[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 2782 Introduced in Senate (IS)]







107th CONGRESS
  2d Session
                                S. 2782

     To amend part C of title XVIII of the Social Security Act to 
consolidate and restate the Federal laws relating to the social health 
maintenance organization projects, to make such projects permanent, to 
require the Medicare Payment Advisory Commission to conduct a study on 
         ways to expand such projects, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 24, 2002

Mr. Smith of Oregon (for himself, Mr. Reid, Mr. Wyden, Mr. Ensign, Mrs. 
 Clinton, Mr. Schumer, Mrs. Boxer, and Mrs. Feinstein) introduced the 
 following bill; which was read twice and referred to the Committee on 
                                Finance

_______________________________________________________________________

                                 A BILL


 
     To amend part C of title XVIII of the Social Security Act to 
consolidate and restate the Federal laws relating to the social health 
maintenance organization projects, to make such projects permanent, to 
require the Medicare Payment Advisory Commission to conduct a study on 
         ways to expand such projects, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Seniors Health and 
Independence Preservation Act of 2002''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Making the social health maintenance organization (SHMO) 
                            projects permanent.
Sec. 3. Expansion of SHMO projects into noncontiguous service areas 
                            within a State.
Sec. 4. Permanence of SHMO planning grant sites.
Sec. 5. Procedures for SHMO benefit and payment mechanism changes.
Sec. 6. Comprehensive MedPAC study on SHMO I and SHMO II cost-
                            effectiveness and potential expansion.
Sec. 7. SHMO Beneficiary satisfaction survey.
Sec. 8. Conforming cross-references.
Sec. 9. Legislative purpose and construction.
Sec. 10. Repeals.

SEC. 2. MAKING THE SOCIAL HEALTH MAINTENANCE ORGANIZATION (SHMO) 
              PROJECTS PERMANENT.

    Part C of title XVIII of the Social Security Act (42 U.S.C. 1395w-
21 et seq.) is amended by inserting after section 1857 the following 
new section:

         ``waivers for social health maintenance organizations

    ``Sec. 1858. (a) Establishment of SHMO Projects.--In the case of a 
project described in subsection (b), the Secretary shall approve, with 
appropriate terms and conditions as defined by the Secretary, 
applications or protocols submitted for waivers described in subsection 
(c), and the evaluation of such protocols, in order to carry out such 
project. Such approval shall be effected not later than 30 days after 
the date on which the application or protocol for a waiver is submitted 
or not later than 30 days after the date of enactment of the Deficit 
Reduction Act of 1984 (Public Law 98-369; 98 Stat. 494) in the case of 
an application or protocol submitted before the date of enactment of 
such Act. Not later than 36 months after the date of enactment of the 
Omnibus Budget Reconciliation Act of 1990 (Public Law 101-508; 104 
Stat. 1388), the Secretary shall approve applications or protocols 
described in paragraph (1) for not more than 4 additional projects 
described in subsection (b).
    ``(b) Projects Described.--A project referred to in subsection (a) 
is a project--
            ``(1) to demonstrate--
                    ``(A) the concept of a social health maintenance 
                organization with the organizations as described in 
                Project No. 18-P-9 7604/1-04 of the University Health 
                Policy Consortium of Brandeis University; or
                    ``(B) in the case of a project conducted as a 
                result of the amendments made by section 
                4207(b)(4)(B)(i) of the Omnibus Budget Reconciliation 
                Act of 1990 (Public Law 101-508; 104 Stat. 1388-118), 
                the effectiveness and feasibility of innovative 
                approaches to refining targeting and financing 
                methodologies and benefit design, including the 
                effectiveness of feasibility of--
                            ``(i) the benefits of expanded post-acute 
                        and community care case management through 
                        links between chronic care case management 
                        services and acute care providers;
                            ``(ii) refining targeting or reimbursement 
                        methodologies;
                            ``(iii) the establishment and operation of 
                        a rural services delivery system;
                            ``(iv) integrating acute and chronic care 
                        management for patients with end-stage renal 
                        disease through expanded community care case 
                        management services (and for purposes of a 
                        project conducted under this clause, any 
                        requirement under a waiver granted under this 
                        section that a project disenroll individuals 
                        who develop end-stage renal disease shall not 
                        apply); or
                            ``(v) the effectiveness of second-
                        generation sites in reducing the costs of the 
                        commencement and management of health care 
                        service delivery;
            ``(2) which provides for the integration of health and 
        social services under the direct financial management of a 
        provider of services;
            ``(3) under which all services under this title will be 
        provided by or under arrangements made by the organization at a 
        fixed annual prepaid capitation rate for medicare of 100 
        percent of the adjusted average per capita cost; and
            ``(4) under which services under title XIX will be provided 
        at a rate approved by the Secretary.
    ``(c) Waivers.--The waivers referred to in subsection (a) are 
appropriate waivers of--
            ``(1) certain requirements of this title, pursuant to 
        section 402(a) of the Social Security Amendments of 1967 
        (Public Law 90-248; 81 Stat. 930), as amended by section 222 of 
        the Social Security Amendments of 1972 (Public Law 92-603; 86 
        Stat. 1390);
            ``(2) certain requirements of title XIX, pursuant to 
        section 1115; and
            ``(3) in the case of a project conducted as a result of the 
        amendments made by section 4207(b)(4)(B)(i) of the Omnibus 
        Budget Reconciliation Act of 1990 (Public Law 101-508; 104 
        Stat. 1388-118), any requirements of title XVIII or XIX that, 
        if imposed, would prohibit such project from being conducted.
    ``(d) Aggregate Limit on Number of Members.--The Secretary may not 
impose a limit on the number of individuals that may participate in a 
project conducted under this section, other than an aggregate limit of 
not less than 324,000 for all sites.
    ``(e) Reports.--
            ``(1) Preliminary report.--The Secretary shall submit a 
        preliminary report to Congress on the status of the projects 
        and waivers referred to in subsection (a) 45 days after the 
        date of enactment of the Deficit Reduction Act of 1984 (Public 
        Law 98-369; 98 Stat. 494).
            ``(2) Interim report.--The Secretary shall submit an 
        interim report to Congress on the projects referred to in 
        subsection (a) not later than 42 months after the date of 
        enactment of the Deficit Reduction Act of 1984 (Public Law 98-
        369; 98 Stat. 494).
            ``(3) Second interim report.--The Secretary shall submit a 
        second interim report to Congress on the project referred to in 
        paragraph (1) not later than March 31, 1993.
            ``(4) Report on integration and transition.--
                    ``(A) In general.--The Secretary shall submit to 
                Congress, by not later than January 1, 1999, a plan for 
                the integration of health plans offered by social 
                health maintenance organizations (including SHMO I and 
                SHMO II sites developed under this section and similar 
                plans) as an option under the Medicare+Choice program 
                under this title.
                    ``(B) Provision for transition.--The plan submitted 
                under subparagraph (A) shall include a transition for 
                social health maintenance organizations operating under 
                the project authority under this section.
                    ``(C) Payment policy.--The report shall also 
                include recommendations on appropriate payment levels 
                for plans offered by such organizations, including an 
                analysis of the application of risk adjustment factors 
                appropriate to the population served by such 
                organizations.
            ``(5) HHS report.--The Secretary shall submit a report on 
        the projects conducted under this section not later than the 
        date that is 21 months after the date on which the Secretary 
        submits to Congress the report described in paragraph (4).
    ``(f) Authorization of Appropriations.--There are authorized to be 
appropriated $3,500,000 for the costs of technical assistance and 
evaluation related to projects conducted as a result of the amendments 
made by section 4207(b)(4)(B) of the Omnibus Budget Reconciliation Act 
of 1990 (Public Law 101-508; 104 Stat. 1388-118).''.

SEC. 3. EXPANSION OF SHMO PROJECTS INTO NONCONTIGUOUS SERVICE AREAS 
              WITHIN A STATE.

    Not later than the date that is 90 days after the date of enactment 
of this Act, the Secretary shall promulgate a regulation that permits 
each social health maintenance organization participating in a project 
conducted under section 1858 of the Social Security Act (as added by 
section 2) to expand the service area of such organization to include 
areas within the State served by the organization that are not 
contiguous to any other service area of the organization.

SEC. 4. PERMANENCE OF SHMO PLANNING GRANT SITES.

    (a) Original SHMO II Demonstrations.--The 5 organizations 
authorized by section 4207(b)(4)(B) of the Omnibus Budget 
Reconciliation Act of 1990 (Public Law 101-508; 104 Stat. 1388-118) to 
demonstrate the concept of social health maintenance organizations that 
were approved by the Secretary of Health and Human Services in 1995 
shall be permitted to participate in the program under section 1858 of 
the Social Security Act (as added by section 2).
    (b) SHMO II Dual-Eligible Planning Grants.--Each entity that 
received a planning grant in 1998 under the 1997 Grants Program for 
Reforming Service Delivery for Dual Eligible Beneficiaries to develop a 
Second Generation Social HMO Demonstration Program shall be permitted 
to participate in the program under section 1858 of the Social Security 
Act (as added by section 2).

SEC. 5. PROCEDURES FOR SHMO BENEFIT AND PAYMENT MECHANISM CHANGES.

    (a) Congressional Notification of Benefit Changes.--The Secretary 
of Health and Human Services shall notify the appropriate committees of 
Congress prior to making any change to the benefits available under a 
project under section 1858 of the Social Security Act (as added by 
section 2).
    (b) Rulemaking Requirement for Payment Mechanism Changes.--The 
Secretary may not change the payment mechanism applicable with respect 
to any social health maintenance organization project under section 
1858 of the Social Security Act (as added by section 2), except by 
regulation.

SEC. 6. COMPREHENSIVE MEDPAC STUDY ON SHMO I AND SHMO II COST-
              EFFECTIVENESS AND POTENTIAL EXPANSION.

    (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 the 
        ``Commission'') shall conduct a study on the cost-effectiveness 
        of the projects and the potential expansion of such projects.
            (2) Cost-effectiveness.--
                    (A) In general.--In determining the cost-
                effectiveness of the projects under the study conducted 
                under paragraph (1), the Commission shall take into 
                account--
                            (i) the extent to which the per beneficiary 
                        costs to the medicare program for enrollees in 
                        a social health maintenance organization do not 
                        exceed the average per beneficiary costs to the 
                        medicare program for a comparable case mix of 
                        beneficiaries who are enrolled in the original 
                        medicare fee-for-service program;
                            (ii) the actuarial value of items and 
                        services available to beneficiaries enrolled in 
                        a social health maintenance organization but 
not available to beneficiaries enrolled in the original medicare fee-
for-service program; and
                            (iii) the extent to which social health 
                        maintenance organizations reduced expenditures 
                        under the medicaid program under title XIX of 
                        the Social Security Act by--
                                    (I) preventing individuals from 
                                being eligible for medical assistance 
                                under such program as medically needy 
                                individuals through the application of 
                                spend-down requirements for income and 
                                resources; or
                                    (II) reducing the number of nursing 
                                home bed days associated with stays of 
                                60 days or longer for medicaid 
                                beneficiaries.
                    (B) Comparable case mix.--In evaluating a 
                comparable case mix of beneficiaries for purposes of 
                clause (i)(I), the Commission shall take into account 
                the following factors:
                            (i) Age.
                            (ii) Gender.
                            (iii) Diagnoses.
                            (iv) Functional status.
                            (v) Any other available demographic or 
                        illness factor deemed appropriate by the 
                        Commission.
                    (C) Data.--In determining the cost-effectiveness of 
                social health maintenance organizations under this 
                subsection, the Commission shall evaluate data from 
                social health maintenance organizations for the period 
                beginning on January 1, 1997, and ending on the first 
                December 31 occurring after the date of enactment of 
                this Act.
    (b) Report.--
            (1) In general.--Not later than the date that is 24 months 
        after the date of enactment of this Act, the Commission shall 
        submit to the Secretary of Health and Human Services and to the 
        appropriate committees of Congress a report on the study 
        conducted under subsection (a)(1).
            (2) Contents.--The report submitted under paragraph (1) 
        shall contain--
                    (A) a statement regarding whether the Commission 
                finds social health maintenance organizations to be 
                cost-effective;
                    (B) recommendations regarding whether the projects 
                should be expanded to include additional sites and 
                whether additional social health maintenance 
                organizations should be permitted to participate in the 
                projects;
                    (C) recommendations on whether to modify or 
                eliminate the aggregate limit on number of members 
                under section 1858(d) of the Social Security Act (as 
                added by section 2); and
                    (D) if the Commission recommends expansion or 
                replication of the projects, recommendations on the 
                appropriate implementation of such expansion.
    (c) Definitions.--In this section:
            (1) Project.--The term ``project'' means a project 
        conducted under section 1858 of the Social Security Act (as 
        added by section 2) other than a project described in 
        subsection (b)(1)(B)(iv) of such section.
            (2) Medicare program.--The term ``medicare program'' means 
        the health benefits program under title XVIII of the Social 
        Security Act.
            (3) Original medicare fee-for-service program.--The term 
        ``original medicare fee-for-service program'' means the program 
        under parts A and B of the medicare program.
            (4) Social health maintenance organization.--The term 
        ``social health maintenance organization'' means an 
        organization participating in a SHMO I project described in 
        subparagraph (A) of section 1858(b)(1) of the Social Security 
        Act (as added by section 2) or a SHMO II project described in 
        subparagraph (B) of such section (other than a project 
        described in clause (iv) of such subparagraph).

SEC. 7. SHMO BENEFICIARY SATISFACTION SURVEY.

    (a) Survey.--
            (1) In general.--The Secretary of Health and Human Services 
        shall conduct a comparative qualitative survey of the 
        satisfaction of medicare beneficiaries enrolled in--
                    (A) the original medicare fee-for-service program 
                under parts A and B of title XVIII of the Social 
                Security Act;
                    (B) a Medicare+Choice plan under part C of title 
                XVIII of such Act; and
                    (C) a social health maintenance organization under 
                section 1858 of such Act (as added by section 2).
            (2) Considerations.--In determining beneficiary 
        satisfaction, the Secretary of Health and Human Services shall 
        take into account--
                    (A) the differences in the program or plan benefit 
                structure;
                    (B) the extent to which the program or plan benefit 
                structure enables beneficiaries to avoid or delay 
                institutionalization;
                    (C) the amount of out-of-pocket costs saved by 
                beneficiaries under the program or plan for traditional 
                and expanded care services;
                    (D) the access to services by beneficiaries under 
                the program or plan; and
                    (E) the satisfaction level of family members and 
                caregivers of beneficiaries enrolled in the program or 
                plan.
    (b) Publication of Results and Submission to Congress.--Not later 
than the date that is 24 months after the date of enactment of this 
Act, the Secretary of Health and Human Services shall post the results 
of the survey conducted under subsection (a)(1) on an Internet website 
and shall submit such results to the appropriate committees of 
Congress.

SEC. 8. CONFORMING CROSS-REFERENCES.

    (a) Social Security Act.--
            (1) 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 
        section 605(a) of the Medicare, Medicaid, and SCHIP Benefits 
        Improvement and Protection Act of 2000 (114 Stat. 2763A-556), 
        is amended by striking ``(established by section 2355 of the 
        Deficit Reduction Act of 1984, as amended by section 13567(b) 
        of the Omnibus Budget Reconciliation Act of 1993)'' and 
        inserting ``(established by section 1858)''.
            (2) Section 1882(g)(1) of the Social Security Act (42 
        U.S.C. 1395ss(g)(1)) is amended by striking ``section 2355 of 
        the Deficit Reduction Act of 1984'' and inserting ``section 
        1858''.
    (b) Medicare, Medicaid, and SCHIP Benefits Improvement and 
Protection Act of 2000.--Section 542(b)(2)(B)(iv) of the Medicare, 
Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 
(114 Stat. 2763A-551), as enacted into law by section 1(a)(6) of Public 
Law 106-554, is amended by striking ``section 4018(b) of the Omnibus 
Budget Reconciliation Act of 1987 (Public Law 100-203)'' and inserting 
``section 1858 of the Social Security Act''.

SEC. 9. LEGISLATIVE PURPOSE AND CONSTRUCTION.

    (a) Principal Substantive Changes To Make SHMO Projects 
Permanent.--
            (1) In general.--Except as provided in paragraphs (2) and 
        (3), section 2--
                    (A) restates, without substantive change, laws 
                enacted before January 24, 2002, that were replaced by 
                that section;
                    (B) may not be construed as making a substantive 
                change in the laws replaced; and
                    (C) is superseded by any law that is enacted after 
                January 24, 2002, that is inconsistent with such 
                section or that supersedes that section to the extent 
                of the inconsistency.
            (2) Permanency.--Section 2 extends the social health 
        maintenance organization projects for an indefinite time period 
        (beyond the date that is 30 months after the date that the 
        Secretary submits to Congress the report described in section 
        1858(e)(4) of the Social Security Act, as added by section 2).
            (3) Modification of certain reporting requirements.--
                    (A) The report required to be submitted by the 
                Secretary of Health and Human Services under section 
                1858(e)(5) of the Social Security Act (as added by 
                section 2) is the same report as is required under the 
                first sentence of section 4018 of the Omnibus Budget 
                Reconciliation Act of 1987 (Public Law 100-203; 101 
                Stat. 1330-65), except that such report is no longer 
                characterized as a final report.
                    (B) The Medicare Payment Advisory Commission 
                established under section 1805 of the Social Security 
                Act (42 U.S.C. 1395b-6) shall not be required to submit 
                the report described in the second sentence of section 
                4018 of the Omnibus Budget Reconciliation Act of 1987 
                (Public Law 100-203; 101 Stat. 1330-65).
    (b) References.--A reference to a law replaced by section 2, 
including a reference in a regulation, order, or other law, is deemed 
to refer to the corresponding provision enacted by this Act.
    (c) Continuing Effect.--An order, rule, or regulation in effect 
under a law replaced by section 2 shall continue in effect under the 
corresponding provision enacted by this Act until repealed, amended, or 
superseded.
    (d) Actions Under Prior Law.--An action taken under a law replaced 
by section 2 is deemed to have been taken under the corresponding 
provision enacted by this Act.
    (e) Inferences.--No inference of legislative construction may be 
drawn by reason of a heading of a provision.
    (f) Severability.--If a provision enacted by this Act is--
            (1) held invalid, each valid provision that is severable 
        from the invalid provision shall remain in effect; and
            (2) held invalid with respect to any application, the 
        provision shall remain valid with respect to each valid 
        application that is severable from the invalid application.

SEC. 10. REPEALS.

    (a) Inferences of Repeal.--The repeal of a law by this Act may not 
be construed as a legislative inference that the provision was or was 
not in effect before its repeal.
    (b) Laws Repealed.--Except for rights and duties that matured, 
penalties that were incurred, and proceedings that were begun before 
the date of enactment of this Act, the following provisions (and 
amendments made by such provisions) are repealed:
            (1) Section 2355 of the Deficit Reduction Act of 1984 
        (Public Law 98-369; 98 Stat. 1103).
            (2) Section 4018(b) of the Omnibus Budget Reconciliation 
        Act of 1987 (Public Law 100-203; 101 Stat. 1330-65).
            (3) Section 4207(b)(4) of the Omnibus Budget Reconciliation 
        Act of 1990 (Public Law 101-508; 104 Stat. 1388-118).
            (4) Section 13567 of the Omnibus Budget Reconciliation Act 
        of 1993 (Public Law 103-66; 107 Stat. 607).
            (5) Paragraphs (6) through (8) of section 160(d) of the 
        Social Security Act Amendments of 1994 (Public Law 103-432; 108 
        Stat. 4443).
            (6) Section 4014 of the Balanced Budget Act of 1997 (Public 
        Law 105-33; 111 Stat. 336).
            (7) Section 531 of the Medicare, Medicaid, and SCHIP 
        Balanced Budget Refinement Act of 1999 (Appendix F of Public 
        Law 106-113; 113 Stat. 1501A-388).
            (8) Section 631 of the Medicare, Medicaid, and SCHIP 
        Benefits Improvement and Protection Act of 2000 (Appendix F of 
        Public Law 106-554; 114 Stat. 2763A-566).
                                 <all>