s)(3)(D) 
        shall be provided in a manner specified by the Secretary of 
        Veterans Affairs.''.
    (b) Repeal of Plan Requirement.--Subsection (b) of section 4015 of 
the Balanced Budget Act of 1997 (relating to an implementation plan for 
Veterans subvention) is repealed.
    (c) Report to Congress on a Method to Include the Costs of Veterans 
Affairs and Military Facility Services to Medicare-eligible 
Beneficiaries in the Calculation of Medicare+Choice Payment Rates.--The 
Secretary of Health and Human Services shall report to the Congress by 
not later than January 1, 2001, on a method to phase-in the costs of 
military facility services furnished by the Department of Veterans 
Affairs or the Department of Defense to medicare-eligible beneficiaries 
in the calculation of an area's Medicare+Choice capitation payment. 
Such report shall include on a county-by- county basis--
            (1) the actual or estimated cost of such services to 
        medicare-eligible beneficiaries;
            (2) the change in Medicare+Choice capitation payment rates 
        if such costs are included in the calculation of payment rates;
            (3) one or more proposals for the implementation of payment 
        adjustments to Medicare+Choice plans in counties where the 
        payment rate has been affected due to the failure to calculate 
        the cost of such services to medicare-eligible beneficiaries; 
        and
            (4) a system to ensure that when a Medicare+Choice enrollee 
        receives covered services through a facility of the Department 
        of Veterans Affairs or the Department of Defense there is an 
        appropriate payment recovery to the medicare program.

  TITLE III--AUTHORIZATION OF ADDITIONAL EXCEPTIONS TO IMPOSITION OF 
                   PENALTIES FOR CERTAIN INDUCEMENTS

SEC. 301. AUTHORIZATION OF ADDITIONAL EXCEPTIONS TO IMPOSITION OF 
              PENALTIES FOR PROVIDING INDUCEMENTS TO BENEFICIARIES.

    (a) In General.--Subparagraph (B) of section 1128A(i)(6) of the 
Social Security Act (42 U.S.C. 1320a-7a(i)(6)) is amended to read as 
follows:
                    ``(B) any permissible practice described in any 
                subparagraph of section 1128B(b)(3) or in regulations 
                issued by the Secretary;''.
    (b) Extension of Advisory Opinion Authority.--Section 
1128D(b)(2)(A) of such Act (42 U.S.C. 1320a-7d(b)(2)(A)) is amended by 
inserting ``or section 1128A(i)(6)'' after ``1128B(b)''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.
    (d) Interim Final Rulemaking Authority.--The Secretary of Health 
and Human Services may promulgate regulations that take effect on an 
interim basis, after notice and pending opportunity for public comment, 
in order to implement the amendments made by this section in a timely 
manner.

  TITLE IV--EXPANSION OF MEMBERSHIP OF THE MEDICARE PAYMENT ADVISORY 
                               COMMISSION

SEC. 401. EXPANSION OF MEMBERSHIP OF MEDPAC TO 17.

    (a) In General.--Section 1805(c)(1) of the Social Security Act (42 
U.S.C. 1395b-6(c)(1)), as added by section 4022 of the Balanced Budget 
Act of 1997, is amended by striking ``15'' and inserting ``17''.
    (b) Initial Terms of Additional Members.--
            (1) In general.--For purposes of staggering the initial 
        terms of members of the Medicare Payment Advisory Commission 
        (under section 1805(c)(3) of such Act (42 U.S.C. 1395b-
        6(c)(3)), the initial terms of the two additional members of 
        the Commission provided for by the amendment under subsection 
        (a) are as follows:
                    (A) One member shall be appointed for one year.
                    (B) One member shall be appointed for two years.
            (2) Commencement of terms.--Such terms shall begin on May 
        1, 1999.

                        TITLE V--REVENUE OFFSET

SEC. 501. REVENUE OFFSET.

    (a) In General.--Subparagraph (B) of section 408A(c)(3) of the 
Internal Revenue Code of 1986 is amended by striking ``relates'' and 
all that follows and inserting ``relates, the taxpayer's adjusted gross 
income exceeds $145,000 ($290,000 in the case of a joint return).''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to distributions after December 31, 1998.

            Passed the House of Representatives October 10, 1998.

            Attest:

                                                                 Clerk.