[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5291 Introduced in House (IH)]







106th CONGRESS
  2d Session
                                H. R. 5291

To amend titles XVIII, XIX, and XXI of the Social Security Act to make 
 additional corrections and refinements in the Medicare, Medicaid, and 
State children's health insurance programs, as revised by the Balanced 
                          Budget Act of 1997.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 26, 2000

Mr. Bliley (for himself, Mr. Dingell, Mr. Bilirakis, Mr. Brown of Ohio, 
    Mr. Tauzin, Mr. Oxley, Mr. Upton, Mr. Stearns, Mr. Gillmor, Mr. 
  Greenwood, Mr. Burr of North Carolina, Mr. Norwood, Mr. Rogan, Mr. 
    Shimkus, Mrs. Wilson, Mr. Pickering, Mr. Bryant, Mr. Blunt, Mr. 
Ehrlich, Ms. McCarthy of Missouri, Mr. Luther, Mr. Allen, Mr. Weygand, 
Mr. Waxman, Mr. Markey, Mr. Hall of Texas, Mr. Boucher, Mr. Towns, Mr. 
 Pallone, Mr. Gordon, Ms. Eshoo, Mr. Klink, Mr. Stupak, Mr. Engel, Mr. 
    Wynn, Mr. Barrett of Wisconsin, and Mr. Hoeffel) 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 titles XVIII, XIX, and XXI of the Social Security Act to make 
 additional corrections and refinements in the Medicare, Medicaid, and 
State children's health insurance programs, as revised by the Balanced 
                          Budget Act of 1997.

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

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

    (a) Short Title.--This Act may be cited as the ``Beneficiary 
Improvement and Protection Act of 2000''.
    (b) Amendments to Social Security Act.--Except as otherwise 
specifically provided, whenever in this Act an amendment is expressed 
in terms of an amendment to or repeal of a section or other provision, 
the reference shall be considered to be made to that section or other 
provision of the Social Security Act.
    (c) References to Other Acts.--In this Act:
            (1) Balanced budget act of 1997.--The term ``BBA'' means 
        the Balanced Budget Act of 1997 (Public Law 105-33).
            (2) Medicare, medicaid, and schip balanced budget 
        refinement act of 1999.--The term ``BBRA'' means the Medicare, 
        Medicaid, and SCHIP Balanced Budget Refinement Act of 1999, as 
        enacted into law by section 1000(a)(6) of Public Law 106-113 
        (Appendix F).
    (d) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; amendments to Social Security Act; references to 
                            other Acts; table of contents.
                   TITLE I--BENEFICIARY IMPROVEMENTS

Sec. 101. Improving availability of QMB/SLMB application forms.
Sec. 102. Study on limitation on State payment for medicare cost-
                            sharing affecting access to services for 
                            qualified medicare beneficiaries.
Sec. 103. Election of periodic colonoscopy.
Sec. 104. Waiver of 24-month waiting period for medicare coverage of 
                            individuals disabled with amyotrophic 
                            lateral sclerosis (ALS).
Sec. 105. Elimination of time limitation on medicare benefits for 
                            immunosuppressive drugs.
Sec. 106. Preservation of coverage of drugs and biologicals under part 
                            B of the medicare program.
Sec. 107. Demonstration of medicare coverage of medical nutrition 
                            therapy services.
               TITLE II--OTHER MEDICARE PART B PROVISIONS

                    Subtitle A--Access to Technology

Sec. 201. Annual reports on national coverage determinations.
Sec. 202. National limitation amount equal to 100 percent of national 
                            median for new clinical laboratory test 
                            technologies; fee schedule for new clinical 
                            laboratory tests.
Sec. 203. Clarifying process and standards for determining eligibility 
                            of devices for pass-through payments under 
                            hospital outpatient PPS.
Sec. 204. Access to new technologies applied to screening mammography 
                            to enhance breast cancer detection.
         Subtitle B--Provisions Relating to Physicians Services

Sec. 211. GAO study of gastrointestinal endoscopic services furnished 
                            in physicians offices and hospital 
                            outpatient department services.
Sec. 212. Treatment of certain physician pathology services.
Sec. 213. Physician group practice demonstration.
Sec. 214. Designation of separate category for interventional pain 
                            management physicians.
Sec. 215. Evaluation of enrollment procedures for medical groups that 
                            retain independent contractor physicians.
                       Subtitle C--Other Services

Sec. 221. 3-year moratorium on SNF part B consolidated billing 
                            requirements.
Sec. 222. Ambulatory surgical centers.
Sec. 223. 1-year extension of moratorium on therapy caps.
Sec. 224. Revision of medicare reimbursement for telehealth services.
Sec. 225. Payment for ambulance services.
Sec. 226. Contrast enhanced diagnostic procedures under hospital 
                            prospective payment system.
Sec. 227. 10-year phased-in increase from 55 percent to 80 percent in 
                            the proportion of hospital bad debt 
                            recognized.
Sec. 228. State accreditation of diabetes self-management training 
                            programs.
Sec. 229. Update in renal dialysis composite rate.
              TITLE III--MEDICARE PART A AND B PROVISIONS

Sec. 301. Home health services.
Sec. 302. Advisory opinions.
Sec. 303. Hospital geographic reclassification for labor costs for 
                            other PPS systems.
Sec. 304. Reclassification of a metropolitan statistical area for 
                            purposes of reimbursement under the 
                            medicare program.
Sec. 305. Making the medicare dependent, small rural hospital program 
                            permanent.
Sec. 306. Option to base eligibility on discharges during any of the 3 
                            most recent audited cost reporting periods.
Sec. 307. Identification and reduction of medical errors by peer review 
                            organizations.
Sec. 308. GAO report on impact of the Emergency Medical Treatment and 
                            Active Labor Act (EMTALA) on hospital 
                            emergency departments.
    TITLE IV--MEDICARE+CHOICE PROGRAM STABILIZATION AND IMPROVEMENTS

                      Subtitle A--Payment Reforms

Sec. 401. Increasing minimum payment amount.
Sec. 402. 3 percent minimum percentage update in 2001.
Sec. 403. 10-year phase in of risk adjustment based on data from all 
                            settings.
Sec. 404. Transition to revised Medicare+Choice payment rates.
                   Subtitle B--Administrative Reforms

Sec. 411. Effectiveness of elections and changes of elections.
Sec. 412. Medicare+Choice program compatibility with employer or union 
                            group health plans.
Sec. 413. Uniform premium and benefits.
                           TITLE V--MEDICAID

Sec. 501. DSH payments.
Sec. 502. New prospective payment system for Federally-qualified health 
                            centers and rural health clinics.
Sec. 503. Optional coverage of legal immigrants under the medicaid 
                            program.
Sec. 504. Additional entities qualified to determine medicaid 
                            presumptive eligibility for low-income 
                            children.
Sec. 505. Improving welfare-to-work transition.
Sec. 506. Medicaid county-organized health systems.
Sec. 507. Medicaid recognition for services of physician assistants.
          TITLE VI--STATE CHILDREN'S HEALTH INSURANCE PROGRAM

Sec. 601. Special rule for availability and redistribution of unused 
                            fiscal year 1998 and 1999 SCHIP allotments.
Sec. 602. Optional coverage of certain legal immigrants under SCHIP.
        TITLE VII--EXTENSION OF SPECIAL DIABETES GRANT PROGRAMS

Sec. 701. Extension of juvenile and Indian diabetes grant programs.

                   TITLE I--BENEFICIARY IMPROVEMENTS

SEC. 101. IMPROVING AVAILABILITY OF QMB/SLMB APPLICATION FORMS.

    (a) Through Local Social Security Offices.--
            (1) In general.--Section 1804 (42 U.S.C. 1395b-2) is 
        amended by adding at the end the following new subsection:
    ``(d) Availability of Application Forms for Medical Assistance for 
Medicare Cost-Sharing.--The Secretary shall make available to the 
Administrator of the Social Security Administration appropriate forms 
for applying for medical assistance for medicare cost-sharing under a 
State plan under title XIX. Such Administrator, through local offices 
of the Social Security Administration shall--
            ``(1) notify applicants and beneficiaries who present at a 
        local office orally of the availability of such forms and make 
        such forms available to such individuals upon request; and
            ``(2) provide assistance to such individuals in completing 
        such forms and, upon request, in submitting such forms to the 
        appropriate State agency.''.
            (2) Conforming amendment.--Section 1902(a)(8) (42 U.S.C. 
        1396a(a)(8)) is amended by inserting before the semicolon at 
        the end the following: ``and provide application forms for 
        medical assistance for medicare cost-sharing under the plan to 
        the Secretary in order to make them available through Federal 
        offices under section 1804(d) within the State''.
    (b) Streamlining Application Process.--
            (1) Requirement.--Section 1902(a)(8) (42 U.S.C. 
        1396a(a)(8)) is amended by striking ``, and that'' and 
        inserting ``permit individuals to apply for and obtain medical 
        assistance for medicare cost-sharing using the simplified 
        uniform application form developed under section 1905(p)(5), 
        make available such forms to such individuals, permit such 
        individuals to apply for such assistance by mail (and, at the 
        State option, by telephone or other electronic means) and not 
        require them to apply in person, and provide that''.
            (2) Simplified application form.--Section 1905(p) (42 
        U.S.C. 1396d(p)) is amended by adding at the end the following 
        new paragraph:
    ``(5)(A) The Secretary shall develop a simplified application form 
for use by individuals (including both qualified medicare beneficiaries 
and specified low-income medicare beneficiaries) in applying for 
medical assistance for medicare cost-sharing under this title. Such 
form shall be easily readable by applicants and uniform nationally.
    ``(B) In developing such form, the Secretary shall consult with 
beneficiary groups and the States.
    ``(C) The Secretary shall make such application forms available--
            ``(i) to the Administrator of the Social Security 
        Administration for distribution through local social security 
        offices;
            ``(ii) at such other sites as the Secretary determines 
        appropriate; and
            ``(iii) to persons upon request.''.
    (c) Effective Dates.--
            (1) The amendments made by subsection (a) take effect on 
        January 1, 2004.
            (2) Effective date.--The amendments made by subsection (b) 
        take effect 1 year after the date of the enactment of this Act, 
        regardless of whether regulations have been promulgated to 
        carry out such amendments by such date. Secretary of Health and 
        Human Services shall develop the uniform application form under 
        the amendment made by subsection (b)(2) by not later than 9 
        months after the date of the enactment of this Act.

SEC. 102. STUDY ON LIMITATION ON STATE PAYMENT FOR MEDICARE COST-
              SHARING AFFECTING ACCESS TO SERVICES FOR QUALIFIED 
              MEDICARE BENEFICIARIES.

    (a) In General.--The Secretary of Health and Human Services shall 
conduct a study to determine if access to certain services (including 
mental health services) for qualified medicare beneficiaries has been 
affected by limitations on a State's payment for medicare cost-sharing 
for such beneficiaries under section 1902(n) of the Social Security Act 
(42 U.S.C. 1396a(n)). As part of such study, the Secretary shall 
analyze the effect of such payment limitation on providers who serve a 
disproportionate share of such beneficiaries.
    (b) Report.--Not later than 1 year after the date of the enactment 
of this Act the Secretary shall submit to Congress a report on the 
study under subsection (a). The report shall include recommendations 
regarding any changes that should be made to the State payment limits 
under section 1902(n) for qualified medicare beneficiaries to ensure 
appropriate access to services.

SEC. 103. ELECTION OF PERIODIC COLONOSCOPY.

    (a) Coverage.--Section 1861(pp)(1)(C) (42 U.S.C. 1395x(pp)(1)(C)) 
is amended by inserting ``and in the case of an individual making the 
election described in section 1834(d)(4)'' after ``high risk for 
colorectal cancer''.
    (b) Election.--Section 1834(d) (42 U.S.C. 1395m(d)) is amended--
            (1) in paragraph (2)(E)--
                    (A) by striking ``or'' at the end of clause (i);
                    (B) by striking the period at the end of clause 
                (ii) and inserting ``; or''; and
                    (C) by adding at the end the following new clause:
                            ``(iii) if the procedure is performed 
                        within 119 months after a screening colonoscopy 
                        under paragraph (4).'';
            (2) in paragraph (3)(A), by inserting ``and for individuals 
        making the election described in paragraph (4)'' after 
        ``1861(pp)(2))'';
            (3) in paragraph (3)(E), by adding at the end the 
        following: ``No payment may be made under this part for a 
        colorectal cancer screening test consisting of a screening 
        colonoscopy for individuals making the election described in 
        paragraph (4) if the procedure is performed within the 119 
        months after a previous screening colonoscopy or within 47 
        months after a screening flexible sigmoidoscopy.''; and
            (4) by adding at the end the following new paragraph:
            ``(4) Election of screening colonoscopy instead of 
        screening sigmoidoscopy.--An individual may elect, in a manner 
        specified by the Secretary, to receive a screening colonoscopy 
        instead of a screening sigmoidoscopy.''.
    (c) Effective Date.--The amendments made by this section take 
effect on January 1, 2001.

SEC. 104. WAIVER OF 24-MONTH WAITING PERIOD FOR MEDICARE COVERAGE OF 
              INDIVIDUALS DISABLED WITH AMYOTROPHIC LATERAL SCLEROSIS 
              (ALS).

    (a) In General.--Section 226 (42 U.S.C. 426) is amended--
            (1) by redesignating subsection (h) as subsection (j) and 
        by moving such subsection to the end of the section, and
            (2) by inserting after subsection (g) the following new 
        subsection:
    ``(h) For purposes of applying this section in the case of an 
individual medically determined to have amyotrophic lateral sclerosis 
(ALS), the following special rules apply:
            ``(1) Subsection (b) shall be applied as if there were no 
        requirement for any entitlement to benefits, or status, for a 
        period longer than 1 month.
            ``(2) The entitlement under such subsection shall begin 
        with the first month (rather than twenty-fifth month) of 
        entitlement or status.
            ``(3) Subsection (f) shall not be applied.''.
    (b) Conforming Amendment.--Section 1837 (42 U.S.C. 1395p) is 
amended by adding at the end the following new subsection:
    ``(j) In applying this section in the case of an individual who is 
entitled to benefits under part A pursuant to the operation of section 
226(h), the following special rules apply:
            ``(1) The initial enrollment period under subsection (d) 
        shall begin on the first day of the first month in which the 
        individual satisfies the requirement of section 1836(1).
            ``(2) In applying subsection (g)(1), the initial enrollment 
        period shall begin on the first day of the first month of 
        entitlement to disability insurance benefits referred to in 
        such subsection.''.
    (c) Effective Date.--The amendments made by this section apply to 
benefits for months beginning after the date of the enactment of this 
Act.

SEC. 105. ELIMINATION OF TIME LIMITATION ON MEDICARE BENEFITS FOR 
              IMMUNOSUPPRESSIVE DRUGS.

    (a) In General.--Section 1861(s)(2)(J) (42 U.S.C. 1395x(s)(2)(J)) 
is amended by striking ``, but only'' and all that follows up to the 
semicolon at the end.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to drugs furnished on or after the date of the enactment of this 
Act.

SEC. 106. PRESERVATION OF COVERAGE OF DRUGS AND BIOLOGICALS UNDER PART 
              B OF THE MEDICARE PROGRAM.

    (a) In General.--Section 1861(s)(2) (42 U.S.C. 1395x(s)(2)) is 
amended, in each of subparagraphs (A) and (B), by striking ``(including 
drugs and biologicals which cannot, as determined in accordance with 
regulations, be self-administered)'' and inserting ``(including drugs 
and biologicals which are not usually self-administered by the 
patient)''.
    (b) Effective Date.--The amendment made by subsection (a) applies 
to drugs and biologicals administered on or after October 1, 2000.

SEC. 107. DEMONSTRATION OF MEDICARE COVERAGE OF MEDICAL NUTRITION 
              THERAPY SERVICES.

    (a) In General.--The Secretary of Health and Human Services shall 
conduct a demonstration project (in this section referred to as the 
``project'') to examine the cost-effectiveness of providing medical 
nutrition therapy services under the medicare program and the financial 
impact of providing such services under the program.
    (b) Scope of Services.--
            (1) Time period and locations.--The project shall be 
        conducted--
                    (A) during a period of 5 fiscal years; and
                    (B) in the 5 States which have the highest 
                proportion of the population who are 65 years of age or 
                older.
            (2) Funding.--The total amount of the payments that may be 
        made under this section shall not exceed $60,000,000 for each 
        of the 5 fiscal years of the project. Funding for the project 
        shall be made from the Federal Supplementary Medical Insurance 
        Trust Fund established under section 1841 of the Social 
        Security Act (42 U.S.C. 1395t).
    (c) Coverage as Medicare Part B Services.--
            (1) In general.--Subject to the succeeding provisions of 
        this subsection, medical nutrition therapy services furnished 
        under the project shall be considered to be services covered 
        under part B of title XVIII of the Social Security Act.
            (2) Payment.--Payment for such services shall be made at a 
        rate of 80 percent of the lesser of the actual charge for the 
        services or 85 percent of the amount determined under the fee 
        schedule established under section 1848(b) of the Social 
        Security Act (42 U.S.C. 1395w-4(b)) for the same services if 
        furnished by a physician.
            (3) Application of limits on billing.--The provisions of 
        section 1842(b)(18) of the Social Security Act (42 U.S.C. 
        1395u(b)(18)) shall apply to a registered dietitian or 
        nutrition professional furnishing services under the project in 
        the same manner as they to a practitioner described in 
        subparagraph (C) of such section furnishing services under 
        title XVIII of such Act.
    (d) Reports.--The Secretary shall submit 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 interim reports on the 
project and a final report on the project within 6 months after the 
conclusion of the project. The final report shall include an evaluation 
of the impact of the use of medical nutrition therapy services on 
medicare beneficiaries and on the medicare program, including any 
impact on reducing costs under the program and improving the health of 
beneficiaries.
    (e) Definitions.--For purposes of this section:
            (1) Medical nutrition therapy services.--The term ``medical 
        nutrition therapy services'' means nutritional diagnostic, 
        therapy, and counseling services for the purpose of disease 
        management which are furnished by a registered dietitian or 
        nutrition professional (as defined in paragraph (2)) pursuant 
        to a referral by a physician (as defined in section 1861(r)(1) 
        of the Social Security Act, 42 U.S.C. 1395x(r)(1)).
            (2) Registered dietitian or nutrition professional.--
                    (A) In general.--Subject to subparagraph (B), the 
                term ``registered dietitian or nutrition professional'' 
                means an individual who--
                            (i) holds a baccalaureate or higher degree 
                        granted by a regionally accredited college or 
                        university in the United States (or an 
                        equivalent foreign degree) with completion of 
                        the academic requirements of a program in 
                        nutrition or dietetics, as accredited by an 
                        appropriate national accreditation organization 
                        recognized by the Secretary for this purpose;
                            (ii) has completed at least 900 hours of 
                        supervised dietetics practice under the 
                        supervision of a registered dietitian or 
                        nutrition professional; and
                            (iii)(I) is licensed or certified as a 
                        dietitian or nutrition professional by the 
                        State in which the services are performed, or
                            (II) in the case of an individual in a 
                        State which does not provide for such licensure 
                        or certification, meets such other criteria as 
                        the Secretary establishes.
                    (B) Exception.--Clauses (i) and (ii) of 
                subparagraph (A) shall not apply in the case of an 
                individual who as of the date of the enactment of this 
                Act is licensed or certified as a dietitian or 
                nutrition professional by the State in which medical 
                nutrition therapy services are performed.
            (3) Secretary.--The term ``Secretary'' means Secretary of 
        Health and Human Services.

               TITLE II--OTHER MEDICARE PART B PROVISIONS

                    Subtitle A--Access to Technology

SEC. 201. ANNUAL REPORTS ON NATIONAL COVERAGE DETERMINATIONS.

    (a) Annual Reports.--Not later than December 1 of each year, 
beginning in 2001, the Secretary of Health and Human Services shall 
submit to Congress a report that sets forth a detailed compilation of 
the actual time periods that were necessary to complete and fully 
implement any national coverage determinations that were made in the 
previous fiscal year for items, services, or medical devices not 
previously covered as a benefit under title XVIII of the Social 
Security Act (42 U.S.C. 1395 et seq.), including, with respect to each 
new item, service, or medical device, a statement of the time taken by 
the Secretary to make the necessary coverage, coding, and payment 
determinations, including the time taken to complete each significant 
step in the process of making such determinations.
    (b) Publication of Reports on the Internet.--The Secretary of 
Health and Human Services shall publish each report submitted under 
subsection (a) on the medicare Internet site of the Department of 
Health and Human Services.

SEC. 202. NATIONAL LIMITATION AMOUNT EQUAL TO 100 PERCENT OF NATIONAL 
              MEDIAN FOR NEW CLINICAL LABORATORY TEST TECHNOLOGIES; FEE 
              SCHEDULE FOR NEW CLINICAL LABORATORY TESTS.

    (a) In General.--Section 1833(h)(4)(B)(viii) (42 U.S.C. 
1395l(h)(4)(B)(viii)) is amended by inserting before the period the 
following: ``(or 100 percent of such median in the case of a clinical 
diagnostic laboratory test performed on or after January 1, 2001, that 
the Secretary determines is a new test for which no limitation amount 
has previously been established under this subparagraph)''.
    (b) Fee Schedule for New Clinical Lab Tests.--
            (1) Establishment of fee schedule for new tests.--Section 
        1833(h)(1) (42 U.S.C. 1395l(h)(1)) is amended--
                    (A) in subparagraph (B), by striking ``In'' and 
                inserting ``Except for tests described in subparagraph 
                (E), in''; and
                    (B) by inserting at the end the following new 
                subparagraph:
    ``(E) In the case of a clinical diagnostic laboratory test which is 
described by a new code in the Health Care Financing Administration 
Common Procedure Coding System (commonly referred to as `HCPCS'), for 
which the Secretary is not able to crosswalk with a similar test with 
an established schedule amount, the Secretary shall establish for 
purposes of subparagraph (A) a single fee schedule amount for all areas 
in the following manner:
            ``(i) By not later than December 1 of each year, beginning 
        with 2001, the Secretary shall cause to have published in the 
        Federal Register (which may include publication on an interim 
        final rule basis with a comment period) an interim fee schedule 
        amount for each such new test which shall apply for such new 
        tests furnished during the following year.
            ``(ii) The interim fee schedule amount for each such new 
        test shall be subject to a comment period of 60 days. The 
        Secretary shall review comments and data received and make 
        appropriate adjustments to the fee schedule for each test 
        applicable beginning with the following calendar year.
            ``(iii) For years beginning with 2002, the Secretary shall 
        also cause to have published in the Federal Register by not 
        later than December 1 of the year prior to its application, the 
        adjustments to the interim fee schedule amount described in 
        clause (ii) for each such new test for which an interim fee 
        schedule amount was established for a year, including 
        adjustments to such fee schedule amounts in response to 
        comments.''.
            (2) Conforming amendment to update provision.--Section 
        1833(h)(2)(A) (42 U.S.C. 1395l(h)(2)(A)) is amended by striking 
        ``July 1, 1984,'' and inserting the following: ``July 1, 1984. 
        The fee schedules established under the previous sentence and 
        paragraph (1)(E)(3) shall be''.

SEC. 203. CLARIFYING PROCESS AND STANDARDS FOR DETERMINING ELIGIBILITY 
              OF DEVICES FOR PASS-THROUGH PAYMENTS UNDER HOSPITAL 
              OUTPATIENT PPS.

    (a) In General.--Section 1833(t)(6) (42 U.S.C. 1395l(t)(6)) is 
amended--
            (1) by redesignating subparagraphs (C) and (D) as 
        subparagraphs (D) and (E), respectively; and
            (2) by striking subparagraph (B) and inserting the 
        following:
                    ``(B) Use of categories in determining eligibility 
                of a device for pass-through payments.--The Secretary 
                shall determine whether a medical device meets the 
                requirements of subparagraph (A)(iv) as follows:
                            ``(i) Establishment of categories.--The 
                        Secretary shall establish categories of medical 
                        devices based on type of medical device as 
                        follows:
                                    ``(I) In general.--The Secretary 
                                shall establish criteria that will be 
                                used for creation of categories through 
                                rulemaking (which may include use of an 
                                interim final rule with comment 
                                period). Such categories shall be 
                                established in a manner such that no 
                                medical device is described by more 
                                than one category. Such criteria shall 
                                include a test of whether the average 
                                cost of devices that would be included 
                                in a category, as estimated by the 
                                Secretary, is not insignificant as 
                                described in paragraph (A)(iv)(II).
                                    ``(II) Initial categories.--The 
                                categories to be applied as of the 
                                category-based pass-through 
                                implementation date specified pursuant 
                                to subclause (V) shall be established 
                                in a manner such that each medical 
                                device that meets the requirements of 
                                clause (ii) or (iv) of subparagraph (A) 
                                as of such date is included in a such a 
                                category. For purposes of the preceding 
                                sentence, whether a medical device 
                                meets the requirements of clause (ii) 
                                or (iv) of subparagraph (A) as of such 
                                date shall be determined without regard 
                                to clause (ii) of this subparagraph and 
                                on the basis of the program memoranda 
                                issued before such date identifying 
                                medical devices that meet such 
                                requirements.
                                    ``(III) Adding categories.--The 
                                Secretary shall promptly establish a 
                                new category of medical device under 
                                this clause for any medical device that 
                                meets the requirements of subparagraph 
                                (A)(iv) and for which none of the 
                                categories in effect or that were 
                                previously in effect (as described in 
                                subparagraph (C)(iii)) is appropriate. 
                                The Secretary shall only establish a 
                                new category for a medical device that 
                                is described by a category that was 
                                previously in effect if the Secretary 
                                determines, in accord with criteria 
                                established under subclause (I) of this 
                                clause, that the device represents a 
                                significant advance in medical 
                                technology that is expected to 
                                significantly improve the treatment of 
                                Medicare beneficiaries.
                                    (IV) Deleting categories.--The 
                                Secretary shall delete a category at 
                                the close of the period for which the 
                                category is in effect (as described in 
                                subparagraph (C)(iii)).
                                    ``(V) Category-based pass-through 
                                implementation date.--For purposes of 
                                this subparagraph and subparagraph (C), 
                                the `category-based pass-through 
                                implementation date' is a date 
                                specified by the Secretary as of which 
                                the categories established under this 
                                clause are first used for purposes of 
                                clause (ii)(I). Such date may not be 
                                later than July 1, 2000.
                            ``(ii) Requirements treated as met.--A 
                        medical device shall be treated as meeting the 
                        requirements of subparagraph (A)(iv) if--
                                    ``(I) the device is described by a 
                                category established under clause (i), 
                                and
                                    ``(II) an application under section 
                                515 of the Federal Food, Drug, and 
                                Cosmetic Act has been approved with 
                                respect to the device, or the device 
                                has been cleared for market under 
                                section 510(k) of such Act, or the 
                                device is exempt from the requirements 
                                of section 510(k) of such Act pursuant 
                                to subsection (l) or (m) of section 510 
                                of such Act or section 520(g) of such 
                                Act, without an additional requirement 
                                for application or prior approval.---
                    ``(C) Limited period of payment.--
                            ``(i) Drugs and biologicals.--The payment 
                        under this paragraph with respect to a drug or 
                        biological shall only apply during a period of 
                        at least 2 years, but not more than 3 years, 
                        that begins--
                                    ``(I) on the first date this 
                                subsection is implemented in the case 
                                of a drug or biological described in 
                                clause (i), (ii), or (iii) of 
                                subparagraph (A) and in the case of a 
                                drug or biological described in 
                                subparagraph (A)(iv) and for which 
                                payment under this part is made as an 
                                outpatient hospital service before such 
                                first date; or
                                    ``(II) in the case of a drug or 
                                biological described in subparagraph 
                                (A)(iv) not described in subclause (I), 
                                on the first date on which payment is 
                                made under this part for the drug or 
                                biological as an outpatient hospital 
                                service.
                            ``(ii) Medical devices.--Except as provided 
                        in clause (iv), payment shall be made under 
                        this paragraph with respect to a medical device 
                        only if such device--
                                    ``(I) is described by a category of 
                                medical devices established under 
                                subparagraph (B)(i); and
                                    ``(II) is provided as part of a 
                                service (or group of services) paid for 
                                under this subsection and provided 
                                during the period for which such 
                                category is in effect (as described in 
                                clause (iii)).
                            ``(iii) Period for which category is in 
                        effect.--For purposes of this subparagraph and 
                        subparagraph (B), a category of medical devices 
                        established under subparagraph (B)(i) shall be 
                        in effect for a period of at least 2 years, but 
                        not more than 3 years, that begins--
                                    ``(I) in the case of a category 
                                established under subparagraph 
                                (B)(i)(II), on the first date on which 
                                payment was made under this paragraph 
                                for any device described by such 
                                category (including payments made 
                                during the period before the category-
                                based pass-through implementation 
                                date); and
                                    ``(II) in the case of a category 
                                established under subparagraph 
                                (B)(i)(III), on the first date on which 
                                payment is made under this paragraph 
                                for any medical device that is 
                                described by such category.
                            ``(iv) Payments made before category-based 
                        pass-through implementation date.--
                                    ``(I) in the case of a medical 
                                device provided as part of a service 
                                (or group of services) paid for under 
                                this subsection and provided during the 
                                period beginning on the first date on 
                                which the system under this subsection 
                                is implemented and ending on (and 
                                including) the day before the category-
                                based pass-through implementation date 
                                specified pursuant to subparagraph 
                                (B)(i)(V), payment shall be made in 
                                accordance with the provisions of this 
                                paragraph as in effect on the day 
                                before the date of the enactment of 
                                this subparagraph; and
                                    ``(II) notwithstanding subclause 
                                (I), the Secretary shall make payments 
                                under this paragraph during the period 
                                beginning one month after the date of 
                                enactment of the Beneficiary 
                                Improvement and Protection Act of 2000 
                                and ending on the same ending date in 
                                subclause (I) with respect to any 
                                medical device that is not included in 
                                a program memorandum referred to in 
                                subparagraph (B)(i)(II) but that is 
                                substantially similar (other than with 
                                respect to the restriction in 
                                subparagraph (A)(iv)(I)) to devices 
                                that are so included and that the 
                                Secretary determines is likely to be 
                                described by a initial category 
                                established under such subparagraph.''.
    (b) Conforming Amendments.--Section 1833(t) is further amended--
            (1) in paragraph (6)(D) (as redesignated by subsection 
        (a)(1)), by striking ``subparagraph (D)(iii)'' in the matter 
        preceding clause (i) and inserting ``subparagraph (E)(iii)'';
            (2) in paragraph (12)(E), by striking ``paragraph (6)(B)'' 
        and inserting ``paragraph (6)(C)'';
            (3) in paragraph (11)(E), by striking ``additional payments 
        (consistent with paragraph (6)(B))'' and inserting ``additional 
        payments, the determination and deletion of initial and new 
        categories (consistent with subparagraphs (B) and (C) of 
        paragraph (6))''; and
            (4) in paragraph (6)(A), by striking ``the cost of the 
        device, drug, or biological'' and inserting ``the cost of the 
        drug or biological or the average cost of the category of 
        devices''.
    (c) Effective Date.--The amendments made by this section shall 
become effective on the date of the enactment of this Act.

SEC. 204. ACCESS TO NEW TECHNOLOGIES APPLIED TO SCREENING MAMMOGRAPHY 
              TO ENHANCE BREAST CANCER DETECTION.

    (a) $15 Initial Increase in Payment Limit.--Section 1834(c)(3) (42 
U.S.C. 1395m(c)(3)) is amended--
            (1) in subparagraph (A)--
                    (A) by striking ``subparagraph (B)'' and inserting 
                ``subparagraphs (B) and (D)''; and
                    (B) in clause (ii), by inserting ``(taking into 
                account, if applicable, subparagraph (D))'' after ``for 
                the preceding year''; and
            (2) by adding at the end the following new subparagraph:
                    ``(D) Increase in payment limit for new 
                technologies.--In the case of new technologies applied 
                to screening mammography performed beginning in 2001 
                and determined by the Secretary to enhance the 
                detection of breast cancer, the limit applied under 
                this paragraph for 2001 shall be increased by $15.''.
    (b) Change in Revision of Limit.--Subparagraph (B) of such section 
is amended--
            (1) by striking ``Reduction of'' and inserting ``Revisions 
        to'',
            (2) by inserting ``or new technologies described in 
        paragraph (1)(D)'' after ``1992'', and
            (3) by inserting ``increase or'' before ``reduce''.
    (c) Inclusion of New Technology.--Section 1861(jj) (42 U.S.C. 
1395x(jj)) is amended by inserting before the period at the end the 
following: ``, as well as new technology applied to such a procedure 
that the Secretary determines enhances the detection of breast 
cancer''.
    (d) Effective Date.--The amendments made by this section apply to 
mammography performed on or after January 1, 2001.

         Subtitle B--Provisions Relating to Physicians Services

SEC. 211. GAO STUDY OF GASTROINTESTINAL ENDOSCOPIC SERVICES FURNISHED 
              IN PHYSICIANS OFFICES AND HOSPITAL OUTPATIENT DEPARTMENT 
              SERVICES.

    (a) Study.--The Comptroller General of the United States shall 
conduct a study on the appropriateness of furnishing gastrointestinal 
endoscopic physicians services in physicians offices. In conducting 
this study, the Comptroller General shall--
            (1) review available scientific and clinical evidence about 
        the safety of performing procedures in physicians offices and 
        hospital outpatient departments;
            (2) assess whether resource-based practice expense relative 
        values established by the Secretary of Health and Human 
        Services under the Medicare physician fee schedule under 
        section 1848 of the Social Security Act (42 U.S.C. 1395w-4) for 
        gastrointestinal endoscopic services furnished in physicians 
        offices and hospital outpatient departments create an incentive 
        to furnish such services in physicians offices instead of 
        hospital outpatient departments; and
            (3) assess the implications for access to care for Medicare 
        beneficiaries if Medicare were not to cover gastrointestinal 
        endoscopic services in physicians offices. -
    (b) Report.--The Comptroller General shall submit a report to 
Congress on such study no later than July 1, 2002 and include such 
recommendations as the Comptroller General determines to be 
appropriate.

SEC. 212. TREATMENT OF CERTAIN PHYSICIAN PATHOLOGY SERVICES.

    (a) In General.--When an independent laboratory furnishes the 
technical component of a physician pathology service to a fee-for-
service medicare beneficiary who is a patient of a grandfathered 
hospital, the Secretary of Health and Human Services shall treat such 
component as a service for which payment shall be made to the 
laboratory under section 1848 of the Social Security Act (42 U.S.C. 
1395w-4) and not as an inpatient hospital service for which payment is 
made to the hospital under section 1886(d) of such Act (42 U.S.C. 
1395ww(d)) or as an outpatient hospital service for which payment is 
made to the hospital under section 1834(t) of such Act (42 U.S.C. 
1395l(t)).
    (b) Definitions.--For purposes of this section:
            (1) Grandfathered hospital.--The term ``grandfathered 
        hospital'' means a hospital that had an arrangement with an 
        independent laboratory that was in effect as of July 22, 1999, 
        under which a laboratory furnished the technical component of 
        physician pathology services to fee-for-service medicare 
        beneficiaries who were hospital patients and submitted claims 
        for payment for such component to a medicare carrier (and not 
        to the hospital).
            (2) Fee-for-service medicare beneficiary.--The term ``fee-
        for-service medicare beneficiary'' means an individual who--
                    (A) is entitled to benefits under part A, or 
                enrolled under part B, of title XVIII of the Social 
                Security Act (42 U.S.C. 1395c et seq.); and
                    (B) is not enrolled in (i) a Medicare+Choice plan 
                under part C of such title (42 U.S.C. 1395w-21 et 
                seq.), (ii) a plan offered by an eligible organization 
                under section 1876 of such Act (42 U.S.C. 1395mm), 
                (iii) a program of all-inclusive care for the elderly 
                (PACE) under section 1898 of such Act, or (iv) a social 
                health maintenance organization (SHMO) demonstration 
                project established under section 4018(b) of the 
                Omnibus Budget Reconciliation Act of 1987 (Public Law 
                100-203).
            (3) Medicare carrier.--The term ``medicare carrier'' means 
        an organization with a contract under section 1842 of such Act 
        (42 U.S.C. 1395u).
    (c) Effective Date.--Subsection (a) applies to services furnished 
during the 2-year period beginning on January 1, 2001.
    (d) GAO Report.--
            (1) Study.--The Comptroller General of the United States 
        shall--
                    (A) analyze the types of hospitals that are 
                grandfathered under subsection (a); and
                    (B) study the effects of subsection (a) on 
                hospitals, laboratories, and medicare beneficiaries 
                access to physician pathology services.
            (2) Report.--The Comptroller General shall submit a report 
        to Congress on such analysis and study no later than July 1, 
        2002. The report shall include recommendations about whether 
        the provisions of subsection (a) should apply after the 2-year 
        period under subsection (c) for grandfathered hospitals for 
        either (or both) inpatient and outpatient hospital services and 
        whether such subsection should be extended to apply to other 
        hospitals that have similar characteristics to grandfathered 
        hospitals.

SEC. 213. PHYSICIAN GROUP PRACTICE DEMONSTRATION.

    Title XVIII is amended by inserting after section 1866 the 
following new sections:

 ``demonstration of application of physician volume increases to group 
                               practices

    ``Sec. 1866A. (a) Demonstration Program Authorized.--
            ``(1) In general.--The Secretary shall conduct 
        demonstration projects to test and, if proven effective, expand 
        the use of incentives to health care groups participating in 
        the program under this title that--
                    ``(A) encourage coordination of the care furnished 
                to individuals under the programs under parts A and B 
                by institutional and other providers, practitioners, 
                and suppliers of health care items and services;
                    ``(B) encourage investment in administrative 
                structures and processes to ensure efficient service 
                delivery; and
                    ``(C) reward physicians for improving health 
                outcomes.
            ``(2) Administration by contract.--Except as otherwise 
        specifically provided, the Secretary may administer the program 
        under this section in accordance with section 1866B.
            ``(3) Definitions.--For purposes of this section, terms 
        have the following meanings:
                    ``(A) Physician.--Except as the Secretary may 
                otherwise provide, the term `physician' means any 
                individual who furnishes services which may be paid for 
                as physicians' services under this title .
                    ``(B) Health care group.--The term `health care 
                group' means a group of physicians (as defined in 
                subparagraph (A)) organized at least in part for the 
                purpose of providing physicians' services under this 
                title. As the Secretary finds appropriate, a health 
                care group may include a hospital and any other 
                individual or entity furnishing items or services for 
                which payment may be made under this title that is 
                affiliated with the health care group under an 
                arrangement structured so that such individual or 
                entity participates in a demonstration under this 
                section and will share in any bonus earned under 
                subsection (d).
    ``(b) Eligibility Criteria.--
            ``(1) In general.--The Secretary is authorized to establish 
        criteria for health care groups eligible to participate in a 
        demonstration under this section, including criteria relating 
        to numbers of health care professionals in, and of patients 
        served by, the group, scope of services provided, and quality 
        of care.
            ``(2) Payment method.--A health care group participating in 
        the demonstration under this section shall agree with respect 
        to services furnished to beneficiaries within the scope of the 
        demonstration (as determined under subsection (c))--
                    ``(A) to be paid on a fee-for-service basis; and
                    ``(B) that payment with respect to all such 
                services furnished by members of the health care group 
                to such beneficiaries shall (where determined 
                appropriate by the Secretary) be made to a single 
                entity.
            ``(3) Data reporting.--A health care group participating in 
        a demonstration under this section shall report to the 
        Secretary such data, at such times and in such format as the 
        Secretary require, for purposes of monitoring and evaluation of 
        the demonstration under this section.
    ``(c) Patients Within Scope of Demonstration.--
            ``(1) In general.--The Secretary shall specify, in 
        accordance with this subsection, the criteria for identifying 
        those patients of a health care group who shall be considered 
        within the scope of the demonstration under this section for 
        purposes of application of subsection (d) and for assessment of 
        the effectiveness of the group in achieving the objectives of 
        this section.
            ``(2) Other criteria.--The Secretary may establish 
        additional criteria for inclusion of beneficiaries within a 
        demonstration under this section, which may include frequency 
        of contact with physicians in the group or other factors or 
        criteria that the Secretary finds to be appropriate.
            ``(3) Notice requirements.--In the case of each beneficiary 
        determined to be within the scope of a demonstration under this 
        section with respect to a specific health care group, the 
        Secretary shall ensure that such beneficiary is notified of the 
        incentives, and of any waivers of coverage or payment rules, 
        applicable to such group under such demonstration.
    ``(d) Incentives.--
            ``(1) Performance target.--The Secretary shall establish 
        for each health care group participating in a demonstration 
        under this section--
                    ``(A) a base expenditure amount, equal to the 
                average total payments under parts A and B for patients 
                served by the health care group on a fee-for-service 
                basis in a base period determined by the Secretary; and
                    ``(B) an annual per capita expenditure target for 
                patients determined to be within the scope of the 
                demonstration, reflecting the base expenditure amount 
                adjusted for risk and expected growth rates.
            ``(2) Incentive bonus.--The Secretary shall pay to each 
        participating health care group (subject to paragraph (4)) a 
        bonus for each year under the demonstration equal to a portion 
        of the Medicare savings realized for such year relative to the 
        performance target.
            ``(3) Additional bonus for process and outcome 
        improvements.--At such time as the Secretary has established 
        appropriate criteria based on evidence the Secretary determines 
        to be sufficient, the Secretary shall also pay to a 
        participating health care group (subject to paragraph (4)) an 
        additional bonus for a year, equal to such portion as the 
        Secretary may designate of the saving to the program under this 
        title resulting from process improvements made by and patient 
        outcome improvements attributable to activities of the group.
            ``(4) Limitation.--The Secretary shall limit bonus payments 
        under this section as necessary to ensure that the aggregate 
        expenditures under this title (inclusive of bonus payments) 
        with respect to patients within the scope of the demonstration 
        do not exceed the amount which the Secretary estimates would be 
        expended if the demonstration projects under this section were 
        not implemented.

        ``provisions for administration of demonstration program

    ``Sec. 1866B. (a) General Administrative Authority.--
            ``(1) Beneficiary eligibility.--Except as otherwise 
        provided by the Secretary, an individual shall only be eligible 
        to receive benefits under the program under section 1866A (in 
        this section referred to as the `demonstration program') if 
        such individual--
                    ``(A) is enrolled in under the program under part B 
                and entitled to benefits under part A; and
                    ``(B) is not enrolled in a Medicare+Choice plan 
                under part C, an eligible organization under a contract 
                under section 1876 (or a similar organization operating 
                under a demonstration project authority), an 
                organization with an agreement under section 
                1833(a)(1)(A), or a PACE program under section 1894.
            ``(2) Secretary's discretion as to scope of program.--The 
        Secretary may limit the implementation of the demonstration 
        program to--
                    ``(A) a geographic area (or areas) that the 
                Secretary designates for purposes of the program, based 
                upon such criteria as the Secretary finds appropriate;
                    ``(B) a subgroup (or subgroups) of beneficiaries or 
                individuals and entities furnishing items or services 
                (otherwise eligible to participate in the program), 
                selected on the basis of the number of such 
                participants that the Secretary finds consistent with 
                the effective and efficient implementation of the 
                program;
                    ``(C) an element (or elements) of the program that 
                the Secretary determines to be suitable for 
                implementation; or
                    ``(D) any combination of any of the limits 
                described in subparagraphs (A) through (C).
            ``(3) Voluntary receipt of items and services.--Items and 
        services shall be furnished to an individual under the 
        demonstration program only at the individual's election.
            ``(4) Agreements.--The Secretary is authorized to enter 
        into agreements with individuals and entities to furnish health 
        care items and services to beneficiaries under the 
        demonstration program.
            ``(5) Program standards and criteria.--The Secretary shall 
        establish performance standards for the demonstration program 
        including, as applicable, standards for quality of health care 
        items and services, cost-effectiveness, beneficiary 
        satisfaction, and such other factors as the Secretary finds 
        appropriate. The eligibility of individuals or entities for the 
        initial award, continuation, and renewal of agreements to 
        provide health care items and services under the program shall 
        be conditioned, at a minimum, on performance that meets or 
        exceeds such standards.
            ``(6) Administrative review of decisions affecting 
        individuals and entities furnishing services.--An individual or 
        entity furnishing services under the demonstration program 
        shall be entitled to a review by the program administrator (or, 
        if the Secretary has not contracted with a program 
        administrator, by the Secretary) of a decision not to enter 
        into, or to terminate, or not to renew, an agreement with the 
        entity to provide health care items or services under the 
        program.
            ``(7) Secretary's review of marketing materials.--An 
        agreement with an individual or entity furnishing services 
        under the demonstration program shall require the individual or 
        entity to guarantee that it will not distribute materials 
        marketing items or services under the program without the 
        Secretary's prior review and approval;
            ``(8) Payment in full.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), an individual or entity receiving 
                payment from the Secretary under a contract or 
                agreement under the demonstration program shall agree 
                to accept such payment as payment in full, and such 
                payment shall be in lieu of any payments to which the 
                individual or entity would otherwise be entitled under 
                this title.
                    ``(B) Collection of deductibles and coinsurance.--
                Such individual or entity may collect any applicable 
                deductible or coinsurance amount from a beneficiary.
    ``(b) Contracts for Program Administration.--
            ``(1) In general.--The Secretary may administer the 
        demonstration program through a contract with a program 
        administrator in accordance with the provisions of this 
        subsection.
            ``(2) Scope of program administrator contracts.--The 
        Secretary may enter into such contracts for a limited 
        geographic area, or on a regional or national basis.
            ``(3) Eligible contractors.--The Secretary may contract for 
        the administration of the program with--
                    ``(A) an entity that, under a contract under 
                section 1816 or 1842, determines the amount of and 
                makes payments for health care items and services 
                furnished under this title; or
                    ``(B) any other entity with substantial experience 
                in managing the type of program concerned.
            ``(4) Contract award, duration, and renewal.--
                    ``(A)  In general.--A contract under this 
                subsection shall be for an initial term of up to three 
                years, renewable for additional terms of up to three 
                years.
                    ``(B) Noncompetitive award and renewal for entities 
                administering part a or part b payments.--The Secretary 
                may enter or renew a contract under this subsection 
                with an entity described in paragraph (3)(A) without 
                regard to the requirements of section 5 of title 41, 
                United States Code.
            ``(5) Applicability of federal acquisition regulation.--The 
        Federal Acquisition Regulation shall apply to program 
        administration contracts under this subsection.
            ``(6) Performance standards.--The Secretary shall establish 
        performance standards for the program administrator including, 
        as applicable, standards for the quality and cost-effectiveness 
        of the program administered, and such other factors as the 
        Secretary finds appropriate. The eligibility of entities for 
        the initial award, continuation, and renewal of program 
        administration contracts shall be conditioned, at a minimum, on 
        performance that meets or exceeds such standards.
            ``(7) Functions of program administrator.--A program 
        administrator shall perform any or all of the following 
        functions, as specified by the Secretary:
                    ``(A) Agreements with entities furnishing health 
                care items and services.--Determine the qualifications 
                of entities seeking to enter or renew agreements to 
                provide services under the program, and as appropriate 
                enter or renew (or refuse to enter or renew) such 
                agreements on behalf of the Secretary.
                    ``(B) Establishment of payment rates.--Negotiate or 
                otherwise establish, subject to the Secretary's 
                approval, payment rates for covered health care items 
                and services.
                    ``(C) Payment of claims or fees.--Administer 
                payments for health care items or services furnished 
                under the program.
                    ``(D) Payment of bonuses.--Using such guidelines as 
                the Secretary shall establish, and subject to the 
                approval of the Secretary, make bonus payments as 
                described in subsection (c)(2)(A)(ii) to entities 
                furnishing items or services for which payment may be 
                made under the program.
                    ``(E) Oversight.--Monitor the compliance of 
                individuals and entities with agreements under the 
                program with the conditions of participation.
                    ``(F) Administrative review.--Conduct reviews of 
                adverse determinations specified in subsection (a)(6).
                    ``(G) Review of marketing materials.--Conduct a 
                review of marketing materials proposed by an entity 
                furnishing services under the program.
                    ``(H) Additional functions.--Perform such other 
                functions as the Secretary may specify.
            ``(8) Limitation of liability.--The provisions of section 
        1157(b) shall apply with respect to activities of contractors 
        and their officers, employees, and agents under a contract 
        under this subsection.
            ``(9) Information sharing.--Notwithstanding section 1106 
        and section 552a of title 5, United States Code, the Secretary 
        is authorized to disclose to an entity with a program 
        administration contract under this subsection such information 
        (including medical information) on individuals receiving health 
        care items and services under the program as the entity may 
        require to carry out its responsibilities under the contract.
    ``(c) Rules Applicable to Both Program Agreements and Program 
Administration Contracts.--
            ``(1) Records, reports, and audits.--The Secretary is 
        authorized to require entities with agreements to provide 
        health care items or services under the demonstration program, 
        and entities with program administration contracts under 
        subsection (b), to maintain adequate records, to afford the 
        Secretary access to such records (including for audit 
        purposes), and to furnish such reports and other materials 
        (including audited financial statements and performance data) 
        as the Secretary may require for purposes of implementation, 
        oversight, and evaluation of the program and of individuals' 
        and entities' effectiveness in performance of such agreements 
        or contracts.
            ``(2) Bonuses.--Notwithstanding any other provision of law, 
        but subject to subparagraph (B)(ii), the Secretary may make 
        bonus payments under the program from the Federal Health 
        Insurance Trust Fund and the Federal Supplementary Medical 
        Insurance Trust Fund in amounts that do not exceed the amounts 
        authorized under the program in accordance with the following:
                    ``(A) Payments to program administrators.--The 
                Secretary may make bonus payments under the program to 
                program administrators.
                    ``(B) Payments to entities furnishing services.--
                            ``(i) In general.--Subject to clause (ii), 
                        the Secretary may make bonus payments to 
                        individuals or entities furnishing items or 
                        services for which payment may be made under 
                        the program, or may authorize the program 
                        administrator to make such bonus payments in 
                        accordance with such guidelines as the 
                        Secretary shall establish and subject to the 
                        Secretary's approval.
                            ``(ii) Limitations.--The Secretary may 
                        condition such payments on the achievement of 
                        such standards related to efficiency, 
                        improvement in processes or outcomes of care, 
                        or such other factors as the Secretary 
                        determines to be appropriate.
            ``(3) Antidiscrimination limitation.--The Secretary shall 
        not enter into an agreement with an entity to provide health 
        care items or services under the program, or with an entity to 
        administer the program, unless such entity guarantees that it 
        will not deny, limit, or condition the coverage or provision of 
        benefits under the program, for individuals eligible to be 
        enrolled under such program, based on any health status-related 
        factor described in section 2702(a)(1) of the Public Health 
        Service Act.
    ``(d) Limitations on Judicial Review.--The following actions and 
determinations with respect to the demonstration program shall not be 
subject to review by a judicial or administrative tribunal:
            ``(1) Limiting the implementation of the program under 
        subsection (a)(2).
            ``(2) Establishment of program participation standards 
        under subsection (a)(5) or the denial or termination of, or 
        refusal to renew, an agreement with an entity to provide health 
        care items and services under the program.
            ``(3) Establishment of program administration contract 
        performance standards under subsection (b)(6), the refusal to 
        renew a program administration contract, or the noncompetitive 
        award or renewal of a program administration contract under 
        subsection (b)(4)(B).
            ``(4) Establishment of payment rates, through negotiation 
        or otherwise, under a program agreement or a program 
        administration contract.
            ``(5) A determination with respect to the program (where 
        specifically authorized by the program authority or by 
        subsection (c)(2))--
                    ``(A) as to whether cost savings have been 
                achieved, and the amount of savings; or
                    ``(B) as to whether, to whom, and in what amounts 
                bonuses will be paid.
    ``(e) Application Limited to Parts A and B.--None of the provisions 
of this section or of the demonstration program shall apply to the 
programs under part C.
    ``(f) Reports to Congress.--Not later than two years after the date 
of enactment of this section, and biennially thereafter for six years, 
the Secretary shall report to the Congress on the use of authorities 
under the demonstration program. Each report shall address the impact 
of the use of those authorities on expenditures, access, and quality 
under the programs under this title.''.

SEC. 214. DESIGNATION OF SEPARATE CATEGORY FOR INTERVENTIONAL PAIN 
              MANAGEMENT PHYSICIANS.

    With respect to services furnished on or after January 1, 2002, the 
Secretary of Health and Human Services shall provide for the 
designation under section 1848(c)(3)(A) of the Social Security Act (42 
U.S.C. 1395w-4(c)(3)(A)) of interventional pain management physicians 
as a separate category of physician specialists.

SEC. 215. EVALUATION OF ENROLLMENT PROCEDURES FOR MEDICAL GROUPS THAT 
              RETAIN INDEPENDENT CONTRACTOR PHYSICIANS.

    (a) In General.--The Secretary of Health and Human Services shall 
conduct an evaluation of the current medicare enrollment process for 
medical groups that retain independent contractor physicians with 
particular emphasis on hospital-based physicians, such as emergency 
department staffing groups. In conducting the evaluation, the Secretary 
shall--
            (1) review the increase of individual medicare provider 
        numbers issued and the possible medicare program integrity 
        vulnerabilities of the current process;
            (2) assess how program integrity could be enhanced by the 
        enrollment of groups that retain independent contractor 
        hospital-based physicians; and
            (3) develop suggested procedures for the enrollment of 
        these groups.
    (b) Report.--Not later than 1 year after the date of the enactment 
of this Act, the Secretary shall submit to Congress a report on the 
evaluation conducted under subsection (a).

                       Subtitle C--Other Services

SEC. 221. 3-YEAR MORATORIUM ON SNF PART B CONSOLIDATED BILLING 
              REQUIREMENTS.

    (a) Moratorium in Application of Consolidated Billing to SNF 
Residents in Non-covered Stays.--Section 1842(b)(6)(E) (42 U.S.C. 
1395u(b)(6)(E)) is amended by inserting ``(on or after October 1, 
2003)'' after ``furnished to an individual''.
    (b) Moratorium in Provider Agreement Provision.--Section 
1866(a)(1)(H)(ii)(I) (42 U.S.C. 1395cc(a)(1)(H)(ii)(I) is amended by 
inserting ``in the case of a resident who is in a stay covered under 
part A, and for services furnished on or after October 1, 2003, in the 
case of a resident who is not in a stay covered under such part'' 
before the comma.
    (c) Moratorium in Requirement for SNF Billing of Part B Services.--
Section 1862(a)(18) (42 U.S.C. 1395y(a)(18)) is amended to read as 
follows:
            ``(18) which are covered skilled nursing facility services 
        described in section 1888(e)(2)(A)(i) and which are furnished 
        to an individual who is a resident--
                    ``(A) of a skilled nursing facility in the case of 
                a resident who is in a stay covered under part A; or
                    ``(B) of a skilled nursing facility or of a part of 
                a facility that includes a skilled nursing facility (as 
                determined under regulations) for services furnished on 
                or after October 1, 2003, in the case of a resident who 
                is not in a stay covered under such part,
        by an entity other than the skilled nursing facility, unless 
        the services are furnished under arrangements (as defined in 
        section 1861(w)(1)) with the entity made by the skilled nursing 
        facility;''.
    (d) Effective Date.--The amendments made by subsections (a), (b) 
and (c) are effective as if included in the enactment of BBA.
    (e) Report.--Not later than October 1, 2002, the Comptroller 
General of the United States shall submit to Congress a report that 
includes an analysis and recommendations on--
            (1) alternatives, if any, to consolidated billing for part 
        B items and services described in section 1842(b)(6) of the 
        Social Security Act (42 U.S.C. 1395u(b)(6)) to ensure 
        accountability by skilled nursing facilities and accuracy in 
        claims submitted for all services and items provided to skilled 
        nursing facility residents under part B of the medicare 
        program;
            (2) the costs expected to be incurred by skilled nursing 
        facilities under such alternative approaches, compared with the 
        costs associated with the implementation of consolidated 
        billing; and
            (3) the costs incurred by the medicare program in 
        implementing such alternative approaches and their effect on 
        utilization review, compared with the costs and effect on 
        utilization review expected with consolidated billing.

SEC. 222. AMBULATORY SURGICAL CENTERS.

    (a) Delay in Implementation of Prospective Payment System.--The 
Secretary of Health and Human Services may not implement a revised 
prospective payment system for services of ambulatory surgical 
facilities under section 1833(i) of the Social Security Act (42 U.S.C. 
1395l(i)) before January 1, 2002.
    (b) Extending Phase-In to 4 Years.--Section 226 of the BBRA is 
amended by striking paragraphs (1) and (2) and inserting the following:
            ``(1) in the first year of its implementation, only a 
        proportion (specified by the Secretary and not to exceed \1/4\) 
        of the payment for such services shall be made in accordance 
        with such system and the remainder shall be made in accordance 
        with current regulations; and
            ``(2) in each of the following 2 years a proportion 
        (specified by the Secretary and not to exceed \1/2\, and \3/4\, 
        respectively) of the payment for such services shall be made 
        under such system and the remainder shall be made in accordance 
        with current regulations.''.
    (c) Deadline for Use of 1999 or Later Cost Surveys.--Section 226(c) 
of BBRA is amended by adding at the end the following:
``By not later than January 1, 2003, the Secretary shall incorporate 
data from a 1999 Medicare cost survey or a subsequent cost survey for 
purposes of implementing or revising such system.''.

SEC. 223. 1-YEAR EXTENSION OF MORATORIUM ON THERAPY CAPS.

    (a) In General.--Section 1833(g)(4) (42 U.S.C. 1395l(g)), as added 
by section 221(a) of BBRA, is amended by striking ``and 2001'' and 
inserting ``, 2001, and 2002''.
    (b) Conforming Amendment To Continue Focused Medical Reviews of 
Claims During Moratorium Period.--Section 221(a)(2) of BBRA is amended 
by striking ``(under the amendment made by paragraph (1)(B))''.

SEC. 224. REVISION OF MEDICARE REIMBURSEMENT FOR TELEHEALTH SERVICES.

    Section 4206 of the Balanced Budget Act of 1997 (42 U.S.C. 1395l 
note) is amended to read as follows:
    ``(a) Telehealth Services Reimbursed.--
            ``(1) In general.--Not later than April 1, 2001, the 
        Secretary of Health and Human Services shall make payments from 
        the Federal Supplementary Medical Insurance Trust Fund in 
        accordance with the methodology described in subsection (b) for 
        services for which payment may be made under part B of title 
        XVIII of the Social Security Act (42 U.S.C. 1395j et seq.) that 
        are furnished via a telecommunications system by a physician or 
        practitioner to an eligible telehealth beneficiary.
            ``(2) Use of store-and-forward technologies.--For purposes 
        of paragraph (1), in the case of any Federal telemedicine 
        demonstration program in Alaska or Hawaii, the term 
        `telecommunications system' includes store-and-forward 
        technologies that provide for the asynchronous transmission of 
        health care information in single or multimedia formats.
    ``(b) Methodology for Determining Amount of Payments.--
            ``(1) In general.--The Secretary shall make payment under 
        this section as follows:
                    ``(A) Subject to subparagraph (B), with respect to 
                a physician or practitioner located at a distant site 
                that furnishes a service to an eligible medicare 
                beneficiary under subsection (a), an amount equal to 
                the amount that such physician or practitioner would 
                have been paid had the service been furnished without 
                the use of a telecommunications system.
                    ``(B) With respect to an originating site, a 
                facility fee equal to--
                            ``(i) for 2001 (beginning with April 1, 
                        2001) and 2002, $20; and
                            ``(ii) for a subsequent year, the facility 
                        fee under this subsection for the previous year 
                        increased by the percentage increase in the MEI 
                        (as defined in section 1842(i)(3)) for such 
                        subsequent year.
            ``(2) Application of part b coinsurance and deductible.--
        Any payment made under this section shall be subject to the 
        coinsurance and deductible requirements under subsections 
        (a)(1) and (b) of section 1833 of the Social Security Act (42 
        U.S.C. 1395l).
            ``(3) Application of nonparticipating physician payment 
        differential and balance billing limits.--The payment 
        differential of section 1848(a)(3) of such Act (42 U.S.C. 
        1395w-4(a)(3)) shall apply to services furnished by non-
        participating physicians. The provisions of section 1848(g) of 
        such Act (42 U.S.C. 1395w-4(g)) and section 1842(b)(18) of such 
        Act (42 U.S.C. 1395u(b)(18)) shall apply. Payment for such 
        service shall be increased annually by the update factor for 
        physicians' services determined under section 1848(d) of such 
        Act (42 U.S.C. 1395w-4(d)).
    ``(c) Telepresenter Not Required.--Nothing in this section shall be 
construed as requiring an eligible telehealth beneficiary to be 
presented by a physician or practitioner at the originating site for 
the furnishing of a service via a telecommunications system, unless it 
is medically necessary as determined by the physician or practitioner 
at the distant site.
    ``(d) Coverage of Additional Services.--
            ``(1) Study and report on additional services.--
                    ``(A) Study.--The Secretary of Health and Human 
                Services shall conduct a study to identify services in 
                addition to those described in subsection (a)(1) that 
                are appropriate for payment under this section.
                    ``(B) Report.--Not later than 2 years after the 
                date of enactment of this Act, the Secretary shall 
                submit to Congress a report on the study conducted 
                under subparagraph (A) together with such 
                recommendations for legislation that the Secretary 
                determines are appropriate.
            ``(2) In general.--The Secretary shall provide for payment 
        under this section for services identified in paragraph (1).
    ``(e) Construction Relating to Home Health Services.--
            ``(1) In general.--Nothing in this section or in section 
        1895 of the Social Security Act (42 U.S.C. 1395fff) shall be 
        construed as preventing a home health agency furnishing a home 
        health unit of service for which payment is made under the 
        prospective payment system established in such section for such 
        units of service from furnishing the service.
            ``(2) Limitation.--The Secretary shall not consider a home 
        health service provided in the manner described in paragraph 
        (1) to be a home health visit for purposes of--
                    ``(A) determining the amount of payment to be made 
                under such prospective payment system; or
                    ``(B) any requirement relating to the certification 
                of a physician required under section 1814(a)(2)(C) of 
                such Act (42 U.S.C. 1395f(a)(2)(C)).
    ``(f) Coverage of Items and Services.--
            ``(1) In general.--Subject to paragraph (2), payment for 
        items and services provided pursuant to subsection (a) shall 
        include payment for professional consultations, office visits, 
        office psychiatry services, including any service identified as 
        of July 1, 2000, by HCPCS codes 99241-99275, 99201-99215, 
        90804-90809, and 90862, and any additional item or service 
        specified by the Secretary.
            ``(2) Yearly update.--The Secretary shall provide a process 
        that provides, on at least an annual basis, for the review and 
        revision of services (and HCPCS codes) to those specified in 
        paragraph (1) for authorized payment under subsection (a).
    ``(g) Definitions.--In this section:
            ``(1) Eligible telehealth beneficiary.--The term `eligible 
        telehealth beneficiary' means an individual enrolled under part 
        B of title XVIII of the Social Security Act (42 U.S.C. 1395j et 
        seq.) that receives a service originating--
                    ``(A) in an area that is designated as a health 
                professional shortage area under section 332(a)(1)(A) 
                of the Public Health Service Act (42 U.S.C. 
                254e(a)(1)(A));
                    ``(B) in a county that is not included in a 
                Metropolitan Statistical Area;
                    ``(C) effective January 1, 2002, in an inner-city 
                area that is medically underserved (as defined in 
                section 330(b)(3) of the Public Health Service Act (42 
                U.S.C. 254b(b)(3))); or
                    ``(D) in a service which originated in a facility 
                which participates in a Federal telemedicine 
                demonstration project.
            ``(2) Physician.--The term `physician' has the meaning 
        given that term in section 1861(r) of the Social Security Act 
        (42 U.S.C. 1395x(r))
            ``(3) Practitioner.--The term `practitioner' means a 
        practitioner described in section 1842(b)(18)(C) of the Social 
        Security Act (42 U.S.C. 1395u(b)(18)(C)).
            ``(4) Distant site.--The term `distant site' means the site 
        at which the physician or practitioner is located at the time 
        the service is provided via a telecommunications system.
            ``(5) Originating site.--
                    ``(A) In general.--The term `originating site' 
                means any site described in subparagraph (B) at which 
                the eligible telehealth beneficiary is located at the 
                time the service is furnished via a telecommunications 
                system.
                    ``(B) Sites described.--The sites described in this 
                subparagraph are as follows:
                            ``(i) On or after April 1, 2001--
                                    ``(I) the office of a physician or 
                                a practitioner,
                                    ``(II) a critical access hospital 
                                (as defined in section 1861(mm)(1) of 
                                the Social Security Act (42 U.S.C. 
                                1395x(mm)(1))),
                                    ``(III) a rural health clinic (as 
                                defined in section 1861(aa)(2) of such 
                                Act (42 U.S.C. 1395x(aa)(2))), and
                                    ``(IV) a Federally qualified health 
                                center (as defined in section 
                                1861(aa)(4) of such Act (42 U.S.C. 
                                1395x(aa)(4))).
                            ``(ii) On or after January 1, 2002--
                                    ``(I) a hospital (as defined in 
                                section 1861(e) of such Act (42 U.S.C. 
                                1395x(e))),
                                    ``(II) a skilled nursing facility 
                                (as defined in section 1861(j) of such 
                                Act (42 U.S.C. 1395x(j))),
                                    ``(III) a comprehensive outpatient 
                                rehabilitation facility (as defined in 
                                section 1861(cc)(2) of such Act (42 
                                U.S.C. 1395x(cc)(2))),
                                    ``(IV) a renal dialysis facility 
                                (described in section 1881(b)(1) of 
                                such Act (42 U.S.C. 1395rr(b)(1))),
                                    ``(V) an ambulatory surgical center 
                                (described in section 1833(i)(1)(A) of 
                                such Act (42 U.S.C. 1395l(i)(1)(A))),
                                    ``(VI) a hospital or skilled 
                                nursing facility of the Indian Health 
                                Service (under section 1880 of such Act 
                                (42 U.S.C. 1395qq)), and
                                    ``(VII) a community mental health 
                                center (as defined in section 
                                1861(ff)(3)(B) of such Act (42 U.S.C. 
                                1395x(ff)(3)(B))).
            ``(6) Federal supplementary medical insurance trust fund.--
        The term `Federal Supplementary Medical Insurance Trust Fund' 
        means the trust fund established under section 1841 of the 
        Social Security Act (42 U.S.C. 1395t).''.

SEC. 225. PAYMENT FOR AMBULANCE SERVICES.

    (a) Eliminating BBA Reduction.--Section 1834(l)(3) (42 U.S.C. 
1395m(l)(3)) is amended, in subparagraphs (A) and (B), by striking `` 
reduced in the case of 2001 and 2002 by 1.0 percentage points'' both 
places it appears.
    (b) Mileage Payments.--Section 1834(l)(2)(E) (42 U.S.C. 
1395m(l)(2)(E)) is amended by inserting before the period at the end 
the following: ``, except that such phase-in shall provide for full 
payment of any national mileage rate beginning with the effective date 
of the fee schedule for ambulance services provided by suppliers in any 
State where payment for such services did not include a separate amount 
for all mileage prior to the implementation of the fee schedule''.
    (c) GAO Study on Costs of Ambulance Services.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct a study of the costs of providing ambulance 
        services covered under the medicare program under title XVIII 
        of the Social Security Act across the range of service levels 
        for which such services are provided.
            (2) Report.--Not later than 18 months after the date of the 
        enactment of this Act, the Comptroller General shall submit a 
        report to the Secretary of Health and Human Services and 
        Congress on the study conducted under paragraph (1). Such 
        report shall include recommendations for any changes in 
        methodology or payment levels necessary to fairly compensate 
        suppliers of ambulance services and to ensure the access of 
        medicare beneficiaries to such services under the medicare 
        program.

SEC. 226. CONTRAST ENHANCED DIAGNOSTIC PROCEDURES UNDER HOSPITAL 
              PROSPECTIVE PAYMENT SYSTEM.

    (a) Separate Classification.--Section 1833(t)(2) (42 U.S.C. 
1395l(t)(2)) is amended--
            (1) by striking ``and'' at the end of subparagraph (E);
            (2) by striking the period at the end of subparagraph (F) 
        and inserting ``; and''; and
            (3) by inserting after subparagraph (F) the following new 
        subparagraph:
                    ``(G) the Secretary shall create additional groups 
                of covered OPD services that classify separately those 
                procedures that utilize contrast media from those that 
                do not.''.
    (b) Conforming Amendment.--Section 1861(t)(1) (42 U.S.C. 
1395x(t)(1)) is amended by inserting ``(including contrast agents)'' 
after ``only such drugs''.
    (c) Effective Date.--The amendments made by this section shall be 
effective as if included in the enactment of BBA.

SEC. 227. 10-YEAR PHASED IN INCREASE FROM 55 PERCENT TO 80 PERCENT IN 
              THE PROPORTION OF HOSPITAL BAD DEBT RECOGNIZED.

    Section 1861(v)(1)(T) (42 U.S.C. 1395x(v)(1)(T)) is amended--
            (1) by striking ``and'' at the end of clause (ii);
            (2) in clause (iii) by striking ``a subsequent fiscal 
        year'' and inserting ``fiscal year 2000'' and by striking the 
        period at the end and inserting a semicolon; and
            (3) by adding at the end the following new clauses:
            ``(iv) for cost reporting periods beginning during fiscal 
        year 2001 and each subsequent fiscal year (before fiscal year 
        2011), by the percent specified in clause (iii) or this clause 
        for the preceding fiscal year reduced by 2.5 percentage points, 
        of such amount otherwise allowable; and
            ``(v) for cost reporting periods beginning during fiscal 
        year 2011 or a subsequent fiscal year, by 20 percent of such 
        amount otherwise allowable.''.

SEC. 228. STATE ACCREDITATION OF DIABETES SELF-MANAGEMENT TRAINING 
              PROGRAMS.

    Section 1861(qq)(2) (42 U.S.C. 1395x(qq)(2)) is amended--
            (1) in the matter preceding subparagraph (A) by striking 
        ``paragraph (1)--'' and inserting ``paragraph (1):'';
            (2) in subparagraph (A)--
                    (A) by striking ``a `certified provider''' and 
                inserting ``A `certified provider'''; and
                    (B) by striking ``; and'' and inserting a period; 
                and
            (3) in subparagraph (B)--
                    (A) by striking ``a physician, or such other 
                individual'' and inserting ``(i) A physician, or such 
                other individual'';
                    (B) by inserting ``(I)'' before ``meets applicable 
                standards'';
                    (C) by inserting ``(II)'' before ``is recognized'';
                    (D) by inserting ``, or by a program described in 
                clause (ii),'' after ``recognized by an organization 
                that represents individuals (including individuals 
                under this title) with diabetes''; and
                    (E) by adding at the end the following:
            ``(ii) Notwithstanding any reference to `a national 
        accreditation body' in section 1865(b), for purposes of clause 
        (i), a program described in this clause is a program operated 
        by a State for the purposes of accrediting diabetes self-
        management training programs, if the Secretary determines that 
        such State program has established quality standards that meet 
        or exceed the standards established by the Secretary under 
        clause (i) or the standards originally established by the 
        National Diabetes Advisory Board and subsequently revised as 
        described in clause (i).''.

SEC. 229. UPDATE IN RENAL DIALYSIS COMPOSITE RATE.

    (a) In General.--The last sentence of section 1881(b)(7) (42 U.S.C. 
1395rr(b)(7)) is amended by striking ``2001, by 1.2 percent'' and 
inserting ``2001, by 2.4 percent''.
    (b) Report on Literature Review.--The Secretary of Health and Human 
Services shall conduct a literature review of studies on the impact of 
oral self-administered prescription non-calcium phosphate binding drugs 
in reducing the incidence of hospitalization under the medicare program 
for medicare beneficiaries with end stage renal disease. Not later than 
6 months after the date of the enactment of this Act, the Secretary 
shall transmit to the Committees on Commerce and Ways and Means of the 
House of Representatives and the Committee on Finance of the Senate a 
summary of the literature review conducted under this subsection.

              TITLE III--MEDICARE PART A AND B PROVISIONS

SEC. 301. HOME HEALTH SERVICES.

    (a) 1-Year Delay in 15 Percent Reduction in Payment Rates Under the 
Medicare Prospective Payment System for Home Health Services.--Section 
1895(b)(3)(A)(i) (42 U.S.C. 1395fff(b)(3)(A)(i)) is amended--
            (1) by redesignating subparagraph (II) as subparagraph 
        (III);
            (2) in subparagraph (III), as redesignated, by striking 
        ``described in subclause (I)'' and inserting ``described in 
        subclause (II)''; and
            (3) by inserting after subclause (I) the following new 
        subclause:
                                    ``(II) For the 12-month period 
                                beginning after the period described in 
                                subclause (I), such amount (or amounts) 
                                shall be equal to the amount (or 
                                amounts) determined under subclause 
                                (I), updated under subparagraph (B).''.
    (b) Treatment of Branch Offices.--
            (1) In general.--Notwithstanding any other provision of 
        law, in determining for purposes of title XVIII of the Social 
        Security Act whether an office of a home health agency 
        constitutes a branch office or a separate home health agency, 
        neither the time nor distance between a parent office of the 
        home health agency and a branch office shall be the sole 
        determinant of a home health agency's branch office status.
            (2) Consideration of forms of technology in definition of 
        supervision.--The Secretary of Health and Human Services shall 
        include forms of technology in determining what constitutes 
        ``supervision'' for purposes of determining a home heath 
        agency's branch office status under paragraph (1).
    (c) Clarification of the Definition of Homebound.--
            (1) In general.--The last sentence of sections 1814(a) and 
        1835(a) (42 U.S.C. 1395f(a); 1395n(a)) are each amended by 
        striking the period and inserting ``including participating in 
        an adult day care program licensed by a State to furnish adult 
        day care services in the State for the purposes of therapeutic 
        treatment for Alzheimer's disease or a related dementia, or for 
        medical treatment furnished in an adult day care program.''.
            (2) Effective date.--The amendments made by paragraph (1) 
        apply to items and services provided on or after October 1, 
        2001.
    (d) 1-Year Delay in Report.--Section 302(c) of the the Medicare, 
Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 (113 Stat. 
1501A-360), as enacted into law by section 1000(a)(6) of Public Law 
106-113, is amended by striking ``six months'' and inserting ``18 
months''.

SEC. 302. ADVISORY OPINIONS.

    (a) Making Permanent Existing Advisory Opinion Authority.--Section 
1128D(b)(6) (42 U.S.C. 1320a-7d(b)(6)) is amended by striking ``and 
before the date which is 4 years after such date of enactment''.
    (b) Nondisclosure of Requests and Supporting Materials.--
            (1) In general.--Section 1128D(b) (42 U.S.C. 1320a-7d(b)) 
        is amended by adding at the end the following new paragraph:
            ``(7) Nondisclosure of requests and supporting materials.--
        A request for an advisory opinion under this subsection and any 
        supporting written materials submitted by the party requesting 
        the opinion shall not be subject to disclosure under section 
        552 of title 5, United States Code.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        applies to requests made before, on, or after the date of the 
        enactment of this Act.

SEC. 303. HOSPITAL GEOGRAPHIC RECLASSIFICATION FOR LABOR COSTS FOR 
              OTHER PPS SYSTEMS.

    (a) Hospital Geographic Reclassification for Labor Costs Applicable 
to Other PPS Systems.--
            (1) In general.--Notwithstanding the geographic adjustment 
        factor otherwise established under title XVIII of the Social 
        Security Act for items and services paid under a prospective 
        payment system described in paragraph (2), in the case of a 
        hospital with an application that has been approved by the 
        Medicare Geographic Classification Review Board under section 
        1886(d)(10)(C) of such Act (42 U.S.C. 1395ww(d)(10)(C)) to 
        change the hospital's geographic classification for a fiscal 
        year for purposes of the factor used to adjust the prospective 
        payment rate for area differences in hospital wage levels that 
        applies to such hospital under section 1886(d)(3)(E) of such 
        Act, the Secretary shall substitute such change in the 
        hospital's geographic adjustment that would otherwise be 
        applied to an entity or department of the hospital that is 
        provider based to account for variations in costs which are 
        attributable to wages and wage-related costs for items and 
        services paid under the prospective payment systems described 
        in paragraph (2).
            (2) Prospective payment systems covered.--For purposes of 
        this section, items and services furnished under the following 
        prospective payment systems are covered:
                    (A) SNF prospective payment system.--The 
                prospective payment system for covered skilled nursing 
                facility services under section 1888(e) of the Social 
                Security Act (42 U.S.C. 1395yy(e)).
                    (B) Home health services prospective payment 
                system.--The prospective payment system for home health 
                services under section 1895(b) of such Act (42 U.S.C. 
                1395fff(b)).
                    (C) Inpatient rehabilitation hospital services.--
                The prospective payment system for inpatient 
                rehabilitation services under section 1888(j) of such 
                Act (42 U.S.C. 1395ww(j)).
                    (D) Inpatient long-term care hospital services.--
                The prospective payment system for inpatient hospital 
                services of long-term care hospitals under section 123 
                of the BBRA.
                    (E) Inpatient psychiatric hospital services.--The 
                prospective payment system for inpatient hospital 
                services of psychiatric hospitals and units under 
                section 124 of the BBRA.
    (b) Effective Date.--Subsection (a) applies to fiscal years 
beginning with fiscal year 2002.

SEC. 304. RECLASSIFICATION OF A METROPOLITAN STATISTICAL AREA FOR 
              PURPOSES OF REIMBURSEMENT UNDER THE MEDICARE PROGRAM.

    Notwithstanding any other provision of law, effective for 
discharges occurring and services furnished during fiscal year 2001 and 
subsequent fiscal years, for purposes of making payments under title 
XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) to hospitals 
in the Mansfield, Ohio Metropolitan Statistical Area, such Metropolitan 
Statistical Area is deemed to be located in the Cleveland-Loraine-
Elyria, Ohio Metropolitan Statistical Area. The reclassification made 
under the previous sentence shall be treated as a decision of the 
Medicare Geographic Classification Review Board under section 
1886(d)(10) of such Act (42 U.S.C. 1395ww(d)(10)).

SEC. 305. MAKING THE MEDICARE DEPENDENT, SMALL RURAL HOSPITAL PROGRAM 
              PERMANENT.

    (a) Payment Methodology.--Section 1886(d)(5)(G) of the Social 
Security Act (42 U.S.C. 1395ww(d)(5)(G)) is amended--
            (1) in clause (i), by striking ``and before October 1, 
        2006,''; and
            (2) in clause (ii)(II), by striking ``and before October 1, 
        2006,''.
    (b) Conforming Amendments.--
            (1) Target amount.--Section 1886(b)(3)(D) (42 U.S.C. 
        1395ww(b)(3)(D)) is amended--
                    (A) in the matter preceding clause (i), by striking 
                ``and before October 1, 2006,''; and
                    (B) in clause (iv), by striking ``through fiscal 
                year 2005,'' and inserting ``or any subsequent fiscal 
                year,''.
            (2) Permitting hospitals to decline reclassification.--
        Section 13501(e)(2) of the Omnibus Budget Reconciliation Act of 
        1993 (42 U.S.C. 1395ww note) is amended by striking ``or fiscal 
        year 2000 through fiscal year 2005'' and inserting ``fiscal 
year 2000, or any subsequent fiscal year,''.

SEC. 306. OPTION TO BASE ELIGIBILITY ON DISCHARGES DURING ANY OF THE 3 
              MOST RECENT AUDITED COST REPORTING PERIODS.

    (a) Option To Base Eligibility on Discharges During Any of the 3 
Most Recent Audited Cost Reporting Periods.--Section 
1886(d)(5)(G)(iv)(IV) (42 U.S.C. 1395ww(d)(5)(G)(iv)(IV)) is amended by 
inserting ``, or any of the 3 most recent audited cost reporting 
periods,'' after ``1987''.
    (b) Effective Date.--The amendments made by this section shall 
apply with respect to cost reporting periods beginning on or after the 
date of enactment of this Act.

SEC. 307. IDENTIFICATION AND REDUCTION OF MEDICAL ERRORS BY PEER REVIEW 
              ORGANIZATIONS.

    (a) In General.--Section 1154(a) (42 U.S.C. 1320c-3(a)) is amended 
by inserting after paragraph (11) the following new paragraph:
            ``(12) The organization shall assist providers, 
        practitioners, and Medicare+Choice organizations in identifying 
        and developing strategies to reduce the incidence of actual and 
        potential medical errors and problems related to patient safety 
        affecting individuals entitled to benefits under title XVIII. 
        For the purposes of this part and title XVIII, the functions 
        described in this paragraph shall be treated as a review 
        function.''.
    (b) Effective Date.--The amendments made by this section take 
effect on January 1, 2001.

SEC. 308. GAO REPORT ON IMPACT OF THE EMERGENCY MEDICAL TREATMENT AND 
              ACTIVE LABOR ACT (EMTALA) ON HOSPITAL EMERGENCY 
              DEPARTMENTS.

    (a) Congressional Findings.--The Congress makes the following 
findings:
            (1) The Emergency Medical Treatment and Active Labor Act 
        (EMTALA) requires that hospitals and the emergency physicians 
        as well as doctors on call at hospital emergency departments 
        screen and stabilize patients who go to emergency departments 
        for treatment.
            (2) Physicians who refuse to treat emergency department 
        patients or fail to respond to hospital emergency department 
        requests when on call face significant fines and are exposed to 
        liability under EMTALA.
            (3) The Balanced Budget Act of 1997 made many changes in 
        hospital and physician reimbursement that appear to have had 
        unintended consequences that have hampered the ability of 
        hospitals, emergency physicians, and physicians covering 
        emergency department call to comply with the requirements of 
        EMTALA.
            (4) Estimates indicate that EMTALA costs emergency 
        department physicians $426,000,000 per year and leads to at 
        least $10,000,000,000 more in uncompensated inpatient services.
            (5) Emergency departments, emergency physicians, and 
        physicians covering emergency department call have become the 
        de facto providers of indigent health care in America.
            (6) 27 percent of the over 4,300,000 people living in 
        Arizona are uninsured.
            (7) Many physicians covering emergency department call in 
        Phoenix, Arizona, are resigning from the medical staff at 
        hospitals due to burdensome on-call requirements and 
        uncompensated care.
            (8) Significant concern exists as to whether downtown 
        Phoenix hospitals can keep their emergency departments open.
            (9) The cumulative effect of potential hospital closings 
        and staff resignations threatens the quality of health care in 
        Phoenix, Arizona.
    (b) Report.--The Comptroller General of the United States shall 
submit a report to the Subcommittee on Health and Environment of the 
Committee on Commerce of the House of Representatives by May 1, 2001, 
on the effect of the Emergency Medical Treatment and Active Labor Act 
on hospitals, emergency physicians, and physicians covering emergency 
department call, focusing on those in Arizona (including Phoenix) and 
California (including Los Angeles).
    (c) Report Requirements.--The report should evaluate--
            (1) the extent to which hospitals, emergency physicians, 
        and physicians covering emergency department call provide 
        uncompensated services in relation to the requirements of 
        EMTALA;
            (2) the extent to which the requirements of EMTALA are 
        having a deleterious effect on the legislation's original 
        intent;
            (3) any possible estimates for the total dollar amount 
        EMTALA-related care costs emergency physicians, physicians 
        covering emergency department call, and hospital emergency 
        departments;
            (4) the extent to which different portions of the country 
        may be experiencing similar uncompensated EMTALA-related care;
            (5) the extent to which EMTALA would be classified as an 
        unfunded mandate;
            (6) the extent to which States have programs to provide 
        financial support for uncompensated care;
            (7) the extent to which funds under medicare hospital bad 
        debt accounts are available to underwrite the cost of 
        uncompensated EMTALA-related care; and
            (8) the financial strain that illegal immigration 
        populations place on hospital emergency departments.
    (d) Definition.--In this section, the terms ``Emergency Medical 
Treatment and Active Labor Act'' and ``EMTALA'' mean section 1867 of 
the Social Security Act (42 U.S.C. 1395dd).

    TITLE IV--MEDICARE+CHOICE PROGRAM STABILIZATION AND IMPROVEMENTS

                      Subtitle A--Payment Reforms

SEC. 401. INCREASING MINIMUM PAYMENT AMOUNT.

    Section 1853(c)(1)(B)(ii) (42 U.S.C. 1395w-23(c)(1)(B)(ii)) is 
amended--
            (1) by striking ``(ii) For a succeeding year'' and 
        inserting ``(ii)(I) Subject to subclause (II), for a succeeding 
        year''; and
            (2) by adding at the end the following new subclause:
                            ``(II) For 2001 for any area in a 
                        Metropolitan Statistical Area with a population 
                        of more than 250,000, $525 (and for any other 
                        area, $475).''.

SEC. 402. 3 PERCENT MINIMUM PERCENTAGE UPDATE FOR 2001.

    Section 1853(c)(1)(C)(ii) (42 U.S.C. 1395w-23(c)(1)(C)(ii)) is 
amended by inserting ``(or 103 percent in the case of 2001)'' after 
``102 percent''.

SEC. 403. 10-YEAR PHASE IN OF RISK ADJUSTMENT BASED ON DATA FROM ALL 
              SETTINGS.

    Section 1853(a)(3)(C)(ii) (42 U.S.C. 1395w-23(c)(1)(C)(ii)) is 
amended--
            (1) by striking the period at the end of subclause (II) and 
        inserting a semicolon; and
            (2) by adding after and below subclause (II) the following:
                        ``and, beginning in 2004, insofar as such risk 
                        adjustment is based on data from substantially 
                        all settings, the methodology shall be phased 
                        in equal increments over a 10-year period, 
                        beginning with 2004 or (if later) the first 
                        year in which such data are used.''.

SEC. 404. TRANSITION TO REVISED MEDICARE+CHOICE PAYMENT RATES.

    (a) Announcement of Revised Medicare+Choice Payment Rates.--Within 
2 weeks after the date of the enactment of this Act, the Secretary of 
Health and Human Services shall determine, and shall announce (in a 
manner intended to provide notice to interested parties) 
Medicare+Choice capitation rates under section 1853 of the Social 
Security Act (42 U.S.C. 1395w-23) for 2001, revised in accordance with 
the provisions of this Act.
    (b) Reentry Into Program Permitted for Medicare+Choice Programs in 
2000.--A Medicare+Choice organization that provided notice to the 
Secretary of Health and Human Services as of July 3, 2000, that it was 
terminating its contract under part C of title XVIII of the Social 
Security Act or was reducing the service area of a Medicare+Choice plan 
offered under such part shall be permitted to continue participation 
under such part, or to maintain the service area of such plan, for 2001 
if it provides the Secretary with the information described in section 
1854(a)(1) of the Social Security Act (42 U.S.C. 1395w-24(a)(1)) within 
four weeks after the date of the enactment of this Act.
    (c) Revised Submission of Proposed Premiums and Related 
Information.--If--
            (1) a Medicare+Choice organization provided notice to the 
        Secretary of Health and Human Services as of July 3, 2000, that 
        it was renewing its contract under part C of title XVIII of the 
        Social Security Act for all or part of the service area or 
        areas served under its current contract, and
            (2) any part of the service area or areas addressed in such 
        notice includes a county for which the Medicare+Choice 
        capitation rate under section 1853(c) of such Act (42 U.S.C. 
        1395w-23(c)) for 2001, as determined under subsection (a), is 
        higher than the rate previously determined for such year,
such organization shall revise its submission of the information 
described in section 1854(a)(1) of the Social Security Act (42 U.S.C. 
1395w-24(a)(1)), and shall submit such revised information to the 
Secretary, within four weeks after the date of the enactment of this 
Act.

                   Subtitle B--Administrative Reforms

SEC. 411. EFFECTIVENESS OF ELECTIONS AND CHANGES OF ELECTIONS.

    (a) In General.--Section 1851(f)(2) (42 U.S.C. 1395w-21(f)(2)) is 
amended by striking ``made,'' and all that follows and inserting 
``made.''.
    (b) Effective Date.--The amendment made by subsection (a) applies 
with respect to years beginning on or after January 1, 2001.

SEC. 412. MEDICARE+CHOICE PROGRAM COMPATIBILITY WITH EMPLOYER OR UNION 
              GROUP HEALTH PLANS.

    (a) In General.--Section 1857 (42 U.S.C. 1395w-27) is amended by 
adding at the end the following new subsection:
    ``(i) M+C Program Compatibility With Employer or Union Group Health 
Plans.--To facilitate the offering of Medicare+Choice plans under 
contracts between Medicare+Choice organizations and employers, labor 
organizations, or the trustees of a fund established by 1 or more 
employers or labor organizations (or combination thereof) to furnish 
benefits to the entity's employees, former employees (or combination 
thereof) or members or former members (or combination thereof) of the 
labor organizations, the Secretary may waive or modify requirements 
that hinder the design of, the offering of, or the enrollment in such 
Medicare+Choice plans.''.
    (b) Effective Date.--The amendment made by subsection (a) applies 
with respect to years beginning with 2001.

SEC. 413. UNIFORM PREMIUM AND BENEFITS.

    (a) In General.--Subsections (c) and (f)(1)(D) of section 1854 (42 
U.S.C. 1395w-24) are each amended by inserting before the period at the 
end the following: ``, except across counties as approved by the 
Secretary''.
    (b) Effective Date.--The amendments made by subsection (a) apply 
with respect to years beginning on or after January 1, 2001.

                           TITLE V--MEDICAID

SEC. 501. DSH PAYMENTS.

    (a) Continuation of Medicaid DSH Allotments at Fiscal Year 2000 
Levels for Fiscal Years 2001 and 2002.--Section 1923(f) (42 U.S.C. 
1396r-4(f)), as amended by section 601 of the Medicare, Medicaid, and 
SCHIP Balanced Budget Refinement Act of 1999 (as enacted into law by 
section 1000(a)(6) of Public Law 106-113), is amended--
            (1) in paragraph (2)--
                    (A) in the matter preceding the table, by striking 
                ``2002'' and inserting ``2000'';
                    (B) in the table in such paragraph, by striking the 
                columns labeled ``FY 01'' and ``FY 02'' relating to 
                fiscal years 2001 and 2002; and
            (2) in paragraph (3)--
                    (A) by striking ``2003'' in the heading and 
                inserting ``2001''; and
                    (B) by striking ``2003'' and inserting ``2001''.
    (b) Higher Rate of Increase in Medicaid DSH Allotment for Extremely 
Low DSH States.--Section 1923(f)(3) (42 U.S.C. 1396r-4(f)(3)) is 
amended--
            (1) in subparagraph (A), by striking ``subparagraph (B)'' 
        and inserting ``subparagraphs (B) and (C)''; and
            (2) by adding at the end the following new subparagraph:
                    ``(C) Higher update rate for extremely low dsh 
                states.--In the case of a State in which the total 
                expenditures under the State plan (including Federal 
                and State shares) for disproportionate share hospital 
                adjustments under this section for fiscal year 1999, as 
                reported to the Administrator of the Health Care 
                Financing Administration as of August 31, 2000, is less 
                than 1 percent of the State's total amount of 
                expenditures under the State plan for medical 
                assistance during the fiscal year, the DSH allotment 
                for fiscal year 2001 shall be increased to 1 percent of 
                the State's total amount of expenditures under such 
                plan for such assistance during such fiscal year.''.
    (c) District of Columbia.--Effective beginning with fiscal year 
2001, the item in the table in section 1923(f) (42 U.S.C. 1396r-4(f)) 
relating to District of Columbia for FY 2000, is amended by striking 
``32'' and inserting ``49''.
    (d) Contingent Allotment for Tennessee.--Section 1923(f) (42 U.S.C. 
1396r-4(f)) is amended--
            (1) in paragraph (3)(A), by striking ``or this paragraph'' 
        and inserting ``, this paragraph, or paragraph (4)''; and
            (2) by adding at the end the following new paragraph:
            ``(4) Contingent allotment adjustment for tennessee.--If 
        the State-wide waiver approved under section 1115 for the State 
        of Tennessee with respect to requirements under this title as 
        in effect on the date of the enactment of this subsection is 
        revoked or terminated, the DSH allotment for Tennessee for 
        fiscal year 2001 is deemed to be equal to $286,442,437.''.
    (e) Assuring Identification of Medicaid Managed Care Patients.--
            (1) In general.--Section 1932 (42 U.S.C. 1396u-2) is 
        amended by adding at the end the following:
    ``(g) Identification of Patients for Purposes of Making DSH 
Payments.--Each contract with a managed care entity under section 
1903(m) or under section 1905(t)(3) shall require the entity either--
            ``(1) to report to the State information necessary to 
        determine the hospital services provided under the contract 
        (and the identity of hospitals providing such services) for 
        purposes of applying sections 1886(d)(5)(F) and 1923; or
            ``(2) to include a sponsorship code in the identification 
        card issued to individuals covered under this title in order 
        that a hospital may identify a patient as being entitled to 
        benefits under this title.''.
            (2) Clarification of counting managed care medicaid 
        patients.--Section 1923(a)(2)(D) (42 U.S.C. 1396r-4(a)(2)(D)) 
        is amended--
                    (A) in subsection (a)(2)(D), by inserting after 
                ``the proportion of low-income and medicaid patients'' 
                the following: ``(including such patients who receive 
                benefits through a managed care entity)'';
                    (B) in subsection (b)(2), by inserting after ``a 
                State plan approved under this title in a period'' the 
                following: ``(regardless of whether they receive 
                benefits on a fee-for-service basis or through a 
                managed care entity)''; and
                    (C) in subsection (b)(3)(A)(i), by inserting after 
                ``under a State plan under this title'' the following: 
                ``(regardless of whether the services were furnished on 
                a fee-for-service basis or through a managed care 
                entity)''.
            (3) Effective date.--The amendments made by paragraph (1) 
        apply to payments made for periods on or after January 1, 2001.

SEC. 502. NEW PROSPECTIVE PAYMENT SYSTEM FOR FEDERALLY-QUALIFIED HEALTH 
              CENTERS AND RURAL HEALTH CLINICS.

    (a) In General.--Section 1902(a) (42 U.S.C. 1396a(a)) is amended--
            (1) in paragraph (13)--
                    (A) in subparagraph (A), by adding ``and'' at the 
                end;
                    (B) in subparagraph (B), by striking ``and'' at the 
                end; and
                    (C) by striking subparagraph (C); and
            (2) by inserting after paragraph (14) the following new 
        paragraph:
            ``(15) for payment for services described in clause (B) or 
        (C) of section 1905(a)(2) under the plan in accordance with 
        subsection (aa);''.
    (b) New Prospective Payment System.--Section 1902 (42 U.S.C. 1396a) 
is amended by adding at the end the following:
    ``(aa) Payment for Services Provided by Federally-Qualified Health 
Centers and Rural Health Clinics.--
            ``(1) In general.--Beginning with fiscal year 2001 and each 
        succeeding fiscal year, the State plan shall provide for 
        payment for services described in section 1905(a)(2)(C) 
        furnished by a Federally-qualified health center and services 
        described in section 1905(a)(2)(B) furnished by a rural health 
        clinic in accordance with the provisions of this subsection. 
        The payment rate under this subsection shall not vary based 
        upon the site services provided in the case of the same center 
        or clinic entity.
            ``(2) Fiscal year 2001.--Subject to paragraph (4), for 
        services furnished during fiscal year 2001, the State plan 
        shall provide for payment for such services in an amount 
        (calculated on a per visit basis) that is equal to 100 percent 
        of the average of the costs of the center or clinic of 
        furnishing such services during fiscal years 1999 and 2000 
        which are reasonable and related to the cost of furnishing such 
        services, or based on such other tests of reasonableness as the 
        Secretary prescribes in regulations under section 1833(a)(3), 
        or, in the case of services to which such regulations do not 
        apply, the same methodology used under section 1833(a)(3), 
        adjusted to take into account any increase in the scope of such 
        services furnished by the center or clinic during fiscal year 
        2001.
            ``(3) Fiscal year 2002 and succeeding fiscal years.--
        Subject to paragraph (4), for services furnished during fiscal 
        year 2002 or a succeeding fiscal year, the State plan shall 
        provide for payment for such services in an amount (calculated 
        on a per visit basis) that is equal to the amount calculated 
        for such services under this subsection for the preceding 
        fiscal year--
                    ``(A) increased by the percentage increase in the 
                MEI (as defined in section 1842(i)(3)) applicable to 
                primary care services (as defined in section 
                1842(i)(4)) for that fiscal year; and
                    ``(B) adjusted to take into account any increase in 
                the scope of such services furnished by the center or 
                clinic during that fiscal year.
            ``(4) Establishment of initial year payment amount for new 
        centers or clinics.--In any case in which an entity first 
        qualifies as a Federally-qualified health center or rural 
        health clinic after fiscal year 2000, the State plan shall 
        provide for payment for services described in section 
        1905(a)(2)(C) furnished by the center or services described in 
        section 1905(a)(2)(B) furnished by the clinic in the first 
        fiscal year in which the center or clinic so qualifies in an 
        amount (calculated on a per visit basis) that is equal to 100 
        percent of the costs of furnishing such services during such 
        fiscal year based on the rates established under this 
        subsection for the fiscal year for other such centers or 
        clinics located in the same or adjacent area with a similar 
        case load or, in the absence of such a center or clinic, in 
        accordance with the regulations and methodology referred to in 
        paragraph (2) or based on such other tests of reasonableness as 
        the Secretary may specify. For each fiscal year following the 
        fiscal year in which the entity first qualifies as a Federally-
        qualified health center or rural health clinic, the State plan 
        shall provide for the payment amount to be calculated in 
        accordance with paragraph (3).
            ``(5) Administration in the case of managed care.--In the 
        case of services furnished by a Federally-qualified health 
        center or rural health clinic pursuant to a contract between 
        the center or clinic and a managed care entity (as defined in 
        section 1932(a)(1)(B)), the State plan shall provide for 
        payment to the center or clinic (at least quarterly) by the 
        State of a supplemental payment equal to the amount (if any) by 
        which the amount determined under paragraphs (2), (3), and (4) 
        of this subsection exceeds the amount of the payments provided 
        under the contract.
            ``(6) Alternative payment methodologies.--Notwithstanding 
        any other provision of this section, the State plan may provide 
        for payment in any fiscal year to a Federally-qualified health 
        center for services described in section 1905(a)(2)(C) or to a 
        rural health clinic for services described in section 
        1905(a)(2)(B) in an amount which is determined under an 
        alternative payment methodology that--
                    ``(A) is agreed to by the State and the center or 
                clinic; and
                    ``(B) results in payment to the center or clinic of 
                an amount which is at least equal to the amount 
                otherwise required to be paid to the center or clinic 
                under this section.''.
    (c) Conforming Amendments.--
            (1) Section 4712 of the Balanced Budget Act of 1997 (Public 
        Law 105-33; 111 Stat. 508) is amended by striking subsection 
        (c).
            (2) Section 1915(b) (42 U.S.C. 1396n(b)) is amended by 
        striking ``1902(a)(13)(E)'' and inserting ``1902(a)(15), 
        1902(aa),''.
    (d) GAO Study of Future Rebasing.--The Comptroller General of the 
United States shall provide for a study on the need for, and how to, 
rebase or refine costs for making payment under the medicaid program 
for services provided by Federally-qualified health centers and rural 
health centers (as provided under the amendments made by this section). 
The Comptroller General shall provide for submittal of a report on such 
study to the Congress by not later than 4 years after the date of the 
enactment of this Act.
    (e) Effective Date.--The amendments made by this section take 
effect on October 1, 2000, and apply to services furnished on or after 
such date.

SEC. 503. OPTIONAL COVERAGE OF LEGAL IMMIGRANTS UNDER THE MEDICAID 
              PROGRAM.

    (a) In General.--Section 1903(v) (42 U.S.C. 1396b(v)) is amended--
            (1) in paragraph (1), by striking ``paragraph (2)'' and 
        inserting ``paragraphs (2) and (4)''; and
            (2) by adding at the end the following new paragraph:
    ``(4)(A) A State may elect (in a plan amendment under this title) 
to provide medical assistance under this title, notwithstanding 
sections 401(a), 402(b), 403, and 421 of the Personal Responsibility 
and Work Opportunity Reconciliation Act of 1996, for aliens who are 
lawfully residing in the United States (including battered aliens 
described in section 431(c) of such Act) and who are otherwise eligible 
for such assistance, within either or both of the following eligibility 
categories, but only if they have lawfully resided in the United States 
for 2 years:
            ``(i) Pregnant women.--Women during pregnancy (and during 
        the 60-day period beginning on the last day of the pregnancy).
            ``(ii) Children.--Children (as defined under such plan), 
        including optional targeted low-income children described in 
        section 1905(u)(2)(B).
    ``(B) In the case of a State that has elected to provide medical 
assistance to a category of aliens under subparagraph (A), no action 
may be brought under an affidavit of support against any sponsor of 
such an alien who has lawfully resided in the United State for 2 years 
on the basis of provision of assistance to such category.''.
    (b) Effective Date.--The amendments made by subsection (a) take 
effect on October 1, 2000, and apply to medical assistance and child 
health assistance furnished on or after such date.

SEC. 504. ADDITIONAL ENTITIES QUALIFIED TO DETERMINE MEDICAID 
              PRESUMPTIVE ELIGIBILITY FOR LOW-INCOME CHILDREN.

    (a) In General.--Section 1920A(b)(3)(A)(i) (42 U.S.C. 1396r-
1a(b)(3)(A)(i)) is amended--
            (1) by striking ``or (II)'' and inserting ``, (II)''; and
            (2) by inserting ``eligibility of a child for medical 
        assistance under the State plan under this title, or 
        eligibility of a child for child health assistance under the 
        program funded under title XXI, (III) is an elementary school 
        or secondary school, as such terms are defined in section 14101 
        of the Elementary and Secondary Education Act of 1965 (20 
        U.S.C. 8801), an elementary or secondary school operated or 
        supported by the Bureau of Indian Affairs, a State or tribal 
        child support enforcement agency, a child care resource and 
        referral agency, an organization that is providing emergency 
        food and shelter under a grant under the Stewart B. McKinney 
        Homeless Assistance Act, or a State or tribal office or entity 
        involved in enrollment in the program under this title, under 
        part A of title IV, under title XXI, or that determines 
        eligibility for any assistance or benefits provided under any 
        program of public or assisted housing that receives Federal 
        funds, including the program under section 8 or any other 
        section of the United States Housing Act of 1937 (42 U.S.C. 
        1437 et seq.) or under the Native American Housing Assistance 
        and Self-Determination Act of 1996 (25 U.S.C. 4101 et seq.), or 
        (IV) any other entity the State so deems, as approved by the 
        Secretary'' before the semicolon.
    (b) Technical Amendments.--Section 1920A (42 U.S.C. 1396r-1a) is 
amended--
            (1) in subsection (b)(3)(A)(ii)--
                    (A) by striking ``paragraph (1)(A)'' and inserting 
                ``paragraph (2)'', and
                    (B) by striking ``42 U.S.C. 9821'' and inserting 
                ``42 U.S.C. 9831''; and
            (2) in subsection (c)(2), in the matter preceding 
        subparagraph (A), by striking ``subsection (b)(1)(A)'' and 
        inserting ``subsection (b)(2)''.
    (c) Application to Presumptive Eligibility for Pregnant Women Under 
Medicaid.--Section 1920(b) (42 U.S.C. 1396r-1(b)) is amended by adding 
at the end after and below paragraph (2) the following flush sentence:
``The term `qualified provider' includes a qualified entity as defined 
in section 1920A(b)(3).''.
    (d) Application Under Title XXI.--Section 2107(e)(1) (42 U.S.C. 
1397gg(e)(1)) is amended by adding at the end the following new 
subparagraph:
                    ``(D) Section 1920A (relating to presumptive 
                eligibility).''.

SEC. 505. IMPROVING WELFARE-TO-WORK TRANSITION.

    (a) 1 Year Extension.--Section 1925(f) (42 U.S.C. 1396r-6(f)) is 
amended by striking ``2001'' and inserting ``2002''.
    (b) Simplification Options.--
            (1) Removal of administrative reporting requirements for 
        additional 6-month extension.--Section 1925(b)(2) of such Act 
        (42 U.S.C. 1396r-6(b)(2)) is amended by adding at the end the 
        following new subparagraph:
                    ``(C) State option to waive reporting 
                requirements.--A State may elect to waive the reporting 
                requirements under subparagraph (B) and, in the case of 
                such a waiver for purposes of notices required under 
                subparagraph (A), to exclude from such notices any 
                reference to any requirement under subparagraph (B).''.
            (2) Exemption for states covering needy families up to 185 
        percent of poverty.--Section 1925 (42 U.S.C. 1396r-6) is 
        amended--
                    (A) in each of subsections (a)(1) and (b)(1), by 
                inserting ``but subject to subsection (g),'' after 
                ``Notwithstanding any other provision of this title,''; 
                and
                    (B) by adding at the end the following new 
                subsection:
    ``(g) Exemption for State Covering Needy Families Up to 185 Percent 
of Poverty.--
            ``(1) In general.--At State option, the provisions of this 
        section shall not apply to a State that uses the authority 
        under section 1931(b)(2)(C) to make medical assistance 
        available under the State plan under this title, at a minimum, 
        to all individuals described in section 1931(b)(1) in families 
        with gross incomes (determined without regard to work-related 
        child care expenses of such individuals) at or below 185 
        percent of the income official poverty line (as defined by the 
        Office of Management and Budget, and revised annually in 
        accordance with section 673(2) of the Omnibus Budget 
        Reconciliation Act of 1981) applicable to a family of the size 
        involved.
            ``(2) Application to other provisions of this title.--The 
        State plan of a State described in paragraph (1) shall be 
        deemed to meet the requirements of sections 
        1902(a)(10)(A)(i)(I) and 1902(e)(1).''.
            (3) Effective date.--The amendments made by this subsection 
        take effect on October 1, 2000.

SEC. 506. MEDICAID COUNTY-ORGANIZED HEALTH SYSTEMS.

    Section 9517(c)(3)(C) of the Comprehensive Omnibus Budget 
Reconciliation Act of 1985 is amended by striking ``10 percent'' and 
inserting ``14 percent''.

SEC. 507. MEDICAID RECOGNITION FOR SERVICES OF PHYSICIAN ASSISTANTS.

    (a) In General.--Section 1905(a) (42 U.S.C. 1396d(a)) is amended--
            (1) by redesignating paragraphs (22) through (27) as 
        paragraphs (23) through (28), and
            (2) by inserting after paragraph (21) the following new 
        paragraph:
            ``(22) services furnished by an physician assistant (as 
        defined in section 1861(aa)(5)) which the assistant is legally 
        authorized to perform under State law and with the supervision 
        of a physician;''.
    (b) Conforming Amendments.--(1) Section 1902(a)(10)(C)(iv) (42 
U.S.C. 1396a(a)(10)(C)(iv)) is amended by striking ``(24)'' and 
inserting ``(25)''.
    (2) Section 1929(e)(2)(A) (42 U.S.C. 1396t(e)(2)(A)) is amended by 
striking ``1905(a)(23)'' and inserting ``1905(a)(24)''.
    (3) Section 1917(c)(1)(C)(ii) (42 U.S.C. 1396p(c)(1)(C)(ii)) is 
amended by striking ``(22), or (24)'' and inserting ``(23), or (25)''.

          TITLE VI--STATE CHILDREN'S HEALTH INSURANCE PROGRAM

SEC. 601. SPECIAL RULE FOR AVAILABILITY AND REDISTRIBUTION OF UNUSED 
              FISCAL YEAR 1998 AND 1999 SCHIP ALLOTMENTS.

    (a) Change in Rules for Retention and Redistribution of Unused 
SCHIP Allotments for Fiscal Years 1998 and 1999.--Section 2104 (42 
U.S.C. 1397dd) is amended by adding at the end the following new 
subsection:
    ``(g) Rule for Extended Availability and Redistribution of Fiscal 
Years 1998 and 1999  Allotments.--
            ``(1) Amount redistributed.--In the case of a State that 
        expends all of its allotment under this section for fiscal year 
        1998 by the end of fiscal year 2000, and for fiscal year 1999 
        by the end of fiscal year 2001, the Secretary shall 
        redistribute to the State under subsection (f) (from the 
        unexpended portion of fiscal year 1998 or 1999 allotments of 
        other States (as applicable and determined by the application 
        of paragraph (2) with respect to such fiscal year)) the 
        following amount:
                    ``(A) State.--In the case of one of the 50 States 
                or the District of Columbia, the amount of the State's 
                expenditures in excess of the State's allotment for 
                fiscal year 1998 or 1999 (as applicable).
                    ``(B) Territory.--In the case of a commonwealth or 
                territory described in subsection (c)(3), an amount 
                that bears the same ratio to 1.05 percent of the total 
                amount described in paragraph (2)(B)(i)(I) as the ratio 
                of its fiscal year 1998 or 1999 allotment under 
                subsection (c) (as applicable) bears to the total of 
                all such allotments for such fiscal year under such 
                subsection.
            ``(2) Extension of availability of portion of fiscal years 
        1998 and 1999 allotments.--
                    ``(A) In general.--Notwithstanding subsection (e)--
                            ``(i) of the amounts allotted to a State 
                        pursuant to this section for fiscal year 1998 
                        that were not expended by the State by the end 
                        of fiscal year 2000; and
                            ``(ii) of the amounts allotted to a State 
                        pursuant to this section for fiscal year 1999 
                        that were not expended by the State by the end 
                        of fiscal year 2001,
                the amount specified in subparagraph (B) with respect 
                to fiscal year 1998 or 1999 (as applicable) for such 
                State shall remain available for expenditure by the 
                State through the end of fiscal year 2002.
                    ``(B) Amount remaining available for expenditure.--
                With respect to any State described in subparagraph 
                (A), the amount specified in this subparagraph is equal 
                to--
                            ``(i) the amount by which (I) the total 
                        amount available for redistribution under 
                        subsection (f) from the allotments for fiscal 
                        year 1998 or 1999 (as applicable and determined 
                        without regard to this subsection), exceeds 
                        (II) the total amounts redistributed under 
                        paragraph (1); multiplied by
                            ``(ii) the ratio of such State's unexpended 
                        fiscal year 1998 or 1999 allotment (as 
                        applicable) to the total amount described in 
                        clause (i)(I) for such fiscal year.
                    ``(C) Use of up to 10 percent of retained 1998 
                allotments for outreach activities.--Notwithstanding 
                section 2105(c)(2)(A), with respect to any State 
                described in subparagraph (A), the State may use up to 
                10 percent of the amount specified in subparagraph (B) 
                for fiscal year 1998 for expenditures for outreach 
                activities made consistent with section 2102(c)(1).
            ``(3) Determination of amounts.--For purposes of 
        calculating the amounts described in paragraphs (1) and (2), 
        the Secretary shall use the amounts reported by the States not 
        later than November 30 of the appropriate year on HCFA Form 64 
        or HCFA Form 21, as approved by the Secretary.''.
    (b) Effective Date.--The amendments made by this section shall take 
effect as if included in the enactment of section 4901 of BBA (111 
Stat. 552).

SEC. 602. OPTIONAL COVERAGE OF CERTAIN LEGAL IMMIGRANTS UNDER SCHIP.

    (a) In General.--Section 2107(e)(1) (42 U.S.C. 1397gg(e)(1)) is 
amended by adding at the end the following new subparagraph:
                    ``(D) Section 1903(v)(4) (relating to optional 
                coverage of categories of permanent resident alien 
                children), but only if the State has elected to apply 
                such section to the category of children under title 
                XIX.''.
    (b) Effective Date.--The amendment made by this section takes 
effect on October 1, 2000, and applies to medical assistance and child 
health assistance furnished on or after such date.

        TITLE VII--EXTENSION OF SPECIAL DIABETES GRANT PROGRAMS

SEC. 701. EXTENSION OF JUVENILE AND INDIAN DIABETES GRANT PROGRAMS.

    (a) Juvenile Diabetes Research Program.--Section 330B of the Public 
Health Service Act (42 U.S.C. 254c-2) is amended by adding at the end 
the following new subsection:
    ``(c) Extension of Funding.--There are hereby appropriated, from 
any amounts in the Treasury not otherwise appropriated, for each of 
fiscal years 2003 through 2007, $50,000,000 for grants under this 
section, to remain available until expended. Nothing in this subsection 
shall be construed as providing for such amounts to be derived or 
deducted from appropriations made under section 2104(a) of the Social 
Security Act.''.
    (b) Indian Diabetes Grant Program.----Section 330C of the Public 
Health Service Act (42 U.S.C. 254c-3) is amended by adding at the end 
the following new subsection:
    ``(d) Extension of Funding.--There are hereby appropriated, from 
any amounts in the Treasury not otherwise appropriated, for each of 
fiscal years 2003 through 2007, $50,000,000 for grants under this 
section, to remain available until expended. Nothing in this subsection 
shall be construed as providing for such amounts to be derived or 
deducted from appropriations made under section 2104(a) of the Social 
Security Act.''.
    (c) Extension of Reports on Grant Programs.--Section 4923(b) of BBA 
is amended--
            (1) in paragraph (1), by striking ``an interim report'' and 
        inserting ``interim reports'';
            (2) in paragraph (1), by striking ``, 2000'' and inserting 
        ``in each of 2000, 2002, and 2004''; and
            (3) in paragraph (2), by striking ``2002'' and inserting 
        ``2007''.
                                 <all>