[Congressional Record Volume 143, Number 91 (Wednesday, June 25, 1997)]
[House]
[Pages H4416-H4606]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
[[Page H4416]]
BALANCED BUDGET ACT OF 1997
Mr. KASICH. Mr. Speaker, pursuant to House Resolution 174, I call up
the bill (H.R. 2015) to provide for reconciliation pursuant to
subsections (b)(1) and (c) of section 105 of the concurrent resolution
on the budget for fiscal year 1998, and ask for its immediate
consideration.
The Clerk read the title of the bill.
The SPEAKER pro tempore (Mr. Dreier). Pursuant to House Resolution
174, the amendment printed in the Congressional Record numbered 1 is
adopted.
The text of H.R. 2015, as amended, is as follows:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Balanced Budget Act of
1997''.
SEC. 2. TABLE OF CONTENTS.
Title I--Committee on Agriculture.
Title II--Committee on Banking and Financial Services.
Title III--Committee on Commerce--Nonmedicare.
Title IV--Committee on Commerce--Medicare.
Title V--Committee on Education and the Workforce.
Tittle VI--Committee on Government Reform and Oversight.
Title VII--Committee on Transportation and Infrastructure.
Title VIII--Committee on Veterans' Affairs.
Title IX--Committee on Ways and Means--Nonmedicare.
Title X--Committee on Ways and Means--Medicare.
Title XI--Budget Enforcement.
TITLE I--COMMITTEE ON AGRICULTURE
SEC. 1001. EXEMPTION.
Section 6(o) of the Food Stamp Act of 1977 (7 U.S.C.
2015(o)) is amended--
(1) in paragraph (2)(D), by striking ``or (5)'' and
inserting ``(5), or (6)'';
(2) by redesignating paragraphs (5) and (6) as paragraphs
(6) and (7), respectively; and
(3) by inserting after paragraph (4) the following new
paragraph:
``(5) 15-percent exemption.--
``(A) Definitions.--In this paragraph:
``(i) Caseload.--The term `caseload' means the average
monthly number of individuals receiving food stamps during
the 12-month period ending the preceding June 30.
``(ii) Covered individual.--The term `covered individual'
means a food stamp recipient, or an individual denied
eligibility for food stamp benefits solely due to paragraph
(2), who--
``(I) is not eligible for an exception under paragraph (3);
``(II) does not reside in an area covered by a waiver
granted under paragraph (4);
``(III) is not complying with subparagraph (A), (B), or (C)
of paragraph (2);
``(IV) is not in the first 3 months of eligibility under
paragraph (2); and
``(V) is not receiving benefits under paragraph (6).
``(B) General rule.--Subject to subparagraphs (C) through
(F), a State agency may provide an exemption from the
requirements of paragraph (2) for covered individuals.
``(C) Fiscal year 1998.--Subject to subparagraph (E), for
fiscal year 1998, a State agency may provide a number of
exemptions such that the average monthly number of the
exemptions in effect during the fiscal year does not exceed
15 percent of the number of covered individuals in the State
in fiscal year 1998, as estimated by the Secretary, based on
the survey conducted to carry out section 16(c) for fiscal
year 1996 and such other factors as the Secretary considers
appropriate due to the timing and limitations of the survey.
``(D) Subsequent fiscal years.--Subject to subparagraphs
(E) and (F), for fiscal year 1999 and each subsequent fiscal
year, a State agency may provide a number of exemptions such
that the average monthly number of the exemptions in effect
during the fiscal year does not exceed 15 percent of the
number of covered individuals in the State, as estimated by
the Secretary under subparagraph (C), adjusted by the
Secretary to reflect changes in the State's caseload and the
Secretary's estimate of changes in the proportion of food
stamp recipients covered by waivers granted under paragraph
(4).
``(E) Caseload adjustments.--The Secretary shall adjust the
number of individuals estimated for a State under
subparagraph (C) or (D) during a fiscal year if the number of
food stamp recipients in the State varies by a significant
number from the caseload, as determined by the Secretary.
``(F) Exemption adjustments.--During fiscal year 1999 and
each subsequent fiscal year, the Secretary shall increase or
decrease the number of individuals who may be granted an
exemption by a State agency to the extent that the average
monthly number of exemptions in effect in the State for the
preceding fiscal year is greater or less than the average
monthly number of exemptions estimated for the State agency
during such preceding fiscal year.
``(G) Reporting requirement.--A State agency shall submit
such reports to the Secretary as the Secretary determines are
necessary to ensure compliance with this paragraph.''.
SEC. 1002. ADDITIONAL FUNDING FOR EMPLOYMENT AND TRAINING.
(a) In General.--Section 16(h) of the Food Stamp Act of
1977 (7 U.S.C. 2025(h)) is amended--
(1) by striking paragraph (1) and inserting the following
new paragraph:
``(1) In general.--
``(A) Amounts.--To carry out employment and training
programs, the Secretary shall reserve for allocation to State
agencies, to remain available until expended, from funds made
available for each fiscal year under section 18(a)(1) the
amount of--
``(i) for fiscal year 1996, $75,000,000;
``(ii) for fiscal year 1997, $79,000,000;
``(iii) for fiscal year 1998, $221,000,000;
``(iv) for fiscal year 1999, $224,000,000;
``(v) for fiscal year 2000, $226,000,000;
``(vi) for fiscal year 2001, $228,000,000; and
``(vii) for fiscal year 2002, $210,000,000.
``(B) Limitations.--The Secretary shall ensure that--
``(i) the funds provided in this subparagraph shall not be
used for food stamp recipients who receive benefits under a
State program funded under part A of title IV of the Social
Security Act (42 U.S.C. 601 et seq.); and
``(ii) not less than 80 percent of the funds provided in
this subparagraph shall be used by a State agency for
employment and training programs under section 6(d)(4), other
than job search or job search training programs, for food
stamp recipients not excepted by section 6(o)(3).
``(C) Allocation.--
``(i) Allocation formula.--The Secretary shall allocate the
amounts reserved under subparagraph (A) among the State
agencies using a reasonable formula, as determined and
adjusted by the Secretary each fiscal year, to reflect
changes in each State's caseload (as defined in section
6(o)(5)(A)) that reflects the proportion of food stamp
recipients who reside in each State--
``(I) who are not eligible for an exception under section
6(o)(3); and
``(II) who do not reside in an area subject to the waiver
granted by the Secretary under section 6(o)(4), if the State
agency does not provide employment and training services in
the area to food stamp recipients not excepted by section
6(o)(3).
``(ii) Reporting requirement.--A State agency shall submit
such reports to the Secretary as the Secretary determines are
necessary to ensure compliance with this paragraph.''; and
``(D) Reallocation.--
``(i) Notification.--A State agency shall promptly notify
the Secretary if the State agency determines that it will not
expend all of the funds allocated to it under subparagraph
(B).
``(ii) Reallocation.--On notification under clause (i), the
Secretary shall reallocate the funds that the State agency
will not expend as the Secretary considers appropriate and
equitable.
``(E) Minimum allocation.--Notwithstanding subparagraphs
(A) through (C), the Secretary shall ensure that each State
agency operating an employment and training program shall
receive not less than $50,000 for each fiscal year.
``(F) Maintenance of effort.--To receive the additional
funding under subparagraph (A), as provided by the amendment
made by section 1002 of the Balanced Budget Act of 1997, a
State agency shall maintain the expenditures of the State
agency for employment and training programs and workfare
programs for any fiscal year under paragraph (2), and
administrative expenses under section 20(g)(1), at a level
that is not less than the level of the expenditures by the
State agency to carry out the programs for fiscal year
1996.'';
(2) by redesignating paragraphs (2) through (5) as
paragraphs (3) through (6), respectively;
(3) by inserting after paragraph (1) the following new
paragraph:
``(2) Report to congress on additional funding.--Beginning
one year after the date of the enactment of this paragraph,
the Secretary shall submit an annual report to the Committee
on Agriculture of the House of Representatives and the
Committee on Agriculture, Nutrition, and Forestry of the
Senate regarding whether the additional funding provided
under paragraph (1)(A) has been utilized by State agencies to
increase the number of work slots in their employment and
training programs and workfare for recipients subject to
section 6(o) in the most efficient and effective manner.'';
and
(4) in paragraph (3) (as so redesignated), by striking
``paragraph (3)'' and inserting ``paragraph (4)''.
(b) Conforming Amendments.--(1) Subsection
(b)(1)(B)(iv)(III)(hh) of section 17 of the Food Stamp Act of
1977 (7 U.S.C. 2026) is amended by striking ``(h)(2), or
(h)(3) of section 16'' and inserting ``(h)(3), or (h)(4) of
section 16''.
(2) Subsection (d)(1)(B)(ii) of section 22 of such Act (7
U.S.C. 2031) is amended by striking ``(h)(2), and (h)(3) of
section 16'' and inserting ``(h)(3), and (h)(4) of section
16''.
SEC. 1003. AUTHORIZING USE OF NONGOVERNMENTAL PERSONNEL IN
MAKING DETERMINATIONS OF ELIGIBILITY FOR
BENEFITS UNDER THE FOOD STAMP PROGRAM.
(a) In General.--Notwithstanding any other provision of
law, no provision of law shall be construed as preventing any
State (as defined in section 3(m) of the Food Stamp Act of
1977 (7 U.S.C. 2012(m))) from allowing eligibility
determinations described in subsection (b) to be made by an
entity that is not a State or local government, or by an
individual who is not an employee of a State or
[[Page H4417]]
local government, which meets such qualifications as the
State determines. For purposes of any Federal law, such
determinations shall be considered to be made by the State
and by a State agency.
(b) Eligibility Determinations.--An eligibility
determination described in this subsection is a determination
of eligibility of individuals or households to receive
benefits under the food stamp program as defined in section
3(h) of the Food Stamp Act of 1977 (7 U.S.C. 2012(h)).
(c) Construction.--Nothing in this section shall be
construed as affecting--
(1) the conditions for eligibility for benefits (including
any conditions relating to income or resources);
(2) the rights to challenge determinations regarding
eligibility or rights to benefits; and
(3) determinations regarding quality control or error
rates.
TITLE II--COMMITTEE ON BANKING AND FINANCIAL SERVICES
SEC. 2001. TABLE OF CONTENTS.
The table of contents for this title is as follows:
TITLE II--COMMITTEE ON BANKING AND FINANCIAL SERVICES
Sec. 2001. Table of contents.
Sec. 2002. Extension of foreclosure avoidance and borrower assistance
provisions for FHA single family housing mortgage
insurance program.
Sec. 2003. Adjustment of maximum monthly rents for certain dwelling
units in new construction and substantial or moderate
rehabilitation projects assisted under section 8 rental
assistance program.
Sec. 2004. Adjustment of maximum monthly rents for non-turnover
dwelling units assisted under section 8 rental assistance
program.
SEC. 2002. EXTENSION OF FORECLOSURE AVOIDANCE AND BORROWER
ASSISTANCE PROVISIONS FOR FHA SINGLE FAMILY
HOUSING MORTGAGE INSURANCE PROGRAM.
Section 407 of The Balanced Budget Downpayment Act, I (12
U.S.C. 1710 note) is amended--
(1) in subsection (c)--
(A) by striking ``only''; and
(B) by inserting ``, on, or after'' after ``before''; and
(2) by striking subsection (e).
SEC. 2003. ADJUSTMENT OF MAXIMUM MONTHLY RENTS FOR CERTAIN
DWELLING UNITS IN NEW CONSTRUCTION AND
SUBSTANTIAL OR MODERATE REHABILITATION PROJECTS
ASSISTED UNDER SECTION 8 RENTAL ASSISTANCE
PROGRAM.
The third sentence of section 8(c)(2)(A) of the United
States Housing Act of 1937 (42 U.S.C. 1437f(c)(2)(A)) is
amended by inserting before the period at the end the
following: ``, and during fiscal year 1999 and thereafter''.
SEC. 2004. ADJUSTMENT OF MAXIMUM MONTHLY RENTS FOR NON-
TURNOVER DWELLING UNITS ASSISTED UNDER SECTION
8 RENTAL ASSISTANCE PROGRAM.
The last sentence of section 8(c)(2)(A) of the United
States Housing Act of 1937 is amended by inserting before the
period at the end the following: ``, and during fiscal year
1999 and thereafter''.
TITLE III--COMMITTEE ON COMMERCE-NONMEDICARE
Subtitle A--Nuclear Regulatory Commission Annual Charges
SEC. 3001. NUCLEAR REGULATORY COMMISSION ANNUAL CHARGES.
Section 6101(a)(3) of the Omnibus Budget Reconciliation Act
of 1990 (42 U.S.C. 2214(a)(3)) is amended by striking
``September 30, 1998'' and inserting ``September 30, 2002''.
Subtitle B--Lease of Excess Strategic Petroleum Reserve Capacity
SEC. 3101. LEASE OF EXCESS STRATEGIC PETROLEUM RESERVE
CAPACITY.
(a) Amendment.--Part B of title I of the Energy Policy and
Conservation Act (42 U.S.C. 6231 et seq.) is amended by
adding at the end the following:
``USE OF UNDERUTILIZED FACILITIES
``Sec. 168. (a) Authority.--Notwithstanding any other
provision of this title, the Secretary, by lease or
otherwise, for any term and under such other conditions as
the Secretary considers necessary or appropriate, may store
in underutilized Strategic Petroleum Reserve facilities
petroleum product owned by a foreign government or its
representative. Petroleum products stored under this section
are not part of the Strategic Petroleum Reserve and may be
exported without license from the United States.
``(b) Protection of Facilities.--All agreements entered
into pursuant to subsection (a) shall contain provisions
providing for fees to fully compensate the United States for
all costs of storage and removals of petroleum products,
including the cost of replacement facilities necessitated as
a result of any withdrawals.
``(c) Access to Stored Oil.--The Secretary shall ensure
that agreements to store petroleum products for foreign
governments or their representatives do not affect the
ability of the United States to withdraw, distribute, or sell
petroleum from the Strategic Petroleum Reserve in response to
an energy emergency or to the obligations of the United
States under the Agreement on an International Energy
Program.
``(d) Availability of Funds.--Funds collected through the
leasing of Strategic Petroleum Reserve facilities authorized
by subsection (a) after September 30, 2002, shall be used by
the Secretary of Energy without further appropriation for the
purchase of oil for, and operation and maintenance costs of,
the Strategic Petroleum Reserve.''.
(b) Table of Contents Amendment.--The table of contents of
part B of title I of the Energy Policy and Conservation Act
is amended by adding at the end the following:
``Sec. 168. Use of underutilized facilities.''.
Subtitle C--Sale of DOE Assets
SEC. 3201. SALE OF DOE SURPLUS URANIUM ASSETS.
(a) In General.--The Secretary of Energy shall, during the
period fiscal year 1999 through fiscal year 2002, sell 3.2
million pounds per year of natural and low-enriched uranium
that the President has determined is not necessary for
national security needs. Such sales shall be--
(1) made for delivery after January 1, 1999;
(2) subject to a determination, for the period fiscal year
1999 through fiscal year 2002, by the Secretary under section
3112(d)(2)(B) of the USEC Privatization Act (42 U.S.C. 2297h-
10(d)(2)(B)); and
(3) made at a price not less than the fair market value of
the uranium and in a manner that maximizes proceeds to the
Treasury.
The Secretary shall receive the proceeds from such sale in
the period fiscal year 1999 through fiscal year 2002 and
shall deposit such proceeds in the General Fund of the
Treasury.
(b) Costs.--The costs of making the sales required by
subsection (a) shall be covered by the unobligated balances
of appropriations of the Department of Energy.
Subtitle D--Communications
SEC. 3301. SPECTRUM AUCTIONS.
(a) Extension and Expansion of Auction Authority.--
(1) Amendments.--Section 309(j) of the Communications Act
of 1934 (47 U.S.C. 309(j)) is amended--
(A) by striking paragraphs (1) and (2) and inserting in
lieu thereof the following:
``(1) General authority.--If, consistent with the
obligations described in paragraph (6)(E), mutually exclusive
applications are accepted for any initial license or
construction permit which will involve an exclusive use of
the electromagnetic spectrum, then the Commission shall grant
such license or permit to a qualified applicant through a
system of competitive bidding that meets the requirements of
this subsection.
``(2) Exemptions.--The competitive bidding authority
granted by this subsection shall not apply to licenses or
construction permits issued by the Commission--
``(A) that, as the result of the Commission carrying out
the obligations described in paragraph (6)(E), are not
mutually exclusive;
``(B) for public safety radio services, including private
internal radio services used by non-Government entities,
that--
``(i) protect the safety of life, health, or property; and
``(ii) are not made commercially available to the public;
``(C) for initial licenses or construction permits assigned
by the Commission to existing terrestrial broadcast licensees
for new terrestrial digital television services; or
``(D) for public telecommunications services, as defined in
section 397(14) of the Communications Act of 1934 (47 U.S.C.
397(14)), when the license application is for channels
reserved for noncommercial use.'';
(B) in paragraph (3)--
(i) by inserting after the second sentence the following
new sentence: ``The Commission shall, directly or by
contract, provide for the design and conduct (for purposes of
testing) of competitive bidding using a contingent
combinatorial bidding system that permits prospective bidders
to bid on combinations or groups of licenses in a single bid
and to enter multiple alternative bids within a single
bidding round.'';
(ii) by striking ``and'' at the end of subparagraph (C);
(iii) by striking the period at the end of subparagraph (D)
and inserting ``; and''; and
(iv) by adding at the end the following new subparagraph:
``(E) ensuring that, in the scheduling of any competitive
bidding under this subsection, an adequate period is
allowed--
``(i) before issuance of bidding rules, to permit notice
and comment on proposed auction procedures; and
``(ii) after issuance of bidding rules, to ensure that
interested parties have a sufficient time to develop business
plans, assess market conditions, and evaluate the
availability of equipment for the relevant services.'';
(C) in paragraph (4)--
(i) by striking ``and'' at the end of subparagraph (D);
(ii) by striking the period at the end of subparagraph (E)
and inserting ``; and''; and
(iii) by adding at the end the following new subparagraph:
``(F) establish methods by which a minimum bid, in an
amount that is more than nominal in relation to the value of
the public spectrum resource being made available, will be
required to obtain any license or permit being assigned
pursuant to the competitive bidding.'';
(D) in paragraph (8)--
(i) by striking subparagraph (B); and
(ii) by redesignating subparagraph (C) as subparagraph (B);
(E) in paragraph (11), by striking ``September 30, 1998''
and inserting ``December 31, 2002''; and
[[Page H4418]]
(F) in paragraph (13)(F), by striking ``September 30,
1998'' and inserting ``the date of enactment of the Balanced
Budget Act of 1997''.
(2) Conforming amendment.--Subsection (i) of section 309 of
the Communications Act of 1934 (47 U.S.C. 309(i)) is
repealed.
(3) Effective date.--The amendment made by paragraph (1)(A)
shall not apply with respect to any license or permit for
which the Federal Communications Commission has accepted
mutually exclusive applications on or before the date of
enactment of this Act.
(b) Commission Obligation To Make Additional Spectrum
Available by Auction.--
(1) In general.--The Federal Communications Commission
shall complete all actions necessary to permit the
assignment, by September 30, 2002, by competitive bidding
pursuant to section 309(j) of the Communications Act of 1934
(47 U.S.C. 309(j)) of licenses for the use of bands of
frequencies that--
(A) individually span not less than 25 megahertz, unless a
combination of smaller bands can, notwithstanding the
provisions of paragraph (7) of such section, reasonably be
expected to produce greater receipts;
(B) in the aggregate span not less than 100 megahertz;
(C) are located below 3 gigahertz;
(D) have not, as of the date of enactment of this Act--
(i) been designated by Commission regulation for assignment
pursuant to such section;
(ii) been identified by the Secretary of Commerce pursuant
to section 113 of the National Telecommunications and
Information Administration Organization Act;
(iii) been allocated for Federal Government use pursuant to
section 305 of the Communications Act of 1934 (47 U.S.C.
305);
(iv) been designated in section 3303 of this Act; or
(v) been allocated for unlicensed use pursuant to part 15
of the Commission's regulations (47 C.F.R. Part 15), if the
competitive bidding for licenses would interfere with
operation of end-user products permitted under such
regulations;
(E) notwithstanding section 115(b)(1)(B) of the National
Telecommunications and Information Administration
Organization Act (47 U.S.C. 925(b)(1)(B)) or any proposal
pursuant to such section, include frequencies at 1,710-1,755
megahertz;
(F) include frequencies at 2,110-2,150 megahertz; and
(G) include 15 megahertz from within the bands of
frequencies at 1,990-2,110 megahertz.
(2) Schedule for assignment of 1,710-1,755 megahertz.--The
Commission shall commence competitive bidding for the
commercial licenses pursuant to paragraph (1)(E) after
January 1, 2001. The Commission shall complete the assignment
of such commercial licenses, and report to the Congress the
total revenues from such competitive bidding, by September
30, 2002.
(3) Use of bands at 2,110-2,150 megahertz.--The Commission
shall reallocate spectrum located at 2,110-2,150 megahertz
for assignment by competitive bidding unless the Commission
determines that auction of other spectrum (A) better serves
the public interest, convenience, and necessity, and (B) can
reasonably be expected to produce greater receipts. If the
Commission makes such a determination, then the Commission
shall, within 2 years after the date of enactment of this
Act, identify an alternative 40 megahertz, and report to the
Congress an identification of such alternative 40 megahertz
for assignment by competitive bidding.
(4) Use of 15 megahertz from bands at 1,990-2,110
megahertz.--The Commission shall reallocate 15 megahertz from
spectrum located at 1,990-2,110 megahertz for assignment by
competitive bidding unless the President determines such
spectrum cannot be reallocated due to the need to protect
incumbent Federal systems from interference, and that
allocation of other spectrum (A) better serves the public
interest, convenience, and necessity, and (B) can reasonably
be expected to produce greater receipts. If the President
makes such a determination, then the President shall, within
2 years after the date of enactment of this Act, identify
alternative bands of frequencies totalling 15 megahertz, and
report to the Congress an identification of such alternative
bands for assignment by competitive bidding.
(5) Criteria for reassignment.--In making available bands
of frequencies for competitive bidding pursuant to paragraph
(1), the Commission shall--
(A) seek to promote the most efficient use of the spectrum;
(B) take into account the cost to incumbent licensees of
relocating existing uses to other bands of frequencies or
other means of communication; and
(C) comply with the requirements of international
agreements concerning spectrum allocations.
(6) Notification to ntia.--The Commission shall notify the
Secretary of Commerce if--
(A) the Commission is not able to provide for the effective
relocation of incumbent licensees to bands of frequencies
that are available to the Commission for assignment; and
(B) the Commission has identified bands of frequencies that
are--
(i) suitable for the relocation of such licensees; and
(ii) allocated for Federal Government use, but that could
be reallocated pursuant to part B of the National
Telecommunications and Information Administration
Organization Act (as amended by this Act).
(c) Identification and Reallocation of Frequencies.--The
National Telecommunications and Information Administration
Organization Act (47 U.S.C. 901 et seq.) is amended--
(1) in section 113, by adding at the end the following new
subsection:
``(f) Additional Reallocation Report.--If the Secretary
receives a notice from the Commission pursuant to section
3301(b)(3) of the Balanced Budget Act of 1997, the Secretary
shall prepare and submit to the President, the Commission,
and the Congress a report recommending for reallocation for
use other than by Federal Government stations under section
305 of the 1934 Act (47 U.S.C. 305), bands of frequencies
that are suitable for the uses identified in the Commission's
notice. The Commission shall, not later than one year after
receipt of such report, prepare, submit to the President and
the Congress, and implement, a plan for the immediate
allocation and assignment of such frequencies under the 1934
Act to incumbent licencees described in section 3301(b)(3) of
the Balanced Budget Act of 1997.''; and
(2) in section 114(a)(1), by striking ``(a) or (d)(1)'' and
inserting ``(a), (d)(1), or (f)''.
(d) Identification and Reallocation of Auctionable
Frequencies.--The National Telecommunications and Information
Administration Organization Act (47 U.S.C. 901 et seq.) is
amended--
(1) in section 113(b)--
(A) by striking the heading of paragraph (1) and inserting
``Initial reallocation report'';
(B) by inserting ``in the first report required by
subsection (a)'' after ``recommend for reallocation'' in
paragraph (1);
(C) by inserting ``or (3)'' after ``paragraph (1)'' each
place it appears in paragraph (2); and
(D) by inserting after paragraph (2) the following new
paragraph:
``(3) Second reallocation report.--In accordance with the
provisions of this section, the Secretary shall recommend for
reallocation in the second report required by subsection (a),
for use other than by Federal Government stations under
section 305 of the 1934 Act (47 U.S.C. 305), a band or bands
of frequencies that--
``(A) in the aggregate span not less than 20 megahertz;
``(B) individually span not less than 20 megahertz, unless
a combination of smaller bands can reasonably be expected to
produce greater receipts;
``(C) are located below 3 gigahertz; and
``(D) meet the criteria specified in paragraphs (1) through
(5) of subsection (a).''; and
(2) in section 115--
(A) in subsection (b), by striking ``the report required by
section 113(a)'' and inserting ``the initial reallocation
report required by section 113(a)''; and
(B) by adding at the end the following new subsection:
``(c) Allocation and Assignment of Frequencies Identified
in the Second Reallocation Report.--With respect to the
frequencies made available for reallocation pursuant to
section 113(b)(3), the Commission shall, not later than one
year after receipt of the second reallocation report required
by such section, prepare, submit to the President and the
Congress, and implement, a plan for the immediate allocation
and assignment under the 1934 Act of all such frequencies in
accordance with section 309(j) of such Act.''.
SEC. 3302. AUCTION OF RECAPTURED BROADCAST TELEVISION
SPECTRUM.
Section 309(j) of the Communications Act of 1934 (47 U.S.C.
309(j)) is amended by adding at the end the following new
paragraph:
``(14) Auction of recaptured broadcast television
spectrum.--
``(A) Limitations on terms of terrestrial television
broadcast licenses.--A television license that authorizes
analog television services may not be renewed to authorize
such service for a period that extends beyond December 31,
2006. The Commission shall have the authority to grant by
regulation an extension of such date to licensees in a market
if the Commission determines that more than 5 percent of
households in such market continue to rely exclusively on
over-the-air terrestrial analog television signals.
``(B) Spectrum reversion and resale.--
``(i) The Commission shall ensure that, when the authority
to broadcast analog television services under a license
expires pursuant to subparagraph (A), each licensee shall
return spectrum according to the Commission's direction and
the Commission shall reclaim such spectrum.
``(ii) Licensees for new services occupying spectrum
reclaimed pursuant to clause (i) shall be selected in
accordance with this subsection. The Commission shall
complete the assignment of such licenses, and report to the
Congress the total revenues from such competitive bidding, by
September 30, 2002.
``(C) Certain limitations on qualified bidders
prohibited.--In prescribing any regulations relating to the
qualification of bidders for spectrum reclaimed pursuant to
subparagraph (B)(i), the Commission shall not--
``(i) preclude any party from being a qualified bidder for
spectrum that is allocated for any use that includes digital
television service on the basis of--
``(I) the Commission's duopoly rule (47 C.F.R. 73.3555(b));
or
``(II) the Commission's newspaper cross-ownership rule (47
C.F.R. 73.3555(d)); or
``(ii) apply either such rule to preclude such a party that
is a successful bidder in a
[[Page H4419]]
competitive bidding for such spectrum from using such
spectrum for digital television service.
``(D) Definitions.--As used in this paragraph:
``(i) The term `digital television service' means
television service provided using digital technology to
enhance audio quality and video resolution, as further
defined in the Memorandum Opinion, Report, and Order of the
Commission entitled `Advanced Television Systems and Their
Impact Upon the Existing Television Service', MM Docket No.
87-268 and any subsequent Commission proceedings dealing with
digital television.
``(ii) The term `analog television service' means service
provided pursuant to the transmission standards prescribed by
the Commission in section 73.682(a) of its regulation (47 CFR
73.682(a)).''.
SEC. 3303. ALLOCATION AND ASSIGNMENT OF NEW PUBLIC SAFETY AND
COMMERCIAL LICENSES.
(a) In General.--The Federal Communications Commission
shall, not later than January 1, 1998, allocate on a
national, regional, or market basis, from radio spectrum
between 746 megahertz and 806 megahertz--
(1) 24 megahertz of that spectrum for public safety
services according to the terms and conditions established by
the Commission, unless the Commission determines that the
needs for public safety services can be met in particular
areas with allocations of less than 24 megahertz; and
(2) the remainder of that spectrum for commercial purposes
to be assigned by competitive bidding in accordance with
section 309(j).
(b) Assignment.--The Commission shall--
(1) assign the licenses for public safety created pursuant
to subsection (a) no later than March 31, 1998;
(2) commence competitive bidding for the commercial
licenses created pursuant to subsection (a) after January 1,
2001; and
(3) complete competitive bidding for such commercial
licenses, and report to the Congress the total revenues from
such competitive bidding, by September 30, 2002.
(c) Licensing of Unused Frequencies for Public Safety Radio
Services.--
(1) Use of unused channels for public safety.--It shall be
the policy of the Commission, notwithstanding any other
provision of this Act or any other law, to waive whatever
licensee eligibility and other requirements (including
bidding requirements) are applicable in order to permit the
use of unassigned frequencies for public safety purposes by a
State or local governmental agency upon a showing that--
(A) no other existing satisfactory public safety channel is
immediately available to satisfy the requested use;
(B) the proposed use is technically feasible without
causing harmful interference to existing stations in the
frequency band entitled to protection from such interference
under the rules of the Commission; and
(C) use of the channel for public safety purposes is
consistent with other existing public safety channel
allocations in the geographic area of proposed use.
(2) Applicability.--Paragraph (1) shall apply to any
application that is pending before the Federal Communications
Commission, or that is not finally determined under either
section 402 or 405 of the Communications Act of 1934 (47
U.S.C. 402, 405) on May 15, 1997, or that is filed after such
date.
(d) Conditions on Licenses.--With respect to public safety
and commercial licenses granted pursuant to this subsection,
the Commission shall--
(1) establish interference limits at the boundaries of the
spectrum block and service area;
(2) establish any additional technical restrictions
necessary to protect full-service analog television service
and digital television service during a transition to digital
television service; and
(3) permit public safety and commercial licensees--
(A) to aggregate multiple licenses to create larger
spectrum blocks and service areas; and
(B) to disaggregate or partition licenses to create smaller
spectrum blocks or service areas.
(e) Protection of Qualifying Low-Power Stations.--After
making any allocation or assignment under this section the
Commission shall seek to assure that each qualifying low-
power television station is assigned a frequency below 746
megahertz to permit the continued operation of such station.
(f) Definitions.--For purposes of this section:
(1) Commission.--The term ``Commission'' means the Federal
Communications Commission.
(2) Digital television service.--The term ``digital
television service'' means television service provided using
digital technology to enhance audio quality and video
resolution, as further defined in the Memorandum Opinion,
Report, and Order of the Commission entitled `Advanced
Television Systems and Their Impact Upon the Existing
Television Service', MM Docket No. 87-268 and any subsequent
Commission proceedings dealing with digital television.
(3) Analog television service.--The term ``analog
television service'' means services provided pursuant to the
transmission standards prescribed by the Commission in
section 73.682(a) of its regulation (47 CFR 73.682(a)).
(4) Public safety services.--The term ``public safety
services'' means services--
(A) the sole or principal purpose of which is to protect
the safety of life, health, or property;
(B) that are provided--
(i) by State or local government entities; or
(ii) by nongovernmental, private organizations that are
authorized by a governmental entity whose primary mission is
the provision of such services; and
(C) that are not made commercially available to the public
by the provider.
(5) Service area.--The term ``service area'' means the
geographic area over which a licensee may provide service and
is protected from interference.
(6) Spectrum block.--The term ``spectrum block'' means the
range of frequencies over which the apparatus licensed by the
Commission is authorized to transmit signals.
(7) Qualifying low-power television stations.--A station is
a qualifying low-power television station if, during the 90
days preceding the date of enactment of this Act--
(A) such station broadcast a minimum of 18 hours per day;
(B) such station broadcast an average of at least 3 hours
per week of programming that was produced within the
community of license of such station; and
(C) such station was in compliance with the requirements
applicable to low-power television stations.
SEC. 3304. ADMINISTRATIVE PROCEDURES FOR SPECTRUM AUCTIONS.
(a) Expedited Procedures.--The rules governing competitive
bidding under this subtitle shall be effective immediately
upon publication in the Federal Register notwithstanding
section 553(d), 801(a)(3), and 806(a) of title 5, United
States Code. Chapter 6 of such title, and sections 3507 and
3512 of title 44, United States Code, shall not apply to such
rules and competitive bidding procedures governing
frequencies assigned under this subtitle. Notwithstanding
section 309(b) of the Communications Act of 1934 (47 U.S.C.
309(b)), no application for an instrument of authorization
for such frequencies shall be granted by the Commission
earlier than 7 days following issuance of public notice by
the Commission of the acceptance for filing of such
application or of any substantial amendment thereto.
Notwithstanding section 309(d)(1) of such Act (47 U.S.C.
309(d)(1)), the Commission may specify a period (no less than
5 days following issuance of such public notice) for the
filing of petitions to deny any application for an instrument
of authorization for such frequencies.
(b) Deadline for Collection.--The Commission shall conduct
the competitive bidding under this subtitle in a manner that
ensures that all proceeds of the bidding are deposited in
accordance with section 309(j)(8) of the Communications Act
of 1934 not later September 30, 2002.
SEC. 3305. UNIVERSAL SERVICE FUND PAYMENT SCHEDULE.
(a) Acceleration of Payments.--There shall be available in
fiscal year 2001 from funds in the Treasury not otherwise
appropriated $2,000,000,000 to the universal service fund
under part 54 of the Federal Communications Commission's
regulations (47 C.F.R. Part 54) in addition to any other
revenues required to be collected under such part.
(b) Limitation on Expenditures.--The outlays of the
universal service fund under part 54 of the Federal
Communications Commission's regulations (47 C.F.R. Part 54)
in fiscal year 2002 shall not exceed the amount of revenue
required to be collected in such fiscal year, less
$2,000,000,000.
SEC. 3306. INQUIRY REQUIRED.
The Federal Communications Commission shall, not later than
July 1, 1997, initiate the inquiry required by section
309(j)(12) of the Communications Act of 1934 (47 U.S.C.
309(j)(12)) for the purposes of collecting the information
required for its report under each of subparagraphs (A)
through (E) of such section, and shall keep the Congress
fully and currently informed with respect to the progress of
such inquiry.
Subtitle E--Medicaid
SEC. 3400. TABLE OF CONTENTS OF SUBTITLE; REFERENCES.
(a) Table of Contents of Subtitle.--The table of contents
of this subtitle is as follows:
Sec. 3400. Table of contents of subtitle; references.
Chapter 1--State Flexibility
SUBCHAPTER A--USE OF MANAGED CARE
Sec. 3401. State options to provide benefits through managed care
entities.
Sec. 3402. Elimination of 75:25 restriction on risk contracts.
Sec. 3403. Primary care case management services as State option
without need for waiver.
Sec. 3404. Change in threshold amount for contracts requiring
Secretary's prior approval.
SUBCHAPTER B--PAYMENT METHODOLOGY
Sec. 3411. Flexibility in payment methods for hospital, nursing
facility, and ICF/MR services; flexibility for home
health.
Sec. 3412. Payment for Federally qualified health center services.
Sec. 3413. Treatment of State taxes imposed on certain hospitals that
provide free care.
SUBCHAPTER C--ELIGIBILITY
Sec. 3421. State option of continuous eligibility for 12 months;
clarification of State option to cover children.
[[Page H4420]]
Sec. 3422. Payment of part or all of Medicare part B premium amount for
certain low-income individuals.
Sec. 3423. Penalty for fraudulent eligibility.
Sec. 3424. Treatment of certain settlement payments.
SUBCHAPTER D--PROGRAMS OF ALL-INCLUSIVE CARE FOR THE ELDERLY (PACE)
Sec. 3431. Establishment of PACE program as medicaid State option.
Sec. 3432. Coverage of PACE under the medicare program.
Sec. 3433. Effective date; transition.
Sec. 3434. Study and reports.
SUBCHAPTER E--BENEFITS
Sec. 3441. Elimination of requirement to pay for private insurance.
Sec. 3442. Permitting same copayments in health maintenance
organizations as in fee-for-service.
Sec. 3443. Physician qualification requirements.
Sec. 3444. Elimination of requirement of prior institutionalization
with respect to habilitation services furnished under a
waiver for home or community-based services.
Sec. 3445. Benefits for services of physician assistants.
Sec. 3446. Study and report on actuarial value of EPSDT benefit.
SUBCHAPTER F--ADMINISTRATION
Sec. 3451. Elimination of duplicative inspection of care requirements
for ICFS/MR and mental hospitals.
Sec. 3452. Alternative sanctions for noncompliant ICFS/MR.
Sec. 3453. Modification of MMIS requirements.
Sec. 3454. Facilitating imposition of State alternative remedies on
noncompliant nursing facilities.
Sec. 3455. Medically accepted indication.
Sec. 3456. Continuation of State-wide section 1115 medicaid waivers.
Sec. 3457. Authorizing administrative streamlining and privatizing
modifications under the medicaid program.
Sec. 3458. Extension of moratorium.
Chapter 2--Quality Assurance
Sec. 3461. Requirements to ensure quality of and access to care under
managed care plans.
Sec. 3462. Solvency standards for certain health maintenance
organizations.
Sec. 3463. Application of prudent layperson standard for emergency
medical condition and prohibition of gag rule
restrictions.
Sec. 3464. Additional fraud and abuse protections in managed care.
Sec. 3465. Grievances under managed care plans.
Sec. 3466. Standards relating to access to obstetrical and
gynecological services under managed care plans.
Chapter 3--Federal Payments
Sec. 3471. Reforming disproportionate share payments under State
medicaid programs.
Sec. 3472. Additional funding for State emergency health services
furnished to undocumented aliens.
(b) Amendments to Social Security Act.--Except as otherwise
specifically provided, whenever in this subtitle an amendment
is expressed in terms of an amendment to or repeal of a
section or other provision, the reference is considered to be
made to that section or other provision of the Social
Security Act.
CHAPTER 1--STATE FLEXIBILITY
Subchapter A--Use of Managed Care
SEC. 3401. STATE OPTIONS TO PROVIDE BENEFITS THROUGH MANAGED
CARE ENTITIES.
(a) In General.--Section 1915(a) (42 U.S.C. 1396n(a)) is
amended--
(1) by striking ``or'' at the end of paragraph (1),
(2) by striking the period at the end of paragraph (2) and
inserting ``; or'', and
(3) by adding at the end the following new paragraph:
``(3) requires individuals, other than special needs
children (as defined in subsection (i)), eligible for medical
assistance for items or services under the State plan to
enroll with an entity that provides or arranges for services
for enrollees under a contract pursuant to section 1903(m),
or with a primary care case manager (as defined in section
1905(t)(2)) (or restricts the number of provider agreements
with those entities under the State plan, consistent with
quality of care), if--
``(A) the State permits an individual to choose the manager
or managed care entity from among the managed care
organizations and primary care case providers who meet the
requirements of this title;
``(B)(i) individuals are permitted to choose between at
least 2 of those entities, or 2 of the managers, or an entity
and a manager, each of which has sufficient capacity to
provide services to enrollees; or
``(ii) with respect to a rural area--
``(I) individuals who are required to enroll with a single
entity are afforded the option to obtain covered services by
an alternative provider; and
``(II) an individual who is offered no alternative to a
single entity or manager is given a choice between at least
two providers within the entity or through the manager;
``(C) no individual who is an Indian (as defined in section
4 of the Indian Health Care Improvement Act of 1976) is
required to enroll in any entity that is not one of the
following (and only if such entity is participating under the
plan): the Indian Health Service, an Indian health program
operated by an Indian tribe or tribal organization pursuant
to a contract, grant, cooperative agreement, or compact with
the Indian Health Service pursuant to the Indian Self-
Determination Act (25 U.S.C. 450 et seq.), or an urban Indian
health program operated by an urban Indian organization
pursuant to a grant or contract with the Indian Health
Service pursuant to title V of the Indian Health Care
Improvement Act (25 U.S.C. 1601 et seq.);
``(D) the State restricts those individuals from changing
their enrollment without cause for periods no longer than six
months (and permits enrollees to change enrollment for cause
at any time);
``(E) the restrictions do not apply to providers of family
planning services (as defined in section 1905(a)(4)(C)) and
are not conditions for payment of medicare cost sharing
pursuant to section 1905(p)(3); and
``(F) prior to establishing an enrollment requirement under
this paragraph, the State agency provides for public notice
and comment pursuant to requirements established by the
Secretary.''.
(b) Special Needs Children Defined.--Section 1915 (42
U.S.C. 1396n) is amended by adding at the end the following:
``(i) For purposes of subsection (a)(3), the term `special
needs child' means an individual under 19 years of age who--
``(1) is eligible for supplemental security income under
title XVI,
``(2) is described in section 501(a)(1)(D),
``(3) is described in section 1902(e)(3), or
``(4) is in foster care or otherwise in an out-of-home
placement.''.
(c) Conforming Amendment to Risk-Based Arrangements.--
Section 1903(m)(2) (42 U.S.C. 1396b(m)(2)) is amended--
(1) in paragraph (A)(vi)--
(A) by striking ``(I) except as provided under subparagraph
(F),''; and
(B) by striking all that follows ``to terminate such
enrollment'' and inserting ``in accordance with the
provisions of subparagraph (F);''; and
(2) in subparagraph (F)--
(A) by striking ``In the case of--'' and all that follows
through ``a State plan'' and inserting ``A State plan'', and
(B) by striking ``(A)(vi)(I)'' and inserting ``(A)(vi)''.
(d) Effective Date.--The amendments made by this section
take effect on the date of the enactment of this Act.
SEC. 3402. ELIMINATION OF 75:25 RESTRICTION ON RISK
CONTRACTS.
(a) 75 Percent Limit on Medicare and Medicaid Enrollment.--
(1) In general.--Section 1903(m)(2)(A) (42 U.S.C.
1396b(m)(2)(A)) is amended by striking clause (ii).
(2) Conforming amendments.--Section 1903(m)(2) (42 U.S.C.
1396b(m)(2)) is amended--
(A) by striking subparagraphs (C), (D), and (E); and
(B) in subparagraph (G), by striking ``clauses (i) and
(ii)'' and inserting ``clause (i)''.
(b) Effective Date.--The amendments made by subsection (a)
take effect on the date of the enactment of this Act.
SEC. 3403. PRIMARY CARE CASE MANAGEMENT SERVICES AS STATE
OPTION WITHOUT NEED FOR WAIVER.
(a) Optional Coverage as Part of Medical Assistance.--
Section 1905(a) (42 U.S.C. 1396d(a)) is amended--
(1) by striking ``and'' at the end of paragraph (24);
(2) by redesignating paragraph (25) as paragraph (26) and
by striking the period at the end of such paragraph and
inserting a comma; and
(3) by inserting after paragraph (24) the following new
paragraph:
``(25) primary care case management services (as defined in
subsection (t)); and''.
(b) Primary Care Case Management Services Defined.--Section
1905 (42 U.S.C. 1396d) is amended by adding at the end the
following new subsection:
``(t)(1) The term `primary care case management services'
means case-management related services (including
coordination and monitoring of health care services) provided
by a primary care case manager under a primary care case
management contract.
``(2)(A) The term `primary care case manager' means, with
respect to a primary care case management contract, a
provider described in subparagraph (B).
``(B) A provider described in this subparagraph is a
provider that provides primary care case management services
under contract and is--
``(i) a physician, a physician group practice, or an entity
employing or having other arrangements with physicians; or
``(ii) at State option--
``(I) a nurse practitioner (as described in section
1905(a)(21));
``(II) a certified nurse-midwife (as defined in section
1861(gg)); or
``(III) a physician assistant (as defined in section
1861(aa)(5)).
``(3) The term `primary care case management contract'
means a contract with a State agency under which a primary
care case manager undertakes to locate, coordinate and
monitor covered primary care (and
[[Page H4421]]
such other covered services as may be specified under the
contract) to all individuals enrolled with the primary care
case manager, and which provides for--
``(A) reasonable and adequate hours of operation, including
24-hour availability of information, referral, and treatment
with respect to medical emergencies;
``(B) restriction of enrollment to individuals residing
sufficiently near a service delivery site of the entity to be
able to reach that site within a reasonable time using
available and affordable modes of transportation;
``(C) employment of, or contracts or other arrangements
with, sufficient numbers of physicians and other appropriate
health care professionals to ensure that services under the
contract can be furnished to enrollees promptly and without
compromise to quality of care;
``(D) a prohibition on discrimination on the basis of
health status or requirements for health services in
enrollment, disenrollment, or reenrollment of individuals
eligible for medical assistance under this title; and
``(E) a right for an enrollee to terminate enrollment
without cause during the first month of each enrollment
period, which period shall not exceed six months in duration,
and to terminate enrollment at any time for cause.
``(4) For purposes of this subsection, the term `primary
care' includes all health care services customarily provided
in accordance with State licensure and certification laws and
regulations, and all laboratory services customarily provided
by or through, a general practitioner, family medicine
physician, internal medicine physician, obstetrician/
gynecologist, or pediatrician.''.
(c) Conforming Amendments.--Section 1902 (42 U.S.C. 1396a)
is amended--
(1) in subsection (a)(10)(C)(iv), by striking ``(24)'' and
inserting ``(25)'', and
(2) in subsection (j), by striking ``(25)'' and inserting
``(26)''.
(d) Effective Date.--The amendments made by this section
apply to primary care case management services furnished on
or after October 1, 1997.
SEC. 3404. CHANGE IN THRESHOLD AMOUNT FOR CONTRACTS REQUIRING
SECRETARY'S PRIOR APPROVAL.
(a) In General.--Section 1903(m)(2)(A)(iii) (42 U.S.C.
1396b(m)(2)(A)(iii)) is amended by striking ``$100,000'' and
inserting ``$1,000,000 for 1998 and, for a subsequent year,
the amount established under this clause for the previous
year increased by the percentage increase in the consumer
price index for all urban consumers over the previous year''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to contracts entered into or renewed on or after
the date of the enactment of this Act.
Subchapter B--Payment Methodology
SEC. 3411. FLEXIBILITY IN PAYMENT METHODS FOR HOSPITAL,
NURSING FACILITY, AND ICF/MR SERVICES;
FLEXIBILITY FOR HOME HEALTH.
(a) Repeal of Boren Requirements.--Section 1902(a)(13) (42
U.S.C. 1396a(a)) is amended--
(1) by amending subparagraphs (A) and (B) to read as
follows:
``(A) for a public process for determination of rates of
payment under the plan for hospital services, nursing
facility services, and services of intermediate care
facilities for the mentally retarded under which--
``(i) proposed rates are published, and providers,
beneficiaries and their representatives, and other concerned
State residents are given a reasonable opportunity for review
and comment on the proposed rates;
``(ii) final rates are published, together with
justifications, and
``(iii) in the case of hospitals, take into account (in a
manner consistent with section 1923) the situation of
hospitals which serve a disproportionate number of low income
patients with special needs;
``(B) that the State shall provide assurances satisfactory
to the Secretary that the average level of payments under the
plan for nursing facility services (as determined on an
aggregate per resident-day basis) and the level of payments
under the plan for inpatient hospital services (as determined
on an aggregate hospital payment basis) furnished during the
18-month period beginning October 1, 1997, is not less than
the average level of payments that would be made under the
plan during such 18-month period for such respective services
(determined on such basis) based on rates or payment basis in
effect as of May 1, 1997;''; and
(2) by striking subparagraph (C).
(b) Repeal of Requirements Relating to Home Health
Services.--Such section is further amended--
(1) by adding ``and'' at the end of subparagraph (D),
(2) by striking ``and'' at the end of subparagraph (E), and
(3) by striking subparagraph (F).
(c) Effective Date.--The amendments made by this section
shall apply to payment for items and services furnished on or
after the date of the enactment of this Act.
SEC. 3412. PAYMENT FOR CENTER AND CLINIC SERVICES.
(a) Phase-Out of Payment Based on Reasonable Costs.--
Section 1902(a)(13)(E) (42 U.S.C. 1396a(a)(13)(E)) is amended
by inserting ``(or 95 percent for services furnished during
fiscal year 2000, 90 percent for service furnished during
fiscal year 2001, and 85 percent for services furnished
during fiscal year 2002)'' after ``100 percent''.
(b) Transitional Supplemental Payment for Services
Furnished Under Certain Managed Care Contracts.--
(1) In general.--Section 1902(a)(13)(E) is further
amended--
(A) by inserting ``(i)'' after ``(E)'', and
(B) by inserting before the semicolon at the end the
following: ``and (ii) in carrying out clause (i) in the case
of services furnished by a federally qualified health center
or a rural health clinic pursuant to a contract between the
center and a health maintenance organization under section
1903(m), for payment by the State of a supplemental payment
equal to the amount (if any) by which the amount determined
under clause (i) exceeds the amount of the payments provided
under such contract''.
(2) Conforming amendment to managed care contract
requirement.--Clause (ix) of section 1903(m)(2)(A) (42 U.S.C.
1396b(m)(2)(A)) is amended to read as follows:
``(ix) such contract provides, in the case of an entity
that has entered into a contract for the provision of
services with a federally qualified health center or a rural
health clinic, that the entity shall provide payment that is
not less than the level and amount of payment which the
entity would make for the services if the services were
furnished by a provider which is not a federally qualified
health center or a rural health clinic;''.
(3) Effective date.--The amendments made by this section
shall apply to services furnished on or after October 1,
1997.
(c) End of Transitional Payment Rules.--Effective for
services furnished on or after October 1, 2002--
(1) subparagraph (E) of section 1902(a)(13) (42 U.S.C.
1396a(a)(13)) is repealed, and
(2) clause (ix) of section 1903(m)(2)(A) (42 U.S.C.
1396b(m)(2)(A)) is repealed.
(d) Flexibility in Coverage of Non-Freestanding Look-
Alikes.--
(1) In general.--Section 1905(l)(2)(B)(iii) (42 U.S.C.
1396d(l)(2)(B)(iii)) is amended by inserting ``and is not
other than an entity that is owned, controlled, or operated
by another provider'' after ``such a grant''.
(2) Effective date.--The amendments made by paragraph (1)
shall apply to service furnished on and after the date of the
enactment of this Act.
(e) GAO Report.--By not later than February 1, 2001, the
Comptroller General shall submit to Congress a report on the
impact of the amendments made by this section on access to
health care for medicaid beneficiaries and the uninsured
served at health centers and rural health clinics and the
ability of health centers and rural health clinics to become
integrated in a managed care system.
SEC. 3413. TREATMENT OF STATE TAXES IMPOSED ON CERTAIN
HOSPITALS THAT PROVIDE FREE CARE.
(a) Exception From Tax Does Not Disqualify as Broad-Based
Tax.--Section 1903(w)(3) (42 U.S.C. 1396b(w)(3)) is amended--
(1) in subparagraph (B), by striking ``and (E)'' and
inserting ``(E), and (F)'', and
(2) by adding at the end the following:
``(F) In no case shall a tax not qualify as a broad-based
health care related tax under this paragraph because it does
not apply to a hospital that is exempt from taxation under
section 501(c)(3) of the Internal Revenue Code of 1986 and
that does not accept payment under the State plan under this
title or under title XVIII.''.
(b) Reduction in Federal Financial Participation in Case of
Imposition of Tax.--Section 1903(b) (42 U.S.C. 1396b(b)) is
amended by adding at the end the following:
``(4) Notwithstanding the preceding provisions of this
section, the amount determined under subsection (a)(1) for
any State shall be decreased in a quarter by the amount of
any health care related taxes (described in section
1902(w)(3)(A)) that are imposed on a hospital described in
subsection (w)(3)(F) in that quarter.''.
(c) Effective Date.--The amendments made by subsection (a)
shall apply to taxes imposed before, on, or after the date of
the enactment of this Act and the amendment made by
subsection (b) shall apply to taxes imposed on or after such
date.
Subchapter C--Eligibility
SEC. 3421. STATE OPTION OF CONTINUOUS ELIGIBILITY FOR 12
MONTHS; CLARIFICATION OF STATE OPTION TO COVER
CHILDREN.
(a) Continuous Eligibility Option.--Section 1902(e) (42
U.S.C. 1396a(e)) is amended by adding at the end the
following new paragraph:
``(12) At the option of the State, the plan may provide
that an individual who is under an age specified by the State
(not to exceed 19 years of age) and who is determined to be
eligible for benefits under a State plan approved under this
title under subsection (a)(10)(A) shall remain eligible for
those benefits until the earlier of--
``(A) the end of a period (not to exceed 12 months)
following the determination; or
``(B) the time that the individual exceeds that age.''.
(b) Clarification of State Option To Cover All Children
Under 19 Years of Age.--Section 1902(l)(1)(D) (42 U.S.C.
1396a(l)(1)(D)) is amended by inserting ``(or, at the option
of a State, after any earlier date)'' after ``children born
after September 30, 1983''.
(c) Effective Date.--The amendments made by this section
shall apply to medical assistance for items and services
furnished on or after October 1, 1997.
SEC. 3422. PAYMENT OF PART OR ALL OF MEDICARE PART B PREMIUM
FOR CERTAIN LOW-INCOME INDIVIDUALS.
(a) Eligibility.--Section 1902(a)(10)(E) (42 U.S.C.
1396a(a)(10)(E)) is amended--
[[Page H4422]]
(1) by striking ``and'' at the end of clause (ii),
(2) in clause (iii), by striking ``and 120 percent in 1995
and years thereafter'' and inserting ``120 percent in 1995,
1996, and 1997, and 135 percent in 1998 and years
thereafter''; and
(3) by inserting after clause (iii) the following:
``(iv) subject to section 1905(p)(4), for making medical
assistance available for the portion of medicare cost sharing
described in section 1905(p)(3)(A)(ii) that is attributable
to the application under section 1839(a)(5) of section
1833(d)(2) for individuals who would be described in clause
(iii) but for the fact that their income exceeds 135 percent,
but is less than 175 percent, of the official poverty line
(referred to in section 1905(p)(2)) for a family of the size
involved; and''.
(b) 100 Percent Federal Payment.--The third sentence of
section 1905(b) (42 U.S.C. 1396d(b)) is amended by inserting
``and with respect to amounts expended for medical assistance
described in section 1902(a)(10)(E)(iii) for individuals
described in such section whose income is equal to or exceeds
120 percent of the official poverty line and with respect to
amounts expended for medical assistance described in section
1902(a)(10)(E)(iv) for individuals described in such
section'' before the period at the end.
SEC. 3423. PENALTY FOR FRAUDULENT ELIGIBILITY.
Section 1128B(a) (42 U.S.C. 1320a-7b(a)), as amended by
section 217 of the Health Insurance Portability and
Accountability Act of 1996, is amended--
(1) by amending paragraph (6) to read as follows:
``(6) for a fee knowingly and willfully counsels or assists
an individual to dispose of assets (including by any transfer
in trust) in order for the individual to become eligible for
medical assistance under a State plan under title XIX, if
disposing of the assets results in the imposition of a period
of ineligibility for such assistance under section
1917(c),''; and
(2) in clause (ii) of the matter following such paragraph,
by striking ``failure, or conversion by any other person''
and inserting ``failure, conversion, or provision of counsel
or assistance by any other person''.
SEC. 3424. TREATMENT OF CERTAIN SETTLEMENT PAYMENTS.
Notwithstanding any other provision of law, the payments
made from any fund established pursuant to the settlement in
the case of In re Factor VIII or IX Concentrate Blood
Products Litigation, MDL-986, no. 93-C7452 (N.D. Ill.) shall
not be considered income or resources in determining
eligibility for, or the amount of benefits under, a State
plan of medical assistance approved under title XIX of the
Social Security Act.
Subchapter D--Programs of All-inclusive Care for the Elderly (PACE)
SEC. 3431. ESTABLISHMENT OF PACE PROGRAM AS MEDICAID STATE
OPTION.
(a) In General.--Title XIX is amended--
(1) in section 1905(a) (42 U.S.C. 1396d(a)), as amended by
section 3403(a)--
(A) by striking ``and'' at the end of paragraph (25);
(B) by redesignating paragraph (26) as paragraph (27); and
(C) by inserting after paragraph (25) the following new
paragraph:
``(26) services furnished under a PACE program under
section 1932 to PACE program eligible individuals enrolled
under the program under such section; and'';
(2) by redesignating section 1932 as section 1933; and
(3) by inserting after section 1931 the following new
section:
``program of all-inclusive care for the elderly (pace)
``Sec. 1932. (a) Option.--
``(1) In general.--A State may elect to provide medical
assistance under this section with respect to PACE program
services to PACE program eligible individuals who are
eligible for medical assistance under the State plan and who
are enrolled in a PACE program under a PACE program
agreement. Such individuals need not be eligible for benefits
under part A, or enrolled under part B, of title XVIII to be
eligible to enroll under this section. In the case of an
individual enrolled with a PACE program pursuant to such an
election--
``(A) the individual shall receive benefits under the plan
solely through such program, and
``(B) the PACE provider shall receive payment in accordance
with the PACE program agreement for provision of such
benefits.
A State may limit through its PACE program agreement the
number of individuals who may be enrolled in a PACE program
under the State plan.
``(2) PACE program defined.--For purposes of this section
and section 1894, the term `PACE program' means a program of
all-inclusive care for the elderly that meets the following
requirements:
``(A) Operation.--The entity operating the program is a
PACE provider (as defined in paragraph (3)).
``(B) Comprehensive benefits.--The program provides
comprehensive health care services to PACE program eligible
individuals in accordance with the PACE program agreement and
regulations under this section.
``(C) Transition.--In the case of an individual who is
enrolled under the program under this section and whose
enrollment ceases for any reason (including the individual no
longer qualifies as a PACE program eligible individual, the
termination of a PACE program agreement, or otherwise), the
program provides assistance to the individual in obtaining
necessary transitional care through appropriate referrals and
making the individual's medical records available to new
providers.
``(3) PACE provider defined.--
``(A) In general.--For purposes of this section, the term
`PACE provider' means an entity that--
``(i) subject to subparagraph (B), is (or is a distinct
part of) a public entity or a private, nonprofit entity
organized for charitable purposes under section 501(c)(3) of
the Internal Revenue Code of 1986, and
``(ii) has entered into a PACE program agreement with
respect to its operation of a PACE program.
``(B) Treatment of private, for-profit providers.--Clause
(i) of subparagraph (A) shall not apply--
``(i) to entities subject to a demonstration project waiver
under subsection (h); and
``(ii) after the date the report under section 4014(b) of
the Balanced Budget Act of 1997 is submitted, unless the
Secretary determines that any of the findings described in
subparagraph (A), (B), (C) or (D) of paragraph (2) of such
section are true.
``(4) PACE program agreement defined.--For purposes of this
section, the term `PACE program agreement' means, with
respect to a PACE provider, an agreement, consistent with
this section, section 1894 (if applicable), and regulations
promulgated to carry out such sections, between the PACE
provider, the Secretary, and a State administering agency for
the operation of a PACE program by the provider under such
sections.
``(5) PACE program eligible individual defined.--For
purposes of this section, the term `PACE program eligible
individual' means, with respect to a PACE program, an
individual who--
``(A) is 55 years of age or older;
``(B) subject to subsection (c)(4), is determined under
subsection (c) to require the level of care required under
the State medicaid plan for coverage of nursing facility
services;
``(C) resides in the service area of the PACE program; and
``(D) meets such other eligibility conditions as may be
imposed under the PACE program agreement for the program
under subsection (e)(2)(A)(ii).
``(6) PACE protocol.--For purposes of this section, the
term `PACE protocol' means the Protocol for the Program of
All-inclusive Care for the Elderly (PACE), as published by On
Lok, Inc., as of April 14, 1995.
``(7) PACE demonstration waiver program defined.--For
purposes of this section, the term `PACE demonstration waiver
program' means a demonstration program under either of the
following sections (as in effect before the date of their
repeal):
``(A) Section 603(c) of the Social Security Amendments of
1983 (Public Law 98-21), as extended by section 9220 of the
Consolidated Omnibus Budget Reconciliation Act of 1985
(Public Law 99-272).
``(B) Section 9412(b) of the Omnibus Budget Reconciliation
Act of 1986 (Public Law 99-509).
``(8) State administering agency defined.--For purposes of
this section, the term `State administering agency' means,
with respect to the operation of a PACE program in a State,
the agency of that State (which may be the single agency
responsible for administration of the State plan under this
title in the State) responsible for administering PACE
program agreements under this section and section 1894 in the
State.
``(9) Trial period defined.--
``(A) In general.--For purposes of this section, the term
`trial period' means, with respect to a PACE program operated
by a PACE provider under a PACE program agreement, the first
3 contract years under such agreement with respect to such
program.
``(B) Treatment of entities previously operating pace
demonstration waiver programs.--Each contract year (including
a year occurring before the effective date of this section)
during which an entity has operated a PACE demonstration
waiver program shall be counted under subparagraph (A) as a
contract year during which the entity operated a PACE program
as a PACE provider under a PACE program agreement.
``(10) Regulations.--For purposes of this section, the term
`regulations' refers to interim final or final regulations
promulgated under subsection (f) to carry out this section
and section 1894.
``(b) Scope of Benefits; Beneficiary Safeguards.--
``(1) In general.--Under a PACE program agreement, a PACE
provider shall--
``(A) provide to PACE program eligible individuals,
regardless of source of payment and directly or under
contracts with other entities, at a minimum--
``(i) all items and services covered under title XVIII (for
individuals enrolled under section 1894) and all items and
services covered under this title, but without any limitation
or condition as to amount, duration, or scope and without
application of deductibles, copayments, coinsurance, or other
cost-sharing that would otherwise apply under such title or
this title, respectively; and
``(ii) all additional items and services specified in
regulations, based upon those required under the PACE
protocol;
[[Page H4423]]
``(B) provide such enrollees access to necessary covered
items and services 24 hours per day, every day of the year;
``(C) provide services to such enrollees through a
comprehensive, multidisciplinary health and social services
delivery system which integrates acute and long-term care
services pursuant to regulations; and
``(D) specify the covered items and services that will not
be provided directly by the entity, and to arrange for
delivery of those items and services through contracts
meeting the requirements of regulations.
``(2) Quality assurance; patient safeguards.--The PACE
program agreement shall require the PACE provider to have in
effect at a minimum--
``(A) a written plan of quality assurance and improvement,
and procedures implementing such plan, in accordance with
regulations, and
``(B) written safeguards of the rights of enrolled
participants (including a patient bill of rights and
procedures for grievances and appeals) in accordance with
regulations and with other requirements of this title and
Federal and State law designed for the protection of
patients.
``(c) Eligibility Determinations.--
``(1) In general.--The determination of whether an
individual is a PACE program eligible individual--
``(A) shall be made under and in accordance with the PACE
program agreement, and
``(B) who is entitled to medical assistance under this
title, shall be made (or who is not so entitled, may be made)
by the State administering agency.
``(2) Condition.--An individual is not a PACE program
eligible individual (with respect to payment under this
section) unless the individual's health status has been
determined, in accordance with regulations, to be comparable
to the health status of individuals who have participated in
the PACE demonstration waiver programs. Such determination
shall be based upon information on health status and related
indicators (such as medical diagnoses and measures of
activities of daily living, instrumental activities of daily
living, and cognitive impairment) that are part of a uniform
minimum data set collected by PACE providers on potential
eligible individuals.
``(3) Annual eligibility recertifications.--
``(A) In general.--Subject to subparagraph (B), the
determination described in subsection (a)(5)(B) for an
individual shall be reevaluated at least once a year.
``(B) Exception.--The requirement of annual reevaluation
under subparagraph (A) may be waived during a period in
accordance with regulations in those cases where the State
administering agency determines that there is no reasonable
expectation of improvement or significant change in an
individual's condition during the period because of the
advanced age, severity of the advanced age, severity of
chronic condition, or degree of impairment of functional
capacity of the individual involved.
``(4) Continuation of eligibility.--An individual who is a
PACE program eligible individual may be deemed to continue to
be such an individual notwithstanding a determination that
the individual no longer meets the requirement of subsection
(a)(5)(B) if, in accordance with regulations, in the absence
of continued coverage under a PACE program the individual
reasonably would be expected to meet such requirement within
the succeeding 6-month period.
``(5) Enrollment; disenrollment.--The enrollment and
disenrollment of PACE program eligible individuals in a PACE
program shall be pursuant to regulations and the PACE program
agreement and shall permit enrollees to voluntarily disenroll
without cause at any time.
``(d) Payments to PACE Providers on a Capitated Basis.--
``(1) In general.--In the case of a PACE provider with a
PACE program agreement under this section, except as provided
in this subsection or by regulations, the State shall make
prospective monthly payments of a capitation amount for each
PACE program eligible individual enrolled under the agreement
under this section.
``(2) Capitation amount.--The capitation amount to be
applied under this subsection for a provider for a contract
year shall be an amount specified in the PACE program
agreement for the year. Such amount shall be an amount,
specified under the PACE agreement, which is less than the
amount that would otherwise have been made under the State
plan if the individuals were not so enrolled and shall be
adjusted to take into account the comparative frailty of PACE
enrollees and such other factors as the Secretary determines
to be appropriate. The payment under this section shall be in
addition to any payment made under section 1894 for
individuals who are enrolled in a PACE program under such
section.
``(e) PACE Program Agreement.--
``(1) Requirement.--
``(A) In general.--The Secretary, in close cooperation with
the State administering agency, shall establish procedures
for entering into, extending, and terminating PACE program
agreements for the operation of PACE programs by entities
that meet the requirements for a PACE provider under this
section, section 1894, and regulations.
``(B) Numerical limitation.--
``(i) In general.--The Secretary shall not permit the
number of PACE providers with which agreements are in effect
under this section or under section 9412(b) of the Omnibus
Budget Reconciliation Act of 1986 to exceed--
``(I) 40 as of the date of the enactment of this section,
or
``(II) as of each succeeding anniversary of such date, the
numerical limitation under this subparagraph for the
preceding year plus 20.
Subclause (II) shall apply without regard to the actual
number of agreements in effect as of a previous anniversary
date.
``(ii) Treatment of certain private, for-profit
providers.--The numerical limitation in clause (i) shall not
apply to a PACE provider that--
``(I) is operating under a demonstration project waiver
under subsection (h), or
``(II) was operating under such a waiver and subsequently
qualifies for PACE provider status pursuant to subsection
(a)(3)(B)(ii).
``(2) Service area and eligibility.--
``(A) In general.--A PACE program agreement for a PACE
program--
``(i) shall designate the service area of the program;
``(ii) may provide additional requirements for individuals
to qualify as PACE program eligible individuals with respect
to the program;
``(iii) shall be effective for a contract year, but may be
extended for additional contract years in the absence of a
notice by a party to terminate and is subject to termination
by the Secretary and the State administering agency at any
time for cause (as provided under the agreement);
``(iv) shall require a PACE provider to meet all applicable
State and local laws and requirements; and
``(v) shall have such additional terms and conditions as
the parties may agree to consistent with this section and
regulations.
``(B) Service area overlap.--In designating a service area
under a PACE program agreement under subparagraph (A)(i), the
Secretary (in consultation with the State administering
agency) may exclude from designation an area that is already
covered under another PACE program agreement, in order to
avoid unnecessary duplication of services and avoid impairing
the financial and service viability of an existing program.
``(3) Data collection.--
``(A) In general.--Under a PACE program agreement, the PACE
provider shall--
``(i) collect data,
``(ii) maintain, and afford the Secretary and the State
administering agency access to, the records relating to the
program, including pertinent financial, medical, and
personnel records, and
``(iii) make to the Secretary and the State administering
agency reports that the Secretary finds (in consultation with
State administering agencies) necessary to monitor the
operation, cost, and effectiveness of the PACE program under
this title and title XVIII.
``(B) Requirements during trial period.--During the first
three years of operation of a PACE program (either under this
section or under a PACE demonstration waiver program), the
PACE provider shall provide such additional data as the
Secretary specifies in regulations in order to perform the
oversight required under paragraph (4)(A).
``(4) Oversight.--
``(A) Annual, close oversight during trial period.--During
the trial period (as defined in subsection (a)(9)) with
respect to a PACE program operated by a PACE provider, the
Secretary (in cooperation with the State administering
agency) shall conduct a comprehensive annual review of the
operation of the PACE program by the provider in order to
assure compliance with the requirements of this section and
regulations. Such a review shall include--
``(i) an on-site visit to the program site;
``(ii) comprehensive assessment of a provider's fiscal
soundness;
``(iii) comprehensive assessment of the provider's capacity
to provide all PACE services to all enrolled participants;
``(iv) detailed analysis of the entity's substantial
compliance with all significant requirements of this section
and regulations; and
``(v) any other elements the Secretary or State agency
considers necessary or appropriate.
``(B) Continuing oversight.--After the trial period, the
Secretary (in cooperation with the State administering
agency) shall continue to conduct such review of the
operation of PACE providers and PACE programs as may be
appropriate, taking into account the performance level of a
provider and compliance of a provider with all significant
requirements of this section and regulations.
``(C) Disclosure.--The results of reviews under this
paragraph shall be reported promptly to the PACE provider,
along with any recommendations for changes to the provider's
program, and shall be made available to the public upon
request.
``(5) Termination of pace provider agreements.--
``(A) In general.--Under regulations--
``(i) the Secretary or a State administering agency may
terminate a PACE program agreement for cause, and
``(ii) a PACE provider may terminate such an agreement
after appropriate notice to the Secretary, the State agency,
and enrollees.
``(B) Causes for termination.--In accordance with
regulations establishing procedures for termination of PACE
program
[[Page H4424]]
agreements, the Secretary or a State administering agency may
terminate a PACE program agreement with a PACE provider for,
among other reasons, the fact that--
``(i) the Secretary or State administering agency
determines that--
``(I) there are significant deficiencies in the quality of
care provided to enrolled participants; or
``(II) the provider has failed to comply substantially with
conditions for a program or provider under this section or
section 1894; and
``(ii) the entity has failed to develop and successfully
initiate, within 30 days of the date of the receipt of
written notice of such a determination, and continue
implementation of a plan to correct the deficiencies.
``(C) Termination and transition procedures.--An entity
whose PACE provider agreement is terminated under this
paragraph shall implement the transition procedures required
under subsection (a)(2)(C).
``(6) Secretary's oversight; enforcement authority.--
``(A) In general.--Under regulations, if the Secretary
determines (after consultation with the State administering
agency) that a PACE provider is failing substantially to
comply with the requirements of this section and regulations,
the Secretary (and the State administering agency) may take
any or all of the following actions:
``(i) Condition the continuation of the PACE program
agreement upon timely execution of a corrective action plan.
``(ii) Withhold some or all further payments under the PACE
program agreement under this section or section 1894 with
respect to PACE program services furnished by such provider
until the deficiencies have been corrected.
``(iii) Terminate such agreement.
``(B) Application of intermediate sanctions.--Under
regulations, the Secretary may provide for the application
against a PACE provider of remedies described in section
1857(f)(2) (or, for periods before January 1, 1999, section
1876(i)(6)(B)) or 1903(m)(6)(B) in the case of violations by
the provider of the type described in section 1857(f)(1) (or
1876(i)(6)(A) for such periods) or 1903(m)(6)(A),
respectively (in relation to agreements, enrollees, and
requirements under section 1894 or this section,
respectively).
``(7) Procedures for termination or imposition of
sanctions.--Under regulations, the provisions of section
1857(g) (or for periods before January 1, 1999, section
1876(i)(9)) shall apply to termination and sanctions
respecting a PACE program agreement and PACE provider under
this subsection in the same manner as they apply to a
termination and sanctions with respect to a contract and a
MedicarePlus organization under part C (or for such periods
an eligible organization under section 1876).
``(8) Timely consideration of applications for pace program
provider status.--In considering an application for PACE
provider program status, the application shall be deemed
approved unless the Secretary, within 90 days after the date
of the submission of the application to the Secretary, either
denies such request in writing or informs the applicant in
writing with respect to any additional information that is
needed in order to make a final determination with respect to
the application. After the date the Secretary receives such
additional information, the application shall be deemed
approved unless the Secretary, within 90 days of such date,
denies such request.
``(f) Regulations.--
``(1) In general.--The Secretary shall issue interim final
or final regulations to carry out this section and section
1894.
``(2) Use of pace protocol.--
``(A) In general.--In issuing such regulations, the
Secretary shall, to the extent consistent with the provisions
of this section, incorporate the requirements applied to PACE
demonstration waiver programs under the PACE protocol.
``(B) Flexibility.--The Secretary (in close consultation
with State administering agencies) may modify or waive such
provisions of the PACE protocol in order to provide for
reasonable flexibility in adapting the PACE service delivery
model to the needs of particular organizations (such as those
in rural areas or those that may determine it appropriate to
use non-staff physicians accordingly to State licensing law
requirements) under this section and section 1932 where such
flexibility is not inconsistent with and would not impair the
essential elements, objectives, and requirements of the this
section, including--
``(i) the focus on frail elderly qualifying individuals who
require the level of care provided in a nursing facility;
``(ii) the delivery of comprehensive, integrated acute and
long-term care services;
``(iii) the interdisciplinary team approach to care
management and service delivery;
``(iv) capitated, integrated financing that allows the
provider to pool payments received from public and private
programs and individuals; and
``(v) the assumption by the provider over time of full
financial risk.
``(3) Application of certain additional beneficiary and
program protections.--
``(A) In general.--In issuing such regulations and subject
to subparagraph (B), the Secretary may apply with respect to
PACE programs, providers, and agreements such requirements of
part C of title XVIII (or, for periods before January 1,
1999, section 1876) and section 1903(m) relating to
protection of beneficiaries and program integrity as would
apply to MedicarePlus organizations under such part C (or for
such periods eligible organizations under risk-sharing
contracts under section 1876) and to health maintenance
organizations under prepaid capitation agreements under
section 1903(m).
``(B) Considerations.--In issuing such regulations, the
Secretary shall--
``(i) take into account the differences between populations
served and benefits provided under this section and under
part C of title XVIII (or, for periods before January 1,
1999, section 1876) and section 1903(m);
``(ii) not include any requirement that conflicts with
carrying out PACE programs under this section; and
``(iii) not include any requirement restricting the
proportion of enrollees who are eligible for benefits under
this title or title XVIII.
``(g) Waivers of Requirements.--With respect to carrying
out a PACE program under this section, the following
requirements of this title (and regulations relating to such
requirements) shall not apply:
``(1) Section 1902(a)(1), relating to any requirement that
PACE programs or PACE program services be provided in all
areas of a State.
``(2) Section 1902(a)(10), insofar as such section relates
to comparability of services among different population
groups.
``(3) Sections 1902(a)(23) and 1915(b)(4), relating to
freedom of choice of providers under a PACE program.
``(4) Section 1903(m)(2)(A), insofar as it restricts a PACE
provider from receiving prepaid capitation payments.
``(h) Demonstration Project for For-Profit Entities.--
``(1) In general.--In order to demonstrate the operation of
a PACE program by a private, for-profit entity, the Secretary
(in close consultation with State administering agencies)
shall grant waivers from the requirement under subsection
(a)(3) that a PACE provider may not be a for-profit, private
entity.
``(2) Similar terms and conditions.--
``(A) In general.--Except as provided under subparagraph
(B), and paragraph (1), the terms and conditions for
operation of a PACE program by a provider under this
subsection shall be the same as those for PACE providers that
are nonprofit, private organizations.
``(B) Numerical limitation.--The number of programs for
which waivers are granted under this subsection shall not
exceed 10. Programs with waivers granted under this
subsection shall not be counted against the numerical
limitation specified in subsection (e)(1)(B).
``(i) Post-Eligibility Treatment of Income.--A State may
provide for post-eligibility treatment of income for
individuals enrolled in PACE programs under this section in
the same manner as a State treats post-eligibility income for
individuals receiving services under a waiver under section
1915(c).
``(j) Miscellaneous Provisions.--
``(1) Construction.--Nothing in this section or section
1894 shall be construed as preventing a PACE provider from
entering into contracts with other governmental or
nongovernmental payers for the care of PACE program eligible
individuals who are not eligible for benefits under part A,
or enrolled under part B, of title XVIII or eligible for
medical assistance under this title.''.
(b) Conforming Amendments.--
(1) Section 1902 (42 U.S.C. 1396a), as amended by section
3403(c), is amended--
(A) in subsection (a)(10)(C)(iv), by striking ``(25)'' and
inserting ``(26)'', and
(B) in subsection (j), by striking ``(26)'' and inserting
``(27)''.
(2) Section 1924(a)(5) (42 U.S.C. 1396r-5(a)(5)) is
amended--
(A) in the heading, by striking ``from organizations
receiving certain waivers'' and inserting ``under pace
programs'', and
(B) by striking ``from any organization'' and all that
follows and inserting ``under a PACE demonstration waiver
program (as defined in subsection (a)(7) of section 1932) or
under a PACE program under section 1894.''.
(3) Section 1903(f)(4)(C) (42 U.S.C. 1396b(f)(4)(C)) is
amended by inserting ``or who is a PACE program eligible
individual enrolled in a PACE program under section 1932,''
after ``section 1902(a)(10)(A),''.
SEC. 3432. COVERAGE OF PACE UNDER THE MEDICARE PROGRAM.
Title XVIII (42 U.S.C. 1395 et seq.) is amended by
inserting after section 1894 the following new section:
``payments to, and coverage of benefits under, programs of all-
inclusive care for the elderly (pace)
``Sec. 1894. (a) Receipt of Benefits Through Enrollment in
PACE Program; Definitions for PACE Program Related Terms.--
``(1) Benefits through enrollment in a pace program.--In
accordance with this section, in the case of an individual
who is entitled to benefits under part A or enrolled under
part B and who is a PACE program eligible individual with
respect to a PACE program offered by a PACE provider under a
PACE program agreement--
``(A) the individual may enroll in the program under this
section; and
``(B) so long as the individual is so enrolled and in
accordance with regulations--
``(i) the individual shall receive benefits under this
title solely through such program, and
[[Page H4425]]
``(ii) the PACE provider is entitled to payment under and
in accordance with this section and such agreement for
provision of such benefits.
``(2) Application of definitions.--The definitions of terms
under section 1932(a) shall apply under this section in the
same manner as they apply under section 1932.
``(b) Application of Medicaid Terms and Conditions.--Except
as provided in this section, the terms and conditions for the
operation and participation of PACE program eligible
individuals in PACE programs offered by PACE providers under
PACE program agreements under section 1932 shall apply for
purposes of this section.
``(c) Payment.--
``(1) Adjustment in payment amounts.--In the case of
individuals enrolled in a PACE program under this section,
the amount of payment under this section shall not be the
amount calculated under section 1932(d)(2), but shall be an
amount, specified under the PACE agreement, based upon
payment rates established for purposes of payment under
section 1854 (or, for periods before January 1, 1999, for
purposes of risk-sharing contracts under section 1876) and
shall be adjusted to take into account the comparative
frailty of PACE enrollees and such other factors as the
Secretary determines to be appropriate. Such amount under
such an agreement shall be computed in a manner so that the
total payment level for all PACE program eligible individuals
enrolled under a program is less than the projected payment
under this title for a comparable population not enrolled
under a PACE program.
``(2) Form.--The Secretary shall make prospective monthly
payments of a capitation amount for each PACE program
eligible individual enrolled under this section in the same
manner and from the same sources as payments are made to a
MedicarePlus organization under section 1854 (or, for periods
beginning before January 1, 1999, to an eligible organization
under a risk-sharing contract under section 1876). Such
payments shall be subject to adjustment in the manner
described in section 1854(a)(2) or section 1876(a)(1)(E), as
the case may be.
``(d) Waivers of Requirements.--With respect to carrying
out a PACE program under this section, the following
requirements of this title (and regulations relating to such
requirements) are waived and shall not apply:
``(1) Section 1812, insofar as it limits coverage of
institutional services.
``(2) Sections 1813, 1814, 1833, and 1886, insofar as such
sections relate to rules for payment for benefits.
``(3) Sections 1814(a)(2)(B), 1814(a)(2)(C), and
1835(a)(2)(A), insofar as they limit coverage of extended
care services or home health services.
``(4) Section 1861(i), insofar as it imposes a 3-day prior
hospitalization requirement for coverage of extended care
services.
``(5) Sections 1862(a)(1) and 1862(a)(9), insofar as they
may prevent payment for PACE program services to individuals
enrolled under PACE programs.''.
SEC. 3433. EFFECTIVE DATE; TRANSITION.
(a) Timely Issuance of Regulations; Effective Date.--The
Secretary of Health and Human Services shall promulgate
regulations to carry out this subchapter in a timely manner.
Such regulations shall be designed so that entities may
establish and operate PACE programs under sections 1894 and
1932 for periods beginning not later than 1 year after the
date of the enactment of this Act.
(b) Expansion and Transition for PACE Demonstration Project
Waivers.--
(1) Expansion in current number and extension of
demonstration projects.--Section 9412(b) of the Omnibus
Budget Reconciliation Act of 1986, as amended by section
4118(g) of the Omnibus Budget Reconciliation Act of 1987, is
amended--
(A) in paragraph (1), by inserting before the period at the
end the following: ``, except that the Secretary shall grant
waivers of such requirements to up to the applicable
numerical limitation specified in section 1932(e)(1)(B) of
the Social Security Act''; and
(B) in paragraph (2)--
(i) in subparagraph (A), by striking ``, including
permitting the organization to assume progressively (over the
initial 3-year period of the waiver) the full financial
risk''; and
(ii) in subparagraph (C), by adding at the end the
following: ``In granting further extensions, an organization
shall not be required to provide for reporting of information
which is only required because of the demonstration nature of
the project.''.
(2) Elimination of replication requirement.--Subparagraph
(B) of paragraph (2) of such section shall not apply to
waivers granted under such section after the date of the
enactment of this Act.
(3) Timely consideration of applications.--In considering
an application for waivers under such section before the
effective date of repeals under subsection (c), subject to
the numerical limitation under the amendment made by
paragraph (1), the application shall be deemed approved
unless the Secretary of Health and Human Services, within 90
days after the date of its submission to the Secretary,
either denies such request in writing or informs the
applicant in writing with respect to any additional
information which is needed in order to make a final
determination with respect to the application. After the date
the Secretary receives such additional information, the
application shall be deemed approved unless the Secretary,
within 90 days of such date, denies such request.
(c) Priority and Special Consideration in Application.--
During the 3-year period beginning on the date of the
enactment of this Act:
(1) Provider status.--The Secretary of Health and Human
Services shall give priority, in processing applications of
entities to qualify as PACE programs under section 1894 or
1932 of the Social Security Act--
(A) first, to entities that are operating a PACE
demonstration waiver program (as defined in section
1932(a)(7) of such Act), and
(B) then entities that have applied to operate such a
program as of May 1, 1997.
(2) New waivers.--The Secretary shall give priority, in the
awarding of additional waivers under section 9412(b) of the
Omnibus Budget Reconciliation Act of 1986--
(A) to any entities that have applied for such waivers
under such section as of May 1, 1997; and
(B) to any entity that, as of May 1, 1997, has formally
contracted with a State to provide services for which payment
is made on a capitated basis with an understanding that the
entity was seeking to become a PACE provider.
(3) Special consideration.--The Secretary shall give
special consideration, in the processing of applications
described in paragraph (1) and the awarding of waivers
described in paragraph (2), to an entity which as of May 1,
1997 through formal activities (such as entering into
contracts for feasibility studies) has indicated a specific
intent to become a PACE provider.
(d) Repeal of Current PACE Demonstration Project Waiver
Authority.--
(1) In general.--Subject to paragraphs (2) and (3), the
following provisions of law are repealed:
(A) Section 603(c) of the Social Security Amendments of
1983 (Public Law 98-21).
(B) Section 9220 of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (Public Law 99-272).
(C) Section 9412(b) of the Omnibus Budget Reconciliation
Act of 1986 (Public Law 99-509).
(2) Delay in application.--
(A) In general.--Subject to subparagraph (B), the repeals
made by paragraph (1) shall not apply to waivers granted
before the initial effective date of regulations described in
subsection (a).
(B) Application to approved waivers.--Such repeals shall
apply to waivers granted before such date only after allowing
such organizations a transition period (of up to 24 months)
in order to permit sufficient time for an orderly transition
from demonstration project authority to general authority
provided under the amendments made by this subchapter.
(3) State option.--A State may elect to maintain the PACE
program which (as of the date of the enactment of this Act)
were operating under the authority described in paragraph (1)
without electing to use the authority under section 1932 of
the Public Health Service Act.
SEC. 3434. STUDY AND REPORTS.
(a) Study.--
(1) In general.--The Secretary of Health and Human Services
(in close consultation with State administering agencies, as
defined in section 1932(a)(8) of the Social Security Act)
shall conduct a study of the quality and cost of providing
PACE program services under the medicare and medicaid
programs under the amendments made by this subchapter.
(2) Study of private, for-profit providers.--Such study
shall specifically compare the costs, quality, and access to
services by entities that are private, for-profit entities
operating under demonstration projects waivers granted under
section 1932(h) of the Social Security Act with the costs,
quality, and access to services of other PACE providers.
(b) Report.--
(1) In general.--Not later than 4 years after the date of
the enactment of this Act, the Secretary shall provide for a
report to Congress on the impact of such amendments on
quality and cost of services. The Secretary shall include in
such report such recommendations for changes in the operation
of such amendments as the Secretary deems appropriate.
(2) Treatment of private, for-profit providers.--The report
shall include specific findings on whether any of the
following findings is true:
(A) The number of covered lives enrolled with entities
operating under demonstration project waivers under section
1932(h) of the Social Security Act is fewer than 800 (or such
lesser number as the Secretary may find statistically
sufficient to make determinations respecting findings
described in the succeeding subparagraphs).
(B) The population enrolled with such entities is less
frail than the population enrolled with other PACE providers.
(C) Access to or quality of care for individuals enrolled
with such entities is lower than such access or quality for
individuals enrolled with other PACE providers.
(D) The application of such section has resulted in an
increase in expenditures under the medicare or medicaid
programs above the expenditures that would have been made if
such section did not apply.
(c) Information Included in Annual Recommendations.--The
Medicare Payment Advisory Commission shall include in its
annual report under section 1805(b)(1)(B) of the
[[Page H4426]]
Social Security Act recommendations on the methodology and
level of payments made to PACE providers under section
1894(d) of such Act and on the treatment of private, for-
profit entities as PACE providers.
Subchapter E--Benefits
SEC. 3441. ELIMINATION OF REQUIREMENT TO PAY FOR PRIVATE
INSURANCE.
(a) Repeal of State Plan Provision.--Section 1902(a)(25)
(42 U.S.C. 1396a(a)(25)) is amended--
(1) by striking subparagraph (G); and
(2) by redesignating subparagraphs (H) and (I) as
subparagraphs (G) and (H), respectively.
(b) Making Provision Optional.--Section 1906 (42 U.S.C.
1396e) is amended--
(1) in subsection (a)--
(A) by striking ``For purposes of section 1902(a)(25)(G)
and subject to subsection (d), each'' and inserting ``Each'',
(B) in paragraph (1), by striking ``shall'' and inserting
``may'', and
(C) in paragraph (2), by striking ``shall'' and inserting
``may''; and
(2) by striking subsection (d).
(c) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act.
SEC. 3442. PERMITTING SAME COPAYMENTS IN HEALTH MAINTENANCE
ORGANIZATIONS AS IN FEE-FOR-SERVICE.
(a) In General.--Section 1916(a)(2)(D) (42 U.S.C.
1396o(a)(2)(D)) is amended by inserting ``(at the option of
the State)'' after ``section 1905(a)(4)(C), or''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to cost sharing with respect to deductions, cost
sharing and similar charges imposed for items and services
furnished on or after the date of the enactment of this Act.
SEC. 3443. PHYSICIAN QUALIFICATION REQUIREMENTS.
(a) In General.--Section 1903(i) (42 U.S.C. 1396b(i)) is
amended by striking paragraph (12)
(b) Effective Date.--The amendment made by subsection (a)
shall apply to services furnished on or after the date of the
enactment of this Act.
SEC. 3444. ELIMINATION OF REQUIREMENT OF PRIOR
INSTITUTIONALIZATION WITH RESPECT TO
HABILITATION SERVICES FURNISHED UNDER A WAIVER
FOR HOME OR COMMUNITY-BASED SERVICES.
(a) In General.--Section 1915(c)(5) (42 U.S.C. 1396n(c)(5))
is amended, in the matter preceding subparagraph (A), by
striking ``, with respect to individuals who receive such
services after discharge from a nursing facility or
intermediate care facility for the mentally retarded''.
(b) Effective Date.--The amendment made by subsection (a)
apply to services furnished on or after October 1, 1997.
SEC. 3445. BENEFITS FOR SERVICES OF PHYSICIAN ASSISTANTS.
(a) In General.--Section 1905(a) (42 U.S.C. 1396d(a)), as
amended by sections 3403(a) and 3431(a), is amended--
(1) by redesignating paragraphs (22) through (27) as
paragraphs (23) through (28), and
(2) by inserting after paragraph (21) the following new
paragraph:
``(22) services furnished by an physician assistant (as
defined in section 1861(aa)(5)) which the assistant is
legally authorized to perform under State law and with the
supervision of a physician;''.
(b) Conforming Amendments.--Section 1902 (42 U.S.C. 1396a),
as amended by sections 3403(c) and 3431(b)(1), is amended--
(1) in subsection (a)(10)(C)(iv), by striking ``(26)'' and
inserting ``(27)'', and
(2) in subsection (j), by striking ``(27)'' and inserting
``(28)''.
SEC. 3446. STUDY AND REPORT ON ACTUARIAL VALUE OF EPSDT
BENEFIT.
(a) Study.--The Secretary of Health and Human Services
shall provide for a study on the actuarial value of the
provision of early and periodic screening, diagnostic, and
treatment services (as defined in section 1905(r) of the
Social Security Act (42 U.S.C. 1396d(r))) under the medicaid
program under title XIX of such Act. Such study shall include
an examination of the portion of such value that is
attributable to paragraph (5) of such section and to the
second sentence of such section.
(b) Report.--By not later than 18 months after the date of
the enactment of this Act, the Secretary shall submit a
report to Congress on the results of the study under
subsection (a).
Subchapter F--Administration
SEC. 3451. ELIMINATION OF DUPLICATIVE INSPECTION OF CARE
REQUIREMENTS FOR ICFS/MR AND MENTAL HOSPITALS.
(a) Mental Hospitals.--Section 1902(a)(26) (42 U.S.C.
1396a(a)(26)) is amended--
(1) by striking ``provide--
``(A) with respect to each patient'' and inserting
``provide, with respect to each patient''; and
(2) by striking subparagraphs (B) and (C).
(b) ICFS/MR.--Section 1902(a)(31) (42 U.S.C. 1396a(a)(31))
is amended--
(1) by striking ``provide--
``(A) with respect to each patient'' and inserting
``provide, with respect to each patient''; and
(2) by striking subparagraphs (B) and (C).
(c) Effective Date.--The amendments made by this section
take effect on the date of the enactment of this Act.
SEC. 3452. ALTERNATIVE SANCTIONS FOR NONCOMPLIANT ICFS/MR.
(a) In General.--Section 1902(i)(1)(B) (42 U.S.C.
1396a(i)(1)(B)) is amended by striking ``provide'' and
inserting ``establish alternative remedies if the State
demonstrates to the Secretary's satisfaction that the
alternative remedies are effective in deterring noncompliance
and correcting deficiencies, and may provide''.
(b) Effective Date.--The amendments made by subsection (a)
takes effect on the date of the enactment of this Act.
SEC. 3453. MODIFICATION OF MMIS REQUIREMENTS.
(a) In General.--Section 1903(r) (42 U.S.C. 1396b(r)) is
amended--
(1) by striking all that precedes paragraph (5) and
inserting the following:
``(r)(1) In order to receive payments under subsection (a)
for use of automated data systems in administration of the
State plan under this title, a State must have in operation
mechanized claims processing and information retrieval
systems that meet the requirements of this subsection and
that the Secretary has found--
``(A) is adequate to provide efficient, economical, and
effective administration of such State plan;
``(B) is compatible with the claims processing and
information retrieval systems used in the administration of
title XVIII, and for this purpose--
``(i) has a uniform identification coding system for
providers, other payees, and beneficiaries under this title
or title XVIII;
``(ii) provides liaison between States and carriers and
intermediaries with agreements under title XVIII to
facilitate timely exchange of appropriate data; and
``(iii) provides for exchange of data between the States
and the Secretary with respect to persons sanctioned under
this title or title XVIII;
``(C) is capable of providing accurate and timely data;
``(D) is complying with the applicable provisions of part C
of title XI;
``(E) is designed to receive provider claims in standard
formats to the extent specified by the Secretary; and
``(F) effective for claims filed on or after January 1,
1999, provides for electronic transmission of claims data in
the format specified by the Secretary and consistent with the
Medicaid Statistical Information System (MSIS) (including
detailed individual enrollee encounter data and other
information that the Secretary may find necessary).''.
(2) in paragraph (5)--
(A) by striking subparagraph (B);
(B) by striking all that precedes clause (i) and inserting
the following:
``(2) In order to meet the requirements of this paragraph,
mechanized claims processing and information retrieval
systems must meet the following requirements:'';
(C) in clause (iii), by striking ``under paragraph (6)'';
and
(D) by redesignating clauses (i) through (iii) as
paragraphs (A) through (C); and
(3) by striking paragraphs (6), (7), and (8).
(b) Conforming Amendments.--Section 1902(a)(25)(A)(ii) (42
U.S.C. 1396a(a)(25)(A)(ii)) is amended by striking all that
follows ``shall'' and inserting the following: ``be
integrated with, and be monitored as a part of the
Secretary's review of, the State's mechanized claims
processing and information retrieval system under section
1903(r);''.
(c) Effective Date.--Except as otherwise specifically
provided, the amendments made by this section shall take
effect on January 1, 1998.
SEC. 3454. FACILITATING IMPOSITION OF STATE ALTERNATIVE
REMEDIES ON NONCOMPLIANT NURSING FACILITIES.
(a) In General.--Section 1919(h)(3)(D) (42 U.S.C.
1396r(h)(3)(D)) is amended--
(1) by inserting ``and'' at the end of clause (i);
(2) by striking ``, and'' at the end of clause (ii) and
inserting a period; and
(3) by striking clause (iii).
(b) Effective Date.--The amendments made by subsection (a)
take effect on the date of the enactment of this Act.
SEC. 3455. MEDICALLY ACCEPTED INDICATION.
Section 1927(g)(1)(B)(i) (42 U.S.C. 1396r-8(g)(1)(B)(i)) is
amended--
(1) by striking ``and'' at the end of subclause (II),
(2) by redesignating subclause (III) as subclause (IV), and
(3) by inserting after subclause (II) the following:
``(III) the DRUGDEX Information System; and''.
SEC. 3456. CONTINUATION OF STATE-WIDE SECTION 1115 MEDICAID
WAIVERS.
(a) In General.--Section 1115 (42 U.S.C. 1315) is amended
by adding at the end the following new subsection:
``(e)(1) The provisions of this subsection shall apply to
the extension of State-wide comprehensive demonstration
project (in this subsection referred to as `waiver project')
for which a waiver of compliance with requirements of title
XIX is granted under subsection (a).
``(2) Not earlier than 1 year before the date the waiver
under subsection (a) with respect to a waiver project would
otherwise expire, the chief executive officer of the State
which is operating the project may submit to the Secretary a
written request for an extension, of up to 3 years, of the
project.
``(3) If the Secretary fails to respond to the request
within 6 months after the date it is submitted, the request
is deemed to have been granted.
[[Page H4427]]
``(4) If such a request is granted, the deadline for
submittal of a final report under the waiver project is
deemed to have been extended until the date that is 1 year
after the date the waivers under subsection (a) with respect
to the project would otherwise have expired.
``(5) The Secretary shall release an evaluation of each
such project not later than 1 year after the date of receipt
of the final report.
``(6) Subject to paragraphs (4) and (7), the extension of a
waiver project under this subsection shall be on the same
terms and conditions (including applicable terms and
conditions relating to quality and access of services, budget
neutrality, data and reporting requirements, and special
population protections) that applied to the project before
its extension under this subsection.
``(7) If an original condition of approval of a waiver
project was that Federal expenditures under the project not
exceed the Federal expenditures that would otherwise have
been made, the Secretary shall take such steps as may be
necessary to assure that, in the extension of the project
under this subsection, such condition continues to be met. In
applying the previous sentence, the Secretary shall take into
account the Secretary's best estimate of rates of change in
expenditures at the time of the extension.''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to demonstration projects initially approved
before, on, or after the date of the enactment of this Act.
SEC. 3457. AUTHORIZING ADMINISTRATIVE STREAMLINING AND
PRIVATIZING MODIFICATIONS UNDER THE MEDICAID
PROGRAM.
Section 1902 (42 U.S.C. 1396a) is amended by adding at the
end the following:
``(aa)(1) Notwithstanding any other provision of law, no
provision of law shall be construed as preventing any State
from allowing determinations of eligibility to receive
medical assistance under this title to be made by an entity
that is not a State or local government, or by an individual
who is not an employee of a State or local government, which
meets such qualifications as the State determines. For
purposes of any Federal law, such determinations shall be
considered to be made by the State and by a State agency.
``(2) Nothing in this subsection shall be construed as
affecting--
``(A) the conditions for eligibility for benefits
(including any conditions relating to income or resources);
and
``(B) the rights to challenge determinations regarding
eligibility or rights to benefits; and
``(C) determinations regarding quality control or error
rates.''.
SEC. 3458. EXTENSION OF MORATORIUM.
Section 6408(a)(3) of the Omnibus Budget Reconciliation Act
of 1989, as amended by section 13642 of the Omnibus Budget
Reconciliation Act of 1993, is amended by striking ``December
31, 1995'' and inserting ``December 31, 2002''.
CHAPTER 2--QUALITY ASSURANCE
SEC. 3461. REQUIREMENTS TO ENSURE QUALITY OF AND ACCESS TO
CARE UNDER MANAGED CARE PLANS.
(a) State Plan Requirement.--Section 1902(a) (42 U.S.C.
1396a(a)) is amended--
(1) in paragraph (62), by striking ``; and'' at the end and
inserting a semicolon;
(2) by striking the period at the end of paragraph (63) and
inserting ``; and''; and
(3) by inserting after paragraph (63) the following new
paragraph:
``(64) provide, with respect to all contracts described in
section 1903(m)(2)(A) with an organization or provider,
that--
``(A) the State agency develops and implements a quality
assessment and improvement strategy, consistent with
standards that the Secretary shall establish, in consultation
with the States, and monitor and that do not preempt the
application of stricter State standards, which includes--
``(i) standards for access to care so that covered services
are available within reasonable timeframes and in a manner
that ensures continuity of care and adequate primary care
and, where applicable, specialized services capacity,
including pediatric specialized services for special needs
children (as defined in section 1915(i)); and
``(ii) procedures for monitoring and evaluating the quality
and appropriateness of care and services to beneficiaries
that reflect the full spectrum of populations enrolled under
the contract and that include--
``(I) requirements for provision of quality assurance data
to the State using the data and information set that the
Secretary shall specify with respect to entities contracting
under section 1876 or alternative data requirements approved
by the Secretary;
``(II) regular and periodic examination of the scope and
content of the quality improvement strategy; and
``(III) other aspects of care and service directly related
to the improvement of quality of care (including grievance
procedures and marketing and information standards); and
``(B) that adequate provision is made, consistent with
standards that the Secretary shall specify and monitor, with
respect to financial reporting under the contracts.''.
(b) Deemed Compliance.--Section 1903(m) (42 U.S.C.
1396b(m)) is amended by adding at the end the following:
``(7) Deemed compliance.--
``(A) Medicare organizations.--At the option of a State,
the requirements of the previous provisions of this
subsection shall not apply with respect to a health
maintenance organization if the organization is an eligible
organization with a contract in effect under section 1876 or
a MedicarePlus organization with a contract in effect under C
of title XVIII.
``(B) Private accreditation.--
``(i) In general.--At the option of a State, such
requirements shall not apply with respect to a health
maintenance organization if--
``(I) the organization is accredited by an organization
meeting the requirements described in subparagraph (C); and
``(II) the standards and process under which the
organization is accredited meet such requirements as are
established under clause (ii), without regard to whether or
not the time requirement of such clause is satisfied.
``(ii) Standards and process.--Not later than 180 days
after the date of the enactment of this paragraph, the
Secretary shall specify requirements for the standards and
process under which a health maintenance organization is
accredited by an organization meeting the requirements of
subparagraph (C).
``(C) Accrediting organization.--An accrediting
organization meets the requirements of this subparagraph if
the organization--
``(i) is a private, nonprofit organization;
``(ii) exists for the primary purpose of accrediting
managed care organizations or health care providers; and
``(iii) is independent of health care providers or
associations of health care providers.''.
(c) Application to Managed Care Entities.--Section
1903(m)(2)(A) (42 U.S.C. 1396b(m)(2)(A)) is amended--
(1) by striking ``and'' at the end of clause (x),
(2) by striking the period at the end of clause (xi) and
inserting ``; and'', and
(3) by adding at the end the following new clause:
``(xii) such contract provides for--
``(I) submitting to the State agency such information as
may be necessary to monitor the care delivered to members,
``(II) maintenance of an internal quality assurance program
consistent with section 1902(a)(64)(A), and meeting standards
that the Secretary shall establish in regulations; and
``(III) providing effective procedures for hearing and
resolving grievances between the entity and members enrolled
with the organization under this subsection.''.
(d) Application to Primary Care Case Management
Contracts.--Section 1905(t)(3), as added by section 3403(b),
is amended--
(1) by striking ``and'' at the end of subparagraph (D),
(2) by striking the period at the end of subparagraph (E)
and inserting ``; and'', and
(3) by adding at the end the following new subparagraph:
``(F) if payment is made to the organization on a prepaid
capitated or other risk basis, compliance with the
requirements of section 1903(m)(2)(A)(xii) in the same manner
such requirements apply to a health maintenance organization
under section 1903(m)(2)(A).''.
(e) Effective Date.--The amendments made by this section
apply to agreements between a State agency and an
organization entered into or renewed on or after January 1,
1999.
SEC. 3462. SOLVENCY STANDARDS FOR CERTAIN HEALTH MAINTENANCE
ORGANIZATIONS.
(a) In General.--Section 1903(m)(1) (42 U.S.C. 1396b(m)(1))
is amended--
(1) in subparagraph (A)(ii), by inserting ``, meets the
requirements of subparagraph (C)(i) (if applicable),'' after
``provision is satisfactory to the State'', and
(2) by adding at the end the following:
``(C)(i) Subject to clause (ii), a provision meets the
requirements of this subparagraph for an organization if the
organization meets solvency standards established by the
State for private health maintenance organizations or is
licensed or certified by the State as a risk-bearing entity.
``(ii) Clause (i) shall not apply to an organization if--
``(I) the organization is not responsible for the provision
(directly or through arrangements with providers of services)
of inpatient hospital services and physicians' services;
``(II) the organization is a public entity;
``(III) the solvency of the organization is guaranteed by
the State; or
``(IV) the organization is (or is controlled by) one or
more federally-qualified health centers and meets solvency
standards established by the State for such an organization.
For purposes of subclause (IV), the term `control' means the
possession, whether direct or indirect, of the power to
direct or cause the direction of the management and policies
of the organization through membership, board representation,
or an ownership interest equal to or greater than 50.1
percent.''
(b) Effective Date.--The amendments made by subsection (a)
shall apply to contracts entered into or renewed on or after
October 1, 1998.
(c) Transition.--In the case of a health maintenance
organization that as of the date of the enactment of this Act
has entered into a contract with a State for the provision of
medical assistance under title XIX under which the
organization assumes full financial risk and is receiving
capitation payments, the amendment made by subsection
[[Page H4428]]
(a) shall not apply to such organization until 3 years after
the date of the enactment of this Act.
SEC. 3463. APPLICATION OF PRUDENT LAYPERSON STANDARD FOR
EMERGENCY MEDICAL CONDITION AND PROHIBITION OF
GAG RULE RESTRICTIONS.
Section 1903(m) (42 U.S.C. 1396b(m)) is amended by adding
at the end the following:
``(8)(A)(i) Each contract with a health maintenance
organization under this subsection shall require the
organization--
``(I) to provide coverage for emergency services (as
defined in subparagraph (B)) without regard to prior
authorization or the emergency care provider's contractual
relationship with the organization, and
``(II) to comply with guidelines established under section
1852(d)(2) (respecting coordination of post-stabilization
care) in the same manner as such guidelines apply to
MedicarePlus plans offered under part C of title XVIII.
``(B) In subparagraph (A)(i)(I), the term `emergency
services' means, with respect to an individual enrolled with
an organization, covered inpatient and outpatient services
that--
``(i) are furnished by a provider that is qualified to
furnish such services under this title, and
``(ii) are needed to evaluate or stabilize an emergency
medical condition (as defined in subparagraph (C)).
``(C) In subparagraph (B)(ii), the term `emergency medical
condition' means a medical condition manifesting itself by
acute symptoms of sufficient severity such that a prudent
layperson, who possesses an average knowledge of health and
medicine, could reasonably expect the absence of immediate
medical attention to result in--
``(i) placing the health of the individual (or, with
respect to a pregnant woman, the health of the woman or her
unborn child) in serious jeopardy,
``(ii) serious impairment to bodily functions, or
``(iii) serious dysfunction of any bodily organ or part.
``(9)(A) Subject to subparagraphs (B) and (C), under a
contract under this subsection a health maintenance
organization (in relation to an individual enrolled under the
contract) shall not prohibit or otherwise restrict a covered
health care professional (as defined in subparagraph (D))
from advising such an individual who is a patient of the
professional about the health status of the individual or
medical care or treatment for the individual's condition or
disease, regardless of whether benefits for such care or
treatment are provided under the plan, if the professional is
acting within the lawful scope of practice.
``(B) Subparagraph (A) shall not be construed as requiring
a health maintenance organization to provide, reimburse for,
or provide coverage of a counseling or referral service if
the organization--
``(i) objects to the provision of such service on moral or
religious grounds; and
``(ii) in the manner and through the written
instrumentalities such organization deems appropriate, makes
available information on its policies regarding such service
to prospective enrollees before or during enrollment and to
enrollees within 90 days after the date that the organization
or plan adopts a change in policy regarding such a counseling
or referral service.
``(C) Nothing in subparagraph (B) shall be construed to
affect disclosure requirements under State law or under the
Employee Retirement Income Security Act of 1974.
``(D) For purposes of this paragraph, the term `health care
professional' means a physician (as defined in section
1861(r)) or other health care professional if coverage for
the professional's services is provided under the contract
under this subsection for the services of the professional.
Such term includes a podiatrist, optometrist, chiropractor,
psychologist, dentist, physician assistant, physical or
occupational therapist and therapy assistant, speech-language
pathologist, audiologist, registered or licensed practical
nurse (including nurse practitioner, clinical nurse
specialist, certified registered nurse anesthetist, and
certified nurse-midwife), licensed certified social worker,
registered respiratory therapist, and certified respiratory
therapy technician.''.
SEC. 3464. ADDITIONAL FRAUD AND ABUSE PROTECTIONS IN MANAGED
CARE.
(a) Protection Against Marketing Abuses.--Section 1903(m)
(42 U.S.C. 1396b(m)), as amended by section 3463, is
amended--
(1) in paragraph (2)(A)(viii), by inserting ``and
compliance with the requirements of paragraphs (10) and
(11)'' after ``of this subsection'', and
(2) by adding at the end the following:
``(10)(A)(i) A health maintenance organization with respect
to activities under this subsection may not distribute
directly or through any agent or independent contractor
marketing materials within any State--
``(I) without the prior approval of the State; and
``(II) that contain false or materially misleading
information.
``(ii) In the process of reviewing and approving such
materials, the State shall provide for consultation with a
medical care advisory committee.
``(iii) The State may not enter into or renew a contract
with a health maintenance organization for the provision of
services to individuals enrolled under the State plan under
this title if the State determines that the entity
distributed directly or through any agent or independent
contractor marketing materials in violation of clause
(i)(II).
``(B) A health maintenance organization shall distribute
marketing materials to the entire service area of such
organization.
``(C) A health maintenance organization, or any agency of
such organization, may not seek to influence an individual's
enrollment with the organization in conjunction with the sale
of any other insurance.
``(D) Each health maintenance organization shall comply
with such procedures and conditions as the Secretary
prescribes in order to ensure that, before an individual is
enrolled with the organization under this title, the
individual is provided accurate oral and written and
sufficient information to make an informed decision whether
or not to enroll.
``(E) Each health maintenance organization shall not,
directly or indirectly, conduct door-to-door, telephonic, or
other `cold call' marketing of enrollment under this
title.''.
(b) Prohibiting Affiliations With Individuals Debarred by
Federal Agencies.--Section 1903(m) (42 U.S.C. 1396b(m)), as
amended by section 3463 and subsection (a), is further
amended by adding at the end the following:
``(11)(A) A health maintenance organization may not
knowingly--
``(i) have a person described in subparagraph (C) as a
director, officer, partner, or person with beneficial
ownership of more than 5 percent of the organization equity;
or
``(ii) have an employment, consulting, or other agreement
with a person described in such subparagraph for the
provision of items and services that are significant and
material to the organization's obligations under its contract
with the State.
``(B) If a State finds that a health maintenance
organization is not in compliance with clause (i) or (ii) of
subparagraph (A), the State--
``(i) shall notify the Secretary of such noncompliance;
``(ii) may continue an existing agreement with the
organization unless the Secretary (in consultation with the
Inspector General of the Department of Health and Human
Services) directs otherwise; and
``(iii) may not renew or otherwise extend the duration of
an existing agreement with the organization unless the
Secretary (in consultation with the Inspector General of the
Department of Health and Human Services) provides to the
State and to the Congress a written statement describing
compelling reasons that exist for renewing or extending the
agreement.
``(C) A person is described in this subparagraph if such
person--
``(i) is debarred, suspended, or otherwise excluded from
participating in procurement activities under the Federal
acquisition regulation or from participating in
nonprocurement activities under regulations issued pursuant
to Executive Order 12549; or
``(ii) is an affiliate (within the meaning of the Federal
acquisition regulation) of a person described in clause
(i).''.
(c) Application of State Conflict-of-Interest Safeguards.--
Section 1903(m)(2)(A) (42 U.S.C. 1396b(m)(2)(A)), as amended
by section 3461(c), is amended--
(1) by striking ``and'' at the end of clause (xi),
(2) by striking the period at the end of clause (xii) and
inserting ``; and'', and
(3) by inserting after clause (xi) the following:
``(xiii) the State has in effect conflict-of-interest
safeguards with respect to officers and employees of the
State with responsibilities relating to contracts with such
organizations and to any default enrollment process that are
at least as effective as the Federal safeguards provided
under section 27 of the Office of Federal Procurement Policy
Act (41 U.S.C. 423), against conflicts of interest that apply
with respect to Federal procurement officials with comparable
responsibilities with respect to such contracts.''.
(d) Limitation on Availability of FFP for Use of Enrollment
Brokers.--Section 1903(b) (42 U.S.C. 1396b(b)), as amended by
section 3413(b), is amended by adding at the end the
following:
``(5) Amounts expended by a State for the use an enrollment
broker in marketing health maintenance organizations and
other managed care entities to eligible individuals under
this title shall be considered, for purposes of subsection
(a)(7), to be necessary for the proper and efficient
administration of the State plan but only if the following
conditions are met with respect to the broker:
``(A) The broker is independent of any such entity and of
any health care providers (whether or not any such provider
participates in the State plan under this title) that provide
coverage of services in the same State in which the broker is
conducting enrollment activities.
``(B) No person who is an owner, employee, consultant, or
has a contract with the broker either has any direct or
indirect financial interest with such an entity or health
care provider or has been excluded from participation in the
program under this title or title XVIII or debarred by any
Federal agency, or subject to a civil money penalty under
this Act.''.
(e) Effective Date.--The amendments made by this section
shall take effect on January 1, 1998.
SEC. 3465. GRIEVANCES UNDER MANAGED CARE PLANS.
Section 1903(m) (42 U.S.C. 1396b(m)) is amended--
[[Page H4429]]
(1) in paragraph (2)(A), as amended by sections 3461(c) and
3464(c),--
(A) by striking ``and'' at the end of clause (xii),
(B) by striking the period at the end of clause (xiii) and
inserting ``; and'', and
(C) by inserting after clause (xiii) the following new
clause:
``(xiv) such contract provides for compliance of the
organization with the grievance and appeals requirements
described in paragraph (3).''; and
(2) by inserting after paragraph (2) the following new
paragraph:
``(3)(A) An eligible organization must provide a meaningful
and expedited procedure, which includes notice and hearing
requirements, for resolving grievances between the
organization (including any entity or individual through
which the organization provides health care services) and
members enrolled with the organization under this subsection.
Under the procedure any member enrolled with the organization
may at any time file orally or in writing a complaint to
resolve grievances between the member and the organization
before a board of appeals established under subparagraph (C).
``(B)(i) The organization must provide, in a timely manner,
such an enrollee a notice of any denial of services in-
network or denial of payment for out-of-network care or
notice of termination or reduction of services.
``(ii) Such notice shall include the following:
``(I) A clear statement of the reason for the denial.
``(II) An explanation of the complaint process under
subparagraph (C) which is available to the enrollee upon
request.
``(III) An explanation of all other appeal rights available
to all enrollees.
``(IV) A description of how to obtain supporting evidence
for this hearing, including the patient's medical records
from the organization, as well as supporting affidavits from
the attending health care providers.
``(C)(i) Each eligible organization shall establish a board
of appeals to hear and make determinations on complaints by
enrollees under this subsection concerning denials of
coverage or payment for services (whether in-network or out-
of-network) and the medical necessity and appropriateness of
covered items and services.
``(ii) A board of appeals of an eligible organization shall
consist of--
``(I) representatives of the organization, including
physicians, nonphysicians, administrators, and enrollees;
``(II) consumers who are not enrollees; and
``(III) providers with expertise in the field of medicine
which necessitates treatment.
``(iii) A board of appeals shall hear and resolve
complaints within 30 days after the date the complaint is
filed with the board.
``(D) Nothing in this paragraph may be construed to replace
or supersede any appeals mechanism otherwise provided for an
individual entitled to benefits under this title.''.
SEC. 3466. STANDARDS RELATING TO ACCESS TO OBSTETRICAL AND
GYNECOLOGICAL SERVICES UNDER MANAGED CARE
PLANS.
(a) In General.--Section 1903(m)(2)(A) (42 U.S.C.
1396b(m)(2)(A)), as amended by sections 3461(c), 3464(c), and
3465(1), is amended--
(1) by striking ``and'' at the end of clause (xiii),
(2) by striking the period at the end of clause (xiv) and
inserting ``; and'', and
(3) by inserting after clause (xiv) the following:
``(xv) the organization complies with the requirements of
paragraph (12).''.
(b) Requirements.--Section 1903(m) (42 U.S.C. 1396b(m)), as
amended by sections 3463, 3464(a), and 3464(b), is amended by
adding at the end the following new paragraph:
``(12)(A) If a health maintenance organization, under a
contract under this subsection, requires or provides for an
enrollee to designate a participating primary care provider--
``(i) the organization shall permit a female enrollee to
designate an obstetrician-gynecologist who has agreed to be
designated as such, as the enrollee's primary care provider;
and
``(ii) if such an enrollee has not designated such a
provider as a primary care provider, the organization--
``(I) may not require prior authorization by the enrollee's
primary care provider or otherwise for coverage of obstetric
and gynecologic care provided by a participating
obstetrician-gynecologist, or a participating health care
professional practicing in collaboration with the
obstetrician-gynecologist and in accordance with State law,
to the extent such care is otherwise covered, and
``(II) shall treat the ordering of other gynecologic care
by such a participating physician as the prior authorization
of the primary care provider with respect to such care under
the contract.
``(B) Nothing in subparagraph (A)(ii)(II) shall waive any
requirements of coverage relating to medical necessity or
appropriateness with respect to coverage of gynecologic care
so ordered.''.
(c) Effective Date.--The amendments made by this section
shall apply to contracts entered into, renewed, or extended
on or after January 1, 1998.
CHAPTER 3--FEDERAL PAYMENTS
SEC. 3471. REFORMING DISPROPORTIONATE SHARE PAYMENTS UNDER
STATE MEDICAID PROGRAMS.
(a) Direct Payment by State.--Subsection (a)(1) of section
1923 (42 U.S.C. 1396r-4) is amended--
(1) by striking ``and'' at the end of subparagraph (A),
(2) by striking the period at the end of subparagraph (B)
and inserting ``, and'', and
(3) by adding at the end the following new subparagraph:
``(C) provides that payment adjustments under the plan
under this section for services furnished by a hospital on or
after October 1, 1997, for individuals entitled to benefits
under the plan, and enrolled with an entity described in
section 1903(m), under a primary care case management system
(described in section 1905(t)), or other managed care plan--
``(i) are made directly to the hospital by the State, and
``(ii) are not used as part of, and are disregarded in
determining the amount of, prepaid capitation paid under the
State plan with respect to those services.''.
(b) Adjustment to State DSH Allocations.--
(1) In general.--Subsection (f) of such section is
amended--
(A) in paragraph (2)(A), by inserting ``and paragraph (5)''
after ``subparagraph (B)'', and
(B) by adding at the end the following new paragraph:
``(5) Adjustments in dsh allotments.--
``(A) Allotment frozen for states with very low dsh
expenditures.--In the case of a State for which its State
1995 DSH spending did not exceed 1 percent of the total
amount expenditures made under the State plan under this
title for medical assistance during fiscal year 1995 (as
reported by the State no later than January 1, 1997, on HCFA
Form 64), the DSH allotment for each of fiscal years 1998
through 2002 is equal to its State 1995 DSH spending.
``(B) Full reduction for high dsh states.--In the case of a
State which was classified under this subsection as a high
DSH State for fiscal year 1997, the DSH allotment for each of
fiscal years 1998 through 2002 is equal to the State 1995 DSH
spending reduced by the full reduction percentage (described
in subparagraph (D)) for the fiscal year involved.
``(C) Half-reduction for other states.--In the case of a
State not described in subparagraph (A) or (B), the DSH
allotment for each of fiscal years 1998 through 2002 is equal
to the State 1995 DSH spending reduced by \1/2\ of the full
reduction percentage for the fiscal year involved.
``(D) Full reduction percentage.--For purposes of this
paragraph, the `full reduction percentage' for--
``(i) fiscal year 1998 is 2 percent,
``(ii) fiscal year 1999 is 5 percent,
``(iii) fiscal year 2000 is 20 percent,
``(iv) fiscal year 2001 is 30 percent, and
``(v) fiscal year 2002 is 40 percent.
``(E) Definitions.-- In this paragraph:
``(i) State.--The term `State' means the 50 States and the
District of Columbia.
``(ii) State 1995 dsh spending.--The term `State 1995 DSH
spending' means, with respect to a State, the total amount of
payment adjustments made under subsection (c) under the State
plan during fiscal year 1995 as reported by the State no
later than January 1, 1997, on HCFA Form 64.''.
(2) Effective date.--The amendments made by paragraph (1)
shall apply to fiscal years beginning with fiscal year 1998.
(c) Transition Rule.--Effective July 1, 1997, section
1923(g)(2)(A) of the Social Security Act (42 U.S.C. 1396r-
4(g)(2)(A)) shall be applied to the State of California as
though--
(1) ``or that begins on or after July 1, 1997, and before
July 1, 1999'' were inserted in such section after ``January
1, 1995''; and
(2) ``(or 175 percent in the case of a State fiscal year
that begins on or after July 1, 1997, and before July 1,
1999)'' were inserted in such section after ``200 percent''.
SEC. 3472. ADDITIONAL FUNDING FOR STATE EMERGENCY HEALTH
SERVICES FURNISHED TO UNDOCUMENTED ALIENS.
(a) Total Amount Available for Allotment.--There are
available for allotments under this section for each of the 5
fiscal years (beginning with fiscal year 1998) $20,000,000
for payments to certain States under this section.
(b) State Allotment Amount.--
(1) In general.--The Secretary of Health and Human Services
shall compute an allotment for each fiscal year beginning
with fiscal year 1998 and ending with fiscal year 2002 for
each of the 12 States with the highest number of undocumented
aliens. The amount of such allotment for each such State for
a fiscal year shall bear the same ratio to the total amount
available for allotments under subsection (a) for the fiscal
year as the ratio of the number of undocumented aliens in the
State in the fiscal year bears to the total of such numbers
for all such States for such fiscal year. The amount of
allotment to a State provided under this paragraph for a
fiscal year that is not paid out under subsection (c) shall
be available for payment during the subsequent fiscal year.
(2) Determination.--For purposes of paragraph (1), the
number of undocumented aliens in a State under this section
shall be determined based on estimates of the resident
illegal alien population residing in each State prepared by
the Statistics Division of the Immigration and Naturalization
Service as of October 1992 (or as of such later date if such
date is at least 1 year before the beginning of the fiscal
year involved),
(c) Use of Funds.--From the allotments made under
subsection (b), the Secretary
[[Page H4430]]
shall pay to each State amounts the State demonstrates were
paid by the State (or by a political subdivision of the
State) for emergency health services furnished to
undocumented aliens.
(d) State Defined.--For purposes of this section, the term
``State'' includes the District of Columbia.
(e) State Entitlement.--This section constitutes budget
authority in advance of appropriations Acts and represents
the obligation of the Federal Government to provide for the
payment to States of amounts provided under subsection (c).
Subtitle F--Child Health Assistance Program (CHAP)
SEC. 3501. SHORT TITLE OF SUBTITLE; TABLE OF CONTENTS OF
SUBTITLE.
(a) Short Title of Subtitle.--This subtitle may be cited as
the ``Child Health Assistance Program Act of 1997''.
(b) Table of Contents of Subtitle.--The table of contents
of this subtitle is as follows:
Sec. 3501. Short title of subtitle; table of contents.
Sec. 3502. Establishment of Child Health Assistance Program (CHAP).
``TITLE XXI--CHILD HEALTH ASSISTANCE PROGRAM
``Sec. 2101. Purpose; State child health plans.
``Sec. 2102. Contents of State child health plan.
``Sec. 2103. Allotments.
``Sec. 2104. Payments to States.
``Sec. 2105. Process for submission, approval, and amendment of State
child health plans.
``Sec. 2106. Strategic objectives and performance goals; plan
administration.
``Sec. 2107. Annual reports; evaluations.
``Sec. 2108. Definitions.
Sec. 3503. Optional use of State child health assistance funds for
enhanced medicaid match for expanded medicaid
eligibility.
Sec. 3504. Medicaid presumptive eligibility for low-income children.
Sec. 3505. State option of continuation of Medicaid eligibility for
disabled children who lose SSI benefits.
SEC. 3502. ESTABLISHMENT OF CHILD HEALTH ASSISTANCE PROGRAM
(CHAP).
The Social Security Act is amended by adding at the end the
following new title:
``TITLE XXI--CHILD HEALTH ASSISTANCE PROGRAM
``SEC. 2101. PURPOSE; STATE CHILD HEALTH PLANS.
``(a) Purpose.--The purpose of this title is to provide
funds to States to enable them to implement plans to initiate
and expand the provision of child health care assistance to
uninsured, low-income children in an effective and efficient
manner that is coordinated with other sources of coverage for
children. Such assistance may be provided for obtaining
creditable health coverage through methods specified in the
plan, which may include any or all of the following:
``(1) Providing benefits under the State's medicaid plan
under title XIX.
``(2) Obtaining coverage under group health plans or group
or individual health insurance coverage.
``(3) Direct purchase of services for targeted low-income
children from providers, such as Federally qualified health
centers and rural health clinics.
``(4) Other methods specified under the plan for the
provision of health insurance coverage or medical assistance
for targeted low-income children.
``(b) State Child Health Plan Required.--A State is not
eligible for payment under section 2104 unless the State has
submitted to the Secretary under section 2105 a plan that--
``(1) sets forth how the State intends to use the funds
provided under this title to provide child health assistance
to needy children consistent with the provisions of this
title, and
``(2) is approved under section 2105.
``(c) State Entitlement.--This title constitutes budget
authority in advance of appropriations Acts and represents
the obligation of the Federal Government to provide for the
payment to States of amounts provided under section 2104.
``(d) Effective Date.--No State is eligible for payments
under section 2104 for any calendar quarter beginning before
October 1, 1997.
``SEC. 2102. CONTENTS OF STATE CHILD HEALTH PLAN.
``(a) General Background and Description.--A State child
health plan shall include a description, consistent with the
requirements of this title, of--
``(1) the extent to which, and manner in which, children in
the State, including targeted low-income children and other
classes of children classified by income and other relevant
factors, currently have creditable health coverage (as
defined in section 2108(c)(2));
``(2) current State efforts to provide or obtain creditable
health coverage for uncovered children, including the steps
the State is taking to identify and enroll all uncovered
children who are eligible to participate in public health
insurance programs and health insurance programs that involve
public-private partnerships;
``(3) how the plan is designed to be coordinated with such
efforts to increase coverage of children under creditable
health coverage; and
``(4) how the plan will comply with subsection (c)(5).
``(b) General Description of Eligibility Standards and
Methodology.--
``(1) Eligibility standards.--
``(A) In general.--The plan shall include a description of
the standards used to determine the eligibility of targeted
low-income children for child health assistance under the
plan. Such standards may include (to the extent consistent
with this title) those relating to the geographic areas to be
served by the plan, age, income and resources (including any
standards relating to spenddowns and disposition of
resources), residency, disability status, immigration status,
access to or coverage under other health coverage, and
duration of eligibility. Such standards may not discriminate
on the basis of diagnosis.
``(B) Limitations on eligibility standards.--Such
eligibility standards--
``(i) shall, within any defined group of covered targeted
low-income children, not cover such children with higher
family income without covering children with a lower family
income, and
``(ii) may not deny eligibility based on a child having a
preexisting medical condition.
``(2) Methodology.--The plan shall include a description of
methods of establishing and continuing eligibility and
enrollment, including a methodology for computing family
income that is consistent with the methodology used under
section 1902(l)(3)(E).
``(3) Eligibility screening; coordination with other health
coverage programs.--The plan shall include a description of
procedures to be used to ensure--
``(A) through both intake and followup screening, that only
targeted low-income children are furnished child health
assistance under the State child health plan;
``(B) that children found through the screening to be
eligible for medical assistance under the State medicaid plan
under title XIX are enrolled for such assistance under such
plan;
``(C) that the insurance provided under the State child
health plan does not substitute for coverage under group
health plans; and
``(D) coordination with other public and private programs
providing creditable coverage for low-income children.
``(4) Nonentitlement.--Nothing in this title shall be
construed as providing an individual with an entitlement to
child health assistance under a State child health plan.
``(c) Description of Assistance.--
``(1) In general.--A State child health plan shall include
a description of the child health assistance provided under
the plan for targeted low-income children. The child health
assistance provided to a targeted low-income child under the
plan in the form described in paragraph (2) of section
2101(a) shall include benefits (in an amount, duration, and
scope specified under the plan) for at least the following
categories of services:
``(A) Inpatient and outpatient hospital services.
``(B) Physicians' surgical and medical services.
``(C) Laboratory and x-ray services.
``(D) Well-baby and well-child care, including age-
appropriate immunizations.
The previous sentence shall not apply to coverage under a
group health plan if the benefits under such coverage for
individuals under this title are no less than the benefits
for other individuals similarly covered under the plan.
``(2) Items.--The description shall include the following:
``(A) Cost sharing.--Subject to paragraph (3), the amount
(if any) of premiums, deductibles, coinsurance, and other
cost sharing imposed.
``(B) Delivery method.--The State's approach to delivery of
child health assistance, including a general description of--
``(i) the use (or intended use) of different delivery
methods, which may include the delivery methods used under
the medicaid plan under title XIX, fee-for-service, managed
care arrangements (such as capitated health care plans, case
management, and case coordination), direct provision of
health care services (such as through community health
centers and disproportionate share hospitals), vouchers, and
other delivery methods; and
``(ii) utilization control systems.
``(3) Limitations on cost sharing.--
``(A) No cost sharing on preventive benefits.--The plan may
not impose deductibles, coinsurance, or similar cost sharing
with respect to benefits for preventive services.
``(B) Sliding scale.--To the extent practicable, any
premiums imposed under the plan shall be imposed on a sliding
scale related to income and the plan may only vary premiums,
deductibles, coinsurance, and other cost sharing based on the
family income of targeted low-income children only in a
manner that does not favor children from families with higher
income over children from families with lower income.
``(4) Restriction on application of preexisting condition
exclusions.--
``(A) In general.--Subject to subparagraph (B), the State
child health plan shall not permit the imposition of any
preexisting condition exclusion for covered benefits under
the plan.
``(B) Group health plans and group health insurance
coverage.--If the State child health plan provides for
benefits through payment for, or a contract with, a group
health plan or group health insurance coverage, the plan may
permit the imposition of a preexisting condition exclusion
but
[[Page H4431]]
only insofar as it is permitted under the applicable
provisions of part 7 of subtitle B of title I of the Employee
Retirement Income Security Act of 1974 and title XXVII of the
Public Health Service Act.
``(5) Special protection for children with chronic health
conditions and special health care needs.--In the case of a
child who has a chronic condition, life-threatening
condition, or combination of conditions that warrants medical
specialty care and who is eligible for benefits under the
plan with respect to such care, the State child health plan
shall assure access to such care, including the use of a
medical specialist as a primary care provider.
``(6) Secondary payment.--Nothing in this section shall be
construed as preventing a State from denying benefits to an
individual to the extent such benefits are available to the
individual under another public or private health care
insurance program.
``(7) Treatment of cash payments.--Payments in the form of
cash or vouchers provided as child health or other assistance
under the State child health plan to parents, guardians or
other caretakers of a targeted low-income child are not
considered income for purpose of eligibility for, or benefits
provided under, any means-tested Federal or Federally-
assisted program.
``(d) Outreach and Coordination.--A State child health plan
shall include a description of the procedures to be used by
the State to accomplish the following:
``(1) Outreach.--Outreach to families of children likely to
be eligible for child health assistance under the plan or
under other public or private health coverage programs to
inform these families of the availability of, and to assist
them in enrolling their children in, such a program.
``(2) Coordination with other health insurance programs.--
Coordination of the administration of the State program under
this subtitle with other public and private health insurance
programs.
``SEC. 2103. ALLOTMENTS.
``(a) Total Allotment.--The total allotment that is
available under this title for--
``(1) fiscal year 1998 is $2,830,000,000,
``(2) fiscal year 1999 is $2,830,000,000,
``(3) fiscal year 2000 is $2,830,000,000,
``(4) fiscal year 2001 is $2,830,000,000,
``(5) fiscal year 2002 is $2,830,000,000,and
``(6) fiscal year 2003 and each succeeding fiscal year is
$2,850,000,000.
``(b) Allotments to 50 States and District of Columbia.--
``(1) In general.--Subject to paragraphs (4) and (5), of
the total allotment available under subsection (a) for a
fiscal year, reduced by the amount of allotments made under
subsection (c) for the fiscal year, the Secretary shall allot
to each State (other than a State described in such
subsection) with a State child health plan approved under
this title the same proportion as the ratio of--
``(A) the product of (i) the number of uncovered low-income
children for the fiscal year in the State (as determined
under paragraph (2)) and (ii) the State cost factor for that
State (established under paragraph (3)); to
``(B) the sum of the products computed under subparagraph
(A).
``(2) Number of uncovered low-income children.--For the
purposes of paragraph (1)(A)(i), the number of uncovered low-
income children for a fiscal year in a State is equal to the
arithmetic average of the number of low-income children (as
defined in section 2108(c)(4)) with no health insurance
coverage, as reported and defined in the 3 most recent March
supplements to the Current Population Survey of the Bureau of
the Census before the beginning of the fiscal year.
``(3) Adjustment for geographic variations in health
costs.--
``(A) In general.--For purposes of paragraph (1)(A)(ii),
the `State cost factor' for a State for a fiscal year equal
to the sum of--
``(i) 0.15, and
``(ii) 0.85 multiplied by the ratio of--
``(I) the annual average wages per employee for the State
for such year (as determined under subparagraph (B)), to
``(II) the annual average wages per employee for the 50
States and the District of Columbia.
``(B) Annual average wages per employee.--For purposes of
subparagraph (A), the `annual average wages per employee' for
a State, or for all the States. for a fiscal year is equal to
the average of the annual wages per employee for the State or
for the 50 States and the District of Columbia for employees
in the health services industry (SIC code 8000), as reported
by the Bureau of Labor Statistics of the Department of Labor
for each of the for the most recent 3 years before the
beginning of the fiscal year involved.
``(4) Floor for states.--Subject to paragraph (5), in no
case shall the amount of the allotment under this subsection
for one of the 50 States or the District of Columbia for a
year be less than $2,000,000. To the extent that the
application of the previous sentence results in an increase
in the allotment to a State above the amount otherwise
provided, the allotments for the other States and the
District of Columbia under this subsection shall be decreased
in a pro rata manner (but not below $2,000,000) so that the
total of such allotments in a fiscal year does not exceed the
amount otherwise provided for allotment under paragraph (1)
for that fiscal year.
``(5) Offset for expenditures under medicaid presumptive
eligibility.--The amount of the allotment otherwise provided
to a State under this subsection for a fiscal year shall be
reduced by the amount of the payments made to the State under
section 1903(a) for calendar quarters during such fiscal year
that are attributable to provision of medical assistance to a
child during a presumptive eligibility period under section
1920A.
``(c) Allotments to Territories.--
``(1) In general.--Subject to paragraph (3), of the total
allotment under subsection (a) for a fiscal year, the
Secretary shall allot 0.5 percent among each of the
commonwealths and territories described in paragraph (4) in
the same proportion as the percentage specified in paragraph
(2) for such commonwealth or territory bears to the sum of
such percentages for all such commonwealths or territories so
described.
``(2) Percentage.--The percentage specified in this
paragraph for--
``(A) Puerto Rico is 91.6 percent,
``(B) Guam is 3.5 percent,
``(C) Virgin Islands is 2.6 percent,
``(D) American Samoa is 1.2 percent, and
``(E) the Northern Mariana Islands is 1.1 percent.
``(3) Floor.--In no case shall the amount of the allotment
to a commonwealth or territory under paragraph (1) for a
fiscal year be less than $100,000. To the extent that the
application of the previous sentence results in an increase
in the allotment to a commonwealth or territory above the
amount otherwise provided, the allotments for the other
commonwealths and territories under this subsection for the
fiscal year shall be decreased (but not below $100,000) in a
pro rata manner so that the total of such allotments does not
exceed the total amount otherwise provided for allotment
under paragraph (1).
``(4) Commonwealths and territories.--A commonwealth or
territory described in this paragraph is any of the following
if it has a State child health plan approved under this
title:
``(A) Puerto Rico.
``(B) Guam.
``(C) the Virgin Islands.
``(D) American Samoa.
``(E) the Northern Mariana Islands.
``(d) Adjustment for States Using Enhanced Medicaid
Match.--In the case of a State that elects the increased
medicaid matching option under section 1905(t), the amount of
the State's allotment under this section shall be reduced by
the amount of additional payment made under section 1903 that
is attributable to the increase in the Federal medical
assistance percentage effected under such option.
``(e) 3-Year Availability of Amounts Allotted.--Amounts
allotted to a State pursuant to this section for a fiscal
year shall remain available for expenditure by the State
through the end of the second succeeding fiscal year.
``SEC. 2104. PAYMENTS TO STATES.
``(a) In General.--Subject to the succeeding provisions of
this section, the Secretary shall pay to each State with a
program approved under this title, from its allotment under
section 2103 (as may be adjusted under section 2103(d)), an
amount for each quarter up to 80 percent of expenditures
under that program in the quarter for--
``(1) child health assistance for targeted low-income
children;
``(2) health services initiatives for improving the health
of children (including targeted low-income children and other
low-income children);
``(3) expenditures for outreach activities as provided in
section 2102(d)(1); and
``(4) other reasonable costs incurred by the State to
administer the plan.
``(b) Limitation on Certain Payments for Certain
Expenditures.--
``(1) In general.--Funds provided to a State under this
title shall only be used to carry out the purposes of this
title.
``(2) Limitation on expenditures not used for assistance.--
Payment shall not be made under subsection (a) for
expenditures for items described in paragraphs (2), (3), or
(4) of subsection to the extent the total of such
expenditures exceeds 15 percent of total expenditures under
the plan for the period involved (including any in such total
additional Federal medical assistance payments under section
1903(a)(1) that are attributable to an enhanced State
medicaid match under section 1905(t)).
``(3) Purchase of family coverage.--The Secretary shall
establish rules regarding the extent to which payment may be
made under subsection (a)(1) for the purchase of family
coverage under a group health plan or health insurance
coverage that includes coverage of targeted low-income
children. Under such rules such payment may be permitted,
notwithstanding that a portion may be considered attributable
to purchase of coverage for other family members, if the
State demonstrates that purchase of such coverage is cost
effective relative to the amounts that the State would have
paid to obtain comparable coverage only of the targeted low-
income children involved. In making such determination, there
shall be taken into account the costs of providing coverage
for medical assistance for children with similar actuarial
characteristics under section 1902(l).
``(4) Denial of payment for reduction of medicaid
eligibility standards.--No payment may be made under
subsection (a) with respect to child health assistance
provided under a State child health plan to a targeted low-
income child if the child would be eligible for medical
assistance under the State
[[Page H4432]]
plan under title XIX (as such plan was in effect as of June
1, 1997) but for a change in the income or assets standards
or methodology under such plan effected after such date.
``(5) Disallowances for excluded providers.--
``(A) In general.--Payment shall not be made to a State
under subsection (a) for expenditures for items and services
furnished--
``(i) by a provider who was excluded from participation
under title V, XVIII, or XX or under this title pursuant to
section 1128, 1128A, 1156, or 1842(j)(2), or
``(ii) under the medical direction or on the prescription
of a physician who was so excluded, if the provider of the
services knew or had reason to know of the exclusion.
``(B) Exception for emergency services.--Subparagraph (A)
shall not apply to emergency items or services, not including
hospital emergency room services.
``(6) Use of non-federal funds for state matching
requirement.--Amounts provided by the Federal Government, or
services assisted or subsidized to any significant extent by
the Federal Government, may not be included in determining
the amount of non-Federal contributions required under
subsection (a).
``(7) Treatment of third party liability.--No payment shall
be made to a State under this section for expenditures for
child health assistance provided for a targeted low-income
child under its plan to the extent that a private insurer (as
defined by the Secretary by regulation and including a group
health plan (as defined in section 607(1) of the Employee
Retirement Income Security Act of 1974), a service benefit
plan, and a health maintenance organization) would have been
obligated to provide such assistance but for a provision of
its insurance contract which has the effect of limiting or
excluding such obligation because the individual is eligible
for or is provided child health assistance under the plan.
``(8) Secondary payer provisions.--Except as otherwise
provided by law, no payment shall be made to a State under
this section for expenditures for child health assistance
provided for a targeted low-income child under its plan to
the extent that payment has been made or can reasonably be
expected to be made promptly (as determined in accordance
with regulations) under any other federally operated or
financed health care insurance program, other than an
insurance program operated or financed by the Indian Health
Service, as identified by the Secretary. For purposes of this
paragraph, rules similar to the rules for overpayments under
section 1903(d)(2) shall apply.
``(9) Limitation on payment for abortions.--
``(A) In general.--Payment shall not be made to a State
under this section for any amount expended under the State
plan to pay for any abortion or to assist in the purchase, in
whole or in part, of health benefit coverage that includes
coverage of abortion.
``(B) Exception.--Subparagraph (A) shall not apply to an
abortion--
``(i) if the pregnancy is the result of an act of rape or
incest, or
``(ii) in the case where a woman suffers from a physical
disorder, illness, or injury that would, as certified by a
physician, place the woman in danger of death unless an
abortion is performed.
``(c) Advance Payment; Retrospective Adjustment.--The
Secretary may make payments under this section for each
quarter on the basis of advance estimates of expenditures
submitted by the State and other investigation the Secretary
may find necessary, and may reduce or increase the payments
as necessary to adjust for any overpayment or underpayment
for prior quarters.
``SEC. 2105. PROCESS FOR SUBMISSION, APPROVAL, AND AMENDMENT
OF STATE CHILD HEALTH PLANS.
``(a) Initial Plan.--
``(1) In general.--As a condition of receiving funding
under section 2104, a State shall submit to the Secretary a
State child health plan that meets the applicable
requirements of this title.
``(2) Approval.--Except as the Secretary may provide under
subsection (e), a State plan submitted under paragraph (1)--
``(A) shall be approved for purposes of this title, and
``(B) shall be effective beginning with a calendar quarter
that is specified in the plan, but in no case earlier than
the first calendar quarter that begins at least 60 days after
the date the plan is submitted.
``(b) Plan Amendments.--
``(1) In general.--A State may amend, in whole or in part,
its State child health plan at any time through transmittal
of a plan amendment.
``(2) Approval.--except as the secretary may provide under
subsection (e), an amendment to a state plan submitted under
paragraph (1)--
``(A) shall be approved for purposes of this title, and
``(B) shall be effective as provided in paragraph (3).
``(3) Effective dates for amendments.--
``(A) In general.--Subject to the succeeding provisions of
this paragraph, an amendment to a State plan shall take
effect on one or more effective dates specified in the
amendment.
``(B) Amendments relating to eligibility or benefits.--
``(i) Notice requirement.--Any plan amendment that
eliminates or restricts eligibility or benefits under the
plan may not take effect unless the State certifies that it
has provided prior or contemporaneous public notice of the
change, in a form and manner provided under applicable State
law.
``(ii) Timely transmittal.--Any plan amendment that
eliminates or restricts eligibility or benefits under the
plan shall not be effective for longer than a 60-day period
unless the amendment has been transmitted to the Secretary
before the end of such period.
``(C) Other amendments.--Any plan amendment that is not
described in subparagraph (C) becomes effective in a State
fiscal year may not remain in effect after the end of such
fiscal year (or, if later, the end of the 90-day period on
which it becomes effective) unless the amendment has been
transmitted to the Secretary.
``(c) Disapproval of Plans and Plan Amendments.--
``(1) Prompt review of plan submittals.--The Secretary
shall promptly review State plans and plan amendments
submitted under this section to determine if they
substantially comply with the requirements of this title.
``(2) 90-day approval deadlines.--A State plan or plan
amendment is considered approved unless the Secretary
notifies the State in writing, within 90 days after receipt
of the plan or amendment, that the plan or amendment is
disapproved (and the reasons for disapproval) or that
specified additional information is needed.
``(3) Correction.--In the case of a disapproval of a plan
or plan amendment, the Secretary shall provide a State with a
reasonable opportunity for correction before taking financial
sanctions against the State on the basis of such disapproval.
``(d) Program Operation.--
``(1) In general.--The State shall conduct the program in
accordance with the plan (and any amendments) approved under
subsection (c) and with the requirements of this title.
``(2) Violations.--The Secretary shall establish a process
for enforcing requirements under this title. Such process
shall provide for the withholding of funds in the case of
substantial noncompliance with such requirements. In the case
of an enforcement action against a State under this
paragraph, the Secretary shall provide a State with a
reasonable opportunity for correction before taking financial
sanctions against the State on the basis of such an action.
``(e) Continued Approval.--An approved State child health
plan shall continue in effect unless and until the State
amends the plan under subsection (b) or the Secretary finds
substantial noncompliance of the plan with the requirements
of this title under section subsection (d)(2).
``SEC. 2106. STRATEGIC OBJECTIVES AND PERFORMANCE GOALS; PLAN
ADMINISTRATION.
``(a) Strategic Objectives and Performance Goals.--
``(1) Description.--A State child health plan shall include
a description of--
``(A) the strategic objectives,
``(B) the performance goals, and
``(C) the performance measures,
the State has established for providing child health
assistance to targeted low-income children under the plan and
otherwise for maximizing health coverage for other low-income
children and children generally in the State.
``(2) Strategic objectives.--Such plan shall identify
specific strategic objectives relating to increasing the
extent of creditable health coverage among targeted low-
income children and other low-income children.
``(3) Performance goals.--Such plan shall specify one or
more performance goals for each such strategic objective so
identified.
``(4) Performance measures.--Such plan shall describe how
performance under the plan will be--
``(A) measured through objective, independently verifiable
means, and
``(B) compared against performance goals, in order to
determine the State's performance under this title.
``(b) Records, Reports, Audits, and Evaluation.--
``(1) Data collection, records, and reports.--A State child
health plan shall include an assurance that the State will
collect the data, maintain the records, and furnish the
reports to the Secretary, at the times and in the
standardized format the Secretary may require in order to
enable the Secretary to monitor State program administration
and compliance and to evaluate and compare the effectiveness
of State plans under this title.
``(2) State assessment and study.--A State child health
plan shall include a description of the State's plan for the
annual assessments and reports under section 2107(a) and the
evaluation required by section 2107(b).
``(3) Audits.--A State child health plan shall include an
assurance that the State will afford the Secretary access to
any records or information relating to the plan for the
purposes of review or audit.
``(c) Program Development Process.--A State child health
plan shall include a description of the process used to
involve the public in the design and implementation of the
plan and the method for ensuring ongoing public involvement.
``(d) Program Budget.--A State child health plan shall
include a description of the budget for the plan. The
description shall be updated periodically as necessary and
shall include details on the planned use of funds
[[Page H4433]]
and the sources of the non-Federal share of plan
expenditures, including any requirements for cost sharing by
beneficiaries.
``(e) Application of Certain General Provisions.--The
following sections in part A of title XI shall apply to
States under this title in the same manner as they applied to
a State under title XIX:
``(1) Section 1101(a)(1) (relating to definition of State).
``(2) Section 1116 (relating to administrative and judicial
review), but only insofar as consistent with the provisions
of part B.
``(3) Section 1124 (relating to disclosure of ownership and
related information).
``(4) Section 1126 (relating to disclosure of information
about certain convicted individuals).
``(5) Section 1128B(d) (relating to criminal penalties for
certain additional charges).
``(6) Section 1132 (relating to periods within which claims
must be filed).
``SEC. 2107. ANNUAL REPORTS; EVALUATIONS.
``(a) Annual Report.--The State shall--
``(1) assess the operation of the State plan under this
title in each fiscal year, including the progress made in
reducing the number of uncovered low-income children; and
``(2) report to the Secretary, by January 1 following the
end of the fiscal year, on the result of the assessment.
``(b) State Evaluations.--
``(1) In general.--By March 31, 2000, each State that has a
State child health plan shall submit to the Secretary an
evaluation that includes each of the following:
``(A) An assessment of the effectiveness of the State plan
in increasing the number of children with creditable health
coverage.;
``(B) A description and analysis of the effectiveness of
elements of the State plan, including--
``(i) the characteristics of the children and families
assisted under the State plan including age of the children,
family income, and the assisted child's access to or coverage
by other health insurance prior to the State plan and after
eligibility for the State plan ends,
``(ii) the quality of health coverage provided including
the types of benefits provided,
``(iii) the amount and level (payment of part or all of the
premium) of assistance provided by the State,
``(iv) the service area of the State plan,
``(v) the time limits for coverage of a child under the
State plan,
``(vi) the State's choice of health insurance plans and
other methods used for providing child health assistance ,
and
``(vii) the sources of non-Federal funding used in the
State plan;
``(C) an assessment of the effectiveness of other public
and private programs in the State in increasing the
availability of affordable quality individual and family
health insurance for children;
``(D) a review and assessment of State activities to
coordinate the plan under this title with other public and
private programs providing health care and health care
financing, including Medicaid and maternal and child health
services;
``(E) an analysis of changes and trends in the State that
affect the provision of accessible, affordable, quality
health insurance and health care to children;
``(F) a description of any plans the State has for
improving the availability of health insurance and health
care for children;
``(G) recommendations for improving the program under this
title; and
``(H) any other matters the State and the Secretary
consider appropriate.
``(2) Report of the secretary.--The Secretary shall submit
to the Congress and make available to the public by December
31, 2000, a report based on the evaluations submitted by
States under paragraph (1), containing any conclusions and
recommendations the Secretary considers appropriate.
``SEC. 2108. DEFINITIONS.
``(a) Child Health Assistance.--For purposes of this title,
the term `child health assistance' means payment of part or
all of the cost of any of the following, or assistance in the
purchase, in whole or in part, of health benefit coverage
that includes any of the following, for targeted low-income
children (as defined in subsection (b)) as specified under
the State plan:
``(1) Inpatient hospital services.
``(2) Outpatient hospital services.
``(3) Physician services.
``(4) Surgical services.
``(5) Clinic services (including health center services)
and other ambulatory health care services.
``(6) Prescription drugs and biologicals and the
administration of such drugs and biologicals, only if such
drugs and biologicals are not furnished for the purpose of
causing, or assisting in causing, the death, suicide,
euthanasia, or mercy killing of a person.
``(7) Over-the-counter medications.
``(8) Laboratory and radiological services.
``(9) Prenatal care and prepregnancy family planning
services and supplies.
``(10) Inpatient mental health services, including services
furnished in a State-operated mental hospital and including
residential or other 24-hour therapeutically planned
structured services.
``(11) Outpatient mental health services, including
services furnished in a State-operated mental hospital and
including community-based services.
``(12) Durable medical equipment and other medically-
related or remedial devices (such as prosthetic devices,
implants, eyeglasses, hearing aids, dental devices, and
adaptive devices).
``(13) Disposable medical supplies.
``(14) Home and community-based health care services and
related supportive services (such as home health nursing
services, home health aide services, personal care,
assistance with activities of daily living, chore services,
day care services, respite care services, training for family
members, and minor modifications to the home).
``(15) Nursing care services (such as nurse practitioner
services, nurse midwife services, advanced practice nurse
services, private duty nursing care, pediatric nurse
services, and respiratory care services) in a home, school,
or other setting.
``(16) Abortion only if necessary to save the life of the
mother or if the pregnancy is the result of an act of rape or
incest.
``(17) Dental services.
``(18) Inpatient substance abuse treatment services and
residential substance abuse treatment services.
``(19) Outpatient substance abuse treatment services.
``(20) Case management services.
``(21) Care coordination services.
``(22) Physical therapy, occupational therapy, and services
for individuals with speech, hearing, and language disorders.
``(23) Hospice care.
``(24) Any other medical, diagnostic, screening,
preventive, restorative, remedial, therapeutic, or
rehabilitative services (whether in a facility, home, school,
or other setting) if recognized by State law and only if the
service is--
``(A) prescribed by or furnished by a physician or other
licensed or registered practitioner within the scope of
practice as defined by State law,
``(B) performed under the general supervision or at the
direction of a physician, or
``(C) furnished by a health care facility that is operated
by a State or local government or is licensed under State law
and operating within the scope of the license.
``(25) Premiums for private health care insurance coverage.
``(26) Medical transportation.
``(27) Enabling services (such as transportation,
translation, and outreach services) only if designed to
increase the accessibility of primary and preventive health
care services for eligible low-income individuals.
``(28) Any other health care services or items specified by
the Secretary and not excluded under this section.
``(b) Targeted Low-Income Child Defined.--For purposes of
this title--
``(1) In general.--The term `targeted low-income child'
means a child--
``(A) who has been determined eligible by the State for
child health assistance under the State plan;
``(B) whose family income (as determined under the State
child health plan)--
``(i) exceeds the medicaid applicable income level (as
defined in paragraph (2) and expressed as a percentage of the
poverty line), but
``(ii) but does not exceed an income level that is 75
percentage points higher (as so expressed) than the medicaid
applicable income level, or, if higher, 133 percent of the
poverty line for a family of the size involved; and
``(C) who is not found to be eligible for medical
assistance under title XIX or covered under a group health
plan or under health insurance coverage (as such terms are
defined in section 2791 of the Public Health Service Act).
Such term does not include a child who is an inmate of a
public institution.
``(2) Medicaid applicable income level.--The term `medicaid
applicable income level' means, with respect to a child, the
effective income level (expressed as a percent of the poverty
line) that has been specified under the State plan under
title XIX (including under a waiver authorized by the
Secretary or under section 1902(r)(2)), as of June 1, 1997,
for the child to be eligible for medical assistance under
section 1902(l)(2) for the age of such child. In applying the
previous sentence in the case of a child described in section
1902(l)(2)(D), such level shall be applied taking into
account the expanded coverage effected among such children
under such section with the passage of time.
``(c) Additional Definitions.--For purposes of this title:
``(1) Child.--The term `child' means an individual under 19
years of age.
``(2) Creditable health coverage.--The term `creditable
health coverage' has the meaning given the term `creditable
coverage' under section 2701(c) of the Public Health Service
Act (42 U.S.C. 300gg(c)) and includes coverage (including the
direct provision of services) provided to a targeted low-
income child under this title.
``(3) Group health plan; health insurance coverage; etc.--
The terms `group health plan', `group health insurance
coverage', and `health insurance coverage' have the meanings
given such terms in section 2191 of the Public Health Service
Act.
``(4) Low-income.--The term `low-income child' means a
child whose family income is below 300 percent of the poverty
line for a family of the size involved.
``(5) Poverty line defined.--The term `poverty line' has
the meaning given such term in section 673(2) of the
Community Services Block Grant Act (42 U.S.C. 9902(2)),
including any revision required by such section.
[[Page H4434]]
``(6) Preexisting condition exclusion.--The term
`preexisting condition exclusion' has the meaning given such
term in section 2701(b)(1)(A) of the Public Health Service
Act (42 U.S.C. 300gg(b)(1)(A)).
``(7) State child health plan; plan.--Unless the context
otherwise requires, the terms `State child health plan' and
`plan' mean a State child health plan approved under section
2105.
``(8) Uncovered child.--The term `uncovered child' means a
child that does not have creditable health coverage.''.
(b) Conforming Amendments.--
(1) Definition of state.--Section 1101(a)(1) is amended--
(A) by striking ``and XIX'' and inserting ``XIX, and XXI'',
and
(B) by striking ``title XIX'' and inserting ``titles XIX
and XXI''.
SEC. 3503. OPTIONAL USE OF STATE CHILD HEALTH ASSISTANCE
FUNDS FOR ENHANCED MEDICAID MATCH FOR EXPANDED
MEDICAID ELIGIBILITY.
(a) Increased FMAP for Medical Assistance for Expanded
Coverage of Targeted Low-Income Children.--Section 1905 of
the Social Security Act (42 U.S.C. 1396d) is amended--
(1) in subsection (b), by adding at the end the following
new sentence: ``Notwithstanding the first sentence of this
subsection, in the case of a State plan that meets the
condition described in subsection (t)(1), with respect to
expenditures for medical assistance for optional targeted
low-income children described in subsection (t)(2), the
Federal medical assistance percentage is equal to the
enhanced medical assistance percentage described in
subsection (t)(3).''; and
(2) by adding at the end the following new subsection:
``(t)(1) The conditions described in this paragraph for a
State plan are as follows:
``(A) The plan is not applying income and resource
standards and methodologies for the purpose of determining
eligibility of individuals under section 1902(l) that are
more restrictive than those applied as of June 1, 1997, for
the purpose of determining eligibility of individuals under
such section.
``(B) The plan provides for such reporting of information
about expenditures and payments attributable to the operation
of this subsection as the Secretary deems necessary in order
to carry out sections 2103(d) and 2104(b)(2).
``(C) The amount of the increased payments under section
1903(a) resulting from the application of this subsection
does not exceed the total amount of any allotment not
otherwise expended by the State under section 2103 for the
period involved.
``(2) For purposes of subsection (b), the term `optional
targeted low-income child' means a targeted low-income child
described in section 2108(b)(1) who would not qualify for
medical assistance under the State plan under this title
based on such plan as in effect on June 1, 1997 (taking into
account the process of individuals aging into eligibility
under section 1902(l)(2)(D)).
``(3) The enhanced medical assistance percentage described
in this paragraph for a State is equal to the Federal medical
assistance percentage (as defined in the first sentence of
subsection (b)) for the State increased by a number of
percentage points equal to 30 percent of the number of
percentage points by which (A) such Federal medical
assistance percentage for the State, is less than (B) 100
percent.
``(4) Notwithstanding any other provision of this title, a
State plan under this title may impose a limit on the number
of optional targeted low-income children described in
paragraph (2).''.
(b) Effective Date.--The amendments made by this section
shall apply to medical assistance for items and services
furnished on or after October 1, 1997.
SEC. 3504. MEDICAID PRESUMPTIVE ELIGIBILITY FOR LOW-INCOME
CHILDREN.
(a) In General.--Title XIX of the Social Security Act is
amended by inserting after section 1920 the following new
section:
``presumptive eligibility for children
``Sec. 1920A. (a) A State plan approved under section 1902
may provide for making medical assistance with respect to
health care items and services covered under the State plan
available to a child during a presumptive eligibility period.
``(b) For purposes of this section:
``(1) The term `child' means an individual under 19 years
of age.
``(2) The term `presumptive eligibility period' means, with
respect to a child, the period that--
``(A) begins with the date on which a qualified entity
determines, on the basis of preliminary information, that the
family income of the child does not exceed the applicable
income level of eligibility under the State plan, and
``(B) ends with (and includes) the earlier of--
``(i) the day on which a determination is made with respect
to the eligibility of the child for medical assistance under
the State plan, or
``(ii) in the case of a child on whose behalf an
application is not filed by the last day of the month
following the month during which the entity makes the
determination referred to in subparagraph (A), such last day.
``(3)(A) Subject to subparagraph (B), the term `qualified
entity' means any entity that--
``(i)(I) is eligible for payments under a State plan
approved under this title and provides items and services
described in subsection (a) or (II) is authorized to
determine eligibility of a child to participate in a Head
Start program under the Head Start Act (42 U.S.C. 9821 et
seq.), eligibility of a child to receive child care services
for which financial assistance is provided under the Child
Care and Development Block Grant Act of 1990 (42 U.S.C. 9858
et seq.), eligibility of an infant or child to receive
assistance under the special supplemental nutrition program
for women, infants, and children (WIC) under section 17 of
the Child Nutrition Act of 1966 (42 U.S.C. 1786); and
``(ii) is determined by the State agency to be capable of
making determinations of the type described in paragraph
(1)(A).
``(B) The Secretary may issue regulations further limiting
those entities that may become qualified entities in order to
prevent fraud and abuse and for other reasons.
``(C) Nothing in this section shall be construed as
preventing a State from limiting the classes of entities that
may become qualified entities, consistent with any
limitations imposed under subparagraph (B).
``(c)(1) The State agency shall provide qualified entities
with--
``(A) such forms as are necessary for an application to be
made on behalf of a child for medical assistance under the
State plan, and
``(B) information on how to assist parents, guardians, and
other persons in completing and filing such forms.
``(2) A qualified entity that determines under subsection
(b)(1)(A) that a child is presumptively eligible for medical
assistance under a State plan shall--
``(A) notify the State agency of the determination within 5
working days after the date on which determination is made,
and
``(B) inform the parent or custodian of the child at the
time the determination is made that an application for
medical assistance under the State plan is required to be
made by not later than the last day of the month following
the month during which the determination is made.
``(3) In the case of a child who is determined by a
qualified entity to be presumptively eligible for medical
assistance under a State plan, the parent, guardian, or other
person shall make application on behalf of the child for
medical assistance under such plan by not later than the last
day of the month following the month during which the
determination is made, which application may be the
application used for the receipt of medical assistance by
individuals described in section 1902(l)(1).
``(d) Notwithstanding any other provision of this title,
medical assistance for items and services described in
subsection (a) that--
``(1) are furnished to a child--
``(A) during a presumptive eligibility period,
``(B) by a entity that is eligible for payments under the
State plan; and
``(2) are included in the care and services covered by a
State plan;
shall be treated as medical assistance provided by such plan
for purposes of section 1903.''.
(b) Conforming Amendments.--(1) Section 1902(a)(47) of such
Act (42 U.S.C. 1396a(a)(47)) is amended by inserting before
the semicolon at the end the following: ``and provide for
making medical assistance for items and services described in
subsection (a) of section 1920A available to children during
a presumptive eligibility period in accordance with such
section''.
(2) Section 1903(u)(1)(D)(v) of such Act (42 U.S.C.
1396b(u)(1)(D)(v)) of such Act is amended by inserting before
the period at the end the following: ``or for items and
services described in subsection (a) of section 1920A
provided to a child during a presumptive eligibility period
under such section''.
(c) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act.
SEC. 3505. STATE OPTION OF CONTINUATION OF MEDICAID
ELIGIBILITY FOR DISABLED CHILDREN WHO LOSE SSI
BENEFITS.
Section 1902(a)(10)(A)(ii) (42 U.S.C. 1396a(a)(10)(A)(ii))
is amended--
(1) by striking ``or'' at the end of subclause (XI),
(2) by striking ``or'' at the end of subclause (XII), and
(3) by adding at the end the following:
``(XIII) with respect to whom supplemental security income
benefits were being paid under title XVI as of the date of
the enactment of section 211(a) of the Personal
Responsibility and Work Opportunity Reconciliation Act of
1996 (P.L. 104-193)) and would continue to be paid but for
the enactment of that section;''.
TITLE IV--COMMITTEE ON COMMERCE--MEDICARE
SEC. 4000. AMENDMENTS TO SOCIAL SECURITY ACT AND REFERENCES
TO OBRA; TABLE OF CONTENTS OF TITLE.
(a) Amendments to Social Security Act.--Except as otherwise
specifically provided, whenever in this title an amendment is
expressed in terms of an amendment to or repeal of a section
or other provision, the reference shall be considered to be
made to that section or other provision of the Social
Security Act.
(b) References to OBRA.--In this title, the terms ``OBRA-
1986'', ``OBRA-1987'', ``OBRA-1989'', ``OBRA-1990'', and
``OBRA-1993'' refer to the Omnibus Budget Reconciliation Act
of 1986 (Public Law 99-509), the Omnibus Budget
Reconciliation Act of 1987 (Public Law 100-203), the Omnibus
Budget
[[Page H4435]]
Reconciliation Act of 1989 (Public Law 101-239), the Omnibus
Budget Reconciliation Act of 1990 (Public Law 101-508), and
the Omnibus Budget Reconciliation Act of 1993 (Public Law
103-66), respectively.
(c) Table of Contents of Title.--The table of contents of
this title is as follows:
Sec. 4000. Amendments to Social Security Act and references to OBRA;
table of contents of title.
Subtitle A--MedicarePlus Program
Chapter 1--MedicarePlus Program
SUBCHAPTER A--MEDICAREPLUS PROGRAM
Sec. 4001. Establishment of MedicarePlus program.
``Part C--MedicarePlus Program
``Sec. 1851. Eligibility, election, and enrollment.
``Sec. 1852. Benefits and beneficiary protections.
``Sec. 1853. Payments to MedicarePlus organizations.
``Sec. 1854. Premiums.
``Sec. 1855. Organizational and financial requirements for MedicarePlus
organizations; provider-sponsored organizations.
``Sec. 1856. Establishment of standards.
``Sec. 1857. Contracts with MedicarePlus organizations.
``Sec. 1859. Definitions; miscellaneous provisions.
Sec. 4002. Transitional rules for current medicare HMO program.
Sec. 4003. Conforming changes in medigap program.
SUBCHAPTER B--SPECIAL RULES FOR MEDICAREPLUS MEDICAL SAVINGS ACCOUNTS
Sec. 4006. MedicarePlus MSA.
SUBCHAPTER C--GME, IME, AND DSH PAYMENTS FOR MANAGED CARE ENROLLEES
Sec. 4008. Graduate medical education and indirect medical education
payments for managed care enrollees.
Sec. 4009. Disproportionate share hospital payments for managed care
enrollees.
Chapter 2--Integrated Long-term Care Programs
SUBCHAPTER A--PROGRAMS OF ALL-INCLUSIVE CARE FOR THE ELDERLY (PACE)
Sec. 4011. Reference to coverage of PACE under the medicare program.
Sec. 4012. Reference to establishment of PACE program as medicaid State
option.
SUBCHAPTER B--SOCIAL HEALTH MAINTENANCE ORGANIZATIONS (SHMOS)
Sec. 4015. Social health maintenance organizations (SHMOs).
SUBCHAPTER C--OTHER PROGRAMS
Sec. 4018. Orderly transition of municipal health service demonstration
projects.
Sec. 4019. Extension of certain medicare community nursing organization
demonstration projects.
Chapter 3--Medicare Payment Advisory Commission
Sec. 4021. Medicare Payment Advisory Commission.
Chapter 4--Medigap Protections
Sec. 4031. Medigap protections.
Sec. 4032. Medicare prepaid competitive pricing demonstration project.
Subtitle B--Prevention Initiatives
Sec. 4101. Screening mammography.
Sec. 4102. Screening pap smear and pelvic exams.
Sec. 4103. Prostate cancer screening tests.
Sec. 4104. Coverage of colorectal screening.
Sec. 4105. Diabetes screening tests.
Sec. 4106. Standardization of medicare coverage of bone mass
measurements.
Sec. 4107. Vaccines outreach expansion.
Sec. 4108. Study on preventive benefits.
Subtitle C--Rural Initiatives
Sec. 4206. Informatics, telemedicine, and education demonstration
project.
Subtitle D--Anti-Fraud and Abuse Provisions
Sec. 4301. Permanent exclusion for those convicted of 3 health care
related crimes.
Sec. 4302. Authority to refuse to enter into medicare agreements with
individuals or entities convicted of felonies.
Sec. 4303. Inclusion of toll-free number to report medicare waste,
fraud, and abuse in explanation of benefits forms.
Sec. 4304. Liability of medicare carriers and fiscal intermediaries for
claims submitted by excluded providers.
Sec. 4305. Exclusion of entity controlled by family member of a
sanctioned individual.
Sec. 4306. Imposition of civil money penalties.
Sec. 4307. Disclosure of information and surety bonds.
Sec. 4308. Provision of certain identification numbers.
Sec. 4309. Advisory opinions regarding certain physician self-referral
provisions.
Sec. 4310. Nondiscrimination in post-hospital referral to home health
agencies.
Sec. 4311. Other fraud and abuse related provisions.
Subtitle E--Prospective Payment Systems
Chapter 2--Payment Under Part B
SUBCHAPTER A--PAYMENT FOR HOSPITAL OUTPATIENT DEPARTMENT SERVICES
Sec. 4411. Elimination of formula-driven overpayments (FDO) for certain
outpatient hospital services.
Sec. 4412. Extension of reductions in payments for costs of hospital
outpatient services.
Sec. 4413. Prospective payment system for hospital outpatient
department services.
SUBCHAPTER B--REHABILITATION SERVICES
Sec. 4421. Rehabilitation agencies and services.
Sec. 4422. Comprehensive outpatient rehabilitation facilities (corf).
SUBCHAPTER C--AMBULANCE SERVICES
Sec. 4431. Payments for ambulance services.
Sec. 4432. Demonstration of coverage of ambulance services under
medicare through contracts with units of local
government.
Chapter 3--Payment Under Parts A and B
Sec. 4441. Prospective payment for home health services.
Subtitle G--Provisions Relating to Part B Only
Chapter 1--Physicians' Services
Sec. 4601. Establishment of single conversion factor for 1998.
Sec. 4602. Establishing update to conversion factor to match spending
under sustainable growth rate.
Sec. 4603. Replacement of volume performance standard with sustainable
growth rate.
Sec. 4604. Payment rules for anesthesia services.
Sec. 4605. Implementation of resource-based physician practice expense.
Sec. 4606. Dissemination of information on high per admission relative
values for in-hospital physicians' services.
Sec. 4607. No X-ray required for chiropractic services.
Sec. 4608. Temporary coverage restoration for portable
electrocardiogram transportation.
Chapter 2--Other Payment Provisions
Sec. 4611. Payments for durable medical equipment.
Sec. 4612. Oxygen and oxygen equipment.
Sec. 4613. Reduction in updates to payment amounts for clinical
diagnostic laboratory tests.
Sec. 4614. Simplification in administration of laboratory services
benefit.
Sec. 4615. Updates for ambulatory surgical services.
Sec. 4616. Reimbursement for drugs and biologicals.
Sec. 4617. Coverage of oral anti-nausea drugs under chemotherapeutic
regimen.
Sec. 4618. Rural health clinic services.
Sec. 4619. Increased medicare reimbursement for nurse practitioners and
clinical nurse specialists.
Sec. 4620. Increased medicare reimbursement for physician assistants.
Sec. 4621. Renal dialysis-related services.
Sec. 4622. Payment for cochlear implants as customized durable medical
equipment.
Chapter 3--Part B Premium
Sec. 4631. Part B premium.
Subtitle H--Provisions Relating to Parts A and B
Chapter 1--Provisions Relating to Medicare Secondary Payer
Sec. 4701. Permanent extension and revision of certain secondary payer
provisions.
Sec. 4702. Clarification of time and filing limitations.
Sec. 4703. Permitting recovery against third party administrators.
Chapter 2--Home Health Services
Sec. 4711. Recapturing savings resulting from temporary freeze on
payment increases for home health services.
Sec. 4712. Interim payments for home health services.
Sec. 4713. Clarification of part-time or intermittent nursing care.
Sec. 4714. Study of definition of homebound.
Sec. 4715. Payment based on location where home health service is
furnished.
Sec. 4716. Normative standards for home health claims denials,
Sec. 4717. No home health benefits based solely on drawing blood.
Sec. 4718. Making part B primary payor for certain home health
services.
Chapter 3--Baby Boom Generation Medicare Commission
Sec. 4721. Bipartisan Commission on the Effect of the Baby Boom
Generation on the Medicare Program.
Chapter 4--Provisions Relating to Direct Graduate Medical Education
Sec. 4731. Limitation on payment based on number of residents and
implementation of rolling average FTE count.
Sec. 4732. Phased-in limitation on hospital overhead and supervisory
physician component of direct medical education costs.
Sec. 4733. Permitting payment to non-hospital providers.
[[Page H4436]]
Sec. 4734. Incentive payments under plans for voluntary reduction in
number of residents.
Sec. 4735. Demonstration project on use of consortia.
Sec. 4736. Recommendations on long-term payment policies regarding
financing teaching hospitals and graduate medical
education.
Sec. 4737. Medicare special reimbursement rule for certain combined
residency programs.
Chapter 5--Other Provisions
Sec. 4741. Centers of excellence.
Sec. 4742. Medicare part B special enrollment period and waiver of part
B late enrollment penalty and medigap special open
enrollment period for certain military retirees and
dependents.
Sec. 4743. Competitive bidding for certain items and services.
Subtitle I--Medical Liability Reform
Chapter 1--General Provisions
Sec. 4801. Federal reform of health care liability actions.
Sec. 4802. Definitions.
Sec. 4803. Effective date.
Chapter 2--Uniform Standards for Health Care Liability Actions
Sec. 4811. Statute of limitations.
Sec. 4812. Calculation and payment of damages.
Sec. 4813. Alternative dispute resolution.
Subtitle A--MedicarePlus Program
CHAPTER 1--MEDICAREPLUS PROGRAM
Subchapter A--MedicarePlus Program
SEC. 4001. ESTABLISHMENT OF MEDICAREPLUS PROGRAM.
(a) In General.--Title XVIII is amended by redesignating
part C as part D and by inserting after part B the following
new part:
``Part C--MedicarePlus Program
``eligibility, election, and enrollment
``Sec. 1851. (a) Choice of Medicare Benefits Through
MedicarePlus Plans.--
``(1) In general.--Subject to the provisions of this
section, each MedicarePlus eligible individual (as defined in
paragraph (3)) is entitled to elect to receive benefits under
this title--
``(A) through the medicare fee-for-service program under
parts A and B, or
``(B) through enrollment in a MedicarePlus plan under this
part.
``(2) Types of medicareplus plans that may be available.--A
MedicarePlus plan may be any of the following types of plans
of health insurance:
``(A) Coordinated care plans.--Coordinated care plans which
provide health care services, including health maintenance
organization plans and preferred provider organization plans.
``(B) Plans offered by provider-sponsored organization.--A
MedicarePlus plan offered by a provider-sponsored
organization, as defined in section 1855(e).
``(C) Combination of msa plan and contributions to
medicareplus msa.--An MSA plan, as defined in section
1859(b)(2), and a contribution into a MedicarePlus medical
savings account (MSA).
``(3) MedicarePlus eligible individual.--
``(A) In general.--In this title, subject to subparagraph
(B), the term `MedicarePlus eligible individual' means an
individual who is entitled to benefits under part A and
enrolled under part B.
``(B) Special rule for end-stage renal disease.--Such term
shall not include an individual medically determined to have
end-stage renal disease, except that an individual who
develops end-stage renal disease while enrolled in a
MedicarePlus plan may continue to be enrolled in that plan.
``(b) Special Rules.--
``(1) Residence requirement.--
``(A) In general.--Except as the Secretary may otherwise
provide, an individual is eligible to elect a MedicarePlus
plan offered by a MedicarePlus organization only if the
organization serves the geographic area in which the
individual resides.
``(B) Continuation of enrollment permitted.--Pursuant to
rules specified by the Secretary, the Secretary shall provide
that an individual may continue enrollment in a plan,
notwithstanding that the individual no longer resides in the
service area of the plan, so long as the plan provides
benefits for enrollees located in the area in which the
individual resides.
``(2) Special rule for certain individuals covered under
fehbp or eligible for veterans or military health benefits,
veterans .--
``(A) FEHBP.--An individual who is enrolled in a health
benefit plan under chapter 89 of title 5, United States Code,
is not eligible to enroll in an MSA plan until such time as
the Director of the Office of Management and Budget certifies
to the Secretary that the Office of Personnel Management has
adopted policies which will ensure that the enrollment of
such individuals in such plans will not result in increased
expenditures for the Federal Government for health benefit
plans under such chapter.
``(B) VA and dod.--The Secretary may apply rules similar to
the rules described in subparagraph (A) in the case of
individuals who are eligible for health care benefits under
chapter 55 of title 10, United States Code, or under chapter
17 of title 38 of such Code.
``(3) Limitation on eligibility of qualified medicare
beneficiaries and other medicaid beneficiaries to enroll in
an MSA plan.--An individual who is a qualified medicare
beneficiary (as defined in section 1905(p)(1)), a qualified
disabled and working individual (described in section
1905(s)), an individual described in section
1902(a)(10)(E)(iii), or otherwise entitled to medicare cost-
sharing under a State plan under title XIX is not eligible to
enroll in an MSA plan.
``(4) Coverage under msa plans on a demonstration basis.--
``(A) In general.--An individual is not eligible to enroll
in an MSA plan under this part--
``(i) on or after January 1, 2003, unless the enrollment is
the continuation of such an enrollment in effect as of such
date; or
``(ii) as of any date if the number of such individuals so
enrolled as of such date has reached 500,000.
Under rules established by the Secretary, an individual is
not eligible to enroll (or continue enrollment) in an MSA
plan for a year unless the individual provides assurances
satisfactory to the Secretary that the individual will reside
in the United States for at least 183 days during the year.
``(B) Evaluation.--The Secretary shall regularly evaluate
the impact of permitting enrollment in MSA plans under this
part on selection (including adverse selection), use of
preventive care, access to care, and the financial status of
the Trust Funds under this title.
``(C) Reports.--The Secretary shall submit to Congress
periodic reports on the numbers of individuals enrolled in
such plans and on the evaluation being conducted under
subparagraph (B). The Secretary shall submit such a report,
by not later than March 1, 2002, on whether the time
limitation under subparagraph (A)(i) should be extended or
removed and whether to change the numerical limitation under
subparagraph (A)(ii).
``(c) Process for Exercising Choice.--
``(1) In general.--The Secretary shall establish a process
through which elections described in subsection (a) are made
and changed, including the form and manner in which such
elections are made and changed. Such elections shall be made
or changed only during coverage election periods specified
under subsection (e) and shall become effective as provided
in subsection (f).
``(2) Coordination through medicareplus organizations.--
``(A) Enrollment.--Such process shall permit an individual
who wishes to elect a MedicarePlus plan offered by a
MedicarePlus organization to make such election through the
filing of an appropriate election form with the organization.
``(B) Disenrollment.--Such process shall permit an
individual, who has elected a MedicarePlus plan offered by a
MedicarePlus organization and who wishes to terminate such
election, to terminate such election through the filing of an
appropriate election form with the organization.
``(3) Default.--
``(A) Initial election.--
``(i) In general.--Subject to clause (ii), an individual
who fails to make an election during an initial election
period under subsection (e)(1) is deemed to have chosen the
medicare fee-for-service program option.
``(ii) Seamless continuation of coverage.--The Secretary
may establish procedures under which an individual who is
enrolled in a health plan (other than MedicarePlus plan)
offered by a MedicarePlus organization at the time of the
initial election period and who fails to elect to receive
coverage other than through the organization is deemed to
have elected the MedicarePlus plan offered by the
organization (or, if the organization offers more than one
such plan, such plan or plans as the Secretary identifies
under such procedures).
``(B) Continuing periods.--An individual who has made (or
is deemed to have made) an election under this section is
considered to have continued to make such election until such
time as--
``(i) the individual changes the election under this
section, or
``(ii) a MedicarePlus plan is discontinued, if the
individual had elected such plan at the time of the
discontinuation.
``(d) Providing Information To Promote Informed Choice.--
``(1) In general.--The Secretary shall provide for
activities under this subsection to broadly disseminate
information to medicare beneficiaries (and prospective
medicare beneficiaries) on the coverage options provided
under this section in order to promote an active, informed
selection among such options.
``(2) Provision of notice.--
``(A) Open season notification.--At least 30 days before
the beginning of each annual, coordinated election period (as
defined in subsection (e)(3)(B)), the Secretary shall mail to
each MedicarePlus eligible individual residing in an area the
following:
``(i) General information.--The general information
described in paragraph (3).
``(ii) List of plans and comparison of plan options.--A
list identifying the MedicarePlus plans that are (or will be)
available to residents of the area and information described
in paragraph (4) concerning such plans. Such information
shall be presented in a comparative form.
``(iii) MedicarePlus monthly capitation rate.--The amount
of the monthly MedicarePlus capitation rate for the area.
``(iv) Additional information.--Any other information that
the Secretary determines
[[Page H4437]]
will assist the individual in making the election under this
section.
The mailing of such information shall be coordinated with the
mailing of any annual notice under section 1804.
``(B) Notification to newly medicareplus eligible
individuals.--To the extent practicable, the Secretary shall,
not later than 2 months before the beginning of the initial
MedicarePlus enrollment period for an individual described in
subsection (e)(1), mail to the individual the information
described in subparagraph (A).
``(C) Form.--The information disseminated under this
paragraph shall be written and formatted using language that
is easily understandable by medicare beneficiaries.
``(D) Periodic updating.--The information described in
subparagraph (A) shall be updated on at least an annual basis
to reflect changes in the availability of MedicarePlus plans
and the benefits and monthly premiums (and net monthly
premiums) for such plans.
``(3) General information.--General information under this
paragraph, with respect to coverage under this part during a
year, shall include the following:
``(A) Benefits under fee-for-service program option.--A
general description of the benefits covered (and not covered)
under the medicare fee-for-service program under parts A and
B, including--
``(i) covered items and services,
``(ii) beneficiary cost sharing, such as deductibles,
coinsurance, and copayment amounts, and
``(iii) any beneficiary liability for balance billing.
``(B) Part b premium.--The part B premium rates that will
be charged for part B coverage.
``(C) Election procedures.--Information and instructions on
how to exercise election options under this section.
``(D) Rights.--The general description of procedural rights
(including grievance and appeals procedures) of beneficiaries
under the medicare fee-for-service program and the
MedicarePlus program and right to be protected against
discrimination based on health status-related factors under
section 1852(b).
``(E) Information on medigap and medicare select.--A
general description of the benefits, enrollment rights, and
other requirements applicable to medicare supplemental
policies under section 1882 and provisions relating to
medicare select policies described in section 1882(t).
``(F) Potential for contract termination.--The fact that a
MedicarePlus organization may terminate or refuse to renew
its contract under this part and the effect the termination
or nonrenewal of its contract may have on individuals
enrolled with the MedicarePlus plan under this part.
``(4) Information comparing plan options.--Information
under this paragraph, with respect to a MedicarePlus plan for
a year, shall include the following:
``(A) Benefits.--The benefits covered (and not covered)
under the plan, including--
``(i) covered items and services beyond those provided
under the medicare fee-for-service program,
``(ii) any beneficiary cost sharing,
``(iii) any maximum limitations on out-of-pocket expenses,
``(iv) in the case of an MSA plan, differences in cost
sharing under such a plan compared to under other
MedicarePlus plans,
``(v) the use of provider networks and the restriction on
payments for services furnished other than by other through
the organization,
``(vi) the organization's coverage of emergency and
urgently needed care,
``(vii) the appeal and grievance rights of enrollees,
``(viii) number of grievances and appeals, and information
on their disposition in the aggregate,
``(ix) procedures used by the organization to control
utilization of services and expenditures, and
``(x) any exclusions in the types of providers
participating in the plan's network.
``(B) Premiums.--The monthly premium (and net monthly
premium), if any, for the plan.
``(C) Service area.--The service area of the plan.
``(D) Quality and performance.--To the extent available,
plan quality and performance indicators for the benefits
under the plan (and how they compare to such indicators under
the medicare fee-for-service program under parts A and B in
the area involved), including--
``(i) disenrollment rates for medicare enrollees electing
to receive benefits through the plan for the previous 2 years
(excluding disenrollment due to death or moving outside the
plan's service area),
``(ii) information on medicare enrollee satisfaction,
``(iii) information on health outcomes, and
``(iv) the recent record regarding compliance of the plan
with requirements of this part (as determined by the
Secretary).
``(E) Supplemental benefits options.--Whether the
organization offering the plan offers optional supplemental
benefits and the terms and conditions (including premiums)
for such coverage.
``(5) Maintaining a toll-free number and internet site.--
The Secretary shall maintain a toll-free number for inquiries
regarding MedicarePlus options and the operation of this part
in all areas in which MedicarePlus plans are offered and an
Internet site through which individuals may electronically
obtain information on such options and MedicarePlus plans.
``(6) Use of nonfederal entities.--The Secretary may enter
into contracts with non-Federal entities to carry out
activities under this subsection.
``(7) Provision of information.--A MedicarePlus
organization shall provide the Secretary with such
information on the organization and each MedicarePlus plan it
offers as may be required for the preparation of the
information referred to in paragraph (2)(A).
``(e) Coverage Election Periods.--
``(1) Initial choice upon eligibility to make election if
medicareplus plans available to individual.--If, at the time
an individual first becomes entitled to benefits under part A
and enrolled under part B, there is one or more MedicarePlus
plans offered in the area in which the individual resides,
the individual shall make the election under this section
during a period (of a duration and beginning at a time
specified by the Secretary) at such time. Such period shall
be specified in a manner so that, in the case of an
individual who elects a MedicarePlus plan during the period,
coverage under the plan becomes effective as of the first
date on which the individual may receive such coverage.
``(2) Open enrollment and disenrollment opportunities.--
Subject to paragraph (5)--
``(A) Continuous open enrollment and disenrollment through
2000.--At any time during 1998, 1999, and 2000, a
MedicarePlus eligible individual may change the election
under subsection (a)(1).
``(B) Continuous open enrollment and disenrollment for
first 6 months during 2001.--
``(i) In general.--Subject to clause (ii), at any time
during the first 6 months of 2001, or, if the individual
first becomes a MedicarePlus eligible individual during 2001,
during the first 6 months during 2001 in which the individual
is a MedicarePlus eligible individual, a MedicarePlus
eligible individual may change the election under subsection
(a)(1).
``(ii) Limitation of one change per year.--An individual
may exercise the right under clause (i) only once during
2001. The limitation under this clause shall not apply to
changes in elections effected during an annual, coordinated
election period under paragraph (3) or during a special
enrollment period under paragraph (4).
``(C) Continuous open enrollment and disenrollment for
first 3 months in subsequent years.--
``(i) In general.--Subject to clause (ii), at any time
during the first 3 months of a year after 2001, or, if the
individual first becomes a MedicarePlus eligible individual
during a year after 2001, during the first 3 months of such
year in which the individual is a MedicarePlus eligible
individual, a MedicarePlus eligible individual may change the
election under subsection (a)(1).
``(ii) Limitation of one change per year.--An individual
may exercise the right under clause (i) only once a year. The
limitation under this clause shall not apply to changes in
elections effected during an annual, coordinated election
period under paragraph (3) or during a special enrollment
period under paragraph (4).
``(3) Annual, coordinated election period.--
``(A) In general.--Subject to paragraph (5), each
individual who is eligible to make an election under this
section may change such election during an annual,
coordinated election period.
``(B) Annual, coordinated election period.--For purposes of
this section, the term `annual, coordinated election period'
means, with respect to a calendar year (beginning with 2001),
the month of October before such year.
``(C) MedicarePlus health fairs.--In the month of October
of each year (beginning with 1998), the Secretary shall
provide for a nationally coordinated educational and
publicity campaign to inform MedicarePlus eligible
individuals about MedicarePlus plans and the election process
provided under this section.
``(4) Special election periods.--Effective as of January 1,
2001, an individual may discontinue an election of a
MedicarePlus plan offered by a MedicarePlus organization
other than during an annual, coordinated election period and
make a new election under this section if--
``(A) the organization's or plan's certification under this
part has been terminated or the organization has terminated
or otherwise discontinued providing the plan;
``(B) the individual is no longer eligible to elect the
plan because of a change in the individual's place of
residence or other change in circumstances (specified by the
Secretary, but not including termination of the individual's
enrollment on the basis described in clause (i) or (ii) of
subsection (g)(3)(B));
``(C) the individual demonstrates (in accordance with
guidelines established by the Secretary) that--
``(i) the organization offering the plan substantially
violated a material provision of the organization's contract
under this part in relation to the individual (including the
failure to provide an enrollee on a timely basis medically
necessary care for which benefits are available under the
plan or the failure to provide such covered care in
accordance with applicable quality standards); or
[[Page H4438]]
``(ii) the organization (or an agent or other entity acting
on the organization's behalf) materially misrepresented the
plan's provisions in marketing the plan to the individual; or
``(D) the individual meets such other exceptional
conditions as the Secretary may provide.
``(5) Special rules for msa plans.--Notwithstanding the
preceding provisions of this subsection, an individual--
``(A) may elect an MSA plan only during--
``(i) an initial open enrollment period described in
paragraph (1),
``(ii) an annual, coordinated election period described in
paragraph (3)(B), or
``(iii) the months of October 1998 and October 1999; and
``(B) may not discontinue an election of an MSA plan except
during the periods described in clause (ii) or (iii) of
subparagraph (A) and under paragraph (4).
``(f) Effectiveness of Elections and Changes of
Elections.--
``(1) During initial coverage election period.--An election
of coverage made during the initial coverage election period
under subsection (e)(1) shall take effect upon the date the
individual becomes entitled to benefits under part A and
enrolled under part B, except as the Secretary may provide
(consistent with section 1838) in order to prevent
retroactive coverage.
``(2) During continuous open enrollment periods.--An
election or change of coverage made under subsection (e)(2)
shall take effect with the first day of the first calendar
month following the date on which the election is made.
``(3) Annual, coordinated election period.--An election or
change of coverage made during an annual, coordinated
election period (as defined in subsection (e)(3)(B)) in a
year shall take effect as of the first day of the following
year.
``(4) Other periods.--An election or change of coverage
made during any other period under subsection (e)(4) shall
take effect in such manner as the Secretary provides in a
manner consistent (to the extent practicable) with protecting
continuity of health benefit coverage.
``(g) Guaranteed Issue and Renewal.--
``(1) In general.--Except as provided in this subsection, a
MedicarePlus organization shall provide that at any time
during which elections are accepted under this section with
respect to a MedicarePlus plan offered by the organization,
the organization will accept without restrictions individuals
who are eligible to make such election.
``(2) Priority.--If the Secretary determines that a
MedicarePlus organization, in relation to a MedicarePlus plan
it offers, has a capacity limit and the number of
MedicarePlus eligible individuals who elect the plan under
this section exceeds the capacity limit, the organization may
limit the election of individuals of the plan under this
section but only if priority in election is provided--
``(A) first to such individuals as have elected the plan at
the time of the determination, and
``(B) then to other such individuals in such a manner that
does not discriminate, on a basis described in section
1852(b), among the individuals (who seek to elect the plan).
The preceding sentence shall not apply if it would result in
the enrollment of enrollees substantially nonrepresentative,
as determined in accordance with regulations of the
Secretary, of the medicare population in the service area of
the plan.
``(3) Limitation on termination of election.--
``(A) In general.--Subject to subparagraph (B), a
MedicarePlus organization may not for any reason terminate
the election of any individual under this section for a
MedicarePlus plan it offers.
``(B) Basis for termination of election.--A MedicarePlus
organization may terminate an individual's election under
this section with respect to a MedicarePlus plan it offers
if--
``(i) any net monthly premiums required with respect to
such plan are not paid on a timely basis (consistent with
standards under section 1856 that provide for a grace period
for late payment of net monthly premiums),
``(ii) the individual has engaged in disruptive behavior
(as specified in such standards), or
``(iii) the plan is terminated with respect to all
individuals under this part in the area in which the
individual resides.
``(C) Consequence of termination.--
``(i) Terminations for cause.--Any individual whose
election is terminated under clause (i) or (ii) of
subparagraph (B) is deemed to have elected the medicare fee-
for-service program option described in subsection (a)(1)(A).
``(ii) Termination based on plan termination or service
area reduction.--Any individual whose election is terminated
under subparagraph (B)(iii) shall have a special election
period under subsection (e)(4)(A) in which to change coverage
to coverage under another MedicarePlus plan. Such an
individual who fails to make an election during such period
is deemed to have chosen to change coverage to the medicare
fee-for-service program option described in subsection
(a)(1)(A).
``(D) Organization obligation with respect to election
forms.--Pursuant to a contract under section 1857, each
MedicarePlus organization receiving an election form under
subsection (c)(2) shall transmit to the Secretary (at such
time and in such manner as the Secretary may specify) a copy
of such form or such other information respecting the
election as the Secretary may specify.
``(h) Approval of Marketing Material and Application
Forms.--
``(1) Submission.--No marketing material or application
form may be distributed by a MedicarePlus organization to (or
for the use of) MedicarePlus eligible individuals unless--
``(A) at least 45 days before the date of distribution the
organization has submitted the material or form to the
Secretary for review, and
``(B) the Secretary has not disapproved the distribution of
such material or form.
``(2) Review.--The standards established under section 1856
shall include guidelines for the review of all such material
or form submitted and under such guidelines the Secretary
shall disapprove (or later require the correction of) such
material or form if the material or form is materially
inaccurate or misleading or otherwise makes a material
misrepresentation.
``(3) Deemed approval (1-stop shopping).--In the case of
material or form that is submitted under paragraph (1)(A) to
the Secretary or a regional office of the Department of
Health and Human Services and the Secretary or the office has
not disapproved the distribution of marketing material or
form under paragraph (1)(B) with respect to a MedicarePlus
plan in an area, the Secretary is deemed not to have
disapproved such distribution in all other areas covered by
the plan and organization except to the extent that such
material or form is specific only to an area involved.
``(4) Prohibition of certain marketing practices.--Each
MedicarePlus organization shall conform to fair marketing
standards, in relation to MedicarePlus plans offered under
this part, included in the standards established under
section 1856. Such standards shall include a prohibition
against a MedicarePlus organization (or agent of such an
organization) completing any portion of any election form
used to carry out elections under this section on behalf of
any individual.
``(i) Effect of Election of MedicarePlus Plan Option.--
Subject to sections 1852(a)(5), 1857(f)(2), and 1857(g)--
``(1) payments under a contract with a MedicarePlus
organization under section 1853(a) with respect to an
individual electing a MedicarePlus plan offered by the
organization shall be instead of the amounts which (in the
absence of the contract) would otherwise be payable under
parts A and B for items and services furnished to the
individual, and
``(2) subject to subsections (e) and (f) of section 1853,
only the MedicarePlus organization shall be entitled to
receive payments from the Secretary under this title for
services furnished to the individual.
``benefits and beneficiary protections
``Sec. 1852. (a) Basic Benefits.--
``(1) In general.--Except as provided in section 1859(b)(2)
for MSA plans, each MedicarePlus plan shall provide to
members enrolled under this part, through providers and other
persons that meet the applicable requirements of this title
and part A of title XI--
``(A) those items and services for which benefits are
available under parts A and B to individuals residing in the
area served by the plan, and
``(B) additional benefits required under section
1854(f)(1)(A).
``(2) Satisfaction of requirement.--A MedicarePlus plan
(other than an MSA plan) offered by a MedicarePlus
organization satisfies paragraph (1)(A), with respect to
benefits for items and services furnished other than through
a provider that has a contract with the organization offering
the plan, if the plan provides (in addition to any cost
sharing provided for under the plan) for at least the total
dollar amount of payment for such items and services as would
otherwise be authorized under parts A and B (including any
balance billing permitted under such parts).
``(3) Supplemental benefits.--
``(A) Benefits included subject to secretary's approval.--
Each MedicarePlus organization may provide to individuals
enrolled under this part (without affording those individuals
an option to decline the coverage) supplemental health care
benefits that the Secretary may approve. The Secretary shall
approve any such supplemental benefits unless the Secretary
determines that including such supplemental benefits would
substantially discourage enrollment by MedicarePlus eligible
individuals with the organization.
``(B) At enrollees' option.--A MedicarePlus organization
may provide to individuals enrolled under this part (other
than under an MSA plan) supplemental health care benefits
that the individuals may elect, at their option, to have
covered.
``(4) Organization as secondary payer.--Notwithstanding any
other provision of law, a MedicarePlus organization may (in
the case of the provision of items and services to an
individual under a MedicarePlus plan under circumstances in
which payment under this title is made secondary pursuant to
section 1862(b)(2)) charge or authorize the provider of such
services to charge, in accordance with the charges allowed
under such a law, plan, or policy--
``(A) the insurance carrier, employer, or other entity
which under such law, plan, or policy is to pay for the
provision of such services, or
[[Page H4439]]
``(B) such individual to the extent that the individual has
been paid under such law, plan, or policy for such services.
``(5) National coverage determinations.--If there is a
national coverage determination made in the period beginning
on the date of an announcement under section 1853(b) and
ending on the date of the next announcement under such
section and the Secretary projects that the determination
will result in a significant change in the costs to a
MedicarePlus organization of providing the benefits that are
the subject of such national coverage determination and that
such change in costs was not incorporated in the
determination of the annual MedicarePlus capitation rate
under section 1853 included in the announcement made at the
beginning of such period--
``(A) such determination shall not apply to contracts under
this part until the first contract year that begins after the
end of such period, and
``(B) if such coverage determination provides for coverage
of additional benefits or coverage under additional
circumstances, section 1851(i) shall not apply to payment for
such additional benefits or benefits provided under such
additional circumstances until the first contract year that
begins after the end of such period,
unless otherwise required by law.
``(b) Antidiscrimination.--
``(1) In general.--A MedicarePlus organization may not
deny, limit, or condition the coverage or provision of
benefits under this part, for individuals permitted to be
enrolled with the organization under this part, based on any
health status-related factor described in section 2702(a)(1)
of the Public Health Service Act.
``(2) Construction.--Paragraph (1) shall not be construed
as requiring a MedicarePlus organization to enroll
individuals who are determined to have end-stage renal
disease, except as provided under section 1851(a)(3)(B).
``(c) Detailed Description of Plan Provisions.--A
MedicarePlus organization shall disclose, in clear, accurate,
and standardized form to each enrollee with a MedicarePlus
plan offered by the organization under this part at the time
of enrollment and at least annually thereafter, the following
information regarding such plan:
``(1) Service area.--The plan's service area.
``(2) Benefits.--Benefits offered (and not offered) under
the plan offered, including information described in section
1851(d)(3)(A) and exclusions from coverage and, if it is an
MSA plan, a comparison of benefits under such a plan with
benefits under other MedicarePlus plans.
``(3) Access.--The number, mix, and distribution of plan
providers and any point-of-service option (including the
supplemental premium for such option).
``(4) Out-of-area coverage.--Out-of-area coverage provided
by the plan.
``(5) Emergency coverage.--Coverage of emergency services
and urgently needed care, including--
``(A) the appropriate use of emergency services, including
use of the 911 telephone system or its local equivalent in
emergency situations and an explanation of what constitutes
an emergency situation;
``(B) the process and procedures of the plan for obtaining
emergency services; and
``(C) the locations of (i) emergency departments, and (ii)
other settings, in which plan physicians and hospitals
provide emergency services and post-stabilization care..
``(6) Supplemental benefits.--Supplemental benefits
available from the organization offering the plan,
including--
``(A) whether the supplemental benefits are optional,
``(B) the supplemental benefits covered, and
``(C) the premium price for the supplemental benefits.
``(7) Prior authorization rules.--Rules regarding prior
authorization or other review requirements that could result
in nonpayment.
``(8) Plan grievance and appeals procedures.--Any appeal or
grievance rights and procedures.
``(9) Quality assurance program.--A description of the
organization's quality assurance program under subsection
(e).
``(d) Access to Services.--
``(1) In general.--A MedicarePlus organization offering a
MedicarePlus plan may select the providers from whom the
benefits under the plan are provided so long as--
``(A) the organization makes such benefits available and
accessible to each individual electing the plan within the
plan service area with reasonable promptness and in a manner
which assures continuity in the provision of benefits;
``(B) when medically necessary in the opinion of the
treating health care provider the organization makes such
benefits available and accessible 24 hours a day and 7 days a
week;
``(C) the plan provides for reimbursement with respect to
services which are covered under subparagraphs (A) and (B)
and which are provided to such an individual other than
through the organization, if--
``(i) the services were medically necessary in the opinion
of the treating health care provider and immediately required
because of an unforeseen illness, injury, or condition, and
it was not reasonable given the circumstances to obtain the
services through the organization,
``(ii) the services were renal dialysis services and were
provided other than through the organization because the
individual was temporarily out of the plan's service area, or
``(iii) the services are maintenance care or post-
stabilization care covered under the guidelines established
under paragraph (2);
``(D) the organization provides access to appropriate
providers, including credentialed specialists, for treatment
and services when such treatment and services are determined
to be medically necessary in the professional opinion of the
treating health care provider, in consultation with the
individual; and
``(E) coverage is provided for emergency services (as
defined in paragraph (3)) without regard to prior
authorization or the emergency care provider's contractual
relationship with the organization.
``(2) Guidelines respecting coordination of post-
stabilization care.--A MedicarePlus plan shall comply with
such guidelines as the Secretary may prescribe relating to
promoting efficient and timely coordination of appropriate
maintenance and post-stabilization care of an enrollee after
the enrollee has been determined to be stable under section
1867.
``(3) Definition of emergency services.--In this
subsection--
``(A) In general.--The term `emergency services' means,
with respect to an individual enrolled with an organization,
covered inpatient and outpatient services that--
``(i) are furnished by a provider that is qualified to
furnish such services under this title, and
``(ii) are needed to evaluate or stabilize an emergency
medical condition (as defined in subparagraph (B)).
``(B) Emergency medical condition based on prudent
layperson.--The term `emergency medical condition' means a
medical condition manifesting itself by acute symptoms of
sufficient severity such that a prudent layperson, who
possesses an average knowledge of health and medicine, could
reasonably expect the absence of immediate medical attention
to result in--
``(i) placing the health of the individual (or, with
respect to a pregnant woman, the health of the woman or her
unborn child) in serious jeopardy,
``(ii) serious impairment to bodily functions, or
``(iii) serious dysfunction of any bodily organ or part.
``(4) Determination of hospital length of stay.--
``(A) In general.--A MedicarePlus organization shall cover
the length of an inpatient hospital stay under this part as
determined by the attending physician (or other attending
health care provider to the extent permitted under State law)
in consultation with the patient to be medically appropriate.
``(B) Construction.--Nothing in this paragraph shall be
construed--
``(i) as requiring the provision of inpatient coverage if
the attending physician (or other attending health care
provider to the extent permitted under State law) and patient
determine that a shorter period of hospital stay is medically
appropriate, or
``(ii) as affecting the application of deductibles and
coinsurance.
``(e) Quality Assurance Program.--
``(1) In general.--Each MedicarePlus organization must have
arrangements, consistent with any regulation, for an ongoing
quality assurance program for health care services it
provides to individuals enrolled with MedicarePlus plans of
the organization.
``(2) Elements of program.--The quality assurance program
shall--
``(A) stress health outcomes and provide for the
collection, analysis, and reporting of data (in accordance
with a quality measurement system that the Secretary
recognizes) that will permit measurement of outcomes and
other indices of the quality of MedicarePlus plans and
organizations;
``(B) provide for the establishment of written protocols
for utilization review, based on current standards of medical
practice;
``(C) provide review by physicians and other health care
professionals of the process followed in the provision of
such health care services;
``(D) monitor and evaluate high volume and high risk
services and the care of acute and chronic conditions;
``(E) evaluate the continuity and coordination of care that
enrollees receive;
``(F) have mechanisms to detect both underutilization and
overutilization of services;
``(G) after identifying areas for improvement, establish or
alter practice parameters;
``(H) take action to improve quality and assesses the
effectiveness of such action through systematic followup;
``(I) make available information on quality and outcomes
measures to facilitate beneficiary comparison and choice of
health coverage options (in such form and on such quality and
outcomes measures as the Secretary determines to be
appropriate);
``(J) be evaluated on an ongoing basis as to its
effectiveness;
``(K) include measures of consumer satisfaction; and
``(L) provide the Secretary with such access to information
collected as may be appropriate to monitor and ensure the
quality of care provided under this part.
``(3) External review.--Each MedicarePlus organization
shall, for each MedicarePlus plan it operates, have an
agreement with an independent quality review and improvement
organization approved by the Secretary to perform functions
[[Page H4440]]
of the type described in sections 1154(a)(4)(B) and
1154(a)(14) with respect to services furnished by
MedicarePlus plans for which payment is made under this
title.
``(4) Treatment of accreditation.--The Secretary shall
provide that a MedicarePlus organization is deemed to meet
requirements of paragraphs (1) through (3) of this subsection
and subsection (h) (relating to confidentiality and accuracy
of enrollee records) if the organization is accredited (and
periodically reaccredited) by a private organization under a
process that the Secretary has determined assures that the
organization, as a condition of accreditation, applies and
enforces standards with respect to the requirements involved
that are no less stringent than the standards established
under section 1856 to carry out the respective requirements.
``(f) Coverage Determinations.--
``(1) Decisions on nonemergency care.--A MedicarePlus
organization shall make determinations regarding
authorization requests for nonemergency care on a timely
basis, depending on the urgency of the situation. The
organization shall provide notice of any coverage denial,
which notice shall include a statement of the reasons for the
denial and a description of the grievance and appeals
processes available.
``(2) Reconsiderations.--
``(A) In general.--Subject to subsection (g)(4), a
reconsideration of a determination of an organization denying
coverage shall be made within 30 days of the date of receipt
of medical information, but not later than 60 days after the
date of the determination.
``(B) Physician decision on certain reconsiderations.--A
reconsideration relating to a determination to deny coverage
based on a lack of medical necessity shall be made only by a
physician with appropriate expertise in the field of medicine
which necessitates treatment who is other than a physician
involved in the initial determination.
``(g) Grievances and Appeals.--
``(1) Grievance mechanism.--Each MedicarePlus organization
must provide meaningful procedures for hearing and resolving
grievances between the organization (including any entity or
individual through which the organization provides health
care services) and enrollees with MedicarePlus plans of the
organization under this part.
``(2) Appeals.--An enrollee with a MedicarePlus plan of a
MedicarePlus organization under this part who is dissatisfied
by reason of the enrollee's failure to receive any health
service to which the enrollee believes the enrollee is
entitled and at no greater charge than the enrollee believes
the enrollee is required to pay is entitled, if the amount in
controversy is $100 or more, to a hearing before the
Secretary to the same extent as is provided in section
205(b), and in any such hearing the Secretary shall make the
organization a party. If the amount in controversy is $1,000
or more, the individual or organization shall, upon notifying
the other party, be entitled to judicial review of the
Secretary's final decision as provided in section 205(g), and
both the individual and the organization shall be entitled to
be parties to that judicial review. In applying sections
205(b) and 205(g) as provided in this paragraph, and in
applying section 205(l) thereto, any reference therein to the
Commissioner of Social Security or the Social Security
Administration shall be considered a reference to the
Secretary or the Department of Health and Human Services,
respectively.
``(3) Independent review of coverage denials.--The
Secretary shall contract with an independent, outside entity
to review and resolve in a timely manner reconsiderations
that affirm denial of coverage.
``(4) Expedited determinations and reconsiderations.--
``(A) Receipt of requests.--An enrollee in a MedicarePlus
plan may request, either in writing or orally, an expedited
determination or reconsideration by the MedicarePlus
organization regarding a matter described in paragraph (2).
The organization shall also permit the acceptance of such
requests by physicians.
``(B) Organization procedures.--
``(i) In general.--The MedicarePlus organization shall
maintain procedures for expediting organization
determinations and reconsiderations when, upon request of an
enrollee, the organization determines that the application of
normal time frames for making a determination (or a
reconsideration involving a determination) could seriously
jeopardize the life or health of the enrollee or the
enrollee's ability to regain maximum function.
``(ii) Timely response.--In an urgent case described in
clause (i), the organization shall notify the enrollee (and
the physician involved, as appropriate) of the determination
(or determination on the reconsideration) as expeditiously as
the enrollee's health condition requires, but not later than
72 hours (or 24 hours in the case of a reconsideration) of
the time of receipt of the request for the determination or
reconsideration (or receipt of the information necessary to
make the determination or reconsideration), or such longer
period as the Secretary may permit in specified cases.
``(iii) Secretarial report.--The Secretary shall annually
report publicly on the number and disposition of denials and
appeals within each MedicarePlus organization, and those
reviewed and resolved by the independent entities under this
subsection.
``(h) Confidentiality and Accuracy of Enrollee Records.--
Each MedicarePlus organization shall establish procedures--
``(1) to safeguard the privacy of individually identifiable
enrollee information,
``(2) to maintain accurate and timely medical records and
other health information for enrollees, and
``(3) to assure timely access of enrollees to their medical
information.
``(i) Information on Advance Directives.--Each MedicarePlus
organization shall meet the requirement of section 1866(f)
(relating to maintaining written policies and procedures
respecting advance directives).
``(j) Rules Regarding Physician Participation.--
``(1) Procedures.--Each MedicarePlus organization shall
establish reasonable procedures relating to the participation
(under an agreement between a physician and the organization)
of physicians under MedicarePlus plans offered by the
organization under this part. Such procedures shall include--
``(A) providing notice of the rules regarding
participation,
``(B) providing written notice of participation decisions
that are adverse to physicians, and
``(C) providing a process within the organization for
appealing such adverse decisions, including the presentation
of information and views of the physician regarding such
decision.
``(2) Consultation in medical policies.--A MedicarePlus
organization shall consult with physicians who have entered
into participation agreements with the organization regarding
the organization's medical policy, quality, and medical
management procedures.
``(3) Prohibiting interference with provider advice to
enrollees.--
``(A) In general.--Subject to subparagraphs (B) and (C), a
MedicarePlus organization (in relation to an individual
enrolled under a MedicarePlus plan offered by the
organization under this part) shall not prohibit or otherwise
restrict a covered health care professional (as defined in
subparagraph (D)) from advising such an individual who is a
patient of the professional about the health status of the
individual or medical care or treatment for the individual's
condition or disease, regardless of whether benefits for such
care or treatment are provided under the plan, if the
professional is acting within the lawful scope of practice.
``(B) Conscience protection.--Subparagraph (A) shall not be
construed as requiring a MedicarePlus plan to provide,
reimburse for, or provide coverage of a counseling or
referral service if the MedicarePlus organization offering
the plan--
``(i) objects to the provision of such service on moral or
religious grounds; and
``(ii) in the manner and through the written
instrumentalities such MedicarePlus organization deems
appropriate, makes available information on its policies
regarding such service to prospective enrollees before or
during enrollment and to enrollees within 90 days after the
date that the organization or plan adopts a change in policy
regarding such a counseling or referral service.
``(C) Construction.--Nothing in subparagraph (B) shall be
construed to affect disclosure requirements under State law
or under the Employee Retirement Income Security Act of 1974.
``(D) Health care professional defined.--For purposes of
this paragraph, the term `health care professional' means a
physician (as defined in section 1861(r)) or other health
care professional if coverage for the professional's services
is provided under the MedicarePlus plan for the services of
the professional. Such term includes a podiatrist,
optometrist, chiropractor, psychologist, dentist, physician
assistant, physical or occupational therapist and therapy
assistant, speech-language pathologist, audiologist,
registered or licensed practical nurse (including nurse
practitioner, clinical nurse specialist, certified registered
nurse anesthetist, and certified nurse-midwife), licensed
certified social worker, registered respiratory therapist,
and certified respiratory therapy technician.
``(4) Limitations on health care provider incentive
plans.--
``(A) In general.--No MedicarePlus organization may operate
any health care provider incentive plan (as defined in
subparagraph (B)) unless the following requirements are met:
``(i) No specific payment is made directly or indirectly
under the plan to a health care provider or health care
provider group as an inducement to reduce or limit medically
necessary services provided with respect to a specific
individual enrolled with the organization.
``(ii) If the plan places a health care provider or health
care provider group at substantial financial risk (as
determined by the Secretary) for services not provided by the
health care provider or health care provider group, the
organization--
``(I) provides stop-loss protection for the health care
provider or group that is adequate and appropriate, based on
standards developed by the Secretary that take into account
the number of health care providers placed at such
substantial financial risk in the group or under the plan and
the number of individuals enrolled with the organization who
receive services from the health care provider or group, and
``(II) conducts periodic surveys of both individuals
enrolled and individuals previously enrolled with the
organization to determine the degree of access of such
individuals to services provided by the organization and
[[Page H4441]]
satisfaction with the quality of such services.
``(iii) The organization provides the Secretary with
descriptive information regarding the plan, sufficient to
permit the Secretary to determine whether the plan is in
compliance with the requirements of this subparagraph.
``(B) Health care provider incentive plan defined.--In this
paragraph, the term `health care provider incentive plan'
means any compensation arrangement between a MedicarePlus
organization and a health care provider or health care
provider group that may directly or indirectly have the
effect of reducing or limiting services provided with respect
to individuals enrolled with the organization under this
part.
``(C) Health care provider defined.--For the purposes of
this paragraph, the term `health care provider' has the
meaning given the term `health care professional' in
paragraph (3)(D).
``(5) Limitation on provider indemnification.--A
MedicarePlus organization may not provide (directly or
indirectly) for a provider (or group of providers) to
indemnify the organization against any liability resulting
from a civil action brought for any damage caused to an
enrollee with a MedicarePlus plan of the organization under
this part by the organization's denial of medically necessary
care.
``(6) Limitation on non-compete clause.--A MedicarePlus
organization may not (directly or indirectly) seek to enforce
any contractual provision which prevents a provider whose
contractual obligations to the organization for the provision
of services through the organization have ended from joining
or forming any competing MedicarePlus organization that is a
provider-sponsored organization in the same area.
``(k) Treatment of Services Furnished by Certain
Providers.--A physician or other entity (other than a
provider of services) that does not have a contract
establishing payment amounts for services furnished to an
individual enrolled under this part with a MedicarePlus
organization shall accept as payment in full for covered
services under this title that are furnished to such an
individual the amounts that the physician or other entity
could collect if the individual were not so enrolled. Any
penalty or other provision of law that applies to such a
payment with respect to an individual entitled to benefits
under this title (but not enrolled with a MedicarePlus
organization under this part) also applies with respect to an
individual so enrolled.
``(l) Disclosure of Use of DSH and Teaching Hospitals.--
Each MedicarePlus organization shall provide the Secretary
with information on--
``(1) the extent to which the organization provides
inpatient and outpatient hospital benefits under this part--
``(A) through the use of hospitals that are eligible for
additional payments under section 1886(d)(5)(F)(i) (relating
to so-called DSH hospitals), or
``(B) through the use of teaching hospitals that receive
payments under section 1886(h); and
``(2) the extent to which differences between payment rates
to different hospitals reflect the disproportionate share
percentage of low-income patients and the presence of medical
residency training programs in those hospitals.
``(m) Out-of-Network Access.--If an organization offers to
members enrolled under this section one plan which provides
for coverage of services covered under parts A and B
primarily through providers and other persons who are members
of a network of providers and other persons who have entered
into a contract with the organization to provide such
services, nothing in this section shall be construed as
preventing the organization from offering such members (at
the time of enrollment) another plan which provides for
coverage of such items which are not furnished through such
network providers.
``(n) Non-Preemption of State Law.--A State may establish
or enforce requirements with respect to beneficiary
protections in this section, but only if such requirements
are more stringent than the requirements established under
this section.
``(o) Nondiscrimination in Selection of Network Health
Professionals.--
``(1) In general.--A MedicarePlus organization offering a
MedicarePlus plan offering network coverage shall not
discriminate in selecting the members of its health
professional network (or in establishing the terms and
conditions for membership in such network) on the basis of
the race, national origin, gender, age, or disability (other
than a disability that impairs the ability of an individual
to provide health care services or that may threaten the
health of enrollees) of the health professional.
``(2) Appropriate range of services.--A MedicarePlus
organization shall not deny any health care professionals,
based solely on the license or certification as applicable
under State law, the ability to participate in providing
covered health care services, or be reimbursed or indemnified
by a network plan for providing such services under this
part.
``(2) Definitions.--For purposes of this subsection:
``(A) Network.--The term `network' means, with respect to a
MedicarePlus organization offering a MedicarePlus plan, the
participating health professionals and providers through whom
the organization provides health care items and services to
enrollees.
``(B) Network coverage.--The term `network coverage' means
a MedicarePlus plan offered by a MedicarePlus organization
that provides or arranges for the provision of health care
items and services to enrollees through participating health
professionals and providers.
``(C) Participating.--The term `participating' means, with
respect to a health professional or provider, a health
professional or provider that provides health care items and
services to enrollees under network coverage under an
agreement with the MedicarePlus organization offering the
coverage.
``(p) Special Rule for Unrestricted Fee-for-Service MSA
Plans.--Subsections (j)(1) and (k) shall not apply to a
MedicarePlus organization with respect to an MSA plan it
offers if the plan does not limit the providers through whom
benefits may be obtained under the plan.
``payments to medicareplus organizations
``Sec. 1853. (a) Payments to Organizations.--
``(1) Monthly payments.--
``(A) In general.--Under a contract under section 1857 and
subject to subsections (e) and (f), the Secretary shall make
monthly payments under this section in advance to each
MedicarePlus organization, with respect to coverage of an
individual under this part in a MedicarePlus payment area for
a month, in an amount equal to \1/12\ of the annual
MedicarePlus capitation rate (as calculated under subsection
(c)) with respect to that individual for that area, adjusted
for 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.
``(B) Special rule for end-stage renal disease.--The
Secretary shall establish separate rates of payment to a
MedicarePlus organization with respect to classes of
individuals determined to have end-stage renal disease and
enrolled in a MedicarePlus plan of the organization. Such
rates of payment shall be actuarially equivalent to rates
paid to other enrollees in the MedicarePlus payment area (or
such other area as specified by the Secretary). In accordance
with regulations, the Secretary shall provide for the
application of the seventh sentence of section 1881(b)(7) to
payments under this section covering the provision of renal
dialysis treatment in the same manner as such sentence
applies to composite rate payments described in such
sentence.
``(2) Adjustment to reflect number of enrollees.--
``(A) In general.--The amount of payment under this
subsection may be retroactively adjusted to take into account
any difference between the actual number of individuals
enrolled with an organization under this part and the number
of such individuals estimated to be so enrolled in
determining the amount of the advance payment.
``(B) Special rule for certain enrollees.--
``(i) In general.--Subject to clause (ii), the Secretary
may make retroactive adjustments under subparagraph (A) to
take into account individuals enrolled during the period
beginning on the date on which the individual enrolls with a
MedicarePlus organization under a 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 organization under this part,
except that for purposes of making such retroactive
adjustments under this subparagraph, such period may not
exceed 90 days.
``(ii) Exception.--No adjustment may be made under clause
(i) with respect to any individual who does not certify that
the organization provided the individual with the information
required to be disclosed under section 1852(c) at the time
the individual enrolled with the organization.
``(3) Establishment of risk adjustment factors.--
``(A) Report.--The Secretary shall develop, and submit to
Congress by not later than October 1, 1999, a report on a
method of risk adjustment of payment rates under this section
that accounts for variations in per capita costs based on
health status. Such report shall include an evaluation of
such method by an outside, independent actuary of the
actuarial soundness of the proposal.
``(B) Data collection.--In order to carry out this
paragraph, the Secretary shall require MedicarePlus
organizations (and eligible organizations with risk-sharing
contracts under section 1876) to submit, for periods
beginning on or after January 1, 1998, data regarding
inpatient hospital services and other services and other
information the Secretary deems necessary.
``(C) Initial implementation.--The Secretary shall first
provide for implementation of a risk adjustment methodology
that accounts for variations in per capita costs based on
health status and other demographic factors for payments by
no later than January 1, 2000.
``(b) Annual Announcement of Payment Rates.--
``(1) Annual announcement.--The Secretary shall annually
determine, and shall announce (in a manner intended to
provide notice to interested parties) not later than
[[Page H4442]]
August 1 before the calendar year concerned--
``(A) the annual MedicarePlus capitation rate for each
MedicarePlus payment area for the year, and
``(B) the risk and other factors to be used in adjusting
such rates under subsection (a)(1)(A) for payments for months
in that year.
``(2) Advance notice of methodological changes.--At least
45 days before making the announcement under paragraph (1)
for a year, the Secretary shall provide for notice to
MedicarePlus organizations of proposed changes to be made in
the methodology from the methodology and assumptions used in
the previous announcement and shall provide such
organizations an opportunity to comment on such proposed
changes.
``(3) Explanation of assumptions.--In each announcement
made under paragraph (1), the Secretary shall include an
explanation of the assumptions and changes in methodology
used in the announcement in sufficient detail so that
MedicarePlus organizations can compute monthly adjusted
MedicarePlus capitation rates for individuals in each
MedicarePlus payment area which is in whole or in part within
the service area of such an organization.
``(c) Calculation of Annual MedicarePlus Capitation
Rates.--
``(1) In General.--For purposes of this part, each annual
MedicarePlus capitation rate, for a MedicarePlus payment area
for a contract year consisting of a calendar year, is equal
to the largest of the amounts specified in the following
subparagraphs (A), (B), or (C):
``(A) Blended capitation rate.--The sum of--
``(i) area-specific percentage for the year (as specified
under paragraph (2) for the year) of the annual area-specific
MedicarePlus capitation rate for the year for the
MedicarePlus payment area, as determined under paragraph (3),
and
``(ii) national percentage (as specified under paragraph
(2) for the year) of the input-price-adjusted annual national
MedicarePlus capitation rate for the year, as determined
under paragraph (4),
multiplied by the payment adjustment factors described in
subparagraphs (A) and (B) of paragraph (5).
``(B) Minimum amount.--12 multiplied by the following
amount:
``(i) For 1998, $350 (but not to exceed, in the case of an
area outside the 50 States and the District of Columbia, 150
percent of the annual per capita rate of payment for 1997
determined under section 1876(a)(1)(C) for the area).
``(ii) For a succeeding year, the minimum amount specified
in this clause (or clause (i)) for the preceding year
increased by the national per capita MedicarePlus growth
percentage, specified under paragraph (6) for that succeeding
year.
``(C) Minimum percentage increase.--
``(i) For 1998, the annual per capita rate of payment for
1997 determined under section 1876(a)(1)(C) for the
MedicarePlus payment area.
``(ii) For 1999 and 2000, 101 percent of the annual
MedicarePlus capitation rate under this paragraph for the
area for the previous year.
``(iii) For a subsequent year, 102 percent of the annual
MedicarePlus capitation rate under this paragraph for the
area for the previous year.
``(2) Area-specific and national percentages.--For purposes
of paragraph (1)(A)--
``(A) for 1998, the `area-specific percentage' is 90
percent and the `national percentage' is 10 percent,
``(B) for 1999, the `area-specific percentage' is 85
percent and the `national percentage' is 15 percent,
``(C) for 2000, the `area-specific percentage' is 80
percent and the `national percentage' is 20 percent,
``(D) for 2001, the `area-specific percentage' is 75
percent and the `national percentage' is 25 percent, and
``(E) for a year after 2001, the `area-specific percentage'
is 70 percent and the `national percentage' is 30 percent.
``(3) Annual area-specific medicareplus capitation rate.--
``(A) In general.--For purposes of paragraph (1)(A),
subject to subparagraph (B), the annual area-specific
MedicarePlus capitation rate for a MedicarePlus payment
area--
``(i) for 1998 is the annual per capita rate of payment for
1997 determined under section 1876(a)(1)(C) for the area,
increased by the national per capita MedicarePlus growth
percentage for 1998 (as defined in paragraph (6)); or
``(ii) for a subsequent year is the annual area-specific
MedicarePlus capitation rate for the previous year determined
under this paragraph for the area, increased by the national
per capita MedicarePlus growth percentage for such subsequent
year.
``(B) Removal of medical education and disproportionate
share hospital payments from calculation of adjusted average
per capita cost.--
``(i) In general.--In determining the area-specific
MedicarePlus capitation rate under subparagraph (A), for a
year (beginning with 1998), the annual per capita rate of
payment for 1997 determined under section 1876(a)(1)(C) shall
be adjusted to exclude from the rate the applicable percent
(specified in clause (ii)) of the payment adjustments
described in subparagraph (C).
``(ii) Applicable percent.--For purposes of clause (i), the
applicable percent for--
``(I) 1998 is 20 percent,
``(II) 1999 is 40 percent,
``(III) 2000 is 60 percent,
``(IV) 2001 is 80 percent, and
``(V) a succeeding year is 100 percent.
``(C) Payment adjustment.--The payment adjustments
described in this subparagraph are payment adjustments which
the Secretary estimates were payable during 1997--
``(i) under section 1886(d)(5)(F) for hospitals serving a
disproportionate share of low-income patients,
``(ii) for the indirect costs of medical education under
section 1886(d)(5)(B), and
``(iii) for direct graduate medical education costs under
section 1886(h),
multiplied by a ratio (estimated by the Secretary) of total
payments under subsection (h) and section 1858 in 1998 to
payments under such subsection and payments under such
section in such year for hospitals not reimbursed under
section 1814(b)(3).
``(4) Input-price-adjusted annual national medicareplus
capitation rate.--
``(A) In general.--For purposes of paragraph (1)(A), the
input-price-adjusted annual national MedicarePlus capitation
rate for a MedicarePlus 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 annual MedicarePlus
capitation rate (determined under subparagraph (B)) 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 clause (iii), the Secretary shall, subject to
subparagraph (C), apply those indices under this title that
are used in applying (or updating) national payment rates for
specific areas and localities.
``(B) National standardized annual medicareplus capitation
rate.--In subparagraph (A)(i), the `national standardized
annual MedicarePlus capitation rate' for a year is equal to--
``(i) the sum (for all MedicarePlus payment areas) of the
product of--
``(I) the annual area-specific MedicarePlus capitation rate
for that year for the area under paragraph (3), and
``(II) the average number of medicare beneficiaries
residing in that area in the year, multiplied by the average
of the risk factor weights used to adjust payments under
subsection (a)(1)(A) for such beneficiaries in such area;
divided by
``(ii) the sum of the products described in clause (i)(II)
for all areas for that year.
``(C) Special rules for 1998.--In applying this paragraph
for 1998--
``(i) medicare services shall be divided into 2 types of
services: part A services and part B services;
``(ii) the proportions described in subparagraph (A)(ii)--
``(I) for part A services shall be the ratio (expressed as
a percentage) of the national average annual per capita rate
of payment for part A for 1997 to the total national average
annual per capita rate of payment for parts A and B for 1997,
and
``(II) for part B services shall be 100 percent minus the
ratio described in subclause (I);
``(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;
``(iv) for part B services--
``(I) 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
``(II) of the remaining 34 percent of the amount of such
payments, 40 percent shall be adjusted by the index described
in clause (iii); and
``(v) the index values shall be computed based only on the
beneficiary population who are 65 years of age or older and
who are not determined to have end stage renal disease.
The Secretary may continue to apply the rules described in
this subparagraph (or similar rules) for 1999.
``(5) Payment adjustment budget neutrality factors.--For
purposes of paragraph (1)(A)--
``(A) Blended rate payment adjustment factor.--For each
year, the Secretary shall compute a blended rate payment
adjustment factor such that, not taking into account
subparagraphs (B) and (C) of paragraph (1) and the
application of the payment adjustment factor described in
subparagraph (B) but taking into account paragraph (7), the
aggregate of the payments that would be made under this part
is equal to the aggregate payments that would have been made
under this part (not taking into account such subparagraphs
and such other adjustment factor) if the area-specific
percentage under paragraph (1) for the year had been 100
percent and the national percentage had been 0 percent.
``(B) Floor-and-minimum-update payment adjustment factor.--
For each year, the Secretary shall compute a floor-and-
minimum-update payment adjustment factor so that, taking into
account the application of
[[Page H4443]]
the blended rate payment adjustment factor under subparagraph
(A) and subparagraphs (B) and (C) of paragraph (1) and the
application of the adjustment factor under this subparagraph,
the aggregate of the payments under this part shall not
exceed the aggregate payments that would have been made under
this part if subparagraphs (B) and (C) of paragraph (1) did
not apply and if the floor-and-minimum-update payment
adjustment factor under this subparagraph was 1.
``(6) National per capita medicareplus growth percentage
defined.--
``(A) In general.--In this part, the `national per capita
MedicarePlus growth percentage' for a year is the percentage
determined by the Secretary, by April 30th before the
beginning of the year involved, to reflect the Secretary's
estimate of the projected per capita rate of growth in
expenditures under this title for an individual entitled to
benefits under part A and enrolled under part B, reduced by
the number of percentage points specified in subparagraph (B)
for the year. Separate determinations may be made for aged
enrollees, disabled enrollees, and enrollees with end-stage
renal disease. Such percentage shall include an adjustment
for over or under projection in the growth percentage for
previous years.
``(B) Adjustment.--The number of percentage points
specified in this subparagraph is--
``(i) for 1998, 0.5 percentage points,
``(ii) for 1999, 0.5 percentage points,
``(iii) for 2000, 0.5 percentage points,
``(iv) for 2001, 0.5 percentage points,
``(v) for 2002, 0.5 percentage points, and
``(vi) for a year after 2002, 0 percentage points.
``(7) treatment of areas with highly variable payment
rates.--In the case of a MedicarePlus payment area for which
the annual per capita rate of payment determined under
section 1876(a)(1)(C) for 1997 varies by more than 20 percent
from such rate for 1996, for purposes of this subsection the
Secretary may substitute for such rate for 1997 a rate that
is more representative of the costs of the enrollees in the
area.
``(d) MedicarePlus Payment Area Defined.--
``(1) In general.--In this part, except as provided in
paragraph (3), the term `MedicarePlus payment area' means a
county, or equivalent area specified by the Secretary.
``(2) Rule for esrd beneficiaries.--In the case of
individuals who are determined to have end stage renal
disease, the MedicarePlus payment area shall be a State or
such other payment area as the Secretary specifies.
``(3) Geographic adjustment.--
``(A) In general.--Upon written request of the chief
executive officer of a State for a contract year (beginning
after 1998) made at least 7 months before the beginning of
the year, the Secretary shall make a geographic adjustment to
a MedicarePlus payment area in the State otherwise determined
under paragraph (1)--
``(i) to a single statewide MedicarePlus payment area,
``(ii) to the metropolitan based system described in
subparagraph (C), or
``(iii) to consolidating into a single MedicarePlus payment
area noncontiguous counties (or equivalent areas described in
paragraph (1)) 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.
``(B) Budget neutrality adjustment.--In the case of a State
requesting an adjustment under this paragraph, the Secretary
shall adjust the payment rates otherwise established under
this section for MedicarePlus payment areas in the State in a
manner so that the aggregate of the payments under this
section in the State shall not exceed the aggregate payments
that would have been made under this section for MedicarePlus
payment areas in the State in the absence of the adjustment
under this paragraph.
``(C) Metropolitan based system.--The metropolitan based
system described in this subparagraph 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 MedicarePlus
payment area, and
``(ii) all areas in the State that do not fall within a
metropolitan statistical area are treated as a single
MedicarePlus payment area.
``(D) Areas.--In subparagraph (C), 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.
``(e) Special Rules for Individuals Electing MSA Plans.--
``(1) In general.--If the amount of the monthly premium for
an MSA plan for a MedicarePlus payment area for a year is
less than \1/12\ of the annual MedicarePlus capitation rate
applied under this section for the area and year involved,
the Secretary shall deposit an amount equal to 100 percent of
such difference in a MedicarePlus MSA established (and, if
applicable, designated) by the individual under paragraph
(2).
``(2) Establishment and designation of medicareplus medical
savings account as requirement for payment of contribution.--
In the case of an individual who has elected coverage under
an MSA plan, no payment shall be made under paragraph (1) on
behalf of an individual for a month unless the individual--
``(A) has established before the beginning of the month (or
by such other deadline as the Secretary may specify) a
MedicarePlus MSA (as defined in section 138(b)(2) of the
Internal Revenue Code of 1986), and
``(B) if the individual has established more than one such
MedicarePlus MSA, has designated one of such accounts as the
individual's MedicarePlus MSA for purposes of this part.
Under rules under this section, such an individual may change
the designation of such account under subparagraph (B) for
purposes of this part.
``(3) Lump sum deposit of medical savings account
contribution.--In the case of an individual electing an MSA
plan effective beginning with a month in a year, the amount
of the contribution to the MedicarePlus MSA on behalf of the
individual for that month and all successive months in the
year shall be deposited during that first month. In the case
of a termination of such an election as of a month before the
end of a year, the Secretary shall provide for a procedure
for the recovery of deposits attributable to the remaining
months in the year.
``(f) Payments From Trust Fund.--The payment to a
MedicarePlus organization under this section for individuals
enrolled under this part with the organization and payments
to a MedicarePlus MSA under subsection (e)(1) shall be made
from the Federal Hospital Insurance Trust Fund and the
Federal Supplementary Medical Insurance Trust Fund in such
proportion as the Secretary determines reflects the relative
weight that benefits under part A and under part B represents
of the actuarial value of the total benefits under this
title. Monthly payments otherwise payable under this section
for October 2001 shall be paid on the last business day of
September 2001.
``(g) Special Rule for Certain Inpatient Hospital Stays.--
In the case of an individual who is receiving inpatient
hospital services from a subsection (d) hospital (as defined
in section 1886(d)(1)(B)) as of the effective date of the
individual's--
``(1) election under this part of a MedicarePlus plan
offered by a MedicarePlus organization--
``(A) payment for such services until the date of the
individual's discharge shall be made under this title through
the MedicarePlus plan or the medicare fee-for-service program
option described in section 1851(a)(1)(A) (as the case may
be) elected before the election with such organization,
``(B) the elected organization shall not be financially
responsible for payment for such services until the date
after the date of the individual's discharge, and
``(C) the organization shall nonetheless be paid the full
amount otherwise payable to the organization under this part;
or
``(2) termination of election with respect to a
MedicarePlus organization under this part--
``(A) the organization shall be financially responsible for
payment for such services after such date and until the date
of the individual's discharge,
``(B) payment for such services during the stay shall not
be made under section 1886(d) or by any succeeding
MedicarePlus organization, and
``(C) the terminated organization shall not receive any
payment with respect to the individual under this part during
the period the individual is not enrolled.
``premiums
``Sec. 1854. (a) Submission and Charging of Premiums.--
``(1) In general.--Subject to paragraph (3), each
MedicarePlus organization shall file with the Secretary each
year, in a form and manner and at a time specified by the
Secretary--
``(A) the amount of the monthly premium for coverage for
services under section 1852(a) under each MedicarePlus plan
it offers under this part in each MedicarePlus payment area
(as defined in section 1853(d)) in which the plan is being
offered; and
``(B) the enrollment capacity in relation to the plan in
each such area.
``(2) Terminology.--In this part--
``(A) the term `monthly premium' means, with respect to a
MedicarePlus plan offered by a MedicarePlus organization, the
monthly premium filed under paragraph (1), not taking into
account the amount of any payment made toward the premium
under section 1853; and
``(B) the term `net monthly premium' means, with respect to
such a plan and an individual enrolled with the plan, the
premium (as defined in subparagraph (A)) for the plan reduced
by the amount of payment made toward such premium under
section 1853.
``(b) Monthly Premium Charged.--The monthly amount of the
premium charged by a MedicarePlus organization for a
MedicarePlus plan offered in a MedicarePlus payment area to
an individual under this part shall be equal to the net
monthly premium plus any monthly premium charged in
accordance with subsection (e)(2) for supplemental benefits.
``(c) Uniform Premium.--The monthly premium and monthly
amount charged under subsection (b) of a MedicarePlus
organization under this part may not vary among individuals
who reside in the same MedicarePlus payment area.
[[Page H4444]]
``(d) Terms and Conditions of Imposing Premiums.--Each
MedicarePlus organization shall permit the payment of net
monthly premiums on a monthly basis and may terminate
election of individuals for a MedicarePlus plan for failure
to make premium payments only in accordance with section
1851(g)(3)(B)(i). A MedicarePlus organization is not
authorized to provide for cash or other monetary rebates as
an inducement for enrollment or otherwise.
``(e) Limitation on Enrollee Cost-Sharing.--
``(1) For basic and additional benefits.--Except as
provided in paragraph (2), in no event may--
``(A) the net monthly premium (multiplied by 12) and the
actuarial value of the deductibles, coinsurance, and
copayments applicable on average to individuals enrolled
under this part with a MedicarePlus plan of an organization
with respect to required benefits described in section
1852(a)(1) and additional benefits (if any) required under
subsection (f)(1) for a year, exceed
``(B) the actuarial value of the deductibles, coinsurance,
and copayments that would be applicable on average to
individuals entitled to benefits under part A and enrolled
under part B if they were not members of a MedicarePlus
organization for the year.
``(2) For supplemental benefits.--If the MedicarePlus
organization provides to its members enrolled under this part
supplemental benefits described in section 1852(a)(3), the
sum of the monthly premium rate (multiplied by 12) charged
for such supplemental benefits and the actuarial value of its
deductibles, coinsurance, and copayments charged with respect
to such benefits may not exceed the adjusted community rate
for such benefits (as defined in subsection (f)(4)).
``(3) Exception for msa plans.--Paragraphs (1) and (2) do
not apply to an MSA plan.
``(4) Determination on other basis.--If the Secretary
determines that adequate data are not available to determine
the actuarial value under paragraph (1)(A) or (2), the
Secretary may determine such amount with respect to all
individuals in the MedicarePlus payment area, the State, or
in the United States, eligible to enroll in the MedicarePlus
plan involved under this part or on the basis of other
appropriate data.
``(f) Requirement for Additional Benefits.--
``(1) Requirement.--
``(A) In general.--Each MedicarePlus organization (in
relation to a MedicarePlus plan it offers) shall provide that
if there is an excess amount (as defined in subparagraph (B))
for the plan for a contract year, subject to the succeeding
provisions of this subsection, the organization shall provide
to individuals such additional benefits (as the organization
may specify) in a value which is at least equal to the
adjusted excess amount (as defined in subparagraph (C)).
``(B) Excess amount.--For purposes of this paragraph, the
`excess amount', for an organization for a plan, is the
amount (if any) by which--
``(i) the average of the capitation payments made to the
organization under section 1853 for the plan at the beginning
of contract year, exceeds
``(ii) the actuarial value of the required benefits
described in section 1852(a)(1) under the plan for
individuals under this part, as determined based upon an
adjusted community rate described in paragraph (4) (as
reduced for the actuarial value of the coinsurance and
deductibles under parts A and B).
``(C) Adjusted excess amount.--For purposes of this
paragraph, the `adjusted excess amount', for an organization
for a plan, is the excess amount reduced to reflect any
amount withheld and reserved for the organization for the
year under paragraph (2).
``(D) No application to msa plans.--Subparagraph (A) shall
not apply to an MSA plan.
``(E) Uniform application.--This paragraph shall be applied
uniformly for all enrollees for a plan in a MedicarePlus
payment area.
``(F) Construction.--Nothing in this subsection shall be
construed as preventing a MedicarePlus organization from
providing health care benefits that are in addition to the
benefits otherwise required to be provided under this
paragraph and from imposing a premium for such additional
benefits.
``(2) Stabilization fund.--A MedicarePlus organization may
provide that a part of the value of an excess amount
described in paragraph (1) be withheld and reserved in the
Federal Hospital Insurance Trust Fund and in the Federal
Supplementary Medical Insurance Trust Fund (in such
proportions as the Secretary determines to be appropriate) by
the Secretary for subsequent annual contract periods, to the
extent required to stabilize and prevent undue fluctuations
in the additional benefits offered in those subsequent
periods by the organization in accordance with such
paragraph. Any of such value of the amount reserved which is
not provided as additional benefits described in paragraph
(1)(A) to individuals electing the MedicarePlus plan of the
organization in accordance with such paragraph prior to the
end of such periods, shall revert for the use of such trust
funds.
``(3) Determination based on insufficient data.--For
purposes of this subsection, if the Secretary finds that
there is insufficient enrollment experience (including no
enrollment experience in the case of a provider-sponsored
organization) to determine an average of the capitation
payments to be made under this part at the beginning of a
contract period, the Secretary may determine such an average
based on the enrollment experience of other contracts entered
into under this part.
``(4) Adjusted community rate.--
``(A) In general.--For purposes of this subsection, subject
to subparagraph (B), the term `adjusted community rate' for a
service or services means, at the election of a MedicarePlus
organization, either--
``(i) the rate of payment for that service or services
which the Secretary annually determines would apply to an
individual electing a MedicarePlus plan under this part if
the rate of payment were determined under a `community rating
system' (as defined in section 1302(8) of the Public Health
Service Act, other than subparagraph (C)), or
``(ii) such portion of the weighted aggregate premium,
which the Secretary annually estimates would apply to such an
individual, as the Secretary annually estimates is
attributable to that service or services,
but adjusted for differences between the utilization
characteristics of the individuals electing coverage under
this part and the utilization characteristics of the other
enrollees with the plan (or, if the Secretary finds that
adequate data are not available to adjust for those
differences, the differences between the utilization
characteristics of individuals selecting other MedicarePlus
coverage, or MedicarePlus eligible individuals in the area,
in the State, or in the United States, eligible to elect
MedicarePlus coverage under this part and the utilization
characteristics of the rest of the population in the area, in
the State, or in the United States, respectively).
``(B) Special rule for provider-sponsored organizations.--
In the case of a MedicarePlus organization that is a
provider-sponsored organization, the adjusted community rate
under subparagraph (A) for a MedicarePlus plan of the
organization may be computed (in a manner specified by the
Secretary) using data in the general commercial marketplace
or (during a transition period) based on the costs incurred
by the organization in providing such a plan.
``(g) Periodic Auditing.--The Secretary shall provide for
the annual auditing of the financial records (including data
relating to medicare utilization, costs, and computation of
the adjusted community rate) of at least one-third of the
MedicarePlus organizations offering MedicarePlus plans under
this part. The Comptroller General shall monitoring auditing
activities conducted under this subsection.
``(h) Prohibition of State Imposition of Premium Taxes.--No
State may impose a premium tax or similar tax with respect to
premiums on MedicarePlus plans or the offering of such plans.
``organizational and financial requirements for medicareplus
organizations; provider-sponsored organizations
``Sec. 1855. (a) Organized and Licensed Under State Law.--
``(1) In general.--Subject to paragraphs (2) and (3), a
MedicarePlus organization shall be organized and licensed
under State law as a risk-bearing entity eligible to offer
health insurance or health benefits coverage in each State in
which it offers a MedicarePlus plan.
``(2) Special exception for provider-sponsored
organizations.--
``(A) In general.--In the case of a provider-sponsored
organization that seeks to offer a MedicarePlus plan in a
State, the Secretary shall waive the requirement of paragraph
(1) that the organization be licensed in that State if--
``(i) the organization files an application for such waiver
with the Secretary, and
``(ii) the Secretary determines, based on the application
and other evidence presented to the Secretary, that any of
the grounds for approval of the application described in
subparagraph (B), (C), or (D) has been met.
``(B) Failure to act on licensure application on a timely
basis.--A ground for approval of such a waiver application is
that the State has failed to complete action on a licensing
application of the organization within 90 days of the date of
the State's receipt of the application. No period before the
date of the enactment of this section shall be included in
determining such 90-day period.
``(C) Denial of application based on discriminatory
treatment.--A ground for approval of such a waiver
application is that the State has denied such a licensing
application and--
``(i) the State has imposed documentation or information
requirements not related to solvency requirements that are
not generally applicable to other entities engaged in
substantially similar business, or
``(ii) the standards or review process imposed by the State
as a condition of approval of the license imposes any
material requirements, procedures, or standards (other than
requirements and standards relating to solvency) to such
organizations that are not generally applicable to other
entities engaged in substantially similar business.
``(D) Denial of application based on application of
solvency requirements.--A ground for approval of such a
waiver application is that the State has denied such a
licensing application based (in whole or in part) on the
organization's failure to meet applicable solvency
requirements and--
``(i) such requirements are not the same as the solvency
standards established under section 1856(a); or
``(ii) the State has imposed as a condition of approval of
the license any documentation
[[Page H4445]]
or information requirements relating to solvency or other
material requirements, procedures, or standards relating to
solvency that are different from the requirements,
procedures, and standards applied by the Secretary under
subsection (d)(2).
For purposes of this subparagraph, the term `solvency
requirements' means requirements relating to solvency and
other matters covered under the standards established under
section 1856(a).
``(E) Treatment of waiver.--Subject to section 1852(m), in
the case of a waiver granted under this paragraph for a
provider-sponsored organization--
``(i) the waiver shall be effective for a 36-month period,
except it may be renewed based on a subsequent application
filed during the last 6 months of such period,
``(ii) the waiver is conditioned upon the pendency of the
licensure application during the period the waiver is in
effect, and
``(iii) any provisions of State law which relate to the
licensing of the organization and which prohibit the
organization from providing coverage pursuant to a contract
under this part shall be superseded.
Nothing in this subparagraph shall be construed as limiting
the number of times such a waiver may be renewed. Nothing in
clause (iii) shall be construed as waiving any provision of
State law which relates to quality of care or consumer
protection (and does not relate to solvency standards) and
which is imposed on a uniform basis and is generally
applicable to other entities engaged in substantially similar
business.
``(F) Prompt action on application.--The Secretary shall
grant or deny such a waiver application within 60 days after
the date the Secretary determines that a substantially
complete application has been filed. Nothing in this section
shall be construed as preventing an organization which has
had such a waiver application denied from submitting a
subsequent waiver application.
``(3) Exception if required to offer more than medicareplus
plans.--Paragraph (1) shall not apply to a MedicarePlus
organization in a State if the State requires the
organization, as a condition of licensure, to offer any
product or plan other than a MedicarePlus plan.
``(4) Licensure does not substitute for or constitute
certification.--The fact that an organization is licensed in
accordance with paragraph (1) does not deem the organization
to meet other requirements imposed under this part.
``(b) Prepaid Payment.--A MedicarePlus organization shall
be compensated (except for premiums, deductibles,
coinsurance, and copayments) for the provision of health care
services to enrolled members under the contract under this
part by a payment which is paid on a periodic basis without
regard to the date the health care services are provided and
which is fixed without regard to the frequency, extent, or
kind of health care service actually provided to a member.
``(c) Assumption of Full Financial Risk.--The MedicarePlus
organization shall assume full financial risk on a
prospective basis for the provision of the health care
services (except, at the election of the organization,
hospice care) for which benefits are required to be provided
under section 1852(a)(1), except that the organization--
``(1) may obtain insurance or make other arrangements for
the cost of providing to any enrolled member such services
the aggregate value of which exceeds $5,000 in any year,
``(2) may obtain insurance or make other arrangements for
the cost of such services provided to its enrolled members
other than through the organization because medical necessity
required their provision before they could be secured through
the organization,
``(3) may obtain insurance or make other arrangements for
not more than 90 percent of the amount by which its costs for
any of its fiscal years exceed 115 percent of its income for
such fiscal year, and
``(4) may make arrangements with physicians or other health
professionals, health care institutions, or any combination
of such individuals or institutions to assume all or part of
the financial risk on a prospective basis for the provision
of basic health services by the physicians or other health
professionals or through the institutions.
``(d) Certification of Provision Against Risk of Insolvency
for Unlicensed PSOs.--
``(1) In general.--Each MedicarePlus organization that is a
provider-sponsored organization, that is not licensed by a
State under subsection (a), and for which a waiver
application has been approved under subsection (a)(2), shall
meet standards established under section 1856(a) relating to
the financial solvency and capital adequacy of the
organization.
``(2) Certification process for solvency standards for
psos.--The Secretary shall establish a process for the
receipt and approval of applications of a provider-sponsored
organization described in paragraph (1) for certification
(and periodic recertification) of the organization as meeting
such solvency standards. Under such process, the Secretary
shall act upon such an application not later than 60 days
after the date the application has been received.
``(e) Provider-Sponsored Organization Defined.--
``(1) In general.--In this part, the term `provider-
sponsored organization' means a public or private entity--
``(A) that is established or organized by a health care
provider, or group of affiliated health care providers,
``(B) that provides a substantial proportion (as defined by
the Secretary in accordance with paragraph (2)) of the health
care items and services under the contract under this part
directly through the provider or affiliated group of
providers, and
``(C) with respect to which those affiliated providers that
share, directly or indirectly, substantial financial risk
with respect to the provision of such items and services have
at least a majority financial interest in the entity.
``(2) Substantial proportion.--In defining what is a
`substantial proportion' for purposes of paragraph (1)(B),
the Secretary--
``(A) shall take into account (i) the need for such an
organization to assume responsibility for a substantial
proportion of services in order to assure financial stability
and (ii) the practical difficulties in such an organization
integrating a very wide range of service providers; and
``(B) may vary such proportion based upon relevant
differences among organizations, such as their location in an
urban or rural area.
``(3) Affiliation.--For purposes of this subsection, a
provider is `affiliated' with another provider if, through
contract, ownership, or otherwise--
``(A) one provider, directly or indirectly, controls, is
controlled by, or is under common control with the other,
``(B) both providers are part of a controlled group of
corporations under section 1563 of the Internal Revenue Code
of 1986, or
``(C) both providers are part of an affiliated service
group under section 414 of such Code.
``(4) Control.--For purposes of paragraph (3), control is
presumed to exist if one party, directly or indirectly, owns,
controls, or holds the power to vote, or proxies for, not
less than 51 percent of the voting rights or governance
rights of another.
``(5) Health care provider defined.--In this subsection,
the term `health care provider' means--
``(A) any individual who is engaged in the delivery of
health care services in a State and who is required by State
law or regulation to be licensed or certified by the State to
engage in the delivery of such services in the State, and
``(B) any entity that is engaged in the delivery of health
care services in a State and that, if it is required by State
law or regulation to be licensed or certified by the State to
engage in the delivery of such services in the State, is so
licensed.
``(6) Regulations.--The Secretary shall issue regulations
to carry out this subsection.
``establishment of standards
``Sec. 1856. (a) Establishment of Solvency Standards for
Provider-Sponsored Organizations.--
``(1) Establishment.--
``(A) In general.--The Secretary shall establish, on an
expedited basis and using a negotiated rulemaking process
under subchapter III of chapter 5 of title 5, United States
Code, standards described in section 1855(d)(1) (relating to
the financial solvency and capital adequacy of the
organization) that entities must meet to qualify as provider-
sponsored organizations under this part.
``(B) Factors to consider for solvency standards.--In
establishing solvency standards under subparagraph (A) for
provider-sponsored organizations, the Secretary shall consult
with interested parties and shall take into account--
``(i) the delivery system assets of such an organization
and ability of such an organization to provide services
directly to enrollees through affiliated providers, and
``(ii) alternative means of protecting against insolvency,
including reinsurance, unrestricted surplus, letters of
credit, guarantees, organizational insurance coverage,
partnerships with other licensed entities, and valuation
attributable to the ability of such an organization to meet
its service obligations through direct delivery of care.
``(C) Enrollee protection against insolvency.--Such
standards shall include provisions to prevent enrollees from
being held liable to any person or entity for the
MedicarePlus organization's debts in the event of the
organization's insolvency.
``(2) Publication of notice.--In carrying out the
rulemaking process under this subsection, the Secretary,
after consultation with the National Association of Insurance
Commissioners, the American Academy of Actuaries,
organizations representative of medicare beneficiaries, and
other interested parties, shall publish the notice provided
for under section 564(a) of title 5, United States Code, by
not later than 45 days after the date of the enactment of
this section.
``(3) Target date for publication of rule.--As part of the
notice under paragraph (2), and for purposes of this
subsection, the `target date for publication' (referred to in
section 564(a)(5) of such title) shall be April 1, 1998.
``(4) Abbreviated period for submission of comments.--In
applying section 564(c) of such title under this subsection,
`15 days' shall be substituted for `30 days'.
``(5) Appointment of negotiated rulemaking committee and
facilitator.--The Secretary shall provide for--
``(A) the appointment of a negotiated rulemaking committee
under section 565(a) of such title by not later than 30 days
after the end of the comment period provided for
[[Page H4446]]
under section 564(c) of such title (as shortened under
paragraph (4)), and
``(B) the nomination of a facilitator under section 566(c)
of such title by not later than 10 days after the date of
appointment of the committee.
``(6) Preliminary committee report.--The negotiated
rulemaking committee appointed under paragraph (5) shall
report to the Secretary, by not later than January 1, 1998,
regarding the committee's progress on achieving a consensus
with regard to the rulemaking proceeding and whether such
consensus is likely to occur before one month before the
target date for publication of the rule. If the committee
reports that the committee has failed to make significant
progress towards such consensus or is unlikely to reach such
consensus by the target date, the Secretary may terminate
such process and provide for the publication of a rule under
this subsection through such other methods as the Secretary
may provide.
``(7) Final committee report.--If the committee is not
terminated under paragraph (6), the rulemaking committee
shall submit a report containing a proposed rule by not later
than one month before the target date of publication.
``(8) Interim, final effect.--The Secretary shall publish a
rule under this subsection in the Federal Register by not
later than the target date of publication. Such rule shall be
effective and final immediately on an interim basis, but is
subject to change and revision after public notice and
opportunity for a period (of not less than 60 days) for
public comment. In connection with such rule, the Secretary
shall specify the process for the timely review and approval
of applications of entities to be certified as provider-
sponsored organizations pursuant to such rules and consistent
with this subsection.
``(9) Publication of rule after public comment.--The
Secretary shall provide for consideration of such comments
and republication of such rule by not later than 1 year after
the target date of publication.
``(b) Establishment of Other Standards.--
``(1) In general.--The Secretary shall establish by
regulation other standards (not described in subsection (a))
for MedicarePlus organizations and plans consistent with, and
to carry out, this part.
``(2) Use of current standards.--Consistent with the
requirements of this part, standards established under this
subsection shall be based on standards established under
section 1876 to carry out analogous provisions of such
section. The Secretary shall also consider State model and
other standards relating to consumer protection and assuring
quality of care.
``(3) Use of interim standards.--For the period in which
this part is in effect and standards are being developed and
established under the preceding provisions of this
subsection, the Secretary shall provide by not later than
June 1, 1998, for the application of such interim standards
(without regard to any requirements for notice and public
comment) as may be appropriate to provide for the expedited
implementation of this part. Such interim standards shall not
apply after the date standards are established under the
preceding provisions of this subsection.
``(4) Application of new standards to entities with a
contract.--In the case of a MedicarePlus organization with a
contract in effect under this part at the time standards
applicable to the organization under this section are
changed, the organization may elect not to have such changes
apply to the organization until the end of the current
contract year (or, if there is less than 6 months remaining
in the contract year, until 1 year after the end of the
current contract year).
``(5) Relation to state laws.--Subject to section 1852(m),
the standards established under this subsection shall
supersede any State law or regulation with respect to
MedicarePlus plans which are offered by MedicarePlus
organizations under this part to the extent such law or
regulation is inconsistent with such standards. The previous
sentence shall not be construed as superseding a State law or
regulation that is not related to solvency, that is applied
on a uniform basis and is generally applicable to other
entities engaged in substantially similar business, and that
provides consumer protections in addition to, or more
stringent than, those provided under the standards under this
subsection.
``contracts with medicareplus organizations
``Sec. 1857. (a) In General.--The Secretary shall not
permit the election under section 1851 of a MedicarePlus plan
offered by a MedicarePlus organization under this part, and
no payment shall be made under section 1853 to an
organization, unless the Secretary has entered into a
contract under this section with the organization with
respect to the offering of such plan. Such a contract with an
organization may cover more than one MedicarePlus plan. Such
contract shall provide that the organization agrees to comply
with the applicable requirements and standards of this part
and the terms and conditions of payment as provided for in
this part.
``(b) Minimum Enrollment Requirements.--
``(1) In general.--Subject to paragraphs (2) and (3), the
Secretary may not enter into a contract under this section
with a MedicarePlus organization unless the organization has
at least 5,000 individuals (or 1,500 individuals in the case
of an organization that is a provider-sponsored organization)
who are receiving health benefits through the organization,
except that the standards under section 1856 may permit the
organization to have a lesser number of beneficiaries (but
not less than 500 in the case of an organization that is a
provider-sponsored organization) if the organization
primarily serves individuals residing outside of urbanized
areas.
``(2) Exception for msa plan.--Paragraph (1) shall not
apply with respect to a contract that relates only to an MSA
plan.
``(3) Allowing transition.--The Secretary may waive the
requirement of paragraph (1) during the first 3 contract
years with respect to an organization.
``(c) Contract Period and Effectiveness.--
``(1) Period.--Each contract under this section shall be
for a term of at least one year, as determined by the
Secretary, and may be made automatically renewable from term
to term in the absence of notice by either party of intention
to terminate at the end of the current term.
``(2) Termination authority.--In accordance with procedures
established under subsection (h), the Secretary may at any
time terminate any such contract or may impose the
intermediate sanctions described in an applicable paragraph
of subsection (g)(3) on the MedicarePlus organization if the
Secretary determines that the organization--
``(A) has failed substantially to carry out the contract;
``(B) is carrying out the contract in a manner inconsistent
with the efficient and effective administration of this part;
or
``(C) no longer substantially meets the applicable
conditions of this part.
``(3) Effective date of contracts.--The effective date of
any contract executed pursuant to this section shall be
specified in the contract, except that in no case shall a
contract under this section which provides for coverage under
an MSA plan be effective before January 1998 with respect to
such coverage.
``(4) Previous terminations.--The Secretary may not enter
into a contract with a MedicarePlus organization if a
previous contract with that organization under this section
was terminated at the request of the organization within the
preceding five-year period, except in circumstances which
warrant special consideration, as determined by the
Secretary.
``(5) Contracting authority.--The authority vested in the
Secretary by this part may be performed without regard to
such provisions of law or regulations relating to the making,
performance, amendment, or modification of contracts of the
United States as the Secretary may determine to be
inconsistent with the furtherance of the purpose of this
title.
``(d) Protections Against Fraud and Beneficiary
Protections.--
``(1) Inspection and audit.--Each contract under this
section shall provide that the Secretary, or any person or
organization designated by the Secretary--
``(A) shall have the right to inspect or otherwise evaluate
(i) the quality, appropriateness, and timeliness of services
performed under the contract and (ii) the facilities of the
organization when there is reasonable evidence of some need
for such inspection, and
``(B) shall have the right to audit and inspect any books
and records of the MedicarePlus organization that pertain (i)
to the ability of the organization to bear the risk of
potential financial losses, or (ii) to services performed or
determinations of amounts payable under the contract.
``(2) Enrollee notice at time of termination.--Each
contract under this section shall require the organization to
provide (and pay for) written notice in advance of the
contract's termination, as well as a description of
alternatives for obtaining benefits under this title, to each
individual enrolled with the organization under this part.
``(3) Disclosure.--
``(A) In general.--Each MedicarePlus organization shall, in
accordance with regulations of the Secretary, report to the
Secretary financial information which shall include the
following:
``(i) Such information as the Secretary may require
demonstrating that the organization has a fiscally sound
operation.
``(ii) A copy of the report, if any, filed with the Health
Care Financing Administration containing the information
required to be reported under section 1124 by disclosing
entities.
``(iii) A description of transactions, as specified by the
Secretary, between the organization and a party in interest.
Such transactions shall include--
``(I) any sale or exchange, or leasing of any property
between the organization and a party in interest;
``(II) any furnishing for consideration of goods, services
(including management services), or facilities between the
organization and a party in interest, but not including
salaries paid to employees for services provided in the
normal course of their employment and health services
provided to members by hospitals and other providers and by
staff, medical group (or groups), individual practice
association (or associations), or any combination thereof;
and
``(III) any lending of money or other extension of credit
between an organization and a party in interest.
[[Page H4447]]
The Secretary may require that information reported
respecting an organization which controls, is controlled by,
or is under common control with, another entity be in the
form of a consolidated financial statement for the
organization and such entity.
``(B) Party in interest defined.--For the purposes of this
paragraph, the term `party in interest' means--
``(i) any director, officer, partner, or employee
responsible for management or administration of a
MedicarePlus organization, any person who is directly or
indirectly the beneficial owner of more than 5 percent of the
equity of the organization, any person who is the beneficial
owner of a mortgage, deed of trust, note, or other interest
secured by, and valuing more than 5 percent of the
organization, and, in the case of a MedicarePlus organization
organized as a nonprofit corporation, an incorporator or
member of such corporation under applicable State corporation
law;
``(ii) any entity in which a person described in clause
(i)--
``(I) is an officer or director;
``(II) is a partner (if such entity is organized as a
partnership);
``(III) has directly or indirectly a beneficial interest of
more than 5 percent of the equity; or
``(IV) has a mortgage, deed of trust, note, or other
interest valuing more than 5 percent of the assets of such
entity;
``(iii) any person directly or indirectly controlling,
controlled by, or under common control with an organization;
and
``(iv) any spouse, child, or parent of an individual
described in clause (i).
``(C) Access to information.--Each MedicarePlus
organization shall make the information reported pursuant to
subparagraph (A) available to its enrollees upon reasonable
request.
``(4) Loan information.--The contract shall require the
organization to notify the Secretary of loans and other
special financial arrangements which are made between the
organization and subcontractors, affiliates, and related
parties.
``(e) Additional Contract Terms.--
``(1) In general.--The contract shall contain such other
terms and conditions not inconsistent with this part
(including requiring the organization to provide the
Secretary with such information) as the Secretary may find
necessary and appropriate.
``(2) Cost-sharing in enrollment-related costs.--The
contract with a MedicarePlus organization shall require the
payment to the Secretary for the organization's pro rata
share (as determined by the Secretary) of the estimated costs
to be incurred by the Secretary in carrying out section 1851
(relating to enrollment and dissemination of information) and
section 4360 of the Omnibus Budget Reconciliation Act of 1990
(relating to the health insurance counseling and assistance
program). Such payments are appropriated to defray the costs
described in the preceding sentence, to remain available
until expended.
``(3) Notice to enrollees in case of decertification.--If a
contract with a MedicarePlus organization is terminated under
this section, the organization shall notify each enrollee
with the organization under this part of such termination.
``(f) Prompt Payment by MedicarePlus Organization.--
``(1) Requirement.--A contract under this part shall
require a MedicarePlus organization to provide prompt payment
(consistent with the provisions of sections 1816(c)(2) and
1842(c)(2)) of claims submitted for services and supplies
furnished to individuals pursuant to the contract, if the
services or supplies are not furnished under a contract
between the organization and the provider or supplier.
``(2) Secretary's option to bypass noncomplying
organization.--In the case of a MedicarePlus eligible
organization which the Secretary determines, after notice and
opportunity for a hearing, has failed to make payments of
amounts in compliance with paragraph (1), the Secretary may
provide for direct payment of the amounts owed to providers
and suppliers for covered services and supplies furnished to
individuals enrolled under this part under the contract. If
the Secretary provides for the direct payments, the Secretary
shall provide for an appropriate reduction in the amount of
payments otherwise made to the organization under this part
to reflect the amount of the Secretary's payments (and the
Secretary's costs in making the payments).
``(g) Intermediate Sanctions.--
``(1) In general.--If the Secretary determines that a
MedicarePlus organization with a contract under this
section--
``(A) fails substantially to provide medically necessary
items and services that are required (under law or under the
contract) to be provided to an individual covered under the
contract, if the failure has adversely affected (or has
substantial likelihood of adversely affecting) the
individual;
``(B) imposes net monthly premiums on individuals enrolled
under this part in excess of the net monthly premiums
permitted;
``(C) acts to expel or to refuse to re-enroll an individual
in violation of the provisions of this part;
``(D) engages in any practice that would reasonably be
expected to have the effect of denying or discouraging
enrollment (except as permitted by this part) by eligible
individuals with the organization whose medical condition or
history indicates a need for substantial future medical
services;
``(E) misrepresents or falsifies information that is
furnished--
``(i) to the Secretary under this part, or
``(ii) to an individual or to any other entity under this
part;
``(F) fails to comply with the requirements of section
1852(j)(3); or
``(G) employs or contracts with any individual or entity
that is excluded from participation under this title under
section 1128 or 1128A for the provision of health care,
utilization review, medical social work, or administrative
services or employs or contracts with any entity for the
provision (directly or indirectly) through such an excluded
individual or entity of such services;
the Secretary may provide, in addition to any other remedies
authorized by law, for any of the remedies described in
paragraph (2).
``(2) Remedies.--The remedies described in this paragraph
are--
``(A) civil money penalties of not more than $25,000 for
each determination under paragraph (1) or, with respect to a
determination under subparagraph (D) or (E)(i) of such
paragraph, of not more than $100,000 for each such
determination, plus, with respect to a determination under
paragraph (1)(B), double the excess amount charged in
violation of such paragraph (and the excess amount charged
shall be deducted from the penalty and returned to the
individual concerned), and plus, with respect to a
determination under paragraph (1)(D), $15,000 for each
individual not enrolled as a result of the practice involved,
``(B) suspension of enrollment of individuals under this
part after the date the Secretary notifies the organization
of a determination under paragraph (1) and until the
Secretary is satisfied that the basis for such determination
has been corrected and is not likely to recur, or
``(C) suspension of payment to the organization under this
part for individuals enrolled after the date the Secretary
notifies the organization of a determination under paragraph
(1) and until the Secretary is satisfied that the basis for
such determination has been corrected and is not likely to
recur.
``(3) Other intermediate sanctions.--In the case of a
MedicarePlus organization for which the Secretary makes a
determination under subsection (c)(2) the basis of which is
not described in paragraph (1), the Secretary may apply the
following intermediate sanctions:
``(A) Civil money penalties of not more than $25,000 for
each determination under subsection (c)(2) if the deficiency
that is the basis of the determination has directly adversely
affected (or has the substantial likelihood of adversely
affecting) an individual covered under the organization's
contract
``(B) Civil money penalties of not more than $10,000 for
each week beginning after the initiation of procedures by the
Secretary under subsection (g) during which the deficiency
that is the basis of a determination under subsection (c)(2)
exists.
``(C) Suspension of enrollment of individuals under this
part after the date the Secretary notifies the organization
of a determination under subsection (c)(2) and until the
Secretary is satisfied that the deficiency that is the basis
for the determination has been corrected and is not likely to
recur.
``(h) Procedures for Termination.--
``(1) In general.--The Secretary may terminate a contract
with a MedicarePlus organization under this section in
accordance with formal investigation and compliance
procedures established by the Secretary under which--
``(A) the Secretary provides the organization with the
reasonable opportunity to develop and implement a corrective
action plan to correct the deficiencies that were the basis
of the Secretary's determination under subsection (c)(2);
``(B) the Secretary shall impose more severe sanctions on
an organization that has a history of deficiencies or that
has not taken steps to correct deficiencies the Secretary has
brought to the organization's attention;
``(C) there are no unreasonable or unnecessary delays
between the finding of a deficiency and the imposition of
sanctions; and
``(D) the Secretary provides the organization with
reasonable notice and opportunity for hearing (including the
right to appeal an initial decision) before terminating the
contract.
``(2) Civil money penalties.--The provisions of section
1128A (other than subsections (a) and (b)) shall apply to a
civil money penalty under subsection (f) or under paragraph
(2) or (3) of subsection (g) in the same manner as they apply
to a civil money penalty or proceeding under section
1128A(a).
``(3) Exception for imminent and serious risk to health.--
Paragraph (1) shall not apply if the Secretary determines
that a delay in termination, resulting from compliance with
the procedures specified in such paragraph prior to
termination, would pose an imminent and serious risk to the
health of individuals enrolled under this part with the
organization.
``definitions; miscellaneous provisions
``Sec. 1859. (a) Definitions Relating to MedicarePlus
Organizations.--In this part--
``(1) MedicarePlus organization.--The term `MedicarePlus
organization' means a public or private entity that is
certified under section 1856 as meeting the requirements and
standards of this part for such an organization.
[[Page H4448]]
``(2) Provider-sponsored organization.--The term `provider-
sponsored organization' is defined in section 1855(e)(1).
``(b) Definitions Relating to MedicarePlus Plans.--
``(1) MedicarePlus plan.--The term `MedicarePlus plan'
means health benefits coverage offered under a policy,
contract, or plan by a MedicarePlus organization pursuant to
and in accordance with a contract under section 1857.
``(2) MSA plan.--
``(A) In general.--The term `MSA plan' means a MedicarePlus
plan that--
``(i) provides reimbursement for at least the items and
services described in section 1852(a)(1) in a year but only
after the enrollee incurs countable expenses (as specified
under the plan) equal to the amount of an annual deductible
(described in subparagraph (B));
``(ii) counts as such expenses (for purposes of such
deductible) at least all amounts that would have been payable
under parts A and B, and that would have been payable by the
enrollee as deductibles, coinsurance, or copayments, if the
enrollee had elected to receive benefits through the
provisions of such parts; and
``(iii) provides, after such deductible is met for a year
and for all subsequent expenses for items and services
referred to in clause (i) in the year, for a level of
reimbursement that is not less than--
``(I) 100 percent of such expenses, or
``(II) 100 percent of the amounts that would have been paid
(without regard to any deductibles or coinsurance) under
parts A and B with respect to such expenses,
whichever is less.
``(B) Deductible.--The amount of annual deductible under an
MSA plan--
``(i) for contract year 1999 shall be not more than $6,000;
and
``(ii) for a subsequent contract year shall be not more
than the maximum amount of such deductible for the previous
contract year under this subparagraph increased by the
national per capita MedicarePlus growth percentage under
section 1853(c)(6) for the year.
If the amount of the deductible under clause (ii) is not a
multiple of $50, the amount shall be rounded to the nearest
multiple of $50.
``(c) Other References to Other Terms.--
``(1) MedicarePlus eligible individual.--The term
`MedicarePlus eligible individual' is defined in section
1851(a)(3).
``(2) MedicarePlus payment area.--The term `MedicarePlus
payment area' is defined in section 1853(d).
``(3) National per capita medicareplus growth percentage.--
The `national per capita MedicarePlus growth percentage' is
defined in section 1853(c)(6).
``(4) Monthly premium; net monthly premium.--The terms
`monthly premium' and `net monthly premium' are defined in
section 1854(a)(2).
``(d) Coordinated Acute and Long-term Care Benefits Under a
MedicarePlus Plan.--Nothing in this part shall be construed
as preventing a State from coordinating benefits under a
medicaid plan under title XIX with those provided under a
MedicarePlus plan in a manner that assures continuity of a
full-range of acute care and long-term care services to poor
elderly or disabled individuals eligible for benefits under
this title and under such plan.
``(e) Restriction on Enrollment for Certain MedicarePlus
Plans.--
``(1) In general.--In the case of a MedicarePlus religious
fraternal benefit society plan described in paragraph (2),
notwithstanding any other provision of this part to the
contrary and in accordance with regulations of the Secretary,
the society offering the plan may restrict the enrollment of
individuals under this part to individuals who are members of
the church, convention, or group described in paragraph
(3)(B) with which the society is affiliated.
``(2) Medicareplus religious fraternal benefit society plan
described.--For purposes of this subsection, a MedicarePlus
religious fraternal benefit society plan described in this
paragraph is a MedicarePlus plan described in section
1851(a)(2)(A) that--
``(A) is offered by a religious fraternal benefit society
described in paragraph (3) only to members of the church,
convention, or group described in paragraph (3)(B); and
``(B) permits all such members to enroll under the plan
without regard to health status-related factors.
Nothing in this subsection shall be construed as waiving any
plan requirements relating to financial solvency. In
developing solvency standards under section 1856, the
Secretary shall take into account open contract and
assessment features characteristic of fraternal insurance
certificates.
``(3) Religious fraternal benefit society defined.--For
purposes of paragraph (2)(A), a `religious fraternal benefit
society' described in this section is an organization that--
``(A) is exempt from Federal income taxation under section
501(c)(8) of the Internal Revenue Code of 1986;
``(B) is affiliated with, carries out the tenets of, and
shares a religious bond with, a church or convention or
association of churches or an affiliated group of churches;
``(C) offers, in addition to a MedicarePlus religious
fraternal benefit society plan, health coverage to
individuals not entitled to benefits under this title who are
members of such church, convention, or group; and
``(D) does not impose any limitation on membership in the
society based on any health status-related factor.
``(4) Payment adjustment.--Under regulations of the
Secretary, in the case of individuals enrolled under this
part under a MedicarePlus religious fraternal benefit society
plan described in paragraph (2), the Secretary shall provide
for such adjustment to the payment amounts otherwise
established under section 1854 as may be appropriate to
assure an appropriate payment level, taking into account the
actuarial characteristics and experience of such
individuals.''.
(b) Report on Coverage of Beneficiaries with End-Stage
Renal Disease.--The Secretary of Health and Human Services
shall provide for a study on the feasibility and impact of
removing the limitation under section 1851(b)(3)(B) of the
Social Security Act (as inserted by subsection (a)) on
eligibility of most individuals medically determined to have
end-stage renal disease to enroll in MedicarePlus plans. By
not later than October 1, 1998, the Secretary shall submit to
Congress a report on such study and shall include in the
report such recommendations regarding removing or restricting
the limitation as may be appropriate.
(c) Report on MedicarePlus Teaching Programs and Use of DSH
and Teaching Hospitals.--Based on the information provided to
the Secretary of Health and Human Services under section
1852(k) of the Social Security Act and such information as
the Secretary may obtain, by not later than October 1, 1999,
the Secretary shall submit to Congress a report on graduate
medical education programs operated by MedicarePlus
organizations and the extent to which MedicarePlus
organizations are providing for payments to hospitals
described in such section.
SEC. 4002. TRANSITIONAL RULES FOR CURRENT MEDICARE HMO
PROGRAM.
(a) Authorizing Transitional Waiver of 50:50 Rule.--Section
1876(f) (42 U.S.C. 1395mm(f)) is amended--
(1) in paragraph (2), by striking ``The Secretary'' and
inserting ``Subject to paragraph (4), the Secretary'', and
(2) by adding at the end the following new paragraph:
``(4) Effective for contract periods beginning after
December 31, 1996, the Secretary may waive or modify the
requirement imposed by paragraph (1) to the extent the
Secretary finds that it is in the public interest.''.
(b) Transition.--Section 1876 (42 U.S.C. 1395mm) is amended
by adding at the end the following new subsection:
``(k)(1) Except as provided in paragraph (3), the Secretary
shall not enter into, renew, or continue any risk-sharing
contract under this section with an eligible organization for
any contract year beginning on or after--
``(A) the date standards for MedicarePlus organizations and
plans are first established under section 1856 with respect
to MedicarePlus organizations that are insurers or health
maintenance organizations, or
``(B) in the case of such an organization with such a
contract in effect as of the date such standards were first
established, 1 year after such date.
``(2) The Secretary shall not enter into, renew, or
continue any risk-sharing contract under this section with an
eligible organization for any contract year beginning on or
after January 1, 2000.
``(3) An individual who is enrolled in part B only and is
enrolled in an eligible organization with a risk-sharing
contract under this section on December 31, 1998, may
continue enrollment in such organization in accordance with
regulations issued by not later then July 1, 1998.
``(4) Notwithstanding subsection (a), the Secretary shall
provide that payment amounts under risk-sharing contracts
under this section for months in a year (beginning with
January 1998) shall be computed--
``(A) with respect to individuals entitled to benefits
under both parts A and B, by substituting payment rates under
section 1853(a) for the payment rates otherwise established
under subsection 1876(a), and
``(B) with respect to individuals only entitled to benefits
under part B, by substituting an appropriate proportion of
such rates (reflecting the relative proportion of payments
under this title attributable to such part) for the payment
rates otherwise established under subsection (a).
For purposes of carrying out this paragraph for payments for
months in 1998, the Secretary shall compute, announce, and
apply the payment rates under section 1853(a)
(notwithstanding any deadlines specified in such section) in
as timely a manner as possible and may (to the extent
necessary) provide for retroactive adjustment in payments
made under this section not in accordance with such rates.''.
(c) Enrollment Transition Rule.--An individual who is
enrolled on December 31, 1998, with an eligible organization
under section 1876 of the Social Security Act (42 U.S.C.
1395mm) shall be considered to be enrolled with that
organization on January 1, 1999, under part C of title XVIII
of such Act if that organization has a contract under that
part for providing services on January 1, 1999 (unless the
individual has disenrolled effective on that date).
(d) Advance Directives.--Section 1866(f) (42 U.S.C.
1395c(f)) is amended--
(1) in paragraph (1)--
(A) by inserting ``1855(i),'' after ``1833(s),'', and
[[Page H4449]]
(B) by inserting ``, MedicarePlus organization,'' after
``provider of services''; and
(2) in paragraph (2)(E), by inserting ``or a MedicarePlus
organization'' after ``section 1833(a)(1)(A)''.
(e) Extension of Provider Requirement.--Section
1866(a)(1)(O) (42 U.S.C. 1395cc(a)(1)(O)) is amended--
(1) by striking ``in the case of hospitals and skilled
nursing facilities,'';
(2) by striking ``inpatient hospital and extended care'';
(3) by inserting ``with a MedicarePlus organization under
part C or'' after ``any individual enrolled'';
(4) by striking ``(in the case of hospitals) or limits (in
the case of skilled nursing facilities)''; and
(5) by inserting ``(less any payments under section 1858)''
after ``under this title''.
(f) Additional Conforming Changes.--
(1) Conforming references to previous part C.--Any
reference in law (in effect before the date of the enactment
of this Act) to part C of title XVIII of the Social Security
Act is deemed a reference to part D of such title (as in
effect after such date).
(2) Secretarial submission of legislative proposal.--Not
later than 90 days after the date of the enactment of this
Act, the Secretary of Health and Human Services shall submit
to the appropriate committees of Congress a legislative
proposal providing for such technical and conforming
amendments in the law as are required by the provisions of
this chapter.
(g) Immediate Effective Date for Certain Requirements for
Demonstrations.--Section 1857(e)(2) of the Social Security
Act (requiring contribution to certain costs related to the
enrollment process comparative materials) applies to
demonstrations with respect to which enrollment is effected
or coordinated under section 1851 of such Act.
(h) Use of Interim, Final Regulations.--In order to carry
out the amendments made by this chapter in a timely manner,
the Secretary of Health and Human Services may promulgate
regulations that take effect on an interim basis, after
notice and pending opportunity for public comment.
(i) Transition Rule for PSO Enrollment.--In applying
subsection (g)(1) of section 1876 of the Social Security Act
(42 U.S.C. 1395mm) to a risk-sharing contract entered into
with an eligible organization that is a provider-sponsored
organization (as defined in section 1855(e)(1) of such Act,
as inserted by section 4001) for a contract year beginning on
or after January 1, 1998, there shall be substituted for the
minimum number of enrollees provided under such section the
minimum number of enrollees permitted under section
1857(b)(1) of such Act (as so inserted).
SEC. 4003. CONFORMING CHANGES IN MEDIGAP PROGRAM.
(a) Conforming Amendments to MedicarePlus Changes.--
(1) In general.--Section 1882(d)(3)(A)(i) (42 U.S.C.
1395ss(d)(3)(A)(i)) is amended--
(A) in the matter before subclause (I), by inserting
``(including an individual electing a MedicarePlus plan under
section 1851)'' after ``of this title''; and
(B) in subclause (II)--
(i) by inserting ``in the case of an individual not
electing a MedicarePlus plan'' after ``(II)'', and
(ii) by inserting before the comma at the end the
following: ``or in the case of an individual electing a
MedicarePlus plan, a medicare supplemental policy with
knowledge that the policy duplicates health benefits to which
the individual is otherwise entitled under the MedicarePlus
plan or under another medicare supplemental policy''.
(2) Conforming amendments.--Section 1882(d)(3)(B)(i)(I) (42
U.S.C. 1395ss(d)(3)(B)(i)(I)) is amended by inserting
``(including any MedicarePlus plan)'' after ``health
insurance policies''.
(3) MedicarePlus plans not treated as medicare
supplementary policies.--Section 1882(g)(1) (42 U.S.C.
1395ss(g)(1)) is amended by inserting ``or a MedicarePlus
plan or'' after ``does not include''
(b) Additional Rules Relating to Individuals Enrolled in
MSA Plans.--Section 1882 (42 U.S.C. 1395ss) is further
amended by adding at the end the following new subsection:
``(u)(1) It is unlawful for a person to sell or issue a
policy described in paragraph (2) to an individual with
knowledge that the individual has in effect under section
1851 an election of an MSA plan.
``(2) A policy described in this subparagraph is a health
insurance policy that provides for coverage of expenses that
are otherwise required to be counted toward meeting the
annual deductible amount provided under the MSA plan.''.
Subchapter B--Special Rules for MedicarePlus Medical Savings Accounts
SEC. 4006. MEDICAREPLUS MSA.
(a) In General.--Part III of subchapter B of chapter 1 of
the Internal Revenue Code of 1986 (relating to amounts
specifically excluded from gross income) is amended by
redesignating section 138 as section 139 and by inserting
after section 137 the following new section:
``SEC. 138. MEDICAREPLUS MSA.
``(a) Exclusion.--Gross income shall not include any
payment to the MedicarePlus MSA of an individual by the
Secretary of Health and Human Services under part C of title
XVIII of the Social Security Act.
``(b) MedicarePlus MSA.--For purposes of this section, the
term `MedicarePlus MSA' means a medical savings account (as
defined in section 220(d))--
``(1) which is designated as a MedicarePlus MSA,
``(2) with respect to which no contribution may be made
other than--
``(A) a contribution made by the Secretary of Health and
Human Services pursuant to part C of title XVIII of the
Social Security Act, or
``(B) a trustee-to-trustee transfer described in subsection
(c)(4),
``(3) the governing instrument of which provides that
trustee-to-trustee transfers described in subsection (c)(4)
may be made to and from such account, and
``(4) which is established in connection with an MSA plan
described in section 1859(b)(2) of the Social Security Act.
``(c) Special Rules for Distributions.--
``(1) Distributions for qualified medical expenses.--In
applying section 220 to a MedicarePlus MSA--
``(A) qualified medical expenses shall not include amounts
paid for medical care for any individual other than the
account holder, and
``(B) section 220(d)(2)(C) shall not apply.
``(2) Penalty for distributions from medicareplus msa not
used for qualified medical expenses if minimum balance not
maintained.--
``(A) In general.--The tax imposed by this chapter for any
taxable year in which there is a payment or distribution from
a MedicarePlus MSA which is not used exclusively to pay the
qualified medical expenses of the account holder shall be
increased by 50 percent of the excess (if any) of--
``(i) the amount of such payment or distribution, over
``(ii) the excess (if any) of--
``(I) the fair market value of the assets in such MSA as of
the close of the calendar year preceding the calendar year in
which the taxable year begins, over
``(II) an amount equal to 60 percent of the deductible
under the MedicarePlus MSA plan covering the account holder
as of January 1 of the calendar year in which the taxable
year begins.
Section 220(f)(2) shall not apply to any payment or
distribution from a MedicarePlus MSA.
``(B) Exceptions.--Subparagraph (A) shall not apply if the
payment or distribution is made on or after the date the
account holder--
``(i) becomes disabled within the meaning of section
72(m)(7), or
``(ii) dies.
``(C) Special rules.--For purposes of subparagraph (A)--
``(i) all MedicarePlus MSAs of the account holder shall be
treated as 1 account,
``(ii) all payments and distributions not used exclusively
to pay the qualified medical expenses of the account holder
during any taxable year shall be treated as 1 distribution,
and
``(iii) any distribution of property shall be taken into
account at its fair market value on the date of the
distribution.
``(3) Withdrawal of erroneous contributions.--Section
220(f)(2) and paragraph (2) of this subsection shall not
apply to any payment or distribution from a MedicarePlus MSA
to the Secretary of Health and Human Services of an erroneous
contribution to such MSA and of the net income attributable
to such contribution.
``(4) Trustee-to-trustee transfers.--Section 220(f)(2) and
paragraph (2) of this subsection shall not apply to any
trustee-to-trustee transfer from a MedicarePlus MSA of an
account holder to another MedicarePlus MSA of such account
holder.
``(d) Special Rules for Treatment of Account After Death of
Account Holder.--In applying section 220(f)(8)(A) to an
account which was a MedicarePlus MSA of a decedent, the rules
of section 220(f) shall apply in lieu of the rules of
subsection (c) of this section with respect to the spouse as
the account holder of such MedicarePlus MSA.
``(e) Reports.--In the case of a MedicarePlus MSA, the
report under section 220(h)--
``(1) shall include the fair market value of the assets in
such MedicarePlus MSA as of the close of each calendar year,
and
``(2) shall be furnished to the account holder--
``(A) not later than January 31 of the calendar year
following the calendar year to which such reports relate, and
``(B) in such manner as the Secretary prescribes in such
regulations.
``(f) Coordination With Limitation on Number of Taxpayers
Having Medical Savings Accounts.--Subsection (i) of section
220 shall not apply to an individual with respect to a
MedicarePlus MSA, and MedicarePlus MSA's shall not be taken
into account in determining whether the numerical limitations
under section 220(j) are exceeded.''
(b) Technical Amendments.--
(1) The last sentence of section 4973(d) of such Code is
amended by inserting ``or section 138(c)(3)'' after ``section
220(f)(3)''.
(2) Subsection (b) of section 220 of such Code is amended
by adding at the end the following new paragraph:
``(7) Medicare eligible individuals.--The limitation under
this subsection for any month with respect to an individual
shall be zero for the first month such individual is entitled
to benefits under title XVIII of the Social Security Act and
for each month thereafter.''
(3) The table of sections for part III of subchapter B of
chapter 1 of such Code is amended by striking the last item
and inserting the following:
[[Page H4450]]
``Sec. 138. MedicarePlus MSA.
``Sec. 139. Cross references to other Acts.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
1998.
Subchapter C--GME, IME, and DSH Payments for Managed Care Enrollees
SEC. 4008. GRADUATE MEDICAL EDUCATION AND INDIRECT MEDICAL
EDUCATION PAYMENTS FOR MANAGED CARE ENROLLEES.
(a) Payments to Managed Care Organizations Operating
Graduate Medical Education Programs.--Section 1853 (as
inserted by section 4001) is amended by adding at the end the
following:
``(h) Payments for Direct Costs of Graduate Medical
Education Programs.--
``(1) Additional payment to be made.--Effective January 1,
1998, each contract with a MedicarePlus organization under
this section (and each risk-sharing contract with an eligible
organization under section 1876) shall provide for an
additional payment for Medicare's share of allowable direct
graduate medical education costs incurred by such an
organization for an approved medical residency program.
``(2) Allowable costs.--If the organization has an approved
medical residency program that incurs all or substantially
all of the costs of the program, subject to section
1858(a)(3), the allowable costs for such a program shall
equal the national average per resident amount times the
number of full-time-equivalent residents in the program in
non-hospital settings.
``(3) Definitions.--As used in this subsection:
``(A) The terms `approved medical residency program',
`direct graduate medical education costs', and `full-time-
equivalent residents' have the same meanings as under section
1886(h).
``(B) The term `Medicare's share' means, with respect to a
MedicarePlus or eligible organization, the ratio of the
number of individuals enrolled with the organization under
this part (or enrolled under a risk-sharing contract under
section 1876, respectively) to the total number of
individuals enrolled with the organization.
``(C) The term `national average per resident amount' means
an amount estimated by the Secretary to equal the weighted
average amount that would be paid per full-time-equivalent
resident under section 1886(h) for the calendar year
(determined separately for primary care residency programs as
defined under section 1886(h) (including obstetrics and
gynecology residency programs) and for other residency
programs).''.
(b) Payments to Hospitals for Direct and Indirect Costs of
Graduate Medical Education Programs Attributable to Managed
Care Enrollees.--Part C of title XVIII, as amended by section
4001, is amended by inserting after section 1857 the
following new section:
``payments to hospitals for certain costs attributable to managed care
enrollees
``Sec. 1858. (a) Costs of Graduate Medical Education.--
``(1) In general.--For portions of cost reporting periods
occurring on or after January 1, 1998, the Secretary shall
provide for an additional payment amount for each subsection
(d) hospital (as defined in section 1886(d)(1)(B)), each PPS-
exempt hospital described in clause (i) through (v) of such
section, and for each hospital reimbursed under a
reimbursement system authorized section 1814(b)(3) that--
``(A) furnishes services to individuals who are enrolled
under a risk-sharing contract with an eligible organization
under section 1876 and who are entitled to part A and to
individuals who are enrolled with a MedicarePlus organization
under part C, and
``(B) has an approved medical residency training program.
``(2) Payment amount.--
``(A) In general.--Subject to paragraph (3)(B), the amount
of the payment under this subsection shall be the sum of--
``(i) the amount determined under subparagraph (B), and
``(ii) the amount determined under subparagraph (C).
Clause (ii) shall not apply in the case of a hospital that is
not a PPS-exempt hospital described in clause (i) through (v)
of section 1886(d)(1)(B),
``(B) Direct amount.--The amount determined under this
subparagraph for a period is equal to the product of--
``(i) the aggregate approved amount (as defined in section
1886(h)(3)(B)) for that period; and
``(ii) the fraction of the total number of inpatient-bed-
days (as established by the Secretary) during the period
which are attributable to individuals described in paragraph
(1).
``(C) Indirect amount.--The amount determined under this
subparagraph is equal to the product of--
``(i) the amount of the indirect teaching adjustment factor
applicable to the hospital under section 1886(d)(5)(B); and
``(ii) the product of--
``(I) the number of discharges attributable to individuals
described in paragraph (1), and
``(II) the estimated average per discharge amount that
would otherwise have been paid under section 1886(d)(1)(A) if
the individuals had not been enrolled as described in such
paragraph.
``(D) Special rule.--The Secretary shall establish rules
for the application of subparagraph (B) and for the
computation of the amounts described in subparagraph (C)(i))
and subparagraph (C)(ii)(I) to a hospital reimbursed under a
reimbursement system authorized under section 1814(b)(3) in a
manner similar to the manner of applying such subparagraph
and computing such amounts as if the hospital were not
reimbursed under such section.
``(3) Limitation.--
``(A) Determinations.--At the beginning of each year, the
Secretary shall--
``(i) estimate the sum of the amount of the payments under
this subsection and the payments under section 1853(h), for
services or discharges occurring in the year, and
``(ii) determine the amount of the annual payment limit
under subparagraph (C) for such year.
``(B) Imposition of limit.--If the amount estimated under
subparagraph (A)(i) for a year exceeds the amount determined
under subparagraph (A)(ii) for the year, then the Secretary
shall adjust the amounts of the payments described in
subparagraph (A)(i) for the year in a pro rata manner so that
the total of such payments in the year do not exceed the
annual payment limit determined under subparagraph (A)(ii)
for that year.
``(C) Annual payment limit.--
``(i) In general.--The annual payment limit under this
subparagraph for a year is the sum, over all counties or
MedicarePlus payment areas, of the product of--
``(I) the annual GME per capita payment rate (described in
clause (ii)) for the county or area, and
``(II) the Secretary's projection of average enrollment of
individuals described in paragraph (1) who are residents of
that county or area, adjusted to reflect the relative
demographic or risk characteristics of such enrollees.
``(ii) GME per capita payment rate.--The GME per capita
payment rate described in this clause for a particular county
or MedicarePlus payment area for a year is the GME proportion
(as specified in clause (iii)) of the annual MedicarePlus
capitation rate (as calculated under section 1853(c)) for the
county or area and year involved.
``(iii) GME proportion.--For purposes of clause (ii), the
GME proportion for a county or area and a year is equal to
the phase-in percentage (specified in clause (vi)) of the
ratio of (I) the projected GME payment amount for the county
or area (as determined under clause (v)), to (II) the average
per capita cost for the county or area for the year
(determined under clause (vi)).
``(iv) Phase-in percentage.--The phase-in percentage
specified in this clause for--
``(I) 1998 is 20 percent,
``(II) 1999 is 40 percent,
``(III) 2000 is 60 percent,
``(IV) 2001 is 80 percent, or
``(V) any subsequent year is 100 percent.
``(v) Projected GME payment amount.--he projected GME
payment amount for a county or area--
``(I) for 1998, is the amount included in the per capita
rate of payment for 1997 determined under section
1876(a)(1)(C) for the payment adjustments described in
section 1886(d)(5)(B) and section 1886(h) for that county or
area, adjusted by the general GME update factor (as defined
in clause (vii)) for 1998, or
``(II) for a subsequent year, is the projected GME payment
amount for the county or area for the previous year, adjusted
by the general GME update factor for such subsequent year.
The Secretary shall determine the amount described in
subclause (I) for a county or other area that includes
hospitals reimbursed under section 1814(b)(3) as though such
hospitals had not been reimbursed under such section.
``(vi) Average per capita cost.--The average per capita
cost for the county or area determined under this clause
for--
``(I) 1998 is the annual per capita rate of payment for
1997 determined under section 1876(a)(1)(C) for the county or
area, increased by the national per capita MedicarePlus
growth percentage for 1998 (as defined in section 1853(c)(6),
but determined without regard to the adjustment described in
subparagraph (B) of such section); or
``(II) a subsequent year is the average per capita cost
determined under this clause for the previous year increased
by the national per capita MedicarePlus growth percentage for
the year involved (as defined in section 1853(c)(6), but
determined without regard to the adjustment described in
subparagraph (B) of such section).
``(vii) General gme update factor.--For purposes of clause
(v), the `general GME update factor' for a year is equal to
the Secretary's estimate of the national average percentage
change in average per capita payments under sections
1886(d)(5)(B) and 1886(h) from the previous year to the year
involved. Such amount takes into account changes in law and
regulation affecting payment amounts under such sections.''.
SEC. 4009. DISPROPORTIONATE SHARE HOSPITAL PAYMENTS FOR
MANAGED CARE ENROLLEES.
Section 1858, as inserted by section 4008(b), is further
amended by adding at the end the following new subsection:
``(b) Disproportionate Share Hospital Payments.--
``(1) In general.--For portions of cost reporting periods
occurring on or after January 1, 1998, the Secretary shall
provide for an additional payment amount for each subsection
(d) hospital (as defined in section
[[Page H4451]]
1886(d)(1)(B)) and for each hospital reimbursed a
demonstration project reimbursement system under section
1814(b)(3) that--
``(A) furnishes services to individuals who are enrolled
under a risk-sharing contract with an eligible organization
under section 1876 and who are entitled to part A and to
individuals who are enrolled with a MedicarePlus organization
under this part, and
``(B) is (or, if it were not reimbursed under section
1814(b)(3), would qualify as) a disproportionate share
hospital described in section 1886(d)(5)(F)(i).
``(2) Amount of payment.--Subject to paragraph (3)(B), the
amount of the payment under this subsection shall be the
product of--
``(A) the amount of the disproportionate share adjustment
percentage applicable to the hospital under section
1886(d)(5)(F); and
``(B) the product described in subsection (a)(2)(C)(ii).
The Secretary shall establish rules for the computation of
the amount described in subparagraph (A) for a hospital
reimbursed under section 1814(b)(3).
``(3) Limit.--
``(A) Determination.--At the beginning of each year, the
Secretary shall--
``(i) estimate the sum of the payments under this
subsection for services or discharges occurring in the year,
and
``(ii) determine the amount of the annual payment limit
under subparagraph (C)) for such year.
``(B) Imposition of limit.--If the amount estimated under
subparagraph (A)(i) for a year exceeds the amount determined
under subparagraph (A)(ii) for the year, then the Secretary
shall adjust the amounts of the payments under this
subsection for the year in a pro rata manner so that the
total of such payments in the year do not exceed the annual
payment limit determined under subparagraph (A)(ii) for that
year.
``(C) Annual payment limit.--The annual payment limit under
this subparagraph for a year shall be determined in the same
manner as the annual payment limit is determined under clause
(i) of subsection (a)(3)(C), except that, for purposes of
this clause, any reference in clauses (i) through (vii) of
such subsection--
``(i) to a payment adjustment under subsection (a) is
deemed a reference to a payment adjustment under this
subsection, or
``(ii) to payments or payment adjustments under section
1886(d)(5)(B) and 1886(h) is deemed a reference to payments
and payment adjustments under section 1886(d)(5)(F).''.
CHAPTER 2--INTEGRATED LONG-TERM CARE PROGRAMS
Subchapter A--Programs of All-inclusive Care for the Elderly (PACE)
SEC. 4011. REFERENCE TO COVERAGE OF PACE UNDER THE MEDICARE
PROGRAM.
For provision amending title XVIII of the Social Security
Act to provide for payments to, and coverage of benefits
under, Programs of All-inclusive Care for the Elderly (PACE),
see section 3431.
SEC. 4012. REFERENCE TO ESTABLISHMENT OF PACE PROGRAM AS
MEDICAID STATE OPTION.
For provision amending title XIX of the Social Security Act
to establish the PACE program as a medicaid State option, see
section 3432.
Subchapter B--Social Health Maintenance Organizations
SEC. 4015. SOCIAL HEALTH MAINTENANCE ORGANIZATIONS (SHMOS).
(a) Extension of Demonstration Project Authorities.--
Section 4018(b) of the Omnibus Budget Reconciliation Act of
1987 is amended--
(1) in paragraph (1), by striking ``1997'' and inserting
``2000'', and
(2) in paragraph (4), by striking ``1998'' and inserting
``2001''.
(b) Expansion of Cap.--Section 13567(c) of the Omnibus
Budget Reconciliation Act of 1993 is amended by striking
``12,000'' and inserting ``36,000''.
(b) Report on Integration and Transition.--
(1) In general.--The Secretary of Health and Human Services
shall submit to Congress, by not later than January 1, 1999,
a plan for the integration of health plans offered by social
health maintenance organizations (including SHMO I and SHMO
II sites developed under section 2355 of the Deficit
Reduction Act of 1984 and under the amendment made by section
4207(b)(3)(B)(i) of OBRA-1990, respectively) and similar
plans as an option under the MedicarePlus program under part
C of title XVIII of the Social Security Act.
(2) Provision for transition.--Such plan shall include a
transition for social health maintenance organizations
operating under demonstration project authority under such
section.
(3) Payment policy.--The report shall also include
recommendations on appropriate payment levels for plans
offered by such organizations, including an analysis of the
application of risk adjustment factors appropriate to the
population served by such organizations.
Subchapter C--Other Programs
SEC. 4018. ORDERLY TRANSITION OF MUNICIPAL HEALTH SERVICE
DEMONSTRATION PROJECTS.
Section 9215 of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended by section 6135 of
OBRA-1989 and section 13557 of OBRA-1993, is further
amended--
(1) by inserting ``(a)'' before ``The Secretary'', and
(2) by adding at the end the following: ``Subject to
subsection (c), the Secretary may further extend such
demonstration projects through December 31, 2000, but only
with respect to individuals are enrolled with such projects
before January 1, 1998.
``(b) The Secretary shall work with each such demonstration
project to develop a plan, to be submitted to the Committee
on Ways and Means of the House of Representatives and the
Committee on Finance of the Senate by March 31, 1998, for the
orderly transition of demonstration projects and the project
enrollees to a non-demonstration project health care delivery
system, such as through integration with private or public
health plan, including a medicaid managed care or
MedicarePlus plan.
``(c) A demonstration project under subsection (a) which
does not develop and submit a transition plan under
subsection (b) by March 31, 1998, or, if later, 6 months
after the date of the enactment of this Act, shall be
discontinued as of December 31, 1998. The Secretary shall
provide appropriate technical assistance to assist in the
transition so that disruption of medical services to project
enrollees may be minimized.''.
SEC. 4019. EXTENSION OF CERTAIN MEDICARE COMMUNITY NURSING
ORGANIZATION DEMONSTRATION PROJECTS.
Notwithstanding any other provision of law, demonstration
projects conducted under section 4079 of the Omnibus Budget
Reconciliation Act of 1987 may be conducted for an additional
period of 2 years, and the deadline for any report required
relating to the results of such projects shall be not later
than 6 months before the end of such additional period.
CHAPTER 3--MEDICARE PAYMENT ADVISORY COMMISSION
SEC. 4021. MEDICARE PAYMENT ADVISORY COMMISSION.
(a) In General.--Title XVIII is amended by inserting after
section 1804 the following new section:
``medicare payment advisory commission
``Sec. 1805. (a) Establishment.--There is hereby
established the Medicare Payment Advisory Commission (in this
section referred to as the `Commission').
``(b) Duties.--
``(1) Review of payment policies and annual reports.--The
Commission shall--
``(A) review payment policies under this title, including
the topics described in paragraph (2);
``(B) make recommendations to Congress concerning such
payment policies; and
``(C) by not later than March 1 of each year (beginning
with 1998), submit a report to Congress containing the
results of such reviews and its recommendations concerning
such policies and an examination of issues affecting the
medicare program.
``(2) Specific topics to be reviewed.--
``(A) Medicareplus program.--Specifically, the Commission
shall review, with respect to the MedicarePlus program under
part C, the following:
``(i) The methodology for making payment to plans under
such program, including the making of differential payments
and the distribution of differential updates among different
payment areas.
``(ii) The mechanisms used to adjust payments for risk and
the need to adjust such mechanisms to take into account
health status of beneficiaries.
``(iii) The implications of risk selection both among
MedicarePlus organizations and between the MedicarePlus
option and the medicare fee-for-service option.
``(iv) The development and implementation of mechanisms to
assure the quality of care for those enrolled with
MedicarePlus organizations.
``(v) The impact of the MedicarePlus program on access to
care for medicare beneficiaries.
``(vi) The appropriate role for the medicare program in
addressing the needs of individuals with chronic illnesses.
``(vii) Other major issues in implementation and further
development of the MedicarePlus program.
``(B) Fee-for-service system.--Specifically, the Commission
shall review payment policies under parts A and B,
including--
``(i) the factors affecting expenditures for services in
different sectors, including the process for updating
hospital, skilled nursing facility, physician, and other
fees,
``(ii) payment methodologies, and
``(iii) their relationship to access and quality of care
for medicare beneficiaries.
``(C) Interaction of medicare payment policies with health
care delivery generally.--Specifically, the Commission shall
review the effect of payment policies under this title on the
delivery of health care services other than under this title
and assess the implications of changes in health care
delivery in the United States and in the general market for
health care services on the medicare program.
``(3) Comments on certain secretarial reports.--If the
Secretary submits to Congress (or a committee of Congress) a
report that is required by law and that relates to payment
policies under this title, the Secretary shall transmit a
copy of the report to the Commission. The Commission shall
review the report and, not later than 6 months after the date
of submittal of the Secretary's report to Congress, shall
submit to the appropriate
[[Page H4452]]
committees of Congress written comments on such report. Such
comments may include such recommendations as the Commission
deems appropriate.
``(4) Agenda and additional reviews.--The Commission shall
consult periodically with the chairmen and ranking minority
members of the appropriate committees of Congress regarding
the Commission's agenda and progress towards achieving the
agenda. The Commission may conduct additional reviews, and
submit additional reports to the appropriate committees of
Congress, from time to time on such topics relating to the
program under this title as may be requested by such chairmen
and members and as the Commission deems appropriate.
``(5) Availability of reports.--The Commission shall
transmit to the Secretary a copy of each report submitted
under this subsection and shall make such reports available
to the public.
``(6) Appropriate committees.--For purposes of this
section, the term `appropriate committees of Congress' means
the Committees on Ways and Means and Commerce of the House of
Representatives and the Committee on Finance of the Senate.
``(c) Membership.--
``(1) Number and appointment.--The Commission shall be
composed of 11 members appointed by the Comptroller General.
``(2) Qualifications.--
``(A) In general.--The membership of the Commission shall
include individuals with national recognition for their
expertise in health finance and economics, actuarial science,
health facility management, health plans and integrated
delivery systems, reimbursement of health facilities,
allopathic and osteopathic physicians, and other providers of
health services, and other related fields, who provide a mix
of different professionals, broad geographic representation,
and a balance between urban and rural representatives.
``(B) Inclusion.--The membership of the Commission shall
include (but not be limited to) physicians and other health
professionals, employers, third party payers, individuals
skilled in the conduct and interpretation of biomedical,
health services, and health economics research and expertise
in outcomes and effectiveness research and technology
assessment. Such membership shall also include
representatives of consumers and the elderly.
``(C) Majority nonproviders.--Individuals who are directly
involved in the provision, or management of the delivery, of
items and services covered under this title shall not
constitute a majority of the membership of the Commission.
``(D) Ethical disclosure.--The Comptroller General shall
establish a system for public disclosure by members of the
Commission of financial and other potential conflicts of
interest relating to such members.
``(3) Terms.--
``(A) In general.--The terms of members of the Commission
shall be for 3 years except that the Comptroller General
shall designate staggered terms for the members first
appointed.
``(B) Vacancies.--Any member appointed to fill a vacancy
occurring before the expiration of the term for which the
member's predecessor was appointed shall be appointed only
for the remainder of that term. A member may serve after the
expiration of that member's term until a successor has taken
office. A vacancy in the Commission shall be filled in the
manner in which the original appointment was made.
``(4) Compensation.--While serving on the business of the
Commission (including traveltime), a member of the Commission
shall be entitled to compensation at the per diem equivalent
of the rate provided for level IV of the Executive Schedule
under section 5315 of title 5, United States Code; and while
so serving away from home and member's regular place of
business, a member may be allowed travel expenses, as
authorized by the Chairman of the Commission. Physicians
serving as personnel of the Commission may be provided a
physician comparability allowance by the Commission in the
same manner as Government physicians may be provided such an
allowance by an agency under section 5948 of title 5, United
States Code, and for such purpose subsection (i) of such
section shall apply to the Commission in the same manner as
it applies to the Tennessee Valley Authority. For purposes of
pay (other than pay of members of the Commission) and
employment benefits, rights, and privileges, all personnel of
the Commission shall be treated as if they were employees of
the United States Senate.
``(5) Chairman; vice chairman.--The Comptroller General
shall designate a member of the Commission, at the time of
appointment of the member, as Chairman and a member as Vice
Chairman for that term of appointment.
``(6) Meetings.--The Commission shall meet at the call of
the Chairman.
``(d) Director and Staff; Experts and Consultants.--Subject
to such review as the Comptroller General deems necessary to
assure the efficient administration of the Commission, the
Commission may--
``(1) employ and fix the compensation of an Executive
Director (subject to the approval of the Comptroller General)
and such other personnel as may be necessary to carry out its
duties (without regard to the provisions of title 5, United
States Code, governing appointments in the competitive
service);
``(2) seek such assistance and support as may be required
in the performance of its duties from appropriate Federal
departments and agencies;
``(3) enter into contracts or make other arrangements, as
may be necessary for the conduct of the work of the
Commission (without regard to section 3709 of the Revised
Statutes (41 U.S.C. 5));
``(4) make advance, progress, and other payments which
relate to the work of the Commission;
``(5) provide transportation and subsistence for persons
serving without compensation; and
``(6) prescribe such rules and regulations as it deems
necessary with respect to the internal organization and
operation of the Commission.
``(e) Powers.--
``(1) Obtaining official data.--The Commission may secure
directly from any department or agency of the United States
information necessary to enable it to carry out this section.
Upon request of the Chairman, the head of that department or
agency shall furnish that information to the Commission on an
agreed upon schedule.
``(2) Data collection.--In order to carry out its
functions, the Commission shall--
``(A) utilize existing information, both published and
unpublished, where possible, collected and assessed either by
its own staff or under other arrangements made in accordance
with this section,
``(B) carry out, or award grants or contracts for, original
research and experimentation, where existing information is
inadequate, and
``(C) adopt procedures allowing any interested party to
submit information for the Commission's use in making reports
and recommendations.
``(3) Access of gao to information.--The Comptroller
General shall have unrestricted access to all deliberations,
records, and nonproprietary data of the Commission,
immediately upon request.
``(4) Periodic audit.--The Commission shall be subject to
periodic audit by the Comptroller General.
``(f) Authorization of Appropriations.--
``(1) Request for appropriations.--The Commission shall
submit requests for appropriations in the same manner as the
Comptroller General submits requests for appropriations, but
amounts appropriated for the Commission shall be separate
from amounts appropriated for the Comptroller General.
``(2) Authorization.--There are authorized to be
appropriated such sums as may be necessary to carry out the
provisions of this section. 60 percent of such appropriation
shall be payable from the Federal Hospital Insurance Trust
Fund, and 40 percent of such appropriation shall be payable
from the Federal Supplementary Medical Insurance Trust
Fund.''.
(b) Abolition of ProPAC and PPRC.--
(1) Propac.--
(A) In general.--Section 1886(e) (42 U.S.C. 1395ww(e)) is
amended--
(i) by striking paragraphs (2) and (6); and
(ii) in paragraph (3), by striking ``(A) The Commission''
and all that follows through ``(B)''.
(B) Conforming amendment.--Section 1862 (42 U.S.C. 1395y)
is amended by striking ``Prospective Payment Assessment
Commission'' each place it appears in subsection (a)(1)(D)
and subsection (i) and inserting ``Medicare Payment Advisory
Commission''.
(2) PPRC.--
(A) In general.--Title XVIII is amended by striking section
1845 (42 U.S.C. 1395w-1).
(B) Elimination of certain reports.--Section 1848 (42
U.S.C. 1395w-4) is amended by striking subparagraph (B) of
subsection (f)(1).
(C) Conforming amendments.--Section 1848 (42 U.S.C. 1395w-
4) is amended by striking ``Physician Payment Review
Commission'' and inserting ``Medicare Payment Advisory
Commission'' each place it appears in subsections
(c)(2)(B)(iii), (g)(6)(C), and (g)(7)(C).
(c) Effective Date; Transition.--
(1) In general.--The Comptroller General shall first
provide for appointment of members to the Medicare Payment
Advisory Commission (in this subsection referred to as
``MedPAC'') by not later than September 30, 1997.
(2) Transition.--As quickly as possible after the date a
majority of members of MedPAC are first appointed, the
Comptroller General, in consultation with the Prospective
Payment Assessment Commission (in this subsection referred to
as ``ProPAC'') and the Physician Payment Review Commission
(in this subsection referred to as ``PPRC''), shall provide
for the termination of the ProPAC and the PPRC. As of the
date of termination of the respective Commissions, the
amendments made by paragraphs (1) and (2), respectively, of
subsection (b) become effective. The Comptroller General, to
the extent feasible, shall provide for the transfer to the
MedPAC of assets and staff of the ProPAC and the PPRC,
without any loss of benefits or seniority by virtue of such
transfers. Fund balances available to the ProPAC or the PPRC
for any period shall be available to the MedPAC for such
period for like purposes.
(3) Continuing responsibility for reports.--The MedPAC
shall be responsible for the preparation and submission of
reports required by law to be submitted (and which have not
been submitted by the date of establishment of the MedPAC) by
the ProPAC and the PPRC, and, for this purpose, any reference
in law to either such Commission is deemed, after the
appointment of the MedPAC, to refer to the MedPAC.
[[Page H4453]]
CHAPTER 4--MEDIGAP PROTECTIONS
SEC. 4031. MEDIGAP PROTECTIONS.
(a) Guaranteeing Issue Without Preexisting Conditions for
Continuously Covered Individuals.--Section 1882(s) (42 U.S.C.
1395ss(s)) is amended--
(1) in paragraph (3), by striking ``paragraphs (1) and
(2)'' and inserting ``this subsection'',
(2) by redesignating paragraph (3) as paragraph (4), and
(3) by inserting after paragraph (2) the following new
paragraph:
``(3)(A) The issuer of a medicare supplemental policy--
``(i) may not deny or condition the issuance or
effectiveness of a medicare supplemental policy described in
subparagraph (C) that is offered and is available for
issuance to new enrollees by such issuer;
``(ii) may not discriminate in the pricing of such policy,
because of health status, claims experience, receipt of
health care, or medical condition; and
``(iii) may not impose an exclusion of benefits based on a
pre-existing condition under such policy,
in the case of an individual described in subparagraph (B)
who seeks to enroll under the policy not later than 63 days
after the date of the termination of enrollment described in
such subparagraph and who submits evidence of the date of
termination or disenrollment along with the application for
such medicare supplemental policy.
``(B) An individual described in this subparagraph is an
individual described in any of the following clauses:
``(i) The individual is enrolled under an employee welfare
benefit plan that provides health benefits that supplement
the benefits under this title and the plan terminates or
ceases to provide all such supplemental health benefits to
the individual.
``(ii) The individual is enrolled with a MedicarePlus
organization under a MedicarePlus plan under part C, and
there are circumstances permitting discontinuance of the
individual's election of the plan under section 1851(e)(4).
``(iii) The individual is enrolled with an eligible
organization under a contract under section 1876, a similar
organization operating under demonstration project authority,
with an organization under an agreement under section
1833(a)(1)(A), or with an organization under a policy
described in subsection (t), and such enrollment ceases under
the same circumstances that would permit discontinuance of an
individual's election of coverage under section 1851(e)(4)
and, in the case of a policy described in subsection (t),
there is no provision under applicable State law for the
continuation of coverage under such policy.
``(iv) The individual is enrolled under a medicare
supplemental policy under this section and such enrollment
ceases because--
``(I) of the bankruptcy or insolvency of the issuer or
because of other involuntary termination of coverage or
enrollment under such policy and there is no provision under
applicable State law for the continuation of such coverage;
``(II) the issuer of the policy substantially violated a
material provision of the policy; or
``(III) the issuer (or an agent or other entity acting on
the issuer's behalf) materially misrepresented the policy's
provisions in marketing the policy to the individual.
``(v) The individual--
``(I) was enrolled under a medicare supplemental policy
under this section,
``(II) subsequently terminates such enrollment and enrolls,
for the first time, with any MedicarePlus organization under
a MedicarePlus plan under part C, any eligible organization
under a contract under section 1876, any similar organization
operating under demonstration project authority, any
organization under an agreement under section 1833(a)(1)(A),
or any policy described in subsection (t), and
``(III) the subsequent enrollment under subclause (II) is
terminated by the enrollee during the first 6 months (or 3
months for terminations occurring on or after January 1,
2003) of such enrollment.
``(vi) The individual--
``(I) was enrolled under a medicare supplemental policy
under this section,
``(II) subsequently terminates such enrollment and enrolls,
for the first time, during or after the annual, coordinated
election period under section 1851(e)(3)(B) occurring during
2002, with an organization or policy described in clause
(v)(II), and
``(III) the subsequent enrollment under subclause (II) is
terminated by the enrollee during the next annual,
coordinated election period under such section.
``(C)(i) Subject to clauses (ii) and (iii), a medicare
supplemental policy described in this subparagraph has a
benefit package classified as `A', `B', `C', or `F' under the
standards established under subsection (p)(2).
``(ii) Only for purposes of an individual described in
subparagraph (B)(v), a medicare supplemental policy described
in this subparagraph also includes (if available from the
same issuer) the same medicare supplemental policy referred
to in such subparagraph in which the individual was most
recently previously enrolled.
``(iii) For purposes of applying this paragraph in the case
of a State that provides for offering of benefit packages
other than under the classification referred to in clause
(i), the references to benefit packages in such clause are
deemed references to comparable benefit packages offered in
such State.
``(D) At the time of an event described in subparagraph (B)
because of which an individual ceases enrollment or loses
coverage or benefits under a contract or agreement, policy,
or plan, the organization that offers the contract or
agreement, the insurer offering the policy, or the
administrator of the plan, respectively, shall notify the
individual of the rights of the individual, and obligations
of issuers of medicare supplemental policies, under
subparagraph (A).''.
(b) Limitation on Imposition of Preexisting Condition
Exclusion During Initial Open Enrollment Period.--Section
1882(s)(2) (42 U.S.C. 1395ss(s)(2)) is amended--
(1) in subparagraph (B), by striking ``subparagraph (C)''
and inserting ``subparagraphs (C) and (D)'', and
(2) by adding at the end the following new subparagraph:
``(D) In the case of a policy issued during the 6-month
period described in subparagraph (A) to an individual who is
65 years of age or older as of the date of issuance and who
as of the date of the application for enrollment has a
continuous period of creditable coverage (as defined in
2701(c) of the Public Health Service Act) of--
``(i) at least 6 months, the policy may not exclude
benefits based on a pre-existing condition; or
``(ii) of less than 6 months, if the policy excludes
benefits based on a preexisting condition, the policy shall
reduce the period of any preexisting condition exclusion by
the aggregate of the periods of creditable coverage (if any,
as so defined) applicable to the individual as of the
enrollment date.
The Secretary shall specify the manner of the reduction under
clause (ii), based upon the rules used by the Secretary in
carrying out section 2701(a)(3) of such Act.''.
(c) Effective Dates.--
(1) Guaranteed issue.--The amendment made by subsection (a)
shall take effect on July 1, 1998.
(2) Limit on preexisting condition exclusions.--The
amendment made by subsection (b) shall apply to policies
issued on or after July 1, 1998.
(d) Transition Provisions.--
(1) In general.--If the Secretary of Health and Human
Services identifies a State as requiring a change to its
statutes or regulations to conform its regulatory program to
the changes made by this section, the State regulatory
program shall not be considered to be out of compliance with
the requirements of section 1882 of the Social Security Act
due solely to failure to make such change until the date
specified in paragraph (4).
(2) NAIC standards.--If, within 9 months after the date of
the enactment of this Act, the National Association of
Insurance Commissioners (in this subsection referred to as
the ``NAIC'') modifies its NAIC Model Regulation relating to
section 1882 of the Social Security Act (referred to in such
section as the 1991 NAIC Model Regulation, as modified
pursuant to section 171(m)(2) of the Social Security Act
Amendments of 1994 (Public Law 103-432) and as modified
pursuant to section 1882(d)(3)(A)(vi)(IV) of the Social
Security Act, as added by section 271(a) of the Health
Insurance Portability and Accountability Act of 1996 (Public
Law 104-191) to conform to the amendments made by this
section, such revised regulation incorporating the
modifications shall be considered to be the applicable NAIC
model regulation (including the revised NAIC model regulation
and the 1991 NAIC Model Regulation) for the purposes of such
section.
(3) Secretary standards.--If the NAIC does not make the
modifications described in paragraph (2) within the period
specified in such paragraph, the Secretary of Health and
Human Services shall make the modifications described in such
paragraph and such revised regulation incorporating the
modifications shall be considered to be the appropriate
Regulation for the purposes of such section.
(4) Date specified.--
(A) In general.--Subject to subparagraph (B), the date
specified in this paragraph for a State is the earlier of--
(i) the date the State changes its statutes or regulations
to conform its regulatory program to the changes made by this
section, or
(ii) 1 year after the date the NAIC or the Secretary first
makes the modifications under paragraph (2) or (3),
respectively.
(B) Additional legislative action required.--In the case of
a State which the Secretary identifies as--
(i) requiring State legislation (other than legislation
appropriating funds) to conform its regulatory program to the
changes made in this section, but
(ii) having a legislature which is not scheduled to meet in
1999 in a legislative session in which such legislation may
be considered,
the date specified in this paragraph is the first day of the
first calendar quarter beginning after the close of the first
legislative session of the State legislature that begins on
or after July 1, 1999. For purposes of the previous sentence,
in the case of a State that has a 2-year legislative session,
each year of such session shall be deemed to be a separate
regular session of the State legislature.
SEC. 4032. MEDICARE PREPAID COMPETITIVE PRICING DEMONSTRATION
PROJECT.
(a) Establishment of Project.--The Secretary of Health and
Human Services shall provide, beginning not later than 1 year
after
[[Page H4454]]
the date of the enactment of this Act, for implementation of
a project (in this section referred to as the ``project'') to
demonstrate the application of, and the consequences of
applying, a market-oriented pricing system for the provision
of a full range of medicare benefits in a geographic area.
(b) Research Design Advisory Committee.--
(1) In general.--Before implementing the project under this
section, the Secretary shall appoint a national advisory
committee, including independent actuaries and individuals
with expertise in competitive health plan pricing, to make
recommendations to the Secretary concerning the appropriate
research design for implementing the project.
(2) Initial recommendations.--The committee initially shall
submit recommendations respecting the method for area
selection, benefit design among plans offered, structuring
choice among health plans offered, methods for setting the
price to be paid to plans, collection of plan information
(including information concerning quality and access to
care), information dissemination, and methods of evaluating
the results of the project.
(3) Advice during implementation.--Upon implementation of
the project, the committee shall continue to advise the
Secretary on the application of the design in different areas
and changes in the project based on experience with its
operations.
(c) Area Selection.--
(1) In general.--Taking into account the recommendations of
the advisory committee submitted under subsection (b), the
Secretary shall designate areas in which the project will
operate.
(2) Appointment of area advisory committee.--Upon the
designation of an area for inclusion in the project, the
Secretary shall appoint an area advisory committee, composed
of representatives of health plans, providers, and medicare
beneficiaries in the area, to advise the Secretary concerning
how the project will actually be implemented in the area.
Such advice may include advice concerning the marketing and
pricing of plans in the area and other salient factors
relating.
(d) Monitoring and Report.--
(1) Monitoring impact.--Taking into consideration the
recommendations of the general advisory committee (appointed
under subsection (b)), the Secretary shall closely monitor
the impact of projects in areas on the price and quality of,
and access to, medicare covered services, choice of health
plan, changes in enrollment, and other relevant factors.
(2) Report.--The Secretary shall periodically report to
Congress on the progress under the project under this
section.
(e) Waiver Authority.--The Secretary of Health and Human
Services may waive such requirements of section 1876 (and
such requirements of part C of title XVIII, as amended by
chapter 1), of the Social Security Act as may be necessary
for the purposes of carrying out the project.
(f) Relationship to Other Authority.--Except pursuant to
this section the Secretary of Health and Human Services may
not conduct or continue any medicare demonstration project
relating to payment of health maintenance organizations,
MedicarePlus organizations, or similar prepaid managed care
entities on the basis of a competitive bidding process or
pricing system described in subsection (a) rather than on the
bases described in section 1853 or 1876 of the Social
Security Act.
Subtitle B--Prevention Initiatives
SEC. 4101. SCREENING MAMMOGRAPHY.
(a) Providing Annual Screening Mammography for Women Over
Age 39.--Section 1834(c)(2)(A) (42 U.S.C. 1395m(c)(2)(A)) is
amended--
(1) in clause (iii), to read as follows:
``(iii) In the case of a woman over 39 years of age,
payment may not be made under this part for screening
mammography performed within 11 months following the month in
which a previous screening mammography was performed.''; and
(2) by striking clauses (iv) and (v).
(b) Waiver of Deductible.--The first sentence of section
1833(b) (42 U.S.C. 1395l(b)) is amended--
(1) by striking ``and'' before ``(4)'', and
(2) by inserting before the period at the end the
following: ``, and (5) such deductible shall not apply with
respect to screening mammography (as described in section
1861(jj))''.
(c) Conforming Amendment.--Section 1834(c)(1)(C) of such
Act (42 U.S.C. 1395m(c)(1)(C)) is amended by striking ``,
subject to the deductible established under section
1833(b),''.
(d) Effective Date.--The amendments made by this section
shall apply to items and services furnished on or after
January 1, 1998.
SEC. 4102. SCREENING PAP SMEAR AND PELVIC EXAMS.
(a) Coverage of Pelvic Exam; Increasing Frequency of
Coverage of Pap Smear.--Section 1861(nn) (42 U.S.C.
1395x(nn)) is amended--
(1) in the heading, by striking ``Smear'' and inserting
``Smear; Screening Pelvic Exam'';
(2) by inserting ``or vaginal'' after ``cervical'' each
place it appears;
(3) by striking ``(nn)'' and inserting ``(nn)(1)'';
(4) by striking ``3 years'' and all that follows and
inserting ``3 years, or during the preceding year in the case
of a woman described in paragraph (3).''; and
(5) by adding at the end the following new paragraphs:
``(2) The term `screening pelvic exam' means an pelvic
examination provided to a woman if the woman involved has not
had such an examination during the preceding 3 years, or
during the preceding year in the case of a woman described in
paragraph (3), and includes a clinical breast examination.
``(3) A woman described in this paragraph is a woman who--
``(A) is of childbearing age and has not had a test
described in this subsection during each of the preceding 3
years that did not indicate the presence of cervical or
vaginal cancer; or
``(B) is at high risk of developing cervical or vaginal
cancer (as determined pursuant to factors identified by the
Secretary).''.
(b) Waiver of Deductible.--The first sentence of section
1833(b) (42 U.S.C. 1395l(b)), as amended by section 4101(b),
is amended--
(1) by striking ``and'' before ``(5)'', and
(2) by inserting before the period at the end the
following: ``, and (6) such deductible shall not apply with
respect to screening pap smear and screening pelvic exam (as
described in section 1861(nn))''.
(c) Conforming Amendments.--Sections 1861(s)(14) and
1862(a)(1)(F) (42 U.S.C. 1395x(s)(14), 1395y(a)(1)(F)) are
each amended by inserting ``and screening pelvic exam'' after
``screening pap smear''.
(d) Payment Under Physician Fee Schedule.--Section
1848(j)(3)(42 U.S.C. 1395w-4(j)(3)) is amended by striking
``and (4)'' and inserting ``, (4) and (14) (with respect to
services described in section 1861(nn)(2))''.
(e) Effective Date.--The amendments made by this section
shall apply to items and services furnished on or after
January 1, 1998.
(f) Report on Rescreening Pap Smears.--Not later than 6
months after the date of the enactment of this Act, the
Secretary of Health and Human Services shall submit to
Congress a report on the extent to which the use of
supplemental computer-assisted diagnostic tests consisting of
interactive automated computer-imaging of an exfoliative
cytology test, in conjunction with the pap smears, improves
the early detection of cervical or vaginal cancer and the
costs implications for coverage of such supplemental tests
under the medicare program.
SEC. 4103. PROSTATE CANCER SCREENING TESTS.
(a) Coverage.--Section 1861 (42 U.S.C. 1395x) is amended--
(1) in subsection (s)(2)--
(A) by striking ``and'' at the end of subparagraphs (N) and
(O), and
(B) by inserting after subparagraph (O) the following new
subparagraph:
``(P) prostate cancer screening tests (as defined in
subsection (oo)); and''; and
(2) by adding at the end the following new subsection:
``Prostate Cancer Screening Tests
``(oo)(1) The term `prostate cancer screening test' means a
test that consists of any (or all) of the procedures
described in paragraph (2) provided for the purpose of early
detection of prostate cancer to a man over 50 years of age
who has not had such a test during the preceding year.
``(2) The procedures described in this paragraph are as
follows:
``(A) A digital rectal examination.
``(B) A prostate-specific antigen blood test.
``(C) For years beginning after 2001, such other procedures
as the Secretary finds appropriate for the purpose of early
detection of prostate cancer, taking into account changes in
technology and standards of medical practice, availability,
effectiveness, costs, and such other factors as the Secretary
considers appropriate.''.
(b) Payment for Prostate-specific Antigen Blood Test Under
Clinical Diagnostic Laboratory Test Fee Schedules.--Section
1833(h)(1)(A) (42 U.S.C. 1395l(h)(1)(A)) is amended by
inserting after ``laboratory tests'' the following:
``(including prostate cancer screening tests under section
1861(oo) consisting of prostate-specific antigen blood
tests)''.
(c) Conforming Amendment.--Section 1862(a) (42 U.S.C.
1395y(a)) is amended--
(1) in paragraph (1)--
(A) in subparagraph (E), by striking ``and'' at the end,
(B) in subparagraph (F), by striking the semicolon at the
end and inserting ``, and'', and
(C) by adding at the end the following new subparagraph:
``(G) in the case of prostate cancer screening tests (as
defined in section 1861(oo)), which are performed more
frequently than is covered under such section;''; and
(2) in paragraph (7), by striking ``paragraph (1)(B) or
under paragraph (1)(F)'' and inserting ``subparagraphs (B),
(F), or (G) of paragraph (1)''.
(d) Payment Under Physician Fee Schedule.--Section
1848(j)(3)(42 U.S.C. 1395w-4(j)(3)), as amended by section
4102, is amended by inserting ``(2)(P) (with respect to
services described in subparagraphs (A) and (C) of section
1861(oo),'' after ``(2)(G)''
(e) Effective Date.--The amendments made by this section
shall apply to items and services furnished on or after
January 1, 1998.
SEC. 4104. COVERAGE OF COLORECTAL SCREENING.
(a) Coverage.--
(1) In general.--Section 1861 (42 U.S.C. 1395x), as amended
by section 4103(a), is amended--
(A) in subsection (s)(2)--
[[Page H4455]]
(i) by striking ``and'' at the end of subparagraph (P);
(ii) by adding ``and'' at the end of subparagraph (Q); and
(iii) by adding at the end the following new subparagraph:
``(R) colorectal cancer screening tests (as defined in
subsection (pp)); and''; and
(B) by adding at the end the following new subsection:
``Colorectal Cancer Screening Tests
``(pp)(1) The term `colorectal cancer screening test' means
any of the following procedures furnished to an individual
for the purpose of early detection of colorectal cancer:
``(A) Screening fecal-occult blood test.
``(B) Screening flexible sigmoidoscopy.
``(C) In the case of an individual at high risk for
colorectal cancer, screening colonoscopy.
``(D) Screening barium enema, if found by the Secretary to
be an appropriate alternative to screening flexible
sigmoidoscopy under subparagraph (B) or screening colonoscopy
under subparagraph (C).
``(E) For years beginning after 2002, such other procedures
as the Secretary finds appropriate for the purpose of early
detection of colorectal cancer, taking into account changes
in technology and standards of medical practice,
availability, effectiveness, costs, and such other factors as
the Secretary considers appropriate.
``(2) In paragraph (1)(C), an `individual at high risk for
colorectal cancer' is an individual who, because of family
history, prior experience of cancer or precursor neoplastic
polyps, a history of chronic digestive disease condition
(including inflammatory bowel disease, Crohn's Disease, or
ulcerative colitis), the presence of any appropriate
recognized gene markers for colorectal cancer, or other
predisposing factors, faces a high risk for colorectal
cancer.''.
(2) Deadline for decision on coverage of screening barium
enema.--Not later than 2 years after the date of the
enactment of this section, the Secretary of Health and Human
Services shall issue and publish a determination on the
treatment of screening barium enema as a colorectal cancer
screening test under section 1861(pp) (as added by
subparagraph (B)) as an alternative procedure to a screening
flexible sigmoidoscopy or screening colonoscopy.
(b) Frequency and Payment Limits.--
(1) In general.--Section 1834 (42 U.S.C. 1395m) is amended
by inserting after subsection (c) the following new
subsection:
``(d) Frequency and Payment Limits for Colorectal Cancer
Screening Tests.--
``(1) Screening fecal-occult blood tests.--
``(A) Payment limit.--In establishing fee schedules under
section 1833(h) with respect to colorectal cancer screening
tests consisting of screening fecal-occult blood tests,
except as provided by the Secretary under paragraph (4)(A),
the payment amount established for tests performed--
``(i) in 1998 shall not exceed $5; and
``(ii) in a subsequent year, shall not exceed the limit on
the payment amount established under this subsection for such
tests for the preceding year, adjusted by the applicable
adjustment under section 1833(h) for tests performed in such
year.
``(B) Frequency limit.--Subject to revision by the
Secretary under paragraph (4)(B), no payment may be made
under this part for colorectal cancer screening test
consisting of a screening fecal-occult blood test--
``(i) if the individual is under 50 years of age; or
``(ii) if the test is performed within the 11 months after
a previous screening fecal-occult blood test.
``(2) Screening flexible sigmoidoscopies.--
``(A) Fee schedule.--The Secretary shall establish a
payment amount under section 1848 with respect to colorectal
cancer screening tests consisting of screening flexible
sigmoidoscopies that is consistent with payment amounts under
such section for similar or related services, except that
such payment amount shall be established without regard to
subsection (a)(2)(A) of such section.
``(B) Payment limit.--In the case of screening flexible
sigmoidoscopy services--
``(i) the payment amount may not exceed such amount as the
Secretary specifies, based upon the rates recognized under
this part for diagnostic flexible sigmoidoscopy services; and
``(ii) that, in accordance with regulations, may be
performed in an ambulatory surgical center and for which the
Secretary permits ambulatory surgical center payments under
this part and that are performed in an ambulatory surgical
center or hospital outpatient department, the payment amount
under this part may not exceed the lesser of (I) the payment
rate that would apply to such services if they were performed
in a hospital outpatient department, or (II) the payment rate
that would apply to such services if they were performed in
an ambulatory surgical center.
``(C) Special rule for detected lesions.--If during the
course of such screening flexible sigmoidoscopy, a lesion or
growth is detected which results in a biopsy or removal of
the lesion or growth, payment under this part shall not be
made for the screening flexible sigmoidoscopy but shall be
made for the procedure classified as a flexible sigmoidoscopy
with such biopsy or removal.
``(D) Frequency limit.--Subject to revision by the
Secretary under paragraph (4)(B), no payment may be made
under this part for a colorectal cancer screening test
consisting of a screening flexible sigmoidoscopy--
``(i) if the individual is under 50 years of age; or
``(ii) if the procedure is performed within the 47 months
after a previous screening flexible sigmoidoscopy.
``(3) Screening colonoscopy for individuals at high risk
for colorectal cancer.--
``(A) Fee schedule.--The Secretary shall establish a
payment amount under section 1848 with respect to colorectal
cancer screening test consisting of a screening colonoscopy
for individuals at high risk for colorectal cancer (as
defined in section 1861(pp)(2)) that is consistent with
payment amounts under such section for similar or related
services, except that such payment amount shall be
established without regard to subsection (a)(2)(A) of such
section.
``(B) Payment limit.--In the case of screening colonoscopy
services--
``(i) the payment amount may not exceed such amount as the
Secretary specifies, based upon the rates recognized under
this part for diagnostic colonoscopy services; and
``(ii) that are performed in an ambulatory surgical center
or hospital outpatient department, the payment amount under
this part may not exceed the lesser of (I) the payment rate
that would apply to such services if they were performed in a
hospital outpatient department, or (II) the payment rate that
would apply to such services if they were performed in an
ambulatory surgical center.
``(C) Special rule for detected lesions.--If during the
course of such screening colonoscopy, a lesion or growth is
detected which results in a biopsy or removal of the lesion
or growth, payment under this part shall not be made for the
screening colonoscopy but shall be made for the procedure
classified as a colonoscopy with such biopsy or removal.
``(D) Frequency limit.--Subject to revision by the
Secretary under paragraph (4)(B), no payment may be made
under this part for a colorectal cancer screening test
consisting of a screening colonoscopy for individuals at high
risk for colorectal cancer if the procedure is performed
within the 23 months after a previous screening colonoscopy.
``(4) Reductions in payment limit and revision of
frequency.--
``(A) Reductions in payment limit for screening fecal-
occult blood tests.--The Secretary shall review from time to
time the appropriateness of the amount of the payment limit
established for screening fecal-occult blood tests under
paragraph (1)(A). The Secretary may, with respect to tests
performed in a year after 2000, reduce the amount of such
limit as it applies nationally or in any area to the amount
that the Secretary estimates is required to assure that such
tests of an appropriate quality are readily and conveniently
available during the year.
``(B) Revision of frequency.--
``(i) Review.--The Secretary shall review periodically the
appropriate frequency for performing colorectal cancer
screening tests based on age and such other factors as the
Secretary believes to be pertinent.
``(ii) Revision of frequency.--The Secretary, taking into
consideration the review made under clause (i), may revise
from time to time the frequency with which such tests may be
paid for under this subsection, but no such revision shall
apply to tests performed before January 1, 2001.
``(5) Limiting charges of nonparticipating physicians.--
``(A) In general.--In the case of a colorectal cancer
screening test consisting of a screening flexible
sigmoidoscopy or a screening colonoscopy provided to an
individual at high risk for colorectal cancer for which
payment may be made under this part, if a nonparticipating
physician provides the procedure to an individual enrolled
under this part, the physician may not charge the individual
more than the limiting charge (as defined in section
1848(g)(2)).
``(B) Enforcement.--If a physician or supplier knowing and
willfully imposes a charge in violation of subparagraph (A),
the Secretary may apply sanctions against such physician or
supplier in accordance with section 1842(j)(2).''.
(2) Special rule for screening barium enema.--If the
Secretary of Health and Human Services issues a determination
under subsection (a)(2) that screening barium enema should be
covered as a colorectal cancer screening test under section
1861(pp) (as added by subsection (a)(1)(B)), the Secretary
shall establish frequency limits (including revisions of
frequency limits) for such procedure consistent with the
frequency limits for other colorectal cancer screening tests
under section 1834(d) (as added by subsection (b)(1)), and
shall establish payment limits (including limits on charges
of nonparticipating physicians) for such procedure consistent
with the payment limits under part B of title XVIII for
diagnostic barium enema procedures.
(c) Conforming Amendments.--(1) Paragraphs (1)(D) and
(2)(D) of section 1833(a) (42 U.S.C. 1395l(a)) are each
amended by inserting ``or section 1834(d)(1)'' after
``subsection (h)(1)''.
(2) Section 1833(h)(1)(A) (42 U.S.C. 1395l(h)(1)(A)) is
amended by striking ``The Secretary'' and inserting ``Subject
to paragraphs (1) and (4)(A) of section 1834(d), the
Secretary''.
(3) Clauses (i) and (ii) of section 1848(a)(2)(A) (42
U.S.C. 1395w-4(a)(2)(A)) are
[[Page H4456]]
each amended by inserting after ``a service'' the following:
``(other than a colorectal cancer screening test consisting
of a screening colonoscopy provided to an individual at high
risk for colorectal cancer or a screening flexible
sigmoidoscopy)''.
(4) Section 1862(a) (42 U.S.C. 1395y(a)), as amended by
section 4103(c), is amended--
(A) in paragraph (1)--
(i) in subparagraph (F), by striking ``and'' at the end,
(ii) in subparagraph (G), by striking the semicolon at the
end and inserting ``, and'', and
(iii) by adding at the end the following new subparagraph:
``(H) in the case of colorectal cancer screening tests,
which are performed more frequently than is covered under
section 1834(d);''; and
(B) in paragraph (7), by striking ``or (G)'' and inserting
``(G), or (H)''.
(d) Effective Date.--The amendments made by this section
shall apply to items and services furnished on or after
January 1, 1998.
SEC. 4105. DIABETES SCREENING TESTS.
(a) Coverage of Diabetes Outpatient Self-management
Training Services.--
(1) In general.--Section 1861 (42 U.S.C. 1395x), as amended
by sections 4103(a) and 4104(a), is amended--
(A) in subsection (s)(2)--
(i) by striking ``and'' at the end of subparagraph (Q);
(ii) by adding ``and'' at the end of subparagraph (R); and
(iii) by adding at the end the following new subparagraph:
``(S) diabetes outpatient self-management training services
(as defined in subsection (qq)); and''; and
(B) by adding at the end the following new subsection:
``Diabetes Outpatient Self-Management Training Services
``(qq)(1) The term `diabetes outpatient self-management
training services' means educational and training services
furnished to an individual with diabetes by a certified
provider (as described in paragraph (2)(A)) in an outpatient
setting by an individual or entity who meets the quality
standards described in paragraph (2)(B), but only if the
physician who is managing the individual's diabetic condition
certifies that such services are needed under a comprehensive
plan of care related to the individual's diabetic condition
to provide the individual with necessary skills and knowledge
(including skills related to the self-administration of
injectable drugs) to participate in the management of the
individual's condition.
``(2) In paragraph (1)--
``(A) a `certified provider' is a physician, or other
individual or entity designated by the Secretary, that, in
addition to providing diabetes outpatient self-management
training services, provides other items or services for which
payment may be made under this title; and
``(B) a physician, or such other individual or entity,
meets the quality standards described in this paragraph if
the physician, or individual or entity, meets quality
standards established by the Secretary, except that the
physician or other individual or entity shall be deemed to
have met such standards if the physician or other individual
or entity meets applicable standards originally established
by the National Diabetes Advisory Board and subsequently
revised by organizations who participated in the
establishment of standards by such Board, or is recognized by
an organization that represents individuals (including
individuals under this title) with diabetes as meeting
standards for furnishing the services.''.
(2) Payment Under Physician Fee Schedule.--Section
1848(j)(3)(42 U.S.C. 1395w-4(j)(3)) as amended in sections
4102 and 4103, is amended by inserting ``(2)(S),'' before
``(3),''.
(3) Consultation with organizations in establishing payment
amounts for services provided by physicians.--In establishing
payment amounts under section 1848 of the Social Security Act
for physicians' services consisting of diabetes outpatient
self-management training services, the Secretary of Health
and Human Services shall consult with appropriate
organizations, including such organizations representing
individuals or medicare beneficiaries with diabetes, in
determining the relative value for such services under
section 1848(c)(2) of such Act.
(b) Blood-testing Strips for Individuals With Diabetes.--
(1) Including strips and monitors as durable medical
equipment.--The first sentence of section 1861(n) (42 U.S.C.
1395x(n)) is amended by inserting before the semicolon the
following: ``, and includes blood-testing strips and blood
glucose monitors for individuals with diabetes without regard
to whether the individual has Type I or Type II diabetes or
to the individual's use of insulin (as determined under
standards established by the Secretary in consultation with
the appropriate organizations)''.
(2) 10 percent reduction in payments for testing strips.--
Section 1834(a)(2)(B)(iv) (42 U.S.C. 1395m(a)(2)(B)(iv)) is
amended by adding before the period the following: ``(reduced
by 10 percent, in the case of a blood glucose testing strip
furnished after 1997 for an individual with diabetes)''.
(c) Establishment of Outcome Measures for Beneficiaries
With Diabetes.--
(1) In general.--The Secretary of Health and Human
Services, in consultation with appropriate organizations,
shall establish outcome measures, including glysolated
hemoglobin (past 90-day average blood sugar levels), for
purposes of evaluating the improvement of the health status
of medicare beneficiaries with diabetes mellitus.
(2) Recommendations for modifications to screening
benefits.--Taking into account information on the health
status of medicare beneficiaries with diabetes mellitus as
measured under the outcome measures established under
subparagraph (A), the Secretary shall from time to time
submit recommendations to Congress regarding modifications to
the coverage of services for such beneficiaries under the
medicare program.
(d) Effective Date.--The amendments made by this section
shall apply to items and services furnished on or after
January 1, 1998.
SEC. 4106. STANDARDIZATION OF MEDICARE COVERAGE OF BONE MASS
MEASUREMENTS.
(a) In General.--Section 1861 (42 U.S.C. 1395x), as amended
by sections 4103(a), 4104(a), 4105(a), is amended--
(1) in subsection (s)--
(A) in paragraph (12)(C), by striking ``and'' at the end,
(B) by striking the period at the end of paragraph (14) and
inserting ``; and'',
(C) by redesignating paragraphs (15) and (16) as paragraphs
(16) and (17), respectively, and
(D) by inserting after paragraph (14) the following new
paragraph:
``(15) bone mass measurement (as defined in subsection
(rr)).''; and
(2) by inserting after subsection (qq) the following new
subsection:
``Bone Mass Measurement
``(rr)(1) The term `bone mass measurement' means a
radiologic or radioisotopic procedure or other procedure
approved by the Food and Drug Administration performed on a
qualified individual (as defined in paragraph (2)) for the
purpose of identifying bone mass or detecting bone loss or
determining bone quality, and includes a physician's
interpretation of the results of the procedure.
``(2) For purposes of this subsection, the term `qualified
individual' means an individual who is (in accordance with
regulations prescribed by the Secretary)--
``(A) an estrogen-deficient woman at clinical risk for
osteoporosis;
``(B) an individual with vertebral abnormalities;
``(C) an individual receiving long-term glucocorticoid
steroid therapy;
``(D) an individual with primary hyperparathyroidism; or
``(E) an individual being monitored to assess the response
to or efficacy of an approved osteoporosis drug therapy.
``(3) The Secretary shall establish such standards
regarding the frequency with which a qualified individual
shall be eligible to be provided benefits for bone mass
measurement under this title.''.
(b) Payment under Physician Fee Schedule.--Section
1848(j)(3) (42 U.S.C. 1395w-4(j)(3)), as amended by sections
4102, 4103, and 4105, is amended--
(1) by striking ``(4) and (14)'' and inserting ``(4),
(14)'' and
(2) by inserting `` and (15)'' after ``1861(nn)(2))''.
(c) Conforming Amendments.--Sections 1864(a),
1902(a)(9)(C), and 1915(a)(1)(B)(ii)(I) (42 U.S.C. 1395aa(a),
1396a(a)(9)(C), and 1396n(a)(1)(B)(ii)(I)) are amended by
striking ``paragraphs (15) and (16)'' each place it appears
and inserting ``paragraphs (16) and (17)''.
(d) Effective Date.--The amendments made by this section
shall apply to bone mass measurements performed on or after
July 1, 1998.
SEC. 4107. VACCINES OUTREACH EXPANSION.
(a) Extension of Influenza and Pneumococcal Vaccination
Campaign.--In order to increase utilization of pneumococcal
and influenza vaccines in medicare beneficiaries, the
Influenza and Pneumococcal Vaccination Campaign carried out
by the Health Care Financing Administration in conjunction
with the Centers for Disease Control and Prevention and the
National Coalition for Adult Immunization, is extended until
the end of fiscal year 2002.
(b) Appropriation.--There are hereby appropriated for each
of fiscal years 1998 through 2002, $8,000,000 to the Campaign
described in subsection (a). Of the amount of such
appropriation in each fiscal year, 60 percent of such
appropriation shall be payable from the Federal Hospital
Insurance Trust Fund, and 40 percent shall be payable from
the Federal Supplementary Medical Insurance Trust Fund under
title XVIII of the Social Security Act (42 U.S.C. 1395i,
1395t).
SEC. 4108. STUDY ON PREVENTIVE BENEFITS.
(a) Study.--The Secretary of Health and Human Services
shall request the National Academy of Sciences, in
conjunction with the United States Preventive Services Task
Force, to analyze the expansion or modification of preventive
benefits provided to medicare beneficiaries under title XVIII
of the Social Security Act. The analysis shall consider both
the short term and long term benefits, and costs to the
medicare program, of such expansion or modification,
(b) Report.--
(1) Initial report.--Not later than 2 years after the date
of the enactment of this Act, the Secretary shall submit a
report on the findings of the analysis conducted under
subsection (a) to the Committee on Ways and
[[Page H4457]]
Means and the Committee on Commerce of the House of
Representatives and the Committee on Finance of the Senate.
(2) Contents.--Such report shall include specific findings
with respect to coverage of the following preventive
benefits:
(A) Nutrition therapy, including parenteral and enteral
nutrition.
(B) Skin cancer screening.
(C) Medically necessary dental care.
(D) Routine patient care costs for beneficiaries enrolled
in approved clinical trial programs.
(E) Elimination of time limitation for coverage of
immunosuppressive drugs for transplant patients.
(3) Funding.--From funds appropriated to the Department of
Health and Human Services for fiscal years 1998 and 1999, the
Secretary shall provide for such funding as may be necessary
for the conduct of the analysis by the National Academy of
Sciences under this section.
Subtitle C--Rural Initiatives
SEC. 4206. INFORMATICS, TELEMEDICINE, AND EDUCATION
DEMONSTRATION PROJECT.
(a) Purpose and Authorization.--
(1) In general.--Not later than 9 months after the date of
enactment of this section, the Secretary of Health and Human
Services shall provide for a demonstration project described
in paragraph (2).
(2) Description of project.--
(A) In general.--The demonstration project described in
this paragraph is a single demonstration project to use
eligible health care provider telemedicine networks to apply
high-capacity computing and advanced networks to improve
primary care (and prevent health care complications) to
medicare beneficiaries with diabetes mellitus who are
residents of medically underserved rural areas or residents
of medically underserved inner-city areas.
(B) Medically underserved defined.--As used in this
paragraph, the term ``medically underserved'' has the meaning
given such term in section 330(b)(3) of the Public Health
Service Act (42 U.S.C. 254b(b)(3)).
(3) Waiver.--The Secretary shall waive such provisions of
title XVIII of the Social Security Act as may be necessary to
provide for payment for services under the project in
accordance with subsection (d).
(4) Duration of project.--The project shall be conducted
over a 4-year period.
(b) Objectives of Project.--The objectives of the project
include the following:
(1) Improving patient access to and compliance with
appropriate care guidelines for individuals with diabetes
mellitus through direct telecommunications link with
information networks in order to improve patient quality-of-
life and reduce overall health care costs.
(2) Developing a curriculum to train, and providing
standards for credentialing and licensure of, health
professionals (particularly primary care health
professionals) in the use of medical informatics and
telecommunications.
(3) Demonstrating the application of advanced technologies,
such as video-conferencing from a patient's home, remote
monitoring of a patient's medical condition, interventional
informatics, and applying individualized, automated care
guidelines, to assist primary care providers in assisting
patients with diabetes in a home setting.
(4) Application of medical informatics to residents with
limited English language skills.
(5) Developing standards in the application of telemedicine
and medical informatics.
(6) Developing a model for the cost-effective delivery of
primary and related care both in a managed care environment
and in a fee-for-service environment.
(c) Eligible Health Care Provider Telemedicine Network
Defined.--For purposes of this section, the term ``eligible
health care provider telemedicine network'' means a
consortium that includes at least one tertiary care hospital
(but no more than 2 such hospitals), at least one medical
school, no more than 4 facilities in rural or urban areas,
and at least one regional telecommunications provider and
that meets the following requirements:
(1) The consortium is located in an area with one of the
highest concentrations of medical schools and tertiary care
facilities in the United States and has appropriate
arrangements (within or outside the consortium) with such
schools and facilities, universities, and telecommunications
providers, in order to conduct the project.
(2) The consortium submits to the Secretary an application
at such time, in such manner, and containing such information
as the Secretary may require, including a description of the
use to which the consortium would apply any amounts received
under the project and the source and amount of non-Federal
funds used in the project.
(3) The consortium guarantees that it will be responsible
for payment for all costs of the project that are not paid
under this section and that the maximum amount of payment
that may be made to the consortium under this section shall
not exceed the amount specified in subsection (d)(3).
(d) Coverage as Medicare Part B Services.--
(1) In general.--Subject to the succeeding provisions of
this subsection, services related to the treatment or
management of (including prevention of complications from)
diabetes for medicare beneficiaries furnished under the
project shall be considered to be services covered under part
B of title XVIII of the Social Security Act.
(2) Payments.--
(A) In general.--Subject to paragraph (3), payment for such
services shall be made at a rate of 50 percent of the costs
that are reasonable and related to the provision of such
services. In computing such costs, the Secretary shall
include costs described in subparagraph (B), but may not
include costs described in subparagraph (C).
(B) Costs that may be included.--The costs described in
this subparagraph are the permissible costs (as recognized by
the Secretary) for the following:
(i) The acquisition of telemedicine equipment for use in
patients' homes (but only in the case of patients located in
medically underserved areas).
(ii) Curriculum development and training of health
professionals in medical informatics and telemedicine.
(iii) Payment of telecommunications costs (including
salaries and maintenance of equipment), including costs of
telecommunications between patients' homes and the eligible
network and between the network and other entities under the
arrangements described in subsection (c)(1).
(iv) Payments to practitioners and providers under the
medicare programs.
(C) Costs not included.--The costs described in this
subparagraph are costs for any of the following:
(i) The purchase or installation of transmission equipment
(other than such equipment used by health professionals to
deliver medical informatics services under the project).
(ii) The establishment or operation of a telecommunications
common carrier network.
(iii) Construction (except for minor renovations related to
the installation of reimbursable equipment) or the
acquisition or building of real property.
(3) Limitation.--The total amount of the payments that may
be made under this section shall not exceed $30,000,000.
(4) Limitation on cost-sharing.--The project may not impose
cost sharing on a medicare beneficiary for the receipt of
services under the project in excess of 20 percent of the
recognized costs of the project attributable to such
services.
(e) Reports.--The Secretary shall submit to the Committees
on Ways and Means and Commerce of the House of
Representatives and the Committee on Finance of the Senate
interim reports on the project and a final report on the
project within 6 months after the conclusion of the project.
The final report shall include an evaluation of the impact of
the use of telemedicine and medical informatics on improving
access of medicare beneficiaries to health care services, on
reducing the costs of such services, and on improving the
quality of life of such beneficiaries.
(f) Definitions.--For purposes of this section:
(1) Interventional informatics.--The term ``interventional
informatics'' means using information technology and virtual
reality technology to intervene in patient care.
(2) Medical informatics.--The term ``medical informatics''
means the storage, retrieval, and use of biomedical and
related information for problem solving and decision-making
through computing and communications technologies.
(3) Project.--The term ``project'' means the demonstration
project under this section.
Subtitle D--Anti-Fraud and Abuse Provisions
SEC. 4301. PERMANENT EXCLUSION FOR THOSE CONVICTED OF 3
HEALTH CARE RELATED CRIMES.
Section 1128(c)(3) (42 U.S.C. 1320a-7(c)(3)) is amended--
(1) in subparagraph (A), by inserting ``or in the case
described in subparagraph (G)'' after ``subsection (b)(12)'';
(2) in subparagraphs (B) and (D), by striking ``In the
case'' and inserting ``Subject to subparagraph (G), in the
case''; and
(3) by adding at the end the following new subparagraph:
``(G) In the case of an exclusion of an individual under
subsection (a) based on a conviction occurring on or after
the date of the enactment of this subparagraph, if the
individual has (before, on, or after such date and before the
date of the conviction for which the exclusion is imposed)
been convicted--
``(i) on one previous occasion of one or more offenses for
which an exclusion may be effected under such subsection, the
period of the exclusion shall be not less than 10 years, or
``(ii) on 2 or more previous occasions of one or more
offenses for which an exclusion may be effected under such
subsection, the period of the exclusion shall be
permanent.''.
SEC. 4302. AUTHORITY TO REFUSE TO ENTER INTO MEDICARE
AGREEMENTS WITH INDIVIDUALS OR ENTITIES
CONVICTED OF FELONIES.
(a) Medicare Part A.--Section 1866(b)(2) (42 U.S.C.
1395cc(b)(2)) is amended--
(1) by striking ``or'' at the end of subparagraph (B);
(2) by striking the period at the end of subparagraph (C)
and inserting ``, or''; and
(3) by adding after subparagraph (C) the following new
subparagraph:
``(D) has ascertained that the provider has been convicted
of a felony under Federal or State law for an offense which
the Secretary determines is inconsistent with the best
interests of program beneficiaries.''.
[[Page H4458]]
(b) Medicare Part B.--Section 1842 (42 U.S.C. 1395u) is
amended by adding after subsection (r) the following new
subsection:
``(s) The Secretary may refuse to enter into an agreement
with a physician or supplier under subsection (h) or may
terminate or refuse to renew such agreement, in the event
that such physician or supplier has been convicted of a
felony under Federal or State law for an offense which the
Secretary determines is inconsistent with the best interests
of program beneficiaries.''.
(c) Medicaid.--Section 1902(a)(23) (42 U.S.C. 1396(a)) is
amended--
(1) by relocating the matter that precedes ``provide that,
(A)'' immediately before the semicolon;
(2) by inserting a semicolon after ``1915'';
(3) by striking the comma after ``Guam'' and inserting a
semicolon; and
(4) by inserting before the semicolon at the end the
following: ``and except that this provision does not require
a State to provide medical assistance for such services
furnished by a person or entity convicted of a felony under
Federal or State law for an offense which the State agency
determines is inconsistent with the best interests of
beneficiaries under the State plan''.
(d) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act
and apply to the entry and renewal of contracts on or after
such date.
SEC. 4303. INCLUSION OF TOLL-FREE NUMBER TO REPORT MEDICARE
WASTE, FRAUD, AND ABUSE IN EXPLANATION OF
BENEFITS FORMS.
(a) In General.--Section 1842(h)(7) (42 U.S.C. 1395u(h)(7))
is amended--
(1) by striking ``and'' at the end of subparagraph (D),
(2) by striking the period at the end of subparagraph (E),
and
(3) by adding at the end the following new subparagraph:
``(E) a toll-free telephone number maintained by the
Inspector General in the Department of Health and Human
Services for the receipt of complaints and information about
waste, fraud, and abuse in the provision or billing of
services under this title.''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply to explanations of benefits provided on or after
such date (not later than January 1, 1999) as the Secretary
of Health and Human Services shall provide.
SEC. 4304. LIABILITY OF MEDICARE CARRIERS AND FISCAL
INTERMEDIARIES FOR CLAIMS SUBMITTED BY EXCLUDED
PROVIDERS.
(a) Reimbursement to the Secretary for Amounts Paid to
Excluded Providers.--
(1) Requirements for fiscal intermediaries.--
(A) In general.--Section 1816 (42 U.S.C. 1395h) is amended
by adding at the end the following new subsection:
``(m) An agreement with an agency or organization under
this section shall require that such agency or organization
reimburse the Secretary for any amounts paid by the agency or
organization for a service under this title which is
furnished, directed, or prescribed by an individual or entity
during any period for which the individual or entity is
excluded pursuant to section 1128, 1128A, or 1156, from
participation in the program under this title, if the amounts
are paid after the Secretary notifies the agency or
organization of the exclusion.''.
(B) Conforming amendment.--Subsection (i) of such section
is amended by adding at the end the following new paragraph:
``(4) Nothing in this subsection shall be construed to
prohibit reimbursement by an agency or organization under
subsection (m).''.
(2) Requirements for carriers.--Section 1842(b)(3) (42
U.S.C. 1395u(b)(3)) is amended--
(A) by striking ``and'' at the end of subparagraph (I); and
(B) by inserting after subparagraph (I) the following new
subparagraph:
``(J) will reimburse the Secretary for any amounts paid by
the carrier for an item or service under this part which is
furnished, directed, or prescribed by an individual or entity
during any period for which the individual or entity is
excluded pursuant to section 1128, 1128A, or 1156, from
participation in the program under this title, if the amounts
are paid after the Secretary notifies the carrier of the
exclusion, and''.
(3) Medicaid Provision.--Section 1902(a)(39) (42 U.S.C.
1396a(a)(39)) is amended by inserting before the semicolon at
the end the following: ``, and provide further for
reimbursement to the Secretary of any payments made under the
plan or any item or service furnished, directed, or
prescribed by the excluded individual or entity during such
period, after the Secretary notifies the State of such
exclusion''.
(b) Conforming Repeal of Mandatory Payment Rule.--Paragraph
(2) of section 1862(e) (42 U.S.C. 1395y(e)) is amended to
read as follows:
``(2) No individual or entity may bill (or collect any
amount from) any individual for any item or service for which
payment is denied under paragraph (1). No person is liable
for payment of any amounts billed for such an item or service
in violation of the previous sentence.''.
(c) Effective Dates.--The amendments made by this section
shall apply to contracts and agreements entered into,
renewed, or extended after the date of the enactment of this
Act, but only with respect to claims submitted on or after
the later of January 1, 1998, or the date such entry,
renewal, or extension becomes effective.
SEC. 4305. EXCLUSION OF ENTITY CONTROLLED BY FAMILY MEMBER OF
A SANCTIONED INDIVIDUAL.
(a) In General.--Section 1128 (42 U.S.C. 1320a-7) is
amended--
(1) in subsection (b)(8)(A)--
(A) by striking ``or'' at the end of clause (i), and
(B) by striking the dash at the end of clause (ii) and
inserting ``; or'', and
(C) by inserting after clause (ii) the following:
``(iii) who was described in clause (i) but is no longer so
described because of a transfer of ownership or control
interest, in anticipation of (or following) a conviction,
assessment, or exclusion described in subparagraph (B)
against the person, to an immediate family member (as defined
in subsection (j)(1)) or a member of the household of the
person (as defined in subsection (j)(2)) who continues to
maintain an interest described in such clause--''; and
(2) by adding after subsection (i) the following new
subsection:
``(j) Definition of Immediate Family Member and Member of
Household.--For purposes of subsection (b)(8)(A)(iii):
``(1) The term `immediate family member' means, with
respect to a person--
``(A) the husband or wife of the person;
``(B) the natural or adoptive parent, child, or sibling of
the person;
``(C) the stepparent, stepchild, stepbrother, or stepsister
of the person;
``(D) the father-, mother-, daughter-, son-, brother-, or
sister-in-law of the person;
``(E) the grandparent or grandchild of the person; and
``(F) the spouse of a grandparent or grandchild of the
person.
``(2) The term `member of the household' means, with
respect to an person, any individual sharing a common abode
as part of a single family unit with the person, including
domestic employees and others who live together as a family
unit, but not including a roomer or boarder.''.
(b) Effective Date.--The amendments made by subsection (a)
shall take effect on the date that is 45 days after the date
of the enactment of this Act.
SEC. 4306. IMPOSITION OF CIVIL MONEY PENALTIES.
(a) Civil Money Penalties for Persons That Contract With
Excluded Individuals.--Section 1128A(a) (42 U.S.C. 1320a-
7a(a)) is amended--
(1) by striking ``or'' at the end of paragraph (4);
(2) by adding ``or'' at the end of paragraph (5); and
(3) by adding after paragraph (5) the following new
paragraph:
``(6) arranges or contracts (by employment or otherwise)
with an individual or entity that the person knows or should
know is excluded from participation in a Federal health care
program (as defined in section 1128B(f)), for the provision
of items or services for which payment may be made under such
a program;''.
(b) Effective Dates.--The amendments made by subsection (a)
shall apply to arrangements and contracts entered into after
the date of the enactment of this Act.
SEC. 4307. DISCLOSURE OF INFORMATION AND SURETY BONDS.
(a) Disclosure of Information and Surety Bond Requirement
for Suppliers of Durable Medical Equipment.--Section 1834(a)
(42 U.S.C. 1395m(a)) is amended by inserting after paragraph
(15) the following new paragraph:
``(16) Conditions for issuance of provider number.--The
Secretary shall not provide for the issuance (or renewal) of
a provider number for a supplier of durable medical
equipment, for purposes of payment under this part for
durable medical equipment furnished by the supplier, unless
the supplier provides the Secretary on a continuing basis
with--
``(A)(i) full and complete information as to the identity
of each person with an ownership or control interest (as
defined in section 1124(a)(3)) in the supplier or in any
subcontractor (as defined by the Secretary in regulations) in
which the supplier directly or indirectly has a 5 percent or
more ownership interest, and
``(ii) to the extent determined to be feasible under
regulations of the Secretary, the name of any disclosing
entity (as defined in section 1124(a)(2)) with respect to
which a person with such an ownership or control interest in
the supplier is a person with such an ownership or control
interest in the disclosing entity; and
``(B) a surety bond in a form specified by the Secretary
and in an amount that is not less than $50,000.
The Secretary may waive the requirement of a bond under
subparagraph (B) in the case of a supplier that provides a
comparable surety bond under State law.''.
(b) Surety Bond Requirement for Home Health Agencies.--
(1) In general.--Section 1861(o) (42 U.S.C. 1395x(o)) is
amended--
(A) in paragraph (7), by inserting ``and including
providing the Secretary on a continuing basis with a surety
bond in a form specified by the Secretary and in an amount
that is not less than $50,000,'' after ``financial security
of the program'', and
(B) by adding at the end the following: ``The Secretary may
waive the requirement of a bond under paragraph (7) in the
case of an agency or organization that provides a comparable
surety bond under State law.''.
[[Page H4459]]
(2) Conforming amendments.--Section 1861(v)(1)(H) (42
U.S.C. 1395x(v)(1)(H)) is amended--
(A) in clause (i), by striking ``the financial security
requirement'' and inserting ``the financial security and
surety bond requirements''; and
(B) in clause (ii), by striking ``the financial security
requirement described in subsection (o)(7) applies'' and
inserting ``the financial security and surety bond
requirements described in subsection (o)(7) apply''.
(3) Reference to current disclosure requirement.--For
provision of current law requiring home health agencies to
disclose information on ownership and control interests, see
section 1124 of the Social Security Act.
(c) Authorizing Application of Disclosure and Surety Bond
Requirements to Ambulance Services and Certain Clinics.--
Section 1834(a)(16) (42 U.S.C. 1395m(a)(16)), as added by
subsection (a), is amended by adding at the end the
following: ``The Secretary, in the Secretary's discretion,
may impose the requirements of the previous sentence with
respect to some or all classes of suppliers of ambulance
services described in section 1861(s)(7) and clinics that
furnish medical and other health services (other than
physicians' services) under this part.''.
(d) Application to Comprehensive Outpatient Rehabilitation
Facilities (CORFs).--Section 1861(cc)(2) (42 U.S.C.
1395x(cc)(2)) is amended--
(1) in subparagraph (I), by inserting before the period at
the end the following: ``and providing the Secretary on a
continuing basis with a surety bond in a form specified by
the Secretary and in an amount that is not less than
$50,000'', and
(2) by adding after and below subparagraph (I) the
following:
``The Secretary may waive the requirement of a bond under
subparagraph (I) in the case of a facility that provides a
comparable surety bond under State law.''.
(e) Application to Rehabilitation Agencies.--Section
1861(p) (42 U.S.C. 1395x(p)) is amended--
(1) in paragraph (4)(A)(v), by inserting after ``as the
Secretary may find necessary,'' the following: ``and provides
the Secretary, to the extent required by the Secretary, on a
continuing basis with a surety bond in a form specified by
the Secretary and in an amount that is not less than
$50,000'', and
(2) by adding at the end the following: ``The Secretary may
waive the requirement of a bond under paragraph (4)(A)(v) in
the case of a clinic or agency that provides a comparable
surety bond under State law.''.
(f) Effective Dates.--(1) The amendment made by subsection
(a) shall apply to suppliers of durable medical equipment
with respect to such equipment furnished on or after January
1, 1998.
(2) The amendments made by subsection (b) shall apply to
home health agencies with respect to services furnished on or
after such date. The Secretary of Health and Human Services
shall modify participation agreements under section
1866(a)(1) of the Social Security Act with respect to home
health agencies to provide for implementation of such
amendments on a timely basis.
(3) The amendments made by subsections (c) through (e)
shall take effect on the date of the enactment of this Act
and may be applied with respect to items and services
furnished on or after the date specified in paragraph (1).
SEC. 4308. PROVISION OF CERTAIN IDENTIFICATION NUMBERS.
(a) Requirements to Disclose Employer Identification
Numbers (EINS) and Social Security Account Numbers (SSNs).--
Section 1124(a)(1) (42 U.S.C. 1320a-3(a)(1)) is amended by
inserting before the period at the end the following: ``and
supply the Secretary with the both the employer
identification number (assigned pursuant to section 6109 of
the Internal Revenue Code of 1986) and social security
account number (assigned under section 205(c)(2)(B)) of the
disclosing entity, each person with an ownership or control
interest (as defined in subsection (a)(3)), and any
subcontractor in which the entity directly or indirectly has
a 5 percent or more ownership interest. Use of the social
security account number under this section shall be limited
to identity verification and identity matching purposes only.
The social security account number shall not be disclosed to
any person or entity other than the Secretary, the Social
Security Administration, or the Secretary of the Treasury, In
obtaining the social security account numbers of the
disclosing entity and other persons described in this
section, the Secretary shall comply with section 7 of the
Privacy Act of 1974 (5 U.S.C. 552a note)''.
(b) Other Medicare Providers.--Section 1124A (42 U.S.C.
1320a-3a) is amended--
(1) in subsection (a)--
(A) by striking ``and'' at the end of paragraph (1);
(B) by striking the period at the end of paragraph (2) and
inserting ``; and''; and
(C) by adding at the end the following new paragraph:
``(3) including the employer identification number
(assigned pursuant to section 6109 of the Internal Revenue
Code of 1986) and social security account number (assigned
under section 205(c)(2)(B)) of the disclosing part B provider
and any person, managing employee, or other entity identified
or described under paragraph (1) or (2).''; and
(2) in subsection (c) by inserting ``(or, for purposes of
subsection (a)(3), any entity receiving payment)'' after ``on
an assignment-related basis''.
(c) Verification by Social Security Administration (SSA).--
Section 1124A (42 U.S.C. 1320a-3a) is amended--
(1) by redesignating subsection (c) as subsection (d); and
(2) by inserting after subsection (b) the following new
subsection:
``(c) Verification.--
``(1) Transmittal by hhs.--The Secretary shall transmit--
``(A) to the Commissioner of Social Security information
concerning each social security account number (assigned
under section 205(c)(2)(B)), and
``(B) to the Secretary of the Treasury information
concerning each employer identification number (assigned
pursuant to section 6109 of the Internal Revenue Code of
1986),
supplied to the Secretary pursuant to subsection (a)(3) or
section 1124(c) to the extent necessary for verification of
such information in accordance with paragraph (2).
``(2) Verification.--The Commissioner of Social Security
and the Secretary of the Treasury shall verify the accuracy
of, or correct, the information supplied by the Secretary to
such official pursuant to paragraph (1), and shall report
such verifications or corrections to the Secretary.
``(3) Fees for verification.--The Secretary shall reimburse
the Commissioner and Secretary of the Treasury, at a rate
negotiated between the Secretary and such official, for the
costs incurred by such official in performing the
verification and correction services described in this
subsection.''.
(d) Report.--Before this subsection shall be effective, the
Secretary of Health and Human Services shall submit to
Congress a report on steps the Secretary has taken to assure
the confidentiality of social security account numbers that
will be provided to the Secretary under the amendments made
by this section. If Congress determines that the Secretary
has not taken adequate steps to assure the confidentiality of
social security account numbers to be provided to the
Secretary under the amendments made by this section, the
amendments made by this section shall not take effect.
(e) Effective Dates.--Subject to subsection (d)--
(1) the amendment made by subsection (a) shall apply to the
application of conditions of participation, and entering into
and renewal of contracts and agreements, occurring more than
90 days after the date of submission of the report under
subsection (d); and
(2) the amendments made by subsection (b) shall apply to
payment for items and services furnished more than 90 days
after the date of submission of such report.
SEC. 4309. ADVISORY OPINIONS REGARDING CERTAIN PHYSICIAN
SELF-REFERRAL PROVISIONS.
Section 1877(g) (42 U.S.C. 1395nn(g)) is amended by adding
at the end the following new paragraph:
``(6) Advisory opinions.--
``(A) In general.--The Secretary shall issue written
advisory opinions concerning whether a referral relating to
designated health services (other than clinical laboratory
services) is prohibited under this section.
``(B) Binding as to secretary and parties involved.--Each
advisory opinion issued by the Secretary shall be binding as
to the Secretary and the party or parties requesting the
opinion.
``(C) Application of certain procedures.--The Secretary
shall, to the extent practicable, apply the regulations
promulgated under section 1128D(b)(5) to the issuance of
advisory opinions under this paragraph.
``(D) Applicability.--This paragraph shall apply to
requests for advisory opinions made during the period
described in section 1128D(b)(6).''.
SEC. 4310. NONDISCRIMINATION IN POST-HOSPITAL REFERRAL TO
HOME HEALTH AGENCIES.
(a) Notification of Availability of Home Health Agencies As
Part of Discharge Planning Process.--Section 1861(ee)(2) (42
U.S.C. 1395x(ee)(2)) is amended--
(1) in subparagraph (D), by inserting before the period the
following: ``, including the availability of home health
services through individuals and entities that participate in
the program under this title and that serve the area in which
the patient resides and that request to be listed by the
hospital as available''; and
(2) by adding at the end the following:
``(H) Consistent with section 1802, the discharge plan
shall--
``(i) not specify or otherwise limit the qualified provider
which may provide post-hospital home health services, and
``(ii) identify (in a form and manner specified by the
Secretary) any home health agency (to whom the individual is
referred) in which the hospital has a disclosable financial
interest (as specified by the Secretary consistent with
section 1866(a)(1)(R)) or which has such an interest in the
hospital.''.
(b) Maintenance and Disclosure of Information on Post-
Hospital Home Health Agencies.--Section 1866(a)(1) (42 U.S.C.
1395cc(a)(1)) is amended--
(1) by striking ``and'' at the end of subparagraph (Q),
(2) by striking the period at the end of subparagraph (R),
and
(3) by adding at the end the following:
[[Page H4460]]
``(S) in the case of a hospital that has a financial
interest (as specified by the Secretary in regulations) in a
home health agency, or in which such an agency has such a
financial interest, or in which another entity has such a
financial interest (directly or indirectly) with such
hospital and such an agency, to maintain and disclose to the
Secretary (in a form and manner specified by the Secretary)
information on--
``(i) the nature of such financial interest,
``(ii) the number of individuals who were discharged from
the hospital and who were identified as requiring home health
services, and
``(iii) the percentage of such individuals who received
such services from such provider (or another such
provider).''.
(c) Disclosure of Information to the Public.--Title XI is
amended by inserting after section 1145 the following new
section:
``public disclosure of certain information on hospital financial
interest and referral patterns
``Sec. 1146. The Secretary shall make available to the
public, in a form and manner specified by the Secretary,
information disclosed to the Secretary pursuant to section
1866(a)(1)(R).''.
(d) Effective Dates.--
(1) The amendments made by subsection (a) shall apply to
discharges occurring on or after 90 days after the date of
the enactment of this Act.
(2) The Secretary of Health and Human Services shall issue
regulations by not later than 1 year after the date of the
enactment of this Act to carry out the amendments made by
subsections (b) and (c) and such amendments shall take effect
as of such date (on or after the issuance of such
regulations) as the Secretary specifies in such regulations.
SEC. 4311. OTHER FRAUD AND ABUSE RELATED PROVISIONS.
(a) Reference Correction.--(1) Section 1128D(b)(2)(D) (42
U.S.C. 1320a-7d(b)(2)(D)), as added by section 205 of the
Health Insurance Portability and Accountability Act of 1996,
is amended by striking ``1128B(b)'' and inserting
``1128A(b)''.
(2) Section 1128E(g)(3)(C) (42 U.S.C. 1320a-7e(g)(3)(C)) is
amended by striking ``Veterans' Administration'' and
inserting ``Department of Veterans Affairs''.
(b) Language in Definition of Conviction.--Section
1128E(g)(5) (42 U.S.C. 1320a-7e(g)(5)), as inserted by
section 221(a) of the Health Insurance Portability and
Accountability Act of 1996, is amended by striking
``paragraph (4)'' and inserting ``paragraphs (1) through
(4)''.
(c) Implementation of Exclusions.--Section 1128 (42 U.S.C.
1320a-7) is amended--
(1) in subsection (a), by striking ``any program under
title XVIII and shall direct that the following individuals
and entities be excluded from participation in any State
health care program (as defined in subsection (h))'' and
inserting ``any Federal health care program (as defined in
section 1128B(f))''; and
(2) in subsection (b), by striking ``any program under
title XVIII and may direct that the following individuals and
entities be excluded from participation in any State health
care program'' and inserting ``any Federal health care
program (as defined in section 1128B(f))''.
(d) Sanctions for Failure to Report.--Section 1128E(b) (42
U.S.C. 1320a-7e(b)), as inserted by section 221(a) of the
Health Insurance Portability and Accountability Act of 1996,
is amended by adding at the end the following:
``(6) Sanctions for failure to report.--
``(A) Health plans.--Any health plan that fails to report
information on an adverse action required to be reported
under this subsection shall be subject to a civil money
penalty of not more than $25,000 for each such adverse action
not reported. Such penalty shall be imposed and collected in
the same manner as civil money penalties under subsection (a)
of section 1128A are imposed and collected under that
section.
``(B) Governmental agencies.--The Secretary shall provide
for a publication of a public report that identifies those
Government agencies that have failed to report information on
adverse actions as required to be reported under this
subsection.''.
(e) Effective Dates.--
(1) In general.--Except as provided in this subsection, the
amendments made by this section shall be effective as if
included in the enactment of the Health Insurance Portability
and Accountability Act of 1996.
(2) Federal health program.--The amendments made by
subsection (c) shall take effect on the date of the enactment
of this Act.
(3) Sanction for failure to report.--The amendment made by
subsection (d) shall apply to failures occurring on or after
the date of the enactment of this Act.
Subtitle E--Prospective Payment Systems
CHAPTER 2--PAYMENT UNDER PART B
Subchapter A--Payment for Hospital Outpatient Department Services
SEC. 4411. ELIMINATION OF FORMULA-DRIVEN OVERPAYMENTS (FDO)
FOR CERTAIN OUTPATIENT HOSPITAL SERVICES.
(a) Elimination of FDO for Ambulatory Surgical Center
Procedures.--Section 1833(i)(3)(B)(i)(II) (42 U.S.C.
1395l(i)(3)(B)(i)(II)) is amended--
(1) by striking ``of 80 percent''; and
(2) by striking the period at the end and inserting the
following: ``, less the amount a provider may charge as
described in clause (ii) of section 1866(a)(2)(A).''.
(b) Elimination of FDO for Radiology Services and
Diagnostic Procedures.--Section 1833(n)(1)(B)(i) (42 U.S.C.
1395l(n)(1)(B)(i)) is amended--
(1) by striking ``of 80 percent'', and
(2) by inserting before the period at the end the
following: ``, less the amount a provider may charge as
described in clause (ii) of section 1866(a)(2)(A)''.
(c) Effective Date.--The amendments made by this section
shall apply to services furnished during portions of cost
reporting periods occurring on or after October 1, 1997.
SEC. 4412. EXTENSION OF REDUCTIONS IN PAYMENTS FOR COSTS OF
HOSPITAL OUTPATIENT SERVICES.
(a) Reduction in Payments for Capital-Related Costs.--
Section 1861(v)(1)(S)(ii)(I) (42 U.S.C.
1395x(v)(1)(S)(ii)(I)) is amended by striking ``through
1998'' and inserting ``through 1999 and during fiscal year
2000 before January 1, 2000''.
(b) Reduction in Payments for Other Costs.--Section
1861(v)(1)(S)(ii)(II) (42 U.S.C. 1395x(v)(1)(S)(ii)(II)) is
amended by striking ``through 1998'' and inserting ``through
1999 and during fiscal year 2000 before January 1, 2000''.
SEC. 4413. PROSPECTIVE PAYMENT SYSTEM FOR HOSPITAL OUTPATIENT
DEPARTMENT SERVICES.
(a) In General.--Section 1833 (42 U.S.C. 1395l) is amended
by adding at the end the following:
``(t) Prospective Payment System for Hospital Outpatient
Department Services.--
``(1) In general.--With respect to hospital outpatient
services designated by the Secretary (in this section
referred to as `covered OPD services') and furnished during a
year beginning with 1999, the amount of payment under this
part shall be determined under a prospective payment system
established by the Secretary in accordance with this
subsection.
``(2) System requirements.--Under the payment system--
``(A) the Secretary shall develop a classification system
for covered OPD services;
``(B) the Secretary may establish groups of covered OPD
services, within the classification system described in
subparagraph (A), so that services classified within each
group are comparable clinically and with respect to the use
of resources;
``(C) the Secretary shall, using data on claims from 1996
and using data from the most recent available cost reports,
establish relative payment weights for covered OPD services
(and any groups of such services described in subparagraph
(B)) based on median hospital costs and shall determine
projections of the frequency of utilization of each such
service (or group of services) in 1999;
``(D) the Secretary shall determine a wage adjustment
factor to adjust the portion of payment and coinsurance
attributable to labor-related costs for relative differences
in labor and labor-related costs across geographic regions in
a budget neutral manner;
``(E) the Secretary shall establish other adjustments, in a
budget neutral manner, as determined to be necessary to
ensure equitable payments, such as outlier adjustments,
adjustments to account for variations in coinsurance payments
for procedures with similar resource costs, or adjustments
for certain classes of hospitals; and
``(F) the Secretary shall develop a method for controlling
unnecessary increases in the volume of covered OPD services.
``(3) Calculation of base amounts.--
``(A) Aggregate amounts that would be payable if
deductibles were disregarded.--The Secretary shall estimate
the total amounts that would be payable from the Trust Fund
under this part for covered OPD services in 1999, determined
without regard to this subsection, as though the deductible
under section 1833(b) did not apply, and as though the
coinsurance described in section 1866(a)(2)(A)(ii) (as in
effect before the date of the enactment of this subsection)
continued to apply.
``(B) Unadjusted copayment amount.--
``(i) In general.--For purposes of this subsection, subject
to clause (ii), the `unadjusted copayment amount' applicable
to a covered OPD service (or group of such services) is 20
percent of national median of the charges for the service (or
services within the group) furnished during 1996, updated to
1999 using the Secretary's estimate of charge growth during
the period.
``(ii) Adjusted to be 20 percent when fully phased in.--If
the pre-deductible payment percentage for a covered OPD
service (or group of such services) furnished in a year would
be equal to or exceed 80 percent, then the unadjusted
copayment amount shall be 25 percent of amount determined
under subparagraph (D)(i).
``(iii) Rules for new services.--The Secretary shall
establish rules for establishment of an unadjusted copayment
amount for a covered OPD service not furnished during 1996,
based upon its classification within a group of such
services.
``(C) Calculation of conversion factors.--
``(I) In general.--The Secretary shall establish a 1999
conversion factor for determining the medicare pre-deductible
OPD fee payment amounts for each covered OPD service (or
group of such services) furnished in 1999. Such conversion
factor shall be established on the basis of the weights and
frequencies described in paragraph (2)(C) and in a manner
such that the sum for all services and
[[Page H4461]]
groups of the products (described in subclause (II) for each
such service or group) equals the total projected amount
described in subparagraph (A).
``(II) Product described.--The product described in this
subclause, for a service or group, is the product of the
medicare pre-deductible OPD fee payment amounts (taking into
account appropriate adjustments described in paragraphs
(2)(D) and (2)(E)) and the frequencies for such service or
group.
``(ii) Subsequent years.--Subject to paragraph (8)(B), the
Secretary shall establish a conversion factor for covered OPD
services furnished in subsequent years in an amount equal to
the conversion factor established under this subparagraph and
applicable to such services furnished in the previous year
increased by the OPD payment increase factor specified under
clause (iii) for the year involved.
``(iii) OPD payment increase factor.--For purposes of this
subparagraph, the `OPD payment increase factor' for services
furnished in a year is equal to the sum of--
``(I) market basket percentage increase (applicable under
section 1886(b)(3)(B)(iii) to hospital discharges occurring
during the fiscal year ending in such year, and
``(II) in the case of a covered OPD service (or group of
such services) furnished in a year in which the pre-
deductible payment percentage would not exceed 80 percent,
3.5 percentage points, but in no case greater than such
number of percentage points as will result in the pre-
deductible payment percentage exceeding 80 percent.
In applying the previous sentence for years beginning with
2000, the Secretary may substitute for the market basket
percentage increase under subclause (I) an annual percentage
increase that is computed and applied with respect to covered
OPD services furnished in a year in the same manner as the
market basket percentage increase is determined and applied
to inpatient hospital services for discharges occurring in a
fiscal year.
``(D) Pre-deductible payment percentage.--The pre-
deductible payment percentage for a covered OPD service (or
group of such services) furnished in a year is equal to the
ratio of--
``(i) the conversion factor established under subparagraph
(C) for the year, multiplied by the weighting factor
established under paragraph (2)(C) for the service (or
group), to
``(ii) the sum of the amount determined under clause (i)
and the unadjusted copayment amount determined under
subparagraph (B) for such service or group.
``(E) Calculation of medicare opd fee schedule amounts.--
The Secretary shall compute a medicare OPD fee schedule
amount for each covered OPD service (or group of such
services) furnished in a year, in an amount equal to the
product of--
``(i) the conversion factor computed under subparagraph (C)
for the year, and
``(ii) the relative payment weight (determined under
paragraph (2)(C)) for the service or group.
``(4) Medicare payment amount.--The amount of payment made
from the Trust Fund under this part for a covered OPD service
(and such services classified within a group) furnished in a
year is determined as follows:
``(A) Fee schedule and copayment amount.--Add (i) the
medicare OPD fee schedule amount (computed under paragraph
(3)(E)) for the service or group and year, and (ii) the
unadjusted copayment amount (determined under paragraph
(3)(B)) for the service or group.
``(B) Subtract applicable deductible.--Reduce the adjusted
sum by the amount of the deductible under section 1833(b), to
the extent applicable.
``(C) Apply payment proportion to remainder.--Multiply the
amount so determined under subparagraph (B) by the pre-
deductible payment percentage (as determined under paragraph
(3)(D)) for the service or group and year involved.
``(D) Labor-related adjustment.--The amount of payment is
the product determined under subparagraph (C) with the labor-
related portion of such product adjusted for relative
differences in the cost of labor and other factors determined
by the Secretary, as computed under paragraph (2)(D).
``(5) Copayment amount.--
``(A) In general.--Except as provided in subparagraph (B),
the copayment amount under this subsection is determined as
follows:
``(i) Unadjusted copayment.--Compute the amount by which
the amount described in paragraph (4)(B) exceeds the amount
of payment determined under paragraph (4)(C).
``(ii) Labor adjustment.--The copayment amount is the
difference determined under clause (i) with the labor-related
portion of such difference adjusted for relative differences
in the cost of labor and other factors determined by the
Secretary, as computed under paragraphs (2)(D). The
adjustment under this clause shall be made in a manner that
does not result in any change in the aggregate copayments
made in any year if the adjustment had not been made.
``(B) Election to offer reduced copayment amount.--The
Secretary shall establish a procedure under which a hospital,
before the beginning of a year (beginning with 1999), may
elect to reduce the copayment amount otherwise established
under subparagraph (A) for some or all covered OPD services
to an amount that is not less than 25 percent of the medicare
OPD fee schedule amount (computed under paragraph (3)(E)) for
the service involved, adjusted for relative differences in
the cost of labor and other factors determined by the
Secretary, as computed under subparagraphs (D) and (E) of
paragraph (2). Under such procedures, such reduced copayment
amount may not be further reduced or increased during the
year involved and the hospital may disseminate information on
the reduction of copayment amount effected under this
subparagraph.
``(C) No impact on deductibles.--Nothing in this paragraph
shall be construed as affecting a hospital's authority to
waive the charging of a deductible under section 1833(b).
``(6) Periodic review and adjustments components of
prospective payment system.--
``(A) Periodic review.--The Secretary may periodically
review and revise the groups, the relative payment weights,
and the wage and other adjustments described in paragraph (2)
to take into account changes in medical practice, changes in
technology, the addition of new services, new cost data, and
other relevant information and factors.
``(B) Budget neutrality adjustment.--If the Secretary makes
adjustments under subparagraph (A), then the adjustments for
a year may not cause the estimated amount of expenditures
under this part for the year to increase or decrease from the
estimated amount of expenditures under this part that would
have been made if the adjustments had not been made.
``(C) Update factor.--If the Secretary determines under
methodologies described in subparagraph (2)(F) that the
volume of services paid for under this subsection increased
beyond amounts established through those methodologies, the
Secretary may appropriately adjust the update to the
conversion factor otherwise applicable in a subsequent year.
``(7) Special rule for ambulance services.--The Secretary
shall pay for hospital outpatient services that are ambulance
services on the basis described in the matter in subsection
(a)(1) preceding subparagraph (A).
``(8) Special rules for certain hospitals.--In the case of
hospitals described in section 1886(d)(1)(B)(v)--
``(A) the system under this subsection shall not apply to
covered OPD services furnished before January 1, 2000; and
``(B) the Secretary may establish a separate conversion
factor for such services in a manner that specifically takes
into account the unique costs incurred by such hospitals by
virtue of their patient population and service intensity.
``(9) Limitation on review.--There shall be no
administrative or judicial review under section 1869, 1878,
or otherwise of--
``(A) the development of the classification system under
paragraph (2), including the establishment of groups and
relative payment weights for covered OPD services, of wage
adjustment factors, other adjustments, and methods described
in paragraph (2)(F);
``(B) the calculation of base amounts under paragraph (3);
``(C) periodic adjustments made under paragraph (6); and
``(D) the establishment of a separate conversion factor
under paragraph (8)(B).''.
(b) Coinsurance.--Section 1866(a)(2)(A)(ii) (42 U.S.C.
1395cc(a)(2)(A)(ii)) is amended by adding at the end the
following: ``In the case of items and services for which
payment is made under part B under the prospective payment
system established under section 1833(t), clause (ii) of the
first sentence shall be applied by substituting for 20
percent of the reasonable charge, the applicable copayment
amount established under section 1833(t)(5).''.
(c) Treatment of Reduction in Copayment Amount.--Section
1128A(i)(6) (42 U.S.C. 1320a-7a(i)(6)) is amended--
(1) by striking ``or'' at the end of subparagraph (B),
(2) by striking the period at the end of subparagraph (C)
and inserting ``; or'', and
(3) by adding at the end the following new subparagraph:
``(D) a reduction in the copayment amount for covered OPD
services under section 1833(t)(5)(B).''.
(d) Conforming Amendments.--
(1) Approved asc procedures performed in hospital
outpatient departments.--
(A)(i) Section 1833(i)(3)(A) (42 U.S.C. 13951(i)(3)(A)) is
amended--
(I) by inserting ``before January 1, 1999,'' after
``furnished'', and
(II) by striking ``in a cost reporting period''.
(ii) The amendment made by clause (i) shall apply to
services furnished on or after January 1, 1999.
(B) Section 1833(a)(4) (42 U.S.C. 13951(a)(4)) is amended
by inserting ``or subsection (t)'' before the semicolon.
(2) Radiology and other diagnostic procedures.--
(A) Section 1833(n)(1)(A) (42 U.S.C. 1395l(n)(1)(A)) is
amended by inserting ``and before January 1, 1999,'' after
``October 1, 1988,'' and after ``October 1, 1989,''.
(B) Section 1833(a)(2)(E) (42 U.S.C. 1395l(a)(2)(E)) is
amended by inserting ``or, for services or procedures
performed on or after January 1, 1999, (t)'' before the
semicolon.
(3) Other hospital outpatient services.--Section -
1833(a)(2)(B) (42 U.S.C. 1395l(a)(2)(B)) is amended--
(A) in clause (i), by inserting ``furnished before January
1, 1999,'' after ``(i)'',
[[Page H4462]]
(B) in clause (ii), by inserting ``before January 1,
1999,'' after ``furnished'',
(C) by redesignating clause (iii) as clause (iv),and
(D) by inserting after clause (ii), the following new
clause:
``(iii) if such services are furnished on or after January
1, 1999, the amount determined under subsection (t), or''.
Subchapter B--Rehabilitation Services
SEC. 4421. REHABILITATION AGENCIES AND SERVICES.
(a) Payment Based on Fee Schedule.--
(1) Special payment rules.--Section 1833(a) (42 U.S.C.
1395l(a)) is amended--
(A) in paragraph (2) in the matter before subparagraph (A),
by inserting ``(C),'' before ``(D)'';
(B) in paragraph (6), by striking ``and'' at the end;
(C) in paragraph (7), by striking the period at the end and
inserting ``; and'';
(D) by adding at the end the following new paragraph:
``(8) in the case of services described in section
1832(a)(2)(C) (that are not described in section
1832(a)(2)(B)), the amounts described in section 1834(k).''.
(2) Payment rates.--Section 1834 (42 U.S.C. 1395m) is
amended by adding at the end the following new subsection:
``(k) Payment for Outpatient Therapy Services.--
``(1) In general.--With respect to outpatient physical
therapy services (which includes outpatient speech-language
pathology services) and outpatient occupational therapy
services for which payment is determined under this
subsection, the payment basis shall be--
``(A) for services furnished during 1998, the amount
determined under paragraph (2); or
``(B) for services furnished during a subsequent year, 80
percent of the lesser of--
``(i) the actual charge for the services, or
``(ii) the applicable fee schedule amount (as defined in
paragraph (3)) for the services.
``(2) Payment in 1998 based upon charges or adjusted
reasonable costs.--The amount under this paragraph for
services is the lesser of--
``(A) the charges imposed for the services, or
``(B) the adjusted reasonable costs (as defined in
paragraph (4)) for the services,
less 20 percent of the amount of the charges imposed for such
services.
``(3) Applicable fee schedule amount.--In this paragraph,
the term `applicable fee schedule amount' means, with respect
to services furnished in a year, the fee schedule amount
established under section 1848 for such services furnished
during the year or, if there is no such fee schedule amount
established for such services, for such comparable services
as the Secretary specifies.
``(4) Adjusted reasonable costs.--In paragraph (2), the
term `adjusted reasonable costs' means reasonable costs
determined reduced by--
``(A) 5.8 percent of the reasonable costs for operating
costs, and
``(B) 10 percent of the reasonable costs for capital costs.
``(5) Uniform coding.--For claims for services submitted on
or after April 1, 1998, for which the amount of payment is
determined under this subsection, the claim shall include a
code (or codes) under a uniform coding system specified by
the Secretary that identifies the services furnished.
``(6) Restraint on billing.--The provisions of
subparagraphs (A) and (B) of section 1842(b)(18) shall apply
to therapy services for which payment is made under this
subsection in the same manner as they apply to services
provided by a practitioner described in section
1842(b)(18)(C).''.
(b) Application of Standards to Outpatient Occupational and
Physical Therapy Services Provided As an Incident to a
Physician's Professional Services.--Section 1862(a), as
amended by section 4401(b), (42 U.S.C. 1395y(a)) is amended--
(1) by striking ``or'' at the end of paragraph (16);
(2) by striking the period at the end of paragraph (17) and
inserting ``; or''; and
(3) by inserting after paragraph (17) the following:
``(18) in the case of outpatient occupational therapy
services or outpatient physical therapy services furnished as
an incident to a physician's professional services (as
described in section 1861(s)(2)(A)), that do not meet the
standards and conditions under the second sentence of section
1861(g) or 1861(p) as such standards and conditions would
apply to such therapy services if furnished by a
therapist.''.
(c) Applying Financial Limitation to All Rehabilitation
Services.--Section 1833(g) (42 U.S.C. 1395l(g)) is amended--
(1) in the first sentence, by striking ``services described
in the second sentence of section 1861(p)'' and inserting
``physical therapy services of the type described in section
1861(p) (regardless of who furnishes the services or whether
the services may be covered as physicians' services so long
as the services are furnished other than in a hospital
setting)'', and
(2) in the second sentence, by striking ``outpatient
occupational therapy services which are described in the
second sentence of section 1861(p) through the operation of
section 1861(g)'' and inserting ``occupational therapy
services (of the type that are described in section 1861(p)
through the operation of section 1861(g)), regardless of who
furnishes the services or whether the services may be covered
as physicians' services so long as the services are furnished
other than in a hospital setting''.
(d) Effective Date.--The amendments made by this section
apply to services furnished on or after January 1, 1998;
except that the amendments made by subsection (c) apply to
services furnished on or after January 1, 1999.
SEC. 4422. COMPREHENSIVE OUTPATIENT REHABILITATION FACILITIES
(CORF).
(a) Payment Based on Fee Schedule.--
(1) Special payment rules.--Section 1833(a) (42 U.S.C.
1395l(a)), as amended by section 4421(a), is amended--
(A) in paragraph (3), by striking ``subparagraphs (D) and
(E) of section 1832(a)(2)'' and inserting ``section
1832(a)(2)(E)'';
(B) in paragraph (7), by striking ``and'' at the end;
(C) in paragraph (8), by striking the period at the end and
inserting ``; and'';
(D) by adding at the end the following new paragraph:
``(9) in the case of services described in section
1832(a)(2)(E), the amounts described in section 1834(k).''.
(2) Payment rates.--Section 1834(k) (42 U.S.C. 1395m(k)),
as added by section 4421(a), is amended--
(A) in the heading, by inserting ``and Comprehensive
Outpatient Rehabilitation Facility Services'' after ``Therapy
Services''; and
(B) in paragraph (1), by inserting ``and with respect to
comprehensive outpatient rehabilitation facility services''
after ``occupational therapy services''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply to services furnished on or after January 1,
1998, and to portions of cost reporting periods occurring on
or after such date.
Subchapter C--Ambulance Services
SEC. 4431. PAYMENTS FOR AMBULANCE SERVICES.
(a) Interim Reductions.--
(1) Payments determined on reasonable cost basis.--Section
1861(v)(1) (42 U.S.C. 1395x(v)(1)) is amended by adding at
the end the following new subparagraph:
``(U) In determining the reasonable cost of ambulance
services (as described in subsection (s)(7)) provided during
a fiscal year (beginning with fiscal year 1998 and ending
with fiscal year 2002), the Secretary shall not recognize the
costs per trip in excess of costs recognized as reasonable
for ambulance services provided on a per trip basis during
the previous fiscal year after application of this
subparagraph, increased by the percentage increase in the
consumer price index for all urban consumers (U.S. city
average) as estimated by the Secretary for the 12-month
period ending with the midpoint of the fiscal year involved
reduced (in the case of each of fiscal years 1998 and 1999)
by 1 percentage point.''.
(2) Payments determined on reasonable charge basis.--
Section 1842(b) (42 U.S.C. 1395u(b)) is amended by adding at
the end the following new paragraph:
``(19) For purposes of section 1833(a)(1), the reasonable
charge for ambulance services (as described in section
1861(s)(7)) provided during a fiscal year (beginning with
fiscal year 1998 and ending with fiscal year 2002) may not
exceed the reasonable charge for such services provided
during the previous fiscal year after the application of this
subparagraph, increased by the percentage increase in the
consumer price index for all urban consumers (U.S. city
average) as estimated by the Secretary for the 12-month
period ending with the midpoint of the year involved reduced
(in the case of each of fiscal years 1998 and 1999) by 1
percentage point.''.
(b) Establishment of Prospective Fee Schedule.--
(1) Payment in accordance with fee schedule.--Section
1833(a)(1) (42 U.S.C. 1395l(a)(1)), as amended by section
4619(b)(1), is amended--
(A) by striking ``and (P)'' and inserting ``(P)''; and
(B) by striking the semicolon at the end and inserting the
following: ``, and (Q) with respect to ambulance service, the
amounts paid shall be 80 percent of the lesser of the actual
charge for the services or the amount determined by a fee
schedule established by the Secretary under section
1834(l);''.
(2) Establishment of schedule.--Section 1834 (42 U.S.C.
1395m), as amended by section 4421(a)(2), is amended by
adding at the end the following new subsection:
``(l) Establishment of Fee Schedule for Ambulance
Services.--
``(1) In general.--The Secretary shall establish a fee
schedule for payment for ambulance services under this part
through a negotiated rulemaking process described in title 5,
United States Code, and in accordance with the requirements
of this subsection.
``(2) Considerations.--In establishing such fee schedule
the Secretary shall--
``(A) establish mechanisms to control increases in
expenditures for ambulance services under this part;
``(B) establish definitions for ambulance services which
link payments to the type of services provided;
``(C) consider appropriate regional and operational
differences;
``(D) consider adjustments to payment rates to account for
inflation and other relevant factors; and
``(E) phase in the application of the payment rates under
the fee schedule in an efficient and fair manner.
[[Page H4463]]
``(3) Savings.--In establishing such fee schedule the
Secretary shall--
``(A) ensure that the aggregate amount of payments made for
ambulance services under this part during 2000 does not
exceed the aggregate amount of payments which would have been
made for such services under this part during such year if
the amendments made by section 4431 of the Balanced Budget
Act of 1997 had not been made; and
``(B) set the payment amounts provided under the fee
schedule for services furnished in 2001 and each subsequent
year at amounts equal to the payment amounts under the fee
schedule for service furnished during the previous year,
increased by the percentage increase in the consumer price
index for all urban consumers (U.S. city average) for the 12-
month period ending with June of the previous year.
``(4) Consultation.--In establishing the fee schedule for
ambulance services under this subsection, the Secretary shall
consult with various national organizations representing
individuals and entities who furnish and regulate ambulance
services and share with such organizations relevant data in
establishing such schedule.
``(5) Limitation on review.--There shall be no
administrative or judicial review under section 1869 or
otherwise of the amounts established under the fee schedule
for ambulance services under this subsection, including
matters described in paragraph (2).
``(6) Restraint on billing.--The provisions of
subparagraphs (A) and (B) of section 1842(b)(18) shall apply
to ambulance services for which payment is made under this
subsection in the same manner as they apply to services
provided by a practitioner described in section
1842(b)(18)(C).''.
(3) Effective date.--The amendments made by this section
apply to ambulance services furnished on or after January 1,
2000.
(c) Authorizing Payment for Paramedic Intercept Service
Providers in Rural Communities.--In promulgating regulations
to carry out section 1861(s)(7) of the Social Security Act
(42 U.S.C. 1395x(s)(7)) with respect to the coverage of
ambulance service, the Secretary of Health and Human Services
may include coverage of advanced life support services (in
this subsection referred to as ``ALS intercept services'')
provided by a paramedic intercept service provider in a rural
area if the following conditions are met:
(1) The ALS intercept services are provided under a
contract with one or more volunteer ambulance services and
are medically necessary based on the health condition of the
individual being transported.
(2) The volunteer ambulance service involved--
(A) is certified as qualified to provide ambulance service
for purposes of such section,
(B) provides only basic life support services at the time
of the intercept, and
(C) is prohibited by State law from billing for any
services.
(3) The entity supplying the ALS intercept services--
(A) is certified as qualified to provide such services
under the medicare program under title XVIII of the Social
Security Act, and
(B) bills all recipients who receive ALS intercept services
from the entity, regardless of whether or not such recipients
are medicare beneficiaries.
SEC. 4432. DEMONSTRATION OF COVERAGE OF AMBULANCE SERVICES
UNDER MEDICARE THROUGH CONTRACTS WITH UNITS OF
LOCAL GOVERNMENT.
(a) Demonstration Project Contracts with Local
Governments.--The Secretary of Health and Human Services
shall establish up to 3 demonstration projects under which,
at the request of a county or parish, the Secretary enters
into a contract with the county or parish under which--
(1) the county or parish furnishes (or arranges for the
furnishing) of ambulance services for which payment may be
made under part B of title XVIII of the Social Security Act
for individuals residing in the county or parish who are
enrolled under such part, except that the county or parish
may not enter into the contract unless the contract covers at
least 80 percent of the individuals residing in the county or
parish who are enrolled under such part;
(2) any individual or entity furnishing ambulance services
under the contract meets the requirements otherwise
applicable to individuals and entities furnishing such
services under such part; and
(3) for each month during which the contract is in effect,
the Secretary makes a capitated payment to the county or
parish in accordance with subsection (b).
The projects may extend over a period of not to exceed 3
years each.
(b) Amount of Payment.--
(1) In general.--The amount of the monthly payment made for
months occurring during a calendar year to a county or parish
under a demonstration project contract under subsection (a)
shall be equal to the product of--
(A) the Secretary's estimate of the number of individuals
covered under the contract for the month; and
(B) \1/12\ of the capitated payment rate for the year
established under paragraph (2).
(2) Capitated payment rate defined.--In this subsection,
the ``capitated payment rate'' applicable to a contract under
this subsection for a calendar year is equal to 95 percent
of--
(A) for the first calendar year for which the contract is
in effect, the average annual per capita payment made under
part B of title XVIII of the Social Security Act with respect
to ambulance services furnished to such individuals during
the 3 most recent calendar years for which data on the amount
of such payment is available; and
(B) for a subsequent year, the amount provided under this
paragraph for the previous year increased by the percentage
increase in the consumer price index for all urban consumers
(U.S. city average) for the 12-month period ending with June
of the previous year.
(c) Other Terms of Contract.--The Secretary and the county
or parish may include in a contract under this section such
other terms as the parties consider appropriate, including--
(1) covering individuals residing in additional counties or
parishes (under arrangements entered into between such
counties or parishes and the county or parish involved);
(2) permitting the county or parish to transport
individuals to non-hospital providers if such providers are
able to furnish quality services at a lower cost than
hospital providers; or
(3) implementing such other innovations as the county or
parish may propose to improve the quality of ambulance
services and control the costs of such services.
(d) Contract Payments in Lieu of Other Benefits.--Payments
under a contract to a county or parish under this section
shall be instead of the amounts which (in the absence of the
contract) would otherwise be payable under part B of title
XVIII of the Social Security Act for the services covered
under the contract which are furnished to individuals who
reside in the county or parish.
(e) Report on Effects of Capitated Contracts.--
(1) Study.--The Secretary shall evaluate the demonstration
projects conducted under this section. Such evaluation shall
include an analysis of the quality and cost-effectiveness of
ambulance services furnished under the projects.
(2) Report.--Not later than January 1, 2000, the Secretary
shall submit a report to Congress on the study conducted
under paragraph (1), and shall include in the report such
recommendations as the Secretary considers appropriate,
including recommendations regarding modifications to the
methodology used to determine the amount of payments made
under such contracts and extending or expanding such
projects.
CHAPTER 3--PAYMENT UNDER PARTS A AND B
SEC. 4441. PROSPECTIVE PAYMENT FOR HOME HEALTH SERVICES.
(a) In General.--Title XVIII (42 U.S.C. 1395 et seq.), as
amended by section 4011, is amended by adding at the end the
following new section:
``prospective payment for home health services
``Sec. 1895. (a) In General.--Notwithstanding section
1861(v), the Secretary shall provide, for cost reporting
periods beginning on or after October 1, 1999, for payments
for home health services in accordance with a prospective
payment system established by the Secretary under this
section.
``(b) System of Prospective Payment for Home Health
Services.--
``(1) In general.--The Secretary shall establish under this
subsection a prospective payment system for payment for all
costs of home health services. Under the system under this
subsection all services covered and paid on a reasonable cost
basis under the medicare home health benefit as of the date
of the enactment of the this section, including medical
supplies, shall be paid for on the basis of a prospective
payment amount determined under this subsection and
applicable to the services involved. In implementing the
system, the Secretary may provide for a transition (of not
longer than 4 years) during which a portion of such payment
is based on agency-specific costs, but only if such
transition does not result in aggregate payments under this
title that exceed the aggregate payments that would be made
if such a transition did not occur.
``(2) Unit of payment.--In defining a prospective payment
amount under the system under this subsection, the Secretary
shall consider an appropriate unit of service and the number,
type, and duration of visits provided within that unit,
potential changes in the mix of services provided within that
unit and their cost, and a general system design that
provides for continued access to quality services.
``(3) Payment basis.--
``(A) Initial basis.--
``(i) In general.--Under such system the Secretary shall
provide for computation of a standard prospective payment
amount (or amounts). Such amount (or amounts) shall initially
be based on the most current audited cost report data
available to the Secretary and shall be computed in a manner
so that the total amounts payable under the system for fiscal
year 2000 shall be equal to the total amount that would have
been made if the system had not been in effect but if the
reduction in limits described in clause (ii) had been in
effect. Such amount shall be standardized in a manner that
eliminates the effect of variations in relative case mix and
wage levels among different home health agencies in a budget
neutral manner consistent with the case mix and wage level
adjustments provided under paragraph (4)(A). Under the
system, the Secretary may recognize regional differences or
differences based
[[Page H4464]]
upon whether or not the services or agency are in an
urbanized area.
``(ii) Reduction.--The reduction described in this clause
is a reduction by 15 percent in the cost limits and per
beneficiary limits described in section 1861(v)(1)(L), as
those limits are in effect on September 30, 1999.
``(B) Annual update.--
``(i) In general.--The standard prospective payment amount
(or amounts) shall be adjusted for each fiscal year
(beginning with fiscal year 2001) in a prospective manner
specified by the Secretary by the home health market basket
percentage increase applicable to the fiscal year involved.
``(ii) Home health market basket percentage increase.--For
purposes of this subsection, the term `home health market
basket percentage increase' means, with respect to a fiscal
year, a percentage (estimated by the Secretary before the
beginning of the fiscal year) determined and applied with
respect to the mix of goods and services included in home
health services in the same manner as the market basket
percentage increase under section 1886(b)(3)(B)(iii) is
determined and applied to the mix of goods and services
comprising inpatient hospital services for the fiscal year.
``(C) Adjustment for outliers.--The Secretary shall reduce
the standard prospective payment amount (or amounts) under
this paragraph applicable to home health services furnished
during a period by such proportion as will result in an
aggregate reduction in payments for the period equal to the
aggregate increase in payments resulting from the application
of paragraph (5) (relating to outliers).
``(4) Payment computation.--
``(A) In general.--The payment amount for a unit of home
health services shall be the applicable standard prospective
payment amount adjusted as follows:
``(i) Case mix adjustment.--The amount shall be adjusted by
an appropriate case mix adjustment factor (established under
subparagraph (B)).
``(ii) Area wage adjustment.--The portion of such amount
that the Secretary estimates to be attributable to wages and
wage-related costs shall be adjusted for geographic
differences in such costs by an area wage adjustment factor
(established under subparagraph (C)) for the area in which
the services are furnished or such other area as the
Secretary may specify.
``(B) Establishment of case mix adjustment factors.--The
Secretary shall establish appropriate case mix adjustment
factors for home health services in a manner that explains a
significant amount of the variation in cost among different
units of services.
``(C) Establishment of area wage adjustment factors.--The
Secretary shall establish area wage adjustment factors that
reflect the relative level of wages and wage-related costs
applicable to the furnishing of home health services in a
geographic area compared to the national average applicable
level. Such factors may be the factors used by the Secretary
for purposes of section 1886(d)(3)(E).
``(5) Outliers.--The Secretary may provide for an addition
or adjustment to the payment amount otherwise made in the
case of outliers because of unusual variations in the type or
amount of medically necessary care. The total amount of the
additional payments or payment adjustments made under this
paragraph with respect to a fiscal year may not exceed 5
percent of the total payments projected or estimated to be
made based on the prospective payment system under this
subsection in that year.
``(6) Proration of prospective payment amounts.--If a
beneficiary elects to transfer to, or receive services from,
another home health agency within the period covered by the
prospective payment amount, the payment shall be prorated
between the home health agencies involved.
``(c) Requirements for Payment Information.--With respect
to home health services furnished on or after October 1,
1998, no claim for such a service may be paid under this
title unless--
``(1) the claim has the unique identifier (provided under
section 1842(r)) for the physician who prescribed the
services or made the certification described in section
1814(a)(2) or 1835(a)(2)(A); and
``(2) in the case of a service visit described in paragraph
(1), (2), (3), or (4) of section 1861(m), the claim has
information (coded in an appropriate manner) on the length of
time of the service visit, as measured in 15 minute
increments.
``(d) Limitation on Review.--There shall be no
administrative or judicial review under section 1869, 1878,
or otherwise of--
``(1) the establishment of a transition period under
subsection (b)(1);
``(2) the definition and application of payment units under
subsection (b)(2);
``(3) the computation of initial standard prospective
payment amounts under subsection (b)(3)(A) (including the
reduction described in clause (ii) of such subsection);
``(4) the adjustment for outliers under subsection
(b)(3)(C);
``(5) case mix and area wage adjustments under subsection
(b)(4);
``(6) any adjustments for outliers under subsection (b)(5);
and
``(7) the amounts or types of exceptions or adjustments
under subsection (b)(7).''.
(b) Elimination of Periodic Interim Payments for Home
Health Agencies.--Section 1815(e)(2) (42 U.S.C. 1395g(e)(2))
is amended--
(1) by inserting ``and'' at the end of subparagraph (C),
(2) by striking subparagraph (D), and
(3) by redesignating subparagraph (E) as subparagraph (D).
(c) Conforming Amendments.--
(1) Payments under part a.--Section 1814(b) (42 U.S.C.
1395f(b)) is amended in the matter preceding paragraph (1) by
striking ``and 1886'' and inserting ``1886, and 1895''.
(2) Treatment of items and services paid under part b.--
(A) Payments under part b.--Section 1833(a)(2) (42 U.S.C.
1395l(a)(2)) is amended--
(i) by amending subparagraph (A) to read as follows:
``(A) with respect to home health services (other than a
covered osteoporosis drug) (as defined in section 1861(kk)),
the amount determined under the prospective payment system
under section 1895;'';
(ii) by striking ``and'' at the end of subparagraph (E);
(iii) by adding ``and'' at the end of subparagraph (F); and
(iv) by adding at the end the following new subparagraph:
``(G) with respect to items and services described in
section 1861(s)(10)(A), the lesser of--
``(i) the reasonable cost of such services, as determined
under section 1861(v), or
``(ii) the customary charges with respect to such services,
or, if such services are furnished by a public provider of
services, or by another provider which demonstrates to the
satisfaction of the Secretary that a significant portion of
its patients are low-income (and requests that payment be
made under this provision), free of charge or at nominal
charges to the public, the amount determined in accordance
with section 1814(b)(2);''.
(B) Requiring payment for all items and services to be made
to agency.--
(i) In general.--The first sentence of section 1842(b)(6)
(42 U.S.C. 1395u(b)(6)), as amended by section 4401(b)(2), is
amended--
(I) by striking ``and (E)'' and inserting ``(E)''; and
(II) by striking the period at the end and inserting the
following: ``, and (F) in the case of home health services
furnished to an individual who (at the time the item or
service is furnished) is under a plan of care of a home
health agency, payment shall be made to the agency (without
regard to whether or not the item or service was furnished by
the agency, by others under arrangement with them made by the
agency, or when any other contracting or consulting
arrangement, or otherwise).''.
(ii) Conforming amendment.--Section 1832(a)(1) (42 U.S.C.
1395k(a)(1)), as amended by section 4401(b), is amended by
striking ``and section 1842(b)(6)(E)'' and inserting ``,
section 1842(b)(6)(E), and section 1842(b)(6)(F)''.
(C) Exclusions from coverage.--Section 1862(a) (42 U.S.C.
1395y(a)), as amended by sections 4401(b) and 4421(b), is
amended--
(i) by striking ``or'' at the end of paragraph (17);
(ii) by striking the period at the end of paragraph (18)
and inserting ``; or''; and
(iii) inserting after paragraph (18) the following new
paragraph:
``(19) where such expenses are for home health services
furnished to an individual who is under a plan of care of the
home health agency if the claim for payment for such services
is not submitted by the agency.''.
(d) Effective Date.--Except as otherwise provided, the
amendments made by this section shall apply to cost reporting
periods beginning on or after October 1, 1999.
Subtitle G--Provisions Relating to Part B Only
CHAPTER 1--PHYSICIANS' SERVICES
SEC. 4601. ESTABLISHMENT OF SINGLE CONVERSION FACTOR FOR
1998.
(a) In General.--Section 1848(d)(1) (42 U.S.C. 1395w-
4(d)(1)) is amended--
(1) by redesignating subparagraph (C) as subparagraph (D),
and
(2) by inserting after subparagraph (B) the following:
``(C) Special rules for 1998.--The single conversion factor
for 1998 under this subsection shall be the conversion factor
for primary care services for 1997, increased by the
Secretary's estimate of the weighted average of the three
separate updates that would otherwise occur were it not for
the enactment of chapter 1 of subtitle G of title X of the
Balanced Budget Act of 1997.''.
(b) Conforming Amendments.--Section 1848 (42 U.S.C. 1395w-
4) is amended--
(1) by striking ``(or factors)'' each place it appears in
subsection (d)(1)(A) and (d)(1)(D)(ii) (as redesignated by
subsection (a)(1)),
(2) in subsection (d)(1)(A), by striking ``or updates'',
(3) in subsection (d)(1)(D) (as redesignated by subsection
(a)(1)), by striking ``(or updates)'' each place it appears,
and
(4) in subsection (i)(1)(C), by striking ``conversion
factors'' and inserting ``the conversion factor''.
SEC. 4602. ESTABLISHING UPDATE TO CONVERSION FACTOR TO MATCH
SPENDING UNDER SUSTAINABLE GROWTH RATE.
(a) Update.--
(1) In general.--Section 1848(d)(3) (42 U.S.C. 1395w-
4(d)(3)) is amended to read as follows:
``(3) Update.--
``(A) In general.--Unless otherwise provided by law,
subject to subparagraph (D)
[[Page H4465]]
and the budget-neutrality factor determined by the Secretary
under subsection (c)(2)(B)(ii), the update to the single
conversion factor established in paragraph (1)(C) for a year
beginning with 1999 is equal to the product of--
``(i) 1 plus the Secretary's estimate of the percentage
increase in the MEI (as defined in section 1842(i)(3)) for
the year (divided by 100), and
``(ii) 1 plus the Secretary's estimate of the update
adjustment factor for the year (divided by 100),
minus 1 and multiplied by 100.
``(B) Update adjustment factor.--For purposes of
subparagraph (A)(ii), the `update adjustment factor' for a
year is equal to the quotient (as estimated by the Secretary)
of--
``(i) the difference between (I) the sum of the allowed
expenditures for physicians' services (as determined under
subparagraph (C)) during the period beginning July 1, 1997,
and ending on June 30 of the year involved, and (II) the sum
of the amount of actual expenditures for physicians' services
furnished during the period beginning July 1, 1997, and
ending on June 30 of the preceding year; divided by
``(ii) the actual expenditures for physicians' services for
the 12-month period ending on June 30 of the preceding year,
increased by the sustainable growth rate under subsection (f)
for the fiscal year which begins during such 12-month period.
``(C) Determination of allowed expenditures.--For purposes
of this paragraph, the allowed expenditures for physicians'
services for the 12-month period ending with June 30 of--
``(i) 1997 is equal to the actual expenditures for
physicians' services furnished during such 12-month period,
as estimated by the Secretary; or
``(ii) a subsequent year is equal to the allowed
expenditures for physicians' services for the previous year,
increased by the sustainable growth rate under subsection (f)
for the fiscal year which begins during such 12-month period.
``(D) Restriction on variation from medicare economic
index.--Notwithstanding the amount of the update adjustment
factor determined under subparagraph (B) for a year, the
update in the conversion factor under this paragraph for the
year may not be--
``(i) greater than 100 times the following amount: (1.03 +
(MEI percentage/100)) -1; or
``(ii) less than 100 times the following amount: (0.93 +
(MEI percentage/100)) -1,
where `MEI percentage' means the Secretary's estimate of the
percentage increase in the MEI (as defined in section
1842(i)(3)) for the year involved.''.
(2) Effective date.--The amendment made by paragraph (1)
shall apply to the update for years beginning with 1999.
(b) Elimination of Report.--Section 1848(d) (42 U.S.C.
1395w-4(d)) is amended by striking paragraph (2).
SEC. 4603. REPLACEMENT OF VOLUME PERFORMANCE STANDARD WITH
SUSTAINABLE GROWTH RATE.
(a) In General.--Section 1848(f) (42 U.S.C. 1395w-4(f)) is
amended by striking paragraphs (2) through (5) and inserting
the following:
``(2) Specification of growth rate.--The sustainable growth
rate for all physicians' services for a fiscal year
(beginning with fiscal year 1998) shall be equal to the
product of--
``(A) 1 plus the Secretary's estimate of the weighted
average percentage increase (divided by 100) in the fees for
all physicians' services in the fiscal year involved,
``(B) 1 plus the Secretary's estimate of the percentage
change (divided by 100) in the average number of individuals
enrolled under this part (other than MedicarePlus plan
enrollees) from the previous fiscal year to the fiscal year
involved,
``(C) 1 plus the Secretary's estimate of the projected
percentage growth in real gross domestic product per capita
(divided by 100) from the previous fiscal year to the fiscal
year involved, and
``(D) 1 plus the Secretary's estimate of the percentage
change (divided by 100) in expenditures for all physicians'
services in the fiscal year (compared with the previous
fiscal year) which will result from changes in law and
regulations, determined without taking into account estimated
changes in expenditures due to changes in the volume and
intensity of physicians' services resulting from changes in
the update to the conversion factor under subsection (d)(3),
minus 1 and multiplied by 100.
``(3) Definitions.--In this subsection:
``(A) Services included in physicians' services.--The term
`physicians' services' includes other items and services
(such as clinical diagnostic laboratory tests and radiology
services), specified by the Secretary, that are commonly
performed or furnished by a physician or in a physician's
office, but does not include services furnished to a
MedicarePlus plan enrollee.
``(B) MedicarePlus plan enrollee.--The term `MedicarePlus
plan enrollee' means, with respect to a fiscal year, an
individual enrolled under this part who has elected to
receive benefits under this title for the fiscal year through
a MedicarePlus plan offered under part C, and also includes
an individual who is receiving benefits under this part
through enrollment with an eligible organization with a risk-
sharing contract under section 1876.''.
(b) Conforming Amendments.--Section 1848(f) (42 U.S.C.
1395w-4(f)) is amended--
(1) in the heading, by striking ``Volume Performance
Standard Rates of Increase'' and inserting ``Sustainable
Growth Rate''; and
(2) in paragraph (1)--
(A) in the heading, by striking ``volume performance
standard rates of increase'' and inserting ``sustainable
growth rate'',
(B) by striking subparagraphs (A) and (B); and
(C) in paragraph (1)(C)--
(i) in the heading, by striking ``performance standard
rates of increase'' and inserting ``sustainable growth
rate'';
(ii) in the first sentence, by striking ``with 1991), the
performance standard rates of increase'' and all that follows
through the first period and inserting ``with 1999), the
sustainable growth rate for the fiscal year beginning in that
year.''; and
(iii) in the second sentence, by striking ``January 1,
1990, the performance standard rate of increase under
subparagraph (D) for fiscal year 1990'' and inserting
``January 1, 1999, the sustainable growth rate for fiscal
year 1999''.
SEC. 4604. PAYMENT RULES FOR ANESTHESIA SERVICES.
(a) In General.--Section 1848(d)(1) (42 U.S.C. 1395w-
4(d)(1)), as amended by section 4601, is amended--
(A) in subparagraph (C), striking ``The single'' and
inserting ``Except as provided in subparagraph (D), the
single'';
(B) by redesignating subparagraph (D) as subparagraph (E);
and
(C) by inserting after subparagraph (C) the following new
subparagraph:
``(D) Special rules for anesthesia services.--The separate
conversion factor for anesthesia services for a year shall be
equal to 46 percent of the single conversion factor
established for other physicians' services, except as
adjusted for changes in work, practice expense, or
malpractice relative value units. ''.
(b) Classification of Anesthesia Services.--The first
sentence of section 1848(j)(1) (42 U.S.C. 1395w-4(j)(1)) is
amended--
(1) by striking ``and including anesthesia services''; and
(2) by inserting before the period the following:
``(including anesthesia services)''.
(c) Effective Date.--The amendments made by this section
shall apply to services furnished on or after January 1,
1998.
SEC. 4605. IMPLEMENTATION OF RESOURCE-BASED PHYSICIAN
PRACTICE EXPENSE.
(a) 1-Year Delay in Implementation.--Section 1848(c) (42
U.S.C. 1395w-4(c)) is amended--
(1) in paragraph (2)(C)(ii), in the matter before subclause
(I) and after subclause (II), by striking ``1998'' and
inserting ``1999'' each place it appears; and
(2) in paragraph (3)(C)(ii), by striking ``1998'' and
inserting ``1999''.
(b) Phased-in Implementation.--
(1) In general.--Section 1848(c)(2)(C)(ii) (42 U.S.C.
1395w-4(c)(2)(C)(ii)) is further amended--
(A) by striking the comma at the end of clause (ii) and
inserting a period and the following:
``For 1999, such number of units shall be determined based 75
percent on such product and based 25 percent on the relative
practice expense resources involved in furnishing the
service. For 2000, such number of units shall be determined
based 50 percent on such product and based 50 percent on such
relative practice expense resources. For 2001, such number of
units shall be determined based 25 percent on such product
and based 75 percent on such relative practice expense
resources. For a subsequent year, such number of units shall
be determined based entirely on such relative practice
expense resources.''.
(2) Conforming amendment.--Section 1848(c)(3)(C)(ii) (42
U.S.C. 1395w-4(c)(3)(C)(ii)), as amended by subsection
(a)(2), is amended by striking ``1999'' and inserting
``2002''.
(c) Requirements for Developing New Resource-Based Practice
Expense Relative Value Units.--
(1) Development.--For purposes of section 1848(c)(2)(C) of
the Social Security Act, the Secretary of Health and Human
Services shall develop new resource-based relative value
units. In developing such units the Secretary shall--
(A) utilize, to the maximum extent practicable, generally
accepted accounting principles and standards which (i)
recognize all staff, equipment, supplies, and expenses, not
just those which can be tied to specific procedures, and (ii)
use actual data on equipment utilization and other key
assumptions, such as the proportion of costs which are direct
versus indirect;
(B) study whether hospital cost reduction efforts and
changing practice patterns may have increased physician
practice costs under part B of the medicare program;
(C) consider potential adverse effects on patient access
under the medicare program; and
(D) consult with organizations representing physicians
regarding methodology and data to be used, including data for
impact projections, in order to ensure that sufficient input
has been received by the affected physician community.
(2) Report.--The Secretary shall transmit a report by March
1, 1998, on the development of resource-based relative value
units under paragraph (1) to the Committee on Ways and Means
and the Committee on Commerce of the House of Representatives
and the Committee on Finance of the Senate. The report shall
include a presentation of
[[Page H4466]]
data to be used in developing the value units and an
explanation of the methodology.
(3) Notice of proposed rulemaking.--The Secretary shall
publish a notice of proposed rulemaking with the new
resource-based relative value units on or before May 1, 1998,
and shall allow for a 90-day public comment period.
(4) Items included.--The proposed new rule shall include
the following:
(A) Detailed impact projections which compare new proposed
payment amounts on data on actual physician practice
expenses.
(B) Impact projections for specialties and subspecialties,
geographic payment localities, urban versus rural localities,
and academic versus nonacademic medical staffs.
(C) Impact projections on access to care for medicare
patients and physician employment of clinical and
administrative staff.
SEC. 4606. DISSEMINATION OF INFORMATION ON HIGH PER DISCHARGE
RELATIVE VALUES FOR IN-HOSPITAL PHYSICIANS'
SERVICES.
(a) Determination and Notice Concerning Hospital-Specific
Per Discharge Relative Values.--
(1) In general.--For 1999 and 2001 the Secretary of Health
and Human Services shall determine for each hospital--
(A) the hospital-specific per discharge relative value
under subsection (b); and
(B) whether the hospital-specific relative value is
projected to be excessive (as determined based on such value
represented as a percentage of the median of hospital-
specific per discharge relative values determined under
subsection (b)).
(2) Notice to medical staffs and carriers.--The Secretary
shall notify the medical executive committee of each hospital
identifies under paragraph (1)(B) as having an excessive
hospital-specific relative value, of the determinations made
with respect to the medical staff under paragraph (1).
(b) Determination of Hospital-Specific Per Discharge
Relative Values.--
(1) In general.--For purposes of this section, the
hospital-specific per discharge relative value for the
medical staff of a hospital (other than a teaching hospital)
for a year, shall be equal to the average per discharge
relative value (as determined under section 1848(c)(2) of the
Social Security Act) for physicians' services furnished to
inpatients of the hospital by the hospital's medical staff
(excluding interns and residents) during the second year
preceding that calendar year, adjusted for variations in
case-mix and disproportionate share status among hospitals
(as determined by the Secretary under paragraph (3)).
(2) Special rule for teaching hospitals.--The hospital-
specific relative value projected for a teaching hospital in
a year shall be equal to the sum of--
(A) the average per discharge relative value (as determined
under section 1848(c)(2) of such Act) for physicians'
services furnished to inpatients of the hospital by the
hospital's medical staff (excluding interns and residents)
during the second year preceding that calendar year, and
(B) the equivalent per discharge relative value (as
determined under such section) for physicians' services
furnished to inpatients of the hospital by interns and
residents of the hospital during the second year preceding
that calendar year, adjusted for variations in case-mix,
disproportionate share status, and teaching status among
hospitals (as determined by the Secretary under paragraph
(3)).
The Secretary shall determine the equivalent relative value
unit per discharge for interns and residents based on the
best available data and may make such adjustment in the
aggregate.
(3) Adjustment for teaching and disproportionate share
hospitals.--The Secretary shall adjust the allowable per
discharge relative values otherwise determined under this
subsection to take into account the needs of teaching
hospitals and hospitals receiving additional payments under
subparagraphs (F) and (G) of section 1886(d)(5) of the Social
Security Act. The adjustment for teaching status or
disproportionate share shall not be less than zero.
(c) Definitions.--For purposes of this section:
(1) Hospital.--The term ``hospital'' means a subsection (d)
hospital as defined in section 1886(d) of the Social Security
Act (42 U.S.C. 1395ww(d)).
(2) Medical staff.--An individual furnishing a physician's
service is considered to be on the medical staff of a
hospital--
(A) if (in accordance with requirements for hospitals
established by the Joint Commission on Accreditation of
Health Organizations)--
(i) the individual is subject to bylaws, rules, and
regulations established by the hospital to provide a
framework for the self-governance of medical staff
activities,
(ii) subject to the bylaws, rules, and regulations, the
individual has clinical privileges granted by the hospital's
governing body, and
(iii) under the clinical privileges, the individual may
provide physicians'' services independently within the scope
of the individual's clinical privileges, or
(B) if the physician provides at least one service to an
individual entitled to benefits under this title in that
hospital.
(3) Physicians' services.--The term ``physicians''
services'' means the services described in section 1848(j)(3)
of the Social Security Act (42 U.S.C. 1395w-4(j)(3)).
(4) Rural area; urban area.--The terms ``rural area'' and
``urban area'' have the meaning given those terms under
section 1886(d)(2)(D) of such Act (42 U.S.C.
1395ww(d)(2)(D)).
(5) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services.
(6) Teaching hospital.--The term ``teaching hospital''
means a hospital which has a teaching program approved as
specified in section 1861(b)(6) of the Social Security Act
(42 U.S.C. 1395x(b)(6)).
SEC. 4607. NO X-RAY REQUIRED FOR CHIROPRACTIC SERVICES.
(a) In General.--Section 1861(r)(5) (42 U.S.C. 1395x(r)(5))
is amended by striking ``demonstrated by X-ray to exist''.
(b) Effective Date.--The amendment made by subsection (a)
applies to services furnished on or after January 1, 1998.
(c) Utilization Guidelines.--The Secretary of Health and
Human Services shall develop and implement utilization
guidelines relating to the coverage of chiropractic services
under part B of title XVIII of the Social Security Act in
cases in which a subluxation has not been demonstrated by X-
ray to exist.
SEC. 4608. TEMPORARY COVERAGE RESTORATION FOR PORTABLE
ELECTROCARDIOGRAM TRANSPORTATION.
(a) In General.--Effective for electrocardiogram tests
performed during 1998, the Secretary of Health and Human
Services shall restore separate payment, under part B of
title XVIII of the Social Security Act, for the
transportation of electrocardiogram equipment (HCPCS code
R0076) based upon the status code and relative value units
established for such service as of December 31, 1996.
(b) Report.--By not later than July 1, 1998, the
Comptroller General shall submit to Congress a report on the
appropriateness of continuing such payment.
CHAPTER 2--OTHER PAYMENT PROVISIONS
SEC. 4611. PAYMENTS FOR DURABLE MEDICAL EQUIPMENT.
(a) Reduction in Payment Amounts for Items of Durable
Medical Equipment.--
(1) Freeze in update for covered items.--Section
1834(a)(14) (42 U.S.C. 1395m(a)(14)) is amended--
(A) by striking ``and'' at the end of subparagraph (A);
(B) in subparagraph (B)--
(i) by striking ``a subsequent year'' and inserting ``1993,
1994, 1995, 1996, and 1997'', and
(ii) by striking the period at the end and inserting a
semicolon; and
(C) by adding at the end the following:
``(C) for each of the years 1998 through 2002, 0 percentage
points; and
``(D) for a subsequent 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 of the
previous year.''.
(2) Update for orthotics and prosthetics.--Section
1834(h)(4)(A) (42 U.S.C. 1395m(h)(4)(A)) is amended--
(A) by striking ``, and'' at the end of clause (iii) and
inserting a semicolon;
(B) in clause (iv), by striking ``a subsequent year'' and
inserting ``1996 and 1997'', and
(C) by adding at the end the following new clauses:
``(v) for each of the years 1998 through 2002, 1 percent,
and
``(vi) for a subsequent year, the percentage increase in
the consumer price index for all urban consumers (United
States city average) for the 12-month period ending with June
of the previous year;''.
(c) Payment Freeze for Parenteral and Enteral Nutrients,
Supplies, and Equipment.--In determining the amount of
payment under part B of title XVIII of the Social Security
Act with respect to parenteral and enteral nutrients,
supplies, and equipment during each of the years 1998 through
2002, the charges determined to be reasonable with respect to
such nutrients, supplies, and equipment may not exceed the
charges determined to be reasonable with respect to such
nutrients, supplies, and equipment during 1995.
SEC. 4612. OXYGEN AND OXYGEN EQUIPMENT.
Section 1834(a)(9)(C) (42 U.S.C. 1395m(a)(9)(C)) is
amended--
(1) by striking ``and'' at the end of clause (iii);
(2) in clause (iv)--
(A) by striking ``a subsequent year'' and inserting ``1993,
1994, 1995, 1996, and 1997'', and
(B) by striking the period at the end and inserting a
semicolon; and
(3) by adding at the end the following new clauses:
``(v) in each of the years 1998 through 2002, is 80 percent
of the national limited monthly payment rate computed under
subparagraph (B) for the item for the year; and
``(vi) in a subsequent year, is the national limited
monthly payment rate computed under subparagraph (B) for the
item for the year.''.
SEC. 4613. REDUCTION IN UPDATES TO PAYMENT AMOUNTS FOR
CLINICAL DIAGNOSTIC LABORATORY TESTS.
(a) Change in Update.--Section 1833(h)(2)(A)(ii)(IV) (42
U.S.C. 1395l(h)(2)(A)(ii)(IV)) is amended by inserting ``and
1998 through 2002'' after ``1995''.
(b) Lowering Cap on Payment Amounts.--Section 1833(h)(4)(B)
(42 U.S.C. 1395l(h)(4)(B)) is amended--
(1) in clause (vi), by striking ``and'' at the end;
[[Page H4467]]
(2) in clause (vii)--
(A) by inserting ``and before January 1, 1998,'' after
``1995,'', and
(B) by striking the period at the end and inserting ``,
and''; and
(3) by adding at the end the following new clause:
``(viii) after December 31, 1997, is equal to 72 percent of
such median.''.
SEC. 4614. SIMPLIFICATION IN ADMINISTRATION OF LABORATORY
TESTS.
(a) Selection of Regional Carriers.--
(1) In general.--The Secretary of Health and Human Services
(in this section referred to as the ``Secretary'') shall--
(A) divide the United States into no more than 5 regions,
and
(B) designate a single carrier for each such region,
for the purpose of payment of claims under part B of title
XVIII of the Social Security Act with respect to clinical
diagnostic laboratory tests (other than for tests performed
in physician offices) furnished on or after such date (not
later than January 1, 1999) as the Secretary specifies.
(2) Designation.--In designating such carriers, the
Secretary shall consider, among other criteria--
(A) a carrier's timeliness, quality, and experience in
claims processing, and
(B) a carrier's capacity to conduct electronic data
interchange with laboratories and data matches with other
carriers.
(3) Single data resource.--The Secretary may select one of
the designated carriers to serve as a central statistical
resource for all claims information relating to such clinical
diagnostic laboratory tests handled by all the designated
carriers under such part.
(4) Allocation of claims.--The allocation of claims for
clinical diagnostic laboratory tests to particular designated
carriers shall be based on whether a carrier serves the
geographic area where the laboratory specimen was collected
or other method specified by the Secretary.
(b) Adoption of Uniform Policies for Clinical Laboratory
Tests.--
(1) In general.--Not later than July 1, 1998, the Secretary
shall first adopt, consistent with paragraph (2), uniform
coverage, administration, and payment policies for clinical
diagnostic laboratory tests under part B of title XVIII of
the Social Security Act, using a negotiated rulemaking
process under subchapter III of chapter 5 of title 5, United
States Code.
(2) Considerations in design of uniform policies.--The
policies under paragraph (1) shall be designed to promote
uniformity and program integrity and reduce administrative
burdens with respect to clinical diagnostic laboratory tests
payable under such part in connection with the following:
(A) Beneficiary information required to be submitted with
each claim or order for laboratory tests.
(B) Physicians' obligations regarding documentation
requirements and recordkeeping.
(C) Procedures for filing claims and for providing
remittances by electronic media.
(D) The documentation of medical necessity.
(E) Limitation on frequency of coverage for the same tests
performed on the same individual.
(3) Changes in carrier requirements pending adoption of
uniform policy.--During the period that begins on the date of
the enactment of this Act and ends on the date the Secretary
first implements uniform policies pursuant to regulations
promulgated under this subsection, a carrier under such part
may implement changes relating to requirements for the
submission of a claim for clinical diagnostic laboratory
tests.
(4) Use of interim regional policies.--After the date the
Secretary first implements such uniform policies, the
Secretary shall permit any carrier to develop and implement
interim policies of the type described in paragraph (1), in
accordance with guidelines established by the Secretary, in
cases in which a uniform national policy has not been
established under this subsection and there is a demonstrated
need for a policy to respond to aberrant utilization or
provision of unnecessary services. Except as the Secretary
specifically permits, no policy shall be implemented under
this paragraph for a period of longer than 2 years.
(5) Interim national policies.--After the date the
Secretary first designates regional carriers under subsection
(a), the Secretary shall establish a process under which
designated carriers can collectively develop and implement
interim national standards of the type described in paragraph
(1). No such policy shall be implemented under this paragraph
for a period of longer than 2 years.
(6) Biennial review process.--Not less often than once
every 2 years, the Secretary shall solicit and review
comments regarding changes in the uniform policies
established under this subsection. As part of such biennial
review process, the Secretary shall specifically review and
consider whether to incorporate or supersede interim,
regional, or national policies developed under paragraph (4)
or (5). Based upon such review, the Secretary may provide for
appropriate changes in the uniform policies previously
adopted under this subsection.
(7) Notice.-- Before a carrier implements a change or
policy under paragraph (3), (4), or (5), the carrier shall
provide for advance notice to interested parties and a 45-day
period in which such parties may submit comments on the
proposed change.
(c) Inclusion of Laboratory Representative on Carrier
Advisory Committees.--The Secretary shall direct that any
advisory committee established by such a carrier, to advise
with respect to coverage, administration or payment policies
under part B of title XVIII of the Social Security Act, shall
include an individual to represent the interest and views of
independent clinical laboratories and such other laboratories
as the Secretary deems appropriate. Such individual shall be
selected by such committee from among nominations submitted
by national and local organizations that represent
independent clinical laboratories.
SEC. 4615. UPDATES FOR AMBULATORY SURGICAL SERVICES.
Section 1833(i)(2)(C) (42 U.S.C. 1395l(i)(2)(C)) is amended
by striking all that follows ``shall be increased'' and
inserting the following: ``as follows:
``(i) For fiscal years 1996 and 1997, by the percentage
increase in the consumer price index for all urban consumers
(U.S. city average) as estimated by the Secretary for the 12-
month period ending with the midpoint of the year involved.
``(ii) For each of fiscal years 1998 through 2002 by such
percentage increase minus 2.0 percentage points.
``(iii) For each succeeding fiscal year by such percentage
increase.''.
SEC. 4616. REIMBURSEMENT FOR DRUGS AND BIOLOGICALS.
(a) In General.--Section 1842 (42 U.S.C. 1395u) is amended
by inserting after subsection (n) the following new
subsection:
``(o) If a physician's, supplier's, or any other person's
bill or request for payment for services includes a charge
for a drug or biological for which payment may be made under
this part and the drug or biological is not paid on a cost or
prospective payment basis as otherwise provided in this part,
the amount payable for the drug or biological is equal to 95
percent of the average wholesale price.''.
(b) Effective Date.--The amendments made by subsection (a)
apply to drugs and biologicals furnished on or after January
1, 1998.
SEC. 4617. COVERAGE OF ORAL ANTI-NAUSEA DRUGS UNDER
CHEMOTHERAPEUTIC REGIMEN.
(a) In General.--Section 1861(s)(2) (42 U.S.C.
1395x(s)(2)), as amended, is amended by inserting after
subparagraph (S) the following new subparagraph:
``(T) an oral drug (which is approved by the Federal Food
and Drug Administration) prescribed for use as an acute anti-
emetic used as part of an anticancer chemotherapeutic regimen
if the drug is administered by a physician (or as prescribed
by a physician)--
``(i) for use immediately before, at, or within 48 hours
after the time of the administration of the anticancer
chemotherapeutic agent; and
``(ii) as a full replacement for the anti-emetic therapy
which would otherwise be administered intravenously.''.
(b) Payment Levels.--Section 1834 (42 U.S.C. 1395m), as
amended by sections 4421(a)(2) and 4431(b)(2), is amended by
adding at the end the following new subsection:
``(m) Special Rules for Payment for Oral Anti-Nausea
Drugs.--
``(1) Limitation on per dose payment basis.--Subject to
paragraph (2), the per dose payment basis under this part for
oral anti-nausea drugs (as defined in paragraph (3))
administered during a year shall not exceed 90 percent of the
average per dose payment basis for the equivalent intravenous
anti-emetics administered during the year, as computed based
on the payment basis applied during 1996.
``(2) Aggregate limit.--The Secretary shall make such
adjustment in the coverage of, or payment basis for, oral
anti-nausea drugs so that coverage of such drugs under this
part does not result in any increase in aggregate payments
per capita under this part above the levels of such payments
per capita that would otherwise have been made if there were
no coverage for such drugs under this part.
``(3) Oral anti-nausea drugs defined.--For purposes of this
subsection, the term `oral anti-nausea drugs' means drugs for
which coverage is provided under this part pursuant to
section 1861(s)(2)(P).''.
(c) Effective Date.--The amendments made by this section
shall apply to items and services furnished on or after
January 1, 1998.
SEC. 4618. RURAL HEALTH CLINIC SERVICES.
(a) Per-Visit Payment Limits for Provider-Based Clinics.--
(1) Extension of limit.--
(A) In general.--The matter in section 1833(f) (42 U.S.C.
1395l(f)) preceding paragraph (1) is amended by striking
``independent rural health clinics'' and inserting ``rural
health clinics (other than such clinics in rural hospitals
with less than 50 beds)''.
(B) Effective date.--The amendment made by subparagraph (A)
applies to services furnished after 1997.
(2) Technical clarification.--Section 1833(f)(1) (42 U.S.C.
1395l(f)(1)) is amended by inserting ``per visit'' after
``$46''.
(b) Assurance of Quality Services.--
(1) In general.--Subparagraph (I) of the first sentence of
section 1861(aa)(2) (42 U.S.C. 1395x(aa)(2)) is amended to
read as follows:
``(I) has a quality assessment and performance improvement
program, and appropriate procedures for review of utilization
of clinic services, as the Secretary may specify,''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect on January 1, 1998.
[[Page H4468]]
(c) Waiver of Certain Staffing Requirements Limited to
Clinics in Program.--
(1) In general.--Section 1861(aa)(7)(B) (42 U.S.C.
1395x(aa)(7)(B)) is amended by inserting before the period at
the end the following: ``, or if the facility has not yet
been determined to meet the requirements (including
subparagraph (J) of the first sentence of paragraph (2)) of a
rural health clinic''.
(2) Effective date.--The amendment made by paragraph (1)
applies to waiver requests made after 1997.
(d) Refinement of Shortage Area Requirements.--
(1) Designation reviewed triennially.--Section 1861(aa)(2)
(42 U.S.C. 1395x(aa)(2)) is amended in the second sentence,
in the matter in clause (i) preceding subclause (I)--
(A) by striking ``and that is designated'' and inserting
``and that, within the previous three-year period, has been
designated''; and
(B) by striking ``or that is designated'' and inserting
``or designated''.
(2) Area must have shortage of health care practitioners.--
Section 1861(aa)(2) (42 U.S.C. 1395x(aa)(2)), as amended by
paragraph (1), is further amended in the second sentence, in
the matter in clause (i) preceding subclause (I)--
(A) by striking the comma after ``personal health
services''; and
(B) by inserting ``and in which there are insufficient
numbers of needed health care practitioners (as determined by
the Secretary),'' after ``Bureau of the Census)''.
(3) Previously qualifying clinics grandfathered only to
prevent shortage.--Section 1861(aa)(2) (42 U.S.C.
1395x(aa)(2)) is amended in the third sentence by inserting
before the period ``if it is determined, in accordance with
criteria established by the Secretary in regulations, to be
essential to the delivery of primary care services that would
otherwise be unavailable in the geographic area served by the
clinic''.
(4) Effective dates; implementing regulations.--
(A) In general.--Except as otherwise provided, the
amendments made by the preceding paragraphs take effect on
January 1 of the first calendar year beginning at least one
month after enactment of this Act.
(B) Current rural health clinics.--The amendments made by
the preceding paragraphs take effect, with respect to
entities that are rural health clinics under title XVIII of
the Social Security Act on the date of enactment of this Act,
on January 1 of the second calendar year following the
calendar year specified in subparagraph (A).
(C) Grandfathered clinics.--
(i) In general.--The amendment made by paragraph (3) shall
take effect on the effective date of regulations issued by
the Secretary under clause (ii).
(ii) Regulations.--The Secretary shall issue final
regulations implementing paragraph (3) that shall take effect
no later than January 1 of the third calendar year beginning
at least one month after enactment of this Act.
SEC. 4619. INCREASED MEDICARE REIMBURSEMENT FOR NURSE
PRACTITIONERS AND CLINICAL NURSE SPECIALISTS.
(a) Removal of Restrictions on Settings.--
(1) In general.--Clause (ii) of section 1861(s)(2)(K) (42
U.S.C. 1395x(s)(2)(K)) is amended to read as follows:
``(ii) services which would be physicians' services if
furnished by a physician (as defined in subsection (r)(1))
and which are performed by a nurse practitioner or clinical
nurse specialist (as defined in subsection (aa)(5)) working
in collaboration (as defined in subsection (aa)(6)) with a
physician (as defined in subsection (r)(1)) which the nurse
practitioner or clinical nurse specialist is legally
authorized to perform by the State in which the services are
performed, and such services and supplies furnished as an
incident to such services as would be covered under
subparagraph (A) if furnished incident to a physician's
professional service, but only if no facility or other
provider charges or is paid any amounts with respect to the
furnishing of such services;''.
(2) Conforming amendments.--(A) Section 1861(s)(2)(K) of
such Act (42 U.S.C. 1395x(s)(2)(K)) is further amended--
(i) in clause (i), by inserting ``and such services and
supplies furnished as incident to such services as would be
covered under subparagraph (A) if furnished incident to a
physician's professional service; and'' after ``are
performed,''; and
(ii) by striking clauses (iii) and (iv).
(B) Section 1861(b)(4) (42 U.S.C. 1395x(b)(4)) is amended
by striking ``clauses (i) or (iii) of subsection (s)(2)(K)''
and inserting ``subsection (s)(2)(K)''.
(C) Section 1862(a)(14) (42 U.S.C. 1395y(a)(14)) is amended
by striking ``section 1861(s)(2)(K)(i) or
1861(s)(2)(K)(iii)'' and inserting ``section 1861(s)(2)(K)''.
(D) Section 1866(a)(1)(H) (42 U.S.C. 1395cc(a)(1)(H)) is
amended by striking ``section 1861(s)(2)(K)(i) or
1861(s)(2)(K)(iii)'' and inserting ``section 1861(s)(2)(K)''.
(E) Section 1888(e)(2)(A)(ii) (42 U.S.C.
1395yy(e)(2)(A)(ii)), as added by section 10401(a), is
amended by striking ``through (iii)'' and inserting ``and
(ii)''.
(b) Increased Payment.--
(1) Fee schedule amount.--Clause (O) of section 1833(a)(1)
(42 U.S.C. 1395l(a)(1)) is amended to read as follows: ``(O)
with respect to services described in section
1861(s)(2)(K)(ii) (relating to nurse practitioner or clinical
nurse specialist services), the amounts paid shall be equal
to 80 percent of (i) the lesser of the actual charge or 85
percent of the fee schedule amount provided under section
1848, or (ii) in the case of services as an assistant at
surgery, the lesser of the actual charge or 85 percent of the
amount that would otherwise be recognized if performed by a
physician who is serving as an assistant at surgery; and''.
(2) Conforming amendments.--(A) Section 1833(r) (42 U.S.C.
1395l(r)) is amended--
(i) in paragraph (1), by striking ``section
1861(s)(2)(K)(iii) (relating to nurse practitioner or
clinical nurse specialist services provided in a rural
area)'' and inserting ``section 1861(s)(2)(K)(ii) (relating
to nurse practitioner or clinical nurse specialist
services)'';
(ii) by striking paragraph (2);
(iii) in paragraph (3), by striking ``section
1861(s)(2)(K)(iii)'' and inserting ``section
1861(s)(2)(K)(ii)''; and
(iv) by redesignating paragraph (3) as paragraph (2).
(B) Section 1842(b)(12)(A) (42 U.S.C. 1395u(b)(12)(A)) is
amended, in the matter preceding clause (i), by striking
``clauses (i), (ii), or (iv) of section 1861(s)(2)(K)
(relating to a physician assistants and nurse
practitioners)'' and inserting ``section 1861(s)(2)(K)(i)
(relating to physician assistants)''.
(c) Direct Payment for Nurse Practitioners and Clinical
Nurse Specialists.--
(1) In general.--Section 1832(a)(2)(B)(iv) (42 U.S.C.
1395k(a)(2)(B)(iv)) is amended by striking ``provided in a
rural area (as defined in section 1886(d)(2)(D))'' and
inserting ``but only if no facility or other provider charges
or is paid any amounts with respect to the furnishing of such
services''.
(2) Conforming amendment.--Section 1842(b)(6)(C) (42 U.S.C.
1395u(b)(6)(C)) is amended--
(A) by striking ``clauses (i), (ii), or (iv)'' and
inserting ``clause (i)''; and
(B) by striking ``or nurse practitioner''.
(d) Definition of Clinical Nurse Specialist Clarified.--
Section 1861(aa)(5) (42 U.S.C. 1395x(aa)(5)) is amended--
(1) by inserting ``(A)'' after ``(5)'';
(2) by striking ``The term `physician assist-ant' '' and
all that follows through ``who performs'' and inserting ``The
term `physician assistant' and the term `nurse practitioner'
mean, for purposes of this title, a physician assistant or
nurse practitioner who performs''; and
(3) by adding at the end the following new subparagraph:
``(B) The term `clinical nurse specialist' means, for
purposes of this title, an individual who--
``(i) is a registered nurse and is licensed to practice
nursing in the State in which the clinical nurse specialist
services are performed; and
``(ii) holds a master's degree in a defined clinical area
of nursing from an accredited educational institution.''.
(e) Effective Date.--The amendments made by this section
shall apply with respect to services furnished and supplies
provided on and after January 1, 1998.
SEC. 4620. INCREASED MEDICARE REIMBURSEMENT FOR PHYSICIAN
ASSISTANTS.
(a) Removal of Restriction on Settings.--Section
1861(s)(2)(K)(i) (42 U.S.C. 1395x(s)(2)(K)(i)) is amended--
(1) by striking ``(I) in a hospital'' and all that follows
through ``shortage area,'', and
(2) by adding at the end the following: ``but only if no
facility or other provider charges or is paid any amounts
with respect to the furnishing of such services,''.
(b) Increased Payment.--Paragraph (12) of section 1842(b)
(42 U.S.C. 1395u(b)), as amended by section 4619(b)(2)(B), is
amended to read as follows:
``(12) With respect to services described in section
1861(s)(2)(K)(i)--
``(A) payment under this part may only be made on an
assignment-related basis; and
``(B) the amounts paid under this part shall be equal to 80
percent of (i) the lesser of the actual charge or 85 percent
of the fee schedule amount provided under section 1848 for
the same service provided by a physician who is not a
specialist; or (ii) in the case of services as an assistant
at surgery, the lesser of the actual charge or 85 percent of
the amount that would otherwise be recognized if performed by
a physician who is serving as an assistant at surgery.''.
(c) Removal of Restriction on Employment Relationship.--
Section 1842(b)(6) (42 U.S.C. 1395u(b)(6)) is amended by
adding at the end the following new sentence: ``For purposes
of clause (C) of the first sentence of this paragraph, an
employment relationship may include any independent
contractor arrangement, and employer status shall be
determined in accordance with the law of the State in which
the services described in such clause are performed.''.
(d) Effective Date.--The amendments made by this section
shall apply with respect to services furnished and supplies
provided on and after January 1, 1998.
SEC. 4621. RENAL DIALYSIS-RELATED SERVICES.
(a) Auditing of Cost Reports.--The Secretary shall audit a
sample of cost reports of renal dialysis providers for 1995
and for each third year thereafter.
(b) Implementation of Quality Standards.--The Secretary of
Health and Human Services shall develop and implement, by not
later than January 1, 1999, a method to measure and report
quality of renal dialysis services provided under the
medicare program under title XVIII of the Social Security Act
in order to reduce payments for inappropriate or low quality
care.
[[Page H4469]]
SEC. 4622. PAYMENT FOR COCHLEAR IMPLANTS AS CUSTOMIZED
DURABLE MEDICAL EQUIPMENT.
(a) In General.--Section 1834(h)(1)(E) (42 U.S.C.
1395m(h)(1)(E)) is amended by adding at the end the
following: ``Payment for cochlear implants shall be made in
accordance with subsection (a)(4), and, in applying such
subsection to cochlear implants, carriers shall take into
consideration technological innovations and data on charges
to the extent that such charges reflect such innovations.''.
(b) Effective Date.--The amendment made by subsection (a)
applies to implants implanted on or after January 1, 1998.
CHAPTER 3--PART B PREMIUM
SEC. 4631. PART B PREMIUM.
(a) In General.--The first, second and third sentences of
section 1839(a)(3) (42 U.S.C. 1395r(a)(3)) are amended to
read as follows: ``The Secretary, during September of each
year, shall determine and promulgate a monthly premium rate
for the succeeding calendar year. That monthly premium rate
shall be equal to 50 percent of the monthly actuarial rate
for enrollees age 65 and over, determined according to
paragraph (1), for that succeeding calendar year.''.
(b) Conforming and Technical Amendments.--
(1) Section 1839.--Section 1839 (42 U.S.C. 1395r) is
amended--
(A) in subsection (a)(2), by striking ``(b) and (e)'' and
inserting ``(b), (c), and (f)'',
(B) in the last sentence of subsection (a)(3)--
(i) by inserting ``rate'' after ``premium'', and
(ii) by striking ``and the derivation of the dollar amounts
specified in this paragraph'',
(C) by striking subsection (e), and
(D) by redesignating subsection (g) as subsection (e) and
inserting that subsection after subsection (d).
(2) Section 1844.--Subparagraphs (A)(i) and (B)(i) of
section 1844(a)(1) (42 U.S.C. 1395w(a)(1)) are each amended
by striking ``or 1839(e), as the case may be''.
Subtitle H--Provisions Relating to Parts A and B
CHAPTER 1--PROVISIONS RELATING TO MEDICARE SECONDARY PAYER
SEC. 4701. PERMANENT EXTENSION AND REVISION OF CERTAIN
SECONDARY PAYER PROVISIONS.
(a) Application to Disabled Individuals in Large Group
Health Plans.--
(1) In general.--Section 1862(b)(1)(B) (42 U.S.C.
1395y(b)(1)(B)) is amended--
(A) in clause (i), by striking ``clause (iv)'' and
inserting ``clause (iii)'',
(B) by striking clause (iii), and
(C) by redesignating clause (iv) as clause (iii).
(2) Conforming amendments.--Paragraphs (1) through (3) of
section 1837(i) (42 U.S.C. 1395p(i)) and the second sentence
of section 1839(b) (42 U.S.C. 1395r(b)) are each amended by
striking ``1862(b)(1)(B)(iv)'' each place it appears and
inserting ``1862(b)(1)(B)(iii)''.
(b) Individuals With End Stage Renal Disease.--
(1) In general.--Section 1862(b)(1)(C) (42 U.S.C.
1395y(b)(1)(C)) is amended--
(A) in the first sentence, by striking ``12-month'' each
place it appears and inserting ``30-month'', and
(B) by striking the second sentence.
(2) Effective date.--The amendments made by paragraph (1)
shall apply to items and services furnished on or after the
date of the enactment of this Act and with respect to periods
beginning on or after the date that is 18 months prior to
such date.
(c) IRS-SSA-HCFA Data Match.--
(1) Social security act.--Section 1862(b)(5)(C) (42 U.S.C.
1395y(b)(5)(C)) is amended by striking clause (iii).
(2) Internal revenue code.--Section 6103(l)(12) of the
Internal Revenue Code of 1986 is amended by striking
subparagraph (F).
SEC. 4702. CLARIFICATION OF TIME AND FILING LIMITATIONS.
(a) Extension of Claims Filing Period.--Section
1862(b)(2)(B) (42 U.S.C. 1395y(b)(2)(B)) is amended by adding
at the end the following new clause:
``(v) Claims-filing period.--Notwithstanding any other time
limits that may exist for filing a claim under an employer
group health plan, the United States may seek to recover
conditional payments in accordance with this subparagraph
where the request for payment is submitted to the entity
required or responsible under this subsection to pay with
respect to the item or service (or any portion thereof) under
a primary plan within the 3-year period beginning on the date
on which the item or service was furnished.''.
(b) Effective Date.--The amendment made by subsection (a)
applies to items and services furnished after 1990. The
previous sentence shall not be construed as permitting any
waiver of the 3-year-period requirement (imposed by such
amendment) in the case of items and services furnished more
than 3 years before the date of the enactment of this Act.
SEC. 4703. PERMITTING RECOVERY AGAINST THIRD PARTY
ADMINISTRATORS.
(a) Permitting Recovery Against Third Party Administrators
of Primary Plans.--Section 1862(b)(2)(B)(ii) (42 U.S.C.
1395y(b)(2)(B)(ii)) is amended--
(1) by striking ``under this subsection to pay'' and
inserting ``(directly, as a third-party administrator, or
otherwise) to make payment'', and
(2) by adding at the end the following: ``The United States
may not recover from a third-party administrator under this
clause in cases where the third-party administrator would not
be able to recover the amount at issue from the employer or
group health plan for whom it provides administrative
services due to the insolvency or bankruptcy of the employer
or plan.''.
(b) Clarification of Beneficiary Liability.--Section
1862(b)(1) (42 U.S.C. 1395y(b)(1)) is amended by adding at
the end the following new subparagraph:
``(F) Limitation on beneficiary liability.--An individual
who is entitled to benefits under this title and is furnished
an item or service for which such benefits are incorrectly
paid is not liable for repayment of such benefits under this
paragraph unless payment of such benefits was made to the
individual.''.
(c) Effective Date.--The amendments made by this section
apply to items and services furnished on or after the date of
the enactment of this Act.
CHAPTER 2--HOME HEALTH SERVICES
SEC. 4711. RECAPTURING SAVINGS RESULTING FROM TEMPORARY
FREEZE ON PAYMENT INCREASES FOR HOME HEALTH
SERVICES.
(a) Basing Updates to Per Visit Cost Limits on Limits for
Fiscal Year 1993.--Section 1861(v)(1)(L) (42 U.S.C.
1395x(v)(1)(L)) is amended by adding at the end the
following:
``(iv) In establishing limits under this subparagraph for
cost reporting periods beginning after September 30, 1997,
the Secretary shall not take into account any changes in the
home health market basket, as determined by the Secretary,
with respect to cost reporting periods which began on or
after July 1, 1994, and before July 1, 1996.''.
(b) No Exceptions Permitted Based on Amendment.--The
Secretary of Health and Human Services shall not consider the
amendment made by subsection (a) in making any exemptions and
exceptions pursuant to section 1861(v)(1)(L)(ii) of the
Social Security Act (42 U.S.C. 1395x(v)(1)(L)(ii)).
SEC. 4712. INTERIM PAYMENTS FOR HOME HEALTH SERVICES.
(a) Reductions in Cost Limits.--Section 1861(v)(1)(L)(i)
(42 U.S.C. 1395x(v)(1)(L)(i)) is amended--
(1) by moving the indentation of subclauses (I) through
(III) 2-ems to the left;
(2) in subclause (I), by inserting ``of the mean of the
labor-related and nonlabor per visit costs for freestanding
home health agencies'' before the comma at the end;
(3) in subclause (II), by striking ``, or'' and inserting
``of such mean,'';
(4) in subclause (III)--
(A) by inserting ``and before October 1, 1997,'' after
``July 1, 1987,'', and
(B) by striking the comma at the end and inserting ``of
such mean, or''; and
(5) by striking the matter following subclause (III) and
inserting the following:
``(IV) October 1, 1997, 105 percent of the median of the
labor-related and nonlabor per visit costs for freestanding
home health agencies.''.
(b) Delay In Updates.--Section 1861(v)(1)(L)(iii) (42
U.S.C. 1395x(v)(1)(L)(iii)) is amended by inserting ``, or on
or after July 1, 1997, and before October 1, 1997'' after
``July 1, 1996''.
(c) Additions to Cost Limits.--Section 1861(v)(1)(L) (42
U.S.C. 1395x(v)(1)(L)), as amended by section 4711(a), is
amended by inserting adding at the end the following new
clauses:
``(v) For services furnished by home health agencies for
cost reporting periods beginning on or after October 1, 1997,
the Secretary shall provide for an interim system of limits.
Payment shall not exceed the costs determined under the
preceding provisions of this subparagraph or, if lower, the
product of--
``(I) an agency-specific per beneficiary annual limitation
calculated based 75 percent on the reasonable costs
(including nonroutine medical supplies) for the agency's 12-
month cost reporting period ending during 1994, and based 25
percent on the standardized regional average of such costs
for the agency's region for cost reporting periods ending
during 1994, such costs updated by the home health market
basket index; and
``(II) the agency's unduplicated census count of patients
(entitled to benefits under this title) for the cost
reporting period subject to the limitation.
``(vi) For services furnished by home health agencies for
cost reporting periods beginning on or after October 1, 1997,
the following rules apply:
``(I) For new providers and those providers without a 12-
month cost reporting period ending in calendar year 1994, the
per beneficiary limitation shall be equal to the median of
these limits (or the Secretary's best estimates thereof)
applied to other home health agencies as determined by the
Secretary. A home health agency that has altered its
corporate structure or name shall not be considered a new
provider for this purpose.
``(II) For beneficiaries who use services furnished by more
than one home health agency, the per beneficiary limitations
shall be prorated among the agencies.''.
(d) Development of Case Mix System.--The Secretary of
Health and Human Services shall expand research on a
prospective payment system for home health agencies under the
medicare program that ties prospective payments to a unit of
service, including an intensive effort to develop a reliable
case
[[Page H4470]]
mix adjuster that explains a significant amount of the
variances in costs.
(e) Submission of Data for Case Mix System.--Effective for
cost reporting periods beginning on or after October 1, 1997,
the Secretary of Health and Human Services may require all
home health agencies to submit additional information that
the Secretary considers necessary for the development of a
reliable case mix system.
SEC. 4713. CLARIFICATION OF PART-TIME OR INTERMITTENT NURSING
CARE.
(a) In General.--Section 1861(m) (42 U.S.C. 1395x(m)) is
amended by adding at the end the following: ``For purposes of
paragraphs (1) and (4), the term `part-time or intermittent
services' means skilled nursing and home health aide services
furnished any number of days per week as long as they are
furnished (combined) less than 8 hours each day and 28 or
fewer hours each week (or, subject to review on a case-by-
case basis as to the need for care, less than 8 hours each
day and 35 or fewer hours per week). For purposes of sections
1814(a)(2)(C) and 1835(a)(2)(A), `intermittent' means skilled
nursing care that is either provided or needed on fewer than
7 days each week, or less than 8 hours of each day for
periods of 21 days or less (with extensions in exceptional
circumstances when the need for additional care is finite and
predictable).''.
(b) Effective Date.--The amendment made by subsection (a)
applies to services furnished on or after October 1, 1997.
SEC. 4714. STUDY ON DEFINITION OF HOMEBOUND.
(a) Study.--The Secretary of Health and Human Services
shall conduct a study of the criteria that should be applied,
and the method of applying such criteria, in the
determination of whether an individual is homebound for
purposes of qualifying for receipt of benefits for home
health services under the medicare program. Such criteria
shall include the extent and circumstances under which a
person may be absent from the home but nonetheless qualify.
(b) Report.--Not later than October 1, 1998, the Secretary
shall submit a report to the Congress on the study conducted
under subsection (a). The report shall include specific
recommendations on such criteria and methods.
SEC. 4715. PAYMENT BASED ON LOCATION WHERE HOME HEALTH
SERVICE IS FURNISHED.
(a) Conditions of Participation.--Section 1891 (42 U.S.C.
1395bbb) is amended by adding at the end the following:
``(g) Payment on Basis of Location of Service.--A home
health agency shall submit claims for payment for home health
services under this title only on the basis of the geographic
location at which the service is furnished, as determined by
the Secretary.''.
(b) Wage Adjustment.--Section 1861(v)(1)(L)(iii) (42 U.S.C.
1395x(v)(1)(L)(iii)) is amended by striking ``agency is
located'' and inserting ``service is furnished''.
(c) Effective Date.--The amendments made by this section
apply to cost reporting periods beginning on or after October
1, 1997.
SEC. 4716. NORMATIVE STANDARDS FOR HOME HEALTH CLAIMS
DENIALS,
(a) In General.--Section 1862(a)(1) (42 U.S.C.
1395y(a)(1)), as amended by section 4103(c), is amended--
(1) by striking ``and'' at the end of subparagraph (G),
(2) by striking the semicolon at the end of subparagraph
(H) and inserting ``, and'', and
(3) by inserting after subparagraph (H) the following new
subparagraph:
``(I) the frequency and duration of home health services
which are in excess of normative guidelines that the
Secretary shall establish by regulation;''.
(b) Notification.--The Secretary of Health and Human
Services may establish a process for notifying a physician in
cases in which the number of home health service visits
furnished under the medicare program pursuant to a
prescription or certification of the physician significantly
exceeds such threshold (or thresholds) as the Secretary
specifies. The Secretary may adjust such threshold to reflect
demonstrated differences in the need for home health services
among different beneficiaries.
(c) Effective Date.--The amendments made by this section
apply to services furnished on or after October 1, 1997.
SEC. 4717. NO HOME HEALTH BENEFITS BASED SOLELY ON DRAWING
BLOOD.
(a) In General.--Sections 1814(a)(2)(C) and 1835(a)(2)(A)
(42 U.S.C. 1395f(a)(2)(C), 1395n(a)(2)(A)) are each amended
by inserting ``(other than solely venipuncture for the
purpose of obtaining a blood sample)'' after ``skilled
nursing care''.
(b) Effective Date.--The amendments made by subsection (a)
apply to home health services furnished after the 6-month
period beginning after the date of enactment of this Act.
SEC. 4718. MAKING PART B PRIMARY PAYOR FOR CERTAIN HOME
HEALTH SERVICES.
(a) In General.--Section 1833(d) (42 U.S.C. 1395l(d)) is
amended--
(1) by striking ``(d) No'' and inserting ``(d)(1) Subject
to paragraph (2), no'', and
(2) by adding at the end the following new paragraph:
``(2) Payment shall be made under this part (rather than
under part A), for an individual entitled to benefits under
part A, for home health services, other than the first 100
visits of post-hospital home health services furnished to an
individual.''.
(b) Post-hospital Home Health Services.--Section 1861 (42
U.S.C. 1395x) is amended by adding at the end the following:
``(ss) Post-Hospital Home Health Services.--The term `post-
hospital home health services' means home health services
furnished to an individual under a plan of treatment
established when the individual was an inpatient of a
hospital or rural primary care hospital for not less than 3
consecutive days before discharge, or during a covered post-
hospital extended care stay, if home health services are
initiated for the individual within 30 days after discharge
from the hospital, rural primary care hospital or extended
care facility.''.
(c) Payments Under Part B.--Subparagraph (A) of section
1833(a)(2) (42 U.S.C. 1395l(a)(2)) is amended to read as
follows:
``(A) with respect to home health services (other than a
covered osteoporosis drug (as defined in section 1861(kk)),
and to items and services described in section
1861(s)(10)(A), the amounts determined under section
1861(v)(1)(L) or section 1893, or, if the services are
furnished by a public provider of services, or by another
provider which demonstrates to the satisfaction of the
Secretary that a significant portion of its patients are low-
income (and requests that payment be made under this
provision), free of charge, or at nominal charges to the
public, the amount determined in accordance with section
1814(b)(2);''.
(d) Phase-In of Additional Part B Costs In Determination of
Part B Monthly Premium.--Section 1839(a) (42 U.S.C. 1395r(a))
is amended--
(1) in paragraph (3) in last the sentence inserted by
section 4631(a) of this title, by inserting ``(except as
provided in paragraph (5)(B))'' before the period, and
(2) by adding after paragraph (4) the following:
``(5)(A) The Secretary shall, at the time of determining
the monthly actuarial rate under paragraph (1) for 1998
through 2003, shall determine a transitional monthly
actuarial rate for enrollees age 65 and over in the same
manner as such rate is determined under paragraph (1), except
that there shall be excluded from such determination an
estimate of any benefits and administrative costs
attributable to home health services for which payment would
have been made under part A during the year but for paragraph
(2) of section 1833(d).
``(B) The monthly premium for each individual enrolled
under this part for each month for a year (beginning with
1998 and ending with 2003) shall be equal to 50 percent of
the monthly actuarial rate determined under subparagraph (A)
increased by the following proportion of the difference
between such premium and the monthly premium otherwise
determined under paragraph (3) (without regard to this
paragraph):
``(i) For a month in 1998, \1/7\.
``(ii) For a month in 1999, \2/7\.
``(iii) For a month in 2000, \3/7\.
``(iv) For a month in 2001, \4/7\.
``(v) For a month in 2002, \5/7\.
``(vi) For a month in 2003, \6/7\.''.
(e) Maintaining Appeal Rights for Home Health Services.--
Section 1869(b)(2)(B) (42 U.S.C. 1395ff(b)(2)(B)) is amended
by inserting ``(or $100 in the case of home health
services)'' after ``$500''.
(f) Report.--Not later than October 1, 1999, the Secretary
of Health and Human Services shall submit a report to the
Committees on Commerce and Ways and Means of the House of
Representatives and the Committee on Finance of the Senate on
the impact on home health utilization and admissions to
hospitals and skilled nursing facilities of the amendment
made by subsection (b). The Secretary shall further reexamine
and submit a report to such Committees on this impact 1 year
after the full implementation of the prospective payment
system for home health services into the medicare program,
effected under the amendments made by section 4441.
(g) Effective Date.--The amendments made by this section
apply to services furnished on or after October 1, 1997.
CHAPTER 3--BABY BOOM GENERATION MEDICARE COMMISSION
SEC. 4721. BIPARTISAN COMMISSION ON THE EFFECT OF THE BABY
BOOM GENERATION ON THE MEDICARE PROGRAM.
(a) Establishment.--There is established a commission to be
known as the Bipartisan Commission on the Effect of the Baby
Boom Generation on the Medicare Program (in this section
referred to as the ``Commission'').
(b) Duties.--
(1) In general.--The Commission shall--
(A) examine the financial impact on the medicare program of
the significant increase in the number of medicare eligible
individuals which will occur beginning approximately during
2010 and lasting for approximately 25 years, and
(B) make specific recommendations to the Congress
respecting a comprehensive approach to preserve the medicare
program for the period during which such individuals are
eligible for medicare.
(2) Considerations in making recommendations.--In making
its recommendations, the Commission shall consider the
following:
(A) The amount and sources of Federal funds to finance the
medicare program, including the potential use of innovative
financing methods.
(B) Methods used by other nations to respond to comparable
demographic patterns in eligibility for health care benefits
for elderly and disabled individuals.
[[Page H4471]]
(C) Modifying age-based eligibility to correspond to
changes in age-based eligibility under the OASDI program.
(D) Trends in employment-related health care for retirees,
including the use of medical savings accounts and similar
financing devices.
(E) The role medicare should play in addressing the needs
of persons with chronic illness.
(c) Membership.--
(1) Appointment.--The Commission shall be composed of 15
voting members as follows:
(A) The Majority Leader of the Senate shall appoint, after
consultation with the minority leader of the Senate, 6
members, of whom not more than 4 may be of the same political
party.
(B) The Speaker of the House of Representatives shall
appoint, after consultation with the minority leader of the
House of Representatives, 6 members, of whom not more than 4
may be of the same political party.
(C) The 3 ex officio members of the Board of Trustees of
the Federal Hospital Insurance Trust Fund and of the Federal
Supplementary Medical Insurance Trust Fund who are Cabinet
level officials.
(2) Chairman and vice chairman.--As the first item of
business at the Commission's first meeting (described in
paragraph (5)(B)), the Commission shall elect a Chairman and
Vice Chairman from among its members. The individuals elected
as Chairman and Vice Chairman may not be of the same
political party and may not have been appointed to the
Commission by the same appointing authority.
(3) Vacancies.--Any vacancy in the membership of the
Commission shall be filled in the manner in which the
original appointment was made and shall not affect the power
of the remaining members to execute the duties of the
Commission.
(4) Quorum.--A quorum shall consist of 8 members of the
Commission, except that 4 members may conduct a hearing under
subsection (f).
(5) Meetings.--
(A) The Commission shall meet at the call of its Chairman
or a majority of its members.
(B) The Commission shall hold its first meeting not later
than February 1, 1998.
(6) Compensation and reimbursement of expenses.--Members of
the Commission are not entitled to receive compensation for
service on the Commission. Members may be reimbursed for
travel, subsistence, and other necessary expenses incurred in
carrying out the duties of the Commission.
(d) Advisory Panel.--
(1) In general.--The Chairman, in consultation with the
Vice Chairman, may establish a panel (in this section
referred to as the ``Advisory Panel'') consisting of health
care experts, consumers, providers, and others to advise and
assist the members of the Commission in carrying out the
duties described in subsection (b). The panel shall have only
those powers that the Chairman, in consultation with the Vice
Chairman, determines are necessary and appropriate to assist
the Commission in carrying out such duties.
(2) Compensation.--Members of the Advisory Panel are not
entitled to receive compensation for service on the Advisory
Panel. Subject to the approval of the chairman of the
Commission, members may be reimbursed for travel,
subsistence, and other necessary expenses incurred in
carrying out the duties of the Advisory Panel.
(e) Staff and Consultants.--
(1) Staff.--The Commission may appoint and determine the
compensation of such staff as may be necessary to carry out
the duties of the Commission. Such appointments and
compensation may be made without regard to the provisions of
title 5, United States Code, that govern appointments in the
competitive services, and the provisions of chapter 51 and
subchapter III of chapter 53 of such title that relate to
classifications and the General Schedule pay rates.
(2) Consultants.--The Commission may procure such temporary
and intermittent services of consultants under section
3109(b) of title 5, United States Code, as the Commission
determines to be necessary to carry out the duties of the
Commission.
(f) Powers.--
(1) Hearings and other activities.--For the purpose of
carrying out its duties, the Commission may hold such
hearings and undertake such other activities as the
Commission determines to be necessary to carry out its
duties.
(2) Studies by gao.--Upon the request of the Commission,
the Comptroller General shall conduct such studies or
investigations as the Commission determines to be necessary
to carry out its duties.
(3) Cost estimates by congressional budget office.--
(A) Upon the request of the Commission, the Director of the
Congressional Budget Office shall provide to the Commission
such cost estimates as the Commission determines to be
necessary to carry out its duties.
(B) The Commission shall reimburse the Director of the
Congressional Budget Office for expenses relating to the
employment in the office of the Director of such additional
staff as may be necessary for the Director to comply with
requests by the Commission under subparagraph (A).
(4) Detail of federal employees.--Upon the request of the
Commission, the head of any Federal agency is authorized to
detail, without reimbursement, any of the personnel of such
agency to the Commission to assist the Commission in carrying
out its duties. Any such detail shall not interrupt or
otherwise affect the civil service status or privileges of
the Federal employee.
(5) Technical assistance.--Upon the request of the
Commission, the head of a Federal agency shall provide such
technical assistance to the Commission as the Commission
determines to be necessary to carry out its duties.
(6) Use of mails.--The Commission may use the United States
mails in the same manner and under the same conditions as
Federal agencies and shall, for purposes of the frank, be
considered a commission of Congress as described in section
3215 of title 39, United States Code.
(7) Obtaining information.--The Commission may secure
directly from any Federal agency information necessary to
enable it to carry out its duties, if the information may be
disclosed under section 552 of title 5, United States Code.
Upon request of the Chairman of the Commission, the head of
such agency shall furnish such information to the Commission.
(8) Administrative support services.--Upon the request of
the Commission, the Administrator of General Services shall
provide to the Commission on a reimbursable basis such
administrative support services as the Commission may
request.
(9) Printing.--For purposes of costs relating to printing
and binding, including the cost of personnel detailed from
the Government Printing Office, the Commission shall be
deemed to be a committee of the Congress.
(g) Report.--Not later than May 1, 1999, the Commission
shall submit to Congress a report containing its findings and
recommendations regarding how to protect and preserve the
medicare program in a financially solvent manner until 2030
(or, if later, throughout the period of projected solvency of
the Federal Old-Age and Survivors Insurance Trust Fund). The
report shall include detailed recommendations for appropriate
legislative initiatives respecting how to accomplish this
objective.
(h) Termination.--The Commission shall terminate 30 days
after the date of submission of the report required in
subsection (g).
(i) Authorization of Appropriations.--There are authorized
to be appropriated $1,500,000 to carry out this section. 60
percent of such appropriation shall be payable from the
Federal Hospital Insurance Trust Fund, and 40 percent of such
appropriation shall be payable from the Federal Supplementary
Medical Insurance Trust Fund under title XVIII of the Social
Security Act (42 U.S.C. 1395i, 1395t).
CHAPTER 4--PROVISIONS RELATING TO DIRECT GRADUATE MEDICAL EDUCATION
SEC. 4731. LIMITATION ON PAYMENT BASED ON NUMBER OF RESIDENTS
AND IMPLEMENTATION OF ROLLING AVERAGE FTE
COUNT.
Section 1886(h)(4) (42 U.S.C. 1395ww(h)(4)) is amended by
adding after subparagraph (E) the following:
``(F) Limitation on number of residents for certain fiscal
years.--Such rules shall provide that for purposes of a cost
reporting period beginning on or after October 1, 1997, the
total number of full-time equivalent residents before
application of weighting factors (as determined under this
paragraph) with respect to a hospital's approved medical
residency training program may not exceed the number of full-
time equivalent residents with respect to the hospital's most
recent cost reporting period ending on or before December 31,
1996.
``(G) Counting interns and residents for fy 1998 and
subsequent years.--
``(i) FY 1998.--For the hospital's first cost reporting
period beginning during fiscal year 1998, subject to the
limit described in subparagraph (F), the total number of
full-time equivalent residents, for determining the
hospital's graduate medical education payment, shall equal
the average of the full-time equivalent resident counts for
the cost reporting period and the preceding cost reporting
period.
``(ii) Subsequent years.--For each subsequent cost
reporting period, subject to the limit described in
subparagraph (F), the total number of full-time equivalent
residents, for determining the hospital's graduate medical
education payment, shall equal the average of the actual
full-time equivalent resident counts for the cost reporting
period and preceding two cost reporting periods.
``(iii) Adjustment for short periods.--If a hospital's cost
reporting period beginning on or after October 1, 1997, is
not equal to twelve months, the Secretary shall make
appropriate modifications to ensure that the average full-
time equivalent resident counts pursuant to clause (ii) are
based on the equivalent of full 12-month cost reporting
periods.
``(iv) Exclusion of residents in dentistry.--Residents in
an approved medical residency training program in dentistry
shall not be counted for purposes of this subparagraph and
subparagraph (F).''.
SEC. 4732. PHASED-IN LIMITATION ON HOSPITAL OVERHEAD AND
SUPERVISORY PHYSICIAN COMPONENT OF DIRECT
MEDICAL EDUCATION COSTS.
(a) In General.--Section 1886(h)(3) (42 U.S.C.
1395ww(h)(3)) is amended--
(1) in subparagraph (B), by inserting ``subject to
subparagraph (D),'' after ``subparagraph (A)'', and
(2) by adding at the end the following:
[[Page H4472]]
``(D) Phased-in limitation on hospital overhead and
supervisory physician component.--
``(i) In general.--In the case of a hospital for which the
overhead GME amount (as defined in clause (ii)) for the base
period exceeds an amount equal to the 75th percentile of the
overhead GME amounts in such period for all hospitals
(weighted to reflect the full-time equivalent resident counts
for all approved medical residency training programs),
subject to clause (iv), the hospital's approved FTE resident
amount (for periods beginning on or after October 1, 1997)
shall be reduced from the amount otherwise applicable (as
previously reduced under this subparagraph) by an overhead
reduction amount. The overhead reduction amount is equal to
the lesser of--
``(I) 20 percent of the reference reduction amount
(described in clause (iii)) for the period, or
``(II) 15 percent of the hospital's overhead GME amount for
the period (as otherwise determined before the reduction
provided under this subparagraph for the period involved).
``(ii) Overhead gme amount.--For purposes of this
subparagraph, the term `overhead GME amount' means, for a
hospital for a period, the product of--
``(I) the percentage of the hospital's approved FTE
resident amount for the base period that is not attributable
to resident salaries and fringe benefits, and
``(II) the hospital's approved FTE resident amount for the
period involved.
``(iii) Reference reduction amount.--
``(I) In general.--The reference reduction amount described
in this clause for a hospital for a cost reporting period is
the base difference (described in subclause (II)) updated, in
a compounded manner for each period from the base period to
the period involved, by the update applied for such period to
the hospital's approved FTE resident amount.
``(II) Base difference.--The base difference described in
this subclause for a hospital is the amount by which the
hospital's overhead GME amount in the base period exceeded
the 75th percentile of such amounts (as described in clause
(i)).
``(iv) Maximum reduction to 75th percentile.--In no case
shall the reduction under this subparagraph effected for a
hospital for a period (below the amount that would otherwise
apply for the period if this subparagraph did not apply for
any period) exceed the reference reduction amount for the
hospital for the period.
``(v) Base period.--For purposes of this subparagraph, the
term `base period' means the cost reporting period beginning
in fiscal year 1984 or the period used to establish the
hospital's approved FTE resident amount for hospitals that
did not have approved residency training programs in fiscal
year 1984.
``(vi) Rules for hospitals initiating residency training
programs.--The Secretary shall establish rules for the
application of this subparagraph in the case of a hospital
that initiates medical residency training programs during or
after the base period.''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply to per resident payment amounts attributable to
periods beginning on or after October 1, 1997.
SEC. 4733. PERMITTING PAYMENT TO NON-HOSPITAL PROVIDERS.
(a) In General.--Section 1886 (42 U.S.C. 1395ww) is amended
by adding at the end the following:
``(k) Payment to Non-Hospital Providers.--
``(1) Report.--The Secretary shall submit to Congress, not
later than 18 months after the date of the enactment of this
subsection, a proposal for payment to qualified non-hospital
providers for their direct costs of medical education, if
those costs are incurred in the operation of an approved
medical residency training program described in subsection
(h). Such proposal shall specify the amounts, form, and
manner in which such payments will be made and the portion of
such payments that will be made from each of the trust funds
under this title.
``(2) Effectiveness.--Except as otherwise provided in law,
the Secretary may implement such proposal for residency years
beginning not earlier than 6 months after the date of
submittal of the report under paragraph (1).
``(3) Qualified non-hospital providers.--For purposes of
this subsection, the term `qualified non-hospital provider'
means--
``(A) a Federally qualified health center, as defined in
section 1861(aa)(4);
``(B) a rural health clinic, as defined in section
1861(aa)(2); and
``(C) such other providers (other than hospitals) as the
Secretary determines to be appropriate.''.
(b) Prohibition on Double Payments; Budget Neutrality
Adjustment.--Section 1886(h)(3)(B) (42 U.S.C.
1395ww(h)(3)(B)) is amended by adding at the end the
following:
``The Secretary shall reduce the aggregate approved amount to
the extent payment is made under subsection (k) for residents
included in the hospital's count of full-time equivalent
residents and, in the case of residents not included in any
such count, the Secretary shall provide for such a reduction
in aggregate approved amounts under this subsection as will
assure that the application of subsection (k) does not result
in any increase in expenditures under this title in excess of
those that would have occurred if subsection (k) were not
applicable.''.
SEC. 4734. INCENTIVE PAYMENTS UNDER PLANS FOR VOLUNTARY
REDUCTION IN NUMBER OF RESIDENTS.
Section 1886(h) (42 U.S.C. 1395ww(h)) is further amended by
adding at the end the following new paragraph:
``(6) Incentive payment under plans for voluntary reduction
in number of residents.--
``(A) In general.--In the case of a voluntary residency
reduction plan for which an application is approved under
subparagraph (B), the qualifying entity submitting the plan
shall be paid an applicable hold harmless percentage (as
specified in subparagraph (E)) of the sum of--
``(i) amount (if any) by which--
``(I) the amount of payment which would have been made
under this subsection if there had been a 5 percent reduction
in the number of full-time equivalent residents in the
approved medical education training programs of the
qualifying entity as of June 30, 1997, exceeds
``(II) the amount of payment which is made under this
subsection, taking into account the reduction in such number
effected under the reduction plan; and
``(ii) the amount of the reduction in payment under
1886(d)(5)(B) (for hospitals participating in the qualifying
entity) that is attributable to the reduction in number of
residents effected under the plan below 95 percent of the
number of full-time equivalent residents in such programs of
such entity as of June 30, 1997.
``(B) Approval of plan applications.--The Secretary may not
approve the application of an qualifying entity unless--
``(i) the application is submitted in a form and manner
specified by the Secretary and by not later than March 1,
2000,
``(ii) the application provides for the operation of a plan
for the reduction in the number of full-time equivalent
residents in the approved medical residency training programs
of the entity consistent with the requirements of
subparagraph (D);
``(iii) the entity elects in the application whether such
reduction will occur over--
``(I) a period of not longer than 5 residency training
years, or
``(II) a period of 6 residency training years,
except that a qualifying entity described in subparagraph
(C)(i)(III) may not make the election described in subclause
(II); and
``(iv) the Secretary determines that the application and
the entity and such plan meet such other requirements as the
Secretary specifies in regulations.
``(C) Qualifying entity.--
``(i) In general.--For purposes of this paragraph, any of
the following may be a qualifying entity:
``(I) Individual hospitals operating one or more approved
medical residency training programs.
``(II) Subject to clause (ii), two or more hospitals that
operate such programs and apply for treatment under this
paragraph as a single qualifying entity.
``(III) Subject to clause (iii), a qualifying consortium
(as described in section 4735 of the Balanced Budget Act of
1997).
``(ii) Additional requirement for joint programs.--In the
case of an application by a qualifying entity described in
clause (i)(II), the Secretary may not approve the application
unless the application represents that the qualifying entity
either--
``(I) in the case of an entity that meets the requirements
of clause (v) of subparagraph (D) will not reduce the number
of full-time equivalent residents in primary care during the
period of the plan, or
``(II) in the case of another entity will not reduce the
proportion of its residents in primary care (to the total
number of residents) below such proportion as in effect as of
the applicable time described in subparagraph (D)(vi).
``(iii) Additional requirement for consortia.--In the case
of an application by a qualifying entity described in clause
(i)(III), the Secretary may not approve the application
unless the application represents that the qualifying entity
will not reduce the proportion of its residents in primary
care (to the total number of residents) below such proportion
as in effect as of the applicable time described in
subparagraph (D)(vi).
``(D) Residency reduction requirements.--
``(i) Individual hospital applicants.--In the case of a
qualifying entity described in subparagraph (C)(i)(I), the
number of full-time equivalent residents in all the approved
medical residency training programs operated by or through
the entity shall be reduced as follows:
``(I) If base number of residents exceeds 750 residents, by
a number equal to at least 20 percent of such base number.
``(II) Subject to subclause (IV), if base number of
residents exceeds 500, but is less than 750, residents, by
150 residents.
``(III) Subject to subclause (IV), if base number of
residents does not exceed 500 residents, by a number equal to
at least 25 percent of such base number.
``(IV) In the case of a qualifying entity which is
described in clause (v) and which elects treatment under this
subclause, by a number equal to at least 20 percent of such
base number.
``(ii) Joint applicants.--In the case of a qualifying
entity described in subparagraph (C)(i)(II), the number of
full-time equivalent residents in all the approved medical
residency training programs operated by or through the entity
shall be reduced as follows:
[[Page H4473]]
``(I) Subject to subclause (II), by a number equal to at
least 25 percent of such base number.
``(II) In the case of a qualifying entity which is
described in clause (v) and which elects treatment under this
subclause, by a number equal to at least 20 percent of such
base number.
``(iii) Consortia.--In the case of a qualifying entity
described in subparagraph (C)(i)(III), the number of full-
time equivalent residents in all the approved medical
residency training programs operated by or through the entity
shall be reduced by a number equal to at least 20 percent of
such base number.
``(iv) Manner of reduction.--The reductions specified under
the preceding provisions of this subparagraph for a
qualifying entity shall be below the base number of residents
for that entity and shall be fully effective not later than--
``(I) the 5th residency training year in which the
application under subparagraph (B) is effective, in the case
of an entity making the election described in subparagraph
(B)(iii)(I), or
``(II) the 6th such residency training year, in the case of
an entity making the election described in subparagraph
(B)(iii)(II).
``(v) Entities providing assurance of maintenance of
primary care residents.--An entity is described in this
clause if--
``(I) the base number of residents for the entity is less
than 750;
``(II) the number of full-time equivalent residents in
primary care included in the base number of residents for the
entity is at least 10 percent of such base number; and
``(III) the entity represents in its application under
subparagraph (B) that there will be no reduction under the
plan in the number of full-time equivalent residents in
primary care.
If a qualifying entity fails to comply with the
representation described in subclause (III), the entity shall
be subject to repayment of all amounts paid under this
paragraph, in accordance with procedures established to carry
out subparagraph (F).
``(vi) Base number of residents defined.--For purposes of
this paragraph, the term `base number of residents' means,
with respect to a qualifying entity operating approved
medical residency training programs, the number of full-time
equivalent residents in such programs (before application of
weighting factors) of the entity as of the most recent cost
reporting period ending before June 30, 1997, or, if less,
for any subsequent cost reporting period that ends before the
date the entity makes application under this paragraph.
``(E) Applicable hold harmless percentage.--
``(i) In general.--For purposes of subparagraph (A), the
`applicable hold harmless percentage' is the percentages
specified in clause (ii) or clause (iii), as elected by the
qualifying entity in the application submitted under
subparagraph (B).
``(ii) 5-year reduction plan.--In the case of an entity
making the election described in subparagraph (B)(iii)(I),
the percentages specified in this clause are, for the--
``(I) first and second residency training years in which
the reduction plan is in effect, 100 percent,
``(II) third such year, 75 percent,
``(III) fourth such year, 50 percent, and
``(IV) fifth such year, 25 percent.
``(iii) 6-year reduction plan.--In the case of an entity
making the election described in subparagraph (B)(iii)(II),
the percentages specified in this clause are, for the--
``(I) first residency training year in which the reduction
plan is in effect, 100 percent,
``(II) second such year, 95 percent,
``(III) third such year, 85 percent,
``(IV) fourth such year, 70 percent,
``(V) fifth such year, 50 percent, and
``(VI) sixth such year, 25 percent.
``(F) Penalty for increase in number of residents in
subsequent years.--If payments are made under this paragraph
to a qualifying entity, if the entity (or any hospital
operating as part of the entity) increases the number of
full-time equivalent residents above the number of such
residents permitted under the reduction plan as of the
completion of the plan, then, as specified by the Secretary,
the entity is liable for repayment to the Secretary of the
total amounts paid under this paragraph to the entity.
``(G) Treatment of rotating residents.--In applying this
paragraph, the Secretary shall establish rules regarding the
counting of residents who are assigned to institutions the
medical residency training programs in which are not covered
under approved applications under this paragraph.''.
(b) Relation to Demonstration Projects and Authority.--
(1) Section 1886(h)(6) of the Social Security Act, added by
subsection (a), shall not apply to any residency training
program with respect to which a demonstration project
described in paragraph (3) has been approved by the Health
Care Financing Administration as of May 27, 1997. The
Secretary of Health and Human Services shall take such
actions as may be necessary to assure that (in the manner
described in subparagraph (A) of such section) in no case
shall payments be made under such a project with respect to
the first 5 percent reduction in the base number of full-time
equivalent residents otherwise used under the project.
(2) Effective May 27, 1997, the Secretary of Health and
Human Services is not authorized to approve any demonstration
project described in paragraph (3) for any residency training
year beginning before July 1, 2006.
(3) A demonstration project described in this paragraph is
a project that provides for additional payments under title
XVIII of the Social Security Act in connection with reduction
in the number of residents in a medical residency training
program.
(c) Interim, Final Regulations.--In order to carry out the
amendment made by subsection (a) in a timely manner, the
Secretary of Health and Human Services may first promulgate
regulations, that take effect on an interim basis, after
notice and pending opportunity for public comment, by not
later than 6 months after the date of the enactment of this
Act.
SEC. 4735. DEMONSTRATION PROJECT ON USE OF CONSORTIA.
(a) In General.--The Secretary of Health and Human Services
(in this section referred to as the Secretary) shall
establish a demonstration project under which, instead of
making payments to teaching hospitals pursuant to section
1886(h) of the Social Security Act, the Secretary shall make
payments under this section to each consortium that meets the
requirements of subsection (b).
(b) Qualifying Consortia.--For purposes of subsection (a),
a consortium meets the requirements of this subsection if the
consortium is in compliance with the following:
(1) The consortium consists of an approved medical
residency training program in a teaching hospital and one or
more of the following entities:
(A) A school of allopathic medicine or osteopathic
medicine.
(B) Another teaching hospital, which may be a children's
hospital.
(C) Another approved medical residency training program.
(D) A Federally qualified health center.
(E) A medical group practice.
(F) A managed care entity.
(G) An entity furnishing outpatient services.
(I) Such other entity as the Secretary determines to be
appropriate.
(2) The members of the consortium have agreed to
participate in the programs of graduate medical education
that are operated by the entities in the consortium.
(3) With respect to the receipt by the consortium of
payments made pursuant to this section, the members of the
consortium have agreed on a method for allocating the
payments among the members.
(4) The consortium meets such additional requirements as
the Secretary may establish.
(c) Amount and Source of Payment.--The total of payments to
a qualifying consortium for a fiscal year pursuant to
subsection (a) shall not exceed the amount that would have
been paid under section 1886(h) of the Social Security Act
for the teaching hospital (or hospitals) in the consortium.
Such payments shall be made in such proportion from each of
the trust funds established under title XVIII of such Act as
the Secretary specifies.
SEC. 4736. RECOMMENDATIONS ON LONG-TERM PAYMENT POLICIES
REGARDING FINANCING TEACHING HOSPITALS AND
GRADUATE MEDICAL EDUCATION.
(a) In General.--The Medicare Payment Advisory Commission
(established under section 1805 of the Social Security Act
and in this section referred to as the ``Commission'') shall
examine and develop recommendations on whether and to what
extent medicare payment policies and other Federal policies
regarding teaching hospitals and graduate medical education
should be reformed. Such recommendations shall include
recommendations regarding each of the following:
(1) The financing of graduate medical education, including
consideration of alternative broad-based sources of funding
for such education and models for the distribution of
payments under any all-payer financing mechanism.
(2) The financing of teaching hospitals, including
consideration of the difficulties encountered by such
hospitals as competition among health care entities
increases. Matters considered under this paragraph shall
include consideration of the effects on teaching hospitals of
the method of financing used for the MedicarePlus program
under part C of title XVIII of the Social Security Act.
(3) Possible methodologies for making payments for graduate
medical education and the selection of entities to receive
such payments. Matters considered under this paragraph shall
include--
(A) issues regarding children's hospitals and approved
medical residency training programs in pediatrics, and
(B) whether and to what extent payments are being made (or
should be made) for training in the various nonphysician
health professions, including social workers and
psychologists.
(4) Federal policies regarding international medical
graduates.
(5) The dependence of schools of medicine on service-
generated income.
(6) Whether and to what extent the needs of the United
States regarding the supply of physicians, in the aggregate
and in different specialties, will change during the 10-year
period beginning on October 1, 1997, and whether and to what
extent any such changes will have significant financial
effects on teaching hospitals.
(7) Methods for promoting an appropriate number, mix, and
geographical distribution of health professionals.
(c) Consultation.--In conducting the study under subsection
(a), the Commission
[[Page H4474]]
shall consult with the Council on Graduate Medical Education
and individuals with expertise in the area of graduate
medical education, including--
(1) deans from allopathic and osteopathic schools of
medicine;
(2) chief executive officers (or equivalent administrative
heads) from academic health centers, integrated health care
systems, approved medical residency training programs, and
teaching hospitals that sponsor approved medical residency
training programs;
(3) chairs of departments or divisions from allopathic and
osteopathic schools of medicine, schools of dentistry, and
approved medical residency training programs in oral surgery;
(4) individuals with leadership experience from
representative fields of non-physician health professionals;
(5) individuals with substantial experience in the study of
issues regarding the composition of the health care workforce
of the United States; and
(6) individuals with expertise on the financing of health
care.
(d) Report.--Not later than 2 years after the date of the
enactment of this Act, the Commission shall submit to the
Congress a report providing its recommendations under this
section and the reasons and justifications for such
recommendations.
SEC. 4737. MEDICARE SPECIAL REIMBURSEMENT RULE FOR CERTAIN
COMBINED RESIDENCY PROGRAMS.
(a) In General.--Section 1886(h)(5)(G) (42 U.S.C.
1395ww(h)(5)(G)) is amended--
(1) in clause (i), by striking ``and (iii)'' and inserting
``, (iii), and (iv)''; and
(2) by adding at the end the following:
``(iv) Special rule for certain combined residency
programs.--(I) In the case of a resident enrolled in a
combined medical residency training program in which all of
the individual programs (that are combined) are for training
a primary care resident (as defined in subparagraph (H)), the
period of board eligibility shall be the minimum number of
years of formal training required to satisfy the requirements
for initial board eligibility in the longest of the
individual programs plus one additional year.
``(II) A resident enrolled in a combined medical residency
training program that includes an obstetrics and gynecology
program shall qualify for the period of board eligibility
under subclause (I) if the other programs such resident
combines with such obstetrics and gynecology program are for
training a primary care resident.''.
(b) Effective Date.--The amendments made by subsection (a)
apply to combined medical residency programs for residency
years beginning on or after July 1, 1998.
CHAPTER 5--OTHER PROVISIONS
SEC. 4741. CENTERS OF EXCELLENCE.
(a) In General.--Title XVIII is amended by inserting after
section 1888 the following:
``centers of excellence
``Sec. 1889. (a) In General.--The Secretary shall use a
competitive process to contract with specific hospitals or
other entities for furnishing services related to surgical
procedures, and for furnishing services (unrelated to
surgical procedures) to hospital inpatients that the
Secretary determines to be appropriate. The services may
include any services covered under this title that the
Secretary determines to be appropriate, including post-
hospital services.
``(b) Quality Standards.--
``(1) In general.--Only entities that meet quality
standards established by the Secretary shall be eligible to
contract under this section. Contracting entities shall
implement a quality improvement plan approved by the
Secretary.
``(2) Participation decision based on quality.--Subject to
subsection (c), the Secretary shall consider quality as the
primary factor in selecting hospitals or other entities to
enter into contracts under this section.
``(c) Payment.--Payment under this section shall be made on
the basis of negotiated all-inclusive rates. The amount of
payment made by the Secretary to an entity under this title
for services covered under a contract shall not exceed the
aggregate amount of the payments that the Secretary would
have otherwise made for the services.
``(d) Contract Period.--A contract period shall be 3 years
(subject to renewal), so long as the entity continues to meet
quality and other contractual standards.
``(e) Incentives for Use of Centers.--Entities under a
contract under this section may furnish additional services
(at no cost to an individual entitled to benefits under this
title) or waive cost-sharing, subject to the approval of the
Secretary.
``(f) Limit on Number of Centers.--The Secretary shall
limit the number of centers in a geographic area to the
number needed to meet projected demand for contracted
services.''.
(b) Effective Date.--The amendment made by subsection (a)
applies to services furnished on or after October 1, 1997.
SEC. 4742. MEDICARE PART B SPECIAL ENROLLMENT PERIOD AND
WAIVER OF PART B LATE ENROLLMENT PENALTY AND
MEDIGAP SPECIAL OPEN ENROLLMENT PERIOD FOR
CERTAIN MILITARY RETIREES AND DEPENDENTS.
(a) Medicare Part B Special Enrollment Period; Waiver of
Part B Penalty for Late Enrollment.--
(1) In general.--In the case of any eligible individual (as
defined in subsection (c)), the Secretary of Health and Human
Services shall provide for a special enrollment period during
which the individual may enroll under part B of title XVIII
of the Social Security Act. Such period shall be for a period
of 6 months and shall begin with the first month that begins
at least 45 days after the date of the enactment of this Act.
(2) Coverage period.--In the case of an eligible individual
who enrolls during the special enrollment period provided
under paragraph (1), the coverage period under part B of
title XVIII of the Social Security Act shall begin on the
first day of the month following the month in which the
individual enrolls.
(3) Waiver of part b late enrollment penalty.--In the case
of an eligible individual who enrolls during the special
enrollment period provided under paragraph (1), there shall
be no increase pursuant to section 1839(b) of the Social
Security Act in the monthly premium under part B of title
XVIII of such Act.
(b) Medigap Special Open Enrollment Period.--
Notwithstanding any other provision of law, an issuer of a
medicare supplemental policy (as defined in section 1882(g)
of the Social Security Act)--
(1) may not deny or condition the issuance or effectiveness
of a medicare supplemental policy that has a benefit package
classified as ``A'', ``B'', ``C'', or ``F'' under the
standards established under section 1882(p)(2) of the Social
Security Act (42 U.S.C. 1395rr(p)(2)); and
(2) may not discriminate in the pricing of the policy on
the basis of the individual's health status, medical
condition (including both physical and mental illnesses),
claims experience, receipt of health care, medical history,
genetic information, evidence of insurability (including
conditions arising out of acts of domestic violence), or
disability;
in the case of an eligible individual who seeks to enroll
(and is enrolled) during the 6-month period described in
subsection (a)(1).
(c) Eligible Individual Defined.--In this section, the term
``eligible individual'' means an individual--
(1) who, as of the date of the enactment of this Act, has
attained 65 years of age and was eligible to enroll under
part B of title XVIII of the Social Security Act, and
(2) who at the time the individual first satisfied
paragraph (1) or (2) of section 1836 of the Social Security
Act--
(A) was a covered beneficiary (as defined in section
1072(5) of title 10, United States Code), and
(B) did not elect to enroll (or to be deemed enrolled)
under section 1837 of the Social Security Act during the
individual's initial enrollment period.
The Secretary of Health and Human Services shall consult with
the Secretary of Defense in the identification of eligible
individuals.
SEC. 4743. COMPETITIVE BIDDING FOR CERTAIN ITEMS AND
SERVICES.
(a) Establishment of Demonstration.--Not later than 1 year
after the date of the enactment of this Act, the Secretary of
Health and Human Services shall establish and operate over a
2-year period a demonstration project in 2 geographic regions
selected by the Secretary under which (notwithstanding any
provision of title XVIII of the Social Security Act to the
contrary) the amount of payment made under the medicare
program for a selected item or service furnished in the
region shall be equal to the price determined pursuant to a
competitive bidding process which meets the requirements of
subsection (b).
(b) Requirements for Competitive Bidding Process.--The
competitive bidding process used under the demonstration
project under this section shall meet such requirements as
the Secretary may impose to ensure the cost-effective
delivery to medicare beneficiaries in the project region of
items and services of high quality.
(c) Determination of Selected Items or Services.--The
Secretary shall select items and services to be subject to
the demonstration project under this section if the Secretary
determines that the use of competitive bidding with respect
to the item or service under the project will be appropriate
and cost-effective. In determining the items or services to
be selected, the Secretary shall consult with an advisory
taskforce which includes representatives of providers and
suppliers of items and services (including small business
providers and suppliers) in each geographic region in which
the project will be effective.
Subtitle I--Medical Liability Reform
CHAPTER 1--GENERAL PROVISIONS
SEC. 4801. FEDERAL REFORM OF HEALTH CARE LIABILITY ACTIONS.
(a) Applicability.--This subtitle governs any health care
liability action brought in any State or Federal court,
except that this subtitle shall not apply to an action for
damages arising from a vaccine-related injury or death to the
extent that title XXI of the Public Health Service Act
applies to the action.
(b) Preemption.--This subtitle shall preempt any State or
applicable Federal law to the extent such law is inconsistent
with the limitations contained in this subtitle. This
subtitle shall not preempt any State or applicable Federal
law that provides for defenses or places limitations on a
person's liability in addition to those contained in this
subtitle or otherwise imposes greater restrictions than those
provided in this subtitle.
(c) Effect on Sovereign Immunity and Choice of Law or
Venue.--Nothing in subsection (b) shall be construed to--
(1) waive or affect any defense of sovereign immunity
asserted by any State under any provision of law;
[[Page H4475]]
(2) waive or affect any defense of sovereign immunity
asserted by the United States;
(3) affect the applicability of any provision of chapter 97
of title 28, United States Code;
(4) preempt State choice-of-law rules with respect to
claims brought by a foreign nation or a citizen of a foreign
nation; or
(5) affect the right of any court to transfer venue or to
apply the law of a foreign nation or to dismiss a claim of a
foreign nation or of a citizen of a foreign nation on the
ground of inconvenient forum.
(d) Amount in Controversy.--In an action to which this
subtitle applies and which is brought under section 1332 of
title 28, United States Code, the amount of noneconomic
damages or punitive damages, and attorneys' fees or costs,
shall not be included in determining whether the matter in
controversy exceeds the sum or value of $50,000.
(e) Federal Court Jurisdiction Not Established on Federal
Question Grounds.--Nothing in this subtitle shall be
construed to establish any jurisdiction in the district
courts of the United States over health care liability
actions on the basis of section 1331 or 1337 of title 28,
United States Code.
SEC. 4802. DEFINITIONS.
As used in this subtitle:
(1) Actual damages.--The term ``actual damages'' means
damages awarded to pay for economic loss.
(2) Alternative dispute resolution system; adr.--The term
``alternative dispute resolution system'' or ``ADR'' means a
system established under Federal or State law that provides
for the resolution of health care liability claims in a
manner other than through health care liability actions.
(3) Claimant.--The term ``claimant'' means any person who
brings a health care liability action and any person on whose
behalf such an action is brought. If such action is brought
through or on behalf of an estate, the term includes the
claimant's decedent. If such action is brought through or on
behalf of a minor or incompetent, the term includes the
claimant's legal guardian.
(4) Clear and convincing evidence.--The term ``clear and
convincing evidence'' is that measure or degree of proof that
will produce in the mind of the trier of fact a firm belief
or conviction as to the truth of the allegations sought to be
established, except that such measure or degree of proof is
more than that required under preponderance of the evidence
but less than that required for proof beyond a reasonable
doubt.
(5) Collateral source payments.--The term ``collateral
source payments'' means any amount paid or reasonably likely
to be paid in the future to or on behalf of a claimant, or
any service, product, or other benefit provided or reasonably
likely to be provided in the future to or on behalf of a
claimant, as a result of an injury or wrongful death,
pursuant to--
(A) any State or Federal health, sickness, income-
disability, accident or workers' compensation Act;
(B) any health, sickness, income-disability, or accident
insurance that provides health benefits or income-disability
coverage;
(C) any contract or agreement of any group, organization,
partnership, or corporation to provide, pay for, or reimburse
the cost of medical, hospital, dental, or income disability
benefits; and
(D) any other publicly or privately funded program.
(6) Device.--The term ``device'' has the same meaning given
such term in section 201(h) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 321(h)).
(7) Drug.--The term ``drug'' has the same meaning given
such term in section 201(g)(1) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 321(g)(1)).
(8) Economic loss.--The term ``economic loss'' means any
pecuniary loss resulting from harm (including the loss of
earnings or other benefits related to employment, medical
expense loss, replacement services loss, loss due to death,
burial costs, and loss of business or employment
opportunities), to the extent recovery for such loss is
allowed under applicable State or Federal law.
(9) Harm.--The term ``harm'' means--
(A) any physical injury, illness, or death of the claimant,
or
(B) any mental anguish or emotional injury to the claimant
caused by or causing the claimant physical injury or illness.
(10) Health care liability action.--The term ``health care
liability action'' means a civil action brought in a State or
Federal court against a health care provider, an entity which
is obligated to provide or pay for health benefits under any
health plan (including any person or entity acting under a
contract or arrangement to provide or administer any health
benefit), or the manufacturer, distributor, supplier,
marketer, promoter, or seller of a medical product, in which
the claimant alleges a health care liability claim.
(11) Health care liability claim.--The term ``health care
liability claim'' means a claim in which the claimant alleges
that harm was caused by the provision of (or the failure to
provide) health care services or the use of a medical
product, regardless of the theory of liability on which the
claim is based.
(12) Health care provider.--The term ``health care
provider'' means any individual, organization, or institution
that is engaged in the delivery of health care services in a
State and that is required by the laws or regulations of the
State to be licensed or certified by the State to engage in
the delivery of such services in the State.
(13) Manufacturer.--The term ``manufacturer'' means--
(A) any person who is engaged in a business to produce,
create, make, or construct any product (or component part of
a product) and who (i) designs or formulates the product (or
component part of the product), or (ii) has engaged another
person to design or formulate the product (or component part
of the product);
(B) a product seller, but only with respect to those
aspects of a product (or component part of a product) which
are created or affected when, before placing the product in
the stream of commerce, the product seller produces, creates,
makes or constructs and designs, or formulates, or has
engaged another person to design or formulate, an aspect of
the product (or component part of the product) made by
another person; or
(C) any product seller not described in subparagraph (B)
which holds itself out as a manufacturer to the user of the
product.
(14) Noneconomic damages.--The term ``noneconomic damages''
means damages paid to an individual for pain and suffering,
inconvenience, emotional distress, mental anguish, loss of
society and companionship, injury to reputation, humiliation,
and other subjective, nonpecuniary losses.
(15) Person.--The term ``person'' means any individual,
corporation, company, association, firm, partnership,
society, joint stock company, or any other entity, including
any governmental entity.
(16) Product seller.--
(A) In general.--The term ``product seller'' means a person
who in the course of a business conducted for that purpose--
(i) sells, distributes, rents, leases, prepares, blends,
packages, labels, or otherwise is involved in placing a
product in the stream of commerce; or
(ii) installs, repairs, refurbishes, reconditions, or
maintains the harm-causing aspect of the product.
(B) Exclusion.--The term ``product seller'' does not
include--
(i) a seller or lessor of real property;
(ii) a provider of professional services in any case in
which the sale or use of a product is incidental to the
transaction and the essence of the transaction is the
furnishing of judgment, skill, or services; or
(iii) any person who--
(I) acts in only a financial capacity with respect to the
sale of a product; or
(II) leases a product under a lease arrangement in which
the lessor does not initially select the leased product and
does not during the lease term ordinarily control the daily
operations and maintenance of the product.
(17) Punitive damages.--The term ``punitive damages'' means
damages awarded against any person not to compensate for
actual injury suffered, but to punish or deter such person or
others from engaging in similar behavior in the future.
(18) State.--The term ``State'' means each of the several
States, the District of Columbia, the Commonwealth of Puerto
Rico, the Virgin Islands, Guam, American Samoa, the Northern
Mariana Islands, the Trust Territories of the Pacific
Islands, and any other territory or possession of the United
States or any political subdivision of any of the foregoing.
SEC. 4803. EFFECTIVE DATE.
This subtitle will apply to any health care liability
action brought in a Federal or State court and to any health
care liability claim subject to an alternative dispute
resolution system, that is initiated on or after the date of
enactment of this subtitle.
CHAPTER 2--UNIFORM STANDARDS FOR HEALTH CARE LIABILITY ACTIONS
SEC. 4811. STATUTE OF LIMITATIONS.
(a) General Rule.--Except as provided in subsection (b), a
health care liability action may be filed not later than 2
years after the date on which the claimant discovered or, in
the exercise of reasonable care, should have discovered--
(1) the harm that is the subject of the action; and
(2) the cause of the harm.
(b) Exception.--A person with a legal disability (as
determined under applicable law) may file a health care
liability action not later than 2 years after the date on
which the person ceases to have the legal disability.
(c) Transitional Provision Relating to Extension of Period
for Bringing Certain Actions.--If any provision of subsection
(a) or (b) shortens the period during which a health care
liability action could be otherwise brought pursuant to
another provision of law, the claimant may, notwithstanding
subsections (a) and (b), bring the health care liability
action not later than 2 years after the date of enactment of
this Act.
SEC. 4812. CALCULATION AND PAYMENT OF DAMAGES.
(a) Treatment of Noneconomic Damages.--
(1) Limitation on noneconomic damages.--The total amount of
noneconomic damages that may be awarded to a claimant for
harm which is the subject of a health care liability action
may not exceed $250,000, regardless of the number of parties
against whom the action is brought or the number of actions
brought with respect to the injury.
(2) Fair share rule for noneconomic damages.--
(A) General rule.--In a health care liability action, the
liability of each defendant for noneconomic damages shall be
several only and shall not be joint.
[[Page H4476]]
(B) Amount of liability.--
(i) In general.--Each defendant shall be liable only for
the amount of noneconomic damages attributable to the
defendant in direct proportion to the percentage of
responsibility of the defendant (determined in accordance
with paragraph (2)) for the harm to the claimant with respect
to which the defendant is liable. The court shall render a
separate judgment against each defendant in an amount
determined pursuant to the preceding sentence.
(ii) Percentage of responsibility.--For purposes of
determining the amount of noneconomic damages attributable to
a defendant under this section, the trier of fact shall
determine the percentage of responsibility of each person
responsible for the claimant's harm, whether or not such
person is a party to the action.
(b) Treatment of Punitive Damages.--
(1) General rule.--Punitive damages may, to the extent
permitted by applicable law, be awarded in a health care
liability action against a defendant if the claimant
establishes by clear and convincing evidence that the harm
suffered was result of conduct manifesting a conscious,
flagrant indifference to the rights or safety of others.
(2) Required proportionality.--The amount of punitive
damages that may be awarded in a health care liability action
shall not exceed 3 times the amount of damages awarded to the
claimant for economic loss, or $250,000, whichever is
greater. This subsection shall be applied by the court, and
application of this subsection shall not be disclosed to the
jury.
(c) Bifurcation at Request of Any Party.--
(1) In general.--At the request of any party the trier of
fact in any action that is subject to this section shall
consider in a separate proceeding, held subsequent to the
determination of the amount of compensatory damages, whether
punitive damages are to be awarded for the harm that is the
subject of the action and the amount of the award.
(2) Inadmissibility of evidence relative only to a claim of
punitive damages in a proceeding concerning compensatory
damages.--If any party requests a separate proceeding under
paragraph (1), in a proceeding to determine whether the
claimant may be awarded compensatory damages, any evidence,
argument, or contention that is relevant only to the claim of
punitive damages, as determined by applicable law, shall be
inadmissible.
(d) Drugs and Devices.--
(1)(A) Punitive damages shall not be awarded against a
manufacturer or product seller of a drug or device which
caused the claimant's harm where--
(i) such drug or device was subject to premarket approval
by the Food and Drug Administration with respect to the
safety of the formulation or performance of the aspect of
such drug or device which caused the claimant's harm or the
adequacy of the packaging or labeling of such drug or device,
and such drug or device was approved by the Food and Drug
Administration; or
(ii) the drug or device is generally recognized as safe and
effective pursuant to conditions established by the Food and
Drug Administration and applicable regulations, including
packaging and labeling regulations.
(B) Subparagraph (A) shall not apply in any case in which
the defendant, before or after premarket approval of a drug
or device--
(i) intentionally and wrongfully withheld from or
misrepresented to the Food and Drug Administration
information concerning such drug or device required to be
submitted under the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 301 et seq.) or section 351 of the Public Health
Service Act (42 U.S.C. 262) that is material and relevant to
the harm suffered by the claimant, or
(ii) made an illegal payment to an official or employee of
the Food and Drug Administration for the purpose of securing
or maintaining approval of such drug or device.
(2) Packaging.--In a health care liability action which is
alleged to relate to the adequacy of the packaging (or
labeling relating to such packaging) of a drug which is
required to have tamper-resistant packaging under regulations
of the Secretary of Health and Human Services (including
labeling regulations related to such packaging), the
manufacturer of the drug shall not be held liable for
punitive damages unless the drug is found by the court by
clear and convincing evidence to be substantially out of
compliance with such regulations.
(e) Periodic Payments for Future Losses.--
(1) General rule.--In any health care liability action in
which the damages awarded for future economic and noneconomic
loss exceed $50,000, a person shall not be required to pay
such damages in a single, lump-sum payment, but shall be
permitted to make such payments periodically based on when
the damages are found likely to occur, with the amount and
schedule of such payments determined by the court.
(2) Finality of judgment.--The judgment of the court
awarding periodic payments under this subsection may not, in
the absence of fraud, be reopened at any time to contest,
amend, or modify the schedule or amount of the payments.
(3) Lump-sum settlements.--This subsection shall not be
construed to preclude a settlement providing for a single,
lump-sum payment.
(f) Treatment of Collateral Source Payments.--
(1) Introduction into evidence.--In any health care
liability action, any defendant may introduce evidence of
collateral source payments. If a defendant elects to
introduce such evidence, the claimant may introduce evidence
of any amount paid or contributed or reasonably likely to be
paid or contributed in the future by or on behalf of the
claimant to secure the right to such collateral source
payments.
(2) No subrogation.--No provider of collateral source
payments shall recover any amount against the claimant or
receive any lien or credit against the claimant's recovery or
be equitably or legally subrogated the right of the claimant
in a health care liability action. This subsection shall
apply to an action that is settled as well as an action that
is resolved by a fact finder.
SEC. 4813. ALTERNATIVE DISPUTE RESOLUTION.
Any ADR used to resolve a health care liability action or
claim shall contain provisions relating to statute of
limitations, non-economic damages, joint and several
liability, punitive damages, collateral source rule, and
periodic payments which are identical to the provisions
relating to such matters in this subtitle.
TITLE V--COMMITTEE ON EDUCATION AND THE WORKFORCE
Subtitle A--TANF Block Grant
SEC. 5001. WELFARE-TO-WORK GRANTS.
(a) Grants to States.--Section 403(a) of the Social
Security Act (42 U.S.C. 603(a)) is amended by adding at the
end the following:
``(5) Welfare-to-work grants.--
``(A) Formula grants.--
``(i) Entitlement.--A State shall be entitled to receive
from the Secretary a grant for each fiscal year specified in
subparagraph (H) of this paragraph for which the State is a
welfare-to-work State, in an amount that does not exceed the
lesser of--
``(I) 2 times the total of the expenditures by the State
(excluding qualified State expenditures (as defined in
section 409(a)(7)(B)(i)) and expenditures described in
section 409(a)(7)(B)(iv)) during the fiscal year for
activities described in subpargraph (C)(i) of this paragraph;
or
``(II) the allotment of the State under clause (iii) of
this subparagraph for the fiscal year.
``(ii) Welfare-to-work state.--A State shall be considered
a welfare-to-work State for a fiscal year for purposes of
this subparagraph if the Secretary, after consultation (and
the sharing of any plan or amendment thereto submitted under
this clause) with the Secretary of Health and Human Services
and the Secretary of Housing and Urban Development,
determines that the State meets the following requirements:
``(I) The State has submitted to the Secretary (in the form
of an addendum to the State plan submitted under section 402)
a plan which--
``(aa) describes how, consistent with this subparagraph,
the State will use any funds provided under this subparagraph
during the fiscal year;
``(bb) specifies the formula to be used pursuant to clause
(vi) to distribute funds in the State, and describes the
process by which the formula was developed; and
``(cc) contains evidence that the plan was developed
through a collaborative process that, at a minimum, included
sub-State areas.
``(II) The State has provided the Secretary with an
estimate of the amount that the State intends to expend
during the fiscal year (excluding expenditures described in
section 409(a)(7)(B)(iv)) for activities described in
subparagraph (C)(i) of this paragraph.
``(III) The State has agreed to negotiate in good faith
with the Secretary of Health and Human Services with respect
to the substance of any evaluation under section 413(j), and
to cooperate with the conduct of any such evaluation.
``(IV) The State is an eligible State for the fiscal year.
``(iii) Allotments to welfare-to-work states.--The
allotment of a welfare-to-work State for a fiscal year shall
be the available amount for the fiscal year multiplied by the
State percentage for the fiscal year.
``(iv) Available amount.--As used in clause (iii), the term
`available amount' means, for a fiscal year, 95 percent of--
``(I) the amount specified in subparagraph (H) for the
fiscal year; minus
``(II) the total of the amounts reserved pursuant to
subparagraphs (F) and (G) for the fiscal year.
``(v) State percentage.--As used in clause (iii), the term
`State percentage' means, with respect to a fiscal year, \1/
2\ of the sum of--
``(aa) the percentage represented by the number of
individuals in the State whose income is less than the
poverty line divided by the number of such individuals in the
United States; and
``(bb) the percentage represented by the number of
individuals who are adult recipients of assistance under the
State program funded under this part divided by the number of
individuals in the United States who are adult recipients of
assistance under any State program funded under this part.
``(vi) Distribution of funds within states.--
``(I) In general.--A State to which a grant is made under
this subparagraph shall distribute not less than 85 percent
of the grant funds among the service delivery areas in the
State, in accordance with a formula which--
``(aa) determines the amount to be distributed for the
benefit of a service delivery area
[[Page H4477]]
in proportion to the number (if any) by which the number of
individuals residing in the service delivery area with an
income that is less than the poverty line exceeds 5 percent
of the population of the service delivery area, relative to
such number for the other service delivery areas in the
State, and accords a weight of not less than 50 percent to
this factor;
``(bb) may determine the amount to be distributed for the
benefit of a service delivery area in proportion to the
number of adults residing in the service delivery area who
are recipients of assistance under the State program funded
under this part (whether in effect before or after the
amendments made by section 103(a) of the Personal
Responsibility and Work Opportunity Reconciliation Act first
applied to the State) for at least 30 months (whether or not
consecutive) relative to the number of such adults residing
in the other service delivery areas in the State; and
``(cc) may determine the amount to be distributed for the
benefit of a service delivery area in proportion to the
number of unemployed individuals residing in the service
delivery area relative to the number of such individuals
residing in the other service delivery areas in the State.
``(II) Special rule.--Notwithstanding subclause (I), if the
formula used pursuant to subclause (I) would result in the
distribution of less than $100,000 during a fiscal year for
the benefit of a service delivery area, then in lieu of
distributing such sum in accordance with the formula, such
sum shall be available for distribution under subclause (III)
during the fiscal year.
``(III) Projects to help long-term recipients of assistance
into the work force.--The Governor of a State to which a
grant is made under this subparagraph may distribute not more
than 15 percent of the grant funds (plus any amount required
to be distributed under this subclause by reason of subclause
(II)) to projects that appear likely to help long-term
recipients of assistance under the State program funded under
this part (whether in effect before or after the amendments
made by section 103(a) of the Personal Responsibility and
Work Opportunity Reconciliation Act first applied to the
State) enter the work force.
``(vii) Administration.--
``(I) In general.--A grant made under this subparagraph to
a State shall be administered by the State agency that is
administering, or supervising the administration of, the
State program funded under this part, or by another State
agency designated by the Governor of the State.
``(II) Spending by private industry councils.--The private
industry council for a service delivery area shall have sole
authority, in coordination with the chief elected official
(as described in section 103(c) of the Job Training
Partnership Act) of the service delivery area, to expend the
amounts provided for a service delivery area under
subparagraph (vi)(I).
``(B) Demonstration projects.--
``(i) In general.--The Secretary, in consultation with the
Secretary of Health and Human Services and the Secretary of
Housing and Urban Development, shall make grants in
accordance with this subparagraph among eligible applicants
based on the likelihood that the applicant can successfully
make long-term placements of individuals into the work force.
``(ii) Eligible applicants.--As used in clause (i), the
term `eligible applicant' means a private industry council or
a political subdivision of a State.
``(iii) Determination of grant amount.--In determining the
amount of a grant to be made under this subparagraph for a
demonstration project proposed by an applicant, the Secretary
shall provide the applicant with an amount sufficient to
ensure that the project has a reasonable opportunity to be
successful, taking into account the number of long-term
recipients of assistance under a State program funded under
this part, the level of unemployment, the job opportunities
and job growth, the poverty rate, and such other factors as
the Secretary deems appropriate, in the area to be served by
the project.
``(iv) Funding.--For grants under this subparagraph for
each fiscal year specified in subparagraph (H), there shall
be available to the Secretary an amount equal to the sum of--
``(I) 5 percent of--
``(aa) the amount specified in subparagraph (H) for the
fiscal year; minus
``(bb) the total of the amounts reserved pursuant to
subparagraphs (F) and (G) for the fiscal year;
``(II) any amount available for grants under this paragraph
for the immediately preceding fiscal year that has not been
obligated;
``(III) any amount reserved pursuant to subparagraph (F)
for the immediately preceding fiscal year that has not been
obligated; and
``(IV) any available amount (as defined in subparagraph
(A)(iv)) for the immediately preceding fiscal year that has
not been obligated by a State or sub-State entity.
``(C) Limitations on use of funds.--
``(i) Allowable activities.--An entity to which funds are
provided under this paragraph may use the funds to move into
the work force recipients of assistance under the program
funded under this part of the State in which the entity is
located, by means of any of the following:
``(I) Job creation through public or private sector
employment wage subsidies.
``(II) On-the-job training.
``(III) Contracts with job placement companies or public
job placement programs.
``(IV) Job vouchers.
``(V) Job retention or support services if such services
are not otherwise available.
``(ii) Required beneficiaries.--An entity that operates a
project with funds provided under this paragraph shall expend
at least 90 percent of all funds provided to the project for
the benefit of recipients of assistance under the program
funded under this part of the State in which the entity is
located who meet the requirements of any of the following
subclauses:
``(I) The individual has received assistance under the
State program funded under this part (whether in effect
before or after the amendments made by section 103 of the
Personal Responsibility and Work Opportunity Reconciliation
Act of 1996 first apply to the State) for at least 30 months
(whether or not consecutive).
``(II) At least 2 of the following apply to the recipient:
``(aa) The individual has not completed secondary school or
obtained a certificate of general equivalency, and has low
skills in reading and mathematics.
``(bb) The individual requires substance abuse treatment
for employment.
``(cc) The individual has a poor work history.
The Secretary shall prescribe such regulations as may be
necessary to interpret this subclause.
``(III) Within 12 months, the individual will become
ineligible for assistance under the State program funded
under this part by reason of a durational limit on such
assistance, without regard to any exemption provided pursuant
to section 408(a)(7)(C) that may apply to the individual.
``(iii) Limitation on applicability of section 404.--The
rules of section 404, other than subsections (b), (f), and
(h) of section 404, shall not apply to a grant made under
this paragraph.
``(iv) Prohibition against provision of services by private
industry council.--A private industry council may not
directly provide services using funds provided under this
paragraph.
``(v) Prohibition against use of grant funds for any other
fund matching requirement.--An entity to which funds are
provided under this paragraph shall not use any part of the
funds to fulfill any obligation of any State, political
subdivision, or private industry council to contribute funds
under other Federal law.
``(vi) Deadline for expenditure.--An entity to which funds
are provided under this paragraph shall remit to the
Secretary any part of the funds that are not expended within
3 years after the date the funds are so provided.
``(D) Individuals with income less than the poverty line.--
For purposes of this paragraph, the number of individuals
with an income that is less than the poverty line shall be
determined based on the methodology used by the Bureau of the
Census to produce and publish intercensal poverty data for
1993 for States and counties.
``(E) Definitions.--As used in this paragraph:
``(i) Private industry council.--The term `private industry
council' means, with respect to a service delivery area, the
private industry council (or successor entity) established
for the service delivery area pursuant to the Job Training
Partnership Act.
``(ii) Secretary.--The term `Secretary' means the Secretary
of Labor, except as otherwise expressly provided.
``(iii) Service delivery area.--The term `service delivery
area' shall have the meaning given such term for purposes of
the Job Training Partnership Act (or successor area).
``(F) Funding for indian tribes.--1 percent of the amount
specified in subparagraph (H) for each fiscal year shall be
reserved for grants to Indian tribes under section 412(a)(3).
``(G) Evaluations.--0.5 percent of the amount specified in
subparagraph (H) for each fiscal year shall be reserved for
use by the Secretary of Health and Human Services to carry
out section 413(j).
``(H) Funding.--The amount specified in this subparagraph
is $1,500,000,000 for each of fiscal years 1998 and 1999.
``(H) Funding.--The amount specified in this subparagraph
is--
``(i) $750,000,000 for fiscal year 1998;
``(ii) $1,250,000,000 for fiscal year 1999; and
``(iii) $1,000,000,000 for fiscal year 2000.
``(I) Budget scoring.--Notwithstanding section 457(b)(2) of
the Balanced Budget and Emergency Deficit Control Act of
1985, the baseline shall assume that no grant shall be made
under this paragraph or under section 412(a)(3) after fiscal
year 2001.''.
(b) Grants to Territories.--Section 1108(a) of such Act (42
U.S.C. 1308(a)) is amended by inserting ``(except section
403(a)(5))'' after ``title IV''.
(c) Grants to Indian Tribes.--Section 412(a) of such Act
(42 U.S.C. 612(a)) is amended by adding at the end the
following:
``(3) Welfare-to-work grants.--
``(A) In general.--The Secretary shall make a grant in
accordance with this paragraph to an Indian tribe for each
fiscal year specified in section 403(a)(5)(H) for which the
Indian tribe is a welfare-to-work tribe, in such amount as
the Secretary deems appropriate, subject to subparagraph (B)
of this paragraph.
[[Page H4478]]
``(B) Welfare-to-work tribe.--An Indian tribe shall be
considered a welfare-to-work tribe for a fiscal year for
purposes of this paragraph if the Indian tribe meets the
following requirements:
``(i) The Indian tribe has submitted to the Secretary (in
the form of an addendum to the tribal family assistance plan,
if any, of the Indian tribe) a plan which describes how,
consistent with section 403(a)(5), the Indian tribe will use
any funds provided under this paragraph during the fiscal
year.
``(ii) The Indian tribe has provided the Secretary with an
estimate of the amount that the Indian tribe intends to
expend during the fiscal year (excluding tribal expenditures
described in section 409(a)(7)(B)(iv)) for activities
described in section 403(a)(5)(C)(i).
``(iii) The Indian tribe has agreed to negotiate in good
faith with the Secretary of Health and Human Services with
respect to the substance of any evaluation under section
413(j), and to cooperate with the conduct of any such
evaluation.
``(C) Limitations on use of funds.--Section 403(a)(5)(C)
shall apply to funds provided to Indian tribes under this
paragraph in the same manner in which such section applies to
funds provided under section 403(a)(5).''.
(d) Funds Received From Grants to be Disregarded in
Applying Durational Limit on Assistance.--Section 408(a)(7)
of such Act (42 U.S.C. 608(a)(7)) is amended by adding at the
end the following:
``(G) Inapplicability to welfare-to-work grants and
assistance.--For purposes of subparagraph (A) of this
paragraph, a grant made under section 403(a)(5) shall not be
considered a grant made under section 403, and assistance
from funds provided under section 403(a)(5) shall not be
considered assistance.''.
(e) Evaluations.--Section 413 of such Act (42 U.S.C. 613)
is amended by adding at the end the following:
``(j) Evaluation of Welfare-To-Work Programs.--The
Secretary--
``(1) shall, in consultation with the Secretary of Labor,
develop a plan to evaluate how grants made under sections
403(a)(5) and 412(a)(3) have been used; and
``(2) may evaluate the use of such grants by such grantees
as the Secretary deems appropriate, in accordance with an
agreement entered into with the grantees after good-faith
negotiations.''.
SEC. 5002. CLARIFICATION OF LIMITATION ON NUMBER OF PERSONS
WHO MAY BE TREATED AS ENGAGED IN WORK BY REASON
OF PARTICIPATION IN EDUCATIONAL ACTIVITIES.
(a) In General.--Section 407(c)(2)(D) of the Social
Security Act (42 U.S.C. 607(c)(2)(D)) is amended to read as
follows:
``(D) Limitation on number of persons who may be treated as
engaged in work by reason of participation in educational
activities.--For purposes of determining monthly
participation rates under paragraphs (1)(B)(i) and (2)(B) of
subsection (b), not more than 20 percent of the number of
individuals in all families and in 2-parent families,
respectively, in a State who are treated as engaged in work
for a month may consist of individuals who are determined to
be engaged in work for the month by reason of participation
in vocational educational training, or deemed to be engaged
in work for the month by reason of subparagraph (C) of this
paragraph.''.
(b) Retroactivity.--The amendment made by subsection (a) of
this section shall take effect as if included in the
enactment of section 103(a) of the Personal Responsibility
and Work Opportunity Reconciliation Act of 1996.
SEC. 5003. PENALTY FOR FAILURE OF STATE TO REDUCE ASSISTANCE
FOR RECIPIENTS REFUSING WITHOUT GOOD CAUSE TO
WORK.
(a) In General.--Section 409(a) of the Social Security Act
(42 U.S.C. 609(a)) is amended by adding at the end the
following:
``(13) Penalty for failure to reduce assistance for
recipients refusing without good cause to work.--
``(A) In general.--If the Secretary determines that a State
to which a grant is made under section 403 in a fiscal year
has violated section 407(e) during the fiscal year, the
Secretary shall reduce the grant payable to the State under
section 403(a)(1) for the immediately succeeding fiscal year
by an amount equal to not less than 1 percent and not more
than 5 percent of the State family assistance grant.
``(B) Penalty based on severity of failure.--The Secretary
shall impose reductions under subparagraph (A) with respect
to a fiscal year based on the degree of noncompliance.''.
(b) Retroactivity.--The amendment made by subsection (a) of
this section shall take effect as if included in the
enactment of section 103(a) of the Personal Responsibility
and Work Opportunity Reconciliation Act of 1996.
SEC. 5004. RULES GOVERNING EXPENDITURE OF FUNDS FOR WORK
EXPERIENCE AND COMMUNITY SERVICE PROGRAMS.
(a) In General.--Section 407 of the Social Security Act (42
U.S.C. 607) is amended by adding at the end the following:
``(j) Rules Governing Expenditure of Funds for Work
Experience and Community Service Programs.--
``(1) In general.--To the extent that a State to which a
grant is made under section 403(a)(5) or any other provision
of section 403 uses the grant to establish or operate a work
experience or community service program, the State may
establish and operate the program in accordance with this
subsection.
``(2) Purpose.--The purpose of a work experience or
community experience program is to provide experience or
training for individuals not able to obtain employment in
order to assist them to move to regular employment. Such a
program shall be designed to improve the employability of
participants through actual work experience to enable
individuals participating in the program to move promptly
into regular public or private employment. Such a program
shall not place individuals in private, for-profit entities.
``(3) Limitation on projects that may be undertaken.--A
work experience or community service program shall be limited
to projects which serve a useful public purpose in fields
such as health, social service, environmental protection,
education, urban and rural development and redevelopment,
welfare, recreation, public facilities, public safety, and
day care, and other purposes identified by the State.
``(4) Maximum hours of participation per month.--A State
that elects to establish a work experience or community
service program shall operate the program so that each
participant participates in the program with the maximum
number of hours that any such individual may be required to
participate in any month being a number equal to--
``(A)(i) the amount of assistance provided during the month
to the family of which the individual is a member under the
State program funded under this part; plus
``(ii) the dollar value equivalent of any benefits provided
during the month to the household of which the individual is
a member under the food stamp program under the Food Stamp
Act of 1977; minus
``(iii) any amount collected by the State as child support
with respect to the family that is retained by the State;
divided by
``(B) the greater of the Federal minimum wage or the
applicable State minimum wage.
``(5) Maximum hours of participation per week.--A State
that elects to establish a work experience or community
service program may not require any participant in any such
program to participate in any such program for a combined
total of more than 40 hours per week.
``(6) Rule of interpretation.--This subsection shall not be
construed as authorizing the provision of assistance under a
State program funded under this part as compensation for work
performed, nor shall a participant be entitled to a salary or
to any other work or training expense provided under any
other provision of law by reason of participation in a work
experience or community service program described in this
subsection.''.
(b) Retroactivity.--The amendment made by subsection (a) of
this section shall take effect as if included in the
enactment of section 103(a) of the Personal Responsibility
and Work Opportunity Reconciliation Act of 1996.
SEC. 5005. STATE OPTION TO TAKE ACCOUNT OF CERTAIN WORK
ACTIVITIES OF RECIPIENTS WITH SUFFICIENT
PARTICIPATION IN WORK EXPERIENCE OR COMMUNITY
SERVICE PROGRAMS.
(a) In General.--Section 407(c) of the Social Security Act
(42 U.S.C. 607(c)) is amended by adding at the end the
following:
``(3) State option to take account of certain work
activities of recipients with sufficient participation in
work experience or community service programs.--
Notwithstanding paragraphs (1) and (2) of this subsection and
subsection (d)(8), for purposes of determining monthly
participation rates under paragraphs (1)(B)(i) and (2)(B) of
subsection (b), an individual who, during a month, has
participated in a work experience or community service
program operated in accordance with subsection (j), for the
maximum number of hours that the individual may be required
to participate in such a program during the month shall be
treated as engaged in work for the month if, during the
month, the individual has participated in any other work
activity for a number of hours that is not less than the
number of hours required by subsection (c)(1) for the month
minus such maximum number of hours.''.
(b) Retroactivity.--The amendment made by subsection (a) of
this section shall take effect as if included in the
enactment of section 103(a) of the Personal Responsibility
and Work Opportunity Reconciliation Act of 1996.
SEC. 5006. WORKER PROTECTIONS.
Section 407(f) of the Social Security Act (42 U.S.C.
607(f)) is amended to read as follows:
``(f) Worker Protections.--
``(1) Nondisplacement in work activities.--
``(A) General prohibition.--Subject to this paragraph, an
adult in a family receiving assistance under a State program
funded under this part attributable to funds provided by the
Federal Government may fill a vacant employment position in
order to engage in a work activity.
``(B) Prohibition against violation of contracts.--A work
activity shall not violate an existing contract for services
or collective bargaining agreement.
``(C) Other prohibitions.--An adult participant in a work
activity shall not be employed or assigned--
``(i) when any other individual is on layoff from the same
or any substantially equivalent job; or
``(ii) if the employer has terminated the employment of any
regular employee or otherwise caused an involuntary reduction
if its
[[Page H4479]]
workforce with the intention of filling the vacancy so
created with the participant.
``(2) Health and safety.--Health and safety standards
established under Federal and State law otherwise applicable
to working conditions of employees shall be equally
applicable to working conditions of participants engaged in a
work activity.
``(3) Nondiscrimination.--In addition to the protections
provided under the provisions of law specified in section
408(c), an individual may not be discriminated against with
respect to participation in work activities by reason of
gender.
``(4) Grievance procedure.--
``(A) In general.--Each State to which a grant is made
under section 403 shall establish and maintain a procedure
for grievances or complaints from employees alleging
violations of paragraph (1) and participants in work
activities alleging violations of paragraph (1), (2), or (3).
``(B) Hearing.--The procedure shall include an opportunity
for a hearing.
``(C) Remedies.--The procedure shall include remedies for
violation of paragraph (1), (2), or (3), which may include--
``(i) prohibition against placement of a participant with
an employer that has violated paragraph (1), (2), or (3);
``(ii) where applicable, reinstatement of an employee,
payment of lost wages and benefits, and reestablishment of
other relevant terms, conditions and privileges of
employment; and
``(iii) where appropriate, other equitable relief.
``(5) Nonpreemption of state nondisplacement laws.--The
provisions of this subsection relating to nondisplacement of
employees shall not be construed to preempt any provision of
State law relating to nondisplacement of employees that
affords greater protections to employees than is afforded by
such provisions of this subsection.''.
Subtitle B--Higher Education Programs
SEC. 5101. MANAGEMENT AND RECOVERY OF RESERVES.
(a) Amendment.--Section 422 of the Higher Education Act of
1965 (20 U.S.C. 1072) is amended by adding after subsection
(g) the following new subsection:
``(h) Recall of Reserves; Limitations on Use of Reserve
Funds and Assets.--(1) Notwithstanding any other provision of
law, the Secretary shall, except as otherwise provided in
this subsection, recall $1,000,000,000 from the reserve funds
held by guaranty agencies on September 1, 2002.
``(2) Funds recalled by the Secretary under this subsection
shall be deposited in the Treasury.
``(3) The Secretary shall require each guaranty agency to
return reserve funds under paragraph (1) based on such
agency's required share of recalled reserve funds held by
guaranty agencies as of September 30, 1996. For purposes of
this paragraph, a guaranty agency's required share of
recalled reserve funds shall be determined as follows:
``(A) The Secretary shall compute each agency's reserve
ratio by dividing (i) the amount held in such agency's
reserve funds as of September 30, 1996 (but reflecting later
accounting or auditing adjustments approved by the
Secretary), by (ii) the original principal amount of all
loans for which such agency has an outstanding insurance
obligation as of such date.
``(B) If the reserve ratio of any agency as computed under
subparagraph (A) exceeds 2.0 percent, the agency's required
share shall include so much of the amounts held in such
agency's reserve fund as exceed a reserve ratio of 2.0
percent.
``(C) If any additional amount is required to be recalled
under paragraph (1) (after deducting the total of the
required shares calculated under subparagraph (B)), the
agencies' required shares shall include additional amounts--
``(i) determined by imposing on each such agency an equal
percentage reduction in the amount of each agency's reserve
fund remaining after deduction of the amount recalled under
subparagraph (B); and
``(ii) the total of which equals the additional amount that
is required to be recalled under paragraph (1) (after
deducting the total of the required shares calculated under
subparagraph (B)).
``(4) Within 90 days after the beginning of each of fiscal
years 1998 through 2002, each guaranty agency shall transfer
a portion of each agency's required share determined under
paragraph (3) to a restricted account established by the
guaranty agency that is of a type selected by the guaranty
agency with the approval of the Secretary. Funds transferred
to such restricted accounts shall be invested in obligations
issued or guaranteed by the United States or in other
similarly low-risk securities. A guaranty agency shall not
use the funds in such a restricted account for any purpose
without the express written permission of the Secretary,
except that a guaranty agency may use the earnings from such
restricted account to assist in meeting the agency's
operational expenses under this part. In each of fiscal years
1998 through 2002, each agency shall transfer its required
share to such restricted account in 5 equal annual
installments, except that--
``(A) a guarantee agency that has a reserve ratio (as
computed under subparagraph (3)(A)) equal to or less than
1.10 percent may transfer its required share to such account
in 4 equal installments beginning in fiscal year 1999; and
``(B) a guarantee agency may transfer such required share
to such account in accordance with such other payment
schedules as are approved by the Secretary.
``(5) If, on September 1, 2002, the total amount in the
restricted accounts described in paragraph (4) is less than
the amount the Secretary is required to recall under
paragraph (1), the Secretary may require the return of the
amount of the shortage from other reserve funds held by
guaranty agencies under procedures established by the
Secretary.
``(6) The Secretary may take such reasonable measures, and
require such information, as may be necessary to ensure that
guaranty agencies comply with the requirements of this
subsection. Notwithstanding any other provision of this part,
if the Secretary determines that a guaranty agency is not in
compliance with the requirements of this subsection, such
agency may not receive any other funds under this part until
the Secretary determines that such agency is in compliance.
``(7) The Secretary shall not have any authority to direct
a guaranty agency to return reserve funds under subsection
(g)(1)(A) during the period from the date of enactment of
this subsection through September 30, 2002, and any reserve
funds otherwise returned under subsection (g)(1) during such
period shall be treated as amounts recalled under this
subsection and shall not be available under subsection
(g)(4).
``(8) For purposes of this subsection, the term `reserve
funds' when used with respect to a guaranty agency--
``(A) includes any cash reserve funds held by the guaranty
agency, or held by, or under the control of, any other
entity; and
``(B) does not include buildings, equipment, or other
nonliquid assets.''.
(b) Conforming Amendment.--Section 428(c)(9)(A) of the
Higher Education Act of 1965 (20 U.S.C. 1078(c)(9)(A)) is
amended--
(1) in the first sentence, by striking ``for the fiscal
year of the agency that begins in 1993''; and
(2) by striking the third sentence.
SEC. 5102. REPEAL OF DIRECT LOAN ORIGINATION FEES TO
INSTITUTIONS OF HIGHER EDUCATION.
Section 452 of the Higher Education Act of 1965 (20 U.S.C.
1087b) is amended--
(1) by striking subsection (b); and
(2) by redesignating subsections (c) and (d) as subsections
(b) and (c), respectively.
SEC. 5103. FUNDS FOR ADMINISTRATIVE EXPENSES.
Subsection (a) of section 458 of the Higher Education Act
of 1965 (20 U.S.C. 1087h(a)) is amended to read as follows:
``(a) In General.--(1) Each fiscal year, there shall be
available to the Secretary from funds not otherwise
appropriated, funds to be obligated for--
``(A) administrative costs under this part and part B,
including the costs of the direct student loan programs under
this part, and
``(B) administrative cost allowances payable to guaranty
agencies under part B and calculated in accordance with
paragraph (2),
not to exceed (from such funds not otherwise appropriated)
$532,000,000 in fiscal year 1998, $610,000,000 in fiscal year
1999, $705,000,000 in fiscal year 2000, $750,000,000 in
fiscal year 2001, and $750,000,000 in fiscal year 2002.
Administrative cost allowances under subparagraph (B) of this
paragraph shall be paid quarterly and used in accordance with
section 428(f). The Secretary may carry over funds available
under this section to a subsequent fiscal year.
``(2) Administrative cost allowances payable to guaranty
agencies under paragraph (1)(B) shall be calculated on the
basis of 0.85 percent of the total principal amount of loans
upon which insurance is issued on or after the date of
enactment of the Balanced Budget Act of 1997, except that
such allowances shall not exceed--
``(A) $170,000,000 for each of the fiscal years 1998 and
1999; or
``(B) $150,000,000 for each of the fiscal years 2000, 2001,
and 2002.''.
SEC. 5104. SECRETARY'S EQUITABLE SHARE OF COLLECTIONS ON
CONSOLIDATED DEFAULTED LOANS.
Section 428(c)(6)(A) of the Higher Education Act of 1965
(20 U.S.C. 1078(c)(6)(A)) is amended--
(1) in the matter preceding clause (i), by striking ``made
by the borrower'' and inserting ``made by or on behalf of the
borrower, including payments made to discharge loans made
under this title to obtain a consolidation loan pursuant to
this part or part D,''; and
(2) in clause (ii), by striking ``(ii) an amount equal to
27 percent of such payments (subject to subparagraph (D) of
this paragraph) for costs related'' and inserting the
following:
``(ii) an amount equal to 27 percent of such payments for
covered costs, except that the amount determined under this
clause for such covered costs shall be (I) 18.5 percent of
such payments for defaulted loans consolidated pursuant to
this part or part D on or after July 1, 1997; and (II) 18.5
percent of such payments for defaulted loans consolidated
pursuant to this part or part D on or after the date of
enactment of the Higher Education Amendments of 1992 with
respect to any guaranty agency that has, after such date,
made deductions from such payments under this clause (ii) in
an amount equal to 18.5 percent of such payments.
For purposes of clause (ii) of this subparagraph, the term
`covered costs' means costs related''.
[[Page H4480]]
SEC. 5105. EXTENSION OF STUDENT AID PROGRAMS.
Title IV of the Higher Education Act of 1965 (20 U.S.C.
1070 et seq.) is amended--
(1) in section 424(a), by striking ``1998.'' and ``2002.''
and inserting ``2002.'' and ``2006.'', respectively;
(2) in section 428(a)(5), by striking ``1998,'' and
``2002.'' and inserting ``2002,'' and ``2006.'',
respectively; and
(3) in section 428C(e), by striking ``1998.'' and inserting
``2002.''.
Subtitle C--Repeal of Smith-Hughes Vocational Education Act
SEC. 5201. REPEAL OF SMITH-HUGHES VOCATIONAL EDUCATION ACT.
The Act of February 23, 1917 (39 Stat. 929; 20 U.S.C. 11)
(commonly known as the ``Smith-Hughes Vocational Education
Act'') is repealed.
Subtitle D--Expansion of Portability and Health Insurance Coverage
SEC. 5301. SHORT TITLE OF SUBTITLE.
This subtitle may be cited as the ``Expansion of
Portability and Health Insurance Coverage Act of 1997''.
SEC. 5302. RULES GOVERNING ASSOCIATION HEALTH PLANS.
(a) In General.--Subtitle B of title I of the Employee
Retirement Income Security Act of 1974 is amended by adding
after part 7 the following new part:
``Part 8--Rules Governing Association Health Plans
``SEC. 801. ASSOCIATION HEALTH PLANS.
``(a) In General.--For purposes of this part, the term
`association health plan' means a group health plan--
``(1) whose sponsor is (or is deemed under this part to be)
described in subsection (b), and
``(2) under which at least one option of health insurance
coverage offered by a health insurance issuer (which may
include, among other options, managed care options, point of
service options, and preferred provider options) is provided
to participants and beneficiaries.
``(b) Sponsorship.--The sponsor of a group health plan is
described in this subsection if such sponsor--
``(1) is organized and maintained in good faith, with a
constitution and bylaws specifically stating its purpose and
providing for periodic meetings on at least an annual basis,
as a trade association, an industry association (including a
rural electric cooperative association or a rural telephone
cooperative association), a professional association, or a
chamber of commerce (or similar business group, including a
corporation or similar organization that operates on a
cooperative basis (within the meaning of section 1381 of the
Internal Revenue Code of 1986)), for substantial purposes
other than that of obtaining or providing medical care,
``(2) is established as a permanent entity which receives
the active support of its members and collects from its
members on a periodic basis dues or payments necessary to
maintain eligibility for membership in the sponsor, and
``(3) does not condition such dues or payments or coverage
under the plan on the basis of health status-related factors
with respect to the employees of its members (or affiliated
members), or the dependents of such employees, and does not
condition such dues or payments on the basis of group health
plan participation.
Any sponsor consisting of an association of entities which
meet the requirements of paragraphs (1) and (2) shall be
deemed to be a sponsor described in this subsection.
``SEC. 802. CERTIFICATION OF ASSOCIATION HEALTH PLANS.
``(a) In General.--The Secretary shall prescribe by
regulation a procedure under which, subject to subsection
(b), the Secretary shall certify association health plans
which apply for certification as meeting the requirements of
this part.
``(b) Standards.--Under the procedure prescribed pursuant
to subsection (a), the Secretary shall certify an association
health plan as meeting the requirements of this part only if
the Secretary is satisfied that--
``(1) such certification--
``(A) is administratively feasible,
``(B) is not adverse to the interests of the individuals
covered under the plan, and
``(C) is protective of the rights and benefits of the
individuals covered under the plan, and
``(2) the applicable requirements of this part are met (or,
upon the date on which the plan is to commence operations,
will be met) with respect to the plan.
``(c) Requirements Applicable to Certified Plans.--An
association health plan with respect to which certification
under this part is in effect shall meet the applicable
requirements of this part, effective on the date of
certification (or, if later, on the date on which the plan is
to commence operations).
``(d) Requirements for Continued Certification.--The
Secretary may provide by regulation for continued
certification under this part, including requirements
relating to any commencement, by an association health plan
which has been certified under this part, of a benefit option
which does not consist of health insurance coverage.
``(e) Class Certification for Fully-Insured Plans.--The
Secretary shall establish a class certification procedure for
association health plans under which all benefits consist of
health insurance coverage. Under such procedure, the
Secretary shall provide for the granting of certification
under this part to the plans in each class of such
association health plans upon appropriate filing under such
procedure in connection with plans in such class and payment
of the prescribed fee under section 807(a).
``SEC. 803. REQUIREMENTS RELATING TO SPONSORS AND BOARDS OF
TRUSTEES.
``(a) Sponsor.--The requirements of this subsection are met
with respect to an association health plan if--
``(1) the sponsor (together with its immediate predecessor,
if any) has met (or is deemed under this part to have met)
for a continuous period of not less than 3 years ending with
the date of the application for certification under this
part, the requirements of paragraphs (1) and (2) of section
801(b), and
``(2) the sponsor meets (or is deemed under this part to
meet) the requirements of section 801(b)(3).
``(b) Board of Trustees.--The requirements of this
subsection are met with respect to an association health plan
if the following requirements are met:
``(1) Fiscal control.--The plan is operated, pursuant to a
trust agreement, by a board of trustees which has complete
fiscal control over the plan and which is responsible for all
operations of the plan.
``(2) Rules of operation and financial controls.--The board
of trustees has in effect rules of operation and financial
controls, based on a 3-year plan of operation, adequate to
carry out the terms of the plan and to meet all requirements
of this title applicable to the plan.
``(3) Rules governing relationship to participating
employers and to contractors.--
``(A) In general.--Except as provided in subparagraph (B),
the members of the board of trustees are individuals selected
from individuals who are the owners, officers, directors, or
employees of the participating employers or who are partners
in the participating employers and actively participate in
the business.
``(B) Limitation.--
``(i) General rule.--Except as provided in clauses (ii) and
(iii), no such member is an owner, officer, director, or
employee of, or partner in, a contract administrator or other
service provider to the plan.
``(ii) Limited exception for providers of services solely
on behalf of the sponsor.--Officers or employees of a sponsor
which is a service provider (other than a contract
administrator) to the plan may be members of the board if
they constitute not more than 25 percent of the membership of
the board and they do not provide services to the plan other
than on behalf of the sponsor.
``(iii) Treatment of providers of medical care.--In the
case of a sponsor which is an association whose membership
consists primarily of providers of medical care, clause (i)
shall not apply in the case of any service provider described
in subparagraph (A) who is a provider of medical care under
the plan.
``(C) Sole authority.--The board has sole authority to
approve applications for participation in the plan and to
contract with a service provider to administer the day-to-day
affairs of the plan.
``(c) Treatment of Franchise Networks.--In the case of a
group health plan which is established and maintained by a
franchiser for a franchise network consisting of its
franchisees--
``(1) the requirements of subsection (a) and section
801(a)(1) shall be deemed met if such requirements would
otherwise be met if the franchiser were deemed to be the
sponsor referred to in section 801(b), such network were
deemed to be an association described in section 801(b), and
each franchisee were deemed to be a member (of the
association and the sponsor) referred to in section 801(b),
and
``(2) the requirements of section 804(a)(1) shall be deemed
met.
``(d) Certain Collectively Bargained Plans.--
``(1) In general.--In the case of a group health plan
described in paragraph (2)--
``(A) the requirements of subsection (a) and section
801(a)(1) shall be deemed met,
``(B) the joint board of trustees shall be deemed a board
of trustees with respect to which the requirements of
subsection (b) are met, and
``(C) the requirements of section 804 shall be deemed met.
``(2) Requirements.--A group health plan is described in
this paragraph if--
``(A) the plan is a multiemployer plan,
``(B) the plan is in existence on April 1, 1997, and would
be described in section 3(40)(A)(i) but solely for the
failure to meet the requirements of section 3(40)(C)(ii) or
(to the extent provided in regulations of the Secretary)
solely for the failure to meet the requirements of
subparagraph (D) of section 3(40), or
``(C)(i) the plan is in existence on April 1, 1997, has
been in existence as of such date for at least 3 years, meets
the requirements of paragraphs (2) and (3) of section 801(b),
and would be described in section 3(40)(A)(i) but solely for
the failure to meet the requirements of subparagraph (C)(i)
or (C)(ii), and
``(ii) individuals who are members of the plan sponsor--
``(I) participate by elections in the organizational
governance of the plan sponsor,
``(II) are eligible for appointment as trustee of the plan
or for participation in the appointment of trustees of the
plan, and
``(III) if covered under the plan, have full rights under
the plan of a participant in an employee welfare benefit
plan.
``(e) Certain Plans Not Meeting Single Employer
Requirement.--
[[Page H4481]]
``(1) In general.--In any case in which the majority of the
employees covered under a group health plan are employees of
a single employer (within the meaning of clauses (i) and (ii)
of section 3(40)(B)), if all other employees covered under
the plan are employed by employers who are related to such
single employer--
``(A) the requirements of subsection (a) and section
801(a)(1) shall not apply if such single employer is the
sponsor of the plan, and
``(B) the requirements of subsection (b) shall be deemed
met if the board of trustees is the named fiduciary in
connection with the plan.
``(2) Related employers.--For purposes of paragraph (1),
employers are `related' if there is among all such employers
a common ownership interest or a substantial commonality of
business operations based on common suppliers or customers.
``SEC. 804. PARTICIPATION AND COVERAGE REQUIREMENTS.
``(a) Covered Employers and Individuals.--The requirements
of this subsection are met with respect to an association
health plan if, under the terms of the plan--
``(1) all participating employers must be members or
affiliated members of the sponsor, except that, in the case
of a sponsor which is a professional association or other
individual-based association, if at least one of the
officers, directors, or employees of an employer, or at least
one of the individuals who are partners in an employer and
who actively participates in the business, is a member or
affiliated member of the sponsor, participating employers may
also include such employer, and
``(2) all individuals commencing coverage under the plan
after certification under this part must be--
``(A) active or retired owners (including self-employed
individuals), officers, directors, or employees of, or
partners in, participating employers, or
``(B) the beneficiaries of individuals described in
subparagraph (A).
``(b) Coverage of Previously Uninsured Employees.--The
requirements of this subsection are met with respect to an
association health plan if, under the terms of the plan, no
affiliated member of the sponsor may be offered coverage
under the plan as a participating employer unless--
``(1) the affiliated member was an affiliated member on the
date of certification under this part, or
``(2) during the 12-month period preceding the date of the
offering of such coverage, the affiliated member has not
maintained or contributed to a group health plan with respect
to any of its employees who would otherwise be eligible to
participate in such association health plan.
``(c) Individual Market Unaffected.--The requirements of
this subsection are met with respect to an association health
plan if, under the terms of the plan, no participating
employer may provide health insurance coverage in the
individual market for any employee not covered under the plan
which is similar to the coverage contemporaneously provided
to employees of the employer under the plan, if such
exclusion of the employee from coverage under the plan is
based on a health status-related factor with respect to the
employee and such employee would, but for such exclusion on
such basis, be eligible for coverage under the plan.
``(d) Prohibition of Discrimination Against Employers and
Employees Eligible to Participate.--The requirements of this
subsection are met with respect to an association health plan
if--
``(1) under the terms of the plan, no employer meeting the
preceding requirements of this section is excluded as a
participating employer, unless--
``(A) participation or contribution requirements of the
type referred to in section 2711 of the Public Health Service
Act are not met with respect to the excluded employer, or
``(B) the excluded employer does not satisfy a required
minimum level of employment uniformly applicable to
participating employers,
``(2) the applicable requirements of sections 701, 702, and
703 are met with respect to the plan, and
``(3) applicable benefit options under the plan are
actively marketed to all eligible participating employers.
``SEC. 805. OTHER REQUIREMENTS RELATING TO PLAN DOCUMENTS,
CONTRIBUTION RATES, AND BENEFIT OPTIONS.
``(a) In General.--The requirements of this section are met
with respect to an association health plan if the following
requirements are met:
``(1) Contents of governing instruments.--The instruments
governing the plan include a written instrument, meeting the
requirements of an instrument required under section
402(a)(1), which--
``(A) provides that the board of trustees serves as the
named fiduciary required for plans under section 402(a)(1)
and serves in the capacity of a plan administrator (referred
to in section 3(16)(A)),
``(B) provides that the sponsor of the plan is to serve as
plan sponsor (referred to in section 3(16)(B)), and
``(C) incorporates the requirements of section 806.
``(2) Contribution rates must be nondiscriminatory.--
``(A) The contribution rates for any participating employer
do not vary significantly on the basis of the claims
experience of such employer and do not vary on the basis of
the type of business or industry in which such employer is
engaged.
``(B) Nothing in this title or any other provision of law
shall be construed to preclude an association health plan, or
a health insurance issuer offering health insurance coverage
in connection with an association health plan, from setting
contribution rates based on the claims experience of the
plan, to the extent contribution rates under the plan meet
the requirements of section 702(b).
``(3) Floor for number of covered individuals with respect
to certain plans.--If any benefit option under the plan does
not consist of health insurance coverage, the plan has as of
the beginning of the plan year not fewer than 1,000
participants and beneficiaries.
``(4) Regulatory requirements.--Such other requirements as
the Secretary may prescribe by regulation as necessary to
carry out the purposes of this part.
``(b) Ability of Association Health Plans to Design Benefit
Options.--Nothing in this part or any provision of State law
(as defined in section 514(c)(1)) shall be construed to
preclude an association health plan, or a health insurance
issuer offering health insurance coverage in connection with
an association health plan, from exercising its sole
discretion in selecting the specific items and services
consisting of medical care to be included as benefits under
such plan or coverage, except in the case of any law to the
extent that it (1) prohibits an exclusion of a specific
disease from such coverage, or (2) is not preempted under
section 731(a)(1) with respect to matters governed by section
711 or 712.
``SEC. 806. MAINTENANCE OF RESERVES AND PROVISIONS FOR
SOLVENCY FOR PLANS PROVIDING HEALTH BENEFITS IN
ADDITION TO HEALTH INSURANCE COVERAGE.
``(a) In General.--The requirements of this section are met
with respect to an association health plan if--
``(1) the benefits under the plan consist solely of health
insurance coverage, or
``(2) if the plan provides any additional benefit options
which do not consist of health insurance coverage, the plan--
``(A) establishes and maintains reserves with respect to
such additional benefit options, in amounts recommended by
the qualified actuary, consisting of--
``(i) a reserve sufficient for unearned contributions,
``(ii) a reserve sufficient for benefit liabilities which
have been incurred, which have not been satisfied, and for
which risk of loss has not yet been transferred, and for
expected administrative costs with respect to such benefit
liabilities,
``(iii) a reserve sufficient for any other obligations of
the plan, and
``(iv) a reserve sufficient for a margin of error and other
fluctuations, taking into account the specific circumstances
of the plan,
and
``(B) establishes and maintains aggregate excess/stop loss
insurance and solvency indemnification, with respect to such
additional benefit options for which risk of loss has not yet
been transferred, as follows:
``(i) The plan shall secure aggregate excess/stop loss
insurance for the plan with an attachment point which is not
greater than 125 percent of expected gross annual claims. The
Secretary may by regulation provide for upward adjustments in
the amount of such percentage in specified circumstances in
which the plan specifically provides for and maintains
reserves in excess of the amounts required under subparagraph
(A).
``(ii) The plan shall secure a means of indemnification for
any claims which the plan is unable to satisfy by reason of a
termination pursuant to section 809(b) (relating to mandatory
termination).
Any regulations prescribed by the Secretary pursuant to
paragraph (2)(B)(i) may allow for such adjustments in the
required levels of excess/stop loss insurance as the
qualified actuary may recommend, taking into account the
specific circumstances of the plan.
``(b) Minimum Surplus in Addition to Claims Reserves.--The
requirements of this subsection are met if the plan
establishes and maintains surplus in an amount at least equal
to the excess of--
``(1) the greater of--
``(A) 25 percent of expected incurred claims and expenses
for the plan year, or
``(B) $400,000,
over
``(2) the amount required under subsection (a)(2)(A)(ii).
``(c) Additional Requirements.--In the case of any
association health plan described in subsection (a)(2), the
Secretary may provide such additional requirements relating
to reserves and excess/stop loss insurance as the Secretary
considers appropriate. Such requirements may be provided, by
regulation or otherwise, with respect to any such plan or any
class of such plans.
``(d) Adjustments for Excess/Stop Loss Insurance.--The
Secretary may provide for adjustments to the levels of
reserves otherwise required under subsections (a) and (b)
with respect to any plan or class of plans to take into
account excess/stop loss insurance provided with respect to
such plan or plans.
``(e) Alternative Means of Compliance.--The Secretary may
permit an association health plan described in subsection
(a)(2) to substitute, for all or part of the requirements of
this section, such security, guarantee, hold-harmless
arrangement, or other financial arrangement as the Secretary
determines to be adequate to enable the plan to fully meet
all its financial obligations on a timely basis and is
otherwise no less protective of the interests of participants
and beneficiaries than the requirements for which it
[[Page H4482]]
is substituted. The Secretary may take into account, for
purposes of this subsection, evidence provided by the plan or
sponsor which demonstrates an assumption of liability with
respect to the plan. Such evidence may be in the form of a
contract of indemnification, lien, bonding, insurance, letter
of credit, recourse under applicable terms of the plan in the
form of assessments of participating employers, security, or
other financial arrangement.
``(f) Excess/Stop Loss Insurance.--For purposes of this
section, the term `excess/stop loss insurance' means, in
connection with an association health plan, a contract under
which an insurer (meeting such minimum standards as may be
prescribed in regulations of the Secretary) provides for
payment to the plan with respect to claims under the plan in
excess of an amount or amounts specified in such contract.
``SEC. 807. REQUIREMENTS FOR APPLICATION AND RELATED
REQUIREMENTS.
``(a) Filing Fee.--Under the procedure prescribed pursuant
to section 802(a), an association health plan shall pay to
the Secretary at the time of filing an application for
certification under this part a filing fee in the amount of
$5,000, which shall be available, to the extent provided in
appropriation Acts, to the Secretary for the sole purpose of
administering the certification procedures applicable with
respect to association health plans.
``(b) Information To Be Included in Application for
Certification.--An application for certification under this
part meets the requirements of this section only if it
includes, in a manner and form prescribed in regulations of
the Secretary, at least the following information:
``(1) Identifying information.--The names and addresses
of--
``(A) the sponsor, and
``(B) the members of the board of trustees of the plan.
``(2) States in which plan intends to do business.--The
States in which participants and beneficiaries under the plan
are to be located and the number of them expected to be
located in each such State.
``(3) Bonding requirements.--Evidence provided by the board
of trustees that the bonding requirements of section 412 will
be met as of the date of the application or (if later)
commencement of operations.
``(4) Plan documents.--A copy of the documents governing
the plan (including any bylaws and trust agreements), the
summary plan description, and other material describing the
benefits that will be provided to participants and
beneficiaries under the plan.
``(5) Agreements with service providers.--A copy of any
agreements between the plan and contract administrators and
other service providers.
``(6) Funding report.--In the case of association health
plans providing benefits options in addition to health
insurance coverage, a report setting forth information with
respect to such additional benefit options determined as of a
date within the 120-day period ending with the date of the
application, including the following:
``(A) Reserves.--A statement, certified by the board of
trustees of the plan, and a statement of actuarial opinion,
signed by a qualified actuary, that all applicable
requirements of section 806 are or will be met in accordance
with regulations which the Secretary shall prescribe.
``(B) Adequacy of contribution rates.--A statement of
actuarial opinion, signed by a qualified actuary, which sets
forth a description of the extent to which contribution rates
are adequate to provide for the payment of all obligations
and the maintenance of required reserves under the plan for
the 12-month period beginning with such date within such 120-
day period, taking into account the expected coverage and
experience of the plan. If the contribution rates are not
fully adequate, the statement of actuarial opinion shall
indicate the extent to which the rates are inadequate and the
changes needed to ensure adequacy.
``(C) Current and projected value of assets and
liabilities.--A statement of actuarial opinion signed by a
qualified actuary, which sets forth the current value of the
assets and liabilities accumulated under the plan and a
projection of the assets, liabilities, income, and expenses
of the plan for the 12-month period referred to in
subparagraph (B). The income statement shall identify
separately the plan's administrative expenses and claims.
``(D) Costs of coverage to be charged and other expenses.--
A statement of the costs of coverage to be charged, including
an itemization of amounts for administration, reserves, and
other expenses associated with the operation of the plan.
``(E) Other information.--Any other information which may
be prescribed in regulations of the Secretary as necessary to
carry out the purposes of this part.
``(c) Filing Notice of Certification With States.--A
certification granted under this part to an association
health plan shall not be effective unless written notice of
such certification is filed with the applicable State
authority of each State in which at least 25 percent of the
participants and beneficiaries under the plan are located.
For purposes of this subsection, an individual shall be
considered to be located in the State in which a known
address of such individual is located or in which such
individual is employed.
``(d) Notice of Material Changes.--In the case of any
association health plan certified under this part,
descriptions of material changes in any information which was
required to be submitted with the application for the
certification under this part shall be filed in such form and
manner as shall be prescribed in regulations of the
Secretary. The Secretary may require by regulation prior
notice of material changes with respect to specified matters
which might serve as the basis for suspension or revocation
of the certification.
``(e) Reporting Requirements for Certain Association Health
Plans.--An association health plan certified under this part
which provides benefit options in addition to health
insurance coverage for such plan year shall meet the
requirements of section 103 by filing an annual report under
such section which shall include information described in
subsection (b)(6) with respect to the plan year and,
notwithstanding section 104(a)(1)(A), shall be filed not
later than 90 days after the close of the plan year (or on
such later date as may be prescribed by the Secretary).
``(f) Engagement of Qualified Actuary.--The board of
trustees of each association health plan which provides
benefits options in addition to health insurance coverage and
which is applying for certification under this part or is
certified under this part shall engage, on behalf of all
participants and beneficiaries, a qualified actuary who shall
be responsible for the preparation of the materials
comprising information necessary to be submitted by a
qualified actuary under this part. The qualified actuary
shall utilize such assumptions and techniques as are
necessary to enable such actuary to form an opinion as to
whether the contents of the matters reported under this
part--
``(1) are in the aggregate reasonably related to the
experience of the plan and to reasonable expectations, and
``(2) represent such actuary's best estimate of anticipated
experience under the plan.
The opinion by the qualified actuary shall be made with
respect to, and shall be made a part of, the annual report.
``SEC. 808. NOTICE REQUIREMENTS FOR VOLUNTARY TERMINATION.
``Except as provided in section 809(b), an association
health plan which is or has been certified under this part
may terminate (upon or at any time after cessation of
accruals in benefit liabilities) only if the board of
trustees--
``(1) not less than 60 days before the proposed termination
date, provides to the participants and beneficiaries a
written notice of intent to terminate stating that such
termination is intended and the proposed termination date,
``(2) develops a plan for winding up the affairs of the
plan in connection with such termination in a manner which
will result in timely payment of all benefits for which the
plan is obligated, and
``(3) submits such plan in writing to the Secretary.
Actions required under this section shall be taken in such
form and manner as may be prescribed in regulations of the
Secretary.
``SEC. 809. CORRECTIVE ACTIONS AND MANDATORY TERMINATION.
``(a) Actions To Avoid Depletion of Reserves.--An
association health plan which is certified under this part
and which provides benefits other than health insurance
coverage shall continue to meet the requirements of section
806, irrespective of whether such certification continues in
effect. The board of trustees of such plan shall determine
quarterly whether the requirements of section 806 are met. In
any case in which the board determines that there is reason
to believe that there is or will be a failure to meet such
requirements, or the Secretary makes such a determination and
so notifies the board, the board shall immediately notify the
qualified actuary engaged by the plan, and such actuary
shall, not later than the end of the next following month,
make such recommendations to the board for corrective action
as the actuary determines necessary to ensure compliance with
section 806. Not later than 30 days after receiving from the
actuary recommendations for corrective actions, the board
shall notify the Secretary (in such form and manner as the
Secretary may prescribe by regulation) of such
recommendations of the actuary for corrective action,
together with a description of the actions (if any) that the
board has taken or plans to take in response to such
recommendations. The board shall thereafter report to the
Secretary, in such form and frequency as the Secretary may
specify to the board, regarding corrective action taken by
the board until the requirements of section 806 are met.
``(b) Mandatory Termination.--In any case in which--
``(1) the Secretary has been notified under subsection (a)
of a failure of an association health plan which is or has
been certified under this part and is described in section
806(a)(2) to meet the requirements of section 806 and has not
been notified by the board of trustees of the plan that
corrective action has restored compliance with such
requirements, and
``(2) the Secretary determines that there is a reasonable
expectation that the plan will continue to fail to meet the
requirements of section 806,
the board of trustees of the plan shall, at the direction of
the Secretary, terminate the plan and, in the course of the
termination,
[[Page H4483]]
take such actions as the Secretary may require, including
satisfying any claims referred to in section 806(a)(2)(B)(ii)
and recovering for the plan any liability under subsection
(a)(2)(B)(ii) or (e) of section 806, as necessary to ensure
that the affairs of the plan will be, to the maximum extent
possible, wound up in a manner which will result in timely
provision of all benefits for which the plan is obligated.
``SEC. 810. SPECIAL RULES FOR CHURCH PLANS.
``(a) Election for Church Plans.--Notwithstanding section
4(b)(2), if a church, a convention or association of
churches, or an organization described in section 3(33)(C)(i)
maintains a church plan which is a group health plan (as
defined in section 733(a)(1)), and such church, convention,
association, or organization makes an election with respect
to such plan under this subsection (in such form and manner
as the Secretary may by regulation prescribe), then the
provisions of this section shall apply to such plan, with
respect to benefits provided under such plan consisting of
medical care, as if section 4(b)(2) did not contain an
exclusion for church plans. Nothing in this paragraph shall
be construed to render any other section of this title
applicable to church plans, except to the extent that such
other section is incorporated by reference in this section.
``(b) Effect of Election.--
``(1) Preemption of state insurance laws regulating covered
church plans.--Subject to paragraphs (2) and (3), this
section shall supersede any and all State laws which regulate
insurance insofar as they may now or hereafter regulate
church plans to which this section applies or trusts
established under such church plans.
``(2) General state insurance regulation unaffected.--
``(A) In general.--Except as provided in subparagraph (B)
and paragraph (3), nothing in this section shall be construed
to exempt or relieve any person from any provision of State
law which regulates insurance.
``(B) Church plans not to be deemed insurance companies or
insurers.--Neither a church plan to which this section
applies, nor any trust established under such a church plan,
shall be deemed to be an insurance company or other insurer
or to be engaged in the business of insurance for purposes of
any State law purporting to regulate insurance companies or
insurance contracts.
``(3) Preemption of certain state laws relating to premium
rate regulation and benefit mandates.--The provisions of
subsections (a)(2)(B) and (b) of section 805 shall apply with
respect to a church plan to which this section applies in the
same manner and to the same extent as such provisions apply
with respect to association health plans.
``(4) Definitions.--For purposes of this subsection--
``(A) State law.--The term `State law' includes all laws,
decisions, rules, regulations, or other State action having
the effect of law, of any State. A law of the United States
applicable only to the District of Columbia shall be treated
as a State law rather than a law of the United States.
``(B) State.--The term `State' includes a State, any
political subdivision thereof, or any agency or
instrumentality of either, which purports to regulate,
directly or indirectly, the terms and conditions of church
plans covered by this section.
``(c) Requirements for Covered Church Plans.--
``(1) Fiduciary rules and exclusive purpose.--A fiduciary
shall discharge his duties with respect to a church plan to
which this section applies--
``(A) for the exclusive purpose of:
``(i) providing benefits to participants and their
beneficiaries; and
``(ii) defraying reasonable expenses of administering the
plan;
``(B) with the care, skill, prudence and diligence under
the circumstances then prevailing that a prudent man acting
in a like capacity and familiar with such matters would use
in the conduct of an enterprise of a like character and with
like aims; and
``(C) in accordance with the documents and instruments
governing the plan.
The requirements of this paragraph shall not be treated as
not satisfied solely because the plan assets are commingled
with other church assets, to the extent that such plan assets
are separately accounted for.
``(2) Claims procedure.--In accordance with regulations of
the Secretary, every church plan to which this section
applies shall--
``(A) provide adequate notice in writing to any participant
or beneficiary whose claim for benefits under the plan has
been denied, setting forth the specific reasons for such
denial, written in a manner calculated to be understood by
the participant;
``(B) afford a reasonable opportunity to any participant
whose claim for benefits has been denied for a full and fair
review by the appropriate fiduciary of the decision denying
the claim; and
``(C) provide a written statement to each participant
describing the procedures established pursuant to this
paragraph.
``(3) Annual statements.--In accordance with regulations of
the Secretary, every church plan to which this section
applies shall file with the Secretary an annual statement--
``(A) stating the names and addresses of the plan and of
the church, convention, or association maintaining the plan
(and its principal place of business);
``(B) certifying that it is a church plan to which this
section applies and that it complies with the requirements of
paragraphs (1) and (2);
``(C) identifying the States in which participants and
beneficiaries under the plan are or likely will be located
during the 1-year period covered by the statement; and
``(D) containing a copy of a statement of actuarial opinion
signed by a qualified actuary that the plan maintains
capital, reserves, insurance, other financial arrangements,
or any combination thereof adequate to enable the plan to
fully meet all of its financial obligations on a timely
basis.
``(4) Disclosure.--At the time that the annual statement is
filed by a church plan with the Secretary pursuant to
paragraph (3), a copy of such statement shall be made
available by the Secretary to the State insurance
commissioner (or similar official) of any State. The name of
each church plan and sponsoring organization filing an annual
statement in compliance with paragraph (3) shall be published
annually in the Federal Register.
``(c) Enforcement.--The Secretary may enforce the
provisions of this section in a manner consistent with
section 502, to the extent applicable with respect to actions
under section 502(a)(5), and with section 3(33)(D), except
that, other than for the purpose of seeking a temporary
restraining order, a civil action may be brought with respect
to the plan's failure to meet any requirement of this section
only if the plan fails to correct its failure within the
correction period described in section 3(33)(D). The other
provisions of part 5 (except sections 501(a), 503, 512, 514,
and 515) shall apply with respect to the enforcement and
administration of this section.
``(d) Definitions and Other Rules.--For purposes of this
section--
``(1) In general.--Except as otherwise provided in this
section, any term used in this section which is defined in
any provision of this title shall have the definition
provided such term by such provision.
``(2) Seminary students.--Seminary students who are
enrolled in an institution of higher learning described in
section 3(33)(C)(iv) and who are treated as participants
under the terms of a church plan to which this section
applies shall be deemed to be employees as defined in section
3(6) if the number of such students constitutes an
insignificant portion of the total number of individuals who
are treated as participants under the terms of the plan.
``SEC. 811. DEFINITIONS AND RULES OF CONSTRUCTION.
``(a) Definitions.--For purposes of this part--
``(1) Group health plan.--The term `group health plan' has
the meaning provided in section 733(a)(1).
``(2) Medical care.--The term `medical care' has the
meaning provided in section 733(a)(2).
``(3) Health insurance coverage.--The term `health
insurance coverage' has the meaning provided in section
733(b)(1).
``(4) Health insurance issuer.--The term `health insurance
issuer' has the meaning provided in section 733(b)(2).
``(5) Health status-related factor.--The term `health
status-related factor' has the meaning provided in section
733(d)(2).
``(6) Individual market.--
``(A) In general.--The term `individual market' means the
market for health insurance coverage offered to individuals
other than in connection with a group health plan.
``(B) Treatment of very small groups.--
``(i) In general.--Subject to clause (ii), such term
includes coverage offered in connection with a group health
plan that has fewer than 2 participants as current employees
or participants described in section 732(d)(3) on the first
day of the plan year.
``(ii) State exception.--Clause (i) shall not apply in the
case of health insurance coverage offered in a State if such
State regulates the coverage described in such clause in the
same manner and to the same extent as coverage in the small
group market (as defined in section 2791(e)(5) of the Public
Health Service Act) is regulated by such State.
``(7) Participating employer.--The term `participating
employer' means, in connection with an association health
plan, any employer, if any individual who is an employee of
such employer, a partner in such employer, or a self-employed
individual who is such employer (or any dependent, as defined
under the terms of the plan, of such individual) is or was
covered under such plan in connection with the status of such
individual as such an employee, partner, or self-employed
individual in relation to the plan.
``(8) Applicable state authority.--The term `applicable
State authority' means, with respect to a health insurance
issuer in a State, the State insurance commissioner or
official or officials designated by the State to enforce the
requirements of title XXVII of the Public Health Service Act
for the State involved with respect to such issuer.
``(9) Qualified actuary.--The term `qualified actuary'
means an individual who is a member of the American Academy
of Actuaries or meets such reasonable standards and
qualifications as the Secretary may provide by regulation.
``(10) Affiliated member.--The term `affiliated member'
means, in connection with a sponsor, a person eligible to be
a member of the sponsor or, in the case of a sponsor with
member associations, a person who is a
[[Page H4484]]
member, or is eligible to be a member, of a member
association.
``(b) Rules of Construction.--
``(1) Employers and employees.--For purposes of determining
whether a plan, fund, or program is an employee welfare
benefit plan which is an association health plan, and for
purposes of applying this title in connection with such plan,
fund, or program so determined to be such an employee welfare
benefit plan--
``(A) in the case of a partnership, the term `employer' (as
defined in section (3)(5)) includes the partnership in
relation to the partners, and the term `employee' (as defined
in section (3)(6)) includes any partner in relation to the
partnership, and
``(B) in the case of a self-employed individual, the term
`employer' (as defined in section 3(5)) and the term
`employee' (as defined in section 3(6)) shall include such
individual.
``(2) Plans, funds, and programs treated as employee
welfare benefit plans.--In the case of any plan, fund, or
program which was established or is maintained for the
purpose of providing medical care (through the purchase of
insurance or otherwise) for employees (or their dependents)
covered thereunder and which demonstrates to the Secretary
that all requirements for certification under this part would
be met with respect to such plan, fund, or program if such
plan, fund, or program were a group health plan, such plan,
fund, or program shall be treated for purposes of this title
as an employee welfare benefit plan on and after the date of
such demonstration.''.
(b) Conforming Amendments to Preemption Rules.--
(1) Section 514(b)(6) of such Act (29 U.S.C. 1144(b)(6)) is
amended by adding at the end the following new subparagraph:
``(E) The preceding subparagraphs of this paragraph do not
apply with respect to any State law in the case of an
association health plan which is certified under part 8.''.
(2) Section 514 of such Act (29 U.S.C. 1144) is amended--
(A) in subsection (b)(4), by striking ``Subsection (a)''
and inserting ``Subsections (a) and (d)'';
(B) in subsection (b)(5), by striking ``subsection (a)'' in
subparagraph (A) and inserting ``subsection (a) of this
section and subsections (a)(2)(B) and (b) of section 805'',
and by striking ``subsection (a)'' in subparagraph (B) and
inserting ``subsection (a) of this section or subsection
(a)(2)(B) or (b) of section 805'';
(C) by redesignating subsection (d) as subsection (e); and
(D) by inserting after subsection (c) the following new
subsection:
``(d)(1) Except as provided in subsection (b)(4), the
provisions of this title shall supersede any and all State
laws insofar as they may now or hereafter preclude a health
insurance issuer from offering health insurance coverage in
connection with an association health plan which is certified
under part 8.
``(2) Except as provided in paragraphs (4) and (5) of
subsection (b) of this section--
``(A) In any case in which health insurance coverage of any
policy type is offered under an association health plan
certified under part 8 to a participating employer operating
in such State, the provisions of this title shall supersede
any and all laws of such State insofar as they may preclude a
health insurance issuer from offering health insurance
coverage of the same policy type to other employers operating
in the State which are eligible for coverage under such
association health plan, whether or not such other employers
are participating employers in such plan.
``(B) In any case in which health insurance coverage of any
policy type is offered under an association health plan in a
State and the filing, with the applicable State authority, of
the policy form in connection with such policy type is
approved by such State authority, the provisions of this
title shall supersede any and all laws of any other State in
which health insurance coverage of such type is offered,
insofar as they may preclude, upon the filing in the same
form and manner of such policy form with the applicable State
authority in such other State, the approval of the filing in
such other State.
``(3) For additional provisions relating to association
health plans, see subsections (a)(2)(B) and (b) of section
805.
``(4) For purposes of this subsection, the term
`association health plan' has the meaning provided in section
801(a), and the terms `health insurance coverage',
`participating employer', and `health insurance issuer' have
the meanings provided such terms in section 811,
respectively.''.
(3) Section 514(b)(6)(A) of such Act (29 U.S.C.
1144(b)(6)(A)) is amended--
(A) in clause (i)(II), by striking ``and'' at the end;
(B) in clause (ii), by inserting ``and which does not
provide medical care (within the meaning of section
733(a)(2)),'' after ``arrangement,'', and by striking
``title.'' and inserting ``title, and''; and
(C) by adding at the end the following new clause:
``(iii) subject to subparagraph (E), in the case of any
other employee welfare benefit plan which is a multiple
employer welfare arrangement and which provides medical care
(within the meaning of section 733(a)(2)), any law of any
State which regulates insurance may apply.''.
(c) Plan Sponsor.--Section 3(16)(B) of such Act (29 U.S.C.
102(16)(B)) is amended by adding at the end the following new
sentence: ``Such term also includes a person serving as the
sponsor of an association health plan under part 8.''.
(d) Savings Clause.--Section 731(c) of such Act is amended
by inserting ``or part 8'' after ``this part''.
(e) Clerical Amendment.--The table of contents in section 1
of the Employee Retirement Income Security Act of 1974 is
amended by inserting after the item relating to section 734
the following new items:
``Part 8--Rules Governing Association Health Plans
``Sec. 801. Association health plans.
``Sec. 802. Certification of association health plans.
``Sec. 803. Requirements relating to sponsors and boards of trustees.
``Sec. 804. Participation and coverage requirements.
``Sec. 805. Other requirements relating to plan documents, contribution
rates, and benefit options.
``Sec. 806. Maintenance of reserves and provisions for solvency for
plans providing health benefits in addition to health
insurance coverage.
``Sec. 807. Requirements for application and related requirements.
``Sec. 808. Notice requirements for voluntary termination.
``Sec. 809. Corrective actions and mandatory termination.
``Sec. 810. Special rules for church plans.
``Sec. 811. Definitions and rules of construction.''.
SEC. 5303. CLARIFICATION OF TREATMENT OF SINGLE EMPLOYER
ARRANGEMENTS.
Section 3(40)(B) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1002(40)(B)) is amended--
(1) in clause (i), by inserting ``for any plan year of any
such plan, or any fiscal year of any such other
arrangement;'' after ``single employer'', and by inserting
``during such year or at any time during the preceding 1-year
period'' after ``control group'';
(2) in clause (iii)--
(A) by striking ``common control shall not be based on an
interest of less than 25 percent'' and inserting ``an
interest of greater than 25 percent may not be required as
the minimum interest necessary for common control''; and
(B) by striking ``similar to'' and inserting ``consistent
and coextensive with'';
(3) by redesignating clauses (iv) and (v) as clauses (v)
and (vi), respectively; and
(4) by inserting after clause (iii) the following new
clause:
``(iv) in determining, after the application of clause (i),
whether benefits are provided to employees of two or more
employers, the arrangement shall be treated as having only 1
participating employer if, after the application of clause
(i), the number of individuals who are employees and former
employees of any one participating employer and who are
covered under the arrangement is greater than 75 percent of
the aggregate number of all individuals who are employees or
former employees of participating employers and who are
covered under the arrangement,''.
SEC. 5304. CLARIFICATION OF TREATMENT OF CERTAIN COLLECTIVELY
BARGAINED ARRANGEMENTS.
(a) In General.--Section 3(40)(A)(i) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1002(40)(A)(i)) is amended to read as follows:
``(i)(I) under or pursuant to one or more collective
bargaining agreements which are reached pursuant to
collective bargaining described in section 8(d) of the
National Labor Relations Act (29 U.S.C. 158(d)) or paragraph
Fourth of section 2 of the Railway Labor Act (45 U.S.C. 152,
paragraph Fourth) or which are reached pursuant to labor-
management negotiations under similar provisions of State
public employee relations laws, and (II) in accordance with
subparagraphs (C), (D), and (E),''.
(b) Limitations.--Section 3(40) of such Act (29 U.S.C.
1002(40)) is amended by adding at the end the following new
subparagraphs:
``(C) For purposes of subparagraph (A)(i)(II), a plan or
other arrangement shall be treated as established or
maintained in accordance with this subparagraph only if the
following requirements are met:
``(i) The plan or other arrangement, and the employee
organization or any other entity sponsoring the plan or other
arrangement, do not--
``(I) utilize the services of any licensed insurance agent
or broker for soliciting or enrolling employers or
individuals as participating employers or covered individuals
under the plan or other arrangement; or
``(II) pay a commission or any other type of compensation
to a person, other than a full time employee of the employee
organization (or a member of the organization to the extent
provided in regulations of the Secretary), that is related
either to the volume or number of employers or individuals
solicited or enrolled as participating employers or covered
individuals under the plan or other arrangement, or to the
dollar amount or size of the contributions made by
participating employers or covered individuals to the plan or
other arrangement;
except to the extent that the services used by the plan,
arrangement, organization, or other entity consist solely of
preparation of documents necessary for compliance with the
reporting and disclosure requirements of
[[Page H4485]]
part 1 or administrative, investment, or consulting services
unrelated to solicitation or enrollment of covered
individuals.
``(ii) As of the end of the preceding plan year, the number
of covered individuals under the plan or other arrangement
who are identified to the plan or arrangement and who are
neither--
``(I) employed within a bargaining unit covered by any of
the collective bargaining agreements with a participating
employer (nor covered on the basis of an individual's
employment in such a bargaining unit); nor
``(II) present employees (or former employees who were
covered while employed) of the sponsoring employee
organization, of an employer who is or was a party to any of
the collective bargaining agreements, or of the plan or other
arrangement or a related plan or arrangement (nor covered on
the basis of such present or former employment);
does not exceed 15 percent of the total number of individuals
who are covered under the plan or arrangement and who are
present or former employees who are or were covered under the
plan or arrangement pursuant to a collective bargaining
agreement with a participating employer. The requirements of
the preceding provisions of this clause shall be treated as
satisfied if, as of the end of the preceding plan year, such
covered individuals are comprised solely of individuals who
were covered individuals under the plan or other arrangement
as of the date of the enactment of the Expansion of
Portability and Health Insurance Coverage Act of 1997 and, as
of the end of the preceding plan year, the number of such
covered individuals does not exceed 25 percent of the total
number of present and former employees enrolled under the
plan or other arrangement.
``(iii) The employee organization or other entity
sponsoring the plan or other arrangement certifies to the
Secretary each year, in a form and manner which shall be
prescribed in regulations of the Secretary that the plan or
other arrangement meets the requirements of clauses (i) and
(ii).
``(D) For purposes of subparagraph (A)(i)(II), a plan or
arrangement shall be treated as established or maintained in
accordance with this subparagraph only if--
``(i) all of the benefits provided under the plan or
arrangement consist of health insurance coverage; or
``(ii)(I) the plan or arrangement is a multiemployer plan;
and
``(II) the requirements of clause (B) of the proviso to
clause (5) of section 302(c) of the Labor Management
Relations Act, 1947 (29 U.S.C. 186(c)) are met with respect
to such plan or other arrangement.
``(E) For purposes of subparagraph (A)(i)(II), a plan or
arrangement shall be treated as established or maintained in
accordance with this subparagraph only if--
``(i) the plan or arrangement is in effect as of the date
of the enactment of the Expansion of Portability and Health
Insurance Coverage Act of 1997, or
``(ii) the employee organization or other entity sponsoring
the plan or arrangement--
``(I) has been in existence for at least 3 years or is
affiliated with another employee organization which has been
in existence for at least 3 years, or
``(II) demonstrates to the satisfaction of the Secretary
that the requirements of subparagraphs (C) and (D) are met
with respect to the plan or other arrangement.''.
(c) Conforming Amendments to Definitions of Participant and
Beneficiary.--Section 3(7) of such Act (29 U.S.C. 1002(7)) is
amended by adding at the end the following new sentence:
``Such term includes an individual who is a covered
individual described in paragraph (40)(C)(ii).''.
SEC. 5305. ENFORCEMENT PROVISIONS RELATING TO ASSOCIATION
HEALTH PLANS.
(a) Criminal Penalties for Certain Willful
Misrepresentations.--Section 501 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1131) is amended--
(1) by inserting ``(a)'' after ``Sec. 501.''; and
(2) by adding at the end the following new subsection:
``(b) Any person who, either willfully or with willful
blindness, falsely represents, to any employee, any
employee's beneficiary, any employer, the Secretary, or any
State, a plan or other arrangement established or maintained
for the purpose of offering or providing any benefit
described in section 3(1) to employees or their beneficiaries
as--
``(1) being an association health plan which has been
certified under part 8;
``(2) having been established or maintained under or
pursuant to one or more collective bargaining agreements
which are reached pursuant to collective bargaining described
in section 8(d) of the National Labor Relations Act (29
U.S.C. 158(d)) or paragraph Fourth of section 2 of the
Railway Labor Act (45 U.S.C. 152, paragraph Fourth) or which
are reached pursuant to labor-management negotiations under
similar provisions of State public employee relations laws;
or
``(3) being a plan or arrangement with respect to which the
requirements of subparagraph (C), (D), or (E) of section
3(40) are met;
shall, upon conviction, be imprisoned not more than five
years, be fined under title 18, United States Code, or
both.''.
(b) Cease Activities Orders.--Section 502 of such Act (29
U.S.C. 1132) is amended by adding at the end the following
new subsection:
``(n)(1) Subject to paragraph (2), upon application by the
Secretary showing the operation, promotion, or marketing of
an association health plan (or similar arrangement providing
benefits consisting of medical care (as defined in section
733(a)(2))) that--
``(A) is not certified under part 8, is subject under
section 514(b)(6) to the insurance laws of any State in which
the plan or arrangement offers or provides benefits, and is
not licensed, registered, or otherwise approved under the
insurance laws of such State; or
``(B) is an association health plan certified under part 8
and is not operating in accordance with the requirements
under part 8 for such certification,
a district court of the United States shall enter an order
requiring that the plan or arrangement cease activities.
``(2) Paragraph (1) shall not apply in the case of an
association health plan or other arrangement if the plan or
arrangement shows that--
``(A) all benefits under it referred to in paragraph (1)
consist of health insurance coverage; and
``(B) with respect to each State in which the plan or
arrangement offers or provides benefits, the plan or
arrangement is operating in accordance with applicable State
laws that are not superseded under section 514.
``(3) The court may grant such additional equitable relief,
including any relief available under this title, as it deems
necessary to protect the interests of the public and of
persons having claims for benefits against the plan.''.
(c) Responsibility for Claims Procedure.--Section 503 of
such Act (29 U.S.C. 1133) is amended by adding at the end
(after and below paragraph (2)) the following new sentence:
``The terms of each association health plan which is or has
been certified under part 8 shall require the board of
trustees or the named fiduciary (as applicable) to ensure
that the requirements of this section are met in connection
with claims filed under the plan.''.
SEC. 5306. COOPERATION BETWEEN FEDERAL AND STATE AUTHORITIES.
Section 506 of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1136) is amended by adding at the end the
following new subsection:
``(c) Responsibility of States With Respect to Association
Health Plans.--
``(1) Agreements with states.--A State may enter into an
agreement with the Secretary for delegation to the State of
some or all of the Secretary's authority under sections 502
and 504 to enforce the requirements for certification under
part 8. The Secretary shall enter into the agreement if the
Secretary determines that the delegation provided for therein
would not result in a lower level or quality of enforcement
of the provisions of this title.
``(2) Delegations.--Any department, agency, or
instrumentality of a State to which authority is delegated
pursuant to an agreement entered into under this paragraph
may, if authorized under State law and to the extent
consistent with such agreement, exercise the powers of the
Secretary under this title which relate to such authority.
``(3) Recognition of primary domicile state.--In entering
into any agreement with a State under subparagraph (A), the
Secretary shall ensure that, as a result of such agreement
and all other agreements entered into under subparagraph (A),
only one State will be recognized, with respect to any
particular association health plan, as the primary domicile
State to which authority has been delegated pursuant to such
agreements.''.
SEC. 5307. EFFECTIVE DATE AND TRANSITIONAL RULES.
(a) Effective Date.--The amendments made by sections 5302,
5305, and 5306 shall take effect on January 1, 1999. The
amendments made by sections 5303 and 5304 shall take effect
on the date of the enactment of this Act. The Secretary of
Labor shall issue all regulations necessary to carry out the
amendments made by this Act before January 1, 1999.
(b) Exception.--Section 801(a)(2) of the Employee
Retirement Income Security Act of 1974 (added by section
5302) does not apply with respect to group health plans (as
defined in section 733(a)(1) of such Act) existing on April
1, 1997, which do not provide health insurance coverage (as
defined in section 733(b)(1) of such Act) on such date.
TITLE VI--COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
Subtitle A--Postal Service
SEC. 6001. REPEAL OF AUTHORIZATION OF TRANSITIONAL
APPROPRIATIONS FOR THE UNITED STATES POSTAL
SERVICE.
(a) Repeal.--
(1) In general.--Section 2004 of title 39, United States
Code, is repealed.
(2) Technical and conforming amendments.--
(A) The table of sections for chapter 20 of such title is
amended by repealing the item relating to section 2004.
(B) Section 2003(e)(2) of such title is amended by striking
``sections 2401 and 2004'' each place it appears and
inserting ``section 2401''.
(b) Clarification That Liabilities Formerly Paid Pursuant
to Section 2004 Remain Liabilities Payable by the Postal
Service.--Section 2003 of title 39, United States Code, is
amended by adding at the end the following:
``(h) Liabilities of the former Post Office Department to
the Employees' Compensation Fund (appropriations for which
were authorized by former section 2004, as in effect
[[Page H4486]]
before the effective date of this subsection) shall be
liabilities of the Postal Service payable out of the Fund.''.
(c) Effective Date.--
(1) In general.--This section and the amendments made by
this section shall take effect on the date of the enactment
of this Act or October 1, 1997, whichever is later.
(2) Provisions relating to payments for fiscal year 1998.--
(A) Amounts not yet paid.--No payment may be made to the
Postal Service Fund, on or after the date of the enactment of
this Act, pursuant to any appropriation for fiscal year 1998
authorized by section 2004 of title 39, United States Code
(as in effect before the effective date of this section).
(B) Amounts paid.--If any payment to the Postal Service
Fund is or has been made pursuant to an appropriation for
fiscal year 1998 authorized by such section 2004, then, an
amount equal to the amount of such payment shall be paid from
such Fund into the Treasury as miscellaneous receipts before
October 1, 1998.
Subtitle B--Civil Service
SEC. 6101. CONTRIBUTIONS UNDER THE CIVIL SERVICE RETIREMENT
SYSTEM.
(a) Individual Contributions.--
(1) In General.--Subsection (c) of section 8334 of title 5,
United States Code, is amended to read as follows:
``(c) Each employee or Member credited with civilian
service after July 31, 1920, for which retirement deductions
or deposits have not been made, may deposit with interest an
amount equal to the following percentages of his basic pay
received for that service:
``Percentage of basic
pay Service period
Employee................................ 2.50................... August 1, 1920, to June 30, 1926.
3.50................... July 1, 1926, to June 30, 1942.
5...................... July 1, 1942, to June 30, 1948.
6...................... July 1, 1948, to October 31, 1956.
6.50................... November 1, 1956, to December 31, 1969.
7...................... January 1, 1970, to December 31, 1998.
7.25................... January 1, 1999, to December 31, 1999.
7.40................... January 1, 2000, to December 31, 2000.
7.50................... January 1, 2001, to December 31, 2002.
7...................... After December 31, 2002.
Member or employee for Congressional 2.50................... August 1, 1920, to June 30, 1926.
employee service.
3.50................... July 1, 1926, to June 30, 1942.
5...................... July 1, 1942, to June 30, 1948.
6...................... July 1, 1948, to October 31, 1956.
6.50................... November 1, 1956, to December 31, 1969.
7.50................... January 1, 1970, to December 31, 1998.
7.75................... January 1, 1999, to December 31, 1999.
7.90................... January 1, 2000, to December 31, 2000.
8...................... January 1, 2001, to December 31, 2002.
7.50................... After December 31, 2002.
Member for Member service............... 2.50................... August 1, 1920, to June 30, 1926.
3.50................... July 1, 1926, to June 30, 1942.
5...................... July 1, 1942, to August 1, 1946.
6...................... August 2, 1946, to October 31, 1956.
7.50................... November 1, 1956, to December 31, 1969.
8...................... January 1, 1970, to December 31, 1998.
8.25................... January 1, 1999, to December 31, 1999.
8.40................... January 1, 2000, to December 31, 2000.
8.50................... January 1, 2001, to December 31, 2002.
8...................... After December 31, 2002.
Law enforcement officer for law 2.50................... August 1, 1920, to June 30, 1926.
enforcement service and firefighter for 3.50................... July 1, 1926, to June 30, 1942.
firefighter service.
5...................... July 1, 1942, to June 30, 1948.
6...................... July 1, 1948, to October 31, 1956.
6.50................... November 1, 1956, to December 31, 1969.
7...................... January 1, 1970, to December 31, 1974.
7.50................... January 1, 1975, to December 31, 1998.
7.75................... January 1, 1999, to December 31, 1999.
7.90................... January 1, 2000, to December 31, 2000.
8...................... January 1, 2001, to December 31, 2002.
7.50................... After December 31, 2002.
Bankruptcy judge........................ 2.50................... August 1, 1920, to June 30, 1926.
3.50................... July 3, 1926, to June 30, 1942.
5...................... July 1, 1942, to June 30, 1948.
6...................... July 1, 1948, to October 31, 1956.
6.50................... November 1, 1956, to December 31, 1969.
7...................... January 1, 1970, to December 31, 1983.
8...................... January 1, 1984, to December 31, 1998.
8.25................... January 1, 1999, to December 31, 1999.
8.40................... January 1, 2000, to December 31, 2000.
8.50................... January 1, 2001, to December 31, 2002.
8...................... After December 31, 2002.
Judge of the United States Court of 6...................... May 5, 1950, to October 31, 1956.
Appeals for the Armed Forces for 6.50................... November 1, 1956, to December 31, 1969.
service as a judge of that court.
7...................... January 1, 1970, to (but not including) the
date of the enactment of the Department of
Defense Authorization Act, 1984.
8...................... The date of the enactment of the Department
of Defense Authorization Act, 1984, to
December 31, 1998.
8.25................... January 1, 1999, to December 31, 1999.
8.40................... January 1, 2000, to December 31, 2000.
8.50................... January 1, 2001, to December 31, 2002.
8...................... After December 31, 2002.
United States magistrate................ 2.50................... August 1, 1920, to June 30, 1926.
3.50................... July 1, 1926, to June 30, 1942.
5...................... July 1, 1942, to June 30, 1948.
6...................... July 1, 1948, to October 31, 1956.
6.50................... November 1, 1956, to December 31, 1969.
7...................... January 1, 1970, to September 30, 1987.
8...................... October 1, 1987, to December 31, 1998.
8.25................... January 1, 1999, to December 31, 1999.
8.40................... January 1, 2000, to December 31, 2000.
8.50................... January 1, 2001, to December 31, 2002.
8...................... After December 31, 2002.
Claims Court Judge...................... 2.50................... August 1, 1920, to June 30, 1926.
3.50................... July 1, 1926, to June 30, 1942.
5...................... July 1, 1942, to June 30, 1948.
6...................... July 1, 1948, to October 31, 1956.
6.50................... November 1, 1956, to December 31, 1969.
7...................... January 1, 1970, to September 30, 1988.
8...................... October 1, 1988, to December 31, 1998.
8.25................... January 1, 1999, to December 31, 1999.
8.40................... January 1, 2000, to December 31, 2000.
8.50................... January 1, 2001, to December 31, 2002.
8...................... After December 31, 2002.
Notwithstanding the preceding provisions of this subsection
and any provision of section 206(b)(3) of the Federal
Employees' Retirement Contribution Temporary Adjustment Act
of 1983, the percentage of basic pay required under this
subsection in the case of an individual described in section
8402(b)(2) shall, with respect to any covered service (as
[[Page H4487]]
defined by section 203(a)(3) of such Act) performed by such
individual after December 31, 1983, and before January 1,
1987, be equal to 1.3 percent, and, with respect to any such
service performed after December 31, 1986, be equal to the
amount that would have been deducted from the employee's
basic pay under subsection (k) of this section if the
employee's pay had been subject to that subsection during
such period.''.
(2) Deductions.--The first sentence of section 8334(a)(1)
of title 5, United States Code, is amended to read as
follows: ``The employing agency shall deduct and withhold
from the basic pay of an employee, Member, Congressional
employee, law enforcement officer, firefighter, bankruptcy
judge, judge of the United States Court of Appeals for the
Armed Forces, United States magistrate, or Claims Court
judge, as the case may be, the percentage of basic pay
applicable under subsection (c).''.
(3) Other service.--
(A) Military service.--Section 8334(j) of title 5, United
States Code, is amended--
(i) in paragraph (1)(A) by inserting ``and subject to
paragraph (5),'' after ``Except as provided in subparagraph
(B),''; and
(ii) by adding at the end the following:
``(5) Effective with respect to any period of military
service performed after December 31, 1998, and before January
1, 2003, the percentage of basic pay under section 204 of
title 37 payable under paragraph (1) shall be equal to the
same percentage as would be applicable under section 8334(c)
for that same period for service as an `employee', subject to
paragraph (1)(B).''.
(B) Volunteer service.--Section 8334(l) of title 5, United
States Code, is amended--
(i) in paragraph (1) by striking the period at the end and
inserting ``, subject to paragraph (4).''; and
(ii) by adding at the end the following:
``(4) Effective with respect to any period of service as a
volunteer or volunteer leader performed after December 31,
1998, and before January 1, 2003, the percentage of the
readjustment allowance or stipend (as the case may be)
payable under paragraph (1) shall be equal to the same
percentage as would be applicable under section 8334(c) for
that same period for service as an `employee'.''.
(b) Government Contributions.--
(1) In general.--Section 8334 of title 5, United States
Code, is amended by adding at the end the following:
``(m)(1) This subsection shall govern for purposes of
determining the amount to be contributed under the second
sentence of subsection (a)(1) with respect to any service--
``(A) which is performed after September 30, 1997, and
before January 1, 2003; and
``(B) as to which a contribution under such sentence would
otherwise be payable.
``(2) The amount of the contribution required under the
second sentence of subsection (a)(1) with respect to any
service described in paragraph (1) shall (instead of the
amount which would otherwise apply under such sentence) be
equal to the amount of basic pay received for such service by
the employee or Member involved, multiplied by the percentage
under paragraph (3).
``(3)(A) The percentage under this paragraph is, with
respect to any service, equal to the sum of--
``(i) the percentage which would have been applicable under
subsection (c), with respect to such service, if it had been
performed in fiscal year 1997, plus
``(ii) the applicable percentage under subparagraph (B).
``(B) The applicable percentage under this subparagraph is,
with respect to service performed--
``(i) after September 30, 1997, and before October 1, 2002,
1.51 percent; or
``(ii) after September 30, 2002, and before January 1,
2003, 0 percent.
``(4) An amount determined under this subsection with
respect to any period of service shall, for purposes of
subsection (k)(1)(B) (and any other provision of law which
similarly refers to contributions under the second sentence
of subsection (a)(1)), be treated as the amount required
under such sentence with respect to such service.
``(5)(A) Notwithstanding paragraphs (1) through (4), the
amount to be contributed by the Postal Service by reason of
the second sentence of subsection (a)(1) with respect to any
service performed by an officer or employee of the Postal
Service during the period described in subparagraph (A) of
paragraph (1) shall be determined as if section 6101 of the
Balanced Budget Act of 1997 had never been enacted.
``(B) For purposes of this paragraph, the term `Postal
Service' means the United States Postal Service and the
Postal Rate Commission.''.
(2) Conforming amendment.--The second sentence of section
8334(a)(1) of title 5, United States Code, is amended by
striking the period and inserting ``, subject to subsection
(m).''.
SEC. 6102. CONTRIBUTIONS UNDER THE FEDERAL EMPLOYEES'
RETIREMENT SYSTEM.
(a) Individual Contributions.--
(1) In general.--Subsection (a) of section 8422 of title 5,
United States Code, is amended--
(A) in paragraph (1) by striking ``paragraph (2).'' and
inserting ``paragraph (2) or (3), as applicable.'';
(B) in paragraph (2) by striking ``The applicable'' and
inserting ``Subject to paragraph (3), the applicable''; and
(C) by adding at the end the following:
``(3)(A) The applicable percentage under this subsection
shall, for purposes of service performed after December 31,
1998, and before January 1, 2003, be equal to--
``(i) the applicable percentage under subparagraph (B),
minus
``(ii) the percentage then in effect under section 3101(a)
of the Internal Revenue Code of 1986 (relating to rate of tax
for old-age, survivors, and disability insurance).
``(B) The applicable percentage under this subparagraph
shall be as follows:
``Percentage of basic
pay Service period
Employee................................ 7.25................... January 1, 1999, to December 31, 1999.
7.40................... January 1, 2000, to December 31, 2000.
7.50................... January 1, 2001, to December 31, 2002.
Congressional employee.................. 7.75................... January 1, 1999, to December 31, 1999.
7.90................... January 1, 2000, to December 31, 2000.
8...................... January 1, 2001, to December 31, 2002.
Member.................................. 7.75................... January 1, 1999, to December 31, 1999.
7.90................... January 1, 2000, to December 31, 2000.
8...................... January 1, 2001, to December 31, 2002.
Law enforcement officer................. 7.75................... January 1, 1999, to December 31, 1999.
7.90................... January 1, 2000, to December 31, 2000.
8...................... January 1, 2001, to December 31, 2002.
Firefighter............................. 7.75................... January 1, 1999, to December 31, 1999.
7.90................... January 1, 2000, to December 31, 2000.
8...................... January 1, 2001, to December 31, 2002.
Air traffic controller.................. 7.75................... January 1, 1999, to December 31, 1999.
7.90................... January 1, 2000, to December 31, 2000.
8...................... January 1, 2001, to December 31, 2002.''.
(2) Other service.--
(A) Military service.--Section 8422(e) of title 5, United
States Code, is amended--
(i) in paragraph (1)(A) by inserting ``and subject to
paragraph (5),'' after ``Except as provided in subparagraph
(B),''; and
(ii) by adding at the end the following:
``(5) Effective with respect to any period of military
service performed after December 31, 1998, and before January
1, 2003, the percentage of basic pay under section 204 of
title 37 payable under paragraph (1) shall be equal to the
sum of the percentage specified in paragraph (1), plus--
``(A) .25 percent, if performed after December 31, 1998,
and before January 1, 2000;
``(B) .40 percent, if performed after December 31, 1999,
and before January 1, 2001;
``(C) .50 percent, if performed after December 31, 2000,
and before January 1, 2003.''.
(B) Volunteer service.--Section 8422(f) of title 5, United
States Code, is amended--
(i) in paragraph (1) by striking the period at the end and
inserting ``, subject to paragraph (4).''; and
(ii) by adding at the end the following:
``(4) Effective with respect to any period of service as a
volunteer or volunteer leader performed after December 31,
1998, and before January 1, 2003, the percentage of the
readjustment allowance or stipend (as the case may be)
payable under paragraph (1) shall be equal to the sum of the
percentage specified in paragraph (1), plus--
``(A) .25 percent, if performed after December 31, 1998,
and before January 1, 2000;
``(B) .40 percent, if performed after December 31, 1999,
and before January 1, 2001;
``(C) .50 percent, if performed after December 31, 2000,
and before January 1, 2003.''.
(b) Government Contributions.--
(1) In general.--Section 8423 of title 5, United States
Code, is amended by adding at the end the following:
``(d)(1) This subsection shall govern for purposes of
determining the amount to be contributed by an employing
agency for any period (or portion thereof)--
``(A) which is occurs after September 30, 1997, and before
January 1, 2003; and
``(B) as to which a contribution under subsection (a) would
otherwise be payable by such agency.
``(2) The amount of the contribution required under
subsection (a) with respect to any period (or portion
thereof) described in paragraph (1) shall (instead of the
amount which would otherwise apply) be equal to the amount
which would be required under subsection (a) if section
6102(a) of the Balanced Budget Act of 1997 had never been
enacted.''.
[[Page H4488]]
(2) Conforming amendment.--Section 8423(a)(1) of title 5,
United States Code, is amended by striking ``Each'' and
inserting ``Subject to subsection (d), each''.
SEC. 6103. GOVERNMENT CONTRIBUTION FOR HEALTH BENEFITS.
(a) In General.--Section 8906 of title 5, United States
Code, is amended by striking subsection (a) and all that
follows through the end of paragraph (1) of subsection (b)
and inserting the following:
``(a)(1) The Office of Personnel Management shall, not
later than October 1 of each year, determine the weighted
average of the subscription charges that will be in effect
during the following contract year with respect to--
``(A) enrollments under this chapter for self alone; and
``(B) enrollments under this chapter for self and family.
``(2) In determining each weighted average under paragraph
(1), the weight to be given to a particular subscription
charge shall, with respect to each plan (and option) to which
it is to apply, be commensurate with the number of enrollees
enrolled in such plan (and option) as of March 31 of the year
in which the determination is being made.
``(3) For purposes of paragraph (2), the term `enrollee'
means any individual who, during the contract year for which
the weighted average is to be used under this section, will
be eligible for a Government contribution for health
benefits.
``(b)(1) Except as provided in paragraphs (2) and (3), the
biweekly Government contribution for health benefits for an
employee or annuitant enrolled in a health benefits plan
under this chapter is adjusted to an amount equal to 72
percent of the weighted average under subsection (a)(1)(A) or
(B), as applicable. For an employee, the adjustment begins on
the first day of the employee's first pay period of each
year. For an annuitant, the adjustment begins on the first
day of the first period of each year for which an annuity
payment is made.''.
(b) Effective Date.--This section and the amendment made by
this section shall take effect on the first day of the
contract year that begins in 1999, except that nothing in
this subsection shall prevent the Office of Personnel
Management from taking any action, before such first day,
which it considers necessary in order to ensure the timely
implementation of such amendment.
SEC. 6104. EFFECTIVE DATE.
(a) In General.--Except as provided in section 6103, this
subtitle shall take effect on--
(1) October 1, 1997; or
(2) if later, the date of the enactment of this Act.
(b) Special Rule.--If the date of the enactment of this Act
is later than October 1, 1997, then, for purposes of applying
the amendments made by sections 6101 and 6102--
(1) any reference in any such amendment to ``September 30,
1997'' shall be treated as referring to the day before the
date of the enactment of this Act; and
(2) any reference in any such amendment to ``October 1,
1997'' shall be treated as referring to the date of the
enactment of this Act.
TITLE VII--COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
SEC. 7001. EXTENSION OF HIGHER VESSEL TONNAGE DUTIES.
(a) Extension of Duties.--Section 36 of the Act of August
5, 1909 (36 Stat. 111; 46 U.S.C. App. 121), is amended by
striking ``for fiscal years 1991, 1992, 1993, 1994, 1995,
1996, 1997, 1998,'' each place it appears and inserting ``for
fiscal years through fiscal year 2002,''.
(b) Conforming Amendment.--The Act entitled ``An Act
concerning tonnage duties on vessels entering otherwise than
by sea'', approved March 8, 1910 (36 Stat. 234; 46 U.S.C.
App. 132), is amended by striking ``for fiscal years 1991,
1992, 1993, 1994, 1995, 1996, 1997, and 1998,'' and inserting
``for fiscal years through fiscal year 2002,''.
SEC. 7002. SALE OF GOVERNORS ISLAND, NEW YORK.
(a) In General.--Notwithstanding any other provision of
law, no earlier than fiscal year 2002, the Administrator of
General Services shall dispose of by sale at fair market
value all rights, title, and interests of the United States
in and to the land of, and improvements to, Governors Island,
New York.
(b) Right of First Refusal.--Before a sale is made under
subsection (a) to any other parties, the State of New York
and the city of New York shall be given the right of first
refusal to purchase all or part of Governors Island. Such
right may be exercised by either the State of New York or the
city of New York or by both parties acting jointly.
(c) Proceeds.--Proceeds from the disposal of Governors
Island under subsection (a) shall be deposited in the general
fund of the Treasury and credited as miscellaneous receipts.
SEC. 7003. SALE OF AIR RIGHTS.
(a) In General.--Notwithstanding any other provision of
law, the Administrator of General Services shall sell, at
fair market value and in a manner to be determined by the
Administrator, the air rights adjacent to Washington Union
Station described in subsection (b), including air rights
conveyed to the Administrator under subsection (d). The
Administrator shall complete the sale by such date as is
necessary to ensure that the proceeds from the sale will be
deposited in accordance with subsection (c).
(b) Description.--The air rights referred to in subsection
(a) total approximately 16.5 acres and are depicted on the
plat map of the District of Columbia as follows:
(1) Part of lot 172, square 720.
(2) Part of lots 172 and 823, square 720.
(3) Part of lot 811, square 717.
(c) Proceeds.--Before September 30, 2002, proceeds from the
sale of air rights under subsection (a) shall be deposited in
the general fund of the Treasury and credited as
miscellaneous receipts.
(d) Conveyance of Amtrak Air Rights.--
(1) General rule.--As a condition of future Federal
financial assistance, Amtrak shall convey to the
Administrator of General Services on or before December 31,
1997, at no charge, all of the air rights of Amtrak described
in subsection (b).
(2) Failure to comply.--If Amtrak does not meet the
condition established by paragraph (1), Amtrak shall be
prohibited from obligating Federal funds after March 1, 1998.
TITLE VIII--COMMITTEE ON VETERANS' AFFAIRS
SEC. 8001. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This title may be cited as the ``Veterans
Reconciliation Act of 1997''.
(b) Table of Contents.--The table of contents for this
title is as follows:
Sec. 8001. Short title; table of contents.
Subtitle A--Extension of Temporary Authorities
Sec. 8011. Authority to require that certain veterans make copayments
in exchange for receiving health-care benefits.
Sec. 8012. Medical care cost recovery for non-service-connected
disabilities of service-connected veterans.
Sec. 8013. Department of Veterans Affairs medical-care receipts.
Sec. 8014. Income verification authority.
Sec. 8015. Limitation on pension for certain recipients of medicaid-
covered nursing home care.
Sec. 8016. Home loan fees.
Sec. 8017. Procedures applicable to liquidation sales on defaulted home
loans guaranteed by the Secretary of Veterans Affairs.
Sec. 8018. Enhanced loan asset sale authority.
Subtitle B--Other Matters
Sec. 8021. Rounding down of cost-of-living adjustments in compensation
and DIC rates.
Sec. 8022. Withholding of payments and benefits.
Subtitle A--Extension of Temporary Authorities
SEC. 8011. AUTHORITY TO REQUIRE THAT CERTAIN VETERANS MAKE
COPAYMENTS IN EXCHANGE FOR RECEIVING HEALTH-
CARE BENEFITS.
(a) Hospital and Medical Care.--
(1) Extension.--Section 1710(f)(2)(B) of title 38, United
States Code, is amended by inserting ``before September 30,
2002,'' after ``(B)''.
(2) Repeal of superseded provision.--Section 8013(e) of the
Omnibus Budget Reconciliation Act of 1990 (38 U.S.C. 1710
note) is repealed.
(b) Outpatient Medications.--Section 1722A(c) of title 38,
United States Code, is amended by striking out ``September
30, 1998'' and inserting in lieu thereof ``September 30,
2002''.
SEC. 8012. MEDICAL CARE COST RECOVERY FOR NON-SERVICE-
CONNECTED DISABILITIES OF SERVICE-CONNECTED
VETERANS.
Section 1729(a)(2)(E) of title 38, United States Code, is
amended by striking out ``before October 1, 1998,'' and
inserting ``before October 1, 2002,''.
SEC. 8013. DEPARTMENT OF VETERANS AFFAIRS MEDICAL-CARE
RECEIPTS.
(a) Allocation of Receipts.--(1) Chapter 17 of title 38,
United States Code, is amended by inserting after section
1729 the following new section:
``Sec. 1729A. Department of Veterans Affairs Medical Care
Collections Fund
``(a) There is in the Treasury a fund to be known as the
Department of Veterans Affairs Medical Care Collections Fund.
``(b) Amounts recovered or collected after September 30,
1997, under any of the following provisions of law shall be
deposited in the fund:
``(1) Section 1710(f) of this title.
``(2) Section 1710(g) of this title.
``(3) Section 1711 of this title.
``(4) Section 1722A of this title.
``(5) Section 1729 of this title.
``(6) Public Law 87-693, popularly known as the `Federal
Medical Care Recovery Act' (42 U.S.C. 2651 et seq.), to the
extent that a recovery or collection under that law is based
on medical care or services furnished under this chapter.
``(c)(1) Subject to the provisions of appropriations Acts,
amounts in the fund shall be available, without fiscal year
limitation, to the Secretary for the following purposes:
``(A) Furnishing medical care and services under this
chapter, to be available during any fiscal year for the same
purposes and subject to the same limitations (other than with
respect to the period of availability for obligation) as
apply to amounts appropriated from the general fund of the
Treasury for that fiscal year for medical care.
``(B) Expenses of the Department for the identification,
billing, auditing, and collection of amounts owed the United
States by reason of medical care and services furnished under
this chapter.
``(2) Amounts available under paragraph (1) may not be used
for any purpose other than a purpose set forth in
subparagraph (A) or (B) of that paragraph.
[[Page H4489]]
``(2)(A) If for fiscal year 1998, 1999, or 2000 the
Secretary determines that the total amount to be recovered
for that fiscal year under the provisions of law specified in
subsection (b) will be less than the amount contained in the
latest Congressional Budget Office baseline estimate
(computed under section 257 of the Balanced Budget and
Emergency Deficit Control Act of 1985) for the amount of such
recoveries for that fiscal year by at least $25,000,000, the
Secretary shall promptly certify to the Secretary of the
Treasury the amount of the shortfall (as estimated by the
Secretary) that is in excess of $25,000,000. Upon receipt of
such a certification, the Secretary of the Treasury shall,
not later than 30 days after receiving the certification,
deposit in the fund, from any unobligated amounts in the
Treasury, an amount equal to the amount certified by the
Secretary.
``(B) For a fiscal year for which a deposit is made under
subparagraph (A), if the Secretary subsequently determines
that the actual amount recovered for that fiscal year under
the provisions of law specified in subsection (b) is greater
than the amount estimated by the Secretary that was used for
purposes of the certification by the Secretary under
subparagraph (A), the Secretary shall pay into the general
fund of the Treasury, from amounts available for medical
care, an amount equal to the difference between the amount
actually recovered and the amount so estimated (but not in
excess of the amount of the deposit under subparagraph (A)
pursuant to such certification).
``(C) For a fiscal year for which a deposit is made under
subparagraph (A), if the Secretary subsequently determines
that the actual amount recovered for that fiscal year under
the provisions of law specified in subsection (b) is less
than the amount estimated by the Secretary that was used for
purposes of the certification by the Secretary under
subparagraph (A), the Secretary shall promptly certify to the
Secretary of the Treasury the amount of the shortfall. Upon
receipt of such a certification, the Secretary of the
Treasury shall, not later than 30 days after receiving the
certification, deposit in the fund, from any unobligated
amounts in the Treasury, an amount equal to the amount
certified by the Secretary.
``(d)(1) The Secretary may allocate amounts available to
the Secretary under subsection (c) among components of the
Department in such manner as the Secretary considers
appropriate.
``(2) The Secretary shall establish a policy for the
allocation under paragraph (1) of amounts in the fund. Such
policy shall be designed so as to facilitate the realization
of the maximum feasible collections under the provisions of
law specified in subsection (b). In developing the policy,
the Secretary shall take into account any factors beyond the
control of the Secretary that the Secretary considers may
impede such collections.
``(e)(1) The Secretary shall submit to the Committees on
Veterans' Affairs of the Senate and House of Representatives
quarterly reports on the operation of this section for fiscal
years 1998, 1999, and 2000 and for the first quarter of
fiscal year 2001. Each such report shall specify the amount
collected under each of the provisions specified in
subsection (b) during the preceding quarter and the amount
originally estimated to be collected under each such
provision during such quarter.
``(2) A report under paragraph (1) for a quarter shall be
submitted not later than 45 days after the end of that
quarter.''.
(2) The table of sections at the beginning of such chapter
is amended by inserting after the item relating to section
1729 the following new item:
``1729A. Department of Veterans Affairs Medical Care Collections
Fund.''.
(b) Conforming Amendments.--Chapter 17 of such title is
amended as follows:
(1) Section 1710(f) is amended by striking out paragraph
(4) and redesignating paragraph (5) as paragraph (4).
(2) Section 1710(g) is amended by striking out paragraph
(4).
(3) Section 1722A(b) is amended by striking out
``Department of Veterans Affairs Medical-Care Cost Recovery
Fund'' and inserting in lieu thereof ``Department of Veterans
Affairs Medical Care Collections Fund''.
(4) Section 1729 is amended by striking out subsection (g).
(c) Termination of Medical-Care Cost Recovery Fund.--The
amount of the unobligated balance remaining in the Department
of Veterans Affairs Medical-Care Cost Recovery Fund
(established pursuant to section 1729(g)(1) of title 38,
United States Code), at the close of September 30, 1997,
shall be deposited, not later than December 31, 1997, in the
Treasury as miscellaneous receipts, and that fund shall be
terminated when the deposit occurs.
(d) Determination of Amounts Subject to Recovery.--Section
1729 of title 38, United States Code, is amended--
(1) in subsection (a)(1), by striking out ``the reasonable
cost of'' and inserting in lieu thereof ``reasonable charges
for'';
(2) in subsection (c)(2)--
(A) by striking out ``the reasonable cost of'' in the first
sentence of subparagraph (A) and in subparagraph (B) and
inserting in lieu thereof ``reasonable charges for''; and
(B) by striking out ``cost'' in the second sentence of
subparagraph (A) and inserting in lieu thereof ``charges''.
(e) Technical Amendment.--Paragraph (2) of section 712(b)
of title 38, United States Code, is amended--
(1) by striking out subparagraph (B); and
(2) by redesignating subparagraph (C) as subparagraph (B).
(f) Implementation.--(1) Not later than January 1, 1999,
the Secretary of Veterans Affairs shall submit to the
Committees on Veterans' Affairs of the Senate and House of
Representatives a report on the implementation of this
section. The report shall describe the collections under each
of the provisions specified in section 1729A(b) of title 38,
United States Code, as added by subsection (a). Information
on such collections shall be shown for each of the health
service networks (known as Veterans Integrated Service
Networks) and, to the extent practicable for each facility
within each such network. The Secretary shall include in the
report an analysis of differences among the networks with
respect to (A) the market in which the networks operates, (B)
the effort expended to achieve collections, (C) the
efficiency of such effort, and (D) any other relevant
information.
(2) The Secretary shall adjust the allocation policy
established under section 1729A(d)(2) of title 38, United
States Code, as added by subsection (a), to take account of
differences in collections that the Secretary determines are
attributable to the different markets in which networks
operate and shall include in the report under paragraph (1) a
description of such adjustments.
(g) Effective Date.--(1) Except as provided in paragraph
(2), this section and the amendments made by this section
shall take effect on October 1, 1997.
(2) The amendments made by subsection (d) shall take effect
on the date of the enactment of this Act.
SEC. 8014. INCOME VERIFICATION AUTHORITY.
(a) Extension.--Section 5317(g) of title 38, United States
Code, is amended by striking out ``September 30, 1998'' and
inserting in lieu thereof ``September 30, 2002''.
(b) Social Security and Tax Return Information.--Section
6103(l)(7) of the Internal Revenue Code of 1986 is amended by
striking out ``Clause (viii) shall not apply after September
30, 1998'' and inserting in lieu thereof ``Clause (viii)
shall not apply after September 30, 2002''.
SEC. 8015. LIMITATION ON PENSION FOR CERTAIN RECIPIENTS OF
MEDICAID-COVERED NURSING HOME CARE.
Section 5503(f)(7) of title 38, United States Code, is
amended by striking out ``September 30, 1998'' and inserting
in lieu thereof ``September 30, 2002''.
SEC. 8016. HOME LOAN FEES.
(a) Increase in Loan Fee Under Property Management
Program.--Paragraph (2) of section 3729(a) of title 38,
United States Code, is amended--
(1) in subparagraph (A), by striking out ``or 3733(a)'';
(2) by striking out ``and'' at the end of subparagraph (D);
(3) by striking out the period at the end of subparagraph
(E) and inserting in lieu thereof ``; and''; and
(4) by adding at the end the following new subparagraph:
``(F) in the case of a loan made under section 3733(a) of
this title, the amount of such fee shall be 2.25 percent of
the total loan amount.''.
(b) Extensions.--Such section is further amended--
(1) in paragraph (4)--
(A) by striking out ``October 1, 1998'' and inserting in
lieu thereof ``October 1, 2002''; and
(B) by striking out ``or (E)'' and inserting in lieu
thereof ``(E), or (F)''; and
(2) in paragraph (5)(C), by striking out ``October 1,
1998'' and inserting in lieu thereof ``October 1, 2002''.
SEC. 8017. PROCEDURES APPLICABLE TO LIQUIDATION SALES ON
DEFAULTED HOME LOANS GUARANTEED BY THE
SECRETARY OF VETERANS AFFAIRS.
Section 3732(c)(11) of title 38, United States Code, is
amended by striking out ``October 1, 1998'' and inserting
``October 1, 2002''.
SEC. 8018. ENHANCED LOAN ASSET SALE AUTHORITY.
Section 3720(h)(2) of title 38, United States Code, is
amended by striking out ``December 31, 1997'' and inserting
in lieu thereof ``September 30, 2002''.
Subtitle B--Other Matters
SEC. 8021. ROUNDING DOWN OF COST-OF-LIVING ADJUSTMENTS IN
COMPENSATION AND DIC RATES.
(a) Compensation COLAS.--(1) Chapter 11 of title 38, United
States Code, is amended by inserting after section 1102 the
following new section:
``Sec. 1103. Cost-of-living adjustments
``(a) In the computation of cost-of-living adjustments for
fiscal years 1998 through 2002 in the rates of, and dollar
limitations applicable to, compensation payable under this
chapter, such adjustments shall be made by a uniform
percentage that is no more than the percentage equal to the
social security increase for that fiscal year, with all
increased monthly rates and limitations (other than increased
rates or limitations equal to a whole dollar amount) rounded
down to the next lower whole dollar amount.
``(b) For purposes of this section, the term `social
security increase' means the percentage by which benefit
amounts payable under title II of the Social Security Act (42
U.S.C. 401 et seq.) are increased for any fiscal year as a
result of a determination under section 215(i) of such Act
(42 U.S.C. 415(i)).''.
(2) The table of sections at the beginning of such chapter
is amended by inserting after
[[Page H4490]]
the item relating to section 1102 the following new item:
``1103. Cost-of-living adjustments.''.
(b) Out-Year DIC COLAs.--(1) Chapter 13 of title 38, United
States Code, is amended by inserting after section 1302 the
following new section:
``Sec. 1303. Cost-of-living adjustments
``(a) In the computation of cost-of-living adjustments for
fiscal years 1998 through 2002 in the rates of dependency and
indemnity compensation payable under this chapter, such
adjustments shall be made by a uniform percentage that is no
more than the percentage equal to the social security
increase for that fiscal year, with all increased monthly
rates (other than increased rates equal to a whole dollar
amount) rounded down to the next lower whole dollar amount.
``(b) For purposes of this section, the term `social
security increase' means the percentage by which benefit
amounts payable under title II of the Social Security Act (42
U.S.C. 401 et seq.) are increased for any fiscal year as a
result of a determination under section 215(i) of such Act
(42 U.S.C. 415(i)).''.
(2) The table of sections at the beginning of such chapter
is amended by inserting after the item relating to section
1302 the following new item:
``1303. Cost-of-living adjustments.''.
SEC. 8022. WITHHOLDING OF PAYMENTS AND BENEFITS.
(a) Notice Required in Lieu of Consent or Court Order.--
Section 3726 of title 38, United States Code, is amended by
striking out ``unless'' and all that follows and inserting in
lieu thereof the following: ``unless the Secretary provides
such veteran or surviving spouse with notice by certified
mail with return receipt requested of the authority of the
Secretary to waive the payment of indebtedness under section
5302(b) of this title. If the Secretary does not waive the
entire amount of the liability, the Secretary shall then
determine whether the veteran or surviving spouse should be
released from liability under section 3713(b) of this title.
If the Secretary determines that the veteran or surviving
spouse should not be released from liability, the Secretary
shall notify the veteran or surviving spouse of that
determination and provide a notice of the procedure for
appealing that determination, unless the Secretary has
previously made such determination and notified the veteran
or surviving spouse of the procedure for appealing the
determination.''.
(b) Conforming Amendment.--Section 5302(b) of such title is
amended by inserting ``with return receipt requested'' after
``certified mail''.
(c) Effective Date.--The amendments made by this section
shall apply with respect to any indebtedness to the United
States arising pursuant to chapter 37 of title 38, United
States Code, before, on, or after the date of the enactment
of this Act.
TITLE IX--COMMITTEE ON WAYS AND MEANS--NONMEDICARE
SEC. 9000. TABLE OF CONTENTS.
The table of contents of this title is as follows:
Sec. 9000. Table of contents.
Subtitle A--TANF Block Grant
Sec. 9001. Welfare-to-work grants.
Sec. 9002. Limitation on amount of Federal funds transferable to title
XX programs.
Sec. 9003. Clarification of limitation on number of persons who may be
treated as engaged in work by reason of participation in
vocational educational training.
Sec. 9004. Rules governing expenditures of funds for work experience
and community service programs.
Sec. 9005. State option to take account of certain work activities of
recipients with sufficient participation in work
experience or community service programs.
Sec. 9006. Worker protections.
Sec. 9007. Penalty for failure of State to reduce assistance for
recipients refusing without good cause to work.
Subtitle B--Supplemental Security Income
Sec. 9101. Requirement to perform childhood disability redeterminations
in missed cases.
Sec. 9102. Repeal of maintenance of effort requirements applicable to
optional State programs for supplementation of SSI
benefits.
Sec. 9103. Fees for Federal administration of State supplementary
payments.
Subtitle C--Child Support Enforcement
Sec. 9201. Clarification of authority to permit certain redisclosures
of wage and claim information.
Subtitle D--Restricting Welfare and Public Benefits for Aliens
Sec. 9301. Extension of eligibility period for refugees and certain
other qualified aliens from 5 to 7 years for SSI and
medicaid.
Sec. 9302. SSI eligibility for aliens receiving SSI on August 22, 1996.
Sec. 9303. SSI eligibility for permanent resident aliens who are
members of an Indian tribe.
Sec. 9304. Verification of eligibility for State and local public
benefits.
Sec. 9305. Derivative eligibility for benefits.
Sec. 9306. Effective date.
Subtitle E--Unemployment Compensation
Sec. 9401. Clarifying provision relating to base periods.
Sec. 9402. Increase in Federal unemployment account ceiling.
Sec. 9403. Special distribution to States from Unemployment Trust Fund.
Sec. 9404. Interest-free advances to State accounts in Unemployment
Trust Fund restricted to States which meet funding goals.
Sec. 9405. Exemption of service performed by election workers from the
Federal unemployment tax.
Sec. 9406. Treatment of certain services performed by inmates.
Sec. 9407. Exemption of service performed for an elementary or
secondary school operated primarily for religious
purposes from the Federal unemployment tax.
Sec. 9408. State program integrity activities for unemployment
compensation.
Subtitle F--Increase in Public Debt Limit
Sec. 9501. Increase in public debt limit.
Subtitle A--TANF Block Grant
SEC. 9001. WELFARE-TO-WORK GRANTS.
(a) Grants to States.--
(1) In general.--Section 403(a) of the Social Security Act
(42 U.S.C. 603(a)) is amended by adding at the end the
following:
``(5) Welfare-to-work grants.--
``(A) Noncompetitive grants.--
``(i) Entitlement.--A State shall be entitled to receive
from the Secretary a grant for each fiscal year specified in
subparagraph (H) of this paragraph for which the State is a
welfare-to-work State, in an amount that does not exceed the
lesser of----
``(I) 2 times the total of the expenditures by the State
(excluding qualified State expenditures (as defined in
section 409(a)(7)(B)(i)) and any expenditure described in
subclause (I), (II), or (IV) of section 409(a)(7)(B)(iv))
during the fiscal year for activities described in
subparagraph (C)(i) of this paragraph; or
``(II) the allotment of the State under clause (iii) of
this subparagraph for the fiscal year.
``(ii) Welfare-to-work state.--A State shall be considered
a welfare-to-work State for a fiscal year for purposes of
this subparagraph if the Secretary, after consultation (and
the sharing of any plan or amendment thereto submitted under
this clause) with the Secretary of Health and Human Services
and the Secretary of Housing and Urban Development,
determines that the State meets the following requirements:
``(I) The State has submitted to the Secretary (in the form
of an addendum to the State plan submitted under section 402)
a plan which--
``(aa) describes how, consistent with this subparagraph,
the State will use any funds provided under this subparagraph
during the fiscal year;
``(bb) specifies the formula to be used pursuant to clause
(vi) to distribute funds in the State, and describes the
process by which the formula was developed;
``(cc) contains evidence that the plan was developed in
consultation and coordination with sub-State areas; and
``(dd) is approved by the agency administering the State
program funded under this part.
``(II) The State has provided the Secretary with an
estimate of the amount that the State intends to expend
during the fiscal year (excluding expenditures described in
section 409(a)(7)(B)(iv)) for activities described in
subparagraph (C)(i) of this paragraph.
``(III) The State has agreed to negotiate in good faith
with the Secretary of Health and Human Services with respect
to the substance of any evaluation under section 413(j), and
to cooperate with the conduct of any such evaluation.
``(IV) The State is an eligible State for the fiscal year.
``(V) Qualified State expenditures (within the meaning of
section 409(a)(7)) are at least 80 percent of historic State
expenditures (within the meaning of such section), with
respect to the fiscal year or the immediately preceding
fiscal year.
``(iii) Allotments to welfare-to-work states.--The
allotment of a welfare-to-work State for a fiscal year shall
be the available amount for the fiscal year multiplied by the
State percentage for the fiscal year.
``(iv) Available amount.--As used in this subparagraph, the
term `available amount' means, for a fiscal year, the sum
of--
``(I) 50 percent of the sum of--
``(aa) the amount specified in subparagraph (H) for the
fiscal year, minus the total of the amounts reserved pursuant
to subparagraphs (F) and (G) for the fiscal year; and
``(bb) any amount reserved pursuant to subparagraph (F) for
the immediately preceding fiscal year that has not been
obligated; and
``(II) any available amount for the immediately preceding
fiscal year that has not been obligated by a State or sub-
State entity.
``(v) State percentage.--As used in clause (iii), the term
`State percentage' means, with respect to a fiscal year, \1/
3\ of the sum of--
``(aa) the percentage represented by the number of
individuals in the State whose income is less than the
poverty line divided by the number of such individuals in the
United States;
``(bb) the percentage represented by the number of
unemployed individuals in the
[[Page H4491]]
State divided by the number of such individuals in the United
States; and
``(cc) the percentage represented by the number of
individuals who are adult recipients of assistance under the
State program funded under this part divided by the number of
individuals in the United States who are adult recipients of
assistance under any State program funded under this part.
``(vi) Distribution of funds within states.--
``(I) In general.--A State to which a grant is made under
this subparagraph shall distribute not less than 85 percent
of the grant funds among the service delivery areas in the
State, in accordance with a formula which--
``(aa) determines the amount to be distributed for the
benefit of a service delivery area in proportion to the
number (if any) by which the number of individuals residing
in the service delivery area with an income that is less than
the poverty line exceeds 5 percent of the population of the
service delivery area, relative to such number for the other
service delivery areas in the State, and accords a weight of
not less than 50 percent to this factor;
``(bb) may determine the amount to be distributed for the
benefit of a service delivery area in proportion to the
number of adults residing in the service delivery area who
are recipients of assistance under the State program funded
under this part (whether in effect before or after the
amendments made by section 103(a) of the Personal
Responsibility and Work Opportunity Reconciliation Act first
applied to the State) for at least 30 months (whether or not
consecutive) relative to the number of such adults residing
in the other service delivery areas in the State; and
``(cc) may determine the amount to be distributed for the
benefit of a service delivery area in proportion to the
number of unemployed individuals residing in the service
delivery area relative to the number of such individuals
residing in the other service delivery areas in the State.
``(II) Special rule.--Notwithstanding subclause (I), if the
formula used pursuant to subclause (I) would result in the
distribution of less than $100,000 during a fiscal year for
the benefit of a service delivery area, then in lieu of
distributing such sum in accordance with the formula, such
sum shall be available for distribution under subclause (III)
during the fiscal year.
``(III) Projects to help long-term recipients of assistance
into the work force.--The Governor of a State to which a
grant is made under this subparagraph may distribute not more
than 15 percent of the grant funds (plus any amount required
to be distributed under this subclause by reason of subclause
(II)) to projects that appear likely to help long-term
recipients of assistance under the State program funded under
this part (whether in effect before or after the amendments
made by section 103(a) of the Personal Responsibility and
Work Opportunity Reconciliation Act first applied to the
State) enter the work force.
``(vii) Administration.--
``(I) In general.--A grant made under this subparagraph to
a State shall be administered by the State agency that is
administering, or supervising the administration of, the
State program funded under this part, or by another State
agency designated by the Governor of the State.
``(II) Spending by private industry councils.--The private
industry council for a service delivery area shall have sole
authority to expend the amounts provided for the benefit of a
service delivery area under subparagraph (vi)(I), pursuant to
an agreement with the agency that is administering the State
program funded under this part in the service delivery area.
``(B) Competitive grants.--
``(i) In general.--The Secretary, in consultation with the
Secretary of Health and Human Services and the Secretary of
Housing and Urban Development, shall award grants in
accordance with this subparagraph, in fiscal years 1998 and
1999, for projects proposed by eligible applicants, based on
the following:
``(I) The effectiveness of the proposal in--
``(aa) expanding the base of knowledge about programs aimed
at moving recipients of assistance under State programs
funded under this part who are least job ready into the work
force.
``(bb) moving recipients of assistance under State programs
funded under this part who are least job ready into the work
force; and
``(cc) moving recipients of assistance under State programs
funded under this part who are least job ready into the work
force, even in labor markets that have a shortage of low-
skill jobs.
``(II) At the discretion of the Secretary, any of the
following:
``(aa) The history of success of the applicant in moving
individuals with multiple barriers into work.
``(bb) Evidence of the applicant's ability to leverage
private, State, and local resources.
``(cc) Use by the applicant of State and local resources
beyond those required by subparagraph (A).
``(dd) Plans of the applicant to coordiate with other
organizations at the local and State level.
``(ee) Use by the applicant of current or former recipients
of assistance under a State program funded under this part as
mentors, case managers, or service providers.
``(ii) Eligible applicants.--As used in clause (i), the
term `eligible applicant' means a private industry council or
a political subdivision of a State that submits a proposal
that is approved by the agency administering the State
program funded under this part.
``(iii) Determination of grant amount.--In determining the
amount of a grant to be made under this subparagraph for a
project proposed by an applicant, the Secretary shall provide
the applicant with an amount sufficient to ensure that the
project has a reasonable opportunity to be successful, taking
into account the number of long-term recipients of assistance
under a State program funded under this part, the level of
unemployment, the job opportunities and job growth, the
poverty rate, and such other factors as the Secretary deems
appropriate, in the area to be served by the project.
``(iv) Targeting of funds to certain areas.--
``(I) Cities with greatest number of persons with income
less than the poverty line.--The Secretary shall use not less
than 65 percent of the funds available for grants under this
subparagraph for a fiscal year to award grants for
expenditures in cities that are among the 100 cities in the
United States with the highest number of residents with an
income that is less than the poverty line.
``(II) Rural areas.--
``(aa) In general.--The Secretary shall use not less than
25 percent of the funds available for grants under this
subparagraph for a fiscal year to award grants for
expenditures in rural areas.
``(bb) Rural area defined.--As used in item (aa), the term
`rural area' means a city, town, or unincorporated area that
has a population of 50,000 or fewer inhabitants and that is
not an urbanized area immediately adjacent to a city, town,
or unincorporated area that has a population of more than
50,000 inhabitants.
``(v) Funding.--For grants under this subparagraph for each
fiscal year specified in subparagraph (H), there shall be
available to the Secretary an amount equal to the sum of--
``(I) 50 percent of the sum of--
``(aa) the amount specified in subparagraph (H) for the
fiscal year, minus the total of the amounts reserved pursuant
to subparagraphs (F) and (G) for the fiscal year; and
``(bb) any amount reserved pursuant to subparagraph (F) for
the immediately preceding fiscal year that has not been
obligated; and
``(II) any amount available for grants under this
subparagraph for the immediately preceding fiscal year that
has not been obligated.
``(C) Limitations on use of funds.--
``(i) Allowable activities.--An entity to which funds are
provided under this paragraph may use the funds to move into
the work force recipients of assistance under the program
funded under this part of the State in which the entity is
located and the noncustodial parent of any minor who is such
a recipient, by means of any of the following:
``(I) Job creation through public or private sector
employment wage subsidies.
``(II) On-the-job training.
``(III) Contracts with public or private providers of
readiness, placement, and post-employment services.
``(IV) Job vouchers for placement, readiness, and
postemployment services.
``(V) Job support services (excluding child care services)
if such services are not otherwise available.
``(ii) Required beneficiaries.--An entity that operates a
project with funds provided under this paragraph shall expend
at least 90 percent of all funds provided to the project for
the benefit of recipients of assistance under the program
funded under this part of the State in which the entity is
located who meet the requirements of each of the following
subclauses:
``(I) At least 2 of the following apply to the recipient:
``(aa) The individual has not completed secondary school or
obtained a certificate of general equivalency, and has low
skills in reading and mathematics.
``(bb) The individual requires substance abuse treatment
for employment.
``(cc) The individual has a poor work history.
The Secretary shall prescribe such regulations as may be
necessary to interpret this subclause.
``(II) The individual--
``(aa) has received assistance under the State program
funded under this part (whether in effect before or after the
amendments made by section 103 of the Personal Responsibility
and Work Opportunity Reconciliation Act of 1996 first apply
to the State) for at least 30 months (whether or not
consecutive); or
``(bb) within 12 months, will become ineligible for
assistance under the State program funded under this part by
reason of a durational limit on such assistance, without
regard to any exemption provided pursuant to section
408(a)(7)(C) that may apply to the individual.
``(iii) Limitation on applicability of section 404.--The
rules of section 404, other than subsections (b), (f), and
(h) of section 404, shall not apply to a grant made under
this paragraph.
``(iv) Limitations relating to private industry councils.--
``(I) No direct provision of services.--A private industry
council may not directly provide services using funds
provided under this paragraph.
``(II) Cooperation with tanf agency.--On a determination by
the Secretary, in consultation with the Secretary of Health
and
[[Page H4492]]
Human Services and the Secretary of Housing and Urban
Development, that the private industry council for a service
delivery area in a State for which funds are provided under
this paragraph and the agency administering the State program
funded under this part are not adhering to the agreement
referred to in subparagraph (A)(vii)(II) to implement any
plan or project for which the funds are provided, the
recipient of the funds shall remit the funds to the
Secretary.
``(v) Prohibition against use of grant funds for any other
fund matching requirement.--An entity to which funds are
provided under this paragraph shall not use any part of the
funds to fulfill any obligation of any State, political
subdivision, or private industry council to contribute funds
under other Federal law.
``(vi) Deadline for expenditure.--An entity to which funds
are provided under this paragraph shall remit to the
Secretary any part of the funds that are not expended within
3 years after the date the funds are so provided.
``(D) Individuals with income less than the poverty line.--
For purposes of this paragraph, the number of individuals
with an income that is less than the poverty line shall be
determined based on the methodology used by the Bureau of the
Census to produce and publish intercensal poverty data for
1993 for States and counties.
``(E) Definitions.--As used in this paragraph:
``(i) Private industry council.--The term `private industry
council' means, with respect to a service delivery area, the
private industry council (or successor entity) established
for the service delivery area pursuant to the Job Training
Partnership Act.
``(ii) Secretary.--The term `Secretary' means the Secretary
of Labor, except as otherwise expressly provided.
``(iii) Service delivery area.--The term `service delivery
area' shall have the meaning given such term for purposes of
the Job Training Partnership Act.
``(F) Set-aside for indian tribes.--1 percent of the amount
specified in subparagraph (H) for each fiscal year shall be
reserved for grants to Indian tribes under section 412(a)(3).
``(G) Set-aside for evaluations.--0.5 percent of the amount
specified in subparagraph (H) for each fiscal year shall be
reserved for use by the Secretary of Health and Human
Services to carry out section 413(j).
``(H) Funding.--The amount specified in this subparagraph
is $1,500,000,000 for each of fiscal years 1998 and 1999.
``(I) Budget scoring.--Notwithstanding section 457(b)(2) of
the Balanced Budget and Emergency Deficit Control Act of
1985, the baseline shall assume that no grant shall be
awarded under this paragraph or under section 412(a)(3) after
fiscal year 2000.
(2) Conforming amendment.--Section 409(a)(7)(B)(iv) of such
Act (42 U.S.C. 609(a)(7)(B)(iv)) is amended to read as
follows:
``(iv) Expenditures by the state.--The term `expenditures
by the State' does not include--
``(I) any expenditure from amounts made available by the
Federal Government;
``(II) any State funds expended for the medicaid program
under title XIX;
``(III) any State funds which are used to match Federal
funds provided under section 403(a)(5); or
``(IV) any State funds which are expended as a condition of
recieving Federal funds other than under this part.
Notwithstanding subclause (IV) of the preceding sentence,
such term includes expenditures by a State for child care in
a fiscal year to the extent that the total amount of the
expenditures does not exceed the amount of State expenditures
in fiscal year 1994 or 1995 (whichever is the greater) that
equal the non-Federal share for the programs described in
section 418(a)(1)(A).''.
(b) Grants to Outlying Areas.--Section 1108(a) of such Act
(42 U.S.C. 1308(a)) is amended by inserting ``(except section
403(a)(5))'' after ``title IV''.
(c) Grants to Indian Tribes.--Section 412(a) of such Act
(42 U.S.C. 612(a)) is amended by adding at the end the
following:
``(3) Welfare-to-work grants.--
``(A) In general.--The Secretary shall award a grant in
accordance with this paragraph to an Indian tribe for each
fiscal year specified in section 403(a)(5)(H) for which the
Indian tribe is a welfare-to-work tribe, in such amount as
the Secretary deems appropriate, subject to subparagraph (B)
of this paragraph.
``(B) Welfare-to-work tribe.--An Indian tribe shall be
considered a welfare-to-work tribe for a fiscal year for
purposes of this paragraph if the Indian tribe meets the
following requirements:
``(i) The Indian tribe has submitted to the Secretary (in
the form of an addendum to the tribal family assistance plan,
if any, of the Indian tribe) a plan which describes how,
consistent with section 403(a)(5), the Indian tribe will use
any funds provided under this paragraph during the fiscal
year.
``(ii) The Indian tribe has provided the Secretary with an
estimate of the amount that the Indian tribe intends to
expend during the fiscal year (excluding tribal expenditures
described in section 409(a)(7)(B)(iv)) for activities
described in section 403(a)(5)(C)(i).
``(iii) The Indian tribe has agreed to negotiate in good
faith with the Secretary of Health and Human Services with
respect to the substance of any evaluation under section
413(j), and to cooperate with the conduct of any such
evaluation.
``(C) Limitations on use of funds.--Section 403(a)(5)(C)
shall apply to funds provided to Indian tribes under this
paragraph in the same manner in which such section applies to
funds provided under section 403(a)(5).''.
(d) Funds Received From Grants To Be Disregarded in
Applying Durational Limit on Assistance.--Section 408(a)(7)
of such Act (42 U.S.C. 608(a)(7)) is amended by adding at the
end the following:
``(G) Inapplicability to welfare-to-work grants and
assistance.--For purposes of subparagraph (A) of this
paragraph, a grant made under section 403(a)(5) shall not be
considered a grant made under section 403, and assistance
from funds provided under section 403(a)(5) shall not be
considered assistance.''.
(e) Evaluations.--Section 413 of such Act (42 U.S.C. 613)
is amended by adding at the end the following:
``(j) Evaluation of Welfare-To-Work Programs.--
``(1) Evaluation.--The Secretary--
``(A) shall, in consultation with the Secretary of Labor,
develop a plan to evaluate how grants made under sections
403(a)(5) and 412(a)(3) have been used;
``(B) may evaluate the use of such grants by such grantees
as the Secretary deems appropriate, in accordance with an
agreement entered into with the grantees after good-faith
negotiations; and
``(C) is urged to include the following outcome measures in
the plan developed under subparagraph (A):
``(i) Placements in the labor force and placements in the
labor force that last for at least 6 months.
``(ii) Placements in the private and public sectors.
``(iii) Earnings of individuals who obtain employment.
``(iv) Average expenditures per placement.
``(2) Reports to the congress.--
``(A) In general.--Subject to subparagraphs (B) and (C),
the Secretary, in consultation with the Secretary of Labor
and the Secretary of Housing and Urban Development, shall
submit to the Congress reports on the projects funded under
section 403(a)(5) and 412(a)(3) and on the evaluations of the
projects.
``(B) Interim report.--Not later than January 1, 1999, the
Secretary shall submit an interim report on the matter
described in subparagraph (A).
``(C) Final report.--Not later than January 1, 2001, (or at
a later date, if the Secretary informs the Committees of the
Congress with jurisdiction over the subject matter of the
report) the Secretary shall submit a final report on the
matter described in subparagraph (A).''.
SEC. 9002. LIMITATION ON AMOUNT OF FEDERAL FUNDS TRANSFERABLE
TO TITLE XX PROGRAMS.
(a) In General.--Section 404(d) of the Social Security Act
(42 U.S.C. 604(d)) is amended--
(1) in paragraph (1), by striking ``A State may'' and
inserting ``Subject to paragraph (2), a State may''; and
(2) by amending paragraph (2) to read as follows:
``(2) Limitation on amount transferable to title xx
programs.--A State may use not more than 10 percent of the
amount of any grant made to the State under section 403(a)
for a fiscal year to carry out State programs pursuant to
title XX.''.
(b) Retroactivity.--The amendments made by subsection (a)
of this section shall take effect as if included in the
enactment of section 103(a) of the Personal Responsibility
and Work Opportunity Reconciliation Act of 1996.
SEC. 9003. CLARIFICATION OF LIMITATION ON NUMBER OF PERSONS
WHO MAY BE TREATED AS ENGAGED IN WORK BY REASON
OF PARTICIPATION IN VOCATIONAL EDUCATIONAL
TRAINING.
(a) In General.--Section 407(c)(2)(D) of the Social
Security Act (42 U.S.C. 607(c)(2)(D)) is amended to read as
follows:
``(D) Limitation on number of persons who may be treated as
engaged in work by reason of participation in vocational
educational training.--For purposes of determining monthly
participation rates under paragraphs (1)(B)(i) and (2)(B) of
subsection (b), not more than 30 percent of the number of
individuals in all families and in 2-parent families,
respectively, in a State who are treated as engaged in work
for a month may consist of individuals who are determined to
be engaged in work for the month by reason of participation
in vocational educational training.''.
(b) Retroactivity.--The amendment made by subsection (a) of
this section shall take effect as if included in the
enactment of section 103(a) of the Personal Responsibility
and Work Opportunity Reconciliation Act of 1996.
SEC. 9004. RULES GOVERNING EXPENDITURE OF FUNDS FOR WORK
EXPERIENCE AND COMMUNITY SERVICE PROGRAMS.
(a) In General.--Section 407 of the Social Security Act (42
U.S.C. 607) is amended by adding at the end the following:
``(j) Rules Governing Expenditure of Funds for Work
Experience and Community Service Programs.--
``(1) In general.--To the extent that a State to which a
grant is made under section 403(a)(5) or any other provision
of section 403 uses the grant to establish or operate a work
experience or community service program, the State may
establish and operate the program in accordance with this
subsection.
[[Page H4493]]
``(2) Purpose.--The purpose of a work experience or
community experience program is to provide experience or
training for individuals not able to obtain employment in
order to assist them to move to regular employment. Such a
program shall be designed to improve the employability of
participants through actual work experience to enable
individuals participating in the program to move promptly
into regular public or private employment. Such a program
shall not place individuals in private, for-profit entities.
``(3) Limitation on projects that may be undertaken.--A
work experience or community service program shall be limited
to projects which serve a useful public purpose in fields
such as health, social service, environmental protection,
education, urban and rural development and redevelopment,
welfare, recreation, public facilities, public safety, and
day care, and other purposes identified by the State.
``(4) Maximum hours of participation per month.--A State
that elects to establish a work experience or community
service program shall operate the program so that each
participant participates in the program with the maximum
number of hours that any such individual may be required to
participate in any month being a number equal to--
``(A)(i) the amount of assistance provided during the month
to the family of which the individual is a member under the
State program funded under this part; plus
``(ii) the dollar value equivalent of any benefits provided
during the month to the household of which the individual is
a member under the food stamp program under the Food Stamp
Act of 1977; minus
``(iii) any amount collected by the State as child support
with respect to the family that is retained by the State;
divided by
``(B) the greater of the Federal minimum wage or the
applicable State minimum wage.
``(5) Maximum hours of participation per week.--A State
that elects to establish a work experience or community
service program may not require any participant in any such
program to participate in any such program for a combined
total of more than 40 hours per week.
``(6) Rule of interpretation.--This subsection shall not be
construed as authorizing the provision of assistance under a
State program funded under this part as compensation for work
performed, nor shall a participant be entitled to a salary or
to any other work or training expense provided under any
other provision of law by reason of participation in a work
experience or community service program described in this
subsection.''.
(b) Retroactivity.--The amendment made by subsection (a) of
this section shall take effect as if included in the
enactment of section 103(a) of the Personal Responsibility
and Work Opportunity Reconciliation Act of 1996.
SEC. 9005. STATE OPTION TO TAKE ACCOUNT OF CERTAIN WORK
ACTIVITIES OF RECIPIENTS WITH SUFFICIENT
PARTICIPATION IN WORK EXPERIENCE OR COMMUNITY
SERVICE PROGRAMS.
(a) In General.--Section 407(c) of the Social Security Act
(42 U.S.C. 607(c)) is amended by adding at the end the
following:
``(3) State option to take account of certain work
activities of recipients with sufficient participation in
work experience or community service programs.--
Notwithstanding paragraphs (1) and (2) of this subsection and
subsection (d)(8), for purposes of determining monthly
participation rates under paragraphs (1)(B)(i) and (2)(B) of
subsection (b), an individual who, during a month, has
participated in a work experience or community service
program operated in accordance with subsection (j), for the
maximum number of hours that the individual may be required
to participate in such a program during the month shall be
treated as engaged in work for the month if, during the
month, the individual has participated in any other work
activity for a number of hours that is not less than the
number of hours required by subsection (c)(1) for the month
minus such maximum number of hours.''.
(b) Retroactivity.--The amendment made by subsection (a) of
this section shall take effect as if included in the
enactment of section 103(a) of the Personal Responsibility
and Work Opportunity Reconciliation Act of 1996.
SEC. 9006. WORKER PROTECTIONS.
Section 407(f) of the Social Security Act (42 U.S.C.
607(f)) is amended to read as follows:
``(f) Worker Protections.--
``(1) Nondisplacement in work activities.--
``(A) General prohibition.--Subject to this paragraph, an
adult in a family receiving assistance under a State program
funded under this part attributable to funds provided by the
Federal Government may fill a vacant employment position in
order to engage in a work activity.
``(B) Prohibition against violation of contracts.--A work
activity shall not violate an existing contract for services
or collective bargaining agreement.
``(C) Other prohibitions.--An adult participant in a work
activity shall not be employed or assigned--
``(i) when any other individual is on layoff from the same
or any substantially equivalent job; or
``(ii) if the employer has terminated the employment of any
regular employee or otherwise caused an involuntary reduction
if its workforce with the intention of filling the vacancy so
created with the participant.
``(2) Health and safety.--Health and safety standards
established under Federal and State law otherwise applicable
to working conditions of employees shall be equally
applicable to working conditions of participants engaged in a
work activity.
``(3) Nondiscrimination.--In addition to the protections
provided under the provisions of law specified in section
408(c), an individual may not be discriminated against with
respect to participation in work activities by reason of
gender.
``(4) Grievance procedure.--
``(A) In general.--Each State to which a grant is made
under section 403 shall establish and maintain a procedure
for grievances or complaints from employees alleging
violations of paragraph (1) and participants in work
activities alleging violations of paragraph (1), (2), or (3).
``(B) Hearing.--The procedure shall include an opportunity
for a hearing.
``(C) Remedies.--The procedure shall include remedies for
violation of paragraph (1), (2), or (3), which may include--
``(i) prohibition against placement of a participant with
an employer that has violated paragraph (1), (2), or (3);
``(ii) where applicable, reinstatement of an employee,
payment of lost wages and benefits, and reestablishment of
other relevant terms, conditions and privileges of
employment; and
``(iii) where appropriate, other equitable relief.
``(5) Nonpreemption of state nondisplacement laws.--The
provisions of this subsection relating to nondisplacement of
employees shall not be construed to preempt any provision of
State law relating to nondisplacement of employees that
affords greater protections to employees than is afforded by
such provisions of this subsection.''.
SEC. 9007. PENALTY FOR FAILURE OF STATE TO REDUCE ASSISTANCE
FOR RECIPIENTS REFUSING WITHOUT GOOD CAUSE TO
WORK.
(a) In General.--Section 409(a) of the Social Security Act
(42 U.S.C. 609(a)) is amended by adding at the end the
following:
``(13) Penalty for failure to reduce assistance for
recipients refusing without good cause to work.--
``(A) In general.--If the Secretary determines that a State
to which a grant is made under section 403 in a fiscal year
has violated section 407(e) during the fiscal year, the
Secretary shall reduce the grant payable to the State under
section 403(a)(1) for the immediately succeeding fiscal year
by an amount equal to not less than 1 percent and not more
than 5 percent of the State family assistance grant.
``(B) Penalty based on severity of failure.--The Secretary
shall impose reductions under subparagraph (A) with respect
to a fiscal year based on the degree of noncompliance.''.
(b) Retroactivity.--The amendment made by subsection (a) of
this section shall take effect as if included in the
enactment of section 103(a) of the Personal Responsibility
and Work Opportunity Reconciliation Act of 1996.
Subtitle B--Supplemental Security Income
SEC. 9101. REQUIREMENT TO PERFORM CHILDHOOD DISABILITY
REDETERMINATIONS IN MISSED CASES.
Section 211(d)(2) of the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996 (110 Stat. 2190) is
amended--
(1) in subparagraph (A)--
(A) in the 1st sentence, by striking ``1 year'' and
inserting ``18 months''; and
(B) by inserting after the 1st sentence the following:
``Any redetermination required by the preceding sentence that
is not performed before the end of the period described in
the preceding sentence shall be performed as soon as is
practicable thereafter.''; and
(2) in subparagraph (C), by adding at the end the
following: ``Before commencing a redetermination under the
2nd sentence of subparagraph (A), in any case in which the
individual involved has not already been notified of the
provisions of this paragraph, the Commissioner of Social
Security shall notify the individual involved of the
provisions of this paragraph.''.
SEC. 9102. REPEAL OF MAINTENANCE OF EFFORT REQUIREMENTS
APPLICABLE TO OPTIONAL STATE PROGRAMS FOR
SUPPLEMENTATION OF SSI BENEFITS.
Section 1618 of the Social Security Act (42 U.S.C. 1382g)
is repealed.
SEC. 9103. FEES FOR FEDERAL ADMINISTRATION OF STATE
SUPPLEMENTARY PAYMENTS.
(a) Fee Schedule.--
(1) Optional state supplementary payments.--
(A) In general.--Section 1616(d)(2)(B) of the Social
Security Act (42 U.S.C. 1382e(d)(2)(B)) is amended--
(i) by striking ``and'' at the end of clause (iii); and
(ii) by striking clause (iv) and inserting the following:
``(iv) for fiscal year 1997, $5.00;
``(v) for fiscal year 1998, $6.20;
``(vi) for fiscal year 1999, $7.60;
``(vii) for fiscal year 2000, $7.80;
``(viii) for fiscal year 2001, $8.10;
``(ix) for fiscal year 2002, $8.50; and
``(x) for fiscal year 2003 and each succeeding fiscal
year--
``(I) the applicable rate in the preceding fiscal year,
increased by the percentage, if
[[Page H4494]]
any, by which the Consumer Price Index for the month of June
of the calendar year of the increase exceeds the Consumer
Price Index for the month of June of the calendar year
preceding the calendar year of the increase, and rounded to
the nearest whole cent; or
``(II) such different rate as the Commissioner determines
is appropriate for the State.''.
(B) Conforming amendment.--Section 1616(d)(2)(C) of such
Act (42 U.S.C. 1382e(d)(2)(C)) is amended by striking
``(B)(iv)'' and inserting ``(B)(x)(II)''.
(2) Mandatory state supplementary payments.--
(A) In general.--Section 212(b)(3)(B)(ii) of Public Law 93-
66 (42 U.S.C. 1382 note) is amended--
(i) by striking ``and'' at the end of subclause (III); and
(ii) by striking subclause (IV) and inserting the
following:
``(IV) for fiscal year 1997, $5.00;
``(V) for fiscal year 1998, $6.20;
``(VI) for fiscal year 1999, $7.60;
``(VII) for fiscal year 2000, $7.80;
``(VIII) for fiscal year 2001, $8.10;
``(IX) for fiscal year 2002, $8.50; and
``(X) for fiscal year 2003 and each succeeding fiscal
year--
``(aa) the applicable rate in the preceding fiscal year,
increased by the percentage, if any, by which the Consumer
Price Index for the month of June of the calendar year of the
increase exceeds the Consumer Price Index for the month of
June of the calendar year preceding the calendar year of the
increase, and rounded to the nearest whole cent; or
``(bb) such different rate as the Commissioner determines
is appropriate for the State.''.
(B) Conforming amendment.--Section 212(b)(3)(B)(iii) of
such Act (42 U.S.C. 1382 note) is amended by striking
``(ii)(IV)'' and inserting ``(ii)(X)(bb)''.
(b) Use of New Fees To Defray the Social Security
Administration's Administrative Expenses.--
(1) Credit to special fund for fiscal year 1998 and
subsequent years.--
(A) Optional state supplementary payment fees.--Section
1616(d)(4) of the Social Security Act (42 U.S.C. 1382e(d)(4))
is amended to read as follows:
``(4)(A) The first $5 of each administration fee assessed
pursuant to paragraph (2), upon collection, shall be
deposited in the general fund of the Treasury of the United
States as miscellaneous receipts.
``(B) That portion of each administration fee in excess of
$5, and 100 percent of each additional services fee charged
pursuant to paragraph (3), upon collection for fiscal year
1998 and each subsequent fiscal year, shall be credited to a
special fund established in the Treasury of the United States
for State supplementary payment fees. The amounts so
credited, to the extent and in the amounts provided in
advance in appropriations Acts, shall be available to defray
expenses incurred in carrying out this title and related
laws.''.
(B) Mandatory state supplementary payment fees.--Section
212(b)(3)(D) of Public Law 93-66 (42 U.S.C. 1382 note) is
amended to read as follows:
``(D)(i) The first $5 of each administration fee assessed
pursuant to subparagraph (B), upon collection, shall be
deposited in the general fund of the Treasury of the United
States as miscellaneous receipts.
``(ii) The portion of each administration fee in excess of
$5, and 100 percent of each additional services fee charged
pursuant to subparagraph (C), upon collection for fiscal year
1998 and each subsequent fiscal year, shall be credited to a
special fund established in the Treasury of the United States
for State supplementary payment fees. The amounts so
credited, to the extent and in the amounts provided in
advance in appropriations Acts, shall be available to defray
expenses incurred in carrying out this section and title XVI
of the Social Security Act and related laws.''.
(2) Limitations on authorization of appropriations.--From
amounts credited pursuant to section 1616(d)(4)(B) of the
Social Security Act and section 212(b)(3)(D)(ii) of Public
Law 93-66 to the special fund established in the Treasury of
the United States for State supplementary payment fees, there
is authorized to be appropriated an amount not to exceed
$35,000,000 for fiscal year 1998, and such sums as may be
necessary for each fiscal year thereafter.
Subtitle C--Child Support Enforcement
SEC. 9201. CLARIFICATION OF AUTHORITY TO PERMIT CERTAIN
REDISCLOSURES OF WAGE AND CLAIM INFORMATION.
Section 303(h)(1)(C) of the Social Security Act (42 U.S.C.
503(h)(1)(C)) is amended by striking ``section 453(i)(1) in
carrying out the child support enforcement program under
title IV'' and inserting ``subsections (i)(1), (i)(3), and
(j) of section 453''.
Subtitle D--Restricting Welfare and Public Benefits for Aliens
SEC. 9301. EXTENSION OF ELIGIBILITY PERIOD FOR REFUGEES AND
CERTAIN OTHER QUALIFIED ALIENS FROM 5 TO 7
YEARS FOR SSI AND MEDICAID.
(a) SSI.--Section 402(a)(2)(A) of the Personal
Responsibility and Work Opportunity Reconciliation Act of
1996 (8 U.S.C. 1612(a)(2)(A)) is amended to read as follows:
``(A) Time-limited exception for refugees and asylees.--
``(i) SSI.--With respect to the specified Federal program
described in paragraph (3)(A) paragraph 1 shall not apply to
an alien until 7 years after the date--
``(I) an alien is admitted to the United States as a
refugee under section 207 of the Immigration and Nationality
Act;
``(II) an alien is granted asylum under section 208 of such
Act; or
``(III) an alien's deportation is withheld under section
243(h) of such Act.
``(ii) Food stamps.--With respect to the specified Federal
program described in paragraph (3)(B), paragraph 1 shall not
apply to an alien until 5 years after the date--
``(I) an alien is admitted to the United States as a
refugee under section 207 of the Immigration and Nationality
Act;
``(II) an alien is granted asylum under section 208 of such
Act; or
``(III) an alien's deportation is withheld under section
243(h) of such Act.''.
(b) Medicaid.--Section 402(b)(2)(A) of the Personal
Responsibility and Work Opportunity Reconciliation Act of
1996 (8 U.S.C. 1612(b)(2)(A)) is amended to read as follows:
``(A) Time-limited exception for refugees and asylees.--
``(i) Medicaid.--With respect to the designated Federal
program described in paragraph (3)(C), paragraph 1 shall not
apply to an alien until 7 years after the date--
``(I) an alien is admitted to the United States as a
refugee under section 207 of the Immigration and Nationality
Act;
``(II) an alien is granted asylum under section 208 of such
Act; or
``(III) an alien's deportation is withheld under section
243(h) of such Act.
``(ii) Other designated federal programs.--With respect to
the designated Federal programs under paragraph (3) (other
than subparagraph (C)), paragraph 1 shall not apply to an
alien until 5 years after the date--
``(I) an alien is admitted to the United States as a
refugee under section 207 of the Immigration and Nationality
Act;
``(II) an alien is granted asylum under section 208 of such
Act; or
``(III) an alien's deportation is withheld under section
243(h) of such Act.''.
SEC. 9302. SSI ELIGIBILITY FOR ALIENS RECEIVING SSI ON AUGUST
22, 1996.
(a) In General.--Section 402(a)(2) of the Personal
Responsibility and Work Opportunity Reconciliation Act of
1996 (8 U.S.C. 1612(a)(2)) is amended by adding after
subparagraph (D) the following new subparagraph:
``(E) Aliens receiving ssi on august 22, 1996.--With
respect to eligibility for benefits for the program defined
in paragraph (3)(A) (relating to the supplemental security
income program), paragraph (1) shall not apply to an alien
who was receiving such benefits on August 22, 1996.''.
(b) Status of Cuban and Haitian Entrants and Amerasian
Permanent Resident Aliens.--For purposes of section
402(a)(2)(E) of the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996, the following aliens
shall be considered qualified aliens:
(1) An alien who is a Cuban and Haitian entrant as defined
in section 501(e) of the Refugee Education Assistance Act of
1980.
(2) An alien admitted to the United States as an Amerasian
immigrant pursuant to section 584 of the Foreign Operations,
Export Financing, and Related Programs Appropriations Act,
1988, as contained in section 101(e) of Public Law 100-202,
(other than an alien admitted pursuant to section
584(b)(1)(C)).
(c) Conforming Amendments.--Section 402(a)(2)(D) of the
Personal Responsibility and Work Opportunity Reconciliation
Act of 1996 (8 U.S.C. 1612(a)(D)) is amended--
(1) by striking clause (i);
(2) in the subparagraph heading by striking ``benefits''
and inserting ``food stamps'';
(3) by striking ``(ii) Food stamps'.--';
(3) by redesignating subclauses (I), (II), and (III) as
clauses (i), (ii), and (iii).
SEC. 9303. SSI ELIGIBILITY FOR PERMANENT RESIDENT ALIENS WHO
ARE MEMBERS OF AN INDIAN TRIBE.
Section 402(a)(2) of the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996 (8 U.S.C. 1612(a)(2))
(as amended by section 9302) is amended by adding after
subparagraph (E) the following new subparagraph:
``(F) Permanent resident aliens who are members of an
indian tribe.--With respect to eligibility for benefits for
the program defined in paragraph (3)(A) (relating to the
supplemental security income program), paragraph (1) shall
not apply to an alien who--
``(i) is lawfully admitted for permanent residence under
the Immigration and Nationality Act; and
``(ii) is a member of an Indian tribe (as defined in
section 4(e) of the Indian Self-Determination and Education
Assistance Act).''.
SEC. 9304. VERIFICATION OF ELIGIBILITY FOR STATE AND LOCAL
PUBLIC BENEFITS.
(a) In General.--The Personal Responsibility and Work
Opportunity Reconciliation Act of 1996 is amended by adding
after section 412 the following new section:
``SEC. 413. AUTHORIZATION FOR VERIFICATION OF ELIGIBILITY FOR
STATE AND LOCAL PUBLIC BENEFITS.
``A State or political subdivision of a State is authorized
to require an applicant for State and local public benefits
(as defined in section 411(c)) to provide proof of
eligibility.''.
(b) Clerical Amendment.--Section 2 of the Personal
Responsibility and Work Opportunity Reconciliation Act of
1996 is amended
[[Page H4495]]
by adding after the item related to section 412 the
following:
``Sec. 413. Authorization for verification of eligibility for state and
local public benefits.''.
SEC. 9305. DERIVATIVE ELIGIBILITY FOR BENEFITS.
(a) In General.--The Personal Responsibility and Work
Opportunity Reconciliation Act of 1996 is amended by adding
after section 435 the following new section:
``SEC. 436. DERIVATIVE ELIGIBILITY FOR BENEFITS.
``(a) Food Stamps.--Notwithstanding any other provision of
law, an alien who under the provisions of this title is
ineligible for benefits under the food stamp program (as
defined in section 402(a)(3)(A)) shall not be eligible for
such benefits because the alien receives benefits under the
supplemental security income program (as defined in section
402(a)(3)(B)).
``(b) Medicaid.--Notwithstanding any other provision of
this title, an alien who under the provisions of this title
is ineligible for benefits under the medicaid program (as
defined in section 402(b)(3)(C)) shall be eligible for such
benefits if the alien is receiving benefits under the
supplemental security income program and title XIX of the
Social Security Act provides for such derivative
eligibility.''.
(b) Clerical Amendment.--Section 2 of the Personal
Responsibility and Work Opportunity Reconciliation Act of
1996 is amended by adding after the item related to section
435 the following:
``Sec. 436. Derivative eligibility for benefits.''.
SEC. 9306. EFFECTIVE DATE.
Except as otherwise provided, the amendments made by this
subtitle shall be effective as if included in the enactment
of title IV of the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996.
Subtitle E--Unemployment Compensation
SEC. 9401. CLARIFYING PROVISION RELATING TO BASE PERIODS.
(a) In General.--No provision of a State law under which
the base period for such State is defined or otherwise
determined shall, for purposes of section 303(a)(1) of the
Social Security Act (42 U.S.C. 503(a)(1)), be considered a
provision for a method of administration.
(b) Definitions.--For purposes of this section, the terms
``State law'', ``base period'', and ``State'' shall have the
meanings given them under section 205 of the Federal-State
Extended Unemployment Compensation Act of 1970 (26 U.S.C.
3304 note).
(c) Effective Date.--This section shall apply for purposes
of any period beginning before, on, or after the date of the
enactment of this Act.
SEC. 9402. INCREASE IN FEDERAL UNEMPLOYMENT ACCOUNT CEILING.
(a) In General.--Section 902(a)(2) of the Social Security
Act (42 U.S.C. 1102(a)(2)) is amended by striking ``0.25
percent'' and inserting ``0.5 percent''.
(b) Effective Date.--This section and the amendment made by
this section--
(1) shall take effect on October 1, 2001, and
(2) shall apply to fiscal years beginning on or after that
date.
SEC. 9403. SPECIAL DISTRIBUTION TO STATES FROM UNEMPLOYMENT
TRUST FUND.
(a) In General.--Subsection (a) of section 903 of the
Social Security Act (42 U.S.C. 1103(a)) is amended by adding
at the end the following new paragraph:
``(3)(A) Notwithstanding any other provision of this
section, for purposes of carrying out this subsection with
respect to any excess amount (referred to in paragraph (1))
remaining in the employment security administration account
as of the close of fiscal year 1999, 2000, or 2001, such
amount shall--
``(i) to the extent of any amounts not in excess of
$100,000,000, be subject to subparagraph (B), and
``(ii) to the extent of any amounts in excess of
$100,000,000, be subject to subparagraph (C).
``(B) Paragraphs (1) and (2) shall apply with respect to
any amounts described in subparagraph (A)(i), except that--
``(i) in carrying out the provisions of paragraph (2)(B)
with respect to such amounts (to determine the portion of
such amounts which is to be allocated to a State for a
succeeding fiscal year), the ratio to be applied under such
provisions shall be the same as the ratio that--
``(I) the amount of funds to be allocated to such State for
such fiscal year pursuant to title III, bears to
``(II) the total amount of funds to be allocated to all
States for such fiscal year pursuant to title III,
as determined by the Secretary of Labor, and
``(ii) the amounts allocated to a State pursuant to this
subparagraph shall be available to such State, subject to the
last sentence of subsection (c)(2).
Nothing in this paragraph shall preclude the application of
subsection (b) with respect to any allocation determined
under this subparagraph.
``(C) Any amounts described in clause (ii) of subparagraph
(A) (remaining in the employment security administration
account as of the close of any fiscal year specified in such
subparagraph) shall, as of the beginning of the succeeding
fiscal year, accrue to the Federal unemployment account,
without regard to the limit provided in section 902(a).''
(b) Conforming Amendment.--Paragraph (2) of section 903(c)
of the Social Security Act is amended by adding at the end,
as a flush left sentence, the following:
``Any amount allocated to a State under this section for
fiscal year 2000, 2001, or 2002 may be used by such State
only to pay expenses incurred by it for the administration of
its unemployment compensation law, and may be so used by it
without regard to any of the conditions prescribed in any of
the preceding provisions of this paragraph.''
SEC. 9404. INTEREST-FREE ADVANCES TO STATE ACCOUNTS IN
UNEMPLOYMENT TRUST FUND RESTRICTED TO STATES
WHICH MEET FUNDING GOALS.
(a) In General.--Paragraph (2) of section 1202(b) of the
Social Security Act (42 U.S.C. 1322(b)) is amended--
(1) by striking ``and'' at the end of subparagraph (A),
(2) by striking the period at the end of subparagraph (B)
and inserting ``, and'', and
(3) by adding at the end the following new subparagraph:
``(C) the average daily balance in the account of such
State in the Unemployment Trust Fund for each of 4 of the 5
calendar quarters preceding the calendar quarter in which
such advances were made exceeds the funding goal of such
State (as defined in subsection (d)).''
(b) Funding Goal Defined.--Section 1202 of the Social
Security Act is amended by adding at the end the following
new subsection:
``(d) For purposes of subsection (b)(2)(C), the term
`funding goal' means, for any State for any calendar quarter,
the average of the unemployment insurance benefits paid by
such State during each of the 3 years, in the 20-year period
ending with the calendar year containing such calendar
quarter, during which the State paid the greatest amount of
unemployment benefits.''
(c) Effective Date.--The amendments made by this section
shall apply to calendar years beginning after the date of the
enactment of this Act.
SEC. 9405. EXEMPTION OF SERVICE PERFORMED BY ELECTION WORKERS
FROM THE FEDERAL UNEMPLOYMENT TAX.
(a) In General.--Paragraph (3) of section 3309(b) of the
Internal Revenue Code of 1986 (relating to exemption for
certain services) is amended--
(1) by striking ``or'' at the end of subparagraph (D),
(2) by adding ``or'' at the end of subparagraph (E), and
(3) by inserting after subparagraph (E) the following new
subparagraph:
``(F) as an election official or election worker if the
amount of remuneration received by the individual during the
calendar year for services as an election official or
election worker is less than $1,000;''.
(b) Effective Date.--The amendments made by this section
shall apply with respect to service performed after the date
of the enactment of this Act.
SEC. 9406. TREATMENT OF CERTAIN SERVICES PERFORMED BY
INMATES.
(a) In General.--Subsection (c) of section 3306 of the
Internal Revenue Code of 1986 (defining employment) is
amended--
(1) by striking ``or'' at the end of paragraph (19),
(2) by striking the period at the end of paragraph (20) and
inserting ``; or'', and
(3) by adding at the end the following new paragraph:
``(21) service performed by a person committed to a penal
institution.''
(b) Effective Date.--The amendments made by this section
shall apply with respect to service performed after March 26,
1996.
SEC. 9407. EXEMPTION OF SERVICE PERFORMED FOR AN ELEMENTARY
OR SECONDARY SCHOOL OPERATED PRIMARILY FOR
RELIGIOUS PURPOSES FROM THE FEDERAL
UNEMPLOYMENT TAX.
(a) In General.--Paragraph (1) of section 3309(b) of the
Internal Revenue Code of 1986 (relating to exemption for
certain services) is amended--
(1) by striking ``or'' at the end of subparagraph (A), and
(2) by inserting before the semicolon at the end the
following: ``, or (C) an elementary or secondary school which
is operated primarily for religious purposes, which is
described in section 501(c)(3), and which is exempt from tax
under section 501(a)''.
(b) Effective Date.--The amendments made by this section
shall apply with respect to service performed after the date
of the enactment of this Act.
SEC. 9408. STATE PROGRAM INTEGRITY ACTIVITIES FOR
UNEMPLOYMENT COMPENSATION.
Section 901(c) of the Social Security Act (42 U.S.C.
1101(c)) is amended by adding at the end the following new
paragraph:
``(5)(A) There are authorized to be appropriated out of the
employment security administration account to carry out
program integrity activities, in addition to any amounts
available under paragraph (1)(A)(i)--
``(i) $89,000,000 for fiscal year 1998;
``(ii) $91,000,000 for fiscal year 1999;
``(iii) $93,000,000 fiscal year 2000;
``(iv) $96,000,000 for fiscal year 2001; and
``(v) $98,000,000 for fiscal year 2002.
``(B) In any fiscal year in which a State receives funds
appropriated pursuant to this paragraph, the State shall
expend a proportion of the funds appropriated pursuant to
paragraph (1)(A)(i) to carry out program integrity activities
that is not less than the
[[Page H4496]]
proportion of the funds appropriated under such paragraph
that was expended by the State to carry out program integrity
activities in fiscal year 1997.
``(C) For purposes of this paragraph, the term `program
integrity activities' means initial claims review activities,
eligibility review activities, benefit payments control
activities, and employer liability auditing activities.''.
Subtitle F--Increase in Public Debt Limit
SEC. 9501. INCREASE IN PUBLIC DEBT LIMIT.
Subsection (b) of section 3101 of title 31, United States
Code, is amended by striking the dollar amount contained
therein and inserting ``$5,950,000,000,000''.
TITLE X--COMMITTEE ON WAYS AND MEANS--MEDICARE
SEC. 10000. AMENDMENTS TO SOCIAL SECURITY ACT AND REFERENCES
TO OBRA; TABLE OF CONTENTS OF TITLE.
(a) Amendments to Social Security Act.--Except as otherwise
specifically provided, whenever in this title an amendment is
expressed in terms of an amendment to or repeal of a section
or other provision, the reference shall be considered to be
made to that section or other provision of the Social
Security Act.
(b) References to OBRA.--In this title, the terms ``OBRA-
1986'', ``OBRA-1987'', ``OBRA-1989'', ``OBRA-1990'', and
``OBRA-1993'' refer to the Omnibus Budget Reconciliation Act
of 1986 (Public Law 99-509), the Omnibus Budget
Reconciliation Act of 1987 (Public Law 100-203), the Omnibus
Budget Reconciliation Act of 1989 (Public Law 101-239), the
Omnibus Budget Reconciliation Act of 1990 (Public Law 101-
508), and the Omnibus Budget Reconciliation Act of 1993
(Public Law 103-66), respectively.
(c) Table of Contents of Title.--The table of contents of
this title is as follows:
Sec. 10000. Amendments to Social Security Act and references to OBRA;
table of contents of title.
Subtitle A--MedicarePlus Program
Chapter 1--MedicarePlus Program
SUBCHAPTER A--MEDICAREPLUS PROGRAM
Sec. 10001. Establishment of MedicarePlus program.
``Part C--MedicarePlus Program
``Sec. 1851. Eligibility, election, and enrollment.
``Sec. 1852. Benefits and beneficiary protections.
``Sec. 1853. Payments to MedicarePlus organizations.
``Sec. 1854. Premiums.
``Sec. 1855. Organizational and financial requirements for MedicarePlus
organizations; provider-sponsored organizations.
``Sec. 1856. Establishment of standards.
``Sec. 1857. Contracts with MedicarePlus organizations.
``Sec. 1859. Definitions; miscellaneous provisions.
Sec. 10002. Transitional rules for current medicare HMO program.
Sec. 10003. Conforming changes in medigap program.
SUBCHAPTER B--SPECIAL RULES FOR MEDICAREPLUS MEDICAL SAVINGS ACCOUNTS
Sec. 10006. MedicarePlus MSA.
Chapter 2--Integrated Long-term Care Programs
SUBCHAPTER A--PROGRAMS OF ALL-INCLUSIVE CARE FOR THE ELDERLY (PACE)
Sec. 10011. Coverage of PACE under the medicare program.
Sec. 10012. Establishment of PACE program as medicaid State option.
Sec. 10013. Effective date; transition.
Sec. 10014. Study and reports.
SUBCHAPTER B--SOCIAL HEALTH MAINTENANCE ORGANIZATIONS
Sec. 10015. Social health maintenance organizations (SHMOs).
SUBCHAPTER C--OTHER PROGRAMS
Sec. 10018. Orderly transition of municipal health service
demonstration projects.
Sec. 10019. Extension of certain medicare community nursing
organization demonstration projects.
Chapter 3--Medicare Payment Advisory Commission
Sec. 10021. Medicare Payment Advisory Commission.
Chapter 4--Medigap Protections
Sec. 10031. Medigap protections.
Sec. 10032. Medicare prepaid competitive pricing demonstration project.
Chapter 5--Tax Treatment of Hospitals Participating in Provider-
sponsored Organizations
Sec. 10041. Tax treatment of hospitals which participate in provider-
sponsored organizations.
Subtitle B--Prevention Initiatives
Sec. 10101. Screening mammography.
Sec. 10102. Screening pap smear and pelvic exams.
Sec. 10103. Prostate cancer screening tests.
Sec. 10104. Coverage of colorectal screening.
Sec. 10105. Diabetes screening tests.
Sec. 10106. Standardization of medicare coverage of bone mass
measurements.
Sec. 10107. Vaccines outreach expansion.
Sec. 10108. Study on preventive benefits.
Subtitle C--Rural Initiatives
Sec. 10201. Rural primary care hospital program.
Sec. 10202. Prohibiting denial of request by rural referral centers for
reclassification on basis of comparability of wages.
Sec. 10203. Hospital geographic reclassification permitted for purposes
of disproportionate share payment adjustments.
Sec. 10204. Medicare-dependent, small rural hospital payment extension.
Sec. 10205. Geographic reclassification for certain disproportionately
large hospitals.
Sec. 10206. Floor on area wage index.
Sec. 10207. Informatics, telemedicine, and education demonstration
project.
Subtitle D--Anti-Fraud and Abuse Provisions
Sec. 10301. Permanent exclusion for those convicted of 3 health care
related crimes.
Sec. 10302. Authority to refuse to enter into medicare agreements with
individuals or entities convicted of felonies.
Sec. 10303. Inclusion of toll-free number to report medicare waste,
fraud, and abuse in explanation of benefits forms.
Sec. 10304. Liability of medicare carriers and fiscal intermediaries
for claims submitted by excluded providers.
Sec. 10305. Exclusion of entity controlled by family member of a
sanctioned individual.
Sec. 10306. Imposition of civil money penalties.
Sec. 10307. Disclosure of information and surety bonds.
Sec. 10308. Provision of certain identification numbers.
Sec. 10309. Advisory opinions regarding certain physician self-referral
provisions.
Sec. 10310. Other fraud and abuse related provisions.
Subtitle E--Prospective Payment Systems
Chapter 1--Payment Under Part A
Sec. 10401. Prospective payment for skilled nursing facility services.
Sec. 10402. Prospective payment for inpatient rehabilitation hospital
services.
Chapter 2--Payment Under Part B
SUBCHAPTER A--PAYMENT FOR HOSPITAL OUTPATIENT DEPARTMENT SERVICES
Sec. 10411. Elimination of formula-driven overpayments (FDO) for
certain outpatient hospital services.
Sec. 10412. Extension of reductions in payments for costs of hospital
outpatient services.
Sec. 10413. Prospective payment system for hospital outpatient
department services.
SUBCHAPTER B--REHABILITATION SERVICES
Sec. 10421. Rehabilitation agencies and services.
Sec. 10422. Comprehensive outpatient rehabilitation facilities (corf).
SUBCHAPTER C--AMBULANCE SERVICES
Sec. 10431. Payments for ambulance services.
Sec. 10432. Demonstration of coverage of ambulance services under
medicare through contracts with units of local
government.
Chapter 3--Payment Under Parts A and B
Sec. 10441. Prospective payment for home health services.
Subtitle F--Provisions Relating to Part A
Chapter 1--Payment Of PPS Hospitals
Sec. 10501. PPS hospital payment update.
Sec. 10502. Capital payments for PPS hospitals.
Sec. 10503. Freeze in disproportionate share.
Sec. 10504. Medicare capital asset sales price equal to book value.
Sec. 10505. Elimination of IME and DSH payments attributable to outlier
payments.
Sec. 10506. Reduction in adjustment for indirect medical education.
Sec. 10507. Treatment of transfer cases.
Sec. 10508. Increase base payment rate to Puerto Rico hospitals.
Chapter 2--Payment Of PPS Exempt Hospitals
Sec. 10511. Payment update.
Sec. 10512. Reductions to capital payments for certain PPS-exempt
hospitals and units.
Sec. 10513. Cap on TEFRA limits.
Sec. 10514. Change in bonus and relief payments.
Sec. 10515. Change in payment and target amount for new providers.
Sec. 10516. Rebasing.
Sec. 10517. Treatment of certain long-term care hospitals.
Sec. 10518. Elimination of exemptions; report on exceptions and
adjustments.
Chapter 3--Provisions Related to Hospice Services
Sec. 10521. Payments for hospice services.
Sec. 10522. Payment for home hospice care based on location where care
is furnished.
Sec. 10523. Hospice care benefits periods.
Sec. 10524. Other items and services included in hospice care.
Sec. 10525. Contracting with independent physicians or physician groups
for hospice care services permitted.
Sec. 10526. Waiver of certain staffing requirements for hospice care
programs in non-urbanized areas.
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Sec. 10527. Limitation on liability of beneficiaries for certain
hospice coverage denials.
Sec. 10528. Extending the period for physician certification of an
individual's terminal illness.
Sec. 10529. Effective date.
Chapter 4--Modification of Part A Home Health Benefit
Sec. 10531. Modification of part A home health benefit for individuals
enrolled under part B.
Chapter 5--Other Payment Provisions
Sec. 10541. Reductions in payments for enrollee bad debt.
Sec. 10542. Permanent extension of hemophilia pass-through.
Sec. 10543. Reduction in part A medicare premium for certain public
retirees.
Subtitle G--Provisions Relating to Part B Only
Chapter 1--Physicians' Services
Sec. 10601. Establishment of single conversion factor for 1998.
Sec. 10602. Establishing update to conversion factor to match spending
under sustainable growth rate.
Sec. 10603. Replacement of volume performance standard with sustainable
growth rate.
Sec. 10604. Payment rules for anesthesia services.
Sec. 10605. Implementation of resource-based physician practice
expense.
Sec. 10606. Dissemination of information on high per discharge relative
values for in-hospital physicians' services.
Sec. 10607. No X-ray required for chiropractic services.
Sec. 10608. Temporary coverage restoration for portable
electrocardiogram transportation.
Chapter 2--Other Payment Provisions
Sec. 10611. Payments for durable medical equipment.
Sec. 10612. Oxygen and oxygen equipment.
Sec. 10613. Reduction in updates to payment amounts for clinical
diagnostic laboratory tests.
Sec. 10614. Simplification in administration of laboratory tests.
Sec. 10615. Updates for ambulatory surgical services.
Sec. 10616. Reimbursement for drugs and biologicals.
Sec. 10617. Coverage of oral anti-nausea drugs under chemotherapeutic
regimen.
Sec. 10618. Rural health clinic services.
Sec. 10619. Increased medicare reimbursement for nurse practitioners
and clinical nurse specialists.
Sec. 10620. Increased medicare reimbursement for physician assistants.
Sec. 10621. Renal dialysis-related services.
Chapter 3--Part B Premium
Sec. 10631. Part B premium.
Subtitle H--Provisions Relating to Parts A and B
Chapter 1--Provisions Relating to Medicare Secondary Payer
Sec. 10701. Permanent extension and revision of certain secondary payer
provisions.
Sec. 10702. Clarification of time and filing limitations.
Sec. 10703. Permitting recovery against third party administrators.
Chapter 2--Home Health Services
Sec. 10711. Recapturing savings resulting from temporary freeze on
payment increases for home health services.
Sec. 10712. Interim payments for home health services.
Sec. 10713. Clarification of part-time or intermittent nursing care.
Sec. 10714. Study of definition of homebound.
Sec. 10715. Payment based on location where home health service is
furnished.
Sec. 10716. Normative standards for home health claims denials,
Sec. 10717. No home health benefits based solely on drawing blood.
Chapter 3--Baby Boom Generation Medicare Commission
Sec. 10721. Bipartisan Commission on the Effect of the Baby Boom
Generation on the Medicare Program.
Chapter 4--Provisions Relating to Direct Graduate Medical Education
Sec. 10731. Limitation on payment based on number of residents and
implementation of rolling average FTE count.
Sec. 10732. Phased-in limitation on hospital overhead and supervisory
physician component of direct medical education costs.
Sec. 10733. Permitting payment to non-hospital providers.
Sec. 10734. Incentive payments under plans for voluntary reduction in
number of residents.
Sec. 10735. Demonstration project on use of consortia.
Sec. 10736. Recommendations on long-term payment policies regarding
financing teaching hospitals and graduate medical
education.
Sec. 10737. Medicare special reimbursement rule for certain combined
residency programs.
Chapter 5--Other Provisions
Sec. 10741. Centers of excellence.
Sec. 10742. Medicare part B special enrollment period and waiver of
part B late enrollment penalty and medigap special open
enrollment period for certain military retirees and
dependents.
Sec. 10743. Protections under the medicare program for disabled workers
who lose benefits under a group health plan.
Sec. 10744. Placement of advance directive in medical record.
Subtitle I--Medical Liability Reform
Chapter 1--General Provisions
Sec. 10801. Federal reform of health care liability actions.
Sec. 10802. Definitions.
Sec. 10803. Effective date.
Chapter 2--Uniform Standards for Health Care Liability Actions
Sec. 10811. Statute of limitations.
Sec. 10812. Calculation and payment of damages.
Sec. 10813. Alternative dispute resolution.
Subtitle A--MedicarePlus Program
CHAPTER 1--MEDICAREPLUS PROGRAM
Subchapter A--MedicarePlus Program
SEC. 10001. ESTABLISHMENT OF MEDICAREPLUS PROGRAM.
(a) In General.--Title XVIII is amended by redesignating
part C as part D and by inserting after part B the following
new part:
``Part C--MedicarePlus Program
``eligibility, election, and enrollment
``Sec. 1851. (a) Choice of Medicare Benefits Through
MedicarePlus Plans.--
``(1) In general.--Subject to the provisions of this
section, each MedicarePlus eligible individual (as defined in
paragraph (3)) is entitled to elect to receive benefits under
this title--
``(A) through the medicare fee-for-service program under
parts A and B, or
``(B) through enrollment in a MedicarePlus plan under this
part.
``(2) Types of medicareplus plans that may be available.--A
MedicarePlus plan may be any of the following types of plans
of health insurance:
``(A) Coordinated care plans.--Coordinated care plans which
provide health care services, including health maintenance
organization plans and preferred provider organization plans.
``(B) Plans offered by provider-sponsored organization.--A
MedicarePlus plan offered by a provider-sponsored
organization, as defined in section 1855(e).
``(C) Combination of msa plan and contributions to
medicareplus msa.--An MSA plan, as defined in section
1859(b)(2), and a contribution into a MedicarePlus medical
savings account (MSA).
``(3) MedicarePlus eligible individual.--
``(A) In general.--In this title, subject to subparagraph
(B), the term `MedicarePlus eligible individual' means an
individual who is entitled to benefits under part A and
enrolled under part B.
``(B) Special rule for end-stage renal disease.--Such term
shall not include an individual medically determined to have
end-stage renal disease, except that an individual who
develops end-stage renal disease while enrolled in a
MedicarePlus plan may continue to be enrolled in that plan.
``(b) Special Rules.--
``(1) Residence requirement.--
``(A) In general.--Except as the Secretary may otherwise
provide, an individual is eligible to elect a MedicarePlus
plan offered by a MedicarePlus organization only if the
organization serves the geographic area in which the
individual resides.
``(B) Continuation of enrollment permitted.--Pursuant to
rules specified by the Secretary, the Secretary shall provide
that an individual may continue enrollment in a plan,
notwithstanding that the individual no longer resides in the
service area of the plan, so long as the plan provides
benefits for enrollees located in the area in which the
individual resides.
``(2) Special rule for certain individuals covered under
fehbp or eligible for veterans or military health benefits,
veterans .--
``(A) FEHBP.--An individual who is enrolled in a health
benefit plan under chapter 89 of title 5, United States Code,
is not eligible to enroll in an MSA plan until such time as
the Director of the Office of Management and Budget certifies
to the Secretary that the Office of Personnel Management has
adopted policies which will ensure that the enrollment of
such individuals in such plans will not result in increased
expenditures for the Federal Government for health benefit
plans under such chapter.
``(B) VA and dod.--The Secretary may apply rules similar to
the rules described in subparagraph (A) in the case of
individuals who are eligible for health care benefits under
chapter 55 of title 10, United States Code, or under chapter
17 of title 38 of such Code.
``(3) Limitation on eligibility of qualified medicare
beneficiaries and other medicaid beneficiaries to enroll in
an MSA plan.--An individual who is a qualified medicare
beneficiary (as defined in section 1905(p)(1)), a qualified
disabled and working individual (described in section
1905(s)), an individual described in section
1902(a)(10)(E)(iii), or otherwise entitled to medicare cost-
sharing under a State plan
[[Page H4498]]
under title XIX is not eligible to enroll in an MSA plan.
``(4) Coverage under msa plans on a demonstration basis.--
``(A) In general.--An individual is not eligible to enroll
in an MSA plan under this part--
``(i) on or after January 1, 2003, unless the enrollment is
the continuation of such an enrollment in effect as of such
date; or
``(ii) as of any date if the number of such individuals so
enrolled as of such date has reached 500,000.
Under rules established by the Secretary, an individual is
not eligible to enroll (or continue enrollment) in an MSA
plan for a year unless the individual provides assurances
satisfactory to the Secretary that the individual will reside
in the United States for at least 183 days during the year.
``(B) Evaluation.--The Secretary shall regularly evaluate
the impact of permitting enrollment in MSA plans under this
part on selection (including adverse selection), use of
preventive care, access to care, and the financial status of
the Trust Funds under this title.
``(C) Reports.--The Secretary shall submit to Congress
periodic reports on the numbers of individuals enrolled in
such plans and on the evaluation being conducted under
subparagraph (B). The Secretary shall submit such a report,
by not later than March 1, 2002, on whether the time
limitation under subparagraph (A)(i) should be extended or
removed and whether to change the numerical limitation under
subparagraph (A)(ii).
``(c) Process for Exercising Choice.--
``(1) In general.--The Secretary shall establish a process
through which elections described in subsection (a) are made
and changed, including the form and manner in which such
elections are made and changed. Such elections shall be made
or changed only during coverage election periods specified
under subsection (e) and shall become effective as provided
in subsection (f).
``(2) Coordination through medicareplus organizations.--
``(A) Enrollment.--Such process shall permit an individual
who wishes to elect a MedicarePlus plan offered by a
MedicarePlus organization to make such election through the
filing of an appropriate election form with the organization.
``(B) Disenrollment.--Such process shall permit an
individual, who has elected a MedicarePlus plan offered by a
MedicarePlus organization and who wishes to terminate such
election, to terminate such election through the filing of an
appropriate election form with the organization.
``(3) Default.--
``(A) Initial election.--
``(i) In general.--Subject to clause (ii), an individual
who fails to make an election during an initial election
period under subsection (e)(1) is deemed to have chosen the
medicare fee-for-service program option.
``(ii) Seamless continuation of coverage.--The Secretary
may establish procedures under which an individual who is
enrolled in a health plan (other than MedicarePlus plan)
offered by a MedicarePlus organization at the time of the
initial election period and who fails to elect to receive
coverage other than through the organization is deemed to
have elected the MedicarePlus plan offered by the
organization (or, if the organization offers more than one
such plan, such plan or plans as the Secretary identifies
under such procedures).
``(B) Continuing periods.--An individual who has made (or
is deemed to have made) an election under this section is
considered to have continued to make such election until such
time as--
``(i) the individual changes the election under this
section, or
``(ii) a MedicarePlus plan is discontinued, if the
individual had elected such plan at the time of the
discontinuation.
``(d) Providing Information To Promote Informed Choice.--
``(1) In general.--The Secretary shall provide for
activities under this subsection to broadly disseminate
information to medicare beneficiaries (and prospective
medicare beneficiaries) on the coverage options provided
under this section in order to promote an active, informed
selection among such options.
``(2) Provision of notice.--
``(A) Open season notification.--At least 30 days before
the beginning of each annual, coordinated election period (as
defined in subsection (e)(3)(B)), the Secretary shall mail to
each MedicarePlus eligible individual residing in an area the
following:
``(i) General information.--The general information
described in paragraph (3).
``(ii) List of plans and comparison of plan options.--A
list identifying the MedicarePlus plans that are (or will be)
available to residents of the area and information described
in paragraph (4) concerning such plans. Such information
shall be presented in a comparative form.
``(iii) MedicarePlus monthly capitation rate.--The amount
of the monthly MedicarePlus capitation rate for the area.
``(iv) Additional information.--Any other information that
the Secretary determines will assist the individual in making
the election under this section.
The mailing of such information shall be coordinated with the
mailing of any annual notice under section 1804.
``(B) Notification to newly medicareplus eligible
individuals.--To the extent practicable, the Secretary shall,
not later than 2 months before the beginning of the initial
MedicarePlus enrollment period for an individual described in
subsection (e)(1), mail to the individual the information
described in subparagraph (A).
``(C) Form.--The information disseminated under this
paragraph shall be written and formatted using language that
is easily understandable by medicare beneficiaries.
``(D) Periodic updating.--The information described in
subparagraph (A) shall be updated on at least an annual basis
to reflect changes in the availability of MedicarePlus plans
and the benefits and monthly premiums (and net monthly
premiums) for such plans.
``(3) General information.--General information under this
paragraph, with respect to coverage under this part during a
year, shall include the following:
``(A) Benefits under fee-for-service program option.--A
general description of the benefits covered (and not covered)
under the medicare fee-for-service program under parts A and
B, including--
``(i) covered items and services,
``(ii) beneficiary cost sharing, such as deductibles,
coinsurance, and copayment amounts, and
``(iii) any beneficiary liability for balance billing.
``(B) Part b premium.--The part B premium rates that will
be charged for part B coverage.
``(C) Election procedures.--Information and instructions on
how to exercise election options under this section.
``(D) Rights.--The general description of procedural rights
(including grievance and appeals procedures) of beneficiaries
under the medicare fee-for-service program and the
MedicarePlus program and right to be protected against
discrimination based on health status-related factors under
section 1852(b).
``(E) Information on medigap and medicare select.--A
general description of the benefits, enrollment rights, and
other requirements applicable to medicare supplemental
policies under section 1882 and provisions relating to
medicare select policies described in section 1882(t).
``(F) Potential for contract termination.--The fact that a
MedicarePlus organization may terminate or refuse to renew
its contract under this part and the effect the termination
or nonrenewal of its contract may have on individuals
enrolled with the MedicarePlus plan under this part.
``(4) Information comparing plan options.--Information
under this paragraph, with respect to a MedicarePlus plan for
a year, shall include the following:
``(A) Benefits.--The benefits covered (and not covered)
under the plan, including--
``(i) covered items and services beyond those provided
under the medicare fee-for-service program,
``(ii) any beneficiary cost sharing,
``(iii) any maximum limitations on out-of-pocket expenses,
and
``(iv) in the case of an MSA plan, differences in cost
sharing and balance billing under such a plan compared to
under other MedicarePlus plans.
``(B) Premiums.--The monthly premium (and net monthly
premium), if any, for the plan.
``(C) Service area.--The service area of the plan.
``(D) Quality and performance.--To the extent available,
plan quality and performance indicators for the benefits
under the plan (and how they compare to such indicators under
the medicare fee-for-service program under parts A and B in
the area involved), including--
``(i) disenrollment rates for medicare enrollees electing
to receive benefits through the plan for the previous 2 years
(excluding disenrollment due to death or moving outside the
plan's service area),
``(ii) information on medicare enrollee satisfaction,
``(iii) information on health outcomes, and
``(iv) the recent record regarding compliance of the plan
with requirements of this part (as determined by the
Secretary).
``(E) Supplemental benefits options.--Whether the
organization offering the plan offers optional supplemental
benefits and the terms and conditions (including premiums)
for such coverage.
``(5) Maintaining a toll-free number and internet site.--
The Secretary shall maintain a toll-free number for inquiries
regarding MedicarePlus options and the operation of this part
in all areas in which MedicarePlus plans are offered and an
Internet site through which individuals may electronically
obtain information on such options and MedicarePlus plans.
``(6) Use of nonfederal entities.--The Secretary may enter
into contracts with non-Federal entities to carry out
activities under this subsection.
``(7) Provision of information.--A MedicarePlus
organization shall provide the Secretary with such
information on the organization and each MedicarePlus plan it
offers as may be required for the preparation of the
information referred to in paragraph (2)(A).
``(e) Coverage Election Periods.--
``(1) Initial choice upon eligibility to make election if
medicareplus plans available to individual.--If, at the time
an individual first becomes entitled to benefits under part A
and enrolled under part B,
[[Page H4499]]
there is one or more MedicarePlus plans offered in the area
in which the individual resides, the individual shall make
the election under this section during a period (of a
duration and beginning at a time specified by the Secretary)
at such time. Such period shall be specified in a manner so
that, in the case of an individual who elects a MedicarePlus
plan during the period, coverage under the plan becomes
effective as of the first date on which the individual may
receive such coverage.
``(2) Open enrollment and disenrollment opportunities.--
Subject to paragraph (5)--
``(A) Continuous open enrollment and disenrollment through
2000.--At any time during 1998, 1999, and 2000, a
MedicarePlus eligible individual may change the election
under subsection (a)(1).
``(B) Continuous open enrollment and disenrollment for
first 6 months during 2001.--
``(i) In general.--Subject to clause (ii), at any time
during the first 6 months of 2001, or, if the individual
first becomes a MedicarePlus eligible individual during 2001,
during the first 6 months during 2001 in which the individual
is a MedicarePlus eligible individual, a MedicarePlus
eligible individual may change the election under subsection
(a)(1).
``(ii) Limitation of one change per year.--An individual
may exercise the right under clause (i) only once during
2001. The limitation under this clause shall not apply to
changes in elections effected during an annual, coordinated
election period under paragraph (3) or during a special
enrollment period under paragraph (4).
``(C) Continuous open enrollment and disenrollment for
first 3 months in subsequent years.--
``(i) In general.--Subject to clause (ii), at any time
during the first 3 months of a year after 2001, or, if the
individual first becomes a MedicarePlus eligible individual
during a year after 2001, during the first 3 months of such
year in which the individual is a MedicarePlus eligible
individual, a MedicarePlus eligible individual may change the
election under subsection (a)(1).
``(ii) Limitation of one change per year.--An individual
may exercise the right under clause (i) only once a year. The
limitation under this clause shall not apply to changes in
elections effected during an annual, coordinated election
period under paragraph (3) or during a special enrollment
period under paragraph (4).
``(3) Annual, coordinated election period.--
``(A) In general.--Subject to paragraph (5), each
individual who is eligible to make an election under this
section may change such election during an annual,
coordinated election period.
``(B) Annual, coordinated election period.--For purposes of
this section, the term `annual, coordinated election period'
means, with respect to a calendar year (beginning with 2001),
the month of October before such year.
``(C) MedicarePlus health fairs.--In the month of October
of each year (beginning with 1998), the Secretary shall
provide for a nationally coordinated educational and
publicity campaign to inform MedicarePlus eligible
individuals about MedicarePlus plans and the election process
provided under this section.
``(4) Special election periods.--Effective as of January 1,
2001, an individual may discontinue an election of a
MedicarePlus plan offered by a MedicarePlus organization
other than during an annual, coordinated election period and
make a new election under this section if--
``(A) the organization's or plan's certification under this
part has been terminated or the organization has terminated
or otherwise discontinued providing the plan;
``(B) the individual is no longer eligible to elect the
plan because of a change in the individual's place of
residence or other change in circumstances (specified by the
Secretary, but not including termination of the individual's
enrollment on the basis described in clause (i) or (ii) of
subsection (g)(3)(B));
``(C) the individual demonstrates (in accordance with
guidelines established by the Secretary) that--
``(i) the organization offering the plan substantially
violated a material provision of the organization's contract
under this part in relation to the individual (including the
failure to provide an enrollee on a timely basis medically
necessary care for which benefits are available under the
plan or the failure to provide such covered care in
accordance with applicable quality standards); or
``(ii) the organization (or an agent or other entity acting
on the organization's behalf) materially misrepresented the
plan's provisions in marketing the plan to the individual; or
``(D) the individual meets such other exceptional
conditions as the Secretary may provide.
``(5) Special rules for msa plans.--Notwithstanding the
preceding provisions of this subsection, an individual--
``(A) may elect an MSA plan only during--
``(i) an initial open enrollment period described in
paragraph (1),
``(ii) an annual, coordinated election period described in
paragraph (3)(B), or
``(iii) the months of October 1998 and October 1999; and
``(B) may not discontinue an election of an MSA plan except
during the periods described in clause (ii) or (iii) of
subparagraph (A) and under paragraph (4).
``(f) Effectiveness of Elections and Changes of
Elections.--
``(1) During initial coverage election period.--An election
of coverage made during the initial coverage election period
under subsection (e)(1) shall take effect upon the date the
individual becomes entitled to benefits under part A and
enrolled under part B, except as the Secretary may provide
(consistent with section 1838) in order to prevent
retroactive coverage.
``(2) During continuous open enrollment periods.--An
election or change of coverage made under subsection (e)(2)
shall take effect with the first day of the first calendar
month following the date on which the election is made.
``(3) Annual, coordinated election period.--An election or
change of coverage made during an annual, coordinated
election period (as defined in subsection (e)(3)(B)) in a
year shall take effect as of the first day of the following
year.
``(4) Other periods.--An election or change of coverage
made during any other period under subsection (e)(4) shall
take effect in such manner as the Secretary provides in a
manner consistent (to the extent practicable) with protecting
continuity of health benefit coverage.
``(g) Guaranteed Issue and Renewal.--
``(1) In general.--Except as provided in this subsection, a
MedicarePlus organization shall provide that at any time
during which elections are accepted under this section with
respect to a MedicarePlus plan offered by the organization,
the organization will accept without restrictions individuals
who are eligible to make such election.
``(2) Priority.--If the Secretary determines that a
MedicarePlus organization, in relation to a MedicarePlus plan
it offers, has a capacity limit and the number of
MedicarePlus eligible individuals who elect the plan under
this section exceeds the capacity limit, the organization may
limit the election of individuals of the plan under this
section but only if priority in election is provided--
``(A) first to such individuals as have elected the plan at
the time of the determination, and
``(B) then to other such individuals in such a manner that
does not discriminate, on a basis described in section
1852(b), among the individuals (who seek to elect the plan).
The preceding sentence shall not apply if it would result in
the enrollment of enrollees substantially nonrepresentative,
as determined in accordance with regulations of the
Secretary, of the medicare population in the service area of
the plan.
``(3) Limitation on termination of election.--
``(A) In general.--Subject to subparagraph (B), a
MedicarePlus organization may not for any reason terminate
the election of any individual under this section for a
MedicarePlus plan it offers.
``(B) Basis for termination of election.--A MedicarePlus
organization may terminate an individual's election under
this section with respect to a MedicarePlus plan it offers
if--
``(i) any net monthly premiums required with respect to
such plan are not paid on a timely basis (consistent with
standards under section 1856 that provide for a grace period
for late payment of net monthly premiums),
``(ii) the individual has engaged in disruptive behavior
(as specified in such standards), or
``(iii) the plan is terminated with respect to all
individuals under this part in the area in which the
individual resides.
``(C) Consequence of termination.--
``(i) Terminations for cause.--Any individual whose
election is terminated under clause (i) or (ii) of
subparagraph (B) is deemed to have elected the medicare fee-
for-service program option described in subsection (a)(1)(A).
``(ii) Termination based on plan termination or service
area reduction.--Any individual whose election is terminated
under subparagraph (B)(iii) shall have a special election
period under subsection (e)(4)(A) in which to change coverage
to coverage under another MedicarePlus plan. Such an
individual who fails to make an election during such period
is deemed to have chosen to change coverage to the medicare
fee-for-service program option described in subsection
(a)(1)(A).
``(D) Organization obligation with respect to election
forms.--Pursuant to a contract under section 1857, each
MedicarePlus organization receiving an election form under
subsection (c)(2) shall transmit to the Secretary (at such
time and in such manner as the Secretary may specify) a copy
of such form or such other information respecting the
election as the Secretary may specify.
``(h) Approval of Marketing Material and Application
Forms.--
``(1) Submission.--No marketing material or application
form may be distributed by a MedicarePlus organization to (or
for the use of) MedicarePlus eligible individuals unless--
``(A) at least 45 days before the date of distribution the
organization has submitted the material or form to the
Secretary for review, and
``(B) the Secretary has not disapproved the distribution of
such material or form.
``(2) Review.--The standards established under section 1856
shall include guidelines
[[Page H4500]]
for the review of all such material or form submitted and
under such guidelines the Secretary shall disapprove (or
later require the correction of) such material or form if the
material or form is materially inaccurate or misleading or
otherwise makes a material misrepresentation.
``(3) Deemed approval (1-stop shopping).--In the case of
material or form that is submitted under paragraph (1)(A) to
the Secretary or a regional office of the Department of
Health and Human Services and the Secretary or the office has
not disapproved the distribution of marketing material or
form under paragraph (1)(B) with respect to a MedicarePlus
plan in an area, the Secretary is deemed not to have
disapproved such distribution in all other areas covered by
the plan and organization except to the extent that such
material or form is specific only to an area involved.
``(4) Prohibition of certain marketing practices.--Each
MedicarePlus organization shall conform to fair marketing
standards, in relation to MedicarePlus plans offered under
this part, included in the standards established under
section 1856. Such standards shall include a prohibition
against a MedicarePlus organization (or agent of such an
organization) completing any portion of any election form
used to carry out elections under this section on behalf of
any individual.
``(i) Effect of Election of MedicarePlus Plan Option.--
Subject to sections 1852(a)(5), 1857(f)(2), and 1857(g)--
``(1) payments under a contract with a MedicarePlus
organization under section 1853(a) with respect to an
individual electing a MedicarePlus plan offered by the
organization shall be instead of the amounts which (in the
absence of the contract) would otherwise be payable under
parts A and B for items and services furnished to the
individual, and
``(2) subject to subsections (e) and (f) of section 1853,
only the MedicarePlus organization shall be entitled to
receive payments from the Secretary under this title for
services furnished to the individual.
``benefits and beneficiary protections
``Sec. 1852. (a) Basic Benefits.--
``(1) In general.--Except as provided in section 1859(b)(2)
for MSA plans, each MedicarePlus plan shall provide to
members enrolled under this part, through providers and other
persons that meet the applicable requirements of this title
and part A of title XI--
``(A) those items and services for which benefits are
available under parts A and B to individuals residing in the
area served by the plan, and
``(B) additional benefits required under section
1854(f)(1)(A).
``(2) Satisfaction of requirement.--A MedicarePlus plan
(other than an MSA plan) offered by a MedicarePlus
organization satisfies paragraph (1)(A), with respect to
benefits for items and services furnished other than through
a provider that has a contract with the organization offering
the plan, if the plan provides (in addition to any cost
sharing provided for under the plan) for at least the total
dollar amount of payment for such items and services as would
otherwise be authorized under parts A and B (including any
balance billing permitted under such parts).
``(3) Supplemental benefits.--
``(A) Benefits included subject to secretary's approval.--
Each MedicarePlus organization may provide to individuals
enrolled under this part, other than under an MSA plan,
(without affording those individuals an option to decline the
coverage) supplemental health care benefits that the
Secretary may approve. The Secretary shall approve any such
supplemental benefits unless the Secretary determines that
including such supplemental benefits would substantially
discourage enrollment by MedicarePlus eligible individuals
with the organization.
``(B) At enrollees' option.--A MedicarePlus organization
may provide to individuals enrolled under this part, other
than under an MSA plan, supplemental health care benefits
that the individuals may elect, at their option, to have
covered.
``(4) Organization as secondary payer.--Notwithstanding any
other provision of law, a MedicarePlus organization may (in
the case of the provision of items and services to an
individual under a MedicarePlus plan under circumstances in
which payment under this title is made secondary pursuant to
section 1862(b)(2)) charge or authorize the provider of such
services to charge, in accordance with the charges allowed
under such a law, plan, or policy--
``(A) the insurance carrier, employer, or other entity
which under such law, plan, or policy is to pay for the
provision of such services, or
``(B) such individual to the extent that the individual has
been paid under such law, plan, or policy for such services.
``(5) National coverage determinations.--If there is a
national coverage determination made in the period beginning
on the date of an announcement under section 1853(b) and
ending on the date of the next announcement under such
section and the Secretary projects that the determination
will result in a significant change in the costs to a
MedicarePlus organization of providing the benefits that are
the subject of such national coverage determination and that
such change in costs was not incorporated in the
determination of the annual MedicarePlus capitation rate
under section 1853 included in the announcement made at the
beginning of such period--
``(A) such determination shall not apply to contracts under
this part until the first contract year that begins after the
end of such period, and
``(B) if such coverage determination provides for coverage
of additional benefits or coverage under additional
circumstances, section 1851(i) shall not apply to payment for
such additional benefits or benefits provided under such
additional circumstances until the first contract year that
begins after the end of such period,
unless otherwise required by law.
``(b) Antidiscrimination.--
``(1) In general.--A MedicarePlus organization may not
deny, limit, or condition the coverage or provision of
benefits under this part, for individuals permitted to be
enrolled with the organization under this part, based on any
health status-related factor described in section 2702(a)(1)
of the Public Health Service Act.
``(2) Construction.--Paragraph (1) shall not be construed
as requiring a MedicarePlus organization to enroll
individuals who are determined to have end-stage renal
disease, except as provided under section 1851(a)(3)(B).
``(c) Detailed Description of Plan Provisions.--A
MedicarePlus organization shall disclose, in clear, accurate,
and standardized form to each enrollee with a MedicarePlus
plan offered by the organization under this part at the time
of enrollment and at least annually thereafter, the following
information regarding such plan:
``(1) Service area.--The plan's service area.
``(2) Benefits.--Benefits offered (and not offered) under
the plan offered, including information described in section
1851(d)(3)(A) and exclusions from coverage and, if it is an
MSA plan, a comparison of benefits under such a plan with
benefits under other MedicarePlus plans.
``(3) Access.--The number, mix, and distribution of plan
providers.
``(4) Out-of-area coverage.--Out-of-area coverage provided
by the plan.
``(5) Emergency coverage.--Coverage of emergency services
and urgently needed care, including--
``(A) the appropriate use of emergency services, including
use of the 911 telephone system or its local equivalent in
emergency situations and an explanation of what constitutes
an emergency situation;
``(B) the process and procedures of the plan for obtaining
emergency services; and
``(C) the locations of (i) emergency departments, and (ii)
other settings, in which plan physicians and hospitals
provide emergency services and post-stabilization care.
``(6) Supplemental benefits.--Supplemental benefits
available from the organization offering the plan,
including--
``(A) whether the supplemental benefits are optional,
``(B) the supplemental benefits covered, and
``(C) the premium price for the supplemental benefits.
``(7) Prior authorization rules.--Rules regarding prior
authorization or other review requirements that could result
in nonpayment.
``(8) Plan grievance and appeals procedures.--Any appeal or
grievance rights and procedures.
``(9) Quality assurance program.--A description of the
organization's quality assurance program under subsection
(e).
``(d) Access to Services.--
``(1) In general.--A MedicarePlus organization offering a
MedicarePlus plan may select the providers from whom the
benefits under the plan are provided so long as--
``(A) the organization makes such benefits available and
accessible to each individual electing the plan within the
plan service area with reasonable promptness and in a manner
which assures continuity in the provision of benefits;
``(B) when medically necessary the organization makes such
benefits available and accessible 24 hours a day and 7 days a
week;
``(C) the plan provides for reimbursement with respect to
services which are covered under subparagraphs (A) and (B)
and which are provided to such an individual other than
through the organization, if--
``(i) the services were medically necessary and immediately
required because of an unforeseen illness, injury, or
condition, and it was not reasonable given the circumstances
to obtain the services through the organization,
``(ii) the services were renal dialysis services and were
provided other than through the organization because the
individual was temporarily out of the plan's service area, or
``(iii) the services are maintenance care or post-
stabilization care covered under the guidelines established
under paragraph (2);
``(D) the organization provides access to appropriate
providers, including credentialed specialists, for medically
necessary treatment and services; and
``(E) coverage is provided for emergency services (as
defined in paragraph (3)) without regard to prior
authorization or the emergency care provider's contractual
relationship with the organization.
``(2) Guidelines respecting coordination of post-
stabilization care.--A MedicarePlus plan shall comply with
such guidelines as the Secretary may prescribe relating to
promoting efficient and timely coordination of appropriate
maintenance and post-stabilization care of an enrollee after
[[Page H4501]]
the enrollee has been determined to be stable under section
1867.
``(3) Definition of emergency services.--In this
subsection--
``(A) In general.--The term `emergency services' means,
with respect to an individual enrolled with an organization,
covered inpatient and outpatient services that--
``(i) are furnished by a provider that is qualified to
furnish such services under this title, and
``(ii) are needed to evaluate or stabilize an emergency
medical condition (as defined in subparagraph (B)).
``(B) Emergency medical condition based on prudent
layperson.--The term `emergency medical condition' means a
medical condition manifesting itself by acute symptoms of
sufficient severity such that a prudent layperson, who
possesses an average knowledge of health and medicine, could
reasonably expect the absence of immediate medical attention
to result in--
``(i) placing the health of the individual (or, with
respect to a pregnant woman, the health of the woman or her
unborn child) in serious jeopardy,
``(ii) serious impairment to bodily functions, or
``(iii) serious dysfunction of any bodily organ or part.
``(e) Quality Assurance Program.--
``(1) In general.--Each MedicarePlus organization must have
arrangements, consistent with any regulation, for an ongoing
quality assurance program for health care services it
provides to individuals enrolled with MedicarePlus plans of
the organization.
``(2) Elements of program.--The quality assurance program
shall--
``(A) stress health outcomes and provide for the
collection, analysis, and reporting of data (in accordance
with a quality measurement system that the Secretary
recognizes) that will permit measurement of outcomes and
other indices of the quality of MedicarePlus plans and
organizations;
``(B) provide for the establishment of written protocols
for utilization review, based on current standards of medical
practice;
``(C) provide review by physicians and other health care
professionals of the process followed in the provision of
such health care services;
``(D) monitor and evaluate high volume and high risk
services and the care of acute and chronic conditions;
``(E) evaluate the continuity and coordination of care that
enrollees receive;
``(F) have mechanisms to detect both underutilization and
overutilization of services;
``(G) after identifying areas for improvement, establish or
alter practice parameters;
``(H) take action to improve quality and assesses the
effectiveness of such action through systematic followup;
``(I) make available information on quality and outcomes
measures to facilitate beneficiary comparison and choice of
health coverage options (in such form and on such quality and
outcomes measures as the Secretary determines to be
appropriate);
``(J) be evaluated on an ongoing basis as to its
effectiveness;
``(K) include measures of consumer satisfaction; and
``(L) provide the Secretary with such access to information
collected as may be appropriate to monitor and ensure the
quality of care provided under this part.
``(3) External review.--Each MedicarePlus organization
shall, for each MedicarePlus plan it operates, have an
agreement with an independent quality review and improvement
organization approved by the Secretary to perform functions
of the type described in sections 1154(a)(4)(B) and
1154(a)(14) with respect to services furnished by
MedicarePlus plans for which payment is made under this
title.
``(4) Treatment of accreditation.--The Secretary shall
provide that a MedicarePlus organization is deemed to meet
requirements of paragraphs (1) through (3) of this subsection
and subsection (h) (relating to confidentiality and accuracy
of enrollee records) if the organization is accredited (and
periodically reaccredited) by a private organization under a
process that the Secretary has determined assures that the
organization, as a condition of accreditation, applies and
enforces standards with respect to the requirements involved
that are no less stringent than the standards established
under section 1856 to carry out the respective requirements.
``(f) Coverage Determinations.--
``(1) Decisions on nonemergency care.--A MedicarePlus
organization shall make determinations regarding
authorization requests for nonemergency care on a timely
basis, depending on the urgency of the situation.
``(2) Reconsiderations.--
``(A) In general.--Subject to subsection (g)(4), a
reconsideration of a determination of an organization denying
coverage shall be made within 30 days of the date of receipt
of medical information, but not later than 60 days after the
date of the determination.
``(B) Physician decision on certain reconsiderations.--A
reconsideration relating to a determination to deny coverage
based on a lack of medical necessity shall be made only by a
physician other than a physician involved in the initial
determination.
``(g) Grievances and Appeals.--
``(1) Grievance mechanism.--Each MedicarePlus organization
must provide meaningful procedures for hearing and resolving
grievances between the organization (including any entity or
individual through which the organization provides health
care services) and enrollees with MedicarePlus plans of the
organization under this part.
``(2) Appeals.--An enrollee with a MedicarePlus plan of a
MedicarePlus organization under this part who is dissatisfied
by reason of the enrollee's failure to receive any health
service to which the enrollee believes the enrollee is
entitled and at no greater charge than the enrollee believes
the enrollee is required to pay is entitled, if the amount in
controversy is $100 or more, to a hearing before the
Secretary to the same extent as is provided in section
205(b), and in any such hearing the Secretary shall make the
organization a party. If the amount in controversy is $1,000
or more, the individual or organization shall, upon notifying
the other party, be entitled to judicial review of the
Secretary's final decision as provided in section 205(g), and
both the individual and the organization shall be entitled to
be parties to that judicial review. In applying sections
205(b) and 205(g) as provided in this paragraph, and in
applying section 205(l) thereto, any reference therein to the
Commissioner of Social Security or the Social Security
Administration shall be considered a reference to the
Secretary or the Department of Health and Human Services,
respectively.
``(3) Independent review of certain coverage denials.--The
Secretary shall contract with an independent, outside entity
to review and resolve reconsiderations that affirm denial of
coverage.
``(4) Expedited determinations and reconsiderations.--
``(A) Receipt of requests.--An enrollee in a MedicarePlus
plan may request, either in writing or orally, an expedited
determination or reconsideration by the MedicarePlus
organization regarding a matter described in paragraph (2).
The organization shall also permit the acceptance of such
requests by physicians.
``(B) Organization procedures.--
``(i) In general.--The MedicarePlus organization shall
maintain procedures for expediting organization
determinations and reconsiderations when, upon request of an
enrollee, the organization determines that the application of
normal time frames for making a determination (or a
reconsideration involving a determination) could seriously
jeopardize the life or health of the enrollee or the
enrollee's ability to regain maximum function.
``(ii) Timely response.--In an urgent case described in
clause (i), the organization shall notify the enrollee (and
the physician involved, as appropriate) of the determination
(or determination on the reconsideration) as expeditiously as
the enrollee's health condition requires, but not later than
72 hours (or 24 hours in the case of a reconsideration) of
the time of receipt of the request for the determination or
reconsideration (or receipt of the information necessary to
make the determination or reconsideration), or such longer
period as the Secretary may permit in specified cases.
``(h) Confidentiality and Accuracy of Enrollee Records.--
Each MedicarePlus organization shall establish procedures--
``(1) to safeguard the privacy of individually identifiable
enrollee information,
``(2) to maintain accurate and timely medical records and
other health information for enrollees, and
``(3) to assure timely access of enrollees to their medical
information.
``(i) Information on Advance Directives.--Each MedicarePlus
organization shall meet the requirement of section 1866(f)
(relating to maintaining written policies and procedures
respecting advance directives).
``(j) Rules Regarding Physician Participation.--
``(1) Procedures.--Each MedicarePlus organization shall
establish reasonable procedures relating to the participation
(under an agreement between a physician and the organization)
of physicians under MedicarePlus plans offered by the
organization under this part. Such procedures shall include--
``(A) providing notice of the rules regarding
participation,
``(B) providing written notice of participation decisions
that are adverse to physicians, and
``(C) providing a process within the organization for
appealing such adverse decisions, including the presentation
of information and views of the physician regarding such
decision.
``(2) Consultation in medical policies.--A MedicarePlus
organization shall consult with physicians who have entered
into participation agreements with the organization regarding
the organization's medical policy, quality, and medical
management procedures.
``(3) Prohibiting interference with provider advice to
enrollees.--
``(A) In general.--Subject to subparagraphs (B) and (C), a
MedicarePlus organization (in relation to an individual
enrolled under a MedicarePlus plan offered by the
organization under this part) shall not prohibit or otherwise
restrict a covered health care professional (as defined in
subparagraph (D)) from advising such an individual who is a
patient of the professional about the health status of the
individual or medical care or treatment for the individual's
condition or disease, regardless of whether benefits for such
care or treatment are provided under the plan, if the
professional is acting within the lawful scope of practice.
``(B) Conscience protection.--Subparagraph (A) shall not be
construed as requiring
[[Page H4502]]
a MedicarePlus plan to provide, reimburse for, or provide
coverage of a counseling or referral service if the
MedicarePlus organization offering the plan--
``(i) objects to the provision of such service on moral or
religious grounds; and
``(ii) in the manner and through the written
instrumentalities such MedicarePlus organization deems
appropriate, makes available information on its policies
regarding such service to prospective enrollees before or
during enrollment and to enrollees within 90 days after the
date that the organization or plan adopts a change in policy
regarding such a counseling or referral service.
``(C) Construction.--Nothing in subparagraph (B) shall be
construed to affect disclosure requirements under State law
or under the Employee Retirement Income Security Act of 1974.
``(D) Health care professional defined.--For purposes of
this paragraph, the term `health care professional' means a
physician (as defined in section 1861(r)) or other health
care professional if coverage for the professional's services
is provided under the MedicarePlus plan for the services of
the professional. Such term includes a podiatrist,
optometrist, chiropractor, psychologist, dentist, physician
assistant, physical or occupational therapist and therapy
assistant, speech-language pathologist, audiologist,
registered or licensed practical nurse (including nurse
practitioner, clinical nurse specialist, certified registered
nurse anesthetist, and certified nurse-midwife), licensed
certified social worker, registered respiratory therapist,
and certified respiratory therapy technician.
``(4) Limitations on physician incentive plans.--
``(A) In general.--No MedicarePlus organization may operate
any physician incentive plan (as defined in subparagraph (B))
unless the following requirements are met:
``(i) No specific payment is made directly or indirectly
under the plan to a physician or physician group as an
inducement to reduce or limit medically necessary services
provided with respect to a specific individual enrolled with
the organization.
``(ii) If the plan places a physician or physician group at
substantial financial risk (as determined by the Secretary)
for services not provided by the physician or physician
group, the organization--
``(I) provides stop-loss protection for the physician or
group that is adequate and appropriate, based on standards
developed by the Secretary that take into account the number
of physicians placed at such substantial financial risk in
the group or under the plan and the number of individuals
enrolled with the organization who receive services from the
physician or group, and
``(II) conducts periodic surveys of both individuals
enrolled and individuals previously enrolled with the
organization to determine the degree of access of such
individuals to services provided by the organization and
satisfaction with the quality of such services.
``(iii) The organization provides the Secretary with
descriptive information regarding the plan, sufficient to
permit the Secretary to determine whether the plan is in
compliance with the requirements of this subparagraph.
``(B) Physician incentive plan defined.--In this paragraph,
the term `physician incentive plan' means any compensation
arrangement between a MedicarePlus organization and a
physician or physician group that may directly or indirectly
have the effect of reducing or limiting services provided
with respect to individuals enrolled with the organization
under this part.
``(5) Limitation on provider indemnification.--A
MedicarePlus organization may not provide (directly or
indirectly) for a provider (or group of providers) to
indemnify the organization against any liability resulting
from a civil action brought for any damage caused to an
enrollee with a MedicarePlus plan of the organization under
this part by the organization's denial of medically necessary
care.
``(k) Treatment of Services Furnished by Certain
Providers.--A physician or other entity (other than a
provider of services) that does not have a contract
establishing payment amounts for services furnished to an
individual enrolled under this part with a MedicarePlus
organization (other than under an MSA plan) shall accept as
payment in full for covered services under this title that
are furnished to such an individual the amounts that the
physician or other entity could collect if the individual
were not so enrolled. Any penalty or other provision of law
that applies to such a payment with respect to an individual
entitled to benefits under this title (but not enrolled with
a MedicarePlus organization under this part) also applies
with respect to an individual so enrolled.
``(l) Disclosure of Use of DSH and Teaching Hospitals.--
Each MedicarePlus organization shall provide the Secretary
with information on--
``(1) the extent to which the organization provides
inpatient and outpatient hospital benefits under this part--
``(A) through the use of hospitals that are eligible for
additional payments under section 1886(d)(5)(F)(i) (relating
to so-called DSH hospitals), or
``(B) through the use of teaching hospitals that receive
payments under section 1886(h); and
``(2) the extent to which differences between payment rates
to different hospitals reflect the disproportionate share
percentage of low-income patients and the presence of medical
residency training programs in those hospitals.
``payments to medicareplus organizations
``Sec. 1853. (a) Payments to Organizations.--
``(1) Monthly payments.--
``(A) In general.--Under a contract under section 1857 and
subject to subsections (e) and (f), the Secretary shall make
monthly payments under this section in advance to each
MedicarePlus organization, with respect to coverage of an
individual under this part in a MedicarePlus payment area for
a month, in an amount equal to \1/12\ of the annual
MedicarePlus capitation rate (as calculated under subsection
(c)) with respect to that individual for that area, adjusted
for 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.
``(B) Special rule for end-stage renal disease.--The
Secretary shall establish separate rates of payment to a
MedicarePlus organization with respect to classes of
individuals determined to have end-stage renal disease and
enrolled in a MedicarePlus plan of the organization. Such
rates of payment shall be actuarially equivalent to rates
paid to other enrollees in the MedicarePlus payment area (or
such other area as specified by the Secretary). In accordance
with regulations, the Secretary shall provide for the
application of the seventh sentence of section 1881(b)(7) to
payments under this section covering the provision of renal
dialysis treatment in the same manner as such sentence
applies to composite rate payments described in such
sentence.
``(2) Adjustment to reflect number of enrollees.--
``(A) In general.--The amount of payment under this
subsection may be retroactively adjusted to take into account
any difference between the actual number of individuals
enrolled with an organization under this part and the number
of such individuals estimated to be so enrolled in
determining the amount of the advance payment.
``(B) Special rule for certain enrollees.--
``(i) In general.--Subject to clause (ii), the Secretary
may make retroactive adjustments under subparagraph (A) to
take into account individuals enrolled during the period
beginning on the date on which the individual enrolls with a
MedicarePlus organization under a 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 organization under this part,
except that for purposes of making such retroactive
adjustments under this subparagraph, such period may not
exceed 90 days.
``(ii) Exception.--No adjustment may be made under clause
(i) with respect to any individual who does not certify that
the organization provided the individual with the information
required to be disclosed under section 1852(c) at the time
the individual enrolled with the organization.
``(3) Establishment of risk adjustment factors.--
``(A) Report.--The Secretary shall develop, and submit to
Congress by not later than October 1, 1999, a report on a
method of risk adjustment of payment rates under this section
that accounts for variations in per capita costs based on
health status. Such report shall include an evaluation of
such method by an outside, independent actuary of the
actuarial soundness of the proposal.
``(B) Data collection.--In order to carry out this
paragraph, the Secretary shall require MedicarePlus
organizations (and eligible organizations with risk-sharing
contracts under section 1876) to submit, for periods
beginning on or after January 1, 1998, data regarding
inpatient hospital services and other services and other
information the Secretary deems necessary.
``(C) Initial implementation.--The Secretary shall first
provide for implementation of a risk adjustment methodology
that accounts for variations in per capita costs based on
health status and other demographic factors for payments by
no later than January 1, 2000.
``(b) Annual Announcement of Payment Rates.--
``(1) Annual announcement.--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--
``(A) the annual MedicarePlus capitation rate for each
MedicarePlus payment area for the year, and
``(B) the risk and other factors to be used in adjusting
such rates under subsection (a)(1)(A) for payments for months
in that year.
``(2) Advance notice of methodological changes.--At least
45 days before making the announcement under paragraph (1)
for a year, the Secretary shall provide for notice to
MedicarePlus organizations of proposed changes to be made in
the methodology from the methodology and assumptions used in
the previous announcement and shall provide
[[Page H4503]]
such organizations an opportunity to comment on such proposed
changes.
``(3) Explanation of assumptions.--In each announcement
made under paragraph (1), the Secretary shall include an
explanation of the assumptions and changes in methodology
used in the announcement in sufficient detail so that
MedicarePlus organizations can compute monthly adjusted
MedicarePlus capitation rates for individuals in each
MedicarePlus payment area which is in whole or in part within
the service area of such an organization.
``(c) Calculation of Annual MedicarePlus Capitation
Rates.--
``(1) In general.--For purposes of this part, each annual
MedicarePlus capitation rate, for a MedicarePlus payment area
for a contract year consisting of a calendar year, is equal
to the largest of the amounts specified in the following
subparagraphs (A), (B), or (C):
``(A) Blended capitation rate.--The sum of--
``(i) area-specific percentage for the year (as specified
under paragraph (2) for the year) of the annual area-specific
MedicarePlus capitation rate for the year for the
MedicarePlus payment area, as determined under paragraph (3),
and
``(ii) national percentage (as specified under paragraph
(2) for the year) of the input-price-adjusted annual national
MedicarePlus capitation rate for the year, as determined
under paragraph (4),
multiplied by the payment adjustment factors described in
subparagraphs (A) and (B) of paragraph (5).
``(B) Minimum amount.--12 multiplied by the following
amount:
``(i) For 1998, $350 (but not to exceed, in the case of an
area outside the 50 States and the District of Columbia, 150
percent of the annual per capita rate of payment for 1997
determined under section 1876(a)(1)(C) for the area).
``(ii) For a succeeding year, the minimum amount specified
in this clause (or clause (i)) for the preceding year
increased by the national per capita MedicarePlus growth
percentage, specified under paragraph (6) for that succeeding
year.
``(C) Minimum percentage increase.--
``(i) For 1998, 102 percent of the annual per capita rate
of payment for 1997 determined under section 1876(a)(1)(C)
for the MedicarePlus payment area.
``(ii) For a subsequent year, 102 percent of the annual
MedicarePlus capitation rate under this paragraph for the
area for the previous year.
``(2) Area-specific and national percentages.--For purposes
of paragraph (1)(A)--
``(A) for 1998, the `area-specific percentage' is 90
percent and the `national percentage' is 10 percent,
``(B) for 1999, the `area-specific percentage' is 80
percent and the `national percentage' is 20 percent,
``(C) for 2000, the `area-specific percentage' is 70
percent and the `national percentage' is 30 percent,
``(D) for 2001, the `area-specific percentage' is 60
percent and the `national percentage' is 40 percent, and
``(E) for a year after 2001, the `area-specific percentage'
is 50 percent and the `national percentage' is 50 percent.
``(3) Annual area-specific medicareplus capitation rate.--
For purposes of paragraph (1)(A), the annual area-specific
MedicarePlus capitation rate for a MedicarePlus payment
area--
``(A) for 1998 is the annual per capita rate of payment for
1997 determined under section 1876(a)(1)(C) for the area,
increased by the national per capita MedicarePlus growth
percentage for 1998 (as defined in paragraph (6)); or
``(B) for a subsequent year is the annual area-specific
MedicarePlus capitation rate for the previous year determined
under this paragraph for the area, increased by the national
per capita MedicarePlus growth percentage for such subsequent
year.
``(4) Input-price-adjusted annual national medicareplus
capitation rate.--
``(A) In general.--For purposes of paragraph (1)(A), the
input-price-adjusted annual national MedicarePlus capitation
rate for a MedicarePlus 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 annual MedicarePlus
capitation rate (determined under subparagraph (B)) 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 clause (iii), the Secretary shall, subject to
subparagraph (C), apply those indices under this title that
are used in applying (or updating) national payment rates for
specific areas and localities.
``(B) National standardized annual medicareplus capitation
rate.--In subparagraph (A)(i), the `national standardized
annual MedicarePlus capitation rate' for a year is equal to--
``(i) the sum (for all MedicarePlus payment areas) of the
product of--
``(I) the annual area-specific MedicarePlus capitation rate
for that year for the area under paragraph (3), and
``(II) the average number of medicare beneficiaries
residing in that area in the year, multiplied by the average
of the risk factor weights used to adjust payments under
subsection (a)(1)(A) for such beneficiaries in such area;
divided by
``(ii) the sum of the products described in clause (i)(II)
for all areas for that year.
``(C) Special rules for 1998.--In applying this paragraph
for 1998--
``(i) medicare services shall be divided into 2 types of
services: part A services and part B services;
``(ii) the proportions described in subparagraph (A)(ii)--
``(I) for part A services shall be the ratio (expressed as
a percentage) of the national average annual per capita rate
of payment for part A for 1997 to the total national average
annual per capita rate of payment for parts A and B for 1997,
and
``(II) for part B services shall be 100 percent minus the
ratio described in subclause (I);
``(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;
``(iv) for part B services--
``(I) 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
``(II) of the remaining 34 percent of the amount of such
payments, 40 percent shall be adjusted by the index described
in clause (iii); and
``(v) the index values shall be computed based only on the
beneficiary population who are 65 years of age or older and
who are not determined to have end stage renal disease.
The Secretary may continue to apply the rules described in
this subparagraph (or similar rules) for 1999.
``(5) Payment adjustment budget neutrality factors.--For
purposes of paragraph (1)(A)--
``(A) Blended rate payment adjustment factor.--For each
year, the Secretary shall compute a blended rate payment
adjustment factor such that, not taking into account
subparagraphs (B) and (C) of paragraph (1) and the
application of the payment adjustment factor described in
subparagraph (B), the aggregate of the payments that would be
made under this part is equal to the aggregate payments that
would have been made under this part (not taking into account
such subparagraphs and such other adjustment factor) if the
area-specific percentage under paragraph (1) for the year had
been 100 percent and the national percentage had been 0
percent.
``(B) Floor-and-minimum-update payment adjustment factor.--
For each year, the Secretary shall compute a floor-and-
minimum-update payment adjustment factor so that, taking into
account the application of the blended rate payment
adjustment factor under subparagraph (A) and subparagraphs
(B) and (C) of paragraph (1) and the application of the
adjustment factor under this subparagraph, the aggregate of
the payments under this part shall not exceed the aggregate
payments that would have been made under this part if
subparagraphs (B) and (C) of paragraph (1) did not apply and
if the floor-and-minimum-update payment adjustment factor
under this subparagraph was 1.
``(6) National per capita medicareplus growth percentage
defined.--
``(A) In general.--In this part, the `national per capita
MedicarePlus growth percentage' for a year is the percentage
determined by the Secretary, by April 30th before the
beginning of the year involved, to reflect the Secretary's
estimate of the projected per capita rate of growth in
expenditures under this title for an individual entitled to
benefits under part A and enrolled under part B, reduced by
the number of percentage points specified in subparagraph (B)
for the year. Separate determinations may be made for aged
enrollees, disabled enrollees, and enrollees with end-stage
renal disease. Such percentage shall include an adjustment
for over or under projection in the growth percentage for
previous years.
``(B) Adjustment.--The number of percentage points
specified in this subparagraph is--
``(i) for 1998, 0.5 percentage points,
``(ii) for 1999, 0.5 percentage points,
``(iii) for 2000, 0.5 percentage points,
``(iv) for 2001, 0.5 percentage points,
``(v) for 2002, 0.5 percentage points, and
``(vi) for a year after 2002, 0 percentage points.
``(d) MedicarePlus Payment Area Defined.--
``(1) In general.--In this part, except as provided in
paragraph (3), the term `MedicarePlus payment area' means a
county, or equivalent area specified by the Secretary.
``(2) Rule for esrd beneficiaries.--In the case of
individuals who are determined to have end stage renal
disease, the MedicarePlus payment area shall be a State or
such other payment area as the Secretary specifies.
``(3) Geographic adjustment.--
``(A) In general.--Upon written request of the chief
executive officer of a State for a contract year (beginning
after 1998) made at least 7 months before the beginning of
the year, the Secretary shall make a geographic adjustment to
a MedicarePlus payment area in the State otherwise determined
under paragraph (1)--
[[Page H4504]]
``(i) to a single statewide MedicarePlus payment area,
``(ii) to the metropolitan based system described in
subparagraph (C), or
``(iii) to consolidating into a single MedicarePlus payment
area noncontiguous counties (or equivalent areas described in
paragraph (1)) 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.
``(B) Budget neutrality adjustment.--In the case of a State
requesting an adjustment under this paragraph, the Secretary
shall adjust the payment rates otherwise established under
this section for MedicarePlus payment areas in the State in a
manner so that the aggregate of the payments under this
section in the State shall not exceed the aggregate payments
that would have been made under this section for MedicarePlus
payment areas in the State in the absence of the adjustment
under this paragraph.
``(C) Metropolitan based system.--The metropolitan based
system described in this subparagraph 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 MedicarePlus
payment area, and
``(ii) all areas in the State that do not fall within a
metropolitan statistical area are treated as a single
MedicarePlus payment area.
``(D) Areas.--In subparagraph (C), 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.
``(e) Special Rules for Individuals Electing MSA Plans.--
``(1) In general.--If the amount of the monthly premium for
an MSA plan for a MedicarePlus payment area for a year is
less than \1/12\ of the annual MedicarePlus capitation rate
applied under this section for the area and year involved,
the Secretary shall deposit an amount equal to 100 percent of
such difference in a MedicarePlus MSA established (and, if
applicable, designated) by the individual under paragraph
(2).
``(2) Establishment and designation of medicareplus medical
savings account as requirement for payment of contribution.--
In the case of an individual who has elected coverage under
an MSA plan, no payment shall be made under paragraph (1) on
behalf of an individual for a month unless the individual--
``(A) has established before the beginning of the month (or
by such other deadline as the Secretary may specify) a
MedicarePlus MSA (as defined in section 138(b)(2) of the
Internal Revenue Code of 1986), and
``(B) if the individual has established more than one such
MedicarePlus MSA, has designated one of such accounts as the
individual's MedicarePlus MSA for purposes of this part.
Under rules under this section, such an individual may change
the designation of such account under subparagraph (B) for
purposes of this part.
``(3) Lump sum deposit of medical savings account
contribution.--In the case of an individual electing an MSA
plan effective beginning with a month in a year, the amount
of the contribution to the MedicarePlus MSA on behalf of the
individual for that month and all successive months in the
year shall be deposited during that first month. In the case
of a termination of such an election as of a month before the
end of a year, the Secretary shall provide for a procedure
for the recovery of deposits attributable to the remaining
months in the year.
``(f) Payments From Trust Fund.--The payment to a
MedicarePlus organization under this section for individuals
enrolled under this part with the organization and payments
to a MedicarePlus MSA under subsection (e)(1) shall be made
from the Federal Hospital Insurance Trust Fund and the
Federal Supplementary Medical Insurance Trust Fund in such
proportion as the Secretary determines reflects the relative
weight that benefits under part A and under part B represents
of the actuarial value of the total benefits under this
title. Monthly payments otherwise payable under this section
for October 2001 shall be paid on the last business day of
September 2001.
``(g) Special Rule for Certain Inpatient Hospital Stays.--
In the case of an individual who is receiving inpatient
hospital services from a subsection (d) hospital (as defined
in section 1886(d)(1)(B)) as of the effective date of the
individual's--
``(1) election under this part of a MedicarePlus plan
offered by a MedicarePlus organization--
``(A) payment for such services until the date of the
individual's discharge shall be made under this title through
the MedicarePlus plan or the medicare fee-for-service program
option described in section 1851(a)(1)(A) (as the case may
be) elected before the election with such organization,
``(B) the elected organization shall not be financially
responsible for payment for such services until the date
after the date of the individual's discharge, and
``(C) the organization shall nonetheless be paid the full
amount otherwise payable to the organization under this part;
or
``(2) termination of election with respect to a
MedicarePlus organization under this part--
``(A) the organization shall be financially responsible for
payment for such services after such date and until the date
of the individual's discharge,
``(B) payment for such services during the stay shall not
be made under section 1886(d) or by any succeeding
MedicarePlus organization, and
``(C) the terminated organization shall not receive any
payment with respect to the individual under this part during
the period the individual is not enrolled.
``premiums
``Sec. 1854. (a) Submission and Charging of Premiums.--
``(1) In general.--Subject to paragraph (3), each
MedicarePlus organization shall file with the Secretary each
year, in a form and manner and at a time specified by the
Secretary--
``(A) the amount of the monthly premium for coverage for
services under section 1852(a) under each MedicarePlus plan
it offers under this part in each MedicarePlus payment area
(as defined in section 1853(d)) in which the plan is being
offered; and
``(B) the enrollment capacity in relation to the plan in
each such area.
``(2) Terminology.--In this part--
``(A) the term `monthly premium' means, with respect to a
MedicarePlus plan offered by a MedicarePlus organization, the
monthly premium filed under paragraph (1), not taking into
account the amount of any payment made toward the premium
under section 1853; and
``(B) the term `net monthly premium' means, with respect to
such a plan and an individual enrolled with the plan, the
premium (as defined in subparagraph (A)) for the plan reduced
by the amount of payment made toward such premium under
section 1853.
``(b) Monthly Premium Charged.--The monthly amount of the
premium charged by a MedicarePlus organization for a
MedicarePlus plan offered in a MedicarePlus payment area to
an individual under this part shall be equal to the net
monthly premium plus any monthly premium charged in
accordance with subsection (e)(2) for supplemental benefits.
``(c) Uniform Premium.--The monthly premium and monthly
amount charged under subsection (b) of a MedicarePlus
organization under this part may not vary among individuals
who reside in the same MedicarePlus payment area.
``(d) Terms and Conditions of Imposing Premiums.--Each
MedicarePlus organization shall permit the payment of net
monthly premiums on a monthly basis and may terminate
election of individuals for a MedicarePlus plan for failure
to make premium payments only in accordance with section
1851(g)(3)(B)(i). A MedicarePlus organization is not
authorized to provide for cash or other monetary rebates as
an inducement for enrollment or otherwise.
``(e) Limitation on Enrollee Cost-Sharing.--
``(1) For basic and additional benefits.--Except as
provided in paragraph (2), in no event may--
``(A) the net monthly premium (multiplied by 12) and the
actuarial value of the deductibles, coinsurance, and
copayments applicable on average to individuals enrolled
under this part with a MedicarePlus plan of an organization
with respect to required benefits described in section
1852(a)(1) and additional benefits (if any) required under
subsection (f)(1) for a year, exceed
``(B) the actuarial value of the deductibles, coinsurance,
and copayments that would be applicable on average to
individuals entitled to benefits under part A and enrolled
under part B if they were not members of a MedicarePlus
organization for the year.
``(2) For supplemental benefits.--If the MedicarePlus
organization provides to its members enrolled under this part
supplemental benefits described in section 1852(a)(3), the
sum of the monthly premium rate (multiplied by 12) charged
for such supplemental benefits and the actuarial value of its
deductibles, coinsurance, and copayments charged with respect
to such benefits may not exceed the adjusted community rate
for such benefits (as defined in subsection (f)(4)).
``(3) Exception for msa plans.--Paragraphs (1) and (2) do
not apply to an MSA plan.
``(4) Determination on other basis.--If the Secretary
determines that adequate data are not available to determine
the actuarial value under paragraph (1)(A) or (2), the
Secretary may determine such amount with respect to all
individuals in the MedicarePlus payment area, the State, or
in the United States, eligible to enroll in the MedicarePlus
plan involved under this part or on the basis of other
appropriate data.
``(f) Requirement for Additional Benefits.--
``(1) Requirement.--
``(A) In general.--Each MedicarePlus organization (in
relation to a MedicarePlus plan it offers) shall provide that
if there is an excess amount (as defined in subparagraph (B))
for the plan for a contract year, subject to the succeeding
provisions of this subsection, the organization shall provide
to individuals such additional benefits (as the organization
may specify) in a value which is at least equal to the
adjusted excess amount (as defined in subparagraph (C)).
``(B) Excess amount.--For purposes of this paragraph, the
`excess amount', for an organization for a plan, is the
amount (if any) by which--
[[Page H4505]]
``(i) the average of the capitation payments made to the
organization under section 1853 for the plan at the beginning
of contract year, exceeds
``(ii) the actuarial value of the required benefits
described in section 1852(a)(1) under the plan for
individuals under this part, as determined based upon an
adjusted community rate described in paragraph (4) (as
reduced for the actuarial value of the coinsurance and
deductibles under parts A and B).
``(C) Adjusted excess amount.--For purposes of this
paragraph, the `adjusted excess amount', for an organization
for a plan, is the excess amount reduced to reflect any
amount withheld and reserved for the organization for the
year under paragraph (2).
``(D) No application to msa plans.--Subparagraph (A) shall
not apply to an MSA plan.
``(E) Uniform application.--This paragraph shall be applied
uniformly for all enrollees for a plan in a MedicarePlus
payment area.
``(F) Construction.--Nothing in this subsection shall be
construed as preventing a MedicarePlus organization from
providing health care benefits that are in addition to the
benefits otherwise required to be provided under this
paragraph and from imposing a premium for such additional
benefits.
``(2) Stabilization fund.--A MedicarePlus organization may
provide that a part of the value of an excess amount
described in paragraph (1) be withheld and reserved in the
Federal Hospital Insurance Trust Fund and in the Federal
Supplementary Medical Insurance Trust Fund (in such
proportions as the Secretary determines to be appropriate) by
the Secretary for subsequent annual contract periods, to the
extent required to stabilize and prevent undue fluctuations
in the additional benefits offered in those subsequent
periods by the organization in accordance with such
paragraph. Any of such value of the amount reserved which is
not provided as additional benefits described in paragraph
(1)(A) to individuals electing the MedicarePlus plan of the
organization in accordance with such paragraph prior to the
end of such periods, shall revert for the use of such trust
funds.
``(3) Determination based on insufficient data.--For
purposes of this subsection, if the Secretary finds that
there is insufficient enrollment experience (including no
enrollment experience in the case of a provider-sponsored
organization) to determine an average of the capitation
payments to be made under this part at the beginning of a
contract period, the Secretary may determine such an average
based on the enrollment experience of other contracts entered
into under this part.
``(4) Adjusted community rate.--
``(A) In general.--For purposes of this subsection, subject
to subparagraph (B), the term `adjusted community rate' for a
service or services means, at the election of a MedicarePlus
organization, either--
``(i) the rate of payment for that service or services
which the Secretary annually determines would apply to an
individual electing a MedicarePlus plan under this part if
the rate of payment were determined under a `community rating
system' (as defined in section 1302(8) of the Public Health
Service Act, other than subparagraph (C)), or
``(ii) such portion of the weighted aggregate premium,
which the Secretary annually estimates would apply to such an
individual, as the Secretary annually estimates is
attributable to that service or services,
but adjusted for differences between the utilization
characteristics of the individuals electing coverage under
this part and the utilization characteristics of the other
enrollees with the plan (or, if the Secretary finds that
adequate data are not available to adjust for those
differences, the differences between the utilization
characteristics of individuals selecting other MedicarePlus
coverage, or MedicarePlus eligible individuals in the area,
in the State, or in the United States, eligible to elect
MedicarePlus coverage under this part and the utilization
characteristics of the rest of the population in the area, in
the State, or in the United States, respectively).
``(B) Special rule for provider-sponsored organizations.--
In the case of a MedicarePlus organization that is a
provider-sponsored organization, the adjusted community rate
under subparagraph (A) for a MedicarePlus plan of the
organization may be computed (in a manner specified by the
Secretary) using data in the general commercial marketplace
or (during a transition period) based on the costs incurred
by the organization in providing such a plan.
``(g) Periodic Auditing.--The Secretary shall provide for
the annual auditing of the financial records (including data
relating to medicare utilization, costs, and computation of
the adjusted community rate) of at least one-third of the
MedicarePlus organizations offering MedicarePlus plans under
this part. The Comptroller General shall monitoring auditing
activities conducted under this subsection.
``(h) Prohibition of State Imposition of Premium Taxes.--No
State may impose a premium tax or similar tax with respect to
premiums on MedicarePlus plans or the offering of such plans.
``organizational and financial requirements for medicareplus
organizations; provider-sponsored organizations
``Sec. 1855. (a) Organized and Licensed Under State Law.--
``(1) In general.--Subject to paragraphs (2) and (3), a
MedicarePlus organization shall be organized and licensed
under State law as a risk-bearing entity eligible to offer
health insurance or health benefits coverage in each State in
which it offers a MedicarePlus plan.
``(2) Special exception for provider-sponsored
organizations.--
``(A) In general.--In the case of a provider-sponsored
organization that seeks to offer a MedicarePlus plan in a
State, the Secretary shall waive the requirement of paragraph
(1) that the organization be licensed in that State if--
``(i) the organization files an application for such waiver
with the Secretary, and
``(ii) the Secretary determines, based on the application
and other evidence presented to the Secretary, that any of
the grounds for approval of the application described in
subparagraph (B), (C), or (D) has been met.
``(B) Failure to act on licensure application on a timely
basis.--A ground for approval of such a waiver application is
that the State has failed to complete action on a licensing
application of the organization within 90 days of the date of
the State's receipt of the completed application. No period
before the date of the enactment of this section shall be
included in determining such 90-day period.
``(C) Denial of application based on discriminatory
treatment.--A ground for approval of such a waiver
application is that the State has denied such a licensing
application and--
``(i) the State has imposed documentation or information
requirements not related to solvency requirements that are
not generally applicable to other entities engaged in
substantially similar business, or
``(ii) the standards or review process imposed by the State
as a condition of approval of the license imposes any
material requirements, procedures, or standards (other than
requirements and standards relating to solvency) to such
organizations that are not generally applicable to other
entities engaged in substantially similar business.
``(D) Denial of application based on application of
solvency requirements.--A ground for approval of such a
waiver application is that the State has denied such a
licensing application based (in whole or in part) on the
organization's failure to meet applicable solvency
requirements and--
``(i) such requirements are not the same as the solvency
standards established under section 1856(a); or
``(ii) the State has imposed as a condition of approval of
the license any documentation or information requirements
relating to solvency or other material requirements,
procedures, or standards relating to solvency that are
different from the requirements, procedures, and standards
applied by the Secretary under subsection (d)(2).
For purposes of this subparagraph, the term `solvency
requirements' means requirements relating to solvency and
other matters covered under the standards established under
section 1856(a).
``(E) Treatment of waiver.--In the case of a waiver granted
under this paragraph for a provider-sponsored organization--
``(i) the waiver shall be effective for a 36-month period,
except it may be renewed based on a subsequent application
filed during the last 6 months of such period, and
``(ii) any provisions of State law which relate to the
licensing of the organization and which prohibit the
organization from providing coverage pursuant to a contract
under this part shall be superseded.
Nothing in this subparagraph shall be construed as limiting
the number of times such a waiver may be renewed.
``(F) Prompt action on application.--The Secretary shall
grant or deny such a waiver application within 60 days after
the date the Secretary determines that a substantially
complete application has been filed. Nothing in this section
shall be construed as preventing an organization which has
had such a waiver application denied from submitting a
subsequent waiver application.
``(3) Exception if required to offer more than medicareplus
plans.--Paragraph (1) shall not apply to a MedicarePlus
organization in a State if the State requires the
organization, as a condition of licensure, to offer any
product or plan other than a MedicarePlus plan.
``(4) Licensure does not substitute for or constitute
certification.--The fact that an organization is licensed in
accordance with paragraph (1) does not deem the organization
to meet other requirements imposed under this part.
``(b) Prepaid Payment.--A MedicarePlus organization shall
be compensated (except for premiums, deductibles,
coinsurance, and copayments) for the provision of health care
services to enrolled members under the contract under this
part by a payment which is paid on a periodic basis without
regard to the date the health care services are provided and
which is fixed without regard to the frequency, extent, or
kind of health care service actually provided to a member.
``(c) Assumption of Full Financial Risk.--The MedicarePlus
organization shall assume full financial risk on a
prospective basis for the provision of the health care
services (except, at the election of the organization,
hospice care) for which benefits are required to be provided
under section 1852(a)(1), except that the organization--
``(1) may obtain insurance or make other arrangements for
the cost of providing to
[[Page H4506]]
any enrolled member such services the aggregate value of
which exceeds $5,000 in any year,
``(2) may obtain insurance or make other arrangements for
the cost of such services provided to its enrolled members
other than through the organization because medical necessity
required their provision before they could be secured through
the organization,
``(3) may obtain insurance or make other arrangements for
not more than 90 percent of the amount by which its costs for
any of its fiscal years exceed 115 percent of its income for
such fiscal year, and
``(4) may make arrangements with physicians or other health
professionals, health care institutions, or any combination
of such individuals or institutions to assume all or part of
the financial risk on a prospective basis for the provision
of basic health services by the physicians or other health
professionals or through the institutions.
``(d) Certification of Provision Against Risk of Insolvency
for Unlicensed PSOs.--
``(1) In general.--Each MedicarePlus organization that is a
provider-sponsored organization, that is not licensed by a
State under subsection (a), and for which a waiver
application has been approved under subsection (a)(2), shall
meet standards established under section 1856(a) relating to
the financial solvency and capital adequacy of the
organization.
``(2) Certification process for solvency standards for
psos.--The Secretary shall establish a process for the
receipt and approval of applications of a provider-sponsored
organization described in paragraph (1) for certification
(and periodic recertification) of the organization as meeting
such solvency standards. Under such process, the Secretary
shall act upon such an application not later than 60 days
after the date the application has been received.
``(e) Provider-Sponsored Organization Defined.--
``(1) In general.--In this part, the term `provider-
sponsored organization' means a public or private entity--
``(A) that is established or organized by a health care
provider, or group of affiliated health care providers,
``(B) that provides a substantial proportion (as defined by
the Secretary in accordance with paragraph (2)) of the health
care items and services under the contract under this part
directly through the provider or affiliated group of
providers, and
``(C) with respect to which those affiliated providers that
share, directly or indirectly, substantial financial risk
with respect to the provision of such items and services have
at least a majority financial interest in the entity.
``(2) Substantial proportion.--In defining what is a
`substantial proportion' for purposes of paragraph (1)(B),
the Secretary--
``(A) shall take into account (i) the need for such an
organization to assume responsibility for a substantial
proportion of services in order to assure financial stability
and (ii) the practical difficulties in such an organization
integrating a very wide range of service providers; and
``(B) may vary such proportion based upon relevant
differences among organizations, such as their location in an
urban or rural area.
``(3) Affiliation.--For purposes of this subsection, a
provider is `affiliated' with another provider if, through
contract, ownership, or otherwise--
``(A) one provider, directly or indirectly, controls, is
controlled by, or is under common control with the other,
``(B) both providers are part of a controlled group of
corporations under section 1563 of the Internal Revenue Code
of 1986, or
``(C) both providers are part of an affiliated service
group under section 414 of such Code.
``(4) Control.--For purposes of paragraph (3), control is
presumed to exist if one party, directly or indirectly, owns,
controls, or holds the power to vote, or proxies for, not
less than 51 percent of the voting rights or governance
rights of another.
``(5) Health care provider defined.--In this subsection,
the term `health care provider' means--
``(A) any individual who is engaged in the delivery of
health care services in a State and who is required by State
law or regulation to be licensed or certified by the State to
engage in the delivery of such services in the State, and
``(B) any entity that is engaged in the delivery of health
care services in a State and that, if it is required by State
law or regulation to be licensed or certified by the State to
engage in the delivery of such services in the State, is so
licensed.
``(6) Regulations.--The Secretary shall issue regulations
to carry out this subsection.
``establishment of standards
``Sec. 1856. (a) Establishment of Solvency Standards for
Provider-Sponsored Organizations.--
``(1) Establishment.--
``(A) In general.--The Secretary shall establish, on an
expedited basis and using a negotiated rulemaking process
under subchapter III of chapter 5 of title 5, United States
Code, standards described in section 1855(d)(1) (relating to
the financial solvency and capital adequacy of the
organization) that entities must meet to qualify as provider-
sponsored organizations under this part.
``(B) Factors to consider for solvency standards.--In
establishing solvency standards under subparagraph (A) for
provider-sponsored organizations, the Secretary shall consult
with interested parties and shall take into account--
``(i) the delivery system assets of such an organization
and ability of such an organization to provide services
directly to enrollees through affiliated providers, and
``(ii) alternative means of protecting against insolvency,
including reinsurance, unrestricted surplus, letters of
credit, guarantees, organizational insurance coverage,
partnerships with other licensed entities, and valuation
attributable to the ability of such an organization to meet
its service obligations through direct delivery of care.
``(C) Enrollee protection against insolvency.--Such
standards shall include provisions to prevent enrollees from
being held liable to any person or entity for the
MedicarePlus organization's debts in the event of the
organization's insolvency.
``(2) Publication of notice.--In carrying out the
rulemaking process under this subsection, the Secretary,
after consultation with the National Association of Insurance
Commissioners, the American Academy of Actuaries,
organizations representative of medicare beneficiaries, and
other interested parties, shall publish the notice provided
for under section 564(a) of title 5, United States Code, by
not later than 45 days after the date of the enactment of
this section.
``(3) Target date for publication of rule.--As part of the
notice under paragraph (2), and for purposes of this
subsection, the `target date for publication' (referred to in
section 564(a)(5) of such title) shall be April 1, 1998.
``(4) Abbreviated period for submission of comments.--In
applying section 564(c) of such title under this subsection,
`15 days' shall be substituted for `30 days'.
``(5) Appointment of negotiated rulemaking committee and
facilitator.--The Secretary shall provide for--
``(A) the appointment of a negotiated rulemaking committee
under section 565(a) of such title by not later than 30 days
after the end of the comment period provided for under
section 564(c) of such title (as shortened under paragraph
(4)), and
``(B) the nomination of a facilitator under section 566(c)
of such title by not later than 10 days after the date of
appointment of the committee.
``(6) Preliminary committee report.--The negotiated
rulemaking committee appointed under paragraph (5) shall
report to the Secretary, by not later than January 1, 1998,
regarding the committee's progress on achieving a consensus
with regard to the rulemaking proceeding and whether such
consensus is likely to occur before one month before the
target date for publication of the rule. If the committee
reports that the committee has failed to make significant
progress towards such consensus or is unlikely to reach such
consensus by the target date, the Secretary may terminate
such process and provide for the publication of a rule under
this subsection through such other methods as the Secretary
may provide.
``(7) Final committee report.--If the committee is not
terminated under paragraph (6), the rulemaking committee
shall submit a report containing a proposed rule by not later
than one month before the target date of publication.
``(8) Interim, final effect.--The Secretary shall publish a
rule under this subsection in the Federal Register by not
later than the target date of publication. Such rule shall be
effective and final immediately on an interim basis, but is
subject to change and revision after public notice and
opportunity for a period (of not less than 60 days) for
public comment. In connection with such rule, the Secretary
shall specify the process for the timely review and approval
of applications of entities to be certified as provider-
sponsored organizations pursuant to such rules and consistent
with this subsection.
``(9) Publication of rule after public comment.--The
Secretary shall provide for consideration of such comments
and republication of such rule by not later than 1 year after
the target date of publication.
``(b) Establishment of Other Standards.--
``(1) In general.--The Secretary shall establish by
regulation other standards (not described in subsection (a))
for MedicarePlus organizations and plans consistent with, and
to carry out, this part.
``(2) Use of current standards.--Consistent with the
requirements of this part, standards established under this
subsection shall be based on standards established under
section 1876 to carry out analogous provisions of such
section.
``(3) Use of interim standards.--For the period in which
this part is in effect and standards are being developed and
established under the preceding provisions of this
subsection, the Secretary shall provide by not later than
June 1, 1998, for the application of such interim standards
(without regard to any requirements for notice and public
comment) as may be appropriate to provide for the expedited
implementation of this part. Such interim standards shall not
apply after the date standards are established under the
preceding provisions of this subsection.
``(4) Application of new standards to entities with a
contract.--In the case of a MedicarePlus organization with a
contract
[[Page H4507]]
in effect under this part at the time standards applicable to
the organization under this section are changed, the
organization may elect not to have such changes apply to the
organization until the end of the current contract year (or,
if there is less than 6 months remaining in the contract
year, until 1 year after the end of the current contract
year).
``(5) Relation to state laws.--The standards established
under this subsection shall supersede any State law or
regulation with respect to MedicarePlus plans which are
offered by MedicarePlus organizations under this part to the
extent such law or regulation is inconsistent with such
standards.
``contracts with medicareplus organizations
``Sec. 1857. (a) In General.--The Secretary shall not
permit the election under section 1851 of a MedicarePlus plan
offered by a MedicarePlus organization under this part, and
no payment shall be made under section 1853 to an
organization, unless the Secretary has entered into a
contract under this section with the organization with
respect to the offering of such plan. Such a contract with an
organization may cover more than one MedicarePlus plan. Such
contract shall provide that the organization agrees to comply
with the applicable requirements and standards of this part
and the terms and conditions of payment as provided for in
this part.
``(b) Minimum Enrollment Requirements.--
``(1) In general.--Subject to paragraphs (2) and (3), the
Secretary may not enter into a contract under this section
with a MedicarePlus organization unless the organization has
at least 5,000 individuals (or 1,500 individuals in the case
of an organization that is a provider-sponsored organization)
who are receiving health benefits through the organization,
except that the standards under section 1856 may permit the
organization to have a lesser number of beneficiaries (but
not less than 500 in the case of an organization that is a
provider-sponsored organization) if the organization
primarily serves individuals residing outside of urbanized
areas.
``(2) Exception for msa plan.--Paragraph (1) shall not
apply with respect to a contract that relates only to an MSA
plan.
``(3) Allowing transition.--The Secretary may waive the
requirement of paragraph (1) during the first 3 contract
years with respect to an organization.
``(c) Contract Period and Effectiveness.--
``(1) Period.--Each contract under this section shall be
for a term of at least one year, as determined by the
Secretary, and may be made automatically renewable from term
to term in the absence of notice by either party of intention
to terminate at the end of the current term.
``(2) Termination authority.--In accordance with procedures
established under subsection (h), the Secretary may at any
time terminate any such contract if the Secretary determines
that the organization--
``(A) has failed substantially to carry out the contract;
``(B) is carrying out the contract in a manner inconsistent
with the efficient and effective administration of this part;
or
``(C) no longer substantially meets the applicable
conditions of this part.
``(3) Effective date of contracts.--The effective date of
any contract executed pursuant to this section shall be
specified in the contract, except that in no case shall a
contract under this section which provides for coverage under
an MSA plan be effective before January 1999 with respect to
such coverage.
``(4) Previous terminations.--The Secretary may not enter
into a contract with a MedicarePlus organization if a
previous contract with that organization under this section
was terminated at the request of the organization within the
preceding five-year period, except in circumstances which
warrant special consideration, as determined by the
Secretary.
``(5) Contracting authority.--The authority vested in the
Secretary by this part may be performed without regard to
such provisions of law or regulations relating to the making,
performance, amendment, or modification of contracts of the
United States as the Secretary may determine to be
inconsistent with the furtherance of the purpose of this
title.
``(d) Protections Against Fraud and Beneficiary
Protections.--
``(1) Inspection and audit.--Each contract under this
section shall provide that the Secretary, or any person or
organization designated by the Secretary--
``(A) shall have the right to inspect or otherwise evaluate
(i) the quality, appropriateness, and timeliness of services
performed under the contract and (ii) the facilities of the
organization when there is reasonable evidence of some need
for such inspection, and
``(B) shall have the right to audit and inspect any books
and records of the MedicarePlus organization that pertain (i)
to the ability of the organization to bear the risk of
potential financial losses, or (ii) to services performed or
determinations of amounts payable under the contract.
``(2) Enrollee notice at time of termination.--Each
contract under this section shall require the organization to
provide (and pay for) written notice in advance of the
contract's termination, as well as a description of
alternatives for obtaining benefits under this title, to each
individual enrolled with the organization under this part.
``(3) Disclosure.--
``(A) In general.--Each MedicarePlus organization shall, in
accordance with regulations of the Secretary, report to the
Secretary financial information which shall include the
following:
``(i) Such information as the Secretary may require
demonstrating that the organization has a fiscally sound
operation.
``(ii) A copy of the report, if any, filed with the Health
Care Financing Administration containing the information
required to be reported under section 1124 by disclosing
entities.
``(iii) A description of transactions, as specified by the
Secretary, between the organization and a party in interest.
Such transactions shall include--
``(I) any sale or exchange, or leasing of any property
between the organization and a party in interest;
``(II) any furnishing for consideration of goods, services
(including management services), or facilities between the
organization and a party in interest, but not including
salaries paid to employees for services provided in the
normal course of their employment and health services
provided to members by hospitals and other providers and by
staff, medical group (or groups), individual practice
association (or associations), or any combination thereof;
and
``(III) any lending of money or other extension of credit
between an organization and a party in interest.
The Secretary may require that information reported
respecting an organization which controls, is controlled by,
or is under common control with, another entity be in the
form of a consolidated financial statement for the
organization and such entity.
``(B) Party in interest defined.--For the purposes of this
paragraph, the term `party in interest' means--
``(i) any director, officer, partner, or employee
responsible for management or administration of a
MedicarePlus organization, any person who is directly or
indirectly the beneficial owner of more than 5 percent of the
equity of the organization, any person who is the beneficial
owner of a mortgage, deed of trust, note, or other interest
secured by, and valuing more than 5 percent of the
organization, and, in the case of a MedicarePlus organization
organized as a nonprofit corporation, an incorporator or
member of such corporation under applicable State corporation
law;
``(ii) any entity in which a person described in clause
(i)--
``(I) is an officer or director;
``(II) is a partner (if such entity is organized as a
partnership);
``(III) has directly or indirectly a beneficial interest of
more than 5 percent of the equity; or
``(IV) has a mortgage, deed of trust, note, or other
interest valuing more than 5 percent of the assets of such
entity;
``(iii) any person directly or indirectly controlling,
controlled by, or under common control with an organization;
and
``(iv) any spouse, child, or parent of an individual
described in clause (i).
``(C) Access to information.--Each MedicarePlus
organization shall make the information reported pursuant to
subparagraph (A) available to its enrollees upon reasonable
request.
``(4) Loan information.--The contract shall require the
organization to notify the Secretary of loans and other
special financial arrangements which are made between the
organization and subcontractors, affiliates, and related
parties.
``(e) Additional Contract Terms.--
``(1) In general.--The contract shall contain such other
terms and conditions not inconsistent with this part
(including requiring the organization to provide the
Secretary with such information) as the Secretary may find
necessary and appropriate.
``(2) Cost-sharing in enrollment-related costs.--The
contract with a MedicarePlus organization shall require the
payment to the Secretary for the organization's pro rata
share (as determined by the Secretary) of the estimated costs
to be incurred by the Secretary in carrying out section 1851
(relating to enrollment and dissemination of information).
Such payments are appropriated to defray the costs described
in the preceding sentence, to remain available until
expended.
``(f) Prompt Payment by MedicarePlus Organization.--
``(1) Requirement.--A contract under this part shall
require a MedicarePlus organization to provide prompt payment
(consistent with the provisions of sections 1816(c)(2) and
1842(c)(2)) of claims submitted for services and supplies
furnished to individuals pursuant to the contract, if the
services or supplies are not furnished under a contract
between the organization and the provider or supplier.
``(2) Secretary's option to bypass noncomplying
organization.--In the case of a MedicarePlus eligible
organization which the Secretary determines, after notice and
opportunity for a hearing, has failed to make payments of
amounts in compliance with paragraph (1), the Secretary may
provide for direct payment of the amounts owed to providers
and suppliers for covered services and supplies furnished to
individuals enrolled under this part under the contract. If
the Secretary provides for the direct payments, the Secretary
shall provide for an appropriate reduction in the amount of
payments
[[Page H4508]]
otherwise made to the organization under this part to reflect
the amount of the Secretary's payments (and the Secretary's
costs in making the payments).
``(g) Intermediate Sanctions.--
``(1) In general.--If the Secretary determines that a
MedicarePlus organization with a contract under this
section--
``(A) fails substantially to provide medically necessary
items and services that are required (under law or under the
contract) to be provided to an individual covered under the
contract, if the failure has adversely affected (or has
substantial likelihood of adversely affecting) the
individual;
``(B) imposes net monthly premiums on individuals enrolled
under this part in excess of the net monthly premiums
permitted;
``(C) acts to expel or to refuse to re-enroll an individual
in violation of the provisions of this part;
``(D) engages in any practice that would reasonably be
expected to have the effect of denying or discouraging
enrollment (except as permitted by this part) by eligible
individuals with the organization whose medical condition or
history indicates a need for substantial future medical
services;
``(E) misrepresents or falsifies information that is
furnished--
``(i) to the Secretary under this part, or
``(ii) to an individual or to any other entity under this
part;
``(F) fails to comply with the requirements of section
1852(j)(3); or
``(G) employs or contracts with any individual or entity
that is excluded from participation under this title under
section 1128 or 1128A for the provision of health care,
utilization review, medical social work, or administrative
services or employs or contracts with any entity for the
provision (directly or indirectly) through such an excluded
individual or entity of such services;
the Secretary may provide, in addition to any other remedies
authorized by law, for any of the remedies described in
paragraph (2).
``(2) Remedies.--The remedies described in this paragraph
are--
``(A) civil money penalties of not more than $25,000 for
each determination under paragraph (1) or, with respect to a
determination under subparagraph (D) or (E)(i) of such
paragraph, of not more than $100,000 for each such
determination, plus, with respect to a determination under
paragraph (1)(B), double the excess amount charged in
violation of such paragraph (and the excess amount charged
shall be deducted from the penalty and returned to the
individual concerned), and plus, with respect to a
determination under paragraph (1)(D), $15,000 for each
individual not enrolled as a result of the practice involved,
``(B) suspension of enrollment of individuals under this
part after the date the Secretary notifies the organization
of a determination under paragraph (1) and until the
Secretary is satisfied that the basis for such determination
has been corrected and is not likely to recur, or
``(C) suspension of payment to the organization under this
part for individuals enrolled after the date the Secretary
notifies the organization of a determination under paragraph
(1) and until the Secretary is satisfied that the basis for
such determination has been corrected and is not likely to
recur.
``(3) Other intermediate sanctions.--In the case of a
MedicarePlus organization for which the Secretary makes a
determination under subsection (c)(2) the basis of which is
not described in paragraph (1), the Secretary may apply the
following intermediate sanctions:
``(A) Civil money penalties of not more than $25,000 for
each determination under subsection (c)(2) if the deficiency
that is the basis of the determination has directly adversely
affected (or has the substantial likelihood of adversely
affecting) an individual covered under the organization's
contract
``(B) Civil money penalties of not more than $10,000 for
each week beginning after the initiation of procedures by the
Secretary under subsection (g) during which the deficiency
that is the basis of a determination under subsection (c)(2)
exists.
``(C) Suspension of enrollment of individuals under this
part after the date the Secretary notifies the organization
of a determination under subsection (c)(2) and until the
Secretary is satisfied that the deficiency that is the basis
for the determination has been corrected and is not likely to
recur.
``(h) Procedures for Termination.--
``(1) In general.--The Secretary may terminate a contract
with a MedicarePlus organization under this section in
accordance with formal investigation and compliance
procedures established by the Secretary under which--
``(A) the Secretary provides the organization with the
reasonable opportunity to develop and implement a corrective
action plan to correct the deficiencies that were the basis
of the Secretary's determination under subsection (c)(2);
``(B) the Secretary provides the organization with
reasonable notice and opportunity for hearing (including the
right to appeal an initial decision) before terminating the
contract.
``(2) Civil money penalties.--The provisions of section
1128A (other than subsections (a) and (b)) shall apply to a
civil money penalty under subsection (f) or under paragraph
(2) or (3) of subsection (g) in the same manner as they apply
to a civil money penalty or proceeding under section
1128A(a).
``(3) Exception for imminent and serious risk to health.--
Paragraph (1) shall not apply if the Secretary determines
that a delay in termination, resulting from compliance with
the procedures specified in such paragraph prior to
termination, would pose an imminent and serious risk to the
health of individuals enrolled under this part with the
organization.
``definitions; miscellaneous provisions
``Sec. 1859. (a) Definitions Relating to MedicarePlus
Organizations.--In this part--
``(1) MedicarePlus organization.--The term `MedicarePlus
organization' means a public or private entity that is
certified under section 1856 as meeting the requirements and
standards of this part for such an organization.
``(2) Provider-sponsored organization.--The term `provider-
sponsored organization' is defined in section 1855(e)(1).
``(b) Definitions Relating to MedicarePlus Plans.--
``(1) MedicarePlus plan.--The term `MedicarePlus plan'
means health benefits coverage offered under a policy,
contract, or plan by a MedicarePlus organization pursuant to
and in accordance with a contract under section 1857.
``(2) MSA plan.--
``(A) In general.--The term `MSA plan' means a MedicarePlus
plan that--
``(i) provides reimbursement for at least the items and
services described in section 1852(a)(1) in a year but only
after the enrollee incurs countable expenses (as specified
under the plan) equal to the amount of an annual deductible
(described in subparagraph (B));
``(ii) counts as such expenses (for purposes of such
deductible) at least all amounts that would have been payable
under parts A and B, and that would have been payable by the
enrollee as deductibles, coinsurance, or copayments, if the
enrollee had elected to receive benefits through the
provisions of such parts; and
``(iii) provides, after such deductible is met for a year
and for all subsequent expenses for items and services
referred to in clause (i) in the year, for a level of
reimbursement that is not less than--
``(I) 100 percent of such expenses, or
``(II) 100 percent of the amounts that would have been paid
(without regard to any deductibles or coinsurance) under
parts A and B with respect to such expenses,
whichever is less.
``(B) Deductible.--The amount of annual deductible under an
MSA plan--
``(i) for contract year 1999 shall be not more than $6,000;
and
``(ii) for a subsequent contract year shall be not more
than the maximum amount of such deductible for the previous
contract year under this subparagraph increased by the
national per capita MedicarePlus growth percentage under
section 1853(c)(6) for the year.
If the amount of the deductible under clause (ii) is not a
multiple of $50, the amount shall be rounded to the nearest
multiple of $50.
``(c) Other References to Other Terms.--
``(1) MedicarePlus eligible individual.--The term
`MedicarePlus eligible individual' is defined in section
1851(a)(3).
``(2) MedicarePlus payment area.--The term `MedicarePlus
payment area' is defined in section 1853(d).
``(3) National per capita medicareplus growth percentage.--
The `national per capita MedicarePlus growth percentage' is
defined in section 1853(c)(6).
``(4) Monthly premium; net monthly premium.--The terms
`monthly premium' and `net monthly premium' are defined in
section 1854(a)(2).
``(d) Coordinated Acute and Long-term Care Benefits Under a
MedicarePlus Plan.--Nothing in this part shall be construed
as preventing a State from coordinating benefits under a
medicaid plan under title XIX with those provided under a
MedicarePlus plan in a manner that assures continuity of a
full-range of acute care and long-term care services to poor
elderly or disabled individuals eligible for benefits under
this title and under such plan.
``(e) Restriction on Enrollment for Certain MedicarePlus
Plans.--
``(1) In general.--In the case of a MedicarePlus religious
fraternal benefit society plan described in paragraph (2),
notwithstanding any other provision of this part to the
contrary and in accordance with regulations of the Secretary,
the society offering the plan may restrict the enrollment of
individuals under this part to individuals who are members of
the church, convention, or group described in paragraph
(3)(B) with which the society is affiliated.
``(2) Medicareplus religious fraternal benefit society plan
described.--For purposes of this subsection, a MedicarePlus
religious fraternal benefit society plan described in this
paragraph is a MedicarePlus plan described in section
1851(a)(2)(A) that--
``(A) is offered by a religious fraternal benefit society
described in paragraph (3) only to members of the church,
convention, or group described in paragraph (3)(B); and
``(B) permits all such members to enroll under the plan
without regard to health status-related factors.
Nothing in this subsection shall be construed as waiving any
plan requirements relating to financial solvency. In
developing solvency standards under section 1856, the
Secretary shall take into account open contract and
assessment features characteristic of fraternal insurance
certificates.
[[Page H4509]]
``(3) Religious fraternal benefit society defined.--For
purposes of paragraph (2)(A), a `religious fraternal benefit
society' described in this section is an organization that--
``(A) is exempt from Federal income taxation under section
501(c)(8) of the Internal Revenue Code of 1986;
``(B) is affiliated with, carries out the tenets of, and
shares a religious bond with, a church or convention or
association of churches or an affiliated group of churches;
``(C) offers, in addition to a MedicarePlus religious
fraternal benefit society plan, health coverage to
individuals not entitled to benefits under this title who are
members of such church, convention, or group; and
``(D) does not impose any limitation on membership in the
society based on any health status-related factor.
``(4) Payment adjustment.--Under regulations of the
Secretary, in the case of individuals enrolled under this
part under a MedicarePlus religious fraternal benefit society
plan described in paragraph (2), the Secretary shall provide
for such adjustment to the payment amounts otherwise
established under section 1854 as may be appropriate to
assure an appropriate payment level, taking into account the
actuarial characteristics and experience of such
individuals.''.
(b) Report on Coverage of Beneficiaries with End-Stage
Renal Disease.--The Secretary of Health and Human Services
shall provide for a study on the feasibility and impact of
removing the limitation under section 1851(b)(3)(B) of the
Social Security Act (as inserted by subsection (a)) on
eligibility of most individuals medically determined to have
end-stage renal disease to enroll in MedicarePlus plans. By
not later than October 1, 1998, the Secretary shall submit to
Congress a report on such study and shall include in the
report such recommendations regarding removing or restricting
the limitation as may be appropriate.
(c) Report on MedicarePlus Teaching Programs and Use of DSH
and Teaching Hospitals.--Based on the information provided to
the Secretary of Health and Human Services under section
1852(k) of the Social Security Act and such information as
the Secretary may obtain, by not later than October 1, 1999,
the Secretary shall submit to Congress a report on graduate
medical education programs operated by MedicarePlus
organizations and the extent to which MedicarePlus
organizations are providing for payments to hospitals
described in such section.
SEC. 10002. TRANSITIONAL RULES FOR CURRENT MEDICARE HMO
PROGRAM.
(a) Authorizing Transitional Waiver of 50:50 Rule.--Section
1876(f) (42 U.S.C. 1395mm(f)) is amended--
(1) in paragraph (2), by striking ``The Secretary'' and
inserting ``Subject to paragraph (4), the Secretary'', and
(2) by adding at the end the following new paragraph:
``(4) Effective for contract periods beginning after
December 31, 1996, the Secretary may waive or modify the
requirement imposed by paragraph (1) to the extent the
Secretary finds that it is in the public interest.''.
(b) Transition.--Section 1876 (42 U.S.C. 1395mm) is amended
by adding at the end the following new subsection:
``(k)(1) Except as provided in paragraph (3), the Secretary
shall not enter into, renew, or continue any risk-sharing
contract under this section with an eligible organization for
any contract year beginning on or after--
``(A) the date standards for MedicarePlus organizations and
plans are first established under section 1856 with respect
to MedicarePlus organizations that are insurers or health
maintenance organizations, or
``(B) in the case of such an organization with such a
contract in effect as of the date such standards were first
established, 1 year after such date.
``(2) The Secretary shall not enter into, renew, or
continue any risk-sharing contract under this section with an
eligible organization for any contract year beginning on or
after January 1, 2000.
``(3) An individual who is enrolled in part B only and is
enrolled in an eligible organization with a risk-sharing
contract under this section on December 31, 1998, may
continue enrollment in such organization in accordance with
regulations issued by not later then July 1, 1998.
``(4) Notwithstanding subsection (a), the Secretary shall
provide that payment amounts under risk-sharing contracts
under this section for months in a year (beginning with
January 1998) shall be computed--
``(A) with respect to individuals entitled to benefits
under both parts A and B, by substituting payment rates under
section 1853(a) for the payment rates otherwise established
under subsection 1876(a), and
``(B) with respect to individuals only entitled to benefits
under part B, by substituting an appropriate proportion of
such rates (reflecting the relative proportion of payments
under this title attributable to such part) for the payment
rates otherwise established under subsection (a).
For purposes of carrying out this paragraph for payments for
months in 1998, the Secretary shall compute, announce, and
apply the payment rates under section 1853(a)
(notwithstanding any deadlines specified in such section) in
as timely a manner as possible and may (to the extent
necessary) provide for retroactive adjustment in payments
made under this section not in accordance with such rates.''.
(c) Enrollment Transition Rule.--An individual who is
enrolled on December 31, 1998, with an eligible organization
under section 1876 of the Social Security Act (42 U.S.C.
1395mm) shall be considered to be enrolled with that
organization on January 1, 1999, under part C of title XVIII
of such Act if that organization has a contract under that
part for providing services on January 1, 1999 (unless the
individual has disenrolled effective on that date).
(d) Advance Directives.--Section 1866(f) (42 U.S.C.
1395cc(f)) is amended--
(1) in paragraph (1)--
(A) by inserting ``1855(i),'' after ``1833(s),'', and
(B) by inserting ``, MedicarePlus organization,'' after
``provider of services''; and
(2) in paragraph (2)(E), by inserting ``or a MedicarePlus
organization'' after ``section 1833(a)(1)(A)''.
(e) Extension of Provider Requirement.--Section
1866(a)(1)(O) (42 U.S.C. 1395cc(a)(1)(O)) is amended--
(1) by striking ``in the case of hospitals and skilled
nursing facilities,'';
(2) by striking ``inpatient hospital and extended care'';
(3) by inserting ``with a MedicarePlus organization under
part C or'' after ``any individual enrolled''; and
(4) by striking ``(in the case of hospitals) or limits (in
the case of skilled nursing facilities)''.
(f) Additional Conforming Changes.--
(1) Conforming references to previous part C.--Any
reference in law (in effect before the date of the enactment
of this Act) to part C of title XVIII of the Social Security
Act is deemed a reference to part D of such title (as in
effect after such date).
(2) Secretarial submission of legislative proposal.--Not
later than 90 days after the date of the enactment of this
Act, the Secretary of Health and Human Services shall submit
to the appropriate committees of Congress a legislative
proposal providing for such technical and conforming
amendments in the law as are required by the provisions of
this chapter.
(g) Immediate Effective Date for Certain Requirements for
Demonstrations.--Section 1857(e)(2) of the Social Security
Act (requiring contribution to certain costs related to the
enrollment process comparative materials) applies to
demonstrations with respect to which enrollment is effected
or coordinated under section 1851 of such Act.
(h) Use of Interim, Final Regulations.--In order to carry
out the amendments made by this chapter in a timely manner,
the Secretary of Health and Human Services may promulgate
regulations that take effect on an interim basis, after
notice and pending opportunity for public comment.
(i) Transition Rule for PSO Enrollment.--In applying
subsection (g)(1) of section 1876 of the Social Security Act
(42 U.S.C. 1395mm) to a risk-sharing contract entered into
with an eligible organization that is a provider-sponsored
organization (as defined in section 1855(e)(1) of such Act,
as inserted by section 10001) for a contract year beginning
on or after January 1, 1998, there shall be substituted for
the minimum number of enrollees provided under such section
the minimum number of enrollees permitted under section
1857(b)(1) of such Act (as so inserted).
SEC. 10003. CONFORMING CHANGES IN MEDIGAP PROGRAM.
(a) Conforming Amendments to MedicarePlus Changes.--
(1) In general.--Section 1882(d)(3)(A)(i) (42 U.S.C.
1395ss(d)(3)(A)(i)) is amended--
(A) in the matter before subclause (I), by inserting
``(including an individual electing a MedicarePlus plan under
section 1851)'' after ``of this title''; and
(B) in subclause (II)--
(i) by inserting ``in the case of an individual not
electing a MedicarePlus plan'' after ``(II)'', and
(ii) by inserting before the comma at the end the
following: ``or in the case of an individual electing a
MedicarePlus plan, a medicare supplemental policy with
knowledge that the policy duplicates health benefits to which
the individual is otherwise entitled under the MedicarePlus
plan or under another medicare supplemental policy''.
(2) Conforming amendments.--Section 1882(d)(3)(B)(i)(I) (42
U.S.C. 1395ss(d)(3)(B)(i)(I)) is amended by inserting
``(including any MedicarePlus plan)'' after ``health
insurance policies''.
(3) MedicarePlus plans not treated as medicare
supplementary policies.--Section 1882(g)(1) (42 U.S.C.
1395ss(g)(1)) is amended by inserting ``or a MedicarePlus
plan or'' after ``does not include''
(b) Additional Rules Relating to Individuals Enrolled in
MSA Plans.--Section 1882 (42 U.S.C. 1395ss) is further
amended by adding at the end the following new subsection:
``(u)(1) It is unlawful for a person to sell or issue a
policy described in paragraph (2) to an individual with
knowledge that the individual has in effect under section
1851 an election of an MSA plan.
``(2) A policy described in this subparagraph is a health
insurance policy that provides for coverage of expenses that
are otherwise required to be counted toward meeting the
annual deductible amount provided under the MSA plan.''.
Subchapter B--Special Rules for MedicarePlus Medical Savings Accounts
SEC. 10006. MEDICAREPLUS MSA.
(a) In General.--Part III of subchapter B of chapter 1 of
the Internal Revenue Code of
[[Page H4510]]
1986 (relating to amounts specifically excluded from gross
income) is amended by redesignating section 138 as section
139 and by inserting after section 137 the following new
section:
``SEC. 138. MEDICAREPLUS MSA.
``(a) Exclusion.--Gross income shall not include any
payment to the MedicarePlus MSA of an individual by the
Secretary of Health and Human Services under part C of title
XVIII of the Social Security Act.
``(b) MedicarePlus MSA.--For purposes of this section, the
term `MedicarePlus MSA' means a medical savings account (as
defined in section 220(d))--
``(1) which is designated as a MedicarePlus MSA,
``(2) with respect to which no contribution may be made
other than--
``(A) a contribution made by the Secretary of Health and
Human Services pursuant to part C of title XVIII of the
Social Security Act, or
``(B) a trustee-to-trustee transfer described in subsection
(c)(4),
``(3) the governing instrument of which provides that
trustee-to-trustee transfers described in subsection (c)(4)
may be made to and from such account, and
``(4) which is established in connection with an MSA plan
described in section 1859(b)(2) of the Social Security Act.
``(c) Special Rules for Distributions.--
``(1) Distributions for qualified medical expenses.--In
applying section 220 to a MedicarePlus MSA--
``(A) qualified medical expenses shall not include amounts
paid for medical care for any individual other than the
account holder, and
``(B) section 220(d)(2)(C) shall not apply.
``(2) Penalty for distributions from medicareplus msa not
used for qualified medical expenses if minimum balance not
maintained.--
``(A) In general.--The tax imposed by this chapter for any
taxable year in which there is a payment or distribution from
a MedicarePlus MSA which is not used exclusively to pay the
qualified medical expenses of the account holder shall be
increased by 50 percent of the excess (if any) of--
``(i) the amount of such payment or distribution, over
``(ii) the excess (if any) of--
``(I) the fair market value of the assets in such MSA as of
the close of the calendar year preceding the calendar year in
which the taxable year begins, over
``(II) an amount equal to 60 percent of the deductible
under the MedicarePlus MSA plan covering the account holder
as of January 1 of the calendar year in which the taxable
year begins.
Section 220(f)(2) shall not apply to any payment or
distribution from a MedicarePlus MSA.
``(B) Exceptions.--Subparagraph (A) shall not apply if the
payment or distribution is made on or after the date the
account holder--
``(i) becomes disabled within the meaning of section
72(m)(7), or
``(ii) dies.
``(C) Special rules.--For purposes of subparagraph (A)--
``(i) all MedicarePlus MSAs of the account holder shall be
treated as 1 account,
``(ii) all payments and distributions not used exclusively
to pay the qualified medical expenses of the account holder
during any taxable year shall be treated as 1 distribution,
and
``(iii) any distribution of property shall be taken into
account at its fair market value on the date of the
distribution.
``(3) Withdrawal of erroneous contributions.--Section
220(f)(2) and paragraph (2) of this subsection shall not
apply to any payment or distribution from a MedicarePlus MSA
to the Secretary of Health and Human Services of an erroneous
contribution to such MSA and of the net income attributable
to such contribution.
``(4) Trustee-to-trustee transfers.--Section 220(f)(2) and
paragraph (2) of this subsection shall not apply to any
trustee-to-trustee transfer from a MedicarePlus MSA of an
account holder to another MedicarePlus MSA of such account
holder.
``(d) Special Rules for Treatment of Account After Death of
Account Holder.--In applying section 220(f)(8)(A) to an
account which was a MedicarePlus MSA of a decedent, the rules
of section 220(f) shall apply in lieu of the rules of
subsection (c) of this section with respect to the spouse as
the account holder of such MedicarePlus MSA.
``(e) Reports.--In the case of a MedicarePlus MSA, the
report under section 220(h)--
``(1) shall include the fair market value of the assets in
such MedicarePlus MSA as of the close of each calendar year,
and
``(2) shall be furnished to the account holder--
``(A) not later than January 31 of the calendar year
following the calendar year to which such reports relate, and
``(B) in such manner as the Secretary prescribes in such
regulations.
``(f) Coordination With Limitation on Number of Taxpayers
Having Medical Savings Accounts.--Subsection (i) of section
220 shall not apply to an individual with respect to a
MedicarePlus MSA, and MedicarePlus MSA's shall not be taken
into account in determining whether the numerical limitations
under section 220(j) are exceeded.''
(b) Technical Amendments.--
(1) The last sentence of section 4973(d) of such Code is
amended by inserting ``or section 138(c)(3)'' after ``section
220(f)(3)''.
(2) Subsection (b) of section 220 of such Code is amended
by adding at the end the following new paragraph:
``(7) Medicare eligible individuals.--The limitation under
this subsection for any month with respect to an individual
shall be zero for the first month such individual is entitled
to benefits under title XVIII of the Social Security Act and
for each month thereafter.''
(3) The table of sections for part III of subchapter B of
chapter 1 of such Code is amended by striking the last item
and inserting the following:
``Sec. 138. MedicarePlus MSA.
``Sec. 139. Cross references to other Acts.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
1998.
CHAPTER 2--INTEGRATED LONG-TERM CARE PROGRAMS
Subchapter A--Programs of All-inclusive Care for the Elderly (PACE)
SEC. 10011. COVERAGE OF PACE UNDER THE MEDICARE PROGRAM.
Title XVIII (42 U.S.C. 1395 et seq.) is amended by adding
at the end the following new section:
``payments to, and coverage of benefits under, programs of all-
inclusive care for the elderly (pace)
``Sec. 1894. (a) Receipt of Benefits Through Enrollment in
PACE Program; Definitions for PACE Program Related Terms.--
``(1) Benefits through enrollment in a pace program.--In
accordance with this section, in the case of an individual
who is entitled to benefits under part A or enrolled under
part B and who is a PACE program eligible individual (as
defined in paragraph (5)) with respect to a PACE program
offered by a PACE provider under a PACE program agreement--
``(A) the individual may enroll in the program under this
section; and
``(B) so long as the individual is so enrolled and in
accordance with regulations--
``(i) the individual shall receive benefits under this
title solely through such program, and
``(ii) the PACE provider is entitled to payment under and
in accordance with this section and such agreement for
provision of such benefits.
``(2) PACE program defined.--For purposes of this section
and section 1932, the term `PACE program' means a program of
all-inclusive care for the elderly that meets the following
requirements:
``(A) Operation.--The entity operating the program is a
PACE provider (as defined in paragraph (3)).
``(B) Comprehensive benefits.--The program provides
comprehensive health care services to PACE program eligible
individuals in accordance with the PACE program agreement and
regulations under this section.
``(C) Transition.--In the case of an individual who is
enrolled under the program under this section and whose
enrollment ceases for any reason (including the individual no
longer qualifies as a PACE program eligible individual, the
termination of a PACE program agreement, or otherwise), the
program provides assistance to the individual in obtaining
necessary transitional care through appropriate referrals and
making the individual's medical records available to new
providers.
``(3) PACE provider defined.--
``(A) In general.--For purposes of this section, the term
`PACE provider' means an entity that--
``(i) subject to subparagraph (B), is (or is a distinct
part of) a public entity or a private, nonprofit entity
organized for charitable purposes under section 501(c)(3) of
the Internal Revenue Code of 1986, and
``(ii) has entered into a PACE program agreement with
respect to its operation of a PACE program.
``(B) Treatment of private, for-profit providers.--Clause
(i) of subparagraph (A) shall not apply--
``(i) to entities subject to a demonstration project waiver
under subsection (h); and
``(ii) after the date the report under section 10014(b) of
the Balanced Budget Act of 1997 is submitted, unless the
Secretary determines that any of the findings described in
subparagraph (A), (B), (C) or (D) of paragraph (2) of such
section are true.
``(4) PACE program agreement defined.--For purposes of this
section, the term `PACE program agreement' means, with
respect to a PACE provider, an agreement, consistent with
this section, section 1932 (if applicable), and regulations
promulgated to carry out such sections, between the PACE
provider and the Secretary, or an agreement between the PACE
provider and a State administering agency for the operation
of a PACE program by the provider under such sections.
``(5) PACE program eligible individual defined.--For
purposes of this section, the term `PACE program eligible
individual' means, with respect to a PACE program, an
individual who--
``(A) is 55 years of age or older;
``(B) subject to subsection (c)(4), is determined under
subsection (c) to require the level of care required under
the State medicaid plan for coverage of nursing facility
services;
``(C) resides in the service area of the PACE program; and
[[Page H4511]]
``(D) meets such other eligibility conditions as may be
imposed under the PACE program agreement for the program
under subsection (e)(2)(A)(ii).
``(6) PACE protocol.--For purposes of this section, the
term `PACE protocol' means the Protocol for the Program of
All-inclusive Care for the Elderly (PACE), as published by On
Lok, Inc., as of April 14, 1995.
``(7) PACE demonstration waiver program defined.--For
purposes of this section, the term `PACE demonstration waiver
program' means a demonstration program under either of the
following sections (as in effect before the date of their
repeal):
``(A) Section 603(c) of the Social Security Amendments of
1983 (Public Law 98-21), as extended by section 9220 of the
Consolidated Omnibus Budget Reconciliation Act of 1985
(Public Law 99-272).
``(B) Section 9412(b) of the Omnibus Budget Reconciliation
Act of 1986 (Public Law 99-509).
``(8) State administering agency defined.--For purposes of
this section, the term `State administering agency' means,
with respect to the operation of a PACE program in a State,
the agency of that State (which may be the single agency
responsible for administration of the State plan under title
XIX in the State) responsible for administering PACE program
agreements under this section and section 1932 in the State.
``(9) Trial period defined.--
``(A) In general.--For purposes of this section, the term
`trial period' means, with respect to a PACE program operated
by a PACE provider under a PACE program agreement, the first
3 contract years under such agreement with respect to such
program.
``(B) Treatment of entities previously operating pace
demonstration waiver programs.--Each contract year (including
a year occurring before the effective date of this section)
during which an entity has operated a PACE demonstration
waiver program shall be counted under subparagraph (A) as a
contract year during which the entity operated a PACE program
as a PACE provider under a PACE program agreement.
``(10) Regulations.--For purposes of this section, the term
`regulations' refers to interim final or final regulations
promulgated under subsection (f) to carry out this section
and section 1932.
``(b) Scope of Benefits; Beneficiary Safeguards.--
``(1) In general.--Under a PACE program agreement, a PACE
provider shall--
``(A) provide to PACE program eligible individuals,
regardless of source of payment and directly or under
contracts with other entities, at a minimum--
``(i) all items and services covered under this title (for
individuals enrolled under this section) and all items and
services covered under title XIX, but without any limitation
or condition as to amount, duration, or scope and without
application of deductibles, copayments, coinsurance, or other
cost-sharing that would otherwise apply under this title or
such title, respectively; and
``(ii) all additional items and services specified in
regulations, based upon those required under the PACE
protocol;
``(B) provide such enrollees access to necessary covered
items and services 24 hours per day, every day of the year;
``(C) provide services to such enrollees through a
comprehensive, multidisciplinary health and social services
delivery system which integrates acute and long-term care
services pursuant to regulations; and
``(D) specify the covered items and services that will not
be provided directly by the entity, and to arrange for
delivery of those items and services through contracts
meeting the requirements of regulations.
``(2) Quality assurance; patient safeguards.--The PACE
program agreement shall require the PACE provider to have in
effect at a minimum--
``(A) a written plan of quality assurance and improvement,
and procedures implementing such plan, in accordance with
regulations, and
``(B) written safeguards of the rights of enrolled
participants (including a patient bill of rights and
procedures for grievances and appeals) in accordance with
regulations and with other requirements of this title and
Federal and State law designed for the protection of
patients.
``(c) Eligibility Determinations.--
``(1) In general.--The determination of whether an
individual is a PACE program eligible individual--
``(A) shall be made under and in accordance with the PACE
program agreement, and
``(B) who is entitled to medical assistance under title
XIX, shall be made (or who is not so entitled, may be made)
by the State administering agency.
``(2) Condition.--An individual is not a PACE program
eligible individual (with respect to payment under this
section) unless the individual's health status has been
determined, in accordance with regulations, to be comparable
to the health status of individuals who have participated in
the PACE demonstration waiver programs. Such determination
shall be based upon information on health status and related
indicators (such as medical diagnoses and measures of
activities of daily living, instrumental activities of daily
living, and cognitive impairment) that are part of a uniform
minimum data set collected by PACE providers on potential
eligible individuals.
``(3) Annual eligibility recertifications.--
``(A) In general.--Subject to subparagraph (B), the
determination described in subsection (a)(5)(B) for an
individual shall be reevaluated at least once a year.
``(B) Exception.--The requirement of annual reevaluation
under subparagraph (A) may be waived during a period in
accordance with regulations in those cases where the State
administering agency determines that there is no reasonable
expectation of improvement or significant change in an
individual's condition during the period because of the
advanced age, severity of the advanced age, severity of
chronic condition, or degree of impairment of functional
capacity of the individual involved.
``(4) Continuation of eligibility.--An individual who is a
PACE program eligible individual may be deemed to continue to
be such an individual notwithstanding a determination that
the individual no longer meets the requirement of subsection
(a)(5)(B) if, in accordance with regulations, in the absence
of continued coverage under a PACE program the individual
reasonably would be expected to meet such requirement within
the succeeding 6-month period.
``(5) Enrollment; disenrollment.--The enrollment and
disenrollment of PACE program eligible individuals in a PACE
program shall be pursuant to regulations and the PACE program
agreement and shall permit enrollees to voluntarily disenroll
without cause at any time.
``(d) Payments to PACE Providers on a Capitated Basis.--
``(1) In general.--In the case of a PACE provider with a
PACE program agreement under this section, except as provided
in this subsection or by regulations, the Secretary shall
make prospective monthly payments of a capitation amount for
each PACE program eligible individual enrolled under the
agreement under this section in the same manner and from the
same sources as payments are made to a MedicarePlus
organization under section 1854 (or, for periods beginning
before January 1, 1999, to an eligible organization under a
risk-sharing contract under section 1876). Such payments
shall be subject to adjustment in the manner described in
section 1854(a)(2) or section 1876(a)(1)(E), as the case may
be.
``(2) Capitation amount.--The capitation amount to be
applied under this subsection for a provider for a contract
year shall be an amount specified in the PACE program
agreement for the year. Such amount shall be based upon
payment rates established for purposes of payment under
section 1854 (or, for periods before January 1, 1999, for
purposes of risk-sharing contracts under section 1876) and
shall be adjusted to take into account the comparative
frailty of PACE enrollees and such other factors as the
Secretary determines to be appropriate. Such amount under
such an agreement shall be computed in a manner so that the
total payment level for all PACE program eligible individuals
enrolled under a program is less than the projected payment
under this title for a comparable population not enrolled
under a PACE program.
``(e) PACE Program Agreement.--
``(1) Requirement.--
``(A) In general.--The Secretary, in close cooperation with
the State administering agency, shall establish procedures
for entering into, extending, and terminating PACE program
agreements for the operation of PACE programs by entities
that meet the requirements for a PACE provider under this
section, section 1932, and regulations.
``(B) Numerical limitation.--
``(i) In general.--The Secretary shall not permit the
number of PACE providers with which agreements are in effect
under this section or under section 9412(b) of the Omnibus
Budget Reconciliation Act of 1986 to exceed--
``(I) 40 as of the date of the enactment of this section,
or
``(II) as of each succeeding anniversary of such date, the
numerical limitation under this subparagraph for the
preceding year plus 20.
Subclause (II) shall apply without regard to the actual
number of agreements in effect as of a previous anniversary
date.
``(ii) Treatment of certain private, for-profit
providers.--The numerical limitation in clause (i) shall not
apply to a PACE provider that--
``(I) is operating under a demonstration project waiver
under subsection (h), or
``(II) was operating under such a waiver and subsequently
qualifies for PACE provider status pursuant to subsection
(a)(3)(B)(ii).
``(2) Service area and eligibility.--
``(A) In general.--A PACE program agreement for a PACE
program--
``(i) shall designate the service area of the program;
``(ii) may provide additional requirements for individuals
to qualify as PACE program eligible individuals with respect
to the program;
``(iii) shall be effective for a contract year, but may be
extended for additional contract years in the absence of a
notice by a party to terminate and is subject to termination
by the Secretary and the State administering agency at any
time for cause (as provided under the agreement);
``(iv) shall require a PACE provider to meet all applicable
State and local laws and requirements; and
``(v) shall have such additional terms and conditions as
the parties may agree to consistent with this section and
regulations.
``(B) Service area overlap.--In designating a service area
under a PACE program
[[Page H4512]]
agreement under subparagraph (A)(i), the Secretary (in
consultation with the State administering agency) may exclude
from designation an area that is already covered under
another PACE program agreement, in order to avoid unnecessary
duplication of services and avoid impairing the financial and
service viability of an existing program.
``(3) Data collection.--
``(A) In general.--Under a PACE program agreement, the PACE
provider shall--
``(i) collect data,
``(ii) maintain, and afford the Secretary and the State
administering agency access to, the records relating to the
program, including pertinent financial, medical, and
personnel records, and
``(iii) make to the Secretary and the State administering
agency reports that the Secretary finds (in consultation with
State administering agencies) necessary to monitor the
operation, cost, and effectiveness of the PACE program under
this title and title XIX.
``(B) Requirements during trial period.--During the first
three years of operation of a PACE program (either under this
section or under a PACE demonstration waiver program), the
PACE provider shall provide such additional data as the
Secretary specifies in regulations in order to perform the
oversight required under paragraph (4)(A).
``(4) Oversight.--
``(A) Annual, close oversight during trial period.--During
the trial period (as defined in subsection (a)(9)) with
respect to a PACE program operated by a PACE provider, the
Secretary (in cooperation with the State administering
agency) shall conduct a comprehensive annual review of the
operation of the PACE program by the provider in order to
assure compliance with the requirements of this section and
regulations. Such a review shall include--
``(i) an on-site visit to the program site;
``(ii) comprehensive assessment of a provider's fiscal
soundness;
``(iii) comprehensive assessment of the provider's capacity
to provide all PACE services to all enrolled participants;
``(iv) detailed analysis of the entity's substantial
compliance with all significant requirements of this section
and regulations; and
``(v) any other elements the Secretary or State agency
considers necessary or appropriate.
``(B) Continuing oversight.--After the trial period, the
Secretary (in cooperation with the State administering
agency) shall continue to conduct such review of the
operation of PACE providers and PACE programs as may be
appropriate, taking into account the performance level of a
provider and compliance of a provider with all significant
requirements of this section and regulations.
``(C) Disclosure.--The results of reviews under this
paragraph shall be reported promptly to the PACE provider,
along with any recommendations for changes to the provider's
program, and shall be made available to the public upon
request.
``(5) Termination of pace provider agreements.--
``(A) In general.--Under regulations--
``(i) the Secretary or a State administering agency may
terminate a PACE program agreement for cause, and
``(ii) a PACE provider may terminate such an agreement
after appropriate notice to the Secretary, the State agency,
and enrollees.
``(B) Causes for termination.--In accordance with
regulations establishing procedures for termination of PACE
program agreements, the Secretary or a State administering
agency may terminate a PACE program agreement with a PACE
provider for, among other reasons, the fact that--
``(i) the Secretary or State administering agency
determines that--
``(I) there are significant deficiencies in the quality of
care provided to enrolled participants; or
``(II) the provider has failed to comply substantially with
conditions for a program or provider under this section or
section 1932; and
``(ii) the entity has failed to develop and successfully
initiate, within 30 days of the date of the receipt of
written notice of such a determination, and continue
implementation of a plan to correct the deficiencies.
``(C) Termination and transition procedures.--An entity
whose PACE provider agreement is terminated under this
paragraph shall implement the transition procedures required
under subsection (a)(2)(C).
``(6) Secretary's oversight; enforcement authority.--
``(A) In general.--Under regulations, if the Secretary
determines (after consultation with the State administering
agency) that a PACE provider is failing substantially to
comply with the requirements of this section and regulations,
the Secretary (and the State administering agency) may take
any or all of the following actions:
``(i) Condition the continuation of the PACE program
agreement upon timely execution of a corrective action plan.
``(ii) Withhold some or all further payments under the PACE
program agreement under this section or section 1932 with
respect to PACE program services furnished by such provider
until the deficiencies have been corrected.
``(iii) Terminate such agreement.
``(B) Application of intermediate sanctions.--Under
regulations, the Secretary may provide for the application
against a PACE provider of remedies described in section
1857(f)(2) (or, for periods before January 1, 1999, section
1876(i)(6)(B)) or 1903(m)(5)(B) in the case of violations by
the provider of the type described in section 1857(f)(1) (or
1876(i)(6)(A) for such periods) or 1903(m)(5)(A),
respectively (in relation to agreements, enrollees, and
requirements under this section or section 1932,
respectively).
``(7) Procedures for termination or imposition of
sanctions.--Under regulations, the provisions of section
1857(g) (or for periods before January 1, 1999, section
1876(i)(9)) shall apply to termination and sanctions
respecting a PACE program agreement and PACE provider under
this subsection in the same manner as they apply to a
termination and sanctions with respect to a contract and a
MedicarePlus organization under part C (or for such periods
an eligible organization under section 1876).
``(8) Timely consideration of applications for pace program
provider status.--In considering an application for PACE
provider program status, the application shall be deemed
approved unless the Secretary, within 90 days after the date
of the submission of the application to the Secretary, either
denies such request in writing or informs the applicant in
writing with respect to any additional information that is
needed in order to make a final determination with respect to
the application. After the date the Secretary receives such
additional information, the application shall be deemed
approved unless the Secretary, within 90 days of such date,
denies such request.
``(f) Regulations.--
``(1) In general.--The Secretary shall issue interim final
or final regulations to carry out this section and section
1932.
``(2) Use of pace protocol.--
``(A) In general.--In issuing such regulations, the
Secretary shall, to the extent consistent with the provisions
of this section, incorporate the requirements applied to PACE
demonstration waiver programs under the PACE protocol.
``(B) Flexibility.--The Secretary (in close consultation
with State administering agencies) may modify or waive such
provisions of the PACE protocol in order to provide for
reasonable flexibility in adapting the PACE service delivery
model to the needs of particular organizations (such as those
in rural areas or those that may determine it appropriate to
use non-staff physicians accordingly to State licensing law
requirements) under this section and section 1932 where such
flexibility is not inconsistent with and would not impair the
essential elements, objectives, and requirements of the this
section, including--
``(i) the focus on frail elderly qualifying individuals who
require the level of care provided in a nursing facility;
``(ii) the delivery of comprehensive, integrated acute and
long-term care services;
``(iii) the interdisciplinary team approach to care
management and service delivery;
``(iv) capitated, integrated financing that allows the
provider to pool payments received from public and private
programs and individuals; and
``(v) the assumption by the provider over time of full
financial risk.
``(3) Application of certain additional beneficiary and
program protections.--
``(A) In general.--In issuing such regulations and subject
to subparagraph (B), the Secretary may apply with respect to
PACE programs, providers, and agreements such requirements of
part C (or, for periods before January 1, 1999, section 1876)
and section 1903(m) relating to protection of beneficiaries
and program integrity as would apply to MedicarePlus
organizations under part C (or for such periods eligible
organizations under risk-sharing contracts under section
1876) and to health maintenance organizations under prepaid
capitation agreements under section 1903(m).
``(B) Considerations.--In issuing such regulations, the
Secretary shall--
``(i) take into account the differences between populations
served and benefits provided under this section and under
part C (or, for periods before January 1, 1999, section 1876)
and section 1903(m);
``(ii) not include any requirement that conflicts with
carrying out PACE programs under this section; and
``(iii) not include any requirement restricting the
proportion of enrollees who are eligible for benefits under
this title or title XIX.
``(g) Waivers of Requirements.--With respect to carrying
out a PACE program under this section, the following
requirements of this title (and regulations relating to such
requirements) are waived and shall not apply:
``(1) Section 1812, insofar as it limits coverage of
institutional services.
``(2) Sections 1813, 1814, 1833, and 1886, insofar as such
sections relate to rules for payment for benefits.
``(3) Sections 1814(a)(2)(B), 1814(a)(2)(C), and
1835(a)(2)(A), insofar as they limit coverage of extended
care services or home health services.
``(4) Section 1861(i), insofar as it imposes a 3-day prior
hospitalization requirement for coverage of extended care
services.
``(5) Sections 1862(a)(1) and 1862(a)(9), insofar as they
may prevent payment for PACE program services to individuals
enrolled under PACE programs.
``(h) Demonstration Project for For-Profit Entities.--
``(1) In general.--In order to demonstrate the operation of
a PACE program by a private, for-profit entity, the Secretary
(in close consultation with State administering
[[Page H4513]]
agencies) shall grant waivers from the requirement under
subsection (a)(3) that a PACE provider may not be a for-
profit, private entity.
``(2) Similar terms and conditions.--
``(A) In general.--Except as provided under subparagraph
(B), and paragraph (1), the terms and conditions for
operation of a PACE program by a provider under this
subsection shall be the same as those for PACE providers that
are nonprofit, private organizations.
``(B) Numerical limitation.--The number of programs for
which waivers are granted under this subsection shall not
exceed 10. Programs with waivers granted under this
subsection shall not be counted against the numerical
limitation specified in subsection (e)(1)(B).
``(i) Construction.--Nothing in this section or section
1932 shall be construed as preventing a PACE provider from
entering into contracts with other governmental or
nongovernmental payers for the care of PACE program eligible
individuals who are not eligible for benefits under part A,
or enrolled under part B, or eligible for medical assistance
under title XIX.''.
SEC. 10012. ESTABLISHMENT OF PACE PROGRAM AS MEDICAID STATE
OPTION.
(a) In General.--Title XIX is amended--
(1) in section 1905(a) (42 U.S.C. 1396d(a))--
(A) by striking ``and'' at the end of paragraph (24);
(B) by redesignating paragraph (25) as paragraph (26); and
(C) by inserting after paragraph (24) the following new
paragraph:
``(25) services furnished under a PACE program under
section 1932 to PACE program eligible individuals enrolled
under the program under such section; and'';
(2) by redesignating section 1932, as redesignated by
section 114(a) of Public Law 104-193, as section 1933, and
(3) by inserting after section 1931 the following new
section:
``SEC. 1932. PROGRAM OF ALL-INCLUSIVE CARE FOR THE ELDERLY
(PACE).
``(a) Option.--
``(1) In general.--A State may elect to provide medical
assistance under this section with respect to PACE program
services to PACE program eligible individuals who are
eligible for medical assistance under the State plan and who
are enrolled in a PACE program under a PACE program
agreement. Such individuals need not be eligible for benefits
under part A, or enrolled under part B, of title XVIII to be
eligible to enroll under this section.
``(2) Benefits through enrollment in pace program.--In the
case of an individual enrolled with a PACE program pursuant
to such an election--
``(A) the individual shall receive benefits under the plan
solely through such program, and
``(B) the PACE provider shall receive payment in accordance
with the PACE program agreement for provision of such
benefits.
``(3) Application of definitions.--The definitions of terms
under section 1894(a) shall apply under this section in the
same manner as they apply under section 1894.
``(b) Application of Medicare Terms and Conditions.--Except
as provided in this section, the terms and conditions for the
operation and participation of PACE program eligible
individuals in PACE programs offered by PACE providers under
PACE program agreements under section 1894 shall apply for
purposes of this section.
``(c) Adjustment in Payment Amounts.--In the case of
individuals enrolled in a PACE program under this section,
the amount of payment under this section shall not be the
amount calculated under section 1894(d), but shall be an
amount, specified under the PACE agreement, which is less
than the amount that would otherwise have been made under the
State plan if the individuals were not so enrolled. The
payment under this section shall be in addition to any
payment made under section 1894 for individuals who are
enrolled in a PACE program under such section.
``(d) Waivers of Requirements.--With respect to carrying
out a PACE program under this section, the following
requirements of this title (and regulations relating to such
requirements) shall not apply:
``(1) Section 1902(a)(1), relating to any requirement that
PACE programs or PACE program services be provided in all
areas of a State.
``(2) Section 1902(a)(10), insofar as such section relates
to comparability of services among different population
groups.
``(3) Sections 1902(a)(23) and 1915(b)(4), relating to
freedom of choice of providers under a PACE program.
``(4) Section 1903(m)(2)(A), insofar as it restricts a PACE
provider from receiving prepaid capitation payments.
``(e) Post-Eligibility Treatment of Income.--A State may
provide for post-eligibility treatment of income for
individuals enrolled in PACE programs under this section in
the same manner as a State treats post-eligibility income for
individuals receiving services under a waiver under section
1915(c).''.
(b) Conforming Amendments.--
(1) Section 1902(j) (42 U.S.C. 1396a(j)) is amended by
striking ``(25)'' and inserting ``(26)''.
(2) Section 1924(a)(5) (42 U.S.C. 1396r-5(a)(5)) is
amended--
(A) in the heading, by striking ``from organizations
receiving certain waivers'' and inserting ``under pace
programs'', and
(B) by striking ``from any organization'' and all that
follows and inserting ``under a PACE demonstration waiver
program (as defined in subsection (a)(7) of section 1894) or
under a PACE program under section 1932.''.
(3) Section 1903(f)(4)(C) (42 U.S.C. 1396b(f)(4)(C)) is
amended by inserting ``or who is a PACE program eligible
individual enrolled in a PACE program under section 1932,''
after ``section 1902(a)(10)(A),''.
SEC. 10013. EFFECTIVE DATE; TRANSITION.
(a) Timely Issuance of Regulations; Effective Date.--The
Secretary of Health and Human Services shall promulgate
regulations to carry out this subchapter in a timely manner.
Such regulations shall be designed so that entities may
establish and operate PACE programs under sections 1894 and
1932 for periods beginning not later than 1 year after the
date of the enactment of this Act.
(b) Expansion and Transition for PACE Demonstration Project
Waivers.--
(1) Expansion in current number and extension of
demonstration projects.--Section 9412(b) of the Omnibus
Budget Reconciliation Act of 1986, as amended by section
4118(g) of the Omnibus Budget Reconciliation Act of 1987, is
amended--
(A) in paragraph (1), by inserting before the period at the
end the following: ``, except that the Secretary shall grant
waivers of such requirements to up to the applicable
numerical limitation specified in section 1894(e)(1)(B) of
the Social Security Act''; and
(B) in paragraph (2)--
(i) in subparagraph (A), by striking ``, including
permitting the organization to assume progressively (over the
initial 3-year period of the waiver) the full financial
risk''; and
(ii) in subparagraph (C), by adding at the end the
following: ``In granting further extensions, an organization
shall not be required to provide for reporting of information
which is only required because of the demonstration nature of
the project.''.
(2) Elimination of replication requirement.--Subparagraph
(B) of paragraph (2) of such section shall not apply to
waivers granted under such section after the date of the
enactment of this Act.
(3) Timely consideration of applications.--In considering
an application for waivers under such section before the
effective date of repeals under subsection (c), subject to
the numerical limitation under the amendment made by
paragraph (1), the application shall be deemed approved
unless the Secretary of Health and Human Services, within 90
days after the date of its submission to the Secretary,
either denies such request in writing or informs the
applicant in writing with respect to any additional
information which is needed in order to make a final
determination with respect to the application. After the date
the Secretary receives such additional information, the
application shall be deemed approved unless the Secretary,
within 90 days of such date, denies such request.
(c) Priority and Special Consideration in Application.--
During the 3-year period beginning on the date of the
enactment of this Act:
(1) Provider status.--The Secretary of Health and Human
Services shall give priority, in processing applications of
entities to qualify as PACE programs under section 1894 or
1932 of the Social Security Act--
(A) first, to entities that are operating a PACE
demonstration waiver program (as defined in section
1894(a)(7) of such Act), and
(B) then entities that have applied to operate such a
program as of May 1, 1997.
(2) New waivers.--The Secretary shall give priority, in the
awarding of additional waivers under section 9412(b) of the
Omnibus Budget Reconciliation Act of 1986--
(A) to any entities that have applied for such waivers
under such section as of May 1, 1997; and
(B) to any entity that, as of May 1, 1997, has formally
contracted with a State to provide services for which payment
is made on a capitated basis with an understanding that the
entity was seeking to become a PACE provider.
(3) Special consideration.--The Secretary shall give
special consideration, in the processing of applications
described in paragraph (1) and the awarding of waivers
described in paragraph (2), to an entity which as of May 1,
1997 through formal activities (such as entering into
contracts for feasibility studies) has indicated a specific
intent to become a PACE provider.
(d) Repeal of Current PACE Demonstration Project Waiver
Authority.--
(1) In general.--Subject to paragraph (2), the following
provisions of law are repealed:
(A) Section 603(c) of the Social Security Amendments of
1983 (Public Law 98-21).
(B) Section 9220 of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (Public Law 99-272).
(C) Section 9412(b) of the Omnibus Budget Reconciliation
Act of 1986 (Public Law 99-509).
(2) Delay in application.--
(A) In general.--Subject to subparagraph (B), the repeals
made by paragraph (1) shall not apply to waivers granted
before the initial effective date of regulations described in
subsection (a).
(B) Application to approved waivers.--Such repeals shall
apply to waivers granted before such date only after allowing
such organizations a transition period (of up to 24 months)
in order to permit sufficient time for an orderly transition
from demonstration
[[Page H4514]]
project authority to general authority provided under the
amendments made by this subchapter.
SEC. 10014. STUDY AND REPORTS.
(a) Study.--
(1) In general.--The Secretary of Health and Human Services
(in close consultation with State administering agencies, as
defined in section 1894(a)(8) of the Social Security Act)
shall conduct a study of the quality and cost of providing
PACE program services under the medicare and medicaid
programs under the amendments made by this subchapter.
(2) Study of private, for-profit providers.--Such study
shall specifically compare the costs, quality, and access to
services by entities that are private, for-profit entities
operating under demonstration projects waivers granted under
section 1894(h) of the Social Security Act with the costs,
quality, and access to services of other PACE providers.
(b) Report.--
(1) In general.--Not later than 4 years after the date of
the enactment of this Act, the Secretary shall provide for a
report to Congress on the impact of such amendments on
quality and cost of services. The Secretary shall include in
such report such recommendations for changes in the operation
of such amendments as the Secretary deems appropriate.
(2) Treatment of private, for-profit providers.--The report
shall include specific findings on whether any of the
following findings is true:
(A) The number of covered lives enrolled with entities
operating under demonstration project waivers under section
1894(h) of the Social Security Act is fewer than 800 (or such
lesser number as the Secretary may find statistically
sufficient to make determinations respecting findings
described in the succeeding subparagraphs).
(B) The population enrolled with such entities is less
frail than the population enrolled with other PACE providers.
(C) Access to or quality of care for individuals enrolled
with such entities is lower than such access or quality for
individuals enrolled with other PACE providers.
(D) The application of such section has resulted in an
increase in expenditures under the medicare or medicaid
programs above the expenditures that would have been made if
such section did not apply.
(c) Information Included in Annual Recommendations.--The
Medicare Payment Advisory Commission shall include in its
annual report under section 1805(b)(1)(B) of the Social
Security Act recommendations on the methodology and level of
payments made to PACE providers under section 1894(d) of such
Act and on the treatment of private, for-profit entities as
PACE providers.
Subchapter B--Social Health Maintenance Organizations
SEC. 10015. SOCIAL HEALTH MAINTENANCE ORGANIZATIONS (SHMOS).
(a) Extension of Demonstration Project Authorities.--
Section 4018(b) of the Omnibus Budget Reconciliation Act of
1987 is amended--
(1) in paragraph (1), by striking ``1997'' and inserting
``2000'', and
(2) in paragraph (4), by striking ``1998'' and inserting
``2001''.
(b) Expansion of Cap.--Section 13567(c) of the Omnibus
Budget Reconciliation Act of 1993 is amended by striking
``12,000'' and inserting ``36,000''.
(b) Report on Integration and Transition.--
(1) In general.--The Secretary of Health and Human Services
shall submit to Congress, by not later than January 1, 1999,
a plan for the integration of health plans offered by social
health maintenance organizations (including SHMO I and SHMO
II sites developed under section 2355 of the Deficit
Reduction Act of 1984 and under the amendment made by section
4207(b)(3)(B)(i) of OBRA-1990, respectively) and similar
plans as an option under the MedicarePlus program under part
C of title XVIII of the Social Security Act.
(2) Provision for transition.--Such plan shall include a
transition for social health maintenance organizations
operating under demonstration project authority under such
section.
(3) Payment policy.--The report shall also include
recommendations on appropriate payment levels for plans
offered by such organizations, including an analysis of the
application of risk adjustment factors appropriate to the
population served by such organizations.
Subchapter C--Other Programs
SEC. 10018. ORDERLY TRANSITION OF MUNICIPAL HEALTH SERVICE
DEMONSTRATION PROJECTS.
Section 9215 of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended by section 6135 of
OBRA-1989 and section 13557 of OBRA-1993, is further
amended--
(1) by inserting ``(a)'' before ``The Secretary'', and
(2) by adding at the end the following: ``Subject to
subsection (c), the Secretary may further extend such
demonstration projects through December 31, 2000, but only
with respect to individuals are enrolled with such projects
before January 1, 1998.
``(b) The Secretary shall work with each such demonstration
project to develop a plan, to be submitted to the Committee
on Ways and Means of the House of Representatives and the
Committee on Finance of the Senate by March 31, 1998, for the
orderly transition of demonstration projects and the project
enrollees to a non-demonstration project health care delivery
system, such as through integration with private or public
health plan, including a medicaid managed care or
MedicarePlus plan.
``(c) A demonstration project under subsection (a) which
does not develop and submit a transition plan under
subsection (b) by March 31, 1998, or, if later, 6 months
after the date of the enactment of this Act, shall be
discontinued as of December 31, 1998. The Secretary shall
provide appropriate technical assistance to assist in the
transition so that disruption of medical services to project
enrollees may be minimized.''.
SEC. 10019. EXTENSION OF CERTAIN MEDICARE COMMUNITY NURSING
ORGANIZATION DEMONSTRATION PROJECTS.
Notwithstanding any other provision of law, demonstration
projects conducted under section 4079 of the Omnibus Budget
Reconciliation Act of 1987 may be conducted for an additional
period of 2 years, and the deadline for any report required
relating to the results of such projects shall be not later
than 6 months before the end of such additional period.
CHAPTER 3--MEDICARE PAYMENT ADVISORY COMMISSION
SEC. 10021. MEDICARE PAYMENT ADVISORY COMMISSION.
(a) In General.--Title XVIII is amended by inserting after
section 1804 the following new section:
``medicare payment advisory commission
``Sec. 1805. (a) Establishment.--There is hereby
established the Medicare Payment Advisory Commission (in this
section referred to as the `Commission').
``(b) Duties.--
``(1) Review of payment policies and annual reports.--The
Commission shall--
``(A) review payment policies under this title, including
the topics described in paragraph (2);
``(B) make recommendations to Congress concerning such
payment policies;
``(C) by not later than March 1 of each year (beginning
with 1998), submit a report to Congress containing the
results of such reviews and its recommendations concerning
such policies; and
``(D) by not later than June 1 of each year (beginning with
1998), submit a report to Congress containing an examination
of issues affecting the medicare program, including the
implications of changes in health care delivery in the United
States and in the market for health care services on the
medicare program.
``(2) Specific topics to be reviewed.--
``(A) Medicareplus program.--Specifically, the Commission
shall review, with respect to the MedicarePlus program under
part C, the following:
``(i) The methodology for making payment to plans under
such program, including the making of differential payments
and the distribution of differential updates among different
payment areas.
``(ii) The mechanisms used to adjust payments for risk and
the need to adjust such mechanisms to take into account
health status of beneficiaries.
``(iii) The implications of risk selection both among
MedicarePlus organizations and between the MedicarePlus
option and the medicare fee-for-service option.
``(iv) The development and implementation of mechanisms to
assure the quality of care for those enrolled with
MedicarePlus organizations.
``(v) The impact of the MedicarePlus program on access to
care for medicare beneficiaries.
``(vi) Other major issues in implementation and further
development of the MedicarePlus program.
``(B) Fee-for-service system.--Specifically, the Commission
shall review payment policies under parts A and B,
including--
``(i) the factors affecting expenditures for services in
different sectors, including the process for updating
hospital, skilled nursing facility, physician, and other
fees,
``(ii) payment methodologies, and
``(iii) their relationship to access and quality of care
for medicare beneficiaries.
``(C) Interaction of medicare payment policies with health
care delivery generally.--Specifically, the Commission shall
review the effect of payment policies under this title on the
delivery of health care services other than under this title
and assess the implications of changes in health care
delivery in the United States and in the general market for
health care services on the medicare program.
``(3) Comments on certain secretarial reports.--If the
Secretary submits to Congress (or a committee of Congress) a
report that is required by law and that relates to payment
policies under this title, the Secretary shall transmit a
copy of the report to the Commission. The Commission shall
review the report and, not later than 6 months after the date
of submittal of the Secretary's report to Congress, shall
submit to the appropriate committees of Congress written
comments on such report. Such comments may include such
recommendations as the Commission deems appropriate.
``(4) Agenda and additional reviews.--The Commission shall
consult periodically with the chairmen and ranking minority
members of the appropriate committees of Congress regarding
the Commission's agenda and progress towards achieving the
agenda. The Commission may conduct additional reviews,
[[Page H4515]]
and submit additional reports to the appropriate committees
of Congress, from time to time on such topics relating to the
program under this title as may be requested by such chairmen
and members and as the Commission deems appropriate.
``(5) Availability of reports.--The Commission shall
transmit to the Secretary a copy of each report submitted
under this subsection and shall make such reports available
to the public.
``(6) Appropriate committees.--For purposes of this
section, the term `appropriate committees of Congress' means
the Committees on Ways and Means and Commerce of the House of
Representatives and the Committee on Finance of the Senate.
``(c) Membership.--
``(1) Number and appointment.--The Commission shall be
composed of 19 members appointed by the Comptroller General.
``(2) Qualifications.--
``(A) In general.--The membership of the Commission shall
include individuals with national recognition for their
expertise in health finance and economics, actuarial science,
health facility management, health plans and integrated
delivery systems, reimbursement of health facilities,
allopathic and osteopathic physicians, and other providers of
health services, and other related fields, who provide a mix
of different professionals, broad geographic representation,
and a balance between urban and rural representatives.
``(B) Inclusion.--The membership of the Commission shall
include (but not be limited to) physicians and other health
professionals, employers, third party payers, individuals
skilled in the conduct and interpretation of biomedical,
health services, and health economics research and expertise
in outcomes and effectiveness research and technology
assessment. Such membership shall also include
representatives of consumers and the elderly.
``(C) Majority nonproviders.--Individuals who are directly
involved in the provision, or management of the delivery, of
items and services covered under this title shall not
constitute a majority of the membership of the Commission.
``(D) Ethical disclosure.--The Comptroller General shall
establish a system for public disclosure by members of the
Commission of financial and other potential conflicts of
interest relating to such members.
``(3) Terms.--
``(A) In general.--The terms of members of the Commission
shall be for 3 years except that the Comptroller General
shall designate staggered terms for the members first
appointed.
``(B) Vacancies.--Any member appointed to fill a vacancy
occurring before the expiration of the term for which the
member's predecessor was appointed shall be appointed only
for the remainder of that term. A member may serve after the
expiration of that member's term until a successor has taken
office. A vacancy in the Commission shall be filled in the
manner in which the original appointment was made.
``(4) Compensation.--While serving on the business of the
Commission (including traveltime), a member of the Commission
shall be entitled to compensation at the per diem equivalent
of the rate provided for level IV of the Executive Schedule
under section 5315 of title 5, United States Code; and while
so serving away from home and member's regular place of
business, a member may be allowed travel expenses, as
authorized by the Chairman of the Commission. Physicians
serving as personnel of the Commission may be provided a
physician comparability allowance by the Commission in the
same manner as Government physicians may be provided such an
allowance by an agency under section 5948 of title 5, United
States Code, and for such purpose subsection (i) of such
section shall apply to the Commission in the same manner as
it applies to the Tennessee Valley Authority. For purposes of
pay (other than pay of members of the Commission) and
employment benefits, rights, and privileges, all personnel of
the Commission shall be treated as if they were employees of
the United States Senate.
``(5) Chairman; vice chairman.--The Comptroller General
shall designate a member of the Commission, at the time of
appointment of the member, as Chairman and a member as Vice
Chairman for that term of appointment.
``(6) Meetings.--The Commission shall meet at the call of
the Chairman.
``(d) Director and Staff; Experts and Consultants.--Subject
to such review as the Comptroller General deems necessary to
assure the efficient administration of the Commission, the
Commission may--
``(1) employ and fix the compensation of an Executive
Director (subject to the approval of the Comptroller General)
and such other personnel as may be necessary to carry out its
duties (without regard to the provisions of title 5, United
States Code, governing appointments in the competitive
service);
``(2) seek such assistance and support as may be required
in the performance of its duties from appropriate Federal
departments and agencies;
``(3) enter into contracts or make other arrangements, as
may be necessary for the conduct of the work of the
Commission (without regard to section 3709 of the Revised
Statutes (41 U.S.C. 5));
``(4) make advance, progress, and other payments which
relate to the work of the Commission;
``(5) provide transportation and subsistence for persons
serving without compensation; and
``(6) prescribe such rules and regulations as it deems
necessary with respect to the internal organization and
operation of the Commission.
``(e) Powers.--
``(1) Obtaining official data.--The Commission may secure
directly from any department or agency of the United States
information necessary to enable it to carry out this section.
Upon request of the Chairman, the head of that department or
agency shall furnish that information to the Commission on an
agreed upon schedule.
``(2) Data collection.--In order to carry out its
functions, the Commission shall--
``(A) utilize existing information, both published and
unpublished, where possible, collected and assessed either by
its own staff or under other arrangements made in accordance
with this section,
``(B) carry out, or award grants or contracts for, original
research and experimentation, where existing information is
inadequate, and
``(C) adopt procedures allowing any interested party to
submit information for the Commission's use in making reports
and recommendations.
``(3) Access of gao to information.--The Comptroller
General shall have unrestricted access to all deliberations,
records, and nonproprietary data of the Commission,
immediately upon request.
``(4) Periodic audit.--The Commission shall be subject to
periodic audit by the Comptroller General.
``(f) Authorization of Appropriations.--
``(1) Request for appropriations.--The Commission shall
submit requests for appropriations in the same manner as the
Comptroller General submits requests for appropriations, but
amounts appropriated for the Commission shall be separate
from amounts appropriated for the Comptroller General.
``(2) Authorization.--There are authorized to be
appropriated such sums as may be necessary to carry out the
provisions of this section. 60 percent of such appropriation
shall be payable from the Federal Hospital Insurance Trust
Fund, and 40 percent of such appropriation shall be payable
from the Federal Supplementary Medical Insurance Trust
Fund.''.
(b) Abolition of ProPAC and PPRC.--
(1) Propac.--
(A) In general.--Section 1886(e) (42 U.S.C. 1395ww(e)) is
amended--
(i) by striking paragraphs (2) and (6); and
(ii) in paragraph (3), by striking ``(A) The Commission''
and all that follows through ``(B)''.
(B) Conforming amendment.--Section 1862 (42 U.S.C. 1395y)
is amended by striking ``Prospective Payment Assessment
Commission'' each place it appears in subsection (a)(1)(D)
and subsection (i) and inserting ``Medicare Payment Advisory
Commission''.
(2) PPRC.--
(A) In general.--Title XVIII is amended by striking section
1845 (42 U.S.C. 1395w-1).
(B) Elimination of certain reports.--Section 1848 (42
U.S.C. 1395w-4) is amended--
(i) by striking subparagraph (F) of subsection (d)(2),
(ii) by striking subparagraph (B) of subsection (f)(1), and
(iii) in subsection (f)(3), by striking ``Physician Payment
Review Commission,''.
(C) Conforming amendments.--Section 1848 (42 U.S.C. 1395w-
4) is amended by striking ``Physician Payment Review
Commission'' and inserting ``Medicare Payment Advisory
Commission'' each place it appears in subsections
(c)(2)(B)(iii), (g)(6)(C), and (g)(7)(C).
(c) Effective Date; Transition.--
(1) In general.--The Comptroller General shall first
provide for appointment of members to the Medicare Payment
Advisory Commission (in this subsection referred to as
``MedPAC'') by not later than September 30, 1997.
(2) Transition.--As quickly as possible after the date a
majority of members of MedPAC are first appointed, the
Comptroller General, in consultation with the Prospective
Payment Assessment Commission (in this subsection referred to
as ``ProPAC'') and the Physician Payment Review Commission
(in this subsection referred to as ``PPRC''), shall provide
for the termination of the ProPAC and the PPRC. As of the
date of termination of the respective Commissions, the
amendments made by paragraphs (1) and (2), respectively, of
subsection (b) become effective. The Comptroller General, to
the extent feasible, shall provide for the transfer to the
MedPAC of assets and staff of the ProPAC and the PPRC,
without any loss of benefits or seniority by virtue of such
transfers. Fund balances available to the ProPAC or the PPRC
for any period shall be available to the MedPAC for such
period for like purposes.
(3) Continuing responsibility for reports.--The MedPAC
shall be responsible for the preparation and submission of
reports required by law to be submitted (and which have not
been submitted by the date of establishment of the MedPAC) by
the ProPAC and the PPRC, and, for this purpose, any reference
in law to either such Commission is deemed, after the
appointment of the MedPAC, to refer to the MedPAC.
CHAPTER 4--MEDIGAP PROTECTIONS
SEC. 10031. MEDIGAP PROTECTIONS.
(a) Guaranteeing Issue Without Preexisting Conditions for
Continuously Covered Individuals.--Section 1882(s) (42 U.S.C.
1395ss(s)) is amended--
[[Page H4516]]
(1) in paragraph (3), by striking ``paragraphs (1) and
(2)'' and inserting ``this subsection'',
(2) by redesignating paragraph (3) as paragraph (4), and
(3) by inserting after paragraph (2) the following new
paragraph:
``(3)(A) The issuer of a medicare supplemental policy--
``(i) may not deny or condition the issuance or
effectiveness of a medicare supplemental policy described in
subparagraph (C) that is offered and is available for
issuance to new enrollees by such issuer;
``(ii) may not discriminate in the pricing of such policy,
because of health status, claims experience, receipt of
health care, or medical condition; and
``(iii) may not impose an exclusion of benefits based on a
pre-existing condition under such policy,
in the case of an individual described in subparagraph (B)
who seeks to enroll under the policy not later than 63 days
after the date of the termination of enrollment described in
such subparagraph and who submits evidence of the date of
termination or disenrollment along with the application for
such medicare supplemental policy.
``(B) An individual described in this subparagraph is an
individual described in any of the following clauses:
``(i) The individual is enrolled under an employee welfare
benefit plan that provides health benefits that supplement
the benefits under this title and the plan terminates or
ceases to provide all such supplemental health benefits to
the individual.
``(ii) The individual is enrolled with a MedicarePlus
organization under a MedicarePlus plan under part C, and
there are circumstances permitting discontinuance of the
individual's election of the plan under section 1851(c)(4).
``(iii) The individual is enrolled with an eligible
organization under a contract under section 1876, a similar
organization operating under demonstration project authority,
with an organization under an agreement under section
1833(a)(1)(A), or with an organization under a policy
described in subsection (t), and such enrollment ceases under
the same circumstances that would permit discontinuance of an
individual's election of coverage under section 1851(c)(4)
and, in the case of a policy described in subsection (t),
there is no provision under applicable State law for the
continuation of coverage under such policy.
``(iv) The individual is enrolled under a medicare
supplemental policy under this section and such enrollment
ceases because--
``(I) of the bankruptcy or insolvency of the issuer or
because of other involuntary termination of coverage or
enrollment under such policy and there is no provision under
applicable State law for the continuation of such coverage;
``(II) the issuer of the policy substantially violated a
material provision of the policy; or
``(III) the issuer (or an agent or other entity acting on
the issuer's behalf) materially misrepresented the policy's
provisions in marketing the policy to the individual.
``(v) The individual--
``(I) was enrolled under a medicare supplemental policy
under this section,
``(II) subsequently terminates such enrollment and enrolls,
for the first time, with any MedicarePlus organization under
a MedicarePlus plan under part C, any eligible organization
under a contract under section 1876, any similar organization
operating under demonstration project authority, any
organization under an agreement under section 1833(a)(1)(A),
or any policy described in subsection (t), and
``(III) the subsequent enrollment under subclause (II) is
terminated by the enrollee during the first 6 months (or 3
months for terminations occurring on or after January 1,
2003) of such enrollment.
``(C)(i) Subject to clauses (ii) and (iii), a medicare
supplemental policy described in this subparagraph has a
benefit package classified as `A', `B', `C', or `F' under the
standards established under subsection (p)(2).
``(ii) Only for purposes of an individual described in
subparagraph (B)(v), a medicare supplemental policy described
in this subparagraph also includes (if available from the
same issuer) the same medicare supplemental policy referred
to in such subparagraph in which the individual was most
recently previously enrolled.
``(iii) For purposes of applying this paragraph in the case
of a State that provides for offering of benefit packages
other than under the classification referred to in clause
(i), the references to benefit packages in such clause are
deemed references to comparable benefit packages offered in
such State.
``(D) At the time of an event described in subparagraph (B)
because of which an individual ceases enrollment or loses
coverage or benefits under a contract or agreement, policy,
or plan, the organization that offers the contract or
agreement, the insurer offering the policy, or the
administrator of the plan, respectively, shall notify the
individual of the rights of the individual, and obligations
of issuers of medicare supplemental policies, under
subparagraph (A).''.
(b) Limitation on Imposition of Preexisting Condition
Exclusion During Initial Open Enrollment Period.--Section
1882(s)(2) (42 U.S.C. 1395ss(s)(2)) is amended--
(1) in subparagraph (B), by striking ``subparagraph (C)''
and inserting ``subparagraphs (C) and (D)'', and
(2) by adding at the end the following new subparagraph:
``(D) In the case of a policy issued during the 6-month
period described in subparagraph (A) to an individual who is
65 years of age or older as of the date of issuance and who
as of the date of the application for enrollment has a
continuous period of creditable coverage (as defined in
2701(c) of the Public Health Service Act) of--
``(i) at least 6 months, the policy may not exclude
benefits based on a pre-existing condition; or
``(ii) of less than 6 months, if the policy excludes
benefits based on a preexisting condition, the policy shall
reduce the period of any preexisting condition exclusion by
the aggregate of the periods of creditable coverage (if any,
as so defined) applicable to the individual as of the
enrollment date.
The Secretary shall specify the manner of the reduction under
clause (ii), based upon the rules used by the Secretary in
carrying out section 2701(a)(3) of such Act.''.
(c) Effective Dates.--
(1) Guaranteed issue.--The amendment made by subsection (a)
shall take effect on July 1, 1998.
(2) Limit on preexisting condition exclusions.--The
amendment made by subsection (b) shall apply to policies
issued on or after July 1, 1998.
(d) Transition Provisions.--
(1) In general.--If the Secretary of Health and Human
Services identifies a State as requiring a change to its
statutes or regulations to conform its regulatory program to
the changes made by this section, the State regulatory
program shall not be considered to be out of compliance with
the requirements of section 1882 of the Social Security Act
due solely to failure to make such change until the date
specified in paragraph (4).
(2) NAIC standards.--If, within 9 months after the date of
the enactment of this Act, the National Association of
Insurance Commissioners (in this subsection referred to as
the ``NAIC'') modifies its NAIC Model Regulation relating to
section 1882 of the Social Security Act (referred to in such
section as the 1991 NAIC Model Regulation, as modified
pursuant to section 171(m)(2) of the Social Security Act
Amendments of 1994 (Public Law 103-432) and as modified
pursuant to section 1882(d)(3)(A)(vi)(IV) of the Social
Security Act, as added by section 271(a) of the Health
Insurance Portability and Accountability Act of 1996 (Public
Law 104-191) to conform to the amendments made by this
section, such revised regulation incorporating the
modifications shall be considered to be the applicable NAIC
model regulation (including the revised NAIC model regulation
and the 1991 NAIC Model Regulation) for the purposes of such
section.
(3) Secretary standards.--If the NAIC does not make the
modifications described in paragraph (2) within the period
specified in such paragraph, the Secretary of Health and
Human Services shall make the modifications described in such
paragraph and such revised regulation incorporating the
modifications shall be considered to be the appropriate
Regulation for the purposes of such section.
(4) Date specified.--
(A) In general.--Subject to subparagraph (B), the date
specified in this paragraph for a State is the earlier of--
(i) the date the State changes its statutes or regulations
to conform its regulatory program to the changes made by this
section, or
(ii) 1 year after the date the NAIC or the Secretary first
makes the modifications under paragraph (2) or (3),
respectively.
(B) Additional legislative action required.--In the case of
a State which the Secretary identifies as--
(i) requiring State legislation (other than legislation
appropriating funds) to conform its regulatory program to the
changes made in this section, but
(ii) having a legislature which is not scheduled to meet in
1999 in a legislative session in which such legislation may
be considered,
the date specified in this paragraph is the first day of the
first calendar quarter beginning after the close of the first
legislative session of the State legislature that begins on
or after July 1, 1999. For purposes of the previous sentence,
in the case of a State that has a 2-year legislative session,
each year of such session shall be deemed to be a separate
regular session of the State legislature.
SEC. 10032. MEDICARE PREPAID COMPETITIVE PRICING
DEMONSTRATION PROJECT.
(a) Establishment of Project.--The Secretary of Health and
Human Services shall provide, beginning not later than 1 year
after the date of the enactment of this Act, for
implementation of a project (in this section referred to as
the ``project'') to demonstrate the application of, and the
consequences of applying, a market-oriented pricing system
for the provision of a full range of medicare benefits in a
geographic area.
(b) Research Design Advisory Committee.--
(1) In general.--Before implementing the project under this
section, the Secretary shall appoint a national advisory
committee, including independent actuaries and individuals
with expertise in competitive health plan pricing, to make
recommendations to the Secretary concerning the appropriate
research design for implementing the project.
(2) Initial recommendations.--The committee initially shall
submit recommendations respecting the method for area
selection, benefit design among plans offered,
[[Page H4517]]
structuring choice among health plans offered, methods for
setting the price to be paid to plans, collection of plan
information (including information concerning quality and
access to care), information dissemination, and methods of
evaluating the results of the project.
(3) Advice during implementation.--Upon implementation of
the project, the committee shall continue to advise the
Secretary on the application of the design in different areas
and changes in the project based on experience with its
operations.
(c) Area Selection.--
(1) In general.--Taking into account the recommendations of
the advisory committee submitted under subsection (b), the
Secretary shall designate areas in which the project will
operate.
(2) Appointment of area advisory committee.--Upon the
designation of an area for inclusion in the project, the
Secretary shall appoint an area advisory committee, composed
of representatives of health plans, providers, and medicare
beneficiaries in the area, to advise the Secretary concerning
how the project will actually be implemented in the area.
Such advice may include advice concerning the marketing and
pricing of plans in the area and other salient factors
relating.
(d) Monitoring and Report.--
(1) Monitoring impact.--Taking into consideration the
recommendations of the general advisory committee (appointed
under subsection (b)), the Secretary shall closely monitor
the impact of projects in areas on the price and quality of,
and access to, medicare covered services, choice of health
plan, changes in enrollment, and other relevant factors.
(2) Report.--The Secretary shall periodically report to
Congress on the progress under the project under this
section.
(e) Waiver Authority.--The Secretary of Health and Human
Services may waive such requirements of section 1876 (and
such requirements of part C of title XVIII, as amended by
chapter 1), of the Social Security Act as may be necessary
for the purposes of carrying out the project.
CHAPTER 5--TAX TREATMENT OF HOSPITALS PARTICIPATING IN PROVIDER-
SPONSORED ORGANIZATIONS
SEC. 10041. TAX TREATMENT OF HOSPITALS WHICH PARTICIPATE IN
PROVIDER-SPONSORED ORGANIZATIONS.
(a) In General.--Section 501 of the Internal Revenue Code
of 1986 (relating to exemption from tax on corporations,
certain trusts, etc.) is amended by redesignating subsection
(o) as subsection (p) and by inserting after subsection (n)
the following new subsection:
``(o) Treatment of Hospitals Participating in Provider-
Sponsored Organizations.--An organization shall not fail to
be treated as organized and operated exclusively for a
charitable purpose for purposes of subsection (c)(3) solely
because a hospital which is owned and operated by such
organization participates in a provider-sponsored
organization (as defined in section 1853(e) of the Social
Security Act), whether or not the provider-sponsored
organization is exempt from tax. For purposes of subsection
(c)(3), any person with a material financial interest in such
a provider-sponsored organization shall be treated as a
private shareholder or individual with respect to the
hospital.''
(b) Effective Date.--The amendment made by subsection (a)
shall take effect on the date of the enactment of this Act.
Subtitle B--Prevention Initiatives
SEC. 10101. SCREENING MAMMOGRAPHY.
(a) Providing Annual Screening Mammography for Women Over
Age 39.--Section 1834(c)(2)(A) (42 U.S.C. 1395m(c)(2)(A)) is
amended--
(1) in clause (iii), to read as follows:
``(iii) In the case of a woman over 39 years of age,
payment may not be made under this part for screening
mammography performed within 11 months following the month in
which a previous screening mammography was performed.''; and
(2) by striking clauses (iv) and (v).
(b) Waiver of Deductible.--The first sentence of section
1833(b) (42 U.S.C. 1395l(b)) is amended--
(1) by striking ``and'' before ``(4)'', and
(2) by inserting before the period at the end the
following: ``, and (5) such deductible shall not apply with
respect to screening mammography (as described in section
1861(jj))''.
(c) Conforming Amendment.--Section 1834(c)(1)(C) of such
Act (42 U.S.C. 1395m(c)(1)(C)) is amended by striking ``,
subject to the deductible established under section
1833(b),''.
(d) Effective Date.--The amendments made by this section
shall apply to items and services furnished on or after
January 1, 1998.
SEC. 10102. SCREENING PAP SMEAR AND PELVIC EXAMS.
(a) Coverage of Pelvic Exam; Increasing Frequency of
Coverage of Pap Smear.--Section 1861(nn) (42 U.S.C.
1395x(nn)) is amended--
(1) in the heading, by striking ``Smear'' and inserting
``Smear; Screening Pelvic Exam'';
(2) by inserting ``or vaginal'' after ``cervical'' each
place it appears;
(3) by striking ``(nn)'' and inserting ``(nn)(1)'';
(4) by striking ``3 years'' and all that follows and
inserting ``3 years, or during the preceding year in the case
of a woman described in paragraph (3).''; and
(5) by adding at the end the following new paragraphs:
``(2) The term `screening pelvic exam' means an pelvic
examination provided to a woman if the woman involved has not
had such an examination during the preceding 3 years, or
during the preceding year in the case of a woman described in
paragraph (3), and includes a clinical breast examination.
``(3) A woman described in this paragraph is a woman who--
``(A) is of childbearing age and has not had a test
described in this subsection during each of the preceding 3
years that did not indicate the presence of cervical or
vaginal cancer; or
``(B) is at high risk of developing cervical or vaginal
cancer (as determined pursuant to factors identified by the
Secretary).''.
(b) Waiver of Deductible.--The first sentence of section
1833(b) (42 U.S.C. 1395l(b)), as amended by section 10101(b),
is amended--
(1) by striking ``and'' before ``(5)'', and
(2) by inserting before the period at the end the
following: ``, and (6) such deductible shall not apply with
respect to screening pap smear and screening pelvic exam (as
described in section 1861(nn))''.
(c) Conforming Amendments.--Sections 1861(s)(14) and
1862(a)(1)(F) (42 U.S.C. 1395x(s)(14), 1395y(a)(1)(F)) are
each amended by inserting ``and screening pelvic exam'' after
``screening pap smear''.
(d) Payment Under Physician Fee Schedule.--Section
1848(j)(3)(42 U.S.C. 1395w-4(j)(3)) is amended by striking
``and (4)'' and inserting ``(4) and (14) (with respect to
services described in section 1861(nn)(2))''.
(e) Effective Date.--The amendments made by this section
shall apply to items and services furnished on or after
January 1, 1998.
SEC. 10103. PROSTATE CANCER SCREENING TESTS.
(a) Coverage.--Section 1861 (42 U.S.C. 1395x) is amended--
(1) in subsection (s)(2)--
(A) by striking ``and'' at the end of subparagraphs (N) and
(O), and
(B) by inserting after subparagraph (O) the following new
subparagraph:
``(P) prostate cancer screening tests (as defined in
subsection (oo)); and''; and
(2) by adding at the end the following new subsection:
``Prostate Cancer Screening Tests
``(oo)(1) The term `prostate cancer screening test' means a
test that consists of any (or all) of the procedures
described in paragraph (2) provided for the purpose of early
detection of prostate cancer to a man over 50 years of age
who has not had such a test during the preceding year.
``(2) The procedures described in this paragraph are as
follows:
``(A) A digital rectal examination.
``(B) A prostate-specific antigen blood test.
``(C) For years beginning after 2001, such other procedures
as the Secretary finds appropriate for the purpose of early
detection of prostate cancer, taking into account changes in
technology and standards of medical practice, availability,
effectiveness, costs, and such other factors as the Secretary
considers appropriate.''.
(b) Payment for Prostate-specific Antigen Blood Test Under
Clinical Diagnostic Laboratory Test Fee Schedules.--Section
1833(h)(1)(A) (42 U.S.C. 1395l(h)(1)(A)) is amended by
inserting after ``laboratory tests'' the following:
``(including prostate cancer screening tests under section
1861(oo) consisting of prostate-specific antigen blood
tests)''.
(c) Conforming Amendment.--Section 1862(a) (42 U.S.C.
1395y(a)) is amended--
(1) in paragraph (1)--
(A) in subparagraph (E), by striking ``and'' at the end,
(B) in subparagraph (F), by striking the semicolon at the
end and inserting ``, and'', and
(C) by adding at the end the following new subparagraph:
``(G) in the case of prostate cancer screening tests (as
defined in section 1861(oo)), which are performed more
frequently than is covered under such section;''; and
(2) in paragraph (7), by striking ``paragraph (1)(B) or
under paragraph (1)(F)'' and inserting ``subparagraphs (B),
(F), or (G) of paragraph (1)''.
(d) Payment Under Physician Fee Schedule.--Section
1848(j)(3)(42 U.S.C. 1395w-4(j)(3)), as amended by section
10102, is amended by inserting ``, (2)(P) (with respect to
services described in subparagraphs (A) and (C) of section
1861(oo)'' after ``(2)(G)''
(e) Effective Date.--The amendments made by this section
shall apply to items and services furnished on or after
January 1, 1998.
SEC. 10104. COVERAGE OF COLORECTAL SCREENING.
(a) Coverage.--
(1) In general.--Section 1861 (42 U.S.C. 1395x), as amended
by section 10103(a), is amended--
(A) in subsection (s)(2)--
(i) by striking ``and'' at the end of subparagraph (P);
(ii) by adding ``and'' at the end of subparagraph (Q); and
(iii) by adding at the end the following new subparagraph:
``(R) colorectal cancer screening tests (as defined in
subsection (pp)); and''; and
(B) by adding at the end the following new subsection:
[[Page H4518]]
``Colorectal Cancer Screening Tests
``(pp)(1) The term `colorectal cancer screening test' means
any of the following procedures furnished to an individual
for the purpose of early detection of colorectal cancer:
``(A) Screening fecal-occult blood test.
``(B) Screening flexible sigmoidoscopy.
``(C) In the case of an individual at high risk for
colorectal cancer, screening colonoscopy.
``(D) Screening barium enema, if found by the Secretary to
be an appropriate alternative to screening flexible
sigmoidoscopy under subparagraph (B) or screening colonoscopy
under subparagraph (C).
``(E) For years beginning after 2002, such other procedures
as the Secretary finds appropriate for the purpose of early
detection of colorectal cancer, taking into account changes
in technology and standards of medical practice,
availability, effectiveness, costs, and such other factors as
the Secretary considers appropriate.
``(2) In paragraph (1)(C), an `individual at high risk for
colorectal cancer' is an individual who, because of family
history, prior experience of cancer or precursor neoplastic
polyps, a history of chronic digestive disease condition
(including inflammatory bowel disease, Crohn's Disease, or
ulcerative colitis), the presence of any appropriate
recognized gene markers for colorectal cancer, or other
predisposing factors, faces a high risk for colorectal
cancer.''.
(2) Deadline for decision on coverage of screening barium
enema.--Not later than 2 years after the date of the
enactment of this section, the Secretary of Health and Human
Services shall issue and publish a determination on the
treatment of screening barium enema as a colorectal cancer
screening test under section 1861(pp) (as added by
subparagraph (B)) as an alternative procedure to a screening
flexible sigmoidoscopy or screening colonoscopy.
(b) Frequency and Payment Limits.--
(1) In general.--Section 1834 (42 U.S.C. 1395m) is amended
by inserting after subsection (c) the following new
subsection:
``(d) Frequency and Payment Limits for Colorectal Cancer
Screening Tests.--
``(1) Screening fecal-occult blood tests.--
``(A) Payment limit.--In establishing fee schedules under
section 1833(h) with respect to colorectal cancer screening
tests consisting of screening fecal-occult blood tests,
except as provided by the Secretary under paragraph (4)(A),
the payment amount established for tests performed--
``(i) in 1998 shall not exceed $5; and
``(ii) in a subsequent year, shall not exceed the limit on
the payment amount established under this subsection for such
tests for the preceding year, adjusted by the applicable
adjustment under section 1833(h) for tests performed in such
year.
``(B) Frequency limit.--Subject to revision by the
Secretary under paragraph (4)(B), no payment may be made
under this part for colorectal cancer screening test
consisting of a screening fecal-occult blood test--
``(i) if the individual is under 50 years of age; or
``(ii) if the test is performed within the 11 months after
a previous screening fecal-occult blood test.
``(2) Screening flexible sigmoidoscopies.--
``(A) Fee schedule.--The Secretary shall establish a
payment amount under section 1848 with respect to colorectal
cancer screening tests consisting of screening flexible
sigmoidoscopies that is consistent with payment amounts under
such section for similar or related services, except that
such payment amount shall be established without regard to
subsection (a)(2)(A) of such section.
``(B) Payment limit.--In the case of screening flexible
sigmoidoscopy services--
``(i) the payment amount may not exceed such amount as the
Secretary specifies, based upon the rates recognized under
this part for diagnostic flexible sigmoidoscopy services; and
``(ii) that, in accordance with regulations, may be
performed in an ambulatory surgical center and for which the
Secretary permits ambulatory surgical center payments under
this part and that are performed in an ambulatory surgical
center or hospital outpatient department, the payment amount
under this part may not exceed the lesser of (I) the payment
rate that would apply to such services if they were performed
in a hospital outpatient department, or (II) the payment rate
that would apply to such services if they were performed in
an ambulatory surgical center.
``(C) Special rule for detected lesions.--If during the
course of such screening flexible sigmoidoscopy, a lesion or
growth is detected which results in a biopsy or removal of
the lesion or growth, payment under this part shall not be
made for the screening flexible sigmoidoscopy but shall be
made for the procedure classified as a flexible sigmoidoscopy
with such biopsy or removal.
``(D) Frequency limit.--Subject to revision by the
Secretary under paragraph (4)(B), no payment may be made
under this part for a colorectal cancer screening test
consisting of a screening flexible sigmoidoscopy--
``(i) if the individual is under 50 years of age; or
``(ii) if the procedure is performed within the 47 months
after a previous screening flexible sigmoidoscopy.
``(3) Screening colonoscopy for individuals at high risk
for colorectal cancer.--
``(A) Fee schedule.--The Secretary shall establish a
payment amount under section 1848 with respect to colorectal
cancer screening test consisting of a screening colonoscopy
for individuals at high risk for colorectal cancer (as
defined in section 1861(pp)(2)) that is consistent with
payment amounts under such section for similar or related
services, except that such payment amount shall be
established without regard to subsection (a)(2)(A) of such
section.
``(B) Payment limit.--In the case of screening colonoscopy
services--
``(i) the payment amount may not exceed such amount as the
Secretary specifies, based upon the rates recognized under
this part for diagnostic colonoscopy services; and
``(ii) that are performed in an ambulatory surgical center
or hospital outpatient department, the payment amount under
this part may not exceed the lesser of (I) the payment rate
that would apply to such services if they were performed in a
hospital outpatient department, or (II) the payment rate that
would apply to such services if they were performed in an
ambulatory surgical center.
``(C) Special rule for detected lesions.--If during the
course of such screening colonoscopy, a lesion or growth is
detected which results in a biopsy or removal of the lesion
or growth, payment under this part shall not be made for the
screening colonoscopy but shall be made for the procedure
classified as a colonoscopy with such biopsy or removal.
``(D) Frequency limit.--Subject to revision by the
Secretary under paragraph (4)(B), no payment may be made
under this part for a colorectal cancer screening test
consisting of a screening colonoscopy for individuals at high
risk for colorectal cancer if the procedure is performed
within the 23 months after a previous screening colonoscopy.
``(4) Reductions in payment limit and revision of
frequency.--
``(A) Reductions in payment limit for screening fecal-
occult blood tests.--The Secretary shall review from time to
time the appropriateness of the amount of the payment limit
established for screening fecal-occult blood tests under
paragraph (1)(A). The Secretary may, with respect to tests
performed in a year after 2000, reduce the amount of such
limit as it applies nationally or in any area to the amount
that the Secretary estimates is required to assure that such
tests of an appropriate quality are readily and conveniently
available during the year.
``(B) Revision of frequency.--
``(i) Review.--The Secretary shall review periodically the
appropriate frequency for performing colorectal cancer
screening tests based on age and such other factors as the
Secretary believes to be pertinent.
``(ii) Revision of frequency.--The Secretary, taking into
consideration the review made under clause (i), may revise
from time to time the frequency with which such tests may be
paid for under this subsection, but no such revision shall
apply to tests performed before January 1, 2001.
``(5) Limiting charges of nonparticipating physicians.--
``(A) In general.--In the case of a colorectal cancer
screening test consisting of a screening flexible
sigmoidoscopy or a screening colonoscopy provided to an
individual at high risk for colorectal cancer for which
payment may be made under this part, if a nonparticipating
physician provides the procedure to an individual enrolled
under this part, the physician may not charge the individual
more than the limiting charge (as defined in section
1848(g)(2)).
``(B) Enforcement.--If a physician or supplier knowing and
willfully imposes a charge in violation of subparagraph (A),
the Secretary may apply sanctions against such physician or
supplier in accordance with section 1842(j)(2).''.
(2) Special rule for screening barium enema.--If the
Secretary of Health and Human Services issues a determination
under subsection (a)(2) that screening barium enema should be
covered as a colorectal cancer screening test under section
1861(pp) (as added by subsection (a)(1)(B)), the Secretary
shall establish frequency limits (including revisions of
frequency limits) for such procedure consistent with the
frequency limits for other colorectal cancer screening tests
under section 1834(d) (as added by subsection (b)(1)), and
shall establish payment limits (including limits on charges
of nonparticipating physicians) for such procedure consistent
with the payment limits under part B of title XVIII for
diagnostic barium enema procedures.
(c) Conforming Amendments.--(1) Paragraphs (1)(D) and
(2)(D) of section 1833(a) (42 U.S.C. 1395l(a)) are each
amended by inserting ``or section 1834(d)(1)'' after
``subsection (h)(1)''.
(2) Section 1833(h)(1)(A) (42 U.S.C. 1395l(h)(1)(A)) is
amended by striking ``The Secretary'' and inserting ``Subject
to paragraphs (1) and (4)(A) of section 1834(d), the
Secretary''.
(3) Clauses (i) and (ii) of section 1848(a)(2)(A) (42
U.S.C. 1395w-4(a)(2)(A)) are each amended by inserting after
``a service'' the following: ``(other than a colorectal
cancer screening test consisting of a screening colonoscopy
provided to an individual at high risk for colorectal cancer
or a screening flexible sigmoidoscopy)''.
(4) Section 1862(a) (42 U.S.C. 1395y(a)), as amended by
section 10103(c), is amended--
(A) in paragraph (1)--
[[Page H4519]]
(i) in subparagraph (F), by striking ``and'' at the end,
(ii) in subparagraph (G), by striking the semicolon at the
end and inserting ``, and'', and
(iii) by adding at the end the following new subparagraph:
``(H) in the case of colorectal cancer screening tests,
which are performed more frequently than is covered under
section 1834(d);''; and
(B) in paragraph (7), by striking ``or (G)'' and inserting
``(G), or (H)''.
(d) Effective Date.--The amendments made by this section
shall apply to items and services furnished on or after
January 1, 1998.
SEC. 10105. DIABETES SCREENING TESTS.
(a) Coverage of Diabetes Outpatient Self-management
Training Services.--
(1) In general.--Section 1861 (42 U.S.C. 1395x), as amended
by sections 10103(a) and 10104(a), is amended--
(A) in subsection (s)(2)--
(i) by striking ``and'' at the end of subparagraph (Q);
(ii) by adding ``and'' at the end of subparagraph (R); and
(iii) by adding at the end the following new subparagraph:
``(S) diabetes outpatient self-management training services
(as defined in subsection (qq)); and''; and
(B) by adding at the end the following new subsection:
``Diabetes Outpatient Self-Management Training Services
``(qq)(1) The term `diabetes outpatient self-management
training services' means educational and training services
furnished to an individual with diabetes by a certified
provider (as described in paragraph (2)(A)) in an outpatient
setting by an individual or entity who meets the quality
standards described in paragraph (2)(B), but only if the
physician who is managing the individual's diabetic condition
certifies that such services are needed under a comprehensive
plan of care related to the individual's diabetic condition
to provide the individual with necessary skills and knowledge
(including skills related to the self-administration of
injectable drugs) to participate in the management of the
individual's condition.
``(2) In paragraph (1)--
``(A) a `certified provider' is a physician, or other
individual or entity designated by the Secretary, that, in
addition to providing diabetes outpatient self-management
training services, provides other items or services for which
payment may be made under this title; and
``(B) a physician, or such other individual or entity,
meets the quality standards described in this paragraph if
the physician, or individual or entity, meets quality
standards established by the Secretary, except that the
physician or other individual or entity shall be deemed to
have met such standards if the physician or other individual
or entity meets applicable standards originally established
by the National Diabetes Advisory Board and subsequently
revised by organizations who participated in the
establishment of standards by such Board, or is recognized by
an organization that represents individuals (including
individuals under this title) with diabetes as meeting
standards for furnishing the services.''.
(2) Payment Under Physician Fee Schedule.--Section
1848(j)(3)(42 U.S.C. 1395w-4(j)(3)) as amended in sections
10102 and 10103, is amended by inserting ``(2)(S),'' before
``(3),''.
(3) Consultation with organizations in establishing payment
amounts for services provided by physicians.--In establishing
payment amounts under section 1848 of the Social Security Act
for physicians' services consisting of diabetes outpatient
self-management training services, the Secretary of Health
and Human Services shall consult with appropriate
organizations, including such organizations representing
individuals or medicare beneficiaries with diabetes, in
determining the relative value for such services under
section 1848(c)(2) of such Act.
(b) Blood-testing Strips for Individuals With Diabetes.--
(1) Including strips and monitors as durable medical
equipment.--The first sentence of section 1861(n) (42 U.S.C.
1395x(n)) is amended by inserting before the semicolon the
following: ``, and includes blood-testing strips and blood
glucose monitors for individuals with diabetes without regard
to whether the individual has Type I or Type II diabetes or
to the individual's use of insulin (as determined under
standards established by the Secretary in consultation with
the appropriate organizations)''.
(2) 10 percent reduction in payments for testing strips.--
Section 1834(a)(2)(B)(iv) (42 U.S.C. 1395m(a)(2)(B)(iv)) is
amended by adding before the period the following: ``(reduced
by 10 percent, in the case of a blood glucose testing strip
furnished after 1997 for an individual with diabetes)''.
(c) Establishment of Outcome Measures for Beneficiaries
With Diabetes.--
(1) In general.--The Secretary of Health and Human
Services, in consultation with appropriate organizations,
shall establish outcome measures, including glysolated
hemoglobin (past 90-day average blood sugar levels), for
purposes of evaluating the improvement of the health status
of medicare beneficiaries with diabetes mellitus.
(2) Recommendations for modifications to screening
benefits.--Taking into account information on the health
status of medicare beneficiaries with diabetes mellitus as
measured under the outcome measures established under
subparagraph (A), the Secretary shall from time to time
submit recommendations to Congress regarding modifications to
the coverage of services for such beneficiaries under the
medicare program.
(d) Effective Date.--The amendments made by this section
shall apply to items and services furnished on or after
January 1, 1998.
SEC. 10106. STANDARDIZATION OF MEDICARE COVERAGE OF BONE MASS
MEASUREMENTS.
(a) In General.--Section 1861 (42 U.S.C. 1395x), as amended
by sections 10103(a), 10104(a), 10105(a), is amended--
(1) in subsection (s)--
(A) in paragraph (12)(C), by striking ``and'' at the end,
(B) by striking the period at the end of paragraph (14) and
inserting ``; and'',
(C) by redesignating paragraphs (15) and (16) as paragraphs
(16) and (17), respectively, and
(D) by inserting after paragraph (14) the following new
paragraph:
``(15) bone mass measurement (as defined in subsection
(rr)).''; and
(2) by inserting after subsection (qq) the following new
subsection:
``Bone Mass Measurement
``(rr)(1) The term `bone mass measurement' means a
radiologic or radioisotopic procedure or other procedure
approved by the Food and Drug Administration performed on a
qualified individual (as defined in paragraph (2)) for the
purpose of identifying bone mass or detecting bone loss or
determining bone quality, and includes a physician's
interpretation of the results of the procedure.
``(2) For purposes of this subsection, the term `qualified
individual' means an individual who is (in accordance with
regulations prescribed by the Secretary)--
``(A) an estrogen-deficient woman at clinical risk for
osteoporosis;
``(B) an individual with vertebral abnormalities;
``(C) an individual receiving long-term glucocorticoid
steroid therapy;
``(D) an individual with primary hyperparathyroidism; or
``(E) an individual being monitored to assess the response
to or efficacy of an approved osteoporosis drug therapy.
``(3) The Secretary shall establish such standards
regarding the frequency with which a qualified individual
shall be eligible to be provided benefits for bone mass
measurement under this title.''.
(b) Payment under Physician Fee Schedule.--Section
1848(j)(3) (42 U.S.C. 1395w-4(j)(3)), as amended by sections
10102, 10103, and 10105, is amended--
(1) by striking ``(4) and (14)'' and inserting ``(4),
(14)'' and
(2) by inserting `` and (15)'' after ``1861(nn)(2))''.
(c) Conforming Amendments.--Sections 1864(a),
1902(a)(9)(C), and 1915(a)(1)(B)(ii)(I) (42 U.S.C. 1395aa(a),
1396a(a)(9)(C), and 1396n(a)(1)(B)(ii)(I)) are amended by
striking ``paragraphs (15) and (16)'' each place it appears
and inserting ``paragraphs (16) and (17)''.
(d) Effective Date.--The amendments made by this section
shall apply to bone mass measurements performed on or after
July 1, 1998.
SEC. 10107. VACCINES OUTREACH EXPANSION.
(a) Extension of Influenza and Pneumococcal Vaccination
Campaign.--In order to increase utilization of pneumococcal
and influenza vaccines in medicare beneficiaries, the
Influenza and Pneumococcal Vaccination Campaign carried out
by the Health Care Financing Administration in conjunction
with the Centers for Disease Control and Prevention and the
National Coalition for Adult Immunization, is extended until
the end of fiscal year 2002.
(b) Authorization of Appropriation.--There are hereby
authorized to be appropriated for each of fiscal years 1998
through 2002, $8,000,000 for the Campaign described in
subsection (a). Of the amount so authorized to be
appropriated in each fiscal year, 60 percent of the amount so
appropriated shall be payable from the Federal Hospital
Insurance Trust Fund, and 40 percent shall be payable from
the Federal Supplementary Medical Insurance Trust Fund.
SEC. 10108. STUDY ON PREVENTIVE BENEFITS.
(a) Study.--The Secretary of Health and Human Services
shall request the National Academy of Sciences, in
conjunction with the United States Preventive Services Task
Force, to analyze the expansion or modification of preventive
benefits provided to medicare beneficiaries under title XVIII
of the Social Security Act. The analysis shall consider both
the short term and long term benefits, and costs to the
medicare program, of such expansion or modification,
(b) Report.--
(1) Initial report.--Not later than 2 years after the date
of the enactment of this Act, the Secretary shall submit a
report on the findings of the analysis conducted under
subsection (a) to the Committee on Ways and Means and the
Committee on Commerce of the House of Representatives and the
Committee on Finance of the Senate.
(2) Contents.--Such report shall include specific findings
with respect to coverage of the following preventive
benefits:
(A) Nutrition therapy, including parenteral and enteral
nutrition.
(B) Medically necessary dental care.
[[Page H4520]]
(C) Routine patient care costs for beneficiaries enrolled
in approved clinical trial programs.
(D) Elimination of time limitation for coverage of
immunosuppressive drugs for transplant patients.
(3) Funding.--From funds appropriated to the Department of
Health and Human Services for fiscal years 1998 and 1999, the
Secretary shall provide for such funding as may be necessary
for the conduct of the analysis by the National Academy of
Sciences under this section.
Subtitle C--Rural Initiatives
SEC. 10201. RURAL PRIMARY CARE HOSPITAL PROGRAM.
(a) Rural Primary Care Hospital Program.--Section 1820 (42
U.S.C. 1395i-4) is amended to read as follows:
``medicare rural primary care hospital program
``Sec. 1820. (a) State Designation of Facilities.--
``(1) In general.--A State may designate one or more
facilities as a rural primary care hospital in accordance
with paragraph (2).
``(2) Criteria for designation as rural primary care
hospital.--A State may designate a facility as a rural
primary care hospital if the facility--
``(A) is a nonprofit or public hospital, and is located in
a county (or equivalent unit of local government) in a rural
area (as defined in section 1886(d)(2)(D)) that--
``(i) is located a distance that corresponds to a travel
time of greater than 30 minutes (using the guidelines
specified under part IB1(b) of Appendix A to part 5 of title
42, Code of Federal Regulations, as in effect on October 1,
1996), from a hospital, or another facility described in this
subsection, or
``(ii) is certified by the State as being a necessary
provider of health care services to residents in the area
because of local geography or service patterns;
``(B) makes available 24-hour emergency care services;
``(C) provides at any time not more than 15 acute care
inpatient beds (meeting such standards as the Secretary may
establish) for providing inpatient care for a period not to
exceed 96 hours (unless a longer period is required because
transfer to a hospital is precluded because of inclement
weather or other emergency conditions), except that a peer
review organization or equivalent entity may, on request,
waive the 96-hour restriction on a case-by-case basis;
``(D) meets such staffing requirements as would apply under
section 1861(e) to a hospital located in a rural area, except
that--
``(i) the facility need not meet hospital standards
relating to the number of hours during a day, or days during
a week, in which the facility must be open and fully staffed,
except insofar as the facility is required to make available
emergency care services as determined under subparagraph (B)
and must have nursing services available on a 24-hour basis,
but need not otherwise staff the facility except when an
inpatient is present,
``(ii) the facility may provide any services otherwise
required to be provided by a full-time, on-site dietitian,
pharmacist, laboratory technician, medical technologist, and
radiological technologist on a part-time, off-site basis
under arrangements as defined in section 1861(w)(1), and
``(iii) the inpatient care described in subparagraph (C)
may be provided by a physician's assistant, nurse
practitioner, or clinical nurse specialist subject to the
oversight of a physician who need not be present in the
facility;
``(E) meets the requirements of subparagraph (I) of
paragraph (2) of section 1861(aa); and
``(F) has executed and in effect an agreement described in
subsection (b)(1).
``(b) Agreements.--
``(1) In general.--Each rural primary care hospital shall
have an agreement with respect to each item described in
paragraph (2) with at least 1 hospital (as defined in section
1861(e)).
``(2) Items described.--The items described in this
paragraph are the following:
``(A) Patient referral and transfer.
``(B) The development and use of communications systems
including (where feasible)--
``(i) telemetry systems, and
``(ii) systems for electronic sharing of patient data.
``(C) The provision of emergency and non-emergency
transportation between the facility and the hospital.
``(3) Credentialing and quality assurance.--Each rural
primary care hospital shall have an agreement with respect to
credentialing and quality assurance with at least 1--
``(A) hospital,
``(B) peer review organization or equivalent entity, or
``(C) other appropriate and qualified entity identified by
the State.
``(c) Certification by the Secretary.--The Secretary shall
certify a facility as a rural primary care hospital if the
facility--
``(1) is designated as a rural primary care hospital by the
State in which it is located; and
``(2) meets such other criteria as the Secretary may
require.
``(d) Permitting Maintenance of Swing Beds.--Nothing in
this section shall be construed to prohibit a State from
designating or the Secretary from certifying a facility as a
rural primary care hospital solely because, at the time the
facility applies to the State for designation as a rural
primary care hospital, there is in effect an agreement
between the facility and the Secretary under section 1883
under which the facility's inpatient hospital facilities are
used for the provision of extended care services, so long as
the total number of beds that may be used at any time for the
furnishing of either such services or acute care inpatient
services does not exceed 25 beds and the number of beds used
at any time for acute care inpatient services does not exceed
15 beds. For purposes of the previous sentence, any bed of a
unit of the facility that is licensed as a distinct-part
skilled nursing facility at the time the facility applies to
the State for designation as a rural primary care hospital
shall not be counted.
``(e) Waiver of Conflicting Part A Provisions.--The
Secretary is authorized to waive such provisions of this part
and part C as are necessary to conduct the program
established under this section.''.
(b) Payment on a Reasonable Cost Basis.--
(1) Medicare part a.--Section 1814(l) (42 U.S.C. 1395f(l))
is amended to read as follows:
``(l) Payment for Inpatient Rural Primary Care Hospital
Services.--The amount of payment under this part for
inpatient rural primary care hospital services is the
reasonable costs of the rural primary care hospital in
providing such services.''.
(2) Medicare part b.--Section 1834(g) (42 U.S.C. 1395m(g))
is amended to read as follows:
``(g) Payment for Outpatient Rural Primary Care Hospital
Services.--The amount of payment under this part for
outpatient rural primary care hospital services is the
reasonable costs of the rural primary care hospital in
providing such services.''.
(c) Lengthening Maximum Period of Permitted Inpatient
Stay.--Section 1814(a)(8) (42 U.S.C. 1395f(a)(8)) is amended
by striking ``72 hours'' and inserting ``96 hours''.
(d) Payment Continued to Designated Essential Access
Community Hospitals and Designated Rural Primary Care
Hospitals.--
(1) Essential access community hospitals.--Section
1886(d)(5)(D) (42 U.S.C. 1395ww(d)(5)(D)) is amended--
(A) in clause (iii)(III), by inserting ``as in effect on
September 30, 1997'' before the period at the end; and
(B) in clause (v), by inserting ``as in effect on September
30, 1997'' after ``1820(i)(1)'' and after ``1820(g)''.
(2) Rural primary care hospitals.--Section 1861(mm)(1) (42
U.S.C. 1395x(mm)(1)) is amended by striking ``1820(i)(2).''
and inserting ``1820(c), and includes a facility designated
by the Secretary under section 1820(i)(2) as in effect on
September 30, 1997.''.
(3) Medical assistance facility.--Any facility that, as of
March 1, 1997, operated as a limited service rural hospital
under a demonstration described in section 4008(i)(1) of the
Omnibus Budget Reconciliation Act of 1990 (42 U.S.C. 1395b-1
note) shall be treated as a rural primary care hospital for
the purposes of title XVIII of the Social Security Act so
long as it continues to meet the requirements of the
demonstration protocol relating to staffing, services,
quality assurance, and related factors.
(e) Conforming Amendment.--Section 1883(a)(1) (42 U.S.C.
1395tt(a)(1)) is amended by inserting ``or rural primary care
hospital'' after ``Any hospital''.
(f) Effective Date.--The amendments made by this section
shall apply to services furnished in cost reporting periods
beginning on or after October 1, 1997.
SEC. 10202. PROHIBITING DENIAL OF REQUEST BY RURAL REFERRAL
CENTERS FOR RECLASSIFICATION ON BASIS OF
COMPARABILITY OF WAGES.
(a) In General.--Section 1886(d)(10)(D) (42 U.S.C.
1395ww(d)(10)(D)) is amended--
(1) by redesignating clause (iii) as clause (iv); and
(2) by inserting after clause (ii) the following new
clause:
``(iii) Under the guidelines published by the Secretary
under clause (i), in the case of a hospital which has ever
been classified by the Secretary as a rural referral center
under paragraph (5)(C), the Board may not reject the
application of the hospital under this paragraph on the basis
of any comparison between the average hourly wage of the
hospital and the average hourly wage of hospitals in the area
in which it is located.''.
(b) Continuing Treatment of Previously Designated
Centers.--
(1) In general.--Any hospital classified as a rural
referral center by the Secretary of Health and Human Services
under section 1886(d)(5)(C) of the Social Security Act for
fiscal year 1991 shall be classified as such a rural referral
center for fiscal year 1998 and each subsequent fiscal year.
(2) Budget neutrality.--The provisions of section
1886(d)(8)(D) of the Social Security Act shall apply to
reclassifications made pursuant to paragraph (1) in the same
manner as such provisions apply to a reclassification under
section 1886(d)(10) of such Act.
SEC. 10203. HOSPITAL GEOGRAPHIC RECLASSIFICATION PERMITTED
FOR PURPOSES OF DISPROPORTIONATE SHARE PAYMENT
ADJUSTMENTS.
(a) In General.--Section 1886(d)(10)(C)(i) (42 U.S.C.
1395ww(d)(10)(C)(i)) is amended--
(1) by striking ``or'' at the end of subclause (I);
(2) by striking the period at the end of subclause (II) and
inserting ``, or''; and
[[Page H4521]]
(3) by inserting after subclause (II) the following:
``(III) eligibility for and amount of additional payment
amounts under paragraph (5)(F).''.
(b) Applicable Guidelines.--Such Board shall apply the
guidelines established for reclassification under subclause
(I) of section 1886(d)(10)(C)(i) of such Act to
reclassification under subclause (III) of such section until
the Secretary of Health and Human Services promulgates
separate guidelines for reclassification under such subclause
(III).
SEC. 10204. MEDICARE-DEPENDENT, SMALL RURAL HOSPITAL PAYMENT
EXTENSION.
(a) Special Treatment Extended.--
(1) Payment methodology.--Section 1886(d)(5)(G) (42 U.S.C.
1395ww(d)(5)(G)) is amended--
(A) in clause (i), by striking ``October 1, 1994,'' and
inserting ``October 1, 1994, or beginning on or after October
1, 1997, and before October 1, 2001,''; and
(B) in clause (ii)(II), by striking ``October 1, 1994,''
and inserting ``October 1, 1994, or beginning on or after
October 1, 1997, and before October 1, 2001,''.
(2) Extension of target amount.--Section 1886(b)(3)(D) (42
U.S.C. 1395ww(b)(3)(D)) is amended--
(A) in the matter preceding clause (i), by striking
``September 30, 1994,'' and inserting ``September 30, 1994,
and for cost reporting periods beginning on or after October
1, 1997, and before October 1, 2001,'';
(B) in clause (ii), by striking ``and'' at the end;
(C) in clause (iii), by striking the period at the end and
inserting ``, and''; and
(D) by adding after clause (iii) the following new clause:
``(iv) with respect to discharges occurring during fiscal
year 1998 through fiscal year 2000, the target amount for the
preceding year increased by the applicable percentage
increase under subparagraph (B)(iv).''.
(3) Permitting hospitals to decline reclassification.--
Section 13501(e)(2) of OBRA-93 (42 U.S.C. 1395ww note) is
amended by striking ``or fiscal year 1994'' and inserting ``,
fiscal year 1994, fiscal year 1998, fiscal year 1999, or
fiscal year 2000''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply with respect to discharges occurring on or after
October 1, 1997.
SEC. 10205. GEOGRAPHIC RECLASSIFICATION FOR CERTAIN
DISPROPORTIONATELY LARGE HOSPITALS.
(a) New Guidelines for Reclassification.--Notwithstanding
the guidelines published under subparagraph (D)(i)(I) of
section 1886(d)(10) of the Social Security Act (42 U.S.C.
1395ww(d)(10)), the Secretary of Health and Human Services
shall publish and use alternative guidelines under which a
hospital described in subsection (b) qualifies for geographic
reclassification under such section for a fiscal year
beginning with fiscal year 1998.
(b) Hospitals Covered.--A hospital described in this
subsection is a hospital that demonstrates that--
(1) the average hourly wage paid by the hospital is not
less than 108 percent of the average hourly wage paid by all
other hospitals located in the Metropolitan Statistical Area
(or the New England County Metropolitan Area) in which the
hospital is located; and
(2) not less than 40 percent of the adjusted uninflated
wages paid by all hospitals located in such Area is
attributable to wages paid by the hospital.
SEC. 10206. FLOOR ON AREA WAGE INDEX.
(a) In General.--For purposes of section 1886(d)(3)(E) of
the Social Security Act for discharges occurring on or after
October 1, 1997, the area wage index applicable under such
section to any hospital which is not located in a rural area
(as defined in section 1886(d)(2)(D) of such Act) may not be
less than the area wage indices applicable under such section
to hospitals located in rural areas in the State in which the
hospital is located.
(b) Implementation.--The Secretary of Health and Human
Services shall adjust the area wage indices referred to in
subsection (a) for hospitals not described in such subsection
in a manner which assures that the aggregate payments made
under section 1886(d) of the Social Security Act in a fiscal
year for the operating costs of inpatient hospital services
are not greater or less than those which would have been made
in the year if this section did not apply.
SEC. 10207. INFORMATICS, TELEMEDICINE, AND EDUCATION
DEMONSTRATION PROJECT.
(a) Purpose and Authorization.--
(1) In general.--Not later than 9 months after the date of
enactment of this section, the Secretary of Health and Human
Services shall provide for a demonstration project described
in paragraph (2).
(2) Description of project.--
(A) In general.--The demonstration project described in
this paragraph is a single demonstration project to use
eligible health care provider telemedicine networks to apply
high-capacity computing and advanced networks to improve
primary care (and prevent health care complications) to
medicare beneficiaries with diabetes mellitus who are
residents of medically underserved rural areas or residents
of medically underserved inner-city areas.
(B) Medically underserved defined.--As used in this
paragraph, the term ``medically underserved'' has the meaning
given such term in section 330(b)(3) of the Public Health
Service Act (42 U.S.C. 254b(b)(3)).
(3) Waiver.--The Secretary shall waive such provisions of
title XVIII of the Social Security Act as may be necessary to
provide for payment for services under the project in
accordance with subsection (d).
(4) Duration of project.--The project shall be conducted
over a 4-year period.
(b) Objectives of Project.--The objectives of the project
include the following:
(1) Improving patient access to and compliance with
appropriate care guidelines for individuals with diabetes
mellitus through direct telecommunications link with
information networks in order to improve patient quality-of-
life and reduce overall health care costs.
(2) Developing a curriculum to train, and providing
standards for credentialing and licensure of, health
professionals (particularly primary care health
professionals) in the use of medical informatics and
telecommunications.
(3) Demonstrating the application of advanced technologies,
such as video-conferencing from a patient's home, remote
monitoring of a patient's medical condition, interventional
informatics, and applying individualized, automated care
guidelines, to assist primary care providers in assisting
patients with diabetes in a home setting.
(4) Application of medical informatics to residents with
limited English language skills.
(5) Developing standards in the application of telemedicine
and medical informatics.
(6) Developing a model for the cost-effective delivery of
primary and related care both in a managed care environment
and in a fee-for-service environment.
(c) Eligible Health Care Provider Telemedicine Network
Defined.--For purposes of this section, the term ``eligible
health care provider telemedicine network'' means a
consortium that includes at least one tertiary care hospital
(but no more than 2 such hospitals), at least one medical
school, no more than 4 facilities in rural or urban areas,
and at least one regional telecommunications provider and
that meets the following requirements:
(1) The consortium is located in an area with one of the
highest concentrations of medical schools and tertiary care
facilities in the United States and has appropriate
arrangements (within or outside the consortium) with such
schools and facilities, universities, and telecommunications
providers, in order to conduct the project.
(2) The consortium submits to the Secretary an application
at such time, in such manner, and containing such information
as the Secretary may require, including a description of the
use to which the consortium would apply any amounts received
under the project and the source and amount of non-Federal
funds used in the project.
(3) The consortium guarantees that it will be responsible
for payment for all costs of the project that are not paid
under this section and that the maximum amount of payment
that may be made to the consortium under this section shall
not exceed the amount specified in subsection (d)(3).
(d) Coverage as Medicare Part B Services.--
(1) In general.--Subject to the succeeding provisions of
this subsection, services related to the treatment or
management of (including prevention of complications from)
diabetes for medicare beneficiaries furnished under the
project shall be considered to be services covered under part
B of title XVIII of the Social Security Act.
(2) Payments.--
(A) In general.--Subject to paragraph (3), payment for such
services shall be made at a rate of 50 percent of the costs
that are reasonable and related to the provision of such
services. In computing such costs, the Secretary shall
include costs described in subparagraph (B), but may not
include costs described in subparagraph (C).
(B) Costs that may be included.--The costs described in
this subparagraph are the permissible costs (as recognized by
the Secretary) for the following:
(i) The acquisition of telemedicine equipment for use in
patients' homes (but only in the case of patients located in
medically underserved areas).
(ii) Curriculum development and training of health
professionals in medical informatics and telemedicine.
(iii) Payment of telecommunications costs (including
salaries and maintenance of equipment), including costs of
telecommunications between patients' homes and the eligible
network and between the network and other entities under the
arrangements described in subsection (c)(1).
(iv) Payments to practitioners and providers under the
medicare programs.
(C) Costs not included.--The costs described in this
subparagraph are costs for any of the following:
(i) The purchase or installation of transmission equipment
(other than such equipment used by health professionals to
deliver medical informatics services under the project).
(ii) The establishment or operation of a telecommunications
common carrier network.
(iii) Construction (except for minor renovations related to
the installation of reimbursable equipment) or the
acquisition or building of real property.
(3) Limitation.--The total amount of the payments that may
be made under this section shall not exceed $30,000,000.
[[Page H4522]]
(4) Limitation on cost-sharing.--The project may not impose
cost sharing on a medicare beneficiary for the receipt of
services under the project in excess of 20 percent of the
recognized costs of the project attributable to such
services.
(e) Reports.--The Secretary shall submit to the Committees
on Ways and Means and Commerce of the House of
Representatives and the Committee on Finance of the Senate
interim reports on the project and a final report on the
project within 6 months after the conclusion of the project.
The final report shall include an evaluation of the impact of
the use of telemedicine and medical informatics on improving
access of medicare beneficiaries to health care services, on
reducing the costs of such services, and on improving the
quality of life of such beneficiaries.
(f) Definitions.--For purposes of this section:
(1) Interventional informatics.--The term ``interventional
informatics'' means using information technology and virtual
reality technology to intervene in patient care.
(2) Medical informatics.--The term ``medical informatics''
means the storage, retrieval, and use of biomedical and
related information for problem solving and decision-making
through computing and communications technologies.
(3) Project.--The term ``project'' means the demonstration
project under this section.
Subtitle D--Anti-Fraud and Abuse Provisions
SEC. 10301. PERMANENT EXCLUSION FOR THOSE CONVICTED OF 3
HEALTH CARE RELATED CRIMES.
Section 1128(c)(3) (42 U.S.C. 1320a-7(c)(3)) is amended--
(1) in subparagraph (A), by inserting ``or in the case
described in subparagraph (G)'' after ``subsection (b)(12)'';
(2) in subparagraphs (B) and (D), by striking ``In the
case'' and inserting ``Subject to subparagraph (G), in the
case''; and
(3) by adding at the end the following new subparagraph:
``(G) In the case of an exclusion of an individual under
subsection (a) based on a conviction occurring on or after
the date of the enactment of this subparagraph, if the
individual has (before, on, or after such date and before the
date of the conviction for which the exclusion is imposed)
been convicted--
``(i) on one previous occasion of one or more offenses for
which an exclusion may be effected under such subsection, the
period of the exclusion shall be not less than 10 years, or
``(ii) on 2 or more previous occasions of one or more
offenses for which an exclusion may be effected under such
subsection, the period of the exclusion shall be
permanent.''.
SEC. 10302. AUTHORITY TO REFUSE TO ENTER INTO MEDICARE
AGREEMENTS WITH INDIVIDUALS OR ENTITIES
CONVICTED OF FELONIES.
(a) Medicare Part A.--Section 1866(b)(2) (42 U.S.C.
1395cc(b)(2)) is amended--
(1) by striking ``or'' at the end of subparagraph (B);
(2) by striking the period at the end of subparagraph (C)
and inserting ``, or''; and
(3) by adding after subparagraph (C) the following new
subparagraph:
``(D) has ascertained that the provider has been convicted
of a felony under Federal or State law for an offense which
the Secretary determines is inconsistent with the best
interests of program beneficiaries.''.
(b) Medicare Part B.--Section 1842 (42 U.S.C. 1395u) is
amended by adding after subsection (r) the following new
subsection:
``(s) The Secretary may refuse to enter into an agreement
with a physician or supplier under subsection (h) or may
terminate or refuse to renew such agreement, in the event
that such physician or supplier has been convicted of a
felony under Federal or State law for an offense which the
Secretary determines is inconsistent with the best interests
of program beneficiaries.''.
(c) Medicaid.--For provisions amending title XIX of the
Social Security Act to provide similar treatment under the
medicaid program, see section ____.
(d) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act
and apply to the entry and renewal of contracts on or after
such date.
SEC. 10303. INCLUSION OF TOLL-FREE NUMBER TO REPORT MEDICARE
WASTE, FRAUD, AND ABUSE IN EXPLANATION OF
BENEFITS FORMS.
(a) In General.--Section 1842(h)(7) (42 U.S.C. 1395u(h)(7))
is amended--
(1) by striking ``and'' at the end of subparagraph (C),
(2) by striking the period at the end of subparagraph (D)
and inserting ``; and'', and
(3) by adding at the end the following new subparagraph:
``(E) a toll-free telephone number maintained by the
Inspector General in the Department of Health and Human
Services for the receipt of complaints and information about
waste, fraud, and abuse in the provision or billing of
services under this title.''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply to explanations of benefits provided on or after
such date (not later than January 1, 1999) as the Secretary
of Health and Human Services shall provide.
SEC. 10304. LIABILITY OF MEDICARE CARRIERS AND FISCAL
INTERMEDIARIES FOR CLAIMS SUBMITTED BY EXCLUDED
PROVIDERS.
(a) Reimbursement to the Secretary for Amounts Paid to
Excluded Providers.--
(1) Requirements for fiscal intermediaries.--
(A) In general.--Section 1816 (42 U.S.C. 1395h) is amended
by adding at the end the following new subsection:
``(m) An agreement with an agency or organization under
this section shall require that such agency or organization
reimburse the Secretary for any amounts paid by the agency or
organization for a service under this title which is
furnished, directed, or prescribed by an individual or entity
during any period for which the individual or entity is
excluded pursuant to section 1128, 1128A, or 1156, from
participation in the program under this title, if the amounts
are paid after the Secretary notifies the agency or
organization of the exclusion.''.
(B) Conforming amendment.--Subsection (i) of such section
is amended by adding at the end the following new paragraph:
``(4) Nothing in this subsection shall be construed to
prohibit reimbursement by an agency or organization under
subsection (m).''.
(2) Requirements for carriers.--Section 1842(b)(3) (42
U.S.C. 1395u(b)(3)) is amended--
(A) by striking ``and'' at the end of subparagraph (I); and
(B) by inserting after subparagraph (I) the following new
subparagraph:
``(J) will reimburse the Secretary for any amounts paid by
the carrier for an item or service under this part which is
furnished, directed, or prescribed by an individual or entity
during any period for which the individual or entity is
excluded pursuant to section 1128, 1128A, or 1156, from
participation in the program under this title, if the amounts
are paid after the Secretary notifies the carrier of the
exclusion, and''.
(3) Reference to medicaid provision.--For provision
imposing similar restrictions on States under the medicaid
program under title XIX of the Social Security Act, see
section ____.
(b) Conforming Repeal of Mandatory Payment Rule.--Paragraph
(2) of section 1862(e) (42 U.S.C. 1395y(e)) is amended to
read as follows:
``(2) No individual or entity may bill (or collect any
amount from) any individual for any item or service for which
payment is denied under paragraph (1). No person is liable
for payment of any amounts billed for such an item or service
in violation of the previous sentence.''.
(c) Effective Dates.--The amendments made by this section
shall apply to contracts and agreements entered into,
renewed, or extended after the date of the enactment of this
Act, but only with respect to claims submitted on or after
the later of January 1, 1998, or the date such entry,
renewal, or extension becomes effective.
SEC. 10305. EXCLUSION OF ENTITY CONTROLLED BY FAMILY MEMBER
OF A SANCTIONED INDIVIDUAL.
(a) In General.--Section 1128 (42 U.S.C. 1320a-7) is
amended--
(1) in subsection (b)(8)(A)--
(A) by striking ``or'' at the end of clause (i), and
(B) by striking the dash at the end of clause (ii) and
inserting ``; or'', and
(C) by inserting after clause (ii) the following:
``(iii) who was described in clause (i) but is no longer so
described because of a transfer of ownership or control
interest, in anticipation of (or following) a conviction,
assessment, or exclusion described in subparagraph (B)
against the person, to an immediate family member (as defined
in subsection (j)(1)) or a member of the household of the
person (as defined in subsection (j)(2)) who continues to
maintain an interest described in such clause--''; and
(2) by adding after subsection (i) the following new
subsection:
``(j) Definition of Immediate Family Member and Member of
Household.--For purposes of subsection (b)(8)(A)(iii):
``(1) The term `immediate family member' means, with
respect to a person--
``(A) the husband or wife of the person;
``(B) the natural or adoptive parent, child, or sibling of
the person;
``(C) the stepparent, stepchild, stepbrother, or stepsister
of the person;
``(D) the father-, mother-, daughter-, son-, brother-, or
sister-in-law of the person;
``(E) the grandparent or grandchild of the person; and
``(F) the spouse of a grandparent or grandchild of the
person.
``(2) The term `member of the household' means, with
respect to an person, any individual sharing a common abode
as part of a single family unit with the person, including
domestic employees and others who live together as a family
unit, but not including a roomer or boarder.''.
(b) Effective Date.--The amendments made by subsection (a)
shall take effect on the date that is 45 days after the date
of the enactment of this Act.
SEC. 10306. IMPOSITION OF CIVIL MONEY PENALTIES.
(a) Civil Money Penalties for Persons That Contract With
Excluded Individuals.--Section 1128A(a) (42 U.S.C. 1320a-
7a(a)) is amended--
(1) by striking ``or'' at the end of paragraph (4);
(2) by adding ``or'' at the end of paragraph (5); and
(3) by adding after paragraph (5) the following new
paragraph:
``(6) arranges or contracts (by employment or otherwise)
with an individual or entity
[[Page H4523]]
that the person knows or should know is excluded from
participation in a Federal health care program (as defined in
section 1128B(f)), for the provision of items or services for
which payment may be made under such a program;''.
(b) Civil Money Penalties for Services Ordered or
Prescribed by an Excluded Individual or Entity.--Section
1128A(a)(1) (42 U.S.C. 1320a-7a(a)(1)) is amended--
(1) in subparagraph (D)--
(A) by inserting ``, ordered, or prescribed by such
person'' after ``other item or service furnished'';
(B) by inserting ``(pursuant to this title or title
XVIII)'' after ``period in which the person was excluded'';
and
(C) by striking ``pursuant to a determination by the
Secretary'' and all that follows through ``the provisions of
section 1842(j)(2)''; and
(D) by striking ``or'' at the end;
(2) by redesignating subparagraph (E) as subparagraph (F);
and
(3) by inserting after subparagraph (D) the following new
subparagraph:
``(E) is for a medical or other item or service ordered or
prescribed by a person excluded (pursuant to this title or
title XVIII) from the program under which the claim was made,
and the person furnishing such item or service knows or
should know of such exclusion, or''.
(c) Effective Dates.--
(1) Contracts with excluded persons.--The amendments made
by subsection (a) shall apply to arrangements and contracts
entered into after the date of the enactment of this Act.
(2) Services ordered or prescribed.--The amendments made by
subsection (b) shall apply to items and services furnished
ordered or prescribed after the date of the enactment of this
Act.
SEC. 10307. DISCLOSURE OF INFORMATION AND SURETY BONDS.
(a) Disclosure of Information and Surety Bond Requirement
for Suppliers of Durable Medical Equipment.--Section 1834(a)
(42 U.S.C. 1395m(a)) is amended by inserting after paragraph
(15) the following new paragraph:
``(16) Conditions for issuance of provider number.--The
Secretary shall not provide for the issuance (or renewal) of
a provider number for a supplier of durable medical
equipment, for purposes of payment under this part for
durable medical equipment furnished by the supplier, unless
the supplier provides the Secretary on a continuing basis
with--
``(A)(i) full and complete information as to the identity
of each person with an ownership or control interest (as
defined in section 1124(a)(3)) in the supplier or in any
subcontractor (as defined by the Secretary in regulations) in
which the supplier directly or indirectly has a 5 percent or
more ownership interest, and
``(ii) to the extent determined to be feasible under
regulations of the Secretary, the name of any disclosing
entity (as defined in section 1124(a)(2)) with respect to
which a person with such an ownership or control interest in
the supplier is a person with such an ownership or control
interest in the disclosing entity; and
``(B) a surety bond in a form specified by the Secretary
and in an amount that is not less than $50,000.
The Secretary may waive the requirement of a bond under
subparagraph (B) in the case of a supplier that provides a
comparable surety bond under State law.''.
(b) Surety Bond Requirement for Home Health Agencies.--
(1) In general.--Section 1861(o) (42 U.S.C. 1395x(o)) is
amended--
(A) in paragraph (7), by inserting ``and including
providing the Secretary on a continuing basis with a surety
bond in a form specified by the Secretary and in an amount
that is not less than $50,000'' after ``financial security of
the program'', and
(B) by adding at the end the following: ``The Secretary may
waive the requirement of a bond under paragraph (7) in the
case of an agency or organization that provides a comparable
surety bond under State law.''.
(2) Conforming amendments.--Section 1861(v)(1)(H) (42
U.S.C. 1395x(v)(1)(H)) is amended--
(A) in clause (i), by striking ``the financial security
requirement'' and inserting ``the financial security and
surety bond requirements''; and
(B) in clause (ii), by striking ``the financial security
requirement described in subsection (o)(7) applies'' and
inserting ``the financial security and surety bond
requirements described in subsection (o)(7) apply''.
(3) Reference to current disclosure requirement.--For
provision of current law requiring home health agencies to
disclose information on ownership and control interests, see
section 1124 of the Social Security Act.
(c) Authorizing Application of Disclosure and Surety Bond
Requirements to Ambulance Services and Certain Clinics.--
Section 1834(a)(16) (42 U.S.C. 1395m(a)(16)), as added by
subsection (a), is amended by adding at the end the
following: ``The Secretary, in the Secretary's discretion,
may impose the requirements of the previous sentence with
respect to some or all classes of suppliers of ambulance
services described in section 1861(s)(7) and clinics that
furnish medical and other health services (other than
physicians' services) under this part.''.
(d) Application to Comprehensive Outpatient Rehabilitation
Facilities (CORFs).--Section 1861(cc)(2) (42 U.S.C.
1395x(cc)(2)) is amended--
(1) in subparagraph (I), by inserting before the period at
the end the following: ``and providing the Secretary on a
continuing basis with a surety bond in a form specified by
the Secretary and in an amount that is not less than
$50,000'', and
(2) by adding after and below subparagraph (I) the
following:
``The Secretary may waive the requirement of a bond under
subparagraph (I) in the case of a facility that provides a
comparable surety bond under State law.''.
(e) Application to Rehabilitation Agencies.--Section
1861(p) (42 U.S.C. 1395x(p)) is amended--
(1) in paragraph (4)(A)(v), by inserting after ``as the
Secretary may find necessary,'' the following: ``and provides
the Secretary, to the extent required by the Secretary, on a
continuing basis with a surety bond in a form specified by
the Secretary and in an amount that is not less than
$50,000,'', and
(2) by adding at the end the following: ``The Secretary may
waive the requirement of a bond under paragraph (4)(A)(v) in
the case of a clinic or agency that provides a comparable
surety bond under State law.''.
(f) Effective Dates.--(1) The amendment made by subsection
(a) shall apply to suppliers of durable medical equipment
with respect to such equipment furnished on or after January
1, 1998.
(2) The amendments made by subsection (b) shall apply to
home health agencies with respect to services furnished on or
after such date. The Secretary of Health and Human Services
shall modify participation agreements under section
1866(a)(1) of the Social Security Act with respect to home
health agencies to provide for implementation of such
amendments on a timely basis.
(3) The amendments made by subsections (c) through (e)
shall take effect on the date of the enactment of this Act
and may be applied with respect to items and services
furnished on or after the date specified in paragraph (1).
SEC. 10308. PROVISION OF CERTAIN IDENTIFICATION NUMBERS.
(a) Requirements to Disclose Employer Identification
Numbers (EINS) and Social Security Account Numbers (SSNs).--
Section 1124(a)(1) (42 U.S.C. 1320a-3(a)(1)) is amended by
inserting before the period at the end the following: ``and
supply the Secretary with the both the employer
identification number (assigned pursuant to section 6109 of
the Internal Revenue Code of 1986) and social security
account number (assigned under section 205(c)(2)(B)) of the
disclosing entity, each person with an ownership or control
interest (as defined in subsection (a)(3)), and any
subcontractor in which the entity directly or indirectly has
a 5 percent or more ownership interest''.
(b) Other Medicare Providers.--Section 1124A (42 U.S.C.
1320a-3a) is amended--
(1) in subsection (a)--
(A) by striking ``and'' at the end of paragraph (1);
(B) by striking the period at the end of paragraph (2) and
inserting ``; and''; and
(C) by adding at the end the following new paragraph:
``(3) including the employer identification number
(assigned pursuant to section 6109 of the Internal Revenue
Code of 1986) and social security account number (assigned
under section 205(c)(2)(B)) of the disclosing part B provider
and any person, managing employee, or other entity identified
or described under paragraph (1) or (2).''; and
(2) in subsection (c) by inserting ``(or, for purposes of
subsection (a)(3), any entity receiving payment)'' after ``on
an assignment-related basis''.
(c) Verification by Social Security Administration (ssa).--
Section 1124A (42 U.S.C. 1320a-3a) is amended--
(1) by redesignating subsection (c) as subsection (d); and
(2) by inserting after subsection (b) the following new
subsection:
``(c) Verification.--
``(1) Transmittal by hhs.--The Secretary shall transmit--
``(A) to the Commissioner of Social Security information
concerning each social security account number (assigned
under section 205(c)(2)(B)), and
``(B) to the Secretary of the Treasury information
concerning each employer identification number (assigned
pursuant to section 6109 of the Internal Revenue Code of
1986),
supplied to the Secretary pursuant to subsection (a)(3) or
section 1124(c) to the extent necessary for verification of
such information in accordance with paragraph (2).
``(2) Verification.--The Commissioner of Social Security
and the Secretary of the Treasury shall verify the accuracy
of, or correct, the information supplied by the Secretary to
such official pursuant to paragraph (1), and shall report
such verifications or corrections to the Secretary.
``(3) Fees for verification.--The Secretary shall reimburse
the Commissioner and Secretary of the Treasury, at a rate
negotiated between the Secretary and such official, for the
costs incurred by such official in performing the
verification and correction services described in this
subsection.''.
(d) Report.--The Secretary of Health and Human Services
shall submit to Congress a report on steps the Secretary has
taken to assure the confidentiality of social security
account numbers that will be provided to the Secretary under
the amendments made by this section.
[[Page H4524]]
(e) Effective Dates.--
(1) The amendment made by subsection (a) shall apply to the
application of conditions of participation, and entering into
and renewal of contracts and agreements, occurring more than
90 days after the date of submission of the report under
subsection (d).
(2) The amendments made by subsection (b) shall apply to
payment for items and services furnished more than 90 days
after the date of submission of such report.
SEC. 10309. ADVISORY OPINIONS REGARDING CERTAIN PHYSICIAN
SELF-REFERRAL PROVISIONS.
Section 1877(g) (42 U.S.C. 1395nn(g)) is amended by adding
at the end the following new paragraph:
``(6) Advisory opinions.--
``(A) In general.--The Secretary shall issue written
advisory opinions concerning whether a referral relating to
designated health services (other than clinical laboratory
services) is prohibited under this section.
``(B) Binding as to secretary and parties involved.--Each
advisory opinion issued by the Secretary shall be binding as
to the Secretary and the party or parties requesting the
opinion.
``(C) Application of certain procedures.--The Secretary
shall, to the extent practicable, apply the regulations
promulgated under section 1128D(b)(5) to the issuance of
advisory opinions under this paragraph.
``(D) Applicability.--This paragraph shall apply to
requests for advisory opinions made during the period
described in section 1128D(b)(6).''.
SEC. 10310. OTHER FRAUD AND ABUSE RELATED PROVISIONS.
(a) Reference Correction.--(1) Section 1128D(b)(2)(D) (42
U.S.C. 1320a-7d(b)(2)(D)), as added by section 205 of the
Health Insurance Portability and Accountability Act of 1996,
is amended by striking ``1128B(b)'' and inserting
``1128A(b)''.
(2) Section 1128E(g)(3)(C) (42 U.S.C. 1320a-7e(g)(3)(C)) is
amended by striking ``Veterans' Administration'' and
inserting ``Department of Veterans Affairs''.
(b) Language in Definition of Conviction.--Section
1128E(g)(5) (42 U.S.C. 1320a-7e(g)(5)), as inserted by
section 221(a) of the Health Insurance Portability and
Accountability Act of 1996, is amended by striking
``paragraph (4)'' and inserting ``paragraphs (1) through
(4)''.
(c) Implementation of Exclusions.--Section 1128 (42 U.S.C.
1320a-7) is amended--
(1) in subsection (a), by striking ``any program under
title XVIII and shall direct that the following individuals
and entities be excluded from participation in any State
health care program (as defined in subsection (h))'' and
inserting ``any Federal health care program (as defined in
section 1128B(f))''; and
(2) in subsection (b), by striking ``any program under
title XVIII and may direct that the following individuals and
entities be excluded from participation in any State health
care program'' and inserting ``any Federal health care
program (as defined in section 1128B(f))''.
(d) Sanctions for Failure to Report.--Section 1128E(b) (42
U.S.C. 1320a-7e(b)), as inserted by section 221(a) of the
Health Insurance Portability and Accountability Act of 1996,
is amended by adding at the end the following:
``(6) Sanctions for failure to report.--
``(A) Health plans.--Any health plan that fails to report
information on an adverse action required to be reported
under this subsection shall be subject to a civil money
penalty of not more than $25,000 for each such adverse action
not reported. Such penalty shall be imposed and collected in
the same manner as civil money penalties under subsection (a)
of section 1128A are imposed and collected under that
section.
``(B) Governmental agencies.--The Secretary shall provide
for a publication of a public report that identifies those
Government agencies that have failed to report information on
adverse actions as required to be reported under this
subsection.''.
(e) Effective Dates.--
(1) In general.--Except as provided in this subsection, the
amendments made by this section shall be effective as if
included in the enactment of the Health Insurance Portability
and Accountability Act of 1996.
(2) Federal health program.--The amendments made by
subsection (c) shall take effect on the date of the enactment
of this Act.
(3) Sanction for failure to report.--The amendment made by
subsection (d) shall apply to failures occurring on or after
the date of the enactment of this Act.
Subtitle E--Prospective Payment Systems
CHAPTER 1--PAYMENT UNDER PART A
SEC. 10401. PROSPECTIVE PAYMENT FOR SKILLED NURSING FACILITY
SERVICES.
(a) In General.--Section 1888 (42 U.S.C. 1395yy) is amended
by adding at the end the following new subsection:
``(e) Prospective Payment.--
``(1) Payment provision.--Notwithstanding any other
provision of this title, subject to paragraph (7), the amount
of the payment for all costs (as defined in paragraph (2)(B))
of covered skilled nursing facility services (as defined in
paragraph (2)(A)) for each day of such services furnished--
``(A) in a cost reporting period during the transition
period (as defined in paragraph (2)(E)), is equal to the sum
of--
``(i) the non-Federal percentage of the facility-specific
per diem rate (computed under paragraph (3)), and
``(ii) the Federal percentage of the adjusted Federal per
diem rate (determined under paragraph (4)) applicable to the
facility; and
``(B) after the transition period is equal to the adjusted
Federal per diem rate applicable to the facility.
``(2) Definitions.--For purposes of this subsection:
``(A) Covered skilled nursing facility services.--
``(i) In general.--The term `covered skilled nursing
facility services'--
``(I) means post-hospital extended care services as defined
in section 1861(i) for which benefits are provided under part
A; and
``(II) includes all items and services (other than services
described in clause (ii)) for which payment may be made under
part B and which are furnished to an individual who is a
resident of a skilled nursing facility during the period in
which the individual is provided covered post-hospital
extended care services.
``(ii) Services excluded.--Services described in this
clause are physicians' services, services described by
clauses (i) through (iii) of section 1861(s)(2)(K), certified
nurse-midwife services, qualified psychologist services,
services of a certified registered nurse anesthetist, items
and services described in subparagraphs in (F) and (O) of
section 1861(s)(2), and, only with respect to services
furnished during 1998, the transportation costs of
electrocardiagram equipment for electrocardiogram tests
services (HCPCS Code R0076). Services described in this
clause do not include any physical, occupational, or speech-
language therapy services regardless of whether or not the
services are furnished by, or under the supervision of, a
physician or other health care professional.
``(B) All costs.--The term `all costs' means routine
service costs, ancillary costs, and capital-related costs of
covered skilled nursing facility services, but does not
include costs associated with approved educational
activities.
``(C) Non-federal percentage; federal percentage.--For--
``(i) the first cost reporting period (as defined in
subparagraph (D)) of a facility, the `non-Federal percentage'
is 75 percent and the `Federal percentage' is 25 percent;
``(ii) the next cost reporting period of such facility, the
`non-Federal percentage' is 50 percent and the `Federal
percentage' is 50 percent; and
``(iii) the subsequent cost reporting period of such
facility, the `non-Federal percentage' is 25 percent and the
`Federal percentage' is 75 percent.
``(D) First cost reporting period.--The term `first cost
reporting period' means, with respect to a skilled nursing
facility, the first cost reporting period of the facility
beginning on or after July 1, 1998.
``(E) Transition period.--
``(i) In general.--The term `transition period' means, with
respect to a skilled nursing facility, the 3 cost reporting
periods of the facility beginning with the first cost
reporting period.
``(ii) Treatment of new skilled nursing facilities.--In the
case of a skilled nursing facility that does not have a
settled cost report for a cost reporting period before July
1, 1998, payment for such services shall be made under this
subsection as if all services were furnished after the
transition period.
``(3) Determination of facility specific per diem rates.--
The Secretary shall determine a facility-specific per diem
rate for each skilled nursing facility for a cost reporting
period as follows:
``(A) Determining base payments.--The Secretary shall
determine, on a per diem basis, the total of--
``(i) the allowable costs of extended care services for the
facility for cost reporting periods beginning in 1995 with
appropriate adjustments (as determined by the Secretary) to
non-settled cost reports, and
``(ii) an estimate of the amounts that would be payable
under part B (disregarding any applicable deductibles,
coinsurance and copayments) for covered skilled nursing
facility services described in paragraph (2)(A)(i)(II)
furnished during such period to an individual who is a
resident of the facility, regardless of whether or not the
payment was made to the facility or to another entity.
``(B) Update to cost reporting period before first cost
reporting period.--The Secretary shall update the amount
determined under subparagraph (A), for each cost reporting
period after the cost reporting period described in
subparagraph (A)(i) and up to the cost reporting period
immediately preceding the first cost reporting period, by the
skilled nursing facility historical trend factor.
``(C) Updating to applicable cost reporting period.--The
Secretary shall further update such amount for each cost
reporting period beginning with the first cost reporting
period and up to and including the cost reporting period
involved by a factor equal to the skilled nursing facility
market basket percentage increase.
``(4) Federal per diem rate.--
``(A) Determination of historical per diem for freestanding
facilities.--For each freestanding skilled nursing facility
that received payments for post-hospital extended care
services during a cost reporting period beginning in fiscal
year 1995 and that was subject to (and not exempted from) the
per diem limits referred to in paragraph (1)
[[Page H4525]]
or (2) of subsection (a) (and facilities described in
subsection (d), if appropriate), the Secretary shall
estimate, on a per diem basis for such cost reporting period,
the total of--
``(i) the allowable costs of extended care services for the
facility for cost reporting periods beginning in 1995 with
appropriate adjustments (as determined by the Secretary) to
non-settled cost reports, and
``(ii) an estimate of the amounts that would be payable
under part B (disregarding any applicable deductibles,
coinsurance and copayments) for covered skilled nursing
facility services described in paragraph (2)(A)(i)(II)
furnished during such period to an individual who is a
resident of the facility, regardless of whether or not the
payment was made to the facility or to another entity.
``(B) Update to fiscal year 1998.--The Secretary shall
update the amount determined under subparagraph (A), for each
cost reporting period after the cost reporting period
described in subparagraph (A)(i) and up to the cost reporting
period immediately preceding the first cost reporting period,
by the skilled nursing facility historical trend factor for
such period.
``(C) Computation of standardized per diem rate.--The
Secretary shall standardize the amount updated under
subparagraph (B) for each facility by--
``(i) adjusting for variations among facility by area in
the average facility wage level per diem, and
``(ii) adjusting for variations in case mix per diem among
facilities.
``(D) Computation of weighted average per diem rate.--The
Secretary shall compute a weighted average per diem rate by
computing an average of the standardized amounts computed
under subparagraph (C), weighted for each facility by number
of days of extended care services furnished during the cost
reporting period referred to in subparagraph (A). The
Secretary may compute and apply such average separately for
facilities located in urban and rural areas (as defined in
section 1886(d)(2)(D)).
``(E) Updating.--
``(i) Fiscal year 1998.--For fiscal year 1998, the
Secretary shall compute for each skilled nursing facility an
unadjusted Federal per diem rate equal to the weighted
average per diem rate computed under subparagraph (D) and
applicable to the facility increased by skilled nursing
facility market basket percentage change for the fiscal year
involved.
``(ii) Subsequent fiscal years.--For each subsequent fiscal
year the Secretary shall compute for each skilled nursing
facility an unadjusted Federal per diem rate equal to the
Federal per diem rate computed under this subparagraph for
the previous fiscal year and applicable to the facility
increased by the skilled nursing facility market basket
percentage change for the fiscal year involved.
``(F) Adjustment for case mix creep.--Insofar as the
Secretary determines that such adjustments under subparagraph
(G)(i) for a previous fiscal year (or estimates that such
adjustments for a future fiscal year) did (or are likely to)
result in a change in aggregate payments under this
subsection during the fiscal year that are a result of
changes in the coding or classification of residents that do
not reflect real changes in case mix, the Secretary may
adjust unadjusted Federal per diem rates for subsequent years
so as to discount the effect of such coding or classification
changes.
``(G) Application to specific facilities.--The Secretary
shall compute for each skilled nursing facility for each
fiscal year (beginning with fiscal year 1998) an adjusted
Federal per diem rate equal to the unadjusted Federal per
diem rate determined under subparagraph (E), as adjusted
under subparagraph (F), and as further adjusted as follows:
``(i) Adjustment for case mix.--The Secretary shall provide
for an appropriate adjustment to account for case mix. Such
adjustment shall be based on a resident classification
system, established by the Secretary, that accounts for the
relative resource utilization of different patient types. The
case mix adjustment shall be based on resident assessment
data and other data that the Secretary considers appropriate.
``(ii) Adjustment for geographic variations in labor
costs.--The Secretary shall adjust the portion of such per
diem rate attributable to wages and wage-related costs for
the area in which the facility is located compared to the
national average of such costs using an appropriate wage
index as determined by the Secretary. Such adjustment shall
be done in a manner that does not result in aggregate
payments under this subsection that are greater or less than
those that would otherwise be made if such adjustment had not
been made.
``(H) Publication of information on per diem rates.--The
Secretary shall provide for publication in the Federal
Register, before the July 1 preceding each fiscal year
(beginning with fiscal year 1999), of--
``(i) the unadjusted Federal per diem rates to be applied
to days of covered skilled nursing facility services
furnished during the fiscal year,
``(ii) the case mix classification system to be applied
under subparagraph (G)(i) with respect to such services
during the fiscal year, and
``(iii) the factors to be applied in making the area wage
adjustment under subparagraph (G)(ii) with respect to such
services.
``(5) Skilled nursing facility market basket index,
percentage, and historical trend factor.--For purposes of
this subsection:
``(A) Skilled nursing facility market basket index.--The
Secretary shall establish a skilled nursing facility market
basket index that reflects changes over time in the prices of
an appropriate mix of goods and services included in covered
skilled nursing facility services.
``(B) Skilled nursing facility market basket percentage.--
The term `skilled nursing facility market basket percentage'
means, for a fiscal year or other annual period and as
calculated by the Secretary, the percentage change in the
skilled nursing facility market basket index (established
under subparagraph (A)) from the midpoint of the prior fiscal
year (or period) to the midpoint of the fiscal year (or other
period) involved.
``(C) Skilled nursing facility historical trend factor.--
The term `skilled nursing facility historical trend factor'
means, for a fiscal year or other annual period and as
calculated by the Secretary, the percentage change in the
skilled nursing facility routine cost index (used in applying
per diem routine cost limits under subsection (a)) from the
midpoint of the prior fiscal year (or period) to the midpoint
of the fiscal year (or other period) involved, reduced (on an
annualized basis) by 1 percentage point.
``(6) Submission of resident assessment data.--A skilled
nursing facility shall provide the Secretary, in a manner and
within the timeframes prescribed by the Secretary, the
resident assessment data necessary to develop and implement
the rates under this subsection. For purposes of meeting such
requirement, a skilled nursing facility may submit the
resident assessment data required under section 1819(b)(3),
using the standard instrument designated by the State under
section 1819(e)(5).
``(7) Transition for medicare low volume skilled nursing
facilities and swing bed hospitals.--
``(A) In general.--The Secretary shall determine an
appropriate manner in which to apply this subsection to the
facilities described in subparagraph (B), taking into account
the purposes of this subsection, and shall provide that at
the end of the transition period (as defined in paragraph
(2)(E)) such facilities shall be paid only under this
subsection. Payment shall not be made under this subsection
to such facilities for cost reporting periods beginning
before such date (not earlier than July 1, 1999) as the
Secretary specifies.
``(B) Facilities described.--The facilities described in
this subparagraph are--
``(i) skilled nursing facilities for which payment is made
for routine service costs during a cost reporting period,
ending prior to the date of the implementation of this
paragraph, on the basis of prospective payments under section
1888(d), or
``(ii) facilities that have in effect an agreement
described in section 1883, for which payment is made for the
furnishing of extended care services on a reasonable cost
basis under section 1814(l) (as in effect on and after such
date).
``(8) Limitation on review.--There shall be no
administrative or judicial review under section 1869, 1878,
or otherwise of--
``(A) the establishment of facility specific per diem rates
under paragraph (3);
``(B) the establishment of Federal per diem rates under
paragraph (4), including the computation of the standardized
per diem rates under paragraph (4)(C), adjustments and
corrections for case mix under paragraphs (4)(F) and
(4)(G)(i), and adjustments for variations in labor-related
costs under paragraph (4)(G)(ii); and
``(C) the establishment of transitional amounts under
paragraph (7).''.
(b) Consolidated Billing.--
(1) For snf services.--Section 1862(a) (42 U.S.C. 1395y(a))
is amended--
(A) by striking ``or'' at the end of paragraph (15),
(B) by striking the period at the end of paragraph (16) and
inserting ``; or'', and
(C) by inserting after paragraph (16) the following new
paragraph:
``(17) which are covered skilled nursing facility services
described in section 1888(e)(2)(A)(i) and which are furnished
to an individual who is a resident of a skilled nursing
facility by an entity other than the skilled nursing
facility, unless the services are furnished under
arrangements (as defined in section 1861(w)(1)) with the
entity made by the skilled nursing facility.''.
(2) Requiring payment for all part b items and services to
be made to facility.--The first sentence of section
1842(b)(6) (42 U.S.C. 1395u(b)(6)) is amended--
(A) by striking ``and (D)'' and inserting ``(D)''; and
(B) by striking the period at the end and inserting the
following: ``, and (E) in the case of an item or service
(other than services described in section 1888(e)(2)(A)(ii))
furnished to an individual who (at the time the item or
service is furnished) is a resident of a skilled nursing
facility, payment shall be made to the facility (without
regard to whether or not the item or service was furnished by
the facility, by others under arrangement with them made by
the facility, under any other contracting or consulting
arrangement, or otherwise).''.
(3) Payment rules.--Section 1888(e) (42 U.S.C. 1395yy(e)),
as added by subsection (a), is amended by adding at the end
the following:
``(9) Payment for certain services.--In the case of an item
or service furnished by a
[[Page H4526]]
skilled nursing facility (or by others under arrangement with
them made by a skilled nursing facility or under any other
contracting or consulting arrangement or otherwise) for which
payment would otherwise (but for this paragraph) be made
under part B in an amount determined in accordance with
section 1833(a)(2)(B), the amount of the payment under such
part shall be based on such existing or other fee schedules
as the Secretary establishes.
``(10) Required coding.--No payment may be made under part
B for items and services (other than services described in
paragraph (2)(A)(ii)) furnished to an individual who is a
resident of a skilled nursing facility unless the claim for
such payment includes a code (or codes) under a uniform
coding system specified by the Secretary that identifies the
items or services delivered.''.
(4) Conforming amendments.--
(A) Section 1819(b)(3)(C)(i) (42 U.S.C. 1395i-
3(b)(3)(C)(i)) is amended by striking ``Such'' and inserting
``Subject to the timeframes prescribed by the Secretary under
section 1888(t)(6), such''.
(B) Section 1832(a)(1) (42 U.S.C. 1395k(a)(1)) is amended
by striking ``(2);'' and inserting ``(2) and section
1842(b)(6)(E);''.
(C) Section 1833(a)(2)(B) (42 U.S.C. 1395l(a)(2)(B)) is
amended by inserting ``or section 1888(e)(9)'' after
``section 1886''.
(D) Section 1861(h) (42 U.S.C 1395x(h)) is amended--
(i) in the opening paragraph, by striking ``paragraphs (3)
and (6)'' and inserting ``paragraphs (3), (6), and (7)'', and
(ii) in paragraph (7), after ``skilled nursing
facilities'', by inserting ``, or by others under
arrangements with them made by the facility''.
(E) Section 1866(a)(1)(H) (42 U.S.C. 1395cc(a)(1)(H)) is
amended--
(i) by redesignating clauses (i) and (ii) as subclauses (I)
and (II) respectively,
(ii) by inserting ``(i)'' after ``(H)'', and
(iii) by adding after clause (i), as so redesignated, the
following new clause:
``(ii) in the case of skilled nursing facilities which
provide covered skilled nursing facility services--
``(I) that are furnished to an individual who is a resident
of the skilled nursing facility, and
``(II) for which the individual is entitled to have payment
made under this title,
to have items and services (other than services described in
section 1888(e)(2)(A)(ii)) furnished by the skilled nursing
facility or otherwise under arrangements (as defined in
section 1861(w)(1)) made by the skilled nursing facility,''.
(c) Medical Review Process.--In order to ensure that
medicare beneficiaries are furnished appropriate services in
skilled nursing facilities, the Secretary of Health and Human
Services shall establish and implement a thorough medical
review process to examine the effects of the amendments made
by this section on the quality of covered skilled nursing
facility services furnished to medicare beneficiaries. In
developing such a medical review process, the Secretary shall
place a particular emphasis on the quality of non-routine
covered services and physicians' services for which payment
is made under title XVIII of the Social Security Act for
which payment is made under section 1848 of such Act.
(d) Effective Date.--The amendments made by this section
are effective for cost reporting periods beginning on or
after July 1, 1998; except that the amendments made by
subsection (b) shall apply to items and services furnished on
or after July 1, 1998.
SEC. 10402. PROSPECTIVE PAYMENT FOR INPATIENT REHABILITATION
HOSPITAL SERVICES.
(a) In General.--Section 1886 (42 U.S.C. 1395ww) is amended
by adding at the end the following new subsection:
``(j) Prospective Payment for Inpatient Rehabilitation
Services.--
``(1) Payment during transition period.--
``(A) In general.--Notwithstanding section 1814(b), but
subject to the provisions of section 1813, the amount of the
payment with respect to the operating and capital costs of
inpatient hospital services of a rehabilitation hospital or a
rehabilitation unit (in this subsection referred to as a
`rehabilitation facility'), in a cost reporting period
beginning on or after October 1, 2000, and before October 1,
2003, is equal to the sum of--
``(i) the TEFRA percentage (as defined in subparagraph (C))
of the amount that would have been paid under part A with
respect to such costs if this subsection did not apply, and
``(ii) the prospective payment percentage (as defined in
subparagraph (C)) of the product of (I) the per unit payment
rate established under this subsection for the fiscal year in
which the payment unit of service occurs, and (II) the number
of such payment units occurring in the cost reporting period.
``(B) Fully implemented system.--Notwithstanding section
1814(b), but subject to the provisions of section 1813, the
amount of the payment with respect to the operating and
capital costs of inpatient hospital services of a
rehabilitation facility for a payment unit in a cost
reporting period beginning on or after October 1, 2003, is
equal to the per unit payment rate established under this
subsection for the fiscal year in which the payment unit of
service occurs.
``(C) TEFRA and prospective payment percentages
specified.--For purposes of subparagraph (A), for a cost
reporting period beginning--
``(i) on or after October 1, 2000, and before October 1,
2001, the `TEFRA percentage' is 75 percent and the
`prospective payment percentage' is 25 percent;
``(ii) on or after October 1, 2001, and before October 1,
2002, the `TEFRA percentage' is 50 percent and the
`prospective payment percentage' is 50 percent; and
``(iii) on or after October 1, 2002, and before October 1,
2003, the `TEFRA percentage' is 25 percent and the
`prospective payment percentage' is 75 percent.
``(D) Payment unit.--For purposes of this subsection, the
term `payment unit' means a discharge, day of inpatient
hospital services, or other unit of payment defined by the
Secretary.
``(2) Patient case mix groups.--
``(A) Establishment.--The Secretary shall establish--
``(i) classes of patients of rehabilitation facilities
(each in this subsection referred to as a `case mix group'),
based on such factors as the Secretary deems appropriate,
which may include impairment, age, related prior
hospitalization, comorbidities, and functional capability of
the patient; and
``(ii) a method of classifying specific patients in
rehabilitation facilities within these groups.
``(B) Weighting factors.--For each case mix group the
Secretary shall assign an appropriate weighting which
reflects the relative facility resources used with respect to
patients classified within that group compared to patients
classified within other groups.
``(C) Adjustments for case mix.--
``(i) In general.--The Secretary shall from time to time
adjust the classifications and weighting factors established
under this paragraph as appropriate to reflect changes in
treatment patterns, technology, case mix, number of payment
units for which payment is made under this title, and other
factors which may affect the relative use of resources. Such
adjustments shall be made in a manner so that changes in
aggregate payments under the classification system are a
result of real changes and are not a result of changes in
coding that are unrelated to real changes in case mix.
``(ii) Adjustment.--Insofar as the Secretary determines
that such adjustments for a previous fiscal year (or
estimates that such adjustments for a future fiscal year) did
(or are likely to) result in a change in aggregate payments
under the classification system during the fiscal year that
are a result of changes in the coding or classification of
patients that do not reflect real changes in case mix, the
Secretary shall adjust the per payment unit payment rate for
subsequent years so as to discount the effect of such coding
or classification changes.
``(D) Data collection.--The Secretary is authorized to
require rehabilitation facilities that provide inpatient
hospital services to submit such data as the Secretary deems
necessary to establish and administer the prospective payment
system under this subsection.
``(3) Payment rate.--
``(A) In general.--The Secretary shall determine a
prospective payment rate for each payment unit for which such
rehabilitation facility is entitled to receive payment under
this title. Subject to subparagraph (B), such rate for
payment units occurring during a fiscal year shall be based
on the average payment per payment unit under this title for
inpatient operating and capital costs of rehabilitation
facilities using the most recent data available (as estimated
by the Secretary as of the date of establishment of the
system) adjusted--
``(i) by updating such per-payment-unit amount to the
fiscal year involved by the weighted average of the
applicable percentage increases provided under subsection
(b)(3)(B)(ii) (for cost reporting periods beginning during
the fiscal year) covering the period from the midpoint of the
period for such data through the midpoint of fiscal year 2000
and by an increase factor (described in subparagraph (C))
specified by the Secretary for subsequent fiscal years up to
the fiscal year involved;
``(ii) by reducing such rates by a factor equal to the
proportion of payments under this subsection (as estimated by
the Secretary) based on prospective payment amounts which are
additional payments described in paragraph (4) (relating to
outlier and related payments) or paragraph (7);
``(iii) for variations among rehabilitation facilities by
area under paragraph (6);
``(iv) by the weighting factors established under paragraph
(2)(B); and
``(v) by such other factors as the Secretary determines are
necessary to properly reflect variations in necessary costs
of treatment among rehabilitation facilities.
``(B) Budget neutral rates.--The Secretary shall establish
the prospective payment amounts under this subsection for
payment units during fiscal years 2001 through 2004 at levels
such that, in the Secretary's estimation, the amount of total
payments under this subsection for such fiscal years
(including any payment adjustments pursuant to paragraphs
(4), (6), and (7)) shall be equal to 99 percent of the amount
of payments that would have been made under this title during
the fiscal years for operating and capital costs of
rehabilitation facilities had this subsection not been
enacted. In establishing such payment amounts, the Secretary
shall consider the effects of the prospective payment system
established under
[[Page H4527]]
this subsection on the total number of payment units from
rehabilitation facilities and other factors described in
subparagraph (A).
``(C) Increase factor.--For purposes of this subsection for
payment units in each fiscal year (beginning with fiscal year
2001), the Secretary shall establish an increase factor. Such
factor shall be based on an appropriate percentage increase
in a market basket of goods and services comprising services
for which payment is made under this subsection, which may be
the market basket percentage increase described in subsection
(b)(3)(B)(iii).
``(4) Outlier and special payments.--
``(A) Outliers.--
``(i) In general.--The Secretary may provide for an
additional payment to a rehabilitation facility for patients
in a case mix group, based upon the patient being classified
as an outlier based on an unusual length of stay, costs, or
other factors specified by the Secretary.
``(ii) Payment based on marginal cost of care.--The amount
of such additional payment under clause (i) shall be
determined by the Secretary and shall approximate the
marginal cost of care beyond the cutoff point applicable
under clause (i).
``(iii) Total payments.--The total amount of the additional
payments made under this subparagraph for payment units in a
fiscal year may not exceed 5 percent of the total payments
projected or estimated to be made based on prospective
payment rates for payment units in that year.
``(B) Adjustment.--The Secretary may provide for such
adjustments to the payment amounts under this subsection as
the Secretary deems appropriate to take into account the
unique circumstances of rehabilitation facilities located in
Alaska and Hawaii.
``(5) Publication.--The Secretary shall provide for
publication in the Federal Register, on or before September 1
before each fiscal year (beginning with fiscal year 2001, of
the classification and weighting factors for case mix groups
under paragraph (2) for such fiscal year and a description of
the methodology and data used in computing the prospective
payment rates under this subsection for that fiscal year.
``(6) Area wage adjustment.--The Secretary shall adjust the
proportion, (as estimated by the Secretary from time to time)
of rehabilitation facilities' costs which are attributable to
wages and wage-related costs, of the prospective payment
rates computed under paragraph (3) for area differences in
wage levels by a factor (established by the Secretary)
reflecting the relative hospital wage level in the geographic
area of the rehabilitation facility compared to the national
average wage level for such facilities. Not later than
October 1, 2001 (and at least every 36 months thereafter),
the Secretary shall update the factor under the preceding
sentence on the basis of a survey conducted by the Secretary
(and updated as appropriate) of the wages and wage-related
costs incurred in furnishing rehabilitation services. Any
adjustments or updates made under this paragraph for a fiscal
year shall be made in a manner that assures that the
aggregated payments under this subsection in the fiscal year
are not greater or less than those that would have been made
in the year without such adjustment.
``(7) Additional adjustments.--The Secretary may provide by
regulation for--
``(A) an additional payment to take into account indirect
costs of medical education and the special circumstances of
hospitals that serve a significantly disproportionate number
of low-income patients in a manner similar to that provided
under subparagraphs (B) and (F), respectively, of subsection
(d)(5); and
``(B) such other exceptions and adjustments to payment
amounts under this subsection in a manner similar to that
provided under subsection (d)(5)(I) in relation to payments
under subsection (d).
``(8) Limitation on review.--There shall be no
administrative or judicial review under section 1869, 1878,
or otherwise of--
``(A) the establishment of case mix groups, of the
methodology for the classification of patients within such
groups, and of the appropriate weighting factors thereof
under paragraph (2),
``(B) the establishment of the prospective payment rates
under paragraph (3),
``(C) the establishment of outlier and special payments
under paragraph (4),
``(D) the establishment of area wage adjustments under
paragraph (6), and
``(E) the establishment of additional adjustments under
paragraph (7).''.
(b) Conforming Amendments.--Section 1886(b) of such Act (42
U.S.C. 1395ww(b)) is amended--
(1) in paragraph (1), by inserting ``and other than a
rehabilitation facility described in subsection (j)(1)''
after ``subsection (d)(1)(B)'', and
(2) in paragraph (3)(B)(i), by inserting ``and subsection
(j)'' after ``For purposes of subsection (d)''.
(c) Effective Date.--The amendments made by this section
shall apply to cost reporting periods beginning on or after
October 1, 2000, except that the Secretary of Health and
Human Services may require the submission of data under
section 1886(j)(2)(D) of the Social Security Act (as added by
subsection (a)) on and after the date of the enactment of
this section.
CHAPTER 2--PAYMENT UNDER PART B
Subchapter A--Payment for Hospital Outpatient Department Services
SEC. 10411. ELIMINATION OF FORMULA-DRIVEN OVERPAYMENTS (FDO)
FOR CERTAIN OUTPATIENT HOSPITAL SERVICES.
(a) Elimination of FDO for Ambulatory Surgical Center
Procedures.--Section 1833(i)(3)(B)(i)(II) (42 U.S.C.
1395l(i)(3)(B)(i)(II)) is amended--
(1) by striking ``of 80 percent''; and
(2) by striking the period at the end and inserting the
following: ``, less the amount a provider may charge as
described in clause (ii) of section 1866(a)(2)(A).''.
(b) Elimination of FDO for Radiology Services and
Diagnostic Procedures.--Section 1833(n)(1)(B)(i) (42 U.S.C.
1395l(n)(1)(B)(i)) is amended--
(1) by striking ``of 80 percent'', and
(2) by inserting before the period at the end the
following: ``, less the amount a provider may charge as
described in clause (ii) of section 1866(a)(2)(A)''.
(c) Effective Date.--The amendments made by this section
shall apply to services furnished during portions of cost
reporting periods occurring on or after October 1, 1997.
SEC. 10412. EXTENSION OF REDUCTIONS IN PAYMENTS FOR COSTS OF
HOSPITAL OUTPATIENT SERVICES.
(a) Reduction in Payments for Capital-Related Costs.--
Section 1861(v)(1)(S)(ii)(I) (42 U.S.C.
1395x(v)(1)(S)(ii)(I)) is amended by striking ``through
1998'' and inserting ``through 1999 and during fiscal year
2000 before January 1, 2000''.
(b) Reduction in Payments for Other Costs.--Section
1861(v)(1)(S)(ii)(II) (42 U.S.C. 1395x(v)(1)(S)(ii)(II)) is
amended by striking ``through 1998'' and inserting ``through
1999 and during fiscal year 2000 before January 1, 2000''.
SEC. 10413. PROSPECTIVE PAYMENT SYSTEM FOR HOSPITAL
OUTPATIENT DEPARTMENT SERVICES.
(a) In General.--Section 1833 (42 U.S.C. 1395l) is amended
by adding at the end the following:
``(t) Prospective Payment System for Hospital Outpatient
Department Services.--
``(1) In general.--With respect to hospital outpatient
services designated by the Secretary (in this section
referred to as `covered OPD services') and furnished during a
year beginning with 1999, the amount of payment under this
part shall be determined under a prospective payment system
established by the Secretary in accordance with this
subsection.
``(2) System requirements.--Under the payment system--
``(A) the Secretary shall develop a classification system
for covered OPD services;
``(B) the Secretary may establish groups of covered OPD
services, within the classification system described in
subparagraph (A), so that services classified within each
group are comparable clinically and with respect to the use
of resources;
``(C) the Secretary shall, using data on claims from 1996
and using data from the most recent available cost reports,
establish relative payment weights for covered OPD services
(and any groups of such services described in subparagraph
(B)) based on median hospital costs and shall determine
projections of the frequency of utilization of each such
service (or group of services) in 1999;
``(D) the Secretary shall determine a wage adjustment
factor to adjust the portion of payment and coinsurance
attributable to labor-related costs for relative differences
in labor and labor-related costs across geographic regions in
a budget neutral manner;
``(E) the Secretary shall establish other adjustments, in a
budget neutral manner, as determined to be necessary to
ensure equitable payments, such as outlier adjustments,
adjustments to account for variations in coinsurance payments
for procedures with similar resource costs, or adjustments
for certain classes of hospitals; and
``(F) the Secretary shall develop a method for controlling
unnecessary increases in the volume of covered OPD services.
``(3) Calculation of base amounts.--
``(A) Aggregate amounts that would be payable if
deductibles were disregarded.--The Secretary shall estimate
the total amounts that would be payable from the Trust Fund
under this part for covered OPD services in 1999, determined
without regard to this subsection, as though the deductible
under section 1833(b) did not apply, and as though the
coinsurance described in section 1866(a)(2)(A)(ii) (as in
effect before the date of the enactment of this subsection)
continued to apply.
``(B) Unadjusted copayment amount.--
``(i) In general.--For purposes of this subsection, subject
to clause (ii), the `unadjusted copayment amount' applicable
to a covered OPD service (or group of such services) is 20
percent of national median of the charges for the service (or
services within the group) furnished during 1996, updated to
1999 using the Secretary's estimate of charge growth during
the period.
``(ii) Adjusted to be 20 percent when fully phased in.--If
the pre-deductible payment percentage for a covered OPD
service (or group of such services) furnished in a year would
be equal to or exceed 80 percent, then the unadjusted
copayment amount shall be 25 percent of amount determined
under subparagraph (D)(i).
``(iii) Rules for new services.--The Secretary shall
establish rules for establishment of an unadjusted copayment
amount for a
[[Page H4528]]
covered OPD service not furnished during 1996, based upon its
classification within a group of such services.
``(C) Calculation of conversion factors.--
``(i) For 1999.--
``(I) In general.--The Secretary shall establish a 1999
conversion factor for determining the medicare pre-deductible
OPD fee payment amounts for each covered OPD service (or
group of such services) furnished in 1999. Such conversion
factor shall be established on the basis of the weights and
frequencies described in paragraph (2)(C) and in a manner
such that the sum for all services and groups of the products
(described in subclause (II) for each such service or group)
equals the total projected amount described in subparagraph
(A).
``(II) Product described.--The product described in this
subclause, for a service or group, is the product of the
medicare pre-deductible OPD fee payment amounts (taking into
account appropriate adjustments described in paragraphs
(2)(D) and (2)(E)) and the frequencies for such service or
group.
``(ii) Subsequent years.--Subject to paragraph (8)(B), the
Secretary shall establish a conversion factor for covered OPD
services furnished in subsequent years in an amount equal to
the conversion factor established under this subparagraph and
applicable to such services furnished in the previous year
increased by the OPD payment increase factor specified under
clause (iii) for the year involved.
``(iii) OPD payment increase factor.--For purposes of this
subparagraph, the `OPD payment increase factor' for services
furnished in a year is equal to the sum of--
``(I) market basket percentage increase (applicable under
section 1886(b)(3)(B)(iii) to hospital discharges occurring
during the fiscal year ending in such year, and
``(II) in the case of a covered OPD service (or group of
such services) furnished in a year in which the pre-
deductible payment percentage would not exceed 80 percent,
3.5 percentage points, but in no case greater than such
number of percentage points as will result in the pre-
deductible payment percentage exceeding 80 percent.
In applying the previous sentence for years beginning with
2000, the Secretary may substitute for the market basket
percentage increase under subclause (I) an annual percentage
increase that is computed and applied with respect to covered
OPD services furnished in a year in the same manner as the
market basket percentage increase is determined and applied
to inpatient hospital services for discharges occurring in a
fiscal year.
``(D) Pre-deductible payment percentage.--The pre-
deductible payment percentage for a covered OPD service (or
group of such services) furnished in a year is equal to the
ratio of--
``(i) the conversion factor established under subparagraph
(C) for the year, multiplied by the weighting factor
established under paragraph (2)(C) for the service (or
group), to
``(ii) the sum of the amount determined under clause (i)
and the unadjusted copayment amount determined under
subparagraph (B) for such service or group.
``(E) Calculation of medicare opd fee schedule amounts.--
The Secretary shall compute a medicare OPD fee schedule
amount for each covered OPD service (or group of such
services) furnished in a year, in an amount equal to the
product of--
``(i) the conversion factor computed under subparagraph (C)
for the year, and
``(ii) the relative payment weight (determined under
paragraph (2)(C)) for the service or group.
``(4) Medicare payment amount.--The amount of payment made
from the Trust Fund under this part for a covered OPD service
(and such services classified within a group) furnished in a
year is determined as follows:
``(A) Fee schedule and copayment amount.--Add (i) the
medicare OPD fee schedule amount (computed under paragraph
(3)(E)) for the service or group and year, and (ii) the
unadjusted copayment amount (determined under paragraph
(3)(B)) for the service or group.
``(B) Subtract applicable deductible.--Reduce the sum
determined under subparagraph (A) by the amount of the
deductible under section 1833(b), to the extent applicable.
``(C) Apply payment proportion to remainder.--Multiply the
amount so determined under subparagraph (B) by the pre-
deductible payment percentage (as determined under paragraph
(3)(D)) for the service or group and year involved.
``(D) Labor-related adjustment.--The amount of payment is
the product determined under subparagraph (C) with the labor-
related portion of such product adjusted for relative
differences in the cost of labor and other factors determined
by the Secretary, as computed under paragraph (2)(D).
``(5) Copayment amount.--
``(A) In general.--Except as provided in subparagraph (B),
the copayment amount under this subsection is determined as
follows:
``(i) Unadjusted copayment.--Compute the amount by which
the amount described in paragraph (4)(B) exceeds the amount
of payment determined under paragraph (4)(C).
``(ii) Labor adjustment.--The copayment amount is the
difference determined under clause (i) with the labor-related
portion of such difference adjusted for relative differences
in the cost of labor and other factors determined by the
Secretary, as computed under paragraphs (2)(D). The
adjustment under this clause shall be made in a manner that
does not result in any change in the aggregate copayments
made in any year if the adjustment had not been made.
``(B) Election to offer reduced copayment amount.--The
Secretary shall establish a procedure under which a hospital,
before the beginning of a year (beginning with 1999), may
elect to reduce the copayment amount otherwise established
under subparagraph (A) for some or all covered OPD services
to an amount that is not less than 25 percent of the medicare
OPD fee schedule amount (computed under paragraph (3)(E)) for
the service involved, adjusted for relative differences in
the cost of labor and other factors determined by the
Secretary, as computed under subparagraphs (D) and (E) of
paragraph (2). Under such procedures, such reduced copayment
amount may not be further reduced or increased during the
year involved and the hospital may disseminate information on
the reduction of copayment amount effected under this
subparagraph.
``(C) No impact on deductibles.--Nothing in this paragraph
shall be construed as affecting a hospital's authority to
waive the charging of a deductible under section 1833(b).
``(6) Periodic review and adjustments components of
prospective payment system.--
``(A) Periodic review.--The Secretary may periodically
review and revise the groups, the relative payment weights,
and the wage and other adjustments described in paragraph (2)
to take into account changes in medical practice, changes in
technology, the addition of new services, new cost data, and
other relevant information and factors.
``(B) Budget neutrality adjustment.--If the Secretary makes
adjustments under subparagraph (A), then the adjustments for
a year may not cause the estimated amount of expenditures
under this part for the year to increase or decrease from the
estimated amount of expenditures under this part that would
have been made if the adjustments had not been made.
``(C) Update factor.--If the Secretary determines under
methodologies described in subparagraph (2)(F) that the
volume of services paid for under this subsection increased
beyond amounts established through those methodologies, the
Secretary may appropriately adjust the update to the
conversion factor otherwise applicable in a subsequent year.
``(7) Special rule for ambulance services.--The Secretary
shall pay for hospital outpatient services that are ambulance
services on the basis described in the matter in subsection
(a)(1) preceding subparagraph (A).
``(8) Special rules for certain hospitals.--In the case of
hospitals described in section 1886(d)(1)(B)(v)--
``(A) the system under this subsection shall not apply to
covered OPD services furnished before January 1, 2000; and
``(B) the Secretary may establish a separate conversion
factor for such services in a manner that specifically takes
into account the unique costs incurred by such hospitals by
virtue of their patient population and service intensity.
``(9) Limitation on review.--There shall be no
administrative or judicial review under section 1869, 1878,
or otherwise of--
``(A) the development of the classification system under
paragraph (2), including the establishment of groups and
relative payment weights for covered OPD services, of wage
adjustment factors, other adjustments, and methods described
in paragraph (2)(F);
``(B) the calculation of base amounts under paragraph (3);
``(C) periodic adjustments made under paragraph (6); and
``(D) the establishment of a separate conversion factor
under paragraph (8)(B).''.
(b) Coinsurance.--Section 1866(a)(2)(A)(ii) (42 U.S.C.
1395cc(a)(2)(A)(ii)) is amended by adding at the end the
following: ``In the case of items and services for which
payment is made under part B under the prospective payment
system established under section 1833(t), clause (ii) of the
first sentence shall be applied by substituting for 20
percent of the reasonable charge, the applicable copayment
amount established under section 1833(t)(5).''.
(c) Treatment of Reduction in Copayment Amount.--Section
1128A(i)(6) (42 U.S.C. 1320a-7a(i)(6)) is amended--
(1) by striking ``or'' at the end of subparagraph (B),
(2) by striking the period at the end of subparagraph (C)
and inserting ``; or'', and
(3) by adding at the end the following new subparagraph:
``(D) a reduction in the copayment amount for covered OPD
services under section 1833(t)(5)(B).''.
(d) Conforming Amendments.--
(1) Approved asc procedures performed in hospital
outpatient departments.--
(A)(i) Section 1833(i)(3)(A) (42 U.S.C. 13951(i)(3)(A)) is
amended--
(I) by inserting ``before January 1, 1999,'' after
``furnished'', and
(II) by striking ``in a cost reporting period''.
(ii) The amendment made by clause (i) shall apply to
services furnished on or after January 1, 1999.
(B) Section 1833(a)(4) (42 U.S.C. 13951(a)(4)) is amended
by inserting ``or subsection (t)'' before the semicolon.
[[Page H4529]]
(2) Radiology and other diagnostic procedures.--
(A) Section 1833(n)(1)(A) (42 U.S.C. 1395l(n)(1)(A)) is
amended by inserting ``and before January 1, 1999,'' after
``October 1, 1988,'' and after ``October 1, 1989,''.
(B) Section 1833(a)(2)(E) (42 U.S.C. 1395l(a)(2)(E)) is
amended by inserting ``or, for services or procedures
performed on or after January 1, 1999, (t)'' before the
semicolon.
(3) Other hospital outpatient services.--Section -
1833(a)(2)(B) (42 U.S.C. 1395l(a)(2)(B)) is amended--
(A) in clause (i), by inserting ``furnished before January
1, 1999,'' after ``(i)'',
(B) in clause (ii), by inserting ``before January 1,
1999,'' after ``furnished'',
(C) by redesignating clause (iii) as clause (iv), and
(D) by inserting after clause (ii), the following new
clause:
``(iii) if such services are furnished on or after January
1, 1999, the amount determined under subsection (t), or''.
Subchapter B--Rehabilitation Services
SEC. 10421. REHABILITATION AGENCIES AND SERVICES.
(a) Payment Based on Fee Schedule.--
(1) Special payment rules.--Section 1833(a) (42 U.S.C.
1395l(a)) is amended--
(A) in paragraph (2) in the matter before subparagraph (A),
by inserting ``(C),'' before ``(D)'';
(B) in paragraph (6), by striking ``and'' at the end;
(C) in paragraph (7), by striking the period at the end and
inserting ``; and'';
(D) by adding at the end the following new paragraph:
``(8) in the case of services described in section
1832(a)(2)(C) (that are not described in section
1832(a)(2)(B)), the amounts described in section 1834(k).''.
(2) Payment rates.--Section 1834 (42 U.S.C. 1395m) is
amended by adding at the end the following new subsection:
``(k) Payment for Outpatient Therapy Services.--
``(1) In general.--With respect to outpatient physical
therapy services (which includes outpatient speech-language
pathology services) and outpatient occupational therapy
services for which payment is determined under this
subsection, the payment basis shall be--
``(A) for services furnished during 1998, the amount
determined under paragraph (2); or
``(B) for services furnished during a subsequent year, 80
percent of the lesser of--
``(i) the actual charge for the services, or
``(ii) the applicable fee schedule amount (as defined in
paragraph (3)) for the services.
``(2) Payment in 1998 based upon adjusted reasonable
costs.--The amount under this paragraph for services is the
lesser of--
``(A) the charges imposed for the services, or
``(B) the adjusted reasonable costs (as defined in
paragraph (4)) for the services,
less 20 percent of the amount of the charges imposed for such
services.
``(3) Applicable fee schedule amount.--In this paragraph,
the term `applicable fee schedule amount' means, with respect
to services furnished in a year, the fee schedule amount
established under section 1848 for such services furnished
during the year or, if there is no such fee schedule amount
established for such services, for such comparable services
as the Secretary specifies.
``(4) Adjusted reasonable costs.--In paragraph (2), the
term `adjusted reasonable costs' means reasonable costs
determined reduced by--
``(A) 5.8 percent of the reasonable costs for operating
costs, and
``(B) 10 percent of the reasonable costs for capital costs.
``(5) Uniform coding.--For claims for services submitted on
or after April 1, 1998, for which the amount of payment is
determined under this subsection, the claim shall include a
code (or codes) under a uniform coding system specified by
the Secretary that identifies the services furnished.
``(6) Restraint on billing.--The provisions of
subparagraphs (A) and (B) of section 1842(b)(18) shall apply
to therapy services for which payment is made under this
subsection in the same manner as they apply to services
provided by a practitioner described in section
1842(b)(18)(C).''.
(b) Application of Standards to Outpatient Occupational and
Physical Therapy Services Provided As an Incident to a
Physician's Professional Services.--Section 1862(a), as
amended by section 10401(b), (42 U.S.C. 1395y(a)) is
amended--
(1) by striking ``or'' at the end of paragraph (16);
(2) by striking the period at the end of paragraph (17) and
inserting ``; or''; and
(3) by inserting after paragraph (17) the following:
``(18) in the case of outpatient occupational therapy
services or outpatient physical therapy services furnished as
an incident to a physician's professional services (as
described in section 1861(s)(2)(A)), that do not meet the
standards and conditions under the second sentence of section
1861(g) or 1861(p) as such standards and conditions would
apply to such therapy services if furnished by a
therapist.''.
(c) Applying Financial Limitation to All Rehabilitation
Services.--Section 1833(g) (42 U.S.C. 1395l(g)) is amended--
(1) in the first sentence, by striking ``services described
in the second sentence of section 1861(p)'' and inserting
``physical therapy services of the type described in section
1861(p) (regardless of who furnishes the services or whether
the services may be covered as physicians' services so long
as the services are furnished other than in a hospital
setting)'', and
(2) in the second sentence, by striking ``outpatient
occupational therapy services which are described in the
second sentence of section 1861(p) through the operation of
section 1861(g)'' and inserting ``occupational therapy
services (of the type that are described in section 1861(p)
through the operation of section 1861(g)), regardless of who
furnishes the services or whether the services may be covered
as physicians' services so long as the services are furnished
other than in a hospital setting''.
(d) Indexing Limitation.--Section 1833(g) (42 U.S.C.
1395l(g)), as amended by subsection (c), is further amended--
(1) by striking ``$900'' each place it appears and
inserting ``the amount specified in paragraph (2) for the
year'',
(2) by inserting ``(1)'' after ``(g)'',
(3) by designating the last sentence as a paragraph (3),
and
(4) by inserting before paragraph (3), as so designated,
the following:
``(2) The amount specified in this paragraph--
``(A) for 1999, and each preceding year, is $900, and
``(B) for a subsequent year is the amount specified in this
paragraph for the preceding year increased by the Secretary's
estimate of the projected percentage growth in real gross
domestic product per capita from the fiscal year ending in
the preceding year to the fiscal year ending in such
subsequent year.''.
(e) Effective Date.--The amendments made by this section
apply to services furnished on or after January 1, 1998;
except that the amendments made by subsection (c) apply to
services furnished on or after January 1, 1999.
SEC. 10422. COMPREHENSIVE OUTPATIENT REHABILITATION
FACILITIES (CORF).
(a) Payment Based on Fee Schedule.--
(1) Special payment rules.--Section 1833(a) (42 U.S.C.
1395l(a)), as amended by section 10421(a), is amended--
(A) in paragraph (3), by striking ``subparagraphs (D) and
(E) of section 1832(a)(2)'' and inserting ``section
1832(a)(2)(E)'';
(B) in paragraph (7), by striking ``and'' at the end;
(C) in paragraph (8), by striking the period at the end and
inserting ``; and'';
(D) by adding at the end the following new paragraph:
``(9) in the case of services described in section
1832(a)(2)(E), the amounts described in section 1834(k).''.
(2) Payment rates.--Section 1834(k) (42 U.S.C. 1395m(k)),
as added by section 10421(a), is amended--
(A) in the heading, by inserting ``and Comprehensive
Outpatient Rehabilitation Facility Services'' after ``Therapy
Services''; and
(B) in paragraph (1), by inserting ``and with respect to
comprehensive outpatient rehabilitation facility services''
after ``occupational therapy services''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply to services furnished on or after January 1,
1998, and to portions of cost reporting periods occurring on
or after such date.
Subchapter C--Ambulance Services
SEC. 10431. PAYMENTS FOR AMBULANCE SERVICES.
(a) Interim Reductions.--
(1) Payments determined on reasonable cost basis.--Section
1861(v)(1) (42 U.S.C. 1395x(v)(1)) is amended by adding at
the end the following new subparagraph:
``(U) In determining the reasonable cost of ambulance
services (as described in subsection (s)(7)) provided during
a fiscal year (beginning with fiscal year 1998 and ending
with fiscal year 2002), the Secretary shall not recognize any
costs in excess of costs recognized as reasonable for
ambulance services provided during the previous fiscal year
after application of this subparagraph, increased by the
percentage increase in the consumer price index for all urban
consumers (U.S. city average) as estimated by the Secretary
for the 12-month period ending with the midpoint of the
fiscal year involved reduced (in the case of each of fiscal
years 1998 and 1999) by 1 percentage point.''.
(2) Payments determined on reasonable charge basis.--
Section 1842(b) (42 U.S.C. 1395u(b)) is amended by adding at
the end the following new paragraph:
``(19) For purposes of section 1833(a)(1), the reasonable
charge for ambulance services (as described in section
1861(s)(7)) provided during a fiscal year (beginning with
fiscal year 1998 and ending with fiscal year 2002) may not
exceed the reasonable charge for such services provided
during the previous fiscal year after the application of this
paragraph, increased by the percentage increase in the
consumer price index for all urban consumers (U.S. city
average) as estimated by the Secretary for the 12-month
period ending with the midpoint of the year involved reduced
(in the case of each of fiscal years 1998 and 1999) by 1
percentage point.''.
(b) Establishment of Prospective Fee Schedule.--
(1) Payment in accordance with fee schedule.--Section
1833(a)(1) (42 U.S.C. 1395l(a)(1)), as amended by section
10619(b)(1), is amended--
(A) by striking ``and (P)'' and inserting ``(P)''; and
[[Page H4530]]
(B) by striking the semicolon at the end and inserting the
following: ``, and (Q) with respect to ambulance service, the
amounts paid shall be 80 percent of the lesser of the actual
charge for the services or the amount determined by a fee
schedule established by the Secretary under section
1834(l);''.
(2) Establishment of schedule.--Section 1834 (42 U.S.C.
1395m), as amended by section 10421(a)(2), is amended by
adding at the end the following new subsection:
``(l) Establishment of Fee Schedule for Ambulance
Services.--
``(1) In general.--The Secretary shall establish a fee
schedule for payment for ambulance services under this part
through a negotiated rulemaking process described in title 5,
United States Code, and in accordance with the requirements
of this subsection.
``(2) Considerations.--In establishing such fee schedule
the Secretary shall--
``(A) establish mechanisms to control increases in
expenditures for ambulance services under this part;
``(B) establish definitions for ambulance services which
link payments to the type of services provided;
``(C) consider appropriate regional and operational
differences;
``(D) consider adjustments to payment rates to account for
inflation and other relevant factors; and
``(E) phase in the application of the payment rates under
the fee schedule in an efficient and fair manner.
``(3) Savings.--In establishing such fee schedule the
Secretary shall--
``(A) ensure that the aggregate amount of payments made for
ambulance services under this part during 2000 does not
exceed the aggregate amount of payments which would have been
made for such services under this part during such year if
the amendments made by section 10431 of the Balanced Budget
Act of 1997 had not been made; and
``(B) set the payment amounts provided under the fee
schedule for services furnished in 2001 and each subsequent
year at amounts equal to the payment amounts under the fee
schedule for service furnished during the previous year,
increased by the percentage increase in the consumer price
index for all urban consumers (U.S. city average) for the 12-
month period ending with June of the previous year.
``(4) Consultation.--In establishing the fee schedule for
ambulance services under this subsection, the Secretary shall
consult with various national organizations representing
individuals and entities who furnish and regulate ambulance
services and share with such organizations relevant data in
establishing such schedule.
``(5) Limitation on review.--There shall be no
administrative or judicial review under section 1869 or
otherwise of the amounts established under the fee schedule
for ambulance services under this subsection, including
matters described in paragraph (2).
``(6) Restraint on billing.--The provisions of
subparagraphs (A) and (B) of section 1842(b)(18) shall apply
to ambulance services for which payment is made under this
subsection in the same manner as they apply to services
provided by a practitioner described in section
1842(b)(18)(C).''.
(3) Effective date.--The amendments made by this section
apply to ambulance services furnished on or after January 1,
2000.
(c) Authorizing Payment for Paramedic Intercept Service
Providers in Rural Communities.--In promulgating regulations
to carry out section 1861(s)(7) of the Social Security Act
(42 U.S.C. 1395x(s)(7)) with respect to the coverage of
ambulance service, the Secretary of Health and Human Services
may include coverage of advanced life support services (in
this subsection referred to as ``ALS intercept services'')
provided by a paramedic intercept service provider in a rural
area if the following conditions are met:
(1) The ALS intercept services are provided under a
contract with one or more volunteer ambulance services and
are medically necessary based on the health condition of the
individual being transported.
(2) The volunteer ambulance service involved--
(A) is certified as qualified to provide ambulance service
for purposes of such section,
(B) provides only basic life support services at the time
of the intercept, and
(C) is prohibited by State law from billing for any
services.
(3) The entity supplying the ALS intercept services--
(A) is certified as qualified to provide such services
under the medicare program under title XVIII of the Social
Security Act, and
(B) bills all recipients who receive ALS intercept services
from the entity, regardless of whether or not such recipients
are medicare beneficiaries.
SEC. 10432. DEMONSTRATION OF COVERAGE OF AMBULANCE SERVICES
UNDER MEDICARE THROUGH CONTRACTS WITH UNITS OF
LOCAL GOVERNMENT.
(a) Demonstration Project Contracts with Local
Governments.--The Secretary of Health and Human Services
shall establish up to 3 demonstration projects under which,
at the request of a county or parish, the Secretary enters
into a contract with the county or parish under which--
(1) the county or parish furnishes (or arranges for the
furnishing) of ambulance services for which payment may be
made under part B of title XVIII of the Social Security Act
for individuals residing in the county or parish who are
enrolled under such part, except that the county or parish
may not enter into the contract unless the contract covers at
least 80 percent of the individuals residing in the county or
parish who are enrolled under such part;
(2) any individual or entity furnishing ambulance services
under the contract meets the requirements otherwise
applicable to individuals and entities furnishing such
services under such part; and
(3) for each month during which the contract is in effect,
the Secretary makes a capitated payment to the county or
parish in accordance with subsection (b).
The projects may extend over a period of not to exceed 3
years each.
(b) Amount of Payment.--
(1) In general.--The amount of the monthly payment made for
months occurring during a calendar year to a county or parish
under a demonstration project contract under subsection (a)
shall be equal to the product of--
(A) the Secretary's estimate of the number of individuals
covered under the contract for the month; and
(B) \1/12\ of the capitated payment rate for the year
established under paragraph (2).
(2) Capitated payment rate defined.--In this subsection,
the ``capitated payment rate'' applicable to a contract under
this subsection for a calendar year is equal to 95 percent
of--
(A) for the first calendar year for which the contract is
in effect, the average annual per capita payment made under
part B of title XVIII of the Social Security Act with respect
to ambulance services furnished to such individuals during
the 3 most recent calendar years for which data on the amount
of such payment is available; and
(B) for a subsequent year, the amount provided under this
paragraph for the previous year increased by the percentage
increase in the consumer price index for all urban consumers
(U.S. city average) for the 12-month period ending with June
of the previous year.
(c) Other Terms of Contract.--The Secretary and the county
or parish may include in a contract under this section such
other terms as the parties consider appropriate, including--
(1) covering individuals residing in additional counties or
parishes (under arrangements entered into between such
counties or parishes and the county or parish involved);
(2) permitting the county or parish to transport
individuals to non-hospital providers if such providers are
able to furnish quality services at a lower cost than
hospital providers; or
(3) implementing such other innovations as the county or
parish may propose to improve the quality of ambulance
services and control the costs of such services.
(d) Contract Payments in Lieu of Other Benefits.--Payments
under a contract to a county or parish under this section
shall be instead of the amounts which (in the absence of the
contract) would otherwise be payable under part B of title
XVIII of the Social Security Act for the services covered
under the contract which are furnished to individuals who
reside in the county or parish.
(e) Report on Effects of Capitated Contracts.--
(1) Study.--The Secretary shall evaluate the demonstration
projects conducted under this section. Such evaluation shall
include an analysis of the quality and cost-effectiveness of
ambulance services furnished under the projects.
(2) Report.--Not later than January 1, 2000, the Secretary
shall submit a report to Congress on the study conducted
under paragraph (1), and shall include in the report such
recommendations as the Secretary considers appropriate,
including recommendations regarding modifications to the
methodology used to determine the amount of payments made
under such contracts and extending or expanding such
projects.
CHAPTER 3--PAYMENT UNDER PARTS A AND B
SEC. 10441. PROSPECTIVE PAYMENT FOR HOME HEALTH SERVICES.
(a) In General.--Title XVIII (42 U.S.C. 1395 et seq.), as
amended by section 10011, is amended by adding at the end the
following new section:
``prospective payment for home health services
``Sec. 1895. (a) In General.--Notwithstanding section
1861(v), the Secretary shall provide, for cost reporting
periods beginning on or after October 1, 1999, for payments
for home health services in accordance with a prospective
payment system established by the Secretary under this
section.
``(b) System of Prospective Payment for Home Health
Services.--
``(1) In general.--The Secretary shall establish under this
subsection a prospective payment system for payment for all
costs of home health services. Under the system under this
subsection all services covered and paid on a reasonable cost
basis under the medicare home health benefit as of the date
of the enactment of the this section, including medical
supplies, shall be paid for on the basis of a prospective
payment amount determined under this subsection and
applicable to the services involved. In implementing the
system, the Secretary may provide for a transition (of not
longer than 4 years) during which a portion of such payment
is based on agency-specific costs, but only if such
transition does not result in aggregate payments under this
title that exceed the aggregate payments that would be made
if such a transition did not occur.
[[Page H4531]]
``(2) Unit of payment.--In defining a prospective payment
amount under the system under this subsection, the Secretary
shall consider an appropriate unit of service and the number,
type, and duration of visits provided within that unit,
potential changes in the mix of services provided within that
unit and their cost, and a general system design that
provides for continued access to quality services.
``(3) Payment basis.--
``(A) Initial basis.--
``(i) In general.--Under such system the Secretary shall
provide for computation of a standard prospective payment
amount (or amounts). Such amount (or amounts) shall initially
be based on the most current audited cost report data
available to the Secretary and shall be computed in a manner
so that the total amounts payable under the system for fiscal
year 2000 shall be equal to the total amount that would have
been made if the system had not been in effect but if the
reduction in limits described in clause (ii) had been in
effect. Such amount shall be standardized in a manner that
eliminates the effect of variations in relative case mix and
wage levels among different home health agencies in a budget
neutral manner consistent with the case mix and wage level
adjustments provided under paragraph (4)(A). Under the
system, the Secretary may recognize regional differences or
differences based upon whether or not the services or agency
are in an urbanized area.
``(ii) Reduction.--The reduction described in this clause
is a reduction by 15 percent in the cost limits and per
beneficiary limits described in section 1861(v)(1)(L), as
those limits are in effect on September 30, 1999.
``(B) Annual update.--
``(i) In general.--The standard prospective payment amount
(or amounts) shall be adjusted for each fiscal year
(beginning with fiscal year 2001) in a prospective manner
specified by the Secretary by the home health market basket
percentage increase applicable to the fiscal year involved.
``(ii) Home health market basket percentage increase.--For
purposes of this subsection, the term `home health market
basket percentage increase' means, with respect to a fiscal
year, a percentage (estimated by the Secretary before the
beginning of the fiscal year) determined and applied with
respect to the mix of goods and services included in home
health services in the same manner as the market basket
percentage increase under section 1886(b)(3)(B)(iii) is
determined and applied to the mix of goods and services
comprising inpatient hospital services for the fiscal year.
``(C) Adjustment for outliers.--The Secretary shall reduce
the standard prospective payment amount (or amounts) under
this paragraph applicable to home health services furnished
during a period by such proportion as will result in an
aggregate reduction in payments for the period equal to the
aggregate increase in payments resulting from the application
of paragraph (5) (relating to outliers).
``(4) Payment computation.--
``(A) In general.--The payment amount for a unit of home
health services shall be the applicable standard prospective
payment amount adjusted as follows:
``(i) Case mix adjustment.--The amount shall be adjusted by
an appropriate case mix adjustment factor (established under
subparagraph (B)).
``(ii) Area wage adjustment.--The portion of such amount
that the Secretary estimates to be attributable to wages and
wage-related costs shall be adjusted for geographic
differences in such costs by an area wage adjustment factor
(established under subparagraph (C)) for the area in which
the services are furnished or such other area as the
Secretary may specify.
``(B) Establishment of case mix adjustment factors.--The
Secretary shall establish appropriate case mix adjustment
factors for home health services in a manner that explains a
significant amount of the variation in cost among different
units of services.
``(C) Establishment of area wage adjustment factors.--The
Secretary shall establish area wage adjustment factors that
reflect the relative level of wages and wage-related costs
applicable to the furnishing of home health services in a
geographic area compared to the national average applicable
level. Such factors may be the factors used by the Secretary
for purposes of section 1886(d)(3)(E).
``(5) Outliers.--The Secretary may provide for an addition
or adjustment to the payment amount otherwise made in the
case of outliers because of unusual variations in the type or
amount of medically necessary care. The total amount of the
additional payments or payment adjustments made under this
paragraph with respect to a fiscal year may not exceed 5
percent of the total payments projected or estimated to be
made based on the prospective payment system under this
subsection in that year.
``(6) Proration of prospective payment amounts.--If a
beneficiary elects to transfer to, or receive services from,
another home health agency within the period covered by the
prospective payment amount, the payment shall be prorated
between the home health agencies involved.
``(c) Requirements for Payment Information.--With respect
to home health services furnished on or after October 1,
1998, no claim for such a service may be paid under this
title unless--
``(1) the claim has the unique identifier (provided under
section 1842(r)) for the physician who prescribed the
services or made the certification described in section
1814(a)(2) or 1835(a)(2)(A); and
``(2) in the case of a service visit described in paragraph
(1), (2), (3), or (4) of section 1861(m), the claim has
information (coded in an appropriate manner) on the length of
time of the service visit, as measured in 15 minute
increments.
``(d) Limitation on Review.--There shall be no
administrative or judicial review under section 1869, 1878,
or otherwise of--
``(1) the establishment of a transition period under
subsection (b)(1);
``(2) the definition and application of payment units under
subsection (b)(2);
``(3) the computation of initial standard prospective
payment amounts under subsection (b)(3)(A) (including the
reduction described in clause (ii) of such subsection);
``(4) the establishment of the adjustment for outliers
under subsection (b)(3)(C);
``(5) the establishment of case mix and area wage
adjustments under subsection (b)(4);
``(6) the establishment of any adjustments for outliers
under subsection (b)(5); and
``(7) the amounts or types of adjustments under subsection
(b)(7).''.
(b) Elimination of Periodic Interim Payments for Home
Health Agencies.--Section 1815(e)(2) (42 U.S.C. 1395g(e)(2))
is amended--
(1) by inserting ``and'' at the end of subparagraph (C),
(2) by striking subparagraph (D), and
(3) by redesignating subparagraph (E) as subparagraph (D).
(c) Conforming Amendments.--
(1) Payments under part a.--Section 1814(b) (42 U.S.C.
1395f(b)) is amended in the matter preceding paragraph (1) by
striking ``and 1886'' and inserting ``1886, and 1895''.
(2) Treatment of items and services paid under part b.--
(A) Payments under part b.--Section 1833(a)(2) (42 U.S.C.
1395l(a)(2)) is amended--
(i) by amending subparagraph (A) to read as follows:
``(A) with respect to home health services (other than a
covered osteoporosis drug) (as defined in section 1861(kk)),
the amount determined under the prospective payment system
under section 1895;'';
(ii) by striking ``and'' at the end of subparagraph (E);
(iii) by adding ``and'' at the end of subparagraph (F); and
(iv) by adding at the end the following new subparagraph:
``(G) with respect to items and services described in
section 1861(s)(10)(A), the lesser of--
``(i) the reasonable cost of such services, as determined
under section 1861(v), or
``(ii) the customary charges with respect to such services,
or, if such services are furnished by a public provider of
services, or by another provider which demonstrates to the
satisfaction of the Secretary that a significant portion of
its patients are low-income (and requests that payment be
made under this provision), free of charge or at nominal
charges to the public, the amount determined in accordance
with section 1814(b)(2);''.
(B) Requiring payment for all items and services to be made
to agency.--
(i) In general.--The first sentence of section 1842(b)(6)
(42 U.S.C. 1395u(b)(6)), as amended by section 10401(b)(2),
is amended--
(I) by striking ``and (E)'' and inserting ``(E)''; and
(II) by striking the period at the end and inserting the
following: ``, and (F) in the case of home health services
furnished to an individual who (at the time the item or
service is furnished) is under a plan of care of a home
health agency, payment shall be made to the agency (without
regard to whether or not the item or service was furnished by
the agency, by others under arrangement with them made by the
agency, or when any other contracting or consulting
arrangement, or otherwise).''.
(ii) Conforming amendment.--Section 1832(a)(1) (42 U.S.C.
1395k(a)(1)), as amended by section 10401(b), is amended by
striking ``and section 1842(b)(6)(E)'' and inserting ``,
section 1842(b)(6)(E), and section 1842(b)(6)(F)''.
(C) Exclusions from coverage.--Section 1862(a) (42 U.S.C.
1395y(a)), as amended by sections 10401(b) and 10421(b), is
amended--
(i) by striking ``or'' at the end of paragraph (17);
(ii) by striking the period at the end of paragraph (18)
and inserting ``; or''; and
(iii) inserting after paragraph (18) the following new
paragraph:
``(19) where such expenses are for home health services
furnished to an individual who is under a plan of care of the
home health agency if the claim for payment for such services
is not submitted by the agency.''.
(d) Effective Date.--Except as otherwise provided, the
amendments made by this section shall apply to cost reporting
periods beginning on or after October 1, 1999.
Subtitle F--Provisions Relating to Part A
CHAPTER 1--PAYMENT OF PPS HOSPITALS
SEC. 10501. PPS HOSPITAL PAYMENT UPDATE.
Section 1886(b)(3)(B)(i) (42 U.S.C. 1395ww(b)(3)(B)(i)) is
amended--
(1) by striking ``and'' at the end of subclause (XII), and
(2) by striking subclause (XIII) and inserting the
following:
``(XIII) for fiscal year 1998, 0 percent,
[[Page H4532]]
``(XIV) for each of the fiscal years 1999 through 2002, the
market basket percentage increase minus 1.0 percentage point
for hospitals in all areas, and
``(XV) for fiscal year 2003 and each subsequent fiscal
year, the market basket percentage increase for hospitals in
all areas.''.
SEC. 10502. CAPITAL PAYMENTS FOR PPS HOSPITALS.
(a) Maintaining Savings From Temporary Reduction in PPS
Capital Rates.--Section 1886(g)(1)(A) (42 U.S.C.
1395ww(g)(1)(A)) is amended by adding at the end the
following: ``In addition to the reduction described in the
preceding sentence, for discharges occurring on or after
October 1, 1997, the Secretary shall apply the budget
neutrality adjustment factor used to determine the Federal
capital payment rate in effect on September 30, 1995 (as
described in section 412.352 of title 42 of the Code of
Federal Regulations), to (i) the unadjusted standard Federal
capital payment rate (as described in section 412.308(c) of
that title, as in effect on September 30, 1997), and (ii) the
unadjusted hospital-specific rate (as described in section
412.328(e)(1) of that title, as in effect on September 30,
1997).''.
(b) Revision of Exceptions Process Under Prospective
Payment System for Certain Projects.--
(1) In general.--Section 1886(g)(1) (42 U.S.C.
1395ww(g)(1)) is amended--
(A) by redesignating subparagraph (C) as subparagraph (F),
and
(B) by inserting after subparagraph (B) the following
subparagraphs:
``(C) The exceptions under the system provided by the
Secretary under subparagraph (B)(iii) shall include the
provision of exception payments under the special exceptions
process provided under section 412.348(g) of title 42, Code
of Federal Regulations (as in effect on September 1, 1995),
except that the Secretary shall revise such process,
effective for discharges occurring after September 30, 1997,
as follows:
``(i) A hospital with at least 100 beds which is located in
an urban area shall be eligible under such process without
regard to its disproportionate patient percentage under
subsection (d)(5)(F) or whether it qualifies for additional
payment amounts under such subsection.
``(ii) The minimum payment level for qualifying hospitals
shall be 85 percent (or such lower percentage, but no lower
than 75 percent, as the Secretary may provide to comply with
subparagraph (D)).
``(iii) A hospital shall be considered to meet the
requirement that it complete the project involved no later
than the end of the hospital's last cost reporting period
beginning before October 1, 2001, if--
``(I) the hospital has obtained a certificate of need for
the project approved by the State or a local planning
authority by September 1, 1995, and
``(II) by September 1, 1995, the hospital has expended on
the project at least $750,000 or 10 percent of the estimated
cost of the project.
``(iv) Offsetting amounts, as described in section
412.348(g)(8)(ii) of title 42, Code of Federal Regulations,
shall apply except that subparagraph (B) of such section
shall be revised to require that the additional payment that
would otherwise be payable for the cost reporting period
shall be reduced by the amount (if any) by which the
hospital's current year medicare capital payments (excluding,
if applicable, 75 percent of the hospital's capital-related
disproportionate share payments) exceeds its medicare capital
costs for such year.
``(D) The Secretary may reduce the percent specified under
subparagraph (C)(ii) (but not below 75 percent) and shall
reduce the Federal capital rate for a fiscal year by such
percentage as the Secretary determines to be necessary to
ensure that the application of subparagraph (C) does not
result in an increase in the total amount that would have
been paid under this subsection in the fiscal year if such
subparagraph did not apply.
``(E) The Secretary shall provide for publication in the
Federal Register each year (beginning with 1999) a
description of the distributional impact of the application
of subparagraph (C) on hospitals which receive, and do not
receive, an exception payment under such subparagraph.''.
(2) Conforming amendment.--Section 1886(g)(1)(B)(iii) (42
U.S.C. 1395ww(g)(1)(B)(iii)) is amended by striking ``may
provide'' and inserting ``shall provide (in accordance with
subparagraph (C))''.
SEC. 10503. FREEZE IN DISPROPORTIONATE SHARE.
(a) No Update in Disproportionate Share for Fiscal Years
1998 and 1999.--Section 1886(d)(5)(F) (42 U.S.C.
1395ww(d)(5)(F)) is amended in clause (ii) by adding at the
end the following new sentence: ``For discharges occurring on
or after October 1, 1997, the sum described in subclause (I)
shall be determined as if the applicable percentage increase
described in subsection (b)(3)(B)(i) for discharges for
fiscal years 1998 and 1999 were zero percent.''.
(b) Development of Revised Qualifying Criteria and Payment
Methodology for Hospitals That Serve a Disproportionate Share
of Low-Income Patients.--
(1) Development of proposal.--The Secretary of Health and
Human Services shall develop a proposal to modify the current
qualifying criteria and payment methodology under which
hospitals that are paid under section 1886(d) of the Social
Security Act (42 U.S.C. 1395ww(d)) receive an additional
payment because they serve a disproportionate share of low-
income patients.
(2) Report.--Not later than April 1, 1999, the Secretary
shall transmit the proposal developed under paragraph (1) to
the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate.
SEC. 10504. MEDICARE CAPITAL ASSET SALES PRICE EQUAL TO BOOK
VALUE.
(a) In General.--Section 1861(v)(1)(O) (42 U.S.C.
1395x(v)(1)(O)) is amended--
(1) in clause (i)--
(A) by striking ``and (if applicable) a return on equity
capital'';
(B) by striking ``hospital or skilled nursing facility''
and inserting ``provider of services'';
(C) by striking ``clause (iv)'' and inserting ``clause
(iii)''; and
(D) by striking ``the lesser of the allowable acquisition
cost'' and all that follows and inserting ``the historical
cost of the asset, as recognized under this title, less
depreciation allowed, to the owner of record as of the date
of enactment of the Balanced Budget Act of 1997 (or, in the
case of an asset not in existence as of that date, the first
owner of record of the asset after that date).'';
(2) by striking clause (ii); and
(3) by redesignating clauses (iii) and (iv) as clauses (ii)
and (iii), respectively.
(b) Effective Date.--The amendments made by subsection (a)
apply to changes of ownership that occur after the third
month beginning after the date of enactment of this section.
SEC. 10505. ELIMINATION OF IME AND DSH PAYMENTS ATTRIBUTABLE
TO OUTLIER PAYMENTS.
(a) Indirect Medical Education.--Section
1886(d)(5)(B)(i)(I) (42 U.S.C. 1395ww(d)(5)(B)(i)(I)) is
amended by inserting ``, for cases qualifying for additional
payment under subparagraph (A)(i),'' before ``the amount paid
to the hospital under subparagraph (A)''.
(b) Disproportionate Share Adjustments.--Section
1886(d)(5)(F)(ii)(I) (42 U.S.C. 1395ww(d)(5)(F)(ii)(I)) is
amended by inserting ``, for cases qualifying for additional
payment under subparagraph (A)(i),'' before ``the amount paid
to the hospital under subparagraph (A)''.
(c) Cost Outlier Payments.--Section 1886(d)(5)(A)(ii) (42
U.S.C. 1395ww(d)(5)(A)(ii)) is amended by striking ``exceed
the applicable DRG prospective payment rate'' and inserting
``exceed the sum of the applicable DRG prospective payment
rate plus any amounts payable under paragraphs (d)(5)(B) and
(d)(5)(F)''.
(d) Effective Date.--The amendments made by this section
apply to discharges occurring after September 30, 1997.
SEC. 10506. REDUCTION IN ADJUSTMENT FOR INDIRECT MEDICAL
EDUCATION.
(a) In General.--Section 1886(d)(5)(B)(ii) (42 U.S.C.
1395ww(d)(5)(B)(ii)) is amended to read as follows:
``(ii) For purposes of clause (i)(II), the indirect
teaching adjustment factor for discharges occurring--
``(I) on or after October 1, 1988 and before October 1,
1997, is equal to 1.89 (((1+r) to the nth power) -1),
``(II) during fiscal year 1998, is equal to 1.62 (((1+r) to
the nth power) -1), and
``(III) during or after fiscal year 1999, is equal to 1.35
(((1+r) to the nth power) -1),
where `r' is the ratio of the hospital's full-time equivalent
interns and residents to beds and `n' equals 0.405, subject
to clause (vi).''.
(b) Conforming Amendment Relating to Determination of
Standardized Amounts.--Section 1886(d)(2)(C)(i) (42 U.S.C.
1395ww(d)(2)(C)(i)) is amended by adding at the end the
following: ``except that the Secretary shall not take into
account any reductions in the amount of additional payments
under paragraph (5)(B)(ii) resulting from the amendments made
by section 10506(a) of the Balanced Budget Act of 1997,''.
(c) Limitation on Number of Residents for Certain Fiscal
Years.--Section 1886(d)(5)(B) (42 U.S.C. 1395ww(d)(5)(B)), as
amended by subsection (a), is amended by adding at the end
the following new clauses:
``(v) In determining the adjustment with respect to a
hospital for discharges occurring on or after October 1,
1997, the total number of interns and residents in either a
hospital or non-hospital setting may not exceed the number of
interns and residents in the hospital with respect to the
hospital's cost reporting period beginning on or before
December 31, 1996.
``(vi) For purposes of clause (ii)--
``(I) `r' may not exceed the ratio of the number of interns
and residents as determined under clause (v) with respect to
the hospital for its most recent cost reporting period, to
the hospital's available beds (as defined by the Secretary)
during that cost reporting period,
``(II) for the hospital's first cost reporting period
beginning on or after October 1, 1997, subject to the limits
described in clauses (iv) and (v), the total number of full-
time equivalent residents for payment purposes shall equal
the average of the actual full-time equivalent resident count
for the hospital's most recent cost reporting period and the
preceding cost reporting period, and
``(III) for the cost reporting period beginning on or after
October 1, 1998, and each subsequent cost reporting period,
subject to the limits described in clauses (iv) and (v), the
total number of full-time equivalent residents for payment
purposes shall equal the average of the actual full-time
equivalent resident count for the cost reporting period and
the preceding two cost reporting periods.
[[Page H4533]]
``(vii) If the hospital's fiscal year 1998 or later cost
reporting period is not equal to twelve months, the Secretary
shall make appropriate modifications to ensure that the
average full-time equivalent residency count pursuant to
subclauses (II) and (III) of clause (vi) is based on the
equivalent of full twelve month cost reporting periods.
``(viii) The Secretary may establish rules, consistent with
the policies in clauses (v) through (vii) and in subsection
(h)(6)(A)(ii), with respect to the application of clauses (v)
through (vii) in the case of medical residency training
programs established on or after January 1, 1997.''.
SEC. 10507. TREATMENT OF TRANSFER CASES.
(a) Transfers to PPS Exempt Hospitals and Skilled Nursing
Facilities.--Section 1886(d)(5)(I) (42 U.S.C.
1395ww(d)(5)(I)) is amended by adding at the end the
following new clause:
``(iii) In carrying out this subparagraph, the Secretary
shall treat the term `transfer case' as including the case of
an individual who, upon discharge from a subsection (d)
hospital--
``(I) is admitted as an inpatient to a hospital or hospital
unit that is not a subsection (d) hospital for the receipt of
inpatient hospital services; or
``(II) is admitted to a skilled nursing facility or
facility described in section 1861(y)(1) for the receipt of
extended care services.''.
(b) Transfers for Purposes of Home Health Services.--
Section 1886(d)(5)(I)(iii) (42 U.S.C. 1395ww(d)(5)(I)(iii)),
as amended by subsection (a), is amended--
(1) in subclause (I), by striking ``or'';
(2) in subclause (II), by striking the period at the end
and inserting ``; or'' and
(2) by adding at the end the following new subclause:
``(III) receives home health services from a home health
agency, if such services relate to the condition or diagnosis
for which such individual received inpatient hospital
services from the subsection (d) hospital, and if such
services are provided within an appropriate period as
determined by the Secretary in regulations promulgated not
later than September 1, 1998.''.
(c) Effective Dates.--
(1) The amendment made by subsection (a) shall apply with
respect to discharges occurring on or after October 1, 1997.
(2) The amendment made by subsection (b) shall apply with
respect to discharges occurring on or after October 1, 1998.
SEC. 10508. INCREASE BASE PAYMENT RATE TO PUERTO RICO
HOSPITALS.
Section 1886(d)(9)(A) (42 U.S.C. 1395ww(d)(9)(A)) is
amended--
(1) in the matter preceding clause (i), by striking ``in a
fiscal year beginning on or after October 1, 1987,'',
(2) in clause (i), by striking ``75 percent'' and
inserting, ``for discharges beginning on or after October 1,
1997, 50 percent (and for discharges between October 1, 1987,
and September 30, 1997, 75 percent)'', and
(3) in clause (ii), by striking ``25 percent'' and
inserting, ``for discharges beginning in a fiscal year
beginning on or after October 1, 1997, 50 percent (and for
discharges between October 1, 1987 and September 30, 1997, 25
percent)''.
CHAPTER 2--PAYMENT OF PPS EXEMPT HOSPITALS
SEC. 10511. PAYMENT UPDATE.
(a) In General.--Section 1886(b)(3)(B) (42 U.S.C.
1395ww(b)(3)(B)) is amended--
(1) in clause (ii)--
(A) by striking ``and'' at the end of subclause (V),
(B) by redesignating subclause (VI) as subclause (VIII);
and
(C) by inserting after subclause (V), the following
subclauses:
``(VI) for fiscal year 1998, is 0 percent;
``(VII) for fiscal years 1999 through 2002, is the
applicable update factor specified under clause (vi) for the
fiscal year; and''; and
(2) by adding at the end the following new clause:
``(vi) For purposes of clause (ii)(VII) for a fiscal year,
if a hospital's allowable operating costs of inpatient
hospital services recognized under this title for the most
recent cost reporting period for which information is
available--
``(I) is equal to, or exceeds, 110 percent of the
hospital's target amount (as determined under subparagraph
(A)) for such cost reporting period, the applicable update
factor specified under this clause is the market basket
percentage;
``(II) exceeds 100 percent, but is less than 110 percent,
of such target amount for the hospital, the applicable update
factor specified under this clause is 0 percent or, if
greater, the market basket percentage minus 0.25 percentage
points for each percentage point by which such allowable
operating costs (expressed as a percentage of such target
amount) is less than 110 percent of such target amount;
``(III) is equal to, or less than 100 percent, but exceeds
\2/3\ of such target amount for the hospital, the applicable
update factor specified under this clause is 0 percent or, if
greater, the market basket percentage minus 2.5 percentage
points; or
``(IV) does not exceed \2/3\ of such target amount for the
hospital, the applicable update factor specified under this
clause is 0 percent.''.
(b) No Effect of Payment Reduction on Exceptions and
Adjustments.--Section 1886(b)(4)(A)(ii) (42 U.S.C.
1395ww(b)(4)(A)(ii)) is amended by adding at the end the
following new sentence: ``In making such reductions, the
Secretary shall treat the applicable update factor described
in paragraph (3)(B)(vi) for a fiscal year as being equal to
the market basket percentage for that year.''.
SEC. 10512. REDUCTIONS TO CAPITAL PAYMENTS FOR CERTAIN PPS-
EXEMPT HOSPITALS AND UNITS.
Section 1886(g) (42 U.S.C. 1395ww(g)) is amended by adding
at the end the following new paragraph:
``(4) In determining the amount of the payments that are
attributable to portions of cost reporting periods occurring
during fiscal years 1998 through 2002 and that may be made
under this title with respect to capital-related costs of
inpatient hospital services of a hospital which is described
in clause (i), (ii), or (iv) of subsection (d)(1)(B) or a
unit described in the matter after clause (v) of such
subsection, the Secretary shall reduce the amounts of such
payments otherwise determined under this title by 10
percent.''.
SEC. 10513. CAP ON TEFRA LIMITS.
Section 1886(b)(3) (42 U.S.C. 1395ww(b)(3)) is amended--
(1) in subparagraph (A) by striking ``subparagraphs (C),
(D), and (E)'' and inserting ``subparagraph (C) and
succeeding subparagraphs'', and
(2) by adding at the end the following:
``(F)(i) In the case of a hospital or unit that is within a
class of hospital described in clause (ii), for cost
reporting periods beginning on or after October 1, 1997, and
before October 1, 2002, such target amount may not be greater
than the 90th percentile of the target amounts for such
hospitals within such class for cost reporting periods
beginning during that fiscal year.
``(ii) For purposes of this subparagraph, each of the
following shall be treated as a separate class of hospital:
``(I) Hospitals described in clause (i) of subsection
(d)(1)(B) and psychiatric units described in the matter
following clause (v) of such subsection.
``(II) Hospitals described in clause (ii) of such
subsection and rehabilitation units described in the matter
following clause (v) of such subsection.
``(III) Hospitals described in clause (iv) of such
subsection.''.
SEC. 10514. CHANGE IN BONUS AND RELIEF PAYMENTS.
(a) Change in Bonus Payment.--Section 1886(b)(1)(A) (42
U.S.C. 1395ww(b)(1)(A)) is amended by striking all that
follows ``plus--'' and inserting the following:
``(i) 10 percent of the amount by which the target amount
exceeds the amount of the operating costs, or
``(ii) 1 percent of the operating costs,
whichever is less;''.
(b) Change in Relief Payments.--Section 1886(b)(1) (42
U.S.C. 1395ww(b)(1)) is amended--
(1) in subparagraph (B)--
(A) by striking ``greater than the target amount'' and
inserting ``greater than 110 percent of the target amount'',
(B) by striking ``exceed the target amount'' and inserting
``exceed 110 percent of the target amount'',
(C) by striking ``10 percent'' and inserting ``20
percent'', and
(D) by redesignating such subparagraph as subparagraph (C);
and
(2) by inserting after subparagraph (A) the following new
subparagraph:
``(B) are greater than the target amount but do not exceed
110 percent of the target amount, the amount of the payment
with respect to those operating costs payable under part A on
a per discharge basis shall equal the target amount; or''.
SEC. 10515. CHANGE IN PAYMENT AND TARGET AMOUNT FOR NEW
PROVIDERS.
Section 1886(b) (42 U.S.C. 1395ww(b)) is amended--
(1) by inserting after paragraph (1) the following new
paragraph:
``(2)(A) Notwithstanding paragraph (1), in the case of a
hospital or unit that is within a class of hospital described
in subparagraph (B) which first receives payments under this
section on or after October 1, 1997--
``(i) for each of the first 2 full or partial cost
reporting periods, the amount of the payment with respect to
operating costs described in paragraph (1) under part A on a
per discharge or per admission basis (as the case may be) is
equal to the lesser of--
``(I) the amount of operating costs for such respective
period, or
``(II) 150 percent of the national median of the operating
costs for hospitals in the same class as the hospital for
cost reporting periods beginning during the same fiscal year,
as adjusted under subparagraph (C); and
``(ii) for purposes of computing the target amount for the
subsequent cost reporting period, the target amount for the
preceding cost reporting period is equal to the amount
determined under clause (i) for such preceding period.
``(B) For purposes of this paragraph, each of the following
shall be treated as a separate class of hospital:
``(i) Hospitals described in clause (i) of subsection
(d)(1)(B) and psychiatric units described in the matter
following clause (v) of such subsection.
``(ii) Hospitals described in clause (ii) of such
subsection and rehabilitation units described in the matter
following clause (v) of such subsection.
``(iii) A class of hospitals described in subsection
(d)(1)(B)(iv) that the Secretary shall establish based upon a
measure of case mix that takes into account acuity.
[[Page H4534]]
``(iv) Hospitals described in subsection (d)(1)(B)(iv) that
are not within the class described in clause (iii).
``(C) In applying subparagraph (A)(i)(II) in the case of a
hospital or unit, the Secretary shall provide for an
appropriate adjustment to the labor-related portion of the
amount determined under such subparagraph to take into
account differences between average wage-related costs in the
area of the hospital and the national average of such costs
within the same class of hospital.''; and
(2) in paragraph (3)(A), as amended in section 10513, by
inserting ``and in paragraph (2)(A)(ii),'' before ``for
purposes of''.
SEC. 10516. REBASING.
(a) Option of Rebasing for Hospitals In Operation Before
1990.--Section 1886(b)(3)(42 U.S.C. 1395ww(b)(3)), as amended
in section 10513, is amended by adding at the end the
following new subparagraph:
``(G)(i) In the case of a hospital (or unit described in
the matter following clause (v) of subsection (d)(1)(B)) that
received payment under this subsection for inpatient hospital
services furnished during cost reporting periods before
October 1, 1990, that is within a class of hospital described
in clause (iii), and that elects (in a form and manner
determined by the Secretary) this subparagraph to apply to
the hospital, the target amount for the hospital's 12-month
cost reporting period beginning during fiscal year 1998 is
equal to the average described in clause (ii).
``(ii) The average described in this clause for a hospital
or unit shall be determined by the Secretary as follows:
``(I) The Secretary shall determine the allowable operating
costs for inpatient hospital services for the hospital or
unit for each of the 5 cost reporting periods for which the
Secretary has the most recent settled cost reports as of the
date of the enactment of this subparagraph.
``(II) The Secretary shall increase the amount determined
under subclause (I) for each cost reporting period by the
applicable percentage increase under subparagraph (B)(ii) for
each subsequent cost reporting period up to the cost
reporting period described in clause (i).
``(III) The Secretary shall identify among such 5 cost
reporting periods the cost reporting periods for which the
amount determined under subclause (II) is the highest, and
the lowest.
``(IV) The Secretary shall compute the averages of the
amounts determined under subclause (II) for the 3 cost
reporting periods not identified under subclause (III).
``(iii) For purposes of this subparagraph, each of the
following shall be treated as a separate class of hospital:
``(I) Hospitals described in clause (i) of subsection
(d)(1)(B) and psychiatric units described in the matter
following clause (v) of such subsection.
``(II) Hospitals described in clause (ii) of such
subsection and rehabilitation units described in the matter
following clause (v) of such subsection.
``(III) Hospitals described in clause (iii) of such
subsection.
``(IV) Hospitals described in clause (iv) of such
subsection.
``(V) Hospitals described in clause (v) of such
subsection.''.
(b) Certain Long-Term Care Hospitals.--Section 1886(b)(3)
(42 U.S.C. 1395ww(b)(3)), as amended by subsection (a), is
amended by adding at the end the following new subparagraph:
``(H)(i) In the case of a qualified long-term care hospital
(as defined in clause (ii)) that elects (in a form and manner
determined by the Secretary) this subparagraph to apply to
the hospital, the target amount for the hospital's 12-month
cost reporting period beginning during fiscal year 1998 is
equal to the allowable operating costs of inpatient hospital
services (as defined in subsection (a)(4)) recognized under
this title for the hospital for the 12-month cost reporting
period beginning during fiscal year 1996, increased by the
applicable percentage increase for the cost reporting period
beginning during fiscal year 1997.
``(ii) In clause (i), a `qualified long-term care hospital'
means, with respect to a cost reporting period, a hospital
described in clause (iv) of subsection (d)(1)(B) during each
of the 2 cost reporting periods for which the Secretary has
the most recent settled cost reports as of the date of the
enactment of this subparagraph for each of which--
``(I) the hospital's allowable operating costs of inpatient
hospital services recognized under this title exceeded 115
percent of the hospital's target amount, and
``(II) the hospital would have a disproportionate patient
percentage of at least 70 percent (as determined by the
Secretary under subsection (d)(5)(F)(vi)) if the hospital
were a subsection (d) hospital.''.
(c) Certain Long-Term Care Cancer Hospitals.--
(1) In general.--Section 1886(d)(1)(B)(iv) (42 U.S.C.
1395ww(d)(1)(B)(iv)) is amended by adding at the end the
following: ``a hospital that first received payment under
this subsection in 1986 which has an average inpatient length
of stay (as determined by the Secretary) of greater than 20
days and that has 80 percent or more of its annual total
inpatient discharges with a principal diagnosis that reflects
a finding of neoplastic disease, or''.
(2) Effective date.--The amendment made by paragraph (1)
shall apply to cost reporting periods beginning on or after
the date of the enactment of this Act.
SEC. 10517. TREATMENT OF CERTAIN LONG-TERM CARE HOSPITALS.
(a) In General.--Section 1886(d)(1)(B) (42 U.S.C.
1395ww(d)(1)(B)) is amended by adding at the end the
following new sentence: ``A hospital that was classified by
the Secretary on or before September 30, 1995, as a hospital
described in clause (iv) shall continue to be so classified
notwithstanding that it is located in the same building as,
or on the same campus as, another hospital.''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to discharges occurring on or after October 1,
1995.
SEC. 10518. ELIMINATION OF EXEMPTIONS; REPORT ON EXCEPTIONS
AND ADJUSTMENTS.
(a) Elimination of Exemptions.--
(1) In general.--Section 1886(b)(4)(A)(i) (42 U.S.C.
1395ww(b)(4)(A)(i)) is amended by striking ``exemption from,
or an exception and adjustment to,'' and inserting ``an
exception and adjustment to'' each place it appears.
(2) Effective date.--The amendments made by paragraph (1)
shall apply to hospitals or units that first qualify as a
hospital or unit described in section 1886(d)(1)(B) (42
U.S.C. 1395ww(d)(1)(B)) on or after October 1, 1997.
(b) Report.--The Secretary of Health and Human Services
shall publish annually in the Federal Register a report
describing the total amount of payments made to hospitals by
reason of section 1886(b)(4) of the Social Security Act (42
U.S.C. 1395ww(b)(4)), as amended by subsection (a), for cost
reporting periods ending during the previous fiscal year.
CHAPTER 3--PROVISIONS RELATED TO HOSPICE SERVICES
SEC. 10521. PAYMENTS FOR HOSPICE SERVICES.
(a) Payment Update.--Section 1814(i)(1)(C)(ii) (42 U.S.C.
1395f(i)(1)(C)(ii)) is amended--
(1) in subclause (V), by striking ``and'' at the end;
(2) by redesignating subclause (VI) as subclause (VII); and
(3) by inserting after subclause (V) the following new
subclause:
``(VI) for each of fiscal years 1998 through 2002, the
market basket percentage increase for the fiscal year
involved minus 1.0 percentage points; and''.
(b) Report.--Section 1814(i) (42 U.S.C. 1395f(i)) is
amended by adding at the end the following new paragraph:
``(3) The Secretary shall provide for the collection of
data, from hospice programs providing hospice care for which
payment is made under this subsection, with respect to the
costs for providing such care for each fiscal year beginning
with fiscal year 1999.''.
SEC. 10522. PAYMENT FOR HOME HOSPICE CARE BASED ON LOCATION
WHERE CARE IS FURNISHED.
(a) In General.--Section 1814(i)(2) (42 U.S.C. 1395f(i)(2))
is amended by adding at the end the following:
``(D) A hospice program shall submit claims for payment for
hospice care furnished in an individual's home under this
title only on the basis of the geographic location at which
the service is furnished, as determined by the Secretary.''.
(b) Effective Date.--The amendment made by subsection (a)
applies to cost reporting periods beginning on or after
October 1, 1997.
SEC. 10523. HOSPICE CARE BENEFITS PERIODS.
(a) Restructuring of Benefit Period.--Section 1812 (42
U.S.C. 1395d) is amended, in subsections (a)(4) and (d)(1),
by striking ``, a subsequent period of 30 days, and a
subsequent extension period'' and inserting ``and an
unlimited number of subsequent periods of 60 days each''.
(b) Conforming Amendments.--(1) Section 1812 (42 U.S.C.
1395d) is amended in subsection (d)(2)(B) by striking ``90-
or 30-day period or a subsequent extension period'' and
inserting ``90-day period or a subsequent 60-day period''.
(2) Section 1814(a)(7)(A) (42 U.S.C. 1395f(a)(7)(A)) is
amended--
(A) in clause (i), by inserting ``and'' at the end;
(B) in clause (ii)--
(i) by striking ``30-day'' and inserting ``60-day''; and
(ii) by striking ``, and'' at the end and inserting a
period; and
(C) by striking clause (iii).
SEC. 10524. OTHER ITEMS AND SERVICES INCLUDED IN HOSPICE
CARE.
Section 1861(dd)(1) (42 U.S.C. 1395x(dd)(1)) is amended--
(1) in subparagraph (G), by striking ``and'' at the end;
(2) in subparagraph (H), by striking the period at the end
and inserting ``, and''; and
(3) by inserting after subparagraph (H) the following:
``(I) any other item or service which is specified in the
plan and for which payment may otherwise be made under this
title.''.
SEC. 10525. CONTRACTING WITH INDEPENDENT PHYSICIANS OR
PHYSICIAN GROUPS FOR HOSPICE CARE SERVICES
PERMITTED.
Section 1861(dd)(2) (42 U.S.C. 1395x(dd)(2)) is amended--
(1) in subparagraph (A)(ii)(I), by striking ``(F),''; and
(2) in subparagraph (B)(i), by inserting ``or, in the case
of a physician described in subclause (I), under contract
with'' after ``employed by''.
SEC. 10526. WAIVER OF CERTAIN STAFFING REQUIREMENTS FOR
HOSPICE CARE PROGRAMS IN NON-URBANIZED AREAS.
Section 1861(dd)(5) (42 U.S.C. 1395x(dd)(5)) is amended--
[[Page H4535]]
(1) in subparagraph (B), by inserting ``or (C)'' after
``subparagraph (A)'' each place it appears; and
(2) by adding at the end the following:
``(C) The Secretary may waive the requirements of paragraph
(2)(A)(i) and (2)(A)(ii) for an agency or organization with
respect to the services described in paragraph (1)(B) and,
with respect to dietary counseling, paragraph (1)(H), if such
agency or organization--
``(i) is located in an area which is not an urbanized area
(as defined by the Bureau of Census), and
``(ii) demonstrates to the satisfaction of the Secretary
that the agency or organization has been unable, despite
diligent efforts, to recruit appropriate personnel.''.
SEC. 10527. LIMITATION ON LIABILITY OF BENEFICIARIES FOR
CERTAIN HOSPICE COVERAGE DENIALS.
Section 1879(g) (42 U.S.C. 1395pp(g)) is amended--
(1) by redesignating paragraphs (1) and (2) as
subparagraphs (A) and (B), respectively, and moving such
subparagraphs 2 ems to the right;
(2) by striking ``is,'' and inserting ``is--'';
(3) by making the remaining text of subsection (g), as
amended, that follows ``is--'' a new paragraph (1) and
indenting such paragraph 2 ems to the right;
(4) by striking the period at the end and inserting ``;
and''; and
(5) by adding at the end the following new paragraph:
``(2) with respect to the provision of hospice care to an
individual, a determination that the individual is not
terminally ill.''.
SEC. 10528. EXTENDING THE PERIOD FOR PHYSICIAN CERTIFICATION
OF AN INDIVIDUAL'S TERMINAL ILLNESS.
Section 1814(a)(7)(A)(i) (42 U.S.C. 1395f(a)(7)(A)(i)) is
amended, in the matter following subclause (II), by striking
``, not later than 2 days after hospice care is initiated
(or, if each certify verbally not later than 2 days after
hospice care is initiated, not later than 8 days after such
care is initiated)'' and inserting ``at the beginning of the
period''.
SEC. 10529. EFFECTIVE DATE.
Except as otherwise provided in this chapter, the
amendments made by this chapter apply to benefits provided on
or after the date of the enactment of this chapter,
regardless of whether or not an individual has made an
election under section 1812(d) of the Social Security Act (42
U.S.C. 1395d(d)) before such date.
CHAPTER 4--MODIFICATION OF PART A HOME HEALTH BENEFIT
SEC. 10531. MODIFICATION OF PART A HOME HEALTH BENEFIT FOR
INDIVIDUALS ENROLLED UNDER PART B.
(a) In General.--Section 1812 (42 U.S.C. 1395d) is
amended--
(1) in subsection (a)(3), by striking ``home health
services'' and inserting ``for individuals not enrolled in
part B, home health services, and for individuals so
enrolled, part A home health services (as defined in
subsection (g))'';
(2) by redesignating subsection (g) as subsection (h); and
(3) by inserting after subsection (f) the following new
subsection:
``(g)(1) For purposes of this section, the term `part A
home health services' means--
``(A) for services furnished during each year beginning
with 1998 and ending with 2002, home health services subject
to the transition reduction applied under paragraph (2)(C)
for services furnished during the year, and
``(B) for services furnished on or after January 1, 2003,
post-institutional home health services for up to 100 visits
during a home health spell of illness.
``(2) For purposes of paragraph (1)(B), the Secretary shall
specify, before the beginning of each year beginning with
1998 and ending with 2002, a transition reduction in the home
health services benefit under this part as follows:
``(A) The Secretary first shall estimate the amount of
payments that would have been made under this part for home
health services furnished during the year if--
``(i) part A home health services were all home health
services, and
``(ii) part A home health services were limited to services
described in paragraph (1)(B).
``(B)(i) The Secretary next shall compute a transfer
reduction amount equal to the appropriate proportion
(specified under clause (ii)) of the amount by which the
amount estimated under subparagraph (A)(i) for the year
exceeds the amount estimated under subparagraph (A)(ii) for
the year.
``(ii) For purposes of clause (i), the `appropriate
proportion' is equal to--
``(I) \1/6\ for 1998,
``(II) \2/6\ for 1999,
``(III) \3/6\ for 2000,
``(IV) \4/6\ for 2001, and
``(V) \5/6\ for 2002.
``(C) The Secretary shall establish a transition reduction
by specifying such a visit limit (during a home health spell
of illness) or such a post-institutional limitation on home
health services furnished under this part during the year as
the Secretary estimates will result in a reduction in the
amount of payments that would otherwise be made under this
part for home health services furnished during the year equal
to the transfer amount computed under subparagraph (B)(i) for
the year.
``(3) Payment under this part for home health services
furnished an individual enrolled under part B--
``(A) during a year beginning with 1998 and ending with
2003, may not be made for services that are not within the
visit limit or other limitation specified by the Secretary
under the transition reduction under paragraph (3)(C) for
services furnished during the year; or
``(B) on or after January 1, 2004, may not be made for home
health services that are not post-institutional home health
services or for post-institutional furnished to the
individual after such services have been furnished to the
individual for a total of 100 visits during a home health
spell of illness.
``(4) With respect to computing the monthly actuarial rate
for enrollees age 65 and over for purposes of applying
section 1839, such rate shall be computed as though any
reference in a previous provision of this subsection to 2002
or 2003 is a reference to the succeeding year and as through
the appropriate proportion described in paragraph (3)(B)(ii)
were equal to--
``(A) \1/7\ for 1998,
``(B) \2/7\ for 1999,
``(C) \3/7\ for 2000,
``(D) \4/7\ for 2001,
``(E) \5/7\ for 2002, and
``(F) \6/7\ for 2003.''.
(b) Post-institutional Home Health Services Defined.--
Section 1861 (42 U.S.C. 1395x), as amended by section
10105(a)(1)(B) is amended by adding at the end the following:
``Post-Institutional Home Health Services; Home Health Spell of Illness
``(rr)(1) The term `post-institutional home health
services' means home health services furnished to an
individual--
``(A) after discharge from a hospital or rural primary care
hospital in which the individual was an inpatient for not
less than 3 consecutive days before such discharge if such
home health services were initiated within 14 days after the
date of such discharge; or
``(B) after discharge from a skilled nursing facility in
which the individual was provided post-hospital extended care
services if such home health services were initiated within
14 days after the date of such discharge.
``(2) The term `home health spell of illness' with respect
to any individual means a period of consecutive days--
``(A) beginning with the first day (not included in a
previous home health spell of illness) (i) on which such
individual is furnished post-institutional home health
services, and (B) which occurs in a month for which the
individual is entitled to benefits under part A, and
``(B) ending with the close of the first period of 60
consecutive days thereafter on each of which the individual
is neither an inpatient of a hospital or rural primary care
hospital nor an inpatient of a facility described in section
1819(a)(1) or subsection (y)(1) nor provided home health
services.''.
(c) Maintaining Appeal Rights for Home Health Services.--
Section 1869(b)(2)(B) (42 U.S.C. 1395ff(b)(2)(B)) is amended
by inserting ``(or $100 in the case of home health
services)'' after ``$500''.
(d) Maintaining Seamless Administration Through Fiscal
Intermediaries.--Section 1842(b)(2) (42 U.S.C. 1395u(b)(2))
is amended by adding at the end the following:
``(E) With respect to the payment of claims for home health
services under this part that, but for the amendments made by
section 10531 of the Balanced Budget Act of 1997, would be
payable under part A instead of under this part, the
Secretary shall continue administration of such claims
through fiscal intermediaries under section 1816.''.
(e) Effective Date.--The amendments made by this section
apply to services furnished on or after January 1, 1998. For
purpose of applying such amendments, any home health spell of
illness that began, but not end, before such date shall be
considered to have begun as of such date.
CHAPTER 5--OTHER PAYMENT PROVISIONS
SEC. 10541. REDUCTIONS IN PAYMENTS FOR ENROLLEE BAD DEBT.
Section 1861(v)(1) (42 U.S.C. 1395x(v)(1)) is amended by
adding at the end the following new subparagraph:
``(T) In determining such reasonable costs for hospitals,
the amount of bad debts otherwise treated as allowable costs
which are attributable to the deductibles and coinsurance
amounts under this title shall be reduced--
``(i) for cost reporting periods beginning during fiscal
year 1998, by 25 percent of such amount otherwise allowable,
``(ii) for cost reporting periods beginning during fiscal
year 1999, by 40 percent of such amount otherwise allowable,
and
``(iii) for cost reporting periods beginning during a
subsequent fiscal year, by 50 percent of such amount
otherwise allowable.''.
SEC. 10542. PERMANENT EXTENSION OF HEMOPHILIA PASS-THROUGH.
Effective October 1, 1997, section 6011(d) of OBRA-1989 (as
amended by section 13505 of OBRA-1993) is amended by striking
``and shall expire September 30, 1994''.
SEC. 10543. REDUCTION IN PART A MEDICARE PREMIUM FOR CERTAIN
PUBLIC RETIREES.
(a) In General.--Section 1818(d) (42 U.S.C. 1395i-2(d)) is
amended--
(1) in paragraph (2), by striking ``paragraph (4)'' and
inserting ``paragraphs (4) and (5)''; and
(2) by adding at the end the following new paragraph:
[[Page H4536]]
``(5)(A) The amount of the monthly premium shall be zero in
the case of an individual who is a person described in
subparagraph (B) for a month, if--
``(i) the individual's premium under this section for the
month is not (and will not be) paid for, in whole or in part,
by a State (under title XIX or otherwise), a political
subdivision of a State, or an agency or instrumentality of
one or more States or political subdivisions thereof; and
``(ii) in each of 60 months before such month, the
individual was enrolled in this part under this section and
the payment of the individual's premium under this section
for the month was not paid for, in whole or in part, by a
State (under title XIX or otherwise), a political subdivision
of a State, or an agency or instrumentality of one or more
States or political subdivisions thereof.
``(B) A person described in this subparagraph for an month
is a person who establishes to the satisfaction of the
Secretary that, as of the last day of the previous month--
``(i)(I) the person was receiving cash benefits under a
qualified State or local government retirement system (as
defined in subparagraph (C)) on the basis of the person's
employment in one or more positions covered under any such
system, and (II) the person would have at least 40 quarters
of coverage under title II if remuneration for medicare
qualified government employment (as defined in paragraph (1)
of section 210(p), but determined without regard to paragraph
(3) of such section) paid to such person were treated as
wages paid to such person and credited for purposes of
determining quarters of coverage under section 213;
``(ii)(I) the person was married (and had been married for
the previous 1-year period) to an individual who is described
in clause (i), or (II) the person met the requirement of
clause (i)(II) and was married (and had been married for the
previous 1-year period) to an individual described in clause
(i)(I);
``(iii) the person had been married to an individual for a
period of at least 1 year (at the time of such individual's
death) if (I) the individual was described in clause (i) at
the time of the individual's death, or (II) the person met
the requirement of clause (i)(II) and the individual was
described in clause (i)(I) at the time of the individual's
death; or
``(iv) the person is divorced from an individual and had
been married to the individual for a period of at least 10
years (at the time of the divorce) if (I) the individual was
described in clause (i) at the time of the divorce, or (II)
the person met the requirement of clause (i)(II) and the
individual was described in clause (i)(I) at the time of the
divorce.
``(C) For purposes of subparagraph (B)(i)(I), the term
`qualified State or local government retirement system' means
a retirement system that--
``(i) is established or maintained by a State or political
subdivision thereof, or an agency or instrumentality of one
or more States or political subdivisions thereof;
``(ii) covers positions of some or all employees of such a
State, subdivision, agency, or instrumentality; and
``(iii) does not adjust cash retirement benefits based on
eligibility for a reduction in premium under this
paragraph.''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply to premiums for months beginning with January
1998, and months before such month may be taken into account
for purposes of meeting the requirement of section
1818(d)(5)(B)(iii) of the Social Security Act, as added by
subsection (a).
Subtitle G--Provisions Relating to Part B Only
CHAPTER 1--PHYSICIANS' SERVICES
SEC. 10601. ESTABLISHMENT OF SINGLE CONVERSION FACTOR FOR
1998.
(a) In General.--Section 1848(d)(1) (42 U.S.C. 1395w-
4(d)(1)) is amended--
(1) by redesignating subparagraph (C) as subparagraph (D),
and
(2) by inserting after subparagraph (B) the following:
``(C) Special rules for 1998.--The single conversion factor
for 1998 under this subsection shall be the conversion factor
for primary care services for 1997, increased by the
Secretary's estimate of the weighted average of the three
separate updates that would otherwise occur were it not for
the enactment of chapter 1 of subtitle G of title X of the
Balanced Budget Act of 1997.''.
(b) Conforming Amendments.--Section 1848 (42 U.S.C. 1395w-
4) is amended--
(1) by striking ``(or factors)'' each place it appears in
subsection (d)(1)(A) and (d)(1)(D)(ii) (as redesignated by
subsection (a)(1)),
(2) in subsection (d)(1)(A), by striking ``or updates'',
(3) in subsection (d)(1)(D) (as redesignated by subsection
(a)(1)), by striking ``(or updates)'' each place it appears,
and
(4) in subsection (i)(1)(C), by striking ``conversion
factors'' and inserting ``the conversion factor''.
SEC. 10602. ESTABLISHING UPDATE TO CONVERSION FACTOR TO MATCH
SPENDING UNDER SUSTAINABLE GROWTH RATE.
(a) Update.--
(1) In general.--Section 1848(d)(3) (42 U.S.C. 1395w-
4(d)(3)) is amended to read as follows:
``(3) Update.--
``(A) In general.--Unless otherwise provided by law,
subject to subparagraph (D) and the budget-neutrality factor
determined by the Secretary under subsection (c)(2)(B)(ii),
the update to the single conversion factor established in
paragraph (1)(C) for a year beginning with 1999 is equal to
the product of--
``(i) 1 plus the Secretary's estimate of the percentage
increase in the MEI (as defined in section 1842(i)(3)) for
the year (divided by 100), and
``(ii) 1 plus the Secretary's estimate of the update
adjustment factor for the year (divided by 100),
minus 1 and multiplied by 100.
``(B) Update adjustment factor.--For purposes of
subparagraph (A)(ii), the `update adjustment factor' for a
year is equal to the quotient (as estimated by the Secretary)
of--
``(i) the difference between (I) the sum of the allowed
expenditures for physicians' services (as determined under
subparagraph (C)) during the period beginning July 1, 1997,
and ending on June 30 of the year involved, and (II) the sum
of the amount of actual expenditures for physicians' services
furnished during the period beginning July 1, 1997, and
ending on June 30 of the preceding year; divided by
``(ii) the actual expenditures for physicians' services for
the 12-month period ending on June 30 of the preceding year,
increased by the sustainable growth rate under subsection (f)
for the fiscal year which begins during such 12-month period.
``(C) Determination of allowed expenditures.--For purposes
of this paragraph, the allowed expenditures for physicians'
services for the 12-month period ending with June 30 of--
``(i) 1997 is equal to the actual expenditures for
physicians' services furnished during such 12-month period,
as estimated by the Secretary; or
``(ii) a subsequent year is equal to the allowed
expenditures for physicians' services for the previous year,
increased by the sustainable growth rate under subsection (f)
for the fiscal year which begins during such 12-month period.
``(D) Restriction on variation from medicare economic
index.--Notwithstanding the amount of the update adjustment
factor determined under subparagraph (B) for a year, the
update in the conversion factor under this paragraph for the
year may not be--
``(i) greater than 100 times the following amount: (1.03 +
(MEI percentage/100)) - 1; or
``(ii) less than 100 times the following amount: (0.93 +
(MEI percentage/100)) -1,
where `MEI percentage' means the Secretary's estimate of the
percentage increase in the MEI (as defined in section
1842(i)(3)) for the year involved.''.
(2) Effective date.--The amendment made by paragraph (1)
shall apply to the update for years beginning with 1999.
(b) Elimination of Report.--Section 1848(d) (42 U.S.C.
1395w-4(d)) is amended by striking paragraph (2).
SEC. 10603. REPLACEMENT OF VOLUME PERFORMANCE STANDARD WITH
SUSTAINABLE GROWTH RATE.
(a) In General.--Section 1848(f) (42 U.S.C. 1395w-4(f)) is
amended by striking paragraphs (2) through (5) and inserting
the following:
``(2) Specification of growth rate.--The sustainable growth
rate for all physicians' services for a fiscal year
(beginning with fiscal year 1998) shall be equal to the
product of--
``(A) 1 plus the Secretary's estimate of the weighted
average percentage increase (divided by 100) in the fees for
all physicians' services in the fiscal year involved,
``(B) 1 plus the Secretary's estimate of the percentage
change (divided by 100) in the average number of individuals
enrolled under this part (other than MedicarePlus plan
enrollees) from the previous fiscal year to the fiscal year
involved,
``(C) 1 plus the Secretary's estimate of the projected
percentage growth in real gross domestic product per capita
(divided by 100) from the previous fiscal year to the fiscal
year involved, and
``(D) 1 plus the Secretary's estimate of the percentage
change (divided by 100) in expenditures for all physicians'
services in the fiscal year (compared with the previous
fiscal year) which will result from changes in law and
regulations, determined without taking into account estimated
changes in expenditures due to changes in the volume and
intensity of physicians' services resulting from changes in
the update to the conversion factor under subsection (d)(3),
minus 1 and multiplied by 100.
``(3) Definitions.--In this subsection:
``(A) Services included in physicians' services.--The term
`physicians' services' includes other items and services
(such as clinical diagnostic laboratory tests and radiology
services), specified by the Secretary, that are commonly
performed or furnished by a physician or in a physician's
office, but does not include services furnished to a
MedicarePlus plan enrollee.
``(B) MedicarePlus plan enrollee.--The term `MedicarePlus
plan enrollee' means, with respect to a fiscal year, an
individual enrolled under this part who has elected to
receive benefits under this title for the fiscal year through
a MedicarePlus plan offered under part C, and also includes
an individual who is receiving benefits under this part
through enrollment with an eligible organization with a risk-
sharing contract under section 1876.''.
(b) Conforming Amendments.--Section 1848(f) (42 U.S.C.
1395w-4(f)) is amended--
[[Page H4537]]
(1) in the heading, by striking ``Volume Performance
Standard Rates of Increase'' and inserting ``Sustainable
Growth Rate''; and
(2) in paragraph (1)--
(A) in the heading, by striking ``volume performance
standard rates of increase'' and inserting ``sustainable
growth rate'',
(B) by striking subparagraphs (A) and (B); and
(C) in paragraph (1)(C)--
(i) in the heading, by striking ``performance standard
rates of increase'' and inserting ``sustainable growth
rate'';
(ii) in the first sentence, by striking ``with 1991), the
performance standard rates of increase'' and all that follows
through the first period and inserting ``with 1999), the
sustainable growth rate for the fiscal year beginning in that
year.''; and
(iii) in the second sentence, by striking ``January 1,
1990, the performance standard rate of increase under
subparagraph (D) for fiscal year 1990'' and inserting
``January 1, 1999, the sustainable growth rate for fiscal
year 1999''.
SEC. 10604. PAYMENT RULES FOR ANESTHESIA SERVICES.
(a) In General.--Section 1848(d)(1) (42 U.S.C. 1395w-
4(d)(1)), as amended by section 10601(a), is amended--
(1) in subparagraph (C), striking ``The single'' and
inserting ``Except as provided in subparagraph (D), the
single'';
(2) by redesignating subparagraph (D) as subparagraph (E);
and
(3) by inserting after subparagraph (C) the following new
subparagraph:
``(D) Special rules for anesthesia services.--The separate
conversion factor for anesthesia services for a year shall be
equal to 46 percent of the single conversion factor
established for other physicians' services, except as
adjusted for changes in work, practice expense, or
malpractice relative value units. ''.
(b) Classification of Anesthesia Services.--The first
sentence of section 1848(j)(1) (42 U.S.C. 1395w-4(j)(1)) is
amended--
(1) by striking ``and including anesthesia services''; and
(2) by inserting before the period the following:
``(including anesthesia services)''.
(c) Effective Date.--The amendments made by this section
shall apply to services furnished on or after January 1,
1998.
SEC. 10605. IMPLEMENTATION OF RESOURCE-BASED PHYSICIAN
PRACTICE EXPENSE.
(a) 1-Year Delay in Implementation.--Section 1848(c) (42
U.S.C. 1395w-4(c)) is amended--
(1) in paragraph (2)(C)(ii), in the matter before subclause
(I) and after subclause (II), by striking ``1998'' and
inserting ``1999'' each place it appears; and
(2) in paragraph (3)(C)(ii), by striking ``1998'' and
inserting ``1999''.
(b) Phased-in Implementation.--Section 1848(c)(2)(C)(ii)
(42 U.S.C. 1395w-4(c)(2)(C)(ii)) is further amended--
(1) in subparagraph (C)(ii), in the matter following
subclause (II), by inserting ``, to the extent provided under
subparagraph (G),'' after ``based'', and
(2) by adding at the end the following new subparagraph:
``(G) Transitional rule for resource-based practice expense
units.--In applying subparagraph (C)(ii) for 1999, 2000,
2001, and any subsequent year, the number of units under such
subparagraph shall be based 75 percent, 50 percent, 25
percent, and 0 percent, respectively, on the practice expense
relative value units in effect in 1998 (or the Secretary's
imputation of such units for new or revised codes) and the
remainder on the relative value expense resources involved in
furnishing the service.''.
SEC. 10606. DISSEMINATION OF INFORMATION ON HIGH PER
DISCHARGE RELATIVE VALUES FOR IN-HOSPITAL
PHYSICIANS' SERVICES.
(a) Determination and Notice Concerning Hospital-Specific
Per Discharge Relative Values.--
(1) In general.--For 1999 and 2001 the Secretary of Health
and Human Services shall determine for each hospital--
(A) the hospital-specific per discharge relative value
under subsection (b); and
(B) whether the hospital-specific relative value is
projected to be excessive (as determined based on such value
represented as a percentage of the median of hospital-
specific per discharge relative values determined under
subsection (b)).
(2) Notice to medical staffs and carriers.--The Secretary
shall notify the medical executive committee of each hospital
identifies under paragraph (1)(B) as having an excessive
hospital-specific relative value, of the determinations made
with respect to the medical staff under paragraph (1).
(b) Determination of Hospital-Specific Per Discharge
Relative Values.--
(1) In general.--For purposes of this section, the
hospital-specific per discharge relative value for the
medical staff of a hospital (other than a teaching hospital)
for a year, shall be equal to the average per discharge
relative value (as determined under section 1848(c)(2) of the
Social Security Act) for physicians' services furnished to
inpatients of the hospital by the hospital's medical staff
(excluding interns and residents) during the second year
preceding that calendar year, adjusted for variations in
case-mix and disproportionate share status among hospitals
(as determined by the Secretary under paragraph (3)).
(2) Special rule for teaching hospitals.--The hospital-
specific relative value projected for a teaching hospital in
a year shall be equal to the sum of--
(A) the average per discharge relative value (as determined
under section 1848(c)(2) of such Act) for physicians'
services furnished to inpatients of the hospital by the
hospital's medical staff (excluding interns and residents)
during the second year preceding that calendar year, and
(B) the equivalent per discharge relative value (as
determined under such section) for physicians' services
furnished to inpatients of the hospital by interns and
residents of the hospital during the second year preceding
that calendar year, adjusted for variations in case-mix,
disproportionate share status, and teaching status among
hospitals (as determined by the Secretary under paragraph
(3)).
The Secretary shall determine the equivalent relative value
unit per discharge for interns and residents based on the
best available data and may make such adjustment in the
aggregate.
(3) Adjustment for teaching and disproportionate share
hospitals.--The Secretary shall adjust the allowable per
discharge relative values otherwise determined under this
subsection to take into account the needs of teaching
hospitals and hospitals receiving additional payments under
subparagraphs (F) and (G) of section 1886(d)(5) of the Social
Security Act. The adjustment for teaching status or
disproportionate share shall not be less than zero.
(c) Definitions.--For purposes of this section:
(1) Hospital.--The term ``hospital'' means a subsection (d)
hospital as defined in section 1886(d) of the Social Security
Act (42 U.S.C. 1395ww(d)) .
(2) Medical staff.--An individual furnishing a physician's
service is considered to be on the medical staff of a
hospital--
(A) if (in accordance with requirements for hospitals
established by the Joint Commission on Accreditation of
Health Organizations)--
(i) the individual is subject to bylaws, rules, and
regulations established by the hospital to provide a
framework for the self-governance of medical staff
activities,
(ii) subject to the bylaws, rules, and regulations, the
individual has clinical privileges granted by the hospital's
governing body, and
(iii) under the clinical privileges, the individual may
provide physicians'' services independently within the scope
of the individual's clinical privileges, or
(B) if the physician provides at least one service to an
individual entitled to benefits under this title in that
hospital.
(3) Physicians' services.--The term ``physicians''
services'' means the services described in section 1848(j)(3)
of the Social Security Act (42 U.S.C. 1395w-4(j)(3)).
(4) Rural area; urban area.--The terms ``rural area'' and
``urban area'' have the meaning given those terms under
section 1886(d)(2)(D) of such Act (42 U.S.C.
1395ww(d)(2)(D)).
(5) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services .
(6) Teaching hospital.--The term ``teaching hospital''
means a hospital which has a teaching program approved as
specified in section 1861(b)(6) of the Social Security Act
(42 U.S.C. 1395x(b)(6)).
SEC. 10607. NO X-RAY REQUIRED FOR CHIROPRACTIC SERVICES.
(a) In General.--Section 1861(r)(5) (42 U.S.C. 1395x(r)(5))
is amended by striking ``demonstrated by X-ray to exist''.
(b) Effective Date.--The amendment made by subsection (a)
applies to services furnished on or after January 1, 1998.
SEC. 10608. TEMPORARY COVERAGE RESTORATION FOR PORTABLE
ELECTROCARDIOGRAM TRANSPORTATION.
(a) In General.--Effective for electrocardiogram tests
furnished during 1998, the Secretary of Health and Human
Services shall restore separate payment, under part B of
title XVIII of the Social Security Act, for the
transportation of electrocardiogram equipment (HCPCS code
R0076) based upon the status code and relative value units
established for such service as of December 31, 1996.
(b) Determination.--By not later than July 1, 1998, the
Secretary of Health and Human Services shall determine,
taking into account the study of coverage of portable
electrocardiogram transportation conducted by the Comptroller
General and other relevant information, including information
submitted by interested parties, whether coverage of portable
electrocardiogram transportation should be provided under
part B of title XVIII of the Social Security Act.
CHAPTER 2--OTHER PAYMENT PROVISIONS
SEC. 10611. PAYMENTS FOR DURABLE MEDICAL EQUIPMENT.
(a) Reduction in Payment Amounts for Items of Durable
Medical Equipment.--
(1) Freeze in update for covered items.--Section
1834(a)(14) (42 U.S.C. 1395m(a)(14)) is amended--
(A) by striking ``and'' at the end of subparagraph (A);
(B) in subparagraph (B)--
(i) by striking ``a subsequent year'' and inserting ``1993,
1994, 1995, 1996, and 1997'', and
(ii) by striking the period at the end and inserting a
semicolon; and
[[Page H4538]]
(C) by adding at the end the following:
``(C) for each of the years 1998 through 2002, 0 percentage
points; and
``(D) for a subsequent 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 of the
previous year.''.
(2) Update for orthotics and prosthetics.--Section
1834(h)(4)(A) (42 U.S.C. 1395m(h)(4)(A)) is amended--
(A) by striking ``, and'' at the end of clause (iii) and
inserting a semicolon;
(B) in clause (iv), by striking ``a subsequent year'' and
inserting ``1996 and 1997'', and
(C) by adding at the end the following new clauses:
``(v) for each of the years 1998 through 2002, 1 percent,
and
``(vi) for a subsequent year, the percentage increase in
the consumer price index for all urban consumers (United
States city average) for the 12-month period ending with June
of the previous year;''.
(c) Payment Freeze for Parenteral and Enteral Nutrients,
Supplies, and Equipment.--In determining the amount of
payment under part B of title XVIII of the Social Security
Act with respect to parenteral and enteral nutrients,
supplies, and equipment during each of the years 1998 through
2002, the charges determined to be reasonable with respect to
such nutrients, supplies, and equipment may not exceed the
charges determined to be reasonable with respect to such
nutrients, supplies, and equipment during 1995.
SEC. 10612. OXYGEN AND OXYGEN EQUIPMENT.
Section 1834(a)(9)(C) (42 U.S.C. 1395m(a)(9)(C)) is
amended--
(1) by striking ``and'' at the end of clause (iii);
(2) in clause (iv)--
(A) by striking ``a subsequent year'' and inserting ``1993,
1994, 1995, 1996, and 1997'', and
(B) by striking the period at the end and inserting a
semicolon; and
(3) by adding at the end the following new clauses:
``(v) in each of the years 1998 through 2002, is 80 percent
of the national limited monthly payment rate computed under
subparagraph (B) for the item for the year; and
``(vi) in a subsequent year, is the national limited
monthly payment rate computed under subparagraph (B) for the
item for the year.''.
SEC. 10613. REDUCTION IN UPDATES TO PAYMENT AMOUNTS FOR
CLINICAL DIAGNOSTIC LABORATORY TESTS.
(a) Change in Update.--Section 1833(h)(2)(A)(ii)(IV) (42
U.S.C. 1395l(h)(2)(A)(ii)(IV)) is amended by inserting ``and
1998 through 2002'' after ``1995''.
(b) Lowering Cap on Payment Amounts.--Section 1833(h)(4)(B)
(42 U.S.C. 1395l(h)(4)(B)) is amended--
(1) in clause (vi), by striking ``and'' at the end;
(2) in clause (vii)--
(A) by inserting ``and before January 1, 1998,'' after
``1995,'', and
(B) by striking the period at the end and inserting ``,
and''; and
(3) by adding at the end the following new clause:
``(viii) after December 31, 1997, is equal to 72 percent of
such median.''.
SEC. 10614. SIMPLIFICATION IN ADMINISTRATION OF LABORATORY
TESTS.
(a) Selection of Regional Carriers.--
(1) In general.--The Secretary of Health and Human Services
(in this section referred to as the ``Secretary'') shall--
(A) divide the United States into no more than 5 regions,
and
(B) designate a single carrier for each such region,
for the purpose of payment of claims under part B of title
XVIII of the Social Security Act with respect to clinical
diagnostic laboratory tests (other than for independent
physician offices) furnished on or after such date (not later
than January 1, 1999) as the Secretary specifies.
(2) Designation.--In designating such carriers, the
Secretary shall consider, among other criteria--
(A) a carrier's timeliness, quality, and experience in
claims processing, and
(B) a carrier's capacity to conduct electronic data
interchange with laboratories and data matches with other
carriers.
(3) Single data resource.--The Secretary may select one of
the designated carriers to serve as a central statistical
resource for all claims information relating to such clinical
diagnostic laboratory tests handled by all the designated
carriers under such part.
(4) Allocation of claims.--The allocation of claims for
clinical diagnostic laboratory tests to particular designated
carriers shall be based on whether a carrier serves the
geographic area where the laboratory specimen was collected
or other method specified by the Secretary.
(b) Adoption of Uniform Policies for Clinical Laboratory
Tests.--
(1) In general.--Not later than July 1, 1998, the Secretary
shall first adopt, consistent with paragraph (2), uniform
coverage, administration, and payment policies for clinical
diagnostic laboratory tests under part B of title XVIII of
the Social Security Act, using a negotiated rulemaking
process under subchapter III of chapter 5 of title 5, United
States Code.
(2) Considerations in design of uniform policies.--The
policies under paragraph (1) shall be designed to promote
uniformity and program integrity and reduce administrative
burdens with respect to clinical diagnostic laboratory tests
payable under such part in connection with the following:
(A) Beneficiary information required to be submitted with
each claim or order for laboratory tests.
(B) Physicians' obligations regarding documentation
requirements and recordkeeping.
(C) Procedures for filing claims and for providing
remittances by electronic media.
(D) The documentation of medical necessity.
(E) Limitation on frequency of coverage for the same tests
performed on the same individual.
(3) Changes in carrier requirements pending adoption of
uniform policy.--During the period that begins on the date of
the enactment of this Act and ends on the date the Secretary
first implements uniform policies pursuant to regulations
promulgated under this subsection, a carrier under such part
may implement changes relating to requirements for the
submission of a claim for clinical diagnostic laboratory
tests.
(4) Use of interim regional policies.--After the date the
Secretary first implements such uniform policies, the
Secretary shall permit any carrier to develop and implement
interim policies of the type described in paragraph (1), in
accordance with guidelines established by the Secretary, in
cases in which a uniform national policy has not been
established under this subsection and there is a demonstrated
need for a policy to respond to aberrant utilization or
provision of unnecessary services. Except as the Secretary
specifically permits, no policy shall be implemented under
this paragraph for a period of longer than 2 years.
(5) Interim national policies.--After the date the
Secretary first designates regional carriers under subsection
(a), the Secretary shall establish a process under which
designated carriers can collectively develop and implement
interim national standards of the type described in paragraph
(1). No such policy shall be implemented under this paragraph
for a period of longer than 2 years.
(6) Biennial review process.--Not less often than once
every 2 years, the Secretary shall solicit and review
comments regarding changes in the uniform policies
established under this subsection. As part of such biennial
review process, the Secretary shall specifically review and
consider whether to incorporate or supersede interim,
regional, or national policies developed under paragraph (4)
or (5). Based upon such review, the Secretary may provide for
appropriate changes in the uniform policies previously
adopted under this subsection.
(7) Notice.-- Before a carrier implements a change or
policy under paragraph (3), (4), or (5), the carrier shall
provide for advance notice to interested parties and a 45-day
period in which such parties may submit comments on the
proposed change.
(c) Inclusion of Laboratory Representative on Carrier
Advisory Committees.--The Secretary shall direct that any
advisory committee established by such a carrier, to advise
with respect to coverage, administration or payment policies
under part B of title XVIII of the Social Security Act, shall
include an individual to represent the interest and views of
independent clinical laboratories and such other laboratories
as the Secretary deems appropriate. Such individual shall be
selected by such committee from among nominations submitted
by national and local organizations that represent
independent clinical laboratories.
SEC. 10615. UPDATES FOR AMBULATORY SURGICAL SERVICES.
Section 1833(i)(2)(C) (42 U.S.C. 1395l(i)(2)(C)) is amended
by striking all that follows ``shall be increased'' and
inserting the following: ``as follows:
``(i) For fiscal years 1996 and 1997, by the percentage
increase in the consumer price index for all urban consumers
(U.S. city average) as estimated by the Secretary for the 12-
month period ending with the midpoint of the year involved.
``(ii) For each of fiscal years 1998 through 2002 by such
percentage increase minus 2.0 percentage points.
``(iii) For each succeeding fiscal year by such percentage
increase.''.
SEC. 10616. REIMBURSEMENT FOR DRUGS AND BIOLOGICALS.
(a) In General.--Section 1842 (42 U.S.C. 1395u) is amended
by inserting after subsection (n) the following new
subsection:
``(o) If a physician's, supplier's, or any other person's
bill or request for payment for services includes a charge
for a drug or biological for which payment may be made under
this part and the drug or biological is not paid on a cost or
prospective payment basis as otherwise provided in this part,
the amount payable for the drug or biological is equal to 95
percent of the average wholesale price.''.
(b) Effective Date.--The amendments made by subsection (a)
apply to drugs and biologicals furnished on or after January
1, 1998.
SEC. 10617. COVERAGE OF ORAL ANTI-NAUSEA DRUGS UNDER
CHEMOTHERAPEUTIC REGIMEN.
(a) In General.--Section 1861(s)(2) (42 U.S.C.
1395x(s)(2)), as amended, is further amended--
(1) by striking ``and'' at the end of subparagraph (R); and
(2) by inserting after subparagraph (S) the following new
subparagraph:
``(T) an oral drug (which is approved by the Federal Food
and Drug Administration) prescribed for use as an acute anti-
emetic used
[[Page H4539]]
as part of an anticancer chemotherapeutic regimen if the drug
is administered by a physician (or as prescribed by a
physician)--
``(i) for use immediately before, at, or within 48 hours
after the time of the administration of the anticancer
chemotherapeutic agent; and
``(ii) as a full replacement for the anti-emetic therapy
which would otherwise be administered intravenously.''.
(b) Payment Levels.--Section 1834 (42 U.S.C. 1395m), as
amended by sections 10421(a)(2) and 10431(b)(2), is amended
by adding at the end the following new subsection:
``(m) Special Rules for Payment for Oral Anti-Nausea
Drugs.--
``(1) Limitation on per dose payment basis.--Subject to
paragraph (2), the per dose payment basis under this part for
oral anti-nausea drugs (as defined in paragraph (3))
administered during a year shall not exceed 90 percent of the
average per dose payment basis for the equivalent intravenous
anti-emetics administered during the year, as computed based
on the payment basis applied during 1996.
``(2) Aggregate limit.--The Secretary shall make such
adjustment in the coverage of, or payment basis for, oral
anti-nausea drugs so that coverage of such drugs under this
part does not result in any increase in aggregate payments
per capita under this part above the levels of such payments
per capita that would otherwise have been made if there were
no coverage for such drugs under this part.
``(3) Oral anti-nausea drugs defined.--For purposes of this
subsection, the term `oral anti-nausea drugs' means drugs for
which coverage is provided under this part pursuant to
section 1861(s)(2)(P).''.
(c) Effective Date.--The amendments made by this section
shall apply to items and services furnished on or after
January 1, 1998.
SEC. 10618. RURAL HEALTH CLINIC SERVICES.
(a) Per-Visit Payment Limits for Provider-Based Clinics.--
(1) Extension of limit.--
(A) In general.--The matter in section 1833(f) (42 U.S.C.
1395l(f)) preceding paragraph (1) is amended by striking
``independent rural health clinics'' and inserting ``rural
health clinics (other than such clinics in rural hospitals
with less than 50 beds)''.
(B) Effective date.--The amendment made by subparagraph (A)
applies to services furnished after 1997.
(2) Technical clarification.--Section 1833(f)(1) (42 U.S.C.
1395l(f)(1)) is amended by inserting ``per visit'' after
``$46''.
(b) Assurance of Quality Services.--
(1) In general.--Subparagraph (I) of the first sentence of
section 1861(aa)(2) (42 U.S.C. 1395x(aa)(2)) is amended to
read as follows:
``(I) has a quality assessment and performance improvement
program, and appropriate procedures for review of utilization
of clinic services, as the Secretary may specify,''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect on January 1, 1998.
(c) Waiver of Certain Staffing Requirements Limited to
Clinics in Program.--
(1) In general.--Section 1861(aa)(7)(B) (42 U.S.C.
1395x(aa)(7)(B)) is amended by inserting before the period at
the end the following: ``, or if the facility has not yet
been determined to meet the requirements (including
subparagraph (J) of the first sentence of paragraph (2)) of a
rural health clinic''.
(2) Effective date.--The amendment made by paragraph (1)
applies to waiver requests made after 1997.
(d) Refinement of Shortage Area Requirements.--
(1) Designation reviewed triennially.--Section 1861(aa)(2)
(42 U.S.C. 1395x(aa)(2)) is amended in the second sentence,
in the matter in clause (i) preceding subclause (I)--
(A) by striking ``and that is designated'' and inserting
``and that, within the previous three-year period, has been
designated''; and
(B) by striking ``or that is designated'' and inserting
``or designated''.
(2) Area must have shortage of health care practitioners.--
Section 1861(aa)(2) (42 U.S.C. 1395x(aa)(2)), as amended by
paragraph (1), is further amended in the second sentence, in
the matter in clause (i) preceding subclause (I)--
(A) by striking the comma after ``personal health
services''; and
(B) by inserting ``and in which there are insufficient
numbers of needed health care practitioners (as determined by
the Secretary),'' after ``Bureau of the Census)''.
(3) Previously qualifying clinics grandfathered only to
prevent shortage.--Section 1861(aa)(2) (42 U.S.C.
1395x(aa)(2)) is amended in the third sentence by inserting
before the period ``if it is determined, in accordance with
criteria established by the Secretary in regulations, to be
essential to the delivery of primary care services that would
otherwise be unavailable in the geographic area served by the
clinic''.
(4) Effective dates; implementing regulations.--
(A) In general.--Except as otherwise provided, the
amendments made by the preceding paragraphs take effect on
January 1 of the first calendar year beginning at least one
month after enactment of this Act.
(B) Current rural health clinics.--The amendments made by
the preceding paragraphs take effect, with respect to
entities that are rural health clinics under title XVIII of
the Social Security Act on the date of enactment of this Act,
on January 1 of the second calendar year following the
calendar year specified in subparagraph (A).
(C) Grandfathered clinics.--
(i) In general.--The amendment made by paragraph (3) shall
take effect on the effective date of regulations issued by
the Secretary under clause (ii).
(ii) Regulations.--The Secretary shall issue final
regulations implementing paragraph (3) that shall take effect
no later than January 1 of the third calendar year beginning
at least one month after enactment of this Act.
SEC. 10619. INCREASED MEDICARE REIMBURSEMENT FOR NURSE
PRACTITIONERS AND CLINICAL NURSE SPECIALISTS.
(a) Removal of Restrictions on Settings.--
(1) In general.--Clause (ii) of section 1861(s)(2)(K) (42
U.S.C. 1395x(s)(2)(K)) is amended to read as follows:
``(ii) services which would be physicians' services if
furnished by a physician (as defined in subsection (r)(1))
and which are performed by a nurse practitioner or clinical
nurse specialist (as defined in subsection (aa)(5)) working
in collaboration (as defined in subsection (aa)(6)) with a
physician (as defined in subsection (r)(1)) which the nurse
practitioner or clinical nurse specialist is legally
authorized to perform by the State in which the services are
performed, and such services and supplies furnished as an
incident to such services as would be covered under
subparagraph (A) if furnished incident to a physician's
professional service, but only if no facility or other
provider charges or is paid any amounts with respect to the
furnishing of such services;''.
(2) Conforming amendments.--(A) Section 1861(s)(2)(K) of
such Act (42 U.S.C. 1395x(s)(2)(K)) is further amended--
(i) in clause (i), by inserting ``and such services and
supplies furnished as incident to such services as would be
covered under subparagraph (A) if furnished incident to a
physician's professional service,'' after ``are performed,'';
and
(ii) by striking clauses (iii) and (iv).
(B) Section 1861(b)(4) (42 U.S.C. 1395x(b)(4)) is amended
by striking ``clauses (i) or (iii) of subsection (s)(2)(K)''
and inserting ``subsection (s)(2)(K)''.
(C) Section 1862(a)(14) (42 U.S.C. 1395y(a)(14)) is amended
by striking ``section 1861(s)(2)(K)(i) or
1861(s)(2)(K)(iii)'' and inserting ``section 1861(s)(2)(K)''.
(D) Section 1866(a)(1)(H) (42 U.S.C. 1395cc(a)(1)(H)) is
amended by striking ``section 1861(s)(2)(K)(i) or
1861(s)(2)(K)(iii)'' and inserting ``section 1861(s)(2)(K)''.
(E) Section 1888(e)(2)(A)(ii) (42 U.S.C.
1395yy(e)(2)(A)(ii)), as added by section 10401(a), is
amended by striking ``through (iii)'' and inserting ``and
(ii)''.
(b) Increased Payment.--
(1) Fee schedule amount.--Clause (O) of section 1833(a)(1)
(42 U.S.C. 1395l(a)(1)) is amended to read as follows: ``(O)
with respect to services described in section
1861(s)(2)(K)(ii) (relating to nurse practitioner or clinical
nurse specialist services), the amounts paid shall be equal
to 80 percent of (i) the lesser of the actual charge or 85
percent of the fee schedule amount provided under section
1848, or (ii) in the case of services as an assistant at
surgery, the lesser of the actual charge or 85 percent of the
amount that would otherwise be recognized if performed by a
physician who is serving as an assistant at surgery; and''.
(2) Conforming amendments.--(A) Section 1833(r) (42 U.S.C.
1395l(r)) is amended--
(i) in paragraph (1), by striking ``section
1861(s)(2)(K)(iii) (relating to nurse practitioner or
clinical nurse specialist services provided in a rural
area)'' and inserting ``section 1861(s)(2)(K)(ii) (relating
to nurse practitioner or clinical nurse specialist
services)'';
(ii) by striking paragraph (2);
(iii) in paragraph (3), by striking ``section
1861(s)(2)(K)(iii)'' and inserting ``section
1861(s)(2)(K)(ii)''; and
(iv) by redesignating paragraph (3) as paragraph (2).
(B) Section 1842(b)(12)(A) (42 U.S.C. 1395u(b)(12)(A)) is
amended, in the matter preceding clause (i), by striking
``clauses (i), (ii), or (iv) of section 1861(s)(2)(K)
(relating to a physician assistants and nurse
practitioners)'' and inserting ``section 1861(s)(2)(K)(i)
(relating to physician assistants),''.
(c) Direct Payment for Nurse Practitioners and Clinical
Nurse Specialists.--
(1) In general.--Section 1832(a)(2)(B)(iv) (42 U.S.C.
1395k(a)(2)(B)(iv)) is amended by striking ``provided in a
rural area (as defined in section 1886(d)(2)(D))'' and
inserting ``but only if no facility or other provider charges
or is paid any amounts with respect to the furnishing of such
services''.
(2) Conforming amendment.--Section 1842(b)(6)(C) (42 U.S.C.
1395u(b)(6)(C)) is amended--
(A) by striking ``clauses (i), (ii), or (iv)'' and
inserting ``clause (i)''; and
(B) by striking ``or nurse practitioner''.
(d) Definition of Clinical Nurse Specialist Clarified.--
Section 1861(aa)(5) (42 U.S.C. 1395x(aa)(5)) is amended--
(1) by inserting ``(A)'' after ``(5)'';
(2) by striking ``The term `physician assistant' '' and all
that follows through ``who performs'' and inserting ``The
term `physician assistant' and the term `nurse practitioner'
mean, for purposes of this title, a physician assistant or
nurse practitioner who performs''; and
(3) by adding at the end the following new subparagraph:
``(B) The term `clinical nurse specialist' means, for
purposes of this title, an individual who--
[[Page H4540]]
``(i) is a registered nurse and is licensed to practice
nursing in the State in which the clinical nurse specialist
services are performed; and
``(ii) holds a master's degree in a defined clinical area
of nursing from an accredited educational institution.''.
(e) Effective Date.--The amendments made by this section
shall apply with respect to services furnished and supplies
provided on and after January 1, 1998.
SEC. 10620. INCREASED MEDICARE REIMBURSEMENT FOR PHYSICIAN
ASSISTANTS.
(a) Removal of Restriction on Settings.--Section
1861(s)(2)(K)(i) (42 U.S.C. 1395x(s)(2)(K)(i)) is amended--
(1) by striking ``(I) in a hospital'' and all that follows
through ``shortage area,'', and
(2) by adding at the end the following: ``but only if no
facility or other provider charges or is paid any amounts
with respect to the furnishing of such services,''.
(b) Increased Payment.--Paragraph (12) of section 1842(b)
(42 U.S.C. 1395u(b)), as amended by section 10619(b)(2)(B),
is amended to read as follows:
``(12) With respect to services described in section
1861(s)(2)(K)(i)--
``(A) payment under this part may only be made on an
assignment-related basis; and
``(B) the amounts paid under this part shall be equal to 80
percent of (i) the lesser of the actual charge or 85 percent
of the fee schedule amount provided under section 1848 for
the same service provided by a physician who is not a
specialist; or (ii) in the case of services as an assistant
at surgery, the lesser of the actual charge or 85 percent of
the amount that would otherwise be recognized if performed by
a physician who is serving as an assistant at surgery.''.
(c) Removal of Restriction on Employment Relationship.--
Section 1842(b)(6) (42 U.S.C. 1395u(b)(6)) is amended by
adding at the end the following new sentence: ``For purposes
of clause (C) of the first sentence of this paragraph, an
employment relationship may include any independent
contractor arrangement, and employer status shall be
determined in accordance with the law of the State in which
the services described in such clause are performed.''.
(d) Effective Date.--The amendments made by this section
shall apply with respect to services furnished and supplies
provided on and after January 1, 1998.
SEC. 10621. RENAL DIALYSIS-RELATED SERVICES.
(a) Auditing of Cost Reports.--The Secretary shall audit a
sample of cost reports of renal dialysis providers for 1995
and for each third year thereafter.
(b) Implementation of Quality Standards.--The Secretary of
Health and Human Services shall develop and implement, by not
later than January 1, 1999, a method to measure and report
quality of renal dialysis services provided under the
medicare program under title XVIII of the Social Security Act
in order to reduce payments for inappropriate or low quality
care.
CHAPTER 3--PART B PREMIUM
SEC. 10631. PART B PREMIUM.
(a) In General.--The first, second and third sentences of
section 1839(a)(3) (42 U.S.C. 1395r(a)(3)) are amended to
read as follows: ``The Secretary, during September of each
year, shall determine and promulgate a monthly premium rate
for the succeeding calendar year. That monthly premium rate
shall be equal to 50 percent of the monthly actuarial rate
for enrollees age 65 and over, determined according to
paragraph (1), for that succeeding calendar year.''.
(b) Conforming and Technical Amendments.--
(1) Section 1839.--Section 1839 (42 U.S.C. 1395r) is
amended--
(A) in subsection (a)(2), by striking ``(b) and (e)'' and
inserting ``(b), (c), and (f)'',
(B) in the last sentence of subsection (a)(3)--
(i) by inserting ``rate'' after ``premium'', and
(ii) by striking ``and the derivation of the dollar amounts
specified in this paragraph'',
(C) by striking subsection (e), and
(D) by redesignating subsection (g) as subsection (e) and
inserting that subsection after subsection (d).
(2) Section 1844.--Subparagraphs (A)(i) and (B)(i) of
section 1844(a)(1) (42 U.S.C. 1395w(a)(1)) are each amended
by striking ``or 1839(e), as the case may be''.
Subtitle H--Provisions Relating to Parts A and B
CHAPTER 1--PROVISIONS RELATING TO MEDICARE SECONDARY PAYER
SEC. 10701. PERMANENT EXTENSION AND REVISION OF CERTAIN
SECONDARY PAYER PROVISIONS.
(a) Application to Disabled Individuals in Large Group
Health Plans.--
(1) In general.--Section 1862(b)(1)(B) (42 U.S.C.
1395y(b)(1)(B)) is amended--
(A) in clause (i), by striking ``clause (iv)'' and
inserting ``clause (iii)'',
(B) by striking clause (iii), and
(C) by redesignating clause (iv) as clause (iii).
(2) Conforming amendments.--Paragraphs (1) through (3) of
section 1837(i) (42 U.S.C. 1395p(i)) and the second sentence
of section 1839(b) (42 U.S.C. 1395r(b)) are each amended by
striking ``1862(b)(1)(B)(iv)'' each place it appears and
inserting ``1862(b)(1)(B)(iii)''.
(b) Individuals With End Stage Renal Disease.--
(1) In general.--Section 1862(b)(1)(C) (42 U.S.C.
1395y(b)(1)(C)) is amended--
(A) in the first sentence, by striking ``12-month'' each
place it appears and inserting ``30-month'', and
(B) by striking the second sentence.
(2) Effective date.--The amendments made by paragraph (1)
shall apply to items and services furnished on or after the
date of the enactment of this Act and with respect to periods
beginning on or after the date that is 18 months prior to
such date.
(c) IRS-SSA-HCFA Data Match.--
(1) Social security act.--Section 1862(b)(5)(C) (42 U.S.C.
1395y(b)(5)(C)) is amended by striking clause (iii).
(2) Internal revenue code.--Section 6103(l)(12) of the
Internal Revenue Code of 1986 is amended by striking
subparagraph (F).
SEC. 10702. CLARIFICATION OF TIME AND FILING LIMITATIONS.
(a) Extension of Claims Filing Period.--Section
1862(b)(2)(B) (42 U.S.C. 1395y(b)(2)(B)) is amended by adding
at the end the following new clause:
``(v) Claims-filing period.--Notwithstanding any other time
limits that may exist for filing a claim under an employer
group health plan, the United States may seek to recover
conditional payments in accordance with this subparagraph
where the request for payment is submitted to the entity
required or responsible under this subsection to pay with
respect to the item or service (or any portion thereof) under
a primary plan within the 3-year period beginning on the date
on which the item or service was furnished.''.
(b) Effective Date.--The amendment made by subsection (a)
applies to items and services furnished after 1990. The
previous sentence shall not be construed as permitting any
waiver of the 3-year-period requirement (imposed by such
amendment) in the case of items and services furnished more
than 3 years before the date of the enactment of this Act.
SEC. 10703. PERMITTING RECOVERY AGAINST THIRD PARTY
ADMINISTRATORS.
(a) Permitting Recovery Against Third Party Administrators
of Primary Plans.--Section 1862(b)(2)(B)(ii) (42 U.S.C.
1395y(b)(2)(B)(ii)) is amended--
(1) by striking ``under this subsection to pay'' and
inserting ``(directly, as a third-party administrator, or
otherwise) to make payment'', and
(2) by adding at the end the following: ``The United States
may not recover from a third-party administrator under this
clause in cases where the third-party administrator would not
be able to recover the amount at issue from the employer or
group health plan for whom it provides administrative
services due to the insolvency or bankruptcy of the employer
or plan.''.
(b) Clarification of Beneficiary Liability.--Section
1862(b)(1) (42 U.S.C. 1395y(b)(1)) is amended by adding at
the end the following new subparagraph:
``(F) Limitation on beneficiary liability.--An individual
who is entitled to benefits under this title and is furnished
an item or service for which such benefits are incorrectly
paid is not liable for repayment of such benefits under this
paragraph unless payment of such benefits was made to the
individual.''.
(c) Effective Date.--The amendments made by this section
apply to items and services furnished on or after the date of
the enactment of this Act.
CHAPTER 2--HOME HEALTH SERVICES
SEC. 10711. RECAPTURING SAVINGS RESULTING FROM TEMPORARY
FREEZE ON PAYMENT INCREASES FOR HOME HEALTH
SERVICES.
(a) Basing Updates to Per Visit Cost Limits on Limits for
Fiscal Year 1993.--Section 1861(v)(1)(L) (42 U.S.C.
1395x(v)(1)(L)) is amended by adding at the end the
following:
``(iv) In establishing limits under this subparagraph for
cost reporting periods beginning after September 30, 1997,
the Secretary shall not take into account any changes in the
home health market basket, as determined by the Secretary,
with respect to cost reporting periods which began on or
after July 1, 1994, and before July 1, 1996.''.
(b) No Exceptions Permitted Based on Amendment.--The
Secretary of Health and Human Services shall not consider the
amendment made by subsection (a) in making any exemptions and
exceptions pursuant to section 1861(v)(1)(L)(ii) of the
Social Security Act (42 U.S.C. 1395x(v)(1)(L)(ii)).
SEC. 10712. INTERIM PAYMENTS FOR HOME HEALTH SERVICES.
(a) Reductions in Cost Limits.--Section 1861(v)(1)(L)(i)
(42 U.S.C. 1395x(v)(1)(L)(i)) is amended--
(1) by moving the indentation of subclauses (I) through
(III) 2-ems to the left;
(2) in subclause (I), by inserting ``of the mean of the
labor-related and nonlabor per visit costs for freestanding
home health agencies'' before the comma at the end;
(3) in subclause (II), by striking ``, or'' and inserting
``of such mean,'';
(4) in subclause (III)--
(A) by inserting ``and before October 1, 1997,'' after
``July 1, 1987,'', and
(B) by striking the comma at the end and inserting ``of
such mean, or''; and
(5) by striking the matter following subclause (III) and
inserting the following:
``(IV) October 1, 1997, 105 percent of the median of the
labor-related and nonlabor per visit costs for freestanding
home health agencies.''.
(b) Delay In Updates.--Section 1861(v)(1)(L)(iii) (42
U.S.C. 1395x(v)(1)(L)(iii)) is amended by inserting ``, or on
or after
[[Page H4541]]
July 1, 1997, and before October 1, 1997'' after ``July 1,
1996''.
(c) Additions to Cost Limits.--Section 1861(v)(1)(L) (42
U.S.C. 1395x(v)(1)(L)), as amended by section 10711(a), is
amended by adding at the end the following new clauses:
``(v) For services furnished by home health agencies for
cost reporting periods beginning on or after October 1, 1997,
the Secretary shall provide for an interim system of limits.
Payment shall not exceed the costs determined under the
preceding provisions of this subparagraph or, if lower, the
product of--
``(I) an agency-specific per beneficiary annual limitation
calculated based 75 percent on the reasonable costs
(including nonroutine medical supplies) for the agency's 12-
month cost reporting period ending during 1994, and based 25
percent on the standardized regional average of such costs
for the agency's region, as applied to such agency, for cost
reporting periods ending during 1994, such costs updated by
the home health market basket index; and
``(II) the agency's unduplicated census count of patients
(entitled to benefits under this title) for the cost
reporting period subject to the limitation.
``(vi) For services furnished by home health agencies for
cost reporting periods beginning on or after October 1, 1997,
the following rules apply:
``(I) For new providers and those providers without a 12-
month cost reporting period ending in calendar year 1994, the
per beneficiary limitation shall be equal to the median of
these limits (or the Secretary's best estimates thereof)
applied to other home health agencies as determined by the
Secretary. A home health agency that has altered its
corporate structure or name shall not be considered a new
provider for this purpose.
``(II) For beneficiaries who use services furnished by more
than one home health agency, the per beneficiary limitations
shall be prorated among the agencies.''.
(d) Development of Case Mix System.--The Secretary of
Health and Human Services shall expand research on a
prospective payment system for home health agencies under the
medicare program that ties prospective payments to a unit of
service, including an intensive effort to develop a reliable
case mix adjuster that explains a significant amount of the
variances in costs.
(e) Submission of Data for Case Mix System.--Effective for
cost reporting periods beginning on or after October 1, 1997,
the Secretary of Health and Human Services may require all
home health agencies to submit additional information that
the Secretary considers necessary for the development of a
reliable case mix system.
SEC. 10713. CLARIFICATION OF PART-TIME OR INTERMITTENT
NURSING CARE.
(a) In General.--Section 1861(m) (42 U.S.C. 1395x(m)) is
amended by adding at the end the following: ``For purposes of
paragraphs (1) and (4), the term `part-time or intermittent
services' means skilled nursing and home health aide services
furnished any number of days per week as long as they are
furnished (combined) less than 8 hours each day and 28 or
fewer hours each week (or, subject to review on a case-by-
case basis as to the need for care, less than 8 hours each
day and 35 or fewer hours per week). For purposes of sections
1814(a)(2)(C) and 1835(a)(2)(A), `intermittent' means skilled
nursing care that is either provided or needed on fewer than
7 days each week, or less than 8 hours of each day for
periods of 21 days or less (with extensions in exceptional
circumstances when the need for additional care is finite and
predictable).''.
(b) Effective Date.--The amendment made by subsection (a)
applies to services furnished on or after October 1, 1997.
SEC. 10714. STUDY ON DEFINITION OF HOMEBOUND.
(a) Study.--The Secretary of Health and Human Services
shall conduct a study of the criteria that should be applied,
and the method of applying such criteria, in the
determination of whether an individual is homebound for
purposes of qualifying for receipt of benefits for home
health services under the medicare program. Such criteria
shall include the extent and circumstances under which a
person may be absent from the home but nonetheless qualify.
(b) Report.--Not later than October 1, 1998, the Secretary
shall submit a report to the Congress on the study conducted
under subsection (a). The report shall include specific
recommendations on such criteria and methods.
SEC. 10715. PAYMENT BASED ON LOCATION WHERE HOME HEALTH
SERVICE IS FURNISHED.
(a) Conditions of Participation.--Section 1891 (42 U.S.C.
1395bbb) is amended by adding at the end the following:
``(g) Payment on Basis of Location of Service.--A home
health agency shall submit claims for payment for home health
services under this title only on the basis of the geographic
location at which the service is furnished, as determined by
the Secretary.''.
(b) Wage Adjustment.--Section 1861(v)(1)(L)(iii) (42 U.S.C.
1395x(v)(1)(L)(iii)) is amended by striking ``agency is
located'' and inserting ``service is furnished''.
(c) Effective Date.--The amendments made by this section
apply to cost reporting periods beginning on or after October
1, 1997.
SEC. 10716. NORMATIVE STANDARDS FOR HOME HEALTH CLAIMS
DENIALS,
(a) In General.--Section 1862(a)(1) (42 U.S.C.
1395y(a)(1)), as amended by section 10616(c), is amended--
(1) by striking ``and'' at the end of subparagraph (G),
(2) by striking the semicolon at the end of subparagraph
(H) and inserting ``, and'', and
(3) by inserting after subparagraph (H) the following new
subparagraph:
``(I) the frequency and duration of home health services
which are in excess of normative guidelines that the
Secretary shall establish by regulation;''.
(b) Notification.--The Secretary of Health and Human
Services may establish a process for notifying a physician in
cases in which the number of home health service visits
furnished under the medicare program pursuant to a
prescription or certification of the physician significantly
exceeds such threshold (or thresholds) as the Secretary
specifies. The Secretary may adjust such threshold to reflect
demonstrated differences in the need for home health services
among different beneficiaries.
(c) Effective Date.--The amendments made by this section
apply to services furnished on or after October 1, 1997.
SEC. 10717. NO HOME HEALTH BENEFITS BASED SOLELY ON DRAWING
BLOOD.
(a) In General.--Sections 1814(a)(2)(C) and 1835(a)(2)(A)
(42 U.S.C. 1395f(a)(2)(C), 1395n(a)(2)(A)) are each amended
by inserting ``(other than solely venipuncture for the
purpose of obtaining a blood sample)'' after ``skilled
nursing care''.
(b) Effective Date.--The amendments made by subsection (a)
apply to home health services furnished after the 6-month
period beginning after the date of enactment of this Act.
CHAPTER 3--BABY BOOM GENERATION MEDICARE COMMISSION
SEC. 10721. BIPARTISAN COMMISSION ON THE EFFECT OF THE BABY
BOOM GENERATION ON THE MEDICARE PROGRAM.
(a) Establishment.--There is established a commission to be
known as the Bipartisan Commission on the Effect of the Baby
Boom Generation on the Medicare Program (in this section
referred to as the ``Commission'').
(b) Duties.--
(1) In general.--The Commission shall--
(A) examine the financial impact on the medicare program of
the significant increase in the number of medicare eligible
individuals which will occur beginning approximately during
2010 and lasting for approximately 25 years,
(B) make specific recommendations to the Congress
respecting a comprehensive approach to preserve the medicare
program for the period during which such individuals are
eligible for medicare, and
(C) study the feasibility and desirability of
establishing--
(i) an independent commission on medicare to make
recommendations annually on how best to match the structure
of the medicare program to available funding for the program,
(ii) an expedited process for consideration of such
recommendations by Congress, and
(iii) a default mechanism to enforce Congressional spending
targets for the program if Congress fails to approve such
recommendations.
(2) Considerations in making recommendations.--In making
its recommendations, the Commission shall consider the
following:
(A) The amount and sources of Federal funds to finance the
medicare program, including the potential use of innovative
financing methods.
(B) Methods used by other nations to respond to comparable
demographic patterns in eligibility for health care benefits
for elderly and disabled individuals.
(C) Modifying age-based eligibility to correspond to
changes in age-based eligibility under the OASDI program.
(D) Trends in employment-related health care for retirees,
including the use of medical savings accounts and similar
financing devices.
(c) Membership.--
(1) Appointment.--The Commission shall be composed of 15
voting members as follows:
(A) The Majority Leader of the Senate shall appoint, after
consultation with the minority leader of the Senate, 6
members, of whom not more than 4 may be of the same political
party.
(B) The Speaker of the House of Representatives shall
appoint, after consultation with the minority leader of the
House of Representatives, 6 members, of whom not more than 4
may be of the same political party.
(C) The 3 ex officio members of the Board of Trustees of
the Federal Hospital Insurance Trust Fund and of the Federal
Supplementary Medical Insurance Trust Fund who are Cabinet
level officials.
(2) Chairman and vice chairman.--As the first item of
business at the Commission's first meeting (described in
paragraph (5)(B)), the Commission shall elect a Chairman and
Vice Chairman from among its members. The individuals elected
as Chairman and Vice Chairman may not be of the same
political party and may not have been appointed to the
Commission by the same appointing authority.
(3) Vacancies.--Any vacancy in the membership of the
Commission shall be filled in the manner in which the
original appointment was made and shall not affect the power
of the remaining members to execute the duties of the
Commission.
(4) Quorum.--A quorum shall consist of 8 members of the
Commission, except that 4 members may conduct a hearing under
subsection (f).
(5) Meetings.--
[[Page H4542]]
(A) The Commission shall meet at the call of its Chairman
or a majority of its members.
(B) The Commission shall hold its first meeting not later
than February 1, 1998.
(6) Compensation and reimbursement of expenses.--Members of
the Commission are not entitled to receive compensation for
service on the Commission. Members may be reimbursed for
travel, subsistence, and other necessary expenses incurred in
carrying out the duties of the Commission.
(d) Advisory Panel.--
(1) In general.--The Chairman, in consultation with the
Vice Chairman, may establish a panel (in this section
referred to as the ``Advisory Panel'') consisting of health
care experts, consumers, providers, and others to advise and
assist the members of the Commission in carrying out the
duties described in subsection (b). The panel shall have only
those powers that the Chairman, in consultation with the Vice
Chairman, determines are necessary and appropriate to assist
the Commission in carrying out such duties.
(2) Compensation.--Members of the Advisory Panel are not
entitled to receive compensation for service on the Advisory
Panel. Subject to the approval of the chairman of the
Commission, members may be reimbursed for travel,
subsistence, and other necessary expenses incurred in
carrying out the duties of the Advisory Panel.
(e) Staff and Consultants.--
(1) Staff.--The Commission may appoint and determine the
compensation of such staff as may be necessary to carry out
the duties of the Commission. Such appointments and
compensation may be made without regard to the provisions of
title 5, United States Code, that govern appointments in the
competitive services, and the provisions of chapter 51 and
subchapter III of chapter 53 of such title that relate to
classifications and the General Schedule pay rates.
(2) Consultants.--The Commission may procure such temporary
and intermittent services of consultants under section
3109(b) of title 5, United States Code, as the Commission
determines to be necessary to carry out the duties of the
Commission.
(f) Powers.--
(1) Hearings and other activities.--For the purpose of
carrying out its duties, the Commission may hold such
hearings and undertake such other activities as the
Commission determines to be necessary to carry out its
duties.
(2) Studies by gao.--Upon the request of the Commission,
the Comptroller General shall conduct such studies or
investigations as the Commission determines to be necessary
to carry out its duties.
(3) Cost estimates by congressional budget office.--
(A) Upon the request of the Commission, the Director of the
Congressional Budget Office shall provide to the Commission
such cost estimates as the Commission determines to be
necessary to carry out its duties.
(B) The Commission shall reimburse the Director of the
Congressional Budget Office for expenses relating to the
employment in the office of the Director of such additional
staff as may be necessary for the Director to comply with
requests by the Commission under subparagraph (A).
(4) Detail of federal employees.--Upon the request of the
Commission, the head of any Federal agency is authorized to
detail, without reimbursement, any of the personnel of such
agency to the Commission to assist the Commission in carrying
out its duties. Any such detail shall not interrupt or
otherwise affect the civil service status or privileges of
the Federal employee.
(5) Technical assistance.--Upon the request of the
Commission, the head of a Federal agency shall provide such
technical assistance to the Commission as the Commission
determines to be necessary to carry out its duties.
(6) Use of mails.--The Commission may use the United States
mails in the same manner and under the same conditions as
Federal agencies and shall, for purposes of the frank, be
considered a commission of Congress as described in section
3215 of title 39, United States Code.
(7) Obtaining information.--The Commission may secure
directly from any Federal agency information necessary to
enable it to carry out its duties, if the information may be
disclosed under section 552 of title 5, United States Code.
Upon request of the Chairman of the Commission, the head of
such agency shall furnish such information to the Commission.
(8) Administrative support services.--Upon the request of
the Commission, the Administrator of General Services shall
provide to the Commission on a reimbursable basis such
administrative support services as the Commission may
request.
(9) Printing.--For purposes of costs relating to printing
and binding, including the cost of personnel detailed from
the Government Printing Office, the Commission shall be
deemed to be a committee of the Congress.
(g) Report.--(1) Not later than May 1, 1999, the Commission
shall submit to Congress a report containing its findings and
recommendations regarding how to protect and preserve the
medicare program in a financially solvent manner until 2030
(or, if later, throughout the period of projected solvency of
the Federal Old-Age and Survivors Insurance Trust Fund). The
report shall include detailed recommendations for appropriate
legislative initiatives respecting how to accomplish this
objective.
(2) Not later than 12 months after the date of the
enactment of this Act, the Commission shall report to the
Congress on the matters specified in subsection (b)(1)(C). If
the Commission determines that it is feasible and desirable
to establish the processes described in such subsection, the
report under this paragraph shall include specific
recommendations on changes in law (such as changes in the
Congressional Budget Act of 1974 and the Balanced Budget and
Emergency Deficit Control Act of 1985) as are needed to
implement its recommendations.
(h) Termination.--The Commission shall terminate 30 days
after the date of submission of the report required in
subsection (g).
(i) Authorization of Appropriations.--There are authorized
to be appropriated $1,500,000 to carry out this section. 60
percent of such appropriation shall be payable from the
Federal Hospital Insurance Trust Fund, and 40 percent of such
appropriation shall be payable from the Federal Supplementary
Medical Insurance Trust Fund under title XVIII of the Social
Security Act (42 U.S.C. 1395i, 1395t).
CHAPTER 4--PROVISIONS RELATING TO DIRECT GRADUATE MEDICAL EDUCATION
SEC. 10731. LIMITATION ON PAYMENT BASED ON NUMBER OF
RESIDENTS AND IMPLEMENTATION OF ROLLING AVERAGE
FTE COUNT.
Section 1886(h)(4) (42 U.S.C. 1395ww(h)(4)) is amended by
adding after subparagraph (E) the following:
``(F) Limitation on number of residents for certain fiscal
years.--Such rules shall provide that for purposes of a cost
reporting period beginning on or after October 1, 1997, the
total number of full-time equivalent residents before
application of weighting factors (as determined under this
paragraph) with respect to a hospital's approved medical
residency training program may not exceed the number of full-
time equivalent residents with respect to the hospital's most
recent cost reporting period ending on or before December 31,
1996. The Secretary may establish rules, consistent with the
policies in the previous sentence and paragraph (6), with
respect to the application of the previous sentence in the
case of medical residency training programs established on or
after January 1, 1997.
``(G) Counting interns and residents for fy 1998 and
subsequent years.--
``(i) FY 1998.--For the hospital's first cost reporting
period beginning during fiscal year 1998, subject to the
limit described in subparagraph (F), the total number of
full-time equivalent residents, for determining the
hospital's graduate medical education payment, shall equal
the average of the full-time equivalent resident counts for
the cost reporting period and the preceding cost reporting
period.
``(ii) Subsequent years.--For each subsequent cost
reporting period, subject to the limit described in
subparagraph (F), the total number of full-time equivalent
residents, for determining the hospital's graduate medical
education payment, shall equal the average of the actual
full-time equivalent resident counts for the cost reporting
period and preceding two cost reporting periods.
``(iii) Adjustment for short periods.--If a hospital's cost
reporting period beginning on or after October 1, 1997, is
not equal to twelve months, the Secretary shall make
appropriate modifications to ensure that the average full-
time equivalent resident counts pursuant to clause (ii) are
based on the equivalent of full 12-month cost reporting
periods.''.
SEC. 10732. PHASED-IN LIMITATION ON HOSPITAL OVERHEAD AND
SUPERVISORY PHYSICIAN COMPONENT OF DIRECT
MEDICAL EDUCATION COSTS.
(a) In General.--Section 1886(h)(3) (42 U.S.C.
1395ww(h)(3)) is amended--
(1) in subparagraph (B), by inserting ``subject to
subparagraph (D),'' after ``subparagraph (A)'', and
(2) by adding at the end the following:
``(D) Phased-in limitation on hospital overhead and
supervisory physician component.--
``(i) In general.--In the case of a hospital for which the
overhead GME amount (as defined in clause (ii)) for the base
period exceeds an amount equal to the 75th percentile of the
overhead GME amounts in such period for all hospitals
(weighted to reflect the full-time equivalent resident counts
for all approved medical residency training programs),
subject to clause (iv), the hospital's approved FTE resident
amount (for periods beginning on or after October 1, 1997)
shall be reduced from the amount otherwise applicable (as
previously reduced under this subparagraph) by an overhead
reduction amount. The overhead reduction amount is equal to
the lesser of--
``(I) 20 percent of the reference reduction amount
(described in clause (iii)) for the period, or
``(II) 15 percent of the hospital's overhead GME amount for
the period (as otherwise determined before the reduction
provided under this subparagraph for the period involved).
``(ii) Overhead gme amount.--For purposes of this
subparagraph, the term `overhead GME amount' means, for a
hospital for a period, the product of--
[[Page H4543]]
``(I) the percentage of the hospital's approved FTE
resident amount for the base period that is not attributable
to resident salaries and fringe benefits, and
``(II) the hospital's approved FTE resident amount for the
period involved.
``(iii) Reference reduction amount.--
``(I) In general.--The reference reduction amount described
in this clause for a hospital for a cost reporting period is
the base difference (described in subclause (II)) updated, in
a compounded manner for each period from the base period to
the period involved, by the update applied for such period to
the hospital's approved FTE resident amount.
``(II) Base difference.--The base difference described in
this subclause for a hospital is the amount by which the
hospital's overhead GME amount in the base period exceeded
the 75th percentile of such amounts (as described in clause
(i)).
``(iv) Maximum reduction to 75th percentile.--In no case
shall the reduction under this subparagraph effected for a
hospital for a period (below the amount that would otherwise
apply for the period if this subparagraph did not apply for
any period) exceed the reference reduction amount for the
hospital for the period.
``(v) Base period.--For purposes of this subparagraph, the
term `base period' means the cost reporting period beginning
in fiscal year 1984 or the period used to establish the
hospital's approved FTE resident amount for hospitals that
did not have approved residency training programs in fiscal
year 1984.
``(vi) Rules for hospitals initiating residency training
programs.--The Secretary shall establish rules for the
application of this subparagraph in the case of a hospital
that initiates medical residency training programs during or
after the base period.''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply to per resident payment amounts attributable to
periods beginning on or after October 1, 1997.
SEC. 10733. PERMITTING PAYMENT TO NON-HOSPITAL PROVIDERS.
(a) In General.-- Section 1886 (42 U.S.C. 1395ww) is
amended by adding at the end the following:
``(k) Payment to Non-Hospital Providers.--
``(1) Report.--The Secretary shall submit to Congress, not
later than 18 months after the date of the enactment of this
subsection, a proposal for payment to qualified non-hospital
providers for their direct costs of medical education, if
those costs are incurred in the operation of an approved
medical residency training program described in subsection
(h). Such proposal shall specify the amounts, form, and
manner in which such payments will be made and the portion of
such payments that will be made from each of the trust funds
under this title.
``(2) Effectiveness.--Except as otherwise provided in law,
the Secretary may implement such proposal for residency years
beginning not earlier than 6 months after the date of
submittal of the report under paragraph (1).
``(3) Qualified non-hospital providers.--For purposes of
this subsection, the term `qualified non-hospital provider'
means--
``(A) a Federally qualified health center, as defined in
section 1861(aa)(4);
``(B) a rural health clinic, as defined in section
1861(aa)(2);
``(C) MedicarePlus organizations; and
``(D) such other providers (other than hospitals) as the
Secretary determines to be appropriate.''.
(b) Prohibition on Double Payments; Budget Neutrality
Adjustment.--Section 1886(h)(3)(B) (42 U.S.C.
1395ww(h)(3)(B)) is amended by adding at the end the
following:
``The Secretary shall reduce the aggregate approved amount to
the extent payment is made under subsection (k) for residents
included in the hospital's count of full-time equivalent
residents and, in the case of residents not included in any
such count, the Secretary shall provide for such a reduction
in aggregate approved amounts under this subsection as will
assure that the application of subsection (k) does not result
in any increase in expenditures under this title in excess of
those that would have occurred if subsection (k) were not
applicable.''.
SEC. 10734. INCENTIVE PAYMENTS UNDER PLANS FOR VOLUNTARY
REDUCTION IN NUMBER OF RESIDENTS.
(a) In General.--Section 1886(h) (42 U.S.C. 1395ww(h)) is
further amended by adding at the end the following new
paragraph:
``(6) Incentive payment under plans for voluntary reduction
in number of residents.--
``(A) In general.--In the case of a voluntary residency
reduction plan for which an application is approved under
subparagraph (B), the qualifying entity submitting the plan
shall be paid an applicable hold harmless percentage (as
specified in subparagraph (E)) of the sum of--
``(i) amount (if any) by which--
``(I) the amount of payment which would have been made
under this subsection if there had been a 5 percent reduction
in the number of full-time equivalent residents in the
approved medical education training programs of the
qualifying entity as of June 30, 1997, exceeds
``(II) the amount of payment which is made under this
subsection, taking into account the reduction in such number
effected under the reduction plan; and
``(ii) the amount of the reduction in payment under
1886(d)(5)(B) (for hospitals participating in the qualifying
entity) that is attributable to the reduction in number of
residents effected under the plan below 95 percent of the
number of full-time equivalent residents in such programs of
such entity as of June 30, 1997.
``(B) Approval of plan applications.--The Secretary may not
approve the application of an qualifying entity unless--
``(i) the application is submitted in a form and manner
specified by the Secretary and by not later than March 1,
2000,
``(ii) the application provides for the operation of a plan
for the reduction in the number of full-time equivalent
residents in the approved medical residency training programs
of the entity consistent with the requirements of
subparagraph (D);
``(iii) the entity elects in the application whether such
reduction will occur over--
``(I) a period of not longer than 5 residency training
years, or
``(II) a period of 6 residency training years,
except that a qualifying entity described in subparagraph
(C)(i)(III) may not make the election described in subclause
(II); and
``(iv) the Secretary determines that the application and
the entity and such plan meet such other requirements as the
Secretary specifies in regulations.
``(C) Qualifying entity.--
``(i) In general.--For purposes of this paragraph, any of
the following may be a qualifying entity:
``(I) Individual hospitals operating one or more approved
medical residency training programs.
``(II) Subject to clause (ii), two or more hospitals that
operate such programs and apply for treatment under this
paragraph as a single qualifying entity.
``(III) Subject to clause (iii), a qualifying consortium
(as described in section 10735 of the Balanced Budget Act of
1997).
``(ii) Additional requirement for joint programs.--In the
case of an application by a qualifying entity described in
clause (i)(II), the Secretary may not approve the application
unless the application represents that the qualifying entity
either--
``(I) in the case of an entity that meets the requirements
of clause (v) of subparagraph (D) will not reduce the number
of full-time equivalent residents in primary care during the
period of the plan, or
``(II) in the case of another entity will not reduce the
proportion of its residents in primary care (to the total
number of residents) below such proportion as in effect as of
the applicable time described in subparagraph (D)(vi).
``(iii) Additional requirement for consortia.--In the case
of an application by a qualifying entity described in clause
(i)(III), the Secretary may not approve the application
unless the application represents that the qualifying entity
will not reduce the proportion of its residents in primary
care (to the total number of residents) below such proportion
as in effect as of the applicable time described in
subparagraph (D)(vi).
``(D) Residency reduction requirements.--
``(i) Individual hospital applicants.--In the case of a
qualifying entity described in subparagraph (C)(i)(I), the
number of full-time equivalent residents in all the approved
medical residency training programs operated by or through
the entity shall be reduced as follows:
``(I) If base number of residents exceeds 750 residents, by
a number equal to at least 20 percent of such base number.
``(II) Subject to subclause (IV), if base number of
residents exceeds 500, but is less than 750, residents, by
150 residents.
``(III) Subject to subclause (IV), if base number of
residents does not exceed 500 residents, by a number equal to
at least 25 percent of such base number.
``(IV) In the case of a qualifying entity which is
described in clause (v) and which elects treatment under this
subclause, by a number equal to at least 20 percent of such
base number.
``(ii) Joint applicants.--In the case of a qualifying
entity described in subparagraph (C)(i)(II), the number of
full-time equivalent residents in all the approved medical
residency training programs operated by or through the entity
shall be reduced as follows:
``(I) Subject to subclause (II), by a number equal to at
least 25 percent of such base number.
``(II) In the case of a qualifying entity which is
described in clause (v) and which elects treatment under this
subclause, by a number equal to at least 20 percent of such
base number.
``(iii) Consortia.--In the case of a qualifying entity
described in subparagraph (C)(i)(III), the number of full-
time equivalent residents in all the approved medical
residency training programs operated by or through the entity
shall be reduced by a number equal to at least 20 percent of
such base number.
``(iv) Manner of reduction.--The reductions specified under
the preceding provisions of this subparagraph for a
qualifying entity shall be below the base number of residents
for that entity and shall be fully effective not later than--
``(I) the 5th residency training year in which the
application under subparagraph (B) is effective, in the case
of an entity making the election described in subparagraph
(B)(iii)(I), or
``(II) the 6th such residency training year, in the case of
an entity making the election described in subparagraph
(B)(iii)(II).
[[Page H4544]]
``(v) Entities providing assurance of maintenance of
primary care residents.--An entity is described in this
clause if--
``(I) the base number of residents for the entity is less
than 750;
``(II) the number of full-time equivalent residents in
primary care included in the base number of residents for the
entity is at least 10 percent of such base number; and
``(III) the entity represents in its application under
subparagraph (B) that there will be no reduction under the
plan in the number of full-time equivalent residents in
primary care.
If a qualifying entity fails to comply with the
representation described in subclause (III), the entity shall
be subject to repayment of all amounts paid under this
paragraph, in accordance with procedures established to carry
out subparagraph (F).
``(vi) Base number of residents defined.--For purposes of
this paragraph, the term `base number of residents' means,
with respect to a qualifying entity operating approved
medical residency training programs, the number of full-time
equivalent residents in such programs (before application of
weighting factors) of the entity as of the most recent cost
reporting period ending before June 30, 1997, or, if less,
for any subsequent cost reporting period that ends before the
date the entity makes application under this paragraph.
``(E) Applicable hold harmless percentage.--
``(i) In general.--For purposes of subparagraph (A), the
`applicable hold harmless percentage' is the percentages
specified in clause (ii) or clause (iii), as elected by the
qualifying entity in the application submitted under
subparagraph (B).
``(ii) 5-year reduction plan.--In the case of an entity
making the election described in subparagraph (B)(iii)(I),
the percentages specified in this clause are, for the--
``(I) first and second residency training years in which
the reduction plan is in effect, 100 percent,
``(II) third such year, 75 percent,
``(III) fourth such year, 50 percent, and
``(IV) fifth such year, 25 percent.
``(iii) 6-year reduction plan.--In the case of an entity
making the election described in subparagraph (B)(iii)(II),
the percentages specified in this clause are, for the--
``(I) first residency training year in which the reduction
plan is in effect, 100 percent,
``(II) second such year, 95 percent,
``(III) third such year, 85 percent,
``(IV) fourth such year, 70 percent,
``(V) fifth such year, 50 percent, and
``(VI) sixth such year, 25 percent.
``(F) Penalty for increase in number of residents in
subsequent years.--If payments are made under this paragraph
to a qualifying entity, if the entity (or any hospital
operating as part of the entity) increases the number of
full-time equivalent residents above the number of such
residents permitted under the reduction plan as of the
completion of the plan, then, as specified by the Secretary,
the entity is liable for repayment to the Secretary of the
total amounts paid under this paragraph to the entity.
``(G) Treatment of rotating residents.--In applying this
paragraph, the Secretary shall establish rules regarding the
counting of residents who are assigned to institutions the
medical residency training programs in which are not covered
under approved applications under this paragraph.''.
(b) Relation to Demonstration Projects and Authority.--
(1) Section 1886(h)(6) of the Social Security Act, added by
subsection (a), shall not apply to any residency training
program with respect to which a demonstration project
described in paragraph (3) has been approved by the Health
Care Financing Administration as of May 27, 1997. The
Secretary of Health and Human Services shall take such
actions as may be necessary to assure that (in the manner
described in subparagraph (A) of such section) in no case
shall payments be made under such a project with respect to
the first 5 percent reduction in the base number of full-time
equivalent residents otherwise used under the project.
(2) Effective May 27, 1997, the Secretary of Health and
Human Services is not authorized to approve any demonstration
project described in paragraph (3) for any residency training
year beginning before July 1, 2006.
(3) A demonstration project described in this paragraph is
a project that provides for additional payments under title
XVIII of the Social Security Act in connection with reduction
in the number of residents in a medical residency training
program.
(c) Interim, Final Regulations.--In order to carry out the
amendment made by subsection (a) in a timely manner, the
Secretary of Health and Human Services may first promulgate
regulations, that take effect on an interim basis, after
notice and pending opportunity for public comment, by not
later than 6 months after the date of the enactment of this
Act.
SEC. 10735. DEMONSTRATION PROJECT ON USE OF CONSORTIA.
(a) In General.--The Secretary of Health and Human Services
(in this section referred to as the Secretary) shall
establish a demonstration project under which, instead of
making payments to teaching hospitals pursuant to section
1886(h) of the Social Security Act, the Secretary shall make
payments under this section to each consortium that meets the
requirements of subsection (b).
(b) Qualifying Consortia.--For purposes of subsection (a),
a consortium meets the requirements of this subsection if the
consortium is in compliance with the following:
(1) The consortium consists of an approved medical
residency training program in a teaching hospital and one or
more of the following entities:
(A) A school of allopathic medicine or osteopathic
medicine.
(B) Another teaching hospital, which may be a children's
hospital.
(C) Another approved medical residency training program.
(D) A Federally qualified health center.
(E) A medical group practice.
(F) A managed care entity.
(G) An entity furnishing outpatient services.
(H) Such other entity as the Secretary determines to be
appropriate.
(2) The members of the consortium have agreed to
participate in the programs of graduate medical education
that are operated by the entities in the consortium.
(3) With respect to the receipt by the consortium of
payments made pursuant to this section, the members of the
consortium have agreed on a method for allocating the
payments among the members.
(4) The consortium meets such additional requirements as
the Secretary may establish.
(c) Amount and Source of Payment.--The total of payments to
a qualifying consortium for a fiscal year pursuant to
subsection (a) shall not exceed the amount that would have
been paid under section 1886(h) of the Social Security Act
for the teaching hospital (or hospitals) in the consortium.
Such payments shall be made in such proportion from each of
the trust funds established under title XVIII of such Act as
the Secretary specifies.
SEC. 10736. RECOMMENDATIONS ON LONG-TERM PAYMENT POLICIES
REGARDING FINANCING TEACHING HOSPITALS AND
GRADUATE MEDICAL EDUCATION.
(a) In General.--The Medicare Payment Advisory Commission
(established under section 1805 of the Social Security Act
and in this section referred to as the ``Commission'') shall
examine and develop recommendations on whether and to what
extent medicare payment policies and other Federal policies
regarding teaching hospitals and graduate medical education
should be reformed. Such recommendations shall include
recommendations regarding each of the following:
(1) The financing of graduate medical education, including
consideration of alternative broad-based sources of funding
for such education and models for the distribution of
payments under any all-payer financing mechanism.
(2) The financing of teaching hospitals, including
consideration of the difficulties encountered by such
hospitals as competition among health care entities
increases. Matters considered under this paragraph shall
include consideration of the effects on teaching hospitals of
the method of financing used for the MedicarePlus program
under part C of title XVIII of the Social Security Act.
(3) Possible methodologies for making payments for graduate
medical education and the selection of entities to receive
such payments. Matters considered under this paragraph shall
include--
(A) issues regarding children's hospitals and approved
medical residency training programs in pediatrics, and
(B) whether and to what extent payments are being made (or
should be made) for training in the various nonphysician
health professions.
(4) Federal policies regarding international medical
graduates.
(5) The dependence of schools of medicine on service-
generated income.
(6) Whether and to what extent the needs of the United
States regarding the supply of physicians, in the aggregate
and in different specialties, will change during the 10-year
period beginning on October 1, 1997, and whether and to what
extent any such changes will have significant financial
effects on teaching hospitals.
(7) Methods for promoting an appropriate number, mix, and
geographical distribution of health professionals.
(c) Consultation.--In conducting the study under subsection
(a), the Commission shall consult with the Council on
Graduate Medical Education and individuals with expertise in
the area of graduate medical education, including--
(1) deans from allopathic and osteopathic schools of
medicine;
(2) chief executive officers (or equivalent administrative
heads) from academic health centers, integrated health care
systems, approved medical residency training programs, and
teaching hospitals that sponsor approved medical residency
training programs;
(3) chairs of departments or divisions from allopathic and
osteopathic schools of medicine, schools of dentistry, and
approved medical residency training programs in oral surgery;
(4) individuals with leadership experience from
representative fields of non-physician health professionals;
(5) individuals with substantial experience in the study of
issues regarding the composition of the health care workforce
of the United States; and
(6) individuals with expertise on the financing of health
care.
(d) Report.--Not later than 2 years after the date of the
enactment of this Act, the
[[Page H4545]]
Commission shall submit to the Congress a report providing
its recommendations under this section and the reasons and
justifications for such recommendations.
SEC. 10737. MEDICARE SPECIAL REIMBURSEMENT RULE FOR CERTAIN
COMBINED RESIDENCY PROGRAMS.
(a) In General.--Section 1886(h)(5)(G) (42 U.S.C.
1395ww(h)(5)(G)) is amended--
(1) in clause (i), by striking ``and (iii)'' and inserting
``, (iii), and (iv)''; and
(2) by adding at the end the following:
``(iv) Special rule for certain combined residency
programs.--(I) In the case of a resident enrolled in a
combined medical residency training program in which all of
the individual programs (that are combined) are for training
a primary care resident (as defined in subparagraph (H)), the
period of board eligibility shall be the minimum number of
years of formal training required to satisfy the requirements
for initial board eligibility in the longest of the
individual programs plus one additional year.
``(II) A resident enrolled in a combined medical residency
training program that includes an obstetrics and gynecology
program shall qualify for the period of board eligibility
under subclause (I) if the other programs such resident
combines with such obstetrics and gynecology program are for
training a primary care resident.''.
(b) Effective Date.--The amendments made by subsection (a)
apply to combined medical residency programs for residency
years beginning on or after July 1, 1998.
CHAPTER 5--OTHER PROVISIONS
SEC. 10741. CENTERS OF EXCELLENCE.
(a) In General.--Title XVIII is amended by inserting after
section 1888 the following:
``centers of excellence
``Sec. 1889. (a) In General.--The Secretary shall use a
competitive process to contract with specific hospitals or
other entities for furnishing services related to surgical
procedures, and for furnishing services (unrelated to
surgical procedures) to hospital inpatients that the
Secretary determines to be appropriate. The services may
include any services covered under this title that the
Secretary determines to be appropriate, including post-
hospital services.
``(b) Quality Standards.--Only entities that meet quality
standards established by the Secretary shall be eligible to
contract under this section. Contracting entities shall
implement a quality improvement plan approved by the
Secretary.
``(c) Payment.--Payment under this section shall be made on
the basis of negotiated all-inclusive rates. The amount of
payment made by the Secretary to an entity under this title
for services covered under a contract shall be less than the
aggregate amount of the payments that the Secretary would
have otherwise made for the services.
``(d) Contract Period.--A contract period shall be 3 years
(subject to renewal), so long as the entity continues to meet
quality and other contractual standards.
``(e) Incentives for Use of Centers.--Entities under a
contract under this section may furnish additional services
(at no cost to an individual entitled to benefits under this
title) or waive cost-sharing, subject to the approval of the
Secretary.
``(f) Limit on Number of Centers.--The Secretary shall
limit the number of centers in a geographic area to the
number needed to meet projected demand for contracted
services.''.
(b) Effective Date.--The amendment made by subsection (a)
applies to services furnished on or after October 1, 1997.
SEC. 10742. MEDICARE PART B SPECIAL ENROLLMENT PERIOD AND
WAIVER OF PART B LATE ENROLLMENT PENALTY AND
MEDIGAP SPECIAL OPEN ENROLLMENT PERIOD FOR
CERTAIN MILITARY RETIREES AND DEPENDENTS.
(a) Medicare Part B Special Enrollment Period; Waiver of
Part B Penalty for Late Enrollment.--
(1) In general.--In the case of any eligible individual (as
defined in subsection (c)), the Secretary of Health and Human
Services shall provide for a special enrollment period during
which the individual may enroll under part B of title XVIII
of the Social Security Act. Such period shall be for a period
of 6 months and shall begin with the first month that begins
at least 45 days after the date of the enactment of this Act.
(2) Coverage period.--In the case of an eligible individual
who enrolls during the special enrollment period provided
under paragraph (1), the coverage period under part B of
title XVIII of the Social Security Act shall begin on the
first day of the month following the month in which the
individual enrolls.
(3) Waiver of part b late enrollment penalty.--In the case
of an eligible individual who enrolls during the special
enrollment period provided under paragraph (1), there shall
be no increase pursuant to section 1839(b) of the Social
Security Act in the monthly premium under part B of title
XVIII of such Act.
(b) Medigap Special Open Enrollment Period.--
Notwithstanding any other provision of law, an issuer of a
medicare supplemental policy (as defined in section 1882(g)
of the Social Security Act)--
(1) may not deny or condition the issuance or effectiveness
of a medicare supplemental policy that has a benefit package
classified as ``A'', ``B'', ``C'', or ``F'' under the
standards established under section 1882(p)(2) of the Social
Security Act (42 U.S.C. 1395rr(p)(2)); and
(2) may not discriminate in the pricing of the policy on
the basis of the individual's health status, medical
condition (including both physical and mental illnesses),
claims experience, receipt of health care, medical history,
genetic information, evidence of insurability (including
conditions arising out of acts of domestic violence), or
disability;
in the case of an eligible individual who seeks to enroll
(and is enrolled) during the 6-month period described in
subsection (a)(1).
(c) Eligible Individual Defined.--In this section, the term
``eligible individual'' means an individual--
(1) who, as of the date of the enactment of this Act, has
attained 65 years of age and was eligible to enroll under
part B of title XVIII of the Social Security Act, and
(2) who at the time the individual first satisfied
paragraph (1) or (2) of section 1836 of the Social Security
Act--
(A) was a covered beneficiary (as defined in section
1072(5) of title 10, United States Code), and
(B) did not elect to enroll (or to be deemed enrolled)
under section 1837 of the Social Security Act during the
individual's initial enrollment period.
The Secretary of Health and Human Services shall consult with
the Secretary of Defense in the identification of eligible
individuals.
SEC. 10743. PROTECTIONS UNDER THE MEDICARE PROGRAM FOR
DISABLED WORKERS WHO LOSE BENEFITS UNDER A
GROUP HEALTH PLAN.
(a) No Premium Penalty for Late Enrollment.--The second
sentence of section 1839(b) (42 U.S.C. 1395r(b)) is amended
by inserting ``and not pursuant to a special enrollment
period under section 1837(i)(4)'' after ``section 1837)''.
(b) Special Medicare Enrollment Period.--
(1) In general.--Section 1837(i) (42 U.S.C. 1395p(i)) is
amended by adding at the end the following new paragraph:
``(4)(A) In the case of an individual who is entitled to
benefits under part A pursuant to section 226(b) and--
``(i) who at the time the individual first satisfies
paragraph (1) or (2) of section 1836--
``(I) is enrolled in a group health plan described in
section 1862(b)(1)(A)(v) by reason of the individual's (or
the individual's spouse's) current employment or otherwise,
and
``(II) has elected not to enroll (or to be deemed enrolled)
under this section during the individual's initial enrollment
period; and
``(ii) whose continuous enrollment under such group health
plan is involuntarily terminated at a time when the
enrollment under the plan is not by reason of the
individual's (or the individual's spouse's) current
employment,
there shall be a special enrollment period described in
subparagraph (B).
``(B) The special enrollment period referred to in
subparagraph (A) is the 6-month period beginning on the date
of the enrollment termination described in subparagraph
(A)(ii).''.
(2) Coverage period.--Section 1838(e) (42 U.S.C. 1395q(e))
is amended--
(A) by inserting ``or 1837(i)(4)(B)'' after ``1837(i)(3)''
the first place it appears, and
(B) by inserting ``or specified in section
1837(i)(4)(A)(i)'' after ``1837(i)(3)'' the second place it
appears''.
(c) Effective Date.--The amendments made by this section
shall apply to involuntary terminations of coverage under a
group health plan occurring on or after the date of the
enactment of this Act.
SEC. 10744. PLACEMENT OF ADVANCE DIRECTIVE IN MEDICAL RECORD.
(a) In General.--Section 1866(f)(1)(B) (42 U.S.C.
1395cc(f)(1)(B)) is amended by striking ``in the individual's
medical record'' and inserting ``in a prominent part of the
individual's current medical record''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to provider agreements entered into, renewed, or
extended on or after such date (not later than 1 year after
the date of the enactment of this Act) as the Secretary of
Health and Human Services specifies.
Subtitle I--Medical Liability Reform
CHAPTER 1--GENERAL PROVISIONS
SEC. 10801. FEDERAL REFORM OF HEALTH CARE LIABILITY ACTIONS.
(a) Applicability.--This subtitle shall apply with respect
to any health care liability action brought in any State or
Federal court, except that this subtitle shall not apply to--
(1) an action for damages arising from a vaccine-related
injury or death to the extent that title XXI of the Public
Health Service Act applies to the action, or
(2) an action under the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1001 et seq.).
(b) Preemption.--This subtitle shall preempt any State law
to the extent such law is inconsistent with the limitations
contained in this subtitle. This subtitle shall not preempt
any State law that provides for defenses or places
limitations on a person's liability in addition to those
contained in this subtitle or otherwise imposes greater
restrictions than those provided in this subtitle.
(c) Effect on Sovereign Immunity and Choice of Law or
Venue.--Nothing in subsection (b) shall be construed to--
(1) waive or affect any defense of sovereign immunity
asserted by any State under any provision of law;
(2) waive or affect any defense of sovereign immunity
asserted by the United States;
[[Page H4546]]
(3) affect the applicability of any provision of the
Foreign Sovereign Immunities Act of 1976;
(4) preempt State choice-of-law rules with respect to
claims brought by a foreign nation or a citizen of a foreign
nation; or
(5) affect the right of any court to transfer venue or to
apply the law of a foreign nation or to dismiss a claim of a
foreign nation or of a citizen of a foreign nation on the
ground of inconvenient forum.
(d) Amount in Controversy.--In an action to which this
subtitle applies and which is brought under section 1332 of
title 28, United States Code, the amount of noneconomic
damages or punitive damages, and attorneys' fees or costs,
shall not be included in determining whether the matter in
controversy exceeds the sum or value of $50,000.
(e) Federal Court Jurisdiction Not Established on Federal
Question Grounds.--Nothing in this subtitle shall be
construed to establish any jurisdiction in the district
courts of the United States over health care liability
actions on the basis of section 1331 or 1337 of title 28,
United States Code.
SEC. 10802. DEFINITIONS.
As used in this subtitle:
(1) Actual damages.--The term ``actual damages'' means
damages awarded to pay for economic loss.
(2) Alternative dispute resolution system; adr.--The term
``alternative dispute resolution system'' or ``ADR'' means a
system established under Federal or State law that provides
for the resolution of health care liability claims in a
manner other than through health care liability actions.
(3) Claimant.--The term ``claimant'' means any person who
brings a health care liability action and any person on whose
behalf such an action is brought. If such action is brought
through or on behalf of an estate, the term includes the
claimant's decedent. If such action is brought through or on
behalf of a minor or incompetent, the term includes the
claimant's legal guardian.
(4) Clear and convincing evidence.--The term ``clear and
convincing evidence'' is that measure or degree of proof that
will produce in the mind of the trier of fact a firm belief
or conviction as to the truth of the allegations sought to be
established. Such measure or degree of proof is more than
that required under preponderance of the evidence but less
than that required for proof beyond a reasonable doubt.
(5) Collateral source payments.--The term ``collateral
source payments'' means any amount paid or reasonably likely
to be paid in the future to or on behalf of a claimant, or
any service, product, or other benefit provided or reasonably
likely to be provided in the future to or on behalf of a
claimant, as a result of an injury or wrongful death,
pursuant to--
(A) any State or Federal health, sickness, income-
disability, accident or workers' compensation Act;
(B) any health, sickness, income-disability, or accident
insurance that provides health benefits or income-disability
coverage;
(C) any contract or agreement of any group, organization,
partnership, or corporation to provide, pay for, or reimburse
the cost of medical, hospital, dental, or income disability
benefits; and
(D) any other publicly or privately funded program.
(6) Drug.--The term ``drug'' has the meaning given such
term in section 201(g)(1) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 321(g)(1)).
(7) Economic loss.--The term ``economic loss'' means any
pecuniary loss resulting from injury (including the loss of
earnings or other benefits related to employment, medical
expense loss, replacement services loss, loss due to death,
burial costs, and loss of business or employment
opportunities), to the extent recovery for such loss is
allowed under applicable State law.
(8) Harm.--The term ``harm'' means any legally cognizable
wrong or injury for which punitive damages may be imposed.
(9) Health benefit plan.--The term ``health benefit plan''
means--
(A) a hospital or medical expense incurred policy or
certificate,
(B) a hospital or medical service plan contract,
(C) a health maintenance subscriber contract, or
(D) a MedicarePlus product (offered under part C of title
XVIII of the Social Security Act),
that provides benefits with respect to health care services.
(10) Health care liability action.--The term ``health care
liability action'' means a civil action brought in a State or
Federal court against a health care provider, an entity which
is obligated to provide or pay for health benefits under any
health benefit plan (including any person or entity acting
under a contract or arrangement to provide or administer any
health benefit), or the manufacturer, distributor, supplier,
marketer, promoter, or seller of a medical product, in which
the claimant alleges a claim (including third party claims,
cross claims, counter claims, or distribution claims) based
upon the provision of (or the failure to provide or pay for)
health care services or the use of a medical product,
regardless of the theory of liability on which the claim is
based or the number of plaintiffs, defendants, or causes of
action.
(11) Health care liability claim.--The term ``health care
liability claim'' means a claim in which the claimant alleges
that injury was caused by the provision of (or the failure to
provide) health care services.
(12) Health care provider.--The term ``health care
provider'' means any person that is engaged in the delivery
of health care services in a State and that is required by
the laws or regulations of the State to be licensed or
certified by the State to engage in the delivery of such
services in the State.
(13) Health care service.--The term ``health care service''
means any service for which payment may be made under a
health benefit plan including services related to the
delivery or administration of such service.
(14) Medical device.--The term ``medical device'' has the
meaning given such term in section 201(h) of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 321(h)).
(15) Noneconomic damages.--The term ``noneconomic damages''
means damages paid to an individual for pain and suffering,
inconvenience, emotional distress, mental anguish, loss of
consortium, injury to reputation, humiliation, and other
nonpecuniary losses.
(16) Person.--The term ``person'' means any individual,
corporation, company, association, firm, partnership,
society, joint stock company, or any other entity, including
any governmental entity.
(17) Product seller.--
(A) In general.--Subject to subparagraph (B), the term
``product seller'' means a person who, in the course of a
business conducted for that purpose--
(i) sells, distributes, rents, leases, prepares, blends,
packages, labels, or is otherwise involved in placing, a
product in the stream of commerce, or
(ii) installs, repairs, or maintains the harm-causing
aspect of a product.
(B) Exclusion.--Such term does not include--
(i) a seller or lessor of real property;
(ii) a provider of professional services in any case in
which the sale or use of a product is incidental to the
transaction and the essence of the transaction is the
furnishing of judgment, skill, or services; or
(iii) any person who--
(I) acts in only a financial capacity with respect to the
sale of a product; or
(II) leases a product under a lease arrangement in which
the selection, possession, maintenance, and operation of the
product are controlled by a person other than the lessor.
(18) Punitive damages.--The term ``punitive damages'' means
damages awarded against any person not to compensate for
actual injury suffered, but to punish or deter such person or
others from engaging in similar behavior in the future.
(19) State.--The term ``State'' means each of the several
States, the District of Columbia, Puerto Rico, the Virgin
Islands, Guam, American Samoa, the Northern Mariana Islands,
and any other territory or possession of the United States.
SEC. 10803. EFFECTIVE DATE.
This subtitle will apply to any health care liability
action brought in a Federal or State court and to any health
care liability claim subject to an alternative dispute
resolution system, that is initiated on or after the date of
enactment of this subtitle, except that any health care
liability claim or action arising from an injury occurring
prior to the date of enactment of this subtitle shall be
governed by the applicable statute of limitations provisions
in effect at the time the injury occurred.
CHAPTER 2--UNIFORM STANDARDS FOR HEALTH CARE LIABILITY ACTIONS
SEC. 10811. STATUTE OF LIMITATIONS.
A health care liability action may not be brought after the
expiration of the 2-year period that begins on the date on
which the alleged injury that is the subject of the action
was discovered or should reasonably have been discovered, but
in no case after the expiration of the 5-year period that
begins on the date the alleged injury occurred.
SEC. 10812. CALCULATION AND PAYMENT OF DAMAGES.
(a) Treatment of Noneconomic Damages.--
(1) Limitation on noneconomic damages.--The total amount of
noneconomic damages that may be awarded to a claimant for
losses resulting from the injury which is the subject of a
health care liability action may not exceed $250,000,
regardless of the number of parties against whom the action
is brought or the number of actions brought with respect to
the injury.
(2) Joint and several liability.--In any health care
liability action brought in State or Federal court, a
defendant shall be liable only for the amount of noneconomic
damages attributable to such defendant in direct proportion
to such defendant's share of fault or responsibility for the
claimant's actual damages, as determined by the trier of
fact. In all such cases, the liability of a defendant for
noneconomic damages shall be several and not joint.
(b) Treatment of Punitive Damages.--
(1) General rule.--Punitive damages may, to the extent
permitted by applicable State law, be awarded in any health
care liability action for harm in any Federal or State court
against a defendant if the claimant establishes by clear and
convincing evidence that the harm suffered was the result of
conduct--
(A) specifically intended to cause harm, or
(B) conduct manifesting a conscious, flagrant indifference
to the rights or safety of others.
(2) Proportional awards.--The amount of punitive damages
that may be awarded in
[[Page H4547]]
any health care liability action subject to this subtitle
shall not exceed 3 times the amount of damages awarded to the
claimant for economic loss, or $250,000, whichever is
greater. This paragraph shall be applied by the court and
shall not be disclosed to the jury.
(3) Applicability.--This subsection shall apply to any
health care liability action brought in any Federal or State
court on any theory where punitive damages are sought. This
subsection does not create a cause of action for punitive
damages. This subsection does not preempt or supersede any
State or Federal law to the extent that such law would
further limit the award of punitive damages.
(4) Bifurcation.--At the request of any party, the trier of
fact shall consider in a separate proceeding whether punitive
damages are to be awarded and the amount of such award. If a
separate proceeding is requested, evidence relevant only to
the claim of punitive damages, as determined by applicable
State law, shall be inadmissible in any proceeding to
determine whether actual damages are to be awarded.
(5) Drugs and devices.--
(A) In general.--(i) Punitive damages shall not be awarded
against a manufacturer or product seller of a drug or medical
device which caused the claimant's harm where--
(I) such drug or device was subject to premarket approval
by the Food and Drug Administration with respect to the
safety of the formulation or performance of the aspect of
such drug or device which caused the claimant's harm, or the
adequacy of the packaging or labeling of such drug or device
which caused the harm, and such drug, device, packaging, or
labeling was approved by the Food and Drug Administration; or
(II) the drug is generally recognized as safe and effective
pursuant to conditions established by the Food and Drug
Administration and applicable regulations, including
packaging and labeling regulations.
(ii) Clause (i) shall not apply in any case in which the
defendant, before or after premarket approval of a drug or
device--
(I) intentionally and wrongfully withheld from or
misrepresented to the Food and Drug Administration
information concerning such drug or device required to be
submitted under the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 301 et seq.) or section 351 of the Public Health
Service Act (42 U.S.C. 262) that is material and relevant to
the harm suffered by the claimant, or
(II) made an illegal payment to an official or employee of
the Food and Drug Administration for the purpose of securing
or maintaining approval of such drug or device.
(B) Packaging.--In a health care liability action for harm
which is alleged to relate to the adequacy of the packaging
or labeling of a drug which is required to have tamper-
resistant packaging under regulations of the Secretary of
Health and Human Services (including labeling regulations
related to such packaging), the manufacturer or product
seller of the drug shall not be held liable for punitive
damages unless such packaging or labeling is found by the
court by clear and convincing evidence to be substantially
out of compliance with such regulations.
(c) Periodic Payments for Future Losses.--
(1) General rule.--In any health care liability action in
which the damages awarded for future economic and noneconomic
loss exceeds $50,000, a person shall not be required to pay
such damages in a single, lump-sum payment, but shall be
permitted to make such payments periodically based on when
the damages are found likely to occur, as such payments are
determined by the court.
(2) Finality of judgment.--The judgment of the court
awarding periodic payments under this subsection may not, in
the absence of fraud, be reopened at any time to contest,
amend, or modify the schedule or amount of the payments.
(3) Lump-sum settlements.--This subsection shall not be
construed to preclude a settlement providing for a single,
lump-sum payment.
(d) Treatment of Collateral Source Payments.--
(1) Introduction into evidence.--In any health care
liability action, any defendant may introduce evidence of
collateral source payments. If any defendant elects to
introduce such evidence, the claimant may introduce evidence
of any amount paid or contributed or reasonably likely to be
paid or contributed in the future by or on behalf of the
claimant to secure the right to such collateral source
payments.
(2) No subrogation.--No provider of collateral source
payments shall recover any amount against the claimant or
receive any lien or credit against the claimant's recovery or
be equitably or legally subrogated the right of the claimant
in a health care liability action.
(3) Application to settlements.--This subsection shall
apply to an action that is settled as well as an action that
is resolved by a fact finder.
SEC. 10813. ALTERNATIVE DISPUTE RESOLUTION.
Any ADR used to resolve a health care liability action or
claim shall contain provisions relating to statute of
limitations, non-economic damages, joint and several
liability, punitive damages, collateral source rule, and
periodic payments which are identical to the provisions
relating to such matters in this subtitle.
TITLE XI--BUDGET ENFORCEMENT
SEC. 11001. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Budget
Enforcement Act of 1997''.
(b) Table of Contents.--
TITLE XI--BUDGET ENFORCEMENT
Sec. 11001. Short title; table of contents.
Subtitle A--Amendments to the Congressional Budget and Impoundment
Control Act of 1974
Sec. 11101. Amendments to section 3.
Sec. 11102. Amendments to section 201.
Sec. 11103. Amendments to section 202.
Sec. 11104. Amendment to section 300.
Sec. 11105. Amendments to section 301.
Sec. 11106. Amendments to section 302.
Sec. 11107. Amendments to section 303.
Sec. 11108. Amendment to section 305.
Sec. 11109. Amendments to section 308.
Sec. 11110. Amendments to section 310.
Sec. 11111. Amendments to section 311.
Sec. 11112. Amendment to section 312.
Sec. 11113. Adjustments and Budget Committee determinations.
Sec. 11114. Effect of self-executing amendments on points of order in
the House of Representatives.
Sec. 11115. Amendment of section 401 and repeal of section 402.
Sec. 11116. Repeal of title VI.
Sec. 11117. Amendments to section 904.
Sec. 11118. Repeal of sections 905 and 906.
Sec. 11119. Amendments to sections 1022 and 1024.
Sec. 11120. Amendment to section 1026.
Subtitle B--Amendments to the Balanced Budget and Emergency Deficit
Control Act of 1985
Sec. 11201. Purpose.
Sec. 11202. General statement and definitions.
Sec. 11203. Enforcing discretionary spending limits.
Sec. 11204. Violent crime reduction trust fund.
Sec. 11205. Enforcing pay-as-you-go.
Sec. 11206. Reports and orders.
Sec. 11207. Exempt programs and activities.
Sec. 11208. General and special sequestration rules.
Sec. 11209. The baseline.
Sec. 11210. Technical correction.
Sec. 11211. Judicial review.
Sec. 11212. Effective date.
Sec. 11213. Reduction of preexisting balances and exclusion of effects
of this Act from paygo scorecard.
Subtitle A--Amendments to the Congressional Budget and Impoundment
Control Act of 1974
SEC. 11101. AMENDMENTS TO SECTION 3.
Section 3 of the Congressional Budget and Impoundment
Control Act of 1974 (2 U.S.C. 622) is amended--
(1) in paragraph (2)(A), by striking ``and'' at the end of
clause (iii), by striking the period and inserting ``; and''
at the end of clause (iv), and by adding at the end the
following:
``(v) entitlement authority and the food stamp program.'';
and
(2) in paragraph (9), by inserting ``, but such term does
not include salary or basic pay funded through an
appropriation Act'' before the period.
SEC. 11102. AMENDMENTS TO SECTION 201.
(a) Term of Office.--The first sentence of section
201(a)(3) of the Congressional Budget Act of 1974 is amended
to read as follows: ``The term of office of the Director
shall be four years and shall expire on January 3 of the year
preceding a Presidential election.''.
(b) Redesignation of Executed Provision.--Section 201 of
the Congressional Budget Act of 1974 is amended by
redesignating subsection (g) (relating to revenue estimates)
as subsection (f).
SEC. 11103. AMENDMENTS TO SECTION 202.
(a) Assistance to Budget Committees.--The first sentence of
section 202(a) of the Congressional Budget Act of 1974 is
amended by inserting ``primary'' before ``duty''.
(b) Elimination of Executed Provision.--Section 202 of the
Congressional Budget Act of 1974 is amended by striking
subsection (e) and by redesignating subsections (f), (g), and
(h) as subsections (e), (f), and (g), respectively.
SEC. 11104. AMENDMENT TO SECTION 300.
The item relating to February 25 in the timetable set forth
in section 300 of the Congressional Budget Act of 1974 is
amended by striking ``February 25'' and inserting ``Within 6
weeks after President submits budget''.
SEC. 11105. AMENDMENTS TO SECTION 301.
(a) Terms of Budget Resolutions.--Section 301(a) of the
Congressional Budget Act of 1974 is amended by striking ``,
and planning levels for each of the two ensuing fiscal
years,'' and inserting ``and for at least each of the 4
ensuing fiscal years''.
(b) Contents of Budget Resolutions.--Paragraphs (1) and (4)
of section 301(a) of the Congressional Budget Act of 1974 are
amended by striking ``, budget outlays, direct loan
obligations, and primary loan guarantee commitments'' each
place it appears and inserting ``and budget outlays''.
(c) Additional Matters.--Section 301(b) of the
Congressional Budget Act of 1974 is amended by amending
paragraph (7) to read as follows--
``(7) set forth pay-as-you-go procedures in the Senate
whereby committee allocations, aggregates, and other levels
can be revised for legislation within a committee's
jurisdiction if such legislation would not increase the
deficit for the first year covered by the resolution and will
not increase the deficit
[[Page H4548]]
for the period of 5 fiscal years covered by the
resolution;''.
(d) Views and Estimates.--The first sentence of section
301(d) of the Congressional Budget Act of 1974 is amended by
inserting ``or at such time as may be requested by the
Committee on the Budget,'' after ``Code,''.
(e) Hearings and Report.--Section 301(e)(2) of the
Congressional Budget Act of 1974 is amended by striking
``total direct loan obligations, total primary loan guarantee
commitments,''.
(f) Social Security Corrections.--Section 301(i) of the
Congressional Budget Act of 1974 is amended by--
(1) inserting ``Social security point of order.--'' after
``(i)''; and
(2) striking ``as reported to the Senate'' and inserting
``(or amendment, motion, or conference report on such a
resolution)''.
SEC. 11106. AMENDMENTS TO SECTION 302.
(a) Allocations and Suballocations.--Subsections (a) and
(b) of section 302 of the Congressional Budget Act of 1974
are amended to read as follows:
``(a) Committee Spending Allocations.--
``(1) Allocation among committees.--The joint explanatory
statement accompanying a conference report on a budget
resolution shall include allocations, consistent with the
resolution recommended in the conference report, of the
appropriate levels (for each fiscal year covered by that
resolution and a total for all such years, except in the case
of the Committee on Appropriations only for the first such
fiscal year) of--
``(A) total new budget authority;
``(B) total outlays; and
``(C) in the Senate, social security outlays;
among each committee of the House of Representatives or the
Senate that has jurisdiction over legislation providing or
creating such amounts.
``(2) No double counting.--In the House of Representatives,
any item allocated to one committee may not be allocated to
another such committee.
``(3) Further division of amounts.--In the House of
Representatives, the amounts allocated to each committee for
each fiscal year, other than the Committee on Appropriations,
shall be further divided between amounts provided or required
by law on the date of filing of that conference report and
amounts not so provided or required. The amounts allocated to
the Committee on Appropriations for each fiscal year shall be
further divided between discretionary and mandatory amounts
or programs, as appropriate.
``(4) Amounts not allocated.--(A) In the House of
Representatives, if a committee receives no allocation of new
budget authority or outlays, that committee shall be deemed
to have received an allocation equal to zero for new budget
authority or outlays.
``(B) In the Senate, if a committee receives no allocation
of new budget authority, outlays, or social security outlays,
that committee shall be deemed to have received an allocation
equal to zero for new budget authority, outlays, or social
security outlays.
``(5) Social security levels in the Senate.--
``(A) In general.--For purposes of paragraph (1)(C), social
security surpluses equal the excess of social security
revenues over social security outlays in a fiscal year or
years with such an excess and social security deficits equal
the excess of social security outlays over social security
revenues in a fiscal year or years with such an excess.
``(B) Tax treatment.--For purposes of paragraph (1)(C), no
provision of any legislation involving a change in chapter 1
of the Internal Revenue Code of 1986 shall be treated as
affecting the amount of social security revenues or outlays
unless such provision changes the income tax treatment of
social security benefits.
``(6) Adjusting Allocation of Discretionary Spending in the
House of Representatives.--(A) If a concurrent resolution on
the budget is not adopted by April 15, the chairman of the
Committee on the Budget of the House of Representatives shall
submit to the House, as soon as practicable, an allocation
under paragraph (1) to the Committee on Appropriations
consistent with the discretionary spending limits contained
in the most recently agreed to concurrent resolution on the
budget for the second fiscal year covered by that resolution.
``(B) As soon as practicable after an allocation under
paragraph (1) is submitted under this section, the Committee
on Appropriations shall make suballocations and promptly
report those suballocations to the House of Representatives.
``(b) Suballocations by Appropriation Committees.--As soon
as practicable after a concurrent resolution on the budget is
agreed to, the Committee on Appropriations of each House
(after consulting with the Committee on Appropriations of the
other House) shall suballocate each amount allocated to it
for the budget year under subsection (a) among its
subcommittees. Each Committee on Appropriations shall
promptly report to its House suballocations made or revised
under this paragraph.''.
(b) Point of Order.--Section 302(c) of the Congressional
Budget Act of 1974 is amended to read as follows:
``(c) Point of Order.--After the Committee on
Appropriations has received an allocation pursuant to
subsection (a) for a fiscal year, it shall not be in order in
the House of Representatives or the Senate to consider any
bill, joint resolution, amendment, motion, or conference
report providing new budget authority for that fiscal year
within the jurisdiction of that committee, until such
committee makes the suballocations required by subsection
(b).''.
(c) Enforcement of Point of Order.--(1) Section 302(f)(1)
of the Congressional Budget Act of 1974 is amended by--
(A) striking ``providing new budget authority for such
fiscal year or new entitlement authority effective during
such fiscal year'' and inserting ``providing new budget
authority for any fiscal year covered by the concurrent
resolution'';
(B) striking ``appropriate allocation made pursuant to
subsection (b) for such fiscal year'' and inserting
``appropriate allocation made under subsection (a) or any
suballocation made under subsection (b), as applicable, for
the fiscal year of the concurrent resolution or for the total
of all fiscal years covered by the concurrent resolution'';
and
(C) striking ``of new discretionary budget authority or new
entitlement authority to be exceeded'' and inserting ``of new
discretionary budget authority to be exceeded''.
(2) Section 302(f)(2) of the Congressional Budget Act of
1974 is amended to read as follows:
``(2) Enforcement of committee allocations and
suballocations in the Senate.--After a concurrent resolution
on the budget is agreed to, it shall not be in order in the
Senate to consider any bill, joint resolution, amendment,
motion, or conference report that would cause--
``(A) in the case of any committee except the Committee on
Appropriations, the appropriate allocation of new budget
authority or outlays under subsection (a) to be exceeded; or
``(B) in the case of the Committee on Appropriations, the
appropriate suballocation of new budget authority or outlays
under subsection (b) to be exceeded.''.
(d) Separate Allocations.--Section 302(g) of the
Congressional Budget Act of 1974 is amended to read as
follows:
``(g) Separate Allocations.--The Committees on
Appropriations and the Budget shall make separate allocations
and suballocations under this section consistent with the
categories in section 251(c) of the Balanced Budget and
Emergency Deficit Control Act of 1985.''
SEC. 11107. AMENDMENTS TO SECTION 303.
(a) In General.--Section 303 of the Congressional Budget
Act of 1974 is amended to read as follows:
``concurrent resolution on the budget must be adopted before
legislation providing new budget authority, new spending authority, or
changes in revenues or the public debt limit is considered
``Sec. 303. (a) In General.--It shall not be in order in
either the House of Representatives or the Senate to consider
any bill, joint resolution, amendment, motion, or conference
report as reported to the House or Senate which provides--
``(1) new budget authority for a fiscal year;
``(2) an increase or decrease in revenues to become
effective during a fiscal year;
``(3) an increase or decrease in the public debt limit to
become effective during a fiscal year;
``(4) in the Senate only, new spending authority (as
defined in section 401(c)(2)) for a fiscal year; or
``(5) in the Senate only, outlays,
until the concurrent resolution on the budget for such fiscal
year (or, in the Senate, a concurrent resolution on the
budget covering such fiscal year) has been agreed to pursuant
to section 301.
``(b) Exceptions.--(1) In the House of Representatives,
subsection (a) does not apply to any bill or resolution--
``(A) providing advance discretionary new budget authority
which first becomes available in a fiscal year following the
fiscal year to which the concurrent resolution applies; or
``(B) increasing or decreasing revenues which first become
effective in a fiscal year following the fiscal year to which
the concurrent resolution applies.
After May 15 of any calendar year, subsection (a) does not
apply in the House of Representatives to any general
appropriation bill, or amendment thereto, which provides new
budget authority for the fiscal year beginning in such
calendar year.
``(2) In the Senate, subsection (a) does not apply to any
bill or resolution making advance appropriations for the
fiscal year to which the concurrent resolution applies and
the two succeeding fiscal years.
(b) Conforming Amendment.--The item relating to section 303
in the table of contents set forth in section 1(b) of the
Congressional Budget and Impoundment Control Act of 1974 is
amended by striking ``new credit authority,''.
SEC. 11108. AMENDMENT TO SECTION 305.
Section 305(a)(1) of the Congressional Budget Act of 1974
is amended by inserting ``when the House is not in session''
after ``holidays'' each place it appears.
SEC. 11109. AMENDMENTS TO SECTION 308.
Section 308 of the Congressional Budget Act of 1974 is
amended--
(1)(A) in the side heading of subsection (a), by striking
``OR NEW CREDIT AUTHORITY,'' and by striking the first comma
and inserting ``OR'';
(B) in paragraphs (1) and (2) of subsection (a), by
striking ``or new credit authority,'' each place it appears
and by striking the comma before ``new spending authority''
each place it appears and inserting ``or'';
[[Page H4549]]
(2) in subsection (b)(1), by striking ``or new credit
authority,'' and by striking the comma before ``new spending
authority'' and inserting ``or'';
(3) in subsection (c), by inserting ``and'' after the
semicolon at the end of paragraph (3), by striking ``; and''
at the end of paragraph (4) and inserting a period; and by
striking paragraph (5); and
(4) by inserting ``joint'' before ``resolution'' each place
it appears and, in subsection (b)(1), by inserting ``joint''
before ``resolutions''.
SEC. 11110. AMENDMENTS TO SECTION 310.
Section 310 of the Congressional Budget Act of 1974 is
amended by--
(1) in subsection (a)(1), by inserting ``and'' after the
semicolon at the end of subparagraph (B), by striking
``subparagraphs (C) and (D), and by inserting after
subparagraph (B) the following new subparagraph:
``(C) direct spending (as defined in section 250(c)(8) of
the Balanced Budget and Emergency Deficit Control Act of
1985),''; and
(2) in subsection (c)(1)(A), by inserting ``of the absolute
value'' after ``20 percent'' each place it appears.
SEC. 11111. AMENDMENTS TO SECTION 311.
Section 311 of the Congressional Budget Act of 1974 is
amended to read as follows:
``NEW BUDGET AUTHORITY, NEW SPENDING AUTHORITY, AND REVENUE LEGISLATION
MUST BE WITHIN APPROPRIATE LEVELS
``Sec. 311. (a) Enforcement of Budget Aggregates.--
``(1) In the house of representatives.--Except as provided
by subsection (c), after the Congress has completed action on
a concurrent resolution on the budget for a fiscal year, it
shall not be in order in the House of Representatives to
consider any bill, joint resolution, amendment, motion, or
conference report providing new budget authority for such
fiscal year or reducing revenues for such fiscal year, if--
``(A) the enactment of such bill or resolution as reported;
``(B) the adoption and enactment of such amendment; or
``(C) the enactment of such bill or resolution in the form
recommended in such conference report;
would cause the appropriate level of total new budget
authority or total budget outlays set forth in the most
recently agreed to concurrent resolution on the budget for
such fiscal year to be exceeded, or would cause revenues to
be less than the appropriate level of total revenues set
forth in such concurrent resolution such fiscal year or for
the total of all fiscal years covered by the concurrent
resolution, except in the case that a declaration of war by
the Congress is in effect.
``(2) In the senate.--After a concurrent resolution on the
budget is agreed to, it shall not be in order in the Senate
to consider any bill, resolution, amendment, motion, or
conference report that--
``(A) would cause the appropriate level of total new budget
authority or total outlays set forth for the first fiscal
year in such resolution to be exceeded; or
``(B) would cause revenues to be less than the appropriate
level of total revenues set forth for the first fiscal year
covered by such resolution or for the period including the
first fiscal year plus the following 4 fiscal years in such
resolution.
``(3) Enforcement of social security levels in the
senate.--After a concurrent resolution on the budget is
agreed to, it shall not be in order in the Senate to consider
any bill, resolution, amendment, motion, or conference report
that would cause a decrease in social security surpluses or
an increase in social security deficits derived from the
levels of social security revenues and social security
outlays set forth for the first fiscal year covered by the
resolution and for the period including the first fiscal year
plus the following 4 fiscal years in such resolution.
``(b) Social Security Levels.--
``(1) In general.--For the purposes of subsection (a)(3),
social security surpluses equal the excess of social security
revenues over social security outlays in a fiscal year or
years with such an excess and social security deficits equal
the excess of social security outlays over social security
revenues in a fiscal year or years with such an excess.
``(2) Tax treatment.--For the purposes of this section, no
provision of any legislation involving a change in chapter 1
of the Internal Revenue Code of 1986 shall be treated as
affecting the amount of social security revenues or outlays
unless such provision changes the income tax treatment of
social security benefits.
``(c) Exception in the House of Representatives.--
Subsection (a)(1) shall not apply in the House of
Representatives to any bill, resolution, or amendment that
provides new budget authority for a fiscal year or to any
conference report on any such bill or resolution, if--
``(1) the enactment of such bill or resolution as reported;
``(2) the adoption and enactment of such amendment; or
``(3) the enactment of such bill or resolution in the form
recommended in such conference report;
would not cause the appropriate allocation of new budget
authority made pursuant to section 302(a) for such fiscal
year, for the committee within whose jurisdiction such bill,
resolution, or amendment falls, to be exceeded.''.
SEC. 11112. AMENDMENT TO SECTION 312.
(a) In General.--Section 312 of the Congressional Budget
Act of 1974 is amended to read as follows:
``points of order
``Sec. 312. (a) Budget Committee Determinations.--For
purposes of this title and title IV, the levels of new budget
authority, budget outlays, spending authority as described in
section 401(c)(2), direct spending, new entitlement
authority, and revenues for a fiscal year shall be determined
on the basis of estimates made by the Committee on the Budget
of the House of Representatives or the Senate, as the case
may be.
``(b) Discretionary Spending Point of Order in the
Senate.--
``(1) Except as otherwise provided in this subsection, it
shall not be in order in the Senate to consider any
concurrent resolution on the budget (or amendment, motion, or
conference report on such a resolution) that would exceed any
of the discretionary spending limits in section 251(c) of the
Balanced Budget and Emergency Deficit Control Act of 1985.
``(2) This subsection shall not apply if a declaration of
war by the Congress is in effect or if a joint resolution
pursuant to section 258 of the Balanced Budget and Emergency
Deficit Control Act of 1985 has been enacted.
``(c) Maximum Deficit Amount Point of Order in the
Senate.--It shall not be in order in the Senate to consider
any concurrent resolution on the budget for a fiscal year
under section 301, or to consider any amendment to that
concurrent resolution, or to consider a conference report on
that concurrent resolution--
``(1) if the level of total budget outlays for the first
fiscal year that is set forth in that concurrent resolution
or conference report exceeds the recommended level of Federal
revenues set forth for that year by an amount that is greater
than the maximum deficit amount, if any, specified in the
Balanced Budget and Emergency Deficit Control Act of 1985 for
such fiscal year; or
``(2) if the adoption of such amendment would result in a
level of total budget outlays for that fiscal year which
exceeds the recommended level of Federal revenues for that
fiscal year, by an amount that is greater than the maximum
deficit amount, if any, specified in the Balanced Budget and
Emergency Deficit Control Act of 1985 for such fiscal year.
``(d) Timing of Points of Order in the Senate.--A point of
order under this Act may not be raised against a bill,
resolution, amendment, motion, or conference report while an
amendment or motion, the adoption of which would remedy the
violation of this Act, is pending before the Senate.
``(e) Points of Order in the Senate Against Amendments
Between the Houses.--Each provision of this Act that
establishes a point of order against an amendment also
establishes a point of order in the Senate against an
amendment between the Houses. If a point of order under this
Act is raised in the Senate against an amendment between the
Houses, and the Presiding Officer sustains the point of
order, the effect shall be the same as if the Senate had
disagreed to the amendment.
``(f) Effect of a Point of Order on a Bill in the Senate.--
In the Senate, if the Chair sustains a point of order under
this Act against a bill, the Chair shall then send the bill
to the committee of appropriate jurisdiction for further
consideration.''.
(b) Conforming Amendment.--The item relating to section 312
in the table of contents set forth in section 1(b) of the
Congressional Budget and Impoundment Control Act of 1974 is
amended by striking ``Effect of point'' and inserting
``Point''.
SEC. 11113. ADJUSTMENTS AND BUDGET COMMITTEE DETERMINATIONS.
(a) In General.--Title III of the Congressional Budget Act
of 1974 is amended by adding at the end the following new
section:
``adjustments
``Sec. 314. (a) Adjustments.--When--
``(1)(A) the Committee on Appropriations reports an
appropriation measure for fiscal year 1998, 1999, 2000, 2001,
or 2002 that specifies an amount for emergencies pursuant to
section 251(b)(2)(A) of the Balanced Budget and Emergency
Deficit Control Act of 1985 or for continuing disability
reviews pursuant to section 251(b)(2)(C) of that Act;
``(B) any other committee reports emergency legislation
described in section 252(e) of that Act;
``(C) the Committee on Appropriations reports an
appropriation measure for fiscal year 1998, 1999, 2000, 2001,
or 2002 that includes an appropriation with respect to clause
(i) or (ii), the adjustment shall be the amount of budget
authority in the measure that is the dollar equivalent, in
terms of Special Drawing Rights, of--
``(i) increases the United States quota as part of the
International Monetary Fund Eleventh General Review of Quotas
(United States Quota); or
``(ii) increases the maximum amount available to the
Secretary of the Treasury pursuant to section 17 of the
Bretton Woods Agreement Act, as amended from time to time
(New Arrangements to Borrow); or
``(D) the Committee on Appropriations reports an
appropriation measure for fiscal year 1998, 1999, or 2000
that includes an appropriation for arrearages for
international organizations, international peacekeeping, and
multilateral development banks during that fiscal year, and
the sum of the appropriations for the period of fiscal years
1998
[[Page H4550]]
through 2000 do not exceed $1,884,000,000 in budget
authority; or
``(2) a conference committee submits a conference report
thereon;
the chairman of the Committee on the Budget of the Senate or
House of Representatives shall make the adjustments referred
to in subsection (c) to reflect the additional new budget
authority for such matter provided in that measure or
conference report and the additional outlays flowing in all
fiscal years from such amounts for such matter.
``(b) Application of Adjustments.--The adjustments and
revisions to allocations, aggregates, and limits made by the
Chairman of the Committee on the Budget pursuant to
subsection (a) for legislation shall only apply while such
legislation is under consideration and shall only permanently
take effect upon the enactment of that legislation.
``(c) Content of Adjustments.--The adjustments referred to
in subsection (a) shall consist of adjustments, as
appropriate, to--
``(1) the discretionary spending limits as set forth in the
most recently agreed to concurrent resolution on the budget;
``(2) the allocations made pursuant to the most recently
adopted concurrent resolution on the budget pursuant to
section 302(a); and
``(3) the budgetary aggregates as set forth in the most
recently adopted concurrent resolution on the budget.
``(d) Reporting Revised Suballocations.--Following the
adjustments made under subsection (a), the Committees on
Appropriations of the Senate and the House of Representatives
may report appropriately revised suballocations pursuant to
section 302(b) to carry out this subsection.
``(e) Definitions.--As used in subsection (a)(1)(A), when
referring to continuing disability reviews, the terms
`continuing disability reviews', `additional new budget
authority', and `additional outlays' shall have the same
meanings as provided in section 251(b)(2)(C)(ii) of the
Balanced Budget and Emergency Deficit Control Act of 1985.''.
(b) Conforming Amendments.--(1) Sections 302(g), 311(c),
and 313(e) of the Congressional Budget Act of 1974 are
repealed.
(2) The table of contents set forth in section 1(b) of the
Congressional Budget and Impoundment Control Act of 1974 is
amended by adding after the item relating to section 313 the
following new item:
``Sec. 314. Adjustments.''.
SEC. 11114. EFFECT OF SELF-EXECUTING AMENDMENTS ON POINTS OF
ORDER IN THE HOUSE OF REPRESENTATIVES.
(a) Effect of Points of Order.--Title III of the
Congressional Budget Act of 1974 is amended by adding after
section 314 the following new section:
``Effect of self-executing amendments on points of order in the house
of representatives
``Sec. 315. In the House of Representatives, if a provision
of a bill, as reported, violates a section of this title or
title IV and a self-executing rule providing for
consideration of that bill modifies that provision to
eliminate such violation, then such point of order shall not
lie against consideration of that bill.''.
(b) Conforming Amendment.--The table of contents set forth
in section 1(b) of the Congressional Budget and Impoundment
Control Act of 1974 is amended by adding after the item
relating to section 314 the following new item:
``Sec. 315. Effect of self-executing amendments on points of order in
the house of representatives.''.
SEC. 11115. AMENDMENT OF SECTION 401 AND REPEAL OF SECTION
402.
(a) Section 401.--Subsections (a) and (b) of section 401 of
the Congressional Budget Act of 1974 are amended to read as
follows:
``bills providing new spending authority or new credit authority
``Sec. 401. (a) Controls on Legislation Providing Spending
Authority or Credit Authority.--It shall not be in order in
either the House of Representatives or the Senate to consider
any bill, joint resolution, amendment, motion, or conference
report, as reported to its House which provides new spending
authority described in subsection (c)(2)(A) or (B) or new
credit authority, unless that bill, resolution, conference
report, or amendment also provides that such new spending
authority as described in subsection (c)(2) (A) or (B) or new
credit authority is to be effective for any fiscal year only
to such extent or in such amounts as are provided in
appropriation Acts.
``(b) Legislation Providing Entitlement Authority.--It
shall not be in order in either the House of Representatives
or the Senate to consider any bill, joint resolution,
amendment, motion, or conference report, as reported to its
House which provides new spending authority described in
subsection (c)(2)(C) which is to become effective before the
first day of the fiscal year which begins during the calendar
year in which such bill or resolution is reported.''.
(b) Repealer of Section 402.--(1) Section 402 of the
Congressional Budget Act of 1974 is repealed.
(2) Conforming Amendments.--(1) Sections 403 through 407 of
the Congressional Budget Act of 1974 are redesignated as
sections 402 through 406, respectively.
(2) The table of contents set forth in section 1(b) of the
Congressional Budget and Impoundment Control Act of 1974 is
amended by deleting the item relating to section 402 and by
redesignating the items relating to sections 403 through 407
as the items relating to sections 402 through 406,
respectively.
SEC. 11116. REPEAL OF TITLE VI.
(a) Repealer.--Title VI of the Congressional Budget Act of
1974 is repealed.
(b) Conforming Amendments.--The items relating to title VI
of the table of contents set forth in section 1(b) of the
Congressional Budget and Impoundment Control Act of 1974 are
repealed.
SEC. 11117. AMENDMENTS TO SECTION 904.
(a) Conforming Amendment.--Section 904(a) of the
Congressional Budget Act of 1974 is amended by striking
``(except section 905)'' and by striking ``V, and VI (except
section 601(a))'' and inserting ``and V''.
(b) Waivers.--Section 904(c) of the Congressional Budget
Act of 1974 is amended to read as follows:
``(c) Waivers.--
``(1) Sections 305(b)(2), 305(c)(4), 306, 310(d)(2), 313,
904(c), and 904(d) of this Act may be waived or suspended in
the Senate only by the affirmative vote of three-fifths of
the Members, duly chosen and sworn.
``(2) Sections 301(i), 302(c), 302(f), 310(g), 311(a), and
315 of this Act and sections 258(a)(4)(C),
258(A)(b)(3)(C)(I), 258(B)(f)(1), 258B(h)(1), 258(h)(3),
258C(a)(5), and 258(C)(b)(1) of the Balanced Budget and
Emergency Deficit Control Act of 1985 may be waived or
suspended in the Senate only by the affirmative vote of
three-fifths of the Members, duly chosen and sworn.''.
(c) Appeals.--Section 904(d) of the Congressional Budget
Act of 1974 is amended to read as follows:
``(d) Appeals.--
``(1) Appeals in the Senate from the decisions of the Chair
relating to any provision of title III or IV of section 1017
shall, except as otherwise provided therein, be limited to 1
hour, to be equally divided between, and controlled by, the
mover and the manager of the resolution, concurrent
resolution, reconciliation bill, or rescission bill, as the
case may be.
``(2) An affirmative vote of three-fifths of the Members,
duly chosen and sworn, shall be required in the Senate to
sustain an appeal of the ruling of the Chair on a point of
order raised under sections 305(b)(2), 305(c)(4), 306,
310(d)(2), 313, 904(c), and 904(d) of this Act.
``(3) An affirmative vote of three-fifths of the Members,
duly chosen and sworn, shall be required in the Senate to
sustain an appeal of the ruling of the Chair on a point of
order raised under sections 301(i), 302(c), 302(f), 310(g),
311(a), and 315 of this Act and sections 258(a)(4)(C),
258(A)(b)(3)(C)(I), 258(B)(f)(1), 258B(h)(1), 258(h)(3),
258C(a)(5), and 258(C)(b)(1) of the Balanced Budget and
Emergency Deficit Control Act of 1985.''.
(d) Expiration of Supermajority Voting Requirements.--
Section 904 of the Congressional Budget Act of 1974 is
amended by adding at the end the following:
``(e) Expiration of Certain Supermajority Voting
Requirements.--Subsections (c)(2) and (d)(3) shall expire on
September 30, 2002.''.
SEC. 11118. REPEAL OF SECTIONS 905 AND 906.
(a) Repealer.--Sections 905 and 906 of the Congressional
Budget and Impoundment Control Act of 1974 are repealed.
(b) Conforming Amendments.--The table of contents set forth
in section 1(b) of the Congressional Budget and Impoundment
Control Act of 1974 is amended by striking the items relating
to sections 905 and 906.
SEC. 11119. AMENDMENTS TO SECTIONS 1022 AND 1024.
(a) Section 1022.--Section 1022(b)(1)(F) of Congressional
Budget and Impoundment Control Act of 1974 is amended by
striking ``section 601'' and inserting ``section 251(c) the
Balanced Budget and Emergency Deficit Control Act of 1985''.
(b) Section 1024.--Section 1024(a)(1)(B) of Congressional
Budget and Impoundment Control Act of 1974 is amended by
striking ``section 601(a)(2)'' and inserting ``section 251(c)
the Balanced Budget and Emergency Deficit Control Act of
1985''.
SEC. 11120. AMENDMENT TO SECTION 1026.
Section 1026(7)(A)(iv) of the Congressional Budget and
Impoundment Control Act of 1974 is amended by striking
``and'' and inserting ``or''.
Subtitle B--Amendments to the Balanced Budget and Emergency Deficit
Control Act of 1985
SEC. 11201. PURPOSE.
This subtitle extends discretionary spending limits and
pay-as-you-go requirements.
SEC. 11202. GENERAL STATEMENT AND DEFINITIONS.
(a) General Statement.--Section 250(b) of the Balanced
Budget and Emergency Deficit Control Act of 1985 (2 U.S.C.
900(b)) is amended by striking the first two sentences and
inserting the following: ``This part provides for the
enforcement of a balanced budget by fiscal year 2002 as
called for in House Concurrent Resolution 84 (105th Congress,
1st session).''.
(b) Definitions.--Section 250(c) of the Balanced Budget and
Emergency Deficit Control Act of 1985 is amended--
(1) by striking paragraph (4) and inserting the following:
``(4) The term `category' means defense, nondefense, and
violent crime reduction discretionary appropriations as
specified in the joint explanatory statement accompanying a
conference report on the Balanced Budget Act of 1997.'';
(2) by striking paragraph (6) and inserting the following:
``(6) The term `budgetary resources' means new budget
authority, unobligated balances, direct spending authority,
and obligation limitations.'';
[[Page H4551]]
(3) in paragraph (9), by striking ``submission of the
fiscal year 1992 budget that are not included with a budget
submission'' and inserting ``that budget submission that are
not included with it'';
(4) in paragraph (14), by inserting ``first 4'' before
``fiscal years'' and by striking ``1995'' and inserting
``2006'';
(5) by striking paragraphs (17) and (20) and by
redesignating paragraphs (18), (19), and (21) as paragraphs
(17), (18), and (19), respectively;
(6) in paragraph (17) (as redesignated), by striking
``Omnibus Budgtet Reconciliation Act of 1990'' and inserting
``Balanced Budget Act of 1997'';
(7) in paragraph (20) (as redesignated), by striking the
second sentence; and
(8) by adding at the end the following new paragraph:
``(20) The term `consultation', when applied to the
Committee on the Budget of either the House of
Representatives or of the Senate, means written communication
with that committee that affords that committee an
opportunity to comment on the matter that is the subject of
the consultation before official action is taken on such
matter.''.
SEC. 11203. ENFORCING DISCRETIONARY SPENDING LIMITS.
(a) Extension Through Fiscal Year 2002.--Section 251 of the
Balanced Budget and Emergency Deficit Control Act of 1985 is
amended--
(1) in the side heading of subsection (a), by striking
``1991-1998'' and inserting ``1997-2002'';
(2) in subsection (a)(7) by inserting ``(excluding
Saturdays, Sundays, or legal holidays)'' after ``5 calendar
days'';
(3) in the first sentence of subsection (b)(1), by striking
``1992, 1993, 1994, 1995, 1996, 1997 or 1998'' and inserting
``1997 or any fiscal year thereafter through 2002'' and by
striking ``through 1998'' and inserting ``through 2002'';
(4) in subsection (b)(1), by striking ``the following:''
and all that follows through ``in concepts and definitions''
the first place it appears and inserting ``the following: the
adjustments'' and by striking subparagraphs (B) and (C);
(5) in subsection (b)(2), by striking ``1991, 1992, 1993,
1994, 1995, 1996, 1997, or 1998'' and inserting ``1997 or any
fiscal year thereafter through 2002'', by striking ``through
1998'' and inserting ``through 2002'', and by striking
subparagraphs (A), (B), (C), (E), and (G), and by
redesignating subparagraphs (D), (F), and (H) as
subparagraphs (A), (B), and (C), respectively;
(6) in subsection (b)(2)(A) (as redesignated), by striking
``(i)'', by striking clause (ii), and by inserting ``fiscal''
before ``years'';
(7) in subsection (b)(2)(B) (as redesignated), by striking
everything after ``the adjustment in outlays'' and inserting
``for a fiscal year is the amount of the excess but not to
exceed 0.5 percent of the adjusted discretionary spending
limit on outlays for that fiscal year in fiscal year 1997 or
any fiscal year thereafter through 2002; and
(8) by adding at the end of subsection (b)(2) the following
new subparagraphs:
``(D) Allowance for IMF.--If an appropriations bill or
joint resolution is enacted for fiscal year 1998, 1999, 2000,
2001, or 2002 that includes an appropriation with respect to
clause (i) or (ii), the adjustment shall be the amount of
budget authority in the measure that is the dollar
equivalent, in terms of Special Drawing Rights, of--
``(i) an increase in the United States quota as part of the
International Monetary Fund Eleventh General Review of Quotas
(United States Quota); or
``(ii) any increase in the maximum amount available to the
Secretary of the Treasury pursuant to section 17 of the
Bretton Woods Agreement Act, as amended from time to time
(New Arrangements to Borrow).
``(E) Allowance for international arrearages.--
``(i) Adjustments.--If an appropriations bill or joint
resolution is enacted for fiscal year 1998, 1999, or 2000
that includes an appropriation for arrearages for
international organizations, international peacekeeping, and
multilateral banks for that fiscal year, the adjustment shall
be the amount of budget authority in such measure and the
outlays flowing in all fiscal years from such budget
authority.
``(ii) Limitations.--The total amount of adjustments made
pursuant to this subparagraph for the period of fiscla years
1998 through 2000 shall not exceed $1,884,000,000 in budget
authority.''.
(b) Shifting of Discretionary Spending Limits into the
Balanced Budget and Emergency Deficit Control Act of 1985.--
Section 251 of the Balanced Budget and Emergency Deficit
Control Act of 1985 is amended by adding at the end the
following new subsection:
``(c) Discretionary Spending Limit.--As used in this part,
the term `discretionary spending limit' means--
``(1) with respect to fiscal year 1997, for the
discretionary category, the current adjusted amount of new
budget authority and outlays;
``(2) with respect to fiscal year 1998--
``(A) for the defense category: $269,000,000,000 in new
budget authority and $266,823,000,000 in outlays;
``(B) for the nondefense category: $252,357,000,000 in new
budget authority and $282,853,000,000 in outlays; and
``(C) for the violent crime reduction category:
$5,500,000,000 in new budget authority and $3,592,000,000 in
outlays;
``(3) with respect to fiscal year 1999--
``(A) for the defense category: $271,500,000,000 in new
budget authority and $266,518,000,000 in outlays; and
``(B) for the nondefense category: $261,499,000,000 in new
budget authority and $292,803,000,000 in outlays;
``(4) with respect to fiscal year 2000, for the
discretionary category: $537,193,000,000 in new budget
authority and $564,265,000,000 in outlays;
``(5) with respect to fiscal year 2001, for the
discretionary category: $542,032,000,000 in new budget
authority and $564,396,000,000 in outlays; and
``(6) with respect to fiscal year 2002, for the
discretionary category: $551,074,000,000 in new budget
authority and $560,799,000,000 in outlays;
as adjusted in strict conformance with subsection (b).''.
SEC. 11204. VIOLENT CRIME REDUCTION TRUST FUND.
(a) Sequestration Regarding Violent Crime Reduction Trust
Fund.--Section 251A of the Balanced Budget and Emergency
Deficit Control Act of 1985 is repealed.
(b) Conforming Amendment.--Section 310002 of Public Law
103-322 (42 U.S.C. 14212) is repealed.
SEC. 11205. ENFORCING PAY-AS-YOU-GO.
(a) Extension.--Section 252 (2 U.S.C. 902) is amended--
(1) by striking subsections (a) and (b) and inserting the
following:
``(a) Purpose.--The purpose of this section is to assure
that any legislation enacted prior to September 30, 2002,
affecting direct spending or receipts that increases the
deficit will trigger an offsetting sequestration.
``(b) Sequestration.--
``(1) Timing.--Within 15 calendar days after Congress
adjourns to end a session and on the same day as a
sequestration (if any) under sections 251 and 253, there
shall be a sequestration to offset the amount of any net
deficit increase in the budget year caused by all direct
spending and receipts legislation (after adjusting for any
prior sequestration as provided by paragraph (2)) plus any
net deficit increase in the prior fiscal year caused by all
direct spending and receipts legislation not reflected in the
final OMB sequestration report for that year.
``(2) Calculation of deficit increase.--OMB shall calculate
the amount of deficit increase, if any, in the budget year by
adding--
``(A) all applicable estimates of direct spending and
receipts legislation transmitted under subsection (d)
applicable to the budget year, other than any amounts
included in such estimates resulting from--
``(i) full funding of, and continuation of, the deposit
insurance guarantee commitment in effect on the date of
enactment of this section; and
``(ii) emergency provisions as designated under subsection
(e); and
``(B) the estimated amount of savings in direct spending
programs applicable to the budget year resulting from the
prior year's sequestration under this section or section 253,
if any (except for any amounts sequestered as a result of any
deficit increase in the fiscal year immediately preceding the
prior fiscal year), as published in OMB's final sequestration
report for that prior year; and
``(C) all applicable estimates of direct spending and
receipts legislation transmitted under subsection (d) for the
current year that are not reflected in the final OMB
sequestration report for that year, other than any amounts
included in such estimates resulting from emergency
provisions as designated under subsection (e).'';
(2) by amending subsection (c)(1)(B), by inserting ``and
direct'' after ``guaranteed'';
(3) by amending subsection (d) to read as follows:
``(d) Estimates.--
``(1) CBO estimates.--As soon as practicable after Congress
completes action on any direct spending or receipts
legislation, CBO shall provide an estimate of the budgetary
effects of that legislation.
``(2) OMB estimates.--Not later than 5 calendar days
(excluding Saturdays, Sundays, or legal holidays) after the
enactment of any direct spending or receipts legislation, OMB
shall transmit a report to the House of Representatives and
to the Senate containing--
``(A) the CBO estimate of the budgetary effects of that
legislation;
``(B) an OMB estimate of the budgetary effects of that
legislation using current economic and technical assumptions;
and
``(C) an explanation of any difference between the two
estimates.
``(3) Scope of estimates.--The estimates under this section
shall include the amount of change in outlays or receipts, as
the case may be, for the current year (if applicable), the
budget year, and each outyear.
``(4) Scorekeeping Guidelines.--OMB and CBO, after
consultation with each other and the Committees on the Budget
of the House of Representatives and the Senate, shall--
``(A) determine common scorekeeping guidelines; and
``(B) in conformance with such guidelines, prepare
estimates under this section.''; and
(4) in subsection (e), by striking ``, for any fiscal year
from 1991 through 1998,'' and by striking ``through 1995''.
SEC. 11206. REPORTS AND ORDERS.
Section 254 of the Balanced Budget and Emergency Deficit
Control Act of 1985 is amended--
(1) by striking subsection (c) and redesignating
subsections (d) through (k) as (c) through (j), respectively;
[[Page H4552]]
(2) in subsection (c)(2) (as redesignated), by striking
``1998'' and inserting ``2002''; and
(3)(A) in subsection (f)(2)(A) (as redesignated), by
striking ``1998'' and inserting ``2002''; and
(B) in subsection (f)(3) (as redesignated), by striking
``through 1998''.
SEC. 11207. EXEMPT PROGRAMS AND ACTIVITIES.
(a) Veterans Programs.--Section 255(b) of the Balanced
Budget and Emergency Deficit Control Act of 1985 is amended
as follows:
(1) In the item relating to Veterans Insurance and
Indemnity, strike ``Indemnity'' and insert ``Indemnities''.
(2) In the item relating to Veterans' Canteen Service
Revolving Fund, strike ``Veterans'''.
(3) In the item relating to Benefits under chapter 21 of
title 38, strike ``(36-0137-0-1-702)'' and insert ``(36-0120-
0-1-701)''.
(4) In the item relating to Veterans' compensation, strike
``Veterans' compensation'' and insert ``Compensation''.
(5) In the item relating to Veterans' pensions, strike
``Veterans' pensions'' and insert ``Pensions''.
(6) After the last item, insert the following new items:
``Benefits under chapter 35 of title 38, United States
Code, related to educational assistance for survivors and
dependents of certain veterans with service-connected
disabilities (36-0137-0-1-702);
``Assistance and services under chapter 31 of title 38,
United States Code, relating to training and rehabilitation
for certain veterans with service-connected disabilities (36-
0137-0-1-702);
``Benefits under subchapters I, II, and III of chapter 37
of title 38, United States Code, relating to housing loans
for certain veterans and for the spouses and surviving
spouses of certain veterans Guaranty and Indemnity Program
Account (36-1119-0-1-704);
``Loan Guaranty Program Account (36-1025-0-1-704); and
``Direct Loan Program Account (36-1024-0-1-704).''.
(b) Certain Program Bases.--Section 255(f) of the Balanced
Budget and Emergency Deficit Control Act of 1985 is amended
to read as follows:
``(f) Optional Exemption of Military Personnel.--
``(1) The President may, with respect to any military
personnel account, exempt that account from sequestration or
provide for a lower uniform percentage reduction than would
otherwise apply.
``(2) The President may not use the authority provided by
paragraph (1) unless he notifies the Congress of the manner
in which such authority will be exercised on or before the
date specified in section 254(a) for the budget year.''.
(c) Other Programs and Activities.--(1) Section
255(g)(1)(A) of the Balanced Budget Emergency Deficit Control
Act of 1985 is amended as follows:
(A) After the first item, insert the following new item:
``Activities financed by voluntary payments to the
Government for goods or services to be provided for such
payments;''.
(B) Strike ``Thrift Savings Fund (26-8141-0-7-602);''.
(C) In the first item relating to the Bureau of Indian
Affairs, insert ``Indian land and water claims settlements
and'' after the comma.
(D) In the second item relating to the Bureau of Indian
Affairs, strike ``miscellaneous'' and insert
``Miscellaneous'' and strike ``, tribal trust funds''.
(E) Strike ``Claims, defense (97-0102-0-1-051);''.
(F) In the item relating to Claims, judgments, and relief
acts, strike ``806'' and insert ``808''.
(G) Strike ``Coinage profit fund (20-5811-0-2-803)''.
(H) Insert ``Compact of Free Association (14-0415-0-1-
808);'' after the item relating to the Claims, judgments, and
relief acts.
(I) Insert ``Conservation Reserve Program (12-2319-0-1-
302);'' after the item relating to the Compensation of the
President.
(J) In the item relating to the Customs Service, strike
``852'' and insert ``806''.
(K) In the item relating to the Comptroller of the
Currency, insert ``, Assessment funds (20-8413-0-8-373)''
before the semicolon.
(L) Strike ``Director of the Office of Thrift
Supervision;''.
(M) Strike ``Eastern Indian land claims settlement fund
(14-2202-0-1-806);''.
(N) After the item relating to the Exchange stabilization
fund, insert the following new items:
``Farm Credit Administration, Limitation on Administrative
Expenses (78-4131-0-3-351);
``Farm Credit System Financial Assistance Corporation,
interest payment (20-1850-0-1-908);''.
(O) Strike ``Federal Deposit Insurance Corporation;''.
(P) In the first item relating to the Federal Deposit
Insurance Corporation, insert ``(51-4064-0-3-373)'' before
the semicolon.
(Q) In the second item relating to the Federal Deposit
Insurance Corporation, insert ``(51-4065-0-3-373)'' before
the semicolon.
(R) In the third item relating to the Federal Deposit
Insurance Corporation, insert ``(51-4066-0-3-373)'' before
the semicolon.
(S) In the item relating to the Federal Housing Finance
Board, insert ``(95-4039-0-3-371)'' before the semicolon.
(T) In the item relating to the Federal payment to the
railroad retirement account, strike ``account'' and insert
``accounts''.
(U) In the item relating to the health professions graduate
student loan insurance fund, insert ``program account'' after
``fund'' and strike ``(Health Education Assistance Loan
Program) (75-4305-0-3-553)'' and insert ``(75-0340-0-1-
552)''.
(V) In the item relating to Higher education facilities,
strike ``and insurance''.
(W) In the item relating to Internal revenue collections
for Puerto Rico, strike ``852'' and insert ``806''.
(X) Amend the item relating to the Panama Canal Commission
to read as follows:
``Panama Canal Commission, Panama Canal Revolving Fund (95-
4061-0-3-403);''.
(Y) In the item relating to the Medical facilities
guarantee and loan fund, strike ``(75-4430-0-3-551)'' and
insert ``(75-9931-0-3-550)''.
(Z) In the first item relating to the National Credit Union
Administration, insert ``operating fund (25-4056-0-3-373)''
before the semicolon.
(AA) In the second item relating to the National Credit
Union Administration, strike ``central'' and insert
``Central'' and insert ``(25-4470-0-3-373)'' before the
semicolon.
(BB) In the third item relating to the National Credit
Union Administration, strike ``credit'' and insert ``Credit''
and insert ``(25-4468-0-3-373)'' before the semicolon.
(CC) After the third item relating to the National Credit
Union Administration, insert the following new item:
``Office of Thrift Supervision (20-4108-0-3-373);''.
(DD) In the item relating to Payments to health care trust
funds, strike ``572'' and insert ``571''.
(EE) Strike ``Compact of Free Association, economic
assistance pursuant to Public Law 99-658 (14-0415-0-1-
806);''.
(FF) In the item relating to Payments to social security
trust funds, strike ``571'' and insert ``651''.
(GG) Strike ``Payments to state and local government fiscal
assistance trust fund (20-2111-0-1-851);''.
(HH) In the item relating to Payments to the United States
territories, strike ``852'' and insert ``806''.
(II) Strike ``Resolution Funding Corporation;''.
(JJ) In the item relating to the Resolution Trust
Corporation, insert ``Revolving Fund (22-4055-0-3-373)''
before the semicolon.
(KK) After the item relating to the Tennessee Valley
Authority funds, insert the following new items:
``Thrift Savings Fund;
``United States Enrichment Corporation (95-4054-0-3-271);
``Vaccine Injury Compensation (75-0320-0-1-551);
``Vaccine Injury Compensation Program Trust Fund (20-8175-
0-7-551);''.
(2) Section 255(g)(1)(B) of the Balanced Budget and
Emergency Deficit Control Act of 1985 is amended as follows:
(A) Strike ``The following budget'' and insert ``The
following Federal retirement and disability''.
(B) In the item relating to Black lung benefits, strike
``lung benefits'' and insert ``Lung Disability Trust Fund''.
(C) In the item relating to the Court of Federal Claims
Court Judges' Retirement Fund, strike ``Court of Federal''.
(D) In the item relating to Longshoremen's compensation
benefits, insert ``Special workers compensation expenses,''
before ``Longshoremen's''.
(E) In the item relating to Railroad retirement tier II,
strike ``retirement tier II'' and insert ``Industry Pension
Fund''.
(3) Section 255(g)(2) of the Balanced Budget and Emergency
Deficit Control Act of 1985 is amended as follows:
(A) Strike the following items:
``Agency for International Development, Housing, and other
credit guarantee programs (72-4340-0-3-151);
``Agricultural credit insurance fund (12-4140-0-1-351);''.
(B) In the item relating to Check forgery, strike ``Check''
and insert ``United States Treasury check''.
(C) Strike ``Community development grant loan guarantees
(86-0162-0-1-451);''.
(D) After the item relating to the United States Treasury
Check forgery insurance fund, insert the following new item:
``Credit liquidating accounts;''.
(E) Strike the following items:
``Credit union share insurance fund (25-4468-0-3-371);
``Economic development revolving fund (13-4406-0-3);
``Export-Import Bank of the United States, Limitation of
program activity (83-4027-0-1-155);
``Federal deposit Insurance Corporation (51-8419-0-8-371);
``Federal Housing Administration fund (86-4070-0-3-371);
``Federal ship financing fund (69-4301-0-3-403);
``Federal ship financing fund, fishing vessels (13-4417-0-
3-376);
``Government National Mortgage Association, Guarantees of
mortgage-backed securities (86-4238-0-3-371);
``Health education loans (75-4307-0-3-553);
``Indian loan guarantee and insurance fund (14-4410-0-3-
452);
``Railroad rehabilitation and improvement financing fund
(69-4411-0-3-401);
``Rural development insurance fund (12-4155-0-3-452);
[[Page H4553]]
``Rural electric and telephone revolving fund (12-4230-8-3-
271);
``Rural housing insurance fund (12-4141-0-3-371);
``Small Business Administration, Business loan and
investment fund (73-4154-0-3-376);
``Small Business Administration, Lease guarantees revolving
fund (73-4157-0-3-376);
``Small Business Administration, Pollution control
equipment contract guarantee revolving fund (73-4147-0-3-
376);
``Small Business Administration, Surety bond guarantees
revolving fund (73-4156-0-3-376);
``Department of Veterans Affairs Loan guaranty revolving
fund (36-4025-0-3-704);''.
(d) Low-Income Programs.--Section 255(h) of the Balanced
Budget and Emergency Deficit Control Act of 1985 is amended
as follows:
(1) Amend the item relating to Child nutrition to read as
follows:
``State child nutrition programs (with the exception of
special milk programs) (12-3539-0-1-605);''.
(2) Amend the item relating to the Women, infants, and
children program to read as follows:
``Special supplemental nutrition program for women,
infants, and children (WIC) (12-3510-0-1-605).''.
(e) Identification of Programs.--Section 255(i) of the
Balanced Budget and Emergency Deficit Control Act of 1985 is
amended to read as follows:
``(i) Identification of Programs.--For purposes of
subsections (b), (g), and (h), each account is identified by
the designated budget account identification code number set
forth in the Budget of the United States Government 1996-
Appendix, and an activity within an account is designated by
the name of the activity and the identification code number
of the account.''.
(f) Optional Exemption of Military Personnel.--Section
255(h) of the Balanced Budget and Emergency Deficit Control
Act of 1985 (relating to optional exemption of military
personnel) is repealed.
SEC. 11208. GENERAL AND SPECIAL SEQUESTRATION RULES.
(a) Section Heading.--(1) The section heading of section
256 of the Balanced Budget and Emergency Deficit Control Act
of 1985 is amended by striking ``exceptions, limitations, and
special rules'' and inserting ``general and special
sequestration rules''.
(2) The item relating to section 256 in the table contents
set forth in section 250(a) of the Balanced Budget and
Emergency Deficit Control Act of 1985 is amended to read as
follows:
``Sec. 256. General and special sequestration rules.''.
(b) Automatic Spending Increases.--Section 256(a) of the
Balanced Budget and Emergency Deficit Control Act of 1985 is
amended by striking paragraph (1) and redesignating
paragraphs (2) and (3) as paragraphs (1) and (2),
respectively.
(c) Guaranteed and Direct Student Loan Programs.--Section
256(b) of the Balanced Budget and Emergency Deficit Control
Act of 1985 is amended to read as follows:
``(b) Student Loans.--(1) For all student loans under part
B or D of title IV of the Higher Education Act of 1965 made
during the period when a sequestration order under section
254 is in effect, origination fees under sections 438(c)(2)
and 455(c) of that Act shall be increased by a uniform
percentage sufficient to produce the dollar savings in
student loan programs (as a result of that sequestration
order) required by section 252 or 253, as applicable.
``(2) For any loan made during the period beginning on the
date that an order issued under section 254 takes effect with
respect to a fiscal year and ending at the close of such
fiscal year, the origination fees which are authorized to be
collected pursuant to sections 438(c)(2) and 455(c) of such
Act shall be increased by 0.50 percent.''.
(d) Health Centers.--Section 256(e)(1) of the Balanced
Budget and Emergency Deficit Control Act of 1985 is amended
by striking the dash and all that follows thereafter and
inserting ``2 percent.''.
(e) Federal Pay.--Section 256(g)(1) of the Balanced Budget
and Emergency Deficit Control Act of 1985 is amended by
inserting ``(including any amount payable under section 5303
or 5304 of title 5, United States Code)'' after ``such
statutory pay system''.
(f) Treatment of Federal Administrative Expenses.--Section
256(h)(4) of the Balanced Budget and Emergency Deficit
Control Act of 1985 is amended by striking subparagraphs (D)
and (H), by redesignating subparagraphs (E), (F), (G), and
(I), as subparagraphs (D), (E), (F), and (G), respectively,
and by adding at the end the following new subparagraph:
``(H) Farm Credit Administration.''.
(g) Commodity Credit Corporation.--Section 256(j)(5) of the
Balanced Budget and Emergency Deficit Control Act of 1985 is
amended to read as follows:
``(5) Dairy program.--Notwithstanding other provisions of
this subsection, as the sole means of achieving any reduction
in outlays under the milk price support program, the
Secretary of Agriculture shall provide for a reduction to be
made in the price received by producers for all milk produced
in the United States and marketed by producers for commercial
use. That price reduction (measured in cents per hundred
weight of milk marketed) shall occur under section
201(d)(2)(A) of the Agricultural Act of 1949 (7 U.S.C.
1446(d)(2)(A)), shall begin on the day any sequestration
order is issued under section 254, and shall not exceed the
aggregate amount of the reduction in outlays under the milk
price support program that otherwise would have been achieved
by reducing payments for the purchase of milk or the products
of milk under this subsection during the applicable fiscal
year.''.
(h) Effects of Sequestration.--Section 256(k) of the
Balanced Budget and Emergency Deficit Control Act of 1985 is
amended as follows:
(1) In paragraph (1), strike ``other than a trust or
special fund account'' and insert ``, except as provided in
paragraph (5)'' before the period.
(2) Strike paragraph (4), redesignate paragraphs (5) and
(6) as paragraphs (4) and (5), respectively, and amend
paragraph (5) (as redesignated) to read as follows:
``(5) Budgetary resources sequestered in revolving, trust,
and special fund accounts, and offsetting collections
sequestered in appropriation accounts shall not be available
for obligation during the fiscal year in which the
sequestration occurs, but shall be available in subsequent
years to the extent otherwise provided in law.''.
SEC. 11209. THE BASELINE.
Section 257 of the Balanced Budget and Emergency Deficit
Control Act of 1985 is amended--
(1) in subsection (b)(2) by amending subparagraph (A) to
read as follows:
``(A)(i) Except as provided in clause (ii), no program with
estimated current year outlays greater than $50,000,000 shall
be assumed to expire in the budget year or the outyears.
``(ii) Clause (i) shall not apply to a program if
legislation establishing or modifying that program contains a
provision stating `Section 257(b)(2) of the Balanced Budget
and Emergency Deficit Control Act of 1985 shall not apply to
the program specified in ____ of this Act.', the blank space
being filled in with the appropriate section or sections of
that legislation.
``(iii) No bill, resolution, amendment, motion, or
conference report shall be subject to a point of order under
section 306 of the Congressional Budget Act of 1974 solely
because it includes the provision specified in clause (ii).
``(iv) Upon the expiration of the suspensions contained in
section 171 of Public Law 104-193 with regard to a program in
such Act with estimated fiscal year outlays greater than
$50,000,000, that program shall be assumed to operate under
that Act as in effect immediately before reversion to the
laws suspended by such Act.''
(2) by adding the end of subsection (b)(2) the following
new subparagraph:
``(D) If any law expires before the budget year or any
outyear, then any program with estimated current year outlays
greater than $50 million which operates under that law shall
be assumed to continue to operate under that law as in effect
immediately before its expiration.'';
(3) in the second sentence of subsection (c)(5), by
striking ``national product fixed-weight price index'' and
inserting ``domestic product chain-type price index''; and
(4) by striking subsection (e) and inserting the following:
``(e) Asset Sales.--Amounts realized from the sale of an
asset other than a loan asset shall not be counted against
legislation if that sale would result in a financial cost to
the Federal Government.''.
SEC. 11210. TECHNICAL CORRECTION.
Section 258 of the Balanced Budget and Emergency Deficit
Control Act of 1985, entitled ``Modification of Presidential
Order'', is repealed.
SEC. 11211. JUDICIAL REVIEW.
Section 274 of the Balanced Budget and Emergency Deficit
Control Act of 1985 is amended as follows:
(1) Strike ``252'' or ``252(b)'' each place it occurs and
insert ``254''.
(2) In subsection (d)(1)(A), strike ``257(l) to the extent
that'' and insert ``256(a) if'', strike the parenthetical
phrase, and at the end insert ``or''.
(3) In subsection (d)(1)(B), strike ``new budget'' and all
that follows through ``spending authority'' and insert
``budgetary resources'' and strike ``or'' after the comma.
(4) Strike subsection (d)(1)(C).
(5) Strike subsection (f) and redesignate subsections (g)
and (h) as subsections (f) and (g), respectively.
(6) In subsection (g) (as redesignated), strike ``base
levels of total revenues and total budget outlays, as'' and
insert ``figures'', and ``251(a)(2)(B) or (c)(2),'' and
insert ``254''.
SEC. 11212. EFFECTIVE DATE.
(a) Expiration.--Section 275(b) of the Balanced Budget and
Emergency Deficit Control Act of 1985 is amended--
(1) by striking ``Part C of this title, section'' and
inserting ``Sections 251, 253, 258B, and'';
(2) by striking ``1995'' and inserting ``2002''; and
(3) by adding at the end the following new sentence: ``The
remaining sections of part C of this title shall expire
September 30, 2006.''.
(b) Expiration.--Section 14002(c)(3) of the Omnibus Budget
Reconciliation Act of 1993 (2 U.S.C. 900 note) is repealed.
SEC. 11213. REDUCTION OF PREEXISTING BALANCES AND EXCLUSION
OF EFFECTS OF THIS ACT FROM PAYGO SCORECARD.
Upon the enactment of this Act, the Director of the Office
of Management and Budget shall--
(1) reduce any balances of direct spending and receipts
legislation for any fiscal year
[[Page H4554]]
under section 252 of the Balanced Budget and Emergency
Deficit Control Act of 1985 to zero; and
(2) not make any estimates of changes in direct spending
outlays and receipts under subsection (d) of such section 252
for any fiscal year resulting from the enactment of this Act
or the Revenue Reconciliation Act of 1997.
The SPEAKER pro tempore. The gentleman from Ohio [Mr. Kasich] and the
gentleman from South Carolina [Mr. Spratt] each will be recognized for
90 minutes.
The Chair recognizes the gentleman from Ohio [Mr. Kasich].
Mr. KASICH. Mr. Speaker, I yield myself as much time as I may
consume, and hopefully it will be short.
Let me just open the debate my making it very clear what we are about
to do here today.
For those people who have watched the efforts to balance the budget
over the course of the last 10 to 12 years, and I want to direct my
remarks to a degree to my friend from Indiana, there has been great
skepticism about any plan to balance the budget because what is
involved is saying we will make the savings later in exchange for some
increases or some tax increases today, and we will get around to it
later.
What we are about to do today is to enact in permanent law the
changes that are necessary in the entitlement programs that will
accumulate the savings that will allow us to balance the budget over
the course of the next 5 years, and so what I want everyone in this
Chamber to understand is, as we enact the changes in permanent law, for
example, that affect Medicare, we will accumulate savings as long as
those changes in the law remain intact. In order for us to lose those
savings, we would have to change the law again. We are not going to do
that. We are not only going to do this in regard to Medicare in an
effort to save Medicare and extend the life of Medicare for 10 years,
but we are doing it in all the entitlement programs.
So what we are about today is to enact into permanent law those
changes that will result in the savings of billions upon billions of
dollars; over the course of the next 10 years, approximately a savings
of $700 billion in mandatory savings, the largest in history.
At the same time, in this bill we are putting in place spending caps
for the operations of Government. These spending caps mean that, if we
spend more than what we have budgeted for, then we have the Sword of
Damocles come down, and it just cuts all spending above those caps.
Those caps are enforceable. Real savings will result from limiting the
growth of the programs which operate the Government to a growth of
about half a percent as compared to 6 percent over the last 10 years.
So what we are about doing today is to pass the first real bill that
will enact the permanent changes into law that will result in a
balanced budget by 2002. It is not a wish, a prayer, a hope, a dream;
it is reality.
Mr. ROEMER. Mr. Speaker, will the gentleman yield?
Mr. KASICH. I yield to the gentleman from the Hoosier State.
Mr. ROEMER. Mr. Speaker, I appreciate the gentleman directing his
events across the aisle in a bipartisan way because I intend to vote
for this reconciliation package.
I would say that it is not only important to work in a bipartisan way
to balance the budget, but this is a defining vote for the Democratic
Party. It is a vote that, while working with our Democratic President
and the majority Republican Party who control the House and the Senate,
we have been able to save over $700 billion that we will not have to
borrow over the next 10 years, and at the same time that many of us
Democrats believe in balancing the budget, we believe in doing it in a
fair, equitable and just manner.
Spending money on a brand-new initiative for children's health, $16
billion over 5 years for uninsured children; that would not have
happened without our input into this process.
The largest Pell grant increase in the history of the Pell grant
program to help our struggling families get their children a college
education; that would not have happened without the President and the
Democratic minorities in the Senate and the House working with the
Republican majority.
There are lots of things that we believe very firmly will benefit the
hard-working people of this country in this balanced budget proposal
that we hope will receive a number of Democratic votes here on the
floor, and I appreciate the hard work. And next door in the Buckeye
State, with the gentleman from Ohio [Mr. Kasich], we oftentimes work
together on some of the budgetary matters, and I am very anxious to
work with the President and with the Senate, the other body, and
improve this bill even further in conference.
Mr. KASICH. Mr. Speaker, I reclaim my time and suggest that I think
what everyone should be very happy about today is that what we are
about to do here again, so that there can be no confusion with our
colleagues or the people who advise our colleagues, we are about
enacting the real savings that will accumulate to balance the budget.
It is not based on some targets, it is not based on some jerry-rigged
mechanism. It is based on controlling the growth of entitlement
programs in a variety of areas, and I want to commend the gentleman for
being here and supporting this effort today.
Let me also spend a few minutes talking about the Medicare portion of
this. We have not only enacted the savings that will preserve Medicare
for 10 years, but at the same time we have also been able to offer a
program that will give our senior citizens more choice on health care.
Furthermore, it will permit physicians to group together to compete
against insurance companies. We think that allowing physicians to be
able to group together to compete against insurance companies will
result in consumers having a leg up on the current process. I am
delighted it happened.
Furthermore, included in this is something that is controversial, but
I want to commend the minority for not doing somersaults over this; it
is the program to allow our senior citizens to have more choice by
being able to purchase medical savings accounts in this product.
In addition to that, we have also got some control in the area of the
home health care and skilled nursing facilities, which have been the
most rapidly growing portion of Medicare. We are now going to have an
item called prospective payments where we do not just turn the faucet
on and let all the dollars run out. We want to hold people accountable
who deliver these services.
So we have a variety of things in this program that, in fact, will
empower seniors, give them more choices, we believe improve the quality
of care, and at the same time save $115 billion over the next 5 years
which is very similar to what we had proposed 2 years ago.
So I think this is just a terrific accomplishment. In the area of
Medicaid we have released the States from a number of provisions
designed by the Federal Government to tell States how to regulate the
Medicaid program. We have decided that there are some reasonable
provisions where the Governors of our country ought to be given
flexibility to manage their program better so that they can provide
more care to those who are in need of it without micromanaging the
program from Washington. We think it is terrific.
And we did make a few reforms in welfare where we took a look at what
we did last year, and we said if there are some areas where perhaps we
could improve the bill, make it more compassionate, we agreed to do it.
But we did not walk away from the basic commitment that we made to the
American people to end the entitlement program, to make sure that able-
bodied people go to work and to make sure that this program will be run
at the State level.
Now I want to just suggest today that the ability to enact these
programs is really a huge step forward in beginning to address the
problem of what can be generational warfare in this country. We are by
no means at an end. No one who watches this debate should think that
everything is now copasetic. It is not.
We are, in fact, going to have to come back and give people more
power, more flexibility, more control of the resources that they earn
in their lifetime to invest in their own retirement, in a retirement
program called Social Security where hopefully we can preserve that
program and yet let people have more flexibility to earn more money
based on their earnings. We know that there has to be a major overhaul
of the Social Security program that will preserve, protect and
[[Page H4555]]
enhance Social Security. We are going to have to work on a bipartisan
basis in order to guarantee that our children are not consigned to
spending all of their life working to pay our benefits. I think we can
achieve it, and we are going to have to do it together because Social
Security is as American as the flag and apple pie, and we are going to
stand behind it, but we are going to have to improve it, and we are
going to have to innovate it.
In the area of Medicare it is very clear that we are going to have to
move toward a greater voucher system where senior citizens are going to
hold a check and the health care providers in this country are going to
have to compete for the right to provide quality care to our senior
citizens.
{time} 1345
It is one of the answers that I believe will help us be able to deal
with the tremendous influx into the retirement programs of our baby
boomers, and in the area of Medicaid, a lot more reform needs to be
done in Medicaid. Frankly, we have to wonder why we do not create a
system where the baby boomers begin to provide for their own long-term
care.
The gentlewoman from Connecticut is intimately involved in trying to
create a program to really move Medicaid to be a program for the
disabled and the children, and that we need to encourage the baby
boomers in this country to buy long-term care insurance so that we do
not become a burden on our children.
The fact is, we cannot afford a generational war in this country.
What we have done is to take the first step to show the country that we
can, in a responsible way, begin to get a handle on entitlement
programs, balance the budget, transfer power from this city into the
hands of individuals who are the recipients of these programs, bringing
greater innovation, bringing greater imagination to the effectiveness
of these programs by transferring them out of a Washington model and
putting them into the hands of people across the country.
I think that if we can be successful here, we will gain some of the
confidence of the American people that all of us know we must take to
deal with the problems of the next generation; we will gain confidence
and credibility from the public when we take that next difficult, but
clearly exciting step to preserve many of these programs for the
American people.
So today we have so many things that we can be proud of, so many
things that we can be excited about. But this is that step that will
provide for a balanced budget in the year 2002 in a real way.
Mr. Speaker, I reserve the balance of my time.
Mr. SPRATT. Mr. Speaker, I ask unanimous consent to yield 45 minutes
to the gentlewoman from Connecticut [Ms. DeLauro], and that she be
allowed to control and yield that time.
The SPEAKER pro tempore (Mr. Dreier). Is there objection to the
request of the gentleman from South Carolina?
There was no objection.
Mr. SPRATT. Mr. Speaker, I yield myself such time as I may consume.
I cannot pass up the opportunity to observe, as I have before, why it
is we are here at this moment. Five years ago, the date I always pick
as January 13, 1993, just before George Bush left office, his Economic
Report of the President came to the Congress and it indicated,
projected, that the deficit for that year, fiscal year 1993, would be
$332 billion. Within a few months, we passed in the House and in the
Senate and sent to the President a deficit reduction plan, only with
Democratic votes, passed by the skin of its teeth, which sought to cut
that deficit in half over the next 5 fiscal years. The results are a
matter of record.
The deficit fell in fiscal year 1993 to $255 billion, in fiscal 1994
to $203 billion, in fiscal year 1995 to $164 billion, and last year,
September 30, 1996, the deficit was $107.8 billion. Both OMB and CBO
projected that the deficit will be well below $75 billion on September
30, 1997, when we close the books on this fiscal year.
So we can credibly say that we are within reach of a balanced budget
because of what we did at some political expense in 1993. This could be
for many of us, a sweet occasion, a very satisfying moment. Instead, it
is a little bittersweet.
Mr. Speaker, less than a month ago, we passed a budget agreement here
in the House, sent it to the other body and they passed it as well,
that deserved the name bipartisan. Mr. Speaker, 132 Democrats voted for
that agreement, and today, 132 or more would come back to the well of
the House and vote for it again if the budget agreement we made a few
weeks ago were simply carried out, straightforwardly implemented in the
bill that is before us.
Unfortunately, it is not. This bill does not fully realize the goals
that we set out in the balanced budget agreement. It is still a work in
process, very much something that is yet to be realized. That is why
the administration requested us in a letter they sent today to pass a
bill to move the process, not that they are endorsing this bill, but
they endorse the process, because their expectation is that it can be
perfected in conference, which remains to be seen.
Here are just a few of the ways that we have fallen short. The
philosophy of our negotiation was that each side, Democrats and
Republicans, would come out of the negotiation with something that each
of us could claim we had won, some distinct victory. For our part we
chose as a victory education, the President's request for education,
and an initiative in the area of children's health care, another step
toward providing health care for the millions of Americans who do not
have it.
The goal we set for ourselves was to get at least 5 million children
of the 10.5 million children in working poor families who do not have
coverage covered with health insurance. We set aside an earmark $16
billion of new spending resources in this bill in order to accomplish
that.
Unfortunately, the committee of jurisdiction in its mark of this bill
gave us a block grant that provides us no assurance that this $16
billion will reach the children for whom it was intended. CBO has cast
grave doubt as to whether we will even get a fraction of those
children. So we have fallen short of a goal that we all ostensibly
shared and should share, and that is, get at least half of that 10
million children covered. That is why I say this bill needs
improvement.
Next, provisions were added to the bill that were never contemplated,
never discussed in the course of the budget negotiations. In dealing
with welfare to work and with workfare participants, provisions were
added that would deny workfare participants the protections of the
Federal Labor Standards Act, deny them the right to be called employees
and all the rights, benefits and privileges pertinent thereto under
Federal law.
In dealing with the food stamp provision which now requires able-
bodied food stamp beneficiaries between the ages of 18 and 50 to work
in order to get their food stamps, we have provided $1 billion in order
to see to it that 350,000 workfare slots would be available so that
these food stamp participants, if they could not find a job, could at
least get workfare and continue to get their food stamps. We have not
realized that goal in the bill before us.
Then in this bill, which is a must-pass piece of legislation,
everybody knows it is a moving vehicle and it is going on a fast track,
some bitter pills were added by people who are ardent proponents of
various projects that have nothing to do with reconciliation. This bill
contains a new medical malpractice code, a far-reaching innovation for
the Federal Government. I voted for that before. I have actually
written the title, the Rowland-Bilirakis bill that dealt with it, but
there are many Members on my side for whom this is a bitter pill to
swallow. The same goes for the Hyde amendment, which I voted for
before, but many Members on my side simply think it has made the kids'
care bill something that they cannot support until it is removed.
Go down the list; 500,000 MSA's, medical savings accounts, never
discussed in our agreement, never contemplated, and scored by the
Congressional Budget Office not to save money in a bill where we are
trying to shore up and restore solvency to Medicare or shore up and
eradicate the deficit; this will cost the Medicare Program $2 billion
over the next 5 years, an expensive experiment.
So all of this is hard to swallow for Democrats. Some Democrats
today, as
[[Page H4556]]
a consequence, who could be counted on to come to the floor as they did
in 1993, as they did just a few weeks ago, and vote to eradicate the
deficit and balance the budget will be forced to vote no today. It is
not because they do not want to balance the budget, it is because they
think the deal that they supported just a few weeks ago has not been
upheld and has been actually breached.
Some, like me, will vote for the budget reconciliation bill before
us. I vote for it for two strong and substantial reasons. First of all,
as the bill began to emerge from the pipeline of the different
authorizing committees, and we began to note its problems that had to
be corrected and cleaned up, the gentleman from Ohio [Mr. Kasich]
worked in earnest and in good faith with me to work off a list of
things that I thought we could correct here in the House between the
reporting of the budget resolution and the rule that was considered
today. Much of that was accomplished in the self-implementing, self-
executing rule that we passed just a few minutes ago.
In that same spirit of good faith, I am betting that that same
cooperation will continue into conference so that we can, through one
means or another, negotiations with the Senate, the President's veto
threat, whatever the device may be, we can take this work in progress
and bring it back to what it was just a few weeks ago, a bill that we
could call a balanced bill to balance the budget, a bill that is truly
bipartisan, one that we can all vote for.
It is in the hope that we can obtain that objective that I will
support this bill, but I say to all Members of the House, Democrats and
Republicans alike, it is still very much a work in progress and it
needs and requires a lot of work before final passage.
Mr. Speaker, I reserve the balance of my time.
The SPEAKER pro tempore. Without objection, the gentleman from
Connecticut [Mr. Shays] will control the time of the gentleman from
Ohio [Mr. Kasich].
There was no objection.
Mr. SHAYS. Mr. Speaker, I yield 4 minutes to the gentlewoman from
Texas [Ms. Granger].
Ms. GRANGER. Mr. Speaker, I rise in strong support of the first
balanced budget since 1969, the year that Neil Armstrong walked on the
moon. Neil Armstrong's giant leap for mankind is the second thing I
remember about 1969. Mr. Speaker, 1969, the last year the budget was
balanced, was also the year my first child was born. I proudly watched
that young man walk down the aisle to receive his doctor of
jurisprudence just 3 weeks ago. That means my oldest son has not seen a
balanced budget since the year he was born. My twins, born 2 years
later, have never seen a balanced budget in their lifetimes.
Today we can change that. The legislation we consider today will
balance the budget by 2002, if not sooner. Our plan will put the
Federal budget into surplus through the year 2007. This is the most
important thing we can do for our children's future.
But this plan does much more. In addition to helping our children,
this balanced budget downsizes Washington to return power, money, and
decisions back to families, neighborhoods, and communities. As the
mayor of Fort Worth, TX, I learned that local communities need more
power and less mandates from Washington. The balanced budget we will
continue today will reduce Washington spending as a percentage of our
economy to the lowest level since 1974.
This plan keeps our commitment to our parents and grandparents by
preserving Medicare. This balanced budget adds 10 years to the life of
Medicare; it provides our parents with more health care choices, the
same health care choices as their children and grandchildren.
This plan keeps our commitment to education. I taught school for 9
years as a public school teacher, and I learned that there is nothing
more important than education. By eliminating the deficit, a balanced
budget will lower the cost of a typical student loan by nearly $9,000.
College education will be more affordable to young men and women across
this country.
This budget agreement keeps our commitment to future generations by
balancing the budget; to our parents and grandparents by preserving
Medicare; and to America's future by making education for our children
more affordable and available. Let us stand up for America's children,
its seniors and its students and its future and support this balanced
budget agreement.
Ms. DeLAURO. Mr. Speaker, I yield 16 minutes to the gentleman from
Michigan [Mr. Bonior].
Mr. BONIOR. Mr. Speaker, I thank my distinguished colleague from
Connecticut for yielding me this time.
Mr. Speaker, this budget bill that we have on the floor breaks the
deal, and it does so not in one or two places, it does so in about 12
different areas, major areas of law.
{time} 1400
What it also does, this bill and the tax bill we will consider
tomorrow that the Republicans are rushing through this Congress will
spawn the worst economic inequality that Americans have experienced in
the past century. We are experiencing in this country today a situation
in which those at the top are moving further and further away from the
rest of the country.
We can see it. We used to be first in wages and benefits. Now we are
13th among Western developing countries. Eighty percent of the American
people have not had a raise in wages since 1979. The top 20 percent are
doing very well. The difference between the CEO in 1960 and the average
worker was about 12 times difference in salaries. Today it is 209
times. They make 209 times more than the average worker. Now we are
codifying all of that into law today and tomorrow.
The Republican tax bill we are going to deal with tomorrow gives more
benefits to the richest 1 percent of Americans than to the bottom 60
percent combined. The top 1 percent get more than the 60 percent.
Rollbacks in the corporate minimum tax is a $232 billion giveaway. Look
at the chart here. Back in the early 1960's the corporations paid
roughly close to 25 percent of the taxes in this country. It got down
to about 7 percent in 1982.
It was so embarrassing to the Republicans and the rest of the
country, because companies like Texaco and AT&T and Boeing were not
paying any Federal taxes, so we put together a corporate minimum tax.
It started to go up just a little bit since then.
This bill sends us this back down by giving them a $22 billion break;
when we add all of the breaks on capital gains through inflation, $650
billion costs over the period of outyears.
Another point I would like to make is that the Republican tax bill
actually raises taxes on the bottom 40 percent of Americans. It gives
all these breaks to the people at the top, raises taxes on the bottom
40 percent. If the Republicans were not writing this into law, I would
call it robbery.
The second point, the tax and spending bills give giant corporations
the power to create second-class citizens who do not have the same
rights as the rest of us. I ask the Members, is it fair to deny some
Americans their rights under the Family and Medical Leave Act that we
all worked so hard for here, the Equal Pay Act, the Civil Rights
Protection Act, OSHA safety standards?
Is it right to deny a person the ability to defend themselves against
sexual harassment? Is it fair to pay workers on a contract basis,
denying them the minimum wage, health benefits, pension benefits? This
country was founded on the basic principle that we are created equal,
but these bills today and tomorrow say that some people, mostly
families struggling to raise their children, are less than equal, that
they do not deserve the same rights as other Americans. That is not
just a slippery slope, that is a jagged cliff. If all Americans do not
share the same rights, then none of us have them.
The third point, the Republican tax and spending bills violate the
bipartisan budget agreement. Three of the most important violations are
that it reneges on a third of the promised funding for education,
shortchanging particularly students from working families. It also
reneges on health care coverage for 90 percent of the children who will
be covered under the original agreement, and gives this funding to
States with no guarantee that they are going to spend it on kids for
their health insurance.
The agreement called for covering 5 million children, but the
spending bill
[[Page H4557]]
covers only about 500,000, and leaves out 4.5 million children. It also
effectively slashes funding for children's hospitals serving children
from poor and working class families perhaps causing some of these
vital hospitals to shut down.
These bills punish working families and reward the wealthiest and big
nationals. More benefits to the richest 1 percent, and 60 percent of
the rest of the folks, from zero to 60 percent, those benefits equal
the top 1 percent. Is that just? Is that fair? We believe in a balanced
budget, tax cuts for working families, and fairness. We will fight for
that.
Tomorrow, with our tax bill that targets ours to working families,
not the very wealthy in this country, we will fight that, and we will
fight that today when we take on what the Republicans have proposed
here with respect to what we believe is breaking the agreement.
Ms. DeLAURO. Mr. Speaker, will the gentleman yield?
Mr. BONIOR. I yield to the gentlewoman from Connecticut.
Ms. DeLAURO. Mr. Speaker, I thank the gentleman from Michigan for
yielding to me, and want to pick up a couple of points he has laid out
here.
I urge my colleagues to vote against this bill, because in fact it
does violate the bipartisan budget we passed earlier this month. In
particular one of the areas where it is an outrage is what they have
done in the whole issue of health care for children in this country. It
denies working families the help they need to provide health care for
their children. They have violated that very basic tenet of this
agreement. There is no assurance of coverage for at least half of the
10 million children in the Nation today who do not have access to
health insurance.
Children living without health care coverage are hurt in so many ways
in this country. They are less likely to have a family doctor, to
receive preventive care, and they are less likely to have treatment for
serious illnesses. They are less likely to grow up healthy and
productive. The problem is not going away because every day in this
country another 3,300 kids lose their health insurance.
Mr. BONIOR. That bears repeating; every day in this country 3,300
kids in this country lose health insurance because employers are
cutting back these benefits. Where are the kids going to go? This plan
does nothing, nothing for them.
Ms. DeLAURO. I might just add, Mr. Speaker, that the agreement
clearly states $16 billion would be spent to cover half the kids. It
has been estimated by the Congressional Budget Office that the bill
would cover only 520,000 of those 10 million kids. That is coverage of
less than 20 percent of the children who do not have access to health
care today.
I might add that the children who do not have access to health care
today are the sons and the daughters of working families. These are
people whose fathers and mothers are working every single day in order
to protect their kids, and they are without health insurance.
This bill offers no assurance that even one additional child will
receive health care insurance. But what my Republican colleagues have
done is instead they are going to send this money to the States with no
requirement at all that the funds be used to give kids the health care
that they need. There is nothing that says that this money needs to be
used to pay for health insurance for kids today.
The Republicans in fact are turning their back on working middle
class families today. They are going to not allow our youngsters to
grow up healthy and strong.
Mr. DOGGETT. Mr. Speaker, will the gentleman yield?
Mr. BONIOR. I yield to the gentleman from Texas.
Mr. DOGGETT. Mr. Speaker, I voted for this balanced budget agreement.
Mr. BONIOR. I did, too. So did the gentlewoman from Connecticut [Ms.
DeLauro].
Mr. DOGGETT. Really, is not the measure what one would properly call
a wreckonciliation bill, in that it wrecks the balanced budget
agreement?
Mr. BONIOR. I agree 100 percent, in that it wrecks it on a number of
fronts, some of which we have just talked about.
Mr. DOGGETT. Indeed, when we talked about getting a balanced budget
agreement that has true balance, I always thought the idea was that
there would be shared sacrifice, shared burden, but it would appear
that those at the top of the economic ladder now get to share, and
those that are trying to climb up, they just get the burden. Does it
appear that way to the gentleman?
Mr. BONIOR. Mr. Speaker, I think the gentleman is absolutely correct.
We can tell from this graph on the tax piece that the multinational
corporations and giant corporations get a $22 billion break. We are
talking about, as I said earlier, the top 1 percent getting as much in
benefits as 60 percent of the American people, working Americans in
this country. Where is the justice? Where is the fairness there?
Mr. DOGGETT. If there is a family out there, maybe both parents
having to try to work just to make ends meet and at the same time
trying to create a good family environment for their kids. If they work
for someone that does not provide health insurance, this bill, this
wreckonciliation bill, says to them, you have to go forward with no
health insurance, but it says to a giant multinational corporation, can
we cut your taxes a little bit more?
Mr. BONIOR. Mr. Speaker, the gentleman is right, he has got it. That
is exactly where we are headed on this bill here. It is reneging on the
promise that was made over the agreement. It is inequitable, it is
unfair, and puts the burden on those who can least afford to bear it.
Mr. DOGGETT. Indeed, for the ordinary young working families, does
this reconciliation bill really offer them much of anything?
Mr. BONIOR. It offers them virtually nothing.
In terms of the budget, let me just tell my Republican colleagues and
those Members on the floor here, it was in 1993, if we are talking
about offering people a balanced budget, it was Democrats on every
single one of the votes that passed that bill that reduced the deficit
from $300 billion.
It was in 1993 that we passed the balanced budget in this country.
The budget was at about $300 billion. That bill, that was supported by
Democrats only, not a Republican in the House and Senate supported that
bill, brought the deficit down from an annual $300 billion deficit all
the way down to roughly $60 billion this year.
What we are trying to do is maintain that, maintain that progress,
and make it equitable in terms of working Americans. This bill does not
do it. It moves us back in the opposite direction, with huge outyears,
deficits in the outyears, because of what we will see tomorrow in the
Republican bill on taxes by indexing capital gains. It does not
distribute the benefits fairly in this particular bill, as we have
discussed with children's health care, as we have discussed with a
variety of other issues in terms of the workplace.
Mr. DeFAZIO. Mr. Speaker, will the gentleman yield?
Mr. BONIOR. I yield to the gentleman from Oregon.
Mr. DeFAZIO. Mr. Speaker, the gentleman just made the most salient
point there. The cuts today are designed to cut taxes for the largest
corporations in America and the wealthiest. Some of these cuts are
extraordinarily cruel. They cannot be denied by my friends who will
stand on the other side of the aisle: a 20-percent cut in home health
oxygen benefits for seniors, and a freeze to the year 2002.
Let me just read from one constituent, of the many letters I got:
Dixie McNutt, Springfield, OR, my hometown. Dixie says, ``Having oxygen
allows people like me to enjoy the comforts of home and to feel as
though we are still an active part of the family. Without this benefit,
the choice seems to be living at home without breathing, or spending
our remaining days in the hospital, which would cost both Medicare and
the patient much more.''
So today, Congress will cut $2 billion out of home health oxygen
benefits for seniors and the disabled to pay for one-tenth of the
repeal and the gutting of the alternative minimum tax for corporations,
because it will be too much, too much to ask the largest corporations
in America to just pay maybe 5 or 10 percent of their profits in taxes,
a fraction of what working Americans
[[Page H4558]]
pay out of their paycheck every month. This is a travesty. It should
not pass. I stand against this bill.
Mr. BONIOR. I thank my colleague.
Mr. Speaker, what we have here is a replay, really, of the last
Congress. They are taking dollars out of children's hospitals, they are
taking dollars that were intended for children's health insurance
benefits, they are taking benefits away from workers all over this
country, and where are they putting it? They are putting it into taking
care of the biggest corporations in this country and the wealthiest
individuals in this country. It is indeed one of the biggest transfers
of wealth we will see here in many a moon.
Mr. KENNEDY of Rhode Island. Mr. Speaker, will the gentleman yield?
Mr. BONIOR. I yield to the gentleman from Rhode Island.
Mr. KENNEDY of Rhode Island. Mr. Speaker, I think what this
reconciliation bill really does is it shows where the majority party,
the Republican party's, true priorities are. Clearly, their priorities
are not with our Nation's senior citizens, who are now going to get the
cold shoulder because of the MSA accounts that are provided for in this
bill, which basically allows the skimming to be done by insurance
companies, so they can get the healthiest and wealthiest who do not
have to pay the deductible, and be able to target those very healthy
and wealthy people, leaving the poorest elderly, the most frail
elderly, the ones that have the most costs to bear with respect to
that.
In addition to that, the bill also, as the gentleman said, makes sure
that we do not provide the needed investment for health insurance for
children, making sure that all the children in this country get the
necessary health care that they need.
Finally, as the gentleman mentioned, all this does is shift the
burden of our taxes from the top 1 percent of this country to the
bottom 60 percent. I think the gentleman pointed out correctly that, is
it not correct that the tax cut that this reconciliation bill provides
for, including the tax bill, has a tax cut larger for the top 1 percent
than for the aggregate of the bottom 60 percent?
Mr. BONIOR. The gentleman has stated it correctly. The top 1 percent
gets as much as the bottom 60 percent in this country.
Mr. KENNEDY of Rhode Island. While the senior citizens do not get the
necessary health insurance, as my colleague, the gentleman from Oregon,
just mentioned; while children do not get the necessary health
insurance they need, and while legal immigrants still go without SSI,
based upon the Republican discriminatory bill with respect to our legal
immigrants not being provided adequate SSI coverage.
Mr. SANDERS. Mr. Speaker, will the gentleman yield?
Mr. BONIOR. I yield to the gentleman from Vermont.
Mr. SANDERS. Mr. Speaker, let us put this bill into the context of
what is happening in America today. Everybody knows what is happening.
The richest people are becoming richer, the middle class is being
squeezed, and most of the new jobs being created are low-wage jobs.
Given that context, what sense is it that we have legislation under
which 58 percent of the benefits go to the top 5 percent, corporations
see a reduction in their tax burden, while the bottom 40 percent of
income earners see no benefits at all? In other words, we have got this
thing completely backwards. We are helping those people who do not need
help, and we are not helping those people who are in desperate need of
help. Furthermore, under this legislation, Medicare will be cut $115
billion over a 5-year period.
The Vermont Association of Hospitals estimates that will be a $75
million cut from hospitals, rural hospitals all over America who will
be hurt, meaning there will be lower quality health care for our senior
citizens.
{time} 1415
Tax breaks for the rich and the people who do not need it, cuts in
Medicare and a reduction in the quality of health care for our senior
citizens, those people who do need help, I urge a ``no'' vote on this
absurd piece of legislation.
Mr. SHAYS. Mr. Speaker, I yield myself 1 minute, to say that tomorrow
we will be debating the tax bill. As the bipartisan joint tax committee
of Congress estimates, 76 percent of all the benefit goes to people who
make less than $75,000, totally contrary to the facts that have been
shouted out in the last 20 minutes. Ninety-two percent of the benefits
go to people making under $100,000.
We will be debating the tax bill tomorrow. It will be very, very
clear who benefits. We will realize the people who benefit are the
middle class in this country. Today we are debating a spending bill, a
spending bill that allows spending to go up 3 percent a year, that
allows Medicare to go up at 7 percent a year each year, not a cut, a
significant increase.
Mr. Speaker, I yield 2 minutes to the gentleman from Florida [Mr.
Shaw].
Mr. SHAW. Mr. Speaker, I thank the gentleman for yielding me the
time.
It is not necessary to stand here and yell when we have the facts
with us. We definitely have the facts with us.
That is that 76 percent of the tax cuts that we are going to be
talking about tomorrow, tax relief for American families, goes to
families earning less than $70,000.
Now, people listening to this debate would wonder, where in the world
are these figures coming from that are being screamed and yelled on the
floor and all of these graphs and all of this yelling and signs that
are going up? I can tell my colleagues where they came from. Treasury
came up with an archaic formula in which they determine somebody's
wealth by taking the rental value of the home that they own and add it
to their income, the earnings of corporations in which they might own a
few shares of stocks and putting that upon them, the economic value of
their resources such as their automobile. Come on.
Unless the Democrats are going to come out and try to tax that, then
this is an absolutely absurd argument. So let us get some truth here on
the floor. Let us get to the situation where we are not yelling at each
other, that we are simply talking facts. If we are putting that type of
income on top of somebody when we start to try to come up with all
these figures that simply are not true, I think that at that time we
owe it to the American people, we certainly owe it to our colleagues to
get up and say how did we determine that income. We do it by simple
math and by the amount of earnings that people have. The facts are very
clear.
This is the first tax relief the American people are getting in the
last 16 years. There are some Members that are here on the floor
debating that just cannot stand that idea. But I can tell my
colleagues, Democrats and Republicans alike are going to carry this day
and we are going to get the first tax relief for the American families
in 16 years. That will vindicate this debate.
Mr. SHAYS. Mr. Speaker, I yield 2 minutes to the gentleman from
Arizona [Mr. Hayworth], who will point out that taxes went up in 1993
and are going down in 1997.
Mr. HAYWORTH. Mr. Speaker, I thank the gentleman from Connecticut for
yielding me this time.
I am pleased to follow my chairman of the Subcommittee on Human
Resources of the Committee on Ways and Means. I have been listening,
Mr. Speaker, with great interest to the cavalier fashion in which fear
replaces facts on the other side. It is sad to see that happen.
I do not think the point can be made often enough that when you cook
the books, as the liberal minority has done, in the process you
fricassee the facts.
Mr. Speaker, I do not know of anyone, including my friends on the
minority side, I do not know of anyone who pays themselves rent to live
in a house they own. Only in Washington, DC in the desperation of
trying to concoct fear rather than new ideas, rather than joining with
us to decrease the tax burden on working Americans, decrease the size
of government, have a limited and effective government, only in
Washington do we see this kind of math.
To hear the minority whip come up and talk about the balanced budget
taking shape in 1993, I was a private citizen. I know exactly what
happened in 1993, the largest tax increase in American history. It took
a new Congress cutting spending, it took a new Congress coming in and
saying, let us
[[Page H4559]]
reverse the culture of tax-and-spend to take the first fledgling steps
in reducing by $50 billion the size of government to make it limited
and effective.
And the truth of this tax cut, Mr. Speaker, is the following: 76
percent of the tax cuts go to benefit middle-income families, families
making between $20,000 and $75,000 a year for, Mr. Speaker, we realize
that those middle-income taxpayers are exactly that. They are not rich.
They are working Americans. They deserve a break. They will get one.
Mr. SHAYS. Mr. Speaker, I yield 3 minutes to the gentleman from
Florida [Mr. Miller].
Mr. MILLER of Florida. Mr. Speaker, let us get clear what we are
voting on today in the Balanced Budget Act. We are talking about the
spending side of the equation. Tomorrow we are going to talk about the
tax side of the equation. Because tomorrow we are going to vote on
massive amounts of middle-class tax relief. But today we are talking
about the spending side of the equation.
What we are talking about today is reining in the fiscal
irresponsibility and spending that takes place here in Washington. When
I first ran in 1992, I ran because it was a moral issue to me that this
Government was building up an obscene and immoral debt that we were
going to pass on to our children and grandchildren. It was wrong to
build up a debt that today is over $19,000 for every man, woman, and
child in the United States because we just overspend in Washington. The
way we go about solving that problem is reining in the Federal
Government.
I was pleased to be able to serve on the Committee on the Budget with
the gentleman from Ohio [Mr. Kasich] back in 1993 and 1994. As a
minority back then, we introduced a budget resolution that was called
cut spending first because we recognized that is where the problem is.
It is not that we tax too little in this country. It is because we
spend too much. And what this bill is today is $700 billion of
entitlement savings over the next 10 years. It needs to be done in a
bipartisan fashion.
That is the reason I congratulate the gentleman from South Carolina
[Mr. Spratt] and the gentleman from Indiana [Mr. Roemer] earlier who
have always spoken in favor of this bill as a step in the direction for
the final passage ultimately next month. So we have support on the
other side of the aisle. It is too bad that the very liberal wing of
the Democratic Party feels so adamant they need to demagogue that issue
because what we are doing is the right thing for America's children and
grandchildren of future generations to get the spending under control.
One of the very things I feel very positive about in this bill is
Medicare. What we have is a Medicare Program that is going bankrupt. It
will be bankrupt in 4 more years. We need to address this in a
bipartisan fashion, which is exactly what has been done in this
committee. In fact, the Committee on Ways and Means passed it with a 36
to 3 vote. Only three Democrats voted against it. The majority of
Democrats voted for the Medicare position of this bill, because
Medicare has to be preserved, has to be protected, has to be saved for
our senior citizens.
In my district in Florida, Sarasota-Bradenton, Florida area, we have
more seniors than any district in the country. So it is important to me
for all the seniors in my district, I have an 87-year-old mother that
is dependent on Medicare. So we need it for the seniors. But it is also
a big jobs issue in my district with the hospitals and home care
agencies and the doctors' offices, all needing their jobs, depending on
this. So we need to preserve that program and save that program.
How do we go about doing that in this bill? What we do basically is
we slow the rate of spending in Medicare. We slow the rate of spending
so we are going to spend more money every year in Medicare. Right now
we are spending about $5,200 per person on Medicare. In 5 years we will
be spending $6,900 per person on Medicare. What we are going to do is
go after waste, fraud, and abuse and we are going to give more choices
to senior citizens.
It is a good program. I encourage my colleagues to support this. I
hope we get strong support on the other side of the aisle.
Ms. DeLAURO. Mr. Speaker, how much time remains of my time?
The SPEAKER pro tempore [Mr. Dreier]. The gentlewoman from
Connecticut [Ms. DeLauro] has 29 minutes remaining, the gentleman from
South Carolina [Mr. Spratt] has 36 minutes remaining, and the gentleman
from Connecticut [Mr. Shays] has 68 minutes remaining.
Ms. DeLAURO. Mr. Speaker, I yield 1 minute to the gentleman from
Michigan [Mr. Levin].
Mr. LEVIN. Mr. Speaker, three points on taxes. I hope the Republicans
will listen. The 76 percent for families less than $70,000 is based on
5 years, apparently. We have never seen the analysis. I challenge them,
give us a 10-year analysis. They leave out the tax breaks the second 5
years. Give it to us.
Second, Treasury, using the same methods used by the Reagan Treasury
and the Bush Treasury, say two-thirds of the tax cuts under your bill
go to the wealthy, the same method that was used by previous
administrations.
Third, they bust the budget in the outyears. They bust it. So come
here not with phony figures. Come here with the facts and we will
debate them.
Mr. SHAYS. Mr. Speaker, I yield 3 minutes to the gentleman from
Kentucky [Mr. Bunning], who is a member of both the Committee on Ways
and Means and the Committee on the Budget.
Mr. BUNNING. Mr. Speaker, I would like to say to my good friend from
Michigan, he knows full well that the numbers we use are adjusted gross
income numbers and they are factual. And just because Ronald Reagan and
George Bush's Treasury Departments made a mistake, it is no sign that
the Clinton administration has to continue making the same mistakes.
Mr. Speaker, I rise in strong support of the Balanced Budget Act of
1997. I am especially proud of the Medicare reforms in this bill, about
a 7-percent increase over the 5 years, each year. Since Republicans
took control of Congress, we have been working very hard to preserve
and strengthen and protect Medicare.
The bill before us today does save Medicare from bankruptcy for at
least the next 10 years and gives us time to figure out a long-term fix
for the problem. But I think the most exciting part of this package is
that it gives seniors more choices in picking the health care plan that
best fits their needs.
I know some of the seniors like what they have right now. They do not
want to change a thing. Fine. They do not have to move off Medicare
part A or part B. They can simply do what they have been doing. But if
they want to change, seniors will now be able to shop around for a PPO,
an HMO, a medical savings account, another health care plan that covers
something that Medicare does not cover right now like prescription
drugs or eye glasses. And it will be paid for by Medicare. They might
even be able to choose a new policy that allows them to get rid of
Medigap supplemental plans that they are paying extra for right now.
In rural States like Kentucky, where folks sometimes do not have as
many health options, this bill enables doctors and hospitals and other
providers to band together to set up provider service networks to give
seniors even more choices. Letting seniors choose, forcing health care
providers to compete for their business are the keys in this Medicare
reform package. This holds down the cost and saves enough money to keep
Medicare going for years.
Of course, we also save a lot of money by making other important
changes like reforming the medical malpractice rules and cracking down
on waste, fraud and abuse.
{time} 1430
But by empowering seniors, by giving them more choices, we take the
biggest strides towards reforming and saving Medicare. By exercising
the power to choose, seniors themselves will do most towards saving
Medicare; they, not the Washington bureaucrats, will control their own
futures.
I urge support of this bill and all the good things in it.
Ms. DeLAURO. Mr. Speaker, I yield myself 10 seconds. I think it bears
merit to remember that it was the Republican majority in this House
that wanted to cut the Medicare Program by $270 billion to pay for a
tax break, $245 billion for the richest people in this country. It was
the President and the people of this country that said no.
[[Page H4560]]
Mr. Speaker, I yield 2 minutes to the gentlewoman from New York [Mrs.
Lowey].
Mrs. LOWEY. Mr. Speaker, I voted for the budget agreement approved
last month because I do believe that our Nation must have a balanced
budget that protects our priorities and respects our values. But,
unfortunately, the Republican leadership did not even wait for the ink
to dry on the deal before changing it.
In fact, the bill before us violates the budget deal in several
critical ways. First, it fails to provide basic assistance to legal
immigrants, which means that 16,000 elderly and disabled legal
immigrants in New York will have the safety net cut out from under
them.
The bill cuts more than $12 billion from hospitals and other health
care providers in New York, and the children's health program fails to
provide coverage for more than 4 million children. It denies American
workers basic workplace protections, and it will hurt seniors and their
families who depend on quality nursing care.
And this bill violates the basic reproductive rights of American
women. Tucked away in the fine print of this legislation is an extreme
provision, the Hyde amendment, that would permanently, for the first
time, prohibit the use of Federal funds for abortion. This punitive
prohibition would prevent millions of lower income women from obtaining
vital reproductive health services and would personally create a two-
tiered health care system.
We must not allow this to occur. Federal health programs must cover
the full range of reproductive health care services, including
abortion. This abortion restriction was not in the budget deal, and it
should not be in the budget bill. We must not allow the Republicans to
use the budget process to enact their radical anti-choice agenda.
Again, the abortion restriction was not in the budget deal; and,
therefore, it should not be in this budget bill.
I urge a ``no'' vote on this legislation.
Mr. SHAYS. Mr. Speaker, it is my pleasure to yield 3 minutes to the
gentleman from Oklahoma, [Mr. J.C. Watts].
Mr. WATTS of Oklahoma. Mr. Speaker, I rise in support of the Balanced
Budget Act of 1997. We have a historic opportunity to come together in
a bipartisan fashion and deliver on our promise to the American people
to have a balanced budget by the year 2002.
As we debate this today, there are going to be people on the left and
right arguing and bickering about programs that they want added or
taken out, but we cannot allow this to divert our attention from the
big picture. This is the first balanced budget in over 30 years. And it
is interesting, it is the first tax cut in 16 years; and it is even
more interesting that Tiger Woods was 5 years old the last time we had
a tax cut.
We always hear, and we will continue to hear today, that the rich are
getting the tax breaks. Let me tell my colleagues, as it has been said:
76 percent of our tax cut goes to people making from $25,000 to $75,000
a year. Let me tell my colleagues: Somebody making $75,000 a year in
America that has two kids, they are working from paycheck to paycheck,
trying to meet their monthly responsibilities.
We keep hearing that we are getting tax cuts for the wealthy
industries, wealthy businesses in America. Over 90 percent of the
businesses in the Fourth District of Oklahoma employ six people or
less. These people are raving about this budget deal because they know
they are going to get some relief from the ridiculous tax policies,
these repressive and aggressive tax policies that we passed over the
last 25 or 30 years.
When I came to Congress, I promised the people of the Fourth District
of Oklahoma I would work to make Government live within its means, just
like all the working families in Oklahoma and across the Nation must do
every month.
I have five kids who I am trying to teach how to be responsible, and
I know they are always watching their dad to try to see if he practices
what he preaches. So today, when I cast my vote for fiscal
responsibility and balancing the budget, I am showing my kids that I am
serious.
Balancing the budget is the right thing to do. And if every Member in
this Chamber does not vote to balance the budget because it is the
responsible thing to do, then do it for your children so they will not
have to inherit an America as pathetic as it is today, where you have
got working families paying from 48 to 52 cents of every dollar they
make in some Government tax or Government fee. Do it so the 5- and 6-
year-olds out there will not have to spend 80 to 84 cents of every
dollar they make in some type of Government tax or Government fee by
the time they are 25 years of age.
My father taught me at an early age that you cannot spend out more
money than you take in, and he said this: If your outgo exceeds your
income, then your uplift will come to a downfall. That is pretty good
advice to remember as we debate the balanced budget here today. It is
advice I must follow in teaching my kids.
Friends, I urge everyone to support this balanced budget. It helps
control runaway Washington spending, saves Medicare. Only in
Washington, DC could an increase be a cut. It saves Medicare. We
increase Medicare spending and provide much-needed tax relief for
working families.
Ms. DeLAURO. Mr. Speaker, I yield 3 minutes to the gentleman from
Missouri [Mr. Clay].
Mr. CLAY. Mr. Speaker, I am not sure that there is a term in the
vocabulary adequate to describe my level of disgust with this bill. The
Republican majority began this process with proposals reported out of
the Committee on Ways and Means and the Committee on Education and the
Workforce that represented the most pernicious assault on the working
poor I have witnessed as a 29-year Member of this body.
In response to the chorus of outrage that rang out against those
proposals, the majority fabricated window dressing to make their
proposals seem more moderate. But this new manager's amendment,
rewritten by the Committee on Rules late last night, remains unfair,
immoral and unconscionable.
Mr. Speaker, I have three fundamental objections to this bill. First,
it establishes a new class of workers who would be treated like
indentured servants without coverage under the landmark worker
protection and civil rights laws. Second, it concocts a scheme of
watered-down grievance procedures and remedies that would render
millions of workers unprotected from discrimination and exploitation.
And finally, Mr. Speaker, it endangers the job security and financial
well-being of millions of current public sector employees by
establishing a weak set of nondisplacement protections.
Here is why this proposal treats poor workers like second-class
Americans. It denies so-called community service participants employee
status and purports to use the old CWEP Program as precedent. But that
program was quite different from the workfare program established in
this proposal. Whereas that program had a strong training element, the
community service program established by this proposal is work, pure
and simple.
Community service workers will be employees in every sense of the
term. They will sweat like other workers, their children will get sick
just like the children of other workers. And these workers have dreams
and aspirations for their families just like other workers.
But this proposal says no, they are not the same and they do not
deserve full respect and dignity. Although they will be employed to
perform the same tasks performed by other workers, these welfare
workers will be denied the protection of the Fair Labor Standards Act,
the Occupational Safety and Health Act, the Family and Medical Leave
Act and the many other important Federal laws. And those employed by
nonprofit private sector employers will be denied the right to organize
or bargain collectively.
The grievance procedures established in the rewritten proposal are a
house of courts, substantially weaker than protections adopted by the
Republicans on the Committee on Education and the Workforce. There is
no provision to ensure that the grievances will be fairly heard and
adjudicated. In a real blow against due process, there is no appeal
from what may well turn out to be a kangaroo court.
Here is an example of how outrageous these grievance procedures are.
A woman who has been sexually harassed may be required to seek redress
from the very agency
[[Page H4561]]
where the harassment occurred. Under this proposal that woman would not
be entitled to a fair hearing, or the right to appeal an adverse
decision. What have poor women done to deserve such indignity?
Finally, protections that were included in the education and work
force proposal to ensure that community service workers are not used as
pawns in a ploy to displace existing workers have been gutted by the
manager's amendment. As reported by the Committee on Education and the
Workforce, a welfare worker could not be assigned to an equivalent job
if another individual was on layoff status. That protection has now
been effectively stripped. As reported by committee, a welfare worker
could not be assigned to a job if a consequence of that assignment was
the partial displacement of an existing worker. Those protections have
also been deleted.
Mr. Speaker, this legislation is nothing short of a bill of
exploitation that will leave workers more vulnerable to racism, sexism,
and unsafe workplaces. Rather than encouraging work, these provisions
demean workers. I urge its resounding defeat.
Mr. SHAYS. Mr. Speaker, I yield 3 minutes to the gentleman from Texas
[Mr. Archer], chairman of the Committee on Ways and Means.
Mr. ARCHER. Mr. Speaker, I thank the gentleman from Connecticut [Mr.
Shays] for yielding me the time.
Mr. Speaker, today marks a great and a historic day. We are poised to
vote on a matter that unites Americans from all generations. We stand
ready to vote on a bill that brings the American people together like
no other legislation before us.
With this vote, we can balance the budget to save the next generation
from the crushing burden of debt, and we can save Medicare from
bankruptcy so this generation of seniors can live their retirement
years in peace, comfort, and security. It is high time that Washington
put the needs of the American people first, and that is what we will do
with this vote.
This legislation is bipartisan. Our plan to save Medicare was
supported in the Committee on Ways and Means by a 36 to 3 vote. We came
together, like the American people want us to do. We will save Medicare
by giving seniors choices, by fighting fraud and abuse, and we even
expand Medicare's benefits to include new preventive programs that
seniors, particularly women, need and deserve.
We help people move from welfare to work by reinforcing the central
message of last year's welfare reform law: If you are able to work, you
should work. Welfare should not be a way of life. Yes, we made changes
in last year's law. Many of the changes were requested by the
President. But I am proud to say we uphold our Nation's values by
helping people earn a paycheck instead of a welfare check.
I am particularly pleased that with this bill we will finally have a
balanced budget. My 12th grandson was born last year, a little 2-pound
premature baby. And when I looked at him in that incubator, I realized
that when he grows up, his pro rata share on the national debt would be
$189,000 during his lifetime.
It is unconscionable for our generation to leave that to our children
and our grandchildren. And, for once, we will finally move toward a
balanced budget and stop this continued increase in debt service
charges for future generations.
Mr. Speaker, I yield back the balance of my time.
Ms. DeLAURO. Mr. Speaker, I yield myself 10 seconds.
Mr. Speaker, the fact of the matter is that this spending bill takes
away hospitals and nursing homes, reasonable and adequate
reimbursement. Medicare solvency comes up 2 years short of the budget
agreement. And there are deep cuts in the disproportionate share which
adversely affect hospitals across this country. We are not improving
the health of people in this country.
Mr. Speaker, I yield 2 minutes to the gentlewoman from New York [Ms.
Velazquez].
(Ms. Velazquez asked and was given permission to revise and extend
her remarks.)
Ms. VELAZQUEZ. Mr. Speaker, today we will vote on the Republican
spending bill. The Republicans will say that this is a middle-class
budget. Do not believe it for a minute.
In fact, the Republicans are financing tax cuts for the rich by
waging war on working families and legal immigrants. And when they talk
about a balanced budget, they do not finish the sentence. They should
add that they are balancing the budget on the backs of legal immigrants
and working families in our country. Not only that, but they are
violating the terms of an agreement that they made to the President,
the Democrats, and to the American people.
The Republican tax plan will give $27,000 in tax breaks to the
wealthiest 1 percent. At the same time, they want to eliminate benefits
to legal immigrants who become disabled in the future. These are people
who have worked hard, raised families, and paid taxes. These are
American values and they are values that immigrants to this country
hold dear to their hearts.
Disability benefits are not handouts. How many times do we have to
say this?
{time} 1445
This is an issue of basic fairness. This budget agreement creates a
huge double standard that will permit immigrants to be treated like
second-class citizens. Why? To pay for huge tax breaks for the wealthy.
Is that what this country is all about? Is that how a just society
treats its elderly who become disabled? Is that the message to send to
the rest of the world?
Mr. Speaker, this budget is really a disaster. It is cruel, it is
unfair, and the American people will not stand for it.
Mr. SHAYS. Mr. Speaker, I ask unanimous consent to allow the
gentleman from California [Mr. Thomas] to control and yield as he may
choose the next 12 minutes of our time.
The SPEAKER pro tempore [Mr. Dreier]. Is there objection to the
request of the gentleman from Connecticut?
There was no objection.
Mr. THOMAS. Mr. Speaker, I yield myself 2 minutes.
Mr. Speaker, as we carry on what I guess passes for normal debate
around here, I think we probably ought to pause for just a moment and
not let our partisan juices flow quite as freely as they do sometimes,
because quite frankly, the Medicare provision in this bill is
remarkable. It is remarkable for a number of reasons, but I think
primarily because it sets a standard for what I believe ought to be the
way in which we work public policy.
The Medicare Program is as important as any policy that the Federal
Government has. It is more important than cheap partisan shots. Trying
to resolve one of the more difficult problems that faces all of us and,
more importantly, the seniors in this country is important.
I think we have all come to the general agreement that people will
consume as much health care as other people are willing to pay for. If
in fact that is true, and I think we believe it is, our Medicare
Program is clearly in trouble. Bankruptcy was facing it: With an
antiquated and out-of-date delivery system, especially with the rapid
changes that are occurring in the private sector health care delivery
system and the fact that some of the programs that we offer are as old
as the bureaucracy that structured it; that is, we wait until people
are sick before we deal with the problem instead of moving aggressively
into preventive care and wellness.
This measure, passed by the Committee on Ways and Means and by the
Subcommittee on Health, unanimously by the Subcommittee on Health,
moves, I think, aggressively in the area of prevention, aggressively in
the area of wellness, aggressively to address the question of
bankruptcy, and aggressively to open up the system to a choice for
seniors.
Mr. Speaker, I yield 2 minutes to the gentleman from California [Mr.
Stark]), the ranking member of the Subcommittee on Health.
(Mr. STARK asked and was given permission to revise and extend his
remarks.)
Mr. STARK. Mr. Speaker, I want to say on behalf of myself and many of
the committee's Democrats that we would like to commend the gentleman
from California [Mr. Thomas], the full committee, and the Subcommittee
on Health's staff director Chip Kahn for an open and consultative and
bipartisan approach to the Medicare legislation. It is really a model,
I suspect, of how the legislation should be written.
I am not sure I can quite make myself say that it is a model of
legislation, but it was done in a tradition of
[[Page H4562]]
past Medicare bills. It extends the life of the Medicare trust fund to
2007, it makes reforms in the way we pay providers, and it indeed adds
some beneficiary improvements. I do not intend to vote for the budget
bill, but it is not because of the Medicare portion. If anybody was
thinking of that, I would dissuade them otherwise.
There are some things we should strongly oppose and do differently.
We should oppose the Senate's provision to raise the age to 67, which
causes more problems I think than it solves. I think we should oppose
the Senate's copay provisions because we already charge Tiger Woods on
$10 million, $300,000 a year for the same premium that somebody at
$10,000 a year would pay $300 for and get the same benefit. Why punish
Tiger Woods twice?
The managed care provisions need consumer protections on emergency
appeals, and there are some antifraud provisions that we should add. We
are going to see a report in the next few weeks that we are spending
$20 billion, I think, on fraud. That needs to be improved. We can do
that.
Mr. Speaker, I would urge my colleagues to applaud the work that was
done. I would not have picked $115 billion as a cut, but that was the
number given to our subcommittee and, considering that, they did a fair
job of spreading those cuts to do the least amount of harm. Nobody
liked it. If anybody had been smiling in the room, we probably would
have had the wrong bill. But it was a good job, and I commend the
chairman of the subcommittee for his work.
Mr. THOMAS. Mr. Speaker, I yield 2 minutes to the gentlewoman from
Connecticut [Mrs. Johnson], a valuable member of the subcommittee.
Mrs. JOHNSON of Connecticut. Mr. Speaker, let me commend the
gentleman from California [Mr. Thomas] for bringing forth a very
thoughtful, constructive and bipartisan bill out of the subcommittee.
It meets the goals of the budget resolution of extending the life of
the Medicare Trust Fund until 2007, but it also makes sound structural
changes to better control costs in the Medicare Program which will be
especially important when the baby boomer generation begins to retire
in 2010.
It increases spending per Medicare beneficiary from $5,480 this year
to $6,911 in 2002. Most importantly, it gives Medicare recipients
better choices of the kind of insurance coverage they want to select.
It gives better choices and it gives better benefits. It has a good,
solid preventive package, annual mammograms, comprehensive testing
opportunities for prostate cancer, and adopts the prudent layperson's
standard for emergency room care. So it guarantees access to emergency
room care.
It also guarantees seniors who want to try a managed care plan that
they can go back to not only Medicare but to their MediGap policy,
thereby guaranteeing them the opportunity to try the kinds of plans
that will provide far more benefits for the Medicare dollar.
Finally, it strengthens the protection for those who choose Medicare
by strengthening the consumer protection package that governs Medicare
managed care plans, providing more timely appeals procedures and in
other ways strengthening those benefits. Equally importantly, it
provides the opportunity for direct providers of services, doctors and
hospitals, to get together and provide a managed care plan for the
seniors in their area, a plan in which the medical decision will be
totally controlled by the medical providers. This will guarantee better
quality in all managed care systems, whether they are provider
sponsored or whether they are insurance company sponsored. This is a
giant step forward for health care for seniors in America.
Mr. SPRATT. Mr. Speaker, I yield 3 minutes to the gentleman from New
York [Mr. Rangel], the ranking member of the Committee on Ways and
Means.
(Mr. RANGEL asked and was given permission to revise and extend his
remarks.)
Mr. RANGEL. Mr. Speaker, this is one of the most important periods, I
think, in our Nation's history, because it gives us an opportunity to
reflect who we are and what made this Nation so great. I think the test
is, how do we who are newcomers to this continent treat those who are
even more new? As we move into world trade, our greatest asset is the
diversity, because with the exception of the Native American, we have
the benefit of all of the cultures of the entire world in this great
country, and I am fortunate to have a lot of it in my great city of New
York.
How many of my colleagues just enjoy thinking about how generations
ago, from whatever country, whether it was in Europe or some other
country, we had relatives who came to this country, many not with a lot
of education or a lot of wealth but they came with a lot of hope. Many
of them came illegally because we did not have the sophisticated way of
checking. But we are not looking for them. Because those who came had
on the docks people who came before them waving and screaming saying
that these people are going to make a contribution to this great
country. Even those of us who came in chains are saying, ``This is a
great country.'' Even the Native Americans are not asking to leave. It
is a great country.
But with each wave that came, there was some group of people that
wanted to hurt them. Ask the Jews, ask the Polish, ask the Irish. Ask
the Italians. There was some group that came here that said the next
group was not good enough. Because we Americans are so good in our
thinking, we do not ask who was that group that was stamping the hands
of those people who were climbing into America to become great
citizens, but today the other side has put for the record who they are.
We are now saying if you come to this country, play by the rules,
come in and you were working, coming in you had a sponsor, you did
everything right, the sponsor died, you got old, you had an accident,
we are saying, ``You didn't come when our parents or grandparents came,
so now we're changing the rules.''
My colleagues are not changing the rules by this Congress for the
United States of America, and my President, who represents Republicans
and Democrats, today's history and tomorrow's history, is going to say,
``We're not going to change these rules to save a couple of dollars to
throw into capital gains indexing.'' What we are going to do is to make
certain that anyone who wants to come to this great country will be
able to come with the same rules and the same protections as for those
who came and made this Nation so great.
Mr. THOMAS. Mr. Speaker, I yield myself 15 seconds. For the record, I
would like to indicate that the gentleman from New York [Mr. Rangel]
did support the Medicare section of the provision coming out of the
Committee on Ways and Means and his remarks were focused on other
portions of the bill. I am sure Members understood that.
Mr. Speaker, I yield 2 minutes to the gentleman from Nevada [Mr.
Ensign], a very valuable member of the subcommittee.
(Mr. ENSIGN asked and was given permission to revise and extend his
remarks.)
Mr. ENSIGN. Mr. Speaker, I especially want to compliment the
gentleman from California [Mr. Thomas], the chairman of the
subcommittee, for all the great work that he has done, as well as the
staff for the work that they have done on this Medicare bill.
I think that this is truly an historic moment in health care in the
United States, because what we are doing with this Medicare bill is to
try and begin to change our current sick care system. Yes, I said sick
care system, because right now if you get sick, we will pay providers
to get you better, but we will not pay providers very often to keep you
healthy.
This Medicare bill, by providing the bill that I sponsored in the
House of Representatives, the annual mammogram screening for women over
65, begins to say, we are going to catch breast cancer early in women
over 65. Right now Medicare only pays for every other year mammograms.
This is an important first step. But we also cover prostate screening,
colorectal screening, and we begin to do some things about keeping
diabetics healthier.
I also have a bill, it is called the Medical Nutrition Therapy Act,
which we are going to study. We think that dieticians counseling people
on nutrition will be able to keep diabetics, cancer patients, heart
patients and many others healthier in the years to come
[[Page H4563]]
to truly make this a true health care system.
Another portion of the bill that I am extremely proud of is the
portion that deals with military retirees. Military retirees in the
past have had access to great quality military medical care across the
country, but because of base closure commissions that have locked
military retirees out of facilities all over the country, military
retirees are now being locked out of good quality medical care. And
because when they turned 65 they had to choose whether to go into
Medicare or not, many of them were promised lifetime health care and
that promise has been taken back. Now if they choose to go into
Medicare, there is a 10 percent penalty per year for them to go into
Medicare. This bill will give them a 6-month window to get into
Medicare. This is going to affect 100,000 of the people that so richly
deserve a good quality health care system in this country.
Ms. DeLAURO. Mr. Speaker, I yield 2 minutes to the gentleman from New
Jersey [Mr. Menendez].
(Mr. MENENDEZ asked and was given permission to revise and extend his
remarks.)
Mr. MENENDEZ. Mr. Speaker, I voted for the bipartisan balanced budget
agreement. I had great hopes of transcending pointless ideological
bickering and producing a model of consensus. But this bill is not the
deal Republicans made with the President. The Republican budget bill
weakens protection for workfare workers against race, sex, ethnic, and
religious discrimination. It creates a two-tiered workplace with a
permanently disadvantaged underclass. It does not protect legal
residents. It endangers children's hospitals and those serving a
disproportionate share of the poor and uninsured.
{time} 1500
It slashes support for 2.7 million disabled people, and it destroys
individual rights to recovery for medical malpractice.
These are radical changes. These adventures in radicalism were never
in the bipartisan budget agreement, and they are not needed.
I hope my New Jersey colleagues know that this legislation will
devastate New Jersey hospitals who have continued with their mission to
treat all who enter their hospitals' emergency rooms or clinics
including the indigent and uninsured. And it would send some of them
into bankruptcy.
New Jersey is prepared to accept its share of the national burden in
the name of a balanced budget, but this bill treats New Jersey and its
hospitals in an inequitable manner. It punishes New Jersey for
demonstrating a commitment to providing a lifesaving safety net for its
most vulnerable residents.
As my colleagues know, according to the National Center for Children
in Poverty, over 120,000 children under 6 years of age in New Jersey,
17 percent live in families with incomes at or below the poverty level,
and yet under this agreement New Jersey is one of the States that
receives a disproportionately smaller share of the block grant.
Finally, this proposal leaves out a legal immigrant who has a stroke,
becomes paralyzed, contracts Alzheimer's disease after August of last
year. It eliminates the safety net for law-abiding, hard-working,
taxpaying elderly legal immigrants.
Mr. Speaker, it is a deal breaker. Let us not have a deal for the
sake of a deal. Let us have a deal that is also balanced on the
principles.
Mr. THOMAS. Mr. Speaker, I yield myself 30 seconds.
I tell the gentleman from New Jersey [Mr. Menendez] that we have sat
down with the Members from New Jersey. We believe we have addressed
that problem. We have solved that problem just as we solved other
problems, in concert with the gentleman from California [Mr. Stark],
the gentleman from Maryland [Mr. Cardin], the gentleman from Wisconsin
[Mr. Kleczka], the gentleman from Georgia [Mr. Lewis] and the gentleman
from California [Mr. Becerra]. Those are the Democratic members of the
Subcommittee on Health who voted unanimously in support of the work
product in front of us.
Mr. Speaker, I yield 1 minute to the gentleman from Minnesota [Mr.
Ramstad], a member of the Committee on Ways and Means.
(Mr. RAMSTAD asked and was given permission to revise and extend his
remarks.)
Mr. RAMSTAD. Mr. Speaker, as a member of the Committee on Ways and
Means I am grateful for the bipartisan pragmatic way in which we put
together the Medicare portion of this bill before us today. Not only do
we save Medicare from bankruptcy today, we preserve it for tomorrow's
seniors.
I would like to focus briefly on the two specific reforms in the
bill. One is a reform to make the AAPCC reimbursement formula, the
Medicare reimbursement formula, more equitable to States like
Minnesota. This is a major reform in the formula. It will mean more
equity for States with rural populations and more health care options
for Medicare beneficiaries in those States. For the first time there
will be a payment floor and a blended formula to bring more fairness
and equity to seniors in States like ours.
We also continue to develop new and innovative ways to provide health
care to seniors by extending for 2 years the community nursing
organization demonstration project. These are very, very important
projects again to let seniors live in their own homes longer and also
to save important Medicare dollars. This is a vital program for
seniors.
Mr. Speaker, I urge all members to support this important
legislation.
Ms. DeLAURO. Mr. Speaker, I yield 2 minutes to the gentlewoman from
Michigan [Ms. Stabenow].
Ms. STABENOW. Mr. Speaker, I rise having voted for the balanced
budget agreement and I intend to support a balanced budget agreement on
spending and tax cuts that reflects that agreement. Unfortunately, that
is not what we have in front of us today.
There are good provisions, there has been good work done, and
description has been made of bipartisan efforts in the area of Medicare
and other important areas where work had been done and been done well.
But this reminds me of the flood bill that was in front of us not long
ago where we set down a road to solve a problem, to help people who had
been afflicted by floods, and there was good work in the bill. Then
piece after piece other things that were added that had nothing to do
with the flood bill slowed down the process and almost stopped our
ability to achieve the goal.
We have today something in front of us that has all kinds of extra
provisions in it that were not in the balanced budget agreement. They
take away from our ability to step forward and meet that agreement, and
they do not include those things that were promised in that agreement
such as making sure that children of working families, 5 million
children, have adequate health care. But they do include all kinds of
other provisions that have been thrown in and all kinds of other
subjects.
So once again the public expects us to step up and solve the problem
and to work together, and then one after another things get thrown in,
and we are right back to where we started from without having the
support needed to be able to solve the problem.
In voting ``no'' today I am very hopeful that a message will be sent
to those working in the conference committee to take out those things
that were not part of the balanced budget agreement, make sure that the
provisions that are in there make sense for families, and then let us
in a bipartisan way do what it is the American people ask us to do.
Mr. THOMAS. Mr. Speaker, I yield myself 15 seconds, and I tell the
gentlewoman who just spoke that as a matter of fact, if she will
examine the budget agreement in the area of children's insurance, the
16 billion which was required is part of the agreement; we met the
agreement in that area.
Mr. Speaker, I yield 1 minute to the gentleman from Illinois [Mr.
Weller], a valued member of the committee.
(Mr. WELLER asked and was given permission to revise and extend his
remarks.)
Mr. WELLER. Mr. Speaker, I rise in support of this important
legislation.
First, I want to commend the gentleman from California [Mr. Thomas]
and the ranking member, the gentleman from California [Mr. Stark] for
their bipartisan effort. The bottom line is this legislation saves
Medicare, and if my colleagues care about Medicare and if they want
Medicare to be around for the next generation of seniors, they will
vote ``yes'' for this legislation.
[[Page H4564]]
I am proud that the Committee on Ways and Means under the leadership
of the gentleman from California [Mr. Thomas] has worked closely with
the President, with Members of both parties, to fashion a bipartisan
solution to extending the life of Medicare. This legislation gives
seniors more choices, protects the rights of seniors to choose their
own physician and, frankly, offers many new options, new types of
coverage, strictly in the area of breast cancer, mammograms for
seniors, for women, as well as prostate cancer screening for men,
important health care initiatives.
But there is also something that every senior brings up every time I
have a senior meeting in my district: this issue of going after waste,
fraud, and abuse in Medicare, and frankly I believe it is time that we
go after the Medicare kings, those who abuse Medicare, with the same
vengeance we have the welfare queens in the past. This legislation
toughens penalties, provides ``three strikes, you're out,'' and
increases funding for Medicare.
I urge an ``aye'' vote.
Ms. DeLAURO. Mr. Speaker, I yield myself 10 seconds.
I would like to mention that with regard to health care for children,
what we find out from the Congressional Budget Office is that the
estimate of that $16 billion, is that only 520,000 kids of the 10
million will be covered. The rest are not covered, that 20 percent of
the children who do not have access to health care today.
Mr. Speaker, I yield 2 minutes to the gentleman from New York [Mr.
Hinchey].
Mr. HINCHEY. Mr. Speaker, I must say that there is no balance in this
plan that we are being asked to vote on this afternoon, nor does it
balance the budget because it has to be seen in the context of the
taxing bill that follows hard on its heels. These two bills in concert
increase the budget deficit; they do not decrease it.
In fact, shortly into the next century the budget deficit will once
again be approaching $100 billion under the Republican plan. Now is
this being done by accident? I doubt it. They are doing it
intentionally in order to create a circumstance where this Government
can no longer afford to pay for the social programs like Medicare and
Medicaid and Social Security, just as they tried to do in the 1981 tax
cut. That will be the effect of it. Just when the baby boom generation
reaches its retirement age, that is when the big deficits kick in under
this plan.
The fact of the matter is that the budget today is almost in balance.
We have reduced it over the last year some $290 billion, down now to
about $50 billion, and if we left the present policies in place, the
budget would be in balance shortly.
This bill that we are asked to vote on today is a bill that creates
class warfare. It does so by creating those big budget deficits, and it
also repeals the social contract for a large number of Americans. It
destroys the dignity of work, and it creates a new under class for the
first time. That is the extent to which this bill goes in its class
warfare by actually creating a new under class of people, people who
will be denied the rights of other workers.
Protection under the Fair Labor Standards Act, they will not have
that protection. They will not have the protection of equal pay, they
will not have protection under the civil rights law, they will not have
the protection under OSHA, and they will not have protection from
sexual harassment in the workplace.
Finally, what does it do for health care for children, as we have
heard so often this afternoon? It does not provide care for 5 million,
only for 500,000.
This is a bad bill and has bad implications now and for the future.
The SPEAKER pro tempore. Before the gentlewoman proceeds, the Chair
wishes to inform the managers of the bill that the gentleman from
Connecticut [Mr. Shays] has 47\1/2\ minutes remaining, the gentleman
from South Carolina [Mr. Spratt] has 30\1/2\ minutes remaining, the
gentlewoman from Connecticut [Ms. DeLauro] has 17\1/4\ minutes
remaining, and the gentleman from California [Mr. Thomas] has 1 minute
remaining.
Ms. DeLAURO. Mr. Speaker, I yield 2 minutes to the gentlewoman from
Oregon [Ms. Furse].
Ms. FURSE. Mr. Speaker, I supported the budget agreement, and the
bill that is on the floor does not contain some of the provisions which
I thought were very good and which led me to support the legislation in
the Committee on Commerce. And those good provisions are, it extends
preventive benefits for Medicare beneficiaries, including diabetes
self-management training and blood strips, very important. It increases
services and benefits in rural areas, and there is an extension here
for States which are operating Medicaid demonstration projects under
section 1115 waivers.
However it seems to me that we live by a rule which is that a deal is
a deal and fair is fair, and there are things in the bill today which
were not in the budget agreement, and I do not think that they are fair
for all of our citizens.
One of the things it does is it sets up a two-tiered class of workers
by defining that workers who receive welfare are not protected against
race, sex, national origin, and religious discrimination, and that is
just not fair. It undermines a woman's right to choose by taking the
right to choose from poor women, those on Medicaid, and taking from
them rights that other women have in this country. I do not think that
is fair either.
Then it fails to protect legal immigrants who may become disabled
after the welfare bill was signed into law. Mr. Speaker, that is not
fair either.
It is my hope that the conference committee will strike the unfair
provisions and ensure that the budget agreement is honored so that
those of us who supported the budget agreement can indeed support a
balanced budget and one which is fair and where the deal stays a deal.
Mr. SPRATT. Mr. Speaker, I yield 2 minutes to the gentlewoman from
California [Ms. Roybal-Allard].
Ms. ROYBAL-ALLARD. Mr. Speaker, today we are debating a budget
spending bill that violates the budget agreement and takes away some of
the hope and promise built into the original agreement. First, the
President and congressional leaders guaranteed $16 billion in health
care coverage for 5 million uninsured children in our Nation.
{time} 1515
The bill before us takes away that guarantee and creates a large
block grant that could result in untargeted revenue sharing. In other
words, the money does not have to be used to cover uninsured children.
Second, welfare reform was to provide a way for able-bodied adults to
earn a living and free themselves from the dependency of welfare.
Instead, this bill stigmatizes them and strips them of their self-
esteem by eliminating workplace protections enjoyed by other American
workers, protections such as overtime pay, OSHA, and the Civil Rights
Act that protects working Americans from employment discrimination and
sexual harassment.
This is a frightening thought when we consider that the majority of
welfare-to-work recipients will be women, the most vulnerable to this
type of discrimination. At a time when we are encouraging people to
choose work over welfare, it is unconscionable to create a hostile work
environment for these welfare-to-work recipients by undermining
workplace standards.
Finally, the negotiators of the original budget agreement recognize
that restoring aid to legal immigrants living in the country prior to
August 23, 1996, and later become disabled is good policy and a needed
improvement to last year's welfare bill.
This budget bill violates this promise to over 75,000 perspective
elderly and disabled immigrants, 30,000 of which live in California. In
essence, the majority is saying to these legal immigrants who have
worked hard and played by the rules, you can work here and pay taxes
into our system, but if you become disabled, we will abandon you.
I urge a ``no'' vote on this budget reconciliation bill.
Mr. SPRATT. Mr. Speaker, I yield 2 minutes to the gentleman from
Maryland [Mr. Cardin].
Mr. CARDIN. Mr. Speaker, first let me thank the ranking member for
yielding me this time.
Mr. Speaker, in regards to the Medicare provisions, I want to applaud
the process that was used. It was a true bipartisan process. I want to
congratulate the gentleman from California
[[Page H4565]]
[Mr. Thomas], the chairman of the Subcommittee on Health, and the
gentleman from California [Mr. Stark], the ranking member. Working
together, we were able to modernize the Medicare system and extend the
solvency of the trust fund for another decade, and we did that
protecting the beneficiaries.
Unlike the other body that looked at ways that will affect the
beneficiaries by dealing with eligibility and age and means testing and
home care copayments, we were able to modernize the Medicare system and
extend benefits to our seniors because we worked together, Democrats
and Republicans. We improved the process.
I am particularly pleased that we were able to add for the first time
preventive health care benefits to Medicare so that it is not just a
program for people who get sick, but that we keep our seniors healthy;
that we provide for colorectal screening and mammography and diabetes
self-management and prostate cancer screenings. We have provided
improvements in the Medicare system that will help our seniors.
I am particularly pleased that we were also able to include the
prudent layperson's standards for access to emergency care, another
issue that we were concerned about in a bipartisan way; that we
modernized the hospice benefits, and I could go on and on and on. We
were able to do that because every member of the committee was
respected for his or her views and we worked together as the process
should work together.
Mr. Speaker, on Medicare, the system worked. There are other aspects
of the budget where we have not had that same degree of cooperation,
and I would hope that we would use the model that the committee was
able to do on Medicare in working together to deal with the problems
that we have and to improve the programs for our seniors. We could do
that in more aspects of the budget agreement, and I hope we will as we
move forward on the budget and work together in a bipartisan manner.
Mr. THOMAS. Mr. Speaker, I yield myself the balance of my time.
The SPEAKER pro tempore (Mr. Dreier). The gentleman from California
is recognized for 1 minute.
Mr. THOMAS. Mr. Speaker, I thank the gentleman from Maryland. It was
a pleasure working with him. My hope is that I will have an opportunity
to work with him again on important legislation. He may deny me that
chance by a decision he may make in another political arena. But the
thing I admire most about the gentleman from Maryland is that he deals
from a basis of fact.
We have heard a number of people repeat the $16 billion for 5 million
children. For the last time, unchallenged, the Congressional Budget
Office said the President's plan in his budget, $21.9 billion would
produce only 830,000 children covered. If anyone stands up and says,
there was a promise of 5 million children and someone reneged, they are
playing fast and loose with the facts. The reason we were able to build
the consensus was because members of Ways and Means did not do that.
Shame on Members if they do it on the floor.
I would like to say, Mr. Speaker, that the Medicare provisions in
this mark are outstanding because of the cooperation on both sides of
the aisle, and I want to thank all of the members and staff for helping
put this magnificent product together.
Ms. DeLAURO. Mr. Speaker, I yield myself 25 seconds.
This bill does not help working middle-class American families. My
colleagues on the other side of the aisle accuse us of waging class
warfare. It is they, in fact, who have declared war on the middle-class
and those people who strive to make their way into the middle-class.
This bill makes deep cuts in programs for working families who depend
on us for what they need to get done. It provides tax breaks for the
wealthiest people in this country. I urge my colleagues to vote against
it.
Mr. Speaker, I ask unanimous consent that the balance of my time be
controlled by the gentleman from New Jersey [Mr. Pallone].
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from Connecticut?
There was no objection.
Mr. SHAYS. Mr. Speaker, I yield myself 20 seconds to point out that
next year, if one has four children, one will have returned in taxes
$1,200. If one makes $40,000, one will get back $1,200. That is a
middle-class family, and I think they will be happy to get that.
Mr. Speaker, I yield 3 minutes to the gentleman from Florida [Mr.
Bilirakis], who is the chairman of the Subcommittee on Health and the
Environment of the Committee on Commerce.
(Mr. BILIRAKIS asked and was given permission to revise and extend
his remarks.)
Mr. BILIRAKIS. Mr. Speaker, I thank the gentleman for yielding.
Almost 2 weeks ago, Mr. Speaker, the Committee on Commerce forwarded
to the House a budget reconciliation bill which reflects the hard work
of many Members. I want to stress that all Members were given the
opportunity to share their suggestions on improving this legislation,
and many of their interests were incorporated into the bill and the
chairman's mark or by the amendment process. The Democratic process was
allowed to work.
Regarding Medicare, as a Member from a district that has a large
number of seniors, I set as a major personal goal the protection of
Medicare beneficiaries. And make no mistake about it, Medicare
beneficiaries will be protected. In fact, our legislation contains many
consumer protections that were not even considered by any of the prior
Congresses. It addresses fraud and abuse within the Medicare program
and ensures that the Medicare Trust Fund will remain solvent until the
year 2008.
The legislation contains many worthwhile policy changes which would
greatly benefit the elderly. All Medicare beneficiaries will be given a
choice of coverage through a new Medicare Plus program. Medicare Plus
would allow beneficiaries to decide whether they want to receive their
Medicare coverage through traditional Medicare fee-for-service, or
through a newly-created Medicare Plus plan, with the option, I repeat,
with the option to return to traditional Medicare.
Regarding Medicaid, this legislation eliminates some of the lengthy
waiver processes so States will obtain relief from burdensome Federal
regulations. As a result, a State will have more time and more money to
improve the quality of health care. Our committee was required by the
budget agreement, if you will, to find savings in the States'
disproportionate share programs. Our legislation accomplishes this task
in as equitable a manner as is possible considering the parameters
placed upon us.
Finally, our package establishes a new child health assistance
program which provides grants to States in order to expand health
access for currently uninsured children, a plan which received an 18 to
3, an 18 to 3 approval vote from the Democrats on the committee.
In conclusion, Mr. Speaker, I truly believe that this bill must be
judged through the prism of our shared responsibility to our
constituents and the Nation as a whole, and when our common interests
are considered, it is important to bear in mind our ultimate goal: To
deliver a balanced budget to the President's desk while at the same
time reforming and saving Medicare and Medicaid without in any way
hurting the beneficiaries.
Finally, I want to personally thank the majority and minority staff
for their hard work. They have put in many hours over the past month,
and I want them to know how much we all appreciate their efforts. I
especially want to recognize Howard Cohen, Eric Berger, Kay Holcombe,
Bridgett Taylor, and Ed Grossman.
Mr. SPRATT. Mr. Speaker, I yield 2 minutes to the gentlewoman from
Michigan [Ms. Rivers].
Ms. RIVERS. Mr. Speaker, I find much to criticize in this particular
proposal, but I rise today to raise concerns about one particular
element, that of medical savings accounts within the Medicare
proposals.
The medical savings accounts were not part of the original budget
deal and they represent a $2 billion burden on a Medicare system that
is struggling to make it into the next century. I am concerned, Mr.
Speaker, that only those who are relatively young and healthy may well
make this choice and leave the rest of Medicare to treat those who are
older, sicker, poorer, and therefore more expensive to care for.
[[Page H4566]]
Companies that currently offer MSA's do not want to enroll people
with health problems and in fact are not required to do so under the
law. As a matter of fact, I would share with my colleagues a
communication between a would-be subscriber and Golden Rule Insurance
Company in which Golden Rule responds, ``Thank you for your interest in
our company. We do currently market health insurance, including the
medical savings accounts in your State. However, your medical condition
of diabetes would not be one that would fall within our underwriting
guidelines. Therefore, we would not be able to consider your
coverage.''
They go on to explain that their underwriting standards are very
strict and this allows them to charge the lowest rates.
Mr. Speaker, my concern is that the wealthy and the healthy will
leave Medicare, leaving the system to deal with those who are much
sicker. We will see costs rise in a way that we cannot afford.
In addition, the MSA's in this bill are not just health plans, they
are additional government checks written to those who have sufficient
resources to take a risk on a high deductible plan. It is important for
people to realize that MSA's can be used for nonmedical expenses as
long as the balance of an account stays at 60 percent of the
deductible. Moreover, if someone elects to take the money out of their
medical savings accounts, up to 40 percent, they are not penalized, as
long as they keep that balance.
This is not a health care option, this is just free money. Then, when
the large medical expenses begin to loom in the future of the person,
MSA holders can then game the system, go back to the main Medicare
program and avoid personal responsibility for deductibles of up to
$6,000, all the while demanding that the pool that they left behind,
that they abandoned, now cover all of their costs.
It is not fair, and it is a good reason to vote no.
Mr. SHAYS. Mr. Speaker, I yield myself 5 seconds to point out that
under the Medicare plan they have to take all; they cannot
discriminate.
Mr. Speaker, I ask unanimous consent to yield 12 minutes to the
gentleman from Florida [Mr. Shaw], who chairs the Subcommittee on Human
Resources of the Committee on Ways and Means, the expert on welfare
reform, and that he be allowed to control that time.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Connecticut?
There was no objection.
Mr. SPRATT. Mr. Speaker, I yield 3 minutes to the gentleman from
Minnesota [Mr. Sabo], former chairman of the Committee on the Budget.
(Mr. SABO asked and was given permission to revise and extend his
remarks.)
Mr. SABO. Mr. Speaker, I thank my friend, the ranking member, for
yielding. Let me say to him, I admire the work that he has done in
behalf of this House and our caucus. It has been truly outstanding.
Mr. Speaker, I wish I could be here today to say that I could vote
for this bill. I cannot, and I hope I will be able to when it comes
back from conference committee.
Mr. Speaker, let me focus on one program that I think has the
potential to be a great positive, but is a long way from achieving its
goal. That is the program to expand coverage of uninsured children in
this country.
{time} 1530
There are many problems with the program as it is structured in the
bill today. But let me focus on one that has not been subject to much
discussion. The reality is that, however we resolve the various
disputes that relate to the structure of children's health care, the
States will play a vital role. The other reality is that many States
have already acted in a very aggressive fashion through Medicaid or
through other plans to expand and cover kids with health insurance,
sometimes in the public sector and sometimes in the private sector.
Unfortunately, the way the bill is structured today, either by design
or by accident, it is structured so it penalizes every State that has
acted and rewards the States that have done nothing, or done very
little. I think that is both unfair and bad public policy. It sends a
totally wrong message to every State in this country that we ask to be
aggressive and to be creative in dealing with problems in our country.
How does it happen? The question is, Do we measure the distribution
from the Federal Government to the States on the basis of kids in need?
I think we should. Unfortunately, the bill simply does it by the number
of uninsured kids, which guarantees that every State that has acted is
penalized. I would hope, as this bill goes to conference, that we
resolve some of the definition of benefits and the scope of coverage in
an adequate way, but let us also not penalize States for having acted.
Mr. SHAW. Mr. Speaker, I yield myself 30 seconds.
Mr. Speaker, there have been several speakers who have come to the
floor on the other side of the aisle who have, I am sure
unintentionally, misstated what this bill says. I would like to say to
them in the area of discrimination that people coming off of welfare
certainly are not discriminated against. In fact, they are protected by
title VI of the civil rights bill, which reads, and which is
incorporated into the law, that ``No person in the United States shall,
on the ground of race, color, or national origin, be excluded from
participation in, be denied the benefits of, or be subjected to
discrimination under any program or activity receiving Federal
financial assistance.''
Mr. Speaker, I yield 3 minutes to the gentlewoman from Washington
[Ms. Dunn], a member of the Committee on Ways and Means.
Ms. DUNN. Mr. Speaker, I am pleased to speak in support of the
provisions in the Balanced Budget Act that strengthen the welfare
reform law signed into law last August by our President. We have made
several improvements to our new welfare system, improvements that
reinforce the value of work, not the dependence on welfare.
These changes also reflect a good-faith compromise that was made with
the President on the transition from welfare to work for noncitizens.
Our new bill maintains our basic policy on the matter of welfare and
workfare for noncitizens as a policy that is based on the belief that
taxpayer-funded assistance should be reserved for people who are
citizens of the United States.
The budget reaffirms that people who come to America will be welcome
to pursue the opportunities of our great Nation, but not to go on
welfare. We encourage those individuals to seek support not from the
taxpayer but from their relatives and their sponsors, as has long been
the law in this Nation.
We came to a compromise, Mr. Speaker, on the issue of benefits for
elderly and for disabled noncitizens who were already receiving
assistance before the welfare reform bill was passed last August. To
them this bill says: You will not be asked to play by different rules.
The rules of the game will be the same. If you were in a nursing home
on August 22, 1996, you will retain that benefit. If you were receiving
SSI last August 22, you will continue to receive that assistance.
We have set $9 billion aside, and I will make that loud and clear;
noncitizens getting benefits on August 22, 1996, are grandfathered,
period.
In the era of the minimum wage, we guarantee that those on workfare
will receive the minimum wage, but we also believe in calculating this
minimum wage that food stamps as well as cash be considered. That total
will determine how many hours of work a person will work.
The bill also includes a $3 billion welfare-to-work grant which
specifically is targeted to the hardest hit. This money will be
provided to areas with the highest concentrations of poverty,
unemployment, and people on welfare. This grant truly will focus
resources on the areas most in need. This is new money since last
year's bill was signed, and it is another effort to get welfare money
to people who truly need these dollars.
Mr. Speaker, I urge my colleagues to support this budget.
Mr. SPRATT. Mr. Speaker, I yield 2 minutes to the gentleman from
Florida [Mr. Davis].
Mr. DAVIS of Florida. Mr. Speaker, I rise in qualified support of the
budget resolution. As a member of the Committee on the Budget, I have
worked hard with the gentleman from South
[[Page H4567]]
Carolina [Mr. Spratt] and others to try to conform the budget
resolution to the budget agreement, and to strike the balance between
protecting our Nation's priorities and securing a reasonable approach
toward a balanced budget. The budget agreement in fact did do that.
Unfortunately, the agreement just barely does that now. It still
continues to balance the budget, and I will vote for it today for that
reason, because it also protects our most important priorities. We are
dangerously close to unraveling this agreement because of many
extraneous matters that have been inserted in it, including some of
which were specifically agreed not to be pursued as part of the budget
agreement.
Let me share with the Members two of the more egregious examples. One
is the alterations to the Federal Labor Standards Act that have been
discussed, that have the effect of reducing people who are moving from
welfare into work to second-class citizens in terms of some of the
protections we otherwise afford to employees.
The second provision, which was specifically agreed not to be
included in the budget agreement, was to treat legal immigrants
differently with respect to eligibility for disability benefits. These
are two provisions that must be fixed in the conference committee in
order for this budget agreement, in order for the Budget Reconciliation
Act, to pass.
I will vote for it today, but let us not repeat the same mistakes we
made on flood relief. Let us not load up what otherwise could be a good
bill with unrelated matters that will have the effect of forcing a veto
and taking us off track.
Mr. Speaker, I rise in qualified support of H.R. 2015, the
entitlement reform portion of the budget reconciliation package. I
strongly supported the budget agreement and the resolution we passed
last month. I believe that agreement represented a fair compromise and
a good first step in restoring fiscal sanity to our Federal budget
process. Now, a little over a month later, with the details of the plan
filled in, there are serious questions whether certain provisions in
the bill before us today violate both the spirit and the letter of the
agreement.
Last Friday, I voted for this bill, in committee, with the clear
understanding that a manager's amendment would be offered to fix many
of the most egregious shortcomings in the bill. Some of them, such as
the protection of low-income Medicare beneficiaries, the expansion of
children's health coverage, and the minimum wage security for
participants in workfare, have been modified. Unfortunately, critical
differences have not yet been resolved on a range of issues including
the restoration of benefits for legal immigrants--which was explicitly
included in the agreement--and the application of all Fair Labor
Standards Act protections to workfare participants.
I am concerned that we are again set to play politics and
brinkmanship on an issue of vital importance to the American people.
Last month, Congress loaded up the disaster supplemental appropriations
bill with extraneous provisions the President was certain to veto.
After weeks of delays, causing serious problems for the flood victims,
we finally stopped the wars of rhetoric and posturing, and sent an
appropriate bill to the President.
Now I am concerned that a similar mistake will be made on the
balanced budget agreement--trying to push the President into a corner
by adding extraneous items which have no place in a deficit reduction
package. For example, medical malpractice reform is a serious issue
which warrants serious consideration outside of this reconciliation
bill but which only jeopardizes the chances that this package will
ultimately be enacted into law.
Ultimately, I believe these issues will be addressed in the
conference committee, the next step for this bill, and I will support
the package today as a recommitment to the goals of the bipartisan
budget agreement and in an effort to move this process forward to
conference. My hope is that by the end of the conference, we will all
be able to enthusiastically support the reconciliation bill
representing both the letter and the spirit of the historic bipartisan
agreement.
Mr. SHAW. Mr. Speaker, I yield 2 minutes to the gentleman from
Pennsylvania [Mr. English], a very valuable member of the committee.
Mr. ENGLISH of Pennsylvania. Mr. Speaker, I thank the gentleman for
yielding time to me.
Mr. Speaker, I rise in strong support of the Balanced Budget Act, in
part because this legislation contains a vital $3 billion welfare-to-
work grant program to create a path for long-term welfare recipients to
enter the work force. For welfare reform to work, we have to give the
States and the localities the flexible tools they need to provide a
transition for people to leave welfare, to escape the poverty trap, and
to enter the mainstream of the American economy. This program,
developed in the Committee on Ways and Means, does just that.
Mr. Speaker, the focus of this funding is on areas with the highest
concentrations of poverty, unemployment, and welfare enrollment, so
resources will be available to those areas with the greatest need. We
know we do not have sufficient programs for incentives currently to
help welfare recipients with little work experience successfully enter
the work force. This program, coupled with the expanded work
opportunity tax credit and the new welfare-to-work credit contained in
the tax section of our budget, create real opportunities for the able-
bodied poor to participate in the productive economy. It will encourage
State policy creativity in developing local solutions to move people
from welfare to work.
There is also a strong workfare provision in this bill. Just to
remind the folks on the other side of the aisle, it contains
protections for minimum wage. It contains protections for the 40-hour
work week, for antidiscrimination legislation, protections for health
and safety, protections for nondisplacement and a grievance procedure.
To listen to the speeches on the floor this morning, we would think
they have not read the bill.
Mr. Speaker, I urge all of my colleagues on both sides of the aisle,
especially those representing depressed urban communities, to support
this legislation and provide the assistance their constituents need to
get out of the welfare trap.
Mr. SPRATT. Mr. Speaker, I yield 2 minutes to the gentleman from
North Dakota [Mr. Pomeroy].
Mr. POMEROY. Mr. Speaker, I thank the gentleman for yielding time to
me.
Mr. Speaker, I intend to support the bill before us, although I find
it to be a disappointingly close call. We are early in the legislative
process on actually carrying through this historic balanced budget
agreement reached earlier between congressional leaders and the
President, and affirmed earlier by this Chamber in the budget
resolution. Now that we get down to the actual business of the
legislating language, I find that the package before us substantially
carries forward the agreement and the resolution, getting us on a
balanced budget footing. Unfortunately, it falls short of the
guarantees explicitly that are part of the agreement, like the
commitment to extend coverage to children.
In other areas, totally nonbudget items are jammed onto this bill,
much like the nondisaster aid items that bedeviled us so in trying to
get relief to the flood-stricken areas for weeks.
An area here that I find most disturbing is the expansion of
portability and health insurance coverage Act, known as EPHIC. It is
the old multiple employer welfare arrangement rejected in the last
Congress, that has again been jammed into this bill. This provision, if
ultimately enacted, would deprive ultimately millions of people in the
workplace from their State-provided consumer protections in dealing
with health insurance. Do we think that is a good idea? I certainly do
not. But it is an important concept that, at least, would warrant
debate.
When I went to the Committee on Rules to seek, along with a
Republican colleague, a stand-alone debate on this nonbudget item, in
the context of this act, we were not allowed it. It is a classic case
of taking a policy nugget unrelated to the budget and jamming it into
the bill. As far as I am concerned, this is a deal-breaker, and I will
vote against the bill coming out of conference committee if it looks
like the bill before us.
But we are not at that point in time. It is important to keep the
process moving, and therefore, I urge a ``yes'' vote.
Mr. SPRATT. Mr. Speaker, I yield 1 minute to the gentleman from
Minnesota [Mr. Minge].
Mr. MINGE. Mr. Speaker, the legislation now moving through this body
is unsettling to most of us. It is marketed by many as the path to
balance the budget. Indeed, it appears we are more likely to balance
the budget with this legislation than without it. However, I would like
to emphasize, it is a close
[[Page H4568]]
call. We should be humble when we talk about the legislation.
To move the process ahead to conference, to show support for the
President, to demonstrate bipartisanship, I will vote for the bill. But
let me add some caveats.
First, we need strong enforcement mechanisms in all legislation that
affects the budget. Second, we must stop using the Social Security
trust fund to mask the size of the deficit, and recognize the long-term
train wreck that awaits us with the Social Security system if we do not
aggressively move to fix it.
Finally, we must try harder. We must avoid exploding tax cuts, we
must not give blank checks to programs, we must limit our appetite for
weapons systems. This legislation is one small step in the political
process. Let us move the process ahead.
Mr. SHAW. Mr. Speaker, I yield 3 minutes to the gentleman from
Arizona [Mr. Hayworth], a valuable member of the Committee on Ways and
Means, and a member of the Subcommittee on Human Resources.
{time} 1545
Mr. Speaker, I thank the subcommittee chairman for yielding me the
time.
Mr. Speaker, I would invite those who control the television cameras
which broadcast these proceedings from coast to coast and around the
world to take the proper perspective as I address in this well one of
the dangers we face from those who would oppose this reconciliation
act, one of the dangers we face from those who continue to distort what
is at stake for the American people.
Mr. Speaker, I hold here H.R. 3734, one of the crowning achievements
of the 104th Congress. Mr. Speaker, it is this bill that took the
important steps in the 104th Congress to change welfare as we knew it,
to move people from welfare to work.
Mr. Speaker, the danger in opposing the provisions that the new
majority offers in this act would have the effect of taking this
important piece of legislation and throwing it away, dropping it into
the trash can, radically changing the intent of what transpires.
Good people can disagree. I will offer a perspective that needs to be
heard, Mr. Speaker, by the American people and especially those who
continue to champion the endless expansion of benefits and the
destruction of welfare reform. Let me offer a real story from a real
State, the 48th State in this Nation, the one that I represent,
Arizona.
Let me quote to my colleagues the perspective of the Arizona
Department of Economic Security director, Linda Blessing, in talking
about the old welfare programs, ``The status quo was not cutting it,''
and to further quote from her statement, ``We handcuffed people into
dependency.''
Mr. Speaker, the facts are that we have moved in a successful,
deliberate, commonsense fashion to move people from welfare to work.
More than 38,000 welfare recipients have dropped off the roles in
Arizona since 1994, when the height of the enrollment in our State in
that year was 195,000. The taxpayer-supported welfare program in
Arizona has helped 23,000 recipients find needed employment training,
placed 6,800 recipients in jobs, that is an increase of 1,000
recipients from last year.
We need to continue the successful trend, allow States like my home
State of Arizona to work with the $3 billion welfare-to-work grant to
move yet more families from welfare to work. What we provide for this,
this legislation does so because we have listened to the Governors. We
have improved the legislation. We have expanded educational benefits.
We have taken a commonsense approach. The Federal Government, along
with State governments, both made great strides with the welfare
reforms passed last year. Now is the time to provide those State and
local governments with flexibility. Do not trash welfare reform; build
on it. Adopt the resolution.
Mr. SPRATT. Mr. Speaker, I yield 30 seconds to the gentlewoman from
Texas [Ms. Jackson-Lee].
Ms. JACKSON LEE of Texas. Mr. Speaker, what my good friend from
Arizona fails to acknowledge is that welfare reform in its best sense
was bipartisan of Democrats and Republicans. What this spending bill
does is takes the rights away from working welfare people, does not
provide them with protections of fair labor standards laws, does not
provide them with protection against sexual harassment, does not treat
them as workers who get equal pay for equal work. That is why we are
against this spending bill, because it dishes the welfare reform that
we put together in a bipartisan Congress. I am ashamed of what is
coming about in this pending bill.
Mr. SPRATT. Mr. Speaker, I yield 3 minutes to the gentleman from
Michigan [Mr. Dingell], ranking member of the Committee on Commerce.
(Mr. DINGELL asked and was given permission to revise and extend his
remarks.)
Mr. DINGELL. Mr. Speaker, I commend my good friend for the fine work
which he has done on this very important subject. I had voted for the
prior resolutions on this matter. I regret I will not be able to do so.
This budget suffers from a number of fatal defects, the most
important of which, it breaches agreements contained in the earlier
budget resolution and it will not achieve a balanced budget. There are
a number of defects with regard to medical savings, with regard to
moneys which should better be spent for preventive care such as
mammographies, prostate cancer screening, and more. The bill treats the
young people of this country poorly. It will not achieve a balanced
budget. The Committee on Rules put in sweeping amendments to the
section on spectrum auctions that have completely gutted taxpayer
protections that were included in the Committee on Commerce's
recommendations.
Our committee made sure that the public's assets would not be sold at
fire sale prices by permitting spectrum auctions to be canceled if they
did not raise a minimum amount of revenue. The policy changes included
in this bill were rejected by the Committee on Commerce members, and
for good reason; they do not protect American taxpayers. Indeed they do
great harm to them.
My colleagues need to know one issue of permanent and paramount
importance. A sizable portion of this budget bill is held together by
sham and fraud consisting of phony revenue assumptions about the value
of spectrum auctions. We know that the revenue assumptions here are
phony. We have seen them before.
Last September Congress ordered a spectrum auction for the sole
purpose of plugging a revenue gap. CBO estimated that the auction would
raise $1.8 billion. Instead the auction produced just $13 million, less
than one penny on the dollar. One speculator won the right to serve
four States for a total of $4. It appears that the Committee on the
Budget, like the Bourbons of France, have learned nothing from this and
forget nothing also.
The evidence shows that the market for radio spectrum is saturated
and demand is at an all-time low. Yet we are, under the aegis of the
Committee on the Budget, proceeding to rush forward to sell out
spectrum for pennies on the dollar under a pretense that it will
balance the budget. In fact, it will not. The money is not there and we
are looking at further deficits because of the fact that we have lied
to ourselves, lied to each other, and lied to the American people.
Even the FCC chairman says his engineers cannot identify where at
least half the spectrum will come from and that they have no idea how
this will be accomplished. We have also learned that some of the
spectrum identified for auction in this bill is currently used by the
FAA. We can be sure then that this proposal will jeopardize the health
and the safety of the flying public.
Beyond this, the GAO report says operations like Desert Storm could
be severely impaired by the auction of radio frequencies. Can the
Committee on the Budget or the Committee on Rules assure members of
this committee that the bill will not have a disastrous effect on the
viability of the Nation's military operations? Put your expertise
against the GAO, which says that this puts our national defense effort
at severe risk.
The losers here are going to be the American taxpayers who are not
only being misled but who will continue to face a continued mounting
budgetary deficit because of a phony set of assumptions and a doomed-
to-fail policy on spectrum auctions.
[[Page H4569]]
Mr. SHAW. Mr. Speaker, I yield myself such time as I have remaining.
The SPEAKER pro tempore (Mr. Dreier). The gentleman from Florida [Mr.
Shaw] is recognized for 4 minutes.
Mr. SHAW. Mr. Speaker, a year ago, approximately a year ago, I stood
at this microphone in support of welfare reform, a most historic bill.
The gentlewoman from Texas a few moments ago said that she supported
it. If we look at the voting records, she did not. She voted against
it.
Ms. JACKSON-LEE of Texas. Mr. Speaker, will the gentleman yield?
Mr. SHAW. No, I will not, Mr. Speaker.
But I would like to give her the good news, that since welfare
reform, since 1995, in the State of Texas the welfare rolls are down 24
percent. That is unheard of. It is unprecedented in the history of this
country. Welfare reform has done more for the poor, the needy, than any
piece of legislation that has ever come out of this Congress. And let
there be no mistake about it. Those figures are out there and they are
nationwide. Nationwide. It has been a tremendous success.
When I stood here a year ago I said there was still much work to be
done. There were corrections to be made. I want to do away with some of
the rhetoric and some of the misinformation that has been on this floor
today. We do not provide or allow for in this bill any discrimination
about people coming off of welfare. On unemployment, the people that
are going into the private sector, they have all of the protection that
any of the workers in this country have. Those that are working for
their benefits, they have the protection against discrimination.
However, there are a few protections they do not have. When their
benefits run out, they cannot start collecting unemployment
compensation. They do not have the FICA contributions. Those are things
that there is disagreement in this conference about. I recognize that,
but I must say to the Speaker and to my colleagues that once they get
into the private sector, there is no difference between them and any
other worker.
Ms. JACKSON-LEE of Texas. Mr. Speaker, will the gentleman yield?
Mr. SHAW. No, I will not.
Mr. Speaker, I would ask the Chair to admonish the gentlewoman from
Texas not to interrupt me.
The SPEAKER pro tempore. The gentleman from Florida [Mr. Shaw]
controls the time.
Mr. SHAW. Mr. Speaker, there is also another area that I think that
there is great misunderstanding, there is the part referring to SSI for
noncitizens. We have a genuine disagreement with the President. We
thought we came up with a better solution. The President's plan would
call for 60 percent of noncitizens, the elderly, to come off of SSI. We
did not want to do that. So what we did, we grandfathered in all of the
noncitizens that were receiving SSI on August 22, when the welfare bill
was signed. We thought that was much fairer than pushing them out and
then having them come back and prove that they were disabled, knowing
that roughly half of them would never get back on and they would lose
their Medicaid as well as their SSI payments.
This is very important. We thought ours was the more humane way to
go. The President thought it was best to take the elderly off and
exchange their benefits to allow people that were here on August 22
that might become disabled, most of them will not, but those that did
become disabled sometime in the future could get onto SSI. It is a
disagreement we have, but it I might say in the full committee, after
we made our argument, no one even offered the President's plan. No one
offered the President's plan in the Committee on Ways and Means. Why?
Because they did not want to hear the argument that they were throwing
the elderly off. I do not blame them. I would not have offered it
either.
Another area that I would like to discuss is the area of minimum
wage. In this bill, in a very bipartisan manner, we adopted the
President's definition of minimum wage. We say in determination of
minimum wage when working for your benefits that the only thing that
will be included is the cash payments and the food stamps.
This is what the President wanted. This is what we gave to the
President. This is a bipartisan bill and we have taken a bipartisan
attitude in working with many of the Democrats. I hope that we get a
good vote. Vote ``yes'' on the bill.
The SPEAKER pro tempore. The time of the gentleman from Florida [Mr.
Shaw] has expired.
Mr. PALLONE. Mr. Speaker, I yield 2 minutes to the gentleman from
Michigan [Mr. Levin].
(Mr. LEVIN asked and was given permission to revise and extend his
remarks.)
Mr. LEVIN. Mr. Speaker, I speak as someone who supported the reform
of AFDC and I very much continue to support it. Let me address two
issues.
The Fair Labor Standards Act. I favor moving people off of welfare to
work. They should not be treated as second-class citizens, and you do
that. You take away the protection of the Fair Labor Standards Act, and
then you go back in, the States must pay a minimum wage. They do not
have the protection of Federal law. There is no clear enforcement, and
you take away the protection against sexual harassment. Why? What do
you do that for?
People should move from welfare to work. They should not be second-
class citizens. Period.
In fact, our hope is the opposite, to maintain the dignity and the
integrity of work. Legal immigrants; look, we did not offer the
President's proposal. We offered something that built on that. It was
turned down by one vote, even though there was the money there to pay
for it. The gentlewoman from Washington said, well, everybody should
play by the same rules. No, you are asking people who were here August
of 1996, who became injured after that, to play by different rules.
They are out in the cold. That is an irrational, inhumane line. We
should not be drawing it.
I am going to vote against this bill in part because I am hoping that
we will indeed have Mr. Shaw, whom I very much respect, in a bipartisan
effort to work out these problems in conference committee. Do not treat
anybody in this institution as a second-class citizen and do not renege
on the budget agreement regarding legal immigrants. They were here
legally. We should not differentiate people according to when they were
disabled.
Mr. SHAYS. Mr. Speaker, I ask unanimous consent that the
distinguished chairman of the Committee on Commerce, the gentleman from
Virginia [Mr. Bliley], control 12 minutes of the time.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Connecticut?
There was no objection.
The Chair recognizes the gentleman from Virginia [Mr. Bliley].
Mr. BLILEY. Mr. Speaker, I yield myself 2\1/2\ minutes.
Mr. Speaker, we are at a historic point for this Congress. For the
first time in 32 years, we have the ability to balance the Federal
budget by the year 2002. The bipartisan agreement set forth by the
administration and this Congress allows each of us the opportunity to
address the most serious and immediate issues facing our Nation today.
In particular, the Committee on Commerce labored long and hard to meet
its shared goals of balancing the budget.
{time} 1600
We strengthened and preserved the Medicare Program. Today's
beneficiaries will have access to a wide variety of coverage choices
and a broader package of preventive benefits. They will be served by
stronger antifraud measures and beneficiary protections. Tomorrow's
Medicare beneficiaries are also served by this legislation which
establishes a baby boom commission to identify solutions to the long-
term fiscal threats facing the Medicare Program.
We adopted flexibility reforms under the Medicaid Program long sought
by the States and proposed by the administration in its 1998 budget. It
establishes new coverage options, including 12-month continuous
coverage of children and enhanced managed care quality assurance
standards.
Finally, the committee approved legislation that targets $16 billion
to expand coverage and services to low-income uninsured children. Most
of this fund is made available to the States through the Child Health
Assistance Program, a matched mandatory grant program for low-income
uninsured
[[Page H4570]]
children. The program provides coverage and services such as
immunizations and other medications that will expand coverage and
provide much needed services to low-income uninsured children.
It is no small task to produce a package which extends the solvency
of the Medicare Program, improves benefits for Medicare beneficiaries,
and provides coverage and services for low-income uninsured children.
But that is exactly what we have done. I am proud of the work that the
Committee on Commerce has done, and I believe that every member of the
committee and every Member of this House should be proud of supporting
this legislation.
Mr. Speaker, I reserve the balance of my time.
Mr. SPRATT. Mr. Speaker, I yield 2 minutes to the gentleman from
Texas [Mr. Doggett].
Mr. DOGGETT. Mr. Speaker, as a member of the Committee on the Budget
who has supported this balanced budget agreement, I view this
reconciliation bill to implement it as most unfortunate. In fact, I
think it should go under the title ``wreckconciliation'' because it
really wrecks this balanced budget agreement. It lacks in enforcement
provisions.
My colleagues will recall that we got a balanced budget agreement
only at the last minute with some strange assumptions, a gyration that
generated a spare $225 billion, or there would be a hole that big in
the balanced budget agreement.
Well, yesterday the same thing happened. They were about $11 billion
short yesterday; and instead of trimming spending or adjusting the tax
breaks, they felt the best thing to do was to speculate on a spectrum
auction that will occur over the next 5 years and manipulate the
numbers to add $11 billion so that it would work out just right.
You see, this agreement is based on many questionable assumptions
that we hope will come true. It represents promises. It represents a
hope and a prayer. It represents a firm ``maybe''. But it certainly is
not a guarantee that we will ever have a balanced budget. And that is
why it is so important to have meaningful enforcement provisions, not
some day in the future but right here in this agreement. It lacks them;
and, therefore, I say it is a wreck of that budget agreement.
Well, if it is a wreck for our fiscal health, what about our physical
health? For the 10 million American children who have no health
insurance, growing by 3,000 children a day, it is truly a wreck because
not one of them is guaranteed access to health insurance under this
bill. And for Texans, it means almost $1 billion less for Texas
hospitals.
This is a step backward. It is a step away from this budget
agreement. And now is no time to avoid the need for enforcement of the
budget agreement and for addressing the real health care concerns of
working American families
Mr. BLILEY. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from
Illinois [Mr. Hastert].
Mr. HASTERT. Mr. Speaker, I thank the gentleman from Virginia [Mr.
Bliley] for yielding me the time, and I want to congratulate him on the
work he has done.
Mr. Speaker, we hear a lot of speeches here. Some are pretty
informational, and some really border on demagoguery, just plain
demagoguery. But let us look at the facts.
The facts are, if KidCare services are dropped, at least 2.6 million
low-income uninsured kids will lose. The analysis by CBO and CRS
estimated that KidCare services will insure an additional 2.595 million
children. Preserving the services of KidCare insures a grand total of 5
million currently uninsured children.
So what we saw a few minutes ago is not what we get. What we really
get are kids that do not have insurance today being covered, being able
to go to the doctor, being able to go to the emergency room, being able
to be taken care of and get the inoculations they need.
The budget agreement calls for KidCare services, and not only
services but the expanded coverage low-income and uninsured kids do not
have today. The KidCare agreement provides children's health services.
It helps hospitals and community health centers. That is where the
entities are that can best help our children, the most unserved
children today.
The budget agreement also provides and allows services to make
support for our Nation's 70 Children's Hospitals possible. I thank the
gentleman from Virginia [Mr. Bliley], the chairman, for the fine work
he has done.
Mr. SPRATT. Mr. Speaker, I yield 2\1/4\ minutes to the gentleman from
Texas [Mr. Bentsen].
(Mr. BENTSEN asked and was given permission to revise and extend his
remarks.)
Mr. BENTSEN. Mr. Speaker, first of all I want to thank the gentleman
from South Carolina [Mr. Spratt], the ranking Democrat, for recognizing
me and thank him for the work he has done on this bill.
My colleagues, this is a very difficult bill. On the one hand, there
are some things in this bill that are really quite good. I commend the
Committee on Commerce for the work that they did with respect to
medical education and the carve-out of the AAPCC so the that managed-
care companies will once and for all begin to share in the cost of
medical education because they also share in the benefit. That is a
very important issue. I hope that survives the conference, should this
bill move through and pass today.
It also includes another provision which I have sponsored, as I have
sponsored legislation dealing with medical education, dealing with
Medigap or supplemental insurance, in providing for annual coverage and
the ability for our senior citizens to really have a choice between
managed care and fee-for-service by being able to move back and forth
and not lose their right to that Medigap insurance.
It includes the PSO for providers such as hospitals and physicians to
compete effectively with managed care in this new health care world
that we have. Those are good things, and I hope they survive. And, of
course, it does extend the Medicare Program and it does balance the
budget, and that is good as well.
But, my colleagues, I still have great concerns about the Committee
on Commerce portion dealing with disproportionate share under the
Medicaid part of the bill. That would treat 13 States, including my
home State of Texas, much differently than it would treat the other 37
States.
Those 13 States would receive a 40 percent cut in their
disproportionate share in the year 2002, twice as much as the next
nearest State under the formula that is used. And the formula is flawed
because the formula uses as the baseline the fiscal year 1995 numbers,
but it determines the State by using fiscal year 1997 numbers. The
problem with this is they are using two different types of data. They
are using data from fiscal year 1995 and data from fiscal year 1997. It
is highly inequitable to the 13 States, including the State of Texas.
This matter absolutely must be fixed by the administration and by the
conferees if this bill is going to be forwarded to all the States of
the Union.
Mr. Speaker, I am voting for this legislation today to continue our
process toward enacting a fair plan that balances the Federal budget
for the first time since 1969. But I do so only after receiving the
strong commitment of the Clinton administration and Budget Committee
Chairman John Kasich to correct a Medicaid cut formula that is unfair
to Texas and 12 other States dependent on the Disproportionate Share
Hospital [DSH] Program.
My future support for this legislation is contingent on the
conference committee correcting the DSH formula so that it is fair to
Texas. If that does not happen, I will not vote for the conference
report.
I am pleased that, during debate on the rule for this legislation,
Chairman Kasich repeated the pledge he made in the Budget Committee to
change the DSH formula to make it more reasonable and fair. I am also
pleased that Office of Management and Budget Director Franklin Raines
has written me a letter stating:
We will make correcting the DSH formula as it relates to
high DSH states a priority in conference, and I look forward
to developing an equitable solution to this problem.
I will enter the full text of this letter in the Record after my
remarks.
I want to emphasize that I strongly support balancing the Federal
budget. I supported the bipartisan balanced budget agreement between
the President and the congressional leadership, and I voted for the
budget resolution.
There are many things in this legislation that I support and applaud.
I commend the Rules
[[Page H4571]]
Committee for improvements it has made to ensure that this legislation
does provide $16 billion to expand health insurance for children and
protect low-income senior citizens from increases in Medicare premiums.
I strongly support two provisions in the Medicare reform section that I
have advocated and that would greatly benefit our Nation's health care
system. These provisions, which are similar to legislation I have
introduced, would help ensure that senior citizens have real choice
under Medicare and our Nation continues to invest properly in medical
education at teaching hospitals. Both of these provisions were included
in the Commerce Committee version of Medicare reform, and I strongly
urge that they be included in the final legislation.
The first provision would give senior citizens who transfer into a
managed care plan the right to buy supplemental insurance, Medigap,
which pays for prescriptions and other vital services, if they return
to traditional fee-for-service Medicare. Seniors currently lack this
right, and this is a tremendous obstacle to real choice in Medicare.
The second provision would ensure that Medicare managed care plans
help fund medical education in the same as fee-for-service Medicare.
The Commerce Committee proposal would carve out graduate medical
education [GME], as well as disproportionate share hospital DSH,
amounts from the average adjusted per capita cost [AAPCC] payment to
Medicare managed care plans. This approach would ensure that this
funding is used as intended to fund GME and DSH. This plan would not
increase Federal spending; rather, it would recapture funds from the
current Medicare managed care reimbursement formula so that all
Medicare plans help pay for the cost of graduate medical education.
These provisions represent important progress. Nevertheless, I am
strongly opposed to the Medicaid provisions of this bill that would so
unfairly devastate the efforts of my State and many other States to
provide necessary health care to the poorest patients. There is
bipartisan agreement in Congress that we need to reform the
disproportionate share hospital [DSH] program to contain costs and
prevent abuse of the program. But these reforms must be fair and
reasonable, not arbitrary and punitive as they are in this legislation.
Under this legislation, Texas and 12 other so-called high-DSH States
would have their funding cut by twice the percentage of other States.
In the year 2002, funding for high-DSH States would be cut by 40
percent, while funding for other States would be cut by 20 percent or
not at all. As a result, 13 States contribute 57 percent of the savings
required, while some States bear no cuts at all. These States are
Alabama, Colorado, Connecticut, Kansas, Louisiana, Maine, Missouri,
Nevada, New Hampshire, New Jersey, South Carolina, Tennessee, and
Texas. These States would face the closure of rural and urban public
hospitals and substantial reductions in necessary health care for
uninsured or indigent patients, particularly children.
Additionally, the Nation's children's hospitals would inherit an
unsustainable financial burden as their caseload is often mainly
Medicaid or indigent care.
I had sought to offer an amendment that would take a more fair
approach that cuts each State's DSH funding by the same percentage.
High-DSH States still would be cut by larger dollar amounts, but the
cuts would be proportional and all States would contribute. This would
not have increased total expenditures. Unfortunately, this amendment
was not allowed.
I am also concerned about provisions in this legislation that do not
adequately protect the right of participants in welfare-to-work
programs; that privatize the determination of eligibility agreement to
use the full $16 billion to extend insurance coverage to uninsured
children. These and other areas in which this legislation falls short
of the budget agreement must be corrected by the conference committee.
I look forward to working with the administration and the conferees
to address these issues and especially to ensure a more fair and
responsible formula for cutting Medicaid DSH funding. The Medicaid DSH
issue is vital to my State and many others, and I will not vote for a
conference report that does not fairly resolve this issue.
Executive Office of the President, Office of Management
and Budget,
Washington, DC, June 25, 1997.
Hon. Ken Bentsen,
U.S. House of Representatives,
Washington, DC.
Dear Representative Bentsen: Thank you for sharing with me
your concerns about the impact of the disproportionate share
hospital (DSH) payment reductions on the State of Texas in
the House reconciliation bill.
The DSH savings proposal in the President's 1998 budget was
designed to ensure that States with the highest DSH spending
do not unfairly bear the impact of the savings policy. The
Administration remains committed to this policy.
As Congress recognized in OBRA 1993, a DSH savings policy
that did not take account of which States rely most heavily
on DSH financing could have too harsh an impact on certain
States and could likely affect their ability to cover
services. Thus far, the DSH savings proposal in the House
reconciliation bill does not fairly target the remaining DSH
funds to States with the greatest need, and the
Administration has urged the House to revisit the proposal in
the President's budget.
We will make correcting the DSH formula as it relates to
high DSH States a priority in conference, and I look forward
to working with you to develop an equitable solution to this
problem.
Thank you again for your call.
Sincerely,
Franklin D. Raines.
Mr. BLILEY. Mr. Speaker, I yield 1 minute to the gentleman from Iowa
[Mr. Ganske], a member of the committee.
Mr. GANSKE. Mr. Speaker, I rise in support of the Medicare reform
provisions before us. In large part, the bills produced by the
Committee on Commerce and the Committee on Ways and Means are very
similar, but there are some important differences.
Unlike the Ways and Means bill, the Commerce provisions carve out
graduate medical education and disproportionate share hospital payments
from the monthly rate paid to Medicare plans. This is an important
provision that should be enacted into law.
Currently, GME and DSH payments are included in the rate paid to
Medicare HMO's. That money is supposed to be passed on to those
hospitals which need additional support to train the next generation of
health care providers and provide a safety net for the poorest and
sickest Americans.
But there is much evidence that Medicare managed care plans fail to
pass these funds through as intended. Supporters of the carve-out
include the Physician Payment Review Commission and the Prospective
Payment Assessment Commission. The impact on teaching and safety net
hospitals is evident. The accounting firm of Deloitte and Touche wrote
that ``without some means to modify the AAPCC, support for education
and patient care-related missions and care for the low-income poor will
be diminished.''
Mr. Speaker, it would be irresponsible for Congress not to ensure
that these payments actively support specified missions.
Mr. SPRATT. Mr. Speaker, I yield 2 minutes to the gentlewoman from
California [Ms. Woolsey].
(Ms. WOOLSEY asked and was given permission to revise and extend her
remarks.)
Ms. WOOLSEY. Mr. Speaker, I ask my colleagues, why is it when the
majority proposes spending cuts, it is women and children first?
I voted for the balanced budget agreement because I was really
hopeful that roughneck politics had been passed aside to reach a
grander goal. Democrats and Republicans were willing to give some to
gain a lot. It was a textbook example of the art of compromise,
actually. But somewhere between the House floor and the committee
rooms, the deal unraveled and this unacceptable bill emerged, a bill
that undermines the budget agreement and adds new provisions that were
never even discussed and, in fact, have little to do with balancing the
budget in the first place.
The bill sends funds that we targeted for child health coverage to
States as block grants. This means Governors can spend the money for
programs that have nothing to do with providing children with basic
health care. Under this plan, less than half a million kids will get
coverage. Talk about a sellout.
But that is not even the worst of it. The same leadership who shut
down the Government and held flood victims hostage has once again
included an extraneous, divisive issue in its must-pass legislation.
The majority is using this bill to codify into law the Hyde amendment.
The Hyde amendment takes away reproductive rights for hundreds of
thousands of poor women. Roe versus. Wade does not exist when you
cannot afford to pay the bill. This bill also takes away other rights
from poor women. It drops women who are in welfare-to-work programs
into a new under class of employees not entitled to protections,
protections against sexual harassment, discrimination, unsafe
workplaces, and unfair labor practices. I cannot support this bill.
[[Page H4572]]
Mr. BLILEY. Mr. Speaker, I yield such time as she may consume to the
gentlewoman from New Jersey [Mrs. Roukema].
(Mrs. ROUKEMA asked and was given permission to revise and extend her
remarks.)
Mrs. ROUKEMA. Mr. Speaker, I acknowledge the commitment of the
gentleman from Ohio, Chairman Kasich, to working out the DSH payments
in this bill.
Mr. Speaker, I rise in support of H.R. 2015, the Balanced Budget Act
with reservations.
We are on the verge of passing legislation that, for the first time
in more than a generation, will set us on the trail toward a balanced
budget. This goal of a balanced budget is not an abstract exercise that
some economists or ``green-eyed shade types'' thought-up in some ivory
tower. It is an essential economic tool to get the savings and capital
investment we desperately need for research and development, and new
plant and equipment to rebuild the American economy; keep us
competitive in the global economy and create the good jobs at good
wages we need for this generation and those to come. For these reasons
I believe we must keep this progress going with the full expectations
that the final conference report will get strong endorsement.
Tomorrow, we will take up the legislation that will implement a
genuine ``Save and Invest'' in America program. Today, we fulfill the
promise we made to our children and grandchildren to make this
Government live within its means.
So this debate today is about priorities. While I will support this
legislation in order to keep this important legislative process moving
forward, I want the people of New Jersey to know of my priorities and
the improvements I believe we need.
Mr. Speaker, there is much to be proud about in this bill. In
addition to the real spending cuts that will move our budget into
balance, this legislation contains a new $16-billion initiative on
children's health.
We are right to target $16 billion to help insure children who are
not insured. The only question remains over what will be done with this
money to achieve the goal of providing health care to children.
I rise today to remind you not to forget children's mental health as
well as their physical health. Both are components of children's health
that cannot be ignored.
Any health initiative must have parity treatment of mental health
coverage. Yesterday, in the other body, an amendment passed that would
require that any plan that included mental health benefits would
provide those benefits in a nondiscriminatory manner. This should
remain a part of this budget package.
On the negative side, I recognize that we must have genuine
entitlement reform. Medicare is going bankrupt and this bill restores
its solvency for another 10 years while we debate a long-term solution
to this pressing problem.
This legislation moves in that direction. But without question, this
area of savings raises the most concern, and I must state my healthy
skepticism about how much can, or should, be accomplished in the near-
term.
I am deeply concerned about the Commerce Committee provision of this
bill that cuts $16 billion in Federal Medicaid matching funds from the
disproportionate share hospital [DSH] payments. This could amount to a
17-percent cut in New Jersey in a vitally important program that serves
our neediest patients. I am encouraged by the statement made during
debate on the rule on this legislation by the chairman of the Budget
Committee [Mr. Kasich], that this formula is unfair to New Jersey and
other States and should be revised. I am looking forward to reviewing
those revisions when this House considers the conference report on this
bill.
We in New Jersey are also deeply concerned about the reductions in
Medicare payments for high Medicare hospitals--many of which can be
found in New Jersey--and the prospective payment system freeze for next
year. These two provisions present serious burdens for New Jersey
health care providers and could significantly affect the quality of
care in our State.
Mr. Speaker, there is very little long-term Medicare reform in this
bill. I, for one, support the establishment of a Bi-Partisan Blue
Ribbon Medicare Commission--modeled after the very successful Greenspan
Commission on Social Security in the mid-1980's--to make
recommendations for preserving and protecting this vital program, which
the Congress should enact confident that there is not any hidden
``political agenda'' to the recommendations.
Mr. Speaker, I am very troubled that this reconciliation package
includes provision that allows associations to offer health care
plans--the provision added in the Education Committee by my friend from
Illinois, Mr. Fawell.
This section of the reconciliation package raises two concerns. The
first concern is the fact that budget reconciliation is a totally
inappropriate forum for bringing forth such expansive legislation
without proper analysis and open discussion of such important concerns
as fiduciary standards.
This provision does not offer sufficient protection against fraud and
abuse and contains solvency standards that are substantially weaker
than most State standards. This poses the risk of significant losses
for both plan participants and providers when plans fail.
We are being grossly irresponsible by including a major revision of
ERISA law in this massive reconciliation bill.
My second concern is that this proposal does not help the health care
situation in this country, but actually damages the integrity and
health of group insurance coverage while reducing protections for
patients.
We must carefully weigh the benefits of allowing associations the
protections of being covered by national laws with the benefits of
allowing State laws to determine consumer protections. While we do want
to encourage companies to provide health care benefits to their
employees and enlarge the prospects for small businesses to pool for
insurance purposes, we must respect the right of each of the States to
regulate the insurance industry within their boundaries. This proposal
will drive us inextricably to national managed health insurance
standards.
In other words, this legislation is significant, complex and perhaps
one whose time has come but not in a reconciliation budget package.
This is no way to run a railroad or a legislative body. I will make
every effort to ensure that this provision will be dropped in
conference.
I am equally concerned that this legislation does not contain the
strong budget enforcement mechanism introduced by Congressmen Barton
and Minge. However, I will rely on the commitment from the Republican
leadership that we will have a vote on this important legislation in
July and that, if successful, this legislation will become part of the
reconciliation process.
That process will not be without difficulty, but as we prepare to
enact legislation that balances the Federal budget we should not kid
ourselves into thinking that it will be easy to do. At the same time,
we should acknowledge the terrible cost to our Nation if we do nothing.
Balancing the Federal budget is essential to protect our Nation's
long-term financial health, and to ensure that the country our children
and grandchildren inherit is as great as the one our parents gave us.
Mr. BLILEY. Mr. Speaker, I yield 1 minute to the gentleman from
Pennsylvania [Mr. Greenwood].
Mr. GREENWOOD. Mr. Speaker, I thank the gentleman from Virginia [Mr.
Bliley] for yielding me the time.
Mr. Speaker, I rise with great enthusiasm to support this
reconciliation package. This is why I came to Congress, to balance the
budget. Today is a historic day for this Congress. But I want to
specifically refer to the children's health care package.
The previous speaker somehow argued that children will be left
uncovered by this bill as we in the Committee on Commerce have crafted
it. To the contrary, what we have done is created the flexibility that
the States need to provide Medicaid coverage, to provide direct health
insurance purchases, and to provide direct services. And for those who
criticize the provision of direct services, we must remember that if we
did not provide children with direct health care services, those
children would get no health care whatsoever.
We need to trust our Governors, we need to trust our State
legislators and allow them to meet the health care needs of their
children in the way that best suits their States' realities. I support
this package enthusiastically and encourage my colleagues to do so, as
well.
{time} 1615
Mr. SPRATT. Mr. Speaker, I yield such time as he may consume to the
gentleman from New York [Mr. Engel].
(Mr. ENGEL asked and was given permission to revise and extend his
remarks.)
Mr. ENGEL. Mr. Speaker, I thank the gentleman for yielding me this
time.
Mr. Speaker, I rise to oppose the Budget Reconciliation Spending Act.
While this bill contains fewer cuts than the drastic social spending
reductions the Republicans have demanded in recent years, it still
gives short shrift to America's seniors, workers, and immigrants.
Further, it violates several of the provisions of the budget
agreement we passed only a few weeks ago.
First, the legislation misguidedly permits States to turn over
Medicaid and Food Stamp
[[Page H4573]]
Programs to private companies, many of which have demonstrated that
they have not been able to efficiently administer other Government
contracts.
An amendment in the Commerce Committee would have fixed this problem,
but it was unwisely rejected by the Republican majority.
Second, the Medicare cuts are not as onerous as those of the 104th
Congress. Still, the impact of reduced payments to providers will, in
the end, be absorbed by needy seniors, resulting in poorer health care
and diminished access to physicians.
I am further dismayed by the incorporation of the risky medical
savings account proposal in the Medicare portion of the package.
This proposal will undermine the integrity of the Medicare Program by
transferring critical funding away from the most needy beneficiaries to
the healthiest, wealthiest senior citizens.
Third, I am pleased that the bill restores SSI and Medicaid to those
legal immigrants who were receiving them when the welfare reform
legislation was enacted last August.
Unfortunately, the budget agreement does not go far enough. Those
immigrants who were here last August who only subsequently qualified
for assistance, remain barred from receiving benefits. This is terribly
unfair to those who had a reasonable expectation that the U.S.
Government would assist them.
Finally, the budget reconciliation spending bill guts much of the
minimum-wage increase which Congress passed last year, by exempting
those in workfare jobs from the minimum-wage protection.
This is outrageous. Not only will this proposal take good jobs away
from workers making as little as the minimum wage, but it will defeat
the entire purpose behind workfare because program participants will
not be able to earn a living wage in their jobs.
Mr. Speaker, once again, this bill represents an improvement over
previous Republican budget cutting efforts. Unfortunately, it still
cuts too much and helps too few.
I urge my colleagues to vote against the budget reconciliation
spending bill.
Mr. SPRATT. Mr. Speaker, I yield 2 minutes to the gentlewoman from
North Carolina [Mrs. Clayton].
Mrs. CLAYTON. Mr. Speaker, I thank the ranking member for yielding me
this time.
Mr. Speaker, I really wanted to vote for this bill. In fact, I voted
for the balanced budget agreement in the Committee on the Budget and
voted for it on the floor with reservations. I knew there were things
in there I had problems with. One of the things I had problems with,
there was not enough food and nutrition. There are great needs in terms
of hunger. It was not there. But in spite of that, it did have some
good things in it.
Some of those good things were around children's health, around
educational opportunities and tax provisions that are in there. On
balance it was good to move for a balanced budget. But now we have an
agreement that does not conform to all of those agreements. Although I
knew I had some reservation, I do not ever expect that everything I
want will be in the bill.
I can tell my colleagues, I am still looking forward to voting for a
balanced budget, but I am unable to do that now. I want to tell my
colleagues what I hope will be cleaned up after the conference. I hope
indeed my colleagues find the compassion, or the reasonableness of at
least giving people the work opportunity so they can have food stamps,
so they are not thrown off the food stamp rolls. At least this rich
country should be above that. I hope we will find in our hearts, and
with all due respect and I know the gentleman from Florida [Mr. Shaw]
is well-intending, I think when we are protecting welfare to work, age
discrimination, sex discrimination generically and do not apply the
same labor standards that are codified already in law, we are supposing
to create a new set of protections for this group of people. It would
be so much easier if we would just simply say the law that is already
on the books and we would apply it to these people just as we apply it
to everyone else. I think that is a gross error, and I think we have
made a tragic mistake to create new provisions to speak to the same
issues.
For those reasons, Mr. Speaker, I cannot support this bill as it is.
I hope we will come back from the conference with an improved bill.
Mr. BLILEY. Mr. Speaker, I yield 1 minute to the gentleman from
Georgia [Mr. Norwood], a member of the committee.
Mr. NORWOOD. Mr. Speaker, I am very pleased to support this bill for
many reasons, but one of which is that the Committee on Commerce has
done a marvelous job in trying to protect patients in the health care
field as we move more and more from fee-for-service health care to
managed care. I am extremely grateful to this committee for doing the
right things for Medicare and Medicaid, those things that we want to do
indeed for all the people of this country, but at this point we did get
things into Medicare and Medicaid.
For example, for the first time we are actually going to allow the
health care giver, the physician and the patient, to determine if they
need a specialist, or the physician and the patient will actually
determine if they need to be in the hospital, not a health care
bureaucrat or an accountant.
With that, I thank the gentleman from Florida [Mr. Bilirakis], the
chairman. I think we have a great bill, and I urge all Members to
support it.
Mr. SPRATT. Mr. Speaker, I believe the provision the gentleman
referred to was dropped in the manager's amendment.
Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from Illinois
[Mr. Evans].
Mr. EVANS. Mr. Speaker, I thank the gentleman for yielding me this
time.
Mr. Speaker, H.R. 2015 would kill the efforts of the Department of
Veterans Affairs from obtaining the resources it needs to meet the
health care needs of our Nation's veterans.
Earlier this year the administration proposed that appropriations for
VA health care remain constant at $17 billion a year for 5 years.
Clearly the ability of the VA to provide needed health care service to
the Nation's veterans could be seriously jeopardized if the resources
required to provide that care were fixed, while the costs of providing
care increased.
To offset the possible dire consequences of an appropriation freeze,
the administration also proposed that VA retain funds it collects from
third party payers, insurance companies for example, for some treatment
provided by VA to certain veterans. The VA is attempting to collect
funds for third party payments, but today those recovered funds are
simply deposited by the VA into the General Treasury.
On a bipartisan basis the House Committee on Veterans' Affairs
rejected this proposal. Our committee believed it jeopardized VA's
ability to meet veterans' health care needs and we said so. We told the
Committee on the Budget that Congress should continue to fully fund
health care through the appropriations process. The Committee on the
Budget, however, rejected our committee's views and our
recommendations.
Under the Committee on the Budget's plan, appropriations for VA
health care would not increase for 5 years and third party collections
would be retained by the VA to provide veterans' health care. But now
under H.R. 2015, the ability of the VA to provide veterans' health care
has been further undermined, again ignoring the service provisions in
the bill. This bill now makes VA's third party collections subject to
appropriations.
Mr. BLILEY. Mr. Speaker, I yield 1 minute to the gentleman from
California [Mr. Bilbray], a member of the committee.
(Mr. BILBRAY asked and was given permission to revise and extend his
remarks.)
Mr. BILBRAY. Mr. Speaker, this afternoon we are hearing much talk
about what is not in this bill and why they are finding excuses to vote
against this bill. Let me give Members a major reason to vote for this
bill for people who say they want to protect the most needy, the most
disadvantaged in our society.
Mr. Speaker, for decades this Federal Government has mandated that we
provide certain services across this country, and over the last few
years we have mandated that poor working-class hospitals provide free
emergency health care to illegal aliens. At the same time this Congress
and other Congresses have mandated that, they have walked away from the
responsibility to pay the bill for the emergency health care to illegal
aliens. This bill, Mr. Speaker, has in it a fund set aside to finally
reimburse those working-class hospitals that have been denied the
reimbursement that they have deserved for so long.
I hope my colleagues who claim to represent the poor, the needy, the
disadvantaged, the people that are not
[[Page H4574]]
getting their fair share of health care and coverage, will stand up and
say at least, look, this bill does include something that has been
denied for much too long. Support this bill and finally start paying
for the health care of the illegal aliens that we mandate to be
serviced. Quit being a deadbeat dad.
Mr. SPRATT. Mr. Speaker, I yield 2 minutes to the gentlewoman from
Hawaii [Mrs. Mink].
(Mrs. MINK of Hawaii asked and was given permission to revise and
extend her remarks.)
Mrs. MINK of Hawaii. I thank the ranking member for yielding me this
time.
Mr. Speaker, I rise in opposition to this bill. This is not a
reconciliation bill. It contains many things which are extremely
irrelevant to the budget process. Many people have said, ``Let's not
try to meddle with a welfare reform bill that was only enacted last
August. Let's see if it's going to work.''
Yet here we are today in a budget reconciliation bill that severely
cuts back on what I believe was intended when we passed the Welfare
Reform Act. We said welfare to work, because work was an ethic we
wanted to encourage. Everybody who goes to work gets paid. Yet here in
the Budget Reconciliation Act, we have a work requirement where there
is no additional compensation. We are going to take their cash welfare
check, we are going to take their food stamps and we are going to add
it together and say divide that up to the minimum wage and that is the
amount of workfare you must do for the Government or for a nonprofit
agency, without one penny of additional money.
Where is the work incentive that we are trying to build in the people
that we were so-called trying to change their mode of life, getting
them to go out and understanding the joy of earning additional money.
That is absolutely taken away from them. The protections of being a
worker are denied. Many of the protections, such as occupational health
and safety, sex discrimination, all the things that ordinary workers
would have. Family medical leave. These people who are on welfare that
are being forced to go to work, forced to take workfare with no
additional compensation will not have the protections of employees.
They are not workers. They are second-class citizens in America.
We apologized for slavery over 100 years ago. Who is going to stand
up and apologize for the slavery that is incorporated in this budget
reconciliation bill? This is really degrading. I stood in defense of
some of the rhetoric we heard in this Chamber about the importance of
work. If my colleagues are going to require work, pay the people what
they are entitled to receive.
Mr. Speaker, I rise to oppose the budget reconciliation bill because
it establishes priorities that ignore the needs and interests of the
most vulnerable of our constituents--the poor, the disabled, the
elderly, the young, and, yes, our legal immigrants.
benefits for legal immigrants
I am happy to note that the reconciliation bill exempts refugees and
asylees from the SSI and Medicaid bans for 7 years.
Similarly, it is a positive sign that the House and Senate are making
an attempt to restore SSI and Medicaid benefits to legal immigrants who
were already on the rolls when the welfare law was enacted August 22,
1996.
However, this effort falls far short of restoring coverage in a
meaningful way to elderly and disabled noncitizens.
Much has been said about how the reconciliation bill fails to live up
to the bipartisan budget agreement. The budget agreement pledged to
restore SSI and Medicaid for all legal immigrants ion the country
before August 23, 1996, and who are now or later become disabled.
Neither the House nor the Senate meet this test.
The House plan ``grandfathered'' in healthy, elderly noncitizens, but
it fails to help legal immigrants who are healthy today but who later
develop disabling conditions. It covers 75,000 fewer people than the
bipartisan budget agreement.
The Senate budget plan was a little bit better, since it would let
disabled noncitizens file for SSI through the end of this fiscal year.
Nevertheless, it still covers 55,000 fewer people than the budget
agreement does.
We could do more to help this population, but we are failing to do
so. During its deliberations, the House Ways and means Committee found
it had $2.3 billion left over. My colleague Mr. Becerra proposed a
$2.4 billion plan to cover all elderly and disabled legal immigrants in
the country, even those not already on the SSI rolls. The committee had
a rare chance to do the right thing, but they let it slip away. Now it
appears that they saved this money simply to cut the taxes of affluent
Americans who need it the least.
It is reprehensible to cut taxes for the rich, while leaving disabled
and elderly legal immigrants destitute. We should restore SSI and
Medicaid benefits to all legal immigrants, not merely those who were
covered by the bipartisan budget agreement.
healthcare
The budget contains numerous cuts and policy changes that will have a
devastating impact on the health of our most vulnerable populations.
Medicare and Medicaid will be cut by almost $130 billion over 5 years,
while individual rights to justice and State authority over the health
plans of small employers are eliminated.
The budget targets the most vulnerable populations cutting Medicare
by $115 billion over the next 5 years. Those in support of this
legislation, both in the majority and minority, must constantly
reassure themselves that these cuts are acceptable because most of the
cuts are achieved through ``reduced payments to doctors and
hospitals.'' Despite their reassurances, there can be no denying that
payment reductions to doctors and hospitals are passed on to Medicare
beneficiaries. Medicare beneficiaries pay in decreased access to care
and decreased quality of care. Medicare beneficiaries are the losers.
How many Members of Congress have received letters from constituents
protesting extended waits for doctor's appointments because their
physician can only see a limited number of Medicare beneficiaries each
month, or that their doctor has dropped Medicare patients entirely
because they lose money every time they see a Medicare patient? Do we
expect more physicians to accept Medicare patients when payments are
cut even further? Do we expect hospitals to make more room for Medicare
patients when we are reducing payments to hospitals? How do these cuts
improve access to care? Have we improved quality of care by turning
physicians and hospitals into assembly line health care drive through
windows?
The budget includes a demonstration project to test how medical
savings accounts would work in the Medicare Program. We just passed a
medical savings account demonstration project last year and we don't
even know if that will be a success. Why are we now implementing a MSA
demonstration project in Medicare?
Medicare should be the last place we should be testing MSA's. Medical
savings accounts will attract the healthiest and least expensive to
cover while the more expensive high risk individuals remain in
traditional health insurance programs. With a greater density of high
risk individuals in the traditional health plans, costs will rise
creating additional strain on Medicare. Savings produced by medical
savings accounts will be meager compared to the higher costs to cover
individuals in traditional plans.
Meanwhile, Medicaid will be cut by $13.6 billion. These cuts will
predominantly come from reductions in payments to hospitals that serve
a disproportionate share of low income patients. Cuts to
disproportionate share hospitals [DSH] will place enormous burdens on
rural hospitals and hospitals in low-income areas. Why are we cutting
from these areas when these are the populations that need access to
care the most. Many facilities in low-income or rural areas will not be
able to survive.
Also concerning Medicaid, the budget repeals the Boren amendment
which requires State Medicaid Programs to pay a reasonable and adequate
rate for facilities and services provided by hospitals and nursing
homes. Once again, do we expect quality of care and access to care to
improve by permitting State Medicaid Programs to shortchange hospitals
and nursing homes? Beneficiaries will feel the cuts and beneficiaries
will end up paying.
The budget bill attacks the rights of individuals in medical
malpractice cases and attacks the authority of States to regulate the
health plans of small employers.
This budget weakens individual protections from medical malpractice
by capping noneconomic damages in medical malpractice cases at
$250,000. This is an egregious injustice. No matter how severe the harm
caused by medical malpractice, noneconomic compensation is limited to
$250,000. To place an arbitrary limitation on the damages an individual
can receive due to medical malpractice is an atrocity. This cap
abolishes the rights from every American to receive just compensation
from medical malpractice.
To top this off, this legislation puts a 2-year statute of limitation
on medical liability cases, beginning on the date the injury occurred
or should have reasonably been discovered, and no legal action could
begin more than 5 years after the date of the alleged injury.
Absolutely absurd.
Another disturbing provision included in the budget is the Expansion
of Portability and
[[Page H4575]]
Health Insurance Coverage [EPHIC] Act of 1997, which contrary to a
popular theme that has dominated the direction of this Congress,
removes State authority to regulate the health insurance plans of small
employers and transfers regulatory authority to the Federal Government
without adequate provisions and preparations to manage the additional
responsibility. States have spent years crafting laws and regulations
to govern the health insurance plans of small employers. This bill will
preempt many carefully devised State provisions and assign authority to
an unprepared Federal Government. Not only is this irresponsible but it
is also a blatant disregard for the years of work done by State
governments.
The budget agreement abandons the budget agreement with the President
on children's health care. The budget fails to guarantee coverage for
children and gives excessively generous authority to States. We must
set minimum standards and requirements to insure that this funding is
used efficiently and effectively.
Additionally, the children's health State allocation formula is based
on the State's share of uninsured children. States that have worked the
hardest on covering their children and have had the most success will
get the least amount of funding while States that have done little will
get a windfall. This allocation system rewards States that have done
nothing while penalizing States that have made an extra effort to cover
children.
Moreover, this legislation permanently enacts the Hyde amendment
which in effect denies poor women their constitutional right to
reproductive choice, and could jeopardize their access to health
services.
This budget exemplifies how this Congress's priorities have deviated
from fundamental principles and is a dishonorable failure of our
responsibility to care for America's elderly and disabled.
welfare
Furthermore, Mr. Speaker, the most egregious provisions of this bill
will allow States to place welfare recipients in indentured servitude
by enacting a separate set of rules for welfare recipients working in
public and nonprofit organizations.
These provisions were not part of the original budget agreement and
they are not necessary to reach the budget savings called for in the
budget resolution. It is simply another attempt to cast scorn on the
poor of this country and denigrate their status in our society.
Under the bill before us today, welfare recipients who are forced to
go to work in public service agencies and nonprofit organizations to
work off their welfare benefits will not be treated as employees. The
compensation they receive will not be considered wages or salary and
they will not be afforded the same rights and protections under labor
laws as other employees in this Nation. Furthermore, States will be
able to count the combined TANF, formerly AFDC, and food stamps
benefits in calculating whether welfare workers in workfare or
community service jobs are receiving minimum wage.
What happened to equal work for equal pay, or does that just apply to
the well-off in the Nation--and not the poor?
I am frankly astounded that the majority has advocated these changes
to the welfare law because they are directly contrary to the emphasis
of last year's bill, which was to empower welfare recipients with jobs,
to promote the value of work, and to promote self-sufficiency through
experiencing the dignity of work.
How can one experience the dignity of work if they are treated
differently than every other employee, not paid a wage, not protected
by labor laws, and relegated to a position most vulnerable to
discrimination and abuse?
Under this legislation, welfare recipients, virtually all of whom are
women, will not be protected against sexual harassment and sex
discrimination as in title VII of the Civil Rights Act. They will not
be protected under OSHA, the Fair Labor Standards Act, nor the Family
and Medical Leave Act.
In short, welfare workers will be denied the most basic rights
afforded every other person in the workplace. This is shameful, and a
tragic step backward to a time when indentured servitude and slavery
was condoned in this country.
Mr. BLILEY. Mr. Speaker, I yield 1 minute to the gentleman from
Michigan [Mr. Upton], a member of the committee.
(Mr. UPTON asked and was given permission to revise and extend his
remarks.)
Mr. UPTON. Mr. Speaker, I would like to talk a little bit about why
Congress should retain the States' option to provide services as well
as insurance coverage with their child health assistance program
grants.
The children's health provisions of this budget agreement state that
``the resources will be used in the most cost-effective manner to
expand coverage and services for low-income and uninsured children with
a goal of up to 5 million currently uninsured children being served.''
Simply having a Medicaid card or private insurance plan is no
guarantee of access to health care services in the many medically
underserved rural and inner-city areas of this country. Community
health centers are located in medically underserved rural and urban
areas and may be the only source of care in many of those areas. These
centers serve one out of every six low-income American children and one
out of every seven uninsured children in the United States. In addition
to providing health care services, community health centers are
experienced in dealing with barriers to health care for children, such
as transportation and language and cultural differences.
Mr. BLILEY. Mr. Speaker, I yield 3 minutes to the gentleman from
Louisiana [Mr. Tauzin], chairman of the Subcommittee on
Telecommunications, Trade, and Consumer Protection.
Mr. TAUZIN. Mr. Speaker, let me first tell my colleagues that the
Committee on Commerce had an awesome task. Assigned to us in the budget
agreement was $2.2 trillion of budget savings over the period of time
that this budget agreement is to operate. That was a huge undertaking.
I think the gentleman has correctly pointed with pride to the work of
every member of our committee in developing for the Committee on Rules
in this package with the help of the Committee on the Budget a package
of reforms that does in fact honorably meet those goals.
On the Subcommittee on Telecommunications, Trade, and Consumer
Protection, we had a particularly arduous task of writing a section
that would meet the Committee on the Budget's requirements of spectrum
auctions and revenues to the government over the next 5 years in the
face of some very disturbing recent trends, the most recent of which
was an auction in April that yielded only one-half of 1 percent of the
amount of money that the Committee on the Budget had earlier predicted
that auction would yield for the Treasury.
Let me at first compliment the gentleman from Ohio [Mr. Kasich] and
the members of the Committee on the Budget for working so carefully
with the members of the Subcommittee on Telecommunications, Trade, and
Consumer Protection in trying to resolve that arduous task and those
numbers. What has been accomplished in the course of the last few days
through negotiations with the Committee on Rules are provisions to help
ensure that the next round of spectrum auctions are conducted much more
responsibly.
Number one, it is clear from the language that we are going to vote
on today that spectrum auctions of additional spectrum made available
over the next 5 years for public use will be conducted with several new
directions: No. 1, those spectrum auctions will be conducted after a
time has been allowed for the current round of spectrum sales to clear
the financial markets. As my colleagues know in the last successful
auction, whereas we received bids of $23 billion, only about $11
billion was actually paid in because of difficulties in getting that
spectrum out.
The new bill provides, in effect, that the new auctions will give
enough time for bidders to know what is coming down the pike and will
give enough time for the market to clear. The new provisions require in
fact the FCC to examine new computer models for auctioning, such as the
ones carried out in California where block auctioning is actually
attempted to yield higher results for the Treasury. In short, those
improvements have been added to the bill.
We have retained in this bill the committee's mark that specifies
that the FCC can permit the continued analog broadcast as long as more
than 5 percent of a community have not yet switched over to digital as
this digital transformation occurs.
{time} 1630
We have retained the committee language that there must be minimum
bids in these auctions. No more should we have bids on auction of a
dollar at the marketplace.
In short this is a good package. I urge its adoption and commend the
committee for its fine work.
[[Page H4576]]
Mr. PALLONE. Mr. Speaker, based on what was said before, it appears
that the Republicans have significantly more time, so I reserve the
balance of my time.
Mr. SHAYS. Mr. Speaker, I yield such time as he may consume to the
gentleman from Michigan [Mr. Smith].
(Mr. SMITH of Michigan asked and was given permission to revise and
extend his remarks.)
Mr. SMITH of Michigan. Mr. Speaker, my vote will be in favor of
passage of this bill, and H.R. 2037, the budget enforcement provisions,
have been made part of this bill that will help us make sure that we
enforce the provisions of our intent to balance the budget and make
these spending cuts.
Congressional Budget & Impoundment Control Act of 1974
Permanently extends the requirement that budget resolutions
cover a five-year period.
Similarly, extends indefinitely the enforcement of the
five-year spending and revenue levels set forth in budget
resolutions through points of order.
Simplifies and updates points of order that are used to
enforce the budget resolution's spending and revenue levels.
Provides for adjustments in the budget resolution levels
for legislation appropriating funds for designated
emergencies, arrearages and the International Monetary Fund.
Eliminates the need to waive the Budget Act for a reported
bill that violates the Act but is cured by a self-executing
rule. In such cases, the point of order no longer lies
against the bill.
amendments to the balanced budget and emergency deficit control act of
1985
Adjusts and extends statutory discretionary spending
limits, which are enforced through sequestration, through
fiscal year 2002.
Provides for adjustments in the discretionary spending
limits for appropriations for emergencies, arrearages, and
the International Monetary Fund.
Extends pay-as-you-go requirements, which provide that
entitlement and tax legislation must be fully offset, through
fiscal year 2002.
Modifies baseline that is used to ``score'' legislation so
that committees get credit for eliminating entitlement
programs.
Eliminates accrued paygo balance and savings from
reconciliation to ensure that all savings are used for
deficit reduction.
Mr. SHAYS. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from
Illinois [Mr. Fawell].
(Mr. FAWELL asked and was given permission to revise and extend his
remarks.)
Mr. FAWELL. Mr. Speaker, I rise in support of the balanced budget
bill and in particular the provision of the bill that will expand
affordable health insurance to millions of workers, their spouses and
their children. By including the Expanded Portability and Health
Insurance Coverage Act, known as EPHIC, in this reconciliation, we
advance bipartisan legislation which will make insurance available to
millions of uninsured Americans.
The EPHIC legislation is consistent with the budget agreement's goal
of expanding coverage to uninsured children.
The problem of the uninsured, both children and adults, is
predominantly a problem of small businesses lacking affordable health
coverage. Over 80 percent of the 40 million uninsured Americans live in
families headed by a worker, most often in a small business. And over
80 percent of uninsured children are in a family headed by a worker,
again, usually in a small business.
EPHIC addresses this problem by giving franchise networks, union
plans, and bona fide trade, business and professional associations the
ability to form group health plans. EPHIC gives retailers, wholesalers,
printers, agricultural workers, grocers, churches, organizations such
as the chambers of commerce and NFIB, the National Federation of
Independent Business, the economies of scale and affordable coverage
that large businesses have had for 23 years under the Federal ERISA
law. In other words, finally the little guys will have what the big
guys have had for decades, and I refer to the economies of scale to be
able to have affordable health insurance for their employees.
In hearings before my subcommittee, witnesses estimated that small
businesses could save between 30 and 60 percent in overhead costs and
that up to one-half of the 40 million uninsured Americans would find
affordable coverage in the private market under EPHIC.
Mr. Speaker, this tremendous expansion of coverage can be realized
without spending one single tax dollar, without any government
subsidies or any government mandates.
EPHIC is supported by nearly 100 organizations representing small
businesses, large businesses, the self-employed, churches, hospitals,
medical groups, agricultural, and rural interests and insurance
companies. The bill currently has 152 cosponsors, including 23
Democrats.
Mr. Speaker, I think this is a sound idea whose time has come.
Mr. PALLONE. Mr. Speaker, I yield myself 5 minutes.
Mr. Speaker, the best way for me to illustrate the flaws that are
contained in this bill is to focus on the harm it does to our Nation's
children. Beginning with children's health care, a majority of this
House, myself included, voted for the balanced budget resolution which
promised $16 billion to cover five million of the 10 million uninsured
children in America today. But even though most of us wanted to cover
all 10 million, we felt that acting in good faith we could get to 5
million now and then address the remaining later on. Well, guess what,
Mr. Speaker, this bill does not even cover 1 million children.
According to the Congressional Budget Office, the Republican
leadership's proposal would provide coverage for about half a million
children. The CBO assumes that much of the 16 billion will be passed on
to hospitals and other providers who get shafted under this plan and
basically not to purchase health insurance for children.
The Republican leadership, in effect, which is purporting to be the
party of fiscal conservatism, takes $16 billion and, in my opinion,
throws it away. The Democrats offered several alternatives to this
impotent policy. First we sought to plug up the so-called direct
services loophole that lets a State spend its money on purposes other
than insuring kids. The Republicans defeated that amendment in the
Committee on Commerce. Then Democrats proposed to expand Medicaid and
outreach to cover more kids with an existing health insurance program
that already works. We know that Medicaid works, but the Republicans
said no to that too in the Committee on Commerce.
And finally we put forward a proposal by the Democratic Caucus Health
Care Task Force, a comprehensive approach to expand Medicaid, give
States matching grants to cover kids above the income levels that
qualify for Medicaid and require private insurance companies to provide
kids only policies at reasonable costs, and the Republicans shot that
down too in the Committee on Commerce and again in the Committee on
Rules when we proposed it the other day.
We are considering a bill today which violates the balanced budget
agreement and which I supported as did most of my colleagues here. The
bill we are considering today takes health care money away from
children, it does not expand health care, it takes it away from
children. This is not what we intended when we supported the balanced
budget agreement, so we will not support this bill today. It is just
another Republican attempt to cost shift, and unfortunately, Mr.
Speaker, the cost shift is right on the backs of our Nation's children.
Mr. Speaker, I yield such time as he may consume to the gentleman
from Massachusetts [Mr. Kennedy].
Mr. KENNEDY of Massachusetts. First of all, Mr. Speaker, I appreciate
the gentleman from New Jersey yielding this time to me. I think we all
ought to recognize the fine work that the gentleman from New Jersey
[Mr. Pallone] and others in the caucus have done in trying to bring
attention to the fact that we have so many children in this country who
still do not have basic health insurance.
Most people think that health insurance is provided as a matter of
right to kids in America. The truth of the matter is that amongst the
very poor children, that is true under the Medicaid Program. But again,
working families, the children of taxicab drivers, the children of
waiters and waitresses, working families simply do not have health
insurance; and that is where this bill, I think, has had some dramatic
failures.
I wanted to point out to my friend from New Jersey, Mr. Pallone, that
there is an additional problem with this language that is contained in
this bill. The way the actual funding for the
[[Page H4577]]
program would operate would allow the money to go to States where there
are larger numbers of uninsured children. As a result, States like
Massachusetts and Pennsylvania, States like Florida and Tennessee would
be dramatically hurt under this proposal because in those States they
have already taken action to insure large numbers of uninsured
children. As a result, where States have chosen to step in and take
responsibility for those kids, those States would actually be penalized
under the formula that was passed by our Republican colleagues.
So I think that it is important that we have an opportunity to change
this, and I was surprised that the Committee on Rules, particularly as
the chairman comes from New York, where they have a significant
program, did not allow us to offer an amendment to change that funding
formula.
Mr. PALLONE. Mr. Speaker, I appreciate the comments of the gentleman
from Massachusetts [Mr. Kennedy].
Mr. Speaker, I yield such time as he may consume to the gentleman
from Ohio [Mr. Brown].
Mr. BROWN of Ohio. Mr. Speaker, I appreciate too, as the gentleman
from Massachusetts [Mr. Kennedy] said, the work the gentleman from New
Jersey [Mr. Pallone] has done on children's health. I am concerned in
what has happened with Republican efforts to, quote unquote, cover some
of these 10 million children that do not now have health insurance.
Pretty clearly, the Democratic idea of using Medicaid, a program that
is in place where administrative costs are low, a program that has a
couple of decades of working effectively and efficiently to insure poor
and near-poor children; it is in place, it works, it makes sense to do
that.
I am concerned with the Republican plan for a bunch of reasons:
First, there was talk earlier of using all kinds of tax schemes. I am
concerned about the tax schemes that the Republicans tried. Now I am
concerned about this whole block grant effort that the Republicans want
to use to just turn money over to the States, when it is clear from all
kinds of analyses, whether it is the legislative budget office or other
analyses, that show that in fact this money likely will not be there to
insure children. It is more likely to be frittered away by Governors,
and this is sort of something the Governors want because they want to
play with this money.
We should have learned this in the last 5 years of what happened to
something called disproportionate share, where all kinds of money went
to the States that was not used for health care. Some cases it was used
for things like highways, and we want to make sure this money, $16
billion goes to insure millions, not a few hundred thousand, but
millions of children that now do not have health insurance directly
through a Medicaid program, not frittered away so the Governors have
some kind of slush fund to plug holes in their budgets. It simply does
not make sense that way.
The SPEAKER pro tempore. The time of the gentleman from New Jersey
[Mr. Pallone] has expired.
Mr. SHAYS. Mr. Speaker, I yield 2 minutes to the gentleman from
Delaware [Mr. Castle], the former Governor of Delaware.
Mr. CASTLE. Mr. Speaker, I thank the gentleman for yielding this time
to me, and I rise in strongest support possible of H.R. 2015, the
Balanced Budget Act of 1997.
This budget deal explicitly outlines the parameters by which this
Congress will balance the Federal budget and reduce the deficit to zero
by the year 2002. This is a truly historic achievement which
demonstrates that, when we work in a bipartisan fashion, we can achieve
the mission of fiscal restraint our constituents elected us to achieve.
Our constituents have become increasingly cynical about government, and
agreement will help restore confidence in the institutions and
processes of government. It represents a triumph of the political
system and a fulfillment of the voters' 1996 command to Congress to
help solve our budget problems in a bipartisan fashion.
Passing the first balanced budget since man walked on the moon is a
solid and constructive beginning. We need to look no further than the
States which started this process about 25 years ago and in that time
has started to balance their budgets, improve their economies and
receive ratings of excellent or very good for all their budgetary
restraints and have done a superior job. Our constituents will benefit
from this.
It has been said by Alan Greenspan that interest rates may lower by 2
percent, and that is tremendous when we look at investment returns,
lowering credit card and car loan rates, reducing mortgage payments,
lowering consumer products' cost and creating more jobs and of course
producing a better environment in which to provide tax relief.
With this 5-year budget we begin a long-distance marathon which will
require us to remain steadfast in our desire to ensure that this budget
agreement translates into a budget that delivers on its promise of less
spending, a smaller government and tax relief for all Americans even
after the year 2002. While I am concerned that stronger budget
enforcement mechanisms were not included to ensure the deficit revenue
and spending targets will be met, I am pleased that the Republican
leadership has agreed to address this issue in July. This is a solid
step forward and will help show the American people that now more than
ever the Congress is engaged and committed to achieving a balanced
budget.
Mr. PALLONE. Mr. Speaker, I reserve the balance of my time.
Mr. SHAYS. Mr. Speaker, I yield 2 minutes to the distinguished
gentleman from Virginia [Mr. Moran].
Mr. MORAN of Virginia. Mr. Speaker, I actually rise in support of
this budget agreement, but I particularly want to emphasize one aspect
of it that has not gotten sufficient attention. All of us are concerned
about the fact that there are about 41 million people who are uninsured
in this country who cannot get the health care that they need. Now 80
percent of them are working, they are working; that is the main point,
and they are working for small employers. But we cannot figure a way to
get affordable, accessible health insurance to them.
The Fawell bill, which is included in the reconciliation bill, is the
way to do that. It enables them to pool their employees so that they
have leverage with insurance companies and they can purchase insurance
for the first time for a large part of these 41 million uninsured
people. Most of them are children.
{time} 1645
So I would hope that we would do this. It helps labor unions, it
helps small businesses, it helps trade associations, it helps the
American people who desperately need affordable health insurance.
Let me say, Mr. Speaker, I do not disagree with almost all of the
objections that have been raised. I do object to the conclusion. I do
think we ought to vote for this budget agreement. It moves us forward.
I think we have made a major step in moving from an annual bookkeeping
exercise to one where we debate real national priorities. We are going
to have an opportunity to improve it on the Senate side, in the
conference agreement, and certainly the President is going to insist
that many of the Democrats' most serious objections are taken care of
in the conference agreement.
I think that we ought to vote for this budget agreement, for this
reconciliation package, and we certainly need to include the Fawell
amendment in it if we want to really address people who need help with
their affordable health insurance.
Mr. SHAYS. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from
Missouri [Mr. Talent], a member of the Committee on Education and the
Workforce, but also the chairman of the Committee on Small Business.
Mr. TALENT. Mr. Speaker, I thank the gentleman for yielding me this
time. I want to congratulate him on his outstanding work. I look
forward to supporting this afternoon a historic bill that will provide
a balanced budget for the American people, and then tomorrow, to
support a bill that will provide tax relief within that framework. It
is a historic and outstanding and bipartisan achievement and all of
those behind it deserve congratulations.
I want to talk just a moment about a very important part of this
bill. It is a part of the bill designed to preserve the integrity of
the works provisions in last year's welfare bill, a bill that is
working around the country. For the
[[Page H4578]]
first time, welfare caseloads around the country are dropping. People
are substituting paychecks for welfare checks, and that is so good for
them and so good for their children and so good for their communities,
but there is a danger here.
There are some folks in this body and some at the other end of
Pennsylvania Avenue who want to adopt a provision that would make the
work provisions unworkable, unaffordable to the States and unworkable
in terms of their purpose.
Let me describe it with an illustration. Right now the work
provisions require that certain parts of the able-bodied people on
welfare have to go to work and if they cannot get a job in the private
sector, they have to provide community service, and that is good. Let
us suppose that they are helping out as a clerk, as a part-time clerk
in some Government office 20 hours a week.
What these people are talking about doing would require that these
individuals be paid comparable wages with people who are clerks in the
area, maybe, $7, $8, $9 an hour. Plus they continue to get Medicaid,
subsidized housing, food stamps, and they get all the other web of
protections that we provide employees in this country: Unemployment
compensation, workers' compensation, Family and Medical Leave Act, thus
increasing the cost of this program, making it unaffordable to the
States and turning it into a program that sucks people onto welfare.
Because how unfair would that be to the individual who does not go on
welfare and just gets a job as a clerk? All they have is their pay and
the protections that we give employees. They do not get Medicaid or
subsidized housing or food stamps.
The work provisions are designed to create a bridge from welfare to
work, and by making it unaffordable we would knock down that bridge so
that people would never get from welfare to employment. It was not
intended in last year's bill, we should not do it now, it is the wrong
thing to do.
What we provide in our bill is that individuals have to be paid the
minimum wage; the FDC and their food stamps have to constitute the
minimum wage. We provide them protection from discrimination, from
unhealthy or unsafe conditions, and they can continue to enjoy their
other welfare benefits. That is the way to go. Keep the workfare
provision strong. Support this bill.
Mr. SHAYS. Mr. Speaker, I yield myself 30 seconds to point out to the
gentlewoman from Hawaii who spoke earlier that in the State of Hawaii,
the benefit that a welfare recipient receives is $13.65 an hour just
for the cash payment and the food stamps. That is what they are
required to pay off in a 20-hour work period. In the State of
Connecticut, it is $10 an hour.
The kindest thing we can do for someone is to move them off welfare
and into work, and this is what our legislation does.
Mr. Speaker, I reserve the balance of my time.
Mr. PALLONE. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman
from Arkansas [Mr. Berry], one of my colleagues on the Democratic
Health Care Task Force which put together a very comprehensive program
to reach and cover the 10 million children that are uninsured.
Mr. BERRY. Mr. Speaker, I rise today in reluctant opposition to this
budget package. I am a strong believer in the need to balance the
Federal budget. I cosponsored legislation that would require a
constitutional amendment to balance the budget.
Three weeks ago I supported the spending goals laid out in the budget
resolution. Today, however, I cannot support the policies that have
been crafted to stand behind those numbers.
One of the most troubling policies contained in this budget is the
children's health reform package. Fiscally irresponsible, $16 billion,
no strings attached, giveaway of the taxpayers' dollars. I am a strong
supporter of ensuring that every child in America has access to
affordable health care. However, this proposal does nothing to ensure
that the $16 billion will go to those who need it most, the children.
In fact, the Congressional Budget Office estimates that the $16 billion
we are spending will cover only 520,000 children.
Let us do the math. Mr. Speaker, 520,000 children, $16 billion,
$31,000 per child, $6,000 per child per year. Surely our hardworking
taxpayers deserve a more cost-effective approach than this. Our
approach allows States to expand the Medicaid Program, outreach to the
children, and do a better job with the $16 billion. Our plan is more
prudent. I urge my colleagues to support this alternative.
Mr. PALLONE. Mr. Speaker, I yield 1 minute to the gentlewoman from
Oregon [Ms. Furse].
Ms. FURSE. Mr. Speaker, what I would like to do is just sort of
explain in simple terms what this Democratic alternative is. What we
felt was that we needed a private-public partnership, that Government
cannot do everything, private industry cannot do everything, but
together we can attempt to reach those 10 million children. It is a
disgrace, it is a disgrace that 10 million children have no health
insurance.
So our package says, reach out to the kids who are eligible for
Medicaid, bring them in. Provide a plan that will increase the Medicaid
opportunities, and then do some insurance reform, simple insurance
reform that will say, insurance companies, you have to provide a kids-
only policy, one that will not be denied to children. So if a family
has no health insurance, maybe they are not eligible for Medicaid, but
they cannot afford $400, $500 a month, there will be a policy available
for them, a kids-only policy. Can it be done? Absolutely. In the State
of Oregon we have a kids-only policy, $35 a month. I ask my colleagues
to support this alternative because it reaches out to all the children.
Mr. SHAYS. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from
Georgia [Mr. Kingston].
Mr. KINGSTON. Mr. Speaker, I thank the gentleman for yielding me this
time.
Mr. Speaker, 1969: The Vietnam war, Woodstock, Neil Armstrong was on
the Moon, Jimi Hendrix experience, Mod Squad, Walt Disney was not even
controversial yet, Richard Nixon was President and the budget was
balanced, but that was the last time.
Today our national debt is over $5 trillion. That is an inconceivable
amount of money.
Let me illustrate. One million seconds equals 12 days. One billion
seconds equals 32 years. One trillion seconds equals 32,000 years. This
is not acceptable to America's children.
If we balance the budget through this bill, we will lower interest
rates. Lowering interest rates 2 percent on a $75,000 home mortgage
over 30 years will mean middle-class taxpayers pay $37,000 less on
their home mortgage. If we balance the budget with this bill, we can
create more jobs because we will have more economic growth, more
opportunities for Americans, minorities, and middle-class citizens.
Finally, we can have lower taxes, because the burden of a huge
Federal debt and interest on that debt will not be as great.
Mr. Speaker, this bill is good for the middle class, it is good for
the children, it is good for the United States of America, and I urge
my colleagues to join me in supporting the balanced budget.
Mr. SHAYS. Mr. Speaker, I yield 2 minutes to the gentleman from Ohio
[Mr. Boehner], our conference chairman.
Mr. BOEHNER. Mr. Speaker, the House is voting today on a plan to make
the government smaller, less costly, and more responsible and
accountable to the people that it serves. Members from both sides of
the aisle have crafted it, and appropriately so. There is no single
issue that should unite us more than eliminating the Federal budget
deficit, because when the Government fails to balance its budget, it is
not just being irresponsible, it is restricting the freedom of ordinary
Americans to realize the American dream.
More than perhaps any other quality, Americans cherish the notion of
freedom. But Americans recognize that with freedom comes
responsibility, a responsibility to live within our means, to realize
that our actions today will impact the lives of our children tomorrow.
They live within those rules and they expect no less from their
Government.
[[Page H4579]]
The plan we are voting on today is evidence that Washington is at
last beginning to take its responsibility seriously. It reduces the
growth of Government spending by nearly $1 trillion over the next 10
years, reversing the legacy of bankruptcy that we are handing off to
our children. It saves Medicare from bankruptcy, ensuring that seniors
of today, and tomorrow, will continue to have this vital program well
into the next century. It allows tax relief for families, and
individuals, at every stage of their life so they will have the freedom
to save and plan for their future.
Mr. Speaker, the American people are the real winners in this plan.
By taking this next step toward balancing the budget for the first time
in a generation, we take another giant leap toward restoring their
freedom to chase the American dream. It is our responsibility to follow
through on our promises that we have made to them.
Mr. SHAYS. Mr. Speaker, I yield 1 minute to the gentlewoman from New
Jersey [Mrs. Roukema].
(Mrs. ROUKEMA asked and was given permission to revise and extend her
remarks.)
Mrs. ROUKEMA. Mr. Speaker, I would say that I do believe that we
should pass this program. Balancing the Federal budget is absolutely
essential to protect the Nation's short-term, and long-term financial
health and certainly to ensure our children and grandchildren a greater
tomorrow.
I want to especially thank the chairman of the committee for his work
that he is going to do, specifically mentioning the needs of New Jersey
with respect to the Medicaid needs and the DSH formula.
I do want to say that I have a question and a reservation with
respect to the Small Business Association ERISA reforms of the bill. I
will be moving to correct those reforms. In my opinion, they do not
belong in this bill, they really should be separated out, and I would
hope that we could work on that in conference. But without reservation,
we must support this as an ongoing program and assure that we are
keeping our promise to the American people.
Mr. PALLONE. Mr. Speaker, I yield 1\1/4\ minutes to the gentlewoman
from California [Ms. Eshoo].
{time} 1700
Ms. ESHOO. Mr. Speaker, as the American people listen to us this
afternoon as we engage in this great and important debate about our
Nation's budget, it really is a statement of our values. The President
came to the Congress, and in his State of the Union Message delivered
part of the message, there were 10 million uninsured children relative
to health care in our country.
The parties came together and said, this is a priority. We then went
to write in, to fill in the blank, of how we would plan to insure the
10 million uninsured children in our country. There is only one plan
that has been advanced that actually works and reaches out to the
majority of the children in our country. It has not created a new
entitlement, there are no unfunded mandates, but neither is it a
giveaway to our Nation's Governors. It puts children first by building
on the public system; by saying to the insurance companies, it says to
the insurance companies that you can indeed offer children-only
insurance policies. It rewards States that are doing even more for
children, and it is the only plan, according to the CBO. The CBO says
that the Republican plan will cover only 520,000. That is a deficit for
our Nation.
I urge that we support this plan. I will not support the budget plan
contingent upon this.
Mr. PALLONE. Mr. Speaker, I yield 1 minute to the gentleman from
California [Mr. Waxman].
Mr. WAXMAN. Mr. Speaker, I thank the gentleman for yielding time to
me.
Mr. Speaker, I will put a longer statement in the Record on the
health aspects of this budget reconciliation bill, but I do want to
point out that we are missing an opportunity to cover children as fully
as we might in the most certain and effective way we can.
What we have in the bill is a good start. What we have in the budget
is $16 billion, but it would be most effective if we were certain that
the money would be spent to buy guaranteed coverage with the benefits
that children need.
We have a model for this and it works. It is called Medicaid. We
ought to help States do a better job with that program, and with the
block grant money, we ought to be sure it is spent on what we intend,
to buy health insurance coverage for uninsured children. It is not
supposed to be a pot of money for States to refinance their own health
services facilities. It is not supposed to be a replacement for DSH, it
is supposed to help kids.
We can do better. In Medicaid and Medicare, while there are some
positive steps, it seems to me on balance I cannot endorse this
legislation.
Mr. Speaker, we are missing an opportunity today to assure that we
are extending coverage to millions of uninsured children in the most
certain and effective way we can.
We have $16 billion to spend here. This is not enough to cover all
the uninsured children, but it is a good start.
And it will be most effective if we are certain that the money is
being spent to buy guaranteed coverage, with the benefits that children
need.
We've got a model for this--and it works. It's called Medicaid. We
ought to help States do a better job with that program.
And with the block grant money, we ought to be sure it's spent on
what we intend: to buy health insurance coverage for uninsured
children. It's not supposed to be a pot of funds for States to
refinance their own health service facilities. It's not supposed to be
a replacement for DSH. It's supposed to help kids.
We can do better.
And the changes this bill makes in Medicaid and Medicare are not
acceptable.
I recognize that these provisions are dramatically improved from
those brought before this House in the last Congress. But being better
than something that was totally unacceptable is not good enough.
I also recognize that there are some things in this bill,
particularly related to Medicare, that are very positive. The
preventive care benefits added to Medicare are long overdue, and will
be very helpful to Medicare beneficiaries.
But on balance, I cannot endorse this legislation.
I cannot vote in support of the establishment of medical savings
accounts [MSA's] in the Medicare Program. I know this is a
demonstration--but it is a massive one. And it is a bad one.
MSA's cost Medicare money. They cost $2 billion. This is money that
should be left in the Medicare Trust Fund or spent on benefits that all
Medicare beneficiaries need. Instead, we're spending $2 billion to
benefit people who are healthier and wealthier. They leave the many
Medicare beneficiaries of moderate income, the ones whose health is
more precarious, bearing the cost. That is wrong.
The changes in how managed care organizations will be paid by
Medicare are also extreme. They will cause severe problems in higher
cost urban areas. An initial attempt to rationalize payments became a
free-for-all in which HMO's in urban areas, and the beneficiaries who
are enrolled in them, are the losers.
And while this bill is better as a result of the amendment approved
by rules in its protection for low-income Medicare beneficiaries, it
does not meet the budget agreement terms of full payment of the
Medicare premium for people below 150 percent of poverty.
Many of the changes this bill makes in Medicaid are also not ones I
can support. Put simply, the cuts in the disproportionate share program
are too large, and they are not designed to protect either the
hospitals that serve very large populations of low-income people, or
States which have spent all of their DSH moneys on these kinds of
hospitals.
I cannot vote for a proposal that will result in a 20 percent cut of
DSH dollars in my own State of California by 2002. I cannot endorse a
policy that leaves large public hospitals, children's hospitals and
hospitals with low-income utilization rates of 25 percent or 30 percent
without first call on the funds available.
I cannot support legislation that undermines a poor woman's right to
choose.
Finally, I look at the bill currently being debated by our colleagues
in the Senate, and I see a number of provisions that will be brought
into conference that would make this bill considerably worse.
It is not good enough now. It should be made better. It must be made
better before it will have my support.
Mr. PALLONE. Mr. Speaker, I yield 30 seconds to the gentlewoman from
Texas [Ms. Jackson-Lee].
(Ms. JACKSON-LEE of Texas asked and was given permission to revise
and extend her remarks.)
Ms. JACKSON-LEE of Texas. Mr. Speaker, I acknowledge to the gentleman
from Florida [Mr. Shaw], just as a correction, that I voted for the
[[Page H4580]]
Deal amendment on welfare reform, which really worked, but I rise today
because I do not want to pit children against my hospitals in Texas. I
do not want to give a windfall to those Governors who may not focus on
the need to insure the 10 million children who are uninsured.
We have a real health plan that does not pit hospitals against
children. It is extremely valuable that we move forward on a budget
reconciliation that protects workers, protects children, and provides
for the hospitals in the State of Texas.
Mr. Speaker, I rise today to express my vehement opposition to H.R.
2015, the Budget Reconciliation Act. The problems with this bill are
almost too numerous to list. However, I am compelled to report to the
American people some of the most dismal aspects of this legislation.
First, H.R. 2015 contains a provision which reduces Medicaid spending
by $11.4 billion, primarily by reducing payments to hospitals that
serve a disproportionate share of low-income patients. The
Disproportionate Share Hospital [DSH] program was created to ensure
health care for the elderly, the indigent and the Nation's young
people. It was specifically designed to reimburse hospitals that serve
a disproportionate number of uninsured or indigent persons.
The DSH program is an integral part of the Medicaid Program in my
home State of Texas. DSH is critical in providing quality health care
to Texans who cannot otherwise afford it. A reduction in payments to
these hospitals, therefore, discriminates against Texas because it
singles out high-DSH States for cuts.
Without DSH funding, many of Texas' rural hospitals cannot continue
to operate. Many counties will lose access to a medical center for
hospital, outpatient and physician-based care. When those hospitals
which serve the largest proportions of poor, low-income seniors and
young persons suffer severe cuts in Federal funds, tens of thousands of
low-income Americans will feel the pain.
Also included in this bill is a troubling provision commonly referred
to as the Hyde amendment. This discriminatory provision would
permanently prohibit the use of funds to pay for any abortion or to pay
for any health plan that covers abortion, except if the life of the
woman would be endangered, or if the pregnancy was the result of rape
or incest. The inclusion of this language in the budget reconciliation
bill would permanently write into Federal law a ban on abortion funding
for low-income women and thus deny them access to vital reproductive
health services that are available to others. This places disadvantaged
and poor women in a substandard health environment which says to them
that we do not care. This ban could force some women to resort to
unsafe alternatives and others could suffer delays resulting in more
risky procedures. One way or another, society will have to bear the
costs of providing medical and support services for the eligible
recipients under this block grant who are not able to terminate crisis
pregnancies.
Let me now turn my attention to our Nation's immigrants. H.R. 2015
restores benefits to those low-income legal immigrants who were
receiving SSI benefits when the welfare reform legislation was enacted
last August and lost those benefits. However, this is nothing more than
a Trojan Horse because the bill does not provide SSI benefits to legal
immigrants who were in the country as of last August, were not
receiving benefits in August, but who later became disabled despite the
fact that this was part of the budget agreement. The President has
threatened to veto the bill because of the absence of these benefits.
We should not allow this Trojan Horse to leave the floor of the House.
Finally, the funding in H.R. 2015 for a children's health care
initiative is turned into a block grant which even the Congressional
Budget Office estimates may only cover 500,000 additional children--not
the 5 million goal children agreed to in the budget negotiations. This
seems to me to be obvious evidence that the concern some Republicans
have expressed for the 10 million children without health care in our
country, is little more than lip service. If their concern was deeply-
felt we would find that H.R. 2015 provided a sincere effort to reach as
many of these children as possible. It does not.
Mr. Speaker, I, like many of my colleagues would like nothing more
than to vote for legislation that is a step toward bringing the
national budget into balance and eliminating the deficit. I believe,
however, that it is possible to do this in a manner that is balanced
and compassionate. H.R. 2015 is neither and for this reason I oppose it
and urge my colleagues to do the same.
Mr. SPRATT. Mr. Speaker, I yield the balance of my time to the
gentleman from Texas [Mr. Stenholm].
The SPEAKER pro tempore [Mr. Dreier]. The gentleman from Texas [Mr.
Stenholm] is recognized for 1\3/4\ minutes.
Mr. STENHOLM. Mr. Speaker, I rise in support of this reconciliation
bill. This bill takes another important step toward achieving a
balanced budget. As one who believes that enactment of a fair and
responsible plan to balance the budget by 2002 and beyond is critical
to the future of our country, I believe it is extremely important that
the House vote today to send this bill to conference and keep the
process moving.
The efforts of President Clinton and Congress have resulted in 5
consecutive years of declining deficits and the lowest deficit since
the Carter administration. The agreement builds on this tremendous
achievement, and continues the glidepath to a balanced budget.
I am gratified that in numerous instances this reconciliation bill
reflects the influence of Blue Dog budgets. The savings levels and the
policies for Medicare and Medicaid and other programs are quite close
to the savings levels and policies we predicted would comprise a
reasonable compromise.
Anyone who has ever tried to lead knows there are a dozen attacks on
why a plan is bad for every one suggestion of how it might be improved.
I remain solidly in the camp of those who will work for a constructive
compromise.
In that vein, I congratulate the President and his staff, the
gentleman from Ohio [Mr. Kasich], the gentleman from South Carolina
[Mr. Spratt], and all of their staff for their hard labors which have
brought us to this point. This has been a good-faith effort to work out
the countless policy issues that need to be resolved for the budget
agreement to achieve a savings in a fair and equitable manner.
I remain concerned about the impact of some of the policies of this
reconciliation bill, and particularly I am very concerned about the
impact that the policies for achieving the savings in the Medicaid
Disproportionate Share Program will have a harmful effect on small
rural and inner-city hospitals.
However, we need to remember that this bill has a long way to go
before it is enacted into law. The administration will continue to work
with Republicans and Democrats to work out these remaining problems. My
primary concern is the lack of meaningful enforcement, but we will yet
have another attempt at making that correction.
Mr. PALLONE. Mr. Speaker, I yield the balance of my time to the
gentleman from California [Mr. Fazio].
The SPEAKER pro tempore. The gentleman from California [Mr. Fazio] is
recognized for 1\1/2\ minutes.
Mr. FAZIO of California. Mr. Speaker, I am very disappointed at this
point. I voted for the budget resolution, and I looked forward to the
bipartisan cooperation we saw then put in place so we could vote today
to send this bill to conference in the same bipartisan manner.
But the bill comes up short. We do not need a provision to take the
Hyde language on abortion and make it permanent law. We need to pay
more attention, for example, to the way in which we try to extend
health care to the 10 million kids in our society that are not covered
by insurance today.
First of all, we need an outreach program, because we know there are
3 million of them that are currently eligible for Medicaid who are not
part of it. We need to expand the Medicaid program to try to broaden
coverage throughout our States. On top of that, we need insurance
reforms that will make it possible for parents to buy insurance for
their children if the children do not get it where they work, or if the
children are not covered.
Most of all, we need to work with the States to go after the kids of
the working-poor families who are not covered, but simply, to make a
grant to the States and tell them they can use it for almost any
purpose is going to do nothing more than supplant existing State funds.
We need to expand affordable insurance coverage and not simply go
through a shell game with State and Federal dollars.
There are ways we can make this a better bill. I hope I can support
it when it comes back from conference. I am optimistic I can. I want to
give credit to the gentleman from Ohio [Mr. Kasich], my good friend,
and the gentleman from South Carolina [Mr. Spratt]. They have resolved
a number of problems before they came here
[[Page H4581]]
today. They have not gone as far as they must go.
The process should go forward, but those of us who remain unhappy
with the progress we have made today need to keep before the President
and this Congress the pressure to do a better job. I look forward to
voting for a better job, and I hope it can be accomplished.
Mr. SHAYS. Mr. Speaker, I yield the balance of my time to the
chairman, the gentleman from Ohio, [Mr. John Kasich], the gentleman who
began this long march toward a balanced budget in 1989.
Mr. KASICH. Mr. Speaker, let me first of all compliment my colleague
and friend, the gentleman from South Carolina [Mr. Spratt]. He has been
obviously in a difficult position with some of his very top leadership
aggressively opposing the agreement. He has also been a party on a day-
to-day basis to the difficulty of being able to write this whole
agreement, which has taken a period now of about 6 months. I want to
thank him for his support. But I think the gentleman from South
Carolina really is in a position to be able to understand what we have
gone through on this, and to understand the good-faith efforts that
have been made by all sides.
First of all, if we want to have an excuse to vote no, Members can
come up with anything they want. I am very disappointed to see some of
my friends and colleagues on the other side of the aisle coming up with
nothing more than excuses to oppose this bill that is before us today,
because the White House supports it. The reason why the White House
supports it is because we have kept the spirit of this agreement.
Imagine this: about 4 or 5 months ago we started negotiating the
entire operation of the Federal Government in an effort to balance the
budget and come up with tax cuts. We ended up reaching an agreement. We
kept our word to obviously let this House vote on two separate bills,
the bills to cut spending to balance the budget, and tomorrow a bill to
reduce the taxes and give some more power back to the American people.
We took this agreement, which was laid out in many, many pages, and
we went to our committee chairmen, all of whom felt very strongly about
the fact that they wanted to design some policies the way they thought
made more sense.
I will just give the Members one example. The gentleman from Florida
[Mr. Shaw] decided that he thought it was essential that we cover those
people who are currently disabled who might find themselves off the
rolls in a review process, our noncitizens. He decided it was more
compassionate to help those people than to help a group of people who
were here before the welfare bill was passed who might become disabled.
This was just an honest difference in terms of how we can spend money
to be compassionate for people. It would be wrong, it would be unfair,
and it would be unjust to accuse the gentleman from Florida [Mr. Shaw]
of trying to violate the agreement. It was an honest difference in
terms of how we would best help people who were in need.
Furthermore, the gentleman from Florida is the chairman of a
subcommittee. He has the right to carry out some legislation, and at
times the Speaker and I had to sit in rooms and we had to direct a
whole panoply of activity across our conference under the grounds of
making sure that this agreement was carried out in terms of its spirit.
Frankly, if Members take a look at the efforts that have been made
contained in this reconciliation bill, we have done a job that is
unparalleled in this House in modern times. The committee chairmen,
constructively, to meet the agreement, they worked aggressively and
with great bipartisan effort to bring the other side to this agreement,
and at the end of the day I think we are pretty well there.
Let me just suggest one other thing that I would like Members to
think about as they are in their offices, if they are a Democrat, when
they want to come over here. Think about the House, for once. This is a
terrific opportunity to join together to do something that we have not
done in 30 years. We have a realistic chance. I predict, I believe, we
will in fact have a bill. It will be signed into law. We will have a
tax bill, it will pass, it will ultimately be signed into law. We are
going to have a balanced budget. We are going to have tax cuts.
I think it represents a new opportunity for this House to push aside
this partisan wrangling that we have been involved in over the period
of the last several years and come together on something. This is just
a matter of common sense. Mr. Speaker, if we had not lived up to the
spirit of this accord, the administration would not be supporting the
passage of this bill.
I ask Members to listen to their hearts and listen to their people.
Do not listen to a bunch of people who want to find an excuse to keep
this House divided, who want to find an excuse to nitpick, who want to
find an excuse to downgrade the actions of our chairman, who tried to
reach across the aisle and bring a document out here that really made
sense and could really represent bipartisan spirit.
Let us just get out here today, come over here, give us a ``yes''
vote, move this bill into conference. There will be additional changes
that will occur. But I would like to say to the rest of the Members in
this House and to their staff and the people who watch this debate, it
is a terrific day. We are going to balance the budget. The Berlin Wall
of big government has fallen. There will be tax cuts. It is all going
to happen because we stuck to principle. We believe in less government,
we believe in shifting power, money, and influence from this city, and
it is no longer rhetoric, Mr. Speaker, it is reality.
We are going to vote here today and we are going to move this process
along, and at the end of the day, with the process of further give and
take, not deviating from our principles, we will have signed into law
before the end of this year the first balanced budget since man walked
on the moon.
I think it gives the American people a little bit of hope that maybe
some of us can get it right here in town, but let us not be confused.
There is a proper role for the Federal Government, but into the future
it will not be about the power of Government. It will be about the
power of every man and every woman and every boy and every girl in this
country to live their dreams, to be creative, innovative, be rewarded
for their action, and to really, frankly, as we head into this third
millennium, be able to gain speed in terms of the power of the United
States to influence not just our hemisphere but the entire world, and
to make a stand on which all of mankind can be proud.
Mr. OWENS. Mr. Speaker, I rise in strong opposition to the Budget
Reconciliation Spending Act (H.R. 2015). Nothing is more important than
the discussion of the budget. Our Nation's values are all locked up
into the way it proceeds with its budget. What we really care about we
should discover by watching what is included in the budget and
understanding that what is really important to this Nation should be
reflected in its budget. H.R. 2015 contains numerous modifications to
entitlement programs--programs that are the last resort for many of
America's children, women, and families.
While Congress is moving forward in the budget process, my colleagues
must be reminded that our starting point--the White House-Republican
budget agreement--was insufficient, especially in the area of
education. We should have a budget which is not apologizing for the
amount of money in it for education. It is crucial that we bring 21st
century technology into our 19th century schools. The GAO estimates
that we need $135 billion to rebuild our Nation's schools. My colleague
from New York, Representative Lowey, introduced a bill to forward the
President's $5 billion initiative to stimulate funding to rebuild
America's schools. These funds were not included in the White House-
Republican agreement. Without the school construction initiative
proposed by the President, many of the schools that have the greatest
needs will not have the buildings to provide a safe and decent place
for children to learn. The second area, is Head Start. There are an
estimated 2.1 million children eligible for the Head Start Program.
According to an analysis by the National Education Association, $11
billion is required to ensure that all of these children have access to
early childhood learning, a crucial component in their developmental
process. The funding necessary to serve these future American taxpayers
again was not a part of the historic agreement. What message are we
sending to the Nation by not funding this vital program for children 4
years old and under?
Today, we enter the stage in the budget process where permanent
spending priorities are being proposed under H.R. 2015. The entitlement
programs with the largest reduction
[[Page H4582]]
in this bill are Medicare--$115 billion--and Medicaid--$11 billion. Why
do we continue to cut Medicare and Medicaid? We do need to address
Medicare and Medicaid in a new way, and stop the assumption that these
programs are where most of the money is, and therefore justify
proposals to cut Medicare and Medicaid. The savings that Medicare will
yield will come from cutting payments to providers, $102 billion,
mainly hospitals and health care plans, as well as $12.9 billion in
increased premiums in Medicare part B to be paid by the Medicare
beneficiaries.
That was yesterday's language. Today, the Republicans tell us that
the increased premiums will be paid by some beneficiaries. These
beneficiaries are described by their income percentage of the poverty
level. For example, beneficiaries with incomes between 100 percent and
135 percent of the poverty level will not have Medicare part B premium
increases; but, for those with incomes between 135 percent and 175
percent of the poverty level, the measure will cover that portion of
the premium that is attributable to the transfer of home health
services from Medicare part A to part B. Who will decide whether those
with income at the 135 percent of poverty level be considered in the
free category or premium increased category? Why are we being forced to
move in a way which will penalize our elderly and our poor people?
The bill includes $16 billion over 5 years for a new child health
assistance block grant. While $16 billion is better than nothing, it is
estimated that the plan is far short of reaching one-half of the 10
million children who are without health coverage. Why has this funding
for children's health care been changed to a block grant? Under the
block grant concept, funds would be distributed to States based on the
State's share of uninsured children, and then adjusted for the average
cost of health. This appears to be a ball of confusion to me. We were
grateful for the small step forward when we asked for funds to insure
one-half of the uncovered children. Yet, the Congressional Budget
Office recently released figures that indicate as few as 500,000
children would benefit from the block grant proposal. 500,000 is a mere
drop in the bucket and embarrassingly short of the dramatic health care
needs of this country's children.
Just a week ago, I welcomed the joint resolution celebrating the end
of slavery in the United States. I thought that it was a small gesture.
However, it is an important one for a lot of Americans, both black and
white, and I was pleased to see that not a single Member of the House
of Representatives voted against this joint resolution introduced by
the gentleman from Oklahoma [Mr. Watts]. But today, when I see certain
provisions included in the Welfare-to-Work Program, my pleasure is
gone. The resolution that passed last week was simply a nonbinding,
politically correct bill. Yet, today we are considering a bill that
could become permanent law and would resort to a declassification of
workers in the Workfare Program. I see benefits that every American in
the workplace share not included in the welfare program. These workers,
because they receive temporary assistance for needy families, would not
be considered employees and would be deprived of protections under the
Fair Labor Standards Act. These workers, both white and black, would be
treated as second-class citizens. They would not be covered by the
Equal Pay Act, title VII civil rights protection's SHA, or the family
leave laws. Because they receive temporary assistance for needy
families they are not protected against sexual harassment as other
workers. This regulation states that ``women subject to sexual
harassment on a welfare-to-work assignment could be required to seek
redress from the very agency that employed them.'' H.R. 2015 contains
no appeals rights, and no court redress for workfare participants.
Where is this Nation going? Where are our values? We have laws that
protect all other workers from sexual harassment in the workplace. Are
we sending the message that it is alright to sexually harass poor or
needy women? This sounds like slavery all over again.
In direct breach of the so-called budget agreement, H.R. 2015 would
sanction the discrimination and gross mistreatment of workfare
participants. Yesterday, the New York Times documented a tragedy in
which a 50-year-old Workfare participant in New York died on her job.
Apparently, this individual suffered from coronary heart disease and
was not able to work. Yet, the individual's well-documented medical
history was allegedly ignored. The Times revealed that many workfare
workers have complained about genuine health problems, and were still
forced to work in conditions inimical to their health. And Congress'
unconscionable answer to this is to ensure that wronged workfare
workers have no Federal protections.
Moreover, H.R. 2015 reneges on the White House-Republican budget
agreement's promise to restore benefits to legal, disabled immigrants
who face termination from the SSI program in October. H.R. 2015 would
ensure that those immigrants who received SSI before the date of the
welfare reform bill's enactment, August 22, 1996, will continue to
receive them. However, no provisions are made for those elderly, legal
immigrants who were in the country by August 22 and became disabled
after this date. At best, the omission of this protection reveals a
distorted understanding of an agreement. At worst, it indicates a
careless, despicable disregard for our legal immigrants who lack the
ability to secure the resources needed to sustain a minimum standard of
living.
Undoubtedly, this bill still needs more work. This Nation's budget
must reflect our values. Our values do not rob the poor and our
children to provide for the rich. We must educate our children, all
ages. We must build new schools. We must provide child health care for
all needy children. We must keep freedom alive for all citizens. And we
must do all of this without cutting Medicare and Medicaid, thereby,
penalizing our elderly and our poor. I urge my colleagues to reject
this shameful budget bill and vote ``no'' against H.R. 2015.
Mrs. JOHNSON of Connecticut. Mr. Speaker, today I rise in support of
the Balanced Budget Act of 1997. Specifically, I strongly support the
provision that will allow any permanent resident who was receiving
supplemental security income [SSI] as of the enactment of last year's
welfare bill, August 22, 1996, to continue to do so.
I believe the noncitizen provisions in the Balanced Budget Act are
compassionate and fair. By grandfathering everyone currently on SSI, it
does not require anyone to undergo an eligibility redetermination
process. I consider this to be essential, since those on SSI are some
of our most vulnerable members of society--poor, elderly, and disabled.
Imagine telling an 85-year-old widow who qualified for SSI under the
elderly category that she may, or may not, lose her benefits based on
whether the SSI employees determine her to be disabled as well as
elderly. The disability determination process can be lengthy, detailed,
and often full of uncertainties, especially for those with a limited
command of English. I did not support eliminating SSI for those
noncitizens already on the rolls last year, and I continue to oppose
any efforts to take away benefits for this group of people. Subjecting
300,000 poor, elderly aliens to the SSI redetermination process is
unjust.
I have been working closely with the Polish and Hispanic communities
in my district to restore what I view as harmful cuts in benefits
passed as part of the welfare bill. I cannot think of one group of
people more vulnerable than the elderly and disabled dependent on
supplementary security income. In addition to grandfathering all
noncitizens on SSI as of last August, I support efforts to provide a
bridge to those noncitizens who become disabled in the future. Legal
permanent residents need to be aware of their options in the future,
before they become disabled. If they work, or their spouse works, for
40 quarters, serve in the military, or become a U.S. citizen, legal
residents will qualify for SSI. I am optimistic that most permanent
residents will be prepared to meet at least one of these criteria and
so protect themselves in case of a disabling accident.
As a bridge, for legal residents not qualified for SSI but who are
borderline, I support a transition period so that noncitizens who came
to the United States under the old rules and who are already borderline
disabled or disabled but supported by family would be able to receive
help.
I urge my colleagues to join me in support of the noncitizens
provisions of the Balanced Budget Act of 1997.
Ms. CHRISTIAN-GREEN. Mr. Speaker, I rise in strong opposition to the
budget reconciliation bill because it will hurt everyone from children
to low income workers to legal immigrants.
Over 1 month ago, my colleagues on the other side of the aisle
heralded the reaching an agreement with the President to balance the
Federal budget by the year 2002. However, in an almost complete
turnaround, this spending bill before the House today reflects a near
complete repudiation of that agreement.
In addition to refusing to honor the budget agreement on health-care
coverage for low-income elderly and uninsured children, the bill before
us today makes deep cuts in the very important Disproportionate Share
Hospital Program and the SSI State maintenance-of-effort.
Of particular concern to me and my colleagues who represent the over
4 million U.S. citizens in the U.S. territories and commonwealths, this
spending bill completely eliminates all of the increments for inflation
adjustments to the Medicaid Programs in these areas, that was provided
in the balanced budget agreement. My constituents and those of my
fellow congressional Delegates whose health care costs we cannot
adequately meet at our present capped funding levels, were counting on
even this small increase in our Medicaid payments.
[[Page H4583]]
The territories are capped under current law in the amount of
Medicaid payments we can receive and as a result, our current funding
level does not permit DSH payments to our already struggling hospitals.
This very punitive decision not to provide this very needed increase in
Medicaid payments for the territories will severely undermine the
already fragile health-care delivery system and impact severely on
children and the poor in the U.S. offshore areas.
This reconciliation bill defiantly turns its back on a hard fought
bipartisan balanced budget agreement that reflected a compromise on
many important and controversial issues. We must insist that the
majority live up to the agreement they reached with the President by
voting no on this deeply flawed bill.
Mr. VENTO. Mr. Speaker, I rise in opposition to this spending
reconciliation bill. I supported the budget agreement worked out by
President Clinton and Congress which mapped an outline for a plan to
lead to a balanced budget by the year 2002. However, this
reconciliation bill breaks the promises of that plan in numerous ways
and includes several negative provisions that are unrelated to the
budget or savings. This measure turns this budget bill into a ``Where's
Waldo'' game. The majority has loaded the bill with so many
distractions that I can scarcely notice the real budget deal anywhere.
The budget plan which we passed last month was a package of important
compromises. Each of us would have changed certain priorities of that
compromise package and adjusted the spending cuts and taxes
differently, but we had, for the moment, found common ground in order
to make progress. The resulting package was a sign that we as
policymakers were willing to work together to compromise and
collaborate in finding common ground, moving forward and doing what is
possible in the next 18 months to achieve a socially and fiscally sound
Federal Government. I voted for the plan last month even though certain
provisions were imperfect.
The Republican majority is not standing by the promises, obligations,
and good faith of that budget agreement. They are mauling and
manipulating key provisions of the agreement in order to advance a
different agenda which hurts working families, seniors, and legal
immigrants. By breaking and reneging on the budget deal, the majority
is risking a return to the political stalemate and the Government
shutdown which we experienced during 1995-96, and more recently, the
congressional disaster on the flood relief bill.
The Republicans have belatedly backtracked on a couple of their
negative policy proposals. For instance, they are now agreeing to abide
by the budget agreement and set aside $1.5 billion to help low-income
seniors with rising Medicare premiums. The original bill, before it was
changed yesterday in the Rules Committee, would have negated the budget
agreement and set aside only one-third of that amount for low-income
seniors.
But while they have changed a few provisions, many serious problems
remain. The Republican majority is playing a pea and shell game with
protections for legal immigrants. The budget agreement said that we
would restore benefits for all legal immigrants who were in the country
prior to August 23, 1996, and who are or later become disabled. This
was but a partial solution to the problems legal immigrants face under
the 1996 welfare reform law. Today's bill, however, does not follow
through on that commitment and would deny any assistance to a legal
tax-paying immigrant who suffers a tragedy and becomes disabled after
August 1996. This was not the intent or the spirit of the budget
agreement and no amount of Republican rhetoric will change that fact.
There are a host of other provisions which go against the budget
agreement. A major point in the agreement was to provide health
insurance coverage for 5 million of the 10 million uninsured children
in America. However, this has been manipulated to provide so much
flexibility to States that the money will not be spent on new
children's health coverage. Instead, it will be substituted for
existing State effort on a host of unrelated health care needs.
Also in the area of health insurance, Republicans have added several
unrelated and negative provisions, which were not part of the budget
agreement. First, the Republicans have added changes to medical
liability laws to cap malpractice damages, a provision which may very
well attract a Presidential veto. Republicans have also decided to try
to add medical savings accounts to Medicare, which will drain money
from the trust fund to primarily benefit healthier and wealthier
seniors. In addition, the bill will allow States to privatize, or
contract out the eligibility and enrollment functions of the Medicaid
Program.
The bill allows for the creation of Multiple Employer Welfare
Arrangements [MEWA's], or health insurance sponsored by associations.
While those who attempt to put the best face on this describe it as
another option for people to obtain health insurance, the effect of
this bill would actually exempt such MEWA's from State regulation,
meaning that they would not be subject to solvency requirements and
consumer protections. This provision would have a very negative impact
on Minnesota, undermining key Minnesota proactive health care reform
efforts and would prevent other States from utilizing such initiatives.
Finally, the bill takes an antiworker stance by undermining basic
employment protections for people on welfare. Those on welfare in the
world of work must be accorded the same treatment as other workers.
They are not second class workers or citizens.
All of these provisions are made worse by the fact that the companion
budget tax break bill, which is to be considered tomorrow,
overwhelmingly skews tax benefits to wealthier individuals and
corporations. The people who will be impacted by the cutbacks and
negative policy proposals we are voting on today, will not see the
benefits of the tax package we are voting on tomorrow. In fact, in the
GOP version of the tax breaks, 70 percent of the tax breaks will go to
those with the top 20 percent of incomes. Because of the way the tax
breaks are structured, working American families will not see the full
benefit of the HOPE education credit or the child credit, not to
mention the capital gains tax breaks.
It is unfortunate that the Republicans have chosen to add so many
things to this budget bill, because the basic framework which was
agreed upon in the budget deal was a positive framework. The budget
deal which we agreed upon last month would have extended the Medicare
trust fund, even while adding crucial preventive benefits to Medicare;
preserved the Federal guarantee to Medicaid; strengthened environmental
protection and enforcement; truly expanded health coverage for 5
million uninsured children; and increased investment in education,
including increasing the amount and number of Pell grants, increases
for Head Start, and key targeted tax breaks for higher education
investments. The Clinton/congressional budget deal demonstrates that
our country does not need to renege on basic commitments to the
American people in order to balance the budget. We can invest in our
Nation's future through health care, education, infrastructure, and the
environment and still achieve sound budget goals.
However, the GOP majority, with this budget deal, is writing the law
as if anything goes, irregardless of the commitments made in that
budget agreement, and is trying to push through antiworker and
antifamily proposals. I regret that the majority has taken this
approach. I would have been supportive of a fair bill which followed
through on the budget agreement in a reasonable manner, but this bill
does not do that. Therefore, I regrettably, but forcefully urge my
colleagues to vote against this measure which is unfair and reneges on
the basic agreement.
Mr. MATSUI. Mr. Speaker, the Medicare proposal under consideration
today was created using an open, bipartisan process. This process
created a package with many provisions deserving of praise. It
includes, for example, a proposal that helps military retirees in
obtaining Medicare benefits by waiving a late enrollment penalty for
those individuals who have traditionally relied on health care services
on military bases. These men and women, who have dedicated their lives
to serving the Armed Forces, now often find that the military base on
which they have depended for health care is closing. This provision
will help the honorable military retirees of Sacramento, CA, who will
lose meaningful use of military health facilities when McClellan Air
Force Base closes in 2001. I have previously introduced legislation to
address this problem, and am pleased to see a solution in the package
currently under consideration.
There are, however, a number of problems in the Medicare proposal
approved in the Ways and Means Committee. First, unlike the Commerce
Committee proposal, the Ways & Means plan fails to allocate graduate
medical education expenses [GME], indirect medical education expenses
[IME] and disproportionate share medical education expenses [IME] and
disproportionate share hospital payments [DSH] directly to the
hospitals which they are intended.
Congress legislated GME, IME, and DSH payments to help teaching
hospitals and hospitals serving a disproportionately large share of
low-income patients. When a Medicare beneficiary selects to enroll in
managed care, however, these payments follow the Medicare managed care
recipient directly to the managed care entity. Although the intention
is that the payments will be passed through to hospitals, this is not
always the case. Rather, money intended for these hospitals is often
kept by the Managed care entities as profit or spent on other services.
This problem grows more severe as more enrollees enter managed care.
In Sacramento, almost 45 percent of the Medicare population is in
managed care. When these payments are not passed on to hospitals, the
impact is
[[Page H4584]]
felt. Carving out GME, IME, and DSH from managed care payments would
enable teaching and DSH hospitals to receive the same types of
subsidies under Medicare risk-contract arrangements that they do under
fee-for-service Medicare. It would ensure that money intended for these
hospitals is actually delivered.
There is a second proposal in the Ways and Means Committee Medicare
bill that is unduly punitive to hospitals. Under current law, payments
for inpatient hospital services are made under a prospective payment
system [PPS], in which a predetermined rate is paid for each inpatient
stay based on the patient's admitting diagnosis. PPS payment rates are
updated annually. This Medicare proposal, however, would freeze the PPS
update factor for the 1998 fiscal year.
The PPS freeze is not necessary to accomplish the goal of achieving a
balanced budget. There are alternatives that would achieve the same
level of savings with a less immediate impact on patient care and
market dynamics.
In addition, any claim that the freeze will not harm hospitals
contemplates a national average--but not specific areas or types of
hospitals. We cannot ignore patients in our teaching hospitals and
other hospitals with high Medicare caseloads simply because more
financially secure hospitals will be able to weather this storm.
Although the PPS update will freeze, no other aspect of hospital
expenditures will remain stagnant. Wages, which represent a large part
of hospital expenses, will still need to be paid, as will utilities and
capital costs.
This measure is especially punitive to hospitals that are achieving
the goals sought by the PPS method of payment. They have achieved
savings because they provide the most efficient patient care. Now that
hospitals have achieved a level of efficiency, it is fair for the
Medicare Program to share in this success by reducing updates. Yet it
is not necessary to do it all at once.
Finally, I must add my voice to the chorus of concern in opposition
to medical savings accounts [MSA's] MSA's are not in need of a
demonstration project. We already know that MSA's cannot work and, in
fact, they would cause harm.
The demonstration project in this proposal would drain over $2
billion from the Medicare trust fund. These costs represent money being
channeled directly to the savings accounts of healthy seniors at the
expense of those who are not as fortunate. MSA's defy the very nature
of insurance by establishing private accounts for healthy individuals
rather than using those funds to balance the risk of all Medicare
recipients.
The MSA proposal also lacks fundamental consumer protections. We know
from experience that consumer protections are necessary when selling
policies to the elderly and disabled. We do not need to demonstrate
this again. There is a long history of seniors being victimized by
unscrupulous insurance agents when being sold health insurance. This
unfortunate practice led to the necessary strengthening of MediGap
protections in 1990.
We face a new round of abuse under the current provision--seniors and
the disabled will be sold MSA plans without full disclosure of the risk
of high out-of-pocket costs they will face. Salespeople will focus on
the potential for building up large savings accounts, and will hide
details of the high $6,000 deductible and huge doctor bills above the
Medicare approved rate. Over 80 percent of Medicare beneficiaries have
incomes under $25,000 and cannot face deductibles of $6,000 or the
potential for unlimited balance billing contained in this package.
I am pleased with a number of provisions in the current Medicare
package. It is, however, not perfect. It is my hope that these
imperfections will be corrected before it is enacted into law.
Mr. SISISKY. Mr. Speaker, I rise today to express my qualified
support for the prevention initiatives in the Budget Reconciliation
Spending Act.
H.R. 2015 extends Medicare coverage for several preventive tests,
including colorectal cancer screening. This is a tremendous step
forward. This is a better bill because of it.
Under budget rules, this prevention initiative has to be scored as
costing the Treasury money. But, in reality, nothing could be further
from the truth. In the long run, screening saves money. It saves
Medicare the expense of months or years of costly care. Much more
importantly, it saves lives.
Some of you may know that I am a colon cancer survivor. After having
surgery to remove my cancer, I made a commitment to do everything I can
to help others beat this terrible disease. This bill is a downpayment
on that commitment.
There is one way this legislation could be improved, however.
Unfortunately, H.R. 2015 limits the screening tests available to
patients and doctors. It provides Medicare coverage for some tests, but
denies coverage for a test called the barium enema.
I have had all these tests. Take my word for it--there is nothing
pleasant about any of them. Cancer patients will not be demanding to
have these tests unless their doctors think it's absolutely necessary.
And doctors are in the best position to decide whether these tests
are necessary. Congress is not. It makes no sense for Congress to be
legislating against specific screening tests. It makes no sense for us
to dictate which of these tests should or should not be used.
On this issue, the experts have spoken loud and clear. The American
Cancer Society, the Office of Technology Assessment, and the Agency for
Health Care Policy and Research all agree that the barium enema is
effective in detecting colorectal cancer.
Some of you may be aware of the controversy among advocates of the
various colorectal cancer screening procedures. This dispute is
unfortunate. But it is not a dispute that we should have to referee in
this bill.
There is a fair and reasonable alternative. We can and should ask the
Secretary of Health and Human Services to make coverage decisions based
on the recommendations of experts.
I understand this is the solution adopted in the Senate Finance bill.
I would hope that the House conferees will recognize the wisdom of this
approach and recede to the Senate provision.
Nevertheless, I do strongly support this bill and its prevention
initiatives. But I think we can make a good bill even better. We can
follow the Senate's lead and let the experts decide which screening
tests should be available.
Mr. STARK. Mr. Speaker, I am voting against the spending provisions
of the budget resolution today for several reasons.
The Ways and Means Committee approved the Medicare title of the
budget bill in a bipartisan manner. We were given a number--$115
billion--by the Budget Committee. $115 billion is a higher number than
I would have liked, but it was what we were given. We've successfully
made all the groups and lobbyists in town equally unhappy--a sure sign
that we've done something right.
But there are still many unacceptable provisions in the Medicare
title.
Medical savings accounts have no place in the Medicare Program. They
are a terrible scam to rip off Medicare for the sake of insurance
companies and healthy, wealthy beneficiaries. Every legitimate health
care policy expert has concluded that MSA's would create extra costs,
resulting in a weakened trust fund. The Congressional Budget Office
estimates that the extra cost to Medicare for each person who signs up
for an MSA will be $1,000 in 1999, rising to an extra $1,650 by 2007.
These costs are far too great to bear when we are trying to cut
Medicare spending in order to preserve the program for future
generations.
We could have--and should have--done more to fight fraud and abuse in
the Medicare Program. The administration proposed at least a half
billion dollars worth of antifraud changes which the committee did not
accept. The press reports that the Medicare Office of Inspector General
will soon release an audit of Medicare that shows a fraud, waste and
abuse rate of 14 percent. That means about $23 billion in Medicare
payments should not be made each year. Over 5 years, that equals $115
billion--the same amount we are cutting in this bill. We will never
stop every last dollar of fraud and error, but we should certainly be
doing better. To leave any antifraud proposals on the table when so
much is being lost is not fair to the taxpayer or to the beneficiary.
Tomorrow's tax bill is a great wasted opportunity for the Medicare
Program. Consider this: If we did not pass a tax cut bill tomorrow, but
kept the amount of money that is going to be given away--largely to the
rich--in savings bonds for Medicare, we could extend the life of the
Medicare trust fund past 2021. The public should ask politicians who
talk about the need to restructure Medicare and cut back its benefits,
why they voted for a tax break for the rich, instead of saving that
money for Medicare.
As we move to conference on the Medicare provisions, I challenge my
colleagues to fully consider the devastating effects of Medicare
structural changes proposed by the Senate.
We must defeat the Senate's idea of raising the age of Medicare
eligibility from 65 to 67. This proposal is certain to increase the
number of uninsured when early retirees and those retiring at age 65
are unable to afford private insurance policies to bridge the gap until
Medicare eligibility. We should be expanding health insurance coverage
in America--not shrinking it.
The Senate has proposed increasing the part B premiums and even the
deductible on the basis of one's income. Others are talking about
forcing seniors into managed care plans, and turning the program into a
defined contribution plan that will not keep pace with inflation.
The Republican spending bill is flawed in other areas as well.
[[Page H4585]]
The Republican health proposal for children's health falls far short
of providing health insurance for 5 million children as called for
under the balanced budget agreement. Instead, the Congressional Budget
Office estimates it will cover only half a million children. The bill
proposes an unaccountable block grant which would allow States to:
supplant rather than supplement, existing health funds for children;
provide health care providers with additional funding even if they
don't add new services for children; and use funds in a manner that
would catalyze State fiscal gamesmanship. There is no requirement that
a single child receive health insurance coverage under the proposal.
In terms of welfare, the Republican bill makes a group of Americans,
who must rely on welfare to support their children, second-class
citizens. These citizens, who must work off their benefits, will have
no clear protections from sexual harassment or employment
discrimination, and will be deprived of other crucial worker
protections. There is no requirement that workfare workers get the same
benefits and working conditions as others working a similar length of
time and doing the same type of work. This is simply not fair.
Additionally, the Republican bill restores SSI and Medicaid to
125,000 fewer legal immigrants than the bipartisan budget agreement by
the year 2007. The budget proposal would allow States to cut benefits
to elderly, blind, and disabled Americans.
I did not support the welfare reform bill that passed last Congress
because it needlessly and cruelly throws over 1 million children into
poverty, and I do not support the Republican proposals today. The
Republican attempts to reform welfare will end in destitution and
misery for many innocent children.
For these reasons, I urge my colleagues to vote against the spending
portions of the Budget Reconciliation Act and to carefully scrutinize
the Senate restructuring proposals as we move toward conference.
Mrs. MORELLA. Mr. Speaker, I rise in support of the Balanced Budget
Act. This bill begins the process of implementing the historic balanced
budget agreement between the President and Congress. While I will be
working to improve this bill, I urge my colleagues to vote for it and
move the process forward. We cannot afford to lose this opportunity to
bring the budget into balance.
I am very pleased that this bill contains an amendment I offered in
the Government Reform and Oversight Committee to provide the
legislative fix necessary to ensure that the Federal Employees Health
Benefits Program continues to deliver high quality health care at
reasonable costs well into the future.
FEHBP is an outstanding program. It is the country's largest
employer-based health insurance program, serving the health care needs
of almost 10 million Federal employees, retirees, and their families.
It enjoys high customer satisfaction--over 85 percent. In fact, when
Congress considered health care reform in 1994, FEHBP was touted as a
model.
Without the FEHBP provision contained in this legislation, however,
FEHBP's success could come to a grinding halt. The ``Big Six'' formula
that is currently used to compute the premiums for FEHBP expires in
1999. Seven years ago, one of the six plans used to compute the current
formula, Aetna, dropped out. Since then, the Aetna proxy has been used
in the calculation. Under current law set in OBRA 1993, the formula is
set to revert to a ``Big Five'' formula--without the Aetna proxy. This
would cause employee premiums to rise, on average, $276 per year.
Federal employees and retirees simply cannot absorb such huge
increases, nor should they.
Back in February, I requested OPM's technical assistance to compute a
new FEHBP formula. In a meeting in my office, OPM presented a plan
based on their actuarial analysis of FEHBP data. I made several
changes, but we agreed on establishing a new formula that will be
derived from taking a weighted average of all the plans and setting the
maximum government contribution at 72 percent. This new weighted
average computation will ensure that Federal employee premiums do not
rise. Thus the Government's share and employees' share will remain the
same.
This approach makes sense. It is fair, it is stable, and does not
depend on carriers that may or may not drop out of the program. It will
not result in distributional changes nor will it create winners and
losers. CBO recognizes the problem caused by the ``Big Six'' formula's
expiration and assumes that Congress will enact a legislative fix,
keeping government and employee contributions the same. CBO estimates
that this fix would actually save $28 million over 5 years. I want to
thank my colleagues who helped me to move this amendment through the
Government Reform and Oversight Committee; Mr. Mica, Mr. Davis, Mr.
Cummings, Mr. Burton and Mr. Hoyer. This provision will make a critical
difference in the lives of the nearly 10 million Federal employees,
retirees, and dependents covered by FEHBP.
This legislation's Civil Service provisions save $4.762 billion,
derived from increased agency and employee contributions to retirement.
Over the last several years, Federal retirees and employees have been
asked to bear a disproportionate share of deficit reduction, and I
oppose deriving savings of $4.762 billion from Federal employees. But
despite my strong protests, the Budget Committee assigned the Committee
on Government Reform and Oversight a target of $4.762 billion in
savings. This target was derived from the President's original budget,
where he actually proposed to save $6.5 billion from Federal employees
and retirees. Clearly, I am not pleased that the budget agreement has
presented us with such a dilemma, but to ignore the committee's
instructions would have been abdicating our responsibility to the
Committee on the Budget, which could have redistributed the cuts in a
way that would inflict even more pain. There is no easy way to get to
$4.7 billion in savings, but the proposal agreed upon by the Government
Reform and Oversight Committee is the fairest. In the Civil Service
Subcommittee, I helped to defeat an amendment that would have singled
out one group of employees--CSRS emloyees--for increased employee
contributions. The savings we are approving today would increase agency
contributions by 1.51 percent and would increase employee contributions
by .50 percent, phased in through 2002. These are not painless spending
cuts. Federal retirement contributions are paid out of agencies'
salaries and expense accounts--accounts that are already constricted
from past budget reductions. Increasing agency contributions at this
time will further tighten agency accounts and could lead to further
reductions-in-force or furloughs. This increase amounts to an across-
the-board spending cut that will affect every agency and program in the
Federal Government.
I am pleased, however, that this legislation does not delay Federal
retiree COLA's. President Clinton's original budget also contained a
three-month delay in Federal civilian retiree cost-of-living
adjustments [COLA's] through 2002. The President's budget, however,
would have subjected neither Social Security beneficiaries nor military
retirees to this delay, imposing an unfair burden on only one group of
retirees. I am very pleased that there will be no COLA delay--and that
the savings coming from the proposed delay were dropped. Furthermore,
as the sponsor of the resolution against COLA delays, House Concurrent
Resolution 13, I am pleased that 250 Members are now on record in
opposition to COLA delays.
Medicare is among our most important Federal programs. It provides
health insurance for over 37 million seniors and has dramatically
reduced poverty among our senior population. Unless we make changes to
ensure its solvency, however, it is in danger of going bankrupt in just
4 short years. Growing at the rate of 10 percent a year, Medicare is
one of the fastest growing programs in the budget. According to the
Medicare trustees, the Medicare part A Trust Fund will be bankrupt by
2001, and it pays out $40 million more than it takes in every day. One
of the most important charges we face as a Congress is to preserve
Medicare for today's seniors and for our future seniors. I thank my
colleagues on the Ways and Means and Commerce committees for
responsibly addressing Medicare's solvency crisis. By slowing its rate
of growth and offering beneficiaries more choices, this legislation
will extend the life of the part A Trust Fund for 10 years. This
legislation also offers beneficiaries more consumer protections,
particularly important as more and more seniors choose Medicare HMO's.
I am pleased that the bill includes the provisions of H.R. 1002,
legislation to standardize Medicare coverage for bone density testing
for the diagnosis and prevention of osteoporosis. I am the sponsor of
this bill, along with Congresswoman Nancy Johnson, who championed this
bill in the Ways and Means Committee, and Congresswomen Nita Lowey and
Eddie Bernice Johnson. I want to commend Ways and Means Health
Subcommittee Chairman Bill Thomas for his strong support; members of
the Health Subcommittee, many of whom were cosponsors and strong
advocates, and Commerce Subcommittee on Health and Environment Chairman
Mike Bilirakis, and members of the subcommittee who also worked on
behalf of this provision. I also want to thank the staff of both
subcommittees and their members for their hard work as well.
Osteoporosis is a major health problem affecting 28 million
Americans, who either have the disease or are at risk due to low bone
mass; 80 percent are women. The disease causes 1.5 million fractures
annually at a cost of $13.8 billion--$38 million per day--in direct
medical expenses, and osteoporotic fractures cost the Medicare Program
3 percent of its overall costs. In their lifetimes, one in two women
and one in eight men over the age of 50 will fracture a bone due to
osteoporosis. A woman's risk of a hip fracture is equal to her combined
risk of contracting breast, uterine, and ovarian cancer.
[[Page H4586]]
Osteoporosis is largely preventable and thousands of fractures could
be avoided if low bone mass was detected early and treated. We now have
drugs that promise to reduce fractures by 50 percent. However,
identification of risk factors alone cannot predict how much bone a
person has and how strong bone is. Experts estimate that without bone
density tests, up to 40 percent of women with low bone mass could be
missed.
Unfortunately, Medicare's coverage of bone density tests is
inconsistent. Instead of national coverage of scientifically approved
types of bone density tests, Medicare leaves decisions to local
Medicare insurance carriers. The definition of who is qualified to
receive a bone mass measurement varies from carrier to carrier. Some
carriers require beneficiaries to have suffered substantial bone loss
before allowing coverage for a bone density test. For example, in about
20 States, the carriers require x ray proof of low bone mass or other
abnormalities. Unfortunately, standard x ray tests do not reveal
osteoporosis until 25 to 40 percent of bone mass has been lost.
One carrier allows a premenopausal woman to have a DXA test to
determine whether hormone replacement therapy [HRT] is indicated.
However, it does not allow the test to determine treatment for the
postmenopausal women--the majority of Medicare beneficiaries. Other
carriers have no specific rules to guide reimbursement and cover the
tests on a haphazard case-by-case basis.
Inconsistency of bone mass measurement coverage policy is confusing
and unfair to beneficiaries. The provisions embodying H.R. 1002
included in this bill will eliminate the confusion and standardize
Medicare's coverage of bone mass measurement tests in order to avoid
some of the 1.5 million fractures caused annually by osteoporosis.
I also commend Ways and Means Subcommittee on Health Chairman Bill
Thomas, Congressman Ben Cardin, and Commerce Health Subcommittee
Chairman Bilirakis for their sponsorship of H.R. 15, the Medicare
preventive package in the bill providing for expanded coverage of
mammography screening, pap smears, and pelvic exams, prostate and
colorectal screening, and diabetes screening. I am pleased to be a
cosponsor of H.R. 15, and I believe this expansion of preventive
benefits will improve the detection and early treatment of these
diseases. I also congratulate Congresswoman Barbara Kennelly and
Congresswoman Elizabeth Furse, among others, with whom I have worked to
expand coverage for mammography and diabetes screening.
I urge my colleagues to vote for the Balanced Budget Act. This bill
combines the work of a number of committees, and implements the
critical spending provisions of the balanced budget agreement. Without
approval of this portion of the agreement, there will be no balanced
budget. I am confident that further changes can be made in conference
to improve the bill and gain the approval of a solid majority of
Members and the President.
Mr. DEUTSCH. Mr. Speaker, I have been a longtime supporter of a
balanced budget and I voted in support of the balanced budget
agreement, but I cannot vote for H.R. 2015 because it veers too far
from the agreement and includes some major policy changes that I cannot
support.
One of the most important goals behind this legislation is to ensure
the long-term solvency of the Medicare Program by containing the growth
of program costs. One of the most successful ways we can do this, and
have been doing this, is through managed care. However, Medicare
managed care providers have been unfairly and dangerously targeted in
this bill. The reality is that seniors join HMO's and are happy with
their HMO's because these health plans provide seniors with extra
benefits--like coverage of prescription drugs--that they would
otherwise have to purchase Medigap supplemental insurance to cover. By
radically reducing Medicare managed care payment rates, this bill will
force Medicare HMO's to cut back services and limit the options
available to seniors who might consider enrolling in HMO's. This is a
horrible strategy for modernizing the Medicare Program.
This bill also cuts payment rates for critical services like home
oxygen and assisted living devices, but it is these very home services
that help seniors to stay out of hospitals and nursing homes. This is
clearly inconsistent with a budget that seeks to control health care
costs in the long run.
This bill also adds $2 billion in Medicare costs by adding medical
savings accounts to the program. I supported the demonstration project
for MSA's in the private market, but I do not think it is right for the
Medicare Program. Instead of simply paying for the services that
beneficiaries actually use, Medicare MSA's will pay healthy seniors
when they do not use services. CBO has estimated that this will
increase Medicare costs by $2 billion over 5 years. Why are we adding
unnecessary costs like this when we are making such significant cuts to
the program and increasing costs to beneficiaries?
This bill also makes the mistake of repealing quality assurances like
the Boren amendment that have been put in place to protect seniors from
the nursing home horrors that we saw before the Boren amendment was in
place. It is just not necessary to lessen the quality of these programs
to be cost-effective.
And then there's medical malpractice reform. Under this legislation,
medical malpractice liability--in State and Federal courts--would limit
noneconomic damages to $250,000. That means that retirees, homemakers,
and the disabled who would not be able to demonstrate future economic
loss would be capped at $250,000 in noneconomic damages no matter how
grievous the injury is that they have suffered. Something as important
as medical malpractice reform should not be tucked into this bill
without complete hearings that would permit the public to express their
views on medical malpractice reform.
I am very hopeful that these and other serious problems with this
bill can be remedied in conference. I certainly support many of the
provisions in this bill that I think will improve the Medicare Program,
like the inclusion of preventive services such as mammography screening
and colorectal cancer screening, and the expansion of beneficiary
choice by adding options like provider sponsored networks to the
program. But I cannot support the bill as it now stands when many of
these provisions will actually hurt the very seniors these programs
were designed to protect.
Mr. CONYERS. Mr. Speaker, I would like to bring to the Members'
attention the provisions in the bill which would for the first time
ever federalize the medical malpractice system. The proposals represent
the most radical and one-sided liability limitations that have ever
been considered by this legislative body. And why shouldn't they be--
they were written by the AMA as part of a back room deal to obtain
their support for Republican agenda, including their support for the
proposed partial birth abortion ban.
The $250,000 cap on pain and is perhaps the most inequitable
provision in the entire bill. Although harder to scientifically
measure, noneconomic damages compensate real victims for real losses--
including loss of sight, disfigurement, inability to bear children,
incontinence, inability to feed or bathe oneself, or loss of a limb--
that are simply not accounted for by lost wages or medical bills. This
means that a woman or child facing excruciating pain and suffering for
the rest of their life as a result of medical malpractice would have
their right to compensation capped, but a CEO who couldn't perform his
job because of the same exact injury would face no such cap.
The draconian new limitations on punitive damages will also penalize
victims and protect wrongdoers. Under the Republican proposal, a doctor
who fell asleep in the operating room or operated on the wrong patient
could be completely insulated from punitive damages. The language goes
so far as to cap the liability of a doctor who rapes his patient. Very
often, punitive damages are the only way to truly deter such outrageous
conduct, but this bill protects such people.
The new statute of limitations provision prohibits all victims from
bringing any legal action more than 5 years after the negligence first
occurred. It takes absolutely no account of the fact that many injuries
caused by medical malpractice or faulty drugs take years or even
decades to manifest themselves. Yet under the proposal, a patient who
is negligently inflicted with HIV-infected blood and develops AIDS 6
years later would be forever barred from filing a medical malpractice
or product liability claim.
The so-called periodic payment provisions are also blatantly
antivictim. The bill would allow hospitals teetering on the verge of
bankruptcy to delay and then completely avoid future financial
obligations. And wrongdoers would have no obligation to pay any
interest on any amount they owe to their victims.
The bill goes on and on, limiting injured victim's State law rights
while protecting the most blatant possible malpractice one can imagine.
The proponents of these measures couldn't care in the least how they
effect the rights of the American people or the quality of medical care
in this country--that's why they decided they didn't need to waste any
time with committee markup or process.
A section-by-section itemization of my concerns regarding the medical
malpractice provisions follows:
A. Statute of Limitations--Prohibits victims from bringing
any state health care liability action more than two years
after an injury is discovered or five years after the
negligent conduct that caused the injury first occurred. Such
a proposed new federal statute of limitations takes no
account of the fact that many injuries caused by medical
malpractice or faulty drugs often take years to manifest
themselves. Thus under the proposal, a patient who is
negligently inflicted with HIV-infected blood and develops
AIDs six years later would be forever barred from filing a
medical malpractice or product liability claim.
[[Page H4587]]
B. $250,000 Cap on Non-economic Damages--Caps the award of
non-economic damages in medical malpractice actions at
$250,000. The bulk of data indicates that dollar caps do not
provide significant savings. Using information derived from a
1992 GAO study, the ABA's Special Committee on Medical
Professional Liability found that state tort reform proposals
``have not had any measurable impact on overall health [care]
costs'' and that personal health care spending had doubled
between 1982 and 1990, regardless of the type of ``reforms''
adopted. A 1986 GAO study on the impact of specific tort
changes on medical malpractice claims revealed that claims
and insurance costs continue to rise despite state-adopted
limits on victim compensation.
Even the total elimination of malpractice costs would
provide only negligible savings to the health care system.
According to separate reviews by the U.S. Department of
Health and Human Services and CBO, the total amount of all
liability premiums paid in the United States represents less
than 1% of the Nation's health care costs. And factoring in
the costs of so-called ``defensive medicine'' would not
result in any significant additional savings to the health
care system, according to both the CBO and the Congressional
Office of Technology Assessment.
An additional concern with caps on non-economic damages is
that they could unfairly penalize those victims who suffer
the most severe injury and are most in need of financial
security. Although harder to scientifically measure, non-
economic damages compensate victims for real losses--such as
loss of sight, disfigurement, inability to bear children,
incontinence, inability to feed or bathe oneself, or loss of
a limb--that are not accounted for in lost wages. And non-
economic damage caps have been found to have a
disproportionately negative impact on women, minorities, the
poor, the young, and the unemployed; since they generally
have less wages, a greater proportion of their losses is non-
economic.
C. Joint and Several Liability--Eliminates the state
doctrine of joint and several liability for non-economic
damages. This will allow wrongdoers to profit at the expense
of innocent victims, rather than forcing tortfeasors to
allocate liability among themselves, as has traditionally
been the case under state law. And since women,
minorities, and the poor generally earn less wages, such
limitations on non-economic damages could have a
disproportionately negative impact on these groups.
D. Limits on Punitive Damages--Caps punitive damage awards
at the greater of $250,000 or three times economic damages;
limit the state law standard for the award of punitive
damages to intentional or ``consciously indifferent''
conduct; allow a bifurcated proceeding to determine issues
relating to punitive damages; and completely ban punitive
damages in the case of drugs or other devices that have been
approved by the FDA or any other drug ``generally recognized
as safe and effective'' pursuant to FDA-established
conditions.
These proposed limitations raise a number of concerns.
Arbitrary caps on punitive damages may provide unjustified
windfalls to the few tortfeasons responsible for blatant and
wanton medical misconduct. (In fact, studies have shown that
only 265 medical malpractice punitive awards were awarded in
the United States in the 30 years between 1963 and 1993.) By
insulating grossly negligent conduct, the proposed new
federal standard for establishing punitive damages comes
close to criminalizing tort law. Permitting defendants to
bifurcate proceedings concerning the award of punitive
damages may well lead to far more costly and time-consuming
proceedings, again working to the disadvantage of injured
victims. And banning punitive damages for FDA-approved
products is likely to have a disproportionate impact on
women, since they make up the largest class of victims of
medical products.
E. Periodic Payments--Grants wrongdoers the option of
paying damage awards in excess of $50,000 on a periodic
basis. This provision would apply not only to future economic
damages realized over time, such as lost wages, but to non-
economic losses, like the loss of a limb, that are realized
all at once. Also, in contrast to many state law periodic
payment provisions, the Republican proposal does not seek to
protect the victim from the risk of nonpayment resulting from
future insolvency by the wrongdoer or to specify that future
payments should be increased to account for inflation or to
reflect change circumstances.
F. Collateral Source and Subrogation--In most states under
the collateral source rule, a victim is able to obtain
compensation for the full amount of damages incurred, and his
or her health insurance provider is able to seek subrogation
in respect of its own payments to the victim. This ensures
that the true cost of damages lies with the wrongdoer while
eliminating the possibility of double recovery by the victim.
The Republican proposal would turn this system on its head by
allowing tortfeasons to introduce evidence of potential
collateral payments owing from the insurer to the victim.
This could have the effect of shifting costs from negligent
doctors to the health insurance system in general and
taxpayers in particular, resulting in increased health
premiums paid by workers and businesses.
Another problematic feature of Republican malpractice
proposals has been their one-sided, anti-victim nature. For
example, their proposal allows States to enact more
restrictive caps and damage limitations, but not permit the
states freedom to grant victims any greater legal rights.
Their proposals also ignore a number of complex legal issues.
For example, in the state law context, various damage caps
have been held to violate state constitutional guarantees
relating to equal protection, due process, and rights of
trial by jury and access to the courts; and these very same
concerns are likely to be present at the federal level. And
by layering a system of federal rules on top of a two-century
old system of state common law, the Republican proposals will
inevitably lead to confusing conflicts, not only within the
federal and state courts, but between federal and state
courts.
Finally, I would like to note several other concerns I have with the
legislation relating to judiciary's jurisdiction concerning civil
rights and immigration. I am strongly opposed to provisions from the
Economic and Educational Opportunities Committee print and the Ways and
Means Committee print providing that participants in the workfare
program will not be considered employees for purposes of Federal law.
As a result, these workers may not be covered under many laws that have
helped working people over the years, including title VII of the Civil
Rights Act of 1964 and other laws designed to protect working people
from unsafe workplaces, racial and sexual harassment, and unfair wages.
It is wrong and patently unfair to require people to go to work and
at the same time, deny them legal protections against discrimination.
Title VII provides for a broad set of remedies for employees that are
discriminated against on thesis of race, color, religion, sex or
national origin. Unless this provision is fixed, it could make former
welfare recipients second class citizens and punish people who leave
welfare by taking away their basic, fundamental rights.
The legislation also continues to restrict Social Security income and
Medicaid eligibility to those immigrants who were receiving such
benefits as of August 22, 1996. This is a blatant violation of, and
retreat from the bipartisan budget agreement which had promised to
restore these benefits to legal residents who subsequently become
disabled. Legal residents pay taxes and contribute to our society in
the same way citizens do, and there is no moral justification for
excluding them from our Nation's safety net.
I urge the Members to join me in opposing this legislation.
Mrs. JOHNSON of Connecticut. Mr. Speaker, I rise today with concern
about the reductions made in this legislation for Medicaid
disproportionate share hospital [DSH] funding. The reductions made to
DSH funding in this legislation will have a dramatic effect on Medicaid
funding going to Connecticut, and 12 other States in similar
situations: Alabama, Colorado, Kansas, Louisiana, Maine, Missouri,
Nevada, New Hampshire, New Jersey, South Carolina, Tennessee, and
Texas. My home State of Connecticut is a high-DSH State, meaning that
we have a number of low-income people who lack health insurance use
Federal and State Medicaid funding to assist our hospitals that treat.
Connecticut is acting responsibly by using available Federal funds to
address the problem of people lacking health insurance. The DSH program
is an integral part of Connecticut's overall Medicaid Program,
involving over $400 million in combined Federal and State funding.
The DSH formula in this legislation is unfair and disproportionately
impacts a handful of states, including Connecticut, who have invested
in DSH programs. These States are legitimately accessing funds through
the Medicaid Program, which is designed to enhance the health care
coverage of low-income people. We must recognize that DSH is not
separate from Medicaid, but a critical component of providing quality
health care to those who cannot otherwise afford it. During the fiscal
year, Connecticut is receiving $204 million in DSH funding from the
Federal Government. Under this proposal, DSH funding would drop
dramatically by 40 percent over the next 5 years, with the most
dramatic decreases in the out years, going from $204 million to $123
million by 2002. A reduction of this magnitude would likely force
States to drastically reduce their commitment to helping hospitals
treat the uninsured, and this at a time when I and many colleagues
believe Congress must ensure access to affordable health insurance for
the uninsured.
I am very pleased that Budget Committee Chairman Kasich has expressed
a commitment today to look at the DSH formula more closely as the bill
moves into the conference committee process. Any cuts in the DSH
program must be imposed equitably on all States, regardless of their
percentage of DSH spending.
Mr. GREEN. Mr. Speaker, I strongly oppose the inclusion of provisions
authorizing private companies to determine eligibility and to verify
income for the Medicaid and Food Stamp Programs. These items have
nothing to do with the Federal budget, except to potentially make it
worse in the years ahead, and it represents
[[Page H4588]]
a significant policy change with broad-ranging implications.
These public policy changes deserve extensive debate based on the
actual merits and risks--not on inflated claims and misinformation. We
need to spend real time considering the implications of allowing
private, for-profit companies to determine who is or is not eligible
for services under Medicaid and food stamps.
There are no assurances in these provisions that the contractors will
be required to comply with the most basic requirements and procedures
which public agencies routinely follow, especially those relating to
accountability of funds. Recent privatization arrangements indicate
that private contractors do not believe they have a comply with
procedures taken for granted in the public sector. For example, the
private industry in Philadelphia had to be sued several years ago in
order to get information about its federally funded training and job
placement activities. Similarly, the private one-stop centers in
Massachusetts have failed to provide any placement information
necessary to measure their effectiveness.
The privatization provisions make no assurances of any actual savings
or efficiencies. Experience suggests that the opposite could occur
under privatization. In the case of California, Lockheed Martin
Information Management Services promised to build an automated child-
support enforcement system by 1995. The total price promised was $99
million.
Today, its $304 million, with major cost overruns. A consulting firm
recently told State officials that it found 1,400 errors caused by
Lockheed Martin, and a recent legislative report said that there is no
guarantee that the system will ever work statewide.
The most amazing feature of these provisions is that while
responsibility for administration of the Medicaid and Food Stamp
Programs can be privatized, the amendment has insured that legal
liability for constitutional torts remains with the state. It does this
by including the following: ``For purposed of any Federal law, such
determination shall be considered to be made by the State and by a
State agency.''
The legal effect of this sentence is two-fold. First, it permits a
private company to make a binding legal determination as to who is
eligible for benefits and who is not. Historically, only government
officials have granted or denied public welfare benefits to needy
citizens. The second effect is that for the purpose of Federal laws
protecting civil rights, the determinations made by private contractors
shall be considered to be made by the State. In short, the State will
remain liable for constitutional torts even if they are committed by
private contractors.
This policy will greatly benefit the private contractors who will
have an asset rich codefendant. It is only the States--who will retain
liability while surrendering control--that will suffer. If these
provisions are enacted, it will be appropriate to call if the Unfunded
Mandate Act of 1997. The States will be left holding the bag for the
mistakes made by the private entities.
There are no compelling reasons to go forward with wholesale
privatization of the Medicaid and food stamp eligibility systems. In
fact, we have not heard how access to services will be improved. And
the public policy concerns, in particular public accountability, client
privacy and the role of profit-making in serving the needy are
overwhelming.
If we move forward with this idea, we will be neglecting our duty to
our constituents to ensure the proper administration of the Medicaid
and Food Stamps Programs. Substantial modifications to these programs
deserve the full consideration of the Congress and should move through
the regular legislative process. Privatization has nothing to do with
balancing the budget and could place the agreement in jeopardy. In
fact, the Office of Management and Budget has indicated its opposition
to these provisions in a letter to the Rules Committee.
If you liked $100 hammers and $600 toilet seats, then you will like
wholesale Medicaid and food stamp privatization. However, if you
believe in public accountability of public funds, and providing care
for our most vulnerable, then you will help me oppose these provisions.
Mr. GOODLING. Mr. Speaker, I rise in support of the Balanced Budget
Act of 1997. This bill fulfills our promise to the American people: To
balance the budget and make the Federal Government live within its
means for the first time in over 30 years.
This bill puts into effect the bipartisan budget agreement negotiated
last month. It proves that Congress and the administration can work
together to find solutions that make sense.
The provisions marked up by the Committee on Education and the
Workforce, which I chair, helps more people move from welfare into the
work force; protects student loan programs, and helps millions of
uninsured workers provide health insurance coverage to their families.
Mr. Speaker, consistent with the Budget Agreement, the bill before us
today provides $3 billion of new funds to assist long-term welfare
recipients into work.
Included under this part are provisions which ensure these funds will
be directed through existing State and local employment and training
systems as opposed to being used to establish a duplicative delivery
system. This ensures that welfare to work programs will be part of
local employment networks that include the private sector, elected
officials, and local welfare agencies.
In addition, we have ensured that a vast majority of these welfare-
to-work funds will be highly targeted to those areas with the highest
concentration of long-term welfare recipients--allowing States and
localities to make the best decisions on how best to assist these
recipients into meaningful employment.
Let me also mention here the related labor provisions that are
included as part of this welfare-to-work funding, because I can predict
that we are going to continue to hear a lot of exaggerations and
misstatements about what the bill actually says.
The bill has several important labor provisions. First, we apply
Federal or State health and safety standards to any welfare recipient
who is working with an employee who is covered by those standards.
Second, we extend nondiscrimination laws to all participants in
welfare-to-work activities; and third, we add provisions consistent
with the administration with respect to providing minimum wage for
workfare participants. Let me also clarify that if welfare recipients
are hired as employees by a public or private employer, they are
covered by the labor laws just as any other employee--including the
minimum wage law.
Let's not lose sight of the reason for all of this: Welfare reform is
premised largely on the belief that work is good, that even if one
cannot be immediately employed that there are a lot of needs in our
communities that people who receive welfare benefits can help attend
to, and doing so helps both them and their communities.
It is clear what many on the other side of the aisle really want to
do--end workfare as we know it. They didn't like it in 1988 welfare
reform, they didn't like it under welfare reform last year, and they
are trying again to kill it as part of the budget agreement.
Mr. Speaker, welfare reform is working because workfare is working--
let's not stop success.
Mr. Speaker, let me briefly mention that this bill also helps ensure
that students will continue to have access to funds for postsecondary
education. The provisions we included will protect the student loan
programs by making changes in the administration of both the guaranteed
and the direct lending programs so that both will operate more
efficiently.
Finally, Mr. Speaker, one other key component of our committee's
budget reconciliation package is the legislation to expand health
insurance coverage, through association health plans, to millions of
employees of small businesses and the self-employed. By including in
reconciliation the provisions of the Expanded Portability and Health
Insurance Coverage Act of 1997, [EPHIC], we will empower millions of
workers, their spouses and children to obtain more affordable health
insurance through market-based reforms.
We are enabling small businesses to extend health care coverage to
millions of American families who have no coverage at all today and are
creating greater portability of coverage for many of those who already
do.
EPHIC is consistent with the budget agreement, since it will expand
health coverage to children at no additional Federal cost and give
States more affordable coverage options to expand children's coverage
under the $16 billion block grant in the bill.
The problem of the uninsured, both children and adults, is
predominantly a problem of small businesses lacking access to
affordable coverage. Over 80 percent of the 40 million uninsured are in
families with at least 1 employed worker, the vast majority of whom are
employed by small businesses or are self-employed. Small business
experts testified, both last Congress and again at a hearing on EPHIC
in May, that 20 million Americans who now lack coverage might gain it
under the pools created by this bill. Moreover, over 80 percent of all
uninsured children are in families with working parents.
Small businesses pay substantially more for insurance than do large
corporations--that is why many cannot afford to offer coverage to their
workers, even though they want to. EPHIC would expand the advantages
that larger employers now enjoy to small- and medium-size employers by
allowing such businesses to pool together, thus expanding coverage
through the private market--without new taxes or costly mandates.
Mr. Speaker, I am confident that this bill will help more Americans
achieve the American Dream by taking the first steps toward balancing
our Federal budget and I urge my colleagues to join me in supporting
it.
[[Page H4589]]
Mr. HOBSON. Mr. Speaker, I rise today to urge my colleagues to vote
for the Balanced Budget Act.
This bill today is where the rubber meets the road. We promised to
balance the budget, we reached an agreement with the White House to do
it, and now that agreement is being enacted with this legislation.
This budget achieves a Federal spending level below 20 percent of GDP
for the first time since 1974. It slows the growth of all Federal
spending to just 3 percent for the next 5 years--that's a savings of
$289 billion.
We also promised to save Medicare from bankruptcy and expand health
care options for seniors, and we're doing that with this legislation.
Though I'm sure there might be some who disagree with small portions
of this legislation, after all it is a very large bill, but we worked
together across the aisle to get it done. This demonstrates that
Congress and the administration can work together constructively--as
they should--to solve problems.
There's one group of people that is getting everything it wants from
this bill, and that's the generation of Americans who will take the
mantle of leadership in the years to come.
Without the fundamental changes to Medicare and entitlement programs
that we're enacting here, none of these valuable programs will be
around for the next generation to enjoy. By acting now with this bill
to save Medicare from bankruptcy and rein in the out-of-control costs
of Medicaid, the next generation will inherit functioning, solvent
programs and a national economy that is thriving and secure. That's the
legacy I intend on leaving to my children, and it's the legacy the
American people want us to leave to their children also. This bill
makes it possible.
Join me today in standing up for responsible spending, for seniors,
for our children and grandchildren's future, and voting to approve the
Balanced Budget Act.
Mr. PACKARD. Mr. Speaker, I rise today in support of an issue that is
of importance to families and workers across the nation--the Balanced
Budget Act. Our budget proposal would give Americans the first balanced
budget in 30 years, while providing tax relief for American families
and shifting power, money and influence out of Washington and back to
Americans at home.
Passage of the Balanced Budget Act will be a great victory for the
American people. It will show the American people that we are on target
and committed to balancing the budget by 2002. Budgets are about much
more than numbers. They are about priorities and people. This budget is
about replacing Washington values with real America's values. People
know that one-size-fits all policies from Washington don't work. Our
budget returns power back home where people know how to solve their
problems best.
Furthermore, this budget proposal addresses the real concerns
Americans have about stagnant wages and job security through tax relief
and policies that will increase savings and investment. Greater savings
and investment will provide our workers with the high-tech tools they
need to compete successfully in the global marketplace--and that means
more jobs and better pay.
By preparing our country to meet the challenges of the next century,
our budget ensures that the American Dream--that our children will
enjoy a future with more and better opportunities than we now enjoy--
will live on for generations to come.
Mr. PAUL. Mr. Speaker, I rise today in opposition to the Balanced
Budget Act (H.R. 2015), authorizing the expenditure of an additional $3
billion in taxpayer dollars on ``Welfare to Work'' programs as the
Federal Government has no constitutional authority to spend taxpayer
dollars on welfare-to-work programs.
Congress is once again engaging in the tired ritual of the 5-year
balanced budget plan. Repeatedly over the past 25 years there have been
lofty proclamations that the budget would be balanced in 5 years
because of government forecasts of continued growth. Each 5 year plan
was announced with great fanfare and happy feelings of bipartisanship,
yet, each plan fails to balance the budget because the economic
forecasting upon which they were based never reflect actual economic
circumstances.
The Federal Government cannot predict exactly how the economy--the
aggregate spending and saving habits of every individual in the
nation--will behave over the course of the next 5 years. Because the
economic situation in the future will be based upon the actions of
individuals acting on their subjective preferences, these preferences
are impossible to predict. The failure of every socialist government,
whether totalitarian or democratic, to fulfill its leaders' promises of
unlimited economic prosperity demonstrates the futility of government
planning based upon the economic forecasts of government officials.
It is, however, only a matter of time before the burden of taxes,
spending, debt, and inflation catapult America's economy into yet
another recession. When the optimistic projects of growth prove to be
based more in hope than reality, the budget figures will be ``revised''
and a future Congress will once again confront the questions of
balancing the budget.
Even if the budget being considered by this Congress were guaranteed
to balance the budget within 5 years, it should still be rejected
because it fails to eliminate even one unconstitutional function of the
Federal Government. Despite proclamations that ``the era of Big
Government is over'', this budget actually increases taxpayer spending
for many unconstitutional programs. The main problem with government
policy today is not that the government cannot balance its books, but
that the Federal Government is performing too many functions for which
it lacks any constitutional authority.
Mr. Speaker, the authorization of an additional three billion dollars
for a welfare-to-work program, is a perfect example of how the budget
proposal fails to address the basic question of how the welfare state
exceeds the constitutional limitations on the power of the Federal
Government. Under the tenth amendment to the United States
Constitution, the Federal Government has no authority to take money
from the people of Texas to spend on welfare programs for the people of
New York. Welfare and job training programs are strictly the province
of the individual States.
The reconciliation proposal not only unconstitutionally spends
Federal taxpayer funds on welfare programs, it dictates to the States
how they must run their welfare-to-work programs. For example, States
are required to spend 1 dollar of their own money for every 3 dollars
of Federal money they receive, and they must distribute the funds
according to a pre-determined Federal formula.
Short of defunding all welfare programs and transferring
responsibility for those programs back to the States and the people,
Congress should provide maximum flexibility to the States to manage
these programs as State officials see fit. For example, the amendment
offered and later withdrawn by Mr. Johnson to allow State governments
to use nongovernmental personnel in the determination of eligibility
under the Medicaid, Food Stamp, and special supplemental nutrition
programs for Women, Infants, and Children, is a step toward restoring
federalism in welfare policy. It is not for Washington to determine the
strengths and weaknesses of such a plan, these decisions are solely the
responsibility of the States.
In the name of transferring citizens from welfare to work, this bill
provides millions of taxpayer dollars to move businesses onto the
welfare rolls. Under this proposal, State governments may hand over
taxpayer dollars to businesses for private sector job creation,
employment, wage subsidies, on-the-job training, contacts with job
placement companies, and job vouchers. By providing payments to private
businesses who place and hire welfare recipients, Congress is creating
a dangerous and powerful new constituency for welfare programs and, in
effect, making it more difficult for future Congresses to reduce
welfare expenditures.
The welfare-to-work proposal also creates powerful disincentives for
businesses to give welfare recipients a chance at a new life through an
entry-level job. If this proposal becomes law, welfare recipients in
entry-level jobs will be entitled to receive the minimum wage and be
covered by certain health and safety regulations. Because mandating
wages and benefits increases the costs to businesses of hiring new
workers, any wage, safety, or health regulations discourage the hiring
of new employees. This is especially true in the case of marginal
employees who lack well-developed job skills. This bill restricts
welfare recipients' ability to find gainful employment; the very
population this bill is allegedly targeted to benefit.
It is time to return to the most effective job creation machine in
history--the free market. Any alternative necessarily results in
suboptimal employment. Government is institutionally incapable of
creating bonafide jobs. Private citizens acting freely are more than
capable of caring for the needs of the less fortunate if the Federal
Government stops appropriating so many of their resources for wasteful,
bureaucratic, federal programs.
In conclusion, Mr. Speaker, I urge Congress to reject the phony
balanced budget plan before us today as that plan rests on two dubious
notions: 1. Government can predict the economic future of the country;
2. The burden of taxes and spending placed on the economy by government
will not cause America to experience an economic downturn.
Furthermore, this proposal continues the Federal Government's
unconstitutional micro-managing of State welfare programs. This bill
extends corporate welfare in the form of subsidies to businesses which
hire current welfare recipients thus creating a new client group for
the welfare State.
Mr. Speaker, the only way to permanently balance the budget and end
welfare as we
[[Page H4590]]
know it is to cease all federal expenditures for redistributionist
programs not authorized under the United States Constitution.
Therefore, all Members of the House of Representatives sincerely
committed to limited government must oppose this proposal and instead
work to defund all unconstitutional programs and return the authority
for welfare programs to those best able to manage them.
Mr. EVERETT. Mr. Speaker, While I support the vast majority of the
provisions of this legislation to implement the balanced budget
agreement, I must express my strong opposition to the dramatic cuts in
the Medicaid Disproportionate Share Program (DSH) as recommended by the
Commerce Committee.
Mr. Speaker, this provision proposes a 40 percent cut in DSH payments
to 13 so-called ``high DSH'' States. This drastic cut unfairly and
punitively targets Alabama and 12 other States with unfortunately high
levels of women, children, elderly, disabled and indigent living in
poverty. Simply put, a 40 percent reduction in DSH payments over 5
years will cause irreparable harm to Alabama's safety net hospitals,
major urban teaching institutions and rural hospitals throughout the
State. These hospitals, to a one, meet the highest standards of
quality, access and compassion year after year.
Mr. Speaker, we have a responsibility to address and fulfill the
health care needs of our large number of Medicaid and indigent
patients. Governor Fob James and the Alabama Medicaid Commission are
actively seeking savings, program improvements and increased state
participation. While other provisions contained in HR 2015 would assist
their efforts, the DSH reductions would devastate the Alabama Medicaid
Program and endanger the health and well-being of Alabama's poor,
elderly and disabled, who suffer enough living in poverty.
Mr. Speaker, I understand that the motion to recomit may address this
matter, but I do not believe the motion is an appropriate avenue for
resolution. The Leadership is aware of my concerns and has agreed to
revisit this issue in conference. Hopefully, an agreement will be
reached to change the formula to reflect a reasonable and compassionate
funding allocation within the bonds of the budget plan.
Mr. KLECZKA. Mr. Speaker, included in this budget package is a
provision which severely threatens every American who seeks medical
treatment. Under the Ways and Means Medicare Title we are considering
today, noneconomic damages in medical malpractice suits will be limited
to $250,000 per case--regardless of the number of persons or the number
of actions brought. This, Mr. Speaker, is a terrible mistake.
Mr. Speaker, we simply cannot afford to weaken our current medical
malpractice laws. In this age of managed care, the financial incentives
of medicine have been completely turned around. In today's managed care
world, doctors make more money by ``managing care'', by not practicing
good medicine, by not ordering tests, by not doing surgeries.
The Republicans argue that the threat of malpractice suits is driving
up medical costs unnecessarily. They argue that physicians are being
forced to practice defensive medicine--forced to order additional
unnecessary tests and procedures to cover themselves in case they might
be sued. Mr. Speaker, this simply is not the case. In fact, a study
conducted by the Office of Technology Assessment concluded that less
than 8 percent of all diagnostic procedures are likely to be caused by
conscious concern about malpractice.
The Office of Technology Assessment and the Congressional Budget
Office who have thoroughly studied this issue have never found any
evidence that defensive medicine is a significant health care cost. In
fact, many times this so-called defensive medicine is, in reality,
medically appropriate. Even the most liberal estimate of the cost of
defensive medicine amounts to only 0.07 percent of total annual health
care costs.
Furthermore, Mr. Speaker, a Harvard University Study indicated that
of the 40 million hospital admission each year, 400,000 patients or 1%
suffer preventable injuries from substandard care. 50,000 of these
patients die from that care. The other 350,000 suffer non-fatal
injuries resulting in 30 days disability or longer. Only 2 percent of
these incidents--or, 8000 cases--actually make it to a malpractice
trial. Clearly, malpractice, itself, is the true cost in today's health
care system, not malpractice suits.
By weakening malpractice laws we are likely to encourage more
careless--not more careful--medical care. Let's not take this dangerous
step. The real victims in the medical malpractice debate are not the
physicians--the real victims are the thousands of patients who are
killed or injured each year due to medical negligence. We absolutely
cannot afford to abandon the protections provided by our judicial
system. Let's maintain the protections that our current malpractice
laws provide.
Mr. BERRY. Mr. Speaker, I rise today in reluctant opposition to this
budget package. I truly respect and admire those who worked long and
hard to prepare this carefully crafted compromise. Both sides--the
White House and Republican leaders--put aside many of their differences
to agree to a budget that goes a long way toward putting our nation on
healthy economic footing.
I am a strong believer in our need to balance the Federal budget. I
am a co-sponsor of legislation that would require a constitutional
amendment to balance the budget, and I supported the spending cuts
contained in the original outline of this proposal.
Mr. Speaker, three weeks ago I voted in favor of the numbers.
However, today, I cannot support the policies that have been crafted to
stand behind those numbers.
I cannot, for example, support the package's Medicare legislation.
While I believe that we all need to work together to ensure Medicare's
solvency, this proposal increases beneficiary premiums by an amount
that I cannot support. It cuts payments to the hospitals in my rural
district at a rate that will be difficult to absorb. Rural hospitals
already operate at much lower margins than their urban counterparts and
will be disproportionally impacted by this proposal. Every single
hospital administrator in my district has written me in opposition to
this proposal.
In addition, it does not provide an adequate cushion against premium
increases for the lowest-income. We can ensure Medicare's solvency for
the long term without harming our seniors, and I think we must put some
more thought into how to do that.
The bill also does not have an adequate enforcement mechanism,
something that I believe is crucial if we really are committed to
balancing the budget. It's one thing to tell America that we're going
to put our fiscal checkbook in order, but it's another thing if we
don't provide any incentive to do so. As this budget now stands, the
federal budget will increase during the first 2 years, requiring that
all cuts to Federal programs take place in the last 3 years. I don't
believe that putting off until tomorrow what we rightly ought to have
the political courage to do today will balance the budget. If anything,
this package could make our federal deficit even worse.
In addition, the bill's plan to auction the broadcast spectrum may be
too much, too fast. Counting on the revenues from this sale, without
adequate protections for rural broadcasters, may jeopardize service in
rural areas.
Likewise, the bill's children's health program, instead of being
modeled after the successful initiatives being implemented in Arkansas
and other States, is fiscally irresponsible, $16 billion no-strings-
attached give-away that does not ensure that the funding will go to
those who need it most--the children.
In fact, the Congressional Budget Office estimates that this $16
billion will cover less than 520,000 children of the 10 million now
without health insurance. The average children's health insurance
policy today costs about $800 a year--spending $16 billion for only
520,000 policies is a waste of our taxpayer's hard earned money. This
proposal, in effect, costs taxpayers $6,000 per policy, per year. More
cost-effective children's health insurance legislation, such as a plan
I developed as co-chairman of the House Democratic Caucus' Health Task
Force, is needed. Our plan, with a more prudent and responsible use of
the $16 billion in the budget agreement, would cover an estimated 5
million children.
Also of note is the fact that this budget does not provide adequate
safeguards to our senior citizens who rely on the Medicaid Program for
their care. I will continue to oppose any budget, any legislation or
any law that in any way endangers the health care of our senior
citizens. I also oppose the bill's repeal of adequate payments to
hospitals under the Medicaid Program and its repeal of important
consumer protections, which could result in reduced services to those
who rely on this important program in Arkansas.
Lastly, this budget repeals important labor and civil rights
protections for those seeking to move from welfare to work. Last year,
Congress voted to end the entitlement status of public assistance and
we all agree that the cycle of welfare dependency should be stopped and
that our citizens should be given the opportunity to obtain economic
self-sufficiency. However, in doing so, we cannot expect former welfare
recipients to work without the guaranteed protection granted to every
other employee under the Fair Labor Standards Act.
While I support many of the concepts contained in this budget, I
cannot in good conscience support it today. I believe, however, that
other opportunities will exist in the near future to support a more
reasonable and effective budget. The House's consideration of this
proposal today is just the first step in what will be a long political
process. The final version of the proposal, following a House-Senate
conference committee, may be something I can support.
But today, with great regret, I must vote with my conscience and vote
against this proposal.
[[Page H4591]]
Ms. EDDIE BERNICE JOHNSON of Texas. Mr. Speaker, I rise today to
speak in opposition to this year's budget reconciliation bill. As the
House considers this bill, I recall the words of the great Senator from
Minnesota, Hubert Humprehy when he said:
. . . that the moral test of government is how that
government treats those who are in the dawn of life, the
children; those who are in the twilight of life, the elderly;
and those who are in the shadows of life--the sick, the needy
and the handicapped.
Mr. Speaker, this reconciliation bill fails that crucial test of
government's compassion for all those individuals. When this Republican
package fails to provide welfare workers the leave to care for their
children and parents under the Family Medical Leave Act, it fails the
moral test of government. A Republican bill that backs away from the
commitment between GOP leaders and the President to restore Federal aid
to disabled legal immigrants fails the test of how the Government
should treat those in the shadows of life, the people with
disabilities--who pay their taxes.
Mr. Speaker, last week, certain members of the majority were behind
the effort to issue an apology for slavery in this country. Less than a
week later, their reconciliation bill states that benefits provided to
welfare workers are not to be considered wages or compensation. Simply
stated, this is an underhanded effort to deny welfare workers the labor
and nondiscrimination protections that all other workers enjoy. In
essence, this is confining the welfare worker to a modern day life of
slavery. Mr. Speaker, how long will it take for the majority to
apologize for this?
Mr. Speaker, just yesterday, we heard many colleagues on the other
side of the aisle speak in grandiose tones about human rights
violations in China when we voted on MFN. They opposed granting MFN
because they believed that it would not help stop human rights and
civil liberty abuses. Unfortunately, they are quick to ignore the human
rights of our own people with a bill that restricts access to health
care insurance, fair pay protections for welfare workers, weak sexual
harassment protections and the rights and benefits of legal immigrants.
This bill continues to further the benefits of the rich while eroding
the opportunities for the poor, the children, and those with
disabilities. Mr. Speaker, I sincerely hope that any colleagues who
voted for the budget resolution hoping that it would balance the budget
while helping the unprotected, will now vote against this
reconciliation bill as it falls tremendously short in helping those who
need help the most.
Mr. Speaker, I ask my colleagues to oppose this bill and have our
Government live up to its moral test of how it treats the most
vulnerable and disadvantaged in our country.
Ms. McCARTHY of Missouri. Mr. Speaker, I rise to support passage of
H.R. 2015, the Balanced Budget Act. Balancing the budget is one of the
most important actions we can take to keep the economy strong, provide
jobs, and keep the American dream alive for future generations. I offer
my support to move the process forward because I see this bill as a
work in progress. The measure has several problems that I hope will be
resolved as the details are worked out in the Conference Committee.
These are provisions that go beyond being characterized as difficult
decisions; they are important issues that must be addressed or we will
create problems larger than those we are trying to solve with this
legislation.
One of the most serious issues for my home State of Missouri is the
method by which we achieve the Medicaid savings called for in the
budget agreement. All of the savings for Medicaid are targeted to come
from the Disproportionate Share Hospital Program, and in particular,
the formula that was reported out of the Commerce Committee targeted
the greatest amount of cuts from the States that use the
Disproportionate Share Program the most. While there may have been
problems associated with the program in other States, Missouri runs a
very efficient program and has always used the Disproportionate Share
funds to compensate hospitals for the cost of providing care to the
indigent and uninsured. The formula should be changed by the Conference
Committee to better distribute the savings from the Disproprionate
Share Program among all States that use those funds.
Another of the more serious problems with this bill is its complete
disregard for sound spectrum policy. Once again, common sense has taken
a back seat to budgetary needs, and another spectrum auction has been
ordered that will not raise the funds that are expected. For the past 5
years, spectrum space has been sold to pay for our budget needs, yet
each year the financial return on these auctions has decreased. The
future market is uncertain since the current market is saturated with
spectrum. In addition, the spectrum market devaluation affects minority
and women-owned businesses who have been allowed to make a longer
payment schedule for their previous spectrum investments.
A third item that must be improved is the provision relating to
expanding health care coverage for uninsured children. As a member of
the Democratic Children's Health Care Task Force, I support efforts to
provide assistance to the estimated 10 million children in this country
that currently are not insured. The Democratic alternative builds on
the Medicaid Program, with an enhanced match which would provide
children in need with the greatest chance for appropriate care and an
adequate benefits package. The provisions of this bill use a block
grant approach which, according to CBO, may only cover 500,000
additional children, not the 5 million goal outlined in the budget
negotiations.
I commend all negotiators who have worked tirelessly on this
legislation. The task of balancing the budget is not an easy one. We
have to be prepared to make tough choices that may be difficult for our
constituencies back home. The bill achieves an important goal that I
have worked toward during my entire tenure in Congress, a balanced
Federal budget. I therefore support efforts to send H.R. 2015 to the
conference committee in the hope of further improvements prior to final
passage.
Mr. POSHARD. Mr. Speaker, it is with great regret that I rise today
in opposition to the budget reconciliation bill. During my tenure in
Congress, I have championed balancing the budget and eliminating our
deficit. I have proudly supported a balanced budget constitutional
amendment, and I voted in favor of the balanced budget agreement
reached by President Clinton and Members of Congress. In the past, I
have voted for the budget alternative offered by the Blue Dog Coalition
of conservative Democrats because it followed a formula that foregoes
large tax cuts until our budget is balanced. The Blue Dog budget
thereby avoided deep cuts in programs that benefit our most vulnerable
citizens, postponing the rewards associated with a balanced budget
until we have all made the sacrifices necessary to achieve this goal.
Mr. Speaker, I would like very much to be able to support the budget
reconciliation before us today. I realize that it represents a huge
step towards a goal that I have endorsed for years, and I appreciate
the hard work and difficult choices of my colleagues that have allowed
us to come this far. But I cannot vote for a budget that forces certain
members of our society to bear such a tremendous burden while allowing
others to enjoy the fruits of a balanced budget before one even exists.
Those that will suffer under this bill are the same citizens that have
already suffered too much. We cannot require sacrifice from some but
not from others, and it is this conviction which will force me to vote
against this bill, and to oppose the tax bill which will come before
this House tomorrow.
I have no doubt that the up-front tax cuts in the reconciliation
legislation will, in time, cause the deficit to explode, creating a
situation where we respond by taking more money away from programs
which help the neediest people in this country. Why should we work this
hard and this long to arrive at a plan to balance the budget, only to
have the course reverse a few years from now, forcing our colleagues
and successors to solve the same problems all over again?
Among the specific provisions of this spending bill which cause me
great concern is that which would permit privatization of
administrative operations within the Food Stamp Program. I do not
believe that private entities should be engaged in eligibility
determinations for this or any other benefits program. In addition, I
feel that this spending bill does a great disservice to our Nation's
veterans, who have provided an invaluable contribution. Slashing their
benefits is certainly not the way I want to demonstrate my gratitude.
Furthermore, I must express my deep concern for the bill's piecemeal
restoration of SSI benefits to legal immigrants. While I applaud
provisions which return SSI and Medicaid benefits to those legal
immigrants who were receiving them as of last August, I believe we must
go further and guarantee benefits to those legal immigrants who were
living in our country last summer but who unfortunately have become
disabled since that time.
No. Mr. Speaker, this bill is not perfect. When I voted to support
the balanced budget agreement, I knew that there was still work to be
done, but I was confident that resulting reconciliation bills would
address the major problems, and I would be able to support them in good
conscience. Sadly, it appears I was wrong, and now I must make yet
another of the tough choices that such a process always requires, and
vote against this legislation. I care deeply about balancing our
Federal budget and have worked as hard as anyone in this body to reach
this goal. But as important as this end may be, I cannot support the
means that my colleagues have decided to employ in order to reach it.
It is simply not right to ask those who can least afford it to bear the
burdens of our compromises. Until we agree that sacrifices must be made
across
[[Page H4592]]
the board, and until we agree that the rewards should be similarly
enjoyed, I urge my colleagues to join me in opposing this budget
legislation and in continuing to work to find equitable solutions. The
goal of a balanced budget is well within our reach, but we are not
quite there. Let's take the time and put in the effort to do this
right, so that we can be proud of our contribution to the American
people.
Mr. KLECZKA. Mr. Speaker, today we are debating a budget
reconciliation bill that contains a Medical Savings Account, or MSA,
demonstration project. We have seen this Medical Savings Account
demonstration project debated on this floor before. Last Congress, we
passed a law establishing MSA's for the under 65 population. This
budget bill takes the MSA idea one dangerous step further by opening up
an MSA option for 500,000 seniors enrolled in the Medicare Program. Mr.
Speaker, MSAs may sound like a good thing, but in reality they are very
risky.
Countless health care policy experts have concluded that MSA's will
create extra costs for the Medicare Program and weaken the already
compromised trust fund. The Congressional Budget Office estimated that
the Republican demonstration included in this bill will cost the
Federal Government over 5 years--$2.2 billion. In these times of
budgetary austerity, when the Medicare trust fund is on the verge of
collapse, I ask my colleagues: is this really where we ought to be
targeting our precious resources?
Supporters of the MSA demonstration project argue that MSA's will
enable seniors to take responsibility for their own health care because
they will be more aware of what their health care choices really cost.
In reality, Mr. Speaker, MSA's will give the bank accounts of wealthier
and healthier people, who now cost Medicare very little, Federal money
every year to spend as they see fit. MSA's will allow these individuals
to leave the larger insurance pool and the shared risk that the large
insurance pool provides. And, as a result, the Medicare Program will be
left with only the poorer and the sicker individuals who are more
costly to treat. Mr. Speaker, MSA's will undermine the very purpose of
insurance--shared risk. A shared risk that spreads the high medical
costs of the few, among the many other individuals who have low medical
costs.
Mr. Speaker, adding MSA's to the Medicare Program is a terrible
mistake. While we all support expanding seniors choices, we simply
cannot afford the risks that the MSA's in this bill pose to the long-
term financial stability of the Medicare Program.
Mr. MARKEY. Mr. Speaker, is it just me, or have we gone ``Back to the
Future.'' My colleagues on the other side of the aisle are once again
presenting the American people with a false choice--slashing Medicare
to provide huge tax breaks for the wealthiest Americans. The Republican
leadership seems caught in a playback loop--putting on a straight face
and arguing here on the floor and in committee that cutting $115
billion in Medicare spending will somehow save the program, despite the
fact that not one dime of these savings goes to the trust fund, and
despite the fact that the budget plan also includes an $85 billion tax
break for the wealthy. That's nearly a dollar for dollar tradeoff.
And what would the Republicans have us trade off--health care for
seniors versus health clubs for the wealthy--Medicare for maid service.
Is this any way to make public policy?
Is it sensible to construct a public policy that sends 87 percent of
the benefits of tax and entitlement changes to people in the top 20
percent of income levels in our country? Is it sensible to construct
public policy that sends a measly 4 percent of the benefits to people
in the bottom 60 percent of income levels?
``Holy hatchet job, Mr. Speaker'' the Republican Party's dynamic duo
of proposals for this week is a double-barreled attack on working
families. Piled on top of last year's policy changes, the Republican
tax scheme will actually reduce the after-tax income of the poorest 20
percent of our people by $420 per year. The top 20 percent in our
country will get an after-tax raise of $2,500, and the top 1 percent
get a whopping after-tax raise of $27,000.
``Riddle me this, Mr. Speaker:'' What piece of legislation expands
tax subsidies for IRA's, nearly doubles the maximums for estate taxes,
and reduces the alternative minimum tax on huge corporations? Why, it's
the so-called Taxpayer Relief Act that we will take up tomorrow.
Who would launch such a dastardly scheme?
Our colleagues on the other side of the aisle like to claim that
Democrats are waging class warfare on tax and entitlement issues. Well,
Mr. Speaker, the facts speak for themselves. The Republicans have
launched an all-out attack on seniors and working families. When the
top 20 percent in our country are getting 87 percent of the benefits of
this supply-side scheme, and when the scheme actually increases taxes
for the 40 percent of Americans who earn less than $27,000 per year,
who is making war on whom?
This budget legislation makes the rich more comfortable and the poor
more miserable. Only Mr. Freeze could produce a colder plan for
seniors.
Mr. Speaker, we're not in Gotham City. We should be more focused on
tax and entitlement equity, than on turning a cold shoulder to seniors
and the less fortunate. But that's not what Republican tax-cut
crusaders have proposed.
Republicans have voted to spend $2 billion on medical savings
accounts [MSA's] to benefit the healthiest and wealthiest of our
seniors. It's an experiment no less--and it comes at the same time that
Republicans are proposing $115 billion in Medicare cuts to save the
program.
The $115 billion that the budget resolution slashes from Medicare has
little or nothing to do with saving the program. And, if we're not
actually saving the program, why are we being asked to make cuts--why
are we being asked to raise premiums for seniors and cut payments to
hospitals, doctors, community health centers, and home health care?
Because Medicare once again has become the piggy bank to pay for tax
breaks for the rich.
This budget not only protects corporate welfare and shields big
defense contractors, it shamelessly sacrifices seniors for CEO's. The
budget ax is being sharpened and Medicare is back on the chopping
block--all because Republicans need to come up with the cash to balance
the budget and give huge tax breaks to the wealthy. Now, we all applaud
those who have had the good fortune to be wealthy and successful--but
let's not make the rich richer at the expense of quality health care
for seniors.
And make no mistake, the rich will get richer under the Republican
plan--87 percent of the benefits of these tax and entitlement programs
go to the top 20 percent in our country. On the tax cut alone, over 57
percent of this tax cut flows to families with incomes of more than
$250,000, just 5 percent of all Americans. At the same time, this plan
hikes taxes on the 40 percent of Americans who earn less than $27,000
per year.
Who will really pay the price for this Republican largesse? Who pays,
our parents and grandparents that's who. These proud men and women have
fought for this country, sacrificed for this country, and many survived
the Great Depression and turned this country around and made it such an
economic success.
Our seniors understand sacrifice. They struggled so that their
children and grandchildren would have a better life, a more prosperous
nation, and a more hopeful future.
But what will happen when Medicare and Medicaid are cut for working
families. What additional burdens will middle-aged Americans have to
bear? If seniors are unable to cover the cost of their health care,
whom will they turn to? their adult children, of course. And in each of
these families the $64,000 question will be, do we pay for mom and
dad's health care or do we pay to send the kids to college. No middle-
aged parent should have to make that choice.
We should not insult our seniors' legacy of sacrifice by allowing the
leadership of this Congress to sacrifice them--our parents and
grandparents--just to give a tax cut to the rich and super rich.
It was wrong in 1980. It was wrong in 1995. And it is wrong today.
We can do better than this. Join me in standing up for fairness. Vote
against this proposal. Let's not cut Medicare for seniors just to give
huge tax breaks to the wealthiest Americans.
spectrum provisions of the budget
We should be highly concerned about the increasing emphasis placed
upon spectrum auction revenue to assist in balancing the Federal
budget.
Placing budgetary priorities foremost in FCC licensing decisions
ultimately shortchanges the American public because spectrum allocation
and licensing decisions must encompass a broad interpretation of the
public interest, of which taxpayer interests are but one part.
A short-term, temporary injection of cash into the Federal Treasury
for the purpose of achieving revenue goals for an arbitrary 5-year
budget target serves budgetary interests, but it does not necessarily
serve the broader public interest.
This auction is not going to raise the money that the CBO and OMB
believe it will. Moreover, we will not see all of the rest of the money
that has already been bid in previous auctions because we are flooding
the market and making it awash with spectrum.
There are literally billions that have to be collected from small
businesses, women-owned firms and minority-owned firms who bid for
spectrum at the FCC believing that they were bidding on a scarce
resource. These are entities who historically have had difficulty in
gaining access to capital. What will happen to their hopes of raising
the funds necessary to
[[Page H4593]]
get into the marketplace and compete if the Federal Government rushes
to make more frequencies available for bidding to some of the largest
companies on the planet.
This spectrum auction proposal represents a departure from the
principles of diversity that we built into the spectrum authority we
granted the FCC as part of the 1993 budget. In 1993, we said that we
wanted to see a democratization and diversity in the holding of FCC
licenses. In this budget, after we finally saw minorities and women-
owned businesses beginning to get access to this public resource,
diversity and entrepreneurship is getting trumped by an increasing
emphasis to simply let the deepest pockets bid on the spectrum. This is
in direct contradiction to the message President Clinton delivered in
California last week where he said that:
We must continue to expand opportunity. Full participation
in our strong and growing economy is the best antidote to
envy, despair, and racism. We must press forward to move
millions more from poverty and welfare to work; to bring the
spark of enterprise to inner cities * * * We should not stop
trying to equalize economic opportunity.
Further, the idea that an auction in the year 2001 for spectrum from
the broadcasters that will not be returned to the Government in 2007 is
a very dubious way to raise money. I offered an amendment in committee
to make this return of spectrum more likely by requiring after 2001
that all new TV's be digital capable. That amendment was not agreed to.
changes from commerce committee bill
The bill before us allows the FCC the discretion--rather than
mandatory based upon a 95 percent digital TV household penetration
test--an extension of the date by which TV broadcasters must return
their so-called ``analog'' spectrum from 2007 to some later date.
The bill, however, takes away a Commerce Committee requirement for
minimum bids for FCC auctions. A few weeks ago, licenses for wireless
communications services [WCS] in 4 states sold at auction for a total
of $4. This WCS auction was estimated by CBO to raise $1.8 billion and
yet raised only $13 million. Why should we condone a firesale on the
public's assets.
[From the CQ's House Action Reports]
Changes to H.R. 2015, Balanced Budget Act
(By Joe Nyitray and Chuck Conlon)
The recommended rule automatically incorporates several
changes into H.R. 2015, Balanced Budget Act, as reported by
the Budget Committee.
Spectrum Provisions
The rule modifies the bill's spectrum auction provisions to
increase from $9.7 billion to $20.3 billion over five years
the revenues that would be generated through sales of the
radio broadcast spectrum. The increased revenue are accounted
for by striking or relaxing numerous restrictions included in
the bill on the FCC's ability to auction spectrum.
Among other changes, the rule strikes the bill's
requirements that minimum bids equal two-thirds of previous
CBO estimates, and that the FCC void spectrum auctions that
fail to meet such minimums. It makes discretionary (rather
than mandatory) FCC authority to extend the deadline of 2006
for referring the analog spectrum for television stations
where more than 5% of the station's viewers continue to rely
exclusively on over-the-air analog television signals; it
requires the FCC to complete by the end of FY 2002 the
bidding and assignment of licenses for returned analog
television spectrum and spectrum used for UHF channels 60
through 69 (the bill only requires that bidding for such
spectrum commence by July 1, 2001); it requires the FCC to
``seek to assure'' that low-power TV stations currently
assigned to channels 60 through 69 be reassigned to a lower
channel (the bill prohibits the auctioning of that spectrum
unless such TV stations are reassigned to lower channels
prior to such auctions); and it eliminates provisions that
prohibit the reallocation of spectrum used by NASA for space
research.
Low-Income Medicare Premium Protection
The recommended rule adds an additional $1 billion to the
$500 million already in the bill for Medicaid to help pay the
Medicare Part B premium for low-income beneficiaries, thereby
bringing the total up to $1.5 billion, the amount called for
in the balanced budget agreement between the President and
congressional leaders.
Mr. FRELINGHUYSEN. Mr. Speaker, I rise today in support of H.R. 2015,
the Fiscal Year 1998 Balanced Budget Act.
My priority as a Member of Congress has been to work toward
implementation of a balanced Federal budget. Over the course of the
past 3 years, the Republican Congress has reduced the deficit and cut
Government spending by $43 billion. We have also raised the level of
debate on this issue to the point that we are at today. It took
Republican leadership to get it to this point in history as we are
about to vote on a proposal to balance the Federal budget by 2002--the
first balanced Federal budget since 1969.
I am pleased to stand in support of taking the next step forward
towards securing a better future for our children and for our country.
This budget sets reasonable priorities for Federal Government spending.
And, later this week, we will vote on another proposal to return money
to the pockets of hard-working American citizens.
This agreement balances our country's economic needs with our
commitment to our veterans, seniors, students, and hard-working
taxpayers, and allows generous spending on programs that are important
to them.
The package also contains important reforms to the Medicare program,
that serves so many older Americans in my District and millions of
Americans across the country. Under this agreement, the Medicare part A
trust fund will be preserved and protected for at least 10 years. We
make these reforms while increasing spending on the program each year.
Seniors will be given greater choices in their health care coverage.
For the first time, beneficiaries will have the option of enrolling in
medical savings accounts. The range of preventive benefits will be
expanded to include mammography, diabetes, and prostate and colorectal
cancer screenings.
The budget reconciliation package makes other important changes to
the delivery of health care. States will be provided with greater
flexibility to manage the Medicaid Program and in turn, Federal outlays
on Medicaid will be reduced by approximately $11.4 billion over the
next 5 years. At the same time, States will share a $16 billion block
grant to provide health insurance for currently uninsured children from
low-income families.
H.R. 2015 also makes reasonable changes to existing welfare and
immigration laws that were enacted in the 104th Congress. It maintains
the core reforms to welfare, SSI, and food stamps, yet restores
benefits to a vulnerable group of legal immigrants, the aged and
disabled, who were receiving SSI at the time the laws were signed.
As more and more Americans enroll in managed care, it is critical to
address some concerns that have been raised about the management of
these programs. H.R. 2015 includes a number of important consumer
protections for Medicare and Medicaid recipients enrolled in managed
care. Included are proposals to prohibit a managed care plan from
preventing a physician from advising a patient, and requires that the
length of a Medicaid recipients hospital stay be determined by the
patient and doctor, instead of a health management organization.
For these, and many other reasons, I am pleased to support this
budget that makes commonsense spending decisions, sets priorities,
continues adequate levels of spending on important Federal programs to
protect our health, safety, seniors, families, and children. This
budget resolution is true to our commitment to balance the Federal
budget and live within our means. It assures fiscal discipline and it
takes power out of Washington and returns it to New Jersey and our
neighborhoods.
The SPEAKER pro tempore. All time for debate has expired.
Pursuant to House Resolution 174, the bill is considered as read for
amendment, and the previous question is ordered.
The question is on the engrossment and third reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
{time} 1715
Motion to Recommit Offered by Mr. Brown of Ohio
Mr. BROWN of Ohio. Mr. Speaker, I offer a motion to recommit.
The SPEAKER pro tempore (Mr. Dreier). Is the gentleman opposed to the
bill?
Mr. BROWN of Ohio. In its current form, I am, Mr. Speaker.
The SPEAKER pro tempore. The Clerk will report the motion to
recommit.
The Clerk read as follows:
Motion to Recommit H.R. 2015 with Instructions
Offered by Mr. Brown of Ohio
Mr. Brown of Ohio moves to recommit the bill H.R. 2015 to
the Committee on the Budget with instructions to report the
same back to the House forthwith with the following
amendment:
Strike subtitle F of title III and insert the following:
Subtitle F--Child Health Insurance Initiative Act of 1997
SEC. 3500. SHORT TITLE OF SUBTITLE.
This subtitle may be cited as the ``Child Health Insurance
Initiative Act of 1997''.
CHAPTER 1--IMPROVED OUTREACH
SEC. 3501. GRANT PROGRAM TO PROMOTE OUTREACH EFFORTS.
(a) Authorization of Appropriations.--There are authorized
to be appropriated, for each fiscal year beginning with
fiscal year 1998 to the Secretary of Health and Human
Services, $25,000,000 for grants to States, localities, and
nonprofit entities to promote outreach efforts to enroll
eligible children under the medicaid program under title XIX
[[Page H4594]]
of the Social Security Act (42 U.S.C. 1396 et seq.) and
related programs.
(b) Use of Funds.--Funds under this section may be used to
reimburse States, localities, and nonprofit entities for
additional training and administrative costs associated with
outreach activities. Such activities include the following:
(1) Use of a common application form for federal child
assistance programs.--Implementing use of a single
application form (established by the Secretary and based on
the model application forms developed under subsections (a)
and (b) of section 6506 of the Omnibus Budget Reconciliation
Act of 1989 (42 U.S.C. 701 note; 1396a note)) to determine
the eligibility of a child or the child's family (as
applicable) for assistance or benefits under the medicaid
program and under other Federal child assistance programs
(such as the temporary assistance for needy families program
under part A of title IV of the Social Security Act (42
U.S.C. 601 et seq.), the food stamp program, as defined in
section 3(h) of the Food Stamp Act of 1977 (7 U.S.C.
2012(h)), and the State program for foster care maintenance
payments and adoption assistance payments under part E of
title IV of the Social Security Act (42 U.S.C. 670 et seq.)).
(2) Expanding outstationing of eligibility personnel.--
Providing for the stationing of eligibility workers at sites,
such as hospitals and health clinics, at which children
receive health care or related services.
(c) Application, Etc.--Funding shall be made available
under this section only upon the approval of an application
by a State, locality, or nonprofit entity for such funding
and only upon such terms and conditions as the Secretary
specifies.
(d) Administration.--The Secretary may administer the grant
program under this section through the identifiable
administrative unit designated under section 509(a) of the
Social Security Act (42 U.S.C. 709(a)) to promote
coordination of medicaid and maternal and child health
activities and other child health related activities.
CHAPTER 2--MEDIKIDS PROGRAM
SEC. 3521. STATE ENTITLEMENT TO PAYMENT FOR MEDIKIDS PROGRAM.
(a) In General.--Each State that has a plan for a child
health insurance program, or MediKids program, approved by
the Secretary is entitled to receive, from amounts in the
Treasury not otherwise appropriated and for each fiscal year
beginning with fiscal year 1998, payment of the amounts
provided under section 3523.
(b) Application.--The Secretary shall establish a procedure
for the submittal and approval of plans for MediKids programs
under this chapter. The Secretary shall approve the plan of a
State for such a program if the Secretary determines that--
(1) the State is meeting the medicaid coverage requirements
of section 3522(a), and
(2) the plan provides assurances satisfactory to the
Secretary that the MediKids program will be conducted
consistent with the applicable requirements of section 3522.
SEC. 3522. REQUIREMENTS FOR APPROVAL OF MEDIKIDS PROGRAM.
(a) Adequate Medicaid Coverage.--The medicaid coverage
requirements of this subsection are the following:
(1) Coverage of pregnant women and children and infants up
to 185 percent of poverty.--The State has established 185
percent of the poverty line as the applicable percentage
under section 1902(l)(2)(A) of the Social Security Act (42
U.S.C. 1396a(l)(2)(A)).
(2) Coverage of children up to 19 years of age.--The State
provides, either through exercise of the option under section
1902(l)(1)(D) of such Act (42 U.S.C. 1396a(l)(1)(D)) or
authority under section 1902(r)(2) of such Act (42 U.S.C.
1396a(r)(2)) for coverage under section 1902(l)(1)(D) of such
Act of individuals under 19 years of age, regardless of date
of birth.
(3) Maintenance of effort.--
(A) Medicaid.--Subject to subparagraph (B), the State--
(i) has not modified the eligibility requirements for
children under the State medicaid plan, as in effect on
January 1, 1997 in any manner that would have the effect of
reducing the eligibility of children for coverage under such
plan, and
(ii) will use the funds provided under this chapter to
supplement and not supplant other Federal and State funds.
(B) Waiver exception.--Subparagraph (A) shall not apply to
modifications made pursuant to an application for a waiver
under section 1115 of the Social Security Act (42 U.S.C.
1315) submitted before January 1, 1997.
(b) Coverage of Uninsured Children.--
(1) In general.--A MediKids program shall not provide
benefits for children who are otherwise covered for such
benefits under a medicaid plan or under a group health plan,
health insurance coverage, or other health benefits coverage,
but may expend funds for outreach and other activities in
order to promote coverage under such plans.
(2) Construction.--Nothing in this subsection shall be
construed as requiring a MediKids plan of a State to provide
coverage for all near poverty level children described in
paragraph (1) who are residing in the State.
(c) Medicaid-Equivalent Benefits.--Subject to subsection
(d), a MediKids program shall provide benefits to eligible
children for the equivalent items and services for which
medical assistance is available (other than cost sharing) to
children under the State's medicaid plan.
(d) Premiums and Cost-Sharing.--
(1) In general.--Subject to paragraphs (2) and (3), a
MediKids program may--
(A) require the payment of premiums as a condition for
coverage, but only for a covered child whose family income
exceeds the poverty line;
(B) impose deductibles, coinsurance, copayments, and other
forms of cost-sharing with respect to benefits under the
program; and
(C) vary the levels of premiums, deductibles, coinsurance,
copayments, and other cost-sharing based on a sliding scale
related to the family income of the covered child.
(2) Limits on premiums and cost-sharing.--The Secretary
shall establish limits on the amount of cost-sharing expenses
(including premiums, deductibles, coinsurance, copayments,
and any other required financial contribution) that may be
applied under the program. Such limits shall assure that
total cost sharing expenses for children participating in
such program are reasonable in relation to the income of
their family (and taking into account the other types of
expenses generally incurred by such families and family size)
and that such cost sharing expenses do not unreasonably
reduce access to the coverage or covered services provided
under such program.
(3) No cost sharing for preventive services.--A MediKids
program may not impose deductibles, coinsurance, copayments,
or similar cost sharing for preventive services.
SEC. 3523. PAYMENT AMOUNTS.
(a) Total Amount Available.--
(1) In general.--The total amount of funds that is
available for payments under this chapter in any fiscal year
is the base amount specified in paragraph (2) for the fiscal
year reduced by the amount specified under paragraph (3) for
the fiscal year.
(2) Base amount.--The base amount specified under this
paragraph for fiscal year 1998 and any subsequent fiscal year
is $2,805,000,000.
(3) Offset for certain increased medicaid expenditures.--
(A) In general.--Subject to subparagraph (B), the amount
specified under this paragraph for a fiscal year is the
amount of aggregate additional Federal expenditures under
made title XIX of the Social Security Act during the fiscal
year that the Secretary estimates, before the beginning of
the fiscal year, is attributable to imposition of the
conditions described in section 3522(a). For purposes of
applying the previous sentence, any Federal expenditures that
result from an increase in the applicable percentage under
section 1902(l)(2)(A) of the Social Security Act above the
percentage in effect as of June 25, 1997, or from any
exercise of an option described in section 3522(a)(2)
effected on or after such date, shall be treated as
additional Federal expenditures attributable to the
imposition of the conditions described in section 3522(a).
(B) Adjustment to reflect actual expenditures.--After the
end of each fiscal year, the Secretary shall determine the
actual amount of the additional Federal expenditures
described in subparagraph (A) for the fiscal year. The
Secretary shall adjust the amount otherwise specified under
subparagraph (A) for subsequent years to take into account
the amount by which the amounts estimated for previous fiscal
years under such subparagraph were greater, or less than, the
actual amount of the expenditures for such years.
(b) Allotment Among States.--
(1) In general.--The Secretary shall establish a formula
for the allotment of the total amount of funds available
under subsection (a) among the qualifying States for each
fiscal year.
(2) Basis.--The formula shall be based upon the Secretary's
estimate of the number of near poverty level children in the
State as a proportion of the total of such numbers for all
the qualifying States.
(3) Carryforward.--If the Secretary does not pay to a State
under subsection (c) in a fiscal year the amount of its
allotment in that fiscal year under this subsection, the
amount of its allotment under this subsection for the
succeeding fiscal year shall be increased by the amount of
such shortfall.
(c) Payments.--
(1) In general.--From the allotment of each qualifying
State under subsection (b) for a fiscal year, the Secretary
shall pay to the State for each quarter in the fiscal year an
amount equal to 75 percent of the total amount expended
during such quarter to carry out the State's MediKids
program.
(2) Not counting cost sharing.--For purposes of paragraph
(1), if a MediKids program imposes premiums for coverage or
requires payment of deductibles, coinsurance, copayments, or
other cost sharing, under rules of the Secretary,
expenditures attributable to such premiums or cost sharing
shall not be taken into account under paragraph (1).
(d) State Entitlement.--This chapter constitutes budget
authority in advance of appropriations Acts, and represents
the obligation of the Federal Government to provide for the
payment to qualifying States of amounts provided under this
section.
SEC. 3529. DEFINITIONS.
For purposes of this chapter:
(1) The term ``child'' means an individual under 19 years
of age.
(2) The term ``medicaid plan'' means the plan of medical
assistance of a State under title XIX of the Social Security
Act.
[[Page H4595]]
(3) The term ``MediKids program'' means a child health
insurance program of a State under this title.
(4) The term ``near poverty level child'' means a child the
family income of which (as defined by the Secretary) is at
least 100 percent, but less than 300 percent, of the poverty
line.
(5) The term ``poverty line'' has the meaning given such
term in section 673(2) of the Community Services Block Grant
Act (42 U.S.C. 9902(2)), including any revision required by
such section.
(6) The term ``qualifying State'' means a State with a
MediKids program for which a plan is submitted and approved
under this title.
(7) The term ``Secretary'' means the Secretary of Health
and Human Services .
(8) The term ``State'' means the 50 States, the District of
Columbia, Puerto Rico, the Virgin Islands, Guam, American
Samoa, and the Northern Mariana Islands.
CHAPTER 3--CONTINUATION OF MEDICAID ELIGIBILITY FOR DISABLED CHILDREN
WHO LOSE SSI BENEFITS
SEC. 3531. CONTINUATION OF MEDICAID ELIGIBILITY FOR DISABLED
CHILDREN WHO LOSE SSI BENEFITS.
(a) In General.--Section 1902(a)(10)(A)(i)(II) of the
Social Security Act (42 U.S.C. 1396a(a)(10)(A)(i)(II)) is
amended by inserting ``(or were being paid as of the date of
enactment of section 211(a) of the Personal Responsibility
and Work Opportunity Reconciliation Act of 1996 (P.L. 104-
193)) and would continue to be paid but for the enactment of
that section'' after ``title XVI''.
(b) Effective Date.--The amendment made by subsection (a)
applies to medical assistance furnished on or after July 1,
1997.
CHAPTER 4--ASSURING CHILDREN'S ACCESS TO HEALTH INSURANCE
SEC. 3541. GUARANTEED AVAILABILITY OF INDIVIDUAL HEALTH
INSURANCE COVERAGE TO UNINSURED CHILDREN.
(a) In General.--Title XXVII of the Public Health Service
Act, as added by section 111(a) of the Health Insurance
Portability and Accountability Act of 1996, is amended by
inserting after section 2741 the following new section:
``SEC. 2741A. GUARANTEED AVAILABILITY OF INDIVIDUAL HEALTH
INSURANCE COVERAGE TO UNINSURED CHILDREN.
``(a) Guaranteed Availability.--
``(1) In general.--Subject to the succeeding subsections of
this section, each health insurance issuer that offers health
insurance coverage (as defined in section 2791(b)(1)) in the
individual market in a State, in the case of an eligible
child (as defined in subsection (b)) desiring to enroll in
individual health insurance coverage--
``(A) may not decline to offer such coverage to, or deny
enrollment of, such child;
``(B) either (i) does not impose any preexisting condition
exclusion (as defined in section 2701(b)(1)(A)) with respect
to such coverage, or (ii) imposes such a preexisting
condition exclusion only to the extent such an exclusion may
be imposed under section 2701(a) in the case of an individual
who is not a late enrollee; and
``(C) shall provide that the premium for the coverage is
determined in a manner so that the ratio of the premium for
such eligible children to the premium for eligible
individuals described in section 2741(b) does not exceed the
ratio of the actuarial value of such coverage (calculated
based on a standardized population and a set of standardized
utilization and cost factors) for children to such actuarial
value for such coverage for such eligible individuals.
``(2) Substitution by state of acceptable alternative
mechanism.--The requirement of paragraph (1) shall not apply
to health insurance coverage offered in the individual market
in a State in which the State is implementing an acceptable
alternative mechanism under section 2744.
``(b) Eligible Child Defined.--In this part, the term
`eligible child' means an individual born after September 30,
1983, who has not attained 19 years of age and--
``(1) who is a citizen or national of the United States, an
alien lawfully admitted for permanent residence, or an alien
otherwise permanently residing in the United States under
color of law;
``(2) who is not eligible for coverage under (A) a group
health plan, (B) part A or part B of title XVIII of the
Social Security Act, or (C) a State plan under title XIX of
such Act (or any successor program), and does not have other
health insurance coverage; and
``(3) with respect to whom the most recent coverage (if
any, within the 1-year period ending on the date coverage is
sought under this section) was not terminated based on a
factor described in paragraph (1) or (2) of section 2712(b)
(relating to nonpayment of premiums or fraud).
For purposes of paragraph (2)(A), the term `group health
plan' does not include COBRA continuation coverage.
``(c) Incorporation of Certain Provisions.--
``(1) In general.--Subject to paragraph (2), the provisions
of subsections (c), (d), (e) and (f) (other than paragraph
(1)) of section 2741 and section 2744 shall apply in relation
to eligible children under subsection (a) in the same manner
as they apply in relation to eligible individuals under
section 2741(a).
``(2) Special rules for acceptable alternative
mechanisms.--With respect to applying section 2744 under
paragraph (1)--
``(A) the requirement in subsection (a)(1)(B) shall be
applied instead of the requirement of section 2744(a)(1)(B);
``(B) the requirement in subsection (a)(1)(C) shall be
applied instead of the requirement of section 2744(a)(1)(D);
and
``(C) any deadline specified in such section shall be 1
year after the deadline otherwise specified.''.
(b) Effective Date.--The amendment made by subsection (a)
shall take apply 1 year after the effective date for section
2741 of the Public Health Service Act (as provided under
section 111(b)(1) of the Health Insurance Portability and
Accountability Act of 1996).
Amendment to H.R. --. as Reported
Offered by Mr. Barton of Texas
At the end of the bill, add the following new title:
TITLE XI--BUDGET PROCESS ENFORCEMENT
SEC. 11001. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This title may be cited as the ``Balanced
Budget Assurance Act of 1997''.
(b) Table of Contents.--
TITLE XI--BUDGET PROCESS ENFORCEMENT
Sec. 11001. Short title and table of contents.
Sec. 11002. Definitions.
Subtitle A--Ensure That the Bipartisan Balanced Budget Agreement of
1997 Achieves Its Goal
Sec. 11101. Timetable.
Sec. 11102. Procedures to avoid sequestration or delay of new revenue
reductions.
Sec. 11103. Effect on Presidents' budget submissions; point of order.
Sec. 11104. Deficit and revenue targets.
Sec. 11105. Direct spending caps.
Sec. 11106. Economic assumptions.
Sec. 11107. Revisions to deficit and revenue targets and to the caps
for entitlements and other mandatory spending.
Subtitle B--Enforcement Provisions
Sec. 11201. Reporting excess spending.
Sec. 11202. Enforcing direct spending caps.
Sec. 11203. Sequestration rules.
Sec. 11204. Enforcing revenue targets.
Sec. 11205. Exempt programs and activities.
Sec. 11206. Special rules.
Sec. 11207. The current law baseline.
Sec. 11208. Limitations on emergency spending.
SEC. 11002. DEFINITIONS.
For purposes of this title:
(1) Eligible population.--The term ``eligible population''
shall mean those individuals to whom the United States is
obligated to make a payment under the provisions of a law
creating entitlement authority. Such term shall not include
States, localities, corporations or other nonliving entities.
(2) Sequester and sequestration.--The terms ``sequester''
and ``sequestration'' refer to or mean the cancellation of
budgetary resources provided by discretionary appropriations
or direct spending law.
(3) Breach.--The term ``breach'' means, for any fiscal
year, the amount (if any) by which outlays for that year
(within a category of direct spending) is above that
category's direct spending cap for that year.
(4) Baseline.--The term ``baseline'' means the projection
(described in section 11207) of current levels of new budget
authority, outlays, receipts, and the surplus or deficit into
the budget year and the outyears.
(5) Budgetary resources.--The term ``budgetary resources''
means new budget authority, unobligated balances, direct
spending authority, and obligation limitations.
(6) Discretionary appropriations.--The term ``discretionary
appropriations'' means budgetary resources (except to fund
direct spending programs) provided in appropriation Acts. If
an appropriation Act alters the level of direct spending or
offsetting collections, that effect shall be treated as
direct spending. Classifications of new accounts or
activities and changes in classifications shall be made in
consultation with the Committees on Appropriations and the
Budget of the House of Representatives and the Senate and
with CBO and OMB.
(7) Direct spending.--The term ``direct spending'' means--
(A) budget authority provided by law other than
appropriation Acts, including entitlement authority;
(B) entitlement authority; and
(C) the food stamp program.
If a law other than an appropriation Act alters the level of
discretionary appropriations or offsetting collections, that
effect shall be treated as direct spending.
(8) Entitlement authority.--The term ``entitlement
authority'' means authority (whether temporary or permanent)
to make payments (including loans and grants), the budget
authority for which is not provided for in advance by
appropriation Acts, to any person or government if, under the
provisions of the law containing such authority, the United
States is obligated to make such payments to persons or
governments who meet the requirements established by such
law.
(9) Current.--The term ``current'' means, with respect to
OMB estimates included with a budget submission under section
1105(a) of title 31 U.S.C., the estimates consistent with the
economic and technical assumptions underlying that budget.
[[Page H4596]]
(10) Account.--The term ``account'' means an item for which
there is a designated budget account designation number in
the President's budget.
(11) Budget year.--The term ``budget year'' means the
fiscal year of the Government that starts on the next October
1.
(12) Current year.--The term ``current year'' means, with
respect to a budget year, the fiscal year that immediately
precedes that budget year.
(13) Outyear.--The term ``outyear'' means, with respect to
a budget year, any of the fiscal years that follow the budget
year.
(14) OMB.--The term ``OMB'' means the Director of the
Office of Management and Budget.
(15) CBO.--The term ``CBO'' means the Director of the
Congressional Budget Office.
(16) Budget outlays and outlays.--The terms ``budget
outlays'' and ``outlays'' mean, with respect to any fiscal
year, expenditures of funds under budget authority during
such year.
(17) Budget authority and new budget authority.--The terms
``budget authority'' and ``new budget authority'' have the
meanings given to them in section 3 of the Congressional
Budget and Impoundment Control Act of 1974.
(18) Appropriation act.--The term ``appropriation Act''
means an Act referred to in section 105 of title 1 of the
United States Code.
(19) Consolidated Deficit.--The term ``consolidated
deficit'' means, with respect to a fiscal year, the amount by
which total outlays exceed total receipts during that year.
(20) Surplus.--The term ``surplus'' means, with respect to
a fiscal year, the amount by which total receipts exceed
total outlays during that year.
(21) Direct spending caps.--The term ``direct spending
caps'' means the nominal dollar limits for entitlements and
other mandatory spending pursuant to section 11105 (as
modified by any revisions provided for in this Act).
Subtitle A--Ensure That the Bipartisan Balanced Budget Agreement of
1997 Achieves Its Goal
SEC. 11101. TIMETABLE.
Action to be completed:
CBO economic and budget update.........................................
President's budget update based on new assumptions.....................
CBO and OMB updates....................................................
Preview report.........................................................
Not later than November 1 (and as soon as practical after the end of
OMB and CBO Analyses of Deficits, Revenues and Spending Levels and ....
Projections for the Upcoming Year.
Congressional action to avoid sequestration............................
OMB issues final (look back) report for prior year and preview for ....
current year.
Presidential sequester order or order delaying new/additional revenues
reductions scheduled to take effect pursuant to reconciliation
legislation enacted in calendar year 1997.
SEC. 11102. PROCEDURES TO AVOID SEQUESTRATION OR DELAY OF NEW
REVENUE REDUCTIONS.
(a) Special Message.--If the OMB Analysis of Actual
Spending Levels and Projections for the Upcoming Year
indicates that--
(1) deficits in the most recently completed fiscal year
exceeded, or the deficits in the budget year are projected to
exceed, the deficit targets in section 11104;
(2) revenues in the most recently completed fiscal year
were less than, or revenues in the current year are projected
to be less than, the revenue targets in section 11104; or
(3) outlays in the most recently completed fiscal year
exceeded, or outlays in the current year are projected to
exceed, the caps in section 11104;
the President shall submit to Congress with the OMB Analysis
of Actual Spending Levels and Projections for the Upcoming
Year a special message that includes proposed legislative
changes to--
(A) offset the net deficit or outlay excess;
(B) offset any revenue shortfall; or
(C) revise the deficit or revenue targets or the outlay
caps contained in this Act;
through any combination of--
(i) reductions in outlays;
(ii) increases in revenues; or
(iii) increases in the deficit targets or expenditure caps,
or reductions in the revenue targets, if the President
submits a written determination that, because of economic or
programmatic reasons, none of the variances from the balanced
budget plan should be offset.
(b) Introduction of the President's Package.--Not later
than November 15, the message from the President required
pursuant to subsection (a) shall be introduced as a joint
resolution in the House of Representatives or the Senate by
the chairman of its Committee on the Budget. If the chairman
fails to do so, after November 15, the joint resolution may
be introduced by any Member of that House of Congress and
shall be referred to the Committee on the Budget of that
House.
(c) House Budget Committee Action.--The Committee on the
Budget of the House of Representatives shall, by November 15,
report a joint resolution containing--
(1) the recommendations in the President's message, or
different policies and proposed legislative changes than
those contained in the message of the President, to
ameliorate or eliminate any excess deficits or expenditures
or any revenue shortfalls, or
(2) any changes to the deficit or revenue targets or
expenditure caps contained in this Act, except that any
changes to the deficit or revenue targets or expenditure caps
cannot be greater than the changes recommended in the message
submitted by the President.
(d) Procedure if the Committees on the Budget of the House
of Representatives or Senate Fails To Report Required
Resolution.--
(1) Automatic discharge of committees on the budget of the
house.--If the Committee on the Budget of the House of
Representatives fails, by November 20, to report a resolution
meeting the requirements of subsection (c), the committee
shall be automatically discharged from further consideration
of the joint resolution reflecting the President's
recommendations introduced pursuant to subsection (a), and
the joint resolution shall be placed on the appropriate
calendar.
(2) Consideration of discharge resolution in the house.--If
the Committee has been discharged under paragraph (1) above,
any Member may move that the House of Representatives
consider the resolution. Such motion shall be highly
privileged and not debatable. It shall not be in order to
consider any amendment to the resolution except amendments
which are germane and which do not change the net deficit
impact of the resolution.
(e) Consideration of joint resolution in the house.--
Consideration of resolution reported pursuant to subsection
(c) or (d) shall be pursuant to the procedures set forth in
section 305 of the Congressional Budget Act of 1974 and
subsection (d).
(f) Transmittal to Senate.--If a joint resolution passes
the House of Representatives pursuant to subsection (e), the
Clerk of the House of Representatives shall cause the
resolution to be engrossed, certified, and transmitted to the
Senate within 1 calendar day of the day on which the
resolution is passed. The resolution shall be referred to the
Senate Committee on the Budget.
(g) Requirements for Special Joint Resolution in the
Senate.--The Committee on the Budget of the Senate shall
report not later than December 1--
(1) a joint resolution reflecting the message of the
President; or
(2) the joint resolution passed by the House of
Representatives, with or without amendment; or
(3) a joint resolution containing different policies and
proposed legislative changes than those contained in either
the message of the President or the resolution passed by the
House of Representatives, to eliminate all or part of any
excess deficits or expenditures or any revenue shortfalls, or
(4) any changes to the deficit or revenue targets, or to
the expenditure caps, contained in this Act, except that any
changes to the deficit or revenue targets or expenditure caps
cannot be greater than the changes recommended in the message
submitted by the President.
(h) Procedure if the Senate Budget Committee Fails To
Report Required Resolution.--
(1) Automatic discharge of senate budget committee.--In the
event that the Committee on the Budget of the Senate fails,
by December 1, to report a resolution meeting the
requirements of subsection (g), the committee shall be
automatically discharged from further consideration of the
joint resolution reflecting the President's recommendations
introduced pursuant to subsection (a) and of the resolution
passed by the House of Representatives, and both joint
resolutions shall be placed on the appropriate calendar.
(2) Consideration of discharge resolution in the senate.--
(A) If the Committee has been discharged under paragraph (1),
any member may move that the Senate consider the resolution.
Such motion shall be highly privileged and not debatable. It
shall not be in order to consider any amendment to the
resolution except amendments which are germane and which do
not change the net deficit impact of the resolution.
(B) Consideration of resolutions reported pursuant to
subsections (c) or (d) shall be pursuant to the procedures
set forth in section 305 of the Congressional Budget Act of
1974 and subsection (d).
(C) If the joint resolution reported by the Committees on
the Budget pursuant to subsection (c) or (g) or a joint
resolution discharged in the House of Representatives or the
Senate pursuant to subsection (d)(1) or (h)(1) would
eliminate less than--
(i) the entire amount by which actual or projected deficits
exceed, or revenues fall short of, the targets in this Act;
or
(ii) the entire amount by which actual or projected outlays
exceed the caps contained in this Act;
then the Committee on the Budget of the Senate shall report a
joint resolution, raising the deficit targets or outlay caps,
or reducing the revenue targets for any year in which actual
or projected spending, revenues or deficits would not conform
to the deficit and revenue targets or expenditure caps in
this Act.
(k) Conference Reports Shall Fully Address Deficit
Excess.--It shall not be in order in the House of
Representatives or the Senate to consider a conference report
on a joint resolution to eliminate all or part of
[[Page H4597]]
any excess deficits or outlays or to eliminate all or part of
any revenue shortfall compared to the deficit and revenue
targets and the expenditure caps contained in this Act,
unless--
(1) the joint resolution offsets the entire amount of any
overage or shortfall; or
(2) the House of Representatives and Senate both pass the
joint resolution reported pursuant to subsection (j)(2).
The vote on any resolution reported pursuant to subsection
(j)(2) shall be solely on the subject of changing the deficit
or revenue targets or the expenditure limits in this Act.
SEC. 11103. EFFECT ON PRESIDENTS' BUDGET SUBMISSIONS; POINT
OF ORDER.
(a) Budget Submission.--Any budget submitted by the
President pursuant to section 1105(a) of title 31, United
States Code, for each of fiscal years 1998 through 2007 shall
be consistent with the spending, revenue, and deficit levels
established in sections 11104 and 11105 or it shall recommend
changes to those levels
(b) Point of Order.--It shall not be in order in the House
of Representatives or the Senate to consider any concurrent
resolution on the budget unless it is consistent with the
spending, revenue, and deficit levels established in sections
11104 and 11105.
SEC. 11104. DEFICIT AND REVENUE TARGETS.
(a) Consolidated Deficit (or Surplus) Targets.--For
purposes of sections 11102 and 11107, the consolidated
deficit targets shall be--
(1) for fiscal year 1998, $90,500,000,000;
(2) for fiscal year 1999, $89,700,000,000;
(3) for fiscal year 2000, $83,000,000,000;
(4) for fiscal year 2001, $53,300,000,000; and
(5) for fiscal year 2002, there shall be a surplus of not
less than $1,400,000,000.
(b) Consolidated Revenue Targets.--For purposes of sections
11102, 11107, 11201, and 11204, the consolidated revenue
targets shall be--
(1) for fiscal year 1998, $1,601,800,000,000;
(2) for fiscal year 1999, $1,664,200,000,000;
(3) for fiscal year 2000, $1,728,100,000,000;
(4) for fiscal year 2001, $1,805,100,000,000; and
(5) for fiscal year 2002, $1,890,400,000,000.
SEC. 11105. DIRECT SPENDING CAPS.
(a) In General.--Effective upon submission of the report by
OMB pursuant to subsection (c), direct spending caps shall
apply to all entitlement authority except for undistributed
offsetting receipts and net interest outlays. For purposes of
enforcing direct spending caps under this Act, each separate
program shown in the table set forth in subsection (d) shall
be deemed to be a category.
(b) Budget Committee Reports.--Within 30 days after
enactment of this Act, the Budget Committees of the House of
Representatives and the Senate shall file with their
respective Houses identical reports containing account
numbers and spending levels for each specific category.
(c) Report by OMB.--Within 30 days after enactment of this
Act, OMB shall submit to the President and each House of
Congress a report containing account numbers and spending
limits for each specific category.
(d) Contents of Reports.--All direct spending accounts not
included in these reports under separate categories shall be
included under the heading ``Other Entitlements and Mandatory
Spending''. These reports may include adjustments among the
caps set forth in this Act as required below, however the
aggregate amount available under the ``Total Entitlements and
Other Mandatory Spending'' cap shall be identical in each
such report and in this Act and shall be deemed to have been
adopted as part of this Act. Each such report shall include
the actual amounts of the caps for each year of fiscal years
1998 through 2002 consistent with the concurrent resolution
on the budget for FY 1998 for each of the following
categories:
Earned Income Tax Credit,
Family Support,
Federal retirement:
Civilian/other,
Military,
Medicaid,
Medicare,
Social security,
Supplemental security income,
Unemployment compensation,
Veterans' benefits,
Medicare,
Other entitlements and mandatory spending, and
Aggregate entitlements and other mandatory spending.
(e) Additional Spending Limits.--Legislation enacted
subsequent to this Act may include additional caps to limit
spending for specific programs, activities, or accounts with
these categories. Those additional caps (if any) shall be
enforced in the same manner as the limits set forth in such
joint explanatory statement.
SEC. 11106. ECONOMIC ASSUMPTIONS.
Subject to periodic reestimation based on changed economic
conditions or changes in eligible population, determinations
of the direct spending caps under section 11105, any breaches
of such caps, and actions necessary to remedy such breaches
shall be based upon the economic assumptions set forth in the
joint explanatory statement of managers accompanying the
concurrent resolution on the budget for fiscal year 1998
(House Concurrent Resolution 84, 105th Congress).
SEC. 11107. REVISIONS TO DEFICIT AND REVENUE TARGETS AND TO
THE CAPS FOR ENTITLEMENTS AND OTHER MANDATORY
SPENDING.
(a) Automatic Adjustments to Deficit and Revenue Targets
and to Caps for Entitlements and Other Mandatory Spending.--
When the President submits the budget under section 1105(a)
of title 31, United States Code, for any year, OMB shall
calculate (in the order set forth below), and the budget and
reports shall include, adjustments to the deficit and revenue
targets, and to the direct spending caps (and those limits as
cumulatively adjusted) for the current year, the budget year,
and each outyear, to reflect the following:
(1) Changes to revenue targets.--
(A) Changes in growth.--For Federal revenues and deficits
under laws and policies enacted or effective before July 1,
1997, growth adjustment factors shall equal the ratio between
the level of year-over-year growth measured for the fiscal
year most recently completed and the applicable estimated
level for that year as described in section 11105.
(B) Changes in inflation.--For Federal revenues and
deficits under laws and policies enacted or effective before
July 1, 1997, inflation adjustment factors shall equal the
ratio between the level of year-over-year growth measured for
the fiscal year most recently completed and the applicable
estimated level for that year as described in section 11105.
(2) Adjustments to direct spending caps.--
(A) Changes in concepts and definitions.--The adjustments
produced by changes in concepts and definitions shall equal
the baseline levels of new budget authority and outlays using
up-to-date concepts and definitions minus those levels using
the concepts and definitions in effect before such changes.
Such changes in concepts and definitions may only be made in
consultation with the Committees on Appropriations, the
Budget, and Government Reform and Oversight and Governmental
Affairs of the House of Representatives and the Senate.
(B) Changes in net outlays.--Changes in net outlays for all
programs and activities exempt from sequestration under
section 11204.
(C) Changes in inflation.--For direct spending under laws
and policies enacted or effective on or before July 1, 1997,
inflation adjustment factors shall equal the ratio between
the level of year-over-year inflation measured for the fiscal
year most recently completed and the applicable estimated
level for that years as described in section 11105 (relating
to economic assumptions). For direct spending under laws and
policies enacted or effective after July 1, 1997, there shall
be no adjustment to the direct spending caps (for changes in
economic conditions including inflation, nor for changes in
numbers of eligible beneficiaries) unless--
(i) the Act or the joint explanatory statement of managers
accompanying such Act providing new direct spending includes
economic projections and projections of numbers of
beneficiaries; and
(ii) such Act specifically provides for automatic
adjustments to the direct spending caps in section 11105
based on those projections.
(D) Changes in eligible populations.--For direct spending
under laws and policies enacted or effective on or before
July 1, 1997, the basis for adjustments under this section
shall be the same as the projections underlying Table A-4,
CBO Baseline Projections of Mandatory Spending, Including
Deposit Insurance (by fiscal year, in billions of dollars),
published in An Analysis of the President's Budgetary
Proposals for Fiscal Year 1998, March 1997, page 53. For
direct spending under laws and policies enacted or effective
after July 1, 1997, there shall be no adjustment to the
direct spending caps for changes in numbers of eligible
beneficiaries unless--
(i) the Act or the joint explanatory statement of managers
accompanying such Act providing new direct spending includes
economic projections and projections of numbers of
beneficiaries; and
(ii) such Act specifically provides for automatic
adjustments to the direct spending caps in section 11105
based on those projections.
(E) Intra-budgetary payments.--From discretionary accounts
to mandatory accounts. The baseline and the discretionary
spending caps shall be adjusted to reflect those changes.
(c) Changes to Deficit Targets.--The deficit targets in
section 11104 shall be adjusted to reflect changes to the
revenue targets or changes to the caps for entitlements and
other mandatory spending pursuant to subsection (a).
(d) Permissible Revisions to Deficit and Revenue Targets
and Direct Spending Caps.--Deficit and revenue targets and
direct spending caps as enacted pursuant to sections 11104
and 11105 may be revised as follows: Except as required
pursuant to section 11105(a), direct spending caps may only
be amended by recorded vote. It shall be a matter of highest
privilege in the House of Representatives and the Senate for
a Member of the House of Representatives or the Senate to
insist on a recorded vote solely on the question of amending
such caps. It shall not be in order for the Committee on
Rules of the House of Representatives to report a resolution
waiving the provisions of this subsection. This subsection
may be waived in the Senate only by an affirmative vote of
three-fifths of the Members duly chosen and sworn.
[[Page H4598]]
Subtitle B--Enforcement Provisions
SEC. 11201. REPORTING EXCESS SPENDING.
(a) Analysis of Actual Deficit, Revenue, and Spending
Levels.--As soon as practicable after any fiscal year, OMB
shall compile a statement of actual deficits, revenues, and
direct spending for that year. The statement shall identify
such spending by categories contained in section 11105.
(b) Estimate of Necessary Spending Reduction.--Based on the
statement provided under subsection (a), the OMB shall issue
a report to the President and the Congress on December 15 of
any year in which such statement identifies actual or
projected deficits, revenues, or spending in the current or
immediately preceding fiscal years in violation of the
revenue targets or direct spending caps in section 11104 or
11105, by more than one percent of the applicable total
revenues or direct spending for such year. The report shall
include:
(1) All instances in which actual direct spending has
exceeded the applicable direct spending cap.
(2) The difference between the amount of spending available
under the direct spending caps for the current year and
estimated actual spending for the categories associated with
such caps.
(3) The amounts by which direct spending shall be reduced
in the current fiscal year so that total actual and estimated
direct spending for all cap categories for the current and
immediately preceding fiscal years shall not exceed the
amounts available under the direct spending caps for such
fiscal years.
(4) The amount of excess spending attributable solely to
changes in inflation or eligible populations.
SEC. 11202. ENFORCING DIRECT SPENDING CAPS.
(a) Purpose.--This subtitle provides enforcement of the
direct spending caps on categories of spending established
pursuant to section 11105. This section shall apply for any
fiscal year in which direct spending exceeds the applicable
direct spending cap.
(b) General Rules.--
(1) Eliminating a breach.--Each non-exempt account within a
category shall be reduced by a dollar amount calculated by
multiplying the baseline level of sequestrable budgetary
resources in that account at that time by the uniform
percentage necessary to eliminate a breach within that
category.
(2) Programs, projects, or activities.--Except as otherwise
provided, the same percentage sequestration shall apply to
all programs, projects and activities within a budget
account.
(3) Indefinite authority.--Except as otherwise provided,
sequestration in accounts for which obligations are
indefinite shall be taken in a manner to ensure that
obligations in the fiscal year of a sequestration and
succeeding fiscal years are reduced, from the level that
would actually have occurred, by the applicable sequestration
percentage or percentages.
(4) Cancellation of budgetary resources.--Budgetary
resources sequestered from any account other than an trust,
special or revolving fund shall revert to the Treasury and be
permanently canceled.
(5) Implementing regulations.--Notwithstanding any other
provision of law, administrative rules or similar actions
implementing any sequestration shall take effect within 30
days after that sequestration.
SEC. 11203. SEQUESTRATION RULES.
(a) General Rules.--For programs subject to direct spending
caps:
(1) Triggering of Sequestration.--Sequestration is
triggered if total direct spending subject to the caps
exceeds or is projected to exceed the aggregate cap for
direct spending for the current or immediately preceding
fiscal year.
(2) Calculation of reductions.--Sequestration shall reduce
spending under each separate direct spending cap in
proportion to the amounts each category of direct spending
exceeded the applicable cap.
(3) Uniform percentages.--In calculating the uniform
percentage applicable to the sequestration of all spending
programs or activities within each category, or the uniform
percentage applicable to the sequestration of nonexempt
direct spending programs or activities, the sequestrable base
for direct spending programs and activities is the total
level of outlays for the fiscal year for those programs or
activities in the current law baseline.
(4) Permanent sequestration of direct spending.--
Obligations in sequestered direct spending accounts shall be
reduced in the fiscal year in which a sequestration occurs
and in all succeeding fiscal years. Notwithstanding any other
provision of this section, after the first direct spending
sequestration, any later sequestration shall reduce direct
spending by an amount in addition to, rather than in lieu of,
the reduction in direct spending in place under the existing
sequestration or sequestrations.
(5) Special rule.--For any direct spending program in
which--
(A) outlays pay for entitlement benefits;
(B) a current-year sequestration takes effect after the 1st
day of the budget year;
(C) that delay reduces the amount of entitlement authority
that is subject to sequestration in the budget; and
(D) the uniform percentage otherwise applicable to the
budget-year sequestration of a program or activity is
increased due to the delay;
then the uniform percentage shall revert to the uniform
percentage calculated under paragraph (3) when the budget
year is completed.
(6) Indexed benefit payments.--If, under any entitlement
program--
(A) benefit payments are made to persons or governments
more frequently than once a year; and
(B) the amount of entitlement authority is periodically
adjusted under existing law to reflect changes in a price
index (commonly called ``cost of living adjustments'');
sequestration shall first be applied to the cost of living
adjustment before reductions are made to the base benefit.
For the first fiscal year to which a sequestration applies,
the benefit payment reductions in such programs accomplished
by the order shall take effect starting with the payment made
at the beginning of January following a final sequester. For
the purposes of this subsection, veterans' compensation shall
be considered a program that meets the conditions of the
preceding sentence.
(7) Loan programs.--For all loans made, extended, or
otherwise modified on or after any sequestration under loan
programs subject to direct spending caps--
(A) the sequestrable base shall be total fees associated
with all loans made extended or otherwise modified on or
after the date of sequestration; and
(B) the fees paid by borrowers shall be increased by a
uniform percentage sufficient to produce the dollar savings
in such loan programs for the fiscal year or years of the
sequestrations required by this section.
Notwithstanding any other provision of law, in any year in
which a sequestration is in effect, all subsequent fees shall
be increased by the uniform percentage and all proceeds from
such fees shall be paid into the general fund of the
Treasury.
(8) Insurance programs.--Any sequestration of a Federal
program that sells insurance contracts to the public
(including the Federal Crop Insurance Fund, the National
Insurance Development Fund, the National Flood Insurance
fund, insurance activities of the Overseas Private Insurance
Corporation, and Veterans' Life insurance programs) shall be
accomplished by increasing premiums on contracts entered into
extended or otherwise modified, after the date a
sequestration order takes effect by the uniform sequestration
percentage. Notwithstanding any other provision of law, for
any year in which a sequestration affecting such programs is
in effect, subsequent premiums shall be increased by the
uniform percentage and all proceeds from the premium increase
shall be paid from the insurance fund or account to the
general fund of the Treasury.
(9) State grant formulas.--For all State grant programs
subject to direct spending caps--
(A) the total amount of funds available for all States
shall be reduced by the amount required to be sequestered;
and
(B) if States are projected to receive increased funding in
the budget year compared to the immediately preceding fiscal
year, sequestration shall first be applied to the estimated
increases before reductions are made compared to actual
payments to States in the previous year--
(i) the reductions shall be applied first to the total
estimated increases for all States; then
(ii) the uniform reduction shall be made from each State's
grant; and
(iii) the uniform reduction shall apply to the base funding
levels available to states in the immediately preceding
fiscal year only to the extent necessary to eliminate any
remaining excess over the applicable direct spending cap.
(10) Special rule for certain programs.--Except matters
exempted under section 11204 and programs subject to special
rules set forth under section 11205 and notwithstanding any
other provisions of law, any sequestration required under
this Act shall reduce benefit levels by an amount sufficient
to eliminate all excess spending identified in the report
issued pursuant to section 11201, while maintaining the same
uniform percentage reduction in the monetary value of
benefits subject to reduction under this subsection.
(b) Within-Session Sequester.--If a bill or resolution
providing direct spending for the current year is enacted
before July 1 of that fiscal year and causes a breach within
any direct spending cap for that fiscal year, 15 days later
there shall be a sequestration to eliminate that breach
within that cap.
SEC. 11204. ENFORCING REVENUE TARGETS.
(a) Purpose.--This section enforces the revenue targets
established pursuant to section 11104. This section shall
apply for any year in which actual revenues were less than
the applicable revenue target in the preceding fiscal year or
are projected to be less than the applicable revenue target
in the current year.
(b) Estimate of Necessity To Suspend New Revenue
Reductions.--Based on the statement provided under section
11201(a), OMB shall issue a report to the President and the
Congress on December 15 of any year in which such statement
identifies actual or projected revenues in the current or
immediately preceding fiscal years lower than the applicable
revenue target in section 11104, as adjusted pursuant to
section 11106, by more than 1 percent of the applicable total
revenue target for such year. The report shall include--
(1) all laws and policies described in subsection (c) which
would cause revenues to decline in the calendar year which
begins January 1 compared to the provisions of law in effect
on December 15;
[[Page H4599]]
(2) the amounts by which revenues would be reduced by
implementation of the provisions of law described in
paragraph (1) compared to provisions of law in effect on
December 15; and
(3) whether delaying implementation of the provisions of
law described in paragraph (1) would cause the total for
revenues in the projected revenues in the current fiscal year
and actual revenues in the immediately preceding fiscal year
to equal or exceed the total of the targets for the
applicable years.
(c) No Credits, Deductions, Exclusions, Preferential Rate
of Tax, Etc.--If any provision of the Internal Revenue Code
of 1986 added by the Revenue Reconciliation Act of 1997 would
(but for this section) first take effect in a tax benefit
suspension year, such provision shall not take effect until
the first calendar year which is not a tax benefit suspension
year.
End of Suspension.--If the OMB report issued under section
(a) following a tax benefit suspension your indicates that
the total of revenues projected in the current fiscal year
and actual revenues in he immediately proceeding year will
equal or exceed the applicable targets the President shall
sign an order ending the delayed phase-in of new tax cuts
effective January 1. Such order shall provide that the new
tax cuts shall take effect as if the provisions of this
section had not taken effect.
(e) Suspension of Benefits Being Phased In.--If, under any
provision of the Internal Revenue Code of 1986, there is an
increase in any benefit which would (but for this section)
take effect with respect to a tax benefit suspension year, in
lieu of applying subsection (c)--
(1) any increase in the benefit under such section with
respect to such year and each subsequent calendar year shall
be delayed 1 calendar year, and
(2) the level of benefit under such section with respect to
the prior calendar year shall apply to such tax benefit
suspension year.
(f) Percentage Suspension Where Full Suspension Unnecessary
To Achieve Revenue Target.--If the application of subsections
(c), (d), and (e) to any tax benefit suspension year would
(but for this subsection) (1) all laws and policies described
in subsection (c) which would cause revenues to decline in
the calendar year which begins January 1 compared to the
provisions of law in effect on December 15; subsections (c),
(d), and (e) shall be applied such that the amount of each
benefit which is denied is only the percentage of such
benefit which is necessary to result in revenues equal to
such target. Such percentage shall be determined by OMB, and
the same percentage shall apply to such benefits.
(g) Tax Benefit Suspension Year.--For purposes of this
section, the term ``tax benefit suspension year'' means any
calendar year if the statement issued under subsection (b)
during the preceding calendar year indicates that--
(1) for the fiscal year ending in such preceding calendar
year, actual revenues were lower than the applicable revenue
target in section 11104, as adjusted pursuant to section
11106, for such fiscal year by more than 1 percent of such
target, or
(2) for the fiscal year beginning in such preceding
calendar year, projected revenues (determined without regard
to this section) are estimated to be lower than the
applicable revenue target in section 11104, as adjusted
pursuant to section 11106, for such fiscal year by more than
1 percent of such target.
SEC. 11205. EXEMPT PROGRAMS AND ACTIVITIES.
The following budget accounts, activities within accounts,
or income shall be exempt from sequestration--
(1) net interest;
(2) all payments to trust funds from excise taxes or other
receipts or collections properly creditable to those trust
funds;
(3) offsetting receipts and collections;
(4) all payments from one Federal direct spending budget
account to another Federal budget account;
(5) all intragovernmental funds including those from which
funding is derived primarily from other Government accounts;
(6) expenses to the extent they result from private
donations, bequests, or voluntary contributions to the
Government;
(7) nonbudgetary activities, including but not limited to--
(A) credit liquidating and financing accounts;
(B) the Pension Benefit Guarantee Corporation Trust Funds;
(C) the Thrift Savings Fund;
(D) the Federal Reserve System; and
(E) appropriations for the District of Columbia to the
extent they are appropriations of locally raised funds;
(8) payments resulting from Government insurance,
Government guarantees, or any other form of contingent
liability, to the extent those payments result from
contractual or other legally binding commitments of the
Government at the time of any sequestration;
(9) the following accounts, which largely fulfill
requirements of the Constitution or otherwise make payments
to which the Government is committed--
Bureau of Indian Affairs, miscellaneous trust funds, tribal
trust funds (14-9973-0-7-999);
Claims, defense;
Claims, judgments and relief act (20-1895-0-1-806);
Compact of Free Association, economic assistance pursuant
to Public Law 99-658 (14-0415-0-1-806);
Compensation of the President (11-0001-0-1-802);
Customs Service, miscellaneous permanent appropriations
(20-9992-0-2-852);
Eastern Indian land claims settlement fund (14-2202-0-1-
806);
Farm Credit System Financial Assistance Corporation,
interest payments (20-1850-0-1-351);
Internal Revenue collections of Puerto Rico (20-5737-0-2-
852);
Payments of Vietnam and USS Pueblo prisoner-of-war claims
(15-0104-0-1-153):
Payments to copyright owners (03-5175-0-2-376);
Salaries of Article III judges (not including cost of
living adjustments);
Soldier's and Airman's Home, payment of claims (84-8930-0-
7-705);
Washington Metropolitan Area Transit Authority, interest
payments (46-0300-0-1-401);
(10) the following noncredit special, revolving, or trust-
revolving funds--
Exchange Stabilization Fund (20-4444-0-3-155); and
Foreign Military Sales trust fund (11-82232-0-7-155).
(j) Optional Exemption of Military Personnel.--
(1) The President may, with respect to any military
personnel account, exempt that account from sequestration or
provide for a lower uniform percentage reduction that would
otherwise apply.
(2) The President may not use the authority provided by
paragraph (1) unless he notifies the Congress of the manner
in which such authority will be exercised on or before the
initial snapshot date for the budget year.
SEC. 11206. SPECIAL RULES.
(a) Child Support Enforcement Program.--Any sequestration
order shall accomplish the full amount of any required
reduction in payments under sections 455 and 458 of the
Social Security Act by reducing the Federal matching rate for
State administrative costs under the program, as specified
(for the fiscal year involved) in section 455(a) of such Act,
to the extent necessary to reduce such expenditures by that
amount.
(b) Commodity Credit Corporation.--
(1) Effective date.--For the Commodity Credit Corporation,
the date on which a sequestration order takes effect in a
fiscal year shall vary for each crop of a commodity. In
general, the sequestration order shall take effect when
issued, but for each crop of a commodity for which 1-year
contracts are issued as an entitlement, the sequestration
order shall take effect with the start of the sign-up period
for that crop that begins after the sequestration order is
issued. Payments for each contract in such a crop shall be
reduced under the same terms and conditions.
(2) Dairy program.--
(A) As the sole means of achieving any reduction in outlays
under the milk price-support program, the Secretary of
Agriculture shall provide for a reduction to be made in the
price received by producers for all milk in the United States
and marketed by producers for commercial use.
(B) That price reduction (measured in cents per hundred-
weight of milk marketed) shall occur under subparagraph (A)
of section 201(d)(2) of the Agricultural Act of 1949 (7
U.S.C. 1446(d)(2)(A)), shall begin on the day any
sequestration order is issued, and shall not exceed the
aggregate amount of the reduction in outlays under the milk
price-support program, that otherwise would have been
achieved by reducing payments made for the purchase of milk
or the products of milk under this subsection during that
fiscal year.
(3) Effect of delay.--For purposes of subsection (b)(1),
the sequestrable base for Commodity Credit Corporation is the
current-year level of gross outlays resulting from new budget
authority that is subject to reduction under paragraphs (1)
and (2).
(4) Certain authority not to be limited.--Nothing in this
Act shall restrict the Corporation in the discharge of its
authority and responsibility as a corporation to buy and sell
commodities in world trade, or limit or reduce in any way any
appropriation that provides the Corporation with funds to
cover its realized losses.
(c) Earned Income Tax Credit.--
(1) The sequestrable base for earned income tax credit
program is the dollar value of all current year benefits to
the entire eligible population.
(2) In the event sequestration is triggered to reduce
earned income tax credits, all earned income tax credits
shall be reduced, whether or not such credits otherwise would
result in cash payments to beneficiaries, by a uniform
percentage sufficient to produce the dollar savings required
by the sequestration.
(d) Regular and Extended Unemployment Compensation.--
(1) A State may reduce each weekly benefit payment made
under the regular and extended unemployment benefit programs
for any week of unemployment occurring during any period with
respect to which payments are reduced under any sequestration
order by a percentage not to exceed the percentage by
[[Page H4600]]
which the Federal payment to the State is to be reduced for
such week as a result of such order.
(2) A reduction by a State in accordance with paragraph (1)
shall not be considered as a failure to fulfill the
requirements of section 3304(a)(11) of the Internal Revenue
Code of 1986.
(e) Federal Employees Health Benefits Fund.-- For the
Federal Employees Health Benefits Fund, a sequestration order
shall take effect with the next open season. The
sequestration shall be accomplished by annual payments from
that Fund to the General Fund of the Treasury. Those annual
payments shall be financed solely by charging higher
premiums. The sequestrable base for the Fund is the current-
year level of gross outlays resulting from claims paid after
the sequestration order takes effect.
(f) Federal Housing Finance Board.-- Any sequestration of
the Federal Housing Board shall be accomplished by annual
payments (by the end of each fiscal year) from that Board to
the general fund of the Treasury, in amounts equal to the
uniform sequestration percentage for that year times the
gross obligations of the Board in that year.
(g) Federal Pay.--
(1) In general.-- New budget authority to pay Federal
personnel from direct spending accounts shall be reduced by
the uniform percentage calculated under section 11203(c)(3),
as applicable, but no sequestration order may reduce or have
the effect of reducing the rate of pay to which any
individual is entitled under any statutory pay system (as
increased by any amount payable under section 5304 of title
5, United States Code, or any increase in rates of pay which
is scheduled to take effect under section 5303 of title 5,
United States Code, section 1109 of title 37, United States
Code, or any other provision of law.
(2) Definitions.--For purposes of this subsection--
(A) the term ``statutory pay system'' shall have the
meaning given that term in section 5302(1) of title 5, United
States Code;
term ``elements of military pay'' means--
(i) the elements of compensation of members of the
uniformed services specified in section 1009 of title 37,
United States Code;
(ii) allowances provided members of the uniformed services
under sections 403(a) and 405 of such title; and
(iii) cadet pay and midshipman pay under section 203(c) of
such title; and
(C) the term ``uniformed services'' shall have the same
meaning given that term in section 101(3) of title 37, United
States Code.
(h) Medicare.--
(1) Timing of application of reductions.--
(A) In general.-- Except as provided in subparagraph (B),
if a reduction is made in payment amounts pursuant to
sequestration order, the reduction shall be applied to
payment for services furnished after the effective date of
the order. For purposes of the previous sentence, in the case
of inpatient services furnished for an individual, the
services shall be considered to be furnished on the date of
the individual's discharge from the inpatient facility.
(B) Payment on the basis of cost reporting periods.-- In
the case in which payment for services of a provider of
services is made under title XVIII of the Social Security Act
on a basis relating to the reasonable cost incurred for the
services during a cost reporting period of the provider, if a
reduction is made in payment amounts pursuant to a
sequestration order, the reduction shall be applied to
payment for costs for such services incurred at any time
during each cost reporting period of the provider any part of
which occurs after the effective date of order, but only (for
each such cost reporting period) in the same proportion as
the fraction of the cost reporting period that occurs after
the effective date of the order.
(2) No increase in beneficiary charges in assignment-
related cases.--If a reduction in payment amounts is made
pursuant to a sequestration order for services for which
payment under part B of title XVIII of the Social Security
Act is made on the basis of an assignment described in
section 1842(b)(3)(B)(ii), in accordance with section
1842(b)(6)(B), or under the procedure described in section
1870(f)(1) of such Act, the person furnishing the services
shall be considered to have accepted payment of the
reasonable charge for the services, less any reduction in
payment amount made pursuant to a sequestration order, as
payment in full.
(3) Part b premiums.--In computing the amount and method of
sequestration from part B of title XVIII of the Social
Security Act--
(A) the amount of sequestration shall be calculated by
multiplying the total amount by which Medicare spending
exceeds the appropriate spending cap by a percentage that
reflects the ratio of total spending under Part B to total
Medicare spending; and
(B) sequestration in the Part B program shall be
accomplished by increasing premiums to beneficiaries.
(4) No effect on computation of aapcc.--In computing the
adjusted average per capita cost for purposes of section
1876(a)(4) of the Social Security Act, the Secretary of
Health and Human Services shall not take into account any
reductions in payment amounts which have been or may be
effected under this part.
(i) Postal Service Fund.-- Any sequestration of the Postal
Service Fund shall be accomplished by annual payments from
that Fund to the General Fund of the Treasury, and the
Postmaster General of the United States and shall have the
duty to make those payments during the first fiscal year to
which the sequestration order applies and each succeeding
fiscal year. The amount of each annual payment shall be--
(1) the uniform sequestration percentage, times
(2) the estimated gross obligations of the Postal Service
Fund in that year other than those obligations financed with
an appropriation for revenue forgone that year.
Any such payment for a fiscal year shall be made as soon as
possible during the fiscal year, except that it may be made
in installments within that year if the payment schedule is
approved by the Secretary of the Treasury. Within 30 days
after the sequestration order is issued, the Postmaster
General shall submit to the Postal Rate Commission a plan for
financing the annual payment for that fiscal year and publish
that plan in the Federal Register. The plan may assume
efficiencies in the operation of the Postal Service,
reductions in capital expenditures, increases in the prices
of services, or any combination, but may not assume a lower
Fund surplus or higher Fund deficit and shall follow the
requirements of existing law governing the Postal Service in
all other respects. Within 30 days of the receipt of that
plan, the Postal Rate Commission shall approve the plan or
modify it in the manner that modifications are allowed under
current law. If the Postal Rate Commission does not respond
to the plan within 30 days, the plan submitted by the
Postmaster General shall go into effect. Any plan may be
later revised by the submission of a new plan to the Postal
Rate Commission, which may approve or modify it.
(j) Power Marketing Administrations and T.V.A.-- Any
sequestration of the Department of Energy power marketing
administration funds or the Tennessee Valley Authority fund
shall be accomplished by annual payments from those funds to
the General Fund of the Treasury, and the administrators of
those funds shall have the duty to make those payments during
the fiscal year to which the sequestration order applies and
each succeeding fiscal year. The amount of each payment by a
fund shall be--
(1) the direct spending uniform sequestration percentage,
times
(2) the estimated gross obligations of the fund in that
year other than those obligations financed from discretionary
appropriations for that year.
Any such payment for a fiscal year shall be made as soon as
possible during the fiscal year, except that it may be made
in installments within that year if the payment schedule is
approved by the Secretary of the Treasury. Annual payments by
a fund may be financed by reductions in costs required to
produce the pre-sequester amount of power (but those
reductions shall not include reductions in the amount of
power supplied by the fund), by reductions in capital
expenditures, by increases in tax rates, or by any
combination, but may not be financed by a lower fund surplus,
a higher fund deficit, additional borrowing, delay in
repayment of principal on outstanding debt and shall follow
the requirements of existing law governing the fund in all
other respects. The administrator of a fund or the TVA Board
is authorized to take the actions specified in this
subsection in order to make the annual payments to the
Treasury.
(k) Business-like Transactions.--Notwithstanding any other
provision of law, for programs which provide a business-like
service in exchange for a fee, sequestration shall be
accomplished through a uniform increase in fees (sufficient
to produce the dollar savings in such programs for the fiscal
year of the sequestration required by section 11201(a)(2),
all subsequent fees shall be increased by the same
percentage, and all proceeds from such fees shall be paid
into the general fund of the Treasury, in any year for which
a sequester affecting such programs are in effect.
SEC. 11207. THE CURRENT LAW BASELINE.
(a) Submission of Reports.--CBO and OMB shall submit to the
President and the Congress reports setting forth the budget
baselines for the budget year and the next nine fiscal years.
The CBO report shall be submitted on or before January 15.
The OMB report shall accompany the President's budget.
(b) Determination of the Budget Baseline.--(1) The budget
baseline shall be based on the common economic assumptions
set forth in section 11106, adjusted to reflect revisions
pursuant to subsection (c).
(2) The budget baseline shall consist of a projection of
current year levels of budget authority, outlays, revenues
and the surplus or deficit into the budget year and the
relevant outyears based on current enacted laws as of the
date of the projection.
(3) For discretionary spending items, the baseline shall be
the spending caps in effect pursuant to section 601(a)(2) of
the Congressional Budget Act of 1974. For years for which
there are no caps, the baseline for discretionary spending
shall be the same as the last year for which there were
statutory caps.
(4) For all other expenditures and for revenues, the
baseline shall be adjusted by comparing unemployment,
inflation, interest rates, growth and other economic
indicators-and changes ineligible population-for the most
recent period for which actual data are available, compared
to the assumptions contained in section 11106.
(c) Revisions to the Baseline.--The baseline shall be
adjusted for up-to-date economic assumptions when CBO submits
its
[[Page H4601]]
Economic and Budget Update and when OMB submits its budget
update, and by August 1 each year, when CBO and OBM submit
their midyear reviews.
SEC. 11208. LIMITATIONS ON EMERGENCY SPENDING.
(a) In General.--(1) Within the discretionary caps for each
fiscal year contained in this Act, an amount shall be
withheld from allocation to the appropriate committees of the
House of Representatives and of the Senate and reserved for
natural disasters and other emergency purposes.
(2) Such amount for each such fiscal year shall not be less
than 1 percent of total budget authority and outlays
available within those caps for that fiscal year.
(3) The amounts reserved pursuant to this subsection shall
be made available for allocation to such committees only if--
(A) the President has made a request for such disaster
funds;
(B) the programs to be funded are included in such request;
and
(C) the projected obligations for unforeseen emergency
needs exceed the 10-year rolling average annual expenditures
for existing programs included in the Presidential request
for the applicable fiscal year.
(4) Notwithstanding any other provision of law--
(A) States and localities shall be required to maintain
effort and ensure that Federal assistance payments do not
replace, subvert or otherwise have the effect of reducing
regularly budgeted State and local expenditures for law
enforcement, refighting, road construction and maintenance,
building construction and maintenance or any other category
of regular government expenditure (to ensure that Federal
disaster payments are made only for incremental costs
directly attributable to unforeseen disasters, and do not
replace or reduce regular State and local expenditures for
the same purposes);
(B) the President may not take administrative action to
waive any requirement for States or localities to make
minimum matching payments as a condition or receiving Federal
disaster assistance and prohibit the President from taking
administrative action to waive all or part of any repayment
of Federal loans for the State or local matching share
required as a condition of receiving Federal disaster
assistance, and this clause shall apply to all matching share
requirements and loans to meet matching share requirements
under the Robert T. Stafford Disaster Relief and Emergency
Assistance Act (42 U.S.C. 5121 et seq.) and any other Acts
pursuant to which the President may declare a disaster or
disasters and States and localities otherwise qualify for
Federal disaster assistance; and
(C) a two-thirds vote in each House of Congress shall be
required for each emergency to reduce or waive the State
matching requirement of to forgive all or part of loans for
the State matching share as required under the Robert T.
Stafford Disaster Relief and Emergency Assistance Act.
(b) Effect Budget Resolutions.--(1) All concurrent
resolutions on the budget (including revisions) shall specify
the amount of new budget authority and outlays within the
discretionary spending cap that shall be withheld from
allocation to the committees and reserved for natural
disasters, and a procedure for releasing such funds for
allocation to the appropriate committee. The amount withheld
shall be equal to 1 percent of the total discretionary
spending cap for fiscal year covered by the resolution,
unless additional amounts are specified.
(2) The procedure for allocation of the amounts pursuant to
paragraph (1) shall ensure that the funds are released for
allocation only pursuant to the conditions contained in
subsection (a)(3)(A) through (C).
(c) Restriction on Use of Funds.--Notwithstanding any other
provision of law, the amount reserved pursuant to subsection
(a) shall not be available for other than emergency funding
requirements for particular natural disasters or national
security emergencies so designated by Acts of Congress.
(d) New Point of Order.--(1) Title IV of the Congressional
Budget Act of 1974 is amended by adding at the end the
following new section:
``point of order regarding emergencies
``Sec. 408. It shall not be in order in the House of
Representatives or the Senate to consider any bill or joint
resolution, or amendment thereto or conference report
thereon, containing an emergency designation for purposes of
section 251(b)(2)(D) or 252(e) of the Balanced Budget and
Emergency Deficit Control Act of 1985 or of section 11207 of
the Balanced Budget Assurance Act of 1997 if it also provides
an appropriation or direct spending for any other item or
contains any other matter, but that bill or joint resolution,
amendment, or conference report may contain rescissions of
budget authority or reductions of direct spending, or that
amendment may reduce amounts for that emergency.''.
(2) The table of contents set forth in section 1(b) of the
Congressional Budget and Impoundment Control Act of 1974 is
amended by inserting after the item relating to section 407
the following new item:
``Sec. 408. Point of order regarding emergencies.''.
Mr. BROWN of Ohio (during the reading). Mr. Speaker, I ask unanimous
consent that the motion to recommit be considered as read and printed
in the Record.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Ohio?
There was no objection.
Point of Order
Mr. THOMAS. Mr. Speaker, I rise to a point of order that the
amendment is not germane to the bill.
The SPEAKER pro tempore. The gentleman will state his point of order.
Mr. THOMAS. Mr. Speaker, the budget process provisions prospectively
amend another bill; that is, H.R. 2014, the Revenue Reconciliation Act
of 1997, specifically section 11204(c). It suspends provisions in the
Internal Revenue Code that are added by H.R. 2014 and is, therefore,
beyond the scope.
The SPEAKER pro tempore. Does the gentleman from Texas [Mr. Stenholm]
wish to be heard on the point of order?
Mr. STENHOLM. Yes, Mr. Speaker.
The SPEAKER pro tempore. The Chair recognizes the gentleman from
Texas [Mr. Stenholm].
Mr. STENHOLM. Mr. Speaker, in rising to speak to the point of order,
I will couple it with a parliamentary inquiry. It was my understanding,
since the item in question is the enforcement mechanisms of the budget,
what this motion to recommit includes is the entire Minge-Barton
amendment that was denied an opportunity to be on the floor under the
rule.
In the colloquy that occurred this morning, it was my understanding,
and at least my friends on the other side of the aisle who acceded to
this, that this would eventually be heard in a separate bill on the
floor by July 24. In so doing, it would then be coupled, assuming it
passes, would be coupled with the reconciliation bill so that the final
conference report would include, if the House chooses to include this
in the language of the bill, would be voted upon.
My question, Mr. Speaker, if that is the case, how can it be out of
order for us to consider this amendment today when it will be in order
to consider it on July 24?
The SPEAKER pro tempore. The Chair would respond by saying that he
cannot make a determination as to what the legislative situation would
be at some future date 3 weeks from now.
Mr. STENHOLM. Continuing my question as to the point of order, if it
is the parliamentary judgment today that this is not in order to be
heard as a motion to recommit, under what circumstance could it be
possible for us to consider this at a later date?
The SPEAKER pro tempore. The Chair cannot anticipate what the
conferees on this bill might do. That is something that will be
considered at a future date.
Mr. STENHOLM. So the judgment of the Speaker is that today it is out
of order but it might be in order at a later date?
The SPEAKER pro tempore. The Chair is not going to engage in some
sort of hypothetical consideration as to what might take place several
weeks from now.
Does the gentleman wish to be heard further on the point of order?
Mr. STENHOLM. Mr. Speaker, I would say this is a very curious
circumstance, but I hope the entire House is listening because this is
a very important matter for a lot of us who are supporting this entire
budget process. I am very worried to have this amendment as part of the
recommittal be held out of order and then have hope that perhaps in the
future it will be in order. That bothers me, but I respect the Chair's
decision today.
The SPEAKER pro tempore. Does the gentleman from Ohio [Mr. Brown]
wish to be heard on the point of order?
Mr. BROWN of Ohio. No, Mr. Speaker. We concede the point of order.
The SPEAKER pro tempore. The gentleman concedes the point of order?
Mr. BROWN of Ohio. We await the ruling of the Chair, Mr. Speaker.
The SPEAKER pro tempore. The gentleman from California makes a point
of order that the amendment contained in the motion to recommit with
instructions is not germane to the bill. While the test of germaneness
in this instance is measured against the bill as whole, the Chair notes
that a portion of the amendment makes provisions of another bill not
presently before the House, namely, the Revenue Reconciliation Act of
1997, contingent on achieving revenue targets in future fiscal years.
As such, the amendment is a prospective indirect change in a bill not
yet
[[Page H4602]]
considered by the House. The Chair holds that the amendment is thus not
germane to the bill, H.R. 2015, and sustains the point of order.
Motion to Recommit Offered by Mr. Brown of Ohio
Mr. BROWN of Ohio. Mr. Speaker, I offer a motion to recommit.
The SPEAKER pro tempore. Is the gentleman still opposed to the bill?
Mr. BROWN of Ohio. Yes, Mr. Speaker, I am, more so than when the
Chair asked the last time.
The SPEAKER pro tempore. The Clerk will report the motion.
The Clerk read as follows:
Mr. Brown of Ohio moves to recommit the bill H.R. 2015 to
the Committee on the Budget with instructions to report the
same back to the House forthwith with the following
amendment:
Strike subtitle F of title III and insert the following:
Subtitle F--Child Health Insurance Initiative Act of 1997
SEC. 3500. SHORT TITLE OF SUBTITLE.
This subtitle may be cited as the ``Child Health Insurance
Initiative Act of 1997''.
CHAPTER 1--IMPROVED OUTREACH
SEC. 3501. GRANT PROGRAM TO PROMOTE OUTREACH EFFORTS.
(a) Authorization of Appropriations.--There are authorized
to be appropriated, for each fiscal year beginning with
fiscal year 1998 to the Secretary of Health and Human
Services, $25,000,000 for grants to States, localities, and
nonprofit entities to promote outreach efforts to enroll
eligible children under the medicaid program under title XIX
of the Social Security Act (42 U.S.C. 1396 et seq.) and
related programs.
(b) Use of Funds.--Funds under this section may be used to
reimburse States, localities, and nonprofit entities for
additional training and administrative costs associated with
outreach activities. Such activities include the following:
(1) Use of a common application form for federal child
assistance programs.--Implementing use of a single
application form (established by the Secretary and based on
the model application forms developed under subsections (a)
and (b) of section 6506 of the Omnibus Budget Reconciliation
Act of 1989 (42 U.S.C. 701 note; 1396a note)) to determine
the eligibility of a child or the child's family (as
applicable) for assistance or benefits under the medicaid
program and under other Federal child assistance programs
(such as the temporary assistance for needy families program
under part A of title IV of the Social Security Act (42
U.S.C. 601 et seq.), the food stamp program, as defined in
section 3(h) of the Food Stamp Act of 1977 (7 U.S.C.
2012(h)), and the State program for foster care maintenance
payments and adoption assistance payments under part E of
title IV of the Social Security Act (42 U.S.C. 670 et seq.)).
(2) Expanding outstationing of eligibility personnel.--
Providing for the stationing of eligibility workers at sites,
such as hospitals and health clinics, at which children
receive health care or related services.
(c) Application, Etc.--Funding shall be made available
under this section only upon the approval of an application
by a State, locality, or nonprofit entity for such funding
and only upon such terms and conditions as the Secretary
specifies.
(d) Administration.--The Secretary may administer the grant
program under this section through the identifiable
administrative unit designated under section 509(a) of the
Social Security Act (42 U.S.C. 709(a)) to promote
coordination of medicaid and maternal and child health
activities and other child health related activities.
CHAPTER 2--MEDIKIDS PROGRAM
SEC. 3521. STATE ENTITLEMENT TO PAYMENT FOR MEDIKIDS PROGRAM.
(a) In General.--Each State that has a plan for a child
health insurance program, or MediKids program, approved by
the Secretary is entitled to receive, from amounts in the
Treasury not otherwise appropriated and for each fiscal year
beginning with fiscal year 1998, payment of the amounts
provided under section 3523.
(b) Application.--The Secretary shall establish a procedure
for the submittal and approval of plans for MediKids programs
under this chapter. The Secretary shall approve the plan of a
State for such a program if the Secretary determines that--
(1) the State is meeting the medicaid coverage requirements
of section 3522(a), and
(2) the plan provides assurances satisfactory to the
Secretary that the MediKids program will be conducted
consistent with the applicable requirements of section 3522.
SEC. 3522. REQUIREMENTS FOR APPROVAL OF MEDIKIDS PROGRAM.
(a) Adequate Medicaid Coverage.--The medicaid coverage
requirements of this subsection are the following:
(1) Coverage of pregnant women and children and infants up
to 185 percent of poverty.--The State has established 185
percent of the poverty line as the applicable percentage
under section 1902(l)(2)(A) of the Social Security Act (42
U.S.C. 1396a(l)(2)(A)).
(2) Coverage of children up to 19 years of age.--The State
provides, either through exercise of the option under section
1902(l)(1)(D) of such Act (42 U.S.C. 1396a(l)(1)(D)) or
authority under section 1902(r)(2) of such Act (42 U.S.C.
1396a(r)(2)) for coverage under section 1902(l)(1)(D) of such
Act of individuals under 19 years of age, regardless of date
of birth.
(3) Maintenance of effort.--
(A) Medicaid.--Subject to subparagraph (B), the State--
(i) has not modified the eligibility requirements for
children under the State medicaid plan, as in effect on
January 1, 1997 in any manner that would have the effect of
reducing the eligibility of children for coverage under such
plan, and
(ii) will use the funds provided under this chapter to
supplement and not supplant other Federal and State funds.
(B) Waiver exception.--Subparagraph (A) shall not apply to
modifications made pursuant to an application for a waiver
under section 1115 of the Social Security Act (42 U.S.C.
1315) submitted before January 1, 1997.
(b) Coverage of Uninsured Children.--
(1) In general.--A MediKids program shall not provide
benefits for children who are otherwise covered for such
benefits under a medicaid plan or under a group health plan,
health insurance coverage, or other health benefits coverage,
but may expend funds for outreach and other activities in
order to promote coverage under such plans.
(2) Construction.--Nothing in this subsection shall be
construed as requiring a MediKids plan of a State to provide
coverage for all near poverty level children described in
paragraph (1) who are residing in the State.
(c) Medicaid-Equivalent Benefits.--Subject to subsection
(d), a MediKids program shall provide benefits to eligible
children for the equivalent items and services for which
medical assistance is available (other than cost sharing) to
children under the State's medicaid plan.
(d) Premiums and Cost-Sharing.--
(1) In general.--Subject to paragraphs (2) and (3), a
MediKids program may--
(A) require the payment of premiums as a condition for
coverage, but only for a covered child whose family income
exceeds the poverty line;
(B) impose deductibles, coinsurance, copayments, and other
forms of cost-sharing with respect to benefits under the
program; and
(C) vary the levels of premiums, deductibles, coinsurance,
copayments, and other cost-sharing based on a sliding scale
related to the family income of the covered child.
(2) Limits on premiums and cost-sharing.--The Secretary
shall establish limits on the amount of cost-sharing expenses
(including premiums, deductibles, coinsurance, copayments,
and any other required financial contribution) that may be
applied under the program. Such limits shall assure that
total cost sharing expenses for children participating in
such program are reasonable in relation to the income of
their family (and taking into account the other types of
expenses generally incurred by such families and family size)
and that such cost sharing expenses do not unreasonably
reduce access to the coverage or covered services provided
under such program.
(3) No cost sharing for preventive services.--A MediKids
program may not impose deductibles, coinsurance, copayments,
or similar cost sharing for preventive services.
SEC. 3523. PAYMENT AMOUNTS.
(a) Total Amount Available.--
(1) In general.--The total amount of funds that is
available for payments under this chapter in any fiscal year
is the base amount specified in paragraph (2) for the fiscal
year reduced by the amount specified under paragraph (3) for
the fiscal year.
(2) Base amount.--The base amount specified under this
paragraph for fiscal year 1998 and any subsequent fiscal year
is $2,805,000,000.
(3) Offset for certain increased medicaid expenditures.--
(A) In general.--Subject to subparagraph (B), the amount
specified under this paragraph for a fiscal year is the
amount of aggregate additional Federal expenditures under
made title XIX of the Social Security Act during the fiscal
year that the Secretary estimates, before the beginning of
the fiscal year, is attributable to imposition of the
conditions described in section 3522(a). For purposes of
applying the previous sentence, any Federal expenditures that
result from an increase in the applicable percentage under
section 1902(l)(2)(A) of the Social Security Act above the
percentage in effect as of June 25, 1997, or from any
exercise of an option described in section 3522(a)(2)
effected on or after such date, shall be treated as
additional Federal expenditures attributable to the
imposition of the conditions described in section 3522(a).
(B) Adjustment to reflect actual expenditures.--After the
end of each fiscal year, the Secretary shall determine the
actual amount of the additional Federal expenditures
described in subparagraph (A) for the fiscal year. The
Secretary shall adjust the amount otherwise specified under
subparagraph (A) for subsequent years to take into account
the amount by which the amounts estimated for previous fiscal
years under such subparagraph were greater, or less than, the
actual amount of the expenditures for such years.
(b) Allotment Among States.--
(1) In general.--The Secretary shall establish a formula
for the allotment of the total amount of funds available
under subsection (a) among the qualifying States for each
fiscal year.
[[Page H4603]]
(2) Basis.--The formula shall be based upon the Secretary's
estimate of the number of near poverty level children in the
State as a proportion of the total of such numbers for all
the qualifying States.
(3) Carryforward.--If the Secretary does not pay to a State
under subsection (c) in a fiscal year the amount of its
allotment in that fiscal year under this subsection, the
amount of its allotment under this subsection for the
succeeding fiscal year shall be increased by the amount of
such shortfall.
(c) Payments.--
(1) In general.--From the allotment of each qualifying
State under subsection (b) for a fiscal year, the Secretary
shall pay to the State for each quarter in the fiscal year an
amount equal to 75 percent of the total amount expended
during such quarter to carry out the State's MediKids
program.
(2) Not counting cost sharing.--For purposes of paragraph
(1), if a MediKids program imposes premiums for coverage or
requires payment of deductibles, coinsurance, copayments, or
other cost sharing, under rules of the Secretary,
expenditures attributable to such premiums or cost sharing
shall not be taken into account under paragraph (1).
(d) State Entitlement.--This chapter constitutes budget
authority in advance of appropriations Acts, and represents
the obligation of the Federal Government to provide for the
payment to qualifying States of amounts provided under this
section.
SEC. 3529. DEFINITIONS.
For purposes of this chapter:
(1) The term ``child'' means an individual under 19 years
of age.
(2) The term ``medicaid plan'' means the plan of medical
assistance of a State under title XIX of the Social Security
Act.
(3) The term ``MediKids program'' means a child health
insurance program of a State under this title.
(4) The term ``near poverty level child'' means a child the
family income of which (as defined by the Secretary) is at
least 100 percent, but less than 300 percent, of the poverty
line.
(5) The term ``poverty line'' has the meaning given such
term in section 673(2) of the Community Services Block Grant
Act (42 U.S.C. 9902(2)), including any revision required by
such section.
(6) The term ``qualifying State'' means a State with a
MediKids program for which a plan is submitted and approved
under this title.
(7) The term ``Secretary'' means the Secretary of Health
and Human Services .
(8) The term ``State'' means the 50 States, the District of
Columbia, Puerto Rico, the Virgin Islands, Guam, American
Samoa, and the Northern Mariana Islands.
CHAPTER 3--CONTINUATION OF MEDICAID ELIGIBILITY FOR DISABLED CHILDREN
WHO LOSE SSI BENEFITS
SEC. 3531. CONTINUATION OF MEDICAID ELIGIBILITY FOR DISABLED
CHILDREN WHO LOSE SSI BENEFITS.
(a) In General.--Section 1902(a)(10)(A)(i)(II) of the
Social Security Act (42 U.S.C. 1396a(a)(10)(A)(i)(II)) is
amended by inserting ``(or were being paid as of the date of
enactment of section 211(a) of the Personal Responsibility
and Work Opportunity Reconciliation Act of 1996 (P.L. 104-
193)) and would continue to be paid but for the enactment of
that section'' after ``title XVI''.
(b) Effective Date.--The amendment made by subsection (a)
applies to medical assistance furnished on or after July 1,
1997.
CHAPTER 4--ASSURING CHILDREN'S ACCESS TO HEALTH INSURANCE
SEC. 3541. GUARANTEED AVAILABILITY OF INDIVIDUAL HEALTH
INSURANCE COVERAGE TO UNINSURED CHILDREN.
(a) In General.--Title XXVII of the Public Health Service
Act, as added by section 111(a) of the Health Insurance
Portability and Accountability Act of 1996, is amended by
inserting after section 2741 the following new section:
``SEC. 2741A. GUARANTEED AVAILABILITY OF INDIVIDUAL HEALTH
INSURANCE COVERAGE TO UNINSURED CHILDREN.
``(a) Guaranteed Availability.--
``(1) In general.--Subject to the succeeding subsections of
this section, each health insurance issuer that offers health
insurance coverage (as defined in section 2791(b)(1)) in the
individual market in a State, in the case of an eligible
child (as defined in subsection (b)) desiring to enroll in
individual health insurance coverage--
``(A) may not decline to offer such coverage to, or deny
enrollment of, such child;
``(B) either (i) does not impose any preexisting condition
exclusion (as defined in section 2701(b)(1)(A)) with respect
to such coverage, or (ii) imposes such a preexisting
condition exclusion only to the extent such an exclusion may
be imposed under section 2701(a) in the case of an individual
who is not a late enrollee; and
``(C) shall provide that the premium for the coverage is
determined in a manner so that the ratio of the premium for
such eligible children to the premium for eligible
individuals described in section 2741(b) does not exceed the
ratio of the actuarial value of such coverage (calculated
based on a standardized population and a set of standardized
utilization and cost factors) for children to such actuarial
value for such coverage for such eligible individuals.
``(2) Substitution by state of acceptable alternative
mechanism.--The requirement of paragraph (1) shall not apply
to health insurance coverage offered in the individual market
in a State in which the State is implementing an acceptable
alternative mechanism under section 2744.
``(b) Eligible Child Defined.--In this part, the term
`eligible child' means an individual born after September 30,
1983, who has not attained 19 years of age and--
``(1) who is a citizen or national of the United States, an
alien lawfully admitted for permanent residence, or an alien
otherwise permanently residing in the United States under
color of law;
``(2) who is not eligible for coverage under (A) a group
health plan, (B) part A or part B of title XVIII of the
Social Security Act, or (C) a State plan under title XIX of
such Act (or any successor program), and does not have other
health insurance coverage; and
``(3) with respect to whom the most recent coverage (if
any, within the 1-year period ending on the date coverage is
sought under this section) was not terminated based on a
factor described in paragraph (1) or (2) of section 2712(b)
(relating to nonpayment of premiums or fraud).
For purposes of paragraph (2)(A), the term `group health
plan' does not include COBRA continuation coverage.
``(c) Incorporation of Certain Provisions.--
``(1) In general.--Subject to paragraph (2), the provisions
of subsections (c), (d), (e) and (f) (other than paragraph
(1)) of section 2741 and section 2744 shall apply in relation
to eligible children under subsection (a) in the same manner
as they apply in relation to eligible individuals under
section 2741(a).
``(2) Special rules for acceptable alternative
mechanisms.--With respect to applying section 2744 under
paragraph (1)--
``(A) the requirement in subsection (a)(1)(B) shall be
applied instead of the requirement of section 2744(a)(1)(B);
``(B) the requirement in subsection (a)(1)(C) shall be
applied instead of the requirement of section 2744(a)(1)(D);
and
``(C) any deadline specified in such section shall be 1
year after the deadline otherwise specified.''.
(b) Effective Date.--The amendment made by subsection (a)
shall take apply 1 year after the effective date for section
2741 of the Public Health Service Act (as provided under
section 111(b)(1) of the Health Insurance Portability and
Accountability Act of 1996).
Mr. BROWN of Ohio (during the reading). Mr. Speaker, I ask unanimous
consent that the motion to recommit be considered as read and printed
in the Record.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Ohio?
There was no objection.
Mr. BROWN of Ohio. Mr. Speaker, the Republican children's health care
expansion proposal in the Budget Reconciliation Act before us today
will not ensure real health insurance coverage for the maximum number
of children in the most cost-effective manner. I am deeply concerned
because the Republican plan does not offer a real guarantee of health
care coverage for children or a real benefits package.
The Republican block grant contains a so-called direct services
loophole which could mean that not a single taxpayer penny is used to
provide health insurance for our Nation's 10 million uninsured
children.
States would be free to divert Federal children's health care
expansion funds from directly providing health care coverage for
uninsured children to instead providing direct payments to hospitals
who will suffer under the disproportionate share cuts in this bill.
Just as many States misused the DSH program in the early 1990s to pay
for highway repairs and other related programs, I fear that States will
use these Federal funds to plug holes in shrinking State budgets. We
surely should have learn our lesson.
I believe there are several superior programs to help extend coverage
for uninsured children. Bipartisan legislation introduced by the
gentleman from Michigan [Mr. Dingell], the gentlewoman from New Jersey
[Mrs. Roukema], me, and others would provide children with a
guaranteed, real health care benefits package which includes preventive
care, hearing and vision services, and routine doctor visits.
The Democratic Caucus proposal, another plan which is part of this
motion to recommit, would promote more effective outreach for Medicaid-
eligible children who are not enrolled, allow for voluntary expansion
of Medicaid coverage, establish a State grant program to fund
innovative kids' health initiatives and require the issuance of
affordable kids-only health insurance policies.
The Republican plan, Mr. Speaker, will cost too much, waste too many
tax
[[Page H4604]]
dollars, and fail to insure America's 10 million uninsured children.
Mr. Speaker, I yield to the gentleman from New Jersey [Mr. Pallone].
Mr. PALLONE. Mr. Speaker, I want to commend my colleague for what he
said about the reason we need to propose this Democratic alternative is
because the Republicans have offered just a straight block grant. It
does not mandate that these funds go to the children who need it. It
gives too much discretion to the Governors who might use this money to
fund other huge gaps created by this bill, like the unfair cuts to
disproportionate share hospitals also known as DSH hospitals.
The Democratic Health Care Task Force has a plan, an alternative that
contains four elements:
First, incentives for States to cover children under 19 years of age
in families with less than $24,000 in income and pregnant women and
infants in families with incomes up to $30,000 through an enhanced
Medicaid match.
Second, we have a Medikids grant for States to help middle- and low-
income families to purchase private insurance or participate in a
State-sponsored expanded Medicaid package.
Third, we improve outreach efforts to ensure that nearly 3 million
children eligible for Medicaid that are not enrolled in the program
sign up for health insurance coverage.
And, fourth, insurance reforms to require private insurance companies
to provide health care policies for children at reasonable premiums.
This four-pronged approach takes what we feel are the most positive
aspects in Medicaid matching grants and private insurance reforms. It
assists middle- and low-income families by providing affordable health
insurance for their children. It assures that children are covered by
an adequate benefits package and it provides that proper balance of
State flexibility with public accountability.
I urge my colleagues to support the motion to recommit so that this
House has a real opportunity to address the needs of the 10 million
uninsured children in our country.
The SPEAKER pro tempore. Does any Member rise in opposition to the
motion to recommit?
Mr. THOMAS. Mr. Speaker, I rise in opposition to the motion to
recommit.
Mr. Speaker, we heard all day, speaker after speaker on the other
side of the aisle go into the well and say that the provisions that the
Republicans had structured were outside the scope of the budget
agreement, that we had not lived up to the budget agreement, that oh,
my goodness, how could you not live up to the budget agreement.
Mr. Speaker, this motion to recommit, guess what, does not live up to
the budget agreement. It clearly states in the budget agreement that
there are two areas where money can be spent for children's health
care. One is in Medicaid. The other one is in block grants. Other
possibilities are available if mutually agreeable. Mutually agreeable.
The fact of the matter is, this motion to recommit has mandatory
language requiring private insurers to carry out the wish, yes, the
demands of the Democrats. It is clearly beyond the budget agreement.
How in the world can you folks spend all day telling us that provision
after provision is unacceptable because it is outside the budget
agreement and yet you offer a motion to recommit which is one, subject
to a point of order, it is not germane, and, two, the entire rest of
the context is outside of the budget agreement? Why do you not live up
to what you preach.
I would simply tell my colleagues, the simple answer is to vote no on
the motion to recommit.
Mr. Speaker, I yield to the gentleman from Virginia [Mr. Bliley],
chairman of the Committee on Commerce, who has the specific
jurisdiction of this matter, which is outside the scope of the budget
agreement.
Mr. BLILEY. Mr. Speaker, I thank the gentleman for yielding to me.
Here we go again. All day, speaker after speaker on this side of the
aisle complaining about their Governors getting cut with the DSH
payments and not going to be able to meet the targets. Well, in the
Committee on Commerce we gave $16 billion for kid care and we said to
the Governors, you furnish the health and you furnish the services and
we did not restrict it and they are made pretty much whole for their
Medicare budgets.
But what this recommit motion would do would require States to phase
in all children up to age 19 in the Medicaid Program and would require
States to increase their mandatory levels of eligibility for certain
eligibility groups. These are costly changes. Many States do not have
the budgetary resources to do them. That means these States will not be
eligible or able to participate in kid care and the uninsured children
in those States would be denied the coverage and services they need. It
would require States to provide only the Medicaid benefits packages to
children served by kid care.
This package is so expensive that States would not be able to afford
to cover millions of children who would otherwise receive coverage
under our plan. It would eliminate the ability of States to provide
uninsured children the health services they need. This is a violation
of the budget agreement, as the distinguished chairman of the
Subcommittee on Health of the Committee on Ways and Means pointed out,
which provided for coverage and services to uninsured low-income
children.
In addition, it would mean that services would be denied to the 2.6
million children that CBO estimates would receive health care services
under our plan.
Mr. THOMAS. Mr. Speaker, I yield to the gentleman from Illinois [Mr.
Hastert].
Mr. HASTERT. Mr. Speaker, bigger government, more bureaucrats, more
restrictions on the States. As a matter of fact, we create more
loopholes for the States to jump through and what we do is deny the
States providing kid care for kids. So those 2.6 million children who
were going to benefit from this program all of a sudden will not have
States providing health care for them.
{time} 1730
Too much bureaucracy, too much extra cost, too many new hoops to jump
through. The States are not going to do it. The States are not going to
follow this. And I think it is a bad idea at a bad time.
The SPEAKER pro tempore (Mr. Dreier). All time has expired.
Parliamentary Inquiry
Mr. BROWN of Ohio. Mr. Speaker, parliamentary inquiry.
The SPEAKER pro tempore. The gentleman will state his parliamentary
inquiry.
Mr. BROWN of Ohio. Mr. Speaker, is the language to which the
gentleman from California [Mr. Thomas] and the gentleman from Illinois
[Mr. Hastert] and the gentleman from Virginia [Mr. Bliley] are
referring the State optional program on the----
The SPEAKER pro tempore. The gentleman is not presenting a
parliamentary inquiry.
Without objection, the previous question is ordered on the motion to
recommit.
There was no objection.
The SPEAKER pro tempore. The question is on the motion to recommit.
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Mr. BROWN of Ohio. Mr. Speaker, I object to the vote on the ground
that a quorum is not present and make the point of order that a quorum
is not present.
The SPEAKER pro tempore. Evidently a quorum is not present.
The Sergeant at Arms will notify absent Members.
The vote was taken by electronic device, and there were--yeas 207,
nays 223, not voting 4, as follows:
[Roll No. 240]
YEAS--207
Abercrombie
Ackerman
Allen
Andrews
Baesler
Baldacci
Barcia
Barrett (WI)
Becerra
Bentsen
Berman
Berry
Bishop
Blagojevich
Blumenauer
Bonior
Borski
Boswell
Boucher
Boyd
Brown (CA)
Brown (FL)
Brown (OH)
Capps
Cardin
Carson
Clay
Clayton
Clement
Clyburn
Condit
Conyers
Costello
Coyne
Cramer
Cummings
Danner
Davis (FL)
Davis (IL)
DeFazio
DeGette
Delahunt
DeLauro
Dellums
Deutsch
Dicks
Dingell
Dixon
Doggett
Dooley
Doyle
Edwards
Engel
Eshoo
Etheridge
Evans
Farr
Fattah
Fazio
Filner
Flake
Foglietta
Ford
[[Page H4605]]
Frank (MA)
Frost
Furse
Gejdenson
Gephardt
Gonzalez
Goode
Gordon
Green
Gutierrez
Hall (OH)
Hall (TX)
Hamilton
Harman
Hastings (FL)
Hefner
Hilliard
Hinchey
Hinojosa
Holden
Hooley
Hoyer
Jackson (IL)
Jackson-Lee (TX)
Jefferson
John
Johnson (WI)
Johnson, E. B.
Kanjorski
Kaptur
Kennedy (MA)
Kennedy (RI)
Kennelly
Kildee
Kilpatrick
Kind (WI)
Kleczka
Klink
Kucinich
LaFalce
Lampson
Lantos
Levin
Lewis (GA)
Lipinski
Lofgren
Lowey
Luther
Maloney (CT)
Maloney (NY)
Manton
Markey
Martinez
Mascara
Matsui
McCarthy (MO)
McCarthy (NY)
McDermott
McGovern
McHale
McIntyre
McKinney
McNulty
Meehan
Meek
Menendez
Millender-McDonald
Miller (CA)
Minge
Mink
Moakley
Mollohan
Moran (VA)
Murtha
Nadler
Neal
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor
Payne
Pelosi
Peterson (MN)
Pickett
Pomeroy
Poshard
Price (NC)
Rahall
Rangel
Reyes
Riggs
Rivers
Rodriguez
Roemer
Rothman
Roybal-Allard
Rush
Sabo
Sanchez
Sanders
Sandlin
Sawyer
Schumer
Scott
Serrano
Sherman
Sisisky
Skaggs
Skelton
Slaughter
Smith, Adam
Snyder
Spratt
Stabenow
Stark
Stenholm
Stokes
Strickland
Stupak
Tanner
Tauscher
Taylor (MS)
Thompson
Thurman
Tierney
Torres
Towns
Traficant
Turner
Velazquez
Vento
Visclosky
Waters
Watt (NC)
Waxman
Wexler
Weygand
Wise
Woolsey
Wynn
NAYS--223
Aderholt
Archer
Armey
Bachus
Baker
Ballenger
Barr
Barrett (NE)
Bartlett
Barton
Bass
Bateman
Bereuter
Bilbray
Bilirakis
Bliley
Blunt
Boehlert
Boehner
Bonilla
Bono
Brady
Bryant
Bunning
Burr
Burton
Buyer
Callahan
Calvert
Camp
Campbell
Canady
Cannon
Castle
Chabot
Chambliss
Christensen
Coble
Coburn
Collins
Combest
Cook
Cooksey
Crane
Crapo
Cubin
Cunningham
Davis (VA)
Deal
DeLay
Diaz-Balart
Dickey
Doolittle
Dreier
Duncan
Dunn
Ehlers
Ehrlich
Emerson
English
Ensign
Everett
Ewing
Fawell
Foley
Forbes
Fowler
Fox
Franks (NJ)
Frelinghuysen
Gallegly
Ganske
Gekas
Gibbons
Gilchrest
Gillmor
Gilman
Goodlatte
Goodling
Goss
Graham
Granger
Greenwood
Gutknecht
Hansen
Hastert
Hastings (WA)
Hayworth
Hefley
Herger
Hill
Hilleary
Hobson
Hoekstra
Horn
Hostettler
Houghton
Hulshof
Hunter
Hutchinson
Hyde
Inglis
Istook
Jenkins
Johnson (CT)
Johnson, Sam
Jones
Kasich
Kelly
Kim
King (NY)
Kingston
Klug
Knollenberg
Kolbe
LaHood
Largent
Latham
LaTourette
Lazio
Leach
Lewis (CA)
Lewis (KY)
Linder
Livingston
LoBiondo
Lucas
Manzullo
McCollum
McCrery
McDade
McHugh
McInnis
McIntosh
McKeon
Metcalf
Mica
Miller (FL)
Molinari
Moran (KS)
Morella
Myrick
Nethercutt
Neumann
Ney
Northup
Norwood
Nussle
Oxley
Packard
Pappas
Parker
Paul
Paxon
Pease
Peterson (PA)
Petri
Pickering
Pitts
Pombo
Porter
Portman
Pryce (OH)
Quinn
Radanovich
Ramstad
Redmond
Regula
Riley
Rogan
Rogers
Rohrabacher
Ros-Lehtinen
Roukema
Royce
Ryun
Salmon
Sanford
Saxton
Scarborough
Schaefer, Dan
Schaffer, Bob
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Shimkus
Shuster
Skeen
Smith (MI)
Smith (NJ)
Smith (OR)
Smith (TX)
Smith, Linda
Snowbarger
Solomon
Souder
Spence
Stearns
Stump
Sununu
Talent
Tauzin
Taylor (NC)
Thomas
Thornberry
Thune
Tiahrt
Upton
Walsh
Wamp
Watkins
Watts (OK)
Weldon (FL)
Weldon (PA)
Weller
White
Whitfield
Wicker
Wolf
Young (AK)
Young (FL)
NOT VOTING--4
Chenoweth
Cox
Schiff
Yates
{time} 1748
Mr. HOSTETTLER and Mr. LARGENT changed their vote from ``yea'' to
``nay.''
Mr. LIPINSKI and Ms. WOOLSEY changed their vote from ``nay'' to
``yea.''
So the motion to recommit was rejected.
The result of the vote was announced as above recorded.
The SPEAKER pro tempore (Mr. Dreier). The question is on the passage
of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Recorded vote
Mr. BONIOR. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.
The vote was taken by electronic device, and there were--ayes 270,
noes 162, not voting 3, as follows:
[Roll No. 241]
AYES--270
Aderholt
Archer
Armey
Bachus
Baesler
Baker
Ballenger
Barcia
Barr
Barrett (NE)
Bartlett
Barton
Bass
Bateman
Bentsen
Bereuter
Bilbray
Bilirakis
Bishop
Bliley
Blunt
Boehlert
Boehner
Bonilla
Bono
Boswell
Boyd
Brady
Bryant
Bunning
Burr
Burton
Buyer
Callahan
Calvert
Camp
Campbell
Canady
Cannon
Capps
Castle
Chabot
Chambliss
Chenoweth
Christensen
Clement
Coble
Coburn
Collins
Combest
Condit
Cook
Cooksey
Cramer
Crane
Crapo
Cubin
Cunningham
Danner
Davis (FL)
Davis (VA)
Deal
DeLay
Diaz-Balart
Dickey
Dooley
Doolittle
Doyle
Dreier
Duncan
Dunn
Edwards
Ehlers
Ehrlich
Emerson
English
Ensign
Etheridge
Everett
Ewing
Fawell
Foley
Forbes
Fowler
Fox
Franks (NJ)
Frelinghuysen
Gallegly
Ganske
Gekas
Gibbons
Gilchrest
Gillmor
Gilman
Gingrich
Goode
Goodlatte
Goodling
Gordon
Goss
Graham
Granger
Greenwood
Gutknecht
Hall (OH)
Hamilton
Hansen
Harman
Hastert
Hastings (WA)
Hayworth
Hefley
Herger
Hill
Hilleary
Hobson
Hoekstra
Holden
Hooley
Horn
Hostettler
Houghton
Hulshof
Hunter
Hutchinson
Hyde
Inglis
Istook
Jenkins
John
Johnson (CT)
Johnson, Sam
Jones
Kasich
Kelly
Kennelly
Kim
Kingston
Kleczka
Klug
Knollenberg
Kolbe
LaHood
Lampson
Largent
Latham
LaTourette
Lazio
Leach
Lewis (CA)
Lewis (KY)
Linder
Livingston
LoBiondo
Lucas
Luther
Maloney (CT)
Manzullo
Martinez
McCarthy (MO)
McCollum
McCrery
McDade
McHale
McHugh
McInnis
McIntyre
McKeon
Mica
Miller (FL)
Minge
Molinari
Moran (VA)
Morella
Myrick
Nethercutt
Neumann
Ney
Northup
Norwood
Nussle
Oxley
Packard
Pappas
Parker
Paxon
Pease
Peterson (PA)
Petri
Pickering
Pitts
Pombo
Pomeroy
Porter
Portman
Pryce (OH)
Quinn
Radanovich
Ramstad
Redmond
Regula
Riggs
Riley
Roemer
Rogan
Rogers
Rohrabacher
Ros-Lehtinen
Roukema
Royce
Ryun
Sanchez
Sanford
Saxton
Scarborough
Schaefer, Dan
Schaffer, Bob
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Shimkus
Shuster
Sisisky
Skeen
Skelton
Smith (MI)
Smith (NJ)
Smith (OR)
Smith (TX)
Smith, Adam
Smith, Linda
Snowbarger
Snyder
Solomon
Souder
Spence
Spratt
Stenholm
Stump
Sununu
Talent
Tanner
Tauscher
Tauzin
Taylor (MS)
Taylor (NC)
Thomas
Thornberry
Thune
Thurman
Tiahrt
Traficant
Turner
Upton
Visclosky
Walsh
Wamp
Watkins
Watts (OK)
Weldon (FL)
Weldon (PA)
Weller
White
Whitfield
Wicker
Wolf
Young (AK)
Young (FL)
NOES--162
Abercrombie
Ackerman
Allen
Andrews
Baldacci
Barrett (WI)
Becerra
Berman
Berry
Blagojevich
Blumenauer
Bonior
Borski
Boucher
Brown (CA)
Brown (FL)
Brown (OH)
Cardin
Carson
Clay
Clayton
Clyburn
Conyers
Costello
Coyne
Cummings
Davis (IL)
DeFazio
DeGette
Delahunt
DeLauro
Dellums
Deutsch
Dicks
Dingell
Dixon
Doggett
Engel
Eshoo
Evans
Farr
Fattah
Fazio
Filner
Flake
Foglietta
Ford
Frank (MA)
Frost
Furse
Gejdenson
Gephardt
Gonzalez
Green
Gutierrez
Hall (TX)
Hastings (FL)
Hefner
Hilliard
Hinchey
Hinojosa
Hoyer
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Johnson (WI)
Johnson, E. B.
Kanjorski
Kaptur
Kennedy (MA)
Kennedy (RI)
Kildee
Kilpatrick
Kind (WI)
King (NY)
Klink
Kucinich
LaFalce
Lantos
Levin
Lewis (GA)
Lipinski
Lofgren
Lowey
Maloney (NY)
Manton
Markey
Mascara
Matsui
McCarthy (NY)
McDermott
McGovern
McIntosh
McKinney
McNulty
Meehan
Meek
Menendez
Metcalf
Millender-McDonald
Miller (CA)
Mink
Moakley
Mollohan
Moran (KS)
Murtha
Nadler
Neal
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor
Paul
Payne
[[Page H4606]]
Pelosi
Peterson (MN)
Pickett
Poshard
Price (NC)
Rahall
Rangel
Reyes
Rivers
Rodriguez
Rothman
Roybal-Allard
Rush
Sabo
Salmon
Sanders
Sandlin
Sawyer
Schumer
Scott
Serrano
Sherman
Skaggs
Slaughter
Stabenow
Stark
Stearns
Stokes
Strickland
Stupak
Thompson
Tierney
Torres
Towns
Velazquez
Vento
Waters
Watt (NC)
Waxman
Wexler
Weygand
Wise
Woolsey
Wynn
NOT VOTING--3
Cox
Schiff
Yates
{time} 1809
The Clerk announced the following pairs: on this vote:
Mr. Schiff for, with Mr. Yates against.
Messrs. GORDON, WELDON of Florida, and BARR of Georgia changed their
vote from ``no'' to ``aye.''
So the bill was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
____________________