[Congressional Record Volume 145, Number 155 (Friday, November 5, 1999)]
[House]
[Pages H11596-H11628]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  MEDICARE, MEDICAID, AND SCHIP BALANCED BUDGET REFINEMENT ACT OF 1999

  Mr. ARCHER. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 3075) to amend title XVIII of the Social Security Act to 
make corrections and refinements in the Medicare Program, as revised by 
the Balanced Budget Act of 1997, as amended.
  The Clerk read as follows:

                               H.R. 3075

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

     SECTION 1. SHORT TITLE; AMENDMENTS TO SOCIAL SECURITY ACT; 
                   REFERENCES TO BBA; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Medicare, 
     Medicaid, and SCHIP Balanced Budget Refinement Act of 1999''.
       (b) 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.

[[Page H11597]]

       (c) References to Balanced Budget Act of 1997.--In this 
     Act, the term ``BBA'' means the Balanced Budget Act of 1997 
     (Public Law 105-33).
       (d) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; amendments to Social Security Act; references to 
              BBA; table of contents.

                 TITLE I--PROVISIONS RELATING TO PART A

                       Subtitle A--PPS Hospitals

Sec. 101. One-year delay in transition for indirect medical education 
              (IME) percentage adjustment.
Sec. 102. Decrease in reductions for disproportionate share hospitals; 
              data collection requirements.

                    Subtitle B--PPS Exempt Hospitals

Sec. 111. Wage adjustment of percentile cap for PPS-exempt hospitals.
Sec. 112. Enhanced payments for long-term care and psychiatric 
              hospitals until development of prospective payment 
              systems for those hospitals.
Sec. 113. Per discharge prospective payment system for long-term care 
              hospitals.
Sec. 114. Per diem prospective payment system for psychiatric 
              hospitals.
Sec. 115. Refinement of prospective payment system for inpatient 
              rehabilitation services.

 Subtitle C--Adjustments to PPS Payments for Skilled Nursing Facilities

Sec. 121. Temporary increase in payment for certain high cost patients.
Sec. 122. Market basket increase.
Sec. 123. Authorizing facilities to elect immediate transition to 
              Federal rate.
Sec. 124. Part A pass-through payment for certain ambulance services, 
              prostheses, and chemotherapy drugs.
Sec. 125. Provision for part B add-ons for facilities participating in 
              the NHCMQ demonstration project.
Sec. 126. Special consideration for facilities serving specialized 
              patient populations.
Sec. 127. MedPAC study on special payment for facilities located in 
              Hawaii and Alaska.

                           Subtitle D--Other

Sec. 131. Part A BBA technical corrections.

                TITLE II--PROVISIONS RELATING TO PART B

          Subtitle A--Adjustments to Physician Payment Updates

Sec. 201. Modification of update adjustment factor provisions to reduce 
              update oscillations and require estimate revisions.
Sec. 202. Use of data collected by organizations and entities in 
              determining practice expense relative values.
Sec. 203. GAO study on resources required to provide safe and effective 
              outpatient cancer therapy.

                Subtitle B--Hospital Outpatient Services

Sec. 211. Outlier adjustment and transitional pass-through for certain 
              medical devices, drugs, and biologicals.
Sec. 212. Establishing a transitional corridor for application of OPD 
              PPS.
Sec. 213. Delay in application of prospective payment system to cancer 
              center hospitals.
Sec. 214. Limitation on outpatient hospital copayment for a procedure 
              to the hospital deductible amount.

                           Subtitle C--Other

Sec. 221. Application of separate caps to physical and speech therapy 
              services.
Sec. 222. Transitional outlier payments for therapy services for 
              certain high acuity patients.
Sec. 223. Update in renal dialysis composite rate.
Sec. 224. Temporary update in durable medical equipment and oxygen 
              rates.
Sec. 225. Requirement for new proposed rulemaking for implementation of 
              inherent reasonableness policy.
Sec. 226. Increase in reimbursement for pap smears.
Sec. 227. Refinement of ambulance services demonstration project.
Sec. 228. Phase-in of PPS for ambulatory surgical centers.
Sec. 229. Extension of medicare benefits for immunosuppressive drugs.
Sec. 230. Additional studies.

            TITLE III--PROVISIONS RELATING TO PARTS A AND B

                    Subtitle A--Home Health Services

Sec. 301. Adjustment to reflect administrative costs not included in 
              the interim payment system.
Sec. 302. Delay in application of 15 percent reduction in payment rates 
              for home health services until 1 year after 
              implementation of prospective payment system.
Sec. 303. Clarification of surety bond requirements.
Sec. 304. Technical amendment clarifying applicable market basket 
              increase for PPS.

             Subtitle B--Direct Graduate Medical Education

Sec. 311. Use of national average payment methodology in computing 
              direct graduate medical education (DGME) payments.
Sec. 312. Initial residency period for child neurology residency 
              training programs.

                           Subtitle C--Other

Sec. 321. GAO study on geographic reclassification.
Sec. 322. MedPAC study on medicare payment for non-physician health 
              professional clinical training in hospitals.

                  TITLE IV--RURAL PROVIDER PROVISIONS

Sec. 401. Permitting reclassification of certain urban hospitals as 
              rural hospitals.
Sec. 402. Update of standards applied for geographic reclassification 
              for certain hospitals.
Sec. 403. Improvements in the critical access hospital (CAH) program.
Sec. 404. 5-year extension of medicare dependent hospital (MDH) 
              program.
Sec. 405. Rebasing for certain sole community hospitals.
Sec. 406. Increased flexibility in providing graduate physician 
              training in rural areas.
Sec. 407. Elimination of certain restrictions with respect to hospital 
              swing bed program.
Sec. 408. Grant program for rural hospital transition to prospective 
              payment.
Sec. 409. MedPAC study of rural providers.
Sec. 410. Expansion of access to paramedic intercept services in rural 
              areas.

    TITLE V--PROVISIONS RELATING TO PART C (MEDICARE+CHOICE PROGRAM)

                      Subtitle A--Medicare+Choice

Sec. 501. Phase-in of new risk adjustment methodology.
Sec. 502. Encouraging offering of Medicare+Choice plans in areas 
              without plans.
Sec. 503. Modification of 5-year re-entry rule for contract 
              terminations.
Sec. 504. Continued computation and publication of AAPCC data.
Sec. 505. Changes in Medicare+Choice enrollment rules.
Sec. 506. Allowing variation in premium waivers within a service area 
              if Medicare+Choice payment rates vary within the area.
Sec. 507. Delay in deadline for submission of adjusted community rates 
              and related information.
Sec. 508. 2 year extension of medicare cost contracts.
Sec. 509. Medicare+Choice nursing and allied health professional 
              education payments.
Sec. 510. Reduction in adjustment in national per capita 
              Medicare+Choice growth percentage for 2002.
Sec. 511. Deeming of Medicare+Choice organization to meet requirements.
Sec. 512. Miscellaneous changes and studies.
Sec. 513. MedPAC report on medicare MSA (medical savings account) 
              plans.
Sec. 514. Clarification of nonapplicability of certain provisions of 
              discharge planning process to Medicare+Choice plans.

            Subtitle B--Managed Care Demonstration Projects

Sec. 521. Extension of social health maintenance organization 
              demonstration (SHMO) project authority.
Sec. 522. Extension of medicare community nursing organization 
              demonstration project.
Sec. 523. Medicare+Choice competitive bidding demonstration project.
Sec. 524. Extension of medicare municipal health services demonstration 
              projects.
Sec. 525. Medicare coordinated care demonstration project.

                           TITLE VI--MEDICAID

Sec. 601. Making medicaid DSH transition rule permanent.
Sec. 602. Increase in DSH allotment for certain States and the District 
              of Columbia.
Sec. 603. New prospective payment system for Federally-qualified health 
              centers and rural health clinics.
Sec. 604. Parity in reimbursement for certain utilization and quality 
              control services.

      TITLE VII--STATE CHILDREN'S HEALTH INSURANCE PROGRAM (SCHIP)

Sec. 701. Stabilizing the SCHIP allotment formula.
Sec. 702. Increased allotments for territories under the State 
              children's health insurance program.
                 TITLE I--PROVISIONS RELATING TO PART A
                       Subtitle A--PPS Hospitals

     SEC. 101. ONE-YEAR DELAY IN TRANSITION FOR INDIRECT MEDICAL 
                   EDUCATION (IME) PERCENTAGE ADJUSTMENT.

       (a) In General.--Section 1886(d)(5)(B)(ii) (42 U.S.C. 
     1395ww(d)(5)(B)(ii)), as amended by section 4621(a)(1) of 
     BBA, is amended--
       (1) in subclause (IV), by inserting ``and 2001'' after 
     ``2000''; and

[[Page H11598]]

       (2) by striking ``2000'' in subclause (V) and inserting 
     ``2001''.
       (b) Conforming Amendment Relating to Determination of 
     Standardized Amount.--Section 1886(d)(2)(C)(i) (42 U.S.C. 
     1395ww(d)(2)(C)(i)), as amended by section 4621(a)(2) of BBA, 
     is amended by inserting ``or any additional payments under 
     such paragraph resulting from the amendment made by section 
     101(a) of Medicare, Medicaid, and SCHIP Balanced Budget 
     Refinement Act of 1999'' after ``Balanced Budget Act of 
     1997''.

     SEC. 102. DECREASE IN REDUCTIONS FOR DISPROPORTIONATE SHARE 
                   HOSPITALS; DATA COLLECTION REQUIREMENTS.

       (a) In General.--Section 1886(d)(5)(F)(ix) (42 U.S.C. 
     1395ww(d)(5)(F)(ix)), as added by section 4403(a) of BBA, is 
     amended--
       (1) in subclause (III), by striking ``during fiscal year 
     2000'' and inserting ``during each of fiscal years 2000 and 
     2001'';
       (2) by striking subclause (IV);
       (3) by redesignating subclauses (V) and (VI) and subclauses 
     (IV) and (V), respectively; and
       (4) in subclause (IV), as so redesignated, by striking 
     ``reduced by 5 percent'' and inserting ``reduced by 4 
     percent''.
       (b) Data Collection.--
       (1) In general.--The Secretary of Health and Human Services 
     shall require any subsection (d) hospital (as defined in 
     section 1886(d)(1)(B) of the Social Security Act (42 U.S.C. 
     1395ww(d)(1)(B)) to submit to the Secretary, in the cost 
     reports submitted to the Secretary by such hospital for 
     discharges occurring during a fiscal year, data on the costs 
     incurred by the hospital for providing inpatient and 
     outpatient hospital services for which the hospital is not 
     compensated, including non-medicare bad debt, charity care, 
     and charges for medicaid an indigent care.
       (2) Effective date.--The Secretary shall require the 
     submission of the data described in paragraph (1) in cost 
     reports for cost reporting periods beginning on or after the 
     date of the enactment of this Act.
                    Subtitle B--PPS-Exempt Hospitals

     SEC. 111. WAGE ADJUSTMENT OF PERCENTILE CAP FOR PPS-EXEMPT 
                   HOSPITALS.

       (a) In General.--Section 1886(b)(3)(H) (42 U.S.C. 
     1395ww(b)(3)(H)), as amended by section 4414 of BBA, is 
     amended--
       (1) in clause (i), by inserting ``, as adjusted under 
     clause (iii)'' before the period,
       (2) in clause (ii), by striking ``clause (i)'' and ``such 
     clause'' and inserting ``subclause (I)'' and ``such 
     subclause'' respectively,
       (3) by striking ``(H)(i)'' and inserting ``(ii)(I)'',
       (4) by redesignating clauses (ii) and (iii) as subclauses 
     (II) and (III),
       (5) by inserting after clause (ii), as so redesignated, the 
     following new clause:
       ``(iii) In applying clause (ii)(I) 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
       (6) by inserting before clause (ii), as so redesignated, 
     the following new clause:
       ``(H)(i) In the case of a hospital or unit that is within a 
     class of hospital described in clause (iv), for a cost 
     reporting period beginning during fiscal years 1998 through 
     2002, the target amount for such a hospital or unit may not 
     exceed the amount as updated up to or for such cost reporting 
     period under clause (ii).''.
       (b) Effective Date.--The amendments made by subsection (a) 
     apply to cost reporting periods beginning on or after October 
     1, 1999.

     SEC. 112. ENHANCED PAYMENTS FOR LONG-TERM CARE AND 
                   PSYCHIATRIC HOSPITALS UNTIL DEVELOPMENT OF 
                   PROSPECTIVE PAYMENT SYSTEMS FOR THOSE 
                   HOSPITALS.

       Section 1886(b)(2) (42 U.S.C. 1395ww(b)(2)), as added by 
     section 4415(b) of BBA, is amended--
       (1) in subparagraph (A), by striking ``In addition to'' and 
     inserting ``Except as provided in subparagraph (E), in 
     addition to''; and
       (2) by adding at the end the following new subparagraph:
       ``(E)(i) In the case of an eligible hospital that is a 
     hospital or unit that is within a class of hospital described 
     in clause (ii) with a 12-month cost reporting period 
     beginning before the enactment of this subparagraph, in 
     determining the amount of the increase under subparagraph 
     (A), the Secretary shall substitute for the percentage of the 
     target amount applicable under subparagraph (A)(ii)--
       ``(I) for a cost reporting period beginning on or after 
     October 1, 2000, and before September 30, 2001, 1.5 percent; 
     and
       ``(II) for a cost reporting period beginning on or after 
     October 1, 2001, and before September 30, 2002, 2 percent.
       ``(ii) For purposes of clause (i), 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 (iv) of such 
     subsection.''.

     SEC. 113. PER DISCHARGE PROSPECTIVE PAYMENT SYSTEM FOR LONG-
                   TERM CARE HOSPITALS.

       (a) Development of System.--
       (1) In general.--The Secretary of Health and Human Services 
     shall develop a per discharge prospective payment system for 
     payment for inpatient hospital services of long-term care 
     hospitals described in section 1886(d)(1)(B)(iv) of the 
     Social Security Act (42 U.S.C. 1395ww(d)(1)(B)(iv)) under the 
     medicare program. Such system shall include an adequate 
     patient classification system that is based on diagnosis-
     related groups (DRGs) and that reflects the differences in 
     patient resource use and costs, and shall maintain budget 
     neutrality.
       (2) Collection of data and evaluation.--In developing the 
     system described in paragraph (1), the Secretary may require 
     such long-term care hospitals to submit such information to 
     the Secretary as the Secretary may require to develop the 
     system.
       (b) Report.--Not later than October 1, 2001, the Secretary 
     shall submit to the appropriate committees of Congress a 
     report that includes a description of the system developed 
     under subsection (a)(1).
       (c) Implementation of Prospective Payment System.--
     Notwithstanding section 1886(b)(3) of the Social Security Act 
     (42 U.S.C. 1395ww(b)(3)), the Secretary shall provide, for 
     cost reporting periods beginning on or after October 1, 2002, 
     for payments for inpatient hospital services furnished by 
     long-term care hospitals under title XVIII of the Social 
     Security Act (42 U.S.C. 1395 et seq.) in accordance with the 
     system described in subsection (a).

     SEC. 114. PER DIEM PROSPECTIVE PAYMENT SYSTEM FOR PSYCHIATRIC 
                   HOSPITALS.

       (a) Development of System.--
       (1) In general.--The Secretary of Health and Human Services 
     shall develop a per diem prospective payment system for 
     payment for inpatient hospital services of psychiatric 
     hospitals and units (as defined in paragraph (3)) under the 
     medicare program. Such system shall include an adequate 
     patient classification system that reflects the differences 
     in patient resource use and costs among such hospitals and 
     shall maintain budget neutrality.
       (2) Collection of data and evaluation.--In developing the 
     system described in paragraph (1), the Secretary may require 
     such psychiatric hospitals and units to submit such 
     information to the Secretary as the Secretary may require to 
     develop the system.
       (3) Definition.--In this section, the term ``psychiatric 
     hospitals and units'' means a psychiatric hospital described 
     in clause (i) of section 1886(d)(1)(B) of the Social Security 
     Act (42 U.S.C. 1395ww(d)(1)(B)) and psychiatric units 
     described in the matter following clause (v) of such section.
       (b) Report.--Not later than October 1, 2001, the Secretary 
     shall submit to the appropriate committees of Congress a 
     report that includes a description of the system developed 
     under subsection (a)(1).
       (c) Implementation of Prospective Payment System.--
     Notwithstanding section 1886(b)(3) of the Social Security Act 
     (42 U.S.C. 1395ww(b)(3)), the Secretary shall provide, for 
     cost reporting periods beginning on or after October 1, 2002, 
     for payments for inpatient hospital services furnished by 
     psychiatric hospitals and units under title XVIII of the 
     Social Security Act (42 U.S.C. 1395 et seq.) in accordance 
     with the prospective payment system established by the 
     Secretary under this section in a budget neutral manner.

     SEC. 115. REFINEMENT OF PROSPECTIVE PAYMENT SYSTEM FOR 
                   INPATIENT REHABILITATION SERVICES.

       (a) Election To Apply Full Prospective Payment Rate Without 
     Phase-In.--
       (1) In general.--Paragraph (1) of section 1886(j) (42 
     U.S.C. 1395ww(j)), as added by section 4421(a) of BBA, is 
     amended--
       (A) in subparagraph (C), by inserting ``subject to 
     subparagraph (E),'' after ``subparagraph (A),''; and
       (B) by adding at the end the following new subparagraph:
       ``(E) Election to apply full prospective payment system.--A 
     rehabilitation facility may elect for either or both cost 
     reporting periods described in subparagraph (C) to have the 
     TEFRA percentage and prospective payment percentage set at 0 
     percent and 100 percent, respectively, for the facility.''.
       (2) Budget neutrality in application.--Paragraph (3)(B) of 
     such section is amended by inserting ``and taking into 
     account the election permitted under paragraph (1)(E)'' after 
     ``in the Secretary's estimation''.
       (3) Case mix creep adjustment.--Paragraph (2)(C) of such 
     section is amended by adding at the end the following new 
     clauses:
       ``(iii) Examination of changes in case mix.--The Secretary, 
     upon obtaining substantially complete data from fiscal year 
     2001, shall analyze the extent to which the changes in case 
     mix during that fiscal year are attributable to changes in 
     coding and classification and do not reflect real changes in 
     case mix.
       ``(iv) Initial adjustment of rates in fiscal year 2004.--
     Based on the analysis performed under clause (iii) in 
     determining the amount of case mix change due merely to 
     changes in coding or classification, the Secretary shall 
     adjust the prospective payment amounts for fiscal year 2004 
     by 150 percent of the Secretary's estimate of the percentage 
     adjustment to the prospective payment rate under this 
     paragraph that would have achieved budget neutrality in 
     fiscal year 2001 if it had applied in setting the rates for 
     that fiscal year.
       ``(v) Final adjustment of rates in fiscal year 2005.--In 
     the case that the adjustment under clause (iv) resulted in--

[[Page H11599]]

       ``(I) a percentage decrease in rates, the Secretary shall 
     increase the prospective payment amounts for fiscal year 2005 
     by a percentage equal to \1/3\ of such percentage decrease; 
     or
       ``(II) a percentage increase in rates, the Secretary shall 
     decrease the prospective payment amounts for fiscal year 2005 
     by a percentage equal to \1/3\ of such percentage 
     increase.''.

       (b) Use of Discharge as Payment Unit.--
       (1) In general.--Paragraph (1)(D) of such section is 
     amended by striking ``, day of inpatient hospital services, 
     or other unit of payment defined by the Secretary''.
       (2) Conforming amendment to classification.--Paragraph 
     (2)(A) of such section is amended by amending clause (i) of 
     to read as follows:
       ``(i) classes of patient discharges of rehabilitation 
     facilities by functional-related groups (each in this 
     subsection referred to as a `case mix group'), based on 
     impairment, age, comorbidities, and functional capability of 
     the patient and such other factors as the Secretary deems 
     appropriate to improve the explanatory power of functional 
     independence measure-function related groups; and''.
       (3) Construction relating to transfer authority.--Paragraph 
     (1) of such section, as amended by subsection (a)(1), is 
     further amended by adding at the end the following new 
     subparagraph:
       ``(F) Construction relating to transfer authority.--Nothing 
     in this subsection shall be construed as preventing the 
     Secretary from providing for an adjustment to payments to 
     take into account the early transfer of a patient from a 
     rehabilitation facility to another site of care.''.
       (c) Study on Impact of Implementation of Prospective 
     Payment System.--
       (1) Study.--The Secretary of Health and Human Services 
     shall conduct a study of the impact on utilization and 
     beneficiary access to services of the implementation of the 
     medicare prospective payment system for inpatient hospital 
     services or rehabilitation facilities under section 1886(j) 
     of the Social Security Act (as added by section 4421(a) of 
     BBA).
       (2) Report.--Not later than 3 years after the date such 
     system is first implemented, the Secretary shall submit to 
     Congress a report on such study.
       (d) Effective Date.--The amendments made by subsections (a) 
     and (b) are effective as if included in the enactment of 
     section 4421(a) of BBA.
 Subtitle C--Adjustments to PPS Payments for Skilled Nursing Facilities

     SEC. 121. TEMPORARY INCREASE IN PAYMENT FOR CERTAIN HIGH COST 
                   PATIENTS.

       (a) Adjustment for Medically Complex Patients Until 
     Establishment of Refined Case-Mix Adjustment.--For purposes 
     of computing payments for covered skilled nursing facility 
     services under paragraph (1) of section 1888(e) of the Social 
     Security Act (42 U.S.C. 1395yy(e)), as added by section 
     4432(a) of BBA, for such services furnished on or after April 
     1, 2000, and before October 1, 2000, the Secretary of Health 
     and Human Services shall increase by 10 percent the adjusted 
     Federal per diem rate otherwise determined under paragraph 
     (4) of such section (but for this section) for covered 
     skilled nursing facility services for RUG-III groups 
     described in subsection (b) furnished to an individual during 
     the period in which such individual is classified in such a 
     RUG-III category.
       (b) Groups Described.--The RUG-III groups for which the 
     adjustment described in subsection (a) applies are SE3, SE2, 
     SE1, SSC, SSB, SSA, CC2, CC1, CB2, CB1, CA2, and CA1, as 
     specified in Tables 3 and 4 of the final rule published in 
     the Federal Register by the Health Care Financing 
     Administration on July 30, 1999 (64 Fed. Reg. 41684).

     SEC. 122. MARKET BASKET INCREASE.

       Section 1888(e)(4)(E)(ii) (42 U.S.C. 1395yy(e)(4)(E)(ii)) 
     is amended--
       (1) by redesignating subclause (III) as subclause (IV); and
       (2) by striking subclause (II) and inserting after 
     subclause (I) the following:

       ``(II) for fiscal year 2001, the rate computed for fiscal 
     year 2000 (determined without regard to section 121 of the 
     Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act 
     of 1999) increased by the skilled nursing facility market 
     basket percentage change for the fiscal year involved plus 
     0.8 percentage point;
       ``(III) for fiscal year 2002, the rate computed for the 
     previous fiscal year increased by the skilled nursing 
     facility market basket percentage change for the fiscal year 
     involved minus 1 percentage point; and''.

     SEC. 123. AUTHORIZING FACILITIES TO ELECT IMMEDIATE 
                   TRANSITION TO FEDERAL RATE.

       (a) In General.--Section 1888(e) (42 U.S.C. 1395yy(e)), as 
     added by section 4432(a) of BBA, is amended--
       (1) in paragraph (1), in the matter preceding subparagraph 
     (A), by striking ``paragraph (7)'' and inserting ``paragraphs 
     (7) and (11)''; and
       (2) by adding at the end the following new paragraph:
       ``(11) Permitting facilities to waive 3-year transition.--
     Notwithstanding paragraph (1)(A), a facility may elect to 
     have the amount of the payment for all costs of covered 
     skilled nursing facility services for each day of such 
     services furnished in cost reporting periods beginning after 
     the date of such election determined pursuant to subparagraph 
     (B) of paragraph (1).''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply to elections made more than 60 days after the 
     date of enactment of this Act.

     SEC. 124. PART A PASS-THROUGH PAYMENT FOR CERTAIN AMBULANCE 
                   SERVICES, PROSTHESES, AND CHEMOTHERAPY DRUGS.

       (a) In General.--Section 1888(e) (42 U.S.C. 1395yy(e)), as 
     added by section 4432(a) of BBA, is amended--
       (1) in paragraph (2)(A)(i)(II), by striking ``services 
     described in clause (ii)'' and inserting ``items and services 
     described in clauses (ii) and (iii)'';
       (2) by adding at the end of paragraph (2)(A) the following 
     new clause:
       ``(iii) Exclusion of certain additional items.--Items 
     described in this clause are the following:

       ``(I) Ambulance services furnished to an individual in 
     conjunction with renal dialysis services described in section 
     1861(s)(2)(F).
       ``(II) Chemotherapy items (identified as of July 1, 1999, 
     by HCPCS codes J9000-J9020; J9040-J9151; J9170-J9185; J9200-
     J9201; J9206-J9208; J9211; J9230-J9245; and J9265-J9600 (and 
     as subsequently modified by the Secretary)).
       ``(III) Chemotherapy administration services (identified as 
     of July 1, 1999, by HCPCS codes 36260-36262; 36489; 36530-
     36535; 36640; 36823; and 96405-96542 (and as subsequently 
     modified by the Secretary)).
       ``(IV) Radioisotope services (identified as of July 1, 
     1999, by HCPCS codes 79030-79440 (and as subsequently 
     modified by the Secretary)).
       ``(V) Customized prosthetic devices (commonly known as 
     artificial limbs or components or artifical limbs) under the 
     following HCPCS codes (as of July 1, 1999 (and as 
     subsequently modified by the Secretary)) if delivered to an 
     inpatient for use during the stay in the skilled nursing 
     facility and intended to be used by the individual after 
     discharge from the facility: L5050-L5340; L5500-L5610; L5613-
     L5986; L5988; L6050-L6370; L6400-L6880; L6920-L7274; and 
     L7362-7366.''; and

       (3) by adding at the end of paragraph (9) the following: 
     ``In the case of an item or service described in clause (iii) 
     of paragraph (2)(A) that would be payable under part A but 
     for the exclusion of such item or service under such clause, 
     payment shall be made for the item or service, in an amount 
     otherwise determined under part B of this title for such item 
     or service, from the Federal Hospital Insurance Trust Fund 
     under section 1817 (rather than from the Federal 
     Supplementary Medical Insurance Trust Fund under section 
     1841).''.
       (b) Conforming for Budget Neutrality Beginning With Fiscal 
     Year 2001.--Section 1888(e)(4)(G) (42 U.S.C. 1395yy(e)(4)(G)) 
     is amended by adding at the end the following new clause:
       ``(iii) Adjustment for exclusion of certain additional 
     items.--The Secretary shall provide for an appropriate 
     proportional reduction in payments so that beginning with 
     fiscal year 2001, the aggregate amount of such reductions is 
     equal to the aggregate increase in payments attributable to 
     the exclusion effected under clause (iii) of paragraph 
     (2)(A).''.
       (c) Effective Date.--The amendments made by subsection (a) 
     shall apply to payments made for items furnished on or after 
     April 1, 2000.

     SEC. 125. PROVISION FOR PART B ADD-ONS FOR FACILITIES 
                   PARTICIPATING IN THE NHCMQ DEMONSTRATION 
                   PROJECT.

       (a) In General.--Section 1888(e)(3) (42 U.S.C. 
     1395yy(e)(3)), as added by section 4432(a) of BBA, is 
     amended--
       (1) in subparagraph (A)--
       (A) in clause (i), by inserting ``or, in the case of a 
     facility participating in the Nursing Home Case-Mix and 
     Quality Demonstration (RUGS-III), the RUGS-III rate received 
     by the facility during the cost reporting period beginning in 
     1997'' after ``to non-settled cost reports''; and
       (B) in clause (ii), by striking ``furnished during such 
     period'' and inserting ``furnished during the applicable cost 
     reporting period described in clause (i)''; and
       (2) by amending subparagraph (B) to read as follows:
       ``(B) Update to first cost reporting period.--The Secretary 
     shall update the amount determined under subparagraph (A), 
     for each cost reporting period after the applicable cost 
     reporting period described in subparagraph (A)(i) and up to 
     the first cost reporting period by a factor equal to the 
     skilled nursing facility market basket percentage increase 
     minus 1 percentage point (except that for the cost reporting 
     period beginning in fiscal year 2001, the factor shall be 
     equal to such market basket percentage plus 0.8 percentage 
     point).''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall be effective as if included in the enactment of section 
     4432(a) of BBA.

     SEC. 126. SPECIAL CONSIDERATION FOR FACILITIES SERVING 
                   SPECIALIZED PATIENT POPULATIONS.

       (a) In General.--Section 1888(e) (42 U.S.C. 1395yy(e)), as 
     amended by section 123(a)(1), is further amended--
       (1) in paragraph (1), by striking ``subject to paragraphs 
     (7) and (11)'' and inserting ``subject to paragraphs (7), 
     (11), and (12)''; and
       (2) by adding at the end the following new paragraph:
       ``(12) Payment rule for certain facilities.--
       ``(A) In general.--In the case of a qualified acute skilled 
     nursing facility described in subparagraph (B), the per diem 
     amount of

[[Page H11600]]

     payment shall be determined by applying the non-Federal 
     percentage and Federal percentage specified in paragraph 
     (2)(C)(ii).
       ``(B) Facility described.--For purposes of subparagraph 
     (A), a qualified acute skilled nursing facility is a facility 
     that--
       ``(i) was certified by the Secretary as a skilled nursing 
     facility eligible to furnish services under this title before 
     July 1, 1992;
       ``(ii) is a hospital-based facility; and
       ``(iii) for the cost reporting period beginning in fiscal 
     year 1998, the facility had more than 60 percent of total 
     patient days comprised of patients who are described in 
     subparagraph (C).
       ``(C) Description of patients.--For purposes of 
     subparagraph (B), a patient described in this subparagraph is 
     an individual who--
       ``(i) is entitled to benefits under part A; and
       ``(ii) is immuno-compromised secondary to an infectious 
     disease, with specific diagnoses as specified by the 
     Secretary.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply for the period beginning on the date on which 
     after the date of the enactment of this Act the first cost 
     reporting period of the facility begins and ending on 
     September 30, 2001, and applies to skilled nursing facilities 
     furnishing covered skilled nursing facility services on the 
     date of the enactment of this Act for which payment is made 
     under title XVIII of the Social Security Act.
       (c) Report to Congress.--By not later than one year after 
     the date of the enactment of this Act, the Secretary of 
     Health and Human Services shall assess the resource use of 
     patients of skilled nursing facilities furnishing services 
     under the medicare program who are immuno-compromised 
     secondary to an infectious disease, with specific diagnoses 
     as specified by the Secretary (under paragraph (12)(C), as 
     added by subsection (a), of section 1888(e) of the Social 
     Security Act (42 U.S.C. 1395yy(e))) to determine whether any 
     permanent adjustments are needed to the RUGs to take into 
     account the resource uses and costs of these patients.

     SEC. 127. MEDPAC STUDY ON SPECIAL PAYMENT FOR FACILITIES 
                   LOCATED IN HAWAII AND ALASKA.

       (a) In General.--The Medicare Payment Advisory Commission 
     shall conduct a study on skilled nursing facilities 
     furnishing covered skilled nursing facility services (as 
     defined in section 1888(e)(2)(A) of the Social Security Act 
     (42 U.S.C. 1395yy(e)(2)(A)) to determine the need for an 
     additional payment amount under section 1888(e)(4)(G) of such 
     Act (42 U.S.C. 1395yy(e)(4)(G)) to take into account the 
     unique circumstances of skilled nursing facilities located in 
     Alaska and Hawaii.
       (b) Report.--By not later than 18 months after the date of 
     the enactment of this Act, the Medicare Payment Advisory 
     Commission shall submit a report to Congress on the study 
     conducted under subsection (a).
                           Subtitle D--Other

     SEC. 131. PART A BBA TECHNICAL CORRECTIONS.

       (a) Section 4201.--Section 1820(c)(2)(B)(i) (42 U.S.C. 
     1395i-4(c)(2)(B)(i)), as amended by section 4201(a) of BBA, 
     is amended by striking ``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'' and inserting ``that 
     is located in a county (or equivalent unit of local 
     government) in a rural area (as defined in section 
     1886(d)(2)(D)), and that''.
       (b) Section 4204.--(1) Section 1886(d)(5)(G) (42 U.S.C. 
     1395ww(d)(5)(G)), as amended by section 4204(a)(1) of BBA, is 
     amended--
       (A) in clause (i), by striking ``or beginning on or after 
     October 1, 1997, and before October 1, 2001,'' and inserting 
     ``or discharges on or after October 1, 1997, and before 
     October 1, 2001,''; and
       (B) in clause (ii)(II), by striking ``or beginning on or 
     after October 1, 1997, and before October 1, 2001,'' and 
     inserting ``or discharges on or after October 1, 1997, and 
     before October 1, 2001,''.
       (2) Section 1886(b)(3)(D) (42 U.S.C. 1395ww(b)(3)(D)), as 
     amended by section 4204(a)(2) of BBA, is amended in the 
     matter preceding clause (i) by striking ``and for cost 
     reporting periods beginning on or after October 1, 1997, and 
     before October 1, 2001,'' and inserting ``and for discharges 
     beginning on or after October 1, 1997, and before October 1, 
     2001,''.
       (c) Section 4319.--Section 1847(b)(2) (42 U.S.C. 1395w-
     3(b)(2)), as added by section 4319 of BBA, is amended by 
     inserting ``and'' after ``specified by the Secretary''.
       (d) Section 4401.--Section 4401(b)(1)(B) of BBA (42 U.S.C. 
     1395ww note) is amended by striking ``section 
     1886(b)(3)(B)(i)(XIII) of the Social Security Act (42 U.S.C. 
     1395ww(b)(3)(B)(i)(XIII))'' and inserting ``section 
     1886(b)(3)(B)(i)(XIV) of the Social Security Act (42 U.S.C. 
     1395ww(b)(3)(B)(i)(XIV))''.
       (e) Section 4402.--The last sentence of section 
     1886(g)(1)(A) (42 U.S.C. 1395ww(g)(1)(A)), as added by 
     section 4402 of BBA, is amended by striking ``September 30, 
     2002,'' and inserting ``October 1, 2002,''.
       (f) Section 4419.--The first sentence of section 
     1886(b)(4)(A)(i) (42 U.S.C. 1395ww(b)(4)(A)(i)), as amended 
     by section 4419(a)(1) of BBA, by striking ``or unit''.
       (g) Section 4442.--Section 4442(b) of BBA (42 U.S.C. 1395f 
     note) is amended by striking ``applies to cost reporting 
     periods beginning'' and inserting ``applies to items and 
     services furnished''.
       (h) Effective Date.--The amendments made by this section 
     shall take effect as if included in the enactment of BBA.
                TITLE II--PROVISIONS RELATING TO PART B
          Subtitle A--Adjustments to Physician Payment Updates

     SEC. 201. MODIFICATION OF UPDATE ADJUSTMENT FACTOR PROVISIONS 
                   TO REDUCE UPDATE OSCILLATIONS AND REQUIRE 
                   ESTIMATE REVISIONS.

       (a) Update Adjustment Factor.--
       (1) In general.--Section 1848(d) (42 U.S.C. 1395w-4(d)) is 
     amended--
       (A) in paragraph (3)--
       (i) in the heading, by inserting ``for 1999 and 2000'' 
     after ``Update'';
       (ii) in subparagraph (A), by striking ``a year beginning 
     with 1999'' and inserting ``1999 and 2000''; and
       (iii) in subparagraph (C), by inserting ``and paragraph 
     (4)'' after ``For purposes of this paragraph''; and
       (B) by adding at the end the following new paragraph:
       ``(4) Update for years beginning with 2001.--
       ``(A) In general.--Unless otherwise provided by law, 
     subject to the budget-neutrality factor determined by the 
     Secretary under subsection (c)(2)(B)(ii) and subject to 
     adjustment under subparagraph (F), the update to the single 
     conversion factor established in paragraph (1)(C) for a year 
     beginning with 2001 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 under subparagraph (B) for the year.
       ``(B) Update adjustment factor.--For purposes of 
     subparagraph (A)(ii), subject to subparagraph (D), the 
     `update adjustment factor' for a year is equal (as estimated 
     by the Secretary) to the sum of the following:
       ``(i) Prior year adjustment component.--An amount 
     determined by--

       ``(I) computing the difference (which may be positive or 
     negative) between the amount of the allowed expenditures for 
     physicians' services for the prior year (as determined under 
     subparagraph (C)) and the amount of the actual expenditures 
     for such services for that year;
       ``(II) dividing that difference by the amount of the actual 
     expenditures for such services for that year; and
       ``(III) multiplying that quotient by 0.75.

       ``(ii) Cumulative adjustment component.--An amount 
     determined by--

       ``(I) computing the difference (which may be positive or 
     negative) between the amount of the allowed expenditures for 
     physicians' services (as determined under subparagraph (C)) 
     from April 1, 1996, through the end of the prior year and the 
     amount of the actual expenditures for such services during 
     that period;
       ``(II) dividing that difference by actual expenditures for 
     such services for the prior year as increased by the 
     sustainable growth rate under subsection (f) for the year for 
     which the update adjustment factor is to be determined; and
       ``(III) multiplying that quotient by 0.33.

       ``(C) Determination of allowed expenditures.--For purposes 
     of this paragraph:
       ``(i) Period up to april 1, 1999.--The allowed expenditures 
     for physicians' services for a period before April 1, 1999, 
     shall be the amount of the allowed expenditures for such 
     period as determined under paragraph (3)(C).
       ``(ii) Transition to calendar year allowed expenditures.--
     Subject to subparagraph (E), the allowed expenditures for--

       ``(I) the 9-month period beginning April 1, 1999, shall be 
     the Secretary's estimate of the amount of the allowed 
     expenditures that would be permitted under paragraph (3)(C) 
     for such period; and
       ``(II) the year of 1999, shall be the Secretary's estimate 
     of the amount of the allowed expenditures that would be 
     permitted under paragraph (3)(C) for such year.

       ``(iii) Years beginning with 2000.--The allowed 
     expenditures for a year (beginning with 2000) is equal to the 
     allowed expenditures for physicians' services for the 
     previous year, increased by the sustainable growth rate under 
     subsection (f) for the year involved.
       ``(D) Restriction on update adjustment factor.--The update 
     adjustment factor determined under subparagraph (B) for a 
     year may not be less than -0.07 or greater than 0.03.
       ``(E) Recalculation of allowed expenditures for updates 
     beginning with 2001.--For purposes of determining the update 
     adjustment factor for a year beginning with 2001, the 
     Secretary shall recompute the allowed expenditures for 
     previous periods beginning on or after April 1, 1999, 
     consistent with subsection (f)(3).
       ``(F) Transitional adjustment designed to provide for 
     budget neutrality.--Under this subparagraph the Secretary 
     shall provide for an adjustment to the update under 
     subparagraph (A)--
       ``(i) for each of 2001, 2002, 2003, and 2004, of -0.2 
     percent; and
       ``(ii) for 2005 of +0.8 percent.''.
       (2) Publication change.--
       (A) In general.--Section 1848(d)(1)(E) (42 U.S.C. 1395w-
     4(d)(1)(E)) is amended to read as follows:
       ``(E) Publication and dissemination of information.--The 
     Secretary shall--
       ``(i) cause to have published in the Federal Register not 
     later than November 1 of each year (beginning with 2000) the 
     conversion

[[Page H11601]]

     factor which will apply to physicians' services for the 
     succeeding year, the update determined under paragraph (4) 
     for such succeeding year, and the allowed expenditures under 
     such paragraph for such succeeding year; and
       ``(ii) make available to the Medicare Payment Advisory 
     Commission and the public by March 1 of each year (beginning 
     with 2000) an estimate of the sustainable growth rate and of 
     the conversion factor which will apply to physicians' 
     services for the succeeding year and data used in making such 
     estimate.''.
       (B) MedPAC review of conversion factor estimates.--Section 
     1805(b)(1)(D) (42 U.S.C. 1395b-6(b)(1)(D)) is amended by 
     inserting ``and including a review of the estimate of the 
     conversion factor submitted under section 1848(d)(1)(E)(ii)'' 
     before the period at the end.
       (C) 1-Time publication of information on transition.--The 
     Secretary of Health and Human Services shall cause to have 
     published in the Federal Register, not later than 90 days 
     after the date of the enactment of this section, the 
     Secretary's determination, based upon the best available 
     data, of--
       (i) the allowed expenditures under subclauses (I) and (II) 
     of section 1848(d)(4)(C)(ii) of the Social Security Act, as 
     added by subsection (a)(1)(B), for the 9-month period 
     beginning on April 1, 1999, and for 1999;
       (ii) the estimated actual expenditures described in section 
     1848(d) of such Act for 1999; and
       (iii) the sustainable growth rate under section 1848(f) of 
     such Act (42 U.S.C. 1395w-4(f)) for 2000.
       (3) Conforming amendments.--
       (A) Section 1848 (42 U.S.C. 1395w-4) is amended--
       (i) in subsection (d)(1)(A), by inserting ``(for years 
     before 2001) and, for years beginning with 2001, multiplied 
     by the update (established under paragraph (4)) for the year 
     involved'' after ``for the year involved''; and
       (ii) in subsection (f)(2)(D), by inserting ``or (d)(4)(B), 
     as the case may be'' after ``(d)(3)(B)''.
       (B) Section 1833(l)(4)(A)(i)(VII) (42 U.S.C. 
     1395l(l)(4)(A)(i)(VII)) is amended by striking ``1848(d)(3)'' 
     and inserting ``1848(d)''.
       (b) Sustainable Growth Rates.--Section 1848(f) (42 U.S.C. 
     1395w-4(f)) is amended--
       (1) by amending paragraph (1) to read as follows:
       ``(1) Publication.--The Secretary shall cause to have 
     published in the Federal Register not later than--
       ``(A) November 1, 2000, the sustainable growth rate for 
     2000 and 2001; and
       ``(B) November 1 of each succeeding year the sustainable 
     growth rate for such succeeding year and each of the 
     preceding 2 years.'';
       (2) in paragraph (2)--
       (A) in the matter before subparagraph (A), by striking 
     ``fiscal year 1998)'' and inserting ``fiscal year 1998 and 
     ending with fiscal year 2000) and a year beginning with 
     2000''; and
       (B) in subparagraphs (A) through (D), by striking ``fiscal 
     year'' and inserting ``applicable period'' each place it 
     appears;
       (3) in paragraph (3), by adding at the end the following 
     new subparagraph:
       ``(C) Applicable period.--The term `applicable period' 
     means--
       ``(i) a fiscal year, in the case of fiscal year 1998, 
     fiscal year 1999, and fiscal year 2000; or
       ``(ii) a calendar year with respect to a year beginning 
     with 2000;
     as the case may be.'';
       (4) by redesignating paragraph (3) as paragraph (4); and
       (5) by inserting after paragraph (2) the following new 
     paragraph:
       ``(3) Data to be used.--For purposes of determining the 
     update adjustment factor under subsection (d)(4)(B) for a 
     year beginning with 2001, the sustainable growth rates taken 
     into consideration in the determination under paragraph (2) 
     shall be determined as follows:
       ``(A) For 2001.--For purposes of such calculations for 
     2001, the sustainable growth rates for fiscal year 2000 and 
     the years 2000 and 2001 shall be determined on the basis of 
     the best data available to the Secretary as of September 1, 
     2000.
       ``(B) For 2002.--For purposes of such calculations for 
     2002, the sustainable growth rates for fiscal year 2000 and 
     for years 2000, 2001, and 2002 shall be determined on the 
     basis of the best data available to the Secretary as of 
     September 1, 2001.
       ``(C) For 2003 and succeeding years.--For purposes of such 
     calculations for a year after 2002--
       ``(i) the sustainable growth rates for that year and the 
     preceding 2 years shall be determined on the basis of the 
     best data available to the Secretary as of September 1 of the 
     year preceding the year for which the calculation is made; 
     and
       ``(ii) the sustainable growth rate for any year before a 
     year described in clause (i) shall be the rate as most 
     recently determined for that year under this subsection.

     Nothing in this paragraph shall be construed as affecting the 
     sustainable growth rates established for fiscal year 1998 or 
     fiscal year 1999.''.
       (c) Effective Date.--The amendments made by this section 
     shall be effective in determining the conversion factor under 
     section 1848(d) of the Social Security Act (42 U.S.C. 1395w-
     4(d)) for years beginning with 2001 and shall not apply to or 
     affect any update (or any update adjustment factor) for any 
     year before 2001.

     SEC. 202. USE OF DATA COLLECTED BY ORGANIZATIONS AND ENTITIES 
                   IN DETERMINING PRACTICE EXPENSE RELATIVE 
                   VALUES.

       (a) In General.--The Secretary of Health and Human Services 
     shall establish by regulation (after notice and opportunity 
     for public comment) a process (including data collection 
     standards) under which the Secretary will accept for use and 
     will use, to the maximum extent practicable consistent with 
     sound data practices, data collected or developed by entities 
     and organizations (other than the Department of Health and 
     Human Services) to supplement the data normally collected by 
     that Department in determining the practice expense component 
     under section 1848(c)(2)(C)(ii) of the Social Security Act 
     (42 U.S.C. 1395w-4(c)(2)(C)(ii)) for purposes of determining 
     relative values for payment for physicians' services under 
     the fee schedule under section 1848 of such Act (42 U.S.C. 
     1395w-4). The Secretary shall first promulgate such 
     regulation on an interim final basis in a manner that permits 
     the submission and use of data in the computation of practice 
     expense relative value units for payment rates for 2001.
       (b) Publication of Information.--The Secretary shall 
     include, in the publication of the estimated and final 
     updates under section 1848(c) of such Act (42 U.S.C. 1395w-
     4(c)) for payments for 2001 and for 2002, a description of 
     the process established under subsection (a) for the use of 
     external data in making adjustments in relative value units 
     and the extent to which the Secretary has used such external 
     data in making such adjustments for each such year, 
     particularly in cases in which the data otherwise used are 
     inadequate because they are not based upon a large enough 
     sample size to be statistically reliable.

     SEC. 203. GAO STUDY ON RESOURCES REQUIRED TO PROVIDE SAFE AND 
                   EFFECTIVE OUTPATIENT CANCER THERAPY.

       (a) Study .--The Comptroller General of the United States 
     shall conduct a nationwide study to determine the physician 
     and non-physician clinical resources necessary to provide 
     safe outpatient cancer therapy services and the appropriate 
     payment rates for such services under the medicare program. 
     In making such determination, the Comptroller General shall--
       (1) determine the adequacy of practice expense relative 
     value units associated with the utilization of those clinical 
     resources;
       (2) determine the adequacy of work units in the practice 
     expense formula; and
       (3) assess various standards to assure the provision of 
     safe outpatient cancer therapy services.
       (b) Report to Congress.--The Comptroller General shall 
     submit to Congress a report on the study conducted under 
     subsection (a). The report shall include recommendations 
     regarding practice expense adjustments to the payment 
     methodology under part B of the medicare program, including 
     the development and inclusion of adequate work units to 
     assure the adequacy of payment amounts for safe outpatient 
     cancer therapy services. The study shall also include an 
     estimate of the cost of implementing such recommendations.
                Subtitle B--Hospital Outpatient Services

     SEC. 211. OUTLIER ADJUSTMENT AND TRANSITIONAL PASS-THROUGH 
                   FOR CERTAIN MEDICAL DEVICES, DRUGS, AND 
                   BIOLOGICALS.

       (a) Outlier Adjustment.--Section 1833(t) (42 U.S.C. 
     1395l(t)), as added by section 4523(a) of BBA, is amended--
       (1) by redesignating paragraphs (5) through (9) as 
     paragraphs (7) through (11), respectively; and
       (2) by inserting after paragraph (4) the following new 
     paragraph:
       ``(5) Outlier adjustment.--
       ``(A) In general.--The Secretary shall provide for an 
     additional payment for each covered OPD service (or group of 
     services) for which a hospital's charges, adjusted to cost, 
     exceed--
       ``(i) a fixed multiple of the sum of--

       ``(I) the applicable Medicare OPD fee schedule amount 
     determined under paragraph (3)(D), as adjusted under 
     paragraph (4)(A) (other than for adjustments under this 
     paragraph or paragraph (6)); and
       ``(II) any transitional pass-through payment under 
     paragraph (6); and

       ``(ii) at the option of the Secretary, such fixed dollar 
     amount as the Secretary may establish.
       ``(B) Amount of adjustment.--The amount of the additional 
     payment under subparagraph (A) shall be determined by the 
     Secretary and shall approximate the marginal cost of care 
     beyond the applicable cutoff point under such subparagraph.
       ``(C) Limit on aggregate outlier adjustments.--
       ``(i) In general.--The total of the additional payments 
     made under this paragraph for covered OPD services furnished 
     in a year (as projected or estimated by the Secretary before 
     the beginning of the year) may not exceed the applicable 
     percentage (specified in clause (ii)) of the total program 
     payments projected or estimated to be made under this 
     subsection for all covered OPD services furnished in that 
     year. If this paragraph is first applied to less than a full 
     year, the previous sentence shall apply only to the portion 
     of such year.
       ``(ii) Applicable percentage.--For purposes of clause (i), 
     the term `applicable percentage' means a percentage specified 
     by the Secretary up to (but not to exceed)--

[[Page H11602]]

       ``(I) for a year (or portion of a year) before 2004, 2.5 
     percent; and
       ``(II) for 2004 and thereafter, 3.0 percent.''.

       (b) Transitional Pass-Through for Additional Costs of 
     Innovative Medical Devices, Drugs, and Biologicals.--Such 
     section is further amended by inserting after paragraph (5) 
     the following new paragraph:
       ``(6) Transitional pass-through for additional costs of 
     innovative medical devices, drugs, and biologicals.--
       ``(A) In general.--The Secretary shall provide for an 
     additional payment under this paragraph for any of the 
     following that are provided as part of a covered OPD service 
     (or group of services):
       ``(i) Current orphan drugs.--A drug or biological that is 
     used for a rare disease or condition with respect to which 
     the drug or biological has been designated as an orphan drug 
     under section 526 of the Federal Food, Drug and Cosmetic Act 
     if payment for the drug or biological as an outpatient 
     hospital service under this part was being made on the first 
     date that the system under this subsection is implemented.
       ``(ii) Current cancer therapy drugs and biologicals.--A 
     drug or biological that is used in cancer therapy, including 
     (but not limited to) a chemotherapeutic agent, antiemetic, 
     hematopoietic growth factor, colony stimulating factor, a 
     biological response modifier, and a bisphosponate, or 
     brachytherapy, if payment for such drug, biological, or 
     device as an outpatient hospital service under this part was 
     being made on such first date.
       ``(iii) New medical devices, drugs, and biologicals.--A 
     medical device, drug, or biological not described in clause 
     (i) or (ii) if--

       ``(I) payment for the device, drug, or biological as an 
     outpatient hospital service under this part was not being 
     made as of December 31, 1996; and
       ``(II) the cost of the device, drug, or biological is not 
     insignificant in relation to the OPD fee schedule amount (as 
     calculated under paragraph (3)(D)) payable for the service 
     (or group of services) involved.

       ``(B) Limited period of payment.--The payment under this 
     paragraph with respect to a medical device, drug, or 
     biological shall only apply during a period of at least 2 
     years, but not more than 3 years, that begins--
       ``(i) on the first date this subsection is implemented in 
     the case of a drug or biological described in clause (i) or 
     (ii) of subparagraph (A) and in the case of a device, drug, 
     or biological described in subparagraph (A)(iii) for which 
     payment under this part is made as an outpatient hospital 
     service before such first date; or
       ``(ii) in the case of a device, drug, or biological 
     described in subparagraph (A)(iii) not described in clause 
     (i), on the first date on which payment is made under this 
     part for the device, drug, or biological as an outpatient 
     hospital service.
       ``(C) Amount of additional payment.--Subject to 
     subparagraph (D)(iii), the amount of the payment under this 
     paragraph with respect to a device, drug, or biological 
     provided as part of a covered OPD service is--
       ``(i) in the case of a drug or biological, the amount by 
     which the amount determined under section 1842(o) for the 
     drug or biological exceeds the portion of the otherwise 
     applicable medicare OPD fee schedule that the Secretary 
     determines is associated with the drug or biological; or
       ``(ii) in the case of a medical device, the amount by which 
     the hospital's charges for the device, adjusted to cost, 
     exceeds the portion of the otherwise applicable medicare OPD 
     fee schedule that the Secretary determines is associated with 
     the device.
       ``(D) Limit on aggregate annual adjustment.--
       ``(i) In general.--The total of the additional payments 
     made under this paragraph for covered OPD services furnished 
     in a year (as projected or estimated by the Secretary before 
     the beginning of the year) may not exceed the applicable 
     percentage (specified in clause (ii)) of the total program 
     payments projected or estimated to be made under this 
     subsection for all covered OPD services furnished in that 
     year. If this paragraph is first applied to less than a full 
     year, the previous sentence shall apply only to the portion 
     of such year.
       ``(ii) Applicable percentage.--For purposes of clause (i), 
     the term `applicable percentage' means--

       ``(I) for a year (or portion of a year) before 2004, 2.5 
     percent; and
       ``(II) for 2004 and thereafter, a percentage specified by 
     the Secretary up to (but not to exceed) 2.0 percent.

       ``(iii) Uniform prospective reduction if aggregate limit 
     projected to be exceeded.--If the Secretary projects or 
     estimates before the beginning of a year that the amount of 
     the additional payments under this paragraph for the year (or 
     portion thereof) as determined under clause (i) without 
     regard to this clause) will exceed the limit established 
     under such clause, the Secretary shall reduce pro rata the 
     amount of each of the additional payments under this 
     paragraph for that year (or portion thereof) in order to 
     ensure that the aggregate additional payments under this 
     paragraph (as so projected or estimated) do not exceed such 
     limit.''.
       (c) Application of New Adjustments on a Budget Neutral 
     Basis.--Section 1833(t)(2)(E) (42 U.S.C. 1395l(t)(2)(E)) is 
     amended by striking ``other adjustments, in a budget neutral 
     manner, as determined to be necessary to ensure equitable 
     payments, such a outlier adjustments or'' and inserting ``, 
     in a budget neutral manner, outlier adjustments under 
     paragraph (5) and transitional pass-through payments under 
     paragraph (6) and other adjustments as determined to be 
     necessary to ensure equitable payments, such as''.
       (d) Limitation on Judicial Review for New Adjustments.--
     Section 1833(t)(11), as redesignated by subsection (a)(1), 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:
       ``(E) the determination of the fixed multiple, or a fixed 
     dollar cutoff amount, the marginal cost of care, or 
     applicable percentage under paragraph (5) or the 
     determination of insignificance of cost, the duration of the 
     additional payments (consistent with paragraph (6)(B)), the 
     portion of the Medicare OPD fee schedule amount associated 
     with particular devices, drugs, or biologicals, and the 
     application of any pro rata reduction under paragraph (6).''.
       (e) Inclusion of Medical Devices Under System.--Section 
     1833(t) (42 U.S.C. 1395l(t)) is amended--
       (1) in paragraph (1)(B)(ii), by striking ``clause (iii)'' 
     and inserting ``clause (iv)'' and by striking ``but'';
       (2) by redesignating clause (iii) of paragraph (1)(B) as 
     clause (iv) and inserting after clause (ii) of such paragraph 
     the following new clause:
       ``(iii) includes medical devices (such as implantable 
     medical devices); but''; and
       (3) in paragraph (2)(B), by inserting after ``resources'' 
     the following: ``and so that a device is classified to the 
     group that includes the service to which the device 
     relates''.
       (f) Authorizing Payment Weights Based on Mean Hospital 
     Costs.--Section 1833(t)(2)(C) (42 U.S.C. 1395l(t)(2)(C)) is 
     amended by inserting ``(or, at the election of the Secretary, 
     mean)'' after ``median''.
       (g) Limiting Variation of Costs of Services Classified With 
     a Group.--Section 1833(t)(2) (42 U.S.C. 1395l(t)(2)) is 
     amended by adding at the end the following new flush 
     sentence:

     ``For purposes of subparagraph (B), items and services within 
     a group shall not be treated as `comparable with respect to 
     the use of resources' if the highest median cost (or mean 
     cost, if elected by the Secretary under subparagraph (C)) for 
     an item or service within the group is more than 2 times 
     greater than the lowest median cost (or mean cost, if so 
     elected) for an item or service within the group; except that 
     the Secretary may make exceptions in unusual cases, such as 
     low volume items and services, but may not make such an 
     exception in the case of a drug or biological has been 
     designated as an orphan drug under section 526 of the Federal 
     Food, Drug and Cosmetic Act.''.
       (h) Annual Review of OPD PPS Components.--
       (1) In general.--Section 1833(t)(8)(A) (42 U.S.C. 
     1395l(t)(8)(A)), as redesignated by subsection (a), is 
     amended--
       (A) by striking ``may periodically review'' and inserting 
     ``shall review not less often than annually''; and
       (B) by adding at the end the following: ``The Secretary 
     shall consult with an expert outside advisory panel composed 
     of an appropriate selection of representatives of providers 
     to review (and advise the Secretary concerning) the clinical 
     integrity of the groups and weights. Such panel may use data 
     collected or developed by entities and organizations (other 
     than the Department of Health and Human Services) in 
     conducting such review.''.
       (2) Effective dates.--The Secretary of Health and Human 
     Services shall first conduct the annual review under the 
     amendment made by paragraph (1)(A) in 2001 for application in 
     2002 and the amendment made by paragraph (1)(B) takes effect 
     on the date of the enactment of this Act.
       (i) No Impact on Copayment.--Section 1833(t)(7) (42 U.S.C. 
     1395l(t)(7)), as redesignated by subsection (a), is amended 
     by adding at the end the following new subparagraph:
       ``(D) Computation ignoring outlier and pass-through 
     adjustments.--The copayment amount shall be computed under 
     subparagraph (A) as if the adjustments under paragraphs (5) 
     and (6) (and any adjustment made under paragraph (2)(E) in 
     relation to such adjustments) had not occurred.''.
       (j) Technical Correction in Reference Relating to Hospital-
     Based Ambulance Services.--Section 1833(t)(9) (42 U.S.C. 
     1395l(t)(9)), as redesignated by subsection (a), is amended 
     by striking ``the matter in subsection (a)(1) preceding 
     subparagraph (A)'' and inserting ``section 1861(v)(1)(U)''.
       (k) Effective Date.--Except as provided in this section, 
     the amendments made by this section shall be effective as if 
     included in the enactment of BBA.
       (l) Study of Delivery of Intravenous Immune Globulin (IVIG) 
     Outside Hospitals and Physicians' Offices.--
       (1) Study.--The Secretary of Health and Human Services 
     shall conduct a study of the extent to which intravenous 
     immune globulin (IVIG) could be delivered and reimbursed 
     under the medicare program outside of a hospital or 
     physician's office. In conducting the study, the Secretary 
     shall--
       (A) consider the sites of service that other payors, 
     including Medicare+Choice plans, use for these drugs and 
     biologicals;

[[Page H11603]]

       (B) determine whether covering the delivery of these drugs 
     and biologicals in a medicare patient's home raises any 
     additional safety and health concerns for the patient;
       (C) determine whether covering the delivery of these drugs 
     and biologicals in a patient's home can reduce overall 
     spending under the medicare program; and
       (D) determine whether changing the site of setting for 
     these services would affect beneficiary access to care.
       (2) Report.--The Secretary shall submit a report on such 
     study to the Committees on Way and Means and Commerce of the 
     House of Representatives and the Committee on Finance of the 
     Senate within 1 year after the date of the enactment of this 
     Act. The Secretary shall include in the report 
     recommendations regarding on the appropriate manner and 
     settings under which the medicare program should pay for 
     these drugs and biologicals delivered outside of a hospital 
     or physician's office.

     SEC. 212. ESTABLISHING A TRANSITIONAL CORRIDOR FOR 
                   APPLICATION OF OPD PPS.

       (a) In General.--Section 1833(t) (42 U.S.C. 1395l(t)), as 
     amended by section 211(a), is further amended--
       (1) in paragraph (4), in the matter before subparagraph 
     (A), by inserting ``, subject to paragraph (7),'' after ``is 
     determined''; and
       (2) by redesignating paragraphs (7) through (11) as 
     paragraphs (8) through (12), respectively; and
       (3) by inserting after paragraph (6), as inserted by 
     section 211(b), the following new paragraph:
       ``(7) Transitional adjustment to limit decline in 
     payment.--
       ``(A) Before 2002.--Subject to subparagraph (D), for 
     covered OPD services furnished before January 1, 2002, for 
     which the PPS amount (as defined in subparagraph (E)) is--
       ``(i) at least 90 percent, but less than 100 percent, of 
     the pre-BBA amount (as defined in subparagraph (F)), the 
     amount of payment under this subsection shall be increased by 
     80 percent of the amount of such difference;
       ``(ii) at least 80 percent, but less than 90 percent, of 
     the pre-BBA amount, the amount of payment under this 
     subsection shall be increased by the amount by which (I) the 
     product of 0.71 and the pre-BBA amount, exceeds (II) the 
     product of 0.70 and the PPS amount;
       ``(iii) at least 70 percent, but less than 80 percent, of 
     the pre-BBA amount, the amount of payment under this 
     subsection shall be increased by the amount by which (I) the 
     product of 0.63 and the pre-BBA amount, exceeds (II) the 
     product of 0.60 and the PPS amount;
       ``(iv) less than 70 percent of the pre-BBA amount, the 
     amount of payment under this subsection shall be increased by 
     21 percent of the pre-BBA amount.
       ``(B) 2002.--Subject to subparagraph (D), for covered OPD 
     services furnished during 2002, for which the PPS amount is--
       ``(i) at least 90 percent, but less than 100 percent, of 
     the pre-BBA amount, the amount of payment under this 
     subsection shall be increased by 70 percent of the amount of 
     such difference;
       ``(ii) at least 80 percent, but less than 90 percent, of 
     the pre-BBA amount, the amount of payment under this 
     subsection shall be increased by the amount by which (I) the 
     product of 0.61 and the pre-BBA amount, exceeds (II) the 
     product of 0.60 and the PPS amount;
       ``(iii) less than 80 percent of the pre-BBA amount, the 
     amount of payment under this subsection shall be increased by 
     13 percent of the pre-BBA amount.
       ``(C) 2003.--Subject to subparagraph (D), for covered OPD 
     services furnished during 2003, for which the PPS amount is--
       ``(i) at least 90 percent, but less than 100 percent, of 
     the pre-BBA amount, the amount of payment under this 
     subsection shall be increased by 60 percent of the amount of 
     such difference; or
       ``(ii) less than 90 percent of the pre-BBA amount, the 
     amount of payment under this subsection shall be increased by 
     6 percent of the pre-BBA amount.
       ``(D) Special rule for small rural hospitals.--In the case 
     of a hospital located in a rural area and that has not more 
     than 100 beds, for covered OPD services furnished before 
     January 1, 2004, for which the PPS amount is less than the 
     pre-BBA amount, the amount of payment under this subsection 
     shall be increased by 100 percent of the amount of such 
     difference.
       ``(E) PPS amount defined.--In this paragraph, the term `PPS 
     amount' means, with respect to covered OPD services, the 
     amount payable under this title for such services (determined 
     without regard to this paragraph), including amounts payable 
     as copayment under paragraph (5), coinsurance under section 
     1866(a)(2)(A)(ii), and the deductible under section 1833(b).
       ``(F) Pre-BBA amount defined.--
       ``(i) In general.--In this paragraph, the `pre-BBA amount' 
     means, with respect to covered OPD services furnished by a 
     hospital in a year, an amount equal to the product of the 
     reasonable cost of the hospital for such services for the 
     portions of the hospital's cost reporting period (or periods) 
     occurring in the year and the base OPD payment-to-cost ratio 
     for the hospital (as defined in clause (ii)).
       ``(ii) Base payment-to-cost-ratio defined.--For purposes of 
     this subparagraph, the `base payment-to-cost ratio' for a 
     hospital means the ratio of--

       ``(I) the hospital's reimbursement under this part for 
     covered OPD services furnished during the cost reporting 
     period ending in 1996, including any reimbursement for such 
     services through cost-sharing described in subparagraph (D), 
     to
       ``(II) the reasonable cost of such services for such 
     period.

       ``(G) No effect on copayments.--Nothing in this paragraph 
     shall be construed to affect the unadjusted copayment amount 
     described in paragraph (3)(B) or the copayment amount under 
     paragraph (8).
       ``(H) Application without regard to budget neutrality.--The 
     additional payments made under this paragraph--
       ``(i) shall not be considered an adjustment under paragraph 
     (2)(E); and
       ``(ii) shall not be implemented in a budget neutral 
     manner.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall be effective as if included in the enactment of BBA.
       (c) Report on Rural Hospitals.--Not later than July 1, 
     2002, the Secretary of Health and Human Services shall submit 
     to Congress a report and recommendations on whether the 
     prospective payment system for covered outpatient services 
     furnished under title XVIII of the Social Security Act should 
     apply to the following providers of services furnishing 
     outpatient items and services for which payment is made under 
     such title:
       (1) Medicare-dependent, small rural hospitals (as defined 
     in section 1886(d)(5)(G)(iv) of such Act (42 U.S.C. 
     1395ww(d)(5)(G)(iv))).
       (2) Sole community hospitals (as defined in section 
     1886(d)(5)(D)(iii) of such Act (42 U.S.C. 
     1395ww(d)(5)(D)(iii)).
       (3) Rural health clinics (as defined in section 1861(aa)(2) 
     of such Act (42 U.S.C. 1395x(aa)(2)).
       (4) Rural referral centers (as so classified under section 
     1886(d)(5)(C) of such Act (42 U.S.C. 1395ww(d)(5)(C)).
       (5) Any other rural hospital with not more than 100 beds.
       (6) Any other rural hospital that the Secretary determines 
     appropriate.

     SEC. 213. DELAY IN APPLICATION OF PROSPECTIVE PAYMENT SYSTEM 
                   TO CANCER CENTER HOSPITALS.

       Section 1833(t)(11)(A) (42 U.S.C. 1395l(t)(11)(A)), as 
     redesignated by section 212(a), is amended by striking 
     ``January 1, 2000'' and inserting ``the first day of the 
     first year that begins 2 years after the date the prospective 
     payment system under this section is first implemented''.

     SEC. 214. LIMITATION ON OUTPATIENT HOSPITAL COPAYMENT FOR A 
                   PROCEDURE TO THE HOSPITAL DEDUCTIBLE AMOUNT.

       (a) In General.--Section 1833(t)(8) (42 U.S.C. 
     1395l(t)(8)), as redesignated by sections 212(a)(1) and 
     212(a)(2), is amended--
       (1) in subparagraph (A), by striking ``subparagraph (B)'' 
     and inserting ``subparagraphs (B) and (C)'';
       (2) by redesignating subparagraphs (C) and (D) as 
     subparagraphs (D) and (E), respectively; and
       (3) by inserting after subparagraph (B) the following new 
     subparagraph:
       ``(C) Limiting copayment amount to inpatient hospital 
     deductible amount.--In no case shall the copayment amount for 
     a procedure performed in a year exceed the amount of the 
     inpatient hospital deductible established under section 
     1813(b) for that year.''.
       (b) Increase in Payment To Reflect Reduction in 
     Copayment.--Section 1833(t)(4)(C) (42 U.S.C. 1395l(t)(4)(C)) 
     is amended by inserting ``, plus the amount of any reduction 
     in the copayment amount attributable to paragraph (5)(C)'' 
     before the period at the end.
       (c) Effective Date.--The amendments made by this section 
     apply as if included in the enactment of BBA and shall only 
     apply to procedures performed for which payment is made on 
     the basis of the prospective payment system under section 
     1833(t) of the Social Security Act.
                           Subtitle C--Other

     SEC. 221. APPLICATION OF SEPARATE CAPS TO PHYSICAL AND SPEECH 
                   THERAPY SERVICES.

       (a) In General.--Section 1833(g) (42 U.S.C. 1395l(g)) is 
     amended--
       (1) in paragraph (1)--
       (A) by inserting ``(A)'' after ``(g)(1)''; and
       (B) by adding at the end the following new subparagraph:
       ``(B) Subparagraph (A) shall be applied separately for 
     speech-language pathology services described in the fourth 
     sentence of section 1861(p) and for other outpatient physical 
     therapy services.''; and
       (2) by adding at the end the following new paragraph:
       ``(4) The limitations of this subsection apply to the 
     services involved on a per beneficiary, per facility (or 
     provider) basis.''.
       (b) Technical Amendment Relating to Being Under the Care of 
     a Physician.--Section 1861 (42 U.S.C. 1395x) is amended--
       (1) in subsection (p)(1), by striking ``or (3)'' and 
     inserting ``, (3), or (4)''; and
       (2) in subsection (r)(4), by inserting ``for purposes of 
     subsection (p)(1) and'' after ``but only''.
       (c) Effective Date.--The amendments made by this section 
     apply to services furnished on or after January 1, 2000.

     SEC. 222. TRANSITIONAL OUTLIER PAYMENTS FOR THERAPY SERVICES 
                   FOR CERTAIN HIGH ACUITY PATIENTS.

       Section 1833(g) (42 U.S.C. 1395l(g)), as amended by section 
     221, is further amended by adding at the end the following 
     new paragraph:
       ``(5)(A) The Secretary shall establish a process under 
     which a facility or provider

[[Page H11604]]

     that is providing therapy services to which the limitation of 
     this subsection applies to a beneficiary may apply to the 
     Secretary for an increase in such limitation under this 
     paragraph for services furnished in 2000 or in 2001.
       ``(B) Such process shall take into account the clinical 
     diagnosis and shall provide that the aggregate amount of 
     additional payments resulting from the application of this 
     paragraph--
       ``(i) during fiscal year 2000 may not exceed $40,000,000;
       ``(ii) during fiscal year 2001 may not exceed $60,000,000; 
     and
       ``(iii) during fiscal year 2002 may not exceed 
     $20,000,000.''.

     SEC. 223. UPDATE IN RENAL DIALYSIS COMPOSITE RATE.

       (a) In General.--Section 1881(b)(7) (42 U.S.C. 
     1395rr(b)(7)) is amended by adding at the end the following 
     new flush sentence:

     ``The Secretary shall increase the amount of each composite 
     rate payment for dialysis services furnished on or after 
     January 1, 2000, and on or before December 31, 2000, by 1.2 
     percent above such composite rate payment amounts for such 
     services furnished on December 31, 1999, and for such 
     services furnished on or after January 1, 2001, by 1.2 
     percent above such composite rate payment amounts for such 
     services furnished on December 31, 2000.''.
       (b) Conforming Amendment.--
       (1) In general.--Section 9335(a) of the Omnibus Budget 
     Reconciliation Act of 1986 (42 U.S.C. 1395rr note) is amended 
     by striking paragraph (1).
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect on January 1, 2000.
       (c) Study on Payment Level for Home Hemodialysis.--The 
     Medicare Payment Advisory Commission shall conduct a study on 
     the appropriateness of the differential in payment under the 
     medicare program for hemodialysis services furnished in a 
     facility and such services furnished in a home. Not later 
     than 18 months after the date of the enactment of this Act, 
     the Commission shall submit to Congress a report on such 
     study and shall include recommendations regarding changes in 
     medicare payment policy in response to the study.

     SEC. 224. TEMPORARY UPDATE IN DURABLE MEDICAL EQUIPMENT AND 
                   OXYGEN RATES.

       (a) Durable Medical Equipment and Oxygen.--Section 
     1834(a)(14) (42 U.S.C. 1395m(a)(14)), as amended by section 
     4551(a)(1) of BBA, is amended --
       (1) by redesignating subparagraph (D) as subparagraph (E); 
     and
       (2) by striking subparagraph (C) and inserting the 
     following:
       ``(C) for each of the years 1998 through 2000, 0 percentage 
     points;
       ``(D) for each of the years 2001 and 2002, 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 minus 2 percentage points; and''.
       (b) Conforming Amendments.--Section 1834(a)(9)(B) (42 
     U.S.C. 1395m(a)(9)(B)), as amended by section 4552(a) of BBA, 
     is amended--
       (1) by striking ``and'' at the end of clause (v);
       (2) in clause (vi), by striking ``and each subsequent 
     year'' and inserting ``and 2000'' and by striking the period 
     at the end and inserting ``; and''; and
       (3) by adding at the end the following new clause:
       ``(vii) for 2001 and each subsequent year, the amount 
     determined under this subparagraph for the preceding year 
     increased by the covered item update for such subsequent 
     year.''.

     SEC. 225. REQUIREMENT FOR NEW PROPOSED RULEMAKING FOR 
                   IMPLEMENTATION OF INHERENT REASONABLENESS 
                   POLICY.

       The Secretary of Health and Human Services shall not 
     exercise inherent reasonableness authority provided under 
     section 1842(b)(8) of the Social Security Act (42 U.S.C. 
     1395u(b)(8)) before such time as--
       (1) the Secretary has published in the Federal Register a 
     new notice of proposed rulemaking to implement subparagraph 
     (A) of such section;
       (2) has provided for a period of not less than 60 days for 
     public comment on such proposed rule; and
       (3) the Secretary has published in the Federal Register a 
     final rule which takes into account comments received during 
     such period.

     SEC. 226. INCREASE IN REIMBURSEMENT FOR PAP SMEARS.

       (a) Pap Smear Payment Increase.--Section 1833(h) (42 U.S.C. 
     1395l(h)) is amended by adding at the end the following new 
     paragraph:
       ``(7) Notwithstanding paragraphs (1) and (4), the Secretary 
     shall establish a minimum payment amount under this 
     subsection for all areas for a diagnostic or screening pap 
     smear laboratory test (including all cervical cancer 
     screening technologies that have been approved by the Food 
     and Drug Administration) of not less than $14.60.''.
       (b) Sense of Congress.--It is the sense of the Congress 
     that--
       (1) the Health Care Financing Administration has been slow 
     to incorporate or provide incentives for providers to use new 
     screening diagnostic health care technologies in the area of 
     cervical cancer;
       (2) some new technologies have been developed which 
     optimize the effectiveness of pap smear screening; and
       (3) the Health Care Financing Administration should 
     institute an appropriate increase in the payment rate for new 
     cervical cancer screening technologies that have been 
     approved by the Food and Drug Administration as significantly 
     more effective than a conventional pap smear.
       (c) Effective Date.--The amendments made by subsection (a) 
     apply to services items and furnished on or after January 1, 
     2000.

     SEC. 227. REFINEMENT OF AMBULANCE SERVICES DEMONSTRATION 
                   PROJECT.

       Effective as if included in the enactment of BBA, section 
     4532 of BBA is amended--
       (1) in subsection (a), by adding at the end the following: 
     ``The Secretary shall publish by not later than July 1, 2000, 
     a request for proposals for such projects.''; and
       (2) by amending paragraph (2) of subsection (b) to read as 
     follows:
       ``(2) Capitated payment rate defined.--In this subsection, 
     the `capitated payment rate' means, with respect to a 
     demonstration project--
       ``(A) in its first year, a rate established for the project 
     by the Secretary, using the most current available data, in a 
     manner that ensures that aggregate payments under the project 
     will not exceed the aggregate payment that would have been 
     made for ambulance services under part B of title XVIII of 
     the Social Security Act in the local area of government's 
     jurisdiction; and
       ``(B) in a subsequent year, the capitated payment rate 
     established for the previous year increased by an appropriate 
     inflation adjustment factor.''.

     SEC. 228. PHASE-IN OF PPS FOR AMBULATORY SURGICAL CENTERS.

       If the Secretary of Health and Human Services implements a 
     revised prospective payment system for services of ambulatory 
     surgical facilities under part B of title XVIII of the Social 
     Security Act, prior to incorporating data from the 1999 
     Medicare cost survey, such system shall be implemented in a 
     manner so that--
       (1) in the first year of its implementation, only a 
     proportion (specified by the Secretary and not to exceed \1/
     3\) of the payment for such services shall be made in 
     accordance with such system and the remainder shall be made 
     in accordance with current regulations; and
       (2) in the following year a proportion (specified by the 
     Secretary and not to exceed \2/3\) of the payment for such 
     services shall be made under such system and the remainder 
     shall be made in accordance with current regulations.

     SEC. 229. EXTENSION OF MEDICARE BENEFITS FOR 
                   IMMUNOSUPPRESSIVE DRUGS.

       (a) In General.--The Secretary of Health and Human Services 
     shall provide under this section for an extension of the 
     period of coverage of immunosuppressive drugs under section 
     1861(s)(2)(J) of the Social Security Act (42 U.S.C. 
     1395x(s)(2)(J)) to individuals described in such section 
     under terms and conditions specified by the Secretary 
     consistent with subsection (c) and the objectives--
       (1) of improving health outcomes by decreasing transplant 
     rejection rates that are attributable to failure to comply 
     with immunosuppressive drug regimens; and
       (2) of achieving cost saving to the medicare program by 
     decreasing the need for secondary transplants and other care 
     relating to post-transplant complications.
       (b) Authority.--In carrying out this section--
       (1) the Secretary shall provide priority in eligibility to 
     those medicare beneficiaries who, because of income or other 
     factors, would be less likely to maintain an 
     immunosuppressive drug regimen in the absence of such an 
     extension; and
       (2) the Secretary is authorized to vary the beneficiary 
     cost-sharing otherwise applicable in order to promote the 
     objectives described in subsection (a).
       (c) Limitations.--The total amount expended by the 
     Secretary under title XVIII of the Social Security Act to 
     carry out this section shall not exceed $200,000,000, and 
     with respect to expenditures in fiscal year 2000 shall not 
     exceed $40,000,000. The Secretary shall not provide an 
     extension of coverage under this section for 
     immunosuppressive drugs furnished after September 30, 2004.
       (d) Report.--Not later than 36 months after the first month 
     in which the Secretary provides for extended benefits under 
     this section, the Secretary shall submit to Congress a report 
     on the operation of this section. The report shall include--
       (1) an analysis of the impact of this section on meeting 
     the objectives described in subsection (a); and
       (2) recommendations regarding an appropriate cost-effective 
     method for extending coverage of immunosuppressive drugs 
     under the medicare program on a permanent basis.

     SEC. 230. ADDITIONAL STUDIES.

       (a) MedPAC Study on Postsurgical Recovery Care Center 
     Services.--
       (1) In general.--The Medicare Payment Advisory Commission 
     shall conduct a study on the cost-effectiveness and efficacy 
     of covering under the medicare program services of a post-
     surgical recovery care center (that provides an intermediate 
     level of recovery care following surgery). In conducting such 
     study, the Commission shall consider data on these centers 
     gathered in demonstration projects.
       (2) Report.--Not later than 1 year after the date of the 
     enactment of this Act, the

[[Page H11605]]

     Commission shall submit to Congress a report on such study 
     and shall include in the report recommendations on the 
     feasibility, costs, and savings of covering such services 
     under the medicare program.
       (b) ACHPR Study on Effect of Credentialing of Technologists 
     and Sonographers on Quality of Ultrasound and Imaging 
     Services.--
       (1) Study.--The Administrator for Health Care Policy and 
     Research shall provide for a study that compares the 
     differences in quality of ultrasound and other imaging 
     services (including error rates and resulting complications) 
     furnished under the medicare and medicaid programs between 
     such services furnished by individuals who are credentialed 
     by private entities or organizations and by those who are not 
     so credentialed. Such study shall examine and evaluate 
     differences in error rates and patient outcomes as a result 
     of the differences in credentialing. In designing the study, 
     the Administrator shall consult with organizations nationally 
     recognized for their expertise in ultrasound procedures.
       (2) Report.--By not later than two years after the date of 
     the enactment of this Act, the Administrator shall submit a 
     report to Congress on the study conducted under paragraph 
     (1).
       (c) MedPAC Study on the Complexity of the Medicare Program 
     and the Levels of Burdens Placed on Providers Through Federal 
     Regulations.--
       (1) Study.--The Medicare Payment Advisory Commission shall 
     undertake a comprehensive study to review the regulatory 
     burdens placed on all classes of health care providers under 
     parts A and B of the medicare program under title XVIII of 
     the Social Security Act and to determine the costs these 
     burdens impose on the nation's health care system. The study 
     shall also examine the complexity of the current regulatory 
     system and its impact on providers.
       (2) Report.--not later than December 31, 2001, the 
     Commission shall submit to Congress a report on the study 
     conducted under paragraph (1). The report shall include 
     recommendations regarding--
       (A) how the Health Care Financing Administration can reduce 
     the regulatory burdens placed on patients and providers; and
       (B) legislation that may be appropriate to reduce the 
     complexity of the medicare program, including improvement of 
     the rules regarding billing, compliance, and fraud and abuse.
       (d) GAO Continued Monitoring of Department of Justice 
     Application of Guidelines on Use of False Claims Act in Civil 
     Health Care Matters.--The Comptroller General of the United 
     States shall--
       (1) continue the monitoring, begun under section 118 of the 
     Department of Justice Appropriations Act, 1999 (included in 
     Public Law 105-277) of the compliance of the Department of 
     Justice and all United States Attorneys with the ``Guidance 
     on the Use of the False Claims Act in Civil Health Care 
     Matters'' issued by the Department of Justice on June 3, 
     1998, including any revisions to that guidance; and
       (2) not later than April 1, 2000, and of each of the two 
     succeeding years, submit a report on such compliance to the 
     appropriate Committees of Congress.
            TITLE III--PROVISIONS RELATING TO PARTS A AND B
                    Subtitle A--Home Health Services

     SEC. 301. ADJUSTMENT TO REFLECT ADMINISTRATIVE COSTS NOT 
                   INCLUDED IN THE INTERIM PAYMENT SYSTEM; GAO 
                   REPORT ON COSTS OF COMPLIANCE WITH OASIS DATA 
                   COLLECTION REQUIREMENTS.

       (a) Adjustment to Reflect Administrative Costs.--
       (1) In general.--In the case of a home health agency that 
     furnishes home health services to a medicare beneficiary, for 
     each such beneficiary to whom the agency furnished such 
     services during the agency's cost reporting period beginning 
     in fiscal year 2000, the Secretary of Health Services shall 
     pay the agency, in addition to any amount of payment made 
     under subsection (v)(1)(L) of such section for the 
     beneficiary and only for such cost reporting period, an 
     aggregate amount of $10 to defray costs incurred by the 
     agency attributable to data collection and reporting 
     requirements under the Outcome and Assessment Information Set 
     (OASIS) required by reason of section 4602(e) of the Balanced 
     Budget Act of 1997 (42 U.S.C. 1395fff note).
       (2) Payment schedule.--
       (A) Midyear payment.--By not later than April 1, 2000, the 
     Secretary shall pay to a home health agency an amount that 
     the Secretary estimates to be 50 percent of the aggregate 
     amount payable to the agency by reason of this subsection.
       (B) Upon settled cost report.--The Secretary shall pay the 
     balance of amounts payable to an agency under this subsection 
     on the date that the cost report submitted by the agency for 
     the cost reporting period beginning in fiscal year 2000 is 
     settled.
       (3) Payment from trust funds.--Payments under this 
     subsection shall be made, in appropriate part as specified by 
     the Secretary, from the Federal Hospital Insurance Trust Fund 
     and from the Federal Supplementary Medical Insurance Trust 
     Fund.
       (4) Definitions.--in this subsection:
       (A) Home health agency.--The term ``home health agency'' 
     has the meaning given that term under section 1861(o) of the 
     Social Security Act (42 U.S.C. 1395x(o)).
       (B) Home health services.--The term ``home health 
     services'' has the meaning given that term under section 
     1861(m) of such Act (42 U.S.C. 1395x(m)).
       (C) Medicare beneficiary.--The term ``medicare 
     beneficiary'' means a beneficiary described in section 
     1861(v)(1)(L)(vi)(II) of the Social Security Act (42 U.S.C. 
     1395x(v)(1)(L)(vi)(II)).
       (b) GAO Report on Costs of Compliance With OASIS Data 
     Collection Requirements.--
       (1) Report to congress.--
       (A) In general.--Not later than 180 days after the date of 
     the enactment of this Act, the Comptroller General of the 
     United States shall submit a report to Congress on matters 
     described in subparagraph (B) with respect to the data 
     collection requirement of patients of such agencies under the 
     Outcome and Assessment Information Set (OASIS) standard as 
     part of the comprehensive assessment of patients.
       (B) Matters studied.--For purposes of subparagraph (A), the 
     matters described in this subparagraph include the following:
       (i) An assessment of the costs incurred by medicare home 
     health agencies in complying with such data collection 
     requirement.
       (ii) An analysis of the effect of such data collection 
     requirement on the privacy interests of patients from whom 
     data is collected.
       (C) Audit.--The Comptroller General shall conduct an 
     independent audit of the costs described in subparagraph 
     (B)(i). Not later than 180 days after receipt of the report 
     under subparagraph (A), the Comptroller General shall submit 
     to Congress a report describing the Comptroller General's 
     findings with respect to such audit, and shall include 
     comments on the report submitted to Congress by the Secretary 
     of Health and Human Services under subparagraph (A).
       (2) Definitions.--In this subsection:
       (A) Comprehensive assessment of patients.--The term 
     ``comprehensive assessment of patients'' means the rule 
     published by the Health Care Financing Administration that 
     requires, as a condition of participation in the medicare 
     program, a home health agency to provide a patient-specific 
     comprehensive assessment that accurately reflects the 
     patient's current status and that incorporates the Outcome 
     and Assessment Information Set (OASIS).
       (B) Outcome and assessment information set.--The term 
     ``Outcome and Assessment Information Set'' means the standard 
     provided under the rule relating to data items that must be 
     used in conducting a comprehensive assessment of patients.

     SEC. 302. DELAY IN APPLICATION OF 15 PERCENT REDUCTION IN 
                   PAYMENT RATES FOR HOME HEALTH SERVICES UNTIL 1 
                   YEAR AFTER IMPLEMENTATION OF PROSPECTIVE 
                   PAYMENT SYSTEM.

       (a) Contingency Reduction.--Section 4603(e) of the Balanced 
     Budget Act of 1997 (42 U.S.C. 1395fff note) (as amended by 
     section 5101(c)(3) of the Tax and Trade Relief Extension Act 
     of 1998 (contained in division J of Public Law 105-277)) is 
     amended by striking ``September 30, 2000'' and inserting ``on 
     the date that is 12 months after the date the Secretary 
     implements such system''.
       (b) Prospective Payment System.--Section 1895(b)(3)(A)(i) 
     (42 U.S.C. 1395fff(b)(3)(A)(i)) (as amended by section 5101 
     of the Tax and Trade Relief Extension Act of 1998 (contained 
     in division J of Public Law 105-277)) is amended to read as 
     follows:
       ``(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--

       ``(I) for the 12-month period beginning on the date the 
     Secretary implements the system, shall be equal to the total 
     amount that would have been made if the system had not been 
     in effect; and
       ``(II) for periods beginning after the period described in 
     subclause (I), shall be equal to the total amount that would 
     have been made for fiscal year 2001 if the system had not 
     been in effect but if the reduction in limits described in 
     clause (ii) had been in effect, and updated under 
     subparagraph (B).

     Each 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.''.
       (c) Report.--
       (1) In general.--The Secretary of Health and Human Services 
     shall submit to Congress a report analyzing the need for the 
     15 percent reduction under section 1895(b)(3)(A)(ii) of the 
     Social Security Act (42

[[Page H11606]]

     U.S.C. 1395fff(b)(3)(A)(ii)), or for any reduction, in the 
     computation of the base payment amounts under the prospective 
     payment system for home health services under section 1895 of 
     such Act (42 U.S.C. 1395w-29).
       (2) Deadline.--The Secretary shall submit to Congress the 
     report described in paragraph (1) by not later than the date 
     that is six months after the date the Secretary implements 
     the prospective payment system for home health services under 
     such section 1895.

     SEC. 303. CLARIFICATION OF SURETY BOND REQUIREMENTS.

       (a) Home Health Agencies.--Section 1861(o)(7) (42 U.S.C. 
     1395x(o)(7)) is amended to read as follows:
       ``(7) provides the Secretary with a surety bond--
       ``(A) effective for a period of 4 years (as specified by 
     the Secretary) or in the case of a change in the ownership or 
     control of the agency (as determined by the Secretary) during 
     or after such 4-year period, an additional period of time 
     that the Secretary determines appropriate, such additional 
     period not to exceed 4 years from the date of such change in 
     ownership or control;
       ``(B) in a form specified by the Secretary; and
       ``(C) for a year in the period described in subparagraph 
     (A) in an amount that is equal to the lesser of $50,000 or 10 
     percent of the aggregate amount of payments to the agency 
     under this title and title XIX for that year, as estimated by 
     the Secretary; and''.
       (b) Coordination of Surety Bonds.--Part A of title XI is 
     amended by adding at the end the following new section:


     ``coordination of medicare and medicaid surety bond provisions

       ``Sec. 1148. In the case of a home health agency that is 
     subject to a surety bond under title XVIII and title XIX, the 
     surety bond provided to satisfy the requirement under one 
     such title shall satisfy the requirement under the other such 
     title so long as the bond applies to guarantee return of 
     overpayments under both such titles.''.
       (c) Effective Date.--The amendments made by this section 
     take effect on the date of the enactment of this Act and in 
     applying section 1861(o)(7) of the Social Security Act, as 
     amended by subsection (a), the Secretary of Health and Human 
     Services may take into account the previous period for which 
     a home health agency had a surety bond in effect under such 
     section before such date.

     SEC. 304. TECHNICAL AMENDMENT CLARIFYING APPLICABLE MARKET 
                   BASKET INCREASE FOR PPS.

       Section 1895(b)(3)(B)(ii)(I) (42 U.S.C. 
     1395fff(b)(3)(B)(ii)(I)), as added by section 4603 of BBA (as 
     amended by section 5101(d)(2) of the Tax and Trade Relief 
     Extension Act of 1998 (contained in division J of Public Law 
     105-277)) is amended by striking ``fiscal year 2002 or 2003'' 
     and inserting ``each of fiscal years 2002 and 2003''.
             Subtitle B--Direct Graduate Medical Education

     SEC. 311. USE OF NATIONAL AVERAGE PAYMENT METHODOLOGY IN 
                   COMPUTING DIRECT GRADUATE MEDICAL EDUCATION 
                   (DGME) PAYMENTS.

       Section 1886(h) (42 U.S.C. 1395ww(h)) is amended--
       (1) by amending clause (i) of paragraph (3)(B) to read as 
     follows:
       ``(i)(I) for a cost reporting period beginning before 
     October 1, 2000, the hospital's approved FTE resident amount 
     (determined under paragraph (2)) for that period;
       ``(II) for a cost reporting period beginning on or after 
     October 1, 2000, and before October 1, 2004, the national 
     average per resident amount determined under paragraph (7) 
     or, if greater, the sum of the hospital-specific percentage 
     (as defined in subparagraph (E)) of the hospital's approved 
     FTE resident amount (determined under paragraph (2)) for the 
     period and the national percentage (as defined in such 
     subparagraph) of the national average per resident amount 
     determined under paragraph (7); and
       ``(III) for a cost reporting period beginning on or after 
     October 1, 2004, the national average per resident amount 
     determined under paragraph (7); and'';
       (2) in paragraph (3), by adding at the end the following 
     new subparagraph:
       ``(E) Transition to national average per resident payment 
     system.--For purposes of subparagraph (B)(i)(II), for the 
     cost reporting period of a hospital beginning--
       ``(i) during fiscal year 2001, the hospital-specific 
     percentage is 80 percent and the national percentage is 20 
     percent;
       ``(ii) during fiscal year 2002, the hospital-specific 
     percentage is 60 percent and the national percentage is 40 
     percent;
       ``(iii) during fiscal year 2003, the hospital-specific 
     percentage is 40 percent and the national percentage is 60 
     percent; and
       ``(iv) during fiscal year 2004, the hospital-specific 
     percentage is 20 percent and the national percentage is 80 
     percent.''; and
       (3) by adding at the end the following new paragraph:
       ``(7) National average per resident amount.--The national 
     average per resident amount for a hospital for a cost 
     reporting period beginning in a fiscal year is an amount 
     determined as follows:
       ``(A) Determination of hospital single per resident 
     amount.--The Secretary shall compute for each hospital 
     operating an approved graduate medical education program a 
     single per resident amount equal to the average (weighted by 
     number of full-time equivalent residents) of the primary care 
     per resident amount and the non-primary care per resident 
     amount computed under paragraph (2) for cost reporting 
     periods ending during fiscal year 1997.
       ``(B) Determination of wage and non-wage-related proportion 
     of the single per resident amount.--The Secretary shall 
     estimate the average proportion of the single per resident 
     amounts computed under subparagraph (A) that is attributable 
     to wages and wage-related costs.
       ``(C) Standardizing per resident amounts.--The Secretary 
     shall establish a standardized per resident amount for each 
     such hospital--
       ``(i) by dividing the single per resident amount computed 
     under subparagraph (A) into a wage-related portion and a non-
     wage-related portion by applying the proportion determined 
     under subparagraph (B);
       ``(ii) by dividing the wage-related portion by the factor 
     applied under subsection (d)(3)(E) for discharges occurring 
     during fiscal year 1999 for the hospital's area; and
       ``(iii) by adding the non-wage-related portion to the 
     amount computed under clause (ii).
       ``(D) Determination of national average.--The Secretary 
     shall compute a national average per resident amount equal to 
     the average of the standardized per resident amounts computed 
     under subparagraph (C) for such hospitals, with the amount 
     for each hospital weighted by the average number of full-time 
     equivalent residents at such hospital.
       ``(E) Application to individual hospitals.--The Secretary 
     shall compute for each such hospital a per resident amount--
       ``(i) by dividing the national average per resident amount 
     computed under subparagraph (D) into a wage-related portion 
     and a non-wage-related portion by applying the proportion 
     determined under subparagraph (B);
       ``(ii) by multiplying the wage-related portion by the 
     factor described in subparagraph (C)(ii) for the hospital's 
     area; and
       ``(iii) by adding the non-wage-related portion to the 
     amount computed under clause (ii).

     In applying clause (ii) for a cost reporting period beginning 
     before October 1, 2004, the factor described in such clause 
     shall be deemed to be 1 for a hospital if the national 
     average per resident amount computed under subparagraph (D) 
     is less than the hospital's approved FTE resident amount 
     (determined under paragraph (2)) for the period involved and 
     the factor described in subparagraph (C)(ii) for the 
     hospital's area is less than 1.
       ``(F) Initial updating rate.--The Secretary shall update 
     such per resident amount for the hospital's cost reporting 
     period that begins during fiscal year 2001 for each such 
     hospital by the estimated percentage increase in the consumer 
     price index for all urban consumers during the period 
     beginning October 1997 and ending with the midpoint of the 
     hospital's cost reporting period that begins during fiscal 
     year 2001.
       ``(G) Subsequent updating.--For each subsequent cost 
     reporting period, subject to subparagraph (H), the national 
     average per resident amount for a hospital is equal to the 
     amount determined under this paragraph for the previous cost 
     reporting period updated, through the midpoint of the period, 
     by projecting the estimated percentage change in the consumer 
     price index during the 12-month period ending at that 
     midpoint, with appropriate adjustments to reflect previous 
     under-or over-estimations under this subparagraph in the 
     projected percentage change in the consumer price index.
       ``(H) Transitional budget neutrality adjustment.--
       ``(i) In general.--If the Secretary estimates that, as a 
     result of the amendments made by section 311 of the Medicare, 
     Medicaid, and SCHIP Balanced Budget Refinement Act of 1999, 
     the post-MBBRA expenditures for fiscal year 2005 will be 
     greater or less than the pre-MBBRA expenditures for that 
     fiscal year--

       ``(I) the Secretary shall adjust the update applied under 
     subparagraph (G) in determining the national average per 
     resident amount for cost reporting periods beginning during 
     fiscal year 2005 so that the amount of the post-MBBRA 
     expenditures for those cost reporting periods is equal to the 
     amount of the pre-MBBRA expenditures for such periods; and
       ``(II) the Secretary shall, taking into account the 
     adjustment made under subclause (I), adjust the national 
     average per resident amount, as applied for the portion of a 
     cost reporting period beginning during fiscal year 2004 that 
     occur in fiscal year 2005, so that the amount of the post-
     MBBRA expenditures made during fiscal year 2005 is equal to 
     the amount of the pre-MBBRA expenditures during such fiscal 
     year.

       ``(ii) Definitions.--In this subparagraph:

       ``(I) Aggregate subsection (h)-related expenditures.--The 
     term `aggregate subsection (h)-related expenditures' means, 
     with respect to cost reporting periods beginning during a 
     fiscal year or with respect to a fiscal year, the aggregate 
     expenditures under this title for such periods or fiscal 
     year, respectively, which are attributable to the operation 
     of this subsection.
       ``(II) Pre-mbbra expenditures.--The term `pre-MBBRA 
     expenditures' means aggregate subsection (h)-related 
     expenditures determined as if the amendments made by section 
     311 of the Medicare, Medicaid, and SCHIP Balanced Budget 
     Refinement Act of 1999 had not been enacted.

[[Page H11607]]

       ``(III) Post-mbbra expenditures.--The term `post-MBBRA 
     expenditures' means aggregate subsection (h)-related 
     expenditures determined taking into account the amendments 
     made by section 311 of the Medicare, Medicaid, and SCHIP 
     Balanced Budget Refinement Act of 1999.''.

     SEC. 312. INITIAL RESIDENCY PERIOD FOR CHILD NEUROLOGY 
                   RESIDENCY TRAINING PROGRAMS.

       (a) In General.--Section 1886(h)(5)(F) (42 U.S.C. 
     1395ww(h)(5)(F)) is amended--
       (1) in clause (i) by striking ``clause (ii)'' and inserting 
     ``clause (ii) or (iii)'';
       (2) in clause (i), by striking ``and'' at the end;
       (3) in clause (ii), by striking the period at the end and 
     inserting ``, and''; and
       (4) by inserting after clause (ii), the following new 
     clause:
       ``(iii) a period, of not more than three years, during 
     which an individual is in a child neurology residency 
     program, shall be treated as part of the initial residency 
     period, but shall not be counted against any limitation on 
     the initial residency period.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     apply on and after July 1, 2000, to residency programs that 
     began before, on, or after the date of the enactment of this 
     Act.
       (c) MedPAC Report.--The Medicare Payment Advisory 
     Commission shall include in its report submitted to Congress 
     in March of 2001 recommendations on whether there should be 
     an extension of the initial residency period under section 
     1886(h)(5)(F) of the Social Security Act (42 U.S.C. 
     1395ww(h)(5)(F)) for other residency training programs in a 
     specialty requiring preliminary years of study in another 
     specialty.
                           Subtitle C--Other

     SEC. 321. GAO STUDY ON GEOGRAPHIC RECLASSIFICATION.

       (a) In General.--The Comptroller General of the United 
     States shall conduct a study of the current laws and 
     regulations for geographic reclassification of hospitals to 
     determine whether such reclassification is appropriate for 
     purposes of applying wage indices under the medicare program 
     and whether it results in more accurate payments for all 
     hospitals. Such study shall examine data on the number of 
     hospitals that are reclassified and their special designation 
     status in determining payments under the medicare program. 
     The study shall evaluate--
       (1) the magnitude of the effect of geographic 
     reclassification on rural hospitals that do not reclassify;
       (2) whether the current thresholds used in geographic 
     reclassification reclassify hospitals to the appropriate 
     labor markets;
       (3) the effect of eliminating geographic reclassification 
     through use of the occupational mix data;
       (4) the group reclassification policy;
       (5) changes in the number of reclassifications and the 
     compositions of the groups;
       (6) the effect of State-specific budget neutrality compared 
     to national budget neutrality; and
       (7) whether there are sufficient controls over the 
     intermediary evaluation of the wage data reported by 
     hospitals.
       (b) Report.--Not later than 18 months after the date of 
     enactment of this Act, the Comptroller General of the United 
     States shall submit to Congress a report on the study 
     conducted under subsection (a).

     SEC. 322. MEDPAC STUDY ON MEDICARE PAYMENT FOR NON-PHYSICIAN 
                   HEALTH PROFESSIONAL CLINICAL TRAINING IN 
                   HOSPITALS.

       (a) In General.--The Medicare Payment Advisory Commission 
     shall conduct a study on medicare payment policy with respect 
     to professional clinical training of different classes of 
     non-physician health care professionals (such as nurses,nurse 
     practitioners, allied health professionals, physician 
     assistants, and psychologists) and the basis for any 
     differences in treatment among such classes.
       (b) Report.--The Commission shall submit a report to 
     Congress on the study conducted under subsection (a) not 
     later than 18 months after the date of the enactment of this 
     Act.
                  TITLE IV--RURAL PROVIDER PROVISIONS

     SEC. 401. PERMITTING RECLASSIFICATION OF CERTAIN URBAN 
                   HOSPITALS AS RURAL HOSPITALS.

       (a) In General.--Section 1886(d)(8) (42 U.S.C. 
     1395ww(d)(8)) is amended by adding at the end the following 
     new subparagraph:
       ``(E)(i) For purposes of this subsection, not later than 60 
     days after the receipt of an application from a subsection 
     (d) hospital described in clause (ii), the Secretary shall 
     treat the hospital as being located in the rural area (as 
     defined in such paragraph (2)(D)) of the State in which the 
     hospital is located.
       ``(ii) For purposes of clause (i), a subsection (d) 
     hospital described in this clause is a subsection (d) 
     hospital that is located in an urban area (as defined in 
     paragraph (2)(D)) and satisfies any of the following 
     criteria:
       ``(I) The hospital is located in a rural census tract of a 
     metropolitan statistical area (as determined under the 
     Goldsmith Modification, as published in the Federal Register 
     on February 27, 1992 (57 FR 6725)).
       ``(II) The hospital is located in an area designated by any 
     law or regulation of such State as a rural area (or is 
     designated by such State as a rural hospital).
       ``(III) The hospital would qualify as a rural or regional 
     or national referral center under paragraph (5)(C) or as a 
     sole community hospital under paragraph (5)(D) if the 
     hospital were located in a rural area.
       ``(IV) The hospital meets such other criteria as the 
     Secretary may specify.''.
       (b) Conforming Changes.--(1) Section 1833(t) (42 U.S.C. 
     1395l(t)), as amended by sections 211 and 212, is further 
     amended by adding at the end the following new paragraph:
       ``(13) Miscellaneous provisions.--
       ``(A) Application of reclassification of certain 
     hospitals.--If a hospital is being treated as being located a 
     rural under section 1886(d)(8)(E), that hospital shall be 
     treated under this subsection as being located in that rural 
     area.''.
       (2) Section 1820(c)(2)(B)(i) (42 U.S.C. 1395i-
     4(c)(2)(B)(i)) is amended by inserting ``or is treated as 
     being located in a rural area pursuant to section 
     1886(d)(8)(E)'' after ``section 1886(d)(2)(D))''.
       (c) Effective Date.--The amendments made by this section 
     shall become effective on January 1, 2000.

     SEC. 402. UPDATE OF STANDARDS APPLIED FOR GEOGRAPHIC 
                   RECLASSIFICATION FOR CERTAIN HOSPITALS.

       (a) In General.--Section 1886(d)(8)(B) (42 U.S.C. 
     1395ww(d)(8)(B)) is amended--
       (1) by inserting ``(i)'' after ``(B)'';
       (2) by striking ``published in the Federal Register on 
     January 3, 1980'' and inserting ``described in clause (ii)''; 
     and
       (3) by adding at the end the following new clause:
       ``(ii) The standards described in this clause for cost 
     reporting periods beginning in a fiscal year--
       ``(I) before fiscal year 2003, are the standards published 
     in the Federal Register on January 3, 1980, or, at the 
     election of the hospital with respect to fiscal years 2001 
     and 2002, standards so published on March 30, 1990; and
       ``(II) after fiscal year 2002, are the standards published 
     in the Federal Register by the Director of the Office of 
     Management and Budget based on the most recent available 
     decennial population data.
     Subparagraphs (C) and (D) shall not apply with respect to the 
     application of subclause (I).''.
       (b) Effective Date.--The amendments made by subsection (a) 
     apply with respect to discharges occurring during cost 
     reporting periods beginning on or after October 1, 1999.

     SEC. 403. IMPROVEMENTS IN THE CRITICAL ACCESS HOSPITAL (CAH) 
                   PROGRAM.

       (a) Applying 96-Hour Limit on a Average Annual Basis.--
       (1) In general.--Section 1820(c)(2)(B)(iii) (42 U.S.C. 
     1395i-4(c)(2)(B)(iii)), as added by section 4201(a) of BBA, 
     is amended by striking ``for a period not to exceed 96 
     hours'' and all that follows and inserting ``for a period 
     that does not exceed, as determined on an annual, average 
     basis, 96 hours per patient;''.
       (2) Effective date.--The amendment made by paragraph (1) 
     takes effect on the date of the enactment of this Act.
       (b) Permitting For-Profit Hospitals to Qualify for 
     Designation as a Critical Access Hospital.--Section 
     1820(c)(2)(B)(i) (42 U.S.C. 1395i-4(c)(2)(B)(i)), as added by 
     section 4201(a) of BBA, is amended in the matter preceding 
     subclause (I), by striking ``nonprofit or public hospital'' 
     and inserting ``hospital''.
       (c) Allowing Closed or Downsized Hospitals To Convert to 
     Critical Access Hospitals.--Section 1820(c)(2) (42 U.S.C. 
     1395i-4(c)(2)), as added by section 4201(a) of BBA, is 
     amended--
       (1) in subparagraph (A), by striking ``subparagraph (B)'' 
     and inserting ``subparagraphs (B), (C), and (D)''; and
       (2) by adding at the end the following new subparagraphs:
       ``(C) Recently closed facilities.--A State may designate a 
     facility as a critical access hospital if the facility--
       ``(i) was a hospital that ceased operations on or after the 
     date that is 10 years before the date of enactment of this 
     subparagraph; and
       ``(ii) as of the effective date of such designation, meets 
     the criteria for designation under subparagraph (B).
       ``(D) Downsized facilities.--A State may designate a health 
     clinic or a health center (as defined by the State) as a 
     critical access hospital if such clinic or center--
       ``(i) is licensed by the State as a health clinic or a 
     health center;
       ``(ii) was a hospital that was downsized to a health clinic 
     or health center; and
       ``(iii) as of the effective date of such designation, meets 
     the criteria for designation under subparagraph (B).''.
       (d) All-Inclusive Payment Option for Outpatient Critical 
     Access Hospital Services.--
       (1) In general.--Section 1834(g) (42 U.S.C. 1395m(g)), as 
     added by section 4201(c)(5) of BBA, is amended to read as 
     follows:
       ``(g) Payment for Outpatient Critical Access Hospital 
     Services.--
       ``(1) Election of cah.--At the election of a critical 
     access hospital, the amount of payment for outpatient 
     critical access hospital services under this part shall be 
     determined under paragraph (2) or (3), such amount determined 
     under either paragraph without regard to the amount of the 
     customary or other charge.
       ``(2) Cost-based hospital outpatient service payment plus 
     fee schedule for professional services.--If a hospital elects 
     this paragraph to apply, there shall be paid amounts equal to 
     the sum of the following, less the amount that such hospital 
     may charge as described in section 1866(a)(2)(A):
       ``(A) Facility fee.--With respect to facility services, not 
     including any services for

[[Page H11608]]

     which payment may be made under subparagraph (B), the 
     reasonable costs of the critical access hospital in providing 
     such services.
       ``(B) Fee schedule for professional services.--With respect 
     to professional services otherwise included within outpatient 
     critical access hospital services, such amounts as would 
     otherwise be paid under this part if such services were not 
     included in outpatient critical access hospital services.
       ``(3) All-inclusive rate.--If a hospital elects this 
     paragraph to apply, with respect to both facility services 
     and professional services, there shall be paid amounts equal 
     to the reasonable costs of the critical access hospital in 
     providing such services, less the amount that such hospital 
     may charge as described in section 1866(a)(2)(A).''.
       (2) Effective date.--The amendment made by subsection (a) 
     shall apply for cost reporting periods beginning on or after 
     October 1, 1999.
       (e) Elimination of Coinsurance for Clinical Diagnostic 
     Laboratory Tests Furnished by a Critical Access Hospital on 
     an Outpatient Basis.--
       (1) In general.--Section 1833(a)(1)(D) (42 U.S.C. 
     1395l(a)(1)(D)) is amended by inserting ``or which are 
     furnished on an outpatient basis by a critical access 
     hospital'' after ``on an assignment-related basis''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to services furnished on or after the date of the 
     enactment of this Act.
       (f) Participation in Swing Bed Program.--Section 1883 (42 
     U.S.C. 1395tt) is amended--
       (1) in subsection (a)(1), by striking ``(other than a 
     hospital which has in effect a waiver under subparagraph (A) 
     of the last sentence of section 1861(e))''; and
       (2) in subsection (c), by striking ``, or during which 
     there is in effect for the hospital a waiver under 
     subparagraph (A) of the last sentence of section 1861(e)''.

     SEC. 404. 5-YEAR EXTENSION OF MEDICARE DEPENDENT HOSPITAL 
                   (MDH) PROGRAM.

       (a) Extension of Payment Methodology.--Section 
     1886(d)(5)(G) (42 U.S.C. 1395ww(d)(5)(G)), as amended by 
     section 4204(a)(1) of BBA, is amended--
       (1) in clause (i), by striking ``and before October 1, 
     2001,'' and inserting ``and before October 1, 2006''; and
       (2) in clause (ii)(II), by striking ``and before October 1, 
     2001,'' and inserting ``and before October 1, 2006''.
       (b) Conforming Amendments.--
       (1) Extension of target amount.--Section 1886(b)(3)(D) (42 
     U.S.C. 1395ww(b)(3)(D)), as amended by section 4204(a)(2) of 
     BBA, is amended--
       (A) in the matter preceding clause (i), by striking ``and 
     before October 1, 2001,'' and inserting ``and before October 
     1, 2006''; and
       (B) in clause (iv), by striking ``during fiscal year 1998 
     through fiscal year 2000'' and inserting ``during fiscal year 
     1998 through fiscal year 2005''.
       (2) Permitting hospitals to decline reclassification.--
     Section 13501(e)(2) of Omnibus Budget Reconciliation Act of 
     1993 (42 U.S.C. 1395ww note), as amended by section 
     4204(a)(3) of BBA, is amended by striking ``or fiscal year 
     2000'' and inserting ``or fiscal year 2000 through fiscal 
     year 2005''.

     SEC. 405. REBASING FOR CERTAIN SOLE COMMUNITY HOSPITALS.

       Section 1886(b)(3) (42 U.S.C. 1395ww(b)(3)), as amended by 
     sections 4413 and 4414 of BBA, is amended--
       (1) in subparagraph (C), by inserting ``subject to 
     subparagraph (I)'' before ``the term `target amount' means''; 
     and
       (2) by adding at the end the following new subparagraph:
       ``(I)(i) For cost reporting periods beginning on or after 
     October 1, 2000, in the case of a sole community hospital 
     that for its cost reporting period beginning during 1999 is 
     paid on the basis of the target amount applicable to the 
     hospital under subparagraph (C) and that elects (in a form 
     and manner determined by the Secretary) this subparagraph to 
     apply to the hospital, there shall be substituted for the 
     base cost reporting period described in subparagraph (C) the 
     rebased target amount determined under this subparagraph.
       ``(ii) For purposes of clause (i), the rebased target 
     amount applicable to a hospital making an election under this 
     subparagraph is equal to the sum of the following:
       ``(I) With respect to discharges occurring in fiscal year 
     2001, 75 percent of the target amount applicable to the 
     hospital under subparagraph (C) (hereinafter in this 
     subparagraph referred to as the `subparagraph (C) target 
     amount') and 25 percent of the amount of 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 (hereinafter in this subparagraph 
     referred to as the `rebased target amount'), increased by the 
     applicable percentage increase under subparagraph (B)(iv).
       ``(II) With respect to discharges occurring in fiscal year 
     2002, 50 percent of the subparagraph (C) target amount and 50 
     percent of the rebased target amount, increased by the 
     applicable percentage increase under subparagraph (B)(iv).
       ``(III) With respect to discharges occurring in fiscal year 
     2003, 25 percent of the subparagraph (C) target amount and 75 
     percent of the rebased target amount, increased by the 
     applicable percentage increase under subparagraph (B)(iv).
       ``(IV) With respect to discharges occurring in fiscal year 
     2003 or any subsequent fiscal year, 100 percent of the 
     rebased target amount, increased by the applicable percentage 
     increase under subparagraph (B)(iv).''.

     SEC. 406. INCREASED FLEXIBILITY IN PROVIDING GRADUATE 
                   PHYSICIAN TRAINING IN RURAL AREAS.

       (a) Permitting 30 Percent Expansion in Current GME Training 
     Programs for Hospitals Located in Rural Areas.--
       (1) Payment for direct graduate medical education costs.--
     Section 1886(h)(4)(F) (42 U.S.C. 1395ww(h)(4)(F)), as added 
     by section 4623 of BBA, is amended by inserting ``(or, 130 
     percent of such number in the case of a hospital located in a 
     rural area)'' after ``may not exceed the number''.
       (2) Payment for indirect graduate medical education 
     costs.--Section 1886(d)(5)(B)(v) (42 U.S.C. 
     1395ww(d)(5)(B)(v)), as added by section 4621(b)(1) of BBA, 
     is amended by inserting ``(or, 130 percent of such number in 
     the case of a hospital located in a rural area)'' after ``may 
     not exceed the number''.
       (3) Effective dates.--(A) The amendment made by paragraph 
     (1) applies to cost reporting periods beginning on or after 
     October 1, 1999.
       (B) The amendment made by paragraph (2) applies to 
     discharges occurring on or after October 1, 1999.
       (b) Special Rule for Non-Rural Facilities Serving Rural 
     Areas.--
       (1) In general.--Section 1886(h)(4)(H) (42 U.S.C. 
     1395ww(h)(4)(H)), as added by section 4623 of BBA, is amended 
     by adding at the end the following new clause:
       ``(iv) Non-rural hospitals operating training programs in 
     underserved rural areas.--In the case of a hospital that is 
     not located in a rural area but establishes separately 
     accredited approved medical residency training programs (or 
     rural tracks) in an underserved rural area or has an 
     accredited training program with an integrated rural track, 
     the Secretary shall adjust the limitation under subparagraph 
     (F) in an appropriate manner insofar as it applies to such 
     programs in such underserved rural areas in order to 
     encourage the training of physicians in underserved rural 
     areas.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     applies with respect to--
       (A) payments to hospitals under section 1886(h) of the 
     Social Security Act (42 U.S.C. 1395ww(h)) for cost reporting 
     periods beginning on or after October 1, 1999; and
       (B) payments to hospitals under section 1886(d)(5)(B)(v) of 
     such Act (42 U.S.C. 1395ww(d)(5)(B)(v)) for discharges 
     occurring on or after October 1, 1999.

     SEC. 407. ELIMINATION OF CERTAIN RESTRICTIONS WITH RESPECT TO 
                   HOSPITAL SWING BED PROGRAM.

       (a) Elimination of Requirement for State Certificate of 
     Need.--Section 1883(b) (42 U.S.C. 1395tt(b)) is amended to 
     read as follows:
       ``(b) The Secretary may not enter into an agreement under 
     this section with any hospital unless, except as provided 
     under subsection (g), the hospital is located in a rural area 
     and has less than 100 beds.''.
       (b) Elimination of Swing Bed Restrictions on Certain 
     Hospitals with More than 49 Beds.--Section 1883(d) (42 U.S.C. 
     1395tt(d)) is amended--
       (1) by striking paragraphs (2) and (3); and
       (2) by striking ``(d)(1)'' and inserting ``(d)''.
       (c) Effective Date.--The amendments made by this section 
     take effect on the date that is the first day after the 
     expiration of the transition period under section 
     1888(e)(2)(E) of the Social Security Act (42 U.S.C. 
     1395yy(e)(2)(E)), as added by section 4432(a) of BBA, for 
     payments for covered skilled nursing facility services under 
     the medicare program.

     SEC. 408. GRANT PROGRAM FOR RURAL HOSPITAL TRANSITION TO 
                   PROSPECTIVE PAYMENT.

       Section 1820(g) (42 U.S.C. 1395i-4(g)), as added by section 
     4201(a) of BBA, is amended by adding at the end the following 
     new paragraph:
       ``(3) Upgrading data systems.--
       ``(A) Grants to hospitals.--The Secretary may award grants 
     to hospitals that have submitted applications in accordance 
     with subparagraph (C) to assist eligible small rural 
     hospitals in meeting the costs of implementing data systems 
     required to meet requirements established under the medicare 
     program pursuant to amendments made by the Balanced Budget 
     Act of 1997.
       ``(B) Eligible small rural hospital defined.--For purposes 
     of this paragraph, the term `eligible small rural hospital' 
     means a non-Federal, short-term general acute care hospital 
     that--
       ``(i) is located in a rural area (as defined for purposes 
     of section 1886(d)); and
       ``(ii) has less than 50 beds.
       ``(C) Application.--A hospital seeking a grant under this 
     paragraph shall submit an application to the Secretary on or 
     before such date and in such form and manner as the Secretary 
     specifies.
       ``(D) Amount of grant.--A grant to a hospital under this 
     paragraph may not exceed $50,000.
       ``(E) Use of funds.--A hospital receiving a grant under 
     this paragraph may use the funds for the purchase of computer 
     software and hardware and for the education and training of 
     hospital staff on computer information systems and costs 
     related to the implementation of prospective payment systems.

[[Page H11609]]

       ``(F) Report.--
       ``(i) Information.--A hospital receiving a grant under this 
     section shall furnish the Secretary with such information as 
     the Secretary may require to evaluate the project for which 
     the grant is made and to ensure that the grant is expended 
     for the purposes for which it is made.
       ``(ii) Reporting.--

       ``(I) Interim reports.--The Secretary shall report to the 
     Committee on Ways and Means of the House of Representatives 
     and the Committee on Finance of the Senate at least annually 
     on the grant program established under this section, 
     including in such report information on the number of grants 
     made, the nature of the projects involved, the geographic 
     distribution of grant recipients, and such other matters as 
     the Secretary deems appropriate.
       ``(II) Final report.--The Secretary shall submit a final 
     report to such committees not later than 180 days after the 
     completion of all of the projects for which a grant is made 
     under this section.''.

     SEC. 409. MEDPAC STUDY OF RURAL PROVIDERS.

       (a) Study.--The Medicare Payment Advisory Commission shall 
     conduct a study on rural providers furnishing items and 
     services for which payment is made under title XVIII of the 
     Social Security Act. Such study shall examine and evaluate 
     the adequacy and appropriateness of the categories of special 
     payments (and payment methodologies) established for rural 
     hospitals under the medicare program, and their impact on 
     beneficiary access and quality of health care services.
       (b) Report.--By not later than 18 months after the date of 
     the enactment of this Act, the Medicare Payment Advisory 
     Commission shall submit to Congress a report on the study 
     conducted under subsection (a).

     SEC. 410. EXPANSION OF ACCESS TO PARAMEDIC INTERCEPT SERVICES 
                   IN RURAL AREAS.

       (a) Expansion of Payment Areas.--Section 4531(c) of BBA (42 
     U.S.C. 1395x(s)(7) note, 111 Stat. 452) is amended by adding 
     at the end the following flush sentence:

     ``For purposes of this subsection, an area shall be treated 
     as a rural area if it is designated as a rural area by any 
     law or regulation of the State or if it is located in a rural 
     census tract of a metropolitan statistical area (as 
     determined under the Goldsmith Modification, as published in 
     the Federal Register on February 27, 1992 (57 FR 6725)).''.
       (b) Effective Date.--The amendment made by subsection (a) 
     takes effect on January 1, 2000, and applies to paramedic 
     intercept services furnished on or after such date.
    TITLE V--PROVISIONS RELATING TO PART C (MEDICARE+CHOICE PROGRAM)
                      Subtitle A--Medicare+Choice

     SEC. 501. PHASE-IN OF NEW RISK ADJUSTMENT METHODOLOGY.

       Section 1853(a)(3)(C) (42 U.S.C. 1395w-23(a)(3)(C)) is 
     amended--
       (1) by redesignating the first sentence as clause (i) with 
     the heading ``In general.--'' and appropriate indentation; 
     and
       (2) by adding at the end the following new clause:
       ``(ii) Phase-in.--Such risk adjustment methodology shall be 
     implemented in a phased-in manner so that the methodology 
     insofar as it makes adjustments for health status based on 
     clinical data applies to--

       ``(I) not more than 10 percent of the payment amount in 
     2000 and 2001;
       ``(II) not more than 20 percent of such amount in 2002;
       ``(III) not more than 30 percent of such amount in 2003; 
     and
       ``(IV) 100 percent of such amount in any subsequent year 
     (at which time the risk adjustment methodology should reflect 
     data from multiple settings).''.

     SEC. 502. ENCOURAGING OFFERING OF MEDICARE+CHOICE PLANS IN 
                   AREAS WITHOUT PLANS.

       Section 1853 (42 U.S.C. 1395w-23) is amended--
       (1) in subsection (a)(1), by striking ``subsections (e) and 
     (f)'' and inserting ``subsections (e), (g), and (i)'';
       (2) in subsection (c)(5), by inserting ``(other than those 
     attributable to subsection (i))'' after ``payments under this 
     part''; and
       (3) by adding at the end the following new subsection:
       ``(i) New Entry Bonus.--
       ``(1) In general.--Subject to paragraphs (2) and (3), in 
     the case of Medicare+Choice payment area in which a 
     Medicare+Choice plan has not been offered since 1997 (or in 
     which all organizations that offered a plan since such date 
     have filed notice with the Secretary, as of October 13, 1999, 
     that they will not be offering such a plan as of January 1, 
     2000), the amount of the monthly payment otherwise made under 
     this subsection shall be increased--
       ``(A) only for the first 12 months in which any 
     Medicare+Choice plan is offered in the area, by 5 percent of 
     the total monthly payment otherwise computed for such payment 
     area; and
       ``(B) only for the subsequent 12 months, by 3 percent of 
     the total monthly payment otherwise computed for such payment 
     area.
       ``(2) Period of application.--Paragraph (1) shall only 
     apply to payment for Medicare+Choice plans which are first 
     offered in a Medicare+Choice payment area during the 2-year 
     period beginning with January 1, 2000.
       ``(3) Limitation to organization offering first plan in an 
     area.--Paragraph (1) shall only apply to payment to the first 
     Medicare+Choice organization that offers a Medicare+Choice 
     plan in each Medicare+Choice payment area, except that if 
     more than one such organization first offers such a plan in 
     an area on the same date, paragraph (1) shall apply to 
     payment for such organizations.
       ``(4) Construction.--Nothing in paragraph (1) shall be 
     construed as affecting the calculation of the annual 
     Medicare+Choice capitation rate for any payment area under 
     subsection (c) or as applying to payment for any period not 
     described in such paragraph.
       ``(5) Offered defined.--In this subsection, the term 
     `offered' means, with respect to a Medicare+Choice plan as of 
     a date, that a Medicare+Choice eligible individual may enroll 
     with the plan on that date, regardless of when the enrollment 
     takes effect or the individual obtain benefits under the 
     plan.''.

     SEC. 503. MODIFICATION OF 5-YEAR RE-ENTRY RULE FOR CONTRACT 
                   TERMINATIONS.

       (a) In General.--Section 1857(c)(4) (42 U.S.C. 1395w-
     27(c)(4)) is amended--
       (1) by inserting ``as provided in paragraph (2) and 
     except'' after ``except'';
       (2) by redesignating the first sentence as a subparagraph 
     (A) with an appropriate indentation and the heading ``In 
     general.--''; and
       (3) by adding at the end the following new subparagraph:
       ``(B) Earlier re-entry permitted where change in payment 
     policy and no more than one other plan available.--
     Subparagraph (A) shall not apply with respect to the offering 
     by a Medicare+Choice organization of a Medicare+Choice plan 
     in a Medicare+Choice payment area if--
       ``(i) during the 6-month period beginning on the date the 
     organization notified the Secretary of the intention to 
     terminate the most recent previous contract, there was a 
     legislative change enacted (or a regulatory change adopted) 
     that has the effect of increasing payment rates under section 
     1853 for that Medicare+Choice payment area; and
       ``(ii) at the time the organization notifies the Secretary 
     of its intent to enter into a contract to offer such a plan 
     in the area, there is no more than one Medicare+Choice plan 
     offered in the area.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply to contract terminations occurring before, on, or 
     after the date of the enactment of this Act.

     SEC. 504. CONTINUED COMPUTATION AND PUBLICATION OF AAPCC 
                   DATA.

       (a) In General.--Section 1853(b) (42 U.S.C. 1395w-23(b)) is 
     amended by adding at the end the following new paragraph:
       ``(4) Continued computation and publication of county-
     specific per capita fee-for-service expenditure 
     information.--The Secretary, through the Chief Actuary of the 
     Health Care Financing Administration, shall provide for the 
     computation and publication, on an annual basis at the time 
     of publication of the annual Medicare+Choice capitation 
     rates, of information on the level of the average annual per 
     capita costs (described in section 1876(a)(4)) for each 
     Medicare+Choice payment area.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on the date of the enactment of this Act 
     and apply to publications of the annual Medicare+Choice 
     capitation rates made on or after such date.

     SEC. 505. CHANGES IN MEDICARE+CHOICE ENROLLMENT RULES.

       (a) Permitting Enrollment in Alternative Medicare+Choice 
     Plans and Medigap Coverage in Case of Involuntary Termination 
     of Medicare+Choice Enrollment.--
       (1) In general.--Section 1851(e)(4) (42 U.S.C. 1395w-
     21(e)(4)) is amended by striking subparagraph (A) and 
     inserting the following:
       ``(A)(i) the certification of the organization or plan 
     under this part has been terminated, or the organization or 
     plan has notified the individual or the Secretary of an 
     impending termination of such certification; or
       ``(ii) the organization has terminated or otherwise 
     discontinued providing the plan in the area in which the 
     individual resides, or has notified the individual or 
     Secretary of an impending termination or discontinuation of 
     such plan;''.
       (2) Conforming medigap amendment.--Section 1882(s)(3) (42 
     U.S.C. 1395ss(s)(3)) is amended--
       (A) in subparagraph (A), by inserting ``, subject to 
     subparagraph (E),'' after ``in the case of an individual 
     described in subparagraph (B) who''; and
       (B) by adding at the end the following new subparagraph:
       ``(E)(i) An individual described in subparagraph (B)(ii) 
     may elect to apply subparagraph (A) by substituting, for the 
     date of termination of enrollment, the date on which the 
     individual or Secretary was notified by the Medicare+Choice 
     organization of the impending termination or discontinuance 
     of the Medicare+Choice plan in the area in which the 
     individual resides, but only if the individual disenrolls 
     from the plan as a result of such notification.
       ``(ii) In the case of an individual making such an 
     election, the issuer involved shall accept the application of 
     the individual submitted before the date of termination of 
     enrollment, but the coverage under subparagraph (A) shall 
     only become effective upon termination of coverage under the 
     Medicare+Choice plan involved.''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to notices of impending terminations or

[[Page H11610]]

     discontinuances made on or after the date of the enactment of 
     this Act.
       (b) Continuous Open Enrollment for Institutionalized 
     Individuals.--Section 1851(e)(2) (42 U.S.C. 1395w-21(e)(2)) 
     is amended--
       (1) in subparagraph (B)(i), by inserting ``and subparagraph 
     (D)'' after ``clause (ii)'';
       (2) in subparagraph (C)(i), by inserting ``and subparagraph 
     (D)'' after ``clause (ii)''; and
       (3) by adding at the end the following new subparagraph:
       ``(D) Continuous open enrollment for institutionalized 
     individuals.--At any time after 2001 in the case of a 
     Medicare+Choice eligible individual who is institutionalized, 
     the individual may change the election under subsection 
     (a)(1).''.
       (c) Continuing Enrollment for Certain Enrollees.--Section 
     1851(b)(1) (42 U.S.C. 1395w-21(b)(1)) is amended--
       (1) in subparagraph (A), by inserting ``and except as 
     provided in subparagraph (C)'' after ``may otherwise 
     provide''; and
       (2) by adding at the end the following new subparagraph:
       ``(C) Continuation of enrollment permitted where service 
     changed.--Notwithstanding subparagraph (B), if a 
     Medicare+Choice organization eliminates from its service area 
     a geographic area that was previously within its service 
     area, the organization may elect to offer individuals 
     residing in all or portions of the affected geographic area 
     who would otherwise be ineligible to continue enrollment the 
     option to continue enrollment in a Medicare+Choice plan it 
     offers so long as--
       ``(i) the enrollee agrees to receive the full range of 
     basic benefits (excluding emergency and urgently needed care) 
     exclusively at facilities designated by the organization 
     within the plan service area; and
       ``(ii) there is no other Medicare+Choice plan offered in 
     the area in which the enrollee resides at the time of the 
     organization's election.''.
       (d) Effective Date.--The amendments made by subsection (b) 
     and (c) apply as if included in the enactment of BBA and the 
     amendments made by subsection (c) apply to eliminations of 
     geographic areas from a service area that occur before, on, 
     or after the date of the enactment of this Act.

     SEC. 506. ALLOWING VARIATION IN PREMIUM WAIVERS WITHIN A 
                   SERVICE AREA IF MEDICARE+CHOICE PAYMENT RATES 
                   VARY WITHIN THE AREA.

       (a) In General.--Section 1854(c) (42 U.S.C. 1395w-24(c)) is 
     amended--
       (1) by striking ``The'' and inserting ``Subject to 
     paragraph (2), the'';
       (2) by redesignating the first sentence as a paragraph (1) 
     with an appropriate indentation and the heading ``In 
     general.--''; and
       (3) by adding at the end the following new paragraph:
       ``(2) Variation in premium waiver permitted.--A 
     Medicare+Choice organization may waive part or all of a 
     premium described in paragraph (1) for one or more 
     Medicare+Choice payment areas within its service area if the 
     annual Medicare+Choice capitation rates under section 1853(c) 
     vary between such payment area and other payment areas within 
     such service area.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     apply to premiums for contract years beginning on or after 
     January 1, 2001.

     SEC. 507. DELAY IN DEADLINE FOR SUBMISSION OF ADJUSTED 
                   COMMUNITY RATES AND RELATED INFORMATION.

       (a) Delay in Deadline for Submission of Adjusted Community 
     Rates and Related Information.--Section 1854(a)(1) (42 U.S.C. 
     1395w-24(a)(1)) is amended by striking ``May 1'' and 
     inserting ``July 1''.
       (b) Adjustment in Information Disclosure Provisions.--
     Section 1851(d)(2)(A)(ii) (42 U.S.C. 1395w-21(d)(2)(A)(ii)) 
     is amended by inserting after ``information described in 
     paragraph (4) concerning such plans'' the following: ``, to 
     the extent such information is available at the time of 
     preparation of the material for mailing''.
       (c) Effective Date.--The amendments made by this section 
     apply with respect to information submitted by 
     Medicare+Choice organizations (and provided to beneficiaries) 
     for years beginning with 1999.

     SEC. 508. 2 YEAR EXTENSION OF MEDICARE COST CONTRACTS.

       Section 1876(h)(5)(B) (42 U.S.C. 1395mm(h)(5)(B)) is 
     amended by striking ``2002'' and inserting ``2004''.

     SEC. 509. MEDICARE+CHOICE NURSING AND ALLIED HEALTH 
                   PROFESSIONAL EDUCATION PAYMENTS.

       Section 1886(d)(11) (42 U.S.C. 1395ww(d)(11)) is amended--
       (1) in subparagraph (A)--
       (A) by designating the portion following ``In general.--'' 
     as a clause (i) with the heading ``Graduate medical 
     training.--'' and appropriate indentation; and
       (B) by adding at the end the following new clause:
       ``(ii) Nursing and allied health training.--For portions of 
     cost reporting periods occurring on or after January 1, 2000, 
     the Secretary shall provide for an additional payment amount 
     for each applicable discharge of any subsection (d) hospital 
     that has direct costs of approved education activities for 
     nurse and allied health professional training.'';
       (2) in subparagraph (C)--
       (A) designating the portion following ``Determination of 
     amount.--'' as a clause (i) with the heading ``Graduate 
     medical training.--'' and appropriate indentation;
       (B) by striking ``under this paragraph'' and inserting 
     ``under subparagraph (A)(i)'';
       (C) by inserting ``the DGME portion (as defined in clause 
     (iii)) of'' after ``shall be equal to''; and
       (D) by adding at the end the following new clauses:
       ``(ii) Nursing and allied health training.--The amount of 
     the payment under subparagraph (A)(ii) with respect to any 
     applicable discharge shall be equal to an amount specified by 
     the Secretary in a manner consistent with the following:

       ``(I) The total payments under such subparagraph in a year 
     shall bear the same ratio to the Secretary's estimate of the 
     total payments under subparagraph (A)(i) in the year as the 
     ratio (as estimated by the Secretary) of the total payments 
     under this title for direct costs described in subparagraph 
     (A)(ii) in the year bear to the total payments under section 
     1886(h) in the year; but in no case shall the total payments 
     under subparagraph (A)(ii) exceed $60,000,000 in a year.
       ``(II) The payments to different hospitals are proportional 
     to the direct costs of each hospital described in 
     subparagraph (A)(ii).

       ``(iii) DGME portion defined.--For purposes of this 
     subparagraph, the `DGME portion' means, for a year, the ratio 
     of--

       ``(I) the amount by which (aa) the Secretary's estimate of 
     the total additional payments that would be payable under 
     this paragraph for the year if subparagraph (A)(ii) and 
     clause (ii) of this subparagraph did not apply, exceeds (bb) 
     the total payments in the year under subparagraph (A)(ii); to
       ``(II) the total additional payments estimated under 
     subclause (I)(aa) for the year.''.

     SEC. 510. REDUCTION IN ADJUSTMENT IN NATIONAL PER CAPITA 
                   MEDICARE+CHOICE GROWTH PERCENTAGE FOR 2002.

       Section 1853(c)(6)(B)(iv) (42 U.S.C. 1395w-23(c)(6)(B)(iv)) 
     is amended by striking ``0.5 percentage points'' and 
     inserting ``0.3 percentage points''.

     SEC. 511. DEEMING OF MEDICARE+CHOICE ORGANIZATION TO MEET 
                   REQUIREMENTS.

       Section 1852(e)(4) (42 U.S.C. 1395w-22(e)(4)) is amended to 
     read as follows:
       ``(4) Treatment of accreditation.--The Secretary shall 
     provide that a Medicare+Choice organization is deemed to meet 
     requirements of paragraphs (1) and (2) 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 accrediting 
     organization under a process that the Secretary has 
     determined assures that the accrediting organization applies 
     standards that meet or exceed the standards established under 
     section 1856 to carry out the respective requirements. The 
     Secretary shall determine, within 210 days after the date the 
     Secretary receives an application by a private accrediting 
     organization, whether the process of the private accrediting 
     organization meets the requirements of the preceding sentence 
     using the criteria specified in section 1865(b)(2). The 
     Secretary shall, using the process described in section 
     1865(b), deem a Medicare+Choice organization that is so 
     accredited as meeting the requirements of paragraphs (1) and 
     (2) of this subsection and subsection (h).''

     SEC. 512. MISCELLANEOUS CHANGES AND STUDIES.

       (a) Permitting Religious Fraternal Benefit Societies To 
     Offer a Range of Medicare+Choice Plans.--Section 1859(e)(2) 
     (42 U.S.C. 1395w-29(e)(2)) is amended in the matter preceding 
     subparagraph (A) by striking ``section 1851(a)(2)(A)'' and 
     inserting ``section 1851(a)(2)''.
       (b) Study of Accounting for VA and DOD Expenditures for 
     Medicare Beneficiaries.--The Secretary of Health and Human 
     Services, jointly with the Secretaries of Defense and of 
     Veterans Affairs, shall submit to Congress not later than 1 
     year after the date of the enactment of this Act a report on 
     the estimated use of health care services furnished by the 
     Departments of Defense and of Veterans Affairs to medicare 
     beneficiaries, including both beneficiaries under the 
     original medicare fee-for-service program and under the 
     Medicare+Choice program. The report shall include an analysis 
     of how best to properly account for expenditures for such 
     services in the computation of Medicare+Choice capitation 
     rates.
       (c) Promoting Prompt Implementation of Informatics, 
     Telemedicine, and Education Demonstration Project.--Section 
     4207 of BBA is amended--
       (1) in subsection (a)(1), by adding at the end the 
     following: ``The Secretary shall make an award for such 
     project not later than 3 months after the date of the 
     enactment of the Medicare, Medicaid, and SCHIP Balanced 
     Budget Refinement Act of 1999. The Secretary shall accept the 
     proposal adjudged to be the best technical proposal as of 
     such date of enactment without the need for additional review 
     or resubmission of proposals.'';
       (2) in subsection (a)(2)(A), by inserting before the period 
     at the end the following: ``that qualify as Federally 
     designated medically underserved areas or health professional 
     shortage areas at the time of enrollment of beneficiaries 
     under the project'';
       (3) in subsection (c)(2), by striking ``and the source and 
     amount of non-Federal funds used in the project'';

[[Page H11611]]

       (4) in subsection (d)(2)(A), by striking ``at a rate of 50 
     percent of the costs that are reasonable and'' and inserting 
     ``for the costs that are related'';
       (5) in subsection (d)(2)(B)(i), by striking ``(but only in 
     the case of patients located in medically underserved 
     areas)'' and inserting ``or at sites providing health care to 
     patients located in medically underserved areas'';
       (6) in subsection (d)(2)(C)(i), by striking ``to deliver 
     medical informatics services under'' and inserting ``for 
     activities related to''; and
       (7) by amending paragraph (4) of subsection (d) to read as 
     follows:
       ``(4) Cost-sharing.--The project may not impose cost 
     sharing on a medicare beneficiary for the receipt of services 
     under the project. Project costs will cover all costs to 
     patients and providers related to participation in the 
     project.''.

     SEC. 513. MEDPAC REPORT ON MEDICARE MSA (MEDICAL SAVINGS 
                   ACCOUNT) PLANS.

       Not later than 1 year after the date of the enactment of 
     this Act, the Medicare Payment Advisory Commission shall 
     submit to Congress a report on specific legislative changes 
     that should be made to make MSA plans a viable option under 
     the Medicare+Choice program.

     SEC. 514. CLARIFICATION OF NONAPPLICABILITY OF CERTAIN 
                   PROVISIONS OF DISCHARGE PLANNING PROCESS TO 
                   MEDICARE+CHOICE PLANS.

       (a) In General.--Section 1861(ee)(2)(H) (42 U.S.C. 
     1395x(ee)(2)(H)), as added by section 4431 of BBA, is 
     amended--
       (1) in clause (i)--
       (A) by striking ``not specify'' and inserting ``subject to 
     clause (iii), not specify''; and
       (B) by striking ``and'' at the end; and
       (2) in clause (ii), by striking the period at the end and 
     inserting ``, and''; and
       (3) by adding at the end the following new clause:
       ``(iii) for individuals enrolled under a Medicare+Choice 
     plan, under a contract with the Secretary under section 1857, 
     for whom a hospital furnishes inpatient hospital services, 
     the hospital may specify with respect to such individual the 
     provider of post-hospital home health services or other post-
     hospital services under the plan.''.
            Subtitle B--Managed Care Demonstration Projects

     SEC. 521. EXTENSION OF SOCIAL HEALTH MAINTENANCE ORGANIZATION 
                   DEMONSTRATION (SHMO) PROJECT AUTHORITY.

       (a) Extension.--Section 4018(b) of the Omnibus Budget 
     Reconciliation Act of 1987 (Public Law 100-203), as amended 
     by section 4014(a)(1) of BBA, is amended--
       (1) in paragraph (1), by striking ``December 31, 2000'' and 
     inserting ``the date that is 18 months after the date that 
     the Secretary submits to Congress the report described in 
     section 4014(c) of the Balanced Budget Act of 1997''; and
       (2) by adding at the end of paragraph (4) the following: 
     ``Not later than 6 months after the date the Secretary 
     submits such final report, the Medicare Payment Advisory 
     Commission shall submit to Congress a report containing 
     recommendations regarding such project.''.
       (b) Substitution of Aggregate Cap.--Section 13567(c) of the 
     Omnibus Budget Reconciliation Act of 1993 (Public Law 103-
     66), as amended by section 4014(b) of BBA, is amended to read 
     as follows:
       ``(c) Aggregate Limit on Number of Members.--The Secretary 
     of Health and Human Services may not impose a limit on the 
     number of individuals that may participate in a project 
     conducted under section 2355 of the Deficit Reduction Act of 
     1984, other than an aggregate limit of not less than 324,000 
     for all sites.''.

     SEC. 522. EXTENSION OF MEDICARE COMMUNITY NURSING 
                   ORGANIZATION DEMONSTRATION PROJECT.

       (a) Extension.--Notwithstanding any other provision of law, 
     any demonstration project conducted under section 4079 of the 
     Omnibus Budget Reconciliation Act of 1987 (Public Law 100-
     123) and conducted for the additional period of 2 years as 
     provided for under section 4019 of BBA, shall be conducted 
     for an additional period of 2 years.
       (b) Report.--By not later than July 1, 2001, the Secretary 
     of Health and Human Services shall submit to Congress a 
     report describing the results of any demonstration project 
     conducted under section 4079 of the Omnibus Budget 
     Reconciliation Act of 1987, and describing the data collected 
     by the Secretary relevant to the analysis of the results of 
     such project, including the most recently available data 
     through the end of 2000.

     SEC. 523. MEDICARE+CHOICE COMPETITIVE BIDDING DEMONSTRATION 
                   PROJECT.

       Section 4011 of BBA is amended--
       (1) in subsection (a)--
       (A) by striking ``The Secretary'' and inserting the 
     following:
       ``(1) In general.--Subject to the succeeding provisions of 
     this subsection, the Secretary''; and
       (B) by adding at the end the following:
       ``(2) Delay in implementation.--The Secretary shall not 
     implement the project until January 1, 2002, or, if later, 6 
     months after the date the Competitive Pricing Advisory 
     Committee has submitted to Congress a report on each of the 
     following topics:
       ``(A) Incorporation of original fee-for-service medicare 
     program into project.--What changes would be required in the 
     project to feasibly incorporate the original fee-for-service 
     medicare program into the project in the areas in which the 
     project is operational.
       ``(B) Quality activities.--The nature and extent of the 
     quality reporting and monitoring activities that should be 
     required of plans participating in the project, the estimated 
     costs that plans will incur as a result of these 
     requirements, and the current ability of the Health Care 
     Financing Administration to collect and report comparable 
     data, sufficient to support comparable quality reporting and 
     monitoring activities with respect to beneficiaries enrolled 
     in the original fee-for-service medicare program generally.
       ``(C) Rural project.--The current viability of initiating a 
     project site in a rural area, given the site specific budget 
     neutrality requirements of the project, and insofar as the 
     Committee decides that the addition of such a site is not 
     viable, recommendations on how the project might best be 
     changed so that such a site is viable.
       ``(D) Benefit structure.--The nature and extent of the 
     benefit structure that should be required of plans 
     participating in the project, the rationale for such benefit 
     structure, the potential implications that any benefit 
     standardization requirement may have on the number of plan 
     choices available to a beneficiary in an area designated 
     under the project, the potential implications of requiring 
     participating plans to offer variations on any standardized 
     benefit package the committee might recommend, such that a 
     beneficiary could elect to pay a higher percentage of out-of-
     pocket costs in exchange for a lower premium (or premium 
     rebate as the case may be), and the potential implications of 
     expanding the project (in conjunction with the potential 
     inclusion of the original fee-for-service medicare program) 
     to require medicare supplemental insurance plans operating in 
     an area designated under the project to offer a coordinated 
     and comparable standardized benefit package.
       ``(3) Conforming deadlines.--Any dates specified in the 
     succeeding provisions of this section shall be delayed (as 
     specified by the Secretary) in a manner consistent with the 
     delay effected under paragraph (2).''; and
       (2) in subsection (c)(1)(A)--
       (A) by striking ``and'' at the end of clause (i); and
       (B) by adding at the end the following new clause:
       ``(iii) establish beneficiary premiums for plans offered in 
     such area in a manner such that a beneficiary who enrolls in 
     an offered plan with a below average price (as established by 
     the competitive pricing methodology established for such 
     area) may, at the plan's election, be offered a rebate of 
     some or all of the medicare part B premium that such 
     individual must otherwise pay in order to participate in a 
     Medicare+Choice plan under the Medicare+Choice program; 
     and''.

     SEC. 524. EXTENSION OF MEDICARE MUNICIPAL HEALTH SERVICES 
                   DEMONSTRATION PROJECTS.

       Section 9215(a) of the Consolidated Omnibus Budget 
     Reconciliation Act of 1985, as amended by section 6135 of the 
     Omnibus Budget Reconciliation Act of 1989, section 13557 of 
     the Omnibus Budget Reconciliation Act of 1993, and section 
     4017 of BBA, is amended by striking ``December 31, 2000'' and 
     inserting ``December 31, 2001''.

     SEC. 525. MEDICARE COORDINATED CARE DEMONSTRATION PROJECT.

       Section 4016(e)(1)(A)(ii) of the Balanced Budget Act of 
     1997 (42 U.S.C. 1395b-1 note) is amended to read as follows:
       ``(ii) Cancer hospital.--In the case of the project 
     described in subsection (b)(2)(C), the Secretary shall 
     provide for the transfer from the Federal Hospital Insurance 
     Trust Fund and the Federal Supplementary Insurance Trust Fund 
     under title XVIII of the Social Security Act (42 U.S.C. 
     1395i, 1395t), in such proportions as the Secretary 
     determines to be appropriate, of such funds as are necessary 
     to cover costs of the project, including costs for 
     information infrastructure and recurring costs of case 
     management services, flexible benefits, and program 
     management.''.
                           TITLE VI--MEDICAID

     SEC. 601. MAKING MEDICAID DSH TRANSITION RULE PERMANENT.

       (a) In General.--Section 4721(e) of the Balanced Budget Act 
     of 1997 (42 U.S.C. 1396r-4 note) is amended--
       (1) in the matter before paragraph (1), by striking 
     ``1923(g)(2)(A)'' and ``1396r-4(g)(2)(A)'' and inserting 
     ``1923(g)(2)'' and ``1396r-4(g)(2)'', respectively;
       (2) in paragraphs (1) and (2)--
       (A) by striking ``, and before July 1, 1999''; and
       (B) by striking ``in such section'' and inserting ``in 
     subparagraph (A) of such section''; and
       (3) by striking ``and'' at the end of paragraph (1), by 
     striking the period at the end of paragraph (2) and inserting 
     ``; and'', and by adding at the end the following new 
     paragraph:
       ``(3) effective for State fiscal years that begin on or 
     after July 1, 1999, `or (b)(1)(B)' were inserted in section 
     1923(g)(2)(B)(ii)(I) after `(b)(1)(A)'.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect as if included in the enactment of section 
     4721(e) of the Balanced Budget Act of 1997 (Public Law 105-
     33; 110 Stat. 514).

     SEC. 602. INCREASE IN DSH ALLOTMENT FOR CERTAIN STATES AND 
                   THE DISTRICT OF COLUMBIA.

       (a) In General.--The table in section 1923(f)(2) (42 U.S.C. 
     1396r-4(f)(2)) is amended

[[Page H11612]]

     under each of the columns for FY 00, FY 01, and FY 02--
       (1) in the entry for the District of Columbia, by striking 
     ``23'' and inserting ``32'';
       (2) in the entry for Minnesota, by striking ``16'' and 
     inserting ``33'';
       (3) in the entry for New Mexico, by striking ``5'' and 
     inserting ``9''; and
       (4) in the entry for Wyoming, by striking ``0'' and 
     inserting ``.100''.
       (b) Effective Date.--The amendments made by subsection (a) 
     take effect on October 1, 1999, and applies to expenditures 
     made on or after such date.

     SEC. 603. NEW PROSPECTIVE PAYMENT SYSTEM FOR FEDERALLY-
                   QUALIFIED HEALTH CENTERS AND RURAL HEALTH 
                   CLINICS.

       (a) In General.--Section 1902(a) of the Social Security Act 
     (42 U.S.C. 1396a(a)) is amended--
       (1) in paragraph (13)--
       (A) in subparagraph (A), by adding ``and'' at the end;
       (B) in subparagraph (B), by striking ``and'' at the end; 
     and
       (C) by striking subparagraph (C); and
       (2) by inserting after paragraph (14) the following new 
     paragraph:
       ``(15) for payment for services described in clause (B) or 
     (C) of section 1905(a)(2) under the plan in accordance with 
     subsection (aa);''.
       (b) New Prospective Payment System.--Section 1902 of the 
     Social Security Act (42 U.S.C. 1396a) is amended by adding at 
     the end the following:
       ``(aa) Payment for Services Provided by Federally-Qualified 
     Health Centers and Rural Health Clinics.--
       ``(1) In general.--Beginning with fiscal year 2000 and each 
     succeeding fiscal year, the State plan shall provide for 
     payment for services described in section 1905(a)(2)(C) 
     furnished by a Federally-qualified health center and services 
     described in section 1905(a)(2)(B) furnished by a rural 
     health clinic in accordance with the provisions of this 
     subsection.
       ``(2) Fiscal year 2000.--Subject to paragraph (4), for 
     services furnished during fiscal year 2000, the State plan 
     shall provide for payment for such services in an amount 
     (calculated on a per visit basis) that is equal to 100 
     percent of the costs of the center or clinic of furnishing 
     such services during fiscal year 1999 which are reasonable 
     and related to the cost of furnishing such services, or based 
     on such other tests of reasonableness as the Secretary 
     prescribes in regulations under section 1833(a)(3), or, in 
     the case of services to which such regulations do not apply, 
     the same methodology used under section 1833(a)(3), adjusted 
     to take into account any increase in the scope of such 
     services furnished by the center or clinic during fiscal year 
     2000.
       ``(3) Fiscal year 2001 and succeeding fiscal years.--
     Subject to paragraph (4), for services furnished during 
     fiscal year 2001 or a succeeding fiscal year, the State plan 
     shall provide for payment for such services in an amount 
     (calculated on a per visit basis) that is equal to the amount 
     calculated for such services under this subsection for the 
     preceding fiscal year--
       ``(A) increased by the percentage increase in the MEI (as 
     defined in section 1842(i)(3)) applicable to primary care 
     services (as defined in section 1842(i)(4)) for that fiscal 
     year; and
       ``(B) adjusted to take into account any increase in the 
     scope of such services furnished by the center or clinic 
     during that fiscal year.
       ``(4) Establishment of initial year payment amount for new 
     centers or clinics.--In any case in which an entity first 
     qualifies as a Federally-qualified health center or rural 
     health clinic after fiscal year 1999, the State plan shall 
     provide for payment for services described in section 
     1905(a)(2)(C) furnished by the center or services described 
     in section 1905(a)(2)(B) furnished by the clinic in the first 
     fiscal year in which the center or clinic so qualifies in an 
     amount (calculated on a per visit basis) that is equal to 100 
     percent of the costs of furnishing such services during such 
     fiscal year in accordance with the regulations and 
     methodology referred to in paragraph (2). For each fiscal 
     year following the fiscal year in which the entity first 
     qualifies as a Federally-qualified health center or rural 
     health clinic, the State plan shall provide for the payment 
     amount to be calculated in accordance with paragraph (3).
       ``(5) Administration in the case of managed care.--In the 
     case of services furnished by a Federally-qualified health 
     center or rural health clinic pursuant to a contract between 
     the center or clinic and a managed care entity (as defined in 
     section 1932(a)(1)(B)), the State plan shall provide for 
     payment to the center or clinic (at least quarterly) by the 
     State of a supplemental payment equal to the amount (if any) 
     by which the amount determined under paragraphs (2), (3), and 
     (4) of this subsection exceeds the amount of the payments 
     provided under the contract.
       ``(6) Alternative payment methodologies.--Notwithstanding 
     any other provision of this section, the State plan may 
     provide for payment in any fiscal year to a Federally-
     qualified health center for services described in section 
     1905(a)(2)(C) or to a rural health clinic for services 
     described in section 1905(a)(2)(B) in an amount which is 
     determined under an alternative payment methodology that--
       ``(A) is agreed to by the State and the center or clinic; 
     and
       ``(B) results in payment to the center or clinic of an 
     amount which is at least equal to the amount otherwise 
     required to be paid to the center or clinic under this 
     section.''.
       (c) Conforming Amendments.--
       (1) Section 4712 of the Balanced Budget Act of 1997 (Public 
     Law 105-33; 111 Stat. 508) is amended by striking subsection 
     (c).
       (2) Section 1915(b) of the Social Security Act (42 U.S.C. 
     1396n(b)) is amended by striking ``1902(a)(13)(E)'' and 
     inserting ``1902(a)(15), 1902(aa),''.
       (d) Effective Date.--The amendments made by this section 
     take effect on October 1, 1999, and apply to services 
     furnished on or after such date.

     SEC. 604. PARITY IN REIMBURSEMENT FOR CERTAIN UTILIZATION AND 
                   QUALITY CONTROL SERVICES.

       (a) In General.--Section 1903(a)(3)(C)(i) (42 U.S.C. 
     1396b(a)(3)(C)(i)) is amended--
       (1) by inserting ``(other than a review described in clause 
     (ii))'' after ``quality review''; and
       (2) by inserting ``(or under a contract with the State that 
     sets forth standards of performance equivalent to those under 
     section 1902(d))'' before the semicolon.
       (b) Effective Date.--The amendments made by subsection (a) 
     apply to expenditures made on and after the date of the 
     enactment of this Act.
      TITLE VII--STATE CHILDREN'S HEALTH INSURANCE PROGRAM (SCHIP)

     SEC. 701. STABILIZING THE SCHIP ALLOTMENT FORMULA.

       (a) In General.--Section 2104(b) (42 U.S.C. 1397dd(b)) is 
     amended--
       (1) in paragraph (2)(A)--
       (A) in clause (i), by striking ``through 2000'' and 
     inserting ``and 1999''; and
       (B) in clause (ii), by striking ``2001'' and inserting 
     ``2000'';
       (2) by amending paragraph (4) to read as follows:
       ``(4) Floors and ceilings in state allotments.--
       ``(A) In general.--The proportion of the allotment under 
     this subsection for a subsection (b) State (as defined in 
     subparagraph (D)) for fiscal year 2000 and each fiscal year 
     thereafter shall be subject to the following floors and 
     ceilings:
       ``(i) Floor of $2,000,000.--A floor equal to $2,000,000 
     divided by the total of the amount available under this 
     subsection for all such allotments for the fiscal year.
       ``(ii) Annual floor of 10 percent below preceding fiscal 
     year's proportion.--A floor of 90 percent of the proportion 
     for the State for the preceding fiscal year.
       ``(iii) Cumulative floor of 30 percent below the fy 1999 
     proportion.--A floor of 70 percent of the proportion for the 
     State for fiscal year 1999.
       ``(iv) Cumulative ceiling of 45 percent above fy 1999 
     proportion.--A ceiling of 145 percent of the proportion for 
     the State for fiscal year 1999.
       ``(B) Reconciliation.--
       ``(i) Elimination of any deficit by establishing a 
     percentage increase ceiling for states with highest annual 
     percentage increases.--To the extent that the application of 
     subparagraph (A) would result in the sum of the proportions 
     of the allotments for all subsection (b) States exceeding 
     1.0, the Secretary shall establish a maximum percentage 
     increase in such proportions for all subsection (b) States 
     for the fiscal year in a manner so that such sum equals 1.0.
       ``(ii) Allocation of surplus through pro rata increase.--To 
     the extent that the application of subparagraph (A) would 
     result in the sum of the proportions of the allotments for 
     all subsection (b) States being less than 1.0, the 
     proportions of such allotments (as computed before the 
     application of floors under clauses (i), (ii), and (iii) of 
     subparagraph (A)) for all subsection (b) States shall be 
     increased in a pro rata manner (but not to exceed the ceiling 
     established under subparagraph (A)(iv)) so that (after the 
     application of such floors and ceiling) such sum equals 1.0.
       ``(C) Construction.--This paragraph shall not be construed 
     as applying to (or taking into account) amounts of allotments 
     redistributed under subsection (f).
       ``(D) Definitions.--In this paragraph:
       ``(i) Proportion of allotment.--The term `proportion' 
     means, with respect to the allotment of a subsection (b) 
     State for a fiscal year, the amount of the allotment of such 
     State under this subsection for the fiscal year divided by 
     the total of the amount available under this subsection for 
     all such allotments for the fiscal year.
       ``(ii) Subsection (b) state.--The term `subsection (b) 
     State' means one of the 50 States or the District of 
     Columbia.'';
       (3) in paragraph (2)(B), by striking ``the fiscal year'' 
     and inserting ``the calendar year in which such fiscal year 
     begins''; and
       (4) in paragraph (3)(B), by striking ``the fiscal year 
     involved'' and inserting ``the calendar year in which such 
     fiscal year begins''.
       (b) Effective Date.--The amendments made by this section 
     apply to allotments determined under title XXI of the Social 
     Security Act (42 U.S.C. 1397aa et seq.) for fiscal year 2000 
     and each fiscal year thereafter.

     SEC. 702. INCREASED ALLOTMENTS FOR TERRITORIES UNDER THE 
                   STATE CHILDREN'S HEALTH INSURANCE PROGRAM.

       Section 2104(c)(4)(B) (42 U.S.C. 1397dd(c)(4)(B)) is 
     amended by inserting ``, $34,200,000 for each of fiscal years 
     2000 and 2001, $25,200,000 for each of fiscal years 2002 
     through 2004, $32,400,000 for each of fiscal years 2005 and 
     2006, and $40,000,000 for fiscal year 2007'' before the 
     period.


[[Page H11613]]


  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Texas (Mr. Archer) and the gentleman from New York (Mr. Rangel) each 
will control 20 minutes.
  The Chair recognizes the gentleman from Texas (Mr. Archer).


                             General Leave

  Mr. ARCHER. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days within which to revise and extend their remarks 
on the bill, H.R. 3075, as amended.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Texas?
  There was no objection.
  Mr. ARCHER. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, 2 years ago Congress embarked on a monumental task to 
strengthen Medicare for the 39 million Americans that depend on the 
program every day for their health care needs. We made the tough 
decisions because it was the right thing to do, and we did it on a 
bipartisan basis, in conjunction with the administration.
  Today, as a result of those decisions, America's elderly and disabled 
have more health care choices than ever before. We increased 
preventative benefits to detect and treat conditions early, which means 
less time in a hospital or nursing facility and more time at home; we 
passed 65 new steps to crack down on fraud and abuse that rob seniors 
of vital care; and on a bipartisan basis, we set Medicare on the right 
financial footing, extending the life of the program for future 
beneficiaries.

                              {time}  1045

  In fact, earlier this year, the Medicare trustees reported that the 
Medicare program is now solvent until the year 2015. With any 
legislation of this size, however, adjustments are always necessary and 
even with the technocratic jargon of new prospective payment systems, 
DSH adjustments and RUG fixes, we have not lost sight of those that we 
help, our Nation's elderly and disabled.
  Under our proposal today, families will not have to drive to the next 
county to visit the emergency room. Seniors will have the flexibility 
to enroll in new plans to get the comprehensive benefits that they need 
and want, and that is what this bill is all about.
  For over 30 years, Medicare has been there for millions of seniors, 
and as we enter the next millennium the Medicare program will be 
stronger than ever, thanks to our bipartisan efforts.
  Two years ago, the President joined us in enacting this landmark 
legislation, and I now ask him to join us in again building upon our 
historic success by implementing those provisions that Congress 
intended for the administration when it first passed the Balanced 
Budget Act.
  Congress and the White House must work together for the good of 
seniors and the disabled who depend on Medicare.
  I commend the Subcommittee on Health, the gentleman from California 
(Mr. Thomas), the Committee on Commerce, the gentleman from Virginia 
(Mr. Bliley) and members of both the Committee on Ways and Means and 
the Committee on Commerce for their tireless efforts to ensure that 
quality medical treatment is there when seniors need it.
  I urge my colleagues to support this important legislation.
  Mr. Speaker, I reserve the balance of my time.
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, my friend the gentleman from Texas (Mr. Archer), the 
chairman of the Committee on Ways and Means, spoke a great deal about 
bipartisanship in 1997 and the need for the Congress and the White 
House to work together.
  I agree with him, but can we not start with Republicans and Democrats 
in the House working together? That would be a good beginning. It is 
almost insulting to take a bill of this importance and then put it on 
the suspension calendar. This bipartisanship does not start with the 
Republican leaders and the President of the United States. If it is 
going to work, it should start right here, with Members of this House 
having mutual respect for each other, with important bills going 
through committee, with Members being given the opportunity to amend 
them, and if the amendment is not worth the majority of the votes then 
the amendment is defeated. That is how democracy works. That is how 
this is supposed to work.
  This suspension calendar is supposed to be for noncontroversial 
legislation. It is supposed to be that we already agreed on something; 
that there is no need for amendments, no need for debate.
  We are restricted to 20 minutes on each side, but what we are talking 
about is our teaching hospitals. We are talking about making a mistake 
in 1997 and trying to remedy it by bringing it to the floor so that we 
could remedy it. No one can deny that lowering the price for 
prescription drugs for seniors is a very, very important thing. We 
tried to do this in our committee and we were unable to do it, and this 
would be the perfect time to find out what the people, Republican and 
Democrat, liberals and conservatives, would want to do.
  We are not being given that opportunity, and the gentleman is talking 
about bipartisan and working with the President of the United States 
when he is not even working with his Democratic colleagues because we 
are in the minority.
  Indeed, the rule that we had in the Committee on Ways and Means was a 
gag rule to make certain that none of our amendments would ever get an 
opportunity to pass.
  I do hope that somewhere along the line, before we adjourn, that we 
start allowing each other to set the standard for bipartisanship, that 
we start talking with each other and we do not find just a hand of 
Republicans, because they have the leadership going in the back room 
and deciding what is good for the whole House and because they have the 
votes, putting it on the suspension calendar where Members cannot work 
their will, and then when it is all over and they find out that they 
have a train wreck on their hands they are going to ask the President 
of the United States to work with them. They did not ask the President 
to work with them when they went into the Social Security trust funds. 
They did not ask the President to work with them when they came up with 
a $792 billion tax cut, but when they work themselves into a corner and 
they cannot get out of the box, then they have to call for 
bipartisanship.
  Bipartisanship starts now and it starts today, and it should not be 
put in a bill like this on the suspension calendar.
  Mr. Speaker, I ask unanimous consent that the balance of my time be 
divided equally between the gentleman from California (Mr. Stark) for 
the Committee on Ways and Means, and the gentleman from Ohio (Mr. 
Brown) for the Committee on Commerce.
  The SPEAKER pro tempore (Mr. LaHood). Is there objection to the 
request of the gentleman from New York?
  There was no objection.
  Mr. THOMAS. Mr. Speaker, I yield 3 minutes to gentleman from Virginia 
(Mr. Bliley), chairman of the Committee on Commerce.
  (Mr. BLILEY asked and was given permission to revise and extend his 
remarks, and include extraneous material.)
  Mr. BLILEY. Mr. Speaker, I thank the gentleman from California (Mr. 
Thomas) for yielding me this time.
  Mr. Speaker, I rise today in support of H.R. 3075, the Medicare, 
Medicaid and S-CHIP Balanced Budget Refinement Act of 1999.
  Two years ago, we made some very important changes to the Medicare 
and Medicaid programs when we passed the Balanced Budget Act. The 
Medicare program was facing bankruptcy. The changes we made are keeping 
this vital program for our Nation's seniors alive.
  In addition, we created the State Children's Health Insurance 
Program, otherwise known as S-CHIP, to provide health coverage for 
millions of low-income, uninsured American children. It was historic 
legislation and I am very proud of it.
  Today we are considering a bill that will refine some of the policies 
put into effect by BBA. In the two years since we passed the BBA, we 
have heard that some of the changes we made went a little too far and 
some health providers have felt some hardship. Today we are going back 
to make a few corrections.
  Under our bill, the seniors will receive the health care they 
deserve. We

[[Page H11614]]

put needed dollars into the system to ensure patient access and care to 
hospitals, skilled nursing facilities and other care.
  I want to highlight some of the more important pieces of this bill.
  First, we provide additional funding for hospital outpatient 
departments. This includes more funds for small rural hospitals and for 
patients who receive cancer treatments, those most in need of 
assistance. We cannot allow these hospitals to close their doors.
  Additionally, this bill provides an additional $3.5 billion for the 
Medicare+Choice program. This vital program gives seniors the 
opportunity to choose a private health plan rather than the traditional 
Medicare program.
  I am also proud to have strengthened this bill by adding $200 million 
to pay for immunosuppressive drugs. Medicare currently only covers 
these drugs for 36 months. This bill takes a first step at addressing 
that issue and allows us to provide for coverage for needy organ 
transplant patients. Access to these drugs can literally make the 
difference between life and death.
  We also help our Nation's community health centers and rural health 
clinics by ensuring they receive the funding they need to provide care 
to millions of low income and uninsured Americans. Our bill authorizes 
States to create new payment systems for community health centers and 
rural clinics.
  Finally, our bill puts more funds into the S-CHIP program. We created 
the S-CHIP program in 1997 to provide health insurance to our Nation's 
children, and it has been an enormous success.
  Mr. Speaker, I am proud of the work the committee has put into this 
product. It is a good bill and deserves the support of all of our 
colleagues.

     Hon. Bill Archer,
     Chairman, Committee on Ways and Means, Washington, DC.
       Dear Bill: I am writing regarding H.R. 3075, the Medicare 
     Balanced Budget Refinement Act of 1999. As you know, the 
     Committee on Commerce is an additional committee of 
     jurisdiction for the bill, and I understand that the version 
     of that bill will be considered under the suspension calendar 
     will contain a number of Medicaid provisions which fall 
     within my Committee's exclusive jurisdiction.
       However, in light of your willingness to work with me on 
     those provisions within the Commerce Committee's 
     jurisdiction, I will not exercise the Committee on Commerce's 
     right to act on the legislation. By agreeing to waive its 
     consideration of the bill, however, the Commerce Committee 
     does not waive its jurisdiction over H.R. 3075. In addition, 
     the Commerce Committee reserves its authority to seek 
     conferees on any provisions of the bill that are within its 
     jurisdiction during any House-Senate conference that may be 
     convened on this legislation or similar legislation. I ask 
     that you support our request in this regard.
       I ask that you include a copy of this letter and your 
     response in the Record during consideration of the bill on 
     the House floor. Thank you for your consideration and 
     assistance. I remain,
           Sincerely,
                                             Tom Bliley, Chairman.

  Mr. STARK. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from 
Washington (Mr. McDermott).
  (Mr. McDERMOTT asked and was given permission to revise and extend 
his remarks.)
  Mr. McDERMOTT. Mr. Speaker, there will not be half a dozen votes 
against this pathetic piece of legislation. I sat on the Medicare 
Commission for a year and in the committee for 10 months, and we never 
had a proposal for a bipartisan overhaul, which everybody knows we 
should do. We did not even consider the President's proposal to extend 
from 65 down to 55, at no cost to the government, health insurance for 
people in the workforce. Now, if one wants to have access, that is the 
best way to get it.
  We had nothing in here to talk about whether or not we were going to 
extend the life of Medicare. The President offered 15 percent of the 
surplus and said let us extend the life. We never had a discussion 
about that in the committee.
  Finally, and worst of all, there is not one single thing done for 
senior citizens on their prescription drugs.
  Now, everybody sitting on this floor is going to go home to their 
district and they are going to explain to their constituents why it is 
they have a drug benefit. We all have one through our health plan, that 
if we have a prescription we pay $12. I pay $12. Everybody pays $12 in 
this body. But my mother and my aunts and my uncles and all my 
constituents and the constituents of all of us pay retail. Now that is 
a disgrace.
  This piece of legislation is worthless, but we have no choice. They 
gave us no choice.
  Mr. BROWN of Ohio. Mr. Speaker, I yield myself 1 minute.
  Mr. Speaker, I rise in support of H.R. 3075, but I rise with a great 
deal of disappointment that this bill falls far, far short of what this 
House should do. Today we are not considering prescription drug 
coverage when 75 percent of our elderly have inadequate or nonexistent 
prescription drug coverage. We are not modernizing Medicare. We are not 
repealing therapy caps, caps which have harmed thousands of our 
elderly.
  Too many seniors are spending into poverty to pay for prescription 
drugs. Yet, all the majority is doing is tinkering at the edges of the 
Medicare payment system. When is this Congress going to get serious 
about modernizing Medicare? When is this Congress going to take action 
based on the best interests of Medicare enrollees? When is this 
Congress going to get serious about the Patients' Bill of Rights? And 
when is this Congress going to provide prescription drugs for this 
Nation's elderly?
  If Republicans remain in the majority, Mr. Speaker, the answer 
unfortunately is do not hold your breath.
  Mr. THOMAS. Mr. Speaker, it is now my pleasure to yield 2 minutes to 
the gentleman from Florida (Mr. Bilirakis), chairman of the 
Subcommittee on Health of the Committee on Commerce.
  Mr. BILIRAKIS. Mr. Speaker, in early 1997, a Medicare trustees' 
annual report confirmed that the Medicare hospital insurance trust fund 
would exhaust its resources faster than previously anticipated. The 
part B trust fund was in similar straits.
  Its board of trustees issued its own report warning that prompt, 
effective and decisive action is necessary. And so the Congress 
addressed this problem with BBA 1997, as we so fondly refer to it.
  BBA 1997 was the Balanced Budget Act of 1997. It saved Medicare. It 
did something that the prior Congresses had not done. It saved Medicare 
for an additional 14 years until the year 2015.
  It represented the most comprehensive Medicare reform since the 
program's establishment in 1965. It made many changes, expanding 
Medicare's coverage of preventive benefits. It hadn't been done before. 
Providing additional choices for seniors through the Medicare+ program; 
implementing new programs to combat fraud, waste and abuse; and 
establishing new initiatives and modernizing and strengthen the 
Medicare speed for service payment system.

                              {time}  1100

  But it also established new payment provisions, bold steps to control 
Medicare spending by changing the financial incentives inherent in 
payment methods that, prior to the BBA, did not reward providers for 
delivering care efficiently.
  Unfortunately, as quite often happens, there are unintended 
consequences; and, consequently, a lot of the reimbursements we have 
determined now have not been adequate. So we tried to address this with 
the BBA fixes.
  I would say to this Congress through the Speaker that, as far as the 
Committee on Commerce was concerned, I cannot speak for the Committee 
on Ways and Means, although I am sure the same thing happened there, as 
far as the Committee on Commerce is concerned, the majority staff and 
the minority staffs worked many, many hours over many, many days, 
sitting with HCFA, I might add, trying to work things out. Things seem 
to have been going along really well. Many of the ideas that the 
minority had are incorporated in this particular BBA 1997 fix.
  I ask for support for this legislation.
  Mr. STARK. Mr. Speaker, I yield myself 30 seconds. I do so just to 
challenge my Republican colleagues who are afraid today that they would 
have to vote on a drug benefit, but to remind the public that the 
gentleman form Pennsylvania (Mr. English), the gentlewoman from 
Connecticut (Mrs. Johnson), the gentleman from Arizona (Mr. Hayworth), 
and the gentleman from Florida (Mr. Shaw), who are all sitting here 
voted to deny seniors in

[[Page H11615]]

their districts a discount on prescription drugs at no cost to the 
Federal Government.
  I hope that they will explain to the seniors whose benefits are being 
reduced why they did that and why they are afraid to see it come up 
today and vote for it or against it in an up forward manner.
  Mr. BROWN of Ohio. Mr. Speaker, I yield 1\1/2\ 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, and include extraneous material.)
  Mr. DINGELL. Mr. Speaker, what are we doing here in such haste and 
why? There has been no consultation, no attention to the regular and 
orderly process. Most Members have not got the vaguest idea what we are 
doing here.
  This is a subject which would enable us to function in an intelligent 
fashion, using the ordinary processes of the House to discuss, to have 
an opportunity to come to agreement, and to do something which can and 
should be bipartisan in a bipartisan fashion.
  The bill, on the other hand, is rushed to the floor without any 
particular attention, without any consultation, not addressing the 
problems, and, interestingly enough, if we look at it, we find that the 
bill is not paid for, probably is going to jeopardize Medicare and 
Social Security and their trust funds, and it is going to ignore the 
opportunity to do many things which we could have done.
  It is not going to pay for most of the benefits, although most 
Members here are probably going to vote for it, including myself, 
understanding full well that we have not done the job that we should, 
not knowing what should be done, having disregarded the regular and 
orderly process of the House.
  More importantly, we are going to proceed to move forward, ignoring 
the opportunity to craft a bill of which we could all, first of all, 
know what we are doing, and, second of all, a bill in which we could 
genuinely be proud.
  We also have an opportunity here to craft a piece of legislation 
which is not going to hold in it a large number of surprises and 
perhaps even poison pills. The result of what we are doing today is bad 
process and is going to probably result in imperfect legislation. It 
holds within its bounds sure surprises and very little opportunity to 
address really important problems like the balanced budget and 
protecting and preserving Medicare and Social Security.
  Mr. Speaker, I am pleased to see that the Republican leadership is 
finally getting down to the business of rectifying some of the 
consequences of the Balanced Budget Act. Like many others here, I am 
very concerned about its effects on beneficiaries and providers.
  Regrettably, I am also concerned today by the process. We are voting 
on a bill that can be and should be bipartisan . . . that is the 
product of partisan efforts. This is a matter of great importance to 
the 38 million Americans covered by Medicare, yet we have had less than 
one day to examine this bill. This is a matter that can and should be 
the subject of more careful and thoughtful but still expeditious 
process.
  Our Republican friends made a great deal about the need to protect 
the Social Security surplus, but the bill they are offering is not paid 
for. Preliminary estimates show this bill to cost almost $12 billion--
unpaid for, the bill will shorten the life of the Medicare Trust Fund 
and increase premiums to seniors. Apparently, fiscal responsibility 
only suits the Republican party when it is convenient.
  I am also concerned that we have not done enough. The relief for 
Medicare patients who need physical therapy is inadequate. The relief 
for Medicare patients in rural or cancer hospitals is not adequate. 
And, from what I understand, the Hospital Outpatient policy may be 
unworkable.
  A number of Democrats sent a letter to the Speaker yesterday, 
concerned that we have not done enough to provide relief, asking for 
the opportunity to offer a paid-for amendment to this bill. Our request 
was denied.
  This bill leaves out what is perhaps the most important relief that 
Congress could offer to Medicare beneficiaries--relief from the high 
cost of prescription drugs. Seniors should not have to choose between 
food and needed medicines. Yet, the Speaker would not let us even offer 
our amendment that would have made prescription drugs more affordable 
for seniors.
  This bill provides much needed relief for the Community Health 
Centers which are critical to providing care to underserved areas. But 
I am dismayed to see that the bill could not find the money to address 
the needs of low-income women with breast cancer. But the Republican 
bill is able to provide more than one billion dollars to HMOs--the same 
HMOs that HCFA, the IG, and the GAO have noted are already being 
overpaid.
  Mr. Speaker, I have a great number of concerns about this bill. Not 
only with what is in it, but what is not. I am also concerned about the 
process and the fact this bill is not paid for. The bill is a small 
step in the direction of ensuring that seniors continue to have access 
to the same high quality care in Medicare that they have come to depend 
on, but there are clearly areas that need more help.

                                     House of Representatives,

                                 Washington, DC, November 4, 1999.
     Hon. Dennis Hastert,
     Speaker of the U.S. House of Representatives, The Capitol, 
         Washington, DC.
       Dear Mr. Speaker: We are writing to ask that you not bring 
     the Medicare Balanced Budget Act legislation (HR 3075 as 
     amended in negotiations with Commerce Committee Republicans) 
     to the floor under suspension of the rules, but instead 
     provide a rule permitting Democratic amendments and a motion 
     to recommit. Because Democrats were not included in the 
     negotiations between the Ways and Means and Commerce 
     Committee Republican members, it is particularly important 
     that we be offered the opportunity for floor amendments.
       While the Republican bills that have been introduced 
     provide a great deal of needed relief, we believe that--
       (1) some additional relief to providers,
       (2) some beneficiary improvements (in particular help with 
     the high cost of pharmaceuticals), and
       (3) some alternative policies are desperately needed.
       The amendments we propose would provide an additional $2.4 
     billion in paid-for relief, with some going to beneficiaries 
     in lower pharmaceutical prices and other program 
     improvements. Our amendments would also eliminate several 
     policies in the Republican bill which the Administration has 
     identified as unworkable or which would hurt Medicare 
     beneficiaries.
       As fiscally responsible Democrats, we are concerned that 
     the Republican bill is not paid for, and we urge you to find 
     a way to pay for it, rather than further spending Social 
     Security surpluses. For example, because it is not currently 
     paid for, the Ways and Means bill (HR 3075) shortens the 
     solvency of the Medicare Part A Trust Fund by at least a 
     year, and increases Part B premiums for seniors.
       Therefore, to avoid this problem, we pay for the additional 
     relief offered by our amendments. Thus we do not hurt 
     Medicare's solvency. The $2.4 billion in relief over five 
     years is paid for by $2.4 billion in Medicare savings from 
     the President's budget proposal of last January. These 
     savings come from Medicare anti-fraud, waste, and abuse 
     proposals.


                   Providing Needed Additional Relief

       The $2.4 billion provides important, much needed additional 
     relief to: beneficiaries to meet the cost of fighting cancer 
     and the high costs of pharmaceutical insurance,\1\ teaching 
     hospitals, safety net hospitals, which have the lowest 
     overall operating margins, rural hospitals, which have the 
     lowest Medicare margins, skilled nursing homes, home health 
     agencies which are serving the sickest patients, a more 
     rational rehabilitation cap program that will help our most 
     severely disabled stroke patients and amputees, help for 
     hospice agencies facing sky-rocketing pharmaceutical costs 
     for end-of-life painkillers, and the Medicaid and Children's 
     Health Insurance Program, to help the providers serving the 
     low income and to help Puerto Rico and the Possessions with 
     more adequate payment rates.
---------------------------------------------------------------------------
     \1\ We assume that the bill the Majority brings to the floor 
     will include an expansion of Medicare's coverage of immuno-
     suppressive drugs, so that transplant patients do not suffer 
     organ rejection. If this provision is not included, we ask 
     permission to include it and pay for it with additional 
     antifraud and abuse provisions.
---------------------------------------------------------------------------
       This additional relief will further ensure that Medicare 
     beneficiaries are buffered from the cuts in the 1997 BBA and 
     will allow Medicare beneficiaries to continue to receive high 
     quality care.
       The attached memo describes these amendments in more 
     detail.


           Help Seniors with the High Cost of Pharmaceuticals

       We believe we need to help all Medicare beneficiaries with 
     a prescription drug insurance benefit, but that is a larger 
     issue that cannot be addressed in this limited BBA 
     corrections legislation. We hope, Mr. Speaker, that you will 
     make this a priority issue for the Second Session of this 
     Congress.
       In the meantime, we do believe that this bill gives us the 
     one opportunity this year to help seniors with the exorbitant 
     cost of prescription drugs. We propose an amendment which was 
     offered in the Ways and Means Committee by Rep. Karen Thurman 
     (and supported by all the Democratic members of the 
     Committee) that makes the Allen-Turner-Waxman-Berry 
     pharmaceutical discount bill (HR 664) germane to Medicare. 
     Basically, the amendment says that if a drug manufacturer 
     wants to sell pharmaceuticals to a hospital participating in 
     Medicare, it must also

[[Page H11616]]

     make available to pharmacies for sale to seniors drugs at the 
     best available price for which they offer that drug. By some 
     estimates, this type of program could lower drug costs to 
     seniors by as much as 40%.
       If we can't pass a major Medicare drug reform bill this 
     fall, we can at least give seniors a chance for the discounts 
     available to large buyers.


                        Preventing Bad Policies

       If the Majority bill includes certain provisions, we ask 
     that the rule governing debate permits us to strike those 
     anti-beneficiary and anti-consumer provisions:
       Specifically, we are concerned that the Administration has 
     warned that the hospital out-patient department (HOPD) 
     provisions of the Ways and Means bill are so complicated that 
     they will delay the start of HOPD Prospective Payment (PPS) 
     by at least a year. Such a delay in the PPS will cost 
     beneficiaries about $1.4 billion, with patients' share of 
     total HOPD payments running about 50%. We would move to 
     strike the House HOPD provisions in favor of the Senate's 
     more administrable proposals, but keep the amount of relief 
     to hospitals and patients at the House level.
       Second, if the Majority bill includes the Commerce 
     Republicans' provision giving ``deemed status'' to HMOs, we 
     would strike that provision. An overwhelming number of House 
     members have just voted in favor of higher quality in managed 
     care plans. Therefore, we find it incredible that the 
     majority may be proposing an amendment to the BBA which would 
     weaken our ability to ensure quality by turning over approval 
     of these plans to participate in Medicare to private groups 
     which are often dominated by the very industry they are 
     supposed to be regulating. If such ``deemed status'' language 
     is included, we will seek to strike it in order to protect 
     beneficiaries.
       Third, as mentioned above, we propose to strike the 
     unworkable $1500 limit on rehabilitation caps for 2 years 
     while the Secretary develops a rational therapy payment plan. 
     This is the same approach as taken by the Senate Finance 
     Committee.
       In conclusion, our beneficiaries and providers need the 
     improvements made by the Democratic amendment. We urge you to 
     make it in order. Thank you for your consideration.
           Sincerely,
                                     Charles B. Rangel and others.

------------------------------------------------------------------------
                                        In addition to HR 3075, a $2.4
                                       billion paid-for package [dollars
             Issue Area               expressed as additions to costs in
                                                   HR 3075]
------------------------------------------------------------------------
Hospitals...........................  Freeze indirect medical education
                                       cut for 1 year more than HR 3075
                                       ($0.2).
                                      Freeze disproportionate share
                                       hospital cuts for 1 year more
                                       than HR 3075 ($0).
                                      Carve out DSH payments from
                                       payments to M+C plans. Moves
                                       about $1 billion per year to the
                                       nation's safety net hospitals; is
                                       not in HR 3075 ($0).
Rural Hospitals.....................  Tanner Amendment to protect rural
                                       and cancer hospitals against
                                       outpatient department PPS cuts
                                       (HR 3075 phases in cuts to these
                                       hospitals, still leaving huge
                                       payment reductions) ($0.2).
$1,500 Therapy Caps.................  Strike HR 3075 limits by
                                       suspending caps for 2 years while
                                       a new, more rational system is
                                       developed (net $0).
Community Health Centers & Rural      Establish a PPS system which
 CHCs.                                 protects CHCs against State
                                       Medicaid cuts ($0.2).
Nursing Homes.......................  Raise HR 3075's payment to high
                                       acuity cases from 10% to 30%
                                       ($0.1).
                                      Raise HR 3075's nursing home
                                       inflation adjustment from 0.8% in
                                       FY01 to 1% ($0.1) and authorize
                                       extra payments for his cost of
                                       living in Hawaii and Alaska.
Physicians..........................  Study of why payment rates in
                                       certain States and Puerto Rico
                                       are low.
Home Health.........................  Provide $250 million ``outlier''
                                       pool for home health agencies
                                       that treat tough cases ($0.3) HR
                                       1917, by Rep. Jim McGovern and
                                       102 cosponsors.
Hospice.............................  Eliminate 1% cut in FY 01 and 02
                                       ($0.2)
Medicaid............................  Help for Medicaid DSH formula
                                       errors in NM, DC, MN, and WY
                                       ($0.2).
                                      Premanent fix for CA Medicaid DSH
                                       problem $0.
                                      Help families not lose Medicaid
                                       coverage as a result of delinking
                                       of welfare and Medicaid
                                       eligibility ($0.2).
CHIPs...............................  Increase CHIPs amount for
                                       Possessions and provide technical
                                       fix to CHIPs formula ($0.1).
Beneficiary Improvements............  Immuno-suppressive drugs, cover
                                       without a time limit ($0.3).
                                      Allow States to require M+C plans
                                       to cover certain benefits (like
                                       MA used to do with Rx) ($0).
                                      Allow people abandoned by M+C
                                       plans to buy a medi-gap policy
                                       which covers Rx ($0).
                                      Coverage of cancer treatment for
                                       low-income women ($0.3) HR 1070,
                                       by Rep. Eshoo and Lazio and 271
                                       cusponsors.
Pay-fors............................  3 Medicare items from President's
                                       budget: mental health partial
                                       hospitalization reform, Medicare
                                       Secondary Payer data match, and
                                       pay for outpatient drugs at 83%
                                       of average wholesale price.
                                       ($4.4).
------------------------------------------------------------------------

  Mr. THOMAS. Mr. Speaker, we appreciate the support of the gentleman 
from Michigan (Mr. Dingell), the ranking member of the Committee on 
Commerce.
  Mr. Speaker, it is my pleasure to yield 2 minutes to the gentlewoman 
from Connecticut (Mrs. Johnson), a member of the Subcommittee on Health 
who, without all of her hours of work, this bill would not have been 
possible.
  Mrs. JOHNSON of Connecticut. Mr. Speaker, I thank the gentleman from 
California for yielding me this time.
  I, as many others in this body, have spent hours and hours sitting in 
the nursing homes, the hospitals, the home health agencies of my 
district, studying the problems that Medicare has caused them. The goal 
of this bill is to save those community-based providers in the small 
towns of America, in the small cities.
  Frankly, I think it is utterly irresponsible for my colleagues on the 
other side of the aisle to try to focus on an expansion of Medicare 
benefits, which we believe needs to be done, before we have saved the 
system.
  This bill is about fixing Medicare. We fixed it in 1997. We slowed an 
11 percent rate of growth in Medicare to 5.5 percent. Unfortunately, 
because our estimates were off, and the administration has chosen to 
implement that bill in a harsh fashion, we must come back today and add 
money back in.
  I am very proud, and I commend the gentleman from California (Mr. 
Thomas) and the staff for the detailed way they have added money back 
in at critical points and provided much greater flexibility so our 
institutions can evolve to offer the quality care our seniors need 
throughout America, through this legislation.
  I am proud because it retains our commitment to slowing the rate of 
growth in Medicare so it will be sustainable. But it puts the money 
back in that our community providers desperately need.
  I am very proud of the detailed way in which it addresses the 
problems in the nursing homes and in the home health agencies and the 
hospitals, not just so that people will be there to give the care, but 
so that the medically complex patient, the person whose costs are very 
high, whose medical problems are very complex will get the care they 
need.
  I regret to say the administration provided no detailed proposals, 
and the Democrats on the committee provided no detailed proposals until 
the day of the mark-up. Only the chairman has provided a comprehensive 
approach. So while there are other processes that would be fruitful, 
the product we have before us is outstanding. I urge my colleagues to 
support it.
  I want to thank Chairman Thomas and the Health Subcommittee staff for 
their hard work on bringing this legislation to the floor.
  My work on this issue started back in January when I visited all the 
hospitals in my district and several nursing homes and home health 
agencies.
  The resounding message from those who provide the life-saving health 
services throughout my district was that the Balanced Budget Act had 
reached way beyond congressional intent and was threatening the very 
existence of our efficient, high quality community health care 
providers.
  Most importantly, this legislation will help ensure that critically 
ill patients get access to Medicare services and that our health care 
providers will continue to be able to serve the communities that 
support them.
  This legislation today is in direct response to the concerns I heard 
from community-based nursing homes in my district that are having a 
hard time caring for medically complex patients and managing the 
increased administrative costs of the new prospective payment system. I 
spent long hours talking with Patricia Walden and Carol Barno at the 
Southington Care Center, Sister Deborah and Sister Honorata at 
Monsignor Bojnowski Manor, and John Horstman at Geer Nursing and 
Rehabilitation Center.
  This legislation also responds to the concerns that I hear from 
teaching hospitals in my district, Larry Tanner at New Britain General 
Hospital, Dr. Peter Dekkers at the University of Connecticut Health 
Center and David D'Eramo at St. Francis Hospital. It is also in 
response to small community providers, Rosanne Griswold at Charlotte 
Hungerford Hospital, Tom Kennedy at Bristol Hospital and Michael 
Gallacher at Sharon Hospital.
  Finally, this legislation addresses the concerns of the 6th 
district's caring, efficient home health providers, like Ellen Rothberg 
at VNA Health Care, MaryJane Corn at the VNA of Central Connecticut and 
Anne Dolson at the Greater Bristol VNA. These providers helped me 
understand the enormous complexity of the interim payment system and 
the difficulty they were having in providing services to the sickest 
seniors.
  In 1997 Congress adopted the most significant reforms to Medicare 
since the program began. The reforms were absolutely necessary because 
the program was galloping toward bankruptcy. Already in 1997, it was 
paying out more for services than it collected in payroll taxes and 
premiums. Medicare spending was exploding, especially in the areas of 
home health and skilled nursing facility costs, and as it reached the 
unsustainable level of 11% growth per year, the BBA reforms were 
adopted to cut this growth rate in half--from 11% to 5.5%; a modest and 
responsible goal.
  Today's legislation is essential because the impact of the BBA--both 
legislative and because of the way the Administration has chose

[[Page H11617]]

to implement it--is much more significant than Congress intended. The 
BBA was projected to save $106 billion over 5 years. The real savings 
that will be achieved are about $100 billion above that. While the goal 
was to slow the rate of growth to 5.5%, growth has dropped to less than 
2% per year, though the number of seniors and of frail elderly 
continues to grow.
  Mr. Speaker, this bill makes the critical adjustments necessary to 
assure the ability of our community hospitals, home health care 
agencies, and nursing homes to provide the high quality care Medicare 
is required to provide to our senior citizens. Equally important, this 
bill assures the care needed by critically ill seniors with complex, 
high-cost medical problems.
  I urge support of this important legislation.
  Mr. STARK. Mr. Speaker, noting that the gentlewoman from Connecticut 
(Mrs. Johnson) did not respond to the question of why she voted to deny 
seniors a medical drug benefit, I yield 1\1/2\ minutes to the gentleman 
from Wisconsin (Mr. Kleczka).
  Mr. KLECZKA. Mr. Speaker, 2 years ago, the Medicare Trust Fund was 
projected to become insolvent by year 2001. To address this problem, as 
we were told, Congress passed the Balanced Budget Act of 1997.
  In March of this year, it was estimated that the Medicare Trust Fund 
would be solvent until year 2015. This dramatic improvement is largely 
due to changes in reimbursements paid to health care providers made by 
the BBA.
  While the BBA can be credited with increasing the solvency of the 
trust fund, providers have expressed concern that the cuts had hurt 
that ability to care for patients. We have all heard about stroke 
victims unable to get rehabilitation services they need. We have all 
heard about hospitals unable to find nursing homes to care for 
ventilator patients. Some of the most vulnerable patients in the 
Medicare program have been the hardest hit by these changes.
  The legislation before us today takes important steps to address 
these problems. It provides more money for therapy services. It 
increases reimbursement to nursing homes who care for medically complex 
patients. It also includes funds for hospitals, home health agencies, 
and Medicare health maintenance organizations. These changes help 
ensure that the Medicare program will continue to meet the commitment 
and provide quality care to our Nation's seniors.
  The Medicare Refinements Act before us today maintains the delicate 
balance between the fiscal concerns of the providers and the long-term 
stability of the Medicare program for generations to come.
  Mr. Speaker, I urge all my colleagues to support this necessary 
legislation.
  Mr. BROWN of Ohio. Mr. Speaker, may I inquire how much time remains 
for each of us.
  The SPEAKER pro tempore (Mr. LaHood). The gentleman from Ohio (Mr. 
Brown) has 5\1/2\ minutes remaining. The gentleman from California (Mr. 
Stark) has 4\1/2\ minutes remaining. The gentleman from California (Mr. 
Thomas) has 10 minutes remaining.
  Mr. BROWN of Ohio. Mr. Speaker, I yield such time as he may consume 
to the gentleman from Maine (Mr. Baldacci).
  (Mr. BALDACCI asked and was given permission to revise and extend his 
remarks.)
  Mr. BALDACCI. Mr. Speaker, I thank the gentleman from Ohio for this 
courtesy. I rise in support of the legislation as a beginning to build 
on down the road for future changes.
  Mr. Speaker, I support this very important legislation which will 
correct some of the unintended consequences of the Balanced Budget Act 
of 1997 cuts on Medicare reimbursements. Along with the assurances from 
the President that further alterations can be made administratively, I 
hope that health care providers, particular those in rural areas such 
as my own, will be afforded relief so that services to seniors will not 
be diminished. With the implementation of BBA Medicare cuts, Maine 
hospitals alone will lose $338 million over 5 years. This legislation 
provides us with the first step towards restoring some of these deep 
cuts.
  Implementation of the BBA and a slowing in the growth in spending by 
Medicare has ensured that the solvency of the Medicare Trust Fund is 
extended another seven years, until 2015. In fact, there was no growth 
in spending in the Medicare program for the first quarter of this year. 
This is good news and provides us with the flexibility to improve some 
of the harmful provisions which threaten care to seniors.
  Rural areas, in particular, have suffered under the BBA. As a member 
of the Rural Health Care Coalition, I was very pleased to see portions 
of the Triple A bill, H.R. 1344, included in H.R. 3075. I thank 
Chairman Thomas for his attention to the special needs of rural areas. 
A good portion of this bill is dedicated to allowing for more 
flexibility for rural health institutions. These facilities are the 
backbone of care in Maine, and their survival is of primary importance 
to me.
  One area which has been of particular concern to me has been the very 
harmful effects of the BBA on the home health industry. In Maine, 
agencies are under significant financial stress. The burden of my home 
health agencies have been asked to bear is extreme, especially when 
considering that the losses are spread among only 40 providers in the 
state. On a nationwide scale, the Department of Health and Human 
Services recently released a study which shows that the very sickest of 
seniors are having difficulty accessing home health care. I am 
encouraged by the direction this legislation takes to address the most 
harmful BBA provisions regarding home health care.
  Another rural concern is the future implementation of the outpatient 
Prospective Payment System. By HCFA's own admission in the May 7 
published rule, rural hospitals will take the biggest hit in 
reimbursements from the outpatient PPS. The total reduction in the 
first year for all institutions will be $900 million, or a 5.7% average 
reduction per facility. The outlier adjustment is a good beginning to 
addressing this issue, though much more work must be done to ensure 
hospitals can meet the burdens of such cuts.
  One final issue I would like to touch on is the reimbursement for 
hospitals training physicians, especially in rural areas, where there 
remain significant physician shortages. I am pleased to see that a 
portion of my GME technical corrections legislation, H.R. 1222, was 
included in the BBA Refinement Act. In particular, the adjustments 
allowed for upwards to 30% growth in resident limits and the inclusion 
of rural training tracks recognize the need for increased flexibility 
for rural areas to address physicians shortages are extremely positive 
steps. However, there exists a significant provision of H.R. 1222 which 
have been left out of this bill. Numerous hospitals have had their 
residency limits lowered because the BBA fails to count all of a 
programs' residents. For example, a resident who was on medical leave 
in 1996 or who was training in another facility cannot be counted 
because he or she was not physically ``in the hospital.'' Thus, many 
hospitals are facing an artificially low cap that does not reflect the 
true number of residents enrolled. This provision is contained in the 
Senate version of the BBA corrections bill, and I hope that conferees 
will adopt the entire language of the bill H.R. 1222 in the conference 
report.
  Finally, I must voice my concern with one provision of H.R. 3075 
which would alter the Direct GME payments. Unlike the other provisions 
of this bill, the alteration in determining the Direct GME payments to 
facilities does not correct a harmful BBA provision. It is unclear to 
me why this provision was included in H.R. 3075, and I am very wary of 
the shifting of resources that will result from some hospitals to 
others. I hope that conferees do not include this provision, as it does 
not have a place in this corrective legislation, there has been no 
opportunity to debate this new adjustment, nor is it clear how specific 
institutions will fare under the adjusted DGME payments.
  Mr. Speaker, the corrections contained in H.R. 3075 are moderate, but 
essential to rural health care providers who serve the elderly. Through 
technical refinements we are beginning the process to ensure providers 
are reimbursed fairly for the services they furnish Medicare 
beneficiaries. I trust that we will continue to rework these 
reimbursement levels, through future Medicare reform legislation, in 
order to maintain the best and most efficient health care to our 
seniors.
  Mr. BROWN of Ohio. Mr. Speaker, I yield 1 minute to the gentleman 
from California (Mr. Waxman).
  Mr. WAXMAN. Mr. Speaker, in 1997, we knew there was concern about the 
long-term financial health of Medicare, because we knew the baby boom 
generation would soon became eligible for the program. But what did we 
do? We slashed Medicare payments to providers of care far beyond what 
was sensible--not to use that money for Medicare, but in order to take 
it and use it for tax cuts. Now we are faced with the consequences of 
that action.
  But today we are attempting to remedy some of the effects of that law 
by a process that is just as hasty and imperfect.
  And so we do not know if we are really addressing the problems 
satisfactorily. What we do know is we did not do anything in this 
Congress nor in this bill to assure the viability of the

[[Page H11618]]

Medicare program as the President proposed to do. We are certainly not 
doing anything to address the needs of the seniors on Medicare to 
provide prescription drugs for them.
  This is both unfair and irresponsible. We are not dealing with some 
small program that has limited impact. What we do will affect millions 
of Medicare beneficiaries and virtually all health providers in this 
country-teaching hospitals, home health providers, rural and inner city 
institutions--all of them are affected.
  Of course I will vote for this bill because it is the only choice 
before us, and because we clearly need to remedy some of the most 
severe problems caused by the Balanced Budget Act of 1997.
  But this process is wrong.
  The Republican majority has denied us the opportunity to provide help 
for Medicare beneficiaries to secure more affordable drugs. We could 
and should be voting today to stop the discrimination our seniors face 
when they are charged prices frequently more than a hundred percent 
greater than HMOs or favored buyers secure.
  My Government Reform staff has conducted more than 140 surveys in 
Members' districts throughout the country, and we have found this price 
discrimination against seniors over and over again. They pay more than 
our neighbors in Canada, they pay more than the Federal government, 
they pay more than HMOs--and they pay much more than they can afford.
  We need to add a prescription drug benefit to Medicare for all 
beneficiaries. But until we do, we at least have to stop the price 
discrimination against seniors. This bill should have provided the 
opportunity to do so.
  Why is the majority blocking the effort to offer an amendment to do 
that and help seniors everywhere? I ask my Republican colleagues: what 
are they afraid of? Are they afraid to let Medicare beneficiaries know 
where they stand on drug company price discrimination against seniors?
  Medicare beneficiaries and providers deserve better than the hasty 
and limited action we take today.
  Mr. THOMAS. Mr. Speaker, it is my pleasure to yield such time as he 
may consume to the gentleman from Florida (Mr. Canady).
  (Mr. CANADY of Florida asked and was given permission to revise and 
extend his remarks.)
  Mr. CANADY of Florida. Mr. Speaker, I rise in strong support of this 
important legislation.
  In addition to making adjustments in Medicare payment policies 
instituted by the Balanced Budget Act of 1997, this bill addresses two 
issues of particular concern to me and to the 12th District of Florida.
  Since 1996 I have been working to draw attention to what I believe is 
an arbitrary provision in the Medicare statute that provides for 
beneficiaries with organ transplants to receive immunosuppressive drugs 
for only 36 months. The policy--which was originally brought to may 
attention by a constituent--is amazingly short-sighted since organ 
recipients need these prohibitively expensive but essential anti-
rejection drugs for an unlimited period of time. If transplant patients 
do not have access to these drugs and maintain a proper dosage regimen, 
they will ultimately reject their organ and potentially lose their 
life. Ironically, Medicare policy does cover dialysis, re-
transplantation, and the hospitalization and medical costs associated 
with organ rejection--each of which are more costly than the average 
cost of immunosuppressive drugs for one year. With the strong support 
and assistance of my colleague from Florida, Karen Thurman, and 
interested groups such as the National Kidney Foundation, I introduced 
the Immunosuppressive Drug coverage Extension Act earlier this year. 
Since its introduction, 263 of my colleagues from both sides of the 
aisle have cosponsored it. I am very grateful to see that the Medicare 
package before us today includes a provision that, while not identical 
to my legislation, is an effort to improve upon Medicare's current 
immunosupressive drug coverage policy. H.R. 3075 includes $200 million 
over the next five years to provide additional drug coverage to 
beneficiaries who have exhausted their original 36 months of coverage.
  While I am convinced that extending beneficiary entitlement to the 
drugs without imposing a capped dollar amount is appropriate, I 
appreciate the committees' concerns that more definitive data and cost 
analysis is needed before taking a more permanent step. To the chairmen 
of the House health care committees and to the cosponsors of my bill 
and on behalf of thousands of organ recipients, I want to say thank you 
for recognizing the need to improve Medicare's existing policy in this 
area.
  Secondly, since early 1998, I have been extremely concerned about the 
exodus of managed care plans from the Medicare program. In Polk County, 
in my district, all four operating managed care plans pulled up stakes 
effective in 1999, suddenly leaving approximately 6,000 beneficiaries 
without their managed care plan. Ninety-three other counties in the 
U.S. were also left with no plans. Insurers pointed to low 
reimbursement rates and provisions of the Balanced Budget Act of 1997--
the very law Congress intended to expand beneficiary choice--as the 
reason for numerous departures from counties around the country. While 
some counties enjoy extremely high payment rates and the presence of 
several managed care plans, others (like Polk) have a 
disproportionately low payment rate and no managed care plans. It 
doesn't take much examination to see that this is patently unfair. The 
Congress has an obligation to answer to the over 60,000 beneficiaries 
nationwide who, after 1998, were left with no managed care plans to 
choose from; to the approximately 350,000 others whose plan choices 
were reduced; and to the thousands of beneficiaries in over 2,000 
counties who didn't even have a managed care choice in 1998 in the 
first place.
  I am pleased to see several provisions included in the Medicare bill 
before us today that are aimed at the inequity I've described. The bill 
is a very positive development. The provisions to case burdensome 
requirements and deadlines imposed on managed care plans, and 
particularly the language to give incentives to plans to enter counties 
left with no managed care choices, promise greater equity for all 
Medicare beneficiaries.
  Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 1 minute to the 
gentlewoman from Washington (Ms. Dunn), a member of the Committee on 
Ways and Means and someone who supplied a very important component to 
this bill.
  Ms. DUNN. Mr. Speaker, as we continue to make major progress in 
reforming programs to make sure there is greater access in health care, 
we want to also make sure that nobody falls through the cracks.
  So that is why I rise in enthusiastic support today for this bill to 
provide essential relief to seniors that are affected by unintended 
reductions in Medicare under the BBA.
  I want to thank the gentleman from California (Chairman Thomas) for 
his willingness to work with me on several provisions that are 
important for women's health and to the pace of medical innovation.
  First, this bill doubles the reimbursement for Pap smears. This 
reimbursement rate has not been increased in over a decade. It really 
is essential to maintain access to one of the most important preventive 
measures for detecting cervical cancer.
  Secondly, the bill extends Pap smear reimbursements to automated 
screening technologies. These are important innovations in health care 
that will make it possible to identify cervical cancer at an early 
stage and with greater accuracy.
  Mr. Speaker, providing incentives to protect the health of women as 
they grow older is one of the most important public policy decisions we 
can make. This bill recognizes that fact and goes a long way toward 
making innovative new treatments available to women.
  Mr. STARK. Mr. Speaker, noting that the gentlewoman from Washington 
(Ms. Dunn), the previous speaker, had joined with Messrs. English, 
Shaw, and Hayworth in voting to deny seniors a free drug benefit 
reduction, I yield 1\1/2\ minutes to the gentleman from Maryland (Mr. 
Cardin).
  Mr. CARDIN. Mr. Speaker, let me thank the gentleman from California 
for yielding me this time.
  Mr. Speaker, the purpose of this bill is to make certain adjustments 
to the 1997 Balanced Budget Act. I applaud the chairman of the 
subcommittee for bringing out a bill that deals with that.
  We have projected Medicare savings in 1997 over 5 years of $115 
billion. In reality, it is going to be closer to $200 billion. This 
bill contains some very important improvements in the Medicare system 
that will deal with the $1,500 therapy cap right now which is denying 
many of our seniors necessary rehabilitative care.
  It will extend the municipal health demonstration project that 
affects thousands of seniors. It will provide help for frail elderly 
and those high acuity nursing home patients. It will help us deal with 
the Medicare Plus choice problems particularly in rural areas of 
getting more HMO participation.
  But, Mr. Speaker, let me say that this is a very important bill that 
I hope

[[Page H11619]]

will pass overwhelmingly on the floor, but there is more that we need 
to do. As has been pointed out, we need Medicare reform, including 
prescription drug benefits. We need to deal with a stable funding 
source for graduate medical education in inflation. I know many people 
share that thought.
  We need to take a look at high acuity patients, particularly from 
long-term care and the special needs of psychiatric hospitals.
  I congratulate all those who are responsible for bringing forward 
this bill. Let us pass it, and then let us work on the other reforms 
that are necessary in order to provide the best possible care to our 
seniors.
  Mr. Speaker, I rise in support of the important Medicare bill before 
us today. In taking the important step of refining many of the Balanced 
Budget Act's Medicare provisions, Congress is acknowledging what so 
many seniors and health care providers have known for a long time now: 
that the 105th Congress made several mistakes in crafting Medicare 
reforms back in 1997. Some of the changes we made restructured the risk 
contracting program, others were designed to reduce provider 
reimbursement levels in several areas. In both categories, the 
consequences have been far different from what we in this body intended 
or expected.
  In 1997, the Congressional Budget Office estimated the Medicare 
reductions at $115 billion over five years. Since that time, we have 
seen evidence that the reductions are closer to $200 billion. The 
effect of this difference on the accessibility and quality of care for 
our seniors transcends budget numbers, however.
  This bill, the Balanced Budget Refinement Act, makes important 
restorations in several key areas that will help our seniors secure the 
medical care they need. It adjusts payments for skilled nursing 
facilities so that the most frail nursing home patients can receive 
additional payments for the ancillary services they require; it helps 
alleviate the arbitrary caps placed on outpatient therapy services, 
which now prevent one of six patients from receiving the care they 
need; it extends the Municipal Health Services Project for one year, 
and it provides very important relief for seniors who rely on home 
health services. I am also very pleased that this bill extends coverage 
of immunosuppresive drugs for transplant patients who are now subject 
to a three-year limit for these life-saving therapies.
  This bill also provides incentives for Medicare+Choice plans to 
participate in lower-cost areas. The Medicare+Choice program was 
designed to expand the private health plan options available to our 
seniors. But two years after BBA's passage, seniors' options have 
diminished rather than increased as many rural areas have lost their 
Medicare HMOs and even in higher cost urban areas, plans are reducing 
benefits and raising premium charges. In some states, there has never 
been a managed care option for seniors. Most health plans cite low 
payment rates as the reason for their lack of participation. This bill 
offers bonus payments to plans that are willing to enter markets where 
there is no Medicare HMO option today.
  There are additional areas that still must be addressed. I support 
the creation of an all-payer graduate medical education trust fund that 
will save Medicare more than $1 billion annually, while providing a 
steady funding source for the training of our Nation's medical 
professionals. My proposal for BME replaces the current outdated 
payment structure for residents with a fair national standard based on 
actual resident wages. As the dire financial situation of academic 
medical centers worsens, I hope we can reorganize the need to stabilize 
their financial condition. We can act to shore up these institutions 
and ensure the continuation of the high-quality medical workforce we 
enjoy today.
  I also support restoration of the cuts BBA made to hospice care, 
which is an essential part of our effort to provide comprehensive 
medical treatment to the Nation's elderly and disabled. I support 
providing adequate payments for all frail patients in nursing homes, 
including rehabilitation categories whose costs will continue to be 
inadequately reimbursed even after passage of this bill. And, I support 
the creation of a drug benefit for fee-for-service Medicare that 
provides all beneficiaries, not just those with access to an HMO, with 
coverage for outpatient prescription drugs. These are key issues that 
Congress will need to be addressed further next year.
  Earlier this year, I urged Congress and the Administration to join in 
a united effort to address these matters. I am proud that Congress has 
taken this crucial step today and I also applaud the Administration for 
working with Congress and moving to take the administrative measures 
that are within its power. I urge my colleagues to support this bill 
and help us move forward to restore crucial health services to 
America's Medicare beneficiaries.
  Mr. BROWN of Ohio. Mr. Speaker, I yield 1 minute to the gentleman 
from Florida (Mr. Deutsch).
  Mr. DEUTSCH. Mr. Speaker, let us remember specifically why we are 
here. We are here because we made mistakes, but we made mistakes with 
the Republican majority in terms of some of the draconian cuts that 
they were attempting.
  We still do not deal with the fundamental issues. We do not deal with 
the fundamental issues that literally thousands of Americans are, in 
fact, being permanently damaged because they have reached therapy caps 
in terms of stroke victims who will remain paralyzed forever because of 
the inaction in this Congress that remains in this bill.
  But let us talk about what we are not doing. What we are not doing is 
we are not facing any of the real fundamental issues facing health care 
in America. My colleagues in the majority are afraid of those issues.
  There is a procedural game that is being played today, which is a 
suspension vote, which rejects the ability of the minority to do a 
motion to recommit that would probably overwhelmingly pass in this 
Chamber on prescription drug coverage for Medicare. My colleagues on 
the other side are afraid of that vote. They are afraid of giving the 
American people what they need and they deserve. They are afraid of 
fundamental change in the Medicare system. They are afraid of the 
Patients' Bill of Rights bill. They are afraid of putting the sponsor 
of that bill on the conference committee.

                              {time}  1115

  Mr. THOMAS. Mr. Speaker, I yield 1 minute to the gentleman from 
Louisiana (Mr. McCrery), a member of the Subcommittee on Health of the 
Committee on Ways and Means, again without whose tireless work this 
bill would not be possible.
  Mr. McCRERY. Mr. Speaker, I thank the gentleman for yielding me this 
time. A few moments ago our colleague, the gentleman from California 
(Mr. Waxman), was on the floor and said that the cuts in the BBA were 
irresponsible. Well, they certainly have gone further than most of us 
would have liked, but the fact is those cuts, that legislation, was a 
joint effort between Democrats and Republicans, the White House and the 
Congress, so we ought not be down here denigrating anybody for the good 
faith effort that was entered into to try to save the Medicare system.
  We now know that some mistakes were made; that some of the cuts went 
too far. That is the purpose of this legislation on the floor today, 
and we have worked together again, Democrats and Republicans, to try to 
repair that damage in the most responsible way.
  What is irresponsible, though, is to stand up and call for free 
drugs, free prescription drugs. Americans, senior Americans, know that 
drugs are not free. Prescription drugs are not free, and we ought not 
promise something that is impossible. We ought to be responsible about 
crafting a Medicare program that, yes, includes a prescription drug 
program but not to stand up here and say, let us vote for free 
prescription drugs. That is irresponsible.
  Mr. STARK. Mr. Speaker, I yield 1\1/2\ minutes to the gentlewoman 
from Florida (Mrs. Thurman), the author of the amendment, that would 
have given free or discounted prescription drugs, not free, free to the 
government, but a deduction or a reduction in the cost to the seniors.
  I would note, Mr. Speaker, that the previous speaker, the gentleman 
from Louisiana (Mr. McCrery), also voted to deny the seniors in his 
district a discount on prescription drugs at no cost to the government.
  Mrs. THURMAN. Mr. Speaker, I thank the gentleman for yielding me this 
time, and I appreciate his remarks. I too want to reiterate that was a 
discount, not free, and it would have been just like we do with 
Medicaid and VA.
  And I want to bring to the attention here today that just yesterday 
there was a report that was released that actually said that drugs have 
gone up 25 percent, which is two times the inflation. So many of these 
drugs have continued to rise for no apparent reason.
  I do want to say, though, that I am pleased in some respects, would 
have liked to have done a little bit more, obviously, but I am somewhat 
happy with the IME, the DSH, we have done some

[[Page H11620]]

things in here for skilled nursing facilities, and I hope that we will 
concur with the Senate on the hospice issue.
  I want to take a moment to thank all the members of the committee who 
listened to my plea and who have helped me with the anti-rejection drug 
issue that is in here. My colleagues will realize, once we get some of 
this other report back, once we start spending this money, that this 
will save lives. It was good common sense. It will save money to our 
Medicare system. And I also want to say we did the right thing when we 
did the composite rate on dialysis.
  I do want to suggest, though, that I hope in this coming year that we 
can truly sit down on an issue that is so important, especially after 
the report that came out yesterday, that we really have got to do 
something on. Because the other issue that was brought out that was an 
advertisement by PhRMA which said, look at all of these wonderful drugs 
we are doing. They cannot afford them.
  Mr. BROWN of Ohio. Mr. Speaker, I yield such time as he may consume 
to the gentleman from Texas (Mr. Green), a fellow member of the 
Subcommittee on Health.
  (Mr. GREEN of Texas asked and was given permission to revise and 
extend his remarks.)
  Mr. GREEN of Texas. Mr. Speaker, I thank the gentleman for yielding 
me this time.
  I am pleased to support H.R. 3075, the Medicare, Medicaid and State 
Childrens Health Insurance Program Refinement Act of 1999.
  This bill takes an important first step towards ensuring that cancer 
patients have access to the best medical treatments available.
  Under the BBA of 1997, the Health Care Financing Administration was 
directed to develop a hospital outpatient prospective payment system 
(PPS). Under their original proposal, reimbursements for cancer drugs 
would have been dangerously low--potentially denying Medicare patients 
access to the most effective treatments.
  However, under H.R. 3075, our nation's seniors with cancer will be 
protected because our nations cancer hospital's, including MD Anderson 
in Houston, will be exempt from the PPS for two years.
  This additional time will give the medical community and Members of 
Congress time to evaluate the plan based on actual practices in other 
hospitals across the country.
  Moreover, because HCFA has recognized the flaws in their original 
proposal, they have committed to redevelop the PPS to better reflect 
the needs of Medicare patients everywhere. According to HCFA, they are 
preparing to substantially increase the number of payment categories 
for cancer drugs, which will better reflect the high cost of innovative 
treatments and new drug therapies.
  This bill is better than nothing--but leaves a lot of issues 
neglected including senior citizen prescription medication needs and 
making medicine better serve the needs of todays and tomorrows senior 
citizens.
  Today represents the way this process should work--Congress and the 
Administration working together to meet the needs of the American 
people.
  Mr. BROWN of Ohio. Mr. Speaker, I yield 1 minute to the gentleman 
from New York (Mr. Engel).
  Mr. THOMAS. Mr. Speaker, I yield 15 seconds to the gentleman from New 
York (Mr. Engel).
  Mr. ENGEL. Mr. Speaker, if this were only about fixing Medicare, it 
would be fine, but a provision that was entered into this bill wreaks 
havoc with teaching hospitals.
  This proposal results in no savings but would shift millions of 
direct medical education dollars between hospitals, with no 
consideration as to the financial needs of a hospital or the type of 
patient they serve. As a result, $250 million in Medicare funds will be 
transferred from 400 teaching hospitals across the country to 600 
others. This will actually cost $300 million extra.
  Now, BBA relief legislation was supposed to restore Medicare cuts to 
hospitals, not initiate new cuts to hospitals. That is what it does to 
a major teaching hospital in my district, and that is what it does 
across the country. This affects Democrats, Republicans, people 
representing all different places across the country. This provision 
should not be in here.
  I know my friend from California (Mr. Thomas) put in the provision 
because it helps his district, but it should not be done this way. 
There should not be winners and losers here, and the payment should not 
be made at the national rate.
  Mr. Speaker, I provide for the Record a letter addressed to the 
Chairman of the Subcommittee on Health of the Committee on Ways and 
Means from one of our colleagues, the gentleman from Georgia (Mr. 
Kingston) dated November 3, 1999, and signed by numerous other 
colleagues.

                                     House of Representatives,

                                 Washington, DC, November 3, 1999.
     Hon. William M. Thomas,
     Chairman, Ways and Means Subcommittee on Health, Washington, 
         DC.
       Dear Chairman Thomas: We are very concerned about two 
     provisions in the House Balanced Budget Act (BBA) Relief 
     package. We fervently request that these provisions be 
     changed because of their serious, disproportionately harmful 
     effects on smaller teaching hospitals.
       Specifically, the Indirect Medical Education payment freeze 
     proposal and the per resident averaging provision for 
     Graduate Medical Education would reduce reimbursements for 
     hospitals in our districts by millions of dollars per year. 
     It is ironic that a bill designed to provide relief to 
     hospitals hurt more by BBA than projected would, in fact, 
     inflict even deeper harm.
       As you know, H.R. 3075 contains a provision that would 
     change the Medicare per Resident Direct Medical Education 
     payment from a hospital-specific rate to an amount based on a 
     national average per resident. This provision penalizes 
     smaller teaching hospital programs because the fixed costs of 
     operating a fully accredited residency program is spread over 
     a smaller number of residents. It rewards programs that train 
     large numbers of residents, regardless of community need. We 
     further question its need, as it is budget-neutral at the 
     national level--it simply shifts funding from smaller 
     programs to the larger programs.
       Unfortunately, the second provision is even more harmful. 
     The House bill, unlike the Senate, freezes the relief rate 
     from BBA reductions in IME at six percent for one year, then 
     decreases the rate to 5.5 percent. Proceeding further with 
     this proposal will result in multi-million dollar penalties 
     for hospitals across the country. We ask that the House bill 
     be modified to raise the IME relief from 6.0 to 6.5 percent.
       Furthermore, we strongly oppose retaining a provision for 
     per resident averaging and ask that it be eliminated in the 
     House bill before it is brought to the floor or via a 
     manager's amendment during floor consideration.
       Thank you very much for your serious consideration of these 
     concerns. We must ensure that legislation intending to 
     provide relief for hospitals does so fairly for all 
     facilities and avoids inflicting additional harm.
           Sincerely,
         Jack Kingston, Nathan Deal, Mac Collins, Charles Norwood, 
           Jim Talent, Sherwood Boehlert, David Vitter, Lee Terry, 
           Jim DeMint, Sue Myrick, Jack Quinn, Todd Tiahart, Pete 
           King, Judy Biggert, Billy Tauzin, Robert Ehrlich, Jr., 
           Connie Morella

  Mr. KINGSTON. Mr. Speaker, will the gentleman yield?
  Mr. ENGEL. I yield to the gentleman from Georgia.
  Mr. KINGSTON. Mr. Speaker, I thank the gentlemen from New York and 
California, and I want to say this is a bipartisan problem.
  We do thank the gentleman from California for trying to correct some 
of the problems with the BBA, but, on the other hand, it creates a new 
problem with the indirect medical education reimbursements and it 
changes the formula to base it on a national average per residence, 
which in some areas causes great losses of money.
  Mr. THOMAS. Mr. Speaker, I yield 1 minute to the gentleman from 
Florida (Mr. Shaw), the chairman of the Subcommittee on Social Security 
of the Committee on Ways and Means, who represents the district with 
the greatest number of seniors in the United States.
  Mr. SHAW. Mr. Speaker, today I rise, as I think every Member of the 
House on both sides of the aisle does, in strong support of H.R. 3075, 
the Medicare Balanced Budget Refinement Act of 1999. This is a bill 
that is of critical importance to the citizens of my district, my 
State, and, indeed, all across the United States.
  I would like to commend the chairman of the Subcommittee on Health, 
the gentleman from California (Mr. Thomas), and the gentleman from 
Texas (Mr. Archer), chairman of the full Committee on Ways and Means, 
for expediting this effort to restore desperately needed funds to 
Medicare providers, who have been caring for Medicare patients day in 
and day out, often for Medicare payments that are not adequate to cover 
the cost of providing these services.
  In my district, for example, the Sylvester Cancer Hospital is 
currently losing approximately $700,000 a year caring for Medicare 
cancer patients and

[[Page H11621]]

hospices which cares for the most vulnerable terminally ill Medicare 
patients are unable to provide newest medications to comfort these 
patients under the current Medicare reimbursement level.
  I have been hearing from many, many concerned citizens--nursing 
homes, physical therapists, home health providers, physicians and 
hospitals regarding the importance of acting quickly to restore some of 
the 1997 BBA cuts that are already detrimentally impacting patient 
care. I thank my good friends the Health Subcommittee Chairman Bill 
Thomas and Full Committee Chairman Bill Archer for moving this 
important Medicare rescue bill so quickly. I urge my colleagues to 
unanimously support H.R. 3075--it doesn't provide all the Medicare 
fixes that are needed--but begins to address the most urgent needs 
immediately.
  Mr. Speaker, there are many things we have to do next year and work 
on, one is the question of drugs, and we will certainly look forward to 
working, hopefully in cooperation with the minority, in order to come 
up with a good bill to give our seniors further relief.
  Mr. THOMAS. Mr. Speaker, I yield 1\1/4\ minutes to the gentleman from 
Iowa (Mr. Nussle), a member of the Committee on Ways and Means and 
someone who has worked on this bill especially for rural hospitals.
  Mr. NUSSLE. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  I guess I should not be surprised that there are some who run to the 
floor today and try to make political issues for the next campaign. 
None of us should be surprised by that because it has been done so many 
times in the past. Whether it is prescription drugs, no, there is no 
debate today on that issue. There should be. Should it be on Medicare 
reform? You bet. HMO reform? We have had it, and we are going to have 
more debate. All of that debate needs to occur.
  But while some want to preserve those issues for a campaign, my 
hospitals are ready to close. Because this is the most important issue 
in health care that we face this year. We cannot wait while Members cut 
30-second spots for their campaigns and let my hospitals close. Because 
I tell my colleagues that if my hospital closes, my seniors, my 
neighbors and I do not have health care.
  So while my colleagues on the other side want to fiddle around, those 
who have come down here to do just that, our hospitals across the 
country are in jeopardy of closing. So I would ask those individuals on 
the other side to stop the politics and let us pass this bill.
  And I would end my debate by just suggesting that the rural health 
care portions of this bill are going so far in order to make us whole 
over the 1997 cuts, cuts that were not meant to have the kind of impact 
that they have had, and I commend the committee for doing the reform.
  Mr. THOMAS. Mr. Speaker, I yield 1 minute to the gentleman from 
Arizona (Mr. Hayworth), a member of the Committee on Ways and Means.
  (Mr. HAYWORTH asked and was given permission to revise and extend his 
remarks.)
  Mr. HAYWORTH. Mr. Speaker, I thank the gentleman for yielding me this 
time, the chairman of the Subcommittee on Health, and I would echo the 
comments of my good friend, the gentleman from Iowa (Mr. Nussle), and 
simply say that for rural hospitals this refining piece of legislation 
is absolutely important.
  I would agree with the portion of the statement of the gentlewoman 
from Florida that when it comes to immunosuppressive drugs for 
transplant patients, this legislation is vitally important. When it 
comes to teaching hospitals, this legislation is vitally important.
  When it comes to accountability in the legislative branch, and let us 
be honest about the budget negotiations in 1997, many of these 
provisions were not advocated by either the majority or the minority 
here but at the other end of Pennsylvania Avenue. When we choose to 
correct, we are being responsive to our constituents.
  I welcome constructive comments. We will save the politicking for a 
campaign. Today we do the people's business, restoring rural health 
care, restoring home health care, expanding immunosuppressive drugs and 
making a difference with a prescription for success for health care and 
the American people.
  Mr. BROWN of Ohio. Mr. Speaker, I yield 1\3/4\ minutes to the 
gentleman from Massachusetts (Mr. Markey).
  Mr. MARKEY. Mr. Speaker, this bill is inadequate. The Republicans 
have been standing on the floor for the last month holding up a penny 
saying, oh, people are not willing to cut a penny out of the entire 
Federal budget, although it would affect, ironically, many of the 
programs that they now are out on the floor saying they care so much 
about.
  But in 1997 they led the effort to cut Medicare by what they said was 
going to be $110 billion. It has wound up now at $210 billion and, at 
the same time, they had a tax break out here on the floor for the 
wealthiest Americans for $275 billion over 10 years. Now that was a 
nice package in 1997. A tax break of $275 billion, that is the law for 
the wealthiest in America; cut Medicare by $200 billion, just over 5 
years, and then come back in 2 years and say, look at the great 
surplus, look where it came from.
  What do they say to the people on Medicare? We are going to give back 
a nickel out of that $200 billion cut in Medicare. To the hospitals, to 
the home health servers, to the communities across the country, to the 
people who are sick in our country, and old, they get back a nickel. 
And what do they do with the rest of the surplus? Oh, they have a new 
idea, an $800 billion tax break for the wealthiest in America over the 
next 10 years.
  So who is funding this huge tax break idea, the money that goes back 
to the communities, actually to the wealthy under their plan? The 
people who are funding it are people who are in nursing homes. The 
people who are funding it are people who they cut viciously, this 
program. Hospitals and nursing homes are hemorrhaging and they want to 
put a Band-Aid on it today.
  Mr. THOMAS. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Wisconsin (Mr. Ryan).
  (Mr. RYAN of Wisconsin asked and was given permission to revise and 
extend his remarks.)
  Mr. RYAN of Wisconsin. Mr. Speaker, I rise in support of the bill.
  Mr. Speaker, this bill is vital to the successful continuation of 
Medicare as we know it. This bill restores some of the changes that 
were made to the Medicare program back in 1997 in the Balanced Budget 
Act.
  In the district I serve, several Medicare+Choice providers announced 
that they would terminate services for seniors. The beneficiaries were 
understandably devastated. I held a town hall meeting in August of this 
year to bring together the health plans, HCFA and Medicare 
beneficiaries. The response was overwhelming.
  Some of the beneficiaries decided they were not going to lose their 
managed care coverage without a fight. Joyce Scantling, of Racine, WI 
has been leading this fight and has worked tirelessly with 50 or 60 
other beneficiaries to rally their support around Medicare legislation 
to fix the reimbursement rates. I hold in my hand thousands of 
signatures of Wisconsin seniors who have contacted me in support of 
providing a fix to Medicare and in support of protecting their choices 
under Medicare.
  This bill restores funding for Medicare+Choice providers, as well as 
hospitals, home health care providers, and skilled nursing facilities. 
It protects the benefits of Medicare beneficiaries like Joyce Scantling 
into the future.
  Mr. Speaker, I believe the current situation with Medicare in this 
country is unacceptable. Wisconsin and other rural states do not 
receive the same reimbursements as the rest of the country; as a result 
of this disparity, seniors in these areas are not entitled to the same 
services as seniors in places like Florida or Texas. Some of these 
areas do not even have a Medicare+Choice option because they cannot 
make it work with the low reimbursement rates that are offered in those 
areas. Seniors in my state should not be entitled to a lower level of 
service than seniors in other parts of the country.
  My ultimate goal is to equalize reimbursement rates nationwide to 
ensure that all seniors, regardless of where they live, would be 
entitled to a choice in Medicare, a choice that would give them the 
services they are entitled to. However, in the meantime, I believe this 
legislation provides the next best alternative because it targets 
resources where they are needed, such as my home state of Wisconsin.
  To this end, I applaud passage of this legislation because I believe 
it will bring Wisconsin closer to receiving fair and equitable 
reimbursements for medical services; this cause is not yet complete, 
however it is a step in the right direction. I will continue to fight 
to ensure

[[Page H11622]]

fair medical coverage for seniors in all parts of this country.
  Mr. THOMAS. Mr. Speaker, I yield myself 1\1/2\ minutes.
  Contrast the speech we just heard on the floor with the statement 
from the White House. Chris Jennings, who is the White House health 
person, said recently, ``We were partners with the Congress when we 
passed the Balanced Budget Act, and we are going to be partners when we 
address the rough edges of that law.''

                              {time}  1130

  I have been pleased with Members on both sides of the aisle in terms 
of their understanding of just what this bill is. It is a refinement 
bill. It is not a reform bill. We still need to address prescription 
drugs. But Members need to remember that the 1997 act created the 
bipartisan Medicare Commission.
  On that Commission, the public and the private members agreed, the 
Senate and the House Members agreed, Democrats and Republicans agreed. 
We had 10 votes. We needed 11. The President had four appointees. Not 
one of the President's appointees supported the reform package, which 
would have integrated prescription drugs into that program.
  In the recent tax bill, there was a tax deduction for prescription 
drugs. The President vetoed that plan.
  We stand ready to sit down tomorrow with the President and any 
Democrats who work in a positive way to deal with integrating 
prescription drugs into Medicare. It needs to be done. But this very 
narrow, very shallow canoe cannot support that kind of an issue today. 
It is a refinement bill.
  I am very pleased with the comments of the Members who understand our 
objective today. This is a modest change. We will continue.
  Mr. STARK. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Rhode Island (Mr. Kennedy).
  (Mr. KENNEDY of Rhode Island asked and was given permission to revise 
and extend his remarks.)
  Mr. KENNEDY of Rhode Island. Mr. Speaker, I oppose this bill because 
it shortens the solvency and the life of Medicare.
  H.R. 3075 increases payments to Medicare providers by approximately 
$11.5 billion over five years. But it is a flawed and irresponsible 
bill.
  It was brought up without the Democrats having any chance to 
negotiate with the Republicans.
  We were not allowed any Democratic amendments, including a 
substitute, which we specifically requested.
  There has been no consultation with Democrats--it is being brought up 
hastily.
  It is being brought up under the suspension of the rules.
  The Republican bill is not paid for. Because it is not paid for the 
bill shortens the solvency of the Medicare Part A trust fund by at 
least a year and increases Part B premiums for seniors. The Republican 
bill will shorten the life of the Medicare Trust Fund.
  A democratic amendment if offered would have paid for the 2.7 billion 
that would have been offset.
  The bill will reduce medicare payments to teaching hospitals. It will 
transfer $250 million in Medicare funds from 400 teaching hospitals. It 
will initiate new cuts against teaching hospitals.
  It does not include language to help seniors with the high cost of 
drugs.
  It does not have the Senate language to strike the $1,500 limit on 
rehabilitation caps and therapies. This is a provision that nursing 
homes need desperately.
  It includes ``deemed status'' for HMO's; this provision will weaken 
our ability to insure quality in HMO's that participate in Medicare.
  Mr. STARK. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, the gentleman from Rhode Island (Mr. Kennedy) said it 
quite eloquently. This bill is not paid for. It spends Social Security 
surplus, shortens the life of the Medicare trust fund, and does not 
deal with, as the committee had an opportunity to deal with, providing 
a discount, a discount of 25 to 50 percent off prescription drugs.
  I would remind people in the Florida area that the gentleman from 
Florida (Mr. Shaw) voted against people getting that discount on their 
prescription drugs at a time when the managed care plans in his area 
are reducing the prescription drug benefits to seniors, as did the 
gentleman from Pennsylvania (Mr. English), as did the gentleman from 
Arizona (Mr. Hayworth). They voted to deny seniors a savings of 25 to 
50 percent at no cost to the Federal Government.
  They intend to support the pharmaceutical industry, whose huge 
political contributions are funding the Republican campaigns. Make no 
doubt about it, they yield to the big men and they will not help the 
seniors who are struggling every day to pay for the prescription drug 
benefits which the Republicans have repeatedly denied. They refused to 
have hearings, and they refused to vote for reasonable legislation.
  They are on the record. Let them deny it. Let them go home and 
explain to their seniors why they are being destituted because they 
cannot get prescription drugs at a reasonable price.
  Vote against the bill in protest.
  Mr. BROWN of Ohio. Mr. Speaker, I yield myself the balance of my 
time.
  Mr. Speaker, no one from the Ways and Means majority has answered why 
they voted against prescription drug discounts.
  We have legislation before this Congress to cut the cost of 
prescription drugs. Yet Republicans will not give us a vote or allow us 
to debate on the floor any of the legislation we have to provide 
discounts while Americans pay two times and three times and four times 
for prescription drugs what people in other countries pay. Remember, 50 
percent of all research and development for prescription drugs in this 
country is paid for by taxpayers. Yet American consumers, America's 
elderly pay twice as much or three times as much as consumers all over 
the world in England and France and everywhere else in the world.
  This bill is okay, Mr. Speaker. We help providers. But most 
importantly, we should pass a patients' bill of rights. We should pass 
prescription drug coverage and prescription drug discounts for 
America's seniors.
  Mr. THOMAS. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Florida (Mr. Foley), a member of the committee.
  (Mr. FOLEY asked and was given permission to revise and extend his 
remarks.)
  Mr. FOLEY. Mr. Speaker, I rise in support of the bill.
  Mr. Speaker, I am pleased that my colleagues and I on the Ways and 
Means Committee were able to craft a bill that addresses some of the 
problems the have arisen through the implementation of the Balanced 
Budget Act.
  I have heard from nursing homes, home health agencies, HMOs, hospital 
administrators, doctors and nurses, and other health care providers 
about their difficulties giving seniors on Medicare adequate care under 
new and sometimes unrealistic financial constraints.
  I have also heard from many of my constituents on Medicare who are 
frustrated and scared by some of the problems that the BBA has created.
  I am happy that we can give back some of the resources that Medicare 
patients desperately need.
  I would like to comment on some of the provisions in the bill;


                             outpatient pps

  I am pleased that we can help hospitals, and specifically hospital 
outpatient departments, by including a provision that is similar to the 
bill I introduced--the Hospital Outpatient Preservation Act.
  This provision gives hospitals a more gradual transition to the 
prospective payment system. I hope this will help them to continue 
offering services that are better provided in an outpatient settings--
services like chemotherapy and psychiatric counseling--so that patients 
can return more quickly to the comfort of their homes.


                     medicare+choice risk adjuster

  I was very concerned to read remarks made by the President, 
expressing his opposition to restoring HCFA's cuts to Medicare managed 
care companies.
  I have 12,500 seniors who are losing their HMO at the end of this 
year and I know that I'm not the only member who has had this 
experience. Many seniors will have to go back to fee-for-service 
because they don't have another HMO in their country.
  Most of my constituents are pleased with their HMO. These plans 
provide prescription drug coverage and other much-needed services that 
traditional Medicare does not cover.
  But these companies are struggling with the high cost of caring for 
Medicare patients in areas where their reimbursements are not high 
enough--especially rural areas.
  When we passed the BBA and started Medicare+Choice, we intended this 
to be a first step in modernizing the Medicare system. If HMOs--that 
had previously been successful

[[Page H11623]]

in the Medicare system--cannot survive under the new reimbursements, 
how can other types of health plans compete?
  This bill contains provisions which will encourage HMOs to enter 
areas where none exist.
  I want to guarantee that we get HMOs into new areas, but also that we 
keep them there and keep them in areas where they are already 
operating.
  This must be an ongoing process. We must look at reimbursement rates 
for rural areas where the cost of health care is high but the 
availability is low.
  We must look at the rates for plans who are treating very sick 
patients.
  We must ensure that HCFA is paying these HMOs fairly and not cutting 
more money from them than Congress intended based on it's own motives 
of those of the Administration.


                    immunosuppressive drug coverage

  Finally, I am pleased to see the inclusion of immunosuppressive drug 
coverage offered by two of my colleagues from Florida, Congressman 
Canady and Congresswoman Thurman.
  It defies logic for Medicare to pay for transplant surgery for a 
Medicare recipient, then cut off the drugs that they need to survive 
this surgery after only three years.
  Receiving a transplant is a tremendous gift--a chance for a new life. 
This chance should not be wasted by arbitrary limits on drug coverage.
  I am glad that we have showed compassion in extending these drug 
benefits.


                               conclusion

  I hope that the President is quick to sign this bill into law so that 
seniors continue to receive the care they need.
  While more fundamental reform in Medicare is necessary, it is 
important to preserve the services of the current system until this is 
achieved.
  Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, first of all, again I want to thank all of the Members 
who worked across the aisle in a bipartisan fashion to fashion this 
refinement bill. I want to thank the staff. It is always difficult when 
we are attempting to provide assistance and it is an unlimited 
resource.
  I want to underscore, this bill is paid for by on-budget surplus. One 
movie role most Members of Congress would not have to audition for was 
the scene in Oliver when he holds his porridge bowl up and says, 
``More, please.'' It is always ``more, please.''
  But this is a refinement, not a reform. As the Members on both sides 
of the aisle have indicated, there needs to be adjustments.
  As a matter of fact, the President of the United States, in a letter 
dated October 19, said, ``We believe that our administrative actions 
can complement legislative modifications to refine BBA payment 
policies. These legislative modifications should be targeted to address 
unintended consequences of the BBA that can expect to adversely affect 
beneficiary access to quality care.''
  He did not say do a prescription drug program. He did not say rewrite 
the program. He said refine it where those areas have unintended 
consequences. That is exactly what this bill does. That is the 
intention and purpose of the bill.
  It just seems to me this is a modest effort, it is a meaningful 
effort. I would urge those who continue to say they want to really deal 
with prescription drugs to sit down with us tomorrow and deal with 
prescription drugs the only responsible way. That is an integrated 
prescription drug program for all our seniors, not an add-on, not a 
tack-on, not something that uses gimmicks like formulas or numbers, but 
a prescription drug program that integrates health care delivery with 
numerical prescription drugs.
  That is what seniors deserve. That is what we offered that the 
President refused to participate in and the Medicare Commission. They 
could have deducted the cost of those in the tax bill that he vetoed. 
But we stand ready tomorrow to sit down and work on this important 
problem.
  Today, let us make those adjustments that the President said were 
needed in areas that we had not fully understood at the time we passed 
the bill needed to be changed.
  Mr. Speaker, let me conclude that more than three dozen 
organizations, including the American Hospital Association, the 
American Medical Association, more than two dozen specialty medical 
groups including the American Geriatrics Society are in support of 
this. It seems to me that this modest adjustment needs to go forward.
  I thank all of those Democrats who spoke harshly but who will, of 
course, vote for the bill. I urge all to vote for the bill.
  Mr. UNDERWOOD. Mr. Speaker, I'm speaking today in support of H.R. 
3075: The Medicare Balanced Budget Refinement Act of 1999. This act 
provides for increased funding for the State Children's Health 
Insurance Program which provides much needed health insurance coverage 
for low-income children.
  The SCHIP is targeted at those uninsured children who live in 
families with income 2-times below the poverty line. This program is 
authorized to match state spending for child health initiatives, 
including Guam.
  This bill modifies the SCHIP allotment formula to provide states with 
a more stable financing mechanism. But, more importantly, H.R. 3075 
corrects and under-representation of territory population that was 
reflected in the original formula established by the Balance Budget Act 
of 1997.
  Under this new provision, H.R. 3075 provides for increased allotments 
for territories which typically receive a pittance of what most states 
are allocated. This bill will authorize an additional $34.2 million for 
each of Fiscal Years 2000-2001, $25.2 million for each of Fiscal Years 
2002-2004; $34.2 million for each of Fiscal Years 2005-2006 and $40 
million for FY 2007 for commonwealths and territories to correct the 
disparity created as a result in the original formula.
  This is an important victory for the territories and commonwealths 
because no American child ought to be left behind no matter where they 
live. I am very pleased that uninsured children who live in Guam, the 
other territories and commonwealths will receive medical insurance that 
is much needed in the islands.
  I would like to take this opportunity to commend my colleague, the 
gentleman from Puerto Rico, Mr. Carlos Romero-Barcelo, who worked 
tirelessly to ensure that the territories and commonwealths were fairly 
represented in this measure. Therefore, I stand in support of H.R. 
3075.
  Mr. MURTHA. Mr. Speaker, I want to acknowledge the hard work on both 
sides of the aisle and both ends of Pennsylvania Avenue that went into 
the arduous task of balancing the budget and arriving at the 1997 
Balanced Budget Agreement.
  However, two years later, I think it is eminently clear that our 
Senior Citizens, as well as all medical patients and health care 
providers cannot sustain the cuts that were made in Medicare and so I 
applaud the efforts of the committees of jurisdiction in moving this 
BBA `refinement' bill before adjourning for the year. It will restore 
some of those cuts and give the hospitals and home health providers 
some hope and some breathing room for the short term. There are a lot 
of people, I think, who won't be laid off for Christmas because of this 
bill.
  This 11.5 billion-dollar Medicare reimbursement adjustment bill marks 
a major step forward in our necessary commitment to provide the care 
needed throughout our health care system. The improvement in 
reimbursements to hospitals, home health agencies, rehabilitation 
services, and nursing homes give a huge boost to the commitment by our 
health care professionals to provide the full, quality care we all want 
to see.
  However, from my continuing conversations with health care 
professionals, I think we also need to recognize that as strong of a 
step forward as this bill is, it is not the last word. We're going to 
have to keep working toward HMO reform, prescription drug coverage, and 
expanding the number of people with health care coverage and further 
adjustments in reimbursement rates.
  During this period of a sustained health economy, we need to 
understand that it is not acceptable to have people out there not 
getting the health care they need.
  I have kept in constant touch with the hospital people, the home 
health care people, the ambulance people and of course, patients--
especially the elderly--in my district during this long period of 
severe belt-tightening, consolidation, layoffs and downsizing that have 
significantly harmed the quality of health care service in rural 
Pennsylvania. There is no question the impact was much more severe than 
was foreseen.
  So, while there is no doubt that this bill is a key to alleviating 
the crushing, and I think to a large extent unexpected, slashing of 
revenues that have caused even small rural hospitals' budgets to drop 
millions of dollars each in just a few years, the struggle to maintain 
adequate health care funding is not over and I will press very hard to 
make sure we'll be addressing this issue again in the very near term.
  Mr. STENHOLM. Mr. Speaker, I am pleased that the House of 
Representatives has recognized the need for considering legislation to 
address the concerns of many of my constituents regarding the impact of 
the medical payment reductions included in the Balanced

[[Page H11624]]

Budget Act of 1997 (BBA). The BBA included provisions which were 
intended to preserve the solvency and integrity of the Medicare program 
for future generations. Unfortunately, some of the provisions of the 
BBA have resulted in unintended consequences as many health care 
providers have indicated that the payment reductions go too far. This 
is particularly problematic in rural areas where health care providers 
have always had to do more with less.
  Along with my colleagues in the House Rural Health Care Coalition, I 
have been working to encourage the Congressional Leadership to consider 
legislation which would help rural health care providers. We introduced 
the Triple A Rural Health Improvement Act as a basis for these 
discussions, and I am pleased to see that some of the important rural 
health provisions from our bill have been included in the legislation 
we are considering today. In particular, this bill contains provisions 
which should help our rural hospitals, nursing homes, home health care 
agencies, rural health clinics, community health centers, and other 
health care providers.
  This bill contains provisions intended to protect low-volume, rural 
hospitals from the disproportionate impact of the hospital outpatient 
prospective payment system, creates an alternative payment system for 
community health centers and rural health clinics, strengthens the 
Medicare Rural Hospital Flexibility/Critical Access Hospital Program, 
expands Graduate Medical Education opportunities in rural settings, and 
permits rural hospitals in urban-defined counties to be recognized as 
rural for purposes of Medicare reimbursement.
  The legislation we are considering today is a step in the right 
direction; however, it is only a first step. We have much more work to 
be done in order to ensure that rural Americans have access to quality, 
affordable health care services, and to preserve the solvency of the 
Medicare program for current and future generations.
  Mr. CALVERT. Mr. Speaker, my district in Riverside County depends on 
a number of facilities to provide quality health care to its residents. 
Many of these facilities have been hit hard by the restrictions that 
were imposed after enactment of the Balanced Budget Act. This 
legislation would increase reimbursements to Skilled Nursing Facilities 
with patients that have medically complex conditions, provide 
flexibility in staffing and procurement priorities at rural hospitals, 
ensure the availability of home health care, and restore funding lost 
from some of the BBA reforms. With these new provisions, we will be 
able to continue to reap the benefit of the savings provided by the BBA 
reforms without driving critical healthcare facilities out of business 
and deteriorating our healthcare infrastructure.
  I support this important bill and would have voted for the bill. 
Unfortunately, I have conflicting responsibilities in may congressional 
district. Specifically, I have been asked to participate in the 
dedication of the National Medal of Honor Memorial at Riverside 
National Cemetery. While I regret having to miss this vote, I look 
forward to honoring the recipients of the Medal of Honor at this 
dedication. We enjoy freedom and liberty today because of their 
dedication and sacrifice for our country.
  Mrs. CHRISTENSEN. Mr. Speaker, I rise today in strong opposition to 
the fact that this very important bill to my constituents and to many 
senior Americans across the country is being brought to the floor under 
the suspension of the rules without any opportunity for members to 
amend the bill.
  Mr. Speaker, all of us will agree that the cuts in Medicare that were 
made under the Balanced Budget Act of 1997 went to far. Literally 
thousands of seniors have lost or are about to lose the opportunity to 
receive vital care in hospitals, nursing homes and home health care 
facilities.
  In my own district, we only have two facilities that provide long 
term care for the elderly. As a result, of the Balanced Budget Act cuts 
in Medicare, both Mentor Clinical Services and Sea View Health Care 
Services have been tethering on the brink of financial collapse because 
of the inadequate reimbursement rate that the Act provided.
  Mr. Speaker, the bill before us today is a start in remedying the 
damage that was done to our seniors two years but it doesn't go far 
enough. The minority should be allowed to offer our amendment to 
provide additional relief. I urge my colleagues on the other side of 
the isle to reconsider their refusal to allow amendments. This is a 
good bill but it doesn't go far enough.
  Mr. RILEY. Mr. Speaker, this legislation is certainly a step in the 
right direction, and that's good, but it simply doesn't solve all the 
problems facing America's hospitals, especially those out in our rural 
areas. Now, if you take a closer look, you'll see that most of these 
changes only delay the problems, they don't solve them. However, they 
do buy us some time, and if we use that time wisely, we can find a 
permanent fix.
  Like me, I'm sure all of you have heard a lot about this from your 
constituents, and rightly so. Only half of the Medicare savings plan 
has taken effect, but already we're seeing some serious problems with 
it--funding for home health care isn't enough, it's getting harder to 
recruit physicians, ambulance services are losing money and we're even 
having trouble funding transportation services for people physically 
unable to drive to their doctors' appointments. Now that's not right. 
We can do better.
  So I do support this legislation today. As I said, it's a step in the 
right direction. However, I strongly urge my colleagues to stay the 
course and help us find a permanent solution to this very serious 
problem before it's too late.
  Mrs. LOWEY. Mr. Speaker, I rise in reluctant opposition to H.R. 3075. 
I have been calling all year for this House to address the already-
staggering burdens that our health care providers are coping with from 
the cuts mandated by the Balanced Budget Act of 1997. In fact, I 
introduced legislation with my colleague Jack Quinn to do just that.
  I wanted very much to support this legislation. Hospitals in New York 
have faced significant operating losses and deficits, and they still 
have $2.6 billion in BBA cuts ahead of them. Thousands of employees 
have been laid off in an attempt to avoid damaging quality health care 
services. Even with significant cuts in personnel, many hospitals are 
hemorrhaging money. The plight of our hospitals, particularly teaching 
and safety net hospitals, is especially grim.
  These premier educational and research institutions have been caught 
between their traditional mission of serving the less fortunate while 
educating new generations of physicians and competing in the managed 
care marketplace. Many states, including California, Pennsylvania, 
Massachusetts and New York, have heard from hospitals reeling from the 
impact of substantial cuts.
  Our hospitals desperately need some relief. But this bill undercuts 
New York hospitals. It contains policy changes to the Graduate Medical 
Education program that would take GME dollars away from New York and 
other states' institutions, and redistribute it to other states. This 
is unfair and it is punitive, and it certainly does not belong in a 
bill intended to help struggling hospitals.
  I hope that these damaging GME provisions will be removed as 
negotiations proceed with the Senate and the White House. My 
colleagues, we need BBA relief desperately--but it must be fair. I will 
oppose the bill as it is written, and will work with my colleagues to 
make sure this bill truly provides relief to our health care 
institutions.
  Mr. SMITH of Washington. Mr. Speaker, I rise today in strong support 
of H.R. 3075, the bill to revise changes made to Medicare payments as a 
result of the Balanced Budget Act of 1997.
  I strongly support this step forward in making the necessary 
adjustments to select changes made by the Balanced Budget Act. These 
changes called for a reduction in Medicare spending of $116 billion 
over five years, but cuts have actually been closer to $200 million, 
according to estimates. These reductions are primarily in Medicare 
reimbursement rates--the amount hospitals and health care providers are 
reimbursed by the Federal Government for treating Medicare patients. As 
a result, many health care organizations are becoming unwilling or 
unable to provide care to Medicare patients.
  I am concerned that the Congress made in 1997 are beginning to impact 
seniors whose health care services are affected by the cuts. Seniors 
who rely on Medicare for their health care coverage are losing access 
to vital services. This legislation is an important first step in 
fixing some of the problems and help ensure that seniors are getting 
the health care they need.
  What's more, the reimbursement rate cuts by the Balanced Budget Act 
disproportionately affected Washington state. Washington was one of the 
most efficient states with regards to waste in the Medicare program, 
the cuts did not properly account for the differences, and treated each 
state equally. This bill makes a few steps forward in address this 
problem.
  I urge my colleagues to support this important step forward in making 
needed changes to our Medicare program.
  Mr. BENTSEN. Mr. Speaker, I rise in strong support of H.R. 3075, a 
bill refining the Medicare provisions of the Balanced Budget Act of 
1997. This is a good bill, and with a few corrections in conference can 
become an even better bill.
  When the Congress passed the BBA in 1997, we were unaware of the 
impact the Medicare provisions would have on Medicare providers, 
specifically the nation's teaching hospitals. As the BBA has been 
implemented, the reductions in Medicare have been far greater than we 
had proposed or anticipated. Therefore, it is appropriate for us to 
revisit this provision of BBA and not allow unintended consequences to 
adversely affect our nation's

[[Page H11625]]

medical education and teaching hospitals including those in my district 
in Texas.
  I am pleased that the bill includes provisions which are similar to 
legislation which I have introduced as it relates to medical residency 
funding and allied health services funding. Specifically, the bill 
includes two provisions affecting the wage base for medical residents. 
Earlier this year, a study conducted by the New England Journal of 
Medicine determined that the existing Graduate Medical Education system 
grossly distorted payments to medical residents in different regions of 
the country. For instance, the study found that residents in New York 
were paid seven times the rate as residents at Memorial-Hermann 
Hospital in my district under the old formula. The bill before us today 
includes a provision from legislation introduced by Mr. Cardin of 
Maryland and myself to equalize such payments based upon regional wage 
indices.
  I am also pleased that the bill includes a provision from a bill 
introduced by Mr. Crane of Illinois and myself which would provide for 
Medicare managed care companies to pay for allied health and skilled 
nursing graduate medical education at our nation's teaching hospitals. 
Unfortunately, the bill nets out such payments at $60 million per year 
from the physician portion of GME and I am hopeful that this can be 
corrected in conference with the Senate.
  Finally, this bill corrects reductions in Indirect Medical Education 
funding and increases funding for Skilled Nursing Facilities. This bill 
also addressed problems related to the outpatient PPS for cancer 
hospitals by exempting such hospitals for two years and does not 
increase beneficiary copayments. And the bill provides a temporary two 
year pass through for orphan drugs, cancer drugs, and new drugs and 
devices which for many patients may be their only hope. The bill also 
makes needed corrections in the home health care provisions of the BBA 
and begins to address the physical and speech therapy caps. And, the 
bill extends coverage for immunosuppressive drugs until October 1, 2004 
and increases the payment rate for pap smears, requiring the Secretary 
of HHS to review payment rates periodically.
  Mr. Speaker, this is a good bill which with a few minor corrections 
in conference can become an even better bill and I urge my colleagues 
to support its passage.
  Mr. SANDLIN. Mr. Speaker, I rise in strong support of H.R. 3075, the 
Medicare Balanced Budget Refinements Act. H.R. 3075 provides much 
needed relief for nearly all health care sectors suffering from the 
unintended consequences of the 1997 Balanced Budget Act. Providing this 
relief is a bipartisan priority and warrants no less than our immediate 
attention.
  Health care providers in the First Congressional District of Texas 
have been hit exceptionally hard by the BBA changes. Medicare issues 
are particularly important to East Texas and other rural areas around 
this country. With the Medicare population making up over 18% of the 
rural population, rural hospitals depend more on Medicare 
reimbursements than their urban counterparts. I have worked hard to 
make sure rural health care receives the special attention it deserves 
in this debate. I am pleased that many of my priorities for rural 
health care relief were adopted by the committee in writing this bill. 
While the bill may not be everything I had wanted, it is certainly a 
first step in the right direction.
  In particular, I am pleased the bill includes some rural specific 
provisions to help maintain access to small rural hospitals. The bill 
permits rural hospitals with fewer than 50 beds to apply for grants of 
up to $50,000 to meet the costs associated with implementing new 
prospective payment systems. the Medicare Dependent Hospital Program, 
established to assist small rural hospitals that are not classified as 
sole community hospitals and that treat relatively high proportions of 
Medicare patients, also is extended through fiscal year 2005 in this 
bill. In addition, provisions to strengthen the Critical Access 
Hospital Program are included as well. These hospitals are small, 
rural, limited service hospitals that are geographically remote, rural 
nonprofit, or public hospitals that are certified by states as a 
necessary provider. These sources of health care are critical to my 
constituents and will benefit from the enactment of H.R. 3075.
  Mr. Speaker, while I am satisfied with many of the bill's provisions, 
it does not go far enough in several areas. First, H.R. 3075 does help 
home health care providers by delaying the 15% reduction until one year 
after implementation of the PPS. However, I urge my colleagues to 
include language in the conference bill that would continue Periodic 
Interim Payments to assist small agencies with cash flow problems. The 
other body has included language in its bill that would preserve this 
system for a year after imposition of the PPS. I strongly support this 
provision and urge its inclusion in the final bill.
  I also support efforts to provide more relief for nursing homes. This 
bill only addresses payment problems for these facilities through a 
six-month fix. This is insufficient assistance and will not give 
nursing homes enough time to adjust to the PPS. I hope this provision 
will be extended in the final product as well.
  Although H.R. 3075 falls short in these areas, as well as in the area 
of prescription drugs where there is a total lack of language to help 
our seniors, I believe it is essential to pass this legislation as a 
first step toward reform. I will continue to fight for more 
improvements to Medicare as we enter the new year, but I urge all of my 
colleagues to vote today for this overdue relief.
  Mr. TERRY. Mr. Speaker, I support H.R. 3075, the Medicare Balanced 
Budget Refinement Act, even though I have some reservation about a few 
of its provisions.
  When I visited my Omaha district over the past year, I frequently met 
with Medicare beneficiaries, hospital administrators and 
representatives of other health care providers. The stories and data 
they provided me about some of the adverse impacts of the Balanced 
Budget Act of 1997 (BBA), including restrictions on services to 
patients, were compelling.
  I share the information I received during these visits with Chairman 
Thomas of the Subcommittee on Health of the Ways and Means Committee. I 
told him that Medicare benefits must meet the needs of our growing 
senior population, and services provided through Medicare must be 
fairly reimbursed.
  I am pleased that this legislation is responsive to Nebraskans' 
concerns. This is well-planned, comprehensive reform legislation that 
addresses the needs of both retirees and health care institutions 
involved in Medicare. It also respects the importance of maintaining 
Medicare's long-term financial solvency.
  I do not agree with all of the provisions in this bill that affect 
teaching hospitals. Specifically, the Indirect Medical Education 
payment freeze proposal and the per resident averaging provision for 
Graduate Medical Education would have a mixed impact on hospitals. Some 
smaller teaching hospitals will lose considerable resources they need 
to train our future doctors.
  I also do not agree with how the Health Care Financing Administration 
(HCFA) has imposed restrictions on Medicare providers that have gone 
well beyond the requirements of the Balanced Budget Act. Restrictions 
adopted administratively will reduce Medicare spending by an estimated 
$80 billion more over the life of the BBA than was anticipated by 
Congress. I have joined a number of my colleagues in protesting HCFA's 
over-reaching regulations.
  I also believe that HCFA should be more aggressive in eliminating the 
billions of dollars of waste and abuse that it acknowledges occur every 
year. I am familiar with the practices of many private insurers 
headquartered in the Midwest who have used private recovery services in 
a successful effort to identify improper payments. HCFA use of a 
similar approach could save billions. As a member of the Government 
Reform Committee concerned about waste in government programs, I will 
continue to encourage HCFA to adopt more such private sector business 
practices, even if only on a trial basis.
  Mr. Speaker, despite my reservations, I support H.R. 3075 and urge 
its approval.
  Mr. RAMSTAD. Mr. Speaker, I rise today in strong support of this 
critically important legislation.
  When we passed the Balanced Budget Act of 1997, we expected savings 
to be accrued to the system. While GAO and MedPAC report that there has 
been no loss in access to services for seniors, we have heard from 
providers across the country that some of these changes have 
significantly impacted providers, and that relief is necessary. Relief 
is particularly needed since the Administration is draining close to an 
additional $100 billion out of the system--something which no Member of 
this House ever envisioned!
  I would like to take a moment to highlight some of the important 
provisions included in H.R. 3075. There are a number of very important 
section addressing payments to hospitals, all of which I support. I 
greatly appreciate the inclusion of a technical ``fix'' for Minnesota's 
Medicaid Disproportionate Share Hospital (DSH problem and improvements 
to funding for graduate medical education.
  Hospitals and patients will also be helped through the provisions to 
create an ``outlier'' adjustment for high-acuity patients. And, as 
Chair of the Medical Technology Caucus, I know hospitals and patients 
will benefit from the new adjusted payments for innovative medical 
devices, drugs and biologicals in the hospital outpatient prospective 
payment system.
  I also support the provisions in the bill which will impact Skilled 
Nursing Facilities (SNF's) by addressing the costs for caring for 
medically-complex patients and those who need prosthetic devices, 
chemotherapy drugs and ambulance and emergency services. I know many 
therapy providers in my state appreciate the adjustments to the 
outpatient rehabilitation limits.
  Being from Minnesota, which has experienced egregiously low payments 
due to our ability to provide quality care efficiently, I am

[[Page H11626]]

particularly supportive of the efforts in the bill to boost 
Medicare+Choice payments. And, until we can reform the system and 
significantly improve the funding formula so more Minnesotans have the 
opportunity to participate in Medicare+Choice, I appreciate the two 
year extension of the cost contract plans.
  I also strongly support the provisions in the bill to ensure frail, 
elderly seniors will continue to enjoy the services they receive 
through EverCare and similar programs. EverCare is an effective health 
care option for the frail elderly living in nursing homes, and along 
with critical report language that will accompany the bill, this 
mention of EverCare will stand as a reminder to HCFA to make 
accommodations necessary for ensuring that frail elderly senior's have 
continued access to the special, intensive care EverCare provides.
  Similarly, I support the section of the bill that extends the life of 
the Community Nursing Organization demonstration projects for another 
two years and requires the Administration to submit a comprehensive 
report on the effectiveness of these programs.
  Lastly, I support the provisions in the bill to limit the 
Administration's use of the Inherent Reasonableness (IR) authority. I 
am hopeful they will send a strong signal to HCFA to curtail its 
abusive use of the authority until we have a chance to review GAO's 
upcoming report on it.
  This bill includes significant relief that will help ensure access to 
care for American seniors. I strongly urge my colleagues to vote for 
this critically important legislation!
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I rise in support of H.R. 
3075, the Medicare Balanced Budget Refinement Act. H.R. 3075 increase 
payments to Medicare providers by approximately $11.5 billion over five 
years and addresses lawmaker and health care provider concerns that 
reforms made in the 1997 Balanced budget Act adversely affects access 
to health care services for Medicare beneficiaries.
  Like many of my colleagues, I have been contacted by several health 
care providers in my district who were concerned about the cuts in the 
Balanced Budget Act of 1997. Although everyone supported a balanced 
budget agreement, no one intended for the consequences to adversely 
affect the health care system.
  The 1997 BBA made comprehensive reforms to Medicare that included 
expanding Medicare's coverage of preventive benefits; providing 
additional choice for seniors; implementing new tools to combat waste, 
fraud, and abuse; and establishing new initiatives to strengthen 
Medicare's fee-for-service payment system.
  Although these reforms were necessary to control Medicare spending, 
some of the effects have resulted in providers not receiving their 
reimbursements in an efficient manner. This bill seeks to resolve some 
of these issues.
  This bill provides hospitals with greater flexibility to participate 
in Medicare as critical access or sole community hospitals and includes 
a number of provisions designed to strengthen and increase flexibility 
for critical access hospitals. It also eases the financial burden on 
hospitals that care for a disproportionate share of low-income 
individuals.
  This bill includes measures designed to ensure the availability of 
home care services. It also increases payments for medically complex 
skilled nursing facility patients and adopts a more equitable structure 
for direct Graduate Medical Education payments to teaching hospitals 
nationwide.
  H.R. 3075 makes a number of changes to the Medicaid program, 
including authorizing states to create a new payment system for 
community health centers and rural clinics that recognize the cost of 
providing health coverage in rural and underserved areas.
  I support this bill and I urge my colleagues to support it as well.
  Mr. McGOVERN. Mr. Speaker, I rise today in support of providing 
relief to America's home health patients, to those people living in 
nursing homes and those people that use our teaching and community 
hospitals. In 1997, I voted against the Balanced Budget Act because it 
would cut $115 billion out of Medicare. However, these cuts were much 
worse than anticipated and they are projected to get worse.
  Today we are debating H.R. 3075, a bill to give some money back to 
those health care delivery systems that were hit so hard by the BBA. 
The specifics of these cuts are staggering. Hospitals in Massachusetts 
are projected to lose $1.7 billion over five years. However, almost 90% 
of the cuts have yet to take place. Community hospitals operating 
margins will decrease 42% from 1997 to 2001. This means that each 
hospital is reimbursed less per patient than it costs them to treat 
each patient. The BBA also set an arbitrary reimbursement cap for 
rehabilitation therapy. We have heard anecdotal stories for three years 
about how patients are reaching their rehabilitation caps after a few 
months. Once these caps are reached, the patient cannot continue to 
receive rehabilitation therapy that is reimbursed by Medicare. Once 
again, the patient suffers because of these arbitrary caps. And home 
health agencies are also hurt by the BBA cuts. Twenty agencies in 
Massachusetts have closed their doors since 1997 and are losing $160 
million annually. The end result of these cuts--the hospital, nursing 
home and home health cuts--is that services for patients decrease.
  While I will vote for this bill, the process under which this bill 
has been brought to the floor disheartens me and I am distressed that 
the bill is so limited in scope. We should be debating the merits of 
this bill under the normal rules of the House, not under suspension. We 
should be able to debate specific amendments. For example, I introduced 
a bill--along with Congressmen Bob Weygand, Tom Coburn and Van 
Hilleary--to provide supplemental funding for home health agencies that 
treat outliers, or the costliest and sickest patients that can still 
receive home health care. Because of the way this bill was brought to 
the floor, this House is prohibited from debating other, meritorious 
BBA-fix proposals.
  I am somewhat encouraged by the ability of the majority party, and in 
particular the Chairman of the Ways and Means Subcommittee on Health, 
to admit their mistakes and work to rescind some of these irresponsible 
Medicare cuts. However, we can do more. I urge my colleagues to vote 
yes for this bill but to work the leadership of the House, the Senate 
and the President to provide more relief for the Medicare patients who 
are hurting because of these irresponsible cuts.
  Mr. PORTMAN. Mr. Speaker, I am delighted that the FY 2000 Foreign 
Operations Appropriations bill we are considering today, H.R. 3196, 
earmarks at least $13 million to carry out the provisions of the 
Tropical Forest Conservation Act, which I introduced with John Kasich 
and Lee Hamilton and was signed into law last year.
  The Tropical Forest Conservation Act expands President Bush's 
Enterprise for the Americas Initiative--EAI--and provides a creative 
market-oriented approach to protect the world's most threatened 
tropical forests on a sustained basis.
  Tropical forests provide a wide range of benefits, literally 
affecting the air we breathe, the food we eat, and medicines that cure 
disease. They harbor 50-90% of the Earth's terrestrial biodiversity. 
They act as ``carbon sinks'', absorbing massive quantities of carbon 
dioxide from the atmosphere, thereby reducing greenhouse gases. They 
regulate rainfall on which agriculture and coastal resources depend, 
which is of great importance to regional and global climate. And they 
are the breeding grounds for new drugs that can cure disease.
  The Tropical Forest Conservation Act builds on the EAI's successes in 
the early 1990s, and links two significant facts of life. First, 
important tropical forests are disappearing at a rapid rate between 
1980 and 1990, 30 million acres of tropical forests--an area larger 
than the State of Pennsylvania--were lost every year. And Second these 
forests are located in less developed countries that have a hard time 
repaying their debts to the United States. In fact, about 50% of the 
world's tropical forests are located in four countries--Indonesia, 
Peru, Brazil and the Congo--and these countries have in the aggregate 
over $5 billion of U.S. debt outstanding.
  The Tropical Forest Conservation Act gives the President authority to 
reduce or cancel U.S. A.I.D., and or P.L. 480 debt owed by any eligible 
country in the world to protect its globally or regionally important 
tropical forest. These ``debt-for-nature'' exchanges achieve two 
important goals. They relieve some of the economic pressure that is 
fueling deforestation, and they provide funds for conservation efforts 
in the eligible country. These is also the power of leveraging--one 
dollar of debt reduction in many cases buys two or more dollars in 
environmental conservation. In other words, the local government will 
pay substantially more in local currency to protect the forest than the 
cost of the debt reduction to the U.S. government.
  For any country to qualify, it must meet the same criteria 
established by Congress under the EAI, including that the government 
has to be democratically elected, cooperating on international 
narcotics control matters, and not supporting terrorism or violating 
internationally recognized human rights. Furthermore, to ensure the 
eligible country meets minimum financial criteria to meet its new 
obligations under the restructured terms, it must meet the EAI criteria 
requiring progress on economic reforms.
  The Tropical Forest Conservation Act is a cost-effective way to 
respond to the global crisis in tropical forests, and the groups that 
have the most experience preserving tropical forests agree. It is 
strongly supported by The Nature Conservancy, Conservation 
International, the World Wildlife Fund, the Environmental Defense Fund 
and others. Many of these organizations have worked with us very 
closely over the last two years to produce a good bipartisan 
initiative.

[[Page H11627]]

  I am delighted that H.R. 3196 includes these funds that will be used 
to preserve and protect millions of acres of important tropical forests 
worldwide in a fiscally responsible fashion.
  Mr. SHAYS. Mr. Speaker, as an original cosponsor of H.R. 3075, the 
Medicare Balanced Budget Refinement Act, I rise in strong support of 
its passage today.
  Our seniors, hospitals and providers have spoken in a loud, clear 
voice. Today we have the opportunity to answer their calls for relief 
by dedicating $11.5 billion over the next five years to strengthening 
Medicare for all seniors.
  The Medicare Balanced Budget Refinement Act, introduced by 
Representative Bill Thomas of California, makes a number of important 
adjustments to the Balanced Budget Act of 1997 (BBA 97) designed to 
ensure seniors have access to the care they need.
  H.R. 3075 eases the financial burden on hospitals that care for a 
disproportionate share of low-income individuals, and includes measures 
to ease the transition for outpatient hospitals switching to the new 
payment system established by BBA 97. In addition, the bill includes a 
number of provisions to ensure the availability of home health 
services, increases payments for medically complex skilled nursing 
facility patients, and creates separate therapy caps for physical and 
speech therapy on a per-facility rather than a per-beneficiary basis.
  In 1997, we passed the Balanced Budget Agreement (BBA 97) which was 
an important first step in placing Medicare on firm financial footing 
while giving seniors options in how they receive care.
  BBA 97 was more successful at slowing the growth of Medicare than 
even Congress envisioned when we passed the legislation in 1997. In 
1998, the growth of Medicare spending slowed sharply, and outlays for 
the program actually declined by 2 percent during the first six months 
of fiscal year 1999--representing the first spending decrease in the 
program's history.
  We need to pass H.R. 3075 to ensure our success in slowing the growth 
of Medicare does not come at the expense of our seniors' health.
  Mr. Speaker, I urge my colleagues on both sides of the aisle to 
support H.R. 3075, a vital, common-sense piece of legislation.
  Mr. ADERHOLT. Mr. Speaker, I would like to lend my support to H.R. 
3075, the Medicare Balanced Budget Refinement Act. This bill represents 
an important first step in strengthening the long-term future of the 
Medicare program.
  The hospitals in my district are in serious financial trouble. These 
hospitals, as well as all of the others in Alabama are struggling to 
make up shortfalls in the millions of dollars, but they refuse to 
compromise the quality of care they provide. The provisions of this 
legislation help rural hospitals, and I am supporting the bill, but it 
is only a first step.
  Balancing the budget is important, but we need to periodically 
examine the effects of previous legislation. Now, the evidence is 
pouring in from all over the country: we need immediate relief in the 
form of this bill and we must take an even deeper look early next year.
  Thank you Congressman Thomas for recognizing the enormity of the 
consequences. Let's pass this legislation today and come back in 
January prepared to find a permanent solution to this health care 
crisis.
  The SPEAKER pro tempore (Mr. LaHood). The question is on the motion 
offered by the gentleman from Texas (Mr. Archer) that the House suspend 
the rules and pass the bill, H.R. 3075, as amended.
  The question was taken.
  Mr. THOMAS. 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 388, 
nays 25, not voting 20, as follows:

                             [Roll No. 573]

                               YEAS--388

     Abercrombie
     Aderholt
     Allen
     Andrews
     Archer
     Armey
     Bachus
     Baird
     Baker
     Baldacci
     Baldwin
     Ballenger
     Barcia
     Barr
     Barrett (NE)
     Barrett (WI)
     Bartlett
     Barton
     Bass
     Bateman
     Becerra
     Bentsen
     Berkley
     Berman
     Berry
     Biggert
     Bilbray
     Bilirakis
     Bishop
     Blagojevich
     Bliley
     Blumenauer
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bonior
     Bono
     Borski
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brady (TX)
     Brown (FL)
     Brown (OH)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Camp
     Campbell
     Canady
     Cannon
     Capps
     Capuano
     Cardin
     Carson
     Castle
     Chabot
     Chambliss
     Chenoweth-Hage
     Clayton
     Clement
     Clyburn
     Coble
     Coburn
     Collins
     Combest
     Condit
     Conyers
     Cook
     Cooksey
     Costello
     Cox
     Crane
     Cubin
     Cummings
     Cunningham
     Danner
     Davis (FL)
     Davis (IL)
     Davis (VA)
     Deal
     DeFazio
     DeGette
     Delahunt
     DeLauro
     DeLay
     DeMint
     Deutsch
     Diaz-Balart
     Dicks
     Dingell
     Dixon
     Dooley
     Doolittle
     Doyle
     Dreier
     Duncan
     Dunn
     Edwards
     Ehlers
     Ehrlich
     Emerson
     English
     Eshoo
     Etheridge
     Evans
     Everett
     Ewing
     Farr
     Fattah
     Filner
     Fletcher
     Foley
     Ford
     Fossella
     Fowler
     Frank (MA)
     Franks (NJ)
     Frelinghuysen
     Frost
     Gallegly
     Ganske
     Gejdenson
     Gekas
     Gephardt
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Gonzalez
     Goode
     Goodlatte
     Goodling
     Gordon
     Goss
     Graham
     Granger
     Green (TX)
     Green (WI)
     Greenwood
     Gutierrez
     Gutknecht
     Hall (OH)
     Hall (TX)
     Hansen
     Hastings (FL)
     Hayes
     Hayworth
     Hefley
     Herger
     Hill (IN)
     Hill (MT)
     Hilleary
     Hilliard
     Hinojosa
     Hobson
     Hoeffel
     Hoekstra
     Holden
     Holt
     Hooley
     Horn
     Hostettler
     Houghton
     Hoyer
     Hulshof
     Hunter
     Hutchinson
     Hyde
     Inslee
     Isakson
     Istook
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Jenkins
     John
     Johnson (CT)
     Johnson, E. B.
     Jones (NC)
     Jones (OH)
     Kaptur
     Kasich
     Kelly
     Kildee
     Kilpatrick
     Kind (WI)
     King (NY)
     Kingston
     Kleczka
     Knollenberg
     Kolbe
     Kuykendall
     LaFalce
     LaHood
     Lampson
     Lantos
     Largent
     Larson
     Latham
     LaTourette
     Lazio
     Leach
     Lee
     Levin
     Lewis (CA)
     Lewis (GA)
     Lewis (KY)
     Lipinski
     LoBiondo
     Lofgren
     Lucas (KY)
     Lucas (OK)
     Luther
     Maloney (CT)
     Manzullo
     Mascara
     Matsui
     McCarthy (NY)
     McCollum
     McCrery
     McGovern
     McHugh
     McIntosh
     McIntyre
     McKeon
     McKinney
     McNulty
     Meek (FL)
     Meeks (NY)
     Menendez
     Metcalf
     Millender-McDonald
     Miller (FL)
     Miller, Gary
     Minge
     Mink
     Moakley
     Moore
     Moran (KS)
     Moran (VA)
     Morella
     Murtha
     Myrick
     Napolitano
     Neal
     Nethercutt
     Ney
     Northup
     Nussle
     Oberstar
     Obey
     Olver
     Ortiz
     Ose
     Oxley
     Packard
     Pallone
     Pascrell
     Pastor
     Pease
     Pelosi
     Peterson (MN)
     Peterson (PA)
     Petri
     Phelps
     Pickering
     Pickett
     Pitts
     Pombo
     Pomeroy
     Porter
     Portman
     Price (NC)
     Pryce (OH)
     Quinn
     Radanovich
     Rahall
     Ramstad
     Rangel
     Regula
     Reynolds
     Riley
     Rivers
     Roemer
     Rogan
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Rothman
     Roukema
     Roybal-Allard
     Royce
     Rush
     Ryan (WI)
     Ryun (KS)
     Sabo
     Salmon
     Sanchez
     Sanders
     Sandlin
     Sawyer
     Saxton
     Schaffer
     Schakowsky
     Scott
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherman
     Sherwood
     Shimkus
     Shows
     Shuster
     Simpson
     Sisisky
     Skeen
     Skelton
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Snyder
     Souder
     Spence
     Spratt
     Stabenow
     Stearns
     Stenholm
     Strickland
     Stump
     Stupak
     Sununu
     Sweeney
     Talent
     Tancredo
     Tanner
     Tauscher
     Tauzin
     Taylor (MS)
     Terry
     Thomas
     Thompson (CA)
     Thompson (MS)
     Thornberry
     Thune
     Thurman
     Tiahrt
     Tierney
     Toomey
     Traficant
     Turner
     Udall (CO)
     Udall (NM)
     Upton
     Velazquez
     Vento
     Visclosky
     Vitter
     Walden
     Walsh
     Wamp
     Waters
     Watkins
     Watt (NC)
     Watts (OK)
     Waxman
     Weldon (FL)
     Weldon (PA)
     Weller
     Wexler
     Weygand
     Whitfield
     Wicker
     Wilson
     Wise
     Wolf
     Woolsey
     Wu
     Wynn
     Young (AK)
     Young (FL)

                                NAYS--25

     Ackerman
     Coyne
     Crowley
     Doggett
     Engel
     Forbes
     Hinchey
     Kennedy
     Klink
     Kucinich
     Lowey
     Maloney (NY)
     Markey
     McDermott
     Miller, George
     Nadler
     Owens
     Paul
     Payne
     Sanford
     Serrano
     Slaughter
     Stark
     Towns
     Weiner

                             NOT VOTING--20

     Bereuter
     Calvert
     Clay
     Cramer
     Dickey
     Hastings (WA)
     Johnson, Sam
     Kanjorski
     Linder
     Martinez
     McCarthy (MO)
     McInnis
     Meehan
     Mica
     Mollohan
     Norwood
     Reyes
     Rodriguez
     Scarborough
     Taylor (NC)

                              {time}  1200

  Mr. KLINK and Mr. TOWNS changed their vote from ``yea'' to ``nay.''
  Mr. RUSH changed his vote from ``nay'' to ``yea.''
  So (two-thirds having voted in favor thereof) the rules were 
suspended and the bill, as amended, was passed.
  The result of the vote was announced as above recorded.
  The title of the bill was amended so as to read: ``A bill to amend 
titles

[[Page H11628]]

XVIII, XIX, and XXI of the Social Security Act to make corrections and 
refinements in the medicare, medicaid, and State children's health 
insurance programs, as revised by the Balanced Budget Act of 1997.''.
  A motion to reconsider was laid on the table.
  Stated for:
  Ms. McCARTHY of Missouri. Mr. Speaker, during rollcall vote No. 573, 
on H.R. 3075, I was unavoidably detained. Had I been present, I would 
have voted ``yes.''
  Mr. MICA. Mr. Speaker, on rollcall No. 573, I was unavoidably 
detained. Had I been present, I would have voted ``yea.''

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