[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6331 Enrolled Bill (ENR)]

        H.R.6331

                       One Hundred Tenth Congress

                                 of the

                        United States of America


                          AT THE SECOND SESSION

          Begun and held at the City of Washington on Thursday,
            the third day of January, two thousand and eight


                                 An Act


 
   To amend titles XVIII and XIX of the Social Security Act to extend 
 expiring provisions under the Medicare Program, to improve beneficiary 
 access to preventive and mental health services, to enhance low-income 
    benefit programs, and to maintain access to care in rural areas, 
           including pharmacy access, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
    (a) Short Title.--This Act may be cited as the ``Medicare 
Improvements for Patients and Providers Act of 2008''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.

                            TITLE I--MEDICARE

                  Subtitle A--Beneficiary Improvements

            Part I--Prevention, Mental Health, and Marketing

Sec. 101. Improvements to coverage of preventive services.
Sec. 102. Elimination of discriminatory copayment rates for Medicare 
          outpatient psychiatric services.
Sec. 103. Prohibitions and limitations on certain sales and marketing 
          activities under Medicare Advantage plans and prescription 
          drug plans.
Sec. 104. Improvements to the Medigap program.

                      Part II--Low-Income Programs

Sec. 111. Extension of qualifying individual (QI) program.
Sec. 112. Application of full LIS subsidy assets test under Medicare 
          Savings Program.
Sec. 113. Eliminating barriers to enrollment.
Sec. 114. Elimination of Medicare part D late enrollment penalties paid 
          by subsidy eligible individuals.
Sec. 115. Eliminating application of estate recovery.
Sec. 116. Exemptions from income and resources for determination of 
          eligibility for low-income subsidy.
Sec. 117. Judicial review of decisions of the Commissioner of Social 
          Security under the Medicare part D low-income subsidy program.
Sec. 118. Translation of model form.
Sec. 119. Medicare enrollment assistance.

                Subtitle B--Provisions Relating to Part A

Sec. 121. Expansion and extension of the Medicare Rural Hospital 
          Flexibility Program.
Sec. 122. Rebasing for sole community hospitals.
Sec. 123. Demonstration project on community health integration models 
          in certain rural counties.
Sec. 124. Extension of the reclassification of certain hospitals.
Sec. 125. Revocation of unique deeming authority of the Joint 
          Commission.

                Subtitle C--Provisions Relating to Part B

                      Part I--Physicians' Services

Sec. 131. Physician payment, efficiency, and quality improvements.
Sec. 132. Incentives for electronic prescribing.
Sec. 133. Expanding access to primary care services.
Sec. 134. Extension of floor on Medicare work geographic adjustment 
          under the Medicare physician fee schedule.
Sec. 135. Imaging provisions.
Sec. 136. Extension of treatment of certain physician pathology services 
          under Medicare.
Sec. 137. Accommodation of physicians ordered to active duty in the 
          Armed Services.
Sec. 138. Adjustment for Medicare mental health services.
Sec. 139. Improvements for Medicare anesthesia teaching programs.

            Part II--Other Payment and Coverage Improvements

Sec. 141. Extension of exceptions process for Medicare therapy caps.
Sec. 142. Extension of payment rule for brachytherapy and therapeutic 
          radiopharmaceuticals.
Sec. 143. Speech-language pathology services.
Sec. 144. Payment and coverage improvements for patients with chronic 
          obstructive pulmonary disease and other conditions.
Sec. 145. Clinical laboratory tests.
Sec. 146. Improved access to ambulance services.
Sec. 147. Extension and expansion of the Medicare hold harmless 
          provision under the prospective payment system for hospital 
          outpatient department (HOPD) services for certain hospitals.
Sec. 148. Clarification of payment for clinical laboratory tests 
          furnished by critical access hospitals.
Sec. 149. Adding certain entities as originating sites for payment of 
          telehealth services.
Sec. 150. MedPAC study and report on improving chronic care 
          demonstration programs.
Sec. 151. Increase of FQHC payment limits.
Sec. 152. Kidney disease education and awareness provisions.
Sec. 153. Renal dialysis provisions.
Sec. 154. Delay in and reform of Medicare DMEPOS competitive acquisition 
          program.

                Subtitle D--Provisions Relating to Part C

Sec. 161. Phase-out of indirect medical education (IME).
Sec. 162. Revisions to requirements for Medicare Advantage private fee-
          for-service plans.
Sec. 163. Revisions to quality improvement programs.
Sec. 164. Revisions relating to specialized Medicare Advantage plans for 
          special needs individuals.
Sec. 165. Limitation on out-of-pocket costs for dual eligibles and 
          qualified medicare beneficiaries enrolled in a specialized 
          Medicare Advantage plan for special needs individuals.
Sec. 166. Adjustment to the Medicare Advantage stabilization fund.
Sec. 167. Access to Medicare reasonable cost contract plans.
Sec. 168. MedPAC study and report on quality measures.
Sec. 169. MedPAC study and report on Medicare Advantage payments.

                Subtitle E--Provisions Relating to Part D

                    Part I--Improving Pharmacy Access

Sec. 171. Prompt payment by prescription drug plans and MA-PD plans 
          under part D.
Sec. 172. Submission of claims by pharmacies located in or contracting 
          with long-term care facilities.
Sec. 173. Regular update of prescription drug pricing standard.

                        Part II--Other Provisions

Sec. 175. Inclusion of barbiturates and benzodiazepines as covered part 
          D drugs.
Sec. 176. Formulary requirements with respect to certain categories or 
          classes of drugs.

                      Subtitle F--Other Provisions

Sec. 181. Use of part D data.
Sec. 182. Revision of definition of medically accepted indication for 
          drugs.
Sec. 183. Contract with a consensus-based entity regarding performance 
          measurement.
Sec. 184. Cost-sharing for clinical trials.
Sec. 185. Addressing health care disparities.
Sec. 186. Demonstration to improve care to previously uninsured.
Sec. 187. Office of the Inspector General report on compliance with and 
          enforcement of national standards on culturally and 
          linguistically appropriate services (CLAS) in Medicare.
Sec. 188. Medicare Improvement Funding.
Sec. 189. Inclusion of Medicare providers and suppliers in Federal 
          Payment Levy and Administrative Offset Program.

                           TITLE II--MEDICAID

Sec. 201. Extension of transitional medical assistance (TMA) and 
          abstinence education program.
Sec. 202. Medicaid DSH extension.
Sec. 203. Pharmacy reimbursement under Medicaid.
Sec. 204. Review of administrative claim determinations.
Sec. 205. County medicaid health insuring organizations.

                        TITLE III--MISCELLANEOUS

Sec. 301. Extension of TANF supplemental grants.
Sec. 302. 70 percent federal matching for foster care and adoption 
          assistance for the District of Columbia.
Sec. 303. Extension of Special Diabetes Grant Programs.
Sec. 304. IOM reports on best practices for conducting systematic 
          reviews of clinical effectiveness research and for developing 
          clinical protocols.

                           TITLE I--MEDICARE
                  Subtitle A--Beneficiary Improvements

            PART I--PREVENTION, MENTAL HEALTH, AND MARKETING

    SEC. 101. IMPROVEMENTS TO COVERAGE OF PREVENTIVE SERVICES.
    (a) Coverage of Additional Preventive Services.--
        (1) Coverage.--Section 1861 of the Social Security Act (42 
    U.S.C. 1395x), as amended by section 114 of the Medicare, Medicaid, 
    and SCHIP Extension Act of 2007 (Public Law 110-173), is amended--
            (A) in subsection (s)(2)--
                (i) in subparagraph (Z), by striking ``and'' after the 
            semicolon at the end;
                (ii) in subparagraph (AA), by adding ``and'' after the 
            semicolon at the end; and
                (iii) by adding at the end the following new 
            subparagraph:
        ``(BB) additional preventive services (described in subsection 
    (ddd)(1));''; and
            (B) by adding at the end the following new subsection:

                    ``Additional Preventive Services

    ``(ddd)(1) The term `additional preventive services' means services 
not otherwise described in this title that identify medical conditions 
or risk factors and that the Secretary determines are--
        ``(A) reasonable and necessary for the prevention or early 
    detection of an illness or disability;
        ``(B) recommended with a grade of A or B by the United States 
    Preventive Services Task Force; and
        ``(C) appropriate for individuals entitled to benefits under 
    part A or enrolled under part B.
    ``(2) In making determinations under paragraph (1) regarding the 
coverage of a new service, the Secretary shall use the process for 
making national coverage determinations (as defined in section 
1869(f)(1)(B)) under this title. As part of the use of such process, 
the Secretary may conduct an assessment of the relation between 
predicted outcomes and the expenditures for such service and may take 
into account the results of such assessment in making such 
determination.''.
        (2) Payment and coinsurance for additional preventive 
    services.--Section 1833(a)(1) of the Social Security Act (42 U.S.C. 
    1395l(a)(1)) is amended--
            (A) by striking ``and'' before ``(V)''; and
            (B) by inserting before the semicolon at the end the 
        following: ``, and (W) with respect to additional preventive 
        services (as defined in section 1861(ddd)(1)), the amount paid 
        shall be (i) in the case of such services which are clinical 
        diagnostic laboratory tests, the amount determined under 
        subparagraph (D), and (ii) in the case of all other such 
        services, 80 percent of the lesser of the actual charge for the 
        service or the amount determined under a fee schedule 
        established by the Secretary for purposes of this 
        subparagraph''.
        (3) Conforming amendment regarding coverage.--Section 
    1862(a)(1)(A) of the Social Security Act (42 U.S.C. 1395y(a)(1)(A)) 
    is amended by inserting ``or additional preventive services (as 
    described in section 1861(ddd)(1))'' after ``succeeding 
    subparagraph''.
        (4) Rule of construction.--Nothing in the provisions of, or 
    amendments made by, this subsection shall be construed to provide 
    coverage under title XVIII of the Social Security Act of items and 
    services for the treatment of a medical condition that is not 
    otherwise covered under such title.
    (b) Revisions to Initial Preventive Physical Examination.--
        (1) In general.--Section 1861(ww) of the Social Security Act 
    (42 U.S.C. 1395x(ww)) is amended--
            (A) in paragraph (1)--
                (i) by inserting ``body mass index,'' after ``weight'';
                (ii) by striking ``, and an electrocardiogram''; and
                (iii) by inserting ``and end-of-life planning (as 
            defined in paragraph (3)) upon the agreement with the 
            individual'' after ``paragraph (2)'';
            (B) in paragraph (2), by adding at the end the following 
        new subparagraphs:
        ``(M) An electrocardiogram.
        ``(N) Additional preventive services (as defined in subsection 
    (ddd)(1)).''; and
            (C) by adding at the end the following new paragraph:
    ``(3) For purposes of paragraph (1), the term `end-of-life 
planning' means verbal or written information regarding--
        ``(A) an individual's ability to prepare an advance directive 
    in the case that an injury or illness causes the individual to be 
    unable to make health care decisions; and
        ``(B) whether or not the physician is willing to follow the 
    individual's wishes as expressed in an advance directive.''.
        (2) Waiver of application of deductible.--The first sentence of 
    section 1833(b) of the Social Security Act (42 U.S.C. 1395l(b)) is 
    amended--
            (A) by striking ``and'' before ``(8)''; and
            (B) by inserting ``, and (9) such deductible shall not 
        apply with respect to an initial preventive physical 
        examination (as defined in section 1861(ww))'' before the 
        period at the end.
        (3) Extension of eligibility period from six months to one 
    year.--Section 1862(a)(1)(K) of the Social Security Act (42 U.S.C. 
    1395y(a)(1)(K)) is amended by striking ``6 months'' and inserting 
    ``1 year''.
        (4) Technical correction.--Section 1862(a)(1)(K) of the Social 
    Security Act (42 U.S.C. 1395y(a)(1)(K)) is amended by striking 
    ``not later'' and inserting ``more''.
    (c) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after January 1, 2009.
    SEC. 102. ELIMINATION OF DISCRIMINATORY COPAYMENT RATES FOR 
      MEDICARE OUTPATIENT PSYCHIATRIC SERVICES.
    Section 1833(c) of the Social Security Act (42 U.S.C. 1395l(c)) is 
amended to read as follows:
    ``(c)(1) Notwithstanding any other provision of this part, with 
respect to expenses incurred in a calendar year in connection with the 
treatment of mental, psychoneurotic, and personality disorders of an 
individual who is not an inpatient of a hospital at the time such 
expenses are incurred, there shall be considered as incurred expenses 
for purposes of subsections (a) and (b)--
        ``(A) for expenses incurred in years prior to 2010, only 62\1/
    2\ percent of such expenses;
        ``(B) for expenses incurred in 2010 or 2011, only 68\3/4\ 
    percent of such expenses;
        ``(C) for expenses incurred in 2012, only 75 percent of such 
    expenses;
        ``(D) for expenses incurred in 2013, only 81\1/4\ percent of 
    such expenses; and
        ``(E) for expenses incurred in 2014 or any subsequent calendar 
    year, 100 percent of such expenses.
    ``(2) For purposes of subparagraphs (A) through (D) of paragraph 
(1), the term `treatment' does not include brief office visits (as 
defined by the Secretary) for the sole purpose of monitoring or 
changing drug prescriptions used in the treatment of such disorders or 
partial hospitalization services that are not directly provided by a 
physician.''.
    SEC. 103. PROHIBITIONS AND LIMITATIONS ON CERTAIN SALES AND 
      MARKETING ACTIVITIES UNDER MEDICARE ADVANTAGE PLANS AND 
      PRESCRIPTION DRUG PLANS.
    (a) Prohibitions.--
        (1) Medicare advantage program.--
            (A) In general.--Section 1851 of the Social Security Act 
        (42 U.S.C. 1395w-21) is amended--
                (i) in subsection (h)(4)--

                    (I) in subparagraph (A)--

                        (aa) by striking ``cash or other monetary 
                    rebates'' and inserting ``, subject to subsection 
                    (j)(2)(C), cash, gifts, prizes, or other monetary 
                    rebates''; and
                        (bb) by striking ``, and'' at the end and 
                    inserting a semicolon;

                    (II) in subparagraph (B), by striking the period at 
                the end and inserting a semicolon; and
                    (III) by adding at the end the following new 
                subparagraph:

            ``(C) shall not permit a Medicare Advantage organization 
        (or the agents, brokers, and other third parties representing 
        such organization) to conduct the prohibited activities 
        described in subsection (j)(1); and''; and
                (ii) by adding at the end the following new subsection:
    ``(j) Prohibited Activities Described and Limitations on the 
Conduct of Certain Other Activities.--
        ``(1) Prohibited activities described.--The following 
    prohibited activities are described in this paragraph:
            ``(A) Unsolicited means of direct contact.--Any unsolicited 
        means of direct contact of prospective enrollees, including 
        soliciting door-to-door or any outbound telemarketing without 
        the prospective enrollee initiating contact.
            ``(B) Cross-selling.--The sale of other non-health related 
        products (such as annuities and life insurance) during any 
        sales or marketing activity or presentation conducted with 
        respect to a Medicare Advantage plan.
            ``(C) Meals.--The provision of meals of any sort, 
        regardless of value, to prospective enrollees at promotional 
        and sales activities.
            ``(D) Sales and marketing in health care settings and at 
        educational events.--Sales and marketing activities for the 
        enrollment of individuals in Medicare Advantage plans that are 
        conducted--
                ``(i) in health care settings in areas where health 
            care is delivered to individuals (such as physician offices 
            and pharmacies), except in the case where such activities 
            are conducted in common areas in health care settings; and
                ``(ii) at educational events.''.
        (2) Medicare prescription drug program.--Section 1860D-4 of the 
    Social Security Act (42 U.S.C. 1395w-104) is amended by adding at 
    the end the following new subsection:
    ``(l) Requirements With Respect to Sales and Marketing 
Activities.--The following provisions shall apply to a PDP sponsor (and 
the agents, brokers, and other third parties representing such sponsor) 
in the same manner as such provisions apply to a Medicare Advantage 
organization (and the agents, brokers, and other third parties 
representing such organization):
        ``(1) The prohibition under section 1851(h)(4)(C) on conducting 
    activities described in section 1851(j)(1).''.
        (3) Effective date.--The amendments made by this subsection 
    shall apply to plan years beginning on or after January 1, 2009.
    (b) Limitations.--
        (1) Medicare advantage program.--Section 1851 of the Social 
    Security Act (42 U.S.C. 1395w-21), as amended by subsection (a)(1), 
    is amended--
            (A) in subsection (h)(4), by adding at the end the 
        following new subparagraph:
            ``(D) shall only permit a Medicare Advantage organization 
        (and the agents, brokers, and other third parties representing 
        such organization) to conduct the activities described in 
        subsection (j)(2) in accordance with the limitations 
        established under such subsection.''; and
            (B) in subsection (j), by adding at the end the following 
        new paragraph:
        ``(2) Limitations.--The Secretary shall establish limitations 
    with respect to at least the following:
            ``(A) Scope of marketing appointments.--The scope of any 
        appointment with respect to the marketing of a Medicare 
        Advantage plan. Such limitation shall require advance agreement 
        with a prospective enrollee on the scope of the marketing 
        appointment and documentation of such agreement by the Medicare 
        Advantage organization. In the case where the marketing 
        appointment is in person, such documentation shall be in 
        writing.
            ``(B) Co-branding.--The use of the name or logo of a co-
        branded network provider on Medicare Advantage plan membership 
        and marketing materials.
            ``(C) Limitation of gifts to nominal dollar value.--The 
        offering of gifts and other promotional items other than those 
        that are of nominal value (as determined by the Secretary) to 
        prospective enrollees at promotional activities.
            ``(D) Compensation.--The use of compensation other than as 
        provided under guidelines established by the Secretary. Such 
        guidelines shall ensure that the use of compensation creates 
        incentives for agents and brokers to enroll individuals in the 
        Medicare Advantage plan that is intended to best meet their 
        health care needs.
            ``(E) Required training, annual retraining, and testing of 
        agents, brokers, and other third parties.--The use by a 
        Medicare Advantage organization of any individual as an agent, 
        broker, or other third party representing the organization that 
        has not completed an initial training and testing program and 
        does not complete an annual retraining and testing program.''.
        (2) Medicare prescription drug program.--Section 1860D-4(l) of 
    the Social Security Act, as added by subsection (a)(2), is amended 
    by adding at the end the following new paragraph:
        ``(2) The requirement under section 1851(h)(4)(D) to conduct 
    activities described in section 1851(j)(2) in accordance with the 
    limitations established under such subsection.''.
        (3) Effective date.--The amendments made by this subsection 
    shall take effect on a date specified by the Secretary (but in no 
    case later than November 15, 2008).
    (c) Required Inclusion of Plan Type in Plan Name.--
        (1) Medicare advantage program.--Section 1851(h) of the Social 
    Security Act (42 U.S.C. 1395w-21(h)) is amended by adding at the 
    end following new paragraph:
        ``(6) Required inclusion of plan type in plan name.--For plan 
    years beginning on or after January 1, 2010, a Medicare Advantage 
    organization must ensure that the name of each Medicare Advantage 
    plan offered by the Medicare Advantage organization includes the 
    plan type of the plan (using standard terminology developed by the 
    Secretary).''.
        (2) Prescription drug plans.--Section 1860D-4(l) of the Social 
    Security Act, as added by subsection (a)(2) and amended by 
    subsection (b)(2), is amended by adding at the end the following 
    new paragraph:
        ``(3) The inclusion of the plan type in the plan name under 
    section 1851(h)(6).''.
    (d) Strengthening the Ability of States to Act in Collaboration 
With the Secretary to Address Fraudulent or Inappropriate Marketing 
Practices.--
        (1) Medicare advantage program.--Section 1851(h) of the Social 
    Security Act (42 U.S.C. 1395w-21(h), as amended by subsection 
    (c)(1), is amended by adding at the end the following new 
    paragraph:
        ``(7) Strengthening the ability of states to act in 
    collaboration with the secretary to address fraudulent or 
    inappropriate marketing practices.--
            ``(A) Appointment of agents and brokers.--Each Medicare 
        Advantage organization shall--
                ``(i) only use agents and brokers who have been 
            licensed under State law to sell Medicare Advantage plans 
            offered by the Medicare Advantage organization;
                ``(ii) in the case where a State has a State 
            appointment law, abide by such law; and
                ``(iii) report to the applicable State the termination 
            of any such agent or broker, including the reasons for such 
            termination (as required under applicable State law).
            ``(B) Compliance with state information requests.--Each 
        Medicare Advantage organization shall comply in a timely manner 
        with any request by a State for information regarding the 
        performance of a licensed agent, broker, or other third party 
        representing the Medicare Advantage organization as part of an 
        investigation by the State into the conduct of the agent, 
        broker, or other third party.''.
        (2) Prescription drug plans.--Section 1860D-4(l) of the Social 
    Security Act, as amended by subsection (c)(2), is amended by adding 
    at the end the following new paragraph:
        ``(4) The requirements regarding the appointment of agents and 
    brokers and compliance with State information requests under 
    subparagraphs (A) and (B), respectively, of section 1851(h)(7).''.
        (3) Effective date.--The amendments made by this subsection 
    shall apply to plan years beginning on or after January 1, 2009.
    SEC. 104. IMPROVEMENTS TO THE MEDIGAP PROGRAM.
    (a) Implementation of NAIC Recommendations.--
        (1) In general.--The Secretary of Health and Human Services (in 
    this section referred to as the ``Secretary'') shall provide for 
    implementation of the changes in the NAIC model law and regulations 
    approved by the National Association of Insurance Commissioners in 
    its Model #651 (``Model Regulation to Implement the NAIC Medicare 
    Supplement Insurance Minimum Standards Model Act'') on March 11, 
    2007, as modified to reflect the changes made under this Act and 
    the Genetic Information Nondiscrimination Act of 2008 (Public Law 
    110-233).
        (2) Implementation dates.--
            (A) In general.--The modifications to Model #651 required 
        under paragraph (1) shall be completed by the National 
        Association of Insurance Commissioners not later than October 
        31, 2008. Except as provided in subparagraph (B), each State 
        shall have 1 year from the date the National Association of 
        Insurance Commissioners adopts the revised NAIC model law and 
        regulations (as changed by Model #651, as so modified) to 
        conform the regulatory program established by the State to such 
        revised NAIC model law and regulations.
            (B) Extension of effective date for state law amendment.--
        In the case of a State which the Secretary determines requires 
        State legislation in order to conform the regulatory program 
        established by the State to such revised NAIC model law and 
        regulations, the State shall not be regarded as failing to 
        comply with the requirements of this section solely on the 
        basis of its failure to meet such requirements before the first 
        day of the first calendar quarter beginning after the close of 
        the first regular session of the State legislature that begins 
        after the date of the enactment of this Act. For purposes of 
        the previous sentence, in the case of a State that has a 2-year 
        legislative session, each year of the session is considered to 
        be a separate regular session of the State legislature.
            (C) Transition dates.--No carrier may issue a new or 
        revised medicare supplemental policy or certificate under 
        section 1882 of the Social Security Act (42 U.S.C. 1395ss) that 
        meets the requirements of such revised NAIC model law and 
        regulations for coverage effective prior to June 1, 2010. A 
        carrier may continue to offer or issue a medicare supplemental 
        policy under such section that meets the requirements of the 
        NAIC model law and regulations and State law (as in effect 
        prior to the adoption of such revised NAIC model law and 
        regulations) prior to June 1, 2010. Nothing shall preclude 
        carriers from marketing new or revised medicare supplemental 
        policies or certificates that meet the requirements of such 
        revised NAIC model law and regulations on or after the date on 
        which the State conforms the regulatory program established by 
        the State to such revised NAIC model law and regulations.
    (b) Required Offering of a Range of Policies.--Section 1882(o) of 
the Social Security Act (42 U.S.C. 1395s(o)), as amended by section 
104(b)(3) of the Genetic Information Nondiscrimination Act of 2008 
(Public Law 110-233), is amended by adding at the end the following new 
paragraph:
        ``(5) In addition to the requirement under paragraph (2), the 
    issuer of the policy must make available to the individual at least 
    Medicare supplemental policies with benefit packages classified as 
    `C' or `F'.''.
    (c) Clarification.--Any health insurance policy that provides 
reimbursement for expenses incurred for items and services for which 
payment may be made under title XVIII of the Social Security Act but 
which are not reimbursable by reason of the applicability of 
deductibles, coinsurance, copayments or other limitations imposed by a 
Medicare Advantage plan (including a Medicare Advantage private fee-
for-service plan) under part C of such title shall comply with the 
requirements of section 1882(o) of the such Act (42 U.S.C. 1395ss(o)).

                      PART II--LOW-INCOME PROGRAMS

    SEC. 111. EXTENSION OF QUALIFYING INDIVIDUAL (QI) PROGRAM.
    (a) Extension.--Section 1902(a)(10)(E)(iv) of the Social Security 
Act (42 U.S.C. 1396a(a)(10)(E)(iv)) is amended by striking ``June 
2008'' and inserting ``December 2009''.
    (b) Extending Total Amount Available for Allocation.--Section 
1933(g) of such Act (42 U.S.C. 1396u-3(g)) is amended--
        (1) in paragraph (2)--
            (A) by striking ``and'' at the end of subparagraph (H);
            (B) in subparagraph (I)--
                (i) by striking ``June 30'' and inserting ``September 
            30'';
                (ii) by striking ``$200,000,000'' and inserting 
            ``$300,000,000''; and
                (iii) by striking the period at the end and inserting a 
            semicolon; and
            (C) by adding at the end the following new subparagraphs:
            ``(J) for the period that begins on October 1, 2008, and 
        ends on December 31, 2008, the total allocation amount is 
        $100,000,000;
            ``(K) for the period that begins on January 1, 2009, and 
        ends on September 30, 2009, the total allocation amount is 
        $350,000,000; and
            ``(L) for the period that begins on October 1, 2009, and 
        ends on December 31, 2009, the total allocation amount is 
        $150,000,000.''; and
        (2) in paragraph (3), in the matter preceding subparagraph (A), 
    by striking ``or (H)'' and inserting ``(H), (J), or (L)''.
    SEC. 112. APPLICATION OF FULL LIS SUBSIDY ASSETS TEST UNDER 
      MEDICARE SAVINGS PROGRAM.
    Section 1905(p)(1)(C) of such Act (42 U.S.C. 1396d(p)(1)(C)) is 
amended by inserting before the period at the end the following: ``or, 
effective beginning with January 1, 2010, whose resources (as so 
determined) do not exceed the maximum resource level applied for the 
year under subparagraph (D) of section 1860D-14(a)(3) (determined 
without regard to the life insurance policy exclusion provided under 
subparagraph (G) of such section) applicable to an individual or to the 
individual and the individual's spouse (as the case may be)''.
    SEC. 113. ELIMINATING BARRIERS TO ENROLLMENT.
    (a) SSA Assistance With Medicare Savings Program and Low-Income 
Subsidy Program Applications.--Section 1144 of such Act (42 U.S.C. 
1320b-14) is amended by adding at the end the following new subsection:
    ``(c) Assistance With Medicare Savings Program and Low-Income 
Subsidy Program Applications.--
        ``(1) Distribution of applications and information to 
    individuals who are potentially eligible for low-income subsidy 
    program.--For each individual who submits an application for low-
    income subsidies under section 1860D-14, requests an application 
    for such subsidies, or is otherwise identified as an individual who 
    is potentially eligible for such subsidies, the Commissioner shall 
    do the following:
            ``(A) Provide information describing the low-income subsidy 
        program under section 1860D-14 and the Medicare Savings Program 
        (as defined in paragraph (7)).
            ``(B) Provide an application for enrollment under such low-
        income subsidy program (if not already received by the 
        Commissioner).
            ``(C) In accordance with paragraph (3), transmit data from 
        such an application for purposes of initiating an application 
        for benefits under the Medicare Savings Program.
            ``(D) Provide information on how the individual may obtain 
        assistance in completing such application and an application 
        under the Medicare Savings Program, including information on 
        how the individual may contact the State health insurance 
        assistance program (SHIP).
            ``(E) Make the application described in subparagraph (B) 
        and the information described in subparagraphs (A) and (D) 
        available at local offices of the Social Security 
        Administration.
        ``(2) Training personnel in explaining benefit programs and 
    assisting in completing lis application.--The Commissioner shall 
    provide training to those employees of the Social Security 
    Administration who are involved in receiving applications for 
    benefits described in paragraph (1)(B) in order that they may 
    promote beneficiary understanding of the low-income subsidy program 
    and the Medicare Savings Program in order to increase participation 
    in these programs. Such employees shall provide assistance in 
    completing an application described in paragraph (1)(B) upon 
    request.
        ``(3) Transmittal of data to states.--Beginning on January 1, 
    2010, with the consent of an individual completing an application 
    for benefits described in paragraph (1)(B), the Commissioner shall 
    electronically transmit to the appropriate State Medicaid agency 
    data from such application, as determined by the Commissioner, 
    which transmittal shall initiate an application of the individual 
    for benefits under the Medicare Savings Program with the State 
    Medicaid agency. In order to ensure that such data transmittal 
    provides effective assistance for purposes of State adjudication of 
    applications for benefits under the Medicare Savings Program, the 
    Commissioner shall consult with the Secretary, after the Secretary 
    has consulted with the States, regarding the content, form, 
    frequency, and manner in which data (on a uniform basis for all 
    States) shall be transmitted under this subparagraph.
        ``(4) Coordination with outreach.--The Commissioner shall 
    coordinate outreach activities under this subsection in connection 
    with the low-income subsidy program and the Medicare Savings 
    Program.
        ``(5) Reimbursement of social security administration 
    administrative costs.--
            ``(A) Initial medicare savings program costs; additional 
        low-income subsidy costs.--
                ``(i) Initial medicare savings program costs.--There 
            are hereby appropriated to the Commissioner to carry out 
            this subsection, out of any funds in the Treasury not 
            otherwise appropriated, $24,100,000. The amount 
            appropriated under ths clause shall be available on October 
            1, 2008, and shall remain available until expended.
                ``(ii) Additional amount for low-income subsidy 
            activities.--There are hereby appropriated to the 
            Commissioner, out of any funds in the Treasury not 
            otherwise appropriated, $24,800,000 for fiscal year 2009 to 
            carry out low-income subsidy activities under section 
            1860D-14 and the Medicare Savings Program (in accordance 
            with this subsection), to remain available until expended. 
            Such funds shall be in addition to the Social Security 
            Administration's Limitation on Administrative Expenditure 
            appropriations for such fiscal year.
            ``(B) Subsequent funding under agreements.--
                ``(i) In general.--Effective for fiscal years beginning 
            on or after October 1, 2010, the Commissioner and the 
            Secretary shall enter into an agreement which shall provide 
            funding (subject to the amount appropriated under clause 
            (ii)) to cover the administrative costs of the 
            Commissioner's activities under this subsection. Such 
            agreement shall--

                    ``(I) provide funds to the Commissioner for the 
                full cost of the Social Security Administration's work 
                related to the Medicare Savings Program required under 
                this section;
                    ``(II) provide such funding quarterly in advance of 
                the applicable quarter based on estimating methodology 
                agreed to by the Commissioner and the Secretary; and
                    ``(III) require an annual accounting and 
                reconciliation of the actual costs incurred and funds 
                provided under this subsection.

                ``(ii) Appropriation.--There are hereby appropriated to 
            the Secretary solely for the purpose of providing payments 
            to the Commissioner pursuant to an agreement specified in 
            clause (i) that is in effect, out of any funds in the 
            Treasury not otherwise appropriated, not more than 
            $3,000,000 for fiscal year 2011 and each fiscal year 
            thereafter.
            ``(C) Limitation.--In no case shall funds from the Social 
        Security Administration's Limitation on Administrative Expenses 
        be used to carry out activities related to the Medicare Savings 
        Program. For fiscal years beginning on or after October 1, 
        2010, no such activities shall be undertaken by the Social 
        Security Administration unless the agreement specified in 
        subparagraph (B) is in effect and full funding has been 
        provided to the Commissioner as specified in such subparagraph.
        ``(6) GAO analysis and report.--
            ``(A) Analysis.--The Comptroller General of the United 
        States shall prepare an analysis of the impact of this 
        subsection--
                ``(i) in increasing participation in the Medicare 
            Savings Program, and
                ``(ii) on States and the Social Security 
            Administration.
            ``(B) Report.--Not later than January 1, 2012, the 
        Comptroller General shall submit to Congress, the Commissioner, 
        and the Secretary a report on the analysis conducted under 
        subparagraph (A).
        ``(7) Medicare savings program defined.--For purposes of this 
    subsection, the term `Medicare Savings Program' means the program 
    of medical assistance for payment of the cost of medicare cost-
    sharing under the Medicaid program pursuant to sections 
    1902(a)(10)(E) and 1933.''.
    (b) Medicaid Agency Consideration of Data Transmittal.--
        (1) In general.--Section 1935(a) of such Act (42 U.S.C. 1396u-
    5(a)) is amended by adding at the end the following new paragraph:
        ``(4) Consideration of data transmitted by the social security 
    administration for purposes of medicare savings program.--The State 
    shall accept data transmitted under section 1144(c)(3) and act on 
    such data in the same manner and in accordance with the same 
    deadlines as if the data constituted an initiation of an 
    application for benefits under the Medicare Savings Program (as 
    defined for purposes of such section) that had been submitted 
    directly by the applicant. The date of the individual's application 
    for the low income subsidy program from which the data have been 
    derived shall constitute the date of filing of such application for 
    benefits under the Medicare Savings Program.''.
        (2) Conforming amendments.--Section 1935(a) of such Act (42 
    U.S.C. 1396u-5(a)) is amended in the subsection heading by striking 
    ``and'' and by inserting ``, and Medicare Cost-Sharing'' after 
    ``Assistance''.
    (c) Effective Date.--Except as otherwise provided, the amendments 
made by this section shall take effect on January 1, 2010.
    SEC. 114. ELIMINATION OF MEDICARE PART D LATE ENROLLMENT PENALTIES 
      PAID BY SUBSIDY ELIGIBLE INDIVIDUALS.
    (a) Waiver of Late Enrollment Penalty.--
        (1) In general.--Section 1860D-13(b) of the Social Security Act 
    (42 U.S.C. 1395w-113(b)) is amended by adding at the end the 
    following new paragraph:
        ``(8) Waiver of penalty for subsidy-eligible individuals.--In 
    no case shall a part D eligible individual who is determined to be 
    a subsidy eligible individual (as defined in section 1860D-
    14(a)(3)) be subject to an increase in the monthly beneficiary 
    premium established under subsection (a).''.
        (2) Conforming amendment.--Section 1860D-14(a)(1)(A) of the 
    Social Security Act (42 U.S.C. 1395w-114(a)(1)(A)) is amended by 
    striking ``equal to'' and all that follows through the period and 
    inserting ``equal to 100 percent of the amount described in 
    subsection (b)(1), but not to exceed the premium amount specified 
    in subsection (b)(2)(B).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to subsidies for months beginning with January 2009.
    SEC. 115. ELIMINATING APPLICATION OF ESTATE RECOVERY.
    (a) In General.--Section 1917(b)(1)(B)(ii) of the Social Security 
Act (42 U.S.C. 1396p(b)(1)(B)(ii)) is amended by inserting ``(but not 
including medical assistance for medicare cost-sharing or for benefits 
described in section 1902(a)(10)(E))'' before the period at the end.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect as of January 1, 2010.
    SEC. 116. EXEMPTIONS FROM INCOME AND RESOURCES FOR DETERMINATION OF 
      ELIGIBILITY FOR LOW-INCOME SUBSIDY.
    (a) In General.--Section 1860D-14(a)(3) of the Social Security Act 
(42 U.S.C. 1395w-114(a)(3)) is amended--
        (1) in subparagraph (C)(i), by inserting ``and except that 
    support and maintenance furnished in kind shall not be counted as 
    income'' after ``section 1902(r)(2)'';
        (2) in subparagraph (D), in the matter before clause (i), by 
    inserting ``subject to the life insurance policy exclusion provided 
    under subparagraph (G)'' before ``)'';
        (3) in subparagraph (E)(i), in the matter before subclause (I), 
    by inserting ``subject to the life insurance policy exclusion 
    provided under subparagraph (G)'' before ``)''; and
        (4) by adding at the end the following new subparagraph:
            ``(G) Life insurance policy exclusion.--In determining the 
        resources of an individual (and the eligible spouse of the 
        individual, if any) under section 1613 for purposes of 
        subparagraphs (D) and (E) no part of the value of any life 
        insurance policy shall be taken into account.''.
    (b) Effective Date.--The amendments made by this section shall take 
effect with respect to applications filed on or after January 1, 2010.
    SEC. 117. JUDICIAL REVIEW OF DECISIONS OF THE COMMISSIONER OF 
      SOCIAL SECURITY UNDER THE MEDICARE PART D LOW-INCOME SUBSIDY 
      PROGRAM.
    (a) In General.--Section 1860D-14(a)(3)(B)(iv) of the Social 
Security Act (42 U.S.C. 1395w-114(a)(3)(B)(iv)) is amended--
        (1) in subclause (I), by striking ``and'' at the end;
        (2) in subclause (II), by striking the period at the end and 
    inserting ``; and''; and
        (3) by adding at the end the following new subclause:

                    ``(III) judicial review of the final decision of 
                the Commissioner made after a hearing shall be 
                available to the same extent, and with the same 
                limitations, as provided in subsections (g) and (h) of 
                section 205.''.

    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect as if included in the enactment of section 101 of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003.
    SEC. 118. TRANSLATION OF MODEL FORM.
    (a) In General.--Section 1905(p)(5)(A) of the Social Security Act 
(42 U.S.C. 1396d(p)(5)(A)) is amended by adding at the end the 
following: ``The Secretary shall provide for the translation of such 
application form into at least the 10 languages (other than English) 
that are most often used by individuals applying for hospital insurance 
benefits under section 226 or 226A and shall make the translated forms 
available to the States and to the Commissioner of Social Security.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on January 1, 2010.
    SEC. 119. MEDICARE ENROLLMENT ASSISTANCE.
    (a) Additional Funding for State Health Insurance Assistance 
Programs.--
        (1) Grants.--
            (A) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall use 
        amounts made available under subparagraph (B) to make grants to 
        States for State health insurance assistance programs receiving 
        assistance under section 4360 of the Omnibus Budget 
        Reconciliation Act of 1990.
            (B) Funding.--For purposes of making grants under this 
        subsection, the Secretary shall provide for the transfer, from 
        the Federal Hospital Insurance Trust Fund under section 1817 of 
        the Social Security Act (42 U.S.C. 1395i) and the Federal 
        Supplementary Medical Insurance Trust Fund under section 1841 
        of such Act (42 U.S.C. 1395t), in the same proportion as the 
        Secretary determines under section 1853(f) of such Act (42 
        U.S.C. 1395w-23(f)), of $7,500,000 to the Centers for Medicare 
        & Medicaid Services Program Management Account for fiscal year 
        2009, to remain available until expended.
        (2) Amount of grants.--The amount of a grant to a State under 
    this subsection from the total amount made available under 
    paragraph (1) shall be equal to the sum of the amount allocated to 
    the State under paragraph (3)(A) and the amount allocated to the 
    State under subparagraph (3)(B).
        (3) Allocation to states.--
            (A) Allocation based on percentage of low-income 
        beneficiaries.--The amount allocated to a State under this 
        subparagraph from \2/3\ of the total amount made available 
        under paragraph (1) shall be based on the number of individuals 
        who meet the requirement under subsection (a)(3)(A)(ii) of 
        section 1860D-14 of the Social Security Act (42 U.S.C. 1395w-
        114) but who have not enrolled to receive a subsidy under such 
        section 1860D-14 relative to the total number of individuals 
        who meet the requirement under such subsection (a)(3)(A)(ii) in 
        each State, as estimated by the Secretary.
            (B) Allocation based on percentage of rural 
        beneficiaries.--The amount allocated to a State under this 
        subparagraph from \1/3\ of the total amount made available 
        under paragraph (1) shall be based on the number of part D 
        eligible individuals (as defined in section 1860D-1(a)(3)(A) of 
        such Act (42 U.S.C. 1395w-101(a)(3)(A))) residing in a rural 
        area relative to the total number of such individuals in each 
        State, as estimated by the Secretary.
        (4) Portion of grant based on percentage of low-income 
    beneficiaries to be used to provide outreach to individuals who may 
    be subsidy eligible individuals or eligible for the medicare 
    savings program.--Each grant awarded under this subsection with 
    respect to amounts allocated under paragraph (3)(A) shall be used 
    to provide outreach to individuals who may be subsidy eligible 
    individuals (as defined in section 1860D-14(a)(3)(A) of the Social 
    Security Act (42 U.S.C. 1395w-114(a)(3)(A)) or eligible for the 
    Medicare Savings Program (as defined in subsection (f)).
    (b) Additional Funding for Area Agencies on Aging.--
        (1) Grants.--
            (A) In general.--The Secretary, acting through the 
        Assistant Secretary for Aging, shall make grants to States for 
        area agencies on aging (as defined in section 102 of the Older 
        Americans Act of 1965 (42 U.S.C. 3002)) and Native American 
        programs carried out under the Older Americans Act of 1965 (42 
        U.S.C. 3001 et seq.).
            (B) Funding.--For purposes of making grants under this 
        subsection, the Secretary shall provide for the transfer, from 
        the Federal Hospital Insurance Trust Fund under section 1817 of 
        the Social Security Act (42 U.S.C. 1395i) and the Federal 
        Supplementary Medical Insurance Trust Fund under section 1841 
        of such Act (42 U.S.C. 1395t), in the same proportion as the 
        Secretary determines under section 1853(f) of such Act (42 
        U.S.C. 1395w-23(f)), of $7,500,000 to the Administration on 
        Aging for fiscal year 2009, to remain available until expended.
        (2) Amount of grant and allocation to states based on 
    percentage of low-income and rural beneficiaries.--The amount of a 
    grant to a State under this subsection from the total amount made 
    available under paragraph (1) shall be determined in the same 
    manner as the amount of a grant to a State under subsection (a), 
    from the total amount made available under paragraph (1) of such 
    subsection, is determined under paragraph (2) and subparagraphs (A) 
    and (B) of paragraph (3) of such subsection.
        (3) Required use of funds.--
            (A) All funds.--Subject to subparagraph (B), each grant 
        awarded under this subsection shall be used to provide outreach 
        to eligible Medicare beneficiaries regarding the benefits 
        available under title XVIII of the Social Security Act.
            (B) Outreach to individuals who may be subsidy eligible 
        individuals or eligible for the medicare savings program.--
        Subsection (a)(4) shall apply to each grant awarded under this 
        subsection in the same manner as it applies to a grant under 
        subsection (a).
    (c) Additional Funding for Aging and Disability Resource Centers.--
        (1) Grants.--
            (A) In general.--The Secretary shall make grants to Aging 
        and Disability Resource Centers under the Aging and Disability 
        Resource Center grant program that are established centers 
        under such program on the date of the enactment of this Act.
            (B) Funding.--For purposes of making grants under this 
        subsection, the Secretary shall provide for the transfer, from 
        the Federal Hospital Insurance Trust Fund under section 1817 of 
        the Social Security Act (42 U.S.C. 1395i) and the Federal 
        Supplementary Medical Insurance Trust Fund under section 1841 
        of such Act (42 U.S.C. 1395t), in the same proportion as the 
        Secretary determines under section 1853(f) of such Act (42 
        U.S.C. 1395w-23(f)), of $5,000,000 to the Administration on 
        Aging for fiscal year 2009, to remain available until expended.
        (2) Required use of funds.--Each grant awarded under this 
    subsection shall be used to provide outreach to individuals 
    regarding the benefits available under the Medicare prescription 
    drug benefit under part D of title XVIII of the Social Security Act 
    and under the Medicare Savings Program.
    (d) Coordination of Efforts To Inform Older Americans About 
Benefits Available Under Federal and State Programs.--
        (1) In general.--The Secretary, acting through the Assistant 
    Secretary for Aging, in cooperation with related Federal agency 
    partners, shall make a grant to, or enter into a contract with, a 
    qualified, experienced entity under which the entity shall--
            (A) maintain and update web-based decision support tools, 
        and integrated, person-centered systems, designed to inform 
        older individuals (as defined in section 102 of the Older 
        Americans Act of 1965 (42 U.S.C. 3002)) about the full range of 
        benefits for which the individuals may be eligible under 
        Federal and State programs;
            (B) utilize cost-effective strategies to find older 
        individuals with the greatest economic need (as defined in such 
        section 102) and inform the individuals of the programs;
            (C) develop and maintain an information clearinghouse on 
        best practices and the most cost-effective methods for finding 
        older individuals with greatest economic need and informing the 
        individuals of the programs; and
            (D) provide, in collaboration with related Federal agency 
        partners administering the Federal programs, training and 
        technical assistance on the most effective outreach, screening, 
        and follow-up strategies for the Federal and State programs.
        (2) Funding.--For purposes of making a grant or entering into a 
    contract under paragraph (1), the Secretary shall provide for the 
    transfer, from the Federal Hospital Insurance Trust Fund under 
    section 1817 of the Social Security Act (42 U.S.C. 1395i) and the 
    Federal Supplementary Medical Insurance Trust Fund under section 
    1841 of such Act (42 U.S.C. 1395t), in the same proportion as the 
    Secretary determines under section 1853(f) of such Act (42 U.S.C. 
    1395w-23(f)), of $5,000,000 to the Administration on Aging for 
    fiscal year 2009, to remain available until expended.
    (e) Reprogramming Funds From Medicare, Medicaid, and SCHIP 
Extension Act of 2007.--The Secretary shall only use the $5,000,000 in 
funds allocated to make grants to States for Area Agencies on Aging and 
Aging Disability and Resource Centers for the period of fiscal years 
2008 through 2009 under section 118 of the Medicare, Medicaid, and 
SCHIP Extension Act of 2007 (Public Law 110-173) for the sole purpose 
of providing outreach to individuals regarding the benefits available 
under the Medicare prescription drug benefit under part D of title 
XVIII of the Social Security Act. The Secretary shall republish the 
request for proposals issued on April 17, 2008, in order to comply with 
the preceding sentence.
    (f) Medicare Savings Program Defined.--For purposes of this 
section, the term ``Medicare Savings Program'' means the program of 
medical assistance for payment of the cost of medicare cost-sharing 
under the Medicaid program pursuant to sections 1902(a)(10)(E) and 1933 
of the Social Security Act (42 U.S.C. 1396a(a)(10)(E), 1396u-3).

               Subtitle B--Provisions Relating to Part A

    SEC. 121. EXPANSION AND EXTENSION OF THE MEDICARE RURAL HOSPITAL 
      FLEXIBILITY PROGRAM.
    (a) In General.--Section 1820(g) of the Social Security Act (42 
U.S.C. 1395i-4(g)) is amended by adding at the end the following new 
paragraph:
        ``(6) Providing mental health services and other health 
    services to veterans and other residents of rural areas.--
            ``(A) Grants to states.--The Secretary may award grants to 
        States that have submitted applications in accordance with 
        subparagraph (B) for increasing the delivery of mental health 
        services or other health care services deemed necessary to meet 
        the needs of veterans of Operation Iraqi Freedom and Operation 
        Enduring Freedom living in rural areas (as defined for purposes 
        of section 1886(d) and including areas that are rural census 
        tracks, as defined by the Administrator of the Health Resources 
        and Services Administration), including for the provision of 
        crisis intervention services and the detection of post-
        traumatic stress disorder, traumatic brain injury, and other 
        signature injuries of veterans of Operation Iraqi Freedom and 
        Operation Enduring Freedom, and for referral of such veterans 
        to medical facilities operated by the Department of Veterans 
        Affairs, and for the delivery of such services to other 
        residents of such rural areas.
            ``(B) Application.--
                ``(i) In general.--An application is in accordance with 
            this subparagraph if the State submits to the Secretary at 
            such time and in such form as the Secretary may require an 
            application containing the assurances described in 
            subparagraphs (A)(ii) and (A)(iii) of subsection (b)(1).
                ``(ii) Consideration of regional approaches, networks, 
            or technology.--The Secretary may, as appropriate in 
            awarding grants to States under subparagraph (A), consider 
            whether the application submitted by a State under this 
            subparagraph includes 1 or more proposals that utilize 
            regional approaches, networks, health information 
            technology, telehealth, or telemedicine to deliver services 
            described in subparagraph (A) to individuals described in 
            that subparagraph. For purposes of this clause, a network 
            may, as the Secretary determines appropriate, include 
            Federally qualified health centers (as defined in section 
            1861(aa)(4)), rural health clinics (as defined in section 
            1861(aa)(2)), home health agencies (as defined in section 
            1861(o)), community mental health centers (as defined in 
            section 1861(ff)(3)(B)) and other providers of mental 
            health services, pharmacists, local government, and other 
            providers deemed necessary to meet the needs of veterans.
                ``(iii) Coordination at local level.--The Secretary 
            shall require, as appropriate, a State to demonstrate 
            consultation with the hospital association of such State, 
            rural hospitals located in such State, providers of mental 
            health services, or other appropriate stakeholders for the 
            provision of services under a grant awarded under this 
            paragraph.
                ``(iv) Special consideration of certain applications.--
            In awarding grants to States under subparagraph (A), the 
            Secretary shall give special consideration to applications 
            submitted by States in which veterans make up a high 
            percentage (as determined by the Secretary) of the total 
            population of the State. Such consideration shall be given 
            without regard to the number of veterans of Operation Iraqi 
            Freedom and Operation Enduring Freedom living in the areas 
            in which mental health services and other health care 
            services would be delivered under the application.
            ``(C) Coordination with va.--The Secretary shall, as 
        appropriate, consult with the Director of the Office of Rural 
        Health of the Department of Veterans Affairs in awarding and 
        administering grants to States under subparagraph (A).
            ``(D) Use of funds.--A State awarded a grant under this 
        paragraph may, as appropriate, use the funds to reimburse 
        providers of services described in subparagraph (A) to 
        individuals described in that subparagraph.
            ``(E) Limitation on use of grant funds for administrative 
        expenses.--A State awarded a grant under this paragraph may not 
        expend more than 15 percent of the amount of the grant for 
        administrative expenses.
            ``(F) Independent evaluation and final report.--The 
        Secretary shall provide for an independent evaluation of the 
        grants awarded under subparagraph (A). Not later than 1 year 
        after the date on which the last grant is awarded to a State 
        under such subparagraph, the Secretary shall submit a report to 
        Congress on such evaluation. Such report shall include an 
        assessment of the impact of such grants on increasing the 
        delivery of mental health services and other health services to 
        veterans of the United States Armed Forces living in rural 
        areas (as so defined and including such areas that are rural 
        census tracks), with particular emphasis on the impact of such 
        grants on the delivery of such services to veterans of 
        Operation Enduring Freedom and Operation Iraqi Freedom, and to 
        other individuals living in such rural areas.''.
    (b) Use of Funds for Federal Administrative Expenses.--Section 
1820(g)(5) of the Social Security Act (42 U.S.C. 1395i-4(g)(5)) is 
amended--
        (1) by striking ``beginning with fiscal year 2005'' and 
    inserting ``for each of fiscal years 2005 through 2008''; and
        (2) by inserting ``and, of the total amount appropriated for 
    grants under paragraphs (1), (2), and (6) for a fiscal year 
    (beginning with fiscal year 2009)'' after ``2005)''.
    (c) Extension of Authorization for FLEX Grants.--Section 1820(j) of 
the Social Security Act (42 U.S.C. 1395i-4(j)) is amended--
        (1) by striking ``and for'' and inserting ``for''; and
        (2) by inserting ``, for making grants to all States under 
    paragraphs (1) and (2) of subsection (g), $55,000,000 in each of 
    fiscal years 2009 and 2010, and for making grants to all States 
    under paragraph (6) of subsection (g), $50,000,000 in each of 
    fiscal years 2009 and 2010, to remain available until expended'' 
    before the period at the end.
    (d) Medicare Rural Hospital Flexibility Program.--Section 
1820(g)(1) of the Social Security Act (42 U.S.C. 1395i-4(g)(1)) is 
amended--
        (1) in subparagraph (B), by striking ``and'' at the end;
        (2) in subparagraph (C), by striking the period at the end and 
    inserting ``; and''; and
        (3) by adding at the end the following new subparagraph:
            ``(D) providing support for critical access hospitals for 
        quality improvement, quality reporting, performance 
        improvements, and benchmarking.''.
    (e) Assistance to Small Critical Access Hospitals Transitioning to 
Skilled Nursing Facilities and Assisted Living Facilities.--Section 
1820(g) of the Social Security Act (42 U.S.C. 1395i-4(g)), as amended 
by subsection (a), is amended by adding at the end the following new 
paragraph:
        ``(7) Critical access hospitals transitioning to skilled 
    nursing facilities and assisted living facilities.--
            ``(A) Grants.--The Secretary may award grants to eligible 
        critical access hospitals that have submitted applications in 
        accordance with subparagraph (B) for assisting such hospitals 
        in the transition to skilled nursing facilities and assisted 
        living facilities.
            ``(B) Application.--An applicable critical access hospital 
        seeking a grant under this paragraph shall submit an 
        application to the Secretary on or before such date and in such 
        form and manner as the Secretary specifies.
            ``(C) Additional requirements.--The Secretary may not award 
        a grant under this paragraph to an eligible critical access 
        hospital unless--
                ``(i) local organizations or the State in which the 
            hospital is located provides matching funds; and
                ``(ii) the hospital provides assurances that it will 
            surrender critical access hospital status under this title 
            within 180 days of receiving the grant.
            ``(D) Amount of grant.--A grant to an eligible critical 
        access hospital under this paragraph may not exceed $1,000,000.
            ``(E) Funding.--There are appropriated from the Federal 
        Hospital Insurance Trust Fund under section 1817 for making 
        grants under this paragraph, $5,000,000 for fiscal year 2008.
            ``(F) Eligible critical access hospital defined.--For 
        purposes of this paragraph, the term `eligible critical access 
        hospital' means a critical access hospital that has an average 
        daily acute census of less than 0.5 and an average daily swing 
        bed census of greater than 10.0.''.
    SEC. 122. REBASING FOR SOLE COMMUNITY HOSPITALS.
    (a) Rebasing Permitted.--Section 1886(b)(3) of the Social Security 
Act (42 U.S.C. 1395ww(b)(3)) is amended by adding at the end the 
following new subparagraph:
    ``(L)(i) For cost reporting periods beginning on or after January 
1, 2009, in the case of a sole community hospital there shall be 
substituted for the amount otherwise determined under subsection 
(d)(5)(D)(i) of this section, if such substitution results in a greater 
amount of payment under this section for the hospital, the subparagraph 
(L) rebased target amount.
    ``(ii) For purposes of this subparagraph, the term `subparagraph 
(L) rebased target amount' has the meaning given the term `target 
amount' in subparagraph (C), except that--
        ``(I) there shall be substituted for the base cost reporting 
    period the 12-month cost reporting period beginning during fiscal 
    year 2006;
        ``(II) any reference in subparagraph (C)(i) to the `first cost 
    reporting period' described in such subparagraph is deemed a 
    reference to the first cost reporting period beginning on or after 
    January 1, 2009; and
        ``(III) the applicable percentage increase shall only be 
    applied under subparagraph (C)(iv) for discharges occurring on or 
    after January 1, 2009.''.
    (b) Conforming Amendments.--Section 1886(b)(3) of the Social 
Security Act (42 U.S.C. 1395ww(b)(3)) is amended--
        (1) in subparagraph (C), in the matter preceding clause (i), by 
    striking ``subparagraph (I)'' and inserting ``subparagraphs (I) and 
    (L)''; and
        (2) in subparagraph (I)(i), in the matter preceding subclause 
    (I), by striking ``For'' and inserting ``Subject to subparagraph 
    (L), for''.
    SEC. 123. DEMONSTRATION PROJECT ON COMMUNITY HEALTH INTEGRATION 
      MODELS IN CERTAIN RURAL COUNTIES.
    (a) In General.--The Secretary shall establish a demonstration 
project to allow eligible entities to develop and test new models for 
the delivery of health care services in eligible counties for the 
purpose of improving access to, and better integrating the delivery of, 
acute care, extended care, and other essential health care services to 
Medicare beneficiaries.
    (b) Purpose.--The purpose of the demonstration project under this 
section is to--
        (1) explore ways to increase access to, and improve the 
    adequacy of, payments for acute care, extended care, and other 
    essential health care services provided under the Medicare and 
    Medicaid programs in eligible counties; and
        (2) evaluate regulatory challenges facing such providers and 
    the communities they serve.
    (c) Requirements.--The following requirements shall apply under the 
demonstration project:
        (1) Health care providers in eligible counties selected to 
    participate in the demonstration project under subsection (d)(3) 
    shall (when determined appropriate by the Secretary), instead of 
    the payment rates otherwise applicable under the Medicare program, 
    be reimbursed at a rate that covers at least the reasonable costs 
    of the provider in furnishing acute care, extended care, and other 
    essential health care services to Medicare beneficiaries.
        (2) Methods to coordinate the survey and certification process 
    under the Medicare program and the Medicaid program across all 
    health service categories included in the demonstration project 
    shall be tested with the goal of assuring quality and safety while 
    reducing administrative burdens, as appropriate, related to 
    completing such survey and certification process.
        (3) Health care providers in eligible counties selected to 
    participate in the demonstration project under subsection (d)(3) 
    and the Secretary shall work with the State to explore ways to 
    revise reimbursement policies under the Medicaid program to improve 
    access to the range of health care services available in such 
    eligible counties.
        (4) The Secretary shall identify regulatory requirements that 
    may be revised appropriately to improve access to care in eligible 
    counties.
        (5) Other essential health care services necessary to ensure 
    access to the range of health care services in eligible counties 
    selected to participate in the demonstration project under 
    subsection (d)(3) shall be identified. Ways to ensure adequate 
    funding for such services shall also be explored.
    (d) Application Process.--
        (1) Eligibility.--
            (A) In general.--Eligibility to participate in the 
        demonstration project under this section shall be limited to 
        eligible entities.
            (B) Eligible entity defined.--In this section, the term 
        ``eligible entity'' means an entity that--
                (i) is a Rural Hospital Flexibility Program grantee 
            under section 1820(g) of the Social Security Act (42 U.S.C. 
            1395i-4(g)); and
                (ii) is located in a State in which at least 65 percent 
            of the counties in the State are counties that have 6 or 
            less residents per square mile.
        (2) Application.--
            (A) In general.--An eligible entity seeking to participate 
        in the demonstration project under this section shall submit an 
        application to the Secretary at such time, in such manner, and 
        containing such information as the Secretary may require.
            (B) Limitation.--The Secretary shall select eligible 
        entities located in not more than 4 States to participate in 
        the demonstration project under this section.
        (3) Selection of eligible counties.--An eligible entity 
    selected by the Secretary to participate in the demonstration 
    project under this section shall select not more than 6 eligible 
    counties in the State in which the entity is located in which to 
    conduct the demonstration project.
        (4) Eligible county defined.--In this section, the term 
    ``eligible county'' means a county that meets the following 
    requirements:
            (A) The county has 6 or less residents per square mile.
            (B) As of the date of the enactment of this Act, a facility 
        designated as a critical access hospital which meets the 
        following requirements was located in the county:
                (i) As of the date of the enactment of this Act, the 
            critical access hospital furnished 1 or more of the 
            following:

                    (I) Home health services.
                    (II) Hospice care.
                    (III) Rural health clinic services.

                (ii) As of the date of the enactment of this Act, the 
            critical access hospital has an average daily inpatient 
            census of 5 or less.
            (C) As of the date of the enactment of this Act, skilled 
        nursing facility services were available in the county in--
                (i) a critical access hospital using swing beds; or
                (ii) a local nursing home.
    (e) Administration.--
        (1) In general.--The demonstration project under this section 
    shall be administered jointly by the Administrator of the Office of 
    Rural Health Policy of the Health Resources and Services 
    Administration and the Administrator of the Centers for Medicare & 
    Medicaid Services, in accordance with paragraphs (2) and (3).
        (2) HRSA duties.--In administering the demonstration project 
    under this section, the Administrator of the Office of Rural Health 
    Policy of the Health Resources and Services Administration shall--
            (A) award grants to the eligible entities selected to 
        participate in the demonstration project; and
            (B) work with such entities to provide technical assistance 
        related to the requirements under the project.
        (3) CMS duties.--In administering the demonstration project 
    under this section, the Administrator of the Centers for Medicare & 
    Medicaid Services shall determine which provisions of titles XVIII 
    and XIX of the Social Security Act (42 U.S.C. 1395 et seq.; 1396 et 
    seq.) the Secretary should waive under the waiver authority under 
    subsection (i) that are relevant to the development of alternative 
    reimbursement methodologies, which may include, as appropriate, 
    covering at least the reasonable costs of the provider in 
    furnishing acute care, extended care, and other essential health 
    care services to Medicare beneficiaries and coordinating the survey 
    and certification process under the Medicare and Medicaid programs, 
    as appropriate, across all service categories included in the 
    demonstration project.
    (f) Duration.--
        (1) In general.--The demonstration project under this section 
    shall be conducted for a 3-year period beginning on October 1, 
    2009.
        (2) Beginning date of demonstration project.--The demonstration 
    project under this section shall be considered to have begun in a 
    State on the date on which the eligible counties selected to 
    participate in the demonstration project under subsection (d)(3) 
    begin operations in accordance with the requirements under the 
    demonstration project.
    (g) Funding.--
        (1) CMS.--
            (A) In general.--The Secretary shall provide for the 
        transfer, in appropriate part from the Federal Hospital 
        Insurance Trust Fund established under section 1817 of the 
        Social Security Act (42 U.S.C. 1395i) and the Federal 
        Supplementary Medical Insurance Trust Fund established under 
        section 1841 of such Act (42 U.S.C. 1395t), of such sums as are 
        necessary for the costs to the Centers for Medicare & Medicaid 
        Services of carrying out its duties under the demonstration 
        project under this section.
            (B) Budget neutrality.--In conducting the demonstration 
        project under this section, the Secretary shall ensure that the 
        aggregate payments made by the Secretary do not exceed the 
        amount which the Secretary estimates would have been paid if 
        the demonstration project under this section was not 
        implemented.
        (2) HRSA.--There are authorized to be appropriated to the 
    Office of Rural Health Policy of the Health Resources and Services 
    Administration $800,000 for each of fiscal years 2010, 2011, and 
    2012 for the purpose of carrying out the duties of such Office 
    under the demonstration project under this section, to remain 
    available for the duration of the demonstration project.
    (h) Report.--
        (1) Interim report.--Not later than the date that is 2 years 
    after the date on which the demonstration project under this 
    section is implemented, the Administrator of the Office of Rural 
    Health Policy of the Health Resources and Services Administration, 
    in coordination with the Administrator of the Centers for Medicare 
    & Medicaid Services, shall submit a report to Congress on the 
    status of the demonstration project that includes initial 
    recommendations on ways to improve access to, and the availability 
    of, health care services in eligible counties based on the findings 
    of the demonstration project.
        (2) Final report.--Not later than 1 year after the completion 
    of the demonstration project, the Administrator of the Office of 
    Rural Health Policy of the Health Resources and Services 
    Administration, in coordination with the Administrator of the 
    Centers for Medicare & Medicaid Services, shall submit a report to 
    Congress on such project, together with recommendations for such 
    legislation and administrative action as the Secretary determines 
    appropriate.
    (i) Waiver Authority.--The Secretary may waive such requirements of 
titles XVIII and XIX of the Social Security Act (42 U.S.C. 1395 et 
seq.; 1396 et seq.) as may be necessary and appropriate for the purpose 
of carrying out the demonstration project under this section.
    (j) Definitions.--In this section:
        (1) Extended care services.--The term ``extended care 
    services'' means the following:
            (A) Home health services.
            (B) Covered skilled nursing facility services.
            (C) Hospice care.
        (2) Covered skilled nursing facility services.--The term 
    ``covered skilled nursing facility services'' has the meaning given 
    such term in section 1888(e)(2)(A) of the Social Security Act (42 
    U.S.C. 1395yy(e)(2)(A)).
        (3) Critical access hospital.--The term ``critical access 
    hospital'' means a facility designated as a critical access 
    hospital under section 1820(c) of such Act (42 U.S.C. 1395i-4(c)).
        (4) Home health services.--The term ``home health services'' 
    has the meaning given such term in section 1861(m) of such Act (42 
    U.S.C. 1395x(m)).
        (5) Hospice care.--The term ``hospice care'' has the meaning 
    given such term in section 1861(dd) of such Act (42 U.S.C. 
    1395x(dd)).
        (6) Medicaid program.--The term ``Medicaid program'' means the 
    program under title XIX of such Act (42 U.S.C. 1396 et seq.).
        (7) Medicare program.--The term ``Medicare program'' means the 
    program under title XVIII of such Act (42 U.S.C. 1395 et seq.).
        (8) Other essential health care services.--The term ``other 
    essential health care services'' means the following:
            (A) Ambulance services (as described in section 1861(s)(7) 
        of the Social Security Act (42 U.S.C. 1395x(s)(7))).
            (B) Rural health clinic services.
            (C) Public health services (as defined by the Secretary).
            (D) Other health care services determined appropriate by 
        the Secretary.
        (9) Rural health clinic services.--The term ``rural health 
    clinic services'' has the meaning given such term in section 
    1861(aa)(1) of such Act (42 U.S.C. 1395x(aa)(1)).
        (10) Secretary.--The term ``Secretary'' means the Secretary of 
    Health and Human Services.
    SEC. 124. EXTENSION OF THE RECLASSIFICATION OF CERTAIN HOSPITALS.
    (a) In General.--Subsection (a) of section 106 of division B of the 
Tax Relief and Health Care Act of 2006 (42 U.S.C. 1395 note), as 
amended by section 117 of the Medicare, Medicaid, and SCHIP Extension 
Act of 2007 (Public Law 110-173), is amended by striking ``September 
30, 2008'' and inserting ``September 30, 2009''.
    (b) Special Exception Reclassifications.--Section 117(a)(2) of the 
Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-
173)) is amended by striking ``September 30, 2008'' and inserting ``the 
last date of the extension of reclassifications under section 106(a) of 
the Medicare Improvement and Extension Act of 2006 (division B of 
Public Law 109-432)''.
    (c) Disregarding Section 508 Hospital Reclassifications for 
Purposes of Group Reclassifications.--Section 508(g) of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 (Public 
Law 108-173, 42 U.S.C. 1395ww note), as added by section 117(b) of the 
Medicare, Medicaid, and SCHIP Extension Act of 2008 (Public Law 110-
173)), is amended by striking ``during fiscal year 2008'' and inserting 
``beginning on October 1, 2007, and ending on the last date of the 
extension of reclassifications under section 106(a) of the Medicare 
Improvement and Extension Act of 2006 (division B of Public Law 109-
432)''.
    SEC. 125. REVOCATION OF UNIQUE DEEMING AUTHORITY OF THE JOINT 
      COMMISSION.
    (a) Revocation.--Section 1865 of the Social Security Act (42 U.S.C. 
1395bb) is amended--
        (1) by striking subsection (a); and
        (2) by redesignating subsections (b), (c), (d), and (e) as 
    subsections (a), (b), (c), and (d), respectively.
    (b) Conforming Amendments.--(1) Section 1865 of the Social Security 
Act (42 U.S.C. 1395bb) is amended--
        (A) in subsection (a)(1), as redesignated by subsection (a)(2), 
    by striking ``In addition, if'' and inserting ``If'';
        (B) in subsection (b), as so redesignated--
            (i) by striking ``released to him by the Joint Commission 
        on Accreditation of Hospitals,'' and inserting ``released to 
        the Secretary by''; and
            (ii) by striking the comma after ``Association'';
        (C) in subsection (c), as so redesignated, by striking 
    ``pursuant to subsection (a) or (b)(1)'' and inserting ``pursuant 
    to subsection (a)(1)''; and
        (D) in subsection (d), as so redesignated, by striking 
    ``pursuant to subsection (a) or (b)(1)'' and inserting ``pursuant 
    to subsection (a)(1)''.
    (2) Section 1861(e) of the Social Security Act (42 U.S.C. 1395x(e)) 
is amended in the fourth sentence by striking ``and (ii) is accredited 
by the Joint Commission on Accreditation of Hospitals, or is accredited 
by or approved by a program of the country in which such institution is 
located if the Secretary finds the accreditation or comparable approval 
standards of such program to be essentially equivalent to those of the 
Joint Commission on Accreditation of Hospitals'' and inserting ``and 
(ii) is accredited by a national accreditation body recognized by the 
Secretary under section 1865(a), or is accredited by or approved by a 
program of the country in which such institution is located if the 
Secretary finds the accreditation or comparable approval standards of 
such program to be essentially equivalent to those of such a national 
accreditation body.''.
    (3) Section 1864(c) of the Social Security Act (42 U.S.C. 
1395aa(c)) is amended by striking ``pursuant to subsection (a) or 
(b)(1) of section 1865'' and inserting ``pursuant to section 
1865(a)(1)''.
    (4) Section 1875(b) of the Social Security Act (42 U.S.C. 
1395ll(b)) is amended by striking ``the Joint Commission on 
Accreditation of Hospitals,'' and inserting ``national accreditation 
bodies under section 1865(a)''.
    (5) Section 1834(a)(20)(B) of the Social Security Act (42 U.S.C. 
1395m(a)(20)(B)) is amended by striking ``section 1865(b)'' and 
inserting ``section 1865(a)''.
    (6) Section 1852(e)(4)(C) of the Social Security Act (42 U.S.C. 
1395w-22(e)(4)(C)) is amended by striking ``section 1865(b)(2)'' and 
inserting ``section 1865(a)(2)''.
    (c) Authority To Recognize the Joint Commission as a National 
Accreditation Body.--The Secretary of Health and Human Services may 
recognize the Joint Commission as a national accreditation body under 
section 1865 of the Social Security Act (42 U.S.C. 1395bb), as amended 
by this section, upon such terms and conditions, and upon submission of 
such information, as the Secretary may require.
    (d) Effective Date; Transition Rule.--(1) Subject to paragraph (2), 
the amendments made by this section shall apply with respect to 
accreditations of hospitals granted on or after the date that is 24 
months after the date of the enactment of this Act.
    (2) For purposes of title XVIII of the Social Security Act (42 
U.S.C. 1395 et seq.), the amendments made by this section shall not 
effect the accreditation of a hospital by the Joint Commission, or 
under accreditation or comparable approval standards found to be 
essentially equivalent to accreditation or approval standards of the 
Joint Commission, for the period of time applicable under such 
accreditation.

               Subtitle C--Provisions Relating to Part B

                      PART I--PHYSICIANS' SERVICES

    SEC. 131. PHYSICIAN PAYMENT, EFFICIENCY, AND QUALITY IMPROVEMENTS.
    (a) In General.--
        (1) Increase in update for the second half of 2008 and for 
    2009.--
            (A) For the second half of 2008.--Section 1848(d)(8) of the 
        Social Security Act (42 U.S.C. 1395w-4(d)(8)), as added by 
        section 101 of the Medicare, Medicaid, and SCHIP Extension Act 
        of 2007 (Public Law 110-173), is amended--
                (i) in the heading, by striking ``a portion of'';
                (ii) in subparagraph (A), by striking ``for the period 
            beginning on January 1, 2008, and ending on June 30, 
            2008,''; and
                (iii) in subparagraph (B)--

                    (I) in the heading, by striking ``the remaining 
                portion of 2008 and''; and
                    (II) by striking ``for the period beginning on July 
                1, 2008, and ending on December 31, 2008, and''.

            (B) For 2009.--Section 1848(d) of the Social Security Act 
        (42 U.S.C. 1395w-4(d)), as amended by section 101 of the 
        Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law 
        110-173), is amended by adding at the end the following new 
        paragraph:
        ``(9) Update for 2009.--
            ``(A) In general.--Subject to paragraphs (7)(B) and (8)(B), 
        in lieu of the update to the single conversion factor 
        established in paragraph (1)(C) that would otherwise apply for 
        2009, the update to the single conversion factor shall be 1.1 
        percent.
            ``(B) No effect on computation of conversion factor for 
        2010 and subsequent years.--The conversion factor under this 
        subsection shall be computed under paragraph (1)(A) for 2010 
        and subsequent years as if subparagraph (A) had never 
        applied.''.
        (3) Revision of the physician assistance and quality initiative 
    fund.--
            (A) In general.--Subject to subparagraph (B), section 
        1848(l)(2) of the Social Security Act (42 U.S.C. 1395w-
        4(l)(2)), as amended by section 101(a)(2) of the Medicare, 
        Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-173), 
        is amended--
                (i) in subparagraph (A)--

                    (I) by striking clause (i)(III); and
                    (II) by striking clause (ii)(III); and

                (ii) in subparagraph (B)--

                    (I) in clause (i), by adding ``and'' at the end;
                    (II) in clause (ii), by striking ``; and'' and 
                inserting a period; and
                    (III) by striking clause (iii).

            (B) Contingency.--If there is enacted, before, on, or after 
        the date of the enactment of this Act, a Supplemental 
        Appropriations Act, 2008 that includes a provision amending 
        section 1848(l) of the Social Security Act, the alternative 
        amendment described in subparagraph (C)--
                (i) shall apply instead of the amendments made by 
            subparagraph (A); and
                (ii) shall be executed after such provision in such 
            Supplemental Appropriations Act.
            (C) Alternative amendment described.--The alternative 
        amendment described in this subparagraph is as follows: Section 
        1848(l)(2) of the Social Security Act (42 U.S.C. 1395w-
        4(l)(2)), as amended by section 101(a)(2) of the Medicare, 
        Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-173) 
        and by the Supplemental Appropriations Act, 2008, is amended--
                (i) in subparagraph (A)--

                    (I) by striking subclauses (III) and (IV) of clause 
                (i); and
                    (II) by striking subclauses (III) and (IV) of 
                clause (ii); and

                (ii) in subparagraph (B)--

                    (I) in clause (i), by adding ``and'' at the end;
                    (II) in clause (ii), by striking the semicolon at 
                the end and inserting a period; and
                    (III) by striking clauses (iii) and (iv).

    (b) Extension and Improvement of the Quality Reporting System.--
        (1) System.--Section 1848(k)(2) of the Social Security Act (42 
    U.S.C. 1395w-4(k)(2)), as amended by section 101(b)(1) of the 
    Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law 
    110-173), is amended by adding at the end the following new 
    subparagraphs:
            ``(C) For 2010 and subsequent years.--
                ``(i) In general.--Subject to clause (ii), for purposes 
            of reporting data on quality measures for covered 
            professional services furnished during 2010 and each 
            subsequent year, subject to subsection (m)(3)(C), the 
            quality measures (including electronic prescribing quality 
            measures) specified under this paragraph shall be such 
            measures selected by the Secretary from measures that have 
            been endorsed by the entity with a contract with the 
            Secretary under section 1890(a).
                ``(ii) Exception.--In the case of a specified area or 
            medical topic determined appropriate by the Secretary for 
            which a feasible and practical measure has not been 
            endorsed by the entity with a contract under section 
            1890(a), the Secretary may specify a measure that is not so 
            endorsed as long as due consideration is given to measures 
            that have been endorsed or adopted by a consensus 
            organization identified by the Secretary, such as the AQA 
            alliance.
            ``(D) Opportunity to provide input on measures for 2009 and 
        subsequent years.--For each quality measure (including an 
        electronic prescribing quality measure) adopted by the 
        Secretary under subparagraph (B) (with respect to 2009) or 
        subparagraph (C), the Secretary shall ensure that eligible 
        professionals have the opportunity to provide input during the 
        development, endorsement, or selection of measures applicable 
        to services they furnish.''.
        (2) Redesignation of reporting system.--Subsection (c) of 
    section 101 of division B of the Tax Relief and Health Care Act of 
    2006 (42 U.S.C. 1395w-4 note), as amended by section 101(b)(2) of 
    the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law 
    110-173), is redesignated as subsection (m) of section 1848 of the 
    Social Security Act.
        (3) Incentive payments under reporting system.--Section 1848(m) 
    of the Social Security Act, as redesignated by paragraph (2), is 
    amended--
            (A) by amending the heading to read as follows: ``Incentive 
        Payments for Quality Reporting'';
            (B) by striking paragraph (1) and inserting the following:
        ``(1) Incentive payments.--
            ``(A) In general.--For 2007 through 2010, with respect to 
        covered professional services furnished during a reporting 
        period by an eligible professional, if--
                ``(i) there are any quality measures that have been 
            established under the physician reporting system that are 
            applicable to any such services furnished by such 
            professional for such reporting period; and
                ``(ii) the eligible professional satisfactorily submits 
            (as determined under this subsection) to the Secretary data 
            on such quality measures in accordance with such reporting 
            system for such reporting period,
        in addition to the amount otherwise paid under this part, there 
        also shall be paid to the eligible professional (or to an 
        employer or facility in the cases described in clause (A) of 
        section 1842(b)(6)) or, in the case of a group practice under 
        paragraph (3)(C), to the group practice, from the Federal 
        Supplementary Medical Insurance Trust Fund established under 
        section 1841 an amount equal to the applicable quality percent 
        of the Secretary's estimate (based on claims submitted not 
        later than 2 months after the end of the reporting period) of 
        the allowed charges under this part for all such covered 
        professional services furnished by the eligible professional 
        (or, in the case of a group practice under paragraph (3)(C), by 
        the group practice) during the reporting period.
            ``(B) Applicable quality percent.--For purposes of 
        subparagraph (A), the term `applicable quality percent' means--
                ``(i) for 2007 and 2008, 1.5 percent; and
                ``(ii) for 2009 and 2010, 2.0 percent.'';
            (C) by striking paragraph (3) and redesignating paragraph 
        (2) as paragraph (3);
            (D) in paragraph (3), as so redesignated--
                (i) in the matter preceding subparagraph (A), by 
            striking ``For purposes'' and inserting the following:
            ``(A) In general.--For purposes'';
                (ii) by redesignating subparagraphs (A) and (B) as 
            clauses (i) and (ii), respectively, and moving the 
            indentation of such clauses 2 ems to the right;
                (iii) in subparagraph (A), as added by clause (i), by 
            adding at the end the following flush sentence:
        ``For years after 2008, quality measures for purposes of this 
        subparagraph shall not include electronic prescribing quality 
        measures.''; and
                (iv) by adding at the end the following new 
            subparagraphs:
            ``(C) Satisfactory reporting measures for group 
        practices.--
                ``(i) In general.--By January 1, 2010, the Secretary 
            shall establish and have in place a process under which 
            eligible professionals in a group practice (as defined by 
            the Secretary) shall be treated as satisfactorily 
            submitting data on quality measures under subparagraph (A) 
            and as meeting the requirement described in subparagraph 
            (B)(ii) for covered professional services for a reporting 
            period (or, for purposes of subsection (a)(5), for a 
            reporting period for a year) if, in lieu of reporting 
            measures under subsection (k)(2)(C), the group practice 
            reports measures determined appropriate by the Secretary, 
            such as measures that target high-cost chronic conditions 
            and preventive care, in a form and manner, and at a time, 
            specified by the Secretary.
                ``(ii) Statistical sampling model.--The process under 
            clause (i) shall provide for the use of a statistical 
            sampling model to submit data on measures, such as the 
            model used under the Physician Group Practice demonstration 
            project under section 1866A.
                ``(iii) No double payments.--Payments to a group 
            practice under this subsection by reason of the process 
            under clause (i) shall be in lieu of the payments that 
            would otherwise be made under this subsection to eligible 
            professionals in the group practice for satisfactorily 
            submitting data on quality measures.
            ``(D) Authority to revise satisfactorily reporting data.--
        For years after 2009, the Secretary, in consultation with 
        stakeholders and experts, may revise the criteria under this 
        subsection for satisfactorily submitting data on quality 
        measures under subparagraph (A) and the criteria for submitting 
        data on electronic prescribing quality measures under 
        subparagraph (B)(ii).'';
            (E) in paragraph (5)--
                (i) in subparagraph (C), by inserting ``for 2007, 2008, 
            and 2009,'' after ``provision of law,'';
                (ii) in subparagraph (D)--

                    (I) in clause (i)--

                        (aa) by inserting ``for 2007 and 2008'' after 
                    ``under this subsection''; and
                        (bb) by striking ``paragraph (2)'' and 
                    inserting ``this subsection'';

                    (II) in clause (ii), by striking ``shall'' and 
                inserting ``may establish procedures to''; and
                    (III) in clause (iii)--

                        (aa) by inserting ``(or, in the case of a group 
                    practice under paragraph (3)(C), the group 
                    practice)'' after ``an eligible professional'';
                        (bb) by striking ``bonus incentive payment'' 
                    and inserting ``incentive payment under this 
                    subsection''; and
                        (cc) by adding at the end the following new 
                    sentence: ``If such payments for such period have 
                    already been made, the Secretary shall recoup such 
                    payments from the eligible professional (or the 
                    group practice).'';
                (iii) in subparagraph (E)--

                    (I) by striking ``(i) in general.--'';
                    (II) by striking clause (ii);
                    (III) by redesignating subclauses (I) through (IV) 
                as clauses (i) through (iv), respectively, and moving 
                the indentation of such clauses 2 ems to the left;
                    (IV) in clause (ii), as so redesignated, by 
                striking ``paragraph (2)'' and inserting ``this 
                subsection''; and
                    (V) in clause (iv), as so redesignated--

                        (aa) by striking ``the bonus'' and inserting 
                    ``any''; and
                        (bb) by inserting ``and the payment adjustment 
                    under subsection (a)(5)(A)'' before the period at 
                    the end;
                (iv) in subparagraph (F)--

                    (I) by striking ``2009, paragraph (3) shall not 
                apply, and'' and inserting ``subsequent years,''; and
                    (II) by striking ``paragraph (2)'' and inserting 
                ``this subsection''; and

                (v) by adding at the end the following new 
            subparagraph:
            ``(G) Posting on website.--The Secretary shall post on the 
        Internet website of the Centers for Medicare & Medicaid 
        Services, in an easily understandable format, a list of the 
        names of the following:
                ``(i) The eligible professionals (or, in the case of 
            reporting under paragraph (3)(C), the group practices) who 
            satisfactorily submitted data on quality measures under 
            this subsection.
                ``(ii) The eligible professionals (or, in the case of 
            reporting under paragraph (3)(C), the group practices) who 
            are successful electronic prescribers.''; and
            (F) in paragraph (6), by striking subparagraph (C) and 
        inserting the following:
            ``(C) Reporting period.--
                ``(i) In general.--Subject to clauses (ii) and (iii), 
            the term `reporting period' means--

                    ``(I) for 2007, the period beginning on July 1, 
                2007, and ending on December 31, 2007; and
                    ``(II) for 2008, 2009, 2010, and 2011, the entire 
                year.

                ``(ii) Authority to revise reporting period.--For years 
            after 2009, the Secretary may revise the reporting period 
            under clause (i) if the Secretary determines such revision 
            is appropriate, produces valid results on measures 
            reported, and is consistent with the goals of maximizing 
            scientific validity and reducing administrative burden. If 
            the Secretary revises such period pursuant to the preceding 
            sentence, the term `reporting period' shall mean such 
            revised period.
                ``(iii) Reference.--Any reference in this subsection to 
            a reporting period with respect to the application of 
            subsection (a)(5) shall be deemed a reference to the 
            reporting period under subparagraph (D)(iii) of such 
            subsection.''.
        (4) Inclusion of qualified audiologists as eligible 
    professionals.--
            (A) In general.--Section 1848(k)(3)(B) of the Social 
        Security Act (42 U.S.C. 1395w-4(k)(3)(B)), is amended by adding 
        at the end the following new clause:
                ``(iv) Beginning with 2009, a qualified audiologist (as 
            defined in section 1861(ll)(3)(B)).''.
            (B) No change in billing.--Nothing in the amendment made by 
        subparagraph (A) shall be construed to change the way in which 
        billing for audiology services (as defined in section 
        1861(ll)(2) of the Social Security Act (42 U.S.C. 
        1395x(ll)(2))) occurs under title XVIII of such Act as of July 
        1, 2008.
        (5) Conforming amendments.--Section 1848(m) of the Social 
    Security Act, as added and amended by paragraphs (2) and (3), is 
    amended--
            (A) in paragraph (5)--
                (i) in subparagraph (A)--

                    (I) by striking ``section 1848(k) of the Social 
                Security Act, as added by subsection (b),'' and 
                inserting ``subsection (k)''; and
                    (II) by striking ``such section'' and inserting 
                ``such subsection'';

                (ii) in subparagraph (B), by striking ``of the Social 
            Security Act (42 U.S.C. 1395l)'';
                (iii) in subparagraph (E), in the matter preceding 
            clause (i), by striking ``1869 or 1878 of the Social 
            Security Act or otherwise'' and inserting ``1869, section 
            1878, or otherwise''; and
                (iv) in subparagraph (F)--

                    (I) by striking ``paragraph (2)(B) of section 
                1848(k) of the Social Security Act (42 U.S.C. 1395w-
                4(k))'' and inserting ``subsection (k)(2)(B)''; and
                    (II) by striking ``paragraph (4) of such section'' 
                and inserting ``subsection (k)(4)'';

            (B) in paragraph (6)--
                (i) in subparagraph (A), by striking ``section 
            1848(k)(3) of the Social Security Act, as added by 
            subsection (b)'' and inserting ``subsection (k)(3)''; and
                (ii) in subparagraph (B), by striking ``section 1848(k) 
            of the Social Security Act, as added by subsection (b)'' 
            and inserting ``subsection (k)''; and
            (C) by striking paragraph (6)(D).
        (6) No affect on incentive payments for 2007 or 2008.--Nothing 
    in the amendments made by this subsection or section 132 shall 
    affect the operation of the provisions of section 1848(m) of the 
    Social Security Act, as redesignated and amended by such subsection 
    and section, with respect to 2007 or 2008.
    (c) Physician Feedback Program To Improve Efficiency and Control 
Costs.--
        (1) In general.--Section 1848 of the Social Security Act (42 
    U.S.C. 1395w-4), as amended by subsection (b), is amended by adding 
    at the end the following new subsection:
    ``(n) Physician Feedback Program.--
        ``(1) Establishment.--
            ``(A) In general.--The Secretary shall establish a 
        Physician Feedback Program (in this subsection referred to as 
        the `Program') under which the Secretary shall use claims data 
        under this title (and may use other data) to provide 
        confidential reports to physicians (and, as determined 
        appropriate by the Secretary, to groups of physicians) that 
        measure the resources involved in furnishing care to 
        individuals under this title. If determined appropriate by the 
        Secretary, the Secretary may include information on the quality 
        of care furnished to individuals under this title by the 
        physician (or group of physicians) in such reports.
            ``(B) Resource use.--The resources described in 
        subparagraph (A) may be measured--
                ``(i) on an episode basis;
                ``(ii) on a per capita basis; or
                ``(iii) on both an episode and a per capita basis.
        ``(2) Implementation.--The Secretary shall implement the 
    Program by not later than January 1, 2009.
        ``(3) Data for reports.--To the extent practicable, reports 
    under the Program shall be based on the most recent data available.
        ``(4) Authority to focus application.--The Secretary may focus 
    the application of the Program as appropriate, such as focusing the 
    Program on--
            ``(A) physician specialties that account for a certain 
        percentage of all spending for physicians' services under this 
        title;
            ``(B) physicians who treat conditions that have a high cost 
        or a high volume, or both, under this title;
            ``(C) physicians who use a high amount of resources 
        compared to other physicians;
            ``(D) physicians practicing in certain geographic areas; or
            ``(E) physicians who treat a minimum number of individuals 
        under this title.
        ``(5) Authority to exclude certain information if insufficient 
    information.--The Secretary may exclude certain information 
    regarding a service from a report under the Program with respect to 
    a physician (or group of physicians) if the Secretary determines 
    that there is insufficient information relating to that service to 
    provide a valid report on that service.
        ``(6) Adjustment of data.--To the extent practicable, the 
    Secretary shall make appropriate adjustments to the data used in 
    preparing reports under the Program, such as adjustments to take 
    into account variations in health status and other patient 
    characteristics.
        ``(7) Education and outreach.--The Secretary shall provide for 
    education and outreach activities to physicians on the operation 
    of, and methodologies employed under, the Program.
        ``(8) Disclosure exemption.--Reports under the Program shall be 
    exempt from disclosure under section 552 of title 5, United States 
    Code.''.
        (2) GAO study and report on the physician feedback program.--
            (A) Study.--The Comptroller General of the United States 
        shall conduct a study of the Physician Feedback Program 
        conducted under section 1848(n) of the Social Security Act, as 
        added by paragraph (1), including the implementation of the 
        Program.
            (B) Report.--Not later than March 1, 2011, the Comptroller 
        General of the United States shall submit a report to Congress 
        containing the results of the study conducted under 
        subparagraph (A), together with recommendations for such 
        legislation and administrative action as the Comptroller 
        General determines appropriate.
    (d) Plan for Transition to Value-Based Purchasing Program for 
Physicians and Other Practitioners.--
        (1) In general.--The Secretary of Health and Human Services 
    shall develop a plan to transition to a value-based purchasing 
    program for payment under the Medicare program for covered 
    professional services (as defined in section 1848(k)(3)(A) of the 
    Social Security Act (42 U.S.C. 1395w-4(k)(3)(A))).
        (2) Report.--Not later than May 1, 2010, the Secretary of 
    Health and Human Services shall submit a report to Congress 
    containing the plan developed under paragraph (1), together with 
    recommendations for such legislation and administrative action as 
    the Secretary determines appropriate.
    SEC. 132. INCENTIVES FOR ELECTRONIC PRESCRIBING.
    (a) Incentive Payments.--Section 1848(m) of the Social Security 
Act, as added and amended by section 131(b), is amended--
        (1) by inserting after paragraph (1), the following new 
    paragraph:
        ``(2) Incentive payments for electronic prescribing.--
            ``(A) In general.--For 2009 through 2013, with respect to 
        covered professional services furnished during a reporting 
        period by an eligible professional, if the eligible 
        professional is a successful electronic prescriber for such 
        reporting period, in addition to the amount otherwise paid 
        under this part, there also shall be paid to the eligible 
        professional (or to an employer or facility in the cases 
        described in clause (A) of section 1842(b)(6)) or, in the case 
        of a group practice under paragraph (3)(C), to the group 
        practice, from the Federal Supplementary Medical Insurance 
        Trust Fund established under section 1841 an amount equal to 
        the applicable electronic prescribing percent of the 
        Secretary's estimate (based on claims submitted not later than 
        2 months after the end of the reporting period) of the allowed 
        charges under this part for all such covered professional 
        services furnished by the eligible professional (or, in the 
        case of a group practice under paragraph (3)(C), by the group 
        practice) during the reporting period.
            ``(B) Limitation with respect to electronic prescribing 
        quality measures.--The provisions of this paragraph and 
        subsection (a)(5) shall not apply to an eligible professional 
        (or, in the case of a group practice under paragraph (3)(C), to 
        the group practice) if, for the reporting period (or, for 
        purposes of subsection (a)(5), for the reporting period for a 
        year)--
                ``(i) the allowed charges under this part for all 
            covered professional services furnished by the eligible 
            professional (or group, as applicable) for the codes to 
            which the electronic prescribing quality measure applies 
            (as identified by the Secretary and published on the 
            Internet website of the Centers for Medicare & Medicaid 
            Services as of January 1, 2008, and as subsequently 
            modified by the Secretary) are less than 10 percent of the 
            total of the allowed charges under this part for all such 
            covered professional services furnished by the eligible 
            professional (or the group, as applicable); or
                ``(ii) if determined appropriate by the Secretary, the 
            eligible professional does not submit (including both 
            electronically and nonelectronically) a sufficient number 
            (as determined by the Secretary) of prescriptions under 
            part D.
        If the Secretary makes the determination to apply clause (ii) 
        for a period, then clause (i) shall not apply for such period.
            ``(C) Applicable electronic prescribing percent.--For 
        purposes of subparagraph (A), the term `applicable electronic 
        prescribing percent' means--
                ``(i) for 2009 and 2010, 2.0 percent;
                ``(ii) for 2011 and 2012, 1.0 percent; and
                ``(iii) for 2013, 0.5 percent.'';
        (2) in paragraph (3), as redesignated by section 131(b)--
            (A) in the heading, by inserting ``and successful 
        electronic prescriber'' after ``reporting''; and
            (B) by inserting after subparagraph (A) the following new 
        subparagraph:
            ``(B) Successful electronic prescriber.--
                ``(i) In general.--For purposes of paragraph (2) and 
            subsection (a)(5), an eligible professional shall be 
            treated as a successful electronic prescriber for a 
            reporting period (or, for purposes of subsection (a)(5), 
            for the reporting period for a year) if the eligible 
            professional meets the requirement described in clause 
            (ii), or, if the Secretary determines appropriate, the 
            requirement described in clause (iii). If the Secretary 
            makes the determination under the preceding sentence to 
            apply the requirement described in clause (iii) for a 
            period, then the requirement described in clause (ii) shall 
            not apply for such period.
                ``(ii) Requirement for submitting data on electronic 
            prescribing quality measures.--The requirement described in 
            this clause is that, with respect to covered professional 
            services furnished by an eligible professional during a 
            reporting period (or, for purposes of subsection (a)(5), 
            for the reporting period for a year), if there are any 
            electronic prescribing quality measures that have been 
            established under the physician reporting system and are 
            applicable to any such services furnished by such 
            professional for the period, such professional reported 
            each such measure under such system in at least 50 percent 
            of the cases in which such measure is reportable by such 
            professional under such system.
                ``(iii) Requirement for electronically prescribing 
            under part d.--The requirement described in this clause is 
            that the eligible professional electronically submitted a 
            sufficient number (as determined by the Secretary) of 
            prescriptions under part D during the reporting period (or, 
            for purposes of subsection (a)(5), for the reporting period 
            for a year).
                ``(iv) Use of part d data.--Notwithstanding sections 
            1860D-15(d)(2)(B) and 1860D-15(f)(2), the Secretary may use 
            data regarding drug claims submitted for purposes of 
            section 1860D-15 that are necessary for purposes of clause 
            (iii), paragraph (2)(B)(ii), and paragraph (5)(G).
                ``(v) Standards for electronic prescribing.--To the 
            extent practicable, in determining whether eligible 
            professionals meet the requirements under clauses (ii) and 
            (iii) for purposes of clause (i), the Secretary shall 
            ensure that eligible professionals utilize electronic 
            prescribing systems in compliance with standards 
            established for such systems pursuant to the Part D 
            Electronic Prescribing Program under section 1860D-4(e).''; 
            and
        (3) in paragraph (5)(E), by striking clause (iii) and inserting 
    the following new clause:
                ``(iii) the determination of a successful electronic 
            prescriber under paragraph (3), the limitation under 
            paragraph (2)(B), and the exception under subsection 
            (a)(5)(B); and''.
    (b) Incentive Payment Adjustment.--Section 1848(a) of the Social 
Security Act (42 U.S.C. 1395w-4(a)) is amended by adding at the end the 
following new paragraph:
        ``(5) Incentives for electronic prescribing.--
            ``(A) Adjustment.--
                ``(i) In general.--Subject to subparagraph (B) and 
            subsection (m)(2)(B), with respect to covered professional 
            services furnished by an eligible professional during 2012 
            or any subsequent year, if the eligible professional is not 
            a successful electronic prescriber for the reporting period 
            for the year (as determined under subsection (m)(3)(B)), 
            the fee schedule amount for such services furnished by such 
            professional during the year (including the fee schedule 
            amount for purposes of determining a payment based on such 
            amount) shall be equal to the applicable percent of the fee 
            schedule amount that would otherwise apply to such services 
            under this subsection (determined after application of 
            paragraph (3) but without regard to this paragraph).
                ``(ii) Applicable percent.--For purposes of clause (i), 
            the term `applicable percent' means--

                    ``(I) for 2012, 99 percent;
                    ``(II) for 2013, 98.5 percent; and
                    ``(III) for 2014 and each subsequent year, 98 
                percent.

            ``(B) Significant hardship exception.--The Secretary may, 
        on a case-by-case basis, exempt an eligible professional from 
        the application of the payment adjustment under subparagraph 
        (A) if the Secretary determines, subject to annual renewal, 
        that compliance with the requirement for being a successful 
        electronic prescriber would result in a significant hardship, 
        such as in the case of an eligible professional who practices 
        in a rural area without sufficient Internet access.
            ``(C) Application.--
                ``(i) Physician reporting system rules.--Paragraphs 
            (5), (6), and (8) of subsection (k) shall apply for 
            purposes of this paragraph in the same manner as they apply 
            for purposes of such subsection.
                ``(ii) Incentive payment validation rules.--Clauses 
            (ii) and (iii) of subsection (m)(5)(D) shall apply for 
            purposes of this paragraph in a similar manner as they 
            apply for purposes of such subsection.
            ``(D) Definitions.--For purposes of this paragraph:
                ``(i) Eligible professional; covered professional 
            services.--The terms `eligible professional' and `covered 
            professional services' have the meanings given such terms 
            in subsection (k)(3).
                ``(ii) Physician reporting system.--The term `physician 
            reporting system' means the system established under 
            subsection (k).
                ``(iii) Reporting period.--The term `reporting period' 
            means, with respect to a year, a period specified by the 
            Secretary.''.
    (c) GAO Report on Electronic Prescribing.--Not later than September 
1, 2012, the Comptroller General of the United States shall submit to 
Congress a report on the implementation of the incentives for 
electronic prescribing established under the provisions of, and 
amendments made by, this section. Such report shall include information 
regarding the following:
        (1) The percentage of eligible professionals (as defined in 
    section 1848(k)(3) of the Social Security Act (42 U.S.C. 1395w-
    4(k)(3)) that are using electronic prescribing systems, including a 
    determination of whether less than 50 percent of eligible 
    professionals are using electronic prescribing systems.
        (2) If less than 50 percent of eligible professionals are using 
    electronic prescribing systems, recommendations for increasing the 
    use of electronic prescribing systems by eligible professionals, 
    such as changes to the incentive payment adjustments established 
    under section 1848(a)(5) of such Act, as added by subsection (b).
        (3) The estimated savings to the Medicare program under title 
    XVIII of such Act resulting from the use of electronic prescribing 
    systems.
        (4) Reductions in avoidable medical errors resulting from the 
    use of electronic prescribing systems.
        (5) The extent to which the privacy and security of the 
    personal health information of Medicare beneficiaries is protected 
    when such beneficiaries' prescription drug data and usage 
    information is used for purposes other than their direct clinical 
    care, including--
            (A) whether information identifying the beneficiary is, and 
        remains, removed from data regarding the beneficiary's 
        prescription drug utilization; and
            (B) the extent to which current law requires sufficient and 
        appropriate oversight and audit capabilities to monitor the 
        practice of prescription drug data mining.
        (6) Such other recommendations and administrative action as the 
    Comptroller General determines to be appropriate.
    SEC. 133. EXPANDING ACCESS TO PRIMARY CARE SERVICES.
    (a) Revisions to the Medicare Medical Home Demonstration Project.--
        (1) Authority to expand.--Section 204(b) of division B of the 
    Tax Relief and Health Care Act of 2006 (42 U.S.C. 1395b-1 note) is 
    amended--
            (A) in paragraph (1), by striking ``The project'' and 
        inserting ``Subject to paragraph (3), the project''; and
            (B) by adding at the end the following new paragraph:
        ``(3) Expansion.--The Secretary may expand the duration and the 
    scope of the project under paragraph (1), to an extent determined 
    appropriate by the Secretary, if the Secretary determines that such 
    expansion will result in any of the following conditions being met:
            ``(A) The expansion of the project is expected to improve 
        the quality of patient care without increasing spending under 
        the Medicare program (not taking into account amounts available 
        under subsection (g)).
            ``(B) The expansion of the project is expected to reduce 
        spending under the Medicare program (not taking into account 
        amounts available under subsection (g)) without reducing the 
        quality of patient care.''.
        (2) Funding and application.--Section 204 of division B of the 
    Tax Relief and Health Care Act of 2006 (42 U.S.C. 1395b-1 note) is 
    amended by adding at the end the following new subsections:
    ``(g) Funding From SMI Trust Fund.--There shall be available, from 
the Federal Supplementary Medical Insurance Trust Fund (under section 
1841 of the Social Security Act (42 U.S.C. 1395t)), the amount of 
$100,000,000 to carry out the project.
    ``(h) Application.--Chapter 35 of title 44, United States Code, 
shall not apply to the conduct of the project.''.
    (b) Application of Budget-Neutrality Adjustor to Conversion 
Factor.--Section 1848(c)(2)(B) of the Social Security Act (42 U.S.C. 
1395w-4(c)(2)(B)) is amended by adding at the end the following new 
clause:
                ``(vi) Alternative application of budget-neutrality 
            adjustment.--Notwithstanding subsection (d)(9)(A), 
            effective for fee schedules established beginning with 
            2009, with respect to the 5-year review of work relative 
            value units used in fee schedules for 2007 and 2008, in 
            lieu of continuing to apply budget-neutrality adjustments 
            required under clause (ii) for 2007 and 2008 to work 
            relative value units, the Secretary shall apply such 
            budget-neutrality adjustments to the conversion factor 
            otherwise determined for years beginning with 2009.''.
    SEC. 134. EXTENSION OF FLOOR ON MEDICARE WORK GEOGRAPHIC ADJUSTMENT 
      UNDER THE MEDICARE PHYSICIAN FEE SCHEDULE.
    (a) In General.--Section 1848(e)(1)(E) of the Social Security Act 
(42 U.S.C. 1395w-4(e)(1)(E)), as amended by section 103 of the 
Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-
173), is amended by striking ``before July 1, 2008'' and inserting 
``before January 1, 2010''.
    (b) Treatment of Physicians' Services Furnished in Certain Areas.--
Section 1848(e)(1)(G) of the Social Security Act (42 U.S.C. 1395w-
4(e)(1)(G)) is amended by adding at the end the following new sentence: 
``For purposes of payment for services furnished in the State described 
in the preceding sentence on or after January 1, 2009, after 
calculating the work geographic index in subparagraph (A)(iii), the 
Secretary shall increase the work geographic index to 1.5 if such index 
would otherwise be less than 1.5''.
    (c) Technical Correction.--Section 602(1) of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 (Public 
Law 108-173; 117 Stat. 2301) is amended to read as follows:
        ``(1) in subparagraph (A), by striking `subparagraphs (B), (C), 
    and (E)' and inserting `subparagraphs (B), (C), (E), and (G)'; 
    and''.
    SEC. 135. IMAGING PROVISIONS.
    (a) Accreditation Requirement.--
        (1) Accreditation requirement.--Section 1834 of the Social 
    Security Act (42 U.S.C. 1395m) is amended by inserting after 
    subsection (d) the following new subsection:
    ``(e) Accreditation Requirement for Advanced Diagnostic Imaging 
Services.--
        ``(1) In general.--
            ``(A) In general.--Beginning with January 1, 2012, with 
        respect to the technical component of advanced diagnostic 
        imaging services for which payment is made under the fee 
        schedule established under section 1848(b) and that are 
        furnished by a supplier, payment may only be made if such 
        supplier is accredited by an accreditation organization 
        designated by the Secretary under paragraph (2)(B)(i).
            ``(B) Advanced diagnostic imaging services defined.--In 
        this subsection, the term `advanced diagnostic imaging 
        services' includes--
                ``(i) diagnostic magnetic resonance imaging, computed 
            tomography, and nuclear medicine (including positron 
            emission tomography); and
                ``(ii) such other diagnostic imaging services, 
            including services described in section 1848(b)(4)(B) 
            (excluding X-ray, ultrasound, and fluoroscopy), as 
            specified by the Secretary in consultation with physician 
            specialty organizations and other stakeholders.
            ``(C) Supplier defined.--In this subsection, the term 
        `supplier' has the meaning given such term in section 1861(d).
        ``(2) Accreditation organizations.--
            ``(A) Factors for designation of accreditation 
        organizations.--The Secretary shall consider the following 
        factors in designating accreditation organizations under 
        subparagraph (B)(i) and in reviewing and modifying the list of 
        accreditation organizations designated pursuant to subparagraph 
        (C):
                ``(i) The ability of the organization to conduct timely 
            reviews of accreditation applications.
                ``(ii) Whether the organization has established a 
            process for the timely integration of new advanced 
            diagnostic imaging services into the organization's 
            accreditation program.
                ``(iii) Whether the organization uses random site 
            visits, site audits, or other strategies for ensuring 
            accredited suppliers maintain adherence to the criteria 
            described in paragraph (3).
                ``(iv) The ability of the organization to take into 
            account the capacities of suppliers located in a rural area 
            (as defined in section 1886(d)(2)(D)).
                ``(v) Whether the organization has established 
            reasonable fees to be charged to suppliers applying for 
            accreditation.
                ``(vi) Such other factors as the Secretary determines 
            appropriate.
            ``(B) Designation.--Not later than January 1, 2010, the 
        Secretary shall designate organizations to accredit suppliers 
        furnishing the technical component of advanced diagnostic 
        imaging services. The list of accreditation organizations so 
        designated may be modified pursuant to subparagraph (C).
            ``(C) Review and modification of list of accreditation 
        organizations.--
                ``(i) In general.--The Secretary shall review the list 
            of accreditation organizations designated under 
            subparagraph (B) taking into account the factors under 
            subparagraph (A). Taking into account the results of such 
            review, the Secretary may, by regulation, modify the list 
            of accreditation organizations designated under 
            subparagraph (B).
                ``(ii) Special rule for accreditations done prior to 
            removal from list of designated accreditation 
            organizations.--In the case where the Secretary removes an 
            organization from the list of accreditation organizations 
            designated under subparagraph (B), any supplier that is 
            accredited by the organization during the period beginning 
            on the date on which the organization is designated as an 
            accreditation organization under subparagraph (B) and 
            ending on the date on which the organization is removed 
            from such list shall be considered to have been accredited 
            by an organization designated by the Secretary under 
            subparagraph (B) for the remaining period such 
            accreditation is in effect.
        ``(3) Criteria for accreditation.--The Secretary shall 
    establish procedures to ensure that the criteria used by an 
    accreditation organization designated under paragraph (2)(B) to 
    evaluate a supplier that furnishes the technical component of 
    advanced diagnostic imaging services for the purpose of 
    accreditation of such supplier is specific to each imaging 
    modality. Such criteria shall include--
            ``(A) standards for qualifications of medical personnel who 
        are not physicians and who furnish the technical component of 
        advanced diagnostic imaging services;
            ``(B) standards for qualifications and responsibilities of 
        medical directors and supervising physicians, including 
        standards that recognize the considerations described in 
        paragraph (4);
            ``(C) procedures to ensure that equipment used in 
        furnishing the technical component of advanced diagnostic 
        imaging services meets performance specifications;
            ``(D) standards that require the supplier have procedures 
        in place to ensure the safety of persons who furnish the 
        technical component of advanced diagnostic imaging services and 
        individuals to whom such services are furnished;
            ``(E) standards that require the establishment and 
        maintenance of a quality assurance and quality control program 
        by the supplier that is adequate and appropriate to ensure the 
        reliability, clarity, and accuracy of the technical quality of 
        diagnostic images produced by such supplier; and
            ``(F) any other standards or procedures the Secretary 
        determines appropriate.
        ``(4) Recognition in standards for the evaluation of medical 
    directors and supervising physicians.--The standards described in 
    paragraph (3)(B) shall recognize whether a medical director or 
    supervising physician--
            ``(A) in a particular specialty receives training in 
        advanced diagnostic imaging services in a residency program;
            ``(B) has attained, through experience, the necessary 
        expertise to be a medical director or a supervising physician;
            ``(C) has completed any continuing medical education 
        courses relating to such services; or
            ``(D) has met such other standards as the Secretary 
        determines appropriate.
        ``(5) Rule for accreditations made prior to designation.--In 
    the case of a supplier that is accredited before January 1, 2010, 
    by an accreditation organization designated by the Secretary under 
    paragraph (2)(B) as of January 1, 2010, such supplier shall be 
    considered to have been accredited by an organization designated by 
    the Secretary under such paragraph as of January 1, 2012, for the 
    remaining period such accreditation is in effect.''.
        (2) Conforming amendments.--
            (A) In general.--Section 1862(a) of the Social Security Act 
        (42 U.S.C. 1395y(a)) is amended--
                (i) in paragraph (21), by striking ``or'' at the end;
                (ii) in paragraph (22), by striking the period at the 
            end and inserting ``; or''; and
                (iii) by inserting after paragraph (22) the following 
            new paragraph:
        ``(23) which are the technical component of advanced diagnostic 
    imaging services described in section 1834(e)(1)(B) for which 
    payment is made under the fee schedule established under section 
    1848(b) and that are furnished by a supplier (as defined in section 
    1861(d)), if such supplier is not accredited by an accreditation 
    organization designated by the Secretary under section 
    1834(e)(2)(B).''.
            (B) Effective date.--The amendments made by this paragraph 
        shall apply to advanced diagnostic imaging services furnished 
        on or after January 1, 2012.
    (b) Demonstration Project To Assess the Appropriate Use of Imaging 
Services.--
        (1) Conduct of demonstration project.--
            (A) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') shall 
        conduct a demonstration project using the models described in 
        paragraph (2)(E) to collect data regarding physician compliance 
        with appropriateness criteria selected under paragraph (2)(D) 
        in order to determine the appropriateness of advanced 
        diagnostic imaging services furnished to Medicare 
        beneficiaries.
            (B) Advanced diagnostic imaging services.--In this 
        subsection, the term ``advanced diagnostic imaging services'' 
        has the meaning given such term in section 1834(e)(1)(B) of the 
        Social Security Act, as added by subsection (a).
            (C) Authority to focus demonstration project.--The 
        Secretary may focus the demonstration project with respect to 
        certain advanced diagnostic imaging services, such as services 
        that account for a large amount of expenditures under the 
        Medicare program, services that have recently experienced a 
        high rate of growth, or services for which appropriateness 
        criteria exists.
        (2) Implementation and design of demonstration project.--
            (A) Implementation and duration.--
                (i) Implementation.--The Secretary shall implement the 
            demonstration project under this subsection not later than 
            January 1, 2010.
                (ii) Duration.--The Secretary shall conduct the 
            demonstration project under this subsection for a 2-year 
            period.
            (B) Application and selection of participating 
        physicians.--
                (i) Application.--Each physician that desires to 
            participate in the demonstration project under this 
            subsection shall submit an application to the Secretary at 
            such time, in such manner, and containing such information 
            as the Secretary may require.
                (ii) Selection.--The Secretary shall select physicians 
            to participate in the demonstration project under this 
            subsection from among physicians submitting applications 
            under clause (i). The Secretary shall ensure that the 
            physicians selected--

                    (I) represent a wide range of geographic areas, 
                demographic characteristics (such as urban, rural, and 
                suburban), and practice settings (such as private and 
                academic practices); and
                    (II) have the capability to submit data to the 
                Secretary (or an entity under a subcontract with the 
                Secretary) in an electronic format in accordance with 
                standards established by the Secretary.

            (C) Administrative costs and incentives.--The Secretary 
        shall--
                (i) reimburse physicians for reasonable administrative 
            costs incurred in participating in the demonstration 
            project under this subsection; and
                (ii) provide reasonable incentives to physicians to 
            encourage participation in the demonstration project under 
            this subsection.
            (D) Use of appropriateness criteria.--
                (i) In general.--The Secretary, in consultation with 
            medical specialty societies and other stakeholders, shall 
            select criteria with respect to the clinical 
            appropriateness of advanced diagnostic imaging services for 
            use in the demonstration project under this subsection.
                (ii) Criteria selected.--Any criteria selected under 
            clause (i) shall--

                    (I) be developed or endorsed by a medical specialty 
                society; and
                    (II) be developed in adherence to appropriateness 
                principles developed by a consensus organization, such 
                as the AQA alliance.

            (E) Models for collecting data regarding physician 
        compliance with selected criteria.--Subject to subparagraph 
        (H), in carrying out the demonstration project under this 
        subsection, the Secretary shall use each of the following 
        models for collecting data regarding physician compliance with 
        appropriateness criteria selected under subparagraph (D):
                (i) A model described in subparagraph (F).
                (ii) A model described in subparagraph (G).
                (iii) Any other model that the Secretary determines to 
            be useful in evaluating the use of appropriateness criteria 
            for advanced diagnostic imaging services.
            (F) Point of service model described.--A model described in 
        this subparagraph is a model that--
                (i) uses an electronic or paper intake form that--

                    (I) contains a certification by the physician 
                furnishing the imaging service that the data on the 
                intake form was confirmed with the Medicare beneficiary 
                before the service was furnished;
                    (II) contains standardized data elements for 
                diagnosis, service ordered, service furnished, and such 
                other information determined by the Secretary, in 
                consultation with medical specialty societies and other 
                stakeholders, to be germane to evaluating the 
                effectiveness of the use of appropriateness criteria 
                selected under subparagraph (D); and
                    (III) is accessible to physicians participating in 
                the demonstration project under this subsection in a 
                format that allows for the electronic submission of 
                such form; and

                (ii) provides for feedback reports in accordance with 
            paragraph (3)(B).
            (G) Point of order model described.--A model described in 
        this subparagraph is a model that--
                (i) uses a computerized order-entry system that 
            requires the transmittal of relevant supporting information 
            at the time of referral for advanced diagnostic imaging 
            services and provides automated decision-support feedback 
            to the referring physician regarding the appropriateness of 
            furnishing such imaging services; and
                (ii) provides for feedback reports in accordance with 
            paragraph (3)(B).
            (H) Limitation.--In no case may the Secretary use prior 
        authorization--
                (i) as a model for collecting data regarding physician 
            compliance with appropriateness criteria selected under 
            subparagraph (D) under the demonstration project under this 
            subsection; or
                (ii) under any model used for collecting such data 
            under the demonstration project.
            (I) Required contracts and performance standards for 
        certain entities.--
                (i) In general.--The Secretary shall enter into 
            contracts with entities to carry out the model described in 
            subparagraph (G).
                (ii) Performance standards.--The Secretary shall 
            establish and enforce performance standards for such 
            entities under the contracts entered into under clause (i), 
            including performance standards with respect to--

                    (I) the satisfaction of Medicare beneficiaries who 
                are furnished advanced diagnostic imaging services by a 
                physician participating in the demonstration project;
                    (II) the satisfaction of physicians participating 
                in the demonstration project;
                    (III) if applicable, timelines for the provision of 
                feedback reports under paragraph (3)(B); and
                    (IV) any other areas determined appropriate by the 
                Secretary.

        (3) Comparison of utilization of advanced diagnostic imaging 
    services and feedback reports.--
            (A) Comparison of utilization of advanced diagnostic 
        imaging services.--The Secretary shall consult with medical 
        specialty societies and other stakeholders to develop 
        mechanisms for comparing the utilization of advanced diagnostic 
        imaging services by physicians participating in the 
        demonstration project under this subsection against--
                (i) the appropriateness criteria selected under 
            paragraph (2)(D); and
                (ii) to the extent feasible, the utilization of such 
            services by physicians not participating in the 
            demonstration project.
            (B) Feedback reports.--The Secretary shall, in consultation 
        with medical specialty societies and other stakeholders, 
        develop mechanisms to provide feedback reports to physicians 
        participating in the demonstration project under this 
        subsection. Such feedback reports shall include--
                (i) a profile of the rate of compliance by the 
            physician with appropriateness criteria selected under 
            paragraph (2)(D), including a comparison of--

                    (I) the rate of compliance by the physician with 
                such criteria; and
                    (II) the rate of compliance by the physician's 
                peers (as defined by the Secretary) with such criteria; 
                and

                (ii) to the extent feasible, a comparison of--

                    (I) the rate of utilization of advanced diagnostic 
                imaging services by the physician; and
                    (II) the rate of utilization of such services by 
                the physician's peers (as defined by the Secretary) who 
                are not participating in the demonstration project.

        (4) Conduct of demonstration project and waiver.--
            (A) Conduct of demonstration project.--Chapter 35 of title 
        44, United States Code, shall not apply to the conduct of the 
        demonstration project under this subsection.
            (B) Waiver.--The Secretary may waive such provisions of 
        titles XI and XVIII of the Social Security Act (42 U.S.C. 1301 
        et seq.; 1395 et seq.) as may be necessary to carry out the 
        demonstration project under this subsection.
        (5) Evaluation and report.--
            (A) Evaluation.--The Secretary shall evaluate the 
        demonstration project under this subsection to--
                (i) assess the timeliness and efficacy of the 
            demonstration project;
                (ii) assess the performance of entities under a 
            contract entered into under paragraph (2)(I)(i);
                (iii) analyze data--

                    (I) on the rates of appropriate, uncertain, and 
                inappropriate advanced diagnostic imaging services 
                furnished by physicians participating in the 
                demonstration project;
                    (II) on patterns and trends in the appropriateness 
                and inappropriateness of such services furnished by 
                such physicians;
                    (III) on patterns and trends in national and 
                regional variations of care with respect to the 
                furnishing of such services; and
                    (IV) on the correlation between the appropriateness 
                of the services furnished and image results; and

                (iv) address--

                    (I) the thresholds used under the demonstration 
                project to identify acceptable and outlier levels of 
                performance with respect to the appropriateness of 
                advanced diagnostic imaging services furnished;
                    (II) whether prospective use of appropriateness 
                criteria could have an effect on the volume of such 
                services furnished;
                    (III) whether expansion of the use of 
                appropriateness criteria with respect to such services 
                to a broader population of Medicare beneficiaries would 
                be advisable;
                    (IV) whether, under such an expansion, physicians 
                who demonstrate consistent compliance with such 
                appropriateness criteria should be exempted from 
                certain requirements;
                    (V) the use of incident-specific versus practice-
                specific outlier information in formulating future 
                recommendations with respect to the use of 
                appropriateness criteria for such services under the 
                Medicare program; and
                    (VI) the potential for using methods (including 
                financial incentives), in addition to those used under 
                the models under the demonstration project, to ensure 
                compliance with such criteria.

            (B) Report.--Not later than 1 year after the completion of 
        the demonstration project under this subsection, the Secretary 
        shall submit to Congress a report containing the results of the 
        evaluation of the demonstration project conducted under 
        subparagraph (A), together with recommendations for such 
        legislation and administrative action as the Secretary 
        determines appropriate.
        (6) Funding.--The Secretary shall provide for the transfer from 
    the Federal Supplementary Medical Insurance Trust Fund established 
    under section 1841 of the Social Security Act (42 U.S.C. 1395t) of 
    $10,000,000, for carrying out the demonstration project under this 
    subsection (including costs associated with administering the 
    demonstration project, reimbursing physicians for administrative 
    costs and providing incentives to encourage participation under 
    paragraph (2)(C), entering into contracts under paragraph (2)(I), 
    and evaluating the demonstration project under paragraph (5)).
    (c) GAO Study and Reports on Accreditation Requirement for Advanced 
Diagnostic Imaging Services.--
        (1) Study.--
            (A) In general.--The Comptroller General of the United 
        States (in this subsection referred to as the ``Comptroller 
        General'') shall conduct a study, by imaging modality, on--
                (i) the effect of the accreditation requirement under 
            section 1834(e) of the Social Security Act, as added by 
            subsection (a); and
                (ii) any other relevant questions involving access to, 
            and the value of, advanced diagnostic imaging services for 
            Medicare beneficiaries.
            (B) Issues.--The study conducted under subparagraph (A) 
        shall examine the following:
                (i) The impact of such accreditation requirement on the 
            number, type, and quality of imaging services furnished to 
            Medicare beneficiaries.
                (ii) The cost of such accreditation requirement, 
            including costs to facilities of compliance with such 
            requirement and costs to the Secretary of administering 
            such requirement.
                (iii) Access to imaging services by Medicare 
            beneficiaries, especially in rural areas, before and after 
            implementation of such accreditation requirement.
                (iv) Such other issues as the Secretary determines 
            appropriate.
        (2) Reports.--
            (A) Preliminary report.--Not later than March 1, 2013, the 
        Comptroller General shall submit a preliminary report to 
        Congress on the study conducted under paragraph (1).
            (B) Final report.--Not later than March 1, 2014, the 
        Comptroller General shall submit a final report to Congress on 
        the study conducted under paragraph (1), together with 
        recommendations for such legislation and administrative action 
        as the Comptroller General determines appropriate.
    SEC. 136. EXTENSION OF TREATMENT OF CERTAIN PHYSICIAN PATHOLOGY 
      SERVICES UNDER MEDICARE.
    Section 542(c) of the Medicare, Medicaid, and SCHIP Benefits 
Improvement and Protection Act of 2000 (as enacted into law by section 
1(a)(6) of Public Law 106-554), as amended by section 732 of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(42 U.S.C. 1395w-4 note), section 104 of division B of the Tax Relief 
and Health Care Act of 2006 (42 U.S.C. 1395w-4 note), and section 104 
of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law 
110-173), is amended by striking ``2007, and the first 6 months of 
2008'' and inserting ``2007, 2008, and 2009''.
    SEC. 137. ACCOMMODATION OF PHYSICIANS ORDERED TO ACTIVE DUTY IN THE 
      ARMED SERVICES.
    Section 1842(b)(6)(D)(iii) of the Social Security Act (42 U.S.C. 
1395u(b)(6)(D)(iii)), as amended by section 116 of the Medicare, 
Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-173), is 
amended by striking ``(before July 1, 2008)''.
    SEC. 138. ADJUSTMENT FOR MEDICARE MENTAL HEALTH SERVICES.
    (a) Payment Adjustment.--
        (1) In general.--For purposes of payment for services furnished 
    under the physician fee schedule under section 1848 of the Social 
    Security Act (42 U.S.C. 1395w-4) during the period beginning on 
    July 1, 2008, and ending on December 31, 2009, the Secretary of 
    Health and Human Services shall increase the fee schedule otherwise 
    applicable for specified services by 5 percent.
        (2) Nonapplication of budget-neutrality.--The budget-neutrality 
    provision of section 1848(c)(2)(B)(ii) of the Social Security Act 
    (42 U.S.C. 1395w-4(c)(2)(B)(ii)) shall not apply to the adjustments 
    described in paragraph (1).
    (b) Definition of Specified Services.--In this section, the term 
``specified services'' means procedure codes for services in the 
categories of the Health Care Common Procedure Coding System, 
established by the Secretary of Health and Human Services under section 
1848(c)(5) of the Social Security Act (42 U.S.C. 1395w-4(c)(5)), as of 
July 1, 2007, and as subsequently modified by the Secretary, consisting 
of psychiatric therapeutic procedures furnished in office or other 
outpatient facility settings or in inpatient hospital, partial 
hospital, or residential care facility settings, but only with respect 
to such services in such categories that are in the subcategories of 
services which are--
        (1) insight oriented, behavior modifying, or supportive 
    psychotherapy; or
        (2) interactive psychotherapy.
    (c) Implementation.--Notwithstanding any other provision of law, 
the Secretary may implement this section by program instruction or 
otherwise.
    SEC. 139. IMPROVEMENTS FOR MEDICARE ANESTHESIA TEACHING PROGRAMS.
    (a) Special Payment Rule for Teaching Anesthesiologists.--Section 
1848(a) of the Social Security Act (42 U.S.C. 1395w-4(a)), as amended 
by section 132(b), is amended--
        (1) in paragraph (4)(A), by inserting ``except as provided in 
    paragraph (5),'' after ``anesthesia cases,''; and
        (2) by adding at the end the following new paragraph:
        ``(6) Special rule for teaching anesthesiologists.--With 
    respect to physicians' services furnished on or after January 1, 
    2010, in the case of teaching anesthesiologists involved in the 
    training of physician residents in a single anesthesia case or two 
    concurrent anesthesia cases, the fee schedule amount to be applied 
    shall be 100 percent of the fee schedule amount otherwise 
    applicable under this section if the anesthesia services were 
    personally performed by the teaching anesthesiologist alone and 
    paragraph (4) shall not apply if--
            ``(A) the teaching anesthesiologist is present during all 
        critical or key portions of the anesthesia service or procedure 
        involved; and
            ``(B) the teaching anesthesiologist (or another 
        anesthesiologist with whom the teaching anesthesiologist has 
        entered into an arrangement) is immediately available to 
        furnish anesthesia services during the entire procedure.''.
    (b) Treatment of Certified Registered Nurse Anesthetists.--With 
respect to items and services furnished on or after January 1, 2010, 
the Secretary of Health and Human Services shall make appropriate 
adjustments to payments under the Medicare program under title XVIII of 
the Social Security Act for teaching certified registered nurse 
anesthetists to implement a policy with respect to teaching certified 
registered nurse anesthetists that--
        (1) is consistent with the adjustments made by the special rule 
    for teaching anesthesiologists under section 1848(a)(6) of the 
    Social Security Act, as added by subsection (a); and
        (2) maintains the existing payment differences between teaching 
    anesthesiologists and teaching certified registered nurse 
    anesthetists.

            PART II--OTHER PAYMENT AND COVERAGE IMPROVEMENTS

    SEC. 141. EXTENSION OF EXCEPTIONS PROCESS FOR MEDICARE THERAPY 
      CAPS.
    Section 1833(g)(5) of the Social Security Act (42 U.S.C. 
1395l(g)(5)), as amended by section 105 of the Medicare, Medicaid, and 
SCHIP Extension Act of 2007 (Public Law 110-173), is amended by 
striking ``June 30, 2008'' and inserting ``December 31, 2009''.
    SEC. 142. EXTENSION OF PAYMENT RULE FOR BRACHYTHERAPY AND 
      THERAPEUTIC RADIOPHARMACEUTICALS.
    Section 1833(t)(16)(C) of the Social Security Act (42 U.S.C. 
1395l(t)(16)(C)), as amended by section 106 of the Medicare, Medicaid, 
and SCHIP Extension Act of 2007 (Public Law 110-173), is amended by 
striking ``July 1, 2008'' each place it appears and inserting ``January 
1, 2010''.
    SEC. 143. SPEECH-LANGUAGE PATHOLOGY SERVICES.
    (a) In General.--Section 1861(ll) of the Social Security Act (42 
U.S.C. 1395x(ll)) is amended--
        (1) by redesignating paragraphs (2) and (3) as paragraphs (3) 
    and (4), respectively; and
        (2) by inserting after paragraph (1) the following new 
    paragraph:
    ``(2) The term `outpatient speech-language pathology services' has 
the meaning given the term `outpatient physical therapy services' in 
subsection (p), except that in applying such subsection--
        ``(A) `speech-language pathology' shall be substituted for 
    `physical therapy' each place it appears; and
        ``(B) `speech-language pathologist' shall be substituted for 
    `physical therapist' each place it appears.''.
    (b) Conforming Amendments.--
        (1) Section 1832(a)(2)(C) of the Social Security Act (42 U.S.C. 
    1395k(a)(2)(C)) is amended--
            (A) by striking ``and outpatient'' and inserting ``, 
        outpatient''; and
            (B) by inserting before the semicolon at the end the 
        following: ``, and outpatient speech-language pathology 
        services (other than services to which the second sentence of 
        section 1861(p) applies through the application of section 
        1861(ll)(2))''.
        (2) Subparagraphs (A) and (B) of section 1833(a)(8) of the 
    Social Security Act (42 U.S.C. 1395l(a)(8)) are each amended by 
    striking ``(which includes outpatient speech-language pathology 
    services)'' and inserting ``, outpatient speech-language pathology 
    services,''.
        (3) Section 1833(g)(1) of the Social Security Act (42 U.S.C. 
    1395l(g)(1)) is amended--
            (A) by inserting ``and speech-language pathology services 
        of the type described in such section through the application 
        of section 1861(ll)(2)'' after ``1861(p)''; and
            (B) by inserting ``and speech-language pathology services'' 
        after ``and physical therapy services''.
        (4) The second sentence of section 1835(a) of the Social 
    Security Act (42 U.S.C. 1395n(a)) is amended--
            (A) by striking ``section 1861(g)'' and inserting 
        ``subsection (g) or (ll)(2) of section 1861'' each place it 
        appears; and
            (B) by inserting ``or outpatient speech-language pathology 
        services, respectively'' after ``occupational therapy 
        services''.
        (5) Section 1861(p) of the Social Security Act (42 U.S.C. 
    1395x(p)) is amended by striking the fourth sentence.
        (6) Section 1861(s)(2)(D) of the Social Security Act (42 U.S.C. 
    1395x(s)(2)(D)) is amended by inserting ``, outpatient speech-
    language pathology services,'' after ``physical therapy services''.
        (7) Section 1862(a)(20) of the Social Security Act (42 U.S.C. 
    1395y(a)(20)) is amended--
            (A) by striking ``outpatient occupational therapy services 
        or outpatient physical therapy services'' and inserting 
        ``outpatient physical therapy services, outpatient speech-
        language pathology services, or outpatient occupational therapy 
        services''; and
            (B) by striking ``section 1861(g)'' and inserting 
        ``subsection (g) or (ll)(2) of section 1861''.
        (8) Section 1866(e)(1) of the Social Security Act (42 U.S.C. 
    1395cc(e)(1)) is amended--
            (A) by striking ``section 1861(g)'' and inserting 
        ``subsection (g) or (ll)(2) of section 1861'' the first two 
        places it appears;
            (B) by striking ``defined) or'' and inserting 
        ``defined),''; and
            (C) by inserting before the semicolon at the end the 
        following: ``, or (through the operation of section 
        1861(ll)(2)) with respect to the furnishing of outpatient 
        speech-language pathology''.
        (9) Section 1877(h)(6) of the Social Security Act (42 U.S.C. 
    1395nn(h)(6)) is amended by adding at the end the following new 
    subparagraph:
            ``(L) Outpatient speech-language pathology services.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after July 1, 2009.
    (d) Construction.--Nothing in this section shall be construed to 
affect existing regulations and policies of the Centers for Medicare & 
Medicaid Services that require physician oversight of care as a 
condition of payment for speech-language pathology services under part 
B of the Medicare program.
    SEC. 144. PAYMENT AND COVERAGE IMPROVEMENTS FOR PATIENTS WITH 
      CHRONIC OBSTRUCTIVE PULMONARY DISEASE AND OTHER CONDITIONS.
    (a) Coverage of Pulmonary and Cardiac Rehabilitation.--
        (1) In general.--Section 1861 of the Social Security Act (42 
    U.S.C. 1395x), as amended by section 101(a), is amended--
            (A) in subsection (s)(2)--
                (i) in subparagraph (AA), by striking ``and'' at the 
            end;
                (ii) by adding at the end the following new 
            subparagraphs:
            ``(CC) items and services furnished under a cardiac 
        rehabilitation program (as defined in subsection (eee)(1)) or 
        under a pulmonary rehabilitation program (as defined in 
        subsection (fff)(1)); and
            ``(DD) items and services furnished under an intensive 
        cardiac rehabilitation program (as defined in subsection 
        (eee)(4));''; and
            (B) by adding at the end the following new subsections:

  ``Cardiac Rehabilitation Program; Intensive Cardiac Rehabilitation 
                                Program

    ``(eee)(1) The term `cardiac rehabilitation program' means a 
physician-supervised program (as described in paragraph (2)) that 
furnishes the items and services described in paragraph (3).
    ``(2) A program described in this paragraph is a program under 
which--
        ``(A) items and services under the program are delivered--
            ``(i) in a physician's office;
            ``(ii) in a hospital on an outpatient basis; or
            ``(iii) in other settings determined appropriate by the 
        Secretary.
        ``(B) a physician is immediately available and accessible for 
    medical consultation and medical emergencies at all times items and 
    services are being furnished under the program, except that, in the 
    case of items and services furnished under such a program in a 
    hospital, such availability shall be presumed; and
        ``(C) individualized treatment is furnished under a written 
    plan established, reviewed, and signed by a physician every 30 days 
    that describes--
            ``(i) the individual's diagnosis;
            ``(ii) the type, amount, frequency, and duration of the 
        items and services furnished under the plan; and
            ``(iii) the goals set for the individual under the plan.
    ``(3) The items and services described in this paragraph are--
        ``(A) physician-prescribed exercise;
        ``(B) cardiac risk factor modification, including education, 
    counseling, and behavioral intervention (to the extent such 
    education, counseling, and behavioral intervention is closely 
    related to the individual's care and treatment and is tailored to 
    the individual's needs);
        ``(C) psychosocial assessment;
        ``(D) outcomes assessment; and
        ``(E) such other items and services as the Secretary may 
    determine, but only if such items and services are--
            ``(i) reasonable and necessary for the diagnosis or active 
        treatment of the individual's condition;
            ``(ii) reasonably expected to improve or maintain the 
        individual's condition and functional level; and
            ``(iii) furnished under such guidelines relating to the 
        frequency and duration of such items and services as the 
        Secretary shall establish, taking into account accepted norms 
        of medical practice and the reasonable expectation of 
        improvement of the individual.
    ``(4)(A) The term `intensive cardiac rehabilitation program' means 
a physician-supervised program (as described in paragraph (2)) that 
furnishes the items and services described in paragraph (3) and has 
shown, in peer-reviewed published research, that it accomplished--
        ``(i) one or more of the following:
            ``(I) positively affected the progression of coronary heart 
        disease; or
            ``(II) reduced the need for coronary bypass surgery; or
            ``(III) reduced the need for percutaneous coronary 
        interventions; and
        ``(ii) a statistically significant reduction in 5 or more of 
    the following measures from their level before receipt of cardiac 
    rehabilitation services to their level after receipt of such 
    services:
            ``(I) low density lipoprotein;
            ``(II) triglycerides;
            ``(III) body mass index;
            ``(IV) systolic blood pressure;
            ``(V) diastolic blood pressure; or
            ``(VI) the need for cholesterol, blood pressure, and 
        diabetes medications.
    ``(B) To be eligible for an intensive cardiac rehabilitation 
program, an individual must have--
        ``(i) had an acute myocardial infarction within the preceding 
    12 months;
        ``(ii) had coronary bypass surgery;
        ``(iii) stable angina pectoris;
        ``(iv) had heart valve repair or replacement;
        ``(v) had percutaneous transluminal coronary angioplasty (PTCA) 
    or coronary stenting; or
        ``(vi) had a heart or heart-lung transplant.
    ``(C) An intensive cardiac rehabilitation program may be provided 
in a series of 72 one-hour sessions (as defined in section 1848(b)(5)), 
up to 6 sessions per day, over a period of up to 18 weeks.
    ``(5) The Secretary shall establish standards to ensure that a 
physician with expertise in the management of individuals with cardiac 
pathophysiology who is licensed to practice medicine in the State in 
which a cardiac rehabilitation program (or the intensive cardiac 
rehabilitation program, as the case may be) is offered--
        ``(A) is responsible for such program; and
        ``(B) in consultation with appropriate staff, is involved 
    substantially in directing the progress of individual in the 
    program.

                   ``Pulmonary Rehabilitation Program

    ``(fff)(1) The term `pulmonary rehabilitation program' means a 
physician-supervised program (as described in subsection (eee)(2) with 
respect to a program under this subsection) that furnishes the items 
and services described in paragraph (2).
    ``(2) The items and services described in this paragraph are--
        ``(A) physician-prescribed exercise;
        ``(B) education or training (to the extent the education or 
    training is closely and clearly related to the individual's care 
    and treatment and is tailored to such individual's needs);
        ``(C) psychosocial assessment;
        ``(D) outcomes assessment; and
        ``(E) such other items and services as the Secretary may 
    determine, but only if such items and services are--
            ``(i) reasonable and necessary for the diagnosis or active 
        treatment of the individual's condition;
            ``(ii) reasonably expected to improve or maintain the 
        individual's condition and functional level; and
            ``(iii) furnished under such guidelines relating to the 
        frequency and duration of such items and services as the 
        Secretary shall establish, taking into account accepted norms 
        of medical practice and the reasonable expectation of 
        improvement of the individual.
    ``(3) The Secretary shall establish standards to ensure that a 
physician with expertise in the management of individuals with 
respiratory pathophysiology who is licensed to practice medicine in the 
State in which a pulmonary rehabilitation program is offered--
        ``(A) is responsible for such program; and
        ``(B) in consultation with appropriate staff, is involved 
    substantially in directing the progress of individual in the 
    program.''.
        (2) Payment for intensive cardiac rehabilitation programs.--
            (A) Inclusion in physician fee schedule.--Section 
        1848(j)(3) of the Social Security Act (42 U.S.C. 1395w-4(j)(3)) 
        is amended by inserting ``(2)(DD),'' after ``(2)(AA),''.
            (B) Conforming amendment.--Section 1848(b) of the Social 
        Security Act (42 U.S.C. 1395w-4(b)) is amended by adding at the 
        end the following new paragraph:
        ``(5) Treatment of intensive cardiac rehabilitation program.--
            ``(A) In general.--In the case of an intensive cardiac 
        rehabilitation program described in section 1861(eee)(4), the 
        Secretary shall substitute the Medicare OPD fee schedule amount 
        established under the prospective payment system for hospital 
        outpatient department service under paragraph (3)(D) of section 
        1833(t) for cardiac rehabilitation (under HCPCS codes 93797 and 
        93798 for calendar year 2007, or any succeeding HCPCS codes for 
        cardiac rehabilitation).
            ``(B) Definition of session.--Each of the services 
        described in subparagraphs (A) through (E) of section 
        1861(eee)(3), when furnished for one hour, is a separate 
        session of intensive cardiac rehabilitation.
            ``(C) Multiple sessions per day.--Payment may be made for 
        up to 6 sessions per day of the series of 72 one-hour sessions 
        of intensive cardiac rehabilitation services described in 
        section 1861(eee)(4)(B).''.
        (3) Effective date.--The amendments made by this subsection 
    shall apply to items and services furnished on or after January 1, 
    2010.
    (b) Repeal of Transfer of Ownership of Oxygen Equipment.--
        (1) In general.--Section 1834(a)(5)(F) of the Social Security 
    Act (42 U.S.C. 1395m(a)(5)(F)) is amended--
            (A) in the heading, by striking ``OWNERSHIP of equipment'' 
        and inserting ``RENTAL cap''; and
            (B) by striking clause (ii) and inserting the following:
                ``(ii) Payments and rules after rental cap.--After the 
            36th continuous month during which payment is made for the 
            equipment under this paragraph--

                    ``(I) the supplier furnishing such equipment under 
                this subsection shall continue to furnish the equipment 
                during any period of medical need for the remainder of 
                the reasonable useful lifetime of the equipment, as 
                determined by the Secretary;
                    ``(II) payments for oxygen shall continue to be 
                made in the amount recognized for oxygen under 
                paragraph (9) for the period of medical need; and
                    ``(III) maintenance and servicing payments shall, 
                if the Secretary determines such payments are 
                reasonable and necessary, be made (for parts and labor 
                not covered by the supplier's or manufacturer's 
                warranty, as determined by the Secretary to be 
                appropriate for the equipment), and such payments shall 
                be in an amount determined to be appropriate by the 
                Secretary.''.

        (2) Effective date.--The amendments made by paragraph (1) shall 
    take effect on January 1, 2009.
    SEC. 145. CLINICAL LABORATORY TESTS.
    (a) Repeal of Medicare Competitive Bidding Demonstration Project 
for Clinical Laboratory Services.--
        (1) In general.--Section 1847 of the Social Security Act (42 
    U.S.C. 1395w-3) is amended by striking subsection (e).
        (2) Conforming amendments.--Section 1833(a)(1)(D) of the Social 
    Security Act (42 U.S.C. 1395l(a)(1)(D)) is amended--
            (A) by inserting ``or'' before ``(ii)''; and
            (B) by striking ``or (iii) on the basis'' and all that 
        follows before the comma at the end.
        (3) Effective date.--The amendments made by this subsection 
    shall take effect on the date of the enactment of this Act.
    (b) Clinical Laboratory Test Fee Schedule Update Adjustment.--
Section 1833(h)(2)(A)(i) of the Social Security Act (42 U.S.C. 
1395l(h)(2)(A)(ii)) is amended by inserting ``minus, for each of the 
years 2009 through 2013, 0.5 percentage points'' after ``city 
average)''.
    SEC. 146. IMPROVED ACCESS TO AMBULANCE SERVICES.
    (a) Extension of Increased Medicare Payments for Ground Ambulance 
Services.--Section 1834(l)(13) of the Social Security Act (42 U.S.C. 
1395m(l)(13)) is amended--
        (1) in subparagraph (A)--
            (A) in the matter preceding clause (i), by inserting ``and 
        for such services furnished on or after July 1, 2008, and 
        before January 1, 2010'' after ``2007,'';
            (B) in clause (i), by inserting ``(or 3 percent if such 
        service is furnished on or after July 1, 2008, and before 
        January 1, 2010)'' after ``2 percent''; and
            (C) in clause (ii), by inserting ``(or 2 percent if such 
        service is furnished on or after July 1, 2008, and before 
        January 1, 2010)'' after ``1 percent''; and
        (2) in subparagraph (B)--
            (A) in the heading, by striking ``2006'' and inserting 
        ``applicable period''; and
            (B) by inserting ``applicable'' before ``period''.
    (b) Air Ambulance Payment Improvements.--
        (1) Treatment of certain areas for payment for air ambulance 
    services under the ambulance fee schedule.--Notwithstanding any 
    other provision of law, for purposes of making payments under 
    section 1834(l) of the Social Security Act (42 U.S.C. 1395m(l)) for 
    air ambulance services furnished during the period beginning on 
    July 1, 2008, and ending on December 31, 2009, any area that was 
    designated as a rural area for purposes of making payments under 
    such section for air ambulance services furnished on December 31, 
    2006, shall be treated as a rural area for purposes of making 
    payments under such section for air ambulance services furnished 
    during such period.
        (2) Clarification regarding satisfaction of requirement of 
    medically necessary.--
            (A) In general.--Section 1834(l)(14)(B)(i) of the Social 
        Security Act (42 U.S.C. 1395m(l)(14)(B)(i)) is amended by 
        striking ``reasonably determines or certifies'' and inserting 
        ``certifies or reasonably determines''.
            (B) Effective date.--The amendment made by subparagraph (A) 
        shall apply to services furnished on or after the date of the 
        enactment of this Act.
    SEC. 147. EXTENSION AND EXPANSION OF THE MEDICARE HOLD HARMLESS 
      PROVISION UNDER THE PROSPECTIVE PAYMENT SYSTEM FOR HOSPITAL 
      OUTPATIENT DEPARTMENT (HOPD) SERVICES FOR CERTAIN HOSPITALS.
    Section 1833(t)(7)(D)(i) of the Social Security Act (42 U.S.C. 
1395l(t)(7)(D)(i)) is amended--
        (1) in subclause (II)--
            (A) in the first sentence, by striking ``2009'' and 
        inserting ``2010''; and
            (B) by striking the second sentence and inserting the 
        following new sentence: ``For purposes of the preceding 
        sentence, the applicable percentage shall be 95 percent with 
        respect to covered OPD services furnished in 2006, 90 percent 
        with respect to such services furnished in 2007, and 85 percent 
        with respect to such services furnished in 2008 or 2009.''; and
        (2) by adding at the end the following new subclause:
                ``(III) In the case of a sole community hospital (as 
            defined in section 1886(d)(5)(D)(iii)) that has not more 
            than 100 beds, for covered OPD services furnished on or 
            after January 1, 2009, and before January 1, 2010, for 
            which the PPS amount is less than the pre-BBA amount, the 
            amount of payment under this subsection shall be increased 
            by 85 percent of the amount of such difference.''.
    SEC. 148. CLARIFICATION OF PAYMENT FOR CLINICAL LABORATORY TESTS 
      FURNISHED BY CRITICAL ACCESS HOSPITALS.
    (a) In General.--Section 1834(g)(4) of the Social Security Act (42 
U.S.C. 1395m(g)(4)) is amended--
        (1) in the heading, by striking ``no beneficiary cost-sharing 
    for'' and inserting ``treatment of''; and
        (2) by adding at the end the following new sentence: ``For 
    purposes of the preceding sentence and section 1861(mm)(3), 
    clinical diagnostic laboratory services furnished by a critical 
    access hospital shall be treated as being furnished as part of 
    outpatient critical access services without regard to whether the 
    individual with respect to whom such services are furnished is 
    physically present in the critical access hospital, or in a skilled 
    nursing facility or a clinic (including a rural health clinic) that 
    is operated by a critical access hospital, at the time the specimen 
    is collected.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to services furnished on or after July 1, 2009.
    SEC. 149. ADDING CERTAIN ENTITIES AS ORIGINATING SITES FOR PAYMENT 
      OF TELEHEALTH SERVICES.
    (a) In General.--Section 1834(m)(4)(C)(ii) of the Social Security 
Act (42 U.S.C. 1395m(m)(4)(C)(ii)) is amended by adding at the end the 
following new subclauses:

                    ``(VI) A hospital-based or critical access 
                hospital-based renal dialysis center (including 
                satellites).
                    ``(VII) A skilled nursing facility (as defined in 
                section 1819(a)).
                    ``(VIII) A community mental health center (as 
                defined in section 1861(ff)(3)(B)).''.

    (b) Conforming Amendment.--Section 1888(e)(2)(A)(ii) of the Social 
Security Act (42 U.S.C. 1395yy(e)(2)(A)(ii)) is amended by inserting 
``telehealth services furnished under section 1834(m)(4)(C)(ii)(VII),'' 
after ``section 1861(s)(2),''.
    (c) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after January 1, 2009.
    SEC. 150. MEDPAC STUDY AND REPORT ON IMPROVING CHRONIC CARE 
      DEMONSTRATION PROGRAMS.
    (a) Study.--The Medicare Payment Advisory Commission (in this 
section referred to as the ``Commission'') shall conduct a study on the 
feasability and advisability of establishing a Medicare Chronic Care 
Practice Research Network that would serve as a standing network of 
providers testing new models of care coordination and other care 
approaches for chronically ill beneficiaries, including the initiation, 
operation, evaluation, and, if appropriate, expansion of such models to 
the broader Medicare patient population. In conducting such study, the 
Commission shall take into account the structure, implementation, and 
results of prior and existing care coordination and disease management 
demonstrations and pilots, including the Medicare Coordinated Care 
Demonstration Project under section 4016 of the Balanced Budget Act of 
1997 (42 U.S.C. 1395b-1 note) and the chronic care improvement programs 
under section 1807 of the Social Security Act (42 U.S.C. 1395b-8), 
commonly known to as ``Medicare Health Support''.
    (b) Report.--Not later than June 15, 2009, the Commission shall 
submit to Congress a report containing the results of the study 
conducted under subsection (a).
    SEC. 151. INCREASE OF FQHC PAYMENT LIMITS.
    (a) In General.--Section 1833 of the Social Security Act (42 U.S.C. 
1395l) is amended by adding at the end the following new subsection:
    ``(v) Increase of FQHC Payment Limits.--In the case of services 
furnished by Federally qualified health centers (as defined in section 
1861(aa)(4)), the Secretary shall establish payment limits with respect 
to such services under this part for services furnished--
        ``(1) in 2010, at the limits otherwise established under this 
    part for such year increased by $5; and
        ``(2) in a subsequent year, at the limits established 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.''.
    (b) Study and Report on the Effects and Adequacy of the Medicare 
Federally Qualified Health Center Payment Structure.--
        (1) Study.--The Comptroller General of the United States shall 
    conduct a study to determine whether the structure for payments for 
    services furnished by Federally qualified health centers (as 
    defined in section 1861(aa)(4) of the Social Security Act (42 
    U.S.C. 1395x(aa)(4)) under part B of title XVIII of the Social 
    Security Act (42 U.S.C. 1395j et seq.) adequately reimburses 
    Federally qualified health centers for the care furnished to 
    Medicare beneficiaries. In conducting such study, the Comptroller 
    General shall--
            (A) use the most current cost report data available;
            (B) examine the effects of the payment limits established 
        with respect to such services under such part B on the ability 
        of Federally qualified health centers to furnish care to 
        Medicare beneficiaries; and
            (C) examine the cost of furnishing services covered under 
        the Medicare program as of the date of the enactment of this 
        Act that were not covered under such program as of the date on 
        which the Secretary determined the payment rate for Federally 
        qualified health centers in 1991.
        (2) Report.--Not later than 15 months after the date of the 
    enactment of this Act, the Comptroller General of the United States 
    shall submit to Congress a report on the study conducted under 
    paragraph (1), together with recommendations for such legislation 
    and administrative action the Comptroller General determines 
    appropriate, taking into consideration the structure and adequacy 
    of the prospective payment methodology used to make payments to 
    Federally qualified health centers under the Medicaid program under 
    title XIX of the Social Security Act (42 U.S.C. 1396 et seq.).
    SEC. 152. KIDNEY DISEASE EDUCATION AND AWARENESS PROVISIONS.
    (a) Chronic Kidney Disease Initiatives.--Part P of title III of the 
Public Health Service Act (42 U.S.C. 280g et seq.) is amended by adding 
at the end the following new section:
``SEC. 399R. CHRONIC KIDNEY DISEASE INITIATIVES.
    ``(a) In General.--The Secretary shall establish pilot projects 
to--
        ``(1) increase public and medical community awareness 
    (particularly of those who treat patients with diabetes and 
    hypertension) regarding chronic kidney disease, focusing on 
    prevention;
        ``(2) increase screening for chronic kidney disease, focusing 
    on Medicare beneficiaries at risk of chronic kidney disease; and
        ``(3) enhance surveillance systems to better assess the 
    prevalence and incidence of chronic kidney disease.
    ``(b) Scope and Duration.--
        ``(1) Scope.--The Secretary shall select at least 3 States in 
    which to conduct pilot projects under this section.
        ``(2) Duration.--The pilot projects under this section shall be 
    conducted for a period that is not longer than 5 years and shall 
    begin on January 1, 2009.
    ``(c) Evaluation and Report.--The Comptroller General of the United 
States shall conduct an evaluation of the pilot projects conducted 
under this section. Not later than 12 months after the date on which 
the pilot projects are completed, the Comptroller General shall submit 
to Congress a report on the evaluation.
    ``(d) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary for the purpose of carrying 
out this section.''.
    (b) Medicare Coverage of Kidney Disease Patient Education 
Services.--
        (1) Coverage of kidney disease education services.--
            (A) Coverage.--Section 1861(s)(2) of the Social Security 
        Act (42 U.S.C. 1395x(s)(2)), as amended by section 144(a), is 
        amended--
                (i) in subparagraph (CC), by striking ``and'' after the 
            semicolon at the end;
                (ii) in subparagraph (DD), by adding ``and'' after the 
            semicolon at the end; and
                (iii) by adding at the end the following new 
            subparagraph:
        ``(EE) kidney disease education services (as defined in 
    subsection (ggg));''.
            (B) Services described.--Section 1861 of the Social 
        Security Act (42 U.S.C. 1395x), as amended by section 144(a), 
        is amended by adding at the end the following new subsection:

                  ``Kidney Disease Education Services

    ``(ggg)(1) The term `kidney disease education services' means 
educational services that are--
        ``(A) furnished to an individual with stage IV chronic kidney 
    disease who, according to accepted clinical guidelines identified 
    by the Secretary, will require dialysis or a kidney transplant;
        ``(B) furnished, upon the referral of the physician managing 
    the individual's kidney condition, by a qualified person (as 
    defined in paragraph (2)); and
        ``(C) designed--
            ``(i) to provide comprehensive information (consistent with 
        the standards set under paragraph (3)) regarding--
                ``(I) the management of comorbidities, including for 
            purposes of delaying the need for dialysis;
                ``(II) the prevention of uremic complications; and
                ``(III) each option for renal replacement therapy 
            (including hemodialysis and peritoneal dialysis at home and 
            in-center as well as vascular access options and 
            transplantation);
            ``(ii) to ensure that the individual has the opportunity to 
        actively participate in the choice of therapy; and
            ``(iii) to be tailored to meet the needs of the individual 
        involved.
    ``(2)(A) The term `qualified person' means--
        ``(i) a physician (as defined in section 1861(r)(1)) or a 
    physician assistant, nurse practitioner, or clinical nurse 
    specialist (as defined in section 1861(aa)(5)), who furnishes 
    services for which payment may be made under the fee schedule 
    established under section 1848; and
        ``(ii) a provider of services located in a rural area (as 
    defined in section 1886(d)(2)(D)).
    ``(B) Such term does not include a provider of services (other than 
a provider of services described in subparagraph (A)(ii)) or a renal 
dialysis facility.
    ``(3) The Secretary shall set standards for the content of such 
information to be provided under paragraph (1)(C)(i) after consulting 
with physicians, other health professionals, health educators, 
professional organizations, accrediting organizations, kidney patient 
organizations, dialysis facilities, transplant centers, network 
organizations described in section 1881(c)(2), and other knowledgeable 
persons. To the extent possible the Secretary shall consult with 
persons or entities described in the previous sentence, other than a 
dialysis facility, that has not received industry funding from a drug 
or biological manufacturer or dialysis facility.
    ``(4) No individual shall be furnished more than 6 sessions of 
kidney disease education services under this title.''.
            (C) Payment under the physician fee schedule.--Section 
        1848(j)(3) of the Social Security Act (42 U.S.C. 1395w-
        4(j)(3)), as amended by section 144(b), is amended by inserting 
        ``(2)(EE),'' after ``(2)(DD),''.
            (D) Limitation on number of sessions.--Section 1862(a)(1) 
        of the Social Security Act (42 U.S.C. 1395y(a)(1)) is amended--
                (i) in subparagraph (M), by striking ``and'' at the 
            end;
                (ii) in subparagraph (N), by striking the semicolon at 
            the end and inserting ``, and''; and
                (iii) by adding at the end the following new 
            subparagraph:
        ``(O) in the case of kidney disease education services (as 
    defined in paragraph (1) of section 1861(ggg)), which are furnished 
    in excess of the number of sessions covered under paragraph (4) of 
    such section;''.
        (2) Effective date.--The amendments made by this subsection 
    shall apply to services furnished on or after January 1, 2010.
    SEC. 153. RENAL DIALYSIS PROVISIONS.
    (a) Composite Rate.--
        (1) Update.--Section 1881(b)(12)(G) of the Social Security Act 
    (42 U.S.C. 1395rr(b)(12)(G)) is amended--
            (A) in clause (i), by striking ``and'' at the end;
            (B) in clause (ii)--
                (i) by inserting ``and before January 1, 2009,'' after 
            ``April 1, 2007,''; and
                (ii) by striking the period at the end and inserting a 
            semicolon; and
            (C) by adding at the end the following new clauses:
        ``(iii) furnished on or after January 1, 2009, and before 
    January 1, 2010, by 1.0 percent above the amount of such composite 
    rate component for such services furnished on December 31, 2008; 
    and
        ``(iv) furnished on or after January 1, 2010, by 1.0 percent 
    above the amount of such composite rate component for such services 
    furnished on December 31, 2009.''.
        (2) Site neutral composite rate.--Section 1881(b)(12)(A) of the 
    Social Security Act (42 U.S.C. 1395rr(b)(12)(A)) is amended by 
    adding at the end the following new sentence: ``Under such system, 
    the payment rate for dialysis services furnished on or after 
    January 1, 2009, by providers of services shall be the same as the 
    payment rate (computed without regard to this sentence) for such 
    services furnished by renal dialysis facilities, and in applying 
    the geographic index under subparagraph (D) to providers of 
    services, the labor share shall be based on the labor share 
    otherwise applied for renal dialysis facilities.''.
    (b) Development of ESRD Bundled Payment System.--
        (1) In general.--Section 1881(b) of the Social Security Act (42 
    U.S.C. 1395rr(b)) is amended by adding at the end the following new 
    paragraph:
    ``(14)(A)(i) Subject to subparagraph (E), for services furnished on 
or after January 1, 2011, the Secretary shall implement a payment 
system under which a single payment is made under this title to a 
provider of services or a renal dialysis facility for renal dialysis 
services (as defined in subparagraph (B)) in lieu of any other payment 
(including a payment adjustment under paragraph (12)(B)(ii)) and for 
such services and items furnished pursuant to paragraph (4).
    ``(ii) In implementing the system under this paragraph the 
Secretary shall ensure that the estimated total amount of payments 
under this title for 2011 for renal dialysis services shall equal 98 
percent of the estimated total amount of payments for renal dialysis 
services, including payments under paragraph (12)(B)(ii), that would 
have been made under this title with respect to services furnished in 
2011 if such system had not been implemented. In making the estimation 
under subclause (I), the Secretary shall use per patient utilization 
data from 2007, 2008, or 2009, whichever has the lowest per patient 
utilization.
    ``(B) For purposes of this paragraph, the term `renal dialysis 
services' includes--
        ``(i) items and services included in the composite rate for 
    renal dialysis services as of December 31, 2010;
        ``(ii) erythropoiesis stimulating agents and any oral form of 
    such agents that are furnished to individuals for the treatment of 
    end stage renal disease;
        ``(iii) other drugs and biologicals that are furnished to 
    individuals for the treatment of end stage renal disease and for 
    which payment was (before the application of this paragraph) made 
    separately under this title, and any oral equivalent form of such 
    drug or biological; and
        ``(iv) diagnostic laboratory tests and other items and services 
    not described in clause (i) that are furnished to individuals for 
    the treatment of end stage renal disease.
Such term does not include vaccines.
    ``(C) The system under this paragraph may provide for payment on 
the basis of services furnished during a week or month or such other 
appropriate unit of payment as the Secretary specifies.
    ``(D) Such system--
        ``(i) shall include a payment adjustment based on case mix that 
    may take into account patient weight, body mass index, 
    comorbidities, length of time on dialysis, age, race, ethnicity, 
    and other appropriate factors;
        ``(ii) shall include a payment adjustment for high cost 
    outliers due to unusual variations in the type or amount of 
    medically necessary care, including variations in the amount of 
    erythropoiesis stimulating agents necessary for anemia management;
        ``(iii) shall include a payment adjustment that reflects the 
    extent to which costs incurred by low-volume facilities (as defined 
    by the Secretary) in furnishing renal dialysis services exceed the 
    costs incurred by other facilities in furnishing such services, and 
    for payment for renal dialysis services furnished on or after 
    January 1, 2011, and before January 1, 2014, such payment 
    adjustment shall not be less than 10 percent; and
        ``(iv) may include such other payment adjustments as the 
    Secretary determines appropriate, such as a payment adjustment--
            ``(I) for pediatric providers of services and renal 
        dialysis facilities;
            ``(II) by a geographic index, such as the index referred to 
        in paragraph (12)(D), as the Secretary determines to be 
        appropriate; and
            ``(III) for providers of services or renal dialysis 
        facilities located in rural areas.
The Secretary shall take into consideration the unique treatment needs 
of children and young adults in establishing such system.
    ``(E)(i) The Secretary shall provide for a four-year phase-in (in 
equal increments) of the payment amount under the payment system under 
this paragraph, with such payment amount being fully implemented for 
renal dialysis services furnished on or after January 1, 2014.
    ``(ii) A provider of services or renal dialysis facility may make a 
one-time election to be excluded from the phase-in under clause (i) and 
be paid entirely based on the payment amount under the payment system 
under this paragraph. Such an election shall be made prior to January 
1, 2011, in a form and manner specified by the Secretary, and is final 
and may not be rescinded.
    ``(iii) The Secretary shall make an adjustment to the payments 
under this paragraph for years during which the phase-in under clause 
(i) is applicable so that the estimated total amount of payments under 
this paragraph, including payments under this subparagraph, shall equal 
the estimated total amount of payments that would otherwise occur under 
this paragraph without such phase-in.
    ``(F)(i) Subject to clause (ii), beginning in 2012, the Secretary 
shall annually increase payment amounts established under this 
paragraph by an ESRD market basket percentage increase factor for a 
bundled payment system for renal dialysis services that reflects 
changes over time in the prices of an appropriate mix of goods and 
services included in renal dialysis services minus 1.0 percentage 
point.
    ``(ii) For years during which a phase-in of the payment system 
pursuant to subparagraph (E) is applicable, the following rules shall 
apply to the portion of the payment under the system that is based on 
the payment of the composite rate that would otherwise apply if the 
system under this paragraph had not been enacted:
        ``(I) The update under clause (i) shall not apply.
        ``(II) The Secretary shall annually increase such composite 
    rate by the ESRD market basket percentage increase factor described 
    in clause (i) minus 1.0 percentage point.
    ``(G) There shall be no administrative or judicial review under 
section 1869, section 1878, or otherwise of the determination of 
payment amounts under subparagraph (A), the establishment of an 
appropriate unit of payment under subparagraph (C), the identification 
of renal dialysis services included in the bundled payment, the 
adjustments under subparagraph (D), the application of the phase-in 
under subparagraph (E), and the establishment of the market basket 
percentage increase factors under subparagraph (F).
    ``(H) Erythropoiesis stimulating agents and other drugs and 
biologicals shall be treated as prescribed and dispensed or 
administered and available only under part B if they are--
        ``(i) furnished to an individual for the treatment of end stage 
    renal disease; and
        ``(ii) included in subparagraph (B) for purposes of payment 
    under this paragraph.''.
        (2) Prohibition of unbundling.--Section 1862(a) of the Social 
    Security Act (42 U.S.C. 1395y(a)), as amended by section 135(a)(2), 
    is amended--
            (A) in paragraph (22), by striking ``or'' at the end;
            (B) in paragraph (23), by striking the period at the end 
        and inserting ``; or''; and
            (C) by inserting after paragraph (23) the following new 
        paragraph:
        ``(24) where such expenses are for renal dialysis services (as 
    defined in subparagraph (B) of section 1881(b)(14)) for which 
    payment is made under such section unless such payment is made 
    under such section to a provider of services or a renal dialysis 
    facility for such services.''.
        (3) Conforming amendments.--(A) Section 1881(b) of the Social 
    Security Act (42 U.S.C. 1395rr(b)) is amended--
            (i) in paragraph (12)(A), by striking ``In lieu of 
        payment'' and inserting ``Subject to paragraph (14), in lieu of 
        payment'';
            (ii) in the second sentence of paragraph (12)(F)--
                (I) by inserting ``or paragraph (14)'' after ``this 
            paragraph''; and
                (II) by inserting ``or under the system under paragraph 
            (14)'' after ``subparagraph (B)''; and
            (iii) in paragraph (13)--
                (I) in subparagraph (A), in the matter preceding clause 
            (i), by striking ``The payment amounts'' and inserting 
            ``Subject to paragraph (14), the payment amounts''; and
                (II) in subparagraph (B)--

                    (aa) in clause (i), by striking ``(i)'' after 
                ``(B)'' and by inserting ``, subject to paragraph 
                (14)'' before the period at the end; and
                    (bb) by striking clause (ii).

        (B) Section 1861(s)(2)(F) of the Social Security Act (42 U.S.C. 
    1395x(s)(2)(F)) is amended by inserting ``, and, for items and 
    services furnished on or after January 1, 2011, renal dialysis 
    services (as defined in section 1881(b)(14)(B))'' before the 
    semicolon at the end.
        (C) Section 623(e) of the Medicare Prescription Drug, 
    Improvement, and Modernization Act of 2003 (42 U.S.C. 1395rr note) 
    is repealed.
        (4) Rule of construction.--Nothing in this subsection or the 
    amendments made by this subsection shall be construed as 
    authorizing or requiring the Secretary of Health and Human Services 
    to make payments under the payment system implemented under 
    paragraph (14)(A)(i) of section 1881(b) of the Social Security Act 
    (42 U.S.C. 1395rr(b)), as added by paragraph (1), for any 
    unrecovered amount for any bad debt attributable to deductible and 
    coinsurance on items and services not included in the basic case-
    mix adjusted composite rate under paragraph (12) of such section as 
    in effect before the date of the enactment of this Act.
    (c) Quality Incentives in the End-Stage Renal Disease Program.--
Section 1881 of the Social Security Act (42 U.S.C. 1395rr) is amended 
by adding at the end the following new subsection:
    ``(h) Quality Incentives in the End-Stage Renal Disease Program.--
        ``(1) Quality incentives.--
            ``(A) In general.--With respect to renal dialysis services 
        (as defined in subsection (b)(14)(B)) furnished on or after 
        January 1, 2012, in the case of a provider of services or a 
        renal dialysis facility that does not meet the requirement 
        described in subparagraph (B) with respect to the year, 
        payments otherwise made to such provider or facility under the 
        system under subsection (b)(14) for such services shall be 
        reduced by up to 2.0 percent, as determined appropriate by the 
        Secretary.
            ``(B) Requirement.--The requirement described in this 
        subparagraph is that the provider or facility meets (or 
        exceeds) the total performance score under paragraph (3) with 
        respect to performance standards established by the Secretary 
        with respect to measures specified in paragraph (2).
            ``(C) No effect in subsequent years.--The reduction under 
        subparagraph (A) shall apply only with respect to the year 
        involved, and the Secretary shall not take into account such 
        reduction in computing the single payment amount under the 
        system under paragraph (14) in a subsequent year.
        ``(2) Measures.--
            ``(A) In general.--The measures specified under this 
        paragraph with respect to the year involved shall include--
                ``(i) measures on anemia management that reflect the 
            labeling approved by the Food and Drug Administration for 
            such management and measures on dialysis adequacy;
                ``(ii) to the extent feasible, such measure (or 
            measures) of patient satisfaction as the Secretary shall 
            specify; and
                ``(iii) such other measures as the Secretary specifies, 
            including, to the extent feasible, measures on--

                    ``(I) iron management;
                    ``(II) bone mineral metabolism; and
                    ``(III) vascular access, including for maximizing 
                the placement of arterial venous fistula.

            ``(B) Use of endorsed measures.--
                ``(i) In general.--Subject to clause (ii), any measure 
            specified by the Secretary under subparagraph (A)(iii) must 
            have been endorsed by the entity with a contract under 
            section 1890(a).
                ``(ii) Exception.--In the case of a specified area or 
            medical topic determined appropriate by the Secretary for 
            which a feasible and practical measure has not been 
            endorsed by the entity with a contract under section 
            1890(a), the Secretary may specify a measure that is not so 
            endorsed as long as due consideration is given to measures 
            that have been endorsed or adopted by a consensus 
            organization identified by the Secretary.
            ``(C) Updating measures.--The Secretary shall establish a 
        process for updating the measures specified under subparagraph 
        (A) in consultation with interested parties.
            ``(D) Consideration.--In specifying measures under 
        subparagraph (A), the Secretary shall consider the availability 
        of measures that address the unique treatment needs of children 
        and young adults with kidney failure.
        ``(3) Performance scores.--
            ``(A) Total performance score.--
                ``(i) In general.--Subject to clause (ii), the 
            Secretary shall develop a methodology for assessing the 
            total performance of each provider of services and renal 
            dialysis facility based on performance standards with 
            respect to the measures selected under paragraph (2) for a 
            performance period established under paragraph (4)(D) (in 
            this subsection referred to as the `total performance 
            score').
                ``(ii) Application.--For providers of services and 
            renal dialysis facilities that do not meet (or exceed) the 
            total performance score established by the Secretary, the 
            Secretary shall ensure that the application of the 
            methodology developed under clause (i) results in an 
            appropriate distribution of reductions in payment under 
            paragraph (1) among providers and facilities achieving 
            different levels of total performance scores, with 
            providers and facilities achieving the lowest total 
            performance scores receiving the largest reduction in 
            payment under paragraph (1)(A).
                ``(iii) Weighting of measures.--In calculating the 
            total performance score, the Secretary shall weight the 
            scores with respect to individual measures calculated under 
            subparagraph (B) to reflect priorities for quality 
            improvement, such as weighting scores to ensure that 
            providers of services and renal dialysis facilities have 
            strong incentives to meet or exceed anemia management and 
            dialysis adequacy performance standards, as determined 
            appropriate by the Secretary.
            ``(B) Performance score with respect to individual 
        measures.--The Secretary shall also calculate separate 
        performance scores for each measure, including for dialysis 
        adequacy and anemia management.
        ``(4) Performance standards.--
            ``(A) Establishment.--Subject to subparagraph (E), the 
        Secretary shall establish performance standards with respect to 
        measures selected under paragraph (2) for a performance period 
        with respect to a year (as established under subparagraph (D)).
            ``(B) Achievement and improvement.--The performance 
        standards established under subparagraph (A) shall include 
        levels of achievement and improvement, as determined 
        appropriate by the Secretary.
            ``(C) Timing.--The Secretary shall establish the 
        performance standards under subparagraph (A) prior to the 
        beginning of the performance period for the year involved.
            ``(D) Performance period.--The Secretary shall establish 
        the performance period with respect to a year. Such performance 
        period shall occur prior to the beginning of such year.
            ``(E) Special rule.--The Secretary shall initially use as 
        the performance standard for the measures specified under 
        paragraph (2)(A)(i) for a provider of services or a renal 
        dialysis facility the lesser of--
                ``(i) the performance of such provider or facility for 
            such measures in the year selected by the Secretary under 
            the second sentence of subsection (b)(14)(A)(ii); or
                ``(ii) a performance standard based on the national 
            performance rates for such measures in a period determined 
            by the Secretary.
        ``(5) Limitation on review.--There shall be no administrative 
    or judicial review under section 1869, section 1878, or otherwise 
    of the following:
            ``(A) The determination of the amount of the payment 
        reduction under paragraph (1).
            ``(B) The establishment of the performance standards and 
        the performance period under paragraph (4).
            ``(C) The specification of measures under paragraph (2).
            ``(D) The methodology developed under paragraph (3) that is 
        used to calculate total performance scores and performance 
        scores for individual measures.
        ``(6) Public reporting.--
            ``(A) In general.--The Secretary shall establish procedures 
        for making information regarding performance under this 
        subsection available to the public, including--
                ``(i) the total performance score achieved by the 
            provider of services or renal dialysis facility under 
            paragraph (3) and appropriate comparisons of providers of 
            services and renal dialysis facilities to the national 
            average with respect to such scores; and
                ``(ii) the performance score achieved by the provider 
            or facility with respect to individual measures.
            ``(B) Opportunity to review.--The procedures established 
        under subparagraph (A) shall ensure that a provider of services 
        and a renal dialysis facility has the opportunity to review the 
        information that is to be made public with respect to the 
        provider or facility prior to such data being made public.
            ``(C) Certificates.--
                ``(i) In general.--The Secretary shall provide 
            certificates to providers of services and renal dialysis 
            facilities who furnish renal dialysis services under this 
            section to display in patient areas. The certificate shall 
            indicate the total performance score achieved by the 
            provider or facility under paragraph (3).
                ``(ii) Display.--Each facility or provider receiving a 
            certificate under clause (i) shall prominently display the 
            certificate at the provider or facility.
            ``(D) Web-based list.--The Secretary shall establish a list 
        of providers of services and renal dialysis facilities who 
        furnish renal dialysis services under this section that 
        indicates the total performance score and the performance score 
        for individual measures achieved by the provider and facility 
        under paragraph (3). Such information shall be posted on the 
        Internet website of the Centers for Medicare & Medicaid 
        Services in an easily understandable format.''.
    (d) GAO Report on ESRD Bundling System and Quality Initiative.--Not 
later than March 1, 2013, the Comptroller General of the United States 
shall submit to Congress a report on the implementation of the payment 
system under subsection (b)(14) of section 1881 of the Social Security 
Act (as added by subsection (b)) for renal dialysis services and 
related services (defined in subparagraph (B) of such subsection 
(b)(14)) and the quality initiative under subsection (h) of such 
section 1881 (as added by subsection (b)). Such report shall include 
the following information:
        (1) The changes in utilization rates for erythropoiesis 
    stimulating agents.
        (2) The mode of administering such agents, including 
    information on the proportion of individuals receiving such agents 
    intravenously as compared to subcutaneously.
        (3) An analysis of the payment adjustment under subparagraph 
    (D)(iii) of such subsection (b)(14), including an examination of 
    the extent to which costs incurred by rural, low-volume providers 
    and facilities (as defined by the Secretary) in furnishing renal 
    dialysis services exceed the costs incurred by other providers and 
    facilities in furnishing such services, and a recommendation 
    regarding the appropriateness of such adjustment.
        (4) The changes, if any, in utilization rates of drugs and 
    biologicals that the Secretary identifies under subparagraph 
    (B)(iii) of such subsection (b)(14), and any oral equivalent or 
    oral substitutable forms of such drugs and biologicals or of drugs 
    and biologicals described in clause (ii), that have occurred after 
    implementation of the payment system under such subsection (b)(14).
        (5) Any other information or recommendations for legislative 
    and administrative actions determined appropriate by the 
    Comptroller General.
    SEC. 154. DELAY IN AND REFORM OF MEDICARE DMEPOS COMPETITIVE 
      ACQUISITION PROGRAM.
    (a) Temporary Delay and Reform.--
        (1) In general.--Section 1847(a)(1) of the Social Security Act 
    (42 U.S.C. 1395w-3(a)(1)) is amended--
            (A) in paragraph (1)--
                (i) in subparagraph (B)(i), in the matter before 
            subclause (I), by inserting ``consistent with subparagraph 
            (D)'' after ``in a manner'';
                (ii) in subparagraph (B)(i)(II), by striking ``80'' and 
            ``in 2009'' and inserting ``an additional 70'' and ``in 
            2011'', respectively;
                (iii) in subparagraph (B)(i)(III), by striking ``after 
            2009'' and inserting ``after 2011 (or, in the case of 
            national mail order for items and services, after 2010)''; 
            and
                (iv) by adding at the end the following new 
            subparagraphs:
            ``(D) Changes in competitive acquisition programs.--
                ``(i) Round 1 of competitive acquisition program.--
            Notwithstanding subparagraph (B)(i)(I) and in implementing 
            the first round of the competitive acquisition programs 
            under this section--

                    ``(I) the contracts awarded under this section 
                before the date of the enactment of this subparagraph 
                are terminated, no payment shall be made under this 
                title on or after the date of the enactment of this 
                subparagraph based on such a contract, and, to the 
                extent that any damages may be applicable as a result 
                of the termination of such contracts, such damages 
                shall be payable from the Federal Supplementary Medical 
                Insurance Trust Fund under section 1841;
                    ``(II) the Secretary shall conduct the competition 
                for such round in a manner so that it occurs in 2009 
                with respect to the same items and services and the 
                same areas, except as provided in subclauses (III) and 
                (IV);
                    ``(III) the Secretary shall exclude Puerto Rico so 
                that such round of competition covers 9, instead of 10, 
                of the largest metropolitan statistical areas; and
                    ``(IV) there shall be excluded negative pressure 
                wound therapy items and services.

            Nothing in subclause (I) shall be construed to provide an 
            independent cause of action or right to administrative or 
            judicial review with regard to the termination provided 
            under such subclause.
                ``(ii) Round 2 of competitive acquisition program.--In 
            implementing the second round of the competitive 
            acquisition programs under this section described in 
            subparagraph (B)(i)(II)--

                    ``(I) the metropolitan statistical areas to be 
                included shall be those metropolitan statistical areas 
                selected by the Secretary for such round as of June 1, 
                2008; and
                    ``(II) the Secretary may subdivide metropolitan 
                statistical areas with populations (based upon the most 
                recent data from the Census Bureau) of at least 
                8,000,000 into separate areas for competitive 
                acquisition purposes.

                ``(iii) Exclusion of certain areas in subsequent rounds 
            of competitive acquisition programs.--In implementing 
            subsequent rounds of the competitive acquisition programs 
            under this section, including under subparagraph 
            (B)(i)(III), for competitions occurring before 2015, the 
            Secretary shall exempt from the competitive acquisition 
            program (other than national mail order) the following:

                    ``(I) Rural areas.
                    ``(II) Metropolitan statistical areas not selected 
                under round 1 or round 2 with a population of less than 
                250,000.
                    ``(III) Areas with a low population density within 
                a metropolitan statistical area that is otherwise 
                selected, as determined for purposes of paragraph 
                (3)(A).

            ``(E) Verification by oig.--The Inspector General of the 
        Department of Health and Human Services shall, through post-
        award audit, survey, or otherwise, assess the process used by 
        the Centers for Medicare & Medicaid Services to conduct 
        competitive bidding and subsequent pricing determinations under 
        this section that are the basis for pivotal bid amounts and 
        single payment amounts for items and services in competitive 
        bidding areas under rounds 1 and 2 of the competitive 
        acquisition programs under this section and may continue to 
        verify such calculations for subsequent rounds of such 
        programs.
            ``(F) Supplier feedback on missing financial 
        documentation.--
                ``(i) In general.--In the case of a bid where one or 
            more covered documents in connection with such bid have 
            been submitted not later than the covered document review 
            date specified in clause (ii), the Secretary--

                    ``(I) shall provide, by not later than 45 days (in 
                the case of the first round of the competitive 
                acquisition programs as described in subparagraph 
                (B)(i)(I)) or 90 days (in the case of a subsequent 
                round of such programs) after the covered document 
                review date, for notice to the bidder of all such 
                documents that are missing as of the covered document 
                review date; and
                    ``(II) may not reject the bid on the basis that any 
                covered document is missing or has not been submitted 
                on a timely basis, if all such missing documents 
                identified in the notice provided to the bidder under 
                subclause (I) are submitted to the Secretary not later 
                than 10 business days after the date of such notice.

                ``(ii) Covered document review date.--The covered 
            document review date specified in this clause with respect 
            to a competitive acquisition program is the later of--

                    ``(I) the date that is 30 days before the final 
                date specified by the Secretary for submission of bids 
                under such program; or
                    ``(II) the date that is 30 days after the first 
                date specified by the Secretary for submission of bids 
                under such program.

                ``(iii) Limitations of process.--The process provided 
            under this subparagraph--

                    ``(I) applies only to the timely submission of 
                covered documents;
                    ``(II) does not apply to any determination as to 
                the accuracy or completeness of covered documents 
                submitted or whether such documents meet applicable 
                requirements;
                    ``(III) shall not prevent the Secretary from 
                rejecting a bid based on any basis not described in 
                clause (i)(II); and
                    ``(IV) shall not be construed as permitting a 
                bidder to change bidding amounts or to make other 
                changes in a bid submission.

                ``(iv) Covered document defined.--In this subparagraph, 
            the term `covered document' means a financial, tax, or 
            other document required to be submitted by a bidder as part 
            of an original bid submission under a competitive 
            acquisition program in order to meet required financial 
            standards. Such term does not include other documents, such 
            as the bid itself or accreditation documentation.''; and
            (B) in paragraph (2)(A), by inserting before the period at 
        the end the following: ``and excluding certain complex 
        rehabilitative power wheelchairs recognized by the Secretary as 
        classified within group 3 or higher (and related accessories 
        when furnished in connection with such wheelchairs)''.
        (2) Budget neutral offset.--
            (A) In general.--Section 1834(a)(14) of such Act (42 U.S.C. 
        1395m(a)(14)) is amended--
                (i) by striking ``and'' at the end of subparagraphs (H) 
            and (I);
                (ii) by redesignating subparagraph (J) as subparagraph 
            (M); and
                (iii) by inserting after subparagraph (I) the following 
            new subparagraphs:
            ``(J) for 2009--
                ``(i) in the case of items and services furnished in 
            any geographic area, if such items or services were 
            selected for competitive acquisition in any area under the 
            competitive acquisition program under section 
            1847(a)(1)(B)(i)(I) before July 1, 2008, including related 
            accessories but only if furnished with such items and 
            services selected for such competition and diabetic 
            supplies but only if furnished through mail order, - 9.5 
            percent; or
                ``(ii) in the case of other items and services, the 
            percentage increase in the consumer price index for all 
            urban consumers (U.S. urban average) for the 12-month 
            period ending with June 2008;
            ``(K) for 2010, 2011, 2012, and 2013, the percentage 
        increase in the consumer price index for all urban consumers 
        (U.S. urban average) for the 12-month period ending with June 
        of the previous year;
            ``(L) for 2014--
                ``(i) in the case of items and services described in 
            subparagraph (J)(i) for which a payment adjustment has not 
            been made under subsection (a)(1)(F)(ii) in any previous 
            year, the percentage increase in the consumer price index 
            for all urban consumers (U.S. urban average) for the 12-
            month period ending with June 2013, plus 2.0 percentage 
            points; or
                ``(ii) in the case of other items and services, the 
            percentage increase in the consumer price index for all 
            urban consumers (U.S. urban average) for the 12-month 
            period ending with June 2013; and''.
            (B) Conforming treatment for certain items and services.--
        The second sentence of section 1842(s)(1) of such Act (42 
        U.S.C. 1395u(s)(1)) is amended by striking ``except that'' and 
        all that follows and inserting the following: ``except that for 
        items and services described in paragraph (2)(D)--
        ``(A) for 2009 section 1834(a)(14)(J)(i) shall apply under this 
    paragraph instead of the percentage increase otherwise applicable; 
    and
        ``(B) for 2014, if subparagraph (A) is applied to the items and 
    services and there has not been a payment adjustment under 
    paragraph (3)(B) for the items and services for any previous year, 
    the percentage increase computed under section 1834(a)(14)(L)(i) 
    shall apply instead of the percentage increase otherwise 
    applicable.''.
        (3) Conforming delay.--Subsections (a)(1)(F) and (h)(1)(H) of 
    section 1834 of the Social Security Act (42 U.S.C. 1395m) are each 
    amended by striking ``January 1, 2009'' and inserting ``January 1, 
    2011''.
        (4) Considerations in application.--Section 1834 of such Act 
    (42 U.S.C. 1395m) is amended--
            (A) in subsection (a)(1)--
                (i) in subparagraph (F), by inserting ``subject to 
            subparagraph (G),'' before ``that are included''; and
                (ii) by adding at the end the following new 
            subparagraph:
            ``(G) Use of information on competitive bid rates.--The 
        Secretary shall specify by regulation the methodology to be 
        used in applying the provisions of subparagraph (F)(ii) and 
        subsection (h)(1)(H)(ii). In promulgating such regulation, the 
        Secretary shall consider the costs of items and services in 
        areas in which such provisions would be applied compared to the 
        payment rates for such items and services in competitive 
        acquisition areas.''; and
            (B) in subsection (h)(1)(H), by inserting ``subject to 
        subsection (a)(1)(G),'' before ``that are included''.
    (b) Quality Standards.--
        (1) Application of accreditation requirement.--
            (A) In general.--Section 1834(a)(20) of the Social Security 
        Act (42 U.S.C. 1395m(a)(20)) is amended--
                (i) in subparagraph (E), by inserting ``including 
            subparagraph (F),'' after ``under this paragraph,''; and
                (ii) by adding at the end the following new 
            subparagraph:
            ``(F) Application of accreditation requirement.--In 
        implementing quality standards under this paragraph--
                ``(i) subject to clause (ii), the Secretary shall 
            require suppliers furnishing items and services described 
            in subparagraph (D) on or after October 1, 2009, directly 
            or as a subcontractor for another entity, to have submitted 
            to the Secretary evidence of accreditation by an 
            accreditation organization designated under subparagraph 
            (B) as meeting applicable quality standards; and
                ``(ii) in applying such standards and the accreditation 
            requirement of clause (i) with respect to eligible 
            professionals (as defined in section 1848(k)(3)(B)), and 
            including such other persons, such as orthotists and 
            prosthetists, as specified by the Secretary, furnishing 
            such items and services--

                    ``(I) such standards and accreditation requirement 
                shall not apply to such professionals and persons 
                unless the Secretary determines that the standards 
                being applied are designed specifically to be applied 
                to such professionals and persons; and
                    ``(II) the Secretary may exempt such professionals 
                and persons from such standards and requirement if the 
                Secretary determines that licensing, accreditation, or 
                other mandatory quality requirements apply to such 
                professionals and persons with respect to the 
                furnishing of such items and services.''.

            (B) Construction.--Section 1834(a)(20)(F)(ii) of the Social 
        Security Act, as added by subparagraph (A), shall not be 
        construed as preventing the Secretary of Health and Human 
        Services from implementing the first round of competition under 
        section 1847 of such Act on a timely basis.
        (2) Disclosure of subcontractors under competitive acquisition 
    program.--Section 1847(b)(3) of such Act (42 U.S.C. 1395w-3(b)(3)) 
    is amended by adding at the end the following new subparagraph:
            ``(C) Disclosure of subcontractors.--
                ``(i) Initial disclosure.--Not later than 10 days after 
            the date a supplier enters into a contract with the 
            Secretary under this section, such supplier shall disclose 
            to the Secretary, in a form and manner specified by the 
            Secretary, the information on--

                    ``(I) each subcontracting relationship that such 
                supplier has in furnishing items and services under the 
                contract; and
                    ``(II) whether each such subcontractor meets the 
                requirement of section 1834(a)(20)(F)(i), if applicable 
                to such subcontractor.

                ``(ii) Subsequent disclosure.--Not later than 10 days 
            after such a supplier subsequently enters into a 
            subcontracting relationship described in clause (i)(II), 
            such supplier shall disclose to the Secretary, in such form 
            and manner, the information described in subclauses (I) and 
            (II) of clause (i).''.
        (3) Competitive acquisition ombudsman.--Such section is further 
    amended by adding at the end the following new subsection:
    ``(f) Competitive Acquisition Ombudsman.--The Secretary shall 
provide for a competitive acquisition ombudsman within the Centers for 
Medicare & Medicaid Services in order to respond to complaints and 
inquiries made by suppliers and individuals relating to the application 
of the competitive acquisition program under this section. The 
ombudsman may be within the office of the Medicare Beneficiary 
Ombudsman appointed under section 1808(c). The ombudsman shall submit 
to Congress an annual report on the activities under this subsection, 
which report shall be coordinated with the report provided under 
section 1808(c)(2)(C).''.
    (c) Change in Reports and Deadlines.--
        (1) GAO report.--Section 302(b)(3) of the Medicare Prescription 
    Drug, Improvement, and Modernization Act of 2003 (Public Law 108-
    173) is amended--
            (A) in subparagraph (A)--
                (i) by inserting ``and as amended by section 2 of the 
            Medicare DMEPOS Competitive Acquisition Reform Act of 
            2008'' after ``as amended by paragraph (1)''; and
                (ii) by inserting before the period at the end the 
            following: ``and the topics specified in subparagraph 
            (C)'';
            (B) in subparagraph (B), by striking ``Not later than 
        January 1, 2009,'' and inserting ``Not later than 1 year after 
        the first date that payments are made under section 1847 of the 
        Social Security Act,''; and
            (C) by adding at the end the following new subparagraph:
            ``(C) Topics.--The topics specified in this subparagraph, 
        for the study under subparagraph (A) concerning the competitive 
        acquisition program, are the following:
                ``(i) Beneficiary access to items and services under 
            the program, including the impact on such access of 
            awarding contracts to bidders that--

                    ``(I) did not have a physical presence in an area 
                where they received a contract; or
                    ``(II) had no previous experience providing the 
                product category they were contracted to provide.

                ``(ii) Beneficiary satisfaction with the program and 
            cost savings to beneficiaries under the program.
                ``(iii) Costs to suppliers of participating in the 
            program and recommendations about ways to reduce those 
            costs without compromising quality standards or savings to 
            the Medicare program.
                ``(iv) Impact of the program on small business 
            suppliers.
                ``(v) Analysis of the impact on utilization of 
            different items and services paid within the same 
            Healthcare Common Procedure Coding System (HCPCS) code.
                ``(vi) Costs to the Centers for Medicare & Medicaid 
            Services, including payments made to contractors, for 
            administering the program compared with administration of a 
            fee schedule, in comparison with the relative savings of 
            the program.
                ``(vii) Impact on access, Medicare spending, and 
            beneficiary spending of any difference in treatment for 
            diabetic testing supplies depending on how such supplies 
            are furnished.
                ``(viii) Such other topics as the Comptroller General 
            determines to be appropriate.''.
        (2) Delay in other deadlines.--
            (A) Program advisory and oversight committee.--Section 
        1847(c)(5) of the Social Security Act (42 U.S.C. 1395w-3(c)(5)) 
        is amended by striking ``December 31, 2009'' and inserting 
        ``December 31, 2011''.
            (B) Secretarial report.--Section 1847(d) of such Act (42 
        U.S.C. 1395w-3(d)) is amended by striking ``July 1, 2009'' and 
        inserting ``July 1, 2011''.
            (C) IG report.--Section 302(e) of the Medicare Prescription 
        Drug, Improvement, and Modernization Act of 2003 (Public Law 
        108-173) is amended by striking ``July 1, 2009'' and inserting 
        ``July 1, 2011''.
        (3) Evaluation of certain code.--The Secretary of Health and 
    Human Services shall evaluate the existing Health Care Common 
    Procedure Coding System (HCPCS) codes for negative pressure wound 
    therapy to ensure accurate reporting and billing for items and 
    services under such codes. In carrying out such evaluation, the 
    Secretary shall use an existing process, administered by the 
    Durable Medical Equipment Medicare Administrative Contractors, for 
    the consideration of coding changes and consider all relevant 
    studies and information furnished pursuant to such process.
    (d) Other Provisions.--
        (1) Exemption from competitive acquisition for certain off-the-
    shelf orthotics.--Section 1847(a) of the Social Security Act (42 
    U.S.C. 1395w-3(a)) is amended by adding at the end the following 
    new paragraph:
        ``(7) Exemption from competitive acquisition.--The programs 
    under this section shall not apply to the following:
            ``(A) Certain off-the-shelf orthotics.--Items and services 
        described in paragraph (2)(C) if furnished--
                ``(i) by a physician or other practitioner (as defined 
            by the Secretary) to the physician's or practitioner's own 
            patients as part of the physician's or practitioner's 
            professional service; or
                ``(ii) by a hospital to the hospital's own patients 
            during an admission or on the date of discharge.
            ``(B) Certain durable medical equipment.--Those items and 
        services described in paragraph (2)(A)--
                ``(i) that are furnished by a hospital to the 
            hospital's own patients during an admission or on the date 
            of discharge; and
                ``(ii) to which such programs would not apply, as 
            specified by the Secretary, if furnished by a physician to 
            the physician's own patients as part of the physician's 
            professional service.''.
        (2) Correction in face-to-face examination requirement.--
    Section 1834(a)(1)(E)(ii) of such Act (42 U.S.C. 
    1395m(a)(1)(E)(ii)) is amended by striking ``1861(r)(1)'' and 
    inserting ``1861(r)''.
        (3) Special rule in case of national mail-order competition for 
    diabetic testing strips.--Section 1847(b) of such Act (42 U.S.C. 
    1395w-3(b)) is amended--
            (A) by redesignating paragraph (10) as paragraph (11); and
            (B) by inserting after paragraph (9) the following new 
        paragraph:
        ``(10) Special rule in case of competition for diabetic testing 
    strips.--
            ``(A) In general.--With respect to the competitive 
        acquisition program for diabetic testing strips conducted after 
        the first round of the competitive acquisition programs, if an 
        entity does not demonstrate to the Secretary that its bid 
        covers types of diabetic testing strip products that, in the 
        aggregate and taking into account volume for the different 
        products, cover 50 percent (or such higher percentage as the 
        Secretary may specify) of all such types of products, the 
        Secretary shall reject such bid. The volume for such types of 
        products may be determined in accordance with such data (which 
        may be market based data) as the Secretary recognizes.
            ``(B) Study of types of testing strip products.--Before 
        2011, the Inspector General of the Department of Health and 
        Human Services shall conduct a study to determine the types of 
        diabetic testing strip products by volume that could be used to 
        make determinations pursuant to subparagraph (A) for the first 
        competition under the competitive acquisition program described 
        in such subparagraph and submit to the Secretary a report on 
        the results of the study. The Inspector General shall also 
        conduct such a study and submit such a report before the 
        Secretary conducts a subsequent competitive acquistion program 
        described in subparagraph (A).''.
        (4) Other conforming amendments.--Section 1847(b)(11) of such 
    Act, as redesignated by paragraph (3), is amended--
            (A) in subparagraph (C), by inserting ``and the 
        identification of areas under subsection (a)(1)(D)(iii)'' after 
        ``(a)(1)(A)'';
            (B) in subparagraph (D), by inserting ``and implementation 
        of subsection (a)(1)(D)'' after ``(a)(1)(B)'';
            (C) in subparagraph (E), by striking ``or'' at the end;
            (D) in subparagraph (F), by striking the period at the end 
        and inserting ``; or''; and
            (E) by adding at the end the following new subparagraph:
            ``(G) the implementation of the special rule described in 
        paragraph (10).''.
        (5) Funding for implementation.--In addition to funds otherwise 
    available, for purposes of implementing the provisions of, and 
    amendments made by, this section, other than the amendment made by 
    subsection (c)(1) and other than section 1847(a)(1)(E) of the 
    Social Security Act, the Secretary of Health and Human Services 
    shall provide for the transfer from the Federal Supplementary 
    Medical Insurance Trust Fund established under section 1841 of the 
    Social Security Act (42 U.S.C. 1395t) to the Centers for Medicare & 
    Medicaid Services Program Management Account of $20,000,000 for 
    fiscal year 2008, and $25,000,000 for each of fiscal years 2009 
    through 2012. Amounts transferred under this paragraph for a fiscal 
    year shall be available until expended.
    (e) Effective Date.--The amendments made by this section shall take 
effect as of June 30, 2008.

               Subtitle D--Provisions Relating to Part C

    SEC. 161. PHASE-OUT OF INDIRECT MEDICAL EDUCATION (IME).
    (a) In General.--Section 1853(k) of the Social Security Act (42 
U.S.C. 1395w-23(k)) is amended--
        (1) in paragraph (1), in the matter preceding subparagraph (A), 
    by striking ``paragraph (2)'' and inserting ``paragraphs (2) and 
    (4)''; and
        (2) by adding at the end the following new paragraph:
        ``(4) Phase-out of the indirect costs of medical education from 
    capitation rates.--
            ``(A) In general.--After determining the applicable amount 
        for an area for a year under paragraph (1) (beginning with 
        2010), the Secretary shall adjust such applicable amount to 
        exclude from such applicable amount the phase-in percentage (as 
        defined in subparagraph (B)(i)) for the year of the Secretary's 
        estimate of the standardized costs for payments under section 
        1886(d)(5)(B) in the area for the year. Any adjustment under 
        the preceding sentence shall be made prior to the application 
        of paragraph (2).
            ``(B) Percentages defined.--For purposes of this paragraph:
                ``(i) Phase-in percentage.--The term `phase-in 
            percentage' means, for an area for a year, the ratio 
            (expressed as a percentage, but in no case greater than 100 
            percent) of--

                    ``(I) the maximum cumulative adjustment percentage 
                for the year (as defined in clause (ii)); to
                    ``(II) the standardized IME cost percentage (as 
                defined in clause (iii)) for the area and year.

                ``(ii) Maximum cumulative adjustment percentage.--The 
            term `maximum cumulative adjustment percentage' means, 
            for--

                    ``(I) 2010, 0.60 percent; and
                    ``(II) a subsequent year, the maximum cumulative 
                adjustment percentage for the previous year increased 
                by 0.60 percentage points.

                ``(iii) Standardized ime cost percentage.--The term 
            `standardized IME cost percentage' means, for an area for a 
            year, the per capita costs for payments under section 
            1886(d)(5)(B) (expressed as a percentage of the fee-for-
            service amount specified in subparagraph (C)) for the area 
            and the year.
            ``(C) Fee-for-service amount.--The fee-for-service amount 
        specified in this subparagraph for an area for a year is the 
        amount specified under subsection (c)(1)(D) for the area and 
        the year.''.
    (b) Excluding Adjustment From the Update.--Section 1853(k)(1)(B)(i) 
of the Social Security Act (42 U.S.C. 1395w-23(k)(1)(B)(i)) is amended 
by striking ``paragraph (2)'' and inserting ``paragraphs (2) and (4)''.
    (c) Hold Harmless for PACE Program Payments.--Section 1894(d) of 
the Social Security Act (42 U.S.C. 1395eee(d)) is amended by adding at 
the end the following new paragraph:
        ``(3) Capitation rates determined without regard to the phase-
    out of the indirect costs of medical education from the annual 
    medicare advantage capitation rate.--Capitation amounts under this 
    subsection shall be determined without regard to the application of 
    section 1853(k)(4).''.
    SEC. 162. REVISIONS TO REQUIREMENTS FOR MEDICARE ADVANTAGE PRIVATE 
      FEE-FOR-SERVICE PLANS.
    (a) Requirements To Assure Access to Network Coverage.--
        (1) Individual market.--Section 1852(d) of the Social Security 
    Act (42 U.S.C. 1395w-22(d)) is amended--
            (A) in paragraph (4), in the second sentence, by striking 
        ``The Secretary'' and inserting ``Subject to paragraph (5), the 
        Secretary''; and
            (B) by adding at the end the following new paragraph:
        ``(5) Requirement of certain nonemployer medicare advantage 
    private fee-for-service plans to use contracts with providers.--
            ``(A) In general.--For plan year 2011 and subsequent plan 
        years, in the case of a Medicare Advantage private fee-for-
        service plan not described in paragraph (1) or (2) of section 
        1857(i) operating in a network area (as defined in subparagraph 
        (B)), the plan shall meet the access standards under paragraph 
        (4) in that area only through entering into written contracts 
        as provided for under subparagraph (B) of such paragraph and 
        not, in whole or in part, through the establishment of payment 
        rates meeting the requirements under subparagraph (A) of such 
        paragraph.
            ``(B) Network area defined.--For purposes of subparagraph 
        (A), the term `network area' means, for a plan year, an area 
        which the Secretary identifies (in the Secretary's announcement 
        of the proposed payment rates for the previous plan year under 
        section 1853(b)(1)(B)) as having at least 2 network-based plans 
        (as defined in subparagraph (C)) with enrollment under this 
        part as of the first day of the year in which such announcement 
        is made.
            ``(C) Network-based plan defined.--
                ``(i) In general.--For purposes of subparagraph (B), 
            the term `network-based plan' means--

                    ``(I) except as provided in clause (ii), a Medicare 
                Advantage plan that is a coordinated care plan 
                described in section 1851(a)(2)(A)(i);
                    ``(II) a network-based MSA plan; and
                    ``(III) a reasonable cost reimbursement plan under 
                section 1876.

                ``(ii) Exclusion of non-network regional ppos.--The 
            term `network-based plan' shall not include an MA regional 
            plan that, with respect to the area, meets access adequacy 
            standards under this part substantially through the 
            authority of section 422.112(a)(1)(ii) of title 42, Code of 
            Federal Regulations, rather than through written 
            contracts.''.
        (2) Employer plans.--Section 1852(d) of the Social Security Act 
    (42 U.S.C. 1395w-22(d)), as amended by paragraph (1), is amended--
            (A) in paragraph (4), in the second sentence, by striking 
        ``paragraph (5)'' and inserting ``paragraphs (5) and (6)''; and
            (B) by adding at the end the following new paragraph:
        ``(6) Requirement of all employer medicare advantage private 
    fee-for-service plans to use contracts with providers.--For plan 
    year 2011 and subsequent plan years, in the case of a Medicare 
    Advantage private fee-for-service plan that is described in 
    paragraph (1) or (2) of section 1857(i), the plan shall meet the 
    access standards under paragraph (4) only through entering into 
    written contracts as provided for under subparagraph (B) of such 
    paragraph and not, in whole or in part, through the establishment 
    of payment rates meeting the requirements under subparagraph (A) of 
    such paragraph.''.
        (3) Access requirements.--
            (A) In general.--Section 1852(d)(4)(B) of the Social 
        Security Act (42 U.S.C. 1395w-22(d)(4)(B)) is amended by 
        striking ``a sufficient number'' through ``terms of the plan'' 
        and inserting ``a sufficient number and range of providers 
        within such category to meet the access standards in 
        subparagraphs (A) through (E) of paragraph (1)''.
            (B) Effective date.--The amendment made by subparagraph (A) 
        shall apply to plan year 2010 and subsequent plan years.
    (b) Clarification Regarding Utilization.--Section 1859(b)(2) of the 
Social Security Act (42 U.S.C. 1395w-28(b)(2)) is amended by adding at 
the end the following flush sentence:
    ``Nothing in subparagraph (B) shall be construed to preclude a plan 
    from varying rates for such a provider based on the specialty of 
    the provider, the location of the provider, or other factors 
    related to such provider that are not related to utilization, or to 
    preclude a plan from increasing rates for such a provider based on 
    increased utilization of specified preventive or screening 
    services.''.
    SEC. 163. REVISIONS TO QUALITY IMPROVEMENT PROGRAMS.
    (a) Requirement for MA Private Fee-for-Service and MSA Plans To 
Have a Quality Improvement Program.--Section 1852(e)(1) of the Social 
Security Act (42 U.S.C. 1395w-22(e)(1)) is amended by striking ``(other 
than an MA private fee-for-service plan or an MSA plan)''.
    (b) Data Collection Requirements for MA Regional Plans, MA Private 
Fee-for-Service Plans, and MSA Plans.--Section 1852(e)(3)(A) of the 
Social Security Act (42 U.S.C. 1395w-22(e)(3)(A)) is amended--
        (1) in clause (i), by adding at the end the following new 
    sentence: ``With respect to MA private fee-for-service plans and 
    MSA plans, the requirements under the preceding sentence may not 
    exceed the requirements under this subparagraph with respect to MA 
    local plans that are preferred provider organization plans, except 
    that, for plan year 2010, the limitation under clause (iii) shall 
    not apply and such requirements shall apply only with respect to 
    administrative claims data.''
        (2) by striking clause (ii); and
        (3) in clause (iii)--
            (A) in the heading--
                (i) by inserting ``local'' after ``to''; and
                (ii) by inserting ``and ma regional plans'' after 
            ``organizations''; and
            (B) by inserting ``and to MA regional plans'' after 
        ``organization plans''.
    (c) Effective Date.--The amendments made by this section shall 
apply to plan years beginning on or after January 1, 2010.
    SEC. 164. REVISIONS RELATING TO SPECIALIZED MEDICARE ADVANTAGE 
      PLANS FOR SPECIAL NEEDS INDIVIDUALS.
    (a) Extension of Authority To Restrict Enrollment.--Section 1859(f) 
of the Social Security Act (42 U.S.C. 1395w-28(f)), as amended by 
section 108(a) of the Medicare, Medicaid, and SCHIP Extension Act of 
2007 (Public Law 110-173) is amended by striking ``2010'' and inserting 
``2011''.
    (b) Moratorium on Authority To Designate Other Plans as Specialized 
MA Plans.--During the period beginning on January 1, 2010, and ending 
on December 31, 2010, the Secretary of Health and Human Services may 
not exercise the authority provided under section 231(d) of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(42 U.S.C. 1395w-21 note) to designate other plans as specialized MA 
plans for special needs individuals.
    (c) Requirements for Enrollment.--
        (1) In general.--Section 1859 of the Social Security Act (42 
    U.S.C. 1395w-28) is amended--
            (A) in subsection (b)(6)(A), by inserting ``and that, as of 
        January 1, 2010, meets the applicable requirements of paragraph 
        (2), (3), or (4) of subsection (f), as the case may be'' before 
        the period at the end; and
            (B) in subsection (f)--
                (i) by amending the heading to read as follows: 
            ``Requirements Regarding Enrollment in Specialized MA Plans 
            for Special Needs Individuals'';
                (ii) by designating the sentence beginning ``In the 
            case of'' as paragraph (1) with the heading ``Requirements 
            for enrollment.--'' and with appropriate indentation; and
                (iii) by adding at the end the following new 
            paragraphs:
        ``(2) Additional requirements for institutional snps.--In the 
    case of a specialized MA plan for special needs individuals 
    described in subsection (b)(6)(B)(i), the applicable requirements 
    described in this paragraph are as follows:
            ``(A) Each individual that enrolls in the plan on or after 
        January 1, 2010, is a special needs individuals described in 
        subsection (b)(6)(B)(i). In the case of an individual who is 
        living in the community but requires an institutional level of 
        care, such individual shall not be considered a special needs 
        individual described in subsection (b)(6)(B)(i) unless the 
        determination that the individual requires an institutional 
        level of care was made--
                ``(i) using a State assessment tool of the State in 
            which the individual resides; and
                ``(ii) by an entity other than the organization 
            offering the plan.
            ``(B) The plan meets the requirements described in 
        paragraph (5).
        ``(3) Additional requirements for dual snps.--In the case of a 
    specialized MA plan for special needs individuals described in 
    subsection (b)(6)(B)(ii), the applicable requirements described in 
    this paragraph are as follows:
            ``(A) Each individual that enrolls in the plan on or after 
        January 1, 2010, is a special needs individuals described in 
        subsection (b)(6)(B)(ii).
            ``(B) The plan meets the requirements described in 
        paragraph (5).
            ``(C) The plan provides each prospective enrollee, prior to 
        enrollment, with a comprehensive written statement (using 
        standardized content and format established by the Secretary) 
        that describes--
                ``(i) the benefits and cost-sharing protections that 
            the individual is entitled to under the State Medicaid 
            program under title XIX; and
                ``(ii) which of such benefits and cost-sharing 
            protections are covered under the plan.
        Such statement shall be included with any description of 
        benefits offered by the plan.
            ``(D) The plan has a contract with the State Medicaid 
        agency to provide benefits, or arrange for benefits to be 
        provided, for which such individual is entitled to receive as 
        medical assistance under title XIX. Such benefits may include 
        long-term care services consistent with State policy.
        ``(4) Additional requirements for severe or disabling chronic 
    condition snps.--In the case of a specialized MA plan for special 
    needs individuals described in subsection (b)(6)(B)(iii), the 
    applicable requirements described in this paragraph are as follows:
            ``(A) Each individual that enrolls in the plan on or after 
        January 1, 2010, is a special needs individual described in 
        subsection (b)(6)(B)(iii).
            ``(B) The plan meets the requirements described in 
        paragraph (5).''.
        (2) Authority to operate but no service area expansion for dual 
    snps that do not meet certain requirements.--Notwithstanding 
    subsection (f) of section 1859 of the Social Security Act (42 
    U.S.C. 1395w-28), during the period beginning on January 1, 2010, 
    and ending on December 31, 2010, in the case of a specialized 
    Medicare Advantage plan for special needs individuals described in 
    subsection (b)(6)(B)(ii) of such section, as amended by this 
    section, that does not meet the requirement described in subsection 
    (f)(3)(D) of such section, the Secretary of Health and Human 
    Services--
            (A) shall permit such plan to be offered under part C of 
        title XVIII of such Act; and
            (B) shall not permit an expansion of the service area of 
        the plan under such part C.
        (3) Resources for state medicaid agencies.--The Secretary of 
    Health and Human Services shall provide for the designation of 
    appropriate staff and resources that can address State inquiries 
    with respect to the coordination of State and Federal policies for 
    specialized MA plans for special needs individuals described in 
    section 1859(b)(6)(B)(ii) of the Social Security Act (42 U.S.C. 
    1395w-28(b)(6)(B)(ii)), as amended by this section.
        (4) No requirement for contract.--Nothing in the provisions of, 
    or amendments made by, this subsection shall require a State to 
    enter into a contract with a Medicare Advantage organization with 
    respect to a specialized MA plan for special needs individuals 
    described in section 1859(b)(6)(B)(ii) of the Social Security Act 
    (42 U.S.C. 1395w-28(b)(6)(B)(ii)), as amended by this section.
    (d) Care Management Requirements for All SNPs.--
        (1) Requirements.--Section 1859(f) of the Social Security Act 
    (42 U.S.C. 1395w-28(f)), as amended by subsection (c)(1), is 
    amended by adding at the end the following new paragraph:
        ``(5) Care management requirements for all snps.--The 
    requirements described in this paragraph are that the organization 
    offering a specialized MA plan for special needs individuals 
    described in subsection (b)(6)(B)(i)--
            ``(A) have in place an evidenced-based model of care with 
        appropriate networks of providers and specialists; and
            ``(B) with respect to each individual enrolled in the 
        plan--
                ``(i) conduct an initial assessment and an annual 
            reassessment of the individual's physical, psychosocial, 
            and functional needs;
                ``(ii) develop a plan, in consultation with the 
            individual as feasible, that identifies goals and 
            objectives, including measurable outcomes as well as 
            specific services and benefits to be provided; and
                ``(iii) use an interdisciplinary team in the management 
            of care.''.
        (2) Review to ensure compliance with care management 
    requirements.--Section 1857(d) of the Social Security Act (42 
    U.S.C. 1395w-27(d)) is amended by adding at the end the following 
    new paragraph:
        ``(6) Review to ensure compliance with care management 
    requirements for specialized medicare advantage plans for special 
    needs individuals.--In conjunction with the periodic audit of a 
    specialized Medicare Advantage plan for special needs individuals 
    under paragraph (1), the Secretary shall conduct a review to ensure 
    that such organization offering the plan meets the requirements 
    described in section 1859(f)(5).''.
    (e) Clarification of the Definition of a Severe or Disabling 
Chronic Conditions Specialized Needs Individual.--
        (1) In general.--Section 1859(b)(6)(B)(iii) of the Social 
    Security Act (42 U.S.C. 1395w-28(b)(6)(B)(iii)) is amended by 
    inserting ``who have one or more comorbid and medically complex 
    chronic conditions that are substantially disabling or life 
    threatening, have a high risk of hospitalization or other 
    significant adverse health outcomes, and require specialized 
    delivery systems across domains of care'' before the period at the 
    end.
        (2) Panel.--The Secretary of Health and Human Services shall 
    convene a panel of clinical advisors to determine the conditions 
    that meet the definition of severe and disabling chronic conditions 
    under section 1859(b)(6)(B)(iii) of the Social Security Act (42 
    U.S.C. 1395w-28(b)(6)(B)(iii)), as amended by paragraph (1). The 
    panel shall include the Director of the Agency for Healthcare 
    Research and Quality (or the Director's designee).
    (f) Special Requirements Regarding Quality Reporting for 
Specialized MA Plans for Special Needs Individuals.--
        (1) In general.--Section 1852(e)(3)(A) of the Social Security 
    Act (42 U.S.C. 1395w-22(e)(3)(A)), as amended by section 163, is 
    amended by inserting after clause (i) the following new clause:
                ``(ii) Special requirements for specialized ma plans 
            for special needs individuals.--In addition to the data 
            required to be collected, analyzed, and reported under 
            clause (i) and notwithstanding the limitations under 
            subparagraph (B), as part of the quality improvement 
            program under paragraph (1), each MA organization offering 
            a specialized Medicare Advantage plan for special needs 
            individuals shall provide for the collection, analysis, and 
            reporting of data that permits the measurement of health 
            outcomes and other indices of quality with respect to the 
            requirements described in paragraphs (2) through (5) of 
            subsection (f). Such data may be based on claims data and 
            shall be at the plan level.''.
        (2) Effective date.--The amendment made by paragraph (1) shall 
    take effect on a date specified by the Secretary of Health and 
    Human Services (but in no case later than January 1, 2010), and 
    shall apply to all specialized Medicare Advantage plans for special 
    needs individuals regardless of when the plan first entered the 
    Medicare Advantage program under part C of title XVIII of the 
    Social Security Act.
    (g) Effective Date and Application.--The amendments made by 
subsections (c)(1), (d), and (e)(1) shall apply to plan years beginning 
on or after January 1, 2010, and shall apply to all specialized 
Medicare Advantage plans for special needs individuals regardless of 
when the plan first entered the Medicare Advantage program under part C 
of title XVIII of the Social Security Act.
    (h) No Affect on Medicaid Benefits for Duals.--Nothing in the 
provisions of, or amendments made by, this section shall affect the 
benefits available under the Medicaid program under title XIX of the 
Social Security Act for special needs individuals described in section 
1859(b)(6)(B)(ii) of such Act (42 U.S.C. 1395w-28(b)(6)(B)(ii)).
    SEC. 165. LIMITATION ON OUT-OF-POCKET COSTS FOR DUAL ELIGIBLES AND 
      QUALIFIED MEDICARE BENEFICIARIES ENROLLED IN A SPECIALIZED 
      MEDICARE ADVANTAGE PLAN FOR SPECIAL NEEDS INDIVIDUALS.
    (a) In General.--Section 1852(a) of the Social Security Act (42 
U.S.C. 1395w-22(a)) is amended by adding at the end the following new 
paragraph:
        ``(7) Limitation on cost-sharing for dual eligibles and 
    qualified medicare beneficiaries.--In the case of an individual who 
    is a full-benefit dual eligible individual (as defined in section 
    1935(c)(6)) or a qualified medicare beneficiary (as defined in 
    section 1905(p)(1)) and who is enrolled in a specialized Medicare 
    Advantage plan for special needs individuals described in section 
    1859(b)(6)(B)(ii), the plan may not impose cost-sharing that 
    exceeds the amount of cost-sharing that would be permitted with 
    respect to the individual under title XIX if the individual were 
    not enrolled in such plan.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to plan years beginning on or after January 1, 2010.
    SEC. 166. ADJUSTMENT TO THE MEDICARE ADVANTAGE STABILIZATION FUND.
    Section 1858(e)(2)(A)(i) of the Social Security Act (42 U.S.C. 
1395w-27a(e)(2)(A)(i)), as amended by section 110 of the Medicare, 
Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-173), is 
amended--
        (1) by striking ``2013'' and inserting ``2014''; and
        (2) by striking ``$1,790,000,000'' and inserting ``$1''.
    SEC. 167. ACCESS TO MEDICARE REASONABLE COST CONTRACT PLANS.
    (a) Extension of Reasonable Cost Contracts.--Section 
1876(h)(5)(C)(ii) of the Social Security Act (42 U.S.C. 
1395mm(h)(5)(C)(ii)), as amended by section 109 of the Medicare, 
Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-173), is 
amended by striking ``January 1, 2009'' and inserting ``January 1, 
2010'' in the matter preceding subclause (I).
    (b) Requirement for at Least Two Medicare Advantage Organizations 
To Be Offering a Plan in an Area for the Prohibition To Be 
Applicable.--Subclauses (I) and (II) of section 1876(h)(5)(C)(ii) of 
the Social Security Act (42 U.S.C. 1395mm(h)(5)(C)(ii)) are each 
amended by inserting ``, provided that all such plans are not offered 
by the same Medicare Advantage organization'' after ``clause (iii)''.
    (c) Revision of Requirements for a Plan That Are Used To Determine 
if Prohibition Is Applicable.--
        (1) In general.--Section 1876(h)(5)(C)(iii)(I) of the Social 
    Security Act (42 U.S.C. 1395mm(h)(5)(C)(iii)(I)) is amended by 
    inserting ``that are not in another Metropolitan Statistical Area 
    with a population of more than 250,000'' after ``such Metropolitan 
    Statistical Area''.
        (2) Clarification.--Section 1876(h)(5)(C)(iii)(I) of the Social 
    Security Act (42 U.S.C. 1395mm(h)(5)(C)(iii)(I)) is amended by 
    adding at the end the following new sentence: ``If the service area 
    includes a portion in more than 1 Metropolitan Statistical Area 
    with a population of more than 250,000, the minimum enrollment 
    determination under the preceding sentence shall be made with 
    respect to each such Metropolitan Statistical Area (and such 
    applicable contiguous counties to such Metropolitan Statistical 
    Area).''.
    (d) GAO Study and Report.--
        (1) Study.--The Comptroller General of the United States shall 
    conduct a study of the reasons (if any) why reasonable cost 
    contracts under section 1876(h) of the Social Security Act (42 
    U.S.C. 1395mm(h)) are unable to become Medicare Advantage plans 
    under part C of title XVIII of such Act.
        (2) Report.--Not later than December 31, 2009, the Comptroller 
    General of the United States shall submit to Congress a report 
    containing the results of the study conducted under paragraph (1), 
    together with recommendations for such legislation and 
    administrative action as the Comptroller General determines 
    appropriate.
    SEC. 168. MEDPAC STUDY AND REPORT ON QUALITY MEASURES.
    (a) Study.--The Medicare Payment Advisory Commission shall conduct 
a study on how comparable measures of performance and patient 
experience can be collected and reported by 2011 for the Medicare 
Advantage program under part C of title XVIII of the Social Security 
Act and the original Medicare fee-for-service program under parts A and 
B of such title. Such study shall address technical issues, such as 
data requirements, in addition to issues relating to appropriate 
quality benchmarks that--
        (1) compare the quality of care Medicare beneficiaries receive 
    across Medicare Advantage plans; and
        (2) compare the quality of care Medicare beneficiaries receive 
    under Medicare Advantage plans and under the original Medicare fee-
    for-service program.
    (b) Report.--Not later than March 31, 2010, the Medicare Payment 
Advisory Commission shall submit to Congress a report containing the 
results of the study conducted under subsection (a), together with 
recommendations for such legislation and administrative action as the 
Medicare Payment Advisory Commission determines appropriate.
    SEC. 169. MEDPAC STUDY AND REPORT ON MEDICARE ADVANTAGE PAYMENTS.
    (a) Study.--The Medicare Payment Advisory Commission (in this 
section referred to as the ``Commission'') shall conduct a study of the 
following:
        (1) The correlation between--
            (A) the costs that Medicare Advantage organizations with 
        respect to Medicare Advantage plans incur in providing coverage 
        under the plan for items and services covered under the 
        original Medicare fee-for-service program under parts A and B 
        of title XVIII of the Social Security Act, as reflected in plan 
        bids; and
            (B) county-level spending under such original Medicare fee-
        for-service program on a per capita basis, as calculated by the 
        Chief Actuary of the Centers for Medicare & Medicaid Services.
    The study with respect to the issue described in the preceding 
    sentence shall include differences in correlation statistics by 
    plan type and geographic area.
        (2) Based on these results of the study with respect to the 
    issue described in paragraph (1), and other data the Commission 
    determines appropriate--
            (A) alternate approaches to payment with respect to a 
        Medicare beneficiary enrolled in a Medicare Advantage plan 
        other than through county-level payment area equivalents.
            (B) the accuracy and completeness of county-level estimates 
        of per capita spending under such original Medicare fee-for-
        service program (including counties in Puerto Rico), as used to 
        determine the annual Medicare Advantage capitation rate under 
        section 1853 of the Social Security Act (42 U.S.C. 1395w-23), 
        and whether such estimates include--
                (i) expenditures with respect to Medicare beneficiaries 
            at facilities of the Department of Veterans Affairs; and
                (ii) all appropriate administrative expenses, including 
            claims processing.
        (3) Ways to improve the accuracy and completeness of county-
    level estimates of per capita spending described in paragraph 
    (2)(B).
    (b) Report.--Not later than March 31, 2010, the Commission shall 
submit to Congress a report containing the results of the study 
conducted under subsection (a), together with recommendations for such 
legislation and administrative action as the Commission determines 
appropriate.

               Subtitle E--Provisions Relating to Part D

                   PART I--IMPROVING PHARMACY ACCESS

    SEC. 171. PROMPT PAYMENT BY PRESCRIPTION DRUG PLANS AND MA-PD PLANS 
      UNDER PART D.
    (a) Prompt Payment by Prescription Drug Plans.--Section 1860D-12(b) 
of the Social Security Act (42 U.S.C. 1395w-112(b)) is amended by 
adding at the end the following new paragraph:
        ``(4) Prompt payment of clean claims.--
            ``(A) Prompt payment.--
                ``(i) In general.--Each contract entered into with a 
            PDP sponsor under this part with respect to a prescription 
            drug plan offered by such sponsor shall provide that 
            payment shall be issued, mailed, or otherwise transmitted 
            with respect to all clean claims submitted by pharmacies 
            (other than pharmacies that dispense drugs by mail order 
            only or are located in, or contract with, a long-term care 
            facility) under this part within the applicable number of 
            calendar days after the date on which the claim is 
            received.
                ``(ii) Clean claim defined.--In this paragraph, the 
            term `clean claim' means a claim that has no defect or 
            impropriety (including any lack of any required 
            substantiating documentation) or particular circumstance 
            requiring special treatment that prevents timely payment 
            from being made on the claim under this part.
                ``(iii) Date of receipt of claim.--In this paragraph, a 
            claim is considered to have been received--

                    ``(I) with respect to claims submitted 
                electronically, on the date on which the claim is 
                transferred; and
                    ``(II) with respect to claims submitted otherwise, 
                on the 5th day after the postmark date of the claim or 
                the date specified in the time stamp of the 
                transmission.

            ``(B) Applicable number of calendar days defined.--In this 
        paragraph, the term `applicable number of calendar days' 
        means--
                ``(i) with respect to claims submitted electronically, 
            14 days; and
                ``(ii) with respect to claims submitted otherwise, 30 
            days.
            ``(C) Interest payment.--
                ``(i) In general.--Subject to clause (ii), if payment 
            is not issued, mailed, or otherwise transmitted within the 
            applicable number of calendar days (as defined in 
            subparagraph (B)) after a clean claim is received, the PDP 
            sponsor shall pay interest to the pharmacy that submitted 
            the claim at a rate equal to the weighted average of 
            interest on 3-month marketable Treasury securities 
            determined for such period, increased by 0.1 percentage 
            point for the period beginning on the day after the 
            required payment date and ending on the date on which 
            payment is made (as determined under subparagraph (D)(iv)). 
            Interest amounts paid under this subparagraph shall not be 
            counted against the administrative costs of a prescription 
            drug plan or treated as allowable risk corridor costs under 
            section 1860D-15(e).
                ``(ii) Authority not to charge interest.--The Secretary 
            may provide that a PDP sponsor is not charged interest 
            under clause (i) in the case where there are exigent 
            circumstances, including natural disasters and other unique 
            and unexpected events, that prevent the timely processing 
            of claims.
            ``(D) Procedures involving claims.--
                ``(i) Claim deemed to be clean.--A claim is deemed to 
            be a clean claim if the PDP sponsor involved does not 
            provide notice to the claimant of any deficiency in the 
            claim--

                    ``(I) with respect to claims submitted 
                electronically, within 10 days after the date on which 
                the claim is received; and
                    ``(II) with respect to claims submitted otherwise, 
                within 15 days after the date on which the claim is 
                received.

                ``(ii) Claim determined to not be a clean claim.--

                    ``(I) In general.--If a PDP sponsor determines that 
                a submitted claim is not a clean claim, the PDP sponsor 
                shall, not later than the end of the period described 
                in clause (i), notify the claimant of such 
                determination. Such notification shall specify all 
                defects or improprieties in the claim and shall list 
                all additional information or documents necessary for 
                the proper processing and payment of the claim.
                    ``(II) Determination after submission of additional 
                information.--A claim is deemed to be a clean claim 
                under this paragraph if the PDP sponsor involved does 
                not provide notice to the claimant of any defect or 
                impropriety in the claim within 10 days of the date on 
                which additional information is received under 
                subclause (I).

                ``(iii) Obligation to pay.--A claim submitted to a PDP 
            sponsor that is not paid or contested by the sponsor within 
            the applicable number of days (as defined in subparagraph 
            (B)) after the date on which the claim is received shall be 
            deemed to be a clean claim and shall be paid by the PDP 
            sponsor in accordance with subparagraph (A).
                ``(iv) Date of payment of claim.--Payment of a clean 
            claim under such subparagraph is considered to have been 
            made on the date on which--

                    ``(I) with respect to claims paid electronically, 
                the payment is transferred; and
                    ``(II) with respect to claims paid otherwise, the 
                payment is submitted to the United States Postal 
                Service or common carrier for delivery.

            ``(E) Electronic transfer of funds.--A PDP sponsor shall 
        pay all clean claims submitted electronically by electronic 
        transfer of funds if the pharmacy so requests or has so 
        requested previously. In the case where such payment is made 
        electronically, remittance may be made by the PDP sponsor 
        electronically as well.
            ``(F) Protecting the rights of claimants.--
                ``(i) In general.--Nothing in this paragraph shall be 
            construed to prohibit or limit a claim or action not 
            covered by the subject matter of this section that any 
            individual or organization has against a provider or a PDP 
            sponsor.
                ``(ii) Anti-retaliation.--Consistent with applicable 
            Federal or State law, a PDP sponsor shall not retaliate 
            against an individual or provider for exercising a right of 
            action under this subparagraph.
            ``(G) Rule of construction.--A determination under this 
        paragraph that a claim submitted by a pharmacy is a clean claim 
        shall not be construed as a positive determination regarding 
        eligibility for payment under this title, nor is it an 
        indication of government approval of, or acquiescence 
        regarding, the claim submitted. The determination shall not 
        relieve any party of civil or criminal liability with respect 
        to the claim, nor does it offer a defense to any 
        administrative, civil, or criminal action with respect to the 
        claim.''.
    (b) Prompt Payment by MA-PD Plans.--Section 1857(f) of the Social 
Security Act (42 U.S.C. 1395w-27) is amended by adding at the end the 
following new paragraph:
        ``(3) Incorporation of certain prescription drug plan contract 
    requirements.--The following provisions shall apply to contracts 
    with a Medicare Advantage organization offering an MA-PD plan in 
    the same manner as they apply to contracts with a PDP sponsor 
    offering a prescription drug plan under part D:
            ``(A) Prompt payment.--Section 1860D-12(b)(4).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to plan years beginning on or after January 1, 2010.
    SEC. 172. SUBMISSION OF CLAIMS BY PHARMACIES LOCATED IN OR 
      CONTRACTING WITH LONG-TERM CARE FACILITIES.
    (a) Submission of Claims by Pharmacies Located in or Contracting 
With Long-Term Care Facilities.--
        (1) Submission of claims to prescription drug plans.--Section 
    1860D-12(b) of the Social Security Act (42 U.S.C. 1395w-112(b)), as 
    amended by section 171(a), is amended by adding at the end the 
    following new paragraph:
        ``(5) Submission of claims by pharmacies located in or 
    contracting with long-term care facilities.--Each contract entered 
    into with a PDP sponsor under this part with respect to a 
    prescription drug plan offered by such sponsor shall provide that a 
    pharmacy located in, or having a contract with, a long-term care 
    facility shall have not less than 30 days (but not more than 90 
    days) to submit claims to the sponsor for reimbursement under the 
    plan.''.
        (2) Submission of claims to ma-pd plans.--Section 1857(f)(3) of 
    the Social Security Act, as added by section 171(b), is amended by 
    adding at the end the following new subparagraph:
            ``(B) Submission of claims by pharmacies located in or 
        contracting with long-term care facilities.--Section 1860D-
        12(b)(5).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to plan years beginning on or after January 1, 2010.
    SEC. 173. REGULAR UPDATE OF PRESCRIPTION DRUG PRICING STANDARD.
    (a) Requirement for Prescription Drug Plans.--Section 1860D-12(b) 
of the Social Security Act (42 U.S.C. 1395w-112(b)), as amended by 
section 172(a)(1), is amended by adding at the end the following new 
paragraph:
        ``(6) Regular update of prescription drug pricing standard.--If 
    the PDP sponsor of a prescription drug plan uses a standard for 
    reimbursement of pharmacies based on the cost of a drug, each 
    contract entered into with such sponsor under this part with 
    respect to the plan shall provide that the sponsor shall update 
    such standard not less frequently than once every 7 days, beginning 
    with an initial update on January 1 of each year, to accurately 
    reflect the market price of acquiring the drug.''.
    (b) Requirement for MA-PD Plans.--Section 1857(f)(3) of the Social 
Security Act, as amended by section 172(a)(2), is amended by adding at 
the end the following new subparagraph:
            ``(C) Regular update of prescription drug pricing 
        standard.--Section 1860D-12(b)(6).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to plan years beginning on or after January 1, 2009.

                       PART II--OTHER PROVISIONS

    SEC. 175. INCLUSION OF BARBITURATES AND BENZODIAZEPINES AS COVERED 
      PART D DRUGS.
    (a) In General.--Section 1860D-2(e)(2)(A) of the Social Security 
Act (42 U.S.C. 1395w-102(e)(2)(A)) is amended by inserting after 
``agents),'' the following ``other than subparagraph (I) of such 
section (relating to barbiturates) if the barbiturate is used in the 
treatment of epilepsy, cancer, or a chronic mental health disorder, and 
other than subparagraph (J) of such section (relating to 
benzodiazepines),''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to prescriptions dispensed on or after January 1, 2013.
    SEC. 176. FORMULARY REQUIREMENTS WITH RESPECT TO CERTAIN CATEGORIES 
      OR CLASSES OF DRUGS.
    Section 1860D-4(b)(3) of the Social Security Act (42 U.S.C. 1395w-
104(b)(3)) is amended--
        (1) in subparagraph (C)(i), by striking ``The formulary'' and 
    inserting ``Subject to subparagraph (G), the formulary''; and
        (2) by inserting after subparagraph (F) the following new 
    subparagraph:
            ``(G) Required inclusion of drugs in certain categories and 
        classes.--
                ``(i) Identification of drugs in certain categories and 
            classes.--Beginning with plan year 2010, the Secretary 
            shall identify, as appropriate, categories and classes of 
            drugs for which both of the following criteria are met:

                    ``(I) Restricted access to drugs in the category or 
                class would have major or life threatening clinical 
                consequences for individuals who have a disease or 
                disorder treated by the drugs in such category or 
                class.
                    ``(II) There is significant clinical need for such 
                individuals to have access to multiple drugs within a 
                category or class due to unique chemical actions and 
                pharmacological effects of the drugs within the 
                category or class, such as drugs used in the treatment 
                of cancer.

                ``(ii) Formulary requirements.--Subject to clause 
            (iii), PDP sponsors offering prescription drug plans shall 
            be required to include all covered part D drugs in the 
            categories and classes identified by the Secretary under 
            clause (i).
                ``(iii) Exceptions.--The Secretary may establish 
            exceptions that permits a PDP sponsor of a prescription 
            drug plan to exclude from its formulary a particular 
            covered part D drug in a category or class that is 
            otherwise required to be included in the formulary under 
            clause (ii) (or to otherwise limit access to such a drug, 
            including through prior authorization or utilization 
            management). Any exceptions established under the preceding 
            sentence shall be provided under a process that--

                    ``(I) ensures that any exception to such 
                requirement is based upon scientific evidence and 
                medical standards of practice (and, in the case of 
                antiretroviral medications, is consistent with the 
                Department of Health and Human Services Guidelines for 
                the Use of Antiretroviral Agents in HIV-1-Infected 
                Adults and Adolescents); and
                    ``(II) includes a public notice and comment 
                period.''.

                      Subtitle F--Other Provisions

    SEC. 181. USE OF PART D DATA.
    Section 1860D-12(b)(3)(D) of the Social Security Act (42 U.S.C. 
1395w-112(b)(3)(D)) is amended by adding at the end the following 
sentence: ``Notwithstanding any other provision of law, information 
provided to the Secretary under the application of section 1857(e)(1) 
to contracts under this section under the preceding sentence--
                ``(i) may be used for the purposes of carrying out this 
            part, improving public health through research on the 
            utilization, safety, effectiveness, quality, and efficiency 
            of health care services (as the Secretary determines 
            appropriate); and
                ``(ii) shall be made available to Congressional support 
            agencies (in accordance with their obligations to support 
            Congress as set out in their authorizing statutes) for the 
            purposes of conducting Congressional oversight, monitoring, 
            making recommendations, and analysis of the program under 
            this title.''.
    SEC. 182. REVISION OF DEFINITION OF MEDICALLY ACCEPTED INDICATION 
      FOR DRUGS.
    (a) Revision of Definition for Part D Drugs.--
        (1) In general.--Section 1860D-2(e)(1) of the Social Security 
    Act (42 U.S.C. 1395w-102(e)(1)) is amended, in the matter following 
    subparagraph (B)--
            (A) by striking ``(as defined in section 1927(k)(6))'' and 
        inserting ``(as defined in paragraph (4))''; and
            (B) by adding at the end the following new paragraph:
        ``(4) Medically accepted indication defined.--
            ``(A) In general.--For purposes of paragraph (1), the term 
        `medically accepted indication' has the meaning given that 
        term--
                ``(i) in the case of a covered part D drug used in an 
            anticancer chemotherapeutic regimen, in section 
            1861(t)(2)(B), except that in applying such section--

                    ``(I) `prescription drug plan or MA-PD plan' shall 
                be substituted for `carrier' each place it appears; and
                    ``(II) subject to subparagraph (B), the compendia 
                described in section 1927(g)(1)(B)(i)(III) shall be 
                included in the list of compendia described in clause 
                (ii)(I) section 1861(t)(2)(B); and

                ``(ii) in the case of any other covered part D drug, in 
            section 1927(k)(6).
            ``(B) Conflict of interest.--On and after January 1, 2010, 
        subparagraph (A)(i)(II) shall not apply unless the compendia 
        described in section 1927(g)(1)(B)(i)(III) meets the 
        requirement in the third sentence of section 1861(t)(2)(B).
            ``(C) Update.--For purposes of applying subparagraph 
        (A)(ii), the Secretary shall revise the list of compendia 
        described in section 1927(g)(1)(B)(i) as is appropriate for 
        identifying medically accepted indications for drugs. Any such 
        revision shall be done in a manner consistent with the process 
        for revising compendia under section 1861(t)(2)(B).''.
        (2) Effective date.--The amendments made by this subsection 
    shall apply to plan years beginning on or after January 1, 2009.
    (b) Conflicts of Interest.--Section 1861(t)(2)(B) of the Social 
Security Act (42 U.S.C. 1395x(t)(2)(B)) is amended by adding at the end 
the following new sentence: ``On and after January 1, 2010, no 
compendia may be included on the list of compendia under this 
subparagraph unless the compendia has a publicly transparent process 
for evaluating therapies and for identifying potential conflicts of 
interests.''.
    SEC. 183. CONTRACT WITH A CONSENSUS-BASED ENTITY REGARDING 
      PERFORMANCE MEASUREMENT.
    (a) Contract.--
        (1) In general.--Part E of title XVIII of the Social Security 
    Act (42 U.S.C. 1395x et seq.) is amended by inserting after section 
    1889 the following new section:


     ``contract with a consensus-based entity regarding performance 
                              measurement

    ``Sec. 1890.  (a) Contract.--
        ``(1) In general.--For purposes of activities conducted under 
    this Act, the Secretary shall identify and have in effect a 
    contract with a consensus-based entity, such as the National 
    Quality Forum, that meets the requirements described in subsection 
    (c). Such contract shall provide that the entity will perform the 
    duties described in subsection (b).
        ``(2) Timing for first contract.--As soon as practicable after 
    the date of the enactment of this subsection, the Secretary shall 
    enter into the first contract under paragraph (1).
        ``(3) Period of contract.--A contract under paragraph (1) shall 
    be for a period of 4 years (except as may be renewed after a 
    subsequent bidding process).
        ``(4) Competitive procedures.--Competitive procedures (as 
    defined in section 4(5) of the Office of Federal Procurement Policy 
    Act (41 U.S.C. 403(5))) shall be used to enter into a contract 
    under paragraph (1).
    ``(b) Duties.--The duties described in this subsection are the 
following:
        ``(1) Priority setting process.--The entity shall synthesize 
    evidence and convene key stakeholders to make recommendations, with 
    respect to activities conducted under this Act, on an integrated 
    national strategy and priorities for health care performance 
    measurement in all applicable settings. In making such 
    recommendations, the entity shall--
            ``(A) ensure that priority is given to measures--
                ``(i) that address the health care provided to patients 
            with prevalent, high-cost chronic diseases;
                ``(ii) with the greatest potential for improving the 
            quality, efficiency, and patient-centeredness of health 
            care; and
                ``(iii) that may be implemented rapidly due to existing 
            evidence, standards of care, or other reasons; and
            ``(B) take into account measures that--
                ``(i) may assist consumers and patients in making 
            informed health care decisions;
                ``(ii) address health disparities across groups and 
            areas; and
                ``(iii) address the continuum of care a patient 
            receives, including services furnished by multiple health 
            care providers or practitioners and across multiple 
            settings.
        ``(2) Endorsement of measures.--The entity shall provide for 
    the endorsement of standardized health care performance measures. 
    The endorsement process under the preceding sentence shall consider 
    whether a measure--
            ``(A) is evidence-based, reliable, valid, verifiable, 
        relevant to enhanced health outcomes, actionable at the 
        caregiver level, feasible to collect and report, and responsive 
        to variations in patient characteristics, such as health 
        status, language capabilities, race or ethnicity, and income 
        level; and
            ``(B) is consistent across types of health care providers, 
        including hospitals and physicians.
        ``(3) Maintenance of measures.--The entity shall establish and 
    implement a process to ensure that measures endorsed under 
    paragraph (2) are updated (or retired if obsolete) as new evidence 
    is developed.
        ``(4) Promotion of the development of electronic health 
    records.--The entity shall promote the development and use of 
    electronic health records that contain the functionality for 
    automated collection, aggregation, and transmission of performance 
    measurement information.
        ``(5) Annual report to congress and the secretary; secretarial 
    publication and comment.--
            ``(A) Annual report.--By not later than March 1 of each 
        year (beginning with 2009), the entity shall submit to Congress 
        and the Secretary a report containing a description of--
                ``(i) the implementation of quality measurement 
            initiatives under this Act and the coordination of such 
            initiatives with quality initiatives implemented by other 
            payers;
                ``(ii) the recommendations made under paragraph (1); 
            and
                ``(iii) the performance by the entity of the duties 
            required under the contract entered into with the Secretary 
            under subsection (a).
            ``(B) Secretarial review and publication of annual 
        report.--Not later than 6 months after receiving a report under 
        subparagraph (A) for a year, the Secretary shall--
                ``(i) review such report; and
                ``(ii) publish such report in the Federal Register, 
            together with any comments of the Secretary on such report.
    ``(c) Requirements Described.--The requirements described in this 
subsection are the following:
        ``(1) Private nonprofit.--The entity is a private nonprofit 
    entity governed by a board.
        ``(2) Board membership.--The members of the board of the entity 
    include--
            ``(A) representatives of health plans and health care 
        providers and practitioners or representatives of groups 
        representing such health plans and health care providers and 
        practitioners;
            ``(B) health care consumers or representatives of groups 
        representing health care consumers; and
            ``(C) representatives of purchasers and employers or 
        representatives of groups representing purchasers or employers.
        ``(3) Entity membership.--The membership of the entity includes 
    persons who have experience with--
            ``(A) urban health care issues;
            ``(B) safety net health care issues;
            ``(C) rural and frontier health care issues; and
            ``(D) health care quality and safety issues.
        ``(4) Open and transparent.--With respect to matters related to 
    the contract with the Secretary under subsection (a), the entity 
    conducts its business in an open and transparent manner and 
    provides the opportunity for public comment on its activities.
        ``(5) Voluntary consensus standards setting organization.--The 
    entity operates as a voluntary consensus standards setting 
    organization as defined for purposes of section 12(d) of the 
    National Technology Transfer and Advancement Act of 1995 (Public 
    Law 104-113) and Office of Management and Budget Revised Circular 
    A-119 (published in the Federal Register on February 10, 1998).
        ``(6) Experience.--The entity has at least 4 years of 
    experience in establishing national consensus standards.
        ``(7) Membership fees.--If the entity requires a membership fee 
    for participation in the functions of the entity, such fees shall 
    be reasonable and adjusted based on the capacity of the potential 
    member to pay the fee. In no case shall membership fees pose a 
    barrier to the participation of individuals or groups with low or 
    nominal resources to participate in the functions of the entity.
    ``(d) Funding.--For purposes of carrying out this section, the 
Secretary shall provide for the transfer, from the Federal Hospital 
Insurance Trust Fund under section 1817 and the Federal Supplementary 
Medical Insurance Trust Fund under section 1841 (in such proportion as 
the Secretary determines appropriate), of $10,000,000 to the Centers 
for Medicare & Medicaid Services Program Management Account for each of 
fiscal years 2009 through 2012.''.
        (2) Sense of the senate.--It is the Sense of the Senate that 
    the selection by the Secretary of Health and Human Services of an 
    entity to contract with under section 1890(a) of the Social 
    Security Act, as added by paragraph (1), should not be construed as 
    diminishing the significant contributions of the Boards of 
    Medicine, the quality alliances, and other clinical and technical 
    experts to efforts to measure and improve the quality of health 
    care services.
    (b) GAO Study and Reports on the Performance and Costs of the 
Consensus-Based Entity Under the Contract.--
        (1) In general.--The Comptroller General of the United States 
    shall conduct a study on--
            (A) the performance of the entity with a contract with the 
        Secretary of Health and Human Services under section 1890(a) of 
        the Social Security Act, as added by subsection (a), of its 
        duties under such contract; and
            (B) the costs incurred by such entity in performing such 
        duties.
        (2) Reports.--Not later than 18 months and 36 months after the 
    effective date of the first contract entered into under such 
    section 1890(a), the Comptroller General of the United States shall 
    submit to Congress a report containing the results of the study 
    conducted under paragraph (1), together with recommendations for 
    such legislation and administrative action as the Comptroller 
    General determines appropriate.
    SEC. 184. COST-SHARING FOR CLINICAL TRIALS.
    Section 1833 of the Social Security Act (42 U.S.C. 1395l), as 
amended by section 151(a), is amended by adding at the end the 
following new subsection:
    ``(w) Methods of Payment.--The Secretary may develop alternative 
methods of payment for items and services provided under clinical 
trials and comparative effectiveness studies sponsored or supported by 
an agency of the Department of Health and Human Services, as determined 
by the Secretary, to those that would otherwise apply under this 
section, to the extent such alternative methods are necessary to 
preserve the scientific validity of such trials or studies, such as in 
the case where masking the identity of interventions from patients and 
investigators is necessary to comply with the particular trial or study 
design.''.
    SEC. 185. ADDRESSING HEALTH CARE DISPARITIES.
    Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) is 
amended by inserting after section 1808 the following new section:


                   ``addressing health care disparities

    ``Sec. 1809.  (a) Evaluating Data Collection Approaches.--The 
Secretary shall evaluate approaches for the collection of data under 
this title, to be performed in conjunction with existing quality 
reporting requirements and programs under this title, that allow for 
the ongoing, accurate, and timely collection and evaluation of data on 
disparities in health care services and performance on the basis of 
race, ethnicity, and gender. In conducting such evaluation, the 
Secretary shall consider the following objectives:
        ``(1) Protecting patient privacy.
        ``(2) Minimizing the administrative burdens of data collection 
    and reporting on providers and health plans participating under 
    this title.
        ``(3) Improving Medicare program data on race, ethnicity, and 
    gender.
    ``(b) Reports to Congress.--
        ``(1) Report on evaluation.--Not later than 18 months after the 
    date of the enactment of this section, the Secretary shall submit 
    to Congress a report on the evaluation conducted under subsection 
    (a). Such report shall, taking into consideration the results of 
    such evaluation--
            ``(A) identify approaches (including defining 
        methodologies) for identifying and collecting and evaluating 
        data on health care disparities on the basis of race, 
        ethnicity, and gender for the original Medicare fee-for-service 
        program under parts A and B, the Medicare Advantage program 
        under part C, and the Medicare prescription drug program under 
        part D; and
            ``(B) include recommendations on the most effective 
        strategies and approaches to reporting HEDIS quality measures 
        as required under section 1852(e)(3) and other nationally 
        recognized quality performance measures, as appropriate, on the 
        basis of race, ethnicity, and gender.
        ``(2) Reports on data analyses.--Not later than 4 years after 
    the date of the enactment of this section, and 4 years thereafter, 
    the Secretary shall submit to Congress a report that includes 
    recommendations for improving the identification of health care 
    disparities for Medicare beneficiaries based on analyses of the 
    data collected under subsection (c).
    ``(c) Implementing Effective Approaches.--Not later than 24 months 
after the date of the enactment of this section, the Secretary shall 
implement the approaches identified in the report submitted under 
subsection (b)(1) for the ongoing, accurate, and timely collection and 
evaluation of data on health care disparities on the basis of race, 
ethnicity, and gender.''.
    SEC. 186. DEMONSTRATION TO IMPROVE CARE TO PREVIOUSLY UNINSURED.
    (a) Establishment.--Within one year after the date of the enactment 
of this Act, the Secretary (in this section referred to as the 
``Secretary'') shall establish a demonstration project to determine the 
greatest needs and most effective methods of outreach to medicare 
beneficiaries who were previously uninsured.
    (b) Scope.--The demonstration shall be in no fewer than 10 sites, 
and shall include state health insurance assistance programs, community 
health centers, community-based organizations, community health 
workers, and other service providers under parts A, B, and C of title 
XVIII of the Social Security Act. Grantees that are plans operating 
under part C shall document that enrollees who were previously 
uninsured receive the ``Welcome to Medicare'' physical exam.
    (c) Duration.--The Secretary shall conduct the demonstration 
project for a period of 2 years.
    (d) Report and Evaluation.--The Secretary shall conduct an 
evaluation of the demonstration and not later than 1 year after the 
completion of the project shall submit to Congress a report including 
the following:
        (1) An analysis of the effectiveness of outreach activities 
    targeting beneficiaries who were previously uninsured, such as 
    revising outreach and enrollment materials (including the potential 
    for use of video information), providing one-on-one counseling, 
    working with community health workers, and amending the Medicare 
    and You handbook.
        (2) The effect of such outreach on beneficiary access to care, 
    utilization of services, efficiency and cost-effectiveness of 
    health care delivery, patient satisfaction, and select health 
    outcomes.
    SEC. 187. OFFICE OF THE INSPECTOR GENERAL REPORT ON COMPLIANCE WITH 
      AND ENFORCEMENT OF NATIONAL STANDARDS ON CULTURALLY AND 
      LINGUISTICALLY APPROPRIATE SERVICES (CLAS) IN MEDICARE.
    (a) Report.--Not later than two years after the date of the 
enactment of this Act, the Inspector General of the Department of 
Health and Human Services shall prepare and publish a report on--
        (1) the extent to which Medicare providers and plans are 
    complying with the Office for Civil Rights' Guidance to Federal 
    Financial Assistance Recipients Regarding Title VI Prohibition 
    Against National Origin Discrimination Affecting Limited English 
    Proficient Persons and the Office of Minority Health's Culturally 
    and Linguistically Appropriate Services Standards in health care; 
    and
        (2) a description of the costs associated with or savings 
    related to the provision of language services.
Such report shall include recommendations on improving compliance with 
CLAS Standards and recommendations on improving enforcement of CLAS 
Standards.
    (b) Implementation.--Not later than one year after the date of 
publication of the report under subsection (a), the Department of 
Health and Human Services shall implement changes responsive to any 
deficiencies identified in the report.
    SEC. 188. MEDICARE IMPROVEMENT FUNDING.
    (a) Medicare Improvement Fund.--
        (1) In general.--Subject to paragraph (2), title XVIII of the 
    Social Security Act (42 U.S.C. 1395 et seq.) is amended by adding 
    at the end the following new section:


                       ``medicare improvement fund

    ``Sec. 1898.  (a) Establishment.--
        ``The Secretary shall establish under this title a Medicare 
    Improvement Fund (in this section referred to as the `Fund') which 
    shall be available to the Secretary to make improvements under the 
    original fee-for-service program under parts A and B for 
    individuals entitled to, or enrolled for, benefits under part A or 
    enrolled under part B.
    ``(b) Funding.--
        ``(1) In general.--There shall be available to the Fund, for 
    expenditures from the Fund for services furnished during fiscal 
    years 2014 through 2017, $19,900,000,000.
        ``(2) Payment from trust funds.--The amount specified under 
    paragraph (1) shall be available to the Fund, as expenditures are 
    made from the Fund, from the Federal Hospital Insurance Trust Fund 
    and the Federal Supplementary Medical Insurance Trust Fund in such 
    proportion as the Secretary determines appropriate.
        ``(3) Funding limitation.--Amounts in the Fund shall be 
    available in advance of appropriations but only if the total amount 
    obligated from the Fund does not exceed the amount available to the 
    Fund under paragraph (1). The Secretary may obligate funds from the 
    Fund only if the Secretary determines (and the Chief Actuary of the 
    Centers for Medicare & Medicaid Services and the appropriate budget 
    officer certify) that there are available in the Fund sufficient 
    amounts to cover all such obligations incurred consistent with the 
    previous sentence.''.
        (2) Contingency.--
            (A) In general.--If there is enacted, before, on, or after 
        the date of the enactment of this Act, a Supplemental 
        Appropriations Act, 2008 that includes a provision providing 
        for a Medicare Improvement Fund under a section 1898 of the 
        Social Security Act, the alternative amendment described in 
        subparagraph (B)--
                (i) shall apply instead of the amendment made by 
            paragraph (1); and
                (ii) shall be executed after such provision in such 
            Supplemental Appropriations Act.
            (B) Alternative amendment described.--The alternative 
        amendment described in this subparagraph is as follows: Section 
        1898(b)(1) of the Social Security Act, as added by the 
        Supplemental Appropriations Act, 2008, is amended by inserting 
        before the period at the end the following: `` and, in addition 
        for services furnished during fiscal years 2014 through 2017, 
        $19,900,000,000''.
    (b) Implementation.--For purposes of carrying out the provisions 
of, and amendments made by, this title, in addition to any other 
amounts provided in such provisions and amendments, the Secretary of 
Health and Human Services shall provide for the transfer, from the 
Federal Hospital Insurance Trust Fund under section 1817 of the Social 
Security Act (42 U.S.C. 1395i) and the Federal Supplementary Medical 
Insurance Trust Fund under section 1841 of such Act (42 U.S.C. 1395t), 
in the same proportion as the Secretary determines under section 
1853(f) of such Act (42 U.S.C. 1395w-23(f)), of $140,000,000 to the 
Centers for Medicare & Medicaid Services Program Management Account for 
the period of fiscal years 2009 through 2013.
    SEC. 189. INCLUSION OF MEDICARE PROVIDERS AND SUPPLIERS IN FEDERAL 
      PAYMENT LEVY AND ADMINISTRATIVE OFFSET PROGRAM.
    (a) In General.--Section 1874 of the Social Security Act (42 U.S.C. 
1395kk) is amended by adding at the end the following new subsection:
    ``(d) Inclusion of Medicare Provider and Supplier Payments in 
Federal Payment Levy Program.--
        ``(1) In general.--The Centers for Medicare & Medicaid Services 
    shall take all necessary steps to participate in the Federal 
    Payment Levy Program under section 6331(h) of the Internal Revenue 
    Code of 1986 as soon as possible and shall ensure that--
            ``(A) at least 50 percent of all payments under parts A and 
        B are processed through such program beginning within 1 year 
        after the date of the enactment of this section;
            ``(B) at least 75 percent of all payments under parts A and 
        B are processed through such program beginning within 2 years 
        after such date; and
            ``(C) all payments under parts A and B are processed 
        through such program beginning not later than September 30, 
        2011.
        ``(2) Assistance.--The Financial Management Service and the 
    Internal Revenue Service shall provide assistance to the Centers 
    for Medicare & Medicaid Services to ensure that all payments 
    described in paragraph (1) are included in the Federal Payment Levy 
    Program by the deadlines specified in that subsection.''.
    (b) Application of Administrative Offset Provisions to Medicare 
Provider or Supplier Payments.--Section 3716 of title 31, United States 
Code, is amended--
        (1) by inserting ``the Department of Health and Human 
    Services,'' after ``United States Postal Service,'' in subsection 
    (c)(1)(A); and
        (2) by adding at the end of subsection (c)(3) the following new 
    subparagraph:
            ``(D) This section shall apply to payments made after the 
        date which is 90 days after the enactment of this subparagraph 
        (or such earlier date as designated by the Secretary of Health 
        and Human Services) with respect to claims or debts, and to 
        amounts payable, under title XVIII of the Social Security 
        Act.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

                           TITLE II--MEDICAID

    SEC. 201. EXTENSION OF TRANSITIONAL MEDICAL ASSISTANCE (TMA) AND 
      ABSTINENCE EDUCATION PROGRAM.
    Section 401 of division B of the Tax Relief and Health Care Act of 
2006 (Public Law 109-432, 120 Stat. 2994), as amended by section 1 of 
Public Law 110-48 (121 Stat. 244), section 2 of the TMA, Abstinence, 
Education, and QI Programs Extension Act of 2007 (Public Law 110-90, 
121 Stat. 984), and section 202 of the Medicare, Medicaid, and SCHIP 
Extension Act of 2007 (Public Law 110-173) is amended--
        (1) by striking ``June 30, 2008'' and inserting ``June 30, 
    2009'';
        (2) by striking ``the third quarter of fiscal year 2008'' and 
    inserting ``the third quarter of fiscal year 2009''; and
        (3) by striking ``the third quarter of fiscal year 2007'' and 
    inserting ``the third quarter of fiscal year 2008''.
    SEC. 202. MEDICAID DSH EXTENSION.
    Section 1923(f)(6) of the Social Security Act (42 U.S.C. 1396r-
4(f)(6)) is amended--
        (1) in the heading, by striking ``fiscal year 2007 and portions 
    of fiscal year 2008'' and inserting ``fiscal years 2007 through 
    2009 and the first calendar quarter of fiscal year 2010''; and
        (2) in subparagraph (A)--
            (A) in clause (i)--
                (i) in the second sentence--

                    (I) by striking ``fiscal year 2008 for the period 
                ending on June 30, 2008'' and inserting ``fiscal years 
                2008 and 2009''; and
                    (II) by striking ``\3/4\ of''; and

                (ii) by adding at the end the following new sentences: 
            ``Only with respect to fiscal year 2010 for the period 
            ending on December 31, 2009, the DSH allotment for 
            Tennessee for such portion of the fiscal year, 
            notwithstanding such table or terms, shall be \1/4\ of the 
            amount specified in the first sentence for fiscal year 
            2007.'';
            (B) in clause (ii), by striking ``or for a period in fiscal 
        year 2008'' and inserting ``, 2008, 2009, or for a period in 
        fiscal year 2010'';
            (C) in clause (iv)--
                (i) in the heading, by striking ``fiscal year 2007 and 
            fiscal year 2008'' and inserting ``fiscal years 2007 
            through 2009 and the first calendar quarter of fiscal year 
            2010'';
                (ii) in subclause (I), by striking ``or for a period in 
            fiscal year 2008'' and inserting ``, 2008, 2009, or for a 
            period in fiscal year 2010''; and
                (iii) in subclause (II), by striking ``or for a period 
            in fiscal year 2008'' and inserting ``, 2008, 2009, or for 
            a period in fiscal year 2010''; and
        (3) in subparagraph (B)(i)--
            (A) in the first sentence, by striking ``fiscal year 2007'' 
        and inserting ``each of fiscal years 2007 through 2009''; and
            (B) by striking the second sentence and inserting the 
        following: ``Only with respect to fiscal year 2010 for the 
        period ending on December 31, 2009, the DSH allotment for 
        Hawaii for such portion of the fiscal year, notwithstanding the 
        table set forth in paragraph (2), shall be $2,500,000.''.
    SEC. 203. PHARMACY REIMBURSEMENT UNDER MEDICAID.
    (a) Delay in Application of New Payment Limit for Multiple Source 
Drugs Under Medicaid.--Notwithstanding paragraphs (4) and (5) of 
subsection (e) of section 1927 of the Social Security Act (42 U.S.C. 
1396r-8) or part 447 of title 42, Code of Federal Regulations, as 
published on July 17, 2007 (72 Federal Register 39142)--
        (1) the specific upper limit under section 447.332 of title 42, 
    Code of Federal Regulations (as in effect on December 31, 2006) 
    applicable to payments made by a State for multiple source drugs 
    under a State Medicaid plan shall continue to apply through 
    September 30, 2009, for purposes of the availability of Federal 
    financial participation for such payments; and
        (2) the Secretary of Health and Human Services shall not, prior 
    to October 1, 2009, finalize, implement, enforce, or otherwise take 
    any action (through promulgation of regulation, issuance of 
    regulatory guidance, use of Federal payment audit procedures, or 
    other administrative action, policy, or practice, including a 
    Medical Assistance Manual transmittal or letter to State Medicaid 
    directors) to impose the specific upper limit established under 
    section 447.514(b) of title 42, Code of Federal Regulations as 
    published on July 17, 2007 (72 Federal Register 39142).
    (b) Temporary Suspension of Updated Publicly Available AMP Data.--
Notwithstanding clause (v) of section 1927(b)(3)(D) of the Social 
Security Act (42 U.S.C. 1396r-8(b)(3)(D)), the Secretary of Health and 
Human Services shall not, prior to October 1, 2009, make publicly 
available any AMP disclosed to the Secretary.
    (c) Definitions.--In this subsection:
        (1) The term ``multiple source drug'' has the meaning given 
    that term in section 1927(k)(7)(A)(i) of the Social Security Act 
    (42 U.S.C. 1396r-8(k)(7)(A)(i)).
        (2) The term ``AMP'' has the meaning given ``average 
    manufacturer price'' in section 1927(k)(1) of the Social Security 
    Act (42 U.S.C. 1396r-8(k)(1)) and ``AMP'' in section 447.504(a) of 
    title 42, Code of Federal Regulations as published on July 17, 2007 
    (72 Federal Register 39142).
    SEC. 204. REVIEW OF ADMINISTRATIVE CLAIM DETERMINATIONS.
    (a) In General.--Section 1116 of the Social Security Act (42 U.S.C. 
1316) is amended by adding at the end the following new subsection:
    ``(e)(1) Whenever the Secretary determines that any item or class 
of items on account of which Federal financial participation is claimed 
under title XIX shall be disallowed for such participation, the State 
shall be entitled to and upon request shall receive a reconsideration 
of the disallowance, provided that such request is made during the 60-
day period that begins on the date the State receives notice of the 
disallowance.
    ``(2)(A) A State may appeal a disallowance of a claim for federal 
financial participation under title XIX by the Secretary, or an 
unfavorable reconsideration of a disallowance, during the 60-day period 
that begins on the date the State receives notice of the disallowance 
or of the unfavorable reconsideration, in whole or in part, to the 
Departmental Appeals Board, established in the Department of Health and 
Human Services (in this paragraph referred to as the `Board'), by 
filing a notice of appeal with the Board.
    ``(B) The Board shall consider a State's appeal of a disallowance 
of such a claim (or of an unfavorable reconsideration of a 
disallowance) on the basis of such documentation as the State may 
submit and as the Board may require to support the final decision of 
the Board. In deciding whether to uphold a disallowance of such a claim 
or any portion thereof, the Board shall be bound by all applicable laws 
and regulations and shall conduct a thorough review of the issues, 
taking into account all relevant evidence. The Board's decision of an 
appeal under subparagraph (A) shall be the final decision of the 
Secretary and shall be subject to reconsideration by the Board only 
upon motion of either party filed during the 60-day period that begins 
on the date of the Board's decision or to judicial review in accordance 
with subparagraph (C).
    ``(C) A State may obtain judicial review of a decision of the Board 
by filing an action in any United States District Court located within 
the appealing State (or, if several States jointly appeal the 
disallowance of claims for Federal financial participation under 
section 1903, in any United States District Court that is located 
within any State that is a party to the appeal) or the United States 
District Court for the District of Columbia. Such an action may only be 
filed--
        ``(i) if no motion for reconsideration was filed within the 60-
    day period specified in subparagraph (B), during such 60-day 
    period; or
        ``(ii) if such a motion was filed within such period, during 
    the 60-day period that begins on the date of the Board's decision 
    on such motion.''.
    (b) Conforming Amendment.--Section 1116(d) of such Act (42 U.S.C. 
1316(d)) is amended by striking ``or XIX,''.
    (c) Effective Date.--The amendments made by this section take 
effect on the date of the enactment of this Act and apply to any 
disallowance of a claim for Federal financial participation under title 
XIX of the Social Security Act (42 U.S.C. 1396 et seq.) made on or 
after such date or during the 60-day period prior to such date.
    SEC. 205. COUNTY MEDICAID HEALTH INSURING ORGANIZATIONS.
    (a) In General.--Section 9517(c)(3) of the Consolidated Omnibus 
Budget Reconciliation Act of 1985 (42 U.S.C. 1396b note), as added by 
section 4734 of the Omnibus Budget Reconciliation Act of 1990 and as 
amended by section 704 of the Medicare, Medicaid, and SCHIP Benefits 
Improvement and Protection Act of 2000, is amended--
        (1) in subparagraph (A), by inserting ``, in the case of any 
    health insuring organization described in such subparagraph that is 
    operated by a public entity established by Ventura County, and in 
    the case of any health insuring organization described in such 
    subparagraph that is operated by a public entity established by 
    Merced County'' after ``described in subparagraph (B)''; and
        (2) in subparagraph (C), by striking ``14 percent'' and 
    inserting ``16 percent''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect on the date of the enactment of this Act.

                        TITLE III--MISCELLANEOUS

    SEC. 301. EXTENSION OF TANF SUPPLEMENTAL GRANTS.
    (a) Extension Through Fiscal Year 2009.--Section 7101(a) of the 
Deficit Reduction Act of 2005 (Public Law 109-171; 120 Stat. 135) is 
amended by striking ``fiscal year 2008'' and inserting ``fiscal year 
2009''.
    (b) Conforming Amendment.--Section 403(a)(3)(H)(ii) of the Social 
Security Act (42 U.S.C. 603(a)(3)(H)(ii)) is amended to read as 
follows:
                ``(ii) subparagraph (G) shall be applied as if `fiscal 
            year 2009' were substituted for `fiscal year 2001'; and''.
    SEC. 302. 70 PERCENT FEDERAL MATCHING FOR FOSTER CARE AND ADOPTION 
      ASSISTANCE FOR THE DISTRICT OF COLUMBIA.
    (a) In General.--Section 474(a) of the Social Security Act (42 
U.S.C. 674(a)) is amended in each of paragraphs (1) and (2) by striking 
``(as defined in section 1905(b) of this Act)'' and inserting ``(which 
shall be as defined in section 1905(b), in the case of a State other 
than the District of Columbia, or 70 percent, in the case of the 
District of Columbia)''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on October 1, 2008, and shall apply to calendar quarters 
beginning on or after that date.
    SEC. 303. EXTENSION OF SPECIAL DIABETES GRANT PROGRAMS.
    (a) Special Diabetes Programs for Type I Diabetes.--Section 
330B(b)(2)(C) of the Public Health Service Act (42 U.S.C. 254c-2(b)(2)) 
is amended by striking ``2009'' and inserting ``2011''.
    (b) Special Diabetes Programs for Indians.--Section 330C(c)(2)(C) 
of the Public Health Service Act (42 U.S.C. 254c-3(c)(2)(C)) is amended 
by striking ``2009'' and inserting ``2011''.
    (c) Report on Grant Programs.--Section 4923(b) of the Balanced 
Budget Act of 1997 (42 U.S.C. 1254c-2 note), as amended by section 
931(c) of the Medicare, Medicaid, and SCHIP Benefits Improvement and 
Protection Act of 2000, as enacted into law by section 1(a)(6) of 
Public Law 106-554, and section 1(c) of Public Law 107-360, is 
amended--
        (1) in paragraph (1), by striking ``and'' at the end;
        (2) in paragraph (2)--
            (A) by striking ``a final report'' and inserting ``a second 
        interim report''; and
            (B) by striking the period at the end and inserting ``; 
        and''; and
        (3) by adding at the end the following new paragraph:
        ``(3) a report on such evaluation not later than January 1, 
    2011.''.
    SEC. 304. IOM REPORTS ON BEST PRACTICES FOR CONDUCTING SYSTEMATIC 
      REVIEWS OF CLINICAL EFFECTIVENESS RESEARCH AND FOR DEVELOPING 
      CLINICAL PROTOCOLS.
    (a) Systematic Reviews of Clinical Effectiveness Research.--
        (1) Study.--Not later than 60 days after the date of the 
    enactment of this Act, the Secretary of Health and Human Services 
    shall enter into a contract with the Institute of Medicine of the 
    National Academies (in this section referred to as the 
    ``Institute'') under which the Institute shall conduct a study to 
    identify the methodological standards for conducting systematic 
    reviews of clinical effectiveness research on health and health 
    care in order to ensure that organizations conducting such reviews 
    have information on methods that are objective, scientifically 
    valid, and consistent.
        (2) Report.--Not later than 18 months after the effective date 
    of the contract under paragraph (1), the Institute, as part of such 
    contract, shall submit to the Secretary of Health and Human 
    Services and the appropriate committees of jurisdiction of Congress 
    a report containing the results of the study conducted under 
    paragraph (1), together with recommendations for such legislation 
    and administrative action as the Institute determines appropriate.
        (3) Participation.--The contract under paragraph (1) shall 
    require that stakeholders with expertise in conducting clinical 
    effectiveness research participate on the panel responsible for 
    conducting the study under paragraph (1) and preparing the report 
    under paragraph (2).
    (b) Clinical Protocols.--
        (1) Study.--Not later than 60 days after the date of the 
    enactment of this Act, the Secretary of Health and Human Services 
    shall enter into a contract with the Institute of Medicine of the 
    National Academies (in this section referred to as the 
    ``Institute'') under which the Institute shall conduct a study on 
    the best methods used in developing clinical practice guidelines in 
    order to ensure that organizations developing such guidelines have 
    information on approaches that are objective, scientifically valid, 
    and consistent.
        (2) Report.--Not later than 18 months after the effective date 
    of the contract under paragraph (1), the Institute, as part of such 
    contract, shall submit to the Secretary of Health and Human 
    Services and the appropriate committees of jurisdiction of Congress 
    a report containing the results of the study conducted under 
    paragraph (1), together with recommendations for such legislation 
    and administrative action as the Institute determines appropriate.
        (3) Participation.--The contract under paragraph (1) shall 
    require that stakeholders with expertise in making clinical 
    recommendations participate on the panel responsible for conducting 
    the study under paragraph (1) and preparing the report under 
    paragraph (2).
    (c) Funding.--Out of any funds in the Treasury not otherwise 
appropriated, there are appropriated for the period of fiscal years 
2009 and 2010, $3,000,000 to carry out this section.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.