[Congressional Record Volume 144, Number 140 (Thursday, October 8, 1998)]
[House]
[Pages H10077-H10081]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               AMENDMENTS

  Under clause 6 of rule XXIII, proposed amendments were submitted as 
follows:

                               H.R. 4567

                         Offered By: Mr. Thomas

               (Amendments in the Nature of a Substitute)

       Amendment No. 1: Strike all after the enacting clause and 
     insert the following:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Medicare 
     Home Health and Veterans Health Care Improvement Act of 
     1998''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.

  TITLE I--MEDICARE HOME HEALTH CARE INTERIM PAYMENT SYSTEM REFINEMENT

Sec. 101. Increase in per beneficiary limits and per visit payment 
              limits for payment for home health services.

             TITLE II--VETERANS MEDICARE ACCESS IMPROVEMENT

Sec. 201. Improvement in veterans' access to services.

  TITLE III--AUTHORIZATION OF ADDITIONAL EXCEPTIONS TO IMPOSITION OF 
                   PENALTIES FOR CERTAIN INDUCEMENTS

Sec. 301. Authorization of additional exceptions to imposition of 
              penalties for providing inducements to beneficiaries.

  TITLE IV--EXPANSION OF MEMBERSHIP OF THE MEDICARE PAYMENT ADVISORY 
                               COMMISSION

Sec. 401. Expansion of membership of MedPAC to 17.

                        TITLE V--REVENUE OFFSET

Sec. 501. Revenue offset.

  TITLE I--MEDICARE HOME HEALTH CARE INTERIM PAYMENT SYSTEM REFINEMENT

     SEC. 101. INCREASE IN PER BENEFICIARY LIMITS AND PER VISIT 
                   PAYMENT LIMITS FOR PAYMENT FOR HOME HEALTH 
                   SERVICES.

       (a) Increase in Per Beneficiary Limits.--Section 
     1861(v)(1)(L) of the Social Security Act (42 U.S.C. 
     1395x(v)(1)(L)) is amended--
       (1) in the first sentence of clause (v), by inserting 
     ``subject to clause (viii)(I),'' before ``the Secretary'';
       (2) in clause (vi)(I), by inserting ``subject to clauses 
     (viii)(II) and (viii)(III)'' after ``fiscal year 1994''; and
       (3) by adding at the end the following new clause:
       ``(viii)(I) In the case of a provider with a 12-month cost 
     reporting period ending in fiscal year 1994, if the limit 
     imposed under clause (v) (determined without regard to this 
     subclause) for a cost reporting period beginning during or 
     after fiscal year 1999 is less than the median described in 
     clause (vi)(I) (but determined as if any reference in clause 
     (v) to `98 percent' were a reference to `100 percent'), the 
     limit otherwise imposed under clause (v) for such provider 
     and period shall be increased by \1/2\ of such difference.
       ``(II) Subject to subclause (IV), for new providers and 
     those providers without a 12-month cost reporting period 
     ending in fiscal year 1994, but for which the first cost 
     reporting period begins before fiscal year 1999, for cost 
     reporting periods beginning during or after fiscal year 1999, 
     the per beneficiary limitation described in clause (vi)(I) 
     shall be equal to 50 percent of the median described in such 
     clause plus 50 percent of the sum of 75 percent of such 
     median and 25 percent of 98 percent of the standardized 
     regional average of such costs for the agency's census 
     division, described in clause (v)(I). However, in no case 
     shall the limitation under this subclause be less than the 
     median described in clause (vi)(I) (determined as if any 
     reference in clause (v) to `98 percent' were a reference to 
     `100 percent').
       ``(III) Subject to subclause (IV), in the case of a new 
     home health agency for which the first cost reporting period 
     begins during or after fiscal year 1999, the limitation 
     applied under clause (vi)(I) (but only with respect to such 
     provider) shall be equal to 75 percent of the median 
     described in clause (vi)(I).
       ``(IV) In the case of a new provider or a provider without 
     a 12-month cost reporting period ending in fiscal year 1994, 
     subclause (II) shall apply, instead of subclause (III), to a 
     home health agency which filed an application for home health 
     agency provider status under this title before September 15, 
     1998, or which was approved as a branch of its parent agency 
     before such date and becomes a subunit of the parent agency 
     or a separate agency on or after such date.
       ``(V) Each of the amounts specified in subclauses (I) 
     through (III) are such amounts as adjusted under clause (iii) 
     to reflect variations in wages among different areas.''.
       (b) Revision of Per Visit Limits.--Section 1861(v)(1)(L)(i) 
     of such Act (42 U.S.C. 1395x(v)(1)(L)(i)) is amended--
       (1) in subclause (III), by striking ``or'';
       (2) in subclause (IV)--
       (A) by inserting ``and before October 1, 1998,'' after 
     ``October 1, 1997,''; and
       (B) by striking the period at the end and inserting ``, 
     or''; and
       (3) by adding at the end the following new subclause:
       ``(V) October 1, 1998, 108 percent of such median.''.
       (c) Exclusion of Additional Part B Costs From Determination 
     of Part B Monthly Premium.--Section 1839 of such Act (42 
     U.S.C. 1395r) is amended--
       (1) in subsection (a)(3), by inserting ``(except as 
     provided in subsection (g))'' after ``year that''; and
       (2) by adding at the end the following new subsection:
       ``(g) In estimating the benefits and administrative costs 
     which will be payable from the Federal Supplementary Medical 
     Insurance Trust Fund for a year for purposes of determining 
     the monthly premium rate under subsection (a)(3), the 
     Secretary shall exclude an estimate of any benefits and 
     administrative costs attributable to the application of 
     section 1861(v)(1)(L)(viii) or to the establishment under 
     section 1861(v)(1)(L)(i)(V) of a per visit limit at 108 
     percent of the median (instead of 105 percent of the median), 
     but only to the extent payment for home health services under 
     this title is not being made under section 1895 (relating to 
     prospective payment for home health services).''.
       (d) Reports on Summary of Research Conducted by the 
     Secretary on the Prospective Payment System.--By not later 
     than January 1, 1999, the Secretary of Health and Human 
     Services shall submit to Congress a report on the following 
     matters:
       (1) Research.--A description of any research paid for by 
     the Secretary on the development of a prospective payment 
     system for home health services furnished under the

[[Page H10078]]

     medicare care program under title XVIII of the Social 
     Security Act, and a summary of the results of such research.
       (2) Schedule for implementation of system.--The Secretary's 
     schedule for the implementation of the prospective payment 
     system for home health services under section 1895 of the 
     Social Security Act (42 U.S.C. 1395fff).
       (3) Alternative to 15 percent reduction in limits.--The 
     Secretary's recommendations for one or more alternative means 
     to provide for savings equivalent to the savings estimated to 
     be made by the mandatory 15 percent reduction in payment 
     limits for such home health services for fiscal year 2000 
     under section 1895(b)(3)(A) of the Social Security Act (42 
     U.S.C. 1395fff(b)(3)(A)), or, in the case the Secretary does 
     not establish and implement such prospective payment system, 
     under section 4603(e) of the Balanced Budget Act of 1997.
       (e) MedPAC Reports.--
       (1) Review of secretary's report.--Not later than 60 days 
     after the date the Secretary of Health and Human Services 
     submits to Congress the report under subsection (d), the 
     Medicare Payment Advisory Commission (established under 
     section 1805 of the Social Security Act (42 U.S.C. 1395b-6)) 
     shall submit to Congress a report describing the Commission's 
     analysis of the Secretary's report, and shall include the 
     Commission's recommendations with respect to the matters 
     contained in such report.
       (2) Annual report.--The Commission shall include in its 
     annual report to Congress for June 1999 an analysis of 
     whether changes in law made by the Balanced Budget Act of 
     1997, as modified by the amendments made by this section, 
     with respect to payments for home health services furnished 
     under the medicare program under title XVIII of the Social 
     Security Act impede access to such services by individuals 
     entitled to benefits under such program.
       (f) GAO Audit of Research Expenditures.--The Comptroller 
     General of the United States shall conduct an audit of sums 
     obligated or expended by the Health Care Financing 
     Administration for the research described in subsection 
     (d)(1), and of the data, reports, proposals, or other 
     information provided by such research.
       (g) Prompt Implementation.--The Secretary of Health and 
     Human Services shall promptly issue (without regard to 
     chapter 8 of title 5, United States Code) such regulations or 
     program memoranda as may be necessary to effect the 
     amendments made by this section for cost reporting periods 
     beginning on or after October 1, 1998. In effecting the 
     amendments made by subsection (a) for cost reporting periods 
     beginning in fiscal year 1999, the ``median'' referred to in 
     section 1861(v)(1)(L)(vi)(I) of the Social Security Act for 
     such periods shall be the national standardized per 
     beneficiary limitation specified in Table 3C published in the 
     Federal Register on August 11, 1998, (63 FR 42926) and the 
     ``standardized regional average of such costs'' referred to 
     in section 1861(v)(1)(L)(v)(I) of such Act for a census 
     division shall be the sum of the labor and nonlabor 
     components of the standardized per-beneficiary limitation for 
     that census division specified in Table 3B published in the 
     Federal Register on that date (63 FR 42926) (or in Table 3D 
     as so published with respect to Puerto Rico and Guam).

             TITLE II--VETERANS MEDICARE ACCESS IMPROVEMENT

     SEC. 201. IMPROVEMENT IN VETERANS' ACCESS TO SERVICES.

       (a) In General.--Title XVIII of the Social Security Act, as 
     amended by sections 4603, 4801, and 4015(a) of the Balanced 
     Budget Act of 1997, is amended by adding at the end the 
     following:


                ``improving veterans' access to services

       ``Sec. 1897. (a) Definitions.--In this section:
       ``(1) Administering secretaries.--The term `administering 
     Secretaries' means the Secretary of Health and Human Services 
     and the Secretary of Veterans Affairs acting jointly.
       ``(2) Program.--The term `program' means the program 
     established under this section with respect to category A 
     medicare-eligible veterans.
       ``(3) Demonstration project; project.--The terms 
     `demonstration project' and `project' mean the demonstration 
     project carried out under this section with respect to 
     category C medicare-eligible veterans.
       ``(4) Medicare-eligible veterans.--
       ``(A) Category a medicare-eligible veteran.--The term 
     `category A medicare-eligible veteran' means an individual--
       ``(i) who is a veteran (as defined in section 101(2) of 
     title 38, United States Code) and is described in paragraph 
     (1) or (2) of section 1710(a) of title 38, United States 
     Code;
       ``(ii) who is entitled to hospital insurance benefits under 
     part A of the medicare program and is enrolled in the 
     supplementary medical insurance program under part B of the 
     medicare program; and
       ``(iii) for whom the medical center of the Department of 
     Veterans Affairs that is closest to the individual's place of 
     residence is geographically remote or inaccessible from such 
     place.
       ``(B) Category c medicare-eligible veteran.--The term 
     `category C medicare-eligible veteran' means an individual 
     who--
       ``(i) is a veteran (as defined in section 101(2) of title 
     38, United States Code) and is described in section 
     1710(a)(3) of title 38, United States Code; and
       ``(ii) is entitled to hospital insurance benefits under 
     part A of the medicare program and is enrolled in the 
     supplementary medical insurance program under part B of the 
     medicare program.
       ``(5) Medicare health care services.--The term `medicare 
     health care services' means items or services covered under 
     part A or B of this title.
       ``(6) Trust funds.--The term `trust funds' means the 
     Federal Hospital Insurance Trust Fund established in section 
     1817 and the Federal Supplementary Medical Insurance Trust 
     Fund established in section 1841.
       ``(b) Program and Demonstration Project.--
       ``(1) In general.--
       ``(A) Establishment.--The administering Secretaries are 
     authorized to establish--
       ``(i) a program (under an agreement entered into by the 
     administering Secretaries) under which the Secretary of 
     Health and Human Services shall reimburse the Secretary of 
     Veterans Affairs, from the trust funds, for medicare health 
     care services furnished to category A medicare-eligible 
     veterans; and
       ``(ii) a demonstration project (under such an agreement) 
     under which the Secretary of Health and Human Services shall 
     reimburse the Secretary of Veterans Affairs, from the trust 
     funds, for medicare health care services furnished to 
     category C medicare-eligible veterans.
       ``(B) Agreement.--The agreement entered into under 
     subparagraph (A) shall include at a minimum--
       ``(i) a description of the benefits to be provided to the 
     participants of the program and the demonstration project 
     established under this section;
       ``(ii) a description of the eligibility rules for 
     participation in the program and demonstration project, 
     including any cost sharing requirements;
       ``(iii) a description of the process for enrolling veterans 
     for participation in the program, which process may, to the 
     extent practicable, be administered in the same or similar 
     manner to the registration process established to implement 
     section 1705 of title 38, United States Code;
       ``(iv) a description of how the program and the 
     demonstration project will satisfy the requirements under 
     this title;
       ``(v) a description of the sites selected under paragraph 
     (2);
       ``(vi) a description of how reimbursement requirements 
     under subsection (g) and maintenance of effort requirements 
     under subsection (h) will be implemented in the program and 
     in the demonstration project;
       ``(vii) a statement that all data of the Department of 
     Veterans Affairs and of the Department of Health and Human 
     Services that the administering Secretaries determine is 
     necessary to conduct independent estimates and audits of the 
     maintenance of effort requirement, the annual reconciliation, 
     and related matters required under the program and the 
     demonstration project shall be available to the administering 
     Secretaries;
       ``(viii) a description of any requirement that the 
     Secretary of Health and Human Services waives pursuant to 
     subsection (d);
       ``(ix) a requirement that the Secretary of Veterans Affairs 
     undertake and maintain outreach and marketing activities, 
     consistent with capacity limits under the program, for 
     category A medicare-eligible veterans;
       ``(x) a description of how the administering Secretaries 
     shall conduct the data matching program under subparagraph 
     (F), including the frequency of updates to the comparisons 
     performed under subparagraph (F)(ii); and
       ``(xi) a statement by the Secretary of Veterans Affairs 
     that the type or amount of health care services furnished 
     under chapter 17 of title 38, United States Code, to veterans 
     who are entitled to benefits under part A or enrolled under 
     part B, or both, shall not be reduced by reason of the 
     program or project.
       ``(C) Cost-sharing under demonstration project.--
     Notwithstanding any provision of title 38, United States 
     Code, in order--
       ``(i) to maintain and broaden access to services,
       ``(ii) to encourage appropriate use of services, and
       ``(iii) to control costs,
     the Secretary of Veterans Affairs may establish enrollment 
     fees and copayment requirements under the demonstration 
     project under this section consistent with subsection (d)(1). 
     Such fees and requirements may vary based on income.
       ``(D) Health care benefits.--The administering Secretaries 
     shall prescribe the minimum health care benefits to be 
     provided under the program and demonstration project to 
     medicare-eligible veterans enrolled in the program or 
     project. Those benefits shall include at least all medicare 
     health care services covered under this title.
       ``(E) Establishment of service networks.--
       ``(i) Use of va outpatient clinics.--The Secretary of 
     Veterans Affairs, to the extent practicable, shall use 
     outpatient clinics of the Department of Veterans Affairs in 
     providing services under the program.
       ``(ii) Authority to contract for services.--The Secretary 
     of Veterans Affairs may enter into contracts and arrangements 
     with entities (such as private practitioners, providers of 
     services, preferred provider organizations, and health care 
     plans) for the provision of services for which the Secretary 
     of Health and Human Services is responsible

[[Page H10079]]

     under the program or project under this section and shall 
     take into account the existence of qualified practitioners 
     and providers in the areas in which the program or project is 
     being conducted. Under such contracts and arrangements, such 
     Secretary of Health and Human Services may require the 
     entities to furnish such information as such Secretary may 
     require to carry out this section.
       ``(F) Data match.--
       ``(i) Establishment of data matching program.--The 
     administering Secretaries shall establish a data matching 
     program under which there is an exchange of information of 
     the Department of Veterans Affairs and of the Department of 
     Health and Human Services as is necessary to identify 
     veterans who are entitled to benefits under part A or 
     enrolled under part B, or both, in order to carry out this 
     section. The provisions of section 552a of title 5, United 
     States Code, shall apply with respect to such matching 
     program only to the extent the administering Secretaries find 
     it feasible and appropriate in carrying out this section in a 
     timely and efficient manner.
       ``(ii) Performance of data match.--The administering 
     Secretaries, using the data matching program established 
     under clause (i), shall perform a comparison in order to 
     identify veterans who are entitled to benefits under part A 
     or enrolled under part B, or both. To the extent such 
     Secretaries deem appropriate to carry out this section, the 
     comparison and identification may distinguish among such 
     veterans by category of veterans, by entitlement to benefits 
     under this title, or by other characteristics.
       ``(iii) Deadline for first data match.--The administering 
     Secretaries shall first perform a comparison under clause 
     (ii) by not later than October 31, 1998.
       ``(iv) Certification by inspector general.--

       ``(I) In general.--The administering Secretaries may not 
     conduct the program unless the Inspector General of the 
     Department of Health and Human Services certifies to Congress 
     that the administering Secretaries have established the data 
     matching program under clause (i) and have performed a 
     comparison under clause (ii).
       ``(II) Deadline for certification.--Not later than December 
     15, 1998, the Inspector General of the Department of Health 
     and Human Services shall submit a report to Congress 
     containing the certification under subclause (I) or the 
     denial of such certification.

       ``(2) Number of sites.--The program and demonstration 
     project shall be conducted in geographic service areas of the 
     Department of Veterans Affairs, designated jointly by the 
     administering Secretaries after review of all such areas, as 
     follows:
       ``(A) Program sites.--
       ``(i) In general.--Except as provided in clause (ii), the 
     program shall be conducted in not more than 3 such areas with 
     respect to category A medicare-eligible veterans.
       ``(ii) Additional program sites.--Subject to the 
     certification required under subsection (h)(1)(B)(iii), for a 
     year beginning on or after January 1, 2003, the program shall 
     be conducted in such areas as are designated jointly by the 
     administering Secretaries after review of all such areas.
       ``(B) Project sites.--
       ``(i) In general.--The demonstration project shall be 
     conducted in not more than 3 such areas with respect to 
     category C medicare-eligible veterans.
       ``(ii) Mandatory site.--At least one of the areas 
     designated under clause (i) shall encompass the catchment 
     area of a military medical facility which was closed pursuant 
     to either the Defense Base Closure and Realignment Act of 
     1990 (part A of title XXIX of Public Law 101-510; 10 U.S.C. 
     2687 note) or title II of the Defense Authorization 
     Amendments and Base Closure and Realignment Act (Public Law 
     100-526; 10 U.S.C. 2687 note).
       ``(3) Restriction.--Funds from the program or demonstration 
     project shall not be used for--
       ``(A) the construction of any treatment facility of the 
     Department of Veterans Affairs; or
       ``(B) the renovation, expansion, or other construction at 
     such a facility.
       ``(4) Duration.--The administering Secretaries shall 
     conduct and implement the program and the demonstration 
     project as follows:
       ``(A) Program.--
       ``(i) In general.--The program shall begin on January 1, 
     2000, in the sites designated under paragraph (2)(A)(i) and, 
     subject to subsection (h)(1)(B)(iii)(II), for a year 
     beginning on or after January 1, 2003, the program may be 
     conducted in such additional sites designated under paragraph 
     (2)(A)(ii).
       ``(ii) Limitation on number of veterans covered under 
     certain circumstances.--If for a year beginning on or after 
     January 1, 2003, the program is conducted only in the sites 
     designated under paragraph (2)(A)(i), medicare health care 
     services may not be provided under the program to a number of 
     category-A medicare-eligible veterans that exceeds the 
     aggregate number of such veterans covered under the program 
     as of December 31, 2002.
       ``(B) Project.--The demonstration project shall begin on 
     January 1, 1999, and end on December 31, 2001.
       ``(C) Implementation.--The administering Secretaries may 
     implement the program and demonstration project through the 
     publication of regulations that take effect on an interim 
     basis, after notice and pending opportunity for public 
     comment.
       ``(5) Reports.--
       ``(A) Program.--By not later than September 1, 1999, the 
     administering Secretaries shall submit a copy of the 
     agreement entered into under paragraph (1) with respect to 
     the program to Congress.
       ``(B) Project.--By not later than November 1, 1998, the 
     administering Secretaries shall submit a copy of the 
     agreement entered into under paragraph (1) with respect to 
     the project to Congress.
       ``(6) Report on maintenance of level of health care 
     services.--
       ``(A) In general.--The Secretary of Veterans Affairs may 
     not implement the program at a site designated under 
     paragraph (2)(A) unless, by not later than 90 days before the 
     date of the implementation, the Secretary of Veterans Affairs 
     submits to Congress and to the Comptroller General of the 
     United States a report that contains the information 
     described in subparagraph (B). The Secretary of Veterans 
     Affairs shall periodically update the report under this 
     paragraph as appropriate.
       ``(B) Information described.--For purposes of subparagraph 
     (A), the information described in this subparagraph is a 
     description of the operation of the program at the site and 
     of the steps to be taken by the Secretary of Veterans Affairs 
     to prevent the reduction of the type or amount of health care 
     services furnished under chapter 17 of title 38, United 
     States Code, to veterans who are entitled to benefits under 
     part A or enrolled under part B, or both, within the 
     geographic service area of the Department of Veterans Affairs 
     in which the site is located by reason of the program or 
     project.
       ``(c) Crediting of Payments.--A payment received by the 
     Secretary of Veterans Affairs under the program or 
     demonstration project shall be credited to the applicable 
     Department of Veterans Affairs medical care appropriation 
     (and within that appropriation). Any such payment received 
     during a fiscal year for services provided during a prior 
     fiscal year may be obligated by the Secretary of Veterans 
     Affairs during the fiscal year during which the payment is 
     received.
       ``(d) Application of Certain Medicare Requirements.--
       ``(1) Authority.--
       ``(A) In general.--Except as provided under subparagraph 
     (B), the program and the demonstration project shall meet all 
     requirements of Medicare+Choice plans under part C and 
     regulations pertaining thereto, and other requirements for 
     receiving medicare payments, except that the prohibition of 
     payments to Federal providers of services under sections 
     1814(c) and 1835(d), and paragraphs (2) and (3) of section 
     1862(a) shall not apply.
       ``(B) Waiver.--Except as provided in paragraph (2), the 
     Secretary of Health and Human Services is authorized to waive 
     any requirement described under subparagraph (A), or approve 
     equivalent or alternative ways of meeting such a requirement, 
     but only if such waiver or approval--
       ``(i) reflects the unique status of the Department of 
     Veterans Affairs as an agency of the Federal Government; and
       ``(ii) is necessary to carry out the program or 
     demonstration project.
       ``(2) Beneficiary protections and other matters.--The 
     program and the demonstration project shall comply with the 
     requirements of part C of this title that relate to 
     beneficiary protections and other matters, including such 
     requirements relating to the following areas, to the extent 
     not inconsistent with subsection (b)(1)(B)(iii):
       ``(A) Enrollment and disenrollment.
       ``(B) Nondiscrimination.
       ``(C) Information provided to beneficiaries.
       ``(D) Cost-sharing limitations.
       ``(E) Appeal and grievance procedures.
       ``(F) Provider participation.
       ``(G) Access to services.
       ``(H) Quality assurance and external review.
       ``(I) Advance directives.
       ``(J) Other areas of beneficiary protections that the 
     administering Secretaries determine are applicable to such 
     program or project.
       ``(e) Inspector General.--Nothing in the agreement entered 
     into under subsection (b) shall limit the Inspector General 
     of the Department of Health and Human Services from 
     investigating any matters regarding the expenditure of funds 
     under this title for the program and demonstration project, 
     including compliance with the provisions of this title and 
     all other relevant laws.
       ``(f) Voluntary Participation.--Participation of a category 
     A medicare-eligible veteran in the program or category C 
     medicare-eligible veteran in the demonstration project shall 
     be voluntary.
       ``(g) Payments Based on Regular Medicare Payment Rates.--
       ``(1) In general.--Subject to the succeeding provisions of 
     this subsection, the Secretary of Health and Human Services 
     shall reimburse the Secretary of Veterans Affairs for 
     services provided under the program or demonstration project 
     at a rate equal to 95 percent of the amount paid to a 
     Medicare+Choice organization under part C of this title with 
     respect to such an enrollee. In cases in which a payment 
     amount may not otherwise be readily computed, the Secretary 
     of Health and Human Services shall establish rules for 
     computing equivalent or comparable payment amounts.
       ``(2) Exclusion of certain amounts.--In computing the 
     amount of payment under paragraph (1), the following shall be 
     excluded:

[[Page H10080]]

       ``(A) Special payments.--Any amount attributable to an 
     adjustment under subparagraphs (B) and (F) of section 
     1886(d)(5) and subsection (h) of such section.
       ``(B) Percentage of capital payments.--An amount determined 
     by the administering Secretaries for amounts attributable to 
     payments for capital-related costs under subsection (g) of 
     such section.
       ``(3) Periodic payments from medicare trust funds.--
     Payments under this subsection shall be made--
       ``(A) on a periodic basis consistent with the periodicity 
     of payments under this title; and
       ``(B) in appropriate part, as determined by the Secretary 
     of Health and Human Services, from the trust funds.
       ``(4) Cap on reimbursement amounts.--The aggregate amount 
     to be reimbursed under this subsection pursuant to the 
     agreement entered into between the administering Secretaries 
     under subsection (b) is as follows:
       ``(A) Program.--With respect to category A medicare-
     eligible veterans, such aggregate amount shall not exceed--
       ``(i) for 2000, a total of $50,000,000;
       ``(ii) for 2001, a total of $75,000,000; and
       ``(iii) subject to subparagraph (B), for 2002 and each 
     succeeding year, a total of $100,000,000.
       ``(B) Expansion of program.--If for a year beginning on or 
     after January 1, 2003, the program is conducted in sites 
     designated under subsection (b)(2)(A)(ii), the limitation 
     under subparagraph (A)(iii) shall not apply to the program 
     for such a year.
       ``(C) Project.--With respect to category C medicare-
     eligible veterans, such aggregate amount shall not exceed a 
     total of $50,000,000 for each of calendar years 1999 through 
     2001.
       ``(h) Maintenance of Effort.--
       ``(1) Monitoring effect of program and demonstration 
     project on costs to medicare program.--
       ``(A) In general.--The administering Secretaries, in 
     consultation with the Comptroller General of the United 
     States, shall closely monitor the expenditures made under 
     this title for category A and C medicare-eligible veterans 
     compared to the expenditures that would have been made for 
     such veterans if the program and demonstration project had 
     not been conducted. The agreement entered into by the 
     administering Secretaries under subsection (b) shall require 
     the Department of Veterans Affairs to maintain overall the 
     level of effort for services covered under this title to such 
     categories of veterans by reference to a base year as 
     determined by the administering Secretaries.
       ``(B) Determination of measure of costs of medicare health 
     care services.--
       ``(i) Improvement of information management system.--Not 
     later than October 1, 2001, the Secretary of Veterans Affairs 
     shall improve its information management system such that, 
     for a year beginning on or after January 1, 2002, the 
     Secretary of Veterans Affairs is able to identify costs 
     incurred by the Department of Veterans Affairs in providing 
     medicare health care services to medicare-eligible veterans 
     for purposes of meeting the requirements with respect to 
     maintenance of effort under an agreement under subsection 
     (b)(1)(A).
       ``(ii) Identification of medicare health care services.--
     The Secretary of Health and Human Services shall provide such 
     assistance as is necessary for the Secretary of Veterans 
     Affairs to determine which health care services furnished by 
     the Secretary of Veterans Affairs qualify as medicare health 
     care services.
       ``(iii) Certification by hhs inspector general.--

       ``(I) Request for certification.--The Secretary of Veterans 
     Affairs may request the Inspector General of the Department 
     of Health and Human Services to make a certification to 
     Congress that the Secretary of Veterans Affairs has improved 
     its management system under clause (i) such that the 
     Secretary of Veterans Affairs is able to identify the costs 
     described in such clause in a reasonably reliable and 
     accurate manner.
       ``(II) Requirement for expansion of program.--The program 
     may be conducted in the additional sites under paragraph 
     (2)(A)(ii) and cover such additional category A medicare 
     eligible veterans in such additional sites only if the 
     Inspector General of the Department of Health and Human 
     Services has made the certification described in subclause 
     (I).
       ``(III) Deadline for certification.--Not later than the 
     date that is the earlier of the date that is 60 days after 
     the Secretary of Veterans Affairs requests a certification 
     under subclause (I) or June 1, 2002, the Inspector General of 
     the Department of Health and Human Services shall submit a 
     report to Congress containing the certification under 
     subclause (I) or the denial of such certification.

       ``(C) Maintenance of level of effort.--
       ``(i) Report by secretary of veterans affairs on basis for 
     calculation.--Not later than the date that is 60 days after 
     the date on which the administering Secretaries enter into an 
     agreement under subsection (b)(1)(A), the Secretary of 
     Veterans Affairs shall submit a report to Congress and the 
     Comptroller General of the United States explaining the 
     methodology used and basis for calculating the level of 
     effort of the Department of Veterans Affairs under the 
     program and project.
       ``(ii) Report by comptroller general.--Not later than the 
     date that is 180 days after the date described in clause (i), 
     the Comptroller General of the United States shall submit to 
     Congress and the administering Secretaries a report setting 
     forth the Comptroller General's findings, conclusion, and 
     recommendations with respect to the report submitted by the 
     Secretary of Veterans Affairs under clause (i).
       ``(iii) Response by secretary of veterans affairs.--The 
     Secretary of Veterans Affairs shall submit to Congress not 
     later than 60 days after the date described in clause (ii) a 
     report setting forth such Secretary's response to the report 
     submitted by the Comptroller General under clause (ii).
       ``(D) Annual report by the comptroller general.--Not later 
     than December 31 of each year during which the program and 
     demonstration project is conducted, the Comptroller General 
     of the United States shall submit to the administering 
     Secretaries and to Congress a report on the extent, if any, 
     to which the costs of the Secretary of Health and Human 
     Services under the medicare program under this title 
     increased during the preceding fiscal year as a result of the 
     program or demonstration project.
       ``(2) Required response in case of increase in costs.--
       ``(A) In general.--If the administering Secretaries find, 
     based on paragraph (1), that the expenditures under the 
     medicare program under this title increased (or are expected 
     to increase) during a fiscal year because of the program or 
     demonstration project, the administering Secretaries shall 
     take such steps as may be needed--
       ``(i) to recoup for the medicare program the amount of such 
     increase in expenditures; and
       ``(ii) to prevent any such increase in the future.
       ``(B) Steps.--Such steps--
       ``(i) under subparagraph (A)(i) shall include payment of 
     the amount of such increased expenditures by the Secretary of 
     Veterans Affairs from the current medical care appropriation 
     for the Department of Veterans Affairs to the trust funds; 
     and
       ``(ii) under subparagraph (A)(ii) shall include lowering 
     the amount of payment under the program or project under 
     subsection (g)(1), and may include, in the case of the 
     demonstration project, suspending or terminating the project 
     (in whole or in part).
       ``(i) Evaluation and Reports.--
       ``(1) Independent evaluation by gao.--
       ``(A) In general.--The Comptroller General of the United 
     States shall conduct an evaluation of the program and an 
     evaluation of the demonstration project, and shall submit 
     annual reports on the program and demonstration project to 
     the administering Secretaries and to Congress.
       ``(B) First report.--The first report for the program or 
     demonstration project under subparagraph (A) shall be 
     submitted not later than 12 months after the date on which 
     the Secretary of Veterans Affairs first provides services 
     under the program or project, respectively.
       ``(C) Final report on demonstration project.--A final 
     report shall be submitted with respect to the demonstration 
     project not later than 3\1/2\ years after the date of the 
     first report on the project under subparagraph (B).
       ``(D) Contents.--The evaluation and reports under this 
     paragraph for the program or demonstration project shall 
     include an assessment, based on the agreement entered into 
     under subsection (b), of the following:
       ``(i) Any savings or costs to the medicare program under 
     this title resulting from the program or project.
       ``(ii) The cost to the Department of Veterans Affairs of 
     providing care to category A medicare-eligible veterans under 
     the program or to category C medicare-eligible veterans under 
     the demonstration project, respectively.
       ``(iii) An analysis of how such program or project affects 
     the overall accessibility of medical care through the 
     Department of Veterans Affairs, and a description of the 
     unintended effects (if any) upon the patient enrollment 
     system under section 1705 of title 38, United States Code.
       ``(iv) Compliance by the Department of Veterans Affairs 
     with the requirements under this title.
       ``(v) The number of category A medicare-eligible veterans 
     or category C medicare-eligible veterans, respectively, 
     opting to participate in the program or project instead of 
     receiving health benefits through another health insurance 
     plan (including benefits under this title).
       ``(vi) A list of the health insurance plans and programs 
     that were the primary payers for medicare-eligible veterans 
     during the year prior to their participation in the program 
     or project, respectively, and the distribution of their 
     previous enrollment in such plans and programs.
       ``(vii) Any impact of the program or project, respectively, 
     on private health care providers and beneficiaries under this 
     title that are not enrolled in the program or project.
       ``(viii) An assessment of the access to care and quality of 
     care for medicare-eligible veterans under the program or 
     project, respectively.
       ``(ix) An analysis of whether, and in what manner, easier 
     access to medical centers of the Department of Veterans 
     Affairs affects the number of category A medicare-eligible 
     veterans or C medicare-eligible veterans, respectively, 
     receiving medicare health care services.
       ``(x) Any impact of the program or project, respectively, 
     on the access to care for category A medicare-eligible 
     veterans or C medicare-eligible veterans, respectively, who

[[Page H10081]]

     did not enroll in the program or project and for other 
     individuals entitled to benefits under this title.
       ``(xi) A description of the difficulties (if any) 
     experienced by the Department of Veterans Affairs in managing 
     the program or project, respectively.
       ``(xii) Any additional elements specified in the agreement 
     entered into under subsection (b).
       ``(xiii) Any additional elements that the Comptroller 
     General of the United States determines is appropriate to 
     assess regarding the program or project, respectively.
       ``(2) Reports by secretaries on program and demonstration 
     project with respect to medicare-eligible veterans.--
       ``(A) Demonstration project.--Not later than 6 months after 
     the date of the submission of the final report by the 
     Comptroller General of the United States on the demonstration 
     project under paragraph (1)(C), the administering Secretaries 
     shall submit to Congress a report containing their 
     recommendation as to--
       ``(i) whether there is a cost to the health care program 
     under this title in conducting the demonstration project;
       ``(ii) whether to extend the demonstration project or make 
     the project permanent; and
       ``(iii) whether the terms and conditions of the project 
     should otherwise be continued (or modified) with respect to 
     medicare-eligible veterans.
       ``(B) Program.--Not later than 6 months after the date of 
     the submission of the report by the Comptroller General of 
     the United States on the third year of the operation of the 
     program, the administering Secretaries shall submit to 
     Congress a report containing their recommendation as to--
       ``(i) whether there is a cost to the health care program 
     under this title in conducting the program under this 
     section;
       ``(ii) whether to discontinue the program with respect to 
     category A medicare-eligible veterans; and
       ``(iii) whether the terms and conditions of the program 
     should otherwise be continued (or modified) with respect to 
     medicare-eligible veterans.
       ``(j) Application of Medigap Protections to Demonstration 
     Project Enrollees.--(1) Subject to paragraph (2), the 
     provisions of section 1882(s)(3) (other than clauses (i) 
     through (iv) of subparagraph (B)) and 1882(s)(4) shall apply 
     to enrollment (and termination of enrollment) in the 
     demonstration project, in the same manner as they apply to 
     enrollment (and termination of enrollment) with a 
     Medicare+Choice organization in a Medicare+Choice plan.
       ``(2) In applying paragraph (1)--
       ``(A) any reference in clause (v) or (vi) of section 
     1882(s)(3)(B) to 12 months is deemed a reference to 36 
     months; and
       ``(B) the notification required under section 1882(s)(3)(D) 
     shall be provided in a manner specified by the Secretary of 
     Veterans Affairs.''.
       (b) Repeal of Plan Requirement.--Subsection (b) of section 
     4015 of the Balanced Budget Act of 1997 (relating to an 
     implementation plan for Veterans subvention) is repealed.
       (c) Report to Congress on a Method to Include the Costs of 
     Veterans Affairs and Military Facility Services to Medicare-
     eligible Beneficiaries in the Calculation of Medicare+Choice 
     Payment Rates.--The Secretary of Health and Human Services 
     shall report to the Congress by not later than January 1, 
     2001, on a method to phase-in the costs of military facility 
     services furnished by the Department of Veterans Affairs or 
     the Department of Defense to medicare-eligible beneficiaries 
     in the calculation of an area's Medicare+Choice capitation 
     payment. Such report shall include on a county-by- county 
     basis--
       (1) the actual or estimated cost of such services to 
     medicare-eligible beneficiaries;
       (2) the change in Medicare+Choice capitation payment rates 
     if such costs are included in the calculation of payment 
     rates;
       (3) one or more proposals for the implementation of payment 
     adjustments to Medicare+Choice plans in counties where the 
     payment rate has been affected due to the failure to 
     calculate the cost of such services to medicare-eligible 
     beneficiaries; and
       (4) a system to ensure that when a Medicare+Choice enrollee 
     receives covered services through a facility of the 
     Department of Veterans Affairs or the Department of Defense 
     there is an appropriate payment recovery to the medicare 
     program.

  TITLE III--AUTHORIZATION OF ADDITIONAL EXCEPTIONS TO IMPOSITION OF 
                   PENALTIES FOR CERTAIN INDUCEMENTS

     SEC. 301. AUTHORIZATION OF ADDITIONAL EXCEPTIONS TO 
                   IMPOSITION OF PENALTIES FOR PROVIDING 
                   INDUCEMENTS TO BENEFICIARIES.

       (a) In General.--Subparagraph (B) of section 1128A(i)(6) of 
     the Social Security Act (42 U.S.C. 1320a-7a(i)(6)) is amended 
     to read as follows:
       ``(B) any permissible practice described in any 
     subparagraph of section 1128B(b)(3) or in regulations issued 
     by the Secretary;''.
       (b) Extension of Advisory Opinion Authority.--Section 
     1128D(b)(2)(A) of such Act (42 U.S.C. 1320a-7d(b)(2)(A)) is 
     amended by inserting ``or section 1128A(i)(6)'' after 
     ``1128B(b)''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.
       (d) Interim Final Rulemaking Authority.--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, in order to implement the 
     amendments made by this section in a timely manner.

  TITLE IV--EXPANSION OF MEMBERSHIP OF THE MEDICARE PAYMENT ADVISORY 
                               COMMISSION

     SEC. 401. EXPANSION OF MEMBERSHIP OF MEDPAC TO 17.

       (a) In General.--Section 1805(c)(1) of the Social Security 
     Act (42 U.S.C. 1395b-6(c)(1)), as added by section 4022 of 
     the Balanced Budget Act of 1997, is amended by striking 
     ``15'' and inserting ``17''.
       (b) Initial Terms of Additional Members.--
       (1) In general.--For purposes of staggering the initial 
     terms of members of the Medicare Payment Advisory Commission 
     (under section 1805(c)(3) of such Act (42 U.S.C. 1395b-
     6(c)(3)), the initial terms of the two additional members of 
     the Commission provided for by the amendment under subsection 
     (a) are as follows:
       (A) One member shall be appointed for one year.
       (B) One member shall be appointed for two years.
       (2) Commencement of terms.--Such terms shall begin on May 
     1, 1999.

                        TITLE V--REVENUE OFFSET

     SEC. 501. REVENUE OFFSET.

       (a) In General.--Subparagraph (B) of section 408A(c)(3) of 
     the Internal Revenue Code of 1986 is amended by striking 
     ``relates'' and all that follows and inserting ``relates, the 
     taxpayer's adjusted gross income exceeds $145,000 ($290,000 
     in the case of a joint return).''
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to distributions after December 31, 1998.