[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 2110 Introduced in Senate (IS)]







106th CONGRESS
  2d Session
                                S. 2110

To amend title XVIII of the Social Security Act to provide for payment 
 of claims by health care providers against insolvent Medicare+Choice 
                 organizations and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 28, 2000

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

_______________________________________________________________________

                                 A BILL


 
To amend title XVIII of the Social Security Act to provide for payment 
 of claims by health care providers against insolvent Medicare+Choice 
                 organizations and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Medicare+Choice 
Beneficiary Confidence Act of 2000''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Payment of claims against insolvent Medicare+Choice 
                            organizations.
        ``Sec. 1856A. Payment of claims against insolvent 
                            Medicare+Choice organizations.''.
Sec. 3. Improved communication regarding the solvency of 
                            Medicare+Choice organizations between HCFA 
                            and the States.
Sec. 4. Response by the Secretary to failure of Medicare+Choice 
                            organizations to provide prompt payment.
Sec. 5. Surety bond required of Medicare+Choice organizations.

SEC. 2. PAYMENT OF CLAIMS AGAINST INSOLVENT MEDICARE+CHOICE 
              ORGANIZATIONS.

    (a) In General.--Title XVIII of the Social Security Act (42 U.S.C. 
1395 et seq.) is amended by inserting after section 1856 the following 
new section:

  ``payment of claims against insolvent medicare+choice organizations

    ``Sec. 1856A. (a) Payment of Claims.--
            ``(1) Insolvent medicare+choice organizations.--
                    ``(A) Submission of unpaid claims to hcfa.--If a 
                statutory successor is appointed for an insolvent 
                Medicare+Choice organization, such statutory successor 
                shall submit to the Secretary each valid unpaid clean 
                claim (as defined in section 1842(c)(2)(B)(i)) by a 
                health care provider for payment for any covered item 
                or service furnished before the date on which such 
                statutory successor was appointed to a Medicare+Choice 
                eligible individual enrolled in a Medicare+Choice plan 
                offered by such organization.
                    ``(B) Payments from trust funds.--Not later than 30 
                days after a clean claim is submitted under 
                subparagraph (A), the Secretary shall pay to the health 
                care provider the amount described in subparagraph (C) 
                from the Federal Hospital Insurance Trust Fund and the 
                Federal Supplementary Medical Insurance Trust Fund in 
                such proportion as the Secretary determines 
                appropriate.
                    ``(C) Amount described.--The amount described in 
                this subparagraph is as follows:
                            ``(i) Contracting providers.--In the case 
                        of a health care provider having a written 
                        agreement with the insolvent Medicare+Choice 
                        organization, the amount that would have been 
                        paid to the health care provider under such 
                        agreement for the covered item or service.
                            ``(ii) Noncontracting providers.--In the 
                        case of a health care provider that did not 
                        have a written agreement with the insolvent 
                        Medicare+Choice organization, the reasonable 
                        cost of the covered item or service.
            ``(2) Enrollees in medicare+choice plans offered by 
        insolvent medicare+choice organizations.--
                    ``(A) Reimbursement and collection.--In the case of 
                an individual enrolled in a Medicare+Choice plan 
                offered by an insolvent Medicare+Choice organization, 
                the Secretary shall provide for the following:
                            ``(i) Reimbursement of amounts paid.--The 
                        reimbursement of such individual for any amount 
                        paid by such individual to a health care 
                        provider for each covered item or service that 
                        such organization would have paid, but for the 
                        insolvency of such organization, to the health 
                        care provider under the plan in which the 
                        individual is enrolled.
                            ``(ii) Collection of amounts due.--The 
                        collection from such individual of any amount 
                        that remains due and owing by such individual 
                        under such plan for each covered item or 
                        service for which payment is made under 
                        paragraph (1)(B) as of the date of the notice 
                        of collection.
                    ``(B) Enrollee protection against insolvency.--No 
                Medicare+Choice eligible individual may be held liable 
                to any health care provider for the debts of an 
                insolvent Medicare+Choice organization.
    ``(b) HCFA a Creditor of Bankruptcy or Receivership Estate.--
            ``(1) In general.--The Secretary shall be deemed to be a 
        creditor of the estate of the insolvent Medicare+Choice 
        organization for any amount paid under paragraph (1)(B) or 
        (2)(A)(i) of subsection (a) and not collected from a 
        beneficiary under paragraph (2)(A)(ii) of such subsection.
            ``(2) Priority.--For purposes of applying paragraph (1), 
        the Secretary shall be given the same priority that the health 
        care provider paid under paragraph (1)(B) would have been given 
        if the amount paid to such provider remained due and owing.
    ``(c) Definitions.--In this section:
            ``(1) Insolvent medicare+choice organization.--The term 
        `insolvent Medicare+Choice organization' means a 
        Medicare+Choice organization for which--
                    ``(A) a petition for bankruptcy has been filed 
                under title 11, United States Code;
                    ``(B) a petition for receivership has been filed on 
                account of insolvency under State law; or
                    ``(C) any similar proceeding has commenced under 
                State law.
            ``(2) Health care provider.--The term `health care 
        provider' means a provider or other person that meets the 
        applicable requirements of this title and part A of title 
        XI.''.
    (b) Effective Date.--The amendment made by subsection (a) shall--
            (1) take effect on the date of enactment of this Act; and
            (2) apply with respect to Medicare+Choice organizations for 
        which a statutory successor is appointed on or after November 
        1, 1999.

SEC. 3. IMPROVED COMMUNICATION REGARDING THE SOLVENCY OF 
              MEDICARE+CHOICE ORGANIZATIONS BETWEEN HCFA AND THE 
              STATES.

    (a) In General.--Section 1857(d) of the Social Security Act (42 
U.S.C. 1395w-27(d)) is amended by adding at the end the following new 
paragraph:
            ``(6) Notification of states.--Each contract under this 
        section shall provide that in the case that the Secretary 
        determines, based on any information obtained under this 
        subsection, that a Medicare+Choice organization may not be able 
        to bear the risk of potential financial losses (as described in 
        paragraph (2)(B)(i)), the Secretary shall, within a reasonable 
        period of time--
                    ``(A) notify each State in which the 
                Medicare+Choice organization provides any covered item 
                or service of such determination; and
                    ``(B) provide each such State with the information 
                obtained under this subsection on which the 
                determination is based.''.
    (b) Effective Date.--The amendment made by subsection (a) shall--
            (1) take effect on the date of enactment of this Act; and
            (2) apply with respect to contracts entered into or renewed 
        on or after the date of enactment of this Act.

SEC. 4. RESPONSE BY THE SECRETARY TO FAILURE OF MEDICARE+CHOICE 
              ORGANIZATIONS TO PROVIDE PROMPT PAYMENT.

    (a) In General.--Section 1857(f) of the Social Security Act (42 
U.S.C. 1395w-27(f)) is amended by adding at the end the following new 
paragraph:
            ``(3) Secretary required to bypass noncomplying 
        organization.--
                    ``(A) In general.--In the case of a Medicare+Choice 
                eligible organization which the Secretary determines, 
                after notice and opportunity for a hearing, that--
                            ``(i) such organization has failed to make 
                        payments of amounts in compliance with 
                        paragraph (1); and
                            ``(ii) such payments are more than 60 days 
                        overdue;
                the Secretary shall provide for direct payment of the 
                amounts owed to providers and suppliers (or, in the 
                case of a Medicare+Choice private fee-for-service plan, 
                amounts owed to the enrollees) for covered services and 
                supplies furnished to individuals enrolled under this 
                part under the contract.
                    ``(B) Offset.--If the Secretary provides for direct 
                payments under subparagraph (A), the Secretary shall 
provide for an appropriate reduction in the amount of payments 
otherwise made to the organization under this part to reflect the 
amount of the Secretary's payments (and the Secretary's costs in making 
the payments).''.
    (b) Effective Date.--The amendment made by subsection (a) shall--
            (1) take effect on the date of enactment of this Act; and
            (2) apply with respect to contracts entered into or renewed 
        on or after the date of enactment of this Act.

SEC. 5. SURETY BOND REQUIRED OF MEDICARE+CHOICE ORGANIZATIONS.

    (a) In General.--Section 1857(e) of the Social Security Act (42 
U.S.C. 1395w-27(e)) is amended by adding at the end the following new 
paragraph:
            ``(3) Surety bond.--
                    ``(A)Ingeneral.--EachMedicare+Choice organization 
                shall provide the Secretary with a surety bond--
                            ``(i) effective for a period of 4 years (as 
                        specified by the Secretary) or in the case of a 
                        change in the ownership or control of the 
                        agency (as determined by the Secretary) during 
                        or after such 4-year period, an additional 
                        period of time that the Secretary determines 
                        appropriate, such additional period not to 
                        exceed 4 years from the date of such change in 
                        ownership or control;
                            ``(ii) in a form specified by the 
                        Secretary; and
                            ``(iii) for a year in the period described 
                        in subparagraph (A) in an amount that is equal 
                        to the lesser of $500,000 or 10 percent of the 
                        aggregate amount of payments to the agency 
                        under this title and title XIX for that year, 
                        as estimated by the Secretary.
                    ``(B) Additional requirements.--Each 
                Medicare+Choice organization shall meet such additional 
                requirements (including conditions relating to bonding 
                or establishing of escrow accounts as the Secretary 
                finds necessary for the financial security of the 
                program) as the Secretary finds necessary for the 
                effective and efficient operation of the program.
                    ``(C) Waiver.--The Secretary may waive the 
                requirement of a surety bond under subparagraph (A) in 
                the case of an organization that provides a comparable 
                surety bond under State law.
                    ``(D)Forfeiture.--If a Medicare+Choice organization 
                forfeits a surety bond provided under subparagraph (A), 
                the Secretary shall use the proceeds from such 
                forfeiture for the benefit of beneficiaries, providers, 
                and suppliers under this title.''.
    (b) Effective Date.--The amendment made by subsection (a) shall--
            (1) take effect on the date of enactment of this Act; and
            (2) apply with respect to contracts entered into or renewed 
        on or after the date of enactment of this Act.
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