[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 3077 Introduced in Senate (IS)]







106th CONGRESS
  2d Session
                                S. 3077

To amend the Social Security Act to make corrections and refinements in 
the Medicare, Medicaid, and SCHIP health insurance programs, as revised 
  by the Balanced Budget Act of 1997 and the Medicare, Medicaid, and 
 SCHIP Balanced Budget Refinement Act of 1999, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 20, 2000

 Mr. Moynihan (for himself, Mr. Daschle, Mr. Rockefeller, Mr. Breaux, 
Mr. Graham, Mr. Kerrey, Mr. Robb, Mr. Kennedy, Mr. Akaka, Mr. Bingaman, 
    Mrs. Boxer, Mr. Cleland, Mr. Dodd, Mr. Dorgan, Mr. Edwards, Mr. 
Hollings, Mr. Inouye, Mr. Johnson, Mr. Kerry, Ms. Landrieu, Mr. Leahy, 
  Mr. Levin, Mrs. Lincoln, Ms. Mikulski, Mr. Miller, Mrs. Murray, Mr. 
  Reed, Mr. Sarbanes, Mr. Schumer, Mr. Torricelli, and Mr. Wellstone) 
introduced the following bill; which was read twice and referred to the 
                          Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Social Security Act to make corrections and refinements in 
the Medicare, Medicaid, and SCHIP health insurance programs, as revised 
  by the Balanced Budget Act of 1997 and the Medicare, Medicaid, and 
 SCHIP Balanced Budget Refinement Act of 1999, 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; AMENDMENTS TO SOCIAL SECURITY ACT; REFERENCES 
              TO OTHER ACTS; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Medicare, 
Medicaid, and SCHIP Balanced Budget Refinement 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) The balanced budget act of 1997.--The term ``BBA'' 
        means the Balanced Budget Act of 1997 (Public Law 105-33; 111 
        Stat. 251).
            (2) The 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 (113 
        Stat. 1501A-321), as enacted into law by section 1000(a)(6) of 
        Public Law 106-113.
    (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--PROVISIONS RELATING TO PART A

                 Subtitle A--Skilled Nursing Facilities

Sec. 101. Eliminating reduction in skilled nursing facility (SNF) 
                            market basket update. 
Sec. 102. Revision of BBRA increase for skilled nursing facilities in 
                            fiscal years 2001 and 2002.
Sec. 103. MedPAC study on payment updates for skilled nursing 
                            facilities; authority of Secretary to make 
                            adjustments.
                       Subtitle B--PPS Hospitals

Sec. 111. Revision of reduction of indirect graduate medical education 
                            payments.
Sec. 112. Eliminating reduction in PPS hospital payment update.
Sec. 113. Eliminating reduction in disproportionate share hospital 
                            (DSH) payments.
Sec. 114. Equalizing the threshold and updating payment formulas for 
                            disproportionate share hospitals.
Sec. 115. Care for low-income patients.
Sec. 116. Modification of payment rate for Puerto Rico hospitals.
Sec. 117. MedPAC study on hospital area wage indexes.
                    Subtitle C--PPS Exempt Hospitals

Sec. 121. Treatment of certain cancer hospitals.
Sec. 122. Payment adjustment for inpatient services in rehabilitation 
                            hospitals.
                        Subtitle D--Hospice Care

Sec. 131. Revision in payments for hospice care.
                      Subtitle E--Other Provisions

Sec. 141. Hospitals required to comply with bloodborne pathogens 
                            standard.
Sec. 142. Informatics and data systems grant program.
Sec. 143. Relief from medicare part A late enrollment penalty for group 
                            buy-in for State and local retirees.
                  Subtitle F--Transitional Provisions

Sec. 151. Reclassification of certain counties and areas for purposes 
                            of reimbursement under the medicare 
                            program.
Sec. 152. Calculation and application of wage index floor for a certain 
                            area.
                TITLE II--PROVISIONS RELATING TO PART B

                Subtitle A--Hospital Outpatient Services

Sec. 201. Reduction of effective HOPD coinsurance rate to 20 percent by 
                            2014.
Sec. 202. Application of transitional corridor to certain hospitals 
                            that did not submit a 1996 cost report.
Sec. 203. Permanent guarantee of pre-BBA payment levels for outpatient 
                            services furnished by children's hospitals.
             Subtitle B--Provisions Relating to Physicians

Sec. 211. Loan deferment for residents.
Sec. 212. GAO studies and reports on medicare payments.
Sec. 213. MedPAC study on the resource-based practice expense system.
                     Subtitle C--Ambulance Services

Sec. 221. Election to forego phase-in of fee schedule for ambulance 
                            services.
Sec. 222. Prudent layperson standard for emergency ambulance services.
Sec. 223. Elimination of reduction in inflation adjustments for 
                            ambulance services.
Sec. 224. Study and report on the costs of rural ambulance services.
Sec. 225. Interim payments for rural ground ambulance services until 
                            regulation implemented.
Sec. 226. GAO study and report on the costs of emergency and medical 
                            transportation services.
                    Subtitle D--Preventive Services

Sec. 231. Elimination of deductibles and coinsurance for preventive 
                            benefits.
Sec. 232. Counseling for cessation of tobacco use.
Sec. 233. Coverage of glaucoma detection tests.
Sec. 234. Medical nutrition therapy services for beneficiaries with 
                            diabetes, a cardiovascular disease, or a 
                            renal disease.
Sec. 235. Studies on preventive interventions in primary care for older 
                            Americans.
Sec. 236. Institute of Medicine 5-year medicare prevention benefit 
                            study and report.
Sec. 237. Fast-track consideration of prevention benefit legislation.
                       Subtitle E--Other Services

Sec. 241. Revision of moratorium in caps for therapy services.
Sec. 242. Revision of coverage of immunosuppressive drugs.
Sec. 243. State accreditation of diabetes self-management training 
                            programs.
Sec. 244. Elimination of reduction in payment amounts for durable 
                            medical equipment and oxygen and oxygen 
                            equipment.
Sec. 245. Standards regarding payment for certain orthotics and 
                            prosthetics.
Sec. 246. National limitation amount equal to 100 percent of national 
                            median for new pap smear technologies and 
                            other new clinical laboratory test 
                            technologies.
Sec. 247. Increased medicare payments for certified nurse-midwife 
                            services.
Sec. 248. Payment for administration of drugs.
Sec. 249. MedPAC study on in-home infusion therapy nursing services.
            TITLE III--PROVISIONS RELATING TO PARTS A AND B

                    Subtitle A--Home Health Services

Sec. 301. Elimination of 15 percent reduction in payment rates under 
                            the prospective payment system for home 
                            health services.
Sec. 302. Exclusion of certain nonroutine medical supplies under the 
                            PPS for home health services.
Sec. 303. Permitting home health patients with Alzheimer's disease or a 
                            related dementia to attend adult day-care.
Sec. 304. Standards for home health branch offices.
Sec. 305. Treatment of home health services provided in certain 
                            counties.
             Subtitle B--Direct Graduate Medical Education

Sec. 311. Not counting certain geriatric residents against graduate 
                            medical education limitations.
Sec. 312. Program of payments to children's hospitals that operate 
                            graduate medical education programs.
Sec. 313. Authority to include costs of training of clinical 
                            psychologists in payments to hospitals.
Sec. 314. Treatment of certain newly established residency programs in 
                            computing medicare payments for the costs 
                            of medical education.
                  Subtitle C--Miscellaneous Provisions

Sec. 321. Waiver of 24-month waiting period for medicare coverage of 
                            individuals disabled with amyotrophic 
                            lateral sclerosis (ALS).
                  TITLE IV--RURAL PROVIDER PROVISIONS

                 Subtitle A--Critical Access Hospitals

Sec. 401. Payments to critical access hospitals for clinical diagnostic 
                            laboratory tests.
Sec. 402. Revision of payment for professional services provided by a 
                            critical access hospital.
Sec. 403. Permitting critical access hospitals to operate PPS exempt 
                            distinct part psychiatric and 
                            rehabilitation units.
      Subtitle B--Medicare Dependent, Small Rural Hospital Program

Sec. 411. Making the medicare dependent, small rural hospital program 
                            permanent.
Sec. 412. Option to base eligibility for medicare dependent, small 
                            rural hospital program on discharges during 
                            any of the 3 most recent audited cost 
                            reporting periods.
                  Subtitle C--Sole Community Hospitals

Sec. 421. Extension of option to use rebased target amounts to all sole 
                            community hospitals.
Sec. 422. Deeming a certain hospital as a sole community hospital.
              Subtitle D--Other Rural Hospital Provisions

Sec. 431. Exemption of hospital swing-bed program from the PPS for 
                            skilled nursing facilities.
Sec. 432. Permanent guarantee of pre-BBA payment levels for outpatient 
                            services furnished by rural hospitals.
Sec. 433. Treatment of certain physician pathology services.
                   Subtitle E--Other Rural Provisions

Sec. 441. Revision of bonus payments for services furnished in health 
                            professional shortage areas.
Sec. 442. Provider-based rural health clinic cap exemption.
Sec. 443. Payment for certain physician assistant services.
Sec. 444. Bonus payments for rural home health agencies in 2001 and 
                            2002.
Sec. 445. Exclusion of clinical social worker services and services 
                            performed under a contract with a rural 
                            health clinic or federally qualified health 
                            center from the PPS for SNFs.
Sec. 446. Coverage of marriage and family therapist services provided 
                            in rural health clinics.
Sec. 447. Capital infrastructure revolving loan program.
Sec. 448. Grants for upgrading data systems.
Sec. 449. Relief for financially distressed rural hospitals.
Sec. 450. Refinement of medicare reimbursement for telehealth services.
Sec. 451. MedPAC study on low-volume, isolated rural health care 
                            providers.
 TITLE V--PROVISIONS RELATING TO PART C (MEDICARE+CHOICE PROGRAM) AND 
                 OTHER MEDICARE MANAGED CARE PROVISIONS

Sec. 501. Restoring effective date of elections and changes of 
                            elections of Medicare+Choice plans.
Sec. 502. Special Medigap enrollment antidiscrimination provision for 
                            certain beneficiaries.
Sec. 503. Increase in national per capita Medicare+Choice growth 
                            percentage in 2001 and 2002.
Sec. 504. Allowing movement to 50:50 percent blend in 2002.
Sec. 505. Delay from July to November 2000, in deadline for offering 
                            and withdrawing Medicare+Choice plans for 
                            2001.
Sec. 506. Amounts in medicare trust funds available for Secretary's 
                            share of Medicare+Choice education and 
                            enrollment-related costs.
Sec. 507. Revised terms and conditions for extension of medicare 
                            community nursing organization (CNO) 
                            demonstration project.
Sec. 508. Modification of payment rules for certain frail elderly 
                            medicare beneficiaries.
   TITLE VI--PROVISIONS RELATING TO INDIVIDUALS WITH END-STAGE RENAL 
                                DISEASE

Sec. 601. Update in renal dialysis composite rate.
Sec. 602. Revision of payment rates for ESRD patients enrolled in 
                            Medicare+Choice plans.
Sec. 603. Permitting ESRD beneficiaries to enroll in another 
                            Medicare+Choice plan if the plan in which 
                            they are enrolled is terminated.
Sec. 604. Coverage of certain vascular access services for ESRD 
                            beneficiaries provided by ambulatory 
                            surgical centers.
Sec. 605. Collection and analysis of information on the satisfaction of 
                            ESRD beneficiaries with the quality of and 
                            access to health care under the medicare 
                            program.
   TITLE VII--ACCESS TO CARE IMPROVEMENTS THROUGH MEDICAID AND SCHIP

Sec. 701. New prospective payment system for Federally-qualified health 
                            centers and rural health clinics.
Sec. 702. Transitional medical assistance.
Sec. 703. Application of simplified SCHIP procedures under the medicaid 
                            program.
Sec. 704. Presumptive eligibility.
Sec. 705. Improvements to the maternal and child health services block 
                            grant.
Sec. 706. Improving access to medicare cost-sharing assistance for low-
                            income beneficiaries.
Sec. 707. Breast and cervical cancer prevention and treatment.
                      TITLE VIII--OTHER PROVISIONS

Sec. 801. Appropriations for Ricky Ray Hemophilia Relief Fund.
Sec. 802. Increase in appropriations for special diabetes programs for 
                            children with type I diabetes and Indians.
Sec. 803. Demonstration grants to improve outreach, enrollment, and 
                            coordination of programs and services to 
                            homeless individuals and families.
Sec. 804. Protection of an HMO enrollee to receive continuing care at a 
                            facility selected by the enrollee.
Sec. 805. Grants to develop and establish real choice systems change 
                            initiatives.

                 TITLE I--PROVISIONS RELATING TO PART A

                 Subtitle A--Skilled Nursing Facilities

SEC. 101. ELIMINATING REDUCTION IN SKILLED NURSING FACILITY (SNF) 
              MARKET BASKET UPDATE.

    (a) Elimination of Reduction.--Section 1888(e)(4)(E)(ii) (42 U.S.C. 
1395yy(e)(4)(E)(ii)) is amended--
            (1) in subclause (I), by adding ``and'' at the end;
            (2) by striking subclause (II); and
            (3) by redesignating subclause (III) as subclause (II).
    (b) Special Rule for Payment for Skilled Nursing Facility Services 
for Fiscal Year 2001.--Notwithstanding the amendments made by 
subsection (a), for purposes of making payments for covered skilled 
nursing facility services under section 1888(e) of the Social Security 
Act (42 U.S.C. 1395yy(e)) for fiscal year 2001, the Federal per diem 
rate referred to in paragraph (4)(E)(ii) of such section--
            (1) for the period beginning on October 1, 2000, and ending 
        on March 31, 2001, shall be the rate determined in accordance 
        with subclause (II) of such paragraph as in effect on the day 
        before the date of enactment of this Act; and
            (2) for the period beginning on April 1, 2001, and ending 
        on September 30, 2001, shall be the rate computed for fiscal 
        year 2000 pursuant to subclause (I) of such paragraph increased 
        by the skilled nursing facility market basket percentage change 
        for fiscal year 2001 plus 1 percentage point.

SEC. 102. REVISION OF BBRA INCREASE FOR SKILLED NURSING FACILITIES IN 
              FISCAL YEARS 2001 AND 2002.

    (a) Revision.--Section 101(d) of BBRA (113 Stat. 1501A-325) is 
amended--
            (1) in paragraph (1)--
                    (A) by striking ``4.0 percent for each such fiscal 
                year'' and inserting ``the applicable percent (as 
                defined in paragraph (3)) for each such fiscal year (or 
                portion of such year)''; and
            (2) by adding at the end the following new paragraph:
            ``(3) Applicable percent defined.--For purposes of this 
        subsection, the term `applicable percent' means, with respect 
        to services provided during--
                    ``(A) the period beginning on October 1, 2000, and 
                ending on March 31, 2001, 4.0 percent;
                    ``(B) the period beginning on April 1, 2001, and 
                ending on September 30, 2001, 8.0 percent; and
                    ``(C) fiscal year 2002, 6.0 percent.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect as if included in the enactment of section 101 of BBRA (113 
Stat. 1501A-324).

SEC. 103. MEDPAC STUDY ON PAYMENT UPDATES FOR SKILLED NURSING 
              FACILITIES; AUTHORITY OF SECRETARY TO MAKE ADJUSTMENTS.

    (a) Study.--The Medicare Payment Advisory Commission established 
under section 1805 of the Social Security Act (42 U.S.C. 1395b-6) (in 
this section referred to as ``MedPAC'') shall conduct a study of 
nursing home costs to determine the adequacy of payment rates 
(including updates to such rates) under the medicare program under 
title XVIII of such Act (42 U.S.C. 1395 et seq.) (in this section 
referred to as the ``medicare program'') for items and services 
furnished by skilled nursing facilities. In conducting such study, 
MedPAC shall use data on actual costs and cost increases.
    (b) Report.--Not later than 12 months after the date of enactment 
of this Act, MedPAC shall submit a report to the Secretary of Health 
and Human Services and Congress on the study conducted under subsection 
(a), including a description of the methodology and calculations used 
by the Health Care Financing Administration to establish the original 
payment level under the prospective payment system for skilled nursing 
facility services under section 1888(e) of the Social Security Act (42 
U.S.C. 1395yy(e)) and to annually update payments under the medicare 
program for items and services furnished by skilled nursing facilities, 
together with recommendations regarding methods to ensure that all 
input variables, including the labor costs, the intensity of services, 
and the changes in science and technology that are specific to such 
facilities, are adequately accounted for.
    (c) Authority of Secretary To Make Adjustments.--Notwithstanding 
any other provision of law, the Secretary of Health and Human Services 
may make adjustments to payments under the prospective payment system 
under section 1888(e) of the Social Security Act (42 U.S.C. 1395yy(e)) 
for covered skilled nursing facility services to reflect any necessary 
adjustments to such payments as is appropriate as a result of the study 
conducted under subsection (a).
    (d) Publication.--
            (1) In general.--Not later than April 1, 2002, the 
        Secretary of Health and Human Services shall publish for public 
        comment a description of--
                    (A) whether the Secretary will make any adjustments 
                pursuant to subsection (c); and
                    (B) if so, the form of such adjustments.
            (2) Final form.--Not later than August 1, 2002, the 
        Secretary of Health and Human Services shall publish the 
        description described in paragraph (1) in final form.

                       Subtitle B--PPS Hospitals

SEC. 111. REVISION OF REDUCTION OF INDIRECT GRADUATE MEDICAL EDUCATION 
              PAYMENTS.

    (a) Revision.--
            (1) In general.--Section 1886(d)(5)(B)(ii) (42 U.S.C. 
        1395ww(d)(5)(B)(ii)) is amended--
                    (A) in subclause (IV), by adding ``and'' at the 
                end; and
                    (B) by striking subclauses (V) and (VI) and 
                inserting the following new subclause:
                            ``(V) on or after October 1, 2000, `c' is 
                        equal to 1.6.''.
            (2) Technical amendments.--Section 1886(d)(5)(B) (42 U.S.C. 
        1395ww(d)(5)(B)), as amended by paragraph (1), is amended--
                    (A) by realigning the left margins of clauses (ii) 
                and (v) so as to align with the left margin of clause 
                (i); and
                    (B) by realigning the left margins of subclauses 
                (I) through (V) of clause (ii) appropriately.
    (b) Special Adjustment for Purposes of Maintaining 6.5 Percent IME 
Payment for Fiscal Year 2001.--Notwithstanding paragraph (5)(B)(ii)(V) 
of section 1886(d) of the Social Security Act (42 U.S.C. 
1395ww(d)(5)(B)(ii)(V)), as amended by subsection (a), for purposes of 
making payments for subsection (d) hospitals (as defined in paragraph 
(1)(B) of such section) with indirect costs of medical education, the 
indirect teaching adjustment factor referred to in paragraph (5)(B)(ii) 
of such section shall be determined--
            (1) for discharges occurring on or after October 1, 2000, 
        and before April 1, 2001, pursuant to such paragraph as in 
        effect on the day before the date of enactment of this Act; and
            (2) for discharges occurring on or after April 1, 2001, and 
        before October 1, 2001, by substituting ``1.66'' for ``1.6'' in 
        subclause (V) of such paragraph (as so amended).
    (c) Conforming Amendment Relating to Determination of Standardized 
Amount.--Section 1886(d)(2)(C)(i) (42 U.S.C. 1395ww(d)(2)(C)(i)) is 
amended--
            (1) by inserting a comma after ``Balanced Budget Act of 
        1997''; and
            (2) by inserting ``, or any payment under such paragraph 
        resulting from the application of section 111(b) of the 
        Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 
        2000'' after ``Balanced Budget Refinement Act of 1999''.

SEC. 112. ELIMINATING REDUCTION IN PPS HOSPITAL PAYMENT UPDATE.

    (a) In General.--Section 1886(b)(3)(B)(i) (42 U.S.C. 
1395ww(b)(3)(B)(i)) is amended--
            (1) in subclause (XV), by adding ``and'' at the end;
            (2) by striking subclauses (XVI) and (XVII);
            (3) by redesignating subclause (XVIII) as subclause (XVI); 
        and
            (4) in subclause (XVI), as so redesignated, by striking 
        ``fiscal year 2003'' and inserting ``fiscal year 2001''.
    (b) Special Rule for Payment for Inpatient Hospital Services for 
Fiscal Year 2001.--Notwithstanding the amendments made by subsection 
(a), for purposes of making payments for fiscal year 2001 for inpatient 
hospital services furnished by subsection (d) hospitals (as defined in 
section 1886(d)(1)(B) of the Social Security Act (42 U.S.C. 
1395ww(d)(1)(B))), the ``applicable percentage increase'' referred to 
in section 1886(b)(3)(B)(i) of such Act (42 U.S.C. 
1395ww(b)(3)(B)(i))--
            (1) for discharges occurring on or after October 1, 2000, 
        and before April 1, 2001, shall be determined in accordance 
        with subclause (XVI) of such section as in effect on the day 
        before the date of enactment of this Act; and
            (2) for discharges occurring on or after April 1, 2001, and 
        before October 1, 2001, shall be equal to--
                    (A) the market basket percentage increase plus 1.1 
                percentage points for hospitals (other than sole 
                community hospitals) in all areas; and
                    (B) the market basket percentage increase for sole 
                community hospitals.

SEC. 113. ELIMINATING REDUCTION IN DISPROPORTIONATE SHARE HOSPITAL 
              (DSH) PAYMENTS.

    (a) Elimination of Reduction.--
            (1) In general.--Section 1886(d)(5)(F)(ix) (42 U.S.C. 
        1395ww(d)(5)(F)(ix)) is amended--
                    (A) in subclause (III), by striking ``during each 
                of fiscal years 2000 and 2001'' and inserting ``during 
                fiscal year 2000'';
                    (B) by striking subclause (IV);
                    (C) by redesignating subclause (V) as subclause 
                (IV); and
                    (D) in subclause (IV), as so redesignated, by 
                striking ``during fiscal year 2003'' and inserting 
                ``during fiscal year 2001''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to discharges occurring on or after October 1, 
        2000.
    (b) Special Rule for DSH Payment for Fiscal Year 2001.--
Notwithstanding the amendments made by subsection (a)(1), for purposes 
of making disproportionate share payments for subsection (d) hospitals 
(as defined in section 1886(d)(1)(B) of the Social Security Act (42 
U.S.C. 1395ww(d)(1)(B))) for fiscal year 2001, the additional payment 
amount otherwise determined under clause (ii) of section 1886(d)(5)(F) 
of the Social Security Act (42 U.S.C. 1395ww(d)(5)(F))--
            (1) for discharges occurring on or after October 1, 2000, 
        and before April 1, 2001, shall be adjusted as provided by 
        clause (ix)(III) of such section as in effect on the day before 
        the date of enactment of this Act; and
            (2) for discharges occurring on or after April 1, 2001, and 
        before October 1, 2001, shall be increased by 3 percent.
    (c) Conforming Amendments Relating to Determination of Standardized 
Amount.--Section 1886(d)(2)(C)(iv) (42 U.S.C. 1395ww(d)(2)(C)(iv)), is 
amended--
            (1) by striking ``Act of 1989 or'' and inserting ``Act of 
        1989,''; and
            (2) by inserting ``, or the enactment of section 113(b) of 
        the Medicare, Medicaid, and SCHIP Balanced Budget Refinement 
        Act of 2000'' after ``Omnibus Budget Reconciliation Act of 
        1990''.

SEC. 114. EQUALIZING THE THRESHOLD AND UPDATING PAYMENT FORMULAS FOR 
              DISPROPORTIONATE SHARE HOSPITALS.

    (a) Application of Uniform 15 Percent Threshold.--Section 
1886(d)(5)(F)(v) (42 U.S.C. 1395ww(d)(5)(F)(v)) is amended by striking 
``exceeds--'' and all that follows and inserting ``exceeds 15 
percent.''.
    (b) Change in Payment Percentage Formulas.--Section 
1886(d)(5)(F)(viii) (42 U.S.C. 1395ww(d)(5)(F)(viii)) is amended to 
read as follows:
    ``(viii) The formula used to determine the disproportionate share 
adjustment percentage for a cost reporting period for a hospital 
described in subclause (II), (III), or (IV) of clause (iv) is--
            ``(I) in the case of such a hospital with a 
        disproportionate patient percentage (as defined in clause (vi)) 
        that does not exceed 20.2, (P-15)(.65) + 2.5;
            ``(II) in the case of such a hospital with a 
        disproportionate patient percentage (as so defined) that 
        exceeds 20.2 but does not exceed 25.2, (P-20.2)(.825) + 5.88;
            ``(III) except as provided in subclause (IV), in the case 
        of such a hospital with a disproportionate patient percentage 
        (as so defined) that exceeds 25.2, the disproportionate share 
        adjustment percentage = 10; and
            ``(IV) in the case of such a hospital with a 
        disproportionate patient percentage (as so defined) that 
        exceeds 30.0 and that is described in clause (iv)(III), (P-
        30)(.6) + 10;
where `P' is the hospital's disproportionate patient percentage (as so 
defined).''.
    (c) Conforming Amendments.--Section 1886(d)(5)(F)(iv) (42 U.S.C. 
1395ww(d)(5)(F)(iv)) is amended--
            (1) in subclause (I), by striking ``is described in the 
        second sentence of clause (v)'' and inserting ``is located in a 
        rural area and has 500 or more beds'';
            (2) by amending subclause (II) to read as follows:
            ``(II) is located in an urban area and has less than 100 
        beds, or is located in a rural area and has less than 500 beds 
        and is not described in subclause (III) or (IV), is equal to 
        the percent determined in accordance with the applicable 
        formula described in clause (viii);'';
            (3) by striking subclauses (III) and (IV);
            (4) by redesignating subclauses (V) and (VI) as subclauses 
        (III) and (IV), respectively;
            (5) in subclause (III) (as so redesignated), by striking 
        ``and is not classified as a sole community hospital under 
        subparagraph (D),''; and
            (6) in subclause (IV) (as so redesignated), by striking 
        ``10 percent'' and inserting ``equal to the percent determined 
        in accordance with the applicable formula described in clause 
        (viii)''.
    (d) Effective Date.--The amendments made by this section shall 
apply to discharges occurring on or after April 1, 2001.

SEC. 115. CARE FOR LOW-INCOME PATIENTS.

    (a) Freeze in Medicaid DSH Allotments.--
            (1) In general.--Section 1923(f) (42 U.S.C. 1396r-4(f)) is 
        amended--
                    (A) by redesignating paragraph (4) as paragraph 
                (5); and
                    (B) by inserting after paragraph (3), the following 
                new paragraph:
            ``(4) Special rule for fiscal years 2001 through 2008.--
        With respect to each of fiscal years 2001 through 2008--
                    ``(A) paragraph (2) shall be applied--
                            ``(i) by substituting--
                                    ``(I) in the heading, `2001' for 
                                `2002';
                                    ``(II) in the matter preceding the 
                                table, `2001 (and the DSH allotment for 
                                a State for fiscal year 2001 is the 
                                same as the DSH allotment for the State 
                                for fiscal year 2000, as determined 
                                under the following table)' for `2002'; 
                                and
                            ``(ii) without regard to the columns in the 
                        table relating to FY 01 and FY 02 (fiscal years 
                        2001 and 2002); and
                    ``(B) paragraph (3) shall be applied by 
                substituting--
                            ``(i) in the heading, `2002' for `2003';
                            ``(ii) in subparagraph (A), `2002' for 
                        `2003'.''.
            (2) Repeal; applicability.--Effective October 1, 2008, the 
        amendments made by paragraph (1) are repealed and section 
        1923(f) of the Social Security Act (42 U.S.C. 1396r-4(f)) shall 
        be applied and administered as if such amendments had not been 
        enacted.
    (b) Increase in DSH Allotments for the District of Columbia.--
            (1) In general.--Each of the entries in the table in 
        section 1923(f)(2) (42 U.S.C. 1396r-4(f)(2)) relating to the 
        District of Columbia for FY 98 (fiscal year 1998), for FY 99 
        (fiscal year 1999), for FY 00 (fiscal year 2000), for FY 01 
        (fiscal year 2001), and for FY 02 (fiscal year 2002) are 
        amended by striking the amount otherwise specified and 
        inserting ``43.4''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall take effect as if included in the enactment of section 
        4721(a) of BBA (111 Stat. 511).
    (c) Optional Eligibility of Certain Alien Pregnant Women and 
Children for Medicaid and SCHIP.--
            (1) Medicaid.--Section 1903(v) (42 U.S.C. 1396b(v)) is 
        amended--
                    (A) in paragraph (1), by striking ``paragraph (2)'' 
                and inserting ``paragraphs (2) and (4)''; and
                    (B) 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 any of the following eligibility 
categories:
            ``(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 on the basis of provision of assistance to such 
category.''.
            (2) SCHIP.--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)(A)(ii) (relating to 
                optional coverage of permanent resident alien 
                children), but only if the State has in effect an 
                election under that same eligibility category for 
                purposes of title XIX.''.
            (3) Effective date.--The amendments made by this section 
        take effect on October 1, 2000, and apply to medical assistance 
        and child health assistance furnished on or after such date.

SEC. 116. MODIFICATION OF PAYMENT RATE FOR PUERTO RICO HOSPITALS.

    (a) Modification of Payment Rate.--Section 1886(d)(9)(A) (42 U.S.C. 
1395ww(d)(9)(A)) is amended--
            (1) in clause (i), by striking ``October 1, 1997, 50 
        percent ('' and inserting ``October 1, 2000, 25 percent (for 
        discharges between October 1, 1997, and September 30, 2000, 50 
        percent,''; and
            (2) in clause (ii), in the matter preceding subclause (I), 
        by striking ``after October 1, 1997, 50 percent ('' and 
        inserting ``after October 1, 2000, 75 percent (for discharges 
        between October 1, 1997, and September 30, 2000, 50 percent,''.
    (b) Special Rule for Payment for Fiscal Year 2001.--
            (1) In general.--Notwithstanding the amendment made by 
        subsection (a), for purposes of making payments for the 
        operating costs of inpatient hospital services of a section 
        1886(d) Puerto Rico hospital for fiscal year 2001, the amount 
        referred to in the matter preceding clause (i) of 
section 1886(d)(9)(A) of the Social Security Act (42 U.S.C. 
1395ww(d)(9)(A))--
                    (A) for discharges occurring on or after October 1, 
                2000, and before April 1, 2001, shall be determined in 
                accordance with such section as in effect on the day 
                before the date of enactment of this Act; and
                    (B) for discharges occurring on or after April 1, 
                2001, and before October 1, 2001, shall be determined--
                            (i) using 0 percent of the Puerto Rico 
                        adjusted DRG prospective payment rate referred 
                        to in clause (i) of such section; and
                            (ii) using 100 percent of the discharge-
                        weighted average referred to in clause (ii) of 
                        such section.
            (2) Section 1886(d) puerto rico hospital.--For purposes of 
        this subsection, the term ``section 1886(d) Puerto Rico 
        hospital'' has the meaning given the term ``subsection (d) 
        Puerto Rico hospital'' in the last sentence of section 
        1886(d)(9)(A) of the Social Security Act (42 U.S.C. 
        1395ww(d)(9)(A)).

SEC. 117. MEDPAC STUDY ON HOSPITAL AREA WAGE INDEXES.

    (a) Study.--
            (1) In general.--The Medicare Payment Advisory Commission 
        established under section 1805 of the Social Security Act (42 
        U.S.C. 1395b-6) (in this section referred to as ``MedPAC'') 
        shall conduct a study on the hospital area wage indexes used in 
        making payments to hospitals under section 1886(d) of the 
        Social Security Act (42 U.S.C. 1395ww(d)), including an 
        assessment of the accuracy of those indexes in reflecting 
        geographic differences in wage and wage-related costs of 
        hospitals.
            (2) Considerations.--In conducting the study under 
        paragraph (1), MedPAC shall consider--
                    (A) the appropriate method for determining hospital 
                area wage indexes;
                    (B) the appropriate portion of hospital payments 
                that should be adjusted by the applicable area wage 
                index;
                    (C) the appropriate method for adjusting the wage 
                index by occupational mix; and
                    (D) the feasibility and impact of making changes 
                (as determined appropriate by MedPAC) to the methods 
                used to determine such indexes, including the need for 
                a data system required to implement such changes.
    (b) Report.--Not later than 18 months after the date of enactment 
of this Act, MedPAC shall submit a report to the Secretary of Health 
and Human Services and Congress on the study conducted under subsection 
(a) together with such recommendations for legislation and 
administrative action as MedPAC determines appropriate.

                    Subtitle C--PPS Exempt Hospitals

SEC. 121. TREATMENT OF CERTAIN CANCER HOSPITALS.

    (a) In General.--Section 1886(d)(1)(B)(v) of the Social Security 
Act (42 U.S.C. 1395ww(d)(1)(B)(v)) is amended--
            (1) in subclause (I), by striking ``or'' at the end;
            (2) in subclause (II), by striking the semicolon at the end 
        and inserting ``, or''; and
            (3) by adding at the end the following:
            ``(III) a hospital that was recognized as a clinical cancer 
        research center by the National Cancer Institute of the 
        National Institutes of Health as of February 18, 1998, that has 
        never been reimbursed for inpatient hospital services pursuant 
        to a reimbursement system under a demonstration project under 
        section 1814(b), that is a freestanding facility organized 
        primarily for treatment of and research on cancer and is not a 
        unit of another hospital, that as of the date of enactment of 
        this subclause, is licensed for 162 acute care beds, and that 
        demonstrates for the 4-year period ending on June 30, 1999, 
        that at least 50 percent of its total discharges have a 
        principal finding of neoplastic disease, as defined in 
        subparagraph (E);''.
    (b) Conforming Amendment.--Section 1886(d)(1)(E) of the Social 
Security Act (42 U.S.C. 1395ww(d)(1)(E)) is amended by striking ``For 
purposes of subparagraph (B)(v)(II)'' and inserting ``For purposes of 
subclauses (II) and (III) of subparagraph (B)(v)''.
    (c) Payment.--
            (1) Application to cost reporting periods.--Any 
        classification by reason of section 1886(d)(1)(B)(v)(III) of 
        the Social Security Act (as added by subsection (a)) shall 
        apply to 12-month cost reporting periods beginning on or after 
        July 1, 1999.
            (2) Base year.--Notwithstanding the provisions of section 
        1886(b)(3)(E) of such Act (42 U.S.C. 1395ww(b)(3)(E)) or other 
        provisions to the contrary, the base cost reporting period for 
        purposes of determining the target amount for any hospital 
        classified by reason of section 1886(d)(1)(B)(v)(III) of such 
        Act (as added by subsection (a)) shall be the 12-month cost 
        reporting period beginning on July 1, 1995.
            (3) Deadline for payments.--Any payments owed to a hospital 
        by reason of this subsection shall be made expeditiously, but 
        in no event later than 1 year after the date of enactment of 
        this Act.

SEC. 122. PAYMENT ADJUSTMENT FOR INPATIENT SERVICES IN REHABILITATION 
              HOSPITALS.

    (a) Option To Apply Prospective Payment System During Transition 
Period.--Section 1886(j)(1)(A) (42 U.S.C. 1395ww(j)(1)(A)) is amended 
in the matter preceding subclause (i) by inserting ``the greater of the 
prospective payment rate determined in paragraph (3)(A) or'' after ``is 
equal to''.
    (b) Increase in Prospective Payment Percentage During Transition 
Period.--Section 1886(j)(1)(A)(ii)(I) (42 U.S.C. 
1395ww(j)(1)(A)(ii)(I)) is amended by inserting ``102 percent of'' 
before ``the per unit''.
    (c) Effective Date.--The amendments made by this section shall take 
effect as if included in the enactment of section 4421 of BBA (111 
Stat. 410).

                        Subtitle D--Hospice Care

SEC. 131. REVISION IN PAYMENTS FOR HOSPICE CARE.

    (a) Increase.--Section 1814(i)(1)(C) of the Social Security Act (42 
U.S.C. 1395f(i)(1)(C)) is amended--
            (1) in clause (i), by adding at the end the following new 
        sentence: ``With respect to routine home care and other 
        services included in hospice care furnished during fiscal year 
        2001, the payment rates for such care and services for such 
        fiscal year shall be 110 percent of such rates as would 
        otherwise be in effect for such fiscal year (taking into 
        account the increase under clause (ii) but not taking into 
        account the increase under section 131 of the Medicare, 
        Medicaid, and SCHIP Balanced Budget Refinement Act of 1999), 
        and such payment rates shall be used in determining payments 
        for such care and services furnished in a subsequent fiscal 
        year under clause (ii).''; and
            (2) in clause (ii), by striking ``during a subsequent 
        fiscal year'' and inserting ``during a fiscal year beginning 
        after September 30, 1990''.
    (b) Eliminating Reduction in Update.--Section 1814(i)(1)(C)(ii) of 
the Social Security Act (42 U.S.C. 1395f(i)(1)(C)(ii)) is amended--
            (1) in subclause (VI), by striking ``through 2002'' and 
        inserting ``through 2000''; and
            (2) in subclause (VII), by striking ``for a subsequent 
        fiscal year'' and inserting ``for fiscal year 2001 and each 
        subsequent fiscal year''.
    (c) Special Rule for Payment for Hospice Care for Fiscal Year 
2001.--Notwithstanding the amendments made by subsections (a) and (b), 
for purposes of making payments under section 1814(i)(1)(C) of the 
Social Security Act (42 U.S.C. 1395f(i)(1)(C)) for routine home care 
and other services included in hospice care furnished during fiscal 
year 2001, such payment rates shall be determined--
            (1) for the period beginning on October 1, 2000, and ending 
        on March 31, 2001, in accordance with such section as in effect 
        on the day before the date of enactment of this Act; and
            (2) for the period beginning on April 1, 2001, and ending 
        on September 30, 2001--
                    (A) by substituting ``120 percent'' for ``110 
                percent'' in the second sentence of clause (i) of such 
                section (as added by subsection (a)(1)); and
                    (B) as if the increase under subclause (ii)(VII) 
                (as amended by subsection (b)) for fiscal year 2001 was 
                equal to the market basket increase for the fiscal year 
                plus 1.0 percentage point.

                      Subtitle E--Other Provisions

SEC. 141. HOSPITALS REQUIRED TO COMPLY WITH BLOODBORNE PATHOGENS 
              STANDARD.

    (a) Agreements With Hospitals.--Section 1866(a)(1) (42 U.S.C. 
1395cc(a)(1)) is amended--
            (1) in subparagraph (R), by striking ``and'' at the end;
            (2) in subparagraph (S), by striking the period at the end 
        and inserting ``, and''; and
            (3) by inserting after subparagraph (S) the following new 
        subparagraph:
            ``(T) in the case of hospitals that are not otherwise 
        subject to regulation by the Occupational Safety and Health 
        Administration, to comply with the Bloodborne Pathogens 
        standard under section 1910.1030 of title 29 of the Code of 
        Federal Regulations.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to agreements in effect on or after the date that is 1 year after 
the date of enactment of this Act.

SEC. 142. INFORMATICS AND DATA SYSTEMS GRANT PROGRAM.

    (a) Grants to Hospitals.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall 
        establish a program to make grants to hospitals that have 
        submitted applications in accordance with subsection (c) to 
        assist such hospitals in offsetting the costs related to--
                    (A) developing and implementing standardized 
                clinical health care informatics systems designed to 
                improve medical care and reduce adverse events and 
                health care complications resulting from medication 
                errors; and
                    (B) establishing data systems to comply with the 
                administrative simplification requirements under part C 
                of title XI of the Social Security Act (42 U.S.C. 1320d 
                et seq.).
            (2) Costs.--For purposes of paragraph (1), the term 
        ``costs'' shall include costs associated with--
                    (A) purchasing computer software and hardware; and
                    (B) providing education and training to hospital 
                staff on computer information systems.
            (3) Duration.--The authority of the Secretary to make 
        grants under this section shall terminate on September 30, 
        2011.
            (4) Limitation.--A hospital that has received a grant under 
        section 1611 of the Public Health Service Act (as added by 
        section 447 of this Act) is not eligible to receive a grant 
        under this section.
    (b) Special Consideration for Large Urban Hospitals.--In awarding 
grants under this section, the Secretary shall give special 
consideration to hospitals located in large urban areas (as defined for 
purposes of section 1886(d) of the Social Security Act (42 U.S.C. 
1395ww(d)).
    (c) Application.--A hospital seeking a grant under this section 
shall submit an application to the Secretary at such time and in such 
form and manner as the Secretary specifies.
    (d) Reports.--
            (1) Information.--A hospital receiving a grant under this 
        section shall furnish the Secretary with such information as 
        the Secretary may require to--
                    (A) evaluate the project for which the grant is 
                made; and
                    (B) ensure that the grant is expended for the 
                purposes for which it is made.
            (2) Timing of submission.--
                    (A) Interim reports.--The Secretary shall report to 
                the Committee on Ways and Means of the House of 
                Representatives and the Committee on Finance of the 
                Senate at least annually on the grant program 
                established under this section, including in such 
                report information on the number of grants made, the 
                nature of the projects involved, the geographic 
                distribution of grant recipients, and such other 
                matters as the Secretary deems appropriate.
                    (B) Final report.--The Secretary shall submit a 
                final report to such committees not later than 180 days 
                after the completion of all of the projects for which a 
                grant is made under this section.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated from the Federal Hospital Insurance Trust Fund under 
section 1817 of the Social Security Act (42 U.S.C. 1395i) $25,000,000 
for each of the fiscal years 2001 through 2011 for the purposes of 
making grants under this section.

SEC. 143. RELIEF FROM MEDICARE PART A LATE ENROLLMENT PENALTY FOR GROUP 
              BUY-IN FOR STATE AND LOCAL RETIREES.

    Section 1818(d) (42 U.S.C. 1395i-2(d)) is amended by adding at the 
end the following new paragraph:
            ``(6)(A) In the case where a State, a political subdivision 
        of a State, or an agency or instrumentality of a State or 
        political subdivision thereof determines to pay, for the life 
        of each individual, the monthly premiums due under paragraph 
        (1) on behalf of each of the individuals in a qualified State 
        or local government retiree group who meets the conditions of 
        subsection (a), the amount of any increase otherwise applicable 
        under section 1839(b) (as modified by subsection (c)(6) of this 
        section) with respect to the monthly premium for benefits under 
        this part for an individual who is a member of such group shall 
        be reduced by the total amount of taxes paid under section 
        3101(b) of the Internal Revenue Code of 1986 by such individual 
        and under section 3111(b) by the employers of such individual 
        on behalf of such individual with respect to employment (as 
        defined in section 3121(b) of such Code).
            ``(B) For purposes of this paragraph, the term `qualified 
        State or local government retiree group' means all of the 
        individuals who retire prior to a specified date that is before 
        January 1, 2002, from employment in 1 or more occupations or 
        other broad classes of employees of--
                    ``(i) the State;
                    ``(ii) a political subdivision of the State; or
                    ``(iii) an agency or instrumentality of the State 
                or political subdivision of the State.''.

                  Subtitle F--Transitional Provisions

SEC. 151. RECLASSIFICATION OF CERTAIN COUNTIES AND AREAS FOR PURPOSES 
              OF REIMBURSEMENT UNDER THE MEDICARE PROGRAM.

    (a) Fiscal Years 2002 Through 2004.--Notwithstanding any other 
provision of law, effective for discharges occurring during fiscal 
years 2002, 2003, and 2004, for purposes of making payments under 
section 1886(d) of the Social Security Act (42 U.S.C. 1395ww(d))--
            (1) Iredell County, North Carolina is deemed to be located 
        in the Charlotte-Gastonia-Rock Hill, North Carolina-South 
        Carolina Metropolitan Statistical Area; and
            (2) the large urban area of New York, New York is deemed to 
        include Orange County, New York (including hospitals that have 
        been reclassified into such county).
For purposes of that section, any reclassification under this 
subsection shall be treated as a decision of the Medicare Geographic 
Classification Review Board under paragraph (10) of that section.
    (b) Fiscal Years 2001 Through 2003.--Notwithstanding any other 
provision of law, effective for discharges occurring during fiscal 
years 2001, 2002, and 2003, for purposes of making payments under 
section 1886(d) of the Social Security Act (42 U.S.C. 1395ww(d))--
            (1) the Jackson, Michigan Metropolitan Statistical Area is 
        deemed to be located in the Ann Arbor, Michigan Metropolitan 
        Statistical Area;
            (2) Tangipahoa Parish, Louisiana is deemed to be located in 
        the New Orleans, Louisiana Metropolitan Statistical Area; and
            (3) the large urban area of New York, New York is deemed to 
        include Duchess County, New York.
For purposes of that section, any reclassification under this 
subsection shall be treated as a decision of the Medicare Geographic 
Classification Review Board under paragraph (10) of that section.
    (c) Technical Correction to BBRA.--
            (1) In general.--Section 152 of BBRA (113 Stat. 1501A-334) 
        is amended--
                    (A) in subsection (a)(2), by inserting ``(including 
                hospitals that have been reclassified into such 
                county)'' after ``such county''; and
                    (B) in subsection (b)(2), by inserting ``(including 
                hospitals that have been reclassified into such 
                county)'' after ``Orange County, New York''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall take effect as if included in the enactment of section 
        152 of BBRA (113 Stat. 1501A-334).

SEC. 152. CALCULATION AND APPLICATION OF WAGE INDEX FLOOR FOR A CERTAIN 
              AREA.

    Notwithstanding any other provision of section 1886(d) of the 
Social Security Act (42 U.S.C. 1395ww(d)), for discharges occurring 
during fiscal year 2000, the Secretary of Health and Human Services 
shall calculate and apply the wage index for the Barnstable-Yarmouth 
Metropolitan Statistical Area under that section as if the Jordan 
Hospital were classified in such area for purposes of payment under 
that section for such fiscal year. Such recalculation shall not affect 
the wage index for any other area.

                TITLE II--PROVISIONS RELATING TO PART B

                Subtitle A--Hospital Outpatient Services

SEC. 201. REDUCTION OF EFFECTIVE HOPD COINSURANCE RATE TO 20 PERCENT BY 
              2019.

    Section 1833(t)(3)(B)(ii) (42 U.S.C. 1395l(t)(3)(B)(ii)) is 
amended--
            (1) by striking ``If the'' and inserting:
                                    ``(I) In general.--If the''; and
            (2) by adding at the end the following new subclause:
                                    ``(II) Accelerated phase-in.--The 
                                Secretary shall estimate, prior to 
                                January 1, 2002, the unadjusted 
                                copayment amount for each such service 
                                (or groups of such services). If the 
                                Secretary estimates such unadjusted 
                                copayment amount to be greater than 20 
                                percent for any such service (or group 
                                of such services) on or after January 
                                1, 2019, the Secretary shall, for 
                                services furnished beginning on or 
                                after January 1, 2002, reduce the 
                                unadjusted copayment amount for such 
                                service (or group of such services) in 
                                equal increments each year, from the 
                                amount applicable in 2001, by an amount 
                                estimated by the Secretary such that 
                                the unadjusted copayment amount shall 
                                equal 20 percent beginning on or after 
                                January 1, 2019.''.

SEC. 202. APPLICATION OF TRANSITIONAL CORRIDOR TO CERTAIN HOSPITALS 
              THAT DID NOT SUBMIT A 1996 COST REPORT.

    (a) In General.--Section 1833(t)(7)(F)(ii)(I) (42 U.S.C. 
1395l(t)(7)(F)(ii)(I)) is amended by inserting ``(or, in the case of a 
hospital that did not submit a cost report for such period, during the 
first cost reporting period ending in a year after 1996 and before 2001 
for which the hospital submitted a cost report)'' after ``1996''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect as if included in the enactment of section 202 of BBRA.

SEC. 203. PERMANENT GUARANTEE OF PRE-BBA PAYMENT LEVELS FOR OUTPATIENT 
              SERVICES FURNISHED BY CHILDREN'S HOSPITALS.

    (a) In General.--Section 1833(t)(7)(D) (42 U.S.C. 1395l(t)(7)(D)), 
as amended by section 432, is amended--
            (1) in the heading, by inserting ``, children's,'' after 
        ``small rural''; and
            (2) by striking ``section 1886(d)(1)(B)(v)'' and inserting 
        ``clause (iii) or (v) of section 1886(d)(1)(B)''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to services provided on or after the date that is 1 year after 
the date of enactment of this Act.

             Subtitle B--Provisions Relating to Physicians

SEC. 211. LOAN DEFERMENT FOR RESIDENTS.

    (a) Fairness in Medical Student Loan Financing.--
            (1) Eligibility requirements.--Section 427(a)(2)(C)(iii) of 
        the Higher Education Act of 1965 (20 U.S.C. 1077(a)(2)(C)(iii)) 
        is amended by inserting before the semicolon the following: ``, 
        except that for a medical student such period shall not exceed 
        the full initial residency period''.
            (2) Insurance program agreements.--Section 
        428(b)(1)(M)(iii) of the Higher Education Act of 1965 (20 
        U.S.C. 1078(b)(1)(M)(iii)) is amended by inserting before the 
        semicolon the following: ``, except that for a medical student 
        such period shall not exceed the full initial residency 
        period''.
            (3) Deferment eligibility.--Section 455(f)(2)(C) of the 
        Higher Education Act of 1965 (20 U.S.C. 1087e(f)(2)(C)) is 
        amended by inserting before the period the following: ``, 
        except that for a medical student such period shall not exceed 
        the full initial residency period''.
            (4) Contents of loan agreement.--Section 464(c)(2)(A)(iii) 
        of the Higher Education Act of 1965 (20 U.S.C. 
        1087dd(c)(2)(A)(iii)) is amended by inserting before the 
        semicolon the following: ``, except that for a medical student 
        such period shall not exceed the full initial residency 
        period''.
    (b) Fairness in Economic Hardship Determination.--Section 
435(o)(1)(B) of the Higher Education Act of 1965 (20 U.S.C. 
1085(o)(1)(B)) is amended to read as follows:
                    ``(B) such borrower is working full time and has a 
                Federal educational debt burden that equals or exceeds 
                20 percent of such borrower's adjusted gross income, 
                and the difference between such borrower's adjusted 
                gross income minus such burden is less than 250 percent 
                of the greater of--
                            ``(i) the annual earnings of an individual 
                        earning the minimum wage under section 6 of the 
                        Fair Labor Standards Act of 1938; or
                            ``(ii) 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 Community Service Block Grant 
                        Act) applicable to a family of 2; or''.

SEC. 212. GAO STUDIES AND REPORTS ON MEDICARE PAYMENTS.

    (a) GAO Study on HCFA Post-Payment Audit Process.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct a study of the post-payment audit process under 
        the medicare program under title XVIII of the Social Security 
        Act (42 U.S.C. 1395 et seq.) (in this section referred to as 
        the ``medicare program'') as such process applies to 
        physicians, including the proper level of resources  that the 
Health Care Financing Administration should devote to educating 
physicians regarding--
                    (A) coding and billing;
                    (B) documentation requirements; and
                    (C) the calculation of overpayments.
            (2) Report.--Not later than 18 months after the date of 
        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) together 
        with specific recommendations for changes or improvements in 
        the post-payment audit process described in such paragraph.
    (b) GAO Study on Administration and Oversight.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct a study on the aggregate effects of regulatory, 
        audit, oversight, and paperwork burdens on physicians and other 
        health care providers participating in the medicare program.
            (2) Report.--Not later than 18 months after the date of 
        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) together 
        with recommendations regarding any area in which--
                    (A) a reduction in paperwork, an ease of 
                administration, or an appropriate change in oversight 
                and review may be accomplished; or
                    (B) additional payments or education are needed to 
                assist physicians and other health care providers in 
                understanding and complying with any legal or 
                regulatory requirements.

SEC. 213. MEDPAC STUDY ON THE RESOURCE-BASED PRACTICE EXPENSE SYSTEM.

    (a) Study.--The Medicare Payment Advisory Commission established 
under section 1805 of the Social Security Act (42 U.S.C. 1395b-6) (in 
this section referred to as ``MedPAC'') shall conduct a study of the 
refinements to the practice expense relative value units during the 
transition to a resource-based practice expense system for physician 
payments under the medicare program under title XVIII of the Social 
Security Act (42 U.S.C. 1395 et seq.) (in this section referred to as 
the ``medicare program'').
    (b) Report.--Not later than July 1, 2001, MedPAC shall submit a 
report to the Secretary of Health and Human Services and Congress on 
the study conducted under subsection (a) together with recommendations 
regarding--
            (1) any change or adjustment that is appropriate to ensure 
        full access to a spectrum of care for beneficiaries under the 
        medicare program; and
            (2) the appropriateness of payments to physicians.

                     Subtitle C--Ambulance Services

SEC. 221. ELECTION TO FOREGO PHASE-IN OF FEE SCHEDULE FOR AMBULANCE 
              SERVICES.

    Section 1834(l) (42 U.S.C. 1395m(l)) is amended by adding at the 
end the following new paragraph:
            ``(8) Election to forego phase-in of fee schedule.--
                    ``(A) In general.--If the Secretary provides for a 
                phase-in of the fee schedule established under this 
                subsection, a supplier of ambulance services may make 
                an election to receive payments based only on such fee 
                schedule at any time during such phase-in, and the 
                Secretary shall begin to make payments to the supplier 
                based only on such fee schedule not later than the date 
                that is 60 days after the date on which the supplier 
                notifies the Secretary of such election.
                    ``(B) Waiver of budget neutrality.--The Secretary 
                shall apply paragraph (3)(A) as if this paragraph had 
                not been enacted.''.

SEC. 222. PRUDENT LAYPERSON STANDARD FOR EMERGENCY AMBULANCE SERVICES.

    (a) In General.--Section 1861(s)(7) (42 U.S.C. 1395x(s)(7)) is 
amended by inserting before the semicolon at the end the following: ``, 
except that such regulations shall not fail to treat ambulance services 
as medical and other health services solely because the ultimate 
diagnosis of the individual receiving the ambulance services results in 
a conclusion that ambulance services were not necessary, as long as the 
request for ambulance services is made after the sudden onset of a 
medical condition that would be classified as an emergency medical 
condition (as defined in section 1852(d)(3)(B)).''.
    (b) Effective Date.--The amendment made by this section shall apply 
with respect to ambulance services provided on or after October 1, 
2000.

SEC. 223. ELIMINATION OF REDUCTION IN INFLATION ADJUSTMENTS FOR 
              AMBULANCE SERVICES.

    Subparagraphs (A) and (B) of section 1834(l)(3) (42 U.S.C. 
1395m(l)(3)(A)) are each amended by striking ``reduced in the case of 
2001 and 2002 by 1.0 percentage points'' and inserting ``increased in 
the case of 2001 by 1.0 percentage point''.

SEC. 224. STUDY AND REPORT ON THE COSTS OF RURAL AMBULANCE SERVICES.

    (a) Study.--The Secretary of Health and Human Services (in this 
section referred to as the ``Secretary''), in consultation with the 
Office of Rural Health Policy, shall conduct a study of the means by 
which rural areas with low population densities can be identified for 
the purpose of designating areas in which the cost of providing 
ambulance services would be expected to be higher than similar services 
provided in more heavily populated areas because of low usage. Such 
study shall also include an analysis of the additional costs of 
providing ambulance services in areas designated under the previous 
sentence.
    (b) Report.--Not later than June 30, 2001, the Secretary shall 
submit a report to Congress on the study conducted under subsection 
(a), together with a regulation based on that study which adjusts the 
fee schedule payment rates for ambulance services provided in low 
density rural areas based on the increased cost of providing such 
services in such areas.

SEC. 225. INTERIM PAYMENTS FOR RURAL GROUND AMBULANCE SERVICES UNTIL 
              REGULATION IMPLEMENTED.

    (a) Interim Payments.--Section 1834(l) (42 U.S.C. 1395m(l)), as 
amended by section 221, is amended by adding at the end the following 
new paragraph:
            ``(9) Interim payments for rural ground ambulance 
        services.--Until such time as the fee schedule established 
        under this subsection is modified by the regulation described 
        in section 224(b) of the Medicare, Medicaid, and SCHIP Balanced 
        Budget Refinement Act of 2000, the amount of payment under this 
        subsection for ground ambulance services provided in a rural 
        area (as defined in section 1886(d)(2)(D)) shall be the greater 
        of--
                    ``(A) the amount determined under the fee schedule 
                established under this subsection (without regard to 
                any phase-in established pursuant to paragraph (2)(E)); 
                or
                    ``(B) the amount that would have been paid for such 
                services if the amendments made by section 4531(b) of 
                the Balanced Budget Act of 1997 had not been enacted;
        as adjusted for inflation in the manner described in paragraph 
        (3)(B). For purposes of this paragraph, an ambulance trip shall 
        be considered to have been provided in a rural area only if the 
        transportation of the patient originated in a rural area.''.
    (b) Conforming Amendments.--Section 1833(a)(1) (42 U.S.C. 
1395l(a)(1)) is amended--
            (1) in subparagraph (R)--
                    (A) by inserting ``except as provided in 
                subparagraph (T),'' before ``with respect''; and
                    (B) by striking ``and'' at the end; and
            (2) in subparagraph (S), by striking the semicolon at the 
        end and inserting ``, and (T) with respect to ambulance 
        services described in section 1834(l)(9), the amount paid shall 
        be 80 percent of the lesser of the actual charge for the 
        services or the amount determined under such section;''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to services provided on and after January 1, 2001.

SEC. 226. GAO STUDY AND REPORT ON THE COSTS OF EMERGENCY AND MEDICAL 
              TRANSPORTATION SERVICES.

    (a) Study.--The Comptroller General of the United States shall 
conduct a study of the costs of providing emergency and medical 
transportation services across the range of acuity levels of conditions 
for which such transportation services are provided.
    (b) Report.--Not later than 18 months after the date of 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 subsection (a), together with recommendations for any 
changes in methodology or payment level necessary to fairly compensate 
suppliers of emergency and medical transportation services and to 
ensure the access of beneficiaries under the medicare program under 
title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) to such 
services.

                    Subtitle D--Preventive Services

SEC. 231. ELIMINATION OF DEDUCTIBLES AND COINSURANCE FOR PREVENTIVE 
              BENEFITS.

    (a) In General.--Section 1833 (42 U.S.C. 1395l) is amended by 
inserting after subsection (o) the following new subsection:
    ``(p) Deductibles and Coinsurance Waived for Preventive Benefits.--
The Secretary may not require the payment of any deductible or 
coinsurance under subsection (a) or (b) of any individual enrolled for 
coverage under this part for any of the following preventive health 
care items and services:
            ``(1) Blood-testing strips, lancets, and blood glucose 
        monitors for individuals with diabetes described in section 
        1861(n).
            ``(2) Diabetes outpatient self-management training services 
        (as defined in section 1861(qq)(1)).
            ``(3) Pneumococcal, influenza, and hepatitis B vaccines and 
        administration described in section 1861(s)(10).
            ``(4) Screening mammography (as defined in section 
        1861(jj)).
            ``(5) Screening pap smear and screening pelvic exam (as 
        defined in paragraphs (1) and (2) of section 1861(nn), 
        respectively).
            ``(6) Bone mass measurement (as defined in section 
        1861(rr)(1)).
            ``(7) Prostate cancer screening test (as defined in section 
        1861(oo)(1)).
            ``(8) Colorectal cancer screening test (as defined in 
        section 1861(pp)(1)).''.
    (b) Waiver of Coinsurance.--Section 1833(a)(1)(B) (42 U.S.C. 
1395l(a)(1)(B)) is amended to read as follows: ``(B) with respect to 
preventive health care items and services described in subsection (p), 
the amounts paid shall be 100 percent of the fee schedule or other 
basis of payment under this title,''.
    (c) Waiver of Deductible.--Section 1833(b)(1) (42 U.S.C. 
1395l(b)(1)) is amended to read as follows: ``(1) such deductible shall 
not apply with respect to preventive health care items and services 
described in subsection (p),''.
    (d) Adding ``Lancet'' to Definition of DME.--Section 1861(n) (42 
U.S.C. 1395x(n)) is amended by striking ``blood-testing strips and 
blood glucose monitors'' and inserting ``blood-testing strips, lancets, 
and blood glucose monitors''.
    (e) Conforming Amendments.--
            (1) Elimination of coinsurance for clinical diagnostic 
        laboratory tests.--Paragraphs (1)(D)(i) and (2)(D)(i) of 
        section 1833(a) (42 U.S.C. 1395l(a)) are each amended--
                    (A) by striking ``basis or which'' and inserting 
                ``basis, which''; and
                    (B) by inserting ``, or which are described in 
                subsection (p)'' after ``critical access hospital''.
            (2) Elimination of coinsurance for certain dme.--Section 
        1834(a)(1)(A) (42 U.S.C. 1395m(a)(1)(A)) is amended by 
        inserting ``(or 100 percent, in the case of such an item 
        described in section 1833(p))'' after ``80 percent''.
            (3) Elimination of coinsurance for screening mammography.--
        Section 1834(c)(1)(C) (42 U.S.C. 1395m(c)(1)(C)) is amended by 
        striking ``80 percent'' and inserting ``100 percent''.
            (4) Elimination of deductibles and coinsurance for 
        colorectal cancer screening tests.--Section 1834(d) (42 U.S.C. 
        1395m(d)) is amended--
                    (A) in paragraph (2)(C)--
                            (i) by striking clause (ii);
                            (ii) by striking ``Facility payment 
                        limit.--'' and all that follows through 
                        ``Notwithstanding'' and inserting ``Facility 
                        payment limit.--Notwithstanding''; and
                            (iii) by redesignating subclauses (I) and 
                        (II) as clauses (i) and (ii), respectively; and
                    (B) in paragraph (3)(C)--
                            (i) by striking clause (ii); and
                            (ii) by striking ``Facility payment 
                        Limit.--'' and all that follows through 
                        ``Notwithstanding'' and inserting ``Facility 
                        payment limit.--Notwithstanding''.
    (f) Effective Date.--The amendments made by this section shall 
apply to items and services furnished on or after July 1, 2001.

SEC. 232. COUNSELING FOR CESSATION OF TOBACCO USE.

    (a) Coverage.--Section 1861(s)(2) (42 U.S.C. 1395x(s)(2)) is 
amended--
            (1) in subparagraph (S), by striking ``and'' at the end;
            (2) in subparagraph (T), by inserting ``and'' at the end; 
        and
            (3) by adding at the end the following new subparagraph:
            ``(U) counseling for cessation of tobacco use (as defined 
        in subsection (uu)) for individuals who have a history of 
        tobacco use;''.
    (b) Services Described.--Section 1861 (42 U.S.C. 1395x) is amended 
by adding at the end the following new subsection:

               ``Counseling for Cessation of Tobacco Use

    ``(uu)(1) Except as provided in paragraph (2), the term `counseling 
for cessation of tobacco use' means diagnostic, therapy, and counseling 
services for cessation of tobacco use which are furnished--
            ``(A) by or under the supervision of a physician; or
            ``(B) by any other health care professional who is legally 
        authorized to furnish such services under State law (or the 
        State regulatory mechanism provided by State law) of the State 
        in which the services are furnished, as would otherwise be 
        covered if furnished by a physician or as an incident to a 
        physician's professional service.
    ``(2) The term `counseling for cessation of tobacco use' does not 
include coverage for drugs or biologicals that are not otherwise 
covered under this title.''.
    (c) Elimination of Cost-Sharing.--
            (1) Elimination of coinsurance.--Section 1833(a)(1) (42 
        U.S.C. 1395l(a)(1)), as amended by section 225(b), is amended--
                    (A) by striking ``and'' before ``(T)''; and
                    (B) by inserting before the semicolon at the end 
                the following: ``, and (U) with respect to counseling 
                for cessation of tobacco use (as defined in section 
                1861(uu)), the amount paid shall be 100 percent of the 
                lesser of the actual charge for the services or the 
                amount determined by a fee schedule established by the 
                Secretary for the purposes of this subparagraph''.
            (2) Elimination of deductible.--The first sentence of 
        section 1833(b) (42 U.S.C. 1395l(b)) is amended--
                    (A) by striking ``and'' before ``(6)''; and
                    (B) by inserting before the period the following: 
                ``, and (7) such deductible shall not apply with 
                respect to counseling for cessation of tobacco use (as 
                defined in section 1861(uu))''.
    (d) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after July 1, 2001.

SEC. 233. COVERAGE OF GLAUCOMA DETECTION TESTS.

    (a) In General.--Section 1861 (42 U.S.C. 1395x), as amended by 
section 232, is amended--
            (1) in subsection (s)(2)--
                    (A) in subparagraph (T), by striking ``and'' at the 
                end;
                    (B) in subparagraph (U), by inserting ``and'' at 
                the end; and
                    (C) by adding at the end the following new 
                subparagraph:
            ``(V) glaucoma detection tests (as defined in subsection 
        (vv));''; and
            (2) by adding at the end the following new subsection:

                       ``Glaucoma Detection Tests

    ``(vv) The term `glaucoma detection test' means all of the 
following conducted for the purpose of early detection of glaucoma:
            ``(1) A dilated eye examination with an intraocular 
        pressure measurement.
            ``(2) Direct ophthalmoscopy or slit-lamp biomicroscopic 
        examination.''.
    (b) Limitation on Eligibility and Frequency.--Section 1834 (42 
U.S.C. 1395m) is amended by adding at the end the following new 
subsection:
    ``(m) Limitation on Coverage of Glaucoma Detection Tests.--
            ``(1) In general.--Notwithstanding any other provision of 
        this part, with respect to expenses incurred for glaucoma 
        detection tests (as defined in section 1861(vv)), payment may 
        be made only for glaucoma detection tests conducted--
                    ``(A) for individuals described in paragraph (2); 
                and
                    ``(B) consistent with the frequency permitted under 
                paragraph (3).
            ``(2) Individuals eligible for benefit.--Individuals 
        described in this paragraph are as follows:
                    ``(A) Individuals who are 60 years of age or older 
                and who have a family history of glaucoma.
                    ``(B) Other individuals who are at high risk (as 
                determined by the Secretary) of developing glaucoma.
            ``(3) Frequency limit.--
                    ``(A) In general.--Subject to subparagraph (B), 
                payment may not be made under this part for a glaucoma 
                detection test performed for an individual within 23 
                months following the month in which a glaucoma 
                detection test was performed under this part for the 
                individual.
                    ``(B) Exception.--The Secretary may permit a 
                glaucoma detection test to be covered on a more 
                frequent basis than that provided under subparagraph 
                (A) under such circumstances as the Secretary 
                determines to be appropriate.''.
    (c) No Application of Deductible.--Section 1833(b)(5) (42 U.S.C. 
1395l(b)(5)) is amended by inserting ``or with respect to glaucoma 
detection tests (as defined in section 1861(vv))'' after ``1861(jj))''.
    (d) Conforming Amendments.--Section 1862(a) (42 U.S.C. 1395y(a)) is 
amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (H), by striking ``and'' at the 
                end;
                    (B) in subparagraph (I), by striking the semicolon 
                at the end and inserting ``, and''; and
                    (C) by adding at the end the following new 
                subparagraph:
            ``(J) in the case of glaucoma detection tests (as defined 
        in section 1861(vv)), which are furnished to an individual not 
        described in paragraph (2) of section 1834(m) or which are 
        performed more frequently than is covered under paragraph (3) 
        of such section;''; and
            (2) in paragraph (7), by striking ``or (H)'' and inserting 
        ``(H), or (I)''.
    (e) Effective Date.--The amendments made by this section apply to 
tests provided on or after July 1, 2001.

SEC. 234. MEDICAL NUTRITION THERAPY SERVICES FOR BENEFICIARIES WITH 
              DIABETES, A CARDIOVASCULAR DISEASE, OR A RENAL DISEASE.

    (a) Coverage.--Section 1861(s)(2) (42 U.S.C. 1395x(s)(2)), as 
amended by section 233(a), is amended--
            (1) in subparagraph (U) by striking ``and'' at the end;
            (2) in subparagraph (V) by inserting ``and'' at the end; 
        and
            (3) by adding at the end the following new subparagraph:
            ``(W) medical nutrition therapy services (as defined in 
        subsection (ww)(1)) in the case of a beneficiary with diabetes, 
        a cardiovascular disease (including congestive heart failure, 
        arteriosclerosis, hyperlipidemia, hypertension, and 
        hypercholester-olemia), or a renal disease;''.
    (b) Services Described.--Section 1861 (42 U.S.C. 1395x), as amended 
by section 233(a), is amended by adding at the end the following new 
subsection:

``Medical Nutrition Therapy Services; Registered Dietitian or Nutrition 
                              Professional

    ``(ww)(1) 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 subsection 
(r)(1)).
    ``(2) Subject to paragraph (3), the term `registered dietitian or 
nutrition professional' means an individual who--
            ``(A) 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;
            ``(B) has completed at least 900 hours of supervised 
        dietetics practice under the supervision of a registered 
        dietitian or nutrition professional; and
            ``(C)(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 that does 
        not provide for such licensure or certification, meets such 
        other criteria as the Secretary establishes.
    ``(3) Subparagraphs (A) and (B) of paragraph (2) shall not apply in 
the case of an individual who, as of the date of enactment of this 
subsection, is licensed or certified as a dietitian or nutrition 
professional by the State in which medical nutrition therapy services 
are performed.''.
    (c) Payment.--Section 1833(a)(1) (42 U.S.C. 1395l(a)(1)), as 
amended by section 232(c)(1), is amended--
            (1) by striking ``and'' before ``(U)''; and
            (2) by inserting before the semicolon at the end the 
        following: ``, and (V) with respect to medical nutrition 
        therapy services (as defined in section 1861(ww)), the amount 
        paid shall be 85 percent of the lesser of the actual charge for 
        the services or the amount determined under the fee schedule 
        established under section 1848(b) for the same services if 
        furnished by a physician''.
    (d) Effective Date.--The amendments made by this section apply to 
services furnished on or after July 1, 2001.

SEC. 235. STUDIES ON PREVENTIVE INTERVENTIONS IN PRIMARY CARE FOR OLDER 
              AMERICANS.

    (a) Studies.--The Secretary of Health and Human Services, acting 
through the United States Preventive Services Task Force, shall conduct 
a series of studies designed to identify preventive interventions that 
can be delivered in the primary care setting that are most valuable to 
older Americans.
    (b) Mission Statement.--The mission statement of the United States 
Preventive Services Task Force is amended to include the evaluation of 
services that are of particular relevance to older Americans.
    (c) Report.--Not later than 1 year after the date of enactment of 
this Act, and annually thereafter, the Secretary of Health and Human 
Services shall submit a report to Congress on the conclusions of the 
studies conducted under subsection (a), together with recommendations 
for such legislation and administrative actions as the Secretary 
considers appropriate.

SEC. 236. INSTITUTE OF MEDICINE 5-YEAR MEDICARE PREVENTION BENEFIT 
              STUDY AND REPORT.

    (a) Study.--
            (1) In general.--The Secretary of Health and Human Services 
        shall contract with the Institute of Medicine of the National 
        Academy of Sciences to conduct a comprehensive study of current 
        literature and best practices in the field of health promotion 
        and disease prevention among medicare beneficiaries including 
        the issues described in paragraph (2) and to submit the report 
        described in subsection (b).
            (2) Issues studied.--The study required under paragraph (1) 
        shall include an assessment of--
                    (A) whether each covered benefit is--
                            (i) medically effective; and
                            (ii) a cost-effective benefit or a cost-
                        saving benefit;
                    (B) utilization of covered benefits (including any 
                barriers to or incentives to increase utilization); and
                    (C) quality of life issues associated with both 
                health promotion and disease prevention benefits 
                covered under the medicare program and those that are 
                not covered under such program that would affect all 
                medicare beneficiaries.
    (b) Report.--
            (1) In general.--Not later than 5 years after the date of 
        enactment of this section, and every fifth year thereafter, the 
        Institute of Medicine of the National Academy of Sciences shall 
        submit to the President a report that contains a detailed 
        statement of the findings and conclusions of the study 
        conducted under subsection (a) and the recommendations for 
        legislation described in paragraph (2).
            (2) Recommendations for legislation.--The Institute of 
        Medicine of the National Academy of Sciences, in consultation 
        with the Partnership for Prevention, shall develop 
        recommendations in legislative form that--
                    (A) prioritize the preventive benefits under the 
                medicare program; and
                    (B) modify preventive benefits offered under the 
                medicare program based on the study conducted under 
                subsection (a).
    (c) Transmission to Congress.--
            (1) In general.--On the day on which the report described 
        in subsection (b) is submitted to the President, the President 
        shall transmit the report and recommendations in legislative 
        form described in subsection (b)(2) to Congress.
            (2) Delivery.--Copies of the report and recommendations in 
        legislative form required to be transmitted to Congress under 
        paragraph (1) shall be delivered--
                    (A) to both Houses of Congress on the same day;
                    (B) to the Clerk of the House of Representatives if 
                the House is not in session; and
                    (C) to the Secretary of the Senate if the Senate is 
                not in session.
    (d) Definitions.--In this section:
            (1) Cost-effective benefit.--The term ``cost-effective 
        benefit'' means a benefit or technique that has--
                    (A) been subject to peer review;
                    (B) been described in scientific journals; and
                    (C) demonstrated value as measured by unit costs 
                relative to health outcomes achieved.
            (2) Cost-saving benefit.--The term ``cost-saving benefit'' 
        means a benefit or technique that has--
                    (A) been subject to peer review;
                    (B) been described in scientific journals; and
                    (C) caused a net reduction in health care costs for 
                medicare beneficiaries.
            (3) Medically effective.--The term ``medically effective'' 
        means, with respect to a benefit or technique, that the benefit 
        or technique has been--
                    (A) subject to peer review;
                    (B) described in scientific journals; and
                    (C) determined to achieve an intended goal under 
                normal programmatic conditions.
            (4) Medicare beneficiary.--The term ``medicare 
        beneficiary'' means any individual who is entitled to benefits 
        under part A or enrolled under part B of the medicare program, 
        including any individual enrolled in a Medicare+Choice plan 
        offered by a Medicare+Choice organization under part C of such 
        program.
            (5) Medicare program.--The term ``medicare program'' means 
        the health benefits program under title XVIII of the Social 
        Security Act (42 U.S.C. 1395 et seq.).

SEC. 237. FAST-TRACK CONSIDERATION OF PREVENTION BENEFIT LEGISLATION.

    (a) Rules of House of Representatives and Senate.--This section is 
enacted by Congress--
            (1) as an exercise of the rulemaking power of the House of 
        Representatives and the Senate, respectively, and is deemed a 
        part of the rules of each House of Congress, but--
                    (A) is applicable only with respect to the 
                procedure to be followed in that House of Congress in 
                the case of an implementing bill (as defined in 
                subsection (d)); and
                    (B) supersedes other rules only to the extent that 
                such rules are inconsistent with this section; and
            (2) with full recognition of the constitutional right of 
        either House of Congress to change the rules (so far as 
        relating to the procedure of that House of Congress) at any 
        time, in the same manner and to the same extent as in the case 
        of any other rule of that House of Congress.
    (b) Introduction and Referral.--
            (1) Introduction.--
                    (A) In general.--Subject to paragraph (2), on the 
                day on which the President transmits the report 
                pursuant to section 236(c) to the House of 
                Representatives and the Senate, the recommendations in 
                legislative form transmitted by the President with 
                respect to such report shall be introduced as a bill 
                (by request) in the following manner:
                            (i) House of representatives.--In the House 
                        of Representatives, by the Majority Leader, for 
                        himself and the Minority Leader, or by Members 
                        of the House of Representatives designated by 
                        the Majority Leader and Minority Leader.
                            (ii) Senate.--In the Senate, by the 
                        Majority Leader, for himself and the Minority 
                        Leader, or by Members of the Senate designated 
                        by the Majority Leader and Minority Leader.
                    (B) Special rule.--If either House of Congress is 
                not in session on the day on which such recommendations 
                in legislative form are transmitted, the 
                recommendations in legislative form shall be introduced 
                as a bill in that House of Congress, as provided in 
                subparagraph (A), on the first day thereafter on which 
                that House of Congress is in session.
            (2) Referral.--Such bills shall be referred by the 
        presiding officers of the respective Houses to the appropriate 
        committee, or, in the case of a bill containing provisions 
        within the jurisdiction of 2 or more committees, jointly to 
        such committees for consideration of those provisions within 
        their respective jurisdictions.
    (c) Consideration.--After the recommendations in legislative form 
have been introduced as a bill and referred under subsection (b), such 
implementing bill shall be considered in the same manner as an 
implementing bill is considered under subsections (d), (e), (f), and 
(g) of section 151 of the Trade Act of 1974 (19 U.S.C. 2191).
    (d) Implementing Bill Defined.--In this section, the term 
``implementing bill'' means only the recommendations in legislative 
form of the Institute of Medicine of the National Academy of Sciences 
described in section 236(b)(2), transmitted by the President to the 
House of Representatives and the Senate under section 236(c), and 
introduced and referred as provided in subsection (b) as a bill of 
either House of Congress.
    (e) Counting of Days.--For purposes of this section, any period of 
days referred to in section 151 of the Trade Act of 1974 shall be 
computed by excluding--
            (1) the days on which either House of Congress is not in 
        session because of an adjournment of more than 3 days to a day 
        certain or an adjournment of Congress sine die; and
            (2) any Saturday and Sunday, not excluded under paragraph 
        (1), when either House is not in session.

                       Subtitle E--Other Services

SEC. 241. REVISION OF MORATORIUM IN CAPS FOR THERAPY SERVICES.

    (a) Extension of Moratorium.--Section 1833(g)(4) (42 U.S.C. 
1395l(g)(4)) is amended by striking ``during 2000 and 2001'' and 
inserting ``during the period beginning on January 1, 2000, and ending 
on the date that is 18 months after the date the Secretary submits the 
report required under section 4541(d)(2) of the Balanced Budget Act of 
1997 to Congress''.
    (b) Extension of Reporting Date.--Section 4541(d)(2) of BBA (42 
U.S.C. 1395l note), as amended by section 221(c) of BBRA (113 Stat. 
1501A-351), is amended by striking ``January 1, 2001'' and inserting 
``January 1, 2002''.

SEC. 242. REVISION OF COVERAGE OF IMMUNOSUPPRESSIVE DRUGS.

    (a) Revision.--
            (1) In general.--Section 1861(s)(2)(J) (42 U.S.C. 
        1395x(s)(2)(J)) is amended to read as follows:
            ``(J) prescription drugs used in immunosuppressive therapy 
        furnished--
                    ``(i) on or after the date of enactment of the 
                Medicare, Medicaid, and SCHIP Balanced Budget 
                Refinement Act of 2000 and before January 1, 2004, to 
                an individual who has received an organ transplant; and
                    ``(ii) on or after January 1, 2004, to an 
                individual who receives an organ transplant for which 
                payment is made under this title, but only in the case 
                of drugs furnished within 36 months after the date of 
                the transplant procedure.''.
            (2) Conforming amendments.--
                    (A) Extended coverage.--Section 1832 (42 U.S.C. 
                1395k) is amended--
                            (i) by striking subsection (b); and
                            (ii) by redesignating subsection (c) as 
                        subsection (b).
                    (B) Pass-through; report.--Subsections (c) and (d) 
                of section 227 of BBRA (113 Stat. 1501A-355) are 
                repealed.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to drugs furnished on or after the date of 
        enactment of this Act.
    (b) Extension of Certain Secondary Payer Requirements.--Section 
1862(b)(1)(C) (42 U.S.C. 1395y(b)(1)(C)) is amended by adding at the 
end the following: ``With regard to immunosuppressive drugs furnished 
on or after the date of enactment of the Medicare, Medicaid, and SCHIP 
Balanced Budget Refinement Act of 2000 and before January 1, 2004, this 
subparagraph shall be applied without regard to any time limitation.''.

SEC. 243. STATE ACCREDITATION OF DIABETES SELF-MANAGEMENT TRAINING 
              PROGRAMS.

    Section 1861(qq)(2) of the Social Security Act (42 U.S.C. 
1395xx(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 new clause:
            ``(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. 244. ELIMINATION OF REDUCTION IN PAYMENT AMOUNTS FOR DURABLE 
              MEDICAL EQUIPMENT AND OXYGEN AND OXYGEN EQUIPMENT.

    (a) Update for Covered Items.--Section 1834(a)(14)(C) (42 U.S.C. 
1395m(a)(14)(C)) is amended by striking ``through 2002'' and inserting 
``through 2000''.
    (b) Orthotics and Prosthetics.--Section 1834(h)(4)(A)(v) (42 U.S.C. 
1395m(h)(4)(A)(v)) is amended by striking ``through 2002'' and 
inserting ``through 2000''.
    (c) Parenteral and Enteral Nutrients, Supplies, and Equipment.--
Section 4551(b) of BBA (42 U.S.C. 1395m note) is amended by striking 
``through 2002'' and inserting ``through 2000''.
    (d) Oxygen and Oxygen Equipment.--Section 1834(a)(9)(B) (42 U.S.C. 
1395m(a)(9)(B)) is amended--
            (1) in clause (v), by striking ``and'' at the end;
            (2) in clause (vi)--
                    (A) by striking ``each subsequent year'' and 
                inserting ``2000''; and
                    (B) by striking the period at the end and inserting 
                ``; and''; and
            (3) by adding at the end the following new clause:
                            ``(vii) for 2001 and each subsequent year, 
                        the amount determined under this subparagraph 
                        for the preceding year increased by the covered 
                        item update for such subsequent year.''.
    (e) Conforming Amendment.--Section 228 of BBRA (113 Stat. 1501A-
356) is repealed.

SEC. 245. STANDARDS REGARDING PAYMENT FOR CERTAIN ORTHOTICS AND 
              PROSTHETICS.

    (a) Standards.--
            (1) In general.--Section 1834(h)(1) (42 U.S.C. 1395m(h)(1)) 
        is amended by adding at the end the following:
                    ``(F) Establishment of standards for certain 
                items.--
                            ``(i) In general.--No payment shall be made 
                        for an applicable item unless such item is 
                        provided by a qualified practitioner or a 
                        qualified supplier under the system established 
                        by the Secretary under clause (iii). For 
                        purposes of the preceding sentence, if a 
                        qualified practitioner or a qualified supplier 
                        contracts with an entity to provide an 
                        applicable item, then no payment shall be made 
                        for such item unless the entity is also a 
                        qualified supplier.
                            ``(ii) Definitions.--In this subparagraph--
                                    ``(I) Applicable item.--The term 
                                `applicable item' means orthotics and 
                                prosthetics that require education, 
                                training, and experience to custom 
                                fabricate such item. Such term does not 
                                include shoes and shoe inserts.
                                    ``(II) Qualified practitioner.--The 
                                term `qualified practitioner' means a 
                                physician or health professional who 
                                meets any of the following 
                                requirements:
                                            ``(aa) The physician or 
                                        health professional is 
                                        specifically trained and 
                                        educated to provide or manage 
                                        the provision of custom-
                                        designed, fabricated, modified, 
                                        and fitted orthotics and 
                                        prosthetics, and is either 
                                        certified by the American Board 
                                        for Certification in Orthotics 
                                        and Prosthetics, Inc., 
                                        certified by the Board for 
                                        Orthotist/Prosthetist 
                                        Certification, or credentialed 
                                        and approved by a program that 
                                        the Secretary determines, in 
                                        consultation with appropriate 
                                        experts in orthotics and 
                                        prosthetics, has training and 
                                        education standards that are 
                                        necessary to provide applicable 
                                        items.
                                            ``(bb) The physician or 
                                        health professional is licensed 
                                        in orthotics or prosthetics by 
                                        the State in which the 
                                        applicable item is supplied, 
                                        but only if the Secretary 
                                        determines that the mechanisms 
                                        used by the State to provide 
                                        such licensure meet standards 
                                        determined appropriate by the 
                                        Secretary.
                                            ``(cc) The physician or 
                                        health professional has 
                                        completed at least 10 years 
                                        practice in the provision of 
                                        applicable items. A physician 
                                        or health professional may not 
                                        qualify as a qualified 
                                        practitioner under the 
                                        preceding sentence with respect 
                                        to an applicable item if the 
                                        item was provided on or after 
                                        January 1, 2005.
                                    ``(III) Qualified supplier.--The 
                                term `qualified supplier' means any 
                                entity that is--
                                            ``(aa) accredited by the 
                                        American Board for 
                                        Certification in Orthotics and 
                                        Prosthetics, Inc. or the Board 
                                        for Orthotist/Prosthetist 
                                        Certification; or
                                            ``(bb) accredited and 
                                        approved by a program that the 
                                        Secretary determines has 
                                        accreditation and approval 
                                        standards that are essentially 
                                        equivalent to those of such 
                                        Board.
                            ``(iii) System.--The Secretary, in 
                        consultation with appropriate experts in 
                        orthotics and prosthetics, shall establish a 
                        system under which the Secretary shall--
                                    ``(I) determine which items are 
                                applicable items and formulate a list 
                                of such items;
                                    ``(II) review the applicable items 
                                billed under the coding system 
                                established under this title; and
                                    ``(III) limit payment for 
                                applicable items pursuant to clause 
                                (i).''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to items provided on or after January 1, 2003.
    (b) Revision of Definition of Orthotics.--
            (1) In general.--Section 1861(s)(9) (42 U.S.C. 1395x(s)(9)) 
        is amended by inserting ``(including such braces that are used 
        in conjunction with, or as components of, other medical or non-
        medical equipment when provided by a qualified practitioner (as 
        defined in subclause (II) of section 1834(h)(1)(F))) or a 
        qualified supplier (as defined in subclause (III) of such 
        section)'' after ``braces''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to items provided on or after January 1, 2003.

SEC. 246. NATIONAL LIMITATION AMOUNT EQUAL TO 100 PERCENT OF NATIONAL 
              MEDIAN FOR NEW PAP SMEAR TECHNOLOGIES AND OTHER NEW 
              CLINICAL LABORATORY TEST TECHNOLOGIES.

    Section 1833(h)(4)(B)(viii) (42 U.S.C. 1395l(h)(4)(B)(viii)) is 
amended by inserting before the period at the end 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)''.

SEC. 247. INCREASED MEDICARE PAYMENTS FOR CERTIFIED NURSE-MIDWIFE 
              SERVICES.

    (a) Amount of Payment.--Section 1833(a)(1)(K) (42 U.S.C. 
1395l(a)(1)(K)) is amended by striking ``65 percent of the prevailing 
charge that would be allowed for the same service performed by a 
physician, or, for services furnished on or after January 1, 1992, 65 
percent'' and inserting ``85 percent''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to services furnished on or after January 1, 2001.

SEC. 248. PAYMENT FOR ADMINISTRATION OF DRUGS.

    (a) Review of Chemotherapy Administration Practice Expenses RVUs.--
The Secretary of Health and Human Services shall review the resource-
based practice expense component of relative value units under the 
physician fee schedule under section 1848 of the Social Security Act 
(42 U.S.C. 1395w-4) for chemotherapy administration services to 
determine if such units should be increased.
    (b) More Accurate Chemotherapy Drug Payments Tied to Increases in 
Chemotherapy Administration Payments.--If the Secretary of Health and 
Human Services determines, as a result of the review under subsection 
(a), that the resource-based practice expense relative value units for 
chemotherapy administration services should be increased, the 
Secretary--
            (1) may implement such increases for such services, but 
        only if the Secretary simultaneously implements more accurate 
        average wholesale prices for chemotherapy drugs (but in no case 
        shall such simultaneous implementation occur prior to January 
        1, 2002); and
            (2) if the Secretary implements such increases for such 
        services, shall do so without taking into account the 
        requirement under the physician fee schedule under section 
        1848(c)(2)(B)(ii)(II) of the Social Security Act (42 U.S.C. 
        1395w-4(c)(2)(B)(ii)(II)).
    (c) Blood Clotting Drug-Related Activities.--
            (1) Coverage.--Section 1861(s)(2)(I) (42 U.S.C. 
        1395x(s)(2)(I)) is amended--
                    (A) by striking ``and'' after ``supervision,''; and
                    (B) by inserting the following before the 
                semicolon: ``, and the costs (pursuant to section 
                1834(n)) incurred by suppliers of such factors''.
            (2) Payments.--Section 1834 (42 U.S.C. 1395m), as amended 
        by section 233(b), is amended by adding at the end the 
        following new subsection:
    ``(n) Payment for Blood Clotting Drug-Related Activities.--
            ``(1) In general.--The Secretary shall make payments in 
        accordance with paragraph (2) to suppliers of blood clotting 
        factors (as described in section 1861(s)(2)(I)) to cover the 
        costs (such as shipping, storage, inventory control, or other 
        costs specified by the Secretary) incurred by such suppliers in 
        furnishing such factors to individuals enrolled under this 
        part.
            ``(2) Payment amount.--The amount of payment for furnishing 
        such blood clotting factors (as so described) shall be an 
        amount equal to 80 percent of the lesser of--
                    ``(A) the actual charge for the furnishing of such 
                factors; or
                    ``(B) an amount equal to 10 cents (or such other 
                amount determined appropriate by the Secretary) per 
                unit of such factor furnished.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to blood clotting factors (as described in section 
        1861(s)(2)(I) of the Social Security Act (42 U.S.C. 
        1395x(s)(2)(I))) furnished on or after the date that the 
        Secretary of Health and Human Services implements more accurate 
        average wholesale prices for such factors.

SEC. 249. MEDPAC STUDY ON IN-HOME INFUSION THERAPY NURSING SERVICES.

    (a) Study.--The Medicare Payment Advisory Commission established 
under section 1805 of the Social Security Act (42 U.S.C. 1395b-6) (in 
this section referred to as ``MedPAC'') shall conduct a study on the 
provision of in-home infusion therapy nursing services, including a 
review of any documentation of clinical efficacy for those services and 
any costs associated with providing those services.
    (b) Report.--Not later than 18 months after the date of enactment 
of this Act, MedPAC shall submit a report to the Secretary of Health 
and Human Services and Congress on the study and review conducted under 
subsection (a) together with recommendations regarding the 
establishment of a payment methodology for in-home infusion therapy 
nursing services that ensures the continuing access of beneficiaries 
under the medicare program under title XVIII of the Social Security Act 
(42 U.S.C. 1395 et seq.) to those services.

            TITLE III--PROVISIONS RELATING TO PARTS A AND B

                    Subtitle A--Home Health Services

SEC. 301. ELIMINATION OF 15 PERCENT REDUCTION IN PAYMENT RATES UNDER 
              THE PROSPECTIVE PAYMENT SYSTEM FOR HOME HEALTH SERVICES.

    (a) In General.--Section 1895(b)(3)(A) (42 U.S.C. 1395fff(b)(3)(A)) 
is amended to read as follows:
                    ``(A) Initial basis.--Under such system the 
                Secretary shall provide for computation of a standard 
                prospective payment amount (or amounts). Such amount 
                (or amounts) shall initially be based on the most 
                current audited cost report data available to the 
                Secretary and shall be computed in a manner so that the 
                total amounts payable under the system for the 12-month 
                period beginning on the date the Secretary implements 
                the system shall be equal to the total amount that 
                would have been made if the system had not been in 
                effect and if section 1861(v)(1)(L)(ix) had not been 
                enacted. Each such amount shall be standardized in a 
                manner that eliminates the effect of variations in 
                relative case mix and area wage adjustments among 
                different home health agencies in a budget neutral 
                manner consistent with the case mix and wage level 
                adjustments provided under paragraph (4)(A). Under the 
                system, the Secretary may recognize regional 
                differences or differences based upon whether or not 
                the services or agency are in an urbanized area.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect as if included in the enactment of BBRA.

SEC. 302. EXCLUSION OF CERTAIN NONROUTINE MEDICAL SUPPLIES UNDER THE 
              PPS FOR HOME HEALTH SERVICES.

    (a) Exclusion.--
            (1) In general.--Section 1895 (42 U.S.C. 1395fff) is 
        amended by adding at the end the following new subsection:
    ``(e) Exclusion of Nonroutine Medical Supplies.--
            ``(1) In general.--Notwithstanding the preceding provisions 
        of this section, in the case of all nonroutine medical supplies 
        (as defined by the Secretary) furnished by a home health agency 
        during a year (beginning with 2001) for which payment is 
        otherwise made on the basis of the prospective payment amount 
        under this section, payment under this section shall be based 
        instead on the lesser of--
                    ``(A) the actual charge for the nonroutine medical 
                supply; or
                    ``(B) the amount determined under the fee schedule 
                established by the Secretary for purposes of making 
                payment for such items under part B for nonroutine 
                medical supplies furnished during that year.
            ``(2) Budget neutrality adjustment.--The Secretary shall 
        provide for an appropriate proportional reduction in payments 
        under this section so that beginning with fiscal year 2001, the 
        aggregate amount of such reductions is equal to the aggregate 
        increase in payments attributable to the exclusion effected 
        under paragraph (1).''.
            (2) Conforming amendment.--Section 1895(b)(1) of the Social 
        Security Act (42 U.S.C. 1395fff(b)(1)) is amended by striking 
        ``The Secretary'' and inserting ``Subject to subsection (e), 
        the Secretary''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to supplies furnished on or after January 1, 2001.
    (b) Exclusion from Consolidated Billing.--
            (1) In general.--For items provided during the applicable 
        period, the Secretary of Health and Human Services shall 
        administer the medicare program under title XVIII of the Social 
        Security Act (42 U.S.C. 1395 et seq.) as if--
                    (A) section 1842(b)(6)(F) of such Act (42 U.S.C. 
                1395u(b)(6)(F)) was amended by striking ``(including 
                medical supplies described in section 1861(m)(5), but 
                excluding durable medical equipment to the extent 
                provided for in such section)'' and inserting 
                ``(excluding medical supplies and durable medical 
                equipment described in section 1861(m)(5))''; and
                    (B) section 1862(a)(21) of such Act (42 U.S.C. 
                1395y(a)(21)) was amended by striking ``(including 
                medical supplies described in section 1861(m)(5), but 
                excluding durable medical equipment to the extent 
                provided for in such section)'' and inserting 
                ``(excluding medical supplies and durable medical 
                equipment described in section 1861(m)(5))''.
            (2) Applicable period defined.--For purposes of paragraph 
        (1), the term ``applicable period'' means the period beginning 
        on January 1, 2001, and ending on the later of--
                    (A) the date that is 18 months after the date of 
                enactment of this Act; or
                    (B) the date determined appropriate by the 
                Secretary of Health and Human Services.
    (c) Study on Exclusion of Certain Nonroutine Medical Supplies Under 
the PPS for Home Health Services.--
            (1) Study.--The Secretary of Health and Human Services (in 
        this subsection referred to as the ``Secretary'') shall conduct 
        a study to identify any nonroutine medical supply that may be 
        appropriately and cost-effectively excluded from the 
        prospective payment system for home health services under 
        section 1895 of the Social Security Act (42 U.S.C. 1395fff). 
        Specifically, the Secretary shall consider whether wound care 
        and ostomy supplies should be excluded from such prospective 
        payment system.
            (2) Report.--Not later than 18 months after the date of 
        enactment of this Act, the Secretary shall submit to the 
        committees of jurisdiction of the House of Representatives and 
        the Senate a report on the study conducted under paragraph (1), 
        including a list of any nonroutine medical supplies that should 
        be excluded from the prospective payment system for home health 
        services under section 1895 of the Social Security Act (42 
        U.S.C. 1395fff).
    (d) Exclusion of Other Nonroutine Medical Supplies.--Upon 
submission of the report under subsection (c)(2), the Secretary shall 
(if necessary) revise the definition of nonroutine medical supply, as 
defined for purposes of section 1895(e) (as added by subsection (a)), 
based on the list of nonroutine medical supplies included in such 
report.

SEC. 303. PERMITTING HOME HEALTH PATIENTS WITH ALZHEIMER'S DISEASE OR A 
              RELATED DEMENTIA TO ATTEND ADULT DAY-CARE.

    (a) In General.--Sections 1814(a) and 1835(a) of the Social 
Security Act (42 U.S.C. 1395f(a); 1395n(a)) are each amended in the 
last sentence by inserting ``(including regularly participating, for 
the purpose of therapeutic treatment for Alzheimer's disease or a 
related dementia, in an adult day-care program that is licensed, 
certified, or accredited by a State to furnish adult day-care services 
in the State)'' before the period.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to items and services provided on or after October 1, 2001.

SEC. 304. STANDARDS FOR HOME HEALTH BRANCH OFFICES.

    (a) In General.--Section 1861(o) (42 U.S.C. 1395x(o)) is amended by 
adding at the end the following new sentences: ``For purposes of this 
subsection, a home health agency may provide services through a single 
site or through a branch office. For purposes of the preceding 
sentence, the term `branch office' means a service site for home health 
services that is controlled and supervised by a home health agency.''.
    (b) Establishment of Standards.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this subsection referred to as the ``Secretary'') shall 
        establish, using a negotiated rulemaking process under 
        subchapter III of chapter 5 of title 5, United States Code, 
        standards for the operation of a branch office (as defined in 
        the last sentence of section 1861(o) of the Social Security Act 
        (42 U.S.C. 1395x(o)), as added by subsection (a)).
            (2) Requirements.--In establishing standards under 
        paragraph (1), the Secretary shall--
                    (A) provide for the special treatment of any home 
                health agency or branch office--
                            (i) that is located in a frontier area; or
                            (ii) with any other special circumstance 
                        that the Secretary determines is appropriate; 
                        and
                    (B) allow the use of technology used by the home 
                health agency to supervise the branch office.
            (3) Consultation.--The Secretary shall establish the 
        regulations under this subsection in consultation with 
        representatives of the home health industry.

SEC. 305. TREATMENT OF HOME HEALTH SERVICES PROVIDED IN CERTAIN 
              COUNTIES.

    (a) In General.--Notwithstanding any other provision of law, 
effective for home health services provided under the prospective 
payment system under section 1895 of the Social Security Act (42 U.S.C. 
1395fff) during fiscal year 2001 in an applicable county, the 
geographic adjustment factors applicable in such year to hospitals 
physically located in such county under section 1886(d) of such Act (42 
U.S.C. 1395ww(d)) (including the factors applicable to such hospitals 
by reason of any reclassification or deemed reclassification) shall be 
deemed to apply to such services instead of the area wage adjustment 
factors that would otherwise be applicable to such services under 
section 1895(b)(4)(C) of such Act (42 U.S.C. 1395fff(b)(4)(C)).
    (b) Applicable County Defined.--For purposes of subsection (a), the 
term ``applicable county'' means any of the following counties:
            (1) Duchess County, New York.
            (2) Orange County, New York.
            (3) Clinton County, New York.
            (4) Ulster County, New York.
            (5) Otsego County, New York.
            (6) Cayuga County, New York.
            (7) St. Jefferson County, New York.

             Subtitle B--Direct Graduate Medical Education

SEC. 311. NOT COUNTING CERTAIN GERIATRIC RESIDENTS AGAINST GRADUATE 
              MEDICAL EDUCATION LIMITATIONS.

    For cost reporting periods beginning on or after October 1, 2000, 
and before October 1, 2005, in applying the limitations regarding the 
total number of full-time equivalent interns and residents in the field 
of allopathic or osteopathic medicine under subsections 
(d)(5)(B)(v) and (h)(4)(F) of section 1886 of the Social Security Act 
(42 U.S.C. 1395ww) for a hospital, the Secretary of Health and Human 
Services shall not take into account a maximum of 3 interns or 
residents in the field of geriatric medicine to the extent the hospital 
increases the number of geriatric interns or residents above the number 
of such interns or residents for the hospital's most recent cost 
reporting period ending before October 1, 2000.

SEC. 312. PROGRAM OF PAYMENTS TO CHILDREN'S HOSPITALS THAT OPERATE 
              GRADUATE MEDICAL EDUCATION PROGRAMS.

    Part A of title XI (42 U.S.C. 1301 et seq.) is amended by adding 
after section 1150 the following new section:

  ``program of payments to children's hospitals that operate graduate 
                       medical education programs

    ``Sec. 1150A. (a) Payments.--The Secretary shall make 2 payments 
under this section to each children's hospital for each of fiscal years 
2002 through 2005, 1 for the direct expenses and the other for the 
indirect expenses associated with operating approved graduate medical 
residency training programs.
    ``(b) Amount of Payments.--
            ``(1) In general.--Subject to paragraph (2), the amounts 
        payable under this section to a children's hospital for an 
        approved graduate medical residency training program for a 
        fiscal year are each of the following amounts:
                    ``(A) Direct expense amount.--The amount determined 
                under subsection (c) for direct expenses associated 
                with operating approved graduate medical residency 
                training programs.
                    ``(B) Indirect expense amount.--The amount 
                determined under subsection (d) for indirect expenses 
                associated with the treatment of more severely ill 
                patients and the additional costs relating to teaching 
                residents in such programs.
            ``(2) Capped amount.--
                    ``(A) In general.--The total of the payments made 
                to children's hospitals under subparagraph (A) or (B) 
                of paragraph (1) in a fiscal year shall not exceed the 
                funds appropriated under paragraph (1) or (2), 
                respectively, of subsection (f) for such payments for 
                that fiscal year.
                    ``(B) Pro rata reductions of payments for direct 
                expenses.--If the Secretary determines that the amount 
                of funds appropriated under subsection (f)(1) for a 
                fiscal year is insufficient to provide the total amount 
                of payments otherwise due for such periods under 
                paragraph (1)(A), the Secretary shall reduce the 
                amounts so payable on a pro rata basis to reflect such 
                shortfall.
    ``(c) Amount of Payment for Direct Graduate Medical Education.--
            ``(1) In general.--The amount determined under this 
        subsection for payments to a children's hospital for direct 
        graduate expenses relating to approved graduate medical 
        residency training programs for a fiscal year is equal to the 
        product of--
                    ``(A) the updated per resident amount for direct 
                graduate medical education, as determined under 
                paragraph (2); and
                    ``(B) the average number of full-time equivalent 
                residents in the hospital's graduate approved medical 
                residency training programs (as determined under 
                section 1886(h)(4)) during the fiscal year.
            ``(2) Updated per resident amount for direct graduate 
        medical education.--The updated per resident amount for direct 
        graduate medical education for a hospital for a fiscal year is 
        an amount determined as follows:
                    ``(A) Determination of hospital single per resident 
                amount.--The Secretary shall compute for each hospital 
                operating an approved graduate medical education 
                program (regardless of whether or not it is a 
                children's hospital) a single per resident amount equal 
                to the average (weighted by number of full-time 
                equivalent residents) of the primary care per resident 
                amount and the non-primary care per resident amount 
                computed under section 1886(h)(2) for cost reporting 
                periods ending during fiscal year 1997.
                    ``(B) Determination of wage and non-wage-related 
                proportion of the single per resident amount.--The 
                Secretary shall estimate the average proportion of the 
                single per resident amounts computed under subparagraph 
                (A) that is attributable to wages and wage-related 
                costs.
                    ``(C) Standardizing per resident amounts.--The 
                Secretary shall establish a standardized per resident 
                amount for each such hospital--
                            ``(i) by dividing the single per resident 
                        amount computed under subparagraph (A) into a 
                        wage-related portion and a non-wage-related 
                        portion by applying the proportion determined 
                        under subparagraph (B);
                            ``(ii) by dividing the wage-related portion 
                        by the factor applied under section 
                        1886(d)(3)(E) for discharges occurring during 
                        fiscal year 1999 for the hospital's area; and
                            ``(iii) by adding the non-wage-related 
                        portion to the amount computed under clause 
                        (ii).
                    ``(D) Determination of national average.--The 
                Secretary shall compute a national average per resident 
                amount equal to the average of the standardized per 
                resident amounts computed under subparagraph (C) for 
                such hospitals, with the amount for each hospital 
                weighted by the average number of full-time equivalent 
                residents at such hospital.
                    ``(E) Application to individual hospitals.--The 
                Secretary shall compute for each such hospital that is 
                a children's hospital a per resident amount--
                            ``(i) by dividing the national average per 
                        resident amount computed under subparagraph (D) 
                        into a wage-related portion and a non-wage-
                        related portion by applying the proportion 
                        determined under subparagraph (B);
                            ``(ii) by multiplying the wage-related 
                        portion by the factor described in subparagraph 
                        (C)(ii) for the hospital's area; and
                            ``(iii) by adding the non-wage-related 
                        portion to the amount computed under clause 
                        (ii).
                    ``(F) Updating rate.--The Secretary shall update 
                such per resident amount for each such children's 
                hospital by the estimated percentage increase in the 
                Consumer Price Index for all urban consumers (U.S. city 
                average) during the period beginning October 1997, and 
                ending with the midpoint of the Federal fiscal year for 
                which payments are made.
    ``(d) Amount of Payment for Indirect Medical Education.--
            ``(1) In general.--The amount determined under this 
        subsection for payments to a children's hospital for indirect 
        expenses associated with the treatment of more severely ill 
        patients and the additional costs related to the teaching of 
        residents for a fiscal year is equal to an amount determined 
        appropriate by the Secretary.
            ``(2) Factors.--In determining the amount under paragraph 
        (1), the Secretary shall--
                    ``(A) take into account variations in case mix and 
                regional wage levels among children's hospitals and the 
                number of full-time equivalent residents in the 
                hospitals' approved graduate medical residency training 
                programs; and
                    ``(B) assure that the aggregate of the payments for 
                indirect expenses associated with the treatment of more 
                severely ill patients and the additional costs related 
                to the teaching of residents under this section in a 
                fiscal year are equal to the amount appropriated for 
                such expenses for the fiscal year involved under 
                subsection (f)(2).
    ``(e) Making of Payments.--
            ``(1) Interim payments.--The Secretary shall determine, 
        before the beginning of each fiscal year involved for which 
        payments may be made for a hospital under this section, the 
        amounts of the payments for direct graduate medical education 
        and indirect medical education for such fiscal year and shall 
        (subject to paragraph (2)) make the payments of such amounts in 
        26 equal interim installments during such period. Such interim 
        payments to each individual hospital shall be based on the 
        number of residents reported in the hospital's most recently 
        filed medicare cost report prior to the application date for 
        the Federal fiscal year for which the interim payment amounts 
        are established.
            ``(2) Withholding.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                Secretary shall withhold 25 percent from each interim 
                installment for direct and indirect graduate medical 
                education paid under paragraph (1).
                    ``(B) Reduction of withholding.--The Secretary 
                shall reduce the percent withheld from each installment 
                pursuant to subparagraph (A) if the Secretary 
                determines that such reduced percent will provide the 
                Secretary with a reasonable level of assurance that 
                most hospitals will not be overpaid on an interim 
                basis.
            ``(3) Reconciliation.--Prior to the end of each fiscal 
        year, the Secretary shall determine any changes to the number 
        of residents reported by a hospital and shall use that number 
        of residents to determine the final amount payable to the 
        hospital for the current fiscal year for both direct expense 
        and indirect expense amounts. Based on such determination, the 
        Secretary shall recoup any overpayments made or pay any balance 
        due to the extent possible. In the event that a hospital's 
        interim payments were greater than the final amount to which it 
        is entitled, the Secretary shall have the option of recouping 
        that excess amount in determining the amount to be paid in the 
        subsequent year to that hospital. The final amount so 
        determined shall be considered a final intermediary 
        determination for purposes of applying section 1878 and shall 
        be subject to review under that section in the same manner as 
        the amount of payment under section 1886(d) is subject to 
        review under such section.
    ``(f) Authorization of Appropriations.--
            ``(1) Direct graduate medical education.--
                    ``(A) In general.--There are appropriated, out of 
                any money in the Treasury not otherwise appropriated, 
                for payments under subsection (b)(1)(A) for each of 
                fiscal years 2002 through 2005, $95,000,000.
                    ``(B) Carryover of excess.--The amounts 
                appropriated under subparagraph (A) for each fiscal 
                year shall remain available for obligation through the 
                end of the subsequent fiscal year.
            ``(2) Indirect medical education.--There are appropriated, 
        out of any money in the Treasury not otherwise appropriated, 
        for payments under subsection (b)(1)(A) for each of fiscal 
        years 2002 through 2005, $190,000,000.
    ``(g) Definitions.--In this section:
            ``(1) Approved graduate medical residency training 
        program.--The term `approved graduate medical residency 
        training program' has the meaning given the term `approved 
        medical residency training program' in section 1886(h)(5)(A).
            ``(2) Children's hospital.--The term `children's hospital' 
        means a hospital with a medicare payment agreement and which is 
        excluded from the medicare inpatient prospective payment system 
        pursuant to section 1886(d)(1)(B)(iii) and its accompanying 
        regulations.
            ``(3) Direct graduate medical education costs.--The term 
        `direct graduate medical education costs' has the meaning given 
        such term in section 1886(h)(5)(C).''.

SEC. 313. AUTHORITY TO INCLUDE COSTS OF TRAINING OF CLINICAL 
              PSYCHOLOGISTS IN PAYMENTS TO HOSPITALS.

    Effective for cost reporting periods beginning on or after October 
1, 1999, for purposes of payments to hospitals under the medicare 
program under title XVIII of the Social Security Act (42 U.S.C. 1395 et 
seq.) for costs of approved educational activities (as defined in 
section 413.85 of title 42 of the Code of Federal Regulations), such 
approved educational activities shall include the clinical portion of 
professional educational training programs, recognized by the 
Secretary, for clinical psychologists.

SEC. 314. TREATMENT OF CERTAIN NEWLY ESTABLISHED RESIDENCY PROGRAMS IN 
              COMPUTING MEDICARE PAYMENTS FOR THE COSTS OF MEDICAL 
              EDUCATION.

    (a) In General.--Section 1886(h)(4)(H) (42 U.S.C. 1395ww(h)(4)(H)) 
is amended by adding at the end the following new clause:
                            ``(v) Treatment of certain newly 
                        established programs.--Any hospital that has 
                        received payments under this subsection for a 
                        cost reporting period ending before January 1, 
                        1995, and that operates an approved medical 
                        residency training program established on or 
                        after August 5, 1997, shall be treated as 
                        meeting the requirements for an adjustment 
                        under the rules prescribed pursuant to clause 
                        (i) with respect to such program if--
                                    ``(I) such program received 
                                accreditation from the American Council 
                                of Graduate Medical Education not later 
                                than August 5, 1998;
                                    ``(II) such program was in 
                                operation (with 1 or more residents in 
                                training) as of January 1, 2000;
                                    ``(III) such hospital is located in 
                                an area that is contiguous to a rural 
                                area and serves individuals from such 
                                rural area; and
                                    ``(IV) such hospital serves a 
                                medical service area with a population 
                                that is less than 500,000.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect as if included in the enactment of section 4623 of BBA (111 
Stat. 477).

                  Subtitle C--Miscellaneous Provisions

SEC. 321. 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 shall 
apply to benefits for months beginning after the date of enactment of 
this Act.

                  TITLE IV--RURAL PROVIDER PROVISIONS

                 Subtitle A--Critical Access Hospitals

SEC. 401. PAYMENTS TO CRITICAL ACCESS HOSPITALS FOR CLINICAL DIAGNOSTIC 
              LABORATORY TESTS.

    (a) Payment on Cost Basis Without Beneficiary Cost-Sharing.--
            (1) In general.--Section 1833(a)(6) (42 U.S.C. 1395l(a)(6)) 
        is amended by inserting ``(including clinical diagnostic 
        laboratory services furnished by a critical access hospital)'' 
        after ``outpatient critical access hospital services''.
            (2) No beneficiary cost-sharing.--
                    (A) In general.--Section 1834(g) (42 U.S.C. 
                1395m(g)) is amended by inserting ``(except that in the 
                case of clinical diagnostic laboratory services 
                furnished by a critical access hospital the amount of 
                payment shall be equal to 100 percent of the reasonable 
                costs of the critical access hospital in providing such 
                services)'' before the period at the end.
                    (B) BBRA amendment.--Section 1834(g) (42 U.S.C. 
                1395m(g)), as amended by section 403(d) of BBRA (113 
                Stat. 1501A-371), is amended--
                            (i) in paragraph (1), by inserting 
                        ``(except that in the case of clinical 
                        diagnostic laboratory services furnished by a 
                        critical access hospital the amount of payment 
                        shall be equal to 100 percent of the reasonable 
                        costs of the critical access hospital in 
                        providing such services)'' after ``such 
                        services''; and
                            (ii) in paragraph (2)(A), by inserting 
                        ``(except that in the case of clinical 
                        diagnostic laboratory services furnished by a 
                        critical access hospital the amount of payment 
                        shall be equal to 100 percent of the reasonable 
                        costs of the critical access hospital in 
                        providing such services)'' before the period at 
                        the end.
    (b) Conforming Amendments.--Paragraphs (1)(D)(i) and (2)(D)(i) of 
section 1833(a) (42 U.S.C. 1395l(a)(1)(D)(i); 1395l(a)(2)(D)(i)) are 
each amended by striking ``or which are furnished on an outpatient 
basis by a critical access hospital''.
    (c) Technical Amendment.--Section 403(d)(2) of BBRA (113 Stat. 
1501A-371) is amended by striking ``subsection (a)'' and inserting 
``paragraph (1)''.
    (d) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to services 
        furnished on or after November 29, 1999.
            (2) BBRA and technical amendments.--The amendments made by 
        subsections (a)(2)(B) and (c) shall take effect as if included 
        in the enactment of section 403(d) of BBRA (113 Stat. 1501A-
        371).

SEC. 402. REVISION OF PAYMENT FOR PROFESSIONAL SERVICES PROVIDED BY A 
              CRITICAL ACCESS HOSPITAL.

    (a) In General.--Section 1834(g)(2)(B) (42 U.S.C. 1395m(g)(2)(B)), 
as amended by section 403(d) of BBRA (113 Stat. 1501A-371), is amended 
by inserting ``120 percent of'' after ``hospital services,''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect as if included in the enactment of section 403(d) of BBRA 
(113 Stat. 1501A-371).

SEC. 403. PERMITTING CRITICAL ACCESS HOSPITALS TO OPERATE PPS EXEMPT 
              DISTINCT PART PSYCHIATRIC AND REHABILITATION UNITS.

    (a) Criteria for Designation as a Critical Access Hospital.--
Section 1820(c)(2)(B)(iii) (42 U.S.C. 1395i-4(c)(2)(B)(iii)) is amended 
by inserting ``excluding any psychiatric or rehabilitation unit of the 
facility which is a distinct part of the facility,'' before ``provides 
not''.
    (b) Definition of PPS Exempt Distinct Part Psychiatric and 
Rehabilitation Units.--Section 1886(d)(1)(B) (42 U.S.C. 
1395ww(d)(1)(B)) is amended by inserting before the last sentence the 
following new sentence: ``In establishing such definition, the 
Secretary may not exclude from such definition a psychiatric or 
rehabilitation unit of a critical access hospital which is a distinct 
part of such hospital solely because such hospital is exempt from the 
prospective payment system under this section.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of enactment of this Act.

      Subtitle B--Medicare Dependent, Small Rural Hospital Program

SEC. 411. MAKING THE MEDICARE DEPENDENT, SMALL RURAL HOSPITAL PROGRAM 
              PERMANENT.

    (a) Payment Methodology.--Section 1886(d)(5)(G) (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), as amended by section 404(b)(2) 
        of BBRA (113 Stat. 1501A-372), is amended by striking ``or 
        fiscal year 2000 through fiscal year 2005''  and inserting 
``fiscal year 2000, or any subsequent fiscal year,''.

SEC. 412. OPTION TO BASE ELIGIBILITY FOR MEDICARE DEPENDENT, SMALL 
              RURAL HOSPITAL PROGRAM ON DISCHARGES DURING ANY OF THE 3 
              MOST RECENT AUDITED COST REPORTING PERIODS.

    (a) In General.--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 amendment made by this section shall apply 
with respect to cost reporting periods beginning on or after the date 
of enactment of this Act.

                  Subtitle C--Sole Community Hospitals

SEC. 421. EXTENSION OF OPTION TO USE REBASED TARGET AMOUNTS TO ALL SOLE 
              COMMUNITY HOSPITALS.

    (a) In General.--Section 1886(b)(3)(I)(i) (42 U.S.C. 
1395ww(b)(3)(I)(i)) is amended--
            (1) in the matter preceding subclause (I)--
                    (A) by striking ``that for its cost reporting 
                period beginning during 1999 is paid on the basis of 
                the target amount applicable to the hospital under 
                subparagraph (C) and that elects (in a form and manner 
                determined by the Secretary) this subparagraph to apply 
                to the hospital''; and
                    (B) by striking ``substituted for such target 
                amount'' and inserting ``substituted, if such 
                substitution results in a greater payment under this 
                section for such hospital, for the amount otherwise 
                determined under subsection (d)(5)(D)(i)'';
            (2) in subclause (I), by striking ``target amount otherwise 
        applicable'' and all that follows through ``target amount')'' 
        and inserting ``the amount otherwise applicable to the hospital 
        under subsection (d)(5)(D)(i) (referred to in this clause as 
        the `subsection (d)(5)(D)(i) amount')''; and
            (3) in each of subclauses (II) and (III), by striking 
        ``subparagraph (C) target amount'' and inserting ``subsection 
        (d)(5)(D)(i) amount''.
    (b) Effective Date.--The amendments made by this section shall take 
effect as if included in the enactment of section 405 of BBRA (113 
Stat. 1501A-372).

SEC. 422. DEEMING A CERTAIN HOSPITAL AS A SOLE COMMUNITY HOSPITAL.

    Notwithstanding any other provision of law, for purposes of 
discharges occurring on or after October 1, 2000, the Greensville 
Memorial Hospital located in Emporia, Virginia shall be deemed to have 
satisfied the travel and time criteria under section 
1886(d)(5)(D)(iii)(II) of the Social Security Act (42 U.S.C. 
1395ww(d)(5)(D)(iii)(II)) for classification as a sole community 
hospital.

              Subtitle D--Other Rural Hospital Provisions

SEC. 431. EXEMPTION OF HOSPITAL SWING-BED PROGRAM FROM THE PPS FOR 
              SKILLED NURSING FACILITIES.

    (a) Exemption for Medicare Swing-Bed Hospitals.--
            (1) In general.--Section 1888(e)(7) (42 U.S.C. 
        1395yy(e)(7)(A)) is amended--
                    (A) in the heading, by striking ``Transition'' and 
                inserting ``Exemption'';
                    (B) by striking subparagraph (A) and inserting the 
                following new subparagraph:
                    ``(A) In general.--The prospective payment system 
                under this subsection shall not apply to items and 
                services provided by a facility described in 
                subparagraph (B).''; and
                    (C) in subparagraph (B), by striking ``, for which 
                payment'' and all that follows before the period.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall take effect as if included in the enactment of section 
        4432 of BBA (111 Stat. 414).
    (b) Change in Effective Date of BBRA Amendments.--
            (1) In general.--Section 408(c) of BBRA (113 Stat. 1501A-
        375) is amended by striking ``the date that is'' and all that 
        follows and inserting ``January 1, 2001.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect as if included in the enactment of section 
        408 of BBRA (113 Stat. 1501A-375).

SEC. 432. PERMANENT GUARANTEE OF PRE-BBA PAYMENT LEVELS FOR OUTPATIENT 
              SERVICES FURNISHED BY RURAL HOSPITALS.

    (a) In General.--Section 1833(t)(7)(D), as amended by section 203, 
is amended to read as follows:
                    ``(D) Hold harmless provisions for small rural and 
                cancer hospitals.--In the case of a hospital located in 
                a rural area and that has not more than 100 beds or a 
                hospital described in section 1886(d)(1)(B)(v), for 
                covered OPD services for which the PPS amount is less 
                than the pre-BBA amount, the amount of payment under 
                this subsection shall be increased by the amount of 
                such difference.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect as if included in the enactment of section 202 of BBRA (111 
Stat. 1501A-342).

SEC. 433. TREATMENT OF CERTAIN PHYSICIAN PATHOLOGY SERVICES.

    (a) In General.--Section 1848(i) (42 U.S.C. 1395w-4(i)) is amended 
by adding at the end the following new paragraph:
            ``(4) Treatment of certain physician pathology services.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law, when an independent laboratory 
                furnishes the technical component of a physician 
                pathology service with respect to a fee-for-service 
                medicare beneficiary who is a patient of a 
                grandfathered hospital, such component shall be treated 
                as a service for which payment shall be made to the 
                laboratory under this section and not as--
                            ``(i) an inpatient hospital service for 
                        which payment is made to the hospital under 
                        section 1886(d); or
                            ``(ii) a hospital outpatient service for 
                        which payment is made to the hospital under the 
                        prospective payment system under section 
                        1834(t).
                    ``(B) Definitions.--In this paragraph:
                            ``(i) Grandfathered hospital.--The term 
                        `grandfathered hospital' means a hospital that 
                        had an arrangement with an independent 
                        laboratory--
                                    ``(I) that was in effect as of July 
                                22, 1999; and
                                    ``(II) under which the laboratory 
                                furnished the technical component of 
                                physician pathology services with 
                                respect to patients of the hospital and 
                                submitted a claim for payment for such 
                                component to a carrier with a contract 
                                under section 1842 (and not to the 
                                hospital).
                            ``(ii) Fee-for-service medicare 
                        beneficiary.--The term `fee-for-service 
                        medicare beneficiary' means an individual who 
                        is not enrolled--
                                    ``(I) in a Medicare+Choice plan 
                                under part C;
                                    ``(II) in a plan offered by an 
                                eligible organization under section 
                                1876;
                                    ``(III) with a PACE provider under 
                                section 1894;
                                    ``(IV) in a medicare managed care 
                                demonstration project; or
                                    ``(V) in the case of a service 
                                furnished to an individual on an 
                                outpatient basis, in a health care 
                                prepayment plan under section 
                                1833(a)(1)(A).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to services furnished on or after January 1, 2001.

                   Subtitle E--Other Rural Provisions

SEC. 441. REVISION OF BONUS PAYMENTS FOR SERVICES FURNISHED IN HEALTH 
              PROFESSIONAL SHORTAGE AREAS.

    (a) Expansion of Bonus Payments To Include Physician Assistant and 
Nurse Practitioner Services.--Section 1833(m) (42 U.S.C. 1395l(m)) is 
amended--
            (1) by inserting ``(or services furnished by a physician 
        assistant or nurse practitioner that would be physicians' 
        services if furnished by a physician)'' after ``physicians' 
        services'';
            (2) by inserting ``, physician assistant (in the case of a 
        physician assistant described in subparagraph (C)(ii) of 
        section 1842(b)(6)), or nurse practitioner'' after 
        ``physician''; and
            (3) by striking ``clause (A) of section 1842(b)(6)'' and 
        inserting ``subparagraphs (A) and (C)(i) of such section''.
    (b) Elimination of Requirement To Make Bonus Payments on Monthly or 
Quarterly Basis.--Section 1833(m) (42 U.S.C. 1395l(m)) is amended by 
striking ``(on a monthly or quarterly basis)''.
    (c) Effective Dates.--
            (1) In general.--The amendments made by subsection (a) 
        shall apply to services furnished on or after July 1, 2001.
            (2) Monthly or quarterly payments.--The amendment made by 
        subsection (b) shall apply to services furnished on or after 
        the first day of the first calendar quarter beginning at least 
        240 days after the date of enactment of this Act.

SEC. 442. PROVIDER-BASED RURAL HEALTH CLINIC CAP EXEMPTION.

    (a) In General.--The matter in section 1833(f) (42 U.S.C. 1395l(f)) 
preceding paragraph (1) is amended by striking ``with less than 50 
beds'' and inserting ``with an average daily patient census that does 
not exceed 50''.
    (b) Effective Date.--The amendment made by subparagraph (A) shall 
apply to services furnished on or after January 1, 2001.

SEC. 443. PAYMENT FOR CERTAIN PHYSICIAN ASSISTANT SERVICES.

    (a) Payment for Certain Physician Assistant Services.--Section 
1842(b)(6)(C) (42 U.S.C. 1395u(b)(6)(C)) is amended by striking ``for 
such services provided before January 1, 2003,''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of enactment of this Act.

SEC. 444. BONUS PAYMENTS FOR RURAL HOME HEALTH AGENCIES IN 2001 AND 
              2002.

    (a) Increase in Payment Rates for Rural Agencies in 2001 and 
2002.--Section 1895(b) (42 U.S.C. 1395fff(b)) is amended by adding at 
the end the following new paragraph:
            ``(7) Additional payment amount for services furnished in 
        rural areas in 2001 and 2002.--In the case of home health 
        services furnished in a rural area (as defined in section 
        1886(d)(2)(D)) during 2001 or 2002, the Secretary shall provide 
        for an addition or adjustment to the payment amount otherwise 
        made under this section for services furnished in a rural area 
        in an amount equal to 10 percent of the amount otherwise 
        determined under this subsection.''.
    (b) Waiving Budget Neutrality.--Section 1895(b)(3) (42 U.S.C. 
1395fff(b)(3)) is amended by adding at the end the following new 
subparagraph:
                    ``(D) No adjustment for additional payments for 
                rural services.--The Secretary shall not reduce the 
                standard prospective payment amount (or amounts) under 
                this paragraph applicable to home health services 
                furnished during a period to offset the increase in 
                payments resulting from the application of paragraph 
                (7) (relating to services furnished in rural areas).''.

SEC. 445. EXCLUSION OF CLINICAL SOCIAL WORKER SERVICES AND SERVICES 
              PERFORMED UNDER A CONTRACT WITH A RURAL HEALTH CLINIC OR 
              FEDERALLY QUALIFIED HEALTH CENTER FROM THE PPS FOR SNFS.

    (a) In General.--Section 1888(e)(2)(A)(ii) (42 U.S.C. 
1395yy(e)(2)(A)(ii)) is amended--
            (1) in the first sentence, by inserting ``clinical social 
        worker services,'' after ``qualified psychologist services,''; 
        and
            (2) by inserting after the first sentence the following: 
        ``Services described in this clause also include services that 
        are provided by a physician, a physician assistant, a nurse 
        practitioner, a certified nurse midwife, a qualified 
        psychologist, or a clinical social worker who is employed, or 
        otherwise under contract, with a rural health clinic or a 
        Federally qualified health center.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to services provided on or after the date which is 60 days after 
the date of enactment of this Act.

SEC. 446. COVERAGE OF MARRIAGE AND FAMILY THERAPIST SERVICES PROVIDED 
              IN RURAL HEALTH CLINICS.

    (a) Coverage of Marriage and Family Therapist Services.--
            (1) Provision of services in rural health clinics.--Section 
        1861(aa)(1)(B) (42 U.S.C. 1395x(aa)(1)(B)) is amended by 
        striking ``Secretary)'' and inserting ``Secretary), by a 
        marriage and family therapist (as defined in subsection 
        (xx)(2)),''.
            (2) Marriage and family therapist services defined.--
        Section 1861 (42 U.S.C. 1395x), as amended by section 234(b), 
        is amended by adding at the end the following new subsection:

                ``Marriage and Family Therapist Services

    ``(xx)(1) The term `marriage and family therapist services' means 
services performed by a marriage and family therapist (as defined in 
paragraph (2)) for the diagnosis and treatment of mental illnesses, 
which the marriage and family therapist is legally authorized to 
perform under State law (or the State regulatory mechanism provided by 
State law) of the State in which such services are performed, as would 
otherwise be covered if furnished by a physician or as an incident to a 
physician's professional service, but only if no facility or other 
provider charges or is paid any amounts with respect to the furnishing 
of such services.
    ``(2) The term `marriage and family therapist' means an individual 
who--
            ``(A) possesses a master's or doctoral degree which 
        qualifies for licensure or certification as a marriage and 
        family therapist pursuant to State law;
            ``(B) after obtaining such degree has performed at least 2 
        years of clinical supervised experience in marriage and family 
        therapy; and
            ``(C)(i) is licensed or certified as a marriage and family 
        therapist in the State in which marriage and family therapist 
        services are performed; or
            ``(ii) in the case of a State that does not provide for 
        such licensure or certification, meets such other criteria as 
        the Secretary establishes.''.
    (b) Effective Date.--The amendments made by this section shall 
apply with respect to services furnished on or after January 1, 2002.

SEC. 447. CAPITAL INFRASTRUCTURE REVOLVING LOAN PROGRAM.

    (a) In General.--Part A of title XVI of the Public Health Service 
Act (42 U.S.C. 300q et seq.) is amended by adding at the end the 
following new section:

            ``capital infrastructure revolving loan program

    ``Sec. 1603. (a) Authority To Make and Guarantee Loans.--
            ``(1) Authority to make loans.--The Secretary may make 
        loans from the fund established under section 1602(d) to any 
        rural entity for projects for capital improvements, including--
                    ``(A) the acquisition of land necessary for the 
                capital improvements;
                    ``(B) the renovation or modernization of any 
                building;
                    ``(C) the acquisition or repair of fixed or major 
                movable equipment; and
                    ``(D) such other project expenses as the Secretary 
                determines appropriate.
            ``(2) Authority to guarantee loans.--
                    ``(A) In general.--The Secretary may guarantee the 
                payment of principal and interest for loans to rural 
                entities for projects for capital improvements 
                described in paragraph (1) to non-Federal lenders.
                    ``(B) Interest subsidies.--In the case of a 
                guarantee of any loan to a rural entity under 
                subparagraph (A)(i), the Secretary may pay to the 
                holder of such loan and for and on behalf of the 
                project for which the loan was made, amounts sufficient 
                to reduce by not more than 3 percentage points of the 
                net effective interest rate otherwise payable on such 
                loan.
    ``(b) Amount of Loan.--The principal amount of a loan directly made 
or guaranteed under subsection (a) for a project for capital 
improvement may not exceed $5,000,000.
    ``(c) Funding Limitations.--
            ``(1) Government credit subsidy exposure.--The total of the 
        Government credit subsidy exposure under the Credit Reform Act 
        of 1990 scoring protocol with respect to the loans outstanding 
        at any time with respect to which guarantees have been issued, 
        or which have been directly made, under subsection (a) may not 
        exceed $50,000,000 per year.
            ``(2) Total amounts.--Subject to paragraph (1), the total 
        of the principal amount of all loans directly made or 
        guaranteed under subsection (a) may not exceed $250,000,000 per 
        year.
    ``(d) Additional Assistance.--
            ``(1) Nonrepayable grants.--Subject to paragraph (2), the 
        Secretary may make a grant to a rural entity, in an amount not 
        to exceed $50,000, for purposes of capital assessment and 
        business planning.
            ``(2) Limitation.--The cumulative total of grants awarded 
        under this subsection may not exceed $2,500,000 per year.
    ``(e) Termination of Authority.--The Secretary may not directly 
make or guarantee any loan under subsection (a) or make a grant under 
subsection (d) after September 30, 2005.''.
    (b) Rural Entity Defined.--Section 1624 of the Public Health 
Service Act (42 U.S.C. 300s-3) is amended by adding at the end the 
following new paragraph:
            ``(15)(A) The term `rural entity' includes--
                    ``(i) a rural health clinic, as defined in section 
                1861(aa)(2) of the Social Security Act;
                    ``(ii) any medical facility with at least 1, but 
                less than 50, beds that is located in--
                            ``(I) a county that is not part of a 
                        metropolitan statistical area; or
                            ``(II) a rural census tract of a 
                        metropolitan statistical area (as determined 
                        under the most recent modification of the 
                        Goldsmith Modification, originally published in 
                        the Federal Register on February 27, 1992 (57 
                        Fed. Reg. 6725));
                    ``(iii) a hospital that is classified as a rural, 
                regional, or national referral center under section 
                1886(d)(5)(C) of the Social Security Act; and
                    ``(iv) a hospital that is a sole community hospital 
                (as defined in section 1886(d)(5)(D)(iii) of the Social 
                Security Act).
            ``(B) For purposes of subparagraph (A), the fact that a 
        clinic, facility, or hospital has been geographically 
        reclassified under the medicare program under title XVIII of 
        the Social Security Act shall not preclude a hospital from 
        being considered a rural entity under clause (i) or (ii) of 
        subparagraph (A).''.
    (c) Conforming Amendments.--Section 1602 of the Public Health 
Service Act (42 U.S.C. 300q-2) is amended--
            (1) in subsection (b)(2)(D), by inserting ``or 
        1603(a)(2)(B)'' after ``1601(a)(2)(B)''; and
            (2) in subsection (d)--
                    (A) in paragraph (1)(C), by striking ``section 
                1601(a)(2)(B)'' and inserting ``sections 1601(a)(2)(B) 
                and 1603(a)(2)(B)''; and
                    (B) in paragraph (2)(A), by inserting ``or 
                1603(a)(2)(B)'' after ``1601(a)(2)(B)''.

SEC. 448. GRANTS FOR UPGRADING DATA SYSTEMS.

    (a) In General.--Part B of title XVI of the Public Health Service 
Act (42 U.S.C. 300r et seq.) is amended by adding at the end the 
following new section:

                  ``grants for upgrading data systems

    ``Sec. 1611. (a) Grants to Hospitals.--
            ``(1) In general.--The Secretary shall establish a program 
        to make grants to hospitals that have submitted applications in 
        accordance with subsection (c) to assist eligible small rural 
        hospitals in offsetting the costs of establishing data 
        systems--
                    ``(A) required to--
                            ``(i) implement prospective payment systems 
                        under title XVIII of the Social Security Act; 
                        and
                            ``(ii) comply with the administrative 
                        simplification requirements under part C of 
                        title XI of such Act; or
                    ``(B) to reduce medication errors.
            ``(2) Costs.--For purposes of paragraph (1), the term 
        `costs' shall include costs associated with--
                    ``(A) purchasing computer software and hardware; 
                and
                    ``(B) providing education and training to hospital 
                staff on computer information systems.
            ``(3) Limitation.--A hospital that has received a grant 
        under section 142 of the Medicare, Medicaid, and SCHIP Balanced 
        Budget Refinement Act of 2000 is not eligible to receive a 
        grant under this section.
    ``(b) Eligible Small Rural Hospital Defined.--For purposes of this 
section, the term `eligible small rural hospital' means a non-Federal, 
short-term general acute care hospital that--
            ``(1) is located in a rural area, as defined for purposes 
        of section 1886(d) of the Social Security Act; and
            ``(2) has less than 50 beds.
    ``(c) Application.--A hospital seeking a grant under this section 
shall submit an application to the Secretary at such time and in such 
form and manner as the Secretary specifies.
    ``(d) Amount of Grant.--A grant to a hospital under this section 
may not exceed $100,000.
    ``(e) Reports.--
            ``(1) Information.--A hospital receiving a grant under this 
        section shall furnish the Secretary with such information as 
        the Secretary may require to--
                    ``(A) evaluate the project for which the grant is 
                made; and
                    ``(B) ensure that the grant is expended for the 
                purposes for which it is made.
            ``(2) Timing of submission.--
                    ``(A) Interim reports.--The Secretary shall report 
                to the Committee on Commerce of the House of 
                Representatives and the Committee on Health, Education, 
                Labor, and Pensions of the Senate at least annually on 
                the grant program established under this section, 
                including in such report information on the number of 
                grants made, the nature of the projects involved, the 
                geographic distribution of grant recipients, and such 
                other matters as the Secretary deems appropriate.
                    ``(B) Final report.--The Secretary shall submit a 
                final report to such committees not later than 180 days 
                after the completion of all of the projects for which a 
                grant is made under this section.
    ``(f) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary for grants under this 
section.''.
    (b) Conforming Amendment.--Section 1820(g)(3) (42 U.S.C. 1395i-
4(g)(3)) is repealed.

SEC. 449. RELIEF FOR FINANCIALLY DISTRESSED RURAL HOSPITALS.

    Title III of the Public Health Service Act (42 U.S.C. 241 et seq.) 
is amended by inserting after section 330D the following new section:

``SEC. 330E. RELIEF FOR FINANCIALLY DISTRESSED RURAL HOSPITALS.

    ``(a) Grants to Small Rural Hospitals.--The Secretary, acting 
through the Health Resources and Services Administration, may award 
grants to eligible small rural hospitals that have submitted 
applications in accordance with subsection (c) to provide relief for 
financial distress that has a negative impact on access to care for 
beneficiaries under the medicare program under title  XVIII of the 
Social Security Act (42 U.S.C. 1395 et seq.) that reside in a rural 
area.
    ``(b) Eligible Small Rural Hospital Defined.--For purposes of this 
paragraph, the term `eligible small rural hospital' means a non-
Federal, short-term general acute care hospital that--
            ``(1) is located in a rural area (as defined for purposes 
        of section 1886(d) of the Social Security Act (42 U.S.C. 
        1395ww(d))); and
            ``(2) has less than 50 beds.
    ``(c) Application and Approval.--
            ``(1) Application.--Each eligible small rural hospital that 
        desires to receive a grant under this paragraph shall submit an 
        application to the Secretary, at such time, in such form and 
        manner, and accompanied by such additional information as the 
        Secretary may reasonably require.
            ``(2) Approval.--The Secretary shall approve applications 
        submitted under paragraph (1) based on a methodology developed 
        by the Secretary in consultation with the Office of Rural 
        Health Policy.
    ``(d) Amount of Grant.--A grant to an eligible small rural hospital 
under this paragraph may not exceed $250,000.
    ``(e) Use of Funds.--
            ``(1) In general.--Except as provided in paragraph (2), an 
        eligible small rural hospital may use amounts received under a 
        grant under this section to temporarily offset financial 
        operating losses, with emphasis on those losses attributable to 
        reimbursement formula changes that resulted from the Balanced 
        Budget Act of 1997, in order to ensure continued operation and 
        short-term sustainability or to address emergency physical 
        capital needs that might otherwise result in closure.
            ``(2) Prohibited uses.--A hospital may not use funds 
        received under a grant under this section for new construction, 
        the purchase of medical equipment, or for computer software or 
        hardware.
    ``(f) Report.--
            ``(1) Information.--A hospital receiving a grant under this 
        section shall furnish the Secretary with such information as 
        the Secretary may require to evaluate the project for which the 
        grant is made and to ensure that the grant is expended for the 
        purposes for which it is made.
            ``(2) Reporting.--
                    ``(A) Annual reports.--
                            ``(i) In general.--Not later than December 
                        31 of each year (beginning with 2001), the 
                        Secretary shall submit a report to the 
                        committees of jurisdiction of the House of 
                        Representatives and the Senate on the grant 
                        program established under this section.
                            ``(ii) Information included.--The report 
                        submitted under clause (i) shall include 
                        information on the number of grants made, the 
                        nature of the projects involved, the geographic 
                        distribution of grant recipients, and such 
                        other information as the Secretary determines 
                        is appropriate.
                    ``(B) Final report.--Not later than 180 days after 
                the completion of all of the projects for which a grant 
                is made under this section, the Secretary shall submit 
                a final report on the grant program established under 
                this section to the committees described in 
                subparagraph (A).
    ``(g) Appropriations.--There are appropriated, out of any money in 
the Treasury not otherwise appropriated, for making grants under this 
section $25,000,000 for each of the fiscal years 2001 through 2005.''.

SEC. 450. REFINEMENT OF MEDICARE REIMBURSEMENT FOR TELEHEALTH SERVICES.

    (a) Revision of Telehealth Payment Methodology and Elimination of 
Fee-Sharing Requirement.--Section 4206(b) of the Balanced Budget Act of 
1997 (42 U.S.C. 1395l note) is amended to read as follows:
    ``(b) Methodology for Determining Amount of Payments.--
            ``(1) In general.--The Secretary shall pay to--
                    ``(A) the physician or practitioner at a distant 
                site that provides an item or service under subsection 
                (a) an amount equal to the amount that such physician 
                or provider would have been paid had the item or 
                service been provided without the use of a 
                telecommunications system; and
                    ``(B) the originating site a facility fee for 
                facility services furnished in connection with such 
                item or service.
            ``(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) Definitions.--In this subsection:
                    ``(A) Distant site.--The term `distant site' means 
                the site at which the physician or practitioner is 
                located at the time the item or service is provided via 
                a telecommunications system.
                    ``(B) Facility fee.--The term `facility fee' means 
                an amount equal to--
                            ``(i) for 2000 and 2001, $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.
                    ``(C) Originating site.--
                            ``(i) In general.--The term `originating 
                        site' means the site described in clause (ii) 
                        at which the eligible telehealth beneficiary 
                        under the medicare program is located at the 
                        time the item or service is provided via a 
                        telecommunications system.
                            ``(ii) Sites described.--The sites 
                        described in this paragraph are as follows:
                                    ``(I) On or before January 1, 2002, 
                                the office of a physician or a 
                                practitioner, a critical access 
                                hospital, a rural health clinic, and a 
                                Federally qualified health center.
                                    ``(II) On or before January 1, 
                                2003, a hospital, a skilled nursing 
                                facility, a comprehensive outpatient 
                                rehabilitation facility, a renal 
                                dialysis facility, an ambulatory 
                                surgical center, an Indian Health 
                                Service facility, and a community 
                                mental health center.''.
    (b) Elimination of Requirement for Telepresenter.--Section 4206 of 
the Balanced Budget Act of 1997 (42 U.S.C. 1395l note) is amended--
            (1) in subsection (a), by striking ``, notwithstanding that 
        the individual physician'' and all that follows before the 
        period at the end; and
            (2) by adding at the end the following new subsection:
    ``(e) Telepresenter Not Required.--Nothing in this section shall be 
construed as requiring an eligible telehealth beneficiary to be 
presented by a physician or practitioner for the provision of an item 
or service via a telecommunications system.''.
    (c) Reimbursement for Medicare Beneficiaries Who Do Not Reside in a 
HPSA.--Section 4206(a) of the Balanced Budget Act of 1997 (42 U.S.C. 
1395l note), as amended by subsection (b), is amended--
            (1) by striking ``In General.--Not later than'' and 
        inserting the following: ``Telehealth Services Reimbursed.--
            ``(1) In general.--Not later than'';
            (2) by striking ``furnishing a service for which payment'' 
        and all that follows before the period and inserting ``to an 
        eligible telehealth beneficiary''; and
            (3) by adding at the end the following new paragraph:
            ``(2) Eligible telehealth beneficiary defined.--In this 
        section, the term `eligible telehealth beneficiary' means a 
        beneficiary under the medicare program under title XVIII of the 
        Social Security Act (42 U.S.C. 1395 et seq.) that resides in--
                    ``(A) 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) a county that is not included in a 
                Metropolitan Statistical Area; or
                    ``(C) 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))).''.
    (d) Telehealth Coverage for Direct Patient Care.--
            (1) In general.--Section 4206 of the Balanced Budget Act of 
        1997 (42 U.S.C. 1395l note), as amended by subsection (c), is 
        amended--
                    (A) in subsection (a)(1), by striking 
                ``professional consultation via telecommunications 
                systems with a physician'' and inserting ``items and 
                services for which payment may be made under such part 
                that are furnished via a telecommunications system by a 
                physician''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(f) Coverage of Items and Services.--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, 90804-90815, and 90862.''.
            (2) Study and report regarding additional items and 
        services.--
                    (A) Study.--The Secretary of Health and Human 
                Services shall conduct a study to identify items and 
                services in addition to those described in section 
                4206(f) of the Balanced Budget Act of 1997 (as added by 
                paragraph (1)) that would be appropriate to provide 
                payment under title XVIII of the Social Security Act 
                (42 U.S.C. 1395 et seq.).
                    (B) Report.--Not later than 2 years after the date 
                of enactment of this Act, the Secretary shall submit a 
                report to Congress on the study conducted under 
                subparagraph (A) together with such recommendations for 
                legislation that the Secretary determines are 
                appropriate.
    (e) All Physicians and Practitioners Eligible for Telehealth 
Reimbursement.--Section 4206(a) of the Balanced Budget Act of 1997 (42 
U.S.C. 1395l note), as amended by subsection (d), is amended--
            (1) in paragraph (1), by striking ``(described in section 
        1842(b)(18)(C) of such Act (42 U.S.C. 1395u(b)(18)(C))''; and
            (2) by adding at the end the following new paragraph:
            ``(3) Practitioner defined.--For purposes of paragraph (1), 
        the term `practitioner' includes--
                    ``(A) a practitioner described in section 
                1842(b)(18)(C) of the Social Security Act (42 U.S.C. 
                1395u(b)(18)(C)); and
                    ``(B) a physical, occupational, or speech 
                therapist.''.
    (f) Telehealth Services Provided Using Store-and-Forward 
Technologies.--Section 4206(a)(1) of the Balanced Budget Act of 1997 
(42 U.S.C. 1395l note), as amended by subsection (e), is amended by 
adding at the end the following new paragraph:
            ``(4) 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.''.
    (g) Construction Relating to Home Health Services.--Section 4206(a) 
of the Balanced Budget Act of 1997 (42 U.S.C. 1395l note), as amended 
by subsection (f), is amended by adding at the end the following new 
paragraph:
            ``(5) Construction relating to home health services.--
                    ``(A) 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 that is receiving payment under the prospective 
                payment system described in such section from 
                furnishing a home health service via a 
                telecommunications system.
                    ``(B) Limitation.--The Secretary shall not consider 
                a home health service provided in the manner described 
                in subparagraph (A) to be a home health visit for 
                purposes of--
                            ``(i) determining the amount of payment to 
                        be made under the prospective payment system 
                        established under section 1895 of the Social 
                        Security Act (42 U.S.C. 1395fff); or
                            ``(ii) 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)).''.
    (h) Five-Year Application.--The amendments made by this section 
shall apply to items and services provided on or after April 1, 2001, 
and before April 1, 2006.

SEC. 451. MEDPAC STUDY ON LOW-VOLUME, ISOLATED RURAL HEALTH CARE 
              PROVIDERS.

    (a) Study.--The Medicare Payment Advisory Commission established 
under section 1805 of the Social Security Act (42 U.S.C. 1395b-6) (in 
this section referred to as ``MedPAC'') shall conduct a study on the 
effect of low patient and procedure volume on the financial status of 
low-volume, isolated rural health care providers participating in the 
medicare program under title XVIII of the Social Security Act (42 
U.S.C. 1395 et seq.).
    (b) Report.--Not later than 18 months after the date of enactment 
of this Act, MedPAC shall submit a report to the Secretary of Health 
and Human Services and Congress on the study conducted under subsection 
(a) indicating--
            (1) whether low-volume, isolated rural health care 
        providers are having, or may have, significantly decreased 
        medicare margins or other financial difficulties resulting from 
        any of the payment methodologies described in subsection (c);
            (2) whether the status as a low-volume, isolated rural 
        health care provider should be designated under the medicare 
        program and any criteria that should be used to qualify for 
        such a status; and
            (3) any changes in the payment methodologies described in 
        subsection (c) that are necessary to provide appropriate 
        reimbursement under the medicare program to low-volume, 
        isolated rural health care providers (as designated pursuant to 
        paragraph (2)).
    (c) Payment Methodologies Described.--The payment methodologies 
described in this subsection are the following:
            (1) The prospective payment system for hospital outpatient 
        department services under section 1833(t) of the Social 
        Security Act (42 U.S.C. 1395l).
            (2) The fee schedule for ambulance services under section 
        1834(l) of such Act (42 U.S.C. 1395m(l)).
            (3) The prospective payment system for inpatient hospital 
        services under section 1886 of such Act (42 U.S.C. 1395ww).
            (4) The prospective payment system for routine service 
        costs of skilled nursing facilities under section 1888(e) of 
        such Act (42 U.S.C. 1395yy(e)).
            (5) The prospective payment system for home health services 
        under section 1895 of such Act (42 U.S.C. 1395fff).

 TITLE V--PROVISIONS RELATING TO PART C (MEDICARE+CHOICE PROGRAM) AND 
                 OTHER MEDICARE MANAGED CARE PROVISIONS

SEC. 501. RESTORING EFFECTIVE DATE OF ELECTIONS AND CHANGES OF 
              ELECTIONS OF MEDICARE+CHOICE PLANS.

    (a) Open Enrollment.--Section 1851(f)(2) (42 U.S.C. 1395w-21(f)(2)) 
is amended by striking ``, except that if such election or change is 
made after the 10th day of any calendar month, then the election or 
change shall not take effect until the first day of the second calendar 
month following the date on which the election or change is made''.
    (b) Effective Date.--The amendment made by this section shall apply 
to elections and changes of coverage made on or after January 1, 2001.

SEC. 502. SPECIAL MEDIGAP ENROLLMENT ANTIDISCRIMINATION PROVISION FOR 
              CERTAIN BENEFICIARIES.

    (a) Disenrollment Window in Accordance With Beneficiary's 
Circumstance.--Section 1882(s)(3) (42 U.S.C. 1395ss(s)(3)) is amended--
            (1) in subparagraph (A), in the matter following clause 
        (iii), by striking ``, subject to subparagraph (E), seeks to 
        enroll under the policy not later than 63 days after the date 
        of termination of enrollment described in such subparagraph'' 
        and inserting ``seeks to enroll under the policy during the 
        period specified in subparagraph (E)''; and
            (2) by striking subparagraph (E) and inserting the 
        following new subparagraph:
    ``(E) For purposes of subparagraph (A), the time period specified 
in this subparagraph is--
            ``(i) in the case of an individual described in 
        subparagraph (B)(i), the period beginning on the date the 
        individual receives a notice of termination or cessation of all 
        supplemental health benefits (or, if no such notice is 
        received, notice that a claim has been denied because of such a 
        termination or cessation) and ending on the date that is 63 
        days after the applicable notice;
            ``(ii) in the case of an individual described in clause 
        (ii), (iii), (v), or (vi) of subparagraph (B) whose enrollment 
        is terminated involuntarily, the period beginning on the date 
        that the individual receives a notice of termination and ending 
        on the date that is 63 days after the date the applicable 
        coverage is terminated;
            ``(iii) in the case of an individual described in 
        subparagraph (B)(iv)(I), the period beginning on the earlier of 
        (I) the date that the individual receives a notice of 
        termination, a notice of the issuer's bankruptcy or insolvency, 
        or other such similar notice, if any, and (II) the date that 
        the applicable coverage is terminated, and ending on the date 
        that is 63 days after the date the coverage is terminated;
            ``(iv) in the case of an individual described in clause 
        (ii), (iii), (iv)(II), (iv)(III), (v), or (vi) of subparagraph 
        (B) who disenrolls voluntarily, the period beginning on the 
        date that is 60 days before the effective date of the 
        disenrollment and ending on the date that is 63 days after such 
        effective date; and
            ``(v) in the case of an individual described in 
        subparagraph (B) but not described in the preceding provisions 
        of this subparagraph, the period beginning on the effective 
        date of the disenrollment and ending on the date that is 63 
        days after such effective date.''.
    (b) Extended Medigap Access for Interrupted Trial Periods.--Section 
1882(s)(3) (42 U.S.C. 1395ss(s)(3)), as amended by subsection (a), is 
amended by adding at the end the following new subparagraph:
    ``(F) For purposes of this paragraph--
            ``(i) in the case of an individual described in 
        subparagraph (B)(v) (or deemed to be so described, pursuant to 
        this subparagraph) whose enrollment with an organization or 
        provider described in subclause (II) of such subparagraph is 
        involuntarily terminated within the first 12 months of such 
        enrollment, and who, without an intervening enrollment, enrolls 
        with another such organization or provider, such subsequent 
        enrollment shall be deemed to be an initial enrollment 
        described in such subparagraph; and
            ``(ii) in the case of an individual described in clause 
        (vi) of subparagraph (B) (or deemed to be so described, 
        pursuant to this subparagraph) whose enrollment with a plan or 
        in a program described in clause (v)(II) of such subparagraph 
        is involuntarily terminated within the first 12 months of such 
        enrollment, and who, without an intervening enrollment, enrolls 
        in another such plan or program, such subsequent enrollment 
        shall be deemed to be an initial enrollment described in clause 
        (vi) of such subparagraph.''.

SEC. 503. INCREASE IN NATIONAL PER CAPITA MEDICARE+CHOICE GROWTH 
              PERCENTAGE IN 2001 AND 2002.

    Section 1853(c)(6)(B) of the Social Security Act (42 U.S.C. 1395w-
23(c)(6)(B)) is amended--
            (1) in clause (iv), by striking ``for 2001, 0.5 percentage 
        points'' and inserting ``for 2001, 0 percentage points''; and
            (2) in clause (v), by striking ``for 2002, 0.3 percentage 
        points'' and inserting ``for 2002, 0 percentage points''.

SEC. 504. ALLOWING MOVEMENT TO 50:50 PERCENT BLEND IN 2002.

    Section 1853(c)(2) of the Social Security Act (42 U.S.C. 1395w-
23(c)(2)) is amended--
            (1) by striking the period at the end of subparagraph (F) 
        and inserting a semicolon; and
            (2) by adding after and below subparagraph (F) the 
        following:
        ``except that a Medicare+Choice organization may elect to apply 
        subparagraph (F) (rather than subparagraph (E)) for 2002.''.

SEC. 505. DELAY FROM JULY TO NOVEMBER 2000, IN DEADLINE FOR OFFERING 
              AND WITHDRAWING MEDICARE+CHOICE PLANS FOR 2001.

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

SEC. 506. AMOUNTS IN MEDICARE TRUST FUNDS AVAILABLE FOR SECRETARY'S 
              SHARE OF MEDICARE+CHOICE EDUCATION AND ENROLLMENT-RELATED 
              COSTS.

    (a) Relocation of Provisions.--Section 1857(e)(2) (42 U.S.C. 1395w-
27(e)(2)) is amended to read as follows:
            ``(2) Cost-sharing in enrollment-related costs.--A 
        Medicare+Choice organization shall pay the fee established by 
        the Secretary under section 1851(j)(3)(A).''.
    (b) Funding for Education and Enrollment Activities.--Section 1851 
(42 U.S.C. 1395w-21) is amended by adding at the end the following new 
subsection:
    ``(j) Funding for Beneficiary Education and Enrollment 
Activities.--
            ``(1) Secretary's estimate of total costs.--The Secretary 
        shall annually estimate the total cost for a fiscal year of 
        carrying out this section, section 4360 of the Omnibus Budget 
        Reconciliation Act of 1990 (relating to the health insurance 
        counseling and assistance program), and related activities.
            ``(2) Total amount available.--The total amount available 
        to the Secretary for a fiscal year for the costs of the 
        activities described in paragraph (1) shall be equal to the 
        lesser of--
                    ``(A) the amount estimated for such fiscal year 
                under paragraph (1); or
                    ``(B) for--
                            ``(i) fiscal year 2001, $130,000,000; and
                            ``(ii) fiscal year 2002 and each subsequent 
                        fiscal year, the amount for the previous fiscal 
                        year, adjusted to account for inflation, any 
                        change in the number of beneficiaries under 
                        this title, and any other relevant factors.
            ``(3) Cost-sharing in enrollment-related costs.--
                    ``(A) Amounts from medicare+choice organizations.--
                            ``(i) In general.--The Secretary is 
                        authorized to charge a fee to each 
                        Medicare+Choice organization with a contract 
                        under this part that is equal to the 
                        organization's pro rata share (as determined by 
                        the Secretary) of the Medicare+Choice portion 
                        (as defined in clause (ii)) of the total amount 
                        available under paragraph (2) for a fiscal 
                        year. Any amounts collected shall be available 
                        without further appropriation to the Secretary 
                        for the costs of the activities described in 
                        paragraph (1).
                            ``(ii) Medicare+choice portion defined.--
                        For purposes of clause (i), the term 
                        `Medicare+Choice portion' means, for a fiscal 
                        year, the ratio, as estimated by the Secretary, 
                        of--
                                    ``(I) the average number of 
                                individuals enrolled in Medicare+Choice 
                                plans during the fiscal year; to
                                    ``(II) the average number of 
                                individuals entitled to benefits under 
                                parts A, and enrolled under part B, 
                                during the fiscal year.
                    ``(B) Secretary's share.--
                            ``(i) Amounts available from trust funds.--
                        The Secretary's share of expenses shall be 
                        payable from funds in the Federal Hospital 
                        Insurance Trust Fund and the Federal 
                        Supplementary Medical Insurance Trust Fund, in 
                        such proportion as the Secretary shall deem to 
                        be fair and equitable after taking into 
                        consideration the expenses attributable to the 
                        administration of this part with respect to 
                        part A and B. The Secretary shall make such 
                        transfers of moneys between such Trust Funds as 
                        may be appropriate to settle accounts between 
                        the Trust Funds in cases where expenses 
                        properly payable from one such Trust Fund have 
                        been paid from the other such Trust Fund.
                            ``(ii) Secretary's share of expenses 
                        defined.--For purposes of clause (i), the term 
                        `Secretary's share of expenses' means, for a 
                        fiscal year, an amount equal to--
                                    ``(I) the total amount available to 
                                the Secretary under paragraph (2) for 
                                the fiscal year; less
                                    ``(II) the amount collected under 
                                subparagraph (A) for the fiscal 
                                year.''.

SEC. 507. REVISED TERMS AND CONDITIONS FOR EXTENSION OF MEDICARE 
              COMMUNITY NURSING ORGANIZATION (CNO) DEMONSTRATION 
              PROJECT.

    (a) In General.--Section 532 of BBRA (42 U.S.C. 1395mm note) is 
amended--
            (1) in subsection (a), by striking the second sentence; and
            (2) by striking subsection (b) and inserting the following 
        new subsections:
    ``(b) Terms and Conditions.--
            ``(1) January through september 2000.--For the 9-month 
        period beginning with January 2000, any such demonstration 
        project shall be conducted under the same terms and conditions 
        as applied to such demonstration during 1999.
            ``(2) October 2000 through december 2001.--For the 15-month 
        period beginning with October 2000, any such demonstration 
        project shall be conducted under the same terms and conditions 
        as applied to such demonstration during 1999, except that the 
        following modifications shall apply:
                    ``(A) Basic capitation rate.--The basic capitation 
                rate paid for services covered under the project (other 
                than case management services) per enrollee per month 
                shall be basic capitation rate paid for such services 
                for 1999, reduced by 10 percent in the case of the 
                demonstration sites located in Arizona, Minnesota, and 
                Illinois, and 15 percent for the demonstration site 
                located in New York.
                    ``(B) Targeted case management fee.--A case 
                management fee shall be paid only for enrollees who are 
                classified as `moderate' or `at risk' through a 
                baseline health assessment (as required for 
                Medicare+Choice plans under section 1852(e) of the 
                Social Security Act (42 U.S.C. 1395ww-22(e)).
                    ``(C) Greater uniformity in clinical features among 
                sites.--Each project shall implement for each site--
                            ``(i) protocols for periodic telephonic 
                        contact with enrollees based on--
                                    ``(I) the results of such 
                                standardized written health assessment; 
                                and
                                    ``(II) the application of 
                                appropriate care planning approaches;
                            ``(ii) disease management programs for 
                        targeted diseases (such as congestive heart 
                        failure, arthritis, diabetes, and hypertension) 
                        that are highly prevalent in the enrolled 
                        populations;
                            ``(iii) systems and protocols to track 
                        enrollees through hospitalizations, including 
                        pre-admission planning, concurrent management 
                        during inpatient hospital stays, and post-
                        discharge assessment, planning, and follow-up; 
                        and
                            ``(iv) standardized patient educational 
                        materials for specified diseases and health 
                        conditions.
                    ``(D) Quality improvement.--Each project shall 
                implement at each site once during the 15-month 
                period--
                            ``(i) enrollee satisfaction surveys; and
                            ``(ii) reporting on specified quality 
                        indicators for the enrolled population.
    ``(c) Evaluation.--
            ``(1) Preliminary report.--Not later than July 1, 2001, the 
        Secretary of Health and Human Services shall submit to the 
        Committees on Ways and Means and Commerce of the House of 
        Representatives and the Committee on Finance of the Senate a 
        preliminary report that--
                    ``(A) evaluates such demonstration projects for the 
                period beginning July 1, 1997, and ending December 31, 
                1999, on a site-specific basis with respect to the 
                impact on per beneficiary spending, specific health 
                utilization measures, and enrollee satisfaction; and
                    ``(B) includes a similar evaluation of such 
                projects for the portion of the extension period that 
                occurs after September 30, 2000.
            ``(2) Final report.--Not later than July 1, 2002, the 
        Secretary shall submit a final report to such Committees on 
        such demonstration projects. Such report shall include the same 
        elements as the preliminary report required by paragraph (1), 
        but for the period after December 31, 1999.
            ``(3) Methodology for spending comparisons.--Any evaluation 
        of the impact of the demonstration projects on per beneficiary 
        spending included in such reports shall be based on a 
        comparison of--
                    ``(A) data for all individuals who--
                            ``(i) were enrolled in such demonstration 
                        projects as of the first day of the period 
                        under evaluation; and
                            ``(ii) were enrolled for a minimum of 6 
                        months thereafter; with
                    ``(B) data for a matched sample of individuals who 
                are enrolled under part B of title XVIII of the Social 
                Security Act (42 U.S.C. 1395j et seq.) and who are not 
                enrolled in such a project, in a Medicare+Choice plan 
                under part C of such title (42 U.S.C. 1395w-21 et 
                seq.), a plan offered by an eligible organization under 
                section 1876 of such Act (42 U.S.C. 1395mm), or a 
                health care prepayment plan under section 1833(a)(1)(A) 
                of such Act (42 U.S.C. 1395l(a)(1)(A)).''.
    (b) Effective Date.--The amendments made by subsection (a) shall be 
effective as if included in the enactment of section 532 of BBRA (42 
U.S.C. 1395mm note).

SEC. 508. MODIFICATION OF PAYMENT RULES FOR CERTAIN FRAIL ELDERLY 
              MEDICARE BENEFICIARIES.

    (a) Modification of Payment Rules.--Section 1853 (42 U.S.C. 1395w-
23) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1)(A), by striking ``subsections 
                (e), (g), and (i)'' and inserting ``subsections (e), 
                (g), (i), and (j)'';
                    (B) in paragraph (3)(D), by inserting ``paragraph 
                (4) and'' after ``Subject to''; and
                    (C) by adding at the end the following new 
                paragraph:
            ``(4) Exemption from risk-adjustment system for frail 
        elderly beneficiaries enrolled in specialized programs.--
                    ``(A) In general.--In applying the risk-adjustment 
                factors established under paragraph (3) during the 
                period described in subparagraph (B), the limitation 
                under paragraph (3)(C)(ii)(I) shall apply to a frail 
                elderly Medicare+Choice beneficiary (as defined in 
                subsection (j)(3)) who is enrolled in a Medicare+Choice 
                plan under a specialized program for the frail elderly 
                (as defined in subsection (j)(2)) during the entire 
                period.
                    ``(B) Period of application.--The period described 
                in this subparagraph begins with January 2001, and ends 
                with the first month for which the Secretary certifies 
                to Congress that a comprehensive risk adjustment 
                methodology under paragraph (3)(C) that takes into 
                account the factors described in subsection (j)(1)(B) 
                is being fully implemented.''; and
            (2) by adding at the end the following new subsection:
    ``(j) Special Rules for Frail Elderly Enrolled in Specialized 
Programs for the Frail Elderly.--
            ``(1) Development and implementation of new payment 
        system.--
                    ``(A) In general.--The Secretary shall develop and 
                implement (as soon as possible after the date of 
                enactment of the Medicare, Medicaid, and SCHIP Balanced 
                Budget Refinement Act of 2000), during the period 
                described in subsection (a)(4)(B), a payment 
                methodology for frail elderly Medicare+Choice 
                beneficiaries enrolled in a Medicare+Choice plan under 
                a specialized program for the frail elderly (as defined 
                in paragraph (2)(A)).
                    ``(B) Factors described.--The methodology developed 
                and implemented under subparagraph (A) shall take into 
                account the prevalence, mix, and severity of chronic 
                conditions among frail elderly Medicare+Choice 
                beneficiaries and shall include--
                            ``(i) medical diagnostic factors from all 
                        provider settings (including hospital and 
                        nursing facility settings);
                            ``(ii) functional indicators of health 
                        status; and
                            ``(iii) such other factors as may be 
                        necessary to achieve appropriate payments for 
                        plans serving such beneficiaries.
            ``(2) Specialized program for the frail elderly defined.--
                    ``(A) In general.--In this part, the term 
                `specialized program for the frail elderly' means a 
                program that the Secretary determines--
                            ``(i) is offered under this part as a 
                        distinct part of a Medicare+Choice plan;
                            ``(ii) primarily enrolls frail elderly 
                        Medicare+Choice beneficiaries; and
                            ``(iii) has a clinical delivery system that 
                        is specifically designed to serve the special 
                        needs of such beneficiaries and to coordinate 
                        short-term and long-term care for such 
                        beneficiaries through the use of a team 
                        described in subparagraph (B) and through the 
                        provision of primary care services to such 
                        beneficiaries by means of such a team at the 
                        nursing facility involved.
                    ``(B) Specialized team described.--A team described 
                in this subparagraph--
                            ``(i) includes--
                                    ``(I) a physician; and
                                    ``(II) a nurse practitioner or 
                                geriatric care manager; and
                            ``(ii) has as members individuals who--
                                    ``(I) have special training in the 
                                care and management of the frail 
                                elderly beneficiaries; and
                                    ``(II) specialize in the care and 
                                management of such beneficiaries.
            ``(3) Frail elderly medicare+choice beneficiary defined.--
        In this part, the term `frail elderly Medicare+Choice 
        beneficiary' means a Medicare+Choice eligible individual who--
                    ``(A) is residing in a skilled nursing facility (as 
                defined in section 1819(a)) or a nursing facility (as 
                defined in section 1919(a)) for an indefinite period 
                and without any intention of residing outside the 
                facility; and
                    ``(B) has a severity of condition that makes the 
                individual frail (as determined under guidelines 
                approved by the Secretary).''.
    (b) Effective Date.--The amendments made by this section shall take 
effect on the date of enactment of this Act.

   TITLE VI--PROVISIONS RELATING TO INDIVIDUALS WITH END-STAGE RENAL 
                                DISEASE

SEC. 601. 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 ``, and for such services'' and 
all that follows before the period at the end and inserting the 
following: ``, for such services furnished during 2001, by 2.4 percent 
above such composite rate payment amounts for such services furnished 
on December 31, 2000, for such services furnished during 2002 and 2003, 
by the percentage increase in the Consumer Price Index for all urban 
consumers (U.S. city average) for the 12-month period ending with June 
of the previous year above such composite rate payment amounts for such 
services furnished on December 31 of the previous year, and for such 
services furnished during a subsequent year, by the ESRD market basket 
percentage increase above such composite rate payment amounts for such 
services furnished on December 31 of the previous year''.
    (b) ESRD Market Basket Percentage Increase Defined.--Section 
1881(b) (42 U.S.C. 1395rr(b)) is amended by adding at the end the 
following new paragraph:
    ``(12)(A) For purposes of this title, the term `ESRD market basket 
percentage increase' means, with respect to a calendar year, the 
percentage (estimated by the Secretary before the beginning of such 
year) by which--
            ``(i) the cost of the mix of goods and services included in 
        the provision of dialysis services (which may include the costs 
        described in subparagraph (D) as determined appropriate by the 
        Secretary) that is determined based on an index of 
        appropriately weighted indicators of changes in wages and 
        prices which are representative of the mix of goods and 
        services included in such dialysis services for the calendar 
        year; exceeds
            ``(ii) the cost of such mix of goods and services for the 
        preceding calendar year.
    ``(B) In determining the percentage under subparagraph (A), the 
Secretary may take into account any increase in the costs of furnishing 
the mix of goods and services described in such subparagraph resulting 
from--
            ``(i) the adoption of scientific and technological 
        innovations used to provide dialysis services; and
            ``(ii) changes in the manner or method of delivering 
        dialysis services.
    ``(C) The Secretary shall periodically review and update (as 
necessary) the items and services included in the mix of goods and 
services used to determine the percentage under subparagraph (A).
    ``(D) The costs described in this subparagraph include--
            ``(i) labor, including direct patient care costs and 
        administrative labor costs, vacation and holiday pay, payroll 
        taxes, and employee benefits;
            ``(ii) other direct costs, including drugs, supplies, and 
        laboratory fees;
            ``(iii) overhead, including medical director fees, 
        temporary services, general and administrative costs, interest 
        expenses, and bad debt;
            ``(iv) capital, including rent, real estate taxes, 
        depreciation, utilities, repairs, and maintenance; and
            ``(v) such other allowable costs as the Secretary may 
        specify.''.

SEC. 602. REVISION OF PAYMENT RATES FOR ESRD PATIENTS ENROLLED IN 
              MEDICARE+CHOICE PLANS.

    (a) In General.--Section 1853(a)(1)(B) (42 U.S.C. 1395w-
23(a)(1)(B)) is amended by adding at the end the following: ``In 
establishing such rates the Secretary shall provide for appropriate 
adjustments to increase each rate to reflect the demonstration rate 
(including any risk-adjustment associated with such rate) of the social 
health maintenance organization end-stage renal disease demonstrations 
established by section 2355 of the Deficit Reduction Act of 1984 
(Public Law 98-369; 98 Stat. 1103), as amended by section 13567(b) of 
the Omnibus Budget Reconciliation Act of 1993 (Public Law 103-66; 107 
Stat. 608), and shall compute such rates by not taking into account 
individuals with kidney transplants and individuals in which the 
program under this title is a secondary payer  to another payer (or 
payers) pursuant to section 1862(b).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to payments for months beginning with January 2002.
    (c) Publication.--The Secretary of Health and Human Services, not 
later than 6 months after the date of enactment of this Act, shall 
publish for public comment a description of the appropriate adjustments 
described in the last sentence of section 1853(a)(1)(B) of the Social 
Security Act (42 U.S.C. 1395w-23(a)(1)(B)), as added by subsection (a). 
The Secretary shall publish in final form such adjustments by not later 
than July 1, 2001, so that the amendment made by subsection (a) is 
implemented on a timely basis consistent with subsection (b).

SEC. 603. PERMITTING ESRD BENEFICIARIES TO ENROLL IN ANOTHER 
              MEDICARE+CHOICE PLAN IF THE PLAN IN WHICH THEY ARE 
              ENROLLED IS TERMINATED.

    (a) In General.--Section 1851(a)(3)(B) (42 U.S.C. 1395w-
21(a)(3)(B)) is amended by striking ``except that'' and all that 
follows and inserting the following: ``except that--
                            ``(i) an individual who develops end-stage 
                        renal disease while enrolled in a 
                        Medicare+Choice plan may continue to be 
                        enrolled in that plan; and
                            ``(ii) in the case of such an individual 
                        who is enrolled in a Medicare+Choice plan under 
                        clause (i) (or subsequently under this clause), 
                        if the enrollment is discontinued under 
                        circumstances described in section 
                        1851(e)(4)(A) then the individual will be 
                        treated as a `Medicare+Choice eligible 
                        individual' for purposes of electing to 
                        continue enrollment in another Medicare+Choice 
                        plan.''.
    (b) Effective Date.--
            (1) In general.--The amendment made by subsection (a) shall 
        apply to terminations and discontinuations occurring on or 
        after the date of enactment of this Act.
            (2) Application to prior plan terminations.--Clause (ii) of 
        section 1851(a)(3)(B) of the Social Security Act (as inserted 
        by subsection (a)) also shall apply to individuals whose 
        enrollment in a Medicare+Choice plan was terminated or 
        discontinued after December 31, 1997, and before the date of 
        enactment of this Act. In applying this paragraph, such an 
        individual shall be treated, for purposes of part C of title 
        XVIII of the Social Security Act, as having discontinued 
        enrollment in such a plan as of the date of enactment of this 
        Act.

SEC. 604. COVERAGE OF CERTAIN VASCULAR ACCESS SERVICES FOR ESRD 
              BENEFICIARIES PROVIDED BY AMBULATORY SURGICAL CENTERS.

    (a) In General.--The matter following subparagraph (B) of section 
1833(i)(1) (42 U.S.C. 1395l(i)(1)) is amended by adding at the end the 
following new sentence: ``Such lists shall include the procedures 
identified as of July 30, 1999, by vascular access codes 34101, 34111, 
34490, 35190, 35458, 35460, 35475, 35476, 35903, 36005, 36010, 36011, 
36120, 36140, 36145, 36215-36218, 36831-36834, 37201, 37204-37208, 
37250, 37251, and 49423.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to vascular access services furnished on or after January 1, 
2000.

SEC. 605. COLLECTION AND ANALYSIS OF INFORMATION ON THE SATISFACTION OF 
              ESRD BENEFICIARIES WITH THE QUALITY OF AND ACCESS TO 
              HEALTH CARE UNDER THE MEDICARE PROGRAM.

    (a) Collection of Information.--The Secretary shall collect 
information on the satisfaction of each ESRD medicare beneficiary with 
the quality of health care under the original fee-for-service medicare 
program and the Medicare+Choice program, and the access of each 
beneficiary to that care.
    (b) Analysis of Collected Information.--
            (1) In general.--The Secretary shall conduct an analysis of 
        the information collected under subsection (a) to determine--
                    (A) the kinds of health care that each non-dialysis 
                health care provider provides to each ESRD medicare 
                beneficiary for the treatment of end-stage renal 
                disease and each comorbidity;
                    (B) the effect of the availability of supplemental 
                insurance on the use by beneficiary of health care;
                    (C) the perceptions of each beneficiary regarding 
                the access of that beneficiary to health care; and
                    (D) the quality of health care provided to each 
                ESRD medicare beneficiary enrolled under the 
                Medicare+Choice program compared to each beneficiary 
                enrolled under the original fee-for-service medicare 
                program.
            (2) Considerations.--In conducting the analysis under 
        paragraph (1), the Secretary shall consider--
                    (A) the feasibility of routinely collecting 
                information on the satisfaction of each ESRD medicare 
                beneficiary with dialysis and non-dialysis health care;
                    (B) whether to collect information using disease 
                specific questions or generic questions (similar to 
                those used in conducting the Medicare Current 
                Beneficiary Survey);
                    (C) how well collected information detects access 
                problems within each specific group of ESRD medicare 
                beneficiaries, including beneficiaries without 
                supplemental insurance and beneficiaries that reside in 
                a rural area; and
                    (D) each obstacle that a health care provider may 
                face in offering each type of dialysis service.
    (c) Availability of Information and Analysis.--Not later than 
January 1 of each year (beginning in 2002) the Secretary shall make the 
information collected under subsection (a) and the analysis conducted 
under subsection (b) available to the public.
    (d) Definitions.--In this section:
            (1) ESRD medicare beneficiary.--The term ``ESRD medicare 
        beneficiary'' means an individual eligible for benefits under 
        the medicare program that has end-stage renal disease 
        (including an individual enrolled in a Medicare+Choice plan 
        offered by a Medicare+Choice organization under the 
        Medicare+Choice program).
            (2) Medicare+choice program.--The term ``Medicare+Choice 
        program'' means the program established under part C of title 
        XVIII of the Social Security Act (42 U.S.C. 1395w-21 et seq.).
            (3) Original fee-for-service medicare program.--The term 
        ``original fee-for-service medicare program'' means the health 
        benefits program under parts A and B title XVIII of the Social 
        Security Act (42 U.S.C. 1395 et seq.).
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services, acting through the Administrator 
        of the Health Care Financing Administration.

   TITLE VII--ACCESS TO CARE IMPROVEMENTS THROUGH MEDICAID AND SCHIP

SEC. 701. 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 subparagraph 
        (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.
            ``(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 costs of the center or clinic of furnishing such 
        services during fiscal year 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 in accordance with the regulations and methodology 
        referred to in paragraph (2). 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 BBA (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) 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. 702. TRANSITIONAL MEDICAL ASSISTANCE.

    (a) Making Provision Permanent.--
            (1) In general.--Subsection (f) of section 1925 (42 U.S.C. 
        1396r-6) is repealed.
            (2) Conforming amendment.--Section 1902(e)(1) (42 U.S.C. 
        1396a(e)(1)) is repealed.
    (b) State Option of Initial 12-Month Eligibility.--Section 1925 (42 
U.S.C. 1396r-6) is amended--
            (1) in subsection (a), by adding at the end the following 
        new paragraph:
            ``(5) Option of 12-month initial eligibility period.--A 
        State may elect to treat any reference in this subsection to a 
        6-month period (or 6 months) as a reference to a 12-month 
        period (or 12 months). In the case of such an election, 
        subsection (b) shall not apply.''; and
            (2) in subsection (b)(1), by inserting ``and subsection 
        (a)(5)'' after ``paragraph (3)''.
    (c) Simplification Options.--
            (1) Removal of administrative reporting requirements for 
        additional 6-month extension.--Section 1925(b) (42 U.S.C. 
        1396r-6(b)) is amended--
                    (A) in paragraph (2)--
                            (i) in the heading, by striking ``and 
                        reporting'';
                            (ii) by striking subparagraph (B);
                            (iii) in subparagraph (A)(i)--
                                    (I) by striking ``(I)'' and all 
                                that follows through ``(II)'' and 
                                inserting ``(i)'';
                                    (II) by striking ``, and (III)'' 
                                and inserting ``and (ii)''; and
                                    (III) by redesignating such 
                                subparagraph as subparagraph (A) (with 
                                appropriate indentation); and
                            (iv) in subparagraph (A)(ii)--
                                    (I) by striking ``notify the family 
                                of the reporting requirement under 
                                subparagraph (B)(ii) and a statement 
                                of'' and inserting ``provide the family 
                                with notification of''; and
                                    (II) by redesignating such 
                                subparagraph as subparagraph (B) (with 
                                appropriate indentation);
                    (B) in paragraph (3)(A)--
                            (i) in clause (iii)--
                                    (I) in the heading, by striking 
                                ``reporting and test'';
                                    (II) by striking subclause (I); and
                                    (III) by redesignating subclauses 
                                (II) and (III) as subclauses (I) and 
                                (II), respectively; and
                            (ii) by striking the last 3 sentences; and
                    (C) in paragraph (3)(B), by striking ``subparagraph 
                (A)(iii)(II)'' and inserting ``subparagraph 
                (A)(iii)(I)''.
            (2) Exemption for states covering needy families up to 185 
        percent of poverty.--Section 1925 (42 U.S.C. 1396r-6), as 
        amended by subsection (a), is amended--
                    (A) in each of subsections (a)(1) and (b)(1), by 
                inserting ``but subject to subsection (f),'' after 
                ``Notwithstanding any other provision of this title,''; 
                and
                    (B) by adding at the end the following new 
                subsection:
    ``(f) Exemption for State Covering Needy Families Up to 185 Percent 
of Poverty.--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.''.
            (3) State option to elect shorter period for requirement 
        for receipt of medical assistance as a condition of eligibility 
        for transitional medical assistance.--Section 1925(a)(1) (42 
        U.S.C. 1396r-6(a)(1)) is amended by inserting ``(or such 
        shorter period as the State may elect)'' after ``3''.
    (d) Application of Notice of Eligibility to All Families Leaving 
Welfare.--Section 1925(a) (42 U.S.C. 1396r-6(a)), as amended by 
subsection (b)(1), is amended by adding at the end the following new 
paragraph:
            ``(6) Notice of eligibility for medical assistance to all 
        families leaving tanf.--Each State shall notify each family 
        which was receiving assistance under the State program funded 
        under part A of title IV and which is no longer eligible for 
        such assistance, of the potential eligibility of the family and 
any individual members of such family for medical assistance under this 
title or child health assistance under title XXI. Such notice shall 
include a statement that the family does not have to be receiving 
assistance under the State program funded under part A of title IV in 
order to be eligible for such medical assistance or child health 
assistance.''.
    (e) Enrollment Data.--Section 1925 (42 U.S.C. 1396r-6), as amended 
by subsection (c)(2)(B), is amended by adding at the end the following 
new subsection:
    ``(g) Enrollment Data.--The Secretary annually shall obtain from 
each State with a State plan approved under this title enrollment data 
regarding--
            ``(1) the number of adults and children who--
                    ``(A) receive medical assistance under this title 
                based on eligibility under section 1931;
                    ``(B) at the time they were first determined to be 
                eligible for such medical assistance, also received 
                cash assistance under the State program funded under 
                part A of title IV; and
                    ``(C) subsequently ceased to receive assistance 
                under such State program due to increased earnings or 
                increased child support income;
            ``(2) the percentage of the adults and children described 
        in paragraph (1) who receive transitional medical assistance 
        under this section or otherwise remain enrolled in the program 
        under this title; and
            ``(3) the percentage of such adults and children that 
        receive such transitional medical assistance for more than 6 
        months or that remain enrolled in the program under this title 
        for more than 6 months after such adults or children ceased to 
        receive assistance under the State program funded under part A 
        of title IV.''.
    (f) Effective Date.--The amendments made by this section take 
effect on October 1, 2000.

SEC. 703. APPLICATION OF SIMPLIFIED SCHIP PROCEDURES UNDER THE MEDICAID 
              PROGRAM.

    (a) Coordination With Medicaid.--
            (1) In general.--Section 1902(l) (42 U.S.C. 1396a(l)) is 
        amended--
                    (A) in paragraph (3), by inserting ``subject to 
                paragraph (5)'', after ``Notwithstanding subsection 
                (a)(17),''; and
                    (B) by adding at the end the following new 
                paragraph:
    ``(5) With respect to determining the eligibility of individuals 
under 19 years of age for medical assistance under subsection 
(a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI), (a)(10)(A)(i)(VII), 
(a)(10)(A)(ii)(IX), or (a)(10)(A)(ii)(XIV), notwithstanding any other 
provision of this title, if the State has established a State child 
health plan under title XXI, or expanded coverage beyond the income 
eligibility standards required for such individuals under this title 
under a waiver granted under section 1115--
            ``(A) the State may not apply a resource standard if the 
        State does not apply such a standard under such child health 
        plan or section 1115 waiver with respect to such individuals;
            ``(B) the State shall use the same simplified eligibility 
        form (including, if applicable, permitting application other 
        than in person) as the State uses under such State child health 
        plan or section 1115 waiver with respect to such individuals;
            ``(C) the State shall provide for initial eligibility 
        determinations and redeterminations of eligibility using the 
        same verification policies, forms, and frequency as the State 
        uses for such purposes under such State child health plan or 
        section 1115 waiver with respect to such individuals; and
            ``(D) the State shall not require a face-to-face interview 
        for purposes of initial eligibility determinations and 
        redeterminations unless the State required such an interview 
        for such purposes under such child health plan or section 1115 
        waiver with respect to such individuals.''.
            (2) Effective date.--The amendments made by paragraph (1) 
        take effect on October 1, 2000, and apply to eligibility 
        determinations and redeterminations made on or after such date.
    (b) Automatic Reassessment of Eligibility for Title XXI and 
Medicaid Benefits for Children Losing Medicaid or Title XXI 
Eligibility.--
            (1) Loss of medicaid eligibility.--Section 1902(a) of the 
        Social Security Act (42 U.S.C. 1396a(a)) is amended--
                    (A) by striking the period at the end of paragraph 
                (65) and inserting ``; and'', and
                    (B) by inserting after paragraph (65) the following 
                new paragraph:
            ``(66) provide, by not later than the first day of the 
        first month that begins more than 1 year after the date of the 
        enactment of this paragraph and in the case of a State with a 
        State child health plan under title XXI, that before medical 
        assistance to a child (or a parent of a child) is discontinued 
        under this title, a determination of whether the child (or 
        parent) is eligible for benefits under title XXI shall be made 
        and, if determined to be so eligible, the child (or parent) 
        shall be automatically enrolled in the program under such title 
        without the need for a new application and without being asked 
        to provide any information that is already available to the 
        State.''.
            (2) Loss of title xxi eligibility.--Section 2102(b)(3) (42 
        U.S.C. 1397bb(b)(3)) is amended by redesignating subparagraphs 
        (D) and (E) as subparagraphs (E) and (F), respectively, and by 
        inserting after subparagraph (C) the following new 
        subparagraph:
                    ``(D) that before health assistance to a child (or 
                a parent of a child) is discontinued under this title, 
                a determination of whether the child (or parent) is 
                eligible for benefits under title XIX is made and, if 
                determined to be so eligible, the child (or parent) is 
                automatically enrolled in the program under such title 
                without the need for a new application and without 
                being asked to provide any information that is already 
                available to the State;''.
            (3) Effective date.--The amendments made by paragraphs (1) 
        and (2) apply to individuals who  lose eligibility under the 
medicaid program under title XIX, or under a State child health 
insurance plan under title XXI, respectively, of the Social Security 
Act (42 U.S.C. 1396 et seq.; 1397aa et seq.) on or after the date that 
is 60 days after the date of the enactment of this Act.

SEC. 704. PRESUMPTIVE ELIGIBILITY.

    (a) Additional Entities Qualified To Determine Presumptive 
Eligibility for Low-Income Children.--
            (1) Medicaid.--Section 1920A(b)(3)(A)(i) (42 U.S.C. 1396r-
        1a(b)(3)(A)(i)) is amended--
                    (A) by striking ``or (II)'' and inserting 
                ``, (II)''; and
                    (B) 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 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 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 (IV) any other entity the 
                State so deems, as approved by the Secretary'' before 
                the semicolon.
            (2) Application 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 1920A (relating to presumptive 
                eligibility).''.
                    (B) Exception from limitation on administrative 
                expenses.--Section 2105(c)(2) (42 U.S.C. 1397ee(c)(2)) 
                is amended by adding at the end the following new 
                subparagraph:
                    ``(C) Exception for presumptive eligibility 
                expenditures.--The limitation under subparagraph (A) on 
                expenditures shall not apply to expenditures 
                attributable to the application of section 1920A 
                (pursuant to section 2107(e)(1)(D)), regardless of 
                whether the child is determined to be ineligible for 
                the program under this title or title XIX.''.
            (3) Technical amendments.--Section 1920A (42 U.S.C. 1396r-
        1a) is amended--
                    (A) in subsection (b)(3)(A)(ii), by striking 
                ``paragraph (1)(A)'' and inserting ``paragraph 
                (2)(A)''; and
                    (B) in subsection (c)(2), in the matter preceding 
                subparagraph (A), by striking ``subsection (b)(1)(A)'' 
                and inserting ``subsection (b)(2)(A)''.
    (b) Elimination of SCHIP Funding Offset for Exercise of Presumptive 
Eligibility Option.--
            (1) In general.--Section 2104(d) (42 U.S.C. 1397dd(d)) is 
        amended by striking ``the sum of--'' and all that follows 
        through ``(2)'' and conforming the margins of all that remains 
        accordingly.
            (2) Effective date.--The amendment made by paragraph (1) 
        takes effect October 1, 2000, and applies to allotments under 
        title XXI of the Social Security Act (42 U.S.C. 1397aa et seq.) 
        for fiscal year 2001 and each succeeding fiscal year 
        thereafter.

SEC. 705. IMPROVEMENTS TO THE MATERNAL AND CHILD HEALTH SERVICES BLOCK 
              GRANT.

    (a) Increase in Authorization of Appropriations.--Section 501(a) 
(42 U.S.C. 701(a)) is amended in the matter preceding paragraph (1) by 
striking ``$705,000,000 for fiscal year 1994'' and inserting 
``$1,000,000,000 for fiscal year 2001''.
    (b) Coordination With Medicaid and SCHIP.--
            (1) SCHIP.--Section 505(a)(5)(F) (42 U.S.C. 705(a)(5)(F)) 
        is amended--
                    (A) in clause (ii), by inserting ``and in the 
                coordination of the administration of the State program 
                under title XXI with the care and services available 
                under this title, as required under subsections 
                (b)(3)(G) and (c)(2) of section 2102'' before the 
                comma; and
                    (B) in clause (iv), by striking ``and infants who 
                are eligible for medical assistance under subparagraph 
                (A) or (B) of section 1902(l)(1)'' and inserting ``, 
                infants, and children who are eligible for medical 
                assistance under section 1902(l)(1), and children who 
                are eligible for child health assistance under the 
                State program under title XXI''.
            (2) Conforming amendments to schip.--Section 2102(b)(3) (42 
        U.S.C. 1397bb(b)(3)), as amended by section 703(b)(2), is 
        amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (E);
                    (B) by striking the period at the end of 
                subparagraph (F) and inserting ``; and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(G) that operations and activities under this 
                title are developed and implemented in consultation and 
                coordination with the program operated by the State 
                under title V with respect to outreach and enrollment, 
                benefits and services, service delivery standards, 
                public health and social service agency relationships, 
                and quality assurance and data reporting.''.
    (c) Effective Date.--The amendments made by this section take 
effect on October 1, 2000.

SEC. 706. IMPROVING ACCESS TO MEDICARE COST-SHARING ASSISTANCE FOR LOW-
              INCOME BENEFICIARIES.

    (a) Increase in SLMB Eligibility.--
            (1) In general.--Section 1902(a)(10)(E) (42 U.S.C. 
        1396a(a)(10)(E)) is amended--
                    (A) in clause (iii), by striking ``and 120 percent 
                in 1995'' and inserting ``, 120 percent in 1995 through 
                2000, and 135 percent in 2001''; and
                    (B) in clause (iv), by striking ``2002)--'' and all 
                that follows through ``(II) for'' and inserting ``2002) 
                for''.
            (2) Conforming amendment.--Section 1933(c)(2)(A) (42 U.S.C. 
        1396u-3(c)(2)(A)) is amended by striking ``sum of--'' and all 
        that follows through ``(ii) the''''.
            (3) Effective date.--The amendments made by this subsection 
        take effect on January 1, 2001, and with respect to the 
        amendment made by paragraph (2), applies to allocations 
        determined under section 1933(c) of the Social Security Act (42 
        U.S.C. 1396u-3(c)) for the last 3 quarters of fiscal year 2001 
        and all of fiscal year 2002.
    (b) Index of Assets Test to Inflation.--Section 1905(p)(1)(C) (42 
U.S.C. 1396d(p)(1)(C)) is amended by inserting ``, increased (beginning 
with 2001 and each year thereafter) by the percentage increase (if any) 
in the Consumer Price Index for All Urban Consumers (United States city 
average)'' before the period.
    (c) Increased Effort To Provide Medicare Beneficiaries With 
Medicare Cost-Sharing Under the Medicaid Program.--
            (1) In general.--Section 1902(a) (42 U.S.C. 1396a(a)), as 
        amended by section 703(b)(1)(A), is amended--
                    (A) in paragraph (65), by striking ``and'' at the 
                end;
                    (B) in paragraph (66), by striking the period and 
                inserting ``; and''; and
                    (C) by inserting after paragraph (66) the following 
                new paragraph:
            ``(67) provide for the determination of eligibility for 
        medicare cost-sharing (as defined in section 1905(p)(3)) for 
        individuals described in paragraph (10)(E) and, if eligible for 
        such medicare cost-sharing, for the enrollment of such 
        individuals at any hospital, clinic, or similar entity at which 
        State or local agency personnel are stationed for the purpose 
        of determining the eligibility of individuals for medical 
        assistance under the State plan or providing outreach services 
        to eligible or potentially eligible individuals.''.
            (2) Effective date.--The amendments made by this paragraph 
        shall take effect on the date of enactment of this Act.
    (d) Presumptive Eligibility of Certain Low-Income Individuals for 
Medicare Cost-Sharing Under the QMB or SLMB Program.--Title XIX (42 
U.S.C. 1396 et seq.) is amended by inserting after section 1920A the 
following new section:

      ``presumptive eligibility of certain low-income individuals

    ``Sec. 1920B. (a) A State plan approved under section 1902 shall 
provide for making medical assistance with respect to medicare cost-
sharing covered under the State plan available to a low-income 
individual on the date the low-income individual becomes entitled to 
benefits under part A of title XVIII during a presumptive eligibility 
period.
    ``(b) For purposes of this section:
            ``(1) The term `low-income individual' means an individual 
        who at the age of 65 years is described--
                    ``(A) in section 1902(a)(10)(E)(i), or
                    ``(B) in section 1902(a)(10)(E)(iii).
            ``(2) The term `medicare cost-sharing'--
                    ``(A) with respect to an individual described in 
                paragraph (1)(A), has the meaning given such term in 
                section 1905(p)(3); and
                    ``(B) with respect to an individual described in 
                paragraph (1)(B), has the meaning given such term in 
                section 1905(p)(3)(A).
            ``(3) The term `presumptive eligibility period' means, with 
        respect to a low-income individual, the period that--
                    ``(A) begins with the date on which a qualified 
                entity determines, on the basis of preliminary 
                information, that the income and resources of the 
                individual do not exceed the applicable income and 
                resource level of eligibility under the State plan, and
                    ``(B) ends with (and includes) the earlier of--
                            ``(i) the day on which a determination is 
                        made with respect to the eligibility of the 
                        low-income individual for medical assistance 
                        for medical cost-sharing under the State plan, 
                        or
                            ``(ii) in the case of a low-income 
                        individual on whose behalf an application is 
                        not filed by the last day of the month 
                        following the month during which the entity 
                        makes the determination referred to in 
                        subparagraph (A), such last day.
            ``(4)(A) Subject to subparagraph (B), the term `qualified 
        entity' means any of the following:
                    ``(i) Qualified individuals within the Social 
                Security Administration.
                    ``(ii) An entity determined by the State agency to 
                be capable of making determinations of the type 
                described in paragraph (3).
            ``(B) The Secretary may issue regulations further limiting 
        those entities that may become qualified entities in order to 
        prevent fraud and abuse and for other reasons.
    ``(c)(1) The State agency, after consultation with the Secretary, 
shall provide qualified entities with--
            ``(A) such forms as are necessary for an application to be 
        made on behalf of a low-income individual for medical 
        assistance for medical cost-sharing under the State plan, and
            ``(B) information on how to assist low-income individuals 
        and other persons in completing and filing such forms.
    ``(2) A qualified entity that determines under subsection (b)(2)(A) 
that a low-income individual is presumptively eligible for medical 
assistance for medical cost-sharing under a State plan shall--
            ``(A) notify the State agency of the determination within 5 
        working days after the date on which the determination is made, 
        and
            ``(B) inform the low-income individual at the time the 
        determination is made that an application for medical 
        assistance for medical cost-sharing under the State plan is 
        required to be made by not later than the last day of the month 
        following the month during which the determination is made.
    ``(3) In the case of a low-income individual who is determined by a 
qualified entity to be presumptively eligible for medical assistance 
for medical cost-sharing under a State plan, the low-income individual 
shall make application for medical assistance for medical cost-sharing 
under such plan by not later than the last day of the month following 
the month during which the determination is made.
    ``(d) Notwithstanding any other provision of this title, medical 
assistance for medicare cost-sharing that--
            ``(1) is furnished to a low-income individual during a 
        presumptive eligibility period under the State plan; and
            ``(2) is included in the services covered by a State plan;
shall be treated as medical assistance provided by such plan for 
purposes of section 1903.''.

SEC. 707. BREAST AND CERVICAL CANCER PREVENTION AND TREATMENT.

    (a) Coverage as Optional Categorically Needy Group.--
            (1) In general.--Section 1902(a)(10)(A)(ii) (42 U.S.C. 
        1396a(a)(10)(A)(ii)) is amended--
                    (A) in subclause (XVI), by striking ``or'' at the 
                end;
                    (B) in subclause (XVII), by adding ``or'' at the 
                end; and
                    (C) by adding at the end the following:
                                    ``(XVIII) who are described in 
                                subsection (aa) (relating to certain 
                                breast or cervical cancer patients);''.
            (2) Group described.--Section 1902 (42 U.S.C. 1396a) is 
        amended by adding at the end the following:
    ``(aa) Individuals described in this subsection are individuals 
who--
            ``(1) are not described in subsection (a)(10)(A)(i);
            ``(2) have not attained age 65;
            ``(3) have been screened for breast and cervical cancer 
        under the Centers for Disease Control and Prevention breast and 
        cervical cancer early detection program established under title 
        XV of the Public Health Service Act (42 U.S.C. 300k et seq.) in 
        accordance with the requirements of section 1504 of that Act 
        (42 U.S.C. 300n) and need treatment for breast or cervical 
        cancer; and
            ``(4) are not otherwise covered under creditable coverage, 
        as defined in section 2701(c) of the Public Health Service Act 
        (42 U.S.C. 300gg(c)).''.
            (3) Limitation on benefits.--Section 1902(a)(10) (42 U.S.C. 
        1396a(a)(10)) is amended in the matter following subparagraph 
        (G)--
                    (A) by striking ``and (XIII)'' and inserting 
                ``(XIII)''; and
                    (B) by inserting ``, and (XIV) the medical 
                assistance made available to an individual described in 
                subsection (aa) who is eligible for medical assistance 
                only because of subparagraph (A)(10)(ii)(XVIII) shall 
                be limited to medical assistance provided during the 
                period in which such an individual requires treatment 
                for breast or cervical cancer'' before the semicolon.
            (4) Conforming amendments.--Section 1905(a) (42 U.S.C. 
        1396d(a)) is amended in the matter preceding paragraph (1)--
                    (A) in clause (xi), by striking ``or'' at the end;
                    (B) in clause (xii), by adding ``or'' at the end; 
                and
                    (C) by inserting after clause (xii) the following:
            ``(xiii) individuals described in section 1902(aa),''.
    (b) Presumptive Eligibility.--
            (1) In general.--Title XIX (42 U.S.C. 1396 et seq.) is 
        amended by inserting after section 1920A the following:

    ``presumptive eligibility for certain breast or cervical cancer 
                                patients

    ``Sec. 1920B. (a) State Option.--A State plan approved under 
section 1902 may provide for making medical assistance available to an 
individual described in section 1902(aa) (relating to certain breast or 
cervical cancer patients) during a presumptive eligibility period.
    ``(b) Definitions.--For purposes of this section:
            ``(1) Presumptive eligibility period.--The term 
        `presumptive eligibility period' means, with respect to an 
        individual described in subsection (a), the period that--
                    ``(A) begins with the date on which a qualified 
                entity determines, on the basis of preliminary 
                information, that the individual is described in 
                section 1902(aa); and
                    ``(B) ends with (and includes) the earlier of--
                            ``(i) the day on which a determination is 
                        made with respect to the eligibility of such 
                        individual for services under the State plan; 
                        or
                            ``(ii) in the case of such an individual 
                        who does not file an application by the last 
                        day of the month following the month during 
                        which the entity makes the determination 
                        referred to in subparagraph (A), such last day.
            ``(2) Qualified entity.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                term `qualified entity' means any entity that--
                            ``(i) is eligible for payments under a 
                        State plan approved under this title; and
                            ``(ii) is determined by the State agency to 
                        be capable of making determinations of the type 
                        described in paragraph (1)(A).
                    ``(B) Regulations.--The Secretary may issue 
                regulations further limiting those entities that may 
                become qualified entities in order to prevent fraud and 
                abuse and for other reasons.
                    ``(C) Rule of construction.--Nothing in this 
                paragraph shall be construed as preventing a State from 
                limiting the classes of entities that may become 
                qualified entities, consistent with any limitations 
                imposed under subparagraph (B).
    ``(c) Administration.--
            ``(1) In general.--The State agency shall provide qualified 
        entities with--
                    ``(A) such forms as are necessary for an 
                application to be made by an individual described in 
                subsection (a) for medical assistance under the State 
                plan; and
                    ``(B) information on how to assist such individuals 
                in completing and filing such forms.
            ``(2) Notification requirements.--A qualified entity that 
        determines under subsection (b)(1)(A) that an individual 
        described in subsection  (a) is presumptively eligible for 
medical assistance under a State plan shall--
                    ``(A) notify the State agency of the determination 
                within 5 working days after the date on which the 
                determination is made; and
                    ``(B) inform such individual at the time the 
                determination is made that an application for medical 
                assistance under the State plan is required to be made 
                by not later than the last day of the month following 
                the month during which the determination is made.
            ``(3) Application for medical assistance.--In the case of 
        an individual described in subsection (a) who is determined by 
        a qualified entity to be presumptively eligible for medical 
        assistance under a State plan, the individual shall apply for 
        medical assistance under such plan by not later than the last 
        day of the month following the month during which the 
        determination is made.
    ``(d) Payment.--Notwithstanding any other provision of this title, 
medical assistance that--
            ``(1) is furnished to an individual described in subsection 
        (a)--
                    ``(A) during a presumptive eligibility period; and
                    ``(B) by a entity that is eligible for payments 
                under the State plan; and
            ``(2) is included in the care and services covered by the 
        State plan,
shall be treated as medical assistance provided by such plan for 
purposes of clause (4) of the first sentence of section 1905(b).''.
            (2) Conforming amendments.--
                    (A) Section 1902(a)(47) (42 U.S.C. 1396a(a)(47)) is 
                amended by inserting before the semicolon at the end 
                the following: ``and provide for making medical 
                assistance available to individuals described in 
                subsection (a) of section 1920B during a presumptive 
                eligibility period in accordance with such section''.
                    (B) Section 1903(u)(1)(D)(v) (42 U.S.C. 
                1396b(u)(1)(D)(v)) is amended--
                            (i) by striking ``or for'' and inserting 
                        ``, for''; and
                            (ii) by inserting before the period the 
                        following: ``, or for medical assistance 
                        provided to an individual described in 
                        subsection (a) of section 1920B during a 
                        presumptive eligibility period under such 
                        section''.
    (c) Enhanced Match.--The first sentence of section 1905(b) (42 
U.S.C. 1396d(b)) is amended--
            (1) by striking ``and'' before ``(3)''; and
            (2) by inserting before the period at the end the 
        following: ``, and (4) the Federal medical assistance 
        percentage shall be equal to the enhanced FMAP described in 
        section 2105(b) with respect to medical assistance provided to 
        individuals who are eligible for such assistance only on the 
        basis of section 1902(a)(10)(A)(ii)(XVIII)''.
    (d) Effective Date.--The amendments made by this section apply to 
medical assistance for items and services furnished on or after October 
1, 2000, without regard to whether final regulations to carry out such 
amendments have been promulgated by such date.

                      TITLE VIII--OTHER PROVISIONS

SEC. 801. APPROPRIATIONS FOR RICKY RAY HEMOPHILIA RELIEF FUND.

    Section 101(e) of the Ricky Ray Hemophilia Relief Fund Act of 1998 
(42 U.S.C. 300c-22 note) is amended by adding at the end the following: 
``There is appropriated to the Fund $475,000,000 for fiscal year 2001, 
to remain available until expended.''.

SEC. 802. INCREASE IN APPROPRIATIONS FOR SPECIAL DIABETES PROGRAMS FOR 
              CHILDREN WITH TYPE I DIABETES AND INDIANS.

    (a) Special Diabetes Programs for Children With Type I Diabetes.--
Section 330B(b) of the Public Health Service Act (42 U.S.C. 254c-2(b)) 
is amended--
            (1) by striking ``Notwithstanding'' and inserting the 
        following:
            ``(1) Transferred funds.--Notwithstanding''; and
            (2) by adding at the end the following:
            ``(2) Appropriations.--For the purpose of making grants 
        under this section, there are appropriated, out of any money in 
        the Treasury not otherwise appropriated--
                    ``(A) $70,000,000 for each of fiscal years 2001 and 
                2002 (which shall be combined with amounts transferred 
                under paragraph (1) for each such fiscal years); and
                    ``(B) $100,000,000 for each of fiscal years 2003 
                through 2005.''.
    (b) Special Diabetes Programs for Indians.--Section 330C(c) of the 
Public Health Service Act (42 U.S.C. 254c-3(c)) is amended--
            (1) by striking ``Notwithstanding'' and inserting the 
        following:
            ``(1) Transferred funds.--Notwithstanding'';
            (2) by adding at the end the following:
            ``(2) Appropriations.--For the purpose of making grants 
        under this section, there are appropriated, out of any money in 
        the Treasury not otherwise appropriated--
                    ``(A) $70,000,000 for each of fiscal years 2001 and 
                2002 (which shall be combined with amounts transferred 
                under paragraph (1) for each such fiscal years); and
                    ``(B) $100,000,000 for each of fiscal years 2003 
                through 2005.''.

SEC. 803. DEMONSTRATION GRANTS TO IMPROVE OUTREACH, ENROLLMENT, AND 
              COORDINATION OF PROGRAMS AND SERVICES TO HOMELESS 
              INDIVIDUALS AND FAMILIES.

    (a) Authority.--The Secretary of Health and Human Services may 
award demonstration grants to not more than 7 States (or other 
qualified entities) to conduct innovative programs that are designed to 
improve outreach to homeless individuals and families under the 
programs described in subsection (b) with respect to enrollment of such 
individuals and families under such programs and the provision of 
services (and coordinating the provision of such services) under such 
programs.
    (b) Programs for Homeless Described.--The programs described in 
this subsection are as follows:
            (1) Medicaid.--The program under title XIX of the Social 
        Security Act (42 U.S.C. 1396 et seq.).
            (2) SCHIP.--The program under title XXI of such Act (42 
        U.S.C. 1397aa et seq.).
            (3) TANF.--The program under part A of title IV of such Act 
        (42 U.S.C. 601 et seq.).
            (4) Maternal and child health block grants.--The program 
        under title V of the Social Security Act (42 U.S.C. 701 et 
        seq.).
            (5) Mental health and substance abuse block grants.--The 
        program under part B of title XIX of the Public Health Service 
        Act (42 U.S.C. 300x-1 et seq.).
            (6) HIV/AIDS care grants.--The program under part B of 
        title XXVI of the Public Health Service Act (42 U.S.C. 300ff-21 
        et seq.).
            (7) Food stamp program.--The program under the Food Stamp 
        Act of 1977 (7 U.S.C. 2011 et seq.).
            (8) Workforce investment act.--The program under the 
        Workforce Investment Act of 1999 (29 U.S.C. 2801 et seq.).
            (9) Welfare-to-work.--The welfare-to-work program under 
        section 403(a)(5) of the Social Security Act (42 U.S.C. 
        603(a)(5)).
            (10) Other programs.--Other public and private benefit 
        programs that serve low-income individuals.
    (c) Appropriations.--For the purposes of carrying out this section, 
there are appropriated, out of any funds in the Treasury not otherwise 
appropriated, $10,000,000, to remain available until expended.

SEC. 804. PROTECTION OF AN HMO ENROLLEE TO RECEIVE CONTINUING CARE AT A 
              FACILITY SELECTED BY THE ENROLLEE.

    (a) Amendments to the Employee Retirement Income Security Act of 
1974.--
            (1) In general.--Subpart B of part 7 of subtitle B of title 
        I of the Employee Retirement Income Security Act of 1974 (29 
        U.S.C. 1185 et seq.) is amended by adding at the end the 
        following new section:

``SEC. 714. ENSURING CHOICE FOR CONTINUING CARE.

    ``(a) In General.--With respect to health insurance coverage 
provided to participants or beneficiaries through a managed care 
organization under a group health plan, or through a health insurance 
issuer providing health insurance coverage in connection with a group 
health plan, such plan or issuer may not deny coverage for services 
provided to such participant or beneficiary by a continuing care 
retirement community, skilled nursing facility, or other qualified 
facility in which the participant or beneficiary resided prior to a 
hospitalization, regardless of whether such organization is under 
contract with such community or facility if the requirements described 
in subsection (b) are met.
    ``(b) Requirements.--The requirements of this subsection are that--
            ``(1) the service involved is a service for which the 
        managed care organization involved would be required to provide 
        or pay for under its contract with the participant or 
        beneficiary if the continuing care retirement community, 
        skilled nursing facility, or other qualified facility were 
        under contract with the organization;
            ``(2) the participant or beneficiary involved--
                    ``(A) resided in the continuing care retirement 
                community, skilled nursing facility, or other qualified 
                facility prior to being hospitalized;
                    ``(B) had a contractual or other right to return to 
                the facility after hospitalization; and
                    ``(C) elects to return to the facility after 
                hospitalization, whether or not the residence of the 
                participant or beneficiary after returning from the 
                hospital is the same part of the facility in which the 
                beneficiary resided prior to hospitalization;
            ``(3) the continuing care retirement community, skilled 
        nursing facility, or other qualified facility has the capacity 
        to provide the services the participant or beneficiary needs; 
        and
            ``(4) the continuing care retirement community, skilled 
        nursing facility, or other qualified facility is willing to 
        accept substantially similar payment under the same terms and 
        conditions that apply to similarly situated health care 
        facility providers under contract with the organization 
        involved.
    ``(c) Services To Prevent Hospitalization.--A group health plan or 
health insurance issuer to which this section applies may not deny 
payment for a skilled nursing service provided to a participant or 
beneficiary by a continuing care retirement community, skilled nursing 
facility, or other qualified facility in which the participant or 
beneficiary resides, without a preceding hospital stay, regardless of 
whether the organization is under contract with such community or 
facility, if--
            ``(1) the plan or issuer has determined that the service is 
        necessary to prevent the hospitalization of the participant or 
        beneficiary; and
            ``(2) the service to prevent hospitalization is provided as 
        an additional benefit as described in section 417.594 of title 
        42, Code of Federal Regulations, and would otherwise be covered 
        as provided for in subsection (b)(1).
    ``(d) Rights of Spouses.--A group health plan or health insurance 
issuer to which this section applies shall not deny payment for 
services provided by a skilled nursing facility for the care of a 
participant or beneficiary, regardless of whether the plan or issuer is 
under contract with such facility, if the spouse of the participant or 
beneficiary is already a resident of such facility and the requirements 
described in subsection (b) are met.
    ``(e) Exceptions.--Subsection (a) shall not apply--
            ``(1) where the attending acute care provider and the 
        participant or beneficiary (or a designated representative of 
        the participant or beneficiary where the participant or 
        beneficiary is physically or mentally incapable of making an 
        election under this paragraph) do not elect to pursue a course 
        of treatment necessitating continuing care; or
            ``(2) unless the community or facility involved--
                    ``(A) meets all applicable licensing and 
                certification requirements of the State in which it is 
                located; and
                    ``(B) agrees to reimbursement for the care of the 
                participant or beneficiary at a rate similar to the 
                rate negotiated by the managed care organization with 
                similar providers of care for similar services.
    ``(f) Prohibitions.--A group health plan and a health insurance 
issuer providing health insurance coverage in connection with a group 
health plan may not--
            ``(1) deny to an individual eligibility, or continued 
        eligibility, to enroll or to renew coverage with a managed care 
        organization under the plan, solely for the purpose of avoiding 
        the requirements of this section;
            ``(2) provide monetary payments or rebates to enrollees to 
        encourage such enrollees to accept less than the minimum 
        protections available under this section;
            ``(3) penalize or otherwise reduce or limit the 
        reimbursement of an attending physician because such physician 
        provided care to a participant or beneficiary in accordance 
        with this section; or
            ``(4) provide incentives (monetary or otherwise) to an 
        attending physician to induce such physician to provide care to 
        a participant or beneficiary in a manner inconsistent with this 
        section.
    ``(g) Rules of Construction.--
            ``(1) HMO not offering benefits.--This section shall not 
        apply with respect to any managed care organization under a 
        group health plan, or through a health insurance issuer 
        providing health insurance coverage in connection with a group 
        health plan, that does not provide benefits for stays in a 
        continuing care retirement community, skilled nursing facility, 
        or other qualified facility.
            ``(2) Cost-sharing.--Nothing in this section shall be 
        construed as preventing a managed care organization under a 
        group health plan, or through a health insurance issuer 
        providing health insurance coverage in connection with a group 
        health plan, from imposing deductibles, coinsurance, or other 
        cost-sharing in relation to benefits for care in a continuing 
        care facility.
    ``(h) Preemption; Exception for Health Insurance Coverage in 
Certain States.--
            ``(1) In general.--The requirements of this section shall 
        not apply with respect to health insurance coverage to the 
        extent that a State law (as defined in section 2723(d)(1) of 
        the Public Health Service Act) applies to such coverage and is 
        described in any of the following subparagraphs:
                    ``(A) Such State law requires such coverage to 
                provide for referral to a continuing care retirement 
                community, skilled nursing facility, or other qualified 
                facility in a manner that is more protective of 
                participants or beneficiaries than the provisions of 
                this section.
                    ``(B) Such State law expands the range of services 
                or facilities covered under this section and is 
                otherwise more protective of the rights of participants 
                or beneficiaries than the provisions of this section.
            ``(2) Construction.--Section 731(a)(1) shall not be 
        construed to provide that any requirement of this section 
        applies with respect to health insurance coverage, to the 
        extent that a State law described in paragraph (1) applies to 
        such coverage.
    ``(i) Penalties.--A participant or beneficiary may enforce the 
provisions of this section in an appropriate Federal district court. An 
action for injunctive relief or damages may be commenced on behalf of 
the participant or beneficiary by the participant's or beneficiary's 
legal representative. The court may award reasonable attorneys' fees to 
the prevailing party. If a beneficiary dies before conclusion of an 
action under this section, the action may be maintained by a 
representative of the participant's or beneficiary's estate.
    ``(j) Definitions.--In this section:
            ``(1) Attending acute care provider.--The term `attending 
        acute care provider' means anyone licensed or certified under 
        State law to provide health care services who is operating 
        within the scope of such license and who is primarily 
        responsible for the care of the enrollee.
            ``(2) Continuing care retirement community.--The term 
        `continuing care retirement community' means an organization 
        that provides or arranges for the provision of housing and 
        health-related services to an older person under an agreement 
        effective for the life of the person or for a specified period 
        greater than 1 year.
            ``(3) Managed care organization.--The term `managed care 
        organization' means an organization that provides comprehensive 
        health services to participants or beneficiaries, directly or 
        under contract or other agreement, on a prepayment basis to 
        such individuals. For purposes of this section, the following 
        shall be considered as managed care organizations:
                    ``(A) A Medicare+Choice plan authorized under 
                section 1851(a) of the Social Security Act (42 U.S.C. 
                1395w-21(a)).
                    ``(B) Any other entity that manages the cost, 
                utilization, and delivery of health care through the 
                use of predetermined periodic payments to health care 
                providers employed by or under contract or other 
                agreement, directly or indirectly, with the entity.
            ``(4) Other qualified facility.--The term `other qualified 
        facility' means any facility that can provide the services 
        required by the participant or beneficiary consistent with 
        State and Federal law.
            ``(5) Skilled nursing facility.--The term `skilled nursing 
        facility' means a facility that meets the requirements of 
        section 1819 of the Social Security Act (42 U.S.C. 1395i-3).''.
            (2) Clerical amendment.--The table of contents in section 1 
        of the Employee Retirement Income Security Act of 1974 is 
        amended by inserting after the items relating to subpart B of 
        part 7 of subtitle B of title I the following new item:

``Sec. 714. Ensuring choice for continuing care.''.
            (3) Effective date.--The amendments made by this section 
        shall apply with respect to plan years beginning on or after 
        January 1, 2001.
    (b) Amendment to the Public Health Service Act Relating to the 
Group Market.--
            (1) In general.--Subpart 2 of part A of title XXVII of the 
        Public Health Service Act (42 U.S.C. 300gg-4 et seq.) is 
        amended by adding at the end the following new section:

``SEC. 2707. ENSURING CHOICE FOR CONTINUING CARE.

    ``(a) In General.--With respect to health insurance coverage 
provided to enrollees through a managed care organization under a group 
health plan, or through a health insurance issuer providing health 
insurance coverage in connection with a group health plan, such plan or 
issuer may not deny coverage for services provided to such enrollee by 
a continuing care retirement community, skilled nursing facility, or 
other qualified facility in which the enrollee resided prior to a 
hospitalization, regardless of whether such organization is under 
contract with such  community or facility if the requirements described 
in subsection (b) are met.
    ``(b) Requirements.--The requirements of this subsection are that--
            ``(1) the service involved is a service for which the 
        managed care organization involved would be required to provide 
        or pay for under its contract with the enrollee if the 
        continuing care retirement community, skilled nursing facility, 
        or other qualified facility were under contract with the 
        organization;
            ``(2) the enrollee involved--
                    ``(A) resided in the continuing care retirement 
                community, skilled nursing facility, or other qualified 
                facility prior to being hospitalized;
                    ``(B) had a contractual or other right to return to 
                the facility after hospitalization; and
                    ``(C) elects to return to the facility after 
                hospitalization, whether or not the residence of the 
                enrollee after returning from the hospital is the same 
                part of the facility in which the beneficiary resided 
                prior to hospitalization;
            ``(3) the continuing care retirement community, skilled 
        nursing facility, or other qualified facility has the capacity 
        to provide the services the enrollee needs; and
            ``(4) the continuing care retirement community, skilled 
        nursing facility, or other qualified facility is willing to 
        accept substantially similar payment under the same terms and 
        conditions that apply to similarly situated health care 
        facility providers under contract with the organization 
        involved.
    ``(c) Services To Prevent Hospitalization.--A group health plan or 
health insurance issuer to which this section applies may not deny 
payment for a skilled nursing service provided to an enrollee by a 
continuing care retirement community, skilled nursing facility, or 
other qualified facility in which the enrollee resides, without a 
preceding hospital stay, regardless of whether the plan or issuer is 
under contract with such community or facility, if--
            ``(1) the plan or issuer has determined that the service is 
        necessary to prevent the hospitalization of the enrollee; and
            ``(2) the service to prevent hospitalization is provided as 
        an additional benefit as described in section 417.594 of title 
        42, Code of Federal Regulations, and would be covered as 
        provided for in subsection (b)(1).
    ``(d) Rights of Spouses.--A group health plan or health insurance 
issuer to which this section applies shall not deny payment for 
services provided by a skilled nursing facility for the care of an 
enrollee, regardless of whether the plan or issuer is under contract 
with such facility, if the spouse of the enrollee is already a resident 
of such facility and the requirements described in subsection (b) are 
met.
    ``(e) Exceptions.--Subsection (a) shall not apply--
            ``(1) where the attending acute care provider and the 
        enrollee (or a designated representative of the enrollee where 
        the enrollee is physically or mentally incapable of making an 
        election under this paragraph) do not elect to pursue a course 
        of treatment necessitating continuing care; or
            ``(2) unless the community or facility involved--
                    ``(A) meets all applicable licensing and 
                certification requirements of the State in which it is 
                located; and
                    ``(B) agrees to reimbursement for the care of the 
                enrollee at a rate similar to the rate negotiated by 
                the managed care organization with similar providers of 
                care for similar services.
    ``(f) Prohibitions.--A group health plan and a health insurance 
issuer providing health insurance coverage in connection with a group 
health plan may not--
            ``(1) deny to an individual eligibility, or continued 
        eligibility, to enroll or to renew coverage with a managed care 
        organization under the plan, solely for the purpose of avoiding 
        the requirements of this section;
            ``(2) provide monetary payments or rebates to enrollees to 
        encourage such enrollees to accept less than the minimum 
        protections available under this section;
            ``(3) penalize or otherwise reduce or limit the 
        reimbursement of an attending physician because such physician 
        provided care to an enrollee in accordance with this section; 
        or
            ``(4) provide incentives (monetary or otherwise) to an 
        attending physician to induce such physician to provide care to 
        an enrollee in a manner inconsistent with this section.
    ``(g) Rules of Construction.--
            ``(1) HMO not offering benefits.--This section shall not 
        apply with respect to any managed care organization under a 
        group health plan, or through a health insurance issuer 
        providing health insurance coverage in connection with a group 
        health plan, that does not provide benefits for stays in a 
        continuing care retirement community, skilled nursing facility, 
        or other qualified facility.
            ``(2) Cost-sharing.--Nothing in this section shall be 
        construed as preventing a managed care organization under a 
        group health plan, or through a health insurance issuer 
        providing health insurance coverage in connection with a group 
        health plan, from imposing deductibles, coinsurance, or other 
        cost-sharing in relation to benefits for care in a continuing 
        care facility.
    ``(h) Preemption; Exception for Health Insurance Coverage in 
Certain States.--
            ``(1) In general.--The requirements of this section shall 
        not apply with respect to health insurance coverage to the 
        extent that a State law (as defined in section 2723(d)(1)) 
        applies to such coverage and is described in any of the 
        following subparagraphs:
                    ``(A) Such State law requires such coverage to 
                provide for referral to a continuing care retirement 
                community, skilled nursing facility, or other qualified 
                facility in a manner  that is more protective of the 
enrollee than the provisions of this section.
                    ``(B) Such State law expands the range of services 
                or facilities covered under this section and is 
                otherwise more protective of enrollee rights than the 
                provisions of this section.
            ``(2) Construction.--Section 2723(a)(1) shall not be 
        construed to provide that any requirement of this section 
        applies with respect to health insurance coverage, to the 
        extent that a State law described in paragraph (1) applies to 
        such coverage.
    ``(i) Penalties.--An enrollee may enforce the provisions of this 
section in an appropriate Federal district court. An action for 
injunctive relief or damages may be commenced on behalf of the enrollee 
by the enrollee's legal representative. The court may award reasonable 
attorneys' fees to the prevailing party. If a beneficiary dies before 
conclusion of an action under this section, the action may be 
maintained by a representative of the enrollee's estate.
    ``(j) Definitions.--In this section:
            ``(1) Attending acute care provider.--The term `attending 
        acute care provider' means anyone licensed or certified under 
        State law to provide health care services who is operating 
        within the scope of such license and who is primarily 
        responsible for the care of the enrollee.
            ``(2) Continuing care retirement community.--The term 
        `continuing care retirement community' means an organization 
        that provides or arranges for the provision of housing and 
        health-related services to an older person under an agreement 
        effective for the life of the person or for a specified period 
        greater than 1 year.
            ``(3) Managed care organization.--The term `managed care 
        organization' means an organization that provides comprehensive 
        health services to enrollees, directly or under contract or 
        other agreement, on a prepayment basis to such individuals. For 
        purposes of this section, the following shall be considered as 
        managed care organizations:
                    ``(A) A Medicare+Choice plan authorized under 
                section 1851(a) of the Social Security Act (42 U.S.C. 
                1395w-21(a)).
                    ``(B) Any other entity that manages the cost, 
                utilization, and delivery of health care through the 
                use of predetermined periodic payments to health care 
                providers employed by or under contract or other 
                agreement, directly or indirectly, with the entity.
            ``(4) Other qualified facility.--The term `other qualified 
        facility' means any facility that can provide the services 
        required by the enrollee consistent with State and Federal law.
            ``(5) Skilled nursing facility.--The term `skilled nursing 
        facility' means a facility that meets the requirements of 
        section 1819 of the Social Security Act (42 U.S.C. 1395i-3).''.
            (2) Effective date.--The amendment made by this section 
        shall apply with respect to group health plans for plan years 
        beginning on or after January 1, 2001.
    (c) Amendments to the Public Health Service Act Relating to the 
Individual Market.--
            (1) In general.--The first subpart 3 of part B of title 
        XXVII of the Public Health Service Act (42 U.S.C. 300gg-51 et 
        seq.) (relating to other requirements) is amended--
                    (A) by redesignating such subpart as subpart 2; and
                    (B) by adding at the end the following new section:

``SEC. 2753. ENSURING CHOICE FOR CONTINUING CARE.

    ``The provisions of section 2707 shall apply to health maintenance 
organization coverage offered by a health insurance issuer in the 
individual market in the same manner as they apply to such coverage 
offered by a health insurance issuer in connection with a group health 
plan in the small or large group market.''.
            (2) Effective date.--The amendment made by this section 
        shall apply with respect to health insurance coverage offered, 
        sold, issued, renewed, in effect, or operated in the individual 
        market on or after January 1, 2001.

SEC. 805. GRANTS TO DEVELOP AND ESTABLISH REAL CHOICE SYSTEMS CHANGE 
              INITIATIVES.

    (a) Establishment.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall award 
        grants described in subsection (b) to States to support real 
        choice systems change initiatives that establish specific 
        action steps and specific timetables to achieve enduring system 
        improvements and to provide consumer-responsive long-term 
        services and supports to eligible individuals in the most 
        integrated setting appropriate based on the unique strengths 
        and needs of the individual, the priorities and concerns of the 
        individual (or, as appropriate, the individual's 
        representative), and the individual's desires with regard to 
        participation in community life.
            (2) Eligibility.--To be eligible for a grant under this 
        section, a State shall--
                    (A) establish a Consumer Task Force in accordance 
                with subsection (d); and
                    (B) submit an application at such time, in such 
                manner, and containing such information as the 
                Secretary may determine. The application shall be 
                jointly developed and signed by the designated State 
                official and the chairperson of such Task Force, acting 
                on behalf of and at the direction of the Task Force.
            (3) Definition of state.--In this section, the term 
        ``State'' means each of the 50 States, the District of 
        Columbia, Puerto Rico, Guam, the United States Virgin Islands, 
        American Samoa, and the Commonwealth of the Northern Mariana 
        Islands.
    (b) Grants for Real Choice Systems Change Initiatives.--
            (1) In general.--From funds appropriated under subsection 
        (f), the Secretary shall award grants to States to--
                    (A) support the establishment, implementation, and 
                operation of the State real choice systems change 
                initiatives described in subsection (a); and
                    (B) conduct outreach campaigns regarding the 
                existence of such initiatives.
            (2) Determination of awards; state allotments.--The 
        Secretary shall develop a formula for the distribution of funds 
        to States for each fiscal year under subsection (a). Such 
        formula shall give preference to States that have a higher need 
        for assistance, as determined by the Secretary, based on 
        indicators such as a relatively higher proportion of long-term 
        services and supports furnished to individuals in an 
        institutional setting but who have a plan described in an 
        application submitted under subsection (a)(2).
    (c) Authorized Activities.--A State that receives a grant under 
this section shall use the funds made available through the grant to 
accomplish the purposes described in subsection (a) and, in 
accomplishing such purposes, may carry out any of the following systems 
change activities:
            (1) Needs assessment and data gathering.--The State may use 
        funds to conduct a statewide needs assessment that may be based 
        on data in existence on the date on which the assessment is 
        initiated and may include information about the number of 
        individuals within the State who are receiving long-term 
        services and supports in unnecessarily segregated settings, the 
        nature and extent to which current programs respond to the 
        preferences of individuals with disabilities to receive 
        services in home and community-based settings as well as in 
        institutional settings, and the expected change in demand for 
        services provided in home and community settings as well as 
        institutional settings.
            (2) Institutional bias: remedies and promotion of community 
        participation.--The State may use funds to identify, develop, 
        and implement strategies for modifying policies, practices, and 
        procedures that unnecessarily bias the provision of long-term 
        services and supports toward institutional settings and away 
        from home and community-based settings, including policies, 
        practices, and procedures governing statewideness, 
        comparability in amount, duration, and scope of services, 
        financial eligibility, individualized functional assessments 
        and screenings (including individual and family involvement), 
        knowledge about service options, and promotion of self-
        direction of services and community-integrated living and 
        service arrangements that facilitate participation in community 
        life to the fullest extent possible and desired by the 
        individual.
            (3) Over medicalization of services.--The State may use 
        funds to identify, develop, and implement strategies for 
        modifying policies, practices, and procedures that 
        unnecessarily bias the provision of long-term services and 
        supports by health care professionals to the extent that 
        quality services and supports can be provided by other 
        qualified individuals, including policies, practices, and 
        procedures governing service authorization, case management, 
        and service coordination, service delivery options, quality 
        controls, and supervision and training.
            (4) Interagency coordination; single point of entry.--The 
        State may support activities to identify and coordinate Federal 
        and State policies, resources, and services, relating to the 
        provision of long-term services and supports, including the 
        convening of interagency work groups and the entering into of 
        interagency agreements that provide for a single point of entry 
        with one-stop access for long-term support services and the 
        design and implementation of a coordinated screening and 
        assessment system for all persons eligible for long-term 
        services and supports.
            (5) Training and technical assistance.--The State may carry 
        out directly, or may provide support to a public or private 
        entity to carry out training and technical assistance 
        activities that are provided for individuals with disabilities, 
        and, as appropriate, their representatives, attendants, and 
        other personnel (including professionals, paraprofessionals, 
        volunteers, and other members of the community).
            (6) Public awareness.--The State may support a public 
        awareness program that is designed to provide information 
        relating to the availability of choices available to 
        individuals with disabilities for receiving long-term services 
        and support in the most integrated setting appropriate.
            (7) Transitional costs.--The State may use funds to provide 
        transitional costs such as rent and utility deposits, first 
        month's rent and utilities, bedding, basic kitchen supplies, 
        and other necessities required for an individual to make the 
        transition from an institutional facility to a community-based 
        home setting where the individual resides.
            (8) Task force.--The State may use funds to support the 
        operation of the Consumer Task Force established under 
        subsection (d).
            (9) Demonstrations of new approaches.--The State may use 
        funds to conduct, on a time-limited basis, the demonstration of 
        new approaches to accomplishing the purposes described in 
        subsection (a)(1).
            (10) Improvement in the quality of services and supports.--
        The State may use funds to improve the quality of services and 
        supports provided to individuals with disabilities and their 
        families.
            (11) Other activities.--The State may use funds for any 
        systems change activities that are not described in any of the 
        preceding paragraphs of this subsection and that are necessary 
        for developing, implementing, or evaluating the comprehensive 
        statewide system of community-integrated long-term services and 
        supports.
    (d) Consumer Task Force.--
            (1) Establishment and duties.--To be eligible to receive a 
        grant under this section, each State shall establish a Consumer 
        Task Force (referred to in this section as the ``Task Force'') 
        to assist the State in the development, implementation, and 
        evaluation of real choice systems change initiatives.
            (2) Appointment.--Members of the Task Force shall be 
        appointed by the Chief Executive Officer of the State in 
        accordance with the requirements of paragraph (3), after the 
        solicitation of recommendations from representatives of 
        organizations representing a broad range of individuals with 
        disabilities and organizations interested in individuals with 
        disabilities.
            (3) Composition.--
                    (A) In general.--The Task Force shall represent a 
                broad range of individuals with disabilities from 
                diverse backgrounds and shall include representatives 
                from Developmental Disabilities Councils, Mental Health 
                Councils, State Independent Living Centers and 
                Councils, Commissions on Aging, organizations that 
                provide services to individuals with disabilities and 
                consumers of long-term services and supports.
                    (B) Individuals with disabilities.--A majority of 
                the members of the Task Force shall be individuals with 
                disabilities or the representatives of such 
                individuals.
                    (C) Limitation.--The Task Force shall not include 
                employees of any State agency providing services to 
                individuals with disabilities other than employees of 
                agencies described in the Developmental Disabilities 
                Assistance and Bill of Rights Act (42 U.S.C. 6000 et 
                seq.) or the Protection and Advocacy for Mentally Ill 
                Individuals Act of 1986 (42 U.S.C. 10801 et seq.).
    (e) Availability of Funds.--
            (1) Funds allotted to states.--Funds allotted to a State 
        under a grant made under this section for a fiscal year shall 
        remain available until expended.
            (2) Funds not allotted to states.--Funds not allotted to 
        States in the fiscal year for which they are appropriated shall 
        remain available in succeeding fiscal years for allotment by 
        the Secretary using the allotment formula established by the 
        Secretary under subsection (b)(2).
    (f) Annual Report.--A State that receives a grant under this 
section shall submit an annual report to the Secretary on the use of 
funds provided under the grant. Each report shall include the number 
and percentage increase in the number of eligible individuals in the 
State who receive long-term services and supports in the most 
integrated setting appropriate, including through community attendant 
services and supports and other community-based settings.
    (g) Funding.--
            (1) Fiscal year 2001.--For the purpose of making grants 
        under this section, there are appropriated, out of any funds in 
        the Treasury not otherwise appropriated, $50,000,000 for fiscal 
        year 2001.
            (2) Fiscal year 2002 and thereafter.--There is authorized 
        to be appropriated such sums as may be necessary to carry out 
        this section for fiscal year 2002 and each fiscal year 
        thereafter.
                                 <all>