[Congressional Record Volume 142, Number 49 (Wednesday, April 17, 1996)]
[Senate]
[Pages S3492-S3493]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          AMENDMENTS SUBMITTED

                                 ______


                THE HEALTH INSURANCE REFORM ACT OF 1996

                                 ______


                       THOMAS AMENDMENT NO. 3673

  (Ordered to lie on the table.)
  Mr. THOMAS submitted an amendment intended to be proposed by him to 
the bill (S. 1028) to provide increased access to health care benefits, 
to provide increased portability of health care benefits, to provide 
increased security of health care benefits, to increase the purchasing 
power of individuals and small employers, and for other purposes; as 
follows:

       At the end of the bill, insert the following new section:

     SEC.   . PAYMENTS TO HEALTH MAINTENANCE ORGANIZATIONS AND 
                   COMPETITIVE MEDICAL PLANS.

       (a) In General.--Section 1876(a) of the Social Security Act 
     (42 U.S.C. 1395mm(a)) is amended to read as follows:
       ``(a)(1)(A) The Secretary shall annually determine, and 
     shall announce (in a manner intended to provide notice to 
     interested parties) not later than August 1 before the 
     calendar year concerned--
       ``(i) a per capita rate of payment for individuals who are 
     enrolled under this section with an eligible organization 
     which has entered into a risk-sharing contract and who are 
     entitled to benefits under part A and enrolled under part B, 
     and
       ``(ii) a per capita rate of payment for individuals who are 
     so enrolled with such an organization and who are enrolled 
     under part B only.

     For purposes of this section, the term `risk-sharing 
     contract' means a contract entered into under subsection (g) 
     and the term `reasonable cost reimbursement contract' means a 
     contract entered into under subsection (h).
       ``(B) The annual per capita rate of payment for each 
     medicare payment area (as defined in paragraph (5)) shall be 
     equal to the adjusted capitation rate (as defined in 
     paragraph (4)), adjusted by the Secretary for--
       ``(i) individuals who are enrolled under this section with 
     an eligible organization which has entered into a risk-
     sharing contract and who are enrolled under part B only; and
       ``(ii) such risk factors as age, disability status, gender, 
     institutional status, and such other factors as the Secretary 
     determines to be appropriate so as to ensure actuarial 
     equivalence. The Secretary may add to, modify, or substitute 
     for such factors, if such changes will improve the 
     determination of actuarial equivalence.
       ``(C) In the case of an eligible organization with a risk-
     sharing contract, the Secretary shall make monthly payments 
     in advance and in accordance with the rate determined under 
     subparagraph (B) and except as provided in subsection (g)(2), 
     to the organization for each individual enrolled with the 
     organization under this section.
       ``(D) The Secretary shall establish a separate rate of 
     payment to an eligible organization with respect to any 
     individual determined to have end-stage renal disease and 
     enrolled with the organization. Such rate of payment shall be 
     actuarially equivalent to rates paid to other enrollees in 
     the payment area (or such other area as specified by the 
     Secretary).
       ``(E)(i) The amount of payment under this paragraph may be 
     retroactively adjusted to take into account any difference 
     between the actual number of individuals enrolled in the plan 
     under this section and the number of such individuals 
     estimated to be so enrolled in determining the amount of the 
     advance payment.
       ``(ii)(I) Subject to subclause (II), the Secretary may make 
     retroactive adjustments under clause (i) to take into account 
     individuals enrolled during the period beginning on the date 
     on which the individual enrolls with an eligible organization 
     (which has a risk-sharing contract under this section) under 
     a health benefit plan operated, sponsored, or contributed to 
     by the individual's employer or former employer (or the 
     employer or former employer of the individual's spouse) and 
     ending on the date on which the individual is enrolled in the 
     plan under this section, except that for purposes of making 
     such retroactive adjustments under this clause, such period 
     may not exceed 90 days.
       ``(II) No adjustment may be made under subclause (I) with 
     respect to any individual who does not certify that the 
     organization provided the individual with the explanation 
     described in subsection (c)(3)(E) at the time the individual 
     enrolled with the organization.
       ``(F)(i) At least 45 days before making the announcement 
     under subparagraph (A) for the year, the Secretary shall 
     provide for notice to eligible organizations of proposed 
     changes to be made in the methodology or benefit coverage 
     assumptions from the methodology and assumptions used in the 
     previous announcement and shall provide such organizations an 
     opportunity to comment on such proposed changes.
       ``(ii) In each announcement made under subparagraph (A) for 
     a year, the Secretary shall include an explanation of the 
     assumptions (including any benefit coverage assumptions) and 
     changes in methodology used in the announcement in sufficient 
     detail so that eligible organizations can compute per capita 
     rates of payment for individuals located in each county (or 
     equivalent medicare payment area) which is in whole or in 
     part within the service area of such an organization.
       ``(2) With respect to any eligible organization which has 
     entered into a reasonable cost reimbursement contract, 
     payments shall be made to such plan in accordance with 
     subsection (h)(2) rather than paragraph (1).
       ``(3) Subject to subsections (c)(2)(B)(ii) and (c)(7), 
     payments under a contract to an eligible organization under 
     paragraph (1) or (2) shall be instead of the amounts which 
     (in the absence of the contract) would be otherwise payable, 
     pursuant to sections 1814(b) and 1833(a), for services 
     furnished by or through the organization to individuals 
     enrolled with the organization under this section.
       ``(4)(A) For purposes of this section, the `adjusted 
     capitation rate' for a medicare payment area (as defined in 
     paragraph (5)) is equal to the greatest of the following:
       ``(i) The sum of--
       ``(I) the area-specific percentage for the year (as 
     specified under subparagraph (B) for the year) of the area-
     specific adjusted capitation rate for the year for the 
     medicare payment area, as determined under subparagraph (C), 
     and

[[Page S3493]]

       ``(II) the national percentage (as specified under 
     subparagraph (B) for the year) of the input-price-adjusted 
     national adjusted capitation rate for the year, as determined 
     under subparagraph (D),

     multiplied by a budget neutrality adjustment factor 
     determined under subparagraph (E).
       ``(ii) An amount equal to--
       ``(I) in the case of 1997, 80 percent of the input-price-
     adjusted national adjusted capitation rate for the year, as 
     determined under subparagraph (D); and
       ``(II) in the case of a succeeding year, the amount 
     specified in this clause for the preceding year increased by 
     the national average per capita growth percentage specified 
     under subparagraph (F) for that succeeding year.
       ``(iii) An amount equal to--
       ``(I) in the case of 1997, 102 percent of the annual per 
     capita rate of payment for 1996 for the medicare payment area 
     (determined under this subsection, as in effect on the day 
     before the date of enactment of the Health Insurance Reform 
     Act of 1995; and
       ``(II) in the case of a subsequent year, 102 percent of the 
     adjusted capitation rate under this subsection for the area 
     for the previous year.
       ``(B) For purposes of subparagraph (A)(i)--
       ``(i) for 1997, the `area-specific percentage' is 90 
     percent and the `national percentage' is 10 percent,
       ``(ii) for 1998, the `area-specific percentage' is 85 
     percent and the `national percentage' is 15 percent,
       ``(iii) for 1999, the `area-specific percentage' is 80 
     percent and the `national percentage' is 20 percent,
       ``(iv) for 2000, the `area-specific percentage' is 75 
     percent and the `national percentage' is 25 percent, and
       ``(v) for a year after 2000, the `area-specific percentage' 
     is 70 percent and the `national percentage' is 30 percent.
       ``(C) For purposes of subparagraph (A)(i), the area-
     specific adjusted capitation rate for a medicare payment 
     area--
       ``(i) for 1997, is the average of the annual per capita 
     rates of payment for the area for 1994 through 1996, after 
     adjusting the 1994 and 1995 rates of payment to 1996 dollars, 
     increased by the national average per capita growth 
     percentage for 1997 (as defined in subparagraph (F)); or
       ``(ii) for a subsequent year, is the area-specific adjusted 
     capitation rate for the previous year determined under this 
     subparagraph for the area, increased by the national average 
     per capita growth percentage for such subsequent year.
       ``(D)(i) For purposes of subparagraph (A)(i) and 
     subparagraph (A)(ii), the input-price-adjusted national 
     adjusted capitation rate for a medicare payment area for a 
     year is equal to the sum, for all the types of medicare 
     services (as classified by the Secretary), of the product 
     (for each such type of service) of--
       ``(I) the national standardized adjusted capitation rate 
     (determined under clause (ii)) for the year,
       ``(II) the proportion of such rate for the year which is 
     attributable to such type of services, and
       ``(III) an index that reflects (for that year and that type 
     of services) the relative input price of such services in the 
     area compared to the national average input price of such 
     services.

     In applying subclause (III), the Secretary shall, subject to 
     clause (iii), apply those indices under this title that are 
     used in applying (or updating) national payment rates for 
     specific areas and localities.
       ``(ii) In clause (i)(I), the `national standardized 
     adjusted capitation rate' for a year is equal to--
       ``(I) the sum (for all medicare payment areas) of the 
     product of (aa) the area-specific adjusted capitation rate 
     for that year for the area under subparagraph (C), and (bb) 
     the average number of standardized medicare beneficiaries 
     residing in that area in the year; divided by
       ``(II) the total average number of standardized medicare 
     beneficiaries residing in all the medicare payment areas for 
     that year.
       ``(iii) In applying this subparagraph for 1997--
       ``(I) medicare services shall be divided into 2 types of 
     services: part A services and part B services;
       ``(II) the proportions described in clause (i)(II) for such 
     types of services shall be--
       ``(aa) for part A services, the ratio (expressed as a 
     percentage) of the national average annual per capita rate of 
     payment for part A for 1996 to the total average annual per 
     capita rate of payment for parts A and B for 1996, and
       ``(bb) for part B services, 100 percent minus the ratio 
     described in item (aa);
       ``(III) for part A services, 70 percent of payments 
     attributable to such services shall be adjusted by the index 
     used under section 1886(d)(3)(E) to adjust payment rates for 
     relative hospital wage levels for hospitals located in the 
     payment area involved; and
       ``(IV) for part B services--
       ``(aa) 66 percent of payments attributable to such services 
     shall be adjusted by the index of the geographic area factors 
     under section 1848(e) used to adjust payment rates for 
     physicians' services furnished in the payment area, and
       ``(bb) of the remaining 34 percent of the amount of such 
     payments, 70 percent shall be adjusted by the index described 
     in subclause (III).

     The Secretary may continue to apply the rules described in 
     this clause (or similar rules) for 1998.
       ``(E) For each year, the Secretary shall compute a budget 
     neutrality adjustment factor so that the aggregate of the 
     payments under this section shall be equal to the aggregate 
     payments that would have been made under this section if the 
     area-specific percentage for the year had been 100 percent 
     and the national percentage had been 0 percent.
       ``(F) In this section, the `national average per capita 
     growth percentage' is equal to the percentage growth in 
     medicare fee-for-service per capita expenditures, which the 
     Secretary shall project for each year.
       ``(5)(A) In this section, except as provided in 
     subparagraph (C), the term `medicare payment area' means a 
     county, or equivalent area specified by the Secretary.
       ``(B) In the case of individuals who are determined to have 
     end stage renal disease, the medicare payment area shall be 
     specified by the Secretary.
       ``(C)(i) Upon written request of the Chief Executive 
     Officer of a State for a contract year (beginning after 1997) 
     made at least 7 months before the beginning of the year, the 
     Secretary shall adjust the system under which medicare 
     payment areas in the State are otherwise determined under 
     subparagraph (A) to a system which--
       ``(I) has a single statewide medicare payment area,
       ``(II) is a metropolitan based system described in clause 
     (iii), or
       ``(III) which consolidates into a single medicare payment 
     area noncontiguous counties (or equivalent areas described in 
     subparagraph (A)) within a State.

     Such adjustment shall be effective for payments for months 
     beginning with January of the year following the year in 
     which the request is received.
       ``(ii) In the case of a State requesting an adjustment 
     under this subparagraph, the Secretary shall adjust the 
     payment rates otherwise established under this section for 
     medicare payment areas in the State in a manner so that the 
     aggregate of the payments under this section in the State 
     shall be equal to the aggregate payments that would have been 
     made under this section for medicare payment areas in the 
     State in the absence of the adjustment under this 
     subparagraph.
       ``(iii) The metropolitan based system described in this 
     clause is one in which--
       ``(I) all the portions of each metropolitan statistical 
     area in the State or in the case of a consolidated 
     metropolitan statistical area, all of the portions of each 
     primary metropolitan statistical area within the consolidated 
     area within the State, are treated as a single medicare 
     payment area, and
       ``(II) all areas in the State that do not fall within a 
     metropolitan statistical area are treated as a single 
     medicare payment area.
       ``(iv) In clause (iii), the terms `metropolitan statistical 
     area', `consolidated metropolitan statistical area', and 
     `primary metropolitan statistical area' mean any area 
     designated as such by the Secretary of Commerce.
       ``(6) Subject to subsections (c)(2)(B)(ii) and (c)(7), if 
     an individual is enrolled under this section with an eligible 
     organization having a risk-sharing contract, only the 
     eligible organization shall be entitled to receive payments 
     from the Secretary under this title for services furnished to 
     the individual.''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on October 1, 1996.

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